The full protection and security standard (“FPS Standard”) creates an obligation for the host State to protect investors and investments against actions of private parties, e.g. in the course of civil unrest, as well as actions of the host State, its organs or agents. It is complementary to the State’s monopoly over the use of physical force and the prohibition of vigilante justice. It is general consensus that the FPS Standard creates a due-diligence obligation for the host State, not strict liability. (See Section V below). It is likewise generally accepted that the standard covers physical protection and security of the investor and covered investments. (See Section IV below). Whether the FPS Standard also extends to “commercial” or “legal” protection and security is disputed.

The FPS Standard is included in the overwhelming majority of investment treaties. The specific wordings differ. Some treaties refer to “full”¹, others to “full and complete”,² “(most) constant”³ or “continuous”⁴ protection and security. “Protection” and “security” are sometimes inverted,⁵ “security” omitted.⁶ In arbitral practice, “these semantic variations do not change tribunals’ interpretations of the standard.”⁷

The FPS Standard finds first mention in eighteenth century European scholarship⁸ and treaties.⁹ An early codification of the underlying principle can be found in Article 76 of the Introduction to the General Law for the Prussian States of 1794.¹⁰ It became more common in nineteenth century treaties on friendship, commerce and navigation¹¹ and continued to be included in such treaties after World War II,¹² in the Abs-Shawcross Convention¹³ as well as in the 1967 Draft OECD Convention.¹⁴ The FPS Standard was featured prominently in the first ever ICSID case under a BIT, AAPL v. Sri Lanka.¹⁵

Historically, the obligation extends to the physical protection and security of the investor or covered investments.¹⁶ This scope remains undisputed to date. Some (more recent) treaties explicitly restrict the FPS Standard to “physical” protection and security.¹⁷

A few treaties include language which specifically identifies that “legal” protection and security is part of the obligation,¹⁸ as recognized by some tribunals.¹⁹ Most treaties, however, do not qualify what specific kind of protection and security is owed. In such cases, tribunals have interpreted the respective clauses differently. Some tribunals have maintained that the FPS Standard protects “more specifically the physical integrity of an investment against interference by use of force.”²⁰ Proponents of such a restrictive interpretation of the FPS Standard (limited to “physical” security only) mainly refer to its historic origin and the need to provide a meaningful distinction from the FET Standard such as to confer effets utiles upon both standards.²¹

Other tribunals have held that even an “unqualified” FPS clause creates an obligation of the host state to provide “commercial” and/or “legal” protection and security, in particular access to an effective judicial recourse against impairments of the investor and/or covered investment.²² These tribunals relied heavily on the ordinary meaning of the adjective “full”, the FPS Standard’s contextual (and historical) proximity to the fair and equitable treatment standard (“FET Standard”) and the fact that the ICJ in its ELSI judgment²³ analysed the FPS Standard in the context of domestic proceedings before Italian courts, i.e. in an inherently “legal” context.

It is virtually undisputed that the FPS Standard does not impose strict liability on the host State but a due-diligence obligation.²⁴ This is critical where the injury at issue was caused by actions which are not directly attributable to the State itself. In this context, “due diligence” means that the host State is not required “to prevent each and every injury” but must exercise reasonable care and take reasonable actions within its power to prevent injury of the investor.²⁵ This inquiry is highly fact specific and depends on the circumstances of each case. In general, the host State must take all measures to prevent the injury which are possible under the specific circumstances and with due regard to its capacities. In some cases, tribunals held that the due diligence obligation was breached;²⁶ in others, tribunals found that the State has acted with the necessary diligence.²⁷ Recently, a number of tribunals had to conduct this inquiry in the context of a situation where the State faced general instability.²⁸ Tribunals have been particularly critical of the “lower” due-diligence standard in the context of legal protection and security claims.²⁹

Alexandrov, S.A., The Evolution of the Full Protection and Security Standard, in Kinnear, M. et al. (eds.), Building International Investment Law: The First 50 Years of ICSID, 2015, Chapter 23.

Moss, G.C., Full Protection and Security, in Reinisch, A. (ed.), Standards of Investment Protection, 2008, Chapter 6.

McLachlan, C., Shore, L. and Weininger, M., International Investment Arbitration, Second ed., 2018, paras. 7.240-7.266.

Schreuer, C., Full Protection and Security, Journal of International Dispute Settlement, 2010, pp. 1-17.

Zeitler, H.E., Full Protection and Security, in Schill, S.W. (ed.), International Investment Law and Comparative Public Law, 2010, Chapter 6.