A Study Of The Umbrella Clause In Kenya Bilateral Investment Treaties

During the past 30 years,the bilateral investment treaty(BIT)has emerged as one of the most important developments for the regulation of foreign investment in international law.BITs are usually signed between developed countries and developing ones.The goal is to encourage and safeguard foreign investment.This work discusses the parable clause contained in some BITs.First,the study looks deeply into the umbrella clause in order to understand it better.It explores its concept,nature,trends,origin and development.In doing so,it is easy to understand why there is still a debate when it comes to the interpretation,scope and language used in the umbrella clause.Second,the study takes a closer look into the umbrella clauses available in Kenya BITs with an aim to answer the questions:why only 4 BITs contain the umbrella clause and if it is necessary?What interpretation should be used in the umbrella clause available?And if contractual claims should be included in the umbrella clause.By analysing and attempting to answer these questions,the paper is able to explain why and reduce the confusion behind the debate around the umbrella clause.The study finds that;Most countries choose to exclude the umbrella clause from their BITs because it does not simply provide parallel protection in accordance with other rights of the Treaty.Rather,it expands the scope of the protection of the treaty by including contractual obligations that do not always fall within the terms of fair and equitable treatment,full protection and security and expropriation.The controversy and discussion surrounding the umbrella clause is far from over,the study gives rise to the discussion by proposing that a legal check should be performed to clarify what duties are protected by the umbrella clause and by choosing between different methodologies and not by trying to put all discrepancies together under one single umbrella clause interpretation.The paper concludes that the other principles of the Treaty,such as equal and equitable treatment,full safety and security,and expropriation,are still very relevant in BITs even in the presence of the umbrella clause and also agree with the view of a scholar named Sornarajah.This approach would translate to what an ordinary treaty would require.The adoption of the plain view would eliminate the urge to limit the operationof the umbrella clauses.In practice it might not make a big difference but it is important to be clear about what we are talking about.