CYIL 2014

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.

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