Indirect expropriation has proven to be a complex area of debate in international investment law. The disputes arising from indirect expropriation stem from the fact that most of the bilateral and multilateral investment treaties do not include specific articles and sufficient guidance to regulate and compensate for indirect expropriation. As a result, the arbitral tribunals are given wide discretion in terms of interpreting and determining the scope of indirect expropriation and the consequential compensation. This has resulted in inconsistent awards which lack a sense of interpretative direction for investors in protecting their investments and host states in defining and exerting their regulatory space. The aim of this thesis is to develop a doctrinal understanding of indirect expropriation and the criteria for the determination of compensation based on the jurisprudence of arbitral decisions, the texts of bilateral and multilateral investment treaties and scholarly discussions in the field, from the perspectives of international investment law, Jordanian Law and Islamic Law. This qualitative study is conducted from a balanced point of view between competing interests of host countries and foreign investors. Findings of this research confirm the existence of ambiguity and inconsistency in the determination of indirect expropriation and its compensation under international investment law and highlights the emerging approaches in the interpretation thereof. This thesis also draws insights from the principles of Islamic law to arrive at a holistic understanding of international investment obligation, which recognizes private ownership of investors, the collective responsibilities and the host state’s role in the spheres of public interest and social justice. Consequently, this study sets out and clarifies the necessary criteria for indirect expropriation and compensation, and further suggests a model clause for the Hashemite Kingdom of Jordan to apply in relation thereto, in future bilateral or multilateral investment treaties.

It is agreed that the property right is one of the sacred rights guaranteed by the Islamic sharī'ah for individuals and bodies, but this right is not absolute, but it is permissible for the state in some cases to take the property from its owner by coercion in the event of a public interest that is achieved by taking the property from its owners and the owner's refusal to sell the property to the state by mutual consent. Since the state bears the responsibility for achieving the public interest and protection it, it must take the private property from its owners to achieve the public interests of society, and although some may see the expropriation of the private property to achieve the public interest as exceeded and infringed the right of the property to individuals and an attack on one of the five purposes for sharī'ah which is save property, but it is possible to infer the legitimacy of this behavior by reviewing and analyzing the prophetic Sunnah represented by the actions of the Prophet, PBUH, and taking the ownership of others to achieve public interest, in addition to the Sunnah of the Rightly Guided Caliphs after him and the equivalent caliphs from their pledge who followed the guidance The Prophet, may God’s prayers and peace be upon him, and talked some of the properties from their owners to achieve the public interests of society. It is also possible to infer the legitimacy of this behavior by researching the position of the four Sunni schools from taking the private property from its owner to achieve the public interest in addition to the application of some jurisprudential and fundamentalist rules to this behavior. The aim of this study is to clarify the concept of taking the private property to achieve public interest, and to explain the position of the Islamic Sharia from this behavior.