Treaty interpretation is a practical and fascinating aspect of most dispute settlement proceedings involving aninternational treaty. The importance of treaty interpretation is highlighted by the ever-increasing number of international treaties and agreements-such as the more than 2800 bilateral treaties for the protection of investments（BITs），more than 400 free trade agreements（FTA）and the approximately 60 agreements，understandings and decisions composing the Marrakesh Agreement Establishing the World Trade Organization（WTO Agreement）. The Vienna Convention on the Law of Treaties（Vienna Convention）2007333 comprises a single set of rules applying to treaty interpretation. These rules of interpretation of public international law，many of which have become customary，are accepted worldwide as the tool for interpreting international treaties.

I first studied the Vienna Convention in early 1980 while serving as legal counsel at the World Bank and assisting George Delaume，Deputy Secretary-General of the International Center for Settlement of Investment Disputes（ICSID），in compiling the awards issued by the ICSID. From its conclusion（Washington Convention）in 1965 until 1982，there were only thirteen ICSID awards issued. Although the Vienna Convention was neither mentioned nor systemically applied in these awards，the interpretative tools provided by the Vienna Convention were nonetheless used in some of the earlier awards such as looking first at the text，context and ordinary meanings of the provisions of the ICSID Convention，as well as its object and purpose，examining the legislative history and considering special meaning and preparatory work. For example，the interpretive tools were used to interpret Article 25（1）of the ICSID Convention regarding the jurisdictional scope of the ICSID，in order to resolve questions such as whether a claimant was deemed to be a national of another contracting state，and whether a contracting state accepted jurisdiction in writing. The interpretation of provisions on treatment of foreign investors of a BIT is a challenge of the dispute resolution under ICSID.

However，the ICSID Convention has no mandatory requirements regarding treaty interpretation. Arbitrators took a more liberal approach in interpreting a BIT and the ICSID provisions in ICSID earlier cases. The ICSID has an ad hoc arbitration system，without a permanent appeal body like the Appellate Body of the WTO，but it does have an annulment procedure.

As for international commercial arbitration，treaty interpretation appears to be less frequently used in arbitral awards. I served as arbitrator to several international arbitration institutions such as the International Chamber of Commerce（ICC）and the China International Foreign Trade and Economic Arbitration Committee（CIETAC），and I have handled more than 100 arbitrations. Of these，only two ad hoc tribunals used the Vienna Convention to interpret the Sales of Goods Convention（CISG）when parties chose CISG as the applicable law in their commercial contracts. In contrast，the Vienna Convention is frequently used in the WTO dispute settlement proceedings. Articles of the Vienna Convention are referenced in the majority of the 119 Appellate Body reports issued as of the date of the preparation of this chapter.

After having joined the prestigious seven-member WTO Appellate Body in 2008，I have a better understanding of the reasons why the Appellate Body uses the Vienna Convention so often in its clarification of the WTO covered agreements. I would like to share those reasons with the readers of this chapter. One significant reason is that the Vienna Convention comprises the worldwide recognised customary rules for the interpretation of public international law. As the Appellate Body has a mandatory mission entrusted by the WTO Dispute Settlement Understanding（DSU）“to clarify the ［WTO covered agreements］ in accordance with customary rules of interpretation of public international law”，the Vienna Convention serves as an indispensable interpretative tool in the Appellate Body’s deliberation of appeal cases. Meanwhile，the Appellate Body has accumulated a lot of practical experience in the interpretation of the WTO covered agreements and is thus contributing to treaty interpretation on a global scale.

It is a great honour for me to serve at the Appellate Body as its first member of Chinese nationality. Since being appointed to the Appellate Body，I have had the privilege to work collegially with the other six Appellate Body members in handling WTO appeal cases. A three-member division to hear an appeal is formed by a “mysterious” draw in order to maintain the unpredictability of who will serve on a given case. Independence，impartiality and integrity are the leading principles for the Appellate Body members in hearing appeal cases. Ensuring a just outcome of appeal cases and high quality reports is of utmost importance to the Appellate Body members. This，in turn，creates and reinforces the credibility of the Appellate Body and its contribution to the security and predictability of the rules-based international trading system. Appellate Body members spend a lot of time carefully reading submissions of disputing parties and reviewing legal interpretations made by panels. Though an appeal case is handled by a division of three Appellate Body members，all seven members participate in an exchange of views in every appeal case（excluding any Appellate Body member recused from a given case）. Therefore，all seven Appellate Body members will read and be fully familiar with the appeal documents in each and every case.

The jurisdiction of the WTO Dispute Settlement Body is well defined in Article 1.1 of the DSU as “the settlement of disputes between members concerning their rights and obligations under the provisions of the ［WTO Agreement］ and of this Understanding taken in isolation or in combination with any other covered agreement”. The DSU divides responsibility and jurisdiction between panels and the Appellate Body. Article 7.2 stipulates：“Panels shall address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute.” Moreover，a panel should make “an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreement” according to Article 11 of the DSU. The mandate of the Appellate Body in WTO dispute settlement is likewise well defined in the DSU. Article 17.1 stipulates：“The Appellate Body shall hear appeals from panel cases”，and Article 17.6 further clarifies that “［a］n appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel.” The DSU therefore delegates the Appellate Body to play the important role of making legal interpretations of the provisions of the WTO covered agreements.

In the years following the Uruguay Round trade negotiations，it has become widely accepted that the creation of an independent and standing Appellate Body was an important step in moving from the diplomatic-oriented dispute settlement mechanism of the General Agreement on Tariffs and Trade（GATT）to the new era of the WTO quasi-judicial approach，resulting in a change in dispute settlement decision making from “consensus” to “negative consensus.” The establishment of panels and adoption of panel and Appellate Body reports became automatic. The multilateral trade negotiations of theUruguay Round produced about twenty agreements enlarging the scope of the GATT beyond trade in goods to include，under the WTO，the General Agreement on Trade in Services（GATS），the Agreement on Trade-Related Investment Measures（TRIMs），the Agreement on Trade-Related Aspects of Intellectual Property Rights（TRIPS），to name a few. The Appellate Body plays a key role in ensuring a coherent and consistent interpretation of the WTO covered agreements.

Article 3.2 of the DSU indicates that the main object and purpose of the WTO dispute settlement mechanism is to provide security and predictability to the multilateral trading system. It states：

The WTO Members recognize that ［the WTO dispute settlement mechanism］ serves to preserve the rights and obligations of Members under the covered agreements，and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law. Recommendations and rulings of the ［Dispute Settlement Body］ cannot add to or diminish the rights and obligations provided in the covered agreements.

So what are the “customary rules of interpretation of public international law”？As Shaw emphasises，“［t］he ［Vienna Convention］ partly reflects customary law and constitutes the basic framework for any discussion of the nature and characteristics of treaties. Certain provisions of the Convention may be regarded as reflective of customary international law，such as the rules on interpretation…”.2007334

As far as international law is concerned，there are three basic approaches to treaty interpretation. The first is to look at the actual text of the agreement and to give meaning to the words used. The second looks at the intention of the parties to the agreement. The third is to look at the object and purpose of the agreement. In practice，the Appellate Body is to take all three aspects into account. Articles 31，32 and 33 of the Vienna Convention encapsulate these three approaches to treaty interpretation.

Article 31 of the Vienna Convention，2007335 entitled “General rule of interpretation”，reads：“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 context and in the light of its object and purpose.” It goes on to stipulate that context comprises，in addition to the text，its preamble and annexes，any agreement and instrument relating to the treaty，and that account is to be taken of any subsequent agreement，subsequent practice and relevant rules of international law applicable in the relations between the parties. A special meaning shall be given to a term if it is established that the parties so intended. Article 32 provides “Supplementary means of interpretation”；and Article 33 provides guidance on the “Interpretation of treaties authenticated in two or more languages”.

How does one interpret correctly the provisions of the numerous WTO covered agreements？How does one understand better the real intentions of the negotiators of those agreements？Unfortunately，there are no official negotiation records or memoranda signed by parties to explain the meaning underlying the WTO covered agreements. That makes the Vienna Convention the central tool for the clarification of the WTO covered agreements since it is generally accepted worldwide，whether or not the partiesinvolved in the dispute are parties to it. It also provides guidance to analytical approaches and the correct order of legal reasoning. Generally，the starting point of the Appellate Body is to read the terms of the covered agreement invoked by the parties and to ascertain the ordinary meaning of the provisions of that agreement. This textual approach is linked with the context，then the object and purpose of the agreement. Sometimes a “subsequent agreement” or “supplementary means of interpretation”，such as the preparatory work or the negotiating history of the agreement，are also used for the interpretation of the agreement. Above all，the textual and contextual approach embodied in the Vienna Convention is the main tool used by the Appellate Body for the interpretation of the WTO covered agreements.

Article 3.2 of the DSU recognises that interpretative issues arising in WTO dispute settlement are to be resolved through the application of customary rules of interpretation of public international law. In fact，as early as in its first report，US-Gasoline，the Appellate Body observed that the principles codified in Article 31 of the Vienna Convention are customary rules，stating：

The general rule of interpretation ［set forth in Article 31（1）of the Vienna Convention］ has attained the status of a rule of customary or general international law. As such，it forms part of the “customary rules of interpretation of public international law” which the Appellate Body has been directed，by Article 3（2）of the DSU，to apply in seeking to clarify the provisions of the General Agreement and the other “covered agreements” ［…］ That direction reflects a measure of recognition that The General Agreement is not to be read in clinical isolation from public international law.2007336

In Japan-Alcoholic Beverages II，the Appellate Body linked the task of treaty interpretation to the notion of security and predictability of the multilateral trading system：

WTO rules are reliable，comprehensible and enforceable. WTO rules are not so rigid or so inflexible as not to leave room for reasoned judgments in confronting the endless and ever-changing ebb and flow of real facts in real cases in the real world. They will serve the multilateral trading system best if they are interpreted with that in mind，in that way，we will achieve the “security and predictability” sought for the multilateral trading system by the Members of the WTO through the establishment of the dispute settlement system.2007337

In India-Patents（US），the Appellate Body stressed that “［b］oth panels and the ［Appellate Body］ must be guided by the rules of treaty interpretation set out in the ［Vienna Convention］，and must not add to or diminish rights and obligations provided in the WTO Agreement.”2007338

In itscommentaries on the Draft Articles on the Law of Treaties，2007339 the International Law Commission（ILC）explains that the parties are presumed to have the intention that appears from the ordinary meaning of the terms used by them. “The text ［of a treaty provision］ must be presumed to be the authentic expression of the intentions of the parties；and that，in consequence，the starting-point of interpretation is the elucidation of the meaning of the text，not a new investigation into the intentions of the parties.”2007340 The process of interpretation，therefore，begins with an analysis of the relevant provisions of the treaty at issue in the dispute and “goes on to consider the context，that is to say other provisions of the treaty，including its preamble，annexes and related instruments made in connection with the conclusion of the treaty，taking particularly into account the object and purpose of the treaty，as it appears from these intrinsic materials.”2007341 Further materials to be taken into account are any subsequent agreement，subsequent practice and relevant rules of international law applicable in the relations between the parties.

Significantly，the ILC commentaries describethe process of interpretation as a “unity” and explain that the “elements of interpretation” are set out in order under Article 31 for “considerations of logic，not any obligatory legal hierarchy.” Being intimately associated with the text of a treaty，context precedes the elements of interpretation set out in Article 31（3），namely any subsequent agreement，subsequent practice and relevant rules of international law. The ILC refers to these as being “extrinsic to the text” of a treaty. Nevertheless，they are of “mandatory character” and have the same hierarchical rank as other elements provided for in the preceding paragraphs. After noting the importance of the text as a “starting-point for interpretation”（that is，determining the common intent of the parties，which “receives its authentic expression in the text” of a provision），the ILC turned to look at the possible relevance of “supplementary means of interpretation”，in particular the preparatory work of a treaty.

The ILC did not agree on placing the preparatory work and the text of a treaty at the same level. Instead，it chose to confine “preparatory work” and the “circumstances of … conclusion” of the treaty to a secondary role，as a “supplementary means of interpretation，” available for only certain purposes. Accordingly，Article 32 of theVienna Convention stipulates that supplementary means of interpretation may be used only where interpretation under Article 31 leaves the meaning of a provision obscure or ambiguous，or else leads to a result that is manifestly absurd or unreasonable.

Having given some general comments above，I discuss hereafter how Appellate Body has used Articles 31，32 and 33 of the Vienna Convention.. Conclusions and general comments will follow at the end of this chapter.