The Guarantee Against Expropriation

This chapter examines the guarantee against expropriation, analysing the distinction between direct and indirect expropriation and the conditions under which states may lawfully expropriate foreign property. The chapter critically addresses the evolving jurisprudential approaches to determining when regulatory measures cross the line from legitimate state action to compensable indirect expropriation, advocating for a framework that focuses on substantial deprivation of the incidents of ownership rather than mere diminution in investment value. The chapter also explores the police powers doctrine as a defence to expropriation claims, examining how states can balance their sovereign regulatory authority with investor protection obligations under international investment agreements.