Principles and Methods of Assessing Damages Due to Breach of Investment Contract (Relying on ICSID Arbitration)

Today in international arbitration tribunals also in international law the right to expropriate foreign investor property has been recognized as a legitimate right for the host state. In cases where the host government expropriates the property of the foreign investor, the question arises as to the basis and in what manner the damages caused by the host government's breach of the investment contract should be assessed. So far, the legal doctrine has not given a definite answer to this question. The procedures of the International Arbitration Tribunals in this regard are different. Considering the various opinions given in the ICSID Arbitration Courts as well as the Iran-US Arbitration, the market price of the commodities seems to be the most acceptable basis for assessing damages. In practice, different methods have been proposed to achieve this price, which can be categorized into three methods, the comparative method, the profit-based method, and the result-oriented method. In fact, depending on the case and the type of goods, the Arbitration Tribunal chooses one of the three methods for assessing damages to a foreign investor.