On The Principles Of Compensation For Expropriation In The Foreign Investment Law

Different from the provision of "providing compensation" for expropriation stipulated in the Constitution,and also different from the provision of providing“appropriate compensation” for expropriation stipulated in legislation about foreign investment in “the three foreign investment laws” period,Chinese Foreign Investment Law introduced in 2019 and launched in 2020,for the first time,specifies three principles,which are prompt compensation,fair compensation and reasonable compensation,on the issues of foreign investment expropriation through stipulating“provide fair and reasonable compensation promptly”.However,because of the rich and abstract meanings of the three principles and the lack of official specification,it is difficult to apply and refine the provision.So for the purpose that the statutes could play a full role under the existing legal system,it is necessary to explore the meaning of the provision.Due to “prompt”,“fair” and “reasonable” are uncertain terms on the semantic meanings,it is impossible to conclude specific meanings only through the method of literal interpretation.Therefore,Tafter the first chapter introduces the basic theories of expropriation and compensation,the second chapter interprets expropriation and compensation from the perspective of subjective interpretation and systematic interpretation,so as to further limit the scope of the three principles to be explained.Firstly,from the perspective of subjective interpretation,this article analyzes the legislative purpose of the law according to the legislative background and general rules of the Foreign Investment Law.And in accordance with the intention of the law to promote as well as protecting foreign investment and thus achieve the goal of the further opening up,it is concluded that the safeguard clause in the Foreign Investment Law should make greater efforts to protect foreign investment.As one of the strong guarantees of foreign investment security,the compensation clause should provide more compensation than the past foreign investment legislation.Secondly,from the point of systematic explanation,the Foreign Investment Law,as a part of domestic legislation,should strive to ensure the harmony of the domestic law system.In particular that fair compensation,reasonable compensation has been specified in other laws and the items,purposes,standards,and other specific content of compensation have also been refined.It should be considered whether the specific meaning of the compensation’s principle of the Foreign Investment Law must be consistent with these laws.However,by examining the legislative changes and forms of domestic compensation for expropriation,it can be found that the legislative trend of Chinese compensation for expropriation is to provide more adequate compensations.At the same time,different provisions on the specific compensation can be made for the different areas and characteristics of the object of expropriation.Considering that the object of foreign investment expropriation is different from that of land,real estate,etc.,the compensation for the expropriation of Foreign Investment Law should not be restricted by other laws in terms of specific provisions,but should be consistent in the general value of the principle.In the case of international law,in view of the obligation of treaty compliance,the meaning of compensation for expropriation by the Foreign Investment Law must not be lower than that stipulated in the investment treaty we have concluded.Otherwise China will bear international responsibility when applying the Foreign Investment Law to compensate the foreign investors whose property is expropriated.Through the analysis of the provisions of the existing treaty,the article finds that the provisions can be refined in the Foreign Investment Law,and the current treaty in our country is essentially full compensation.So the interpretation of the principles of compensation in the Foreign Investment Law must be able to accommodate the full compensation requirement.According to the analysis above and the limited scope as well as proper orientation of compensation for expropriation of the Foreign Investment Law,the third,fourth and fifth chapters of this paper combined with the international legislative form and arbitration practice,attempting to make a more specific understanding of each compensation principles for expropriation in the Foreign Investment Law and draw a conclusion by each chapter.First,the third chapter explores the “prompt compensation” principle,and proposes that the “prompt” in prompt compensation means fulfilling the obligation of compensation within a tolerable period.However,the tolerable period includes the payable period and the excused period.It is appropriate to meet the deadline for the moment of expropriation in the payable period.The excused period should be determined on a case-by-case basis with a limited period and the obligation to pay a single benefit.When failing to pay in the excused period,it shall be regarded as a breach of prompt compensation and shall therefore be liable for the payment of compound interest.Secondly,the fourth chapter explores the “fair compensation” principle,and consider that fair compensation should regard the balance between public welfare and private benefits as core,and the specific provision should be in the form of "benchmark + range".It means to regard fair market value as benchmark.At the same time,deviations from fair market value should be permitted in accordance with the financial position of the host country,the fault of the foreign investor and so on.Finally,the fifth chapter explores the “reasonable compensation” principle,and put forward that the principle of reasonable compensation means the conformity of objective law and mainstream cognition,which requires respect and observe for legalism and professional norms.