Enabling Private Ordering - the University of Minnesota Law School
Enabling Private Ordering - the University of Minnesota Law School
Enabling Private Ordering - the University of Minnesota Law School
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2009] UMBRELLA CLAUSES 3<br />
TABLE OF CONTENTS<br />
I.INTRODUCTION: “SPIRITS THAT I’VE CITED – MY<br />
COMMANDS IGNORE . . .”? ................................................... 4<br />
II.THE DUALIST FRAMEWORK’S LIMITATIONS TO<br />
EFFICIENT INVESTOR-STATE CONTRACTING ............. 13<br />
A. EFFICIENT COOPERATION, CREDIBLE<br />
COMMITMENTS, AND THE ENFORCEMENT OF HOST<br />
STATE PROMISES ......................................................... 18<br />
B. STATE SOVEREIGNTY AND SHORTCOMINGS IN THE<br />
ENFORCEMENT OF HOST STATE PROMISES ................. 20<br />
1. Enforcement <strong>of</strong> Host State Promises in<br />
Domestic Courts .................................................... 21<br />
2. Limited Protection <strong>of</strong> Investor-State Contracts<br />
under Customary International <strong>Law</strong> .................... 23<br />
3. Insufficiencies <strong>of</strong> Alternative Investment<br />
Protection under Investor-State Agreements ........ 28<br />
C. THE LIMITED PROTECTION OF INVESTOR-STATE<br />
CONTRACTS UNDER INVESTMENT TREATIES ................ 30<br />
III.UMBRELLA CLAUSES AS AN ENFORCEMENT<br />
MECHANISM FOR HOST STATE PROMISES ................... 35<br />
A. BREACHES OF A SOVEREIGN NATURE VERSUS<br />
COMMERCIAL BREACHES ............................................. 36<br />
B. DISSOLUTIONS OF THE DUALIST FRAMEWORK IN<br />
INTERNATIONAL DISPUTE RESOLUTION ...................... 47<br />
1. Contract Claims in Classical Inter-State<br />
Dispute Settlement ................................................ 47<br />
2. Broadly Worded Arbitration Clauses in<br />
Investment Treaties ............................................... 52<br />
C. THE HISTORICAL PERSPECTIVE ON UMBRELLA<br />
CLAUSES ...................................................................... 54<br />
IV.THE EFFECT OF UMBRELLA CLAUSES ON INVESTOR-<br />
STATE RELATIONS .............................................................. 58<br />
A. UMBRELLA CLAUSES AND APPLICABLE LAW ............... 59<br />
B. UMBRELLA CLAUSES AND FORUM SELECTION<br />
CLAUSES ...................................................................... 63<br />
C. OPPORTUNISTIC HOST STATE BEHAVIOR VERSUS<br />
CONTINGENCIES .......................................................... 70<br />
D. REGULATION AND TERMINATION OF INVESTOR-<br />
STATE CONTRACTS ....................................................... 75<br />
1. The State’s Power to Interfere with Investor-<br />
State Contracts under Customary<br />
International <strong>Law</strong> ................................................. 76<br />
2. The State’s Power to Interfere with State
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