Investment Contracts Research Articles

Юридическая природа договора купли-продажи будущей недвижимости

In the article, based on the court practice and studies of practicing lawyers, the analysis of the legal nature and features of the sales contract about real estate, which will be built in the future, is carried out. The article concludes that the future real estate sales contract is a type of investment contracts, which is most frequently found in legal practice. The results of the analysis can be used when structuring investment relations in real estate construction.

A Study on Stabilization Clauses in International Investment Contract

A Study on Stabilization Clauses in International Investment Contract

Правовое обеспечение государственных гарантий в инвестиционной сфере

The article deals with the provisions of the current legislation containing measures of state stimulation of investment activity for the purpose of industrial development and production of competitive products. Among the array of legislation, the author identifies the position of the industrial policy under which conditions are created for legal, economic and organizational stimulation of legal entities and individual entrepreneurs to establish or maintain (modernizing) industrial projects in the Russian Federation. The author points out that the legislation provides for financial assistance in terms of grants from the federal budget of the Russian Federation, the budgets of the Russian Federation, local budgets; the possibility of concluding a special investment contract; provision of information and consulting services; support scientific and technological activity and innovation activity of investors in the industry. The article details the procedure for granting state guarantees of the Russian Federation on loans or bond loans, attracted for implementation of investment projects related to the creation of new or renovation of existing social, agroindustrial, industrial, utility and transportation facilities, and the possibility of their further exploitation. The authors point to the desirability of introducing legislation on investment activities, the provisions on the criteria for the recognition of investment objects as socially important facilities in the Russian Federation.

Merodavno pravo za suštinu spora pred arbitražnim sudovima IKSID - član 42(1) IKSID konvencije i uloga nacionalnog prava

Business transaction which represents a foreign investment is today most commonly regulated by three different layers of legal rules: provisions of an investment contract, rules of international law (treaties and rules of customary international law) and the legislation of the Host State. In the event of a dispute arising out of an investment, a tribunal working under the auspices of ICSID must determine the law applicable to the merits through the application of article 42(1) of the Convention. Although it is clear that one cannot fully comprehend all legal aspects of an investment dispute without the context of the Host State's national legislation, there is a strong tendency in arbitral disputes of neglecting such municipal legal rules in favor of international law. The paper concentrates on the evolution in interpretations of the choice of law provision from the Convention in the practice of ICSID tribunals. It shows the way in which those interpretations have changed during the course of time, leading to the broadening of arbitrators' freedom to decide on the applicable law. This trend resulted in constant widening of the scope of application of international law, contrary to the text of article 42(1) and intentions of the Convention's makers. As a consequence, there is today almost no way in which a state could shield itself from the liability for the breach of the investor's rights by invoking the fact that it acted in accordance with domestic legislation.

Специнвестконтрактам в фармацевтической отрасли быть! Когда и какими?

Специнвестконтрактам в фармацевтической отрасли быть! Когда и какими?

Foreign investment contract status during the renegotiation of host state and foreign investor

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 investments. 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 can not 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.

Changed circumstances and the renegotiation of foreign investment contracts

Today's world is shaped by the processes of globalization and economic liberalization, which dominantly determine the social, economic, environmental and political conditions. As part of these processes, there is an increasing rhetoric about the activities of the state to build a legal system 'ideal for attracting' foreign investment, to establish state institutions in charge of 'attracting foreign investment', and to create a business environment conducive to 'attract' foreign investment. Faced with citizen requests and pressure to create conditions for employment, in initial negotiations with foreign investors state, authorities articulate their willingness to meet these requests. The affirmative stance of governments towards the investments of multinational companies easily can be changed. Once the investment begins, the pledges made by one contracting party to the other may prove to be unrealistic and economically unjustified. The tensions generated between the host state and foreign investors jeopardize the foreign investment contract concluded by the contracting parties. Further fulfillment of contractual obligations from foreign investment contracts will be possible if the contracting parties resolve the resulting conflict through mutual negotiations. Through negotiations, the contracting parties can depreciate the impact of the changed circumstances, including a range of economic, political, legislative and environmental conditions. Initiating negotiations at the right time and conducting them in good faith may lead to a solution. Even if an agreement is not reached, the renegotiation may contribute to a better understanding of contractual partners and redefining the positions of the contracting parties.

Oil Market: Low Prices Retained

Low world crude oil prices have resulted in scaling back oil production on high-cost oil deposits and in contraction of investment in the development of unconventional deposits. At the same time, reduction of crude oil extraction from the cost-intensive deposits, first of all, in the US, is offset by the built up production by leading OPEC countries who strive to increase their market share. In 2016, Iran and Saudi Arabia have significantly raised their crude oil output. Russia has also built up production, which hit all-time high since 1990. In 2017, one should expect relatively low oil prices to remain. At the same time, some growth is feasible in comparison with the current year.

Daerah sebagai Pihak dalam Kontrak Penanaman Modal Internasional (Studi Kasus Provinsi Aceh)

Legal certainty is an important factor in developing international investment contracts in regional areas. How ever, it cannot be accomplisehed yet because of, among others, obscurance and inconsistance of laws regulating capacity to contracts for regional sub-divisions in Indonesia. The capacity to contract of the regional sub-divisions can be ascertained based on criteria of definition of the international contracts which is different from treaties, legal personality theory on the subject, and object concerning local government affairs. This article concludes that regional sub-divisions, such as Aceh Province, has capacity to be a party to international contracts, therefore, inconsistence laws should be adjusted.

Bank Leverage Cycles and the External Finance Premium

By combining the approaches of Gertler and Karadi (2011) (GK) and Bernanke, Gertler, and Gilchrist (1999) (BGG), I develop a Dynamic Stochastic General Equilibrium (DSGE) model with leverage constraints both in the banking and in the nonfinancial firm sector. I calibrate this “full model” to US data. The full model matches the relative volatility of the external finance premium and the procyclicality of bank leverage and thus outperforms both a BGG and a GK‐type model. For a reasonably calibrated combination of balance sheet shocks, the model reproduces a substantial share of the contraction (increase) of investment (the external finance premium) observed during the “Great Recession.”

Uncertainty-Induced Reallocations and the Macroeconomy

Focusing on U.S. data, we show the existence of a significant positive link between uncertainty and reallocation from private to government capital. A standard VAR approach suggests that during the Great Recession the observed spike in productivity uncertainty has promoted a reallocation toward public investment that accounts for a large share of the contraction in both private consumption and investment. We rationalize these novel empirical findings in a production economy in which the representative agent has an explicit fear toward uncertainty and government capital is, in equilibrium, a safe asset.

The Performance of Collective Investment Contract of Stock Mutual Fund In Indonesia

The are two kinds of stock mutual fund, namely company and collective investment contract of stock mutual fund. Three aspects must be considered by investor in selecting stock mutualfund, (1) how much rate of return, (2) is rate of risk and (3) is performance or professionality of porlfolio management of stock mutual fund. To analyze the performance of stock mutual fund, especially collective investment contract of stock mutual fund in Indonesia, is the objective of this study. Based on theoretical and empirical review, it is able to design hypothesis. Data collections in this study covering IHSG, BI rate and Net Asset Value (NAV) of stock mutual funds. Alfa Jensen's model was used to evaluate the performance of collective investment contract of stock mutual fund. The finding of this study shows that only two of six of stock mutual fund which are observed as sample, have outperform toward market performance and the others are underperfoms condition.

Natural Resources for National Reconstruction: A New Generation of Investment Contracts

This article offers the first major systematic account of resources-for-infrastructure (R4I) investment contracts and their terms and conditions, modeling their organic workings and reconstructing their formal structure. R4I contracts combine a mining or oil venture and an infrastructure project in order to extract minerals or hydrocarbons and to pay for major infrastructure projects with revenues generated from those extractive activities. Under this ring-fenced agreement, the host state gets the infrastructure and the foreign investor gets the extracted resources. These contracts are thus deceptively akin to barter trade agreements. The technical yet crucial difference is that barter takes place in the context of international trade whereas a R4I contract is structured as a foreign investment deal.R4I contracts are born of China’s dramatically increasing interest in Africa and its under-explored, under-exploited natural resources. Successive summits on China-Africa cooperation have led to loans, credit and development aid from China to Africa; trade and investment treaties between China and African states; and a new wave of R4I contracts. What are the risks and costs of long-term foreign direct investment (FDI) that these contracts diminish or exacerbate? This question canvasses the resource curse, the costs and the investment risks that may keep investment contracts from being fully enforced according to the intentions of the contracting parties. Contract breaches, expropriations, confiscations, restrictions on currency exchanges, political violence, are among the factors that may undermine the proper enforcement of investment contracts. Lastly, what are the financial terms of R4I contracts? The financial arrangements woven through R4I contracts have attracted the most attention – and criticisms.This article explores the intentions of the parties in entering into these contracts; the extent to which contracts can structure commercial transactions and foreign direct investments (FDIs) in the mining sectors of resource-rich countries; the economic sectors covered by R4I contracts; and their commonalities and differences with other investment contracts. In six sections, the article (i) provides the theoretical and methodological background of R4I contracting; (ii) unpacks the notion of resources-for-infrastructure; dissects (iii) the resources side of the R4I model, (iv) the R4I deal's reimbursement of infrastructure investments, and (v) the infrastructure side of the R4I model; and finally (vi) marks out the characteristics that distinguish R4I contracts from traditional investment contracts.

Equity Crowdfunding in China: Current Practice and Important Legal Issues

By studying two leading Chinese equity crowdfunding portals, namely, Renrentou and Zhongou8, this paper provides the very first empirical evidence on the practice and regulation of equity crowdfunding in China. In the case of Renrentou, I examine a hand-collected sample consisting of the investment documentation of the 53 crowdfunding projects that are successfully completed as of June 30, 2016 on the portal. It is found that the utmost task of the contractual terms in these agreements is to secure the investors’ right of return. Control on the part of investors is rather minimal, and most of the time only encompasses the basic information and monitoring rights. Although investors are not first pooled to form a new entity before investing, it is still a prevalent practice for projects to commission a third party manager to manage the investment for the crowdfunders and exercise monitoring rights in the project entity on their behalf. In the Zhongtou8 case study, I go beyond the margins of investment contracts and explore the operation of the business with a both broader and deeper view. It is found that, the leading investors of crowdfunding projects are very often served by entities that are in some ways related to the founder of the portal. In addition, the portal is also identified to have financial interests in many projects besides that. While these practices do raise concerns about potential conflicts of interests, the regulatory solutions proposed by the Crowdfunding Measures are nevertheless overly cautious and effectually not enforceable. It is therefore argued that the regulator should rather focus on ensuring effective disclosure from the parties with better information, so that the investors can use it to make effective decisions. Furthermore, by setting down high entry thresholds for qualified investors, the Crowdfunding Measures fail to establish equity crowdfunding as a new financing alternative, but rather create a minimized version of the NEEQ private placement. As such, it would be meaningful for China to consider lowering the investor qualifications and allow crowds to participate, so that equity crowdfunding can grow into a true new alternative for entrepreneurs to avail in addition to existing fundraising channels.

Unfavorable Clauses in International Investment Contracts of Aceh Province, Indonesia

Ideally international investment contracts regulate rights and obligations of parties in balance. In reality, how ever, this cannot be fully achieved by parties. Unfavourable clauses to state/region are existed. These clauses, including but not limited to, choice of foreign/international arbitration abroad, license enrollment/facility, exclusivity of cooperation, long-term contracts, choice of foreign domestic law, waiver of immunity, and confidentiality/intellectual property protection. Understanding the nature of these clauses is important for considerations in negotiation or renegotiation of international investment contracts. How ever, only by understanding these clauses without understanding the whole contract clauses, is not enough for judging balance of each contract. The whole contract clauses includes both unfavorable and favorable have to be compared and analyzed together. This paper, how ever, concentrates mainly on unfavourable clauses to host state/region as a party to international investment contracts.

Stabilisation Clauses and the Right of Reparation Under International Energy Investment Law: A Confused State of Affairs

This paper sets out to determine the extent to which the rulings of international tribunals have been influenced by the presence of stabilisation clauses vis-a-vis the right of reparation. To that effect, it first examines the different approaches to stability found in the law of international investments, zeroing in on contract-based stability, so as to analyse the stabilisation language commonly used by lawyers drafting international investment contracts (i.e. freezing, economic equilibrium or hybrid). Additionally, it considers the roots of such clauses dating back to the early 20th century; the rationale behind their use; the discussion on their legal validity when opposed to the sovereignty of States to regulate in the public interest; and the question of their efficacy (or lack thereof) in isolating investors from risk. Subsequently, the focus shifts to the right of reparation under international law. To this end, it considers the general principle of reparation established in the Chorzow Factory judgment, all the while separating the concepts of ‘compensation’ and ‘damages’ as subcategories of the notion of ‘reparation’, and also the application of damnum emergens and lucrum cessans in regards to the cause of reparation (i.e. expropriation or nationalisation, breach of international law, breach of contract). Finally, by bringing together the ideas and theories explored in the foregoing sections, this paper demonstrates the confused state of affairs across the board of some of the most significant arbitral awards dealing with stabilisation clauses in the energy sector, as to the proper standard for the quantification of compensation or damages in the face of a stabilisation clause.

International Land Acquisitions and Hal Varian’s Concept of Fairness

Prices of, specifically, primary foods spiked during the global food crisis of 2007–2008. This motivated governments with food security concerns and profit-seeking investors to engage in large-scale land acquisitions (LSLA) in mainly least developed countries (LDCs). In economic terms, this reaction is desirable for two reasons: (1) more efficient production lowers food prices and increased food production improves food security; on the other hand, (2) least developed host countries benefit from development opportunities. Drawing on Hal Varian’s (1974) concept of fairness, this article contributes an ethical perspective on the matter: particularly based on the analysis of 81 investment contracts, this partial analysis understands LSLA into Sub Saharan LDCs as a socio-economic reform. It focuses only on two affected groups when land is redistributed from LDCs’ local smallholders to foreign investors. It concludes that LSLA predominantly contradict Varian’s concept in practice as they hardly if at all improve the situation of local smallholders who might in extreme cases even suffer human rights violations.

Fixed Capital Investment in Q1 2016

In January–March 2016, fixed capital investment stood at 95.2% in real terms, including in the segment of large and medium enterprises to the tune of 98.5% against the corresponding period of the previous year. The share of own capital posted an upward trend in the structure of sources, which are financing fixed capital investments. Investments in the mining and quarrying sector went up by 7.1% and positively affected the investment movements of large enterprises in Q1 2016. Contraction of investment in manufacturing by 5.8% in Q1 2016 against the corresponding period of the previous year was accompanied by an unprecedented activity in the machine-building complex.

RESCISSION OF THE DOCTRINE OF RESCISSION FOR FRAUD

THE decision in Robb v National Crime Authority [2014] EWHC 4384 (Ch); [2015] Ch. 520 has an ironic aspect. Etherton C. upheld the claims of 71 buyers of off-the-plan properties to be developed in Turkish Northern Cyprus. Robb had defrauded them. They had paid sums to Robb, Robb's company, or Robb's agents. Robb later caused those sums to be transferred into his personal bank account with a London bank, intending to transfer the funds to a bank in Thailand. Since 71 of the investors had rescinded their investment contracts, the Chancellor held those investors entitled to trace their moneys into the London bank account. The irony is that the Chancellor's reasoning would itself unravel the modern doctrine of rescission for fraud.

A Probe into Impediments of Benefit Gain in Investment Contracts of Oil and Gas Industries

Generally, oil contracts comprise of a set of benefits in their own specific settings. Different technical, sometimes fundamental, factors may lead to imbalance in benefiting from the contract; this is considered as injustice in international relations and a violation to purpose of law. Therefore, seeking strategies to deploy justice in this field and offering strategies to find such strategies is of crucial importance. The present study is aimed at investigating impediments and factors that cause imbalance in equal gains of both parties in these contracts. Identification of these factors and the existing conditions significantly help realization of justice within a framework of rules and regulations. After carrying out deep analyses of oil contract and evaluation of the results, factors influencing this were identified; some of this factors such as contract parties and selection of the type of contract and currency system are related to the parties’ will sand some others are related to conditions such as risks of economic policy making and of economic structures, while there is another case of gas and oil price fluctuations which is separate from the existing conditions or parties’ wills. Therefore, it is of great importance to take these issues into account and to make attempts to follow them toward gaining benefit from oil contracts for oil companies, particularly those in countries where oil is the aim source of income.