Common use of Expropriation and Compensation21 Clause in Contracts

Expropriation and Compensation21. 1. Neither Party may expropriate or nationalise a covered investment either directly or indirectly through measures equivalent to expropriation or nationalisation (expropriation), except: (a) for a public purpose22; (b) in a non-discriminatory manner; (c) on payment of prompt, adequate, and effective compensation; and (d) in accordance with due process of law. 2. The compensation referred to in subparagraph 1(c) shall: (a) be paid without delay23; (b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (the date of expropriation); (c) not reflect any change in value occurring because the intended expropriation had become public knowledge or known earlier; and (d) be fully realisable and freely transferable in freely usable currencies. 3. The compensation referred to in subparagraph 1(c) shall include interest at a commercially reasonable rate, accrued from the date of expropriation until the date of payment, unless such rate is prescribed by law24. The compensation, including any accrued interest, shall be payable either in the currency in which the investment was originally made or, if requested by the investor, in a freely usable currency. 21 For greater certainty, this Article should be read in conjunction with the Annex on Expropriation.