New Foundations of the Law of Expropriation of Alien Property

Abstract

The continuous stream of resolutions of the UN General Assembly and much academic writing on the subject notwithstanding, the present state of customary international law regarding expropriation of alien property has remained obscure in its basic aspects; this is true in particular for expropriations in the context of North-South (still better described as “West-South”) relations, to which this article is primarily, but not exclusively, addressed. International courts have had no occasion to rule on fundamental issues of expropriation law in the past decades, even though these issues have been relevant to various disputes settled out of court. Eventually, however, the courts will be confronted with cases involving expropriation of alien property: given the continuing and rising importance of foreign investment, the parties involved probably will not invariably prefer negotiated settlements. It must also be recalled here that customary law has occasionally served as a reference standard in treaties and contracts. If an expropriation case were brought before an international tribunal, it could not simply rule that the law governing expropriation of alien property is in dispute and therefore no law at all is applicable. The very notion of international law precludes an argument that acknowledges the existence of “gray areas” in that law: a court could not rule that some law exists, but that it cannot be identified by judicial means.