MFN Clauses as Bilateral Commitments to Multilateralism – A Reply to Simon Batifort and J. Benton Heath

Forthcoming in 111 American Journal of International Law (2018)

Amsterdam Law School Research Paper No. 2018-01

Amsterdam Center for International Law No. 2018-01

24 Pages Posted: 2 Feb 2018 Last revised: 5 Jul 2018

Date Written: February 2, 2018

Abstract

The present article comments on Simon Batifort and J. Benton Heath, ‘The New Debate on the Interpretation of MFN Clauses in Investment Treaties: Putting the Brakes on Multilateralization’, published in this issue of the American Journal of International Law. It agrees with Batifort and Heath that developments in the drafting of new investment treaties also affect the interpretation of most-favored-nation (MFN) clauses in those agreements. But it rejects the broader argument that these developments, together with the isolated award in İçkale v. Turkmenistan and the position of the States parties on the MFN clause in the North American Free Trade Agreement, should lead to a reevaluation of the interpretation and application of MFN clauses in investment treaties generally. Batifort and Heath’s claim for such a reevaluation is not only doctrinally flawed and based on a misrepresentation of the prevailing approach to interpreting MFN clauses in investment arbitration. Much more, it constitutes a politically and ideologically questionable assault on the commitments States made under these clauses to the multilateral structures that have been built over the past decades in international investment law through treaty-making and dispute settlement and that are currently being reformed by States parties to newer treaties.

Keywords: Most-favored-nation clauses, standards of treatment, international investment agreements, investment arbitration, İçkale v. Turkmenistan, North American Free Trade Agreement, interpretation, multilateralism

JEL Classification: K33

Suggested Citation

Schill, Stephan W., MFN Clauses as Bilateral Commitments to Multilateralism – A Reply to Simon Batifort and J. Benton Heath (February 2, 2018). Forthcoming in 111 American Journal of International Law (2018); Amsterdam Law School Research Paper No. 2018-01; Amsterdam Center for International Law No. 2018-01. Available at SSRN: https://ssrn.com/abstract=3116691

Stephan W. Schill (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

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