REPORTS OF INTERNATIONAL ARBITRAL AWARDS RECUEIL DES SENTENCES ARBITRALES Eritrea-Ethiopia Claims Commission - Final Award - Ethiopia's Damages Claims 17 August 2009 VOLUME XXVI pp. 631-770 NATIONS UNIES - UNITED NATIONS Copyright (c) 2009 PART XVIII Final Award Ethiopia’s Damages Claims Decision of 17 August 2009 Sentence finale Réclamations de l’Éthiopie Décision du 17 août 2009 Part XVIII—final AWARD ethiopia’s damages claims 633 Final Award, Ethiopia’s Damages Claims Decision of 17 August 2009 Sentence finale, Réclamations de dommages de l’Éthiopie, Décision du 17 août 2009 The final awards on claims for damages complete the Commission’s work— except for administratie matters, disposition of its archies and potential post-Award matters . Compensation can only be awarded where there is eidence sufficient in the circumstances to establish the extent of damage caused by conduct the Commission preiously found to hae violated international law . The awards probably do not reflect the totality of damages suffered by either Party but rather the damages that could be established with sufficient certainty through aailable eidence in complex interna- tional legal proceedings between Parties with modest resources and limited time . Eidence of physical damage to buildings and infrastructure is more readily gathered and presented than eidence of the extent of injuries, including physical, economic and moral injuries, to large numbers of indiiduals . There is no sharp dis- tinction between loss of property and death or personal injury in poor countries where security of property is often vital to surial . Awards for loss or destruction of property frequently stem from serious threats to physical integrity . The compensation claims are entirely for violations of law suffered by the State party rather than claims on behalf of its nationals . The compensation awarded reflects the seriousness of those violations and their effects on the Claimant State Party rather than appropriate compensation for indiidual ictims . On 13 April 2006, the Commission established a simplified “fast-track” dam- ages phase, inoling a limited number of legal pleadings and eidence as well as a tight schedule of hearings, to limit the significant financial and other burdens imposed upon both Parties . The Commission also reiterated its recurring concern that proceeds accruing from the damages proceedings be used by the Parties to assist ciilian victims of the conflict . The Parties’ limited economic capacity is releant in determining damages claims . There is an intersection of the law of State responsibility with fundamental human rights norms . The fundamental human rights law rule of common Article 1 (2) of the International Coenants is applicable to the Parties notwithstanding the dele- tion of this qualification by the International Law Commission (ILC) in the Articles on State Responsibility . There is no need to decide the question of a possible cap on damages in light of the Parties obligations under human rights law in the present circumstances . The Parties’ oerall economic position is also releant to determining compensa- tion for violations of jus in bello. The purpose of compensation payable by a responsible State is to wipe out all consequences of the illegal act and reestablish the preexisting sit- uation (Chorzów Factory and ILC Articles on State Responsibility, art . 31) . Diplomatic protection claims by a State on behalf of its nationals are based on injury to the State, 634 ERITREA/ETHIOPIA but the extent of injury to affected indiiduals can play a significant role in assessing the State’s injury . Compensation has a limited role which is remedial, not punitie . In situations inoling diplomatic protection, compensation must be assessed in light of the social and economic circumstances of the injured indiiduals in respect of whom the State is claiming . Compensation determined in accordance with international law cannot remedy the world’s economic disparities . The international law rule giing binding effect to matters already authoritatiely decided (res judicata) has particular releance at this stage of the proceedings . The Commission’s preious findings on claims of violations of international law are final and binding, and define the extent of possible damages . Compensation can only be awarded for injuries which bear a sufficiently close causal connection with conduct that the Commission preiously found to violate international law . The task of the Commission at this phase is not to reise or expand its prior findings on liability, but to apply those findings in determining appropriate compensation . The Commission required clear and conincing eidence that damage occurred, but less rigorous proof for purposes of the quantification of damages which requires exercises of judgment and approximation . The Commission recognized its obligation to determine appropriate compensation, een if the process inoles estimation, or een guess work, within the range of possibilities indicated by the eidence . The Com- mission further took into account a trade-off fundamental to recent international efforts to address injuries affecting large number of victims . Compensation leels were thus reduced, balancing uncertainties flowing from the lower standard of proof . Compensation can only be awarded in respect of damages haing a sufficient causal connection with conduct that violates international law . The necessary con- nection characterized by the term “proximate cause” requires a chain of causation sufficiently close in a particular situation, taking into account whether the particular damage should hae been reasonably foreseeable to an actor committing the interna- tional delict in question . Determining compensation in large inter-State claims is not a mechanical proc- ess . The Commission considered multiple factors, including the nature, seriousness and extent of particular unlawful acts, whether the acts were intentional as well as any mitigating or extenuating circumstances . It also considered the number of persons who were ictims of particular iolations and the implications for their future lies . The Commission decided not to award interest since the claims and awards are broadly similar; interest on the compensation would not materially alter the Parties’ economic positions; the amounts awarded in many cases reflect estimates and approxi- mates which militates against interest; and the Parties hae been diligent and coopera- tie with no prejudice resulting from dilatory conduct . Past decision and practice suggest elements of a legal framework for analyzing compensation claims for violations of jus ad bellum, but offer limited guidance in determining the compensation due on account of such a violation . The Commission found, like the U .S—German Mixed Claims Commission, that responsibility of a vio- lation of jus ad bellum does not extend to all losses and disruptions accompanying an international conflict . Sufficient causal connection must be established between the delict and the injury . The Commission has in this regard assessed whether particular consequences were, or should hae been, foreseen by Eritrea’s leaders in the exercise Part XVIII—final AWARD ethiopia’s damages claims 635 of reasonable judgement at the time of Eritrea’s delict in May 1998 . The test of foresee- ability should extend to a broader range of outcomes than might need to be consid- ered in a less momentous situation . Howeer, if all results are foreseeable, the test is meaningless . Significant weight was placed by the Commission on the seriousness of a decision to resort to large-scale use of force . Such a decision places a heay obligation on the acting State’s leaders to analyze and weigh carefully the potential consequences of their intended action . In this regard, a State choosing to resort to force in violation of the jus ad bellum bears responsibility for the foreseeable results both that it desires, and those it does not . Liability for certain types of damages is not subject to time limitation, notably injuries caused by landmines and documented costs of care for internally displaced persons . The Commission weighed seeral factors in assessing the amount of compensa- tion that should follow from a breach of jus ad bellum. The Commission considered whether damages should sere the exceptional purpose of deterring future violations of Article 2, paragraph 4 of the Charter of the United Nations, or if it should sere the more conentional purpose of proiding appropriate compensation . The Commission found the latter to be its responsibility . As to deterrence, the Commission expressed doubts that possible awards of monetary compensation would be likely to deter a State contemplating action in breach of the jus ad bellum. Other deterrents are found the rights of indiidual and collectie self-defense, and in the risk of criminal punishment of goernment official deciding upon the unlawful resort to force . The prospect of potential monetary liabilities seems to be of little comparatie weight . The Commission further considered whether an award of compensation should reflect a precise quantification of damage caused, not otherwise compensable under jus in bello, or a more general assessment of the character of the injury inflicted upon the State of Ethiopia . The answer was dictated by the nature of the claims and of the underlying eidence . A measure of proportion must be maintained between the character of the delict and the compensation due . The Commission considered