The Role of Fair and Equitable Treatment in the Settlement of Foreign Investment Disputes: With Particular Emphasis on Social Responsibility of Transnational Corporations

Like numerous developing countries, Iran strives to attract foreign investment in order to develop its economy. In recent years, Iran concluded many bilateral investment treaties (BIT) with a number of countries. The standard of fair and equitable treatment (FET) is one of the most significant standards, which has frequently been considered in investment arbitration. By referring to this standard, foreign investors seek protection from the host-State in relation to legal stability and non-discrimination. The focus of the BITs and investment arbitration jurisprudence has mainly been on obligations of the host-State. There has been little discussion as to obligations of investors. This article examines the concept of corporate social responsibility (CSR), in transnational corporations, in the light of the FET. Although transnational corporation responsibility is substantially based on soft law and volunteer performance, a legal basis could be adopted by considering the FET. The existence of the FET in the vast majority of BITs requires transnational corporations to comply with a number of principles in the host-State, such as the right of development, labour, environment, competition and human rights laws.