CYIL vol. 8 (2017)

PETR STEJSKAL CYIL 8 ȍ2017Ȏ situated in occupied territory, the host state can be held responsible for failure to protect the foreign investment against the harm caused by the invading army of the occupying state and for the breach of obligation to refrain from damaging the investment by its own organs (if it uses military force against objects situated in the occupied territory to expel the occupying forces). Concerning the Ukraine as an example of the host state, it is bound by the norms arising from the law of armed conflict (both anchored in the 1907 Geneva Conventions and 1907 Hague Regulations 48 or from customary international law) and is a party to more than 70 bilateral investment treaties or treaties with investment provisions. According to the law of armed conflict, the principle of distinction and obligation to protect civilian objects against attack and pillage apply again towards the occupied state as a party to armed conflict. Besides, if an investment treaty containing full protection and security clause applies (if there is an investment treaty concluded with a state whose national put into operation a foreign investment in the host state), the host state has to protect the investment and refrain from acts of its own organs which would damage it. Nevertheless, the responsibility of the host state can be evaded for the same reasons given in the previous scenario – for compliance with the standard of due diligence, existence of a security exception clause or application of general circumstances precluding wrongfulness when we move to the secondary rules of international law. Even if there is an extended war clause present in an investment treaty, this one can also fail to lead to compensation as they usually contain a reference to the necessity of the situation. As a matter of fact, these factors are even more actual and fitting in the situation of belligerent occupation. One of the conditions for the territory for being under belligerent occupation de iure is that the occupying power has the ability to exercise authority over it which at the same time leads to inability of the occupied state to exert its authority in this part of the territory. 49 Forcible occupation can therefore typically represent an unforeseen event which is beyond the control of the occupied state and making it materially impossible in the circumstances to perform the obligation to follow full protection and the security clause in the sense of the force majeure . 50 During the occupation, it is also more likely that the occupying power will use the infrastructure situated in the occupied territory for military purposes. If being used for military purposes (for example, requisition of private property such as means of transport for persons or things by land, sea or air in the sense of Article 53 par. 2 of the 1907 Hague Regulations), those objects can be a legal target of the military operation of the host state (if other conditions required by the law of armed conflict are met, among others the principle of proportionality and military necessity). 51 Concerning the case of occupied Crimea, examples may include companies producing vessels and hovercrafts or parachute productions (albeit from the perspective of the law of foreign investment, the ownership structure, particularly the nationality of investor, is a factor determining whether it is a foreign investment protected by investment treaty). 52 48 Concerning the 1907 Hague Regulations, since May 2015. 49 FLECK, D., The Handbook of International Humanitarian Law . 3rd Edition, Oxford University Press, 2013, pp. 268-269. 50 DARS, Art. 23. 51 Additional Protocol I, Art. 52, par. 2. 52 Three years of the annexation of Crimea: the lost Ukrainian military-industrial complex and how to restore [online]. world.24-my.info, March 4, 2017 [accessed on May 29, 2017]. Available at < http://world.24-my.info/three-years- of-the-annexation-of-crimea-the-lost-ukrainian-military-industrial-complex-and-how-to-restore/>.

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