Protection Standards Of Investors' Reasonable Expectation By The "Fair And Equitable Treatment" Article In BIT

Recently, in the arbitration practice, the "Fair and Equitable Treatment" Article in BIT has been frequently invoked by the investors to protect their reasonable expectation and many pleadings have been supported by the tribunals. Although disagreements were expressed by scholars, there is a general consensus that investors' reasonable expectation should be protected by host countries practically. Theoretically it is also valid to protect investors'reasonable expectation considering interpretation of the FET Article and development of Customary International Law.The practice of protection of investors'reasonable expectation by the FET Article can be divided into three periods:involving investors'reasonable expectation, confirming the obligation of protecting investors'reasonable expectation, and analyzing the specific protection standards. The tribunals have tried to determine the protection standards through several elements from 2003 to 2010, but the standards are not clear.To determine the protection standards, subjective, objective aspects as well as exceptions should be considered. From the objective aspect, the time to determine whether investors'expectation is reasonable should be when investors make investment decisions and make investments. The FET Article and the Expropriation Article are different mainly in the protection content and legal consequences. Other considerations of "reasonable expectation" can be summarized from the practice. Regarding subjective aspect, both the host country and investors'subjective factors should be restricted. Whether the host country violates the obligation of protecting investors'reasonable expectation has no connection with the consideration of bad faith. The determination of investors'subjective factors is largely based on the consideration of related objective factors. Under strictly restricted particular circumstances, the host country can invoke justifications to evade the obligation of protecting investors'reasonable expectation, which has been confirmed by practice as well as the consideration of balancing the host country's regulatory power and BIT obligations, BIT's purposes of protecting foreign investment and host country's economic development, and investors'foresight. The justifications include the regulatory measures or policy, and public interests, public order, public moral, or public policy, etc.Currently, it is of great realistic significance to determine the protection standards of investors'reasonable expectation by the FET Article. China should define the Article and regulate the acts to protect the practice of using foreign investment and investing overseas.