CONTEMPORARY EURASIA VIII (2) ContEurVIII2 | Page 16

CONTEMPORARY EURASIA VIII (2)
The Armenia-China BIT does not have an umbrella clause in its
texts, which is a considerable limitation for the BIT, since it does not
provide the level of protection explained above for Armenian and
Chinese investors investing in these respective jurisdictions.
Fair and Equitable Treatment Clause
The Fair and Equitable Treatment (FET) standard has been
qualified as an overarching principle that fills gaps and informs the
understanding of specific clauses. 51 Thus, the clause includes a very wide
and ambiguous scope of protection for foreign investors giving tribunals
the discretion to decide whether the state has treated the foreign investor
fairly and equitably. Fair and equitable treatment is an absolute standard
of treatment. The FET clause is inherently inflexible, it is a fixed rule,
and it can only change when there is a change in interpretation of the rule
in international law or when the language of the relevant treaty is
changed. 52 This protection can cover conduct that is arbitrary, grossly
unfair, unjust or idiosyncratic, manifest failure of natural justice in
judicial proceedings or a complete lack of transparency and candor in an
administrative process. 53
Due to the fact that the language of an FET clause varies from
treaty to treaty, there is no universal meaning linked to the clause.
Depending on the particular case and the BIT language, FET can be
interpreted in three ways: (i) FET is a part of the minimum standard
required by customary international law, 54 (ii) FET is a part of
international law including all sources, 55 and (iii) FET is an independent,
free-standing standard of treatment. 56 Some recent Armenian and Chinese
investment treaties with other countries provide clarification on the
interpretative scope of a FET clause.
However, contrary to this practice, the Armenia–China BIT is
silent in this regard and does not clarify how the clause shall be

51 Dolzer
and Schreuer. Principles of International Investment Law, 123.
Fatouros, Government Guarantees to Foreign Investors (Columbia
University Press, 1962), 138.
53 Waste Management, Inc. v United Mexican States (Number 2), ICSID Case No.
ARB(AF)/00/3
54 See e.g., FTC Note of Interpretation on 31 July 2001, Art. 1105; also see Asian
Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3,
Dissenting Opinion of Samuel K.B. Asante, 583-584.
55 See e.g., EDF International SAUR International S.A. and Leon Participaciones v.
Argentine, Award of 11 June 2012, ICSID Case No. ARB/03/23.
56 See e.g., Saluka Investment B.V. v. Czech Republic, UNCITRAL, Partial Award, 17
March 2006.
52 Arghyrios
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