Foreign investments

Mission of the Project

This is an online resource that provides access to the information on legal protection for foreign investments in Russia as well as private Russian investments abroad. The main task of this online project is to draw investors' attention to their certain rights which are secured by international instruments and jurisprudence providing with the effective protection of their investments abroad.

In accordance with the Westphalian State system each State enjoys its sovereignty that means a full supremacy on its own territory. Every State exercises its sovereign rights within the framework of its own jurisdiction and possesses the right to expropriate or take alien individual or corporate property subject to certain conditions. In such a case aliens were able to invoke a couple of means for recovery.

First, they were able to file a claim for recovery of damages into local courts subject to a contract. One may find this action is far from being successful since unlike the case when a State as a Party to a merchant contract might be found liable for nonfulfillment of its obligations, the fact that a foreign investor tries to pursue against sovereign State at its local court seems like impossible due to the fact that the State is not a party to that particular investment deal. In any case the State is always a hard counterpart in any municipal court.

Second, alien had a right to request his or her national government to give diplomatic protection in order to make the offending state respect the defendant's individual by applying an appropriate international law instrument. Diplomatic protection is an international procedure, according to which one nation may call another one to execute its international obligations, arising out of their mutual international rights and obligations. Any Sovereign State as a subject of International law are entitled but not obliged to challenge the other State on behalf of its national. Herewith, disputing States may come to an amicable political solution since the public interests are of the higher priority to States.