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Part III Substantive Rights, 9 Compensation

From: International Investment Arbitration: Substantive Principles (2nd Edition)

Campbell McLachlan, Laurence Shore, Matthew Weiniger

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 31 March 2023

Compensation — Damages — Remedies and costs — Discounted cash flow (DCF), anticipated future profits — Interest — Moral damages — Valuation

Chapter 9 examines the obligation upon the State committing the international wrong to make reparation through restitution or monetary compensation. It first considers the international law standards of compensation for expropriation before proceeding to discuss the range of options adopted in practice by arbitral tribunals. It then looks at practical application of the main methods of valuation used to determine the appropriate level of compensation, particularly the ‘discounted cash flow’ method, along with the issue of causation in international law. The chapter concludes with an analysis of five topics that are assuming greater practical importance in the approach of arbitral tribunals to remedies: the award of moral damages in exceptional circumstances; the claimant’s duties of mitigation of loss; the potential for the availability of non-pecuniary remedies; interest; and costs.

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