Part I Assessment and Pre-Investment Management of Political Risk, Ch.2 Structuring Transactions to Minimize Political Risk

Subject(s):

Investor — Concession agreements — Arbitration — Choice of law — Damages — Interest — Exhaustion of local remedies — Waiver of claims (and admissibility) — Human rights

This chapter analyzes the types of investment projects most often undertaken in developing states, such as concession agreements, production sharing agreements, participation agreements, service contracts, and infrastructure projects. Next, it describes investment structures and features that can be implemented to reduce exposure to political risk. These include stabilization and arbitration clauses and clauses guiding tribunals with regard to damages and interest rates. Other clauses and contractual provisions or features discussed include waiver of sovereign immunity, conversion of currency clause, payment of currency to offshore account, and binding the state as a party to the contract.