Umbrella Clause And The Restrictive Function Of Forum Selection Clause To The Function Of It

Nowadays, Umbrella clause can be traced in many Bilateral InvestmentTreaties (abbr. BIT), which is applied to prescribe that each contractingparty shall observe certain commitments it has made to investors of theother contracting party. These years, International Centre for Settlementof Investment Disputes (abbr. ICSID) tribunal faced several arbitrationcases concerning Umbrella Clause. However, different tribunals adopteddifferent method of interpretation which leaded to different conclusions.Some of these conclusions are even totally opposite. This made the scopeof application concerning Umbrella Clause very hard to define; also thislured a lot attention from academic community. Till now western academiccommunity doesn’t have unified views. There are some Umbrella Clausesexisting in BIT signed by China and other countries. What strategy ourcountry should adopt is very important.The purpose of this article is trying to find a practicable way whichon the one hand admits the significance of the existence on the other handcan restrict the scope of Umbrella Clause. Author thinks that the theorywhich blindly denies the umbrella clause is unreasonable. Large scaleshowed up of Umbrella Clause in bilateral and multilateral treaties andthe purpose of its establishment has proved the meaning of its existence.On the other hand, the practice of arbitration has showed the tendencyto limit the scope of Umbrella Clause. From the angle of substantive law,no matter both the theory and practice, western academic community hasno solution recognized by most scholars. From a pragmatic view, authorsuggests that from the angle of procedural, there is a way to appropriatelyrestrict Umbrella Clause. After analyzing a series cases awarded by ICSIDtribunal, there is a tendency to respect forum selection clause ininvestment agreement.There are some Umbrella Clauses existing in BIT signed by China and other countries. What strategy our country should adopt is very important.Considering the actual situation of using foreign Investment and foreigndirect investment of our country, taking analysis of former awards ofICSID tribunal, author put forward suggestion to our country.This thesis consists of five chapters besides the introduction andepilogue.Chapter one introduces the origins and developments of Umbrella Clauseand the dispute caused by it.Chapter two discusses the meaning and necessity of Umbrella ClauseChapter three points out that there are different explanations ofUmbrella Clause, also it analyzes tendency of explanations concerning thescope of Umbrella Clause.Chapter four discusses the restrictive function of forum selectionclause to Umbrella Clause.Chapter five discusses the strategies to Umbrella Clause our countryshould adapt.