Elizabeth Stevens Comments on Mandatory Binding Arbitration in Tax Notes

Developing countries’ opposition to mandatory binding arbitration in mutual agreement procedure disputes often has more to do with suspicion of the unknown than with protecting sovereignty, according to an OECD official.

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Elizabeth Stevens of Caplin & Drysdale suggested that the term itself may have become an obstacle to agreement. She asked, “Given that some developing countries in particular had such negative experiences with nontax arbitration, if we could develop mandatory binding dispute resolution without using the ‘arbitration’ word, would it be possible to get past some of the concerns about sovereignty and fairness and uncertainty about the process?”

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