Umbrella clauses: Uncertain contract protection under IIAS

Abstract

Umbrella clauses were designed to allow disputes over breach of contracts to be settled by an arbitration tribunal. However as the jurisprudence on the matter has evolved, investors cannot be certain on whether their claim based on such clauses will stand. Certainty of the application of law is essential on investment law; therefore it is indispensable that a iurisprudentia constante is reached so that investors can be sure whether they will be able to rely on them or not. Alternatively, if uniformity of interpretation is not reached, States should decide whether such clauses should be included or removed from BITs.