Originally from the Journal of Damages in International Arbitration

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Ex Ante or Ex Post? Legal Approaches to Damages Valuation in an Era of Trade Policy Volatility 

Jessica Beess und Chrostin and Irmgard Marboe1 

The recent fluctuations in U.S. trade policies have raised the question how trade policy volatility can affect valuation in international arbitration. The reintroduction of targeted tariffs, the reconfiguration of supply chains, and evolving sanctions regimes have reshaped global commercial conditions and, consequently, the assumptions underlying damages valuation models. From a legal perspective, these developments have reignited the discussion about the appropriate valuation date, the selection between ex ante and ex post approaches to damages, and the degree to which tribunals should incorporate post-breach market or policy developments into their analysis. Arbitral tribunals and counsel must navigate the interaction between international economic policy shifts and the legal principles governing the quantification of damages, ensuring that valuations remain both legally sound and economically credible. 

I. The Legal Significance of the Valuation Date 

Legal issues related to the measure of damages include the extent to which changes in trade policies must be considered. At the heart of this issue lies the valuation date, that is the specific point in time at which the tribunal determines the value of the investment or loss. The choice of valuation date determines whether and to what extent later economic or political developments—such as trade restrictions, tariffs, or market instability—are incorporated into the calculation of damages. 

The ex ante approach fixes damages as of the date of the breach, focusing exclusively on information available to the injured party at that moment. By contrast, the ex post approach allows the tribunal to consider subsequent developments, potentially offering a more realistic picture of the investment’s actual value after the breach.