Most-Favoured-Nation Clauses and the Centrality and Limits of General Principles
General Principles of Law and International Investment Arbitration (A Gattini, A Tanzi & F Fontinelli eds.) (Brill 2018)
Posted: 31 Aug 2018
Date Written: April 1, 2018
Unlike other guarantees of protection found in investment treaties, the obligation to provide most-favoured-nation (MFN) treatment is entirely treaty-based; it has no roots in customary obligations and derives exclusively from the act of concluding a treaty that contains an MFN clause. And yet, notwithstanding this textual pedigree, MFN clauses, unlike any other provision found in investment treaties, have twice been the subject of extended study by the International Law Commission (ILC) to examine whether and to what extent it might be possible to ascertain (and codify) rules or principles relevant to their interpretation and application. This chapter surveys and assesses the key rules, principles and presumptions put forward as applicable to the interpretation of MFN clauses in IIAs by the ILC and in the decisions of arbitral tribunals. In addition, it notes briefly one additional general principle applicable to MFN clauses which has not yet received significant attention in investor-state arbitral practice or the treaty-making practice of states, namely the temporal scope of MFN clauses. Finally, it highlights the ways in which general principles and the issues left unresolved by them have been addressed in a number of recent treaties.
Keywords: Investment Treaties; MFN clauses; most-favored-nation treatment; general principles of law
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