A Study On The Expansive Interpretation Of Full Protection And Security Provisions In International Investment Agreement

As an absolute standard,full protection and security treatment requires the host country to protect foreign investors from harm or threat of harm.However,due to the differences in the expression of different clauses,there is no uniform and clear definition of full protection and security treatment.From the perspective of historical evolution,the full protection and security treatment originated from the protection of foreigners in the customary international law,changed from the protection of the personal and property rights and interests of foreign businessmen in the Treaty of Friendship Commercial and Navigation,and was finally used in international investment agreements to protect foreign investors.With the increasingly close international investment exchanges,full protection and security treatment in the practice of international investment arbitration appears the phenomenon of meaning expansion.The interpretation of full protection and security treatment extends from traditional physical protection to beyond physical protection.Traditional full protection and security treatment holds that the host countries should protect the physical integrity of an investment against interference by use of force.Common physical injuries include violent encroachment,illegal expropriation,etc.As for intangible protection,it refers to protection beyond the scope of tangible protection,the most important of which is legal protection.Legal protection implies that the host country should create a good legal environment for foreign investors,including a more mature legal framework and a well-functioning system of courts.In essence,the expansion of the meaning of full protection and security treatment puts forward higher requirements for the host country and protects the rights and interests of foreign investors in a wider range.However,it is unclear that whether full protection and security treatment could jump over its traditional interpretation,since it is worried that other investment protection treatments may be taken over by stretching the full protection and security treatment.Therefore,it is essential to study on the legal basis of the expansive interpretation of the treatment.As far as the practice from international investment arbitration tribunals,treaty interpretation is the method they used.They mainly use literal interpretation,supplemented by teleological interpretation.From the perspective of literal interpretation,tribunals usually focus on "Full" or “Investment” to discuss the legitimacy of the expansion of the treatment.But rather than focusing on the interpretation of "Full",it is more reasonable to confirm the legitimacy of the expansion of the treatment by focusing on the interpretation of "Investment",since the expansion of "Investment" contributes to the expansion of the treatment.From the perspective of purpose interpretation,it is hard to say that the State Parties tend to limit the treatment to physical protection unless they clearly expresses such intention,because the purpose of the international investment agreements is to protect foreign investors,attract foreign capital and promote economic development.As far as the theoretical basis is concerned,there are three points.From the perspective of the relationship between full protection and security treatment and the protection of foreigners in customary international law,the former is born out of the latter,and the latter is the bottom line of the former.Thus,through the consensus of the Contracting Parties,full protection and security treatment can go beyond the physical protection boundary of "protection and security" in customary international law.From the perspective of the liability of the treatment,the standard of responsibility is due diligence rather than strict liability.Due diligence requires the host country to take reasonable measures to protect the investment of foreign investors from damage,so these measures are difficult to be limited to physical protection.From the perspective of the relationship between full protection and security treatment and fair and equitable treatment,they are different treatment standards,and there are differences in emphasis.Therefore,the expansive interpretation of full protection and security will not lead to the overlap of the two concepts.Therefore,the expansion of the interpretation of the treatment has its legitimacy.According to China's situation,the number of international investment agreements signed by China involving full protection and security treatment is not small,but the terms of the treatment clauses are not uniform and the liability standard is not clear.Although at present there is no case that Chinese investors sue the host country or foreign investors sue China to the international investment arbitration institution using the treatment clause,it is not ruled out that this situation may occur in the future.Therefore,China should make clear the interpretation of full protection and security treatment,the relationship between the treatment and other concepts,and the liability standard,so as to avoid the instability of discretion on the interpretation of full protection and security treatment.