Jingye, a Chinese steel manufacturer, has launched formal proceedings to claim compensation from the UK government after the nationalisation of British Steel’s Scunthorpe plant. The move comes after prolonged negotiations over financial settlement terms did not result in an agreement. The company is leveraging the UK–China bilateral investment treaty to pursue its claim, which sources suggest could surpass £1 billion.
The core of the dispute is the UK government’s decision to nationalise British Steel, citing national security concerns and the importance of maintaining domestic steel production capabilities. The decision was made amid fears of potential plant closure and significant job losses. Jingye had acquired British Steel in 2020 and had previously contemplated closing operations due to financial strains and a global surplus in the steel market. The UK government’s intervention averted the shutdown by transferring control of the plant to state ownership.
Jingye contends that it deserves compensation for the losses and investments it incurred following its acquisition of British Steel. On the other hand, the UK government argues that nationalisation was crucial to safeguarding strategic industrial capacity and preserving employment. If no resolution is found during the treaty’s consultation period, the dispute is expected to proceed to international arbitration, which could further complicate UK–China economic relations.
As the dispute unfolds, the UK is also reassessing its broader steel industry policy. This includes reviewing import restrictions and considering restructuring the domestic sector to adapt to long-term shifts in production and ownership. Analysts caution that the ongoing case might exacerbate tensions in economic dealings between the UK and China.