What is the Calvo Doctrine?

The Calvo Doctrine is a  foreign policy doctrine which holds that jurisdiction in international investment disputes lies with the country in which the investment is located. The Calvo Doctrine thus proposed to prohibit diplomatic protection or intervention before local resources were exhausted. An investor, under this doctrine, has no recourse but to use the local courts, rather than those of their home country. As a policy prescription, Calvo Doctrine is an expression a legal nationalism. The principle, named after Carlos Calvo, an Argentine jurist, has been applied throughout Latin America and other areas of the world. Calvo justified his doctrine as necessary to prevent the abuse of the jurisdiction of weak nations by more powerful nations. It has since been incorporated as a part of several Latin American constitutions, as well as many other treaties, statutes, and contracts. The Drago Doctrine descended after the principles of Calvo Doctrine, which was later approved by the Hague Conference of 1907.

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