31 January 2018
GAR has recently published the second edition of the GAR Guide to Damages in International Arbitration, a publication that assists all participants in the international arbitration community to understand damages issues more clearly and communicate them more effectively to tribunals, with the aim of producing more robust and well-reasoned awards.
This second edition builds on the successful first edition, updating various chapters in light of new developments and includes new chapters addressing such issues as the function and role of damages experts, the applicable valuation approach and country risk premium.
Philip Haberman and Liz Perks have contributed a chapter to this second edition titled “Overview of Methodologies for Assessing Fair Market Value” which introduces the concept of fair market value, discusses when it is used, and outlines the three main valuation approaches (income, market and cost). The chapter includes the uses of these three approaches, their advantages and disadvantages and explains the need to consider adjustments where there is a lack of control or a lack of marketability.
Philip and Liz then conclude the chapter with a summary of how valuers balance the three approaches, summarising that in most cases, valuers begin with the income approach and use the market approach as a secondary valuation to ensure the income approach valuation falls within a reasonable range. They also discuss that if a result is higher or lower than might have been expected, the valuer should ensure to rationalise the result by explaining the reasons why.
This GAR guide is a useful desktop reference for any arbitration practitioner who wishes to have greater confidence when dealing with the numerical aspects of international arbitration. A pdf copy of Philip’s and Liz’s chapter is available here.
If you would like to discuss any topics covered in Liz and Philip’s chapter please contact Liz Perks.
By Sarah Towne, associate
This is an extract from the second edition of GAR’s Guide to Damages in International Arbitration, first published in December 2017. The whole publication is available at https://globalarbitrationreview.com/edition/1001107/the-guide-to-damages-in-international-arbitration-second-edition