The impact of investment treaties on companies, shareholders and creditors

Investment treaties are concluded between two or more governments and typically offer covered foreign investors protection for their investments from host government conduct in violation of the treaty such as expropriation without compensation, discrimination or treatment that is not “fair and equitable”. This chapter identifies the unique combination of rules applied under many investment treaties which includes rules about the types of loss recoverable by shareholders covered by treaties and about the availability of damages for covered investors in claims against governments. The chapter considers the incentives created by these rules and how they may affect companies, shareholders, creditors and capital markets. It also considers how those incentives may affect corporate structuring of investment.