The Legal Status of Stabilization Clauses Under National Law
In focus here are legislative stability provisions, and contractual stabilization clauses contained in investment contracts approved by law, thereby having the force of law. In order to discuss the legal status of legislative stability provisions, national law is by default the law to refer to. As to a contractual stabilization clause (which, compared to the previous form, is overwhelmingly encountered in practice), the discussion depends significantly on the law applicable to the contract. The following firstly presents a discussion of the dogmatic techniques employed in order to subject the contract to national law and the particular role of the stabilization clause as a choice-of-law clause. It then turns to a number of constitutional principles and doctrines on the basis of which the validity and effect of these clauses is scrutinized under national law. Particular attention is dedicated to two dimensions in which stabilization clauses are perceived in view of the ‘public interest’ argument. Building on these findings, some essential functions of stabilization clauses are finally identified.
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