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This chapter examines the specific issues which flow from the operation of the principle of state sovereignty in the field of foreign investment examined, highlighting the range of such techniques and the areas of international law which have historically been of significance in relation to the treatment of foreign investment. Historically, the discretion of states in relation to foreign investment has been perceived as restricted to three main areas. First, and most pervasively, certain restrictions were seen to flow from the particular way in which the apparently permissive doctrine of sovereignty itself was constructed, and these must be contextualised and examined before the issue of sovereignty in North-South economic relations can be properly understood. Second and more recently, a non-discrimination rule has been formulated which has become part of customary international law. Third, the international law regarding expropriation must be examined.
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