In recent years, investor-state tribunals have often permitted shareholders' claims for reflective loss despite the well-established principle of no reflective loss applied consistently in domestic regimes and in other fields of international law. Investment tribunals have justified their decisions by relying on definitions of 'investment' in investment agreements that often include 'shares', while the no-reflective-loss principle is generally justified on the basis of policy considerations pertaining to the preservation of the efficiency of the adjudicatory process and to the protection of other stakeholders, such as creditors. Although these policy considerations militating for the prohibition of shareholders' claims for reflective loss also apply in investor-state arbitration, they are curable in that context and must be balanced with policy considerations specific to the field of international investment law that weigh in favor of such claims: the protection of foreign investors in order to promote trade and investment liberalization.

'This book explains why international investment law, unlike domestic law and other areas of international law, protects shareholders against reflective loss. Vanhonnaeker not only meticulously describes this practice, which is based on treaty law as well as on tribunal practice. He also explains the policies behind this development and offers detailed solutions to the problems engendered by it. Altogether an impressive scholarly achievement.'

Christoph Shreuer - Of Counsel, zeiler.partners Vienna

'Lukas Vanhonnaeker's new monograph provides an invaluable contribution to the literature on international investment law. In a comprehensive and in-depth analysis, he carefully evaluates the legal and policy bases for allowing shareholders’ claims for reflective loss, situating the analysis in the existing body of domestic and international law on this topic.​ This is a 'must read' for anyone interested in shareholders' claims in international investment law.'

Andrew Newcombe - University of Victoria

'In recent years, investor-state tribunals have often permitted shareholders’ claims for reflective loss despite the well-established principle of no reflective loss applied consistently in domestic regimes and in other fields of international law. Investment tribunals have justified their decisions by relying on definitions of ‘investment’ in investment agreements that often include ‘shares’, while the no-reflective-loss principle is generally justified on the basis of policy considerations pertaining to the preservation of the efficiency of the adjudicatory process and to the protection of other stakeholders, such as creditors. Although these policy considerations militating for the prohibition of shareholders’ claims for reflective loss also apply in investor-state arbitration, they are curable in that context and must be balanced with policy considerations specific to the field of international investment law that weigh in favor of such claims: the protection of foreign investors in order to promote trade and investment liberalization.'

Lukas Vanhonnaeker - Post-Doctoral Fellow, Faculty of Law, McGill University, Montréal