CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ WAR: FOREIGN INVESTMENTS IN DANGER … direct military advantage) 33 also play a role when assessing the legality of destruction of property during a military operation. Besides these principles, pillage of property is explicitly prohibited. 34 The prohibition of destruction or seizure of the property of an adversary, unless required by military necessity, and the prohibition of pillage are also established as norms of customary international law. 35 Finally, Art. 147 of the Geneva Convention IV sets upon states an obligation to prosecute individuals for commitment of extensive destruction and appropriation of property if not justified by military necessity and carried out unlawfully and wantonly. All these rules are relevant for both parties to the conflict and seem to apply regardless of the nationality of the investor concerned. In other words, both states have to follow those obligations towards property belonging to investors with any nationality. 3.1.3 The law of foreign investments – obligations of the host state From the point of view of international investment law, the applicability of standards of protection is narrower. Concerning the host state’s conduct, it has obligations only towards foreign investments of nationals of the other party to the particular investment treaty and only to the extent defined in the treaty. In other words, a foreign investor having the nationality of state C will be protected by the law of foreign investments only if there is an investment treaty concluded between state B and state C. This protection will depend on the content of that treaty (whether it contains only a general most-favoured nation treatment clause or even full protection and security clause and war clause, and whether it contains security clauses which might weaken an investor’s protection). If there is a foreign investment of an investor with the nationality of state C damaged in the territory of state B (host state) by the military operation of state A, and a host state is a party to the investment protection treaty containing full protection and a security clause concluded with state C, the host state might be in breach of its duty to protect the investment from harm caused by third parties. If the foreign investment is affected by the actions of the host state itself, it can be in a breach of the duty to refrain itself from damaging the investments via its own state organs, including military forces. 36 But concerning the host state obligation to protect, the standard of protection provided by full protection and the security clause is not an absolute one. It does not impose strict liability on the host state as it is an obligation of due diligence which exists to the extent of the reasonable use of the host state’s capabilities. 37 Moreover, concerning both the host state’s failure to prevent the foreign investment from being harmed by third parties and also the damage conducted actively by the organs of the host state during military operation or represented by unlawful seizure or expropriation, this state can justify its conduct by the application of the security exception clause if contained in the investment treaty. Moreover, the level of secondary rules of international law can be relevant too. Firstly, the host state can claim an objective impossibility to protect the investment against the hostile army, which would constitute a circumstance precluding wrongfulness - force majeure . Such a claim would be relevant, subject to other conditions, if the acts of the hostile army could 33 Additional Protocol I, Art. 51 par. 5 letter b), Art. 57 par. 2 letter a) (iii). 34 Art. 33, par. 2 of the Convention (IV) relative to the Protection of Civilian Persons in Time of War, Geneva, August 12, 1949, hereinafter ‘Geneva Convention IV’. 35 Customary International Humanitarian Law, Volume I: Rules , pp. 176, 183. 36 E.g. International Centre for Settlement of Investment Disputes, Biwater Gauff (Tanzania) Ltd. v. United

Republic of Tanzania , Award, July 24, 2008, par. 730. 37 The Protection of Investments in Armed Conflicts , p. 9.

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