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Use of International Courts of Arbitration in Transactions with Foreign Partners

  • Latvia
  • Other

27-03-2014

Author: Artis Straupenieks

Dienas Bizness, Saldo No.45 (194) 27.03.2014

Any taxpayer has the right to choose the type of commercial activity and business partners freely, except for the cases specified in normative acts. However, it should be taken into account that commercial activity is subject to various risks related with both the possible non-fulfilment of obligations by the business partners, and the possible tax consequences due to involvement in fraudulent transactions aimed at gaining fiscal advantages in the form of value added tax.

Lately, several issues related to courts of arbitration have arisen in the society. One such legislation-related issue is the Courts of Arbitration Draft Law, which is currently being reviewed by the Saeima. Its main goals is to reduce the number of courts of arbitration currently working in Latvia (there are 213 courts of arbitration in Latvia now), and to improve the existing regulation of courts of arbitration.

Another topicality is definitely the information announced approximately half a year ago regarding the risk faced by Latvia to be sued in an international court of arbitration dealing with investment protection in relation to possible violations of the rights of foreign investors Rixport, Bertolt Flick, and Winergy. These facts have cast a shadow on the courts of arbitration once again. However, as we know, the devil is not as black as he is painted. Therefore Artis Straupnieks in this article offers a slightly different view on the courts of arbitration by drawing readers’ attention to the information not on the local but the international courts of arbitration instead and by revealing their potential and possibilities of using them in business with foreign partners.

Full article in Latvian language available here.

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