OUP Investment Claims Webinar Series

1. OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Moderator: Ian LairdSpeakers: Andrea Bjorklund, Todd Weiler, Frédéric G. Sourgens and Borzu Sabahi 20 October 2014, 4pm (GMT), 11am (EST)

2. OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Ian A. Laird • Partner, Crowell & Moring LLP, Washington, DC • Editor-in-Chief and Co-founder of OUP’s InvestmentClaims.com • Adjunct Professor – Georgetown University Law Center, and Columbia Law School • Co-Director, International Investment Law Center, International Law Institute, Washington, DC OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014

3. www.investmentclaims.com A module of Oxford Reports on International Law (ORIL) Founded in 2008 Investment Claims (IC) is an acclaimed service for both practitioners and academic users. Regular updates mean that subscribers have access to a fully integrated suite of current and high quality content including: • Arbitration awards and decisions with peer-reviewed case reports and analysis • Bilateral investment treaty sets • Multilateral treaties • Investment treaty overviews from expert correspondents • Key monographs • Journal and yearbook articles • Arbitral rules • National legislation • English translations of key portions of non-English decisions OUP Investment Claims Webinar Series, A. Laird, 20 October 2014

4. OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? ‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean -- neither more nor less.’ ‘The question is,’ said Alice, ‘whether you can make words mean so many different things.’ ‘The question is,’ said Humpty Dumpty, ‘which is to be master -- that's all.’ Lewis Carroll, Through the Looking Glass (1872). OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014

5. OUP Investment Claims Webinar Series Is the Vienna Convention on the Law of Treaties Dead in BIT Arbitration? Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331. Article 31 - General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. OUP Investment Claims Webinar Series, Ian A. Laird, 20 October 2014

6. A Nascent Common Law The Process of Decision making in International Investment Arbitration Freddy Sourgens October 20, 2014

7. Problem 1: VCLT Formally Inapplicable Between States No Corporates Allowed Sovereign Equality & Objective Meaning Textualism A Nascent Common Law; Sourgens, 20 October 2014

8. Problem 2: Investors Are Third Parties Arbitration Without Privity Contract Law And Suicide Pacts VCLT And Allocative Mechanisms Need Reasonable Middle Ground A Nascent Common Law; Sourgens, 20 October 2014

9. Formal Answer: IIAs Are Unilateral Acts Formal Dimension – Elevation of Investor Practical Implications – Vesting Mobil: No Restrictive Interpretation A Nascent Common Law; Sourgens, 20 October 2014

10. Functional Answer: Reliance Redivivus Go Beyond Text Objective & Subjective State Context Objective & Subjective Investor Context Weigh Reciprocal Reliance Interests A Nascent Common Law; Sourgens, 20 October 2014

11. Operational Coda: Common Law Rising Persuasive Precedent Facts Over Text • Interested in more? Frederic Gilles Sourgens, A Nascent Common Law (Brill/ Nijhoff: 2015) A Nascent Common Law; Sourgens, 21 October 2014

12. The Place for Historical Analysis in Investment Treaty Interpretation • Todd Weiler, SJD • Barrister & Solicitor • PhD Candidate, Western University Department of History, Canada • 20 October 2014

13. How to Interpret Investment Treaties • Investment treaties form part of the corpus of public international law (whether any explicitly say so or not). • Too many investment treaty tribunals have said, on too many occasions, that VCLT Articles 31 & 32 should be applied for one to seriously expect future tribunals to choose a different path. • On the other hand, the VCLT approach is supposed to reflect the customary international law rules of interpretation. Since these rules have been applied in an incredibly uneven way, there may still be room for Freddy’s reclamation project! Should [must] the VCLT serve as “Applicable Law”? • The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014

14. VCLT Article 31: • A treaty shall be interpreted in good faith in accordance with the ordinarymeaning to be given to the terms of the treaty in their context and in the light of its object and purpose • … • 3.There shall be taken into account, together with the context: • … • (c) any relevant rules of international law applicable in the relations between the parties. • Believe it or not, this provision was actually intended to cover the interpretative principle of contemporaneity. • Before construing any provision, one must consider the specific, historical,context within which the treaty was concluded. Where Does Historical Analysis Fit? How to Placate Your Inner Positivist… • The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014

15. The Raging Bugbear of Indeterminacy • Textual indeterminacy always provides an open door to ideological freelancing on the part of well-meaning arbitrators • Ideology is best identified as using statist — liberal axis • Ideological freelancing converts ostensible fidelity to the treaty text into fidelity to any given arbitrator’s ideological predilections. • In other words, the devil really can hide in the details (where “details” means: • Interpretative discretion caused by indeterminacy. A Necessary, but Regrettable, Element of Interpretation? • The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014

16. Introducing the Ying & Yang of Orthodox Public International Law: • Sovereign Equality • Good Faith • And international investment law’s grundnorm: • When expressed positively: Equality • When expressed negatively: Non-discrimination • Add a dash of the correct interpretative method, historical analysis, and you’re good to go! The Methodological Antidote Putting the First Principles of Public International Law to Work • The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014

17. Historical context involves time and place. Here are some possible examples: • For Western countries: • Older BITsmore likely to have a liberal than statist context. • For former Soviet and Eastern Bloc countries: • Older BITs more likely to have a statist than liberal context. • For the US and Canada: • More recent treaties were concluded in a more statist context. • To apply the methodology correctly, one needs the right evidence. A Curative for the Worst Kind of Inconsistency Neutrality in Application • The Place for Historical Analysis in the Interpretation of Investment Treaties, Todd Weiler, 20 October 2014

18. The Vienna Convention and Investment Arbitration Borzu Sabahi October 20, 2014 Dr. Borzu Sabahi practices international arbitration in the law firm of Curtis Mallet-Prevost Colt & Mosle LLP. He is also: an Adjunct Professor at Georgetown and Columbia Law Schools, Co-Director of the International Investment Law Center of the ILI, and Editor of Oxford’s Investment Claims. Email: bsabahi@curtis.com Disclaimer: views expressed are only those of Mr. Sabahi and cannot be attributed to Curtis Mallet or its clients.

19. The VCLT: A Flexible Tool Flexibility • VCLT Articles 31 & 32 have it all: textualism (ordinary meaning), purpose (objective and purpose), context, intentions, travauxpreparatoire, and of course good faith • VCLT is used in all international law disciplines Growth of international courts? Fragmentation? Role of interpreters? Precedent? VCLT and Investment Arbitration Borzu Sabahi October 20, 2014

20. VCLT State-to-State Paradigm Using VCLT in practice? • Systematic approach? • When to move from ordinary meaning to secondary sources, e.g., travaux? • Ambiguity? Any threshold? • Role of intentions of drafters? VCLT Art. 31(4) VCLT’s State-to-State paradigm • Who’s intentions? VCLT and Investment Arbitration Borzu Sabahi October 20, 2014

21. VCLT - Examples of Possible Shortcomings (1) Joint Statements regarding meaning of treaty provisions? • VCLT 31(2): agreement or instrument in connection with conclusion of a treaty ? • In a pending case? E.g., the 2001 FTC Notes of Interpretation • Did VCLT drafters contemplate this? • Solution: caution. See Sir Franklin Berman’s Dissenting Opinion in IndustriaNacional de Alimentos, S.A. et al v. Peru, ICSID Case No. ARB/03/4, Annulment Proceedings, September 5, 2007 VCLT and Investment Arbitration Borzu Sabahi October 20, 2014

22. VCLT -- Examples … (cont.) (2) What about unilateral statements to shed light on the meaning of BITs? (3) What about the positions taken by States in investment disputes? subsequent practice? (4) What about a decision by Competent Authorities under NAFTA Art. 2103(6) that a measure is not an expropriation? Conclusion VCLT despite the deficiencies remains a great tool Some effort however must be made to find out how VCLT would or should apply in investor State arbitration VCLT and Investment Arbitration Borzu Sabahi October 20, 2014

23. Treaty as Contract? What difference does the VCLT Make? Andrea K. Bjorklund, McGill University Faculty of Law 20 October 2014

24. Applicable Law in Investment Arbitration “A Tribunal established under this Section shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.” (NAFTA Article 1131(1)) Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

25. Applicable Law in Investment Arbitration The Vienna Convention on the Law of Treaties is the applicable law for the interpretation of the treaty itself • Conventional Law • Customary International Law Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

26. Applicable Law in Investment Arbitration The claimant has an arbitral contract with the respondent • Does the VCLT apply to that contract as well? • Yes, insofar as the terms of that contract are dictated by the language of the treaty Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

27. The Vienna Convention in Practice Aims of treaty interpretation To ascertain the intention of the parties? To ascertain the meaning of the text? To ascertain the object and purpose of a treaty and then to interpret it in that light? All of the above? Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

28. The Vienna Convention in Practice The stated general rule of interpretation can be summarized as follows: the text must always be taken as the starting point. As such, no doctrine of restrictive or extensive interpretation of the text of the treaty should prevail. Interpretation of the text should be based on an “ex ante neutral approach”. Laurence Boisson de Chazournes (dissenting), Garanti Koza LLP v. Turkmenistan, ICSID Case No. ARB/11/20 (3 July 2013) (internal citations omitted) Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

29. Treaty as Contract “In answering this question [who, court or arbitrator, bears primary responsibility for interpreting and applying Article 8’s local court litigation provision], we shall initially treat the document before us as if it were an ordinary contract between private parties. Were that so, we conclude, the matter would be for the arbitrators. We then ask whether the fact that the document in question is a treaty makes a critical difference. We conclude that it does not.” U.S. Supreme Court BG Group Plc. v. Republic of Argentina 572 US ____ (2014) Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

30. Treaty as Contract “The Court begins by deciding a different case, “initially treat[ing] the document before us as if it were an ordinary contract between private parties.” Ante, at 6. The “document before us,” of course, is nothing of the sort. It is instead a treaty between two sovereign nations: the United Kingdom and Argentina. No investor is a party to the agreement.” “The law of international arbitration and domestic contract law lead to the same conclusion” BG Group Plc. v. Argentina, C.J. Roberts, dissenting 572 US ____ (2014) Presentation name Presenter Name and Date

31. Treaty as Contract “for our goal here – when faced with an agreement’s inevitable silence – is to find the appropriate default rule with respect to the probable ex ante understanding of contracting parties.” (discussing meaning of the local-litigation requirement in the Argentina-UK BIT) Alan S. Rau, “Crossing the Threshold: Arbitral Jurisdiction After BG Group” (Melanges en l’honneur de Pierre Mayer (forthcoming 2015)) Treaty as Contract?, Andrea K. Bjorklund, 20 October 2014

32. Questions ?

33. Next Webinar Many thanks for joining us. Please join us in the New Year for our next webinar examining corruption in investor-state arbitration Sign up to receive RSS announcements from Investment Claims to keep up-to-date