Submissions dealing with damages often start with a reference to the 1928 Chorzów ruling by the Permanent Court of International Justice and a rehearsal of the principle of reparation: reparation must, as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed.1 When this cannot be achieved through restitution, a financial compensation is sought. However, the mechanisms for assessing claimants’ economic harm are not always straightforward, for example, in situations where the amount that achieves this objective varies over time and where what might look like an appropriate compensation at a certain point in time does not look as appropriate a few years later, a difficulty that was raised already in the 1920s in the widely discussed decision relating to the illegal seizure of the Chorzów factory. In this article, we identify how objectives not strictly related to the pursuit of a ‘full compensation’, such as the perceived necessity to create adequate economic incentives not to breach international laws or to only compensate foreseeable losses also often intrude in decisions. These principles sometimes result in awards that, for better or worse, can sometimes fail to achieve this aim. The difficult question of the evolution of damages over time The passage of time and the unfolding of the events can result in changes in the perceived magnitude of a loss. An oil field might look like a highly attractive investment opportunity with a barrel at US$100 (as was the case in late-2014), or a much less exciting one with oil prices at US$50 per barrel (as was the case a few months later). The financial consequences of the expropriation of an oil field in 2014 will therefore be very different depending on whether they are considered at the time of the taking, or a few years later in a hearing room. Unsurprisingly, the question of the date on which damages are assessed has been an important consideration in commercial disputes. A landmark decision in that respect is, of course, the Chorzów decision relating to the unlawful seizure by Poland of a German nitrate factory after World War I. In this decision, the tribunal identified two main questions for expert enquiry2 leading observers to believe that it saw fit to award some sensible combination of the value of the factory at the date of the taking, the profits that the factory would have generated after the expropriation until the date of the indemnification, and the increases in the value of the factory after the illegal seizure.3 However, the tribunal never finally decided in this issue as the case settled before an award was made.4 Starting in 2006 with the ADC v Hungary decision5 (identified by some authors as a turning point in that regard),6 several decisions to take of account developments postdating the expropriation were made.7 These decisions usually referred to the Chorzów decision, and to article 35 of the International Law Commission articles, according to which: [a] State responsible for an internationally wrongful act is under an obligation to make restitution, that is, to re-establish the situation which existed before the wrongful act was committed. In 2014, in the dispute between shareholders of the energy company Yukos and the Russian Federation, the tribunal articulated more explicitly the circumstances in which it considered appropriate to account for developments post-dating the breach in assessing a claimant’s compensation. In the view of the tribunal, in cases of unlawful expropriation, ‘investors must enjoy the benefits of unanticipated events that increase the value of an expropriated asset up to the date of the decision’, but should receive no less than the value of their investment at the date of the taking because ‘. . . in the absence of the expropriation the investor could have sold the asset at an earlier date at its previous higher value.’8 Similarly, on the basis that a claimant could have sold its investment after the date of the taking, a tribunal (Unglaube v Costa Rica) opted for a valuation date that was neither the date of the unlawful measures nor of the award. In that case, the claimant was found to have been unlawfully expropriated from a plot of land in Costa Rica. The tribunal decided that an appropriate compensation should reflect the possibility that, absent the measures complained of, the claimant might have sold her property when the market conditions were most favourable, sometime after the expropriation, but before the date of the award.9 While meeting important objectives (such as ensuring that the claimant is rightly compensated for the loss of an opportunity to sell the investment after the taking, or ensuring the absence of windfall for the expropriating state) some have argued that this kind of ex post approach to the choice of the valuation date does not fully meet the ‘full compensation’ criteria.10 This reasoning is not unsupported by economic analysis: under this compensation regime and setting aside the pain, costs and uncertainty associated with arbitration proceedings, an unlawfully expropriated investor finds itself economically better off immediately after the expropriation than immediately before. After the expropriation, the investor holds, in addition to the market value of its investment (as would have been the case in the absence of expropriation), an option to potentially benefit from subsequent increases in the value of its investment without exposure to the risks until the date of the award. Arguably, the compensatory regime used by the Yukos tribunal therefore does not put back the claimant in the situation in which they would have been, but transports them into a more desirable economic situation.