Regulatory Expropriation under NAFTA Chapter 11: Some Lessons from the European Court of Human Rights


Following the Metalclad decision, a lively academic debate has ensued about the wisdom of requiring compensation for regulatory activity that incidentally diminishes the value of property. This Note suggests that it would be prudent of the parties to the North American Free Trade Agreement (“NAFTA”) to look to the regulatory expropriation jurisprudence of the European Court of Human Rights (“ECHR”) for guidance. While the text of the two treaties may differ, this Note introduces a viable interpretation of NAFTA’s expropriation provision that would yield results similar to those reached by the more experienced ECHR. Moreover, the Note contends that the jurisprudence of the European Court is more sensible than that reached thus far by independent NAFTA tribunals, and, as such, an interpretation yielding more analogous results is to be preferred.