State liability for regulatory changes: international investment and Armenian law perspectives

Abstract

This paper will discuss arbitral tribunals decisions to understand the necessity of the limitation of traditional principles of sovereignty of host States in the light of attracting foreign investments to contribute to the development of State’s economy and international trade. Moreover, the issue of States liability for the regulatory changes affecting foreign investors’ property rights will be the core in the arbitral awards discussions. Namely, this paper will be developed in a way to understand how the rival interests of the state (e.g., freedom of action, adoption of regulatory measures) and the foreign investors (expectations of economic returns, enjoyment of property rights) are balanced and in which cases, most importantly host States can be held responsible for the violations of legitimate expectations under the fair and equitable treatment guarantee.