The Investment Treaty Arbitration Review: Most-Favoured Nation Treatment

I Introduction

This chapter reviews the 2021 jurisprudence and treaty practice on most-favoured nation (MFN) clauses and offers some thoughts about the evolution of their role in the investment treaty context. The 2021 jurisprudence on MFN clauses showed that claimants continued to invoke MFN clauses both to try to import more favourable standards of treatment from third state treaties but also, though this use has been less frequent, to allege that they have been subjected to de facto less favourable treatment than a domestic or third state investor. The piecemeal reform of investment treaties has also continued, with several treaties that were signed or that entered into force in 2021 containing updated MFN clauses that are more detailed than those typically found in prior generations of investment treaties.

II Issues in MFN clause jurisprudence

Article 5 of the International Law Commission's 'Draft Articles on most-favoured-nation clauses, with commentaries', 1978 (the ILC Draft Articles) defines MFN treatment as:

treatment accorded by the granting State to the beneficiary State, or to persons or things in a determined relationship with that State, not less favourable than treatment extended by the granting State to a third State or to persons or things in the same relationship with that third State.

To date, in international investment law, no investment tribunal in a publicly available award has found that a host state breached an MFN clause because it failed to accord 'no less favourable treatment' to the claimant investor than the treatment it accorded to a foreign investor from a third state. Rather, the predominant use so far made of MFN clauses is that they have allowed investors to invoke the benefits granted to third-party nationals by another investment agreement of the host state, and have those benefits applied (or, as more commonly referred to, 'imported') to its relationship with the host state. The effect has been described as 'harmonising upwards' a host state's obligations to foreign investors to the highest level of protection provided in any investment treaty of the host state.2

Although this use of MFN clauses is generally accepted at international law,3 one of the great controversies in the field of international investment law has been about whether and in what circumstances the use of MFN clauses can modify the terms of a dispute settlement clause and affect the jurisdictional mandate of a tribunal4 – so much so that the final report of the International Law Commission Study Group on the MFN clause in 2015 (the ILC MFN Final Report)5 was in large part devoted to the jurisprudential developments in relation to MFN clauses in international investment agreements and the new issues that had arisen in this context that the ILC Draft Articles do not address. Although tribunals have grappled, and will continue to grapple, with such issues, as discussed below, the emerging trend since 2015 has been one of states drafting MFN clauses more precisely in new investment agreements.

III MFN jurisprudence in 2021

Since a full examination of the jurisprudential issues concerning MFN clauses is beyond the scope of this chapter, we review and comment on some of the features of the 2021 case law. Although some tribunals considering MFN clauses were able to sidestep doctrinal debates in coming to their decisions, others took positions on divisive doctrinal issues and on the interpretation of commonly used phrases in MFN clauses, such as 'in the territory' and in 'a similar situation'. There was also discussion on key interpretative rules under the Vienna Convention on the Law of Treaties (VCLT) in the context of non-party submissions, and of the principle of ejusdem generis, arguably the key principle in applying an MFN clause.

In Astrida Benita Carrizosa v. Colombia, the investor attempted to circumvent a limitation period for bringing claims in the Colombia–USA Trade Promotion Agreement (TPA) by importing a more favourable limitation period from the Colombia–Switzerland bilateral investment treaty (BIT) using the MFN clause in the TPA's financial services chapter.

The tribunal declined jurisdiction over the matter, for reasons including its rejection of the claimant's MFN arguments. It did so on two bases. First, in interpreting the TPA, the tribunal held that it had no jurisdiction to apply the MFN clause in the TPA's financial services chapter because the consent to arbitration was 'solely for claims that a Party has breached' four specific provisions of the chapter, of which the MFN clause was not one.6 Second, it held that, even if the investor was successful in her MFN claim, the more favourable limitation period from the Colombia–Switzerland BIT would in any event not assist her claim, because the events giving rise to the claim would still be outside even the more favourable limitation period.7

The tribunal's reasoning allowed it to sidestep entirely any pronouncement on the doctrinal debate on whether an MFN clause can apply to change the conditions of consent to arbitration.8

Also notable was that the United States had made non-disputing party submissions on the MFN clause issue. It took the position that the TPA drafting did not permit a claim pursuant to the MFN clause in the financial services chapter to be the subject of investor-state arbitration,9 effectively agreeing with Colombia's interpretation of the TPA. This gave rise to the question of whether the concordance of views between the treaty parties amounted to a subsequent agreement on interpretation of the treaty or subsequent practice in applying the treaty, within the meaning of Article 31.3, Paragraphs (a) and (b) of the VCLT.10 On this point, the tribunal made a remark of caution that subsequent agreements and practice 'cannot be used as a means for modifying or escaping the Treaty's terms' but ultimately held that 'the common position of the TPA Contracting States merely confirms the clear language'11 of the provision.

In Kimberly-Clark Dutch Holdings et al. v. Venezuela,12 three Kimberly-Clark entities, respectively constituted under the laws of the Netherlands, Spain and Belgium, brought arbitration proceedings under the ICSID Additional Facility Rules (the AF Rules) against Venezuela pursuant to three investment treaties between Venezuela and the respective states. Each claimant sought to ground jurisdiction in an MFN clause in the relevant treaty so as to be able to bring the arbitration pursuant to the AF Rules. The arguments to ground jurisdiction in the MFN clauses of the treaties were secondary arguments, in case the claimants' primary arguments about the interpretation of temporal aspects of the arbitration clauses were not accepted.13

In its decision, the tribunal weighed in on doctrinal issues regarding MFN clauses. It endorsed the view of a previous tribunal that an 'MFN clause cannot serve the purpose of importing consent to arbitration when none exists' under the basic treaty.14

In respect of the Netherlands treaty, it agreed with Venezuela's submissions and stated that, as a matter of principle, a tribunal cannot enforce the MFN clause, or any substantive guarantees under a treaty, in circumstances where it lacks jurisdiction because of a lack of consent to arbitration.15 It applied the same reasoning to the Spain treaty16 and the Belgium treaty.17 The tribunal acknowledged the doctrinal debate and noted that its conclusion found support in both contemporaneous doctrine and more recent awards.18

The tribunal further found that, in any event, the terms of the MFN clause relied on in the Netherlands treaty were limited to the breach of the physical security and protection standard,19 with the consequence that there was no room to include procedural protection.20 Likewise, the terms of the MFN clause in the Spain treaty were limited to fair and equitable treatment.21 The terms of the MFN clause in the Belgium treaty referred to treatment 'in the territory of the other Contracting Party', which the tribunal interpreted as an indication that the MFN clause applied to substantive treatment, as opposed to procedural matters.22

In Muhammet Cap & Sehil v. Turkmenistan,23 the tribunal interpreted the MFN clause, which referred to treatment accorded 'in similar situations', as requiring a comparison of actual investments in a similar situation.24 It reasoned that the legal effect of the provision was to prohibit the discriminatory treatment of investments when compared to other investments made by third state investors in similar situations.25 Accordingly, the MFN clause applied only in situations of de facto discrimination and did not operate to allow the importation of substantive protections from other treaties.26 The tribunal further noted that the words 'similar situations' indicated the state parties' intention to restrict the scope of the MFN clause to apply only to discriminatory treatment.27 It also made a curious comment that the ejusdem generis rule 'is necessary and useful only when those seeking to rely on it are dealing with a broadly worded MFN provision, which does not define the scope of its subject matter'.28

In Vnesheconombank (VEB) v. Ukraine,29 the tribunal also rejected the claimant's attempt to import three substantive standards of protection via the MFN clause. In interpreting the treaty language and the structure of the MFN clause, the tribunal found that the clause did not import standards of protection from other treaties but rather amounted to a non-discrimination standard.30

In Pawlowski and Projekt Sever v. Czech Republic,31 the tribunal held that discrimination was a relative standard,32 so to establish that the treatment effectively is 'less favourable', 'a comparator in like circumstances must be defined'.33 It set out a three-pronged test for a successful breach of the MFN standard to be made out, namely: (1) identification of an appropriate comparator; (2) establishing that the comparator was granted more favourable treatment; and (3) establishing that there was a lack of reasonable or objective justification for the difference in treatment.34

The investor identified several local and third country comparators, all being residential housing developments. The tribunal examined the circumstances of the identified comparators at a granular level. It found that three identified comparators were either not comparable in size or location to the residential development; there was not enough information on a fourth comparator; and analysed a fifth comparator in great detail, including the progress of its zoning-related applications and litigation, so as to make a comparison with the claimant's situation.35 Ultimately, the tribunal found the fifth comparator unsuitable, and commented that states have a certain margin of discretion about zoning decisions, noting each project has its own characteristics.36 The MFN claim failed because the claimant had not identified a suitable comparator and, even assuming the fifth comparator was suitable, the claimant had failed to prove that the differential treatment was not based on the existence of disparities between the two projects.37

In its decision in D.S. Construction FZCO v. Libya,38 the Paris Court of Appeal annulled the award, holding that the arbitral tribunal had been improperly constituted.

In the underlying dispute, Libya took the position that the Investment Agreement of the Organisation for Islamic Cooperation (OIC Agreement) did not contain its consent to arbitrate and refused to appoint an arbitrator. The appointing authority under the OIC Agreement, the Secretary General of the OIC, did not make a default appointment.

The claimant relied on Article 8, an MFN clause, to import Libya's consent to UNCITRAL arbitration from the Austria–Libya BIT and, thereafter, under the UNCITRAL Rules, requested the Secretary General of the Permanent Court of Arbitration to identify an appointing authority, who later appointed an arbitrator.

The Court decided that consent to arbitrate could not be imported in the manner upheld by the tribunal. In the Court's analysis, the intent of the OIC Agreement was to provide for ad hoc arbitration39 and the MFN clause did not cover procedural treatment of investors.40

As noted by other commentators, the effect of this decision is to cast uncertainty on ongoing and potential future claims invoking the OIC in circumstances where the Secretary General of the OIC does not make an arbitrator appointment.41

In Agility Public Warehousing Company KSC v. Iraq,42 the tribunal rejected the claimant's use of an imported umbrella clause through the BIT's MFN clause. However, sidestepping doctrinal discussion, the tribunal decided the issue on the basis that the claimant could not in any event make out its claimed breach of any imported umbrella clause on the facts.43 The tribunal also rejected, on the basis of the facts, an alleged breach of the BIT's MFN standard, in which the claimant argued that a similarly situated investor's investment was given preferential treatment.44

Similarly, the tribunal in Infinito Gold Ltd v. Republic of Costa Rica45 sidestepped any engagement with doctrinal controversies about whether an MFN clause entitles an investor to import into the basic treaty a more favourable protection found in a third-party treaty, or whether it must show an actual difference in treatment. The tribunal found that, in any event, the claim would fail on the facts.46

In an as yet unpublished procedural order in the matter of 47 the tribunal reportedly rejected a claim, based on an MFN clause, to bypass the Financial Services Committee procedure set out in Article 12.19 of the underlying treaty.48

IV Comment on 2021 case law

i Cases involving claims for substantive breach of MFN provisions

Of the 2021 cases dealing with MFN clauses, Pawlowski and Projekt Sever v. Czech Republic and Agility Public Warehousing Company K.S.C. v. Iraq continue to demonstrate, along with prior cases,49 the difficulty of bringing claims requiring evidence of de facto discriminatory treatment to make out a claim of less favourable treatment in breach of an MFN clause. With new treaty drafting exhibiting a trend towards narrowing the scope of MFN clauses towards de facto discrimination, the difficulty of establishing such claims is likely to continue. As the Bayindir v. Pakistan tribunal noted, 'irrespective of the circumstances of the case . . . it is generally difficult to prove that an objectively different situation is the result of unequal treatment rather than of the existence of reasons to treat the two situations differently'.50

As the ILC Final Report identified, there is an 'ejusdem generis problem of determining sufficient similarity'.51 The inquiry has been described as fact-specific.52 The characteristics that tribunals have used to determine the threshold issue of a domestic or foreign investor's similarity of circumstances include, among other things, the location of a project, the size of a project and contractual arrangements. The jurisprudence shows that claimants bear a high burden of proof on this initial aspect and this has so far been an insurmountable hurdle to bringing a successful claim for breach of MFN provisions. Of the 2021 cases, Pawlowski and Projekt Sever v. Czech Republic appears to have adopted an 'objective reason' standard of review in its test for determining a breach of an MFN clause.53

There appears to be a level of agreement that, in principle, any alleged discrimination by reason of an investor's nationality should be assessed under an objective, rather than a subjective, test as the burden of proving subjective intent to discriminate on the basis of nationality would be insurmountable.54 However, this does not necessarily make it easier for claimants to establish that there were no differences in circumstances objectively justifying different treatment.

ii Cases arguing unsuccessfully that a given MFN clause operates to import substantive protections

The decisions in Vnesheconombank (VEB) v. Ukraine and Muhammet Cap & Sehil v. Turkmenistan, and the Muhammet Cap & Sehil tribunal's comment about use of the ejusdem generis rule, suggest that the less broad or more prescriptive as to the scope of an MFN clause, the less room there is to argue for its expansive application, particularly that it operates to import standards from third treaties. This observation may increase in relevance in future when the wording of newly formulated MFN clauses (discussed below) are tested.

iii Non-party submissions

The decision in Astrida Benita Carrizosa v. Colombia highlights the risk for claimants that non-party submissions adverse to a claimant's interpretation may influence a tribunal's interpretation, even though tribunals have been known to take a judicious and cautious approach to this issue.55

iv Cases concerning attempts to import different arbitral rules

The award in Kimberly-Clark Dutch Holdings et al. v. Venezuela and the Paris Court of Appeal's decision in D.S. Construction FZCO v. Libya have added to the growing body of jurisprudence that indicates a tribunal must first have jurisdiction under the basic treaty relied on in order to decide disputes invoking its MFN clause. These decisions show why attempting to import consent to different arbitral rules via an MFN clause, while in principle a permissible use of an MFN clause, is still often a fraught exercise in practice because it is highly dependent on a treaty's drafting, to be interpreted in accordance with the VCLT.

V MFN clauses in new treaties

Since at least 2015, states have been updating the drafting of their MFN clauses in newly concluded treaties. Typically, newer drafting (1) is more specific about the scope of the MFN clause, (2) is prescriptive as to what matters should be taken into account by tribunals in determining whether a comparator is 'in like circumstances', (3) contains express carve-outs and (4) has departed from the notion that substantive obligations in a third treaty in themselves constitute 'treatment'.56 In the years ahead, this new, more detailed language is likely to close the interpretative space for tribunals adjudicating on MFN claims. Below, we outline the MFN clauses in treaties signed or ratified in 2021, and those in multilateral agreements that are still being finalised.

i EU–China Comprehensive Agreement on Investment

The text of the EU–China Comprehensive Agreement on Investment was agreed in principle in December 2020, and the text was published in January 2021.57 It includes an MFN clause in Section II, Article 5, which requires parties to accord 'treatment no less favourable than the treatment it accords, in like situations'. It qualifies in Article 5(2) that '[s]ubstantive provisions in other international agreements concluded by a Party with a third country do not in themselves constitute treatment under this Article'.58 Article 5(3) carves out investor-state dispute settlement procedures from scope.

ii Japan–Georgia BIT

The Japan–Georgia BIT, signed on 21 January 2021,59 includes an MFN clause in Article 3, entitled Most-Favoured-Nation Treatment. Article 3(2) clarifies that it 'does not encompass international dispute settlement procedures or mechanisms'.

iii Indonesia–Singapore BIT

The Indonesia–Singapore BIT entered into force on 9 March 2021.60 It includes an MFN clause in Article 5, entitled Most-Favoured-Nation Treatment, which provides for 'treatment no less favourable . . . in like circumstances, to investments in its territory'. It contains a carve-out from scope in Article 5(2)(a) of investment agreements that have been initialled, signed or entered into force prior to the entry into force of the BIT. There is also a carve-out in Article 5(2)(b) of 'any arrangement with a non-Party or parties in the same geographical region designed to promote regional cooperation in the economic, social, labour, industrial or monetary fields within the framework of specific projects'. Article 5(3) carves out 'options or procedures for the settlement of disputes'. Article 5(4) provides that substantive obligations under other trade or investment agreements do not constitute 'treatment' absent measures adopted or maintained by a party.

iv Hong Kong–Mexico BIT

The Hong Kong–Mexico BIT entered into force on 16 June 2021.61 The MFN clause appears in Article 4 in Chapter II and is entitled 'Non-discriminatory Treatment'. It provides for treatment no less favourable than that the state accords in like circumstances to its own investors and investors of any non-contracting party. Article 4(3), however, places limits on the obligation to extend the treatment granted, including limiting the benefits of any treatment that may be granted by virtue of any bilateral or multilateral agreements on trade or investment. In effect, this appears to remove the ability to import standards of treatment from third treaties.

v Colombia–Spain BIT

A new Colombia–Spain BIT, which upon its entry into force is to replace the existing 2005 BIT, was signed on 16 September 2021.62 It includes an MFN clause in Article 5, entitled 'Most Favoured Nation'. Article 5(3) provides that substantive obligations under other trade or investment agreements do not constitute 'treatment' absent measures adopted or maintained by a party.63 Article 5(4) carves out the definitions, denial of benefits and dispute settlement clauses from the ambit of the MFN clause.

vi Canada Model Foreign Investment Promotion and Protection Agreement

Canada published its new Model Foreign Investment Promotion and Protection Agreement in 2021.64 The MFN clause provides for no less favourable treatment in like circumstances. The clause contains (1) a qualification that 'like circumstances depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives', (2) a clarification that the operative paragraphs 'prohibit discrimination based on nationality', (3) a carve-out from the scope of dispute resolution procedures, and (4) a qualification that '[s]ubstantive obligations in other international investment treaties and other trade agreements do not in themselves constitute “treatment” . . . absent measures adopted or maintained by a Party'.65 This model MFN clause represents a significant narrowing of legal effect of the broadly worded MFN clauses typically found in older treaties.

vii Energy Charter Treaty modernisation process

At the time of writing, the process of modernisation of the Energy Charter Treaty is ongoing. A November 2020 report of the Energy Charter Treaty Modernisation Group revealed that three proposals were made regarding the wording of the MFN clause. The European Union, Albania, Georgia and Turkey favour a proposal to exclude the application of the MFN clause to dispute settlement. The European Union proposed that substantive provisions of treaties alone do not constitute 'treatment' absent actual measures taken by a party.66

VI Conclusion

As the ILC MFN Final Report concluded, the different language used in treaties means that tribunals must interpret MFN clauses case by case, applying the rules in the VCLT.67 As the ILC MFN Final Report also noted: '[I]nvestment tribunals are ad hoc bodies and since the exact provisions and context of MFN clauses vary, it is impossible to tell in advance how the members of tribunals will decide.'68 However, there are observable trends in the jurisprudence, discussed above, that participants in investor-state arbitrations can take as useful guides about which arguments tribunals may find persuasive when analysing particular treaty language and on other aspects of MFN claims, such as identifying a suitable comparator 'in like circumstances' or 'in similar situations' to the claimant.

The authors expect that, despite the consolidation of some lines of jurisprudence in 2021, parties will continue to deploy creative arguments about the interpretation of MFN clauses, particularly those that are more broadly drafted. The move away, in some newer treaties, from drafting MFN clauses that strictly conform to the understanding of such clauses as articulated in the ILC Draft Articles represents a narrowing of MFN clauses in international investment treaties.


1 Mariel Dimsey is a partner and Marina Kofman is a senior associate at CMS Hasche Sigle, Hong Kong LLP.

2 Jonathan Bonnitcha, Lauge N Skovgaard Poulsen and Michael Waibel, 'Standards of Investment Protection' in The Political Economy of the Investment Treaty Regime (Oxford University Press, 2017, Chapter 4), 98.

3 See International Law Commission (ILC), 'Draft Articles on most-favoured-nation clauses with commentaries', 1978, 23.

4 This controversy had its genesis in the decision in Emilio Agustín Maffezini v. The Kingdom of Spain, ICSID Case No. ARB/97/7, Decision of the Tribunal on Objections to Jurisdiction (25 Jan. 2000) and the different approach to the issue taken in the subsequent case of Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction (8 Feb. 2005). Thereafter, several cases followed each approach. For a more detailed explanation of the controversy, see, for example, Zachary Douglas, 'The MFN Clause in Investment Arbitration: Treaty Interpretation Off the Rails', Journal of International Dispute Settlement, Vol. 2, No. 1 (2011), 97–113 and Stephan W Schill 'Maffezzini v. Plama: Reflections on the Jurisprudential Schism in the Application of Most-Favoured-Nation Clauses to Matters of Dispute Settlement' in Meg Kinnear, Geraldine R Fischer, et al. (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International, 2015, Chapter 18), 251–66.

5 United Nations General Assembly, ILC, Final Report of the Study Group on the Most-Favoured-Nation clause (29 May 2015), A/CN.4/L.852, available at (last accessed 22 Apr. 2022).

6 Astrida Benita Carrizosa v. Republic of Colombia, ICSID Case No. ARB/18/5, Award (19 Apr. 2021), para. 198.

7 ibid., para. 222.

8 ibid., para. 197.

9 ibid., para. 199.

10 ibid., paras. 199–203.

11 ibid., para. 203.

12 Kimberly-Clark Dutch Holdings, B.V., Kimberly-Clark S.L.U., and Kimberly-Clark BVBA. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)18/3 (Award, 5 Nov. 2021).

13 ibid., para. 162.

14 ibid., para. 167.

15 ibid., paras. 165, 167.

16 ibid., para. 206.

17 ibid., para. 233.

18 ibid., para. 168.

19 ibid., para. 169.

20 ibid., para. 170.

21 ibid., para. 206.

22 ibid., para. 235.

23 Muhammet Çap & Bankrupt Sehil Inşaat Endustri ve Ticaret Ltd. Sti. v. Turkmenistan, ICSID Case No. ARB/12/6, Award (4 May 2021).

24 ibid., para. 783.

25 ibid., para. 782.

26 ibid., para. 780.

27 ibid., para. 784.

28 ibid., para. 785. This statement can be contrasted, for example, with the description used by the tribunal in Professor Christian Doutremepuich, Antoine Doutremepuich v. The Republic of Mauritius, PCA Case No. 2018-37, Award on Jurisdiction (23 Aug. 2019) at para. 229: 'The ejusdem generis rule constitutes the outer limit of any, even ever so broad, MFN clause.'

29 State Development Corporation “VEB.RF” (Russian Federation) v. Ukraine, SCC Arbitration V2019/088, Partial Award on Preliminary Objections (31 Jan. 2021).

30 ibid., para. 269.

31 Pawlowski AG and Projekt Sever S.R.O. v. Czech Republic, ICSID Case No. ARB/17/11 (Pawlowski and Projekt Sever v. Czech Republic), Award (1 Nov. 2021).

32 ibid., para. 531.

33 ibid., para. 532.

34 ibid., paras. 533–34. This test is slightly different from that adopted by the tribunal in Bayindir Insaat Turizm Ticaret ve Sanayi A. Ş. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29 (Bayindir v. Pakistan), Award (14 Aug. 2009), para. 399 (in relation to national treatment), which did not set out the standard of review it considered appropriate; and that adopted by the tribunal in Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award (11 Sep. 2007), at para. 371(iii), where the standard of review was articulated as: 'No policy or purpose behind the said measure must apply to the investment that justifies the different treatments accorded. A contrario, a less favourable treatment is acceptable if a State's legitimate objective justifies such different treatment in relation to the specificity of the investment.'

35 Pawlowski and Projekt Sever v. Czech Republic, op. cit. note 31, above, paras. 541–45.

36 ibid., paras. 546–48.

37 ibid., para. 550.

38 D.S. Construction FZCO v. Libya, Paris Court of Appeal, Pôle 5 Chambre 16 (23 Mar. 2021), No. RG 18/05756.

39 ibid., para. 97.

40 ibid., para. 101.

42 Agility Public Warehousing Company K.S.C. v. Republic of Iraq, ICSID Case No. ARB/17/7, Award (22 Feb. 2021).

43 ibid., para. 184.

44 ibid., para. 252.

45 Infinito Gold Ltd v. Republic of Costa Rica, ICSID Case No. ARB/14/5, Award (3 Jun. 2021).

46 ibid., para. 747.

47 Inversiones Continental (Panamá), S.A. v. Republic of Honduras, ICSID Case No. ARB/18/40.

48 See (last accessed 13 Apr. 2022). Pursuant to Article 12.11 of the Central America–Panama Free Trade Agreement, the Financial Services Committee serves a number of functions, including a role in the resolution of disputes concerning the application of Article 12.09.

49 Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8 (Parkerings v. Lithuania), Award (11 Sep. 2007) and Bayindir Insaat Turizm Ticaret ve Sanayi A.Ş. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Award (14 Aug. 2009).

50 Bayindir v. Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction (14 Nov. 2005), para. 224.

51 United Nations General Assembly, ILC, Final Report of the Study Group on the Most-Favoured-Nation clause, op. cit. note 5, para. 76.

52 Bayindir v. Pakistan, op. cit. note 34, para. 389 (in relation to national treatment). The Bayindir v. Pakistan tribunal also found at para. 416 that 'similarity must be examined at the level of the contractual terms and circumstances' and, at para. 417, that it was in 'no position to proceed to any meaningful comparison between the different situations at issue. To do so it would have needed sufficiently specific data on the terms and the performance of the different contracts involved'. See also Parkerings v Lithuania, op. cit. note 49, paras. 371–430, in which the tribunal stated in para. 368: 'An objective justification may justify differentiated treatments of similar cases. It would be necessary, in each case, to evaluate the exact circumstances and the context.'

53 This is closer to the test adopted in Parkerings v Lithuania, op. cit. note 49, paras. 371–430 than in Bayindir v. Pakistan, op. cit. note 34, para. 390 (in relation to national treatment).

54 Bayindir v. Pakistan, op. cit. note 34, para. 390 (in relation to national treatment); Parkerings v Lithuania, op. cit. note 49, para. 368; Pawlowski and Projekt Sever v. Czech Republic, op. cit. note 31, paras. 533–34.

55 See Loretta Malintoppi and Hussein Haeri, 'The Non-Disputing State Party in Investment Arbitration: An Interested Player or the Third Man Out?' in D Caron, et al. (eds) Practising Virtue: Inside International Arbitration (Oxford University Press, 2015), 565–83. The United States is particularly prolific in making non-disputing party submissions. See, e.g., (last accessed 13 Apr. 2022).

56 See United Nations Conference on Trade and Development (UNCTAD), 'International Investment Agreements Reform Accelerator' (2020), 18–20, available at See also UNCTAD. IIA Issues Note: 'Recent Developments in the IIA Regime: Accelerating IIA Reform' (Aug. 2021), available at (web pages last accessed 13 Apr. 2022).

57 Text in English available at (last accessed 13 Apr. 2022).

58 The wording is similar to Article 8.7(4) of the Canada–European Union Comprehensive Economic and Trade Agreement. There is commentary suggesting that this formulation is lex specialis and departs from the accepted operation of an MFN clause as a matter of general international law, where '[a]s a matter of general international law, a treaty obligation assumed towards a third State may constitute treatment for the purpose of the MFN clause'. Campbell McLachlan, Laurence Shore and Matthew Weiniger, International Investment Arbitration: Substantive Principles (2nd ed., Oxford University Press, 2017), 267–58, 345 citing Rights of Nationals of the United States of America in Morocco (France v. United States of America) [1952] ICJ Rep 176, 190–7 and ILC Draft Articles, 23. Comment 6 to Draft Article 5 states, in relevant part: 'The beneficiary State, on the strength of the clause, may also demand the same benefits as were extended by the agreement in question to the third State. The mere fact that the third State has not availed itself of the benefits which are due to it under the agreement concluded with the granting State cannot absolve the granting State from its obligation under the clause.'

59 Agreement between Japan and Georgia for the Liberalisation, Promotion and Protection of Investment. English text available at (last accessed 13 Apr. 2022).

60 Agreement between the Government of the Republic of Indonesia and the Government of the Republic of Singapore on the Promotion and Protection of Investments. English text available at (last accessed 13 Apr. 2022).

61 Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of the United Mexican States for the Promotion and Reciprocal Protection of Investments. English text available at (last accessed 13 Apr. 2022).

62 Agreement between the Republic of Colombia and the Kingdom of Spain for the Reciprocal Promotion and Protection of Investments. Spanish text available at (last accessed 13 Apr. 2022).

63 id.

65 ibid., Article 6.

66 See The MFN clause was further discussed at the Fourth Negotiation Round (2–5 Mar. 2021), Sixth Negotiation Round (6–9 Jul. 2021) and Eighth Negotiation Round (9–12 Nov. 2021), see (web pages last accessed 13 Apr. 2022).

67 United Nations General Assembly, ILC, Final Report of the Study Group on the Most-Favoured-Nation clause, op. cit. note 5, above, paras. 213, 216.

68 ibid., para. 202.

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