Don't Cross the Streams: Past and Present Overstatement of Customary International Law in Connection with Conventional Fair and Equitable Treatment Obligations

Authors

Theodore Kill, University of Michigan Law School

Abstract

The obligation to provide fair and equitable treatment to foreign investors and investments has existed as a concept of international economic law at least since the 1919 Covenant of the League of Nations. The fair and equitable treatment provision is a key protection contained in the vast majority of modern bilateral investment treaties. Tribunals adjudicating alleged breaches of these fair and equitable treatment provisions have not arrived at a uniform interpretation of the term. As a threshold issue, however each tribunal must address the question of whether a state's obligations under a given treaty's fair and equitable treatment provision will be additive or equal to the state's preexisting obligations toward all aliens under the minimum standard required by customary international law. Some tribunals have responded to this question by announcing that the protections afforded under fair and equitable treatment provisions and customary international law have converged such that a state's obligations under either standard are coextensive. This Note contends that tribunals adopting the convergence approach overstate the protections afforded to investors under customary international law. By subsuming the obligation to provide fair and equitable treatment within customary international law, these tribunals also ignore the historical development of fair and equitable treatment as a solely treaty-based obligation that did not bind states as a matter of customary international law.

Recommended Citation

Theodore Kill, Don't Cross the Streams: Past and Present Overstatement of Customary International Law in Connection with Conventional Fair and Equitable Treatment Obligations, 106 Mich. L. Rev. 853 (2008).
Available at: https://repository.law.umich.edu/mlr/vol106/iss5/2