| Summary/Abstract |
An umbrella clause contained in a bilateral investment treaty should be examined from a larger, systemic perspective, instead of a microscopic analysis of whether it enhances the level of protection for foreign investors. In particular, an umbrella clause does not exactly dovetail with some of the basic principles and jurisprudence of public international law. The adoption of an umbrella clause also renders the administration of investment treaties and investment dispute settlement proceedings more complex and difficult to manage. As such, blind adoption and application of an umbrella clause would cause continuing tension and widening rifts in the long run. Viewed from this perspective, the wisdom of having an umbrella clause should be carefully scrutinized from the structural point of view. This realization necessitates the creation of important guidelines for states and investment tribunals concerning the formulation, interpretation and application of an umbrella clause.
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