Jurisprudential Drift in International Investment Law: From the Minimum Standard to Fair and Equitable Treatment

The meaning of the fair and equitable treatment standard in international investment law remains unsettled. One interpretation ties it to the customary minimum standard of treatment, familiar from the Neer case; another treats it as a more demanding standard deriving from autonomous treaty or customary obligations. State practice, scholarly commentary, and arbitral decisions can be marshaled for both views. In recent decades, however, tribunals have gravitated toward the autonomous interpretation, over the objections of certain writers and the sustained resistance of many states—most notably the U.S., a principal architect of international investment law and a major capital exporter. This article asks why. It surveys and synthesizes leading theories from international political economy, sociology, and law, identifying the contributions and limits of the resulting accounts. It then advances a new theory of jurisprudential drift as coordinated equilibrium maintenance, drawing on insider accounts of arbitration practice and game-theoretic models of cooperation. Senior arbitrators and elite counsel use general principles of arbitration and treaty interpretation to entrench broader interpretations of investment treaties. This equilibrium is sustained by reputational discipline within networks of specialists and practitioners, coupled with interrelated mechanisms of secrecy, judicial economy, and peer review. The article then traces the minimum standard’s doctrinal development, the rise of the modern investment treaty regime, and the evolution of fair and equitable treatment in arbitral practice, state practice, and academic commentary. It argues that prevailing legal explanations cannot account for the observed trajectory of arbitral decisions and that the proposed theory better explains the shift toward broader interpretations of the fair and equitable treatment standard in the case law.