Why and How Arbitral Tribunals Award Compensation For Moral Damages?
Until very recently, the issue of moral damages had arisen in only a handful of investor-State disputes. However in 2008 and 2009 alone, no less than five arbitration awards discussed the issue. While some tribunals dismissed moral damages claims based on lack of evidence (Pey Casado v. Chile; Biwater v. Tanzania and Europe Cement v. Turkey) or lack of jurisdiction (Cementownia v. Turkey), in one such case, Desert Line Projects LLC v. Yemen, the Arbitral tribunal awarded an amount of US$1 million in compensation to a corporation. This post examines why and how arbitral tribunals established under investment treaties award monetary compensation for moral damages suffered by foreign investors [...]
How to remediate moral damages suffered by a State?
The concept of “moral damage” as long been recognised at international law. Article 31 of the International Law Commission (“I.L.C.”)’s Articles on State Responsibility provides that a State must make full reparation for any “injury” caused to another State by an internationally wrongful act and defines “injury” as “any damage, whether material or moral, caused by the internationally wrongful act of a State.” Until very recently, the issue of moral damages had arisen in only a handful of investor-State disputes. However, in 2008 and 2009 alone no less than five arbitration awards discussed the issue. In one such case, Desert Line Projects LLC v. Yemen the Arbitral tribu [...]
Are BITs Representing the “New” Customary International Law in International Investment Law?
For many years, no broad international consensus emerged on the existing protection for foreign investors as a result of differences of approaches between developed and developing States. As a result of this perceived lack of established customary principles, States concluded thousands of bilateral investment treaties in the 1990s for the promotion and the protection of investments (BITs). The number of BITs is now so overwhelming (over 2,500 according to UNCTAD, Recent Developments in International Investment Agreements (2006-June 2007), IIA Monitor No. 3, 2007) and their scope so comprehensive that a new debate has recently arisen in doctrine about the impact of these treaties on the exist [...]
Can a State claim the status of “persistent objector” in investor-State arbitration?
The question of the existence of legal protection for foreign investors under customary international law has always been controversial. States have indeed entered into BITs precisely because of the lack of development of relevant custom rules in the field of international investment law. It is nonetheless largely agreed today that some rules of customary law have emerged. For instance, one such rule is the obligation for the host State of an investment to provide foreign investors with the “minimum standard of treatment”. Another is that the host State cannot expropriate a foreign investor’s investment unless four conditions are met: the taking must be for a public purpose, as provided by l [...]
