The Public Health Measures Under The FET Standard In International Investment

Public health measures of host countries under global epidemics will inevitably have direct or indirect impacts on foreign investments,and the conflicts between them and the investment protection rules based on FET standard bring about a large number of potential investment disputes.To clarify the basic connotation of FET standard and the implementation of public health measures in host countries,analyze the controversies related to public health measures and FET standard in host countries under the epidemic,and explore whether host countries can invoke the defense of exoneration in investment disputes,as well as how China can properly avoid or reduce the risk of investment claims,which is conducive to a proper understanding of the relationship between public health measures and FET standard in host countries at present.Based on this,this paper proceeds along the following lines:With the improvement of protection rules of international investment and the establishment and development of ISDS mechanism,FET standard has become one of the most important investment protection rules.FET standard has a wide connotation,mainly including elements of due process,respecting investors’ reasonable expectations and non-discriminatory treatment,which is an important basis for protecting foreign investment.And some of the public health measures taken by the host country in the epidemic will have direct or indirect impact on international investment,and investors have reasons to challenge that host countries’ measures violate the provisions of international investment agreements and the FET standard.As a result,there is substantial conflict and controversy between the host country’s health measures on public health grounds and the FET standard,which protects the interests of investors,and the host country will be accused of violating its treaty obligations under international investment.In addition to the controversial nature of the FET standard itself and the wide discretion of the tribunal,the host country’s disadvantaged position in a public health crisis makes the conflict between the two even more apparent and thus exposes the host country to a large number of potential investment disputes.However,even if the tribunal recognized that the public health measures taken by the host country in response to Covid-19 were prima facie in violation of the FET standard,the host country still had defenses to exclude of illegality for its measures.The first is based on the exception clause of the IIAs,but few of the IIAs concluded by China separately list the provisions on public security interests,and the application of the exception clause defense is narrow;the second is based on customary international law to exclude of illegality of the measures.Among them are force majeure,distress and necessity,which have the possibility of being successfully invoked by the host countries,but it is important to note that the arbitral tribunal has a strict assessment of these invocation grounds and has a large discretionary power.Finally,considering the conflict the host country’s public health measures and the application of the FET standard and the uncertainty in the invocation of defenses,to explore how to reduce and avoid investment disputes that China may encounter is of practical significance.First,the government should improve the relevant content of the international agreements signed by China,and improve the paradigm of China’s provisions in international investment treaties on the FET standard and make full use of the provisions of the exception clause;Second,the government must provide a clear legal basis for the country’s public health measures through the legislation and interpretation of domestic law,as well as the formulation and implementation of measures to be scientific and reasonable,and comply with substantive and procedural obligations under the FET standard in order to take the initiative in public health crises.