Foreign Investment Essay Example | Topics and Well Written Essays - 3000 words

Foreign Investment - Essay ExampleMFN clause has been respectable in generating parity in trading opportunity among states by converting bilateral accords into multilateral agreements. As a matter of public international law, MFN clause provides the self-governing equality of states relative to trading policy. While as a tool for economic policy, it establishes a basis for international treaty in relation to hawkish dealings.2The establishment of Most-Favoured-Nation dealing has quite a long record. Before the GATT (General Agreement on Tariffs and Trade), bilateral clientele agreements often include an MFN clause, and by itself contributed a salient deal to trade liberalization. Neverthe slight, various measures in the 30s were carried out that constrained the operation of the MFN initiative. These measures were viewed to result in the splitting up of the world economy into trade blocs.3 Realizing from this monstrous view, the unqualified MFN clause on a multilateral footing w as subsequently integrated in the GATT following the ending of World War II, and has led to trade stability all over the world.The dual purpose of the MFN principle is removing the econ... The MFN clauses ensure that protected enthronizations via treaty will obtain favourable treatment no less than the agreement the host country bestows to investments from every other state firms or nationals. The Netherlands-Philippines Bilateral Investment Treaty is one distinctive example wherein it formulated that each contracting party shall extend to investments, in its territory, of nationals of the other contracting party treatment no less favourable than that granted to investment by any third state.4 II. Procedural and Substantive Rights of Investors Maffezini v. Kingdom of Spain5The issue being dealt with in the Maffezini case was to find out in what permissible conditions that an investor can maintain the MFN clause covered in a Bilateral Investment Treaty (BIT) that is valid to its di spute as a way of establishing the arbitrals jurisdiction. In resolving this issue, the courtroom presented the difference between the rightful extension of rights and privileges by way of the operation of the MFN clause, and the bothersome treaty-shopping that could disrupt policy objectives of the essential explicit treaty provisions.6Case Facts An investment dispute between the Kingdom Spain and an Argentine petitioner submitted to adjudication by the petitioner under the Spain-Argentine BIT. The terms of the treaty provide that any dispute arising from the BIT has to be submitted to a fitted tribunal in Spain when the procedures for amicable settlement fail (Art.-X.2). Further, that a dispute could only be elevated for international arbitration if the competent tribunal in Spain delivered a decision on the merits that fall short of resolving the dispute, or a decision has not been made on the merits indoors a period of eighteen