Damages in International Arbitration: Less is More, More or Less - WAMR 2013 Vol.7, No. 1
LUCY REED, chair of ITA from 2009 to 2012, heads the Freshfields global international arbitration group. She represents private and public clients and occasionally sits as arbitrator in international arbitrations under the major rules. Lucy is a member of the ICC Governing Body, the LCIA Court and the ICCA Governing Board. She is a member of several arbitrator panels, including the ICSID Panel of Arbitrators (appointed by ICSID). She has served as an arbitrator on the Eritrea-Ethiopia Claims Commission, co-director of the Claims Resolution Tribunal for Dormant Accounts in Switzerland and, while with the State Department, the U.S. Agent to the Iran-U.S. Claims Tribunal. Lucy is co-author of the Freshfields Guide to Arbitration Clauses in International Contracts and the Guide to ICSID Arbitration (both published by Kluwer). She served as President of the American Society of International Law (2008-2010) and is a member of the Council on Foreign Relations. Lucy may be contacted at firstname.lastname@example.org.
Originally from World Arbitration And Mediation Review (WAMR)
At the outset, I wish to thank the ITA Workshop Co-Chairs, Andrea Bjorklund, Stephen Jagusch, and Claudia Salomon, and the sponsors of the luncheon. Congratulations to all participants on an outstanding workshop on damages.
I was most pleased to be invited to speak because, as counsel and arbitrator in complex international arbitrations, the whole issue of damages – theory and quantum – is very much on my mind. It is a topic that is critical and, unfortunately, too often shortchanged. Indeed, when Andrea kindly asked me to give this luncheon address, three images flashed unbidden through my mind:
a) September 1974: The first day of my first year of law school at the University of Chicago, in Professor Richard Epstein’s Contracts class. Two observations by Professor Epstein remain vivid. First, he observed that lawyers are most comfortable when discussing contract formation and breach, but they tend to lose steam at the stage most critical for clients – damages. Second, he predicted that nonetheless we would not get around to taking his Remedies class. True and true.
b) Fast forward to 2007 or so: A conversation over drinks with a pre-eminent arbitrator (not present today) about the quantity and quantum of reasoning in ICSID awards. He observed that unless and until investors and States insist on appointing arbitrators who are Ph.D. economists, C.P.A.s, and mathematicians, nothing will change, and no arbitrators will annul other arbitrators’ awards for lack of adequate quantum reasoning. Probably true, though I am not that stark and cynical.