Due Diligence in the Context of ‘Full Protection and Security’ Claims
Investors advancing FPS claims bear the burden of proving a want of diligence on the part of the host state. Due diligence is an objective rather than a subjective standard. The objective standard of due diligence implies comparing the host authorities’ conduct with the course of conduct that could be expected from an average state with similar resources and in similar circumstances as the host state. Due diligence cannot be reduced to a general definition. Several factual circumstances play a role in the assessment of diligence. Among other factors, tribunals should consider the existence of an opportunity for positive action, host authorities’ awareness about the risk, certainty as to the legitimacy of the rights and interests at stake, the investor’s conduct, the existence of support by public authorities to private offenders, the need to strike a balance between the investor’s interests and the general interest, compliance with relevant provisions of domestic law, and fulfillment of other due diligence obligations under international law.