Bilateral investment treaties are, in their textual form, instruments of legal protection. They guarantee specific standards of treatment — fair and equitable treatment, full protection and security, protection against expropriation without compensation — and they provide for the resolution of disputes through arbitration. Treated as legal instruments tout court, they appear to operate in a self-contained register.
They were, however, designed as instruments of diplomatic relationship. The first generation of investment treaties emerged from the bilateral economic policy of capital-exporting states in the post-war period, and the model was adopted by capital-importing states as part of a deliberate strategy to attract foreign investment. The substantive standards were drafted with a particular vision of the host-state and the investor in mind, and the dispute resolution mechanisms were designed to depoliticise investment disputes by routing them away from inter-state channels.
The interpretive practice of investment tribunals has, with some honourable exceptions, tended to abstract the substantive standards from their diplomatic origins. Fair and equitable treatment, in particular, has been developed through arbitral case law in a way that owes more to the internal logic of the cases than to the original conception of the standard as an articulation of the diplomatic relationship between treaty parties.
There is a respectable argument that the diplomatic context should be recovered, not as a constraint on the legal analysis but as part of its proper interpretive horizon. The Vienna Convention's framework permits this — the object and purpose of an investment treaty, its negotiation history, and the subsequent practice of the parties are all interpretive resources available to a tribunal. The recovery of the diplomatic context is, in this sense, a recovery of the interpretive method the Convention itself prescribes.