State Succession to BITs in the Context of the Transfer of Territory of Macao to China: Lessons Learned from the Sanum Saga

Abstract

This article examines the Sanum award and two decisions of Singapore courts dealing with the question of whether the China-Laos bilateral investment treaties (BIT) extended to Macao after the cession of this territory to China in 1999. The award and the decisions provide the first comprehensive analysis regarding the question of state succession to BITs. The article examines how these decisions have analysed the ‘moving treaty frontiers’ principle and the different exceptions set out under Article 15 of the 1978 Vienna Convention on Succession of States to Treaties in the specific and unique context of a cession of territory. These decisions also contain the first assessment of the territorial scope of application of Chinese BITs regarding Special Administrative Regions (SAR) after their handover to China. The article discusses the likely impact of the findings of the award and the decisions on the application of other Chinese BITs to the territory of Macao and that of Hong Kong.