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VIENNA CONVENTION ON THE LAW
OF TREATIES AND INTERPRETATION
OF TREATY IN INVESTMENT
DISPUTE ARBITRATION.
Onyeka Nwaigbo1
ABSTRACT: Interpretation as it seems has
always had a prominent and contentious place
in international adjudication, and its application has been further enhanced during the last few
decades with the expansion of the regulatory range of international law and the proliferation
of international judicial bodies. The importance attached to the interpretation of treaties
cannot be overemphasized, because it is of great importance that only the intent of a treaty is
activated. In such a diverse new world and the various ways the Vienna Convention on the Law
of Treaties has been applied towards the interpretation of treaties. Section 3 (Articles 31, 32
and 33) of this treaty covers the issue of interpretation and the various methods which shall be
applied during adjudication with respect to interpretation of treaties. It is necessary to consider
the various ways international tribunals have used this treaty in interpretation of various
bilateral treaties and trade agreements.
1
The author holds a Bachelor’s degree in Law. He is a member of the Nigerian bar. His main research and policy
interests are in Regulatory Compliance and Contracting in the Energy Industry. At the time of writing, he was a
postgraduate candidate in International Dispute Resolution and Management in the Extractive Industry at the
Centre for Energy, Petroleum, Mineral Law and Policy (CEPMLP), University of Dundee, Scotland. Email:
onyeka.nwaigbo@yahoo.com
2
Table of Contents
1. Introduction. .......................................................................................................................4
1.2 Approach and Methods to Treaty Interpretation Applied by Tribunals......................5
1.2.1. The Intent School.................................................................................................5
1.2.2. The Textualist School ..........................................................................................6
1.2.3. The Teleological School ......................................................................................6
1.2.4. The New Haven School .......................................................................................6
2. Brief Background on the Vienna Convention on the Law of Treaties ...............................7
3. Tribunal Approach to Treaty Interpretation .......................................................................8
3.2. Conclusion.................................................................................................................11
REFERENCES ........................................................................................................................12
3
LIST OF ABBREVIATIONS
BIT Bilateral Investment Treaty
CMS CMS Gas Transmission Company
ICSID International Centre for Settlement of Investment Disputes
ICJ International Court of Justice
ILC International Law Commission
TGN Transportadora de Gas del Norte
VCLT Vienna Convention on the Law of Treaties
4
1. Introduction.
“There is no part of the law of treaties which the text-writers approach with more trepidation
than the question of interpretation” – Lord McNair2
The importance of proper interpretation cannot be overemphasized. Language is limited and
can offer a multitude of ambiguity if the proper intended meaning is not given to particular
terms. Most international arbitral proceedings involving state parties, or investors and states,
feature disputes that concern the interpretation and meaning of treaty provision. This
occurrence is not only attributable to the imperfection of language, but also the fact that the
decisions in these proceedings are mainly determined by the interpretation and application of
treaties.3
The issue of treaty interpretation is not however a recent contemplation, even Grotius
dedicated a chapter to the modality of treaty interpretation which, when compared to recent
studies on interpretation, does not give the impression of being out of date. He stated that
“words are to be understood in their ordinary sense, if other implications are lacking”4
Section 3 of the Vienna Convention on the Law of Treaties (VCLT) provided for specific rules
with regards to the interpretation of treaties. At first glance, these provisions do not offer any
ambiguity and are clear as to their application. The International Court of Justice (ICJ) which
is the principal judicial organ of the United Nations has recognised that the Vienna rules are in
principle applicable to the interpretation of treaties.5
This proposition now constitutes a
statement of customary international law, with the consequence that the rules apply to any
treaty interpretation, under any body (both judicial and non-judicial) whether the states or
parties involved are signatories to the Vienna Convention or not.6
There has not been any
challenge to this need to have a unified rule of interpretation to the growing body of
international treaties. There has also been proliferation of international rules in the form of
Multilateral and Bilateral treaties. These have been instruments out of which numerous
international arbitrations have been spawned. In turn the jurisprudence from these cases has
not provided a particular pattern of interpretation, although they have provided a source for
understanding the process of interpretation.
While jurists have accepted the proposition that treaty interpretation should proceed from the
intention of the parties, they have however relied on different principles to achieve this task.7
This has resulted in legal uncertainty, lack of objectivity and an inability to predict the effect
certain treaty interpretation. Therefore, even with the universal application of Section 3 VCLT
(the Vienna Rules), there still does not exist a straight forward formula that ensures similar
result in the interpretation and application of treaties. The plain reality is that interpretation
remains an intellectual process that does not provide strict legal formulization.8
Due to the increasing need to obtain a most practical means of interpretation that activates the
true intent and purpose behind a treaty, scholars have come up with various concepts and
methods with which treaties should be interpreted. The four schools of treaty interpretation
have different analytical goals. The Intent School, Textualist School, Teleological Approach
2
McNair, The Law of Treaties (1961) at 364
3
Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland) Award of 24th
may
2005. This case is further discussed below.
4
Hugo Grotius [Huig de Groot] “on interpretation” De Jure Belli ac Pacis Book 2, Chapter xvi
5
The Namibia Case - ICJ Report (1971) at 47, Para 94
6
GabCikovo-Nagymaros Project (HungarylSlovakia), Judgment, I. C. J. Reports 1997, p. 7 Para 46
7
Martin Ris, Treaty Interpretation and ICJ Recourse to Travaux Préparatoires: Towards a Proposed Amendment
of Articles 31 and 32 of the Vienna Convention on the Law of Treaties, 14 B.C. Int'l & Comp. L. Rev. 111
(1991), http://lawdigitalcommons.bc.edu/iclr/vol14/iss1/6
8
E.S. Yambrusic, Treaty Interpretation: Theory and Reality 14 (1987) at 144
5
and the New Haven school.9
Treaty interpretation by tribunals is not exempted from this issue
of varied interpretation. Some tribunals have been credited with upholding the intentions of the
state parties to treaties, but have also been equally criticized for ignoring them. Most people
agree that the issue of treaty interpretation remains a deeply obscure and subjective process. It
is against this background I examine the process of treaty interpretation applied by arbitral
tribunals and the extent to which Section 3 VCLT has been applied. Whether applied strictly
or otherwise by tribunals and how much discretion these tribunals apply in treaty interpretation
when strict interpretation will do harm and the methods of interpretation offered by Section 3
VCLT.
1.2 Approach and Methods to Treaty Interpretation Applied by Tribunals
In the preparation of the draft articles which became the Vienna Convention Rules on Treaty
Interpretation, the International Law Commission (ILC) limited its approach to general
principles and rules. The convention does not therefore exclude other principles which are
compatible with these general rules. In the application of Articles 31 and 32, tribunals have in
various ways applied these varying methods of interpretation. Some of the conceptions on
treaty interpretation existed before the Vienna Convention; however they are still in some way
applied by tribunals. These are:
1.2.1. The Intent School
Sir Lauterpacht framed the doctrines of the intent school in the 1950 Draft Report of the
Institute of International Law (Draft Report).10
The Draft Report recommends that the
interpreter should first establish the intentions of the parties. Understanding these intentions
allows the interpreter to give the treaty the intended meaning.11
To determine the intentions of
the parties, the interpreter could rely on auxiliary sources such as travaux preparatoires12
, even
where the treaty is explicit. The textualist critique of this method by Fitzmaurice questions why
the intentions of the parties should not be obvious from the text alone.13
Fitzmaurice states that parties draft a treaty to express their intentions and that an interpreter
must therefore assume that the treaty in fact embodies their intentions. Accordingly, the
interpreter should resort to travaux preparatoires only in situations where the treaty is
unclear.14
This school's approach is inadequate when a treaty contains inconsistent provisions
and in the case of multilateral treaties, which the parties often join by accession without
participating in the negotiation of the treaty.15
9
Brijesh Nahrain Mehrish, Travaux Preparatoires as an Element in the Interpretation of Treaties, 11 Indian J.
INT'L L. 39 (1971) at 40
10
Hersch Lauterpatcht, Restrictive Interpretation and the Principle of Effectiveness in Interpretation of Treaties
Brit. YB Int'l L. 26 (1949): 48
11
Supra note 6 at Page 114
12
Travaux preparatoires, or preparatory work, are documents which precede the final text of a treaty and can take
various forms. They are akin to the legislative history of U.S. legislation. In this Comment, the term travaux
preparatoires subsumes all other terms which refer to preparatory work.
13
Fitzmaurice G .G, 'the Law and Procedure of the International Court of Justice: Treaty Interpretation and
Certain Other Treaty Points' (1951) 28 BYBIL 1 at 204-205
14
Bederman, David J. "Revivalist Canons and Treaty Interpretation." UCLA L. Rev.41 (1993): 953 at 970
15
R. P. Schaffer, Current Trends in Treaty Interpretation and the South African Approach, 7 AUSTL. Y.B.
INT'L L. 129, 130 (1981). at 131
6
1.2.2. The Textualist School
The textualist school aims to interpret a treaty principally by establishing the meaning of the
text.16
This is a more purist approach to treaty interpretation. The emphasis here is to give all
words and phrases their natural and ordinary meanings and to allow the text to reveal the
intentions of the contracting parties rather than to attribute a meaning to the text in the light of
the intentions of the parties. Fitzmaurice states that interpreters should examine the text of a
treaty, and not the intentions of the parties apart from the text, because it is the text that
manifests the intentions of the parties. Subsequently, the textualist interpreter gives effect to
the intentions of the parties by establishing the natural and ordinary meaning of the text.17
The
Textualist should only consult other materials to clarify the text, if there is an obscurity, or to
confirm the ordinary meaning of words as applied by the parties.
A tribunal may only resort to travaux preparatoires in this situation only to shed light on the
meaning of the text, not on the intentions of the parties apart from the text. Nevertheless, such
excessive attention to the words of a treaty without a consideration of the context will inevitably
lead to ambiguity in time, because language and words may change meaning, or world
application of the meaning. And even when the context is applied there is still the question of
how to define context! This approach will render some treaties inoperative because due to the
advancement of technology and commerce, tribunals are faced with situations that were not
envisaged by parties to the treaty being interpreted. A textualist with a purist tendency towards
treaty interpretation will end up doing harm if he doesn’t consider the intention of the parties
with respect to the new circumstances.
1.2.3. The Teleological School
The teleological school attempts to give weight to the object and purpose of a treaty.18
However
what is the “object” and “purpose” apart from the intent or the text? Article 19(a) of the 1935
Draft Convention on the Law of Treaties (Draft Convention) sets out the aspects which indicate
the object and purpose of a treaty.19
Most important among them are the historical background
of the treaty, the subsequent conduct of the parties, the circumstances surrounding the adoption
and interpretation of the treaty, and travaux preparatoires. The foremost goal of treaty
interpretation here is to ascertain the objects and purposes of the treaty and then to interpret the
treaty so as to give effect to those objects and purposes.20
1.2.4. The New Haven School
The New Haven school attempts to determine and give effect to the genuine shared
expectations of the parties, subject to overriding community policies.21
To this end, an
interpreter should examine all important indices of the expectations of the parties and of
overriding community policies.22
A treaty and its travaux preparatoires are thus equally
useable sources of interpretation. In an appraisal of the New Haven approach, Professor Leo
Gross has indicated the difficulty of interpreting ambiguous concepts as “genuine shared
16
Supra note 6 at page 114
17
Supra note 12 at 1-2.
18
Supra note 15 at 206
19
Supra note 8 at 51-52
20
Supra note 6 at Page 115
21
M.S. McDougal, H.D. Lasswell and J.C Miller, The Interpretation of Agreements and World Public Order
(1967).at 40
22
Supra note 6 at 115 - 116
7
expectations and overriding community policies.” He claims such a use will give rise to
vagueness in the interpretation process.23
2. Brief Background on the Vienna Convention on the Law of Treaties
The ILC, in its drafting of Section 3 of the Vienna Convention, seems to acknowledge that
none of the four schools of interpretation are entirely correct, in that their use in various
situations will be a matter of choice and application. The ILC worked from the basic
assumption that “the text must be presumed to be the authentic expression of the intentions of
the parties, and that, in consequence, the starting point and purpose of interpretation is to
explain the import of the text, not to investigate ab-initio the intentions of the parties.”24
Article
31 presents the prime sources of interpretation. These are; the treaty, the agreements made in
connection with the conclusion of the treaty, and any subsequent agreements and practices to
the extent that they mark an express understanding among the parties.
The title of article 31, "General rule of interpretation", indicates that these are equivalent
sources of interpretation available to interpreters.25
Interpretation under Article 31 focuses on
a treaty's ordinary meaning which is deemed to express the intentions of the parties. The
meaning must be consistent with the object and purpose of the treaty and its related documents.
Article 31(2) defines the text of a treaty as inclusive of the preamble and annexes, and states
that the context of a treaty for the purposes of interpretation shall comprise, in addition to this
'text', any collateral agreements relating to the treaty (which presumably might include even
oral agreements), provided that they were made by all the parties involved in the creation of
the treaty; or, in the case of an instrument made by only one or some of the parties, that it was
accepted by the other parties as an instrument related to the treaty.26
Article 31(4) specifies that a term can have a special meaning only if its proponent can show
that the term should have that special meaning. This method of interpretation is not exclusively
textualist because it takes into consideration the object and purpose of the treaty as well as
concurrent and subsequent related documents. Article 31, however, does not state or permit
primary consideration of supplementary means of interpretation such as travaux preparatoires;
this is covered by Article 32.27
Article 32 lists travaux preparatoires as a supplementary source of interpretation. The
interpreter may resort to travaux preparatoires when the import of the text is uncertain or
obscure, or where applying Article 31 would lead to a manifestly unreasonable result.28
This
formulation resounds the textualist views. The contemporary international legal community
thus presumably agrees that travaux preparatoires are only supplementary means of treaty
interpretation. Today there is slight, if any, dispute on the acceptability of resort to travaux
preparatoires, this is mainly because the time factor consideration in treaty interpretation
makes it important to view these preparatory documents so as to ascertain the intention of the
parties. It should be mentioned that Articles 31 and 32 of the Vienna Convention on the Law
of Treaties were not intended by the Commission to be an exclusive or exhaustive accounts of
the factors which might be taken into consideration in the interpretation of treaties.29
23
Gross, Treaty Interpretation: The Proper Role of an International Tribunal, Proceedings of the American
Society of International Law 108, 114 (1969).
24
Commentary of the International Law Commission YbILC 1964 Vol I1 p 56 para 13.
25
Mehrish, B. N. (India). Travaux Preparatoires as an Element in the Interpretation of Treaties,. Indian Journal
Of Internation Law note 1, at 62;
26
Supra note 6; at pg 118.
27
Supra note 6 at 118
28
Supra note 13 at 211
29
Yearbook of the International Law Commission. YbILC 1964 Vol ii p54, para 5.
8
3. Tribunal Approach to Treaty Interpretation
Due to the proliferation of treaties, there seems to be a limitless number of bodies that have
had a need to interpret treaty provisions, and this has been done with no form of uniformity.
Tribunals do realise that treaty interpretation would have an important and decisive bearing on
the final outcome of the cases. They have also been explicit in their reasons for following a
particular step in the process of interpretation.
In the Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/
Netherland), Award of 24th
May 2005, the point in issue was the allocation of cost of revival,
adaptation and modernization of a railway. The Iron Rhine is a railway linking the port of
Antwerp to the Rhine basin in Germany across Dutch territory. Belgium got the right of transit
over Dutch territory in a treaty from 1839 and demanded a reactivation of the railway in 1998.30
As they could not settle, the Netherlands and Belgium decided on arbitration. The Tribunal
rendered its Award on 24 May 2005. In this case, there was an extensive use of the Vienna
Rules. Here the tribunal had to give meaning to a treaty made in 1893, and also brought into
consideration the change in commerce and industry; it therefore applied an “evolutive
interpretation, which would ensure an application of the treaty that would be effective in terms
of its object and purpose.”
In this context a strict textualist application of the provisions will have done injustice to the
purpose of the treaty, simply because parties could not have foreseen the advances and changes
in commerce and technology.31
In its further application of Article 31 (3) (C) the tribunal noted
that development in environmental law was to be considered in the interpretation of that treaty.
It should be noted that the tribunal in this case sought to apply the intentions of the parties,
irrespective of the textual meaning derived from the treaty. This approach was in this case
necessary, as it would have been impossible to apply the treaty to modern day terms if it had
not been interpreted in an evolutive fashion.
In the ICSID Arbitral case between CMS Gas Transmission Company (CMS) (Claimant) and
the Republic of Argentina (Respondent)32
, the treaty that called for interpretation was the
Bilateral Investment Treaty (BIT) between Argentina and the United States. CMS, a US
corporation, owned a 30% share of Transportadora de Gas del Norte (TGN), an Argentinean
gas transportation company. At the time of making the investment, Argentina granted TGN the
right to calculate tariffs in US dollars and then convert them to pesos at the prevailing exchange
rate, and to amend tariffs every six months to reflect changes in inflation. These rights were
protected in the Argentinean law and in the License granted to TNG for the period of 35 years
(until 2027). At the time of Argentina’s economic emergency, the country unilaterally
terminated this agreement. Argentina momentarily suspended and then perpetually terminated
both TGN’s right to compute tariffs in US dollars and its right to make inflation modifications.
In its decision with respect to its jurisdiction, the tribunal had to determine the true meaning of
an “investor.”33
Based on a restrictive textual interpretation of the Argentina – USA BIT,
Argentina sought to limit the definition of “investment” by removing all forms of indirect
30
Hague Justice Journal, Volume 1, No 1; 2006. Page 1 (This article was previously published in the Hague
Yearbook of International Law / Annuaire de La Haye de Droit International, Volume 18 (2005), p. 3-22.)
31
Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland) Award of 24th
may
2005 at para 80
32
Case No. ARB/01/8
33
ICSID Arbitration - CMS Gas Transmission Company (Claimant) and the Republic of Argentina
(Respondent) Case No. ARB/01/8 - Decision of the Tribunal on Objections to Jurisdiction
9
investments. The tribunal stated that “[s]uch interpretation would not allow for claims
connected to damage suffered by the corporate entity.”34
Owing to the existing circumstances,
the ICSID tribunal decided that CMS is an investor, as intended by the members to the BIT.35
Such a restrictive interpretation, as suggested by Argentina, will render the treaty inoperative.
A similar case was the Arbitral case of Rosinvest v. the Russian Federation under the
Arbitration Institute of Stockholm Chamber of Commerce. This involved the BIT between the
UK and Russia and the unfair treatment by the Russian Federation of the Yukos Corporation.
The Vienna Convention was applied. The tribunal here also had the need to define the term
“investment” and who an investor was in light of the participation agreement and the BIT. It
stated that it was bound to apply the provisions of Article 31 VCLT.
By a strict definition of the term, an investor would have been a person who received the
dividends of an investment. In this particular case Rosinvest was not the recipient of the
investment; it held it as a trustee for another company (Eliot International). However in its
interpretation, the tribunal stated that it was prevented from imposing a stricter interpretation
of the BIT in light of its very wide drafting.36
This may not be an expression of the true intention
of the parties to the treaty. In my opinion, the tribunal in this case sought to be fair by giving
such an interpretation to the BIT, because in the relevant period of time, Rosinvest was not an
“investor” by the virtue of the definition of the word. If it was the intention of the parties, they
would have given such a wide definition to the term.
Applying such a wide interpretation will offer protection to people that do not qualify under
the BIT, which would be a derogation of the purpose and intent of the treaty. The tribunals
have also applied the Most Favoured Nations Clause in BITs without any known limits. By
doing so, they apply terms to agreements that may not have been intended by the parties. This
process by tribunals may not lead to much problem in the future because they are not bound by
precedent, but one can easily see that such an interpretation of this provision may lead to a shift
from the original intention of the parties.
I would also like to state briefly the ICJ approach to evolutive treaty interpretation, which seems
to be of similar approach as that of arbitral tribunals37
. The ICJ delivered its judgment in
the Costa Rica v. Nicaragua38
case judgment of 13th
July 2009, concerning navigational and
related rights on the river San Juan. The river San Juan is on the border of Costa Rica and
Nicaragua. The border of the river is set by a treaty; the entire river belongs to Nicaragua as
sovereign.
The issue raised by the case is as follows; “what are the navigational and related rights on the
river that Costa Rica and its riparian communities derive, based on the terms of the 1858 Treaty
of Limits between Costa Rica and Nicaragua?” Article VI of the Treaty, provides Costa Rica
a perpetual right of free navigation “for the purpose of commerce”. From Nicaragua’s point of
view, for purposes of interpretation, “commerce” covers solely the purchase and sale of
merchandise, of physical goods, and ignores all services, such as passenger transport. Thus, in
34
Ibid para 58
35
Ibid Para 63 - 65
36
SCC Arbitration (079/2005) Rosinvest v Russia – Final Judgment Para 323
37
The issue of distinction between “application” and “interpretation” cannot be discussed here but they also
play an important role in understanding these issues.
38
http://www.icj-cij.org/docket/files/133/15321.pdf acquired on the 20th
march 2013
10
Nicaragua’s view, it is the 1858 meaning of the word ‘commerce’, not its 2009 meaning, which
was applicable. The Court disagreed:
“…there are situations in which the parties’ intent upon conclusion of the treaty was,
or may be presumed to have been, to give the terms used ⎯ or some of them ⎯ a meaning
or content capable of evolving, not one fixed once and for all, so as to make allowance
for, among other things, developments in international law. In such instances it is
indeed in order to respect the parties’ common intention at the time the treaty was
concluded, not to depart from it, that account should be taken of the meaning acquired
by the terms in question upon each occasion on which the treaty is to be applied.”39
Even if the term “commerce” meant only trade in goods in 1858, stated the Court, it also means
exchange of services, for example transportation and tourism, in 2009, and this was the
meaning that was used. Of course, the peril with such reasoning is that in 2050 or 2100 or
whenever the word “commerce” might lose any relation to the meaning of the word today or
in 1858.40
39
Ibid Para 64
40
Milanovic, M., The ICJ and Evolutionary Treaty Interpretation, European Journal of International Law (July
2009), http://www.ejiltalk.org/the-icj-and-evolutionary-treaty-interpretation/ obtained on 03/05/2013.
11
3.2. Conclusion
The tribunals have only applied a strict textual interpretation of a treaty when such an
interpretation is in the spirit and intention of the parties to the treaty. Section 3 of the VCLT
provides general rules of interpretation. They are not as strict as domestic rules. They give
tribunal enough independence and discretion in the process of interpretation.
This has its advantages as tribunals can apply treaty provisions and avoid ambiguity caused by
strict interpretations. It also has its disadvantages: tribunals may sometimes give a meaning to
a treaty which was not envisaged or intended by the parties who created it. There is also the
issue of lack of uniformity in the process of treaty interpretation. This is not however the case
with respect to most ICSID Arbitral cases.
These have shown a high level of consistency in interpretation of similar provisions. In its
determination of the true interpretation of “shareholder protection” and “investor protection”
under various bilateral treaties, the tribunal has been consistent in its interpretation that it did
rely on such cases as Lanco v. Argentina,41
Genin v. Estonia,42
the Aguas or Vivendi Award43
and Annulment.44
This consistence is not evident in ad-hoc arbitral proceedings. The general
provision of the customary international law rules of interpretation in Section 3, VCLT has
therefore allowed some discretion in the process of interpretation. So far the only common in
the process of interpretation is the need to give such a meaning to terms that will keep a treaty
active and non-ambiguous. Interpretation therefore remains “an art, not an exact science”45
41
Preliminary Decision of the ICSID Tribunal of December 8, 1998.
42
ICSID Award of June 25, 2001.
43
Compañía de Aguas del Aconquija et al. v. Argentina, ICSID Award of November 21, 2000.
44
Vivendi, ICSID Annulment Decision of July 3, 2002.
45
International Law omission, Commentary to draft article 27 and 28 Para. 4, YILC (1966-II) AT 218, reprinted
in United Nations Conference on the Law of Treaties, Official Records, and Documents of the Conference
(1971), at 38
12
REFERENCES
PRIMARY SOURCES
International Decisions
Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland)
Award of 24th
May 2005.
Brijesh Nahrain Mehrish, Travaux Preparatoires as an Element in the Interpretation of
Treaties, 11 Indian J. INT'L L. 39 (1971) at 40
Compañía de Aguas del Aconquija et al. v. Argentina, ICSID Award of November 21, 2000.
GabCikovo-Nagymaros Project (HungarylSlovakia), Judgment, I. C. J. Reports 1997, p. 7
Para 46
ICSID Arbitration - CMS Gas Transmission Company (Claimant) and the Republic of
Argentina (Respondent) Case No. ARB/01/8 - Decision of the Tribunal on Objections to
Jurisdiction
SCC Arbitration (079/2005) Rosinvest v Russia – Final Judgment Para 323
The Namibia Case - ICJ Report (1971) at 47, Para 94
Vivendi, ICSID Annulment Decision of July 3, 2002
SECONDARY SOURCES
Books
Bederman, D. J. (1993). Revivalist Canons and Treaty Interpretation. UCLA Law Review,
970.
Fitzmaurice, G. G. (1957). The Law and Procedure of the International Court of Justice 1951-
4: Treaty Interpretation and Other Treaty Points' (1957). british Yearbook of
International Law, p. 203.
Groot, H. G. (1925). De Jure Belli ac Pacis Book 2, Chapter xvi. Paris.
Gross, L. (1969). Treaty Interpretation: The Proper Role of an International Tribunal.
Proceedings of the American Society of International Law at Its Annual Meeting
(1921-1969). Vol. 63. American Society of International Law, 1969.
Lauterpatcht, H. (1948). Restrictive Interpretation and the Principle of Effectiveness in
Interpretation of Treaties. Brit. YB Int'l L..
13
McDougal, M. S. (1967). The interpretation of international agreements and world public
order. New Haven Press.
McNair, B. A. (1961). the Law of Treaties. Oxford: Clarendon Press.
Mehrish, B. N. (India). Travaux Preparatoires as an Element in the Interpretation of Treaties,.
Indian Journal Of Internation Law.
Schaffer, R. P. (1981). Current Trends in Treaty Interpretation and the South African
Approach. Year Book of International Law.
Yambrusic, E. (1987). Treaty Interpretation: Theory and Reality. University Press of
America.
Journals
Hague Justice Journal, Volume 1, No 1; 2006
International Law omission, Commentary to draft article 27 and 28 Para. 4, YILC (1966-II)
Milanovic, M., The ICJ and Evolutionary Treaty Interpretation, European Journal of
International Law (July 2009), http://www.ejiltalk.org/the-icj-and-evolutionary-treaty-
interpretation/ obtained on 03/05/2013.
Ris, M. Treaty Interpretation and ICJ Recourse to Travaux Préparatoires: Towards a
Proposed Amendment of Articles 31 and 32 of the Vienna Convention on the Law of
Treaties, 14 B.C. Int'l & Comp. L. Rev. 111 (1991),
http://lawdigitalcommons.bc.edu/iclr/vol14/iss1/6
Yearbook of the International Law Commission. YbILC 1964 Vol ii p54, para 5.

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Writing Sample 1 - Onyekachukwu Nwaigbo

  • 1. 1 VIENNA CONVENTION ON THE LAW OF TREATIES AND INTERPRETATION OF TREATY IN INVESTMENT DISPUTE ARBITRATION. Onyeka Nwaigbo1 ABSTRACT: Interpretation as it seems has always had a prominent and contentious place in international adjudication, and its application has been further enhanced during the last few decades with the expansion of the regulatory range of international law and the proliferation of international judicial bodies. The importance attached to the interpretation of treaties cannot be overemphasized, because it is of great importance that only the intent of a treaty is activated. In such a diverse new world and the various ways the Vienna Convention on the Law of Treaties has been applied towards the interpretation of treaties. Section 3 (Articles 31, 32 and 33) of this treaty covers the issue of interpretation and the various methods which shall be applied during adjudication with respect to interpretation of treaties. It is necessary to consider the various ways international tribunals have used this treaty in interpretation of various bilateral treaties and trade agreements. 1 The author holds a Bachelor’s degree in Law. He is a member of the Nigerian bar. His main research and policy interests are in Regulatory Compliance and Contracting in the Energy Industry. At the time of writing, he was a postgraduate candidate in International Dispute Resolution and Management in the Extractive Industry at the Centre for Energy, Petroleum, Mineral Law and Policy (CEPMLP), University of Dundee, Scotland. Email: onyeka.nwaigbo@yahoo.com
  • 2. 2 Table of Contents 1. Introduction. .......................................................................................................................4 1.2 Approach and Methods to Treaty Interpretation Applied by Tribunals......................5 1.2.1. The Intent School.................................................................................................5 1.2.2. The Textualist School ..........................................................................................6 1.2.3. The Teleological School ......................................................................................6 1.2.4. The New Haven School .......................................................................................6 2. Brief Background on the Vienna Convention on the Law of Treaties ...............................7 3. Tribunal Approach to Treaty Interpretation .......................................................................8 3.2. Conclusion.................................................................................................................11 REFERENCES ........................................................................................................................12
  • 3. 3 LIST OF ABBREVIATIONS BIT Bilateral Investment Treaty CMS CMS Gas Transmission Company ICSID International Centre for Settlement of Investment Disputes ICJ International Court of Justice ILC International Law Commission TGN Transportadora de Gas del Norte VCLT Vienna Convention on the Law of Treaties
  • 4. 4 1. Introduction. “There is no part of the law of treaties which the text-writers approach with more trepidation than the question of interpretation” – Lord McNair2 The importance of proper interpretation cannot be overemphasized. Language is limited and can offer a multitude of ambiguity if the proper intended meaning is not given to particular terms. Most international arbitral proceedings involving state parties, or investors and states, feature disputes that concern the interpretation and meaning of treaty provision. This occurrence is not only attributable to the imperfection of language, but also the fact that the decisions in these proceedings are mainly determined by the interpretation and application of treaties.3 The issue of treaty interpretation is not however a recent contemplation, even Grotius dedicated a chapter to the modality of treaty interpretation which, when compared to recent studies on interpretation, does not give the impression of being out of date. He stated that “words are to be understood in their ordinary sense, if other implications are lacking”4 Section 3 of the Vienna Convention on the Law of Treaties (VCLT) provided for specific rules with regards to the interpretation of treaties. At first glance, these provisions do not offer any ambiguity and are clear as to their application. The International Court of Justice (ICJ) which is the principal judicial organ of the United Nations has recognised that the Vienna rules are in principle applicable to the interpretation of treaties.5 This proposition now constitutes a statement of customary international law, with the consequence that the rules apply to any treaty interpretation, under any body (both judicial and non-judicial) whether the states or parties involved are signatories to the Vienna Convention or not.6 There has not been any challenge to this need to have a unified rule of interpretation to the growing body of international treaties. There has also been proliferation of international rules in the form of Multilateral and Bilateral treaties. These have been instruments out of which numerous international arbitrations have been spawned. In turn the jurisprudence from these cases has not provided a particular pattern of interpretation, although they have provided a source for understanding the process of interpretation. While jurists have accepted the proposition that treaty interpretation should proceed from the intention of the parties, they have however relied on different principles to achieve this task.7 This has resulted in legal uncertainty, lack of objectivity and an inability to predict the effect certain treaty interpretation. Therefore, even with the universal application of Section 3 VCLT (the Vienna Rules), there still does not exist a straight forward formula that ensures similar result in the interpretation and application of treaties. The plain reality is that interpretation remains an intellectual process that does not provide strict legal formulization.8 Due to the increasing need to obtain a most practical means of interpretation that activates the true intent and purpose behind a treaty, scholars have come up with various concepts and methods with which treaties should be interpreted. The four schools of treaty interpretation have different analytical goals. The Intent School, Textualist School, Teleological Approach 2 McNair, The Law of Treaties (1961) at 364 3 Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland) Award of 24th may 2005. This case is further discussed below. 4 Hugo Grotius [Huig de Groot] “on interpretation” De Jure Belli ac Pacis Book 2, Chapter xvi 5 The Namibia Case - ICJ Report (1971) at 47, Para 94 6 GabCikovo-Nagymaros Project (HungarylSlovakia), Judgment, I. C. J. Reports 1997, p. 7 Para 46 7 Martin Ris, Treaty Interpretation and ICJ Recourse to Travaux Préparatoires: Towards a Proposed Amendment of Articles 31 and 32 of the Vienna Convention on the Law of Treaties, 14 B.C. Int'l & Comp. L. Rev. 111 (1991), http://lawdigitalcommons.bc.edu/iclr/vol14/iss1/6 8 E.S. Yambrusic, Treaty Interpretation: Theory and Reality 14 (1987) at 144
  • 5. 5 and the New Haven school.9 Treaty interpretation by tribunals is not exempted from this issue of varied interpretation. Some tribunals have been credited with upholding the intentions of the state parties to treaties, but have also been equally criticized for ignoring them. Most people agree that the issue of treaty interpretation remains a deeply obscure and subjective process. It is against this background I examine the process of treaty interpretation applied by arbitral tribunals and the extent to which Section 3 VCLT has been applied. Whether applied strictly or otherwise by tribunals and how much discretion these tribunals apply in treaty interpretation when strict interpretation will do harm and the methods of interpretation offered by Section 3 VCLT. 1.2 Approach and Methods to Treaty Interpretation Applied by Tribunals In the preparation of the draft articles which became the Vienna Convention Rules on Treaty Interpretation, the International Law Commission (ILC) limited its approach to general principles and rules. The convention does not therefore exclude other principles which are compatible with these general rules. In the application of Articles 31 and 32, tribunals have in various ways applied these varying methods of interpretation. Some of the conceptions on treaty interpretation existed before the Vienna Convention; however they are still in some way applied by tribunals. These are: 1.2.1. The Intent School Sir Lauterpacht framed the doctrines of the intent school in the 1950 Draft Report of the Institute of International Law (Draft Report).10 The Draft Report recommends that the interpreter should first establish the intentions of the parties. Understanding these intentions allows the interpreter to give the treaty the intended meaning.11 To determine the intentions of the parties, the interpreter could rely on auxiliary sources such as travaux preparatoires12 , even where the treaty is explicit. The textualist critique of this method by Fitzmaurice questions why the intentions of the parties should not be obvious from the text alone.13 Fitzmaurice states that parties draft a treaty to express their intentions and that an interpreter must therefore assume that the treaty in fact embodies their intentions. Accordingly, the interpreter should resort to travaux preparatoires only in situations where the treaty is unclear.14 This school's approach is inadequate when a treaty contains inconsistent provisions and in the case of multilateral treaties, which the parties often join by accession without participating in the negotiation of the treaty.15 9 Brijesh Nahrain Mehrish, Travaux Preparatoires as an Element in the Interpretation of Treaties, 11 Indian J. INT'L L. 39 (1971) at 40 10 Hersch Lauterpatcht, Restrictive Interpretation and the Principle of Effectiveness in Interpretation of Treaties Brit. YB Int'l L. 26 (1949): 48 11 Supra note 6 at Page 114 12 Travaux preparatoires, or preparatory work, are documents which precede the final text of a treaty and can take various forms. They are akin to the legislative history of U.S. legislation. In this Comment, the term travaux preparatoires subsumes all other terms which refer to preparatory work. 13 Fitzmaurice G .G, 'the Law and Procedure of the International Court of Justice: Treaty Interpretation and Certain Other Treaty Points' (1951) 28 BYBIL 1 at 204-205 14 Bederman, David J. "Revivalist Canons and Treaty Interpretation." UCLA L. Rev.41 (1993): 953 at 970 15 R. P. Schaffer, Current Trends in Treaty Interpretation and the South African Approach, 7 AUSTL. Y.B. INT'L L. 129, 130 (1981). at 131
  • 6. 6 1.2.2. The Textualist School The textualist school aims to interpret a treaty principally by establishing the meaning of the text.16 This is a more purist approach to treaty interpretation. The emphasis here is to give all words and phrases their natural and ordinary meanings and to allow the text to reveal the intentions of the contracting parties rather than to attribute a meaning to the text in the light of the intentions of the parties. Fitzmaurice states that interpreters should examine the text of a treaty, and not the intentions of the parties apart from the text, because it is the text that manifests the intentions of the parties. Subsequently, the textualist interpreter gives effect to the intentions of the parties by establishing the natural and ordinary meaning of the text.17 The Textualist should only consult other materials to clarify the text, if there is an obscurity, or to confirm the ordinary meaning of words as applied by the parties. A tribunal may only resort to travaux preparatoires in this situation only to shed light on the meaning of the text, not on the intentions of the parties apart from the text. Nevertheless, such excessive attention to the words of a treaty without a consideration of the context will inevitably lead to ambiguity in time, because language and words may change meaning, or world application of the meaning. And even when the context is applied there is still the question of how to define context! This approach will render some treaties inoperative because due to the advancement of technology and commerce, tribunals are faced with situations that were not envisaged by parties to the treaty being interpreted. A textualist with a purist tendency towards treaty interpretation will end up doing harm if he doesn’t consider the intention of the parties with respect to the new circumstances. 1.2.3. The Teleological School The teleological school attempts to give weight to the object and purpose of a treaty.18 However what is the “object” and “purpose” apart from the intent or the text? Article 19(a) of the 1935 Draft Convention on the Law of Treaties (Draft Convention) sets out the aspects which indicate the object and purpose of a treaty.19 Most important among them are the historical background of the treaty, the subsequent conduct of the parties, the circumstances surrounding the adoption and interpretation of the treaty, and travaux preparatoires. The foremost goal of treaty interpretation here is to ascertain the objects and purposes of the treaty and then to interpret the treaty so as to give effect to those objects and purposes.20 1.2.4. The New Haven School The New Haven school attempts to determine and give effect to the genuine shared expectations of the parties, subject to overriding community policies.21 To this end, an interpreter should examine all important indices of the expectations of the parties and of overriding community policies.22 A treaty and its travaux preparatoires are thus equally useable sources of interpretation. In an appraisal of the New Haven approach, Professor Leo Gross has indicated the difficulty of interpreting ambiguous concepts as “genuine shared 16 Supra note 6 at page 114 17 Supra note 12 at 1-2. 18 Supra note 15 at 206 19 Supra note 8 at 51-52 20 Supra note 6 at Page 115 21 M.S. McDougal, H.D. Lasswell and J.C Miller, The Interpretation of Agreements and World Public Order (1967).at 40 22 Supra note 6 at 115 - 116
  • 7. 7 expectations and overriding community policies.” He claims such a use will give rise to vagueness in the interpretation process.23 2. Brief Background on the Vienna Convention on the Law of Treaties The ILC, in its drafting of Section 3 of the Vienna Convention, seems to acknowledge that none of the four schools of interpretation are entirely correct, in that their use in various situations will be a matter of choice and application. The ILC worked from the basic assumption that “the text must be presumed to be the authentic expression of the intentions of the parties, and that, in consequence, the starting point and purpose of interpretation is to explain the import of the text, not to investigate ab-initio the intentions of the parties.”24 Article 31 presents the prime sources of interpretation. These are; the treaty, the agreements made in connection with the conclusion of the treaty, and any subsequent agreements and practices to the extent that they mark an express understanding among the parties. The title of article 31, "General rule of interpretation", indicates that these are equivalent sources of interpretation available to interpreters.25 Interpretation under Article 31 focuses on a treaty's ordinary meaning which is deemed to express the intentions of the parties. The meaning must be consistent with the object and purpose of the treaty and its related documents. Article 31(2) defines the text of a treaty as inclusive of the preamble and annexes, and states that the context of a treaty for the purposes of interpretation shall comprise, in addition to this 'text', any collateral agreements relating to the treaty (which presumably might include even oral agreements), provided that they were made by all the parties involved in the creation of the treaty; or, in the case of an instrument made by only one or some of the parties, that it was accepted by the other parties as an instrument related to the treaty.26 Article 31(4) specifies that a term can have a special meaning only if its proponent can show that the term should have that special meaning. This method of interpretation is not exclusively textualist because it takes into consideration the object and purpose of the treaty as well as concurrent and subsequent related documents. Article 31, however, does not state or permit primary consideration of supplementary means of interpretation such as travaux preparatoires; this is covered by Article 32.27 Article 32 lists travaux preparatoires as a supplementary source of interpretation. The interpreter may resort to travaux preparatoires when the import of the text is uncertain or obscure, or where applying Article 31 would lead to a manifestly unreasonable result.28 This formulation resounds the textualist views. The contemporary international legal community thus presumably agrees that travaux preparatoires are only supplementary means of treaty interpretation. Today there is slight, if any, dispute on the acceptability of resort to travaux preparatoires, this is mainly because the time factor consideration in treaty interpretation makes it important to view these preparatory documents so as to ascertain the intention of the parties. It should be mentioned that Articles 31 and 32 of the Vienna Convention on the Law of Treaties were not intended by the Commission to be an exclusive or exhaustive accounts of the factors which might be taken into consideration in the interpretation of treaties.29 23 Gross, Treaty Interpretation: The Proper Role of an International Tribunal, Proceedings of the American Society of International Law 108, 114 (1969). 24 Commentary of the International Law Commission YbILC 1964 Vol I1 p 56 para 13. 25 Mehrish, B. N. (India). Travaux Preparatoires as an Element in the Interpretation of Treaties,. Indian Journal Of Internation Law note 1, at 62; 26 Supra note 6; at pg 118. 27 Supra note 6 at 118 28 Supra note 13 at 211 29 Yearbook of the International Law Commission. YbILC 1964 Vol ii p54, para 5.
  • 8. 8 3. Tribunal Approach to Treaty Interpretation Due to the proliferation of treaties, there seems to be a limitless number of bodies that have had a need to interpret treaty provisions, and this has been done with no form of uniformity. Tribunals do realise that treaty interpretation would have an important and decisive bearing on the final outcome of the cases. They have also been explicit in their reasons for following a particular step in the process of interpretation. In the Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland), Award of 24th May 2005, the point in issue was the allocation of cost of revival, adaptation and modernization of a railway. The Iron Rhine is a railway linking the port of Antwerp to the Rhine basin in Germany across Dutch territory. Belgium got the right of transit over Dutch territory in a treaty from 1839 and demanded a reactivation of the railway in 1998.30 As they could not settle, the Netherlands and Belgium decided on arbitration. The Tribunal rendered its Award on 24 May 2005. In this case, there was an extensive use of the Vienna Rules. Here the tribunal had to give meaning to a treaty made in 1893, and also brought into consideration the change in commerce and industry; it therefore applied an “evolutive interpretation, which would ensure an application of the treaty that would be effective in terms of its object and purpose.” In this context a strict textualist application of the provisions will have done injustice to the purpose of the treaty, simply because parties could not have foreseen the advances and changes in commerce and technology.31 In its further application of Article 31 (3) (C) the tribunal noted that development in environmental law was to be considered in the interpretation of that treaty. It should be noted that the tribunal in this case sought to apply the intentions of the parties, irrespective of the textual meaning derived from the treaty. This approach was in this case necessary, as it would have been impossible to apply the treaty to modern day terms if it had not been interpreted in an evolutive fashion. In the ICSID Arbitral case between CMS Gas Transmission Company (CMS) (Claimant) and the Republic of Argentina (Respondent)32 , the treaty that called for interpretation was the Bilateral Investment Treaty (BIT) between Argentina and the United States. CMS, a US corporation, owned a 30% share of Transportadora de Gas del Norte (TGN), an Argentinean gas transportation company. At the time of making the investment, Argentina granted TGN the right to calculate tariffs in US dollars and then convert them to pesos at the prevailing exchange rate, and to amend tariffs every six months to reflect changes in inflation. These rights were protected in the Argentinean law and in the License granted to TNG for the period of 35 years (until 2027). At the time of Argentina’s economic emergency, the country unilaterally terminated this agreement. Argentina momentarily suspended and then perpetually terminated both TGN’s right to compute tariffs in US dollars and its right to make inflation modifications. In its decision with respect to its jurisdiction, the tribunal had to determine the true meaning of an “investor.”33 Based on a restrictive textual interpretation of the Argentina – USA BIT, Argentina sought to limit the definition of “investment” by removing all forms of indirect 30 Hague Justice Journal, Volume 1, No 1; 2006. Page 1 (This article was previously published in the Hague Yearbook of International Law / Annuaire de La Haye de Droit International, Volume 18 (2005), p. 3-22.) 31 Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland) Award of 24th may 2005 at para 80 32 Case No. ARB/01/8 33 ICSID Arbitration - CMS Gas Transmission Company (Claimant) and the Republic of Argentina (Respondent) Case No. ARB/01/8 - Decision of the Tribunal on Objections to Jurisdiction
  • 9. 9 investments. The tribunal stated that “[s]uch interpretation would not allow for claims connected to damage suffered by the corporate entity.”34 Owing to the existing circumstances, the ICSID tribunal decided that CMS is an investor, as intended by the members to the BIT.35 Such a restrictive interpretation, as suggested by Argentina, will render the treaty inoperative. A similar case was the Arbitral case of Rosinvest v. the Russian Federation under the Arbitration Institute of Stockholm Chamber of Commerce. This involved the BIT between the UK and Russia and the unfair treatment by the Russian Federation of the Yukos Corporation. The Vienna Convention was applied. The tribunal here also had the need to define the term “investment” and who an investor was in light of the participation agreement and the BIT. It stated that it was bound to apply the provisions of Article 31 VCLT. By a strict definition of the term, an investor would have been a person who received the dividends of an investment. In this particular case Rosinvest was not the recipient of the investment; it held it as a trustee for another company (Eliot International). However in its interpretation, the tribunal stated that it was prevented from imposing a stricter interpretation of the BIT in light of its very wide drafting.36 This may not be an expression of the true intention of the parties to the treaty. In my opinion, the tribunal in this case sought to be fair by giving such an interpretation to the BIT, because in the relevant period of time, Rosinvest was not an “investor” by the virtue of the definition of the word. If it was the intention of the parties, they would have given such a wide definition to the term. Applying such a wide interpretation will offer protection to people that do not qualify under the BIT, which would be a derogation of the purpose and intent of the treaty. The tribunals have also applied the Most Favoured Nations Clause in BITs without any known limits. By doing so, they apply terms to agreements that may not have been intended by the parties. This process by tribunals may not lead to much problem in the future because they are not bound by precedent, but one can easily see that such an interpretation of this provision may lead to a shift from the original intention of the parties. I would also like to state briefly the ICJ approach to evolutive treaty interpretation, which seems to be of similar approach as that of arbitral tribunals37 . The ICJ delivered its judgment in the Costa Rica v. Nicaragua38 case judgment of 13th July 2009, concerning navigational and related rights on the river San Juan. The river San Juan is on the border of Costa Rica and Nicaragua. The border of the river is set by a treaty; the entire river belongs to Nicaragua as sovereign. The issue raised by the case is as follows; “what are the navigational and related rights on the river that Costa Rica and its riparian communities derive, based on the terms of the 1858 Treaty of Limits between Costa Rica and Nicaragua?” Article VI of the Treaty, provides Costa Rica a perpetual right of free navigation “for the purpose of commerce”. From Nicaragua’s point of view, for purposes of interpretation, “commerce” covers solely the purchase and sale of merchandise, of physical goods, and ignores all services, such as passenger transport. Thus, in 34 Ibid para 58 35 Ibid Para 63 - 65 36 SCC Arbitration (079/2005) Rosinvest v Russia – Final Judgment Para 323 37 The issue of distinction between “application” and “interpretation” cannot be discussed here but they also play an important role in understanding these issues. 38 http://www.icj-cij.org/docket/files/133/15321.pdf acquired on the 20th march 2013
  • 10. 10 Nicaragua’s view, it is the 1858 meaning of the word ‘commerce’, not its 2009 meaning, which was applicable. The Court disagreed: “…there are situations in which the parties’ intent upon conclusion of the treaty was, or may be presumed to have been, to give the terms used ⎯ or some of them ⎯ a meaning or content capable of evolving, not one fixed once and for all, so as to make allowance for, among other things, developments in international law. In such instances it is indeed in order to respect the parties’ common intention at the time the treaty was concluded, not to depart from it, that account should be taken of the meaning acquired by the terms in question upon each occasion on which the treaty is to be applied.”39 Even if the term “commerce” meant only trade in goods in 1858, stated the Court, it also means exchange of services, for example transportation and tourism, in 2009, and this was the meaning that was used. Of course, the peril with such reasoning is that in 2050 or 2100 or whenever the word “commerce” might lose any relation to the meaning of the word today or in 1858.40 39 Ibid Para 64 40 Milanovic, M., The ICJ and Evolutionary Treaty Interpretation, European Journal of International Law (July 2009), http://www.ejiltalk.org/the-icj-and-evolutionary-treaty-interpretation/ obtained on 03/05/2013.
  • 11. 11 3.2. Conclusion The tribunals have only applied a strict textual interpretation of a treaty when such an interpretation is in the spirit and intention of the parties to the treaty. Section 3 of the VCLT provides general rules of interpretation. They are not as strict as domestic rules. They give tribunal enough independence and discretion in the process of interpretation. This has its advantages as tribunals can apply treaty provisions and avoid ambiguity caused by strict interpretations. It also has its disadvantages: tribunals may sometimes give a meaning to a treaty which was not envisaged or intended by the parties who created it. There is also the issue of lack of uniformity in the process of treaty interpretation. This is not however the case with respect to most ICSID Arbitral cases. These have shown a high level of consistency in interpretation of similar provisions. In its determination of the true interpretation of “shareholder protection” and “investor protection” under various bilateral treaties, the tribunal has been consistent in its interpretation that it did rely on such cases as Lanco v. Argentina,41 Genin v. Estonia,42 the Aguas or Vivendi Award43 and Annulment.44 This consistence is not evident in ad-hoc arbitral proceedings. The general provision of the customary international law rules of interpretation in Section 3, VCLT has therefore allowed some discretion in the process of interpretation. So far the only common in the process of interpretation is the need to give such a meaning to terms that will keep a treaty active and non-ambiguous. Interpretation therefore remains “an art, not an exact science”45 41 Preliminary Decision of the ICSID Tribunal of December 8, 1998. 42 ICSID Award of June 25, 2001. 43 Compañía de Aguas del Aconquija et al. v. Argentina, ICSID Award of November 21, 2000. 44 Vivendi, ICSID Annulment Decision of July 3, 2002. 45 International Law omission, Commentary to draft article 27 and 28 Para. 4, YILC (1966-II) AT 218, reprinted in United Nations Conference on the Law of Treaties, Official Records, and Documents of the Conference (1971), at 38
  • 12. 12 REFERENCES PRIMARY SOURCES International Decisions Arbitration Award regarding the Iron Rhine (Ijzeren Rijn) Railway (Belgium/ Netherland) Award of 24th May 2005. Brijesh Nahrain Mehrish, Travaux Preparatoires as an Element in the Interpretation of Treaties, 11 Indian J. INT'L L. 39 (1971) at 40 Compañía de Aguas del Aconquija et al. v. Argentina, ICSID Award of November 21, 2000. GabCikovo-Nagymaros Project (HungarylSlovakia), Judgment, I. C. J. Reports 1997, p. 7 Para 46 ICSID Arbitration - CMS Gas Transmission Company (Claimant) and the Republic of Argentina (Respondent) Case No. ARB/01/8 - Decision of the Tribunal on Objections to Jurisdiction SCC Arbitration (079/2005) Rosinvest v Russia – Final Judgment Para 323 The Namibia Case - ICJ Report (1971) at 47, Para 94 Vivendi, ICSID Annulment Decision of July 3, 2002 SECONDARY SOURCES Books Bederman, D. J. (1993). Revivalist Canons and Treaty Interpretation. UCLA Law Review, 970. Fitzmaurice, G. G. (1957). The Law and Procedure of the International Court of Justice 1951- 4: Treaty Interpretation and Other Treaty Points' (1957). british Yearbook of International Law, p. 203. Groot, H. G. (1925). De Jure Belli ac Pacis Book 2, Chapter xvi. Paris. Gross, L. (1969). Treaty Interpretation: The Proper Role of an International Tribunal. Proceedings of the American Society of International Law at Its Annual Meeting (1921-1969). Vol. 63. American Society of International Law, 1969. Lauterpatcht, H. (1948). Restrictive Interpretation and the Principle of Effectiveness in Interpretation of Treaties. Brit. YB Int'l L..
  • 13. 13 McDougal, M. S. (1967). The interpretation of international agreements and world public order. New Haven Press. McNair, B. A. (1961). the Law of Treaties. Oxford: Clarendon Press. Mehrish, B. N. (India). Travaux Preparatoires as an Element in the Interpretation of Treaties,. Indian Journal Of Internation Law. Schaffer, R. P. (1981). Current Trends in Treaty Interpretation and the South African Approach. Year Book of International Law. Yambrusic, E. (1987). Treaty Interpretation: Theory and Reality. University Press of America. Journals Hague Justice Journal, Volume 1, No 1; 2006 International Law omission, Commentary to draft article 27 and 28 Para. 4, YILC (1966-II) Milanovic, M., The ICJ and Evolutionary Treaty Interpretation, European Journal of International Law (July 2009), http://www.ejiltalk.org/the-icj-and-evolutionary-treaty- interpretation/ obtained on 03/05/2013. Ris, M. Treaty Interpretation and ICJ Recourse to Travaux Préparatoires: Towards a Proposed Amendment of Articles 31 and 32 of the Vienna Convention on the Law of Treaties, 14 B.C. Int'l & Comp. L. Rev. 111 (1991), http://lawdigitalcommons.bc.edu/iclr/vol14/iss1/6 Yearbook of the International Law Commission. YbILC 1964 Vol ii p54, para 5.