Symposium on the VCLT, ILC and Investor-State Disputes: The Vienna Convention on the Law of Treaties: The ILC’s Magnum Opus for International Investment Law and Arbitration?

Since it was adopted in 1969, the Vienna Convention on the Law of Treaties (VCLT) has come to be widely regarded as one of the International Law Commission’s (ILC’s) greatest successes. In a publication celebrating the seventieth anniversary of the ILC, the VCLT, along with two other international treaties, was described as being:

at the heart of international relations among States, relied upon on a daily basis by officials in foreign ministries, diplomatic and consular missions around the world, legal practitioners, judges in international courts and tribunals, and increasingly also national judges.

The ILC itself was established through United Nations General Assembly Resolution 174 (II) of 21 November 1947. With the ILC marking its seventy-fifth anniversary this month, the status of the VCLT appears only to be growing in importance. It has gained, in particular, an increasingly central role in the resolution of the myriad issues of treaty law that arise in investor-State disputes. This Symposium reflects on the role of the VCLT in investor-State disputes in order to highlight the legacy and importance of the ILC’s work for modern international investment law and arbitration, and the likelihood of its sustained influence into the next decades. 

The Symposium features posts from authors of several chapters from the recently-published book, The Vienna Convention on the Law of Treaties in Investor-State Disputes: History, Evolution and Future, co-edited by the authors of this post. Our book focuses on the VCLT’s influence on and future potential role in international investment law generally and investor-State disputes in particular. It considers how the VCLT’s provisions have been invoked, interpreted, and applied by States parties in their treaty-making processes, by practitioners and by parties in investor-State dispute settlement (ISDS) proceedings, and by tribunals in investor-State arbitral decisions and awards. Drawing inspiration from our book’s chapters, this Symposium spotlights the enduring importance of the VCLT and the ILC’s work to achieve it. By revisiting these themes, it is possible to gain insights intohow international investment law has emerged and developed, how it is practised today, and how it might evolve into the future. This post presents the themes animating this Symposium and previews the posts that will be published throughout this week.

The Sustained Relevance of the VCLT in Investor-State Disputes

The VCLT – as the ‘treaty on treaties’ – has been, and continues to be, influential in numerous fields of public international law. As our book demonstrates, and as the posts in this Symposium will highlight, international investment law and investor-State dispute settlement are not exceptions to this trend. Articles 31-33 on treaty interpretation – perhaps unsurprisingly – have been particularly influential and well-cited in investment disputes. Investment tribunals have also frequently invoked other provisions of the VCLT to resolve a range of treaty law issues arising in investor-State disputes. This includes, prominently, references to Article 27 to resolve the status and role of domestic law, references to Article 28 to resolve questions related to arbitral jurisdiction ratione temporis, and references to Articles 30, 41 and 59 to resolve questions related to the interaction between investment treaties and other bodies of international law. The significant number of references to the VCLT in investor-State disputes makes this a key body of practice relevant to understanding how international courts and tribunals interpret and apply the VCLT’s rules on treaty law.

The recognition of many of the VCLT’s provisions as reflective of customary international law has further expanded its potential scope and impact in investor-State disputes. At the time of writing, the VCLT had been ratified by 116 States. However, the VCLT has frequently been applied by investment tribunals to treaties to which it does not apply as a matter of treaty law. This has meant that tribunals have, inter alia, applied the VCLT to investor-State disputes pursued under treaties which entered into force prior to the VCLT itself entering into force. It has also prompted tribunals to apply the VCLT when interpreting the provisions of key instruments that entered into force prior to the VCLT, including the ICSID Convention (see e.g. Fedax N.V. v. Venezuela, Decision on Jurisdiction, 11 July 1997, ¶¶ 20-21) and to treaties between parties that are not themselves both party to the VCLT (see e.g. Ethyl Corporation v. Canada, Award on Jurisdiction, 24 June 1998, ¶¶ 50-52). These practices indicate an emerging consensus amongst investment tribunals that several of the VCLT’s provisions can be said to (relatively uncontentiously) reflect rules of customary international law. References to Articles 6 (on the capacity of States to conclude treaties), 26 (pacta sunt servanda), 27 (internal law and the observance of treaties), 28 (non-retroactivity of treaties), and 31-33 (on interpretation), in particular, demonstrate that the contents and applicability of these rules as a matter of customary international law are not seriously disputed by parties to investor-State arbitral proceedings, even if their precise impact for the application or interpretation of the treaty at issue might be. 

Moreover, beyond the application of the provisions of the VCLT as a matter of customary international law, the VCLT has also served as a source of guidance and inspiration in other contexts. In investment disputes this impact has been particularly clear in relation to references to the VCLT by tribunals seeking to resolve disputes related to the application and interpretation of unilateral acts. This includes the application of the VCLT’s provisions on interpretation by analogy to interpret foreign investment protection legislation. The VCLT has also informed the practice of investment tribunals vis-à-vis the identification and analysis of general principles of law. Various tribunals have noted, for instance, that certain general or fundamental principles of international law are reflected in the VCLT, including principles of good faith, pacta sunt servanda, and non-retroactivity.

Some States are now even recognising through express treaty provisions the importance and potential utility of the VCLT for resolving the many difficult issues of treaty law that might arise in investment disputes. The inclusion of such provisions in treaties will provide greater opportunities for international investment tribunals to use and elaborate the VCLT’s rules. Coupled with the likely continued accumulation of arbitral awards and decisions engaging with the VCLT, they may also in time produce recognition that further provisions of the VCLT also reflect an evolving customary international law on treaties.

The Enduring Importance of the ILC’s Drafting Records for the Interpretation and Application of the VCLT

The road towards the VCLT was winding and iterative. Most histories of this process begin in the late 1920s and 1930s, noting the various efforts in those years to marshal the lessons emerging from the increased study and practice of international law to develop a modern law of nations. For example, as early as 1926, the League of Nations Committee of Experts on Codification of International Law included on its agenda, among twenty other topics, the codification of rules on the conclusion and drafting of treaties. Such efforts were also pursued by regional groups and academics. Following World War II, the customary international law rules relevant to the negotiation, validity, and interpretation of treaties had grown into a relatively comprehensive body of rules through State practice and opinio juris. This growing body of practice meant that the topic of treaty law elicited further interest from States, international organisations, and international law scholars and practitioners as a potential focus for codification efforts. In 1949, the ILC, at its first session, identified the law of treaties as a ‘priority topic’ for possible codification and clarification. The ILC’s subsequent approach and effort, which would continue for seventeen years until 1966 is well-documented, including through publicly available preparatory documents and photographs that have been digitized and made available in the UN’s Audiovisual Library

As the contributors to this Symposium highlight, these records have played an enduring role in investor-State disputes, and have been referred to by parties and tribunals alike to interpret and apply the VCLT’s rules on key issues of treaty law. In many ways, the VCLT has found application through reference to the copious documentary records that reflect the ILC’s detailed debates about different approaches to resolving key issues of treaty law and practical reflections on how those approaches had found favour in existing cases or might be applied to hypothetical examples. In this sense, the success of the ILC’s engagement with treaty law is limited not just to the final output of the VCLT: the process towards the VCLT itself holds enduring importance in how the VCLT has come to be interpreted and applied in modern fields of international law, including in investment law and arbitration. As such, the VCLT’s origins, history, and achievements – reflecting a forty-year track record of use and implementation, and an even longer period of development – have been highly relevant to shaping how international investment law and ISDS have developed and are likely to have a continuing and important impact on their development over the coming decades.

Introduction to the Symposium Posts

The posts in this Symposium reflect on the enduring legacy of the ILC’s work on the VCLT – including its vision for the VCLT and its drafting efforts to achieve it – for modern international investment law and investor-State dispute settlement.

On Tuesday, Judge Charles N. Brower draws on the analysis in the book chapter that he co-authored to present competing theories of interpretation in respect of Articles 31 and 32 of the VCLT. He argues in favor of the ‘hierarchical’ approach to interpretation rather than the ‘crucible’ approach. Under such approach, a tribunal stops its interpretive analysis at Article 31 if it has established an ‘ordinary meaning’ of the text following its application, thereby eschewing any reliance on Article 32.

On Wednesday, Roberto Castro de Figueiredo draws on his book chapter to discuss the ‘paradoxal’ relationship between the VCLT and the ICSID Convention. He examines the development of the Salini test, which is often used by investment tribunals to approach the definition of ‘investment’ under Article 25 of the ICSID Convention. He demonstrates through reference to past arbitral decisions that there is an inconsistency between how the VCLT’s rules on interpretation are usually applied to treaty terms, and the special approach used for developing the definition of ‘investment’ in the Salini test. He concludes that, despite stated deference by ICSID tribunals to the VCLT rules of interpretation, significant misapplication and disregard exists in ISDS decision-making when it comes to defining the concept of ‘investment’ under the ICSID Convention. 

On Thursday, Barton Legum and Anna Crevon, examine the complexities of treaty interpretation for treaties that have been authenticated in different languages. They draw on their analysis in the book of Article 33 of the VCLT to highlight that priority is to be given to the authentic texts. When faced with a discrepancy in two or more versions of the treaty text, the treaty interpreter must first identify which texts have been authenticated. Article 33 of the VCLT rejects the idea of a hierarchy between the authentic texts but establishes a hierarchy of interpretation principles.

On Friday, Agnes Rydberg and Malgosia Fitzmaurice draw upon their co-authored book chapter to examine how investment tribunals have addressed aspects of temporality in practice. They assess the singularities of international investment arbitration vis-à-vis general international law, examining three different elements of temporality related to: (a) the entry into force and non-retroactivity of treaties; (b) provisional obligations that arise pending the entry into force of a treaty; and (c) temporal issues pertaining to the termination of a treaty.

On Saturday, Wesley Pydiamah, Julien Fouret, Athina Fouchard and Dimitrios Papageorgiou build upon their co-authored book chapter to examine Article 29 of the VCLT. They explain that Article 29 implicitly codifies the Moving Treaty Frontiers (MTF) rule, which provides that when a territory is undergoing a change of sovereignty, it moves out of the treaty regime of the predecessor State and into that of the successor State. Their post draws upon various examples of practice, including language appearing in UK BITs and recent cases involving Crimea, to discuss the role of the VCLT in resolving disputes concerning the territorial application of treaties, including in the context of the ongoing war in Ukraine. 

Finally, on Sunday, we provide a concluding post, summing up the Symposium. We discuss the role for the VCLT for resolving new and emerging issues in investment treaty disputes. We also examine the legacy of the ILC’s work processes, including the ways in which the ILC’s approach to drafting the VCLT could inform other multilateral approaches for the progressive development of international investment law and dispute resolution practice, including UNCITRAL’s Working Group III.

As each of the posts in this Symposium demonstrate, the VCLT has often played a pivotal role in the resolution of a range of issues that arise in investment treaty practice and investor-State disputes and its impact is thus not just theoretical but very real. This series of posts thus spotlights the enduring legacy of the ILC’s work on the VCLT to open avenues for new and emerging ideas related to the VCLT’s possible future application and impact on the development of investment law and arbitration into the future.

The promo code 20VCLT22 offers a 20% discount on the retail price of The Vienna Convention on the Law of Treaties in Investor-State Disputes: History, Evolution and Future in the Wolters Kluwer eStore. The code is valid through to 28 February 2023. 

Esmé Shirlow is Associate Professor at the Australian National University College of Law, and maintains a practice as a legal advisor and consultant in the fields of public international law and international investment law and arbitration.  Kiran Nasir Gore is Professorial Lecturer at the George Washington University Law School, and an arbitrator, dispute resolution consultant, and counsel.