A Study On The Interpretation By The Contracting Parties Under The International Investment Arbitration Mechanism

At present,the international investment arbitration regime is faced with a legitimacy crisis which is mainly resulted from the inappropriate interpretation of the international investment treaties by the investment tribunals.The legitimacy crisis has brought about concern and discontent in the international community.To overcome the crisis,scholars have proposed many solutions,including paying attention to the contracting parties' interpretation on these investment treaties.Obviously,the solution that attaches importance to contracting parties' interpretation does do good to the relief of the legitimacy crisis that the international investment arbitration mechanism is faced with.However,the current study on this solution is not sufficient,for it exaggerates the significance of the contracting parties' interpretation,lacks in elaboration of the legal basis and neglects those probably subsequent legal and institutional problems.Researching on these issues is very meaningful both in theory and practice.On the one hand,the contracting parties' interpretation will not only have an influence on the application of international investment agreements by the arbitral tribunals and thus the investors' interests,but also be beneficial to overcome the crisis faced by the ISDS regime and facilitate the regime's reform.On the other hand,a study on this theme could perfect the theory relating to treaty application,and provide theoretical guidance for the conclusion of a multilateral agreement of investment.In addition to the Introduction and the Conclusion,this article is divided into the following four parts.Part One is an analysis on the rise and background of the contracting parties' interpretation on IIAs.This part starts with the introduction of the phenomenon where the contracting parties' interpretation is attached attention to from the aspects of treaty rules and arbitral practice.Following this,it analyzes the reasons why contracting parties' interpretation is focused on in terms of the misconducts of arbitral tribunal and the advantages of the contracting parties in interpreting investment treaties.Part Two explores the attribute and legal basis of the contracting parties' interpretation on IIAs.On the basis of international delegation theory,the contracting parties' interpretation is proved with the attribute of legislative interpretation.Then itanalyzes the principles of sovereign,and “pacta sunt servanda” as well as relevant rules provided in Vienna Convention on the Law of Treaty and particular IIAs,aimed to explain why they can constitute the legal bases for the contracting parties' interpretation on IIAs.Part Three discusses the limitations of the application of contracting parties' interpretation.Several law issues may expose its defects.The response from the tribunals to the contracting parties' interpretation includes partial adoption and complete avoidance.The defects of the contracting parties' interpretation and the response from the tribunals jointly consist in the limitations of the application of contracting parties' interpretation.On the basis of analyzing the relation between contracting parties and tribunals,it puts forward two suggestions about balancing the interpretations by contracting parties and tribunals.Part Four is about China's practice and feasible measures on contracting parties' interpretation.It outlines China's practice in concluding treaties and participating in arbitral hearings and proposes several suggestions in terms of China's practice in negotiating international investment agreements and experience in arbitration.