16 TECHNICAL
INTERNATIONAL ARBITRATION 1/3LY
PROTECT ION IN THE INVES TMENT CONTRACT While it may sound simple, it is imperative to document the basis on which the agreement has been reached. Any assurances from the country receiving the investment as to what they have or will do and what the investor can expect must be documented. Ideally these are all recorded in the contract but, failing that, contemporaneous notes, memos, recordings etc all come into play should a dispute arise. It is usual to provide for dispute resolution in a neutral forum. Parties will often provide for disputes to be determined by arbitration under the ICSID Rules which offer the protection of vast experience of investment disputes in neutral territories (always choose a seat that is a signatory to The Convention on the Recognition and Enforcement of Foreign Arbitral Awards the “New York Convention”) determined by a neutral tribunal. A resulting award will be enforceable under the New York Convention, provided it is made in a New York Convention state. There are 156 (soon to be 157) contracting states. It should be noted that arbitration under the ICSID regime does not benefit from the confidentiality applicable in commercial arbitration and the documents and awards are publicly available. In some instances this can act as leverage to encourage good investor-state behaviour as their actions against one another will be closely considered by those contemplating future investment. Investors should also consider making further provisions for specific investments including stabilisation clauses which ‘freeze’ the legal or regulatory regime (though may therefore be challenged for stifling the government’s ability to legislate) or ‘economic equilibrium’ clauses which instead aim to stabilise the economic return on the investment in the case of such legislative changes.
FUTURE FOR INVES T ING IN L AT IN AMERI C A As we said at the start, it is unwise and unfair to generalise about a region so varied as Latin America but it is clear to see that Latin America holds many opportunities for mutually-beneficial investments.
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