The English Court of Appeal affirms the correct approach to treaty interpretation under customary international law (Republic of Korea v Elliott Associates)
Arbitration analysis: This appeal concerns the correct interpretation of Chapter 11 of the free trade agreement between the Republic of Korea and the United States of America (the ‘Treaty’). In April 2018, Elliott Associates, LP (‘Elliott’) commenced arbitration proceedings, alleging that the Republic of Korea (‘Korea’) had breached specific provisions of Chapter 11 of the Treaty. Korea objected to the tribunal’s jurisdiction, arguing that the claim fell outside the scope of Chapter 11, including its dispute resolution provisions. However, in June 2023, the tribunal upheld Elliott’s claims and awarded damages against Korea. In response, Korea applied to the High Court in July 2023 seeking to set aside the arbitral award under section 67 of the English Arbitration Act 1996 (AA 1996). The application was dismissed by Justice Foxton of the Commercial Court in August 2024, resulting in the present appeal. In overturning the High Court’s decision, the Court of Appeal (COA) clarified the correct approach to interpreting treaties. It affirmed that interpretation must align with the principles established in the Vienna Convention on the Law of Treaties (VCLT), which reflect customary international law. Drawing from Article 31 and 32 of the VCLT, the COA emphasised that treaty terms must be construed by reference to their ordinary meaning, in context, and in light of the object and purpose of the treaty without drawing from English authorities as to whether particular issues ‘will be jurisdictional for section 67 purposes’. The COA concluded that, on a proper interpretation, Section A of the Treaty imposes specific jurisdictional requirements that must be satisfied, for an offer to arbitrate under Section B of Chapter 11 to arise. Accordingly, the High Court was found to have erred in holding otherwise. Written by Dr Ademola Bamgbose, solicitor advocate and senior associate at Hogan Lovells, London and Naa Amorkor Amarteifio, partner at AB & David Africa, Ghana.