Law Commons^™

Incomplete Compensation For Takings, Thomas W. Merrill

Faculty Scholarship

If a tribunal determines that a state actor has expropriated foreign investment property, or, under Chapter 11 of the North American Free Trade Agreement (NAFTA), that a state actor has adopted a regulation that is "tantamount to" an expropriation of foreign investment property, then that tribunal must determine the amount of compensation owed. International law has developed methods to determine the size of a compensation award when a state formally expropriates property. But the notion, reflected in Chapter 11 of NAFTA, that states may be required to pay compensation to foreign investors for what are, in effect, regulatory takings, is …