Commitments and Expectations: What Exactly has been Promised to Renewable Energy Investors?

Foreign investors have filed a plethora of arbitration claims against host states who revised economic incentives in the renewable energy sector alleging a breach of the fair and equitable treatment standard. This raises two fundamental questions. First, what kinds of state conduct amount to a commitment? While some arbitral tribunals held that government officials made representations to individual investors, others identified only a general commitment in the regulatory framework. Second, exactly what has been promised to them? Tribunals concluded that claimants had essentially one of three types of (legitimate) expectations: that the regulatory framework would remain absolutely unchanged, that its fundamental features would not be altered, or that they would in any case receive a reasonable return on their investments. The language employed by states and public officials and the interpretation of its precise meaning is (and will continue to be) decisive for the outcome of these disputes.