public purpose in foreign investment law

Document Type : Research Paper

Authors

1 PhD Student in International Law, Faculty of Law, Theology and Political Science, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Professor, Department of Private Law, Faculty of Law, Farabi Campus, University of Tehran, Tehran, Iran, Corresponding Author.

3 Assistant Professor, Department of International Law, Faculty of Law, Theology and Political Science, Science and Research Branch, Islamic Azad University, Tehran, Iran

10.22099/jls.2022.39116.4174

Abstract

One of the main challenges in attracting investment is maintaining the interests of foreign investment while protecting the public interest of the host country. The combination of these two is difficult and controversial. There is no comprehensive, agreed-upon definition of public interest in foreign investment law, although most investment agreements include the term "public purpose." In this article, we will examine the nature of the criterion of "public purpose " as one of the main principles of nationalization and will discuss the difference between the concept of public purpose and national security. The existence of a public purpose is one of the basic conditions for the legitimacy of the nationalization of capital and natural resources, while in international law there is no objective and clear criterion for evaluating the public purpose. Therefore, the decision on the legitimacy of expropriation based on the public purpose is practically left to the governments themselves to decide by exercising their authority. And the nationalizing state's recognition of the public purpose when nationalizing foreign property is based on the government's sovereignty over natural resources, but this does not prevent a foreign investor from objecting to it. The doctrines and procedures of international arbitration should also be referred to the domestic law of the nationalizing country.

Keywords

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