Law fixing via freezing clauses. Bridge between states and investors

Florin SANDU LLM

ABSTRACT

The paper examines the intricate relationship between political risk, legislative instability, and foreign investment in development projects. It highlights the necessity of stabilization clauses as a key mechanism to safeguard investors from unforeseen legislative changes that could adversely impact their operations. The paper aligns its discussions with the principles outlined in the Charter on the Economic Rights and Duties of States, advocating for legislative clarity and stability as essential components for fostering a conducive investment environment. By analyzing Bilateral Investment Treaties (BITs) and various case studies, including AGIP Spa versus the government of the People’s Republic of Congo and the Mineral Development Agreement involving Mittal Steel, the paper illustrates how stabilization clauses can serve as protective tools that balance investor interests with state...