Notes on the Meaning of 'Treatment' Under a Most-Favoured Nation Clause, and What Makes Substantive Treatment 'More Favourable'

Abstract

Ever since the decision on jurisdiction in Maffezini v. Spain, in which the tribunal held that a most-favoured nation (“MFN”) clause can provide the foundation for a tribunal’s jurisdiction, commentary regarding MFN clauses has overwhelmingly focused on their impact on dispute resolution procedures, rather than on their impact on more clearly substantive treatment given to investors. However, while the impact of MFN clauses on dispute resolution procedures has certainly been far more controversial than their impact on non-procedural clauses, their operation in this latter field can ultimately be just as important.

The focus of this piece is the foundational question of what precisely constitutes “treatment” in so far as an MFN clause is concerned, and how it is to be determined when treatment provided to a third State is more beneficial than that provided to the State beneficiary of the MFN clause.

Keywords: Maffezini v. Spain MFN Clauses