The Nicaraguan Canal Agreement: A Study of a Contemporary Investment Agreement and the Historical Patterns that Helped Shape It

Sammanfattning: In December 2014, Nicaragua officially launched one of the world’s largest engineering projects in history, as construction began on a 278 km transoceanic canal with an estimated cost of US$50 billion. To implement and finance the project, Nicaragua has made an agreement with the foreign investor HKND that has received widespread attention and critique. The purpose of this thesis is to examine this agreement and explain its content through an historical examination of the development of international rules on the protection of foreign property. The first part of the thesis examines the most important provisions of the Nicaraguan canal agreement with respect to the rights and obligations of each party, focusing on the provisions of the agreement that affect the regulatory and legislative capacity of the state of Nicaragua. It draws the conclusion that the agreement is heavily tilted in favor of the foreign investor. The agreement grants generous rights to HKND, enables the corporation to steer Nicaraguan legislation and protects it against any costs that might result from Nicaraguan legislation and regulation. Drawing on theories that form part of Third World Approaches to International Law (TWAIL), the second part of the thesis seeks to explain the imbalances in the agreement based on a historical examination of the development of international rules on the protection of foreign property. By identifying characteristic features of the legal protection of foreign investments throughout history, the thesis finds that this development has been characterized by fundamental conflicts of interests between capital-exporting states and capital-importing states. These conflicts have resulted in international legal rules and principles that generally protect the interests of foreign investors against the interests of host states. The conclusion is drawn that historical legal developments have contributed to the inequities identified in the Nicaraguan canal agreement by exacerbating already existing inequities on a legal level. The thesis finds that the tensions and controversies that surround the agreement are fundamentally not new. Rather, the agreement’s content and existence manifest the fundamental conflicts of interest that have dominated international investment law from its emergence to the present.