International and foreign Investment Law Part III Expropriation Azar Aliyev LL.M. (University of...
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Transcript of International and foreign Investment Law Part III Expropriation Azar Aliyev LL.M. (University of...
International and foreign Investment LawPart III
Expropriation
Azar Aliyev LL.M. (University of Heidelberg)
OverviewI. 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
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.