scholarly journals Putting the MFN Genie Back in the Bottle

AJIL Unbound ◽  
2018 ◽  
Vol 112 ◽  
pp. 60-63
Author(s):  
Michael Waibel
Keyword(s):  
International Law ◽  
International Investment ◽  
Third Party ◽  
Most Favored Nation ◽  
Trade Regime ◽  
Investment Treaty ◽  
Limited Role ◽  
Investment Treaties ◽  
Text Context

This essay underscores the importance of background understandings in general international law for interpreting brief, open-ended clauses such as most favored nation (MFN) clauses. Contrary to Simon Batifort and J. Benton Heath's claim, I suggest that often interpreters of MFN clauses cannot limit themselves to the text, context, and preparatory materials of a specific MFN clause. A common international negotiating technique, including for investment treaties, is to rely on the general background understanding of what a clause typically means in international law—its default meaning. I also argue that MFN clauses have played a surprisingly limited role in the international investment regime to date. In the main, they have functioned as a stepping stone for procedural and substantive guarantees found in third-party investment treaties. This use, and the limited role of MFN clauses in investment treaty awards, stands in sharp contrast to MFN clauses in the trade regime.

Chinese Investment Treaties

2009 ◽  
Author(s):  
Gallagher Norah ◽  
Shan Wenhua
Keyword(s):  
Local Governments ◽  
International Investment ◽  
Foreign Economic Policy ◽  
Continuous Growth ◽  
Chinese Investment ◽  
Investment Treaty ◽  
Dramatic Rise ◽  
Investment Treaties

China's success in attracting foreign direct investment (FDI) in the last decade is undisputed and unprecedented. It is currently the second largest FDI recipient in the world, a success partially due to China's efforts to enter into bilateral investment treaties (BITs) and other international investment instruments. This book is a comprehensive commentary on Chinese BITs. Chinese investment treaties have typically provided international forums for settling investment disputes such as the International Centre for the Settlement of Investment Disputes (ICSID). Given the continuous growth of FDI in China, the emergence of state-investor disagreements in China, and the dramatic rise of investment treaty based arbitrations world wide in recent years, it is anticipated that there will be an increasing number of investment arbitrations involving the central and local governments of China. This book reviews and analyzes China's approach to foreign investment. It considers the current role of investment treaties in China's foreign economic policy, analyzes and interprets the key provisions of the BITs, and discusses the future agenda of China's investment program. It looks at how this investment regime interconnects with the domestic system and considers the implications for a foreign investor in China.

The Life and Death of BITs: Legal Issues Concerning Survival Clauses and the Termination of Investment Treaties

2012 ◽  
pp. 928-950 ◽  
Author(s):  
James Harrison
Keyword(s):  
International Law ◽  
Legal Issues ◽  
Third Party ◽  
Legal Certainty ◽  
Foreign Investors ◽  
Life And Death ◽  
Investment Treaty ◽  
Unilateral Termination ◽  
State Practice ◽  
Investment Treaties

This article considers a number of legal issues that arise when states decide to terminate treaties providing protection to foreign investors. This is an area that is governed both by specific provisions in investment treaties, as well as by principles of general international law. The article considers two particular mechanisms that seek to promote legal certainty for investors by limiting the ability of states to peremptorily revoke the protection offered by investment treaties. Firstly, it considers minimum periods of application. Secondly, it analyzes so-called survival clauses, which serve to extend the application of a treaty to established investors for a particular period of time after its unilateral termination. The article compares the scope of these provisions under a variety of investment treaties in order to identify differences in state practice. It also discusses the limits of these mechanisms against the backdrop of general international law. Finally, the article considers whether protection is also available for established investors when both parties to an investment treaty mutually agree to terminate the treaty. In this context, the article looks at the theory of third party rights and its application in the context of investment treaties.

MFN Standard as Substantive Treatment

2019 ◽  
Author(s):  
Mira Suleimenova
Keyword(s):  
International Law ◽  
International Investment ◽  
Third Party ◽  
International Investment Law ◽  
International Investment Agreements ◽  
History Of ◽  
Investment Law ◽  
Investment Treaties ◽  
Investment Agreements ◽  
Comprehensive Study

‘Most favoured nation’ (MFN) treatment is an integral part of virtually all modern investment regimes. MFN clauses in international investment agreements signal to investors that a given state protects them from discrimination; however, in practice, enforcing such guarantees may be challenging. This book represents a comprehensive study on how ‘most favoured nation’ treatment operates as a substantive standard of international investment law. Starting with a history of the development of the concept in international law, the author provides an overview of existing state practices in negotiating MFN clauses in bilateral and international investment treaties. Finally, the work analyses the ability of MFN treatment clauses to prevent de facto discrimination and allow for the ‘import’ of third-party substantive protections in international investor state arbitration. Dr Mira Suleimenova, LL.M. is an international investment lawyer based in Vienna, Austria.

scholarly journals The Role of Democratic Governance and Indirect Expropriation in International Investment Treaty Violations

2020 ◽  
Author(s):  
Jeffrey Ziegler ◽  
David Carlson
Keyword(s):  
Public Support ◽  
International Investment ◽  
Democratic Governance ◽  
Data Set ◽  
Business Interests ◽  
Investment Treaty ◽  
International Obligations ◽  
Investment Treaties ◽  
Investment Agreements

Democracies are thought to violate treaties less frequently than non-democracies, yet democracies violate bilateral investment treaties (BITs) just as often as non-democracies. Though democratic governments may intend to meet their international obligations, and though democratic institutions provide greater political constraints to encourage compliance, investment agreements may conflict with the goal of maintaining domestic public support. Specifically, we argue that credible elections create strong incentives for governments to side with domestic voters over foreign business interests, and to pass legislation that violates investment agreements. We use a data set of BIT violation complaints that better captures potential indirect expropriation to confirm prior findings that show a difference in violations by regime type. Since policies are not passed immediately and companies do not file arbitration complaints instantly when a potential violation occurs, democratic governments are only more likely to be sued as their time in office increases. The results suggest that the ability of voters to sanction leaders is an important mechanism that incentivizes governments to pass legislation that potentially violates investment treaties through indirect expropriation.

scholarly journals The Enduring but Unwelcome Role of Party Intent in Treaty Interpretation

AJIL Unbound ◽  
2018 ◽  
Vol 112 ◽  
pp. 44-48
Author(s):  
Andrea K. Bjorklund
Keyword(s):  
International Law ◽  
Decision Makers ◽  
Vienna Convention ◽  
Most Favored Nation ◽  
Treaty Interpretation ◽  
The Law ◽  
Investment Treaties

Party “intent” is not one of the tools that the Vienna Convention on the Law of Treaties (VCLT) gives to treaty interpreters. To be sure, party intent is presumably reflected in the “object and purpose” of the treaty, but it is not a separate criterion; in fact, the VCLT implicitly excludes party intent from playing an interpretive role. Yet many decision-makers, counsel, and academics persistently look to party intent for guidance when interpreting treaties. The most favored nation (MFN) debate illustrates why party intent endures as an interpretive touchstone: treaty language, even when analyzed in context and in light of the convention's object and purpose, does not always lead to clear answers. Both Simon Batifort and J. Benton Heath and Stephan Schill, in their different ways, depart from traditional VCLT analysis and hark to party intent as a reason to endorse a modified approach to treaty interpretation. Yet they also illustrate why party intent is an imperfect tool: party intent is too malleable to be a conclusive guide to treaty meaning.

1 The Investment Treaty Regime in Context

2017 ◽  
Author(s):  
Bonnitcha Jonathan ◽  
Skovgaard Poulsen Lauge N ◽  
Waibel Michael
Keyword(s):  
Developing Countries ◽  
International Law ◽  
Global Network ◽  
Investment Treaty ◽  
Regime Complex ◽  
Wide Range ◽  
Investment Treaties ◽  
Main Components ◽  
Investment Treaty Arbitration

This chapter charts the rise of the global network of more than 3000 investment treaties and of investment treaty arbitration. Investors have used investment treaties to ask for compensation for a very wide range of government conduct. The chapter surveys the investment treaty regime and the investment regime complex. The regime consists of three main components: (i) investment treaties; (ii) the set of treaties, rules, and institutions governing investment treaty arbitration; and (iii) the decisions of arbitral tribunals applying and interpreting investment treaties. The growing role of investment treaty arbitration has made it highly controversial in both developed and developing countries, and has transformed the investment treaty regime from an obscure field of international law to a central part of the investment regime complex.

What states want: Estimating ideal points from international investment treaty content

2020 ◽  
Vol 57 (6) ◽  
pp. 679-691 ◽  
Author(s):  
Florencia Montal ◽  
Carly Potz-Nielsen ◽  
Jane Lawrence Sumner
Keyword(s):  
Foreign Direct Investment ◽  
International Law ◽  
Item Response ◽  
Direct Investment ◽  
Investor Protection ◽  
International Investment ◽  
Irt Model ◽  
Investment Treaty ◽  
Ideal Points ◽  
Investment Treaties

When negotiating investment treaties, states balance two goals: providing strong protections for investors (investor protection), which is thought to attract foreign direct investment, and maintaining the ability to regulate their economies (regulatory autonomy). In this article we argue that treaty content can tell us about the latent preferences that states have over the level of investor protection enshrined in BITs. We use an item response theory (IRT) model and a dataset of 1,144 treaties to estimate latent preferences on this scale for signatory countries. Our measure is of use to scholars interested in studying bilateral investment treaties, international law, and foreign direct investment, and our model is of use to anyone aiming to estimate latent preferences from jointly produced manifestations.

The Political Economy of a Bilateral Investment Treaty

1998 ◽  
Vol 92 (4) ◽  
pp. 621-641 ◽  
Author(s):  
Kenneth J. Vandevelde
Keyword(s):  
Political Economy ◽  
International Law ◽  
International Investment ◽  
The Political ◽  
Bilateral Investment Treaties ◽  
Bilateral Investment Treaty ◽  
Investment Treaty ◽  
Investment Treaties

One of the more remarkable developments in international law in the mid-1990s is not what it appears to be. The massive and sudden proliferation of bilateral investment treaties (BITs), now constituting a network of more than thirteen hundred agreements involving some 160 states, appears to reflect die triumph of liberal economics in the sphere of international investment. In fact, however, it constitutes only a momentary convergence of nationalist interests. If the BITs are to construct the liberal international investment regime they seem to promise, then they must be modified in important and substantial ways.

Non-economic disciplines still take the back seat: The tale of conflict clauses in investment treaties

2020 ◽  
pp. 1-26
Author(s):  
Dafina Atanasova
Keyword(s):  
International Economic ◽  
International Law ◽  
International Investment ◽  
Limited Attention ◽  
Priority Rules ◽  
Systematic Account ◽  
International Investment Law ◽  
Investment Treaty ◽  
Investment Treaties ◽  
New Perspective

Abstract The article offers a new perspective on the interaction of international investment law with other fields of international law based on an empirical study of the use of conflict clauses in over 1,000 investment treaties, providing a first systematic account of this type of provision. The use and content of conflict clauses serve as an indicator of state priorities regarding the coordination of investment standards of protection with other disciplines in the international law matrix. Both numerically and from qualitative perspectives, the clauses’ survey reveals important asymmetries in the engagement on the part of investment treaty makers with international economic disciplines, as compared to non-economic disciplines and human rights more specifically. Indeed, conflict clauses on international economic law are much more common, more detailed and establish clearer priority rules than similar provisions on any other field of international law; and the disparity is only likely to deepen over time. This analysis suggests that negotiators already have the toolkit to create effective links between international norms and institutions, and it is only its use that is uneven. As a result, the article suggests a shift in policy perspective to reflect that reality. Such a shift seems all the more relevant considering the growing body of literature showing that investment arbitrators (and international adjudicators more generally) pay only limited attention to norms from fields beyond their own, thus casting doubt on their capacity to develop a principled approach on the issue without treaty guidance.

Mitigating the Risks Entailed in Shareholders’ Claims for Reflective Loss: Suggestions for Investment Treaty Reform

2018 ◽  
pp. 693-721
Author(s):  
Panagiotis A. Kyriakou
Keyword(s):  
International Law ◽  
International Investment ◽  
International Investment Law ◽  
Investment Treaty ◽  
Systemic Risks ◽  
Investment Law ◽  
Investment Treaties ◽  
Treaty Reform ◽  
New Generation

Abstract This contribution identifies the systemic risks posed by the permissibility of shareholders’ claims for reflective loss in international investment law. It revisits existing investment treaty mechanisms under which shareholder recourse can be limited, and evaluates their effectiveness in the particular context of reflective loss. Drawing on ‘traditional’ and ‘new generation’ treaty language, as well as on domestic and general international law, the article then proposes new treaty language with the aim of eliminating the risks of reflective loss claims from investment treaties.

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