Abhisar Vidyarthi
Advocate | Bachelor of Civil Law, University of Oxford
This paper revisits the debated issue of the applicability of Most Favoured Nation (MFN) clauses to dispute settlement treaty provisions under the ICSID Convention. The paper firstly introduces the debate, and discusses the contrasting views taken by tribunals, with particular emphasis on Maffezini and Plama. Secondly, the paper argues that creation of an artificial distinction between jurisdiction and admissibility in treaty arbitrations is a non-starter and cannot be supported. Thirdly, the paper criticizes the view taken in Maffezini and other like cases as (a) it creates an unfounded assumption that MFN clauses, shorn of its traditional usage, ought to apply to jurisdictional clauses unless expressly excluded by parties, (b) is based on an incorrect construction of the ICJ jurisprudence on MFN clauses, and (c) contradicts the position that substantive rights need not be accompanied by enforcement rights under international law. The paper argues that MFN clauses cannot be used by investors to bestow jurisdiction in cases where none exists under the basic treaty (i.e. the treaty that contains the MFN clause being relied upon). In fact, satisfaction of conditions stipulated in the basic treaty to establish jurisdiction of the tribunal is a prerequisite to invoke the MFN clause itself.
