All roads lead to Asia: some guideposts for economic damages


In summary

In this article, we examine disputes in the Asia-Pacific arising from counterparty disagreements on large and meaningful business dealings across industries affected by trade partners around the world. We also focus on how data and information can be analysed to quantify damages in the face of unique and challenging global circumstances.


Discussion points

  • Summary statistics of recent cases
  • General economic damages framework
  • Highlights of economic damages issues arising in international arbitrations in Asia

Referenced in this article

  • Crescent Petroleum Company International Limited, Crescent Gas Corporation Limited v National Iranian Oil Company
  • Ipek Investment Limited v Republic of Turkey
  • Wang Jing, Li Fengju, Ren Jinglin and others v Republic of Ukraine, and The Chinese investors in Motor Sich v Ukraine
  • Guardian Holdings Limited, KLIC Holdings Limited, Apfin Investment Pte Ltd, and Hoenir Incorporated v Chang Jae Shin
  • Gale Investments Company LLC v Republic of Korea
  • Goh Chin Soon v China
  • AHG Industry GmbH & Co KG v Republic of Iraq
  • Public Joint Stock Company Mobile TeleSystems v Turkmenistan
  • Suppipat & Ors v Narongdej & Ors

The dramatic shift from business closures during the pandemic to surging economic activity from substantial government stimulus funding has created a wide array of challenges across global supply chains. In particular, the Asia-Pacific region, which the world relies on substantially for electronics, energy and a variety of manufacturing supplies, has been severely affected. Adding to these circumstances are rising inflation, geopolitical tensions and emerging technologies across complex industries (including energy, telecoms, consumer electronics and life sciences). These developments have led, and will continue to lead, to increased disputes in the robust Asia-Pacific region that flow naturally from counterparty disagreements on large and meaningful business dealings across industries affected by trade partners around the world.

The collective array of unique, complex circumstances makes analysing economic damages in already complex industries even more difficult to quantify reliably. Rigorous evaluations of industry economics (ie, the impact of the alleged wrongdoing on supply, demand and prices) as well as macroeconomic effects and the exact causal factors of claimed quantum of damages has never been more pertinent or more challenging. In these interesting and challenging times, damages experts must maximise the use of the data and information available and seek to apply industry-specific economic principles to quantify damages with the highest level of certainty.

Summary statistics of recent cases

Many significant disputes involving parties from Asia are resolved by way of international arbitration. From 2018 to 2021, more than 80 international arbitrations were commenced involving parties from at least 26 different Asian countries with South Korea, China and Singapore most frequently represented (23.8, 22.5 and 13.8 per cent of cases, respectively).[1] Damages claims in these cases are substantial: more than half involve claims in excess of US$150 million with several multibillion-dollar disputes.[2] Among the largest cases are a US$18.6 billion dispute between the United Arab Emirates’ Crescent Petroleum and Iran’s national oil company over a gas supply deal and a US$6 billion dispute between the Koza mining and media conglomerate (and its director, Hamdi Akin Ipek) and Turkey, which has accused Ipek of supporting Islamic cleric Fethullah Gülen, whom Turkey alleges was behind a failed attempt to overthrow the Turkish government in July 2016 (Ipek denies these charges).[3]

These cases are roughly evenly split between investor–state and commercial disputes. Commercial disputes often involve claims for breach of contract and span a wide range of industries. At least two-thirds of recent commercial disputes were contract disputes.[4] The industry most frequently involved in these disputes is the energy sector, which accounts for approximately 20 per cent of cases. The POSCO Energy v FuelCell Energy matter involved claims of fraud and breach of contract with a FuelCell Energy contract claim against POSCO Energy and US$200 million for damages (and revocation of the licence) and a counterclaim for US$800 million in damages from POSCO Energy, a subsidiary of South Korea’s largest steel producer.[5] This case settled in late 2021.[6] Another 11 per cent of commercial disputes involve the oil and gas industry, including the aforementioned US$18.6 billion Crescent Petroleum v National Iranian Oil Company case.

The financial sector accounts for another 17 per cent of recent commercial arbitrations involving Asian parties. The Guardian Holdings Limited v Chang Jae Shin dispute is a US$2 billion claim brought by investors in a South Korean insurance provider against its CEO after the insurer failed to carry out an initial public offering.[7] Suppipat & Ors v Narongdej & Ors involves a dispute brought by Thai businessman Nopporn Suppipat against one of Thailand’s largest commercial banks alleging conspiracy to steal US$2 billion worth of wind energy assets.[8] Other commercial disputes involve the mining, pharmaceutical, transportation and real estate industries (among others).

Investor-state cases similarly involve a wide range of industries. About 14 per cent of recent cases involve the mining and oil and gas industries, including Ipek Investment Limited v Republic of Turkey, referred to above. Alamos Gold Holdings Coöperatief UA and Alamos Gold Holdings BV v Republic of Turkey involves a US$1 billion investment treaty claim brought by a Canadian mining company against Turkey over its refusal to renew licences for a gold mining project.[9] The Thai-Lao Lignite and Hongsa Lignite v Laos matter involves a US$450 million claim brought by a Thai coal mining company in connection with the termination of a power plan project.[10]

Another 14 per cent of cases involve claims brought by companies in the energy sector. The Korea Western Power Co v The Republic of India matter involves a US$400 million investment treaty claim brought by a subsidiary of Korea’s state-run power company over alleged breaches of a gas supply agreement.[11] IC Power Ltd and Kenon Holdings Ltd v Republic of Peru involves claims for more than US$150 million brought by two Singaporean companies in connection with electrical generation investments.[12] KLS Energy Lanka Sdn Bhd and KLS Energy Lanka (Private) Ltd v Democratic Socialist Republic of Sri Lanka relates to a claim brought by a Malaysian company after a US$150 million renewable energy project was severely delayed and ultimately cancelled.[13] In a decision in early 2022, a Hong Kong energy company was unsuccessful in its attempt to revive a US$340 million UNCITRAL claim against a Chinese state-owned entity and a claim of mismanagement and delayed start of production in developing a gas field in the East China Sea.[14]

Telecommunications cases account for another 11 per cent of recent investor-state cases. Telenor v Bangladesh involves an ICSID claim brought by Norwegian telecoms group Telenor against Bangladesh in connection with a US$1.5 billion tax demand.[15] US hedge fund Elliott Management filed an investment treaty claim against South Korea over the country’s intervention in a US$8 billion merger between two Samsung affiliates, seeking US$770 million in damages.[16] The Public Joint Stock Company Mobile TeleSystems v Turkmenistan matter is a US$750 million ICSID claim brought by a Russian telecoms multinational against Turkmenistan over the ‘total expropriation’ of its business in the country.[17]

The table below provides an overview of large international arbitration cases in the Asia-Pacific region in 2018–2021.

Crescent Petroleum Company International Limited, Crescent Gas Corporation Limited v National Iranian Oil Company (PCA Case No. 2019-03)
Case detailsIran’s national oil company has failed to overturn an interim award in favour of the UAE’s Crescent Petroleum in a US$18.6 billion dispute over a terminated gas supply deal.

In an anonymised judgment, Switzerland’s Federal Supreme Court said the challenge by the National Iranian Oil Company was inadmissible because the contested award dealt with issues that were not independent of the claims that remain to be decided in the arbitration.*
Year filed2018
AwardUS$18.6 billion
Sector(s)Gas
VenuePCA
TypeCommercial
Ipek Investment Limited v Republic of Turkey (ICSID Case No. ARB/18/18)
Case detailsThe Court of Appeal in London has upheld an injunction that prevents a UK company from funding a US$6 billion ICSID claim against Turkey, finding a judge was within his rights to conclude there was a serious issue as to the authenticity of the share purchase at the heart of the arbitration.

In a 2-to-1 ruling, the court affirmed an injunction preventing Koza Ltd from using £3 million of its assets to finance the ICSID claim. The court also found the judge was entitled to draw adverse inferences from the refusal of the company’s director Hamdi Akin Ipek to disclose details about his own assets.
Year filed2018
AwardUS$6 billion
Sector(s)Mining and quarrying; information and communication; telecommunications
VenueICSID
TypeInvestor–state
Wang Jing, Li Fengju, Ren Jinglin and others v Republic of Ukraine, and The Chinese investors in Motor Sich v Ukraine
Case detailsChinese investors have made good on their threat to file a US$3.5 billion treaty claim against Ukraine over the blocked takeover of an aerospace company at the centre of a US–China diplomatic power struggle.

The dispute concerns Motor Sich, a leading Ukrainian manufacturer of helicopter and aeroplane engines. For years, the company had supplied engines for Russia’s helicopter fleet, before Ukraine banned military exports to Russia in response to the 2014 annexation of Crimea, crippling the manufacturer’s business.
Year filed2020
AwardUS$3.5 billion
Sector(s)Manufacturing; transportation
VenuePCA
TypeInvestor–state
Guardian Holdings Limited, KLIC Holdings Limited, Apfin Investment Pte Ltd, and Hoenir Incorporated v Chang Jae Shin
Case detailsInvestors in a South Korean insurance provider are pursuing a US$2 billion ICC claim against its chief executive officer after the insurer failed to carry out an initial public offering.

The claim was filed against South Korean national Chang Jae Shin, the chairman and CEO of Kyobo Life Insurance. It is being heard by an ICC tribunal seated in Seoul.§
Year filed2019
AwardUS$2 billion
Sector(s)Finance
VenueICC
TypeCommercial
Gale Investments Company LLC v Republic of Korea
Case details‘New York-based real estate developer Gale Investments . . . has filed notice to begin a more than $2 billion arbitration proceeding with South Korea over the developer’s role in the construction of the $35 billion Songdo smart city.’
Year filed2021
AwardUS$2 Billion
Sector(s)Real estate
VenueICSID
TypeInvestor–state
Goh Chin Soon v China (ICSID Case No. ARB/20/34)
Case detailsA Singaporean businessman who helped build the ‘Asian Oktoberfest’ has filed an ICSID claim against China over the alleged expropriation of various real estate investments during a two-year spell he spent under house arrest.||
Year filed2019
AwardUS$1.5 billion
Sector(s)Real estate
VenueICSID
TypeInvestor–state
AHG Industry GmbH & Co KG v Republic of Iraq (ICSID Case No. ARB/20/21)
Case detailsA German company has filed a US$1 billion ICSID claim against Iraq over the alleged expropriation of its cement production business.

ICSID registered the claim, brought by Brandenburg-based transport company AHG. The claim invokes a licence agreement between the parties, as well Iraq’s Investment Law and several other investment agreements.**
Year filed2020
AwardUS$1 billion
Sector(s)Construction
VenueICSID
TypeInvestor–state
Sector(s)Information and communication
VenueICSID
TypeInvestor–state
Public Joint Stock Company Mobile TeleSystems v Turkmenistan (ICSID Case No. ARB(AF)/18/4)
Case detailsA Russian telecoms multinational has launched a US$750 million ICSID claim against Turkmenistan over what it calls the 'total expropriation' of its business in the country.

Mobile TeleSystems filed the claim under the 2009 Russia–Turkmenistan bilateral investment treaty. In a press release, the company said its claims are yet to be fully quantified but are worth at least US$750 million.††
Year filed2021
AwardUS$750 million
Sector(s)Information and communication
VenueICSID
TypeInvestor–state
Suppipat & Ors v Narongdej & Ors [2020] EWHC 3191 (Comm) (24 November 2020)
Case detailsOne of Thailand’s largest commercial banks has failed to knock out part of a UK fraud litigation in which it is accused of conspiring to steal US$2 billion worth of wind energy assets and frustrate enforcement of a US$700 million ICC award.‡‡
Year filed2020
AwardUS$700 million
Sector(s)Banking
VenueICC
TypeCommercial
* Sebastian Perry, ‘Interim award upheld in mega-claim over Iranian gas’, Global Arbitration Review, 22 September 2020, https://globalarbitrationreview.com/interim-award-upheld-in-mega-claim-over-iranian-gas.
Jack Ballantyne, ‘Turkey hit with billion-dollar mining claim’, Global Arbitration Review, 8 June 2021, https://globalarbitrationreview.com/turkey-hit-billion-dollar-mining-claim.
Cosmo Sanderson, ‘Ukraine faces multibillion claim over blocked aerospace deal’, Global Arbitration Review, 20 December 2020, https://globalarbitrationreview.com/ukraine-faces-multibillion-claim-over-blocked-aerospace-deal.
§ Cosmo Sanderson, ‘ICC panel hears South Korean IPO dispute’, Global Arbitration Review, 30 April 2021, https://globalarbitrationreview.com/icc-panel-hears-south-korean-ipo-dispute’.
Darcy Reddan, ‘NY Developer Seeks $2B From S. Korea Over Smart City’, Law360, 11 June 2019, https://www.law360.com/articles/1167974.
|| Cosmo Sanderson, ‘Beer festival backer brings ICSID claim against China’, Global Arbitration Review, 9 September 2020, https://globalarbitrationreview.com/beer-festival-backer-brings-icsid-claim-against-china.
** Tom Jones, ‘Iraq faces billion-dollar claim over cement plant’, Global Arbitration Review, 29 June 2020, https://globalarbitrationreview.com/iraq-faces-billion-dollar-claim-over-cement-plant.
†† Cosmo Sanderson, ‘Telecoms investor takes on Turkmenistan’, Global Arbitration Review, 31 July 2018, https://globalarbitrationreview.com/telecoms-investor-takes-turkmenistan.
‡‡ Sebastian Perry, ‘Thai bank must face fraudulent transfer claims’, Global Arbitration Review, 26 November 2020, https://globalarbitrationreview.com/thai-bank-fails-knock-out-fraud-claims.

General economic damages framework

Economic damages are the consequence of the harmed party’s impaired financial position because of the alleged wrongdoing of the responsible party. The concept of economic damages entails determining the level of compensation to be provided to the harmed party to account for the change in economic value resulting from the responsible parties’ alleged conduct, assuming liability has been proven.

Compensating the harmed party based on the change in economic value is intended to return the harmed party to the economic position it would have been in without the alleged conduct and to remove the resulting financial injury.[18] The principle of causation is central to an economic damages calculation and requires supporting connection and linkage between the financial harm and the alleged conduct to isolate the financial harm that flows directly from the alleged conduct. Damages experts must quantify the economic harm to a level of reasonable certainty (but not absolute certainty).[19] There is no shortcut for an economic expert to deal with increasingly complicated industry and economic issues that could still provide a level of reasonable certainty to ensure that the tribunal knows that concept when it sees it. Rather, a detailed economic analysis of the full array of the industry and economic parameters that could be affected, as well as the interplay of all such parameters along with consideration of all the facts and case-specific aspects, is required. Only when this is complete can an economist conclude that the estimate quantum of economic harm is reasonably certain.

Damages are often measured on an ex post basis. An ex post approach to measuring lost profits damages involves estimating the most likely level of incremental profits a claimant would have realised over the time from the breach to the current date given what is now known about that period (ie, with the benefit of hindsight), and the present discounted value of the profits that could have been reasonably expected over any remaining term of the contract. Prejudgment interest might apply to any past losses, but not to any future losses, to account for the time value of money between the time of those past losses and the time of the hearing.

A well-established standard exists for measuring economic damages that requires comparing the financial positions of the complainant in a world where the alleged wrongdoing that caused the injury did not occur and the world that actually occurred. This is accomplished by calculating economic damages (also referred to as lost profits) modelled by comparing the financial position of the complainant in the hypothetical ‘but for’ world and the ‘actual’ world, with the resulting difference being the compensation required to make the claimant financially whole.[20]

The compensation owed to the complainant is equal to the net profits (revenue less incremental costs) in the hypothetical ‘but for’ world less the net profits in the ‘actual’ world for each relevant monthly or annual time periods for which the injury occurred, including past and future time periods.[21] In other words, the lost profits model seeks to make the claimant whole, simulating the claimant’s economic circumstances but for the alleged wrongdoing. By comparing the net profits (revenues less costs) in the ‘but for’ and ‘actual’ worlds, the lost profits model can measure the economic harm caused by the alleged wrongdoing, including lost sales, price erosion, cost increases and even reputational harm, if applicable. The lost profits model can do this because most types of economic harm have a direct financial impact on the claimant’s cash flow and overall firm profitability; therefore, a financial value can be derived.

There can be interesting economic issues that arise with a potential interplay between the quantity, price and cost variables that may be overlooked in a damages claim. For example, the claimant might be able to demonstrate that the alleged wrongdoing caused an increase in the market price above competitive levels that resulted directly from a supply reduction or increased costs. In such a case, the claimant may have been deprived of economies of scale and scope that it would have enjoyed but for the alleged wrongdoing. Quantity and price effects could also result when the cost in the ‘but for’ world was artificially reduced productivity if the higher costs actually did lead to reduced production levels than would have been achieved with the agreed-upon performance requirements.

Due consideration should be given to economic analysis of the ‘actual’ world, which is observable. However, it is inappropriate to assume without question that what actually happened is the only plausible outcome that could have happened. For instance, the quantities, prices and costs in the ‘actual’ world must consider the possible methods available to the claimant to economically mitigate the financial harm incurred. A mitigation analysis determines if the claimant took full advantage of the options available that might have reduced the economic harm, or if the claimant disregarded them. This evaluation should identify and assess all plausible actions that were taken or could have been taken by the claimant to reduce the economic damages. In addition, the economist must consider whether actions taken by others (eg, consumers) in response to the alleged harm might have reduced the actual harm once properly acknowledged and considered. A proper quantification of the economic harm also recognises the claimant’s responsibility to mitigate damages to make commercially reasonable efforts.[22]

Last, when addressing economic harm that extends across past and future time periods, historical periods can be summarised and presented separately from the future period to account for the differences in the value of money over time (time value of money). For economic damages that have occurred in the past, the compensation includes the lost opportunity of using the monies associated with the economic harm that claimants would have been able to have (but for the injury).[23] For economic damages expected to occur in future time periods, the monies may be presented as an annuity associated with the future cash flow streams as well as the present value of those future dollars resulting from the net profit differences between the ‘but for’ and ‘actual’ worlds to aid in economic understanding. The present value calculation comprises the general concept that a dollar today is worth more than a dollar tomorrow. Consequently, the future compensation value of economic harm is reduced more so for the more distant future periods (ie, 10 to 20 years) than the nearer term periods (ie, one to 10 years).

In some cases – potentially when the economic harm caused may be characterised by the loss of a valuable asset at a moment in time – damages may be measured on an ex ante basis. The analysis typically relies on information that was known or knowable at the time when the alleged wrongful conduct occurred.[24] An ex ante approach to measuring economic damages seeks to restore the value of that lost asset to the claimant, where the value of the asset is determined by discounting the profits the claimant could reasonably have expected to earn had the contract been performed, using a discount rate reflecting a market required rate of return for assets with a similar degree of financial risk. It awards to a claimant the value of what it has lost rather than an amount reflecting one particular financial outcome that may or may not have occurred had the contract been performed (ie, the ex ante approach recognises that the breach has deprived the claimant of the opportunity to earn profits and also relieved them of the risks of realising a loss).[25] This approach does not require consideration of mitigation because value is determined as at the date of the breach and the potential for the discount rate to incorporate a market-based measure of the opportunity cost of the contract.[26]

As an economic matter, prejudgment interest should apply to any such damages awards at the time the economic harm was incurred to account for the time value of money between the alleged breach and the hearing. Sometimes the prejudgment interest rate or calculation may be specified by a venue or jurisdictional rules.

Recent highlights of economic damages issues arising in international arbitrations in Asia

This section provides three case examples.

First, in an interesting case that highlights the importance of the need for rigorous analysis and a causal economic link of the economic damages to the claimed breach of contract, a recent decision on damages was issued in an UNCITRAL arbitration with an Indian state-owned company. India’s ONGC Petro Additions Limited (OPAL) claimed a breach of contract with South Korea’s Daelim to build a petrochemical complex (worth US$200 million), where Daelim backed out of the agreement. Despite proving liability, OPAL’s claim of US$183 million in damages was rejected. The tribunal not only indicated that OPAL failed to prove that it had suffered any losses, it also stated that the damage analysis contained ‘serious and fundamental errors’ in its methodology.[27] In the end, the arbitration panel awarded what it referred to as nominal damages equal to US$7,000 plus interest.[28] In this case, the contract term allowed for compensation for additional costs that would be incurred to complete the necessary work, including through another company. The tribunal assumed that damages were based on the contract performance – namely, equal to those that two parties negotiated and agreed to under the contract, which are consistent to the terms of agreement. However, OPAL’s damages claim relied on an estimation of lost profits (ie, lost net revenue), not additional costs incurred. As described, OPAL’s damages claim appears incomplete and did not link the damages claim to the contractual requirement applicable to compensation under a claimed breach. We note that in recreating the ‘but for’ world, economic analysis evaluating the counterparties agreement of contractual terms can be helpful. As an example, forming an understanding of the parties’ negotiations to develop the contract prices and other terms could have been undertaken to determine whether the negotiations were reasonably competitive and not one-sided and whether they resulted in fair market value outcomes.

The second case is Stonewall Resources Ltd v Shandong Qixing Iron Tower Co Ltd.[29] Stonewall’s economic damages claim sought US$110 million in damages from Shandong Qixing Iron Tower Co Ltd (Qixing) for a claimed inappropriate termination of a share sale agreement (SSA) for gold mining assets in Africa. Notably, market dynamics shifted during the relevant period before the deal closed, with gold prices fluctuating substantially, potentially affecting the transaction decision. The claim of economic damages was based on the estimated value of the mining assets, and other relief. The arbitral tribunal awarded Stonewall only US$12.6 million in damages based on the difference between the US$141.5 million SSA price and the value of the relevant asset at the time Qixing gave its termination notice. The tribunal assessed that an alternate buyer would have been prepared to develop the assets, as Qixing had proposed. This case highlights the effects of changed market conditions and the importance of evaluating the next best economic alternative in assessing economic damages at the time of a claimed inappropriate termination. A rigorous economic analysis would include evaluating the negotiations between parties to understand the competitiveness of it, as well as analysing the changing market conditions on price, quantity and costs, and the interplay thereof. For example, if the market price fell, what were the effects on the specific resource and the market supply curve, as well as the market demand, potentially increasing in response to lower prices?

Third, in another matter (which remains confidential), a construction company brought a claim against a mining company arising from the allegedly wrongful termination of a contract relating to the development of the infrastructure needed for the expansion of a mining operation in a remote region. The mining company experienced significant and unexpected delays in obtaining the permits to proceed with the expansion and ultimately determined that the delays made it impossible for the parties to fulfil their contractual obligations, including the obligation to complete the work in a lawful manner within the multi-year term of the contract. The construction company argued that the termination was not justified and sought damages of more than US$100 million for lost profits based on a budget appended to the contract, which set out a schedule for the work, anticipated costs and a specified mark-up. As such, the amount claimed reflected the profits the claimant would have earned had the contract been performed exactly in accordance with that budget. The claimants’ measure of damages may have been appropriate if the terms of the contract were such that the construction company was to be guaranteed that level of profits. However, the contract effectively required the contractor and the mining company to bear at least some of the risks associated with cost overruns, delays and scope changes. The tribunal determined that economic damages should appropriately reflect the fair market value of the construction company’s interest in the contract considering the risks it was intended to bear even but for the alleged wrongful termination. The tribunal recognised that risks in the construction and mining industry are often significant and awarded economic damages materially below the total profits that were expected had the contract been performed according to the budget.


Footnotes

[1] NERA analysis of relevant GAR publications published over the past four years covering disputes in the Asia-Pacific region. This is a general review of relevant GAR publications rather than a review of an exhaustive set of all disputes in the Asia-Pacific region (hereinafter, NERA Review).

[2] NERA Review.

[3] See Sebastian Perry, ‘Interim award upheld in mega-claim over Iranian gas’, Global Arbitration Review, 22 September 2020, https://globalarbitrationreview.com/interim-award-upheld-in-mega-claim-over-iranian-gas (hereinafter Perry, ‘Interim award upheld’).

[4] NERA Review.

[5] POSCO Energy Co v FuelCell Energy, Inc, 1:20-cv-7509-MKV (S.D.N.Y. Sep. 16, 2021).

[7] See Cosmo Sanderson, ‘ICC panel hears South Korean IPO dispute’, Global Arbitration Review, 30 April 2021, https://globalarbitrationreview.com/icc-panel-hears-south-korean-ipo-dispute (hereinafter Sanderson, ‘ICC Panel’).

[8] See Sebastian Perry, ‘Thai bank must face fraudulent transfer claims’, Global Arbitration Review, 26 November 2020, https://globalarbitrationreview.com/thai-bank-fails-knock-out-fraud-claims.

[9] See Jack Ballantyne, ‘Turkey hit with billion-dollar mining claim’, Global Arbitration Review, 8 June 2021, https://globalarbitrationreview.com/turkey-hit-billion-dollar-mining-claim (hereinafter Ballantyne, ‘Turkey hit with billion-dollar mining claim’).

[10] See Cosmo Sanderson, ‘Thai company files new claim against Laos’, Global Arbitration Review, 15 July 2020, https://globalarbitrationreview.com/thai-company-files-new-claim-against-laos.

[11] See ‘Korean investor threatens treaty claim against India’, Global Arbitration Review, 24 October 2021, https://globalarbitrationreview.com/korean-investor-threatens-treaty-claim-against-india.

[12] See Sebastian Perry, ‘Peru hit with ICSID claim from electricity investor’, Global Arbitration Review, 28 June 2019, https://globalarbitrationreview.com/third-party-funding/peru-hit-icsid-claim-electricity-investor.

[13] See Jack Ballantyne, ‘Sri Lanka faces ICSID claim over renewables project’, Global Arbitration Review, 25 October 2018, https://globalarbitrationreview.com/sri-lanka-faces-icsid-claim-over-renewables-project.

[15] See Sebastian Perry, ‘Bangladesh risks ICSID claim over telecoms audit’, Global Arbitration Review, 19 November 2019, https://globalarbitrationreview.com/article/bangladesh-risks-icsid-claim-over-telecoms-audit.

[16] Elliott Management v Korea; see ‘South Korea to face claim over Samsung merger intervention’, Global Arbitration Review, 13 July 2018, https://globalarbitrationreview.com/south-korea-face-claim-over-samsung-merger-intervention.

[17] See Cosmo Sanderson, ‘Telecoms investor takes on Turkmenistan’, Global Arbitration Review, 31 July 2018, https://globalarbitrationreview.com/telecoms-investor-takes-turkmenistan (hereinafter Sanderson, ‘Telecoms investor’).

[18] CPR (International Institute for Conflict Prevention & Resolution), ‘Protocol on Determination of Damages in Arbitration’, 2010, page 1 (hereinafter, CPR Protocol). Ermelinda Beqiraj and Tim Allen, ‘Assessing Damages for Breach of Contract’, pages 155–163 (Chapter 10) in The Guide to Damages in International Arbitration, Global Arbitration Review, edited by John A Trenor, 2016.

[19] See, eg, CPR Protocol, page 2 and article 7.4.3(1), UNIDROIT Principles 2016; see also M Allen, R Hall and V Lazear, ‘Reference Guide on Estimation of Economic Damages’, in Reference Manual on Scientific Evidence, 3rd ed (The National Academies Press, 2011).

[20] Ermelinda Beqiraj and Tim Allen, ‘Assessing Damages for Breach of Contract’, pages 155–157 in The Guide to Damages in International Arbitration, Global Arbitration Review, edited by John A Trenor, 2016.

[21] Christian Dippon, Will Taylor and Julie M Carey, ‘Commercial Arbitration: Measuring Economic Damages with Maximum Certainty’, May 2021, pages 4–5 in GAR Know-how: Commercial Arbitration 2021, available at https://globalarbitrationreview.com/insight/know-how/commercial-arbitration/measuring-economic-damages-with-maximum-certainty.

[22] CPR protocol, page 2.

[23] Jeffrey M Colon and Michael S Knoll, ‘Prejudgment Interest’ in Litigation Services Handbook: The Role of the Expert, Sixth Edition, 2017, edited by Roman L Weil, Daniel G Lentz and Elizabeth A Evans, pages 16-2 and 16-3. Ermelinda Beqiraj and Tim Allen, ‘Assessing Damages for Breach of Contract’, page 162 in The Guide to Damages in International Arbitration, Global Arbitration Review, edited by John A Trenor, 2016.

[24] Victoria A Lazear, ‘Estimating Lost Profits and Economic Losses’ in Litigation Services Handbook: The Role of the Financial Expert, Third Edition, 2001, edited by Roman L Weil, Michael J Wagner and Peter B Frank, pages 5-4 and 5-5. Elizabeth A Evans and Roman K Weil, ‘Ex Ante versus Ex Post Damages Calculations’ in Litigation Services Handbook: The Role of the Expert, Sixth Edition, 2017, edited by Roman L Weil, Daniel G Lentz and Elizabeth A Evans, pages 5-2 and 5-3.

[25] This is the argument made in favour of the ex ante measure of damages in a well-known paper. Franklin Fisher was a professor of economics at the Massachusetts Institute of Technology from 1960 to 2004 (‘The violation did not merely deprive the plaintiff of the stream of returns that would have accompanied the asset. It also relieved the plaintiff of the uncertainty surrounding that stream. To use hindsight is to ignore the latter effect. . . . the way in which both effects can be taken into account is to value the asset as of the time of the violation, taking account of uncertainty, and then award the time value of money making no allowance for uncertainty. . . . Giving the plaintiff the lost profits that hindsight suggests does not place it in the position it would have occupied without the violation; it replaces an uncertain world with a particular outcome.’), Franklin M Fisher and R Craig Romaine, ‘Janis Joplin’s Yearbook and the Theory of Damages’, Journal of Accounting, Auditing & Finance, Vol. 5 (1990) [RE-44], pages 145–157, at pages 154 and 156.

[26] See Michael J Wagner, Michael K Dunbar and Roman L Weil, ‘Ex Ante Versus Ex Post Damages Calculations’, Litigation Services Handbook: The Role of the Expert, Chapter 8 [RE-43], at page 8.5 (‘If one uses an ex ante analysis, one should not consider the outcome of subsequent actual mitigation. Doing so converts the analysis into an ex post measure of damages.’), page 8.6 (‘Another advantage [of the ex ante approach]: it does not penalize the plaintiff for either pursuing or not pursuing mitigation.’).

[27] See ONGC Petro Additions Limited and Daelim Industrial Company Ltd, Final Award (Part II) dated 20 December 2021 (on the issue of quantum), Paragraph 99, https://files.lbr.cloud/public/2022-01/Quantum%20award.pdf?VersionId=G7rrkMQCBD68jzwP1VB2HsrcEY0yqNuY.

[28] ibid.

[29] ‘The Rise of Mining Disputes involving Chinese Companies’, Anton A Ware and Tereza Gao, Arnold & Porter Kaye Scholer LLP, 28 June 2021. https://globalarbitrationreview.com/guide/the-guide-mining-arbitrations/2nd-edition/article/the-rise-of-mining-disputes-involving-chinese-companies.

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