Issues faced by foreign investors entering into agreements with developing nations

22 November 2012

Professor Luke Nottage comments on the litigation action by Macau-based property investment company, Sanum Investments against the Laos Government in relation to what it claims are illegal seizures of its assets.

Sanum is suing the Lao government for $500 million over a slot-machine club in Vientiane, a hotel and entertainment complex in Savannakhet and land for a similar project in Paksong.
Speaking to The Phomn Penh Post, Professor Nottage says there are some common violations in investor-state arbitrations.
"In recent years, the most common alleged or actual breaches have probably been indirect expropriations," he asserts.

"For example, changes to tax regimes disproportionately targeted at or affecting foreign investors... or violation of 'fair and equitable treatment'".
He says examples of direct expropriation had been on the increase, pointing to a case involving the British mining company Churchill and Indonesia.
He adds thatcompanies considering investment in developing Asia-Pacific nations should ensure their home countries have a thorough investment agreement with the target nation.
"Ensure your home state has included a comprehensive, carefully drafted investment treaty- including an investment chapter in a free-trade agreement- that includes provisions for investor-state arbitration before an international tribunal like ICSID."
View the entire article - Warning on investment in Laos - The Phomn Penh Post

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