Fair and Equitable Treatment and The Right to Regulate in International Investment Law
(2018) JURM02 20182Department of Law
Faculty of Law
- Abstract
- When a state adopts a new law or enforces an existing law, it risks breaching its obligations under an International Investment Agreement (IIA). According to the regulatory chill theory, a state will refrain from regulating due to the risk of being sued by an investor under the Investor-State Dispute Settlement (ISDS) system. The purpose of the thesis is to examine the issue of the “regulatory chill” in international investment law and to assess the current reform proposals from a human rights perspective. The thesis focuses on “legitimate expectations” and “arbitrariness” which are part of the Fair and Equitable Treatment Standard.
The thesis is primarily a result of the study of treaty texts and arbitral awards rendered in the last... (More) - When a state adopts a new law or enforces an existing law, it risks breaching its obligations under an International Investment Agreement (IIA). According to the regulatory chill theory, a state will refrain from regulating due to the risk of being sued by an investor under the Investor-State Dispute Settlement (ISDS) system. The purpose of the thesis is to examine the issue of the “regulatory chill” in international investment law and to assess the current reform proposals from a human rights perspective. The thesis focuses on “legitimate expectations” and “arbitrariness” which are part of the Fair and Equitable Treatment Standard.
The thesis is primarily a result of the study of treaty texts and arbitral awards rendered in the last five years (2014-2018). In regards to reform options, the thesis draws on submissions made by stakeholders in the negotiation of two treaties: the UN Treaty on Business and Human Rights and the Transatlantic Trade and Investment Partnership (TTIP).
The thesis finds that arbitral tribunals generally recognised that investors must engage in a due diligence analysis and take into consideration the social and economic conditions of the host state before undertaking an investment. Furthermore, investors cannot legitimately expect that laws will not change in the absence of specific commitments, however changes must be within an “acceptable margin of change”. Some, but not all, tribunals applied the principle of proportionality and the margin of appreciation doctrine. When specific commitments had been made, tribunals were less willing to take into consideration issues relating to human rights and environmental protection.
The thesis finds that the provision on interpretation in the “Zero Draft” of the UN-treaty is too weak and should be reformulated. State parties should also consider concluding joint interpretive agreements to clarify ambiguous treaty provisions. Furthermore, states could protect a range of important policy issues by incorporating a general exception clause when drafting new IIAs. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8965498
- author
- Amoah, Sara LU
- supervisor
-
- Radu Mares LU
- organization
- course
- JURM02 20182
- year
- 2018
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- Fair and Equitable Treatment, Right to Regulate, International Investment Law
- language
- English
- id
- 8965498
- date added to LUP
- 2019-01-28 11:39:23
- date last changed
- 2019-01-28 11:39:23
@misc{8965498,
abstract = {{When a state adopts a new law or enforces an existing law, it risks breaching its obligations under an International Investment Agreement (IIA). According to the regulatory chill theory, a state will refrain from regulating due to the risk of being sued by an investor under the Investor-State Dispute Settlement (ISDS) system. The purpose of the thesis is to examine the issue of the “regulatory chill” in international investment law and to assess the current reform proposals from a human rights perspective. The thesis focuses on “legitimate expectations” and “arbitrariness” which are part of the Fair and Equitable Treatment Standard.
The thesis is primarily a result of the study of treaty texts and arbitral awards rendered in the last five years (2014-2018). In regards to reform options, the thesis draws on submissions made by stakeholders in the negotiation of two treaties: the UN Treaty on Business and Human Rights and the Transatlantic Trade and Investment Partnership (TTIP).
The thesis finds that arbitral tribunals generally recognised that investors must engage in a due diligence analysis and take into consideration the social and economic conditions of the host state before undertaking an investment. Furthermore, investors cannot legitimately expect that laws will not change in the absence of specific commitments, however changes must be within an “acceptable margin of change”. Some, but not all, tribunals applied the principle of proportionality and the margin of appreciation doctrine. When specific commitments had been made, tribunals were less willing to take into consideration issues relating to human rights and environmental protection.
The thesis finds that the provision on interpretation in the “Zero Draft” of the UN-treaty is too weak and should be reformulated. State parties should also consider concluding joint interpretive agreements to clarify ambiguous treaty provisions. Furthermore, states could protect a range of important policy issues by incorporating a general exception clause when drafting new IIAs.}},
author = {{Amoah, Sara}},
language = {{eng}},
note = {{Student Paper}},
title = {{Fair and Equitable Treatment and The Right to Regulate in International Investment Law}},
year = {{2018}},
}