Investing in a foreign country can be a smart business decision but can also present its own set of challenges. One of the main concerns is the fair treatment of foreign investors by the host government. This is where Bilateral Investment Treaties (BITs) can come into play. BITs are agreements between two countries that provide legal and financial protection to foreign investors. However, if disputes arise despite the BIT, investors may be able to rely on investor-state dispute settlement (ISDS) through international arbitration. This blog post will examine the steps involved in negotiating with a foreign government under a BIT before commencing an ISDS and explore the benefits of seeking the guidance of an international arbitration attorney.
Understand the BIT and its terms
Before investing in a foreign country, it is crucial to understand the BIT between your home country and the host country. This includes knowing the specific terms and protections afforded to investors. Conducting market research on the investment climate in your host country can also help determine the possible risks and possible dispute scenarios. In addition, investors can benefit from understanding the language and legal system of the host country to ensure that all legal documents and proceedings are accurately interpreted. To find the proper BIT, visit International Investment Agreements Navigator | UNCTAD Investment Policy Hub
Attempt informal negotiations.
If a dispute arises or if the host government has taken action against your investment that violates the BIT, attempt to resolve the issue informally with the host government. Often a dispute can be resolved through dialogue between the two parties without resorting to legal action. Formal communication in writing and in person can be essential to presenting your case and understanding the position of the host country. Keep records of all communication and proposals, both good news, and bad.
Initiate formal negotiations
If no amicable agreement can be reached, the next step may be to initiate formal negotiations. This could include presenting a notice of dispute or request for consultations under the BIT. A negotiation process may ensue, with the parties exploring avenues for resolution through mediation, facilitated negotiation or conciliation. If these methods fail, the dispute may again proceed to arbitration.
Engage in Investor-State Dispute Settlement
If after formal negotiations, a dispute remains unresolved, investors can proceed towards ISDS. This settlement can involve taking legal action against the government of the host country. However, ISDS should be used as a last resort as it can be lengthy, costly, and uncertain. An ISDS may involve an international arbitrator who hears the case and delivers a final, binding decision. The award from the arbitrator is enforceable in more than 160 countries under the New York Convention.
How Can an International Arbitration Attorney Help?
Navigating BIT and ISDS proceedings can be incredibly complex. It is the right moment for investors to seek guidance from an international arbitration attorney who can help with expert advice and support. From evaluating BIT provisions, assisting with negotiations, conducting case evaluations, and assessing potential exposure, a legal representative with experience in investor-state arbitration matters can be a valuable asset to help secure the best possible outcome for the investor.
At Transnational Matters, we understand that ISDS proceedings are complex matters requiring specialized legal expertise. Our team of experienced attorneys are dedicated to providing the best legal representation for our clients in ISDS cases. We have a long history of successful outcomes, and strive to ensure that each of our clients receives the most favorable result possible. Our attorneys are well-versed in international law, allowing us to provide counsel on matters ranging from cross-border trade disputes to investor-state disputes. We are committed to providing the highest quality of representation in any ISDS proceeding, and we are dedicated to helping our clients achieve their goals. Our commitment to excellent service and our experience makes us the perfect partner for your needs in an ISDS case. Please visit International Investment Disputes Lawyer – Transnational Matters for more information.
Investing in a foreign country can bring significant opportunities for investors, but the risks can outweigh the benefits. Being prepared and proactive can reduce the challenges that can arise from the risky business. When navigating BIT negotiations, it’s important to understand the BIT provisions, communicate effectively with the host government, and seek the guidance of an international arbitration attorney. Such legal support ensures a successful process, including possibly avoiding the necessity of ISDS proceedings, making your investment experience smooth and profitable.