Environmental Engineering Reference
In-Depth Information
3.5.1.2.4.2 Context, Agreements, State Practice, International Law
and Historical Background
Besides the wording of the BIT, other facts support the assumption of a “broad”
umbrella clause as well. As mentioned above, ICSID tribunals have dealt with the
question of umbrella clauses for quite some time, and states repeatedly include
them in their BITs. Therefore, there is state practice concerning umbrella clauses.
Since there are different notions of umbrella clauses, which also been subject to
ICSID tribunals, state practice also involves knowledge of the effect of the clauses
'
setup. International law does not forbid the use of an umbrella clause. The ICSID
Convention itself is an example of “internationalizing” certain behaviors to secure
them by international law. Germany and Morocco have been subject to ICSID
tribunals before, so they have experience with the application of the umbrella
clause. Some cases mentioned above involved German companies like Siemens
and expressively dealt with the question and scope of an umbrella clause. The fact
that the most controversial decisions in
SGS v Pakistan
279
and
SGS v Philippines
280
took place in 2003 and 2004 indicates that Morocco and Germany were aware of the
effect of the umbrella clause and correct choice of words to conclude such a clause
prior to the entry into force of the G/M-BIT. In both cases the application and
possible consequences were subject to extensive discussion. Hence, it could be
argued that the intentions of both parties must be that Art. 11(1) of the G/M-BIT
includes a broad approach to the umbrella clause, which also encompasses contract
claims.
Overall, the G/M-BIT umbrella clause is broadly defined and covers the question
of contracts too, as long as they are with regard to the investment. Hence, contract
claims can be treated as treaty claims. In the case of the implementation of the
Desertec Concept, both contract parties should be aware of this fact. A possible
investment contract can be subject to the ICSID tribunals. If they do not want this
broad interpretation, they must include a special section within the state contract
which states that ICSID tribunals only have jurisdiction concerning BIT related
claims. However, this only serves as an indicator, as only Germany and Morocco
can conclude how to interpret this section. A unilateral expression is not sufficient
as both contracting parties previously agreed on the broad clause. In respect of the
Desertec Concept, this might have been beneficial for Dii as long as Morocco is part
of the contract at issue.
3.5.1.2.5 Evaluation of the Umbrella Clause
It is noteworthy that the umbrella clause is complicated. The main question is “how
far it reaches”. In respect of the Desertec Concept, it is irrelevant to discuss
279
ICSID [2003] ARB/01/13, 307.
280
ICSID [2004] ARB/02/6.
