Clearing a Path Through a Tangled Jurisprudence: Most-Favored-Nation Clauses and Dispute Settlement Provisions in Bilateral Investment Treaties

Abstract

Under a most-favored-nation (MFN) clause, the signatories of a treaty agree to accord each other the same treatment they grant to any other nation. The MFN principle of non-discrimination is ubiquitous in contemporary international economic relations. It has long been considered "the corner-stone of all modem commercial treaties," and it remains at the heart of the contemporary international trade system as Article 1 of the General Agreement on Tariffs and Trade (GATT). The MFN principle has also been used in other fields of international relations, such as consular relations. In the second half of the twentieth century, it was incorporated into the emerging field of international investment law, where it is has become a "core element of international investment agreements" and is included in most of the more than two thousand bilateral investment treaties (BITs) that comprise the field.