Guarantees of Legal Stability in the Strict Sense
The aim of this chapter is to inquire whether, and if so, the extent to which, investment treaties contain guarantees of strict legal stability. More specifically, this chapter asks whether investment treaties contain provisions (a) guaranteeing that contractual undertakings vis-à-vis the foreign investment are respected (contractual stability in the strict sense); and/or (b) ensuring that adverse regulatory changes will not be applied to foreign investments (regulatory stability in the strict sense). First, the chapter finds that legal stability in the strict sense does represent one of the guarantees in international investment treaties, provided specifically through investment treaties’ umbrella clauses and stabilization clauses. Second, based on an examination of recent arbitral decisions, the role of legal stability within the FET standard remains at best ambiguous.