MFN is regarded as an important standard code of international commercial transaction. It has been said that MFN clause is one of the commonly adopted principle in the international investment2 domain. The definition of Most favoured-Nation is3 well explained in Article 5 of International law commission Draft Articles4,
Treatment accorded by the granting State to the beneficiary State, or to person or things in a determined relationship with that State, not less favoured than treatment extended by the granting State to a third State or to person things in the same relationship with that third state.
The scope of Most Favoured nation is a two way sword creating controversies related to whether the international investment treaties covers jurisdictional or procedural matters. The inclusion of MFN clauses became a general practice in the numerous bilateral, regional and multilateral investment-related agreements till 1950.
The aim of MFN clause is to reiterate the importance of equality of treatment irrespective of the nationality of the investors5 and eliminate the discriminative forces.MFN clause had a variant approach towards different treaties leading to more problems in identifying the scope and extend protections based on different treaties and their conditional clauses.
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