ABSTRACT
Chapter 3 of this study examines and evaluates the typology, efficacy and validity of stabilisation clauses under domestic and international law. This chapter also analyses the decisions of arbitral investment tribunals with regard to issues of validity. Such an analysis contributes to an understanding of the legal and functional value of stabilisation clauses and an assessment of their effectiveness in protecting foreign investors’ business in energy investment projects. The notion of ‘state sovereignty’ is the other key area of focus in this chapter. The chapter examines the criticisms made by the non-governmental organisations (NGOs) and the legal documents issued by the project consortium to the BTC project agreements. The host government agreements that determined this project’s terms and conditions as well as the context of drafts are controversial and had a significant impact on the participating countries’ ability to exercise their sovereign powers.
