The Foundations of Legitimate Expectations in International Investment Law

The idea that a breach of the investor’s ‘Legitimate Expectations’ (regarding that host State should act consistently and in a stable manner) may be relevant to decide whether a violation of investment treaty has occurred or not, has been recurrently put forward by claimants in investment treaty arbitrations and has been endorsed by a growing number of arbitral awards in the last few Years. However, the picture emerging from this jurisprudence is not clear; because arbitral tribunals have provided protection for legitimate expectations of foreign investors without justifying the basis of this protection (only with reference to former arbitral decisions). So, in this article, considering that the doctrine has found its most popular application under the fair and equitable treatment standard; the basis of protection of legitimate expectations under this standard is described.
Fundamentals of supporting expectations are described in light of the sources of international law. The operation of these resources, including treaty, convention, general principles of law, international arbitration procedure and legal doctrine, will support the expectations of foreign investors.