Of Forks and Dead Ends: Sanum Investments Ltd v Government of the Lao People's Democratic Republic

Of Forks and Dead Ends: Sanum Investments Ltd v Government of the Lao People's Democratic Republic I. INTRODUCTION In an appeal brought before the Singapore Court of Appeal against the decision of the Singapore High Court to set aside an arbitral Award on jurisdiction under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, the Court of Appeal reversed the lower court’s decision, holding that the bilateral investment treaty (BIT) in question did extend to the investor’s home State.4 The appeal represented a rare and important opportunity for Singapore’s apex court to rule definitively on several issues surrounding the municipal review of investment treaty arbitral awards and the interpretation of a BIT to which Singapore is not a party. The Court of Appeal was evidently sensitive to the importance of its decision, as shown by the constitution of a rare five-judge bench and the appointing of two international law experts (J Christopher Thomas, QC, and Locknie Hsu) as amici curiae. The appeal turned on the admission and consideration of two diplomatic letters as well as the scope of the treaty’s dispute resolution clause, which had thrown up several legal issues with far-reaching consequences that required clarification from the Court of Appeal. Those issues and the Court’s treatment of them form the subject of this case comment. This case comment will first provide a summary of the facts and findings of the Court of Appeal. It will then be followed by a discussion of the mechanics of municipal review of arbitral awards, as the judgment has given rise to issues concerning jurisdiction and justiciability, the standard of review and evidential matters. The case comment will then move on to discussing treaty interpretation issues in the context of investment treaty arbitration that were brought to the fore by the judgment, in particular: (i) the use of subsequent agreements in treaty interpretation under public international law, which has, in the context of investment treaty disputes, revealed an inherent tension between the interpretative authority of the treaty parties and of international courts and tribunals, and (ii) the interpretation of dispute resolution clauses on the ‘amount of compensation’ in investment treaties, on which the Court of Appeal favoured a broad approach, primarily due to a fork-in-the-road provision that, under a narrow approach, would have led an investor on the apparent path to arbitration towards a dead end. II. THE BACKGROUND FACTS The background facts to the dispute that was submitted for arbitration have been fully canvassed in our previous comment.5 In essence, Sanum Investments Limited (Sanum or the Defendant/Appellant), which was incorporated in the Macau Special Administrative Region of China (Macau), made certain investments in the gaming and hospitality industry in the Lao People’s Democratic Republic through a joint venture with a Laotian entity. Disputes subsequently arose between the government of the Lao People’s Democratic Republic (Laos or the Plaintiff/Respondent) and the Laotian entity, leading to Sanum Investments initiating arbitral proceedings against Laos by a Notice of Arbitration dated 14 August 2012, pursuant to the PRC–Laos BIT, alleging, inter alia, that Laos had expropriated the benefits from Sanum’s capital investment by imposing unfair and discriminatory taxes.6 A Singapore-seated Tribunal was thereafter constituted under the 2010 UNCITRAL Arbitration Rules.7 Laos subsequently disputed the jurisdiction of the Tribunal by arguing, inter alia, that the PRC–Laos BIT did not apply to Macau. On 13 December 2012, the Tribunal delivered its Award on Jurisdiction, holding that the PRC–Laos BIT applied to Macau and that it had the jurisdiction to arbitrate Sanum’s expropriation claims under Article 8(3) of the PRC–Laos BIT.8 The Singapore courts were thereafter involved as the court of curial review. On 10 January 2014, Laos filed an application to refer the issue of jurisdiction to the Singapore High Court under section 10 of the International Arbitration Act (IAA).9 On 19 January 2014, Laos filed another application requesting the admission of two diplomatic letters (Notes Verbales) sent in January 2014 (2014 Letters), one sent from the Laotian Ministry of Foreign Affairs to the PRC Embassy in Vientiane, Laos (2014 Laos Letter) and the other sent in reply to the Laos Letter by the PRC Embassy (2014 PRC Letter), both of which set out the view that the PRC–Laos BIT did not apply to Macau.10 The 2014 Letters were only obtained after the Tribunal had handed down the Award and were therefore not available for the Tribunal’s consideration. The Singapore High Court judge, Judicial Commissioner Edmund Leow, set aside the Award on the basis that the PRC–Laos BIT did not extend to Macau, thereby rendering the Tribunal without jurisdiction over the dispute.11 The application involved five issues – three preliminary and two substantive. The preliminary issues were: (i) whether the present application raised only issues of international law that were non-justiciable (the justiciability issue); (ii) whether the standard of review of the Award under section 10 of the IAA should be de novo (the standard of review issue) and (iii) whether the 2014 Letters should be admitted as fresh evidence in the application (2014 Letters issue). The substantive issues were: (iv) whether the PRC–Laos BIT applied to Macau (Macau issue) and (v) whether Sanum ’s expropriation claims fell within the scope of Article 8(3) of the PRC–Laos BIT (arbitration clause issue). In his judgment, the judge ruled affirmatively on all three preliminary issues but held in the negative on both substantive issues. On 20 July 2015, Sanum appealed against the judge’s decision to the Court of Appeal. Prior to the hearing of the appeal, Laos sought to admit into evidence two further diplomatic letters obtained in 2015 (2015 Letters), one sent from the Laotian Ministry of Foreign Affairs to the PRC Embassy in Vientiane (2015 Laos Letter) and the other sent from the PRC Ministry of Foreign Affairs (2015 PRC Letter), which had the effect of confirming the authenticity of the 2014 PRC Letter. The question of whether the 2015 Letters ought to be admitted therefore formed a separate issue (2015 Letters issue) to be decided by the Court. III. THE DECISION OF THE COURT The Court of Appeal reversed the judge’s decision and held that the Tribunal did have jurisdiction to hear Sanum’s expropriation claims. In summary, the Court held that: (i) the application to review the arbitral Award involved justiciable questions of law; (ii) the standard of review under section 10 of the IAA was de novo; (iii) the 2014 Letters were not admissible; (iv) the 2015 Letters were admissible; (v) the PRC–Laos BIT applied to Macau and (vi) Sanum’s expropriation claims fell within the scope of Article 8(3) of the PRC–Laos BIT. A. The Justiciability Issue On the justiciability issue, the judge had held that the application was justiciable before the Singapore courts on the basis that the application under section 10(3)(a) of the IAA did not involve non-justiciable questions of pure international law, with treaty interpretation being a realm that was justiciable by a Singapore court insofar as the court was asked to interpret the nature and scope of the treaty in order to give effect to the parties’ rights and duties under a domestic statute. While the judge’s finding on the justiciability issue went uncontested in the appeal, the Court of Appeal nonetheless set out its views on the issue on an obiter basis. The Court essentially agreed with the judge, opining that the High Court was not only competent to consider these issues but was, in the circumstances, obliged to do so.12 In the Court’s view, since the parties had designated Singapore as the seat of the arbitration, the necessary consequence was that the IAA applied to govern the arbitration, which in turn required the High Court to consider issues such as the Tribunal’s jurisdiction.13 The fact that the jurisdiction issue required the High Court to interpret a BIT to which Singapore was not a party could not, in the Court’s view, displace the Court’s obligation to provide an answer.14 B. The Standard of Review Issue On the standard of review issue, the judge held that the standard of review under section 10 of the IAA [and Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration (Model Law)]15 was de novo. On appeal, Sanum accepted the de novo standard but, nonetheless, maintained that the judge should have adopted a restrained approach by according deference and regard to the Tribunal’s findings, especially when those findings ‘arose in an investor–State arbitration concerning the application of principles of public international law’.16 The Court held that the standard of review under section 10 of the IAA was de novo, stating that there was no basis for deference to be accorded to the Tribunal’s findings once it is accepted that the standard of review was de novo.17 Further, the Court held that the standard should be de novo; while the Court stated that it would consider what the Tribunal has said on account of its persuasive value, it held that it was not bound to accept or take into account the Tribunal’s findings on the matter. The Court observed that this was consistent with PT First Media TBK v Astro Nusantara International BV,18 in which the Court endorsed the view that the Tribunal’s own view of its jurisdiction ‘has no legal or evidential value before a court that has to determine that question’.19 The Court, however, added that this did not meant that the Tribunal’s findings ought to be disregarded or that a full rehearing of all the evidence was required; rather, it simply meant that the court was at liberty to consider the material before it, ‘unfettered by any principle limiting its fact-finding abilities’,20 with the cogency and quality of the Tribunal’s reasoning, rather than their standing or eminence, that would factor in the evaluation of the matter.21 C. The 2014 Letters Issue On the 2014 Letters issue, the judge had held that the admission of fresh evidence in a section 10 IAA application was governed by the Ladd v Marshall principles (Ladd test),22 as modified in Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) (Lassiter test).23 Under the Ladd test, fresh evidence may be admitted in appellate cases only if: (i) the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) the evidence must be such that, if given, it would probably have an important influence on the result of the case (though it need not be decisive) and (iii) the evidence must be such as is presumably to be believed or, in other words, must be apparently credible (though it need not be incontrovertible).24 The Lassiter test relaxes the first condition of the Ladd test so that the party seeking to admit the evidence need only demonstrate ‘sufficiently strong reasons’ why the evidence was not adduced at the lower court’s hearing.25 The judge held that Laos had satisfied the Lassiter test requirements and, therefore, admitted them into evidence. On appeal, the issue appeared initially to concern whether the relevant test had been correctly applied,26 but it subsequently shifted towards the question of whether the 2014 Letters should have been admitted into evidence on account of the critical date doctrine under public international law,27 which renders evidence that came into being only after the dispute had arisen and is self-serving and intended by the party putting it forward to improve its position in the arbitration as being of little (if any) weight.28 The critical date had been determined by the Court to be the date on which the dispute had crystallized, which was 14 August 2012, when the arbitration proceedings were initiated,29 while the pre-existing legal position was held to be that the PRC–Laos BIT did, under State succession rules under public international law, apply to Macau (discussed further below).30 Sanum argued that the 2014 Letters should be excluded altogether on the basis that, pursuant to the critical date doctrine, their post-hoc character had rendered them irrelevant,31 citing, inter alia, Louis Goldie’s observations that the critical date is ‘exclusionary’ and ‘terminal’.32 Laos counter-argued that: (i) the critical date doctrine had no application in the present case;33 (ii) the 2014 Letters should not be excluded as that would be inconsistent with Articles 31(3)(a) and 31(3)(b) of the Vienna Convention of the Law of Treaties (VCLT),34 which envisaged that there could be a ‘subsequent agreement’ or ‘subsequent practice’ that influences the interpretation of a treaty,35 and (iii) post-critical date evidence was, in any event, according to Goldie36 and Robert Pietrowski,37 admissible to the extent that it was corroborative in nature (that is, evidence that is consistent with, and a continuation of, the pre-critical date legal position), with the 2014 Letters being merely confirmatory of the pre-existing legal position that the PRC–Laos BIT did not apply to Macau.38 With regard to the critical date doctrine, the Court held that: (i) where the substantive dispute engages questions of public international law (as was the case in the appeal), the court must consider the question of admissibility and weight within the framework of any other applicable principles of international law, including the critical date doctrine39 and (ii) the critical date doctrine allows the admission of post-critical date evidence only to the extent that it merely confirms the legal position that had been established by the pre-critical date evidence, even in a situation where the pre-critical date evidence is inconclusive, but special attention must be given to the weight that should be attached to such evidence.40 The Court also determined that the pre-existing legal position was that the PRC–Laos BIT would, by operation of the rules of State succession under public international law, apply to Macau (discussed further below).41 With regard to the 2014 Letters, the Court held that they should be excluded from the evidence on the basis that the 2014 Letters did not confirm the pre-existing legal position but, rather, that they sought to advance a contradictory position (based on PRC domestic law) that the PRC–Laos BIT did not extend to Macau.42 The Court also noted that there was no inconsistency between excluding the 2014 Letters and Articles 31(3)(a) and 31(3)(b) of the VCLT since, even if the critical date doctrine applied to exclude the 2014 Letters, this did not prevent Laos from relying on other evidence to show that there was a ‘subsequent agreement’ between the parties, so long as it came into being before the critical date.43 The Court went on to opine that, even if the 2014 Letters were admissible on account of the pre-critical date evidence being inconclusive on the question of the inapplicability of the PRC–Laos BIT to Macau, no material weight could be placed on the 2014 Letters (discussed further below).44 D. The 2015 Letters Issue With respect to the 2015 Letters issue, the parties had accepted that a party that sought to admit further evidence before the Court when it considers the substantive appeal must satisfy the Ladd test. The Court held that the 2015 Letters should be admitted because all Ladd test conditions had been fulfilled,45 particularly that, since the 2015 Letters served the purpose of confirming the authenticity of the 2014 Letters, they were by nature evidence that could not have been obtained prior to the High Court hearing. However, the Court ultimately came to the conclusion that the 2015 Letters had no bearing on the dispute, owing to the Court’s decision that the 2014 Letters were to be given no evidentiary weight.46 E. The Macau Issue On the Macau issue, the issue arose because of the return of Macau from Portuguese administration back to the PRC on 20 December 1999, which was after the date on which the PRC–Laos BIT entered into force (31 January 1993). Since the PRC–Laos BIT was silent on its application to Macau, and the Basic Law of Macau enabled Macau to conclude and implement investment agreements with foreign States and regions on its own, there was uncertainty over whether the PRC–Laos BIT extended to Macau after the handover.47 The 2014 and 2015 Letters also complicated matters, as it appeared that both Laos and the PRC were of the ex post facto opinion that their treaty did not apply to Macau. The relevant rule of public international law governing this issue was the ‘moving treaty frontiers’ rule (MTF Rule), which is encapsulated in Article 29 of the VCLT48 and Article 15(b) of the Vienna Convention on the Succession of States in Respect of Treaties (VCST).49 It was accepted by the parties that the two provisions reflected customary international law,50 with the MTF Rule thereby being taken by the Court as binding on all States, including the PRC.51 The MTF Rule essentially provides that a treaty is binding on the entire territory of each contracting State (including any new territories), unless it appeared from the treaty or is ‘otherwise established’ that: (i) the treaty did not apply in respect of the entire territory of the contracting State or (ii) the application of the treaty to the territory in question would: (a) be incompatible with the object and purpose of the treaty or (b) radically change the conditions for its operation. The Court therefore proceeded on the footing that the PRC–Laos BIT was to be presumed to automatically apply to the territory of Macau following the handover, with the relevant issue being whether any of the exceptions to the MTF Rule applied.52 The relevant exception here was whether it was ‘otherwise established’ that the PRC–Laos BIT did not apply in respect of Macau.53 As preliminary points, the Court determined that: (i) the standard of proof under public international law was the standard of satisfaction on a balance of probabilities54 and (ii) the critical date doctrine applied, so that post-critical date evidence would, insofar as they seek to contradict the pre-critical date legal position, be given little, if any, evidentiary weight.55 Laos maintained its argument made in the High Court proceedings that several pre- and post-critical date instruments and documents had ‘otherwise established’ that the PRC–Laos BIT did not apply to Macau—in particular, relying on the 2014 Letters as constituting a ‘subsequent agreement’ within the meaning of Article 31(3)(a) of the VCLT between Laos and the PRC to exclude Macau.56 Sanum, on the other hand, argued that the judge had erred in doing so.57 The judge had accepted Laos’ 2014 Letters argument by analogizing the factual matrix of the case to that which was given in Lee Hsien Loong v Review Publishing,58 in which Judicial Commissioner Sundaresh Menon (as he then was) held that the Singapore–PRC Treaty on Judicial Assistance in Civil and Commercial Matters did not apply to Hong Kong by relying on a letter from the Singapore Ministry of Foreign Affairs (which stated that the Hong Kong Department of Justice had confirmed that the Treaty was not applicable to Hong Kong).59 The judge had also added his view that the two letters did not amount to a retroactive agreement that altered the positions and expectations of third parties but, rather, were ‘an affirmation of the common understanding between the states that the treaty from its inception did not apply to Macau’, on the basis that the PRC letter was ‘worded in general terms’ and espoused a ‘categorical approach’.60 The Court ultimately held that none of the evidence produced had displaced the presumption under the MTF Rule that the PRC–Laos BIT was to apply to Macau following the handover.61 With regard to the 2014 Letters, in particular, the Court held that they were inadmissible since they were post-critical date evidence (discussed above),62 but it went on to opine that, even if the 2014 Letters were admissible, no material weight could be placed on them for three reasons.63 First, the Court noted that, under Article 27 of the VCLT, the internal laws of a State cannot be invoked to justify the non-performance of a treaty, and since the only stated justification in the 2014 Letters was based on the PRC’s internal legislation in relation to Macau (that is, the Basic Law of Macau), the 2014 Letters were held to be irrelevant and inadmissible as a consideration in international law.64 Second, the Court considered that Laos was in an even poorer position in attempting to invoke the operation of the internal laws of another State (the PRC) in order to justify Laos’ own position that it was not bound to arbitrate the claim brought by Sanum.65 Lastly, the Court was of the view that the 2014 Letters did not amount to a ‘subsequent agreement’ or ‘subsequent practice’ under Articles 31(3)(a)–(b) of the VCLT and that giving effect to the 2014 Letters would amount to an impermissible retroactive amendment of the PRC–Laos BIT, as there was no evidence of any such agreement prior to the 2014 Letters.66 The Court also noted that, while it might be open to the PRC and Laos to now enter into an express agreement to modify the PRC–Laos BIT to accord with their intentions as stated in the 2014 Letters, no such agreement could take retroactive effect and adversely affect a third party that had already commenced proceedings.67 The Court distinguished: (i) ADF Group Inc v USA,68 in which the Tribunal took into consideration a post-critical date note of interpretation on the basis that the note had been rendered binding pursuant to an express provision in the investment treaty69 and (ii) Lee Hsien Loong v Review Publishing,70 on the basis that the central issue in this case was ultimately one of service of process under Singapore domestic rules and that the issues of the retroactive amendment of treaties and the applicability of the critical date doctrine had not arisen then due to those points not having been raised or argued.71 F. The Arbitration Clause Issue With respect to the arbitration clause issue, the question was whether the Tribunal possessed subject-matter jurisdiction over Sanum’s expropriation claims. The question centred on the proper interpretation of Article 8(3) of the PRC–Laos BIT, which provided that a dispute ‘involving the amount of compensation’ may be submitted to arbitration, provided that the investor concerned has not resorted to the Article 8(2) procedure of submitting the dispute to courts of the Host State.72 The parties disagreed over whether Article 8(3) of the PRC–Laos BIT meant that any claim that included a dispute over the amount of compensation for expropriation could be submitted to arbitration (Broad Interpretation) or whether recourse to arbitration was limited to circumstances where the only issue in dispute was the amount of compensation for expropriation (Narrow Interpretation).73 The judge had opined obiter that the Narrow Interpretation should apply.74 As a preliminary point in ascertaining the interpretation to be preferred, the Court noted that, pursuant to Article 31 of the VCLT,75 the Court was to consider: (i) the ordinary meaning to be accorded to the words used in Article 8(3) of the PRC–Laos BIT; (ii) the context of the PRC–Laos BIT and (iii) the object and purpose of the PRC–Laos BIT.76 The Court ultimately held that the Tribunal did possess subject-matter jurisdiction with regard to Sanum’s expropriation claims. With regard to the ordinary meaning of Article 8(3) of the PRC–Laos BIT, the Court held that the word ‘involve’ was, by its ordinary meaning, capable of supporting both positions and, therefore, moved on to consider its context.77 With regard to the context of Article 8(3) of the PRC–Laos BIT, Laos had put forward the position that the effect of Article 8(3) (under the Narrow Interpretation) was that an investor must first go to a competent national court to determine whether an impermissible expropriation had occurred before submitting any dispute on the amount of compensation to a tribuna, and that there was nothing to prevent an investor from submitting disputes other than the amount of compensation to the municipal courts.78 Laos also cited in support a generational shift in the PRC BITs, where pre-1998 ‘first-generation’ PRC BITs (which included the PRC–Laos BIT) contained narrowly defined dispute resolution clauses that appeared to provide arbitral jurisdiction over disputes on the quantum of compensation only, whereas the ‘second-generation’ PRC BITs concluded from 1998 onwards contained much broader arbitration clauses.79 Laos also relied upon five cases80 that appeared to support the Narrow Interpretation,81 two of which involved BITs concluded by the Russian Federation (Russia) and had the tribunals accepting that Russia had specifically intended its ‘first-generation’ BITs to have a limited right to arbitration.82 In the High Court, the judge had relied on this generational shift in PRC BITs in coming to his view that the Narrow Interpretation was to be preferred.83 Sanum contended that such an interpretation would render Article 8(3) wholly ineffective on the basis that the issues of expropriation and quantum were inextricably intertwined. One of the four criteria for determining whether an impermissible expropriation has occurred under Article 4(1) of the PRC–Laos BIT is whether ‘effective and appropriate compensation’ had been accorded by the Host State,84 which meant that any municipal court that is faced with the issue of whether there had been an impermissible expropriation must first determine whether effective and appropriate compensation had been paid, and once it has, the investor is barred under Article 8(3) from referring the dispute on whether there had been effective and appropriate compensation to a tribunal.85 In the High Court, the judge had taken into consideration Sanum’s concerns on the effectiveness of Article 8(3) but ultimately held that they were not insurmountable on the basis that the option to arbitrate under Article 8(3) remained available if: (i) the only issue in dispute was that of the amount of compensation and (ii) the investor did not first submit the dispute to the municipal courts—that is, it was the host State that had submitted the dispute on expropriation to the municipal courts (the judge’s Article 8(3) view).86 The Court held that the Narrow Interpretation was untenable, in the context of the PRC–Laos BIT, due to the impossibility of segregating the intertwined issues of liability and quantum for determination in two separate forums.87 The Court agreed with Sanum that, under the fork-in-the-road provision in Article 8(3), once an expropriation claim was referred to the municipal court, no aspect of that claim, including the amount of compensation for expropriation, could then be referred to arbitration, citing in support the decision in Tza Yap Shum v Republic of Peru,88 in which the tribunal adopted the Broad Interpretation to a materially similar dispute resolution clause in the PRC–Peru BIT in order to prevent its ‘evisceration’.89 With respect to the judge’s Article 8(3) view, the Court was of the opinion that it had ignored several difficulties. First, it was unclear what issue the host State would have referred to the municipal court if the only issue were one of quantum. If the host State had indeed referred the issue of quantum to the municipal court, it was also unclear how a subsequent reference to arbitration of the same issue would be resolved.90 Second, the Court agreed with the present authors’ view in our previous comment that, as a matter of practical reality, ‘cases of direct expropriation (with only quantum issues being in dispute) are becoming increasingly rare, and that it is entirely open to the Host State to avoid arbitration over the amount of compensation for indirect expropriation simply by not submitting the dispute on liability to its municipal courts’.91 The Court observed that this would lead to the untenable conclusion that, notwithstanding the presence of an arbitration clause, the investor would in practice have no access to arbitration.92 The Court also distinguished all of the five cases cited by Laos in support of its argument for the Narrow Interpretation, particularly on the ground that none of them involved a similar fork-in-the-road provision, which meant that a narrow interpretation to the dispute resolution clauses would not have resulted in an illusory right to arbitration.93 The Court also considered that the specific context relevant to the Russian BITs could not be transposed to PRC BITs.94 With regard to the generational shift in the PRC BITs, the Court was of the view that there had to be evidence of a ‘specific intention’ of the State parties to the BIT and not mere general observations made by commentators or the general policy stance of a State.95 With regard to the object and purpose of Article 8(3) of the PRC–Laos BIT, the Court held that the Broad Interpretation was consistent with the object and purpose of the PRC–Laos BIT, which had the express purpose (as stated in the preamble96) of promoting investment by investors and advancing the development of economic cooperation between both States.97 IV. THE MECHANICS OF THE MUNICIPAL REVIEW OF ARBITRAL AWARDS While the Court reversed the substantive decision made by the Court below, the Court agreed with the judge on all aspects of the mechanics of the review of arbitral awards—that is, the issues of justiciability, the standard of review and the admission of fresh evidence. However, there remain certain aspects of the Court’s decision on these issues that are worth revisiting. A. Jurisdiction and Justiciability The Court of Appeal was of the view that the Singapore courts possessed the jurisdiction to review investment treaty awards, stating that the High Court was not only competent to consider the interpretation and application of the PRC–Laos BIT but also was obliged to do so in the circumstances of this case under section 10 of the IAA, which applied to govern the arbitration by virtue of the parties having designated Singapore as the seat of the arbitration.98 Some commentators, however, have criticized the application of section 10 of the IAA to investment treaty arbitral awards on the basis that: (i) the IAA is a piece of legislation that is intended to give effect to the Model Law, which is concerned only with international commercial arbitration99 and (ii) an investor’s claims against the host State is based not on a commercial relationship between the parties but, rather, on treaty obligations in a BIT between the host State and the investor’s home State.100 On this basis, it was said that it was ‘doubtful’ that a Singapore court could be asked to invoke its jurisdiction under section 10 of the IAA to review the Tribunal’s jurisdiction101 and that the readiness of the Singapore courts to assert supervisory jurisdiction could potentially work against Singapore’s intention to poise itself as a place of choice for investor–State arbitration.102 In our view, this is a rather curious submission to make for three reasons. First, while it is true that the Model Law itself defines its scope of application to ‘international commercial arbitration’, it also states that the term ‘commercial’ should be given a ‘wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not’, including matters of ‘investment’.103 Such an interpretation would, on its face, be wide enough to encompass a relationship arising from investments made in a host State that are given certain protections by an investment treaty to which the host State is a party. Second, several courts and tribunals have accepted the applicability of the law of the tribunal’s juridical seat in investor–State arbitration (including annulment provisions),104 and it would be odd to view this as being any different merely because the law of the juridical seat is based on the Model Law. Furthermore, the Singapore Court of Appeal has stated that ‘no State will permit a binding arbitral award to be given or enforced within its territory without being able to review the award, or, at least, without allowing the parties an opportunity to address the court if there has been a violation of due process or other irregularities in the arbitral proceedings’,105 and it would be strange to see this general principle apply to commercial arbitration but not to investor–State arbitration. Lastly, if section 10 of the IAA were not to apply to investment treaty awards on the basis that the IAA and the Model Law are concerned only with international commercial arbitration, then it stands to reason that no other provisions of the IAA or the Model Law should apply either. This would lead to the untenable situation where the parties to investment treaty arbitrations seated in Singapore could obtain no form of curial assistance from the Singapore courts, thereby rendering the seat of the arbitration in Singapore effectively meaningless. In practical terms, it would also lead to Singapore becoming a rather unattractive location for investment treaty arbitration, which would run contrary to Singapore’s ambitions.106 B. Standard of Review for Investment Treaty Awards The Court of Appeal upheld the judge’s decision that the standard of review under section 10 of the IAA was de novo and that, while the Tribunal’s findings would be considered, it was the cogency and quality of the reasoning, and not the eminence or expertise of the Tribunal, that would serve as a factor in the evaluation of the matter.107 We had previously commented that this must be correct since, among other things, any standard of review other than de novo would result in the entire arbitral process pulling itself up by its own bootstraps, and the parties would be free, in any event, to engage public international law experts to aid the municipal judge in coming to his or her decision.108 However, there remain potential difficulties to be faced by municipal courts in reviewing investment treaty awards on jurisdiction. As we mentioned before, one such difficulty is where the tribunal’s ruling on jurisdiction is intertwined with the merits of the dispute (for example, whether the investor has made an ‘investment’).109 Another difficulty is where the issues that are considered by the tribunal pertain not to jurisdiction but, rather, to admissibility. A tribunal’s decisions on the latter are generally viewed as not being subject to the same standard of review as decisions on jurisdictional issues,110 but it may be difficult to draw the line between jurisdiction and admissibility, such as in the issue of pre-conditions to arbitration.111 While the issue of the standard of review of jurisdictional awards may be settled as a matter of Singapore law, the parameters of its application to a myriad of international arbitral awards remains to be seen. C. Evidential Issues in De Novo Review As mentioned in our earlier comment, the judge’s decision left open some questions as to the treatment of evidence in a section 10 IAA review, in particular: (i) whether the court would be required to conduct a complete retrial and/or rehearing on the question of whether the tribunal had jurisdiction in fact and (ii) whether the judge had been correct in applying the Lassiter test in the admission of fresh evidence in a de novo review of a tribunal’s ruling on jurisdiction.112 The Court of Appeal expressly addressed the first question by agreeing with the obiter remarks of Justice Judith Prakash (as she then was) in AQZ v ARA that de novo review simply means that the court is unfettered by any principle limiting its fact-finding abilities and that this does not entail a full rehearing of all of the evidence.113 In AQZ v ARA, it was further remarked that the Singapore courts retained the discretion under the Rules of Court to allow the admission of oral evidence and/or cross-examination for the purposes of securing the ‘just, expeditious and economical disposal of the matter’,114 which would only be exercised where special circumstances exist beyond the mere existence of factual disputes (for example, ‘awkward and recondite’ issues involving foreign law).115 While the Court of Appeal made no reference to this further remark, it is an eminently sensible one that ought to be followed in future cases. As for the second question, the Court of Appeal had no need to address it as there appeared to be no real dispute on the applicability of the Lassiter test, leading the Court to focus entirely on the more pertinent question of the critical date doctrine and its application to the 2014 Letters.116 In contrast to the High Court in Sanum, Justice Prakash held the opinion in AQZ v ARA that, in a de novo review, fresh evidence is admissible as of right, with the lateness of the introduction of the evidence going only to its evidential weight and issues of costs.117 As noted in a subsequent case, there therefore appears to be two entirely different approaches under Singapore law as to the admission of fresh evidence in a section 10 IAA review,118 with the correct approach being an issue that was left unresolved by the Court of Appeal in Sanum. We had previously written that the Lassiter test is ill-suited for application to the de novo review of a tribunal’s ruling on jurisdiction since: (i) it is based off the Ladd test, which was designed to prevent abuse of the appellate process and not a process of de novo review and (ii) the Lassiter test is essentially a relaxed version of the Ladd test that applies specifically to decisions of the Registrar,119 which does not involve the conducting of proceedings akin to a full trial.120 Therefore, we suggest that guidance should instead be taken from Central Trading & Exports Ltd v Fioralba Shipping,121 where the English High Court adopted an approach in which the parties had the right to adduce fresh evidence, but the Court retained the discretion to exclude any such evidence, with the overall objective of establishing fairness to the parties and preventing irremediable prejudice.122 We maintain that this approach would better enable the courts to strike a balance between the competing priorities of ascertaining arbitral consent and preventing abuses of the arbitral process. Another commentator had also come to the same conclusion, adding that the Fioralba approach ‘accords appropriate significance to the fact that a challenge on the tribunal’s jurisdiction does not operate by way of an appeal by holding that the starting point is that a party generally has the right to adduce fresh evidence’.123 Separately, it is also notable that the Court of Appeal had taken cognizance of the role of public international law in matters of evidence and proof in a section 10 IAA review of investment treaty awards—in particular, by holding that: (i) the standard of proof under public international law, at least with regard to the issue of whether an exception to the MTF Rule had been established, was that of satisfaction on a balance of probabilities,124 and (ii) where the substantive dispute engages questions of public international law, the court ‘must consider the question of admissibility and weight within the framework of any other applicable principles of international law, such as the critical date doctrine’.125 This will no doubt provide much clarification for future applications under section 10 of the IAA in the investment treaty context.126 V. THE USE OF SUBSEQUENT AGREEMENTS IN TREATY INTERPRETATION In our earlier comment, we stated that the judge, in holding that the 2014 Letters amounted to a ‘subsequent agreement’ within the meaning of Article 31(3)(a) of the VCLT, notwithstanding that they came into existence after the date of the institution of arbitral proceedings, had seemingly glossed over the temporal element of treaty interpretation, particularly, the critical date doctrine.127 The critical date doctrine follows naturally from the principle in investor–State arbitration that a tribunal’s jurisdiction is vested at the point that consent is perfected, even if the contracting States have amended or terminated the investment treaty retroactively.128 As a matter of policy, such a rule provides certainty and precludes any attempt by the respondent host State to defeat jurisdiction while proceedings are in progress, which may include acts such as the amending of legislation, denouncing a treaty or changing the nationality of a person.129 The Court’s careful examination of the critical date doctrine and its application of it to the 2014 Letters is therefore a welcome development. One point of interest in the Court of Appeal’s judgment is the revelation of the inherent tension between the interpretive authority of the treaty parties and of international courts and tribunals. In Sanum, this tension manifested itself in the conflict between the critical date doctrine and Article 31(3)(a) of the VCLT, in that, while the critical date doctrine all but precluded the use of evidence that came into existence after the submission of the dispute to arbitration, Article 31(3)(a) of the VCLT clearly allowed the use of subsequent agreements in interpreting a treaty. This was apparent to both the judge130 as well as the Court of Appeal, the latter having noted that its conclusion might appear ‘counter-intuitive’.131 PRC scholars have mostly found it difficult to accept that the critical date doctrine could operate to allow a municipal court to ignore the treaty parties’ common position on the scope of their own treaty.132 It is notable that, in international law disputes, this tension exists almost exclusively in the investor–State realm. In inter-State disputes, the issue of the use of subsequent agreements or practices between the treaty parties often does not arise simply because, if the treaty parties manage to agree on a particular interpretation of the treaty, there is unlikely to be a dispute about that treaty; it is more likely that inter-State parties would have a dispute over the existence of an alleged agreement or practice or the interpretation of a joint instrument.133 In investor–State disputes, however, the dispute is not between the treaty parties but, rather, between an investor as the claimant and one of the treaty parties as the respondent. In such a scenario, it is entirely possible for the respondent to refer to subsequent agreements or practices between it and the other treaty party or parties in order to adopt concordant stances and for the investor to contest the existence and use of such agreements or practices.134 An adjudicator in an investor–State dispute would be far more circumspect about the use of such agreements and practices; in inter-State disputes, the adjudicator would naturally be deferential to the views of the treaty parties as they are both the creators and beneficiaries of the treaty, so that the scope for ‘interpretation’ is not necessarily determined by a fixed ‘original intent’,135 but in investor–State disputes, the treaty’s creators and its beneficiaries are not one and the same since the treaty creates legal rights and obligations that are intended for the benefit of third parties.136 International courts and tribunals in investor–State disputes may therefore view themselves, at least partially, as trustees tasked with protecting the interests of the non–State beneficiaries of the treaty.137 The Court of Appeal in Sanum was evidently alive to the problems of the use of subsequent agreements in the context of investor–State disputes as well as of its role in protecting the interests of the holders of rights accrued under an investment treaty. The Court noted that, while it may be open to the PRC and Laos to enter into an express agreement to modify the PRC–Laos BIT to accord with their intentions as stated in the 2014 Letters, this could not ‘take retroactive effect and adversely affect a third party which has already brought proceedings’.138 This is analogous to general contract law principles where parties to a contract generally cannot act to adversely impact third party rights once the beneficiary has accepted them or reasonably acted in reliance on them,139 and it is consistent with an emerging view in investment treaty jurisprudence that the interpretation of investment treaties should be less susceptible to the post-hoc interpretive whims of the treaty parties.140 The Court’s adoption of the critical date doctrine, which is not uncommon in the investment treaty context,141 may therefore be seen as simply one way of protecting the interests of non-State beneficiaries. Such a view is legitimate as a matter of treaty interpretation, as Article 31(3) of the VCLT only requires the adjudicator to ‘take into account’ any subsequent agreement or practice between the treaty parties. International courts and tribunals are therefore free to give less, if any, weight to any such subsequent agreement or practice insofar as it is in reality an attempt to ride roughshod over rights and benefits that have been accrued to third parties. Another related point of interest is that the Court of Appeal appeared to accept (albeit obiter) that post-critical date evidence might operate to deprive a tribunal of its jurisdiction if it had amounted to a binding interpretive statement under the relevant investment treaty. In Sanum, the Court had distinguished ADF Group v United States142 on the basis that the post-critical date note was, pursuant to an express provision in the investment treaty (North American Free Trade Agreement [NAFTA]), binding on the Tribunal.143 The post-critical date note in AFD Group was an interpretation issued in July 2001 by the NAFTA Free Trade Commission (FTC),144 composed of ‘Cabinet-level representatives’ of the NAFTA parties or their designees, which has the power to supervise the implementation of the NAFTA, oversee its further elaboration and ‘resolve disputes that may arise regarding its interpretation or application’,145 with such interpretations being binding upon tribunals established under Chapter 11 of NAFTA.146 It should be noted that such non-judicial interpretative mechanisms are not unique to NAFTA; they are present in several international instruments (such as the United States–Singapore Free Trade Agreement147) as well as in certain international organizations where the charter or other constitutive documents vest power in a body of the organization to provide interpretations of the relevant treaty (for example, the World Trade Organization and the International Monetary Fund).148 However, the use of such interpretative statements is controversial, especially where the statement is issued in the middle of ongoing disputes. Commentators have argued against the use of such statements, particularly because: (i) such interpretative statements may be nothing more than masked amendments of the treaty in question;149 (ii) they incentivize parties to intentionally blur the line between treaty amendment (which has only prospective effect) and treaty interpretation (which has both retrospective and prospective effect) in an attempt to change the rules of the game in their favour150 and (iii) the application of such interpretative statements to pending disputes may violate various legal principles, such as those of due process,151 non-retroactivity152 and nemo judex in causa sua (no person may be a judge in his or her own cause),153 thereby undermining the rule of law.154 A future court faced with a similar non-judicial interpretive mechanism should therefore be aware that not even a ‘binding’ interpretive statement would provide an easy answer to the dispute.155 Separately, it remains unclear what effect Sanum has for future investment treaty disputes under PRC BITs that involve investors from the special administrative regions, considering especially that, in October 2016, the PRC’s Ministry of Foreign Affairs claimed that the Singapore Court of Appeal was wrong to hold that the PRC–Laos BIT applied to Macau on the basis of the PRC’s domestic laws and the 2014 and 2015 Letters.156 In such a future dispute, it is entirely possible that the respondent host State will seek to rely on the 2014 and 2015 Letters as well as Laos’ pleadings in Sanum and the PRC’s public statements, as constituting a subsequent agreement or practice to the effect that the BIT in question does not confer investment protection on Hong Kong and Macanese investors. This would be in line with a recent trend in investor–State arbitration in which host States have sought to rely on the pleadings of host States as a subsequent agreement and/or practice in putting forth their legal defence against the investor’s claims, which is in itself controversial.157 VI. THE INTERPRETATION OF ‘AMOUNT-OF-COMPENSATION’ DISPUTE RESOLUTION CLAUSES IN INVESTMENT TREATIES In Sanum, the issue of the scope of Article 8(3) of the PRC–Laos BIT before the Court of Appeal, unlike before the High Court, was a live one due to the Court’s decision that there was nothing to displace the operation of the MTF Rule to the PRC–Laos BIT. The Court of Appeal ultimately came to the opposite conclusion of the judge’s obiter view on the interpretation of Article 8(3) of the PRC–Laos BIT, holding that Article 8(3) provided arbitral jurisdiction over issues about not only the quantification of compensation for expropriation but also the investor’s entitlement to compensation for expropriation in the first place. The Court of Appeal had engaged in a very careful analysis of the workings of Article 8(3) as well as a meticulous examination of the available jurisprudence and commentary on similar treaty provisions, effectively remedying what we had described as a missed opportunity in the High Court. In our previous comment, we had discussed the history and context behind such ‘amount of compensation’ dispute resolution clauses found in ‘first generation’ investment treaties concluded by communist states as well as the problems they present.158 The main problem with such clauses is that their usefulness had become questionable due to the decreasing relevance of direct expropriation (with only the amount of compensation being in dispute) and the concomitant rise of indirect expropriation (with the issue of whether a governmental measure amounted to expropriation being in dispute) in modern investment disputes.159 While it may have made sense to have a limited scope of jurisdiction over the amount and method of compensation in the mid-twentieth century when investor–State disputes often revolved around the appropriate amount of compensation for direct expropriation,160 depriving modern investment tribunals of the power to determine whether an expropriation has occurred would effectively deprive investors of their right to have the amount of compensation for indirect expropriation determined by an international tribunal, as the host State could easily avoid such narrow jurisdiction simply by denying the existence of any regulatory expropriation.161 While the Court in Sanum noted that, even in cases of direct expropriation, host States could also deny investors of the right to arbitration simply by denying that it had engaged in expropriatory acts,162 it would be extremely difficult for a host State to plausibly deny an act of direct expropriation, which is usually in the realm of very public acts of nationalization.163 In modern investment disputes, the problematic nature of such restrictive arbitration clauses is reflected in the sharp divide in the case law jurisprudence on the proper interpretation to take. Some tribunals employ a broad interpretation so as to arbitrate disputes on both liability for expropriation and quantum of compensation,164 while other tribunals have adopted a narrow interpretation to restrict their jurisdiction to disputes on quantum of compensation only.165 The outcomes have differed despite the common use of Article 31 of the VCLT as an interpretative tool, depending on whether the tribunal chooses to place importance on the ordinary meaning of the treaty text or to instead give a dominant role to the object and purposes of the BIT.166 It was an emphasis on the context, object and purposes of the BIT, as well as the principle of effet utile, that led the Court of Appeal in Sanum to favour the Broad Interpretation of Article 8(3) of the PRC–Laos BIT. However, any potential impact the Court’s interpretation may have in future investment disputes on such ‘amount-of-compensation’ clauses may be quite narrow, as the chief consideration in the Court’s judgment was the fork-in-the-road provision in Article 8(3), which, under the Narrow Interpretation, made the purported path to arbitration an effective dead end.167 The Court was clearly aware of the practical reality that the Narrow Interpretation would have led to Article 8(3) being denuded of all force for modern investment disputes concerning indirect expropriation,168 though it appeared that the Court was not prepared to accept the Broad Interpretation on this concern alone.169 With regard to the PRC BITs’ generational shift, the Court was able to avoid examining this thorny issue at length on the ground that there had to be evidence of a ‘specific intention’ of the treaty parties,170 although the Court could equally have relied on Article 32 of the VCLT, which permits the use of such supplementary means of interpretation only if the interpretation under Article 31 had led to an ambiguous or obscure meaning or a manifestly unreasonable or absurd result.171 A recent example of how an entirely different outcome may be arrived at by emphasizing the text of the investment treaty can be seen in Juan Ignacio and Others v Russia,172 a decision by the Svea Court of Appeal concerning the interpretation of Article 10 of the Russia–Spain BIT.173 Article 10 states that any dispute between an investor and a host State ‘relating to the amount or method of payment of the compensation [for expropriation under Article 6]’ may be referred to arbitration either under the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce or arbitration under the UNCITRAL Arbitration Rules.174 The Tribunal held that Article 10 was to be construed broadly to include disputes on both the existence of ‘compensable expropriation’,175 and the quantum of compensation, on the basis that, considering that a ‘fundamental advantage’ perceived by investors in many, if not most, BITs is that of ‘the internationalisation of the host state’s commitments’, it would be ‘impermissible to read Article 10…as a vanishingly narrow internationalisation of either Russia’s or Spain’s commitment’.176 As with the cases of Tza Yap Shum, Sanum and Beijing Urban, the Tribunal was particularly taken by the fact that, should Article 10 be limited to quantum disputes, the host State may unilaterally deprive the investor of any access to arbitration simply by denying liability for expropriation.177 However, in subsequent annulment proceedings, the Svea Court of Appeal came to the opposite conclusion, holding that Article 10 was, by its text alone, clear that the tribunal’s jurisdiction was limited to disputes on the amount or method of payment of compensation for expropriation.178 Notwithstanding the Tribunal’s concerns on the consequences of a narrow interpretation of Article 10, the Svea Court of Appeal was of the view that its interpretation left no room for any remaining ambiguity or obscurity and did not lead to manifestly unreasonable or absurd outcomes.179 It is an open question whether the Court of Appeal in Sanum might have come to a different conclusion since, unlike Article 8(3) of the PRC–Laos BIT, Article 10 of the Russia–Spain BIT contains a very different fork-in-the-road provision, with both forks leading to international arbitration and neither undermining the other. However specific it may be, the Court of Appeal’s reliance on the fork-in-the-road provision, which was first seen in Tza Yap Shum,180 has already proven to be influential in the interpretation of other ‘first-generation’ PRC BITs, though it is far from being the final word on the subject. In the Beijing Urban case,181 the Tribunal was faced with Article 10 of the PRC–Yemen BIT,182 which stated that any dispute between an investor and the host State may be submitted to either a competent court of the host State or arbitration under the International Centre for the Settlement of Investment Disputes, subject to the proviso that the contracting States ‘shall give its irrevocable consent to the submission of any dispute relating to the amount of compensation for expropriation for resolution under such arbitration procedure’, with other disputes to be ‘mutually agreed upon between both Contracting parties’.183 The Tribunal held, following Sanum, that a broad interpretation of Article 10 (so that issues of both liability and quantum could be referred to arbitration) was necessary to prevent the ‘untenable conclusion’ that the investor would ‘never actually have access to arbitration’.184 Yemen’s argument on the PRC BITs’ generational shift was dismissed by the Tribunal on the basis that Article 32 of the VCLT precluded the use of such supplementary means of interpretation.185 In contrast, in the China Heilongjiang case,186 which concerned a dispute resolution clause in the PRC–Mongolia BIT187 that is virtually identical to Article 8(3) of the PRC–Laos BIT,188 the Tribunal came to the opposite conclusion of the Court of Appeal in Sanum by holding that Article 8(3) of the PRC–Mongolia BIT was to be read narrowly to allow only quantum disputes to be submitted to arbitration.189 The Tribunal was of the view that the Narrow Interpretation would not render the right to arbitration under Article 8(3) of the PRC–Mongolia BIT illusory, particularly because the investor would clearly have the right to arbitration in cases of ‘formally proclaimed’ expropriations (that is, expropriations that had been formally announced by the host State via legislative or executive means) with only the amount of compensation being in dispute.190 In the Tribunal’s view, while formally proclaimed expropriations were less common than non-proclaimed ones, their occurrence was nonetheless uncontested, and an arbitration provision that would encompass an entire category of disputes could not fairly be said to be lacking effet utile.191 The Tribunal was of the further view that the right to arbitration was also available in cases of non-proclaimed (indirect) expropriation on the basis that the investor was, under the fork-in-the-road provision of Article 8, free to seek redress from the domestic courts while expressly reserving the quantum issues for arbitral proceedings under Article 8(3) of the PRC–Mongolia BIT.192 Unlike the Court of Appeal in Sanum, the Tribunal did not appear to be of the opinion that the issues of liability and quantum for expropriation were inextricably intertwined. The China Heilongjiang Award is currently subject to setting aside proceedings before the US District Court for the Southern District of New York on the ground that the Tribunal’s interpretation of Article 8(3) of the PRC–Mongolia BIT ‘defeats the purpose of investor state arbitration’.193 It therefore appears that the issue of the proper interpretation of Article 8(3) of the PRC–Mongolia BIT remains in flux. The upshot of all this is that Sanum’s impact on the interpretation of such ‘amount-of-compensation’ clauses may be restricted to disputes over clauses that have a similarly critical drafting flaw, namely a fork-in-the-road provision that leads to there being no actual right to arbitration, no matter the type of dispute. Such clauses are present in around 70 ‘first-generation’ PRC BITs—hence, the interpretation of their dispute resolution clauses has potentially significant implications for Chinese foreign investments around the world. Notably, while the PRC has disputed the applicability of its BITs to the special administrative regions, it has not disputed the correctness of the Court’s decision on the interpretation of Article 8(3) of the PRC–Laos BIT.194 It may well be that an expansive reading of such clauses may no longer be of particular concern to the PRC since it has accepted international arbitration for all disputes in its ‘third-generation’ BITs.195 With regard to ‘amount-of-compensation’ clauses in general, the case law on the proper interpretation of such clauses is foreseen to remain unsettled; as observed by the Court of Appeal in Sanum, minor differences in wording can significantly alter the operation of two otherwise similar treaties,196 and there are other ways to expansively interpret restrictive arbitration clauses, such as through the use of ‘most-favoured nation’ clauses197 or even the general policy consideration that foreign investment would not be promoted by purely formal or illusory standards of protection.198 Further, as seen in the China Heilongjiang case, a tribunal may arrive at an entirely different interpretation depending on the available evidence on the operation of such clauses in the territories of the contracting States. However, what is clear is that the Singapore courts have taken on a more assertive and internationalist role in the adjudication of investment disputes. In our previous comment, we had stated that the crux of the issue here is whether an investment tribunal may pragmatically interpret a restrictive treaty term in an expansive way notwithstanding the apparent intentions of the contracting States. From this inquiry, we now consider the further and difficult question of whether it is the proper role of investment tribunals to correct the meaning of dispute resolution clauses they deem useless or senseless or whether such remedial action should remain reserved to the State parties to the investment treaty—that is, whether it is the treaty interpreter or the treaty maker who determines the proper scope of the arbitration.199 It would appear that, in its recognition of the need to protect rights and benefits accrued to third parties to the investment treaty and in its efforts to avoid an illusory right to arbitration, the Court of Appeal in Sanum emphatically decided in favour of the former. VII. CONCLUSION Sanum is a highly significant and well-reasoned decision of the Singapore Court of Appeal. As the first judgment by Singapore’s apex court involving the curial review of an investment award, Sanum has provided much needed clarity on several aspects of the mechanics of such review, such as the confirmation that the interpretation and application of treaties to which Singapore is not a party are justiciable matters insofar as the Singapore courts are required to do so in order to give effect to the parties’ rights and duties under the IAA as well as the confirmation that the standard of review of arbitral awards on jurisdiction is de novo. Sanum also shows that the Singapore courts will not shy away from dealing with complex issues of public international law, as shown in its application of the critical date doctrine in determining issues concerning the operation of the MTF Rule and its clarification that the standard of proof on matters concerning public international law is on a balance of probabilities. Most significant is perhaps the Court’s serious and meticulous examination of the issues and jurisprudence surrounding ‘amount-of-compensation’ clauses in investment treaties as well as its treatment of unworkable ‘fork-in-the-road’ provisions in such clauses. The Court has shown that it is very much aware of the general problems that plague such clauses, and it has settled on an interpretation that ensures that a fork in the road towards the path to arbitration does not end up being a dead end. It will undoubtedly be seen as an influential and prominent decision in modern investment treaty jurisprudence on the workings of not-so-modern investment treaties. Footnotes 4 Government of the Lao People’s Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 [Sanum (HC)]. 5 See Michael Hwang and Aloysius Chang, ‘Case Comment: Government of the Lao People’s Democratic Republic v Sanum Investments Ltd: A Tale of Two Letters’ (2015) 30(3) ICSID Rev—FILJ 506. 6 Agreement between the Government of the People’s Republic of China and the Government of the Lao People’s Democratic Republic Concerning the Encouragement and Reciprocal Protection of Investments (signed 31 January 1993, entered into force 1 June 1993) (PRC–Laos BIT). 7 Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Arbitration Rules) (1976). 8 Sanum Investments Limited v Government of the Lao People’s Democratic Republic, PCA Case No 2013-13, Award on Jurisdiction (13 December 2013). 9 International Arbitration Act, Cap 143A (rev edn, 2002) (Singapore) (IAA). 10 Sanum (HC) (n 4) para 40. 11 ibid. 12 Sanum (n 1) para 38. 13 ibid. 14 ibid. 15 United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (2006) (UNCITRAL Model Law). 16 Sanum (n 1) para 40. 17 ibid para 41. 18 PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and Others and Another Appeal [2014] 1 SLR 372. 19 ibid paras 162–3, citing Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763, para 30 (per Lord Mance JSC). 20 Sanum (n 1) para 43, citing AQZ v ARA [2015] 2 SLR 972, para 57. 21 Sanum (n 1) para 44. 22 Ladd v Marshall [1954] 1 WLR 1489. See also Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd [2012] 3 SLR 1088, para 17. 23 Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) [2004] 2 SLR(R) 392. 24 Ladd (n 22) 1491. 25 Lassiter (n 23) para 24. 26 Sanum (n 1) para 102. 27 ibid para 103–8. 28 ibid para 64–5, citing Robert Pietrowski, ‘Evidence in International Arbitration’ (2006) 22(3) Arb Intl 373, 399. 29 Sanum (n 1) para 67. 30 ibid para 49. 31 ibid para 105. 32 LFE Goldie, ‘The Critical Date’ (1963) 12(4) ICLQ 1251. 33 Sanum (n 1) para 66. 34 Vienna Convention on the Law of Treaties (opened for signature 23 May 1969; entered into force on 27 January 1980) (VCLT). 35 Sanum (n 1) para 66. It should be noted that the judge had agreed with this argument. See Sanum (HC) (n 4) paras 68–9. 36 Goldie (n 32) 1254. 37 Robert Pietrowski, ‘Evidence in International Arbitration’ (2006) 22(3) Arb Intl 373, 399–400. 38 Sanum (n 1) para 106–7. 39 ibid para 103. 40 ibid para 108. 41 ibid paras 47–9. 42 ibid para 112. 43 ibid paras 68–9. 44 ibid paras 113–21. 45 ibid paras 30–5. 46 ibid para 121. 47 Basic Law of the Macau Special Administrative Region of the People's Republic of China (adopted at the First Session of the Eighth National People's Congress on 31 March 1999 and promulgated by Order No. 3 of the President of the People's Republic of China on 31 March 1993, and effective as of 20 December 1999) (Basic Law of Macau). 48 VCLT (n 34) art 29 (Territorial Scope of Treaties) states: ‘Unless a different intention appears from the treaty or is otherwise established, a treaty is binding upon each party in respect of its entire territory.’ 49 Vienna Convention on the Succession of States in Respect of Treaties (signed 23 August 1978, entered into force 6 November 1996) art 15 (Succession in Respect of Part of Territory) states: When part of the territory of a State, or when any territory for the international relations of which a State is responsible, not being part of the territory of that State, becomes part of the territory of another State: (a) treaties of the predecessor State cease to be in force in respect of the territory to which the succession of States relates from the date of the succession of States; and (b) treaties of the successor State are in force in respect of the territory to which the succession of States relates from the date of the succession of States, unless it appears from the treaty or is otherwise established that the application of the treaty to that territory would be incompatible with the object and purpose of the treaty or would radically change the conditions for its operation. 50 Sanum (n 1) para 47. 51 ibid para 75–6. 52 ibid para 49. 53 ibid paras 61–70. 54 ibid paras 61–2. 55 ibid paras 103–8. 56 ibid para 63. 57 ibid para 63. 58 Lee Hsien Loong v Review Publishing Co Ltd and another [2007] 2 SLR(R) 453. 59 Treaty on Judicial Assistance in Civil and Commercial Matters between the Republic of Singapore and the People’s Republic of China, GN No T2/2001, Bilateral Treaty No B459 (28 April 1997). 60 Sanum (HC) (n 4) paras 76–7. 61 Sanum (n 1) paras 70–122. 62 ibid paras 112–13. 63 ibid para 113. 64 ibid para 114. 65 ibid para 115. 66 ibid para 116. 67 ibid para 116(e). 68 ADF Group Inc v United States of America, ICSID Case No ARB(AF)/00/1, Award (9 January 2003). 69 Sanum (n 1) paras 117–18. 70 Lee Hsien Loong (n 58). 71 Sanum (n 1) para 120. 72 PRC–Laos BIT (n 6) arts 8(1)–(3), reproduced in full, are as follows: Article 8 (1) Any disputes between an investor of one Contracting State and the other Contracting State in connection with an investment in the territory of the other Contracting State shall, as far as possible, be settled amicably through negotiation between the parties to the dispute. (2) If the dispute cannot be settled through negotiation within six months, either party to the dispute shall be entitled to submit the dispute to the competent court of the Contracting State accepting the investment. (3) If a dispute involving the amount of compensation for expropriation cannot be settled through negotiation within six months as specified in paragraph 1 of this Article, it may be submitted at the request of either party to an ad hoc arbitral tribunal. The provisions of this paragraph shall not apply if the investor concerned has resorted to the procedure specified in the paragraph 2 of this Article’ (emphasis added). 73 Sanum (n 1) para 124. 74 Sanum (HC) (n 4) para 121. 75 VCLT (n 34) art 31(1) states 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’, while art 31(3) of the VCLT states that, in the interpretation of a treaty, there ‘shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties’. 76 Sanum (n 1) para 125. 77 ibid para 126. 78 ibid para 128. 79 ibid para 22. 80 Plama Consortium Ltd v Republic of Bulgaria, ICSID Case No ARB/03/24, Decision on Jurisdiction (8 February 2005); Austrian Airlines v Slovakia, UNCITRAL, Final Award (9 October 2009); ST-AD GmbH v Republic of Bulgaria, PCA Case No 2011-06, Award on Jurisdiction (18 July 2013); Vladimir Berschader and Moïse Berschader v Russian Federation, SCC Case No 080/2004, Award (21 April 2006); RosInvest Co UK Ltd v Russian Federation, SCC Case No V079/2005, Award on Jurisdiction (1 October 2007). 81 Sanum (n 1) paras 135–45. 82 Vladimir Berschader (n 80); RosInvest (n 80). 83 Sanum (HC) (n 4) paras 123–6. 84 PRC–Laos BIT (n 6) art 4(1), reproduced in full, is as follows: Article 4 1. Neither Contracting State shall expropriate, nationalize or take similar measures (hereinafter referred to as ‘expropriation’) against investments of investors of the other Contracting state in its territory, unless the following conditions are met: a. as necessitated by the public interest; b. in accordance with domestic legal procedures; c. without discrimination; d. against appropriate and effective compensation (emphasis added). 85 Sanum (n 1) para 128. 86 Sanum (HC) (n 4) para 122. 87 Sanum (n 1) para 130. 88 Tza Yap Shum v Republic of Peru, ICSID Case No ARB/07/06, Decision on Jurisdiction and Competence (19 June 2009). This decision was subsequently and unsuccessfully challenged in ICSID annulment proceedings: see Tza Yap Shum v Republic of Peru, ICSID Case No ARB/07/6, Decision on Annulment (12 February 2015). 89 Sanum (n 1) paras 130–1. Agreement between the Government of the Republic of Peru and the Government of the People’s Republic of China Concerning the Encouragement and Reciprocal Protection of Investments (signed 9 June 1994, entered into force 1 February 1995). 90 Sanum (n 1) para 133. 91 ibid para 133, citing Hwang and Chang (n 5) 522. 92 ibid para 133. 93 ibid paras 135–46. 94 ibid para 145. 95 ibid para 146. 96 The preamble of the PRC–Laos BIT (n 6) stated as follows: ‘Desiring to encourage, protect and create favourable conditions for investment by investors of one Contracting State in the territory of the other Contracting State based on the principles of mutual respect for sovereignty, equality and mutual benefit and for the purpose of the development of economic cooperation between both States.’ 97 Sanum (n 1) paras 149–50. 98 ibid para 38. 99 In support of this argument were several references to the use of the word ‘commercial’ in the IAA (n 9) and the UNCITRAL Model Law (n 15), eg, the long title of the IAA (‘conduct of international commercial arbitrations’), the title to Part II of the IAA (‘International Commercial Arbitration’), section 5(2)(b) of the IAA (‘obligations of the commercial relationship’) and art 1(1) of the Model Law (‘this Law applies to international commercial arbitration’) and its accompanying footnote to ‘commercial’. 100 Lawrence Boo and Earl J Rivera-Dolera, ‘SAL Annual Review: Arbitration’ (2015) 16 SAL Annual Rev 100, 100–2. 101 ibid 102. 102 Lawrence Boo and Earl J Rivera-Dolera, ‘SAL Annual Review: Arbitration’ (2016) 17 SAL Annual Rev 89, 93. 103 The footnote to UNCITRAL Model Law (n 15) art 1(1) states: The term ‘commercial’ should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road (emphasis added). 104 See Hege Elisabeth Kjos, Applicable Law in Investor-State Arbitration (OUP 2013) 30–5, citing Petrobart Limited v Kyrgyz Republic, SCC Case No 126/2003, Award (29 March 2005) 23; RosInvest Co v Russian Federation, Supreme Court of Sweden Case No Ö 2301–09, Decision (12 November 2010) para 3; Svenska Petroleum Exploration AB v Government of the Republic of Lithuania and AB Geonafta [2006] EWCA Civ 1529, para 93 (Court of Appeals of England and Wales); Jan Oostergetel and Theodora Laurentius v Slovak Republic, UNCITRAL, Final Award (23 April 2012) para 142; Chevon Corporation and Texaco Petroleum Company v Republic of Ecuador, UNCITRAL, PCA Case No 34877, Partial Award on the Merits (30 March 2010); ADF Group (n 68) para 31; Iurii Bogdanov, Agurdino-Invest Ltd, Agurdino-Chimia JSC v Government of the Republic of Moldova, SCC Case No 93/2004, Award (22 September 2005) s 2.2.1; Austrian Airlines v Slovak Republic, UNCITRAL, Final Award and Dissenting Opinion (redacted version) (20 October 2009) para 81. See also Russian Federation v Sedelmayer, Stockholm District Court Case No T6-583-98 (12 December 2002). 105 CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305, para 26. See also Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Limited and Others [2017] SGHC 195, para 84. 106 See eg Meixian Lee, ‘Strong Take-Up Drives Expansion at Maxwell Chambers’ Business Times (23 June 2017); N Vivekananda and John Menezes Jagdish, ‘Singapore as a Seat for Investor-State Disputes’ Singapore International Arbitration Centre <http://www.siac.org.sg/newsite/index.php/70-articles/169-singapore-as-a-seat-for-investor-state-disputes> accessed 17 January 2018. See also the recent SIAC Investment Arbitration Rules (1 January 2017) <http://www.siac.org.sg/our-rules/rules/siac-ia-rules-2017> accessed 17 January 2018. 107 Sanum (n 1) para 44. See also Kingdom of Lesotho (n 105) para 87. 108 Hwang and Chang (n 5) 515. 109 ibid 515–16. 110 Gary Born, Jonathan W Lim and Darshini Prasad, ‘Sanum v. Laos (Part II): The Singapore Court of Appeal Affirms Tribunal’s Jurisdiction under the PRC-Laos BIT’ Kluwer Arbitration Blog (11 November 2016), citing BG Group PLC v Republic of Argentina 134 SCt 1198 (2014) (Supreme Court of the United States); Gary Born, International Commercial Arbitration (Kluwer 2014) 936–8. 111 Gary Born and Marija Šćekić, ‘Pre-Arbitration Procedural Requirements: “A Dismal Swap”’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 243. See also Laurent Gouiffès and Melissa Ordonez, ‘Jurisdiction and Admissibility: Are We Any Closer to a Line in the Sand?’ (2015) 31(1) Arb Intl 107; Jan Paulsson, ‘Jurisdiction and Admissibility’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC Publishing 2005) 601. 112 See Hwang and Chang (n 5) 516. 113 Sanum (n 1) para 34, citing AQZ (n 20) para 57. 114 Cap 322, R5, 2014 Rev Ed Sing. 115 AQZ (n 20) paras 49–59. 116 Sanum (n 1) paras 102–3. 117 AQZ (n 20) para 59, citing Electrosteel Castings Ltd v Scan-Trans Shipping & Chartering Sdn Bhd [2003] 1 Lloyd’s Rep 190, para 22. 118 Jiangsu Overseas Group Co Ltd v Concord Energy Pte Ltd and Another Matter [2016] 4 SLR 1336 paras 50-3. 119 The Registrar of the Supreme Court of Singapore is a judicial offer that heads the Supreme Court Registry and is equivalent to a master in the courts of England and Wales and other common law jurisdictions. 120 Hwang and Chang (n 5) 516–17. 121 Central Trading & Exports Ltd v Fioralba Shipping Co [2014] EWHC 2397 (Comm). 122 Hwang and Chang (n 5) 517. 123 Darius Chan, ‘The Scope of ‘De Novo’ Review of an Arbitral Tribunal’s Jurisdiction’ Singapore Law Blog (8 October 2014) <http://www.singaporelawblog.sg/blog/article/140> accessed 17 January 2018. 124 Sanum (n 1) paras 61–2. 125 ibid para 103. 126 While Sanum is the first case of an investment treaty Award being reviewed by the Singapore courts, it was swiftly followed by another one; a partial final Award issued against the Kingdom of Lesotho was set aside by the High Court of Singapore on the grounds of a lack of jurisdiction. See Kingdom of Lesotho (n 105). 127 ibid 518–19. 128 James D Fry and Odysseas G Repousis, ‘Intertemporality and International Investment Arbitration: Protecting the Jurisdiction of Established Tribunals’ (2015) 31(2) Arb Intl 213, 247. 129 Christoph Schreuer, ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 270. 130 See Sanum (HC) (n 4) paras 68–9. 131 Sanum (n 1) para 116. 132 See Boo and Rivera-Dolera (n 102) n 11. 133 See Anthea Roberts, ‘Subsequent Agreements and Practice: The Battle over Interpretive Power’ in Georg Notle (ed), Treaties and Subsequent Practice (OUP 2013) 97. 134 Kendra Magraw, ‘Investor-State Disputes and the Rise of Recourse to State Party Pleadings As Subsequent Agreements or Subsequent Practice under the Vienna Convention on the Law of Treaties’ (2015) 30(1) ICSID Rev—FILJ 142, 144–5. 135 Georg Nolte, ‘Second Report on Subsequent Agreements and Subsequent Practice in Relation to the Interpretation of Treaties’, Doc A/CN.4/671 (26 March 2014) 50–1. 136 Roberts (n 133) 99. 137 Karen J Alter, ‘Agents or Trustees? International Courts in their Political Context’ (2008) 14 EJIL 33, 38; Karen J Alter, ‘Delegation to International Courts and the Limits of Re-contracting Political Power’ in Darren Hawkins and others (eds), Delegation and Agency in International Organizations (CUP 2006) 326. 138 Sanum (n 1) para 116(e). 139 Rahim Moloo, ‘When Actions Speak Louder Than Words: The Relevance of Subsequent Party Conduct to Treaty Interpretation’ (2013) 31(1) Berkley J Intl L 39, 74. 140 See eg Sempra Energy International v Argentine Republic, ICSID Case No ARB/02/16, Award (28 September 2007) para 386: ‘Moreover, even if this interpretation were shared today by both parties to the Treaty, it still would not result in a change of its terms. States are of course free to amend the Treaty by consenting to another text, but this would not affect rights acquired under the Treaty by investors or other beneficiaries’; Plama Consortium (n 80) para 162: In the Tribunal’s view, therefore, the object and purpose of the ECT suggest that the right’s exercise should not have retrospective effect. A putative investor, properly informed and advised of the potential effect of Article 17(1), could adjust its plans accordingly prior to making its investment. If, however, the right’s exercise had retrospective effect, the consequences for the investor would be serious. The investor could not plan in the ‘long term’ for such an effect (if at all); and indeed such an unexercised right could lure putative investors with legitimate expectations only to have those expectations made retrospectively false at a much later date. 141 See eg Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on Jurisdiction (14 November 2005) para 60; Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan, ICSID Case No ARB/03/29, Decision on Jurisdiction (14 November 2005) para 178; Antoine Goetz and Others v Republic of Burundi, ICSID Case No ARB/95/3, Award (10 February 1999), reprinted in (2000) 15 ICSID Rev—FILJ 457, para 72; Amco Asia Corporation and Others v Indonesia, ICSID Case No ARB/81/1, Decision on Jurisdiction (10 May 1988) (resubmitted case), reprinted in (1988) 3 ICSID Rev—FILJ 166, 184–5. See also Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (OUP 2008) 41. 142 ADF Group (n 68). 143 Sanum (n 1) paras 117–18. North American Free Trade Agreement (signed 17 December 1992, entered into force 1 January 1994) (NAFTA). 144 NAFTA Free Trade Commission Clarifications Related to NAFTA Chapter 11 (31 July 2001). 145 NAFTA (n 143) art 2001(2). 146 ibid art 1131(2). 147 United States–Singapore Free Trade Agreement (signed 6 May 2003, entered into force on 1 January 2004) art 20.1. 148 See Gabrielle Kaufmann-Kohler, ‘Interpretive Powers of the Free Trade Commission and the Rule of Law’ in Emmanuel Gaillard and Frédéric Bachand (eds), Fifteen Years of NAFTA Chapter 11 Arbitration (JurisNet LLC 2011) 177. 149 Ian Laird, ‘Betrayal, Shock and Outrage: Recent Developments in NAFTA Article 1105’ in Todd Weiler (ed), NAFTA Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects (Transnational Publishers 2004) 49. 150 Charles H Brower, II, ‘Structure, Legitimacy and NAFTA’s Investment Chapter (20003) 36 Vand J Transnatl L 37. See also Methanex Corporation v United States of America, UNCITRAL, Second Opinion of Professor Sir Robert Jennings QC (6 September 2001) 4–6. 151 Dolzer and Schreuer (n 141) 35. 152 VCLT (n 34) art 28 states: ‘Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.’ 153 Todd Weiler, ‘NAFTA Investment Arbitration and the Growth of International Economic Law’ (2002) Bus L Intl 158, 183–4; Charles H Brower, II, ‘Fair and Equitable Treatment under NAFTA’s Investment Chapter’ (2002) 96 Am Socy Intl L Proc 9. 154 Kaufmann-Kohler (n 148) 190–2. 155 Bilateral investment treaties (BITs) do not normally have non-judicial interpretive mechanisms, but this might not be the case for newer BITs based off the US Model BIT (2012), as art 30(3) of the US Model BIT provides for binding interpretive statements issued jointly by the treaty parties. 156 Ministry of Foreign Affairs, People’s Republic of China, ‘Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on October 21, 2016’ <http://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1407743.shtml> accessed 17 January 2018. See also Caroline Simson, ‘China Says Singapore Court Got It Wrong in Laos Treaty Case’ Law360 (21 October 2016) <https://www.law360.com/articles/854332/china-says-singapore-court-got-it-wrong-in-laos-treaty-case> accessed 17 January 2018. 157 See generally Magraw (n 134). 158 See Hwang and Chang (n 5) 519–21. 159 See eg August Reinisch, ‘Expropriation’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 408. 160 See eg the Libyan oil-concession arbitrations: Libyan American Oil Company (Liamco) v Libya, 62 ILR 140 (1981); Texaco Overseas Petroleum Company (Topco)/California Asiatic (Calasiatic) Oil Company v Libya, 17 ILM 1 (1978); British Petroleum v Libya, 53 ILR 297 (10 October 1973 and 1 August 1974). 161 August Reinisch, ‘How Narrow Are Narrow Dispute Settlement Clauses in Investment Treaties?’ (2011) 2(1) J Intl Disp Settlement 115, 117, 173. 162 Sanum (n 1) para 133. 163 Where outright nationalization has occurred, the question of the existence of an expropriation is generally not in dispute. See eg Guaracachi America, Inc and Rurelec PLC v Plurinational State of Bolivia, UNCITRAL, PCA Case No 2011-17, Award (31 January 2014) (claimant’s allegation that Bolivia’s nationalization of a power company was an act of expropriation went uncontested). 164 See eg Franz Sedelmayer v Russian Federation, SCC Case Award (7 July 1998); Telenor Mobile Communications AS v Hungary, ICSID Case No ARB/04/15, Award (13 September 2006); Saipem SpA v Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures (21 March 2007); Czech Republic v European Media Ventures SA [2007] EWHC 2851 (Comm); Renta 4 SVSA and Others v Russian Federation, SCC Case No V 024/2007, Award on Preliminary Objections (20 March 2009). 165 See eg Plama Consortium (n 80); Vladimir Berschader (n 80); RosInvest (n 80); Austrian Airlines (n 80); ST-AD GmbH (n 80). 166 Reinisch (n 152) 174. 167 Sanum (n 1) paras 130–3. 168 ibid para 133. 169 ibid para 146. cf Renta 4 SVSA (n 164) (the Tribunal adopted broad interpretation of the ‘amount of compensation’ clause despite there being no fork-in-the-road provision precluding arbitration upon submission of the dispute to the municipal courts). 170 Sanum (n 1) para 146. 171 VCLT (n 34) art 32, titled ‘Supplementary means of interpretation’, provides: ‘Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.’ 172 Juan Ignacio Luca de Tena 11 and others v Russian Federation, Case No T 9128-14 (18 January 2016) (unofficial English translation available at <https://www.italaw.com/sites/default/files/case-documents/italaw7714_8.pdf> accessed 17 January 2018). 173 Agreement for Reciprocal Promotion and Protection of Investments between Spain and the Union of Soviet Socialist Republics (signed 26 October 1990, entered into force 28 November 1991). 174 Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (2010). 175 Due to the wording of art 10 and a concession by the Claimant, the Tribunal considered that its subject matter jurisdiction did not extend to all aspects of expropriation but, rather, was restricted to whether there had been compensable expropriation. See Renta 4 SVSA (n 164) paras 41–2, 63. 176 ibid para 56. 177 Beijing Urban Construction Group Co Ltd v Republic of Yemen, ICSID Case No ARB/14/30, Decision on Jurisdiction (31 May 2017). 178 Juan Ignacio (n 172). 179 ibid. 180 Tza Yap Shum, Decision on Jurisdiction and Competence (n 88) para 188. 181 Beijing Urban (n 177). 182 Agreement on the Encouragement and Reciprocal Protection of Investments between the Government of the People’s Republic of China and the Government of the Republic of Yemen (signed 16 February 1998, entered into force on 10 April 2002). 183 ibid arts 10.1–10.2. 184 Beijing Urban (n 177) paras 69–87 (citing in support Tza Yap Shum, Decision on Jurisdiction and Competence (n 88); Renta 4 SVSA (n 164); Sanum (n 1). 185 Beijing Urban (n 177) paras 93–7. 186 China Heilongjiang International Economic & Technical Cooperative Corporation and Others v Republic of Mongolia, UNCITRAL, PCA Case No 2010-20, Award (30 June 2017). 187 Agreement between the Government of the People’s Republic of China and the Government of the Mongolian People’s Republic Concerning the Encouragement and Reciprocal Protection of Investments (signed 25 August 1991, entered into force 1 November 1993) (China-Mongolia BIT). 188 ibid art 8(3) states: ‘If a dispute involving the amount of compensation for expropriation cannot be settled within six months after resort to negotiations as specified in paragraph 1 of this Article, it may be submitted at the request of either party to an ad hoc arbitral tribunal. The provisions of this paragraph shall not apply if the investment concerned has resorted to the procedure specified in the paragraph 2 of this Article’ (emphasis added). 189 China Heilongjiang (n 186) para 448. 190 ibid. 191 ibid. 192 ibid para 449. 193 See Lacey Yong, ‘Mongolia Treaty Award Challenged in New York’ Global Arbitration Review (2 October 2017) <http://globalarbitrationreview.com/article/1147895/mongolia-treaty-award-challenged-in-new-york> accessed 17 January 2018; Damien Charlotin, ‘In-Depth: A First Look inside the Now-Surfaced Award in the Case of China Heilongjiang v. Mongolia Award; Claimants Now Pursuing Set Aside’ Investment Arbitration Reporter (1 October 2017). 194 Ministry of Foreign Affairs (n 156). See also Simson (n 156). 195 Norah Gallagher, ‘China’s BIT’s and Arbitration Practice: Progress and Problems’ in Wenhua Shan and Jinyuan Su (eds), China and International Investment Law: Twenty Years of ICSID Membership (Brill Nijhoff 2015) 210. 196 Sanum (n 1) para 146. 197 See eg Vladimir Berschader and Moïse Berschader v Russian Federation, SCC Case No V(080/2004), Separate Opinion of Professor Todd Weiler (7 April 2006) para 20; RosInvest (n 80). 198 Renta 4 SVSA (n 164) para 56. 199 Hwang and Chang (n 5) para 521. © The Author(s) 2018. Published by Oxford University Press on behalf of ICSID. All rights reserved. For Permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png ICSID Review: Foreign Investment Law Journal Oxford University Press

Of Forks and Dead Ends: Sanum Investments Ltd v Government of the Lao People's Democratic Republic

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Abstract

I. INTRODUCTION In an appeal brought before the Singapore Court of Appeal against the decision of the Singapore High Court to set aside an arbitral Award on jurisdiction under the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, the Court of Appeal reversed the lower court’s decision, holding that the bilateral investment treaty (BIT) in question did extend to the investor’s home State.4 The appeal represented a rare and important opportunity for Singapore’s apex court to rule definitively on several issues surrounding the municipal review of investment treaty arbitral awards and the interpretation of a BIT to which Singapore is not a party. The Court of Appeal was evidently sensitive to the importance of its decision, as shown by the constitution of a rare five-judge bench and the appointing of two international law experts (J Christopher Thomas, QC, and Locknie Hsu) as amici curiae. The appeal turned on the admission and consideration of two diplomatic letters as well as the scope of the treaty’s dispute resolution clause, which had thrown up several legal issues with far-reaching consequences that required clarification from the Court of Appeal. Those issues and the Court’s treatment of them form the subject of this case comment. This case comment will first provide a summary of the facts and findings of the Court of Appeal. It will then be followed by a discussion of the mechanics of municipal review of arbitral awards, as the judgment has given rise to issues concerning jurisdiction and justiciability, the standard of review and evidential matters. The case comment will then move on to discussing treaty interpretation issues in the context of investment treaty arbitration that were brought to the fore by the judgment, in particular: (i) the use of subsequent agreements in treaty interpretation under public international law, which has, in the context of investment treaty disputes, revealed an inherent tension between the interpretative authority of the treaty parties and of international courts and tribunals, and (ii) the interpretation of dispute resolution clauses on the ‘amount of compensation’ in investment treaties, on which the Court of Appeal favoured a broad approach, primarily due to a fork-in-the-road provision that, under a narrow approach, would have led an investor on the apparent path to arbitration towards a dead end. II. THE BACKGROUND FACTS The background facts to the dispute that was submitted for arbitration have been fully canvassed in our previous comment.5 In essence, Sanum Investments Limited (Sanum or the Defendant/Appellant), which was incorporated in the Macau Special Administrative Region of China (Macau), made certain investments in the gaming and hospitality industry in the Lao People’s Democratic Republic through a joint venture with a Laotian entity. Disputes subsequently arose between the government of the Lao People’s Democratic Republic (Laos or the Plaintiff/Respondent) and the Laotian entity, leading to Sanum Investments initiating arbitral proceedings against Laos by a Notice of Arbitration dated 14 August 2012, pursuant to the PRC–Laos BIT, alleging, inter alia, that Laos had expropriated the benefits from Sanum’s capital investment by imposing unfair and discriminatory taxes.6 A Singapore-seated Tribunal was thereafter constituted under the 2010 UNCITRAL Arbitration Rules.7 Laos subsequently disputed the jurisdiction of the Tribunal by arguing, inter alia, that the PRC–Laos BIT did not apply to Macau. On 13 December 2012, the Tribunal delivered its Award on Jurisdiction, holding that the PRC–Laos BIT applied to Macau and that it had the jurisdiction to arbitrate Sanum’s expropriation claims under Article 8(3) of the PRC–Laos BIT.8 The Singapore courts were thereafter involved as the court of curial review. On 10 January 2014, Laos filed an application to refer the issue of jurisdiction to the Singapore High Court under section 10 of the International Arbitration Act (IAA).9 On 19 January 2014, Laos filed another application requesting the admission of two diplomatic letters (Notes Verbales) sent in January 2014 (2014 Letters), one sent from the Laotian Ministry of Foreign Affairs to the PRC Embassy in Vientiane, Laos (2014 Laos Letter) and the other sent in reply to the Laos Letter by the PRC Embassy (2014 PRC Letter), both of which set out the view that the PRC–Laos BIT did not apply to Macau.10 The 2014 Letters were only obtained after the Tribunal had handed down the Award and were therefore not available for the Tribunal’s consideration. The Singapore High Court judge, Judicial Commissioner Edmund Leow, set aside the Award on the basis that the PRC–Laos BIT did not extend to Macau, thereby rendering the Tribunal without jurisdiction over the dispute.11 The application involved five issues – three preliminary and two substantive. The preliminary issues were: (i) whether the present application raised only issues of international law that were non-justiciable (the justiciability issue); (ii) whether the standard of review of the Award under section 10 of the IAA should be de novo (the standard of review issue) and (iii) whether the 2014 Letters should be admitted as fresh evidence in the application (2014 Letters issue). The substantive issues were: (iv) whether the PRC–Laos BIT applied to Macau (Macau issue) and (v) whether Sanum ’s expropriation claims fell within the scope of Article 8(3) of the PRC–Laos BIT (arbitration clause issue). In his judgment, the judge ruled affirmatively on all three preliminary issues but held in the negative on both substantive issues. On 20 July 2015, Sanum appealed against the judge’s decision to the Court of Appeal. Prior to the hearing of the appeal, Laos sought to admit into evidence two further diplomatic letters obtained in 2015 (2015 Letters), one sent from the Laotian Ministry of Foreign Affairs to the PRC Embassy in Vientiane (2015 Laos Letter) and the other sent from the PRC Ministry of Foreign Affairs (2015 PRC Letter), which had the effect of confirming the authenticity of the 2014 PRC Letter. The question of whether the 2015 Letters ought to be admitted therefore formed a separate issue (2015 Letters issue) to be decided by the Court. III. THE DECISION OF THE COURT The Court of Appeal reversed the judge’s decision and held that the Tribunal did have jurisdiction to hear Sanum’s expropriation claims. In summary, the Court held that: (i) the application to review the arbitral Award involved justiciable questions of law; (ii) the standard of review under section 10 of the IAA was de novo; (iii) the 2014 Letters were not admissible; (iv) the 2015 Letters were admissible; (v) the PRC–Laos BIT applied to Macau and (vi) Sanum’s expropriation claims fell within the scope of Article 8(3) of the PRC–Laos BIT. A. The Justiciability Issue On the justiciability issue, the judge had held that the application was justiciable before the Singapore courts on the basis that the application under section 10(3)(a) of the IAA did not involve non-justiciable questions of pure international law, with treaty interpretation being a realm that was justiciable by a Singapore court insofar as the court was asked to interpret the nature and scope of the treaty in order to give effect to the parties’ rights and duties under a domestic statute. While the judge’s finding on the justiciability issue went uncontested in the appeal, the Court of Appeal nonetheless set out its views on the issue on an obiter basis. The Court essentially agreed with the judge, opining that the High Court was not only competent to consider these issues but was, in the circumstances, obliged to do so.12 In the Court’s view, since the parties had designated Singapore as the seat of the arbitration, the necessary consequence was that the IAA applied to govern the arbitration, which in turn required the High Court to consider issues such as the Tribunal’s jurisdiction.13 The fact that the jurisdiction issue required the High Court to interpret a BIT to which Singapore was not a party could not, in the Court’s view, displace the Court’s obligation to provide an answer.14 B. The Standard of Review Issue On the standard of review issue, the judge held that the standard of review under section 10 of the IAA [and Article 16(3) of the UNCITRAL Model Law on International Commercial Arbitration (Model Law)]15 was de novo. On appeal, Sanum accepted the de novo standard but, nonetheless, maintained that the judge should have adopted a restrained approach by according deference and regard to the Tribunal’s findings, especially when those findings ‘arose in an investor–State arbitration concerning the application of principles of public international law’.16 The Court held that the standard of review under section 10 of the IAA was de novo, stating that there was no basis for deference to be accorded to the Tribunal’s findings once it is accepted that the standard of review was de novo.17 Further, the Court held that the standard should be de novo; while the Court stated that it would consider what the Tribunal has said on account of its persuasive value, it held that it was not bound to accept or take into account the Tribunal’s findings on the matter. The Court observed that this was consistent with PT First Media TBK v Astro Nusantara International BV,18 in which the Court endorsed the view that the Tribunal’s own view of its jurisdiction ‘has no legal or evidential value before a court that has to determine that question’.19 The Court, however, added that this did not meant that the Tribunal’s findings ought to be disregarded or that a full rehearing of all the evidence was required; rather, it simply meant that the court was at liberty to consider the material before it, ‘unfettered by any principle limiting its fact-finding abilities’,20 with the cogency and quality of the Tribunal’s reasoning, rather than their standing or eminence, that would factor in the evaluation of the matter.21 C. The 2014 Letters Issue On the 2014 Letters issue, the judge had held that the admission of fresh evidence in a section 10 IAA application was governed by the Ladd v Marshall principles (Ladd test),22 as modified in Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) (Lassiter test).23 Under the Ladd test, fresh evidence may be admitted in appellate cases only if: (i) the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) the evidence must be such that, if given, it would probably have an important influence on the result of the case (though it need not be decisive) and (iii) the evidence must be such as is presumably to be believed or, in other words, must be apparently credible (though it need not be incontrovertible).24 The Lassiter test relaxes the first condition of the Ladd test so that the party seeking to admit the evidence need only demonstrate ‘sufficiently strong reasons’ why the evidence was not adduced at the lower court’s hearing.25 The judge held that Laos had satisfied the Lassiter test requirements and, therefore, admitted them into evidence. On appeal, the issue appeared initially to concern whether the relevant test had been correctly applied,26 but it subsequently shifted towards the question of whether the 2014 Letters should have been admitted into evidence on account of the critical date doctrine under public international law,27 which renders evidence that came into being only after the dispute had arisen and is self-serving and intended by the party putting it forward to improve its position in the arbitration as being of little (if any) weight.28 The critical date had been determined by the Court to be the date on which the dispute had crystallized, which was 14 August 2012, when the arbitration proceedings were initiated,29 while the pre-existing legal position was held to be that the PRC–Laos BIT did, under State succession rules under public international law, apply to Macau (discussed further below).30 Sanum argued that the 2014 Letters should be excluded altogether on the basis that, pursuant to the critical date doctrine, their post-hoc character had rendered them irrelevant,31 citing, inter alia, Louis Goldie’s observations that the critical date is ‘exclusionary’ and ‘terminal’.32 Laos counter-argued that: (i) the critical date doctrine had no application in the present case;33 (ii) the 2014 Letters should not be excluded as that would be inconsistent with Articles 31(3)(a) and 31(3)(b) of the Vienna Convention of the Law of Treaties (VCLT),34 which envisaged that there could be a ‘subsequent agreement’ or ‘subsequent practice’ that influences the interpretation of a treaty,35 and (iii) post-critical date evidence was, in any event, according to Goldie36 and Robert Pietrowski,37 admissible to the extent that it was corroborative in nature (that is, evidence that is consistent with, and a continuation of, the pre-critical date legal position), with the 2014 Letters being merely confirmatory of the pre-existing legal position that the PRC–Laos BIT did not apply to Macau.38 With regard to the critical date doctrine, the Court held that: (i) where the substantive dispute engages questions of public international law (as was the case in the appeal), the court must consider the question of admissibility and weight within the framework of any other applicable principles of international law, including the critical date doctrine39 and (ii) the critical date doctrine allows the admission of post-critical date evidence only to the extent that it merely confirms the legal position that had been established by the pre-critical date evidence, even in a situation where the pre-critical date evidence is inconclusive, but special attention must be given to the weight that should be attached to such evidence.40 The Court also determined that the pre-existing legal position was that the PRC–Laos BIT would, by operation of the rules of State succession under public international law, apply to Macau (discussed further below).41 With regard to the 2014 Letters, the Court held that they should be excluded from the evidence on the basis that the 2014 Letters did not confirm the pre-existing legal position but, rather, that they sought to advance a contradictory position (based on PRC domestic law) that the PRC–Laos BIT did not extend to Macau.42 The Court also noted that there was no inconsistency between excluding the 2014 Letters and Articles 31(3)(a) and 31(3)(b) of the VCLT since, even if the critical date doctrine applied to exclude the 2014 Letters, this did not prevent Laos from relying on other evidence to show that there was a ‘subsequent agreement’ between the parties, so long as it came into being before the critical date.43 The Court went on to opine that, even if the 2014 Letters were admissible on account of the pre-critical date evidence being inconclusive on the question of the inapplicability of the PRC–Laos BIT to Macau, no material weight could be placed on the 2014 Letters (discussed further below).44 D. The 2015 Letters Issue With respect to the 2015 Letters issue, the parties had accepted that a party that sought to admit further evidence before the Court when it considers the substantive appeal must satisfy the Ladd test. The Court held that the 2015 Letters should be admitted because all Ladd test conditions had been fulfilled,45 particularly that, since the 2015 Letters served the purpose of confirming the authenticity of the 2014 Letters, they were by nature evidence that could not have been obtained prior to the High Court hearing. However, the Court ultimately came to the conclusion that the 2015 Letters had no bearing on the dispute, owing to the Court’s decision that the 2014 Letters were to be given no evidentiary weight.46 E. The Macau Issue On the Macau issue, the issue arose because of the return of Macau from Portuguese administration back to the PRC on 20 December 1999, which was after the date on which the PRC–Laos BIT entered into force (31 January 1993). Since the PRC–Laos BIT was silent on its application to Macau, and the Basic Law of Macau enabled Macau to conclude and implement investment agreements with foreign States and regions on its own, there was uncertainty over whether the PRC–Laos BIT extended to Macau after the handover.47 The 2014 and 2015 Letters also complicated matters, as it appeared that both Laos and the PRC were of the ex post facto opinion that their treaty did not apply to Macau. The relevant rule of public international law governing this issue was the ‘moving treaty frontiers’ rule (MTF Rule), which is encapsulated in Article 29 of the VCLT48 and Article 15(b) of the Vienna Convention on the Succession of States in Respect of Treaties (VCST).49 It was accepted by the parties that the two provisions reflected customary international law,50 with the MTF Rule thereby being taken by the Court as binding on all States, including the PRC.51 The MTF Rule essentially provides that a treaty is binding on the entire territory of each contracting State (including any new territories), unless it appeared from the treaty or is ‘otherwise established’ that: (i) the treaty did not apply in respect of the entire territory of the contracting State or (ii) the application of the treaty to the territory in question would: (a) be incompatible with the object and purpose of the treaty or (b) radically change the conditions for its operation. The Court therefore proceeded on the footing that the PRC–Laos BIT was to be presumed to automatically apply to the territory of Macau following the handover, with the relevant issue being whether any of the exceptions to the MTF Rule applied.52 The relevant exception here was whether it was ‘otherwise established’ that the PRC–Laos BIT did not apply in respect of Macau.53 As preliminary points, the Court determined that: (i) the standard of proof under public international law was the standard of satisfaction on a balance of probabilities54 and (ii) the critical date doctrine applied, so that post-critical date evidence would, insofar as they seek to contradict the pre-critical date legal position, be given little, if any, evidentiary weight.55 Laos maintained its argument made in the High Court proceedings that several pre- and post-critical date instruments and documents had ‘otherwise established’ that the PRC–Laos BIT did not apply to Macau—in particular, relying on the 2014 Letters as constituting a ‘subsequent agreement’ within the meaning of Article 31(3)(a) of the VCLT between Laos and the PRC to exclude Macau.56 Sanum, on the other hand, argued that the judge had erred in doing so.57 The judge had accepted Laos’ 2014 Letters argument by analogizing the factual matrix of the case to that which was given in Lee Hsien Loong v Review Publishing,58 in which Judicial Commissioner Sundaresh Menon (as he then was) held that the Singapore–PRC Treaty on Judicial Assistance in Civil and Commercial Matters did not apply to Hong Kong by relying on a letter from the Singapore Ministry of Foreign Affairs (which stated that the Hong Kong Department of Justice had confirmed that the Treaty was not applicable to Hong Kong).59 The judge had also added his view that the two letters did not amount to a retroactive agreement that altered the positions and expectations of third parties but, rather, were ‘an affirmation of the common understanding between the states that the treaty from its inception did not apply to Macau’, on the basis that the PRC letter was ‘worded in general terms’ and espoused a ‘categorical approach’.60 The Court ultimately held that none of the evidence produced had displaced the presumption under the MTF Rule that the PRC–Laos BIT was to apply to Macau following the handover.61 With regard to the 2014 Letters, in particular, the Court held that they were inadmissible since they were post-critical date evidence (discussed above),62 but it went on to opine that, even if the 2014 Letters were admissible, no material weight could be placed on them for three reasons.63 First, the Court noted that, under Article 27 of the VCLT, the internal laws of a State cannot be invoked to justify the non-performance of a treaty, and since the only stated justification in the 2014 Letters was based on the PRC’s internal legislation in relation to Macau (that is, the Basic Law of Macau), the 2014 Letters were held to be irrelevant and inadmissible as a consideration in international law.64 Second, the Court considered that Laos was in an even poorer position in attempting to invoke the operation of the internal laws of another State (the PRC) in order to justify Laos’ own position that it was not bound to arbitrate the claim brought by Sanum.65 Lastly, the Court was of the view that the 2014 Letters did not amount to a ‘subsequent agreement’ or ‘subsequent practice’ under Articles 31(3)(a)–(b) of the VCLT and that giving effect to the 2014 Letters would amount to an impermissible retroactive amendment of the PRC–Laos BIT, as there was no evidence of any such agreement prior to the 2014 Letters.66 The Court also noted that, while it might be open to the PRC and Laos to now enter into an express agreement to modify the PRC–Laos BIT to accord with their intentions as stated in the 2014 Letters, no such agreement could take retroactive effect and adversely affect a third party that had already commenced proceedings.67 The Court distinguished: (i) ADF Group Inc v USA,68 in which the Tribunal took into consideration a post-critical date note of interpretation on the basis that the note had been rendered binding pursuant to an express provision in the investment treaty69 and (ii) Lee Hsien Loong v Review Publishing,70 on the basis that the central issue in this case was ultimately one of service of process under Singapore domestic rules and that the issues of the retroactive amendment of treaties and the applicability of the critical date doctrine had not arisen then due to those points not having been raised or argued.71 F. The Arbitration Clause Issue With respect to the arbitration clause issue, the question was whether the Tribunal possessed subject-matter jurisdiction over Sanum’s expropriation claims. The question centred on the proper interpretation of Article 8(3) of the PRC–Laos BIT, which provided that a dispute ‘involving the amount of compensation’ may be submitted to arbitration, provided that the investor concerned has not resorted to the Article 8(2) procedure of submitting the dispute to courts of the Host State.72 The parties disagreed over whether Article 8(3) of the PRC–Laos BIT meant that any claim that included a dispute over the amount of compensation for expropriation could be submitted to arbitration (Broad Interpretation) or whether recourse to arbitration was limited to circumstances where the only issue in dispute was the amount of compensation for expropriation (Narrow Interpretation).73 The judge had opined obiter that the Narrow Interpretation should apply.74 As a preliminary point in ascertaining the interpretation to be preferred, the Court noted that, pursuant to Article 31 of the VCLT,75 the Court was to consider: (i) the ordinary meaning to be accorded to the words used in Article 8(3) of the PRC–Laos BIT; (ii) the context of the PRC–Laos BIT and (iii) the object and purpose of the PRC–Laos BIT.76 The Court ultimately held that the Tribunal did possess subject-matter jurisdiction with regard to Sanum’s expropriation claims. With regard to the ordinary meaning of Article 8(3) of the PRC–Laos BIT, the Court held that the word ‘involve’ was, by its ordinary meaning, capable of supporting both positions and, therefore, moved on to consider its context.77 With regard to the context of Article 8(3) of the PRC–Laos BIT, Laos had put forward the position that the effect of Article 8(3) (under the Narrow Interpretation) was that an investor must first go to a competent national court to determine whether an impermissible expropriation had occurred before submitting any dispute on the amount of compensation to a tribuna, and that there was nothing to prevent an investor from submitting disputes other than the amount of compensation to the municipal courts.78 Laos also cited in support a generational shift in the PRC BITs, where pre-1998 ‘first-generation’ PRC BITs (which included the PRC–Laos BIT) contained narrowly defined dispute resolution clauses that appeared to provide arbitral jurisdiction over disputes on the quantum of compensation only, whereas the ‘second-generation’ PRC BITs concluded from 1998 onwards contained much broader arbitration clauses.79 Laos also relied upon five cases80 that appeared to support the Narrow Interpretation,81 two of which involved BITs concluded by the Russian Federation (Russia) and had the tribunals accepting that Russia had specifically intended its ‘first-generation’ BITs to have a limited right to arbitration.82 In the High Court, the judge had relied on this generational shift in PRC BITs in coming to his view that the Narrow Interpretation was to be preferred.83 Sanum contended that such an interpretation would render Article 8(3) wholly ineffective on the basis that the issues of expropriation and quantum were inextricably intertwined. One of the four criteria for determining whether an impermissible expropriation has occurred under Article 4(1) of the PRC–Laos BIT is whether ‘effective and appropriate compensation’ had been accorded by the Host State,84 which meant that any municipal court that is faced with the issue of whether there had been an impermissible expropriation must first determine whether effective and appropriate compensation had been paid, and once it has, the investor is barred under Article 8(3) from referring the dispute on whether there had been effective and appropriate compensation to a tribunal.85 In the High Court, the judge had taken into consideration Sanum’s concerns on the effectiveness of Article 8(3) but ultimately held that they were not insurmountable on the basis that the option to arbitrate under Article 8(3) remained available if: (i) the only issue in dispute was that of the amount of compensation and (ii) the investor did not first submit the dispute to the municipal courts—that is, it was the host State that had submitted the dispute on expropriation to the municipal courts (the judge’s Article 8(3) view).86 The Court held that the Narrow Interpretation was untenable, in the context of the PRC–Laos BIT, due to the impossibility of segregating the intertwined issues of liability and quantum for determination in two separate forums.87 The Court agreed with Sanum that, under the fork-in-the-road provision in Article 8(3), once an expropriation claim was referred to the municipal court, no aspect of that claim, including the amount of compensation for expropriation, could then be referred to arbitration, citing in support the decision in Tza Yap Shum v Republic of Peru,88 in which the tribunal adopted the Broad Interpretation to a materially similar dispute resolution clause in the PRC–Peru BIT in order to prevent its ‘evisceration’.89 With respect to the judge’s Article 8(3) view, the Court was of the opinion that it had ignored several difficulties. First, it was unclear what issue the host State would have referred to the municipal court if the only issue were one of quantum. If the host State had indeed referred the issue of quantum to the municipal court, it was also unclear how a subsequent reference to arbitration of the same issue would be resolved.90 Second, the Court agreed with the present authors’ view in our previous comment that, as a matter of practical reality, ‘cases of direct expropriation (with only quantum issues being in dispute) are becoming increasingly rare, and that it is entirely open to the Host State to avoid arbitration over the amount of compensation for indirect expropriation simply by not submitting the dispute on liability to its municipal courts’.91 The Court observed that this would lead to the untenable conclusion that, notwithstanding the presence of an arbitration clause, the investor would in practice have no access to arbitration.92 The Court also distinguished all of the five cases cited by Laos in support of its argument for the Narrow Interpretation, particularly on the ground that none of them involved a similar fork-in-the-road provision, which meant that a narrow interpretation to the dispute resolution clauses would not have resulted in an illusory right to arbitration.93 The Court also considered that the specific context relevant to the Russian BITs could not be transposed to PRC BITs.94 With regard to the generational shift in the PRC BITs, the Court was of the view that there had to be evidence of a ‘specific intention’ of the State parties to the BIT and not mere general observations made by commentators or the general policy stance of a State.95 With regard to the object and purpose of Article 8(3) of the PRC–Laos BIT, the Court held that the Broad Interpretation was consistent with the object and purpose of the PRC–Laos BIT, which had the express purpose (as stated in the preamble96) of promoting investment by investors and advancing the development of economic cooperation between both States.97 IV. THE MECHANICS OF THE MUNICIPAL REVIEW OF ARBITRAL AWARDS While the Court reversed the substantive decision made by the Court below, the Court agreed with the judge on all aspects of the mechanics of the review of arbitral awards—that is, the issues of justiciability, the standard of review and the admission of fresh evidence. However, there remain certain aspects of the Court’s decision on these issues that are worth revisiting. A. Jurisdiction and Justiciability The Court of Appeal was of the view that the Singapore courts possessed the jurisdiction to review investment treaty awards, stating that the High Court was not only competent to consider the interpretation and application of the PRC–Laos BIT but also was obliged to do so in the circumstances of this case under section 10 of the IAA, which applied to govern the arbitration by virtue of the parties having designated Singapore as the seat of the arbitration.98 Some commentators, however, have criticized the application of section 10 of the IAA to investment treaty arbitral awards on the basis that: (i) the IAA is a piece of legislation that is intended to give effect to the Model Law, which is concerned only with international commercial arbitration99 and (ii) an investor’s claims against the host State is based not on a commercial relationship between the parties but, rather, on treaty obligations in a BIT between the host State and the investor’s home State.100 On this basis, it was said that it was ‘doubtful’ that a Singapore court could be asked to invoke its jurisdiction under section 10 of the IAA to review the Tribunal’s jurisdiction101 and that the readiness of the Singapore courts to assert supervisory jurisdiction could potentially work against Singapore’s intention to poise itself as a place of choice for investor–State arbitration.102 In our view, this is a rather curious submission to make for three reasons. First, while it is true that the Model Law itself defines its scope of application to ‘international commercial arbitration’, it also states that the term ‘commercial’ should be given a ‘wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not’, including matters of ‘investment’.103 Such an interpretation would, on its face, be wide enough to encompass a relationship arising from investments made in a host State that are given certain protections by an investment treaty to which the host State is a party. Second, several courts and tribunals have accepted the applicability of the law of the tribunal’s juridical seat in investor–State arbitration (including annulment provisions),104 and it would be odd to view this as being any different merely because the law of the juridical seat is based on the Model Law. Furthermore, the Singapore Court of Appeal has stated that ‘no State will permit a binding arbitral award to be given or enforced within its territory without being able to review the award, or, at least, without allowing the parties an opportunity to address the court if there has been a violation of due process or other irregularities in the arbitral proceedings’,105 and it would be strange to see this general principle apply to commercial arbitration but not to investor–State arbitration. Lastly, if section 10 of the IAA were not to apply to investment treaty awards on the basis that the IAA and the Model Law are concerned only with international commercial arbitration, then it stands to reason that no other provisions of the IAA or the Model Law should apply either. This would lead to the untenable situation where the parties to investment treaty arbitrations seated in Singapore could obtain no form of curial assistance from the Singapore courts, thereby rendering the seat of the arbitration in Singapore effectively meaningless. In practical terms, it would also lead to Singapore becoming a rather unattractive location for investment treaty arbitration, which would run contrary to Singapore’s ambitions.106 B. Standard of Review for Investment Treaty Awards The Court of Appeal upheld the judge’s decision that the standard of review under section 10 of the IAA was de novo and that, while the Tribunal’s findings would be considered, it was the cogency and quality of the reasoning, and not the eminence or expertise of the Tribunal, that would serve as a factor in the evaluation of the matter.107 We had previously commented that this must be correct since, among other things, any standard of review other than de novo would result in the entire arbitral process pulling itself up by its own bootstraps, and the parties would be free, in any event, to engage public international law experts to aid the municipal judge in coming to his or her decision.108 However, there remain potential difficulties to be faced by municipal courts in reviewing investment treaty awards on jurisdiction. As we mentioned before, one such difficulty is where the tribunal’s ruling on jurisdiction is intertwined with the merits of the dispute (for example, whether the investor has made an ‘investment’).109 Another difficulty is where the issues that are considered by the tribunal pertain not to jurisdiction but, rather, to admissibility. A tribunal’s decisions on the latter are generally viewed as not being subject to the same standard of review as decisions on jurisdictional issues,110 but it may be difficult to draw the line between jurisdiction and admissibility, such as in the issue of pre-conditions to arbitration.111 While the issue of the standard of review of jurisdictional awards may be settled as a matter of Singapore law, the parameters of its application to a myriad of international arbitral awards remains to be seen. C. Evidential Issues in De Novo Review As mentioned in our earlier comment, the judge’s decision left open some questions as to the treatment of evidence in a section 10 IAA review, in particular: (i) whether the court would be required to conduct a complete retrial and/or rehearing on the question of whether the tribunal had jurisdiction in fact and (ii) whether the judge had been correct in applying the Lassiter test in the admission of fresh evidence in a de novo review of a tribunal’s ruling on jurisdiction.112 The Court of Appeal expressly addressed the first question by agreeing with the obiter remarks of Justice Judith Prakash (as she then was) in AQZ v ARA that de novo review simply means that the court is unfettered by any principle limiting its fact-finding abilities and that this does not entail a full rehearing of all of the evidence.113 In AQZ v ARA, it was further remarked that the Singapore courts retained the discretion under the Rules of Court to allow the admission of oral evidence and/or cross-examination for the purposes of securing the ‘just, expeditious and economical disposal of the matter’,114 which would only be exercised where special circumstances exist beyond the mere existence of factual disputes (for example, ‘awkward and recondite’ issues involving foreign law).115 While the Court of Appeal made no reference to this further remark, it is an eminently sensible one that ought to be followed in future cases. As for the second question, the Court of Appeal had no need to address it as there appeared to be no real dispute on the applicability of the Lassiter test, leading the Court to focus entirely on the more pertinent question of the critical date doctrine and its application to the 2014 Letters.116 In contrast to the High Court in Sanum, Justice Prakash held the opinion in AQZ v ARA that, in a de novo review, fresh evidence is admissible as of right, with the lateness of the introduction of the evidence going only to its evidential weight and issues of costs.117 As noted in a subsequent case, there therefore appears to be two entirely different approaches under Singapore law as to the admission of fresh evidence in a section 10 IAA review,118 with the correct approach being an issue that was left unresolved by the Court of Appeal in Sanum. We had previously written that the Lassiter test is ill-suited for application to the de novo review of a tribunal’s ruling on jurisdiction since: (i) it is based off the Ladd test, which was designed to prevent abuse of the appellate process and not a process of de novo review and (ii) the Lassiter test is essentially a relaxed version of the Ladd test that applies specifically to decisions of the Registrar,119 which does not involve the conducting of proceedings akin to a full trial.120 Therefore, we suggest that guidance should instead be taken from Central Trading & Exports Ltd v Fioralba Shipping,121 where the English High Court adopted an approach in which the parties had the right to adduce fresh evidence, but the Court retained the discretion to exclude any such evidence, with the overall objective of establishing fairness to the parties and preventing irremediable prejudice.122 We maintain that this approach would better enable the courts to strike a balance between the competing priorities of ascertaining arbitral consent and preventing abuses of the arbitral process. Another commentator had also come to the same conclusion, adding that the Fioralba approach ‘accords appropriate significance to the fact that a challenge on the tribunal’s jurisdiction does not operate by way of an appeal by holding that the starting point is that a party generally has the right to adduce fresh evidence’.123 Separately, it is also notable that the Court of Appeal had taken cognizance of the role of public international law in matters of evidence and proof in a section 10 IAA review of investment treaty awards—in particular, by holding that: (i) the standard of proof under public international law, at least with regard to the issue of whether an exception to the MTF Rule had been established, was that of satisfaction on a balance of probabilities,124 and (ii) where the substantive dispute engages questions of public international law, the court ‘must consider the question of admissibility and weight within the framework of any other applicable principles of international law, such as the critical date doctrine’.125 This will no doubt provide much clarification for future applications under section 10 of the IAA in the investment treaty context.126 V. THE USE OF SUBSEQUENT AGREEMENTS IN TREATY INTERPRETATION In our earlier comment, we stated that the judge, in holding that the 2014 Letters amounted to a ‘subsequent agreement’ within the meaning of Article 31(3)(a) of the VCLT, notwithstanding that they came into existence after the date of the institution of arbitral proceedings, had seemingly glossed over the temporal element of treaty interpretation, particularly, the critical date doctrine.127 The critical date doctrine follows naturally from the principle in investor–State arbitration that a tribunal’s jurisdiction is vested at the point that consent is perfected, even if the contracting States have amended or terminated the investment treaty retroactively.128 As a matter of policy, such a rule provides certainty and precludes any attempt by the respondent host State to defeat jurisdiction while proceedings are in progress, which may include acts such as the amending of legislation, denouncing a treaty or changing the nationality of a person.129 The Court’s careful examination of the critical date doctrine and its application of it to the 2014 Letters is therefore a welcome development. One point of interest in the Court of Appeal’s judgment is the revelation of the inherent tension between the interpretive authority of the treaty parties and of international courts and tribunals. In Sanum, this tension manifested itself in the conflict between the critical date doctrine and Article 31(3)(a) of the VCLT, in that, while the critical date doctrine all but precluded the use of evidence that came into existence after the submission of the dispute to arbitration, Article 31(3)(a) of the VCLT clearly allowed the use of subsequent agreements in interpreting a treaty. This was apparent to both the judge130 as well as the Court of Appeal, the latter having noted that its conclusion might appear ‘counter-intuitive’.131 PRC scholars have mostly found it difficult to accept that the critical date doctrine could operate to allow a municipal court to ignore the treaty parties’ common position on the scope of their own treaty.132 It is notable that, in international law disputes, this tension exists almost exclusively in the investor–State realm. In inter-State disputes, the issue of the use of subsequent agreements or practices between the treaty parties often does not arise simply because, if the treaty parties manage to agree on a particular interpretation of the treaty, there is unlikely to be a dispute about that treaty; it is more likely that inter-State parties would have a dispute over the existence of an alleged agreement or practice or the interpretation of a joint instrument.133 In investor–State disputes, however, the dispute is not between the treaty parties but, rather, between an investor as the claimant and one of the treaty parties as the respondent. In such a scenario, it is entirely possible for the respondent to refer to subsequent agreements or practices between it and the other treaty party or parties in order to adopt concordant stances and for the investor to contest the existence and use of such agreements or practices.134 An adjudicator in an investor–State dispute would be far more circumspect about the use of such agreements and practices; in inter-State disputes, the adjudicator would naturally be deferential to the views of the treaty parties as they are both the creators and beneficiaries of the treaty, so that the scope for ‘interpretation’ is not necessarily determined by a fixed ‘original intent’,135 but in investor–State disputes, the treaty’s creators and its beneficiaries are not one and the same since the treaty creates legal rights and obligations that are intended for the benefit of third parties.136 International courts and tribunals in investor–State disputes may therefore view themselves, at least partially, as trustees tasked with protecting the interests of the non–State beneficiaries of the treaty.137 The Court of Appeal in Sanum was evidently alive to the problems of the use of subsequent agreements in the context of investor–State disputes as well as of its role in protecting the interests of the holders of rights accrued under an investment treaty. The Court noted that, while it may be open to the PRC and Laos to enter into an express agreement to modify the PRC–Laos BIT to accord with their intentions as stated in the 2014 Letters, this could not ‘take retroactive effect and adversely affect a third party which has already brought proceedings’.138 This is analogous to general contract law principles where parties to a contract generally cannot act to adversely impact third party rights once the beneficiary has accepted them or reasonably acted in reliance on them,139 and it is consistent with an emerging view in investment treaty jurisprudence that the interpretation of investment treaties should be less susceptible to the post-hoc interpretive whims of the treaty parties.140 The Court’s adoption of the critical date doctrine, which is not uncommon in the investment treaty context,141 may therefore be seen as simply one way of protecting the interests of non-State beneficiaries. Such a view is legitimate as a matter of treaty interpretation, as Article 31(3) of the VCLT only requires the adjudicator to ‘take into account’ any subsequent agreement or practice between the treaty parties. International courts and tribunals are therefore free to give less, if any, weight to any such subsequent agreement or practice insofar as it is in reality an attempt to ride roughshod over rights and benefits that have been accrued to third parties. Another related point of interest is that the Court of Appeal appeared to accept (albeit obiter) that post-critical date evidence might operate to deprive a tribunal of its jurisdiction if it had amounted to a binding interpretive statement under the relevant investment treaty. In Sanum, the Court had distinguished ADF Group v United States142 on the basis that the post-critical date note was, pursuant to an express provision in the investment treaty (North American Free Trade Agreement [NAFTA]), binding on the Tribunal.143 The post-critical date note in AFD Group was an interpretation issued in July 2001 by the NAFTA Free Trade Commission (FTC),144 composed of ‘Cabinet-level representatives’ of the NAFTA parties or their designees, which has the power to supervise the implementation of the NAFTA, oversee its further elaboration and ‘resolve disputes that may arise regarding its interpretation or application’,145 with such interpretations being binding upon tribunals established under Chapter 11 of NAFTA.146 It should be noted that such non-judicial interpretative mechanisms are not unique to NAFTA; they are present in several international instruments (such as the United States–Singapore Free Trade Agreement147) as well as in certain international organizations where the charter or other constitutive documents vest power in a body of the organization to provide interpretations of the relevant treaty (for example, the World Trade Organization and the International Monetary Fund).148 However, the use of such interpretative statements is controversial, especially where the statement is issued in the middle of ongoing disputes. Commentators have argued against the use of such statements, particularly because: (i) such interpretative statements may be nothing more than masked amendments of the treaty in question;149 (ii) they incentivize parties to intentionally blur the line between treaty amendment (which has only prospective effect) and treaty interpretation (which has both retrospective and prospective effect) in an attempt to change the rules of the game in their favour150 and (iii) the application of such interpretative statements to pending disputes may violate various legal principles, such as those of due process,151 non-retroactivity152 and nemo judex in causa sua (no person may be a judge in his or her own cause),153 thereby undermining the rule of law.154 A future court faced with a similar non-judicial interpretive mechanism should therefore be aware that not even a ‘binding’ interpretive statement would provide an easy answer to the dispute.155 Separately, it remains unclear what effect Sanum has for future investment treaty disputes under PRC BITs that involve investors from the special administrative regions, considering especially that, in October 2016, the PRC’s Ministry of Foreign Affairs claimed that the Singapore Court of Appeal was wrong to hold that the PRC–Laos BIT applied to Macau on the basis of the PRC’s domestic laws and the 2014 and 2015 Letters.156 In such a future dispute, it is entirely possible that the respondent host State will seek to rely on the 2014 and 2015 Letters as well as Laos’ pleadings in Sanum and the PRC’s public statements, as constituting a subsequent agreement or practice to the effect that the BIT in question does not confer investment protection on Hong Kong and Macanese investors. This would be in line with a recent trend in investor–State arbitration in which host States have sought to rely on the pleadings of host States as a subsequent agreement and/or practice in putting forth their legal defence against the investor’s claims, which is in itself controversial.157 VI. THE INTERPRETATION OF ‘AMOUNT-OF-COMPENSATION’ DISPUTE RESOLUTION CLAUSES IN INVESTMENT TREATIES In Sanum, the issue of the scope of Article 8(3) of the PRC–Laos BIT before the Court of Appeal, unlike before the High Court, was a live one due to the Court’s decision that there was nothing to displace the operation of the MTF Rule to the PRC–Laos BIT. The Court of Appeal ultimately came to the opposite conclusion of the judge’s obiter view on the interpretation of Article 8(3) of the PRC–Laos BIT, holding that Article 8(3) provided arbitral jurisdiction over issues about not only the quantification of compensation for expropriation but also the investor’s entitlement to compensation for expropriation in the first place. The Court of Appeal had engaged in a very careful analysis of the workings of Article 8(3) as well as a meticulous examination of the available jurisprudence and commentary on similar treaty provisions, effectively remedying what we had described as a missed opportunity in the High Court. In our previous comment, we had discussed the history and context behind such ‘amount of compensation’ dispute resolution clauses found in ‘first generation’ investment treaties concluded by communist states as well as the problems they present.158 The main problem with such clauses is that their usefulness had become questionable due to the decreasing relevance of direct expropriation (with only the amount of compensation being in dispute) and the concomitant rise of indirect expropriation (with the issue of whether a governmental measure amounted to expropriation being in dispute) in modern investment disputes.159 While it may have made sense to have a limited scope of jurisdiction over the amount and method of compensation in the mid-twentieth century when investor–State disputes often revolved around the appropriate amount of compensation for direct expropriation,160 depriving modern investment tribunals of the power to determine whether an expropriation has occurred would effectively deprive investors of their right to have the amount of compensation for indirect expropriation determined by an international tribunal, as the host State could easily avoid such narrow jurisdiction simply by denying the existence of any regulatory expropriation.161 While the Court in Sanum noted that, even in cases of direct expropriation, host States could also deny investors of the right to arbitration simply by denying that it had engaged in expropriatory acts,162 it would be extremely difficult for a host State to plausibly deny an act of direct expropriation, which is usually in the realm of very public acts of nationalization.163 In modern investment disputes, the problematic nature of such restrictive arbitration clauses is reflected in the sharp divide in the case law jurisprudence on the proper interpretation to take. Some tribunals employ a broad interpretation so as to arbitrate disputes on both liability for expropriation and quantum of compensation,164 while other tribunals have adopted a narrow interpretation to restrict their jurisdiction to disputes on quantum of compensation only.165 The outcomes have differed despite the common use of Article 31 of the VCLT as an interpretative tool, depending on whether the tribunal chooses to place importance on the ordinary meaning of the treaty text or to instead give a dominant role to the object and purposes of the BIT.166 It was an emphasis on the context, object and purposes of the BIT, as well as the principle of effet utile, that led the Court of Appeal in Sanum to favour the Broad Interpretation of Article 8(3) of the PRC–Laos BIT. However, any potential impact the Court’s interpretation may have in future investment disputes on such ‘amount-of-compensation’ clauses may be quite narrow, as the chief consideration in the Court’s judgment was the fork-in-the-road provision in Article 8(3), which, under the Narrow Interpretation, made the purported path to arbitration an effective dead end.167 The Court was clearly aware of the practical reality that the Narrow Interpretation would have led to Article 8(3) being denuded of all force for modern investment disputes concerning indirect expropriation,168 though it appeared that the Court was not prepared to accept the Broad Interpretation on this concern alone.169 With regard to the PRC BITs’ generational shift, the Court was able to avoid examining this thorny issue at length on the ground that there had to be evidence of a ‘specific intention’ of the treaty parties,170 although the Court could equally have relied on Article 32 of the VCLT, which permits the use of such supplementary means of interpretation only if the interpretation under Article 31 had led to an ambiguous or obscure meaning or a manifestly unreasonable or absurd result.171 A recent example of how an entirely different outcome may be arrived at by emphasizing the text of the investment treaty can be seen in Juan Ignacio and Others v Russia,172 a decision by the Svea Court of Appeal concerning the interpretation of Article 10 of the Russia–Spain BIT.173 Article 10 states that any dispute between an investor and a host State ‘relating to the amount or method of payment of the compensation [for expropriation under Article 6]’ may be referred to arbitration either under the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce or arbitration under the UNCITRAL Arbitration Rules.174 The Tribunal held that Article 10 was to be construed broadly to include disputes on both the existence of ‘compensable expropriation’,175 and the quantum of compensation, on the basis that, considering that a ‘fundamental advantage’ perceived by investors in many, if not most, BITs is that of ‘the internationalisation of the host state’s commitments’, it would be ‘impermissible to read Article 10…as a vanishingly narrow internationalisation of either Russia’s or Spain’s commitment’.176 As with the cases of Tza Yap Shum, Sanum and Beijing Urban, the Tribunal was particularly taken by the fact that, should Article 10 be limited to quantum disputes, the host State may unilaterally deprive the investor of any access to arbitration simply by denying liability for expropriation.177 However, in subsequent annulment proceedings, the Svea Court of Appeal came to the opposite conclusion, holding that Article 10 was, by its text alone, clear that the tribunal’s jurisdiction was limited to disputes on the amount or method of payment of compensation for expropriation.178 Notwithstanding the Tribunal’s concerns on the consequences of a narrow interpretation of Article 10, the Svea Court of Appeal was of the view that its interpretation left no room for any remaining ambiguity or obscurity and did not lead to manifestly unreasonable or absurd outcomes.179 It is an open question whether the Court of Appeal in Sanum might have come to a different conclusion since, unlike Article 8(3) of the PRC–Laos BIT, Article 10 of the Russia–Spain BIT contains a very different fork-in-the-road provision, with both forks leading to international arbitration and neither undermining the other. However specific it may be, the Court of Appeal’s reliance on the fork-in-the-road provision, which was first seen in Tza Yap Shum,180 has already proven to be influential in the interpretation of other ‘first-generation’ PRC BITs, though it is far from being the final word on the subject. In the Beijing Urban case,181 the Tribunal was faced with Article 10 of the PRC–Yemen BIT,182 which stated that any dispute between an investor and the host State may be submitted to either a competent court of the host State or arbitration under the International Centre for the Settlement of Investment Disputes, subject to the proviso that the contracting States ‘shall give its irrevocable consent to the submission of any dispute relating to the amount of compensation for expropriation for resolution under such arbitration procedure’, with other disputes to be ‘mutually agreed upon between both Contracting parties’.183 The Tribunal held, following Sanum, that a broad interpretation of Article 10 (so that issues of both liability and quantum could be referred to arbitration) was necessary to prevent the ‘untenable conclusion’ that the investor would ‘never actually have access to arbitration’.184 Yemen’s argument on the PRC BITs’ generational shift was dismissed by the Tribunal on the basis that Article 32 of the VCLT precluded the use of such supplementary means of interpretation.185 In contrast, in the China Heilongjiang case,186 which concerned a dispute resolution clause in the PRC–Mongolia BIT187 that is virtually identical to Article 8(3) of the PRC–Laos BIT,188 the Tribunal came to the opposite conclusion of the Court of Appeal in Sanum by holding that Article 8(3) of the PRC–Mongolia BIT was to be read narrowly to allow only quantum disputes to be submitted to arbitration.189 The Tribunal was of the view that the Narrow Interpretation would not render the right to arbitration under Article 8(3) of the PRC–Mongolia BIT illusory, particularly because the investor would clearly have the right to arbitration in cases of ‘formally proclaimed’ expropriations (that is, expropriations that had been formally announced by the host State via legislative or executive means) with only the amount of compensation being in dispute.190 In the Tribunal’s view, while formally proclaimed expropriations were less common than non-proclaimed ones, their occurrence was nonetheless uncontested, and an arbitration provision that would encompass an entire category of disputes could not fairly be said to be lacking effet utile.191 The Tribunal was of the further view that the right to arbitration was also available in cases of non-proclaimed (indirect) expropriation on the basis that the investor was, under the fork-in-the-road provision of Article 8, free to seek redress from the domestic courts while expressly reserving the quantum issues for arbitral proceedings under Article 8(3) of the PRC–Mongolia BIT.192 Unlike the Court of Appeal in Sanum, the Tribunal did not appear to be of the opinion that the issues of liability and quantum for expropriation were inextricably intertwined. The China Heilongjiang Award is currently subject to setting aside proceedings before the US District Court for the Southern District of New York on the ground that the Tribunal’s interpretation of Article 8(3) of the PRC–Mongolia BIT ‘defeats the purpose of investor state arbitration’.193 It therefore appears that the issue of the proper interpretation of Article 8(3) of the PRC–Mongolia BIT remains in flux. The upshot of all this is that Sanum’s impact on the interpretation of such ‘amount-of-compensation’ clauses may be restricted to disputes over clauses that have a similarly critical drafting flaw, namely a fork-in-the-road provision that leads to there being no actual right to arbitration, no matter the type of dispute. Such clauses are present in around 70 ‘first-generation’ PRC BITs—hence, the interpretation of their dispute resolution clauses has potentially significant implications for Chinese foreign investments around the world. Notably, while the PRC has disputed the applicability of its BITs to the special administrative regions, it has not disputed the correctness of the Court’s decision on the interpretation of Article 8(3) of the PRC–Laos BIT.194 It may well be that an expansive reading of such clauses may no longer be of particular concern to the PRC since it has accepted international arbitration for all disputes in its ‘third-generation’ BITs.195 With regard to ‘amount-of-compensation’ clauses in general, the case law on the proper interpretation of such clauses is foreseen to remain unsettled; as observed by the Court of Appeal in Sanum, minor differences in wording can significantly alter the operation of two otherwise similar treaties,196 and there are other ways to expansively interpret restrictive arbitration clauses, such as through the use of ‘most-favoured nation’ clauses197 or even the general policy consideration that foreign investment would not be promoted by purely formal or illusory standards of protection.198 Further, as seen in the China Heilongjiang case, a tribunal may arrive at an entirely different interpretation depending on the available evidence on the operation of such clauses in the territories of the contracting States. However, what is clear is that the Singapore courts have taken on a more assertive and internationalist role in the adjudication of investment disputes. In our previous comment, we had stated that the crux of the issue here is whether an investment tribunal may pragmatically interpret a restrictive treaty term in an expansive way notwithstanding the apparent intentions of the contracting States. From this inquiry, we now consider the further and difficult question of whether it is the proper role of investment tribunals to correct the meaning of dispute resolution clauses they deem useless or senseless or whether such remedial action should remain reserved to the State parties to the investment treaty—that is, whether it is the treaty interpreter or the treaty maker who determines the proper scope of the arbitration.199 It would appear that, in its recognition of the need to protect rights and benefits accrued to third parties to the investment treaty and in its efforts to avoid an illusory right to arbitration, the Court of Appeal in Sanum emphatically decided in favour of the former. VII. CONCLUSION Sanum is a highly significant and well-reasoned decision of the Singapore Court of Appeal. As the first judgment by Singapore’s apex court involving the curial review of an investment award, Sanum has provided much needed clarity on several aspects of the mechanics of such review, such as the confirmation that the interpretation and application of treaties to which Singapore is not a party are justiciable matters insofar as the Singapore courts are required to do so in order to give effect to the parties’ rights and duties under the IAA as well as the confirmation that the standard of review of arbitral awards on jurisdiction is de novo. Sanum also shows that the Singapore courts will not shy away from dealing with complex issues of public international law, as shown in its application of the critical date doctrine in determining issues concerning the operation of the MTF Rule and its clarification that the standard of proof on matters concerning public international law is on a balance of probabilities. Most significant is perhaps the Court’s serious and meticulous examination of the issues and jurisprudence surrounding ‘amount-of-compensation’ clauses in investment treaties as well as its treatment of unworkable ‘fork-in-the-road’ provisions in such clauses. The Court has shown that it is very much aware of the general problems that plague such clauses, and it has settled on an interpretation that ensures that a fork in the road towards the path to arbitration does not end up being a dead end. It will undoubtedly be seen as an influential and prominent decision in modern investment treaty jurisprudence on the workings of not-so-modern investment treaties. Footnotes 4 Government of the Lao People’s Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 [Sanum (HC)]. 5 See Michael Hwang and Aloysius Chang, ‘Case Comment: Government of the Lao People’s Democratic Republic v Sanum Investments Ltd: A Tale of Two Letters’ (2015) 30(3) ICSID Rev—FILJ 506. 6 Agreement between the Government of the People’s Republic of China and the Government of the Lao People’s Democratic Republic Concerning the Encouragement and Reciprocal Protection of Investments (signed 31 January 1993, entered into force 1 June 1993) (PRC–Laos BIT). 7 Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Arbitration Rules) (1976). 8 Sanum Investments Limited v Government of the Lao People’s Democratic Republic, PCA Case No 2013-13, Award on Jurisdiction (13 December 2013). 9 International Arbitration Act, Cap 143A (rev edn, 2002) (Singapore) (IAA). 10 Sanum (HC) (n 4) para 40. 11 ibid. 12 Sanum (n 1) para 38. 13 ibid. 14 ibid. 15 United Nations Commission on International Trade Law Model Law on International Commercial Arbitration (2006) (UNCITRAL Model Law). 16 Sanum (n 1) para 40. 17 ibid para 41. 18 PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and Others and Another Appeal [2014] 1 SLR 372. 19 ibid paras 162–3, citing Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763, para 30 (per Lord Mance JSC). 20 Sanum (n 1) para 43, citing AQZ v ARA [2015] 2 SLR 972, para 57. 21 Sanum (n 1) para 44. 22 Ladd v Marshall [1954] 1 WLR 1489. See also Chan Ah Beng v Liang and Sons Holdings (S) Pte Ltd [2012] 3 SLR 1088, para 17. 23 Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) [2004] 2 SLR(R) 392. 24 Ladd (n 22) 1491. 25 Lassiter (n 23) para 24. 26 Sanum (n 1) para 102. 27 ibid para 103–8. 28 ibid para 64–5, citing Robert Pietrowski, ‘Evidence in International Arbitration’ (2006) 22(3) Arb Intl 373, 399. 29 Sanum (n 1) para 67. 30 ibid para 49. 31 ibid para 105. 32 LFE Goldie, ‘The Critical Date’ (1963) 12(4) ICLQ 1251. 33 Sanum (n 1) para 66. 34 Vienna Convention on the Law of Treaties (opened for signature 23 May 1969; entered into force on 27 January 1980) (VCLT). 35 Sanum (n 1) para 66. It should be noted that the judge had agreed with this argument. See Sanum (HC) (n 4) paras 68–9. 36 Goldie (n 32) 1254. 37 Robert Pietrowski, ‘Evidence in International Arbitration’ (2006) 22(3) Arb Intl 373, 399–400. 38 Sanum (n 1) para 106–7. 39 ibid para 103. 40 ibid para 108. 41 ibid paras 47–9. 42 ibid para 112. 43 ibid paras 68–9. 44 ibid paras 113–21. 45 ibid paras 30–5. 46 ibid para 121. 47 Basic Law of the Macau Special Administrative Region of the People's Republic of China (adopted at the First Session of the Eighth National People's Congress on 31 March 1999 and promulgated by Order No. 3 of the President of the People's Republic of China on 31 March 1993, and effective as of 20 December 1999) (Basic Law of Macau). 48 VCLT (n 34) art 29 (Territorial Scope of Treaties) states: ‘Unless a different intention appears from the treaty or is otherwise established, a treaty is binding upon each party in respect of its entire territory.’ 49 Vienna Convention on the Succession of States in Respect of Treaties (signed 23 August 1978, entered into force 6 November 1996) art 15 (Succession in Respect of Part of Territory) states: When part of the territory of a State, or when any territory for the international relations of which a State is responsible, not being part of the territory of that State, becomes part of the territory of another State: (a) treaties of the predecessor State cease to be in force in respect of the territory to which the succession of States relates from the date of the succession of States; and (b) treaties of the successor State are in force in respect of the territory to which the succession of States relates from the date of the succession of States, unless it appears from the treaty or is otherwise established that the application of the treaty to that territory would be incompatible with the object and purpose of the treaty or would radically change the conditions for its operation. 50 Sanum (n 1) para 47. 51 ibid para 75–6. 52 ibid para 49. 53 ibid paras 61–70. 54 ibid paras 61–2. 55 ibid paras 103–8. 56 ibid para 63. 57 ibid para 63. 58 Lee Hsien Loong v Review Publishing Co Ltd and another [2007] 2 SLR(R) 453. 59 Treaty on Judicial Assistance in Civil and Commercial Matters between the Republic of Singapore and the People’s Republic of China, GN No T2/2001, Bilateral Treaty No B459 (28 April 1997). 60 Sanum (HC) (n 4) paras 76–7. 61 Sanum (n 1) paras 70–122. 62 ibid paras 112–13. 63 ibid para 113. 64 ibid para 114. 65 ibid para 115. 66 ibid para 116. 67 ibid para 116(e). 68 ADF Group Inc v United States of America, ICSID Case No ARB(AF)/00/1, Award (9 January 2003). 69 Sanum (n 1) paras 117–18. 70 Lee Hsien Loong (n 58). 71 Sanum (n 1) para 120. 72 PRC–Laos BIT (n 6) arts 8(1)–(3), reproduced in full, are as follows: Article 8 (1) Any disputes between an investor of one Contracting State and the other Contracting State in connection with an investment in the territory of the other Contracting State shall, as far as possible, be settled amicably through negotiation between the parties to the dispute. (2) If the dispute cannot be settled through negotiation within six months, either party to the dispute shall be entitled to submit the dispute to the competent court of the Contracting State accepting the investment. (3) If a dispute involving the amount of compensation for expropriation cannot be settled through negotiation within six months as specified in paragraph 1 of this Article, it may be submitted at the request of either party to an ad hoc arbitral tribunal. The provisions of this paragraph shall not apply if the investor concerned has resorted to the procedure specified in the paragraph 2 of this Article’ (emphasis added). 73 Sanum (n 1) para 124. 74 Sanum (HC) (n 4) para 121. 75 VCLT (n 34) art 31(1) states 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’, while art 31(3) of the VCLT states that, in the interpretation of a treaty, there ‘shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties’. 76 Sanum (n 1) para 125. 77 ibid para 126. 78 ibid para 128. 79 ibid para 22. 80 Plama Consortium Ltd v Republic of Bulgaria, ICSID Case No ARB/03/24, Decision on Jurisdiction (8 February 2005); Austrian Airlines v Slovakia, UNCITRAL, Final Award (9 October 2009); ST-AD GmbH v Republic of Bulgaria, PCA Case No 2011-06, Award on Jurisdiction (18 July 2013); Vladimir Berschader and Moïse Berschader v Russian Federation, SCC Case No 080/2004, Award (21 April 2006); RosInvest Co UK Ltd v Russian Federation, SCC Case No V079/2005, Award on Jurisdiction (1 October 2007). 81 Sanum (n 1) paras 135–45. 82 Vladimir Berschader (n 80); RosInvest (n 80). 83 Sanum (HC) (n 4) paras 123–6. 84 PRC–Laos BIT (n 6) art 4(1), reproduced in full, is as follows: Article 4 1. Neither Contracting State shall expropriate, nationalize or take similar measures (hereinafter referred to as ‘expropriation’) against investments of investors of the other Contracting state in its territory, unless the following conditions are met: a. as necessitated by the public interest; b. in accordance with domestic legal procedures; c. without discrimination; d. against appropriate and effective compensation (emphasis added). 85 Sanum (n 1) para 128. 86 Sanum (HC) (n 4) para 122. 87 Sanum (n 1) para 130. 88 Tza Yap Shum v Republic of Peru, ICSID Case No ARB/07/06, Decision on Jurisdiction and Competence (19 June 2009). This decision was subsequently and unsuccessfully challenged in ICSID annulment proceedings: see Tza Yap Shum v Republic of Peru, ICSID Case No ARB/07/6, Decision on Annulment (12 February 2015). 89 Sanum (n 1) paras 130–1. Agreement between the Government of the Republic of Peru and the Government of the People’s Republic of China Concerning the Encouragement and Reciprocal Protection of Investments (signed 9 June 1994, entered into force 1 February 1995). 90 Sanum (n 1) para 133. 91 ibid para 133, citing Hwang and Chang (n 5) 522. 92 ibid para 133. 93 ibid paras 135–46. 94 ibid para 145. 95 ibid para 146. 96 The preamble of the PRC–Laos BIT (n 6) stated as follows: ‘Desiring to encourage, protect and create favourable conditions for investment by investors of one Contracting State in the territory of the other Contracting State based on the principles of mutual respect for sovereignty, equality and mutual benefit and for the purpose of the development of economic cooperation between both States.’ 97 Sanum (n 1) paras 149–50. 98 ibid para 38. 99 In support of this argument were several references to the use of the word ‘commercial’ in the IAA (n 9) and the UNCITRAL Model Law (n 15), eg, the long title of the IAA (‘conduct of international commercial arbitrations’), the title to Part II of the IAA (‘International Commercial Arbitration’), section 5(2)(b) of the IAA (‘obligations of the commercial relationship’) and art 1(1) of the Model Law (‘this Law applies to international commercial arbitration’) and its accompanying footnote to ‘commercial’. 100 Lawrence Boo and Earl J Rivera-Dolera, ‘SAL Annual Review: Arbitration’ (2015) 16 SAL Annual Rev 100, 100–2. 101 ibid 102. 102 Lawrence Boo and Earl J Rivera-Dolera, ‘SAL Annual Review: Arbitration’ (2016) 17 SAL Annual Rev 89, 93. 103 The footnote to UNCITRAL Model Law (n 15) art 1(1) states: The term ‘commercial’ should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road (emphasis added). 104 See Hege Elisabeth Kjos, Applicable Law in Investor-State Arbitration (OUP 2013) 30–5, citing Petrobart Limited v Kyrgyz Republic, SCC Case No 126/2003, Award (29 March 2005) 23; RosInvest Co v Russian Federation, Supreme Court of Sweden Case No Ö 2301–09, Decision (12 November 2010) para 3; Svenska Petroleum Exploration AB v Government of the Republic of Lithuania and AB Geonafta [2006] EWCA Civ 1529, para 93 (Court of Appeals of England and Wales); Jan Oostergetel and Theodora Laurentius v Slovak Republic, UNCITRAL, Final Award (23 April 2012) para 142; Chevon Corporation and Texaco Petroleum Company v Republic of Ecuador, UNCITRAL, PCA Case No 34877, Partial Award on the Merits (30 March 2010); ADF Group (n 68) para 31; Iurii Bogdanov, Agurdino-Invest Ltd, Agurdino-Chimia JSC v Government of the Republic of Moldova, SCC Case No 93/2004, Award (22 September 2005) s 2.2.1; Austrian Airlines v Slovak Republic, UNCITRAL, Final Award and Dissenting Opinion (redacted version) (20 October 2009) para 81. See also Russian Federation v Sedelmayer, Stockholm District Court Case No T6-583-98 (12 December 2002). 105 CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305, para 26. See also Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Limited and Others [2017] SGHC 195, para 84. 106 See eg Meixian Lee, ‘Strong Take-Up Drives Expansion at Maxwell Chambers’ Business Times (23 June 2017); N Vivekananda and John Menezes Jagdish, ‘Singapore as a Seat for Investor-State Disputes’ Singapore International Arbitration Centre <http://www.siac.org.sg/newsite/index.php/70-articles/169-singapore-as-a-seat-for-investor-state-disputes> accessed 17 January 2018. See also the recent SIAC Investment Arbitration Rules (1 January 2017) <http://www.siac.org.sg/our-rules/rules/siac-ia-rules-2017> accessed 17 January 2018. 107 Sanum (n 1) para 44. See also Kingdom of Lesotho (n 105) para 87. 108 Hwang and Chang (n 5) 515. 109 ibid 515–16. 110 Gary Born, Jonathan W Lim and Darshini Prasad, ‘Sanum v. Laos (Part II): The Singapore Court of Appeal Affirms Tribunal’s Jurisdiction under the PRC-Laos BIT’ Kluwer Arbitration Blog (11 November 2016), citing BG Group PLC v Republic of Argentina 134 SCt 1198 (2014) (Supreme Court of the United States); Gary Born, International Commercial Arbitration (Kluwer 2014) 936–8. 111 Gary Born and Marija Šćekić, ‘Pre-Arbitration Procedural Requirements: “A Dismal Swap”’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 243. See also Laurent Gouiffès and Melissa Ordonez, ‘Jurisdiction and Admissibility: Are We Any Closer to a Line in the Sand?’ (2015) 31(1) Arb Intl 107; Jan Paulsson, ‘Jurisdiction and Admissibility’ in Gerald Aksen and others (eds), Global Reflections on International Law, Commerce and Dispute Resolution: Liber Amicorum in Honour of Robert Briner (ICC Publishing 2005) 601. 112 See Hwang and Chang (n 5) 516. 113 Sanum (n 1) para 34, citing AQZ (n 20) para 57. 114 Cap 322, R5, 2014 Rev Ed Sing. 115 AQZ (n 20) paras 49–59. 116 Sanum (n 1) paras 102–3. 117 AQZ (n 20) para 59, citing Electrosteel Castings Ltd v Scan-Trans Shipping & Chartering Sdn Bhd [2003] 1 Lloyd’s Rep 190, para 22. 118 Jiangsu Overseas Group Co Ltd v Concord Energy Pte Ltd and Another Matter [2016] 4 SLR 1336 paras 50-3. 119 The Registrar of the Supreme Court of Singapore is a judicial offer that heads the Supreme Court Registry and is equivalent to a master in the courts of England and Wales and other common law jurisdictions. 120 Hwang and Chang (n 5) 516–17. 121 Central Trading & Exports Ltd v Fioralba Shipping Co [2014] EWHC 2397 (Comm). 122 Hwang and Chang (n 5) 517. 123 Darius Chan, ‘The Scope of ‘De Novo’ Review of an Arbitral Tribunal’s Jurisdiction’ Singapore Law Blog (8 October 2014) <http://www.singaporelawblog.sg/blog/article/140> accessed 17 January 2018. 124 Sanum (n 1) paras 61–2. 125 ibid para 103. 126 While Sanum is the first case of an investment treaty Award being reviewed by the Singapore courts, it was swiftly followed by another one; a partial final Award issued against the Kingdom of Lesotho was set aside by the High Court of Singapore on the grounds of a lack of jurisdiction. See Kingdom of Lesotho (n 105). 127 ibid 518–19. 128 James D Fry and Odysseas G Repousis, ‘Intertemporality and International Investment Arbitration: Protecting the Jurisdiction of Established Tribunals’ (2015) 31(2) Arb Intl 213, 247. 129 Christoph Schreuer, ‘At What Time Must Jurisdiction Exist?’ in David D Caron and others (eds), Practising Virtue: Inside International Arbitration (OUP 2015) 270. 130 See Sanum (HC) (n 4) paras 68–9. 131 Sanum (n 1) para 116. 132 See Boo and Rivera-Dolera (n 102) n 11. 133 See Anthea Roberts, ‘Subsequent Agreements and Practice: The Battle over Interpretive Power’ in Georg Notle (ed), Treaties and Subsequent Practice (OUP 2013) 97. 134 Kendra Magraw, ‘Investor-State Disputes and the Rise of Recourse to State Party Pleadings As Subsequent Agreements or Subsequent Practice under the Vienna Convention on the Law of Treaties’ (2015) 30(1) ICSID Rev—FILJ 142, 144–5. 135 Georg Nolte, ‘Second Report on Subsequent Agreements and Subsequent Practice in Relation to the Interpretation of Treaties’, Doc A/CN.4/671 (26 March 2014) 50–1. 136 Roberts (n 133) 99. 137 Karen J Alter, ‘Agents or Trustees? International Courts in their Political Context’ (2008) 14 EJIL 33, 38; Karen J Alter, ‘Delegation to International Courts and the Limits of Re-contracting Political Power’ in Darren Hawkins and others (eds), Delegation and Agency in International Organizations (CUP 2006) 326. 138 Sanum (n 1) para 116(e). 139 Rahim Moloo, ‘When Actions Speak Louder Than Words: The Relevance of Subsequent Party Conduct to Treaty Interpretation’ (2013) 31(1) Berkley J Intl L 39, 74. 140 See eg Sempra Energy International v Argentine Republic, ICSID Case No ARB/02/16, Award (28 September 2007) para 386: ‘Moreover, even if this interpretation were shared today by both parties to the Treaty, it still would not result in a change of its terms. States are of course free to amend the Treaty by consenting to another text, but this would not affect rights acquired under the Treaty by investors or other beneficiaries’; Plama Consortium (n 80) para 162: In the Tribunal’s view, therefore, the object and purpose of the ECT suggest that the right’s exercise should not have retrospective effect. A putative investor, properly informed and advised of the potential effect of Article 17(1), could adjust its plans accordingly prior to making its investment. If, however, the right’s exercise had retrospective effect, the consequences for the investor would be serious. The investor could not plan in the ‘long term’ for such an effect (if at all); and indeed such an unexercised right could lure putative investors with legitimate expectations only to have those expectations made retrospectively false at a much later date. 141 See eg Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on Jurisdiction (14 November 2005) para 60; Bayindir Insaat Turizm Ticaret Ve Sanayi AS v Islamic Republic of Pakistan, ICSID Case No ARB/03/29, Decision on Jurisdiction (14 November 2005) para 178; Antoine Goetz and Others v Republic of Burundi, ICSID Case No ARB/95/3, Award (10 February 1999), reprinted in (2000) 15 ICSID Rev—FILJ 457, para 72; Amco Asia Corporation and Others v Indonesia, ICSID Case No ARB/81/1, Decision on Jurisdiction (10 May 1988) (resubmitted case), reprinted in (1988) 3 ICSID Rev—FILJ 166, 184–5. See also Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (OUP 2008) 41. 142 ADF Group (n 68). 143 Sanum (n 1) paras 117–18. North American Free Trade Agreement (signed 17 December 1992, entered into force 1 January 1994) (NAFTA). 144 NAFTA Free Trade Commission Clarifications Related to NAFTA Chapter 11 (31 July 2001). 145 NAFTA (n 143) art 2001(2). 146 ibid art 1131(2). 147 United States–Singapore Free Trade Agreement (signed 6 May 2003, entered into force on 1 January 2004) art 20.1. 148 See Gabrielle Kaufmann-Kohler, ‘Interpretive Powers of the Free Trade Commission and the Rule of Law’ in Emmanuel Gaillard and Frédéric Bachand (eds), Fifteen Years of NAFTA Chapter 11 Arbitration (JurisNet LLC 2011) 177. 149 Ian Laird, ‘Betrayal, Shock and Outrage: Recent Developments in NAFTA Article 1105’ in Todd Weiler (ed), NAFTA Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects (Transnational Publishers 2004) 49. 150 Charles H Brower, II, ‘Structure, Legitimacy and NAFTA’s Investment Chapter (20003) 36 Vand J Transnatl L 37. See also Methanex Corporation v United States of America, UNCITRAL, Second Opinion of Professor Sir Robert Jennings QC (6 September 2001) 4–6. 151 Dolzer and Schreuer (n 141) 35. 152 VCLT (n 34) art 28 states: ‘Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.’ 153 Todd Weiler, ‘NAFTA Investment Arbitration and the Growth of International Economic Law’ (2002) Bus L Intl 158, 183–4; Charles H Brower, II, ‘Fair and Equitable Treatment under NAFTA’s Investment Chapter’ (2002) 96 Am Socy Intl L Proc 9. 154 Kaufmann-Kohler (n 148) 190–2. 155 Bilateral investment treaties (BITs) do not normally have non-judicial interpretive mechanisms, but this might not be the case for newer BITs based off the US Model BIT (2012), as art 30(3) of the US Model BIT provides for binding interpretive statements issued jointly by the treaty parties. 156 Ministry of Foreign Affairs, People’s Republic of China, ‘Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on October 21, 2016’ <http://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1407743.shtml> accessed 17 January 2018. See also Caroline Simson, ‘China Says Singapore Court Got It Wrong in Laos Treaty Case’ Law360 (21 October 2016) <https://www.law360.com/articles/854332/china-says-singapore-court-got-it-wrong-in-laos-treaty-case> accessed 17 January 2018. 157 See generally Magraw (n 134). 158 See Hwang and Chang (n 5) 519–21. 159 See eg August Reinisch, ‘Expropriation’ in Peter Muchlinski, Federico Ortino and Christoph Schreuer (eds), The Oxford Handbook of International Investment Law (OUP 2008) 408. 160 See eg the Libyan oil-concession arbitrations: Libyan American Oil Company (Liamco) v Libya, 62 ILR 140 (1981); Texaco Overseas Petroleum Company (Topco)/California Asiatic (Calasiatic) Oil Company v Libya, 17 ILM 1 (1978); British Petroleum v Libya, 53 ILR 297 (10 October 1973 and 1 August 1974). 161 August Reinisch, ‘How Narrow Are Narrow Dispute Settlement Clauses in Investment Treaties?’ (2011) 2(1) J Intl Disp Settlement 115, 117, 173. 162 Sanum (n 1) para 133. 163 Where outright nationalization has occurred, the question of the existence of an expropriation is generally not in dispute. See eg Guaracachi America, Inc and Rurelec PLC v Plurinational State of Bolivia, UNCITRAL, PCA Case No 2011-17, Award (31 January 2014) (claimant’s allegation that Bolivia’s nationalization of a power company was an act of expropriation went uncontested). 164 See eg Franz Sedelmayer v Russian Federation, SCC Case Award (7 July 1998); Telenor Mobile Communications AS v Hungary, ICSID Case No ARB/04/15, Award (13 September 2006); Saipem SpA v Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures (21 March 2007); Czech Republic v European Media Ventures SA [2007] EWHC 2851 (Comm); Renta 4 SVSA and Others v Russian Federation, SCC Case No V 024/2007, Award on Preliminary Objections (20 March 2009). 165 See eg Plama Consortium (n 80); Vladimir Berschader (n 80); RosInvest (n 80); Austrian Airlines (n 80); ST-AD GmbH (n 80). 166 Reinisch (n 152) 174. 167 Sanum (n 1) paras 130–3. 168 ibid para 133. 169 ibid para 146. cf Renta 4 SVSA (n 164) (the Tribunal adopted broad interpretation of the ‘amount of compensation’ clause despite there being no fork-in-the-road provision precluding arbitration upon submission of the dispute to the municipal courts). 170 Sanum (n 1) para 146. 171 VCLT (n 34) art 32, titled ‘Supplementary means of interpretation’, provides: ‘Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.’ 172 Juan Ignacio Luca de Tena 11 and others v Russian Federation, Case No T 9128-14 (18 January 2016) (unofficial English translation available at <https://www.italaw.com/sites/default/files/case-documents/italaw7714_8.pdf> accessed 17 January 2018). 173 Agreement for Reciprocal Promotion and Protection of Investments between Spain and the Union of Soviet Socialist Republics (signed 26 October 1990, entered into force 28 November 1991). 174 Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (2010). 175 Due to the wording of art 10 and a concession by the Claimant, the Tribunal considered that its subject matter jurisdiction did not extend to all aspects of expropriation but, rather, was restricted to whether there had been compensable expropriation. See Renta 4 SVSA (n 164) paras 41–2, 63. 176 ibid para 56. 177 Beijing Urban Construction Group Co Ltd v Republic of Yemen, ICSID Case No ARB/14/30, Decision on Jurisdiction (31 May 2017). 178 Juan Ignacio (n 172). 179 ibid. 180 Tza Yap Shum, Decision on Jurisdiction and Competence (n 88) para 188. 181 Beijing Urban (n 177). 182 Agreement on the Encouragement and Reciprocal Protection of Investments between the Government of the People’s Republic of China and the Government of the Republic of Yemen (signed 16 February 1998, entered into force on 10 April 2002). 183 ibid arts 10.1–10.2. 184 Beijing Urban (n 177) paras 69–87 (citing in support Tza Yap Shum, Decision on Jurisdiction and Competence (n 88); Renta 4 SVSA (n 164); Sanum (n 1). 185 Beijing Urban (n 177) paras 93–7. 186 China Heilongjiang International Economic & Technical Cooperative Corporation and Others v Republic of Mongolia, UNCITRAL, PCA Case No 2010-20, Award (30 June 2017). 187 Agreement between the Government of the People’s Republic of China and the Government of the Mongolian People’s Republic Concerning the Encouragement and Reciprocal Protection of Investments (signed 25 August 1991, entered into force 1 November 1993) (China-Mongolia BIT). 188 ibid art 8(3) states: ‘If a dispute involving the amount of compensation for expropriation cannot be settled within six months after resort to negotiations as specified in paragraph 1 of this Article, it may be submitted at the request of either party to an ad hoc arbitral tribunal. The provisions of this paragraph shall not apply if the investment concerned has resorted to the procedure specified in the paragraph 2 of this Article’ (emphasis added). 189 China Heilongjiang (n 186) para 448. 190 ibid. 191 ibid. 192 ibid para 449. 193 See Lacey Yong, ‘Mongolia Treaty Award Challenged in New York’ Global Arbitration Review (2 October 2017) <http://globalarbitrationreview.com/article/1147895/mongolia-treaty-award-challenged-in-new-york> accessed 17 January 2018; Damien Charlotin, ‘In-Depth: A First Look inside the Now-Surfaced Award in the Case of China Heilongjiang v. Mongolia Award; Claimants Now Pursuing Set Aside’ Investment Arbitration Reporter (1 October 2017). 194 Ministry of Foreign Affairs (n 156). See also Simson (n 156). 195 Norah Gallagher, ‘China’s BIT’s and Arbitration Practice: Progress and Problems’ in Wenhua Shan and Jinyuan Su (eds), China and International Investment Law: Twenty Years of ICSID Membership (Brill Nijhoff 2015) 210. 196 Sanum (n 1) para 146. 197 See eg Vladimir Berschader and Moïse Berschader v Russian Federation, SCC Case No V(080/2004), Separate Opinion of Professor Todd Weiler (7 April 2006) para 20; RosInvest (n 80). 198 Renta 4 SVSA (n 164) para 56. 199 Hwang and Chang (n 5) para 521. © The Author(s) 2018. Published by Oxford University Press on behalf of ICSID. All rights reserved. For Permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

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ICSID Review: Foreign Investment Law JournalOxford University Press

Published: Apr 19, 2018

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