Full Answer
What is the difference between'fair'and'equitable treatment?
Jan 08, 2019 · Fair treatment means people receive non-discriminatory attitudes regardless of their personal conditions. Equitable treatment means people receive the same opportunity to reach a specific ...
What is fairness and equitable treatment?
The obligation to accord fair and equitable treatment (FET) to foreign investments appears in the great majority of international investment agreements (IIAs). Among the IIA protection elements, the FET standard has gained particular prominence, as it has been regularly invoked by claimants in investor-State dispute settlement
What is fair and equitable treatment in international trade?
Fairness and Equitable Treatment: Each person matters as an individual. Decisions and actions must consider the dignity and rights of the individual to be considered to be fair. Equitable treatment does not necessarily mean treating everyone the same. Treating people fairly may require different approaches that do not imply a lesser standard of ...
What does it mean to be fair and equitable in practice?
fair and equitable treatment of investors means, serves the need for a balancing of interests between the State’s right to determine its legal and economic order and the legitimate expectation of the investor in the system’s stability (to facilitate rational planning and decision making).565 Such right balance between investor interests and Host state’s interests is to be …
What is the meaning of fair and equitable treatment?
“The phrase “fair and equitable treatment”, customary in relevant bilateral agreements, indicates the standard set by international law for the treatment due by each State with. regard to the property of foreign nationals.
What does equitable treatment mean?
Equitable treatment means people receive the same opportunity to reach a specific objective while specific considerations are in place. 'Equitable' is not the same as 'equal' because you must make specific considerations.Dec 23, 2021
What are the most important core principles of fair and equitable treatment?
On the basis of arbitral case law, Vandevelde identifies five principles of fair and equitable treatment (reasonableness, consistency, nondiscrimination, transparency, and due process), which are described as procedural and substantive dimensions of the rule of law.Aug 23, 2017
What is the minimum standard of treatment?
Most treaties include a minimum standard of treatment (MST) that requires that the host state treat foreign investors in accordance with an undefinable standard such as “fair and equitable” treatment. Traditionally, this type of treatment only applied to extreme cases of mistreatment.
What is fairness and equity?
[Equality] Fair is defined as just or appropriate in the circumstances. [Fairness] Equity is defined as the quality of being fair and impartial.Sep 24, 2019
What is the difference between equal treatment and fair treatment?
Fair, in this context, is not the same as equal treatment. Equal, by definition, means being the same. Your employees are not all the same; they each have their own unique skill sets and environments that they thrive in and should be nurtured accordingly.May 3, 2021
What is fair and equitable treatment in international investment law?
The fair and equitable treatment standard (FET) in International Investment Law is one of several standards of protection commonly used in Bilateral Investment Treaties (BITs) establishing the treatment a foreign investor is entitled to by a host state.
Is fair and equitable treatment customary international law?
As explained above, fair and equitable treatment is a broad and overarching standard, which contains several elements of protection, including those traditionally associated with the minimum standard of treatment under customary international law.Jan 23, 2022
What is an umbrella clause in a bit?
An umbrella clause protects investments by bringing obligations or commitments that the host state entered into in connection with a foreign investment under the protective "umbrella" of the BIT.
What is MST in law?
The minimum standard of treatment (“MST”) is a rule of customary international law. 1. At least since the beginning of the 20th century, a large part of doctrine upheld the customary nature of the international minimum standard.Jan 7, 2022
What is full protection and security?
Doctrinal Definition of the Standard of Full Protection and Security. According to doctrine, the standard of full protection and security covers protection against physical and legal infringements of the host State directed at foreign investors. The standard appears in variously worded formulas.Oct 2, 2018
What is a minimum standard?
Related Definitions Minimum Standards means standards of practice that interpret the legal definition of nursing as well as provide criteria against which violations of the law can be determined.
What is fair and equitable treatment?
The fair and equitable treatment (FET) standard is a key element in contemporary international investment agreements (IIAs). Over the years, it has emerged as the most relied upon and successful basis for IIA claims by investors.
What is FET in arbitration?
As discussed in section III, many arbitral awards have interpreted the FET concept rather broadly, especially in cases relying on the legitimate expectations of the investor. The result may be an open-ended and unbalanced approach, which unduly favours investor interests and overrides legitimate regulation in the public interest. In addition, although different types of language used in treaties may require different interpretation, in practice tribunals tend to justify their findings by reference to earlier awards. A kind of de facto doctrine of precedent evolves that can tempt a tribunal to find an infringement because an infringement was earlier found in an apparently similar case of maladministration. At the same time, as there is no official doctrine of precedent in international law, it is uncertain whether an earlier award will be followed or not, thereby increasing the lack of predictability in the decision-making process.
What are the FET clauses in the IIA?
Standards of treatment based on fairness and equity pre-date modern IIAs. FET clauses used in BITs and other IIAs appeared in early international economic agreements such as the Havana Charter for an International Trade Organization (1948) and the Economic Agreement of Bogotá (1948), as well as in the United States Friendship, Commerce and Navigation (FCN) treaties. The first use of the FET clause in the IIA context can be traced back to Article I of the Draft Convention on Investments Abroad proposed by Hermann Abs and Lord Shawcross in 1959:
What is the scope of FET?
As far as the scope of the FET is concerned, current arbitral practice shows that all types of governmental conduct – legislative, administrative and judicial alike – can potentially be found to breach the FET obligation. In terms of the standard’s content, there are two relevant aspects: (a) the principles of good governance, against which the conduct will be assessed (due process, absence of arbitrariness in decision-making, non-frustration of legitimate expectations and so forth) and (b) the threshold of liability, that is, how serious the breach must be in order for a violation to be found. While both of these aspects can be influenced by the ultimate source of the FET obligation – whether autonomous or grounded in international law – the source is particularly relevant to determine the liability threshold.
Is the FET standard accepted?
Claims based on the standard appear practically in every single treaty-based arbitration proceeding. They have been both accepted and rejected in significant numbers by tribunals (see box 15).
Does the IIA omit the FET standard?
Existing IIAs rarely omit the FET standard, although there are several examples to the contrary (see section II.B). The more common response to the risks of an overbroad application of the standard has been to draft the FET provision in a more restricted manner. Even in the absence of an FET clause, a host State must treat foreign investments in accordance with the minimum standard of treatment of aliens because it can be argued that this standard is part of customary international law, which applies regardless of specific treaty obligations. Whether an investor would be able to use the ISDS mechanism to enforce the minimum standard of treatment of aliens is another question. This would not be possible if an IIA limits the jurisdiction of arbitral tribunals solely to those claims where a breach of the treaty is alleged. In contrast, arbitral tribunals should be able to adjudicate claims relating to the minimum standard of treatment under those treaties that have broad ISDS clauses, for example, encompassing “any disputes relating to an investment”.
More Definitions of fair and equitable treatment
fair and equitable treatment of investors means, serves the need for a balancing of interests between the State ’s right to determine its legal and economic order and the legitimate expectation of the investor in the system ’s stability ( to facilitate rational planning and decision making).565 Such right balance between investor interests and Host state ’s interests is to be struck, since otherwise Host States will be reluctant to admit foreign investments or investors would stop taking cross- border risks, which would undermine the overall aim of extending and intensifying the parties ’ mutual economic relations.566.
Related to fair and equitable treatment
Sponsor Fair Market Value means the average last reported sale price of the Ordinary Shares for the ten (10) trading days ending on the third (3rd) trading day prior to the date on which notice of exercise of the Private Placement Warrant is sent to the Warrant Agent;
What is fair and equitable treatment?
Fair and equitable treatment is one of the protection policies of the host country to the foreign investments to protect from circumstances and situational disadvantages to an extent. These policies are expected to conform to the minimal standards of international trade and investments law or the host country’s trade policies.
What is the principle of national treatment?
While the principle of national treatment foresees that aliens can only expect equality of. treatment with nationals, the international minimum standard sets a number of basic rights established. by international law that States must grant to aliens, independent of the treatment accorded to their. own citizens.
What is the importance of article 11?
The article 11 (2) stated the importance of a “just and equitable treatment” to the trade organizations and governments, as. To make recommendations for and promote bilateral or multilateral agreements on measures designed.
What is fair and equitable treatment?
“All employees and applicants for employment should receive fair and equitable treatment in all aspects of personnel management without regard to political affiliation, race, color, religion, national origin, sex, marital status, age, or handicapping condition, and with proper regard for their privacy and constitutional rights.”
What is the second principle of fair and equitable treatment?
The second principle, concerning fair and equitable treatment, sets forth the vision that Federal personnel management be free of unfair treatment and discrimination, where decisions are made solely on legitimate merit-based considerations.
What is the purpose of the Pendleton Act?
Requiring decision making without regard to political affiliation echoes the intent of the Pendleton Act of 1883 which replaced the patronage system with a merit system. Requiring decision making without regard to race, color, religion, national origin, sex, marital status, age, or handicapping condition echoes the purpose behind Title VII ...
What is fair and equitable treatment?
Fair and equitable treatment tries to restrict the abuse of authority threats, harassment, caution and intimidation from the host nation. It also tries to remove arbitrariness, unfair and unjust Environment based upon individual discretion, discrimination or prejudice.
When was the term "equitable treatment" first used?
The term “equitable treatment” appears for the first time in the 1948 Havana Charter for an international trade organization. Article 11 (2) contemplated that foreign investors should be treated “justly and equitably”. The article stated that the ITO could:
Which case made the interpretation clear?
The main question was whether the 1955 treaty of amity, economic relations and consular rights between Iran and the US firms fall in the ICJ jurisdiction. American Manufacturing & Trading (AMT) (US), Inc. v. Republic of Zaire, was another case that that made the interpretation clear.
Who decides the lawsuits involving injuries sustained by their citizens in previous years?
The United States will determine lawsuits involving injuries sustained by their citizens in previous years. The United States – Mexico Commission was granted jurisdiction to decide the cases. The fair treatment obligation is a common example of arbitration that has revealed new meaning for BITs.
What is the OEPC case?
OEPC Claimed that the fair and equal table treatment clause has been violated as The Company did not treat them as national exporters and meetings arbitrary. As per this case, the tribunal considered the standard equitable to international law similar to providing fair and equitable treatment.
Which country breached the fair and equitable treatment standard in the Sweden-Romania bilateral investment treaty?
The majority of an ICSID tribunal (Laurent Lévy and Stanimir Alexandrov) held that Romania breached the fair and equitable treatment standard in the Sweden-Romania bilateral investment treaty by repealing incentives offered regarding investments made in some of the country’s deprived regions. A different majority (Laurent Lévy and Georges Abi-Saab) ...
What did the tribunal observe about the BIT?
The tribunal observed that the BIT did not provide much assistance in respect of the meaning of the terms “fair” and “equitable”. It suggested that the real question was how the terms “fair” and “equitable” should be applied to the facts of the case.
What did the European Commission argue about the BIT?
The claimants argued that there was no conflict between the BIT, on the one hand, and the Accession Treaty of 25 April 2005 ( Accession Treaty) and the EC Treaty, on the other.
Is Lex Specialis a treaty?
As lex specialis, given that it is a treaty with a more delimited scope of application than the Accession Treaty and the EC Treaty. The claimants added that, even if under EU law Romania was obliged to phase out the Incentives, this would not excuse Romania’s alleged breaches of the BIT and international law.
Was the revocation of the incentive unfair?
Furthermore, the revocation of the Incentives was unfair and unlawful, and, in particular, that the Incentives were compatible with EU law. Specifically, the claimants argued that the revocation of the Incentives: Breached the umbrella clause in the BIT. Breached Romania’s obligation to afford the claimants FET.
Introduction
Fair and Equitable Treatment
- Fair and equitable treatment is one of the protection policies of the host country to the foreign investments to protect from circumstances and situational disadvantages to an extent. These policies are expected to conform to the minimal standards of international trade and investments law or the host country’s trade policies. There has been a wide...
Origins
- Fair and Equitable treatment first found its existence in the Havana charter of 1948 for an international Trade Organization. The article 11(2) stated the importance of a “just and equitable treatment” to the trade organizations and governments, as 1. To make recommendations for and promote bilateral or multilateral agreements on measures designed 2. To assure just and equita…
Standard of Fair and Equity
- The standard of fair and equity has been attributed to three various principles such as 1. Minimum international standard required by customary law 2. International law and instruments 3. Self-contained independent treaty standards
Practices Violating Fet
- These are some of the practices which arbitrators have identified as violating measures to the fair and equitable treatment by the states. 1. Absence of obligation of protecting and safe-guarding the investors’ assets and other workers. 2. Denied justice or jurisdiction to the investors. 3. Non-fulfilment of legitimate expectationsof investors by the host state. 4. Threats or harassment by t…
Case Laws
- In the case ofAsian Agricultural Products Ltd. (AAPL) v. Republic of Sri Lanka, the judge went on to define or draw an outline of what fair and equitable treatment is. In this case, the AAPL shrimp farm was annexed by Tamil insurgents and the State forces went to capture them. The farm was destroyed and the staff were killed, but nobody knew which force did it. Judge Asante, in a disse…
Fet in India
- India has been interested in signing trade agreements with many nations. The Indian International Investment Agreements (IIA) have been efficient tools to propagate India’s interest towards enriching the investment and trade sector and promoting trade and peace among its allies. The first IIA was signed by India with U.K. in 1994 and since then, a total of 75 countries have signed …
Conclusion
- There have been a plethora of debates concerning the terms and conditions which come under the umbrella of Fair and Equitable Treatment. Though many have been discussed, only a handful have been considered as legitimate, as those should neither be a threat to the sovereignty of the host nation nor detrimental to value investments and assets of foreign investors. Fair and Equita…