Stability and Legitimate Expectations in International Energy Investments

: An Analysis of the Interplay between the Two Concepts

Abstract

The stability concept has been considered a shelter by international energy investors against unilateral host state actions. Investors constantly look for ways to ensure a stable legal environment in host states in order to be able to secure profit from their investments. Stability provisions, as found under investment contracts or domestic laws, are the main tools that international energy investors employ in this regard.

Even though stabilisation clauses have been around for decades, the dispute regarding their efficiency is still ongoing. This thesis adds another perspective to the utilisation of the stability concept in investment treaty protection by assessing it through the prism of the legitimate expectations principle. The legitimate expectations principle, as the most important component of the Fair and Equitable Treatment Standard, plays a significant role in providing protection to the investments. Despite this, the contours of the principle have not been defined well under investment treaty jurisprudence.

This thesis explores the relationship between the stability and legitimate expectations concepts in the field of international investment law. First, it analyses these concepts separately to identify their contours and then brings them together to illustrate the interplay between these two concepts. This thesis finds that there is a close link between these concepts, upon which investors might rely while arguing their cases before arbitral tribunals.

The analysis in this thesis identifies three main sources of legitimate expectations: contractual commitments, administrative representations of host states, and the general legal framework prevailing in host states. It has been argued in this work that each of these sources, when analysed in conjunction with stability commitments, provide a stronger and more efficient protection framework to investors under investment treaties. The thesis shows that while stabilisation provisions create legitimate expectations to be protected, there is also a requirement arising from investment treaty law for host states to provide a stable investment environment, even in the absence of an explicit stability assurance.

Date of Award	2019
Original language	English
Awarding Institution	University of Dundee
Supervisor	Peter Cameron (Supervisor) & Stephen Dow (Supervisor)