The purpose of this article is to delineate the relationship
between two components of the fair and equitable (FET) treatment standard,
namely the obligation (a) to respect an investor’s legitimate expectations; and
(b) to maintain a stable and predictable legal and regulatory environment
(Legal Stability Obligation). The article examines how these concepts have been
understood and applied by arbitral tribunals. It shows that, to the extent the
Legal Stability Obligation has been recognised as an element of the FET
standard it has, unlike other aspects of the standard, typically been
interpreted by reference to the legitimate expectations doctrine. The article
considers whether this relationship has a sound legal basis and, if not, how
else the substantive content of the Legal Stability Obligation might be
developed. In doing so, the article seeks to contribute to the pressing task of
clarifying the precise contours of the FET standard.