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Journal of International Dispute Settlement, 2020, 0, 1–20
doi: 10.1093/jnlids/idaa007
Article
Reparation by Pecuniary Means of Direct Moral

Damages Suffered by States as a Result of
Internationally Wrongful Acts
Ceren Zeynep Pirim*
A BS TR A C T
Contemporary international law requires full reparation for all material and moral
damages suffered by States as a result of internationally wrongful acts and provides
that reparation can take the form of restitution, compensation or satisfaction. While it
is admitted that material damages which are ﬁnancially assessable can be repaired by
restitution and/or compensation, satisfaction seems to be reserved to the reparation of
moral damages. As to whether moral damages suffered by States can be repaired by
pecuniary means, the answer seems to be controversial. Moral damages indirectly
suffered by States as a result of internationally wrongful acts committed against their
citizens are considered, both by the jurisprudence and the international literature, as
reparable by monetary means, through the existence of the individual substratum.
However, the reparability by pecuniary means of direct moral damages doing harm to
States’ dignity, honour and prestige is problematical. This article argues for the repar-
ability by payments of money of moral damages and discusses the nature of the monet-
ary payment that may be done to States in order to remediate such damages.
1. I NTR OD U C TI ON
The concept of moral damage is a difficult one. This is due to it being based on
abstract notions such as pain, mental suffering, humiliation, shame, degradation, loss
of social position or injury to reputation, which are difficult to measure or estimate
by money standards.1
* Galatasaray University, Faculty of Law, Public International Law. E-mail: czpirim@gsu.edu.tr; zeynep-
pirim@hotmail.com
The ideas put forward in the present contribution were presented by the author at the workshop on
‘Rethinking Reparations in International Law’ organized by the University of Cambridge, Lauterpacht Center
for International Law on 16–17 November 2018.
The author wishes to thank Tayanç Molla for his suggestions made on an earlier draft of this article.
1 Lusitania (United States v Germany), Opinion of the Mixed Claims Commission (1923) 7 RIAA 32, 40.
C The Author(s) 2020. Published by Oxford University Press. All rights reserved.
V
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2 Journal of International Disputes Settlement
Moral damage, which admittedly has a ‘human nature’,2 is even more problematic in
public international law which deals with States, deprived of any feelings. This concept
which finds its origins in the civil law tradition3 has not been clearly defined in inter-
national law doctrine. It is rather described departing from the concept of material or pe-
cuniary damage and is considered as the opposite of damages that entail a financial or an
economic loss.4 Thus, unlike material damage that can be expressed in terms of money,
moral damage means ‘non-material’ damage which cannot be expressed in pecuniary
terms5 and includes ‘any damage which is not damage to a person’s assets, wealth or in-
come and which is therefore incapable of being quantified in any objective financial or
economic manner by reference to a market’.6 Seen from this perspective, moral damage
includes not only the various forms of emotional harm, such as indignity, humiliation,
shame, defamation and injury to reputation,7 but also the consequences of a wrongful act
such as the breach of an international obligation, also called ‘legal injury’.8
Indeed, the basis of moral damage ‘has been said to reside in the juridical nature
of any act or omission contrary to international law’9 and the concepts of moral dam-
age and legal injury are often seen as intertwined. However, while moral damage is
an affront to the State, in other words an attack against the dignity, honour and pres-
tige of the State (such as insults to the symbols of the State, violations of sovereignty
or territorial integrity, attacks against representatives or injuries to citizens), the con-
cept of legal injury, developed by Gaetano Arangio Ruiz,10 consists of an attack
2 A Champagne, ‘Moral Damages Left in Limbo’ (2015) 1 McGill Journal of Dispute Resolution 16, 17 and
27.
3 The concept of moral damage finds its origins in the French legal system where tribunals started, in the early
19th century, to award financial compensation for ‘préjudice / dommage moral’ arising from wrongful death and
reputational damage. S Jagusch and T Sebastian, ‘Moral Damages in Investment Arbitration: Punitive Damages
in Compensatory Clothing?’ (2013) 29 Arbitration International 45, 46; M Parish, A Newlson and C
Rosenberg, ‘Awarding Moral Damages to Respondent States in Investment Arbitration’ (2011) 29 Berkeley
Journal of International Law 225.
4 P Dumberry, ‘Compensation for Moral Damages in Investor-State Arbitration Disputes’ (2010) 27 Journal
of International Arbitration 247, 248.
5 L Markert and E Freiburg, ‘Moral Damages in International Investment Disputes-On the Search for a
Legal Basis and Guiding Principles’ (2013) 14 The Journal of World Investment & Trade 1, 3; B
Graefrath, ‘Responsibility and Damages Caused: Relationship Between Responsibility and Damages’
(1984) 185 Recueil de l’académie de droit international de La Haye 11, 20; N Jorgensen, ‘A Reappraisal of
Punitive Damages in International Law’ (1998) 68 British Yearbook of International Law 247.
6 S Wittich, ‘Non-Material Damage and Monetary Reparation in International Law’ (2004) 15 Finnish
Yearbook of International Law 321, 329. According to the author, moral damage should rather be called
‘non-material’ damage.
7 Parish, Newlson and Rosenberg (n 3) 225.
8 Wittich (n 6) 329–30; Champagne (n 2) 19.
9 Sixth Report on International Responsibility, by FV Garcia Amador, Special Rapporteur (1961) Yearbook
of the International Law Commission, Vol II, A/CN.4/134, 1-55, 10-11, para 42.
10 See the Second report on State responsibility, by G Arangio-Ruiz, Special Rapporteur (1989) Yearbook of the
International Law Commission, Vol II, Part One, A/CN.4/425 & Corr.1 and Add.1 & Corr.1., 4–7. Arangio-
Ruiz refers to the concept of legal injury also in his third and forth reports. Third report on State responsibility,
by G Arangio-Ruiz, Special Rapporteur (1991) Yearbook of the International Law Commission, Vol II (1), A/
CN.4/440 and Add.1, para 81; Fourth report on State responsibility, by G Arangio-Ruiz, Special Rapporteur
(1992) Yearbook of the International Law Commission, Vol II (1), A/CN.4/444 and Add.1-3, para 135.
However, the ILC has not endorsed the concept of legal injury in its articles on State Responsibility adopted in
2001. See C Barthe-Gay, ‘Réflexions sur la satisfaction en droit international’ (2003) 49 Annuaire français de
droit international 105, 109.
Reparation by Pecuniary Means of Direct Moral Damages 3
against the legal sphere of the State, without necessarily affecting its dignity, honour
and prestige.11 In other words, while every moral damage involves a legal injury,
every legal injury does not necessarily involve a moral damage.12 In this context, the
concept of legal injury which coincides with the mere violation of a legal right can be
considered as moral damage lato sensu. The focus of this article, however, is on moral
damages stricto sensu which concern damages arising from internationally wrongful
acts that offend the State’s dignity, honour and prestige.13
This concept of moral damage stricto sensu, despite its elusive nature, has long
been recognized by international courts and tribunals. Since the famous Lusitania
case which is considered as the first attempt for describing moral damages in inter-
national law,14 it is admitted that mental suffering is ‘a fact just as real as physical
suffering, and susceptible of measurement by the same standards’.15 Moreover, since
the Factory at Chorzów decision of the PCIJ, it is recognized that ‘it is a principle
of international law, and even a general conception of law, that any breach of an
engagement involves an obligation to make 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’.16
This was the affirmation, in the law of State responsibility, of the fundamental prin-
ciple of full reparation for any damage caused by an internationally wrongful act.
Naturally, the purpose of the principle of full reparation could not be achieved
without the recognition of moral damages.17 As a matter of fact, ‘scholars have
followed the case law to find a general right to “moral damages” as a principle of
international law’18 and the ILC, codified, in its Article 31 on State Responsibility,
the fundamental principles established in Lusitania and Factory at Chorzów cases,19
11 Barthe-Gay, ibid 107.

12 ibid.
13 Graefrath (n 5) 20; Wittich (n 6) 336; C Annacker, ‘Part Two of the International Law Commission’s
Draft Articles on State Responsibility’ (1994) 37 German Yearbook of International Law 206, 230–31.
See also E Fasoli, ‘Declaratory Judgments and Official Apologies as Forms of Reparation for the Non-
Material Damage Suffered by the State: the Djibouti-France Case’ (2008) 7 The Law and Practice of
International Courts and Tribunals 177, 179 and 182. According to Fasoli, such a distinction ‘does not
only have a theoretical relevance, but also a practical one, insofar as it may serve as a parameter for the de-
termination of the appropriate reparation’. The author indicates that while a declaration of wrongfulness
is sufficient for the reparation of legal injuries, official apologies are considered more suitable for the rep-
aration of moral damages stricto sensu.
14 Markert and Freiburg (n 5) 9.
15 The case grew out of the sinking of the British ocean liner Lusitania, which was torpedoed by a German
submarine off the coast of Ireland and resulted in the death of 128 American citizens. The United States
claimed that Germany was financially obliged to pay to the United States all losses which had resulted
not only from loss of, or damage to property sustained in the sinking of the Lusitania but also from death
or from personal injury, thus from moral damages suffered by American nationals. The umpire accepted
the claims of the United States and condemned Germany to pay compensation not only for material, but
also for moral damages. Lusitania (United States v Germany) (n 1) 36.
16 Case Concerning the Factory at Chorzów (Claim for Indemnity, Merits) (1928) PCIJ Series A no 17, 29 and
47.
17 Champagne (n 2) 18.
admitting that the responsible State is obliged to make full reparation for both
material and moral damages caused by internationally wrongful acts.
Thus, the existence and status of the concept of moral damage in public inter-
national law is uncontroversial.20 What remains controversial is the adequate form of
reparation for this kind of damage.
Indeed, the Factory at Chorzów decision stated that ‘restitution in kind, or, if this
is not possible, payment of a sum corresponding to the value which a restitution in
kind would bear; the award, if need be, of damages for loss sustained which would
not be covered by restitution in kind or payment in place of it-such are the principles
which should serve to determine the amount of compensation due for an act con-
trary to international law’21. Following this quite vague guideline,22 the ILC Articles
provided three different forms of reparation for all damages suffered by States as a
result of internationally wrongful acts: restitution, compensation and satisfaction.23
While it is admitted that material damages which, by their nature are financially
assessable, in other words which are ‘capable of being evaluated in financial terms’,24
can be repaired by restitution and/or compensation, satisfaction seems to be
reserved to the reparation of moral damages. As to whether moral damages suffered
by States can be repaired by pecuniary means, the answer seems to be controversial.
Traditionally, moral damages suffered by States, like material ones, can be of two
different natures: those which directly offend States and those which indirectly dam-
age them as a result of internationally wrongful acts committed against their nation-
als.25 In other words, indirect moral damages occur when ‘the States suffer damages
only by way of their nationals being treated by the wrongdoing State in violation of
international law’,26 thus when the victim of the internationally wrongful act is a
private citizen of a foreign State27 which relates to the process of diplomatic
20 ibid 19; Dumberry (n 4) 250; J Wong, ‘The Misapprehension of Moral Damages in Investor-State
Arbitration’ (2012) 6 Contemporary Issues in International Arbitration and Mediation: The Fordham
Papers 67, 72.
21 Case Concerning the Factory at Chorzów (n 16) 47.
22 A Lo, ‘Determining Damages in ICSID Arbitration: A Problem of Uncertainty’ (2013) 6 Contemporary
Asia Arbitration Journal 75, 86–87.
23 ILC art 34. It is recognized that these three forms of reparation are part of customary international law.
See S Dinah, ‘Righting Wrongs : Reparations in the Articles on State Responsibility’ (2002) 96 American
Journal of International Law 833, 835; Markert and Freiburg (n 5) 5 ; F Przetacznik, ‘La Responsabilité
internationale de l’Etat à raisons de préjudices de caractère moral et politique causé à un autre Etat’
(1974) Revue générale de droit international public 919, 928.
24 Commentary to ILC art 36, para 5, 99. According to the Commentary, ‘financially assessable damage
encompasses both damage suffered by the State itself (to its property or personnel or in respect of expen-
ditures reasonably incurred to remedy or mitigate damage flowing from an internationally wrongful act)
as well as damage suffered by nationals, whether persons or companies, on whose behalf the State is
claiming within the framework of diplomatic protection’. ibid.
25 D Carreau and F Marrella, Droit international (Pedone 2012), 501ff; Dumberry (n 4) 251; P Daillier, M
Forteau and A Pellet, Droit international public (LGDJ 2009) 884–87; Przetacznik (n 23) 924; Wittich (n
6) 327; PA Bissonnette, La satisfaction comme mode de réparation en droit international (Grandchamp
1952) 45–68 and 68–84; Second report on State responsibility (n 10) 4–7, para 8.
26 S Wittich, ‘Awe of the Gods and Fear of the Priests: Punitive Damages and the Law of State
Responsibility’ (1998) 3 Austrian Review of International and European Law 101, 104–05.
27 Report of the International Law Commission to the General Assembly on the work of its forty-fifth ses-
sion (3 May–23 July 1993), Yearbook of the International Law Commission, 1993, Vol II, Part Two, 78,
para 8.
protection.28 ‘The injury inflicted upon an individual, a national of the claimant

State, which implies a violation of the obligations imposed by international law upon
each member of the Community of Nations, constitutes an act internationally unlaw-
ful, because it signifies an offense against the State to which the individual is united
by the bond of nationality’.29 Thus, it is admitted that an internationally wrongful act
that causes a damage to an individual indirectly offends the State of nationality, and
constitutes, at the same time, a moral damage to that State.30 This kind of moral
damage, called indirect moral damage, is considered to be reparable by pecuniary
means, through the existence of an individual substratum.
Whereas, moral damages that are suffered by the States themselves, irrespective of
whether any of their nationals is involved31 are called direct moral damages and the
reparability by compensation of these damages doing harm directly to States’ dignity,
honour and prestige without causing any loss to the nationals of that State, is prob-
lematic because of the absence of a natural person element.
As a matter of fact, not only the wording of the ILC articles seems to create some
confusion on the methods that can be used for the reparation of direct moral dam-
ages suffered by States, but also, tribunals do not seem to have developed a clear and
coherent framework on the subject.
The focus of this article is to explore in light of the ILC articles, the international
literature and selected judicial decisions whether a general principle can be drawn
from current international law concerning the reparability by pecuniary means of
direct moral damages suffered by States as a result of internationally wrongful acts.
In this context, the article will first seek to answer the question of whether any theor-
etical obstacle to the reparability by pecuniary means of direct moral damages
suffered by States exists, and whether this method of reparation can be considered as
a general principle of law. In trying to answer this question, developments in inter-
national investment law concerning the reparability by pecuniary means of moral
damages suffered by corporations will be taken into account, in order to assess
whether the reasoning followed in recent arbitral decisions concerning investment
28 The distinction which finds its philosophical sources in Vattel’s Law of Nations and which is confirmed by
international courts and tribunals is based on a legal fiction according to which an offence to an individual
is an offence against that individual’s State of nationality: ‘by taking up the case of one of its subjects and
by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality
asserting its own rights - its right to ensure, in the person of its subjects, respect for the rules of inter-
national law’. The Mavrommatis Palestine Concessions (1924) PCIJ Series A no 2, 12. E de Vattel, Le droit
des gens ou principes de la loi naturelle, appliqués à la conduite et aux affaires des Nations et des Souverains
(London 1758), 136. See DJ Bederman, ‘State-to-State Espousal of Human Rights Claims’ (2011) 1
Virginia Journal of International Law Online 3, 4; AMH Vermeer-Künzli, The Protection of Individuals by
Means of Diplomatic Protection. Diplomatic Protection as a Human Rights Instrument, PhD Dissertation
(Leiden University 2007).
29 Dickson Car Wheel Co Case (1903) 4 RIAA 669, 678.
30 Sixth Report on International Responsibility (n 9), para 41.
31 Such as ‘insults to the symbols of the State such as the national flag, violations of sovereignty or territorial
integrity, attacks on ships or aircraft, ill-treatment of, or attacks against heads of State or Government or
diplomatic or consular representatives or other diplomatically protected persons and violations of the
premises of embassies or consulates’. Report of the International Law Commission to the General
Assembly on the work of its forty-fifth session (n 27) 78, para 8.
disputes could be applied in classical public international law disputes by analogy

between private legal persons and States.
Indeed, despite the structural differences between public international law and
international investment law, which generally prevent the application, in these differ-
ent fields, of similar legal reasoning, both corporations and States are abstract legal
entities that could suffer moral damages only in cases where their reputation is
harmed. In other words, States and corporations, both deprived of any feelings, have
similar attributes when it comes to being morally damaged, which brings us to ques-
tion whether the principles applied in international investment law concerning the
reparation by pecuniary means of moral damages suffered by private legal persons
can, by analogy, be applied in disputes concerning the reparation of moral damages
suffered by States in inter-State relations.
This will then lead us to a discussion about the nature of the monetary payment
that may be done to States in order to remediate moral damages that they directly
suffer: could it be considered as a form of compensation or a form of satisfaction or
would it amount to a form of punitive damages unrecognized by international law?
2. R EPA R A TI ON BY P E CU N IA R Y M E AN S OF D I RE C T M OR A L
D A M A GE S: ‘A G EN E RA L P RI N CI P L E O F LA W ’ OR A
NO N- RE C OGN I Z ED P RI NC I P LE B EC A U SE OF T HE A B SE N CE
OF A N I ND I V ID U A L S U B S T RA T UM ?
A general reading of the ILC articles demonstrates that reparation in international
law aims firstly at removing the consequences arising from the internationally wrong-
ful act and re-establishing the ex ante conditions.32 Indeed, it follows from Article 35
that the primary obligation of a State responsible for an internationally wrongful act
is to reverse, by restitution, the effects of the wrongful act that it has committed.33
According to Article 36, when restitution is not available, the method of compensa-
tion shall be used for all financially assessable damages. Finally, Article 37, paragraph
1 provides that the wrongdoing State is obliged to give satisfaction for the injury
caused by the act insofar as it cannot be made good by restitution or compensation.
Satisfaction which may ‘consist in an acknowledgement of the breach, an expres-
sion of regret, a formal apology or another appropriate modality’34 appears to be a
more political and flexible method of reparation than restitution and compensation
and gives a large discretion to States in all respects.35 That is why the reparability of
moral damages—whose content is variable, unclear and thus discretionary—by satis-
faction which can vary depending on the nature, the seriousness and the conditions
of the internationally wrongful act36 is admitted in international law doctrine as solid-
ly as the principle concerning the reparability of material damages by restitution and
32 Graefrath (n 5) 77; S Haasdijk, ‘The Lack of Uniformity in the Terminology of the International Law of
Remedies’ (1992) 5 Leiden Journal of International Law 245, 250.
33 Commentary to art 35, para 1, 225; AC Smutny, ‘Some Observations on the Principles Relating to
Compensation in the Investment Treaty Context’ (2007) 20 ICSID Review-Foreign Investment Law
Journal 1, 4.
34 ILC art 37, para 2.
35 Graefrath (n 5) 84–85; Annacker (n 13) 231; Przetacznik (n 23) 944.
36 Przetacznik (n 23) 944.
compensation.37 So much so that some scholars describe damages arising from inter-
nationally wrongful acts by considering the method of reparation that needs to be
used for their remediation. Damage is generally considered as having a moral nature
if it is supposed to be repaired neither by restitution nor by compensation but by
satisfaction.38
As mentioned above, States can suffer two different kinds of moral damages;
those which directly offend them and those which indirectly damage them as a result
of internationally wrongful acts committed against their nationals. In cases where a
State directly suffers moral damages, it is generally recognized in international law l-
iterature that the traditional remedy under customary international law is not finan-
cial compensation, but satisfaction. Indeed, while ILC Article 37 does not explicitly
establish a link between ‘moral damage’ and ‘satisfaction’, the official commentary
states that ‘material and moral damage resulting from an internationally wrongful act
will normally be financially assessable and hence covered by the remedy of compen-
sation. Satisfaction, on the other hand, is the remedy for those injuries, not financially
assessable, which amount to an affront to the State. These injuries are frequently of a
symbolic character, arising from the very fact of the breach of the obligation,
irrespective of its material consequences for the State concerned’.39 In other words,
it is considered that moral damage can be repaired by monetary compensation only
if it is financially assessable and that the only financially assessable moral damage is
the one suffered by the nationals of the State.
Thus, the ILC which does not explicitly adopt the distinction between direct and
indirect moral damages, implicitly suggests that while material damages and indirect
moral damages suffered by States are supposed to be repaired by methods of restitu-
tion and compensation, satisfaction needs to be reserved for direct moral damages
affecting the States themselves.40
This seems also to be the predominant view in international law doctrine accord-
ing to which compensation is intended only to indemnify material41 and indirect
moral damages suffered by States.42 This argument is firstly made on the ground
that States, as abstract entities, cannot feel pain and mental distress. It is argued that
‘a State is not a person, but, on the contrary, an abstract entity’ and ‘therefore, there
is not the same need to compensate for moral damage inflicted upon a State by
granting a sum of money’.43 Secondly, it is claimed that ‘compensation is owed only
in respect of injuries that are quantifiable with some degree of certainty’44 and that
37 See Przetacznik (n 23) 943; Haasdijk (n 32) 253; Graefrath (n 5) 84.

38 Bissonnette (n 25) 3.
39 Commentary to art 37, para 3, 106.
40 ‘The qualification “financially assessable” is intended to exclude compensation for what is sometimes
referred to as “moral damage” to a State, i.e. the affront or injury caused by a violation of rights not associ-
ated with actual damage to property or persons: this is the subject matter of satisfaction, dealt with in
Article 37’. Commentary to art 36, para 1, 99. See Dumberry (n 4) 252 and 262; Wong (n 20) 74;
Jagusch and Sebastian (n 3) 50.
41 See for example Dinah (n 23) 845-846; Markert and Freiburg (n 5) 7; Wittich (n 26) 104; Second report
on State responsibility (n 10) 3, para. 4; Annacker (n 13) 232; Champagne (n 2) 33; Smutny (n 33) 6-7.
42 Parish, Newlson and Rosenberg (n 3) 229-230; Wong (n 20) 74; Dumberry (n 4) 267.
43 Annacker (n 13) 227–28.
44 Smutny (n 33) 7.
as offences to the reputation of States cannot be measured with such a degree of cer-
tainty, they cannot be remedied by money.
The author finds these arguments unfounded and believes that they have been
refuted both by classic and recent jurisprudence and that there is no theoretical obs-
tacle, in public international law, to the reparability by pecuniary means of direct
moral damages suffered by States.
Indeed, it is true that many judicial decisions of different international courts and
tribunals have awarded monetary compensation to States for moral damages that
they indirectly suffered as a result of internationally wrongful acts committed against
their citizens. In other words, to date, moral damages have generally been awarded in
international jurisprudence in cases where an individual substratum was present. Not
only did tribunals dealing with the rights of individuals, such as the European45
and the Inter-American46 Human Rights Courts award monetary compensation for
the emotional suffering of the victims,47 but also arbitral tribunals48 and the
International Court of Justice49 admitted, in the context of diplomatic protection,
the reparability by pecuniary means of moral damages indirectly suffered by States
via their nationals.
However, this does not mean that the reparability by compensation of direct
moral damages suffered by States is refused by courts and tribunals. Despite the scar-
city of cases, the concept is not, as a matter of principle, denied in jurisprudence.
The first case where a serious amount of compensation was awarded for direct moral
damages that a State suffered as a result of an internationally wrongful act is the I’m
Alone case of 1935 which concerned the sinking, by the officers of the United States
coast guard, of a Canadian ship.50 The arbitral tribunal decided that the United
States should not only acknowledge the illegality of its actions and apologize, but
also pay a compensation of 25,000 dollars to the Canadian Government, ‘as a mater-
ial amend in respect of the wrong done to Canada’.51 This payment, despite some
45 See König v Germany (1980) Series A no 36; Papamichalopoulos v Greece App no 14556/89 (1995) Series
A no 330-B; Perks and others v the United Kingdom App no 25277/94 (ECtHR, 12 October 1999);
Comingersoll SA v Portugal App no 35382/97 (ECtHR Grand Chamber, 6 April 2000), Case of Elci and
Others v Turkey App no 23145/93 (ECtHR, 13 November 2003).
46 See Case of Velásquez Rodrı́guez v Honduras (1989) Series C no 7, para 27 where the Court stated that
‘as to emotional harm, the Court holds that indemnity may be awarded under international law and,
in particular, in the case of human rights violations. Indemnification must be based upon the princi-
ples of equity’. See also Goiburú et al v Paraguay (2006) Series C no 153; Tibi v Ecuador (2004) Series
C no 114.
47 See Jagusch and Sebastian (n 3) 47.
48 See Di Caro Case (Italy v Venezuela) (1903) 10 RIAA 597; Heirs of Jean Maninat Case (France v
Venezuela) (1905) 10 RIAA 55; Affaire Chevreau (France v United Kingdom) (1931) 2 RIAA 1113;
Dispute Concerning Responsibility for the Deaths of Letelier and Moffitt (United States v Chile) (1992) 25
RIAA 1.
49 See LaGrand Case (Germany v United States of America), Judgment, ICJ Rep 2001 (June 27), p 466; Case
Concerning the Arrest Warrant (Democratic Republic of the Congo v Belgium), Judgment, ICJ Rep 2002
(February 14), p 3; Case Concerning Ahmadou Sadio Diallo (Republic of Guinea v Democratic Republic of
the Congo), Compensation Owed by the Democratic Republic of the Congo to the Republic of Guinea,
Judgment, ICJ Rep 2012 (June 19), p 324.
50 S S ‘I’m Alone’ Case (Canada v United States) (1933 and 1935) 3 RIAA 1609.
51 ibid 1618.
objections,52 is generally and rightly considered as a compensation for the moral

damage that Canada suffered as the flag State, because the ship was under the owner-
ship of American citizens and the internationally wrongful act of the United States
did not cause any material damage to the State of Canada.53
The issue of moral damages was later discussed in the famous Rainbow Warrior
arbitral awards.54 A Greenpeace civilian vessel, the Rainbow Warrior, which had been
sent in 1985 to the South Pacific to protest the nuclear tests that France was carrying
out was sunk in the Auckland Harbour of New Zealand as a result of extensive dam-
age caused by high-explosive devices installed by agents of the French Directorate
General of External Security.55 The sinking of the ship resulted in the death of a citi-
zen of the Netherlands.56 The two French agents who sunk the ship were immedi-
ately arrested by the New Zealand Government and sentenced to a term of 10 years
imprisonment.57
In order to find a solution to the problems arising from the incident, and especial-
ly because of the French desire for the immediate release of its agents,58 France and
New Zealand submitted the dispute to the UN Secretary-General for a ruling which
they both agreed to abide by. New Zealand claimed not only a formal apology for
the violation of its rights under international law and a compensation for the material
damages suffered by the ship and the persons therein,59 but also a compensation ‘for
the violation of its sovereignty and the affront and insult that involved’,60 thus for
the moral damage that it suffered as a result of the act of sinking which was commit-
ted in its internal waters and which thus violated its territorial integrity and sovereign
rights. The total amount of compensation claimed by New Zealand was 9 million
dollars for both material and moral damages.61 Whereas France expressed its
52 Some authors indicate that the monetary payment awarded by the Tribunal could also be viewed as com-
pensation for material loss, especially for expenses incurred by Canada in repatriating the crew and in the
prosecution of its case against the United States which may have been taken into consideration and that
in this case, the moral damage was repaired by satisfaction in the form of a formal apology. CC Hyde,
‘The Adjustment of the I’m Alone Case’ (1935) 29 American Journal of International Law 296; J Wexler,
‘The Rainbow Warrior Affair: State and Agent Responsibility for Authorized Violations of International
Law’ (1987) 5 Boston University International Law Journal 389, 403–04; Wittich (n 6) 356.
53 See for example C Gray, Judicial Remedies in International Law (Clarendon Press 1987) 43–44; GG
Fitzmaurice, ‘The Case of the I’m Alone’ (1937) 17 British Yearbook of International Law 82, 94.
54 Case concerning the differences between New Zealand and France arising from the Rainbow Warrior affair
(1986) 19 RIAA 199; Case concerning the difference between New Zealand and France concerning the inter-
pretation or application of two agreements, concluded on 9 July 1986 between the two States and which related
to the problems arising from the Rainbow Warrior Affair (1990) XX RIAA 215.
55 Case concerning the Rainbow Warrior Affair (1990), ibid 223.
56 ibid.
57 ibid.
58 Wexler (n 52) 399.
59 Concerning the compensation claim for material damages, New Zealand was unable to assert formal
standing to claim on behalf of either Greenpeace or the dead crewman because the Rainbow Warrior was
not a New Zealand ship and the dead crewman was a Netherlands citizen. However, New Zealand
expressed that a settlement with France would only be possible if adequate compensation was to be paid
to Greenpeace and to the family of the dead man, or if there were reasonable and binding arrangements
in place that assured that this would be done. Case concerning the Rainbow Warrior Affair (1986) (n 54)
203.
60 ibid 202–03.
61 ibid 202.
willingness to address a formal apology for its internationally wrongful act, it refused
that moral damage could be the object of pecuniary compensation.62 According to
France, the compensation could cover only the material damage that New Zealand
suffered as a result of the attack and this would have amounted to 4 million dollars.63
The UN Secretary-General decided, as the umpire, that the French Government
should pay 7 million dollars as compensation for ‘all the damage’ suffered by New
Zealand.64 This amount which was awarded without making any distinction between
material and moral damages and went far beyond the amount of material damage
claimed by France, seems to cover both material and moral damages.65
This interpretation is confirmed at the second stage of the dispute.66 Indeed, at
the first stage, the Secretary-General had also decided, along with the payment of
compensation, to transfer the two French agents to the isolated island of Hao in
French Polynesia for a period of three years. In accordance with the ruling and the
agreement signed between the parties, the agents were transferred from New
Zealand to a French military facility on the island of Hao in 1986. However, in 1987,
France transferred its officers to Paris claiming that they had to be examined and
treated in a medical clinic, in violation of the arbitral award and the agreement con-
cerned. The moral damage claim was taken up by New Zealand which argued that
by transferring its agents to Paris before the due date, France violated the arbitral
award and the agreement signed between the parties under the mediation of the UN
Secretariat and damaged its dignity, honour and prestige. The arbitral tribunal which
was established in accordance with the 1986 Exchange of Letters concerning the
implementation of the ruling67 decided that the act of France caused a new non-
material damage which was of a moral, political and legal nature. The tribunal did
not decide to make an order for monetary compensation aiming at repairing this
new moral damage caused by France, because New Zealand had not requested such
compensation. Nevertheless, reminding that the Secretary-General had awarded 7
million dollars to the Government of New Zealand as compensation for all the damage
it has suffered, the tribunal refused the French contention that satisfaction is the only
appropriate remedy for non-material damage and stated that ‘an order for the pay-
ment of monetary compensation can be made in respect of the breach of internation-
al obligations involving . . . serious moral and legal damage, even though there is no
material damage’.68
This legal precedent which to date has been analysed by several authors certainly
demonstrates that there are no limits in international law to the subject of compensa-
tion.69 This finding seems henceforth to be confirmed by the jurisprudence provided
in investor–State arbitration disputes, notwithstanding their obviously different
62 ibid 209.
63 ibid 209.
64 ibid 213.
65 For a similar opinion see Barthe-Gay (n 10) 115; Wexler (n 52) 407; Dumberry (n 4) 251.
66 See JS Davidson, ‘The Rainbow Warrior Arbitration concerning the Treatment of the French Agents
Mafart and Prieur’ (1991) 40 International and Comparative Law Quarterly 446, 454–55.
67 Case concerning the Rainbow Warrior Affair (1986) (n 54) 220–21.
68 Case concerning the Rainbow Warrior Affair (1990) (n 54) 115–20.
69 Wexler (n 52) 406.
nature. Indeed, despite the absence of rules relating directly to the issue of moral
damages in international investment law, the reparability by compensation of moral
damages suffered by legal persons seems to be admitted since the Desert Line deci-
sion,70 which could by analogy bear consequences in inter-State relations.
In 2008, the Desert Line Projects construction firm, registered in Oman, claimed
that Yemen breached the Yemen–Oman bilateral investment treaty and violated
international law by failing to pay for certain undertaken road constructions, refusing
to comply with a prior arbitral award, forcing the firm into an unfavourable settle-
ment agreement and physically threatening its employees who were arrested and
detained in the process.71 The firm sought compensation for material as well as
moral damages that it suffered because of the loss of its credit, reputation and
prestige.72
The tribunal, acknowledging that a legal person can be morally damaged ‘in excep-
tional circumstances’, awarded—for the first time in ICSID practice—compensation
for the moral injury that the firm suffered because of the violation of the concerned
treaty. Stating that ‘the physical duress exerted upon the executives of the Claimant,
was malicious and therefore constitutes fault based-liability’,73 the Tribunal found
Yemen liable to reparation not only for material but also for moral injury suffered by
the firm and awarded 1 million dollars of compensation for moral damages, including
loss of reputation.74
Although some scholars insist on the ‘exceptional circumstances’ part of the award
and doubt the reparability by compensation of moral damages suffered by legal
persons in case there is no physical duress or malicious acts,75 this decision leaves no
doubt as to the possibility of seeking compensation for moral damages suffered by a
corporation as a result of an injury to its credit, reputation and prestige. This is firstly
because, the term ‘exceptional circumstances’ seems to relate to the nature of inter-
national investment law, which is essentially about economic and financial loss. In
other words, the Desert Line should be interpreted as meaning that in this field of law
‘moral loss is rarely considered, rather than indicating that the circumstances of
moral loss should themselves be exceptional’.76 Secondly and more importantly, this
decision, by stating that ‘in most legal systems moral damages may also be recovered
besides pure economic damages’,77 appears to be holding the general principles of
70 Desert Line Projects LLC v the Republic of Yemen (2008) ICSID Case no ARB/05/17. Moral damages
under the aegis of ICSID were for the first time awarded to a corporate investor by the Benvenuti &
Bonfant v Congo decision. S.A.R.L. Benvenuti & Bonfant v People’s Republic of the Congo (1980) ICSID
Case no ARB/77/2. However, as this case was decided ex aequo et bono, it is considered that the turning
point for moral damages in investment law is the Desert Line award. Jagusch and Sebastian (n 3) 50.
71 Desert Line Projects LLC v the Republic of Yemen, ibid, paras 33, 36, 127, 185, 247.
72 ibid para 286.
73 ibid paras 289–90.
74 ibid.
75 See for example Jagusch and Sebastian (n 3) 51; JR Laird, ‘Moral Damages and the Punitive Question in
ICSID Arbitration’ (2011) ICSID Review-Foreign Investment Law Journal 171, 171–72.
76 Laird, ibid 177. See also S Ripinsky and K Williams, Damages in International Investment Law (British
Institute of International & Comparative Law 2008) 311.
77 Desert Line Projects LLC v the Republic of Yemen (n 70), para 286.
law as the legal basis for the reparability by compensation of moral damages suffered
by a legal person.78
The argument that compensation can be awarded for non-pecuniary damage
alleged by legal persons seems also to be held by the European Court of Human
Rights on the same legal ground. The Court, after reminding that the European
Commission of Human Rights has in a number of cases awarded compensation for
the non-pecuniary damage sustained by commercial companies79 indicated that in
doing so, it has taken into account the practice of the Member States of the Council
of Europe. According to the Court, ‘although it is difficult to identify a precise rule
common to all the member States, judicial practice in several of the States shows
that the possibility that a juristic person may be awarded compensation for non-
pecuniary damage cannot be ruled out’.80
Although the European Court of Human Rights is a regional Court whose jurisdic-
tion is limited to applications against contracting States of the European Convention
on Human Rights that established the Court, and to allegations of breaches of the
human rights provisions set out in the Convention and its protocols, it cannot be dis-
sociated from the international legal order and especially from the sphere of the sour-
ces of international law. Judicial decisions are considered, by Article 38 of the Statute
of the International Court of Justice as subsidiary sources of international law, which
means that the rules applicable in the international legal order either as a treaty norm,
a customary norm or a general principle of law may be determined via these deci-
sions.81 In other words, the decisions rendered by a regional human rights court may
help clarifying whether a principle constitutes a general principle of law, that is a prin-
ciple deriving from a comparison of the various systems of municipal law, shared by
all or a majority of them and thus applicable also in international law.82
In this context, the above-mentioned decisions rendered by the European Court
of Human Rights amount to saying that the principle according to which legal per-
sons can be morally damaged and that these damages can be remedied by pecuniary
means is such a commonly shared principle in domestic legal systems that it can be
applied in international law. In other words, these decisions amount to admitting
that the reparability by monetary payments of moral damages suffered by legal per-
sons constitutes a general principle of law in the sense of Article 38 of the Statute of
the International Court of Justice.
Indeed, while the reparability by monetary means of moral damages suffered by pri-
vate legal persons has always been a very controversial issue in municipal legal sys-
tems—on similar legal grounds to those advanced in public international law—and
while according to the earlier approach juristic persons that cannot feel pain and distress
could not claim monetary compensation for moral damages,83 the modern doctrine
78 For a similar opinion see F Latty, ‘Arbitrage transnational et droit international général’ (2008) 54
Annuaire français de droit international 467, 498.
79 Comingersoll S.A. v Portugal (n 45), para 33.
80 ibid para 34.
81 H Thirlway, ‘The Sources of International Law’ in M D Evans (ed), International Law (OUP 2014) 105.
82 ibid 104.
83 H Deschenaux and P Tercier, La responsabilité civile (Staempfli 1982) 52; D Barrelet, La protection de la
personnalité en droit civil (Institut de journalisme et des communications sociales 1985), 35.
which today seems to be the predominant view in civil law countries argues that moral
damages suffered by private legal persons can be remedied by compensation which does
not only aim at removing the pain and the distress but also at protecting the legal per-
sons’ credit, reputation and prestige.84 In other words, the protection of the reputation
of legal persons is considered by contemporary law of persons as a part of the personality
rights85 and there is no more doubt, at least in theory, that legal persons can be morally
damaged and can claim compensation for these damages.86
It is true that in matters of compensation for moral damages, the juristic persons to
whom international courts and tribunals have to date referred to are corporations and
not States, and that no tribunal has ever awarded compensation for moral damages suf-
fered by States in international investment disputes. However, as mentioned above,
States and corporations are both abstract legal entities which cannot feel pain and have
therefore similar attributes when it comes to being morally damaged. As there is no gen-
eral exclusion in contemporary law on ‘compensation being awarded for non-pecuniary
damage alleged by juristic persons’,87 the main argument of the opponents to the repar-
ability by compensation of moral damages suffered by States according to which these
abstract entities do not have any feelings needs to be, by analogy, refuted.88
84 F Dessemontet, ‘La presse et les sociétés commerciales’ in Die Verantwortlichkeit im Recht, Semaine juridi-
que turco-suisse (Zurich / Berne 1980; Zurich 1981) 183, 207–08; P Engel, Traité des obligations en droit
suisse: dispositions générales du CO (Staempfli 1997) 527; R Des Gouttes, ‘Tort moral I: principes’ (1955)
Fiches juridiques suisses, no 1141, 5.
85 See P Meier and E De Luze, Droit civil suisse (Schulthess 2014) 277–80.
86 In practice, municipal courts in several civil law countries admit that a legal person is entitled to the pro-
tection of its personality and that when its personality is violated, the corporate body suffers a moral dam-
age for which the company can claim compensation. For the jurisprudence of French courts see C
Broche, ‘Faut-il en finir avec le dommage moral des personnes morales ?’ (2013) Revue Lamy Droit civil
19. For an analysis of the jurisprudence of Swiss courts on the subject see C Chappuis, ‘Le tort moral :
un long fleuve peu tranquille’ in C Chappuis and B Winiger, Le tort moral en question. Journée de la respon-
sabilité civile (Schulthess 2013) 11, 24–27. For the decisions of the Turkish Supreme Court of Appeal see
D Gönen, Tüzel Kişilerde Kişilik Hakkı ve Korunması (Personality Right of Legal Persons and Its Protection)
(XII Levha 2011) 187–89.
87 Comingersoll S.A. v Portugal (n 45), paras 32 and 35.
88 It should be mentioned that the arbitral decisions given in the aftermath of Desert Line did not award
compensation for moral damages suffered by corporations in international investment disputes. However,
these decisions were given on procedural grounds such as lack of evidence or failure to properly plead
moral damages and did not deny the possibility of seeking compensation for moral damages suffered by
legal persons as a result of internationally wrongful acts offending their reputation. See, eg Técnicas
Medioambientales Tecmed, S.A. v the United Mexican States (2003) ICSID Case no ARB (AF)/00/2, para
198; Iurii Bogdanov, Agurdino-Invest Ltd & Agurdino-Chimia J.S.C. v Republic of Moldova (2005) The
Stocholm Chamber of Commerce Case, para 5.2; Victor Pey Casado and President Allende Foundation v
Republic of Chile (2008) ICSID Case no ARB/98/2, para 704; Biwater Gauff (Tanzania) Ltd v United
Republic of Tanzania (2008) ICSID Case no ARB/05/22, para 808; Bernardus Henricus Funnekotter and
others v Republic of Zimbabwe (2009) ICSID Case no ARB/05/6, paras 139–40. For a detailed analysis of
these cases see Parish, Newlson and Rosenberg (n 3) 230ff; Dumberry (n 4) 254ff; Champagne (n 2)
20–23; Wong (n 20) 75ff. It should also be pointed out that the conditions for seeking compensation
have been put on a firmer footing in Lemire case. However, ‘reputational harm’ continues to be one of
the legal bases’ for awarding moral damages to a legal entity. Indeed, the Tribunal concluded in this case
that moral damages were appropriate in exceptional cases where the State’s actions imply physical threat,
illegal detention or other analogous situations, cause a deterioration of health, stress, anxiety or other
mental suffering such as humiliation, shame and degradation, or loss of reputation, credit and social pos-
ition and whose cause and effect are grave or substantial. Joseph Charles Lemire v Ukraine (2011) ICSID
Case no ARB/06/18, para 333.
The same analogy needs to be made concerning the argument according to which
‘offenses to the reputation of States cannot be remedied by money because they are
difficult to measure’ as well. This argument which would amount to the rejection of
the concept of moral damage itself, has for a long time been debated by civil lawyers
before being rejected in municipal laws. In other words, the difficulty in measuring
moral damages by monetary standards is not unique to those suffered by States.
Based on abstract notions, moral damage is difficult to estimate in all legal systems
for all natural and legal persons, but despite this difficulty and as mentioned above,
the possibility of pecuniary compensation to redress non-pecuniary harm is admitted
in many legal systems.89 In this context, it seems hard to argue that a monetary value
cannot be attributed to moral damages suffered by States, whereas it can be done so
in cases of moral damages suffered by individuals and private legal persons.90
Besides, the issue of reparability by monetary payments of moral damages suffered
by States has been raised in a number of ICSID proceedings, which provides import-
ant guidance in this regard. The Europe Cement v Turkey91 and Cementownia v
Turkey92 decisions are particularly interesting since they do not refuse, as a matter of
principle, the possibility of seeking compensation for moral damages suffered by
States in international investment disputes.
In these cases, Turkey sought monetary compensation for moral damages to its
reputation and international standing as a result of jurisdictionally baseless claims
of two Polish corporations, respectively Europe Cement and Cementownia. In
both cases, the Tribunals declined jurisdiction over the dispute because the corpo-
rations were not able to prove their ownership of the shares, and found that the
claimants have intentionally and in bad faith abused the arbitration which consti-
tuted an abuse of process.93 Again, in both cases, the Tribunals refused to award
moral damages to Turkey on the ground that the reasoning and conclusions set
out in the awards were sufficient to remedy the reputational damages suffered by
Turkey.94
The Tribunals’ reasoning has been interpreted by a number of authors as confirm-
ing that moral damages suffered by States can only be repaired by satisfaction and
that monetary compensation is not the proper remedy for such damages.95 In the
author’s opinion, however, no such principle arises from these decisions, which on
the contrary confirm the possibility of seeking compensation for moral damages suf-
fered by States as a result of internationally wrongful acts. Indeed, the Tribunal, by
stating in Cementownia that ‘a symbolic compensation for moral damages may aim at
89 See Haasdijk (n 32) 255.

90 For a similar view Barthe-Gay (n 10) 114.
91 Europe Cement Investment & Trade S.A. v Republic of Turkey (2009) ICSID Case no ARB(AF)/07/2.
92 Cementownia ‘Nowa Huta’ S.A. v Turkey (2009) ICSID Case no ARB(AF)/06/2.
93 Europe Cement Investment & Trade S.A. v Republic of Turkey (n 91), para 128; Cementownia ‘Nowa Huta’
S.A. v Turkey (n 92), paras 157 and 159.
94 Europe Cement Investment & Trade S.A. v Republic of Turkey (n 91), para 181; Cementownia ‘Nowa Huta’
S.A. v Turkey (n 92), para 171. In Cement case, the Tribunal’s main argument was that exceptional circum-
stances, such as physical duress, were not present to justify moral damages.
95 See Champagne (n 2) 30–33; P Dumberry, ‘Satisfaction as a Form of Reparation for Moral Damages
Suffered by Investors and Respondent States in Investor-State Arbitration Disputes’ (2012) 3 Journal of
International Dispute Settlement 205, 233; Dumberry (n 4) 268.
indicating a condemnation for abuse of process’96 seems to admit that reputational

damages suffered by States can be remedied by monetary means and makes it clear
that the refusal of compensation in the case was shaped by the circumstances and
not by legal principle.
As a matter of fact, while some authors fairly questioned the expediency of treat-
ing investors and States on unequal terms,97 others rightly indicated that because of
moral damages suffered by respondent States in international investment law as a re-
sult of corporations’ abuses of process, ‘foreign investors may decide against inves-
ting (or may limit their existing investment) in the respondent State between the
arbitration request and the vindicating award, given the public allegation that the
State has failed to treat a foreign investor in accordance with international law’.98
According to this latter argument, respondent States may be entitled to an award of
moral damages in addition to a declaratory judgment when such damages indirectly
cause material harms.
One may argue that this argument can only be followed in investment arbitration
cases where investment losses, thus material damages, may easily arise from moral
damages because of the harm done to the reputation of States and cannot be applied
in classical inter-State disputes, for example in cases of insults to the symbols of the
State, violations of territorial integrity, ill-treatment against the representatives or
even international crimes.99 However, offences to the dignity of a State may also re-
sult in weakening the position of this State in the eyes of the international commu-
nity, including its economic and financial position, which may also result in indirect
material losses. The reasoning followed in investment arbitration cases may well be
applied in classical inter-State disputes and States may well be entitled to an award of
moral damages in addition to a declaratory judgment when such damages to their
dignity and reputation indirectly cause material harms.
3. R EPA R A TI ON BY P E CU N IA R Y M E AN S OF D I RE C T M OR A L
D A M A GE S : ‘ CO M P EN S A TOR Y S A TI S F AC T IO N’ OR A HI D D E N
F OR M O F P UN I TI VE D A M A GE S?
In view of the considerations above, the author believes that moral damages directly
suffered by States as a result of internationally wrongful acts may be remedied by
96 Cementownia ‘Nowa Huta’ S.A. v Turkey (n 92), para 171.

97 See Markert and Freiburg (n 5) 33.
98 Parish, Newlson and Rosenberg (n 3) 237–38. The authors are of the opinion that ‘given the potential
for such losses, ICSID tribunals should consider, in certain limited and particularly egregious cases,
awarding moral damages to a prevailing respondent state where a claim is vexatious or has been brought
fraudulently or in bad faith’.
99 As a matter of fact, the International Court of Justice refused, in its Genocide case of 26 February 2007 to
award monetary compensation to Bosnia and Herzegovina which had claimed ‘in its own right and as
parens patriae for its citizens, full compensation for the damages and losses caused’ as a result of the viola-
tions by the Federal Republic of Yugoslavia (Serbia and Montenegro) of the Convention on the
Prevention and Punishment of the Crime of Genocide. In the eyes of the Court, Serbia had not commit-
ted genocide but violated its obligation to prevent this crime and the mere declaration of this finding was
deemed to be in itself appropriate satisfaction. Case Concerning Application of the Convention on the
Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Serbia and Montenegro),
Judgement, ICJ Rep 2007 (February 26) 43, paras 65(7) and 463.
monetary means along with classical satisfaction measures.100 This also seems to be
possible in light of the ILC articles. Indeed, ILC Article 37, paragraph 2, by providing
that ‘satisfaction may consist in an acknowledgement of the breach, an expression of
regret, a formal apology or another appropriate modality’ does not dismiss the possi-
bility of monetary payment for the reparation of direct moral damages suffered by
States as a result of internationally wrongful acts.101 The list provided by the Article
is not exhaustive and it is admitted that ‘the appropriate form of satisfaction will de-
pend on the circumstances . . .’ and that ‘many possibilities exist, including . . . the
award of symbolic damages for non-pecuniary injury’.102
It should also be mentioned that according to the commentary to Article 36:
‘as compared with satisfaction, the function of compensation is to address the

actual losses incurred as a result of the internationally wrongful act. . . .
Compensation corresponds to the financially assessable damage suffered by
the injured State or its nationals. . . . Thus compensation generally consists of
a monetary payment, though it may sometimes take the form, as agreed, of
other forms of value. It is true that monetary payments may be called for by
way of satisfaction under article 37, but they perform a function distinct from
that of compensation. Monetary compensation is intended to offset, as far as
may be, the damage suffered by the injured State as a result of the breach.
Satisfaction is concerned with non-material injury, specifically non-material
injury to the State, on which a monetary value can be put only in a highly
approximate and notional way’.103
These statements, along with jurisprudence, allow us to conclude that satisfac-

tion can take the form of payment of money but the reparation by pecuniary
means of direct moral damages suffered by States needs to be distinguished from
the classical form of compensation and to be seen as a ‘compensatory satisfaction’.
This is indeed a proposition to revive one part of the formula of Article 45 of the
draft text adopted by the ILC on its first reading in 1996,104 according to which
100 For a similar view see Haasdijk (n 32) 253–55; Barthe-Gay (n 10) 113; Report of the International Law
Commission on the work of its fifty-second session (1 May–9 June and 10 July–18 August 2000), by
the Special Rapporteur J Crawford, Supplement no 10, Yearbook of the International Law Commission,
2000, Vol II, Part Two, para 235.
101 Second report on State responsibility (n 10), para 137.
104 Draft articles on State Responsibility with Commentaries thereto adopted by the International Law
Commission on first reading, January 1997, 97-02583. According to art 45, para 2, ‘satisfaction may take
the form of one or more of the following: (a) an apology; (b) nominal damages; (c) in cases of gross in-
fringement of the rights of the injured State, damages reflecting the gravity of the infringement; (d) in
cases where the internationally wrongful act arose from the serious misconduct of officials or from crim-
inal conduct of officials or private parties, disciplinary action against, or punishment of, those
responsible’.
satisfaction may take the form of nominal damages through the payment of sym-
bolic sums.105
Indeed, monetary payments as a form of satisfaction have a different nature than
compensation. While the latter aims at compensating, as far as possible, the damage
suffered by the injured State as a result of the internationally wrongful act and is
determined mechanically, satisfaction relates to an immaterial damage to which a
monetary value can be attributed only in a very approximative and theoretical way.106
In other words, compensation as a form of satisfaction would be ‘assessed globally,
without reference to proven financial losses’,107 and have a symbolic nature.108
This is also why reparation by monetary payments of direct moral damages suf-
fered by States needs to be distinguished from ‘punitive damages’.
Punitive damages are generally defined as ‘the payment of damages in addition to
actual (compensatory) damages when the defendant acted with recklessness, malice,
deceit, or other reprehensible conduct (e.g., violence, oppression, fraud)’.109 Thus,
they are awarded in order to punish and deter the especially wilful or malicious con-
duct of the defendant.110 While their availability varies among countries,111 punitive
damages which would risk having a ‘subjective and idiosyncratic aspect’112 and bring-
ing ‘a great deal of unpredictability’113 have traditionally been excluded from the
international law of compensation. It is also admitted that ‘the preservation of the
dignity of a State is incompatible with it being punished by an international tribu-
nal’.114 Both according to the official commentary to ILC articles115 and to the inter-
national legal doctrine,116 compensation is not concerned with punishing the
105 A similar proposition is made by Barthe-Gay who takes a favourable position towards the reparability by
pecuniary means of direct moral damages suffered by States and who criticizes the ILC for not having
adopted, in the final text, the concept of ‘pecuniary satisfaction’, which was provisionally provided by art
45 of the text adopted by the Commission in 1996. Barthe-Gay (n 10) 113. For an opposite view see
Wittich (n 6) 367. According to the author, ‘the availability of monetary payments should not be ruled
out a priori for non-material damages to the State. However, the author argues that these payments
should be awarded under the title of compensation rather than satisfaction because the term ‘pecuniary
satisfaction’ is misleading and should be abandoned.
106 Barthe-Gay (n 10) 113–14; Parish, Newlson and Rosenberg (n 3) 230.
108 The quantification of moral damages would necessarily rest on equitable considerations to which the
International Court of Justice made reference in its Diallo case. Case Concerning Ahmadou Sadio Diallo
(Republic of Guinea v Democratic Republic of the Congo), Judgment, ICJ Rep 2010 (November 30) p 639,
para 24. Equitable considerations seem to have been taken into account by human rights courts as well.
See Wong (n 20) 92–93.
109 S Wittich, ‘Punitive Damages’ in J Crawford, A Pellet and S Olleson (eds), The Law of International
Responsibility (OUP 2010).
110 J Gotanda, ‘The Unpredictability Paradox: Punitive Damages and Interest in International Arbitration’
(2009) 4 The Journal of World Investment & Trade 553, 554.
111 ibid 554–55; Champagne (n 2) 37.
112 Jagusch and Sebastian (n 3) 61.
115 ‘The award of punitive damages is not recognized in international law even in relation to serious breaches
of obligations under peremptory norm’. Commentary to art 36, paras 4, 99 and to Chapter III, paras 5, 111.
116 Jagusch and Sebastian (n 3) 58; Champagne (n 2) 37–39; J Barker, ‘Compensation’ in J Crawford and
others (eds), The Law of International Responsibility (OUP 2010) 599, 605; Latty (n 78) 501; Smutny (n
33) 6; Dumberry (n 4) 275; Wong (n 20) 96.
responsible State and is not exemplary but restorative in nature. International judicial
decisions confirm this finding,117 despite some controversy in international invest-
ment arbitration.118
In this context, it is maintained that in order to be restorative in nature, the
amount of the payment should be no more and no less than what is necessary to
erase the damage arising from the internationally wrongful act.119 Moreover, it is
often argued that, in case of moral damages which, unlike material damages, are not
objectively measurable, the payment cannot be equivalent to the exact ‘value’ of the
damage and thus, cannot be considered as remedying the harm but rather punishing
the responsible State. In other words, it is often claimed that the difficulty of measur-
ing moral damages and the large discretion that the judges and arbitrators have in
doing so, would make the monetary compensation into a form of punitive
damages.120
This argument seems unfounded for two main reasons. Firstly, ‘under the punitive
conception, the focus is on the conduct of the state as opposed to the effects . . .’121
of the internationally wrongful act. In other words, what makes damage punitive is
the nature of the act, whereas moral damage is considered to arise whenever the
internationally wrongful act offends State’s dignity, honour and prestige, regardless
of whether or not the act is malicious. Thus, the purposes of punitive and moral
damages are different. While punitive damages are motivated by deterrence and pun-
ishment, moral damages aim at compensating the injury.122 While punitive damages
consist in the payment of a compensation ‘in addition’ to actual compensatory dam-
ages, compensation for direct moral damages would not be awarded ‘in addition’ to
any other damage, but only for ‘recovery of damage to non-economic interests’,123
namely for the injury to State’s reputation and moral status in the international
community.124
Secondly, it is undeniable that measuring direct moral damages suffered by States
is difficult, subjective and variable. But isn’t it so for indirect moral damages suffered
by States whose reparability by compensation are however acknowledged in
117 See, eg Lusitania (United States v Germany) (n 1) 38–44; Dispute Concerning Responsibility for the Deaths
of Letelier and Moffitt (United States v Chile) (n 48) 14–15.
118 For example, the Desert Line (n 70) and Lemire (n 88) decisions seem to combine both the punitive and
compensatory conceptions of moral damages, which has given rise to some debates in international legal
doctrine. In these cases, the Tribunals, discussing whether or not to award moral damages in light of the
concepts of ‘fault’ and ‘malice’, appeared to be intended not only to remediate the damages but also to
punish the respondent States. Champagne (n 2) 37. See also Jagusch and Sebastian (n 3) 54 and 58;
Champagne (n 2) 37; Laird (n 75) 172 and 182.
120 For instance, Latty is of the opinion that the umpires have a great deal of flexibility in determining the
amount of the compensation that would be awarded for direct moral damages suffered by States as a
result of internationally wrongful acts but ‘the line between the equitable and the arbitrary can become
tenuous’. Latty (n 78) 501. Similarly, Gotanda indicates that as compensation for moral damages ‘can be
highly unpredictable, particularly in the absence of applicable guidelines, caps, or appellate bodies that
greatly control the circumstances and the amounts of awards’, it should be avoided. Gotanda (n 110)
558.
122 Laird (n 75) 173.
123 Ripinsky and Williams (n 76) 307.
124 Gotanda (n 110) 556.
international law? An award of damages, even material ones, always involves a discre-
tionary element and it is possible that moral reparation involves a penal element, like
assuring the non-repetition of the internationally wrongful act. However, ‘the fact
that an award of damages often involves a considerable discretionary element does
not mean that this is primarily of a punitive character’125 and the principle itself of
reparation by monetary means of moral damages suffered by States as a result of
internationally wrongful acts that offend their credit, reputation and prestige would
not mean imposing punitive damages on wrongdoing States. The fact that in cases of
moral damages the degree of the discretion is higher compared to that in cases of
material damages would not make moral damages into punitive damages but should
rather be considered as a consequence of their nature.
However, and because of the fact that awarding serious amounts of money could
risk bearing such a consequence, the reparation of direct moral damages suffered by
States needs to be realized by payments of symbolic sums.126 This is where the prop-
osition of this article differs from the above-mentioned Article 45 which was formu-
lated as that in cases of gross infringement of the rights of the injured State,
satisfaction may take the form of damages reflecting the gravity of the infringement.
Such reasoning would implicitly imply a reference to the concepts of ‘fault’ or ‘egre-
gious conduct’ which would risk making the payments into punitive damages and
should be avoided for the obvious reasons arising from the nature of the law of State
responsibility.127 Whereas the reparation by ‘payments of symbolic sums’ of direct
moral damages suffered by States as a result of internationally wrongful acts would
not amount to punitive damages because they would not aim at imposing an extra
amount of compensation in addition to the actual damages and punishing the wrong-
doing State but rather at ensuring the principle of full reparation.128
4. C ON C LU S IO N
The differences of opinion among international lawyers with regard to the reparabil-
ity by pecuniary means of moral damages suffered by States as a result of internation-
ally wrongful acts seem to be related to the differences of opinion with regard to the
definition of the concept of moral damage as well as the purpose of compensation.
125 H Lauterpacht, ‘Règles générales du droit de la paix’ (1937) 62 Collected Courses of the Hague
Academy of International Law 95, 355; Jorgensen (n 5) 261.
126 A similar view is maintained by Commissioner Vicu~ na in his separate concurrent opinion to Re Letelier
and Moffit decision. Vicu~ na indicates that ‘an excessive or disproportionate amount of compensation can
result in the punishment or repression of the defendant State, regardless of whether or not it is labelled
punitive’. Separate Concurrent Opinion of Professor Francisco Orrego Vicu~ na, Dispute Concerning
Responsibility for the Deaths of Letelier and Moffitt (United States v Chile) (n 48) 15.
127 For a similar view see Jagusch and Sebastian (n 3) 59–60. Indeed, another argument put forward against
the reparation by monetary payments of direct moral damages suffered by States as a result of inter-
nationally wrongful acts is that in awarding moral damages, several tribunals have taken into account
‘fault’ and ‘malicious conduct’ on the part of the respondent States, despite the fact that these concepts
are not compatible with the only compensatory function of the monetary relief. It is argued that refer-
ence to these concepts risks making compensation for moral injuries into punitive damages. Champagne
(n 2) 39–40; Wong (n 20) 95.
128 See Dumberry (n 4) 275–76.
Moral injuries result in damages to the reputation of States whose legal personal-
ity and sovereignty are offended as a result of internationally wrongful acts. In this
context, compensation for moral damages should not be perceived as an instrument
that aims at fixing the feeling of injustice of the injured States or at counterbalancing
the pain and the distress that they suffer. It should rather be considered as a method
of reparation that aims at covering the losses suffered in moral values because of the
offences committed to their reputation and at sending a message to the international
community that States’ dignity, honour and prestige should be respected.
Indeed, the method of satisfaction which generally consists in an acknowledge-
ment of the breach, an expression of regret or a formal apology protects the inter-
national lawfulness ‘in a retrospective way in so far as it concerns the recognition of a
violation of international law committed by a State in the past’.129 Reparation by pe-
cuniary means of direct moral damages suffered by States as a result of international-
ly wrongful acts could assign this method of reparation a preventive and dissuasive
role in assuring that international law is respected and could thus protect the inter-
national lawfulness in a prospective way.130
129 Barthe-Gay (n 10) 128.

130 ibid.

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Reparation by Pecuniary Means of Direct Moral

11 Barthe-Gay, ibid 107.

protection.28 ‘The injury inflicted upon an individual, a national of the claimant

disputes could be applied in classical public international law disputes by analogy

37 See Przetacznik (n 23) 943; Haasdijk (n 32) 253; Graefrath (n 5) 84.

objections,52 is generally and rightly considered as a compensation for the moral

89 See Haasdijk (n 32) 255.

indicating a condemnation for abuse of process’96 seems to admit that reputational

96 Cementownia ‘Nowa Huta’ S.A. v Turkey (n 92), para 171.

‘as compared with satisfaction, the function of compensation is to address the

These statements, along with jurisprudence, allow us to conclude that satisfac-

129 Barthe-Gay (n 10) 128.

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