L’indemnisation en vertu des traités d’investissement : Quels sont les problèmes et qu’est-il possible de faire?

The document argues that current investment treaty arbitration leads to excessively high and inconsistent compensation awards, often based on speculative future earnings rather than actual losses. It highlights the risks of corruption and the financial burden on host states, particularly in regulatory disputes and cases involving planned investments that never materialized. The authors suggest that states reform their treaties to move away from the 'full reparation' principle toward more balanced or capped compensation models.

• Compensation awards in investment treaty arbitrations have increased significantly, with some reaching extreme amounts. The largest single award was 40 billion USD in the Hulley v. Russia case, and 50 billion USD in total was awarded across a series of claims following the nationalization of Yukos. There are 50 known cases where awards exceeded 100 million USD, including eight over 1 billion USD.
• High compensation is being awarded in regulatory disputes even when investments remain profitable. For example, in NextEra v. Spain, a tribunal awarded 327 million USD because the investor was entitled to a higher rate of return than the market rate following a regulatory change.
• Tribunals are increasingly awarding large sums for interference with planned investments that were never realized, which may encourage corruption. In Tethyan Copper v. Pakistan, 4 billion USD plus interest was awarded based on estimated revenue over a 50-year life cycle for a mine that was never built; this amount was nearly as high as a recent IMF bailout for Pakistan.
• The prevalence of the discounted cash flow (DCF) method for calculating future expected revenues deviates from previously accepted international law principles and World Bank guidelines. This method is complex and costly, as seen in Tethyan Copper v. Pakistan, where the claimant spent 4.5 million USD on financial experts and 17.5 million USD in legal fees for the compensation phase alone, while Pakistan spent nearly 10 million USD on its defense.
• Current compensation principles are 'all or nothing' and generally ignore critical contextual factors, such as the strength of the public interest justification (e.g., the Netherlands' decision to close coal plants by 2030 for a clean energy transition), investor misconduct (e.g., influence over officials in Unión Fenosa Gas v. Egypt), or the host state's ability to pay.
• The authors propose four reform options for states: 1) balancing multiple factors (as seen in SADC, COMESA, and PAIC models), 2) capping compensation at the amount actually invested, 3) capping compensation at the higher of the state's gain or the investor's expenses, or 4) determining compensation according to the host state's laws.

APA

Bonnitcha, J., & Brewin, S. (2020). L’indemnisation en vertu des traités d’investissement : Quels sont les problèmes et qu’est-il possible de faire? International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-01/compensation-investment-treaties-fr.pdf

Chicago

Bonnitcha, Jonathan, and Sarah Brewin. L’indemnisation en vertu des traités d’investissement : Quels sont les problèmes et qu’est-il possible de faire? International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/2021-01/compensation-investment-treaties-fr.pdf.

Wikipedia

{{cite report |last1=Bonnitcha |first1=Jonathan |last2=Brewin |first2=Sarah |title=L’indemnisation en vertu des traités d’investissement : Quels sont les problèmes et qu’est-il possible de faire? |publisher=International Institute for Sustainable Development |date=December 2020 |url=https://www.iisd.org/system/files/2021-01/compensation-investment-treaties-fr.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnitcha2020lindemnisation, author = {Bonnitcha, Jonathan and Brewin, Sarah}, title = {{L’indemnisation en vertu des traités d’investissement : Quels sont les problèmes et qu’est-il possible de faire?}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = dec, url = {https://www.iisd.org/system/files/2021-01/compensation-investment-treaties-fr.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }