Transparency is a procedural obligation for arbitral tribunals,¹ but it is usually considered part of the substantive obligations of States in the context of Fair and Equitable Treatment ("FET"). Yet in 2001, an award was partly quashed for having introduced transparency within FET on the basis of a provision (Article 1105 of NAFTA) that did not explicitly mentioned it.² However, it seems that the trend has been reversed and the great majority of tribunals now accept that States are bound to respect transparency on the basis of FET,³ even in the context of NAFTA.⁴ The minority of tribunals that are reluctant to find that it is part of the FET are NAFTA tribunals.⁵

Uncertainty remains as to the possible customary value of the obligation of transparency. The majority of arbitral tribunals reject this possibility and rule that transparency can only be imposed in the context of the treaty-based FET standard and not on the basis of the customary-based minimum standard of treatment (in particular NAFTA tribunals)⁶ or customary law.⁷ Some tribunals have yet ruled otherwise.⁸

Some treaties explicitly include an obligation of transparency in their FET provision, which settles the matter.⁹

Transparency can be used in two was by arbitral tribunals in the context of FET:

1. it may be considered as an autonomous obligation, which can be adjudicated separately from the other obligations of States in FET;¹⁰ or
2. it may be considered as an element that should be taken into account in assessing whether a State has breached FET without possibility to condemn a State for a breach of transparency per se.¹¹

When included within FET, transparency imposes several obligations upon States. However, since transparency is a general standard meant to adapt itself to factual circumstances, the obligations stemming from it and that it imposes upon States may not be established in an exhaustive manner. Tribunals have held in recent case law that transparency includes:  

1. a general requirement that public documents and regulations shall be accessible;¹²
2. to ensure that investors know the reasons justifying regulations so that they can anticipate the manner in which they are to be applied.¹³ Yet this aspect has been criticized by some tribunals;¹⁴ 
3. that changes in legislation must be foreseeable by foreign investors¹⁵ which also must exercise due diligence in this regard;¹⁶
4. that the decision-making process is clear so that investors are able to know who decides and when;¹⁷ and
5. an obligation to notify any measure that is targeted at the investor.¹⁸

Not any lack of transparency may be sufficient to constitute a breach of FET as the threshold is quite high in that respect.¹⁹ Moreover, an allegation of breach of transparency must be assessed in light of the factual circumstances of each case.²⁰ In particular, it must not lead to impose an excessive burden upon States which means and level of development may be taken into account.²¹

Transparency is not a full and absolute obligation. For example, in the context of documents, case law admits that documents may not to be disclosed because they are protected by secret and States enjoy a certain margin of appreciation in that respect.²²

Kotera, A., Regulatory Transparency, in Muchlinski, P., Ortino, F., and Schreuer, C. (eds.) The Oxford Handbook on International Investment Law, OUP, 2013.

Maupin, J., Transparency in International Investment Law: the Good, the Bad and the Murky, in Bianchi, A. and Peters, A. (eds.), Transparency in International Law, CUP, 2013.

de Nanteuil, A., International Investment Law, E. Elgar, 2020

Paparinskis, M., The International Minimum Standard of Fair and Equitable Treatment, Oxford University Press, 2014.

Reed, L., Consedine, S., Fair and Equitable Treatment: Legitimate Expectations and Transparency, in Kinnear, M., Fischer, G., Torres, L.F., Bidegain, M.U. (eds.), Building International Investment Law. The First 50 Years of ICSID, Kluwer, 2016.

UNCTAD, Transparency, UNCTAD Series on Issues in International Investment Agreements, II, 2012.

Schill, S., Transparency as a Global Norm in International Investment Law, Kluwer Arbitration Blog, 2014.

Tudor, I., The Fair and Equitable Treatment Standard in the International Law on Foreign Investment, Oxford University Press, 2008. 

Vasciannie, S., The Fair and Equitable Treatment Standard in International Investment Law and Practice, British Yearbook of International Law, Vol. 70, Issue 1, 2000, p. 99.

Weiler, T. Good Faith and Regulatory Transparency: The Story of Metalclad v. Mexico, in Weiler, T. (ed.), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law, Cameron May, 2005.

Zoellner, C.S., Transparency: An Analysis of an evolving Fundamental Principle in International Economic Law, Michigan Journal of International Law, Vol. 27, Issue 2, 2006, p. 579.