425 / 532
409
UMBRELLA CLAUSE ȃ ADDITIONAL PROTECTION OF INVESTMENT BY CLAUS…
Treaty protection, which was not the case. The connection between the Contract and
the Treaty was the missing link that prevents any such effect. This might have been
perfectly different in other cases where that link were found to exist, but certainly
was not the case here
.
35
The ICSID Tribunal in
CMS v. Argentina
36
found, in connection with
Article II(2)(c) of the Argentina-United States BIT, which provides that each party
“
shall observe any
obligation it may have entered into with regard to investments
”, that
the umbrella clause applied to some but not all contractual obligations when relying
inter alia
on the
SGS
cases and
Joy Mining v. Egypt
.
37
The Tribunal determined that
the umbrella clause distinguished between “commercial disputes” and those “disputes
arising from the breach of treaty standards and their respective causes of action”,
38
and
that the umbrella clause applied only to the latter, which “likely” included situations
involving “significant interference by government or public agencies with the rights
of the investors.”
39
In contrast to
Joy Mining
and
CMS
, however, other decisions have observed
more generally that the umbrella clause extends to contractual obligations without
excluding particular categories of contractual obligations from its scope.
40
The Arbitral
Tribunal in
Consorzio Groupement L.E.S.I.-DIPENTA v. Algeria
stated that “the
effect of [umbrella] clauses is to
transform the violations of the State’s contractual
commitments into violations of the treaty and by this to give jurisdiction to the
Tribunal over the matter”. Indeed, the decision held that, when the umbrella clause
is phrased in the imperative, it then must be held to apply without exception to all
contractual obligations.
41
In
Eureko B.V. v. Poland,
42
the Tribunal commented on the umbrella clause in
the Netherlands-Poland BIT, in which Article 3.5 of the Treaty provides that each
Contracting Party “
shall observe any obligations it may have entered into with regard
to investments of investors of the other Contracting Party
”. A clause of such substance
is called “the umbrella clause”. Thus, insofar as the Government of Poland entered
into obligations
vis-
à
-vis
Eureko with regard to the latter’s investments, and insofar
as the Tribunal found that the Respondent acted in breach of those obligations, it
stood,
prima facie,
in violation of Article 3.5 of the Treaty.
43
The plain or ‘ordinary
meaning’ of a provision prescribing that a State ‘shall observe any obligations it
may have entered into’ with regard to certain foreign investments is quite clear. The
35
Joy Mining
, ICSID Case No. ARB/03/11 at 81.
36
CMS Gas Transmission Co. v. Argentine Republic, Award, ICSID Case No. ARB/01/8 (2005), at 299-301.
37
Ibid
note 39 at 296.
38
Ibid
at 300.
39
Ibid
at 299.
40
Joy Mining Machinery Limited v. Arab Republic of Egypt
, ICSID Case No. ARB/03/11.
41
Consortium Groupement
L.E.S.
I.-
DIPENTA
v. République algérienne démocratique et populaire,
ICSID
Case No. ARB/03/08.
42
Ibid
in note 4.
43
Ibid
244 in note 4.