Introduction
One of the most important pillars of investment
protection under international law is the understanding that a foreign investor
investing in a host state should be treated ‘fairly and equitably.’ The
importance of this notion is supported by the inclusion of the fair and
equitable treatment (FET) standard in most of the International Investment
Agreements (IIAs), as well as its invocation in the vast majority of investment
disputes. However, the concern has been expressed frequently that a broad
interpretation of this usually openly formulated provision has an adverse
impact on the host state’s ‘right to regulate’ in the public interest. These
concerns have been voiced particularly as a result of FET claims in which
investors have challenged a variety of state decisions in publicly sensitive
areas, e.g. renewable energy, waste management, public health issues, and
access to water. In this regard, tribunals have often been criticised for
attaching insufficient weight in their assessment of the FET standard to a host
state’s right to regulate and its duty to fulfil its obligations under other
international treaties, such as human rights and environmental treaties.More...