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Stabilisation ("freezing") clauses have been amply discussed by international lawyers in the 1970s and early 1980s. Large-scale nationalisations and renegotiations of investment agreements of long standing led to a series of arbitral awards judging the relative strength of stabilisation clauses in investment agreements as compared with the rights of the host State. By the end of the 1970s stabilisation clauses seemed to be diminishing in scope and frequency. However, recent changes in the attitude towards private and foreign investment have led to a re-evaluation of stabilisation clauses. They have themselves evolved greatly over the past ten to twenty years. This paper summarises contractual practice and appraises the functional value and implication of modern stabilisation commitments, focussing not only on the traditional international law perspective but incorporating methods of interpretation of international economic contracts. Has the issue been viewed as a problem of public international law when it is in fact more a problem of transnational commercial contract law? Stabilisation clauses are viewed in the context of negotiation and the interaction between government policy and company strategy. It considers also the role of stabilisation clauses in the political risk management, against the specific requirements of the mineral industries and their logic of investment.
by T W Wälde, 1994, 90pp
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