Pitting the MFN Genie Back in the Bottle

6 Pages Posted: 20 Apr 2018

See all articles by Michael Waibel

Michael Waibel

University of Cambridge - Faculty of Law; Lauterpacht Centre for International Law; University of Cambridge - Jesus College

Date Written: April 20, 2018

Abstract

This essay underscores the importance of background understandings in general international law for interpreting brief, open-ended clauses such as MFN clauses. Contrary to Batifort and Heath’s claim, I suggest that often interpreters of MFN clauses cannot limit themselves to the text, context, and preparatory materials of a specific MFN clause. A common international negotiating technique, including for investment treaties, is to rely on the general background understanding of what a clause typically means in international law—its default meaning. I also argue that MFN clauses have played a surprisingly limited role in the international investment regime to date. In the main, they have functioned as a stepping stone for procedural and substantive guarantees found in third-party investment treaties. This use, and the limited role of MFN clauses in investment treaty awards, stands in sharp contrast to MFN clauses in the trade regime.

Keywords: MFN, default meaning, international investment law, international trade law

JEL Classification: F13, K33

Suggested Citation

Waibel, Michael, Pitting the MFN Genie Back in the Bottle (April 20, 2018). University of Cambridge Faculty of Law Research Paper No. 28/2017. Available at SSRN: https://ssrn.com/abstract=3166201 or http://dx.doi.org/10.2139/ssrn.3166201

Michael Waibel (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Lauterpacht Centre for International Law ( email )

5 Cranmer Road
Cambridge, CB3 9BL
United Kingdom

University of Cambridge - Jesus College ( email )

Jesus Lane
Cambridge, CB5 8BL
United Kingdom

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