Breach of contractual obligations in international law during the armed conflict: theoretical and practical aspects

The article provides a comprehensive analysis of the breach of contractual obligations in international law during the armed conflict. By combining the classical dogmatic approach and modern trends in judicial and arbitration practice, the author has managed to comprehensively outline the scope of application of the pacta sunt servanda principle, as well as the legal doctrines of «force majeure», «supervening impossibility of performance» and «fundamental change of circumstances» as grounds for avoiding liability for failure to fulfill contractual obligations. A separate section of the Article is devoted to summarizing the practice of the International Court of Justice, in particular, the judgments in «Gabčíkovo-Nagymaros» case (1997) and «Nicaragua v. United States of America» (1986), where the Court confirmed the inadmissibility of automatic exemption from liability for non-performance due to a change in the circumstances of the agreement, and «Racke GmbH v. Hauptzollamt Mainz» case (1998), where the Court of Justice of the European Union recognized the possibility of applying the doctrine of rebus sic stantibus in connection with the existence of an armed conflict. The article also examines the development of investment arbitration law during the armed conflicts: the author analyzes the «Güris Construction and Engineering Inc. v. Syrian Arab Republic» case (2020), where the loss of control over assets as a result of an armed conflict is not recognized as a ground for automatic termination of bilateral investment treaty, and a number of arbitral awards regarding the expropriation of assets of Ukrainian companies in Crimea (the claims of Naftogaz and Oschadbank). In addition, based on a comparative analysis of international documents prepared by the International Law Commission on the effects of armed conflicts on treaties, the author identifies the key criteria for applying exceptional grounds for non-performance, namely, unforeseeability of events, objective impossibility of performance and fundamental change in the scope of obligations under the agreemeent. Based on the research conducted, a number of recommendations are proposed to update the content of international treaties: introduction of clear reservations regarding the consideration of the conditions for the outbreak of armed conflict or hostilities in the performance of the agreement, and adaptation of arbitration procedures considering the risks of hostilities.