| In the settlement of disputes arising from international investment, the compensation standard of expropriation has been highly controversial. This is because on one hand, the capital-exporting and capital-importing countries hold different views; on the other hand, there is no widely accepted academic theory on this issue. Historically, China as a capital-importing country, has opposed the applicable Hull formula. But in recent years, with the vigorous development of China’s overseas investment, China has gradually recognized the Hull formula in the treaty practice. Even if Hull formula is generally recognized in the current treaty practice, it is still lack of maneuverability on how to determine the amount of compensation for expropriation. The practice of dispute settlement requires a stable and predictable compensation standard; therefore, this paper aims to examine the provisions of international investment treaties and study relevant cases to obtain a general principle of international law and rules of practice.This paper is divided into four parts. The first chapter introduces the basic concepts of expropriation. The second chapter traces the three traditional standard theories of compensation for expropriation. The third chapter details the fair market value standard, which is current widely adopted by international treaties and widely used in arbitration practice. The fourth chapter examines Chinese domestic law and treaty practice regarding the compensation for expropriation, and analyses the issue of expropriation compensation in the Fortis case, which is being heard by ICSID. Finally, I suggest that in response to international investment disputes, the Chinese government and enterprises do not have to emphasize the literal provisions of Hull formula or principle of appropriate compensation; instead, they should pay more attention to the methods of calculating the amount of compensation, so that they can put themselves in a favorable position in each case. |
PDF Full Text Request