The protection of foreign investment in international law.

Abstract

Few, if any, branches of the law, have been the subject of decades as that relating to the responsibility of states for injuries to the economic interests of aliens. The 1960s, with the rise of economic nationalism and the popularity of theories favouring state intervention in the economy, in the traditional troublespot of Latin America and also in the newly independent states, again brought the issue to the fore. Nationalisation of foreign owned investments was favoured by these states as a means of remedying alleged past injustices; natural resource extractive industries were particularly hard hit. This mood was reflected in international fora like the United Nations, where these developing states were in a large majority. Increasingly the substantive norms of the law protecting alien property became under attack; at the same time the procedural aspect of the law or the right of states to give diplomatic protection to their nationals abroad was hotly criticised. The high watermark of this movement was reached in 1974 with the adoption of the Charter of Economic Rights and Duties by the United Nations General Assembly by a large majority, without the concurrence of the industrialised, capital-exporting states. This study will be concerned with the customary international law rules relating to the protection of alien property and to the extent, if at all, it has been effected by this controversy. The legal rules which will be examined will be those of public international law. Occasionally mention will be made of the operation of these rules in the municipal sphere but this only to the extent that the validity or otherwise of the norms is thereby demonstrated.