Enabling Private Ordering - the University of Minnesota Law School

2009] UMBRELLA CLAUSES 91
clause in question permitting—that any commitment
independent of its legal basis can be covered by an umbrella
clause as long as it is of a specific and investment-related
character. In SGS v. Philippines, for example, the Tribunal
considered that commitments covered by the umbrella clauses
“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.” 255 Similarly, as the Annulment Committee in CMS v.
Argentina pointed out, the commitments covered by an umbrella
clause must constitute “specific obligations concerning the
investment. They do not cover general requirements imposed by
the law of the host State.” 256
The irrelevance of the legal basis of the commitment is also
confirmed by the Decision on Liability in LG&E v. Argentina,
where the Tribunal considered that a specific tariff regime
contained in the regulatory and legislative framework for the
Argentine gas distribution sector was covered by the umbrella
clause in the US-Argentine BIT. The Tribunal argued:
In order to determine the applicability of the umbrella clause, the
Tribunal should establish if by virtue of the provisions of the Gas Law
and its regulations, the Argentine State has assumed international
obligations with respect to LG&E and its investment. . . . Argentina
made these specific obligations to foreign investors, such as LG&E, by
enacting the Gas Law and other regulations, and then advertising
these guarantees in the Offering Memorandum to induce the entry of
foreign capital to fund the privatization program in its public service
sector. These laws and regulations became obligations within the
255. SGS v. Philippines, ICSID Case No. ARB/02/6, at para. 121; see also Enron
Corp. and Ponderosa Assets L.P. v. Argentine Republic, ICSID (W. Bank) Case No.
ARB/01/3, Award, paras. 274–76 (May 22, 2007); Siemens A.G. v. Argentine
Republic, ICSID (W. Bank) Case No. ARB/02/8, Award, para. 206 (Feb. 6, 2007);
Noble Ventures, Inc. v. Romania, ICSID (W. Bank) Case No. ARB/01/11, Award,
para. 51 (Oct. 12, 2005); Eureko, Partial Award, supra note 6, para. 246 (“‘Any’
obligation is capacious; it means not only obligations of a certain type, but ‘any’—
that is to say, all—obligations entered into with regard to investments of investors of
the other Contracting Party.”). Cf. SGS Société Générale de Surveillance S.A. v.
Islamic Republic of Pakistan, ICSID (W. Bank) Case No. ARB/01/13, Decision on
Objections to Jurisdiction, para. 166 (Aug. 6, 2003) (“The ‘commitments’ the
observance of which a Contracting Party is to ‘constantly guarantee’ are not limited
to contractual commitments. The commitments referred to may be embedded in, e.g.,
the municipal legislative or administrative or other unilateral measures of a
Contracting Party.”) (internal citation omitted).
256. Cf. Cont’l Cas. Co. v. Argentine Republic, ICSID (W. Bank) Case No.
ARB/03/9, Award, para. 297–302 (Sept. 5, 2008); CMS Gas Transmission Co. v.
Argentine Republic, ICSID (W. Bank) Case No. ARB/01/8, Decision on Annulment,
para. 95 (Sept. 25, 2007).