Essay on Non compensable expropriation analysis

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The United Nations General Assembly Resolution, 1803 of 1962, discusses the concept of expropriation by stating that it shall be based on grounds or reasons of public utility, security or the national interest which are recognized as overriding private interests . The Resolution further goes on to state that in such cases the owner will 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 .
Expropriation under international investment law could be through direct or indirect means, whereby direct investment would involve formal transfer of title or outright physical seizure , expropriation of property could also
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An example of such claims can be found under the jurisprudence of the North American Free Trade Agreement (NAFTA), where under Art. 1110 of NAFTA, no party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment, except: (a) for a public purpose;(b) on a non-discriminatory basis; (c) in accordance with due process of law and Article 1105 (1)15 and (d) on payment of compensation .
This article was interpreted by the NAFTA Tribunal in the case of Metalclad Corp. v. United Mexican States , where the strongest pro-investor interpretation of Article 1110 of NAFTA was laid down by the Tribunal . Under this case, the Mexican Federal Government in 1995 authorized a subsidiary of the US-based Metalclad Corporation, to take over and operate a toxic waste facility in the Mexican state of San Luis . The facility had a history of contaminating local groundwater and Metalclad was aware that its proposed business in Mexico was highly regulated and was subjected to Mexican Environmental law . The dispute in the case began when the Mexican municipality of Guadalcazar denied a building permit to Metalclad in spite of the assurances of the

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