The Global South and State Aid Schemes: The Case of Legitimate Expectations for Investors

Transnational Dispute Management, 2020

Posted: 14 Jul 2020

See all articles by Dr. Yulia Levashova

Dr. Yulia Levashova

Nyenrode University

Lyndsey Thomsin

Utrecht University, School of Law

Date Written: February 28, 2020


The concept of legitimate expectations is well known to a number of domestic legal systems, as well as being recognised in public international law and European law. The parallel made in this paper is between the interpretation and application of the notion of legitimate expectations under international investment law and state aid law of the European Union (EU).

This comparison is especially relevant considering a number of investment decisions, where tribunals found the existence of an investor’s legitimate expectations in cases involving the withdrawal of state aid schemes that led or contributed to the decision that a host state violated the fair and equitable treatment (FET) standard under an International Investment Agreement (IIA). Some of these investment decisions, e.g. Micula v Romania, have revealed a growing tension between the application and interpretation of the concept of legitimate expectations as a part of the FET standard under IIAs and as a general principle of law under the EU law on state aid. On a large scale, the latter tension is a part of the broader discussion on the relationship between EU law and the intra-EU Bilateral Investment Treaties (BITs). It concerns the fundamental issue of compatibility of the EU law and intra-EU BITs. This paper, however, does not address the latter inquiry, it is limited to the specific notion of the assessment of the legitimate expectations, focusing on the content of this standard, hereby attempting to provide a parallel between investment jurisprudence and case law of the EU courts.

The specific focus of this paper is on the Global South. Although, the EU state aid rules technically apply to the EU Member States, a foreign investor might be confronted with the EU state aid rules while conducting business in the EU and relying upon incentives provided by one of the EU Member States. Therefore, the implications of the state aid rules on investors from Global South countries in relation to the protection of legitimate expectations are discussed in this paper.

Keywords: Legitimate Expectations, ISDS, Competition Law, State Aid

Suggested Citation

Levashova, Yulia and Thomsin, Lyndsey, The Global South and State Aid Schemes: The Case of Legitimate Expectations for Investors (February 28, 2020). Transnational Dispute Management, 2020, Available at SSRN:

Yulia Levashova (Contact Author)

Nyenrode University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC

Lyndsey Thomsin

Utrecht University, School of Law ( email )


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