Mezinárodní ochrana investic a Česká republika

Mgr. Roman Kališ, Ph.D.

Master's thesis

International Investment Protection and The Czech Republic

Abstract:

After the "Velvet Revolution" in November 1989, Czechoslovakia began transforming its state planned economy into a market economy. Czechoslovakia and after the separation of its two consituent units, independent Czech republic realized it needed a huge amount of capital in order to boost its nascent market oriented economy. One way of obtaining the needed financial resources was to attract investments from abroad. Foreign investors would, however, not have been willing to invest in our territory unless they felt their capital was dully protected against potential losses brought about by state's expropriatory or other actions with similar effect that could harm their property. In order to create a favourable climate for the flow of foreign investments, the Czech republic began adjusting its legal system to correspond to requirements of potential international investors. Our country has not only worked on its internal laws but at the same time kept concluding bilateral international treaties on encouragement and reciprocal protection of investments with other states and also accessing to multilateral investment treaties. By admitting these international obligations, the Czech republic has to be aware of the big responsibility it bears which is hidden inside of these obligations. The state therefore needs to secure that they will not be breached by its unreasonable conduct. The purpose of this thesis is to provide an insight into the current international investment law from the perspective of the Czech republic with special emphasis on its treatment of foreign investors and their investments. The paper is divided into four main parts. The first one describes the history of international investing and the creation of the means of foreign investment protection. The purpose of this Chapter is to facilitate the understanding of this brand of international law in the present context, for as we can see today the history has the tendency to repeat itself. The development through which the former colonies had to go after the period of decolonization, was in many aspects similar to the development of former socialist states after the fall of communism in Central and Eastern Europe. The second part of this thesis deals in a comprehensive way with the definition of the essential term investment which obviously lies in the heart of international investment protection. Good understanding of this term is absolutely necessary to distinguish between protected investment and other financial transactions which are not to enjoy this kind of protection. For defining this term, we use both, the well grounded economic definition and definitions provided by legal instruments. Following Chapter 3 lists and describes the sources of international law important for the area of foreign investments. The final part then addresses the standards of treatment of foreign investments as contained in bilateral investment treaties binding for the Czech republic and also deals with their application in practice. The Chapter describes all treatment stardards which usually appear in bilateral investment treaties, namely: "national standard of treatment", "international minimum standard of treatment", "fair and equitable standard of treatment", "most-favoured-nation treatment" and standard of "full protection and security". The purpose of this Chapter is not only to mention the provisions of investment treaties concerning such standards but also to give specific content to the vague phrases they contain. To facilitate the understanding of this content, we use the interpretation provided by arbitral tribunals while deciding the disputes arisig from the breach of a particular standard. These standards form the center of today's international investment protection for it is their breach which gives rise to most investment disputes. Every state shall therefore always pay enough attention to its conduct and the conduct of its authorities to avoid these obligations being vio

Abstract:

lated because every breach of such obligations harms not only the interest of the foreign investor but at the same time harms the interest of the host-state itself for this state may be seen by foreign investors as less eligible for investing in the future.

Keywords

Investice, mezinárodní investice, mezinárodní investor, zacházení s mezinárodními investicemi

Language used: Czech

Date on which the thesis was submitted / produced: 12. 4. 2006

Thesis defence

• Date of defence: 7. 6. 2006
• Supervisor: prof. JUDr. Naděžda Rozehnalová, CSc.

Masaryk University

Faculty of Law

Master programme / field:
Law and Legal Science / Law