Journal Article

Indirect Expropriation and the Right to Regulate: Revisiting Proportionality Analysis and the Standard of Review in Investor-State Arbitration

Caroline Henckels

in Journal of International Economic Law

Volume 15, issue 1, pages 223-255
Published in print March 2012 | ISSN: 1369-3034
Published online March 2012 | e-ISSN: 1464-3758 | DOI: https://dx.doi.org/10.1093/jiel/jgs012
Indirect Expropriation and the Right to Regulate: Revisiting Proportionality Analysis and the Standard of Review in Investor-State Arbitration

More Like This

Show all results sharing these subjects:

  • Financial Law
  • Public International Law
  • Economics

GO

Show Summary Details

Preview

International investment tribunals considering claims of indirect expropriation have increasingly taken into account the host state’s regulatory purpose in their analysis, alluding to the need for measures to achieve a balance between host state and investor interests. Some tribunals have attempted to employ proportionality analysis in their determination of claims, but their reasoning has been methodologically problematic and characterized by a stringent standard of review, diverging from the approach of other international and supranational fora hearing disputes concerning the exercise of public power affecting individual rights and interests. Investment tribunals should be more deferential in performing proportionality analysis, mindful of host state authorities’ greater democratic legitimacy and proximity to host state communities, and tribunals’ comparatively weak institutional capacity. Such an approach would entail greater deference to host states in evaluating the legitimacy of a measure’s objective, the measure’s suitability and necessity, and the ultimate balance between the interests of the host state and of the investor. An appropriately deferential use of proportionality analysis is a more coherent approach to indirect expropriation that provides greater space for host states to take measures in the public interest, yet provides sufficient scrutiny to control misuse of public power.

Journal Article.  16946 words. 

Subjects: Financial Law ; Public International Law ; Economics

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content. subscribe or purchase to access all content.