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Analysis Group Coauthors Explore the Use of Event Studies in International Arbitrations
Investor-state disputes frequently involve claims that a host state’s action harmed the value of assets held by foreign investors. While such claims are often evaluated using a discounted cash flow analysis or a comparable company multiples analysis, the event study methodology offers another potentially useful valuation approach.
In an Analysis Group feature, Managing Principal Samuel Weglein, Principal Chris Feige, and Vice President Mark Berberian review the event study methodology, its utility for assessing merits and quantum, and tribunals’ response to event studies in past international arbitration matters. The authors also suggest the possible application of event studies to the evaluation of investor expectations in the merits phase of an arbitration, noting that tribunals are often tasked with determining whether a host government improperly frustrated investors’ legitimate expectations regarding the legal framework impacting their investment. By analyzing changes in stock prices (or other relevant price data), event studies may offer insight into the legitimacy of the expectations underlying investors’ claims in the context of market expectations. The authors emphasize that the usefulness of event studies in international arbitrations requires that they are “designed, executed, and explained to tribunals with rigor and a keen sense of their fit to the matter.”
Associated People
Chris Feige
PrincipalMr. Feige specializes in the areas of finance, securities, and financial markets. He has worked on and managed a range of securities and valuation projects in the UK and Europe. Mr. Feige has been appointed as expert in Dutch court to provide valuation and securities claims reports in support of Steinhoff’s global securities settlement, and gave evidence in the Dutch Enterprise Chamber regarding the valuation of Getir. He has also managed teams evaluating shareholder reliance and disclosure materiality and estimating counterfactual share prices in UK Financial Services and Markets Act (FSMA) Section 90A litigation matters. Mr. Feige has supported experts analyzing the volume of false and spam accounts on Twitter, Twitter’s information security infrastructure, Twitter’s data privacy and compliance with a US Federal Trade Commission (FTC) consent decree, and share price and valuation issues on behalf of Twitter in Twitter v. Musk in which Elon Musk eventually purchased Twitter at his initial offer price. In cases involving alleged market manipulation in the foreign exchange (FX) and IBOR markets, he has analyzed trade data and evaluated alleged manipulation strategies. Mr. Feige worked on USA v. Richard Usher, et al., and the Foreign Exchange Class Antitrust Litigation, analyzing FX trade and chat data, as well as competition issues; preparing experts for testimony at trial; and providing data analyses and consulting support to counsel throughout the projects. He has also worked on a range of international arbitration cases, including valuation, damages, and competition analyses. In addition, he has developed complex valuation models, including discounted cash flow models, and analyzed asset-backed securities, collateralized debt obligations, and other securitized products in support of expert testimony in a number of bankruptcy and damages matters. Mr. Feige has also worked on a number of international arbitrations valuing defaulted sovereign debt, expropriated oil fields, and retail operations. His work has been published in several industry journals.