LATVIA Law and Practice Contributed by: Agita Sprūde, Artūrs Kazāks and Valts Nerets, Sorainen
5.3 Security for Costs The Arbitration Law does not provide the tribunal with the power to issue a decision on security for costs in local arbitral proceedings. However, decisions of international tribunals on security for costs are allowed and may be enforceable if it can be substantiated that they are final and binding decisions on that particular matter. 6. Third-Party Funding 6.1 Prevalence of Third-Party Funding Third‑party funding of investor–State claims is permit- ted and has become more common. Latvia’s proce- dural rules do not expressly prohibit third‑party fund- ing. International tribunals hearing Latvian disputes have dealt with funding-related issues in the proce- dural orders. 6.2 Third-Party Funding Case Law Domestic Latvian jurisprudence specifically address- ing third‑party funding in investment arbitration is sparse. However, international tribunals involving Latvia have treated funding disclosures and related procedural consequences per standard international practice. The recent trend across the EU to require transparency about funding has influenced practice in Latvian matters. 6.3 Disclosure and Security for Costs Tribunals and courts may require disclosure of third‑party funding arrangements where relevant to conflicts of interest or to applications for security for costs. While Latvia lacks a detailed statutory regime for funding disclosure, common practice – particularly in ICSID and other major institutional arbitrations – has been to require disclosure where funding affects fair- ness or the tribunal’s impartiality. 7. Other Procedural and Evidentiary Issues 7.1 Notice of Dispute and Consultation Period Pre‑arbitration steps vary by treaty. Many Latvian BITs (and other IIAs) require notice and a cooling‑off/con- sultation period (often 3–6 months) before recourse to
arbitration. Procedural preconditions in a treaty (eg, negotiation periods, exhaustion of local remedies in narrow circumstances) must be observed. Claimants typically follow the treaty’s notice requirements and attempt consultations before initiating arbitration. 7.2 Confidentiality and Transparency Balancing confidentiality with transparency, Latvia follows the international arbitration norm of private proceedings. However, there is growing demand for transparency in investor–State disputes (public inter- est, environmental and human rights dimensions). Latvia‑related tribunals have released redacted docu- ments or published awards when required by treaty or tribunal practice. Domestic reforms increasing pub- lic access to dispute information and the influence of multilateral instruments (eg, UNCITRAL rules on transparency for certain treaty disputes) are relevant. Arbitral tribunals typically award compensatory mon- etary relief rather than punitive damages. Injunctive forms of relief are rare in treaty arbitration (and may be difficult to enforce against sovereign states). Still, tri- bunals can grant restitutory or declaratory relief within their competence and order specific performance only to the extent practically available. Punitive damages are typically not awarded, as this would be against the Latvian public policy and thus not recognised. 8.2 Methodologies for Quantum Assessment Quantum methodologies commonly used in Lat- via‑related disputes include discounted cash flow (DCF) for business valuation, market‑value approach- es, and cost‑based methods for replacement or recon- struction. The DCF remains the leading methodology for claims of loss of profits, subject to careful assump- tions about cash flows, discount rates and mitigation. 8.3 Recovering Interest and Legal Costs Parties commonly recover interest on awards (pre‑ and post‑award interest). Tribunals regularly award legal and expert costs where the arbitration rules or governing treaty permit and where the tribunal finds appropriate. Cost allocation is case‑specific, 8. Damages and Valuation 8.1 Remedies
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