Abstract

Abstract The evolution of claimed damages valuation in investor-State dispute settlement (ISDS) has raised concerns with States, who are coming to believe that quantum is out of control. The magnitudes keep growing of ISDS claims predicated on speculative assumptions that render the future operations of claimants extremely profitable. Further, the common approach to inflating ISDS by means of discounted cash flow (DCF) calculations, is being boosted by novel and complex methodological approaches beyond the grasp of most arbitrators. Case examples illustrate how claimants and their experts have successfully exploited structural defects of ISDS to exaggerate quantum by overwhelming adjudicators with evidence inadmissible in a court setting. A string of indefensible decisions and exaggerated claims raises the possibility that investors may even be motivated to promote expropriation of projects, because of the prospect of inflated damages claims down the road.

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