Host States’ Due Diligence Obligation Towards Foreign Investors in the Context of Rebellions and Civil Wars

Abstract

Abstract Based on an analysis of State practice and case law, this article examines one basic principle of international law embodied in Article 10 of the International Law Commission’s Articles on State responsibility. In the context of an unsuccessful insurrection or civil war, the host State is responsible for its own failure to discharge its due diligence obligation to protect foreign investors in relation to acts committed by rebels, i.e. to make all efforts within its capacity to suppress an insurrection and to take all reasonable measures to prevent injurious conduct by rebels and damages from occurring. This article examines the scope and content of this ‘duty to protect’ obligation, the applicable ‘test’ and the relevant circumstances to determine whether any breach of the obligation has been committed in light of recent investment awards analysing the full protection and security clause in the context of Libya’s civil war.