MEMO CLAIMANT - ALVAREZ - FDI Moot

equipment related to extraction both constitute Claimant‟s investment as defined under
Art. 1(2)(e) and Art. 1(2)(a) respectively, such components of the investment shall,
individually and collectively, merit protection from unlawful expropriation in any
form.
141. Claimant thus argues that Respondent, by suspending the Agreement and taking over
the wells, committed an unlawful expropriation of (a) sufficient gravity and (b)
duration.
a. Claimant was deprived of effective control over the investment
142. Accordingly, in order to find an expropriation, one need not ascertain whether the host
state performed a direct formal „taking‟ of the property, but should instead focus on
„consequential […] terms. What matters is the effect of governmental conduct‟ 143 ,
occasioning in
„any […] unreasonable interference with the use, enjoyment or
disposal of property as to justify an inference that the owner will not
be able to use, enjoy, or dispose of the property‟ 144 .
143. A constant line of arbitral jurisprudence has further described an expropriatory effect
as rendering the property rights practically useless 145 , where the investor „no longer is
in control of the investment, or where it cannot direct the day-to-day operations of the
investment‟ 146 .
142 Lauder, §200.
143 REISMAN, SLOANE, p. 121; CME, §604.
144 SOHN, BAXTER, p. 553 (Art. 10(3)(a)).
145 Starret Housing, §IV(b); Metalclad, §103.
146 LG&E, §188.
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