Calvo Clause or Calvo Doctrine – Definition

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Calvo Clause or Calvo Doctrine Definition

In international law, the Calvo Doctrine is a policy that guides or regulates the jurisdiction of governments in international disputes and treaties. The Calvo Clause is a body of rules that guide the interrelation of governments in treaties, and how governments protect their home state in times of disputes.  The Calvo Doctrine or Calvo Clause prohibits the use of force in collection of debts and holds that the country in which an investment is located holds the jurisdiction in settling the dispute.

A Little More on What is the Calvo Doctrine

The Calvo Doctrine was developed in 1868 by Carlos Calvo, a legal scholar and diplomat from Argentina. In his book titled the ‘International Law of Europe and America’ published in 1868, Carlos Calvo set out some international rules guiding the collection of indemnities and the authority that countries can exercise over aliens in international disputes. The international rules contained in the Calvo Doctrine bind all nations, regardless of their population or size. According to a Calvo clause, an alien that signs a contract containing this clause garres to the jurisdiction of such government over the alien.

After Carlos Calvo advanced the Calvo Doctrine in 1868, the doctrine was further articulated by  Luis María Drago, the Argentine foreign minister in 1902. This articulation birthed the Drago Doctrine. As stated by the Drago Doctrine, “The public debt cannot occasion armed intervention nor even the actual occupation of the territory of American nations.” This statement by Luis María Drago was issued against the European intervention.

In reaction to the Argentine policy, the United States also established the Monroe Doctrine in 1823 and the Roosevelt Corollary in 1904. All these doctrines are to regulate the jurisdiction of countries or governments over aliens. There are real life examples of where the Calvo Clause has been used in contracts between the two nations. A common example was the international contract that was signed between the Mexican government and the North American Dredging Co in November 1912. Terms of the contract as well as the application of the Calvo Clause pr Doctrine were explicitly stated.

References for Calvo Clause

http://www.businessdictionary.com/definition/Calvo-clause.html

http://www.duhaime.org/LegalDictionary/C/CalvoClause.aspx

https://definitions.uslegal.com/c/calvo-doctrine/

Academic Research for Calvo Clause

The imminent death of the calvo clause and the rebirth of the calvo principle: Equality of foreign and national investors, Manning-Cabrol, D. (1994). Law & Pol’y Int’l Bus., 26, 1169. In the sight of the scholars of human rights, the more reasonable unit of analysis is that the individual environmentalists observe the new world order formulated in terms of supranational institutions and individuals. Latin America has made this debate for long. This paper analyzes the radical change process in Latin American jurisprudence regarding the famous Latin American legal rules ‘The Calvo Doctrine’. The Calvo Clause is considered inefficient and soon in new world order, it will be obsolete in the basis of individual and supranational institutions but paradoxically, the Calvo Doctrine as the main principle will be justified.

Has Mexico Crossed the Border on State Responsibility for Economic Injury to Aliens-Foreign Investment and the Calvo Clause in Mexico after the NAFTA, Daly, J. (1993). Mary’s LJ, 25, 1147. This paper investigates a few questions related to the Calvo Clause and NAFTA, i.e. To Aliens-Foreign investment, does Mexico cross the border on the responsibility of the state for economic injury? And why the Calvo Clause was presented after NAFTA in Mexico? The author describes the motive of parties in entering the FTA (Free Trade Agreement) of North America. Does NAFTA take the position of the Calvo Doctrine or the Hull Doctrine? Does Mexico accept the Hull Doctrine as CIL (Customary International Law)? The Calvo Doctrine is moot or not? etc.

The Calvo Clause in Latin American Constitutions and International Law, Garcia-Mora, M. R. (1949). LMarq. L. Rev., 33, 205. Carlos Calvo was a well-known Argentine jurist who said that in case of disputes between a state and an alien, the latter has to recur to local remedies giving up diplomatic protection from the government. He had no idea that in the Law of Nations, he was going to originate a highly controversial clause. The publicists are exerting their efforts today to attack this doctrine instead of finding out what can be its true purpose and what is its jurisdiction significance. This paper aims to bring the Calvo Clause back to its original context whatever the criticism the opponents are making against it. Still, internationalists and governments are misunderstanding this clause. Need is to focus on it in international law, including the Latin American country constitutions.

Politics and Foreign Direct Investment: The Multilateral Investment Guarantee Agency and the Calvo Clause, Dalrymple, C. K. (1996). Cornell Int’l LJ, 29, 161. This paper describes the Calvo Doctrine history in Latin America, particularly emphasizing the member countries of the ANCOM (Andean Common Market). The author shows the effect of Calvo Doctrine on specific decisions taken by ANCOM. He also states the general provisions and terms of the MIGA (Multilateral Investment Guarantee Agency). He evaluates how this doctrine principles are embodied in and why a large number of modern legal laws, theories and instruments use it. Finally, the author demonstrates that even if Multilateral Investment Guarantee Agency becomes successful in attracting nations of Latin America as signatories, the Calvo Doctrine in the Latin American laws and MIGA convention may not allow MIGA to achieve its target of enhancing the foreign direct investment flow to Latin America.

Some observations on the Calvo Clause, Feller, A. H. (1933). American Journal of International Law, 27(3), 461-468. This research has been carried out to present a few observations on the CC (Calvo Clause). In the MURL case (Mexican Union Railway Limited) which was decided in Feb 1930, the BMCC (British Mexican Claims Commission) established according to the convention of 19th Nov 1926, added a stone to slightly unsteady decisions structure on the Calvo Clause. A large number of the Commissioners excitedly accepted the United States-Mexican GCC (General Claims Commission) considerations in the dredging case of North America not considering it important to repeat them or making possible to make them better.

The calvo clause, Summers, L. M. (1932). The calvo clause. Va. L. Rev., 19, 459. The diplomatic interventions of the 1st group of states have often disturbed the close relationship, on one hand, between the US and the European powers and on the other hand, the Latin American countries in support of their citizens. These interventions have, no doubt, been justified because the foreigner in Central and South America has often been a victim of ill-treatment and faced denials of justice. However, the author states a hypothesis that every appeal of the citizens was well-based, the powers of North America mostly intervene without examining the facts of the specific case and take it for granted. There is no need to say that Latin America resented this case strongly.

ICSID and the Calvo Clause a Hindrance to Foreign Direct Investment in LDCs, Baker, J. C., & Yoder, L. J. (1989). Ohio St. J. on Disp. Resol., 5, 75. In this paper, the authors focus on the role of ICSID (International Centre for Settlement of Investment Disputes) and investigate whether the Calvo Clause proves to be an obstacle in the way of Foreign Trade Investment in Less Developed Countries (LDCs) or it is just a misconception.

Current Attempts to Revise International Law—A Comparative Analysis, Garcia-Amador, F. V. (1983). American Journal of International Law, 77(2), 286-295. This paper makes a comparative analysis of the past and recent efforts made in the context of international law. The author presents the New International Economic Order (NIEO) Law in the attempt to revising the international law and emerging it with the necessary amendments according to the requirements of this era.

The influence of bilateral investment treaties on customary international law, Schwebel, S. M. (2004). In Proceedings of the ASIL Annual Meeting (Vol. 98, pp. 27-30). Cambridge University Press. This paper examines the effect of bilateral investment treaties on the CIL (Customary International Law). The author explains the importance and role of these treaties of foreign investment.

Allocating legislative competence in the Americas: the early experience under NAFTA and the challenge of hemispheric integration, Zamora, S. (1996). Hous. J. Int’l L., 19, 615. In this research, the author throws light on the early experience of American states under the North American Free Trade Agreement
(NAFTA) and explores what are the challenges of hemispheric integration in the context of this FTA. The author explains whether the enforcement of these agreements allocate legislative competence in the states of America or not.

Resolution of Investment Disputes Under the North American Free Trade Agreement, Gantz, D. A. (1993). M Ariz. J. Int’l & Comp. L., 10, 335. This research highlights the investment disputes under the NAFTA (North American Free Trade Agreement) among the states of America and what are the reasons for these investment disputes. Finally, the author provides a resolution of these disputes and gives his suggestions as per his extensive research on it.

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