“The applicability of Most-Favoured-Nation (MFN) clauses in International Investment Agreements (IIAs) to dispute settlement provisions with reference to relevant case-law”

 *edited by Chris Tassis

 Introduction

 

One should bear in mind that Bilateral Investment Treaties (BITs) are essentially contracts between two States[1]. No matter how well-designed a contract is, it is undeniable that disputes will always arise between the two signing parties. It is evident, that there is nothing more important for investors than having the ability to protect their investments by seeking recourse to international arbitration. The increasingly complex web overlaying the international investment dispute settlement provisions conduces investors to being more creative. More and more, investors try to take advantage of Most-Favoured-Nation (hereinafter MFN) Clauses in BITs so to access more favourable dispute settlement provisions provided in third party treaties. This essay is composed of six parts. In the first part, the essay gives a flavour of the contention regarding the applicability of MFN Clauses to dispute settlement provisions. The second segment concerns the fragmentation of MFN Clauses in four distinct categories and the appropriate methods for their interpretation. Moreover, in the third part there is a sufficient reference to relevant case-laws, both against and in favour of the applicability of MFN Clauses. In addition, the fourth part addresses a more critical overview of the examined cases, supported by Arbitrators’ and Scholars’ opinions. The next and fifth section, challenges the applicability of the clauses to dispute settlement provisions and raises some concerns regarding the potential implications in States’ public policy issues and their abolition of bargaining power. Last but not least, the conclusion is an overview of the essay’s content with a parallel mention to the need for the creation of a more stable and just investment environment.

 

1. The content of the debate concerning the applicability of MFN Clauses to Dispute Settlement provisions.

 

It seems a steadfast practice that the MFN Clause is applicable to substantive provisions. However, in 2000, an arbitration panel stunned the international investment community with an award that extended the application of the clause to procedural issues. The Maffezini v. Spain[2] case sparked bitter controversy in legal circles whether MFN clauses in BITs include only substantive rules or also procedural exceptions. As Professor Schreuer notes, “its applicability to dispute settlement is the most contentious issue surrounding the clause”[3]. But, what is the actual difference between substantive and procedural rules when it comes to BITs?

• The substantive provisions in a BIT are mostly relevant to the basic rules negotiated between the parties (States) and govern the way that they interact, behave and protect the investments of each other (e.g. fair and equitable treatment, compensation upon expropriation, full and constant protection).
• Procedural rules (dispute settlement provisions) are these that govern the mechanics of how a legal case flows, including steps to process a case (e.g. issues on admissibility and jurisdiction, arbitration panels etc.).

Proponents of the application of MFN clause to dispute settlement provisions reckon that there is no convincing reason for distinguishing between the substantive standards and the procedural ones. Actually, at least one commentator has suggested that dispute settlement provisions have become so important to BITs that they are now substantive clauses[4]. On the other hand, sceptics find that MFN clauses should not be regarded as a form of ‘implied consent’ to arbitration, capable of expanding and/or establishing jurisdiction of tribunals. Such a practice could be compared to a figurative ‘Trojan Horse’[5] remedy which encourages “treaty-shopping”. The actual fear is that certain investors could pluck more favourable clauses and specific provisions from any existing treaty (cherry-picking), disrupting in this way the international investment equilibrium.

In any case, in order to understand better and examine the limitations of the utilization of the MFN clauses, it is imperative to consider critically not only the textual forms that these clauses are written in in BITs but also the methods available for their interpretation. Furthermore, there is need for the segregation of the applicability of MFN clauses in procedural issues relevant to the admissibility and jurisdiction criteria.

 

2. Categorisation of MFN Clauses regarding Dispute Settlement and Methods of Interpretation.

 

1. a) Four distinct categories.

 

Generally, MFN Clauses are thought to be very effective legal remedies for investors to ensure and further protect their investments by virtue of their wide ambit of application. In regard to Dispute Settlement provisions, there are four types of MFN Clauses that make reference to procedural issues directly or indirectly. The compartmentalisation of the categories is conducted according to how favourable they are to including dispute settlement provisions under the MFN Clause. From the most to the least or non-favourable category. So, the four types of the enumerated categories are the under mentioned:

1. MFN Clauses that explicitly affirm that they are intended to apply to dispute settlement provisions[6]. There are not much to challenge in this particular category as both parties have made it sound and clear that they want their negotiated MFN Clause to cover Dispute Settlement as well[7].
2. Broad MFN Clauses. A typical example of a broad clause is one in which the parties generally accord investors “treatment no less favourable” than the provided to third parties. There is not an express mention of the dispute settlement provisions. Broad MFN Clauses could more easily be extended to dispute settlement under the umbrella of the vague term of “treatment”. Treatment is a very broad term which refers to the legal regime that applies to investments once they have been admitted by the host State. Therefore, treatment should be deemed to include procedural provisions as a part of the broader investment protection notion[8].
3. Narrow-Limited Clauses in the context of specific provisions without an explicit inclusion of a Dispute Settlement mechanism. Put differently, these clauses include a non-exhaustive list of what constitutes “treatment” without mentioning Dispute Settlement[9]. In this type of MFN Clause, the “ejusdem generis” principle must be applied to help the arbitrators decide if the dispute settlement provisions belong to the same category of subjects as that to which the clause itself relates[10]. The “ejusdem generis[11]” principle refers to provisions ‘of the same kind’ and it is mostly used to interpret loosely written statutes. A milestone case of the application of a narrow clause is the Ambatielos Case[12]. In this case the MFN Clause between Greece and United Kingdom covers “all matters relating to commerce and navigation”. The arbitration panel concluded that:

4. The last type of MFN Clauses expressly prohibits application to procedural issues[13].

It is quite obvious that these four categories of clauses provide certain possibilities to the utilisation of MFN in Dispute Settlement. Regardless of that fact, it is upon the Tribunal’s discretion to decide how it will interpret and eventually implement the MFN Clause. Given the aforesaid, it is imperative to ensure that the ad hoc Tribunals should follow some collectively respected and accepted ways of interpretation.

 

 

1. b) Interpretation.

 

When a Tribunal has to decide an MFN Clause’s applicability to dispute settlement provisions in BITs, it has to start its analysis based on the Articles 31 and 32 of Vienna Convention on the Law of the Treaties (VCLT). There are three commonly accepted ways of interpreting Treaties and their specific provisions. Textualism, Intentionalism and the Teleological one[14]. The textual approach takes precedence over the other two elements as the text of the Treaty points out the parties’ genuine intention[15]. For this reason, the fragmentation of MFN Clauses is so essential when it comes to their applicability in Dispute mechanisms. The negotiated legislative text on its own provides some certain rights and sometimes sets limitations. Specifically, art. 31 of VCLT refers to three basic instruments for treaty interpretation: (1) the ordinary meaning; (2) the context; (3) the object and purpose of the Treaty. The ordinary meaning of the text is the starting point for interpretation. The artificially wide textual form of MFN Clauses (“treatment”, “all matters”, “rights”) justifies to some extent their application to both substantive and procedural matters. As it seems, the parties through vague language intended to establish application in every matter related to the treaty. However, there are examples that the ordinary meaning of certain words is very difficult to be clarified and the arbitrators should then follow the interpretation model in context of the Treaty and in the light of its object and purpose. According to the principle of integral interpretation (“treaties to be read as a whole”)[16] an interpreter needs to take the rest of the Treaty into consideration. Through this logic, there might come up deviations from the ordinary meaning of the text that would equip the investors with relatively more or less power to invoke MFN Clauses in order to access more favourable dispute settlement provisions. Lastly, interpreters should also take into account the parties’ subjective intention expressed at a later stage regarding similar matters and provisions.

To sum up, no matter how useful and fruitful the former categorisation of MFN Clauses is, an arbitrator should treat each contention in a case-by-case scenario while being, as much as possible, cognizant of the States’ authentic intention, even if it appears to differentiate a lot from the given text in the contentious Treaty.

 

 

3. Indicative Cases against and in favour of MFN application to Dispute Settlement Provisions.

 

In the last two parts, reference was made both to the content of the legal debate regarding the MFN application to procedural matters and the four types of MFN Clauses included in BITs. Taking for granted that arbitrators are capable to follow the proposed methods of treaty interpretation, in this section, relevant case-laws with the issue at stake will be provided. But first, in order to understand better the notion behind these awards, a further segregation between the admissibility and the jurisdiction related issues should be made. Jurisdictional issues concern the scope of consent to arbitration. Put differently, when a host State’s consent to arbitration is absent from a BIT, can investor invoke the MFN Clause therein to establish such consent (pointing that the MFN gives them the ability to rely upon consent given by the host State to a third party)? On the contrary, admissibility issues are mostly relevant to

procedural conditions precedent to the initiation of arbitration. The admissibility issues challenge whether a clause does allow investors to bypass the conditions and limitations that appear in their BITs, but do not exist in other BITs between the host State and third parties[17]. The most common examples of these issues are mediation or exhaustion of local remedies.

 

         a) Cases in favour of the MFN Clause application.

          i) The Applicability of the Clause to a Jurisdictional issue.

           

RoInvest v. Russia[18]. RoInvest invoked the MFN Clause of the UK-Soviet BIT in order to bring its claim under Article 8 of the Denmark-Soviet BIT. The British corporation tried to access a more favourable dispute settlement mechanism. Under Article 8 of the UK-Soviet BIT the tribunal had no jurisdiction over the validity of an expropriation. The Tribunal’s jurisdiction was limited only to contentions regarding the amount or payment of compensation after the expropriation. The validity of the expropriation could be challenged only before domestic courts. RoInvest found that there was no similar provision in the Denmark-Soviet BIT. The Tribunal, based on Article 3(2) of the UK-Soviet BIT, concluded that had jurisdiction to hear the issue. In addition, fully aware of the contradiction between the original jurisdictional clause and the new one expressed the opinion that it sees no reason not to accept procedural clauses regarding jurisdictional issues[19].

         ii) The Applicability of the Clause to an Admissibility-related issue.

 

            Maffezini v. Kingdom of Spain[20]. The Argentinean Claimant faced a dispute with a Spanish chemical distribution company. The Argentina-Spain BIT allowed access to arbitration only if a competent domestic Tribunal rendered an award that failed to solve the problem or eighteen months of litigation passes. The Claimant did not want to be bond to this 18-month “cooling period” so he invoked the MFN Clause to access the dispute mechanism provided in the Chile-Spain BIT that did not include similar provisions. The Tribunal found that dispute settlement provisions are inextricably related to protection of foreign investors and allowed the Claimant to proceed with his claims under the new dispute settlement provisions.

Siemens v. Argentina[21]. This case has many similarities with the Maffezini’s one. The Argentinean BIT contained that there has to be a “cooling period” precedent to the Claimant’s initiation of international arbitration. Siemens took advantage of the Chile-Argentina BIT that had not a similar provision. The Tribunal not only accepted Siemens’ claims but also declared

that a claimant is empowered to “cherry-pick” from a more generous provision without being required to comply with conditions (e.g. fork-in-the-road) set forth in the same Treaty[22].

 

 

           b) Cases against the MFN Clause application.

           i) The Inapplicability of the Clause to a Jurisdictional issue.

 

Salini v. Jordan[23]. The Claimant, an Italian corporation had a contractual dispute regarding construction business. The Italy-Jordan BIT allowed for ICSID arbitration only in occasions of Treaty violations and not for private contractual disputes. The Claimant attempted to bring a claim before ICSID based on the Unites States-Jordan BIT that allowed parties to bring contractual disputes before the Tribunal. The Tribunal, after examining the BIT as a whole, rejected Salini’s claims pleading lack of Jurisdiction. It also expressed its concerns regarding possible similar “treaty-shopping” attempts. It actually considered that in order for an MFN Clause to be invoked, there should be fulfilled one of the following two criteria: (1) the States should expressly provide that the clause extends to Dispute Settlement provisions or (2) usage of very broad terms in the clause, such as “all matters subject to the agreement” etc.

Plama v. Bulgaria[24]. The Cyprus-Bulgaria BIT had been negotiated and conducted while Bulgaria was under communist control. Generally, Bulgaria’s practice was not to allow for international arbitration under ICSID. However, Plama wanted to bring the claim before ICSID and tried to support this effort based on the Bulgaria-Finland BIT. The Tribunal refused to discuss the case[25] and stated that: “It is one thing to add to the treatment provided in one treaty more favourable treatment provided in another elsewhere. It is quite another thing to replace a procedure specifically negotiated by parties with an entirely different mechanism”.

       ii) The Inapplicability of the Clause to an Admissibility-related issue.

 

            Wintershall v. Argentina[26]. This case is almost identical to the Siemens v. Argentina one but the Tribunal came to a completely different conclusion. The German corporation invoked the MFN Clause in order to avoid prior submission of disputes to local courts as it was determined in the Argentina-Germany BIT. The Tribunal concluded that the Claimant could not avoid complying[27] with the Article 10(2) of the Argentina-Germany BIT before instituting arbitration. Put in the Tribunal’s words:

                   

 

 

 

 

 

4. Advocates and Opponents of MFN application to Dispute Settlement Provisions.

 

Since the advent of this legal debate in 2000, primarily with the Maffezini case, a considerable number of similar disputes were brought against international tribunals. As mentioned in the previous part, the tribunals’ decisions appear to be inconsistent and difficult to examine. Moreover, under ICSID and UNCITRAL, there is no system of judicial stare decisis to oblige future tribunals to consider themselves bound to “precedent”. In addition, there is not a plethora of homogenous and recurrent decisions that would establish the so-called “Jurisprudence Constante Doctrine” vis-à-vis the application of the MFN Clause to dispute settlement provisions. Therefore, in order to better understand the two sides of the debate concerning the applicability of the Clause, the critical engagement of legal scholars seems almost imperative.

While some approve the applicability of the MFN Clause, others disapprove its application. Supporters reckon that the MFN Clause’s applicability would beneficially contribute into shaping a more multilateral, coherent and safe international investment environment. As Professor Francisco Orrego Vicuna, President of the Maffezini Tribunal, states: “The application of the clause to dispute settlement provisions extends the globalisation and harmonisation of dispute settlement arrangements”[28]. Other advocates of the MFN application to procedural issues claim that by the reason of the effet utile, the Clause should always apply to dispute settlement mechanisms in order to create a more universal and multilateral investment field and in parallel to make the equilibrium of BITs more stable[29]. Another, less solid, argument of the exponents is that States that include an MFN Clause in their treaties must be held accountable for it. As Stephanie Parker points out: “the MFN treatment is not required by customary international law, an MFN Clause in a treaty is voluntarily and consciously added by the drafters of the treaty”[30]. There is no doubt that in any form of contract (including Treaties in a broader sense) each signing party should be held accountable for its commitments. The counterargument is that States could not ex ante be fully aware that the MFN Clause could in the future be extended to dispute mechanism provisions, alternatively the parties might have chosen to exclude this specific provision from the overarching application range of the MFN Clause.

In contrast with the aforesaid, opponents to the MFN Clause application to procedural issues make the case that a broad application of MFN treatment would pave the way to “undesirable” and “disruptive treaty-shopping”. Their major argument is diametrically opposed to the advocates’ opinion. While Professor Schill supports that “Treaty-shopping” is not necessarily an undesirable practice[31], Brigitte Stern argues that “Treaty-shopping” could be detrimental to the true consent given by the states[32]. She aptly gives an example: “They (investors) would choose a more favourable evidentiary rule from BIT A, a more favourable statute of limitation from BIT B, and a more favourable arbitration rule or forum from BIT C”. As a result, the dispute settlement mechanism could look very different from the mechanism that the State initially negotiated and consented under any BIT. Basically, opponents of the applicability of MFN Clause in dispute settlement provisions believe that the undesirable practices of both “treaty-shopping” and “cherry-picking” would act as an extra-efficient remedy in the investors’ quiver, giving them more and more power to push States to comply with their rules and eventually grant them with generally more favourable treatment.

To sum up, both sides have their arguments and their reasons to support even more their position. In any case, there are some serious concerns that may arise, regarding not only the investors’ potential “abusive conduct” but also some public policy issues. In the next segment, some of these issues will be addressed so to give an alternative scope in the way that Tribunals should currently and from now on deal with these contentions.

 

 

5. Concerns that arise subsequently with the extension of MFN to Dispute Settlement Provisions.

 

It is an undeniable fact that the overall sense of security and harmonisation is a crucial element in every investment. Given the fact that, the potential applicability of MFN Clause to dispute settlement provisions could be beneficial as it is considered to create an integrated network of international investment treaties, a network similar to a de facto multilateral agreement toward a de facto multilateralism[33]. If that statement is correct, then why has there not been created a collective overarching super-Treaty that would govern all the matters related to investments and BITs in general? The answer is simple. States give consent in BITs to grant certain prerogatives to certain State-parties. This practice has led to the so-called “Spaghetti effect” as there are more than 2.700 Treaties currently in force. Tribunals by applying the MFN Clause to dispute settlement provisions would weaken the bilateral character of the Treaties.

Moreover, there seems to exist a misperception regarding the notion of the “powerful and all-mighty” State. A few years ago, the majority of legal scholars and epistemic communities considered the State as the powerful actor and investors as the ones that need to be protected due to the asymmetry in bargaining power during the negotiations and the litigation process. The last twenty years, both the break-out of capitalism/free movement of capital and the proliferation of legal remedies have to some extent turned the tables on the relationship between the two actors. Nowadays, there are investors that possess economic resources adequate enough to put some serious pressure to States. Subsequently, granting investors the right to invoke the application of MFN to dispute mechanisms weakens States’ bargaining powers and capabilities even more. States have already been cautious in exercising their “dubious” regulatory autonomy so to avoid being sued. A further extension of MFN to procedural matters could conduce to “regulatory chill” as States could be more vulnerable to lawsuits, concerning matters related to the investment, that they had not taken into consideration during the BIT negotiations’ process.

Actually, it appears that nowadays States are the ones that need further protection for two main reasons: (a) States can no longer renounce MFN Clause’s more favourable treatment by reason of Public Policy issues; (b) States cannot in an afterthought stage repudiate the application of MFN Clause to dispute settlement provisions. These practices would be held to be a “credibility suicide”. States’ end-goal is to attract investments. By adding in later stage, less favourable provisions to BITs they simply discredit themselves. It is exactly the same thing as the example of a State invoking international arbitration as a claimant, something that almost never happens. To summarise, States are not as powerful as they were regarded to be and arbitrators should try to keep this in mind before deciding to extent rights to investors.

 

 

6. Conclusion.

 

Throughout this essay, the main content of the legal debate vis-à-vis the applicability of the MFN Clause to dispute Settlement provisions has been addressed. The plethora of the Tribunals’ awards shows that they are not strictly investor centric[34]. On the other hand, it is extremely difficult to create a judicial system that will enhance States’ predictability in the context of investment disputes. However, there is a need to find the legal “Laffer Curve[35]” between investors’ and States’ interests. The golden middle that would allow the creation of an MFN clause that would reflect and serve their intentions in a more proper way. If that is not possible, an alternative and more novel solution should be adopted. The signing parties could draft collectively supplementary texts in which they would expressively clarify whether the MFN Clause is applicable to dispute settlement provisions or not[36]. Hopefully, that last suggestion could act as a conduit to give to the contracting parties, even at a later stage, the possibility and the capacity to avoid any contentions and to further restore the sense of confidence and reciprocal understanding that characterises their signed Treaties.

 

Chris Tassis, Trainee Lawyer, M.Sc.

 

 

 

 

 

 

 

 

Bibliography

 

Treaties and Trade Agreements:

 

• Agreement between the Kingdom of Thailand and the Federal Republic of Germany. Concerning the Encouragement and Reciprocal Protection of Investments, art. 3(2), June 24, 2002.
• Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and The Government of [Country] for the Promotion and Protection of Investments, art. 3(3) (2005) (amended 2006) [hereinafter U.K. Model BIT].
• Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and The Government of Republic of Albania for the Promotion and Protection of Investments, art. 3(1) (1994).
• Dominican Republic-Central America-United States Free Trade Agreement, 43 I.L.M. 514 (2004).
• North American Free Trade Agreement art. 1103(1) – (2). U.S.-Can.-Mex… Dec. 17, 1992, 107 Stat. 2057, 32 I.L.M. 289 (1993).

 

 

Table of Cases:

 

• Ambatielos Case (Greece. v. U.K.). 12 R.I.A.A. 91, 106 (Mar. 6. 1956) (claiming that Greece had not been afforded treatment in accord with “justice,” “right,” “equity” and the “principles of international law” that had been assured to nations of other States).
• Berschader v. Russia, SCC Case No. Arbitration V. 080/2004, Award, 171 (Apr. 21, 2006).
• BG Group v. Argentina, UNCITRAL Arbitration, Final Award (Dec. 24, 2007).
• Camuzzi v. Argentina, ICSID Case No. ARB/03/07, Decision on Jurisdiction, 28, 34 (2005).
• Maffezini v. Spain (2000), ICSID Case no. ARB/97/7, Decision of the Tribunal on Objection to Jurisdiction.
• National Grid v. Argentina, UNCITRAL Arbitration, Decision on Jurisdiction (2006).
• Plama Consortium Ltd. v. Republic of Bulgaria, ICSID Case No. ARB/03/24. Decision on Jurisdiction (Feb. 8.2005). 20 ICSID REv. 262 (2005).
• Renta4 v. Russia, SCC Case No. Arbitration V.024/2007, Award on Preliminary Objections (Mar. 20, 2009).
• Roslnvest v. Russia, SCC Case No. Arbitration V. 079/2005, Award on Jurisdiction.
• Salini Costruttori S.p.A. v. Jordan, ICSID Case No.ARB/02/13, Decision on 
Jurisdiction (Nov. 15, 2004).
• Siemens A.G. v. Argentina, ICSID Case No.ARB/02/8, Decision on Jurisdiction, (2004).
• Suez et al. v. Argentina, ICSID Case No.ARB/03/17, Decision on Jurisdiction (2006).
• Telefonica v. Argentina, ICSID Case No. ARB/03/20, Decision of the Tribunal on Objection to Jurisdiction (May 25, 2006).
• Telenor v. Hungary, ICSID Case No.ARB/04/15, Award (Sept. 13, 2006).
• Tza Yap Shum v. Peru, ICSID Case No.ARB/07/6, Decision on Jurisdiction and Competence (June 19, 2009).
• Wintershall v. Argentina, ICSID Case No.ARB/04/14, 178, Award, (2008).

 

 

 

 

 

Books:

 

• Dolzer R. and Schreuer C. (2012), “Principles of International Investment Law”, Second Edition, Oxford University Press.
• Schill SW. (2009), “The Multilateralization of International Investment Law”, Cambridge University Press, 188.
• Schreuer Cristoph (2008), “Introduction: Interrelationship of Standards”, in Standards of Investment Protection 1, at p. 6.

 

 

 

 

Journals and Reports:

 

• Arthur Laffer, (2004), “The Laffer curve: Past, Present and Future”, Executive Summary Backgrounder, no.1765, at p. 1.
• Brigitte Stern (2005), “ICSID Arbitration and the State’s Increasingly Remote Consent: Apropos the Maffezini Case”, in Law in the Service of Human Dignity: Essays in Honour of Florentino Feliciano 246, at p. 256-57.
• Efraim Chalamish (2009), “The Future of Bilateral Investment Treaties: A De Facto Multilateral Agreement?”, 34 BROOK. J.INT’L L. 303, at p. 305.
• Francisco Orrego Vicuna (2004), “International dispute settlement in an evolving global society: constitutionalisation, accessibility, privatization”, at p.67.
• Francisco Orrego Vicuna (2005), “Foreign Investment Law: How Customary is Custom?”, 99 AM. SOC’Y INT’L L. PROC. 97, at p. 100.
• Jürgen Kurtz (2005), “The Delicate Extension of Most-Favoured-Nation Treatment to Foreign Investors: Maffezini v. Kingdom of Spain”, in International Investment Law and Arbitration: Leading Cases from The ICSID, NAFTA, Bilateral Treaties And Customary International Law, 523, 554.
• Nartnirun Junngun (2010), “An MFN Clause and BIT Dispute Settlement: A host State’s implied consent to arbitration by reference”, 15 UCLA J. Int’l L. Foreign Aff. 399, at p. 489.
• Parker Stephanie L (2012), “A BIT at a Time: The proper extension of the MFN Clause to Dispute Settlement Provisions in Bilateral Investment Treaties.”, in The Arbitration Brief 2, no. 1, 30, at p. 56.
• Thulasidhass PR. (2015), “Most-Favoured Nation Treatment in International Investment Law: Ascertaining the Limits through Interpretative Principles”, Amsterdam Law Forum, v. 7, 3, at p. 24.
• Yannick Radi (2007), “The application of the Most-Favoured-Nation Clause to the Dispute Settlement provisions of Bilateral Investment Treaties: Domesticating the ‘Trojan Horse’”, in 18 EUR. J. INT’L. 757, at p. 763.

 

 

 

[1] Parker Stephanie L (2012), “A BIT at a Time: The proper extension of the MFN Clause to Dispute Settlement Provisions in Bilateral Investment Treaties.”, in The Arbitration Brief 2, no. 1, 30, at p. 56.

[2] Maffezini v. Spain (2000), ICSID Case no. ARB/97/7, Decision of the Tribunal on Objection to Jurisdiction.

[3] Schreuer Cristoph (2008), “Introduction: Interrelationship of Standards”, in Standards of Investment Protection 1, at p. 6.

[4] Yannick Radi (2007), “The application of the Most-Favoured-Nation Clause to the Dispute Settlement provisions of Bilateral Investment Treaties: Domesticating the ‘Trojan Horse’”, in 18 EUR. J. INT’L. 757, at p. 763.

[5] Ibid p.757.

[6] Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and The Government of [Country] for the Promotion and Protection of Investments, art. 3(3) (2005) (amended 2006) [hereinafter U.K. Model BIT], (clarifying that the most-favoured-nation clause applies to each article contained in the treaty).

[7] Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and The Government of Republic of Albania for the Promotion and Protection of Investments, art. 3(1) (1994).

[8] Plama Consortium Ltd. v. Republic of Bulgaria, ICSID Case No. ARB/03/24. Decision on Jurisdiction (Feb. 8.2005). 20 ICSID REv. 262 (2005) (“treatment which is not less favourable”). See also, Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7, Decision on Jurisdiction (Jan. 25, 2000). 5ICSID REP. 396 (2002) (“all matters relating to”).

[9] North American Free Trade Agreement art. 1103(1) – (2). U.S.-Can.-Mex.. Dec. 17, 1992, 107 Stat. 2057, 32 I.L.M. 289 (1993) (providing non-exhaustive lists of specific situations in which most-favoured-nation treatment should be accorded to investors and investments, without mentioning dispute settlement mechanisms). See also, Treaty between the Kingdom of Thailand and the Federal Republic of Germany. Concerning the Encouragement and Reciprocal Protection of Investments, art. 3(2), June 24, 2002.

[10] Parker Stephanie L (n. 1) 49.

[11] Ejusdem generis is”[a] canon of construction holding that when a general word or phrase follows a list of specific words, the general word or phrase will be interpreted to include only items of the same type as those listed.” BLACK’s LAW DICTIONARY 594 (9th ed. 2009).

[12] Ambatielos Case (Greece. v. U.K.). 12 R.I.A.A. 91, 106 (Mar. 6. 1956) (claiming that Greece had not been afforded treatment in accord with “justice,” “right,” “equity” and the “principles of international law” that had been assured to nations of other States).

[13] Dominican Republic-Central America-United States Free Trade Agreement, 43 I.L.M. 514 (2004).

[14] Parker Stephanie L (n. 1) p.42.

[15] Nartnirun Junngun (2010), “An MFN Clause and BIT Dispute Settlement: A host State’s implied consent to arbitration by reference”, 15 UCLA J. Int’l L. Foreign Aff. 399, at p. 489.

[16] Ibid p.499.

[17] Dolzer R. and Schreuer C. (2012), “Principles of International Investment Law”, Second Edition, Oxford University Press, at p. 273.

[18] Roslnvest v. Russia, SCC Case No. Arbitration V. 079/2005, Award on Jurisdiction.

[19] See also, Renta4 v. Russia, SCC Case No. Arbitration V.024/2007, Award on Preliminary Objections (Mar. 20, 2009).

[20] Maffezini v. Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction (2000).

[21] Siemens A.G. v. Argentina, ICSID Case No.ARB/02/8, Decision on Jurisdiction, (2004). For Similar cases see, Telefonica v. Argentina, ICSID Case No. ARB/03/20, Decision of the Tribunal on Objection to Jurisdiction (May 25, 2006). See also, Camuzzi v. Argentina, ICSID Case No. ARB/03/07, Decision on Jurisdiction, 28, 34 (2005). See also, Suez et al. v. Argentina, ICSID Case No.ARB/03/17, Decision on Jurisdiction (2006). See also, National Grid v. Argentina, UNCITRAL Arbitration, Decision on Jurisdiction (2006).

[22] Nartnirun Junngun (n.15) p. 426.

[23] Salini Costruttori S.p.A. v. Jordan, ICSID Case No.ARB/02/13, Decision on 
Jurisdiction (Nov. 15, 2004).

[24] Plama Consortium v. Bulgaria, ICSID Case No.ARB/03/24, Decision on Jurisdiction (Feb 8, 2005).

[25] For similar cases see, Berschader v. Russia, SCC Case No. Arbitration V. 080/2004, Award, 171 (Apr. 21, 2006). See also, Telenor v. Hungary, ICSID Case No.ARB/04/15, Award (Sept. 13, 2006). See also, Tza Yap Shum v. Peru, ICSID Case No.ARB/07/6, Decision on Jurisdiction and Competence (June 19, 2009).

[26] Wintershall v. Argentina, ICSID Case No.ARB/04/14, 178, Award, (2008).

[27] See also, BG Group v. Argentina, UNCITRAL Arbitration, Final Award (Dec. 24, 2007).

 

[28] Francisco Orrego Vicuna (2004), “International dispute settlement in an evolving global society: constitutionalisation, accessibility, privatization”, at p.67; Francisco Orrego Vicuna (2005), “Foreign Investment Law: How Customary is Custom?”, 99 AM. SOC’Y INT’L L. PROC. 97, at p. 100.

[29] Jürgen Kurtz (2005), “The Delicate Extension of Most-Favoured-Nation Treatment to Foreign Investors: Maffezini v. Kingdom of Spain”, in International Investment Law and Arbitration: Leading Cases from The ICSID, NAFTA, Bilateral Treaties and Customary International Law, 523, 554. See also, Yannick Radi (n. 4) p. 761.

[30] Parker Stephanie L (n. 1) p. 56.

[31] Schill SW. (2009), “The Multilateralization of International Investment Law”, Cambridge University Press, 188.

[32] Brigitte Stern (2005), “ICSID Arbitration and the State’s Increasingly Remote Consent: Apropos the Maffezini Case”, in Law in the Service of Human Dignity: Essays in Honour of Florentino Feliciano 246, at p. 256-57.

[33] Efraim Chalamish (2009), “The Future of Bilateral Investment Treaties: A De Facto Multilateral Agreement?”, 34 BROOK. J.INT’L L. 303, at p. 305.

 

[34] Thulasidhass PR. (2015), “Most-Favoured Nation Treatment in International Investment Law: Ascertaining the Limits through Interpretative Principles”, Amsterdam Law Forum, v. 7, 3, at p. 24.

[35] Arthur Laffer, (2004), “The Laffer curve: Past, Present and Future”, Executive Summary Backgrounder, no.1765, at p. 1.

[36] Parker Stephanie L (n. 1) p. 59, See also, UK-Model BIT.