Fair and Equitable Treatment - A Sequel

UNCTAD Series on Issues in International Investment Agreements II

image of Fair and Equitable Treatment - A Sequel
The concept of fair and equitable treatment, which has assumed prominence in investment relations between States, provides a yardstick by which relations between foreign direct investors and Governments of capital-importing countries may be assessed. In addition to discussing this issue, the publication also takes stock and analysis of: trends in the use of the standards; and models based on State practice. The publication also gives insight into the interaction of fair and equitable treatment standard with other issues and concepts that arise in investment practice.



Explanation of the issue

Standards of treatment based on fairness and equity pre-date modern IIAs. FET clauses used in BITs and other IIAs appeared in early international economic agreements such as the Havana Charter for an International Trade Organization (1948) and the Economic Agreement of Bogotá (1948), as well as in the United States Friendship, Commerce and Navigation (FCN) treaties. The first use of the FET clause in the IIA context can be traced back to Article I of the Draft Convention on Investments Abroad proposed by Hermann Abs and Lord Shawcross in 1959


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