Strengthening Democracy in West Africa Through Proper Investment Valuation Methods:  Expropriation in Focus

 

By Otitodiri Ogadinma Onyema , Ph.D., Lecturer, Faculty of Law, Imo State University. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it., phone +2348037744620

 

Abstract

The topic of this work is ‘Strengthening Democracy in West Africa through Proper Investment Valuation Methods: Expropriation in Focus’. In order to be lawful under customary international law, the exercise of the sovereign right of expropriation requires that the following conditions be met, namely: property has to be taken for a public purpose, on a non-discriminatory basis, in accordance with due process of law and accompanied by compensation. . Due process of law guarantees that the fundamental rights of the individuals are protected. It represents the foundation for democracy and the respect for the higher law of the land. The widening control by states over the national economy and over almost every aspect of private enterprise, and the measures of nationalization of different industries adopted by so many states, make it difficult to treat, as contrary to international law, an expropriation of foreign property for a public purpose with a declared domestic policy, applied without discrimination to the citizens of the expropriating state and to aliens alike. The work examined various valuation methods of investment in the event of expropriation of properties. The work discovered that in a given hypothetical modelled transaction, valuation methods of investment will in most cases display some measure of uncertainty and lack of due process which poses difficult challenges to arbitral tribunals and courts. The research approaches/methodologies were analytical, expository and indeed doctrinal. It therefore, recommended that the valuation formulations shall only provide a useful indication but ultimately; the primary aim of any formulation will be geared towards ensuring that the fundamental rights of investors are protected. It was concluded that the adoption of proper valuation method in cases of expropriation will strengthen democracy in West African countries.

 

 

Introduction

 

The major preconditions for International Law are the existence of states and the readiness of such political units to interact among themselves for their own benefit.[1] The basic principles of international economic law have continued to pursue policies that will enhance development across the globe.[2]  Valuation methods in cases of expropriation are one of those basic principles.  It is therefore necessary that in considering the applicable valuation method within the West African region, the need to strengthen its democracy in the form of due process requirement is paramount.

 

In the 19th century, any expropriation by state of the property of an alien gave rise to international responsibility of the state.[3] Expropriation occurs where state conduct results in a substantial deprivation of a person’s right in, or enjoyment of, property.[4] It is generally recognised that customary international law recognizes the right of persons to hold, and enjoy the use of property and to receive prompt, adequate, and effective compensation for its expropriation by a foreign state.[5]

 

The widening control by states over the national economy and over almost every aspect of private enterprise, and the measures of nationalization of different industries adopted by so many states, make it difficult to treat, as contrary to international law, an expropriation of foreign property for a public purpose with a declared domestic policy, applied without discrimination to the citizens of the expropriating state and to aliens alike.[6]

 

Valuation of an investment is required in cases of both lawful and unlawful expropriation. There are many valuation methods of an investment. For instance, the fair market value of an asset represents the price that a seller would be willing to accept and a buyer would be willing to pay for it in an arm’s length transaction.[7]  In that case, the task of valuation of an investment is relatively straightforward if there exists an active market for the type of asset concerned[8] and, accordingly, many comparable transactions.

 

When the investment is a going concern for which a stream of profits is expected, such as a long-term concession, the exercise becomes more complex and another valuation method may be an option. Some International Investment Agreements[9] have sought to limit the discretion of arbitrators by providing that future profits are not recoverable. As procedural due process is concerned with the fairness of the judicial procedure, the aim of this work is to evaluate these valuation methods and ensure that the investor’s interest is protected through due process of law. 

 

 

Techniques of Valuation

 

There are many different techniques in order to estimate the value of an investment and no single valuation method would suit all circumstances. Valuation methods can be grouped in two main categories:

 

1.      backward-looking techniques that rely on the historic cost of an investment or

2.     forward-looking techniques that estimate the market value of an investment based upon its ability to generate profits.

It has been stated that there are generally four levels of valuation for business assets: market value, book value, liquidation value, and salvage value.[10] Also among the methods is discounted cash flow (DCF). Each level of value provides a way for accountants and analysts to classify the aggregate value of assets.

Liquidation value: This is the total worth of a company's physical assets if it were to go out of business and the assets sold. It is called the replacement value. The liquidation value is the value of company real estate, fixtures, equipment, and inventory. Intangible assets are excluded from a company's liquidation value. Liquidation value is especially important in the case of bankruptcies and workouts.[11]

The book Value: This is the value of the asset as listed on the balance sheet. The balance sheet lists assets at the historical cost, so the value of assets may be higher or lower than market prices. In an economic environment with rising prices, the book value of assets is lower than the market value.[12]

 

Market Value: Market value is the price an asset would fetch in the market place.[13] Market value is also commonly used to refer to the market capitalization of a publicly traded company and is obtained by multiplying the number of its outstanding shares by the current share price.

Market value or open market value (OMV) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value; although these terms have distinct definitions in different standards and may or may not differ in some circumstances.[14]

 

Market value typically provides the highest valuation of assets although the measure could be lower than book value if the value of the assets has decreased due to market demand rather than business use.[15]

 

Salvage value: This is the estimated resale value of an asset at the end of its useful life.[16] It is also called residual value. It is subtracted from the cost of a fixed asset to determine the amount of the asset cost that will be depreciated. Thus, salvage value is used as a component of the depreciation calculation. The salvage value is used to determine annual depreciation in the accounting records, and also used to calculate depreciation expense on the tax return.[17]

 

Discounted cash flow (DCF): This is a valuation method used to estimate the value of an investment based on its future cash flows.[18] It is also called terminal value. DCF analysis finds the present value of expected future cash flows using a discount rate. A present value estimate is then used to evaluate a potential investment. All future cash flows are estimated and discounted by using cost of capital to give their present values.[19] The use of the discounted cash flow method has been a particularly contentious issue.[20]

 

 

General Principles on Remedies

 

As set out in the International Law Commission[21] Articles as a codification of the rules of customary international law on the responsibility of States for their internationally wrongful acts, every internationally wrongful act of a State entails the international responsibility of that State.[22] The relevant principles governing the amount of compensation to be awarded for violations of international law are based largely on the ILC[23] Articles which codify the rules of customary international law on the responsibility of States for their internationally wrongful acts.

 

By Article 1 of the ILC Articles, every “internationally wrongful act” of a State entails the “international responsibility” of that State. An “internationally wrongful act” is defined in Article 2 as an act or omission which is:

 

(i)             attributable to the State under international law; and

(ii)            a breach of an international obligation of the State.

Under Article 28, the international responsibility of a State which arises by virtue of an internationally wrongful act gives rise to the legal consequences set out in part 2 of the ILC Articles. Under Article 31, this includes Reparation; which is an obligation to make “full reparation for the injury caused by the internationally wrongful act”. Injury is defined as including any damage, whether material or moral, caused by the internationally wrongful act. Article 34 sets out the three forms of reparation which may be claimed individually or in combination: (i) restitution; (ii) compensation; (iii) satisfaction.

 

Under Article 36, the State responsible for the internationally wrongful act is under an obligation to make restitution, that is “to re-establish the situation which existed before the wrongful act was committed” to the extent that this is possible or proportionate. When restitution cannot be made, the State is under an obligation to compensate for the damage caused. Such compensation is to cover “any financially assessable damage including loss of profits in so far as it is established”.

 

As far as expropriation is concerned, there are two standards of compensation, depending on whether the investment is expropriated lawfully or unlawfully. Where expropriation is characterised as lawful, the standard of compensation is determined by reference to the relevant terms of the investment treaty itself, provided they exist. For example, Article 5(1) of the United Kingdom, Northern Ireland and Tanzanian BIT,1994[24] provides that in the event of an expropriation, the State shall be obliged to pay compensation amounting to:

 

 ... the genuine value of the investment expropriated immediately before the expropriation or before the impending expropriation became public knowledge, whichever is the earlier, [and] shall include interest at a normal commercial rate until the date of payment, shall be made without delay, be effectively realizable and be freely transferable.

 

On the other hand, where the expropriation is unlawful, it amounts to a breach of the State’s obligations under the relevant BIT as well as customary international law and is subject to the rules of customary international law relating to State responsibility. With one exception, the measure of compensation applicable to unlawful expropriations, at least in theory, may be different than that for a lawful expropriation. It reflects the position under the ILC Articles, and includes full reparation for, and consequential losses suffered as a result of, the unlawful expropriation.[25]

 

The exception relates to any expropriation that would have been lawful but for the fact that the expropriating State has not yet provided “prompt, adequate and effective compensation”. An unlawful expropriation of that character will be compensated for by applying the same standard of compensation as applied to a lawful expropriation.[26] It has been argued that full reparation entitles the unlawfully expropriated investor to restitutio in integrum or to actual restoration of the expropriated investment. If restitutio in integrum is not available, the expropriating State must pay restitutionary damages in lieu of actual restitution. Restitutionary damages include, but are not limited to, fair market value of the unlawfully expropriated investment as determined by the application of an appropriate valuation methodology.

 

For claims other than expropriation such as breach of fair and equitable treatment, unreasonable and discriminatory measures, violation of full protection and security, and of the principle of unrestricted transfer of funds; some BITs do not offer any guidance for evaluating the damages arising from such breaches. On the basis that this does not mean that compensation is excluded, the common starting point is the broad principle articulated in the well-known Factory at Chorzow case,[27] according to which any award should:

as far as possible wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed.

 

The application of this broad principle has been the subject of detailed analysis in many commentaries and decisions, albeit that in many BIT cases, arbitral tribunals appear to have simply deployed the fair market value of the investment in question as the measure of damages both for claims of expropriation and breaches of other treaty standards. However the Factory at Chorzow test is analysed, it is well settled that one key requirement of any claim for compensation whether for unlawful expropriation or any other breach of treaty is the element of causation. Compensation for any violation of BIT, whether in the context of unlawful expropriation or the breach of any other treaty standard, will only be due if there is a sufficient causal link between the actual breach of the BIT and the loss sustained by the investor.

 

An expropriation may take place by reason of a substantial interference with rights, even if no economic loss is caused thereby, or can be quantified. In such cases, non-pecuniary remedies such as injunctive, declaratory or restitutionary relief may still be appropriate. Whether any economic loss has in fact been caused by the “taking” in question is a matter to be considered in the context of a claim for compensation, rather than being a necessary ingredient in the cause of action of unlawful expropriation itself. There is little guidance as a matter of international law on the precise test of causation to be applied (there being a number of different possible formulations). Accordingly, many international tribunals have had recourse to private law analyses in their application of this requirement, and a number of commentators have recommended this approach.[28] The key issue is the factual link between the wrongful acts and the damage in question, as opposed to any issue as to remoteness or indirect loss.

 

In order to succeed in its claims for compensation, the investor has to prove that the value of its investment was diminished or eliminated, and that the actions the investor complains of were the actual and proximate cause of such diminution in, or elimination of value. Whether or not each wrongful act by the Respondent against the investor “caused injury” such as to ground a claim for compensation must be analysed in terms of each specific “injury” for which the investor has in fact claimed damages.

 

 

Payment of Compensation

 

One of the conditions for an expropriation to be lawful is that it must be accompanied by compensation. Different methods of valuation may be employed to determine the amount of compensation[29] and may lead to varying results.

 

In recent IIAs, there is an increasing level of convergence regarding the standard of compensation that must be paid to render the expropriation lawful. One of the salient trends among IIAs is that most of them incorporate the standard of prompt, adequate and effective compensation, also known as the Hull standard. In this situation, compensation is considered to be prompt if paid without delay; adequate, if it has a reasonable relationship with the market value of the investment concerned; and effective, if paid in convertible or freely useable currency. In spelling out what constitutes an adequate compensation, treaties most often refer to an investment’s fair market value.[30] Other terms have also been used.[31]

While some of the formulas may achieve the same effect, others give more or less flexibility to arbitral tribunals in the evaluation of the compensation.[32]In several cases, some of these formulations have been deemed to be equivalent to the fair market value concept.[33] The World Bank Guidelines on the Treatment of Foreign Direct Investment define fair market value as:

 

An amount that a willing buyer would normally pay to a willing seller after taking into account the nature of the investment, the circumstances in which it would operate in the future and its specific characteristics, including the period in which it has been in existence, the proportion of tangible assets in the total investment and other relevant factors pertinent to the specific circumstances of each case.[34]

 

The idea of full compensation equal to the market value of the property is not the only possible standard of compensation. The standard widely discussed in the 1960s and 1970s is that of ‘appropriate’ compensation, which is embodied in United Nations General Assembly resolutions[35] and may still represent the standard of customary international law. Under some interpretations, this standard justifies less than full compensation where this is fair in the circumstances of the case.[36] Some IIAs use standards that refer to fairness and equity, which arguably gives more room for balancing private and public interest.[37] This can be seen in the use of the following terms: ‘just’ compensation, ‘fair and equitable’ compensation[38] or ‘just and equitable’ compensation[39]. The Charter of Fundamental Rights of the European Union (2000) requires payment of ‘fair’ compensation; in the practice of the European Court of Human Rights, compensation for a lawful expropriation of property must be ‘reasonably related to its value’, even though ‘legitimate objectives of ‘public interest’ may call for less than reimbursement of the full market value’.[40]

 

An important issue is whether the non-payment of compensation renders unlawful a measure that meets the other three conditions, or whether this only provides the basis for a claim to compensation. Some commentators observe that numerous awards of the Iran-United States Claims Tribunal recognize the payment of prompt compensation to be a consideration relevant to the lawfulness of a taking under customary international law.[41]Some arbitral awards rendered in IIA cases suggest that non-payment of compensation renders the expropriation unlawful.[42]

 

This approach is questionable. The payment of compensation is a remedy available in case of a dispute and can be awarded by an arbitral tribunal. Particularly in determining the existence of an indirect expropriation and assessing a regulatory measure, the tribunal needs to first characterize the measure before looking into the existence of a duty to pay compensation. When the expropriatory nature of the measure is being opposed, it cannot be expected that the host State makes a pre-emptive payment. In this regard, a distinction has been drawn between expropriations which are unlawful sub modo, that is, that would be lawful if compensation was paid, and expropriations which are unlawful per se, that is, that breach other conditions of lawfulness such as public purpose or non-discrimination.[43] Some have argued that non-payment of compensation does not    make an otherwise lawful nationalization unlawful.[44] In Santa Elena v Costa Rica[45]and Southern Pacific Properties (Middle East) Limited v Arab Republic of Egypt (SPP v Egypt),[46] where legitimate takings only lacking compensation were at stake, the tribunals never referred to the expropriations as unlawful.

 

The European Court of Human Rights distinguishes between inherent illegality of a taking, for example a taking that is not in the public interest, and illegality due to the non-payment of compensation. Only inherently illegal expropriations trigger automatic application of a higher compensation standard. Thus, in the practice of the European Court, even though the non-payment of compensation is wrongful, it does not trigger the same consequences that follow from an inherently illegal taking.[47]

 

Indeed, an act of expropriation meeting the requirements set forth in international law constitutes a lawful act of the State, and the duty to pay compensation is the consequence of the legal exercise of a recognized sovereign right of a State. This requirement may be met from the outset or after litigation, when the expropriatory nature of the act is established. While failure by a State to pay any compensation for a direct expropriation can be seen as rendering such an expropriation unlawful, this should not be the case when a measure at stake allegedly constitutes an indirect expropriation. Even if the measure is found by a tribunal to be expropriatory, the obligation to pay compensation should arise only as a consequence of such finding.[48]

Most IIAs provide that payment must be ‘prompt’, ‘without delay’ or ‘without undue delay’. The prompt payment of compensation is in line with section 44 (1)(a) of CFRN[49] that requires prompt payment of compensation in the event of expropriation.[50] Also, the BIT between Japan and Lao People’s Democratic Republic BIT (2008) provides that compensation shall be paid without delay.[51] 

The current international law position is as encapsulated in Article 2 of the Charter of the Economic Rights and Duties of States 1974, wherein provisions were made for “appropriate compensation” to be paid taking into account relevant national laws of the expropriating states and all the circumstances considered by it to be relevant.[52]

Section 25 (3) of the Nigeria Investment and Promotion Commission Act[53] (NIPC) provides as follows:

 

 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.[54]

 

Unlike the Nigerian constitutional provision that used the word ‘prompt’, the approach used in the NIPC (undue delay) grants some flexibility to the host State. It generally affords an opportunity for the time frame to be assessed in light of the specific experience of each State and further ensures that all the necessary factors have been taking into consideration for the payment of compensation. In many countries, a normal time to make such transfer would be between three and six months. However, there may be exceptional cases where a State faces circumstances such as foreign exchange restrictions or constraints. In this case, for example, the 1992 World Bank Guidelines on the Treatment of Foreign Direct Investment recommend that compensation be paid in instalments within a period that –

 

will be as short as possible and which will not in any case exceed five years from the time of the taking, provided that reasonable, market-related interest applies to the deferred payments in the same currency.[55]

 

Some treaties lay down a specific period of time within which the payment of compensation must be made. For instance, Article 4(2) of the Croatia-Czech Republic BIT (2008) provides that:

 

A transfer shall be deemed to be made ‘without undue delay’ if effected within such period as is normally required for the completion or transfer formalities. The said period shall commence on the day on which the relevant request has been submitted and may not exceed three months.

 

Some treaties refer to the methods of valuation to be used or considered in order to assess the value of an expropriated investment. For instance, Article 1110(2) of NAFTA (1992) provides that-

 

Valuation criteria shall include going concern value, asset value including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value.[56]

 

Some IIAs require that the value of an investment be determined “in accordance with generally recognized principles of valuation.[57] Article 6 (2) of the Oman-Switzerland BIT (2004) also refers to recognized principles of valuation, but supplements this with an illustrative list of methods and factors (different from those in NAFTA) that can be taken into account:

 

the compensation shall be equivalent to the fair market value of the investment, as determined in accordance with recognized principles of valuation such as, inter alia, the capital invested, replacement value, appreciation, current returns, goodwill and other relevant factors...

 

Some treaties additionally mention equitable principles. Such a reference would seem to give arbitrators a mandate to grant compensation that they deem fair in the circumstances and makes the connection between the amount of compensation and the market value of the investment less rigid.[58]

 

 

Quantification of Valuation Methodology

 

The Arbitral Tribunal recognises that many tribunals in other cases have tested governmental conduct in the context of indirect expropriation claims by reference to the effect of relevant acts, rather than the intention behind them. In general terms, a substantial deprivation of rights, for at least a meaningful period of time, is required. The required level of interference with rights has been variously described as “unreasonable”; “an interference that renders rights so useless that they must be deemed to have been expropriated”; “an interference that deprives the investor of fundamental rights of ownership”; “an interference that makes rights practically useless”; “an interference sufficiently restrictive to warrant a conclusion that the property has been ‘taken’”; “an interference that makes any form of exploitation of the property disappear”; “an interference such that the property can no longer be put to reasonable use.[59]

 

Arbitral tribunals most often adopt the fair market value. The fair market value is that which would be paid by a hypothetical willing buyer who has reasonable “knowledge of the relevant facts”.[60] The question as to what valuation methodology is appropriate for calculating “fair market value” depends on the nature of the investment and the timing of the expropriation.[61] The fair market value can only be calculated on the basis of the actual investment in the project (a so-called Cost, or Net Investment method). This method derives a valuation by reference to the costs associated with that investment such as the purchase price (including all associated costs) and opportunity cost of the investment. It draws primarily on historical data which is generally considered to be reliable and substantially more certain than forecasted data.

 

The DCF method on the other hand is commonly used to value investments provided there is sufficient and reliable information for projecting future cash flows. The Discounted Cash Flow (“DCF”) method, involves the analysis of future profits and the discounting of these to calculate a net present value. This method is appropriate where the future profits of the investment can be determined with a degree of certainty, or in other words, when the expropriated entity has had a history of profitable operations.[62]

For the purposes of business accounting or financial management, the terms residual value (salvage value) and terminal value (discounted cash flow) refer to the same concept. The only major difference between the two is context; residual value tends to be used in some circumstances and terminal value in other circumstances. An easy way to think of terminal or residual value is the anticipated value of an asset on some future date, such as a maturity date.[63] Residual value is usually used for smaller or more specific assets, such as a car lease or a particular piece of business equipment.

 

Another way to look at the difference is that terminal value normally refers to the value of an asset or entity at the end of an investment period; while residual value, normally refers to an asset at the end of its useful life[64]

 

In most cases, it has been argued that the DCF analysis will generate a higher value than the historic-cost or asset-based methods. The book value and liquidation value are commonly referred to as historic-cost or assets-based methods. However, this is not always so. In Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania,[65] the historic costs of the investment at issue were in the region of $20 million, while the DCF analysis showed that the investment was worth zero as it had no prospect of profitable operations. The tribunal followed the DCF methodology and did not award any compensation.[66]

 

The difficulty of opting for the DCF method stems from the fact that international rules on responsibility of States prohibit compensation for speculative or uncertain damage. Given that the DCF method always implies projections of cash flows into the future, some consider this method speculative and thus inappropriate in the arbitration context. In general, tribunals have exercised caution with awarding lost future profits and, accordingly, with the DCF method of valuation.

 

In SPP v. Egypt,[67] the tribunal considered that DCF method was inappropriate because the project was in its infancy and there was very little history on which to base projected revenues. The tribunal noted that only 386 lots (about 6 per cent of the total) had been sold when the project had been cancelled. In Metalclad v Mexico,[68] the tribunal rejected the DCF valuation as the business at issue (waste landfill) was never operative, holding that

 

where the enterprise has not operated for a sufficiently long time to establish a performance record or where it has failed to make a profit, future profits cannot be used to determine going concern or fair market value.

 

In Tecmed v Mexico,[69] the tribunal rejected the DCF method as the landfill had operated as an ongoing business for a short period (two and a half years) and there was no sufficient historical data to prepare reliable estimates. In Siemens v. Argentina,[70] the tribunal rejected the claim for lost profits having considered that they were unlikely to ever have materialized. In Vivendi v Argentina II,[71] the tribunal held that the claimant had failed to establish with a sufficient degree of certainty that the expropriated concession would have been profitable. However, tribunals have applied the DCF method in other cases.[72]

 

Position in some West African Countries

 

In Ghana, the greatest challenge confronting the Government of Ghana in the use of its powers of compulsory acquisition to expropriate private interest in real estate is the ability to pay fair and adequate compensation promptly.[73] Meanwhile, the operative Constitution in the country reinforces commensurate compensation payment based on the principle of equivalent reinstatement.[74] Compulsory acquisition of landed asset by Government or its Ministries, Departments and Agencies (MDAs) in the public interest is, as expected, subject to the payment of fair, adequate and prompt compensation. This principle is now well-known among the people of Ghana. In general, apart from land, buildings and other structures of all types as well as crops – food and cash – may be adversely affected by compulsory acquisition to warrant compensation payment.

 

Recently, monetary payment for the loss of livelihood has been equated to compensation to occupants of real estate assets, who may not necessarily own an interest therein. In practice, compensation estimation includes elements of disturbance; its quantum is indeed related to the use, type and location of the real estate expropriated.[75] For commercial assets such as shops and fuel stations, compensation assessment may require additional provision for specific element of disturbance to include goodwill. Post-independence acquisitions have primarily relied on the State Lands Act, 1962 (Act 125) and the State Lands (Amendment) 2005, Act 586. Provisions of these two statutes are rather restricted to the acquisition of “private” interest in real estate. In contrast, “acquisition” of stool[76] lands has been accomplished using the Administration of Lands Act, 1962 (Act 123).Under Act 125 and Act 586, a lump sum compensation is payable to claimants. Section 10 of Act 123 on the other hand prescribes the Compulsory payment of annual compensation rental for stool land acquisition taking accounts of the degree of social benefit inherent in the acquisition. Compulsory acquisition procedures are deemed to be opened and publicized to attract claims from Project Affected Persons (PAPs). Under Act 125, the acquisition instrument commonly known as the Executive Instrument is published and publicized in a prescribed manner.[77] However, Article 20 of the 1992 Constitution of the Republic of Ghana underpins the authority of the State to compulsorily acquire landed property in the public interest subject to prompt payment of fair and adequate compensation. And any aggrieved person shall have access to the High Court for redress on determining matters of ownership right and quantum of compensation. The Constitution sets out some exceptions and a clear procedure for the payment of compensation in allowable cases of expropriation or nationalization. The Government of Ghana may compulsorily take possession or acquire property only where the acquisition is in the interest of national defense, public safety, public order, public morality, public health, town and country planning, or the development or utilization of property in a manner to promote public benefit.[78]

 

However, the same constitution denies access to non-citizens of Ghana from owing land.  Article 266 provides as follows:

(1) No interest in, or right over, any land in Ghana shall be created which vests in a person who is not a citizen of Ghana a freehold interest in any land in Ghana.

(2) An agreement, deed or conveyance of whatever nature, which seeks, contrary to clause (1) of this article, to confer on a person who is not a citizen of Ghana any freehold interest in, or rights over, any land is void.

(3) Where, on the twenty-second day of August 1969, any person not being a citizen of Ghana had a freehold interest in or right over any land in Ghana, that interest or right shall be deemed to be a leasehold interest for a period of fifty years at a peppercorn rent commencing from the twenty-second day of August 1969, and the freehold reversionary interest in any such land shall vest in the President on behalf of, and in trust for, the people of Ghana.

(4) No interest in, or right over, any land in Ghana shall be created which vests in a person who is not a citizen of Ghana a leasehold for a term of more than fifty years at any one time.

(5) Where on the twenty-second day of August 1969 any person not being a citizen of Ghana had a leasehold interest in, or right over, any land in Ghana for an unexpired period of more than fifty years, that interest in, or right over, any such land shall be deemed to be an interest or right subsisting for a period of fifty years commencing from the twenty-second day of August 1969.

In Nigeria, there are shortcomings on the legal regimes on expropriation and appropriate valuation methods. In protecting the right of investors in Nigeria, section 44 of the 1999 Constitution of the Federal Republic of Nigeria[79] provides for compulsory acquisition of property which ordinarily translates to expropriation. It provides as follows:

 

(1) No moveable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law that, among other things-

(a) requires the prompt payment of compensation thereof; and

(b) gives to any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria…[80]

 

The Supreme Court emphasized that the implication of the above provision is that no property of a citizen shall be taken from him except in compliance with the due process of law. With reference to litigation in court over a property or property rights, no citizen can be subjected to the sale or expropriation of his properties except in compliance with a judgment of court.[81]

 

In a similar manner, Section 25 of Nigerian Investment Promotion Commission Act[82] provides for guarantees against expropriation of properties as follows:

 

…(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.

 

It is observed that both the 1999 CFRN and the NIPC Act, made provisions guaranteeing against expropriation of properties. While the constitution under section 44 only specifically mentioned one standard of compliance for expropriation, that is, payment of compensation; section 25 of the NIPC mentioned only two, namely: national interest or public purpose and payment of compensation. Due process and non-discrimination requirements were not mentioned in both laws as is the case with international customary law. Again, in both laws, the right of expropriation must be exercised in accordance with relevant laws that must give the investor 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. It is submitted that the words “…determination of his interest in the property” as used in section 44(1)(b) of the 1999 Constitution  and “…the investor's interest” as used in Section 25 (2)(b) of the NIPC Act should be interpreted to include interest as it relates to the adequacy or otherwise of compensation paid to the investor. Unfortunately, another important law in Nigeria,  the Land Use Act1978 on the other hand, denied this to investors.  In its provision, the Land Use Act, 1978[83] provided for revocation of landed properties in Nigeria by the respective state Governors. This revocation can be in the nature of expropriation depending on the motive behind the revocation. Hence, section 28 of the Act provides as follows:

 

(1) It shall be lawful for the Governor to revoke a right of occupancy for overriding public interest.

(2) Overriding public interest in the case of a statutory right of occupancy means-

(a) the alienation by the occupier by assignment, mortgage, transfer of possession, sub-lease, or otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made thereunder;

(b) the requirement of the land by the Government of the State or by a Local Government in the State, in either case for public purposes within the State, or the requirement of the land by the Government of the Federation for public purposes of the Federation;

(c) the requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith…

 

This means again that the Act only mentioned overriding public interest which translates to the public purpose requirement without mentioning other standards under international law such as due process and non-discrimination. The Act further reiterated that where the revocation is not for breach of conditions contained in the provision, it must be set aside by the courts. In line with this, the courts have held that an allocation of the property of a private company to another private company for the same purpose cannot be either overriding or public purpose.[84] It is not even clear from the Act, whether the reasons for the revocation must be included in the letter of revocation. 

In satisfying the international law requirements on payment of compensation, the Land Use Act provided that where a right of occupancy has been revoked, the holder is entitled to compensation.[85] Hence, section 29 provides as follows:

 

(1)   If a right of occupancy is revoked for the cause set out in paragraph (b) of subsection (2) of section 28 of this Act or in paragraph (a) or (c) of subsection (3) of the same section, the holder and the occupier shall be entitled to compensation for the value at the date of revocation of their unexhausted improvements…

 

However, the Land Use Act, 1978[86] ousted the jurisdiction of the court in determining any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under the Act.[87] Section 47 of the Act provides as follows:

 

(1) This Act shall have effect notwithstanding anything to the contrary in any law or rule of law including the Constitution of the Federal Republic of Nigeria 1999 and, without prejudice to the generality of the foregoing, no court shall have jurisdiction to inquire into-

(a) any question concerning or pertaining to the vesting of all lands in the Governor in accordance with the provisions of this Act; or

(b) any question concerning or pertaining to the right of the Governor to grant a statutory right of occupancy in accordance with the provisions of this Act; or

(c) any question concerning or pertaining to the right of a local government to grant a customary right of occupancy under this Act.

(2) No court shall have jurisdiction to inquire into any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under this Act.

 

The above provisions of the Land Use Act is against the spirit of Section 44(1)(b)  of CFRN,1999 and Section 25 of the NIPC Act which gave to any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria.

 

Furthermore, the rule supported by all leading ‘Western’ governments and many jurists in Europe and North America is as follows: the expropriation of alien property is only lawful if ‘prompt, adequate and effective compensation’ is provided for.[88] The Nigeria position on the expropriatory value to be paid by way of compensation is not consistent. In principle, thereof, expropriation, as an exercise of territorial competence, is lawful, but the compensation rule (in this version) makes the legality conditional.[89] According to the western world, the emphasis is on respect for property rights both as ‘acquired rights’[90] and as an aspect of human rights.[91] The principle of acquired rights is unfortunately vague, and the difficulty is to relate it to other principles of law: in short this and other general principles beg too many questions.[92]

 

The use of these words namely: ‘fair and adequate compensation’,[93] ‘Prompt payment of compensation’[94] and ‘appropriate compensation’[95] in Nigeria are not clear and in a state of confusion in the determination of methods of payment of compensation. Particularly, the provisions of section 44 of the 1999 Constitution relating to ‘prompt payment’ of compensation is not healthy for the economic development of the country. The reasonableness of such compensation and special circumstances that necessitated the expropriation should be the determining factor. Whatever the justifications offered for the compensation rule by some West African countries, it has not received considerable support from the developing countries.

 

Another burning issue is the method of evaluation. A study conducted by Nuhu[96] showed that compensation mostly paid to affected people is grossly inadequate. According to Nwosu[97] government pays compensation for crops, trees and buildings, but examples abound where compensation has been inadequate, or was subject to considerable delay with inflationary losses owing to devaluation. He also highlighted other problems associated with compulsory acquisition of land to include inaccurate enumeration, lack of agreement on the definition of assets for which compensation is paid, the basis of compensation, illiteracy and ignorance of customary occupants, differences in compensation for annual versus perennial crops or trees, and failure to compensate for compulsorily acquired land with access to adequate land elsewhere.

Also the question of “less depreciation” would be looked at in the context of the poverty level in Nigeria. There is evidence that most times compensation are delayed with non-payment of interest at bank rate on delayed payment as provided for in section 29(4)(b) of LUA and section 44(1) of the constitution. Nuhu[98] revealed that compensation assessed in respect to the acquisition of site for University of Abuja in 1990 was yet to be paid as at 2006 when the research was concluded, thus leaving claimants at a position worse than they were before the revocation.

 

The Act provided that disputes as to the amount of compensation are referred to the appropriate Land Use and Allocation Committee.[99]  Section 47(2) worsens the issue. It ousts the jurisdiction of the court to enquire into the actions of either the Governor or the Local Government Chairman acting in accordance with the provisions of the Act. It provides in part that:

 

…no court shall have jurisdiction to inquire into any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under this Act.

 

The above provision and other provisions therein constitute an ouster clause which means that even where the provisions of the Act conflicts with the constitution, provisions of the Act prevails. One now queries the legality of this Act which presumed to be more powerful than the constitution even in a democracy. The Act gives the owner right to compensation or a right to challenge anon-timeous payment of compensation but not the right to challenge the adequacy of such compensation. What an autocratic and obnoxious law? The section leaves land owners and investors at the mercy of the Governor.  Such provision does not attract foreign investor confidence, the investors knowing that lands they acquire may be lost at any time to the government without recourse to the court. More so, the fact that compensation is not adequate and cannot be questioned is a serious issue that will hinder the efforts of the government to wow foreign investors. Foreign investors express fears over the uncertainty arises from the revocation of their rights over land as when this is done, they are left with little or nothing to run their business.

 

Conclusion

 

In this work, exposition on the concept of investment valuation methods was made and equally its myriad heads and dimensions were exposed and the new direction that will enthrone democracy based on due process requirements was identified and examined. The violation methods have some flaws.  They are not mutually exclusive. Arbitral tribunals are more likely to be persuaded by a number of different valuation techniques that generate comparable figures. If the results shown by different methods are highly divergent, these differences can either be rationally explained or should suggest that there are errors or unsubstantiated assumptions in one or more of the methods used.

Likewise, the various opinions of scholars and jurists alike on various issues bothering on investment valuation methods, the existence of such methods and survival were looked at. Equally examined are the various difficulties encountered by tribunals when it comes to determining the quantum of compensation using any of the valuation methods. Valuation is a highly technical enterprise, which requires specialized knowledge and skills. The disputing parties, with the help of their valuation experts, often overstate or minimize the damages suffered in order to pursue their own interests.

It is submitted that where none of the violations of the BIT caused the loss and damage for which the investor claims compensation, each of investor’s claims for damages must be dismissed; the only appropriate remedies for the respondent’s conduct can be declaratory in nature.

Further, the appropriateness of a particular valuation method of an investment shall be determined by the circumstances surrounding the investment in issue and information available. Much it is submitted shall depends on the characteristics of the investment, its proven track record of profitable operations and the available market references. Thus, judges should be exposed to the fact that every unjust expropriation of property must have an appropriate valuation method to ascertain what is due to the investor; there is always existing head of valuation method to address any such precarious situation; that is, identifying the appropriate valuation method. Equity does not let wrong go without a remedy and this is the juristic basis of this work.

 

This work made proposals for reform. It is recommended further as follows:

a.      The judges, arbitrators and civil justice dispensers should explore this area of law to the fullest in order to do justice in cases of improper valuation methods.

b.     Though these valuation methods are more under international law, West African countries should do more through legislative actions with a view to using this area of law to strengthen the regions’ democracy.

In all, the expropriation process must be free from arbitrariness and in accordance with due process of law. This among others includes the right of investor of a contracting party to prompt review of its case, including using the appropriate valuation method which if properly done, will strengthen democracy in West African region.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

 

Books

 

Brownlie I., Principles of Public International Law, (6th ed., Oxford University Press, 2003)

Gurdip, S., International Law (3rd edn, Eastern Book Company, 2015) 154

Peter C. and Joanne C., The Oxford Companion to Law (first published 2008, Oxford  University Press 2008)

Starke J G., An Introduction to International Law (7th edn., London, Butterworths, 1972)

Shore & Weiniger, InternationalInvestment Arbitration, Substantive Principles (OUP 2007)

Umozurike U.O, Introduction to International Law (2nd edn, Spectrum Books Limited 1999)

Wälde, T W., and Sabahi B., Compensation, Damages and Valuation in International Investment Law, Wälde, T, [ed.], Transnational Dispute Management (Vol. 4, Issue 6, 2007)

 

Journal Articles

 

Nnabue U.S.F, ‘’Developing the Less-Developed Economies through Foreign Investment: Nigeria in Focus’’, [2011], vol, JCCL, 1.

Nuhu, M.B., “Compulsory Purchase and Payment of Compensatio in Nigeria: A case Study

of Federal Capital Territory (FCT) Abuja”, (2008), Nordic Journal of Surveying and Real Estate Research, Special Series, Vol. 3

Nuhu, M.B., “Compulsory Purchase and Payment of Compensatio in Nigeria: A case Study of Federal Capital Territory (FCT) Abuja”, (2008), Nordic Journal of Surveying and Real Estate Research, Special Series, Vol. 3 <http//ojs.tsv.fi/index.php/njs/article/viewFile/2454/2280> accessed on 26/12/2012.

Per Y Fortier and SL Drymer, “Indirect Expropriation in the Law of International

Investment: I know It When I See It, or Caveat Investor” [2004] 19 ICSID Review-FILJ 293, 305.

Wilfred K.A, Compulsory Acquisition and Compensation in Ghana: Principles and Practices, Paper presented at the American Real Estate Society Conference in Seattle-Washington, USA from 13 -16 April 2011

<http://www.afrer.org/docs/pdf/Dr_Wilfred_K_Anim-Odame_Compulsory_Acquisition_and%20Compensation_in_Ghanaprinciples_and_practices.pdf> last accessed on 7/30/2017.

 

Nigerian Cases#

Saleh v Monguno & Ors, [2006] 7 S.C. (Pt. II) 97; (2006) 15 NWLR (PT 1001) 26

Lagos State Development and Property Corporation v Foreign Finance Corporation, (1987) 1 NWLR (Pt.50) 413.

 

Arbitration Cases

 

Biwater v Tanzania, Award, 24 July 2008

Vivendi v Argentina II, Award, 20 August 2007, para.8.2.10; Siemens v. Argentina, Award, 6

February 2007, para. 353.

Compania de Aguas del Aconquija S.A. & Vivendi Universal S.A. v Argentine Republic, ICSID Award Case No: ARB/97/3, para.7.5.21

Compania del Desarrollo de Santa Elena S.A. v Republic of Costa Rica, ICSID Award Case

No: ARB/96/1

Southern Pacific Properties (Middle East) Limited v Arab Republic of Egypt, ICSID Award

Case No: ARB/84/3.

King of Greece & Ors v Greece (2001) 33 EHRR 21; (2000) ECHR 640, para. 78

Yagtzilar and Others v Greece Article 41 Judgment, 15 January 2004, para. 25

Scordino v Italy (No.1) (2006) ECHR 275, para. 255

CMS  v Argentina, Award on Merits, para. 402

 

Metalclad. v Mexico, Award of 30 August 2000

SPP v Egypt, Award on Merits, paras. 188-189

Tecmed v Mexico, Award, 29 May 2003

Siemens v Argentina, Award, 6 February 2007, para. 352

CME v Czech Republic, Final Award, 14 March 2003.

 

 

Websites

 

United Nations Conference on Trade and Development, ‘Expropriation’:UNCTAD Series on Issues in International Investment Agreement 11, 2012 <https://unctad.org/en/Docs/unctaddiaeia2011d7_en.pdf> Accessed on 22/3/2019.

Investopedia, ‘’ What is Liquidation value,  <https://www.investopedia.com/terms/l/liquidation-value.asp> accessed 3/3/2019

Investopedia, ’’Market Value’’<https://www.investopedia.com/terms/m/marketvalue.asp>

accessed 23/3/2019.

‘‘Market  Value,’’ <https://www.google.com/search?q=market+value&oq=market+value&aqs=chrome..69i57.7320j0j7&sourceid=chrome&ie=UTF-8> accessed 23/3/2019

Salvage Value’’ <https://www.accountingtools.com/articles/what-is-salvage-value.html >

Accessed 23/3/2019.

‘’Investopedia’’ <https://www.investopedia.com/terms/s/salvagevalue.asp> Accessed 23/3/2019.

‘’Discounted Cash Flow’’

<https://www.google.com/search?q=discounted+cash+flow+method&oq=discounted+cash+flow+method&aqs=chrome..69i57.1216j0j7&sourceid=chrome&ie=UTF-8> Accessed on 22/3/2019.

 



[1]                  U.O.Umozurike,  Introduction to International Law (2nd edn, Spectrum Books Limited

1999) 6-7.

[2]                 U.S.F Nnabue, ‘’Developing the Less-Developed Economies through Foreign Investment:

Nigeria in Focus’’, [2011], vol, JCCL, 1.

[3]                 Gurdip, Singh, International Law (3rd edn, Eastern Book Company, 2015) 154.

[4]                 Peter Cane and Joanne Conaghan‘, The Oxford Companion to Law (first published 2008, Oxford

University Press 2008) 437

[5]                 Ibid.

[6]                 Starke, J.G., An Introduction to International Law, 7th edn., London, Butterworths, 1972, 289.

[7]                 United Nations Conference on Trade and Development, ‘Expropriation’:UNCTAD Series on Issues in

International Investment Agreement 11, 2012 <https://unctad.org/en/Docs/unctaddiaeia2011d7_en.pdf > Accessed on 22/3/2019.

[8]                 For example, real estate.

[9]                 Hereinafter called IIAs

[10]                 Investopedia, ‘’ What is Liquidation value,

  <https://www.investopedia.com/terms/l/liquidation-value.asp> Accessed 3/3/2019.

[11]                Ibid (n 4)

[12]                Ibid. (n 4)

[13]                Investopedia, ’’Market Value’’< https://www.investopedia.com/terms/m/marketvalue.asp>

Accessed 23/3/2019.

[14]                ‘Market  Value’’

<https://www.google.com/search?q=market+value&oq=market+value&aqs=chrome..69i57.7320j0j7&sourceid=chrome&ie=UTF-8> Accessed 23/3/2019.

[15]                Investopedia, ‘’ What is Liquidation value’’, op.cit.

[16]                Salvage Value’’ <https://www.accountingtools.com/articles/what-is-salvage-value.html >

                  Accessed 23/3/2019.

[17]                ‘’Investopedia’’ <https://www.investopedia.com/terms/s/salvagevalue.asp> Accessed 23/3/2019.

[19]                Ibid (n 12)

[20]                Wälde, T.W., and Sabahi B., Compensation, Damages and Valuation in International  Investment Law,

 Wälde, T., [ed.], Transnational Dispute Management, Vol. 4, Issue 6, 2007, p. 19.

[21]                Hereinafter called ILC

[22]                Article 1, ILC.

[23]                The ILC was established  by the United Nations General Assembly in 1948 for the

‘promotion of the progressive development of International Law and its  codification.

[24]                BIT means Bilateral Investment Treaty. This is the Agreement between the United Kingdom of Great

Britain and Northern Ireland and the United Republic of Tanzania for the Promotion and Protection of

Investments signed at Dar es Salaam on 7 January 1994, and entered into force on 2 August 1996 (the “BIT” or the “Treaty”)

[25]                See Biwater v Tanzania, Award, 24 July 2008.

[26]                Ibid (n 12)

[27]                The Chorzow Factory Case was a case heard before the Permanent court of International Justice in

1927. it was an early authority in International Law that established a number of precedents in International Law.

[28]                See e.g., Brownlie I., Principles of Public International Law, 6th Ed., UK, 2003, Oxford University

Press, p.446.; Mclachlan, Shore & Weiniger, International Investment Arbitration, Substantive Principles (OUP 2007), p. 336, (citing, in addition to the other sources mentioned here, Article 38 of the Statute of the International Court of Justice, which directs the ICJ to have regard to “the general principles of law recognized by civilised nations”).

[29]                United Nations Conference on Trade and Development, Expropriation:UNCTAD Series on Issues                   in

 International Investment Agreement 11,(n 14)

[30]                Example, ASEAN Comprehensive Investment Agreement (2009) Article 14 provides:

                  ‘2. The compensation referred to in sub-paragraph 1(c) shall:

                  (a) be paid without delay;

                  (b) be equivalent to the fair market value of the expropriated investment immediately before or at                   the

time when the expropriation was publicly announced, or when the expropriation occurred, whichever is applicable’ (Emphasis mine.)

[31]                Article 4 of Netherlands-Oman BIT (2009)

[32]                United Nations Conference on Trade and Development, ‘Expropriation’: UNCTAD Series

on Issues in International Investment Agreement 11,(n 26)

[33]                Vivendi v Argentina II, Award, 20 August 2007, para.8.2.10; Siemens v. Argentina, Award, 6                   February 2007, para. 353.

[34]                Article IV.5 of the World Bank Guidelines on the Treatment of Foreign Direct Investment.

[35]                Resolution 1803 (XVII), 14 December 1962, Declaration on Permanent Sovereignty over Natural                   Resources, para. 4; Resolution 3281 (XXIX), 12 December 1974, The Charter of Economic Rights                   and Duties of States (A/RES/29/3281), Article 2(c).

[36]                United Nations Conference on Trade and Development, Expropriation: UNCTAD Series on Issue                  in

International Investment Agreement 11, (n 28).

[37]                See Chile-Tunisia BIT (1998)

[38]                See India-United Kingdom BIT (1994)

[39]                See Mozambique-Netherlands BIT (2001)

[40]                Pincova and Pinc v The Czech Republic, European Court of Human Rights, Judgment, 5                   November

 2002, para. 53.

[41]                United Nations Conference on Trade and Development, “Expropriation”:UNCTAD Series

on Issues in International Investment Agreement 11, (n 32).

[42]                For example, Compania de Aguas del Aconquija S.A. & Vivendi Universal S.A. v Argentine

Republic, ICSID Award Case No: ARB/97/3, para.7.5.21; Siemens A.G. v The

Argentine Republic, ICSID Award Case No: ARB/02/8, paras. 259, 273; ADC Affiliate  Ltd & ADC & ADMC Management Ltd v Republic of Hungary, ICSID Award Case No: ARB/03/16), paras.398 and 444.

[43]                United Nations Conference on Trade and Development, “Expropriation”:UNCTAD Series

on Issues in International Investment Agreement 11, (n 37)

[44]                Ibid.

[45]                ICSID Award Case No:

ARB/96/1.

[46]                 ICSID Award Case

No: ARB/84/3.

[47]                Example, King of Greece & Ors v Greece (2001) 33 EHRR 21; (2000) ECHR 640, para. 78. See also

Yagtzilar and Others v Greece Article 41 Judgment, 15 January 2004, para. 25; Scordino v

Italy (No.1) (2006) ECHR 275, para. 255.

[48]                United Nations Conference on Trade and Development, Expropriation:UNCTAD Series on Issues in

 International Investment Agreement 11, (n 39)

[49]                Constitution of the Federal Republic of Nigeria, 1999 (As Amended).

[50]                Constitution of Federal Republic of Nigeria, Cap C23, Laws of the Federation of Nigeria, 2004.

[51]                Article 12(3)

[52]                It needs emphasizing that the provision of this Charter is held in contempt by the western world, most

of whom  voted against its adoption or abstained thereat but only passed vide majority votes of members of the UN General Assembly. In consequence, they have sought to obviate this provision of the CERDS by entering into BITs, which requires prompt, adequate and effective compensation to be paid.

[53]                Cap N117, L.F.N, 2004.

[54]                Emphasis mine.

[55]                See  Guideline IV.8

[56]                Same approach has been followed by the Republic of Korea-Mexico BIT (2000), the Canada-Peru                   BIT

 (2006) and other treaties.

[57]                Example, the China-Côte d’Ivoire BIT (2002)

[58]                Similar formulations can be found in Chile’s BITs with the Philippines (1995) and South Africa                   (1998). The Costa Rica- Taiwan Province of China BIT (1999) appears to go further by providing,                   in a

Protocol, that the valuation shall only take into account ‘real and permanent damages’,                   excluding ‘future events’, ‘expectations’ and ‘capital gains’.

[59]                Per Y Fortier and SL Drymer, “Indirect Expropriation in the Law of International Investment: I know It

When I See It, or Caveat Investor” 19 ICSID Review-FILJ 293, 305 (2004).

[60]                CMS v Argentina, Award on Merits, para. 402.

[61]                Biwater v Tanzania, Award, 24 July 2008

[62]                Metalclad. v Mexico, Award of 30 August 2000; SPP v. Egypt, Award on Merits, paras. 188-189.

[63]                Investopedia ‘’What is the difference between Terminal Value and Residual Value’’

<https://www.investopedia.com/ask/answers/072815/what-difference-between-terminal-value-and-residual-value.asp > Accessed 23/3/2019.

[64]                Ibid.

[65]                Biwater (n 62)

[66]                Ibid (n 66)

[67]                Award on the Merits, 20 May 1992, para. 36.

[68]                Award, 30 August 2000, para. 120.

[69]                 Award, 29 May 2003

[70]                Award, 6 February 2007, para. 352.

[71]                Award, 20 August 2007.

[72]                See, for example, ADC v Hungary, Award, 2 October 2006; CMS v Argentina, Award, 12 May 2005;

CME v Czech Republic, Final Award, 14 March 2003.

[73]               Wilfred K.A, Compulsory Acquisition and Compensation in Ghana: Principles and Practices,                  

Paper presented at the American Real Estate Society Conference in Seattle-Washington, USA from 13 -16 April 2011

<http://www.afrer.org/docs/pdf/Dr_Wilfred_K_Anim-Odame_Compulsory_Acquisition_and%20Compensation_in_Ghana-principles_and_practices.pdf> last accessed on 7/30/2017.

[74]                Constitution of Republic of Ghana, 1992.

 

[75]                Ibid.

[76]                A stool means the seat of a chief of an indigenous group or community which represents the source

of authority of the chief. It is a symbol of unity and its responsibilities devolve upon its living representatives, the chief and his councilors (elders). Land owned by such a group or community is referred to as stool land. A skin in Northern Ghana is the equivalent of a stool in Southern Ghana 

[77]                See Section 2 of Act 125.

[78]                See Article 20(1) Constitution of Republic of Ghana, 1992.

[79]                Cap. C 23, LFN, 2004 (As amended). Herein referred to as CFRN, 1999.

[80]                See also Foreign Exchange (Monitoring and Miscellaneous) Provision Act Cap. F34, LFN, 2004, s 3(2)

[81]                Saleh v Monguno & Ors, [2006] 7 S.C. (PT. II) 97; (2006) 15 NWLR (PT 1001) 26

[82]                Cap. N117, L.F.N, 2004. (Herein referred to as NIPC, Act).

[83]                Cap L5, LFN, 2004. Herein referred to as LUA, 1978.

[84]                Lagos State Development and Property Corporation v Foreign Finance Corporation, (1987) 1 NWLR (Pt.50) 413.

[85]                 LUA 1978,   section 29.

[86]                Ibid.

[87]                Section 47(5) of the LUA 1978.

[88]                Crawford, J., Brownlie’s Principles of Public International Law,  8th edn., London, Oxford

 University Press, 2012, 622-623.

[89]                Ibid

[90]                The statements of the Permanent Court on vested or acquired rights occur in the context of state                  succession. See  Lighthouses (1956) 23 ILR 341

[91]                Lithgow & Ors v UK (1986) 75 ILR 438.

[92]                Crawford, J., op.cit.

[93]                Section 25(2)(a) of the NIPC Act.

[94]                Section 44(a) of the CFRN 1999.

[95]                 Article 4 of Resolution 1803.

[96]                Nuhu, M.B., “Compulsory Purchase and Payment of Compensatio in Nigeria: A case Study of Federal Capital Territory (FCT) Abuja”, (2008), Nordic Journal of Surveying and Real Estate

Research, Special Series, Vol. 3 at http//ojs.tsv.fi/index.php/njs/article/viewFile/2454/2280.Accessed on 26/12/2012.

[97]                Nwosu, A.C., “The Impact of the Large-Scale Acquisition of Land on Smallholder

Farmers in Nigeria”, in Doss, C.,& Olson, C., eds., Issues in African Rural Development, Morrilton, AR, USA, Winrock International Institute for Agricultural Development.

[98]                Nuhu, M.B., “Compulsory Purchase and Payment of Compensation in Nigeria: A case

Study of Federal Capital Territory (FCT) Abuja”, op.cit.

[99]                S. 30 of the Act