Document Type : Article


Ph.D. in International Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran


With the beginning of the 1990s, the process of concluding bilateral investment treaties to develop foreign investment and support foreign investors increased dramatically. These treaties often chose arbitration as their dispute settlement method. Yet, the dispute-settlement provisions of the bilateral investment treaties are not always clear enough. Therefore,  in order to settle the dispute arbitrators need to interpret the treaty provisions. The proportionality standard has been applied by some investment arbitral tribunals in order to make a balance between conflicting interests of host states and investors. Even so, some scholars have challenged the basis of the proportionality standard. In the present article the concept and characteristics of proportionality as a general principle of law - which has its roots in domestic legal systems and has been transferred to international law- will be examined. Accordingly, the application of proportionality for the interpretation of investment treaties under Article 31 of the 1969 Vienna Convention on the Law of Treaties will be justified.


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