Together with the guarantee against unlawful expropriation of an investment this is the most frequently invoked standard of investment protection. The fair and equitable treatment (FET) standard under international investment treaties is a very broad standard of protection and generally aims to protect foreign investors against unfair treatment by a host government in the absence of more specific protection standards. For that reason, no single definition has been developed by investor-state tribunals of what the FET standard covers, as its application depends on the facts of each particular case.

For qualifying investors of qualifying investments, it is important to be aware that even though the conduct of the host government is not tantamount of expropriation, it may be possible to establish a violation of the FET standard by the host government depending on the particular facts of the case. Based on various investor-state arbitration decisions, the FET standard is usually associated with, amongst others:

1) The protection of an investor's legitimate expectation;

2) Protection against the denial of justice;

3) Protection of due process, transparency and consistency during the course of legislative or administrative proceedings; and

4) Host state provides a stable and predictable legal and business environment for an investment.