Interpretation Of Umbrella Clause In International Investment Agreements

Since first appeared in 1954, umbrella clause has become a regular feature of international investment agreements and has been concluded to provide additional protection to investors in the investment contracts between host countries and foreign investors. In the recent years, the interpretation and application of umbrella clause has now been one of the issues focused in the practice of international investment laws. In fact, umbrella clause has been concluded in many bilateral investment treaties (BITs) to require one contractual party to observe its specific commitments to investors of the other contractual party. Lately, there are a series of arbitral cases in relation to the application of umbrella clause in ICSID. However, tribunals of these cases adopted dramatically different approaches in the interpretation of umbrella clause and came into adverse conclusions. The uncertain about interpretation and application of umbrella clause has attracted the attention of academic community and has become one of the biggest issues faced by international tribunals.Umbrella clause has been concluded in parts of increasing BITs between our country and more and more other countries since China reformed and opened up. It's most essential to protect our country's interests in balancing the relationship between host countries and foreign private investors. After reviewing and comparing various umbrella clauses in different BITs and the three interpretative approaches for the application of umbrella clause provided by ICSID tribunals, this thesis analyses umbrella clause situation in China and gives some suggestions to the practice of China's BITs and settlement for foreign-related investment conflicts in order to pursue win-win.The thesis consists of: the introduction, four chapters and the epilogue.Chapter one is about the origins and the historical development of umbrella clause to make clear the derivation of umbrella clause.With reviewing many umbrella clauses by various countries, chapter two analyzes and compares the definition, expression and position of them to reflect the attitude various countries are having.Chapter three is about the three interpretative approaches in the application of umbrella clause put forward by ICSID tribunals—narrow interpretation approach, wide interpretation approach and comparatively narrow interpretation approach. The meaning and development in arbitration practice of these three approaches have been taken knowledge after three corresponding types of arbitral cases are analyzed.Chapter four is about the comparison and comments on the above three interpretative approaches and concludes the substantial reason of such difference. The suggestion which attitude and measures our country should take to solve umbrella clause problem is also given after reviewing the situation of umbrella clause in China.