Sources of Law and Arbitral Interpretations of Pari Materia Investment Protection Rules

Abstract

Reliance by investment treaty arbitration tribunals on the case law of their predecessors is an empirically well-documented process in contemporary law. This practice has given rise to different attempts of conceptualisation both in the case law itself and in legal writings. This chapter does not address the contribution of case law to the development of international law in general or international investment law in particular. The present analysis instead considers the logically anterior question in the context of investment arbitration, namely whether and how arbitral elaborations in earlier cases of pari materia rules from other treaties are legally relevant for interpreting a particular treaty rule. It is suggested that even though the traditional approaches cannot fully explain the existing practice, no qualitatively new framework has emerged and therefore a more formalistic or alternatively a more cautious approach to interpretation and sources would be preferable. In particular, to the extent that the anterior adjudicator has explained a rule of customary or treaty law that falls within the admissible interpretative materials of the particular interpretative exercise, verbatim reliance on the case law in the manner is perfectly permissible. In the absence of such nexus, direct reliance on earlier awards for case-by-case elucidations would be justified only in limited circumstances.

Keywords: Investment Arbitration, Investment Protection Law, Treaty Interpretation, Customary Law

JEL Classification: F02, F10, F13, F14, F15, K33