The importance of treaty language and doing it right!

Legally binding treaties that impose enforceable obligations must be negotiated and concluded with great care. Many a times what is intended is not reflected in the language of the treaty text while in many cases the ambiguity in the provisions of the treaty give wide scope for arbitral tribunals/dispute settlement panels to interpret obligations in ways that were not conceived by the treaty negotiators. Now a days a lot of importance is given to State parties being vigilant about treaty provisions they are entering into.

The debate on how many developing countries entered into international investment agreements without comprehending the full extent of obligations is well documented. This led to steps by States to rescind or rethink on their investment treaty negotiation strategy. Old age treaties have given way to new age treaties where State parties have been more circumspect in assuming obligations.

A classic account of how important treaty text is while negotiating is emphasized by this CCSI paper by George A. Bermann, N. Jansen Calamita, Manjiao Chi, and Karl P. Sauvant on the overlap between the interplay of the WTO Investment Facilitation Framework (Framework) and bilateral investment treaties of WTO members. Can the obligations assumed under the Framework be used by investors or State parties to butress their cases in ISDS cases under international treaties. Since both are separate legal regimes under different institutional set ups one would come to a conclusion that obligations under wither of the settings cannot be used in the other.

However, the paper outlines the importance of having clear, explicit treaty text in the Framework to exclude that possibility. A series of legal language is proposed to ensure that the Framework obligations are not imported as an interpretative tool to expand the rights and obligations under investment agreements. 

Some examples of such language suggested are as follows:

A future Framework can be expected—and needs to state expressly—that it does not cover “market access, the treatment and protection of investment or investors, and ISDS.

A determination that there has been a breach of this Framework shall not establish the breach of any rules on investment protection or investor-state dispute settlement.

For greater certainty, obligations arising from other treaties do not in themselves constitute ‘treatment’ and thus are excluded for the purpose of assessing a breach of this Article. Conversely, only measures adopted by a Member pursuant to those obligations shall be considered ‘treatment’. Furthermore, the obligations in this Framework shall not constitute ‘treatment’ under any other treaty.

This Framework cannot and shall not serve as a means to interpret any rules on investment protection or investor-state dispute settlement

So what seemed to be a non-issue is not exactly that straight-forward. Creative interpretations can upset carefully crafted balance in treaties. It can also lead to unintended consequences. 

Unintended and unwanted interaction between a Framework and IIAs is possible. WTO negotiators should therefore seriously consider including provisions.

The above piece only illustrates, once again, the importance of treaty negotiators to be aware of such consequences, create capacity to deal with the challenge of interpretation and exercise utmost caution. Quite often States leave this to their lawyers. However, this problem is much more than a legal one. It is one of State capacity that policy makers must have. It is a necessary toolkit in such challenging environs!