Study On Expropriation Clauses In BRICS' BITs

Expropriation clause is the substantive clause of international investment agreement to protect the rights and interests of foreign investors,and it is the concentrated expression of the power struggle and compromise between capital-importing countries and capital-exporting countries.The protection of foreign investors from uncompensated expropriations traditionally has been one of the main guarantees found in international investment agreements,and the IIAs mainly based on BITs have gradually formed a "template provision" that compensation must be paid for taking expropriation.With the deepening of investment liberalization and the increasing of expropriation forms,indirect expropriation and other similar expropriation behaviors have emerged and began to replace the main status of direct expropriation.However,compared with direct expropriation,indirect expropriation and similar expropriation are hidden and controversial.This leads to the trend of vague connotation and expanding extension.Based on this trend,there are more and more judicial arbitration cases in which the capital exporting-countries choose indirect expropriation as the reason to request compensation from the capital-importing countries.And the legitimate implementation of sovereignty by the host country is constantly restricted by expropriation.Under such circumstances,it is impossible to achieve the purpose of promoting and protecting investment by BITs and restrict the development of economic globalization.If the international investment sector continues to be weak,the interests of developing countries and emerging economies represented by BRICS will be hit first.For the BRICS whose domestic superstructure construction generally lags behind the development of economic foundation,the improvement of expropriation terms is more necessary and urgent than that of developed economies.BIT is the product of negotiation and compromise between the contracting parties,and its upgrading is less difficult than other IIAs.Therefore,this paper chooses the expropriation clause in BRICS' BITs as the study object and according to the study object's inherent legislative style as the research framework to determine the definition of expropriation relatedconcepts,the elements of expropriation legitimacy and its connotation,the recognition standards,compensation standards and domestic remedies by the methods of historical analysis,normative analysis,empirical analysis and comparative research.So as to seize the opportunity of building a new international investment order,take the lead in formulating new treaty models and guiding principles to lead the international uniform expropriation clause,and clear the obstacles for investment.In addition to the introduction,this paper consists of five parts.The first part “the concept of expropriation in BRICS' BITs” studies the concepts and relations of nationalization and expropriation,direct expropriation and indirect expropriation,regulatory expropriation and national control measures in a progressive way.And the article gradually determines the research object,the definition of expropriation,the difference between regulatory expropriation and national control measures,negates the fuzzy provisions of “equivalent to expropriation” adopted by BRICS for indirect expropriation at present,and clarifies the connotation of expropriation.The second part “the elements of expropriation in BRICS' BIT” mainly studies the composition,nature and connotation of the legal elements in the terms of expropriation of BRICS' BITs.It is pointed out that the current three elements of legal expropriation do not benefit the protection of the interests of investors and the realization of the obligations of the host country,and the four elements of the treaty law should still be followed.The nature and connotation of the relevant elements are determined by referring to the provisions of domestic laws and treaties,summarizing the relevant practice of judicial arbitration.This study makes up for the regret that scholars only discuss the composition of legal elements in the past,and provides guidance rules for the measurement of judicial arbitration.The third part “the standard of expropriation in BRICS' BITs” studies the standards of single effect,single purpose and the purpose and effect standard under the principle of proportion in the practice of international judicial arbitration.And select the China-India BIT(2006)expropriation recognition rules agreed by the BRICS for analysis.Finally,the purpose and effect standard which balancing the interests of the host country and the investors and under the principle of proportion is integrated into the rules for the determination of BIT expropriation in BRICS,in order to change the confusion and unfairness of the current standards for the determination of expropriation,and to clarify the extension of expropriation.The fourth part “compensation for expropriating in BRICS' BITs”,studies the standards and the amount of compensation for expropriating from the perspective of developing countries and emerging markets.It is suggested that BRICS should not completely compromise on the hull rules,but should introduce flexible and appropriate compensation standard that is more universal and reflect the objective of fairness and justice,and improve the compensation calculation rules in accordance with this standard.Instead of denying the capital-importing countries' preference of hull rules in the past,BRICS should strive for interests for developing countries more practically.The fifth part “suggestions for improve the expropriation clause in BRICS' BITs ”is based on the necessary discretion power of the court and the arbitral tribunal to clear the ambiguity provisions and fill in the blank of the expropriation clause in BRICS'BITs,so as to change the trend of expropriation expansion,build the expropriation clause mode of BRICS and increase the influence of expropriation clause in developing countries' BITs.The main conclusions of this paper are as follows:1.That are keys to defining the connotation of expropriation that defining the concept of indirect expropriation and clearing the relationship between state control measures and regulatory expropriation.2.The purpose and effect standard under the principle of proportion well balances the interests of investors and host countries.3.Flexible and appropriate compensation standards and differentiated compensation calculation methods are more in line with the development trend of expropriation.4.Giving investors the right to apply for expropriation review and establishing the obligation of investors to exhaust the local remedies of the host country before applying for international arbitration and judgment is the performance of safeguarding the sovereignty of the capital-importing country.