STABILITY OF INVESTMENT CONTRACTS AND THE GLOBALIZATION OF FINANCE

Multinationals operating mostly in developing countries always want security of tenure for their capital investment in such countries. They inject into investment contracts provisions that seek to preserve not only the life span of the agreement but its essential terms. In seeking to. achieve this, legitimacy of maintaining the status quo is often sought from the principle of sanctity of contract and other principles of international economic law. This is in the main was the situation before the intensification of globalization of finance. With the globalization of finance and the mobility it gave to international capital, stability of investment contracts seemed to have come under a marked strain, particular from the ranks of multinational which earlier on had been too obsessive about it. The mission of this paper is to examine the various principles of international economic law that are often raked up to support stability of investment contracts, how these stand up to the challenge of globalization and who in todays economic realism is that interested instability of investment contracts.