Methods of Preventing Disputes in Foreign Direct Investment Contracts with the Relative Risk of a Highly Sensitive Country

In order to gain sustainable and long-term benefits, a rich and experienced foreign person or company invests in foreign investments, invests in the investable country with abundant natural resources and cheap labor. This process is known as Foreign Direct Investment "FDI" which take place through concluding foreign investment agreements between "foreign investors" and the "state" of the investee country. Despite the interests of the parties foreign direct investment contracts, due to the dual role of the state in these contracts on the one hand as one of the parties to the contract and on the other hand the sovereignty of the investing country, will bring potential political and economic risks along with the usual risks of commercial contracts. The "country risk" index of the investee country well reflects the potential economic and political risks of the investee country in the public view, but this index is general and since the country risk of a country cannot be equated with the general public for the first time, in this study the term "relative country risk" has emerged, which has been used as an indicator of the national risk of the investee country relative to the respective foreign investor state, in determining solutions to prevent differences in foreign investment contracts. As a result, this study presented the solutions to prevent differences in foreign direct investment contracts with high relative and sensitive country risk.

Keywords:

Investment contract , relative national risk , foreign direct investment , dispute prevention