Yuliya Chernykh’s book Contract Interpretation in Investment Treaty Arbitration deals with an important topic that is seldom devoted attention to. As a matter of fact, many observers may be of the opinion that the title is an oxymoron: investment arbitration does not deal with issues of contract law, so why should investment tribunals interpret contracts? Furthermore, contracts are often written in a clear and exhaustive manner, so why should issues of interpretation arise?
As the book clearly explains, there are situations in which questions of contract law need to be examined by investment tribunals – mainly as preliminary or incidental questions, to determine issues such as contract liability or breach of contract, that in turn are assumed as a basis for the issues of investment law in dispute.
The book also shows that interpretation of contracts is not only a question of clarifying the semantic meaning of ambiguous contract wording – it is a matter of understanding the legal effects of the contract terms, based on the contract wording but also on the principles of the applicable law.
Having ascertained that issues of contract interpretation may be relevant, as incidental questions, also in investment arbitration, the next step is to ascertain under which law these issues shall be considered.
Well-known ambitions of delocalisation and internationalisation have long dominated the scene of investment arbitration – of arbitration tout court, but they are particularly visible (and have their origin) in the intersection of the public international dimension and the domestic legal framework typical in investment arbitration. The function of the public international dimension in investment arbitration is to constrain the domestic framework for the purpose of protecting the investor from abuse by the host country. The domestic legal system may be an instrument for such abuse, hence the necessity to internationalize the dispute. It is tempting to disregard the domestic framework completely in the name of internationalisation. In the context of contract interpretation, this temptation may lead to the development of autonomous methods not founded on either of the dimensions.
The analysis carried out in this book gives the instruments to navigate in this area. The discussion is a seldom combination of extensive empirical research (573 awards are examined) and solid doctrinal analysis. The topic is dissected into various components, starting with how contracts actually are interpreted in case law. International law and its rules on treaty interpretation are examined as a possible basis for contract interpretation, but turn out to
The reasoning is solidly founded on sources and analyses of comparative law, private international law, public international law, and investment arbitration case law. Notwithstanding a certain reluctance in case law towards the principle jura novit curia, the main thesis is that arbitral tribunals have an inherent power to incidentally interpret contracts under the national law that has been selected according to connecting factors drawn from the private international law.
This book is based on the author’s PhD-dissertation, that she successfully defended at the University of Oslo (and I had the pleasure of supervising her work while she was a PhD fellow at our Law Faculty). The evaluation committee was composed of Professor Andrea Bjorklund of McGill University, Counsel Monique Sasson (PhD) of dr Arbitration & Litigation, and Professor Ole Kristian Fauchald of the University of Oslo. I quote from their evaluation report: ‘Many people talk about investment arbitration as showcasing the intersection of public and private international law, but few have explored that intersection as thoroughly as this dissertation. We find the dissertation to be a remarkably comprehensive examination of those instances in which investment treaty tribunals interpret contracts in the course of their investment arbitration and how tribunals should proceed with such interpretation.’
I conclude with another quote from the evaluation report: ‘The dissertation, once it is published, will undoubtedly be relied upon not just by investment tribunals but by scholars of both private and public international law.’
This book is now in the hands of the readers, and I can only congratulate the author and wish the reader an instructive and thought-provoking reading.
Giuditta Cordero-Moss, University of Oslo