Rethinking Ethiopia’s Bilateral Investment Treaties in light of Recent Developments in International Investment Arbitration

Abstract

International investment law is dynamic. As treaty practice and jurisprudence in the area constantly develop, global standards are always in the making. Rethinking Ethiopia’s Bilateral Investment Treaties (BITs) is thus a natural response to evaluate the status of the country’s obligations under the regime of global investment standards. This article briefly evaluates the concept of Most Favored Nation (MFN) treatment, in relation to the nature or purpose of MFN clauses and its interaction with dispute resolution provisions contained in BITs. In doing so, the article evaluates the different scenarios of ‘treaty shopping’ whereby an investor can possibly use BITs signed by Ethiopia and a state other than the investor’s home state, to benefit from treaty obligations entered by Ethiopia with other partners. A review of Ethiopian BITs indicate that in almost all of the BITs, the MFN clause is phrased in general terms and leaves leverage
to raise competing interpretations and creating a matrix of obligations thereby stretching the country’s obligations under the respective agreements. This calls for revising the broad and incoherent application of the MFN standard contained in various BITs signed by Ethiopia with the aim to laying down a coherent investment treaty framework.

Key words: Most Favored Nation, Bilateral Investment Treaties, Investment
Arbitration, Umbrella Clause, Standard of Treatment