Study On The Applicability Of MFN Clause To Procedure Of International Investment Dispute Settlement

The ever increasing international investment practices give rise to the ever frequent international investment disputes, which enhance the ever solid belief to establish a reasonable, stable, efficiency and orderly international investment system,and even the multilateral investment system, While the opposition of some developing economics and public interest groups in developed economics frustrated the course several times, and to some extent, more countries turn to engaging into investment treaties at the bilateral or regional level. A large number of BITs and FTAs become the substantial international investment rules. As a cornerstone of the international trade law and international investment law, a treaty without MFN clause is half-empty. In the one way, MFN clause in international investment treaties harmonize variant protect effects by bilateral, regional agreement and promote harmonization in the international investment regime; in the other way, disputable application of MFN clause exist, especially the applicability of an MFN clause to the dispute settlement provisions. Different participants hold on opposite stances and even the reasoning of international arbitration tribunals have substantial contradiction,which bolster a long time debate over this issue.At the time of writing, Although China haven't been disputed in international investment tribunals on the issue of the applicability of MFN clause to dispute settlement procedures, Chinese investor has already involved in this issue. Given the fact that China and Chinese investors are engaging in large number of investment activities, the future investment practices could bring more similar challenges. Thus,this paper study on the question of Applicability of MFN Clause to Procedure of International Investment Disputes.This paper integrates text research method, case analysis method and comparative analysis method to analyze the conflict tribunal rulings and possible reasons. This paper argues that, in general, a broad MFN clause could be applied to dispute settlement procedure matters, while several limitations shall be carried out. After analyzing its possible reasons and necessary limitations, it also puts forward some suggestions for China and Chinese investors to coping the existing problemsmentioned above.Apart from the introduction, this paper is divided into six parts.The First Part: The introduction of MFN clause in international investment Agreement. This part takes the order from macroscopic to microscopic view. Firstly, it macroscopically introduces application scope of MFN clause in most international investment treaties, mainly BITs, taking the case of China, the United States, German,etc. Secondly, it microscopically introduces the application limits of MFN clause,including its applicability to substantial matters and procedure matters in international investment disputes.The second part is practices of MFN clause application to procedure matters of international investment dispute. First is classification of dispute settlement procedure into admissibility and jurisdiction, along with their traits. Second is controversy of MFN clause applicability to admissibility-related procedure, in which the classification was deepened into two branches: is the claim ripe enough or is the claim too stale. Third is controversy of MFN clause applicability to jurisdiction-related procedure, in which the classification was deepened into three branches: is the claim fall within the range of ratione personae, ratione materiae or ratione temporis. The second and third one is detailed analysis of real cases and reasons of dispute parties or tribunals who took different stances in relating to the applicability of MFN clause to dispute settlement procedure.The third part analyzes possible difficulties in applying MFN clause in international investment dispute settlement procedure. Based on the case analysis above, Firstly, the general and unlimited wording of MFN clause in international investment treaties made the tribunals, who are offen over-rely on the text meaning,hard to identify the true intents of contracting parties; Secondly, the tribunals never categorize the MFN-related procedures, and have randomness in picking up interpreting instruments provided by VCLT; thirdly, the inclination of arbitration institutions in widen their jurisdictions, which supported by their discretion and investor-friendly feature.The forth part is possible reasons and limitations for a broad MFN clause to beapplied to dispute settlement procedure matters. At the outset, there are no standards in differentiating between substantial and procedure matters. Besides, procedure protection is aimed at protecting substantial rights. Finally, expansion of commitments is the very feature of MFN clause. In the meanwhile, limitations should be hold. First are treaty interpretation rules by VCLT; second are considerations of public policy of host countries.The fifth part puts forward some suggestions for China and Chinese investors to coping the positive applicability of MFN clause to investment dispute settlement procedures. It takes the sequence of concluding an investment treaty, concluding an investment contract and engaging into an investment dispute and combines with subject division, namely China and Chinese investors, to formulate different ideas in coping with the problems mentioned above.The last part concludes the whole paper. First, summarize conflict decision of different arbitration tribunals and controversy of scholars. Second, emphasize the classification proposed by the author, in another words,(1) classify the dispute settlement procedure into admissibility and jurisdiction;(2) in the former branch, the classification is deepened into two secondary branches: is the claim ripe enough or is the claim too stale;(3) in the later branch, the classification is deepened into three secondary branches: is the claim fall within the range of ratione personae, ratione materiae or ratione temporis. Third, summarize the author's viewpoints as to the positive applicability of MFN clause to international investment dispute settlement procedures, including its possible supportive reasons and necessary limitations, in combination of newest development of FTAs. Forth, summarize the significance of this paper.