WHEN DOES GOVERNMENT REGULATORY MEASURE AMOUNT TO EXPROPRIATION? : LOOKING A WORKABLE ROADMAP UNDER THE ‘BITs’ OF ETHIOPIA

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.