Expropriation & the Foreign Investors

Expropriation & the Foreign Investors

Introduction

It is the case of the investments associated concerns regarding the foreigners and the local people in a country. Normally, the foreign investors are not provided the same rights as that of civilians in a country. It goes in accordance with the international laws governing the rights of foreign investors in the respective fields. A conflict has always been there in the rights' protection of the foreigners investing in the country in terms of BIT and the expropriation provision. This needs to be considered in terms of effects on the aim of BIT to provide adequate protections to the investment of foreign investors from the implications of Hull Formula and the impacts of Calvo Doctrine.

Discussion

The dispute settlement is dealt by the ICSID (International Centre for Settlement of Investment Disputes) department. This has been established by the “Convention on the Settlement of Investment Disputes” between States and Nationals of Other States (icsid.worldbank.org).

The department of ICSID is meant to facilitate the investment and arbitration concerns of the two states involved, including the foreign contracting state and the national contracting state. These activities of ICSID are evaluated by the Administrative Council of the Centre pursuant to Article 6(1) (a)-(c) of the Convention (icsid.worldbank.org).

Being an ICSID arbitrator, this case needs to be resolved among the civilians and the foreign investors, on the basis of the conflicts caused by the Calvo Doctrine and the BIT expropriation if the Hull Formula is implicated in favor of the foreign investors.

BIT Expropriation

The act of Expropriation means that the property of a person is taken from him irrespective of his own will to sell it or not. The only thing, which is considered, is that the property should be favoring the public interest. It is the authority of the government in accordance of the international laws that the sovereignty belongs to power in rule. This negates the rights of a foreign investor in a state where he has certain rights at the time of investing. He wants to get benefited rather than facing such awkward situations, where he is treated in such a way. He will never want to invest in such an environment where even his property is not secured.

The foreign investors will be in great trouble and in the state of anxiety and pressure under this law and full authority of a government to expropriate the property for its own favor and need (Smith, 2001).

There are certain restrictions and impositions in the International Laws regarding this unfavorable act of the government, like;

The expropriation must be followed in terms of public purpose.

The act of Expropriation must not be an outcome of discrimination between the civilian and the foreigners or any other racial causes.

The Expropriation must be followed by the appropriate compensation to the property owner.

However, practically these limitations are not even considered in the International cases of BIT Expropriation. The rights of foreigners in the foreign states need to be protected for better cooperation and collaboration ...