What Rules, if not Customary International Law – Articles 31-32 of the VCLT – Are the U.S. Courts Relying upon while Applying and Interpreting Tax Treaty Provisions?

The Vienna Convention on the Law of Treaties (VCLT) contemplates the interpretation of treaties topic in its articles 31, 32 and 33, portraying the frame to be followed by one who is engaged in this difficult endeavor. Tax treaties are, fore and foremost, treaties. Therefore, the VCLT is the leading guideline for their interpretation. The United States has sixty-eight income tax treaties in force. If one logs on any website provider of case-law services and types “tax treaty,” more than six hundred cases will pop up. This paper focuses both on what courts have been doing and on what they could have been doing, according to the VCLT, when ruling about tax treaties, but theorizing an approach to the interpretation of tax treaties is not its intent. Regardless of the inference of Savigny and other jurists that “interpretation is an art” and “cannot be learned and governed by any specific rules,” in accordance with the preponderant point of view, customary international law has developed rules on interpretation of treaties, which are accurately contemplated in the VCLT. Still, the American judiciary does not exactly follow its rules. Nonetheless, the U.S. court decisions that have already applied the interpretation rules of the VCLT are “especially valuable” as substantiation of international law since they are rendered by courts of a nation not a party to the Convention, and their importance is further reinforced because the United States, as the most active treaty-maker in the world, decidedly influences the law applicable to treaties.

The general purpose of this article is to demonstrate that customary international law (CIL) has a significant role to play in connecting international tax law and international investment law. Bridging a gap between those sources of international law is not only an important endeavour in the theory of law but also in practice. This article purports to achieve the abovementioned general purpose by focusing on the application of the rule and principles of interpretation under the Vienna Convention on the Law of Treaties (VCLT), which represent a codification of CIL, to limited most favoured nation (MFN) clauses in tax treaties. The hypothesis of the authors is that a serious failure in a proper application of the VCLT to interpret the MFN clauses in tax treaties may lead to a violation of international investment agreements (IIAs), in particular the fair and equitable treatment (FET) standard. The analysis and conclusions are relevant to all tax treaties and IIAs containing the MFN clause and FET standard, respectively. They are also of relevance for the interpretation of all provisions of tax treaties, not only the limited MFN clauses, in accordance with the VCLT. Examining tax treaties through the lens of the FET standard allows the FET standard to be seen as a gateway for the systemic integration of tax treaties in accordance with the principle enshrined in article 31(3) (c) of the VCLT, because some of core elements of that standard are deeply rooted in sources of international law (general principles of law and custom).

The Use of Precedents in Investor-State Arbitration: A Legal Analysis

This chapter examines the interpretation and intertemporal application of investment treaties. In international investment law, the interpretation of treaties takes place by tribunals whose composition varies from case to case. This makes it more difficult to develop a consistent case law than in a permanent judicial institution. Most tribunals, when interpreting treaties, start by invoking Article 31 of the Vienna Convention on the Law of Treaties (VCLT). Tribunals have recognized the validity of the rules on treaty interpretation in the VCLT as part of customary international law. This means that these rules are of general application also in respect of treaties concluded before the VCLT’s entry into force in 1980 and independently of whether all parties to a treaty have ratified the VCLT. At times, tribunals also refer to the supplementary means of interpretation contained in Article 32 of the VCLT. Meanwhile, some treaties provide for a consultation mechanism concerning their interpretation or application.

Based on an analysis of 3,844 tax treaties, the Vienna Convention on the Law of Treaties and its Commentaries (VCLT), and case law of various domestic and international courts. The current orthodoxy maintains that courts are not required to compare all language texts of a plurilingual treaty but may rely on a single one for cases of routine interpretation. This view is erroneous, in violation of the VCLT, and the source of treaty misapplication; taxpayers are ill-advised to pay attention only to the text in their own language. In daily practice, the issue is of great relevance: almost three-quarters of the well over 3,000 concluded tax treaties are plurilingual. The BEPS MLI escalates complexity because it modifies a large number of treaties having texts in various languages. This study aims to (1) increase awareness about the pitfalls of the current orthodoxy and, in consequence, help diminish misapplication of plurilingual tax treaties through its abandonment, (2) show that sole reliance on prevailing texts is available as a pragmatic alternative in line with the VCLT, and (3) provide policy recommendations how residual cases may be eliminated. To support these goals, this study seeks to provide conclusive arguments and useful data to policy makers, treaty negotiators, judges, practitioners, and other scholars. Its analysis of all tax treaty final clauses is intended to help both taxpayers and courts interpreting tax treaties in practice. The general arguments presented in this book are however not limited to tax treaties, since similar issues play a role in the interpretation of other treaties, for example, in the field of foreign investment regulation. Note: Excerpt of my Thesis, consisting in TOC, Introduction, and Chapter 3 (Routine Interpretation: A Refutation), the latter being an updated and more extensive version of my previous paper 'Not in Good Faith — A Critique of the Vienna Convention Rule of Interpretation Concerning its Application to Plurilingual (Tax) Treaties'.

The international community often intervenes when it is clear that the individual state falls short in providing adequate measures to protect its citizens. As a general right, the right to privacy has been widely recognized by both the international community and the individual national legal systems. Examples of international treaties include the United Nations Charter and the Vienna Convention on the Law of Treaties. The principal international instruments produced by the United Nations enunciate rights and freedoms that may be characterized as privacy rights. Treaties carry a perceived legitimacy that comes from being negotiated and their nature as explicit norms accepted by the State parties. Two elements must be present for a principle or rule of customary international law to exist: state practice as proof of custom, and opinio juris . Customary international human rights law prohibits globally deplored human rights violations and consistent patterns of gross human rights violations. Keywords:customary international law; law of treaties; privacy rights; United NationsCharter; Vienna Convention

In legal interpretation (including statutory interpretation and constitutional interpretation) in domestic context, the comparative approach is commonly adopted by a domestic court so as to look into the practices and jurisprudence in other jurisdictions and to find out whether similar interpretation can be applied to the interpretation of its legal or constitutional provisions. But treaty interpretation is guided by the Vienna Convention on the Law of Treaties (VCLT). The comparative approach is not a commonly used method for treaty interpretation and is not directly reflected in the VCLT. The most important rules in the VCLT are that 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 contexts and in the light of its object and purpose (as provided in VCLT Article 31.1) and that recourse may be had to supplementary means of interpretation in order to confirm the meaning or to determine the meaning under certain circumstances (as provided in VCLT Article 32). This chapter will argue that a comparative approach can still be brought into the operation of the VCLT concerning the determination of the “ordinary meaning” of an interpreted term through comparing the ways that the same or a similar term is interpreted in different treaties. The comparative approach can also be considered as a “supplementary means of interpretation” provided in VCLT Article 32 so that the methods of treaty interpretation adopted under different treaties can be introduced to confirm the meaning which is identified under Article 31.1. In essence, the comparative approach is of practical usefulness in the conduct of treaty interpretation.

The Convention clearly marked the beginning of a new era in the law of treaties. This book is necessarily devoted largely to the Vienna Convention on the Law of Treaties 1969 (‘the Convention’), which contains the body of rules that determine whether an instrument (document) is a treaty, how it is made, brought into force, amended, terminated and operates generally. It is not so concerned with the substance of a treaty (the rights and obligations created by it), which is known as ‘treaty law’. That is a matter for the negotiating states. For good reason, the Convention has been called ‘the treaty on treaties’. Although the Convention does not occupy the whole ground, it covers the most important areas, and is the starting point for any description of the modern law and practice of treaties. Thus, it merits its own chapter. This chapter's other purpose is to define the scope of this book by mentioning briefly those aspects of the law of treaties that the Convention does not deal with. Similarly, the MOU (which is not mentioned explicitly in the Convention) is between two or more states and looks at first sight rather like a treaty, but is not a treaty because it is not governed by international law, or, for that matter, any law (see Chapter 3 below). The UN General Assembly established the International Law Commission (ILC) in 1947 with the object of promoting the progressive development of international law and its codification. The law of treaties was one of the topics selected by the ILC at its first session in 1949 as being suitable for codification. A series of eminent British international legal scholars (Brierly, Hersch Lauterpacht, Fitzmaurice and Waldock) were appointed as (successive) Special Rapporteurs. Their task (which took them some fifteen years) was to draw up a coherent account of the already well-developed customary international law on treaties. In 1966, the ILC adopted a final set of draft articles. The UN Conference on the Law of Treaties considered them in 1966, and in 1968 and 1969. It adopted the Vienna Convention on the Law of Treaties on 22 May 1969, and the Convention entered into force on 27 January 1980. By the end of 2012, it had only 112 parties out of the 193 states that are members of the United Nations today. Some of the reasons for this will be discussed below.

The overall aim of this article is to analyse the principal purpose test as an emerging rule of customary international tax law. By means of the principal purpose test, the tax administration can deny the tax treaty benefit if one of the principal purposes of the action undertaken by the taxpayer was to obtain a benefit. This principal purpose test has been developed by the OECD with the political support of the G20 as one of the actions to tackle Base Erosion and Profit Shifting by multinationals (BEPS Project). At the time of writing, 137 jurisdictions including non-OECD, non-G-20 countries have committed to the implementation of the principal purpose test in their current and future tax treaties. Based on the analysis of the objective element (state practice) and subjective element (accepted as law), there are indications that this principal purpose test can emerge as a principle of customary international law. In the past, international tax law scholars addressed the customary international law regarding the OECD/UN tax treaty Models, the OECD Harmful Tax Practices, and the arm’s length principle. However, current international tax developments, including the BEPS Project, call for an analysis of the main elements of customary international law in respect of the principal purpose test, a general anti-avoidance rule that by its own nature, is often general, vague, and imprecise. Therefore, the findings of this article can be useful for generating new areas of research by international public law, international law, and international tax law experts.

The United States suspended the Intermediate-Range Nuclear Forces Treaty (INF Treaty) ‘in accordance with customary international law’. However, State practice prior to the International Law Commission's codification of the law of treaties did not contribute to clarifying the extent of a right to suspend and the proper conditions for its exercise under customary international law. The few instances regarding suspension due to a serious breach did not demonstrate how the treaties in question were suspended but were a mere reference to a right of suspension in diplomatic or political documents. Against that backdrop, this article seeks to delineate what customary rules the United States believed it was observing and to clarify to what extent those rules are identical to or different from the codified rules on suspension in the Vienna Convention on the Law of Treaties (Convention). Because the codified procedural safeguards or the mechanism of acquiescence under Article 65 of the Convention were considered as the progressive development of international law, it appears possible to suspend the INF Treaty unilaterally outside the Convention and under the customary rules by which the United States is bound. The INF Treaty was suspended by the United States and by Russia in sequence. That Russian suspension appears to have been an exceptio non adimpleti contractus to prevent the asymmetric execution of the INF Treaty that had been previously suspended by the United States.

This chapter examines the meaning and function of principles of treaty interpretation in general international law. Customary international law on treaty interpretation is partly and mostly codified in Articles 31 to 33 of the Vienna Convention on the Law of Treaties (VCLT), which are discussed in their historical context. The chapter explains that even if treaty-based, treaty interpretation is governed by principles rather than rules. It also provides an introduction to some of the Appellate Body's techniques of interpretation and reflects on the need and status of special principles of treaty interpretation.

Law of treaties is one of most important topics in public international law. In recent decades, it has become an overriding issue as a result of the evolution of Bilateral Investment Treaties (BITs). The advent of BITs has led to a significant development of investor-State arbitration cases in which there is a great diversity and uncertainty with respect to the interpretation of BITs by arbitrators. Accordingly, a controversial question arises as to how and on what legal basis treaty interpretation rules are applied by investment arbitration tribunals. The Vienna Convention on the Law of Treaties (VCLT) is the most relevant legal source to treaty interpretation, but it is not the only one. Investment arbitration tribunals sometimes rely on criteria other than those codified in the VCLT, such as prior awards, principle of effectiveness, doctrinal views, treaties and instruments. Treaty Interpretation In Investment Arbitration is a welcome book which pays a...

Contents: Evolution: The treaty on treaties, Richard D. Kearney and Robert E. Dalton. The Nature of Treaties: What is an agreement in international law? Kelvin Widdows A mirage in the sand: distinguishing binding and non-binding relations between states, Christine Chinkin The significance of the registration or non-registration of an international agreement in determining whether or not it is a treaty, D.N. Hutchinson Some problems regarding the object and purpose of treaties, Jan Klabbers The international legal obligations of signatories to an unratifies treaty, Martin A. Rogoff. Treaty Integrity: Universality or integrity? Some reflections on reservations to multilateral treaties, Catherine Redgwell. Treaty Interpretation: The International Law Commission's draft articles upon interpretation: textuality redivivus, Myres S. McDougal Vae victis, or woe to the negotiators! Your treaty or our 'interpretation' of it?, Sir Gerald Fitzmaurice Varieties of approach to treaty interpretation: with special reference to the Draft Convention on the law of treaties before the Vienna diplomatic conference, Francis G. Jacobs Theory and practice of treaty interpretation, Maarten Bos. Invalidity, Suspension and Termination of Treaties: Problems concerning the validity of treaties, T.O. Elias Down the Danube: the Vienna Convention on the law of treaties and the case concerning the Gabcikovo-Nagymaros project, Daniel Reichart- Facilides The concept of jus cogens in the Vienna Convention on the law of treaties, Merlin M. Magallona Unilateral denunciation of treaties : the Vienna Convention and the International Court of Justice, Herbert W Briggs Nonperformance of international agreements, Christine Chinkin.

INTRODUCTION.Outerspaceis an increasingly competitive environment. This raises incentives for states to place conventional weapons in outer space. The 1967 Outer Space Treaty (OST), the applicable legal regime, is silent on the legality of the placement of conventional weapons, however. Since the early 1980’s, the multilateral diplomatic process on the Prevention of an Arms Race in Outer Space (PAROS) aims to explicitly prohibit the weaponization of outer space by a new international treaty. Yet states have not agreed on such a weapons ban treaty so far. This article analyses the multilateral negotiations’ effects on the applicable international law, namely the legal gap (lacuna) in the OST regime.MATERIALSANDMETHODS.Thisstudyanalyzestreatytexts,UNGeneralAssemblyresolutions,treatyproposals,states’workingpapers,states’statements,andreportsfrominternationalnegotiationsandmeetings. Th analytical framework is the rules for treaty interpretation according to the Vienna Convention on the Law of Treaties (VCLT). Consistent with explanatory and theory–building research, the methods used are those of historical legal research as well as general scientific methods, such as analysis, synthesis, analogy, description, and deduction.RESEARCHRESULTS.Thisarticleidentifis three mechanisms by which the multilateral negotiations on PAROS clarify and inform international law regarding the weaponization of outer space. First, the negotiationsledstatestocommunicatetheirlegalpositionsregardingtheissue.Thisclarifieshowstatesinterpretthelaw.ItalsoallowstoassesswhetherthecontinuousstatepracticetonotplacekineticweaponsinouterspacerepresentssubsequentpracticeoftheOSTaccordingtoArticle31(2)(b)VCLT.Second,thePAROSprocessproducedannualUNGeneralAssemblyresolutionsthatstrengthenedtheprincipleofpeacefuluseofouterspaceandlinkedit withstates’generalunderstandingthatthisimplieslimitstotheweaponizationofouterspace.Assuch,thisisrelevantfortheinterpretationofthegapinlightoftheOST’scontextandobjectandpurposeaccordingtoArticle31(1)VCLT.Third,thenegotiationshaveproducedpreciselanguageona prohibition of weaponization in the form of the draft Treaty on Prevention of the Placement of Weapons in Outer Space and of the Threat or Use of Force Against Outer Space Objects (PPWT), which enables the emergence of a prohibition under customary international law. For the interpretation of the OST’s gap, this would constitute “any relevant rules of international law” according to Article 31(3)(c) VCLT.DISCUSSIONANDCONCLUSIONS.Thisarticle arguesthatthemultilateralnegotiationshavebrokenthelegalsilenceregardingtheplacement ofconventionalweaponsinouterspace.Whilethethreemechanismshelptoidentifyandclarifythelaw,theyalsoinfluencethematerialsubstanceofthelaw.ThePA-ROSnegotiationshavenotledtheexistinglawtoclearlyprohibittheweaponizationofouterspace.Yetthenegotiationshaveinformedthelawsuchthattheexistinglawhardlyauthorizessuchaction.Theresultisthattheissueisunequivocallyregulatedbyinternationallaw,i.e.theOST’sgapisundoubtedlya legal gap. Yet the Lotus principle according to which what is not prohibited under international law is authorized falls short of the existing legal situation. This suggests that lex ferenda, the law in the making, has effects on lex lata. Multilateral negotiations – even deadlocked or failed ones – thus may be more than the making of future law but also the shaping of existing law. Accordingly, ongoing multilateral negotiations might be analyzed as supplementary means of treaty interpretation according to Article 32 VCLT. For policymakers, this suggests that negotiations may be used to influence the existing law, even if reaching agreement on a new treaty is not possible.

This book offers a systematic study of the interpretation of investment-related treaties – primarily bilateral investment treaties, the Energy Charter Treaty, Chapter XI NAFTA as well as relevant parts of Free Trade Agreements. The importance of interpretation in international law cannot be overstated and, indeed, most treaty claims adjudicated before investment arbitral tribunals have raised and continue to raise crucial and often complex issues of interpretation. The interpretation of investment treaties is governed by the Vienna Convention on the Law of Treaties (VCLT). The disputes relating to these treaties, however, are rather peculiar as they place multinational companies (or natural person) in opposition to sovereign governments. Fundamental questions dealt with in the study include: Are investment treaties a special category of treaty for the purpose of interpretation? How have the rules on interpretation contained in the VCLT been applied in investment disputes? What are the main problems encountered in investment-related disputes? To what extent are the VCLT rules suited to the interpretation of investment treaties? Have tribunals developed new techniques concerning treaty interpretation? Are these techniques consistent with the VCLT? How can problems relating to interpretation be solved or minimised? How creative have arbitral tribunals been in interpreting investment treaties? Are States capable of keeping effective control over interpretation?