General Rules and Principles on State Responsibility and Damages in Investment Arbitration : Some Critical Issues

Investment treaties contain the ‘primary rules’ setting the standards of treatment due to foreign investors by the host State, but they do not contain specific provisions concerning the determination of damages in case of breach of such primary obligations. For this reason, in the absence of a lex specialis on reparation, arbitral tribunals usually refer to the principles of customary international law as codified by the International Law Commission in 2001. This chapter examines critically the theoretical foundations of such approach and analyses its application in cases of unlawful expropriation and breach of fair and equitable treatment.