File #2441: "2018_Book_TheFairAndEquitableTreatmentFE.pdf"
Text
1|Foreword|7
1|Preface|10
1|Acknowledgements|11
1|Contents|14
1|About the Author|19
1|Abbreviations|20
1|Table of Cases|22
1|Table of Treaties|26
1|1 Introduction|29
2|1.1 Introduction|29
2|1.2 Investment Disputes Against Developing Countries|31
2|1.3 The FET Standard|37
2|1.4 Scholarship on the FET Standard|38
2|1.5 The Importance of the Arbitrators’ Discretionary Powers in Interpreting FET|42
2|1.6 Conclusion|48
2|References|54
1|2 The Historical Development of the FET Standard in International Investment Treaties|58
2|2.1 Introduction|58
3|2.1.1 Treaties of Friendship, Commerce, and Navigation (FCNs) During the Eighteenth Century—The Starting Point of Investment Agreements|59
3|2.1.2 The First Appearance of the FET Standard—The Havana Charter 1948|59
3|2.1.3 The Bogota Agreement 1948|60
3|2.1.4 Introducing FET in US FCN Treaties After the Havana Charter|61
3|2.1.5 The Abs-Shawcross Draft Convention 1959|61
3|2.1.6 The First BIT in 1959 and Subsequent Wave of BITs|62
3|2.1.7 FCNs in the 1960s|63
3|2.1.8 OECD Draft Convention of the Protection of Foreign Property, 1963 and 1967 and Its Influence|64
3|2.1.9 World Politics in the 1970s and Its Influence on Investment Treaties and the FET Standard|67
3|2.1.10 The UN Documents of 1983|68
3|2.1.11 The MIGA Convention 1985|69
3|2.1.12 The ASEAN Treaty 1987|70
3|2.1.13 The Lomé IV 1990|70
3|2.1.14 The World Bank Guidelines 1992|71
3|2.1.15 NAFTA, 1992|71
3|2.1.16 The Energy Charter Treaty, 1994|72
3|2.1.17 MERCOSUR|73
3|2.1.18 The Pacific Basin Charter on International Investments 1995|73
3|2.1.19 OECD Draft Negotiating Text for MAI 1998|74
3|2.1.20 Comprehensive Free Trade Agreement (CETA) 2016|74
3|2.1.21 Treaties with no FET|75
2|2.2 The FET Standard in International Investment Treaties as It Stands Today|75
2|2.3 Conclusion|77
2|References|78
1|3 Different Constructions of the FET Standard in Investment Treaties|80
2|3.1 Introduction|80
2|3.2 Different Construction of FET in Investment Treaties|81
2|3.3 FET Minus|82
3|3.3.1 Minimum Standard Under International Law or Customary International Law|83
3|3.3.2 FET as a Standard Combined with International Law Generally|85
3|3.3.3 FET as a Standard Combined with Customary International Law|87
3|3.3.4 FET and Customary International Law: The NAFTA Saga|87
3|3.3.5 Minimum Standard Under International Law/Customary International Law in Investment Law Context|91
3|3.3.6 Other FET Minus Provisions Which Limit the Scope of the Standard|92
2|3.4 Simple FET|95
3|3.4.1 The Role of the Minimum Standard in Interpreting Simple FET|97
2|3.5 FET Plus|99
2|3.6 Conclusion|102
2|References|103
1|4 Developing Countries in International Investment Arbitration|106
2|4.1 Introduction|106
2|4.2 Country Classification and Developing Countries in International Investment Arbitration|106
3|4.2.1 Classification of Countries by Different International Organisations|107
2|4.3 Disparities and Differences Across Developing Countries and the Concept of Development|115
2|4.4 Perspectives of Host Developing Countries in Investment Disputes|118
2|4.5 Conclusion|121
2|References|122
1|5 Current Arbitral Practice Relating to Political and Socio-political Circumstances in Host Developing Countries and Countries in Transition: FET Standard in Context|125
2|5.1 Introduction|125
2|5.2 Political Circumstances|125
3|5.2.1 Bayindir Insaat Turizm—Long History of Political Turmoil in the Host Developing Country|126
3|5.2.2 Toto—Political Instability in Post-civil War Context|128
3|5.2.3 AMT—Political Instability Can Reduce Compensation but not Liability!|129
3|5.2.4 Pantechniki—Political Unrest of Large Magnitude|131
2|5.3 Socio-political Circumstances of the Country Relevant to the Investment Dispute|134
3|5.3.1 Mamidoil—No Violation of FET Standard if Regulatory Change Is for Public Policy|134
3|5.3.2 EDF–FET Standard Do not Serve as Insurance Policy for Regulatory Change|136
3|5.3.3 GAMI—Lack of Administrative Capacity not a Defence|138
3|5.3.4 Tecmed—Response to Public Interest and Foreign Investor’s Legitimate Expectation from a Developing Country (the TECMED Test)|141
3|5.3.5 Duke Energy—Socio-political Circumstances as Ground for Foreign Investor’s Legitimate Expectation|143
3|5.3.6 Azurix—State Action in Response to Public Health Safety|144
2|5.4 Countries in Transition|147
3|5.4.1 Parkerings–Compagniet—Change of Regulatory Framework Due to Transition not a Violation of the FET Standard|148
3|5.4.2 Nagel—Investor’s Duty to Investigate Before Investment in Countries in Transition|150
3|5.4.3 Generation Ukraine—Economic Condition of the Country Due to Its Transitory Status as a Ground for Legitimate Expectation of the Foreign Investor|151
3|5.4.4 Tokios Tokelés—Volatility and Fragmentation in Political Life of the Host Country Due to Transitory Status|152
3|5.4.5 Genin—Investors Be Aware (‘Caveat Investor’)! While Investing in Countries in Transition|153
3|5.4.6 Lemire (Decision on Jurisdiction and Liability)—Transitory Status not a Ground for Defence of Breach of FET Standard|155
3|5.4.7 Lemire (Award)—Transitory Status a Ground to Reduce Damages but not Liability|156
3|5.4.8 Alpha—Transitory Status a Ground of Calculating the Rate of Interest|158
3|5.4.9 Kardassopoulos—Transitory Status not a Defence for Non-performance of FET Obligation|159
2|5.5 Conclusion|161
2|References|161
1|6 Current Arbitral Practice Relating to Economic Crises in Host Developing Countries: The FET Standard in Context|165
2|6.1 Introduction|165
2|6.2 Economic Crisis and Its Impact Upon Developing Countries|166
2|6.3 Arbitral Awards Involving Economic Crises in the Host Developing Countries|169
3|6.3.1 CMS–Economic Crisis Acknowledged But Rejected!|170
3|6.3.2 LGampE (Decision on Liability)–Defence of Necessity for Economic Crisis Partially Accepted|174
3|6.3.3 Enron–Country Risk Cannot Be a Plea for Economic Crisis in Host Developing Country|179
3|6.3.4 Sempra–Effects of the Economic Crisis at the Valuation Stage Considered|180
3|6.3.5 Sempra Ad Hoc Committee on Annulment Proceeding—(Finally!) Defence of Necessity for Economic Crisis Accepted|181
3|6.3.6 AWG–Economic Crisis Acknowledged (Again) but not Accepted|183
3|6.3.7 Waste Management No. 2—Economic Crisis in Mexico Considered as Ground for Exemption for Breach of FET Standard|187
3|6.3.8 j Olguín–Investors Be Aware (Caveat Investor)|188
3|6.3.9 Himpurna–Economic Crisis in Indonesia Considered for Valuation of Loss of Profits|190
2|6.4 Conclusion|191
2|References|193
1|7 Key Problems in the Interpretation of the FET Standard by Current Investment Tribunals|196
2|7.1 Introduction|196
2|7.2 Key Problems in the Interpretation of the FET Standard by Current Arbitral Tribunals|197
3|7.2.1 Inconsistency|198
3|7.2.2 Inadequate Approach to the Substantive Issues of the Host Developing Countries Relevant to the Investment Disputes|201
2|7.3 Conclusion|208
2|References|209
1|8 Conclusion|211
2|8.1 The Perspectives of Host Developing Countries in an Investment Dispute Context|212
2|8.2 The Perspectives of Host Developing Countries in Investment Treaties|216
2|References|221
1|Index|223
1|Preface|10
1|Acknowledgements|11
1|Contents|14
1|About the Author|19
1|Abbreviations|20
1|Table of Cases|22
1|Table of Treaties|26
1|1 Introduction|29
2|1.1 Introduction|29
2|1.2 Investment Disputes Against Developing Countries|31
2|1.3 The FET Standard|37
2|1.4 Scholarship on the FET Standard|38
2|1.5 The Importance of the Arbitrators’ Discretionary Powers in Interpreting FET|42
2|1.6 Conclusion|48
2|References|54
1|2 The Historical Development of the FET Standard in International Investment Treaties|58
2|2.1 Introduction|58
3|2.1.1 Treaties of Friendship, Commerce, and Navigation (FCNs) During the Eighteenth Century—The Starting Point of Investment Agreements|59
3|2.1.2 The First Appearance of the FET Standard—The Havana Charter 1948|59
3|2.1.3 The Bogota Agreement 1948|60
3|2.1.4 Introducing FET in US FCN Treaties After the Havana Charter|61
3|2.1.5 The Abs-Shawcross Draft Convention 1959|61
3|2.1.6 The First BIT in 1959 and Subsequent Wave of BITs|62
3|2.1.7 FCNs in the 1960s|63
3|2.1.8 OECD Draft Convention of the Protection of Foreign Property, 1963 and 1967 and Its Influence|64
3|2.1.9 World Politics in the 1970s and Its Influence on Investment Treaties and the FET Standard|67
3|2.1.10 The UN Documents of 1983|68
3|2.1.11 The MIGA Convention 1985|69
3|2.1.12 The ASEAN Treaty 1987|70
3|2.1.13 The Lomé IV 1990|70
3|2.1.14 The World Bank Guidelines 1992|71
3|2.1.15 NAFTA, 1992|71
3|2.1.16 The Energy Charter Treaty, 1994|72
3|2.1.17 MERCOSUR|73
3|2.1.18 The Pacific Basin Charter on International Investments 1995|73
3|2.1.19 OECD Draft Negotiating Text for MAI 1998|74
3|2.1.20 Comprehensive Free Trade Agreement (CETA) 2016|74
3|2.1.21 Treaties with no FET|75
2|2.2 The FET Standard in International Investment Treaties as It Stands Today|75
2|2.3 Conclusion|77
2|References|78
1|3 Different Constructions of the FET Standard in Investment Treaties|80
2|3.1 Introduction|80
2|3.2 Different Construction of FET in Investment Treaties|81
2|3.3 FET Minus|82
3|3.3.1 Minimum Standard Under International Law or Customary International Law|83
3|3.3.2 FET as a Standard Combined with International Law Generally|85
3|3.3.3 FET as a Standard Combined with Customary International Law|87
3|3.3.4 FET and Customary International Law: The NAFTA Saga|87
3|3.3.5 Minimum Standard Under International Law/Customary International Law in Investment Law Context|91
3|3.3.6 Other FET Minus Provisions Which Limit the Scope of the Standard|92
2|3.4 Simple FET|95
3|3.4.1 The Role of the Minimum Standard in Interpreting Simple FET|97
2|3.5 FET Plus|99
2|3.6 Conclusion|102
2|References|103
1|4 Developing Countries in International Investment Arbitration|106
2|4.1 Introduction|106
2|4.2 Country Classification and Developing Countries in International Investment Arbitration|106
3|4.2.1 Classification of Countries by Different International Organisations|107
2|4.3 Disparities and Differences Across Developing Countries and the Concept of Development|115
2|4.4 Perspectives of Host Developing Countries in Investment Disputes|118
2|4.5 Conclusion|121
2|References|122
1|5 Current Arbitral Practice Relating to Political and Socio-political Circumstances in Host Developing Countries and Countries in Transition: FET Standard in Context|125
2|5.1 Introduction|125
2|5.2 Political Circumstances|125
3|5.2.1 Bayindir Insaat Turizm—Long History of Political Turmoil in the Host Developing Country|126
3|5.2.2 Toto—Political Instability in Post-civil War Context|128
3|5.2.3 AMT—Political Instability Can Reduce Compensation but not Liability!|129
3|5.2.4 Pantechniki—Political Unrest of Large Magnitude|131
2|5.3 Socio-political Circumstances of the Country Relevant to the Investment Dispute|134
3|5.3.1 Mamidoil—No Violation of FET Standard if Regulatory Change Is for Public Policy|134
3|5.3.2 EDF–FET Standard Do not Serve as Insurance Policy for Regulatory Change|136
3|5.3.3 GAMI—Lack of Administrative Capacity not a Defence|138
3|5.3.4 Tecmed—Response to Public Interest and Foreign Investor’s Legitimate Expectation from a Developing Country (the TECMED Test)|141
3|5.3.5 Duke Energy—Socio-political Circumstances as Ground for Foreign Investor’s Legitimate Expectation|143
3|5.3.6 Azurix—State Action in Response to Public Health Safety|144
2|5.4 Countries in Transition|147
3|5.4.1 Parkerings–Compagniet—Change of Regulatory Framework Due to Transition not a Violation of the FET Standard|148
3|5.4.2 Nagel—Investor’s Duty to Investigate Before Investment in Countries in Transition|150
3|5.4.3 Generation Ukraine—Economic Condition of the Country Due to Its Transitory Status as a Ground for Legitimate Expectation of the Foreign Investor|151
3|5.4.4 Tokios Tokelés—Volatility and Fragmentation in Political Life of the Host Country Due to Transitory Status|152
3|5.4.5 Genin—Investors Be Aware (‘Caveat Investor’)! While Investing in Countries in Transition|153
3|5.4.6 Lemire (Decision on Jurisdiction and Liability)—Transitory Status not a Ground for Defence of Breach of FET Standard|155
3|5.4.7 Lemire (Award)—Transitory Status a Ground to Reduce Damages but not Liability|156
3|5.4.8 Alpha—Transitory Status a Ground of Calculating the Rate of Interest|158
3|5.4.9 Kardassopoulos—Transitory Status not a Defence for Non-performance of FET Obligation|159
2|5.5 Conclusion|161
2|References|161
1|6 Current Arbitral Practice Relating to Economic Crises in Host Developing Countries: The FET Standard in Context|165
2|6.1 Introduction|165
2|6.2 Economic Crisis and Its Impact Upon Developing Countries|166
2|6.3 Arbitral Awards Involving Economic Crises in the Host Developing Countries|169
3|6.3.1 CMS–Economic Crisis Acknowledged But Rejected!|170
3|6.3.2 LGampE (Decision on Liability)–Defence of Necessity for Economic Crisis Partially Accepted|174
3|6.3.3 Enron–Country Risk Cannot Be a Plea for Economic Crisis in Host Developing Country|179
3|6.3.4 Sempra–Effects of the Economic Crisis at the Valuation Stage Considered|180
3|6.3.5 Sempra Ad Hoc Committee on Annulment Proceeding—(Finally!) Defence of Necessity for Economic Crisis Accepted|181
3|6.3.6 AWG–Economic Crisis Acknowledged (Again) but not Accepted|183
3|6.3.7 Waste Management No. 2—Economic Crisis in Mexico Considered as Ground for Exemption for Breach of FET Standard|187
3|6.3.8 j Olguín–Investors Be Aware (Caveat Investor)|188
3|6.3.9 Himpurna–Economic Crisis in Indonesia Considered for Valuation of Loss of Profits|190
2|6.4 Conclusion|191
2|References|193
1|7 Key Problems in the Interpretation of the FET Standard by Current Investment Tribunals|196
2|7.1 Introduction|196
2|7.2 Key Problems in the Interpretation of the FET Standard by Current Arbitral Tribunals|197
3|7.2.1 Inconsistency|198
3|7.2.2 Inadequate Approach to the Substantive Issues of the Host Developing Countries Relevant to the Investment Disputes|201
2|7.3 Conclusion|208
2|References|209
1|8 Conclusion|211
2|8.1 The Perspectives of Host Developing Countries in an Investment Dispute Context|212
2|8.2 The Perspectives of Host Developing Countries in Investment Treaties|216
2|References|221
1|Index|223