UK Government Faces Bilateral Compensation Claim from Jingye Group over British Steel Nationalization

BEIJING — The Chinese firm that previously owned British Steel has formally requested compensation from the UK government for alleged investment losses after the company’s recent nationalization.

The British government assumed operational control of the company a year ago, shortly after Jingye Group indicated it might shut down the blast furnaces at its Scunthorpe plant — England’s final facility producing virgin steel from raw materials.

In a WeChat statement, Jingye Group accused the nationalization of damaging the UK government’s credibility, unsettling global investors and inflicting substantial losses on its operations and on British taxpayers, and it called on the UK to cease what it called violations of international investment principles.

The firm declared that it had commenced negotiations under applicable bilateral investment treaties, preserving all rights, including the possibility of international arbitration, and announced that it would advocate for British taxpayers in any legal action against the UK government and British Steel’s management, though it provided no details on the procedural steps.

It asserted that the UK ignored Jingye’s ongoing investments and contributions and offered virtually no compensation.

The UK government announced that an independent assessment will be conducted to decide if any compensation is due to Jingye Group.

On July 17, the Department for Business and Trade unveiled the decision, stating it would safeguard thousands of jobs and protect the UK’s national interests by securing a reliable supply of domestically produced steel for major infrastructure projects and defense applications.

British Steel, along with its predecessor companies, has been producing steel at Scunthorpe for over 130 years, building on Britain’s legacy of advancing steelmaking technology during the Industrial Revolution, and the plant presently employs roughly 2,700 workers.

Jingye acquired British Steel in 2020, claiming it rescued the company from a potential crisis.

On Saturday, the Chinese Foreign Ministry warned that the UK’s handling of this matter will significantly affect how Chinese investors perceive the British investment climate and the government’s credibility.

The statement called on the UK to respect market principles and contractual obligations, and to seek mutually acceptable solutions regarding compensation and related issues.

It reiterated that China supports enterprises in defending their legitimate rights through legal channels.

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