The social function as a limit of property right: brief analysis in the light of the jurisprudence of the Chilean Constitutional Court and the Supreme Court and international investment arbitral awards

Abstract

The research developed in this paper allows us to conclude that Chilean constitutional law and international law, including investment law, agree that the right to property has limits arising from its social function or social interest. This empowers the State to deprive property (expropriation) with prior compensation, and to regulate and limit the exercise of this right. The first objective of this work is to demonstrate that in both Chilean constitutional law and international investment law, expropriation is not the same as regulating or limiting. The duty to compensate only relates to expropriation. The second objective is to demonstrate that although in principle, the State can regulate or limit property, that regulation or limitation must be reasonable and proportional. For this reason, it cannot conceal a “regulatory expropriation” or “indirect expropriation”. Moreover, if identified, international arbitral tribunals have condemned the host States. To test the hypotheses on both objectives, using the inductive method, we have turned specifically to review what have said the jurisprudence the Chilean Supreme Court and Constitutional Court, and international investment arbitral awards.