Document Type


Degree Name

Master of Laws


In recent years, the legitimacy of the investor-State dispute settlement (“ISDS”) has been called into question and several initiatives, such as the UNCITRAL Working Group III, are currently looking at various ways to enhance such legitimacy and ensure the sustainability of ISDS. In this respect, certain scholars like Professors Sornarajah and van Harten claim that the interpretative process undertaken by investor-State tribunals has contributed to this legitimacy crisis among others because the application of vague standards, such as fair and equitable treatment (“FET”), involves applying subjective notions of what adjudicators perceive as desirable developments of investment law. By contrast, other academics like Professors Schreuer and Franck, while opining that the FET standard is flexible by design, consider that this flexibility “may be a virtue rather than a shortcoming” because it allows tribunals to adapt and apply bilateral investment treaties (“BITs”) or free trade agreements (“FTAs”) to evolving realities and to engage in a gap-filling function. Notwithstanding their disagreement as to whether the flexibility granted to investor-State tribunals by most BITs enables tailor-made and efficient solutions or undermines the legitimacy of ISDS, the above-mentioned scholars agree on the fact that tribunals have made ample use of such flexibility to determine the scope and content of the FET standard.

Yet, despite the wide acknowledgment of the central role of investor-State tribunals in developing the content of the FET standard and determining its current scope, very few academic publications have focused on how exactly tribunals have developed, justified, and ultimately shaped such scope and content. However, without a more accurate understanding of what investor-State tribunals have been doing when interpreting the FET standard, any attempt to revise BITs, in particular FET clauses, in order to circumscribe the scope of the FET standard and address the current backlash against FET clauses is doomed to fail. Thus, to fill this lacuna, there is a critical need to examine the role of investor-State tribunals from an academic perspective. In this Essay, I attempt to lay the cornerstone of this ambitious project by considering inter alia (i) what criteria and factors have the tribunals considered under the FET standard, (ii) what evidentiary standards have the tribunals applied in relation to the FET standard, (iii) what are the key cases that tribunals have most often referred to, (iv) how these key cases shaped the FET standard; and (v) whether there has been a temporal evolution, expansion or contraction of the FET standard.

With these objectives in mind, I conducted an empirical review of the ISDS awards rendered until the end of 2021 in which the tribunal addressed FET claims by foreign investors. The empirical review mainly consists of two different parts. First, statistical analyses attempting to identify the most cited cases and whether correlations can be evidenced between, on the one hand, references to certain cases and, on the other hand, final outcomes reached by investor-State tribunals. Second, a more granular review of certain fundamental cases in order to identify how investor-State tribunals have relied on, or distinguished, previous awards or adopted different legal perspectives when determining the components and scope of the FET standard. In this regard, while the empirical review encompassed most, if not all, of the components of the FET standard, the present Essay focuses on two specific components that I deemed both relevant and significant. First, this Essay addresses how the concept of legitimate expectations, which has come to form the dominant element of the FET standard, has been developed, justified and circumscribed by investor-State tribunals, and how such concept has evolved over time (Section I). Second, I focus on how the principle of proportionality has slowly become an integral part of the FET standard and seemed to be gaining momentum very recently (Section II).


Dispute Resolution and Arbitration | International Law | International Trade Law | Law

Find in Library