The scope of stabilization and intangibility clauses

The political and legal instability that generally reigns in countries receiving foreign direct investment has led investors to increasingly demand the inclusion of stabilization and intangibility clauses in investment contracts. These clauses are intended not only to protect investors against the risk of unilateral modification of the law applicable to the investment contract but also and above all to avoid any unilateral modification of the contract by the host state. Investment contracts are long-term contracts that affect sensitive sectors of the national economy of the host state and most often trigger the exercise of the latter''s sovereign power. They oblige the State to derogate from the exercise of its sovereignty and renounce its prerogatives as a public authority. However the State always manages to violate them and we wonder what their scope is? Admitting that certain situations may justify state action it remains notable that these clauses have an influence.