Research Student: Jae Young Lee
Under What Conditions Can Bona Fide Regulatory Expropriation Be Justified in International Law?
My thesis aims to contribute to clarifying the identification of regulatory expropriation in international investment law and determining proper remedies in consideration of appropriate purposes of international investment law and general principles of international law.
A regulatory taking of foreign-owned property can occur when a host State’s government exercises its sovereign power to implement public interests such as health, environment, and national security.
In the event of direct expropriation, it is easily identifiable when direct expropriation happens and it is almost indisputable that customary international law, treaty practice, and arbitral jurisprudence afford fair compensation.
However, when a government exercises its normal regulatory power, so-called the ‘police power’ per se, that involves substantial decrease in the value of a foreign-owned property, it is never an easy task for arbitral tribunals to decide whether the interference with property rights would be deemed equivalent to direct expropriation and to figure out whether the foreign owner is entitled to some degree of protection under international investment legal system.
A few key research questions that this thesis seeks to answer are as follows:
- How can uncompensable regulatory taking be distinguished from compensable indirect expropriations?
- Are remedies other than full compensation available in response to permissible regulatory expropriations?