Contributory Fault in International Investment Arbitration

As a general rule, if a state commits a wrongful act, it is under an obligation to make fullreparation for the injury caused. Yet, arbitral tribunals have used the doctrine of contributory faultto reduce the amount of damages awarded to the investor for the state's breach of an investmenttreaty. This article analyses fifteen arbitration cases in which the respondent argued that theclaimant contributed to its injury, either as a result of the investor's bad business judgment orbecause the investor's behaviour provoked the state's wrongful conduct. The analysis shows thatarbitral tribunals supported their decisions to reduce the amount of compensation by as much as50% with strikingly brief reasoning and instead relied on their wide margin of discretion. Thearticle discusses possible avenues to remedy deficiencies in arbitral practice dealing with contrib-utory fault, both through the reform of investor-state dispute settlement and practical solutionsthat may be adopted by arbitral tribunals when considering allegations of contributory fault