3 Fair And Equitable Treatment

Abstract

Like other bilateral investment treaties (BITs), Chinese BITs establish a set of general standards of treatment accorded to foreign investors by the host state. The most commonly found general standards of treatment include fair and equitable treatment (FET), (full) protection and security (PNS), most favoured nation treatment (MFN), and national treatment (NT). The first two belong to the group of non-contingent standards (or so-called “absolute standard of treatment”), whilst the latter two are forms of contingent standards (or “relative standards of treatment”). Absolute standards do not depend on treatment granted to other investors. In contrast, the relative standards are contingent on treatment given to other categories of investors, nationals of the host state in the case of NT and investors from third states for the MFN. This chapter begins with an examination of the FET standard, focusing on the different approaches of interpretations that have been developed in theory and in arbitration practice. It then analyzes the standard under Chinese BITs and assesses the implications of its standard format and any variations.