Permanent Sovereignty over Natural Resources and the Future of Foreign Investment

There is a divided opinion on whether a state incurs international liability when it enacts a law purporting to create a monopoly of life insurance. In any case, since no physical property is taken, there is no way of ascertaining with any degree of exactitude the amount of damages to follow. It is small wonder that the largest value, designated in the United States as " goodwill," is " usually not compensated for in cases involving eminent domain." See J.P. Bullington , " Problems of International Law in the Mexican Constitution of 1917 ," American Journal of International Law (Vol. 21, 1927), p. 699; A.P. Fachiri , " Expropriation and International Law ," British Yearbook of International Law (Vol. 6, 1925), p. 166; J.F. Williams , " International Law and the Property of Aliens," British Yearbook of International Law (Vol. 9, 1928), p. 4.

For what constitutes a denial of justice, see Ian Brownlie , Principles of Public International Law (Oxford: Clarendon , 1973), pp. 514-516.

A corporation whose majority interest, about 51 per cent., is owned by foreign nationals, natural or juridical, is to all intents and purposes considered a foreign corporation, although it may be organised under the laws of the host country.

Brownlie, p. 14. Emphasis not added by the present writer.

For further arguments, see A. Akinsanya , New National and Expropriation of Foreign Property. Case Studies in International Law, Chap. 1 (forthcoming). 6.

See D.S. Blanchard , " The Threat to U.S. Private Investment in Latin America," The Journal of International Law and Economics (Vol. 5, 1971), p. 1230. For an opposing view, Brownlie, p. 524, n. 5.

See Akinsanya , New Nations and Expropriation of Foreign Property, Chap. 1.

Lord Shawcross , The Problems of Foreign Investments in International Law (1963 ), mimeo, p. 8.

Guatemala was the first nation to invoke the Resolution in 1953, in expropriating American landed properties, and the Resolution was relied upon by Japanese and Italian courts in upholding the validity of the Iranian Nationalisation Act of May 1951.

Members of the Commission included Chile, Guatemala, U.A.R., U.S.S.R., U.S.A., the Philippines, Afghanistan, the Netherlands and Sweden.

Member states abstaining included Bulgaria, Burma, Byelorussia, Cuba, Czechoslovakia, Mongolia, Poland, Hungary, Ghana, Rumania, Ukraine and the U.S.S.R. For a full text of the Resolution, see the American Journal of International Law (Vol. 57, 1963), pp. 710-712.

For contrary views, see G. Schwarzenberger , "The Principles of International Economic Law," Recueil des Cours (Vol. 117, 1966), p. 32.

U.O. Umozurike , " Nationalization of Foreign-Owned Property and Economic Self-Determination," East African Law Journal (Vol. 6, 1970), p. 84.

See Akinsanya , New Nations and Expropriation of Foreign Property, Chap. 4.

See Farer , " Economic Development Agreements: a Functional Analysis," Columbia Journal of Transnational Law (Vol. 10, 1971), p. 237; Synder , " Investment Protection: the Dispute Solving Aspect," ibid. (Vol. 3, 1964), p. 131.

See Chorzow Factory (Indemnity; Merits), Judgment of September 13, 1928, Permanent Court of International Justice, Series A, No. 17, pp. 46-48. (Germany v. Poland). Also Texaco International Award ( 1977).

E. Lauterpacht (ed.), British Practice in International Law (1967), p. 121.

International Legal Materials (Vol. 13, 1974), pp. 744-766.

W. Friedmann , The Changing Structure of International Law (London: Oxford University Press, 1964), p. 138.

Adopted by a vote of 104-4-6, with the United States among the countries which abstained. H. Steiner and D. Vagts , Transnational Legal Problems ( Mineola, N.Y.: Foundation Press, 1976), p. 466.

Sponsored by Algeria, Cameroun Republic, Ghana, India, Malagasy Republic, Nigeria, Syria, U.A.R. and Yugoslavia.

Adopted by a vote of 102-0-22, with the United States among the countries abstaining, International Legal Materials (Vol. 12, 1973), p. 226.

Adopted with a vote of 108-1-16, withthe United Kingdom voting against and the United States abstaining, International Legal Materials (Vol. 13, 1974), p. 238.

Adopted without a formal vote. See reservations entered by the United States, Japan, France, the Federal Republic of Germany and the United Kingdom to both resolutions, International Legal Materials (Vol. 13, 1974), p. 744.

Adopted by a vote of 39-2-23, with the United States and Greece voting against, the United Kingdom, Federal Republic of Germany, Netherlands, Japan, Denmark and Italy among the countries abstaining, International Legal Materials (Vol. 11, 1972), p. 1474.

R. Lillich , " The Diplomatic Protection of Nationals Abroad: an Elementary Principle of International Law Under Attack," American Journal of International Law (Vol. 69, 1975), p. 361.

Browlie, p. 10.

Akinsanya , " Investment Guarantee agreements with Washington and the Hickenlooper Amendment," The Indian Journal of International Law (Vol. 16, 1976), pp. 517 et seq.; Steiner and Vagts, pp. 482-483; Lillich , " Requiem for Hickenlooper," American Journal of International Law (Vol. 69, 1975), p. 97. Under the Hickenlooper Amendment the United States Government is required by law to suspend American bilateral assistance to any country that takes American investments without discharging its obligation under international law (i.e. payment of compensation) within six months.

International Legal Materials (Vol. 2, 1963), pp. 386-417.

See A. Ford. The Anglo-Iranian Oil Dispute of 1951-1954 ( Los Angeles, Ca.: The University of California Press , 1954); Morris et al., "The Politics of Nationalization: Guyana v. Alvan," in K. Sauvant and G. Lavipour (eds.), Controlling Multinational Enterprises (Boulder, Colorado: Westview Press, 1976), pp. 111-143.

See Akinsanya , New Nations and Expropriation of Foreign Property, Chap. 5.

For the text of the Convention, see International Legal Materials (Vol. 4, 1965), p. 532. As of September 30, 1977, some 87 States have become members of the International Centre for Settlement of Investment Disputes (ICSID). These include capital-exporting and capital-importing nations. However, most Latin American, Asian and Arab countries are not parties to the ICSID Convention.