9 Fair and Equitable Treatment and Good Faith: Nourishing Rights and the Investor-State System

Subject(s):

Abuse of rights — Fair and equitable treatment standard — Good faith — General principles of international law

This chapter explores the relationship between the principle of good faith and the standard of fair and equitable treatment (FET). It begins with a general overview of the FET standard and the importance of its link to good faith in investment arbitration decisions. It then explains the role of FET in investment protection and the value of the standard’s ambiguous language in light of its relationship with good faith. It also considers the development of FET in international investment agreements, the tribunals’ perceptions on the usefulness of applying a good faith standard in the context of FET, and how the application of good faith in FET analysis helps connect international investment law with the broader structure of public international law.