Environmental Engineering Reference
In-Depth Information
internationalization clause. The need for a stabilization clause exists, which is
highlighted by recent revolutions in the MENA region.
2.4.3 Compensation
Furthermore, there is the issue of compensation in a case of expropriation. The issue
of compensation has dominated international law for a long time. The PCIJ has
already dealt with the issue of expropriation and compensation in the
Chorz
ow
Factory case
, which has its roots in the Treaty of Versailles, signed in 1919.
449
In
the
Chorz
ow Factory case
, it pointed out that there must be a distinction between
legal and illegal acts and that the remedy is appropriate.
450
Concerning the question
of appropriate compensation, the PCIJ stated that
reparation must, as far as possible, wipe out all the consequences of the illegal act and
reestablish the situation which would, in all probability, have existed if that act had not been
committed.
451
A lawful expropriation required only a restitution of the undertaking
s value at
'
452
As mentioned,
historically, two approaches govern the dispute concerning compensation—the
Hull Formula and the Calvo Doctrine.
the day of expropriation plus
interest to the day of payment.
'
'
2.4.3.1 Calvo and Hull
The Calvo Doctrine says that an investor
s compensation is equal to a the national
treatment, not better or worse.
453
This includes the exhaustion of local remedies and
the surrender of diplomatic protection.
454
The Calvo Doctrine is an expression of
the principle of national treatment and the developing countries
'
fear of neocolo-
nialism and the protection of local private companies through public policy.
455
The
Calvo Doctrine experienced a new boost especially after the Argentinean crisis in
'
449
The Jean Monnet Center for International and Regional Economic Law and Justice (
2013
).
450
PCIJ [1928] Judgment (
The Factory At Chorzow
(
Claim for Indemnity
)(
The Merits
), 39-40;
There are also some author, who claim that the Chorzow case is broadly misunderstood and the
judgement includes also ex post compensation, in: Abdala and Spiller (
2008
), 103 (104 et seq.).
451
PCIJ [1928] Judgment (
The Factory At Chorz
ow
(
Claim for Indemnity
)(
The Merits
), 125.
452
PCIJ [1928] Judgment (
The Factory At Chorz
ow
(
Claim for Indemnity
)(
The Merits
), 39-40.
453
Sch
obener et al. (
2010
), 230, Kap. 4 §15 para 30; Garcia-Bolivar (
2010
), 3-4; Krajewski
(
2009
), 195; Metje (
2008
), 74.
454
Garcia-Bolivar (
2010
), 5.
455
Garcia-Bolivar (
2010
), 3; Fear of interference in internal affairs, in: Shaw (
2008
), 824.
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