Host Government Agreements and the Law in the Energy Sector

The case of Azerbaijan and Turkey
1. Auflage 2018
ISBN: 978-1-138-59133-2
Verlag: Routledge

Buch, Englisch, 208 Seiten, Format (B × H): 161 mm x 240 mm, Gewicht: 485 g

Reihe: Routledge Research in Energy Law and Regulation

The energy industry is a key source of growth stimulation for developing states. Understandably, developing states are eager to enter into petroleum investment contracts with international investors, with the expectation that this will benefit their countries. The domestic law of some developing states provides a welcoming investment environment in the form of guarantees and stability, while other states provide these opportunities by agreeing to investment contracts or treaties drafted by international organisations established to facilitate such agreements.

This book identifies the political risks, particularly of indirect expropriation, that arise from the unilateral actions of host governments during the lifespan of energy investment projects. Focusing on stabilisation clauses as a political risk management tool, this research-based study draws on comparative empirical evidence from Turkey and Azerbaijan to determine what influences host states to consent to the insertion of stabilisation clauses in long-term host government agreements. Proposing a framework for the role to be played by both internal forces and external forces, it examines political regimes and state guarantees to foreign investors in Azerbaijan and Turkey from a comparative perspective, assessing how effective internal factors in Azerbaijan and Turkey are in facilitating contractual stability in their energy investment projects.

Providing a comprehensive analysis of stabilisation clauses and the internal and external factors that compel host states to commit to them, this book will appeal to practitioners, students and scholars in international investment law and energy law.

Zielgruppe

Postgraduate

Autoren/Hrsg.

Sahin, Hakan

Fachgebiete

• Rechtswissenschaften Recht, Rechtswissenschaft Allgemein

Inhaltsverzeichnis

Acknowledgements

List of abbreviations

PART I

Political risks in the energy sector

1 Introduction and framework of the research

Introduction

Expropriation or nationalisation?

Why are stabilisation clauses a controversial issue?

Host government agreements

Objectives and scope of the research

The gap in conventional literature

Research questions

Methodology

Overview of Azerbaijan and Turkey

Baku–Tbilisi–Ceyhan crude oil pipeline project: timeline, importance and issues

Structure of the book

2 Indirect expropriation

Introduction

Distinguishing between direct and indirect expropriation

The types of host state measures that may constitute indirect expropriation

Criteria for the distinction between legitimate regulation (noncompensable regulation) and indirect expropriation

Sole effect versus police power

Bilateral investment treaties of Azerbaijan and Turkey and their treaty provisions concerning indirect expropriation

Tools for mitigating indirect expropriation risk

Conclusions

PART II

Mitigating political risks through stability provisions

3 Stabilisation clauses

Introduction

General implications of stabilisation clauses

Typologies of stabilisation clauses

Legal importance and functional value of stabilisation clauses

Do stabilisation provisions constitute a threat to environmental protection and human rights?

The BTC pipeline project (I): reactions to the project

Conclusion

4 Lenders, risk insurers and rating agencies

Introduction

The main financial institutions in project financing

The role of lenders in inclusion of stabilisation clauses

Political risk insurance providers

The role of political risk insurance providers in the inclusion of stabilisation clauses

Credit rating agencies

The role of credit rating providers in the inclusion of stabilisation clauses

Baku–Tbilisi–Ceyhan pipeline project (II)

Conclusions

5 Political systems and laws on foreign investment in Azerbaijan and Turkey

Introduction

Azerbaijan

Turkey

A comparison of guarantees available under FDI laws and political regimes in Azerbaijan and Turkey

Conclusions

PART III

Conclusion and recommendations

6 Conclusions and recommendations

The research findings and conclusions

Recommendations

Index

Über Autor(innen)

Hakan Sahin is an Assistant Professor in Private International Law at Maltepe University, Istanbul. He regularly advises state entities as well as private clients on a range of issues, including international energy law, international arbitration and international investment law.