Indirect Expropriation And Compensation In International Investment Law, Jordanian Law And Islamic Law Perspectives

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.