The Silent Impact of the 1917 Revolutions on International Investment Law: And What It Tells Us about Reforming the System

Abstract

The centenaries of the Russian and Mexican revolutions of 1917 invite reflection on their impact on international law. Investment law, in particular, is ripe for such an inquiry, given that it has the protection of property at its core. The revolutions have been understood as challenges to the international system of property protection, but despite inspiring the claims promulgated in the New International Economic Order they are said to have finally remained unsuccessful. After a period of uncertainty about the standard of compensation for expropriation in the first half of the century, today’s bilateral investment treaties have established the Hull formula requiring prompt, adequate and effective compensation as governing rule in investment law. Yet, I want to propose that the regime has taken a different turn as result of the revolutions – a turn that has somewhat escaped our attention, even though it encapsulates the political struggle over the distribution of wealth just as much as the debate over the appropriate standard of compensation did. It is the turn from property to investment.

Keywords: international investment law, history, 1917, investment, revolution