The 77th Session of the ILC through the Eyes of Research Assistants to a Commission Member. Part 6. Compensation for the Damage Caused by Internationally Wrongful Acts

The International Law Commission (ILC) addresses some of the most topical issues in international law. Its work is closely followed by many international lawyers. The ILC’s current and long-term programmes of work include issues that are also within the research agenda of the International and Comparative Law Research Center. At various times, the ICLRC has worked on some specific issues that are currently under consideration by the Commission, analyzing relevant State practice, and, at the request of Commission special rapporteurs on particular topics, compiling Russian-language materials on State practice and doctrine.

Since 2024, ICLRC researchers have also participated in ILC sessions as research assistants to the ILC member Mr. Evgeny Zagaynov (Russian Federation). In 2025, Aleksei Petrenko, ICLRC Senior Researcher in Public International Law, attended the meetings in Geneva in that capacity. Aleksei prepared an overview (in Russian) describing the Commission’s functions and role, the status of its work on various topics, and his personal impressions of the ILC’s 76th session.

From April 27 to June 5 and from June 29 to July 30, 2026, the Commission held its 77th session at the United Nations Office at Geneva. Egor Fedorov, Head of Research Projects (Law of the Sea), and Anastasiia Santalova, and Andrey Buyankin, Associate Researchers in Public International Law, participated as research assistants to Mr. Evgeny Zagaynov and share their impressions of the convened work.

In a series of publications, Egor, Anastasiia, and Andrey discuss the principal issues and the course of the debates on the topics that they had an opportunity to work on.

Andrey Buyankin

The obligation to make reparation for injury caused by a breach of international law seems quite straightforward. But when it comes to determining the amount of compensation, many difficult questions arise. What types of damage are compensable? What practice should be relied upon? Are there limits to the amount that can be recovered from a State?

These are precisely the questions addressed by another topic considered during the second part of the seventy-seventh session of the International Law Commission (ILC): “Compensation for the damage caused by internationally wrongful acts”. Mārtiņš Paparinskis (Latvia) has been appointed Special Rapporteur (SR) for the topic.

This topic, too, was included in the Commission’s programme of work at its previous, seventy-sixth session, in 2025. Its consideration is therefore only just beginning. At this session, the Commission had before it the first report, which outlines the contours of future work. As in the case of the topic of due diligence, no draft provisions have been submitted to the Commission. Moreover, the report does not yet set out positions on most of the key issues; these will be formulated only in subsequent reports (although the report already contains some indications of the positions held by the SR).

The Commission took up the topic because its principal instrument on international responsibility — the Articles on Responsibility of States for Internationally Wrongful Acts, which largely reflect existing customary international law — does not address the details of compensation and confines itself to general provisions. This brevity is partly explained by the fact that, at the time, the Commission had very little relevant material (primarily judicial decisions). However, since then, a large body of judicial, arbitral, and other practice on compensation has accumulated. This makes it possible to develop the Articles on State Responsibility as regards compensation in the light of the experience gained, as well as to clarify certain provisions of the Articles.

A few introductory words on compensation. Under article 36 of the Articles on Responsibility of States for Internationally Wrongful Acts, compensation shall cover “any financially assessable damage including loss of profits insofar as it is established”. Interest may also be payable when necessary in order to ensure full reparation; the interest rate and mode of calculation are to be set so as to achieve that result (article 38). As a general rule (article 36), compensation is available to the extent that the damage is not made good by restitution (the exceptions being special rules or cases where the claimant itself requests compensation instead of restitution).

The two main issues at this stage of the consideration of the topic are:

1)     scope of the topic — which aspects of compensation will be examined by the Special Rapporteur and the Commission;

2)     practice — which sources and materials will be used in the study.

Let us turn first to the issues relating to the practice that will be used in the Commission’s further work, and then to the scope of the topic.

Practice

The Problem of Unreliable Practice

There is currently a large body of judicial and arbitral decisions on compensation. The main source of such practice is investment arbitration and, to a lesser extent, human rights courts. Yet it is investment arbitration that is most criticized for misapplying international law. The main criticism of investment arbitration practice in this area concerns the excessive amounts of compensation awarded, in particular as a result of the accrual of interest.

A number of members of the Commission cautioned the SR against relying on such investment arbitration practice, citing specific examples. Thus, Evgeny Zagaynov (Russian Federation) mentioned the Yukos case, in which the tribunal awarded the claimants $50 billion, as well as Tethyan Copper v. Pakistan, in which the tribunal awarded the claimant $6 billion, amounting to more than two per cent of the respondent State’s GDP. Moreover, the amount awarded was equal to that of a loan from the International Monetary Fund (IMF) received at around the same time. Claudio Grossman Guiloff (Chile) proposed focusing on compensation paid in human rights proceedings rather than examining the practice of investment tribunals.

In addition, a significant part of the practice concerns so-called self-contained regimes of responsibility (or simply special rules on compensation). This raises the question of the extent to which such practice may be taken into account by the Commission.

The Special Rapporteur, who had previously expressed a reserved attitude towards investment arbitration awards, agreed with the criticism. At the same time, he stressed the need to distinguish between two matters: the quality of a decision in terms of whether it can be used as material for the study, and whether it falls within a field governed by special legal rules. In any event, he intends to approach both matters with caution.

Voluntary Payments and Treaty Practice

Mathias Forteau (France) suggested that the SR should not rely entirely on the practice of international courts. The Commission should, first and foremost, take into account State practice (for example, statements made by States in judicial proceedings). In this regard, however, Giuseppe Nesi (Italy) observed that statements by States in judicial proceedings do not always reflect opinio juris, since they may be dictated by strategic or political considerations.

In addition, a number of members suggested that the SR pay more attention to examining such forms of State practice as treaties on the payment of compensation, as well as voluntary payments in general. The first report refers mainly to international judicial practice rather than treaty practice, although the SR intends to examine the relevant agreements as well. At the same time, Dapo Akande (United Kingdom) pointed to the limited value of treaties in this respect, since it is difficult to discern in them any opinio juris on specific issues of compensation.

Indeed, in a number of cases compensation is replaced by ex gratia payments (that is, payments of money made without the State acknowledging its international legal responsibility). It remains unclear, however, how such payments affect the right to claim compensation and the determination of its amount. This was pointed out by Charles Chernor Jalloh (Sierra Leone), and Evgeny Zagaynov.

In summing up, the SR, for his part, agreed that treaty practice is important for the study, as is the practice of voluntary payments.

Scope

In the first report, the SR outlined the envisaged boundaries of the study, focusing on the “secondary” rules of international responsibility. Consequently, the subject-matter scope (ratione materiae) excludes the questions of:

• which internationally wrongful act gave rise to international responsibility;

• who decides on the obligation to pay compensation (the institutional aspect) and how payment of compensation can be enforced (implementation of responsibility).

As regards the personal scope (ratione personae), the SR includes in it, in addition to compensation in relations between States:

• cases where responsibility is invoked not by a State but by an international organization or a private person;

• cases where compensation is paid by an international organization.

At the same time, the SR does not include in the personal scope questions of compensation payable by private persons, namely persons convicted by international criminal courts.

Members of the Commission generally supported the SR’s position, although there were some minor differences of opinion as to whether compensation by international organizations should be examined. Penelope Ridings (New Zealand), Dapo Akande (United Kingdom), and Mathias Forteau spoke in favour of excluding this aspect. In response, Olufemi Elias (Nigeria) pointed out that, given the broad powers of international organizations, it would be undesirable to exclude entirely the question of compensation payable by them.

In summing up, the SR observed that, in his view, members of the Commission were rather inclined to have these questions examined. He intends to form his final position taking into account the statements made by States in the Sixth Committee of the UN General Assembly.

In addition, members of the Commission shared their views on, inter alia:

• the need to consider issues relating to compensation for historical injustices / colonial oppression / colonialism;

• the applicability of the concept of “crippling compensation”;

• the examination of the effect of peremptory norms, as well as obligations erga omnes, on the applicable rules on compensation;
• the existence of “punitive” damages in international law.

Colonialism

In recent years, various claims by former colonies against their former metropolitan States for reparation of the harm caused during the colonial era have become increasingly prominent. The main legal obstacle to satisfying such claims is the fact that most of the crimes of colonialism (slavery, genocide, apartheid, racial segregation, etc.) were not contrary to international law at the time they were committed. Thus, the first attempt to prohibit slave trade at the international level was made only at the Congress of Vienna (1814–1815). Moreover, what the Congress enshrined was merely an aspiration to put an end to the slave trade, rather than a legal obligation to eradicate it.

Some such claims have by now been settled on the basis of voluntary payments without any acknowledgement of international legal responsibility. For example, the Joint Declaration of Germany and Namibia of 2021, under which the German Government agreed to pay, over a period of 30 years, an amount of €1.1 billion (para. 18 of the Declaration), acknowledges only “moral responsibility” for the genocide committed at the beginning of the twentieth century.

At the same time, the March resolution of the UN General Assembly “Declaration of the Trafficking of Enslaved Africans and Racialized Chattel Enslavement of Africans as the Gravest Crime against Humanity” is expressly premised on the assertion that developed States bear international legal responsibility for the crimes of colonialism and are under an obligation to make reparation for the damage caused. The United States, Israel, and Argentina voted against the resolution, while a number of European countries abstained.

The report states that compensation for colonial oppression does not fall within the scope of the topic as defined by the SR. The study is concerned with compensation as a form of reparation, rather than with determining the acts for which it is paid. At the same time, the SR allows that practice relating to compensation for historical injustices may be taken into account in future work.

During the debate, some members of the Commission drew attention to the importance of examining compensation for colonial oppression within the topic. In particular, Keun-Gwan Lee (Republic of Korea) suggested addressing the question of the temporal application of international law (intertemporal law). Mathias Forteau noted the relevance of this issue for evidentiary purposes, since a State may subsequently acknowledge its responsibility for acts committed in the past. Evgeny Zagaynov and Charles Chernor Jalloh drew attention to the above-mentioned resolution on the slave trade, and Olufemi Elias to relevant proceedings before national courts.

Summing up the debate, the SR initially reaffirmed his position, stating that the answer to these issues has long been provided by the Articles on State Responsibility. Responsibility can arise only for a wrongful act; consequently, if an act was not wrongful at the time it was committed, there can be no responsibility (although voluntary payments may be made). Subsequently, however, the SR relied on his own caveat that questions of compensation for historical injustices may fall within the scope of the topic as relevant practice, and indicated that he would examine this matter in the course of further analysis.

Crippling Compensation

The examples from investment arbitration practice cited above show that the amount of compensation can be extremely large. In this regard, it is worth noting the view (held, in particular, by the SR) that the financial burden imposed on a State in the context of its economic situation may be taken into account in determining the amount of compensation. In other words, once compensation has been paid, the population of the State should not be left utterly destitute. Proponents of this view describe compensation that does not meet these criteria as “crippling”.

History offers a number of telling examples of such treatment of a responsible State leading to dire consequences. For instance, the imposition of exorbitant reparations on Germany after the First World War is considered to be one of the causes of the subsequent outbreak of the Second World War. The Special Rapporteur has previously examined this issue in detail and has devoted several academic articles to it. A number of members of the Commission (for example, Evgeny Zagaynov and Penelope Ridings) supported the intention to examine this question in the course of the Commission’s work.

Thus, among other things, the concept of “crippling compensation” raises the question of its relationship with the principle of full reparation, with which it is said to be incompatible (although Ridings, for example, took the view that the two do not necessarily contradict each other): the responsible State must “wipe out all the consequences of the illegal act” (Factory at Chorzów), regardless of the financial position in which it would find itself as a result.

It may also be recalled that, in the Société Commerciale de Belgique case, the Permanent Court of International Justice expressly rejected Greece’s reliance on a crisis as a ground for non-payment of compensation for breach of a concession contract.

Dapo Akande, for his part, stressed that, if the SR wishes to consider compensation payable by international organizations, it is unclear how the concept of crippling compensation could apply to them. August Reinisch (Austria), by contrast, recalled that, during the financial crisis of the early 1990s, the United Nations had limited the amount of compensation paid to private persons. He also noted that similar considerations could be useful in the context of the current crisis of the UN budgetary system.

Thus, in its further work, the Commission will examine the concept and nature of crippling compensation, the rules applicable to it and the conditions for their possible application.

The Effect of Peremptory Norms, As Well As Obligations Erga Omnes, on the Applicable Rules on Compensation

As regards peremptory norms (jus cogens), the report states that compensation for their breach will not be “directly” addressed in further work. A similar position is proposed with regard to obligations erga omnes.

Mathias Forteau disagreed with this limitation, stating that “the scale of the damage caused in recent conflicts” requires consideration of the question of reparation in the event of a breach of an obligation erga omnes or a norm of jus cogens. In his view, the assessment and determination of compensation in the event of such a breach raise specific problems, particularly where compensation is claimed by States on behalf of and in the interest of other States or affected peoples.

In the same context, Forteau pointed to the problem of mass claims and the resulting need to examine the various registers of damage maintained by injured States. Such registers are necessary for calculating compensation for acts constituting breaches of jus cogens norms and erga omnes obligations. With regard to obligations erga omnes, Forteau’s position was indirectly supported by Dapo Akande.

Evgeny Zagaynov, in response, stressed that, in his view, the so-called registers technically “precede” the establishment of State responsibility, being one of the instruments for asserting an alleged breach of a primary rule of international law and the damage resulting from it. They record claims, not the damage that was actually caused or that will subsequently be determined. Moreover, registers of damage are procedural mechanisms for the selection and systematization of existing claims, but they are not in themselves intended to determine the amount of compensation. A different approach, in his view, would lead to an excessively broad interpretation of the “determination of the amount” of compensation. In addition, some of these registers have a weak legal basis.

The Special Rapporteur did not take any explicit position on these issues.

Punitive Damages

It is generally considered that reparation in international law is always compensatory (restorative) in nature: the injured party cannot receive more than it has lost. This approach is reflected in the Articles on State Responsibility.

At the same time, there exists the concept of “punitive damages”, that is, sums paid as a punishment for a breach of an obligation. These should be distinguished from situations in which a State subsequently aggravated the breach in some way (thereby increasing the amount of compensation).

In the first report, the SR stated that the question of punitive damages would not be examined. This approach was supported, in particular, by George Rodrigo Bandeira Galindo (Brazil) and Vilawan Mangklatanakul (Thailand). However, it also drew criticism from some members of the Commission.

There is a view that punitive damages may be a consequence of a breach of a peremptory norm. It was already put forward during the preparation of the Articles on Responsibility of States for Internationally Wrongful Acts. At that time, the Commission did not include such proposals in the text and rejected the idea of punitive damages. It is unclear, however, whether this means that they are excluded altogether. The articles themselves state that the consequences of a breach of a peremptory norm set out therein are not exhaustive. Some members of the Commission observed that the decision not to include this idea in the Articles does not necessarily mean that such payments are impermissible under international law, and referred to existing practice of awarding them (for example, Ahmed Amin Fathalla (Egypt)).

In summing up, the SR explained that he had proceeded on the basis that punitive damages are impermissible in contemporary international law, and that he would not dwell on this matter in more detail in his next report.

Form of the Commission’s Final Outcome

The possible form of the Commission’s final outcome was also discussed. The results of its work may take the form, in particular, of articles, principles or guidelines.

Initially, in the syllabus for the topic, the SR leaned towards principles. In the report, however, he expressed a stronger preference for the form of articles. In his view, such an approach would ensure continuity with other texts of the Commission on the law of international responsibility, above all the Articles on Responsibility of States for Internationally Wrongful Acts. In addition, it would avoid confusion between the form of the final outcome and the source of the obligation to pay compensation (international custom or a general principle of law). The SR noted that the form of articles had received greater support in the Sixth Committee of the UN General Assembly.

Members of the Commission were, on the whole, cautious about the idea of recording the outcome of the Commission’s work in the form of articles. At the same time, some supported precisely that form (Ridings, Xinmin Ma (China), Galindo). Others pointed out, inter alia, that:

• in the Commission’s practice, articles have often presupposed the possibility of an international treaty being concluded in the future. In the present case, however, the likelihood of this is low (Evgeny Zagaynov);

• support for articles in the Sixth Committee was not unanimous: this option received only “slightly more” support (Alioune Sall (Senegal));

• the Commission is rather engaged in clarifying existing rules (for example, Nesi) and providing a certain amount of guidance to States (Sall, Nesi). Other, more flexible forms (Forteau) may be better suited for this purpose.

Other possible forms suggested included principles, guidelines, and a practical handbook.

Following the exchange of views, the SR indicated that he would decide on the form of the final outcome in his second report, taking into account the positions to be expressed at the meetings of the Sixth Committee of the UN General Assembly.