Welcome to this week's edition of The Weekly Briefing!
Where we break down the commercial stories law students should actually be paying attention to.
China Rebukes British Steel Nationalisation
Currently, British Steel (despite having its operations controlled by the UK) is owned by Chinese company Jingye Group. But now, the UK wants total control of this company.
After Keir Starmer pledged to bring the struggling steel company under British control, China's commerce ministry has said that this move "seriously infringed upon Jingye's legitimate rights and interests and severely undermined the confidence of Chinese companies investing in the UK". The ministry also called on Britain to "faithfully fulfil" its obligations under the China–UK Bilateral Investment Treaty, which requires any nationalisation to come with compensation equivalent to the value of the nationalised company. For example, if British Steel was worth £2bn at the time of nationalisation, the UK would have to pay China £2bn.
However, the UK argues that because of the extreme daily money loss British Steel is dealing with, no one would want to buy British Steel, making its market value £0, meaning the UK doesn't own China anything. China argues that because of all the money its sunk into British Steel and because they believe the takeover of British Steel by , they deserve a payout of at least £1bn.
To settle this exact dispute, the UK government is appointing an independent valuer to conduct a formal assessment on what British Steel was worth at the time of nationalisation. If Jingye rejects the valuer's conclusion (which is highly likely if the valuation comes back as zero), the case will head to international investor-state arbitration tribunals. Arbitrators will have to rule on whether "market value" under the treaty means the net worth of a failing business or the total investment capital brought into the country.
Uber Calls in Swathe of Law Firms to Bid for Delivery Hero
Ten law firms are advising on a takeover that could create the biggest delivery app outside Asia.
While the earnings Uber will initially get from the acquisition of Delivery Hero are modest (about 5% of the $14.8bn it will invest), acquiring Delivery Hero will allow Uber to expand its food delivery services into areas such as South Korea and the Middle East. This will allow Uber to keep these customers on the app for longer by offering a wider range of services. Freshfields and Wachtell Lipton Rosen & Katz are advising Uber, and Cooley was called in for advice on the financing aspects of the deal. Other law firms involved include Sullivan & Cromwell (acting as legal counsel to Delivery Hero) and Paul Weiss (who are helping Delivery Hero to sell its business in the 14 markets where it competes with Uber Eats).
All of this is part of Uber's bid to become a "superapp" the likes of WeChat. Superapps have had a hard time flourishing outside of Asia, but with Uber already offering train and plane booking via the app, a Western superapp may not be as fanciful if Uber are able to secure its footing in the food delivery space in Asia.
Thank you for reading this week's Weekly Briefing.
We'll be back next week with more stories future lawyers should be paying attention to.