Pitting the MFN Genie Back in the Bottle
6 Pages Posted: 20 Apr 2018
Date Written: April 20, 2018
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: Suggested Citation