Latin America's economic growth over the last five years has positioned it as one of the main destinations for foreign investment. Rachael Kent and Nicolás Costábile of WilmerHale discuss issues arising in arbitrating with states or state-owned entities in three key areas for foreign investment: Mexico, Brazil and Colombia
Despite the region's slowing rate of growth, the number of projects and publicprivate partnership transactions has continued to increase, with an estimated value in 2014 of USD 56.3 billion.
States and state-owned entities are major participants in national and international business transactions, especially in strategic sectors such as energy, infrastructure, transport and telecommunications. Since states are generally unwilling to submit to a foreign court, and foreign investors often are not prepared to accept the jurisdiction of courts of the state party, arbitration clauses have become increasingly frequent in contracts with states or state-owned entities.
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