Articles

• Hepburn, Jarrod

Abstract

The doctrine of legitimate expectations has become a central concept in international investment law. The doctrine has no textual foundation in investment treaties, and it has been described as an ‘invention’ of arbitrators, who have not offered much plausible legal justification for the doctrine’s existence. The most frequent justification for the doctrine in the literature is that it reflects a general principle of law. However, this justification is problematic. This article canvasses four alternative legal justifications: the ordinary or special meaning of investment treaty provisions, the subsequent practice of states parties to investment treaties, agreement between disputing parties in investment treaty cases and customary international law. The article concludes that the most practical and plausible legal justification for the doctrine is as a rule of special custom, applying between those several dozen states that have manifested acceptance of it in pleadings before investment tribunals. The article thus responds to critics describing the doctrine as a legal ‘interloper’, and it offers some legal (though not necessarily normative) legitimacy to a controversial concept in investment law. However, the article also acknowledges the remaining gaps to be filled by states, leaving the doctrine still without any formal legal basis in many cases.