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6 The Interpretation of Investment Treaties

From: The Law of Investment Treaties (3rd Edition)

Jeswald W. Salacuse

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 23 June 2021

International investment law — Object & purpose (treaty interpretation and) — Ordinary meaning (treaty interpretation and) — Rules of treaty interpretation — Arbitration — Judicial decisions

This chapter discusses the interpretation of investment treaties. Treaty interpretation is never easy, but the task of interpreting investment treaties is rendered particularly difficult by two factors: first, the generality and vagueness of many of the terms used in their texts, such as ‘fair and equitable treatment’, ‘full protection and security’, and ‘expropriation and measures tantamount to expropriation’ which reasonable persons may interpret differently. Although investment treaties have not traditionally defined these terms, some of the more recent international investment agreements, perhaps influenced by disputed arbitral decisions, have sought to provide more or less detailed definitional provisions for the often-contested important terms they employ. The second interpretational difficulty arises from the factual and legal complexity of the investment transactions and relationships to which investment treaties are applied. As a result of these complexities, arbitral tribunals and lawyers must devote significant effort and time to give meaning to words that at first glance appear simple but usually are not. The chapter then provides guidance on treaty interpretation. The basic rules of investment treaty interpretation are found in Articles 31, 32, and 33 of the Vienna Convention on the Law of Treaties (VCLT).

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