Originally from World Arbitration And Mediation Review (WAMR)

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TAX AND CURRENCY ISSUES IN INTERNATIONAL ARBITRATION

Richard E. Walck*

I. INTRODUCTION Questions regarding taxes and currency arise in a variety of circumstances in the world of international arbitration. This paper addresses some – but by no means all – of the areas in which investors, host states, commercial parties, counsel and tribunals may be required to assess the impact of taxes and currency conversion on the determination of the amount of an award. It begins with a survey of several tax‐related issues arising in international arbitrations. A discussion then follows of the challenges presented in accurately accounting for taxes in arbitral awards. Next comes a review of the various tests for determining the taxability of awards. Finally, the first section concludes with practical advice for navigating complicated tax issu
es in international arbitration. In the second section, this paper addresses issues relating to currency in international arbitration. The section opens with a survey of the numerous currency‐related issues that are addressed in various treaties, principles, conventions and arbitrations. Next follows a discussion of the relationship between currency and interest rates. This section also closes with practical idance to the arbitrtion bar.
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TAXATION ISSUES IN INTERNATIONAL ARBITRATION
A. Introduction: TaxRelated Issues as Found in Treaties and
Arbitrations Tax issues have arisen in a number of investment treaty disputes, as well as in commercial arbitrations, both domestic and