Peculiarities of grandfather clause application under the Russian legislation

Abstract

An investor making investments in the economy of a foreign state needs to be sure that the economic climate in this country will not become worse. For this purpose the so-called stabilization clause, or grandfather clause, is used. According to this clause the national legislation which worsens the position of a foreign investor shall not be applied to such investor during a certain period of time. The application of such clauses in national legislation is a widespread practice throughout the world. As regards Russian legislation, the guarantee for foreign investors against the unfavourable alteration of Russian legislation is included in Article 9 of the Federal Law “On Foreign Investments in the Russian Federation” of July 9, 1999 No 160-FZ.

Keywords:

Foreign Investments, foreign investors, guarantees for foreign investors