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Corporate Finance & International Arbitration

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by

Cole DeBlaey

on 29 June 2015

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Transcript of Corporate Finance & International Arbitration

-Our clients, US/UK investment firms, have routinely invested $10 billion a year in iron ore based on a 5-year contract via Chilean and Brazilian national banks, which then transfered assets to the Los Bronces mines (Chile @2.4 billion a year) and the Minas-Rio Iron Ore project (Brazil @ 7.6 billion a year).
Topics for Today's Discussion
International Arbitration v. Formal Lawsuit Venues
Multilateral, Bilateral, and Regional Treaties

Responsibility of the State (Brazil and Chile) for any breaches by their banks
Formal Lawsuit
-Three threshold determinations would need to be made
Choice of Forum
In which forum should the lawsuit be brought?
Choice of Law
Which law governs the transaction?
Jurisdiction
Whether the court our client brings their suit in can exercise jurisdiction over the potential foreign defendants?
Jurisdiction
Whether the court our client brings their suit in can exercise jurisdiction over the potential foreign defendants?
Choice of Law
What law governs this transaction?
Advantages
What's going on here?
International Arbitration v. Formal Lawsuit Venues

Overall advice for our clients regarding filing a formal lawsuit
Corporate Finance & International Arbitration
SCENARIO 3
-Our clients are seeking relief via international arbitration or a formal lawsuit for breach in the transfer of funds from the foreign national banks to the iron ore companies
Choice of Forum
Which forum makes the most sense?
This IBT involves four different nations and each is potential forum in which a formal lawsuit can be brought
Using the US as example, Advantages, Disadvantages, and other considerations (state or federal court, forum non conveniens)for our US client
Five possible sources of law
domestic law of client (UK and/or US)
domestic law of defendant (Brazil and/or Chile)
international law - usually embodied in a treaty
In applying its own domestic choice of law rules in an international conflicts of law context - which becomes an application of private international law - a domestic courts typically weighs a number of factors:
the needs of the interstate and international systems
relevant policies of the forum, other interested states, and the relative interests of those states in the determination of the particular issues
protection of justified expectations
basic policies underlying the field of law (certainty, predictability, and uniformity of result)
ease in determination and application of the law to be applied
-This threshold question may present problems for our client when asking a court to assert jurisdiction
DISADVANTAGES
>
Litigation is very time consuming due to all the formalities that must be followed in any court-based process of litigation
Inflexible and based on formal models
Adversarial in nature
Business relationship between the parties may not survive after the lawsuit, even if dispute itself is determined to be minor
Pros
Saves time
Saves money
Flexibility
Expertise
Neutrality
Confidentiality
Enforceability
Mitigation of Hostilities
Recommendation
Recommend our client forgo litigation by way of alternative dispute resolution such as international arbitration

BILATERAL AND MULTILATERAL INVESTMENT TREATIES
What are they?
Bilateral: An investment agreement between two States meant to promote and protect private interest by nationals (companies or individuals) of one State in the territory of the other State (the "host" State).
Multilateral: A similar trade or investment agreement between three or more parties.
Protections
Dispute Resolution Clauses
US / Chile
Free Trade Agreement between the Government of the United States of America and the Government of the Republic of Chile
Initial Steps
Location and Rules of Arbitration
US / Brazil
Agreement on Trade and Economic Cooperation Between the Government of the United States of America and the Government of the Federative Republic of Brazil
A BIT and MIT wasteland
Domestic remedies in Brazil
UK / Chile
Bilateral: Agreement Between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Chile for the Promotion and Protection of Chile
Multilateral: Agreement Establishing an Association between the European Community and the Republic of Chile
UK / Brazil

ONCE AGAIN - A BIT AND MIT WASTELAND
Domestic Remedies in Brazil
Responsibility of the State (Chile / Brazil) for breaches by their banks
GENERALLY
The conduct of any state organ shall be considered an act of the state under international law whether the organ exercises legislative, executive, judicial or any other function whatever position it holds in the organization of the state, and whatever its character as an organ of the central government or of a territorial unit of the state
An organ includes any person or entity which has that status in accordance with the international law of the state
Brazil
and
Chile

Both members to the UN
The general definition under Article 4 of the ILC applies to both Countries
ILC = INTERNATIONAL LAW CONFERENCE
SOEs in Brazil
Public Enterprises
Private/Public Joint Ventures
CHILE
Generally Public Enterprises
Conclusion
Questions?
Comments?
Concerns?
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