Most Interesting 2020: Vanhonnaeker, Shareholders' Claims for Reflective Loss in International Investment Law

The eleventh in our series "Most Interesting 2020":

Lukas Vanhonnaeker, Shareholders' Claims for Reflective Loss in International Investment Law (Cambridge Univ. Press 2020)

The book by Lukas Vanhonnaeker puts a spotlight on a different type of “atypical” investor: shareholders. In particular, the book makes a strong case for allowing shareholders' claims for reflective loss under international investment law. It analyses the policy implications of protecting shareholders within the investment treaty regime and conducts a detailed review of the landmark cases and instruments that tackle the issue. It explains the legal and policy reasons why investment law recognizes and protects against reflective loss, and the means by which it does so. Some States, such as South Africa, have advocated restricting the availability of the investment treaty regime only for claims by the directly injured companies, which would precluding shareholders from raising claims. Indeed, many of these objections behind this position – including creating a disincentive to settle and the perils of parallel proceedings – are addressed by the author. The importance of the book stems from Vanhonnaeker’s meticulous attention to detail in laying out these objections, but also making concrete proposals as to if, and how, they can be overcome. Despite several recent tribunals that have addressed the matter, this book is among the first to comprehensively treat claims for reflective loss. Indeed, it is a must-read item for scholars and practitioners that are involving in researching or litigation such claims.

Dilini Pathirana
Faculty of Law
University of Colombo