Regulatory interference renders arbitration a costly affair

Author: Brian Yap | Published: 8 Mar 2017

It is possible that domestic regulators may interpret a joint venture (JV) agreement differently, even if an arbitral tribunal has arrived at a different conclusion, according to panelists at IFLR’s Asia M&A Forum last week.

Speakers at the forum acknowledged greater acceptance and recognition by Asian courts of arbitral awards granted overseas. But they argued that, in many cases, domestic and local factors override regardless of where arbitration is seated, especially in emerging markets in Asia.

"In insurance JVs in India, it is possible that the insurance regulator may adopt a different interpretation of the agreement, even if an arbitral tribunal has arrived at a different conclusion, "said Harsh Pais, partner at Trilegal in Mumbai. He added that, in this regard, a domestic award may even carry more weight.

Over a decade ago, the region saw a lot of foreign investors facing difficulties enforcing...