Against the backdrop of the absence of a generally accepted standard of lawful expropriation at the beginning of the 20th century, the arbitration case Lena Goldfields v. USSR stands out as an exceptional clash between a private investor and a state: a NEP-era concession agreement (1925), a sharp political turn in the late 1920-s, coercive and administrative measures by Soviet authorities, and the investor’s de facto deprivation of the ability to perform the contract.

The case was heard under an arbitration clause, despite the non-appearance of the Soviet arbitrator, which raised the issue of the autonomy of the arbitration agreement and became an early example of an “investor–state” dispute resolution in the absence of an institutional BIT/ICSID regime.

The purpose of the article is to present the Lena Goldfields case in its historical-legal context as one of the first examples shaping the content of international standards of investment protection: (1) application of general principles of law (in particular unjust enrichment) to state conduct amounting to expropriation; (2) internationalization of the concession contract and the primacy of the agreement over unilateral state acts; (3) approaches to full compensation, including lucrum cessans; (4) procedural aspects of the autonomy of the arbitration clause.

Methodologically, the study combines a historical-legal analysis of the case materials and 1920-s – 1950-s doctrine, a dogmatic analysis of the reasoning of the award, a comparativelegal review of the tribunal’s approaches against later practice (in particular, with respect to indirect expropriation and internationalization of contracts), as well as a reconstruction of the damages calculation through the prism of modern methods (DCF-like approach, 5 % discount according to the buy-out formula in the contract).

The main results lie in the identification of four parameters of Lena Goldfields’ influence on the formation of standards: first, the substantive – recognition that the totality of state actions (searches, seizure of documents, arrests of personnel, administrative pressure) resulted in “impossibility of performance” and in effect amounted to indirect expropriation; second, the normative – reliance by the tribunal on general principles of law (unjust enrichment) as a basis for full reparation of not only actual losses but also expected profits; third, the contractual – affirmation of the internationalized nature of the concession agreement and its immunity from unilateral revision; fourth, the evidentiary-computational – use of the buy-out value formula (average annual profit – remaining years with a 5 % discount), which functionally anticipates modern income-based compensation models. As a result, the tribunal awarded compensation substantially exceeding the invested capital, thereby realizing the principle of full reparation.

The conclusions argue that Lena Goldfields served as an “early prototype” of investment arbitration: it established the possibility of protecting the investor against sovereign abuses outside interstate channels; reinforced the intellectual foundations of the standards of full compensation and fair and equitable treatment; and became a starting point for the doctrines of contract internationalization and arbitration agreement autonomy, which later tribunals invoked when addressing indirect expropriation. The historical lesson of the case lies in the necessity of a predictable, contractually and internationally embedded model of state–investor relations, where full reparation includes the potential revenues lost as a result of unlawful conduct.

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