States’ Reassertion of Control Over International Investment Law - (Re)Defining ‘Fair and Equitable Treatment’ and ‘Indirect Expropriation’

in Andreas Kulick (ed.), States’ Reassertion of Control over International Investment Agreements and International Investment Treaty Dispute Settlement (Cambridge: Cambridge University Press, 2016)

Grotius Centre Working Paper 2016/55-IEL

Leiden Law School Research Paper

18 Pages Posted: 8 Oct 2016

See all articles by Eric De Brabandere

Eric De Brabandere

Leiden University - Grotius Centre for International Legal Studies

Date Written: October 3, 2016

Abstract

This chapter investigates how States, through the definitions of the FET standard and the prohibition of indirect expropriation have sought to assert or reassert control over investment law. Indeed, there are clear differences in the formulation of the FET standard and the prohibition of indirect expropriation. ‘Western Hemisphere’-BITs used in European States tend to include FET as a stand-alone standard of treatment, while North-American investment treaties, as exemplified inter alia in the NAFTA and the US Model BIT 2012, tend to equate FET with the customary norm on the minimum standard of treatment. Similarly, distinctions in the formulation of what constitutes a prohibited indirect expropriation are widespread, and here again the contrast between the practice of North-American treaties and those based on the ‘Western Hemisphere’-BITs show that the former tend to more precisely define what constitutes a prohibited indirect expropriation and which regulatory measures cannot amount to an expropriation, while the latter more generally contain a generic definition of the term. These differences highlight one important issue: States generally have full discretion in how to formulate these provisions in their treaty. And while ‘tradition’ has in the past influenced the choice of one model or formulation over the other, increasingly policy-related arguments now define the precise formulation of FET and the prohibition of indirect expropriation, provided of course that all States parties to the treaty agree on the terminology.

Whether or not States have, in doing so, in fact reasserted control or simply asserted control is left aside, and is being discussed elsewhere in this volume. Indeed, the use of the term ‘reasserting’ implies that somehow States had ‘lost’ control, on the one hand, and that they had control before on the other. These assumptions may well not be as straightforward as assumed. As said, however, I leave such questions aside in the context of this chapter, instead I will focus on the recent treaty practice of States in showing how States have – to use a more neutral term – reacted against the application and interpretation of FET and indirect expropriation by arbitral tribunals in the abundant case-law that exists in that respect.

Keywords: investment law, investment arbitration, fair and equitable treatment, expropriation

Suggested Citation

De Brabandere, Eric, States’ Reassertion of Control Over International Investment Law - (Re)Defining ‘Fair and Equitable Treatment’ and ‘Indirect Expropriation’ (October 3, 2016). in Andreas Kulick (ed.), States’ Reassertion of Control over International Investment Agreements and International Investment Treaty Dispute Settlement (Cambridge: Cambridge University Press, 2016); Grotius Centre Working Paper 2016/55-IEL; Leiden Law School Research Paper. Available at SSRN: https://ssrn.com/abstract=2846998 or http://dx.doi.org/10.2139/ssrn.2846998

Eric De Brabandere (Contact Author)

Leiden University - Grotius Centre for International Legal Studies ( email )

Leiden University Law Faculty
P.O. Box 9520
Leiden, 2300 RA
Netherlands
+31 71 527 7399 (Phone)
+31 71 527 7509 (Fax)

HOME PAGE: http://www.law.leiden.edu/organisation/publiclaw/publicinternationallaw/staff/eric-de-brabandere-.ht

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
215
Abstract Views
770
rank
149,438
PlumX Metrics