[Proper law: International law]
Treaties are not more the only type of agreements governed by international law [against Serbian loans 1929]
Reference to the general principles of law is always regarded to be a sufficient criterion for the internationalisation of a contract. (Abu Dhabi arbitration 1951) A clause providing international arbitration is another process for internationalisation of a contract (Sapphire 1963) A third element of internationalisation result from the fact of the new dimension of agreements between states and private persons: ‘economic development agreements’
Elements characterising these agreements: 1. subject matter particularly broad, they tend to bring to developing country investments and assistance 2. long duration that implies co-operation between state and contracting party 3. investor must be protected against legislative uncertainties. The insertion of stabilisation clauses tends to remove all or part of the agreement from the internal law and to provide for its submission to sui generis rules or to IL (Aramco 1958).
To say that IL governs contractual relations between state & foreign private party neither means that the latter is assimilated to a State nor that the contract is assimilated to a treaty; it only means that for the purposes, interpretation and performance of the contract, it should be recognized that a private contracting party has specific international capacities. But unlike a State, the private person has only a limited capacity and his quality as a subject of IL does enable only to invoke the rights which derives from the contract.
It is clear from the international point of view that it is not possible to criticise a nationalisation, on the assumption that the nationalising state has concluded with a foreign company a contract which stems from the municipal law of that state and is completely governed by that law
IL recognise the right to nationalise, but it is not sufficient ground to empower a State to disregard its commitments because the same law also recognises the power of a State to commit itself internationally, accepting stabilisation clauses in a contract with a private party.
Res 1083 XVII, 1969, seems to reflect the state of CIL existing in this field. Nationalization according to IL.
GA res 3281, Charter ERDS 1974 is lege ferenda
Charter of Economics Rights and duties of States, GA res 3281, 1974, art 2, does not establishes any connection between procedure of compensation and IL, and it subjects this procedure solely to municipal law, its purpose as codifying or developing IL was deleted by the opposition of several states.
As Libya had no justification for its acts the appropriate remedy was restitution in integrum, Libya was legally bound to perform the contracts. Later compensation in full was accepted by negotiations