Article 31 of The Vienna Conventions On The Law of Treaties and Internation PDF

ICSID Review, Vol. 31, No. 2 (2016), pp.
366–387
doi:10.1093/icsidreview/siw008
SPECIAL FOCUS ISSUE

Article 31 of the Vienna Conventions on the
Law of Treaties and International
Investment Law
Hervé Ascensio1
Abstract—The general rule on the interpretation of treaties as codified in Article 31

VCTL has received increasing attention in investment arbitration. It unfolds an
objective method focused on the meaning of the text in order to frame interpreters’
discretion. The elements and limits of such method are discussed here in the context
of investment treaties, and illustrated by recent cases. The analyses also relies on the
most recent works of the International Law Commission of the United Nations,
notably on interpretation according to States’ subsequent practice and according to
other relevant rules of public international law. It is argued that the method of Article
31 VCTL is appropriate to reduce uncertainty in international investment law and
arbitration, but that an overemphasis on systemic consistency as an objective of treaty
interpretation involves risks.
I. INTRODUCTION
To put it simply, Article 31 of the Vienna Conventions on the Law of Treaties
(VCLT) offers clear guidance for the interpretation of treaties, and its rigorous
application would bring more consistency and predictability in international
investment law.2 These two ideas follow on from each other, and they have
become central in the extensive literature already dedicated to the interpretation of
investment treaties by arbitral tribunals. Article 31 would have helped to avoid
controversies, and even the misapplication of the law, concerning legal questions
such as the definition of an investment, the applicability of the most-favoured
nation (MFN) clause to the dispute settlement mechanism, the effect of the so-
called ‘umbrella’ clause, the content of fair and equitable treatment and the
1
Professor, Sorbonne Law School, University Paris 1 Panthéon-Sorbonne, France. Email: herve.ascensio@univ-
paris1.fr.
2
Vienna Convention on the Law of Treaties (opened for signature 23 May 1969, entered into force 27 January
1980) 1155 UNTS 331 (VCLT); Vienna Convention on the Law of Treaties between States and International
Organizations or between International Organizations (opened for signature 21 March 1986, not yet in force). This
last Convention has become more relevant for international investment law since the emergence of the European
Union (EU) as a possible party to investment treaties. This explains the use of the plural ‘Vienna Conventions’,
instead of the singular, in this article.
The Author 2016. Published by Oxford University Press on behalf of ICSID. All rights reserved.
For permissions, please email: journals.permissions@oup.com
SPRING 2016 Article 31 of the VCLTs and International Investment Law 367
conditions under which a necessity exception applies.3 This may sound quite
surprising for those readers who are familiar with the general theory of
interpretation. Under the influence of the realist school of thought, legal
interpretation is viewed nowadays more as a matter of authority and subjective
decision making than as a matter of knowledge and investigation into the true
meaning of a text.4 However, for legal and sociological reasons that must be
elucidated, Article 31 of the VCLT has received increasing attention from the
States’ officials, lawyers, arbitrators and academics comprising the epistemic
community of international investment law.
Such attention can be explained, first, by the significance of the treaties in this
field. As is well known, an intricate web of more than 3,000 investment treaties,
mostly bilateral,5 provide substantive protection to foreign investment, using open-
textured wording, and set out dispute settlement mechanisms, including a clause
that can be interpreted as offering State’s consent to arbitrate future disputes with
nationals of the other State party—an interpretation that has not been challenged
until now. Moreover, investment arbitration is frequently organized under a
multilateral treaty—the Convention on the Settlement of Disputes between States
and Nationals of Other States (ICSID Convention), creating an arbitration centre
with the statute of an intergovernmental organization—the International Centre
for Settlement of Investment Disputes (ICSID).6 Under a litigation angle, the
importance of these treaties is thus undeniable, whether as a basis for jurisdiction,
as a procedural framework or as a cause of action.
However, what is more relevant for our topic is the existence of strong
centrifugal forces within such a normative pattern. The backdrop is one of a
multiplicity of treaties using comparable, although not identical, language. For
interpreters, it implies a constant hesitation between referring to general concepts,
whose meaning is more or less clearly established in the field, and focusing on the
specific drafting of each treaty. Moreover, a natural consequence of choosing
arbitration for the settlement of disputes is the dispersion of authorities in charge
of adjudication and then interpretation. Of course, this is not uncommon in public
international law, but it is particularly pronounced in this arena. And it is dubious
whether a comparison with international commercial arbitration is appropriate
when the interpretation of general limits to States’ powers is at stake rather than
private relationships. These features defy the moderate realist view about
interpretation as a chain of authoritative determinations and endanger the general
purpose of any system of law—that is, the stability of social relations.
Hence comes the idea to use the regime of treaties, and, more precisely, its rules
on interpretation, as a factor of unity and consistency. It appears all the more
appealing that its codification in the VCLT of 1969 and 1986 has usually been
3
Eg Andrea Saldarriaga, ‘Investment Awards and the Rules of Interpretation of the Vienna Convention: Making
Room for Improvement’ (2013) 28(1) ICSID Rev—FILJ 197; Trinh Hai Yen, The Interpretation of Investment Treaties
(Brill/Nijhoff 2014); Richard K Gardiner, Treaty Interpretation (2nd edn, OUP 2015) 486–95.
4
See Denis Alland, ‘L’interprétation du droit international public’ (2012) 41 Collected Courses of The Hague
Academy of Intl L 362, 394.
5
According to the statistics of the UN Commission on Trade and Development, as of 1 January 2016, 3,286
international investment agreements had been concluded (among which 2,926 were bilateral investment treaties
[BITs]), 2,563 were in force (among which 2,278 were BITs). See <http://investmentpolicyhub.unctad.org/IIA>
accessed 9 March 2016.
6
Convention on the Settlement of Investment Disputes between States and Nationals of Other States (opened for
signature 18 March 1965, entered into force 14 October 1966) (ICSID Convention).
368 ICSID Review VOL. 31
appraised as a success,7 that its status as customary law is now almost consensual8
and that recent works of the International Law Commission (ILC) put it forward
as a medicine to cure contemporary disorders in international law. Notably, the
now famous conclusions of the ILC’s work on the fragmentation of international
law give a valuable role to Article 31(3)(c) as pursuing a ‘systemic integration’
objective.9 More recently, the ILC endorsed the final report of its Study Group on
the MFN Clause, which resulted in a ‘framework for the proper application of the
rules and principles of treaty interpretation to MFN clauses’.10 Lastly, the ILC’s
current work on subsequent agreements and subsequent practice in relation to the
interpretation of treaties deserves attention,11 especially recalling that some
investment treaties have set up an intergovernmental commission vested with
the power to adopt authoritative interpretations.
Is it to say that the rules on interpretation of the VCLT are able to produce the
centripetal effect expected? An affirmative answer would not only depend on their
precision and specificity but also on their interaction with other norms of
international law and with the normative environment of investment treaties. And,
in last resort, it all depends on the interpretation of the interpretative rules
themselves.
With such premises in mind, this article focuses on Article 31 of the VCLT as
the prominent article on treaty interpretation, and possibly on interpretation in
international law generally, whereas Article 32 is devoted to the secondary means
that may be used once Article 31 is applied—for confirmation or for the
overcoming of a deceptive result—and Article 33 addresses the specific problem of
treaties adopted in two or more languages with equally authentic value. As for the
extent of this particular inquiry, it was thought advisable to build on existing
doctrinal works, notably those studies grounded in an impressive empirical
research on the decisions of tribunals.12 Thus, it will limit the ambition of this
article to the selection and discussion of a few themes relevant for the current
debate on interpretation in international investment law. For this purpose, Article
31 will be presented as an objective method of interpretation (section II), as part
of an interpretative process that is not reducible to it (section III), as affording
guidance for interpretation over time (section IV) and, more tentatively, as being
instrumental to address consistency concerns (section V). The article will
conclude that Article 31 of the VCLT is a useful method to limit interpreters’
discretion but that systemic consistency is a goal that should be approached
through treaty interpretation only with care (section VI).
7
Jean-Marc Sorel and Valérie Boré Eveno, ‘Article 31’ in Olivier Corten and Pierre Klein (eds), The Vienna
Conventions on the Law of Treaties: A Commentary (OUP 2011) 805.
8
Gardiner (n 3) 13–19.
9
International Law Commission (ILC), Conclusions of the Work of the Study Group on the Fragmentation of
International Law: Difficulties Arising from the Diversification and Expansion of International Law, (11 August 2006) UN
Doc A/61/10, 175ff, esp 180; see also the final version of the report prepared by the Study Group (UN Doc. A/CN.4/
L.682 and Corr. 1) <http://legal.un.org/ilc/> accessed 9 March 2016 (Conclusions on Fragmentation) 175ff, esp p 180.
10
International Law Commission, Final Report of the Study Group on the Most-Favoured-Nation Clause (7 August
2015) UN Doc A/70/10, annex, 147ff, para 161 <http://legal.un.org/ilc/> accessed 9 March 2016 (Final MFN
Report).
11
All documents are available on the ILC’s website <http://legal.un.org/ilc/> accessed 9 March 2016.
12
Ole Kristian Fauchald, ‘The Legal Reasoning of ICSID Tribunals: An Empirical Analysis’ (2008) 19(2) EJIL
301; J Romesh Weeramantry, Treaty Interpretation in Investment Arbitration (OUP 2012); Trinh Hai Yen (n 3).
II. ARTICLE 31 AS AN OBJECTIVE METHOD OF

INTERPRETATION
Any rule on interpretation presupposes that a text encompasses a range of possible
meanings, among which any interpreter has a choice and among which a judicial
organ is bound to decide when applying the law to a specific case. Additional
objectivity is expected from interpretation, assuming that it is possible to flow from
signs to meaning through an activity of knowledge. After all, different kinds of
hermeneutics have been developed for millennia with a high degree of refinement,
whether in philosophy, history, religion, literature, music or . . . legal thinking.
Article 31 of the VCLT builds on a centennial tradition, deeply rooted in public
international law, and is clearly part of the applicable law when a treaty is applied.
Hence, the reproach made in legal doctrine towards tribunals that have ignored
Article 31 or only superficially applied it.
Actually, this criticism was made in relation to decisions adopted during the first
stage of the history of investment arbitration. It should have been addressed not
only to arbitrators but also to parties and their lawyers who were not necessarily
accustomed to presenting arguments rooted in Article 31 of the VCLT because of
an underestimation of the specificities of international investment arbitration
compared to commercial arbitration. When consent is grounded in a treaty, and
when claims pertain to the violation of a treaty, the rhetoric of Article 31 helps to
structure the legal debate. Tribunals come later in the chain of interpretations and
usually feel committed to answering all kinds of arguments discussed by the
parties for fear of annulment. Lacking a discussion, according to Article 31, the
motives of their decision could satisfactorily address interpretation of facts, but
unsatisfactorily address the interpretation of the applicable law. In this respect, one
may regret that, conversely, a failure to apply Article 31 has not emerged as an
efficient ground of annulment for lack of motivation.13 In any event, deference
towards Article 31 has become much more common in the motivation of arbitral
decisions, an evolution that is well documented. Some may argue that this trend
sometimes resembles a pure exercise in argumentative reconstruction. For
instance, in Lemire, the Tribunal provided a synthesis of previous interpretations
of fair and equitable treatment in terms of Article 31 factors, reaching a result that
does not add much to jurisprudence.14 Nevertheless, this tribute to the VCLT
must be positively appraised for its legitimating function.
However, Article 31 is not only an art of motivation. An essential aspect of
interpretation as an objective method must be underlined here. Article 31 requires
sequences in reasoning15 and not only sequences in the motivation that expresses
such reasoning. Judges and arbitrators are required under public international law
to follow this sequence as part of their judicial function. Under this angle, a rule
on interpretation is as much about procedure as about substance, and it applies to
arbitral procedure as well.
13
Saldarriaga (n 3) 208–9.
14
Joseph Charles Lemire v Ukraine, ICSID Case No ARB/06/18, Decision on Jurisdiction and Liability (14 January
2010) paras 256–73.
15
Mahnoush H Arsanjani and W Michael Reisman, ‘Interpreting Treaties for the Benefit of Third Parties: The
‘‘Salvors’’ Doctrine and the Use of Legislative History in Investment Treaties’ (2010) 104(4) AJIL 601.
It is probably useful at this point to restate briefly the content of Article 31.
Interpretative means are distributed in four paragraphs, structured logically and in
concentric circles,16 with paragraph 1 acting as the centre of gravity. This seminal
provision states that a treaty ‘shall’ be interpreted ‘in good faith in accordance with
ordinary meaning to be given to the terms of the treaty in their context and in the
light of its object and purpose’. In practice, many interpreters would not go much
further than paragraph 1, except in instances when additional elements are
brought to their attention. This is understandable because an interpreter cannot
stop on each treaty provision and on each term. He or she will dedicate time and
energy to those provisions invoked as the source of a legal disputatio and according
to the arguments put forward by the stakeholders.17 Moreover, and as will be
explained below, paragraph 2 is an elucidation of what context means and
paragraph 3 is the outmost reach of Article 31.
The grammatical centrality of the ordinary meaning encourages one to begin
with this element, as many investment tribunals do. But it would be too narrow an
understanding to restrict interpretation to an examination of terminology and to
the use of dictionaries. They may even prove deceptive when treaties use broad
terms such as ‘treatment’ or ‘protection’. Terms acquire a meaning when
confronted with other terms of the same text and with the spirit of the text,
here referred to under the expression ‘object and purpose’. Compared to such
reasoned understanding, Article 31(4) represents an inner circle, within which ‘[a]
special meaning shall be given to a term if it is established that the parties so
intended’. This last paragraph, the only one mentioning the intentions of the
parties, is often thought useless—an idea that would contradict the principle of
effectiveness, but practice is limited indeed. More commonly, when parties wish to
opt for a special meaning, they would explain this meaning in the treaty itself, as is
done in almost all investment treaties in an article on definitions.18
Coming back to Article 31(1), the object and purpose are essential to depart from
a purely literal interpretation. These two elements, however, are not easily
distinguishable and are frequently understood as a whole. This seems also
appropriate for investment treaties, which, contrary to treaties in other fields, do
not have a provision on their object. The object is then to be deduced from the whole
of the treaty provisions, whereas purposes are usually found in the preamble.19 In this
regard, an often-repeated criticism addressed to investment tribunals is an overvalu-
ation of the protection of foreign investment as the main purpose of investment
treaties, leading to a pro-investor bias when interpreting a vague term or expression.
Against this tendency, it was argued that the protection of foreign investors was only
the object of investment treaties and that the contribution to the development of the
host State and/or States’ economic cooperation is their true purpose.20 Another
16
In the official commentaries of the then draft art 27, the ILC mentions ‘considerations of logic only’. ILC, ‘Draft
Articles on the Law of Treaties with Commentaries’ ILC YB 1966, Vol II, 220. The Tribunal in Aguas del Tunari
speaks of a ‘process of progressive encirclement’ (ILC commentaries). Aguas del Tunari SA v Republic of Bolivia,
ICSID Case No ARB/02/3, Respondent’s Objections to Jurisdiction (21 October 2005) para 91.
17
Alland (n 4) 334–43.
18
However, article 31(4) was invoked by the Claimant in connection with the treaty definition of investment in
Poštová Banka, a.s. and ISTROKAPITAL SE v Hellenic Republic, ICSID Case No ARB/13/8, Award (9 April 2015)
para 279.
19
Object and purpose then interact with context and art 31(2).
20
Anne van Aaken, ‘Interpretational Methods as an Instrument of Control in International Investment Law’
(2014) 108 ASIL Proc 196, 197–8.
interpretation would be that preambles recite intermediate and final purposes. The
protection, promotion, encouragement or stimulation of foreign investment are the
intermediate purposes, and these are instrumental to a final purpose such as
mutually beneficial economic cooperation, economic development or even
sustainable development in more recent treaties.21 This two-tiered structure of
purposes—or object and purposes—has barely been exploited until now, except for
the contribution to development in relation to the ‘objective’ definition of
investment, according to the ICSID Convention.
A thorough thought on purposes, however, may become necessary in the context
of a new generation of treaties covering trade and investment altogether, aimed not
only at encouraging and liberalizing the flow of goods, services and capital but also
at harmonizing rules and at regulating transnational transactions. Similarly, the shift
from ‘development’ to ‘sustainable development’ may draw consequences on the
interpretation of investment treaty provisions, notably when a State’s measure is
justified by adaptation to new environmental constraints or legal commitments.22
Another aspect of investment tribunals’ activity facing strong criticism is their
alleged failure to apply entirely Article 31. This is probably more debatable.
Beginning with the second paragraph, it only clarifies what context means, with a
first circle composed of the whole text of the treaty, including its preamble and
annexes, and an outer circle composed of elements extrinsic to the treaty under
interpretation but connected to its conclusion, either an agreement concluded
between the parties or an instrument made by one or more parties and accepted
by the other ones. Connection with the conclusion of the treaty means that these
elements are part of the circumstances also mentioned in Article 32, together with
the preparatory works, but put in Article 31 in order to avoid relegation as a
secondary means of interpretation.23 Recourse to extrinsic, but connected,
instruments seems rather rare in international investment law.24
Paragraph 3 represents the broader circle, mentioning subsequent agreement
and practice and other relevant rules of international law. It involves huge
theoretical and practical difficulties, perfectly illustrated in international invest-
ment law, as will be developed in sections IV and V of this article. Suffice it to say
for the moment that two classical, although debatable, distinctions are at stake: the
one between interpretation and modification of the law and the other between
interpretation and application of the law. In any event, these additional elements
must have direct relevance for the treaty under interpretation.
In sum, and as constantly repeated in jurisprudence and doctrine, Article 31
expresses the primacy of the text. Although in our view this observation is
sometimes obscured by attempts to reintroduce the intentions of the parties as a
core element, it can easily be deduced from the VCLT itself, interpreted according
to their own stipulations. The commentaries on the Draft Articles on the Law of
Treaties adopted by the ILC in 1966, which are part of the travaux préparatoires of
21
Eg Agreement between the Government of Canada and the Government of the Republic of Côte d’Ivoire for the
Promotion and Protection of Investments (signed on 30 November 2014, entered into force 14 December 2015);
Agreement on Cooperation and Facilitation of Investment between the Federal Republic of Brazil and the Republic of
Angola (signed on 1 April 2015, not yet in force).
22
See Nitish Monebhurrun, La fonction du développement dans le droit international des investissements (PhD thesis,
Panthéon-Sorbonne University, 6 September 2013).
23
ILC commentaries (n 16) 221.
24
Weeramantry (n 12) 78–9.
the 1969 VCLT, confirm this idea.25 A clear choice was made in favour of an
objective and textual interpretation, rather than a subjective one referring to the
original intentions of the parties and rather than a teleological interpretation
overemphasizing the object and purpose of a treaty to the detriment of the
ordinary meaning of its terms. This does not preclude the interplay of these two
kinds of elements to a varying degree, which is part of the interpretative process,
but always in connection with the text of the treaty. The consequence is that ‘the
starting point of interpretation is the elucidation of the meaning of the text, not an
investigation ab initio into the intentions of the parties’.26
Nevertheless, and for reasons that may also stem from the parties’ argumen-
tations, many investment tribunals embark on an appraisal of what the States’
intentions probably were when they concluded the treaty, and, thereafter, when
they seek confirmation in the text. An example appears in Ping An Insurance.27
When confronted with the difficult problem of succession of investment treaties
and the retroactivity of the dispute settlement clause, the Tribunal, after recalling
that both treaties must be interpreted according to Article 31, entered into an
inquiry about the intentions of the parties in order to avoid a ‘narrow and purely
linguistic exercise’.28 It then exposed four logical possibilities and chose one on the
basis of likeliness, without quoting the objective evidence of such intentions, and
then came back to the text of the Treaty, whose interpretation proved to be finally
decisive.29 We are not convinced that a detour into States’ supposed or
reconstructed intentions helps clarify the meaning of a treaty, except in the
circumstances envisaged in Article 32 of the VCLT, but it should then be applied
without reversing the hierarchical order of the VCLT articles. Moreover, it should
not be forgotten that the question is not so much to know what were the
intentions of the parties but, rather, what was their common intent. In this matter,
the text is definitely the best presumption.30
III. ARTICLE 31 IN THE INTERPRETATIVE PROCESS

Assuming that the method described in section II was able to reduce the range of
possible meanings of a treaty provision, it does not exhaust the problem of treaty
interpretation. It would be an extraordinary result that, thanks to some mechanical
implementation of Article 31, any qualified interpreter would be led necessarily to
a single, and thus correct, result, especially for the kind of text discussed in
investment disputes. Actually, other types of arguments are commonly put forward
during the interpretative process to justify the final interpretation. The next
question is whether they are compatible with the general rule of Article 31,
without prejudice to Articles 32 and 33, of the VCLT.
25
ILC commentaries (n 16)
26
ibid 220.
27
Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of China, Limited v
Kingdom of Belgium, ICSID Case No ARB/12/29, Award (30 April 2015).
28
ibid para 218.
29
ibid paras 220–9.
30
As regularly recalled in doctrine and judicial decisions after the 1966 commentaries of the ILC: ‘[T]he text must
be presumed to be the authentic expression of the intentions of the parties’. ILC commentaries (n 16) 220. This
rhetorical ‘presumption’ is an elegant way to reconcile the theoretical opposition between objectivist and subjectivist
approaches of public international law.
A first and challenging difficulty lies in the relative importance to be attached to

each element of Article 31 compared to the others. It is worth recalling here that
Article 31 was entitled a ‘general rule’ in the singular to signal that all elements
had to be appraised in ‘a single combined operation’ and with no hierarchy of
value.31 A well-known consequence is that Article 31 itself does not offer any help
with their relative weighting. Far from being a flaw of the VCLT, this permitted
the Treaty to preserve the possibility of codifying general rules on interpretation,
despite the huge diversity of treaties’ configuration and content. Consequently,
interpreters have leeway to adapt to different legal contexts and may be inclined to
use systemic arguments to add consistency in treaty interpretation because of
specific features, as will be seen below in section V.
However, it is possible to set a limit on when one element is overweighted in
blatant disregard to another, leading to a contradiction or some other unreason-
able result that even recourse to the supplementary means of Article 32 will not
suffice to overcome. This may occur, for instance, when the ordinary meaning of a
text is entirely neutralized through the invocation of purpose. The ILC’s Final
Report on the MFN Clause thus criticizes tribunals that set aside a condition to use
local remedies for at least 18 months before bringing their case to arbitration for
the sole reason that it would be contrary to the purpose of the treaty—that is, the
promotion of investment.32 Such interpretation is condemned because it amounts
to ‘query [States’] policy choices’, as reflected in the ordinary meaning of a treaty
provision.33 The same critic could apply when the condition to observe a period of
time after notification of a dispute—which could have a cooling-off function—is
simply bypassed because it would ‘amount to an unnecessary, overly formalistic
approach which would not serve to protect any legitimate interests of the
Parties’.34
Another problem involves the availability and function of other rules, maxims,
logical phrases or guidelines, after a first and almost literal application of Article
31, in order to reduce the number of remaining options. These interpretative
means are often labelled ‘principles’, although their normative value is uncertain
and probably diverse. The best illustration is the principle of ‘effet utile’ or
effectiveness (ut res magit valeat quam pereat), which is frequently mentioned in
arbitral decisions.35 It would be implicitly present in Article 31, under the
requirement of good faith36 and ‘in light object and purpose’, but its exact place in
the sequence of interpretation deserves a clarification. A good and rather strict
explanation appears in the 1966 Commentaries of the ILC, according to which
‘[w]hen a treaty is open to two interpretations one of which does and the other
does not enable the treaty to have appropriate effects, . . . the former interpretation
should be adopted’.37 Such understanding is telling when a tribunal has to decide
whether, for instance, an umbrella clause drafted in terms of States’ duties has a
31
32
Final MFN Report (n 10)
33
ibid 189–90.
34
Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan, ICSID Case No ARB/03/29, Decision
on Jurisdiction (14 November 2005) para 102.
35
See Weeramantry (n 12) 143–7. A mitigated evaluation of the same practice appears in Fauchald (n 12) 317–19.
36
Sorel and Boré Eveno (n 7) 818; Weeramantry (n 12) 47.
37
normative effect or not. If not, why would it appear in the treaty?38 However, if
different effects are still conceivable, the interpretative process has not ended.
Reasonableness is another classical interpretative principle that also stems from
good faith.39 For this reason, it can be invoked under Article 31 and not
exclusively under Article 32, as sometimes thought. Reasonableness can be given
different meanings, ranging from the broad idea that it would orient interpretation
towards its consequences40 to the stricter view that an interpreter should not give
to the text a meaning that the parties would not have been able to envisage.41 The
idea of balancing diverging options resulting from textual interpretation probably
lies in the middle and was recently applied in Poštová Banka.42 Elaborating on the
definition of investment, and more precisely on the inclusiveness of the categories
of the illustrative list, the Tribunal considered for reason of reasonableness that it
‘must balance the broadness of the categories with the limits that result from their
inclusion in the treaty’.43 It then concluded that public debt instruments, because
of their specificity, should not be included within broad categories such as ‘claims
to money’ without a clear indication of the State’s intent.44 The only question to
be raised is the moment when reasonableness is introduced in the reasoning,
whether as a presupposition that might distort the application of Article 31
elements in favour of a subjective understanding of the interests at stake, or further
on, for the assessment of remaining options.
The risk of undermining the regular application of Article 31 probably explains
the scepticism of the ILC towards the principle expressio unius est exclusion alterius,
at least in the context of the applicability of the MFN clause to the dispute
settlement mechanism.45 Actually, this principle is of limited use compared to
effectiveness and reasonableness and is rather unconvincing when an enumeration
of items is not clearly exclusive or open-ended.46 Other rhetorical phrases, such as
a contrario inferences, encounter similar suspicion.
A third issue arises when interpretation of a legal concept is at stake. In this
respect, concerns have been expressed about the extensive use by investment
tribunals of precedents, doctrine and comparison with other treaties, instead of
Article 31(1) elements. However, this is perfectly understandable, and even
recommended, when a term has an established legal meaning and calls for an
interpretation according to general international law or according to common
usage for standards. As explained by the ILC in its conclusion on the
fragmentation of international law, customary international law and general
principles of law have ‘particular relevance’ when interpreting an ‘opened-texture’
treaty rule or when the term has a ‘recognized meaning’ under such law or
38
For the discussion with reference to relevant arbitral decisions, see Christoph Schreuer, ‘Diversity and
Harmonization of Treaty Interpretation in Investment Arbitration’ in Malgosia Fitzmaurice, Olufemi Elias and Panos
Merkouris (eds), Treaty Interpretation and the Vienna Convention on the Law of Treaties: 30 Years on (Martinus Nijhoff
2010) 132.
39
Robert Kolb, La bonne foi en droit international public: Contribution à l’étude des principes généraux de droit (Presses
Universitaires de France 2000) 269–72.
40
Fauchald (n 12) 353–5.
41
See quotations from tribunals in Kolb (n 38) 271.
42
Poštová Banka (n 18)
43
ibid para 315.
44
ibid para 342.
45
Final MFN Report (n 10) para 188.
46
Schreuer (n 38) 134–5.
principles.47 In addition, the meaning of a legal concept is more prone to evolve

under the influence of new rules of international law or new usage.48 Many
provisions of investment treaties offering substantive protection to foreign investors
have been so understood.
Of course, an interpreter may hesitate before classifying a treaty term as a legal
concept, and this may not be so easily decidable according to Articles 31 or 32 of
the VCLT. The question was raised for instance in Poštová Banka and concerned
the rubrics usually mentioned within the definition of investment in the illustrative
list. The Tribunal took a position against their characterization as legal categories,
which in turn influenced its conclusion on sovereign debts as not being an
investment in the meaning of the treaty.49 This example perfectly shows that legal
thinking and the dogmatic understanding of general international law necessarily
interplay with the text of a treaty.
Classification of a term or an expression as a legal concept opens the
interpretative process to sources of law that are external to the treaty. The
degrees and methods of their interaction, however, are diverse and only partly—
and vaguely—addressed in Article 31(3)(c) of the VCLT. Hence, in Tecmed, the
Tribunal stated that fair and equitable treatment could be understood according to
Article 31(1) or according to international law and good faith.50 It helped justify
recourse to another legal concept—legitimate expectation—which stems from ‘the
good faith principle established by international law’ in order to complement the
broader concept of fair and equitable treatment.51 Although the reasoning could
have been more carefully drafted by mentioning Article 31(3)(c) and the good
faith element of Article 31(1), it is found to be sound. Another Tribunal added
more recently that the ‘concept’ of legitimate expectations is found ‘in the
comparative analysis of many domestic legal systems’, which seems close to the
recognition of a general principle of law in the meaning of Article 38(1)(c) of
the Statute of the International Court of Justice.52 The selection of external
sources and the capacity to combine them to complement treaty provisions is part
of the normative power afforded to tribunals within the framework drawn up
by the method of Article 31 of the VCLT. Discretion in the exercise of such
power, however, may be further limited through additional interpretative
directives.
IV. ARTICLE 31 AND INTERPRETATION OVER TIME

The introduction of a temporal element opens another sequence in interpretation.
Such an element is expressly mentioned in Article 31(3)(a) and (b) of the VCLT:
(i) for subsequent agreements between the parties on interpretation or application
of the treaty and (ii) for subsequent practice establishing an agreed interpretation
47
Conclusions on Fragmentation (n 9) para 20.
48
ibid para 23. Contrary to this trend, see the isolated precedent of Daimler Financial Services AG v Argentine
Republic, ICSID Case No ARB/05/1, Award (22 August 2012) para 220ff.
49
Poštová Banka (n 18) para 287.
50
Técnicas Medioambientales Tecmed, SA v United Mexican States, ICSID Case No ARB(AF)/00/2, Award (29 May
2003) para 155.
51
ibid para 154.
52
Gold Reserve Inc v Bolivarian Republic of Venezuela, ICSID Case No ARB(AF)/09/1, Award (22 September 2014)
para 576. Statute of the International Court of Justice (opened for signature 26 July 1945, entered into force 24
October 1945).
of the treaty. Without being rare, interpretation according to subsequent

agreement or practice has not been frequently discussed before investment
tribunals.53 However, the question will probably gain in relevance because of
existing treaty provisions devoted to interpretation over time and, maybe foremost,
because of its capacity to echo systemic concerns. This aspect of the current
debate on treaty interpretation demonstrates that there are different manners to
envisage treaties as living instruments, and the one discussed here may worry
foreign investors more than States. This issue will be discussed in light of the
ILC’s current work on subsequent agreement and practice, dealing first with
States’ expression of such agreement or practice and, second, with its effect on
interpretation.
The ILC has adopted a quite flexible approach on the requisite forms of both
subsequent agreement and subsequent practice, mainly on the basis of the case
law of international courts and tribunals.54 The provisional draft conclusions
adopted in 2014 state that they ‘can take a variety of forms’55 and that the—
express or tacit—agreement required for both is only a ‘common understanding’
that does not need to be legally binding.56 Nevertheless, there are limits to this
flexibility. Concerning subsequent practice, evidence of common or converging
behaviour of parties to the treaty is needed, and the doctrine has frequently
mentioned as criteria in this respect the adjectives ‘concordant, common, and
consistent’.57 Convergence is more demanding than a mere addition of conducts
occurring at different moments and whose context does not demonstrate
necessarily an intent to agree. The Aguas del Tunari case illustrates very well
these requirements in the field of international investment law.58 The not
completely consistent statements of the Dutch Executive before the Parliament
of the Netherlands and the position taken by Bolivia during the pleadings were
viewed as an addition of independent elements instead of a practice establishing an
understanding.59
Considering these criteria, it seems quite difficult to justify some interpretative
methods implemented in investment arbitration on the basis of an alleged
subsequent practice. Investment tribunals frequently refer to the external legal
policy of one party only, notably the conclusion of other investment treaties with
third States, and draw consequences from an evolution—or lack of it—in the
wording of a recurring provision or a model treaty. In its Final Report on the MFN
Clause, the ILC rightly warned against such inquiry that may have some limited
relevance in the context of Article 32 for formerly concluded treaties,60 but none
53
Trinh Hai Yen (n 3) 53–5.
54
ILC, Subsequent Agreement and Subsequent Practice in Relation to the Interpretation of Treaties: Texts and Titles of
Draft Conclusions 6 to 10 Provisionally Adopted by the Drafting Committee on 27 May and 28 May and on 2 and 3 June
2014, (3 June 2014) Doc UN A/CN.4/L.83. See also Georg Nolte, Second Report on Subsequent Agreements and
Subsequent Practice in Relation to the Interpretation of Treaties, (26 March 2014) UN Doc A/CN.4/671 (Texts and Titles of
Draft Conclusions 2014).
55
ibid Draft Conclusion 6.1.
56
ibid Draft Conclusion 9.1.
57
Nolte (n 54) 20–1. See also Giovanni Distefano, ‘La pratique subséquente des Etats parties à un traité’ (1994)
40 Annuaire français de droit international 47.
58
Aguas del Tunari (n 16)
59
ibid paras 249–63.
60 _ aat Ithalat
As done in Klç Ins _ _
Ihracat Sanayi ve Ticaret Anonim Şirketi v Turkmenistan, ICSID Case No ARB/10/
1, Award (2 July 2013) 7.4.1–7.4.2.
under Article 31(3)(b) because this practice is not common to all parties and does
not have a direct link with the treaty under interpretation.61
It has also been suggested in doctrine that a wide range of States’ conducts
could be taken into account under subsequent practice. Positions taken in
memorials or pleadings, interventions as non-disputing parties before investment
tribunals, official commentaries of a model bilateral investment treaty (BIT) or
almost any kind of statements relevant to international investment law.62 However,
most of these elements do not have a sufficient connection with the treaty under
interpretation or are not a practice in the sense of a factual behaviour revealing a
common understanding. Moreover, it would be a heavy burden for States, and an
excessive constraint on their rights of defence, if any position taken in the context
of a legal strategy could be interpreted afterwards as an element of subsequent
practice or as an expression of intent in the framework of Article 31(3)(a) or (b).
Second, the effect of a subsequent agreement or practice in the interpretative
process must be clarified. An interpretation of Article 31(3) in its context and in
light of the object and purpose of the VCLT suggests that the effect should be
circumscribed within the limited range of interpretations resulting from the
objective method described previously in section I. After all, Article 31(3) applies
‘together with the context’, which suggests that the ordinary meaning, the object
and the purpose of the treaty should be respected. Otherwise, interpretation would
amount to a modification of the treaty as foreseen in Articles 39–41 of the
VCLT.63 However, the current work of the ILC is somewhat disturbing in this
respect.
The provisional Draft Conclusion 7.1 states that a subsequent agreement or
practice could have the effect of ‘narrowing, widening, or otherwise determining
the range of possible interpretations, including any scope for the exercise of
discretion which the treaty accords to the parties’.64 The idea of a widening of
possible interpretations does not match with the idea, also mentioned, of an
‘interaction with other means of interpretation’, according to the criteria of clarity,
specificity and, for practice only, repetition.65 In his second report, the special
rapporteur was initially more cautious when speaking of the specification of
meaning—‘narrowing down’—or the confirmation of a—then pre-existing—‘broad
understanding’.66 If subsequent agreement and practice were to go beyond
interaction with Article 31(1) elements, the distinction between interpretation and
modification of the treaty would be blurred. This entails a risk for the stability of
treaties, and for legal security generally.
This is not to say that, in the context of international investment law, subjective
rights created by investment treaties should be treated as acquired rights,
insusceptible to change. But formalism attached to amendment procedures or to
the adoption of a new treaty matters because it guarantees a certain degree of
stability and transparency that is essential for the rule of law. It also matters under
61
Final MFN Report (n 10) paras 122, 180–3.
62
Anthea Roberts, ‘Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States’ (2010)
104(2) AJIL 217.
63
On the problems faced during the preparatory works of the VCLT (n 2) on this topic and the related theoretical
difficulties, see Distefano (n 57) 41–71.
64
Texts and Titles of Draft Conclusions 2014 (n 54).
65
These weighting criteria appear in ibid Draft Conclusion 8.
66
Nolte (n 54) 11, para 20.
the angle of the constitutional law of the States’ parties.67 Although the distinction
between interpretation and modification is a very challenging one, an assessment
pursuant to the object and purpose of the treaty seems practicable—and in line
with most precedents where subsequent agreement or practice has been accepted
by an international court. Another possibility would be an evaluation on the basis
of reasonableness, which was convincingly suggested by an author who referred to
investment treaty specifically.68 For the moment, the ILC Drafting Committee
follows another path when it presumes that, by subsequent agreement or practice,
States’ intent would necessarily be interpretation and not amendment or
modification.69 No indication is afforded for a rebuttal, as if pathological conduct
was inconceivable.
The ILC’s current work may also prove to be of utmost importance in the
context of those investment treaties that establish an intergovernmental commis-
sion empowered to issue interpretative statements. Here, the expression of a
subsequent understanding is a problem that has been settled, but the problem of
effects remains—entirely for those commissions that are only consultative70 and
partially for those issuing binding interpretations. A famous example of the latter
category is the Free Trade Commission established under Article 1131(2) of the
North American Free Trade Agreement.71 This category has expanded slowly, but
it may become more significant with the emergence of the European Union’s (EU)
treaty practice. Both the Comprehensive Economic and Trade Agreement between
the EU and Canada (CETA) and the EU–Singapore Free Trade Agreement, the
two bilateral treaties whose negotiations are said to be completed, set out an
authoritative interpretative mechanism, respectively at Article X.27 and Article
9.22(3).72 Although CETA expressly allows the committee to set a date for entry
into force of an authoritative interpretation, an abusive use in order to influence
pending cases is still a possibility.
The effect of the interpretative note adopted on 13 July 2001 by the NAFTA
Free Trade Commission, which concerns fair and equitable treatment and full
protection and security, has been discussed before several investment tribunals.
Unsurprisingly, the binding effect was accepted and applied all the more easily
because the parties did not eventually challenge it73 and because it pre-existed the
proceedings.74 The circumstances were different in Methanex, for instance, where
there was a risk of interference in the proceedings, as explained in the final
Award.75 The Tribunal interpreted first the NAFTA provisions according to
‘textual analysis’ and only then took into consideration authoritative interpretation,
67
See Georg Nolte (ed), Treaties and Subsequent Practice (OUP 2013) 145–66.
68
Roberts (n 62) 209–12.
69
Texts and Titles of Draft Conclusions 2014 (n 54) Draft Conclusion 7.3.
70
For these ones, see the comments of Schreuer (n 38) 146–7.
71
North American Free Trade Agreement (opened for signature 17 December 1992, entered into force 1 January
1994) (NAFTA).
72
European Commission–Canada Comprehensive Economic and Trade Agreement (drafted 1 August 2014)
(CETA); Free Trade Agreement between the European Union and the Republic of Singapore (drafted 29 June 2015)
<http://ec.europa.eu/trade/policy/countries-and-regions/> accessed 9 March 2016.
73
The Loewen Group, Inc and Raymond L Loewen v United States of America, ICSID Case No ARB(AF)/98/3, Award
(26 June 2013) paras 127–8.
74
Apotex Holdings Inc. and Apotex Inc v United States of America, ICSID Case No ARB(AF)/12/1, Award (25
August 2014) para 9.4.
75
Methanex Corporation v United States of America, UNCITRAL, Final Award (3 August 2005) part II, ch B,
para 14.
concluding that it ‘simply confirmed the text’.76 This was an appropriate sequence
because it helped avoid conflict and let the Tribunal interpret the interpretative
note in harmony with its own interpretation of the Treaty. The Tribunal went on,
however, stating that in case there would have been a contradiction, the
authoritative interpretative would have been binding as an amendment
anyway,77 except with respect to a violation of jus cogens.78 This view, however,
bypassed the problem of retroactivity and interference in proceedings in course. In
the case of an amendment, and without an explicit provision to the contrary, the
principle of non-retroactivity would prevail. It is much less clear for an
interpretative statement, whose meaning might be incorporated into the inter-
preted text.
As can be seen from this example, interpretation over time involves a series of
questions in terms of checks and balances between the legislative—in this case,
States concluding treaties—and the judiciary—in this case, tribunals. The
Methanex Tribunal called this process an application of ‘international constitu-
tional principles’;79 but it could also be labelled a systemic concern within the
international legal order. From the standpoint of foreign investors, the authori-
tative interpretation/modification of a treaty partially reintroduces a risk of
sovereignty, in the sense that the sovereign entities that afforded protection against
some unexpected, discriminatory or unfair changes in their legislation, might
jointly and suddenly change the scope of this protection. It raises difficult
questions with respect to the preservation of the rights conferred to thirds (foreign
investors) that culminate in the problem of retroactivity.
The solution is a highly complex exercise in interpretation. Whether a
subsequent agreement or practice may apply retroactively or in proceedings in
course will depend on its content and timing, on the wording of the treaty under
interpretation and on its interplay with other rules of international law, notably the
principle of the non-retroactivity of treaties as codified in Article 28 of the VCLT
as well as, in some circumstances, the principle of lex posterior derogat priori and
even rules on States’ succession to treaties.80 Another factor to be considered is
whether the treaty or a subsequent interpretative statement encompasses legal
concepts that should be interpreted in an evolutionary way81 or, rather, according
to the principle of contemporaneity—that is, according to the law in force at the
time the treaty under interpretation was concluded. This last question resembles
the debate on ‘generic terms’ as it has developed before the International Court of
Justice (ICJ).82
76
ibid part IV, ch C, para 17.
77
ibid para 20–1.
78
ibid para 24.
79
ibid para 22.
80
See the recent Sanum annulment case before Singaporian courts. Government of the Lao People’s Democratic
Republic v Sanum Investments Ltd, High Court of Singapore (20 January 2015), under appeal. The case is discussed in
Naomi Hart and Sriram Srikumar, ‘Investor-State Arbitration before the High Court of Singapore: Territoriality,
Nationality and Arbitrability’ (2015) 4(1) Cambridge J Intl & Comp L 191.
81
See Mondev International Ltd v United States of America, ICSID Case No ARB(AF)/99/2, Award (11 October
2002) para 105. See also the comments on Pope and Talbot Inc v Canada, UNCITRAL, Interim Award (26 June
2000); Award on Merits (10 April 2001), discussed in Malgosia Fitzmaurice and Panos Merkouris, ‘Canons of Treaty
Interpretation: Selected Case Studies from the World Trade Organization and the North American Free Trade
Agreement’ in Fitzmaurice, Elias and Merkouris (n 38) 212–17.
82
See Paolo Palchetti, ‘Interpreting ‘‘Generic Terms’’: Between Respect for the Parties’ Original Intention and the
Identification of the Ordinary Meaning’ in Nirina Boschiero and others (eds), International Courts and the Development
of International Law: Essays in Honor of Tullio Treves (Asser Press 2013) 91.
In any case, we believe that the right answer would be to come back to the
objective method of interpreting Article 31 since the element of time entailed in
Article 31(3)(a) and (b) is not meant to prevail over all other elements of the same
article but, rather, to be ‘taken into account’ and, thus, should not contradict the
ordinary meaning, context, object and purpose of the Treaty. It then takes place in
a sequence of interpretation and must be reconciled with the other objective
elements under scrutiny. A conflict of meanings due to subsequent agreement or
practice would suggest a modification, rather than an interpretation, of the Treaty,
and, thus, it would become necessary to question the legal value of the ‘common
understanding’ and, if legally binding, to apply the general rules of international
law on the conflict of norms. This goes beyond the scope of Article 31 of the
VCLT.
V. ARTICLE 31 AND CONSISTENCY CONCERNS

We have regularly underlined in this article how much interpretation according to
Article 31 of the VCLT is pre-determined by systemic presuppositions and
consistency concerns. These concerns have in turn an impact on interpretation at
two levels. The first level is Article 31(3)(c), stricto sensu, noting that this provision
recognizes a close link between interpretation and applicable law when it requires
taking into account ‘any relevant rules of international law applicable in the
relations between the parties’. The second level is more abstract. It is based on the
idea that the ratio of public international law as a legal system should be integrated
into the interpretative process. This recommendation is due to the work of the
ILC on the fragmentation of international law and is called the ‘principle of
systemic integration’.83 Article 31(3)(c), broadly understood, then becomes
instrumental to this end. These two levels of analyses certainly have an impact
not only on the theory of international investment law but also on its practice.
Beginning with the first level, and contrary to what is sometimes written, Article
31(3)(c) has been frequently applied by investment tribunals, although sometimes
this has been done implicitly or it has been merged with the classical application of
a treaty provision on applicable law.84 Actually, it would be difficult to draw a clear
dividing line between interpretation and application of the law in the context
of investment disputes because public international law is expressly part of
the applicable law according to many investment treaties and to Article 42 of the
ICSID Convention. Thus, at first sight, investment treaties are more open to the
influence of external rules than the law of the World Trade Organization (WTO),
for instance, because Article 31(3)(c) is not the only gate through which general
international law can enter a legal reasoning in investment arbitration, whereas
Article 3 of the WTO’s Understanding on Rules and Procedures Governing the
Settlement of Disputes has a very restrictive effect on applicable law.85
83
Conclusions on Fragmentation (n 9) paras 17–23. See also Campbell McLachlan, ‘The Principle of Systemic
Integration and Article 31(3)(c) of the Vienna Convention’ (2005) 54(2) ICLQ 279.
84
In this sense, Trinh Hai Yen (n 3) 55–61; Weeramantry (n 12) 93–4 (listing general principles of law applied by
investment tribunals); José E Alvarez, The Public International Law Regime Governing International Investment (Brill
2011) 243 (about fair and equitable treatment).
85
Understanding on Rules and Procedures Governing the Settlement of Disputes (opened for signature 15 April
1994, entered into force 1 January 1995).
However, at the same time, investment tribunals have referred mainly to very
general principles of law or to customary rules pertaining to the same subject
matter as the treaty provisions under interpretation. They have been much more
cautious about possible interactions and linkages with rules pertaining to other
specialized areas of public international law, such as international human rights
law, international environmental law or even international trade law. This is
consistent with the narrow sense of Article 31(3)(c). Litigants or stakeholders
wishing to invoke these rules would easily face the objection that a reference to
international law as applicable law does not have the effect of ‘incorporat[ing] the
universe of international law into the BITs or into disputes arising under the
BITs’.86 This quotation comes from a procedural decision on a—dismissed—
request from non-governmental organizations to intervene as amicus curiae in
defence of the rights of indigenous peoples under international law. With respect,
it is suggested that this reference and Article 31(3)(c) may indeed have such effect
but that the main problem resides in the necessity to demonstrate relevancy—that
is, a sufficient connection with the treaty provision under interpretation.87
A relevancy review is of course a matter of interpretation. It has been discussed,
for instance, before the ICJ in the famous Oil Platform case.88 The narrowest view
would be that the external rules and the treaty under interpretation should be part
of the same context, meaning that they must have the same subject matter and
that the substance of the rule must be capable of shedding light on the meaning of
the text.89 This favours consistency in the same field of international law, such as
international investment law, but not the interconnection between different fields.
Even if a more flexible view is adopted, as it possibly was in the Oil Platform
judgment, the treaty must offer a textual basis for such interconnection, using
identical or very close legal concepts, and probably a diversity of purposes in order
to enlarge its subject matter. Lacking such features, attempts to use Article
31(3)(c) will prove misplaced or ineffective. Hence, it is worth noting that,
whereas trade is a matter not so distant from investment, the interpretation of
investment treaties according to WTO law has not proven adequate until now.90
This situation will certainly evolve because of the evolution in the drafting of
investment treaties—for instance, the import of GATT Article XX exceptions or
reference to WTO provisions on intellectual property—and because of the
progressive rapprochement that might result from the conclusion of comprehen-
sive trade and investment agreements.91
The same reasoning applies to the relationship between investment and human
rights, a topic about which the doctrinal debate has become very rich but which
86
Bernhard von Pezold and others v Republic of Zimbabwe, ICSID Case No ARB/10/15 and Border Timbers Limited,
Timber Products International (Private) Limited, and Hangani Development Co. (Private) Limited v Republic of Zimbabwe,
ICSID Case No ARB/10/25, Procedural Order No 2 (26 June 2012) para 57.
87
In light of the following paragraphs of the same decision, this requirement was apparently not satisfied. ibid para
60.
88
Case Concerning Oil Platforms (Islamic Republic of Iran v United States of America) (Judgment) [2003] ICJ Rep
161, para 39–42. For a general discussion, see Duncan French, ‘Treaty Interpretation and the Incorporation of
Extraneous Legal Rules’ (2006) 55(2) Intl Comp LQ 281.
89
Oil Platforms (n 88) para 46 (separate opinion of Judge Higgins).
90
See the accurate critique of José E Alvarez (n 83) 299–339 (section entitled ‘The Hazards of Premature De-
fragmentation’) concerning the use of World Trade Organization’s (WTO) law to interpret a national security
exception. See also Jürgen Kurtz, ‘The Use and Abuse of WTO Law in Investor–State Arbitration: Competition and
Its Discontents’ (2009) 20(3) EJIL 749. cf Robert Howse and Efraim Chalamish, ‘The Use and Abuse of WTO Law
in Investor-State Arbitration: A Reply to Jürgen Kurtz’ (2009) 20(4) EJIL 1087.
91
General Agreement on Tariffs and Trade (opened for signature 15 April 1994, entry into force 1 January 1995).
has not yet borne much fruit in the arbitral practice precisely because of the
relevancy requirement.92 An interesting illustration of the limits encountered is the
decision on jurisdiction and liability in the Saur case, in which human rights, in
general, and the right to water, in particular, were recognized as general principles
of international law and thus part of the law applicable to the case.93 However,
investment treaties must also be respected. In the Tribunal’s view, although access
to water is a public service of first necessity, investors must be compensated when
a public authority in charge of water sanitation violates their rights.94 Interaction
between international human rights law and international investment law was here
meaningful in assessing the existence of a ‘public purpose’ as a condition for a
lawful expropriation, but it was not sufficient to produce additional effects on
responsibility or compensation. In other factual and legal circumstances, interna-
tional human rights law may become more relevant—for instance, when foreign
investors expect some evolution of the host State’s legislation in order to conform
to existing social or environmental rights or to adapt to treaties under ratification.
However, this kind of interaction probably goes beyond Article 31 of the VCLT,
which primarily deals with the meaning of treaty provisions and does not exhaust
all aspects of their application to a specific case.
By contrast, a successful implementation of Article 31(3)(c) appears in the
Micula case, where rules of international law of a different kind were considered
relevant—namely the regional law of European integration. Article 31(3)(c) was
invoked by Romania in order to interpret its bilateral investment treaty with
Sweden in conformity with ‘the rules of international law existing at the time the
BIT is being interpreted (that is, today)’.95 The Tribunal did not accept the idea
entirely, but it chose to ‘interpret each of the various applicable treaties having due
regard to the other applicable treaties’.96 Among European treaties, it took into
account only the Europe Agreement,97 an agreement organizing a transitional
period before the accession of Romania to the EU because this treaty was the only
one in force ‘in the time period relevant to this dispute’98—that is, before the entry
into force of the Accession Treaty99 in 2007 and before EU law on State’s aid
received its plain application. Implementation of EU competition law was central
for this case, but it was interpreted as part of the factual background only and not
as applicable law. Fortunately enough, the two treaties in force at the relevant time
converged in promoting foreign investment in their respective preamble.
Moreover, the European Treaty expressly encouraged Romania to conclude
investment treaties with EU Member States. Thus, as a result of interpretation, no
92
Especially on relevancy in this context, see Pierre-Marie Dupuy, ‘Unification Rather Than Fragmentation of
International Law? The Case of International Investment Law and Human Rights Law’ in Pierre-Marie Dupuy,
Ernst-Ulrich Petersmann and Francesco Francioni (eds), Human Rights in International Investment Law and Arbitration
(OUP 2009) 58.
93
SAUR International v. Argentine Republic, Affaire CIRDI No ARB/04/4, Decision on Jurisdiction and Liability (6
June 2012) para 330.
94
ibid para 413.
95
Ioan Micula, Viorel Micula, and others v Romania, ICSID Case No ARB/05/20, Award (11 December 2013) para
305.
96
ibid para 326.
97
Europe Agreement establishing an Association between the European Economic Communities and their
Member States, of the one part, and Romania, of the other part (signed on 1 February 1993, entered into force on 1
February 1995).
98
ibid para 319.
99
Treaty concerning the Accession of the Republic of Bulgaria and Romania to the European Union (signed on 25
April 2005, entered into force on 1st January 2007).
conflict between treaties appeared. This case offers one of the most interesting
illustrations of an interpretation according to Article 31(3)(c) of the VCLT in
investment arbitration. It is also interesting because rules on interpretation over
time were crucial to reach this result; but the motivation is unfortunately allusive
on this point.
Second, the objective of systemic integration may play a role in the interpret-
ation of international investment law. This theme has become very popular in the
doctrine since the ILC’s adoption of its conclusions on the fragmentation of
international law.100 At this point, it must be made clear that the system
concerned is not the system of international investment law and/or arbitration but,
rather, public international law as a legal order, which not only broadens but also
partly shifts the kind of consistency expected. Under this approach, the
relationship between international investment law and public international law
would be better understood in terms of inclusiveness rather than intersection.
The report of the ILC’s study group shows high expectations for consistency
since the principle of systemic integration ‘points to a need to take into account
the normative environment more widely’.101 Interpretation according to Article
31(3)(c) should be aimed at limiting normative conflicts and at coordinating
parallel treaty obligations.102 This broadening of the function of treaty interpret-
ation, however, involves a risk of complexity and divergence, considering the high
number and the diversity of sources that should be reconciled, as well as a risk of
oversimplifying the differences between similar but not identical concepts in the
different fields of public international public. For instance, it is possible to analyse
from this angle the diverging solutions reached by investment tribunals on the
economic ‘necessity’ invoked in a series of cases against Argentina.103 Indeed,
some investment tribunals have been more prone to distinguish, and others to mix,
the different meanings of ‘necessity’ under a specific investment treaty and under
the law of State responsibility. It is also noteworthy that an ad hoc annulment
committee recently recognized the interpretative value of human rights treaties and
the case law of monitoring bodies and regional courts of human rights in order to
establish the meaning of a ‘fundamental rule of procedure’ as a ground for
annulment, pursuant to Article 52(1)(d) of the ICSID Convention.104 This may
certainly help to ascertain the existence of general principles of procedural
fairness, but more precise analogies and parallels should deserve careful consid-
eration since the right to a fair trial in the context of international human rights
instruments applies neither to arbitration nor to international tribunals but, rather,
to State courts.
In order to mitigate the risks, the ILC carefully drafted its conclusion on
fragmentation. The objective of systemic integration would entail specifically only
two presumptions: a positive presumption that all questions not resolved expressly
in a treaty should be governed by general public international law and a negative
100
See Panos Merkouris, Article 31(3) VCLT and the Principle of Systemic Integration: Normative Shadows in Plato’s
Cave (Brill/Nijhoff 2015); Daniel Rosentreter, Article 31(3)(c) of the Vienna Convention on the Law of Treaties and the
Principle of Systemic Integration in International Investment Law and Arbitration (Nomos 2015).
101
Report on Fragmentation (n 9) para 415.
102
ibid paras 37–43, 417–23.
103
Diane A Desierto, Necessity and National Emergency Clauses: Sovereignty in Modern Treaty Interpretation (Martinus
Nijhoff 2012) 228–31.
104
Tulip Real Estate and Development Netherlands BV v Republic of Turkey, ICSID Case No ARB/11/28, Decision on
Annulment (30 December 2015) 86–92, 146, 152 (for application).
presumption that the parties ‘entering into treaty obligations’ did not intend to ‘act
inconsistently with generally recognized principles of international law’.105 The
first presumption is clearly echoed, for instance, in the 2013 decision in Accession
Mezzanine, when the Tribunal stated that the meaning of ‘expropriation’ was to be
determined under customary law, in the silence of the investment Treaty as to its
scope and content.106 The ILC also suggested that consistency between treaty
rules must be achieved, but it addressed the relevancy requirement with caution
when listing relevancy criteria: the identity of parties, the link with custom, the
common understanding of the object and the purpose or a specific term of the
treaty under interpretation.
This represented a sound but modest step forward in the direction of systemic
consistency. In doctrine, other attempts have been made that go beyond a simple
expansion of applicable law and that build on the overall structure of public
international law or on the relative specificity of investment treaties—but always in
the ambit of public international law. Arguments of this kind do not appear
frequently in the motives of arbitral decisions, but they occasionally have a decisive
effect and must then be underlined and discussed. Attention paid to systemic
constraints affords additional reasons to give comparatively more weight to one
element of treaty interpretation according to Article 31 of the VCLT or to pursue
the process of interpretation further on when several options are still open.
However, it also entails a risk of prejudgment that might endanger the said
process.
First, the principle of sovereignty may be relevant for a discussion on the policy
space left to States when implementing investment treaties. But an over-emphasis
on States’ intentions and State sovereignty must be avoided since it would call into
question the very purpose of investment treaties—that is, to limit the sovereignty
risk for foreign investors.107 In this regard, the motives of some arbitral decisions
addressing the intricate question of the applicability of the MFN clause to the
dispute settlement mechanism are debatable. In Berschader, the Tribunal
considered that interpretation according to the VCLT was inconclusive and that
a ‘reasonable interpretation of the intentions of the Contracting Parties’ must
consequently apply. It then oddly used a test of probabilities about States’
intentions and concluded that an ‘arbitration issue’ should be left outside the
scope of the MFN clause.108 In Daimler, consent was described as the
‘cornerstone’ of public international law. Although the reasoning is thereafter
carefully drafted in terms of Articles 31 and 32 of the VCLT, one may think that
this preconception influenced the resulting dismissal of the applicability of the
MFN clause to some components of the arbitration clause.109 Such an influence
was clearer in Wintershall, where States’ consent to be committed by the treaty was
somewhat confused with consent to arbitrate as the substance of the
105
Conclusions on Fragmentation (n 9) para 19.
106
Accession Mezzanine Capital LP and Danubius Kereskedöhz Vagyonkezelö Zrt v Hungary, ICSID Case No ARB/12/
3, Decision on Respondent’s Objection under Arbitration Rule 41(5) (16 January 2013) paras 67–8, 72, 77.
107
Todd Weiler, The Interpretation of International Investment Law: Equality, Discrimination and Minimum Standards of
Treatment in Historical Context (Martinus Nijhoff 2013) 31.
108
Vladimir Berschader and Moöse Berschader v The Russian Federation, SCC Case No 080/2004, Award (21 April
2006) paras 207–8.
109
Daimler (n 48), eg, when stating that ‘[a]ll BIT-based dispute resolution provisions . . . are by their very nature
jurisdictional’ (para 193), that all waiting periods are ‘pre-condition to the Host State’s consent to arbitrate’ (para
194) and, consequently, that they cannot ‘be bypassed’ as merely procedural or pertaining to admissibility.
commitment.110 This led to a presumption against the extension of the MFN

clause to the dispute settlement mechanism. In our view, and inasmuch as only
systemic motives justified the presumption, it simply echoes the old doctrine
according to which limitations of sovereignty cannot be presumed. The conse-
quence is a restrictive interpretation of States’ obligations because of sovereignty,
an interpretative principle that is not in conformity with positive international
law.111
Another idea grounded in systemic analysis is that most investment treaties are
specific because they are bilateral. In Daimler, the Tribunal, in order to pronounce
on the applicability of the MFN clause to an 18-month requirement in the
arbitration clause, considered that a ‘general interpretative approach’ was
necessary and would flow from the bilateral nature of the investment treaty
under interpretation. 112 Further on, the principle of contemporaneity is deemed
‘particularly pertinent in the case of bilateral treaties’113 and applied for the
interpretation of the term ‘treatment’ in the MFN clause, according to ‘the
meaning generally ascribed to the term by the broader international community of
States at the time’—that is, in 1991. A logical consequence would be that
plurilateral, or multilateral, treaties would offer a more evolutionary protection.
But one may doubt that interpretation over time really depends on the number of
parties, because it is mainly a question of substance and legal concepts.114
Focusing now on the substance of investment treaties, a seducing doctrinal
proposal is that the different elements of Article 31 be weighted differently
according to the nature of the treaty obligations, whether reciprocal, integral or
interdependent.115 If integral, more weight would be given to the object and
purpose and to the evolutionary interpretation; if reciprocal, more weight would be
given to subsequent agreement or practice. In this respect, the nature of
obligations in investment treaties, although reciprocal at first sight, may deserve
further analysis. Moreover, another substantive feature of investment treaties
would counterbalance this idea—the fact that rights are granted to private parties,
most notably direct access to arbitration.116 It would then favour an interpretation
promoting their subjective rights or at least legal stability, which has a strong
analytical value as well. However, according to the ILC’s final report on the MFN
clause, such analysis should not play any role in the interpretation of the clause.117
The counter-argument put forward in the report is that foreign investors did not
participate in the creation of international obligations. The ILC’s reluctance,
therefore, stems from the most traditional conception of interpretation—that it is
incumbent upon the lawmaker, which, in this case, is the State (ejus est interpretare
cujus est condere). However, as legal theory has established for a long time, the
110
Wintershall Aktiengesellschaft v Argentine Republic, ICSID Case No ARB/04/14, Award (8 December 2008)
para 160.
111
On a so-called ‘principle’ of non-restrictive interpretation, see Trinh Hai Yen (n 3) 147–51. The author promotes
the idea that sovereignty would nevertheless be an appropriate argument, but after implementation of the objective
elements of Article 31 of the VCLT, and adds that, in practice, it would be extremely rare.
112
Daimler (n 48) para 160.
113
ibid para 220.
114
cf s III in this article.
115
Julian Arato, ‘Accounting for Difference in Treaty Interpretation over Time’ in Andrea Bianchi, Daniel Peat and
Matthew Windsor (eds), Interpretation in International Law (OUP 2015) 222.
116
Roberts (n 61) 202.
117
Final MFN Report (n 10) paras 157, 173.
doctrine of ‘authentic’ interpretation—in the sense used by Emer de Vattel—is not

beyond criticism either.
As can be seen from these examples, systemic arguments are based on different
conceptions of legal consistency and produce opposing trends and lengthy
discussion in the context of international investment law. One may fear that
their integration into the interpretative process may create more confusion than
clarity, all the more so because there is no last resort adjudicative authority to
combine them harmoniously. On the basis of their own vision of systemic
integration, some interpreters would favour States’ intent over any interpretative
mean, while others would favour private persons’ rights and interests in an
enlarged international community and still others would plead for legal security. A
risk of divergence thus exists if systemic reasoning becomes a prominent factor in
the interpretation of treaties.
VI. CONCLUSION
Each interpreter and each commentator has his or her own ideas on how to
interpret a treaty provision. These ideas are grounded in legal traditions, doctrinal
preferences and personal experience. At the same time, each system of law
develops rules, recommendations or guidelines in order to orient interpretation in
a certain direction, lest the interpreter be afforded too much power under the
cover of interpreting the law. Under public international law, Article 31 of the
VCLT offers not only a rule but also a method to interpret treaties. A synthetic
expression of this method appears in Article 31(1), from which other provisions
unfold in concentric circles, but always in connection with a centre of gravity—
that is, the text under interpretation.
Here is the main guideline: textual interpretation. This does not mean a literal
interpretation because the context, broadly understood in Article 31(2), and the
object and purpose of the treaty interact with the ordinary meaning of the terms
under interpretation. These elements must be assessed altogether, which leaves
room to adapt to the specificities of each kind of treaty, whether because of its
content or because of its configuration according to the number of parties, the
nature of obligations or the beneficiaries of the rights. Interaction normally
provides a progressive restriction of the range of possible interpretations, and
additional technics such as effectiveness and reasonableness are thereafter
available. Investment tribunals have become more and more aware of the
advantages of such methodology. Interpretation according to Article 31 frames
in an appropriate manner the interpreters’ discretion without denying it. Thus, this
article shares the view that Article 31 of the VCLT is a ‘cogent method’ for treaty
interpretation.118
In addition, interpretation according to Article 31(3) has become crucial in
international law thinking for some years now. The interpretative means involved
represent the outer circle among all elements that may interact with the text of a
treaty—subsequent agreement or practice of the parties as well as all relevant rules
of international law. These means are thought especially useful in order to protect
the international legal order from a risk of fragmentation into specialized and
118
Arsanjani and Reisman (n 15) 598.
autonomous legal regimes, such as international investment law. This preoccupa-

tion about fragmentation and consistency is not necessarily familiar to all lawyers,
but it has an impact on international investment law and arbitration. The ILC has
launched a series of work relating to treaty interpretation, whose results, final or
provisional, have easily found an application in this field: the emergence of a
principle of ‘systemic integration’ operating through Article 31(3) to link the
different fields of international law; criticism and advice about the interpretation of
the MFN clause, especially in connection with the settlement of investment
disputes through mixed arbitration; and an emphasis on the authentic interpret-
ation of treaties over time that blurs the distinction between the interpretation and
modification of treaties. In the context of international investment law, these
proposals have the potential to rebalance the relationships between States, foreign
investors and other stakeholders.
What is unclear, however, is whether consistency concerns and the remedies
thereof really help interpreters of treaties to achieve their task. There is a large
diversity of views, doctrinal trends and expectations about consistency, and,
consequently, there would be an increased risk of interpretative fragmentation if it
were to become a determinant factor. Until now, the method of Article 31 has
proven efficient in international law without it and well balanced in relation to the
interplay of its different elements. It has gained trust in investment arbitration as
well. Thus, it might be sufficient to ask all kinds of interpreters to apply Article 31
of the VCLT as it reads, simply and carefully.
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ICSID Review, Vol. 31, No. 2 (2016), pp.

SPECIAL FOCUS ISSUE

Abstract—The general rule on the interpretation of treaties as codified in Article 31

II. ARTICLE 31 AS AN OBJECTIVE METHOD OF

III. ARTICLE 31 IN THE INTERPRETATIVE PROCESS

A first and challenging difficulty lies in the relative importance to be attached to

principles.47 In addition, the meaning of a legal concept is more prone to evolve

IV. ARTICLE 31 AND INTERPRETATION OVER TIME

of the treaty. Without being rare, interpretation according to subsequent

V. ARTICLE 31 AND CONSISTENCY CONCERNS

commitment.110 This led to a presumption against the extension of the MFN

doctrine of ‘authentic’ interpretation—in the sense used by Emer de Vattel—is not

autonomous legal regimes, such as international investment law. This preoccupa-

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