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Table of Abbreviations / Defined Terms

Additional Facility Rules Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement oflnvestment Disputes (10 April 2006)
Al Hani Al Hani General Construction Co., a joint venture company between Strabag SE and LIDCO
Arbitration (Additional Facility) Rules Arbitration (Additional Facility) Rules (10 April 2006)
BIT or Treaty Agreement between the Republic of Austria and the Great Socialist People’s Libyan Arab Jamahiriya, which entered into force on l January 2004
BOQ Bill of Quantities
BRVZ Bau- Rechen- und Verwaltungszentrum (accounting and financial entity in Strabag’s group of companies)
C-[#] Claimant's Exhibit
Cl. Mem. Claimant’s Memorial on the Merits dated 6July2016
Cl. PHB Claimant’s Post-Hearing Brief dated 31 October 2018
Cl. Rej. Claimant’s Rejoinder on Jurisdiction dated 15 March 2018
Cl. Reply Claimant’s Reply on the Merits and Counter-Memorial on Jurisdiction dated 9 September 2017
CL-[#] Claimant’s Legal Authority
GPC General People’s Committee
Hearing Hearing on Jurisdiction and the Merits held from 9 to 20 July 2018
HIB Housing and Infrastructure Board
IBCP General People’s Committee for the Implementation of Communications Projects
ICSID or the Centre International Centre for Settlement of Investment Disputes
LIDCO Libyan Investment and Development Company
MO 2 Modification Order No. 2
NTC National Transitional Council
NJS NJS Consultants Limited
Parties Strabag SE and Libya
R-[#] Respondent’s Exhibit
REKABA Libyan General People’s Committee for the People’s Inspection and Control Authority
Resp. C-Mem. Respondent’s Counter-Memorial on the Merits and Objections to Jurisdiction dated 9 March 2017
Resp. PHB Respondent’s Post-Hearing Brief dated I November 2018
Resp. Rej. Respondent’s Rejoinder on the Merits and Reply on Jurisdiction dated 16 January 2018
RFP Requests for Proposal
RL-[#] Respondent’s Legal Authority
RBA Roads and Bridges Authority
TPB Transportation Projects Board
TR. [Day #]:[page:line] Transcript of the Hearing
Tribunal Arbitral tribunal constituted on 7 December 2015

I. INTRODUCTION

1.
This case involves multiple claims under the bilateral investment treaty between the Republic of Austria and the State of Libya ("Treaty" or "BIT")1 for losses allegedly suffered by Claimant, Strabag SE ("Strabag"), a major international construction firm. Claimant alleges multiple violations of the Treaty by Libya, primarily related to construction work performed under several large road and infrastructure contracts prior to the revolutionary violence that began in Libya in February 2011. Claimant also asserts claims under the Treaty for property lost or damaged during the course of the revolutionary violence in 2011 and subsequently.
2.
In a nutshell, Respondent, Libya, denies the Tribunal’s jurisdiction to hear these claims and denies all liability. Respondent further contends that, should the Tribunal find any liability, any amounts found due to Claimant under its contract-based claims should be set off against the unrecovered balances of advance payments made to Claimant at the outset of contract performance, but that were not subsequently paid back during the course of contract performance.
3.
As will be seen below, the Tribunal finds that it has jurisdiction over Claimant’s claims and that Claimant has established breaches of the Treaty with respect to some of its claims. The Tribunal finds that other claims fail, inter alia, because Claimant has not established that particular damage for which it sought compensation was caused by conduct for which Respondent is responsible under the Treaty.

II. THE PARTIES

A. Claimant

4.
Claimant Strabag SE is a large international construction firm incorporated in Austria. It operates utilizing a network of wholly owned entities that specialize in different aspects of its construction business (such as procuring equipment, engineering, financial management), as well as special purpose business vehicles created in some of the countries in which Strabag carries on business. As described infra, following the relaxation of international sanctions against Libya beginning around 2003, Strabag saw opportunities to pursue large construction projects there.
5.
Claimant’s wholly owned German subsidiary, Strabag International Ltd. ("Strabag International"), initially secured contracts in its own name for two major road projects in Libya. The first involved works on the coast road in the vicinity of Benghazi; the second involved works on the coast road in the central part of the country in the vicinity of Misurata.
6.
In 2006, after Strabag established its presence and began work on the Benghazi and Misurata road projects, Libya adopted a decision requiring that foreign firms engaged in construction carry on business in conjunction with a Libyan partner.2 Accordingly, Strabag International entered into a joint venture3 with the Libyan Investment and Development Company ("LIDCO").4 LIDCO was a subsidiary of the "Libyan Social Development Fund," described by Claimant as "[t]the largest Libyan fund, under the direct control of the Cabinet."5
7.
On 12 July 2007, Strabag International and LIDCO created a joint venture company, Al Hani General Construction Co. ("Al Hani").6 Claimant indirectly owns 60% of Al Hani7 through its 100% ownership of ILBAU (a German company), which owns Strabag International (also a German company).8 The Benghazi and Misurata Contracts were assigned by Strabag International to Al Hani in 2009, with the approval of the Roads and Bridges Authority ("RBA"). All other contracts were concluded by Al Hani, after being incorporated in 2007.

B. Respondent

8.
Claimant alleges that Libya is responsible under the Treaty for actions by its armed forces and by several state agencies or instrumentalities. Some of these underwent organizational and name changes over time. Claimant contends that all of the agencies concerned are Libyan State organs.9 They are:

- The "Housing and Infrastructure Board ("HIB").10 Following various bureaucratic realignments, HIB became a subordinate entity of the Ministry of Housing and Utilities.11 It was the Libyan party in the large Tajura Contract to build infrastructure for an urban development. HIB was established under Libyan law pursuant to Resolution No. 60/1374 of the General People’s Committee. Article 1 of this resolution provides that HIB "shall have legal personality and independent financial liability and shall perform its competences set forth" in the Resolution. HIB is in charge ofpreparing urban planning schemes and engineering designs for the development of towns and villages, as well as rural or slum areas, and to set forth the necessary budget for such projects.12

- The Roads and Bridges Authority ("RBA"). The RBA was part of the Ministry of Transport and was Al Hani’s initial Libyan contracting party for the Benghazi and Misurata Contracts.13 RBA was established under Libyan law pursuant to Resolution No. 143 of the General People's Committee, which was later amended by Resolution No. 273/1378, dated 2010. Under these founding resolutions, RBA has "legal personality and independent financial liability" and is mandated to "perform its competences" designated in the resolutions, which include a wide range of responsibilities relating to land transportation, design and maintenance of roads and transportation infrastructure, traffic control and monitoring.14

- The Transportation Projects Board ("TPB") is also part of the Ministry of Transport.15 From July 2010 the TPB assumed RBA's rights and obligations under RBA's contracts with Al Hani.16 TPB entered into the other road contracts at issue with Al Hani, the TIAR, TIAR-NE, and Garaboulli Contracts. TPB was established under Libyan law pursuant to Resolution No. 199/1378 of the General People's Committee. Article 1 of this resolution provides that TPB "shall be a financially independent legal entity and shall exercise its competencies set out" in the resolution. TPB implements transportation infrastructure projects such as roads, bridges and civilian airports, including the preparation of technical and economic studies, design, engineering specifications and financial estimates.17

- The General People's Committee (equivalent to the Council of Minister before the 2011 Revolution).18

- The Libyan police and armed forces.19

III. PROCEDURAL HISTORY

9.
On 24 June 2015, the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") received from Strabag an Application for Access to the ICSID Additional Facility and a Request for Arbitration, including Exhibits 1 through 21 ("Request").
10.
On 20 July 2015, the ICSID Secretary-General approved access to the Additional Facility and registered the Request pursuant to Article 4 of the Additional Facility Rules and Articles 4 and 5 of the Arbitration (Additional Facility) Rules and notified the Parties of the registration. In the Notice of Registration, the Secretary-General invited the Parties to proceed to constitute an arbitral tribunal as soon as possible in accordance with Article 5(e) of the Arbitration (Additional Facility) Rules.
11.
By letter of 18 September 2015, Claimant informed ICSID that it opted for the formula provided in Article 9(1) of the Arbitration (Additional Facility) Rules as the method of constituting the Tribunal in this proceeding. In accordance with that provision, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party, and a presiding arbitrator appointed by agreement of the parties. In that same letter, Claimant appointed Professor Antonio Crivellaro, a national of Italy, as arbitrator in this case; Professor Crivellaro subsequently accepted his appointment.
12.
On 20 October 2015, Claimant requested that the Chairman of the ICSID Administrative Council appoint the arbitrators not yet appointed pursuant to Article 6(4) of the Arbitration (Additional Facility) Rules and designate one arbitrator to serve as the President of the Tribunal.
13.
On 23 October 2015, Respondent appointed Professor Nassib G. Ziadé, a national of Lebanon and Chile, as arbitrator in this case; Professor Ziadé subsequently accepted his appointment.
14.
By letters of 2 November 2015, the Parties agreed that the President of the Tribunal would be appointed by the Parties using a list ranking procedure.
15.
Following further correspondence from the Parties regarding the appointment of the presiding arbitrator, Professor John R. Crook, a national of the United States of America, was appointed as President of the Tribunal pursuant to the Parties’ agreed procedure for the constitution of the Tribunal.
16.
On 7 December 2015, the ICSID Secretary-General, in accordance with Article 13(1) of the Arbitration (Additional Facility) Rules notified the Parties that all three arbitrators had accepted their respective appointments and that the Tribunal was therefore deemed to have been constituted on that date. Ms. Frauke Nitschke, ICSID Legal Counsel/Team Leader, was designated to serve as Secretary of the Tribunal.
17.
On 3 February 2016, in accordance with Article 21 of the Arbitration (Additional Facility) Rules, the Tribunal held a first session with the Parties by video-conference.
18.
Following exchanges between the Parties and the Tribunal, the Tribunal issued Procedural Order No. 1 recording the agreements of the Parties on procedural matters on 10 March 2016. Procedural Order No. 1 provides, inter alia, that the language of the arbitration be English, and that the place of proceeding would be determined at a later date. Procedural Order No. 1 also sets out a schedule in the event that Respondent files a request for bifurcation of the proceeding.
19.
Following observations from the Parties regarding the place of proceedings, on 8 April 2016, the Tribunal issued Procedural Order No. 2, determining that the place of proceedings is Washington, D.C.
20.
On 6 July 2016, in accordance with Procedural Order No. 1, Claimant filed a Memorial on the Merits ("Claimant’s Memorial"), together with: Exhibits C-1 through C-385, Legal Authorities CL-1 through CL-89, a Witness Statement of Mr. Richard Napowanez dated 28 June 2016, a Witness Statement of Mr. Christian Knaack dated 30 June 2016, a Witness Statement of Mr. Jürgen Penkhues dated 30 June 2016, an Expert Opinion of Dr. Faraj Ahnish dated 4 July 2016, and an Expert Report of FTI Consulting LLP dated 6 July 2016, with Exhibits FTI-1 through FTI-150 and Appendices 1 through 9.
21.
On 29 July 2016, Respondent filed a request to address the objections to jurisdiction as a preliminary question ("Request for Bifurcation"), together with Appendices 1 through 27.
22.
On 22 August 2016, Claimant filed observations on the Respondent’s Request for Bifurcation, together with Appendices 1 through 16.
23.
On 8 September 2016, the Tribunal issued Procedural Order No. 3 rejecting Respondent’s Request for Bifurcation, and inviting the Parties to consult and submit an agreed proposed procedural calendar for the remainder of the proceedings, or, in the absence of an agreement, set out each Party’s view on the procedural schedule for the arbitration.
24.
Following correspondence between the Parties, and absent an agreement by the Parties, the Tribunal issued Procedural Order No. 4 on 4 October 2016, setting forth the procedural calendar for the joined proceedings on jurisdiction and the merits.
25.
On 9 March 2017 (one day later than contemplated in the procedural calendar set forth in Procedural Order No. 4), Respondent filed a Counter-Memorial on the Merits and Objections to Jurisdiction ("Respondent’s Counter-Memorial"), together with: Exhibits R-1 through R-242, Legal Authorities RL-1 through RL-179, a Witness Statement of Eng. Ali Hassan Ali Turki dated 4 March 2017, a Witness Statement of Eng. Mohamed Bisher dated 5 March 2017, a Witness Statement of Eng. Mokhtar Mohamed Jmiel Baryon dated 4 March 2017, a Witness Statement of Eng. Sami Nasar E1-Abesh dated 5 March 2017, a Witness Statement of Mr. Al Kelani Al Shooda dated 5 March 2017 with Annexes 1 through 9, a Witness Statement of Mr. Abdul-Rahman Abdul-Hafeez Al-Naas dated 8 March 2017, an Expert Opinion of Dr. Al-Koni Ali Abuda dated 7 March 2017, an Expert Report of Mr. Ian Michael Osbaldeston of Blackrock dated 8 March 2017, and an Expert Report of Mr. Richard Lee Edwin of Blackrock dated 8 March 2017.
26.
On 10 March 2017, Claimant wrote to the Tribunal noting the time of submission of Respondent’s Counter-Memorial and requested that the Tribunal "disregard the Counter-Memorial pending the Respondent’s explanation of the special circumstances that might justify its failure to have met the [8 March 2017] deadline fixed by the Tribunal" further to Article 33 of the Arbitration (Additional Facility) Rules. Respondent responded by letter of that same date, asking the Tribunal to deny Claimant’s request and providing an explanation of the circumstances leading to its late filing.
27.
By letter of 15 March 2017, the Tribunal informed the Parties of its decision to admit Respondent’s Counter-Memorial into the record, in view of the circumstances described in Respondent’s 10 March 2017 letter.
28.
Following exchanges between the Parties, on 17 May 2017, the Tribunal issued Procedural Order No. 5 concerning document production.
29.
On 29 June 2017, Claimant wrote to the Tribunal with reference to "a number of material omissions in Respondent’s production of documents as ordered by the Tribunal in Procedural Order No. 5," requesting that the Tribunal order Respondent to produce certain responsive documents.
30.
Upon invitation from the Tribunal, on 11 July 2017, Respondent filed a response to Claimant’s 29 June 2017 letter. In its letter, Respondent stated that it had "made extensive, diligent and thorough efforts to search for and produce documents responsive to Claimant’s Requests [for document production]" and had "duly produced documents that it has been able to locate promptly and in good faith."
31.
By email of 13 July 2017, Claimant informed the Tribunal that it did not wish to maintain its 29 June 2017 requests at this time. On 14 July 2017, the Tribunal took note of the Parties’ correspondence and informed the Parties that it "consider[ed] the matter closed."
32.
On 9 September 2017, Claimant filed a Reply on the Merits and Counter-Memorial on Jurisdiction ("Claimant’s Reply"), together with: Exhibits C-386 through C-839, Legal Authorities CL-90 through CL-172, a Witness Statement of Mr. Ahmed Akasha dated 8 September 2017, a Witness Statement of Mr. Luca de Maria dated 5 September 2017, a Witness Statement of Mr. Andre Döhring dated 31 August 2017, a Witness Statement of Mr. John McDevitt dated 5 September 2017, a Second Witness Statement of Mr. Christian Knaack dated 4 September 2017, a Second Witness Statement of Mr. Richard Napowanez dated 3 September 2017, a Second Witness Statement of Mr. Jürgen Penkhues dated 25 August 2017, a Second Expert Opinion of Dr. Faraj A. Ahnish dated 10 August 2017 with Exhibits A through P, and a Second Expert Report of FTI Consulting dated 8 September 2017 with Exhibits FTI-151 through FTI-167 and Appendices 1 through 19.
33.
On 13 October 2017, Claimant filed a Request for Provisional Measures, asserting that representatives of Respondent had attempted to contact family members of a witness of Claimant and that they had allegedly attempted to "place undue pressure on [the witness] in respect of the evidence that he has given in this proceeding." Upon invitation from the Tribunal, on 16 October 2017, Respondent filed observations on Claimant’s Request for Provisional Measures, denying Claimant’s allegations. Upon further invitation from the Tribunal, Claimant filed a response to Respondent’s 16 October observations on 20 October 2017; Respondent then filed further observations on Claimant’s Request for Provisional Measures on 22 October 2017.
34.
By letter of 31 October 2017, the Tribunal noted that, in taking into account the Parties’ submissions on the Request for Provisional Measures, both Parties "view any effort by either Party in these proceedings to influence the testimony of any witness offered by the opposing Party to be wholly improper and unacceptable." In this regard, the Tribunal highlighted Respondent’s 22 October 2017 statement that it "denies that it has engaged in any wrongful conduct and confirms that it has no intention to engage in such conduct to influence, intimidate or otherwise interfere" with any of Claimant’s witnesses or family members. The Tribunal concluded that "no further action is required at this time in connection with the matters addressed in the Parties’ recent correspondence."
35.
On 16 January 2018, Respondent filed a Rejoinder on the Merits and Reply on Jurisdiction ("Respondent’s Rejoinder"), together with: Exhibits R-245 through R-367, Legal Authorities RL-180 through RL-283, a Second Witness Statement of Mr. Al Kelani Al Shooda dated 11 January 2018, a Second Witness Statement of Eng. Sami Nasar El-Abesh dated 11 January 2018, a Second Witness Statement of Eng. Mohamed Bisher dated 11 January 2018, a Second Witness Statement of Eng. Mokhtar Mohamed Jmiel Baryon dated 11 January 2018, a Second Witness Statement of Eng. Ali Hassan Ali Turki dated 10 January 2018, a Second Expert Opinion of Dr. Al-Koni Ali Abuda dated 11 January 2018, a Second Expert Report of Mr. Ian Michael Osbaldeston of Blackrock dated 15 January 2017 with Exhibits 1 through 5 and Appendices 1 through 7, and a Second Expert Report of Mr. Richard Lee Edwin ofBlackrock dated 15 January 2018.
36.
On 15 March 2018, Claimant filed a Rejoinder on Jurisdiction ("Claimant’s Rejoinder"), together with: Exhibits C-840 through C-862, Legal Authorities CL-182 through CL-216, and a Third Witness Statement of Mr. Christian Knaack dated 14 March 2018.
37.
On 17 April 2018, the Tribunal issued Procedural Order No. 6 concerning the organization of the hearing on jurisdiction and the merits.
38.
On 29 May 2018, the President of the Tribunal held a pre-hearing organizational meeting with the Parties by telephone conference.
39.
On 15 June 2018, the Tribunal issued Procedural Order No. 7 concerning further matters related to the organization of the hearing.
40.
On 21 June 2018, Claimant filed a request with the Tribunal to introduce new documents into the record. Upon invitation from the Tribunal, Respondent filed observations on Claimant’s 21 June request on 27 June 2018.
41.
By email of 29 June 2018, Respondent requested that the Tribunal exclude certain party representatives of Claimant from attending the upcoming hearing. Upon invitation from the Tribunal, Claimant responded by letter of 2 July 2018, objecting to Respondent’s 29 June request.
42.
By letter of 2 July 2018, the Tribunal denied Claimant’s 21 June 2018 request to introduce new documents into the record.
43.
By letter of 3 July 2018, the Tribunal denied Respondent’s 29 June 2018 request to exclude certain party representatives of Claimant from attending the hearing.
44.
By letter of 4 July 2018, Claimant objected to the Tribunal’s 2 July ruling on Claimant’s request to introduce new documents into the record and requested that the Tribunal reconsider its decision. Upon invitation from the Tribunal, on 5 July 2018, Respondent filed observations on Claimant’s 4 July request.
45.
By letter of 6 July 2018, having considered the Parties’ correspondence of 4 and 5 July 2018 and the circumstances of Claimant’s request for reconsideration, the Tribunal informed the Parties that it "is not now minded to reconsider its July 2 decision" concerning the introduction of new documents into the record.
46.
A hearing on jurisdiction and the merits was held in Paris from 9 to 20 July 2018 ("Hearing").
47.
In addition to the Members of the Tribunal and representatives of the ICSID Secretariat (Ms. Frauke Nitschke and Ms. Jara Mínguez Almeida), the following persons were present at the Hearing:

- For Claimant: Mr. Charles Claypoole, Dr. Sebastian Seelmann-Eggebert, Mr. Philip Clifford, Q.C., Ms. Catriona Paterson, Mr. Robert Price, Mr. Thomas Lane, Ms. Ciara Faughnan-Moncrieff, Ms. Chiraz Kmar Turki, Mr. Philippe Pierlet of Latham and Watkins as counsel; Mr. Boris Solibieda and Mr. Hannes Truntschnig of Strabag SE, Mr. Martin Wolfbauer and Ms. Galina Braeunlich of CML Construction Services GmbH, Mr. Jörg Wellmeyer and Mr. Robert Murgatroyd of Strabag International GmbH as party representatives; Mr. Richard Napowanez, Mr. Christian Knaack of Ed. Zublin AG, Mr. Jürgen Penkhues of BMTI-Baumaschinentechnik International GmbH, Mr. Luca de Maria of CMC (Cooperativa Muratori e Cementisti) di Ravenna, Mr. Andre Döhring, and Mr. John McDevitt as witnesses; and Mr. Chris Osborne, Mr. Patrick A. McGeehin, Mr. William Berkowitz, and Mr. Ivan Jerram of FTI Consulting LLP, and Dr. Faraj A. Ahnish of Hadef & Partners as experts.

- For Respondent: Ms. Miriam Harwood, Mr. Hermann Ferré, Mr. Walid El-Nabal, Ms. Zeynep Gunday, Mr. Carlos Guzman Plascencia, Ms. Loujaine Kahaleh, Mr. Andrew Larkin, Ms. Katiria Calderón, Mr. Tim Moore, and Mr. Majed Alotaibi of Curtis, Mallet-Prevost, Colt & Mosle LLP as counsel; Mr. Mahfoud El-Foghi, Foreign Disputes Department, and Mr. Salah Aldeen Alajeeli Mohammed Wrayjeegh, Head of Legal Department, Housing and Infrastructure Board (HIB), as party representatives; Mr. Al Kelani Al Shooda, Mr. Sami Nasr El-Abesh, Mr. Ali Hassan Ali Turki, Mr. Mohamed Bisher (via video-conference), Mr. Mokhtar Mohamed Jmiel Baryon, and Mr. Abdul-Rahman Abdul-Hafeez Al-Naas as witnesses; and Mr. Richard Lee Edwin, Mr. Ian Michael Osbaldeston and Mr. Igor Corelj of Blackrock and Dr. Al-Koni Ali Abuda as experts.

48.
During the Hearing, the following persons were examined:

- On behalf of Claimant: Mr. Richard Napowanez, Mr. Christian Knaack, Mr. Jürgen Penkhues, Mr. Luca de Maria, Mr. Andre Döhring, and Mr. John McDevitt as witnesses; and Mr. Chris Osborne, Mr. Patrick A. McGeehin, Mr. William Berkowitz, Mr. Ivan Jerram and Dr. Faraj A. Ahnish as experts.

- On behalf of Respondent: Mr. Al Kelani Al Shooda, Mr. Sami Nasr El-Abesh, Mr. Ali Hassan Ali Turki, Mr. Mohamed Bisher (via videoconference), Mr. Mokhtar Mohamed Jmiel Baryon, Mr. Abdul-Rahman Abdul-Hafeez Al-Naas as witnesses; and Dr. Al-Koni Ali Abuda, Mr. Richard Lee Edwin, Mr. Ian Michael Osbaldeston, and Mr. Igor Corelj as experts.

49.
Ms. Radhia Hassine-Zribi, Ms. Asma Benyagoub and Ms. Anne Marie Arbaji were present at the Hearing to provide English/Arabic interpretation. The Hearing was recorded and a transcript was prepared by Mr. David Kasdan of B&B Reporters.
50.
Pursuant to the Tribunal’s invitation during the Hearing, Claimant filed Exhibits C-863 through C-905 and Respondent filed Exhibits R-368 through R-385 and Legal Authorities RL-284 through RL-287, on 17 August 2018.
51.
Claimant filed a Post-Hearing Brief on 31 October 2018; Respondent filed a Post-Hearing Brief on 1 November 2018.
52.
The Parties filed their Submissions on Costs on 3 September 2019.
53.
The Parties filed their observations on the other Party’s Submission on Costs on 19 September 2019.
54.
By letter of 29 October 2019, the Tribunal invited the Parties to provide any clarifications they wished to offer in relation to the matter of the guarantees established and maintained by Claimant as security for the advance payments received by Al Hani. In response to the Tribunal’s invitation, each Party filed its clarifications on 15 November 2019. Each Party filed observations on the other Party’s clarification on 10 December 2019.
55.
The proceeding was closed on 2 June 2020.

IV. FACTS

A. Strabag's Involvement in Libya Prior to the 2011 Conflict

56.
Below, the Tribunal provides a brief summary of the factual background to the dispute as set out in the Parties’ submissions. This summary is not exhaustive and does not constitute any finding by the Tribunal on any facts disputed by the Parties.
57.
Beginning in 2004, Strabag managers had conversations with senior Libyan officials regarding the possibility of doing construction work in Libya. Claimant alleges that Libyan officials sought them out for this purpose, and the record includes the minutes of a 2004 meeting attended by Mr. Saif El Gaddafi promoting Strabag's involvement in construction ventures in Libya.20
58.
After exploratory visits by Strabag personnel, Claimant decided to proceed with work in Libya, and was authorized to open a branch office by a 2006 decree.21 Strabag International entered into the two substantial Benghazi and Misurata road contracts in October 2006 and April 2007, respectively.
59.
Pursuant to a subsequently adopted Libyan decree, Strabag in July 2007 entered into a joint venture with LIDCO, and the joint venture partners then created Al Hani to carry on the construction business in Libya. Strabag lnternational's Benghazi and Misurata Contracts were then assigned to Al Hani with the written consent of the Libyan authorities,22 and Al Hani subsequently entered into several additional contracts. Claimant alleges that substantial amounts are due to it under all of these contracts on account of multiple alleged failures by Libyan entities to meet their contract obligations.
60.
At the outbreak of the Revolution in Libya in February 2011, Al Hani was party to six relevant contracts:

- The "Benghazi Contract" dated 18 October 2006 between Strabag International and RBA was concluded for the maintenance of 230km of dual carriageway coastal road between Ajdabiyah and Al Marj.23 This sector of road runs on either side ofBenghazi in the east of Libya.24 Performance of the Benghazi Contract was essentially completed and the road was opened for use prior to the Revolution, but final acceptance never occurred.

- The "Misurata Contract" dated 19 April 2007 was concluded by Strabag International and LIDCO with RBA for the maintenance of the coastal road in the Misurata/Sirte sector.25

- The "TIAR Contract" dated 2 November 2008 was concluded between Al Hani and RBA for the reconstruction and upgrade of the Tripoli International Airport Road.26

- The "TIAR-NE Contract" dated 4 August 2009 was a much smaller contract between Al Hani and RBA for technical studies and designs for the northern extension of the Tripoli International Airport Road.27

- The "Garaboulli Contract" dated 24 August 2010 was concluded between Al Hani and TPB for the maintenance of the coastal road between Ras Ejdir and Garaboulli and upgrading of Tripoli Western Access Road. Ras Ejdir is close to the Tunisian border, west of Tripoli.28

- The "Tajura Contract" dated 18 May 2008. This was a much larger contract between Al Hani and HIB for design and construction work in connection with a major new urban development in the city of Tajura, a suburb of Tripoli. The initial estimated contract value was over 778 million Libyan Dinars ("LYD"). As the Tajura project evolved, Al Hani was tasked to design and construct various utilities (water, wastewater, gas, electricity) as well as road and other infrastructure.29

(1) Features of the Contracts

61.
These contracts varied in their particulars, but included common features; the payment and approval mechanisms in the several road contracts are described in the First Witness Statement of Mr. Al Kelani Al Shooda, Director of the Accreditation Department of the TPB.30 They all provided for payment by the employer within a specified number of days upon presentation of payment certificates prepared by the contractor. These certificates stated the amount of work performed during the covered period against quantities and work indicated in the contracts. Prior to submission, they had to be reviewed and approved by the engineering firm that served as the employer’s on-scene representative.
62.

As described in Mr. Al Kelani’s Witness Statement and infra, the Libyan agencies involved then had elaborate multi-stage, multi-participant procedures for review and approval of the payment certificates. Each payment also had to be approved by the Finance Ministry and by REKABA,31 an entity of the Libyan parliament that had, and sometimes exercised, the power to disapprove or modify payments. Payments could only be made if the employing agency was allocated sufficient funds through Libya’s parliamentary budget process. Delays and deductions associated with the approval processes contributed to some of Claimant’s claims.

63.
The contracts authorized the employer to withhold from amounts due under approved payment certificates a 5% retention against final completion and approval of the works, as well as an additional 2% as a final guarantee of the works following their acceptance.
64.
Claimant seeks a total of €37,116,842 for payment certificates said to have been approved by the employer’s representative and submitted for payment, but not paid.32 Respondent counters that Claimant should not ask for compensation for unpaid payment certificates and additional works when Al Hani retains advance payments, which are monies received for work that it did not perform.33 Respondent also contends that there were many errors in the accounting of the amounts outstanding under the payment and bitumen certificates.34
65.
Under the contracts, the contractor was entitled to receive an advance payment of an agreed percentage of the contract value from the employer (15% for the road contracts; 20% for Tajura).35 The advance payments were to be progressively repaid by withholdings from amounts due to Al Hani for approved payment certificates.36 Advance payments were made to Al Hani against irrevocable bank guarantees to be released only after completion of all work under the Contracts and the expiry of the remedial period under the guarantee period.37
66.
Article 10 of the Tajura Contract illustrates this mechanism. It describes the advance payment as a "credit" in the amount of 20% of the value of the contract, with the amount of the credit to be deducted from payments to Al Hani "up to its total refund." The terms of the Contract do not specify or limit the purposes for which this credit may be used. The credit is secured by an irrevocable and unconditional letter of guarantee provided by Al Hani, which could be reduced as the credit was paid down.38 The Tajura guarantee arrangement appears to have partially lapsed through an administrative error by a Libyan bank involved in the process of renewing it. After 2011, HIB insisted that Al Hani restore the guarantee as a precondition for any agreement on partial payment and resumption of work at Tajura. The reasons why this did not occur are disputed.
67.
As discussed infra, except for the apparently lapsed portion of the Tajura guarantee, other contractually required guarantees have remained in force in the years since Claimant’s departure from Libya; Claimant alleges that they remain a significant potential liability. Its claims for compensation include significant amounts in respect of fees paid to banks to maintain the guarantees. While the "fronting" guarantee for the Tajura guarantee apparently was allowed to lapse through a Libyan bank’s administrative error,39 the evidence indicates that a related counter-guarantee, securing the Libyan bank for the foreign currency portion of the advance payment, remains in effect between the Libyan bank and ABC International Bank.40
68.

Strabag’s joint venture partner, LIDCO, was not required to provide guarantees. At the Hearing, Respondent’s witness Mr. Al-Naas testified that LIDCO was exempt pursuant to a resolution of the General People’s Committee. When asked why this resolution was adopted, he testified that he believed "that that Resolution was because LIDCO is part of the Libyan Government; and, therefore, the Government of Libya is the one who guarantees LIDCO, or provides the Guarantee for LIDCO."41

69.
Article 31 of the Tajura Contract gives the employer "the right to cancel the Contract and to confiscate the guarantee" in various situations of non- or poor performance by Al Hani. In response to the Tribunal’s inquiry at the Hearing, Respondent confirmed that it has not called the guarantees in any of the contracts to cover its unrecovered advance payments. However, Mr. Al-Naas indicated at the Hearing that HIB intended to call the guarantees in its favor.42 The situation of the guarantees is further addressed infra.
70.
At the time Claimant ceased its activities in Libya, the advance payments on the Benghazi and Misurata road projects had been completely repaid.43 Indeed, more than was required was withheld; Respondent’s witness Mr. Al Kelani stated in his First Witness Statement that there was a balance in Al Hani’s favor for overpayments under both contracts.44
71.
Mr. Al Kelani’s First Witness Statement includes a table setting out his calculation of the unrecovered amounts of advance payments on the five road contracts;45 the Tribunal refers to his evidence in this regard for purpose of illustration and makes no decision regarding its correctness. The table indicates that approximately LYD349,000 remained on the small TIAR-NE Contract guarantee, approximately LYD1,534 million on the TIAR Contract, and a considerably larger amount - about LYD25.9 million - on the Garaboulli Contract, where work had just begun when the conflict began in 201 1.46 This table indicates that of LYD54,980,401,927 in advance payments on the five road contracts, slightly over half -LYD27,786,195.53 - was not recovered.
72.
The largest advance payment was for the Tajura Contract, Al Hani’s largest project in Libya. According to Mr. Al-Naas’s First Witness Statement, the total advance payment under this contract was over LYD155.7 million, divided between over LYD62 million and almost €90 million.47 (The Tribunal again refers to this evidence for purposes of illustration, and makes no decision regarding its correctness.) As presented in Mr. Al-Naas’s First Witness Statement, LYD20 million was deducted from the advance payment to pay contract registration tax and stamp tax, leaving a net advance payment to Al Hani of approximately LYD56 million and €89 million. According to his First Witness Statement, "[b]y the time Al-Hani declared force majeure under the Tajura Contract on March 3, 2011, it had performed less than 5% of the works under the Tajura Contract, and repaid only approximately LYD2,962,008 of the Advance Payment."48
73.
At the Hearing, Mr. Al-Naas introduced what was characterized as a "correction" to the figures given in his First Witness Statement. He revised his table to increase the amount of the advance payment to Al Hani by approximately LYD20 million, reflecting a payment by HIB to the Libyan tax authorities in connection with registration of the Tajura Contract.49
74.
As discussed infra. Respondent does not counter-claim for these unpaid balances, but asks that they be set off against any recovery on Strabag’s contract-based claims.

B. Loss and Damage to Al Hani Property During the 2011 Conflict50

75.
Armed conflict between Government forces and rebel forces seeking control of Libya broke out in February 2011, beginning in the Benghazi area in the east of the country. In response to these events, a NATO-led coalition began a military intervention in Libya and enforced a no-fly zone. Al Hani suffered significant losses of equipment and facilities in the ensuing months of conflict.
76.

As of the end ofDecember 2010, Al Hani’s equipment manager, Mr. Penkhues, calculated that Al Hani had equipment in Libya valued at more than LYD100 million.51 As the conflict intensified and spread, Al Hani sought to protect this property, moving vehicles and equipment used on the Benghazi project to locations further west, and assembling and attempting to secure vehicles and equipment at its sites, particularly at its large Tweisha yard in the vicinity of Tripoli.52

77.
The mounting conflict between rebel forces and troops loyal to the regime and other supporters was accompanied by a widespread breakdown of law and order. Al Hani’s vehicles being evacuated from the Benghazi region were stopped on the coastal road and were taken at a checkpoint. In February 2011, Al Hani’s large construction camp at Tajura was overrun by a mob, looted, and partially burned. Appeals to police were unavailing.
78.
On 3 March 2011, Al Hani invoked force majeure as of 20 February 2011 in letters to its employers. Al Hani’s employers demanded that the company continue work, but Al Hani declined to do so. Along with other international companies and foreign embassies, Al Hani evacuated and demobilized its expatriate personnel in early March 2011.53
79.
As discussed infra, beginning in March and April of 2011, and continuing for several months thereafter, some Al Hani sites were occupied for varying lengths of time by organized military units loyal to the regime. Al Hani's major facility at Tweisha was occupied for substantial periods by soldiers of the 32nd Reinforced Brigade, who requisitioned numerous vehicles and a great deal of equipment, some of it against receipts.54 Military forces occupying the camps are said to have stolen other equipment, and looted and damaged structures and equipment.55
80.
Misurata, located on the coastal road between Benghazi in the east and Tripoli in the west, was the scene of intense conflict between regime forces and rebels. Al Hani’s construction camp in the region suffered heavily in this fighting. The record includes photographs taken by a surveyor analyzing the damage for insurance purposes in 2012; these include photographs of buildings at the camp destroyed by fire, damage attributed to splinters from NATO bombing, and cartridge cases of varying calibers.
81.
As discussed infra, during this period, while Al Hani’s expatriate staff had left the country, some of Al Hani’s local employees remained on duty and provided intermittent reports on the state of Al Hani’s facilities and property. This information was used by Al Hani's equipment manager, Mr. Penkhues, to prepare reports to management.
82.
In about August 2011, as the regime neared collapse, the elements of the 32nd Brigade that had occupied the Tweisha camp withdrew. Before doing so, they are said to have extensively vandalized the premises and remaining equipment.
83.
On 27 August 2011, Al Hani sent its personnel to report on the Tawarga site. By this time, the majority of the equipment in the Tawarga yard was reported as having "disappeared."56 The report by Claimant’s insurance surveyors, Sadaoui Surveyors Group, dated 12 June 2012, stated that the damage at the Tawarga site was "essentially cause[d] by NATO bombardment and rebels attacks."57
84.
Following the end of active hostilities in the fall of 2011, the evidence indicates that widespread violence and breakdown of law occurred in the areas of Al Hani’s camps.

C. Events after the 2011 CONFLICT

85.
In the months after the 2011 conflict, Strabag explored the possibility of returning to work in Libya. In September 2011, Claimant’s witness Mr. Napowanez and other senior Strabag officials visited Libya to determine the state of Al Hani’s facilities and equipment and to assess ifit was possible to restart operations. They determined that it should be possible.58 Mr. Napowanez and a team returned the following month to begin to assess what equipment was left and what was needed to restart operations. They saw that much equipment had been taken or damaged, including an asphalt plant that soldiers had used for target practice.59 In late 2011, representatives of Claimant met with officials from HIB and TPB to explore the possibility of restarting work and of obtaining compensation for loss and damage suffered during the war.60
86.
In the ensuing months, Strabag and Al Hani and their pre-Revolution contracting partners engaged in extensive discussions regarding the possibilities for securing payment for unpaid work done prior to the Revolution; compensation for wartime damage; and resuming work on major uncompleted contracts.61 These efforts were ultimately unsuccessful.
87.
Discussions between Strabag and Al Hani and their pre-Revolution contracting partners were shaped by the new Libyan authorities’ actions requiring review of pre-war contracts and establishing uniform standards for restoring contract relationships. A central body called the "Twenty Committee" played a role in this process. As discussed infra, the Parties disagree regarding the nature and authority of this body, and the extent to which it exercised supervision or control over resumption negotiations. In any case, the evidence shows that through some mechanism, a uniform practice came to be applied allowing for partial payment of pre-war claims for firms that resumed work on pre-war contracts and agreed to a separate procedure for addressing claims for wartime losses.62 On 19 February 2012, Al Hani wrote to the Secretary of the Implementing Board of the Transportation and Projects Board stating that it was willing to recommence and resume the execution of all the remaining works; and that it expected to receive 50% of the outstanding payments while the remaining 50% shall be paid in instalments within five months after resuming the works.63 On 12 March 2012, NJS and HIB met with Al Hani to discuss the Preliminary Damages Report regarding losses sustained in the Tajura Project.64
88.
The security situation deteriorated during and after the summer of 2012; the U.S. Ambassador and other U.S. personnel died in an attack in Benghazi in September, and Al Hani’s equipment was stolen.65 The minutes of a 5 September2012 Al Hani Board meeting describe a difficult and politically uncertain situation.66 Nevertheless, Al Hani continued to discuss possible resumption of work with its contract partners.
89.
In February 2013, Al Hani signed agreements with the TPB providing for Al Hani to resume work on the Misurata, TIAR and Garaboulli road contracts. The TPB agreed to pay 50% of the amounts due for previously executed works, and to pay the balance within 6 months. Al Hani’s claims for wartime damages were to be settled by a committee in which the Government had ultimate decision authority.67 The TPB would not agree to any payments other than on approved payment certificates, including on war damages.68 Al Hani accepted TPB’s conditions, except for waiver of its right to make claims for damages during force majeure.69
90.
For reasons that are disputed, Al Hani and HIB did not agree on resumption of work at Tajura.70
91.

In March 2013, Gumhouria Bank, which had previously extended a substantial line of credit to Al Hani, secured a freeze of Al Hani's funds.71 The security situation continued to deteriorate and Al Hani's staff at the Tweisha site were assaulted.72

92.
In June 2013, Al Hani received some payment for work previously performed on two projects, but did not receive payment for work on the Garaboulli project.73 Al Hani’s financial and security situation was precarious in the face of a deteriorating security situation74 that included assaults upon Al Hani's employees and taking some of them hostage. Al Hani was unsuccessful in seeking assistance and protection from Libyan authorities.75
93.
On 27 February 2014, Al Hani wrote to HIB and TPB informing them that if they did not pay Al Hani's claimed arrears, Al Hani would cease work in Libya. There was no response. On 16 May 2014, Strabag gave notice of a dispute under the Treaty and requested consultations, but received no response.76 Strabag filed its request for arbitration on 23 June 2015.77
94.
At some point subsequent to the initiation of the arbitration in June 2015, a large quantity of Al Hani’s vehicles and construction equipment were removed from the Tweisha yard. Claimant’s claim with respect to these missing vehicles and equipment is considered infra.
95.
As discussed infra, the evidence shows that since the revolutionary hostilities began in the late winter of 2011, conditions in Libya have been marked by recurring armed conflicts between rival groups, widespread events of violence and breakdown of law, and the absence of effective State authority in large areas. This has led to the absence of security and safety at many times and in in many areas of the country.
96.
The absence of law and order and of effective government control has implications for some of Claimant’s claims. These issues are considered infra.

V. JURISDICTION

A. Introduction and Overview

97.
Claimant contends that the Tribunal has jurisdiction under the Treaty and the Additional Facility Rules to entertain its claims. Respondent denies that the Tribunal has jurisdiction.
98.
To establish the Tribunal’s jurisdiction, Claimant relies on Chapter Two of the Treaty, and in particular Articles 10-12. Article 10 provides that Chapter Two of the Treaty, setting out the procedures for settling disputes, applies to disputes between a Contracting Party and an investor of the other Contracting Party "concerning an alleged breach of an obligation of the former under this Agreement which causes loss or damage to the investor or his investment." Article 11 of the Treaty then authorizes, among different means of settlement, compulsory arbitration of alleged breaches of obligations under the Treaty. In Article 12(1), each Contracting Party "gives its unconditional consent to the submission of a dispute to international arbitration in accordance with this Part."
99.
Article 1 of the Treaty defines "investor" and "investment," stating in relevant part:

(1) "investor of a Contracting Party" means:

(b) an enterprise constituted or organised under the applicable law of a Contracting Party; making or having made an investment in the other Contracting Party’s territory.

(2) "investment by an investor of a Contracting Party" means every kind of asset in the territory of one Contracting party, owned or controlled, directly or indirectly, by an investor of the other Contracting Party, including:

(a) an enterprise constituted or organised under the applicable law of the first Contracting Party;

(b) shares, stocks and other forms of equity participation in an enterprise as referred to in subparagraph (a), and rights derived therefrom;

(c) bonds, debentures, loans and other forms of debt and rights derived therefrom;

(d) any right whether conferred by law or contract, including turnkey contracts, concessions, licences, authorisations or permits to undertake an economic activity;

(e) claims to money and claims to performance pursuant to a contract having an economic value;

(g) any other tangible or intangible, movable or immovable property, or any related property rights, such as leases, mortgages, liens, pledges or usufructs.

100.
Claimant denies Respondent’s jurisdictional objection and requests the Tribunal to find jurisdiction on the following grounds:78

(1) The Tribunal’s jurisdiction is founded on the dispute resolution provisions of the BIT, in particular Article 10.

(2) Accordingly, for the Tribunal to assert jurisdiction, it must be satisfied that: (a) Claimant is an investor and made an investment in Libya as defined by the BIT; (b) there is a dispute concerning an alleged breach of Libya's obligations under the BIT; and (c) the alleged breach has caused loss or damage to the investor or his investment.

(3) In Claimant's submission, each of these requirements arising from Article 10 is satisfied:79

- Claimant is an investor in Libya pursuant to Article 1(1)(b) of the BIT and made, directly or indirectly, an investment in Libya as defined in Article 1(2) of the BIT.

- Several breaches of the BIT by Libya have undoubtedly been alleged (and also established) by Claimant.

- Those breaches have caused damage or loss to Claimant.

101.
Respondent counters that the Tribunal lacks jurisdiction because:

(1) Claimant does not have an "investment" for purposes of the treaty;80

(2) Claimant is not an "investor" for purposes of the Treaty, because it did not make any investment in Libya;81

(3) Claimant's indirect interest in Al Hani does not grant it any rights in Al Hani's assets;82 and

(4) Claimant's claims are contractual claims that are outside the Tribunal's jurisdiction.83

102.

The Tribunal considers the Parties’ arguments regarding jurisdiction in the order of Respondent’s objections given above.

B. Was There an Investment?

103.
Respondent contends that there was no investment protected by the Treaty, emphasizing arguments to the effect that Claimant’s case ultimately involves no more than claims for non-performance of road building and construction contracts. As such, Respondent contends, there was no investment protected by the Treaty. (Respondent’s related contention that the Treaty does not create jurisdiction over such claims involving contracts is addressed infra.)
104.
Respondent argues in this regard that Claimant’s activities in Libya did not have the essential characteristics of an investment,84 characteristics often referred to as the Salini criteria, derived from Salini v. Morocco.85 First, Respondent contends that Strabag assumed no "investment risk" of the kind it understands to be required by the Salini criteria. Al Hani had contractual guarantees that it would be paid for its work. These insulated Strabag from the risk that the venture would turn out not to be profitable, and shielded it from the sort of risk characteristic of a true investment.86 Second, in Respondent's view, Strabag made no significant capital contribution to its activities in Libya. It instead looked to advance payments from Libyan entities and to periodic payments to Al Hani for completed work to fund its activities.87 Third, Respondent contends that Claimant’s activities in Libya involved a series of limited-term construction contracts, and so was of insufficient duration to constitute an investment.88 Finally, Respondent contends that the purported investment did not make sufficient contribution to Libya’s economic development, as the road contracts were merely service contracts for road maintenance, while it completed only a slight percentage of the work required under the Tajura Contract.89
105.
Claimant counters that it indeed had a protected investment satisfying the Treaty’s definition of investment,90 notably in the form of its 60% interest in Al Hani. Claimant observes that it also made substantial loans to Al Hani, constituting claims to money under the Treaty definition;91 had rights and claims to money under contracts;92 and had substantial physical assets in Libya.93
106.
In Claimant’s view, it made a multiyear commitment to projects in Libya, intending to stay for the long term. In pursuit of this objective, Al Hani bought real property for its facilities in Libya and imported heavy equipment that only made sense for a long-term investment. Claimant contends that through all of these actions, it fully satisfied the Treaty’s definition of investment.
107.
Further, in Claimant’s view, the Salini criteria, whatever their relevance in other settings, are not relevant here. The Salini criteria had their genesis in the requirements of Article 25 of the ICSID Convention, which limits ICSID Convention jurisdiction to legal disputes "arising directly out of an investment." In this context, some may see a need for a definition of"investment" to determine whether an ICSID Tribunal has jurisdiction. This, however, is not an ICSID Convention case. Claimant therefore submits that the only relevant definition of "investment" is that contained in the Treaty.94

(1) Was There an Investment? The Tribunal’s Decision

108.
The Tribunal finds that there was a protected investment within the meaning of the Treaty. The Tribunal recalls in this regard that Article 1(2) of the Treaty defines "investment" as "every kind of asset... owned or controlled, directly or indirectly" by an investor. Claimant’s activities in Libya conformed to the literal definition of investment under the Treaty. Inter alia, Claimant had indirect ownership of a 60% majority of the shares in Al Hani, a substantial enterprise carrying on a construction business in Libya, holding and carrying out significant construction contracts, owning real property, and maintaining a substantial physical footprint in the territory of Libya over several years. Indeed, as time went on, LIDCO, Claimant’s co-shareholder in Al Hani, failed to respond to cash calls or otherwise to contribute to Al Hani, requiring Claimant to provide significant financial support in the form of loans.
109.
Respondent calls for the Tribunal to give weight to the Salini criteria, which in its view show that there was no investment. Claimant denies their relevance in a case where jurisdiction does not rest on Article 25 of the ICSID Convention, the context in which the Salini criteria were first articulated. The Tribunal notes that pursuant to Article 3 of the Additional Facility Rules, none of the Convention provisions, including its Article 25, are applicable to Additional Facility arbitrations. However, the Tribunal does not need to decide whether the Salini criteria have legal relevance here to determine whether an investment for the purposes of Article 2(a) of the Additional Facility Rules exists, because the record shows that if they were to be applied in assessing whether there is an investment for the purposes of the Additional Facility Rules, they are satisfied. The Tribunal notes in this regard the very substantial similarities between the activities at issue in this case and those found to constitute investments in Salini v. Morocco and Toto v. Lebanon.95
110.
The evidence shows that Claimant committed substantial amounts of material and human capital to its investment over a period of several years, acquiring property in Libya, building large facilities, and importing large quantities of heavy equipment, including material such as rock crushers that only made economic sense in the context of a long-term presence in Libya.96 This level of effort is on a par with that identified by the Salini tribunal.97 Claimant’s venture was hardly free from risk, as the events underlying this arbitration show, events that involved risks far greater than those found sufficient in Salini.98 Claimant clearly expected its efforts in Libya to be of a substantial duration, beginning from its first exploratory visits in 2006 and effectively ending eight years later with Mr. Napowanez’s departure in 2014. The Salini tribunal found that that claimant’s three years of road work in that case showed the existence of an investment.99 And, in the case at hand, Claimant’s work provided a social benefit to Respondent in the form of roads that were significantly improved prior to the Revolution, although other improvements to infrastructure were not completed due to the Revolution. The Salini tribunal found that the roads built by those claimants likewise had contributed to economic development; as the tribunal there observed, "[i]t cannot be seriously contested that the highway in question shall serve the public interest."100
111.

Accordingly, Respondent’s first jurisdictional objection is dismissed.

(2) Is Claimant an Investor?

112.
Claimant contends that it clearly is an "investor" for purposes of Article 1(1)(b) of the Treaty. It is an enterprise "constituted or organised under the applicable law" of Austria, a Contracting Party to the Treaty, and it had made an investment in the territory of Libya, the other Contracting Party.
113.
Respondent, however, denies that Claimant was an investor within the meaning of the Treaty. In Respondent’s contention, Article 1(1)(b) of the Treaty requires that an investor be "making or having made" an investment. Respondent observes in this regard that Strabag’s investment was made indirectly through two layers of wholly owned subsidiary companies, a German company ILBAU, which in turn owned a second German company, Strabag International, which owned 60% of Al Hani.101
114.
Relying heavily on the analysis of Standard Chartered v. Tanzania,102 Respondent urges that the Treaty requires that Strabag itself directly provide any funds or other elements of investment into Libya, without utilizing intermediate vehicles. By using ILBAU and Strabag International as conduits for these purposes, Claimant Strabag did not itself"make" an investment as required by Article 1(1)(b)’s definition of investor, because it did not itself take direct action to bring the investment into being.103 Instead, Strabag International, a German company "made" the investment, but it is not covered by Austria’s treaty with Libya.104
115.
In reliance on Standard Chartered, Respondent submits that Article 1(1)(b) of the Treaty requires that the claimant itself be the active party in the making of an investment. The Claimant here did not itself directly carry on the activities involved in creating the investment; it merely "held" an investment made through subsidiary companies, rather than "making" one. Hence, it was not an "investor" within the Treaty’s definition. In Respondent’s submission, the fact that the Treaty extends protection to investments owned or controlled directly or indirectly is irrelevant. The issue is whether Claimant Strabag was a covered investor because it "made" an investment. It did not.105
116.
Claimant disputes Respondent’s contention, pointing to significant differences between the treaties and investments involved in Standard Chartered and its present claims. Claimant notes that the Standard Chartered tribunal in fact acknowledged that an investment could be made indirectly utilizing an entity to channel an investor’s contribution to the host State,106 and points to the broad definition of investment under the Treaty, emphasizing that the definition expressly includes "every kind of asset... owned or controlled, directly or indirectly" by an investor. In Claimant’s submission, this confirms that the Treaty does not require that an investor directly "make" an investment. Instead, the Treaty is clear that it can do so through intermediate vehicles, such that its ownership or control can be indirect.107 Claimant urges in this regard that investment jurisprudence makes clear that investments include investments made indirectly through subsidiaries, as the Treaty expressly authorizes.108

(3) The Tribunal’s Analysis and Decision

117.
Under Article 14 of the Treaty, the Tribunal is to decide disputes in accordance with both the Treaty and "applicable rules and principles of international law." The Tribunal therefore recalls that under the general rule of treaty interpretation set out in Article 31(1) of the Vienna Convention on the Law of Treaties ("VCLT"), a treaty’s terms are to be interpreted "in good faith in accordance with the[ir] ordinary meaning... in their context." Under Article 31(2) of the VCLT, context includes the other words of the treaty. In light of these principles, the Tribunal believes that the Treaty’s definitions of "investor" and "investment" should be understood in their ordinary meaning and in a manner that renders them consistent.
118.
Thus, the fact that Article 1(2)’s definition of an "investment" includes assets "owned or controlled... indirectly"109 by an investor necessarily informs what it means to "make" an investment for purposes of Article 1(1)(b)’s definition of "investor." It is difficult to understand how an investor could "make" an investment that is "owned or controlled... indirectly" given the narrow conception of "making" an investment urged by Respondent.110
119.
The Tribunal finds that Claimant Strabag qualifies as an investor as defined by Article 1(1)(b) of the Treaty. It was, and remains, an Austrian corporation that satisfies the Treaty’s definition of an investor. The Tribunal does not accept Respondent’s contention that Strabag was not an investor because it utilized wholly owned German subsidiary companies as the vehicles for implementing its investment plans. Claimant indeed "made" an investment within the ordinary meaning of the term. That it made it through an intermediate corporate vehicle does not disqualify it as an investor under the Treaty, which explicitly covers "every kind of asset... owned or controlled, directly or indirectly" by the Claimant.
120.
Respondent’s second jurisdictional objection is accordingly dismissed.

C. Claimant's Standing to Bring Shareholder Claims

(1) Respondent's Position

121.
Respondent’s third objection is that Claimant is not entitled to seek compensation for the value of losses incurred by Al Hani, including claims under Al Hani’s contracts and for loss or damage to its property. In Respondent’s view, Claimant is asserting claims to the property of a separate juridical entity, property that belongs to Al Hani and not to Claimant. As summarized in Respondent’s Counter-Memorial:

Thus, Claimant is effectively arguing that by virtue of its indirect 60% interest in Al-Hani, through ILBAU and Strabag International, all of Al-Hani’s assets (the loan, contractual rights, machinery, equipment etc.) are transformed into investments made by Claimant in Libya and protected under the Treaty.

There is no basis for that argument under the Treaty and international law. While Claimant’s indirect holding of the 60% equity interest in Al-Hani might qualify as investment under Article 1(2)(a) of the Treaty, that interest would not grant standing to assert any rights with respect to the assets of Al-Hani (and a fortiori over the loan extended by Strabag International, a German entity not covered under the Treaty). In such circumstances, arbitral tribunals have consistently held that indirect holding of shares in an entity that may qualify as an investment under a BIT does not grant rights over the assets of that entity.111

122.

Citing Postova Banka v. Hellenic Republic112 and cases cited therein, Respondent concludes that "all the claims relating to rights under the Contracts as well as to the right to recover damages for alleged loss of machinery and equipment fall outside of the jurisdiction of this Tribunal, because they relate to rights and property that belonged to Al-Hani, not to Claimant."113

(2) Claimant’s Position

123.
Claimant counters that Respondent’s objection "ignores the wording of the Treaty, in particular the express inclusion of indirectly held assets and loans" in Article 1(2)’s definition of investment. Claimant refers as well to Article 10 of the Treaty, which in its view provides standing to bring a claim.114 Claimant disputes Respondent’s reliance on Postova Banka, which in its view relies on "strained analogies" and cannot assist the Tribunal because it involves a different investment, in a different country, under a different treaty.115
124.
Claimant’s response emphasizes the broad definition of investment in Article 1(2) of the Treaty, including its coverage of assets "owned or controlled, directly or indirectly" by an investor:

As the Claimant has demonstrated, the chapeau of Article 1(2) is extensive. It covers all types of assets, including those that are owned or controlled by the Claimant indirectly. This treaty-based conception of investment inevitably encompasses assets that belong to Al Hani. That is entirely consistent with the object and purpose of the Treaty, and many other arbitral tribunals have assumed jurisdiction over claims in similar circumstances.116

(3) The Tribunal’s Analysis and Decision

125.
As the Parties observe, this is not the first investment case in which a claimant seeks compensation on the basis of its shareholding interests in a locally incorporated entity. In Respondent’s view, in such circumstances, the claimant may recover only for the diminution of the value of its shareholding interest caused by measures by the host State contrary to a treaty.117
126.
In this case, however, Strabag does not claim on the basis of the diminution of the value of its interest in Al Hani. It rather calculates and claims its losses by reference to losses and damage incurred by Al Hani itself, such as unpaid payment certificates, costs for additional works, costs for delays caused by Respondent's authorities and the like, plus losses to equipment said to be requisitioned, damaged or destroyed by Respondent’s armed forces.118 In other words, Strabag seeks 60% of the compensation that it contends Respondent’s authorities should have paid to Al Hani pursuant to the contracts for its contract claims, or, pursuant to the Treaty for its treaty claims for war damages.119
127.
Claimant bases this argument upon the broad definition of investment in Article 1(2) of the Treaty: "investment by an investor of a Contracting Party means every kind of asset in the territory of one Contracting party, owned or controlled, directly or indirectly, by an investor of the other Contracting Party..." (emphasis added.) The definition continues with an illustrative list of covered assets, many of which Claimant maintains are at issue here. In Claimant’s submission, Article 1(2) of the Treaty allows it to claim for loss and injury sustained by Al Hani and its property, which Claimant views as "assets" that it "owns or controls, directly or indirectly."
128.
The Tribunal finds force in this understanding of Article 1(2) of the Treaty in the unusual factual context of this case. The evidence shows that, in reality, Al Hani was not in fact an autonomous entity. It was instead controlled, and its operations directed, in all practical respects by Strabag. Al Hani depended upon personnel and resources provided by Strabag or its wholly integrated subsidiaries to carry out its business. Strabag, the Claimant here, "retained ultimate control of [the] investment."120
129.
While Al Hani was formally the offshoot of a joint venture between Strabag and LIDCO, the uncontested evidence showed that the joint venture was concluded in order to comply with Libya’s domestic law requirements. Thereafter, LIDCO disregarded calls to inject funds into Al Hani and seems to have played no significant role in its operations. In particular, according to Mr. Knaack’s undisputed testimony:

I understood that LIDCO, Strabag’s joint venture partner, was a governmental organisation which had responsibility for promoting foreign investment - Al Hani was one of a number of joint ventures that LIDCO had with foreign partners on infrastructure projects. The problem we faced with LIDCO, a State-owned infrastructure company, was that it failed to contribute its share of the funds required by Al Hani. As a result of this, Strabag had to provide significant amounts to Al Hani to finance its works with the result that there was a significant disparity between Strabag and LIDCO’s contributions.121

130.
Mr. Knaack pointed to LIDCO’s recurring failures to respond to calls to contribute funds required for Al Hani’s viability, ignoring a call for LYD24 million in October 2010122 and another for €14 million in December 2010.123 LIDCO’s failures to provide its share of necessary funding, combined with delays and difficulties in obtaining payment for Al Hani’s work, forced Strabag to itself fund Al Hani in order to continue operations: "As a result, Strabag had provided significant amounts to Al Hani, and in 2010 was paying in particular the salary costs of Strabag’s management team and technical experts deployed to Al Hani."124 As Mr. Knaack explained to LIDCO in December 2010, "Al Hani had been granted credit by Strabag to cover services, supplies, technical assistance and the deployment of expatriate workers, which by then amounted to approximately €36 million..."125
131.
There is also extensive undisputed evidence showing that Strabag or its integrated subsidiaries were at the heart of Al Hani’s day-to-day operations. Strabag companies provided key personnel. Al Hani’s equipment manager Mr. Penkhues identified himself as an employee of BMTI, a Strabag subsidiary that acts as a service department and provides procurement and logistics services for Strabag projects in many countries. According to Mr. Penkhues, "[i]n November 2008, I was seconded to work for Al Hani within its central equipment and machinery division known as BMTI-Libya."126 BMTI-Libya operated Al Hani’s main workshop at its large Tweisha facility.127 Mr. Penkhues’ requests to procure new equipment were sent to BMTI "who would liaise with Strabag’s head office in Vienna and check the availability of the asset within the Strabag group." If the item was not available, its procurement had to be approved by Strabag’s head office in Vienna.128
132.
Any income received from the Libyan project, and Strabag's contributions to the project, were reflected in Strabag’s inter-company account.129 The record also indicates that Strabag made substantial capital investments to establish permanent facilities in Libya, including purchasing land, yards and offices; purchasing a fleet of heavy vehicles and other heavy equipment and machinery; opening quarries; and establishing large facilities such as concrete and asphalt plants.130
133.
Al Hani’s interconnection with Strabag was evidenced by the 2008 minutes of an internal meeting between Strabag and its subsidiary Dywidag International, a Strabag entity with expertise in infrastructure development.131 At that meeting, the two companies addressed creation of a consortium for the Tajura Contract. Their minutes recorded:

It was acknowledged that the Al Hani General Construction Co. was a nonprofit entity [...] Al Hani, respectively the Joint Venture STRABAG - LIDCO, and its service departments shall not be operating as a profit centre. All costs incurred by this organization as well as all other costs of the service departments like, Accounts, Camp, Workshop, laboratory, shall be allocated to the actual Project executed by DIG and SI.132

134.
The record thus shows that Al Hani did not in fact operate as a separate company, but instead operated under the clear control of Strabag and relevant subsidiaries. It was in all but name a Libyan subsidiary of Strabag with full transparency, in which costs and expenses, on the one hand, and revenues, on the other hand, pertained to Strabag, which expected the return of its expenses through payments received by Al Hani, not through dividends. There was no separation between Strabag and Al Hani, but rather economic identity: the economic harm or shortfall in Al Hani was equivalent to the harm or shortfall of Strabag pro rata commensurate to its share ownership.
135.
In the Tribunal’s view, these circumstances clearly satisfy the requirements of Article 1(2) of the Treaty. The investment here included a variety of assets, in addition to Strabag’s 60% interest in Al Hani, that were owned or controlled, directly or indirectly, by Claimant. The Tribunal accordingly denies Respondent’s jurisdictional objection to the effect that Claimant improperly asserts claims for injuries to Al Hani’s property and interests. The Tribunal will consider the implications of this decision infra.
136.
Accordingly, Respondent’s third jurisdictional objection is dismissed.

D. Article 8(1) - The Umbrella Clause and Claimant’s Contract-Based Claims133

137.
A significant portion of Claimant’s overall claim involves claims arising out of alleged breaches of obligations under contracts, claims that Claimant contends can be decided by the Tribunal pursuant to Article 8(1), the Treaty’s "umbrella clause." Article 8(1) of the Treaty provides: "Each Contracting Party shall observe any obligation it may have entered into with regard to specific investments by investors of the other Contracting Party."

(1) Respondent’s Position

138.
Respondent maintains that the claims related to Al Hani’s contracts do not fall within the scope of Article 8(1) of the Treaty and are therefore outside the Tribunal’s jurisdiction. Respondent advances four lines of argument in this regard.
139.
Respondent first maintains that the claims asserted "are contractual claims that are outside the scope of the Tribunal’s jurisdiction under the Treaty and are instead subject to the dispute resolution clauses of the Contracts, which provide for submission of disputes to the Libyan courts."134 Respondent stresses throughout that it sees the core of Claimant’s case to be contract disputes135 that have no place in international arbitration and should be resolved in Libyan courts applying Libyan law pursuant to the terms of the relevant contract. For Respondent, these contracts are ordinary commercial contracts, and the claims raised by Claimant result from "run of the mill" disagreements between a contractor and its employers regarding payment and performance. These are the sorts of disputes that often occur in commercial life; they do not involve violations of international law and "have no place in arbitration under the Austria-Libya Treaty."136
140.
Citing the views of Professor Georges Abi-Saab,137 Respondent urges that under international law, a tribunal must objectively assess the nature of a claim to determine if it is a "self-standing treaty claim" as a matter of international law. Respondent reviews Claimant’s specific allegations related to the contract, finding that they do not constitute treaty violations138 and must be dismissed.139
141.

Second, Respondent contends that the Article 8(1) umbrella clause does not transform contractual breaches into treaty breaches. Respondent contends in this regard that "the majority of tribunals have held that an umbrella clause such as Article 8(1), does not transform simple contract claims, such as those in this case, into treaty breaches."140 In support of its arguments, Respondent cites cases such as Joy Mining v. Egypt,141Toto v. Lebanon,142El Paso v. Argentina,143Pan American v. Argentina,144 and SGS v. Pakistan.145

142.
Third, Respondent maintains that the umbrella clause does not apply because Libya was not a party to the contracts; there was no privity between Claimant and Respondent, which Respondent views as essential to bring an umbrella clause into play. Respondent refers to the majority opinion in Burlington Resources v. Ecuador146 and the cases cited therein as showing the need for privity of contract and as reflecting the dominant strain of case law.147
143.
Respondent emphasizes in this regard that the contracts were entered into not with Libya, but with RBA, TPB or HIB "all of which have their own legal personality, separate from the State." In Respondent’s view, [t]hese entities were acting exclusively within Libya’s internal legal order, carrying out commercial obligations they undertook under the contracts, which were governed by Libyan law."148 These activities cannot give rise to responsibility of the Libyan state under international law.
144.

Respondent emphasizes that each of the contracts was the product of bargains struck between Al Hani and its counterparty to which the State was not a party. Hence, Al Hani’s claims lie against its counterparties, citing in this regard the decision in EDF v. Romania.149 Respondent finds misplaced Claimant’s reliance on cases such as Eureka v. Poland150 and Noble Ventures v. Romania.151 Respondent maintains in this regard that, unlike the entity involved in Noble Ventures, HIB and TPB "are independent bodies whose actions are not directed by the Libyan government."152

145.
Respondent further contends that there is no allegation that Libya "unjustly or improperly annulled, modified or otherwise interfered with the contracts" so there was no relevant conduct by the State that might lead to liability under international law.153 Respondent reiterates in this regard that the State of Libya was not party to the contracts, there is no privity of contract, and Libya did not enter into obligations under them.
146.
Respondent emphasizes the need to consider the specific wording of the Treaty, highlighting in this regard the word "it", which in Respondent's view demonstrates that the only relevant obligations are those directly entered into by the State.154 Respondent finds support for this view in cases such as EDF v. Romania, and again disputes Claimant's reliance on Eureko v. Poland and Noble Ventures v. Romania,155 stressing that HIB and RBA "are independent bodies whose actions are not directed by the Libyan government."156
147.
Respondent adds that, even if RBA, TPB and HIB are State organs - which Respondent denies - the international law rules of attribution are irrelevant, pointing to the ILC's Commentary on its State Responsibility Articles, which takes the view that international responsibility cannot arise from a breach of contract, even if the breach is by an entity whose actions are attributable to the State.157 Respondent finds support for this view in Maffezini v. Spain158 and Jan de Nul v. Egypt.159 In Respondent's view, there is no showing that it exercised sovereign powers (puissance publique) in relation to non-performance of the contracts. "Merely failing to make payments... is not a sovereign act."160
148.
Fourth and finally, Respondent contends that all of the claims are subject to the contracts' forum selection clauses or to the relevant provisions of Libya's Contracting Regulations, and must therefore be submitted to Libyan courts, not to the Tribunal, referring, inter alia, to the views of Professor Abi-Saab supporting this understanding.161 Respondent contends that "investment tribunals have consistently ruled that an investor may not use an umbrella clause to circumvent the forum selection clause in the relevant contract, which is an essential part of the parties' contractual bargain."162 Respondent adds that international dispute resolution should not be "misused" by claimants to avoid their contractual obligations, citing SGS v. Philippines163 and other cases.164 Respondent refers as well to the writings of Professors James Crawford and Zachary Douglas, the latter warning that forum selection clauses exist to provide legal certainty and failure to observe them "subverts this contractual certainty to the detriment of one of the parties."165

(2) Claimant’s Position

149.
Claimant’s Reply contains a substantial examination of the history of umbrella clauses, which in Claimant’s submission establishes they exist precisely to create international jurisdiction over claims such as those involved here.166 Claimant contends in this regard that Respondent fails to acknowledge the basis in the Treaty for these claims and indeed misrepresents Claimant’s case by repeatedly characterizing the claims as "breach-of-contract claims."167
150.
In Claimant’s view, claims under Article 8(1) of the Treaty are treaty claims, not contract claims, contending in this regard that Article 8(1) confers rights on a claimant and obligations on a respondent State, so that its claims here are founded on international law, not contract or Libyan law. Claimant points in this regard to Article 14(2) of the Treaty, which provides that "[i]ssues in dispute under Article 8 shall be decided, absent other agreement, in accordance with the law of the Contracting Party, party to the dispute, the law governing the authorization or agreement and such rules of international law as may be applicable."168 Claimant further maintains that the Tribunal has jurisdiction over the claims pursuant to Article 11(2) of the Treaty, which establishes international jurisdiction to address claims under the Treaty. In Claimant’s view, the choice of Libyan courts in the contracts cannot give those courts jurisdiction over the claims here, which are international law claims founded on the Treaty.169
151.
Claimant thus insists that the Treaty’s Article 8(1) umbrella clause does bring its contract-based claims before this Tribunal. Claimant urges in this regard that limitations on umbrella clauses urged by Respondent, such as the privity requirement invoked by Respondent, are not imposed by Article 8, and there is no textual basis to add them.170 In this regard, Claimant emphasizes the clear and broad wording of the clause, which covers "any obligation."
152.

Claimant points to multiple cases, including SGS v. Philippines,171Eureko v. Poland,172Micula v. Romania173 and Enron v. Argentina174 that give broad effect to similarly worded umbrella clauses. In Claimant’s view, the phrase "with regard to investments" further demonstrates that investments owned by foreign investors are covered.175 In any case, Claimant regards contracts entered into by Respondent’s public authorities as attributable to Respondent under international law’s attribution rules.176

153.
With respect to Respondent’s invocation of puissance publique, Claimant refers to its substantial historical review of the development of umbrella clauses,177 which in Claimant’s view shows that there is no requirement that a contract breach involve the exercise of sovereign powers in order to be covered by such a clause.178 In any case, Claimant contends that the course of events here was shaped by exercises of puissance publique, inter alia, in the role of the Twenty Committee, which in Claimant’s view determined the limited extent to which Respondent would recognize pre-existing claims and provide compensation for wartime damage.179
154.
Claimant disputes the view that international jurisdiction can only be exercised with respect to a violation of international law, contending instead that the provisions of the Treaty create an international obligation that must be respected and that violations of Article 8 are arbitrable violations of the BIT.180 In Claimant’s view, the weight of international jurisprudence supports this view.181

(3) The Tribunal’s Analysis and Decision

155.
The Tribunal is of course mindful that the interpretation and application of umbrella clauses is a much discussed and disputed subject, and that tribunals have taken varying positions regarding these clauses. In the wake of SGS v. Pakistan,182 some tribunals - including many cited by Respondent - have interpreted these provisions narrowly, for example by limiting their effectiveness to a narrow range of obligations involving sovereign conduct, or by limiting them to agreements concluded directly between the State and the investor. Such awards often involve tribunals’ rejection of alternative interpretations, either because they are thought to have unacceptably broad practical implications, or because they would expand the scope of international jurisdiction to matters that should be left to national law and courts.
156.

SGS v. Pakistan offers a familiar statement of such concerns. In that tribunal’s view:

Considering... that under general international law, a violation of a contract entered into by a State with an investor of another State, is not, by itself, a violation of international law, and considering further that the legal consequences that the Claimant would have us attribute to Article 11 of the BIT are so far-reaching in scope, and so automatic and unqualified and sweeping in their operation, so burdensome in their potential impact upon a Contracting Party, we believe that clear and convincing evidence must be adduced by the Claimant. Clear and convincing evidence... that such was indeed the shared intent of the Contracting Parties to the Swiss-Pakistan Investment Protection Treaty in incorporating Article 11 in the BIT.183

157.

As Respondent observes, other tribunals have likewise understood umbrella clauses to have a narrow scope, inter alia, for the reasons identified by Respondent in its objections described supra.184

158.
However, there is also a substantial cohort of cases that comes at the matter differently, and gives broader effect to umbrella clauses. Soon after SGS v. Pakistan, a second investment tribunal addressed the same issue in SGS v. Philippines. In its Decision on the Objections to Jurisdiction,185 the SGS v. Philippines tribunal emphasized the specific language of the umbrella clause in the Swiss-Philippines BIT. Comparing it with the analogous provision in the Swiss-Pakistan BIT, the SGS v. Philippines tribunal found the umbrella clause in the Swiss-Philippines BIT to be much clearer. Article X(2) of the latter treaty did indeed offer treaty protection to "any obligation [each Contracting Party] has assumed with regard to specific investments in its territory by investors of the other Contracting Party." The tribunal found these terms to be "clear and categorical" and to require an "effective interpretation" consistent with the object and purpose of the treaty, which was made for the promotion and reciprocal protection of investments. It also found that the corresponding clause in the Swiss-Pakistan BIT simply provided for a "vaguer" and less specific guarantee.
159.
In the Tribunal’s view, this issue cannot be resolved by comparing the number of awards expressing one view or another. As both Parties acknowledged in their arguments, it is the words of a particular treaty that matter. Hence, the meaning of Article 8(1) of the Treaty is ultimately a question of treaty interpretation.
160.
As stated above, Article 31 of the VCLT requires that a treaty’s words must be interpreted "in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." The Tribunal therefore starts from the perspective that treaty language should in principle be taken at face value, and its ordinary meaning should not be altered or conditioned without clear justification. Further, the language must be assessed in light of related provisions of the Treaty, and of its stated purpose in its Preamble of "desiring to create favourable conditions for greater economic co-operation between the Contracting Parties..."
161.
The Tribunal begins with Respondent’s first objection, its recurring argument to the effect that Al Hani’s claims are ordinary commercial contract claims under private - and not international - law that are outside the Tribunal’s jurisdiction. For its part, Claimant deems this a mischaracterization of its claims. In Claimant’s view, these are treaty claims, predicated upon Article 8(1) of the Treaty. They have been properly brought before the Tribunal and made subject to its jurisdiction under Articles 10 and 11. Under Article 14, they stand to be decided by the Tribunal under Libyan law "and such rules of international law as may be applicable."186
162.
The Tribunal understands Respondent’s first objection to be closely linked to its second, that Article 8(1) of the Treaty does not have the transformative effect asserted by Claimant, so that it does not transform claims rooted in Al Hani’s contract disputes into claims arising under international law. Respondent advances several arguments that in its view mean that Article 8(1) cannot be given the effect advocated by Claimant.
163.
Thus, at the Hearing, Respondent argued that interpreting Article 8(1) of the Treaty as urged by Claimant would "open the floodgates to allow every commercial dispute in contracts with States or State entities to find its way to an international tribunal convened under a bilateral investment treaty."187 (As noted supra this is similar to the view of the tribunal in SGS v. Pakistan.) However, such policy-based arguments do not fit into the VCLT’s rubric of treaty interpretation. These are policy issues for treaty-makers to consider in selecting the words of their treaty; they cannot later be imported to limit the meaning of the chosen words.
164.
In a different vein, Respondent argues that Article 8(1) of the Treaty can operate only where the State acts in a sovereign capacity involving some exercise of sovereign authority - puissance publique - or that it can only apply to conduct involving breaches of international law. Hence, Article 8(1) of the Treaty cannot apply to ordinary commercial acts. The difficulty is that such arguments in effect call for the Tribunal to introduce limits or conditions to Article 8(1) that do not appear in its language or necessarily follow from its ordinary meaning. Respondent’s contention that Article 8(1) of the Treaty only covers contractual disputes involving some exercise of puissance publique, for example, has no foundation in the text of the article. Similarly, the argument that Article 8 can only apply where there is a claimed breach of international law - one arising on some basis other than Article 8(1) - has no basis in the text. Such arguments would limit Article 8(1) in ways that have no foundation in its text and would, indeed, appear to deprive the provision of effectiveness in all but rare situations.
165.
While the Tribunal has great respect for the proponents of such views, it is not able to agree that arguments regarding puissance publique or on the perceived inherent limits of international jurisdiction can amend or condition the plain language of the treaty-makers in Article 8(1). In any case, although the requirement of puissance publique is absent in Article 8(1) of the Treaty, as discussed more fully infra, the factual circumstances clearly show that Al Hani's contracts were all made for significant public infrastructural projects in the interest of Libya. Contracting for such public works contracts is in fact a typical State function, not a commercial activity carried out j ure privatorum. Further, their performance involved actions by a range of State organs exercising their governmental powers.
166.
Accordingly, the Tribunal finds that Respondent’s first and second objections to jurisdiction under Article 8(1) of the Treaty must be rejected.
167.
Respondent’s third objection revolves around the idea that there is no privity between the Claimant here - Strabag - and the Respondent, Libya. In considering this objection, the Tribunal recalls the elements of Article 8(1) of the Treaty (quoted supra, paragraph 137). The first three elements require that a State party to the Treaty shall observe (1) "obligation[s]," that are (2) "with regard to specific investments" by (3) "investors" of the other Party. These three are met here. The contracts at issue contain "obligations" in the ordinary sense of that term. They exist "with regard to specific investments" as outlined above. And the Tribunal has found that Claimant is an "investor" for the purposes of this Treaty. What is left to be determined is whether Libya, acting through RBA, TPB and HIB, "entered into" these "obligation[s]." The issue, then, concerns the ordinary meaning of the phrase "it [each contracting Party] may have entered into" of Article 8(1) of the Treaty.
168.
In Respondent’s view, whether Libya "entered into" any obligations is a question to be determined under Libya’s domestic law. Thus, as neither Claimant nor the State of Libya are named parties to the contracts at issue, Libya did not enter into any relevant obligations. The Tribunal, however, believes that the matter requires a more searching analysis and involves more than asking "who is the formal party to the contract" under Libyan law. VCLT Article 31 dictates that whether Respondent "entered into" the obligations at issue is to be determined as a matter of international law in accordance with the words’ ordinary meaning, in their context, and in light of the object and purpose of the BIT.
169.
The Tribunal believes that an interpretation of the phrase "it [each Contracting Party] may have entered into" in light of these factors leads to the conclusion that Respondent has indeed entered into the obligations at issue.
170.
The Tribunal first turns its attention to the term "it." The ordinary meaning of this term refers to "each Contracting Party." The "Contracting Party" that is relevant to the Tribunal’s analysis on this point is Libya. While it may be possible to argue that "Libya" means exclusively the Government of Libya, such an interpretation would fail to take account of the fact that, as noted by the commentary on Article 5 of the International Law Commission’s Draft Articles on Responsibility of States for Internationally Wrongful Acts ("ILC Articles"), States may operate through "parastatal entities, which exercise elements of governmental authority in place of State organs [...]."188 The Tribunal therefore believes that the term "it" does not mean only the Government of Libya, but may also include other Libyan bodies.
171.
The Tribunal now turns to the question of whether, for the purposes of Article 8(1) of the Treaty, the RBA, TPB and HIB, by entering into contracts with an investor, are to be taken as if Libya itself "entered into" the contracts.
172.
The words of Article 8(1) of the Treaty must be assessed in light of the purpose and structure of the Treaty and the relevant circumstances, including the nature of the entities involved, of the contracts, and the manner in which they were concluded and implemented.
173.
First, as suggested supra, the nature of the entities involved and of the contracts is relevant to the assessment. The RBA, TPB and HIB were mandated to carry out functions deeply bound up with important State interests and that are normally exercised by State organs. They were vested for that purpose with elements of governmental authority. As confirmed by Article 5 of the ILC Draft Articles, their conduct has to be considered as an act of the Libyan State.
174.
RBA is the Libyan administrative authority officially in charge of the Libyan road sector including the planning, programming, budgeting, and implementation of road investments; TPB is responsible for the implementation of the State's general policies in the field of terrestrial transportation; and HIB funds and executes the country’s infrastructure investment program, and is the owner of all projects awarded and administered under the program, which will improve housing, roads, bridges, water and utilities to Libyan residents.
175.
The contracts were concluded to carry out significant public projects important to Respondent: rehabilitating major roadways in the TPB contracts, and the design and construction of a major urban development project under the contract with HIB. These were significant projects deeply bound up with important State interests. Their public character is underscored by the fact that they were administrative contracts; under Article 3 of Respondent’s Administrative Contract Regulations189 such contracts must "target realization of the public interest."190 These same regulations give the public agency offering the contract unusual powers to terminate or alter contract provisions. While the Tribunal is fully aware that the fact that the contracts concluded were administrative contracts is not of itself dispositive for purposes of Article 8(1) of the Treaty, their legal character underscores their connection with the State’s interests and is a relevant element in the web of factors bearing on interpretation of Article 8.
176.
Second, the circumstances surrounding the conclusion and implementation of the contracts are relevant, and reveal that RBA, TPB and HIB acted at the direction of Libyan State organs. As confirmed by Article 8 of the ILC Draft Articles, their conduct has to be considered as an act of the Libyan State.
177.
Respondent cites the separate legal personality and supposed budgetary independence of RBA, TPB and HIB, but the evidence, including the Hearing testimony of several of Respondent’s witnesses, paints a different picture. It shows that RBA, TPB and HIB could not in fact act with full independence free of the State’s direction and control in a way that makes them distinguishable from the State. Each of these entities was a sub-unit of a Libyan Ministry.191 RBA forms part of the Ministry of Transport, and prior to the Revolution, was subordinated to the General People’s Committee for Transportation and Road Transport. TPB also forms part of the Ministry of Transport. HIB forms part of the Ministry of Housing and Utilities, and, prior to the Revolution, was subordinated to the General People’s Committee. Their staff were subject to instructions from elsewhere in the Government. Mr. Bisher of TPB tellingly testified that "I work within a governmental body, and I get instructions from either the Chairman of the TPB or from the General People’s Committee."192 In this regard, Mr. Bisher cited a letter from the General People’s Committee authorizing TPB to make a substantial partial payment on a design contract.193
178.
Moreover, while in formal terms these bodies had their own budgets, they were entirely dependent on funding provided to them by other State organs. This transpired from the evidence of Respondent’s legal expert on Libyan law, Dr. Abuda.194 This was further confirmed by Mr. Al Kelani’s evidence:

Q. Once REKABA approved, you could instruct payment, and my question is: Where would that money come from to pay the Payment Certificates?

A. We have credits from the Finance Ministry. From the Finance Ministry, we have the funds.

Q. So, the Finance Ministry sends funds to TPB to pay these Payment Certificates; is that correct?

A. We have -- at the end of every year, we request a budget, so we use those funds.

Q. So, this was money that was allocated from the general State budget to TPB; is that correct?

A. Yes, that's correct.195

179.
Further, conclusion of these contracts required the approval of senior Government authorities, and several of them (although not the TIAR-NE Contract) received separate high-level approval. The General People's Committee ("GPC") separately authorized conclusion of the TIAR Contract in a specified amount by a separate legislative act;196 the copy of the TIAR Contract in the record includes the GPC's decision authorizing the Contract.197 A variation order for the Benghazi Contract was approved by the "Secretary of the General People's Committee for Transport."198
180.
Moreover, both the terms of their contracts and payments thereunder required approval by REKABA, Respondent's witness Mr. Al-Naas, describes REKABA as "a control, an autonomous independent body whose task is to supervise the projects and the funds"199 that "reports directly to Parliament."200 Mr. Al Kelani, who is Respondent's principal witness on the road contracts, describes it as being "linked to the legislative."201 While the mere oversight by REKABA does not of itself lead to the conclusion that the State entered into the contracts, as found by the Tribunal in this case, the evidence shows that REKABA exercised these powers of supervision vigorously. Mr. Al Kelani describes in detail in his First Witness Statement how all payments required REKABA's approval, making clear that REKABA could and did exercise this authority to block or modify payments to Al Hani.202
181.

The record is replete with instances where contracts were altered, payments were denied or revised, and other aspects of contract performance altered by REKABA or other entities in a manner showing RBA's, TPB's and HIB's limited autonomy. As Mr. Al Kelani's evidence makes clear, TPB and HIB could pay only amounts approved by REKABA, and the record shows that REKABA reduced or delayed payment of amounts claimed by Al Hani. Mr. Turki acknowledged in this regard that the entity he identified as REKABA criticized Al Hani's work on the 11th of June Road, triggering reductions in the amount to be paid.203 New contracts also required REKABA's approval,204 and the agency also exercised its powers to revise the terms of contracts and to add conditions or requirements. The Tajura Contract thus had to be revised and then signed a second time because of demands by REKABA.205 REKABA imposed a limit on the number of variation orders that contractors could submit, thereby limiting or delaying Claimant's compensation for work performed.206

182.
REKABA was not the only constraint on these agencies' autonomy. The Ministry of Finance was also deeply involved in their financial operations. Mr. Al-Naas confirmed that payments under the Tajura Contract also required approval by "the financial auditor, a representative of the Finance Ministry."207 Mr. Al Kelani confirmed that payments required approval of both REKABA and the Finance Ministry:

Q. And you could only pay (a) if you received those funds from the Finance Ministry in the budgetary process, and (b) if REKABA approved the payment by sending a yellow or green sheet?

A. Yes, that’s true.208

183.
Following the Revolution, the Tribunal understands the evidence to show that TPB and HIB did not have independent authority to resume dealings with Al Hani, but could do so only under the guidance, and possibly the direction, of a Government body called the Twenty Committee. This entity established limiting conditions within which work might be resumed and past work paid for. In its Counter-Memorial, Respondent described the Twenty Committee as established to "(i) study development contracts entered into by Libya with foreign companies; (ii) study claims for losses submitted by companies; (iii) determine losses due to the 2011 Revolution; and (iv) determine whether these contracts should be terminated, renewed, or modified."209
184.
The Parties disagree regarding the significance of the Twenty Committee, and Respondent provided no documentation concerning its activities in response to Claimant’s requests during the document production phase. There was evidence that the Twenty Committee played a substantial role in, for example, decisions regarding possible resumption of the Tajura Contract. Mr. Turki thus testified at the Hearing that in considering terms for resuming work at Tajura, "we dealt here with an administration that was in a higher - that had a higher status, and it gave us instructions, and this was some of the instructions that were given to us at the time with regards to our dealings with the Contractors."210
185.
At the Hearing, Respondent introduced a number of "corrections" to previously filed witness statements that often appeared intended to lessen the relevance of the Twenty Committee. As noted infra, Respondent offered the Chair of the Twenty Committee as a legal expert (without disclosing his earlier role to the Tribunal), but not as a fact witness able to clarify the disputed matters. Claimant criticizes Respondent’s reluctance or inability to provide any documents in document phase and calls for adverse inferences.211
186.
The Tribunal considers it helpful to point to the reasoning of the tribunal in Toto v. Lebanon, which, in not dissimilar circumstances, held as follows:
51. The Contract was initially made with the CEGP [Conseil Exécutif des Grands Projets], which was established by Decree no. 6839 of June 15, 1961. Article 1 of this Decree provided that the CEPG is in charge of studying and implementing the projects entrusted to it by the Council of Ministers. The CEPG was attached to the Ministry of Public Works and Transport which monitored the execution of the projects entrusted to the CEPG. The CEPG had a distinct legal personality and enjoyed administrative and financial autonomy. However, it operated under the control of the aforementioned Ministry and the authority of the Council of Ministers, and was also subject to the disciplinary authority of the Central Inspectorate. The CEPG had its own funds, which originated' from the amounts allocated in the State budget to the projects to be performed by the CEPG.
52. Based on the foregoing, the CEPG, being an établissement public administratif linked to the Ministry of Public Works and Transport and operating under the authority of the Council of Ministers, was a public entity ("personne morale de droit public") that was created and mandated by Lebanon to exercise elements of governmental authority.
53. In brief, the CEPG, with projects funded by the State budget, and in charge of implementing the decisions of the Council of Ministers, exercised Lebanese governmental authority when it entered into the Contract with Toto. As also confirmed by Article 5 of the ILC Draft Articles, its conduct has to be considered as an act of the Lebanese state.212
187.
Reviewing the overall circumstances cumulatively, including the public importance of the functions carried out by RBA, TPB and HIP and their vesting with governmental authorities, their lack of administrative and financial economy, the nature of the contracts and their being deeply bound with state interest, and the existence of overwhelming evidence that demonstrates that an array of public authorities had a major hand in the conclusion and performance of the contracts, the Tribunal is of the view that, in this case, there is an exceptional combination of circumstances compelling the conclusion that the Respondent did, indeed, "enter into" the obligations in the disputed contracts within the meaning of Article 8(1) of the Treaty.
188.
Accordingly, the Tribunal finds that the several contracts between Al Hani and RBA, TPB and HIB fall under Article 8(1) of the Treaty.

E. Recourse to Libyan Courts

(1) Respondent’s Position

189.
Respondent’s fourth objection to jurisdiction is that, should the Tribunal elect to consider Claimant’s claims predicated upon its contracts, Claimant cannot pick and choose which contract provisions to apply. The contracts provide that the governing law is Libyan law, and that disputes are to be resolved in Libyan courts. In Respondent’s view, any disputes related to the contracts must therefore be addressed by Libyan courts, not by this Tribunal.
190.
The Tribunal received varying translations of the relevant contract clauses; the differences among them appear to reflect differences of translation and not of substance. All appear similar in substance to Article 53 of the Tajura Contract, which provides that "the Libyan Court is the competent court to settle any disputes arising from this Contract."213 Respondent adds that under Libyan law, State entities like RBA, TPB, and HIB cannot enter into arbitration agreements. Hence, under the terms of the contracts, and as a matter of Libyan law, Claimant’s claims must be determined by Libyan courts.

(2) Claimant’s Position

191.
Claimant offers several responses. As discussed supra, it urges that its claims related to the contracts are treaty claims based on Article 8(1) of the Treaty. They thus exist on the plane of international law and are not contract claims under private law.214
192.
Claimant adds that the Treaty gives it an express right to arbitrate its claims based on Article 8(1) through the dispute settlement mechanism created by the Treaty. Respondent expressly consented to such arbitration in Article 12(1) of the Treaty, where Libya gave "unconditional consent to the submission of a dispute to international arbitration..." In Claimant’s view, requiring recourse to Libyan courts would deprive it of this right under the Treaty. Claimant points out in this regard that in Austrian treaty practice, where Austria intends for umbrella clause claims to be determined through contracts’ dispute settlement procedures, it does so expressly.215
193.
Claimant disputes Respondent’s contention that Libyan domestic law supersedes its treaty right to arbitration. In this regard, its post-Hearing submission of additional materials includes Libyan legal authorities216 said to show that in Libya’s domestic law treaty obligations have domestic legal effect and have a status superior to statutes. Hence, Claimant’s treaty right to arbitrate prevails over any Libyan laws or regulations claimed to limit recourse to international arbitration under the Treaty.
194.
Finally, Claimant points to the poor security situation in Libya, contending that it could not expect secure conditions or a fair hearing should it be required to pursue its claims in Libyan courts.217 Claimant’s Post-Hearing Brief points in this regard to the testimony of Libya’s witnesses at the Hearing regarding the poor state of Libya’s legal system under current conditions.218 And, in response to the Tribunal’s request to both Parties, its post-Hearing submission of additional evidence includes multiple reports by human rights groups and other independent observers sharply critical of the current state of Libya’s courts.219

(3) The Tribunal’s Analysis and Decision

195.
The Tribunal is mindful that whether an umbrella clause carries with it the duty to give effect to contract provisions requiring recourse to local courts is a disputed question on which tribunals have taken varying views. It is also mindful that both Parties have offered substantial arguments in support of their positions.
196.
However, the Tribunal believes that in this case, this issue must be considered in light of the protracted conditions of insecurity in Libya since 2011. A compelling body of evidence, adduced by both Parties, shows that since the revolutionary hostilities in 2011, conditions in Libya have been characterized by recurring events of intensive fighting between rival groups, widespread violence, and the widespread breakdown of State authority. As a practical matter, there is not today, and has not been for some years, the possibility for Claimant to pursue its claims in Libyan courts in tranquility and safety. Indeed, during the July 2018 Hearing, one witness was unable to travel to Tunis by air due to the suspension of Libyan Airlines Service precisely because of a conflict between rival factions seeking control of the airline.220
197.
As discussed infra, Respondent itself introduced evidence highlighting these conditions, inter alia, in contesting Claimant’s claims related to its alleged failure to provide full protection and security, both generally and in the specific context of the removal of a large quantity of Al Hani’s equipment from the Tweisha yard in 2014.
198.
Claimant similarly cited the "dangerous situation and the undeniable existence of force majeure conditions" when it gave notice of force majeure to its employers in March 2011, followed by departure of Al Hani’s expatriate staff from Libya.221 Claimant’s witness Mr. Napowanez described a deteriorating security situation in 2013, as Strabag and Al Hani sought to resume operations, leading him to conclude "[w]ith increased physical danger, and the lack of protection that we were getting from Libyan police and security forces, we could not guarantee the safety of the sites or our employees."222 Mr. Napowanez left Libya in early 2014.223
199.
Later in 2014, the September Report of the UN Secretary-General to the UN Security Council on political and security developments in Libya observed, inter alia:
2. The reporting period witnessed the most serious outbreak of armed conflict, in Tripoli, Benghazi and elsewhere in the country, since 2011. The use of heavy weaponry in densely populated areas by all sides, in particular in the capital, resulted in an unprecedented movement of population as civilians tried to escape the fighting. An estimated 100,000 people were displaced in Tripoli, with an additional 20,000 in the east. At least 1 00,000 are known to have crossed the borders into neighbouring countries...
4. Following six weeks of armed hostilities in the capital in July and August, Libya appeared to be descending into a period of instability and uncertainty.224
200.
The UN Secretary-General’s report from February 2015 described a worsening situation:
2.... [D]uring the reporting period, the overall security in the country continued to deteriorate sharply. Armed hostilities spread to the country’s north-west, the eastern oil crescent area and the southern region. In the east, fighting intensified in Benghazi, causing the breakdown of much of the city’s public services, resulting in severe shortages in the supply of food and medicine. The continued indiscriminate shelling and use of air assets against targets in heavily populated areas and strategic installations across the country underscores the growing plight of the civilian population and the systematic destruction of much of the country’s vital infrastructure.
3. The closure of much of Libyan airspace to commercial flights, combined with an escalation in fighting across different parts of the country and diminished State capacity to provide basic services, aggravated the humanitarian crisis triggered over the summer months by the outbreak of violence in July 2014 and the gradual breakdown of law and order across the country.225
201.
Other reports by the UN Secretary-General of record in this case are to like effect. His December 2016 report observes, inter alia:
12. The security situation in Tripoli remained fragile. The Presidency Council partially moved from the Abu Sittah naval base to the office of the President of the Council in the city centre and installed itself in a number of ministries and other government buildings. The Council faced serious obstacles in implementing its mandate to govern. With only limited control on the ground and in the absence of security forces at its disposal, the Council was compelled to rely on armed groups committed to the Libyan Political Agreement for its security. Civil servants were divided between the Council and its political opponents, further complicating efforts to improve service delivery. The provision of public services in the capital, including water and electricity, deteriorated, giving rise to public protests.

13. Tripoli remained under the control of a patchwork of armed groups with differing agendas and loyalties, from both Tripoli and the surrounding areas, including Misratah. Rivalries over funding and territorial control between the groups regularly led to clashes. In June and September, elements of the Salah al-Burki brigade and the Abu Salim armed group clashed in central Tripoli, leaving at least 10 people dead. Further clashes in October, close to Tripoli's Mitiga airport, between the Tripoli Revolutionaries Brigade and the Yusuf al-Buni brigade, caused a number of fatalities.226

202.
At the Hearing, the Tribunal sought the views of the Parties' legal experts as to whether Claimant's claims could have been properly adjudicated in Libyan courts had Al Hani sought relief in that forum rather than the Treaty forum. Both testified that, due to poor security conditions, the courts are not regularly operating in Libya since the Revolution of 2011. Their oral evidence was that some judges were killed, others are impeded from going to office or, in most cases, impeded from exercising their judicial function, inter alia, due to lack of personnel employed by courts to provide clerk services.227
203.
At the Tribunal's request, after the Hearing the Parties, especially Claimant, produced multiple reports and reliable information from outside sources on the current security situation and the conditions of the judiciary in Libya. In the Tribunal's understanding, this evidence, some of which is cited above, confirms that the state of the Libyan courts remains very critical.
204.
The Tribunal thus understands, on the basis of the evidence adduced, that the Claimant had no viable mechanisms for settling disputes with the Libyan State entities involved here other than resorting to Treaty arbitration.
205.
In international law, the issue of whether a contractual forum selection clause is "capable of being performed" is not new. By way of illustration, Article 6(1)(d) of the 2005 Hague Convention on Choice of Court Agreements228 provides that an exclusive choice of court agreement may not be enforceable when "for exceptional reasons beyond the control of the parties, the agreement cannot reasonably be performed." The Explanatory Report on the Convention comments on this exception in its Article 6(1)(d), explaining that "one example" of the impossibility to enforce the choice of court clause is the case "where there is a war in the State concerned and its courts are not functioning."229 This is exactly the current situation of the judiciary in Libya, starting from 2011 onwards.
206.
On the same matter, Professor Born comments as follows:

Authorities in some jurisdictions have indicated that forum selection clauses will not be enforced where doing so would be "unreasonable" or "unjust." This potentially broad exception has included claims that the contractual forum would be a substantially less convenient place for legal proceedings, or that the contractually chosen courts cannot grant effective relief or are closed to one party.230

207.
Accordingly, from an international law perspective, the Tribunal concludes that its treaty-based jurisdiction is not barred by the provisions in the several contracts or Respondent’s Administrative Contracts Regulations referring disputes arising from or connected with the contracts to the jurisdiction of the Libyan courts.
208.
The Tribunal concludes that, given the conditions in Libya existing at relevant times in this dispute, Claimant could not pursue its contract-related claims in Libyan courts in safety or with any reasonable expectation of a considered and expeditious outcome. Claimant is entitled to a forum in which to pursue its claims, whether in this Tribunal pursuant to the Treaty (as Claimant would have it) or in Libyan courts (as Respondent contends). The evidence shows that Libyan courts are not a practicable and safe option. The Tribunal therefore decides that, in the circumstances presented, Respondent’s further objection to jurisdiction is denied.

F. Conclusion Concerning Jurisdiction

209.
The Tribunal dismisses Respondent’s objections that the Tribunal does not have jurisdiction under the Treaty.
210.
However, before turning to the merits of the dispute, the Tribunal must also consider whether the present dispute falls within the scope of the Additional Facility Rules. The dispute is between Strabag, a juridical person incorporated under the laws of Austria, i.e., a national of an ICSID Contracting State, and a State Party which is not an ICSID Contracting State, Libya. The Tribunal has concluded that Strabag has made an investment for the purposes of the Treaty and hence for the purposes of Articles 2(a) and 4(2) of the ICSID Additional Facility Rules. The prerequisites for Libya’s consent to ICSID Additional Facility arbitration as set out in Articles 10, 11 and 12 of the Treaty are fulfilled, i.e., consultations were requested prior to the institution of the arbitration proceedings in accordance with Article 11 but there was no solution to the dispute within the prescribed time-period. In accordance with Article 10 of the Treaty, the dispute refers to alleged breaches by Libya of the Treaty, which is said to have caused loss and damage to Claimant’s investment. Claimant’s written consent to ICSID Additional Facility arbitration is found in the Request for Arbitration. The dispute is therefore of a legal nature arising directly out of an investment in accordance with Article 2(a) of the Additional Facility Rules. Access to the Additional Facility was granted by the Secretary-General of ICSID on 20 July 2015. The Tribunal, therefore, concludes that it has jurisdiction under the Treaty to address Claimant’s claims.

VI. CLAIMANT’S TREATY CLAIMS

A. Introduction and Overview

211.

Claimant alleges that Respondent’s conduct violated at least six articles of the Treaty, listed here in the order in which they were introduced in Claimant’s Memorial.231

(1) Article 5(2) - requisition or damage to property in the course of armed conflict;232

(2) Article 3(1)- failure to provide full and constant protection and security;233

(3) Article 8(1) - failure to respect specific obligations entered into by Respondent, contrary to an "umbrella clause;"234

(4) Article 3(1)- failure to accord Fair and Equitable Treatment;235

5 Article 4 - Indirect expropriation, in that Respondent took measures that in the aggregate were "tantamount to expropriation;"236 and

6 Article 3(2) - impairment of Claimant’s management, operation, use and enjoyment of its investment by unreasonable or discriminatory measures.237

212.
The Parties disagree regarding the correct interpretation and application of some of these articles of the Treaty. The Tribunal addresses certain of these disagreements in the following paragraphs; it will provide more detailed comments on others in the context of the facts of particular claims.

B. Article 5(2)- Requisition or Damage to Property in Armed Conflict

213.
Article 5 of the Treaty provides:

(1) An investor of a Contracting Party who has suffered a loss relating to its investment in the territory of the other Contracting Party due to war or to other armed conflict, state of emergency, revolution, insurrection, civil disturbance, or any other similar event, or acts of God or force majeure, in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution, indemnification, compensation or any other settlement, treatment no less favourable than that which it accords to its own investors or to investors of any third state, whichever is most favourable to the investor.

(2) An investor of a Contracting Party who in any of the events referred to in paragraph (1) suffers loss resulting from:

(a) requisitioning of its investment or part thereof by the forces or authorities of the other Contracting Party, or

(b) destruction of its investment or part thereof by the forces or authorities of the other Contracting Party, which was not required by the necessity of the situation, shall in any case be accorded by the latter Contracting Party restitution or compensation which in either case shall be prompt, adequate and effective and, with respect to compensation, shall be in accordance with Article 4(2) and (3).

214.
There appears to be no significant difference between the Parties regarding the interpretation of Article 5(2)(a) as it relates to requisitioning. Instead, the issues involving this provision are factual. Claimant alleges that a significant quantity of property was requisitioned by Libyan Government forces and not subsequently returned. Respondent counters that Claimant has not met its burden of proof to show that this occurred. The Tribunal addresses these issues infra in its assessment of Claimant’s requisition claims.

(1) The Parties’ Positions Regarding the Meaning of "Military Necessity" in Article 5(2) and the Burden of Proof

215.
The Parties disagree regarding application of the other provisions of Article 5(2) of the Treaty, dealing with property allegedly destroyed by Libyan State forces "which was not required by the necessity of the situation." Their principal disagreement involves which of them bears the burden of proving that the destruction of particular property was not required by military necessity.
216.
In Respondent’s view, the plain text of Article 5(2) places the burden on Claimant, as the Party asserting a claim for destruction of property, to prove a key element of its claim. Hence, Claimant must show that the destruction of particular property was not required by military necessity. Respondent refers to the 1990 award in AAPL v. Sri Lanka,238 as showing that this burden - demonstrating the absence of military necessity - falls on Claimant.
217.
As to the meaning of military necessity, Respondent refers to the 1948 U.S. Military Tribunal decision in Von Leeb, where the tribunal allowed a defense of military necessity. In Respondent’s view, Von Leeb shows that a tribunal assessing military necessity must recognize the uncertainties and pressures involved in armed conflict; as the Military Tribunal observed, "the factual determination as to what constitutes military necessity is difficult."239 Thus, for Respondent, military necessity "must be determined based on the totality of the circumstances at the relevant time and place, without the benefit of hindsight."240
218.
Claimant counters that the burden of proving military necessity must fall on Respondent, whose troops allegedly caused damage and which is best able to explain the surrounding circumstances.241 Claimant contends that under accepted principles of evidence, if Respondent claims the military necessity of its troops’ actions, it has the burden of proving that claim. Claimant maintains in this regard that Respondent offered nothing to rebut what Claimant sees as a prima facie case of liability.242 Claimant adds that the result in AAPL has been heavily criticized,243 referring as well to an opinion by Professor Schreuer analyzing the effect of investment treaties in wartime that rejects Respondent’s view.244
219.
In Claimant’s view, Respondent advocates an overbroad and outdated conception of military necessity that does not reflect the evolution of the law of armed conflict since 1948, citing in this regard academic writings and jurisprudence of the International Criminal Tribunal for the Former Yugoslavia emphasizing the general prohibition on targeting civilians and civilian property.245 This jurisprudence, Claimant contends, establishes that the prohibition against attacking civilians and civilian objects may not be derogated from, except in narrow cases where civilian property has been transformed into a military objective that makes an effective contribution to a combatant and where attack would offer a definite military advantage proportionate to the destruction caused.246
220.
These issues of the burden of proof and determination of military necessity are bound up with the facts and the evidence of Claimant’s specific claims for the destruction of property by Respondent’s forces. As examined infra, a key threshold issue in these claims is to determine who caused particular damage, before turning to more nuanced and factually complex questions of military necessity. These matters are assessed infra in connection with the Tribunal’s consideration of Claimant’s specific claims involving property allegedly damaged or destroyed by Libyan Government forces.

(2) Is Article 5 Lex Specialis, Ousting Other Treaty Provisions?

221.
Respondent contends that Article 5 of the Treaty constitutes a lex specialis and, in accordance with the maxim lex specialis derogat legi generali,247 prevails over and supplants other Treaty provisions invoked by Claimant in claiming for injury related to military operations. In Respondent’s view, Article 5 thus renders the Treaty’s provisions dealing with full and constant protection and security, fair and equitable treatment, and expropriation inapplicable with respect to injury of the kind identified by Article 5(1) of the Treaty.248 Thus, in Respondent’s view, "any alleged losses relating to harm suffered by Claimant at the hands of Libyan armed forces during the 2011 Revolution should be examined exclusively under Article 5 of the Treaty."249
222.
In support of its position, Respondent refers to Venezuela Holdings and others v. Venezuela250 and ConocoPhillips and others v. Venezuela,251 both of which held that a treaty article dealing specifically with fiscal measures excluded the operation of a second provision requiring fair and equitable treatment, as to matters covered by the tax article.252 Respondent argues further that the maxim lex specialis derogat legi generali is a supplementary rule of treaty interpretation that should be applied, citing Aust’s Modern Treaty Law and Practice.253
223.
Claimant disputes Respondent's contention, maintaining that it is incorrect and oversimplifies the principle reflected in lex specialis derogat legi generali.254 In Claimant’s view, Article 5(2) of the Treaty sets the standard of compensation for the damages it covers, and can operate consistently with other provisions of the Treaty. Citing the work of the International Law Commission, Claimant maintains that such a clause in a treaty does not preclude claims for injury involving other treaty provisions.255 Claimant adds that Article 5(2) of the Treaty covers only a narrow range of circumstances: property destroyed by Respondent’s armed forces where the destruction was not required by military necessity.

(3) The Tribunal’s Analysis and Decision Regarding Lex Specialis

224.
The Tribunal finds that Article 5 does not have the preclusive effect urged by Respondent. Article 31(1) of the VCLT directs that "[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose." Nothing in the language of Article 5(2) or in other provisions of the Treaty indicates that it operates in the limiting manner urged by Respondent.
225.
In this regard, the Tribunal does not accept the contention that lex specialis derogat legi generali operates as a supplementary rule of interpretation capable of altering the ordinary meaning of the words of Article 5(2). Article 32 of the VCLT gives a limited and precisely defined role to supplementary means of interpretation. They can confirm a meaning that is clear from the text (which presumably is not Respondent’s position here) or they can be considered if plain meaning leaves a text "ambiguous or obscure" or "[l]eads to a result which is manifestly absurd or unreasonable." Respondent has not shown how these conditions exist here, and they do not. Moreover, as Professor Aust observes, such maxims "need to be used with special care. They are no more than aids to interpretation, and might well produce the wrong results if followed slavishly."256
226.
The Tribunal does not find that the cases cited by Respondent provide persuasive support for its interpretation. In ConocoPhillips v. Venezuela, the tribunal’s careful parsing of the relevant treaty language led it to conclude that a provision involving general obligations and a second provision dealing with taxation could not simultaneously operate without generating unacceptable results or rendering the tax provision largely devoid of effect.257 The tribunal in Venezuela Holdings v. Venezuela similarly found that these two provisions could not both apply without rendering portions of the tax article meaningless and duplicating other provisions.258 Thus, the same treaty text was found by both tribunals to contain persuasive indications that the tax article created a separate regime that conflicted with, and therefore operated instead of, the more general treaty regime. Respondent has not shown that Article 5 has corresponding characteristics. In the Tribunal’s view, it does not.
227.
Finally, in considering the plain meaning of the text, the Tribunal recalls that in international treaty practice, States that intend certain provisions to have limited effect or operate to the exclusion of other provisions have the means to make this clear.259 Had the treaty Parties intended Article 5 to operate to the exclusion of other provisions, they could have said so. They did not.
228.
Accordingly, the Tribunal finds that Article 5 of the Treaty does not preclude the possibility of claims based on other provisions of the treaty with respect to the matters that also fall under Article 5 of the Treaty.

C. Article 3(1)- Failure to Provide Full and Constant Protection and Security

229.
Article 3(1) of the Treaty requires each Contracting Party to accord to investments by investors of the other "full and constant protection and security." Claimant contends that Respondent failed to meet this obligation in multiple respects.

(1) The Parties’ Positions

230.
The Parties disagree regarding the standard of conduct required under this provision. As expressed in Claimant’s Memorial, "[t]he obligation to provide full and constant protection and security in accordance with this provision obliges a State to provide physical protection and security to an investment in its territory which was made by an investor of the other contracting party."260 The State must exercise due diligence to this end.261
231.
Claimant denies that a State’s obligation to accord security depends upon the resources available to it, instead maintaining that the due diligence standard "is nothing more nor less than the reasonable measures of prevention which a well-administered government could be expected to exercise under similar circumstances."262 Citing multiple authorities, Claimant concludes, in the words of Professors Dolzer and Schreuer, that "[l]ack of resources to take appropriate action will not serve as an excuse for the host state."263
232.
For its part, Respondent contends that international law affords the State "a particularly wide measure of deference" in relation to the duty of protection,264 and that a "State will only breach its obligations if ‘what was done shows such a degree of negligence, defective administration of justice or bad faith, that the procedure falls below the standards of international law’."265 Respondent makes particular reference to the award in Pantechniki v. Albania,266 where the sole arbitrator found there was no failure to accord full protection and security in a situation of social tumult and lawlessness in a remote area.267 Respondent observes in this regard:

The situation in Libya, in terms of the gravity and the extent of the civil war, was equally bad and perhaps far worse than the situation of the civil unrest in Pantechniki. If the Pantechniki tribunal found the civil disturbance in that case to be so out of control and so severe that the State could not be held liable for breach of[full protection and security], then, a fortiori, given the circumstances in this case, the Tribunal should dismiss Claimant’s allegations of breach of[full protection and security].268

233.
Respondent concludes:

Although the [National Transitional Council] proclaimed itself as the legitimate government of Libya on October 23, 2011, the situation in Libya remained unstable. Various armed groups claiming to be the legitimate government exercised control over different areas of the country since 2011. In such a situation, it was impossible for the Libyan authorities to guarantee full protection and security, as they would normally do in peacetime. The internationally recognized government has not been in continuous direct control of much of the territory where the property in question was located, such as the areas of Tweisha and Tajura.269

(2) The Tribunal’s Analysis and Decision

234.
In assessing the Parties’ competing views, the Tribunal believes that the duty of due diligence cannot be viewed in the abstract and in isolation from the conditions prevailing in Libya during 2011 and for much of the time since. Respondent’s obligation under the Treaty to accord constant protection exists in a setting of weak and uncertain State authority, recurring armed conflict, and widespread breakdown of the law in wide areas of the country. The reality of these circumstances cannot be ignored in assessing Respondent’s obligations. As the Ampal v. Egypt tribunal concluded with respect to a troubled security situation in an adjoining country:

[T]he duty imposed upon the host State by [the standard of full protection and security] is not one of strict liability. Rather the State is obliged to exert due diligence in order to protect a claimant’s investment - a standard that must be assessed according to the particular circumstances in which the damage occurs.270

235.
As Dolzer and Schreuer maintain, the standard of liability under the full protection and security standard requires a host State "to take such measures to protect the foreign investment as are reasonable in the circumstances."271
236.
In light of both Parties’ extensive evidence showing circumstances of widespread conflict, violence and disorder in Libya at relevant times, the Tribunal is compelled to agree with the thrust of Respondent’s assessment: In the circumstances prevailing in Libya during and since the Revolution, it was not reasonably possible for the Libyan authorities to take consistent and effective measures to protect Claimant’s investment.272 The Tribunal has accordingly assessed Claimant’s claims of failure to accord full protection and security in light of what both Parties’ evidence shows regarding the security situation existing at the relevant place and time.

D. Article 8(1)-The Umbrella Clause

237.
Claimant advances substantial claims on the basis of Article 8(1) of the Treaty, the umbrella clause. Interpretation and application of this provision are discussed supra, in connection with Respondent’s objections to the Tribunal’s jurisdiction.

E. Claimant’s Other Treaty Claims

238.
Claimant also asserts that Respondent’s conduct violated Article 3(1) of the Treaty, requiring fair and equitable treatment; Article 3(2) of the Treaty, precluding impairment of investors’ "management, operation, maintenance, use, enjoyment, sale and liquidation" of an investment; and Article 4 of the Treaty, barring indirect expropriation.
239.
These claims drew much less attention by the Parties in their written and oral submissions and involve the same conduct and facts as the Tribunal considers in connection with Claimant’s other claims under the Treaty dealing with full protection under Article 3, compensation for losses under Article 5, and other obligations under Article 8. The Tribunal finds that they overlap or duplicate claims more fully developed by the Parties under these other provisions of the Treaty, without adding clarity to the case or providing bases for additional relief.
240.

As other tribunals have observed, considerations of economy - both jurisprudential and financial - may lead a tribunal to conclude it need not consider in detail issues that are duplicative and do not contribute to a full and proper decision, or that would not alter a decision reached on other grounds.273 This is such a case.

241.
The Tribunal has been guided by these considerations in assessing Claimant’s additional claims under Articles 3(1), 3(2) and (4) of the Treaty. The Tribunal has taken these claims into account, but does not assess that they alter the outcome or the quantum of compensation to be awarded to Claimant.

VII. CURRENCY IN WHICH THIS AWARD IS DENOMINATED - EXCHANGE RATE

242.
Originally, Al Hani's claims were submitted to its employers in Libyan Dinars ("LYD"). However, during the course of the present treaty-based arbitration, in their pleadings and evidence both Parties and their respective quantification experts have interchangeably valued the investor’s claims in LYD, Euros, or both currencies. Neither Party has raised objections to this method, and conversion from LYD to Euros has become a practice widely utilized by both Parties in their pleadings. This was also a practice shared by experts and witnesses at the Hearing. The Tribunal finds this justified in the circumstances of the case.
243.
The Tribunal accordingly denominates each of its quantum determinations and the resulting Award in Euros.
244.
This raises the issue of the exchange rate - or rates - to be applied in assessing a multitude of transactions under multiple contracts over multiple years. The Tribunal notes that both FTI (Claimant’s quantification expert) and Blackrock (Respondent’s quantification expert) have used very similar, if not the same rates of exchange for purposes of developing the Euro-denominated figures and "figures-as-figures" comparisons presented to the Tribunal at the Hearing. The Tribunal accepts this as an appropriate and reasonable approach, and has been guided by the evidence presented by the Parties’ respective experts in this regard.

VIII. CLAIMANT’S SPECIFIC CLAIMS FOR LOSS AND INJURY

245.
Claimant presented a complex multi-part damages claim, with numerous separate sub-claims for loss of or damage to particular assets, various forms of nonpayment under various contracts, and for other injuries for which Respondent is said to be liable. For purposes of its analysis of these claims, Claimant’s quantification experts from FTI grouped them into twelve categories. Respondent’s experts from Blackrock utilized these same categories in their responses, an approach that the Tribunal has found to greatly assist its work. The Tribunal will utilize these categories, which have been accepted by both Parties’ experts, as the framework for its analysis. The categories, as numbered by both Parties’ experts, are:

1.a Equipment requisitioned in 2011;

1.b Equipment destroyed/lost in 2011;

1.c Equipment damage repair;

1.d Site facilities and materials damaged;

2. Equipment removed from Tweisha in 2014;

3. Amounts owed to Al Hani under payment certificates;

4. Amounts owed to Al Hani for additional work done;

5. Retention amounts due to be repaid to Al Hani;

6.1 Equipment -immobilized;

6.2 Evacuation;

6.3 Stand-by of staff; and

6.4 Financial charges.

246.
The four elements of Claim 1 (items 1.a - 1.d) are related to Article 5 of the Treaty, addressing "Compensation for Losses" in times of armed conflict, emergency and the like. Claim 2 is primarily related to Respondent’s obligation to provide "full and constant protection and security" under Article 3(1) of the Treaty. Claims 3, 4 and 5 are based on the provisions of Al Hani’s contracts, and relate to Article 8’s umbrella clause. Claims 6.1-6.4 involve losses said to stem from the period of disorder and conflict in 2011. These are again based on provisions in Al Hani’s contracts dealing with allocation of risk in times of disturbance.

A. Claim 1.a. Equipment Requisitioned in 2011

247.
This claim is based on Article 5(2) of the Treaty, which provides:

(1) An investor of a Contracting Party who has suffered a loss relating to its investment in the territory of the other Contracting Party due to war or to other armed conflict, state of emergency, revolution, insurrection, civil disturbance, or any other similar event, or acts of God or force majeure, in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution, indemnification, compensation or any other settlement, treatment no less favourable than that which it accords to its own investors or to investors of any third state, whichever is most favourable to the investor.

(2) An investor of a Contracting Party who in any of the events referred to in paragraph (1) suffers loss resulting from:

(a) requisitioning of its investment or part thereof by the forces or authorities of the other Contracting Party, or

(b) destruction of its investment or part thereof by the forces or authorities of the other Contracting Party, which was not required by the necessity of the situation, shall in any case be accorded by the latter Contracting Party restitution or compensation which in either case shall be prompt, adequate and effective and, with respect to compensation, shall be in accordance with Article 4(2) and (3).

248.
Articles 4(2) and 4(3) of the Treaty then specify the requirements for compensation in cases of expropriation, requiring that such compensation shall reflect fair market value, be paid without delay, and include interest at a commercial rate.

(1) Claimant’s Position

249.

Claimant points to a substantial body of evidence showing that numerous vehicles, generators, fuel tanks and other valuable Al Hani equipment was requisitioned by personnel of Libya's 32nd Reinforced Brigade, an elite security unit commanded by Col. Gaddafi's youngest son, Khamis Gaddafi. At the Hearing, Claimant's valuation experts from FTI assessed the value of Al Hani's property that was requisitioned and not recovered to be €6,134,891.274

250.
While Al Hani’s expatriate personnel left the country in March 2011, locally engaged staff remained. They frequently recorded serial numbers and other identifying information on trucks and other major equipment being removed by Libyan Government forces. They also secured multiple documents signed by officers of the 32nd Brigade evidencing requisitions on particular dates. Claimant also submitted reports of Interior Ministry personnel who were engaged by Al Hani to provide perimeter security but were not able to prevent officers and personnel of the 32nd Brigade from removing Al Hani’s property.
251.
Claimant introduced 30 documents signed by 32nd Brigade officers evidencing the requisition of numerous vehicles, generators, and other equipment.275 In addition, a December 2011 letter to Al Hani from Libya’s Ministry of the Interior/Security Board of Utilities and Facilities (which provided security guards for Al Hani’s Tweisha yard under contract with Al Hani) describes incidents involving equipment being removed from the yard by 32nd Brigade personnel over the objections of the security guards. The letter records, inter alia, that "our members tried to prevent the armed forces getting the equipment out, but under the threat of weapons they have seized some equipment," that "the seizure of the equipment, Tires, Tanks and other articles has been repeated," and that "a group of soldiers from Brigade no. 32 leaded [sic] by Captain Mohamed Yousif stayed and accommodated at the Mob. Area and they were seizing equipment and material daily."276
252.
Reports from the local branch of the "General People’s Committee for Public Security/ Facility and Establishment Security Authority" responsible for security at the Tweisha site also describing requisitions of equipment277 add further detail. An 11 April 2011 telegram reports on two visits to the Tweisha site by Major Elkhairiat and soldiers from the 32nd Reinforced Brigade during which they "withdrew" numerous Al Hani vehicles. The report includes a document signed by Major Elkhairiat and another listing serial and license numbers of equipment taken, including 13 ACTROS Mercedes trucks and a low trailer. A second similar document dated 4 April 2011 lists license and serial numbers of 20 pickup trucks that were also taken.278 A similar report from the Interior Ministry security personnel at Tweisha dated 26 July 2011 reports additional equipment removed by soldiers of the 32nd Reinforced Brigade, this time including several generators, fuel tanks, and two Mitsubishi Fuso Canters.279
253.
Al Hani’s Libyan Procurement and Logistics Manager remained at the Tweisha site after the Strabag expatriates left. His witness statement describes multiple visits by 32nd Brigade soldiers to take vehicles and equipment and the efforts of Al Hani staff to get Brigade officers to sign and stamp reports identifying equipment being removed: "[B]y the end of July or the start of August, the 32nd Reinforced Brigade had taken everything they wanted from the site."280
254.
Although communications between Al Hani’s local personnel and expatriate personnel in Europe were difficult, local personnel were able to pass much information to Strabag personnel regarding lost and stolen equipment. A report prepared for a July 2011 Strabag management meeting based on reports from Strabag’s on-site staff refers to multiple removals of equipment from Al Hani sites by Libyan Army personnel. The document lists equipment known to be lost or stolen as of that time, including 24 trucks, 31 prime movers, 6 buses, and 31 Toyota pickups.281
255.
Claimant contends that Respondent's arguments disputing its evidence of requisitions were either wrong, or involved formalistic nitpicking.282 Claimant also noted that Respondent does not address the additional evidence showing the occurrence and extent of requisitions.

(2) Respondent’s Position

256.

Respondent’s defense to this claim primarily involves attacks on the credibility of the documents said to have been signed by 32nd Brigade officers and to show requisitions. Respondent denies the probative value of these documents, disputing the authority or identity of purported signers, the lack of official seals, and otherwise questioning the weight to be given to them.283 Respondent thus argues, for example:

Valid requisitioning reports of Brigade 32 should be on the brigade’s official form, signed and stamped by an authorized officer, and contain the identification number of the requisitioning officer. However, only one of the twenty requisitioning reports introduced by Claimant is on the official form; even this report does not have an official stamp or the identification number of the officer who allegedly signed it.284

(3) The Tribunal’s Analysis and Decision

257.
The Tribunal finds that the evidence submitted by Claimant in support of this claim is credible and sufficient to show that a significant amount of Al Hani’s property was lost to requisition by regular Libyan armed forced during the events of 2011. The evidence regarding the value of the requisitioned equipment is also detailed and is largely accepted by both Parties’ valuation experts.
258.
The starting point for assessing the extent of loss is an Excel spreadsheet constructed by Al Hani’s equipment manager, Mr. Penkhues, prior to the Revolution. This spreadsheet was prepared in the ordinary course of business for readily apparent business reasons. It contained a detailed listing of all of Al Hani’s plant, machinery, and equipment in Libya, including information such as serial numbers, acquisition and transportation costs, and depreciation.285 Following the Revolution, Mr. Penkhues returned to Libya to inventory Al Hani’s assets. He then updated the spreadsheet to reflect equipment remaining on hand or that was recovered by Al Hani personnel.
259.
Respondent’s Post-Hearing Brief contends that the Penkhues spreadsheet is based on uncorroborated hearsay evidence and cannot be relied upon.286 The Tribunal is not persuaded. The spreadsheet was prepared by a knowledgeable and experienced senior staff member, in the ordinary course of business, for purposes of determining Al Hani’s position in the aftermath of the Revolution. The Tribunal accepts it as a proper basis for assessing the value of Al Hani’s property that was requisitioned and not recovered. The Tribunal notes in this regard that Respondent’s quantification expert, Mr. Osbaldeston, accepted that he had no reason to question the accuracy of Mr. Penkhues’s inventory.287
260.
Proceeding from Mr. Penkhues’s spreadsheet, Claimant’s quantification experts from FTI assessed the net book value of 119 items of equipment requisitioned and not subsequently recovered, adjusted for depreciation and inflation, to be €6,134,891 (as updated at the Hearing).288
261.
In his Second Report, Mr. Osbaldeston of Blackrock assesses the value of the requisitioned property to be €5,791,932. Blackrock’s assessment is thus €342,959 below FTI’s final figure.289 Thus, the conclusions of the two Parties’ valuation experts are substantially similar.
262.
However, there is also force in Claimant’s argument that Respondent’s lower number is notjustified. The difference between the two largely reflects Blackrock’s assessment ofa lower depreciated net book value. Mr. Osbaldeston’s Second Report was not entirely clear to the Tribunal in this respect, but Claimant’s Post-Hearing Brief attributes the difference between the experts to the fact that Mr. Osbaldeston did not account for all "costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management as required by International Accounting Standard 16."290
263.
Considering all above arguments and counterarguments and balancing the available evidence, the Tribunal awards the value of requisitioned equipment as assessed by Blackrock, plus approximately half of the difference between Blackrock’s and FTI’s assessments. The Tribunal accordingly concludes that, under the present head of claim under Article 5(2)(a) of the Treaty for uncompensated requisitioning, Respondent owes €5,963,000.

B. Claim Lb. Equipment Destroyed/ Lost in 2011

264.
The previous section addressed Claimant’s claim for property requisitioned by Respondent’s armed forces. Claimant also seeks significant sums for other assets that it contends were "taken or destroyed for reasons attributable to Libya"291 on the basis of Article 5(2)(b) of the Treaty as quoted in paragraph 247.292
265.
This Article of the Treaty provides that an investor who suffers losses due to events such as those that occurred in Libya in 2011 involving:

(2)(b) destruction of its investment or part thereof by the forces or authorities of the other Contracting Party, which was not required by the necessity of the situation, shall in any case be accorded by the latter Contracting Party restitution or compensation which in either case shall be prompt, adequate and effective and, with respect to compensation, shall be in accordance with Article 4(2) and (3).

(1) Claimant’s Position

266.
Claimant’s Memorial summarizes this claim:

292. Article 5(2)(b) is... applicable in this case... during the disturbances and violence of 2011, not only did the Respondent’s armed forces requisition property belonging to Al Hani (some of which is recorded in contemporaneous records), but Libyan armed forces also damaged and destroyed property which constituted part of Strabag’s investment in Libya.

293. Article 5(2)(b), unlike Article 5(2)(a), contains a qualification that the provision applies to destruction of an investment "which was not required by the necessity of the situation." The Claimant submits that the facts and circumstances of the destruction and damage to Al Hani’s property by the Respondent’s armed forces (including acts of vandalism and intentional damage inflicted by the armed forces when they abandoned the Al Hani sites) are such that the Respondent cannot credibly maintain that such destruction and damage was required by the necessity of the situation.293

267.
Claimant seeks €10,560,869, primarily for lost vehicles and other portable property. Claimant’s quantum experts’ reports do not address whether Respondent’s forces were in fact responsible for particular damage. FTI’s First Report makes clear that their role was limited to assessing the fair market value of assets "which, we are instructed were requisitioned by the Libyan military forces, or otherwise taken or destroyed for reasons attributable to Libya, in 2011."294
268.
Mr. Osbaldeston of Blackrock largely accepts Claimant’s assessment of the value of this lost or damaged property, but again does not address the issue of causation. Blackrock finds that the value of the lost or destroyed property is €10,291,610, a difference of €262,959 from the total found by FTI. While this is not an inconsequential amount, the difference between the two sets of experts arises in the context of a claim for more than € 10.5 million.

(2) Respondent’s Position

269.

Claimant presents evidence in support of this claim, but - not surprisingly, given the nature of the events involved - this does not include eyewitness evidence of the circumstances resulting in particular loss or damage. Respondent does not offer evidence addressing specific locations or events in rebuttal, arguing instead that Claimant failed to meet its burden of proof In its Post-Hearing Brief, Respondent expands its argument to contend that it has shown that Libya’s forces did not cause any of the damage and that it was all caused by NATO, looters, Al Hani employees, or other actors.295

(3) The Tribunal’s Analysis and Decision

270.
A claimant can recover under Article 5(2)(b) of the Treaty only for losses from "destruction of its investment or part thereof by the forces or authorities of the other Contracting Party, which was not required by the necessity of the situation." Thus, two conditions must be met. First, the claimant must demonstrate that its property was destroyed "by the forces or authorities" of the respondent State. Second, it must be shown that such destruction "was not required by the necessity of the situation." Article 5(2)(b) of the Treaty thus presents the challenge of establishing responsibility for wartime damage by forces of the State party to the investor’s property in violent and often chaotic circumstances.
271.
It is Claimant’s burden to establish sufficiently the basis of its claim for compensation. Claimant’s starting point in this regard is again the evidence of Mr. Penkhues and his spreadsheet. In the spreadsheet, Mr. Penkhues allocated various types of property loss and damage to various causes. In his First Witness Statement, Mr. Penkhues explains that he created categories on the final version of his spreadsheet for:

"[M]ilitary force", where it was apparent that the asset had been destroyed or damaged by the military during the conflict in 2011; [and] (c) "other", where the asset was either stolen, destroyed or damaged during the course of 2011, including during the period when the sites were occupied by the military or when the military abandoned the sites.296

272.
Mr. Penkhues’s First Witness Statement explains how he assigned particular lost or damaged property to particular classifications. He states that in doing so "I relied on the updates received from our Libyan colleagues during the revolution and my site inspections."297 The spreadsheet thus does not reflect first-hand knowledge on his part.
273.
Mr. Penkhues’s statement then describes relevant categories that he used in a refined version of the spreadsheet:

c. "Stolen": Some of our machinery and equipment had gone missing at the time the military had occupied our sites or sometime after the soldiers had left. If I did not have a requisition report from Mr. Kadri or one of our other employees, I listed the item as "stolen".

d. "Military force": If it was clear that the item in question had been damaged during fighting (for example, it had bullet holes in it or had been damaged by tanks), I included "military force" in this column.

e. "Vandalism": Some of equipment and machinery was also vandalised. Sometimes the graffiti was the name of the unit that had occupied our sites, so it was obvious that this had been done by soldiers.

274.
While they may have been appropriate for the purposes for which they were created, Mr. Penkhues’s categories provide limited assistance regarding the threshold question of Respondent’s responsibility under Article 5(2) of the Treaty. The spreadsheet does not separately identify damage attributable to Respondent’s "forces or authorities," as opposed to e.g. rebels, NATO air strikes, or other causes. Claimant’s valuation experts from FTI analyze and generally endorse the valuations Mr. Penkhues places on lost or damaged equipment, but their reports do not address this key question of the likely cause of particular damage.298
275.
A second source of evidence regarding the cause of particular damage is a report prepared for the projects’ insurers by Mr. Adouni, a loss surveyor from the Tunisian branch of Sadaoui Surveyors Group.299 This report (the "Sadaoui Report") was issued in June 2012.300 In preparing his report, Mr. Adouni, who was accompanied by Mr. Penkhues, visited Al Hani’s facilities and camps at multiple locations in Libya and physically inspected and photographed the sites visited. His assessments of the monetary value of lost and damaged property are in line with Mr. Penkhues’s.
276.
Respondent’s Post-Hearing Brief dismisses the Sadaoui Report as "unreliable."301 The Tribunal does not agree. The Report’s analysis and photographs provide relevant evidence bearing on Claimant’s losses relevant to this claim. The Report was prepared by a credentialed and apparently thorough and experienced loss surveyor, working for an established surveyors firm,302 and acting on behalf of major insurers with an interest in a reliable assessment of Al Hani’s damages. It thus offers an objective outsider’s assessment.
277.
Mr. Adouni’s descriptions of what he saw and learned indicate the frequent difficulty of establishing responsibility for particular loss of or damage to Al Hani's property. In some instances, damage to property cannot clearly be linked to Government forces. For example, at the Ras al Afa Quarry site southwest of Tripoli, the Report observes that "the site was left without security guards, therefore it was exposed to the attacks of the armed robbers [w]ho thieved the portable tools and equipment and damaged the heavy machineries."303
278.
However, at three of Al Hani’s major sites, the Sadaoui Report describes damage to equipment that Mr. Adouni connected to the presence and actions of government troops.

A. Equipment Damage and Losses at the Tweisha Site

279.
The Tweisha site, in the vicinity of Tripoli’s international airport, was Al Hani’s main mobilization area, workshop, office, and warehouse. Many vehicles and a large amount of other equipment was assembled there in February 2011; the Sadaoui Report includes photographs taken on 21 February 2011 showing numerous buses, heavy trucks, and other pieces of heavy construction equipment at the site.
280.
The Report cites multiple causes of damage to Respondent’s equipment at the Tweisha site, including requisitions by military forces and post-Revolutionary looting by unidentified "armed people." However, it also cites other damage inflicted by military forces of Respondent in circumstances not involving combat, and therefore not posing the question of military necessity. According to the Report:

[W]e can attribute the damages and losses affecting the [Tweisha] site and its equipment to the following causes:

The occupation of the site by the military troop "Reinforced Brigade 32" belonging to Gaddafi regime, starting from the mid of April 2011 till the beginning of September 2011. According to the Annex VI (last paragraph), the military troop seized and used the equipment of the site either against or without receipts on daily basis.

The fierce exploitation of the site including equipment, offices and camps by the military troop during the war period (about 5 months) which resulted in the damage of the equipment and site furniture.304

B. Equipment Damage and Losses at the Tajura Site

281.
The Sadaoui Report again identifies damage from multiple causes at Al Hani's Tajura site east of Tripoli, the location of Al Hani’s largest infrastructure project, where there was significant damage caused by actors other than Government forces. The Report thus records that on 21-23 February 2011, the Tajura facilities "were looted by rioters and robbers, benefitting from the disturbance and perturbation which affected the regime at the beginning of unrests."305 These events were described at the Hearing by Mr. Knaack, who was present at the time of these events and confirmed that the individuals he saw entering and looting the camp were civilians.306
282.
Other damage at the Tajura site was attributed to NATO bombing, presumably directed at a nearby military camp. The Sadaoui Report identifies "[b]reaking of glasses caused by NATO bombs splinters" and "[d]amages of asphalt plant caused by bomb splinters." Neither the looting and burning of the Tajura camp, or damage due to NATO bombing can be attributed to Respondent under Article 5(2) of the Treaty.
283.
However, the Sadaoui Report also identifies other damage to Al Hani's equipment from the presence of military forces supporting the regime. Government forces occupied Al Hani’s facilities for several months beginning in April 2011.307 According to the Report, this resulted in "[d]amages of equipment caused by the fierce and unskilled exploitation of military troop; such damages were ascertained on the heavy equipment (bulldozers, trucks, forklifts...) and light equipment and furniture like cars, spare parts, generators, tires, computers and air-conditioners..."308

C. Equipment Damage and Losses at the Tawarga ((Misurata) Mobilization Area

284.
The Misurata area was the scene of intense fighting between Government and rebel forces and of NATO air attacks on Government forces. These events resulted in damage at Al Hani’s mobilization site at Tawarga, which supported the Misurata Road project. The Sadaoui Report states that Government forces occupied Al Hani’s site "because of its strategic location" and its "logistics facilities supply." The Sadaoui Report continues that "during the war, this site was a target to the NATO bombardment and to rebels attacks." As to the "[c]auses of damages and losses," it concludes:

According to our inspection, we evidenced that the damages which affected the site were essentially caused by NATO bombardment and rebels attacks. The exploded work shop, containers, camps, vehicles, asphalt tanks, asphalt plant and the bullets and their holes all over the site affirming the warriors attacks.309

285.
Claimant’s Reply acknowledges that Al Hani’s property at Tajura and the Tawarga/Misurata sites was damaged by NATO bombardment. Claimant maintains, however, that "the relevant point is that the Libyan armed forces had first occupied, and expropriated, this site following which Al Hani’s site would have become a legitimate military target."310 Claimant’s characterization of the site as a legitimate military target seems appropriate, but it does not assist Claimant’s claim under Article 5(2) of the Treaty. In light of the Sadaoui Report, the Tawarga site’s location in an area of heavy fighting between rebel and Government forces, and the presence of NATO aerial bombardment, the

Tribunal has no basis to attribute any of the damage there to the actions of Government forces, as opposed to rebel or NATO forces, or to conclude that any damage was not occasioned by military necessity.

286.
Additional evidence in the record indicates Government forces’ responsibility for some of the loss of or damage to Al Hani’s property. This evidence appears reliable, as it reflects information contemporaneously gathered by responsible Al Hani employees in the course ofbusiness and not in anticipation oflitigation. For example:

- Mr. Napowanez states that

[a]lthough there were frequent communication difficulties between March and September 2011, our staff managed to provide us with updates as to what was happening on the ground in Libya. For example, they informed us that some of our sites were occupied by Libyan armed forces and that Libyan soldiers confiscated vehicles and other property from the sites.311

- Mr. Penkhues states that

Mr. Kadri had reported to us that the Tweisha camp and office had been taken over by the Libyan military and that the military had on several occasions confiscated several pieces ofmachinery.312

- Mr. Penkhues states further that after leaving Libya in February 2011, he received updates from time to time on the situation from our employees on the ground...When [these employees] first called to tell us that the military had come to take away our equipment, we did not know what to do. We realised quickly that we needed some record of what was being confiscated by the military, so when the military came again, [our employees] prepared lists of the equipment that was taken away and, if possible, got a member of the military to sign the list. [Our employees] would then email the lists to me if or when they could. We received emails containing these reports, including on 5 April 2011, and 27 April 2011... During this time, I also received updates by phone from [our employees], who would tell me what equipment had been taken by the military. I recorded this information in my asset inventory.313

- The witness statement of an Al Hani employee describes his first-hand observations of military personnel from the 32nd Brigade removing equipment from the Tweisha site over the course of several months.314

- An e-mail to Mr. Penkhues from an employee in Libya in April 2011 lists tires "taken by the military" from Al Hani's site in Sirte.315

287.
As noted supra, the Parties' experts are substantially in agreement regarding the total value of Al Hani's equipment lost during the Revolution. However, as Respondent contends, and as the Sadaoui Report confirms, responsibility for particular damage is often not clear. In the chaotic conditions of the Revolution, Al Hani's vehicles and equipment were taken, destroyed, or damaged by multiple actors. Losses sometimes involved Government forces in non-combat situations in circumstances that fell under Article 5(2) of the Treaty, but there were also losses attributable to looters, rebels, and NATO bombing.
288.
Respondent advances two principal lines of argument in light of this situation. Respondent first contends, based on AAPL v. Sri Lanka316 construing a treaty's war damages clause, that in situations involving combat damage, the claimant must establish both that damage was inflicted by government forces and that their actions were not required by military necessity.317 In Respondent's submission, Claimant has failed to meet this evidentiary burden; given the weak and ambiguous evidence, there can be no recovery.
289.
This argument does not prevail. The Tribunal finds that there is sufficient evidence that some of Al Hani's vehicles and equipment were damaged or destroyed by Government forces in circumstances not involving combat, so that the issue of military necessity does not arise. The difficulty lies in determining how much of the claimed damage is attributable to Government forces, as opposed to rebels, looters, NATO bombing, or other possible causes.
290.
At the Hearing and in its Post-Hearing Brief, Respondent developed a further argument to the effect that, correctly analyzed, the data assembled by Mr. Penkhues shows that the amount of loss and damage attributable to Government forces is appreciably less than the amount claimed, and involves only 113 pieces of equipment with a value of LYD5,223 million.318 Respondent arrived at this conclusion by applying filters to Mr. Penkhues's data that Respondent understands to identify the equipment damaged by Government forces.
291.
In its Post-Hearing Brief, Claimant disputes Respondent's choices of filters to exclude large amounts of lost or damaged equipment, objecting, inter alia, that Respondent "cannot eliminate particular items, for example because items classified as 'vandalised' in the inventory lacked 'bullet holes,' or because items classified as damaged by 'Military Force' did not indicate the party exercising military force."319
292.
The Tribunal thus faces a difficulty. Claimant has established to a sufficient degree that a substantial amount of Al Hani's equipment was destroyed or damaged by the actions of Libya's armed forces. This included, not least, equipment that was damaged or destroyed by soldiers of the 32nd Brigade while its units occupied Al Hani's facilities under conditions not involving impending or actual combat and thus not raising the issue of military necessity. However, the evidence also shows that much of Al Hani's equipment was lost to looters, disgruntled employees, rebels, and even NATO air bombardment.
293.
Thus, whatever Respondent's liability may be for property loss attributable to the regime’s forces or authorities under Article 5(2) of the Treaty, it is necessarily less than the €10,560,869 sought by Claimant for all of its lost equipment. The Tribunal also considers the figure of LYD5,223 million introduced by Respondent very late in the proceedings, based on its selective application of filters on Mr. Penkhues’s spreadsheet data, to be unrealistically low.
294.
Accordingly, the Tribunal must consider the principles of evidence applicable in this situation. As a starting point, the Tribunal observes that under Article 41(1) of the ICSID Arbitration (Additional Facility) Rules, it "shall be the judge of the admissibility of any evidence adduced and of its probative value." In its 20 July 2018 letter to the Parties following the Hearing, the Tribunal asked that they further address "[u]nder the applicable law, what power does the Judge have to determine compensation if the evidence does not admit of precise assessment?" 1n its Post-Hearing Brief, Claimant responds:

The Parties agree that the relevant law for the assessment of compensation in this case is public international law, which clearly provides the Tribunal with such power. Similarly, as a matter of Libyan law (whether in the context of assessing compensation for exceptional circumstances or more generally), the Supreme Court has confirmed that "proving the occurrence of damage or its nonexistence and assessing the compensation therefor is a factual matter, that is at the discretion of the matter judge."320

295.

Respondent’s Post-Hearing Brief offers a less detailed conclusion:

Pursuant to the Treaty and the Contracts, Claimant’s contractual claims are subject to international law and Libyan law. Under both, Claimant has the burden of proving the legal and factual bases for its claims and the proper quantum of damages. Claimant has failed to carry this burden (footnotes omitted).321

296.
In the Tribunal's view, in the circumstances in Libya in 2011, international law does not require an accountant's precision in determining damages. Instead, as the Crystallex v. Venezuela tribunal observed:

[A]n impossibility or even a considerable difficulty that would make it unconscionable to prove the amount (rather than the existence) of damages with absolute precision does not bar their recovery altogether. Arbitral tribunals have been prepared to award compensation on the basis of a reasonable approximation of the loss, where they felt confident about the fact of the loss itself.322

297.
In addition, in the Sapphire v. Iran award the tribunal held:

It is not necessary to prove the exact damage suffered in order to award damages. On the contrary, when such proof[of exact damage] is impossible, particularly as a result of the behaviour of the author of the damage it is enough for the judge to be able to admit with sufficient probability the existence and extent of the damage.323

D. The Tribunal’s Decision

298.
The Tribunal finds the derivation of Respondent's figure of LYD5.22 million to be difficult to understand. The evidence shows that Claimant has certainly incurred significant damages covered by Article 5 of the Treaty. The Tribunal recalls, however, that at the time of the 2011 events, the situation in Libya was chaotic, dangerous and unsettled. This is a situation in which international law does not require precise proof of the quantum of the loss, provided the occurrence and significance of the loss are established. Furthermore, when the amount of damages is impossible to prove with precision, as reflected in the cases, the predominantly accepted rule does not lead to a draconian rejection of the overall claim. On the contrary, partial recovery can be allowed to the extent that a tribunal deems proper and fair. The Tribunal observes in this regard that a portion of the loss at issue in this claim was inflicted by rebel or NATO forces; another portion involved losses due to looting by civilians and thefts by Al Hani's own employees; and a third portion resulted from actions by Libyan military personnel in non-combat situation. The Tribunal accordingly determines that approximately one-third of the claimed losses are attributable to the actions by State forces not involving military necessity, actions for which Respondent is liable pursuant to Article 5(2)(b) of the Treaty. The Tribunal accordingly awards in respect of this claim approximately one-third of the amount claimed (namely €10,560,869), i.e. €3,520,000.

C. Claim 1.c. Equipment Damage Repair under Article 5 of the Treaty

299.
Claimant also seeks €1,705,750 pursuant to Article 5(2)(b) of the Treaty for the repair of damage to assets for which Respondent is alleged to be responsible. The claim does not reflect costs actually incurred. Instead, it reflects Mr. Penkhues’s estimate of what repairs would cost if they were carried out. As explained in Claimant’s Memorial:

In respect of the assets which Mr. Penkhues recorded in his inventory as damaged (i.e., which had some residual value), Mr. Penkhues determined the cost of repair of these assets by reference to the replacement parts and labour costs required to repair the items in question. FTI have relied on Mr. Penkhues’s assessment of the cost of repair of these items to calculate the value of the loss to Al Hani caused by damage to these assets by the Respondent’s armed forces or for which the Respondent is otherwise responsible at EUR 1,705,750 as of February 2011.324

300.
Thus, Claimant does not connect these purported losses to actions by Libyan armed forces or otherwise demonstrate Libya’s liability for them under the Treaty.
301.
In his First Report, Respondent’s quantification expert Mr. Osbaldeston of Blackrock points to the lack of clear evidence regarding the cause of this damage, and concludes that he could not assess the quantum of this claim.325 In their Second Report, FTI’s experts do not address the attribution point, but do confirm that the claim is "based on the witness statement of Mr. Penkhues and is not independently verified by FTI," and that "the repairs to the damaged equipment have not been made."326
302.
In his Second Report, Mr. Osbaldeston also notes that the repairs have not actually been carried out, and raises a variety of other objections. He notes, inter alia, the risk of duplication between this and other claims, notably Claimant’s large claim for equipment removed from the Tweisha yard in 2014 (see infra Section VIII. E.); that the claim includes €248,500 for repairs to an asphalt plant in Misurata that was sold; and the lack of any substantiation for Mr. Penkhues’s estimates of repair costs.327

(1) The Tribunal’s Decision

303.
This is a claim exclusively based on Mr. Penkhues’s estimates of the cost of hypothetical repairs that were never made, for damage that is not shown to be the responsibility of Libya’s armed forces or for which Respondent would otherwise be responsible under Article 5(2)(b) the Treaty.
304.
Claim 1.c., for equipment damage repair, is dismissed for failure to establish both proof of loss and Respondent’s responsibility under the Treaty.

D. Claim 1.d. Site Facilities and Materials Damaged

305.
This claim is again based on Article 5(2)(b) of the Treaty and alleges damage to or destruction of Al Hani’s construction sites, vehicles, equipment and material by Libyan Government forces.

(1) The Parties’ Positions

306.
As ultimately presented by Claimant's quantification experts from FTI at the Hearing, Claimant seeks €2,573,186 for such loss or damage for which Claimant alleges Respondent bears responsibility. The largest component of the claim is €1,439,660 for lost materials and spares, roughly 56% of the total. The second largest component is €924,097 for replacement furniture and equipment (about 36%). Damage to buildings is claimed to be €200,305 (roughly 8%).328
307.
Mr. Osbaldeston, Respondent's quantification expert from Blackrock, assesses that €1,697,343 of the claimed losses were sufficiently documented. The principal difference (€875,843) involves Blackrock's valuation of lost spares at Tweisha and the Ras Al Lafah Quarry to be zero.329 As explained by FTI at the Hearing, this difference:

[R]eally has to do with one major issue, and that is there's some Tweisha and quarry yards spares, mostly Tweisha; there's spares there where Mr. Obaldeston has zeroed that estimate out for those spares, and the estimate carried by Al Hani at the time of 50 percent of the estimated value was that difference of about - it's about EUR 826,000 of the total difference.
So, the Tribunal, of course, needs to assess whether the estimate done by the Al Hani folks is more appropriate than Blackrock's assessment of zero.330

308.
Putting to the side the experts' disagreement regarding the value of missing spares, the Tribunal notes a more fundamental difficulty. The evidence previously reviewed in connection with Claimant's Claim 1.b for lost equipment shows that Al Hani lost equipment to a variety of causes, not only Respondent's armed forces. The same is true of this claim. The evidence establishes that some of the claimed damage was caused by Libyan armed forces in non-combat circumstances not posing issues of military necessity, and so is entitled to compensation under the Treaty. The evidence also shows, however, that damage was caused by other actors as well.
309.
There clearly was relevant loss and damage caused by members of Libya’s armed forces occupying Al Hani’s sites in non-combat situations. The Sadaoui Report describes such loss and damage at the Tweisha site by members of Libya’s armed forces, particularly the 32nd Reinforced Brigade. The Sadaoui Report observes that the Brigade’s troops occupied the site "to protect themselves from the bombardment of NATO. The offices, living containers, equipment and tools including the petrol tanks were used by the army, as well as the whole site and the equipment were treated like a military base and as own properties of the military armies."331 In addition to the requisitions and takings of vehicles and equipment addressed supra, the Report refers to "[t]he fierce exploitation of the site including equipment, offices and camps by the military troop during the war period (about 5 months) which resulted in the damage of the equipment and site furniture." The Report cites "[d]amages of equipment caused by the fierce and unskilled exploitation of military troop; such damages were ascertained on the heavy equipment (bulldozers, trucks, forklifts...) and light equipment and furniture like cars, spare parts, generators, tires, computers and air-conditioners..."332
310.
However, the same report also attributes other property losses to other actors. It attributes losses at the Ras Al Lafah quarry to a lack of security leading to "attacks of the armed robbers," not to actions by Respondent’s armed forces.333 As to the Tweisha yard, the Sadaoui Report observes that "[t]he absence of total security and the chaotic situation of the area which reined after the defeat of the military troop (Reinforced Brigade 32) and the arrival of the rebels groups led to the exposure of the site and its remaining equipment to waves of vandalism by armed people, who stole all valuable equipment, tools, materials... etc."334
311.
The Report also indicates that some of the damage inflicted on Al Hani’s facilities occurred late in the hostilities, as the 32nd Reinforced Brigade abandoned the Tweisha site. It cites in this regard:

- Intentional deterioration of the site and its equipment by the military troop during their withdrawal; such deterioration had been noticed on:

- Living camps, canteens and offices (damaging roofs, doors, windows, sanitary tools and cold stores...)

- Tearing tires by using bayonets, and breaking doors and windows of trucks.335

312.
Respondent contends that this last type of damage, and perhaps other types as well, were justified as measures taken for reasons of military necessity, in order to deny use of Al Hani’s facilities to rebel forces:

It is clear that during 2011, it was militarily necessary for the Libyan army to destroy certain property to prevent it from falling into the hands of its opponents. By the summer of 2011... rebel forces had advanced on Tripoli through Tajura. In such circumstances, it was a military necessity for the Libyan army to destroy equipment that could fall into the hands of the rebels.336

313.
Respondent advances no evidence in support of this claim of military necessity, instead maintaining that it is Claimant’s burden under the Treaty to prove the negative, i.e., that Respondent’s forces’ actions damaging Al Hani’s property were not compelled by military necessity. In Respondent’s view, this is required by the ordinary meaning of the text of Article 5(2)(b) of the Treaty, which it understands to require Claimant to prove that destruction was not caused by "the necessity of the situation."337 Respondent cites in support of this interpretation of the treaty the award in AAPL v. Sri Lanka.338
314.
Claimant responds that military necessity is an affirmative defense that must be proved by the party asserting it, which it maintains Respondent fails to do.339