Fair and Equitable Treatment

Its Interaction with the Minimum Standard and Its Customary Status


The fair and equitable treatment (‘FET’) standard is a type of protection found in BITs which has become in the last decades one of the most controversial provisions examined by arbitral tribunals. This book first examines the interaction between the ‘minimum standard of treatment’ (MST) and the FET standard and the question why States started referring to the former in their BITs. It also addresses the question whether the FET should be considered as an autonomous standard of protection under BITs. This book also examines the controversial proposition that the FET standard should now be considered as a rule of customary international law. I will show that while the practice of States to include FET clauses in their BITs can be considered as general, widespread and representative, it remains that it is not uniform and consistent enough for the standard to have crystallised into a customary rule. States also lack the necessary opinio juris when including the clause in their BITs.

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Patrick Dumberry, Ph.D. (2006), Graduate Institute for International Studies, Geneva, is Professor at the University of Ottawa. He is the author of more than 60 publications, including The Fair and Equitable Treatment Standard under International Law: A Guide to NAFTA Article 1105 Case Law (Wolters Kluwer, 2013).
Fair and Equitable Treatment: Its Interaction with the Minimum Standard and Its Customary Status
Patrick Dumberry
 General Introduction
 I The Interaction between the ‘Minimum Standard of Treatment’ and the FET
 1.1 The Concept of the MST and Its Customary Status
 1.2 The Historical Foundation of the MST
 1.3 The Challenge to Existing Customary Rules, Including the MST, Led by Newly Independent States in the 1960s and 1970s
 1.4 The New Phenomenon of ‘Treatification’ in the 1990s
 2.1 Early Appearance of the Standard in Multilateral Instruments and Current Overwhelming Presence in BITs
 2.2 Why Did States Start Referring to the FET Standard Instead of the MST in Their Investment Treaties?
 2.3 FET Should be Considered as a Treaty Standard Independent from the MST, Except in Specific Situations
 3.1 The Broad Interpretation Given to FET Clauses by Arbitral Tribunals and the Importance They Gave to the Terms Used under These Provisions
 3.2 States’ Reactions to These Awards
 3.3 CETA: the Ultimate Detailed FET Clause
 II Has the FET Standard Become a Rule of Customary International Law?
 3.1 Introductory Remarks on the Phenomenon of Custom
 3.2 How Can Provisions Contained in BITs Transform into Customary Rules?
 3.3 Examination of State Practice
 3.3.1 The Practice of States Parties to BITs
 3.3.1 State Practice is General and Widespread
 3.3.2 State Practice is Representative
 3.3.3 State Practice is Not Uniform and Consistent
 3.3.2 The Practice of States Outside the Treaty Framework
 3.4 Do States Have opinio juris When they Include FET Clauses in their BITs?
 General Conclusion

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