THE IMPACT OF INVESTMENT LITIGATION ON THE PUBLIC FUNDS

Abstract

Investment disputes cause important burdens to the host country, especially in terms of the attractiveness of foreign direct investments (FDI). For the host countries, the recourse to FDI is an important stake for the development since it makes it possible to form a fixed capital, technical progress due to the transfer of technology, without forgetting the increase of the exchanges and the creation of employment. Nevertheless, the litigation with the investor is a factor of instability, therefore the existence and the increase in the number of investment disputes leads to a negative reputation.

The objective of this article is to highlight the costs and expenses that may be incurred by investment arbitration proceedings and to propose solutions likely to minimize the impact of these costs and of investment litigation in general on public funds. Thus, in a first place we will carry out an empirical analysis of the charges directly related to the arbitration procedures and to analyze in the second place the mechanisms and the instruments likely to reduce the effects of the arbitral litigation of investment on the public funds.