The Fair And Equitable Treatment Standard In The International Law Of Foreign Investment

This text analyses the conventional and customary framework of the fair and equitable treatment clauses commonly found in bilateral investment treaties (BITs) and charts how these clauses have become norms of customary international law.

The treatment of foreign investors and of their investments on the territory of a host State is often subject to a bilateral investment treaty (BIT) signed by the national State of the investors and the host State. These BITs usually contain a clause in which the two States offer fair and equitable treatment (FET) to the foreign investors on their territory. Moreover, this clause has become a norm of customary law, implying that investors may rely on it even outside the context of the BIT. Foreign investors whose rights under this clause have not been respected may bring the State in front of an international tribunal. This book analyses not only the conventional and customary framework se the FET clause but also its scope and all its applications in the existing case law. This book tackles the standard of fair and equitable treatment by applying four conceptual frames: the legal basis of FET, its nature as a standard, its content and finally the implications of its breach. The first two chapters explore the two classical sources of international law as possible sources for FET. The main sources of FET lie in a rich conventional framework, mainly bilateral and regional. Yet the high number of BITs does not appear to offer a uniform model of FET clauses, quite the opposite; the book offers a classification of the FET clauses found in more than 400 BITs. Having concluded that the conventional framework is essential to FET, the book turns to the examination of the possible customary character of FET and argues that the view equating FET with the International Minimum Standard is erroneous and it limits the scope of FET. Alternatively, it suggests that the FET standard is an independent standard of customary nature. Then the book looks at the nature of FET, that of being a standard and retains three direct consequences for its meaning: its flexibility, the absence of a fixed content and its evolutionary character. With these three characteristics in mind, it proceeds to the third conceptual framework, the content of FET. Although no fixed content may be given to it, it identifies and develops each one of those situations in which the FET standard has already been applied. Finally, the last conceptual framework aims at discussing the final act of a FET claim, i.e. the amount of compensation awarded. It argues that FETis a standard which balances the interests and behaviours of both the States and the investors, at the stage of compensation.

This book presents comprehensive information on a range of issues in connection with the Fair and Equitable Treatment (FET) standard, with a particular focus on arbitral awards against host developing countries, thereby contributing to the available literature in this area of international investment law. It examines in detail the interpretation of the FET standard of key arbitral awards affecting host developing countries, demonstrating the full range of interpretation approaches adopted by the current investment tribunals. At the same time, the book offers valuable practical guidance for counsels/scholars representing host developing countries in investment arbitration, where balancing the competing interests of the foreign investors and the host developing countries in investment disputes poses a complex challenge. The book puts forward the pressing need for a re-conceptualized interpretation of the FET standard in tune with the developmental issues and challenges faced by host developing countries, recognizing these countries’ particular perspectives as an important and relevant aspect of investment disputes (often ignored by the current investment tribunals), while continuing to ensure reasonable protections for foreign investors and therefore serving the needs of the system as whole. The findings presented here will greatly benefit host developing countries engaged in investment arbitration. In addition, the book offers an insightful guide for all researchers whose work involves investment law and investment arbitration issues.

"In recent years, the concept of fair and equitable treatment has assumed prominence in investment relations between States. While the earliest proposals that made reference to this standard of treatment for investment are contained in various multilateral efforts in the period immediately following World War II, the bulk of the State practice incorporating the standard is to be found in bilateral investment treaties which have become a central feature in international investment relations. In essence, the fair and equitable standard provides a yardstick by which relations between foreign direct investors and Governments of capital-importing countries may be assessed. It also acts as a signal from capital-importing countries, for it indicates, at the very least, a State's willingness to accommodate foreign capital on terms that take into account the interests of the investor in fairness and equity."--Provided by publisher.

Investment protection treaties generally include, in one form or another, the obligation to treat investments fairly and equitably. This book examines the relationship between this obligation and the minimum standard that can be found in customary international law, tracing the history of both concepts, their differences and similarities.

This book examines the interaction between the concept of the ‘minimum standard of treatment’ under custom and the fair and equitable treatment (FET) standard found in the vast majority of BITs. It also analyses whether the FET standard should be considered as a rule of customary international law.

By comprehensively investigating the Fair and Equitable Treatment Standard (FET), this discerning book presents how this standard in investment treaty disputes can be both legally justified and realistically beneficial. It reflects on how FET jurisprudence can be advantageous to both the rule of law and to the legitimacy of the international investment regime.

The book focuses on the substantive protections accorded to investors and investments and on the variations among jurisdictions. Among the many specific issues and topics that arise in the course of the discussion are the following: - problems of transparency and conflict of interest; - the recent growth in IIAs between and among developing nations; - the effect of new model bilateral investment treaties (BITs); - the ability of non-disputing parties to participate in investor-state arbitration; - theories of the interaction of foreign direct investment (FDI) and BITs; - investor-state arbitration as an evasion of public regulatory authority; - the role of investment funds in international investment; - 'fork in the road' provisions; and - institutional versus ad hoc arbitration. International business and other investors will greatly appreciate the in-depth information and insightful guidance in this solidly useful book. It will also be welcomed by jurists and students as a significant milestone in the development of principles in a quickly growing field of practice that is still plagued with inconsistencies.