CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ WAR: FOREIGN INVESTMENTS IN DANGER … obliged to obey standards of treatment anchored in the investment treaty to which the occupied state is a party. Nevertheless, it is important to highlight that even if the particular investment treaty of the host state happens to oblige the occupying power which is not originally party to that treaty, foreign investments in the occupied territory still might not be protected by that treaty due to the typical definition of ‘investment’ or ‘investor’ in most investment treaties specifically limiting their application to investments made within the territory of the respective contracting parties. 65 For example, a bilateral investment treaty concluded between Russia and Ukraine 66 in its Art. 2 states that the treaty applies to investors who are capable ‘to carry out investments on the territory of the other Contracting Party.’ The term investment is defined in Art. 1 as ‘all kinds of property and intellectual values, which are put in by the investor of one Contracting Party on the territory of the other Contracting Party.’ Ukrainian nationals, therefore, at first sight cannot demand Russia to provide them with standards contained in this Russian-Ukrainian bilateral investment treaty (and respectively nationals from any other state which have concluded an investment treaty with Ukraine). Therefore, the question is whether the sole Art. 43 of the 1907 Hague Regulations can cause a shift of obligations arising from investment treaties applicable to the occupied territory to the occupying power. However, the reality is that there are several claims lodged against Russia by Ukrainian companies where the breach of the Russian-Ukrainian bilateral investment treaty by Russia is claimed (mostly in relation to acts of confiscation). 67 In more than two of them, the Permanent Court of Arbitration even determined its jurisdiction to hear these claims. 68 Final decisions in these arbitrations will be very interesting as the tribunal will have to deal, among other issues, with the question of whether investments concerned were made or are placed within the respondent contracting party’s territory. 69 In addition, it is clear that the occupation or annexation does not change the status of the territory, even if the occupying power makes administrative arrangements in its legal order to integrate the occupied territory to its state territory, as the Russian federation did in the case of Crimea. 70 But with respect to investment arbitration, what if the foreign investor as applicant agrees with the official stance of Russia that the Crimea is part of its territory and on that basis invokes the application of the Russian bilateral investment treaty? Will the arbitral tribunal have the jurisdiction to deal with the legal status of the Crimea in that case? 65 Concerning the NAFTA as an example, Art. 1101 limits the scope of application of the chapter dealing with foreign investments to ‘investments of investors of another Party in the territory of the Party.’ 66 Agreement between the Government of the Russian Federation and the Cabinet of Ministers of the Ukraine on the Encouragement and Mutual Protection of Investments, Moscow, November 27, 1998. 67 In this respect, it is interesting that the Russian-Ukrainian investment treaty contains only ‘legal security’ in its Art. 2 and clause dealing with expropriation in its Art. 5 (besides national regime and most-favoured nation treatment). But it also contains a non-extended war clause in Art. 6). 68 Crimean Investors’ Claims Against Russia Will Proceed [online]. 69 Arbitration Claims by Ukrainian Investors under the Russia-Ukraine BIT: between Crimea and a Hard Place? [online]. cisarbitration.com, February 17, 2016 [accessed on May 29, 2017]. Available at < http://www. cisarbitration.com/2016/02/17/arbitration-claims-by-ukrainian-investors-under-the-russia-ukraine-bit-between- crimea-and-a-hard-place/ >. 70 Putin signs laws on reunification of Republic of Crimea and Sevastopol with Russia [online]. tass.ru, March 18, 2014 [accessed on May 29, 2017]. Available at < http://tass.ru/en/russia/724785 >.

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