Chapter 2 The Genealogy of Extended War Clauses: Requisition and Destruction of Property in Armed Conflicts

In: Investments in Conflict Zones
Ira Ryk-Lakhman
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Many investment instruments, including those of conflict-ridden states, contain explicit stipulations that prescribe a right to compensation under circumstances of ‘war’ and ‘armed conflict’. These provisions are known as ‘war clauses’. One type of these ‘war clauses’ merely requires non-discrimination in the treatment of losses incurred as a result of the armed conflict and similar situations. The other type of provisions goes further and mandates the payment of compensation to investors for losses resulting from hostilities provided that certain conditions are met (the extended war clause). This chapter focuses on the latter type and looks into the treaty obligation to compensate investors for the requisition or destruction of their property during hostilities. The chapter traces the origins and meaning of the extended war clause to customary war law. It is suggested that the treaty language ‘requisition by the armed forces’ and ‘destruction not required by the necessity of war’ (and like formulations) are terms of art with a recognized meaning under international law. Thus, under the rules of the vclt, the meaning of the provision is ascertained by way of examining the content of the customary rules on the treatment of alien property. As for the customary rules on the treatment of alien property, it is argued that these were shaped by, and molded after, customary war law norms as codified in the instruments of the Hague Law of 1907. In turn, the chapter shows that the rules of the Hague Law infiltrated the law on state responsibility for losses to alien property in the framework of claims for injuries to, or wrongful seizures of, private foreign property by revolutionists during civil unrest and by armed forces during the World Wars. This progressive development resulted in the emergence of a set of specific customary rules on state responsibility for damage to private foreign property in war. Today, these rules are reflected in the language of the extended war clause. Overall, it is suggested that tracing the origins of the war clause to customary war law brings further clarity to practical, contested aspects of the provision, namely its scope, burden of proof and threshold of its invocation, and interaction with treaty provisions on expropriation.

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Investments in Conflict Zones

The Role of International Investment Law in Armed Conflicts, Disputed Territories, and ‘Frozen’ Conflicts



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