Fair and Equitable Treatment standard in an International Investment Law, by Eugene Duhovnikoff BA/LLB

Fair and Equitable Treatment is a standard guaranteed under the mist of the bilateral investment treaties. Some commentators might argue that this standard is an extension of standards found in customary international law (such as the minimum standard of treatment in customary international law), however many respected authors argue that this is an additional standard and it goes far beyond the minimum standard and affords protection to a greater extents according to a much more objective standard.[1]

For example P.T. Mychlinski says[2]: ….a reference to fair and equitable treatment should not be read as a reference to international minimum standards. If the insertion is to assimilate the two concepts, this should be made explicit in the test. Otherwise, the fair and equitable treatment standards should stand down on its own. If that is indeed the case and the above mentioned standard goes beyond simple customary international law then it is necessary to determine how far it goes! Some decisions suggest that it can be a part of the Constant Protection and Security Standard which is often found in bilateral agreements.

Other decisions seem to hold it as the separate standard which obliges a host state to provide a secure investment setting. In any case if there is some sort of discrimination based on unjustified grounds, including a disregard of due process of law[3], then the fair and equitable standard clauses can be enforced against the host State.



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[1] F. A . Mann, British Treaties for the Promotion and Protection of Investments, 52 The British Year Book of International Law 1981 241 at 244.

[2] P. T. Munchlinski, Multinational Enterprises and the Law 1999 at 626.

[3] Elettronica Sicula SpA (ELSI) (USA v Italy), ICJ Reports 1989.

Reeves/Duhovnikoff & Associates Ltd. 2017