The Hand Rule Against the State's Expropriation

22 Pages Posted: 27 Jul 2017

See all articles by Ashley H. A

Ashley H. A

University of Pennsylvania

Date Written: July 10, 2017


The state liability is analyzed in tort law. The state is held liable in emergency against the foreign corporation that has put the substantial investments. The pre-assumption is that the injurer is the state, and the victim is the foreign corporation in the international investments. The rational choice for both is that injurer and victim are both self-interested and does not care about the international orders or international customary law. There is no feasible insurance in the ex-ante the accident. All injurers are solvent and pay damages in full. Litigation costs are zero, so everyone choose to go to the court instead of the bilateral bargaining.

Keywords: Hand Rule, State's liability, Expropriation, Compensation, Efficiency

JEL Classification: H13, F21, K11

Suggested Citation

A, Ashley H., The Hand Rule Against the State's Expropriation (July 10, 2017). Available at SSRN: or

Ashley H. A (Contact Author)

University of Pennsylvania ( email )

School of Law
3501 Sansom Street
Philadelphia, PA PA 19104
United States


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