Applying the MFN clause for higher substantive treatment

ENThis chapter examines the most- favored- nation (mfn) clause as a treaty provision against the backdrop of the history of the clause as well as the methods used to interpret it as discussed in the previous two chapters. The first part focuses on the scope of mfn clauses. Its structure follows the structure of Article 5 of International Law Commission’s (ilc) Draft Articles on mostfavoured- nation clause (Draft Articles), which provides that “mfn treatment is the treatment accorded by the granting State to the beneficiary State or to persons or things having a particular relationship with that State, which is no less favorable than the treatment accorded by the granting State to a third State or to persons or things having the same relationship with that third State.”1 Accordingly, this part examines various elements of mfn clause, including: (i) its beneficiaries (ratione personae); (ii) its temporal element (ratione temporis); (iii) its subject matter (ratione materiae). It also examines various exceptions to mfn clauses in a separate forth section. The second part analyzes the application of the mfn clause as a treaty provision. It does from two perspectives: (i) claims of a de facto violation of an mfn clause; and (ii) invocation of an mfn clause in pursuit of obtaining more favorable treatment via an instrument external to the basic international investment agreement (iia) at issue in a given case. The chapter ultimately argues that interpretation of mfn clauses should not be based on presumptions, but rather on the specific text of the basic iia at issue and a proper application of the ejusdem generis principle.