Radio Corporation of America v. China
On November 10, 1928, the Republic of China entered into an agreement with the Radio Corporation of America (RCA) for the operation of a radio telegraphic circuit for commercial communications between China and the United States of America (Traffic Agreement). Subsequently, in 1932, China entered into a similar agreement with the Mackay Radio and Telegraph Company.
RCA claimed that under the terms of the Traffic Agreement, China was not at liberty to enter similar agreements with other parties and had violated the Traffic Agreement by entering such an agreement with the Mackay Radio and Telegraph Company. RCA submitted its claim to arbitration pursuant to paragraph 10 of the Traffic Agreement.
The Tribunal considered whether the express or implied terms of the Traffic Agreement limited China’s ability to conclude similar agreements with third parties. It also considered whether the Traffic Agreement constituted a partnership or joint venture that would similarly limit China. The Arbitral Tribunal unanimously held that the Traffic Agreement did not expressly limit China and that any implied restriction should be distinctly shown, which was not established based on the language of the Traffic Agreement. The Tribunal ruled that the Traffic Agreement did not create a partnership or joint venture because there was no common profit making object, nor did the language and terms create such obligations. The Tribunal allocated the costs of the arbitration equally between the parties.
|Name(s) of Claimant(s)||Radio Corporation of America (Private entity )|
|Name(s) of Respondent(s)||The National Government of the Republic of China (State)|
|Names of Parties||-|
|Administering institution||Permanent Court of Arbitration (PCA)|
|Type of case||Contract-based or other arbitration|
|Subject matter or economic sector||Information and communication|
|Rules used in arbitral proceedings||1907 Convention for the Pacific Settlement of International Disputes|
|Treaty or contract under which proceedings were commenced||(Contract)ChinaUnited States|
|Language of Proceeding||English|
|Seat of Arbitration (by Country)||Netherlands|
Dr. J.A. VAN HAMEL (Holland), Member of the Amsterdam Bar, Neutral Judge in the Hungaro-Yougoslav Mixed Arbitral Tribunal, some time High Commissioner in Danzig and Professor of Law at the University of Amsterdam;
M. AUGUSTE HUBERT (Belgium), Président du Comité International Radio-Maritime;
Dr. REINHOLD FURRER (Switzerland), Directeur Général des Postes et des Télégraphes Suisses.
|Representatives of the Claimant(s)||
Dr. HEINRICH SCHULOFF, Advocate, Vienna
|Representatives of the Respondent(s)||
Mr. MODDERMAN, Advocate, Amsterdam
|Representatives of the Parties|
|Number of Arbitrators in case||3|
|Date of commencement of proceeding||01 January 1934|
|Date of issue of final award||13 April 1935|
|Length of Proceedings||1-2 years|