This book deals mainly, but not only, with investments protected by particular rules of international law in situations of armed conflicts, including occupation. Disputes on maritime or territorial boundaries obviously do not only arise in or follow armed conflicts. It is true that they can equally have an impact on investment disputes, and this book deals with them. Armed conflicts nevertheless raise six particular interrelated questions, which fascinate more generally international lawyers. I will list them hereafter; the reader of this book will encounter them, sometimes explicitly, often implicitly, in nearly all contributions. I will, however, enter into a discussion in both theory and practice only on the first two questions.
1 General Debates in International Law to Which This Book Points
First, several contributions inevitably discuss how different branches of international law interrelate, ie what the editors call conflicts between norms. This refers to jus in bello (which comprises mainly but not only international humanitarian law (ihl)) and jus ad bellum on the one hand, and international investment protection law on the other.
Second, affected persons understandably try to enforce the rules of one branch of international law that lacks enforcement mechanisms for them to trigger through the mechanisms of other branches, which function and are relatively able to enforce their findings. Accordingly, ihl or jus ad bellum can benefit from adjudication in investment arbitration and regional human rights courts.
Third, in this book we also encounter tectonic clashes between two layers of international law. On the one hand, there is the (usually older) layer of international law, which covers interstate relations. This includes jus ad bellum and the old-fashioned rules that protect (but, in reality, allow freezing, if not, confiscation of) property in wartime for the mere reason that such property belongs to enemy ‘subjects’. On the other hand, the (newer) layer consists of the law of the international community of 7.7 billion human beings; putting them at the centre as addressees of rights and obligations, piercing the corporate veil of the state. In our case, the latter comprises certainly international human rights law (ihrl) and international criminal law (a branch that we should not totally forget in our context). ihl (or at least its branch applicable to international armed conflicts) and the law of neutrality are based upon interstate relations, which designate those who are protected, but also protect individuals. In the case of ihl, an increasing number of rules do not refer to nationality (or, for combatants and prisoners of war, to the power on which they depend). Whether ihl gives individuals rights remains controversial. It certainly gives them only in rare case remedies. International investment protection law too has an ambiguous position between the two layers. On the one hand, it protects individuals and gives them remedies against states. On the other hand, it protects those individuals based upon their nationality – a traditional issue of the first layer – and upon treaties between their home state, and the state on the territory of which they invest.
Fourth, while international law is still largely state-centred, non-state actors play an increasing role in international affairs. Even when international rules apply to non-state actors, often no international forum exists in which individual victims, injured states, third states, intergovernmental organizations, or ngos could invoke the responsibility of a non-state actor and obtain relief. Investment protected by international law may fall under the control of, or be affected by, armed non-state actors or de facto regimes. Contributions in this book show how investments can be protected in such situations; either through a state based upon its own or the de facto regime’s conduct, or through and by the non-state actor itself, eg through ‘legislation’ adopted by the de facto regime – a method equally used to implement ihl applicable in non-recognized de facto regimes.
Fifth and sixth, as the editors point out in their introduction, underlying the object of this book are largely philosophical debates on the tension between collective and individual interests; and, between allegedly higher values such as peace, equality, survival of war affected populations, and egoistic individual patrimonial interests. I may only add that those interests are in reality not always so individual and egoistic, because of pension funds and the number of livelihoods depending on investments.
2 How to Deal with Contradictions between International Investment Protection Law and ihl?
The first issue is widely discussed under the titles of fragmentation, lex specialis, or systemic integration. Such discussion is sometimes conducted at the theoretical level, but much more frequently concerning the relationship between ihl and ihrl; and between international trade law, on the one hand, and ihrl or international environmental law on the other. The relationship between other branches, such as between the Second Geneva Convention protecting the shipwrecked1 and international maritime safety conventions,2 is nearly totally ignored by scholars. These could be rare playgrounds for doctoral students unwilling to engage into sociological enquiries, but ready to approach unchartered waters of practical relevance, while demonstrating that they are able to discuss basic theoretical problems of international law. When it comes to international investment protection law, I have the impression that a lot has been written about its relation with international environmental law and ihrl. However, very little has been written about the relationship between international investment protection and ihl or jus ad bellum. This book fills a genuine gap.
To determine how investment protection law and other branches of international law applicable in conflict scenarios interact in a given case, one first has to make sure that each branch applies in its own terms. Next, one has to clarify whether they contradict each other (which presupposes that we define what constitutes a contradiction). Finally – and this is the issue which fascinates most scholars – one has to solve the contradiction if it exists – in extreme cases, to clarify which rule prevails.
First, one must clarify when two rules actually lead to different outcomes. The most restrictive understanding is that two rules only differ if one rule prescribes certain conduct that the other prohibits. If this were correct, I would expect no contradictions in our case. This is because ihl, jus ad bellum or the law of neutrality, never prescribe conduct that would violate obligations under investment protection law. An exception could be the prohibition of adverse distinction in ihl (and the principle of non-discrimination in ihrl). They could be at stake in cases involving a differential treatment of investment by nationals benefitting from an investment protection treaty, in comparison to other investments. However, this can be overcome by considering that the nationality of the investor can neither be a prohibited, nor a suspicious ground of distinction. Further, that in any event, the respect of an applicable international obligation outside of ihl can be a legitimate ground for differentiations.
A broader understanding of contradictions, which is preferable in my view, would also cover potential conflicts, where international investment protection law prohibits conduct that ihl does not prohibit or which ihl – according to many – even authorizes. This in turn raises the debate whether, and to what extent, ihl authorizes certain conduct; or, if it only prohibits or prescribes certain conduct, leaving other conduct unregulated – at best, giving a weak permission. Indeed, prohibitions in investment protection treaties may overrule such permissions.
When international investment protection law and other branches of international law lead to divergent results, the nature of the relationship between them is a controversial matter. Such controversy exists in terms of both the terminology used to describe the relationship, and the practical outcomes, namely, the rule that must be respected in such a situation. At the centre of these controversies, is the lex specialis principle, which is increasingly contested in scholarly writings, including in this book.
We may ignore here those who claim that the lex specialis principle applies only to contradictions between rules in the same treaty, or the same branch of international law. This is because, if that were correct, the principle would not help reconcile conflicting international investment protection law, and other branches. Some insist that the lex specialis principle is only an interpretative rule to avoid norm conflicts and, therefore, cannot solve them. However, a strict distinction between norm conflict avoidance and norm conflict resolution is artificial, especially in international law.
Some hold that the principle concerns the overall relationship between two branches of law, concluding that ihl always prevails in armed conflicts. For some of them that one could label as ‘absolute ihl supremacists’, who are frequent in military circles, any silence in ihl is deliberate and means that no rule of international law regulates the respective conduct or issue. None of the contributors of this book adopts such an approach, neither in favour of ihl, nor investment law. Others, who might be labelled ‘moderate ihl supremacists’, admit that issues ihl does not regulate remain governed by other branches in an armed conflict. However, they contend that ihl must prevail as lex specialis as soon as it regulates a given issue, at least if a suitable interpretation of the rules of both branches cannot avoid a genuine norm conflict. I would label the probably majoritarian view – following the terminology suggested by one of my former llm students – as ‘the common contact surface area’ approach. It seeks to determine the lex specialis in every case of application, according to logic and the overall systemic purposes of international law. In my view, the principle does not even determine, once and for all, the relationship between two rules. Rather, it determines which rule prevails over another in a particular situation. Each case must be analysed individually. Several factors determine which rule is ‘special’ in relation to a certain problem. Specialty, in the logical sense, implies that the norm that applies to a certain set of facts, must give way to the norm that applies to that same set of facts, as well as to an additional fact that is present in a given situation. A norm that is either more precise, or that has a narrower material or personal scope of application, constitutes the lex specialis. The norm addressing a problem explicitly prevails over the one that treats it implicitly. A norm that provides more details prevails over another’s generality; while one that is more restrictive, prevails over one that covers a problem fully, but in a less exacting manner.
Some of the principle’s critics argue that ihl and other branches of international law applicable in armed conflicts should apply cumulatively. They may indeed base their views upon the practice of international tribunals, and upon a textual reading of most UN Security Council resolutions, concerning the relationship between ihl and ihrl. This leads, however, to unrealistic results that even proponents of this approach do not suggest, and – more importantly – that clearly do not comport with state practice. Others seek to solve possible contradictions through systemic integration or interpretation that takes into account other applicable rules of international law, as required by article 31(3)(c) of the Vienna Convention on the Law of Treaties.3 Finally, some seek to abandon the pretence that the legal order provides only one solution (I would add: any solution). They prefer to solve the few real conflicts that exist through the political process. However, in my view, this is a surrender of the law as a distinct science. The essence of the rule of law (and at the same time its grand fiction) is that decision-makers apply norms, including when they contradict other norms, according to legal rules and not (their) policy preferences.
Academic writings discuss these fascinating questions widely. In practice, they have, however, only a limited impact on the actual investment protection in and after armed conflicts. Several contributions in this book show that ihl and investment protection lead nearly always to the same results. Where possible divergences exist, investment treaties contain particular war clauses, full protection and security standards, as well as vague and open terms, which may be interpreted in light of ihl and jus ad bellum. The concept of territory refers to jus ad bellum and other rules of public international law. Unlike ihl obligations, sometimes some investment treaty obligations may also be suspended during armed conflicts. Indeed, the violation of the latter obligations may be justified by circumstances precluding unlawfulness, such as force majeure, extensively and restrictively interpreted in contributions to this book.
The other way around, it seems to be more difficult to use investment protection treaties to interpret the many vague terms appearing in ihl, eg in the definition of military objectives, proportionality, precautionary measures, or on the admissibility of destructions, confiscations and requisitions in enemy hands. These rules refer to interests other than those protected by investment treaties. A major exception is article 38 of the Fourth Geneva Convention,4 which prescribes that the regulations concerning aliens in time of peace – which include investment protection – continue to regulate the treatment of enemy aliens on a belligerent’s own territory, by that belligerent in the power of which they are, in case of armed conflict. It may also be that the jurisprudence of investment dispute settlement mechanisms can be used to clarify the concept of property, which is not defined but largely protected in ihl, eg of military occupation. For the rest, the specificities of an armed conflict – rather than the fact that an investment protection treaty also covers certain property – will generally point, at least for enemy investment, to ihl as the lex specialis. This takes equally into account the consideration that protection by ihl is generally much more detailed than the vague clauses in investment protection law. Finally, for the protection of property in the power of a party, but not in the conduct of hostilities, the nationality of the investor will play a crucial role in determining the lex specialis. ihl and the old-fashioned and very permissive customary rules on the treatment of enemy property (the relationship between the two is rarely discussed) will play – to a large extent – the role of the lex specialis for enemy property. Investment protection treaties will fill in the more general provisions of the law of neutrality and play a greater role for neutral property.
3 May Investment Arbitrators Apply ihl?
A second general issue underlying debates in this book, transversal to many discussions in international law, is whether mechanisms of one branch should (be used to) adjudicate issues governed by another branch. This issue is particularly relevant in international law, because it lacks a regular ordinary court adjudicating the whole of international law. On the one hand, this raises questions of competence (both in the sense of jurisdiction and of knowledge). Such decisions may also undermine the credibility of a certain mechanism. No one expects that Russia would withdraw from Crimea because an investment arbitration holds on a preliminary question that it belongs to Ukraine. How do we prevent such lack of acceptance and enforcement from spilling over into acceptance that prisoners continue to be detained in violation of European Court of Human Rights decisions, and that investors are expropriated without compensation in violation of arbitral decisions on investment protection? On the other hand, no branch of international law can be seen in clinical isolation. In particular, when it takes binding decisions, a mechanism cannot simply decide that a state violated one treaty, which has instituted the mechanism. It must also be able to add that no other rule of international law could justify the conduct incompatible with that treaty. Otherwise, a state found in violation of the treaty the mechanism adjudicates could argue that it will not comply with the decision, because it is justified – if not obliged – to do so under another rule of international law.
Here too the theoretical debate can be avoided in most cases by a practical approach: the investment arbitration (or human rights) tribunal only decides whether its constituent treaty was violated. However, as mentioned above, it has inevitably to interpret the terms of that treaty such as ‘territory’, ‘investment’, ‘fair and equitable treatment’, ‘full protection and security’, ‘property’, or ‘necessity of the situation’ by taking other rules of international law into account. Nevertheless – and here I differ with the authors of two chapters – the concept of effective control under investment protection treaties, ihrl and ihl must be understood in light of the realities on the ground. This, therefore, cannot imply a violation of the duty of non-recognition.
The lack of understanding by the judges or arbitrators of a mechanism can be overcome by training, including university curricula that avoid very early overspecialization. The contributors to this book have visibly avoided this trap, as investment law specialists visibly know ihl, for example. What remains is that an investment protection arbitrator will inevitably approach problems with an investment protection focus, and a human rights court judge with a human rights approach. This problem can only be fully overcome in a very different international society, with ordinary tribunals of general jurisdiction. In recent years, international reality has moved away, rather than come closer, to such a world. In the meantime, reading this book, members of different epistemic communities, including investment arbitrators and attorneys, can come closer to each other.
Geneva Convention for the Amelioration of the Condition of Wounded, Sick and Shipwrecked Members of Armed Forces at Sea (adopted 12 August 1949, entered into force 21 October 1950) 75 unts 85 (Second Geneva Convention).
See, most importantly, the International Convention for the Safety of Life at Sea (adopted 1 November 1974, entered into force 25 May 1980) 1184 unts 278 (solas).
Vienna Convention on the Law of Treaties (adopted 22 May 1969, entered into force 27 January 1980) 1155 unts 331 (vclt).
Geneva Convention Relative to the Protection of Civilian Persons in Time of War (adopted 12 August 1949, entered into force 21 October 1950) 75 unts 287 (Fourth Geneva Convention).