Thursday, 18 July 2013

Arbitration Discussion ( MAVLUDA SATTOROVA )

The purpose of this study has been to outline the frontiers of state responsibility in investment
treaty law and to examine the role of the traditional expropriation standard and nonexpropriatory standards of treatment in determining the consequences of a host state’s
interference with a foreign investment. From the outset, it has been shown that the
indeterminacy and inherent breadth of the notion of investment will frequently allow the
extension of the protection afforded to investment to virtually any economic rights arising
from a commitment of resources in the expectation of profits. Significantly, the fact that
international treaties have adopted the term of ‘investment’ in lieu of ‘property’ means that
the previous tendency to associate investment protection with protection against
expropriation no longer holds true. Rather, the modern investment treaty regime protect
investors against a host state’s interference in a variety of economic settings.
A closer look at the tests developed by arbitral tribunals in addressing claims of
expropriation has revealed the inadequacy of deploying the conceptual frameworks that had
evolved in a different historical and legal context. As shown in Chapter II, the sole effect
doctrine and its yardstick of substantial deprivation fails to offer a reliable analytical tool for
deciding whether disputed governmental conduct should give rise to a host state’s
international responsibility. The way that investment is defined in international investment
instruments, coupled with the availability of corporate structuring and the emphasis on the
case-by-case determination of expropriation claims, all enable an investor to easily satisfy or
circumvent the substantial deprivation test. Furthermore, not only is it practically and
conceptually problematic to identify the point beyond which a deprivation becomes
substantial, but the very threshold of substantiality does not have a basis in international
investment agreements, which usually protect the whole investment as well as various rights

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