Compensation and Damages in Investor-State Dispute Settlement
Options for reform
Damages awards in investor-state dispute settlement (ISDS) have been growing constantly, making it one of the most significant policy concerns within international investment agreements. This report proposes multiple policy options that policy-makers may adopt to reform ISDS practice on damages and curtail the trend of ever-increasing damages awards.
The topic of compensation and damages remains high on the investor-state dispute settlement (ISDS) reform agenda. The growing size of ISDS damages awards makes it an important policy issue, due to the significant impact on states' public finances as well as concerns related to consistency and correctness of ISDS practice.
Policy-makers have started exploring ways to curtail the increasingly large amounts of damages at various multilateral normative processes, such as through the United Nations Commission on International Trade Law Working Group III and in its bilateral and regional treaty-making practice.
This policy report builds on the existing approaches and proposals to reform ISDS practice on damages, proposing a menu of reform options to the existing ISDS practice, including different elements of compensation standards and other aspects of compensation. The final section concludes by outlining avenues and forums at which the reform efforts may be pursued.
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