Orthodox Approach to the Expropriation Standard in Investment Treaty-Climate Change Disputes: Determining the Breach Through the Sacrificial-Lamb Doctrine

Abstract

It is an undisputed fact that the meaning of expropriation in international investment law is more comprehensive than the meaning that is usually attributed to it in national legal systems. The (ordinary) definition of BITs covers not only the legal or physical taking of the investor’s assets by the host state (direct expropriation) but also the measures that are similar or have an equivalent or similar effect (indirect expropriation). Direct expropriations appear not to be difficult to identify, and they rarely happen. On the contrary, even if the (ordinary) expropriation clause distinguishes indirect expropriation through its effects, its determination is a very conflictive issue. Claims in this regard are common practice in international investment litigation.