Investment agreement: Difference between revisions
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'''[[Investment]] agreement''' may play an important role in determining the amount of compensation due in arbitration proceedings. The significance of the contract will depend on a number of factors: | '''[[Investment]] agreement''' may play an important role in determining the amount of compensation due in arbitration proceedings. The significance of the contract will depend on a number of factors: | ||
* including whether there are formulas (or index clauses) that determine the [[project]]'s revenues, expenses and taxes, or which give the investor the right to compensation. | * including whether there are formulas (or index clauses) that determine the [[project]]'s revenues, expenses and taxes, or which give the investor the right to compensation. | ||
* The impact of the investment agreement on damages also varies depending on the applicable [[standard]] of compensation, in particular between fair [[market]] value and full compensation. The differences between the two standards are often blurred, but they can be explained by considering how the investment agreement fits the analysis. | * The impact of the investment agreement on damages also varies depending on the applicable [[standard]] of compensation, in particular between fair [[market]] value and full compensation. The differences between the two standards are often blurred, but they can be explained by considering how the investment agreement fits the analysis. | ||
The investment agreement can play a significant role in informing about the amount of damage, this role should not be confused with the establishment of a standard of compensation. In most arbitration between the investor and the state, the fair market value is the lower limit of compensation, and the agreement cannot [[work]] to eliminate the lower limit. Therefore, in the [[absence]] of an unusual treaty provision, investors should not worry about investment agreements restricting their rights under investment agreements <ref>Laird I. A., Sabahi B., Sourgens F. G., | The investment agreement can play a significant role in informing about the amount of damage, this role should not be confused with the establishment of a standard of compensation. In most arbitration between the investor and the state, the fair market value is the lower limit of compensation, and the agreement cannot [[work]] to eliminate the lower limit. Therefore, in the [[absence]] of an unusual treaty provision, investors should not worry about investment agreements restricting their rights under investment agreements <ref>Laird I. A., Sabahi B., Sourgens F. G., Weiler T. J., 2014, p.288</ref>. | ||
==International investment agreement== | ==International investment agreement== | ||
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* no foreign company can accept investing its resources in a high-[[risk]] and [[cost]] project that will generate income only after a few years, without binding commitment to important [[negotiation]] matters. | * no foreign company can accept investing its resources in a high-[[risk]] and [[cost]] project that will generate income only after a few years, without binding commitment to important [[negotiation]] matters. | ||
But the assumptions of the parties on whom the agreement is based may be refused or the [[government]]'s priorities may change, and after some time after signing the agreement may be perceived by the host country as an unacceptable obstacle<ref>Peter W., Kuyper J., Candolle B., 1995, p.5,14</ref>. | But the assumptions of the parties on whom the agreement is based may be refused or the [[government]]'s priorities may change, and after some time after signing the agreement may be perceived by the host country as an unacceptable obstacle<ref>Peter W., Kuyper J., Candolle B., 1995, p.5,14</ref>. | ||
{{infobox5|list1={{i5link|a=[[Lease Extension]]}} — {{i5link|a=[[Placement fee]]}} — {{i5link|a=[[Fully funded]]}} — {{i5link|a=[[Conditions of sale]]}} — {{i5link|a=[[Applicable federal rate]]}} — {{i5link|a=[[Country risk]]}} — {{i5link|a=[[Permanent employment]]}} — {{i5link|a=[[Arms length price]]}} — {{i5link|a=[[Grant date]]}} }} | |||
==References== | ==References== | ||
* Laird I. A., Sabahi B., Sourgens F. G., | * Laird I. A., Sabahi B., Sourgens F. G., Weiler T. J., (2014), [https://books.google.pl/books?id=omi2AwAAQBAJ&pg=PA288&dq=investment+agreement&hl=pl&sa=X&ved=0ahUKEwi7g6io4OflAhWS2aQKHUDfD-QQ6AEIUzAE#v=onepage&q=investment%20agreement&f=false ''Investment Treaty Arbitration and International Law - Volume 7''], JurisNet LLC, United States | ||
* Peter W., Kuyper J., Candolle B., (1995), [https://books.google.pl/books?id=g3XhTx1NTvIC&printsec=frontcover&dq=investment+agreement&hl=pl&sa=X&ved=0ahUKEwiXgr2c7eflAhWBaFAKHcASACMQ6AEIKDAA#v=onepage&q=investment%20agreement&f=false ''Arbitration and Renegotiation of International Investment Agreements''], Kluwer Law International, London | * Peter W., Kuyper J., Candolle B., (1995), [https://books.google.pl/books?id=g3XhTx1NTvIC&printsec=frontcover&dq=investment+agreement&hl=pl&sa=X&ved=0ahUKEwiXgr2c7eflAhWBaFAKHcASACMQ6AEIKDAA#v=onepage&q=investment%20agreement&f=false ''Arbitration and Renegotiation of International Investment Agreements''], Kluwer Law International, London | ||
* VanDuzer J. A., Simons P., Mayeda G., (2013), [https://books.google.pl/books?id=RMok32RX0KYC&pg=PA538&dq=INVESTMENT+AGREEMENT&hl=pl&sa=X&ved=0ahUKEwjA-sqr6OflAhXQzqQKHbSlBU4Q6AEISjAD#v=onepage&q=INVESTMENT%20AGREEMENT&f=false ''Integrating Sustainable Development Into International Investment Agreements''], Commonwealth Secretariat, United Kingdom | * VanDuzer J. A., Simons P., Mayeda G., (2013), [https://books.google.pl/books?id=RMok32RX0KYC&pg=PA538&dq=INVESTMENT+AGREEMENT&hl=pl&sa=X&ved=0ahUKEwjA-sqr6OflAhXQzqQKHbSlBU4Q6AEISjAD#v=onepage&q=INVESTMENT%20AGREEMENT&f=false ''Integrating Sustainable Development Into International Investment Agreements''], Commonwealth Secretariat, United Kingdom | ||
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==Footnotes== | ==Footnotes== | ||
<references/> | <references/> | ||
[[Category:Financial markets]] | [[Category:Financial markets]] | ||
{{a|Weronika Nowak}} | {{a|Weronika Nowak}} | ||
Latest revision as of 23:19, 17 November 2023
Investment agreement may play an important role in determining the amount of compensation due in arbitration proceedings. The significance of the contract will depend on a number of factors:
- including whether there are formulas (or index clauses) that determine the project's revenues, expenses and taxes, or which give the investor the right to compensation.
- The impact of the investment agreement on damages also varies depending on the applicable standard of compensation, in particular between fair market value and full compensation. The differences between the two standards are often blurred, but they can be explained by considering how the investment agreement fits the analysis.
The investment agreement can play a significant role in informing about the amount of damage, this role should not be confused with the establishment of a standard of compensation. In most arbitration between the investor and the state, the fair market value is the lower limit of compensation, and the agreement cannot work to eliminate the lower limit. Therefore, in the absence of an unusual treaty provision, investors should not worry about investment agreements restricting their rights under investment agreements [1].
International investment agreement
International investment agreement - international agreement on foreign investment. It is a general term that may refer to investment provisions contained in many types of international agreements, including bilateral investment agreements, regional investment agreements and investment chapters of bilateral and regional free trade agreements. Often referred to as "IIA"[2].
The transnational investment agreement
"The term "transnational investment agreement" refers to legal relationships, whereby a state, generally a Third-World country, or a state enterprise enter into an agreement with a foreign investor, usually a transnational company, for the purpose of an investment project". One of the disadvantages of a transnational investment agreement is its longevity. The host country must sign a long-term commitment for 10-25 years. The long-term nature of these agreements is dictated by objective reasons:
- no foreign company can accept investing its resources in a high-risk and cost project that will generate income only after a few years, without binding commitment to important negotiation matters.
But the assumptions of the parties on whom the agreement is based may be refused or the government's priorities may change, and after some time after signing the agreement may be perceived by the host country as an unacceptable obstacle[3].
| Investment agreement — recommended articles |
| Lease Extension — Placement fee — Fully funded — Conditions of sale — Applicable federal rate — Country risk — Permanent employment — Arms length price — Grant date |
References
- Laird I. A., Sabahi B., Sourgens F. G., Weiler T. J., (2014), Investment Treaty Arbitration and International Law - Volume 7, JurisNet LLC, United States
- Peter W., Kuyper J., Candolle B., (1995), Arbitration and Renegotiation of International Investment Agreements, Kluwer Law International, London
- VanDuzer J. A., Simons P., Mayeda G., (2013), Integrating Sustainable Development Into International Investment Agreements, Commonwealth Secretariat, United Kingdom
Footnotes
Author: Weronika Nowak
