The Protection Offered by “Umbrella Clauses”in Korean Investment Treaties*

Korea is, after China, the Asian country with the largest number of concluded investment treaties. One of the protections that Korean investment treaties frequently afford to foreign investors and their investment is the so?called “umbrella clause,” which requires the host state of the investment to observe the commitments that it has undertaken toward the foreign investor or its investment. This is a potentially very powerful protection. Umbrella clauses, however, have proven to be amongst the most controversial provisions in investment treaties, giving rise to diverging interpretations by tribunals and commentators that are still not reconciled today.