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Source: Google |
As part of the efforts to provide an enabling environment that is conducive to the growth and development of industries, inflow of foreign direct investment (fdi), shield existing investments from unfair competition, and stimulate the expansion of domestic production capacity; the federal government of Nigeria has developed a package of incentives for various sectors of the economy. These incentives, it is hoped, will help revive the economy, accelerate growth and development and reduce poverty.
Expropriation or “wealth deprivation” could take different forms: it could be direct where an investment is nationalized or otherwise directly expropriated through formal transfer of title or outright physical seizure. Expropriation or deprivation of property could also occur through interference by a state in the use of that property or with the enjoyment of the benefits even where the property is not seized and the legal title to the property is not affected.
(1) Subject to subsections (2)
and (3) of this section-
(a) No enterprise shall be nationalized or expropriated by any Government of the Federation; and
(b) No person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person.
(a) No enterprise shall be nationalized or expropriated by any Government of the Federation; and
(b) No person who owns, whether wholly or in part, the capital of any enterprise shall be compelled by law to surrender his interest in the capital to any other person.
(2) There shall be no acquisition
of an enterprise to which this Act applies by the Federal Government, unless
the acquisition is in the national interest or for a public purpose and under a
law which makes provision for-
(a) Payment of fair and adequate
compensation; and
(b) A right of access to the courts for the determination of the investor's interest or right and the amount of compensation to which he is entitled.
(3) Any compensation payable under this section shall be paid without undue delay,and authorisation for its repatriation in convertible currency shall where applicable, be issued.
(b) A right of access to the courts for the determination of the investor's interest or right and the amount of compensation to which he is entitled.
(3) Any compensation payable under this section shall be paid without undue delay,and authorisation for its repatriation in convertible currency shall where applicable, be issued.
Criteria for determining indirect expropriation
i)
The degree of interference with the property
right,There is broad support for the proposition that the interference has to be substantial in order to constitute expropriation, i.e. when it deprives the foreign investor of fundamental rights of ownership, or when it interferes with the investment for a significant period of time. Several international tribunals have found that a regulation may constitute expropriation when it substantially impairs the investor’s economic rights, i.e. ownership, use, enjoyment or management of the business, by rendering them useless.
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Source: Google |
However, international law also sets circumstances for the legitimacy of expropriation of foreign investors‘assets. Essentially, it would appear that under international law, foreign investors should only be deprived of their property rights for a public purpose, in a non-discriminatory way, on the condition that there is payment of compensation and upon the basis of due process.
Adedunmade Onibokun Esq
@adedunmade