Elgar International Investment Law series
Chapter 4: Applicable law and methods of interpretation
Current debates on investment disputes and non-commercial values are increasingly engaging extensive sectors of the population beyond the specialized dimension to which, for decades, foreign investment matters have been confined. These discussions emphasize the complexity of the issue by virtue of the wide variety of stakeholders involved, and lend credence to the premise that a single and simple solution to the problem in hand is chimerical. Hence, this chapter analyses the preliminary issues of this research in greater depth, more specifically with respect to applicable law and the methods of legal interpretation implemented in international investment disputes. The next section investigates whether the moment in which the law that is applicable to investment disputes is chosen is decisive in whether or not parties and arbiters consider non-commercial values in their reasoning. The integration of values such as those concerning the environment and human health into IIL by way of choosing the applicable law appears to be of limited feasibility because of the existing rules and practice governing investment treaty arbitration. This means navigating difficult routes through the sea of legal interpretations, where integrating the two different spheres of interest involves safely bypassing the Scylla of a literal or teleological interpretation biased towards investors and the Charybdis of excessively systemic interpretations that lead to unrealistic legal arguments. As such, the final section of this chapter aims to highlight key points regarding the interpretation of investment rules and, furthermore, proposes a basic approach to classifying interpretative arguments regarding the complicated issue of reconciling foreign investments and environmental protection.
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