Expropiaciones Regulatorias y Tratados De Proteccion De Inversiones

Latin American and Caribbean Law and Economics Association
From the SelectedWorks of Críspulo Marmolejo González

January 2007

Expropiaciones Regulatorias y Tratados de Proteccion de Inversiones ( Regulatory Takings and Bilateral Investment Treaties)

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Available at:http://works.bepress.com/crispulo_marmolejo_gonzalez/23

Expropiaciones Regulatorias y Tratados de Protección de Inversiones (Regulatory Takings and Bilateral Investment Treaties)1
Críspulo Marmolejo González Universidad Santo Tomás – Chile Abstract The actual discussion on the basis and outcomes of the globalization has generated a tremendous challenge to many states, its regulators and regulations, to incorporate many practices of thecurrent context of commerce and investment. There are many elements in the structure of this order, as that international practice and academic elaborations are made to distinguish the aspects of Public Economics (Law of International Economic Organizations, Treaties about economic topics, systems to resolve conflicts and controversies, International Jurisdiction, states responsibilities, etc.) fromprivate aspects or international merchants (International trade dealing, International commercial acts, etc.) Into the regulation of Foreign Investments, there is an interesting dialectic relationship between the aspects that conform to the International Public Economic Order (freedom to invest, guarantee of the right to property- and for following the prohibition of direct and indirectexpropiations) and the regulation of private activities that effect the protection of the said principles in the international public economic order. Within this order of regulations can be put the Bilateral Investment Treaties ( B.I.T) as currently one of the most important pieces of the international system of Foreign Direct Investment, regulating duties and rights of the investors, mechanisms to solvecontroversies, the guarantee of the National Treaty and the Just Treaty, and others. This paper studies the problem of indirect or regulatory takings, from an historic origin in the Fifth Amendment of the Constitution of the United States of America, which establishes the basic principle of expropriations from the holder: “nor shall private property be taken for public use without just compensation”.In 1922, due to a demand from a mining company against the constitutionality of a state law that prohibited extraction of carbon from the subsurface of urban sites for public safety reasons, a notable sentence was given by the judge Oliver Wendell Holmes in Pennsylvania, in the case Coal v/s Mahon 260 US.393 (1922). This established the following doctrine: “while property may be regulated to acertain extent, if regulation goes too far it will be recognized as a taking”. However, later in 1922, the American doctrine opted for the Holmes interpretation for a period of almost fifty years, until the resurge in the seventies and eighties, with economic reform motives adopted during the Reagan years, and the development of this, the Regulatory Economy, basically embodied by the 1982 Nobel Prizewinner, George Stigler. Accordingly with this context, FISCHEL said that, “the most controversial aspect of expropriations is presented when the government establishes or alters a regulation, generating a decline or reduction in value of certain properties”. In this context of contracted, regulated, and jurisdictional internationalization, international panels as the ICSID (International Centrefor Settlement of Investment Disputes) are seen as important elements in the development of these theoretical and practical framework. This paper will examine the current scenario of property rights in the general context of Foreign Direct Investment regulation. It will begin with an overview of the situation and an historical evolution of the topic. Then, it will proceed with an analysis of the...