NEWSLETTER-2017

198 NEWSLETTER 2017 cover those disputes related to the investment agreements or contracts in which states are involved as a sovereign, rather than as a commercial contractor 16 . Hence, these decisions clarified the view of limiting the scope of the obligations arising from umbrella clauses in investment agreements, unless the state has acted within its sovereign capacity. The Status of Umbrella Clauses before Unilateral Acts of the States Another debated issue in relation to umbrella clauses is whether they are protective or not before unilateral acts, such as legislation of the states. It is often concluded that the scope of umbrella clauses are not limited merely on the contractual obligations of the host states, and cover the obligations rising from legislative and executive acts, even- tually 17 . In LG v. Argentina 18 , the Tribunal concluded that by enacting the Gas Law and other regulations, Argentina gave rise to its liability under the umbrella clause 19 . The Privity of Contract Claims against Umbrella Clauses The attribution of state entities’, governmental agencies’ and territorial subdivision’ acts towards states is another debated point in relation to umbrella clauses. Correspondingly, it is argued by some that the legal entities of investors shall not be protected under umbrella clauses due to the privity of contract principle. In Noble Ventures v. Romania 20 , the Tribunal ruled that even if the contract was concluded among the Claimant and the Romanian State Ownership Fund, which is its own legal entity, the umbrella clause shall be applicable to the contract since the Romanian Government 16 Dolzer / Schreuer, p. 173. 17 Dolzer / Schreuer, p. 177. 18 LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Ar- gentine Republic, Decision on Liability, ICSID Case No. ARB/02/1, available at: https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/ 02/1. 19 LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Ar- gentine Republic, par. 175. 20 Noble Ventures, Inc. v. Romania, par. 82.