Armed Conflict as Force Majeure in International Investment Law

This article examines how force majeure has been invoked in international investment law as a shield against claims of state responsibility for losses that foreign investors sustained in various types of turmoil. The historically rich diplomatic and jurisprudential practice has created a misplaced expectation about the potential of this international law principle as a defence in the modern investment law context. The article argues that the usefulness of the defence depends on the nature of the claim, whereby different categories of claims may be susceptible to different concepts of force majeure, distinguishing in particular between force majeure as a circumstance precluding wrongfulness, a circumstance informing the duty of due diligence, and an exception in investment contracts. The article examines how these concepts overlap and differ, and how the interaction between them affects their application as a defence in conflict-related investment arbitration cases. It argues that while the potential of force majeure as a circumstance precluding wrongfulness is limited, its manifestation as an aspect that modifies the obligation of due diligence or an exception included in investment contracts, has played an important role in investment cases concerning conflict-related losses