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3 - Controls by the host state

M. Sornarajah
Affiliation:
National University of Singapore
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Summary

The right of a state to control the entry of foreign investment is unlimited, as it is a right that flows from sovereignty. The entry of any foreign investment can be excluded by a state. But, a sovereign entity can surrender its rights even over a purely internal matter by treaty. Some regional and bilateral treaties now provide for the right of entry and establishment of investments to the nationals of contracting states. Where such preestablishment rights are created by treaty, the denial of a right of entry to any investor from one of the contracting states would amount to a violation of the treaty, unless it can be shown that his investment is not covered by the treaty. Where the treaty permits both the right of entry and national treatment after entry to nationals of the contracting states, the right of control over the investment on the basis that the investment was made by an alien is totally lost to each of the contracting states. Where such a treaty applies to the foreign investment, the treaty completely extinguishes the right of control the state has over the foreign investment, except where the treaty itself provides exceptions to the situation. It may still be the case that, in circumstances of necessity, the treaty rights of the foreign investor could be suspended. Yet, it has to be concluded that such treaties diminish the right of control which the state has over the foreign investor.

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Publisher: Cambridge University Press
Print publication year: 2004

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  • Controls by the host state
  • M. Sornarajah, National University of Singapore
  • Book: The International Law on Foreign Investment
  • Online publication: 24 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511617027.005
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  • Controls by the host state
  • M. Sornarajah, National University of Singapore
  • Book: The International Law on Foreign Investment
  • Online publication: 24 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511617027.005
Available formats
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Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Controls by the host state
  • M. Sornarajah, National University of Singapore
  • Book: The International Law on Foreign Investment
  • Online publication: 24 November 2009
  • Chapter DOI: https://doi.org/10.1017/CBO9780511617027.005
Available formats
×