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Part II The Test for Expropriaton, 7 Regulatory Expropriation

From: Expropriation in Investment Treaty Arbitration

Johanne M. Cox

From: Investment Claims (http://oxia.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. date: 06 February 2023

Expropriation — Investor — Compensation

This chapter focuses on regulatory expropriation, asking what criteria must be met for regulatory measures to be considered expropriation and — where regulatory measures constitute expropriation — whether the State is liable to compensate the foreign investor. After describing the different types of regulatory measures identified by investment treaty tribunals in cases of alleged indirect expropriation, the chapter examines bona fide regulation exercised in the police powers of the state and how tribunals determine whether bona fide regulation is capable of constituting compensable expropriation. It also discusses the test used in determining regulatory expropriation in investment treaty arbitration, taking into account six factors that have been applied by tribunals: non-discrimination, the degree of interference or impact on the investment, the government's intent and purpose of the measure, the reasonableness of the measure, the legitimate expectations of the investor, and the proportionality between the impact of the measures and public policy.

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