scholarly journals Preventing the Regulatory Chill of International Investment Law and Arbitration

2020 ◽  
Vol 9 (1) ◽  
pp. 85
Author(s):  
Atif M. Alenezi
Keyword(s):  
International Investment ◽  
Foreign Investors ◽  
International Investment Law ◽  
Regulatory Changes ◽  
Resolution System ◽  
Fair And Equitable Treatment ◽  
Investment Law ◽  
Foreign Corporations ◽  
Equitable Treatment ◽  
Legitimacy Crisis

International investment law has increasingly come under attack because it does not put host states on par with foreign investors. Foreign investors can evoke broad investment rights and pursue investment arbitration. The threat of substantial arbitral awards can result in host states not enacting policies, regulations, laws or reaching decisions, despite them being needed in order to protect a variety of important public interests. The concern is, therefore, that international investment law, including the investor-state dispute resolution system, causes a regulatory chill. The paper examines how the asymmetric relationship between foreign investors and host states can be remedied, so that trust in international investment law is strengthened and its legitimacy crisis is overcome. One core issue with international investment law is that the customary international minimum standard and its therein subsumed full protection and security, and fair and equitable treatment and compensation principles are inherently vague, thereby contributing to the overprotection of foreign investors. Arbitral cases further highlight how regulatory changes can result in host states incurring liability and thus enable foreign corporations to shift potential costs and risks. International, and national solutions to prevent the regulatory chill of international investment agreements are spelled out.

scholarly journals Fair and Equitable Treatment Between the International and National Rule of Law

2019 ◽  
Vol 20 (4) ◽  
pp. 513-552 ◽  
Author(s):  
Velimir Živković
Keyword(s):  
Decision Making ◽  
Rule Of Law ◽  
International Investment ◽  
The Rule Of Law ◽  
International Investment Law ◽  
Investment Protection ◽  
National Rule ◽  
Fair And Equitable Treatment ◽  
Investment Law ◽  
Equitable Treatment

Abstract Promoting the rule of law is a potentially strong legitimating narrative for international investment law. Illustrating the interlinkage, the ubiquitous ‘fair and equitable treatment’ (FET) standard embodies distinctly rule of law requirements. But these requirements remain open-textured and allow understanding their meaning in either more ‘international’ or ‘national’ way. An ‘international’ understanding – detached from the host State’s vision on how the rule of law should look like – should remain dominant. But I argue that decision-making under the FET standard should also involve a systematic engagement with how these requirements would be understood in the host State’s law and how they were complied with from that perspective. Whilst not determinative for establishing a breach, this assessment better respects the expectations of the parties, strengthens the persuasiveness of findings and helps enhance the national rule of law as a key contributor to the ultimate goal of investment protection – economic development.

scholarly journals Fair and Equitable Treatment and Investor’s Due Diligence Under International Investment Law

2020 ◽  
Vol 67 (2) ◽  
pp. 233-255
Author(s):  
Yulia Levashova
Keyword(s):  
International Investment ◽  
Due Diligence ◽  
International Investment Law ◽  
Host State ◽  
Fair And Equitable Treatment ◽  
Political Background ◽  
Legitimate Expectations ◽  
Investment Law ◽  
The Stability ◽  
Equitable Treatment

Abstract The investor’s due diligence has become a significant factor in determining whether the legitimate expectations of an investor give rise to protection under the FET standard. This is especially relevant when an investor’s claim for the protection of its legitimate expectations is based on the stability of a regulatory framework. The investor’s due diligence in the context of the FET standard goes beyond the risk-based business due diligence performed by a foreign investor for its own benefit. It has implications for a state’s right to regulate in the public interest and a broader notion of business responsibilities. Investors are expected to conduct proper due diligence before investing in a host state by demonstrating their reasonable efforts to collect information about the rules and regulations that are pertinent to the proposed investment. In some cases, due diligence extends to an investor’s duty to assess the possible risks related to the broader economic situation and socio-political background of a host state. Focusing on the recent renewable energy awards, this article analyses and clarifies the role of due diligence in the context of the FET standard, as well as its potential application for asserting responsible business conduct in the broader framework of international investment law.

The Application of the Principle of Proportionality to Assess Compensation: Some Reflections Arising from the Case of Joseph Charles Lemire v. Ukraine

2014 ◽  
Vol 13 (2) ◽  
pp. 199-222
Author(s):  
Sondra Faccio
Keyword(s):  
Case Law ◽  
International Investment ◽  
International Human Rights Law ◽  
Human Rights Law ◽  
International Investment Law ◽  
Investment Treaty ◽  
Fair And Equitable Treatment ◽  
Investment Law ◽  
Principle Of Proportionality ◽  
Equitable Treatment

In the last few years, the principle of proportionality has appeared with a certain frequency in international investment case law: arbitrators have employed it to determine whether the State’s regulatory measure under scrutiny represents a form of indirect expropriation, to assess violations of the fair and equitable treatment (‘fet’) standard, to counterbalance competing obligations drawn from international investment law and international human rights law, and to assess compensation. This article will focus on the so-called “quantum phase” – the part of the award devoted to the assessment of the monetary compensation due to the foreign investor for the breach of the investment treaty provision – and will discuss whether the principle of proportionality can effectively play a role in the assessment of compensation. The work will start from the analysis of the case of Joseph Charles Lemire v. Ukraine, where arbitrators expressly resorted to proportionality to verify whether the indemnity awarded to the claimant for the breach of the fet standard was adequate in light of the specific characteristics of the investment lato sensu and the investor, to then approach the issue of proportionality more in detail.

Equity-Based Decision-Making and the Fair and Equitable Treatment Standard: Lessons From the Argentine Investment Disputes – Part I

2012 ◽  
pp. 210-255
Author(s):  
Srilal M. Perera
Keyword(s):  
Decision Making ◽  
International Law ◽  
International Investment ◽  
International Investment Law ◽  
Treatment Standard ◽  
International Investment Agreements ◽  
Fair And Equitable Treatment ◽  
Investment Law ◽  
Equitable Treatment ◽  
Investment Agreements

In Part I of this two-part article the author examines the foundations for equity-based decision-making under international law and their relevance to resolving contemporary investment disputes based on the Fair and Equitable Treatment standard (FET standard). He contends that equity-based decision-making in the past has been rare, and in such instances adjudicators have been extremely restrained because of the propensity for subjective judgments. However, in the modern day application of equitable considerations in a large number of investments disputes before the International Centre for Settlement of Investment Disputes (ICSID) seeking relief based on the FET standard, the decisions have mostly been inconsistent and conflicting, leading often to inexplicable and excessive remedies. In no other line of cases has this trend been more demonstrated than in the investment disputes following the Argentine economic crisis. They point more to the serious anomalies and omissions and interpretive issues in International Investment Agreements (mostly BITs) which require remedial measures if international investment law itself is to advance.

scholarly journals If One Thai Bottle Should Accidentally Fall: Health Information, Alcohol Labelling and International Investment Law

2020 ◽  
Vol 21 (5) ◽  
pp. 674-697
Author(s):  
Andrew D. Mitchell ◽  
Paula O’Brien
Keyword(s):  
Alcoholic Beverage ◽  
International Investment ◽  
Alcoholic Beverages ◽  
Health Warnings ◽  
International Investment Law ◽  
Fair And Equitable Treatment ◽  
Investment Agreement ◽  
Investment Law ◽  
Words And Images ◽  
Equitable Treatment

Abstract This article considers the issues that would arise in a dispute under an international investment agreement about two innovative, public health alcohol labelling policies pursued by Thailand. One measure proposes graphic health warnings on alcoholic beverages. The other measure places extensive restrictions on the words and images that producers can use on alcoholic beverage labels. We focus on the consistency of these measures with the obligations of fair and equitable treatment and indirect expropriation. We place particular emphasis on the evidence that would likely be needed to defend these measures, including the areas where the science is somewhat tentative and might therefore pose problems for ‘first-mover’ States like Thailand. We conclude that there is a good chance that the warnings measure would be found compatible with investment law obligations. However, some aspects of the marketing measure are more vulnerable to findings of inconsistency.

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