The Vague Meaning of Fair and Equitable Treatment Principle in Investment Arbitration and New Generation Clarifications

Abstract

This paper focuses on the evolution and conceptual development of the Fair and Equitable Treatment (FET) principle, a standard commonly found in international investment agreements (IIAs) and frequently invoked in arbitral disputes between foreign investors and host states. It aims at explaining how the latest free trade agreements such as CETA, TTIP and TPP contribute to the transformation of a contingent and vague notion into a normative legal rule. To do so, the paper gives a historical account of how fair treatment of foreigners evolved over time, and how investment arbitration has constructed its slowly emerging substantive framework. It chiefly argues that explicit clarifications on the constituent elements of the FET principle, as has been the case in CETA, would work in favour of coherent interpretation and a better understanding of what this principle should aim at capturing.