Ostřanský: From a Fortuitous Transplant to a Fundamental Principle of Law?: The Doctrine of Legitimate Expectations and the Possibilities of a Different Law

Josef Ostřanský (FGV Direito Rio; PUC-Rio Law) has posted From a Fortuitous Transplant to a Fundamental Principle of Law?: The Doctrine of Legitimate Expectations and the Possibilities of a Different Law (in Contingency in the Course of International Law, Ingo Venzke & Keven Jon Heller eds., forthcoming). Here's the abstract:

The doctrine of legitimate expectations (LEs) is now considered a backbone principle of international investment law (IIL), particularly of the fair and equitable treatment standard (FET). Investors argue virtually all investment claims by reference to this notion, and many tribunals refer to it as the most important principle under FET. The mainstream IIL literature has spilled a lot of ink on doctrinally justifying its pride of place in IIL. Open any recent textbook of IIL and you will find discussion on LEs as one of the core principles. However, if one takes a step back, one may see that the notion of legitimate expectations simply appeared in early investment cases ’out of thin air.’ After that, it was picked up and rationalised by later arbitral tribunals and scholarship. In this contribution, I adopt this perspective on the emergence of LEs; not as logical and necessary, but rather as a contingent event.

This contribution will argue that, while LEs’ appearance in IIL practice may be viewed as contingent, its ascendance into the principal doctrine of substantive IIL with specific parameters is neither entirely accidental nor random. The use and parameters of the doctrine have been allowed and facilitated by a specific historical context in which the notion became prominent. In this specific historical context it is: first, the indeterminate and semantically ambiguous legal form of IIL obligations which allows for a multiplicity of legal contents ascribed to those obligations; second, it is a particular political economy that the important actors project at the given historical period through the IIL practice, which fosters a particular version of substantive IIL.

The consequence of this argument can be appreciated at two levels. First, it can be argued that even without the contingent ascendance of the notion of LEs, the field of IIL would likely have taken up a similar substantive trajectory. Second, this argument sheds light on questions about how a more substantial change in the regime might be effected, instead of merely reforming certain aspects of the regime without affecting its current premises, structure, substance, and teleology.

By looking at the micro-level of a technical legal doctrine, this contribution seeks to explain the contingent emergence of the doctrine of LEs without siding with either the formalist accounts stressing the legal necessity and correctness of the turn to LEs or the anti-formalist realist accounts reducing the law to the projection of extra-legal power relations. By doing so, the contribution underlines the difficulties in articulating plausibly what would have made a difference in a particular legal regime. It questions whether some of the current reform initiatives will bear fruit in substantially changing the regime. The efforts must be equally directed at the change of the prevailing political economy and its ideational and material structures and practices. This is, of course, no small feat, but other reform attempts will most likely merely accommodate the critique and reproduce the existing underlying politico-economic arrangements.