MECO and Others vs Montpelier

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The researcher states that the BIT between Montpelier and Atlantis as well as between Montpelier and Pacifica is relevant to the resolution of the disputes filed by each of the parties. Although MECO is incorporated under the laws of Montpelier, it is not a domestic investor as its subscriber is PECO and ultimately Ackerman, both of whom are foreign investors (Convention on the Settlement of Investment Disputes Between States and Nationals of Other States 1966, Art. 25(2)(b)). There are two primary questions for consideration. The first question is whether or not the foreign investors under the BITs were accorded fair and equitable treatment and or national treatment pursuant to the relevant BITs and customary international law. The second question is whether or not Montpelier’s defense challenging the jurisdiction of the arbitration panel is valid having regard to the applicable and relevant provisions of the two BITs. Article 4(1) of the BIT between Montpelier and Atlantis speaks to fair and equitable treatment to the extent that each of the states shall extend to the other fair and equitable treatment, as well as full protection and security in their respective territories. The contracting states also pledge not to unreasonably or discriminatorily take measures that impair the management, maintenance, use, enjoyment, extension, or disposal of the other’s national’s investments. Article 4(2) also imposes a duty upon the contracting states to accord foreign investors the same treatment accorded to domestic investors. This is known as the national treatment doctrine. National treatment standards are included as a means of conferring upon foreign investors the same degree of protection accorded national or domestic investors in the host country. Article 3 of the BIT between Montpelier and Pacifica contains the exact same standards for national treatment and fair and equitable treatment.