Wingtech announces USD 8 Billion damages claim against the Netherlands in Nexperia-dispute

A recent article in the South China Morning Post (SCMP) reports that the (indirect) shareholders of Nexperia are planning to initiate arbitration proceedings against the Dutch State following the intervention by Dutch Minister Karremans and the Enterprise Chamber of the Amsterdam Court of Appeal. In this blog, Onno Hennis outlines what is currently known on the basis of public sources and offers a preliminary assessment of the likely outcome of the case.

Background

In October 2025, Nexperia became the subject of regulatory intervention. Following U.S. sanctions measures, attempts by CEO Wing to tighten its grip on the European part of Nexperia, and the intended transfer of production assets to China, Minister Karremans “froze” the situation at Nexperia’s headquarters pursuant to the Dutch Emergency Act on the Availability of Goods (Wet beschikbaarheid goederen). One day later, the Enterprise Chamber suspended Wing as director, temporarily transferred the shares to an independent administrator, and appointed a new independent interim director.

Geopolitical developments

In response to the intervention, China imposed export restrictions on the supply of chips from China, leading to acute shortages in the global automotive industry. After several weeks, China lifted the export restrictions, while Minister Karremans provisionally suspended the measures he had imposed. Meanwhile, geopolitical tensions surrounding the company persist, and there remains no clear perspective for the future of its global operations.

Statement by Wingtech

According to an official statement by Wingtech – quoted in the newspaper article but not available online in English and assumedly made during the shareholders meeting late December 2025 – the shareholder of Nexperia (Hong Kong–based Yuching Holding Limited) and its shareholder (China-based Wingtech Technology Co., Ltd.) are pursuing a “multi-track legal strategy,” which includes “preparations for bilateral investment treaty (BIT) international arbitrations.” More specifically, Wingtech stated that it intends “to seek compensation equivalent to the full value of Nexperia—around US$8 billion—if the issue is not settled by April 15.”

Notice of dispute

According to the statement, both Yuching and Wingtech sent formal notices of dispute on 15 October 2025 – two weeks after the intervention by the Minister and the Enterprise Chamber. Under the relevant bilateral investment treaties (for Yuching, the HK-NL BIT; for Wingtech, the China-NL BIT), the initiation of arbitration proceedings requires that six months have elapsed since the notice of dispute was submitted and that the dispute has not been amicably settled during that period (Article 10).

Arbitration

After the six-month cooling-off period, Yuching and Wingtech may initiate arbitration proceedings under the UNCITRAL Rules and/or the ICSID Convention. Should they do so, an arbitral tribunal will be constituted in accordance with the chosen arbitration rules. The tribunal will consist of three arbitrators: one appointed by Yuching/Wingtech, one by the Dutch State, and a presiding arbitrator jointly appointed by the two party-appointed arbitrators.

Course of the proceedings

In arbitration, parties enjoy significant autonomy in determining the procedural framework. If the parties cannot agree on deadlines for written submissions, the presentation of evidence, or the examination of witnesses, the arbitral tribunal will decide on such procedural matters. As a result, it is not yet possible to estimate how long the anticipated proceedings may take.

Confidentiality

Arbitration is confidential by nature. As a rule, the parties will therefore not make any public statements about the content or the outcome of the arbitration proceedings. Although the ICSID Rules and the UNCITRAL Rules provide for a so-called transparency regime, the parties must agree to its application. If they do not, the procedural documents will remain confidential and the hearings will be held behind closed doors.

(Indirect) expropriation

It is expected that Yuching and Wingtech will base their damages claims on the provisions in the BITs protecting investors against (indirect) expropriation. The China–Netherlands BIT provides that the Netherlands “shall [not] expropriate, nationalise or take other similar measures [..]” unless the expropriation (i) is in the public interest, (ii) is non-discriminatory, and (iii) is accompanied by compensation equivalent to the fair market value (Article 5). The Hong Kong–Netherlands BIT appears even stricter, providing that “investors of either Contracting Party shall not be deprived of their investments nor subjected to measures having effect equivalent to such deprivation [..]” unless this occurs “lawfully” and “on a non-discriminatory basis for a public purpose related to internal needs”, with compensation.

Prospects of success?

The likelihood that an arbitral tribunal would hold the Dutch State liable for expropriation appears limited. In assessing such a claim, the tribunal would consider whether the measures effectively and substantially deprived Yuching and Wingtech of control over, or the economic use and enjoyment of, their investment. Relevant factors include the severity and duration of the interference, the purpose and proportionality of the measures, the presence of discrimination, and compliance with due process.

Although temporary measures may, in certain circumstances, qualify as expropriation, the Minister has already suspended the effects of the measures. Moreover, the Enterprise Chamber imposed its interim measures in the interest of Nexperia and its business (and thus arguably also in the interest of its shareholder). In addition, the intervention took place in the public interest and followed a lengthy history of consultations with the Dutch authorities. There is therefore little indication of arbitrary or discriminatory conduct. Furthermore, all administrative and judicial remedies remain available.

Fair and equitable treatment

Another – and potentially stronger – ground on which Yuching and Wingtech may rely is the obligation that investments “shall at all times be accorded fair and equitable treatment” and that the Netherlands “shall [not] take any unreasonable or discriminatory measures against the management, maintenance, use, enjoyment and disposal of the investments.”

Under this standard, Yuching and Wingtech could argue that their right to due process was infringed because the Enterprise Chamber, for the first time, imposed immediate measures without prior hearing. On the other hand, the Enterprise Chamber promptly scheduled a hearing at which Yuching was given the opportunity to present its defence in full. Moreover, claims of ‘judicial expropriation’ are subject to a very high threshold.

They might also argue under this standard that the Minister improperly relied on a statute dating from 1952 that was allegedly ill-suited for the circumstances at hand. While such arguments may be conceivable, it remains relevant that the effects of the measure have since been suspended.

Ultimately, a key issue will be whether the reasons underlying the intervention by Minister Karremans and the Enterprise Chamber were justified. If it is established that Wing was indeed attempting to appropriate the European operations and that plans existed to transfer funds, production assets and intellectual property to China, the measures are likely to be viewed as reasonable and proportionate in the arbitration proceedings.

Umbrella and MFN clause

Finally, both BITs also contain an umbrella clause and a most-favoured-nation clause (see Article 3), on the basis of which Yuching and Wingtech may potentially invoke additional legal grounds beyond those explicitly set out in the BITs.

Preliminary Conclusion

It is too early to draw firm conclusions regarding the legal merits of the Nexperia case, let alone the potential course of the announced arbitration proceedings. Nonetheless, based on what has been reported in the media to date, it does not appear likely that the Dutch State can successfully be held liable for the economic consequences of the intervention.