The Promotion and Protection of German Foreign Investment Abroad

The Importance of Foreign Direct Investments and Instruments for their Protection

“…Such treaties for example facilitate entry of investment by inducing other states to remove impediments in their 26 Dixon (2002) 25. 27 Guzman (1998) 642, Karl (1996) regulatory system, help investors to gain market and improve political climate between states. 31 Another very important argument for, or advantage of the new generation of bilateral investment treaties, is that they offer a binding mechanism resolving investment disputes, or an important practical implications of such treaties is that their existence is usually condition for obtaining insurance against taking in the home country of the investor.…”

The Public—Private Distinction in the International Arbitration of Individual Claims against the State

“…On this interpretation, an umbrella clause transforms a breach of contract by the State into an outright violation of the treaty. 73 Umbrella clauses put investment treaties into a potentially precarious position relative to domestic legal orders because they provide an additional avenue by which private parties can seek redress for alleged breaches of contract by a State. Since the umbrella clause is subject to dispute settlement under the treaty it may enable an investor to bring a treaty claim alongside the causes of action available under the contract.…”