Author

Dr Alia Algazzar

Consultant in International Law & Dispute Settlement, Docteur en Droit International - IHEID

Editors
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Similarity/ In Like Circumstances

I. Introduction

1.

The phrase “like circumstances/similar situations”, also referred to as the “likeness” test, appears in the formulation of National Treatment (NT) and Most Favoured Nation (MFN) provisions.1 (See further National Treatment and Most Favoured Nation Treatment). Some treaties contain a narrower formulation, referring to “identical” circumstances/situations.2 Other treaties, however, include no such language.3 Similar wording is spelled out in the World Trade Organization (WTO) agreements, referring to “like” products and services.4

II. Definition

2.

The “likeness” test denotes that the allegedly discriminatory measures adopted vis-à-vis a foreign investor or investment should be compared with those adopted towards a similarly situated national or foreign investor or investment (i.e. a comparator).5 Even in the absence of the “like circumstances” wording, particularly in provisions prohibiting discriminatory measures or the fair and equitable standard, tribunals assumed that the discriminatory treatment inquiry requires the identification of a similarly situated comparator(s).6 

III. Similarity/Like circumstances is fact and context-dependent

3.

It is generally agreed that the determination of whether investors are similarly situated or in like circumstances is a fact and context-sensitive inquiry.7 In assessing “likeness”, tribunals take into account various factors including the competitive relationship between the claimant and the identified domestic or foreign comparator,8 the legal and factual circumstances of the investor or investment,9 and considerations of public policy/interest.10 

IV. The similarly situated comparator

A. Criteria

4.

Tribunals have devised different criteria for determining a proper comparator. Some considered that a proper comparator is limited to investors or investments operating in the same business or economic sector.11 More broadly, other tribunals compared the treatment accorded to the allegedly prejudiced investor or investment with all local producers.12 

B. Absence of idential comparators

V. Relevance of WTO jurisprudence

7.

Case law is divided on the relevance of WTO case law. While some tribunals rejected the relevance of the test of “like products” as set out in Articles I and III of the General Agreement on Tariffs and Trade (GATT) for the determination of what constitutes “like circumstances” in the context of investment treaties,15 others have used this test as interpretive guidance, while, at the same time, acknowledging the autonomous and distinct nature of the “likeness” test as understood under investment treaties.16 

VI. Breach and burden of proof

VII. Effects

Bibliography

Dolzer, R., and Schreuer, C., Principles of International Investment Law, 2nd ed., 2012.

Newcombe, A., and Paradell, L., Law and Practice of Investment Treaties: Standards of Treatment, 2009. 

Ortino, F., The Impact of Amicus Curiae Briefs in the Settlement of Trade and Investment Disputes, in Meessen, K.M. (ed.), Economic Law as an Economic Good: Its Rule Function and its Tool Function in the Competition of Systems, 2009, pp. 301-316.

Ziegler, A.R., and Gratton, L.P., Standards of Treatment, in Muchlinski, P.T., and Ortino F., Schreuer, C. (eds.), The Oxford Handbook of International Investment Law, 2008, pp. 259-303.

Baetens, F., Discrimination on the Basis of Nationality: Determining Likeness in Human Rights and Investment Law, in Schill, S.W. (ed.), International Investment Law and Comparative Public Law, 2010, pp. 279-315.

Kurtz, J., The Merits and Limits of Comparativism: National Treatment in International Investment Law and the WTO, in Schill, S.W. (ed.), International Investment Law and Comparative Public Law, 2010, pp. 243-278.

Ortino, F., Non-Discriminatory Treatment in Investment Disputes, in Dupuy, P.M., and Others (eds.), Human Rights in International Investment Law and Arbitration, 2009, pp. 344-366.

Anozie, N., Legal Analysis of the Scope of ‘Like Circumstances’ Concept under NAFTA National Treatment of Investments Obligation, 2017

Dolzer, R., National Treatment: New Developments, in Making the Most of International Investment Agreements – A Common Agenda, Symposium Co-organized by ICSID, OECD and UNCTAD, 2005

Sesin, A., The Standard of National Treatment in the Investor-State Dispute Settlement Practice, Cambridge International Law Journal, 2017.

Kurtz, J., The Use and Abuse of WTO Law in Investor – State Arbitration: Competition and its Discontents, European Journal of International Law, 2009, pp. 749–771

Bjorklund, A.K., The National Treatment Obligation, in Yannaca-Small, K. (ed.), Arbitration Under International Investment Agreements: A Guide to the Key Issues, 2nd ed., 2018, pp. 532-561.

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