Indirect Expropriation in the Law of International Investment: I Know It When I See It, or Caveat Investor

In 2002, a leading commentator prophesized that the task of defining expropriation would dominate the foreign investment legal context in the future'. It is fair to say that this prophecy has materialized. Much of the work in the field of expropriation is concerned with discovering an appropriate basis for distinguishing expropriation, on the one hand, and noncompensable regulation, on the other. Needless to say, very different and potentially far-reaching consequences flow from the characterization of State conduct as either expropriatory or regulatory in nature. Despite the efforts of authors and adjudicators alike to define in sufficiently concrete terms the meaning of 'expropriation', the objective frequently eludes grasp, like water and fruit receding from the hands of Tantalus.2 Indeed, the doctrine and case law on expropriation in international law remain somewhat unsettled. Several factors may explain why this is so. These include the diversity of interests in play, divergences in cultural, economic and legal concepts of property, differing understandings of the role of the State, and a general heterogeneity in State practice.