Investment treaty and its interpretation

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#Investment_treaty and its #interpretation • 1. A brief Introduction to investment treaties, • Investment treaties are agreements about a state’s treatment of investments made by individuals or companies from another State. Bilateral investment treaties are international agreements. They set the terms and conditions for private investment by nationals and companies of one country into another country. Multilateral investment treaties are international investment agreements concluded between several countries. They contain provisions to protect investments made by individuals and companies in each other's territories. • 2. Investment Treaties Interpretation, • When interpreting investment treaties, tribunals often refer to the Vienna Convention on the Law of Treaties. They specifically look at Article 31, Article 32, and Article 33. Tribunals interpret the treaties based on their object and purpose by referencing to the preamble. • Some tribunals seem to have favored a restrictive interpretation of treaty provisions. This approach led to a limitation of the State’s sovereignty. Others have rejected a restrictive interpretation, at times favoring an interpretation that gives full effect to the rights of investors. Yet other tribunals have distanced themselves from either approach or have advocated a balanced interpretation. • Courts or tribunals inevitably consider preparatory works. They interpret the “terms of the treaty in their context.” They also consider them in the light of its object and purpose. This is because parties to a dispute often make reference to preparatory works during proceedings. • When states highlight the preparatory works to the tribunal, the tribunal finds it difficult to avoid considering them. This occurs when assessing the meaning of the treaty in light of its object and purpose. In practice, preparatory works lead a tribunal to favor a more flexible interpretation. This can cause them to deviate from a strict textual interpretation. Article 31 of the Vienna Convention on the Law of Treaties prescribes this interpretation. As a result, the intention of the parties is rarely ignored in the interpretation of a treaty by a tribunal. • 3. Challenges to consistency in interpretation, • Under some treaties, jurisdiction for investor-State disputes is limited. It applies only to disputes arising from the interpretation and application of the treaty’s substantive standards. • Consistency in the interpretation of investment treaties is challenging. This occurs because investment tribunals are established ad hoc. They vary in their composition. Tribunals often rely on previous decisions of other tribunals. At the same time, they stress that they are not bound by previous cases. Some tribunals see it as their duty to contribute to consistency and certainty. • 4. Summary • In conclusion, interpreting investment treaties is a complex process. It involves referencing the Vienna Convention on the Law of Treaties. The interpretation process includes considering the object and purpose of the treaty and weighing the influence of preparatory works. Tribunals' varying approaches to interpretation, from restrictive to balanced, further contribute to the challenges of consistency.

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