Re-assessing the Principle of Full Reparation in International Investment Law

At the core of investor-state dispute settlement lies a paradox: while dispute resolution largely depends on quantifying damages, the legal infrastructure surrounding the quantum phase remains fragmented, underdeveloped, and predominantly influenced by financial methodologies. This thesis challenges the prevailing conception that damages valuation is a purely technical exercise, arguing instead that it is a juridical process shaped by interpretive choices and normative frameworks. Drawing upon a comprehensive analysis of arbitral practice, doctrinal developments, and theoretical perspectives, the thesis challenges the uncritical transposition of the Chorzów Factory standard of full reparation to all treaty breaches and interrogates the epistemic validity of the counterfactual frameworks used by tribunals to simulate investor losses. The argument posits that the prevailing orthodoxy, which is grounded in fair market value (FMV) regarded as an ostensibly objective and apolitical metric, serves to marginalize legal reasoning, equitable considerations, and policy-sensitive adjudication in favor of a technocratic financial rationale. In order to address this issue, the thesis proposes a normative framework based on the Aristotelian notion of corrective justice, which will reposition quantum valuation as a juridical act that must incorporate legal responsibility, economic considerations, and equitable calibration. By examining how tribunals interact, often inconsistently, with complex questions such as the nature of compensable harm, the construction of hypothetical markets, and the limits of financial modeling in contexts of legal and empirical uncertainty, the thesis presents a more coherent, principled, and fair proposition for the assessment of damages in international investment arbitration.