Investor Presentaiton

190 INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL Convention State. Any State that does not honour an award rendered against it would be in clear violation of the treaty, which can trigger the State-State dispute settlement mechanism, diplomatic pressure and/or countermeasures by the home State. ISDS and MFN clauses "Umbrella" clauses and 213 MFN clauses that do not specify their intended reach open themselves to (often diverging) interpretations by arbitral tribunals. Uncertainty surrounding the provision's scope of application can be addressed by careful treaty drafting. It is essential for the treaty language to be specific about the reach of the MFN clause. its Contracting parties may opt for an unfettered MFN clause that explicitly extends applicability to both substantive and procedural matters, and allows importation of more favourable provisions from third-party IIAS. Other countries may prefer to explicitly narrow the MFN clause in order to exclude its application to the ISDS mechanism. When this is done as a clarification (using "for greater clarity" language or a similar formulation), this supports the argument that existing treaties with similar MFN provisions have the same, limited reach.2 213 Omitting an "umbrella" clause would remove the uncertainty surrounding its meaning and For other policy options with respect to MFN, see UNCTAD, 2010c, pp. 106-114. UNCTAD Series on International Investment Agreements II

View entire presentation