Fair And Equitable Treatment in Bilateral Investment Treaties

The relevant research led to the conclusion that BITs have been highly developed in the last two decades. The main reason for their development has been the fact that these treaties grant extensive rights to foreign investors, including protection of contractual rights and the right to international arbitration in the event of an investment dispute’ (Elkins et al., 2006, 811). From a different point of view, it is supported by Alford (2006, online article) that ‘Bilateral investment treaties (BITs) are commonly regarded as one of the policy tools that a country uses to signal to capital-exporting countries of her commitment to protecting foreign investment’. In other words, BITs are a significant mechanism for the protection of investors worldwide offering the necessary framework for the limitation of inequality in investment initiatives within the international market.The structure and the mission of BITs are analytically described by Tudor (2008). In accordance with the above researcher, ‘the treatment of foreign investors and of their investments on the territory of a host State is often subject to a bilateral investment treaty (BIT) signed by the national State of the investors and the host State. these BITs usually contain a clause in which the two States offer fair and equitable treatment (FET) to the foreign investors on their territory’. In other words, the concept of fair and equitable treatment (FET) is an indispensable part of BITs. in the case that one of the parties fail to meet its obligations (as described in one of these treaties) then the other party or any person (or organization) that suffers damage because of this violation of the terms of the relevant agreement can bring the case before an international tribunal. It is the specific body (acting as an arbitrator) that will decide the development of the case and the punishment of the party1 that violated the terms of the treaty. Most commonly, the individuals that brought these cases before the international tribunals are the foreign investors who justify their decision by claiming that they have suffered financial losses because the terms of a specific BIT were not respected by the host country.