Study On The Principle Of Proportion Of Indirect Expropriation Of International Investment

In the wake of the continual improvement in international trade and the rapid increase in international investment liberalization,an increasing number of cases have been brought before international arbitration tribunals on grounds of indirect expropriation.Indirect expropriation has emerged as a leading issue in international investment arbitration.Additionally,the identification of indirect expropriation has become a major concern among academics and international arbitral tribunals.Currently,the international community lacks an agreed-upon standard for identifying indirect expropriation,which progresses from the solo effect standard to the solo purpose standard and ultimately to the effect and purpose standard.However,there is no legal provision and basis for operation in the world as how to balance the effect and purpose.As the international arbitration tribunal draws lessons from the European Court of Human Rights to use the principle of proportional,then this principle been widely used in the determination of indirect expropriation in international investment arbitration.It is possible to identify indirect expropriation through the practice of the principle of proportionality which balances the effects of the measures taken by the host country with the objective sought by it.However,the application of the principle of proportionality is not foolproof,the concept of it is vague and there is no unified norm about it’ s operation,resulting in excessive discretion of the arbitral tribunal.The arbitral tribunal does not clearly define the minimum damage measure,nor does the order of the operation of this principle.Besides,the international arbitral tribunal does not have specific measures and uniform provisions on how to make a proportion,nor review the purpose of the host country rigorously.These problems exert a profound impact on the practice of this principle and the credibility of the international investment arbitration tribunal.These challenges should be addressed one by one in order to identify indirect expropriation and balance the interests of both sides.This thesis studies the foundation profile and practice of this principle in the case of indirect expropriation in international investment.Through the research of related cases,we can know that the principle of proportionality is developed from legal precedents,so there is no specific provision in international arbitration,nor does unified paradigm for its application.Besides,due to the lack of burden of proof and high requirements for the professionalism of arbitrators,the discretionary power of the arbitral tribunal discretionary is excessive.Finally,due to trust in the host country,the legitimacy of purpose is often ignored in practice.These problems can be solved one by one by defining the concepts of this principle in the treaty to standardize the discretion of the arbitral tribunal,also to construct a reasonable order of application and to conduct a classified review of the authenticity of the objective into the appropriateness.The solution of these problems can also be used for reference to our country.The research and application of the principle of proportionality can help to deal with the disputes between the host country and investors and reduce the risk of indirect expropriation.It is of paramount importance to China’s economic development and the promotion of international discourse.