About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

8 J. Int'l Arb. 59 (1991)
Determining the Economic Value of Expropriated Income-Producing Property in International Arbitrations

handle is hein.kluwer/jia0008 and id is 57 raw text is: Determining the Economic Value of Expropriated Income-Producing Property in International Arbitrations William C. LIEBLICH* I. INTRODUCTION For years, there has been intense debate concerning the compensation that customary international law requires be paid when business property owned by foreign investors is expropriated.' For the most part, this debate has centered on the question of which legal standard-such as prompt, adequate and effective compensation, full compensation, partial compensation, appropriate compensation, or equitable compensation- should be regarded as the customary international law standard.2 Unfortunately, this attention to the question of legal standards appears to have overshadowed the equally important subject of the valuation methods that should be used to calculate the compensation required by the appropriate standard.3 This relative inattention to valuation methods renders the discussion of legal compensation standards almost entirely abstract. For example, if a tribunal decides that it is required by international law to award a former owner of expropriated property th& full value of that property, how should the tribunal go about ascertaining that value? By the same token, if the tribunal applies a standard of partial compensation, the tribunal must logically start with some measure of value * Partner, Pierson Semmes and Bemis, Washington, D.C. The author has been involved in the representation of Atlantic Richfield Company (Case No. 396), ARCO Exploration, Inc. (Case No. 20), and Sun Company, Inc. (Case No. 21), before the Iran-United States Claims Tribunal. For the purposes of this article, the term expropriation refers to any deprivation by a State of an investor's property, whatever the purpose or cause of the deprivation. As events in Kuwait during the last year remind us, business property that is destroyed or rendered useless by a State is no less taken from its owner than is property that is formally expropriated for continued operation as a business. The methods for determining the property's value should be the same regardless of the property's ultimate fate. Thus, the valuation methods advocated in this article may appropriately be employed in a wider context than that of investment disputes. For example, the laws of war require that compensation be paid to the owner of private property that is seized or requisitioned by a belligerent occupant ofenemy territory. See 1907 Hague Convention Respecting the Laws and Customs of War on Land, Annexed Regulations Articles 52-53. Where income-producing property is seized or requisitioned, the methods advocated in this article may be used in determining the compensation due the property's owner. In addition, those methods are as appropriate in cases of temporary deprivations of property as they are with respect to permanent deprivations. See infra foomote 39. 2 See, e.g. Agora: What Price Expropriation?, 79 AJIL 414 (1985) (debate between M. H. Mendelson and Professor Schachter over whether decisions of international tribunals support the so-called Hull Formula requiring payment of prompt, adequate and effective compensation); Dolzer, New Foundations of the Law of Expropriation of Alien Property, 75 AJIL 553 (1981). ' A notable exception to this general tendency is the four-volume series The Valuation of Nationalized Property in International Law (R. Lillich, ed. 1972, 1973, 1975, 1987). Copyright 0 2007 by Kluwer Law International. All rights reserved. No claim asserted to original government works

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most