Crystallex International

The market value of kry's lost profits as of a certain day in the past can include the estimated price of gold in the future. It is not limited to the price of gold at the time of the expropriation or the day of filing for arbitration. That is the nature of damages for future lost profits. Of course, the price of gold in the future may not be certain but expert testimony can opine its value in future years or at least render the opinion that gold in the future years will not go below 1600 or whatever.

If you recall, John Goanda is our party arbitrator before the ICSID and that he has written an excellent article specifically on the subject of lost profits in international disputes. If anyone is concerned about what damages our tribunal might award, his article is a must read. http://www.cisg.law.pace.edu/cisg/biblio/gotanda2.html

This is how he summarizes his view of the law of lost profits in international disputes in situations similar to ours:

Accordingly, instead of a rule prohibiting lost profits whenever the claimant is a new business, tribunals should construe the requirement that damages must be proved with reasonable certainty to place upon the claimant the burden of proving that it was reasonably certain that profits would have been made had the respondent fulfilled its obligations under the contract. If the claimant is able to do so, then it should be entitled to some amount of lost profits if there is a rational basis for the claimant's calculation of lost profits, even if the claimant is a new business. That is, once a claimant is able to show with reasonable certainty the fact of loss of profits, the claimant then needs only to provide a basis upon which a tribunal can reasonably estimate the extent of the claimant's loss of profits. A claimant might be able to do so through, for example, the use of expert testimony, economic and financial data, market surveys and analyses, and business records of similar enterprises.

In other words, he states there is a two-fold approach, which in our case would mean this: 1) Is it reasonably certain that if a governemnet expropriates a property that contains 20 mil. oz of gold reserves, the party holding claim to the property will be damaged?

2) Has the damaged party presented a reasonable estimate of the extent of the loss of profits by expert testimony, economic data, etc. Thus, this second aspect of lost profits does not require the damaged aparty to prove that the amount of damages is reasonably certain, only that it has presented a reasonable estimate of the loss. Hence, it is only the first prong of damages that requires proof by a reasonable certainty.

It is noteworthy that Mr. Gotanda's view is widely accepted. Moreover, it is likely that at least one of the other two arbitrators will accept his view, not only becaus it is logical and widely acceped, but also because Mr. Gotanda has a special expertse on the subject of lost profits in international disputes. This expertise, which is summarized in his biography, is impressive:

Dean Gotanda’s scholarly interests focus on damages in international law and international commercial arbitration. He is the author of Supplemental Damages in Private International Law, which was published by Kluwer Law International, as well as numerous articles that have been published in the American Journal of International Law, the Columbia Journal of Transnational Law, the Georgetown Journal of International Law, the Harvard International Law Journal, the Michigan Journal of International Law, the Oxford University Comparative Law Forum, and the Vanderbilt Journal of Transnational Law. His scholarly writings have been cited by courts, tribunals and commentators, including most recently by U.S. Supreme Court, U.S. Courts of Appeals for the Second, Seventh, Ninth and Eleventh Circuits, U.S. District Courts in Illinois, Louisiana and the District of Columbia, the Supreme Courts of Iowa and Texas, the California Courts of Appeal, and arbitral panels deciding transnational contract disputes and investment tribunals deciding cases under the rules of the International Centre for Settlement of Investment Disputes (ICSID).

Dean Gotanda has spoken widely on the subject of damages in international law. He has lectured on damages at the prestigious Hague Academy of International Law, which was published in Recueil des Cours. He also taught at the University of Mainz and the Geneva Master in International Dispute Settlement (University of Geneva and Graduate Institute of International and Development Studies), and given numerous presentations on damages, including at Gray’s Inn in London (at the invitation of the British Institute of International and Comparative Law), the International Chamber of Commerce in Paris, Tokyo University, 4th Annual Arab Conference for Commercial and Maritime Law at the Bibliotheca Alexandrina, Egypt, and Pontifical Catholic University of Rio de Janeiro, Brazil.

Dean Gotanda has served as an expert on damages for parties involved in international disputes, including high-stakes investment treaty arbitrations between multinational companies and governments, as well as disputes involving the United Nations Convention on Contracts for the International Sale of Goods. He is a member of the Advisory Council of the United Nations Conventions on Contracts for the International Sale of Goods. He also is a member of the Academic Council of The Institute for Transnational Arbitration, an Associate Editor of Transnational Dispute Management, and an Associate Member of the ICC Institute of World Business Law.

He is, parenthetically, also Dean of Villanova University's Law School.