THE LEGAL DILEMMA OF STABILIZATION CLAUSES IN THE RENEGOTIATION OF STANDARD MINING AGREEMENTS IN TANZANIA
CHALLENGES AND PROSPECTS
Keywords:
Stability clauses - freezing effect, renegotiation agreement, arbitration adequate compensation.Abstract
This article analyses the legal intricacies surrounding renegotiation of mining agreements in Tanzania and gives out the way to address them. Renegotiation of mining agreement which contain stability clause is very technical and requires effective participation of both parties. On one hand the state has sovereign powers to exploit natural resources subject to its laws and policies. This may include enacting new laws or otherwise amending the existing laws, provided the change of law does not affect accrued investor’s rights. On the other hand, the investors seek to have their invested capital secured by freezing provisions of the host state. Thus, renegotiation of agreement should be done consciously so as to ensure economic equilibrium of the parties. This article critically analyses the legal intricacies surrounding renegotiation of mining agreements in Tanzania and gives out the way to address them.
