Non-compensable regulation and regulatory expropriation: where is the line?

Abstract Having examined the police powers doctrine and clarified expropriation clauses, this study concludes that neither of the two instruments can draw the line between non-compensable regulation and regulatory expropriation in a predictable and consistent manner. The outcome of expropriation cases depends significantly on tribunals’ discretion and their ex post interpretation of State actions. In this paradigm, investors and States cannot assess their risks at the time of investment or regulation. Every decision to invest or to regulate becomes a gamble. There is a need for more objective and clear rules to distinguish expropriation and regulation in international investment law.