State-to-State dispute settlement and the interpretation of investment treaties

Many governments have expressed concerns about the uncertainty linked to the perceived inconsistency of treaty interpretation in Investor-State dispute settlement (ISDS). An OECD-hosted intergovernmental investment roundtable has been considering a range of tools through which governments can take action to improve the interpretation of investment treaties and some participants suggested consideration of the potential role of State-to-State dispute settlement (SSDS) in this area.This paper responds to this interest. The first part sets forth a rough typology of possible SSDS claims under investment treaties. The second part outlines policy issues relating to a possible type of SSDS claim which would be most relevant to the question of interpretation, for so-called “pure” interpretation of an investment treaty. The analysis seeks to identify policy reasons why governments might wish to provide for or exclude the power to obtain pure interpretations of investment treaties from SSDS tribunals or to make it broad or narrow. The final section examines SSDS cases under investment treaties addressing claims for interpretation.