Playing Fair: The Meaning of Fair and Equitable Treatment in Biilateral Investment Treaties

Abstract

This article argues that, beyond property rights and protection against expropriation, norms of fairness in international law affect whether foreign direct investment has a positive or negative impact on developing countries. It analyzes the standard of fair and equitable treatment in bilateral investment treaties and argues that this standard should be interpreted to be equivalent to the international law minimum standard of treatment. The article reviews recent decisions of investment arbitration tribunals that have interpreted fairness provisions, and it provides a critique of these decisions and of academic opinions that the fair and equitable treatment standard should provide broader protection than the international law minimum standard. The article also reviews the potential negative effects on developing countries of an overly broad interpretation of the standard of fair and equitable treatment.

Keywords: sustainable development, international investment agreements, bilateral investment agreements, fair and equitable treatment, international minimum standard, developing countries