The Investment Treaty Arbitration Review: Recent Trends in Most Favoured Nation Clauses in International Investment Agreements


From the turn of the century, international treaties have undergone numerous changes to reflect the necessity to incorporate suitable legal measures to keep the relationship between states as amicable as possible. In the realm of global trade, the most favoured nation (MFN) clause is one of the most widely debated aspects of this area. In a nutshell, MFN clauses in international treaties strive to eliminate discrimination, albeit with certain exceptions, by ensuring countries do not discriminate between trading partners.

MFN clauses have been in existence since the early twelfth century, when medieval trading cities sought monopolies while exploiting foreign markets. Unable to achieve the same, they had to instead settle for opportunities and treatment at least equal to those offered to their rivals. It was only in the seventeenth century that the phrase ‘most favoured nation’ came to be expressly used and with the advancement in time and institutionalising of the nation-state system, the MFN clause has come to be incorporated in a number of international agreements.

Please click here to read the full article by Farhad Sorabjee, Shanaya Cyrus Irani, Siddhesh S Pradhan and Ananya Verma published in The Law Reviews.