Assessment of the Economic Equilibrium Clause as a Modern Classification of Stabilization Clause in Foreign Investment Contracts qua Administrative Contract

Since the foreign investment usually involves transfer of capital to the host country for a relatively long period of time; It requires trust in a government that has the power of legislation in its own country and by implementation of that power the fate of investment can change. The stabilization clauses are set primarily to stabilize the investors’ situation and to avoid their vulnerability towards the host state. There are different types of these clauses through them Economic Equilibrium Clause has been welcomed in recent years and practically replaced the traditional forms of stabilization clause of investment contracts in many countries.It is noteworthy that the economic Equilibrium clause is inserted for the sake of maintenance of the economic balance of the contract, and on that basis, unlike the traditional types of stabilization conditions, the host governments can also benefited from it. In this article, along with evaluating the compliance of the economic equilibrium Clause with the criteria of administrative law and explaining its types Stipulated Economic Balancing Clause as the most efficient classification of this clause in practice will be described from the perspective of the authors.