This monograph is based on the SJD dissertation of the author. The
primary goal of the work is to examine the requirements of lawful taking
of foreign property in international law. Furthermore, it tries to prove that
there are three1
requirements of such taking, that is to say, taking should
be for public purpose, non-discriminatory and appropriate compensation
should be provided. To prove this, international jurisprudence, related
academic literature, and international case law is analyzed.
Taking of foreign property is one of the so-called non-commercial
risks foreign investors have to face abroad.2
There might be other noncommercial risks as well, like that of currency inconvertibility, repatriation
limitation, currency devaluation, political violence (which includes war,
terrorism and revolution), and deterioration in investment environment.3
However, the risk of taking property constitutes the greatest risk for
a foreign investor.4
This does not need much explanation: when the
investment is taken it is not possible to operate it any more. Thus, for
many investors the issue of decreasing the risk of taking their investment is a crucial one. With good investment protection systems (e.g., investment
protection treaties, investment insurance) the risk of taking cannot
be avoided entirely - but, the loss to the investor can be minimized.
However, many times, even a good investment protection system can
only mitigate the loss. The reason is that even if there is compensation
paid for the property taken, usually it does not gratify foreign investors.
For example, they will not be compensated for (as appropriate or full
compensation usually does not include)5
the expected future profits, or
for the business idea and know-how of where (it can be geographic place
or an economic branch) and how to look for good profit. Transferred
technology and transferred know-how can also constitute a considerable
value, for what there is usually no compensation paid. Therefore, the
risk factor is many times present for the investors. In addition, many
investments require high initial expenditure. This means that in the case
of indirect expropriation, it is very expensive to withdraw from the host
state quickly if the investment environment becomes hostile. Therefore,
investors usually look for investment opportunities with low risk of
taking. Such law risk of taking exists in countries with long tradition
of stable political and economic system.
Author(s): Zoltan Vig
Edition: 1
Publisher: Patrocinium
Year: 2019
Language: English
City: Budapest
Tags: expropriation, law, taking, nationalisation
Preface
1. Introduction
1.1. Importance of foreign direct investments
1.2. Risks for foreign investors
1.3. Instruments for the protection of foreign investments
1.3.1. Bilateral investment treaties
1.3.2. Multilateral investment treaties
1.4. Conclusion
2. Notions
2.1. Property
2.2. Taking
2.3. Expropriation, nationalization
2.4. Intervention
2.5. Confiscation
2.6. Indirect expropriation
2.7. Indirect expropriation: case law
2.8. The issue of repudiation or breach of contract by the state
2.9. Relevant notions in bilateral investment treaties and in related
academic literature
2.10. Conclusion
3. The right to take property and ‘public purpose’
3.1. Introduction
3.2. Standard of treatment of foreign investors
3.3. ‘Public purpose’
3.4. The right to take property and the ‘public purpose’ in chosen
multilateral instruments and in related academic literature
3.4.1. Energy Charter Treaty (ECT)
3.4.2. International Center for Settlement of Investment
Disputes (ICSID)
3.4.3. Multilateral Investment Guarantee Agency (MIGA)
3.4.4. North American Free Trade Agreement (NAFTA)
3.4.5. Organization for Economic Co-operation and
Development – “Multilateral Agreement on Investment”
Proposal (MAI)
3.5. The right to take property and the public purpose in bilateral
investment treaties and in related academic literature
3.6. The right to take property and ‘public purpose’: case law
3.7. Conclusion
4. The principle of non-discrimination
4.1. Introduction
4.2. The principle of non-discrimination
4.3. Principle of non-discrimination in chosen multilateral instruments
and in related academic literature
4.3.1. Energy Charter Treaty (ECT)
4.3.2. International Center for Settlement of Investment
Disputes (ICSID)
4.3.3. Multilateral Investment Guarantee Agency (MIGA)
4.3.4. North American Free Trade Agreement (NAFTA)
4.3.5. Organization for Economic Co-operation and
Development – “Multilateral Agreement on Investment”
Proposal (MAI)
4.4. Principle of non-discrimination in bilateral investment treaties
and in related academic literature
4.5. Principle of non-discrimination: case law
4.6. Conclusion
5. Compensation for the taken property
5.1. Development of compensation theories
5.1.1. Norwegian Shipowners’ Claims case – ‘just’ compensation
5.1.2. Chorzow Factory case – ‘fair’ compensation
5.1.3. Hull Doctrine – ‘prompt, adequate and effective’
compensation
5.1.4. Calvo Doctrine
5.1.5. United Nations documents – ‘appropriate’ compensation
5.2. Issue of compensation under the Restatement (Third) of Foreign
Relations Law of the United States of America § 7125.3.
5.3. Issue of compensation in United States bilateral investment treaties
5.4. Compensation for the taken property: case law
5.4.1. The case law of the Iran – United States Claims Tribunal
5.4.2. ICSID case law
5.4.3. NAFTA case law
5.5. Conclusion
6. Conclusion
Bibliography
Books
Periodical materials
Internet sources
Cases
Other source
