Skip to main content
    • Aa
    • Aa

Compensation for Expropriations in a World of Investment Treaties: Beyond the Lawful/Unlawful Distinction

  • Steven R. Ratner (a1)

For much of the last century, global actors have sparred over the international legal rules governing the compensation a state should pay a foreign investor when it expropriates the latter's property. The competing claims have had many dimensions, including the content of customary international law and the line between bona fide regulations and expropriations. In the modern age of international investment agreements (IIAs), a debate continues over another key issue: When a state expropriates a foreign investment in violation of an IIA, where should a tribunal look for the standard of compensation—to the amount the treaty requires the state to pay when it expropriates, or to an external standard for violations of international law generally? Each is alluring to a tribunal for its legal visibility—one spelled out in the very text under examination, and one stemming from a venerable international court case. But they may point to significantly different results for the investor and the host state. And investor-state tribunals remain wildly inconsistent, even incoherent, in their choice and use of those standards. It remains a significant source of disagreement in contemporary investor-state arbitration.

Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Jules L. Coleman & Jody Kraus , Rethinking the Theory of Legal Rights, 95 Yale L.J. 1335, 1348–57 (1986)

C.F. Amerasinghe , Issues of Compensation for the Taking of Alien Property in the Light of Recent Cases and Practice , 41 Int'l. & Comp. L.Q. 22, 37 (1992)

Irmgard Marboe , Calculation of Compensation and Damages in International Investment Law 237 (2009)

Martins Paparinskis , Investment Treaty Arbitration and the (New) Law of State Responsibility , 24 Eur. J. Int'l L. 617, 635–40 (2013)

Gus Van Harten , Investment Treaty Arbitration and Public Law (2008)

José E. Alvarez , Is Investor-State Arbitration “Public”? , 7 J. Int'l Disp. Settlement 534 (2016)

Andrew T. Guzmán , How International Law Works: A Rational Choice Theory 71117 (2008)

Louis T. Wells , Double-Dipping in Arbitration Awards? An Economist Questions Damages Awarded to Karaha Bodas Company in Indonesia , 19 Arb. Int'l 471, 478 (2003)

Elizabeth S. Anderson & Richard H. Pildes , Expressive Theories of Law: A Restatement , 148 U. Penn. L. Rev. 1503 (2000)

W. Michael Reisman , ‘Case Specific Mandates’ Versus ‘Systemic Implications’: How Should Investment Tribunals Decide?: The Freshfields Arbitration Lecture , 29 Arb. Int'l 131 (2013)

William M. Landes & Richard A. Posner , An Economic Theory of Intentional Torts , 1 Int'l Rev. L. & Econ. 127 (1981)

Philip J. Cook & Daniel A. Graham , The Demand for Insurance of Protection: The Case of Irreplaceable Commodities , 91 Quarterly J. Econ. 144 (1977)

Alan O. Sykes , Economic “Necessity” in International Law , 109 AJIL 296, 321 (2015)

Steven R. Ratner , Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented International Law , 102 AJIL 475 (2008)

Eugene F. Fama & Kenneth R. French , The Capital Asset Pricing Model: Theory and Evidence , 18 J. Econ. Persp. 25 (2004)

Franklin M. Fisher & R. Craig Romaine , Janis Joplin's Yearbook and the Theory of Damages , 5 J. Acct. Auditing & Fin. 145, 153–56 (1990)

William S. Dodge , The Case for Punitive Damages in Contracts , 48 Duke L.J. 629, 636–41 (1999)

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Journal of International Law
  • ISSN: 0002-9300
  • EISSN: 2161-7953
  • URL: /core/journals/american-journal-of-international-law
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Altmetric attention score

Full text views

Total number of HTML views: 53
Total number of PDF views: 1637 *
Loading metrics...

Abstract views

Total abstract views: 975 *
Loading metrics...

* Views captured on Cambridge Core between 10th April 2017 - 25th September 2017. This data will be updated every 24 hours.