15 Tilburg L. Rev. 93 (2010-2011)
Legitimate Expectations in Investment Treaty Arbitration: An Unclear Future

handle is hein.journals/tiflr15 and id is 93 raw text is: 93

Legitimate Expectations
in Investment Treaty Arbitration:
An unclear future
Abhjyit P.G. Pandya and Andy Moody'
1 Introduction
The use of the doctrine of legitimate expectations in investment treaty
arbitration is unclear. Until the recent decision of EDF v. Romania, a sig-
nificant tidy-up of this area of law was needed. It was unclear on what
basis legitimate expectations were to be formed and critically what rights
the formation of a valid expectation gave. This difficulty may be partly
accounted for by the use of administrative law in the field of commercial
arbitration. It can also, to a degree, be explained by using commercial arbi-
tration to decide treaty based disputes.3 Investors can be seen in this field
to have unlimited expectations due to the nature of undefined treaty obli-
gations. What is often not appreciated by tribunals construing liability is
the possible conflict with public interest that such an approach may have,
leaving huge areas of public policy susceptible to be overridden by judicial
construction.4
1        Abhijit PG Pandya is a Fellow at the Department of Law, London School of Economics
and can be contacted at pandyalawyer@gmail.com. Andy Moody is a Senior Associ-
ate in the International Arbitration Group at Eversheds LLP and can be contacted at
AndyMoody@eversheds.com or on +44 207 919 4585.
2        EDF (Services) Limited v. Romania ICSID Case ARB/05/13 (Award Merits)
(8/10/2009).
3        An analysis of how investment arbitration is a mix between commercial arbitration
and public international law is given by Douglas: Z. Douglas, 'The Hybrid Foundations
of Investment Treaty Arbitration' (2003) 74 BYII 151, 152-184; See, C.H. Brower II,
'Structure, Legitimacy and NAFTAs Investment Chapter' (2003) 36 Vand. J. Transn'1
Law 38, 51-53 & 74-82. For legitimacy based on lack of certainty over legal approach
in this field: See S.D. Frank, 'The Legitimacy crisis in Investment Treaty Arbitration:
Privatizing public international law through inconsistent decisions' (2004-2005) 73
Ford. L. Rev. 1521, 1584-1587.
4        See G. Van Harten, Investment Treaty Arbitration and Public Law (OUP 2007) 58-68;
The expansive approach to construe rights by investment arbitration panels has gone
in a directed that some wished for other courts, such as the International Court of Jus-
tice: See L. Gross, 'The International Court of Justice: Considerations of requirements
for enhancing its role in the international legal order' (1971) 65 AJIL 253, 259-269.

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