Executive Summary

Bilateral investment treaties and free trade agreements with investment chapters set out standards of protection for foreign investors. These standards relate to the treatment of foreign investments in the host state, including in the event of expropriation. They are common across many treaties; however, tribunals have not adopted a uniform interpretation of these standards. Both claimants and respondents to an investor-state dispute should be aware of the varied interpretation and trends in investment decisions. This chapter discusses expropriation and various other protections, including fair and equitable treatment, full protection and security, arbitrary impairment, and umbrella clauses. The next chapter deals with two other important protections, national treatment and most-favoured-nation treatment.

1.0 Introduction

International Investment Agreements (IIAs) — bilateral investment treaties for the promotion and protection of investments (BITs), and the investment chapters of some free trade agreements (FTAs), as well as the Energy Charter Treaty — contain several standards of treatment or protection that each contracting state has to extend to investors or investments of the other contracting state(s).

A Claimant in an investment dispute under an IIA must allege a violation of a standard discussed in this chapter or a violation of national treatment or most favoured- nation treatment discussed in Chapter 9.

Typical among the forms of protection that contracting states to an IIA offer foreign investors are guarantees that:

  • Expropriation may only take place if: (i) it is for a public purpose, (ii) it is carried outon non-discriminatory terms, (iii) due process is accorded, and (iv) the investor receives prompt, adequate and effective compensation;
  • The investor will be accorded fair and equitable treatment and full protection and security;
  • The state will not impair the management, use and enjoyment of the foreign investment by discriminatory, or unreasonable or arbitrary measures;
  • The state will observe any obligations entered into with respect to foreign investments (umbrella clauses); and
  • The state will accord foreign investors the same treatment that it accords to national investors or investors of other countries under certain conditions (national treatment and most-favoured-nation treatment). These standards are discussed in the next chapter.

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BITs and FTAs do not necessarily contain all of these provisions. For example, the Turkey-UAE BIT1 and the Comprehensive Economic Cooperation Agreement between India and Singapore2 do not contain fair and equitable treatment (FET) clauses. In addition, certain BITs and FTAs contain additional standards of protection, such as provisions prohibiting performance requirements (e.g., requiring use of local inputs) (see Chapter 2),3 and clauses requiring the state to provide investors with effective means of enforcing their rights.4

Investment arbitrations are brought under various treaties and agreements that tribunals interpret “in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”5 Therefore, it is important for claimants to recognise that different tribunals have interpreted these standards in different and sometimes inconsistent ways. For example, it is not settled whether the standards of treatment in a BIT or FTA are the same as or higher than the standards of treatment under customary international law, from which these standards are derived.

In addition to standards of treatment in BITs and FTAs, investors should also take into consideration the investment laws of the host country and the contract (if any) between the investor and the host government, which may offer additional protection to investors (see Chapters 2 and 7).

2.0 Expropriation

Expropriation is the taking by a government of private property or property rights. Customary international law, BITs and FTAs with investment provisions recognise the right of states to take property, but compensation is required.

Expropriation may be either direct or indirect:

  • Direct expropriation occurs where there has been a transfer of title or outright seizure of property or property rights by a government. For example, the revocation of mining concessions together with a decree handing over the concessions to the state has been found to be a direct expropriation.6
  • Indirect expropriation occurs where government measures (such as a regulation or cancellation of a licence) result in the substantial deprivation of ownership or the use and enjoyment of property. It does not however involve physical seizure or formal transfer of the property. One form of indirect expropriation is known as “creeping” expropriation, where an investor is gradually deprived of its enjoyment of the investment by a series of governmental measures.

Direct expropriations are usually easy to spot. Indirect expropriations are more difficult to identify.

Following customary international law, BITs place conditions on a state’s ability to expropriate, whether directly or indirectly. A typical provision is Article 1110 of the North American Free Trade Agreement (NAFTA), which permits expropriation only where it is:

  • For a public purpose;

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  • Non-discriminatory;
  • In accordance with due process of law and the minimum standard of treatment; and
  • On payment of compensation, which must be;
    - Equivalent to the fair market value of the investment;
    - Paid without delay; and
    - Fully realisable, i.e., in a convertible currency.

2.1 Has There Been an Expropriation?

As a first step in any claim for expropriation, an investor must establish that an expropriation has occurred. This task requires the investor to: (i) identify the property or property rights forming the investment that has or have allegedly been expropriated, (ii) identify the state measures that allegedly led to the expropriation of those rights, and (iii) prove that these measures substantially deprived it of its investment. A relatively insignificant adverse effect on the economic value of an investment is insufficient to establish an expropriation. Thus, the strengthening of an environmental law that reduces an investment’s economic value by 10% might not amount to an expropriation but, depending on the circumstances, if the revised environmental law were to reduce the value of the investment by 80% there might well be an expropriation.

There has been public concern that governments may be inhibited from passing important health and environmental regulations for fear of being held liable for damages in an investment arbitration. Nevertheless, there is considerable authority supporting the position that there is no expropriation when a state adopts a nondiscriminatory regulatory measure to protect a legitimate public welfare objective, such as public health, safety and the environment, so that no compensation will be due.9 States have begun to provide greater guidance on this issue in BITs. For example, the investment chapter of the Trans-Pacific Partnership Agreement (TPP) (from which the United States has withdrawn) lists factors to be considered in determining whether an action constitutes an indirect expropriation, such as the economic impact of the government action, the extent to which such an action interferes with “distinct, reasonable investment-backed expectations” and the character of the government action.10 In an effort to allay the above concerns, the chapter states that nondiscriminatory regulatory action taken for legitimate public welfare objectives “do not constitute indirect expropriations, except in rare circumstances.”11 The investment chapter of the Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR) contains a similar provision.12 The Transatlantic Trade and Investment Partnership (TTIP) would, if ever ratified, be likely to follow suit.13

Claimants should consider the following questions in order to decide whether to bring a claim for indirect expropriation:

  • Does the investor still have title or control over the investment?
  • Has there been a substantial deprivation of the investment?
  • Do the new regulations have a legitimate public policy purpose and are they non-discriminatory?

2.2 Requirements of a Lawful Expropriation

As noted above, BITs generally provide that, for an expropriation to be lawful, the state must carry it out in a non-discriminatory fashion, for a public purpose (for example, for a reason related to the internal needs of the host state), in accordance with due process, and with prompt, effective, and adequate compensation. As the value of an investment is likely to decrease after the expropriation becomes public knowledge, BITs usually require compensation to be equal to the fair market value of the investment immediately before the expropriation or before the expropriation became publicly known, whichever is earlier (see Chapter 23).

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When an expropriation violates the principles of public purpose, non-discrimination or due process, it is unlawful. However, the case law is not consistent concerning the lawfulness of an expropriation that meets these principles except for payment of compensation. In some cases, such as Tidewater v Venezuela (see below), tribunals have held that the failure to provide compensation, by itself, does not make the expropriation unlawful, and that their task is to set the level of compensation. Other tribunals have however reached the opposite conclusion.

In expropriation cases compensation may differ depending on whether the tribunal determines that the expropriation is lawful or unlawful. The compensation in the case of a lawful expropriation is the value of the investment immediately before the expropriation, or before the intent to expropriate becomes publicly known. In the case of unlawful expropriations, some tribunals have awarded damages based on the value of the investment immediately before the expropriation. Others have based damages based on the value of the investment at the time of the award, which could be significantly higher (see Chapter 23).

3.0 Fair and Equitable Treatment

Due to its vagueness and potential breadth, fair and equitable treatment (FET) is the most invoked provision in investment treaty arbitration.17 Commentators and tribunals are split as to its meaning. Some argue that this standard simply represents the minimum standard of treatment under customary international law, and does not add to it.18 Others assert that the FET provision represents an autonomous standard, requiring treatment above that required under customary international law.19

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Claimants should be aware that even though treaties link fair and equitable treatment and full protection and security to the minimum standard of treatment, there is debate as to the content of that standard.22

FET protects investors against arbitrary and unreasonable conduct of a host state, as well as egregious denials of due process by the courts of the state. Some commentators and tribunals contend that FET protects an investor’s legitimate expectations.23 In other words, if a state frustrates such expectations it may be held responsible for breaching FET. There is no consensus as to how legitimate expectations are created. Investors naturally prefer to expand the scope of FET and argue that even a promise made by a low-level official about the treatment of their investment could create protected expectations under a BIT. Others note that the FET standard does not specifically refer to an investor’s legitimate expectations, and at most only protects specific commitments given to investors (such as stabilisation clauses in a contract).24 Note that a change in a host state law does not, per se, constitute frustration of legitimate expectations.

Regardless of the standard adopted, the threshold for finding an FET breach is high. The examples below illustrate how the FET standard has been interpreted and applied by various tribunals.

Thunderbird v Mexico demonstrates how NAFTA tribunals have interpreted the FET standard. Claimants in NAFTA proceedings will need to meet a high threshold in order to establish a violation of Article 1105 of NAFTA.

Charanne v Spain demonstrates that tribunals will give weight to whether a specific commitment has been made by the host state to an investor in a particular dispute.

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Suez v Argentina reflects the debate as to whether the concept of legitimate expectations is included in the FET standard. The lack of consensus regarding the FET standard has created tension in the investor-state arbitration system. A tribunal’s analysis of the FET standard depends on the facts of each case, and parties often argue as to whether the host state made a specific commitment to the investor.

Investors should be aware that due to the different and sometimes very broad interpretation by tribunals of the FET standard, states are restricting the interpretation of this standard. For example, the NAFTA parties issued an interpretative note stating that the concepts of FET and FPS “do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.”35

Recent treaties and model BITs usually contain language indicating that the FET standard equates to the minimum standard or identifying the types of measures that may breach the FET obligation. For example, the EU-Vietnam FTA lists measures that constitute a breach of the FET standard, including denial of justice in criminal, civil or administrative proceedings, fundamental breach of due process, manifest arbitrariness, targeted discrimination on manifestly wrongful grounds, and abusive treatment.36 The CAFTA-DR37 and the TPP38 both clarify that FET includes the obligation not to deny justice in criminal, civil or administrative proceedings.

4.0 Full Protection and Security

The obligation of full protection and security requires a government to provide reasonable physical security and police protection to investors and investments. Tribunals measure this standard against the concept of “due diligence,” which requires the state to take all necessary measures, based on the circumstances, to protect the physical security and property of a foreign investor. In recent years, foreign investors have also argued that FPS extends to legal protection, such as maintaining a secure investment environment,39 but this view is contentious.

Claimants should note that very few tribunals have found that a state has breached the FPS obligation, and that many tribunals have subsumed the analysis of this standard into their FET analysis.

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In response to decisions of some tribunals extending FPS to legal protection, states have begun to include language in model BITs and treaties limiting the standard to physical protection. For example, the Indian Model BIT states that FPS “only refers to a Party’s obligations relating to physical security of investors and to investments made by the investors of the other Party and not to any other obligation whatsoever.”43

5.0 Arbitrary Impairment

Some BITs provide that a host state shall not impair an investment by discriminatory, arbitrary or unreasonable measures. Tribunals have recognised that the terms “unreasonable” and “arbitrary” are interchangeable. Tribunals often adopt the definition of arbitrariness proposed by the International Court of Justice in the ELSI case — a “wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of juridical propriety.”44 The standard for finding discrimination is: capricious, irrational or absurd differentiation in the treatment accorded to investors as compared to other similar entities. Commentators and tribunals have noted that there is an overlap between the non-impairment and FET standards.45

Investors should note that, in assessing whether state measures are discriminatory or arbitrary, tribunals accord states a degree of deference. AES Hungary is a case in point. Many tribunals have commented that it is not their role to second-guess government conduct.

Claims for breaches of FET, FPS and non-impairment by discriminatory, or arbitrary or unreasonable measures are fact-driven. Investors often use the same set of facts to allege that a host state breached each of these obligations. Commentators and tribunals have noted that there is a degree of overlap between FET, FPS and nonimpairment by discriminatory, or arbitrary or unreasonable measures, but also that investors must separately prove a breach of each of these standards.

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6.0 Umbrella Clauses

Some bilateral investment treaties contain an undertaking by the state that it will observe commitments, including contractual commitments, made to foreign investors. These provisions are known as “umbrella clauses.” For example, Article 2(2) of the United Kingdom-Oman BIT48 states: “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 significance of umbrella clauses is that they may allow an investor with a contractual claim against the host government to “elevate” it to an international dispute, in order to take advantage of the dispute resolution mechanism in the BIT/FTA, as opposed to recourse to domestic tribunals.

Tribunals have interpreted umbrella clauses in different ways.49 Regardless of the interpretation adopted, there are two issues that investors should keep in mind when contemplating an arbitration that includes an umbrella clause claim:

  • First, where a contract at the centre of a BIT dispute contains an exclusive dispute resolution clause and the investor complains about breaches of the contract, several tribunals have held that the investor must pursue the dispute in the forum specified in the contract.50
  • Second, there is debate about the types of state measures that can breach an umbrella clause. According to one line of cases, a state breaches an umbrella clause only through measures taken in its sovereign capacity.51 When a state acts as a commercial party, its conduct cannot amount to a breach of an umbrella clause. Other tribunals have taken the opposite view, ruling that it is immaterial whether a state took measures in its sovereign or commercial capacity. They have instead focused on whether a state entered into any contractual commitment with the investor.52

In light of these different interpretative approaches, some states have moved to restrict the scope of umbrella clauses, including omitting umbrella clauses altogether.53 Another response has been to exclude the applicability of ISDS mechanisms to claims arising out of an umbrella clause.54

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Notes

1
1. Agreement between the Republic of Turkey and United Arab Emirates concerning the Reciprocal Promotion and Protection of Investments, entered into force on 24 July 2011, http://investmentpolicyhub.unctad.org/IIA

2
2. Comprehensive Economic Cooperation Agreement between the Republic of India and the Republic of Singapore, entered into force on 1 August 2005, http://investmentpolicyhub.unctad.org/IIA.

3
3. See, e.g., North American Free Trade Agreement, entered into force on 1 January 1994 (NAFTA), Article 1106 (Performance Requirements), https://www.nafta-sec-alena.org.

4
4. See, e.g., Treaty between the United States of America and the Republic of Turkey concerning the Reciprocal Encouragement and Protection of Investments, entered into force 18 May 1990, Article II(8); Protocol on Agreement between the Government of the Italian Republic and the Government of the Republic of Kenya on the Promotion and Protection of Investments, entered into force

5
5. Vienna Convention on the Law of Treaties, entered into force on 27 January 1980, Article 31, https://treaties.un.org.

6
6. Quiborax S.A. and Non Metallic Minerals S.A. v Plurinational State of Bolivia, ICSID Case No. ARB/06/2, Award, 16 September 2015.

7
7. Metalclad Corporation v The United Mexican States, ICSID Case ARB(AF)/97/1, Award, 30 August 2000.

8
8. Accession Mezzanine Capital L.P. and Danubius Kereskedohaz Vagyonkezelo Zrt. v The Republic of Hungary, ICSID Case No. ARB/12/3, Award, 17 April 2015.

9
9. This problem hindered negotiation of the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union which contains a BIT-type investment chapter. At the time of writing (Spring 2018), TTIP appeared to be dead.

10
10. Trans-Pacific Partnership Agreement, signed on 4 February 2016 (TPP), Annex 9-B of Chapter 9, https://ustr.gov/sites/default/files/TPP-Final-Text-Investment.pdf. The successor agreement, after the US withdrawal from the TPP, is known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

11
11. TPP, Annex 9-B(3)(b) of Chapter 9.

12
12. The Dominican Republic–Central America–United States Free Trade Agreement, entered into force on 1 January 2009 (CAFTA-DR), Annex 10.C of Chapter 10, https://ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta/final-text.

13
13. See, e.g., European Commission, Draft Text of the Transatlantic Trade and Investment Partnership — Trade in Services, Investment and E-Commerce, Chapter II — Investment as of 14 July 2016, Annex I, Section 3, http://ec.europa.eu/trade/policy/in-focus/ttip/.

14
14. ADC Affiliate Limited and ADC & ADMC Management Limited v The Republic of Hungary, ICSID Case No. ARB/03/16, Award of the Tribunal, 2 October 2006.

15
15. Tidewater Investment SRL and Tidewater Caribe C.A. v The Bolivarian Republic of Venezuela, ICSID Case No. ARB/10/5, Award, 13 March 2015.

16
16. Agreement between the Government of Barbados and the Government of the Republic of Venezuela for the Promotion and Protection of Investments, entered into force on 31 October 1995, Article 5(1), http://investmentpolicyhub.unctad.org/IIA.

17
17. According to UNCTAD, through 2016 almost 400 arbitration claims and almost 100 awards had been based on FET. See http://investmentpolicyhub.unctad.org/ISDS/FilterByBreaches.

18
18. See, e.g., Genin, Eastern Credit Limited, Inc. and A.S. Baltoil v Republic of Estonia, ICSID Case No. ARB/99/2, Award, 25 June 2001, para. 367.

19
19. See, e.g., Azurix Corp. v Argentine Republic, ICSID CASE No. ARB/01/12, Award, 14 July 2006, para. 361.

20
20. Neer and Neer (U.S.A.) v Mexico, General Claims Commission — United States and Mexico, Docket No. 136, Opinion dated October 15, 1926, 21 American Journal of International Law 555 (1927), p. 556.

21
21. For example: Article 2(a) of the United States-Argentina BIT, which states in relevant part: Investment shall at all times be accorded fair and equitable treatment, shall enjoy full protection and security and shall in no case be accorded treatment less than that required by international law.
Article 10.5 of the CAFTA-DR, which states in relevant part:
(1) Each P arty shall accord to covered investments treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.
(2) For greater certainty, paragraph 1 prescribes the customary international la w minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights.

22
22. SeeJeremy K. Sharpe, “The Minimum Standard of Treatment, Glamis Gold, and Neer’s Enduring Influence” in Building International Investment Law 269 (Meg Kinnear et al., (eds), ICSID and Wolters Kluwer 2015), p. 279.

23
23. See, e.g., Técnicas Medioambientales Tecmed S.A. v United Mexican States, ICSID Case No. ARB(AF)/00/2, Award dated

24
24. Stabilisation clauses are sometimes found in contracts between host states and foreign investors and provide that the host state will not alter the regulatory framework governing the investment, which is in place at the time of the contract, except pursuant to the conditions specified in the contract.

25
25. International Thunderbird Gaming Corporation v The United Mexican States, UNCITRAL, Award, 26 January 2006.

26
26. Charanne B.V. and Construction Investments S.A.R.L. v The Kingdom of Spain, Arbitration No. 062/2012, Award, 21 January 2016.

27
27. Energy Charter Treaty, entered into force on 16 April 1998, http://www.energycharter.org/. Article 10 states, in relevant part: “Each Contracting Party shall, in accordance with the provisions of this Treaty, encourage and create stable, equitable, favourable and transparent conditions for Investors of other Contracting Parties to make Investments in its Area. Such conditions shall include a commitment to accord at all times to Investments of Investors of other Contracting Parties fair and equitable treatment.”

28
28. The dissenting arbitrator stated that legitimate expectations were not limited to where there was a specific commitment, but could also be based on the legal system in force at the time of the investment. He found that once the claimants made the investment and complied with the requirements governing the grant of their expected benefit, the host state could modify its regulatory framework but had to compensate the claimants for damage caused. Charanne B.V. and Construction Investments S.A.R.L. v The Kingdom of Spain, Arbitration No. 062/2012, Dissenting Opinion of Guido Santiago Tawil dated 21 December 2015.

29
29. Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v The Argentine Republic, ICSID Case No. ARB/03/19, Decision on Liability, 30 July 2010.

30
30. Agreement between the Argentine Republic and the Republic of France for the Promotion and Reciprocal Protection of Investments, entered into force on 3 March 1993, Articles 3, 5, http://investmentpolicyhub.unctad.org/IIA

31
31. Agreement on the Promotion and Reciprocal Protection of Investments between the Kingdom of Spain and the Argentine Republic, entered into force on 28 September 1992, Article IV(1), http://investmentpolicyhub.unctad.org/IIA.

32
32. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Argentina for the Promotion and Protection of Investments, entered into force on 19 February 1993,Article 2(2), http://investmentpolicyhub.unctad.org/IIA.

33
33. Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v The Argentine Republic, ICSID Case No. ARB/03/19, Decision on Liability, 30 July 2010, para. 226.

34
34. Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v The Argentine Republic, ICSID Case No. ARB/03/19, Separate Opinion of Pedro Nikken, 30 July 2010.

35
35. Notes of Interpretation of Certain Chapter 11 Provisions (NAFTA Free Trade Commission, July 31, 2001).

36
36. EU-Vietnam Free Trade Agreement, Agreed text as of January 2016, Chapter 8 — Chapter II, Article 14(2), http:// trade.ec.europa.eu/.

37
37. CAFTA-DR, Article 10.5(2)(a) of Chapter 10.

38
38. TPP, Article 9.6(2)(a) of Chapter 9.

39
39. Azurix Corp. v Argentine Republic, ICSID Case No. ARB/01/12, Award, 14 July 2006, para. 408.

40
40. Bernhard von Pezold and Others v Republic of Zimbabwe, ICSID Case No. ARB/10/15, Award, 28 July 2015.

41
41. Agreement between the Republic of Zimbabwe and the Federal Republic of Germany concerning the Encouragement and Reciprocal Protection of Investments, entered into force on 14 April 2000, Article 4(1), http://investmentpolicyhub.unctad.org/IIA.

42
42. Agreement between the Swiss Confederation and the Republic of Zimbabwe concerning the Promotion and Reciprocal Protection of Investments, entered into force on 9 February 2011, Article 4, http://investmentpolicyhub.unctad.org/. IIA.

43
43. Model Text for the Indian Bilateral Investment Treaty as at 28 December 2015 http://finmin.nic.in/.

44
44. Elettronica Sicula S.p.A. (ELSI) Case (United States v Italy), International Court of Justice, Judgment, 20 July 1989, I.C.J. Reports 15 (1989), para. 128.

45
45. See, e.g., Impregilo S.p.A. v Argentine Republic, ICSID Case No. ARB/07/17, Award, 21 June 2011, para.333; Vaughan Lowe, “Arbitrary and Discriminatory Treatment” in Building International Investment Law p. 307.

46
46. AES Summit Generation Limited and AES-Tisza Erömü Kft. v The Republic of Hungary, ICSID Case No. ARB/07/22, Award, 23 September 2010.

47
47. However, it found that two other justifications advanced by Hungary were not valid. One was the failure of power generators, such as the investor, to agree to price reductions to free up electricity for direct sale to the parallel free market. According to the Tribunal, it was not reasonable for a state to use its power to force a party to change or give up its contractual rights. The second justification was compliance with European law, but this had not yet crystallised and so it could not provide a justification for the measure.

48
48. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Sultanate of Oman for the Promotion and Protection of Investments, entered into force on 21 May 1996, http://investmentpolicyhub.unctad.org/IIA.

49
49. There are two principal interpretative approaches. According to one line of interpretation, adopted in SGS v Pakistan, an umbrella clause does not have the effect of automatically transforming any breach of contract into a treaty breach. According to the other line of interpretation, adopted in SGS v Philippines, the clause could bring specific obligations entered into by a host state with respect to a particular investor within the framework of the BIT; however, it does not affect the proper law of the contract, including dispute settlement provisions. SGS Société Générale de Surveillance S.A. v Islamic Republic of Pakistan, ICSID Case No. ARB/01/13, Decision on Objections to Jurisdiction, 6 August 2003; SGS Société Générale de Surveillance S.A. v Republic of Philippines, ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction, 29 January 2004.

50
50. SGS Société Générale de Surveillance S.A. v Republic of Philippines, ICSID Case No. ARB/02/6, Decision of the Tribunal on Objections to Jurisdiction, 29 January 2004 ; Bureau Veritas, Inspection, Valuation, Assessment and Control, BIVAC B.V. v The Republic of Paraguay, ICSID Case No. ARB/07/9, Decision of the Tribunal on Objections of Jurisdiction, 29 May 2009, and Further Decision on Objections to Jurisdiction, 9 October 2012.

51
51. See, e.g., El Paso Energy International Co. v Argentine Republic, ICSID Case No. ARB/03/15, Decision on Jurisdiction, 27 April 2006, paras. 79-82; Sempra Energy International v Argentine Republic, ICSID Case No. ARB/02/16, Award, 28 September 28, 2007, para. 310.

52
52. For example, in SGS v Paraguay, the Tribunal considered that it was required to decide claims under an umbrella clause notwithstanding the existence of a forum selection clause in the contract. The umbrella clause referred to the “observance of commitments” entered into by the state, and the Tribunal commented that the clause did not limit the nature of such commitments — that is, it covered ordinary breaches of contract, not just “abuses of state power.” See SGS Société Générale de Surveillance S.A. v The Republic of Paraguay, ICSID Case No. ARB/07/29, Award, 10 February 2012.

53
53. UNCTAD, Policy Options for IIA Reform: Treaty Examples and Data — Supplementary Material to World Investment Report 2015.

54
54. See, e.g., the Agreement between the Republic of Colombia and the Swiss Confederation on the Promotion and Reciprocal Protection of Investments, entered into force on 6 October 2009, http://investmentpolicyhub.unctad.org/IIA, Article 11(3) (“Each Party hereby gives its unconditional and irrevocable consent to the submission of an investment dispute to international arbitration … except for disputes with regard to Article 10 paragraph 2 of this Agreement [an umbrella clause].”)

55
55. Gustav F W Hamester GmbH & Co KG v Republic of Ghana, ICSID Case No. ARB/07/24, Award, 18 June 2010.

56
56. Eureko B.V. v Republic of Poland, UNCITRAL, Partial Award, 19 August 2005.

57
57. Agreement between the Kingdom of The Netherlands and the Republic of Poland on Encouragement and Reciprocal Protection of Investments, entered into force on 1 February 1994, Article 3(5), http://investmentpolicyhub.unctad.org/IIA.