Environmental Engineering Reference
In-Depth Information
that the host state will not introduce new and discriminatory laws after the start of
the investment. There is no doubt that a stabilization clause might interfere with
state sovereignty. However, this is acceptable, as the state may freely to conclude
such a clause or not. If the clause does not touch core elements of the state, it is a
valid legal tool. The latest revolutions in Egypt, Tunisia and Libya illustrate the
importance of a stabilization clause. Until the beginning of 2011, an overthrow of
these regimes was almost unthinkable in Egypt and Tunisia. Due to the ongoing
internal conflicts in Libya and NATO involvement, the outcome can still not be
predicted. This new legal situation is especially underlined by the fact that in Egypt
the revolution peaked in a “new” constitution. All countries belonging to the
MENA region have a more European legal background. Besides the legal changes
and the reform of the political system, the revolution has caused people to fear a
greater influence of the Shari
a in this region. In Egypt in particular, the opposition
favors a more traditional approach. Comparable to the fear of “foreign” national
courts, investors also often fear the Shari
'
a
might become an important document of the judicial system in the Mediterranean
region again. Its imprecise wording makes Western investors feel uncomfortable
because it can be interpreted in numerous ways. Hence, a stabilization clause could
guarantee the application of the old, more European influenced law. If both parties
are willing to include a stabilization clause, they should declare within the contract
that a stabilization clause is not subject to the applicable law of the contract, but to
international law.
Although most MENA countries were shaken up by the so-called “Arab Spring”,
Morocco seems to have had the least problems. There have been demonstrations in
Morocco as well demands for democracy, but unlike in other countries these did not
end in a revolution or civil war. Authors mentioned that this is closely connected to
the political reforms by the king a couple of years ago. During the revolutions, the
Moroccan system proved to be more stable than others. Hence, it is more interesting
for investors than other countries in the region.
Moroccan law, as illustrated in laws for arbitration and energy, was reformed a
few years ago. It is now more open to international projects and is also capable of
successfully “supporting” large scale investments. Furthermore, the constitution of
Morocco underlines that Moroccan law is not Islamic law in the classical sense as
the Saudi Arabian or Iranian law. Over the past few years, Moroccan law was
constantly reformed by the king, which means it is one of the most modern legal
systems in the North African region. Consequently, Morocco and an investor
should apply Moroccan law to the Desertec Concept, combined with a stabilization
clause freezing today
a as well. Especially since the Shari
'
'
s status quo. Morocco is also an international actor that knows
about the consequences of investor discrimination as it was the first country sued
under the ICSID Convention. In all cases including Morocco, the country obeyed
all the awards filed. Therefore, it is doubtful that Morocco would willingly disobey
obligations, arbitration awards or purposely change its national law adversely. The
stabilization clause serves as a “compromise” for the application of Moroccan law
for the investor. Finally, both parties should agree that the stabilization clause
applies to all contracts.
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