PRAVNI ZAPISI • Year VIII • No. 1 • pp. 34-48
FOREIGN INVESTMENT CONTRACT STATUS DURING THE RENEGOTIATION OF HOST STATE AND FOREIGN INVESTOR
Dušan Dubajić, Masters of Law
PhD student, University of Niš Law School
e-mail: dusandubajic90@gmail.com
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Pravni zapisi, No. 1/2017, pp. 34-48
Review Article
KEY WORDS
foreign investment, contracts, renegotiation clause, renegotiation, contract status
ABSTRACT
Contracts concluded between foreign investors and investment host state are the main instruments used to promote foreign investment, regulate and normative design them. An important element of the contract on foreign investments is a renegotiation clause, which allows the investment host state and foreign investor to start renegotiation, after the contract has been concluded. This paper attempts to point out the impact of renegotiations on the obligations of the parties under the contract on foreign in- vestments. Though the renegotiation contributes to maintaining contract in force, it may be perceived as a sign that there are significant difficulties in contract enforcement. Giving a notion to start renegotiations can have a powerful psychological effect on the counterparty to which the request is addressed. Mentioned notion can be understood as a sign that the contract will soon be breached. Therefore, it is necessary to provide clear assurance that the implementation of contract will continue during the renegotiation. The primary objective of the study is to highlight the fact that the renegotiations cannot be understood as an alibi to avoid contractual and other obligations arising from foreign investment. In addition, in this paper there will be pointed out at a certain exceptions from the principle of consistent implementation of the contract during the renegotiation. The aforementioned exceptions must be restrictively interpreted and applied with full control.