Study On The Impact Of Armed Conflict On The Application Of International Investment Treaties And Its Countermeasures

Where there are men there will be struggles,and where there are nations there will be wars.In the era of peace,armed conflicts have never been interrupted on a global scale.Armed conflicts not only affect the relations between countries but also the way to protect the interests of private investors under international investment treaties.Enterprises will comprehensively consider the political,economic,legal,resource and human resources and other factors in the decision-making of foreign investment.The number of investment treaties and the stability in the host countries are also important indicators.Generally,multinational enterprises prefer to invest in countries with stable political and economic environment to avoid the risk of political instability and armed conflict.However,many countries in the Middle East and North Africa have abundant natural resources and huge investment potential,even if they are prone to armed conflicts,they attract a large number of overseas investors.Once armed conflicts occur in these countries and the interests of foreign investors are damaged,it will be a problem to seek relief for overseas investors.China's foreign investment is also affected by armed conflicts.Since the reform and opening up,China's economic development has made remarkable achievements.In 2014,China became a capital exporter.Under the Belt and Road Initiative,China's foreign investment in countries along the Belt and Road has been growing steadily.Chinese enterprises have invested in the industries with long cycle and large scale,such as energy development and infrastructure construction,including countries with political instability and high non-commercial risks.The Yellow Book of International Politics: Annual Report on International Politics and Security(2018)shows that armed conflicts are still concentrated in the Middle East,South Asia and northeast Africa,and the majority of armed conflicts occurring along the line of the Belt and Road.In the Libyan conflict in 2011,armed conflicts were huge threat to the lives of Chinese nationals,and a large number of Chinese engineering projects in Libya suffered huge losses in the armed conflict.How can Chinese enterprises avoid the risk of loss of life and property caused by armed conflict? How to seek reasonable compensation after investors' interests are damaged? What should the state provide for overseas companies? I think it is necessary for us to put forward corresponding measures.It is generally believed that the international investment treaty is an important tool to protect the interests of overseas investors.In recent years,scholars of international law have carried out a series of studies on the improvement of articles in international investment treaties and the reform of investment arbitration.This paper focuses on analyzing whether investors can seek relief in accordance with international investment treaties after the occurrence of armed conflicts,and what impact armed conflicts will have on the application of international investment treaties.Focusing on this issue,this paper systematically discusses the impact of armed conflicts on the application of international investment treaties,including the validity determination,the interpretation and application of provisions of international investment treaties,and the dispute settlement mechanism of treaties.This paper aims to analyze the impact of armed conflicts on the application of international investment treaties and put forward some suggestions on how to protect the interests of overseas investors from the perspective of improving international investment treaties.It is a theoretical problem to analyze how armed conflicts affect the application of international investment treaties.Armed conflict will affect the validity,interpretation and application of provisions of international investment treaties,as well as the dispute settlement mechanism in treaties,covering many rules in the fieldof international public law such as treaty law,nationality law and state responsibility law.Victims of armed conflicts may have the dual identities of foreign investors and civilians,and armed conflicts will trigger the application of armed conflict law,while armed conflict law and international investment law may have overlaps and contradictions in protecting the interests of investors.How armed conflicts affect the application of international investment treaties is also a realistic problem.In recent years,there have been frequent cases of overseas investors' interests being harmed by armed conflicts,which has attracted the attention of international law scholars.How to avoid the risk of armed conflict before investing abroad? How to obtain reasonable compensation after armed conflict? This paper takes the question as the orientation,carries on the thorough research on the impact of armed conflict on the application of international investment treaties under the armed conflict background.Under this background,the topic of this thesis has certain theoretical value and practical significance.In addition to the introduction and conclusion,this paper is divided into the following five chapters:Chapter I is “The theoretical basis of armed conflicts affecting the application of international investment treaties”,focuses on the reasons why armed conflicts affect the application of international investment treaties.This paper attempts to clarify the relationship between armed conflicts and international investment,armed conflicts and the application of international treaties.Firstly,this paper defines the concept of armed conflict,clarifies the basic principles of armed conflict law and the legal consequences of armed conflict,which is conducive to understanding the relationship between armed conflict and other branches of international law.Secondly,this paper analyzes the factors that affect the application of treaties in armed conflicts,including the types of armed conflicts,the nature and content of treaties and other factors.Finally,this paper analyzes the mutual influence between armed conflicts and international investment,expounds the internal fragmentation and external intersection characteristics of the international investment law system,and discusses the overall impact of armed conflicts on the application of international investmenttreaties.Chapter II is “The impact of armed conflicts on the effectiveness of international investment treaties”,I came to a conclusion that armed conflicts usually do not affect the applicability of the effectiveness of international investment treaties.The Vienna Convention on the Law of Treaties and Draft Articles on the Effects of Armed Conflicts on Treaties are both based on maintaining the stability and continuity of treaty relations.They also provide for the termination or suspension of treaties under special circumstances due to changes in factual conditions.Usually,international investment treaties can continue to apply in the event of armed conflict.The termination or suspension of an international investment treaty may have two situations,namely the termination of the treaty itself and the termination of the treaty to the parties.The termination of the treaty itself means that the treaty is no longer binding on all parties and the legal rules established by the treaty are totally eliminated.Termination of a treaty to parties means that the treaty is no longer binding on a certain party.Armed conflicts may also give rise to state succession or government succession,which may affect the binding force of an international investment treaty on a contracting party.However,the occurrence of armed conflicts will not affect the jurisdiction of the arbitral tribunal on investment disputes after the arbitration process begins.Chapter III is “Interpretation and application of provisions relating to armed conflict”,which focuses on the interpretation and application of "war clause","full protection and security clause" and "essential security exception clauses" in international investment treaties.The "war clause" will directly use the words "war,armed conflict,or turmoil",and there is no doubt that such provisions are applicable during armed conflict.The war clause may only stipulate non-discriminatory treatment or may further stipulate the host country's liability for damages in the event of armed conflict.According to the different contents of the clauses,we can divide "war clauses" into "general war clauses" and "extended war clauses".In general,full protection and security clauses require the host country to exercise due diligence within its capabilities to protect investors from physical damages caused by violentactions.International arbitration practice has shown that full protection and security clauses play an important role in protecting the interests of investors.The application of the essential security exception clauses also indicates that partly or all of the substantive protection clauses of the treaty are not applicable in armed conflicts,but such derogation clauses will not affect the continuity of the treaty's effectiveness.The essential security exception clause may be regarded as limiting the substantive protection obligation of the treaty or an exception clause justifying the host country when violating its treaty obligations,which is the positive defense of the host country.Chapter IV is “Determination of Liability for Damages Caused by Armed Conflicts”,it mainly discusses how investors can obtain reasonable compensation from damages caused by armed conflicts.Under the existing international legal system,if the investor's home country and host country sign a bilateral investment treaty,once armed conflicts occur,the investor can seek relief according to the dispute settlement mechanism in the bilateral investment treaty.However,not all countries have signed bilateral investment treaties.In the absence of bilateral investment treaties,investors can only obtain relief according to domestic administrative law or rely on the diplomatic protection of their home countries.Investors' losses may come from the government of host country,anti-government armed forces or international armed forces in armed conflicts.It's important to prove that the responsibility is attributed to the government of host country.The arbitral tribunal will examine whether the host country violates its treaty obligations according to the content of the international investment treaty,or whether it should bear state responsibility after violating the treaty obligations.The host country may plead that its act does not violate its treaty obligations,or that there are force majeure,necessity and other reasons that exclude the illegal act of the state.If the host country is found to have violated its investment treaty obligations,the tribunal will comprehensively consider the host country's situation and the reasons and consequences of the violation of investment treaty obligations,and determine the amount of compensation with special caution.Chapter V is “Protection of Chinese Overseas Investors' interests in ArmedConflicts”,it mainly discusses how to protect the interests of overseas investors from the perspective of preventing the risk of armed conflict.China has changed from a capital importing country to a capital exporting country,in the development and practice of international investment law,China should pay attention to the relationship between armed conflicts and international investment.First,from the perspective of preventing overseas investment risks,China should improve the overseas investment insurance system,including the legal system for overseas investment insurance,strengthening the link between domestic law and international law,and improve the underwriting capacity of overseas investment insurance institutions,to reduce the losses of investors caused by the political risks of the host country.Second,from the perspective of the perfection of international investment treaties,China's bilateral investment treaties have the problems of low popularity of “extended war clauses”and “full protection and security clauses” and vague expression of “essential security exception clauses”.Based on international practice and legal analysis,it holds that China should add “extended war clause” and “full protection and security clause”when signing or revising bilateral investment treaties with countries prone to armed conflicts,and treat “essential security exception clauses” with caution.Finally,from the perspective of national safeguard measures,China's bilateral investment treaties do not cover all areas prone to armed conflicts,and the domestic administrative law systems of these countries are often not perfect enough.Diplomatic protection has its advantages.It can provide a wider range of protection for investment disputes caused by armed conflicts and is also a strong backing to ensure the host country to implement investment arbitral awards.To sum up,when dealing with overseas investment risks caused by armed conflicts,China should reduce political risks caused by armed conflicts by improving the overseas investment insurance system,revise the contents of bilateral investment treaties,and pay attention to the importance of diplomatic protection.