An Analysis of Current Views on the Evolution of Determination of Indirect Expropriation: A Case Study of the Energy Sector Investments

Standard of investor protection has been placed at the center of debate for many years. Although a case-by-case method for establishing indirect expropriation is a practical method and is almost, despite of the divergent views, the prevailing methods in arbitral practice. However, it has been debated whether an attempt to set out a clear, consistent and suitable method must be adopted by arbitral tribunals. This article explores the complexities and ambiguities of the current standards ýto establish indirect expropriation, and justify the necessityþ þfor general basis or transparent and ý unit criteria which is the preliminary requirements for indirect expropriation, is ýexplained, Finally, inductions from scholars’ views confirm that for establishing the occurrence of indirect expropriation, firstly, State’s actions substantially deprive a foreign investor of the investment profitability and at least one of the fundamental components of the property rights must be destroyed. Secondly, the State’s actions which lead to loss of profitability investment was not reasonably predictable to the investor.