Instruments of legal protection on foreign investment on the example of relations between Poland and the Federal Republic of Germany

The article presents the protection of foreign investment in the light of the provisions of the Agreement on Promotion and Mutual Protection of Investment concluded between Poland and the Federal Republic of Germany and in the light of Act of 14 VI 1991 on Companies with the Participation of Foreign Investors. Those regulations provide that foreign investment is subject to special protection in three different situations, i.e. in the case of expropriation, damage resulting from social unrest, etc., and in the case of withdrawal of capital. The protection of investment in the first case manifests itself through a statutory limitation of admissibility of expropriation (expropriation is allowed only in the public interest) and through the investor's right to financial compensation, if expropriation has taken place. At the same time the Constitution requires that such compensation should be ,just". Both the Act of 14 VI 1991 as well as the Agreement define the procedure of determining and payment of such compensation; the Act provides an additional instrument of protection, namely the guarantee granted by the Minister of Finance. In the case of damage resulting from social unrest, etc. on the area of the localization of investment, the Agreement requires that foreign investors should be treated not less favourably than domestic investors. Thus, the protection of investment depends on the scope of protection provided for in domestic legislation. Sums received as compensation in the above cases can be transferred freely, just like in the case of the sale or liquidation of investment. The scope of payments subject to the right of free transfer is defined similarly in both documents.Digitalizacja i deponowanie archiwalnych zeszytów RPEiS sfinansowane przez MNiSW w ramach realizacji umowy nr 541/P-DUN/201