Originally from Revolution in the International Rule of Law: Essays in Honor of Don Wallace, Jr.

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While attending Georgetown law school in 2007, I was privileged to
be selected by Professor Don Wallace, Jr., to work as a research assistant
to him and Professor Borzu Sabahi in their work on investment treaty
arbitration. This association lasted throughout the next four years, in
which I was given a thorough introduction to investor-state arbitration
through multiple projects with Professor Wallace and others, including
the production of a book and multiple articles, as well as through
enrolling in Professor Wallace’s course on the subject.

During this time, I was invited to sit in on a doctrinal thesis defense
in which Professor Wallace led the questioning of the candidate. The
thesis was on damages in investment treaty arbitration, and one line of
questioning Professor Wallace pursued concerned the difference in the
compensation for damages between cases of lawful and unlawful
expropriation. This issue had recently been raised in the award in ADC v.
Hungary, where an ICSID tribunal had held that the compensation due
for an unlawful expropriation was greater than that due for a lawful one,
specifically for the increased value of the investment between the time of
the expropriation and the time of the award.1 Professor Wallace
questioned how the thesis treated compensation for unlawful
expropriation and what should trigger the enhanced compensation
awarded in ADC. Professor Wallace also asked if I had any additional
questions on this point, as I had done work for him on the subject of
valuation and compensation. I had asked whether the enhanced
compensation should be the default position in all investment arbitrations
dealing with an expropriation, as the claimant would always be claiming
that the expropriation was in some way unlawful. Professor Wallace built
upon this question to ask whether there were cases where the