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The "Umbrella" Clause in Investment Arbitration

The "Umbrella" Clause in Investment Arbitration I. INTRODUCTION The extent to which customary law in the past and modern bilateral and multilateral investment treaties at present protect contracts concluded with States and their attributed entities has been and continues to be controversial. Some of the issues concerned relate to substantive law: - To what extent is international and treaty-based law applicable to such contracts? - To what extent is domestic law relevant for the application of international law? Others relate to procedural law: - What is the relationship between treaty-based international arbitration and other jurisdiction based on domestic law and specific contractual jurisdictional provisions? The issue has been emerging as one of the key, and so far largely unresolved, challenges in modern, treaty-based, direct investor-State investment arbitration. Over 2,000 bilateral investment treaties (BI'rs) have by now been concluded,' as well as several plurilateral or multilateral investment treaties that amount to the equivalent of more than another 2,000 BITS.2 Governments, tribunals and scholars have been divided on the scope of the protection offered by these treaties.3 As usual, there is an approach highlighting State sovereignty which provides a large, unfettered leeway for abrogation of such contracts by governments, relying on domestic law. This view is http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

The "Umbrella" Clause in Investment Arbitration

Journal of World Investment and Trade , Volume 6 (2): 54 – Jan 1, 2005

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190005X00064
Publisher site
See Article on Publisher Site

Abstract

I. INTRODUCTION The extent to which customary law in the past and modern bilateral and multilateral investment treaties at present protect contracts concluded with States and their attributed entities has been and continues to be controversial. Some of the issues concerned relate to substantive law: - To what extent is international and treaty-based law applicable to such contracts? - To what extent is domestic law relevant for the application of international law? Others relate to procedural law: - What is the relationship between treaty-based international arbitration and other jurisdiction based on domestic law and specific contractual jurisdictional provisions? The issue has been emerging as one of the key, and so far largely unresolved, challenges in modern, treaty-based, direct investor-State investment arbitration. Over 2,000 bilateral investment treaties (BI'rs) have by now been concluded,' as well as several plurilateral or multilateral investment treaties that amount to the equivalent of more than another 2,000 BITS.2 Governments, tribunals and scholars have been divided on the scope of the protection offered by these treaties.3 As usual, there is an approach highlighting State sovereignty which provides a large, unfettered leeway for abrogation of such contracts by governments, relying on domestic law. This view is

Journal

Journal of World Investment and TradeBrill

Published: Jan 1, 2005

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