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International Investment Law and the Law of Armed Conflict pp 113–128Cite as

Kosovo and Foreign Investment Protection

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Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

The question of the protection of foreign investment in post-conflict situations is a multifaceted one that poses a number of challenges in terms of international law. The present chapter examines the protection of foreign investment before the declaration of independence of Kosovo in 2008, when the territory was under the administration of the United Nations Interim Administration Mission in Kosovo as well as the protection of investments coming from countries which have not recognized Kosovo as an independent State after its declaration of independence. It assesses the legal framework of investment protection as well as the possibilities for judicial recourse for violations of investment law given the particularities of the administration of Kosovo and its legal status under international law.

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Notes

  1. 1.

    See e.g. Ford and Oppenheim (2008) and Fox and Soares (2000).

  2. 2.

    See generally Drew (2001), Richardson (2000) and Abline (2003).

  3. 3.

    It has been said that certain of these States have demonstrated afterwards a disposition to change their attitude, softening their statements, see Denza (2011) for an overview of the stance of the European countries. But, this was not followed by the actual recognition of Kosovo, and it is safe to assume that for some of these cases the recent events in Catalonia will freeze any such tendencies.

  4. 4.

    Mytilineos signed, in 1997, a 5-year contract with the Yugoslavian firms TREPCA, established in Kossonska Mitrovitsa (Kosovo) and GENEX, established in Belgrad, consisting in the financing, and furniture of raw materials for the mines of the TREPCA in Kosovo, and, in turn, Mytilineos would have the exclusive disposal of the production of the mines. These two firms suspended observance of their conventional obligations, in September 1999, as a result of the loss of control over the mines in the territory of Kosovo, and Mytilineos lodged a complaint before the Yugoslavian and Greek courts. In January 2000, the company asked to be compensated from the Greek Export Credit Insurance Organization (OAEP) which has insured its investment in the Kosovo mines.

  5. 5.

    See for example, with respect to this case, the Agreement between the Government of the Hellenic Republic and the Government of the Federal Republic of Yugoslavia on the Reciprocal Promotion and Protection of Investments (25 June 1997). See in general, Bredimas (1996).

  6. 6.

    UN Security Council Resolution 1244, UN Doc S/RES/1244 (1999).

  7. 7.

    See on this subject, Knoll (2005); Ford and Oppenheim (2008), p. 84; Ardault et al. (2006); Mashall Inglis (2003) and Von Carlowitz (2003).

  8. 8.

    In spite of the fact that the UN Security Council Resolution 1244 (1999) does not explicitly describe the authority of the UNMIK, the reports of the Special Representative of the Secretary General of the UN to Kosovo clarify that all the legislative, executive and judicial, power are vested in UNMIK. See UNMIK/REG/1999/1 (25.7.1999), amended by UNMIK/REG/1999/25 (12.12.1999) and UNMIK/REG/2000/54 (27.9.2000).

  9. 9.

    See Ardault et al. (2006), p. 371. The acts of the Special Representative are not submitted to any, constitutional or other, control. Notwithstanding this, the Special Representative has reserved the exclusive competence on matters such as foreign affairs, administration and public enterprises, judiciary, public order etc. It is worth noting that in December 1999 the UNMIK repealed its initial Regulation, substituting UNMIK Regulations as primary law. In the case of privatisations, it is the UNMIK Regulations which govern the issue. See Perritt (2004).

  10. 10.

    UNMIK/REG/2001/3 on foreign investment in Kosovo (12.1.2001), available at http://www.urmikonline.org/regulations/2001/reg03-01.html.

  11. 11.

    Law No 02/1-33 on foreign investment.

  12. 12.

    Article 6 ILC Articles on the Responsibility of International Organizations, ILC Report on the work of its 63rd session, U.N. Doc. A/66/10 (2011).

  13. 13.

    The European Court of Human Rights has pronounced that the acts of the UNMIK (and of the KFOR) in Kosovo were attributed to the United Nations, see ECtHR, Behrami and Behrami v France, Saramanti v France, Germany and Norway (App. Nos 71412/01 and 78166/01), Decision as to Admissibility of May 2, 2007, paras 141, 143. See also to the same direction, the Opinion of the Human Rights Advisory Panel, established by the UNMIK Regulation N 2006/12 (23.3.2006), to examine complaints for violation of human rights in Kosovo. Cf. Nowak (2013).

  14. 14.

    Under sections 2 and 3 of UNMIK Regulation no 2007/47 (18.8.2000), UNMIK “shall be immune from any legal process”.

  15. 15.

    Duffar (1982), p. 68.

  16. 16.

    It is on the basis of this regulation that most of the contracts of the UN include a clause in case of dispute the resource to arbitration. See Cahren (1985). But, even in this case, the Organisation has the possibility to invoke its immunity of execution, see Duffar (1982), p. 247.

  17. 17.

    See Reinisch (2009). But, in essence, the existence of alternative methods of dispute settlement does not, in any manner, limit the immunity of international organisations, confer Akande (2010).

  18. 18.

    The question of the immunity from legal process is distinct from the issue of the compensation for any damages incurred as a result of acts performed by the UN or by its agents acting in their official capacity. ICJ, Difference relating to immunity from legal process of a Special Rapporteur of the Commission of Human Rights, Advisory Opinion, ICJ Reports 1999, para. 66.

  19. 19.

    See Dailler et al. (2008), p. 459: “une partie du territoire est provisoirement administrée par l’organisation internationale. Il paraîtrait dans ce cas difficile à engager la responsabilité de cet État si une violation du droit international était commise par l’organisation administrative”. See also ICJ, Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970), Advisory Opinion ICJ Reports 1971, para. 118: “physical control of a territory, and not sovereignty or legitimacy of title, is the basis of State liability for acts affecting other States.”

  20. 20.

    ECtHR, Ilascu, Ivanjoc v Moldova and Russia (App. No 23687/05), Judgment of November 15, 201, paras 333-334: “The State in question must endeavour, with all the legal and diplomatic means available to it vis-à-vis foreign States and international organisations, to continue to guarantee the enjoyment of the rights and freedoms defined in the Convention”.

  21. 21.

    The ECtHR, in cases of exclusive de facto control of an occupying power or international administration over parts of State’s territory, was been cognisant of the fact that the measures that a State may have at its disposal to secure the observance of its positive obligations could be scarce. See ECtHR, Behrami and Behrami v France, Saramanti v France, Germany and Norway (App. Nos 71412/01 and 78166/01), Decision as to Admissibility of May 2, 2007, para. 114.

  22. 22.

    See Wessel (2011).

  23. 23.

    See Istrefi (2014).

  24. 24.

    ECtHR, Azemi v Serbia (App. No 11209/09), Judgment of November 5, 2013.

  25. 25.

    Istrefi (2014), p. 394.

  26. 26.

    Dupont (2009), p. 956.

  27. 27.

    See the list of States intervening before the ICJ in the written proceedings for the Advisory Opinion on declaration of independence on the website of the Court at <http://www.icj-cij.org/en/case/141/written-proceedings>. As to the European States intervening, pro or contra to the recognition of Kosovo, before the ICJ, see Denza (2011), pp. 331–332.

  28. 28.

    ICJ, Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo,Advisory Opinion, ICJ Reports 2010, p. 403. For comments on the opinion issued by the Court see Wilde (2011).

  29. 29.

    For a summary representation of the positions on the secession of Kosovo see D’Aspremont (2014), p. 270.

  30. 30.

    See Crawford (2007), p. 36. This same point was advanced by Cyprus in its Written Statement before the ICJ on the grounds that Kosovo lacked the capacity to conduct its external relations, which were instead conducted by the UNMIK: see Written Statement, para. 166. Cf. Sicilianos (2008a, b).

  31. 31.

    Corten (2008).

  32. 32.

    Christakis (1999).

  33. 33.

    Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations, UNGA Res 2625 (XXV) (24 October 1970) UN Doc A/RES/25/2625.

  34. 34.

    See ICJ, Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo,Advisory Opinion, ICJ Reports 2010, p. 403, paras 82-83. For comments on reaction of the Court in its Advisory Opinion towards the arguments on remedial secession brought by various States in their written submissions (Albania, Estonia, Finland, Germany, Ireland, Jordan, Lithuania, Maldives the Netherlands, Poland, Russia, Slovenia, Switzerland, and the Authors of the Declaration of Independence) see Christakis (2011), p. 78. For a different opinion, cf. Griffioen (2010).

  35. 35.

    See analytically on this controversial subject, Fleiner (2011), p. 877.

  36. 36.

    Crawford (2012), p. 590.

  37. 37.

    For an overview see Milano (2003).

  38. 38.

    Although the invoked legal basis was along the lines of the so-called principle of humanitarian intervention, this argument has not been accepted by the majority of commentators, and the doctrine has been generally replaced by that of the “Responsibility to protect” regime, which is accepted only in the context of UN Security Council Resolutions. See, among others, Sicilianos (2008a, b), pp. 184, 187.

  39. 39.

    As Brownlie suggests illegal occupation cannot itself terminate statehood when elements of certain norms the jus cogens are involved and it is less likely that recognition and acquiescence will offset the original illegality. See Crawford (2012), p. 242. See also Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations, UNGA Res 2625 (XXV) (24 October 1970) UN Doc A/RES/25/2625, where it expressly stipulated that “the territory of a state shall not be the object of acquisition by another state resulting from the threat or use of force. No territorial acquisition resulting from the threat or use of force shall be recognized as legal.”

  40. 40.

    See UN Security Council Resolution 541, UN Doc S/RES/541 (1983) and 550, UN Doc S/RES/550 (1984).

  41. 41.

    See Orakhelashvili (2008), pp. 29–30.

  42. 42.

    Corten (2008), p. 748.

  43. 43.

    See Comprehensive Proposal for the Kosovo Status Settlement, 2 February 2007 (the Ahtisaari Plan).

  44. 44.

    The only reference to the international status of Kosovo is that included in Article 1.5 of the Comprehensive Proposal for the Kosovo Status Settlement, which provides that “Kosovo shall have the right to negotiate and conclude international agreements and the right to seek membership in international organizations.” But, this possibility is to be conceived as a continuation of the same capacity to conclude treaties, under the regime of UNMIK.

  45. 45.

    Corten (2008), p. 734.

  46. 46.

    The Rambouillet Agreement was a proposed peace agreement between the Yugoslavia and Kosovo, drafted by NATO, which, however, Yugoslavia refused to accept as it contained provisions for Kosovo’s autonomy that the Serbian/Yugoslav government found beyond reasonable.

  47. 47.

    Corten (2008), p. 735.

  48. 48.

    Corten (2008), pp. 735–736.

  49. 49.

    See Article 2.1 of the UN Charter.

  50. 50.

    D’Argent P (2008) Kosovo: être ou ne pas être. Available at <https://igps.files.wordpress.com/2008/03/kosovo-etre-ou-ne-pas-etre.pdf>.

  51. 51.

    See Charpentier (1984), p. 120. Cf. Bredimas (1993), p. 77.

  52. 52.

    See principally Chapter 5 of the Regulation 2001/9 of the UNMIK. We must note that the ICJ has, in its opinion on Kosovo, noted that the declaration of independence had been adopted by persons who acted together in their capacity as representatives of the people of Kosovo outside the framework of the interim administration, see ICJ, Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, ICJ Reports 2010, p. 403, para. 109. This position has been criticised on the basis that the Court has not identified the legal order in the framework of which the authors of the declaration were based. It is a legal fiction, on which a number of judges have formulated a dissenting opinion. See generally Crep-Daigremont (2010), p. 237.

  53. 53.

    ICJ, Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, ICJ Reports 2010, p. 403, para. 51.

  54. 54.

    As Dolzer and Schreuer put it “From the investor’s perspective, the dispute to be settled by the host state’s Courts is not an attractive solution. Rightly or wrongly, the investor will fear a lack of impartiality, from the courts, of the state against which it wishes to pursue its claim”. Dolzer and Schreuer (2012), p. 235.

  55. 55.

    See for the situation before the independence of Kosovo Ombudsperson Institution in Kosovo, Fifth Annual report 2004–2005, addressed to the Special Representative of the Secretary General of the United Nations (11 July 2005).

  56. 56.

    It was submitted that the admission, by UNMIK, of the EULEX in Kosovo was contrary to the mandate of the UNMIK. See Orakhelashvili (2008), pp. 1–44 at 37–38. The same author notes that it is unclear if the EU has recognised Kosovo as an independent State by deploying EULEX (implied recognition), see at 29. But, this would be contrary to the general absence of a will of the EU, as a whole, to recognize the independence of Kosovo.

  57. 57.

    European Commission, Commission staff working paper document: Kosovo 2016 Report, Doc SWD(2016)363 final (9.11.2016) at 5: “administration of justice is slow and inefficient, and there is insufficient accountability of judicial officials. The judiciary is still vulnerable to political influence and rule of law institutions suffer from lack of funding and human resources”.

  58. 58.

    See for example on this issue <https://globalarbitrationreview.com/article/1034856/ski-resort-dispute-adds-frost-to-serbia-kosovo-relations>.

  59. 59.

    See e.g. Alberto (2010), pp. 651–663.

  60. 60.

    See Mytilineos Holdings SA, Annual Report 2007.

  61. 61.

    Agreement between the Government of the Hellenic Republic and the Government of the Federal Republic of Yugoslavia on the Reciprocal Promotion and Protection of Investments (25 June 1997).

  62. 62.

    Shihata (1989). For example, it is noted that there are 11 direct investments from Greek firms in Kosovo.

  63. 63.

    It is suggested that the position of some European States not having recognised Kosovo was not very stable. See Denza (2011), pp. 321–338. However, it is realistic to predict that this firm attitude of non-recognition will be consolidated by the recent events in Catalonia.

  64. 64.

    See e.g. the position of the European Union and of its member States, and the declaration of Jean-Claude Juncker as president of the European Commission with regards to Catalonia.

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  1. National and Kapodistrian University of Athens, School of Law, Athens, Greece

    Antonis Bredimas

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  1. Law School, University of Zaragoza, Zaragoza, Spain

    Katia Fach Gómez

  2. Athens Public International Law Center, National and Kapodistrian University of Athens, Athens, Greece

    Anastasios Gourgourinis

  3. French National Centre for Scientific Research (CNRS)-CERSA, University Paris II Panthéon-Assas, Paris, France

    Catharine Titi

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Bredimas, A. (2019). Kosovo and Foreign Investment Protection. In: Fach Gómez, K., Gourgourinis, A., Titi, C. (eds) International Investment Law and the Law of Armed Conflict. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-10746-8_6

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