CYIL vol. 8 (2017)

PETR STEJSKAL CYIL 8 ȍ2017Ȏ Consequently, concerning the conduct of the occupying state, the territorial limitation of obligations enshrined in investment treaties therefore seems to be the main obstacle for foreign investors when demanding standards of protection anchored both in the investment treaties to which the occupying state is a party or those to which the occupied state is a party. But the findings of arbitral tribunals dealing with claims lodged by Ukrainian investors against the Russian Federation may show us a different legal outcome. 3.3 Non-international armed conflict Another situation dramatically influencing the fate of foreign investments is non- international armed conflict. If there are hostilities between the armed forces of government and armed forces of an insurgent movement taking place in the state, in a certain level of intensity and accompanied by a certain level of organisation of armed forces involved, the situation exceeds the framework of mere internal disturbances and tensions (such as riots or isolated acts of violence) and the norms of the law of armed conflict are triggered. 71 We could see examples of those clashes with impact on foreign investments in several countries recently. For example in Libya, namely oil companies 72 are exposed to the risk of losses as a consequence of fighting. 73 Oil companies from many states, including for example Germany and Russia (which have bilateral investment treaties concluded with Libya in force), 74 possess exploration licenses in Libya. 75 Foreign investments situated in the territory under the control of insurgents can be harmed in several ways. Firstly, they can be destroyed by governmental forces during counter- insurgency operations. Secondly, they can be destroyed or seized by rebels. Finally, also an investment situated in the territory under control of the government can be theoretically harmed both from the side of the host state (by its destruction during operation against insurgents or by its confiscation for the needs of war) or by insurgents (by anti-governmental offense actions outside the territory they control). Concerning the law of armed conflict, parties to the non-international armed conflict are bound mainly by common Article 3 to the Geneva Conventions and by Additional Protocol II to the 1949 Geneva Conventions. 76 The scope of application of Additional Protocol II is much narrower as it requires that insurgents control a part of the territory. 77 Nevertheless, the rule of distinction between civilian and military objects applies also in non-international armed conflicts, despite the fact it is not included in Additional Protocol II. 78 Again, even 71 Typology of armed conflicts in international humanitarian law: legal concepts and actual situations , pp. 75 - 76. 72 But not only – for example Marriott Hotel in Tripoli or Turkey based Tav Construction which had to halt airport construction projects worth $3.2bn in Libya due to civil unrest in the country are examples of investors from multiple sectors. 73 FireatLibyanoilportdestroysupto1.8millionbarrelsofcrude[online].reuters.com,December30,2014[accessedon May 29, 2017]. Available at . 74 Bilateral investment treaty concluded between Germany and Libya from 2004 in its Art. 2 par. 2 and Art. 4 provides for full protection and security and for compensation in case of expropriation. 75 The 12 major oil & gas companies working in Libya [online]. arabianoilandgas.com, August 23, 2009 [accessed on May 29, 2017]. Available at . 76 Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of Non-International Armed Conflicts, June 8, 1977, hereinafter ‘Additional Protocol II.’ 77 Additional Protocol II, Art. 1. 78 It applies through broad interpretation of Art. 13 par. 1 or because of its inclusion in recent treaty law

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