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How to Recover the Damages in Investment Arbitration

When it comes to recover the damages in Investment Arbitration, it is important to understand the most important concepts. Although it is, a complex and multi-layered issue to solve, but you do not need to be an expert.

The damages in Investment arbitration causes due to enforcement issues combined with compensation. The moral damage causes due to intangible injury or compensation for actual. There are two general techniques for determining the fair market value of a lost investment including-

  • Market-based Technique
  • Income-based valuation
  • Market-Based Techniques

Market-based technique is the first evaluation method that includes reviewing stock markets and prices. However, there may be instances of stock price distortion, illiquid markets, and minority discounts that will affect this value. If there are indeed such pitfalls, then a powerful substitute is comparable transactions.

The benefit of this approach is that there are relatively few assumptions to be made by an expert or ICSID Arbitration lawyers, which the quantum expert’s assertion less vulnerable to attack. What units are most comparable; of course, depend on the unique facts of each case.

Income-Based Techniques
The DCF method involves in income based technique, in which a range of assumptions is not always aligned with contemporary views. Its complexity lies in the discount rate itself. This calculation must reflect an array of factors, including country risk premiums and its reduction based on insurances such as BIT coverage, multiple jurisdictions, and project risks. Even after calculating a net present value, experts must address what a willing buyer would pay for the shares. These so-called “discounts to equity value” include control, marketability, and size discounts.

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This post first appeared on Three Things That Makes An International Arbitration Law Firm Reliable, please read the originial post: here

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How to Recover the Damages in Investment Arbitration


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