Current Arbitral Practice Relating to Political and Socio-political Circumstances in Host Developing Countries and Countries in Transition: FET Standard in Context

The issue of political stability, socio-political circumstances in host developing countries and the social, political and economic transitory nature of countries in transition are vital aspects for creating an investor-friendly atmosphere in those developing countries. A critical examination of some selected arbitral awards discussed in this chapter demonstrates that these particular political, socio-political and transitory status of these host developing countries form a significant contextual background for the investor-state dispute against these countries. However, a close examination of these arbitral awards covering the wide range of approaches that these tribunals have adopted will reveal that, in dealing with these political, socio-political and transitory issues, the current investment tribunal has largely been inconsistent and inadequate in their approaches. These contextual background of the host developing countries had both direct and indirect effects that led to the disputes in questions and the tribunals on several occasions have acknowledged and addressed the difficulties of these countries due to those political, socio-political and transitory circumstances in relation FET obligation of the host developing country, and it is concluded that, overall, the current tribunals give minimal importance to the political, socio-political and transitory circumstances in relation to the alleged breach of the FET standard against those host developing countries.