A Case Against Crippling Compensation in International Law of State Responsibility

Abstract

The obligation of States to provide full reparation for internationally wrongful acts, including by full compensation, is one of the bedrock principles of international law. The article challenges this principle for cases where compensation is crippling for the responsible State or its peoples, which can occur when State responsibility is implemented before international courts and tribunals. The International Law Commission's decision not to qualify full reparation for instances of crippling compensation in its influential Articles on State responsibility was an unpersuasive legal position to adopt in 2001, and its rationale has aged badly. However, the failure by States and other actors to challenge it in the following two decades signified its endorsement by the international legal process. Nevertheless, the case against the permissibility of crippling compensation in modern international law can still be made, both on a case-by-case basis and at the level of customary secondary rules of State responsibility.

The issue of the application to the European Court of Human Rights in the context of the Russian invasion of Ukraine

“…The armed aggression against Ukraine will provoke an increase of cases of appeal to the European Court of Human Rights by the citizens who suffered from it to receive material and moral compensation. "The obligation of States to provide full reparation for internationally wrongful acts, including by full compensation, is one of the bedrock principles of international law" (Paparinskis, 2020(Paparinskis, : 1255. "The peculiarity of a war crime is its predominant multi-object nature: the crime causes damage to several direct objects at the same time" (Cherviakova and Mekheda, 2021: 256), as for human rights violation, it can be both a separate type of crime and a war crime.…”

“…For example, (Paparinskis, 2020) explores the responsibility of states for violations of the Convention for the Protection of Human Rights and Fundamental Freedoms, compensation for material and moral damages caused by their wrongful acts, as a fundamental principle of international law (Paparinskis, 2020). Paparinskis (2020) also draws attention in his scholarly work to the fact that when a state's responsibility is exercised before international courts and tribunals, compensation damages the responsible state or its people (Paparinskis, 2020).…”

The Future of Divestment: Proliferations of Counter-Hegemonic and Post-Extractive Divestment Movements

“…Multinational companies have also been increasingly turning to Investor-State Dispute Resolution (ISDS) lawsuits [104] whereby foreign investor interests are protected to sue a national government for both real and perceived financial damages [105,106]. Complications arise when, for example, a government restricting mineral extraction near vulnerable ecosystems may be seen as expropriating private capital [104].…”

“…ISDS arbitration lawsuits related to mining have rapidly increased in frequency since the late 1990s [104], and are often used by transnational corporations to coerce poorer governments into allocating resource concessions [107]. Countries are often sued for sums that represent sizable portions of their annual GDP [106]. In some cases, the threat of arbitration can pressure governments to reverse environmental protections, as was generally regarded to be the case when Indonesia exempted several foreign investors from a ban on open-pit mining in protected forests [107].…”

“…Divestment activists might specifically target 'vulture funds', or international investors that purchase sovereign debts at a discount and use litigation to coerce debt-distressed nations into paying the full face value [111]. Activists might also target companies that abuse ISDS processes by making them the target of public pressure campaigns, such as ConocoPhillips [106]. At a broader level, activists can join international calls for debt restructuring or a global 'debt jubilee', calling on international creditors to repudiate illegitimate or 'odious' debts [111,112].…”