* Claims commission awards both sides substantial damages * Says awards are far less than the sides wanted * Ethiopia unhappy with ruling, Eritrea says will respect AMSTERDAM, Aug 19 (Reuters) - An international commission has awarded Ethiopia $174 million and Eritrea $161.4 million in damages over their 1998-2000 border war. The ruling, released after eight years of hearings, means Eritrea has to pay Ethiopia $12.6 million. Ethiopia disagreed with the amount, Eritrea said it would respect the ruling. The largest part of the award to Eritrea was $46 million for loss of property for people expelled from their land by Ethiopia. Similarly, Ethiopia was awarded $45 million for "human suffering and lost income" for displaced persons. The Eritrea-Ethiopia Claims Commission, affiliated with the Permanent Court of Arbitration in The Hague, said it took into account the poverty in the two countries when making the awards. "While the compensation awarded to each party is substantial, the commission recognised that it is probably much less than each party believes it is due," the panel said in a statement on Monday night announcing a ruling had been made. The decision was posted late on Tuesday. The commission was formed following a December 2000 agreement between the two countries. It has held a series of hearings and issued occasional partial decisions over the years. The two nations have been embroiled in the border dispute since Eritrea won independence from Ethiopia in the early 1990s after a 30-year war. Ethiopia said the balance of compensation that Eritrea owed it was too small for its neighbour's actions. "This is a very small amount given the gravity of the crime of aggression committed by Eritrea," Ethiopia's Foreign Ministry said in a statement late on Tuesday. It said the government in Addis Ababa would study the details of the final award further and assess how to ensure that Asmara paid what it owed. Eritrea said it would respect the ruling. "The government of Eritrea accepts the award of the claims commission without any equivocation due to its final and binding nature under the Algiers Agreement," it said in a statement on Eritrea's official government website. "This is indeed consistent with Eritrea's track record of respecting arbitration decisions that emanate from its treaty obligations," the statement added. (Reporting by Ben Berkowitz in Amsterdam and Daniel Wallis in Nairobi; Editing by Alison Williams)
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