Compensation in International Investment Law

States are increasingly recognizing the critical issue of compensation in international investment governance and its potential to negatively impact their policy space and public spending. As discussions on reform advance across multiple forums—from United Nations negotiations to individual treaties—one of the critical topics that has emerged is the massive scale of awards.

Previously limited to the low millions in USD, IISD research has found over 50 known cases in which an investor-state tribunal has awarded a foreign investor over USD 100 million in compensation. There are at least eight claims where the award has reached over USD 1 billion.

Compensation has been placed on the agenda of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III for Investor-State Dispute Settlement (ISDS) Reform.

As these discussions continue, negotiators will need to determine what reform options best address the challenges of the past, considering lessons learned from arbitral jurisprudence. They will also need to consider how future reforms may be applied by arbitrators in practice.

IISD has been working across multiple fronts to support these reform efforts. We support negotiators in their investment treaty negotiations and in international negotiations at UNCITRAL and by providing research, analysis, and webinars.

Project details

Investment Law & Policy
Focus area