Independent or synonymous?

The Fair and Equitable Treatment Standard herein stated as FET is an International Investment treatment applicable to states in their relations inter se and to relations between states and foreign investors. It is made available to a foreign investor by the host state to protect his investment in a foreign country regardless of the treatment given to its own national investors. However, since its inception, it has always had the problem of lack of a clear universal definition. To address this problem, one of the main approaches that some states have taken is to link the FET standard to the Minimum Standard of Treatment(MST) under Customary International Law(CIL). However, the big question that follows from this approach is whether the FET is truly just MST in disguise, or whether it stands alone. This paper explores the nature of FET standard, arguing that it is not merely a reflection of MST but an independent evolving standard with broader elements and its own identity in International Investment Law.

1.0 Introduction

The Fair and Equitable Treatment standard has been considered a vague provision that lacks a definition. The lack of a clear universal meaning has left more room for interpretation. What does it mean for a government action to be ‘Fair’ and ‘Equitable’? Fair to whom and in what sense? Equitable in relation to which standard of reference? Should one look to domestic law, customary practice, the investor’s subjective expectations or the arbitrator’s own personal sense of fairness?1 These among many others, are questions that have been asked in attempts to find the meaning of the FET standard. The standard is interpreted on a case by case basis by arbitrators hailing from different backgrounds...Read more