Arbitration in B.O.T. contracts : the B.O.T.

Abstract

Infrastructure privatization is initiated through various modes by different countries and can generally include the construction of new privately owned facilities, privatization of existing facilities, concessions or leases, and project financing. B.O.T. [Build-Operate- Transfer] means the government grants investment enterprises an operational concession for a period, permits them to construct and administrate certain public infrastructures by financing, and authorizes them to pay off loans, reclaim investment and make a profit through charging from users or selling products. At the expiration of the concessionary period, the infrastructure is transferred to the government without any expense. In such a legal relation, one subject is local government, and the other is investment enterprises. Their mutual rights and obligations relations are established by signing B.O.T. investment contracts. Traditionally, in all countries conflict of laws has been confined to controversies under private law. Though the rules of law became less rigid in all states in the latter half of the twentieth century, it is routine for courts hearing controversies touching on more than one state, to consider applying foreign law to the substance of any particular controversy. More generally, classical concepts of sovereignty and sovereign interests are resorted to in all kinds of contexts and relations between public and private sectors, such as B.O.T contracts, are increasing relatively. Thus the common to settle disputes is arbitration. In many parts of the world, the private sectors have been using B.O.T. increasingly and resorting to arbitration to settle disputes that result from such relations. Arbitration implies that the parties agree to submit a dispute for settlement to private persons instead of court and thus avoiding the problems mentioned above. Arbitration is a meaningful way to settle such disputes to protect investors' reasonable rights and interests. With Arbitration in B.O.T the best results may be obtained.