Umbrella Clause Investment Agreement

Cazala, J., La clause de respect des engagements, in Leben, C. (ed.), Droit international des investissements et de l`arbitrage transnational, 2015, pp. 347-173. Brazil and Mozambique signed on 30 March 2015 the first Investment Cooperation and Facilitation Agreement (CIFA), based on Brazil`s new Model Bilateral Investment Agreement (BIT). The second was signed on 1 April 2015 between Brazil and Angola. Unlike traditional EDPs that aim to protect investors, AICs focus mainly on cooperation and investment facilitation. They encourage amicable means of settling disputes and propose the settlement of disputes by the State as a safeguard; In particular, they do not contain any provisions relating to investor-state arbitration. The Umbrella Clauses internationalize the treaties and unilateral commitments of the host State. Very few courts have adopted this approach. 9 Several jurisdictions have explicitly objected to this interpretation.10 Each of these questions has been dealt with by arbitration tribunals that have provided different answers. Take, for example, the pioneering CASES of SGS against Pakistan (ARB/01/13), the Philippines (ARB/02/6) and Paraguay (ARB/07/29). Each of these cases concerned generic terms formulated almost identically; However, each jurisdiction has interpreted the higher clause differently.

In SGS v. Pakistan, the court held that “given the validity of the forum selection clause”, it is not necessary to assert contract-based rights over contractual rights. Only one year later, the SGS v. The Philippines considered that a connimation clause “provides foreign investors with assurances as to the performance of the commitments that the host State has entered into under its own law with respect to certain investments”; However, he decided to suspend the arbitration to wait for the Philippine courts to rule on the amount of money the government owed SGS. Finally, in SGS v. Paraguay, the Tribunal adopted a different and broader interpretation and stated that the ordinary meaning of the word obligation in the confederation clause clearly contained contractual obligations and that the clause “does not constitute a basis for the exclusion of contracts from the scope of the `obligations` covered by the [conveyor clause]. The model south African Development Community (SADC) bilateral investment agreement was finalised by the SaDC Member States in June 2012. . . .