A Study On The Application Of The Vienna Convention On The Law Of Treaties In The Interpretation Of The Fair And Equitable Treatment Clause

Since the first using in 1997,the fair and equitable treatment clause(FET clause)has gradually become a widely invoked clause by investors in international investment arbitration.Some scholars even regard it as the “imperial clause”.The unclear concept and the various clause setting modes have made the interpretation of FET clauses a difficult issue in investment arbitration.In practice,investment tribunals have reached different interpretation conclusions,which has led to controversies like the unreasonable inconsistency and the crisis of legitimacy of international investment arbitration.Based on the dispute over the interpretation of the FET clause,the thesis takes Articles 31-32 of the Vienna Convention on the Law of Treaties(VCLT)as the perspective of research,elaborates on the justification and interpretative effects of each interpretation rules under the VCLT.Moreover,based on China’s perspective,the thesis analyses the role of the treaty interpreting methods of FET clauses in guiding China’s actions,such as concluding international investment treaties,participating in investment arbitration and taking part in the investment dispute settlement mechanism reformation.This thesis consists of four chapters,totaling over 40,000 words.Chapter 1 sets out the current controversy over the interpretation of FET clauses in international investment arbitration.The FET clause emerged after the World War II,with the climate of growing international direct investment.Now the clause has been adopted in a wide range of international investment treaties.Since the 1990 s,investors have begun to invoke the clause extensively in international investment arbitration.The reason why FET clauses have become the central disputed clause is related to its ambiguous concept,the nature of the absolute treatment standard and the variety setting modes.In practice,investment tribunals have adopted three main paths to interpret the FET clause,namely the rules of interpretation under the VCLT,the minimum standard of treatment under customary international law and the reference to previous arbitral awards.The complexity and variety of interpretative paths have led to numerous disputes over the interpretation of the FET clause,such as invoking but not specifically applying the interpretation rules under the VCLT and misinterpreting the object and purpose of treaties.Chapter 2 provides an explanation of the justification of choosing the interpretation rules under the VCLT.On the one hand,the interpretation rules under the VCLT are customary international law.At the same time,these rules fit in with the provisions on the application of law in international investment arbitration regimes.On the other hand,the application of the VCLT interpretation rules is reasonable.It not only weakens unreasonable inconsistencies between investment arbitrations,but also allow flexibility in interpretation to reflect the evolutionary nature of fair and equitable treatment.Based on the specific investment arbitration cases and scholars’ views,Chapter 3tries to construct a relatively unified interpretation path of the FET clause with the help of the VCLT.This thesis not only makes a positive analysis on how the arbitration tribunal should apply the VCLT,but also draws inspiration on the design of the FET clause and arbitration practice from the analysis results of treaty interpretation.Chapter 4 analyses the inspiration of treaty interpretation of the FET clause for China.In terms of treaty-making,by referring to interpretation rules such as context and the object and purpose under the VCLT,China can refine the text of the provision in international investment treaties.From the prospective of arbitration participating,if China and Chinese investors are involved in an investment arbitration referring to the FET clause,they can prepare their memorial with reference to interpretation rules under the VCLT and anticipate the possible outcome of the treaty interpretation by the tribunal.In addition,in the context of the international investment dispute settlement mechanism reformation,China can take the treaty interpretation method of the FET clause as an example and express its views of reformation objectives relating to treaty interpretation,namely “consistency of awards” and “enhancing the interpretation of treaties by the parties to the treaty”.Through this way,China can actively participate in the development of international investment arbitration rules.