- Arbitral Award
- Eritrea Ethiopia Claims Commission
- The State of Eritrea v. The Federal Democratic Republic of Ethiopia
ERITREA ETHIOPIA CLAIMS COMMISSION - DAMAGES CLAIMS - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET APPLICABLE INTERNATIONAL LAW
DETERMINATION OF COMPENSATION FOR UNCERTAIN LOSSES - ASSESSMENT AT DISCRETION OF ADJUDICATING BODY - REFERENCE TO ARTICLE 7.4.3(3) UNIDROIT PRINCIPLES
The Eritrea Ethiopia Claims Commission, established in 2000 by an Agreement between the Governments of the two States "[...] to decide through binding arbitration all claims for loss, damage or injury by one Government against the other" related to the 1998-2000 conflict and that resulted from violations of international law, in determining the appropriate compensation for each of the established violations, admitted that in most cases it could only make "the best estimate possible on the basis of the available evidence". In support of this approach, the Commission pointed out that awarding damages for uncertain losses on the basis of mere estimation, or even guesswork, was generally admitted at both domestic and international level, and, with respect to the latter, expressly referred to Article 7.4.3(3) of the UNIDROIT Principles.
ERITREA ETHIOPIA CLAIMS COMMISSION
Eritrea’s Damages Claims
The State of Eritrea
The Federal Democratic Republic of Ethiopia
The Hague, August 17, 2009
By the Claims Commission, composed of:
Hans van Houtte, President
George H. Aldrich
John R. Crook
James C.N. Paul
FINAL AWARD – ERITREA’S DAMAGES CLAIMS
5. As described in its earlier Partial Awards, this Commission was created by Article 5 of the Agreement between the Government of the Federal Democratic Republic of Ethiopia and the Government of the State of Eritrea of December 12, 2000 (“the Agreement” or
“December 2000 Agreement”). The Agreement was a wide-ranging document concluded by the Parties to bring about a comprehensive settlement of the May 1998-June 2000 war between them. Under Article 5(1), “[t]he mandate of the Commission is to decide through binding arbitration all claims for loss, damage or injury by one Government against the
other” related to the 1998-2000 conflict that “result from violations of international humanitarian law, including the 1949 Geneva Conventions, or other violations of international law.”
IV. APPLICABLE LEGAL PRINCIPLES
28. Under Article 5(13) of the Agreement, the Commission must “apply relevant rules of international law” and “shall not have the power to make decisions ex aequo et bono.” The following sections consider three elements of general international law affecting these
proceedings: (a) the preclusive effect of the Commission’s earlier decisions on liability (res judicata); (b) the role of evidence and the burden of proof; and (c) the requirement of a legally sufficient connection between wrongful conduct and injury for which damage is
33. The Commission dismissed claims, by both Parties, for failure of proof. These dismissals are conclusive dispositions of these claims for the purpose of these proceedings,but their effect is otherwise limited. Both Parties sometimes have urged that these dismissals
reflected an affirmative decision by the Commission that certain events did not occur. This is not correct. Except as indicated in its Awards, the Commission did not make such factual judgments, finding instead only that the claimant Party had not presented sufficient evidence to prove its claim. These findings do not reflect affirmative factual determinations by the Commission that particular events did or did not occur.
B. EVIDENCE AND THE BURDEN OF PROOF AT THE DAMAGES PHASE
34. Evidence necessarily has played a central role in these proceedings. Key issues often have boiled down to proof of facts, not issues of law. It is fundamental to the legal process that judgments regarding facts must be based upon sufficient evidence. This posed special challenges in these proceedings. Both the Parties and the Commission recognize that conclusive proof of facts in a war that began eleven years ago often is not feasible. However, the difficulties of proof do not relieve the Commission of its obligation to make decisions only on the basis of sufficient evidence.
35. At the liability phase, the Commission required clear and convincing proof of liability. It did so because the Parties’ claims frequently involved allegations of serious – indeed, sometimes grave – misconduct by a State. A finding of such misconduct is a
significant matter with serious implications for the interests and reputation of the affected State. Accordingly, any such finding must rest upon substantial and convincing evidence. This is why the International Court of Justice and other international tribunals require that facts be established with a high degree of certainty in such circumstances.
36. In the hearings on the Group Number One damages claims, Eritrea urged that the Commission continue to utilize a standard of “clear and convincing” evidence. Ethiopia argued that decisions relating to damages should instead be based on the preponderance of the evidence. Like some other courts and tribunals, the Commission believes that the correct position lies in an amalgam of these positions.19 The Commission has required clear and convincing evidence to establish that damage occurred, within the liability parameters of the
Partial Awards. However, for purposes of quantification, it has required less rigorous proof. The considerations dictating the “clear and convincing standard” are much less compelling for the less politically and emotively charged matters involved in assessing the monetary extent of injury. Moreover, the Commission recognizes the enormous practical problems faced by both Parties in quantifying the extent of damage following the 1998-2000 war. Requiring proof of quantification of damage by clear and convincing evidence would often – perhaps almost always – preclude any recovery. This would frustrate the Commission’s agreed mandate to address “the socio-economic impact of the crisis on the civilian population” under Article 5(1) of the Agreement.
37. The present task is not to assess whether the two State Parties committed serious violations of international law. That has been done. Now, the Commission must determine,insofar as possible, the appropriate compensation for each such violation. This involves
questions of a different order, requiring exercises of judgment and approximation. As discussed below in connection with particular claims, the evidence regarding such matters as the egregiousness or seriousness of the unlawful action, the numbers of persons injured or
property destroyed or damaged by that action, and the financial consequences of such injury,destruction or damage, is often uncertain or ambiguous. In such circumstances, the Commission has made the best estimates possible on the basis of the available evidence. Like
some national courts21 and international legislators,22 it has recognized that when obligated to determine appropriate compensation, it must do so even if the process involves estimation, or even guesswork, within the range of possibilities indicated by the evidence. Nevertheless, in some cases the evidence has not been sufficient to justify any award of compensation.
38. The Commission also has taken account of a trade-off fundamental to recent international efforts to address injuries affecting large numbers of victims. Institutions such as the United Nations Compensation Commission (“UNCC”) and various commissions
created to address bank, insurance and slave labor claims stemming from the Nazi era have adopted less rigorous standards of proof, either to show that an individual suffered injury or regarding the extent of that injury. As a trade-off, compensation levels also have been reduced, balancing the uncertainties flowing from the lower standard of proof. While the claims addressed in this Award are State claims, not mass claims, the Commission has in some instances applied similar analysis with respect to claims for injuries or damages that
were suffered by large, but uncertain, numbers of victims and where there is limited supporting evidence.
21 See Chaplin v. Hicks  2 K.B. 786, 972 C.A. (where precision or accuracy is not possible in assessing contract damages, “the jury must do the best they can, and it may be that the amount of their verdict will really be a matter of guesswork. But the fact that damages cannot be assessed with certainty does not relieve the
wrongdoer of the necessity of paying damages for his breach….”).
22 See UNIDROIT Principles of International Commercial Contracts, available at www.unidroit.org, art. 7.4.3,para. (3) (“Where the amount of damages cannot be established with a sufficient degree of certainty, the assessment is at the discretion of the court.”).}}