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The compensatory nature of moral damages in investor-state arbitration

Wong, Jarrod

There has been a pervasive failure by investment tribunals to grasp the singularly compensatory nature of moral damages awarded to investors. The failure to distinguish moral damages from other forms of reparation such as satisfaction and restitution -- never mind punitive damages -- has led to various doctrinal and practical difficulties in the treatment of moral damages. Moral damages have enjoyed a long history in public international law. In that tradition, the venerable Lusitania decision defined moral damages as compensation “for an injury inflicted resulting in mental suffering, injury to his feelings, humiliation, shame, degradation, loss of social position or injury to his credit or to his reputation,” thereby identifying those injuries remedied by moral damages as mental or reputational injuries. Significantly, that decision emphasized that moral damages “are very real” despite their intangible nature, which “affords no reason why the injured person should not be compensated therefor as compensatory damages, but not as a penalty.”

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Academic Units
Vale Columbia Center on Sustainable International Investment
Publisher
Vale Columbia Center on Sustainable International Investment
Series
Columbia FDI Perspectives, 88
Published Here
February 13, 2013
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