The author is grateful to Noor Davies (Partner, White & Case) for reviewing the draft of this note and providing useful comments, and to Elise Roussel (Trainee, White & Case) for her assistance in the finalization of this note. The views presented in this note do not necessarily reflect the position of White & Case or its clients.
The notions of arbitrariness and discrimination are relevant in several fields of public international law.1 It is commonplace for investment treaties to include the prohibition of arbitrary and discriminatory treatment,2 sometimes referred to as the non-impairment provision,3 albeit with varying language relating to the arbitrary element, which can include terms such as “arbitrary”,4 “unreasonable”,5 and “unjustifiable”6 – all terms that Tribunals have deemed substantially similar and interchangeable.7
International Covenant on Civil and Political Rights, 16 December 1966, entered into force on 23 March 1976, Article 6(1), 9(1), 12(4), 17(1); International Criminal Court Statute, Rome, 17 July 1998, entered into force on 1 July 2002, Article 55(1)(d); Universal Declaration of Human Rights, Paris, 10 December 1948, Article 17(2); Protocol to the European Convention on Human Rights and Fundamental Freedoms, signed in Paris on 20 March 1952, entered into force on 1 June 2010, Article 1; Treaty on the Functioning of the European Union, 13 December 2007, entered into force on 1 December 2009, Part Two; General Agreement on Tariffs and Trade, 30 October 1947, entered into force on 1 January 1948.
Agreement between the Government of the Republic of San Marino and the Government of the Republic of Azerbaijan on the Promotion and Reciprocal Protection of Investments, 25 September 2015, entered into force on 25 February 2016, Article 2(3); Agreement between the Government of the United Arab Emirates and the Government of the Republic of Mauritius for the Promotion and Reciprocal Protection of Investments, 20 September 2015, entered into force on 28 December 2017, Article 3(2); Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Argentine Republic, 20 October 1992, entered into force on 1 October 1994, Article 3(1); Treaty between the Government of the United States of America and the Government of the Republic of Georgia concerning the Encouragement and Reciprocal Protection of Investment, 7 March 1994, entered into force on 10 August 1999, Article II(3)(b).
Saluka Investments BV v. The Czech Republic, PCA Case No. 2001-04, Partial Award, 17 March 2006, paras. 457-481; CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award, 12 May 2005, para. 290; Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award, 24 July 2008, para. 694; Occidental Exploration and Production Company v Republic of Ecuador, Final Award, 1 July 2004, paras. 159-166; MTD Equity Sdn. Bhd. and MTD Chile S.A. v Republic of Chile, ICSID Case No. ARB/0l/7, Award, 25 May 2004, paras. 190-196; Sergey Paushok, CJSC Golden East Company and CJSC Vostokneftgaz Company v. Government of Mongolia, Award on Jurisdiction and Liability, 28 April 2011, paras. 306-307; Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1, Award, 1 December 2011, paras. 323-325; Tethyan Copper Company Pty Limited v. Islamic Republic of Pakistan, ICSID Case No. ARB/12/1, Decision on Jurisdiction and Liability, 10 November 2017, paras. 1357-1363; Veijo, H., Arbitrary and Unreasonable Measures, in Reinisch, A., Standards of Investment Protection, 2008, p. 89.
Treaty between the United States of America and the Argentine Republic concerning the Reciprocal Encouragement and Protection of Investment, 14 November 1991, entry into force 20 October 1994, Article II(2)b; Agreement between the Argentine Republic and the Republic Italy for the Promotion and Protection of Investments, 22 May 1990, entered into force on 14 October 1993, Article 2(2); Federal Republic of Germany and Bolivia, Treaty concerning the Promotion and Mutual Protection of Investments, 23 March 1987, entered into force on 9 November 1990, Article 2(2); Treaty between the Government of the United States of America and the Government of Romania concerning the Reciprocal Encouragement and Protection of Investment, 28 May 1992, entry into force 15 January 1994, Article II(2); Treaty between the United States of America and the Republic of Turkey concerning the Reciprocal Encouragement and Protection of Investments, 3 December 1985, entered into force on 18 May 1990, Article II(3); Treaty for the Mutual Protection and Promotion of Investments made between Germany and Argentina, 9 July 1991, entered into force on 8 November 1993, Article 2(3); Treaty between the United States of America and Ukraine concerning the Encouragement and Reciprocal Protection of Investment, 4 March 1994, entered into force on 16 November 1996, Article II(3)(b).
Agreement between the Government of the Republic of Austria and the Government of the Republic of Armenia, 17 October 2001, entered into force on 1 February 2003, Article 3; Agreement between the Government of the People’s Republic of China and the Government of Argentine Republic on the Promotion and Reciprocal Protection of Investments, 5 November 1992, entered into force on 1 August 1994, Article 3(1); Agreement between the Government of Finland and the Government of the Republic of Argentina on the Promotion and Reciprocal Protection of Investments, 5 November 1993, entered into force on 3 May 1996, Article 2(2); Agreement between the Hashemite Kingdom of' Jordan and the Republic of Austria for the Promotion and Protection of Investments, 23 January 2001, entered into force on 25 November 2001, Article 3(2); Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Argentine Republic, 20 October 1992, entered into force on 1 October 1994, Article 3(1); Agreement between the Czech and Slovak Republic and the Kingdom of Denmark for the Promotion and Reciprocal Protection of Investments, 6 March 1991, entered into force on 18 November 2009, Article 3(1); Agreement between the Government of the Czech Republic and the Government of the State of Israel for the Reciprocal Promotion and Protection of Investments, 23 September 1997, entered into force on 16 March 1997, Article 2(2); Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic, 29 April 1991, entered into force on 1 October 1992, Article 3(3); Agreement between the Government of the United Kingdom and of Great Britain and Northern Ireland and the Government of the Czech and Slovak Federal Republic for the Promotion and Protection of Investments, 10 July 1990, entered into force on 26 October 1992, Article 2(2); Agreement between the Government of the United Kingdom and of Great Britain and Northern Ireland and the Government on the Socialist Republic of Romania for the Mutual Protection of Investments of Capital, 19 March 1976, entered into force on 10 January 1996, Article 2(2); Agreement between the Government of the United Kingdom and of Great Britain and Northern Ireland and the Government of the Republic of Kazakhstan for the Promotion and Protection of Investments, 23 November 1995, entered into force on 23 November 1995, Article 2(2).
Agreement between the Government of Australia and the Government of the Argentine Republic on the Promotion and Protection of Investment, 23 August 1995, entered into force 11 January 1997, Article 4; Agreement between the Government of the Republic of Croatia and the Government of the Argentine Republic on the Promotion and Reciprocal Protection of Investments, 2 December 1994, entered into force on 1 June 1996, Article 3(1); Agreement between the Government of the Republic of Bulgaria and the Government of the Republic of Argentina on the Promotion and Reciprocal Protection of Investments, 21 September 1993, entered into force on 11 March 1997, Article 2(4); Agreement between the Government of the Republic of Jamaica and the Government of the Argentine Republic on the Promotion and Reciprocal Protection of Investments, 18 February 1994, entered into force on 1 December 1995, Article 3(1); Agreement between the Hellenic Republic and the Federal Government of the Federal Republic of Yugoslavia on the reciprocal Promotion and Protection of Investments, 25 June 1997, entered into force on 8 May 1998, Article 2(2).
Cervin Investissements S.A. and Rhone Investissements S.A. v. Republic of Costa Rica, ICSID Case No. ARB/13/2, Award, 7 March 2017, para. 527; National Grid PLC v. The Argentine Republic, Award, 3 November 2008, para. 197; Plama Consortium Ltd. v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 184; AES Summit Generation Ltd. and AES-Tisza Eromu Kft. v. Republic of Hungary (II), ICSID Case No. ARB.07/22, Award, 23 September 2010, para. 10.3.37; BG Group Plc v. The Republic of Argentina, Final Award, 24 December 2007, para. 341; Siemens A.G. v. The Argentina Republic, ICSID Case No. ARB/02/8, Award, 6 February 2007, para. 318; US Model Bilateral Investment Treaty (2012), Article 8(8).
Most investment treaties use the disjunctive “or” to separate “arbitrary” from “discriminatory”,8 which means a measure that is either arbitrary or discriminatory would be sufficient for breaching this standard,9 while others use the conjunctive “and”.10 Tribunals have interpreted those provisions by requiring the violation of both or one of those elements, depending on the wording of the treaty, in order to establish a breach of the standard.11
US Model Bilateral Investment Treaty (2012), Article 8(8); Agreement between the Government of the Republic of India and the Government of the United Arab Emirates on the Promotion and Protection of Investments), 12 December 2013; Treaty with the Czech and Slovak Federal Republic concerning the Reciprocal Encouragement and Protection of Investment, 22 October 1991, entered into force on 19 December 1992, Article II(2)(b); Agreement Between the Government of the Republic of Croatia and the Government of the Republic of Zimbabwe on the Reciprocal Promotion and Protection of Investments, 18 February 2000, Art. 3(1); Korea, Republic of - Trinidad and Tobago BIT (2002), 5 November 2002, Art 2(3).
Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, para. 219; Azurix Corp. v. The Argentine Republic (I), ICSID Case No. ARB/01/12, Award, 14 July 2006, para. 391; Joseph Charles Lemire v. Ukraine (II), ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, paras. 259-260; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Award, 1 June 2009, para. 457.
Several authors suggest that arbitrary impairment of the rights of aliens by the State may constitute a violation of customary international law.12 Having its roots in customary international law, the notion of arbitrariness has been crystalized through decisions of international tribunals13 and has evolved14 to become an independent standard of protection.15
It is widely accepted that discrimination is “prohibited by customary international law in the field of expropriation.”16
Verdross, A., Les règles internationales concernant le traitement des étrangers, 1931, pp. 358-359.
Kriebaum, U., Arbitrary/Unreasonable or Discriminatory Measures in Bungenberg, M., Griebel, J., Hobe, S. and Reinisch, A. (eds.), International Investment Law, 2013, p. 791.
Reisman, W.M., Crawford, J.R. and Bishop, D.R., (eds.), Chapter 8: Violations of Investor Rights Under Customary International Law, in Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed., 2014, pp. 583-752, Section 8.04.
Schreuer, C., Protection against Arbitrary or Discriminatory Measures, 2007, p. 7.
Amoco International Finance Corporation v. Iran, IUSCT Case No. 56, Partial Award (Award No. 310-56-3), 14 July 1987, para. 140; Liberian Eastern Timber Corporation (“LETCO”) v. The Government of the Republic of Liberia, ICSID Case No. ARB/83/2, Award, 31 March 1986, para. 72; Sedco, Inc. v. National Iranian Oil Company and The Islamic Republic of Iran, IUSCT Case Nos. 128 and 129, Separate Opinion of Charles N. Brower, para. 42; Maniruzzaman, A.F.M., Expropriation of Alien Property and the Principle of Non-Discrimination in International Law of Foreign Investment: An Overview, Journal of Transnational Law & Policy, 1998, pp. 67-70.
Investment treaties rarely define “arbitrary” or “unreasonable”. In defining those terms, tribunals typically refer to their dictionary definitions,17 or adopt18 the approach of the International Court of Justice (ICJ) in the ELSI case,19 which defined arbitrariness as "a wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of juridical propriety."20
In the same vein, Professor Schreuer has defined as "arbitrary" a measure that:
Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, para. 221; Occidental Exploration and Production Co. v. Republic of Ecuador (I), LCIA Case No. UN3467, Award, 1 July 2004, para. 162; Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Award, 6 February 2007, para. 318; Tza Yap Shum v. Republic of Peru, ICSID Case No. ARB/07/6, Award, 7 July 2011, para. 187; Azurix Corp. v. The Argentine Republic (I), ICSID Case No. ARB/01/12, Award, 14 July 2006, para. 392.
Azurix Corp. v. The Argentine Republic (I), ICSID Case No. ARB/01/12, Award, 14 July 2006, para. 391; Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award, 12 October 2005, para. 176; Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Award, 6 February 2007, para. 318; Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of Ecuador, ICSID Case No. ARB/04/19, Award, 18 August 2008, para. 378; The Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/3, Award, 26 June 2003, para. 131; LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc .v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 146.
Hamrock, K.J., The ELSI Case: Toward an International Definition of Arbitrary Conduct, Tex. Int'l L. J. 1992, 837.
Elettronica Sicula S.p.A. (ELSI) (United States of America v. Italy), Judgment, 20 July 1989, para. 128; Neer and Neer (U.S.A) v. United Mexican States, Decision, para. 4.
Elettronica Sicula SpA (ELSI) (United States of America v. Italy), International Court of Justice, Judgment, 20 July 1989, ICJ Reports 1989, para. 128; Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11, Award, 12 October 2005, paras. 177, 178; Toto Costruzioni Generali S.p.A. v. Republic of Lebanon, ICSID Case No. ARB/07/12, Award, 7 June 2012, para. 157; Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of Ecuador, ICSID Case No. ARB/04/19, para. 381; Enron Creditors Recovery Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Award, 22 May 2007, para. 281; Sempra Energy International v. Argentine Republic, ICSID Case No. ARB/02/16, Award, 28 September 2007, para. 318; Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 873; Inversión y Gestión de Bienes, IGB, S.L. and IGB18 Las Rozas, S.L. v. Kingdom of Spain, ICSID Case No. ARB/12/17, Award (Excerpts), 14 August 2015 [Spanish], para. 193; Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 873; Cervin Investissements S.A. and Rhone Investissements S.A. v. Republic of Costa Rica, ICSID Case No. ARB/13/2, Award, 7 March 2017, para. 523; Glencore International A.G. and C.I. Prodeco S.A. v. Republic of Colombia, ICSID Case No. ARB/16/6, Award, 27 August 2019, para. 1448; Jorge Luis Blanco, Joshua Dean Nelson and Tele Fácil México, S.A. de C.V. v. United Mexican States, ICSID Case No. UNCT/17/1, Final Award, 5 June 2020, para. 324; Lion Mexico Consolidated L.P. v. United Mexican States, ICSID Case No. ARB(AF)/15/2, Award, 20 September 2021, para. 289.
EDF (Services) Limited v. Republic of Romania, ICSID Case No. ARB/05/13, Award, 8 October 2009, para. 303; Joseph Charles Lemire v. Ukraine (II), ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, para. 262; Global Telecom Holding S.A.E. v. Canada, ICSID Case No. ARB/16/16, Award, 27 March 2020, para. 561; SAUR International SA v. Republic of Argentina, ICSID Case No. ARB/04/4, Decision on Jurisdiction and Liability, 6 June 2012, para. 488; Zhongshan Fucheng Industrial Investment Co. Ltd. v. Federal Republic of Nigeria, Final Award, 26 March 2021, para. 129; Glencore International A.G. and C.I. Prodeco S.A. v. Republic of Colombia, ICSID Case No. ARB/16/6, Award, 27 August 2019, para. 1449; OperaFund Eco-Invest SICAV PLC and Schwab Holding AG v. Kingdom of Spain, ICSID Case No. ARB/15/36, Award, 6 September 2019, para. 588; Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 491; Bear Creek Mining Corporation v. Republic of Peru, ICSID Case No. ARB/14/21, Award, 30 November 2017, para. 547 ; Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, para. 578; Pawlowski AG and Project Sever s.r.o. v. Czech Republic, ICSID Case No. ARB/17/11, Award, 1 November 2021, para. 298.
AES Summit Generation Limited and AES-Tisza Erömü Kft v. Republic of Hungary (II), ICSID Case No. ARB/07/22, Award, 23 September 2010, paras. 10.3.7, 10.3.9; Bureau Veritas, Inspection, Valuation, Assessment and Control, BIVAC B.V. v. Republic of Paraguay, ICSID Case No. ARB/07/9, Further Decision on Objections to Jurisdiction, 9 October 2012, para. 268; Valeri Belokon v. Kyrgyz Republic, PCA Case No. AA518, Award, 24 October 2014, para. 260; Saluka v Czech Republic, PCA Case No. 2001-04, Partial Award, 17 March 2006, para. 460; Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 874; Joshua Dean Nelson v. United Mexican States, ICSID Case No. UNCT/17/1, Final Award, 5 June 2020, para. 325; Cairn Energy PLC and Cairn UK Holdings Limited v. The Republic of India, PCA Case No. 2016-07, Final Award, 21 December 2020, para. 1787; Stadtwerke München GmbH and others v. Kingdom of Spain, ICSID Case No. ARB/15/1, Award, 2 December 2019, para. 318; Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 492; Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Award, 25 November 2015, para. 179; Ioan Micula, Viorel Micula and others v. Romania (I), ICSID Case No. ARB/05/20, Final Award, 11 December 2013, para. 525.
See further Discrimination in FET, Non-discriminatory Expropriation
The term "discriminatory" is likewise not defined in investment treaties. As the tribunal in Lemire v. Ukraine observed: “To amount to discrimination, a case must be treated differently from similar cases without justification; a measure must be ‘discriminatory and expose the claimant to sectional or racial prejudice’; or a measure must ‘target Claimant’s investments specifically as foreign investments’.”24
Discrimination may be de facto or de iure.25 De iure discrimination refers to measures that on their face treat people or entities differently, whereas de facto discrimination refers to measures that are neutral on their face, but result in differential treatment.26 In determining whether particular treatment is discriminatory, tribunals take into account a number of factors, including, for example, the basis of comparison (what constitutes “like circumstances”)27 and justification for differential treatment.28 While discriminatory intent is usually not required to find discrimination,29 proof of discriminatory intent can support a finding of discrimination.30
Joseph Charles Lemire v. Ukraine (II), ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, para. 261; Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 184; Saluka Investments B.V. v. The Czech Republic, PCA Case No. 20001-04, Partial Award, 17 March 2006, para. 307; Cengiz Insaat Sanayi ve Ticaret A.S. v. Libya, ICC Case No. 21537/ZF/AYZ, Award, 7 November 2018, para. 525; Lidercón, S.L. v. Republic of Peru, ICSID Case No. ARB/17/9, Award, 6 March 2020, para. 169; Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11 September 2007, para. 368.
Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Liability, 27 December 2010, para. 211; Pope & Talbot v. Government of Canada, Award on the Merits of Phase 2, 10 April 2001, para. 43; Archer Daniels Midland Company and Tate & Lyle Ingredients Americas, Inc. v. United Mexican States, ICSID Case No. ARB(AF)/04/5, Award, 21 November 2007, para. 193; Corn Products International Inc. v. United Mexican States, ICSID Case No. ARB(AF)/04/1, Decision on Responsibility, 15 January 2008, para. 115; Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11 September 2007, para. 368; Indian Metals & Ferro Alloys Ltd v. Republic of Indonesia, PCA Case No. 2015-40, Final Award, 29 March 2019, para. 247.
In determining whether particular treatment is discriminatory, tribunals take into account a number of factors, including, for example:
Lidercón, S.L. v. Republic of Peru, ICSID Case No. ARB/17/9, Award, 6 March 2020, para. 169; Cengiz Insaat Sanayi ve Ticaret A.S. v. Libya, ICC Case No. 21537/ZF/AY-Z, Award, 7 November 2018, paras. 530, 532; South American Silver Limited v. Plurinational State of Bolivia, PCA Case No. 2013-15, Award, 30 August 2018, para. 710; Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, para. 715; Renée Rose Levy de Levi v. Republic of Peru, ICSID Case No. ARB/10/17, Award, 26 February 2014, para. 396; Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Award, August 27, 2009, para. 401; Nykomb Synergetics Technology Holding AB v. The Republic of Latvia, SCC Case No. 118/2001, Arbitral Award, 16 December 2003, para. 145; CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award, 12 May 2005, para. 293; BG Group Plc. v. The Republic of Argentina, Final Award, 24 December 2007, para. 357; Metalpar S.A. and Buen Aire S.A. v. Argentine Republic, ICSID Case No. ARB/03/5, Award on the Merits, 6 June 2008, para. 164; Occidental Exploration and Production Co. v. Republic of Ecuador (I), LCIA Case No. UN3467, Award, 1 July 2004, para. 173; Enron Creditors Recovery Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Award, 22 May 2007, para. 282; Sempra Energy International v. Argentine Republic, ICSID Case No. ARB/02/16, Award, 28 September 2007, para. 319; National Grid plc v. The Argentine Republic, Award, 3 November 2008, para. 200; Methanex Corporation v. United States of America, Final Award of the Tribunal on Jurisdiction and Merits, 3 August 2005, para. IV.3.12; ECE Projektmanagement International GmbH and Kommanditgesellschaft PANTA Achtundsechzigste Grundstücksgesellschaft mbH & Co v. The Czech Republic, PCA Case No. 2010-5, Award, 19 September 2013, para. 4.832; Pope & Talbot Inc. v. The Government of Canada, UNCITRAL, Award on the Merits of Phase 2, 10 April 2001, para. 78; Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/01, Decision on Liability, 27 December 2010, para. 210; Sergei Paushok, CJSC Golden East Company and CJSCVostokneftegaz Company v. The Government of Mongolia, Award on Jurisdiction and Liability, 28 April 2011, para. 315; S.D. Myers, Inc. v. Government of Canada, Partial Award (Merits), 13 November 2000, para. 250; Champion Trading Company and Ameritrade International, Inc. v. Arab Republic of Egypt, ICSID Case No. ARB/02/9, Award, 27 October 2006, para. 130; Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 184; Mercer International Inc. v. Government of Canada, ICSID Case No. ARB(AF)/12/3, Award, 6 March 2018, paras. 7.6, 7.9; Standard Chartered Bank (Hong Kong) Limited v. United Republic of Tanzania II, ICSID Case No. ARB/15/41, Award of the Tribunal, 11 October 2019, para. 395; Resolute Forest Products Inc. v. Canada, PCA Case No. 2016-13, Final Award, 25 July 2022, para. 558.
Iurii Bogdanov and Yulia Bogdanova v. Republic of Moldova (IV), SCC Case No. 091/2012, Final Award, 16 April 2013, para 245-246; Mercer International Inc. v. Government of Canada, ICSID Case No. ARB(AF)/12/3, Award, 6 March 2018, para. 7.6; Inversión y Gestión de Bienes, IGB, S.L. and IGB18 Las Rozas, S.L. v. Kingdom of Spain, ICSID Case No. ARB/12/17, Award (Excerpts), 14 August 2015 [Spanish], para. 193; Standard Chartered Bank (Hong Kong) Limited v. United Republic of Tanzania II, ICSID Case No. ARB/15/41, Award of the Tribunal, 11 October 2019, para. 395, 441; Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Liability, 27 December 2010, para. 344; Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, para. 715; AES Summit Generation Limited and AES-Tisza Erömü Kft. v. Republic of Hungary, ICSID Case No. ARB/07/22, Award, 23 September 2010, para. 103.53; LSF-KEB Holdings SCA and others v. Republic of Korea, ICSID Case No. ARB/12/37, Award, 30 August 2022, para. 479.
Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11 September 2007, para. 368; Amoco International Finance Corporation v. The Government of the Islamic Republic of Iran, IUSCT Case No. 56, Partial Award, 14 July 1987, para. 142; El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15, Award, 31 October 2011, para. 315; Enron Creditors Recovery Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Award, 22 May 2007, para. 282; Sempra Energy International v. Argentine Republic, ICSID Case No. ARB/02/16, Award, 28 September 2007, para. 319; National Grid plc v. The Argentine Republic, Award 3 November 2008, paras. 200-201; Rusoro Mining Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/12/5, Award, 22 August 2016, para. 559; Saluka Investments BV v. The Czech Republic, PCA Case No. 2001-04, Partial Award, 17 March 2006, paras. 313-315; S.D. Myers, Inc. v. Government of Canada, UNCITRAL NAFTA, Partial Award, 13 November 2000, para. 245; Pope & Talbot Inc v Canada, NAFTA, Award on the Merits of Phase 2, 10 April 2001, para. 75; Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, para. 616; Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB(AF)/99/1, Award, 16 December 2002, para. 170; The American Independent Oil Company v. The Government of the State of Kuwait, Final Award, 24 March 1982, para. 87; Jorge Luis Blanco, Joshua Dean Nelson and Tele Fácil México, S.A. de C.V. v. United Mexican States, ICSID Case No. UNCT/17/1, Final Award, 5 June 2020, para. 352.
Occidental Exploration and Production Co. v. Republic of Ecuador(I), LCIA Case No. UN3467, Award, 1 July 2004, para. 177; Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Award, 6 February 2007, para. 321; Eastern Sugar B.V. v. The Czech Republic, SCC Case No. 088/2004, Partial Award, 27 March 2007, para. 338; Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 886; LG&E Energy Corp., LG&E Capital Corp., and LG&E International Inc .v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 146; S.D. Myers, Inc. v. Government of Canada, Partial Award (Merits), 13 November 2000, para. 254; Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB(AF)/99/1, Award, 16 December 2002, para. 183; Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No ARB/05/8, Award, 11 September 2007, para. 368; Resolute Forest Products Inc. v. Canada, PCA Case No. 2016-13, Final Award, 25 July 2022, para. 546.
Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, para. 231; LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc .v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, paras. 146; Methanex Corporation v. United States of America, Final Award of the Tribunal on Jurisdiction and Merits, 3 August 2005, part IV, ch. 3, para. 12.
Tribunals usually held that the burden of proof is on the claimant,34 even if some tribunal reversed the burden of proof.35
Mercer International, Inc. v. Canada, ICSID Case No. ARB(AF)/12/3, Award, 6 March 2018, paras. 7.11-7.16; Inversión y Gestión de Bienes, IGB, S.L. and IGB18 Las Rozas, S.L. v. Kingdom of Spain, ICSID Case No. ARB/12/17, Award (Excerpts), 14 August 2015 [Spanish], para. 193; Reinhard Hans Unglaube v. Republic of Costa Rica, ICSID Case No. ARB/09/20, Award, 16 May 2012, para. 267; Marion Unglaube v. Republic of Costa Rica, ICSID Case No. ARB/08/1, Award, 16 May 2012, para. 267.
Nykomb Synergetics Technology Holding AB v Latvia, Energy Charter Treaty, Award, 16 December 2003, para. 34; Pope & Talbot Inc v Canada, NAFTA, Award on the Merits of Phase 2, 10 April 2001, para. 78; Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB(AF)/99/1, Award, 16 December 2002, para. 183.
See further Fair and Equitable Treatment; Discrimination in FET.
A number of tribunals have considered that the prohibition against arbitrary and discriminatory treatment and the FET standard are closely related, and that an arbitrary or discriminatory measure is in itself contrary to FET.36
Lidercón, S.L. v. Republic of Peru, ICSID Case No. ARB/17/9, Award, 6 March 2020, para. 167; Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016, paras. 543-545; Saluka Investments BV v. The Czech Republic, PCA Case No.2001-04, Partial Award, 17 March 2006, paras. 297; MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Chile, ICSID Case No. ARB/01/7, Award, 25 May 2004, para. 196; Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16, Award, 29 July 2008, para. 681; Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award, 24 July 2008, para. 692; Impregilo S.p.A. v. Argentine Republic (I), ICSID Case No. ARB/07/17, Award, 21 June 2011, para. 333; El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15, Award, 31 October 2011, para. 230; PSEG Global, Inc., The North American Coal Corporation, and Konya Ingin Electrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, ICSID Case No. ARB/02/5, Award, 19 January 2007, paras. 261-262; Cervin Investissements S.A. and Rhone Investissements S.A. v. Republic of Costa Rica, ICSID Case No. ARB/13/2, Award, 7 March 2017, para. 527; El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15, Award, 31 October 2011, para. 230; PSEG Global, Inc., The North American Coal Corporation, and Konya Ingin Electrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, ICSID Case No. ARB/02/5, Award, 19 January 2007, paras. 261-262; CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award, 12 May 2005, paras. 290, 295; TECO Guatemala Holdings, LLC v. Republic of Guatemala, ICSID Case No. ARB/10/23, Award, 19 December 2013, para. 454; Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/, Award, 26 June 2003, paras. 135, 137; Waste Management Inc. v. United Mexican States, ICSID Case No. ARB(AF)/00/3, Award, 30 April 2004, para. 98; Sergei Paushok, CJSC Golden East Company and CJSCVostokneftegaz Company v. The Government of Mongolia, Award on Jurisdiction and Liability, 28 April 2011, para. 253; Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Award, 27 August 2009, para. 178; Joseph Charles Lemire v. Ukraine (II), ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, paras. 284, 418; Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1 , Award, 7 December 2011, para. 314; RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Responsibility and on the Principles of Quantum, 30 November 2018, paras. 260, 428; UAB E energija (Lithuania) v. Republic of Latvia, ICSID Case No. ARB/12/33, Award of the Tribunal, 22 December 2017, para. 834; Invesmart v. Czech Republic, Award, 26 June 2009, para. 200; OAO “Tatneft” v. Ukraine, PCA Case No. 2008-8, Award, 29 July 2014, paras. 394-395, 408; Cairn Energy PLC and Cairn UK Holdings Limited v. The Republic of India, PCA Case No. 2016-07, Final Award, 21 December 2020, para. 1722; Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11 September 2007, para. 280, 287; Quasar de Valores SICAV S.A., Orgor de Valores SICAV S.A., GBI 9000 SICAV S.A. and ALOS 34 S.L. v. The Russian Federation, SCC Case No. 24/2007, Judgment of the Svea Court of Appeal, 18 January 2016, para. 30; Reinhard Hans Unglaube v. Republic of Costa Rica, ICSID Case No. ARB/09/20, Award, 16 May 2012, para. 242; Marion Unglaube v. Republic of Costa Rica, ICSID Case No. ARB/08/1, Award, 16 May 2012, para. 242; Unión Fenosa Gas, S.A. v. Arab Republic of Egypt, ICSID Case No. ARB/14/4, Award, 31 August 2018, para. 9.51; Jan Oostergetel and Theodora Laurentius v. The Slovak Republic, Final Award, 23 April 2012, para. 221; LESI, S.p.A. and Astaldi, S.p.A. v. People's Democratic Republic of Algeria, ICSID Case No. ARB/05/3, Award, 12 November 2008, para. 151; Ioan Micula, Viorel Micula and others v. Romania (I), ICSID Case No. ARB/05/20, Final Award, 11 December 2013, para. 522, 529; Bureau Veritas, Inspection, Valuation, Assesment and Control, BIVAC B.V. v. Republic of Paraguay, ICSID Case No. ARB/07/9, Further Decision on Objections to Jurisdiction, 9 October 2012, paras. 267-268; Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012, para. 7.74; British Caribbean Bank Ltd. v. The Government of Belize, PCA Case No. 2010-18, Award, 19 December 2014, para. 282; Stans Energy Corp. and Kutisay Mining LLC v. Kyrgyz Republic (I), MCCI Case No. A-2013/29, Award, 30 June 2014, paras. 253-255; Víctor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award, 8 May 2008, para. 670; Fouad Alghanim & Sons Co. for General Trading & Contracting, W.L.L. and Mr. Fouad Mohammed Thunyan Alghanim v. Hashemite Kingdom of Jordan, ICSID Case No. ARB/13/38, Award, 14 December 2017, paras. 286; Bosh International, Inc. and B&P, LTD Foreign Investments Enterprise v. Ukraine, ICSID Case No. ARB/08/11, Award, 25 October 2012, para. 212; Deutsche Telekom v. India, PCA Case No. 2014-10, Interim Award, 13 December 2017, paras. 333-336; Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/14/32, Decision on Jurisdiction, 29 June 2018, para. 242; Indian Metals & Ferro Alloys Ltd v. Republic of Indonesia, PCA Case No. 2015-40, Final Award, 29 March 2019, paras. 226, 228; GPF GP S.à.r.l v. Republic of Poland, SCC Case No. V2014/168, Final Award, 29 April 2020, para. 543; Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Liability, 27 December 2010, para. 110; CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited and Telcom Devas Mauritius Limited v. Republic of India, PCA Case No. 2013-09, Award on Jurisdiction and Merits, 25 July 2016, para. 480; Glamis Gold Ltd. v. United States of America, Award, 8 June 2009, para. 625; Eastern Sugar B.V. v. Czech Republic, SCC Case No. 088/2004, Partial Award, 27 March 2007, para. 338; Philip Morris Brand Sàrl (Switzerland), Philip Morris Products S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Award, 8 July 2016, para. 323; B3 Croatian Courier Coöperatief U.A. v. Republic of Croatia, ICSID Case No. ARB/15/5, Award (Excerpts), 5 April 2019, paras. 838-839; CEF Energia BV v. Italian Republic, SCC Case No. 2015/158, Award, 16 January 2019, para. 185; PAO Tatneft (formerly OAO Tatneft) v. Ukraine, PCA Case No. 2008-8, Award on the Merits, 29 July 2014, paras. 394, 405; SunReserve Luxco Holdings S.À.R.L, SunReserve Luxco Holdings II S.À.R.L and SunReserve Luxco Holdings III S.À.R.L v. Italian Republic, SCC Case No. V2016/32, Final Award, 25 March 2020, para. 688; Bernhard von Pezold and others v. Republic of Zimbabwe, ICSID Case No. ARB/10/15, Award, 28 July 2015, para. 546; Joshua Dean Nelson v. United Mexican States, ICSID Case No. UNCT/17/1, Final Award, 5 June 2020, para. 322; Antaris Solar GmbH and Dr. Michael Göde v. The Czech Republic, PCA Case No. 2014-01, Award, 2 May 2018, para. 360; Krederi Ltd. v. Ukraine, ICSID Case No. ARB/14/17, Award, 2 July 2018, para. 664; Alpha Projektholding GmbH v. Ukraine, ICSID Case No. ARB/07/16, Award, 8 November 2010, para. 420; Infracapital F1 S.à r.l. and Infracapital Solar B.V. v. Kingdom of Spain, ICSID Case No. ARB/16/18, Decision on Jurisdiction, Liability and Directions on Quantum, 13 September 2021, paras. 657-658; Alejandro Diego Diaz Gaspar v. Costa Rica, ICSID Case No. ARB/19/13, Award, 29 June 2022, for. 507.
Relying on these considerations, some tribunals went further and excluded the need for a separate examination under the FET standard.37
Anglo American PLC v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/14/1, Award, 18 January 2019, para. 443; Saluka Investments BV v. The Czech Republic, PCA Case No. 2001-04, Partial Award, 17 March 2006, para. 460; MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Chile, ICSID Case No. ARB/01/7, Award, 25 May 2004, para. 196; CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award, 12 May 2005, para. 290; Impregilo S.p.A. v. Argentine Republic (I), ICSID Case No. ARB/07/17, Award, 21 June 2011, para. 333; M.C.I. Power Group, L.C. and New Turbine, Inc. v. Republic of Ecuador, ICSID Case No. ARB/03/6, Award, 31 July 2007, paras. 371; Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16, Award, 29 July 2008, para. 681; Joseph Charles Lemire v. Ukraine (II), ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, para. 259; PSEG Global, Inc., The North American Coal Corporation, and Konya Ingin Electrik Üretim ve Ticaret Limited Sirketi v. Republic of Turkey, ICSID Case No. ARB/02/5, Award, 19 January 2007, paras. 261-262.
In contrast, other tribunals have insisted that the non-impairment standard and the FET standard are separate standards of protection,38 and provided independent findings for violations of each standard.39
Schreuer, C., Protection against Arbitrary or Discriminatory Measures, in Rogers, C.A. and Alford, R.P. (eds.), The Future of Investment, 2009:
“despite this tendency of some tribunals to amalgamate the prohibition of arbitrary or discriminatory measures with FET, there are strong arguments in favor of treating the two standards as conceptually different” and proceeding to discuss these differences”
Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008, paras. 183-184; Occidental Exploration and Production Co. v. Republic of Ecuador (I), LCIA Case No. UN3467, Award, 1 July 2004, paras. 159, 161-167; Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, paras. 214-288; Noble Ventures, Inc v. Romania, ICSID Case No. ARB/01/11, Award, 12 October 2005, paras. 175-180; Azurix Corp. v. The Argentine Republic (I), ICSID Case No. ARB/01/12, Award, 14 July 2006, paras. 390-393; Siemens A.G. v. The Argentine Republic, ICSID Case No. ARBI02/8, Award, 6 February 2007, paras. 319-321; Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of Ecuador, ICSID Case No. ARB/04/19, Award, 18 August 2008, para. 377; Alex Genin, Eastern Credit Limited, Inc. and A.S. Baltoil v. The Republic of Estonia, ICSID Case No. ARB/99/2, Award June 25, 2001, paras. 368-371.
LG&E Energy Corp., LG&E Capital Corp., and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability, 3 October 2006, para. 162; Duke Energy Electroquil Partners & Electroquil S.A. v. Republic of Ecuador, ICSID Case No. ARB/04/19, Award, 18 August 2008, paras. 364, 383, 491; CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award, 12 May 2005, para. 295.
In cases brought pursuant to the North American Free Trade Agreement (NAFTA), which did not include a separate prohibition against arbitrary and discriminatory treatment, tribunals typically found that arbitrary treatment also violated the FET standard or minimum standard of treatment (as discussed below).40
S.D. Myers, Inc. v. Government of Canada, UNCITRAL, Partial Award (Merits), 13 November 2000, para. 263; Mondev International Ltd. v. United States of America, ICSID Case No. ARB(AF)/99/2, Award, 11 October 2002, para. 127; Waste Management. v. United Mexican States (II), ICSID Case No. ARB(AF)00/3, Award, 30 April 2004, para. 98; International Thunderbird Gaming Corporation v. The United Mexican States, Arbitral Award, 26 January 2006, para. 194; Glamis Gold Ltd. v. United States of America, Award, 8 June 2009, paras. 614, 626, 828; Cargill, Incorporated v. United Mexican States, ICSID Case No. ARB(AF)/05/2, Award, 18 September 2009, para. 293; William Ralph Clayton and others v. Government of Canada, PCA Case No. 2009-04, Award on Jurisdiction and Liability, 17 March 2015, paras. 588, 591.
Discriminatory or arbitrary conduct may also lead to a breach of the minimum standard of treatment.41
International Thunderbird Gaming Corporation v. The United Mexican States, Arbitral Award, 26 January 2006, para. 194; Waste Management, Inc. v. Mexico (II), ICSID Case No. ARB(AF)/00/3, Award, 30 April 2004, para. 98; Railroad Development Corporation v. Republic of Guatemala, ICSID Case No. ARB/07/23, Award, 29 June 2012, para. 235; ADF Group Inc. v. United States of America, ICSID Case No. ARB(AF)/00/1, Award, 9 January 2003, para. 189; CME Czech Republic B.V. v. Czech Republic, UNCITRAL, Partial Award, 13 September 2001, para. 614; Glamis Gold Ltd. v. United States of America, Award, 8 June 2009, paras. 614, 626, 828; S.D. Myers, Inc. v. Government of Canada, Partial Award (Merits), 13 November 2000, para. 263; Cargill, Incorporated v. United Mexican States, ICSID Case No. ARB(AF)/05/2, Award, 18 September 2009, para. 293; William Ralph Clayton and others v. Government of Canada, PCA Case No. 2009-04, Award on Jurisdiction and Liability, 17 March 2015, paras. 588, 591; TECO Guatemala Holdings, LLC v. Republic of Guatemala, ICSID Case No. ARB/10/23, Award, 19 December 2013, paras. 454, 587; Abengoa, S.A. and COFIDES, S.A. v. United Mexican States, ICSID Case No. ARB(AF)/09/2, Award, 18 April 2013, para. 642; Jorge Luis Blanco, Joshua Dean Nelson and Tele Fácil México, S.A. de C.V. v. United Mexican States, ICSID Case No. UNCT/17/1, Final Award, 5 June 2020, para. 322; Eli Lilly and Company v. Canada, ICSID Case No. UNCT/14/2, Final Award, 16 March 2017, para. 416.
The Most-Favoured-Nation and National Treatment standards are sometimes interpreted as prohibiting arbitrary and discriminatory treatment.42 However, these focus on discrimination based on nationality43 rather than all forms of discrimination supposedly covered by provisions on arbitrary or discriminatory measures.44
Ickale Insaat Limited Sirketi v. Turkmenistan, ICSID Case No. ARB/10/24, Award, 8 March 2016, para. 328; Merrill & Ring Forestry L. P. v. Government of Canada, ICSID Case No. UNCT/07/1, ICSID Administrated, Award, 31 March 2010, para. 94; Ronald S. Lauder v. Czech Republic, Award, 3 September 2001, para. 220.
Mondev International Ltd. v. United States of America, ICSID Case No. ARB(AF)/99/2, Award, 11 October 2002, para. 81; Pope & Talbot v. Government of Canada, Award on the Merits of Phase 2, 10 April 2001, paras. 45-63, 68-69, 78; Marvin Roy Feldman Karpa v. United Mexican States, ICSID Case No. ARB(AF)/99/1, Award, 16 December 2002, para. 171; Methanex Corporation v. United States of America, Final Award of the Tribunal on Jurisdiction and Merits, 3 August 2005, paras. 17-37; Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11 September 2007, para. 367; Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft v. Argentine Republic, ICSID Case No. ARB/14/32, Decision on Jurisdiction, 29 June 2018, para. 249; Total S.A. v. Argentine Republic, ICSID Case No. ARB/04/1, Decision on Liability, 27 December 2010, paras. 214, 344.
See further Discrimination in Expropriation.
Arbitrariness and discrimination can also be a criterion to assess the unlawful character of an expropriation.45
While non-discriminatory regulation for a public purpose is not deemed expropriatory,46 general regulation can amount to an indirect expropriation if it intentionally discriminates,47 and if it sufficiently interferes with the investor’s rights.48 Non-regulatory acts, such as courts judgments can also amount to indirect expropriation if they are arbitrary.49
Reisman, W. M., Crawford, J. R. and Bishop, D.R., (eds.), Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed., 2014, pp. 583-752, para. 59:
“It is undeniable that, in principle at least, the test of ‘arbitrariness’ is applicable to the motives and purposes of expropriation, for plainly, if international law recognizes the undoubtedly very wide power of the State to appropriate the property of aliens on the ground that, as under municipal law, the interests of the individual must yield to the general interest and public welfare, the least that can be required of the State is that it should exercise that power only when the measure is clearly justified by the public interest.”
Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 819; Methanex Corporation v. United States of America, Final Award of the Tribunal on Jurisdiction and Merits, 3 August 2005, Part IV, Chapter D, para. 7.
Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16, Decision on Jurisdiction and Liability, 10 April 2013, para. 818; El Paso Energy International Company v. Argentine Republic, ICSID Case No. ARB/03/15, Award, 31 October 2011, para. 241.
Diehl, A., Part II: The Content and Scope of the FET Standard, Chapter 6: The Content of the FET Standard, in The Core Standard of International Investment Protection, 2012, pp. 311-537.
Dolzer, R. and Schreuer, C., VII Standards of Protection, in Principles of International Investment Law, 2nd ed., 2012.
Hamrock, K.J., The ELSI Case: Toward an International Definition of Arbitrary Conduct, Texas International Law Journal, 1992.
Heiskanen, V., Arbitrary and Unreasonable Measures, in Reinisch, A., (ed.) Standards of Investment Protection, 2008.
Lowe, V., Chapter 22: Arbitrary and Discriminatory Treatment, in Kinnear, M., Fischer, G.R., Almeida, J.M., Torres, L.F. and Bidegain, M.U. (eds.), Building International Investment Law: The First 50 Years of ICSID, 2015, pp. 307-318.
Ortino, F., Non-Discriminatory Treatment in Investment Disputes, in Dupuy, P.M., Petersmann, E.U. and Francioni, F., (eds.), Human Rights in International Investment Law and Arbitration, 2009.
Reisman, M.W., Crawford J.R. and Bishop, D.K., (eds.), Chapter 9: Violation of Investor Rights under Investment Treaties, in Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed., 2014, pp. 753-896.
Reisman, M.W., Crawford J.R. and Bishop, D.K., (eds.), Chapter 8: Violations of Investor Rights Under Customary International Law, in Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed., 2014, pp. 583-752.
Schreuer, C., Protection against Arbitrary or Discriminatory Measures, 2007.
Titi, C., Full Protection and Security, Arbitrary or Discriminatory Treatment and the Invisible EU Model BIT, Journal of World Investment & Trade, 2014, pp. 534-550.
Verdross, A., Les règles internationales concernant le traitement des étrangers, 1931, pp. 358-359.
Weiler, T., Saving Oscar Chin: Non-Discrimination in International Investment Law, in Horn, N. and Kroll, S.M. (eds.), Arbitrating Foreign Investment Disputes: Procedural and Substantive Legal Aspects, Studies in Transnational Economic Law, 2004, pp. 159-192.
Weiler, T., Chapter Seven Fair and Equitable Treatment and Arbitrary or Discriminatory Measures, in The Interpretation of International Investment Law: Equality, Discrimination, and Minimum Standards of Treatment in Historical Context, 2013, pp. 287-332.
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