Title: How to interpret umbrella clauses in bilateral investment treaties: different perspectives and solutions

Authors: Aslı Bayata Canyaş

Addresses: Department of Private International Law, Faculty of Law, Hacettepe University, Ankara, Turkey

Abstract: Umbrella clauses in bilateral investment treaties (BITs) can be named in various ways with differing scopes and effects depending on their texts. It is debatable whether a host state can be held liable based on an umbrella clause in a BIT if it breaches an investment commitment arising from the investment contract. There are two mainstream opinions in this debate: the restrictive and broad approaches. In our opinion, a case-specific approach should be adopted. In each case, the tribunal should act in conformity with the principle of competence-competence. During this analysis, the use of the general rule of interpretation (Art. 31) in the Vienna Convention on the Law of Treaties (VCLT) should be considered.

Keywords: investment; arbitration; umbrella clauses; parallel effect; bilateral investment treaties; BITs; investment contracts.

DOI: 10.1504/IJPLAP.2023.134278

International Journal of Public Law and Policy, 2023 Vol.9 No.4, pp.418 - 431

Received: 16 Oct 2021
Accepted: 05 Jul 2022
Published online: 17 Oct 2023 *

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