Good Faith and Fair and Equitable Treatment in International Investment Law

Abstract

Fair and equitable treatment is one of the most important rules of international investment law, yet the vagueness of its textual expression causes considerable problems in interpretation and application. In the absence of clear textual guidance, tribunals and legal writers have sometimes turned to more general concepts such as good faith and abuse of rights. Good faith plays various roles in legal reasoning about fair and equitable treatment. Sometimes it informs structures of reasoning and interpretation (as with any other rule of international law); sometimes it provides the broader background and hints at the systemic logic of a particular part of the rule; sometimes it is useful in oiling a particular bit of machinery of fair and equitable treatment; and sometimes it would be distinctly unhelpful, pulling the interpreter away from its own particularisations or even rules built on different premises. Overall, there is nothing more to this than the colloquial point about square pegs and round holes, and the sensible precaution that the systemic importance of a peg does not mean that it should be pushed down every hole.