Sergio Galvis, the head of Sullivan & Cromwell’s Latin America practice, commented on bilateral investment treaties (BITs) in a Financial Times article about a dispute over a major mining project between Uruguay and a private investor from India. In an arbitration that the investor brought under an investment protection treaty between the U.K. and Uruguay, the tribunal rejected the investor’s claims, holding that they were not covered by the treaty because the claims were brought through his British children’s interest in a trust controlling the Uruguayan assets. This interest in the trust was not deemed to be an investment under the treaty.
Sergio told the Financial Times that this case serves as an example of how investments need to be carefully structured to take advantage of certain bilateral investment treaties. “Although some may view this dismissal on a technicality, BITs by their terms have limits on who falls under their umbrella,” he said. “This means investors seeking political risk protection through a BIT need to consider how their assets are held.”
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