The principle of protecting legitimate expectations, a key element of the Fair and Equitable Treatment (FET) standard, has become central in investor-State disputes under bilateral investment treaties (BIT) over the past two decades. According to the tribunal in Micula v. Romania, the doctrine of legitimate expectations means that the investors are entitled to have their expectation interests protected regardless of whether those interests constitute valid or vested rights under the governing domestic legal framework. First raised in Aminoil v. Kuwait, it gained prominence through Metalclad andTecmed. Despite the absence of formal precedent, tribunals have developed a substantial body of case law, relying on the broad wording of FET clauses and a teleological interpretation under Article 31 of the Vienna Convention of 1969.
This is exemplified in the recent Eco Oro v. Colombia (Liability Decision), where Colombia’s measures to protect the Páramo, a fragile high-altitude ecosystem known for its exceptional biodiversity and cultural significance to Indigenous communities, affected Eco Oro’s mining ‘acquired rights’ (Concession 3452) recognised under Colombia’s 1988 Mining Code. Following mining reforms inspired by the World Bank, Colombia adopted a new Mining Code in 2001, which removed references to acquired rights and introduced stricter environmental standards. Two years later, after Colombia published the Atlas, a document outlining the provisional boundaries of the Páramo ecosystem, Eco Oro applied for a comprehensive environmental license and submitted its Environmental Impact Assessment (EIA). However, the Ministry of Environment repeatedly rejected the EIA, citing the project’s overlap with the protected Páramo area as mapped in the 2007 Atlas. In 2019, with the final delineation of the Páramo still pending, Eco Oro surrendered its concession and initiated arbitration proceedings against Colombia.
During the arbitration proceedings, Eco Oro maintained that it reasonably expected to exploit the entire area covered by the concession. Colombia argued that, although the ultimate aim of a mining concession is mineral exploitation, such activity remained conditional on prior EIA, which Eco Oro had not obtained.
Interpreting Article 805 of the Canada-Colombia Free Trade Agreement in light of its preamble, the tribunal found Eco Oro could expect fair treatment within a stable legal framework. Yet the State’s inconsistent regulations frustrated these expectations, breaching the FET clause. The majority in the Eco Oro tribunal held the company had acquired rights to exploit the entire concession area, reasoning that any disturbance to the ‘economic equilibrium’ would warrant compensation (para 440). The tribunal established that Eco Oro had a legitimate expectation it was entitled to undertake mining exploitation in the entirety of Concession 3452. By interpreting the mining concession as conferring absolute security of tenure (see López) in its analysis of investor expectations, the arbitral tribunal concluded Colombia’s refusal to enable exploitation in the whole concession area without compensation frustrated Eco Oro’s legitimate expectations.
Beyond Legal Neutrality: A Critique of the Political Function of Legitimate Expectations
This case opens the door to a broader critique of the principle of legitimate expectation. While doctrinal analysis has often focused on how arbitral tribunals expanded this principle in international arbitration, linking it to good faith (Tecmed) or estoppel (Thunderbird), less attention has been paid to its broader political and historical function. Drawing on Michel Foucault’s Archaeology of Knowledge, a critical, decolonial perspective, particularly one informed by anthropology, reveals that the principle is not merely a technical and neutral legal norm. Instead, it operates as a colonial discourse embedded in legal frameworks that entrench and reproduce historically rooted forms of privilege, reinforcing investor property claims, often over Indigenous land, under the guise of legal certainty. This logic is not new: a clear parallel can be drawn between the historical invocation of legitimate expectations by settler communities in Canada, who asserted property and resource exploitation rights over First Nations territories, and the widespread adoption of the same principle in international investment law (IIL), particularly regarding Indigenous land exploitation in the Páramo region, as exemplified by Eco Oro v. Colombia. In this sense, mobilizing a Foucauldian framework is useful, as it highlights how past discursive formations can be reactivated within contemporary legal norms, revealing dominant practices once suppressed and tracing the continuities and recurrences that bind past to present.
Albert Memmi’s analysis in The Colonizer and the Colonized, where he identifies profitability and privilege as central to the colonial relationship, core themes that continue to shape the contemporary regime for the protection of foreign investment (see Schneiderman). The coloniser/investor, according to Memmi, not only creates ‘a place for himself’ but also grants ‘himself astounding privileges […] upsetting the established rules and substituting his own’ (see Piketty).
In international investment arbitration involving Indigenous territory, such as Eco Oro and the Páramo region, investors aim, according to Schneiderman, to ‘freeze, and roll back, the regulatory status quo’. He adds: ‘the investment treaty regime aims to ensure that states no longer play any new or significant role in the redistribution of wealth generated by the exploitation of resources on Indigenous lands. Investment law thus requires the state to serve private capital, even at the expense of environmental protection and Indigenous cultures intrinsically tied to these territories, despite ‘these demands hinging on a long history of racially based discrimination and dispossession’ (see Tzouvala).
The principle of legitimate expectation was integral to the discursive framework of European settler colonialism that now serves as a legal foundation for imposing a capitalist mode of governance on host states where Indigenous rights and environmental protections are at stake. Understanding how the principle entrenches economic and colonial privilege requires revisiting foundational property theories, including those of Bentham.
The Effect of Expectation and the Politics of Legal Security
For the English philosopher, property is grounded in a normative and psychological projection toward the future, an affective, anticipatory dimension made possible by a stable legal order. Further, the expectation of being able to use and benefit from one’s property depends on the assurance that it will remain free from external interferences, whether stemming from the interests or needs of others, and on mechanisms minimizing the risk or fear of dispossession.
Contrary to Bentham’s claim that ‘man is not like the animals, limited to the present […] but is susceptible to pains and pleasures by anticipation’, a view that presents legitimate expectation as a universal feature of human consciousness, colonial moments reveal that such sentiments are specific affective modes shaped by the structures of capitalism and colonialism, which have consistently served private interests.
Indeed, based on interviews with settler communities in Canada and the United States, Eva Mackey argues that emotional responses to perceived threats against land rights of the Caldwell First Nation in Canada arise from deeply entrenched ideological frameworks. She demonstrates, for example, how settler families, having appropriated and exploited Indigenous lands, developed a persistent expectation to maintain their claims. This expectation has fuelled ‘settler structures of feeling’ of frustration whenever the security of their land tenure is challenged. But these structures of feeling were not merely a ‘fantasy of entitlement’; they were materially embedded into legal systems. A notable example is the Torrens system. In settler-colonial South Australia, it ensured property rights for those officially registered, but erased unregistered land claims. As Brenna Bhandar has shown, the Torrens system was explicitly designed to provide greater security to title holders, reinforcing settler legal authority through the formalization of ownership.
This notion of expectation resonates strongly within legal discourse, appearing not only in domestic jurisprudence, such as the US Supreme Court decision in City of Sherrill v. Oneida Indian Nation, but also in the framework of BIT. IIL, like liberal and neoliberal legal thought, conceptualises legal relations as essentially bilateral: what matters is the relationship between the state and the investor. In this metaphorical contractual economy, the host state becomes the debtor and the investor the creditor. In Latin, creditor stems from credere (to believe or trust), while payment, derived from pacare (to appease), historically referred not only to monetary transfers but also to the fulfilment of duties and restoration of equilibrium.
This bilateral relationship rests on distrust: as in colonial times, the investment regime is ‘premised on distrust of locals in all branches and at every level of government’. As Memmi noted, the colonised were portrayed as inherently malevolent, and Fanon observed that the native was ‘always presumed guilty’. In this context, the investor’s legitimate expectation serves to discipline states that deviate from established norms, particularly those portrayed as malevolent. When a government adopts an environmental policy that risks affecting investor land tenure, ‘settler structures of feeling’ marked by frustration resurface. If the investor’s credere is violated, the state, as debtor, is expected to restore ‘equilibrium’.
As reflected in the Eco Oro, the tribunal held that the company had acquired rights to exploit the entire concession area, reasoning that any disturbance to the ‘economic equilibrium’, which frustrated Eco Oro’s legitimate expectations, would warrant compensation. Interpreting the mining concession as conferring absolute security of tenure (see López), the tribunal effectively recognised the full ownership of land historically inhabited by Indigenous communities, along with the natural elements and cultural practices that coexist with it, in favour of a private investor.
Claiming such ownership as part of the investor’s legitimate also implies adopting a sovereign conception of property, notably inspired by classical French legal doctrine, where the owner expects to ‘claim the right to exclude all others from walking through it, using it, or enjoying its fruits’ (see Tzouvala). Beyond contributing to what the former UN Special Rapporteur on the environment and several arbitration lawyers have called a chilling effect, where States retreat from legitimate environmental measures under ISDS pressure, the principle of legitimate expectations in Eco Oro also sidelines alternative property forms, especially those promoted by host states resisting the exploitation of so-called ‘unproductive’ land. This approach, derived from the colonial Lockean theory of property set out in Second Treatise of Government, which ties ownership to labour, adds pressure on governments ‘to free up lands that are seemingly unproductive given the absence of familiar forms of exploitation’ (see Schneiderman).
In conclusion, the systematic reliance on legitimate expectations in investment arbitration (Sornarajah), such as in Eco Oro, is framed as universal and embedded in the legal architecture of investment law (Irani). Accordingly, many scholars view both the past and present of IIL as neo-colonial (Sornarajah; Jouannet). Since investor defences hinge on demands for certainty, a genuinely decolonised investment regime may require a stance that refuses axiomatic knowledge and actions rooted in settler certainty, and paradoxically institutionalises (un)certainty.
Julien-Manuel Després is a Research Assistant at Sciences Po Paris Law School, specialising in international environment law and applying critical theoretical approach.