European Yearbook of International
Economic Law
Series Editors
Marc Bungenberg, Saarbrücken, Germany
Markus Krajewski, Erlangen, Germany
Christian J. Tams, Glasgow, United Kingdom
Jörg Philipp Terhechte, Lüneburg, Germany
Andreas R. Ziegler, Lausanne, Switzerland
Assistant Editor
Judith Crämer, Lüneburg, Germany
Advisory Editors
Armin von Bogdandy, Heidelberg, Germany
Thomas Cottier, Bern, Switzerland
Stefan Griller, Salzburg, Austria
Armin Hatje, Hamburg, Germany
Christoph Herrmann, Passau, Germany
Meinhard Hilf, Hamburg, Germany
John H. Jackson†
William E. Kovacic, Washington, USA
Gabrielle Marceau, Geneva, Switzerland
Ernst-Ulrich Petersmann, Florence, Italy
Hélène Ruiz Fabri, Luxembourg, Luxembourg
Bruno Simma, München, Germany
Rudolf Streinz, München, Germany
More information about this subseries at http://www.springer.com/series/8848
Katia Fach Gómez • Anastasios Gourgourinis •
Catharine Titi
Editors
International Investment
Law and the Law of Armed
Conflict
Editors
Katia Fach Gómez Anastasios Gourgourinis
Law School Athens Public International Law Center
University of Zaragoza National and Kapodistrian University
Zaragoza, Spain of Athens
Athens, Greece
Catharine Titi
French National Centre for Scientific
Research (CNRS)-CERSA
University Paris II Panthéon-Assas
Paris, France
ISSN 2364-8392 ISSN 2364-8406 (electronic)
European Yearbook of International Economic Law
ISSN 2510-6880 ISSN 2510-6899 (electronic)
Special Issue
ISBN 978-3-030-10745-1 ISBN 978-3-030-10746-8 (eBook)
https://doi.org/10.1007/978-3-030-10746-8
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Editorial
Recent events in Syria, Yemen, Libya and the Crimea have brought to the surface
various systemic concerns regarding international investment protection and arbi-
tration in times of conflict. This special issue explores the wide-ranging linkages
between international investment law and the law of armed conflict. It contains a
selection of peer-reviewed chapters previously presented at the Colloquium on
“International Investment Law & the Law of Armed Conflict” that took place at the
National and Kapodistrian University of Athens in October 2017.
The book opens with Christoph Schreuer’s chapter, entitled “War and Peace in
International Investment Law”. The chapter corresponds to the Colloquium’s open-
ing keynote lecture, and it sets the stage for the debate in this area of interaction
between international investment law, international humanitarian law and human
rights law. The author argues that while the law of treaties provides some rules rel-
evant to situations of armed conflict, it does not generally allow a State to depart
from obligations it has undertaken under investment treaties. The author also dis-
cusses full protection and security, compensation for losses and the law of State
responsibility.
In the next chapter, Ursula Kriebaum considers the “Social Benefits and Costs of
Investment Treaties”. She asks the question of whether it is beneficial to depoliticize
disputes by rendering them amenable to arbitral dispute settlement. To answer this
question, she discusses the “goals” of investment arbitration, the “means” provided
for in investment treaties and arbitration rules in order to achieve these goals and the
“achievements” of international investment law in supplying “judicial” means of
dispute settlement between investors and States, thereby averting State–State
conflicts.
Ana Maria Daza-Clark and Daniel Behn discuss, in the chapter entitled “Between
War and Peace: Intermittent Armed Conflict and Investment Arbitration”, the impli-
cations of not clearly defined armed conflicts or cycles of war and peace for invest-
ment treaty protections. The authors address this topic in the context of Libya,
taking into account standards of investment protection in Libyan international
investment agreements and likely defences.
v
vi Editorial
“Investments Under Occupation: The Application of Investment Treaties to
Occupied Territory” is the topic addressed by Tobias Ackermann in his chapter. The
author focuses on various underexplored legal issues that may arise in the arbitra-
tions against Russia concerning measures taken on the Crimean Peninsula. Among
them, the author reflects on the concept of territory in relation to the occupation and
annexation of Crimea and on the determination of the investment treaties applicable
to occupied territories.
In his chapter on “An Overview of State Succession Issues Arising as a Result of
an Armed Conflict”, Patrick Dumberry discusses the fate of investment protections
under bilateral investment treaties (BITs), when a situation of armed conflict leads
to State succession. He explores State practice and argues that continuation depends
on agreement of both the successor State and the “other State Party” to the BIT. He
examines further the fate of investment protections when the States concerned have
not agreed on continuation of the BIT and explains that the latter do not ipso facto
continue to exist unless both States have expressly or tacitly agreed on such
continuation.
In “Kosovo and Foreign Investment Protection”, Antonis Bredimas takes the
reader through a legal-historical journey in a territory that has a specific legal sta-
tus under international law as well as particularities in its administration. The
author considers the protection that foreign investments received before the decla-
ration of independence of Kosovo and the protection granted to investments origi-
nating in States that have not recognized Kosovo as after its declaration of
independence.
In the chapter entitled “Procedural Aspects of the Obligation of Non-Recognition
Before International Investment Tribunals”, Sebastian Wuschka reflects on the pos-
sible evolution of various investment claims filed in the Permanent Court of
Arbitration against the Russian Federation with regard to its annexation of Crimea.
In connection with these cases, the author discusses the possible relevance for
investment arbitration of the international law principle of non-recognition of illegal
acquisition of territory.
Belen Olmos Giupponi explores the “Links Between Nationality Changes and
Investment Claims Arising Out of Armed Conflicts: The Case of Russian
Passportization in Crimea”. The chapter addresses the interactions between armed
conflicts and the nationality of investors and ultimately the capacity of foreign
investors to file investment claims in situations of armed conflict. Notably, the
author examines the Russian “passportization policy” in Crimea and its implica-
tions, in light of recent cases and State practice.
In “Litigating the Use of Force: Reflections on the Interaction Between Investor-
State Dispute Settlement and Other Forms of International Dispute Settlement in
the Context of the Conflict in Ukraine”, Laura Rees-Evans studies the investor-State
arbitration cases that Ukrainian companies have commenced against Russia as a
consequence of Russia’s actions in Crimea. The author highlights some key legal
issues at play and discusses the potential interactions among them.
Editorial vii
In the next chapter, Michail Risvas reflects on “Non-discrimination and the
Protection of Foreign Investments in the Context of an Armed Conflict”. The chap-
ter focuses on the interpretation of compensation for losses clauses by investment
tribunals and discusses whether such provisions can contribute to averting armed
conflicts or impact post-conflict reconstruction attempts.
In his chapter on “The Full Protection and Security Standard in Investment Law:
A Specific Obligation?”, Sébastien Manciaux points out the differences between
two key standards contained in investment agreements: full protection and security
and fair and equitable treatment. The author argues that the full protection and secu-
rity clause is to be read in light of clauses for compensation for losses due to war or
other conflicts. He concludes that the specific nature, purpose and scope of applica-
tion of the different rules contained in international investment agreements should
be carefully considered and respected.
The ensuing chapter on “Armed Conflicts and Customary International Law on
Investment: Codification and Fragmentation of ‘Protection and Security’”, authored
by Kong Soon Lim, discusses the displacement of customary international law in
the protection of foreign investment in light of armed conflicts. The author argues
that, despite the fragmentation of protection and security standards in treaties, cus-
tomary international law remains effective, and he calls for the parallel application
of treaty and customary rules.
In the chapter entitled “Protection of Foreign Investments Against the Effects of
Hostilities: A Framework for Assessing Compliance with Full Protection and
Security”, Ira Ryk-Lakhman addresses alleged violations of the full protection and
security standard against the backdrop of armed conflict and humanitarian law. The
author argues that in order to look for answers, it is essential to study the relation-
ship between international investment law and the law of armed conflict, given that
it is only the rule that prevails in a norm conflict that may be breached and engage a
State’s international responsibility.
Suzanne Spears and Maria Fogdestam Agius co-author a chapter on “Protection
of Investments in War-Torn States: A Practitioner’s Perspective on War Clauses in
Bilateral Investment Treaties”. The authors explore so-called war clauses in bilat-
eral investment treaties concluded by Libya, Syria and Yemen and in light of their
interpretation in arbitral case law. They argue that these clauses should not be per-
ceived as replacing other investment protection standards in times of war or civil
unrest but as introducing distinct standards and contend that they are likely to take
a more important role in investment arbitration, in light of the unfortunate recur-
rence of armed conflicts in States parties to investment treaties.
Caroline Henckels’ chapter on “Investment Treaty Security Exceptions,
Necessity and Self-Defence in the Context of Armed Conflict” canvasses exceptions
for essential security interests and their relationship with the state of necessity and
self-defence, including in circumstances of armed conflict. The author argues that
essential security exceptions should be perceived as either narrowing the scope of
the investment treaty’s obligations or as “treaty-internal affirmative defences”.
Successful invocation of the security exception renders the conduct of the host State
lawful; therefore, it entails no duty of compensation. Relatedly, the author contends
viii Editorial
that successful invocation of the state of necessity under the International Law
Commission’s Articles on State Responsibility does not give rise to an obligation to
compensate the foreign investor.
In the following chapter, on “Supervening Impossibility of Performance and the
Effect of Armed Conflict on Investment Treaties: Any Room for Manoeuvre?”,
Gabriele Gagliani examines whether it is possible to successfully invoke superven-
ing impossibility of performance in relation to international investment agreements
in situations of armed conflict. The author argues that while supervening impossibil-
ity of performance may indeed be applicable, it can prove to be less effective than
other defences, such as necessity.
Jose Gustavo Prieto Muñoz explores “Awarding of Damages in Times of Armed
Conflict: An Emerging Standard of ‘Economic Capacity’ for the Host State”. The
author considers the calculation of damages in times of armed conflict and argues
that the standard needs to be different from the one applicable in times of peace. He
discusses the legal standard of the “economic capacity” of the host State, as it
emerges from decisions made by the Eritrea-Ethiopia Claims Commission.
Teerawat Wongkaew’s chapter, entitled “The Cross-Fertilisation of International
Investment Law and International Humanitarian Law: Prospects and Pitfalls”, starts
from the notion of “judicial borrowing” and reflects on a possible cross-fertilization
between international investment law and international humanitarian law. The chap-
ter makes a case for the use by arbitrators of concepts originating in international
humanitarian law when deciding investment treaty disputes that involve situations
of armed conflicts.
The next chapter on “International Investment Arbitration and Non-binding
Standards Applicable in Conflict: Parallel or Merging Worlds?”, authored by Merryl
Lawry-White, studies the incidence in investment treaty arbitration of non-binding
standards, notably corporate social responsibility. The author focuses on those
standards that may become relevant in a situation of conflict and points that the
governance concerns underlying them are increasingly present in the public dis-
course and in the reasoning of investment treaty tribunals.
Eleni Micha pens the chapter entitled “Responsible Investment in Occupied
Territories: Beyond the UN & OECD Principles”. She examines the UN Principles
of Responsible Investment and the OECD Guidelines for Multinational Enterprises,
focusing on their application when investment activities take place in occupied or
otherwise disputed territories. As a case study, the author delves into the difficulties
posed by various international investment activities taking place in the disputed ter-
ritory of Western Sahara.
In the chapter entitled “Corporations and Crimes Against Humanity: Financial
Liability Through ISDS?”, Kevin Crow starts with the 2016 award in Urbaser v
Argentina and reflects on the conditions under which a corporation can be held
financially liable for human rights violations under international investment law.
Crow argues that the Urbaser award invites the application of international criminal
law liability doctrines as “boundary crossing” tools that arbitrators can use to deter-
mine the contours of corporate subjectivity to international law.
Editorial ix
Lukas Vanhonnaeker addresses the topic “Recourse to Private Military and
Security Companies by Foreign Investors in Conflict-Affected Countries: Dangers,
Opportunities and the Need to Regulate”. Reality shows that more and more inves-
tors willing to invest abroad are hiring private military and security companies,
especially if the investment is going to take place in conflict-affected countries or in
host States with weak rule of law. In principle, this can prove to be a win-win situa-
tion in terms of increasing flows of foreign direct investment and reducing
investment-related risks. Nevertheless, the chapter reflects on some of the potential
dangers linked to the intervention of these companies, such as lack of regulation of
their activities and eventual interferences with human rights law.
Alain Pellet concludes the book with a chapter on “The Paradox of the Prohibition
of the Use of Force in Contemporary International Law: Some Elementary
Remarks”. The chapter corresponds to the author’s concluding keynote lecture dur-
ing the Colloquium. It discusses the shift in international relations from a regulation
by the lawful recourse to armed force to the prohibition of the use of force. To lower
the threshold for lawful recourse to the use of armed force is to increase the possibil-
ity of abuse, but to reject such use of force also deprives the international commu-
nity of an effective means to prevent or put an end to humanitarian disasters. The
chapter canvasses the possibilities for resolving this dilemma, in light of positive
law’s prohibition of the use of force.
The editors would like to thank Eleftherios Dafermos for his invaluable editorial
assistance with all aspects of this volume.
We hope that you enjoy reading it!
Zaragoza, Spain Katia Fach Gómez
Athens, Greece Anastasios Gourgourinis
Paris, France Catharine Titi
Peer Reviewers
• Julian Arato
• Krystle Baptista Serna
• Veronika Bílková
• Jonathan Bonnitcha
• Tomer Broude
• Kathleen Claussen
• Eric de Brabandere
• Armand de Mestral
• Berenika Drazewska
• Natividad Fernández Sola
• Dieter Fleck
• Filippo Fontanelli
• Tarcisio Gazzini
• Chiara Giorgietti
• Patrycja Grzebyk
• Ezequiel Heffes
• Moshe Hirsch
• Dan Joyner
• Hannes Lenk
• Matthias Lippold
• Esther López Barrero
• Karsten Nowrot
• Martins Paparinskis
• Francisco Pascual Vives
• Rodrigo Polanco
• Ioannis Prezas
• Yannick Radi
• David Restrepo Amariles
• Natalino Ronzitti
• Emily Sipiorski
• Muthucumaraswamy Sornarajah
xi
xii Peer Reviewers
• Tom Sparks
• Vito Todeschini
• Leon Trakman
• Sten Verhoeven
• Pedro Villareal
• Christopher Waters
• Todd Weiler
• Friedl Weiss
• Jason Yackee
• Zeray Yihdego
Contents
War and Peace in International Investment Law ���������������������������������������� 1
Christoph Schreuer
Evaluating Social Benefits and Costs of Investment Treaties:
Depoliticization of Investment Disputes�������������������������������������������������������� 23
Ursula Kriebaum
Between War and Peace: Intermittent Armed Conflict
and Investment Arbitration���������������������������������������������������������������������������� 43
Ana Maria Daza-Clark and Daniel Behn
Investments Under Occupation: The Application of Investment
Treaties to Occupied Territory������������������������������������������������������������������������ 67
Tobias Ackermann
An Overview of State Succession Issues Arising as a Result
of an Armed Conflict �������������������������������������������������������������������������������������� 93
Patrick Dumberry
Kosovo and Foreign Investment Protection�������������������������������������������������� 113
Antonis Bredimas
Procedural Aspects of the Obligation of Non-Recognition Before
International Investment Tribunals���������������������������������������������������������������� 129
Sebastian Wuschka
Exploring the Links Between Nationality Changes and Investment
Claims Arising Out of Armed Conflicts: The Case of Russian
Passportization in Crimea������������������������������������������������������������������������������ 153
Belen Olmos Giupponi
Litigating the Use of Force: Reflections on the Interaction Between
Investor-State Dispute Settlement and Other Forms of International
Dispute Settlement in the Context of the Conflict in Ukraine �������������������� 173
Laura Rees-Evans
xiii
xiv Contents
Non-discrimination and the Protection of Foreign Investments
in the Context of an Armed Conflict�������������������������������������������������������������� 199
Michail Risvas
The Full Protection and Security Standard in Investment Law:
A Specific Obligation? ������������������������������������������������������������������������������������ 217
Sébastien Manciaux
Armed Conflicts and Customary International Law on Investment:
Codification and Fragmentation of “Protection and Security”������������������ 229
Kong Soon Lim
Protection of Foreign Investments Against the Effects of Hostilities:
A Framework for Assessing Compliance with Full Protection
and Security������������������������������������������������������������������������������������������������������ 259
Ira Ryk-Lakhman
Protection of Investments in War-Torn States: A Practitioner’s
Perspective on War Clauses in Bilateral Investment Treaties���������������������� 283
Suzanne Spears and Maria Fogdestam Agius
Investment Treaty Security Exceptions, Necessity and Self-Defence
in the Context of Armed Conflict ������������������������������������������������������������������ 319
Caroline Henckels
Supervening Impossibility of Performance and the Effect of Armed
Conflict on Investment Treaties: Any Room for Manoeuvre? �������������������� 341
Gabriele Gagliani
Awarding Damages in Times of Armed Conflict: An Emerging
Standard of “Economic Capacity” for the Host State���������������������������������� 363
Jose Gustavo Prieto Muñoz
The Cross-Fertilisation of International Investment Law
and International Humanitarian Law: Prospects and Pitfalls�������������������� 385
Teerawat Wongkaew
International Investment Arbitration and Non-binding Standards
Applicable in Conflict: Parallel or Merging Worlds?���������������������������������� 411
Merryl Lawry-White
Responsible Investment in Occupied Territories: Beyond
the UN & OECD Principles���������������������������������������������������������������������������� 439
Eleni Micha
Corporations and Crimes Against Humanity: Financial Liability
Through ISDS?������������������������������������������������������������������������������������������������ 459
Kevin Crow
Contents xv
The Recourse to Private Military and Security Companies
by Foreign Investors in Conflict-Affected Countries: Dangers,
Opportunities and the Need to Regulate�������������������������������������������������������� 487
Lukas Vanhonnaeker
The Paradox of the Prohibition of the Use of Force in Contemporary
International Law—Some Elementary Remarks ���������������������������������������� 517
Alain Pellet
About the Editors
Katia Fach Gómez is tenured Professor (Profesora titular) of Private International
Law at the University of Zaragoza (Spain). She was Adjunct Professor at Fordham
University (New York), Visiting Scholar at Columbia Law School (New York),
Predoctoral and Postdoctoral Grantee at the Max-Planck Institut (Germany) and
Senior Humboldt Scholar in various German research institutions. Katia has also
lectured at numerous European and Latin American Universities. She graduated
with summa cum laude from the University of Zaragoza, holds a European PhD
summa cum laude, and an LLM summa cum laude (prize Edward J. Hawk) from
Fordham University. Katia is the author of numerous books, book chapters and arti-
cles on private international law, international economic law, international arbitra-
tion, and comparative law. Katia has been involved in diverse international litigation
and arbitration cases in the USA and Europe, and she has chaired various commer-
cial arbitration panels.
Anastasios Gourgourinis is Lecturer in Public International Law at the School of
Law of the National and Kapodistrian University of Athens, specializing in
International Economic Law. He is also a Research Fellow at the Academy of
Athens. He holds an LL.B. and an LL.M from the National and Kapodistrian
University of Athens, as well as an LL.M. (awarded with Distinction) and a Ph.D.
from University College London. He has taught at University College London, the
Athens University of Economics and Business, the University of Piraeus and
Panteion University of Athens. Anastasios has served in the past as Special Legal
Advisor at Greece’s Ministry for Development and Competitiveness, and the
Ministry of State, advising on issues pertaining to investment, trade and state aid.
Currently, he practises with the Athens Bar in Greece.
Catharine Titi is a Research Associate Professor (tenured) at the French National
Centre for Scientific Research (CNRS)–CERSA, University Paris II Panthéon-
Assas, France. She is Co-Chair of the ESIL Interest Group on International
Economic Law, Member of the Steering Committee of the Academic Forum on
ISDS, Member of the International Law Association (ILA) Committee on Rule of
xvii
xviii About the Editors
Law and International Investment Law and she serves on the Editorial Board of the
Yearbook on International Investment Law & Policy (Columbia/OUP). She co-
directs the research project The impact of international investment agreements on
FDI flows funded by the French Ministry of Justice (2017–2019). Catharine holds a
PhD from the University of Siegen in Germany (Summa cum laude) and has previ-
ously been a consultant at the United Nations Conference on Trade and Development
(UNCTAD). In 2016, Catharine became the first woman to be awarded the presti-
gious Smit-Lowenfeld Prize of the International Arbitration Club of New York for
the best article published in the field of international arbitration.
