The Influence of the Host State-Related Circumstances on the Calculation of Compensation in Investment Treaty Claims

A number of different elements can affect the calculation of compensation arising out of the breach of Investment Treaty standards. A series of these elements addresses conditions and circumstances of the Host State. This article examines the economic crisis of the government, level of economic and political development of the investor Host State, and obligations other than those of Investment Treaties, as well as the influence of these factors on the calculation of damages quantum phase of Investment Claims.
If the government’s economic crisis prompts the Host State to take certain measures breaching Investment Treaties' obligations, necessity defense could be raised as one of the circumstances precluding wrongfulness of the act of the State. Many Investment Treaties include provisions on non-precluded measures, which raise a debate as to the interaction of these measures and the circumstances precluding wrongfulness in Customary International Law. Investment Arbitration Tribunals have not yet reached a clear solution to reconcile these different sets of provisions.
Furthermore, attention has been paid to the effect of various factors such as general economic situation of the Host State as well as non-Investment Treaty obligations of the Host State on the calculation of compensation in recent years. It seems that in the future perspective of the subject matter of this article, some developments may come through due to possible future cases.