Recovering 'Protection and Security': The Treaty Standard’s Obscure Origins, Forgotten Meaning, and Key Current Significance
63 Pages Posted: 10 Jul 2012 Last revised: 21 Nov 2012
Date Written: June 25, 2012
Among the most persistent controversies in international investment law is the nature of the “protection and security” standard found in most investment treaties. Some tribunals contend that protection and security requires nothing more than physical protection of covered investments, while others maintain that it requires legal security as well. Some insist that the protection and security standard is entirely distinct from the fair and equitable treatment standard that is often expressed in the same sentence or paragraph, while others effectively conflate the two. This uncertainty surrounding protection and security has led to a plethora of inconsistent arbitral awards, which are undermining the legitimacy of investment treaty arbitration. This Article seeks to resolve these controversies by employing the full range of interpretive tools offered by the Vienna Convention on the Law of Treaties. It explores the text, structure and purpose of the relevant treaties, identifies a norm of “protection and security” in customary international law, and traces its evolution over time. This inquiry reveals that treaty drafters have long understood protection and security as requiring a specific — and limited — form of legal security. It also reveals that the fair and equitable treatment standard was derived from the same customary norm, but that the two standards have evolved to become conceptually distinct in important ways. The Article then employs the interpretation suggested by this analysis to critique modern treaty jurisprudence and the current U.S. approach to drafting investment treaties.
Keywords: protection and security, fair and equitable treatment, international minimum standard, investment, arbitration, treaties, vienna convention on the law of treaties, vclt, customary international law, legal history
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