BOT and Exit by Dispute Settlement: a Vietnamese Case Study
(2005)Department of Law
- Abstract
- The BOT model is a type of concessionary arrangement that is gaining tremendous popularity in developing countries as a method of infrastructure project financing. In its most common form, a Build-Operate-Transfer (BOT) arrangement involves a developing country government that has decided to build new infrastructure and cannot afford the project or does not want to incur the liability of repaying a multilateral loan. A contract is concluded between host government and a foreign investor, where the foreign investor builds the industrial project, operates it for a set duration and then transfers it back to the government, without further compensation. Incentives for the foreign investors are expanded markets and reduced production costs.... (More)
- The BOT model is a type of concessionary arrangement that is gaining tremendous popularity in developing countries as a method of infrastructure project financing. In its most common form, a Build-Operate-Transfer (BOT) arrangement involves a developing country government that has decided to build new infrastructure and cannot afford the project or does not want to incur the liability of repaying a multilateral loan. A contract is concluded between host government and a foreign investor, where the foreign investor builds the industrial project, operates it for a set duration and then transfers it back to the government, without further compensation. Incentives for the foreign investors are expanded markets and reduced production costs. Financing is usually provided on a limited recourse basis and the income that derives from the project's operation is then used to repay the lenders. The massive interest foreign investors have shown in Asia, Africa and Eastern Europe suggests the substantial potential of break-through markets like Vietnam. However, investors will want to proceed with caution. The decision to invest in a foreign country - especially where BOT projects are concerned, seeing as how substantial outlays of capital over a long period of time are at stake - should also be made on the basis of other factors, discussed infra as specific risks. Regarding the legal risk, one of the more important aspects is the way in which disputes between the host country and foreign investors are resolved. When investors find themselves in difficulties, they will want to have a reliable exit from an investment gone wrong&semic in most cases, the chosen form for this is by way of dispute settlement. In the present thesis, the applicability of dispute settlement as an exit mechanism for the foreign investor in Vietnam will be examined. The different alternatives at hand for commercial parties - litigation, domestic and international arbitration, various alternative dispute resolution techniques - are accounted for in the following, with an attempt at appraising their actual usefulness in the Vietnamese context. Accepted ''facts'' in the field of commercial dispute settlement, such as the superiority of international arbitration over litigation, may or may not be applicable in the special commercial and legal environment that Vietnam is, considering the country's history and political policies. Since the writers had the advantage of performing a field study, a certain emphasis in respect of the practical context is generally added, in addition to the necessary descriptive and theoretical presentations. (Less)
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http://lup.lub.lu.se/student-papers/record/1562761
- author
- Varga, Helena and Lindgren, Sara
- supervisor
- organization
- year
- 2005
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- Förmögenhetsrätt
- language
- English
- id
- 1562761
- date added to LUP
- 2010-03-08 15:55:30
- date last changed
- 2010-03-08 15:55:30
@misc{1562761,
abstract = {{The BOT model is a type of concessionary arrangement that is gaining tremendous popularity in developing countries as a method of infrastructure project financing. In its most common form, a Build-Operate-Transfer (BOT) arrangement involves a developing country government that has decided to build new infrastructure and cannot afford the project or does not want to incur the liability of repaying a multilateral loan. A contract is concluded between host government and a foreign investor, where the foreign investor builds the industrial project, operates it for a set duration and then transfers it back to the government, without further compensation. Incentives for the foreign investors are expanded markets and reduced production costs. Financing is usually provided on a limited recourse basis and the income that derives from the project's operation is then used to repay the lenders. The massive interest foreign investors have shown in Asia, Africa and Eastern Europe suggests the substantial potential of break-through markets like Vietnam. However, investors will want to proceed with caution. The decision to invest in a foreign country - especially where BOT projects are concerned, seeing as how substantial outlays of capital over a long period of time are at stake - should also be made on the basis of other factors, discussed infra as specific risks. Regarding the legal risk, one of the more important aspects is the way in which disputes between the host country and foreign investors are resolved. When investors find themselves in difficulties, they will want to have a reliable exit from an investment gone wrong&semic in most cases, the chosen form for this is by way of dispute settlement. In the present thesis, the applicability of dispute settlement as an exit mechanism for the foreign investor in Vietnam will be examined. The different alternatives at hand for commercial parties - litigation, domestic and international arbitration, various alternative dispute resolution techniques - are accounted for in the following, with an attempt at appraising their actual usefulness in the Vietnamese context. Accepted ''facts'' in the field of commercial dispute settlement, such as the superiority of international arbitration over litigation, may or may not be applicable in the special commercial and legal environment that Vietnam is, considering the country's history and political policies. Since the writers had the advantage of performing a field study, a certain emphasis in respect of the practical context is generally added, in addition to the necessary descriptive and theoretical presentations.}},
author = {{Varga, Helena and Lindgren, Sara}},
language = {{eng}},
note = {{Student Paper}},
title = {{BOT and Exit by Dispute Settlement: a Vietnamese Case Study}},
year = {{2005}},
}