Protection of Legitimate Expectations in Investment Treaty Arbitration : A Theory of Detrimental Reliance

This book evaluates the core of the concept of legitimate expectations from first principles in moral philosophy. It adopts an unconventional approach by examining this topic from a deep, philosophical perspective and delves into the debates on the binding nature of promise in moral philosophy. It then develops a doctrinal structure for the standard of protection. The author places the key premise of the book on the possibility of deriving firm conclusions from the debate and on creating a set of precise and prescriptive 'guidelines of the application of legitimate expectations'. The features of this book are threefold: first, a significant body of literature on moral philosophy is assimilated; second, core philosophical principles are extracted and expressed as a normative framework to resolve concrete cases; third, the author analysed a vast number of investment treaty awards against the underlying framework. Cover Half-title page Title page Copyright page Dedication Contents Foreword Preface Table of Cases List of Abbreviations Part I Why Do We Need a Theory of Legitimate Expectations? 1 Introduction 1.1 Setting the Scene: Legitimate Expectations in Search of a Principled Justification 1.2 Three Reasons for a Theory of Legitimate Expectations 1.2.1 Lack of Conceptual Clarity 1.2.2 Lack of Doctrinal Structure and the Adjudicative Problem 1.2.3 Legitimacy Deficit and Protection of Legitimate Expectations 1.3 The Argument: Protection against Detrimental Reliance as the Core of Protection of Legitimate Expectations 1.4 Theoretical and Practical Relevance and Contribution of the Book 1.5 Miscellaneous Points: Scope of the Book 2 The Formalist Conception of Legitimate Expectations and Different Paradigms of the Investment Treaty Regime: A Critique 2.1 Introduction 2.2 Public Law Conception of Protection of Legitimate Expectations 2.2.1 Legitimate Expectations as a General Principle of Law Revisited 2.2.2 Argument by Analogy for the Public Law Conception of Legitimate Expectations 2.3 Public International Law Conception of Protection of Legitimate Expectations 2.3.1 Treaty and Customary Law Basis for Protection of Legitimate Expectations 2.3.2 Failure of the Good Faith Argument to Provide the Legal Basis for Protection of Legitimate Expectations 2.3.3 Estoppel as the Legal Basis for Protection of Legitimate Expectations 2.3.4 Legitimate Expectations through the Lens of the Doctrine of Unilateral Acts 2.3.5 Precedent-based Approach to the Justification of Legitimate Expectations 2.4 Conclusion Part II What Is the Theory of Legitimate Expectations? 3 Theoretical Foundations for the Use of Moral Philosophy of Promise and Conceptualisation of Legitimate Expectations 3.1 Introduction 3.2 First Principles in Moral Philosophy of Promise and Protection of Legitimate Expectations 3.2.1 ‘Promise’ as the Source of Expectations: Recognition of Arbitral Jurisprudence 3.2.2 Specific Types of Expectations Protected under the Principle of Legitimate Expectations 3.3 Methodological Caveats 3.4 Three Conceptions of Promissory Obligation and a Theory of Legitimate Expectations 4 The Voluntarist Conception of Legitimate Expectations and Enforcement of Sovereign Promise 4.1 Introduction 4.2 Conceptual Analysis of Legitimate Expectations and the Voluntarist Theory of Promise 4.2.1 Promise, Normative Power and Natural Law Thinking 4.2.2 Non-conventional Voluntarist Conception of Promise 4.2.3 Conventionalist Voluntarist Conception of Promise 4.2.4 A Critique of Voluntarist Theories and the Conceptual Framework of Legitimate Expectations 4.3 Normative Implication of the Voluntarist Conception of Legitimate Expectations 4.3.1 Assimilation of Contractual Right and Treaty Right 4.3.2 Limited Scope of Legitimate Expectations and Administrative Representations 4.3.3 ‘Neutralization of the Normative Power of States’: Legal Stability and Voluntarist Conception of Legitimate Expectations 4.4 Critical Reflections on the Voluntarist Conception of Legitimate Expectations 5 Letting Investors Down: Protection of Trust and the Assurance Conception of Legitimate Expectations 5.1 Introduction 5.2 Constructing the Analytical Framework Based on the Assurance Theory of Promise 5.2.1 The Principle of Fidelity and Promissory Obligation 5.2.2 Normative Implication of the Principle of Fidelity on Conceptualisation of Legitimate Expectation 5.2.3 Conclusion: Rejection of the Assurance Conception of Legitimate Expectations 5.3 Variant Conception: Trust Theory of Promise and Legitimate Expectations 5.3.1 Conceptual Foundations of Trust View of Promise 5.3.2 Trust-based Conception of Legitimate Expectation as Applied in English Public Law 5.3.3 Assessing the Transposition of the Trust Conception of Legitimate Expectations to Investment Treaty Context 5.4 Conclusion 6 Protecting against Investor’s Detrimental Reliance: Reliance Conception of Legitimate Expectations 6.1 Introduction 6.2 The Reliance Theory of Promise and Conceptualisation of Legitimate Expectations 6.2.1 The Underlying Philosophical Framework Based on MacCormick’s and Atiyah’s Theories of Promise 6.2.2 Reformulated Reliance Principle and Protection of Legitimate Expectations 6.3 Normative Implications of the Reliance Conception of Legitimate Expectations 6.3.1 The ‘Conduct’ Capable of Creating Legitimate Expectations 6.3.2 Act of Reliance: Conception and Characteristics 6.3.3 Reasonableness of Expectations: Resolving the Mystery Case of Reasonable Investor 6.4 Critical Reflections on the Reliance Conception of Legitimate Expectations 7 In Search of the Most Suitable Conception of Legitimate Expectations 7.1 Introduction 7.2 Three Contending Conceptions of Legitimate Expectations 7.3 ‘Best-Fit’ Criteria for Choosing the Unifying Conception of Legitimate Expectations 7.3.1 Macro Aspect of the Investment Treaty Regime 7.3.2 Micro Aspect of the Investment Treaty Arbitration 7.4 Proposed Guidelines for the Application of the Reliance Theory of Legitimate Expectations The Reformulated Reliance Principle for Protection of Legitimate Expectations Guidelines for the Application of the Reliance Theory of Legitimate Expectations Part III Application of the Reliance Theory of Legitimate Expectations 8 Normative Consequences of the Reliance Theory of Legitimate Expectations 8.1 Introduction 8.2 Restrictive Scope of Protection of Legitimate Expectations 8.2.1 Rejection of the Catchall Conception of Legitimate Expectations 8.2.2 Exclusion of Rhetorical Use of Legitimate Expectations 8.3 Application of the Reliance Theory of Legitimate Expectations in Different Situations 8.3.1 Protection of Legitimate Expectations Arising from Contract and the Reliance Theory 8.3.2 Boundary of Legitimate Expectations of Legal Stability and the Reliance Conception 8.3.3 Protection of Expectations Created by Non-legally Binding Representations 8.4 Relationship between the Reliance Theory and Other Relevant Rules 8.4.1 Umbrella Clause and the Reliance Theory of Legitimate Expectations 8.4.2 Principle of Non-arbitrariness and the Reliance Theory of Legitimate Expectations: Two Different Principles 8.4.3 The Reliance Theory of Legitimate Expectations and Estoppel Principle 9 Rethinking Remedies for a Breach of Legitimate Expectations: Corrective Justice and Reliance Damages 9.1 Introduction 9.2 Argument for Detrimental Reliance-based Relief 9.2.1 ‘Principle’ Considerations 9.2.2 Policy Considerations 9.2.3 Authority (Case Law) Considerations 9.3 A Critique of the Current Remedial Framework Based on the Interstate Rules 9.3.1 Fictional Notions of Damage and Victim 9.3.2 Restitution as a Primary Remedy in Conformity with Protection of Reliance Interest 9.3.3 Expectation Damages as Default Rule and the Reliance Interests 9.4 Conclusion Bibliography Index "The book develops a reliance-based theory of legitimate expectations and articulates a normative framework for adjudication of cases for breach of the fair and equitable treatment standard. In this regard, the book has theoretical and practical relevance to the investment treaty arbitration community. The book takes an interdisciplinary approach based on moral philosophy to the complex issue of protection of legitimate expectations, which has so far been approached mostly from a formalist perspective. The reliance theory of legitimate expectations offers penetrative insights into the doctrinal structure and assists arbitral tribunals and counsels in adjudicating complex cases for breach of fair and equitable treatment standard. The proposed Guidelines for application of the principle of legitimate expectations offers a concrete framework for applying the doctrine to solve practical issues, which should provide more clarity and certainty to the law over time. The reliance theory of legitimate expectations will serve as a conceptual map for tribunals and legal counsels in the navigation of the legal landscape of legitimate expectations"-- Provided by publisher