Compensation in Investor-State Disputes: How Much Can an Investor Claim?

10 August 2020
Veronica Irastorza with Carlos Vejar and Laura Yvonne Zielinski from Holland & Knight

NERA Associate Director Veronica Irastorza collaborated with Holland & Knight Cross-Border Transactions Attorneys Carlos Vejar and Laura Yvonne Zielinksi to write an alert about compensation in investor-state disputes.

Foreign investors currently benefit from a large number of bilateral treaties and trade agreements, which contain investment protection provisions such as protection against direct and indirect expropriation, a guarantee against discrimination, fair and equitable treatment, and full protection and security. In case one or more of these protections is violated, many of these treaties allow for international arbitration to provide the investor with a neutral forum to bring its claims against the host state. While in theory other remedies such as restitution are possible, the almost exclusive remedy in investor-state disputes is monetary compensation. Therefore, the most important question for an investor becomes how much he or she can claim against a state for a treaty violation.