The Umbrella Clause In Bilateral Investment Agreement Of China

Umbrella clause,which is widely concluded in many BITs,is applied to prescribe that each contracting party shall observe certain commitments it has made to investors of the other contracting party.Umbrella clause has drawn heated discussion since its birth,for the question whether it possess the upgrading power to turn contract claims into treaty ones.Obviously,the answer to this question will greatly affect the interest of both host country and foreign investor.Lately,there are a series of arbitrary cases regarding the application of umbrella clause in ICSID.However,tribunals of these cases adopted dramatically different interpretation methods,which led to opposite conclusions,making such issue more confusing.There are more than 104 foreign bilateral investment agreements in force in China,ranking first among developing countries.More than 30% of these agreements contain similar umbrella clauses.The inconsistency of the expression and position of the umbrella clause in China's bilateral investment agreements is likely to cause disputes on the interpretation of its effectiveness.Therefore,the effectiveness of the umbrella clause will directly affect the interests of China as the host country and the home country of overseas investors.This paper analyzes the development and classical expression of umbrella clauses,summarizes the contracting experience of the main developed countries on umbrella clauses for reference.By consulting the website of the Ministry of Commerce,this paper summarizes the number of bilateral investment agreements signed by China in recent years,including the number of umbrella clauses,and summarizes the umbrella clauses of China in terms of text expression,clause location,contracting country,etc This paper discusses the three interpretation methods of Umbrella Clause,analyzes its influence and puts forward reasonable suggestions on how to deal with Umbrella Clause in China.