1. International standards related to foreign investment James Graham

2. BASIC STANDARDS 1. Minimum standard of treatment 2. National treatment 3. Fair and equitable treatment

3. 1. MINIMUM STANDARD OF TREATMENT Aliens are entitled to a minimum protection and rights in accordance with general international law : (Minimum Standard of Treatment –MST) Classic definition: Neer (1927): “…governmental action so far short of international standards that every reasonable and impartial man would readily recognize its insufficiency proceeds from deficient execution of an intelligent law, or from the fact that the laws of the country do not empower the authorities to measures up to international standards, is immaterial” The minimum standard protects against: Arbitrariness, denial of justice, etc. And grants rights of: -Legitimate expectations -Stability -(etc…)

4. 2. NATIONAL TREATMENT No less favourable treatment or less rights than those granted for nationals. (National Treatment) Does not prohibit discrimination if justifiable. (i.e. immigration requirements, Mexican coastal regime and the exclusion of aliens, … ) The investor argues and proves discrimination; State must justify it A violation of the national treatment is not neccesarily a violation of minimum standard.

5. 3. FAIR AND EQUITABLE TREATMENT (Fair and Equitable Treatment-FET) Transparent, consistent and stable legal regime in foreign investment. Problems of definitions Autonomous from the minimum standard? NAFTA: FET = Minimum standard of general international law See: Paushok/Mongolia

6. ADDITIONAL STANDARDS Full Protection and Security Within the FET? Part of the MT ? See El Paso / Argentina: Part of the MT, but only for third parties, not for the State, which is liable for not having prevent the unlawful acts Etc..

7. CONCLUSION Domestic norms establish the rule and its definition (the what and how) In contrast, standards just establish the rule (the what without the how)

8. EXTENSION CLAUSES 1. MFN 2. Fork on the road 3. Umbrella clause

9. 1. MFN The MFN clause allows the investor to invoke another BIT that is more favourable than the existing BIT between its State and the destination State. (i.e. an investment in Mexico from an israeli citizen is governed by a Mexico-Israel BIT, but since (for example) the Mexico-Singapur is more favourable, the investor can invoke it) Express MFN for substantial rights! Implied MFN for substantial rights? Express MFN also for procedural rights? Maffezini/España: Yes Plama/Bulgaria: No

10. 2. FORK ON THE ROAD Hypothesis: private contract between the investor and the State. The contract has a clause of election of jurisdiction in favour of the State´s tribunals. Now, there is a dispute under this contract → is it possible to go to arbitration under a BIT? There is no need to choose between a national or arbitral tribunal because legally a same dispute can be at the same time a contractual dispute (before a national tribunal) and a treaty dispute (before an arbitral tribunal) SGS/Filipinas: Presumption in favor if in the arbitration a party invokes treaty violations (even if these violations were created by the dispute under the contract) SGS/Pakistan: Presumption against Panteckniki/Albania (Paulsson árbitro único): NO. It is only possible if materially there are distinct issues.

11. 3. UMBRELLA CLAUSE Observance and undertakings clause: State must respect Pacta sunt servanda ¿Its objective is to “transform” any contractual violation into a BIT violation? (or into a violation of international law) Or to wait until a domestic tribunal establishes that the State does not fulfill its obligations Ipso facto transformation? SGS/Pakistan: No Noble/Romania: Yes