Research On The Protection Of Public Interests Of Host Countries In Application Of Fair And Equitable Treatment

In the current practice of international arbitration,Fair and equitable treatment is one of the most commonly used standards in international investment disputes and most successful claims are based on it.In the framework of international investment law,equitable treatment means that each party receives its legitimate interests,i.e.the interests of each party in an investment dispute should be respected,including,of course,the interests of the host country.As the most important source of law in the field of international investment,most investment treaties provide for FET provisions,but most of these provisions are abstract and highly simplified,and do not contain specific rules.With the increasing number of relevant arbitration jurisprudence,arbitral tribunals,in interpreting and applying fair and equitable treatment,have proposed a number of elements that are considered to be included in this standard of treatment,including: the principle of legitimate expectations of investors,the principle of due process,the principle of non-arbitrariness and non-discrimination,and liability for breach of fair and equitable treatment.In the application of the FET,it has often been arbitrarily interpreted by arbitral tribunals due to its lack of clarity,making it one of the most threatening substantive treatment clauses to the public interest of the host country.Many arbitration practice cases reflect the tendency of arbitration tribunals to balance the interests of investors and the interests of the host country in the application of FET,is that to place too much emphasis on the protection of the investor’s rights and to put the interests of the investor above the sovereignty and public interests of the host country.The reasons for this can include two aspects: firstly,the tendency to ignore the interests of the host country in the practice of international investment arbitration;and secondly,the highly general nature of the FET clause itself.Due to the highly general nature of FET,it is inevitable that a large number of investors invoke the clause to make claims.The only way to change this situation is to concretize the abstract rules,further clarify how the FET should be interpreted and applied when the interests of the investor and the interests of the host country are in conflict,and balance and weigh the interests of the two.Firstly,as far as the protection of investors’ legitimate expectations is concerned,we must analyse and judge the reasonableness of the expectations.Where there is a specific commitment by the host country,the reasonableness of expectation needs to be taken into account the actual situation and subjective purpose of the host country;where investors expect a stable and predictable legal framework,a stable legal framework is not unconditional and absolute,and only fundamental and substantive changes to the legal framework will undermine the reasonable expectations of investors.Secondly,as far as the principle of Non-discrimination is concerned,since arbitrary discrimination is an arbitrary and unjustified act,which in itself excludes the possibility of purpose of protecting the interests of the host country,and therefore pays more attention to the principle of proportionality with regard to discriminatory practices of the host country in the public interest,and to assess the host country’s regulatory acts and the public interest in the light of the purpose of the host country’s conduct and the actual effect on the investor.The public interest justification of the host country’s regulatory conduct and of the public interest is judged according to the purpose of the host country’s conduct and the actual effect on the investor.Therefore,the exercise of the host state’s right to regulate for the protection of the public interest should also be considered in terms of procedural criteria,and the principles of transparency and due process should also be observed,otherwise the host state may bear unnecessary responsibility.In response to the tendency to ignore the interests of the host State in the practice of international investment arbitration,we need to clarify the attitude towards the protection of public interest in the application of fair and equitable treatment.This can be done by stating the attitude of protecting the public interest in the preamble of the investment treaty,giving play to the interpretative effect of the preamble of the treaty and setting a certain "tone of public interest protection" for the arbitral tribunal to consider the interests of the host country when interpreting the treaty obligations.The fair and equitable treatment clause can also be applied in a way that gives the host country "broad discretion" by invoking the doctrine of state discretion,so that the host country can refrain from compensating foreign investors when they cause damage or only give appropriate compensation,giving the host country sufficient policy space and respect.In addition,there is a need to further clarify the exceptions to the application of fair and equitable treatment,set the preconditions for the application of fair and equitable treatment,and improve the exceptions to fair and equitable treatment.The restrictions on the application of the fair and equitable treatment provisions will provide a legitimate basis for the host country to take urgent measures to safeguard national interests.Finally,it is necessary to reform and improve the arbitration mechanism,clarify the objective of the arbitration mechanism to balance the interests of the two interests,introduce an appeal mechanism for investment arbitration,reform the confidentiality of investment arbitration.So as to protect the public interest of the host country better.