Compensation for expropriation of foreign private investments: the problem of standards

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University of Dar es Salaam
This work examines compensation standards in International Law. The main issue is the standard for payment of compensation when foreign Private property is expropriated. Its overall argument is that despite the efforts of the western (capitalist) states to parade the "Prompt, adequate and effective" compensation standard or the Hull Formula as an International law principle, the rule has never been accepted as such by the majority of the members of the international community of states. Although the western (capitalist) states have been trying to induce the capital importing countries to accept it by including it in the bilateral and multilateral treaties in which they were parties yet state practice shows that the Hull formula has never been preferred in compensating the expropriated foreign investors. The study shows that despite the resistance of some capital exporting countries the "appropriate" compensation standard has now gained an international law status. Evidence of its acceptance, as an International law rule in addition to its support in the United Nations, is found in state practice, decisions of international tribunals and arbitral awards. Moreover the study reveals that even where the capital importing countries have in one way or another committed themselves to honor the Hull rule it is the "appropriate" compensation standard that is finally used in compensating the expropriated parties.
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Investments, Law and legislation, Eminent domain (International law), Eminent domain, Tanzania
Mapunda, B.T (1993) Compensation for expropriation of foreign private investments: the problem of standards, masters dissertation, University of Dar es Salaam. Available at (