Regulating Public Services and International Investment Law

International investment law is increasingly becoming an important reference field of international economic law. The chapter examines if, and the extent to which, investment arbitral tribunals sought to meet the need to respect host State’s capacity to regulate in the public interest. Preliminarily, the chapter deals with the notion of regulation in the public service sector, by exploring its categorization as a right and as a duty of States. Subsequently, it assesses whether the regulation of public services is a matter falling within international investment law’s scope of application and whether all regulatory measures used to govern public services’ provision may fall under international arbitral tribunals’ scrutiny. It then analyses the controversial distinction between lawful regulation and regulatory expropriation under international investment law. To this purpose, the chapter takes into consideration the different approaches adopted by arbitral tribunals, in order to evaluate their capacity to meaningfully contribute to find a balance between investors’ and States’ competing interests with regard to public services. Lastly, the analysis turns to the increasingly important role played by the fair and equitable treatment standard in arbitral practice, also with regard to public services’ cases. In particular, this part of the chapter looks at the difficulties in finding an equilibrium between stability and regulatory change in the public services’ sector, by examining the impact of the legitimate expectations doctrine upon host States’ regulatory autonomy.