Expropriation of alien property and the principle of non-discrimination in international law of foreign investment: an overview

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The principle of non-discrimination is recognized in international customary practice, as part of general international law, judicial decisions, and treaty law. Furthermore, a great majority of jurists have supported the principle as a yardstick of the legality of various state actions. Thus, no one doubts that in customary international law the principle is now firmly established. This explains the principle's relevance and application in the context of General Assembly Resolution 1803 on Permanent Sovereignty over Natural Resources and the 1974 Declaration on Economic Rights and Duties of States, even though neither mentions the principle. The principle of non-discrimination is not only relevant in the field of foreign investment, which is the main concern of the present article, but also in various other areas such as human rights and international trade. Although a plethora of writings on the subject concern those matters, there is surprisingly little focus on it in the context of foreign investment, except cursory views in the concerned literature. The gravity of the principle in the corpus of international law cannot simply be ignored. Professor Brownlie notes that "the relevance of the principle is considerable." Some jurists have not even hesitated to consider it a matter of jus cogens. But a controversy arises as to the meaning and scope of the principle. Different meanings are often attributed to it as a result of the different angles from which one can consider the matter; thus the issue is a contentious one. The principal arguments surround the rationalization of the principle of non-discrimination, i.e. non-violation of the principle. A clear understanding of the concept is very important in the context of both customary and conventional international law. Non-discrimination has been employed in most recent multilateral instruments such as the North American Free Trade Agreement (NAFTA), the Energy Charter Treaty, and the Organization for Economic Co-operation and Development (OECD) Draft Multilateral Agreement on Investment, and there is no doubt that the principle of alien non-discrimination will be subject to interpretation in various contexts. Thus, the concept itself merits clarification in the context of both general and conventional international law. The purpose of this brief study is to explore the meaning of the concept in international law of foreign investment in the light of juristic views, arbitral and judicial interpretations, and state practice.
Original languageEnglish
Pages (from-to)57-77
Number of pages21
JournalJournal of Transnational Law and Policy
Issue number1
Publication statusPublished - 1998


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