Radio Corporation of America v China

Radio Corporation of America v China was a 1935 arbitral proceeding to determine whether a concession granted by the government of China (specifically the Chinese National Council of Reconstruction)[1] for operation of radio communications between the United States and China was exclusive and could be considered to prohibit a similar concession to another company.

Background

The Radio Corporation of America (RCA) was founded in 1919. At the time all radio or telegraphic traffic between China and the US, including official communications, was run through either German radio or British cables. Therefore, US Navy wanted a reluctant RCA to seek a concession in China (even though RCA's other Asian concessions were operating at a loss). RCA agreed and the transmitter was completed in 1928. When the Mackay Radio & Telegraph Company, also an American interest, signed a similar agreement with China in 1932, RCA claimed it was a breach of contract.[2]

Decision

The tribunal said the initial concession could not be construed as limiting the government's powers:[3]

The Chinese Government can certainly sign away a part of its liberty of action, and this also in the field of international radio-telegraphic communications, and of its cooperation therein. It can do so as well in an implicit manner, if a reasonable construction of its undertakings leads up to that conclusion. It will, as any other party, be bound by law and by any obligations, legally accepted. But as a sovereign government, on principle free in its restriction of its freedom of action, unless the acceptance can be ascertained distinctly and beyond a reasonable doubt.

References

Grant, John P. (2009). Parry and Grant Encyclopaedic Dictionary of International Law. Oxford University Press. p. 496.
Maurer, Noel (2013). The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893-2013. Princeton University Press. Retrieved 16 January 2020.
Krajewski, Markus. Research Handbook on Foreign Direct Investment. 2019: Edward Elgar. p. 296. Retrieved 16 January 2020.CS1 maint: location (link)

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[1] Grant, John P. (2009). Parry and Grant Encyclopaedic Dictionary of International Law. Oxford University Press. p. 496.

[2] Maurer, Noel (2013). The Empire Trap: The Rise and Fall of U.S. Intervention to Protect American Property Overseas, 1893-2013. Princeton University Press. Retrieved 16 January 2020.

[3] Krajewski, Markus. Research Handbook on Foreign Direct Investment. 2019: Edward Elgar. p. 296. Retrieved 16 January 2020.CS1 maint: location (link)