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408

VOJTĚCH TRAPL

CYIL 5 ȍ2014Ȏ

framework of the BIT and has to be construed as intending to be effective within

that framework.

28

According to the Arbitral Tribunal, the object and purpose of the

BIT supported an effective interpretation of Article X(2) and that it was legitimate

to resolve uncertainties in its interpretation so as to favor the protection of covered

investments.

29

In the view of the Arbitral Tribunal, for Article X(2) to be applicable the

host State must have assumed a legal obligation, and it must have been assumed

vis-à-

vis

the specific investment not as a matter of the application of some legal obligation

of a general character, but this was very far from elevating to the international

level all “the municipal legislative or administrative or other unilateral measures

of a Contracting Party”.

30

The Tribunal applied general principles of international

law to generate a presumption against the broad interpretation of Article 11, as

the International Law Commission observed in its commentary to Article 3 of the

ILC Articles on Responsibility of States for Internationally Wrongful Acts, referring to

the possibility that “the provisions of internal law… are actually incorporated in some

form, conditionally or unconditionally, into that [sc

.

the international] standard”. The

question was essentially one of interpretation and did not seem to be determined by

any presumption.

31

The Tribunal’s conclusion on Article X(2) was that it constituted

a breach of the BIT for the host State to fail to observe binding commitments,

including contractual commitments, which it had assumed with regard to specific

investments. But it did not convert the issue of the extent or content of such

obligations into an issue of international law.

32

The Tribunal did not regard the

location of the provision as decisive.

33

Nevertheless the Arbitral Tribunal, faced with

the Philippines’ responsibility under Article X(2) and IV of the BIT, concluded that

the matter did not fall within its jurisdiction because it was subject to “the factual

predicate of a determination by the Regional Trial Court of the total amount owing

by the Respondent.”

34

The proceedings were therefore suspended.

The Arbitral Tribunal took a further step in

Joy Mining v. Egypt

. The examined

Article 2(2) of the Egypt-United Kingdom BIT provided, amongst others, that:

Each Contracting Party shall observe any obligation it may have entered into with regard

to investments of nationals or companies of the other Contracting Party

.” The Arbitral

Tribunal intended to ignore the interpretation of other tribunals, including those in

the

SGS

cases, and took the view of the umbrella clause that, in this context, it could

not be held that an umbrella clause inserted in the Treaty, and not very prominently,

could have the effect of transforming all contract disputes into investment disputes

under the Treaty, unless of course there were

to be a clear violation of the Treaty rights

and obligations or a violation of contract rights of such a magnitude as to trigger the

28

Supra

note 14 at 115.

29

Ibid

at 116.

30

Ibid

at 121.

31

Ibid

at 122.

32

Ibid

at 128.

33

Ibid

at 124.

34

Ibid

at 143.