The most favoured nation clause according to the international law commission (in Spanish)
Keywords:
Exhaustion of domestic remedies, ICSID, Most Favored Nation Clause (types), International Law Commission, International Court of Justice, GATT, Incorporation by reference, Investment/Investor, WTO, Developing countries, Reciprocity, Ejusdem Generis Rule, Rules of interpretation, Procedural Rules, Bilateral Investment Treaties (models) National Treatment, Treatment no less favorable, Arbitral TribunalsAbstract
International economic law has not been the object of particular attention by the International Law Commission. The only point that has been dealt with is the one related to the so-called Most Favored Nation Clause. In 1978 the Commission elaborated a draft of articles, trying to induce from a practice of bilateral treaties useful rules for future negotiators and legal operators. The draft did not go further for different reasons. Years later, in 2006, the Commission decided to revisit the Clause, considering its massive inclusion in bilateral investment treaties and the problems raised by its interpretation. Focusing on the practice of arbitral tribunals, the Commission wondered, among other questions, about the scope of the Clause, an issue that revolved around the interpretation of the ejusdem generis rule and raised the central and highly controversial point of its applicability to procedural rules. The Commission understands that the Clause is applicable to the provisions on dispute settlement if that is the will of the parties and encourages the States to make it explicit; if not, the courts will have to do it. To facilitate its task the Commission proposes a series of factors. The Clause cannot, however, be invoked to alter the jurisdiction of the courts or the limits ratione personae, materiae and temporis of the treaty. Drawing the line between the jurisdiction of the court and the admissibility of the claim may be a complex task. The Commission concludes, in 2015, that the Clause has not changed in nature since the 1978 draft was adopted. It is up to the States that negotiate the Most Favored Nation Clauses to decide whether or not they should include the provisions related to dispute settlement; failing that, the courts must do so, case by case, in accordance with the rules of interpretation codified in articles 31 and 32 of the Vienna Convention on the Law of Treaties (1969), without it being possible to simply transfer the interpretation of the Clause inserted in one treaty to that of another, even if its wording is identical.
Author Biography
Antonio Remiro Brotons, Emeritus International Public Law in the Autonomous University of Madrid
Emeritus International Public Law in the Autonomous University of Madrid. Member of the Institut de Droit International. He has been counsel and lawyer for different Latin American countries and Spain before the International Court of Justice and arbitral tribunals He has been Lecturer at several higher education and research institutions, among them Panthéon-Assas University, the Graduate Institute of International and Development Studies of Geneva, El Colegio de México and the Hague Academy of International Law.
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