THE DOCTRINE OF PACTA SUNT SERVANDA: ARGUMENTING THE BOOBYTRAP IN NEGOTIATING A TRANS-NATIONAL RESOURCES AGREEMENT

INTRODUCTION

The discovery of natural resources particularly oil and natural gas usually heralds the hope of accelerated economic growth and correspondingly greater prosperity for all. In reality however, in many resource-rich countries natural resources have been more of a curse and obstacle to development than a catalyst to economic growth and wholesome social prosperity. The most immediate disappoint among other things would be the social systems collapse and enhanced potentials for internal conflicts, trans-boundary migration and higher rates of corruption.

Negotiating natural resources agreements with multinational corporations is the foremost challenge which governments of natural resources-rich countries are confronted with. All contracts must basically determine two key issues: how profits are divided between the government and such companies, and how their costs are to be paid for or recovered. The objective of any negotiation is to find a reasonable and mutually acceptable balance between the interests of all parties; that is, the interest of trans-national investment corporation and the host governments. It is this strategic intercontinental economic interactions between trans-nationals and governments in the context of natural resources development that provides the legitimacy for the controversies regarding the legal status of trans-national natural resources development contracts. It surfices to say that, there have been conflicting logic regarding the arguments around the legal status of these agreements, however, despite all that, there appeared to be a genuine appetite for a common ground on the issue. This is what this research intends to discuss taking into account the various thesis and narratives on the issue