Originally from Journal of Damages in International Arbitration

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MR. MISTELIS: I have the pleasant task of introducing an excellent panel which will help us to look at some empirical trends and see and how and where things are moving to and whether they are moving in the right directions.  So we have first Matt Fritzsche from PWC who has been part of the broader team that worked on the 2015 and 2017 PWC study of investment awards and tried to draw a number of conclusions some of which will be summarized as part of the panel in a concise fashion. Queen Mary and PWC are working on the second phase of that study. We have managed to secure an agreement with the ICC to have access to commercial awards and to do a similar study for commercial cases. The second expert who is very experienced and well known not just in the London market but also globally, is Colin Johnson who is with Charles River Associates.  He is the vice president of the energy practice but of course his work is much broader than that.  He has done quite a bit of oil and gas matters and worked in many cases for governments and large companies. Our two counsel and arbitrators are first Sabine Konrad who is a partner with McDermott Will and Emery and who has quite a high-profile practice. And George Burn who is our host here and a very distinguished practitioner. He has been with Bryan Cave Leighton Paisner for quite some time and also in some very high-profile cases. He is the head of international arbitration here and his experience is diverse in terms of institutions and industries but also regions with quite a number of cases in Middle East, Central Asia, Caribbean. He sits as an arbitrator as well as acting as counsel and is also a good friend of Queen Mary. So without further ado I will invite Matt to start it off.  

MR. FRITZSCHE: I led a piece of research looking at trends in the awards of damages in arbitration. We first published the study in 2015 and then updated it at the end of 2017.  I am just going to run through some of the headlines, quite quickly, to set the context hopefully for our discussion to follow. The original research performed in 2015 covered 95 awards taken from the public domain and so by nature primarily investment treaty arbitration awards. The time period covered by those awards was quite broad, from the 1990s all the way through 2015, and covered equally a very broad range of amounts awarded by tribunals from nil where claimants had won on liability but then had nil award of damages all the way up to the 50 billion or thereabouts that was awarded in the Yukos matter. And equally the spread of the number of pages dedicated to an award to the examination of damages was also very broad, from a half a page at a minimum to all the way up to 138 pages.  The 2017 study then captured 21 additional cases with a similarly broad range in terms of amounts awarded from a couple of 100,000 all the way up to 1.2 billion dollars. As you would expect, it covered cases from across the world.  Moving swiftly on to the findings I think the metric that sparked the most interest in our original study was the gap between the claimant and the respondent positions on their assessment of damages. We looked at this based on the primary claim that we saw in each case. For example, in a claim associated with expropriation of an investment we would look at the position on the expropriated investment and ignore, for example, any secondary claims associated with moral damages in looking at the percentages. What we found overall was on average a respondent expert quantified damages at only 13% of the claimant’s expert’s number. The 2017 study then showed actually pretty consistently to that finding that the average was 12%, so a marginally wider gap than before but pretty consistent.