Chapter 5 analyses the three challenges facing international tribunals considered in this book in investment treaty arbitration. Regarding the challenge of managing change, investment treaty arbitration displays similarities and differences with the inter-State tribunals studied. Using the example of the minimum standard of treatment, the chapter shows that like the inter-State tribunals studied, investment treaty tribunals contribute to broader processes of change in international legal norms. Yet differently from the other tribunals studied, investment treaty arbitration has an overriding focus on determining the permissible degree of change in host State regulation. In relation to scrutinising State conduct for compliance with international law, investment treaty arbitration raises comparable questions to the other international tribunals studied regarding the appropriate intensity of review and the methods of review used by adjudicators. Finally, the chapter considers why, unlike the inter-State tribunals studied, investment treaty tribunals rarely adjudicate in a facilitative, forward-looking manner that aims to complement post-adjudication cooperation between the parties.

This chapter discusses ways of reflecting investors’ environmental and human rights responsibility in the assessment of the investor’s principal claims, focusing on investors’ environmental misconduct during the operation of their investment (performance-phase misconduct). In the merits phase, it discusses the impact of such misconduct on assessment of the protection of the investor’s legitimate expectations. The analysis seeks to reflect the interests of victims in this assessment by examining the role that the concept of ‘social licence to operate’ (SLO), which is based on the perceptions of local stakeholders, may play in this context. Specifically, it argues that the loss of an SLO brought about by the investor’s conduct may, in certain circumstances, reduce the grounds for protecting the investor’s legitimate expectations. It then discusses ways to address the risk of abusing the SLO in balancing this context. At the remedy phase, this chapter examines contributory fault as a concept that may reflect investor misconduct in a direct and value-based manner, and discusses selected controversies over its application.

This chapter presents the five traditional grounds for judicial review: inexistence, lack of competence, breach of an essential procedural requirement (the so-called external legality checks) and abuse of power and illegality (issues of ‘internal legality’). The chapter then explores the values which are enforced through judicial review, especially fundamental rights and principles of good administration. Section 3 explores the extent to which constitutional rights and the European Convention have taken over from the ‘general principles of law’ developed by the Conseil d’Etat as the main sources of rights protection. In relation to principles of good administration, the expansion of requirements has come mainly from legislation and government circulars, but there has been a strong influence from developments within the European Union.

The aim of Chapter 7 is to explain the patterns identified in Chapter 6. In particular, it looks into the characteristics of the WTO and the ECT treaty regimes to explain why the EU is the optimal respondent in trade disputes, whereas Member States are exclusive respondents in investment arbitration.

Together with the prohibition of illegal expropriation analysed in Chapter 6, the standards of treatment examined in this chapter constitute the core of the protection conferred by international investment agreements (IIAs) to foreign investors and their investments. They protect these investors and investments against a broad range of conduct attributable to host States, sometimes in connection with the conduct of private persons. The extent and modalities of the protection granted by these standards have traditionally suffered from a lack of clarity, which has led arbitration tribunals to decide on the legal issues raised by their practical application. Beyond this lack of clarity, treaty practice has also displayed nuances and differences concerning the extent and modalities of the protection granted by those treaty standards. Although nuances and differences remain in IIAs concluded in the 2010s, States have endeavoured to clarify the extent and modalities of this protection. Chapter 5 provides in-depth analyses of the standards of treatment, focusing on treaty practice and arbitration practice as well as the evolution thereof. More specifically, it examines in turn: (1) the fair and equitable treatment standard; (2) the full protection and security standard; (3) the national treatment standard; (4) the most-favoured-nation treatment standard; and (5) the umbrella clause.

Each Contracting Party shall accord to investments of investors of the other Contracting Party fair and equitable treatment.

Part II - This brief introduction to Part 2 is designed to set the stage for the detailed chapters that follow, each of which examines various parts of the Australian Consumer Law of relevance to commercial law. Commercial law, unlike many other areas of law, is not driven by a single defining doctrinal idea; rather, it is driven by the relevance of selected legal topics to commercial life. There are certain ideas that are recurrent within commercial law, such as reasonableness, good faith and bad faith, the need to protect innocent parties, reliance and legitimate expectations. However, none of these ideas defines an entire area of law or forms the basis for the existence of those laws in the first place. Most areas of commercial law exist because the demands of commerce require a set of rules to regulate the interactions of the players within that field. Consumer law is no different, and its centrality to commercial life makes it a proper sub-field for study within commercial law.

In international investment law, investor-claimants often have recourse to human rights case law in order to support a certain interpretation of investment protection standards, such as denial of justice and the prohibition on expropriation of private property without compensation. What is rarer, however, is that respondent States may invoke their human rights obligations in order to formulate a defence of their conduct towards a particular investor, or even to formulate a counterclaim. After briefly outlining investors’ reliance on human rights rules to support their claims, this chapter investigates the potential of invoking human rights norms by respondent States in order to persuade a tribunal that, first, it does not have jurisdiction; secondly, no investment protection standard has been violated; or, thirdly, damages ought to be calculated in a certain manner. Subsequently, three specific issues that may complicate the invocation of human rights norms in investor-State dispute settlement are examined: the difference between human rights obligations and objectives; State acquiescence or complicity to human rights violations; and human rights counterclaims.