https://doi.org/10.31261/PPPM.2013.12.05
The article focuses on the issue of application of the most favoured nation (MFN) treatment to the dispute settlement mechanisms included in investment treaties. The analysis is made in the light of two recent, contradictory decisions issued in Hochtief v. Argentina and Daimler v. Argentina cases. The article consists of two major parts. The first one starts with explaining the particular nature of the agreement to arbitrate present in investment arbitration based on international treaties. It then proceeds to describe the MFN treatment using the example of Article 3 of the Bilateral Investment Treaty (BIT) between Argentina — Germany, identifying its basic elements. Subsequently, the analysis turns to the issue of the application of the MFN clause to the dispute settlement mechanisms included in BITs. It focuses on decisions of the arbitral tribunals rendered up to date, which considered this issue. The authors then identify that the presence of third parties is a standard feature in investment arbitration (as the investors are not parties to the BITs which are concluded between states). Nevertheless the application of the MFN clauses to dispute settlement mechanisms results in an even more convoluted situation — the presence of “fourth” parties to the legal relation between the states — parties to the BITs (i.e. investors invoking the MFN clause in the underlying BIT to invoke the dispute resolution mechanism of another BIT). The second part of the article is a case study. It contains the analysis of the application of the MFN clause to the dispute settlement mechanisms at the example of the BIT Argentina — Germany (on which the contradictory decisions in Hochtief v. Argentina and Daimler v. Argentina were based). It focuses on the question whether the MFN clause included in art. 3 of the BIT Argentina — Germany can be invoked to avoid application of the eighteen months requirement included in art. 10 of that BIT. This part of the article starts with the distinction between jurisdiction and admissibility and its relevance in the context of investment arbitration. Then it turns to the analysis of the elements of the MFN clause at the chosen example: (i) treatment, (ii) in the territory of the host state, (iii) less favourable, (iv) than accorded to investments or investors from a third state, (v) in like circumstances. The conclusion is that there are arguments “for” and “against” the application of the MFN clause to dispute settlement mechanisms. Given the variety of BITs currently in force the final answer must be always based on the wording of particular provisions of the applicable BIT. The crucial point is whether the provision circumvented by resorting to the MFN clause is a condition to a host state’s consent, and thus an element of jurisdiction of the tribunal, or a procedural requirement, and thus an element of the admissibility of the claim. This, again, depends on the wording of the applicable investment treaty, as well as on the circumstances of a particular case. In case of the analysed Article 3 BIT Argentina — Germany the authors are of the opinion that the eighteen months requirement is part of the states’ consent to arbitrate. Thus, it is a jurisdictional element which means that under this particular BIT, the MFN clause cannot be relied on in order to avoid application of the eighteen months requirement.
Download files
Citation rules
Cited by / Share
Licence
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The Copyright Owners of the submitted texts grant the Reader the right to use the pdf documents under the provisions of the Creative Commons 4.0 International License: Attribution-Share-Alike (CC BY-SA). The user can copy and redistribute the material in any medium or format and remix, transform, and build upon the material for any purpose.
1. License
The University of Silesia Press provides immediate open access to journal’s content under the Creative Commons BY-SA 4.0 license (http://creativecommons.org/licenses/by-sa/4.0/). Authors who publish with this journal retain all copyrights and agree to the terms of the above-mentioned CC BY-SA 4.0 license.
2. Author’s Warranties
The author warrants that the article is original, written by stated author/s, has not been published before, contains no unlawful statements, does not infringe the rights of others, is subject to copyright that is vested exclusively in the author and free of any third party rights, and that any necessary written permissions to quote from other sources have been obtained by the author/s.
If the article contains illustrative material (drawings, photos, graphs, maps), the author declares that the said works are of his authorship, they do not infringe the rights of the third party (including personal rights, i.a. the authorization to reproduce physical likeness) and the author holds exclusive proprietary copyrights. The author publishes the above works as part of the article under the licence "Creative Commons Attribution-ShareAlike 4.0 International".
ATTENTION! When the legal situation of the illustrative material has not been determined and the necessary consent has not been granted by the proprietary copyrights holders, the submitted material will not be accepted for editorial process. At the same time the author takes full responsibility for providing false data (this also regards covering the costs incurred by the University of Silesia Press and financial claims of the third party).
3. User Rights
Under the CC BY-SA 4.0 license, the users are free to share (copy, distribute and transmit the contribution) and adapt (remix, transform, and build upon the material) the article for any purpose, provided they attribute the contribution in the manner specified by the author or licensor.
4. Co-Authorship
If the article was prepared jointly with other authors, the signatory of this form warrants that he/she has been authorized by all co-authors to sign this agreement on their behalf, and agrees to inform his/her co-authors of the terms of this agreement.
I hereby declare that in the event of withdrawal of the text from the publishing process or submitting it to another publisher without agreement from the editorial office, I agree to cover all costs incurred by the University of Silesia in connection with my application.
Vol. 12 (2013)
Published: 2013-06-30
10.31261/PPGOS
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
English
Język Polski