«narrow» interpretation of the Most-Favoured-Nation clause. Comments on Beijing Everyway Traffic & Lighting Tech. Co., Ltd. v. Ghana

The Most-Favored-Nation (MFN) clause is a contentious issue in investment arbitration, particularly regarding its scope. The question of whether MFN protection is substantive or procedural has been a subject of ongoing debate, as evidenced by the case of Beijing Everyway Traffic & Lighting Tech. Ltd. v. Ghana. In this case, the Tribunal opted for a restrictive interpretation of the MFN clause, ruling that Investor-State Dispute Settlement can only be triggered if the dispute pertains to the amount of compensation. This decision deviates from the conventional broad interpretation of the Most-Favored-Nation clause that prevailed at the beginning of this century. Notably, this investment dispute arises from a series of loans facilitated by the China Development Bank, aimed at promoting infrastructure development projects on the African continent. In this context, the objective of this commentary is to assess this award from three distinct perspectives: First, the restrictive interpretation of the Most-Favored-Nation clause is examined, followed by an analysis of the effet utile of restrictive Investor-State Dispute Settlement clauses. Finally, the role of Chinese companies as foreign investors is discussed. The arbitral award is then critically analyzed, leading to the following conclusions: Firstly, the award represents another example of the jurisprudential back-and-forth on the Most-Favored-Nation clause. Second, the principle of effectiveness or effective interpretation cannot exceed the terms agreed upon by the Contracting States. Third, Chinese companies play an important role in investment projects in Africa, and this award invites the strengthening of the State-State Dispute Settlement.