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12 Protection Against Expropriation, Nationalization, and Dispossession

From: The Law of Investment Treaties (3rd Edition)

Jeswald W. Salacuse

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 23 June 2021

Compensation for lawful nationalisation — Indirect expropriation — Non-discrimination — Transparency — Proportionality — Law of treaties

This chapter examines the investment treaty protections against expropriation, nationalization, and dispossession. Because the investment treaty movement arose during a period when many expropriations and nationalizations had taken place and states exhibited significant disagreement about the applicable international law, one of the primary goals of capital-exporting countries in promoting investment treaties was to protect their investors and investments from acts of expropriation, nationalization, and dispossession by host governments. As a result, virtually all investment treaties contain a provision concerning the expropriation or nationalization of covered investments; however, the nature of those provisions, their scope, and the limitations they place on governmental action, vary among treaties. The chapter then examines the scope of coverage of expropriation provisions as they apply to direct and indirect takings of investor property by a state. It also considers the various conditions and limitations that treaties place upon such state actions, including the obligation to pay compensation.

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