CYIL vol. 8 (2017)

PETR STEJSKAL CYIL 8 ȍ2017Ȏ insurrection movement becomes successful. With regard to the scenarios where a foreign state intervenes in a non-international armed conflict, distinguishing the intervening state as a new element, we may ask which obligations the intervening state has to undertake towards foreign investments and whether existence of that element may have further significance for the obligations of the territorial state towards foreign investments on its territory. With regard to all of the outlined scenarios, the fact is that, especially during an armed conflict, as a consequence of its extraordinary character, a situation of necessity can come into consideration very likely while having substantial reflection in several different legal aspects. Firstly, on the level of primary norms, some rules of humanitarian law contain the lack of military necessity as a component of the prohibition. 106 Secondly, as the due diligence standard of full protection and security clauses does not entail strict liability, the obligation of the host state to protect foreign investment can be found as preserved even when the result was the destruction of the investment. Finally, security clauses are often present in investment treaties and such clauses can also very likely prevent the state’s conduct from being qualified as a breach of its obligations. However, many investment treaties contain war clauses providing foreign investors at least with a certain level of treatment when it comes to compensation for damage suffered from armed conflict or internal disorder. Such a clause may be invoked exactly in those situations where the host state did not fail to exercise due diligence to protect the investment. But if it is not the case of an extended war clause, typical war clauses normally do not establish absolute right to compensation, rather they provide foreign investors with the right to be treated in the same way as another investor (national or foreign) in matters of compensation – therefore, there have to be other individuals provided with compensation (a comparator for the application of treatment). 107 If the investor is lucky enough that there is an extended war clause providing absolute standard for compensation, the opposite side of the coin is the fact that those extended war clauses usually address only the damage conducted by the host state itself and, what is more, contain a reference to the requirement of necessity. We can see a similar component (compensation for act not prohibited) in humanitarian law, but only in a very limited extent, in art. 53 of the 1907 Hague Regulations regarding the seizure of munitions de guerre . Eventually, even if there is a breach of obligation arising from humanitarian law or the law of foreign investments (for example, because military necessity is not a part of applicable primary norm or the threshold of due diligence was not obeyed), institutes of secondary norms can be triggered, especially force majeure or state of necessity. Thus, the question deserving deeper analysis is the content and differences of the ‘necessity’ required in those institutes. This question is not dealing with substantive standards of foreign investment such as the content of full protection and security clauses, but because elements mentioned in this issue can lead to the impairment of an investor’s protection, it is no less important for the foreign investor to know the actual impact of the provisions depriving him of protection in extraordinary situations such as armed conflict. One hypothesis might be that what is necessary for the maintenance of public order or the protection of security interests in the sense of security clauses or that which is the content of military necessity mentioned in extended war clauses can be determined by reference

106 Geneva Convention IV, Art. 53; 1907 Hague Regulations, Art. 23 g). 107 The Law of Investment Treaties , pp. 367 and 370.

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