Document Type : Article


Ph.D in International Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran



Despite increasing armed conflicts and the resulting damages to civilians, including foreign investors, no specific regime has been envisaged in international law to compensate for such damages to investors. As a result, for reparation of damages caused by armed conflicts, investors resort to the so-called war clause in investment treaties as well as the general international law on reparation for wrongful acts. But this practice, as will be argued, has many ambiguities that may affect the rights of both the host state and the investor. While sovereignty considerations such as public order or national security can make it difficult to prove government responsibility in armed conflicts, the war clause provides an additional layer of protection for investors, but does not eliminate traditional investor-protection standards. All the same, the war clause makes the investor's right to reparation subject to strict requirements, such as proving the cause of damages and absence of military necessity, which is difficult in armed-conflict situations. It would be more sound to burden the state that has used military force with proving military necessity. In evaluating the damages, arbitration courts are expected to pay attention to emergency situation and its impact on the interests of both parties.


  1. English

    1. A) Books
    2. Douglas, Zachary (2009), The International Law of Investment Claims, United Kingdom, Cambridge University Press.
    3. Kantor, Mark (2008), Valuation for Arbitration: Compensation Standards &Valuation Methods & Expert Evidence, Netherland, Kluwer Law International.
    4. Marboe, Irmgard (2009), Calculation of Compensation and Damages in International Investment Law, United Kingdom, Oxford University Press.
    5. McLachlan, Campbell; Shore, Laurence & Weiniger, Matthew (2007), International Investment Arbitration: Substantive Principles, United Kingdom, Oxford University Press.
    6. United Nations Conference on Trade and Development “UNCTAD” (2007), Bilateral Investment Treaties 1995–2006: Trends in Investment Rulemaking, Printed in Switzerland, United Nation Publication.


    1. B) Articles
    2. Jagusch, Stephen & Duclos, Nicole (2009), “Compensation for the Breach of Relative Standards of Treaty Protection”, the Journal of World Investment & Trade, Vol. 10, Issue 4, pp. 515-548.
    3. Ostransky, Josef (2015), “The Termination and Suspension of Bilateral Investment Treaties due to an Armed Conflict”, Journal of International Dispute Settlement (JIDS), Vol. 6, Issue 1, 136-162.



    1. C) Documents
    2. Democratic Republic of the Congo - United States of America (1984). Bilateral Investment Treaty.
    3. International Law Commission (2001). Draft Articles on Responsibility of States for Internationally Wrongful Acts (Darsiwa).
    4. Islamic Republic of Iran - Austria (2001). Bilateral Investment Treaty.
    5. Islamic Republic of Iran- Japan (2016). Bilateral Investment Treaty.
    6. Oman - United Kingdom (1995). Bilateral Investment Treaty.
    7. Organisation of Islamic Cooperation, (1981). Agreement for Promotion, Protection and Guarantee of Investments.
    8. Republic of Korea - Turkey (1991). Bilateral Investment Treaty.
    9. Sri Lanka - United Kingdom (1980). Bilateral Investment Treaty.
    10. United States, Canada, Mexico (1994). North American Free Trade Agreement (NAFTA).


    1. D) Cases
    2. American Manufacturing & Trading, Inc. v. Republic of Zaire, ICSID Case No. ARB/93/1, Award, (Feb, 21, 1997).
    3. Ampal-American Israel Corp., EGI-Fund (08-10) Investors LLC, EGI-Series Investments LLC, BSS-EMG Investors LLC and David Fischer v. Arab Republic of Egypt, ICSID Case No. ARB/05/3, Decision on Liability and Heads of Loss, (Feb, 21, 2017).
    4. Asian Agricultural Products Ltd. v. Republic of Sri Lanka, ICSID Case No. ARB/87/3, Award (Jun. 27, 1990).
    5. CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Award (May. 12, 2005).
    6. LESI SpA. And ASTALDI SpA. v. People's Democratic Republic of Algeria, ICSID Case No. ARB/05/3, Award, (Nov. 12, 2008).


    Refrences In Persian:

    1. A) Books
    2. Alidoosti Shahraki, Naser (2014), Foreign Investment Law, Tehran, Khorsandi Publications (In Persian).
    3. Askari, Pouria (2012), Foreign Investment Law in International Arbitration Practice, Tehran, Shahre Danesh Publications (In Persian).
    4. Dolzer, Rudolf; Scheruer, Christoph (2016). Principles of International Investment Law, Translated by Seyed Ghasem Zamani & Behazin Hasibi, Tehran, Shahre Danesh Publications (In Persian).
    5. Piran, Hossein (2014), The Law of International Investment, Tehran, Ganje Danesh Publications (In Persian).


    1. B) Articles
    2. Abedini, Abdollah (2018), “The Impediments to Remedy for Victims of Gross Violations of International Human Rights Law and International Humanitarian Law”, Public law Studies Quarterly, Vol.48, Issue 3, pp. 583-598 (In Persian).
    3. Alidoosti Shahraki, Naser (2012), “Compensation of Expropriation in Foreign Investment”, Judicial Law Review Quarterly, No. 46 & 47, pp. 77-94 (In Persian).
    4. Alidoosti Shahraki, Naser (2012), “The Respect of Property and Foreign Investment”, Private Law Studies Quarterly, Vol.41, Issue 1, pp. 295-312 (In Persian).
    5. Habibzadeh, Tavakkol & Nikjah, Javad (2014), “The Criteria Governing the Compensation of Moral Damages in Relation between the Host State and the Foreign Investor with Emphasis on ICSID Arbitral Awards”, International Law Review, Vol. 31, Issue 51, pp. 163-182 (In Persian).
    6. Mirabbasi, Seyed Bagher; Siavashpour, Hamidreza (2018). “Diplomatic Protection under International Investment Treaties”, Vol.48, No. 1, pp. 1109-1125 (In Persian).
    7. Zamani, Seyed Ghasem & Bazzar, Vahid (2017), “The Assumption of Risk as an Effective Factor on Responsibility in Foreign Investment Disputes with an Emphasis on International Arbitration Practice”, Private Law Studies Quarterly, Vol.48, Issue 2, pp. 227-245 (In Persian).
    8. Zamani, Seyed Ghasem; Noori, Valiollah & Raei, Masoud (2018), “Military Necessity as an Exception in Law of Armed Conflicts”, Public Law Studies Quarterly, Vol.48, No.1, pp.717-734 (In Persian).