This article was written by Prerna Sharma, a student of RMLNLU.

The International law does not generally stipulate the ownership or property rights regime which the states must apply to the energy resources under their national law. While the International law is agnostic as to whether the energy resources are subject to a regime of public or private property rights. The term ‘Property’ as used in the context of International law in a variety of International instruments and also for a variety of purposes. One purpose is to establish ‘Ownership of key chattels under the International law.[1] Some of the treaties address the relationship between domestic property regimes and recognition of International concern in its treatment and disposition. Also, he Property defined in the context of liability and compensation regimes which define property damage for the purpose of harmonizing and potentially limiting the compensation. For instance, the 1993 Council of Europe Convention on Civil Liability for damage resulting from activities dangerous to the environment[2] defines ‘damage’ to include loss or damage to property other than the property held under the control of the operator at the size of dangerous activity. The definition of damage to property was judicially considered in Merlin v. British Nuclear Fuels Ltd.[3] In interpreting Section 12 of the United Kingdom’s Nuclear Installation Act 1965(right to compensation). In the case, Merlins sought damages for the economic loss they suffered in the consequence of their house reduced in the price owed. The Merlins argued to the radiological contamination. Gatehouse J relied on the paragraph from the Convention which the Act was designed, inter alia to implement to flesh out the definition of damage in Section 7 of the act and held that, firstly, the term Property refers to the tangible Property not incorporeal property nor the property rights; Secondly, the term damage used is the actual physical damage to the tangible property and does not include pure economic loss.[4] Perhaps, one of the most fertile areas for the development of the concepts of property and property rights at an International level is in the field of investment. The classic example is deprivation of the foreign investors’ property by the host state in violation of International law.[5] The property interests are also protected by treaty, the classical form being the treaty of friendship, commerce and navigation (FCN) prevalent in the nineteenth and the early twentieth century with its broad formula of ‘Property, rights and interest’.[6] Amongst other things the definition of the term investment too includes the Property rights that have to be protected. Typically, such definitions also include tangible, intangible, movable and immovable property; property rights such as the sale, mortgage, gift, lease, liens, pledges etc. in addition to the Intellectual Property.

However, before enjoying the protections afforded by the ‘Property rights and Interest’, it is necessary to consider whether the International Law requires the state to permit the acquisition of such property. The right to property is recognized in the number of human rights instruments, the enjoyment of which is not only restricted upon the owner of the property.[7] There has been extensive considerations on the scope of the right to property, which provides that every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one should be deprived of his possession except in the public interest and subject to the conditions provided by for law and by the general principles.


The property law covers both commercial as well as domestic property transactions. In commercial property the freehold will be owned as an investment by an individual or a company and that freehold will grant such commercial lease to an occupying lessee. The lease terms regulate the basis on which the lessee will be allowed to occupy the premises for the purposes of carrying on a business. [8] The exchange of contracts is when the contract becomes legally binding on both buyer and seller (note that merely signing it does not bind either party). It is so called because both buyer and seller sign identical copies of the contract and the two copies are literally swapped, or exchanged. In the case of pre-exchange checklist, once exchange of contracts has taken place both the parties become bound in to the contract, therefore it is vital that all outstanding matters are resolved prior to exchange taking place. There are various methods of exchanging contracts.[9] Also, the exchange of contracts is the most critical stage in the process of conveyancing as it represents the point at which the parties become legally bound to proceed. In the context of synchronization, if a client is selling a property and buying the other (assuming the two transactions dependent upon each other) the two exchanges of contracts cannot be overstated. In the cases of routine sale of houses/flats by many clients, they will also be buying the other and vice-versa. In such cases, the conveyance must ensure that exchange of contracts on both transactions is synchronized so that the client does not end up with two properties or none at all.[10]


The term mortgage is defined by Section 58 of Transfer of Property Act, under chapter IV of mortgages of immovable property and charges. The terms used are defined under this section wherein, a mortgage is the transfer of the interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or performance of an engagement which may give rise to pecuniary liability. The transferor is called the mortgagor, the transferee a mortgagee, the principal money and interest of which payment is secured for the time being are called the mortgage-money, and instrument(if any) by which the transfer is effected is called a mortgage-deed. Considering only the relevant part, in the words of Mahmood, J in the case of Gopal v. Parsotam[11] “Mortgage as understood in the country cannot be defined better than by definition adopted by the Legislature in Section 58 of Transfer of Property Act. The definition without anything in relation to law has formulated in clear language the notions of mortgage as understood by all and every definition is borne by decisions of Indian Courts of Justice.” In a mortgage, the right in the property created by the transfer is accessory to the right to recover the debt as established in the case of Chetti Goundan v. Sundaram Pillai.[12]. The hypothecation of property does not create any bar in execution of agreement to sell the same because in hypothecation the title of property is not transferred to the mortgagee, moreover when the purchaser had no knowledge of the hypothecation as in the case of Ratan Pal Singh v. Kunwar Pal Singh[13], wherein the deed contained in it the stipulation as to return the delivery of possession after expiry to two years on the condition that the mortgagee would not pay any rent during the period and the mortgagor would not pay any interest on the sum advanced. The Supreme Court held that the arrangement was in the nature of a mortgage.

[1] See “Property in General” in Principles of Public International Law (6th Edition, 2003) 432.

[2] Retrieved from on January 3, 2017 at 12:08

[3] [1990] 3 WLR 383; [1990] 3 All ER 711

[4] ibid at 394 para G

[5] The rules are the part of broader category of the rules on state responsibility akin to delictual rules; See further R.Barnes, Property Rights and Natural Resources (2009) 230 n 54

[6] For the interpretation of FCN treaties See for example ELSI

[7] Everyone has the right to use and enjoyment of his property. The law may subordinate such use and enjoyment to the interest of the society.

[8] Retrieved from on January 5, 2017 at 16:55

[9] Retrieved from, on January 5, 2017 at 14:53

[10] Retrieved from the Handbook of Property Law, by Robert Abbey & Mark Richards on pg 119 & 120 on the topic of “Exchange of Contracts”

[11] (1883) ILR 5 All 121 (137) (FB): 1882 All WN 128

[12] (1865) 2 Mad HCR 51 (54)

[13] AIR 2001 All 224: 2001 All LJ 1743: 2001 (43) All LR 501

One Comment

Add a Comment

Your email address will not be published. Required fields are marked *