Damages for Breach of Stabilisation Clauses in International Investment Law: Where Do We Stand Today?

Abstract

The issue of damages or compensation for breach of contract and for that matter expropriation or nationalisation in international investment law still remains as enigmatic as ever. Even a cursory glance at international arbitral awards concerning the issue gives such an impression. The presence of stabilisation clauses in a contract is considered to be one of the elements of assessment of compensation for the aggrieved party. It is not clear how the stabilisation clauses concerned in the contract played a role in the quantum of compensation awarded by various arbitral tribunals. There appears no consistency in the arbitral decision-making process across the board on the issue. The paper attempts to appraise the concerned issues.

Keywords: Stabilization Clause, Breach of contract, Expropriation, Compensation