Abstract:
One of the most important challenges facing the international investment law regime today is
striking a balance between the principles that are made in use to protect and promote foreign
investment, on one hand, and the principles that gives the regulatory power to the host state on
the other hand. The practical implication of this challenge is that it is difficult to draw a dividing
line between non-compensable and compensable regulatory takings. Thus, in dealing with
indirect expropriation claims, past tribunals most often adopted mutually inconsistent positions.
On the back drop this fact, this thesis reviews how the Ethiopia BITs go through with issues of
indirect expropriation via analyzing the criteria and the scope adopted to identify compensable
regulatory measures from non-compensable regulatory measures, mainly in light of model BITs
and the jurisprudence of arbitral tribunals. The finding of the thesis is that the Ethiopia BITs
apart from basing upon the “old generation approach” which only seeks to promote and protect
the interest of foreign investor and it failed to explicitly articulate the scope of indirect
expropriation. By so doing, it definitely has a potential to hamper the government {Ethiopia}
from taking measures to enhance the quality of life for the great number of its citizens, thus, a
condition that the government needs to rethink. Particularly, the criticality of this potential
impact most often realizes itself at times of crisis wherein taking such measures are desperately
required, like economic shakedown or other factors that ensue investor pessimism in Ethiopia
economy.
