MFN-based jurisdiction in investor-state arbitration: Is there any hope for a consistent approach?

Abstract

Most-favored nation (MFN) clauses are a hotly contested basis for jurisdiction in investment arbitration. This article categorizes the divergent approaches taken by 17 arbitral tribunals to date, revealing the major types of MFN clauses interpreted, the key types of MFN questions confronted and the primary reasons cited for either upholding or denying MFN-based jurisdiction. It analyzes trends emerging from the awards and attempts to explain the inconsistent outcomes in terms of the different burdens of persuasion applied by tribunals. The article concludes by exploring the feasibility of finding a more consistent approach, one which respects both the dictates of the Vienna Convention on the Law of Treaties and the pragmatic concerns of investors and host states. © 2011 Oxford University Press all rights reserved.