424 / 532
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.