When Should International Arbitrators Award Punitive Damages?

Abstract

In international arbitration, the issue of punitive damages raises many legal and public policy questions. This chapter focuses primarily on two fundamental but general questions. First, do international arbitrators have the power to award punitive damages? Second, if they do, are there situations in which arbitrators should refrain from exercising this power? The chapter aims to answer these questions and, in particular, to determine when international arbitrators should award punitive damages. Before answering these questions it clarifies the notion and purpose of punitive damages. In civil law countries, punitive damages in private actions are generally not available. In general, in common law countries, punitive damages may be awarded in a variety of tort actions where the conduct of the defendant was exceptionally objectionable.Keywords:civil law countries; common law countries; international arbitrators; private actions; public policy; punitive damages