Regulatory Expropriation – A New Hope: The Use of Legal Theory for Investment Law

Abstract

Abstract What use could legal theory be for international investment law? This article shows that theoretical and doctrinal arguments are inextricably linked, using regulatory expropriation as a case-study. It proceeds from mainstream investment lawyers’ doctrinal arguments to the theoretical questions that are engendered by them and does this in three steps. First, it analyses the common debate on regulatory expropriation whose participants, while offering outwardly different solutions, actually see the problem the same way and draw the same conclusion. Second, it engages in a structural analysis of the traditional international investment agreement (IIA) expropriation clause. Third, it analyses one of the structural limits engendered by the relation between IIAs and customary international law in detail: we cannot assume that expropriation clauses ‘incorporate’ or ‘are to be interpreted while taking into account’ general law. This relationship is much less straightforward and helpful for defining the limits of indirect expropriation than is commonly argued.