Investor-State Arbitration (Oxford University Press)

By: Christopher F. Dugan; Don Wallace, Jr.; Noah D. Rubins; Borzu Sabahi

Excerpt from Chapter XVII: “Fair and Equitable Treatment” and “Full Protection and Security”

Among the most discussed standards of protection that investment treaties provide are “fair and equitable” and “full protection and security.” These concepts and their relation to the minimum standard of treatment of aliens under customary international law have inspired significant debate. This discussion has mainly centered on whether these standards provide only as much protection as foreign investors receive in their capacity as aliens under the customary international law minimum standard of protection of aliens, or whether they offer a higher level of protection. In a 2001 interpretive note, the Free Trade Commission of the North American Free Trade Agreement (NAFTA) answered this question in the specific context of NAFTA, stating that fair and equitable treatment and full protection and security as codified in Article 1105 of that treaty provide no more protection than that available under customary international law. The Free Trade Commission’s articulation is binding only with respect to NAFTA, however, the discussion has continued unabated in relation to other investment treates.