Expropriation Under NAFTA Chapter 11 Investment Dispute Settlement Mechanism: Some Comments on the Latest Case Law
International Arbitration Law Review, Vol. 4, No. 3, pp. 96-104, 2001
10 Pages Posted: 28 Oct 2008
Date Written: October 23, 2008
The question regarding the constituent elements of expropriation of an investment under international law is the object of much debate and controversy. Although being an essential concept in international law, there remains great ambiguity surrounding the notion of expropriation. The purpose of this article is not an analytical description of NAFTA Article 1110. Instead, the aim is to give practitioners an overview of recent NAFTA Chapter 11 cases which have interpreted the notion of expropriation. By the time this paper was published in 2002, one final award (Metalclad v Mexico) and two partial awards (Pope & Talbot v. Canada; SD Myers v. Canada) had been rendered. This paper describes the factual considerations involved in these three cases as well as an analysis of the reasoning of the tribunals, particularly with respect to the interpretation given to Article 1110 and the use of the words "measures tantamount to nationalization or expropriation". These three arbitral tribunals have adopted fairly different views on what constitutes an expropriation under NAFTA. This paper argues that although the text of NAFTA Article 1110 does not in itself depart from existing international law on the subject, some statements made by these arbitral tribunals have clearly given an interpretation to the concept of expropriation that is more extensive than interpretations currently prevailing under international law.
Keywords: NAFTA Chapter 11, expropriation, investor-State arbitration
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