An ICSID tribunal has found that a resolution by Guatemala declaring a contract "injurious" to the State was arbitrary and grossly unfair, in breach of the minimum standard provision under Article 10.5 of the Dominican Republic - Central America Free Trade Agreement (DR-CAFTA) (which is in similar terms to the protection afforded by the North American Free Trade Agreement (NAFTA)). It rejected Guatemala's arguments that the obligation of fair and equitable treatment under that article requires only the minimum standard of treatment under customary international law.

The tribunal adopted the reasoning in ADF Group Inc v USA (NAFTA) (Award, 9 January 2003) and Waste Management v Mexico (NAFTA) (Final Award, 30 April 2004) and held that the minimum standard of treatment is constantly in a process of development. In the opinion of the tribunal, the requirement to provide a fair and equitable standard of treatment as part of the minimum standard of treatment will be infringed by conduct that is, quoting the words of the tribunal in Waste Management, "arbitrary, grossly unfair, unjust or idiosyncratic". The tribunal expressed the view that the Waste Management approach "persuasively integrates the accumulated analysis of prior NAFTA tribunals and reflects a balanced description of the minimum standard of treatment".

The evolutionary view of the minimum standard of treatment is consistent with current trends in NAFTA jurisprudence, and contrasts with the more rigid approach adopted in the Glamis Gold case (see Legal update, Glamis Gold: full report).

Case: Railroad Development Corporation v Republic of Guatemala (Award, 29 June 2012).