International Law can be seen as a proper system wherein various treaties and obligations are made between different nation states, between citizens of one state with that of another, or any other financial agreements between corporate and business entities. Bilateral Treaty Agreements come under the ambit of International Law and they play a major role when Investments are to be made. International Minimum Standard just as the name suggests, provides a minimum set of principles, guidelines that are to be followed by all the concerned states even if those principles are not per se provided or followed in a country domestically.
In case of investment law, these set of principles are to be taken care of when investment has been made by an investor in a foreign nation. In simpler terms these standards are to be met when dealing with an alien personality. In order to safeguard aliens and their properties from any injury or undue harm, these set of principles play a guiding role.[1] Further, there are times when the domestic laws, rules and regulations of a country are underdeveloped, in that case these International Minimum Standards help in creating a minimum bar of expectation. By complying with these set of principles, foreigners would remain assured about the rights and privileges they possess in another country.
Another important point of discussion that emerged was, “what would constitute as an International Minimum Standard”? International Minimum Standards not only constitute property rights but also Human Rights. Every individual has the right to be treated equally and this ought to be protected by law. Hence whenever any investments are made, both human rights and property rights need to be protected of the foreigner in regard to the Investment Law. A country has the right to take the land and property of a foreign investor. However, it is these International Minimum Standards that lay down that in such a case, reasonable compensation is to be paid by the state to that particular investor. This proves how foreign investors are saved from host states having hostile or different behavior.
The landmark case of Neer v. Mexico, 1926[2] demonstrated the need for having International Minimum Standards. The decision of the case was taken by the Claims Commission which was made under the 1923 USA-United Mexican States Convention. An American citizen, Paul Neer who lived in Mexico was killed when he was shot by a group of Mexican men who were heavily armed. The case of a claim was filed by the United States of America for the dependents of the deceased against the United Mexican States for US $ 1,00,000. The claim was dismissed by the Claims Commission stating that there was no solid evidence shown and proved by the claimant’s. The commission stated that there must be proof of bad faith, neglect of duty, or insufficiency on part of the government hence making it short at maintaining the International Minimum Standards. Even though this case did not deal with investment, it definitely dealt with basic human rights. This case raised the concern and the need of having International Minimum standards to make sure that they are followed by all the nation states in entirety.
[1]Andreas Hans Roth, The Minimum Standard of International Law Applied to Aliens (A.W. Sijthoff 1949).
[2] USA (LF Neer) v. United Mexican States, (1927) 21 AJIL 555, 556.
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