Protections for foreign investors and investment treaty arbitration
Produced in partnership with Joe Tirado, Partner of Garrigues UK LLP and Elisa Vicente, Senior Associate of J&A Garrigues, S. L. P.

The following Arbitration practice note produced in partnership with Joe Tirado, Partner of Garrigues UK LLP and Elisa Vicente, Senior Associate of J&A Garrigues, S. L. P. provides comprehensive and up to date legal information covering:

  • Protections for foreign investors and investment treaty arbitration
  • Fair and equitable treatment (FET)
  • Full protection and security of investments
  • National treatment of investors
  • Most favoured nation treatment of investors
  • Protection from expropriation without adequate compensation
  • Resolution of BIT and MIT disputes

Protections for foreign investors and arbitration'>investment treaty arbitration

Under bilateral investment treaties (BITs) and other investment protection treaties such as multilateral investment treaties (MITs), host states typically will promise to provide certain minimal levels of protection and treatment for foreign investors. These minimal levels of treatment can range from a promise not to discriminate against foreign investors in favour of local companies, through to a promise not to nationalise or expropriate an investment without payment of adequate compensation. Among other reasons, it is important to understand the nature and scope of these protections for the purposes of advising on related disputes.

This Practice Note provides an overview of the types of protection which are typically available under BITs and MITs, including:

  1. fair and equitable treatment (FET) of investors (sometimes referred to as the FET standard)

  2. full protection and security of investments

  3. 'national treatment' of investors

  4. 'most favoured nation' (MFN) treatment of investors, and

  5. protection from expropriation without adequate compensation

UNCTAD, the United Nations Conference on Trade and Development, maintains a useful, searchable database of BITs for each of the world's countries.

Fair and equitable treatment (FET)

This standard of treatment, sometimes abbreviated and referred to as the 'FET' standard, is usually the most broadly-phrased protection available to investors and their investments. Due to this broad definition, the FET standard is often considered to provide protection for foreign investments where

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