Damages (and Non-pecuniary Remedies) for Sanctions in Breach of International Investment Law

Abstract

A number of high-profile arbitration proceedings have been initiated, challenging the legality of sanctions under international investment law. These include Mikhail Fridman’s USD fifteen billion claim against Luxembourg for the implementation against him of the sanctions regime adopted by the EU in response to the Russian invasion of Ukraine. This contribution will focus on the heretofore unexplored question of available remedies in such cases, particularly damages and their quantification. Three main questions will be addressed in turn: first that of the compensable harm for which compensation may be sought, second that of the potential relevance to the assessment of damages of public interest considerations, and third the possible availability of non-pecuniary relief. Through an examination of how these remedial matters are addressed in other jurisdictional settings and the principles of customary international law as generally interpreted and applied by past arbitral tribunals, I will argue that claims such as Mr Fridman’s should normally not lead to large sums of damages, be resolved primarily through non-pecuniary remedies, and ultimately may serve to reconsider some tendencies found in the arbitral case law that have misguidedly led to an inflation of ISDS awards.