CYIL vol. 14 (2023)

NIKOLA KURKOVÁ KLÍMOVÁ CYIL 14 (2023) failed to give any form of security by the fixed deadline, the arbitrators equally upheld the legality of a seizure order adopted by a Mongolian court in response. 52 The investors further attempted to challenge the scope of the court’s order, arguing that the blocked amounts in the accounts of their companies and book value of their assets largely exceeded the balance outstanding under the initial tax assessment. 53 The tribunal disagreed with them, pointing to the second and third statement of the State tax inspectors that substantially increased the due amount and warranted a more far-reaching seizure of the claimants’ property. 54 4. Justifications for unilateral sanctions While State measures restricting property rights of investors clearly may entail a breach of some of the substantive standards of investment protection enshrined in IIAs, respondents are generally able to invoke numerous defences in support of their actions. This holds true particularly in disputes dealing with unilateral sanctions adopted in response to serious human rights violations or other grave breaches of public international law, such as unlawful use of force. 4.1 Force majeure Traditionally, host States justified their interferences with foreign investments based on rules of customary international law, invoking various circumstances precluding wrongfulness. From a historical perspective, the defence of force majeure was often raised against damages claims brought by investors who had suffered losses due to internal riots or wars. 55 As a matter of general policy, countries declared armed conflicts or civil strives to avoid any reparations of injuries to aliens and their States of origin. 56 While it was largely accepted that events giving rise to force majeure covered not only natural disasters but also human interventions, 57 the International Law Commission (“ILC”) refused to provide a blank check to States in escaping their international legal obligations in times of heightened international tensions and narrowed the scope of the defence to unforeseen or irresistible events beyond the State’s control that made it materially impossible to fulfil its international commitments. 58 The interpretation of the last element of the definition provoked intense debates in international jurisprudence. As it was later confirmed though, the defence of force majeure set the threshold

52 Ibid., paras. 661–663. 53 Ibid., para. 664. 54 Ibid., paras. 666–667.

55 ZRILIČ, J. (2019). The Protection of Foreign Investment in Times of Armed Conflict (Oxford: Oxford University Press), p. 153; PADDEU, F. (2012). Genealogy of Force Majeure in International Law. British Yearbook of International Law , Vol. 82, No. 1, 381, p. 444. 56 ZRILIČ, J. (2019). Armed Conflict as Force Majeure in International Investment Law. Manchester Journal of International Economic Law , Vol. 16, No. 1, 28, p. 29; BJORKLUND, A. (2008). Emergency Exceptions: State of Necessity and Force Majeure. In: MUCHLINSKI, P. et al. (eds.), The Oxford Handbook of International Investment Law (Oxford: Oxford University Press), pp. 499–500. 57 ILC, Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries. Report on the work at the 53rd session, Yearbook of the International Law Commission , 2001, Vol. II, Part Two (“ILC Articles”), p. 76. 58 ILC Articles (n 57), Art. 23(1).

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