Abstract:
This study critically analyzes the impact of Fair and Equitable Treatment (FET) obligations on
host state regulatory autonomy within international investment law. It examines how FET
obligations, as articulated in international investment treaties and Bilateral Investment Treaties
(BITs), influence states' ability to enact public interest regulations, particularly in environmental
protection and public health.
The research traces the evolution of FET, revealing a shift from a narrow focus on protecting
investors from arbitrary treatment to a broader interpretation by arbitral tribunals. This expansion
poses challenges for host states, often conflicting with their rights to regulate for the public good.
The analysis discusses significant decisions of arbitral tribunals demonstrating the tension between
investor expectations and state measures aimed at the protection of environment and public health.
It indicates how recent treaty provisions that include exceptions for environmental and health
regulations may help reconcile these conflicts. Especially, the study has determined that for
enhancing the balance between investor protections and state regulatory powers, there should be
clearer treaty language, the inclusion of public interest exceptions, and a more consistent approach
in arbitral decisions to ensure that FET obligations do not hinder states' abilities to regulate
effectively in critical areas like environmental and public health.
