Variability of fair and equitable treatment standard according to the level of development, governance capacity and resources of host countries

AuthorLawal Oluwaseun Sadiq
Pages229-235
JICLT
Journal of International Commercial Law and Technology
Vol.9, No.4 (2014)
229
Variability of fair and equitable treatment
standard according to the level of development,
governance capacity and resources of host
countries
Lawal Oluwaseun Sadiq*
Course Coordinator
National Open University of Nigeria
oluwaseunlawal@gmail.com
Abstract. The article provides a thorough examination of the fair and equitable
treatment standard by considering what constitutes an act to be regarded as fair and
equitable treatment of an investor and his investment, what are the criteria in establishing
that there have been a breach of the fair and equitable standard in line with the
interpretation in treaties, Bilateral Investment Treaties (BITs), decision of Tribunals etc.
And finally should the criteria used vary based on the level of development, governance
capacity and resources in the host State.
1. Introduction
The fair and equitable treatment standard is still a mystifying legal term. Although it has been thoroughly
examined, particularly in the last few years, it has not yet been entirely clarified. What is certain is that it
is an ‘absolute’, ‘non-contingent’ standard of treatment, i.e. a standard that states the treatment to be
accorded in terms which have their own normative content, though their exact meaning has to be
determined by reference to specific circumstances of application, as opposed to the ‘relative’ standards
embodied in ‘national treatment’ and ‘most-favoured-nation’ principles which define the required
treatment by reference to the treatment accorded to other investment in similar circumstances.1 It is
regarded as an absolute standard in the sense that it has its own meaning, and is not necessarily satisfied
by treating the investor as well as the host State treats its own nationals or other foreigners.2
The stan dard of fair and equitable treatment is said to be flexible because it s a pplication could be
stretched in order for it to accommodate new definition. Based on this feature of elasticity of th e fair and
equitable treatment standard, it is believed to have been the most invoked treaty standard in Investor-State
arbitration which is present in almost every single claim brought by foreign investors against host States.3
In this article, the writer would be considering the fair and equitable treatment, what constitutes an act
to be regarded as fair and equitable treatment of an investor and his investment, what are the criteria in
establishing that there have been a breach of the fair and equitable standard in line with the interpretation
in treaties, Bilateral Investment Treaties (BITs), decision of Tribunals etc. And finally should th e criteria
used vary based on the level of development, governance capacity and resources in the host State.
* Lawal Oluwaseun Sadiq is a Course Coordinator at the National Open University of Nigeria. He holds an LLM in
International Commercial Law, BL, LLB and a Diploma-in-Law.
1 A. Fatouros, Government Guarantees to Foreign Investors (CUP, New York 1962) 135-141, 214-215; UNCTAD,
Bilateral Investment Treaties 19952006: Trends in Investment Rulemaking
http://www.unctad.org/en/docs/iteiia20065_en.pdf >
2 Katia Yannaca-Small, ‘Fair and Equitable Treatment Standard: Recent Developments’ Standards of Investment
Protection ((ed) August Reinisch OUP 2008)
3 Fatouros (n 2)

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