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Identifying Indirect Expropriation Under ICSID Mechanism

Posted on:2014-02-23Degree:MasterType:Thesis
Country:ChinaCandidate:S HeFull Text:PDF
GTID:2246330395495717Subject:International law
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Expropriation is an enduring topic in international investment law. Direct Expropriation which characterized by transferring of ownership has almost disappeared in practice now. In the meantime indirect expropriation which tantamount to direct expropriation in effect without transferring of ownership arises.China has both demands to regulate foreign investment and to protect Chinese citizens’ investment abroad. Under ICSID mechanism, China suffers litigation risk concerning certain regulatory actions by Chinese government may be alleged as expropriation. Simultaneously foreign governmental actions pose a threat of expropriation to Chinese citizens’ investment abroad. To cope with such risks, researches on identification of expropriation by ICSID become urgent especially when Chinese government and citizens lack litigation experience on ICSDI arbitrations.There exits more uncertainties in identifying indirect expropriation than in identifying direct one since the complex and masked features of indirect expropriation. Meanwhile the definition of indirect expropriation in international legal documents are ambiguous, theoretical opinions vary and arbitrations differ. But it is still practical to find criterion of identification on the basis of reviewing international legislations, theories, and opinions of ICSID tribunals considering indirect expropriation.Stipulations regarding indirect expropriation can be found in many kind of International legislations such as BITs or trade agreements, regional agreements. Although words differ in these legislations, still they can be classified into three modes:summary type, specific descriptive type and prerequisite type. Recent BITs and FTAs show the trend of legislations on indirect expropriation is more and more comprehensive and detailed. Criterion of identifying indirect expropriation rises gradually and the freedom of determination of international tribunals like ICSID meets more restrictions.Approaches of identifying indirect expropriation proposed by scholars pay most attention on aspects of effect and purpose. And these approaches can be classified into sole effect test, sole purpose test and effect and purpose test. There is no doubt that effect weighs in identifying expropriation, but purpose of governmental measures can not be neglected. Until now neither theoretic discussion nor arbitration practice has provided the way to solve the most important issue of weighing the proportion of effect and purpose in a specific case. Proportionality test has been introduced in recent ICSID cases to solve such problem, but the result is not satisfactory.All in all, the trend of international legislation is more and more specific. International arbitration courts like ICSID can not reach the goal of categorization in short order. So the practical way of identifying indirect expropriation is analyzing case by case, introducing consideration elements. Summarizing ICSID cases, we can get some simplified rules to predict future cases, say effect overweighs purpose in identifying indirect expropriation; benefit to government is not an necessary condition in judging a governmental measure; whether a measure constitutes indirect expropriation depending on its severity, persistence and integrity.
Keywords/Search Tags:indirect expropriation, ICSID, BIT
PDF Full Text Request
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