Substantive Protections: MFN

Introduction

Arbitral tribunals have grappled with the interpretation and application of most-favoured nation (MFN) clauses in over 100 investment treaty cases. With no doctrine of binding precedent in international arbitration, and the prevalence of different philosophical viewpoints, these cases have given rise to divergent outcomes, particularly on the question of whether an MFN clause can apply to procedural rights and obligations.

In this chapter, MFN jurisprudence is analysed and a framework provided for understanding how seemingly inconsistent decisions on the application of MFN clauses to procedural rights and obligations can (mostly) be explained by certain key variables. These comprise (1) the language of the MFN clause, (2) the ambition of the party relying on it, and ultimately (3) the views of the arbitrators tasked with deciding whether states intend for MFN clauses to apply to procedural issues. Once these analytical filters are applied, not only does the existing jurisprudence appear more coherent but the outcome in future MFN debates should become increasingly predictable.

With that said, an initial word of caution is needed. The authors have deliberately structured the analysis so that the subjective views of individual arbitrators are considered last in the expectation that the first two (objective) criteria should explain most cases. Indeed, if the third filter were controlling – that is, if the determination of MFN debates were wholly dependent on who was appointed to hear the debate – then not only would that lead to more arbitration about whether an MFN claim could be arbitrated, but it would cast doubt on the coherence of the current system for the resolution of investor–state disputes.

Overview of MFN clauses in practice

MFN clauses impose on the host state an obligation to accord to investors of the other state ‘treatment’ no less favourable than that given to investors from third states. They were developed in response to free trade agreements in which states granted preferential market access to other trading partners.[2] The aim of such a provision, as described by the International Institute for Sustainable Development, is ‘to establish the same rules of play for all investors in competition in a given country and to prevent any nationality-based distortions’.[3] (MFN can be distinguished from the ‘national treatment’ standard, which requires states to grant to investors of one state treatment at least as good as what it accords its own nationals.)

In practice, there are three ways an MFN clause can be deployed. First, it could itself be used as the basis of a claim. That is, an investor could seek damages for a breach of the MFN clause based on more favourable treatment allegedly accorded to investors of a third state, in similar circumstances. In Parkerings v. Lithuania (2007), for instance, the tribunal held there was no breach of the MFN clause as alleged since the claimant and the relevant third-state investor were not operating ‘in like circumstances’.[4] Similarly, the tribunal in Bayindir v. Pakistan (2009)[5] rejected the merits of an MFN claim on the basis that the claimant failed to substantiate that it was in ‘a similar situation’ to the third state investor, which was allegedly being accorded more favourable treatment.

Second, an MFN clause can be used to import substantive protections from another investment treaty (the reference treaty) into the treaty relied upon to bring the claim and through which the tribunal has jurisdiction (the principal treaty).

Third, an MFN clause could (depending on the circumstances) be used by an investor to access preferable procedural rights found in the reference treaty or avoid more onerous procedural requirements in the principal treaty.

The focus of the remainder of this chapter is on the second and third of these applications of MFN clauses, particularly the last one in which much of the controversy regarding MFN clauses arises.

Substantive rights

Most investment treaty tribunals have allowed (and in several instances, host states have not objected to) claims in which an investor has invoked an MFN clause to access more favourable substantive protections found in another treaty. This includes allowing investors to access the following rights or benefits through an MFN clause.

  • The fair and equitable treatment (FET) standard: Bayindir v. Pakistan (2005),[6] Rumeli Telekom v. Kazakhstan (2008)[7] and Hesham Warraq v. Indonesia (2014).[8]
  • A broadening of the FET standard to include the obligation to grant investment permits: MTD v. Chile (2004).[9]
  • The full protection and security standard: OAO Tatneft v. Ukraine (2010)[10] and Devas v. India (2016).[11]
  • An obligation not to deny justice: Rumeli Telekom v. Kazakhstan (2008).[12]
  • A broadening of the protection against ‘discriminatory’ measures to include ‘arbitrary’ and ‘unreasonable’ measures: Sergei Paushok v. Mongolia (2011).[13]
  • An obligation to accord ‘treatment no less favourable than that required by international law’: ATA v. Jordan (2010).[14]
  • A higher standard of host state liability: AAPL v. Sri Lanka (1990).[15]
  • A more favourable definition of ‘just compensation’: CME v. Czech Republic (2003).[16]
  • The obligation to provide ‘effective means of asserting claims and enforcing rights’: White Industries v. India (2011).[17]
  • The obligation ‘not to impair by unreasonable, arbitrary, or discriminatory measures the management, maintenance, use, enjoyment, or disposal of such investments’: Rumeli Telekom v. Kazakhstan (2008).[18]
  • An umbrella clause: EDF v. Argentina (2012)[19] and Arif v. Moldova (2013).[20]

Two decisions rendered under the Turkey–Turkmenistan Bilateral Investment Treaty (BIT) MFN clause, however, appear to swim against this jurisprudential tide. The MFN clause guaranteed treatment ‘no less favourable than that accorded in similar situations’ to other investments. The tribunals in İçkale v. Turkmenistan (2016)[21] and Muhammad Cap v. Turkmenistan (2021)[22] both held that the phrase ‘in similar situations’ precluded the use of the MFN clause to access substantive protections in another treaty as the scope of protection under the MFN clause was limited to discriminatory treatment of a claimant investor as compared to other investors in a factually similar situation. In contrast, the tribunal in Bayindir v. Pakistan[23] permitted the import of an FET clause based on an MFN clause that also referred to ‘treatment no less favourable than that accorded in similar situations’ to third state investments.

Nonetheless, there are limits as to how far an MFN clause can be used to benefit from the substantive protections of another treaty. The MFN clause operates within the framework of the principal treaty and thus it cannot be used to, for example, alter the definitions of ‘investor’ (ratione personae)[24] or ‘investment’ (ratione materiae),[25] or the temporal application of the principal treaty (ratione temporis).[26] A tribunal has also ruled that an MFN clause could not be used to escape an express substantive provision of the principal treaty.[27] MFN claims have likewise failed in circumstances where the tribunal held that the relevant substantive protection in the reference treaty was not more favourable than the one in the principal treaty.[28]

Procedural rights and obligations

While the jurisprudence regarding the application of MFN clauses to substantive rights has been largely consistent and predictable, much greater variance has been observed in decisions regarding the application of MFN clauses to procedural rights and obligations. The divergence traces its roots back to the Maffezini v. Spain (2000)[29] decision, in which the tribunal took the view that the MFN clause in the Argentina–Spain BIT applied to procedural rights (specifically, the obligation to pursue local remedies for 18 months before resorting to arbitration). The tribunal based its decision primarily on its interpretation of the terms of the clause and the importance investors attach to procedural rights:

Notwithstanding the fact that the basic treaty containing the MFN clause does not refer expressly to dispute settlement as covered by the MFN clause, the Tribunal considers that there are good reasons to conclude that today dispute settlement arrangements are inextricably related to the protection of foreign investors, as they are also related to the protection of rights of traders under treaties of commerce. . . .[30]

The International Centre for Settlement of Investment Disputes (ICSID) tribunal in Plama v. Bulgaria (2005)[31] took a fundamentally different conceptual approach, although admittedly it was faced with a different MFN clause and a more ambitious argument from the claimant as to how it could be used. Rather than seeking to avoid a procedural burden (as Maffezini did successfully), Plama wanted to access a different type of arbitration (ICSID rather than ad hoc) and expand the tribunal’s jurisdiction to consider more than just a claim for compensation for an expropriation as allowed under the Bulgaria–Cyprus BIT. The Plama tribunal rejected the claim, concluding that the ability to expand a tribunal’s jurisdiction through an MFN clause cannot be implied but must be stated expressly (controversially, drawing on practice from commercial arbitrations):

The tribunal in Maffezini also noted that in other treaties the MFN provision mentions ‘all rights contained in the present Agreement’ or ‘all matters subject to this Agreement’, in which case, according to the [Maffezini] tribunal, ‘it must be established whether the omission [in the Argentina–Spain BIT] was intended by the parties [i.e., Contracting Parties] or can reasonably be inferred from the practice followed by the parties in their treatment of foreign investors and their own investors’ ([Maffezini] Decision, Paragraph 53). The present Tribunal considers such a basis for analysis in principle to be inappropriate for the question whether dispute resolution provisions in the basic treaty can be replaced by dispute resolution provisions in another treaty. As explained above, an arbitration clause must be clear and unambiguous and the reference to an arbitration clause must be such as to make the clause part of the contract (treaty).[32]

The debate as to which of these positions is more appropriate continues some 20 years later. The dividing line between those tribunals that have applied MFN to procedural rights and an even greater number that have rejected that premise across some 45 decisions is set out below.

Decisions on whether an MFN clause extends to procedural rights[33]

MFN clause applies to a procedural right or obligationMFN clause does not apply to a particular procedural issue
Maffezini v. Spain (25 January 2000)Yaung Chi Oo Trading v. Myanmar (31 March 2003)
Siemens v. Argentina (3 August 2004)Tecmed v. Mexico (29 May 2003)
Camuzzi v. Argentina (10 June 2005)Salini v. Jordan (15 November 2004)
Gas Natural v. Argentina (17 June 2005)Plama v. Bulgaria (8 February 2005)
Suez v. Argentina (16 May 2006)Berschader v. Russia (21 April 2006)
Telefónica v. Argentina (25 May 2006)Telenor v. Hungary (13 September 2006)
National Grid PLC v. The Argentine Republic (20 June 2006)Wintershall v. Argentina (8 December 2008)
AWG Group v. Argentina (3 August 2006)Quasar (formerly Renta 4) v. Russia (20 March 2009)
Suez v. Argentina (3 August 2006)Tza Yap Shum v. Peru (19 June 2009)
RosInvest v. Russia (1 October 2007)Austrian Airlines v. Slovak Republic (9 October 2009)
Impregilo v. Argentina (21 June 2011)Les Laboratoires Servier v. Poland (3 December 2010)
Hochtief v. Argentina (24 October 2011)ICS Inspection v. Argentina (10 February 2012)
Teinver v. Argentina (21 December 2012)Daimler v. Argentina (22 August 2012)
Garanti Koza v. Turkmenistan (3 July 2013)EURAM v. Slovak Republic (22 October 2012)
Le Chèque Déjeuner v. Hungary (3 March 2016)Accession Mezzanine v. Hungary (16 January 2013)
Venezuela US v. Venezuela (26 July 2016)Kilic v. Turkmenistan (2 July 2013)
Krederi v. Ukraine (2 July 2018)ST-AD GmbH v. Bulgaria (18 July 2013)
 Sanum v. Laos (13 December 2013)
 H&H v. Egypt (6 May 2014)
 Menzies v. Senegal (5 August 2016)
 A11Y v. Czech Republic (9 February 2017)
 Ansung Housing v. China (9 March 2017)
 Busta v. Czech Republic (10 March 2017)
 Anglia Auto v. Czech Republic (10 March 2017)
 Beijing Urban Construction Group v. Yemen (31 May 2017)
 Christian Doutremepuich v. Mauritius (23 August 2019)
 Heemsen v. Venezuela (29 October 2019)
 Itisaluna v. Iraq (3 April 2020)

This split in the jurisprudence has raised questions about the coherence and predictability of investor–state dispute resolution. The thesis of this chapter, however, is that almost all these decisions can be explained after one applies the correct analytical filters. The most important of these is the precise language of the MFN clause in question to be interpreted and applied by the tribunal.

The precise wording of MFN clauses

The MFN clauses currently in operation vary greatly. Each must be interpreted according to its precise terms. There are clauses with formulations that are seemingly broad (extending, for instance, to ‘all matters’ relating to a protected investment or investor)[34] or narrow (e.g., limiting the MFN obligation to the FET standard)[35] and many other clauses in between.

Before addressing the relevant principles that would help interpret an MFN clause, it is acknowledged that some commentators consider it inappropriate to sift through the precise words used within an MFN clause in order to determine the contracting states’ intentions regarding its application to procedural issues. It is argued that the MFN concept does not apply to procedural rights or matters of jurisdiction as a matter of public international law.[36] In other words, MFN clauses should not be interpreted ‘BIT by BIT’,[37] as it were, because MFN is a ‘term of art in international law and treaty obligations employing this term of art have an ancient pedigree’.[38] But if that ancient pedigree only related to substantive rights, as has been argued, that could be explained by the fact that BITs are a relatively recent phenomenon, starting in 1959,[39] with those providing investors with a direct right of recourse against states not appearing until about a decade later.[40] Before then, investors did not have different procedural rights merely because of their country of origin and therefore no question should have arisen as to whether certain foreign citizens or investors had more favourable procedural treatment than others. Instead, all foreigners had to rely on the domestic court system of the host state in which they invested or their own state to espouse a claim on their behalf through a process known as diplomatic protection. The ‘MFN substantive rights only’ argument is also undermined by the fact some treaties expressly extend MFN clauses to dispute resolution matters. For instance, the UK–Ukraine BIT (1993) incorporated such an MFN clause over a decade before the Maffezini ruling in 2005.[41]

Thus, the concept of ‘MFN’ treatment does not appear to be presumptively limited to substantive rights as a matter of public international law. The precise wording of the MFN clause will need to be considered, as discussed below.

Principles of treaty interpretation

An MFN clause must be interpreted ‘in good faith in accordance with the ordinary meaning’ of its terms ‘in their context and in the light of its object and purpose’ pursuant to Article 31(1) of the Vienna Convention on the Law of Treaties 1969 (VCLT). Article 31 of the VCLT further provides that:[42]

  • the above-mentioned ‘context’ comprises the text of the treaty (including its preamble and annexes) and agreements made in connection with the conclusion of the treaty;[43]
  • any subsequent agreements or practice establishing the interpretation of the treaty terms as between the contracting states as well as any relevant rules of international law applicable in the relations between the contracting states should be considered;[44] and
  • a special meaning shall be given to a term if the parties so intended.[45]

Article 32 of the VCLT allows supplementary means of interpretation, including the travaux préparatoires, to be relied upon to confirm or to determine the meaning of the treaty if applying the Article 31 rules of interpretation yields a result that is ambiguous, obscure or manifestly absurd or unreasonable.[46]

In practice, tribunals interpreting MFN clauses have considered the following principles.

  • The precise terms of the MFN clause.[47]
  • The context, including other clauses in the treaty[48] and the preamble.[49]
  • The relevant object and purpose of the clause[50] or treaty.[51]
  • The negotiation history/travaux préparatoires of the MFN clause.[52]
  • The host state’s treaty practice.[53]
  • The principle of ejusdem generis, which means that an MFN clause can apply to ‘only those rights that fall within the subject matter of the clause’.[54]
  • The principle of contemporaneity, which requires that a clause be considered against the backdrop of circumstances existing at the time the treaty was concluded.[55]
  • The principle of expressio unius est exclusio alterius, with the result that when an MFN clause expressly lists exceptions, all other subject matters (including dispute resolution) should be presumed to fall within the scope of the clause.[56]
  • The principle of effet utile, which has been relied upon to reject an interpretation of the MFN clause, which would (in the tribunal’s view) render other treaty provisions nugatory.[57]

Armed with these tools of treaty interpretation, the different types of MFN clauses now in operation can be considered.

Tribunal decisions on differently worded MFN clauses

MFN jurisprudence can be categorised according to the precise wording of the MFN clause at issue. Those cases in which a tribunal (unanimously or by majority) accepted that an MFN clause could be applied to a procedural or jurisdictional issue are marked below with a tick and those that rejected that premise are indicated with a cross (the symbols are of course for convenience and do not necessarily indicate that a tribunal got the decision right or wrong).

Some MFN clauses expressly extend to dispute resolution provisions

Some MFN clauses expressly stipulate that they apply to dispute resolution provisions.[58] Their application to procedural issues therefore should not be controversial. Nonetheless, there can still be debate as to whether such a clause allows a party to replace one arbitral forum (e.g., ICSID) with another forum (e.g., UNCITRAL ad hoc) taken from a different treaty. This question was considered and answered in the affirmative in the following three cases, although each was accompanied by a dissent.

Garanti Koza v. Turkmenistan (2013)[59]Dissenting opinion of Professor Laurence Boisson de Chazournes
Venezuela US v. Venezuela (2016)[60]Dissenting opinion of Professor Marcelo Kohen
Krederi v. Ukraine (2018)[61]Unidentified dissenting arbitrator[62]

Some MFN clauses expressly exclude dispute resolution provisions from the scope of MFN treatment

At the opposite end of the spectrum, there are some investment treaties that expressly carve-out procedural rights from the scope of the MFN clause. Examples include the following treaties.

xSingapore–Indonesia BITArticle 5(3)
xASEAN–China Investment AgreementArticle 5(4)
xColombia–United Kingdom BITArticle III(2)
xComprehensive and Progressive Agreement for Trans-Pacific PartnershipArticle 9.5(3)

These treaties were all agreed after the Maffezini and Plama decisions and make crystal clear that these states do not want the MFN clause in those treaties to be used to expand a party’s procedural rights.

Most MFN clauses do not expressly refer to dispute resolution clauses

Most MFN clauses are imprecise as to whether they apply to dispute resolution procedures. Generally speaking, the more broadly worded an MFN clause is, the more likely it will be interpreted as extending to dispute resolution provisions.

For instance, a number of tribunals have interpreted MFN clauses that refer to ‘all matters’[63] as being sufficiently broad to include dispute resolution provisions. In all these cases, the claimants relied on the MFN clause to avoid either a requirement to litigate claims before domestic courts before arbitration could be initiated or a pre-arbitration cooling-off (i.e., negotiation) period.

Maffezini v. Spain (2000)[64]
Camuzzi v. Argentina (2005)[65]
Gas Natural v. Argentina (2005)[66]
Telefónica S.A. v. Argentina (2006)[67]
Suez v. Argentina (ICSID Case No. ARB/03/17) (2006)[68]
Suez v. Argentina (ICSID Case No. ARB/03/19) (2006)[69]
AWG v. Argentina (2006)[70]
Impregilo v. Argentina (2011)[71]
Teinver v. Argentina (2012)[72]

The tribunal in Berschader v. Russia (2006), however, held that the MFN clause in the Soviet Union–Belgium BIT (1989) did not cover dispute resolution despite referring to ‘all matters’. While that decision may at first glance appear inconsistent, the tribunal was dealing with a different type of claim. The claimants in the cases listed above were seeking to avoid pre-arbitration litigation or negotiation requirements, whereas the claimants in Berschader argued that the MFN clause could be used to expand the scope of the dispute resolution clause, which only provided for the arbitration of disputes relating to ‘the amount or mode of compensation for [expropriation]’, to include additional causes of action such as an alleged breach of the FET and ‘constant’ security and protection standards.[73]

Some MFN clauses guarantee MFN treatment to ‘activities in connection with investments’, including ‘the management, utilization, use and enjoyment of an investment’[74] (or similar formulation), or ‘management, maintenance, use, enjoyment or disposal of their investments’[75] (or similar formulation) rather than ‘all matters’. Attempts to use such clauses to access more favourable dispute resolution procedures have yielded mixed results.

Some tribunals have accepted that these types of MFN clauses can apply to dispute resolution provisions.

Siemens v. Argentina (2004)[76]
National Grid v. Argentina (2006)[77]
Hochtief v. Argentina (2011)[78]

Others have rejected such attempts.

xWintershall v. Argentina (2008)[79]
xICS Inspection v. Argentina (2012)[80]
xDaimler v. Argentina (2012)[81]

Some MFN clauses are narrowly drafted as applying only to ‘treatment’ of an investor or investment. Tribunals have held that such a formulation does not extend to dispute resolution rights.

xYaung Chi Oo. v. Myanmar (2003)[82]
xSalini v. Jordan (2004)[83]
xPlama v. Bulgaria (2005)[84]
xTelenor v. Hungary (2006)[85]
xAustrian Airlines v. Slovak Republic (2009)[86]
xEURAM v. Slovak Republic (2012)[87]
xKilic v. Turkmenistan (2013)[88]
xST-AD GmbH v. Bulgaria (2013)[89]
xSanum v. Laos (2013)[90]

Other MFN clauses have wording that is even more restrictive, guaranteeing MFN treatment only in relation to the FET standard.[91] Investors have been unsuccessful when attempting to use such clauses to access more favourable dispute resolution provisions found elsewhere.

xQuasar (formerly Renta 4) v. Russia (2009)[92]
xTza Yap Shum v. Peru (2009)[93]

In short, the precise language used in an MFN clause should largely determine its potential utility.

The ambition of the investor – how does it seek to use the MFN clause?

The second factor (or analytical filter) to be considered is how far the investor is seeking to stretch the MFN clause. As noted above in the context of the discussion of Berschader, some investors merely wish to avoid a treaty’s pre-arbitration requirements whereas other claimants have more ambitiously attempted to use an MFN clause to obtain a procedural right that did not otherwise exist. Put simply, the greater the ambition or creativity of the claimant in how it seeks to deploy the MFN clause, the more likely it will fail.

Claimants seeking to avoid mandatory pre-arbitration domestic court litigation or a cooling-off period

Several tribunals have allowed claimants to use MFN clauses to avoid pre-arbitration litigation requirements or cooling-off periods,[94] or both, reasoning that such a requirement is merely procedural and does not affect the state’s consent to arbitration.

MFN clauses referring to ‘all matters’
Maffezini v. Spain (2000)[95]
Camuzzi v. Argentina (2005)[96]
Gas Natural v. Argentina (2005)[97]
Telefónica v. Argentina (2006)[98]
AWG v. Argentina (2006)[99]
Suez v. Argentina (2006) (ICSID Case No. ARB/03/17)[100]
Suez v. Argentina (2006) (ICSID Case No. ARB/03/19)[101]
Impregilo v. Argentina (2011)[102]
Teinver v. Argentina (2012)[103]

MFN clauses referring to ‘activities’ related to the investment, including ‘the management, utilization, use and enjoyment of an investment’ (or similar formulation) or ‘management, maintenance, use, enjoyment or disposal’ of investments[104]

Siemens v. Argentina (2004)[105]
National Grid v. Argentina (2006)[106]
Hochtief v. Argentina (2011)[107]

Nonetheless, there are four instances in which tribunals took the view that an MFN clause cannot be used to avoid a mandatory pre-arbitration litigation requirement before commencing an arbitration, which are grouped below based on the language of the MFN clause.

MFN clauses referring to ‘activities’ related to the investment, including ‘the management, operation, use or enjoyment of an investment’ (or similar formulation) or ‘management, maintenance, use, enjoyment or disposal’ of investments

xWintershall v. Argentina (2008)[108]
xICS Inspection v. Argentina (2012)[109]
xDaimler v. Argentina (2012)[110]

MFN clause referring to ‘treatment’ of investments

xKilic v. Turkmenistan (2013)[111]

The tribunals in these four cases, taking their inspiration from Plama v. Bulgaria, reasoned that the pre-arbitration litigation requirements in a treaty form part of the host state’s consent to arbitration and thus must be complied with for the tribunal to have jurisdiction to determine the claim.[112] According to this school of thought:

There has to be evidence that the MFN provision was designed to apply to change the jurisdictional limitations on the tribunal because the host State’s consent was predicated on compliance with those limitations [i.e., pre-arbitration domestic litigation].[113]

The tribunals in Wintershall, ICS, Daimler and Kilic gave different reasons for rejecting the claimant’s reliance on the MFN clause.

The Wintershall tribunal held that clear and unambiguous language is necessary to extend an MFN clause to procedural rights, noting academic commentary that supported that view.[114] It emphasised that the MFN clause at issue before it (Article 3 of the Argentina–Germany BIT (1991)) referred only to treatment as regards ‘activities’ relating to the investment rather than ‘all matters’ as was the case in Maffezini.[115] Moreover, under the Argentina–Germany BIT, a separate restrictively worded MFN provision (Article 4(4)) guaranteed no less favourable treatment in relation to the relevant substantive protections – full protection and security and expropriation.[116] The tribunal held that the Article 3 MFN clause could not be applied to procedural issues as to do so would deprive Article 4 of utility (applying the effet utile principle).[117] The tribunal criticised the reasoning in Siemens in which a different tribunal had taken the view that Article 4 of the treaty was inserted out of an abundance of caution and thereby allowed the claimant to invoke Article 3 to circumvent the pre-arbitration domestic litigation requirement.[118]

The ICS tribunal emphasised that the prevailing view at the time the principal treaty was agreed was that MFN provisions were limited to substantive protections, invoking the principle of contemporaneity.[119] It also applied the principle of effet utile, noting that allowing the MFN clause to be used to circumvent the pre-arbitral litigation requirement would deprive it of utility.[120] Additionally, it considered the reference to the ‘territory’ of the host state in the MFN clause[121] as further indication that the parties did not intend to include investor–state arbitration within its scope (although it accepted that domestic litigation would be covered).[122]

The Daimler tribunal considered the same MFN clause as in Wintershall and deployed similar reasoning to conclude that the MFN clause could not be used to avoid a pre-arbitral litigation requirement.[123] Additionally, similar to the ICS tribunal, it placed emphasis on the ‘limiting effect’ of a reference to the ‘territory’ of the host state in the MFN clause.[124] (In contrast, such a reference was considered irrelevant by the Maffezini[125] and Hochtief [126] tribunals.)

The Kilic tribunal’s reasoning was focused on the narrow wording of the MFN clause in that case, which was limited to ‘treatment’ of protected investments.[127] It held that this language was most similar to that of other clauses in the same treaty that covered substantive rights, and thus appeared to indicate that the MFN protection was only intended to extend to such rights.[128] Notably, the tribunal acknowledged that it ‘can understand’ that a broader formulation extending to ‘all matters’ or ‘management’ of investments could form the basis of an MFN clause being applied to dispute resolution rights.[129]

Claimants seeking to circumvent a fork-in-the-road provision

Many investment treaties incorporate a ‘fork-in-the-road’, which requires the claimant to elect, irrevocably, to pursue its claim either via international arbitration or through the domestic courts. Notably, fork-in-the-road provisions were specifically identified (in obiter) by the Maffezini tribunal as the type of clauses that could not be avoided by using an MFN clause – on the grounds that to bypass them would ‘upset the finality of arrangements that many countries deem important as a matter of public policy’.[130] Many years later, the tribunal in H&H Enterprises Investments v. Egypt (2014) specifically rejected an attempt to invoke an MFN clause to circumvent a fork-in-the-road provision of the principal treaty.[131]

Claimant seeking to circumvent a time bar

Claimants sometimes seek to avoid a time bar for the filing of claims through an MFN clause. This has failed on at least two occasions.

xTecmed v. Mexico (2003)[132]
xAnsung Housing v. China (2017)[133]

Claimants attempting to expand a tribunal’s jurisdiction beyond limits contained in the relevant BIT

Some investment treaties have dispute resolution clauses that limit the tribunal’s jurisdiction to specific breaches (such as the FET standard) or remedies (for instance, compensation payable for an expropriation). Numerous investors have failed to convince a tribunal that these limitations can be circumvented through an MFN clause to include causes of action or remedies found in other treaties. (For each case, the relevant jurisdictional limitation the investor was seeking to overcome is indicated in parenthesis.)

xSalini v. Jordan (2004)[134] (the dispute resolution (DR) clause in the principal treaty stipulated that any claim under an investment agreement must be resolved according to the relevant contractual mechanism)
xPlama v. Bulgaria (2005)[135] (the right of arbitration was limited to the amount of compensation for an expropriation)
xTelenor v. Hungary (2006)[136] (DR clause in the principal treaty limited to disputes concerning expropriation, payment of compensation for loss through revolution, etc., and repatriation of investments)[137]
xBerschader v. Russia (2006)[138] (arbitration right limited to disputes concerning the amount or mode of compensation payable for expropriation)[139]
xQuasar (formerly Renta 4) v. Russia (2009)[140] (DR clause limited to disputes concerning the amount or method of payment of compensation due for an expropriation)
xTza Yap Shum v. Peru (2009)[141] (arbitration right limited to disputes concerning the amount of compensation due for expropriation)
xAustrian Airlines v. The Slovak Republic (2009)[142] (DR clause limited to the ‘amount or the conditions of payment’ of compensation for expropriation and transfer obligations)
xServier v. Poland (2010)[143] (arbitration right limited to expropriation)
xEURAM v. Slovak Republic (2012)[144] (DR clause limited to amount of compensation for expropriation and transfer obligations)
xAccession Mezzanine v. Hungary (2013)[145] (DR clause limited to claims of expropriation)
xSanum v. Laos (2013)[146] (DR clause provided a right to arbitration only in relation to the amount of compensation for expropriation)
xST-AD GmbH v. Bulgaria (2013)[147] (right of arbitration limited to the amount of compensation)
xA11Y Ltd v. Czech Republic (2017)[148] (arbitration right limited to disputes concerning agreements between investors and the host state, compensation for losses from armed conflict etc., expropriation and transfer of investments and returns)
xBusta v. Czech Republic (2017)[149] (arbitration right limited to breaches of agreements between investors and the host state, compensation for losses for armed conflict etc, expropriation and repatriation of investment and returns)
xAnglia v. Czech Republic (2017)[150] (related claimant to the Busta case with identical tribunal, claims and ruling on the MFN issue)
xBUCG v. Yemen (2017)[151] (arbitration consent limited to the amount of compensation for expropriation, while other disputes could be referred to arbitration upon the mutual agreement of the parties)

The flagbearer for this line of cases in which investors have (unsuccessfully) sought to circumvent an express limitation to a right of arbitration would have to be Plama v. Bulgaria (2005). Nonetheless, only two years later, an investor was able to use an MFN clause to bring additional claims before an investment treaty tribunal in RosInvest v. Russia (2007).[152] Specifically, the tribunal accepted that the MFN clause in Article 3 of the Russia–UK BIT, which refers to treatment ‘as regards [investors’] management, maintenance, use, enjoyment or disposal of their investment’[153] could be used to pursue a claim for expropriation despite the treaty’s dispute resolution clause (Article 8) being limited to the determination of compensation for expropriation.[154] A Swedish district court, however, disagreed and ruled that the tribunal ‘erred in permitting RosInvestCo to use the treaty’s Most-Favoured Nation treatment clause to access a more favourable arbitration clause contained in a different treaty’.[155]

The tribunal in Le Chèque Déjeuner v. Hungary (2016) took a similar approach to the RosInvest v. Russia tribunal, permitting the MFN clause in the France–Hungary BIT to be used to overcome a right of arbitration in the principal treaty limited to expropriation.[156] The MFN clause covered ‘activities in connection with’ protected investments,[157] which the tribunal held was ‘rather wide’[158] and capable of expanding its jurisdiction to cover FET claims.[159] The tribunal was of the view that any limitation on the MFN clause would have to be set out clearly and unambiguously[160] (which is the exact opposite of the approach taken in Plama). Notably, the presiding arbitrator in Le Chèque Déjeuner also sat in the RosInvest case in the same capacity and noted several common features between the clauses and the claims, concluding that: ‘while not all other details are identical or similar, the above common features would speak in favor of a similar result in both cases’.[161] The tribunal (somewhat controversially) also adopted an ‘evolutionary interpretation of the MFN clause’, determining its scope based on the fact that Hungary had agreed to investment treaties incorporating generally worded (i.e., not restricted) arbitration clauses subsequent to the conclusion of the principal treaty.[162]

Claimants seeking to access a different arbitral forum

Investors have occasionally sought to replace one form of arbitration with another, again yielding mixed results.

Tribunals have accepted that an MFN clause could be used to arbitrate before a different forum in three cases in which the MFN clause expressly referred to dispute resolution.

Garanti Koza v. Turkmenistan (2013),[163] noting that allowing such access through the MFN clause gives the investor a choice, which is more favourable than having no choice[164]
Venezuela US v. Venezuela (2016)[165]
Krederi Ltd. v. Ukraine (2018)[166]

However, other tribunals have held that MFN clauses (which, notably, did not expressly refer to dispute resolution) could not be used to unlock access to a different form of arbitration.

xYaung Chi Oo. v. Myanmar (2003)[167]
xPlama v. Bulgaria (2005)[168]
xHeemsen v. Venezuela (2019)[169]
xItisaluna v. Iraq (2020)[170]

These decisions are consistent with the (obiter) view expressed by the Maffezini tribunal that an MFN clause cannot be used to establish consent to a different form of arbitration.[171]

Claimants seeking to import consent to arbitration

Perhaps the most ambitious use of an MFN clause is to seek to deploy it to import a right to arbitration that does not otherwise exist in the principal treaty. This has failed twice.

xChristian Doutremepuich v. Mauritius (2019)[172]The claim was rejected because of the specific wording of the MFN clause as well as the ejusdem generis principle. The tribunal noted the lack of ‘substantial identity between the subject matter’ of the principal treaty, which did not provide a right of arbitration and the reference treaty, which did
xMenzies v. Senegal (2016)[173]The tribunal did not accept that the MFN clause in the GATS trade agreement, which does not contain any dispute resolution provisions at all, could be used to import consent to ICSID arbitration from the Senegal–UK and Senegal–Netherlands BITs

While the claimant in Michael Anthony Lee-Chin v. Dominican Republic (2020)[174] also raised an argument that the tribunal had jurisdiction pursuant to the MFN clause, the tribunal’s majority did not need to decide the issue after determining that the dispute resolution clause in the principal treaty was sufficient to establish its jurisdiction.[175]

The arbitrator divide: Maffezini v. Plama

The relatively high number of dissents issued on the interpretation and application of MFN clauses to procedural issues (16 instances out of 47 cases)[176] as well as the vigour with which many of the majority and dissenting opinions have been expressed confirm that the language of an MFN clause alone and the way an investor seeks to deploy it cannot wholly explain the outcome in all cases. Indeed, arbitrators have repeatedly reached different conclusions despite considering the same objective filters (i.e., the same MFN clause, the same ambition of the claimant, and the same arguments from the parties – as demonstrated in the following table).

Dissenting views as regards the application of the relevant MFN clause to procedural rights[177]

CaseMajorityDissent
Berschader (April 2006)Bengt Sjövall (president), Sergei LebedevTodd Weiler
Impregilo (June 2011)Hans Danelius (president), Charles BrowerBrigitte Stern
Quasar (formerly Renta 4) (March 2009)Jan Paulsson (president), Toby LandauCharles Brower
Austrian Airlines (October 2009)Gabrielle Kaufmann-Kohler (president), Vojtěch TraplCharles Brower
Hochtief (October 2011)Vaughan Lowe (president), Charles BrowerJ Christopher Thomas
Daimler (August 2012)Pierre-Marie Dupuy (president), Domingo Bello JaneiroCharles Brower
Teinver (December 2012)Thomas Buergenthal (president), Henri AlvarezKamal Hossain
Ambiente (February 2013)[178]Bruno Simma (president), Karl-Heinz BöckstiegelSantiago Torres Bernárdez
Venezuela US (July 2016)Peter Tomka (president), Yves FortierMarcelo Kohen
Garanti Koza (July 2013)John M Townsend (president), George Constantine LambrouLaurence Boisson de Chazournes
Busta (March 2017)Yas Banifatemi, (president), Philippe SandsAugust Reinisch
Anglia[179] (March 2017)Yas Banifatemi, (president), Philippe SandsAugust Reinisch
A11Y (February 2017)Yves Fortier (president), Anna Joubin-BretStanimir Alexandrov
Krederi (July 2018)August Reinisch, (president), Markus Wirth, Gavan GriffithThe award notes that an (unidentified) minority disagrees with the majority ruling as regards the MFN clause[180]
Itisaluna (April 2020)Daniel Bethlehem (president), Brigitte SternWolfgang Peter
Michael Anthony Lee-Chin (July 2020)Diego P Fernández Arroyo (president), Christian LeathleyMarcelo Kohen

There have also been instances of entire tribunals agreeing (sometimes unanimously) to a position contrary to that taken by other tribunals considering the same treaty language and the same procedural issue. For example, the tribunals in Siemens (2004), Wintershall (2008), Hochtief (2011) and Daimler (2012) all considered whether the MFN clause in the Argentina–Germany BIT (covering ‘activities’, including ‘management, utilization, use and enjoyment’ of an investment)[181] could be used to circumvent the express obligation to pursue pre-arbitration litigation before Argentinian courts for 18 months before an investor could elevate the matter to investor–state arbitration. While the tribunals in Siemens and Hochtief allowed the claimants to submit their respective disputes directly to arbitration without first going through the domestic courts, the Wintershall and Daimler tribunals took a narrower view and rejected the claims. Dissenting opinions were issued by J Christopher Thomas QC and Professor Charles Brower in Hochtief and Daimler, respectively.

The tribunal majority in Impregilo (2011), which considered the same issue under the Argentina–Italy BIT, lamented that it would be ‘unfortunate if the assessment of these issues would in each case be dependent on the personal opinions of individual arbitrators’.[182] The ST-AD tribunal similarly noted that previous decisions, including the four under the Argentina–Germany BIT, ‘reflect a complete lack of consistency, which results from a fundamental difference of views between various arbitrators’.[183]

The inconsistent decision-making can largely be explained by the philosophical divide between those who, on the one side, align (broadly speaking) with the Maffezini approach that an MFN clause should extend to dispute resolution issues unless expressly excluded and, on the other, those who view the issue as one of jurisdiction based on limitations to the contracting states’ consent to arbitration, thus aligning with the Plama approach that an MFN clause does not extend to dispute resolution provisions unless expressly stated in the treaty. The Plama tribunal, while acknowledging that it was dealing with a more narrowly worded MFN clause[184] and a claimant that was seeking to be more ambitious than that which was attempted in Maffezini,[185] summed up its philosophy thus:

The principle with multiple exceptions as stated by the tribunal in the Maffezini case should instead be a different principle with one, single exception: an MFN provision in a basic treaty does not incorporate by reference dispute settlement provisions in whole or in part set forth in another treaty, unless the MFN provision in the basic treaty leaves no doubt that the Contracting Parties intended to incorporate them.[186]

Without expressing a view on which approach is correct, it is noted that Article 31 of the VCLT essentially requires a good faith interpretation in accordance with the ordinary meaning of the words used, without necessarily requiring that there be ‘no doubt’ as to that interpretation as suggested in Plama.

The table below lists arbitrators according to whether they upheld or rejected an argument to apply an MFN clause to a procedural issue.[187] Admittedly, it is a blunt instrument for analysis as it does not take into account the two objective filters already discussed (i.e., the MFN clause wording and the claimant’s ambition), which will often be determinative of an MFN argument. With that said, we focus on those cases in which there was a dissent as that is a clear indication that the first two objective filters cannot fully explain the decisions reached by all members of the tribunal. The table also includes arbitrators who sat on tribunals that enjoyed unanimity but who rendered decisions on similar claims contrary to other tribunals, again revealing a philosophical divide among the arbitrators.[188] This includes the arbitrators who sat in Le Chèque Déjeuner (2010), which was a unanimous decision, yet clearly in the minority as the outcome was contrary to 12 prior decisions[189] and four subsequent decisions[190] concerning similar MFN clauses while following a decision that was set aside (see above). It is noted that several arbitrators appear on both sides of the table, reflecting either an evolution in their thinking or a change in factual circumstances in the cases being decided.

Select arbitrator views on MFN clauses[191]

MFN clause applied to a procedural issueRejected the application of an MFN clause to a procedural issue
Andrés Rigo Sureda
  • National Grid (president; unanimous)
  • Siemens (president; unanimous)
Andrés Rigo Sureda
  • Sanum Investments (president; unanimous)
Daniel Bethlehem
  • Le Chèque Déjeuner (state; unanimous)
Daniel Bethlehem
  • Itisaluna (president; majority)
Domingo Bello Janeiro
  • Siemens (state; unanimous)
Domingo Bello Janeiro
  • Daimler (state; majority)
Gabrielle Kauffman-Kohler
  • AWG (investor; unanimous)
  • Suez v. Argentina (ICSID Case No. ARB/03/17) (investor; unanimous)
  • Suez v. Argentina (ICSID Case No. ARB/03/19) (investor; unanimous)
Gabrielle Kauffman-Kohler
  • Austrian Airlines (president; majority)
John Townsend
  • Garanti Koza (president; majority)
John Townsend
  • BUCG (state; unanimous)
Yves Fortier
  • Le Chèque Déjeuner (investor; unanimous)
  • Venezuela US (investor; majority)
Yves Fortier
  • A11Y (president; majority)
Alejandro Miguel Garro
  • National Grid (state; unanimous)
Anna Joubin-Bret
  • A11Y (state; majority)
August Reinisch
  • Busta (investor; dissenting)
  • Anglia (investor; dissenting)
Bengt Sjövall
  • Berschader (president; majority)
Charles Brower
  • Quasar (formerly Renta 4) (investor; dissenting)
  • Impregilo (investor; majority)
  • Hochtief (investor; majority)
  • Daimler (investor; dissenting)
  • Austrian Airlines (investor; dissenting)
  • Siemens (investor; unanimous)
  • Telefónica (investor; unanimous)
Brigitte Stern
  • Impregilo (state; dissenting)
  • EURAM (state; unanimous)
  • Sanum (state; unanimous)
  • Itisaluna (state; majority)
  • ST-AD (president; unanimous)
  • Heemsen (state; unanimous)
E Whitney Debevoise
  • National Grid (investor; unanimous)
Fali Nariman
  • Wintershall (president; unanimous)
George Constantine Lambrou
  • Garanti Koza (investor; majority)
J Christopher Thomas
  • Hochtief (state; dissenting)
  • ST-AD (state; unanimous)
Hans Danelius
  • Impregilo (president; majority)
Jan Paulsson
  • Quasar (formerly Renta 4) (president; majority)
  • Doutremepuich (state; unanimous)
Henri Alvarez
  • Teinver (investor; majority)
  • Camuzzi (investor; unanimous)
  • Gas Natural (investor; unanimous)
Kamal Hossain
  • Teinver (state; dissenting)
Karl-Heinz Böckstiegel[192]
  • Le Chèque Déjeuner (president; unanimous)
  • RosInvest (president; unanimous)
Laurence Boisson de Chazournes
  • Garanti Koza (state; dissenting)
Peter Tomka
  • Venezuela US (president; majority)
Marc Lalonde
  • ICS (investor; unanimous)
  • Accession Mezzanine (investor; unanimous)
  • Servier (state; unanimous)
Stanimir Alexandrov
  • A11Y (investor; dissenting)
Marcelo Kohen
  • Venezuela US (state; dissenting)
  • Michael Anthony Lee-Chin (state; dissenting)
Thomas Buergenthal
  • Teinver (president; majority)
  • Maffezini (investor; unanimous)
Philippe Sands
  • Busta (state; majority)
  • Anglia (state; majority)
  • Kilic (state; unanimous)
Todd Weiler
  • Berschader (investor; dissenting)
Piero Bernardini
  • Wintershall (investor, unanimous)
Vaughan Lowe
  • Hochtief (president; majority)
Pierre-Marie Dupuy
  • Daimler (president; majority)
  • ICS (president; unanimous)
Wolfgang Peter
  • Itisaluna (investor; dissenting)
Santiago Torres Bernárdez
  • Ambiente (state; dissenting)
  • Wintershall (state; unanimous)
  • ICS (state; unanimous)
 Sergei Lebedev
  • Berschader (state; majority)
 Toby Landau
  • Quasar (formerly Renta 4) (state; majority)
 Unidentified arbitrator
  • Krederi (dissenting)[193]
 Vojtěch Trapl
  • Austrian Airlines (state; majority)
 Yas Banifatemi
  • Busta (president; majority)
  • Anglia (president; majority)

It bears emphasising that the above table provides only a broad-brush analysis of arbitrator decision-making on MFN clauses. Furthermore, a single dissenting (or majority) opinion does not an arbitrator make.[194] Experienced arbitrators will be open-minded when confronted with different factual scenarios, new legal arguments and the shifting winds of arbitral jurisprudence and academic commentary. For instance, Professor Domingo Bello Janeiro supported the Maffezini approach in Siemens (2004) and then switched sides in Daimler (2012) on the basis that, in his words:

(1) judicial practice has become more varied and more awards have been rendered that disagree with the position maintained in the Siemens arbitration; (2) several States, including Argentina, have since refined the focus of the Maffezini / Siemens awards, leading me to rethink my original conclusion and Argentina’s consent to this type of application of the MFN clause; and 3) the Siemens tribunal did not conduct an analysis of several of the points now covered extensively and very carefully by [the Daimler] award (for example, evidence of understanding of the common use of the word ‘treatment’, Argentine practice, limitation of the MFN clause, the logical fallacy of the expressio unius argument).[195]

Professor Gabrielle Kauffman-Kohler allowed the application of an MFN clause to dispute resolution provisions in Suez v. Argentina, wrote an article advocating for that approach, and then subsequently rejected the use of an MFN clause as a basis for the tribunal’s jurisdiction in Austrian Airlines.[196] (The change in Professor Kaufmann-Kohler’s position, however, appears to be consistent with the change in the ambition of the relevant investor – in Suez, the investor sought to avoid a pre-arbitration litigation requirement, whereas in Austrian Airlines, the investor sought to expand the scope of claims that could be brought before the treaty tribunal.) Other arbitrators to adjust their decision-making to the precise circumstances in which an MFN clause was invoked include Andrés Rigo Sureda, Sir Daniel Bethlehem QC, John M Townsend and Yves Fortier QC.

Furthermore, the mere fact an arbitrator forms part of a majority or a unanimous tribunal does not necessarily reflect their own personal views. Arbitrators will often sign awards notwithstanding any disagreements between tribunal members to maintain tribunal harmony and preserve the integrity (and enforceability) of the award. Professor Bello Janeiro explained in Daimler why he had accepted a contrary position on the MFN clause in Siemens (while formally dissenting on other issues):

I participated in the [Siemens] decision, including of course the Decision on Jurisdiction, and endorsed the opinion of the other members of the tribunal specifically in order to ensure the smooth internal functioning of the tribunal. My disagreement related only to aspects with greater actual relevance, repercussion, and substantive content. . . . In addition, my failure to dissociate myself from the formal aspects of the jurisdiction decision can easily be explained by the fact that in practice there was no point in expressing any dissent because the other tribunal members were in full agreement.[197]

Nonetheless, some arbitrators have left little doubt as to where they stand on the application of MFN clauses to procedural issues. Professor Brigitte Stern in her dissenting opinion in Impregilo noted:

Unless specifically stated to the contrary, the qualifying conditions put by the State in order to accept to be sued directly on the international level by foreign investors cannot be displaced by an MFN clause, and a conditional right to ICSID cannot magically be transformed into an unconditional right by the grace of the MFN clause. The access to the right as provided by the basic treaty cannot be modified through an MFN clause. Any other solution comports in my view great dangers.[198]

Others have expressed their views in academic commentary (which, of course, could also evolve over time). In an article, Professor Zachary Douglas QC has:

made the case for a negative answer to the question of whether an MFN clause in a basic treaty can be relied upon by the investor to expand the jurisdiction of an international tribunal established in accordance with the jurisdictional provisions in the basic treaty by incorporating the more favourable ‘treatment’ reflected in the jurisdictional provisions in a third treaty.[199]

The ILC Study Group on MFN clauses suggests that the ‘competing approaches’ in MFN case law reflect ‘a difference between those who regard investment agreements as public international law instruments, and those who regard investor–state dispute settlement as being more of a private law nature akin to contractual arrangements’.[200] Dr Santiago Torres Bernárdez’s dissent in Ambiente appears to be consistent with the foregoing thesis. Dr Bernárdez considered the presumption that dispute resolution must be expressly ‘contracted-out’ of an MFN clause in order to be excluded from its scope as being ‘nonsensical in public international law’, characterising it as ‘the main legal shortcoming’ of Maffezini and similar decisions.[201]

An advocate for the opposing view is Professor Charles Brower, who in his dissenting opinion in Daimler, criticised the ‘analytical flaw’[202] in the majority decision. In his words:

It is difficult to imagine a more fundamental aspect of an investor’s ‘treatment’ by a host Government than that investor’s ability to exercise and defend its legal rights by prompt access to dispute settlement mechanisms, and fair and efficient administration of justice.[203]

This sentiment was echoed by Dr Todd Weiler (also nominated by the investor) in his dissenting opinion in Berschader, in which he disagreed with his colleagues’ decision to follow Plama, arguing:

There is simply no reason to suppose that – absent some specific treaty language – any given MFN provision should be more or less narrowly defined. In other words, MFN clauses apply to all aspects of the regulatory environment governed by an investment protection treaty, including availability of all means of dispute settlement.[204]

Conclusion

The apparent inconsistency in investor–state dispute settlement jurisprudence on the interpretation of MFN clauses and their application to procedural rights or obligations can be largely explained based on the precise language of the MFN clause (and other terms of the treaty) and the ambition of the party invoking it. Nonetheless, it is undeniable that the legal and cultural background of the arbitrators and their specific opinions on the subject can have an impact on how these cases are decided. This is not itself objectionable within a system of law in which there is no doctrine of binding precedent and an increasingly diverse pool of arbitrators. With that said, inconsistent decision-making can fuel calls for reform, including the need for an apex appellate body with the authority to resolve such issues once and for all.

In the meantime, some states have taken the matter into their own hands. Argentina, which was a respondent in many cases in which investors sought to apply MFN clauses to dispute resolution provisions (with mixed results),[205] has entered into new BITs that specifically exclude dispute resolution provisions from the scope of the MFN clause.[206] Recently signed China BITs have included similar limiting language.[207] Australia has likewise terminated a number of its BITs and replaced them with free trade agreements, which include narrower MFN wording that applies only to ‘measures’ taken by the counterparty state (rather than investor rights generally).[208] Other states can also be expected to provide guidance within future treaties (or through joint statements on existing agreements)[209] on how any agreed MFN clause is to be applied in practice, having been alerted to the level of disagreement within the arbitral community on the issue.

Investors can also mitigate the risks and uncertainties as regards MFN clauses. Investments can be structured (or restructured) to fall within the terms of a treaty that provides sufficient substantive protection backed up with a clear right of arbitration without having to rely on an MFN clause. However, should an investor be reliant on an MFN clause to advance its case, the parties will be wise to choose their arbitrators carefully.


Notes

[1] Mark Mangan is a partner and Ananya Mitra is an associate at Dechert LLP. The authors are grateful for the research and analysis undertaken by Miranda Elvidge, as well as further research conducted by Dano Brossmann of Dechert Paris. The chapter is based on a paper first delivered by Mark Mangan at an international arbitration conference in Seoul on 20 August 2014. The chapter reflects the current state of the jurisprudence and should not be taken to represent the personal views of the authors, Dechert LLP or the firm’s clients.

[2] See UNCTAD Series on Issues in International Investment Agreement II, Most-Favoured Nation Treatment: A Sequel (2010), Introduction.

[3] International Institute for Sustainable Development (IISD) Best Practices Series: The Most Favored-Nation Clause in Investment Treaties (February 2017), p. 21.

[4] Parkerings-Compagniet AS v. Republic of Lithuania (ICSID Case No. ARB/05/8), Award dated 11 September 2007 (Laurent Lévy (P), Julian Lew (C), Marc Lalonde (R)) (Parkerings), Paragraphs 366–430. See also the similar ruling in MNSS B.V. and Recupero Credito Acciaio N.V. v. Montenegro (ICSID Case No. ARB(AF)/12/8), Award dated 4 May 2016 (Andrés Rigo Sureda (P), Emmanuel Gaillard (C), Brigitte Stern (R)), Paragraphs 361–364.

[5] Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29), Award dated 27 August 2009 (Gabrielle Kaufmann-Kohler (P), Karl-Heinz Böckstiegel (C), Franklin Berman (R)) (Bayindir (merits)), Paragraphs 386–390 and 421–423.

[6] Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29), Decision on Jurisdiction dated 14 November 2005 (Gabrielle Kaufmann-Kohler (P), Karl-Heinz Böckstiegel (C), Franklin Berman (R)) (Bayindir (jurisdiction)), Paragraphs 227–235. See also Bayindir (merits), Paragraphs 156–160.

[7] Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan (ICSID Case No. ARB/05/16), Award dated 29 July 2008 (Bernard Hanotiau (P), Marc Lalonde (C), Stewart Boyd (R)) (Rumeli Telekom), Paragraph 575. (The parties agreed that Kazakhstan was subject to additional substantive obligations by the operation of the MFN clause: Paragraph 575.) (Annulment decision upheld the award.)

[8] Hesham T. M. Al Warraq v. Republic of Indonesia (UNCITRAL UN-0088-02), Final Award dated 15 December 2014 (Bernardo M Cremades (P), Michael Hwang (C), Fali Sam Nariman (R)) (Hesham Warraq), Paragraphs 547–555.

[9] MTD Equity Sdn. Bhd. & MTD Chile S.A. v. Chile (ICSID Case No. ARB/01/7), Award dated 25 May 2004 (Andrés Rigo Sureda (P), Marc Lalonde (C), Rodrigo Oreamudo Blanco (R)), Paragraphs 103–104. (Annulment decision upheld the award.)

[10] OAO Tatneft v. Ukraine (PCA Case No. 2008-8), Partial Award on Jurisdiction dated 28 September 2010 (Francisco Orrego Vicuña (P), Charles N Brower (C), Marc Lalonde (R)), Paragraphs 249–250. See also Paragraphs 362–365 of the award on the merits dated 29 July 2014.

[11] Cc/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited., and Telcom Devas Mauritius Limited v. The Republic of India (PCA Case No. 2013-09), Award on Jurisdiction and Merits dated 25 July 2016 (Marc Lalonde (P), David R Haigh (C), Anil Dev Singh (R)), Paragraph 496. (David R Haigh issued a dissenting opinion disagreeing with the majority on the ‘essential security defence’ under the principal treaty. Dissenting opinion of Anil Dev Singh on the Award on Quantum.)

[12] Rumeli Telekom, Paragraph 575.

[13] Sergei Paushok et al. v. Government of Mongolia (Ad Hoc/UNCITRAL), Award on Jurisdiction and Liability dated 28 April 2011 (Marc Lalonde (P), Horacio Grigera Naón (C), Brigitte Stern (R)), Paragraphs 307 and 571.

[14] ATA Construction, Industrial and Trading Company v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/08/2), Award dated 18 May 2010 (L Yves Fortier (P), Ahmed Sadek El-Kosheri (C), W Michael Reisman (R)), footnote 16.

[15] Asian Agricultural Products Ltd. (AAPL) v. Republic of Sri Lanka (ICSID Case No. ARB/87/3), Final Award dated 27 June 1990 (Ahmed Sadek El-Kosheri (P), Berthold Goldman (C), Samuel K B Asante (R)) (AAPL), Paragraph 43. (Dissenting opinion of Samuel K B Asante in relation to the majority’s finding that MFN treatment should be accorded to all aliens based on customary international law.)

[16] CME Czech Republic B.V. v. The Czech Republic (UNCITRAL), Final Award dated 14 March 2003 (Wolfgang Kühn (P), Stephen M Schwebel (C), Ian Brownlie (R)), Paragraphs 496 and 500. (Ian Brownlie issued a separate opinion disagreeing with the majority based on the principle of effet utile.)

[17] White Industries Australia Limited v. The Republic of India (UNCITRAL), Final Award dated 30 November 2011 (J William Rowley (P), Charles N Brower (C), Christopher Lau (R)), Paragraphs 11.1.1–11.3.3.

[18] Rumeli Telekom, Paragraph 575.

[19] EDF International SA and others v. Argentina (ICSID Case No. ARB/03/23), Award dated 11 June 2012 (William W Park (P), Gabrielle Kaufmann-Kohler (C), Jesús Remón (R)), Paragraphs 925–934. (Annulment decision upheld the award.)

[20] Franck Charles Arif v. Moldova (ICSID Case No. ARB/11/23), Award dated 8 April 2013 (Bernardo M Cremades (P), Bernard Hanotiau (C), Rolf Knieper (R)) Paragraphs 394–395.

[21] İçkale İnşaat Limited Şirketi v. Turkmenistan (ICSID Case No. ARB/10/24), Award dated 8 March 2016 (Veijo Heiskanen (P), Carolyn Lamm (C), Philippe Sands (R)), Paragraphs 326–332. (Partially dissenting opinion of Philippe Sands, which was not related to MFN. Partially dissenting opinion of Carolyn Lamm regarding credibility of testimony, unrelated to MFN.) (Annulment decision upheld the award.)

[22] Muhammet Cap and Bankrupt Sehil Insaat Endustri VE Ticaret Ltd STI v. Turkmenistan (ICSID Case No. ARB/12/6), Award dated 4 May 2021 (Julian Lew (P), Bernard Hanotiau (C), Laurence Boisson de Chazournes (R)), Paragraphs 789–794 (emphasis added).

[23] See the MFN clause in Bayindir (jurisdiction), Paragraph 201.

[24] ST-AD GmbH v. Republic of Bulgaria (PCA Case No. 2011-06 (ST-BG)), Award on jurisdiction dated 18 July 2013 (Brigitte Stern (P), Bohuslav Klein (C), J Christopher Thomas (R)) (ST-AD), Paragraph 397; Louis Dreyfus Armateurs SAS v. Republic of India (PCA Case No. 2014-26), Decision on Jurisdiction dated 22 December 2015 (Jean E Kalicki (P), Julian Lew (C), J Christopher Thomas (R)), Paragraphs 146–148.

[25] Société Générale in respect of DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este, S.A. v. The Dominican Republic (UNCITRAL, LCIA Case No. UN 7927), Award on Preliminary Objections to Jurisdiction dated 19 September 2008 (Francisco Orrego Vicuña (P), Doak Bishop (C), Bernardo Cremades (R)), Paragraph 41.

[26] Técnicas Medioambientales Tecmed, S.A. v. The United Mexican States (ICSID Case No. ARB (AF)/00/2), Award dated 29 May 2003 (Horacio Grigera Naón (P), José Carlos Fernández Rozas (C), Carlos Bernal Verea (R)) (Tecmed), Paragraph 69; Krederi Ltd. v. Ukraine (ICSID Case No. ARB/14/17), Award dated 2 July 2018 (excerpts) (August Reinisch (P), Markus Wirth (C), Gavan Griffith (R)) (Krederi), Paragraphs 294–295; ABCI Investments Limited v. Republic of Tunisia (ICSID Case No. ARB/04/12), Decision on Jurisdiction dated 18 February 2011 (Bernard Hanotiau (P), L Yves Fortier (C), Pierre Tercier (R)), Paragraph 174. (Dissenting opinion of Brigitte Stern unrelated to MFN.) See also Stephan Schill, ‘Maffezini v. Plama: Reflections on the Jurisprudential Schism in the Application of Most-Favored-Nation Clauses to Matters of Dispute Settlement’, Amsterdam Law School Legal Studies Research Paper No. 2017-12, Amsterdam Center for International Law No. 2017-11, p 15.

[27] CMS Gas Transmission Company v. The Argentine Republic (ICSID Case No. ARB701/08), Award dated 25 April 2005 (Francisco Orrego Vicuña (P), Marc Lalonde (C), Francisco Rezek (R)) (CMS). (Partially annulled by ad hoc committee but not on MFN.) The tribunal held at 377 that such an application of the MFN clause would be inconsistent with the principle of ejusdem generis.

[28] AAPL, Paragraph 54. See also Oxus Gold v. Uzbekistan (UNCITRAL UN-0066-03), Final Award dated 17 December 2015 (Pierre Tercier (P), Marc Lalonde (C), Brigitte Stern (R)), Paragraphs 863–864 (partially dissenting opinion of Marc Lalonde unrelated to MFN).

[29] Emilio Agustín Maffezini v. The Kingdom of Spain (ICSID Case No. ARB/97/7), Decision of the Tribunal on Objections to Jurisdiction dated 25 January 2000 (Francisco Orrego Vicuña (P), Thomas Buergenthal (C), Maurice Wolf (R)) (Maffezini).

[30] Maffezini, Paragraph 54 (emphasis added).

[31] Plama Consortium Limited v. Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction dated 8 February 2005 (Carl F Salans (P), Albert Jan van den Berg (C), V V Veeder (R)) (Plama).

[32] Plama, Paragraph 218.

[33] This table excludes cases in which a claim for the application of an MFN clause to procedural rights was not analysed by the tribunal in the award.

[34] Argentina–Spain BIT (1991): Article IV: ‘1. Each Party shall guarantee in its territory fair and equitable treatment of investments made by investors of the other Party. 2. In all matters governed by this Agreement, such treatment shall be no less favorable than that accorded by each Party to investments made in its territory by investors of a third country.’ (emphasis added).

[35] Russian Federation–Spain BIT (1990), Article 5: ‘1. Each Party shall guarantee fair and equitable treatment within its territory for the investments made by investors of the other Party. 2. The treatment referred to in paragraph 1 above shall be no less favourable than that accorded by either Party in respect of investments made within its territory by investors of a third State.’ (emphasis added). (This is the English translation that is published in the UN Treaty Series. It was quoted in Quasar de Valors SICAV S.A. and others (formerly Renta 4 S.V.S.A and others) v. The Russian Federation (SCC Case. No. 024/2007), Award dated 20 March 2009 (Jan Paulsson (P), Charles N Brower (C), Toby T Landau (R)) (Quasar (formerly Renta 4)) at Paragraph 68.)

[36] See, for example, Zachary Douglas, ‘The MFN Clause in Investment Arbitration: Treaty Interpretation Off the Rails’, Journal of International Dispute Settlement, Vol. 2, No. 1 (2011), pp. 97–113 (Douglas (2011)), p 97: ‘There is a fundamental distinction in general international law between the substantive obligations in a treaty, which are addressed to the state parties, and the provisions that create a jurisdictional mandate for an international tribunal, which are addressed to the tribunal and to the disputing parties, who enter into a relationship of procedural equality once arbitration proceedings have been commenced. This distinction must be respected by investment treaty tribunals in confronting the question of the scope of MFN clauses’; footnote 1: ‘In short, not only is the application of the MFN clause to procedural requirements flawed as a matter of principle, it is redundant in so far as such requirements are not condition precedents to the exercise of the tribunal’s jurisdiction and can be waived in circumstances where strict adherence to them would be futile’; p 99: ‘If each case is to be approached as a sui generis exercise in treaty interpretation, then the prospects for a coherent international law of investment seems remote.’

[37] Quasar (formerly Renta 4), Paragraph 94.

[38] Douglas (2011), p. 99.

[39] According to UNCTAD: ‘the first ever BIT was concluded on 25 November 1959 between Germany and Pakistan and entered into force on 28 April 1962, i.e. 2 years and 5 months after the signing of the treaty’ (UNCTAD, ‘The Entry into Force of Bilateral Investment Treaties (BITs)’, p. 3; https://unctad.org/system/files/official-document/webiteiia20069_en.pdf).

[40] For instance, see Malaysia–Netherlands BIT (1971), Article 12; Congo–France BIT (1972), Article 9.

[41] UK–Ukraine BIT (1993), Article 3(3): ‘For the avoidance of doubt it is confirmed that the [MFN and national] treatment provided for in paragraphs (1) and (2) above shall apply to the provisions of Articles 1 to 11 of this Agreement.’ Article 8 provides for settlement of disputes between an investor and a host state.

[42] This is a unity exercise in which all aspects of Article 31 are to be applied in a singular ‘General rule of interpretation’ as stipulated in the heading of the provision.

[43] VCLT, Article 31(2).

[44] id., Article 31(3).

[45] id., Article 31(4).

[46] id., Article 32.

[47] See Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales de Agua S.A. v. The Argentine Republic (ICSID Case No. ARB/03/17), Decision on Jurisdiction dated 16 May 2006 (Jeswald W Salacuse (P), Gabrielle Kaufmann-Kohler (C), Pedro Nikken (R)) (Suez v. Argentina (ICSID Case No. ARB/03/17)), Paragraphs 55–56. (Separate opinion of Pedro Nikken unrelated to MFN. Annulment decision upheld the award.)

[48] See Vladimir Berschader and Moïse Berschader v. The Russian Federation (SCC Case No. 080/2004), Award dated 21 April 2006 (Bengt Sjövall (P), Todd Weiler (C), Sergei Lebedev (R)) (Berschader), Paragraphs 185–192 (separate opinion by Todd Weiler regarding the interpretation of the MFN clause); Austrian Airlines v. Slovak Republic (UNCITRAL), Final Award dated 9 October 2009 (Gabrielle Kaufmann-Kohler (P), Charles N Brower (C), Vojtěch Trapl (R)) (Austrian Airlines), Paragraph 135. (Separate opinion of Charles N Brower in which he agrees with the majority interpretation of the dispute resolution clause but dissents with respect to the interpretation of the MFN clause.)

[49] Bayindir (merits), Paragraphs 154–157.

[50] UP (formerly Le Chèque Déjeuner) and C.D Holding Internationale v. Hungary (ICSID Case No. ARB/13/35), Decision on Preliminary Issues of Jurisdiction dated 3 March 2016 (Karl-Heinz Böckstiegel (P), L Yves Fortier (C), Daniel Bethlehem (R)) (Le Chèque Déjeuner), Paragraphs 161–163. (Annulment decision upheld the award.)

[51] See Suez v. Argentina (ICSID Case No. ARB/03/17), Paragraph 57; Hesham Warraq, Paragraphs 548–551. See also Berschader, Separate Opinion of Todd Weiler dated 7 April 2006, Paragraphs 5–6.

[52] See Austrian Airlines, Paragraphs 137–140.

[53] Maffezini, Paragraphs 57–61; Telenor Mobile Communications A.S. v. The Republic of Hungary (ICSID Case No. ARB/04/15), Award dated 13 September 2016 (Royston Goode (P), Nicholas W Allard (C), Arthur L Marriott (R)) (Telenor), Paragraphs 96–97; Austrian Airlines, Paragraph 134. See also Plama, Paragraph 195.

[54] See ILC, Final Report of the Study Group on the Most Favoured-Nation clause (2015) (ILC MFN Report (2015)), Paragraphs 79 and 35 (summarising the 1978 ILC Draft Articles on MFN). See Maffezini, Paragraph 56: ‘From the above considerations it can be concluded that if a third-party treaty contains provisions for the settlement of disputes that are more favorable to the protection of the investor’s rights and interests than those in the basic treaty, such provisions may be extended to the beneficiary of the most favored nation clause as they are fully compatible with the ejusdem generis principle. Of course, the third-party treaty has to relate to the same subject matter as the basic treaty, be it the protection of foreign investments or the promotion of trade, since the dispute settlement provisions will operate in the context of these matters; otherwise there would be a contravention of that principle.’ (emphasis added).

[55] ICS Inspection and Control Services Limited (United Kingdom) v. The Argentine Republic (PCA Case No. 2010-9), Award on Jurisdiction dated 10 February 2012 (Pierre-Marie Dupuy (P), Marc Lalonde (C), Santiago Torres Bernárdez (R)) (ICS), Paragraphs 289–296.

[56] See Austrian Airlines, Separate Opinion of Charles Brower dated 9 October 2019, Paragraphs 3–10; for the opposite interpretation based on the same principle, see ICS, Paragraphs 310–313.

[57] ICS, Paragraphs 314–317.

[58] For instance, Article 3 of the Barbados–Venezuela BIT (1994) provides: ‘3. The treatment provided for in paragraphs (1) and (2) [ie MFN provisions] above shall apply to the provisions of Articles 1 to 11 of this Agreement.’ Article 8 provides for settlement of disputes between investors and states. See also footnote 41, above.

[59] Garanti Koza LLP v. Turkmenistan (ICSID No. ARB/11/20), Decision on Objection to Jurisdiction for Lack of Consent dated 3 July 2013 (John M Townsend (P), Laurence Boisson de Chazournes (C), George Constantine Lambrou (R)) (Garanti Koza), Paragraph 62. (Dissenting opinion of Laurence Boisson de Chazournes concerning the interpretation of the MFN clause.)

[60] Venezuela US, S.R.L. v. The Bolivarian Republic of Venezuela (PCA Case No. 2013-34), Interim Award on Jurisdiction dated 26 July 2016 (Peter Tomka (P), L Yves Fortier (C), Marcelo Kohen (R)) (Venezuela US), Paragraphs 100–130. (Dissenting opinion by Professor Marcelo Kohen as regards the interpretation of the MFN clause.)

[61] Krederi, Paragraphs 304 and 341.

[62] The award notes that a minority disagrees with the majority ruling on the MFN issue on the basis that the dispute resolution clause does not provide express consent to arbitration generally but only to UNCITRAL, and the MFN clause cannot be used as a basis of abrogating those limits: Krederi, Paragraph 343.

[63] For example: Article IV(2) of the Argentina–Spain BIT (quoted in Maffezini, Paragraph 38): ‘In all matters subject to this Agreement, [fair and equitable] treatment shall not be less favorable than that extended by each Party to the investments made in its territory by investors of a third country.’ (emphasis added).

[64] Maffezini: Paragraphs 38, 56 and 64.

[65] Camuzzi International S.A. v. The Argentine Republic II (ICSID Case No. ARB/03/7), Decision on Preliminary Objections dated 10 June 2005 (Enrique Gómez-Pinzón (P), Henri C Alvarez (C), Héctor Gros Espiell (R)) (Camuzzi), Paragraphs 15–17, 28 and 34.

[66] Gas Natural SDG, S.A. v. The Argentine Republic (ICSID Case No. ARB/03/10), Decision of the Tribunal on Preliminary Questions of Jurisdiction dated 17 June 2005 (Andreas F Lowenfeld (P), Henri C A Alvarez (C), Pedro Nikken (R)) (Gas Natural), Paragraph 31. (The MFN clause referred to ‘all matters’: see Paragraphs 26 and 30.)

[67] Telefónica S.A. v. The Argentine Republic (ICSID Case No. ARB/03/20), Decision of the Tribunal on Objections to Jurisdiction dated 25 May 2006 (Giorgio Sacerdoti (P), Charles N Brower (C), Eduardo Siqueiros (R)) (Telefónica), Paragraphs 103–104.

[68] Suez v. Argentina (ICSID Case No. ARB/03/17), Paragraphs 55–56. See also Paragraphs 59 and 63.

[69] Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal, S.A. v. Argentine Republic (ICSID Case No. ARB/03/19), Decision on Jurisdiction dated 3 August 2006 (Jeswald W Salacuse (P), Gabrielle Kaufmann-Kohler (C), Pedro Nikken (R)) (Suez v. Argentina (ICSID Case No. ARB/03/19)), Paragraphs 63–68. (Separate opinion of Pedro Nikken unrelated to MFN.) (Decision on annulment upheld the award.)

[70] AWG Group Ltd. v. Argentine Republic (UNCITRAL), Decision on Jurisdiction dated 3 August 2006 (Jeswald W Salacuse (P), Gabrielle Kaufmann-Kohler (C), Pedro Nikken (R)) (AWG), Paragraphs 61–68. (Separate opinion of Pedro Nikken unrelated to MFN.)

[71] Impregilo S.p.A. v. Argentine Republic (ICSID Case No. ARB/07/17), Award dated 21 June 2011 (Hans Danelius (P), Charles N Brower (C), Brigitte Stern (R)) (Impregilo), Paragraphs 12 and 108. (Dissenting opinion of Brigitte Stern in relation to the interpretation of the MFN clause.) (Decision on annulment upheld the award.)

[72] Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic (ICSID Case No. ARB/09/01), Decision on Jurisdiction dated 21 December 2012 (Thomas Buergenthal (P), Henri C Alvarez (C), Kamal Hossain (R)) (Teinver), Paragraphs 159 and 186. (Separate opinion of Kamal Hossain in which he disagrees with conclusions regarding the MFN clause.)

[73] Berschader, Paragraph 86. The tribunal noted that while the MFN clause referred to ‘all matters’, the expression was qualified by a ‘particular’ reference to Articles 4, 5 and 6, which are substantive provisions. The tribunal concluded at Paragraphs 193 and 194 that the expression ‘all matters’ should not be read literally. The tribunal also noted at Paragraphs 202–203 that the available jurisprudence at the time the treaty was concluded did not clearly address the question of whether an MFN right could be applied to an arbitration clause and thus it was ‘distinctly conceivable’ that the state parties did not intend for the MFN clause to apply to dispute resolution provisions.

[74] For example, Article 3(2) of the Argentina–Germany BIT (1991) as translated into English in the UN treaty series (UNTS Vol. 1910, 171 (1996)) states: ‘None of the Contracting Parties shall accord in its territory to nationals or companies of the other Contracting Party a less favorable treatment of activities related to investments than granted to its own nationals and companies or to the nationals and companies of third States.’ The Protocol of the BIT stipulates at Paragraph (2)(a) that: ‘The following shall more particularly, though not exclusively, be deemed “activity” within the meaning of article 3, paragraph 2: the management, utilization, use and enjoyment of an investment.’ (emphasis added).

[75] For instance, Article 3(2) of the UK–Argentina BIT (quoted at National Grid v. Argentina, (UNCITRAL), Decision on Jurisdiction, 20 June 2006 (Andrés Rigo Sureda (P), E Whitney Debevoise (C), Alejandro Miguel Garro (R)) (National Grid), Paragraph 81) states: ‘Neither Contracting Party shall in its territory subject investors or companies of the other Contracting Party, as regards their management, maintenance, use, enjoyment or disposal of their investments, to treatment less favorable than that which it accords to its own investors or to investors of any third State.’ (emphasis added).

[76] Siemens A.G. v. Argentine Republic (ICSID Case No. ARB/02/8), Decision on Jurisdiction dated 3 August 2004 (Andrés Rigo Sureda (P), Charles N Brower (C), Domingo Bello Janeiro (R)) (Siemens), Paragraphs 102–103. (Separate opinion of Domingo Bello Janeiro unrelated to MFN.)

[77] National Grid, Paragraphs 56 and 93.

[78] Hochtief AG v. Argentine Republic (ICSID Case No. ARB/07/31), Decision on Jurisdiction dated 24 October 2011 (Vaughan Lowe (P), Charles N Brower (C), J Christopher Thomas (R)) (Hochtief), Paragraphs 98–99. (Separate opinion of J Christopher Thomas as regards the interpretation of the MFN clause.)

[79] Wintershall Aktiengesellschaft v. Argentine Republic (ICSID Case No. ARB/04/14), Award dated 8 December 2008 (Fali S Nariman (P), Piero Bernardini (C), Santiago Torres Bernárdez (R)) (Wintershall), Paragraphs 191–193 and 197.

[80] ICS, Paragraph 326.

[81] Daimler Financial Services AG v. Argentine Republic (ICSID Case No. ARB/05/1), Award dated 22 August 2012 (Pierre-Marie Dupuy (P), Charles N Brower (C), Domingo Bello Janeiro (R)) (Daimler), Paragraphs 205–206 and 281. Dissenting opinion of Charles N Brower regarding the interpretation of the MFN clause. Separate opinion of Domingo Bello Janeiro explaining why his views on MFN rights had evolved since Siemens (2004).

[82] Yaung Chi Oo Trading PTE Ltd. v. Government of the Union of Myanmar (ASEAN ID Case No. ARB/01/1), Award dated 31 March 2003 (Sompong Sucharitkul (P), James R Crawford (C), Francis Delon (R)) (Yaung Chi) Paragraph 83.

[83] Salini Costruttori S.p.A. and Italstrade S.p.A. v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/13), Decision on Jurisdiction dated 9 November 2004 (Gilbert Guillaume (P), Bernardo M Cremades (C), Ian Sinclair (R)) (Salini), Paragraphs 104 and 119.

[84] Plama, Decision on jurisdiction dated 8 February 2005, Paragraphs 187 and 191.

[85] Telenor, Paragraphs 25, 100 and 102(2).

[86] Austrian Airlines, Paragraphs 122 and 140.

[87] European American Investment Bank AG (Austria) v. Slovak Republic (PCA Case No. 2010-17), Award on Jurisdiction dated 22 October 2012 (Christopher Greenwood (P), Alexander Petsche (C), Brigitte Stern (R)) (EURAM), Paragraphs 407 and 455.

[88] Kilic Insaat Ithalat Ihracat Sanayi ve Ticaret Anonim Sirketi v. Turkmenistan (ICSID Case No. ARB/10/1), Award dated 2 July 2013 (J William Rowley (P), William W Park (C), Philippe Sands (R)) (Kilic), Paragraphs 4.2.1 and 7.9.1. (Separate opinion of William W Park unrelated to MFN. Annulment decision upheld the award.)

[89] ST-AD, Paragraphs 380 and 403. The tribunal noted that the MFN clause was unique as it was ‘included in the same article as the dispute resolution provision, which also includes both substantive protections . . . as well as some procedural and jurisdictional aspects’. It concluded based on a textual analysis and the travaux préparatoires that the MFN clause did not apply to dispute resolution: id., Paragraphs 400–403.

[90] Sanum Investments Limited v. Lao People’s Democratic Republic (PCA Case No. 2013-13), Award on Jurisdiction dated 13 December 2013 (Andrés Rigo Sureda (P), Bernard Hanotiau (C), Brigitte Stern (R)) (Sanum), Paragraphs 344–345 and 358.

[91] For instance, Spain–Soviet Union BIT (1990), Article 5(1)-(2): ‘1. Each Party shall guarantee fair and equitable treatment within its territory for the investments made by investors of the other Party. 2. The treatment referred to in paragraph 1 above shall be no less favourable than that accorded by either Party in respect of investments made within its territory by investors of a third State.’ (emphasis added).

[92] Quasar (formerly Renta 4), Paragraph 119. (Separate opinion of Charles N Brower as regards the interpretation of the MFN clause.)

[93] Tza Yap Shum v. Republic of Peru (ICSID Case No. ARB/07/6), Decision on Jurisdiction and Competence dated 19 June 2009 (Judd Kessler (P), Hernando Otero (C), Juan Fernández-Armesto (R)) (Tza Yap Shum), Paragraph 220. (Request for annulment was dismissed in its entirety, including with respect to the tribunal’s jurisdiction pursuant to the MFN clause.)

[94] Article X of the Spain–Argentina BIT (1991) provides an example of both a negotiation and domestic litigation requirement preceding arbitration: ‘2. If a dispute within the meaning of section 1 cannot be settled within six months as from the date on which one of the parties to the dispute raised it, it shall be submitted, at the request of either party, to the competent tribunals of the Party in whose territory the investment was made. 3. The dispute may be submitted to an international arbitral tribunal in any of the following circumstances: (a) At the request of one of the parties to the dispute, when no decision has been reached on the merits after a period of 18 months has elapsed as from the moment the judicial proceeding provided for in section 2 of this article was initiated or [w]hen such a decision has been reached, but the dispute between the parties persists; (b) When both parties to the dispute have so agreed.’ (This clause is quoted at Teinver, Paragraph 74.)

[95] Maffezini, Paragraphs 56 and 64.

[96] Camuzzi, Paragraphs 15–17, 28 and 34.

[97] Gas Natural, Paragraph 31.

[98] Telefónica, Paragraph 103–104. See also footnote 63 where the tribunal notes that the claims in Plama were ‘considerably more far reaching’.

[99] AWG, Paragraphs 53 and 61–68.

[100] Suez v. Argentina (ICSID Case No. ARB/03/17), Paragraphs 55–66.

[101] Suez v. Argentina (ICSID Case No. ARB/03/19), Paragraphs 61 and 68.

[102] Impregilo, Paragraph 108.

[103] Teinver, Paragraph 186.

[104] In addition to the cases listed, in Ambiente v. Argentina (2013) the claimant contended that the MFN clause in the Argentina–Italy BIT, which referred to ‘the income and activities related to such investments and to all other matters’, could be used to avoid pre-arbitration litigation. The argument was ultimately not considered by the majority, which accepted the claimant’s primary argument that recourse to the Argentine courts would have been futile: Ambiente Ufficio S.p.A. and others v. The Argentine Republic (ICSID Case No. ARB/08/9), Decision on Jurisdiction and Admissibility dated 8 February 2013 (Bruno Simma (P), Karl-Heinz Böckstiegel (C), Santiago Torres Bernárdez (R)) (Ambiente), Paragraphs 628–629. (Separate opinion of Santiago Torres Bernárdez analysing the use of an MFN clause.)

[105] Siemens, Paragraphs 32, 63 and 102–110.

[106] National Grid, Paragraphs 56 and 93.

[107] Hochtief, Paragraphs 98–99.

[108] Wintershall, Paragraphs 191–193 and 197.

[109] ICS, Paragraph 326.

[110] Daimler, Paragraph 281.

[111] Kilic, Paragraph 7.9.1.

[112] Wintershall, Paragraphs 160(2), 162, 172 and 190; ICS, Paragraph 326.

[113] ILC MFN Report (2015), Paragraph 114.

[114] Wintershall, Paragraph 167. See also Paragraphs 169–171.

[115] Wintershall, Paragraph 172.

[116] Article 4(4) of the Argentina–Germany BIT (1991) as translated into English in Siemens, Paragraph 88: ‘(4) The nationals or companies of each Contracting Party shall enjoy in the territory of the other Contracting Party the treatment of the most favored nation in all matters covered in this Article.’ (emphasis added).

[117] Wintershall, Paragraph 163.

[118] Wintershall, Paragraphs 185–186.

[119] ICS, Paragraphs 289 and 292–295. The tribunal relied on jurisprudence and the World Bank draft guidelines for the treatment of foreign direct investment (the World Bank Guidelines). The World Bank Guidelines, according to the tribunal, reflected a distinction between substantive protection and dispute settlement: (ICS, Paragraph 294) ‘Shortly after the time of conclusion of the [principal] Treaty, in 1992, the Development Committee of the World Bank also adopted Guidelines on the Treatment of Foreign Direct Investment. This instrument also does not explicitly define the term “treatment”. However, the structure of the World Bank Guidelines, and in particular Part III devoted to “treatment” and setting forth the range of common substantive standards of investment protection, suggests that the prevailing view at the time was that treatment was meant to cover discrete principles of conduct applicable to the State hosting the foreign investment: the legal regime of the investment safeguarding it from any discriminatory or unfair and inequitable practices within the host State’s territory. Meanwhile, “dispute settlement” is dealt with in Part V of those Guidelines, separately from standards of “treatment”.’

[120] ICS, Paragraphs 315–317.

[121] Article 3(1) of the UK–Argentina BIT states: ‘Neither Contracting Party shall in its territory subject investments or returns of investors of the other Contracting Party to treatment less favourable than that which it accords to investments or returns of its own investors or to investments or returns of investors of any third State.’ (emphasis added).

[122] ICS, Paragraphs 296, 305–308.

[123] Daimler, Paragraph 281. The tribunal referred to the final version of the World Bank Guidelines: Daimler, Paragraph 222.

[124] Daimler, Paragraphs 93, 225–231, 236.

[125] Maffezini, Paragraph 61.

[126] Hochtief, Paragraphs 107–111.

[127] Article II.2 of the Turkey–Turkmenistan BIT (1992) (quoted at Kilic, Paragraph 4.2.1)

[128] Kilic, Paragraphs 7.3.1–7.3.9.

[129] Kilic, Paragraph 7.6.9.

[130] Maffezini, Paragraph 63.

[131] H&H Enterprises Investments, Inc. v. Arab Republic of Egypt (ICSID Case No. ARB/09/15), Award dated 6 May 2014 (redacted) (Bernardo M Cremades (P), Veijo Heiskanen (C), Hamid Gharavi (R)) (H&H), Paragraph 358. The MFN clause referred to ‘treatment’ of ‘investments’ and ‘associated activities in connection with an investment.’: Egypt–US BIT (1986) (not quoted in the award). In the event, the tribunal determined that the fork-in-the-road provision applied to the circumstances of the case but did not in fact deprive it of jurisdiction.

[132] Tecmed, Paragraphs 69–74.

[133] Ansung Housing v. China (ICSID Case No. ARB/14/25), Award dated 9 March 2017 (Lucy Reed (P), Michael Pryles (C), Albert Jan van den Berg (R)), Paragraphs 136–141.

[134] Salini, Paragraphs 70–96 and 102–119.

[135] Plama, Paragraphs 185–210.

[136] Telenor, Paragraphs 100 and 102(2). See also Paragraphs 96–98.

[137] The relevant dispute resolution clause is set out at Telenor, Paragraph 25.

[138] Berschader, Paragraphs 12(i), 151 and 208.

[139] The relevant dispute resolution clause is set out at Berschader, Paragraph 151.

[140] Quasar (formerly Renta 4), Paragraphs 92 and 119. However, the tribunal interpreted the dispute resolution clause, which was limited to compensation for expropriation, as being wide enough to cover the merits of an expropriation claim. For completeness, we note that the award was successfully challenged before the Swedish courts. In its ruling, the Svea Court of Appeal included in its analysis a consideration of both the dispute resolution clause and the MFN provision to conclude that the tribunal lacked jurisdiction: Judgment of the Svea Court of Appeal dated 18 January 2016: Decision on Jurisdiction with respect to ALOS 34 S.L. v. The Russian Federation, SCC Case No. 24/2007, Paragraph 31.

[141] Tza Yap Shum, Paragraphs 216–220.

[142] Austrian Airlines, Paragraphs 133–140.

[143] Les Laboratoires Servier, S.A.S., Biofarma, S.A.S. and Arts et Techniques du Progres S.A.S. v. Republic of Poland (UNCITRAL), Final Award dated 14 February 2012 (William W Park (P), Bernard Hanotiau (C), Marc Lalonde (R)) (Servier), Paragraphs 511 and 519. (Interim award on jurisdiction dated 3 December 2010 is not public.)

[144] EURAM, Paragraphs 450–455.

[145] Accession Mezzanine Capital L.P. and Danubius Kereskedohaz Vagyonkezelo Zrt v. Republic of Hungary (ICSID Case No. ARB/12/3), Decision on Respondent’s Objection under Arbitration Rule 41(5) dated 16 January 2013 (Arthur W Rovine (P), Marc Lalonde (C), Donald M McRae (R) subsequently replaced by Zachary Douglas (R)) (Accession Mezzanine), Paragraphs 73–74.

[146] Sanum, Paragraphs 355 and 358.

[147] ST-AD, Paragraph 371, 375 and 403.

[148] A11Y Ltd v. Czech Republic (ICSID Case No. UNCT/15/1), Decision on Jurisdiction dated 9 February 2017 (L Yves Fortier (P), Stanimir Alexandrov (C), Anna Joubin-Bret (R)) (A11Y), Paragraphs 103–107.

[149] Ivan Peter Busta and James Peter Busta v. Czech Republic (SCC Case No. V 2015/014), Final Award dated 10 March 2017 (Yas Banifatemi (P), August Reinisch (C), Philippe Sands QC (R)) (Busta), Paragraphs 163–169.

[150] Anglia Auto Accessories Ltd. v. Czech Republic (SCC Case No. V 2014/181), Award dated 10 March 2017 (Yas Banifatemi (P), August Reinisch (C), Philippe Sands (R)) (Anglia), Paragraphs 188–194.

[151] Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen (ICSID Case No. ARB/14/30), Decision on Jurisdiction dated 31 May 2017 (Ian Binnie (P), Zachary Douglas (C), John M Townsend (R) (BUCG), Paragraphs 112–121 and 146.

[152] RosInvestCo UK Ltd. v. Russia (SCC Case No. V079/2005), Award on Jurisdiction dated October 2007 (Karl-Heinz Böckstiegel (P), Lord Steyn (C), Franklin Berman (R)) (RosInvest). The final award was rendered on 12 September 2010.

[153] The full text of the MFN clause is set out at RosInvest, Paragraph 23.

[154] RosInvest, Paragraph 133.

[155] Investment Arbitration Reporter, ‘Arbitral Victory in Yukos Case Slowly Unravelling as U.S. Hedge Fund Declines to Spend More Money Defending Arbitral Award from Russian Attack’ (10 April 2012), https://www.iareporter.com/articles/arbitral-victory-in-yukos-case-slowly-unraveling-as-u-s-hedge-fund-declines-to-spend-more-money-defending-arbitral-award-from-russian-attack/. Accessed on 24 September 2021.

[156] Le Chèque Déjeuner, Paragraph 222.

[157] Article 4(1), France–Hungary BIT (1987) quoted at Le Chèque Déjeuner, Paragraph 185: ‘Each Contracting Party shall accord in its territory and maritime zones, to investors of the other Party, in respect of their investments and activities in connection with such investments, the same treatment accorded to its own investors or the treatment accorded to investors of the most-favoured nation, if the latter is more advantageous.’ (emphasis added).

[158] Le Chèque Déjeuner, Paragraph 186.

[159] id., Paragraphs 205 and 221.

[160] id., Paragraph 159.

[161] id., Paragraph 213.

[162] id., Paragraphs 164–175.

[163] Garanti Koza, Paragraphs 75–78.

[164] id., Paragraphs 94–97.

[165] Venezuela US, Paragraphs 100–130.

[166] Krederi, Paragraph 341.

[167] Yaung Chi, Paragraph 83.

[168] Plama, Paragraph 184.

[169] Jorge Heemsen and Enrique Heemsen v. Venezuela (PCA Case No. 2017-18), Award dated 29 October 2019 (Yves Derains (P), Enrique Gomez-Pinzon (C), Brigitte Stern (R)) (Heemsen), Paragraphs 402, 405–410.

[170] Itisaluna Iraq LLC and others v. Republic of Iraq (ICSID Case No. ARB/17/10), Award dated 3 April 2020 (Daniel Bethlehem (P), Wolfgang Peter (C), Brigitte Stern (R)) (Itisaluna). The principal treaty in this case was a multilateral treaty rather than a BIT. The claimants sought to file claims with ICSID for breach of the Organization for Islamic Cooperation (OIC) treaty, which contemplates ad hoc arbitration. The reference treaty was a BIT between the relevant host state and another country. The tribunal considered that MFN clauses are ‘capable of applying’ to dispute resolution provisions but noted that extra caution should be exercised when interpreting a multilateral investment treaty such as the OIC on the basis that an expansive interpretation would ‘inevitably colour the appreciation of the legal obligations of other OIC Agreement Contracting Parties’: Itisaluna: Paragraph 153.

[171] Maffezini, Paragraph 63.

[172] Christian Doutremepuich and Antoine Doutremepuich v. Republic of Mauritius (PCA Case No. 2018-37), Award on Jurisdiction dated 23 August 2019 (Maxi Scherer (P), Olivier Caprasse (C), Jan Paulsson (R)) (Doutremepuich), Paragraphs 217–218.

[173] Menzies Middle East and Africa S.A. and Aviation Handling Services International Ltd. v. Republic of Senegal (ICSID Case No. ARB/15/21), Award dated 5 August 2016 (Bernard Hanotiau (P), Hamid Gharavi (C), Pierre Mayer (R)) (Menzies), Paragraphs 132–145.

[174] Michael Anthony Lee-Chin v. Dominican Republic (ICSID Case No. UNCT/18/3), Partial Award on Jurisdiction dated 15 July 2020 (Diego P Fernández Arroyo (P), Christian Leathley (C), Marcelo Kohen (R)) (Michael Anthony Lee-Chin). (Dissenting opinion of Prof Marcelo Kohen that included an analysis of the MFN clause.)

[175] id., Paragraphs 195–196.

[176] These include dissenting views recorded within the body of the main award (for instance, see Busta, Paragraph 168 and A11Y, Paragraph 108) as well as views set out in ‘separate’ (rather than ‘dissenting’) opinions (for instance, Teinver, Separate Opinion of Kamal Hossain dated 21 December 2012 and Berschader, Separate Opinion of Todd Weiler dated 7 April 2006). In addition to the dissenting opinions from the 45 cases listed in the ‘Decisions on whether the MFN clause extends to procedural rights’ table, we also include, in the ‘Dissenting views as regards the application of the relevant MFN clause to procedural rights’ table, two cases in which a dissenting view was expressed as regards the MFN issue although the tribunal’s majority reached its decision without considering it: Michael Anthony Lee-Chin, Dissenting Opinion of Professor Marcelo Kohen dated 10 July 2020, Section III; Ambiente, Dissenting Opinion of Santiago Torres Bernárdez dated 2 May 2013.

[177] Without wishing to cause offence, arbitrators’ professional and honorary titles have been omitted from the table due to space constraints, while being included when individuals are referenced in the text of the chapter.

[178] The majority ruling was issued in February 2013 and the dissenting opinion was issued in May 2013.

[179] Although listed separately, as noted, this case involved a related claimant to those in the Busta case with an identical tribunal, claims and ruling on the MFN issue issued on the same date for both cases.

[180] Krederi, Paragraph 343.

[181] The four tribunals used slightly different English translations of Paragraph 2 of the Protocol of the Argentina–Germany BIT (1991), which sets out the scope of ‘activities’ under the MFN clause. The Hochtief tribunal referred to ‘management, utilization, use and enjoyment of an investment’, which is the translation published in the United Nations Treaty Series (Hochtief, Paragraph 3) whereas the Siemens, Wintershall and Daimler tribunals referred to ‘the management, maintenance, use and enjoyment of an investment’ (Siemens, Paragraph 63), ‘management, operation, use or enjoyment of an investment’ (Wintershall, Paragraph 169), and ‘management, use, enjoyment, and disposal of an investment’ (Daimler, Paragraph 207), respectively (emphasis added).

[182] Impregilo, Paragraph 108.

[183] ST-AD, Paragraph 386.

[184] Plama, Paragraphs 187 and 205.

[185] Plama, Paragraph 224. See also Paragraph 209 where the tribunal notes: ‘It is one thing to add to the treatment provided in one treaty more favorable treatment provided elsewhere. It is quite another thing to replace a procedure specifically negotiated by parties with an entirely different mechanism.’ The tribunal in Suez v. Argentina, ICSID Case No. ARB/03/19, Paragraph 65 also noted the ‘radical effect’ of the MFN claim in Plama.

[186] Plama, Paragraph 223 (emphasis added).

[187] The below table is a simplified presentation according to which side of the debate the reasoning broadly aligns with. It is noted, however, that in some cases an arbitrator or tribunal broadly follows the Plama approach (by determining that an MFN clause does not extend to dispute resolution unless expressly included) while at the same time distinguishing from the circumstances of the Plama award or even criticising the tribunal’s analysis (see, for instance, Austrian Airlines (Paragraph 119) and Quasar (formerly Renta 4) (Paragraphs 95–96)). The same may be said for some cases that appear to follow the Maffezini approach – see, for example, A11Y (Paragraph 106). Moreover, some cases endorse both Plama and Maffezini; for instance, where a Maffezini public policy exception is applicable (see Itisaluna, Paragraphs 210–212). The table does not capture these nuances. Further, in the table we do not include the majority tribunal members in Ambiente and Michael Lee-Chin, as they did not analyse the MFN issue, while including the arbitrators who issued dissents relating to the MFN clauses in those cases.

[188] In Siemens (2004), National Grid (2006), Wintershall (2008) and ICS (2012), the tribunals rendered inconsistent unanimous decisions concerning similar MFN clauses (referring to ‘activities in connection with investments’, including ‘the management, utilization, use and enjoyment of an investment’ (or similar formulation), or ‘management, maintenance, use, enjoyment or disposal of their investments’) in relation to similar claims (to avoid pre-arbitration procedural requirements). Two other decisions were rendered on similar wording and claims – Daimler and Hochtief – which were accompanied by dissenting opinions.

[189] Salini v. Jordan (2004), Plama v. Bulgaria (2005), Telenor v. Hungary (2006), Berschader v. Russia (2006), Quasar (formerly Renta 4) v. Russia (2009), Tza Yap Shum v. Peru (2009), Austrian Airlines v. The Slovak Republic (2009), Servier v. Poland (2010), EURAM v. Slovak Republic (2012), Accession Mezzanine v. Hungary (2013), Sanum v. Laos (2013) and ST-AD GmbH v. Bulgaria (2013).

[190] A11Y v. Czech Republic (2017), Busta v. Czech Republic (2017), Anglia v. Czech Republic (2017) and BUCG v. Yemen (2017).

[191] The table indicates the cases in which an arbitrator has sat, whether they issued a dissent, and which side appointed them. For completeness, for each arbitrator, the table also includes other cases in which he or she was a tribunal member and a unanimous decision was reached as regards the application of the MFN clause to procedural rights.

[192] While Mr Böckstiegel was also part of the majority in Ambiente, that case is not listed as the majority did not analyse the MFN clause.

[193] The award notes that an unidentified minority disagrees with the majority ruling on the MFN clause on the basis that the dispute resolution clause does not provide express consent to arbitration generally but only to UNCITRAL, and the MFN clause cannot be used as a basis of abrogating those limits: Krederi, Paragraph 343. The tribunal comprised August Reinisch (president), Markus Wirth (investor) and Gavan Griffith (state).

[194] ‘One swallow does not make a summer, neither does one fine day; similarly, one day or brief time of happiness does not make a person entirely happy’: Aristotle, The Nicomachean Ethics.

[195] Daimler, Opinion of Professor Domingo Bello Janeiro dated 16 August 2012, Paragraph 34.

[196] See Daimler, Opinion of Professor Domingo Bello Janeiro dated 16 August 2012, Paragraph 5 (where Professor Janeiro specifically noted Professor Kauffman-Kohler’s change in position).

[197] Daimler, Opinion of Professor Domingo Bello Janeiro dated 16 August 2012, Paragraph 2 (emphasis added).

[198] Impregilo, Concurring and Dissenting Opinion of Professor Brigitte Stern dated 21 June 2011, Paragraph 99.

[199] Douglas (2011), p 113. See also footnote 36. Additionally, the Kilic tribunal relied on Professor Douglas’ book, The International Law of Investment Claims (Cambridge University Press, 2009), where he notes that an MFN clause ‘does not incorporate by reference provisions relating to the jurisdiction of the arbitral tribunal, in whole or in part, set forth in a third investment treaty, unless there is an unequivocal provision to that effect in the basic investment treaty’: Kilic, Paragraph 7.8.10.

[200] ILC MFN Report (2015), Paragraph 169; see also Paragraphs 170–172.

[201] Ambiente, Dissenting Opinion of Santiago Torres Bernárdez dated 2 May 2013, Paragraph 337.

[202] Daimler, Dissenting Opinion of Charles N Brower dated 15 August 2012, Paragraph 2.

[203] id., Paragraph 20.

[204] Berschader, Separate Opinion of Todd Weiler dated 7 April 2016, Paragraph 20.

[205] Argentina was a respondent in Siemens, Daimler, Wintershall, Hochtief, Impregilo, Gas Natural, Telefónica, Suez (twice) and AWG.

[206] See, for example, Argentina–Japan BIT (2018), Article 3(3): ‘For greater certainty, the treatment referred to in this Article [Most-Favoured-Nation Treatment] does not encompass international dispute settlement procedures or mechanisms under any international agreement.’ (According to the UNCTAD database, this BIT is yet to come into force.)

[207] See, for example, Canada–China BIT (2012), Article 5(3): ‘For greater certainty, the [most-favoured nation] “treatment” referred to in paragraphs 1 and 2 of this Article does not encompass the dispute resolution mechanisms, such as those in Part C [mechanism for the settlement of investment disputes], in other international investment treaties and other trade agreements.’

[208] See, for example, Australia–Hong Kong Free Trade Agreement (2019), Article 5.

[209] National Grid, Paragraph 85: ‘[A]fter the decision on jurisdiction in Siemens, the Argentine Republic and Panama exchanged diplomatic notes with an “interpretative declaration” of the MFN clause in their 1996 investment treaty to the effect that, the MFN clause does not extend to dispute resolution clauses, and that this has always been their intention.’

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