IISD Best Practices Series: Compensation Under Investment Treaties

This paper from IISD's Investment Policy Best Practices Advisory Bulletins series takes a deep dive into compensation in investor–state arbitration, examining the legal principles and valuation techniques that have seen the size of arbitral awards greatly expand in recent years, and making recommendations for reform.

By Jonathan Bonnitcha, Sarah Brewin on November 23, 2020

The authors examine past awards and some of the policy concerns that have emerged; valuation techniques used in determining the amount of compensation; and some of the provisions seen under newer investment treaties to try to address concerns raised. The authors then present options for reform that states could consider, which are meant to encourage new, creative thinking in this important field.

An earlier version of this paper was published in October 2019 as an "advance draft for comment," which garnered valuable feedback from academics and private legal practitioners. Some of these topics were also presented and discussed at an August 2019 webinar entitled Damages in International Investment Law. A sequel to that webinar was held on November 24, 2020, to examine options for reform in further depth.

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