The MST has existed pursuant to the emblematic Neer case, in which the Commission held that “the treatment of an alien, in order to constitute an international delinquency, should amount to an outrage, to bad faith, to wilful neglect or duty, or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognize its insufficiency”. However, this has never been understood to be a stringent standard, and today it is not necessary to prove something outrageous or egregious in order for there to have been an infringement of FET. This was indicated in Mondev International Ltd v. USA, and later supported by TECMED v. United Mexican States.
What has remained of the Neer case, though, is the idea that FET is somehow associated with a minimum standard—more precisely, a MST according to CIL. Unfortunately, two ambiguities arise from here. Firstly, as was articulated in Joseph Charles Lemire v. Ukraine, it is not clear whether FET coincides with or differs from the CIL MST. Although some tribunals, as in Glamis Gold v. USA and Joseph Charles Lemire v. Ukraine, have opined that the CIL MST is a floor below which treatment becomes unfair and inequitable, there is no consensus on the issue.
[...] Unfortunately, two ambiguities arise from here. Firstly, as was articulated in Joseph Charles Lemire v. Ukraine, it is not clear whether FET coincides with or differs from the CIL MST. Although some tribunals, as in Glamis Gold v. USA and Joseph Charles Lemire v. Ukraine, have opined that the CIL MST is a floor below which treatment becomes unfair and inequitable, there is no consensus on the issue. Secondly, because the MST is supposed to be under CIL, confusion surfaces when references are made to International Law instead of CIL in relation to FET, as is the case in the French Model BIT, and more importantly, the BIT between France and State where it is stated that “Either Contracting Party shall extend and ensure fair and equitable treatment in accordance with the principles of IL So the question in the present case is: do the “principles of simply mean CIL? [...]
[...] Summary note on definition of fair and equitable treatment Fair and equitable treatment (FET) in international investment law is a non-contingent standard. This means that it is independent of how a State treats its own national investors or other foreign investors. Instead, it is based on “international standards [of generic nature [whose] interpretation varies with the course of time and with the circumstances of each case”. It is important to note that, for this reason, becomes difficult to establish an unequivocal and static concept of these notions”1. [...]
[...] the investor's expectations are to be based on certain objective, demonstrable criteria. For example, the Tribunal could refer to the context in which a given BIT was signed, its preamble, as well as its object and purpose, as interpreted according to the 1969 Vienna Convention on the Law of Treaties, as was done in Saluka Investments BV v. The Czech Republic. In the present case, the contract between Elextro and State X was “concluded in the context of a new governmental policy in favor of public-private partnerships in the energy sector”, and this might be a good foundation for the argument that the client's expectations were legitimately raised that its investment in State X would be well-protected. [...]
[...] The only argument that State X has is the “huge deficit of its social protection regimes”, and how strong this turns out to be as a defence really depends on its relative weight in comparison to the numerous actions it took previously to raise the client's expectations Ad hoc arbitral tribunal (PCA as registry, UNCITRAL rules), Saluka Investments BV v. The Czech Republic, Partial Award March LG&E v. The Argentine Republic, Suez, Sociedad General de Aguas de Barcelona S.A., and InterAgua Servicios Integrales del Agua S.A. v. The Argentine Republic, and Parkerings-Compagniet AS v. Lithuania ICSID arb. trib., CMS Gas Transmission v. The Argentine Republic, n°ARB/01/08, award of 12 May See LG&E v. The Argentine Republic and Glamis Gold v. [...]
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