Local laws can cause problems

摘要

Construction and infrastructure projects undertaken in a foreign country may sometimes encounter problems, not because of the behaviour of the contracting parties but because of acts of the local administrative and judicial authorities, or because of changes in laws or regulations by the host state. These acts and changes may correspond to a violation of the host state of an obligation deriving from international treaties to protect foreign companies or individuals having business in its territory against, for instance, inequitable or discriminatory treatment and expropriation. In such cases, the companies and individuals may recover their loss directly from the host state by starting arbitration proceedings against it on the basis of the same international treaties. These companies and individuals are protected by international treaties as "foreign investors".