The Scope of Investors’ Legitimate Expectations under the FET Standard in the European Renewable Energy Cases

In the 2000s, several European states sought to increase foreign investment in their renewable energy sectors. Those governments later wound back those financial incentives. This resulted in dozens of investment disputes. One of the key issues in those disputes was whether the decision to amend or withdraw financial incentives breached investors' legitimate expectations under the fair and equitable treatment standard. This article argues that investors' legitimate expectations should operate analogously to the concept of estoppel. Therefore, if a state makes a clear commitment to induce investment (this includes commitments in legislation), and an investor reasonably relies on that commitment, then the state should not be able to renege on that commitment without generating liability for breaching the fair and equitable treatment standard.