Investor Presentaiton
164
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
Even tribunals that have permitted some importation of more
favourable provisions have suggested that there are limits on the
practice. Thus, conditions on a State's consent to arbitration that
reflect deeply held public policies of the State would not be
deposable by means of an MFN clause. The Maffezini tribunal gave
examples of requirements that could not be ousted by virtue of an
MFN clause, such as a State's requiring the exhaustion of local
remedies, a State's having included a fork-in-the-road clause
requiring the election of either local or international venues, a
State's having offered an entirely different forum unavailable in the
basic treaty, or a State's having designed an extremely detailed
arbitration regime, such as is the case with NAFTA Chapter
Eleven. 201
These limitations restrict the reach of the MFN clause,
but their use in any particular case is not predictable. Thus,
significant concerns abound as to the ability of investors to "cherry-
pick" provisions from various treaties and thereby create a new
treaty.
The lack of agreement on the interpretation of MFN clauses
makes it important that States make their intent very clear with
respect to a MFN clause that they include in an IIA. Thus, a number
of countries have started to introduce clarifications on the operation
of the MFN clause in their IIAs in order to foreclose the possibility
of using it to import procedural provisions from third-party
treaties. 202
T. "Umbrella" clauses and appropriate ISDS forums
"Umbrella", or "observance of undertakings", clauses have
given rise to an issue of investment treaty tribunals having
competence to hear certain investor-State disputes that would not
201 Maffezini v. Spain, ICSID Case No. ARB/97/7, Award, 25 January
2000, para. 63.
202 See UNCTAD, 2010c, pp. 84-87.
UNCTAD Series on International Investment Agreements IIView entire presentation