1. INTRODUCTION

In recent years, international law scholarship has started to explore the intersections between human rights law, in particular the European Convention on Human Rights (ECHR or Convention), and the protection of foreign direct investment (FDI).

Building upon this emerging literature, the objectives of this chapter are twofold: (i) to explore whether the ECHR can play a role in the protection of FDI, and if so, what role; and (ii) to compare the application of the principle of ‘legitimate expectations’ (as an increasingly relevant doctrine used to decide disputes over investments) in investment arbitral tribunals’ awards, and in the European Court of Human Rights (ECtHR) case law.

In broader and simpler terms, this chapter aims to answer the following questions: is FDI a human right protected by the ECHR? And if so, what is the role played by ‘legitimate expectations’?

In examining whether, and to what extent, the ECHR grants protection to FDI, it is necessary to contextualise the present analysis against the backdrop of international investment law (IIL), the field of law that governs the relationships between states and foreign investors, and to which foreign investors typically resort when seeking protection for their investments.

As is well known, within the framework of IIL, investment protection is assured by two main pillars: (i) the bilateral (or multilateral) investment treaties (BITs) signed by states for the promotion and protection of foreign investments; and (ii) the Convention on the Settlement of Investment Disputes between States and Nationals and Other States of 1965 (ICSID or Washington Convention).

Since Germany and Pakistan signed the first BIT, in 1959, a total of 2,825 BITs have been signed (2,257 of which are currently in force). Pursuant to BITs, investors from each Contracting State enjoy certain guarantees (in the form of substantive standards of protection) for their investments made in the other Contracting State (i.e. the host state). Also, in case a dispute arises between the foreign investor and the host state, most BITs provide for arbitration as the method to resolve disputes.

The ICSID Convention (a multilateral treaty sponsored by the World Bank and ratified by 155 Contracting States) adds, to the BITs, a procedural framework for dispute settlement.