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Investor Presentaiton

165 otherwise fall within the scope of the IIA. An umbrella clause requires a host State to respect any obligation assumed by it with regard to a specific investment (for example, in an investment contract). The clause thus brings contractual and other individual obligations of the host State under the “umbrella" of the IIA, making them potentially enforceable through ISDS. Article 11 of the BIT between Pakistan and Switzerland (1995) is illustrative: "Either Contracting Party shall constantly guarantee the observance of the commitments it has entered into with respect to the investments of the investors of the other Contracting Party." 1. Varying interpretations The meaning and application of these clauses have been subject to significant controversy. The clauses have the potential to bring within the ambit of the treaty disputes relating to any undertaking a State has made towards an investor, including a contractual obligation, a legislative provision, or an offering circular. The last decade of ISDS jurisprudence has not been consistent regarding the significance and effects of umbrella clauses. While most arbitral tribunals have agreed that umbrella clauses have the potential to bring contract-based claims within the ambit of treaty-based arbitration, other tribunals have rejected the argument that umbrella clauses have the effect of elevating breaches of contract to a violation of the applicable IIA. 203 According to one approach, an umbrella clause will elevate a State's breach of contract to a violation of an IIA, thus enabling 203 For a survey of the varied approaches tribunals have taken towards umbrella clauses, see UNCTAD, 2007a, pp. 28-30; Sinclair, 2009, p. 275; UNCTAD, 2013a, pp. 16-17. UNCTAD Series on International Investment Agreements II
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