Research On Treaty Interpretation In Investor-State Dispute Arbitration

In the past two decades,the number of investor-state dispute resolution(ISDS)arbitration cases has been increasing.The inconsistency of international investment awards and the neglect of the public interest of the host country have led to criticism of the ISDS mechanism.These issues faced by ISDS mechanism are related to the interpretation of the investment treaty by the tribunal.The interpretation of the investment treaty by the tribunal in the procedure is somewhat affected by different factors.The difference of the educational background and the political preferences between the arbitrators has made it impossible for them to reach a consensus on the same term of the investment treaty,which has led to conflicts in treaty interpretation.In addition,ISDS arbitration is derived from international commercial arbitration,in which the arbitrators often focus on the facts of cases over the reasoning process.As a result,the reasoning process of treaty interpretation and the application of treaty interpretation rules are not taken seriously in the investment arbitration,and the tribunal will not penetrate deeper in the interpretation of the treaty.However,the text of the treaty text itself is too simple and vague,which also leads to diversified interpretations.It requires people to interpret it according to the language in which it was concluded and the specific social environment.Most of the investment disputes are caused by inconsistent understanding of the terms of the treaty.Therefore,the importance of treaty interpretation in investment arbitration is self-evident.However,most of the investment tribunals are unaware of this problem.As a result,the tribunal has many problems in the interpretation of the treaty.This paper starts with the general theory of treaty interpretation in international law,discussing the particularity of the treaty interpretation in investor-state dispute arbitration,and finds out the problems in the treaty interpretation through large number of case studies,after which this paper proposes corresponding solutions to improve existing ISDS mechanism to ensure its sustainability.Finally,combined with China's investment arbitration practice,this paper provides some suggestions and references as to how China can deal with related issues from the perspective of treaty interpretation.Specifically,in addition to the introduction and conclusion part,the paper is divided into the following four parts:The first part is about the theoretical overview of treaty interpretation in investor-state dispute arbitration.In this part,this paper starts with the basic theoretical knowledge of treaty interpretation,and discusses the subject,object and the rules of treaty interpretation in investment arbitration.At the ending part,it summarizes the characteristics of treaty interpretation in ISDS arbitration.The second part mainly discusses the conflict of treaty interpretation in ISDS arbitration.In this part,through a large number of case studies,it is concluded that the interpretation of the same or similar clauses by the tribunal is in conflict with each other.Then,it further analyzes of the reasons for the conflict of treaty interpretation,which is the “endogenous” defects of the investment arbitration mechanism,the “fragmentation” of the international investment treaty and the lack of accuracy of the investment treaty text.Finally,some suggestions are proposed on how to improve the interpretation of the treaty.The third part mainly discusses the misuse of the treaty interpretation rules in the Vienna Convention on the Law of Treaties(VCLT)by the tribunal.Firstly,a large number of cases are analyzed to study on the misuse of VCLT treaty interpretation rules by tribunal.Secondly,the reasons why the tribunal misuses the VCLT treaty interpretation rules are the insufficient capacity building of arbitrators,the lack of transparency of investment arbitration and the vagueness of the VCLT treaty interpretation rules.Finally,some suggestions are proposed on how to prevent the tribunal from misusing the VCLT treaty interpretation rules.The fourth part is mainly about the countermeasure analysis of China's response to the treaty interpretation problem in investment arbitration.In this part,this paper puts forward some countermeasures and suggestions on how the Chinese government should deal with this problem in the future contracting practice and arbitration practice based on the study of existing treaty interpretation problems in investment arbitration.