Abstract

When a state imposes a tax measure, it is usual for the investor to claim that the state's tax measure violates its expectation of legal and business stability under the FET clause of an investment treaty. Legitimate expectation operates like estoppel in contract law in the sense that where a state has made an assurance to stabilise the legal and fiscal framework of an investment, either in a stabilisation clause of a state contract, law or undertaking, that assurance is state conduct that has generated the investor's reasonable expectation of legal stability. So, the state cannot resile from its stabilisation commitment because the investor's expectation is routinely recognised and enforced as a subcategory of the FET in several investment arbitration cases. However, the recent Draft Investment Protocol to the AFCFTA excludes the FET in its new AJT clause. Since legitimate expectation is traditionally an element of the FET, its exclusion in the AJT clause may imply that the investor cannot enforce its protection of legitimate expectations. So, this Article examines whether the investor can still enforce its expectation of legal stability under the AJT Clause of the Protocol despite the exclusion of the FET.

This paper will be part of the third TDM Special Issue on "The African Continental Free Trade Agreement (AfCFTA)". More information here www.transnational-dispute-management.com/news.asp?key=1809