Chapter 4 Questions of treaty interpretation
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Investment treaties are quite peculiar beings concerned essentially with the legal relationship between sovereign States and private entities. Their interpretation requires the most scrupulous application of the Vienna Convention on the Law of Treaties (VCLT), which is fully equipped to solve all interpretative issues. After some hesitation, investment tribunals have held that investment treaties must be interpreted in a balanced way, regardless to the different nature of the parties to arbitration. Yet, poorly drafted treaties, occasionally presenting serious grammatical and lexical problems, have made the process of interpretation an arduous exercise, regardless to the adequacy of the rules on treaty interpretation and the skills of the interpreter. It must be recognized, nonetheless, that investment tribunals have generally persuasively applied the VCLT rules on interpretation, although with different degrees of sophistication and accuracy. They have also been able to exploit its flexibility, in particular by resorting to general principles of law when interpreting provisions as vague as those concerning the fair and equitable treatment standard. In a non-neglectable number of cases, however, investment tribunals have delivered unconvincing interpretations based, mainly, on questionable arguments on the value of preambles and subsequent practice. These cases remain departures from the rules contained in the VCLT and have not influenced international courts and tribunals in other areas of international law.

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