Abstract:
In a contemporary world investment is one of the main sources of economic
development. States use investment guarantees as a method to promote investment.
There are many types of Investment guarantee standards and one of them is the “full
protection and security” standard. The standard suggested that the host state is under
the obligation to take active measures to protect the investment from adverse effects.
However, the extent of protection advocated by the standard is a point of
disagreement between the host state and the investors. Debates exist regarding the
question of whether the standard covers not only physical but also legal security, and
also whether the liability it imposes is of a due-diligence or a strict liability. The
decisions of various tribunals adopt a restrictive interpretation of the phrase „full
protection and security. This research tried to see investment guarantees in Ethiopia:
the full protection and security of investments. To that effect, the researcher employed
a qualitative data collection and analysis methodology. Ethiopian investment laws
and several BITs have been consulted; the researcher has also interviewed experts at
the EIC, AAIC, Ethiopian Insurance Corporation, and investors. The main findings of
this research are the existing investment proclamation does not stipulate the FPS
standard. There exists no formally decided arbitral award or judicial decisions
dealing with these issues of the FPS standard. Legal experts consulted tend to have
different opinions towards the issues of level of protection and/or standard of liability.
Based on the findings, the research recommends measures to be adopted by the
government. The researcher calls for the responsible organs (the lawmaker,
arbitrators, or judicial courts) to provide uniform and formal decisions about the
issues concerning the level of protection given to investors and the standard of
liability of the country under full protection and security (FPS) standard
