Until very recently, issues relating to umbrella clauses were unknown in jurisprudence: only scholars had dealt with such matter, and the arbitral tribunal that first examined an umbrella clause, unaware of its effects, considered it completely meaningless. This scenario changed after the SGS/Pakistan and SGS/Philippines cases. Both tribunals, after relying on a deep examination of umbrella clauses, came to opposite conclusions: according to the SGS/Pakistan decision, umbrella clauses must be interpreted in a narrow way; on the contrary, the SGS/Philippines decision, contesting the opposite view, stated that such clauses must be interpreted in a broad way. As the two above approaches still today continue to be debated, the matter of umbrella clauses has turned into one of the most contentious in the field of international investment law.
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