Enabling Private Ordering - the University of Minnesota Law School

64 MINNESOTA JOURNAL OF INT’L LAW [Vol. 18:1
binding exclusive jurisdiction clause in a contract should be
respected, unless overridden by another valid provision.” 169 It
considered that “the BIT did not purport to override the
exclusive jurisdiction clause in the [investor-State contract], or
to give SGS an alternative route for the resolution of contractual
claims which it was bound to submit to the Philippine courts
under that Agreement.” 170 As a consequence, the Tribunal in
SGS v. Philippines decided to stay the treaty-based proceedings
in view of the proceedings that were already pending in
Philippine courts. It thus gave effect to the premise that a
breach of the umbrella clause would require that a breach of the
underlying investor-State contract was not remedied in
accordance with the dispute settlement mechanism the parties
chose.
The majority of tribunals, by contrast, take the opposite
approach and view, like the dissenting opinion in SGS v.
Philippines, the host State’s consent to arbitration under the
BIT as a forum that can be seized alternatively to any
contractually selected forum. 171 In Eureko v. Poland, for
example, the Tribunal accepted its jurisdiction based on an
umbrella clause for a dispute about the breach of an investor-
State agreement relating to the privatization of a State-owned
insurance company, although the agreement contained a forum
selection clause in favor of Polish courts. The Tribunal reasoned
that since the violation of an umbrella clause constituted a
treaty-based cause of action, the contractual forum selection
could not exclude treaty-based arbitration. 172 In its support, the
Tribunal relied on the settled arbitral jurisprudence that
contractual forum selection clauses could not derogate from the
jurisdiction of treaty-based tribunals for claims based on the
breach of treaty. 173 Unlike in SGS v. Philippines, the contractual
169. SGS v. Philippines, ICSID Case No. ARB/02/6, at para. 138. See generally
id. paras. 136–55.
170. Id. para. 143; see also id. para. 141 (explaining that a “framework treaty,
intended by the States Parties to support and supplement, not to override or replace,
the actually negotiated investment arrangements made between the investor and
the host State”).
171. Id. paras. 4–5 (Crivellaro, dissenting).
172. Eureko, supra note 6, paras. 92–114, 250.
173. See Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of
Pakistan, ICSID (W. Bank) Case No. ARB/03/29, Decision on Jurisdiction, paras.
264–73 (Nov. 14, 2005); Impregilo S.p.A. v. Islamic Republic of Pakistan, ICSID (W.
Bank) Case No. ARB/02/17, Decision on Jurisdiction, para. 286–90 (Apr. 22, 2005);
SGS v. Pakistan, ICSID Case No. ARB/01/13, at para. 161; Compañia de Aguas del
Aconquija, S.A. and Vivendi Universal v. Argentine Republic, ICSID (W. Bank) Case