Subjects:

Arbitration and Dispute Resolution

When competing expert witnesses provide widely divergent estimates of value—each doing an excellent job of highlighting the weaknesses of the evidence from the opposing expert witness—how does an arbitrator arrive at an independent and equitable determination?

Breaking through conceptual roadblocks that at bottom are based on a lack of exposure to valuation procedures rather than on any uncertainty about legal principles, this enormously useful volume is addressed particularly to the many arbitrators with sound commercial knowledge but little hands-on experience with valuation studies.

It provides a clear understanding of the nuts and bolts of valuation methods, drawing on a prodigious wealth of standards and procedures endorsed by internationally respected institutions, as well as on relevant decisions of a wide variety of local, national, and international fora. It reviews tools that arbitrators may employ to reach their final compensation assessment on a principled basis. The book’s many practical recommendations greatly elucidate the decision making processes entailed in three central aspects of the arbitrator’s role:

• advance planning to enhance understanding of expert valuation evidence;
• identification of “apples-to-oranges” miscomparisons; and
• recognition of the true comparability between the business at issue and other examples offered in the expert evidence.

The presentation focuses not only on the legal standards applicable to the valuation (full or adequate compensation, reparations, restitution, actual loss, fair market value, fair or reasonably equivalent value, lost profits, etc.), but also on the informed judgment and reasonableness that must enter into the process of weighing the facts of each case and determining its aggregate significance.

In its practical assistance to arbitral tribunals presented with complex business valuation in the quantum phase of a hearing, this book shows a thoughtful and proactive arbitrator how to help him or herself and provides a full measure of the valuation expertise required. In a more deeply significant way, the author reveals how the arbitration community can move closer toward a common language and consistent principles—a Valuation Mercatoria.