Trato justo y equitativo: ¿Por qué es importante y qué se puede hacer?

The document examines the 'fair and equitable treatment' (FET) standard in international investment agreements, noting its prevalence in nearly 95% of such treaties and its role in 83% of treaty-based arbitrations. It argues that the vagueness of FET leads to inconsistent interpretations by tribunals, which can result in 'regulatory chill' for states. The brief outlines five common formulations of FET and suggests three primary policy alternatives: excluding the FET standard entirely, using alternative terminology like 'fair administrative treatment', or implementing a strictly defined, limited FET standard with a closed list of violations.

• The 'fair and equitable treatment' (FET) standard is highly prevalent and litigated, appearing in nearly 95% of investment treaties and featuring in approximately 83% of all treaty-based investor-State arbitrations for which data is available.
• Despite various attempts by states to clarify FET in 'new generation' agreements—such as linking it to customary international law or specifying violating situations—these efforts have often been ineffective, with new treaties frequently producing the same results as older ones.
• The lack of binding precedents and the ad hoc nature of the investor-State dispute settlement (ISDS) system contribute to inconsistent interpretations of FET, even when the same treaty or identical conduct is involved.
• The broad and unpredictable application of FET clauses can lead to 'regulatory chill', where states are deterred from exercising their regulatory powers due to the risk of ISDS claims.
• The document identifies eight types of conduct that may be considered a breach of FET: denial of justice, breach of due process, frustration of legitimate expectations, legal framework instability, lack of transparency, arbitrary decision-making, bad faith, and coercion or harassment.
• To mitigate risks, the brief suggests three policy options: excluding the FET standard (as seen in the Brazil Model or the Panafrican Investment Code), using alternative terms like 'fair administrative treatment' (as in the Ethiopia-Qatar BIT), or using a strictly limited FET standard with a closed list of violations and clear interpretive guidance.

APA

Sarmiento, F., & Nikièma, S. (2022). Trato justo y equitativo: ¿Por qué es importante y qué se puede hacer? International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-11/fair-equitable-treatment-es.pdf

Chicago

Sarmiento, Florencia, and Suzy Nikièma. Trato justo y equitativo: ¿Por qué es importante y qué se puede hacer? International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-11/fair-equitable-treatment-es.pdf.

Wikipedia

{{cite report |last1=Sarmiento |first1=Florencia |last2=Nikièma |first2=Suzy |title=Trato justo y equitativo: ¿Por qué es importante y qué se puede hacer? |publisher=International Institute for Sustainable Development |date=November 2022 |url=https://www.iisd.org/system/files/2022-11/fair-equitable-treatment-es.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sarmiento2022trato, author = {Sarmiento, Florencia and Nikièma, Suzy}, title = {{Trato justo y equitativo: ¿Por qué es importante y qué se puede hacer?}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = nov, url = {https://www.iisd.org/system/files/2022-11/fair-equitable-treatment-es.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }