- Credit risk — Capital markets
In the project finance context, dispute resolution mechanisms are a means of enforcing the allocation of risks among a project’s many participants—sponsors, lenders, contractors and subcontractors, service providers, offtake purchasers, and others. To the extent that a dispute resolution mechanism is swift, flexible, reliable, final, and enforceable, the project’s intended allocation of risks can be maintained. This chapter identifies various dispute resolution mechanisms that are available to project participants and discusses their suitability for the maintenance of a project’s intended risk allocation. It first addresses the options for the resolution of disputes about commercial risks. It then considers options for resolving disputes about political risks. Finally, it discusses the enforcement of arbitral awards and domestic judgments.