Document Type

Report/Policy Paper

Publication Date



Over recent years, many states have taken steps to refine and modernize their investment treaties. These reforms, however, are typically only included in newer treaties or model agreements. States continue to be exposed to claims, litigation, and potential damages under older “old-style” agreements. These risks are particularly acute given that tribunals have often permitted investors to “treaty shop” to obtain more favorable protections, and have also permitted investors to use the most-favored nation (MFN) provision to “import” more investor-friendly (or at least less clear) provisions from other treaties.

This working paper discusses one strategy states can use to try to reduce their exposure to claims and liability under existing, “old-style” treaties. In addition to setting out the general rules regarding state practice and agreement as a means of influencing treaty interpretation, the paper (1) identifies three issues in investment treaty law – FET, MFN, and shareholder rights – that may be particularly ripe for proactive efforts by states applying this interpretive strategy; and (2) sets out a series of questions that aim to facilitate inter-state efforts to identify consensus on these controversial treaty provisions.

Another paper on the role of states in reducing uncertainty under existing treaties was published in April 2014.


Antitrust and Trade Regulation | International Law | International Trade Law | Law | Securities Law | Transnational Law