Interpretation Of Umbrella Clause In China’s Bilateral Investment Treaties

In the recent years, in order to promote and protect the development,liberalization, facilitation and regulation of international investments,many countries have tried to formulate and sign investment treaties ofall levels. By the first half of2011, the number of internationalinvestment agreements signed has exceeded6100, including more than4000bilateral investment treaties (BITs).Umbrella clause, which has always been one top rule in more and moreinternational investment treaties, are concluded into more and more BITsand multilateral investment agreements to require one contractual partyto observe its specific commitments to investors of the other contractualparty. In the recent years, there are a series of arbitral cases relatedto the interpretation of umbrella clause in ICSID. Tribunals of thesecases, however, adopted dramatically different approaches in theinterpretation of umbrella clause and came into adverse conclusions.The uncertainty about the interpretation and application of umbrellaclause has attracted the attention of academic community. Along with thedevelopment of our economy and the demand of reform and opening, Chinais devoted to take attraction and advantage of foreign investments. When umbrella clause is written in the BITs signed by China, we should facemany difficult problems such as the interpretation of umbrella clause,the settlement of dispute between parties and the balance between statesovereignty and investors’ interest. After reviewing and comparing thethree different cases about umbrella clauses and the three interpretativeapproaches for the application of umbrella clause provided by ICSIDtribunals, this thesis will give some analyses and suggestions to thesignature practice of China’s BITs and settlement for investmentconflicts in order to pursue win-win.Apart from the introduction and epilogue, the thesis consists of threechapters:Chapter one is about the origins and the historical development ofumbrella clause whose feature is made clear of.After analyzing and comparing the three different interpretativeapproaches and the reason for it, chapter two is about narrowinterpretation approach, wide interpretation approach and comparativelynarrow interpretation approach of umbrella clause put forward by ICSIDtribunals and academic field.Chapter three is about the current situation of umbrella clause signedin China’s BITs. The suggestion about the advisable interpretation whichour country should apply is also given in this charter, in order to solvethe practice problem in China.