Drafting stabilisation clauses in international energy contracts: some pitfalls for the unwary

Foreign investors often seem to be apprehensive of various non-commercial risks in the host state, such as political, fiscal, legislative and regulatory risks. In order to avert such risks, various contractual protective clauses have been devised, of which stabilisation clauses are a prominent type. In many longterm international contracts, including international energy contracts, such clauses are now commonplace. Different techniques are encapsulated in stabilisation clauses.