XVII Discrimination: National Treatment, Most-Favoured Nation Treatment, and Discriminatory Impairment

Subject(s):

Investment ‘in accordance with host state law’ — Investor — Full protection and security — National treatment — Non-discrimination

This chapter assesses the principle of non-discrimination, which is one of the basic protections for foreign investors and investments in host nations. Investment treaties provide guarantees against discrimination in three different ways. First, national treatment ensures that foreign investors will be treated no less favourably than similarly situated domestic investors. The concept of national treatment is a key element of international trade and investment agreements. Second, most favoured nation (MFN) treatment ensures that foreign investors will not be treated less favourably than investors from any third country. Finally, some treaties contain a provision that prohibits arbitrary and discriminatory impairment of investments by the host state. The chapter then analyses the basic elements of these protections and the difficulties faced by tribunals adjudicating discrimination claims.