Updated: Aug 26, 2021
Generally, most favored nation (“MFN”) clauses are hard to handle, because it is such a complex clause, especially in bilateral investment treaties (“BIT”). In a decision given by ICSID, on investment arbitration, changed the whole perspective on MFN clauses and brought the possibility of understanding MFN clause can be extended to dispute resolution clauses. This decision named Maffezini Decision.
Maffezini decision had some distinct characteristic on the approach to the case. First of all, tribunal thought since dispute resolution was a subject matter that needed to be resolved, MFN clause must be interpreted in accordance to principle of ejusdem generis. This means that “MFN clause can be capable of attracting “more favorable treatment available in other treaties only in regards of the same ‘subject matter’ the ‘same category of matter’ or the same ‘class of matter’”.
Secondly, according to Schill, “Maffezini v. Spain is characterized by an issueoriented style of reasoning that abstracts from the individual parties to the proceedings.” Schill compared the two decisions (i.e. Plama v. Bulgaria and Maffezini v. Spain) and said Plama Decision was more focused on private law and excluded the principles of public international law. As one can see, case is multileveled and approaches are different in both cases.
Lastly and the most important aspect of the decision is broadening the MFN clause’s scope and provides parties to pursue arbitration. Although arbitration is getting popular by time, in investment arbitration, Maffezini decision has enlarged the perspective on MFN clauses applied to dispute resolution.
Ataman-Figanmeşe, İnci (2011), “The Impact of the Maffezini Decision on the Interpretation of MFN Clauses in Investment Treaties”, Ankara Law Review, pp.221-237, p.225. Stefan Schill, Maffezini V. Plama: Reflections On the Jurisprudential Schism in The Application of Most-Favored-Nation Clauses To Matters Of Dispute Settlement, ACIL Research Paper 2017-11, Available At SSRN, p. 9.
Mehmet Tuğberk DEKAK