The Billion-Dollar Questions: Unresolved Quantum Issues in IA

Presentation

Where there is no clear consensus among arbitrators and frequent disagreements between opposing experts there can be substantial impact on damages awards. This panel will explore the biggest open questions affecting quantum in international arbitration.

These areas include:

1. Choice of valuation methodology. Particularly for early-stage, capital-heavy development projects when is it appropriate to use a lost-profit (DCF, market, etc…) versus a sunk-cost approach. What criteria and thresholds have tribunals used previously.

2. Currency. Which to use for the valuation? The role of purchasing power parity. How do currency controls and specific currency regimes (such as Venezuela’s) affect valuations? What have experts argued and tribunals decided recently?

3. Comparables. Past transactions versus public valuations. When is a transaction or company considered comparable? How do experts define peer-group comparables?

4. Calculation of pre-award interest: choosing between ‘risk-free’, “commercial” (e.g. SOFR+), cost of equity / WACC.

5. Control premiums: when and why should you add one?

6. Mitigation of damages: what are the standards and how does an obligation to mitigate affect a valuation?

7. Accuracy and scope of data & documents: what are the standards that tribunals used to consider financial data reliable?

The discussion will be concluded with a Q&A segment, with guests invited to continue the conversation with the panel and other delegates over lunch.