The Interpretation of Investment Treaties

409 Pages·2014·1.533 MB·English

by  Trinh Hai Yen

The Interpretation of Investment Treaties
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International Litigation
in Practice
General Editors
Loretta Malintoppi
Eduardo Valencia-Ospina
Advisory Board
David Anderson
John R. Crook
Gilbert Guillaume
Pieter Kooijmans
Sean D. Murphy
Alain Pellet
Brigitte Stern
Prosper Weil
Rüdiger Wolfrum
Sir Michael Wood
VOLUME 7
The titles published in this series are listed at brill.com/inli
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The Interpretation of Investment
Treaties
By
Trinh Hai Yen
LEIDEN | BOSTON
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For Hieu Anh and Hieu Minh
∵
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Contents
Acknowledgements ix
List of Abbreviations xi
Table of Cases xii
Introduction 1
1 Interpretive Problems of Traditional Investment Treaties and the
Inconclusive Search For Causes and Solutions 8
1 Inconsistent and Unintended Interpretations of Investment Treaty
Terms 9
2 Diagnosed Causes and Suggested Solutions 16
2.1 Textual Indeterminacy and Imbalance 16
2.2 Structure and Nature of Investor-State Arbitration 19
2.3 The Approaches of Arbitrators 25
Conclusion 30
2 The Neglect and Misapplication of International Rules on Treaty
Interpretation in Investment Treaty Arbitrations 32
1 Legal Basis and Overview of the Arbitral Use of Interpretive Tools in
Interpreting Investment Treaties 36
1.1 International Rules on Treaty Interpretation Codified under the
Vienna Convention on the Law of Treaties 36
1.2 M eans of Interpretation under the General Rule 43
1.3 S upplementary Means of Interpretation 64
2 Arbitral Neglect and Misapplication of Interpretation Rules 75
2.1 D isregard of All or the Required Means of Interpretation under
International Law 76
2.2 Overreliance on Judicial Decisions and Scholarly Writings 83
2.3 Liberal Reading of the Treaty Object and Purpose 91
Conclusion 98
3 Rectifying the Neglect and Misapplication of International Rules
on Treaty Interpretation 101
1 Proposed Approaches to Rectify the Problematic Methodologies in
Interpreting Investment Treaties 104
1.1 Adopting and Exhausting the Multiple means of Interpretation
under the VCLT 104
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contents vii
1.2 Identifying and Distinguishing the Role of the Interpretational
means in Accordance with the VCLT Rules 107
1.3 Considering Circumstances of Treaty Conclusion 108
2 Illustrations on the Need and Possible Effects of the Proposed
Approaches 115
2.1 MFN Provisions 116
2.2 Interpreting the “Fair and Equitable Treatment” Provision 129
3 R elevance of Restrictive Interpretation and the No-Restriction
Presumption Principle in International Investment Law 147
Conclusion 152
4 A Preliminary Search for State Intent in the Emergence and
Development of Investment Treaties 153
1 Existing International Regulation on Foreign Investment before
the Emergence of Investment Treaties 154
1.1 International Documents Relating to Foreign Investment 154
1.2 Customary International Law 156
1.3 FCN Treaties 156
2 Where the Minds of Proponents and Opponents of Investment
Treaties Meet 159
2.1 From the First Investment Treaties to the First Investor-state
Arbitration 159
2.2 The End of 1980s-Present 164
3 A Case Study: Incorporation of the Provisions on Investor-state
Arbitration in Investment Treaties 167
Conclusion 170
5 Law-Making Options to Address the Interpretive Problems
of Investment Treaties 173
1 Costs and Benefits of Signing Investment Treaties 174
1.1 Inconclusive Rewards 174
1.2 Paying the Price of Signing Investment Treaties 179
2 Available Law-Making Options for States 187
2.1 Terminating Investment Treaties 187
2.2 Removing Investor-State Arbitration 189
2.3 Designing New Investment Treaties 191
3 T he ASEAN Countries’ Choice of a Renegotiated Regional Treaty 194
3.1 Overview of the Bilateral Treaties of ASEAN Countries 194
3.2 ASEAN’s Regional Investment Treaties before 2009 197
3.3 The 2009 ASEAN Comprehensive Investment Agreement 198
Conclusion 202
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viii contents
6 Controlling State Commitments in the ACIA Provisions 203
1 Clarifying the Coverage of the ACIA Benefits 204
1.1 Specific Approval of Investments and Compliance with National
Laws, Regulations and Policies 206
1.2 Characteristics of Investment 207
1.3 Clarifications of Investment Forms 208
1.4 Dual Nationality 209
1.5 Denial of Benefits 209
2 Controlling State Commitments in the ACIA Substantive
Provisions 211
2.1 Specifying the Meanings of Substantive Standards of
Treatment 214
2.2 Permissible Deviations from Substantive Standards through
Provisions on Exceptions 227
2.3 Synchronizing the Interpretive Problems of Substantive Provisions
under Traditional Investment Treaties through the MFN
Clause 238
3 Controlling State Commitments in the ACIA Procedural
Provisions 241
3.1 The Development of the ISA Provisions of the ACIA 241
3.2 Clarifications and Additions in the Provisions on Investor-State
Arbitration 247
Conclusion 255
Conclusion 257
Appendix A Matrix of Means of Interpretation adopted by Arbitral
Tribunals to Interpret Investment Treaties 261
Appendix B List of Decisions and Awards Not in English 332
Appendix C 2009 Asean Comprehensive Investment Agreement 334
Bibliography 367
Index 378
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Acknowledgements
This book is based on my PhD research that I conducted at the National
University of Singapore between 2010 and 2013. I have taken an avid interest in
international investment law since the first investment treaty arbitration
against Vietnam was reported in 2005.1 I began work on the subject with a
graduation paper on Vietnamese bilateral investment treaties in the MALD
program at the Fletcher School of Law and Diplomacy in 2007.
I owe special gratitude to my supervisor, Professor Sornarajah, for his con-
stant guidance and warm encouragement. His insistence on an open mind
while writing and our discussions on topics of investor-state arbitration have
inspired me to be confident and bold in my approach to doctoral research.
Likewise, I am deeply indebted to Professor Jeswald Salacuse for valuable com-
ments on a paper I presented at the Asian Society of International Law 3rd
Biennial Conference in Beijing, China in 2011. On the basis of his comments,
I kept challenging the arguments I have put forward in this book until I was
convinced that the evidence for them was solid and overwhelming. Thanks are
also due to members of my examination committee, in particular Professor
Stephen Girvin for chairing the committee. I am grateful for the generous
President’s Graduate Fellowship I received from the NUS during my PhD study
as well as to the very helpful and timely assistance from the staff of the NUS
School of Law, particularly Normah Bte Mahamood and Elizabeth Chua. I also
would like to thank my professors at the Fletcher School, especially Professor
Joel Trachtman, Professor Jeswald Salacuse, and Professor Michael Glennon,
for their excellent teaching and kind encouragement during the MALD pro-
gram, which has always inspired my studies in public international law, includ-
ing this book. I am grateful to Daren Tang, to officials at the ASEAN Secretariat,
in particular to Pham Quynh Huong and Yap Lai Peng and to officials at the
Vietnam’s Ministry of Investment and Planning, namely, Do Van Su, Vu Thi
Chau Quynh, Vu Hong Nga, Nguyen Duc Anh, for interviews, discussions and
materials on ASEAN negotiations of regional investment treaties. None of
those mentioned above, however, bears any responsibility for any errors or
omissions in this book.
1 Investment Law and Policy News Bulletin, 27 May 2005, “Businessman uses Dutch BIT to sue
Vietnam for losses,” available at http://www.iisd.org/pdf/2005/investment_investsd
_may27_2005.pdf. See also Thanh Nien News, Overseas Vietnamese investor sues Vietnam
gov’t, available at http://www.thanhniennews.com/2005/pages/20055232229160.aspx.
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