Chile: the balanced view : a recopilation of articles about the Allende years and after

to book value, as well as a broad range of intermediate standards, have been made in support of the measure of compensation required by international law.(76) In the case of the Chilean nationalizations, from the very beginning the representative of the Executive clearly stated before the Senate Commíttee that compensatíon would not cover the whole value of the affected property but would be only a partíal compensa– tion.(77) The precedent ofthe postwar European nationalizations was constantly invoked in support of this position.(78) However, there were also clear statements to the effect that a nationalization without compensation was inconceivable.(79) The factthat book value was called for as the basic standard of val uation, with several deductions to be made therefrom, points to an intention to grant a restricted amount of compensation. The application of such a standard cannot be considered contraryto internationallaw so long as it is not arbitrary or unreasonable. But this is one aspect which cannot be impartiarly judged by any of the parties involved, as each is interested only in seeing its own interest prevaiL(80) The adjusted book value standard does not, on its face, fal! below the minimum requirements of international lawand may very well respond to the particular circumstan– ces of a given case, within a framework of flexibility. Similarly, the notion ()f flexibility is applicable lo the promptness of payment of compensation. Payment in installments over time is a recognized practice in international law when the economic conditions of the country justify such method of payment.(81) In this regard, the Chilean constitutional provision for the paymenl of compensation over a period of thirty years should not encoun– ter any difficulty. In addition, the problem of "effective" payment does not seem to arise under the constitutional amendment since the Chilean Executive indicated that compensation would be paid in hard currency or in local currency at its respective rate of exchange.(82) There are, however, two issues which have seriously complicated the Chilean nationa– lization: the questions of excess profits and performance of contractual obligations. VII THE FUNCTION OF NATIONAL LAW AND THE QUESTION OF EXCESS PROFITS The function of national law, within the meaning of Resolution 1803, basically is to adjust the framework provided by international law to the particular circumstances of a given case. In the area of takings of property, international law cannot be rigid, for this would not conduce to the pursuit of justice. However, the state must act within a well– defined Iimit, for none ofthe cond itions of flexi bi Iity "should be taken to imply abandonment of the principie that there should be no discriminatíon between natíonals and aliens to the prejudice of the lalter... ; nor dothese considerations authorize the State to fix compensation which, by reason of its amount or the time or form of payment, transforms the expropriatíon into a confiscatory measure or a mere despoliatíon of prívate property. "(83) Thís is, perhaps, the proper context in which to examine the problem of the compatibi- (76)Friedmann, supra note 24, at 132. (77)Senate Bul!. al 91-93,268.278-79.310. (78)ld., al 91-93,278-79. Percenlages 01 compensation ranging Irom 0% lo 70~!, were mentioned in this context. (79)ld., at 124, 132. (80)See generally, Friedmann, supra note 24, al 132. (81 )See Sohn and Baxter. Draft Convention supra note 7. Art. 10. N.o 4. See also Fo.urth Report, supra note 10, al 24. (82)See the Presidential motion 01 Dec. 21,1970 in Senate Bul!. al 14. (83)Fourlh Report, supra note at 24. See also. Art. 9.201 the draft 01 Dec. 11, 1961, supra note 7. 265