The occupation and annexation of Crimea have led to several investment claims brought forward by Ukrainian investors against Russia concerning measures taken on the Crimean Peninsula. These cases have, among others, raised the underexplored issue whose, if any, investment treaties apply to occupied territory. In answering this question, the present contribution first assesses the duties of the occupant under the law of occupation vis-à-vis investment treaty obligations of the occupied State. It is argued that although the occupant has to respect these obligations, it is ultimately not subject to investor-State dispute settlement. In contrast, recent decisions in which arbitral tribunals have affirmed their jurisdiction in the Crimean context show that Russia’s own investment treaty obligations are applied to the occupied territory. The second section of the contribution critically assesses this interpretation of the common reference to “territory”. It finds that the territorial application of these treaties can, without violating other rules of international law, in fact be extended to foreign territory under the State party’s effective control. Despite the politically charged implications such an interpretation could mean for the cementation of occupation, the independent legal review of measures taken by occupying States should be welcomed.
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This is based on the premise that investment treaties are generally not subject to termination or suspension due to the outbreak of an armed conflict. See Ostřanský (2015) and see generally International Law Commission (ILC), Draft articles on the effects of armed conflicts on treaties, with commentaries, in: Report of the ILC, GAOR 66th Session, Suppl. No. 10 (A/66/10), 2011, pp. 173–217.
Regulations Respecting the Laws and Customs of War on Land, Annex to the Convention respecting the Laws and Customs of War on Land, 18 October 1907, 205 CTS 277 (HR).
Geneva Convention Relative to the Protection of Civilian Persons in Time of War, 12 August 1949, 75 UNTS 287 (GC IV). The First Additional Protocol to the Geneva Conventions further establishes a range of obligations the occupying power has vis-à-vis the civilians under its control, but the latter provisions will not be of general concern for the purposes of this contribution. See Articles 72–79 Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Armed Conflicts, 8 June 1977, 1125 UNTS 3.
The traditional translation’s use of “public order and safety” for the authentic French “l’ordre et la vie publics” should be abandoned for the more accurate “public order and civil life”. See Dinstein (2009), p. 89.
See already Feilchenfeld (1942), p. 135 (“The most frequent question is how far the occupant can go in changing the old law”). For contemporary discussions, see Roberts (2006); Sassòli (2005), pp. 676–678.
E.g. Navigational and Related Rights (Costa Rica v Nicaragua), Judgment (13 July 2009), ICJ Reports 2009, 213, paras 66–70; Aegan Sea Continental Shelf (Greece v Turkey), Judgment (19 December 1978), ICJ Reports 1978, 3, para. 77.
Coalition Provisional Authority (CPA), Order No. 89: Amendments to the Labor Code—Law No. 71 of 1987, 5 May 2004, CPA/ORD/05 May 2004/89, preamble, para. 6.
Murray (2016), p. 241 (footnote 25); Giacca (2015), pp. 1491–1492; International Committee of the Red Cross (2012); Kälin and Künzli (2009), pp. 134–135; McCarthy (2008), pp. 126–127.
Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v Uganda), Judgment (19 December 2005), ICJ Reports 2005, 168, para. 178.
Articles II and III Project of an International Declaration Concerning the Laws and Customs of War, adopted by the Conference of Brussels, 27 August 1874, reprinted in: (1907) Am J Int Law Supp 1(2):96–103; Articles 43 and 44 of the Institut de Droit International (1880).
Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v Uganda), Judgment (19 December 2005), ICJ Reports 2005, 168, paras 178–79; Benvenisti (2012), p. 76.
One could argue that compliance with Article 43 HR in the context of an investment would still fall under broader arbitration clauses that refer simply to “all disputes concerning investments”. See generally Schreuer (2014), pp. 6–11 with examples of different types of jurisdictional clauses.
See e.g. Article 1(4) Agreement between the Government of the Republic of Lithuania and the Government of Ukraine for the Promotion and Reciprocal Protection of Investments, 8 February 1994, http://investmentpolicyhub.unctad.org/Download/TreatyFile/5033, which defines “territory” as “the territory under its sovereignty”.
ILC (1966), p. 213 (para. 3). The term “appurtenant territorial waters” refers to a coastal State’s internal waters and territorial sea, see von der Decken (2018), p. 530.
UN Conference on the Law of Treaties, First Session (Vienna, 26 March–24 May 1968): Official Records, Summary Records of the Plenary Meetings and of the Meetings of the Committee of the Whole, 1969, UN Doc. A/CONF.39/11, p. 429.
Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion (9 July 2004), ICJ Reports 2004, 136, paras 107–12.
See e.g. Loizidou v Turkey, European Court of Human Rights, App. No. 15318/89, Judgment on Preliminary Objections (23 March 1995), para. 62; Al-Skeini and Others v United Kingdom, European Court of Human Rights, App. No. 55721/07, Judgment (7 July 2011), paras 138.
Permanent Court of Arbitration, Sanum Investments Ltd. v Lao People’s Democratic Republic, case no 2013-13, Award on Jurisdiction (13 December 2013), para. 240.
Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276, Advisory Opinion (21 June 1971), ICJ Reports 1971, 16, para. 118.
See also Happ and Wuschka (2016), p. 263. The follow-up questions whether individual obligations require more than effective control and whether investment treaty standards are influenced by the law of occupation lie beyond the scope of the present contribution.
Bothe (2015), p. 1460. See also Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion (9 July 2004), ICJ Reports 2004, 136, para. 121.
Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276, Advisory Opinion (21 June 1971), ICJ Reports 1971, 16, para. 122.
Article 94 Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part, 26 February 1996, OJ 2000 L 70/2.
Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276,Advisory Opinion (21 June 1971), ICJ Reports 1971, 16, paras 122, 125.