International and foreign Investment Law
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Transcript International and foreign Investment Law
International and foreign
Investment Law
Part III
Expropriation
Azar Aliyev LL.M. (University of Heidelberg)
Overview
I.
Expropriation as a legal term
II.
Legality of expropriation
III. Direct and indirect expropriation
IV.
Compensation
I. Expropriation as a legal
term
Protection of aliens’ property rights
Chozrow factrory (PCIJ)
Norwegian Shipowners (PCIJ)
Expropriation, nationalization, confiscation,
taking of property
Taking of property in national law and
international law
II. Definition of Expropriation
Article 13 (1) ECT
Right to expropriate (rare exceptions: Kazakh
law on foreign investment 1992)
“Hull formula” and “Calvo doctrine”
Wording of the expropriation clauses (ECT,
CIS-Treaty)
III. Actors, Objects
Who can expropriate
State
State can be held responsible for actions of
third parties (Draft Articles on State
responsibility)
What can be expropriated
Expropriation of property
Expropriation of rights
Expropriation of contracts
IV. Form
Form of expropriation
Acts
Omissions (Olguin v. Paraguay)
V. Legality of Expropriation
Legal expropriation
for a purpose which is in the public interest;
not discriminatory;
carried out under due process of law; and
accompanied by the payment of prompt,
adequate and effective compensation.
Difference to the ‘illegal’ expropriation (AMD v.
Hungary)
VII. Indirect Expropriation
Indirect Expropriation
Direct and indirect expropriation
Doctrine of ‘sole effect’Intention of the
State? (Siemens v. Argentina, Rumeli v.
Kazakhastan)
Benefit of the State (Rumeli v. Kazakhastan)
VII. Indirect Expropriation
Regulatory measures and indirect expropriation
(Feldman v. Mexico, Generation Ukraine v.
Ukraine)
Intensity of interference with investors rights
Frustration of legitimate expectation (Metalclad v.
Mexico)
Disproportion of measures
Non-transpareny, arbitrariness, discrimination
(Rumeli v. Kazakhstan)
New Treaty wording (US Model-BIT)
VII. Indirect Expropriation
Typical forms of indirect expropriation
Tax increase (Occidental exploration v.
Equador)
Revocation of licenses and permits
(ecological measures) (s. below)
Interference with management (Rumeli v.
Kazakhatan)
Breach of contractual obligations
Sakhalin
Sachalin II
Projekt: 1994 Establishment of Sakhalin Energy,
Proiduction Sharing Agreement
Production: Offshore oil and gas
Problem: protected forests, erosion, flora und
fauna.
Stakeholders: till 2006 Mitsui, Royal Dutch Shell
und Mitsubishi. Since 2006 Gazprom 50% +1,
Mitsui 12,5%, Royal Dutch Shell 27,5% und
Mitsubishi 10%.
Disptute: 18.9.2006 revocation of the ecological
lisence
19.04.2007 new stakeholder structure
Project is going on with minimal cha.
I.
Investment
Compensation
Hull formula
Prompt
Adequate
Effective
Calvo doctrine
Thank you very much!