PAIL Institute Publications

PAIL Institute Monograph Series

The Protection of Foreign Investment: Six Procedural Studies

Author(s): Lillich, Richard B.

Hardcover - 222 pages (1967, reprinted 1980)
ISBN: 0-89941-742-6; LC: 65-15855

Price: US $42.00

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About This Publication

In most instances today, Americans whose property abroad is confiscated sustain extensive losses due to the shortcomings of preventive and remedial measures under both international law and the United States' protection system.

This book is the first systematic appraisal of the more promising existing protective measures. It was written in the belief that Congress should formulate a more comprehensive program which will continue to advance broad national foreign policy goals but will further protect private foreign investment.

Part One, "Protection in Municipal Court," discusses sovereign immunity and act of state doctrine in light of the Rich case and the Sabbatino controversy. Part Two, "Protection by the Government," views the Hickenlooper Amendment to the Foreign Assistance Act and the International Guaranty Program. Part Three, "Protection for the Future," examines preadjudication, illustrated with the Gut Dam claims legislation and the Cuban Claims Act.

This thorough study finds these methods inadequate and inconsistent in many ways. In sovereign immunity and act of state cases, executive intervention endangers judicial independence; it may needlessly prevent claimants from obtaining just compensation for property loss. Linking foreign aid wth investment protection is inefficient; the IGP's mandate, too narrow. Preadjudication without a lump sum settlement lays a heavy burden on claimants who must present a claim with no compensation fund in sight.

Professor Lillich concludes that a successful future protection program will depend on cooperation and concessions by both government and business. His recommendations for taking positive actaion deserve attention in the courts and in Congress, by government officials and businessmen alike.

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About The Author(s)

A founder and President of The PAIL Institute from 1965 until his death, Richard B. Lillich (1933-1996) was a widely-acclaimed international law scholar, teacher, and practitioner. He authored scores of books and articles and frequently served as a consultant to the Office of the Legal Advisor of the US. Department of State. A world-renowned expert in several fields-including human rights, international economic law, and the law of state responsibility — he was unsurpassed in his knowledge of international claims.

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Reviews

Folsom, Stanford Law Review
"Professor Lillich's book is the fifth volume in the Procedural Aspects of International Law Series. It is a most valuable addition to the literature on the protection of foreign investment and should be required reading for every lawyer who represents foreign investors, as well as for students of the subject."

Indian Yearbook of International Affairs
"Prof. Lillich deserves all acclaim for this scholarly and insightful study of the pragmatic way in which the problem of protecting its citizens investing abroad is being tackled in the United States."

Leigh, Syracuse Law Review
"This ably written collection of monographs, representing a distillation of Professor Lillich's scholarly researches in the last six years, is a valuable addition to the legal literature in the field of international claims and litigation. . . . Professor Lillich has not only written a solid and scholarly work but he has also made a unique contribution to the Foreign Relations Law of the United States by emphasizing and dramatizing the importance of the due process issues which are inherent in this evolving field of law. For the latter contribution no praise is too great."

Bloomfield, Canadian Yearbook of International Law
"While the ever-increasing literature on the protection of foreign investment generally discloses few new viewpoints, these six procedural studies by the editor of The Procedural Aspects of International Law Series constitute the first systematic appraisal of the more promising protective measures presently available to Americans whose property abroad is confiscated. . . .

The author. . . is to be congratulated for his courage in presenting a forthright and well documented criticism of current American judicial trends in this field."

Campion, New Jersey State Bar Journal
"This excellent study of the legal and quasi-legal problems presented to those interested in protecting foreign investments from nationalization is the fifth volume in a series dealing with the procedural aspects of international law."

Dawson, Law Library Journal
"This is a thoughtful, well-written book, with copious footnotes. Like other volumes in this Series, it should be useful to students and practitioners alike, and is therefore recommended for purchase by both law schools and law offices.

Kahn, Revue Générale de Droit International Public
"In this book Richard Lillich makes a most interesting contribution to the study of the juridical problems posed by foreign investments. More precisely, instead of outlining principles which international law has adopted or suggesting one more proposal of a multilateral convention designed to guarantee foreign investments, he studies the system of protection (as well as the loopholes) offered by American positive law and tries to make some reasonable suggestions in the course of a study which is above all the study of a 'procedural mind.'"

International Executive
"Quite aside from its provocative analytical conclusions, the book provides a concise and (as legal writing goes) quite readable summary of the key phases of property protection. Dr. Lillich is... an expert in this particular field."

Zeitschrift für Ausländisches Öffentliches Recht und Völkerrecht
"This publication, thoughtful as well as substantial, deserves attention."

Revue Belge de Droit International
"Professor Lillich's study is an excellent contribution to the advancement of this important problem."

Niles, Texas International Law Journal
"[A] detailed, well-documented study of some of the more promising procedural approaches to the problems of international claims. . . this book is an effective introduction to the subject for the neophyte as well as a solid foundation for deeper research by the interested scholar or practitioner."

Drucker, International and Comparative Law Quarterly
"The whole series represents a most valuable contribution to the law of international claims and . . . Professor Lillich deserve[s] the gratitude of all students of this problem."

Yearbook of World Affairs
"Professor Lillich succinctly examines the scope and limits of assistance which the United States Administration and courts are prepared to give to investors abroad. Perhaps the most rewarding chapter of this concise monograph is the one on the wider potentialities of the United States practice, established in 1955, of unilateral but quasi-judicial pre-adjudication of international claims of United States nationals."

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Availability

The Protection of Foreign Investment: Six Procedural Studies is available from:

William S. Hein & Co., Inc.
1285 Main Street
Buffalo, NY 14209

(716) 882-2600
(800) 828-7571 (toll free)
(716) 883-8100 (fax)
e-mail: mail@wshein.com
website: http://www.wshein.com/
Hein Item #: 306600

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Table of Contents

	Preface		vii
Part One: Protection in Municipal Courts
I.	Sovereign Immunity		3
	The Origin and Development of the Doctrine		3
	The Rise and Predominance of the Restrictive Theory		9
	The Role of the Department of State in Sovereign Immunity Cases Under the Restrictive Theory		15
	The Basis and Weight of Department of State Suggestions of Immunity		20
	The Due Process Problems Raised by Department of State Suggestions of Immunity		32
	A Suggested Approach		40
II.	Act of State		45
	Background: Underhill to Sabbatino		45
	District Court Opinion		49
	Second Circuit Opinion		56
	Supreme Court Opinion		69
	The Sabbatino Amendment		97
	Future Developments		111
Part Two: Protection by the Government
III.	The Hickenlooper Amendment		117
	Background and Legislative History		117
	Statutory Analysis		123
	An Evaluation of the Amendment		134
IV.	The Investment Guaranty Program		147
	Background and Legislative History		147
	Specific Risk Guaranties		152
	An Evaluation of the Program		160
Part Three: Protection for the Future
V.	Preadjudication of International Claims		167
	Lump Sum Settlement Agreements		167
	The Practice of Preadjudication		172
	The Objectives of Preadjudication		176
	The Problems of Preadjudication		181
	An Evaluation of Preadjudication		187
VI.	A New Look at Old Problems		189
Appendixes
A.	The Proposed Ervin Amendment		206
B.	The Sabbatino Amendment		208
C.	Executive Branch Comments to Conference Committee (September, 1964)		209
D.	The Hickenlooper Amendment		211
E.	Countries Where Investment Guaranties Are Available — January 1, 1965		213
Selected Bibliography			215
Index			219