UIA 59.º Congress - Valencia
- Fundamental Principles on the Protection of Private Property and
Expropriation 06-11-2015
José Luís Moreira da Silva
SRS Advogados
Lisboa - Portugal
Valencia, 30th October 2015
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Private Property Protection
• Article 17 of the 1948 Universal Declaration on Human Rights
acknowledged the right to property as a moral right. It provided: “(1)
Everyone has the right to own property alone as well as in association with
others[]” and“(2) No one shall be arbitrarily deprived of his property.”
•
In 1986 and in 1990, the U.N. General Assembly adopted resolutions
considering the right to own property: Resolution 45/98, urged states “to
provide, where they have not done so, adequate constitutional and legal
provisions to protect the right of everyone to own property alone as well as
in association with others and the right not to be arbitrarily deprived of
one’s property.”
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Private Property Protection
•
The fundamental right to own property and to use it as an essential part of
the fundamental right to freedom
Vs
• The social and responsible use of property
EQUALS
• THE LAWFULNESS TO CONDITION AND LIMIT THE RIGHT TO OWN PROPERTY
THAT IS TO SAY:
• THE LAWFULNESS TO EXPROPRIATE OR IMPOSE RESTRICTIONS ON THE
RIGHT TO OWN PROPERTY!
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Private Property Protection
BUT,
• The lawfulness to expropriate needs to be CONDITIONED
• As to ascertain an equilibrium on the rights against social responsibilities
THAT IS TO SAY:
•
Expropriation needs to be
• NON-ARBITRARY, and NON-DISCRIMINATORY
and has to be granted an
• ADEQUATE, EFFECTIVE, PROMPT COMPENSATION
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● Definition of Expropriation:
a broad concept of expropriation could be:
“any conduct taken by any State that aims and
effects the privation of any foreign from its property’s
benefits, even if the State does not take the total
juridical interest from the property”.
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Expropriation - public utility (“public purpose”, “general interest”,
“community interest”)
● Every expropriation act must comply with a “public purpose” and a “faire
balance”;
● This requirement was in the UN Resolution n.º 1803, of 1962, but not after in the
Charter of Economic Rights and Duties of States;
● The Article 1 of the Protocol to the Convention for the Protection of Human
Rights and Fundamental Freedoms assigned this principle :
“Every natural or legal person is entitled to the peaceful enjoyment of his
possessions. No one shall be deprived of his possessions except in the
public interest and subject to the conditions provided for by law and by
the general principles of international law.
The preceding provisions shall not, however, in any way impair the right
of a State to enforce such laws as it deems necessary to control the use
of property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties”.
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Non-discrimination of foreigners
● The non-discrimination principle is implied in the legal framework of
the private property of foreigners.
Article 55 c) of the UN Charter
“With a view to the creation of conditions of stability and well-being which are necessary for
peaceful and friendly relations among nations based on respect for the principle of equal rights and
self-determination of peoples, the United Nations shall promote:
a. higher standards of living, full employment, and conditions of economic and social progress and
development;
b. solutions of international economic, social, health, and related problems; and international cultural
and educational co- operation; and
c. universal respect for, and observance of, human rights and fundamental freedoms for all
without distinction as to race, sex, language, or religion.”
Article 2 of the UDHR
“Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction
of any kind, such as race, colour, sex, language, religion, political or other opinion, national or
social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis
of the political, jurisdictional or international status of the country or territory to which a person
belongs, whether it be independent, trust, non-self-governing or under any other limitation of
sovereignty.”
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Compensation
Duty to compensate: although the Article 1 of the Protocol to the
Convention for the Protection of Human Rights and Fundamental
Freedoms does not directly assigns a right to compensation, it is a
related right. In turn, the American Convention on Human Rights says:
●
Article 21. Right to Property
“1. Everyone has the right to the use and enjoyment of his property. The law may
subordinate such use and enjoyment to the interest of society.
2. No one shall be deprived of his property except upon payment of just
compensation, for reasons of public utility or social interest, and in the cases
and according to the forms established by law.
3. Usury and any other form of exploitation of man by man shall be prohibited by law.”
● Eligible acts to compensate: acts of formal privation of property and
equivalent acts on expropriation and nationalization which empties the
right to property.
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Compensation
● Amount
(“full and fair value” or just an “appropriate”):
Article 4 of the 1962 General Assembly Resolution 1803:
“Nationalization, expropriation or requisitioning shall be based on grounds or
reasons of public utility, security or the national interest which are recognized as
overriding purely individual or private interests, both domestic and foreign. In such
cases the owner shall be paid appropriate compensation, in accordance with the
rules in force in the State taking such measures in the exercise of its sovereignty
and in accordance with international law. In any case where the question of
compensation gives rise to a controversy, the national jurisdiction of the State
taking such measures shall be exhausted. However, upon agreement by sovereign
States and other parties concerned, settlement of the dispute should be made
through arbitration or international adjudication”.
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Legal protection of the Expropriated
● “Due process of law” and “Judicial review”:
The importance of the BIT’s (Bilateral Investment Treaties): they assign the
right to be notified, right to information, right to previous earing, procedural
decision in a reasonable time.
They also give priority to friendly resolutions, however, they generally admit a
judicial review and in some cases an arbitration clause to invoke under the
ICSID
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Private Property Protection
There are EXCEPTIONS,
• Taking of property as a lawful sanction – NO COMPENSATION NEEDED
• Nationalization – APPROPRIATE COMPENSATION
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Private Property Protection
THE RIGHT TO PROPERTY PROTECTION IS BASED ON:
• Acquired rights
• Fundamental human rights
• General principles of law – unjust enrichment/abuse of rights
BUT,
• Legitimate exercise of police powers or as penal sanctions
• Control of major national resources
• Economic reforms or Social justice
CHANGES THE EQUATION!
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Private Property Protection
THE PROTECTION OF FOREIGN PROPERTY
Has the same issues...
And others...
• The standard of national treatment
• Equality and non discrimination – absence of dolus
• The international minimum standard
• Be an outrage - Act of bad faith
• A willful neglect of duty - Major insufficiency of governmental action
• Denial of justice
• General principles of law – ius cogens
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Private Property Protection
THE PROTECTION OF FOREIGN PROPERTY
THE PROBLEM:
• UN General Assembly Resolution of 1962 on Permanent Sovereignty over
Natural Resources
• UN General Assembly Resolutions of 1974 on (i) a New International
Economic Order and (ii) adopting the Charter of Economic Rights and
Duties of States
• Establishing the right for an appropriate compensation
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Private Property Protection
THE PROTECTION OF FOREIGN PROPERTY
A SOLUTION (?)
• multilateral investment codes...
• bilateral investment treaties...
• investment agreements...
• stabilization clauses....
• export and commercial guarantees...
• arbitrations ruled by international models (World Bank/ICSID- 1965)...
• International guarantees and International organizations involvement...
• State responsibility - diplomatic protection – Vattel and the Calvo clause...
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Recent ICSID Case Law on Expropriation
ICSID Arbitral Decisions:
Ac. 21-06-2011, Impregilo c. Argentina, ICSID Case No. ARB/07/17
•
Treat the investment in a fair and equitable manner – unlawfull expropriation
Ac. 28-07-2015, Tidewater c. Venezuela, ICSID Case No. ARB/10/15
•
Right to a prompt, adequate and effective compensation – lawfull expropriation
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Thank you!
José Luís Moreira da Silva
Partner
SRS Advogados, RL
Head of Public & Environmental Law Practices
Sector Head of Transports & Infrastructures
Tel.: + 351 21 313 20 00
Fax: + 351 21 313 20 01
E-mail: [email protected]
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