On The Multilateralization Effect Of Most-Favored-Nation Treatment Clause In Investment Treaties

Most-favored-nation treatment clause is an important basic clause in international investment treaties.In international investment practice,the multilateralization effect of most-favored-nation treatment can coordinate the investment protection standards among different treaties and provide an investment environment of fair competition for investors.However,due to its vague provisions and the broad interpretation of the arbitral tribunal,the one-sided tendency to protect foreign investment appears in the practice of investment arbitration,which makes the host country assume unexpected obligations,erods the reasonable regulatory space of the host country for foreign investment,and arouses the discussion on the effective risk of the multilateralization of most-favored-nation treatment.As an important interpretation principle in the application of most-favored-nation treatment,ejusdem generis can invoke other more favorable treatment through most-favored-nation treatment as long as they conform to the ejusdem generis.It can be said that ejusdem generis limit the utility scope of the multilateralization of most-favored-nation treatment.Therefore,this paper takes the formulation text of most-favored-nation treatment in international investment law and its practical application in the practice of international investment arbitration as the research basis,takes ejusdem generis as the entry point,analyzes the effectiveness and risks of multilateralization of most-favored-nation treatment in international investment,and proposes relevant measures to deal with the risks of multilateralization.The first chapter introduces the general situation of the most-favored-nation treatment,expounds the origin and development process of the most-favored-nation treatment clause,and specifies the types of the most-favored-nation treatment clause in international investment treaties.Chapter two discusses the influence of multilateralization of most-favored-nation treatment,enumerates the interpretation trend and actual application of substantive clause and procedural clause invoked by most-favored-nation treatment in arbitration practice,and expounds the positive impact of multilateralization effect of most-favored-nation treatment on investment protection,as well as the risks brought by multilateralization effect of most-favored-nation treatment on host country and international investment law.Excessive emphasis on the protection of investors’ rights and interests in the expansion of the application of mostfavored-nation treatment will damage the host country’s reasonable regulatory right to investment and aggravate the fragmentation of international investment laws,leading to the instability and unpredictability of the application of most-favored-nation treatment.Next,Chapter three focuses on the essence of the multilateralization of mostfavored-nation treatment.The first section firstly analyzes the multilateralization effect caused by the most favored nation treatment by invoking the provisions of the third party treaty in two parts: substantive provisions and procedural matters.In terms of entity,Bayindir case is a typical example of the view that "there is no dispute about the most favored nation treatment invoking the entity treatment clause in the third-party treaty".In sharp contrast,Ickale case takes ejusdem generis as the entry point and adopts a completely different interpretation dimension from Bayindir case.Even though the provisions of the most-favored-nation treatment clause of the underlying treaty and the preamble clause’s description of the fair and just treatment clause were exactly the same in the two cases,the arbitral Tribunal made completely opposite rulings.Then,the relevant disputes on the application of most-favored-nation treatment in procedural matters were discussed.The "Maffezini V.pain case" accepted by ICSID in 1997 was taken as the landmark point,which broke the restriction that most-favorednation treatment clause was only applied in the field of substantive treatment.A contrasting case with Maffezini is Plama v.Bulgaria,in which the Tribunal ruled against the application of most-favoured-nation treatment in procedural matters.Section two summarizes and analyzes the causes of the effectiveness of the multilateralization of most-favored-nation treatment in view of the problems and disputes in the above four arbitration cases.The cause of the problem is that the provisions of the most-favored-nation treatment clause are relatively simple and broad,and the arbitral tribunal has much room for interpretation.Moreover,it is the inadequacy of most-favored-nation treatment in arbitration practice and the confusion of interpretation rules of most-favored-nation treatment clause.It simply adopts dichotomy to distinguish and interpret the application of most-favored-nation treatment in substantive clauses and procedural matters,and applies the most-favored-nation treatment clause with broad and generalized interpretation such as interpretation of purpose.The fourth chapter puts forward corresponding solutions to the above contents.The first is to make good use of the ejusdem generis to improve the interpretation of the most-favored-nation treatment clause.The legal meaning and application basis of the ejusdem generis are elaborated,and ejusdem generis stipulate the effective mechanism of the multilateralization of most-favored-nation treatment.Therefore,we should abandon the traditional dichotomy and analyze the specific application of mostfavored-nation treatment by using the ejusdem generis.When introducing the third party arbitration procedure clause,the arbitration agreement is reached by combining the clause and the case.The second is to improve the provisions of the most-favorednation treatment clause in the investment treaty to make it more standardized and clear.This paper makes reference to the specific provisions on most-favored-nation treatment in recent investment treaties,refines and adds restrictive contents in the formulation of most-favored-nation treatment clauses,and expresses the basic concept of mostfavored-nation treatment clauses in detail.The fifth chapter discusses how China should deal with the multilateralization effect of the most-favored-nation treatment clause and the risks of its application in international investment.First of all,the treaty should not adopt too strict most-favorednation treatment clause,so that the original connotation of the most-favored-nation treatment clause will be completely lost,and domestic investment competitiveness will be reduced.Secondly,we should strengthen the application of ejusdem generis in mostfavored-nation treatment,and make reasonable provisions on most-favored-nation treatment when concluding treaties based on ejusdem generis.To balance the rights and interests between the host country and the investor,the same rules are adopted to explain the most-favored-nation treatment in treaty interpretation.