3319972316 by Unknown

Author:Unknown
Language: eng
Format: epub
Published: 2018-11-28T11:57:37+00:00

262

5

The Legal Status of Stabilization Clauses Under International Law: The. . .

d) Limitations of Scope in Terms of State Actions: Lawful vs. Unlawful

Nationalization

These unsettled aspects aside, the above limitations already set a high threshold for

stabilization clauses to apply as such, and subsequently to be binding and effective.

Yet, another controversy added to the discussion and deepened the diminishing

effect291 of such limitations to the extent of protection that these clauses offer to

foreign investors. It was admitted that stabilization clauses are “intimately

connected” 292 with the issue of lawfulness of the host state’s nationalization mea-

sures. A number of questions arise from there. In terms of their scope, did stabili-

zation clauses prohibit nationalization and expropriation even when their language

did not expressly cover such acts? In terms of their effect on the lawfulness of state

conduct, were stabilization clauses aimed against confiscatory nationalization only,

or also against lawful nationalization? In other words, were they able to transform an

otherwise lawful nationalization into an unlawful one?

Many awards proclaimed the ability of these clauses to prohibit in an absolute and

unconditional manner any state measure covered by it, including nationalization

measures. In Texaco v. Libya, it was held that the right of the state to nationalize

could not prevail over a stabilization commitment. 293 The act of nationalization

violated the stabilization clause, and as such it was unlawful per se (“null and void”),

regardless of the issue of compensation (the payment of which would have otherwise

made the nationalization lawful). 294 The unlawful nature of a state measure when

violating a stabilization clause was also supported by Sir Fitzmaurice in his Separate

Opinion in Kuwait v. Aminoil. He argued that the stabilization clauses clearly

provided for the state’s contractual undertaking not to nationalize.295 They were

addressed to “any” measure that terminated earlier the Concession, not only to

confiscatory ones. He also referred to the historical background of these clauses,

where nationalization and similar measures were one of the most serious concerns

291See also, Waelde and Ndi (1996), p. 246.

292Kuwait v. Aminoil, Award, 1982, paras. 13, 88 et seq.

293Texaco v. Libya, Merits, 1977, para. 73.

294Texaco v. Libya, Merits, 1977, paras. 91–92. See also, BP v. Libya, Award, 1974, pp. 322, 324,

329–331 (where the tribunal affirmed the unlawful nature of the nationalization law. Relying on the

stabilization clause in the BP Concession, it held that the Nationalization Law was “an abuse of

sovereign power” and constituted “a fundamental breach of the BP Concession”).

295The Government of the State of Kuwait v. The American Independent Oil Company (Aminoil),

Separate Opinion by Sir G. Fitzmaurice, 24 March 1982, 21 ILM (1982) 976, 1043 [“Kuwait

v. Aminoil, Separate Opinion, 1982”], paras. 23–26 (“I know of no general legal principle - (there

may be special rules for particular cases) - which would require something to be expressly stated

rather than left to be implied from representative language clearly covering it according to normal

canons of interpretation; or rather, and more correctly, which would prohibit something from being

inferred from such language merely because it was not expressly stated.”). The tribunal took another

position as discussed further below.

C. Substantive Issues of International Law

263

that foreign investors aimed to address. 296 He argued

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.