MFN clause in UK-Soviet BIT extends to dispute resolution provisions

In a case before the Arbitration Institute of the Stockholm Chamber of Commerce, RosInvestCo Uk Ltd v The Russian Federation Case No:Arbitration V 079/ 2005, the Tribunal considered whether it had jurisdiction under the UK-Soviet Bilateral Investment Treaty (BIT) to determine a dispute between the parties relating to the alleged unlawful expropriation of assets.

The Tribunal held that it did have jurisdiction in light of the Most Favoured Nation (MFN) clause in the BIT, by reference to the BIT between Denmark and Russia.

The case demonstrates a difference in approach to the view of commentators who have suggested that MFN clauses will not apply to dispute resolution clauses in investment treaties, save where expressly provided for by States in the relevant BIT. Indeed, in this case the Tribunal concluded that an arbitration clause in the context of an expropriation claim was of the same protective value as any substantive protection given under the BIT.