About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

6 J. World Investment & Trade 711 (2005)
The Influence of the Host State's Level of Development on International Investment Treaty Standards of Protection

handle is hein.journals/jworldit6 and id is 711 raw text is: The Influence of the Host State's Level of
Development on International Investment Treaty
Standards of Protection
Nick GALLUS*
I.   INTRODUCTION
An investor choosing between investing in two diverse countries will, among other
factors, look to the standard of protection it can expect from the host State.' After the
recent explosion in bilateral investment treaties (BITs), the investor will increasingly be
able to look to the provisions of such a treaty to determine those levels of protection. Due
to the largely homogenous nature of modern BITs, the investor is likely to encounter
similar provisions. For example, on the face of the treaty, a U.S. investor is offered a similar
standard of protection when it invests in either a developed country, such as Canada, or a
less developed country, such as Moldova. If the investor invests in Canada, it is guaranteed,
inter alia, treatment in accordance with international law, including fair and equitable
treatment and full protection and security,2 If the U.S. investor invests in Moldova, it
is guaranteed, inter alia, treatment not less than that required by international law as well
as fair and equitable treatment' and full protection and security .
Reading these provisions, the U.S. investor could be forgiven for thinking that it
can expect the same standard of treatment whether it invests in Canada or in Moldova.
The U.S. investor could also reasonably expect that it can claim compensation if either
the Canadian or Moldovan government fails to provide that standard of treatment. Both
the North American Free Trade Agreement (NAFTA) and the United States-Moldova
BIT offer investors access to independent arbitration to seek compensation for the host
State's breaches of its treaty obligations.
Yet, despite the similar treaty language, can the U.S. investor really expect the same
level of treatment from an under-resourced country still undergoing a transition to
capitalism, such as Moldova, that it can expect from a wealthy country such as Canada?
Unfortunately for our hypothetical U.S. investor, and foreign investors all over the
* Associate, Appleton & Associates, International Lawyers. Toronto, Canada, which specializes in
international investment treaty arbitration.
The views in this article are solely the author's and do not necessarily reflect the views of Appleton &
Associates or any of its clients.
The author can be contacted at <ngallus@appletonIaw.corm.
i The State hosting foreign investment is generally regarded as the host State
Article 1105 (1) of the North Ariencan Free Trade Agreement (NAFTA).
3 Article 2(3)(a) of the United States-Moldova BIT.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 3,000 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most