Remedies for Wrongful Conduct : Lessons from Investment Arbitration

This chapter considers the impact of the case law in investment arbitration proceedings on general international law. The chapter identifies apparent discrepancies between the practices of inter-State courts and tribunals established under general international law, on the one hand, and investment tribunals, on the other hand. It notably analyses the legal basis for ordering remedies and the types of remedies commonly available in the event of a breach of a primary rule. On that basis, the chapter seeks to identify lessons to be learnt by inter-State courts and tribunals from the practice of investment tribunals. The chapter concludes that all international courts and tribunals, whether established under general international law or international investment treaties, profess to apply a similar legal standard in determining the remedies to which the injured party is entitled—the principle of full reparation. The implementation of this legal standard, however, is less consistent. Notable dividing lines concern the types of remedies ordered; the approach to ascertaining the amount of compensation; and the attitude towards awarding moral damages. The chapter argues that the substantial body of investor-State decisions addressing questions of remedies as well as the reactions to those decisions by States and other stakeholders warrant closer attention by other international courts and tribunals. Investment arbitration has proved to be a veritable laboratory for testing the International Law Commission’s codification of the law on State responsibility in modern legal practice. Many of the challenges identified in investor-State proceedings are pertinent for international legal practice more generally. There is no reason why other courts and tribunals should not benefit from that collective learning experience