This article explores the significance of renegotiation, its evolution, and the issues that need addressing for it to be an acceptable solution for all stakeholders.
Authors
Animesh Anand Bordoloi, Assistant Professor, Jindal Global Law School, O.P. Jindal Global University, Sonipat, Haryana, India.
Summary
Most Investor-State projects involve significant capital investment, while recognizing the existence of acute risk factors. After making such investments, investors expect fiscal, regulatory, and political conditions to remain stable or favorable throughout the project’s duration.
However, due to the long-term nature of agreements, there have historically been significant disputes over differences in expectations versus reality. States may rapidly evolve their economies and interests, sometimes pushing for new deals seen as fairer to investors with changing circumstances.
Stabilization clauses have traditionally been used by investors to protect their interests, but over time, such measures have weakened as they are perceived as a threat to the State’s sovereignty.
As an alternative, renegotiation is being considered as a more mutually inclusive process. This article explores the significance of renegotiation, its evolution, and the issues that need addressing for it to be an acceptable solution for all stakeholders.
Published in: Indonesian Journal of International Law
To read the full article, please click here.
