We tend to take it for granted that the objective of international arbitration is to obtain the payment of compensation. This is certainly true, but it may be questioned whether it is the whole truth. Is the outcome of a successful pursuit of international arbitration always a pecuniary remedy in the form of damages or compensation, or are there other potential rewards?

 

 

In international law, the casus classicus concerning remedies for damage arising from an illegal act is the Judgment of the Permanent Court of International Justice in the Chorzów case. In that case, the PCIJ said:

 

The essential principle contained in the actual notion of an illegal act—a principle which seems to be established by international practice and in particular by the decisions of arbitral tribunals—is that reparation must, as far as possible, wipe out all the consequences of the illegal act and reestablish the situation which would, in all probability, have existed if that act had not been committed. Restitution in kind, or, if this is not possible, payment of a sum corresponding to the value which a restitution in kind would bear; the award, if need be, of damages for loss sustained which would not be covered by restitution in kind or payment in place of it—such are the principles which should serve to determine the amount of compensation due for an act contrary to international law.