Valuation for Arbitration: Uses and Limits of Income-Based Valuation Methods
Article from: TDM 6 (2007), in Compensation and Damages in International Investment Arbitration
A central issue in many business investment disputes is whether and how the alleged conduct by the respondent injured the ongoing prospects for that business; in other words, the future stream of earnings. Valuation "is, in essence, a prophecy as to the future." To assess damages suffered by a company, or to value a business based upon its value to third parties, an arbitrator or an expert must necessarily answer questions about that future. What would the revenues have been? The expenses? Would additional capital have been required? How certain or reliable are those ...