Compensation for Reflective Losses of Company Shareholders in International Investment Law

Development summary

Berkay Yilmaz’s article in the Public and Private International Law Bulletin addresses shareholders’ claims for reflective loss in international investment arbitration, where the loss is suffered by the company rather than directly by the shareholder. The piece notes the general tendency in domestic and international law to reject such claims, contrasts this with reported ICSID tribunal decisions allowing them, and identifies the resulting risks of double recovery, parallel proceedings and conflicting awards. It also discusses treaty-based clauses and tribunal-level procedural devices, including consolidation, lis pendens, abuse of rights and procedural abuse, as ways to contain those risks.