Blog: Valuation of damages in investment disputes - conference takeaways
On 18 October 2019, we organised a conference on the valuation of damages in international investment law. This topic is far from being theoretical as slight differences in the methodology of calculation of damages can lead to giant differences in sums awarded.
For example, in the controversial Tethyan v. Pakistan case earlier this year, Pakistan was ordered to pay nearly US$6 billion as compensation when one of its provinces denied a mining licence. The ICSID tribunal used a "modern DCF method" (never used by other tribunals before), despite 'fundamental uncertainties' regarding the future of the project.
The inconsistency of methodology of valuation of damages undermines the legitimacy of investor-state dispute settlement. Current international efforts to harmonize approaches to valuation of damages have so far a limited effect.