Expropriation - A Sequel

UNCTAD Series on Issues in International Investment Agreements II

image of Expropriation - A Sequel
In this publication, Section I defines the concepts of direct and indirect expropriation and reviews the variety of measures that can constitute an expropriation. Section II focuses on the core issue of establishing an indirect expropriation: the recent treaty practice on defining indirect expropriation as well as arbitral practice. Section III discusses the differences between compensation for a lawful expropriation and reparation for unlawful expropriations, as well as the question of valuation of investments. Section IV offers options which policy makers and negotiators may wish to consider.




The right to expropriate is an undisputed prerogative of sovereign States. This right is, however, conditioned by principles of international law as well as by domestic law in most States, in the sense that the taking must be for a public purpose, on a nondiscriminatory basis, under due process of law and upon payment of compensation. The meaning of each of these requirements, which display a high degree of convergence in treaty practice, has been discussed in this paper.


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