Punitive Damages are not compensation for injury and is levied to punish reprehensible conduct of defendant and to deter its future occurrence. Common law is the base of this approach. According to the U.K. House of Lords, there are some restrictions in levying this kind of damage. These restrictions have been fully respected by the courts of all the Commonwealth States except Australia and the United States. Even in the United States this approach has been recently extended to cases in which a foreign State is a defendant. This practice poses the question of the legality of Punitive Damages in International Law. A study of international responsibility rules and relevant case law shows that although there are some similarities between Punitive Damages and Satisfaction in international rules of State responsibility, it is not principally permitted to pass a judgment on punitive damages against a State. Therefore, the recent practice of the United States courts in convicting foreign States including Islamic Republic of Iran is a violation of international law and entails in international responsibility of that State.
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