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March 02, 2021
Brattle Experts Contribute to New Book on Damages in International Arbitration

Brattle experts have authored three chapters in Global Arbitration Review’s The Guide to Damages in International Arbitration (Fourth Edition).

Principals M. Alexis Maniatis, Fabricio Nuñez, and Jack Stirzaker, and Senior Associate Ilinca Popescu-Draganesti coauthored “Accounting-Based Valuation Approach.” They explain that experts may find accounting-based asset values (AAV) useful when the standard methods for valuation in the context of international arbitration are not available. “Parties to an arbitration may argue in favor of an AAV method when they consider that an income or market approach is not appropriate,” perhaps because there is insufficient information to quantify the cash flows or there are no reliable comparables. The authors also propose a framework to guide the selection and implementation of the AAV approach for valuation in international arbitration.

Principals Darrell Chodorow and Florin Dorobantu coauthored “Damages in Oil and Gas and Mining Arbitrations.” The mining and oil and gas sectors are highly internationalized, resulting in frequent investor-state and commercial disputes involving large damages claims. While valuation methods fall into the traditional income, market, and cost approaches, their application is subject to special considerations resulting from the distinguishing characteristics of natural resources extraction projects. The authors discuss how to apply various approaches to generate reliable valuations and damages estimates in these sectors. 

Academic Advisor James Dow authored “Pre-Award Interest,” in which he explains that pre-award interest arises in most cases when damages are awarded. Arbitration disputes typically involve amounts of money at different times, and these amounts of money “are brought forward or backward using different rates, such as the cost of capital and the pre-award interest rate.” The author analyzed 248 decisions issued by ICSID to determine which rates tribunals rely on, and he discovered that 68 of the 248 decisions awarded pre-judgment interest.

The full book is available on the Global Arbitration Review website.