The protection of general interests of host States in the application of the fair and equitable treatment standard

Introduction The fair and equitable treatment (FET) standard, provided for by most investment treaties, has been a sort of ‘sleeping beauty’ for many years; quite recently ‘kissed awake’, it has nowadays become a leading character within the context of foreign investor–State arbitration. Although it has been inserted in bilateral investment treaties (BITs) since the beginning, the FET standard seems to have been discovered only recently by investors complaining about an alleged violation of the applicable treaty by the host contracting State. The reason for this interest in the standard may paradoxically coincide with the reason why it has been so neglected in the past, that is, its inherent ambiguity. Being inherently vague and ambiguous, it seems that initially foreign investors neglected it as a basis for their claims. The more claimants became confident with arbitral proceedings to settle their disputes with the host country, the more they showed an attitude to explore all the opportunities granted by the applicable treaty, clauses providing for FET included. A ‘debate’ about the scope of the standard has therefore evolved at different levels: arbitral tribunals applying the standard in their decisions gave rise to a (not always consistent) case-law; scholars supporting or criticizing such decisions advanced their own understanding; and States took position on the issue in their negotiating practice. Such a process has had the effect of contributing to the progressive definition of the standard.