STATE PARTICIPATION IN OIL-CONCESSIONS: A NEW KIND OF TAKING OF FOREIGN PROPERTY?

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References

1 Reference may be made, for example, to nationalisation measures taken by Iran in 1951: text of nationalisation law of May 2, 1951, in Annuario di politica internazionale (1951) p. 444, note i; by Algeria in 1967 (cf. Orders Nos. 67-164 and 67-165 of August 24, 1967 in Journal of ficiel de la Republigue Algerienne democratique et populaire 29 aout 1967, p. 710; Orders Nos. 68-117 and 68-130 of May 13, 1968 in J.O.R.A.D.P. 14 mai 1968 pp. 382 ff.), in 1970 - report in R.G.D.I.P. (1971) p. 468 and in Keesing's (1971/72) p. 25085 - and in 1971 (Orders Nos. 71-8, 71-10, 71-11, of February 24, 1971 and Order No. 71-23 of April 12, 1971, in Docunzents sur les relations entre l'Algerie et les societes petrolieres francaises, Algier, May 1971, Annexes nos. 6 and 9); by Iraq in 1972 - text of nationalisation law No. 69 of June 1, 1972, in I.L.M. (1972) p. 846-and by Libia in 1970 (Law No. 69 of July 4, 1970, on which see the explanatory note in Highlights of Libyan Legislation in Petroleum Resources, (First African Petroleum (Conference) Tripoli, Feb- rears 2-12, 1974, p. 11), in 1971 (text of law nationalising the British Petroleum I;x- ploration Company of December 7, 1971, in I.L.M. (1972) p. 380), in 1973 and 1974-for detailed information see respectively Keesing's (1973) p. 26194 and (1974) p. 26617. 2 With the 1901 d'Arcy concession, a parcel of shares to the value of £ 0.000 was provided for in favour of the Iranian Government. The provision was never carried out. The 1933 Anglo-Iranian Oil Company concession bound the concessionaire (which never fulfilled its obligation), in the case of issuing new shares to the public, to open the sub- scription lists in Tehran and abroad simultaneously. The concession made by Iraq to IPC

contained the same clause which also remained a dead letter. Cfr. ZAICARIA, " La participation dans 1'optique du depassement du regime actuel des concessions ", Le Petrole et le Gaz Arabes (1972) No. 70 at p. 22; ID., " Le petrole arabe: urgence d'un ' nzw deal "', Le Pe- trole et le Gaz Arabes (1972), No. 73 at p. 29; CAFTAN, The evolution of oil concessions in the Middle East and North African, New York, 1967, p. 123. 3 In some cases State participation was subject to the discovery of marketable quantities of oil. In others the conceding State was given a right of option to be exercised within a certain time-limit from the discovery of marketable quantities of oil. Example in ZAKARIA, "La participation " cit., p. 23; CATTAN, op. cit., p. I2.�. 4 The practice of joint ventures began with the 1957 Iran-Agip agreement. Since that date other agreements with similar content have been made in Egypt, Saudi Arabia, Kuwait and Algeria. For a detailed analysis of the corporate structure brought about in individual countries by such agreements, CATTAN, op. cit., pp. 126-151. 5 State-owned oil companies exist in both the geographical areas dealt with herein (Algeria, Libya, Kuwait, Saudi Arabia, Iran, Iraq). For an example see the text of the Libyan oil company's constituent law in OPEC Selected Documents of the International Petroleum Industry 1968, p. 25. 6 Cf. OPEC Resolution XVI.90 (r9u'8) Declaratory Statement of Petroleum Policy in Member Countries which reads: " where provision for governmental participation in the ownership of the concession holding company under any of the present petroleum contracts has not been made, the Government may acquire a reasonable participation, on the grounds of the principle of changing circumstances. If such provision has actually been made but avoided by the operators concerned, the rate provided for shall serve as a minimum basis for the participation to be acquired " The problem of participation frequently appeared on the OPEC Conference's agenda from 1969 to 1971. In 1970 (Resolution XX.I13) the Conference of member States charged the economic Commission to study the possible methods of integrating oil industries into each States economy. In 1971 (Resolution XXIV. 135) the Conference invited the member States to actually apply the principle of participation and appointed a committee to work out a scheme to put the principle into effect as regards existing concessions. Three months later the committee presented its report to the Con-

ference which resolved to make member States enter into formal negotiations aimed at con- cluding participation agreement in accordance with the scheme laid down by the committee. (Resolution XXV.r39, 1971). For the origin, structure and functions of OPEC: EL-SAYED, L'organisation des pays exportateurs de petrole, Paris, 1967, pp. 123 ff.; ZUHAYR MIKDASHI, " Ccoperation among Oil Exporting Countries with Special Reference to Arab Countries: A Political Economy Analysis ", Int. Org. (1974), pp. 6 ff. 7 The Getty Petroleum Company - previously working under the name of Veedol - had been subject to State control from June 1967. Cf. Keesing's (1971/72) at. p. 25085. Text of the agreement in OPEC Selected Documents of the International Petroleum Industry z968, p. 264. 8 The two companies had undergone partial nationalisation by means of the Algerian orders of February and April 1971 (see note i above). For explanatory notes on the two agreements Keesing's (1971/72) p. 25087 f.; Touscoz,, "La nationalisation des societes petrolieres frangaises en Alg6rie et le Droit International ", R.B.D.I. (1972) pp. 500 f. 9 The agreement follows the Libyan decree partially nationalising (51%) Occidental Petroleum's by one day. For a short summary of the agreement cf. Middle East Economic Survey (1973) No. q.3, pp. i ff. Text of the Libyan decree on nationalisation in Petroleum Intelligence Weekly, August 20, 1973, pp. 8 f. 10 For information on such agreements Keesing's (1973) p. 26195. Both companies had been partially nationalised (51%) by the law of September 1, 1973. Text in Middle East Economic Survey (1973), No. 47, pp. 2 ff. m Middle East Economic Survey (1974) No. 26 p. 4. These companies had also been 51% nationalised by the aforesaid Libyan Law of September 1, 1973 (see note 10 above). 12 Text of the agreement in OPEC Selected Documents of the International Petroleum Industry 1972, pp. 41 ff. 13 Text of the agreement in Middle East Economic Survey (1973) No. 48 (Supplement), pp. 2 ff. 14 Text of the agreement in OPEC Selected Documents of the International Petroleum Industry 1972, pp. 107 ff. The text signed at Riyadh differs from that initialled in New York on October 5, 1972 between the Saudi Arabian oil minister, Ahmad Zaki Yamani, on behalf of certain Persian Gulf Countries (Abu-Dhabi, Qatar, Iraq, Kuwait, and Saudi Arabia) and the oil companies operating in their territory. In fact, it anticipates by one year State

acquisition of gr% of the companies' interests and eliminates the clause which envisaged entry into force on the ratification of at least three signatory States. For comments on the agree- ment : DEVAUX-CHARBONNEL, " L'accord de New York sur la participation des Etats pro- ducteurs de petrole dans le capital des societes concessionnaires ", Annuaire Français (1973) pp. 745 ff.; " From concession to participation: Restructuring the Middle East Oil In- dustry ", New York University Law Review (1973) pp. 793 ff. On the complex phase of negotiations, Middle East Economic Survey (1972) No. 14, i8, 22, 29, 30 (Supplement), 31, 32, 36 (Supplement), 39, 43> 47, 51; Le Petrole et le Gaz Arabes (1972) No. 87, p. 10. i5 It has, in particular, been upheld that by envisaging simply a financial participation the agreement merely sanctioned the old regime of concessions. Cf. " Participation ou conso- lidation des concessions? ", Le petrole et le Gaz Arabes (1972) No. 87, pp. 3 ff. Such a view has in fact been reiterated in the interview given by the Saudi Arabian oil minister Zaki Yamani to the daily newspaper al Madinah at Riyadh on October 27, 1972. On being asked whether the agreement initialled in New York marked the end of concessions, he replied: " Non, au contraire. C'est une police d'assurance et les compagnies doivent payer la prime qui est en l'occurence la participation " Cf. Le petrole et le Gaz Arabes (1972) No. 88, p. 12. 16 Cf. Le Monde Diplomatique, Mars, 1971, pp. 14-16. Among the companies' arguments against " participation ", mention must be made, in addition to sanctity of con- cession agreements, of the claim of considering the problem of participation " frozen " until the Tehran Agreement of February 14, 1971 had expired (1976). Text in LL.M. (1971) p. 247. The Persian Gulf States and the companies operating in their territory had, by means of such a treaty, agreed to raise taxation and posted prices of crude. Cf. Foreign Affair (1973) PP- 475 f. " It could, therefore, be maintained that the agreement includes a pactum de nego- tiando whose sole effect is to bind the parties to undertake negotiations " in good faith " with a view to possibly concluding agreements. On the pactum de negotiando in general Fors, L'accordo preliminare nel diritto inter- nazionale, Milano, 1974, pp. 117 ff.

13 Cf. Art. 3 (a) and Annex 2 to the agreement in OPEC Selected Documents 1972, cit., pp. 108, 1I6. 19 For a report of such agreements Keesing's (1974) pp. 26619 f. Recently a general agreement has apparently been reached by which complete control over Aramco has passed to Saudi Arabia. Cf. Middle East Economic Survey, December 6, 1974, as quoted in Corriere della Sera, December 7, p. 4. 20 Report in Keesing's (1974) loc. cit. Text of the Kuwait agreement in Middle East Economic Purvey (1974) No. 17 (Supplement) pp. 1 if. According to the statement made by the Kuwait minister Abdel Mutaleb Kazimi, in Algiers last March, his country has already totally nationalised the two foreign oil companies operating in his territory. Cf. II Sole/24 Ore, March 6, 1975, p. I. zi Report in Keesing's (1974), loc. cit. zz The principle of State permanent sovereignty over natural resources has often been reiterated by the United Nations General Assembly. Cf. Resolutions 1803 (XVII) of December y, 1962; 2158 (XXI) of November 25, 1966; 2386 (XXIII) of November 1968; 2692 (XXV) of December 11, 1970; 3016 (XXVII) of December 18, 1972; 3171 (XXVIII) of December 17, 1974. See also the Security Council Resolution 330 (1973) of March 24, 1973, and the Assembly's recent Resolutions on economic matters: Declaration own the Establishment of a New International Economic Order [A/RES/3201 (S.VI) i May 1974]; Charter of Economic Rights and Duties of States [A/RES/328 (XXIX) 12 December 1974]. It is debated in doctrine whether the principle is to be ascribed to ius cogens or not. For support as regards the affirmative view see Br,EHtvtE, Souverånität der Jungen Natio- nalstaaten fiber Naturreichtiimer, Berlin 1967, pp. 206 ff. In the same sense also BROWNLIE, Principle of Public International Law, Oxford 1973, p. 500; GIARDINA, " Nationalisation et indemnisation en droit international ", in Etudes presentees au Colloque sur le droit pe- trolier et la souverainete des pays producteurs (Alger October .rp7-r), Paris, 1973, p. 48; Touscoz, " La nationalisation des societes petrolieres " cit., p. 496; ID., " Le regime juri- dique international des Hydrocarbures et le droit international du developpement ", Clunet (1973) at p. 315; contra SZTUCKI, Jus cogens and the Vienna Convention on the Law of Treaties, Wien, 1974, pp. 42-44. For a denial of the very existence of the principle at the international level, PENROSE, " Participation financiere et souveranete; quelques aspects économiques ", Le Pétrole et le Gaz Arabes (1971) I�TO. 65, pp. 25 f. Of particular relevance

in the present context is Resolution 2168 (XXI) of November 25, 1966 recognising the right of all States, especially developing countries, to take part in the management of foreign companies operating in their territory,. � See for all SACERDOTI, I contratti fra Stati e stranieri nel diritto internazionale, Milano, 1972; WEIL, " Problemes relatives aux contrats passes entre un Etat et un parti- culier ", Hague Recueil ( r969-III), pp. 95 ff.; GOLDSCHMIDT, "Transactions between States and Public Firms and Foreign Private Firms ", Hague Recueil (1972-II), pp. 214-327. 24 In this sense Touscoz, .. Le regime " cit., p. 327. See also title III of the Sonatrach- Getty agreement in OPEC Selected Documents r9G8 cit., pp. 283-286, from which the agreements' subjection to Algerian law (art. 64) can clearly be inferred. To be noted, besides, is the Order No. 71-24 of April 12, 1971 which contains a reservation of juris- diction in favour of the Algerian Supreme Court for all disputes between State and foreign companies in fiscal matters. For a general indication on the present tendency of OPEC member States to reduce to a minimum resort to foreign laws or jurisdictions in respect of contracts with foreigners, see OPEC Resolution XVI.90 cit., which reads: " Except as otherwise provided for in the legal system of a member Country, all disputes arising between a Government and the operators shall fall exclusively within the jurisdiction of the competent national courts or the specialised regional courts, as and when established ".

zs Order No. 71-22 of April 12, 1971, in Documents sur les relations entre I'Algerie et les societes petrolieres françaises cit., Annex No. 9, p. A 9-3. zs General Agreement on participation, in OPEC Selected Documents T972 cit., at p. 108. z7 Cf. ZAKARIA, " La participation " cit., pp. 26 ff. who, while conceding at the begin- ning of 1972 that full participation should be the final aim of producing countries, held that a participation en aval at the time would have cost the countries concerned an out- flow of capital for above their financial surplus and would, therefore, have been to the detriment of their development programmes. Moreover, given that such activities as trans-

port, refining and distribution largely take place outside producing countries, these latter would have been exposed to reprisals on the part of other States were they ever in the future to take legislative steps in ensuring exclusive exploitation of their natural resources. za Art. 6 (a). z9 Art. 5 (i) of the Kuwait-BP and Gulf Oil agreement envisages the setting-up of a " Joint Management Committee " made up of four members, two of which are State representatives. Art. 11 of the Sonatrach-Getty agreement provides for an " Executive Council " of seven members of which four represent the Algerian State-owned company. The same article requires a quorum of six members for the Council meeting to be valid. Art. 3 of the Libya-Oasis agreement envisages a management committee made up of three members of which two represent the Libyan government. This provision is also to be found in the Libya-Occidental agreement, while the same representation of the two parties is provided for in the Libya-ENI agreement (art. 4). 3o E.g., art. 3.B of the Libya-Oasis agreement; art. 5 of the Kuwait-BP and Gulf-Oil agreement; art. 6 of the Riyadh Agreement; art. 17 of the Sonatrach-Getty agreement. ai The Riyadh Agreement is vague also in this respect in that it leaves the Implementing Agrements to determine the majority required for management decisions to be adopted (art. 6, para. 9). As for the other agreements, that between Sonatrach and Getty Petroleum requires a majority corresponding to 3/4 of the members present (art. 16); the Libya-ENI agreement requires a majority of votes representing 70% of the participation company's capital (art. 4); the Kuwait-BP and Gulf Oil agreement requires a majority vote of 75% (art. 5 ). 3z As far as is known, the Libya-Oasis agreement is unique in requiring a simple majority corresponding to the State participation share (art. 3 B).

� In agreements concluded by Algeria Sonatrach is appointed as operator. See, for example, art. 18 of the Sonatrach-Getty agreement. On the contrary in Libya the foreign company is generally the operator. See, e.g., Annex A to the Libya-ENI agreement in OPEC Selected Documents 1972 cit., p. 53; Art. 3 C of the Libya-Oasis agreement. 34 Art. 5 (ii) of the Kuwait-BP and Gulf-Oil agreement. 35 E.g., art. 6 of the Sonatrach-Getty Petroleum agreement. � Art. 7 of the Libya-Oasis agreement. A similar provision is also included in the agreement with Occidental - Middle East Economic Survey (1973) No. 43, p. 3 - and with ENI (art. 8 of the Libya-ENI agreement). 37 Art. 5 D (e). 30 Art. 4, of the Kuwait-BP and Gulf-Oil Agreement.

39 Recourse to international commercial arbitration is a common feature in contracts between States and foreigners. For all, MANN, " State Contracts and International Arbitra- tion ", B.Y.I.L. (1967), pp. 6 ff. A particularly interesting problem regards the legal auto- nomy of the compromissory clause in respect of contracts containing it. See FouCHARD, L'arbitrage commercial, international, Paris, 1965, pp. 67 ff.; ROBERT, Arbitrafie civil et commercial, Paris, 1967, pp. 362 ff.; MEZGER, " Vers la consecration aux Etats-Unis de 1'autonomie de la clause compromissoire dans 1'arbitrage international ", Revue critique (1968), pp. 25 ff.; TOUBIANA, La domaine de la loi du contract en droit international prive, Paris, 1972, pp. 49 ff. �° Art. 64 of the Sonatrach-Getty agreement. On recourse to general principle of law in contracts between States and foreigners, see, in general, McNAIR, " The General Prin- ciples of Law Recognised by Civilised Nations ", B.Y.LL. (1957), pp. i ff. 41 Art. 7, in Documents sur les relations entre I'Alg6rie et les societes petrolieres françaises cit., p. A 9-9. 41 E.g., art. 8 of the Libya-Oasis agreement. More precisely reference is made to the arbitration Court set up in 1923 and attached to the International Chamber of Commerce. Application to this Court is envisaged for any disputes of an international commercial nature. It decides in accordance with the conciliation and arbitration rules laid down by the International Chamber of Commerce: Fouchard, op. cit., pp. 215 ff. -

43 E.g., art. 9 (6) of the Libya-ENI agreement; art. 2 E of the Libya-Oasis agreement; Annex No. tao the General Agreement on participation; Letter Regarding Financial Ar- rangements annexed to the agreement concluded by Kuwait. 44 Art. 3 of the Sonatrach-Getty agreement in OPEC Selected Documents 1968 cit., p. 265; " Explanatory Memorandum " on the Kuwait-BP and Gulf Oil agreement, in Middle East Economic Survey (1974) No. 17 (Supplement), p. 2; " Summary of New Libyan-Oc- cidental Pact ", in Middle East Economic Survey (1973) No. 43, p. 3; art. 2 B of the Libya- Oasis agreement. Finally, as to the Libya-Mobil and Exxon agreement, a brief summary may be found in Middle East Economic Survey (1974), No. 26, p. 4. 45 Cf. Keesing's (1972), pp. 25087 f.; Touscoz, op. cit., p. 501. 4s Art..I 4 (a) (1) (2) and Annex 5 to the General Agreement on participation, in OPEC Selected Documents 1972, pp. 109, 126.

47 A limited number of six-montly (e.g., Libya-ENI and Libya-Oasis) or yearly (e.g., Sonatrach-CFP and Sonatrach-Elf-Erap) instalments constitute a maximum deferment in pay- ments. A case of immediate payment is to be found under the Libya-Occidental agreement. 4$ E.g., Annex No. q to the General Agreement on participation; Art. 2 of the Kuwait- BP and Gulf Oil agreement; Art. 9 (3) of the Libya-ENI agreement; Art. 3 of the Sonatrach- Getty agreement. 49 Sonatrach-Getty, art. 3. 5° Libya-Oasis, art. 26. 51 Prevailing doctrine on international law is unanimous in asserting that such an obligation has by now been accepted not only by Western countries with a capitalist econ- omy but also by socialist countries and the Third World. Among most recent authors, FRANCIONT, "Petrolio libico, giudice italiano e diritto internazionale", Rivista (z97q.), pp. 465 ff.; ID., " Compensation for Nationalisation of Foreign Property: the Borderland between Law and Equity ", I.C.L.Q. (1975), pp. 272 ff., in whose view this obligation can be deduced from the general principle forbidding unjustified enrichment. The principle had already been invoked, among others, by GIARDINA, " Nationalisation et indemnisation " cit., at p. 47, who points out that in itself it does not suffice in solving the problem of compensation. According to this author, it remains to be ascertained when enrichment is unjustified; in his opinion, the international community's attitude in favour of decolonisation enables nationalisation measures to this end to be held as justified " meme quand l'indemnit6 offerte est nulle ou entierement inadequate par rapport a la valeur des biens expropries ". See also SCHREUBER, " Unjustified Enrichment in International Law", A. J. Comp. L. (1974), pp. 284 ff. A particular stand is taken by Bn'rTncLrrn, " Nazionalizzazione (Diritto inter- nazionale pubblico) ", Novissimo Digesto Italiano, XI, 1965, pp. 151 ff., who draws this obligation from those common rules on " treatment " and protection of " nationals " abroad

to be held as generally applicable to foreign private property in respect of any losses, even due to nationalisation. In the past some writers drew a distinction between expropriation and nationalisation and upheld compensation as being due only as regards the former. For all, QUADRI, La sud- ditanza nel diritto intemazionale, Padova, 1936, pp. 236 ff.; FRIEDMAN, Expropriation in International Law, London, 1953, pp. 206 ff. For arguments overruling this line of thought, GIARDINA, Op. cit., pp. 43 f. 5z Among others: K 1 THN. "Nationalisation of Foreign-Owned Property in its Impact on International Law", A.J.I.L. (1951), pp. 709 ff.; BINDSCHEDLER, "La protection de la propriete privee en droit international public ", Hague Recueil (1956-TI), pp. 245 ff.; FOIGHEL, Nationalization. A Study in the Protection of Alien Property in International Law, Copenhagen. I957, pp. 85 ff.; Brc,Kt:R, " Tust Compensation in Expropriation Cases: Decline and Partial Recovery ", Proceedings of the American Society of International Law, vol. 53 (1959), PP. 337 ff.; WORTLEY, Expropriation in Public Irrternational Law, Cambridge, 1959, pp. 115 ff.; WHITE, Nationalization of Foreign Property, London, 1961, pp. 11 ff.; DOMKE, " Foreign Nationalization. Some Aspects of Contemporary International Law ", A.J.LL. (1961), pp. 603 ff.; FOUILLOUX, La nationalisation et le droit international public, Paris, 1962, pp. y6 ff.; KATZAROV, The Theory of Nationalization, The Hague, 1964, pp. 324 ff.; Tosato. "Un recente dibattito in tema di nazionalizzazione ed espropriazione di beni stra- nieri nel diritto internazionale pubblico ", Rivista (1973), 771 ff.; Touscoz, " Le regime " cit., pp. 322 ff. In whose view the classic rule is to be interpreted and applied in good faith and allowance made for the specific circumstances characterising each case of na- tionalisation. See, besides, the two codifying drafts on State responsibility for injuries to aliens, in GARCIA-AMADOR, SOHN, BAXTER, Recent Codification of the Law of State Respon- sibility for Injuries to Aliens, Leiden, 1974. pp. 52 ff., 203 ff. 53 In this sense WHITE, op. cit., p. 13-15. Certain authors, on the other hand, are of the opinion that compensation should include any prospective profits unrealised by the nationalised company. CHYNG, " The Rationale of Compensation for Expropriation ", Grot. Sac. ( I958-59) P. 291. Arguments against this view in FRANCIONI, "Compensation" crit.. pp. 272 ff.

5q LILLICI-I, " International Claims: Their Settemlent by Lumn-Sum Agreements ", in International Arbitration, Liber Amicorum for H. Domke, The Hague, 1967, p. 146. 55 GIARDINA, "Nationalisation cit., pp. 44 ff.; I�ATTAGLINI, op. cit., pp. 164 ff.; LILLICH, "International Claims" cit., pp. 143 ff.; LITnIANS, The International Lump-Sum Settlements of the United States, Ann. Arbor, 1962, p. 45 ff.; Fouilloux, op. cit., p. 445; DE LA PRADIrLLE, " Les effects internationaux des nationalisations. Rapport et projet de Resolution definitifs ", Annuaire IDI, vol. 43, I, Rapport provisoire, 1950, p. 64. ss Substantial difference of opinion exist in doctrine on this problem. The contrast lies precisely in the practice of lump-sum settlements which, as we have seen, does not conform to the classic rule. For those who view lump-sum settlements as mere derogations from the rule in question and thus recognise it as being in force, BATTAGLINI, op. cit., pp. 164 ff.; ID., I diritti degli Stati nelle zone polari (reprinted from Novissimo Digesto Italiano, Zone polari) Torino, 1974, p. in, at note 2. Others consider the old rules as obsolete: GIARDINA, " Nationalisation " cit., p. 46, in whose opinion the practice of lump- sum settlements is proof of the classic rule having been abrogated qua general international rule; FRANCIONI, " Petrolio libico " cit., p. 467 according to whom " it would be wrong to assume that the requirement of prompt, adequate and effective compensation can be strictly maintained in the present day, were it to be taken as equivalent to immediate reparation of the losses according to the market value of nationalised assets and inclusive of loss of prospective profits due to nationalisation ".

5� Reference here is to the Libya-Occidental agreement, summarized in Middle East Economic Survey (1973), No. 43, at p. 3. 58 Information has been received in the last few weeks of a lump-sum settlement reached by Austria and Czechoslovakia concerning property of Austrian citizens expropriated in 1945; Keesing's (1975), p. 26996.

59 On State enrichment by means of nationalisation special attention is due to the notion of " effective enrichment '' taken as a term of reference in determining the quantum of compensation by FRANCIONI, " Petrolio libico " cit., at p. q.G7. In his opinion " Com- pensation in accordance with the principle of unjustified enrichment ... corresponds to the gain realised by the enriched subject provided that such gain still exists ". Thus " the loss of prospective profits on the part of the nationalised company should have no relevance, since it does not enrich the nationalising State ".

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