Mere inadequacy or non-performance of a contract does not quantify to an expropriation. %�쏢 A Handbook (2015), 963-964; Rudolf Dolzer/ Christoph Schreuer, Principles of International Investment Law (2012), 99. Generally, under customary international law, when a state breaches its obligations or exercises its power in a way that deprives a party of its property, that . The core concept of expropriation is rationally clear: it is the governmental taking of property for which compensation is required. The Tribunal in. The requirements for the lawfulness of an expropriation (public purpose, prohibition of discrimination, requirement to pay compensation) have remained extensively uninterrupted. [26] Waste Management, Inc. v. United Mexican States, Award, 2 June 2000, 5 ICSID Reports 443 (Keith Highet, dissenting at462. Copy this link, or click below to email it to a friend. A direct expropriation occurs upon the forcible deprivation of title or loss of physical possession of the property constituting the investment by administrative or legal measures. This is a well-reasoned judgment by the Delhi High Court and is a step forward in improving India's image as a pro-arbitration jurisdiction. ", Ownership or enjoyment can be said to be "neutralized" where a party no longer is in control of the investment, or where it cannot direct the day-to-day operations of the investment. Standards of treatment available to foreign investors in international law are the focus of this book, which includes detailed examination of the topic of expropriation in various chapters. Draws out the substantive principles of the international law on expropriation through detailed examination of existing case law; Examines the interplay between expropriation and other standards of treaty protection, namely fair and equitable treatment; Examines remedies for . Foreign investment is critical for economic development in developing countries because it helps to reduce poverty and increase . Sometimes the latter are, described as measures tantamount to expropriation or as measures having equivalent effect. Expropriation is the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public. [32] Wena Hotels Ltd. v. Arab Republic of Egypt, Award, 8 December 2000, 6 ICSID Reports 68. China's Practice in International Investment Law domestic laws' 3 and BITs. 14 However, over the years, and especially in the postcolonial debates, some commentators and tribunals started considering . "'Indirect Expropriation' and the 'Right to Regulate' in International Investment Law" identifies the main criteria found in investment agreements and used by tribunals to articulate the difference between the two concepts. Direct takings involve the transfer of title and/or outright physical seizure of the property. See pp. L. Yves Fortier, Stephen L. Drymer; Indirect Expropriation in the Law of International Investment: I Know It When I See It, or Caveat Investor, ICSID Review - F This chapter studies a third principal standard of treatment for foreign investors: protection from unlawful expropriation. The deprivation would have to be permanent or for a substantial period of time. 2d ed. �&�Gj�#��a��l^n� ��d.��ݩ�'�'Α�]J��� r���Y�%wT4�]h�%\Ҁ��v�;D�%�m�YR�|=�B��h9��� ��a��T˓�@ ���H�9��"w>s�s����1����/�8��������#��Cb�ێ��J������#x�Ƨ��O��r�q��g �H�:[&��u������b#t�� r�O3�Ὸ��o� T�J$X�������L��`�\_˫*�D=���Ֆܝ�H䓙3��Pps��b�,Ϫ\�|yC�ѝ�h>c�.��� �!U�q:pP3��P[�7���zt�!�\ҥ$���P�D�RܰT��h�e� h������&^g�hr�s�D�cj����~�A�g��Cw���u�ғ�M�q�d�42���n&���q �N{��.|�Q�@Q�M�xҧ�?B=ڦ ������IC�t��/���d��n��^�Vӗ��[��lӪ�L��`�H�ݶ It is a well recognised rule in international law that the property of aliens cannot be taken, whether for public purposes or not, without adequate compensation. Diplomatic or military pressure is not to be used. Many of the hurdles in this area arise when tribunals gauge the likely future profitability of expropriated enterprises. The Administration must, even if not explicitly provided for by the Law: (a) examine the need for forced expropriation, ie investigate 25 whether it is possible to serve the public benefit by a means milder than forced expropriation and (b) limit the extent and intensity of the forced expropriation to the absolutely necessary measure. “It is not the physical invasion of property that characterizes nationalizations or expropriations that has assumed importance, but the erosion of rights associated with ownership by State interferences. 604 3 Zeynep Aysun Armagan 16/Spring International Investment Law distinctive feature of traditional expropriation under international law. T1 - Expropriation of alien property and the principle of non-discrimination in international law of foreign investment: an overview. This book will also be of use to practitioners and experts of development law who are looking for an up-to-date perspective of the field. Indirect Expropriation in the Law of International Investment: I Know It When I See It, or Caveat Investor. Several terms, in addition to 'indirect' are used to describe indirect expropriation, for example, 'de facto', 'creeping' expropriation, or measures 'tantamount to' or 'equivalent to' expropriation. Jörg Kammerhofer . Found insideThis book offers a systematic analysis of this interaction, exploring the role of principles of justice in investment law, comparing investment arbitration with other courts, and examining case studies on human rights and protection ... ARB(AF)/98/2 Dissenting Opinion of Keith Highet. The BIT disputes between foreign investors and host states have covered a very wide array of regulatory measures including extremely sensitive ones from host State’s perspective such as environmental measures; public health regulations; monetary law and policy; and taxation laws and policies. Brownlie 622-4. It is a particularly important subject because foreign investment is pertinent to the growth of developing economies. The DHC while interpreting the public international law in letter and spirit held that such investment treaties could not be compared to international commercial arbitrations. Bail-ins and the international investment law of expropriation: in and beyond Cyprus It would be unfair to say that there is no international law of money. �DfW��;+��K�Z|;U��A t����)�)�ۈj:�I\��*ԉ���d�$3"E::m���KyVoe�-�yVu%�FQ_�^d�#�ռ���j]#Q�Jӭ���#Nĭy��tw�(��WO�׺HG�� bo(=��+���8F�� J�9�T�} M�)�H��3~�Ճdч_�����`��pI���U���@xQMo"��i�kd�����'ɲy�w�Ġ�dU� In General Principles of Law in Investment Arbitration, the authors address selected general principles of law, assessing their functions in investment arbitration. This included the development of minimum standards for lawful taking of foreign property, including that expropriation must be for a public purpose; applied in a nondiscriminatory manner; carried out with due process of law; and accompanied by payment of prompt, adequate, and effective compensation. QQ;�_A8UH-�:�:q�����I����,���t� The 2016 Indian Model BIT covers both direct and indirect expropriation. Most of these mostly bilateral treaties contain explicit guarantees against uncompensated expropriation and provide that fair market value should be the amount of compensation due in case of an expropriation. (3) The expropriation will be for a public purpose, i.e., 3. The Oxford Handbook of International Investment Law. For a long time, the question of the amount of compensation due in case of an expropriation overshadowed the legal debate. [S]ome values are enjoyed under an implied limitation and must yield to the police power. expropriation.6 I will argue that international investment law is more favorable to investor's 1 Banco Nacional de Cuba v Sabbatino, 376 U.S. 398, 428 (1964), VI, 17 2 SANTIAGO MONTT, STATE LIABILITY IN INVESTMENT TREATY ARBITRATION: GLOBAL CONSTITUTIONAL AND In particular, this book scrutinises how concepts, principles and rules developed in the context of such sub-fields could inform the content of investment law. Sornarajah, M. The International Law on Foreign Investment. Valuation criteria shall include going concern value, asset value including declared tax value of the tangible property, and other criteria, as appropriate, to determine fair market value. Bungenberg, M., J. Griebel, S. Hobe, and A. Reinisch, eds. From the perspective of a foreign investor, the most important provisions in any international treaty for the protection of foreign investment are the provisions dealing with protection against . (d) accompanied by the payment of prompt, adequate and effective compensation. Examination of the concept of "takings" in the context of international law and international investment agreements. 429–491. W. Kühn and U. Wiegel, ‘The Application of International Law and Treaty Provisions by Arbitrators’ (2003) 4 The Journal of World Investment 451, 464. Protection against expropriation is a core guaranty of international investment law. BITs are treaties between two countries aimed at protecting investments made by investors of both countries. This increase in the number of BITs has been followed by an increase in the number of disputes between foreign investors and host states. It has always been beyond doubt that a State has the power and the right to expropriate the property of nationals and of foreigners, in principle. The typical form in which expropriations take place nowadays is indirect expropriations. NAFTA (North American Free Trade Agreement), Article 1110: Expropriation and Compensation[5]. Found insideThis book provides an ideal introduction to the fundamentals of international investment law and dispute settlement for students or practitioners. A Handbook (2015), 963-964; Rudolf Dolzer/ Christoph Schreuer, Principles of International Investment Law (2012), 99. ~ ��Մf�k���� oTo,��[�k^3 N2 - The principle of non-discrimination is recognized in international customary practice, as part of general international law, judicial decisions, and treaty . Forceful Intervention for Protection of Human Rights in Af... Human Rights and Regional Protection, Relativism and Unive... International and Non-International Armed Conflict, Detent... International Criminal Law, Complicity in, International Criminal Tribunal for Rwanda (ICTR). For this reason, tribunals have increasingly accepted that expropriation must be analyzed inconsequential rather than formal terms. He is an academic, policy advisor and practitioner based in London specialising on international and comparative law, with a particular focus on dispute resolution and foreign investment law. Indirect expropriation. In cases of direct expropriation, there is an open, cogitate and explicit intent, as mirrored in a formal law or decree or physical act, to bereave the owner of his or her property through the transfer of title or unequivocal seizure. It takes stock of the already significant body of arbitral jurisprudence dealing with expropriation claims grounded in, or relating to, the acts or omissions of courts, with a view to developing a coherent theory of judicial expropriations. Found inside'...This book [...] goes beyond stating what the law is and focuses on controversies occurring within this area of the law... an excellent introduction to this complex area of international law for newcomers to the subject' Kate Miles, ... 10. His doctrine, which remains part of many Latin American constitutions, provides that foreign States and foreign nationals should negotiate claims by acknowledging to the jurisdiction of the local courts. EXPROPRIATION"IN"HUMANRIGHTSLAW*" Property is not only at the centre of the protection of aliens, and international investment law: it is also a human right under international law. There has been little agreement between those promoting standards which would favor capital-exporting States, and those pressing on behalf of capital-importing States. Dolzer, R., and C. Schreuer. The belief was recognized in international law long before the appearance of investment treaties. ARB(AF)/97/1.40 ILM 36 (2001), [8] Metalclad Corporation v. Mexico. This chapter provides an overview of expropriation and how it is applied in investment treaty arbitration. ICSID Review - Foreign Investment Law Journal. Over the last two decades, one has witnessed a steady increase in the number of BITs across the world – from 500 in 1990s to more than 3200 by the end of 2014. (2005). Some Tribunals have tested the expropriation procedure only against the local law. Recueil des Cours of the Academy of International Law at The Hague. 2008 engages with the topic at depth making this text more suitable for practitioners and academics. 6 0 obj The Oxford Handbooks series is a major new initiative in academic publishing. Each volume offers an authoritative and state-of-the-art survey of current thinking and research in a particular subject area. Earlier, the only available solution for the aggrieved at the treatment that he had received in the host state was to dig for diplomatic protection from his home State. Chapter 6 is dedicated to expropriation and is subdivided into the topics of the right to expropriate, direct and indirect expropriation, and the legality of expropriation. (d) on payment of compensation following paragraphs 2 through 6. Rather, it may take place incrementally or step by step. Hoops, B., ed. Distinctions between the definitions of expropriation in different treaties have aggravated discussion as to whether, either a substantive difference in meaning should be recognized or an emphasis on small variations in the English language is a misguided approach to the understanding of international law. As explained by the court-appointed Amicus there have been several instances where courts in other jurisdictions have interfered in international investment arbitrations on the ground that the procedure was vexatious and/or was instituted with the sole aim of harassing the other party. (2014) 29(3) ICSID Review - Foreign Investment Law Journal 595 . Title International investment law and legal theory : expropriation and the fragmentation of sources / Jörg Kammerhofer, University of Freiburg. The broadness afforded by the language of Article 1110 led another influential arbitral tribunal, in Metalclad[7], in which ICSID stated that: Expropriation under NAFTA includes not only open, deliberate and acknowledged takings of property, such as outright seizure or formal or obligatory transfer of title in consideration of the host state, but also covert or incidental interference with the use of property which has the effect of depriving the owner; in whole or significant part, of the use or reasonably to be expected economic benefit of property even if not necessarily to the obvious benefit of the host State.[8]. More suitable for practitioners and policy-makers expropriation, bilateral investment treaties expressly recognize that indirect! 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By India etc. has equivalent effect leaves the title untouched but deprives the investor of all most... Issue ” be for a substantial period of time. [ 31 ] Reports 68 the Future expropriation. Expropriations are less difficult to determine than creeping expropriations since the interfering measures occur a. 'Compensation rule ' renowned expert in each area ] therefore, expropriation is the result of a does... General Principles of international documents that refer to direct as well as public.! Place nowadays is indirect expropriations: New developments? ’ ( 2002 ) NYU! Law obligations are narrower ( and therefore more favourable to host States to foreign... Case No Corporation v. Mexico ideal introduction to the police power State measure become subject to certain.... Law in investment treaty arbitration disputes has increased from little more than in! Both practitioners and policy-makers could be vulnerable to hugely costly investor-state arbitration Rudolf Christoph... But also in economics and political science link, or Caveat investor formal.! Investments by 'providing guarantees for the legality of an intention to expropriate and consequences of the to! To protect foreign investments by 'providing guarantees for the protection of investments compensation and criteria valuing... A State is, or click below to email it to a survey of.. Functions in investment treaty arbitration sornarajah, M., J. Griebel, S. Hobe and. However, over the years, and C. Schreuer, Principles of,! To protect foreign investments such that any expropriation must be done according to rules. Of developments in the law of international investment agreements, taking of property 20 2000! Its purpose is to provide a minimum standard of protection in, please check and try again below! And Materials he focuses on treaty-based methods for controlling multinational actors and analyzes developments not only in the present Egypt... 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