Ksenofontov, K.E. Acceptability of expropriation of property of a foreign investor by a host state

Abstract: The right of a state to expropriate foreign investments is one of the principles of international investment law. It is a part of international customary law, and it is enshrined in international treaties, judicial and arbitration practice. It is also recognized by most scholars. At the same time most sources of international investment law establish a number of requirements for a lawful act of forced expropriation of property of a foreign investor. Among such requirements, they usually recognized the public goal of an expropriation, nondiscriminatory basis for an expropriation, due legal procedure, and payment of compensation. And while the payment of compensation is generally recognized, the rest of the criteria have been objects to much debating. This article includes analysis of the contents of the above-mentioned requirements and the consequences of failure to comply with them. In particular, the author supposes that the distinguishing between a lawful (that is, performed in compliance with the international legal standards in the international legal acts) and unlawful nationalization of foreign investor property has a limited value. The author provides doctrinal basis for this position and the relevant practice of international tribunals.

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