State Control over Interpretation of Investment Treaties

Many critiques of investment treaties relate to concerns that tribunals’ interpretations of these agreements depart from states’ understandings of the texts, and do so in unpredictable ways leading to expensive litigation and unforeseen liability. States, however, can take steps to make their intentions regarding the texts clearer, and reduce the risk of uncertain outcomes.

This policy paper discusses these possible steps, and the legal rules supporting them, providing guidance to states, attorneys, and tribunals regarding the important role of states in clarifying vague standards in and managing liability under existing investment treaties. A second paper, published by the Global Economic Governance Programme at Oxford University, discusses opportunities for states to shape interpretation of certain particularly problematic and controversial issues in investment law: the meaning of the Fair and Equitable Treatment standard, the role of the Most-Favored Nation Obligation, and the ability of shareholders to bring claims for harm to the company.