CYIL 2014

418

VOJTĚCH TRAPL

CYIL 5 ȍ2014Ȏ

the United States of America in Morocco

Therefore, it is clear that it is not the role

of an international court to interpret, revise, or read into treaties that which they do

not contain, either expressly or by implication, and that the terms of a treaty must

always be adhered to, for the simple reason that a treaty expresses the mutual will of

the Contracting States. If this is the duty of an international court when interpreting

a legal text, then the duty of an international arbitral tribunal must be the same.

Thus, if the relevant words make sense in their context, then the matter is resolved.

The legal regime of the investment agreement itself (the commercial investment

contract) leads to the conclusion that the rights and obligations favor and oblige only

the parties to the contract, and not any third party, including the State, provided

that it is not a party to the contract, while in general the host sate does have certainly

the duty to promote and protect any foreign investment and refrain from harming

it. However, any (private) investment agreement (commercial investment contract)

cannot replace the BIT, and the BIT can hardly replace an investment agreement.

Obviously it can be true that whether or not the investment is protected by the

basic provisions of the investment agreement obviously depends upon whether the

host country will provide for any additional protection under the umbrella clause in

the case there is a breach of the duty of the host country emerging from the umbrella

clause on one hand and from the BIT on the other hand. The central point is that

the investment agreement (private commercial contract) is made either between

a natural person or a legal entity of a foreign country and a natural person or legal

entity of the host State, or by the host State as a party to the contract in its quality

as a private entity. Should the host State have this quality, being acting as a private

entity, it could be responsible for the breach of the investment agreement against the

investor, but only if there is an international wrongful act attributable to the Host

State and as a sovereign agreed upon by the umbrella clause.

Any behavior of states that is punishable by investment protection agreements

given by a BIT must be both attributable and internationally unlawful. Literature

and practice can confirm that a breach of municipal law by the state does not

commonly amount to a breach of international law. The liability should arise only

through an internationally attributable act, as noted above. Only if the breach is

qualified (i.e., if the behavior and acts of a state are for instance arbitrary) then there

remains the question whether any responsibility emerges from the umbrella clause.

For instance, the umbrella clause under the Energy Charter Treaty obliges that “

Each

Contracting Party shall observe any obligations it has entered into with an Investor or an

Investment of an Investor of any other Contracting Party

–

”

without any other wording

as to the consequences of a possible breach either by a breach of “obligation” or

“commitment” concerns.

Given that the umbrella clause is exclusively a particular rule of international law

and not a generally accepted principle or customary rule of basic international law,

Case concerning Rights of Nationals of the United States of America in Morocco

, ICJ Reports, 1952, p. 196.

Wintershall AG v. Argentina,

ICSID case No. ARB/04/14, par. 84.