The dissertation is devoted to the evolution of international law cooperation of states in the framework of valuation standards formation that are used by states and international judicial bodies for determining awards in the process of economic rights protection. Detailed theoretical analysis of the international law cooperation of states on valuation of property for damage compensation made it possible to summarize the results in the theory and practice of international law. The research is focused on determination the amount of damages by international courts (arbitral tribunals) carried out under expropriation claims in the framework based on international investment or human rights treaty and interpretations of the international law valuation standards prescribed in treaty provisions. In cases of gaps, where no treaty remedy is available, customary international law and diplomatic protection still play an essential role in protecting property rights of foreigners and own citizens. As stated in the Factory at Chorzów Case, valuation standards under customary international law are based on principle that reparation is carried out by payment of a sum «corresponding to the value which a restitution in kind would bear». International arbitration practice confirms that most sources of international law require a compensation equivalent to the fair market value of the investment expropriated (damaged property). International judicial bodies, considering claims for expropriation, act within the framework of investment or other international treaties and interpret the relevant treaty provisions, applying them to the matter in question. It is mentioned, that legal gaps of customary international law on the valuation matter can be filled with treaty provisions that are specifically relevant to compensation for taking property and settling of valuation standards. Valuation object for the calculation of compensation in international law should include all economic consequences, caused by internationally wrongful acts of states, excluding economic damage that was covered by restitution or was lawful in the framework of international treaties. This is the basis for proposed definition of «property» for valuation purposes as an object of the international law regime with economic value, the rights to which are protected under international law. The study considers standards for determining the amount of compensation for expropriations in international law and explains the issues of the valuation date selection in connection with lawful and unlawful takings of property. It is noted that all valuations must be set on a particular date in order to emplace property and market
condition at a certain time. It has been shown that international judicial bodies employ a variety of methodologies to determine value of property and corroborate the reliability of their valuation results. It is stressed that awarding losses suffered is more straightforward and less controversial than awarding lost profits. The dissertation addresses fundamental legal aspects of valuation of lost profits. The study found out that there are three internationally defined valuation approaches: the comparison approach, the income approach and the cost approach. The comparison approach is the most widely-used and accepted in international arbitration practice. The dissertation concentrates on legal gaps regarding the application aspects of damages calculation in international arbitration. It discusses a framework where international valuation standards of international non-governmental organizations are given legal weight and serve as guidelines for the calculation of awards. Special attention is paid to Directive of European Union with provisions that valuation standards of states should take into account internationally recognised
valuation standards, in particular those developed by the International Valuation Standards Committee, the European Group of Valuers’ Associations or the Royal Institution of Chartered Surveyors. Member states of European Union admitted valuation standards of international non-governmental organizations as reliable standards for the credit purposes after the financial crisis, which has shown that irresponsible behaviour by market participants can undermine the foundations of the financial system leading to potentially severe social and economic consequences. Considerations have been given to cooperation aspects between Ukraine and World Bank in the field of implementation of international valuation standards to national law with propositions that ensure requirements of international valuation standards and international property protection standards for taxation matters.
Key words: economic rights protection, compensation, measure of compensation, fair market value, value of investment, valuation date, valuation
standards, unlawful expropriation, lawful expropriation
