Research On Legal Issues Of Stabilization Clauses Under International Energy Investment Contract

The topic of this thesis is “Research on legal issues of stabilization clauses under international energy investment contract”, mainly discusses how the host governments and foreign investors select and enact contract terms to prevent legal and political risks of the host states in the field of the international energy investments. This thesis mainly analyzed from the perspective of contract that stabilization clauses as foreign investment risk management provisions negotiated by contract parties with the consider of the balance of interests, to restrict the host states unilaterally modify any investment applicable laws, regulations and policies, also balance the relationship between the reasonable expectation and economic interests of foreign investors and the host states’ rights to legislative and executive. Stabilization clauses have been used in energy investment contracts around the world, and protect the stability of energy investments with a different perspective from investment treaties. Investors seek for a stable investment environment, financial predictability and enforceability of international dispute settlement, while the host states want to ensure regulatory and legislative flexibility, the biggest tax benefits and fulfill the country’s human rights and environmental protection and other social obligations. However, there have some problems with the specific application of stabilization clauses, like the suitable subject is not clear, the setting of clause contents is not perfect, and issues with dispute resolution, the applicable law and other issues. This thesis studies with legal issues exist in the applicable of stabilization clauses, combined with the international arbitration case analysis. According to China’s energy and resources overseas investment growth year by year, to study the status quo of the stabilization clauses in our country, and analysis the issues we should be noted when entering into the contract terms and the responses from the investor’s perspective.The introduction of the thesis has an overview of Chinese energy investment and energy investment contracts, use the literature and case study analysis to do research on the legal issues of stabilization clauses that have been discussed before, pointing out the existed academic research results and what legal issues would be discussed in this thesis. Text consists of four parts:The first part elaborates the concept and role of stabilization clause in international energy investment contracts, and does classification research through the international investment contracts practice. To do a comparative study between the stabilization clause in the contract with the fair and equitable treatment clause and umbrella clause in international investment treaties that is related to the stable investment. Analyze the protective effect of these provisions to stable investment respectively in the contracts and treaties. Pointed out the stabilization clause applicable situation in order to investigate the development trend of this clause.The second part discusses about the validity of the stabilization clauses in the energy investment contract and the applicable subject, the clause content, dispute settlement and applicable exceptions of the clause. Proposed problems foreign investors and host governments would face when conclude stabilization clauses and the dispute settlement mechanism for the contract dispute due to the stabilization clauses.In the third part, with the related international investment arbitration tribunal cases to analyse the relationship between stabilization clauses and international investment treaty provisions, the interpretation of the terms content. And further point out the applicable exceptions of stabilization clauses in the specific practice of stabilization clause in the international large-scale investment projects.The fourth part analyzes the applicable of stabilization clause in our energy investment contracts. From the perspective that Chinese investors to do foreign investment, to consider how to ensure a stable supply of energy resources overseas. Hope to make some useful suggestions of stability measures in China’s energy investment.