Assessing Damages in International Arbitration: Practical Considerations - Chapter 21
Hilary Heilbron is a barrister practising as an advocate in both international arbitration and commercial litigation from Brick Court Chambers, London. She became a QC in 1987. She also sits regularly as an arbitrator. She is a Deputy High Court Judge and is an accredited mediator. She is also a member of the Bar of New South Wales. She is a former Chairman of the City Disputes Panel, former Vice-Chair of the International Litigation Committee of the IBA and a current Vice-Chair of the Litigation Committee of the International Law Section of the ABA. She was previously Chairman of the London Common Law and Commercial Bar Association and of the International Practice Committee of the Bar Council.
Originally from Leading Arbitrators' Guide to International Arbitration - 2nd Edition
Preview Page
I. INTRODUCTION
It is surprising in comparative terms how little has been written to date about damages in international arbitration. Yet quantification of damages is usually integral to the whole process and is normally the issue of greatest relevance to the parties themselves. Damages represent in monetary form reimbursement for the loss suffered by the innocent party. In cases where the claim or counterclaim is for damages, an award favourable on liability alone is likely to be of no real value to a claimant or counter-claimant, unless possibly if it is a partial award in a bifurcated hearing and is a trigger for settlement.
Assessment of damages can be a hugely complex process, both legally and factually. At the time of the Watergate scandal Deep Throat may have advised Bob Woodward to “follow the money”, to find out who was behind the Watergate break-in, but the achievement of a “finding for the money” or a favourable damages award in an arbitration can often require not dissimilar thoroughness and determination. To assume that establishing quantum is the easy part and can thus be put on one side is a trap the unwary should avoid.
While the thrust of this chapter is directed to international commercial arbitration, it would not be complete without some reference to investment treaty disputes. Many of the issues are common to both kinds of international arbitration, but there are some significant differences, not least because international commercial arbitration is based on private international and national law and is largely contract based, whereas investment treaty arbitration is normally founded on public international law and is treaty based.
The assessment of damages in international arbitration is a vast topic. It requires consideration from the perspective of both the tribunal and the parties. Trying to encapsulate the subject into this short chapter can in no way do it full justice. Inevitably, therefore, there has had to be selection, but it is hoped that the main issues have been covered, albeit at times only briefly.