The Right to an Unchanging World. Indirect Expropriation in International Investment Agreements and State Sovereignty

This paper examines indirect expropriation in international investment agreements, and compares current foreign investments protection with property protection in the XIX century USA, when the US Supreme Court adhered to an abstract and de-physicalized conception of property, later contested by legal realists. Its central claim is that investor state arbitration poses a serious and underestimated challenge to state sovereignty, allowing arbitrators with a ‘proto-constitutional’ power of judicial review on regulatory powers, including the legislative one. Moreover, the indeterminacy of indirect expropriation leads to a potential transformation of property rights protection that could eventually give transnational enterprises a new ‘right to an unchanging world’, as the US Supreme Court did more than a century ago, albeit this time on a global scale.