3.4. Reasonableness/Arbitrariness/Discrimination
The Tecmed Tribunal expressly accepted that arbitrariness and discrimination could not be reconciled with the FET standard. The Tribunal in Pope & Talbot frequently referred to the reasonableness of the conduct of a State or its organ to rule out a violation of the FET standard. Benedict and Schill are of the opinion that there is a link between the concepts of reasonableness and proportionality on one hand and the permissibility of States right to interfere with an investor’s investment on the other hand. Additionally, Dolzer observes that the protection of the rights of an investor from a host state’s unreasonable decisions is essential to maintain the investment environment friendly and predictable. …show more content…
According to ELSI, arbitrary conduct was described as ‘a wilful disregard of due process of law’ capable of shocking or surprising the sense of juridical propriety. The ICJ’s description of an arbitrary conduct has also been accepted by Canada and Mexico as the most instructive expression on the arbitrariness of a conduct. Whether the NAFTA parties have accepted arbitrary conduct as a component of the IMS, will be discussed in more detail in the later part of this …show more content…
The Micula Tribunal further noted that the conduct must be manifestly unreasonable, arbitrary, discriminatory, or in bad faith, to constitute a violation. Crystallex, on the other hand, concluded that the conduct must reflect excess of discretion, prejudice, or personal preference, lacking legal justification.
Discrimination, on the other hand, has raised a different set of perspective amongst the Tribunals. Most of the Tribunals have followed the ELSI formula to define discriminatory treatment. As noted earlier, the ICJ in ELSI stated that in order to establish that a particular treatment is discriminatory, the conduct must be intentional, in favour of a national, against a foreign investor, and not taken under like
The Tecmed Tribunal expressly accepted that arbitrariness and discrimination could not be reconciled with the FET standard. The Tribunal in Pope & Talbot frequently referred to the reasonableness of the conduct of a State or its organ to rule out a violation of the FET standard. Benedict and Schill are of the opinion that there is a link between the concepts of reasonableness and proportionality on one hand and the permissibility of States right to interfere with an investor’s investment on the other hand. Additionally, Dolzer observes that the protection of the rights of an investor from a host state’s unreasonable decisions is essential to maintain the investment environment friendly and predictable. …show more content…
According to ELSI, arbitrary conduct was described as ‘a wilful disregard of due process of law’ capable of shocking or surprising the sense of juridical propriety. The ICJ’s description of an arbitrary conduct has also been accepted by Canada and Mexico as the most instructive expression on the arbitrariness of a conduct. Whether the NAFTA parties have accepted arbitrary conduct as a component of the IMS, will be discussed in more detail in the later part of this …show more content…
The Micula Tribunal further noted that the conduct must be manifestly unreasonable, arbitrary, discriminatory, or in bad faith, to constitute a violation. Crystallex, on the other hand, concluded that the conduct must reflect excess of discretion, prejudice, or personal preference, lacking legal justification.
Discrimination, on the other hand, has raised a different set of perspective amongst the Tribunals. Most of the Tribunals have followed the ELSI formula to define discriminatory treatment. As noted earlier, the ICJ in ELSI stated that in order to establish that a particular treatment is discriminatory, the conduct must be intentional, in favour of a national, against a foreign investor, and not taken under like