Restitution, Compensation and Satisfaction

Meaning of Reparation

When a State commits an internationally wrongful act, it incurs international responsibility. One of the principal consequences of that responsibility is the obligation to provide full reparation for the injury caused.

Under Article 31 of the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA), the responsible State is required to make full reparation for the injury caused by its internationally wrongful act.

ARSIWA identifies three principal forms of reparation:

• Restitution — Article 35
• Compensation — Article 36
• Satisfaction — Article 37

These forms are not necessarily alternatives. They may be used individually or together, depending upon what is required to achieve full reparation.

Principle of Full Reparation

The central principle is:

Internationally wrongful act

↓

Injury

↓

State responsibility

↓

Full reparation

↓

Restitution + Compensation + Satisfaction, as appropriate

The purpose of reparation is to repair the injury caused by the wrongful act, rather than to punish the responsible State.

Factory at Chorzów

The foundational authority is Factory at Chorzów (Germany v Poland).

The Permanent Court of International Justice established the principle that reparation should, as far as possible, wipe out the consequences of the illegal act and restore the situation that would probably have existed if the wrongful act had not occurred.

This principle underlies the modern distinction between restitution, compensation and satisfaction.

Exam point:

Factory at Chorzów → Full reparation

Restitution

Meaning

Restitution is the restoration of the situation that existed before the wrongful act was committed.

It attempts to place the injured State in the position it would have occupied if the internationally wrongful act had not occurred.

Article 35 ARSIWA

Article 35 provides for restitution, requiring the responsible State to re-establish the situation that existed before the wrongful act, provided that:

• restitution is not materially impossible; and
• restitution does not involve a burden wholly disproportionate to the benefit derived from restitution instead of compensation.

Example

State A unlawfully takes possession of property belonging to State B.

If the property still exists and can legally and practically be returned, returning it to State B constitutes restitution.

Restitution as Restoration

Restitution may involve:

• returning unlawfully seized property;
• restoring territory where legally and practically possible;
• releasing unlawfully detained persons;
• restoring a legal position;
• reversing an unlawful administrative or governmental measure.

The exact form depends upon the nature of the wrongful act.

When Restitution Is Not Possible

Restitution is not absolute.

It may not be required where:

Material impossibility

or

Wholly disproportionate burden

makes restitution inappropriate under Article 35.

Example

If a State unlawfully destroys a unique object and the object can no longer be physically restored, restitution is materially impossible.

Compensation may then become necessary.

Compensation

Meaning

Compensation is monetary reparation for damage caused by an internationally wrongful act.

It becomes particularly important where restitution:

• is impossible;
• is insufficient; or
• does not fully repair the injury.

Article 36 ARSIWA

Article 36 provides that the responsible State must compensate for damage caused by the internationally wrongful act insofar as such damage is not made good by restitution.

The damage must be financially assessable.

Example

State A unlawfully destroys infrastructure belonging to State B.

If the infrastructure cannot be restored, State A may be required to provide monetary compensation for the legally established financial loss.

What Can Compensation Cover?

Depending upon the circumstances and applicable rules, compensation may cover financially assessable damage such as:

• destruction of property;
• loss of assets;
• financial losses;
• economic damage;
• other established financial consequences caused by the wrongful act.

Compensation is therefore particularly important where the injury can be expressed in monetary terms.

Compensation Is Not Punishment

Compensation should not automatically be understood as a fine or penalty.

Its purpose is to repair financially assessable injury caused by the wrongful act.

Thus:

Compensation → Reparation

not necessarily:

Compensation → Punishment

Satisfaction

Meaning

Satisfaction is a form of reparation particularly relevant to moral or non-material injury.

It is governed by Article 37 ARSIWA.

Where restitution and compensation cannot adequately address the injury, satisfaction may provide an appropriate remedy.

Forms of Satisfaction

Depending upon the circumstances, satisfaction may include:

• acknowledgement of the breach;
• expression of regret;
• formal apology;
• another appropriate form of satisfaction.

Example

A State commits a serious violation of another State’s sovereign rights that causes significant non-material injury.

A formal acknowledgement of the wrongful conduct or expression of regret may constitute satisfaction.

Limits on Satisfaction

Satisfaction is not unlimited.

Under Article 37, satisfaction must not be:

• out of proportion to the injury, or
• humiliating to the responsible State.

This prevents satisfaction from being transformed into a punitive or degrading measure.

Comparison of the Three Forms

Restitution	Compensation	Satisfaction
Article 35	Article 36	Article 37
Restores the previous situation	Provides monetary reparation	Addresses moral/non-material injury
Primarily restorative	Primarily financial	Primarily symbolic/remedial
Preferred where possible	Used where restitution is insufficient/impossible	Used where other forms do not adequately repair injury
Example: return of property	Example: payment for destroyed property	Example: formal apology
Subject to material impossibility and disproportionate burden	Covers financially assessable damage	Cannot be disproportionate or humiliating

Restitution vs Compensation

The main distinction is:

Restitution → “Give back/restore what was lost.”

Compensation → “Pay for the loss that cannot otherwise be repaired.”

Example

If State A unlawfully takes State B’s vessel:

• Return the vessel → Restitution
• Pay for damage that cannot be repaired through return → Compensation

Compensation vs Satisfaction

Compensation primarily addresses financially assessable injury.

Satisfaction is primarily concerned with moral or non-material injury.

However, the categories should not be treated as completely rigid. Monetary compensation may, in appropriate circumstances, be relevant to non-material injury where such injury is legally established and compensation is necessary for full reparation.

Restitution vs Satisfaction

Restitution seeks to restore the previous factual or legal position.

Satisfaction addresses injury that cannot adequately be repaired through restoration or monetary compensation.

For example:

Restoring unlawfully seized property → Restitution

Formal acknowledgement of an unlawful violation → Satisfaction

Can All Three Be Granted Together?

Yes.

The forms of reparation can operate cumulatively where necessary to achieve full reparation.

Example

Suppose State A unlawfully destroys a cultural site belonging to State B and the conduct also causes serious non-material injury.

The appropriate reparation could involve:

Restitution → restoration where possible

Compensation → financial losses that remain unrepaired

Satisfaction → appropriate acknowledgement or apology for moral injury

The ultimate objective remains:

Full reparation

Relationship with Article 31

Articles 35–37 should always be read together with Article 31.

Article 31 → establishes the general obligation of full reparation

Article 35 → explains restitution

Article 36 → explains compensation

Article 37 → explains satisfaction

Therefore, Articles 35–37 are specific forms through which the broader Article 31 obligation may be fulfilled.

Material and Moral Injury

Article 31 expressly recognises that injury includes material and moral injury.

Material Injury

Material injury involves physical or financial harm.

Examples:

• destruction of property;
• loss of infrastructure;
• economic loss.

Potential remedies include:

Restitution + Compensation

Moral Injury

Moral injury involves non-material harm.

Examples may include injury to:

• dignity;
• reputation;
• sovereign rights;
• other protected non-material interests.

Potential remedy:

Satisfaction, and where appropriate other forms of reparation.

Reparation and Cessation

Reparation must be distinguished from cessation under Article 30.

Cessation

Stops an ongoing wrongful act.

Reparation

Repairs injury already caused by the wrongful act.

Example

If State A is unlawfully occupying State B’s territory:

Cessation → End the unlawful occupation

Restitution → Restore the lawful territorial situation

Compensation → Repair established financial losses

Satisfaction → Address appropriate moral injury

These consequences can therefore operate together.

Reparation and Non-Repetition

Under Article 30, a responsible State may also have to provide appropriate assurances and guarantees of non-repetition.

This is different from the three principal forms of reparation.

Cessation → Stop the violation

Non-repetition → Prevent recurrence

Restitution/Compensation/Satisfaction → Repair the injury

Reparation and Countermeasures

Countermeasures should also be distinguished from reparation.

Reparation is an obligation of the responsible State to remedy the injury.

Countermeasures are temporary measures that may be taken by an entitled State to induce compliance with the responsible State’s obligations, subject to strict legal requirements.

Therefore:

Reparation = remedy owed by responsible State

Countermeasure = possible response to induce compliance

Reparation and Serious Breaches of Jus Cogens

Where the wrongful act involves a serious breach of an obligation arising under a peremptory norm of general international law, Articles 40 and 41 ARSIWA impose additional consequences.

States must:

• cooperate to bring the serious breach to an end through lawful means;
• not recognise as lawful a situation created by the serious breach;
• not render aid or assistance in maintaining that situation.

Therefore, ordinary reparation must be considered alongside the special regime applicable to serious jus cogens breaches.

Important Cases

Factory at Chorzów

Principle: Full reparation.

The responsible State should, as far as possible, eliminate the consequences of the wrongful act.

Best case for:
Restitution, compensation and the general principle of full reparation.

United States Diplomatic and Consular Staff in Tehran

The ICJ dealt with violations of international obligations concerning diplomatic and consular personnel and premises.

Best use:
State responsibility and the obligation to remedy consequences of internationally wrongful conduct.

Armed Activities on the Territory of the Congo

The ICJ considered State responsibility and reparation arising from internationally wrongful conduct.

Best use:
Modern application of principles concerning responsibility and reparation.

Easy Examination Flowchart

Internationally wrongful act

↓

Injury caused

↓

Article 31 → Full reparation

↓

Can the previous situation be restored?

Yes → Restitution (Article 35)

No / insufficient → Compensation (Article 36)

↓

Is there moral or non-material injury requiring additional remedy?

↓

Satisfaction (Article 37)

↓

Full reparation

One-Line Definitions

Restitution: Restoration of the situation existing before the wrongful act.

Compensation: Monetary reparation for financially assessable damage not made good by restitution.

Satisfaction: Appropriate remedy for moral or non-material injury where restitution or compensation is inadequate.

Quick Revision

Provision	Topic	Remember
Article 31	Full reparation	Repair the injury
Article 35	Restitution	Restore
Article 36	Compensation	Pay
Article 37	Satisfaction	Acknowledge/Remedy moral injury
Article 30	Cessation	Stop continuing breach
Articles 40–41	Serious jus cogens breaches	Special consequences
Leading case	Factory at Chorzów	Full reparation

Key Exam Points

• Article 31 ARSIWA establishes the principle of full reparation.
• The three principal forms are:
  • Restitution — Article 35
  • Compensation — Article 36
  • Satisfaction — Article 37
• Restitution restores the situation existing before the wrongful act.
• Restitution may be excluded if it is materially impossible or involves a wholly disproportionate burden.
• Compensation covers financially assessable damage not made good by restitution.
• Satisfaction addresses appropriate moral or non-material injury.
• Satisfaction must not be disproportionate or humiliating.
• The three forms may be combined where necessary.
• Reparation is primarily remedial, not punitive.
• Cessation and non-repetition are separate consequences of State responsibility.
• Factory at Chorzów is the leading authority on full reparation.

Conclusion

Restitution, compensation and satisfaction are the three principal forms through which the obligation of full reparation under Article 31 ARSIWA is implemented.

Restitution seeks to restore the situation that existed before the wrongful act. Where restoration is impossible or insufficient, compensation may repair financially assessable damage. Satisfaction addresses appropriate moral or non-material injury that cannot adequately be remedied through restitution or compensation.

The three forms are not necessarily mutually exclusive. The responsible State may be required to provide more than one form of reparation when that is necessary to achieve the fundamental objective of full reparation.

For examinations, remember:

Article 31 → Full Reparation

Article 35 → Restitution → Restore

Article 36 → Compensation → Pay

Article 37 → Satisfaction → Acknowledge/Remedy

Factory at Chorzów → Leading authority