The Right of States to Regulate in International Investment Law
The Search for Balance Between Public Interest and Fair and Equitable Treatment
By: Yulia Levashova
Due to the ongoing recent expansion of public interest issues worldwide, the state's right to regulate has been recaptured as a prominent concept in international investment law. The fair and equitable treatment (FET) standard provision in the text of an international investment agreement (IIA) has become a detailed clause clarifying the specific obligations of a state towards an investor under the FET standard. However, striking the right balance between the interests of host states and investors in these new treaty formulations has proved to be challenging. This book greatly clarifies the field by offering the in-depth analysis of the application of the state's right to regulate in relation to FET standard provisions in IIAs and to decisions by arbitral tribunals in FET cases. Recognising that the role of tribunals is to balance the state's public interests and the interests of the investor when interpreting and applying the FET standard, the author pursues such seminal issues and topics as the following: the legitimacy of the objective of the state's measure; obligations and responsibilities of investors towards a host state; the nature and impact of a change to a national regulatory framework; special economic and sociopolitical circumstances in a host state; and due diligence and risk assessment as a condition for the protection of an investor's legitimate expectations. Multiple IIAs concluded by the OECD Member States, as well by Russia and China between the developing countries, and the prominent investment law cases on the FET standard are examined in detail. The analysis pays particular attention to how investment jurisprudence in FET cases has been reflected in such new IIAs as the Comprehensive Economic and Trade Agreement between the European Union (EU) and Canada (CETA), the EU-Vietnam FTA and the EU-Singapore FTA. These case studies demonstrate the evolution of the IIAs' FET standard provisions and how they balance the application of the FET standard and the state's right to regulate. Suggestions are provided for drafting formulations of the FET standard that can contribute to achieving such a balance. In the clear light it sheds on the legal conditions under which states may regulate in the public interest and its contribution to the reforms that are currently taking place in the field of international investment law, this book constitutes an exemplary framework to evaluate investment decisions on the FET standard and the right to regulate. It is sure to prove extremely useful for practitioners who work on investment cases, policymakers involved in negotiating and drafting of IIAs, policy advisors of governmental and non-governmental organisations and academics in international investment law.
AI Overview
"The Right of States to Regulate in International Investment Law" by Yulia Levashova is a comprehensive book that delves into the intricate balance between the host state's right to regulate and the investor's rights in the context of international investment law. Here is a detailed overview of the book:
Key Themes
Balance Between Public Interest and Investor Rights:
- The book focuses on the tension between the host state's right to regulate and the investor's right to fair and equitable treatment (FET) in international investment agreements. It explores how these two rights can be balanced to ensure that both the state's public interest and the investor's legitimate expectations are respected.
Fair and Equitable Treatment (FET):
- The FET standard is a central theme in the book. It examines the application of this standard in international investment agreements, highlighting the challenges and opportunities in its implementation.
State's Right to Regulate:
- The book provides an in-depth analysis of the conditions under which a state can lawfully exercise its right to regulate. It identifies the legal conditions and criteria that tribunals use to determine whether a state's regulatory actions are legitimate and do not violate the investor's rights.
Legitimate Expectations of Investors:
- The book discusses the concept of legitimate expectations of investors and how these expectations are affected by the state's regulatory actions. It explores the conditions under which investors can reasonably expect a stable regulatory environment.
Public Interest vs. Investor Rights:
- A key theme is the search for balance between public interest and investor rights. The book argues that a more balanced approach is needed to address the tension between these competing interests. It suggests that public interest should be brought to the center of the balancing exercise between states' and investors' rights.
Plot Summary
The book is structured to provide a clear and comprehensive understanding of the complex issues involved in international investment law. It begins with an introduction to international investment agreements and the right to regulate, setting the stage for a detailed analysis of the FET standard and its application in investment jurisprudence.
The book then delves into the legal conditions on the right to regulate identified by tribunals, examining the conditions under which a state can lawfully exercise its regulatory powers. It also discusses the state's right to regulate and the legitimate expectations of investors, providing a nuanced understanding of how these expectations are affected by regulatory actions.
The book concludes by suggesting a more balanced approach to address the tension between public interest and investor rights, emphasizing the need to bring public interest to the center of the balancing exercise.
Critical Reception
While specific reviews of the book are not provided in the search results, the book's focus on a critical issue in international investment law and its comprehensive analysis suggest that it would be well-received by scholars and practitioners in the field. The book's inclusion in the International Arbitration Law Library series and its publication by a reputable law publisher like Kluwer Law International indicate its credibility and relevance.
In summary, "The Right of States to Regulate in International Investment Law" by Yulia Levashova is a seminal work that provides a detailed and nuanced analysis of the complex balance between the host state's right to regulate and the investor's rights in international investment law. Its critical themes, structured approach, and comprehensive analysis make it a valuable resource for scholars and practitioners in this field.