The Fair and Equitable Treatment in International Investment Agreement:Lessons Learned from the Lone Star Case

Abstract

The award of the Lone Star case was, at last, dispatched to the Parties on August 31, 2022. As the Tribunal determined that the Tribunal had jurisdiction over claims allegedly occurred after the 2011 Korea-Belgium𐄁Luxembourg BIT became effective on March 27, 2011, the key issue was allegations of misconduct by the Financial Services Commission in the sale of the Korean Exchange Bank shares to the Hana financial group. The Tribunal concluded that the Financial Services Commission acted arbitrarily as it was motivated by political reasons and, therefore, had failed to provide Fair and Equitable Treatment under the 2011 Korea-Belgium𐄁Luxembourg BIT. In order to review the Lone Star case critically, this paper firstly analyzes international arbitration cases relating to Fair and Equitable Treatment, and then examines legal implications of the Lone Star case. On top of that, this paper reviews the ways to stipulate Fair and Equitable Treatment under International Investment Agreements based on legal implications derived from the Lone Star case.