On The Fair And Equitable Treatment Standard In International Arbitral Practice

Fair and equitable treatment standard has long been controversial because of its abstractness and ambiguity. However, it doesn't affect the general acception by international investment agreements and nor the widespread use in the field of investor-state arbitration. The international investment agreements lays the position for the fair and equitable treatment standard in the field of international investment law, while the investor-state arbitration practice has enriches the content of the standard of treatment and makes the international investment law achieve further development. Studying deeply of the application and development of the standard in the field of investor-state arbitration will promote the development and perfection of the foreign investment laws in China and it is also valuable for us to deal with the possible investor-state arbitration in the future.This paper starts with the evolution of the fair and equitable treatment standard and reviews its development process at the multilateral and bilateral level. It dates the history of the standard in international law back to the 1919 Covenant of the League of Nations. Based on the context of the historical development, the paper detailedly analyzes the main reasons of causing disputes about the fair and equitable treatment in the international community. By discussing the different understandings of the standard between the capital-exporting countries and capital-importing countries, it summarizes the extensive interpretation about the fair and equitable treatment by the investor-state arbitration institutions and speculates its future direction. After determining the connotation of the fair and equitable treatment, this paper pays attention to the research on fair and equitable treatment by studying the investor-state arbitral practice. The article discusses the classic arbitration cases under The North American Free Trade Agreement (NAFTA) and bilateral investment treaties (BIT), which are related to the disputes on the fair and equitable treatment. It focuses on the two latest typical practices:Glamis Gold, Ltd. v. United States of America and Bayinder v. Islamic Republic of Pakistan. On the basis of a large number of arbitration practices, the paper extracted the two focal points about the standard that hiding behind the cases, one is the relationship between the fair and equitable treatment standard and other standards in the field of the international investment law, another one is the relationship between the fair and equitable treatment standard and the other obligations that the host country should assume.Fair and equitable treatment standard has been widely used in the field of investor-state arbitration. In order to protect the national interests, most countries have re-proposed the foreign investment laws and revised the international investment agreements one after another, and they achieved positive results. As a traditional capital-importing country and an emerging capital export country, China should draw on the experience of other countries. For the purpose of dealing with the possible investor-state arbitration related to the fair and equitable treatment standard, the paper proposes some suggestion from the perspectives of target position and perfection measures, and with the hope that it will be benefit to the establishment of the legal system of the foreign investment that conform to the situation in our country.