Common use of Expropriation or Nationalization Clause in Contracts

Expropriation or Nationalization. (1) Investments by the investors of either Contracting State shall not be subject to sequestration, confiscation, or any similar measure in violation of international law and shall enjoy full and complete protection and safety in the territory of the other Contracting State. (2) Neither Contracting State shall take any measure of expropriation or nationalization or freezing of assets, or any other measure having the same effect or subject the investment to any measures direct or indirect tantamount to expropriation including the levying of unreasonable taxes, the compulsory sale of all or part of an investment or the impairment or deprivation of its management or control unless the following conditions are complied with: (a) Measures are taken for a public interest related to real internal needs under due process of law and in accordance with the domestic constitution and general principles of international law; (b) Measures are not discriminatory; (c) Measures are accompanied by prompt, adequate and effective compensation. (3) The investor shall have the right of review of the legality of any such measures referred to in Paragraphs (1) and (2) of this Article and the amount of compensation by the competent court of the Contracting State which has taken such measures. (4) Compensation in cases referred to in Paragraphs (1) and (2) of this Article shall amount to the fair market value of the expropriated investment at the time immediately before the expropriation or decision thereof became publicly known. Where the market value cannot be readily ascertained the compensation shall be determined taking into account the capital invested, depreciation, replacement value, goodwill and other relevant factors. The compensation shall include interest at the prevailing commercial rate from the date of expropriation or loss until the date of payment.