Multinational corporations are used to litigation, but all things being equal, they’d rather not be litigating in the courts of emerging nations, where precedent can be scanty, corruption remains a wild card, and GDP per capita wouldn’t cover the cost of a general counsel’s laptop. A generalized distrust of the other guy’s local judges has always been the main reason parties bring their cross-border disputes to international arbitrators. Just how well-founded is this fear?
A look at the Arbitration Scorecard, our biennial survey of the world’s largest arbitrations shows that, yes, local courts themselves can generate disputes. In at least 20 cases in this year’s Scorecard, claimants allege that states used their domestic legal machinery to victimize foreign investors. “There’s no doubt about it,” says Geoffrey Cowper of Fasken Martineau, who acts for a Canadian mining company entangled in litigation in the Congolese courts. “Local court proceedings are an increasingly frequent concomitant of a state-investor claim.”
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