Application of Most Favoured Nation Clause to Jurisdiction Provisions in Light of the Award in Austrian Airlines v. Slovakia
pages 73 - 92

This paper discusses the issue of whether investors who raise claims on grounds of a violation of BIT obligations by the state may take recourse to the most favoured nation clause with respect to the jurisdiction of the arbitration tribunal. Case law and scholarly literature provide divergent opinions regarding this question. The case law in the form of previous arbitral awards shows that most arbitration courts have been inclined to permit such recourse in cases in which investors invoked the MFN clause because they wished to avoid procedural requirements which would have resulted in substantial protractions for the arbitration procedure. Conversely, arbitration courts have refused (with one single exception) to allow the “import” of new arbitration clauses into the main contract. Part I of the paper provides an overview of the issue, and offers reasons for the existence of such highly divergent positions. Part II describes the existing relevant jurisprudence. Part III analyses the most recent award in Austrian Airlines vs. Slovakia. The authors also attempt an assessment (in Part IV) whether the cited award might lead to a more consistent administration of justice in this area, and thus make arbitration in investment treaty cases more predictable.

arbitral tribunal
dispute resolution provisions
investment treaty
investment disputes
jurisdiction provisions
most favoured nation clause
about the authors

Grzegorz Domański is a professor at Warsaw University and a partner in the Domański Zakrzewski Palinka Law Firm in Warsaw. Grzegorz acts as an arbitrator and represents clients in arbitration proceedings, including investment treaty disputes. He has acted for both investors and respondent state. 


Marek Świątkowski is a partner in the Domański Zakrzewski Palinka Law Firm in Warsaw. Marek’s main practice areas cover mergers & acquisitions and investment treaty arbitration. He has acted for both investors and respondent state in investment treaty disputes.


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