Originally from Investment Treaty Arbitration and International Law Volume 15

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In the 2011 film Margin Call, Jeremy Irons plays the role of a top executive at an investment firm who foreshadows the start of the financial crisis because, as he put it, the “music had stopped.” It may be premature to speculate what analogy will be used in future films that depict the development of the SARS-Covid-19 pandemic (Covid), but live music certainly stopped in 2020. And with it, nightclubs, movie theatres, restaurants, cruises, and pubs all shut their doors. Governments imposed travel restrictions and lockdowns. Central banks deployed generous financial stimulus packages to prevent an economic meltdown. One would be hard-pressed to find an industry that was not affected by Covid. One year later, it is still unclear when the music will resume.

The question under examination, however, is if a tribunal should consider these radical developments when valuing the damages due to an investor for an illegal expropriation that took place before the World Health Organisation’s declaration of a Global Pandemic on 11 March 2020.  The answer, to a large extent, depends on whether the tribunal adopts an ex-ante or ex-post valuation approach. To assess the quantum of damages under the former approach, the tribunal can only take into account the information that was known or available at the time the expropriation took place. Under the latter approach, however, tribunals can use hindsight information and take into account developments that occurred after the date of expropriation. 
This paper argues that, consistent with principles of customary international law and recent jurisprudential practice, a tribunal assessing the value of damages to award an investor for an unlawful expropriation that took place before 2020, should adopt an ex-post approach.