The Importation of the FET Standard through MFN Clauses: An Empirical Study of BITs

Abstract

The fair and equitable treatment (FET) standard is now found in the vast majority of investment treaties. This article examines the following question. In the event that a BIT does not include an FET clause, can the investor be allowed to invoke the most-favoured nation (MFN) clause, which is typically contained in such treaties, to claim the benefit of an FET clause found in another treaty entered into by the host State? My review of all investment arbitration cases dealing with this issue will show that all tribunals have so far accepted the importation of FET protection through MFN clauses. This article contains the first comprehensive empirical analysis of all those MFN clauses contained in BITs that do not include an FET clause to determine whether or not their scope allows for the importation of FET protection. Finally, one question addressed in this article is whether such an importation should be allowed in all situations or whether there should be circumstances where it should not be permitted.