Interpreting Treaties In Investment Arbitration

Interpreting treaties in investment arbitration is central to resolving disputes where the applicable international instruments are often complex and open to competing readings. Practical interpretation determines jurisdiction, scope of protection and ultimately the outcome of disputes. In a previous note, we outlined how investment tribunals approach treaty interpretation. In this note, we take a closer look at the Vienna Convention on the Law of Treaties ("VCLT") and how its rules are applied in practice.

Investor–State arbitrations arise under bilateral or multilateral investment treaties concluded by States. These treaties grant protections to foreign investors, and when breached, investors may bring claims directly against the host State before international tribunals.