The Most-Favoured-Nation Clause in Investment Treaties

This IISD Best Practices paper examines the most-favoured-nation (MFN) clause in investment treaties, focusing on how arbitral tribunals interpret these clauses and the resulting implications for states.

• The interpretation of the most-favoured-nation (MFN) clause shifted significantly after the case of Maffezini v. Spain in 2000, allowing investors under a bilateral investment treaty (BIT) to import more advantageous provisions from a third-party BIT signed by the host state.
• The ability of foreign investors to combine elements from multiple treaties to create a 'custom tailor' treaty has been criticized for ignoring the bilateral nature of the specific negotiations and commitments made between two states.
• The document aims to analyze the content and scope of MFN clauses to find solutions that balance rights and obligations while supporting reforms for a regime that promotes sustainable development.

APA

Nikièma,, S. H. (2017). The Most-Favoured-Nation Clause in Investment Treaties. International Institute for Sustainable Development. https://www.iisd.org/publications/guide/iisd-best-practices-series-most-favoured-nation-clause-investment-treaties

Chicago

Nikièma,, Suzy H. The Most-Favoured-Nation Clause in Investment Treaties. International Institute for Sustainable Development, 2017. https://www.iisd.org/publications/guide/iisd-best-practices-series-most-favoured-nation-clause-investment-treaties.

Wikipedia

{{cite report |last1=Nikièma, |first1=Suzy H. |title=The Most-Favoured-Nation Clause in Investment Treaties |publisher=International Institute for Sustainable Development |date=14 February 2017 |url=https://www.iisd.org/publications/guide/iisd-best-practices-series-most-favoured-nation-clause-investment-treaties |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nikima2017mostfavourednation, author = {Nikièma,, Suzy H.}, title = {{The Most-Favoured-Nation Clause in Investment Treaties}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = feb, url = {https://www.iisd.org/publications/guide/iisd-best-practices-series-most-favoured-nation-clause-investment-treaties}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }