| In recent years,numerous problems have arisen in the interpretation of the treaty by the tribunal and the legitimacy of the Investor-State Dispute Settlement(ISDS)Mechanism has also faced crisis.In view of the long and complicated procedures required for the change of the ISDS Mechanism or the amendment of the International Investment Agreement(IIA),it is a more efficient choice to distribute the power of treaty interpretation in international investment arbitration.The general and ambiguous nature of the IIA clause has given arbitral tribunals enormous discretionary power in treaty interpretation.However,the distribution of power of treaty interpretation has not always been this way and has always been in dynamic change.With the development of overseas investment,the rise of InvestorState Tribunals and the withdrawal of contracting states,treaty interpretation has changed from being dominated by legislative interpretation by contracting states to judicial interpretation by arbitral tribunals.However,under the current tribunal-led model,many problems have arisen in treaty interpretation.Taking the interpretation of the Fair and Equitable Treatment Clause as an example,the arbitral tribunal,as the most active interpreter,facing criticisms like expanded interpretation,inconsistent interpretation,and arbitrary application of treaty interpretation rules during the interpretation of the clause.So,the treaty interpretation power of the tribunal should be limited through the correct application of the Vienna Convention on the Law of Treaties(VCLT).Also,the participation of the contracting state in the treaty interpretation should be promoted.The participation of state parties in treaty interpretation is of great significance.Arbitral tribunal interpretation itself has endogenous defects,including lack of precision in the text of IIA clause,the limitations of traditional treaty interpretation methods,and the conflict between the mixed public and private nature of international investment disputes and the commercialization character of international investment arbitration.With the change of the demands of contracting parties under globalization,the issue of sovereignty has become the focus of contracting parties’ attention and it is essential to enhance the influence of the interpretation of contracting states.It is worth noting that there are controversies about the effectiveness of the interpretation of contracting parties,such as the argument that it violates the principle of due process and the protection of investors’ rights.However,the validity of the interpretation of contracting parties should not be denied directly.In fact,the interpretation of the contracting states in general does not violate the principles of due process and protection of investors’ interests.Also,limits should be set on the interpretation of contracting states,such as maintaining balance between the interpretation of the contracting states and the arbitral tribunal,considering the effects on the rights of investors,and distinguishing between treaty interpretation and treaty amendment.Contracting parties and arbitral tribunal both having the power of interpretation,which could leads to conflicts.VCLT provides a basis for the balance between the interpretation of the contracting parties and the interpretation of the arbitral tribunal.The joint interpretation by the parties belongs to subsequent agreement as an element of interpretation and the unilateral interpretation by the non-disputing parties,although has no binding,also has the possibility of constituting a subsequent agreement or subsequent practice.In practice,the Free Trade Commission(FTC)has limited the application and raised the standard of application through the interpretation of Fair and Equitable Treatment Clause in North American Free Trade Agreement(NAFTA),and this interpretation has been adopted by the arbitral tribunal in several arbitration cases.Considering the international background of the return of sovereignty and the existing state practice,China should adopt the clause of interpretation by non-disputing parties and joint interpretation by contracting parties in the treaty,and at the same time use such clauses and arbitration rules of arbitration institutions to express opinions on the interpretation of treaties to obtain the initiative in investment arbitration. |
