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Report No. 260

I. Article 14.9. Burden of proof and governing law.

(i) Analysis and comment:

5.9.1 Article 14.9 specifies that the treaty shall be interpreted in context of, among other things, the Vienna Convention of the Law of Treaties, 1969 (VCLT). India is not a signatory to the VCLT and has not ratified the same. Therefore the VCLT in its entirety is inapplicable except in instances where it codifies customary international law, thus it is suggested that the reference to VCLT be removed from Article. 14.9.

5.9.2 However, rules of interpretation under Articles 31 and 32 of the VCLT are recognized as codification of customary law,94 and are applicable in the interpretation of this BIT. Article 31(1) is regarded as the golden rule of interpretation requires 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 context and in the light of its object and purpose."

Further Article 31(2) provides that the context shall include, besides the preamble, any agreement concluded between the parties. In the 2015 Model, clearly, this context will be as per Article 14.9(1). Article 14.9(v) also specifies that subsequent agreement and practice regarding interpretation or application of this Treaty shall constitute authoritative interpretations of this Treaty. This is in accordance with Article 31(3)(a) and (b), which have been regarded as a codification of customary international law and is therefore applicable to the 2015 Model.95

94 Legality of Use of Force (Serbia and Montenegro/Belgium)(Preliminary Objections) Case, ICJ Reports 2004 318, para. 100; LaGrand (Germany/USA) Case, ICJ Reports 2001 501, p 99; Kasikili/Sedudu Island(Botswana/Namibia) Case, ibid. 1999 1059, p 18; Arbitral Award of 31 July1989 (Guinea-Bissau/Senegal) Case,1991 69 f, p 48

95 Case concerning Kasikili/Sedudu Island (Botswana v. Namibia) [1999], I.C.J. Reports 1999, p. 1076, para. 50; Application of the Interim Accord of 13 September 1995 (The Former Yugoslav Republic of Macedonia v. Greece) (Judgement) [5 December 2011], para. 99

5.9.3 Article 14(9)(iv) makes Party interpretations of the treaty, binding upon Tribunals that pass decisions subsequently. The fundamental purpose of any interpretative exercise is in order to ascertain party intention, therefore this provision is in consonance with generally accepted international law.

Analysis of the 2015 Draft Model Indian Bilateral Investment Treaty Back

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