An Inquiry into the Scope of MFN Provisions in Bilateral Investment Treaties

Authors

Amit Kumar Sinha

First Page

679

Abstract

This article inquires into the scope of MFN treatment in Bilateral Investment Treaties. The article primarily analyzes the ways in which MFN treatment may be extended to foreign investors; this includes extending favorable treatment to a foreign investor in cases of internal/domestic measures and borrowing more favorable provisions from third-party BITs. This article attempts to shed light on the interpretation and dynamics of the use of MFN provisions for internal measures. It also delves into the rationale for borrowing provisions from third-party BITs. It further presents a critique of various tribunals’ decisions and scholarly discussions and writings that deal with the use of MFN clauses to borrow provisions from third-party BITs. Ultimately, the article suggests suitable approaches to interpret MFN provisions in BITs as per the interpretative methodologies provided under the VCLT. It argues that allowing MFN clauses to borrow provisions from third-party BITs may lead to treaty shopping, create jurisdictional problems, and promote free-ridership, which goes against the objective of any multilateral or bilateral system.

Recommended Citation

Amit K. Sinha, An Inquiry into the Scope of MFN Provisions in Bilateral Investment Treaties, 45 Brook. J. Int'l L. 679 (2020).
Available at: https://brooklynworks.brooklaw.edu/bjil/vol45/iss2/3