Chapter 4 The Effect of Armed Hostilities on Investment Treaty Obligations: A Case of Force Majeure?
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Abstract
Armed hostilities in both inter-state as well as intra-state conflicts are often considered as prototypical examples of a force majeure situation. Nevertheless, there is little recent judicial practice addressing the defence, both in general as well as with regard to armed hostilities. In this regard, investment tribunals have the potential to considerably contribute to the further development of general international law. While inter-state conflicts have become a rare occurrence, the recent decade has seen a number of intra-state conflicts with implications for foreign investors, in particular in the wake of the ‘Arab Spring’. When faced with an exceptional situation, such as the occurrence of armed hostilities on their territory, host states might seek relief by invoking force majeure. This chapter examines to what extent that is possible. It explores under which circumstances armed hostilities might meet the constituent elements of force majeure under general international law. In that regard, it also considers the interaction of the most pertinent treatment standards enshrined in investment treaties – namely full protection and security and so-called war clauses – with force majeure under the law of state responsibility. Moreover, it addresses potential procedural requirements and the legal consequences of a successful invocation.