Ndi, George (2017) Compensation and Damages for Nationalization: A Critical Appraisal of Classical International Law Theories and Contemporary Legal Problems. Manual. Revue Des Recherches Juridiques et Economiques, Mansourah University Press, Mansourah, Egypt.


Remedies for loss caused by the regulatory acts of host States in exercise of their sovereign prerogatives is a generally recognized principle of international law. In the area of nationalization, however, we discern in the shadow of this communis opinio the presence of a significant range of conceptual difficulties and legal problems. From a historical perspective, a State’s right to nationalize foreign direct investment (FDI) projects, and the applicable or accepted standard of compensation or damages, have been the focal questions informing international arbitral and claims practice. A key objective of the current text is to attempt a critical appraisal of the current state of international law on reparations. In pursuing this task the authors employ theoretical, historical and legalistic methods. An argumentative approach will be informed by a much broader perspective aimed at examining the wider economic, political and social context of the principle of reparations for nationalized property.

The main thrust of the monograph is directed at a critique and appraisal of the classical international law theories on reparations. Focusing on the upstream petroleum sector, the authors’ main objectives include: (a) to conduct a critical inquiry into the current state of the international law governing reparations for nationalized assets; and (b) posit the necessity for a conceptual shift of focus away from the emphasis placed under the current law on the restitutionary (restitutio in integrum) function of reparations for nationalized petroleum assets. In pursuing this second objective, the authors argue that from a reparations perspective a clearer distinction should be drawn between lawful and unlawful forms of regulatory interference with FDI projects in the upstream petroleum industry. This would imply, on the one hand, limiting compensation for lawful acts of nationalization to damnum emergens; on the other hand, remedies for expropriation should attract both damnum emergens plus lucrum cessans, by virtue of the latter’s unlawful character.

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