Diplomatic and Judicial Means of Dispute Settlement [1 ed.] 9789004209985, 9789004209978

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Diplomatic and Judicial Means of Dispute Settlement

Diplomatic and Judicial Means of Dispute Settlement Edited by

Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales

Leiden  •  boston 2013

Library of Congress Cataloging-in-Publication Data Diplomatic and judicial means of dispute settlement / edited by Laurence Boisson de Chazournes, Marcelo G. Kohen, and Jorge E. Vinuales.    p. cm.  Includes bibliographical references.  ISBN 978-90-04-20997-8 (hardback : alk. paper)—ISBN 978-90-04-20998-5 (e-book) 1.  Pacific settlement of international disputes 2.  Arbitration (International law) 3. International courts. I. Boisson de Chazournes, Laurence. II. Kohen, Marcelo G.  III. Vinuales, Jorge.   KZ6010.D56 2013   341.5’2—dc23

2012031022

ISBN  978-90-04-20997-8 (hardback) ISBN  978-90-04-20998-5 (e-book) Copyright 2013 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Global Oriental, Hotei Publishing, IDC Publishers and Martinus Nijhoff Publishers. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper.

Contents Biographical Notes  . ....................................................................................... ix Acknowledgments  ......................................................................................... xvii Introduction  ................................................................................................... . Laurence Boisson de Chazournes, Marcelo G. Kohen and   Jorge E. Viñuales

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Chapter 1. Opening Remarks  ................................................................... . Judge Bernardo Sepúlveda-Amor

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Section One: Interaction at the Initiation of a Dispute Settlement Procedure Chapter 2. Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings  . .................................................................. . Marcelo G. Kohen Chapter 3.  The Security Council and the ICC  ........................................ . Vera Gowlland-Debbas Chapter 4.  The Impact of Arrest Warrants Issued by International Criminal Courts on Peace Negotiations  . ............................................... . Paola Gaeta and Lyne Calder

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Section TWO: Interaction During the Proceedings Before an International Court or Tribunal Chapter 5.  Recourse to the International Court of Justice for the Purpose of Settling a Dispute  . ................................................................. . Pierre-Marie Dupuy

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vi   Contents Chapter 6.  Diplomatic and Judicial Means of Dispute Settlement and How They Got Along In The Pulp Mills Case  ................................ . Pablo Sandonato de León Chapter 7.  The Relationship between Negotiations and Third-Party Dispute Settlement at the WTO, with an Emphasis on the EC-Bananas Dispute  ................................................................................. . Hélène Ruiz Fabri

71

87

Chapter 8. Investment Disputes – Moving Beyond Arbitration  .......... 119 . Michael E. Schneider Section three: Interaction at the Implementation Stage Chapter 9. Between Saying and Doing: The Diplomatic Means to Implement the International Court of Justice’s Iuris Dictum  ............. 155 . Laurence Boisson de Chazournes and Antonella Angelini Chapter 10. Implementation of Recommendations and Rulings in the WTO System  . ...................................................................................... 187 . Gabrielle Marceau and Jennifer A. Hamaoui Chapter 11.  Monitoring Compliance with the Decisions of Human Rights Courts: The Inter-American Particularism  ............................... 213 . Magnus Jesko Langer and Elise Hansbury Chapter 12.  The Use of Alternative (Non-Judicial) Means to Enforce Investment Awards against States  . ......................................................... 247 . Jorge E. Viñuales and Dolores Bentolila Section Four: Perspectives on the Interaction Between Diplomatic and Judicial Means Chapter 13. Two Cases in Perspective: Boundary Delimitation in the Bakassi Peninsula and Criminal Accountability in Kenya  . .......... 281 . Interview of H.E. Kofi Annan conducted by Nicolas Michel Chapter 14. Observations on the Relationship between Diplomatic and Judicial Means of Dispute Settlement  ............................................. 291 . Lucy Reed

Contents   vii

Chapter 15. Non-Disputing State Submissions in Investment Arbitration: Resurgence of Diplomatic Protection?  ............................. 307 . Gabrielle Kaufmann-Kohler Chapter 16. Negotiation and Adjudication: Complementarity and Dissonance  ................................................................................................. 327 . Georges Abi-Saab Concluding Observations  ............................................................................. 335 . Laurence Boisson de Chazournes, Marcelo G. Kohen and   Jorge E. Viñuales

Biographical Notes Georges Abi-Saab is Emeritus Professor of International Law at the Graduate Institute of International and Development Studies (IHEID), where he taught from 1963 to 2000. He is also Honorary Professor at Cairo University’s Faculty of Law and a Member of the Institut de Droit international. Professor AbiSaab is a former ad hoc Judge of the International Court of Justice, and also served as a Judge of the Appeals Chamber of the International Criminal Court for the former Yugoslavia (ICTY) and Rwanda (ICTR), a Commissioner of the United Nations Compensation Commission, Chairman of the Appellate Body of the World Trade Organization and President of the African Foundation for International Law. Antonella Angelini is a PhD candidate at the Graduate Institute of Interna­ tional and Development Studies (IHEID) as well as a teaching and research assistant at the Law Faculty of the University of Geneva. An Italian national, she completed her bachelor and master studies in international relations at the Sant’Anna School of Advanced Studies (Pisa). She also earned a Master in International Studies from the IHEID. Her main interests derive from the field of legal theory, in particular legal hermeneutics and interdisciplinarity, as well as the law of international organizations with a focus on issues of judicial interactions and human rights. Kofi A. Annan was the seventh Secretary-General of the United Nations, serving two terms from 1 January 1997 to 31 December 2006 and was the first to emerge from the ranks of United Nations staff. In 2001 Kofi Annan and the United Nations were jointly awarded the Nobel Prize for Peace with the citation praising his leadership for “bringing new life to the organisation.” In 2007, Kofi Annan established the Kofi Annan Foundation to promote better global governance and strengthen the capacities of people and countries to achieve a fairer, more secure world. He continues to use his skills and experience to mediate and help resolve conflict through private diplomacy, political advice and mentoring. In Kenya in early 2008, Mr Annan led the African Union’s Panel of Eminent African Personalities to find a peaceful resolution to the post-election violence and continues to support the reconciliation and

x   Biographical Notes reform process in the country. In addition to his work with the Kofi Annan Foundation, Mr Annan serves as the Chairman of the Alliance for a Green Revolution in Africa (AGRA), and of the Africa Progress Panel (APP). He is also a Board Member, Patron or Member of a number of philanthropic organisations, including the United Nations Foundation and The Elders. Mr Annan currently holds a number of academic positions at universities around the world, including as Chancellor of the University of Ghana. Dolores Bentolila is a PhD candidate and teaching assistant at the Graduate Institute of International and Development Studies (IHEID). She worked as an associate attorney for M & M Bomchil in Buenos Aires and as a consultant for the World Intellectual Property Organization. She is the manager of the study groups of the Latin American Society of International Law (LASIL) and the author of many publications in the field of investment arbitration in both English and Spanish. Laurence Boisson de Chazournes is Professor of International Law and International Organization at the University of Geneva. She was a Senior Counsel to the World Bank between 1995 and 1999. Professor Boisson de Chazournes serves as a counsel and arbitrator in various dispute settlement procedures, including at the International Court of Justice, WTO and ICSID. Furthermore, she is a member of the Permanent Court of Arbitration’s list of arbitrators. She is also an advisor to various international organisations, including the World Bank, the World Health Organization, the United Nations Development Programme, and the International Labour Organization. Professor Boisson de Chazournes is the author and editor of fourteen books and many other publications. Lyne Calder obtained a Masters in International Law from the Graduate Institute of International and Development Studies (IHEID). Her research has centred on human rights law, the law of armed conflict and international criminal law. She also holds a Bachelor in Law degree from the University of Warwick in the United Kingdom. Pierre-Marie Dupuy is Professor of International Law at the Graduate Institute of International and Development Studies (IHEID). Prior to that he has held teaching positions at the University of Strasbourg, Paris ­Val-de-Marne University, the University of Paris II (Panthéon-Assas) and the European University Institute, Florence. Professor Dupuy has also given the General Course at The Hague Academy of International Law. In addition, he has published many leading texts and articles on various aspects of public international law. Pierre-Marie Dupuy is also a distinguished practitioner

Biographical Notes   xi

having represented numerous sovereign clients before the International Court of Justice and acted as an arbitrator in many well-known international arbitral proceedings, including at the International Centre for the Settlement of Investment Disputes (ICSID) and Permanent Court of Arbitration (PCA). Paola Gaeta (PhD in Law, European University Institute) was Assistant Professor (1998), Associate Professor (2001) and then Professor (2001–2010) of Public International Law at the University of Florence. She is currently Professor of International Criminal Law at the Law Faculty of the University of Geneva and Adjunct Professor of International Criminal Law at the Graduate Institute of International and Development Studies (IHEID). Since 2007, she has been Director of the LL.M. Programme in International Humanitarian Law at the Geneva Academy of International Humanitarian Law and Human Rights and, since 2011, Director of the Academy itself. She is a Member of the Editorial Board of the Journal of International Criminal Justice and of the Editorial Board of the European Journal of International Law. Her publications include The UN Genocide Convention: A Commentary (ed.) (2009), and The Statute of the International Criminal Court: A Commentary (co-editor with A. Cassese and J. R. W. D. Jones) (2001). Vera Gowlland-Debbas is Emeritus Professor of Public International Law at the Graduate Institute of International and Development Studies (IHEID) and a Visiting Professor at University College London. She has also been a Visiting Fellow at All Souls College, Oxford and Visiting Professor at Université Paris II, and the University of California at Berkeley. Her publications include Collective Responses to Illegal Acts in International Law (1990), National Implementation of United Nations Sanctions (2004), Law-making in a Globalized World (2004–5), The Security Council as Enforcer of Human Rights (2009) and The Security Council and Issues of Responsibility under International Law (forthcoming Hague Academy course). She was Counsel for the Arab League in the ICJ Wall Opinion, advises governments and organisations and is attached to Doughty Street Chambers, London. Jennifer Angline Hamaoui joined the Legal Affairs Division of the WTO in 2010. Prior to joining the WTO, Jennifer worked at Covington & Burling, Brussels in the international trade and litigation team, where she was involved in several anti-dumping proceedings before the EU institutions, represented European industries in the course of investigations and the Council of the European Union in the phase of judicial review before the Court. Ms Hamaoui obtained her LLM from the IELPO program of the University of Barcelona where she also graduated in law with distinction. Ms Hamaoui is a member of the Barcelona Bar Association.

xii   Biographical Notes Elise Hansbury is a PhD candidate at the Graduate Institute of International and Development Studies (IHEID). Her thesis is focused on the role of the Inter-American System of Human Rights in the advancement of human rights on the Latin American continent. She is a teaching assistant at the IHEID and recently worked as a Junior Legal Officer at the International Labour Organization. Being a member of the Quebec Bar, she has previously practiced law before the Quebec tribunals. Ms Hansbury holds a Master in International Studies (International Law) from the IHEID, where she received the Mariano García Rubio Prize for the best Master dissertation, and an LLB from the University of Montréal. Gabrielle Kaufmann-Kohler is a professor at the University of Geneva Faculty of Law and Director of the Private International Law Department as well as the Geneva LLM in International Dispute Settlement (MIDS). She is a partner at Lévy Kaufmann-Kohler, Geneva. She is also Honorary President of the Swiss Arbitration Association and was its President from 2001 to 2005. She is a Member of the International Council for Commercial Arbitration, Court of Arbitration of the International Chamber of Commerce, Board of the American Arbitration Association, and Advisory Board of the Hong Kong International Arbitration Centre. She teaches and publishes in the area of international dispute settlement (list available on www.lk-k.com) and practices in international commercial, investment and sports arbitration. Marcelo G. Kohen is Professor of International Law at the Graduate Institute of International and Development Studies (IHEID). He is an Associate Member of the Institut de Droit international and acts as legal counsel and advocate for a number of States before the International Court of Justice. Magnus Jesko Langer is currently Teaching and Research Assistant and a PhD candidate at the Graduate Institute of International and Development Studies (IHEID). He has worked on a number of cases before the International Court of Justice, including the Case Concerning Pulp Mills on the River Uruguay (Argentina v. Uruguay). His research focuses on the fields of international environmental law and international investment law, as well as international dispute settlement. His thesis analyses the question of how international environmental law has impacted the entitlements that States enjoy over their natural resources. He holds graduate degrees in international law (IHEID) and international relations (HEI), and a Bachelor in Law (University of Geneva). Gabrielle Zoé Marceau (PhD) is Counsellor in the Legal Affairs Division of the WTO, which she joined in September 1994. Her main function is to advise panellists in WTO disputes, the Director-General’s Office and the Secretariat

Biographical Notes   xiii

on WTO matters. From September 2005 to January 2010, Gabrielle Marceau was a member of the Cabinet of the WTO Director-General Pascal Lamy. Dr Marceau is also Associate Professor at the Law Faculty of the University of Geneva and at the Graduate Institute of International and Development Studies (IHEID), where she teaches WTO law and dispute settlement. Before joining the GATT/WTO, Gabrielle Marceau worked in private practice in Quebec, Canada, mainly in the sectors of labour law and insurance law. Professor Marceau has published extensively on WTO-related matters. Nicolas Michel is Professor of Public International Law at the Law Faculty of the University of Geneva, at the Graduate Institute of International and Development Studies (IHEID), and at the Academy of International Humanitarian Law and Human Rights in Geneva, since 1 September 2008. Prior to this, and for four years, he served as Under-Secretary-General for Legal Affairs, the Legal Counsel of the United Nations. From 1987 to 2004, he was Professor of Public International Law and European Law at the Law Faculty of the University of Fribourg, Switzerland. Between 1998 and 2003 he joined the Federal Department of Foreign Affairs as the Director of the Public International Law Directorate, and from 2003 to 2004 he was the “Jurisconsulte” of the Ministry. Professor Michel holds law degrees from the University of Fribourg, an attorney’s license, and a master’s degree in international relations from the University of Georgetown, Washington, D.C. He also holds a honoris causa Doctorat from the University Robert Schuman of Strasbourg. Lucy Reed is a partner in the international law firm Freshfields Bruckhaus Deringer LLP, where she co-heads the global international arbitration group. A specialist in investment treaty arbitrations and other public international law disputes, Ms Reed is Adjunct Professor at the Arbitration Institute of the University of Miami Law School and has published widely on international dispute resolution. She served as a Commissioner of the EthiopiaEritrea Claims Commission (an IHL tribunal) and co-director of the Claims Resolution Tribunal for Dormant Accounts in Switzerland (a Holocaust tribunal). She delivered private international law lectures at The Hague Academy of International Law in 2001. Her positions with the Department of State’s Legal Adviser’s Office included Legal Counselor at the Embassy in The Hague and the US Agent to the Iran-United States Claims Tribunal. She was also general counsel of the international organisation the Korean Peninsula Energy Development Organization (KEDO), in which capacity she led negotiations with North Korea. Ms Reed received her law degree from the University of Chicago Law School in 1977 and her BA magna cum laude from Brown University in 1974.

xiv   Biographical Notes Hélène Ruiz Fabri is a professor at the University of Paris I – Panthéon Sorbonne and currently Dean of the Sorbonne Law School (University of Paris I – Panthéon Sorbonne). She is also Director of the Joint Institute of Comparative Law of Paris (UMR de droit comparé – Paris I/CNRS) and Director of the Master 2 Program in International Economic Law. She taught at the Academy of European Law (Florence) and at the Academy of International Law (The Hague). She is an expert with the Council of Europe (as a legal consultant on the ratification and the implementation of the European Convention on Human Rights in Eastern European countries), the French administration and the Organisation Internationale de la Francophonie. Pablo Sandonato de León is a PhD candidate and teaching assistant at the International Law Department of the Graduate Institute of International and Development Studies (IHEID). Prior to this, he was a lecturer in public international law at the Catholic University of Uruguay and at the University of Montevideo. He is also a former Legal Officer of the Senate of Uruguay and is an attorney-at-law under the rules of the Bar of Uruguay. Michael E. Schneider has been engaged in the practice of international arbitration for more than 35 years. He is now the President of the Swiss Arbitration Association (ASA) and Vice Chair of the ICC Commission on Arbitration, and has been a member of several of its working groups (1998 and 2011 Revision of the ICC Rules, Construction, Pre-Arbitral Referee); he also is a member of the Executive Committee of the Dubai International Arbitration Centre (DIAC). From 2006 to 2010 he chaired the UNCITRAL WG II (Arbitration), revising the Arbitration Rules and now participates in its work on an international standard for transparency in investor-State arbitration. He practices arbitration as a Partner of Lalive in Geneva, acting as counsel or arbitrator in proceedings in Switzerland and other parts of the world and under various rules, including those of the ICSID, UNCITRAL, ICC, LCIA, Stockholm Institute, the Cairo Regional Centre for International Commercial Arbitration (CRCICA), European Development Fund (EDF), and before other international bodies, including the WTO Appellate Body and the United Nations Compensation Commission (UNCC). Judge Bernardo Sepúlveda-Amor was elected Vice-President of the Interna­ tional Court of Justice in February 2012, where he has been a judge since 2006. Prior to that he has served as the Secretary of Foreign Relations of Mexico (1982–1988), Ambassador of Mexico to the United States (1982) and to the United Kingdom (1989–1993), a Member of the United Nations Inter­ national Law Commission (1997–2005), and Professor of International Law at

Biographical Notes   xv

El Colegio de México (1967–2005). In 1984 he was awarded Spain’s Principe de Asturias Prize. Jorge E. Viñuales is the Pictet Chair in International Environmental Law and an Assistant Professor of Public International Law at the Graduate Institute of International and Development Studies (IHEID). He is currently active both as an academic and a practitioner in the fields of international environmental law and foreign investment law. Professor Viñuales has substantial experience as a practicing international lawyer in his specialty areas. He has worked on many cases under ICSID, UNCITRAL, PCA, ICC or LCIA rules, including several high profile inter-State, investor-State, and commercial disputes, and he also has experience advising companies, governments, international organisations or major NGOs on different matters of international law. Professor Viñuales was educated in France (Doctorate – Sciences Po, Paris), the United States (LLM – Harvard Law School), Switzerland (Licence and Diplôme d’études approfondies in international relations – HEI; liz jur – University of Freiburg; Licence and Diplôme d’études approfondies in political science – University of Geneva), and Argentina (Abogado – UNICEN).

Acknowledgments The American Society of International Law (ASIL), the European Society of International Law (ESIL) and the Latin American Society of International Law (LASIL), as well as the Faculty of Law at the University of Geneva and the Graduate Institute of International and Development Studies jointly organised a Symposium dedicated to diplomatic and judicial means of dispute settlement on 23 October 2010 in Geneva. The present volume is built upon the insights gathered during that Symposium. The conference brought together many experts, academics and practitioners. This facilitated a comprehensive illumination of the varied and diverse interactions that take place between judicial or arbitral means and diplomatic or political means of dispute settlement. This volume includes the contributions of the Symposium speakers as well as of other authors. The editors are grateful to the Swiss Federal Department of Foreign Affairs for its generous support that made the organisation of the Symposium ­possible. Thanks are also due to the participants of the Symposium for sharing their ideas and comments during the discussions, as well as to Antonella Angelini, Edouard Fromageau and Pablo Sandonato de León for their help in organising the conference. The editors also express their deep appreciation to Jason Rudall for his dedication in carrying out his editorial work on the manuscript.

Introduction Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales The settlement of international disputes has been one of the most researched fields of international law since the adoption of the Charter of the United Nations. The obligation to settle international disputes through peaceful means, raised to the category of one of the fundamental purposes and principles of the Organisation,1 has contributed to the development of the practice of traditional means and the multiplication of new ones. Consequently, doctrine has followed this path. Indeed, major studies exist on both diplomatic and judicial means of settling disputes. Some have a general scope, covering the full array of available means2 or a significant portion of them.3 Others focus on a specific method (e.g. mediation4 or inquiry5) or on a given area of international law (e.g. human rights,6 environmental law,7 international trade8

 Article 1, paragraph 1 and Article 2, paragraph 3 of the UN Charter.  See e.g. J. G. Merrills, International Dispute Settlement (Cambridge University Press, 5th ed., 2011); J. Collier, A. V. Lowe, The Settlement of Disputes in International Law (Oxford University Press, 1999); United Nations, Handbook on the Peaceful Settlement of International Disputes between States (New York: United Nations, 1992). 3  See e.g. R. Mackenzie, C. Romano, Ph. Sands, Y. Shany, The Manual on International Courts and Tribunals (Oxford University Press, 2010); C. Brown, A Common Law of International Adjudication (Oxford University Press, 2007); C. Gray, Judicial Remedies in International Law (Oxford: Clarendon Press, 1990). 4  See e.g. J. Bercovitch (ed.), Resolving International Conflicts: The Theory and Practice of Mediation (London: Lynne Rienner, 1996). 5  See e.g. N. Bar-Yaacov, The Handling of International Disputes by Means of Inquiry (Oxford University Press, 1974). 6  See e.g. L. Burgorgue-Larsen, A. Úbeda de Torres, The Inter-American Court of Human Rights. Case Law and Commentary (Oxford University Press, 2011); P. Leach, Taking a Case to the European Court of Human Rights (Oxford University Press, 2nd ed., 2005). 7  See e.g. T. Stephens, International Courts and Environmental Protection (Cambridge University Press, 2009). 8  See e.g. D. Palmeter, P. C. Mavroidis, Dispute Settlement in the World Trade Organization. Practice and Procedure (Cambridge University Press, 2nd ed., 2004); E.-U. Petersmann, The GATT/WTO Dispute Settlement System (Dordrecht: Kluwer, 1997). 1 2

2   Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales or foreign investment9). Yet, relatively little attention has been devoted specifically to the interaction between diplomatic and judicial means of international dispute settlement. This basic observation lies at the origin of the symposium held in October 2010 at the Graduate Institute of International and Development Studies, Geneva, on ‘Diplomatic and Judicial Means of Dispute Settlement: Can They Get Along?’, co-organised by the American Society of International Law (ASIL), the European Society of International (ESIL), the Latin-American Society of International Law (LASIL), the Faculty of Law of the University of Geneva, and the Graduate Institute, Geneva. The ground to be covered was vast and challenging, but we were fortunate enough to have the presence of many distinguished academics and practitioners who, thanks to their expertise, addressed a wealth of issues with great insight. The present volume is a revised and expanded version of the proceedings of that Symposium. Its purpose is to provide academics and practitioners with a tool that lays the ground for the analysis of the interaction between diplomatic and judicial means of settling international disputes as well as to offer an initial assessment of its implications for several areas of international law. Its structure and content are based on three main considerations. First, to facilitate the observation of the interaction between diplomatic and judicial means, it seemed reasonable to take the temporal sequence typical of judicial means as a matrix of reference. For clarity, this choice neither implies nor amounts to establishing a hierarchy of relevance between these two types of means. Rather, it acknowledges a fairly structured framework of reference common and familiar to both academics and practitioners and employs it as an observational standpoint. Thus, the book uses this sequence as its backbone. The first section explores interactions at the initiation of proceedings, whereas the second and third sections dwell, respectively, on such interactions during judicial proceedings and at the time of implementing a judicial/arbitral decision. The fourth section offers a variety of transversal perspectives cutting across more than one of the preceding sections. The second consideration underlying the conception of the present volume stems from the crucial challenge of identifying the substantive areas most concerned by the interactions between diplomatic and judicial means. In order to be comprehensive, one would have to cover all areas of international law, which was of course not possible within the limits set for this book. A selection was therefore necessary. In this regard, acknowledging the importance of the proliferation of international courts and tribunals 9

 See e.g. D. Bishop, J. Crawford, M. Reisman, Foreign Investment Disputes: Cases, Materials and Commentaries (The Hague: Kluwer Law International, 2005).

Introduction   3

­ ighlighted by Judge Sepúlveda-Amor in his opening remarks, we decided h to pay particular attention to those areas of international law where the use of judicial means has significantly expanded in the last two decades, namely international criminal law, human rights, trade, investment and, last but not least, the increasing resort to the International Court of Justice (ICJ) to settle disputes of a varied nature and in different fields. Our selection of substantive areas is intended to reflect a further aspect. Besides an increased use of judicial means, proliferation has also entailed a differentiation in the judicial ethoi pursued by different courts. Hence, the importance of seeing how diplomatic means can find more or less room according to their capacity to foster or, conversely, clash with such ethoi. Overall, the chapters of the book are intended to provide forays into each of these areas, of varying scope and depth. By way of illustration, whereas a full sequence, ranging from section 1 to section 4, is provided for proceedings before the ICJ or investment arbitration (with the exception of section 1), the analysis of other areas is concentrated in one or two sections. Thus, international criminal law is mainly covered in the first section (chapters by V. Gowlland-Debbas and P. Gaeta/L. Calder). Similarly, human rights are only covered in the third section (chapter by M.-J. Langer/E. Hansbury). As for trade, it is covered in two sections (chapters by H. Ruiz Fabri and G. Marceau/J. Hamaoui). This uneven thematic articulation of the different sections should not cause surprise inasmuch as the present volume is not intended to provide a comprehensive analysis of the interaction between judicial and diplomatic means tailored to each of the chosen domains. Rather, its goal is to provide a preliminary assessment of these interactions reflecting the academics’ and practitioners’ choice of the issues currently felt most urgent or in need of attention. The latter remark leads to the third consideration regarding the structure and content of this book, namely its unifying thread. Despite the apparent diversity of the issues analysed by the different contributors, they all address the potential synergies or, conversely, the potential conflicts between diplomatic and judicial means. Influenced by the compartmentalised approach usually taken in respect of these means, our initial hypothesis was that diplomatic and judicial means do not easily get along. But the preliminary assessment conducted in this volume suggests that, in practice, there are significant synergies between these two sets of means. Synergies between diplomatic and judicial means are, in fact, quite frequent. The chapter by G. Abi-Saab puts the different facets of the interaction between diplomatic and judicial means in a theoretical perspective. Within the spectrum defined by the ‘conflicting’ and ‘synergistic’ poles, interactions tend to take different intermediate forms, depending not only on the structure of a given mechanism, but also on factors such as the timing or the specific political context of a dispute. L. Reed

4   Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales offers in her chapter suggested images to characterise the array of possible interaction between diplomatic and judicial means. For instance, are they to be considered as ‘[b]est friends? Sworn enemies? Would we settle for indifference? Healthy sibling rivalry?’. This intuition is spelled out in different forms in the chapters of this volume. The chapters by V. Gowlland-Debbas and P. Gaeta/L. Calder explore the ambiguous relationship between diplomatic and judicial means in the context of the justice-peace equation. They show that, despite some dangers of re-politicisation of international criminal proceedings, the interactions between political and judicial means in this area are not necessarily (nor are they always) conflicting. Similarly, the analysis by H. Ruiz Fabri of the EC-Bananas dispute before the WTO dispute settlement body provides an excellent illustration of ‘the whole range of possible relationships’ between diplomatic and judicial means. In the same vein, the Pulp Mills case between Argentina and Uruguay, examined by P. Sandonato de León, provides a good illustration of the role of negotiations before, during and after ICJ proceedings, as well as the use of other means, including arbitration on ancillary issues through regional integration mechanisms and the mediation by a third State. One significant element in fostering synergies, rather than conflict, is the legal space left (or conquered) by judicial means for the use (at various stages) of diplomatic means. During judicial/arbitral proceedings, some mechanisms may allow for “domesticated” or tightly controlled forms of political intervention. One example is discussed in the chapter by G. ­Kaufmann-Kohler, who shows that the intervention of home States in investment proceedings, while useful to express these States’ views, does not amount to a resurgence of disruptive diplomatic protection. At the level of implementation, the chapter by G. Marceau/J. Hamaoui explores the complex “multilateral surveillance system of post-judgment procedures” established within the context of the WTO, concluding that “diplomacy can be introduced as a pillar of effective adjudication”. In a similar vein, the chapter by M.-J. Langer/ E. Hansbury analyses this issue in connection with the implementation role “conquered” by the Inter-American Court of Human Rights. In this case, the function devolved to a political organ (the OAS General Assembly) by the legal arrangements underlying the dispute settlement system has been undertaken – with the Assembly’s consent – by the Court. Synergies between diplomatic and judicial means are also possible in the absence of a formal framework. The chapters by M. G. Kohen and P.-M. Dupuy show the interplay between negotiations and judicial settlement and, among other things, how recourse to the ICJ may be a useful component in the overall political process towards the resolution of a dispute. Recourse to the ICJ may indeed be used to prompt a diplomatic settlement

Introduction   5

or to address one specific bone of contention, for instance, through advisory proceedings. Advisory opinions are particularly interesting in this connection because of the nature of their effects. As discussed in the chapter by L. Boisson de Chazournes/A. Angelini, the influence of the ICJ advisory opinions in the settlement of a dispute cannot be assessed in terms of “compliance” or “execution” and require a broader conceptual category, encompassing cases where the advisory opinion “produces practical and legal effects beyond the mere realization of the pronouncement”. Conversely, diplomatic or, more generally, “alternative” means may play a significant role in the implementation of judicial solutions. An apposite illustration is provided by the efforts of Kofi Annan to encourage Cameroon and Nigeria to implement the judgment of the ICJ regarding the Bakassi Peninsula. As noted by Mr. Annan in the interview conducted by N. Michel, the diplomatic effort to solve the dispute took explicitly into account the timing of the judgment and used it as an opportunity to bring the parties together. Synergies between diplomatic and judicial means, notwithstanding the lack of a formal arrangement to this effect, have also arisen in the context of investment disputes. As shown in the chapter by M. Schneider, reliance on alternative methods of dispute resolution in investment disputes is expected to increase as a result of the incentives that can be introduced during their different phases, such as costs decisions or ad hoc cost arrangements concluded in the initial phase of arbitration, early evaluation or partial awards and alternative decisions providing some indication as to the possible outcomes of adjudication. Similarly, the chapter by J. E. Viñuales/D. Bentolila shows how the implementation of investment awards takes place within a broader context where other alternative means are also called to play a role. The foregoing observations are but some of the several perspectives one can gather from the contributions of the different chapters. Several other “readings” are also possible, according to the specific angle adopted by each reader. This point is important to understand the objective of the present volume. Our goal is to provide a framework – with some preliminary applications – to understand the interaction between diplomatic and judicial means, in order to facilitate the undertaking of deeper forays into some of the issues raised. We believe that more research is required to clarify the blend of dispute settlement means that are increasingly being used to address international disputes, and we hope that this volume will contribute to catalysing such research initiatives in the coming years.

Chapter One Opening Remarks Judge Bernardo Sepúlveda-Amor Dean Christian Bovet, Professor Jean‑Michel Jacquet, Members of the Insti‑ tute, distinguished participants in this Colloquium, ladies and gentlemen. It is a great honour and pleasure to address such an outstanding assem‑ bly of international lawyers at the opening of this symposium. Only a few decades ago, the idea of devoting an entire day to discussing the relationship between diplomatic and judicial means of dispute settlement would have struck many as an academic stravaganza, if only because of the limited role of judicial means in the context of inter‑State conflict resolution. In contrast, third party adjudication is today a common place, a recurring feature of the legal and political landscape. Its development since the end of Word War II has been such that it has become increasingly difficult, if not outright impossible, to keep abreast of international jurisprudence on all fronts. Who amongst the audience can honestly claim to master the case law of the ad hoc international criminal tribunals on command responsibil‑ ity, the jurisprudence of human rights courts on the right to a fair trial, the case law of the International Court of Justice on maritime delimitation, and ICSID arbitrations on the protection of foreign investment? The third‑party adjudication business is not the only one to have flour‑ ished since the aftermath of World War II – the advance of judicial settle‑ ment and arbitration, it bears emphasising, has not been at the expense of diplomatic means, on the contrary. It is in light of the vertical and horizontal expansion of the international community that addressing the relationship between diplomatic and judicial means of dispute settlement strikes as particularly pertinent and timely. As framed (“Can they get along?”), the title of the Symposium suggests a some‑ what tortuous – or perhaps antagonistic – relationship between both. Whilst admitting the possibility of conflict, their relationship is much more rich and nuanced than may appear at first sight. In my view, it is accurate to say

8   Judge Bernardo Sepúlveda-Amor that, more often than not, diplomatic negotiation and third‑party adjudica‑ tion are mutually supportive, and tend to reinforce and complement each other rather than prevail over or contradict one another in the attainment of their fundamental goal, namely the peaceful settlement of disputes. In international practice, diplomatic and judicial means are often inextricably intertwined, interacting in a variety of ways, as part of the dispute settlement process. Let me briefly illustrate this point by reference to the practice before the International Court of Justice (ICJ or the Court). A first observation in point is that multilateral diplomacy has been the trigger of contentious proceedings before the Court in a number of instances. I refer to cases where, in the face of States’ failure to achieve a negotiated solution to a conflict, resort to the Court has been recommended by politi‑ cal organs as a means of overcoming the prevailing diplomatic deadlock. For instance, by resolution 22 (1947), the Security Council advised Albania and the United Kingdom (not bound by the optional clause) to submit to the ICJ the dispute arising out of the mining of the Corfu Channel. Another example is the case concerning the Arbitral Award made by the King of Spain, which was submitted by Special Agreement by Nicaragua and Honduras at the sug‑ gestion of an investigative committee appointed by the Council of the OAS and with the latter’s technical assistance. Although exhaustion of diplomatic negotiations does not constitute a precondition for the Court’s seisin under the Statute,1 such a requirement is contained in compromissory clauses in a number of bilateral and multi‑ lateral agreements that have formed the jurisdictional basis of contentious proceedings before the Court. As a result, the Court has often been called to examine in detail negotiations between the parties before asserting jurisdic‑ tion in disputes under its consideration. Prominent examples include the 1986 Nicaragua case, the Case Concerning Border and Transborder Armed Actions (Nicaragua v. Honduras), Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Rwanda) and, more recently, Georgia v. Russia. Resort to diplomatic means may not only be a prerequisite to the exercise of the Court’s jurisdiction in a given case. As illustrated by the Court’s rul‑ ing in Gabčíkovo‑Nagymaros (Hungary v. Slovakia), it may also constitute a substantive obligation of conduct incumbent upon the parties to a dispute. In this instance, the Court ruled in its dispositif that Hungary and Slovakia had to negotiate in good faith in the light of the prevailing situation and

1

 Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria), Pre‑ liminary Objections, Judgment [1998] I.C.J. Reports 275, at § 56.

Opening Remarks    9

take all necessary measures to ensure the achievement of the objectives of the 1977 Treaty. If anything, the Court’s judgment in Gabčíkovo‑Nagymaros illustrates that judicial means are not necessarily the end of the road, and that even where parties have turned to third‑party adjudication, diplomacy outside the court‑ room remains necessary in order to achieve the peaceful (and wholesale) settlement of a dispute. Other examples readily come to mind. For instance, in Haya de la Torre, it was only following negotiations between Colombia and Peru (with the involvement of the Inter‑American Peace Commission) after the third judgment of the Court that a solution was found to the ter‑ mination of the diplomatic asylum of Haya de la Torre in the Colombian Embassy in Peru. The need to combine judicial and diplomatic means may obey a number of factors, including States’ own preferences, which explains why States may sometimes opt for defining narrowly the dispute submitted to adjudication whilst reserving final settlement to diplomacy.2 In the North Sea Continental Shelf cases,3 for instance, the Court was not asked to make a maritime delimi‑ tation, but to indicate the applicable rules of international law. Logically, the definitive settlement was to remain a matter for subsequent negotiation. Finally, a word on implementation. It may not be forgotten that, in a world of sovereign States characterized by the absence of centralised enforcement mechanisms, diplomatic means remain, for better or for worse, the last resort to guarantee the outcome of third‑party adjudication. Of course, a word of caution is needed here. Although States exhibit a con‑ siderable degree of compliance with the ICJ’s judgments, it is no secret that important instances of defiance have occurred and brought to light the obvi‑ ous shortcomings of diplomacy as a means of judicial enforcement. Nicaragua is the textbook example – even attempts to secure a Security Council resolution under Article 94 (2) were doomed in the face of the US veto. Other instances of non‑compliance such as Albania’s in relation to the Corfu Channel judgment or Iran’s with regard to the Court’s decision in the Hostages case have not evidenced, however, a conflict between judicial and diplomatic means. Although the final settlement of those disputes was not achieved in the courtroom or as a direct result of the ICJ’s rulings, there is  Another interesting example is the Special Agreement whereby Hungary and Slovakia sub‑ mitted the dispute on Gabčíkovo‑Nagymaros to the Court. Therein, the parties agreed to establish and implement a temporary water management regime pending the final judg‑ ment, while explicitly ruling out the right of either party to request provisional measures under Article 41 of the ICJ Statute. 3  North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark; Federal Republic of Germany v. Netherlands), Judgment [1969] I.C.J. Reports 4. 2

10   Judge Bernardo Sepúlveda-Amor no doubt that the latter and the diplomatic negotiations that ensued were mutually supportive. To conclude these opening remarks, let me submit to your consideration an important question that underlies any discussion on the relationship between diplomatic and judicial means of settlement, namely the issue of their respective idoneity to contribute to the maintenance of international peace and security in any given case. We may not overlook that this is precisely the ultimate goal of dispute settlement under the United Nations Charter and, therefore, it is against this yardstick, rather than by reference to their intrinsic virtues and shortcom‑ ings, that diplomatic and judicial means must be ultimately assessed.

Section One: Interaction at the Initiation of a Dispute Settlement Procedure

Chapter Two Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings Marcelo G. Kohen

I.  Introduction Article 33 of the UN Charter enumerates different means of settling international disputes and puts them on an equal footing. The General Assembly’s Manila Declaration of 15 November 1982 equally stresses the principle of free choice of means, although at the same time emphasises that States should “bear in mind that direct negotiations are a flexible and effective means of peaceful settlement of their disputes.”1 For its part, Article 36 of the UN Charter suggests that, while the Security Council may recommend appropriate procedures, it should take into consideration that “legal disputes should as a general rule be referred by the parties to the International Court of Justice”.2 At first sight, when States defer a dispute to the International Court of Justice, it is because all other avenues are closed. Another common belief is that once a dispute comes to the Court, it is rather for counsel and judges to act, and no longer for diplomats. Both perceptions do not exactly reflect what occurs in reality. On the one hand, there are cases in which the Court has been seized without the exhaustion of other means, particularly negotiation. Indeed, there have been cases in which not even a single attempt at solving the question by other means was previously performed. On the other hand, it may be that other means are used even after the institution of proceedings, in view of achieving a settlement through extra-judicial means, while the case is pending.  Manila Declaration on the Peaceful Settlement of International Disputes, UNGA Resolution 37/10, Annex, at §§ 3 and 10. 2  The Manila Declaration repeats this at § 5 (a). 1

14   Marcelo G. Kohen The present chapter will examine the interactions between diplomatic and judicial means at the period immediately before the institution of the proceedings and at the initial phase of them. Focus will be put, although not exclusively, on the practice of the International Court of Justice. This analysis, however, may also be relevant in the framework of other international adjudicative bodies. At the outset, two different aspects of the same problématique can be distinguished. The first one is the policy decision to resort to adjudication instead of pursuing a bilateral settlement of the dispute (II). The second one is of a legal character: the question whether the previous employment of diplomatic means is a pre-condition for having recourse to judicial means. A distinction must be made depending on the existence of a stipulation going in that direction or not (IV). In the latter case, the question arises as to whether there exists a general customary rule requiring the exhaustion of diplomatic means before resorting to the judicial mechanism (V).

II.  The Difficult Decision to Resort to Adjudication The decision to institute proceedings or to conclude a special agreement (compromis) deferring an international dispute to a judicial body is a political one. As such, it is not only subordinated to the evaluation of the rights and wrongs of one’s legal case, but is also subject to other considerations. A learned and experienced professor, counsel and judge/arbitrator, did not hesitate to recommend as a first rule of international litigation, that of avoiding litigation if possible.3 The main argument for this is the uncertain character of the outcome, even in cases in which the rules and facts appear clear. The author, however, suggests that this is also the case in domestic practice. Indeed, uncertainty appears to be bigger at the international level, in the case of courts or tribunals composed by such an important figure of fifteen or twenty-one judges (or even more, if one includes ad hoc judges) coming from different countries and legal traditions, such as – respectively – the International Court of Justice or the International Tribunal for the Law of the Sea. No doubt, a negotiated agreement is always preferable to the uncertainty of a future judgment. The problem remains that there are situations in which any possibility of an agreed settlement is excluded. The same author also suggests going to litigation essentially in three circumstances: a) if there is nothing to lose if the State concerned loses, b) if the political objective pursued can be achieved  Elihu Lauterpacht, “Principles of Procedure in International Litigation” (2009) RCADI 345, at 485.

3

Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings   15

even if the State loses and c) if political factors oblige it to litigate. Certainly, these circumstances may indicate to a State that it is convenient to go to adjudication, particularly if, irrespective of the outcome, the State concerned will be in any way better off than it was before the proceedings. Examples follow. In the Case Concerning Sovereignty Over Pedra Branca/Pulau Batu Puteh, Middle Rocks and South Ledge, Singapore was claiming and effectively controlling the three features under dispute and their surrounding waters, preventing Malaysian vessels to enter the area. As a result of the judgment, Malaysia – while losing Pedra Branca/Pulau Batu Puteh – obtained the recognition of its sovereignty over Middle Rocks, immediately took control over them and ceased the maritime control by Singapore of an important area in the middle of the Strait.4 In the Navigational and Related Rights case, Costa Rica was prevented by Nicaragua from exercising its conventional navigational rights on the San Juan River, whose waters are Nicaraguan, with the exception of navigation with commercial goods. Equally, Nicaragua denied the existence of a right of fishing for subsistence purposes in favour of the riparian population of the Costa Rican bank of the river, claiming that it had just tolerated it as a matter of courtesy. The outcome was the recognition by the Court that Costa Rica is entitled to carry out any commercial navigation, including that of passengers, even if it did not obtain the recognition of the navigation of its police forces for the supply of its border posts. It also obtained the recognition of the existence of a customary right to fishing, preventing in this manner Nicaragua from stopping this practice on the pretext of being a matter of pure courtesy. A third example is that of the Pulp Mills case. Before the institution of proceedings Uruguay authorised the construction of two pulp mills on its bank of the Uruguay River and denied any role of the bi-national administrative commission of the river (CARU) for these authorizations. Construction work started. Six months after the filing of the Argentine application, the owners of one of the mills decided to move elsewhere. While Argentina did not obtain the dismantlement of the remaining one, the Court endorsed Argentina’s allegation of the violation by Uruguay of the procedure ­established by the 4

 The Court declared by 12 votes to 4 that sovereignty over Pedra Branca/Pulau Batu Puteh belonged to Singapore, while finding by 15 to 1 that sovereignty over Middle Rocks belonged to Malaysia. As regards South Ledge, the Court decided also by 15 to 1 that sovereignty over this low-tide elevation belonged to the State in the territorial waters of which it is located. Sovereignty Over Pedra Branca/Pulau Batu Puteh, Middle Rocks and South Ledge (Malaysia/ Singapore), Judgment [2008] I.C.J. Reports 101, at § 300. It is to be noticed that the closest Malaysian or Singaporean territory to South Ledge is Middle Rocks.

16   Marcelo G. Kohen relevant treaty – thus, preventing the authorization of any new mill without following it – and Argentina obtained the possibility of a joint monitoring of the pulp mill, including periodical visits in situ. Other circumstances than those mentioned above, however, may lead States to go to an international judicial body. If no side is willing or able to make concessions to the other, if there is the conviction that the maintenance of the dispute is detrimental to the State or States concerned, i.e. if it is an obstacle to the international relations of those States in general, or to the possibility to exploit natural resources, for example. A perusal of some other cases may provide some indication about further reasons why a State unilaterally may decide to refer a dispute to an international adjudicative body. Portugal instituted proceedings against India before the ICJ just some days after having become member of the United Nations and made the declaration of acceptance of the jurisdiction of the Court (Article 36, paragraph 2 of the Statute).5 It claimed the recognition of a right of passage between their enclaves in Indian territory. Since India challenged the very continuance of the Portuguese colonial presence on Indian territory, it would have been pointless for Portugal to attempt to negotiate with the Indian government that right of passage. Moreover, by alleging the right of passage, Portugal could also obtain an implicit recognition of its sovereignty over the enclaves, a point India was precisely challenging at the relevant time. In 1999, the then Federal Republic of Yugoslavia instituted proceedings against ten NATO States, some weeks after the start of the bombing of its territory by that regional organization during the Kosovo crisis.6 The military action being underway, the diplomatic means closed unless the Yugoslavian government would accept the NATO ultimatum, the FRY Applications and the concomitant request for provisional measures appeared as the only peaceful means to try to stop the military operation or, at least, as a way to demonstrate the illegality of the use of force by NATO and its member states participating in the operation. The Republic of the Congo and Djibouti instituted proceedings against France, even if a jurisdictional link was lacking, on matters related to

 See Case Concerning Right of Passage over Indian Territory, Preliminary Objections, Judgment [1957] I.C.J. Reports 125. 6  Application instituting proceedings against the United States of America, the United Kingdom of Great Britain and Northern Ireland, the Republic of France, the Federal Republic of Germany, the Republic of Italy, the Kingdom of the Netherlands, the Kingdom of Belgium, Canada, Portugal and the Kingdom of Spain, 29 April 1999. Available at: http://www.icj-cij .org (last accessed 30 March 2012).

5

Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings   17

­ easures taken by French judicial authorities.7 Given the division of powm ers at the domestic level, and the consequent independence of the judiciary, the French government would have been unable to negotiate on the decisions taken by the French judges. What is also remarkable here, is the fact that, notwithstanding the lack of any jurisdictional link, France accepted the jurisdiction of the Court in both cases. This can show two things: a) French reliance in the soundness of their cases and b) its will to put an end to these disputes through the use of one effective means. The examples above show quite very different situations in which, for one reason or another, the possibility of settling the dispute through negotiations or other diplomatic means were closed. Yet in other situations a party to a dispute even rejects the very existence of the latter, making any diplomatic effort futile. Among others that can be mentioned are the case instituted by Portugal against Australia on the conclusion of a treaty between Australia and Indonesia regarding the exploitation of the continental shelf of the so-called ‘Timor Gap’, and that of Liechtenstein v. Germany concerning the Pieter van Laer painting.8 In both cases, the respondents considered that the applicant did not have a dispute with them, but with a third State. The Court rejected both contentions, but came to the conclusion that it did not have jurisdiction, or could not exercise it, for other reasons.

III.  Pursuing Other Diplomatic Means After the Failure of Negotiations There are situations in which, after having unsuccessfully negotiated, the parties to a dispute conclude a special agreement submitting it to the Court.9  Application by the Republic of the Congo instituting proceedings against France of 9 December 2002 (Certain Criminal Proceedings in France (Republic of the Congo v. France); Application by Djibuti instituting proceedings against France of 9 January 2006 (Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v. France)). Available at: http://www.icj-cij.org (last accessed 30 March 2012). 8  East Timor (Portugal v. Australia), Judgment [1995] I.C.J. Reports 90; Certain Property (Liechtenstein v. Germany), Preliminary Objections [2005] I.C.J. Reports 6. 9  An example is as follows: “On 8 April 1994 Benin and Niger entered into an agreement creating a joint commission for the delimitation of their common border, whose terms of reference included the enumeration, collection and analysis of documents relating to the frontier and the precise establishment thereof. The commission held six meetings between September 1995 and June 2000. Since efforts to arrive at a negotiated solution to the dispute were unsuccessful, the commission proposed that the Governments of the two States bring the dispute before the International Court of Justice by Special Agreement. The Special Agreement was signed in Cotonou on 15 June 2001 and entered into force on 11 April 2002.” Frontier Dispute (Benin/Niger) Judgment, [2005] I.C.J. Reports 90, at § 22. 7

18   Marcelo G. Kohen But, there are also cases in which, after the failure of negotiations the parties still decide to avoid a binding third party decision. Third party involvement is still inescapable if there is a will to put an end to the dispute. This is where there is room for mediation and conciliation procedures. A well-known example of the former is the successful mediation by Pope John Paul II in the Beagle Channel dispute between Argentina and Chile.10 A further example of the latter is the work of the Conciliation Commission on the continental shelf area between Iceland and Jan Mayen.11 Rare are the situations in which the parties envisage the creation of an impartial body which will perform conciliatory functions first, and in case of failure, arbitral ones. This was the case between Egypt and Israel with regard to the dispute concerning the establishment of boundary markers in the Taba area. An arbitral tribunal of five members was constituted. According to Article IX of the Special Agreement (Compromis), after the filing of the counter-memorials a three-member chamber comprising the two national arbitrators would have the possibility to make a unanimous recommendation to the parties.12 The two remaining members of the tribunal were put completely aside from this conciliation procedure, which failed, with the five-member tribunal ending up fulfilling its task as an arbitral body. This hybrid solution may deserve criticism, particularly in the case in which the arbitral tribunal renders its decision on the exclusive basis of international law and may not decide ex aequo et bono. Conciliation and arbitration are separate and different tasks and it can be an unwise decision to require someone to perform both of them in the same case. In the example at issue, one may be particularly critical in view of the fact that not all members of the tribunal were put in an equal position, with some of them knowing the alternatives of conciliation and others not. Yet in other cases the parties have envisaged the future recourse to adjudication if negotiations or other diplomatic means fail, either as alternative or as successive means. This can occur both in general treaties of peaceful settlement of disputes or in treaties containing a compromissory clause. In the latter situation, the agreement provides for negotiations within a given time limit and in case of failure the parties can refer the dispute to the Court.13 Examples of these situations offer different solutions. The sections below  Case Concerning the Location of Boundary Markers in Taba between Egypt and Israel, 29 September 1988, RIAA, vol. XX, 9–10, at §§ 8–11. 11  See its report to the governments of June 1981, which paradoxically is published in the RIAA, vol. XXVII, at 1–34. 12  Arbitration Compromis regarding the permanent boundary between Israel and Egypt (with annex), Signed at Giza on 11 September 1986. UNTS, No. 29013. 13  In some cases the question arises whether – failing any explicit reference in the special agreement – each party can refer the dispute to the Court or both together: see Territorial Dispute (Libyan Arab Jamahiriya/Chad), Judgment [1994] I.C.J. Reports 6. 10

Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings   19

explore different scenarii, both whether previous employment or exhaustion of other remedies is required by the relevant jurisdictional clause or not.

IV.  Cases in Which Compromissory Clauses Envisage the Employment of Other Alternative or Successive Means A number of compromissory clauses, both in bilateral and multilateral agreements, provide for the use of other means of dispute settlement, either diplomatic or arbitral ones, before referring the dispute to the International Court of Justice. Such clauses have not always been a model of clarity. The Court itself has had the occasion to clarify some of them. In some cases the question arises whether the other means should be previously exhausted or put aside by the parties before one of them seizes the Court. Of particular ambiguity were Articles XXXI and XXXII of the Pact of Bogota. In the Armed Actions case (Nicaragua v. Honduras), the Court distinguished two different avenues to arrive at a solution based on the Pact, that of Article XXXI being a direct one, while the other (Article XXXII) required that in case of the parties having followed a conciliation procedure, in order for one party to refer the dispute to the ICJ, the conciliation should have not led to a solution and the parties should have not agreed to follow an arbitral procedure.14 Article XXXII is then an example of the establishment of successive and alternative dispute settlement mechanisms. The Protocols of the Vienna Convention on Diplomatic and on Consular Relations also contain references to the possibility of following conciliation or an arbitral procedure instead of resorting to the International Court of Justice. In the Hostages case (United States of America v. Iran), the Court examined the scope of these provisions, in order to determine its jurisdiction in view of the lack of any negotiation between the parties or the decision to proceed to conciliation or arbitration. In the Court’s view: In the present instance, neither of the parties to the dispute proposed recourse to either of the two alternatives, before the filing of the Application or at any time afterwards. On the contrary, the Iranian authorities refused to enter into any discussion of the matter with the United States, and this could only be understood by the United States as ruling out, in limine, any question of arriving at an agreement to resort to arbitration or conciliation under Article II or Article III of the Protocols, instead of recourse to the Court. Accordingly, when the United States filed its Application on 29 November 1979, it was unquestionably free to have recourse to Article 1 of the Protocols, and to invoke it as

 Border and Transborder Armed Actions (Nicaragua v. Honduras), Jurisdiction and Admissibility, Judgment [1988] I.C.J. Reports 89, at § 47.

14

20   Marcelo G. Kohen a basis for establishing the Court’s jurisdiction with respect to its claims under the Vienna Conventions of 1961 and 1963.15

A similar situation arose in the Lockerbie cases brought by Libya against the United Kingdom and the USA. Article 14, paragraph 1 of the 1971 Montreal Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation provides that [a]ny dispute between two or more Contracting States concerning the interpretation or application of this Convention which cannot be settled through negotiation, shall, at the request of one of them, be submitted to arbitration. If within six months of the date of the request for arbitration the Parties are unable to agree on the organization of the arbitration, any one of those Parties may refer the dispute to the International Court of Justice by request in conformity with the Statute of the Court.

The respondents considered that there was no dispute related to the 1971 Montreal Convention and consequently, “nothing to be settled by negotiation under the Convention”. The Court also noted that the letter sent by Libya to the American and British governments containing an arbitration proposal was met with no answer, a proposal that was nevertheless rejected at the Security Council by both respondents. Consequently, in the opinion of the Court the alleged dispute between the Parties could not be settled by negotiation or submitted to arbitration under the Montreal Convention, and the refusal of the Respondent[s] to enter into arbitration to resolve that dispute absolved Libya from any obligation under Article 14, paragraph 1, of the Convention to observe a six-month period starting from the request for arbitration, before seizing the Court.16

The examples above show that, when compromissory clauses contain the requirement of exhaustion of negotiations or the decision to use other means, the Court has been consistent in not requiring lengthy negotiations or formal exchanges related to other envisaged dispute settlement means in order to allow a party to submit the dispute before it. The Court is then consistent with its views as explained in the Mavrommatis case:

 United States Diplomatic and Consular Staff in Tehran (United States v. Iran) Judgment [1980] I.C.J. Reports 3, at § 49. 16  Questions of Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United Kingdom), Preliminary Objections, Judgment [1998] I.C.J. Reports 17, at § 21; Questions of Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United States of America), Preliminary Objections [1998] I.C.J. Reports 122, at § 20. 15

Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings   21 Negotiations do not of necessity always presuppose a more or less lengthy series of notes and dispatches; it may suffice that a discussion should have been commenced, and this discussion may have been very short; this will be the case if a dead lock is reached, or if finally a point is reached at which one of the Parties definitely declares himself unable, or refuses, to give way, and there can therefore be no doubt that the dispute cannot be settled by diplomatic negotiation.17

To adopt any other approach could indeed favour the party not willing to come before the Court to indefinitely prolong negotiations with that purpose.

V.  Is There a General International Law Rule Requiring Previous Attempts at Negotiations Before Instituting Proceedings? In the case law of the International Court of Justice, the question arose whether, even if the exhaustion of previous negotiations does not appear as a condition for the jurisdiction of the Court either in compromissory clauses or in declarations under the optional clause of Article 36, paragraph 2 of the Statute, negotiations would nevertheless be an inferred pre-condition before instituting proceedings. This was the position held by India in the Right of Passage case and by Nigeria in the Cameroon v. Nigeria case. India contended that there exists a customary rule requiring negotiations before filing an application on the basis of the declarations made under Article 36, paragraph 2 of the Statute, otherwise it would not be possible to ascertain the existence of a legal dispute. The Court, without taking a position on the existence of this alleged customary rule, examined the diplomatic exchanges between Portugal and India and considered them as disclosing the existence of a legal dispute on the issue before the Court, this showed that the negotiations had reached a deadlock.18 For its part, Nigeria invoked the existence of an implicit agreement to settle boundaries issues between Cameroon and Nigeria through bilateral means, as a result of a practice of more than 24 years.19 The Court, after having noted that those issues were dealt with through bilateral mechanisms of different kinds for many years, dismissed this contention and clearly summarised the legal situation in a general way as follows:  Mavrommatis (Greece v. United Kingdom), Judgment [1925] P.C.I.J. Reports, Series A, No 22, at 13. 18  Case Concerning Right of Passage over Indian Territory, Preliminary Objections, Judgment [1957] I.C.J. Reports 125, at 130 and 148–149. 19  Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria), Preliminary Objections, Judgment [1998] I.C.J. Reports 275, at § 48. 17

22   Marcelo G. Kohen Neither in the Charter nor otherwise in international law is any general rule to be found to the effect that the exhaustion of diplomatic negotiations constitutes a precondition for a matter to be referred to the Court. No such precondition was embodied in the Statute of the Permanent Court of International Justice, contrary to a proposal by the Advisory Committee of Jurists in 1920 (Advisory Committee of Jurists, Procès-verbaux of the Proceedings of the Committee (16 June–24 July 1920) with Annexes, pp. 679, 725–726). Nor is it to be found in Article 36 of the Statute of this Court. A precondition of this type may be embodied and is often included in compromissory clauses of treaties. It may also be included in a special agreement whose signatories then reserve the right to seise the Court only after a certain lapse of time (cf. Territorial Dispute (Libyan Arab Jamahiriya/Chad), Judgment, I.C.J. Reports 1994, p. 9). Finally, States remain free to insert into their optional declaration accepting the compulsory jurisdiction of the Court a reservation excluding from the latter those disputes for which the parties involved have agreed or subsequently agree to resort to an alternative method of peaceful settlement.20

In the American Hostages in Tehran case, the Court recalled that, [a]s was pointed out in the Aegean Sea Continental Shelf case, the jurisprudence of the Court provides various examples of cases in which negotiations and recourse to judicial settlement by the Court have been pursued pari passu. In that case, in which also the dispute had been referred to the Security Council, the Court held expressly that “the fact that negotiations are being actively pursued during the present proceedings is not, legally, any obstacle to the exercise by the Court of its judicial function.” (I.C.J. Reports 1978, p. 12, para. 29)21

What is stated with regard to negotiations can also be extended to other ongoing diplomatic means at the time of the seizing of the Court. Still in the American Hostages in Tehran case, the Court considered “that neither the mandate given by the Security Council to the Secretary-General in resolutions 457 and 461 of 1979, nor the setting up of the Commission by the Secretary-General, can be considered as constituting any obstacle to the exercise of the Court’s jurisdiction in the present case”.22 Another way to frame the problem of whether negotiations and the instituting of proceedings can go together is to consider, as Turkey did in the Aegean Sea Continental Shelf case, that both are not reconcilable, because “[t]he necessary conditions for the conduct of frank and serious negotiations, and the spirit that which should motivate the parties concerned, with

 Land and Maritime Boundary between Cameroon and Nigeria, Preliminary Objections, Judgment [1998] I.C.J. Reports 303, at § 56. 21  United States Diplomatic and Consular Staff in Tehran (United States v. Iran) Judgment [1980] 1.C.J. Reports 3, § 43. 22  Ibid., at § 44. 20

Interaction between Diplomatic and Judicial Means at the Initiation of Proceedings   23

a view to the settlement of their problems by such negotiations”23 would not be met. This position was held against the background of Security Council Resolution 395 (1976), in which the Council called on the two Governments “to resume direct negotiations over their differences”.24 The Court did not follow Turkey’s objection. While it could be true that in certain circumstances in which negotiations have already started, the instituting of proceedings by one side may not create the best atmosphere for the continuation of these negotiations, different reasons can explain the latter move. If one side considers that it has a legal case and the other procrastinates or uses negotiations as a way to indefinitely postpone the settlement of the dispute, there are fair and good reasons to use the available judicial means without preventing or excluding a negotiated solution. Negotiations and judicial settlement do not exclude each other.

VI.  Concluding Remarks The considerations above demonstrate the consistency of the position held by the Court that there is no general obligation of the exhaustion of negotiations or any other diplomatic means before instituting proceedings. The Court’s case law also shows that when such an obligation is specifically contained in compromissory clauses or reservations, including in declarations of acceptance of the “optional clause” of Article 36 paragraph 2 of the Statute, the Court finds quite easily that this condition has been met. To bring a case to the Court has also been used in the past to urge a negotiated solution, as the Passage through the Great Belt25 and the Status vis-à-vis the Host State of a Diplomatic Envoy to the United Nations26 cases show. Negotiations and judicial settlement can work together at the initial stage of the proceedings with the same aim of the settlement of the dispute. While the judicial means remain the focus, or may be the exclusive focus, as to the settlement of the different legal approaches to the dispute – unless the parties granted the Court or tribunal the possibility to decide the case ex aequo et bono – negotiations will provide the necessary flexibility to allow the parties to achieve a mutually satisfactory arrangement, even if neither  Aegean Sea Continental Shelf, Judgment [1978] I.C.J. Reports 3, at § 28.  Security Council Resolution 395 (1976) of 25 August 1976. 25  Passage through the Great Belt (Finland v. Denmark), Order of 10 September 1992, [1992] I.C.J. Reports 348. 26  Case concerning the Status vis-à-vis the Host State of a Diplomatic Envoy to the United Nations (Dominica v. Switzerland). The case was removed from the Court’s List at the request of the Commonwealth of Dominica on 9 June 2006. 23 24

24   Marcelo G. Kohen side obtains 100% recognition of the position it claims. There obviously are cases more suited to negotiation than others, and there are cases in which the only means to settle the dispute is through a third party adjudication. In between, there is a palette for having negotiation and judicial means working together. After all, in most of the cases even after the final judicial decision the parties have to sit around the negotiating table to implement it, as will be discussed in a later chapter of this book.

Chapter Three The Security Council and the ICC Vera Gowlland-Debbas

I.  The Linkage between the Security Council and the International Criminal Court The role forged for the Security Council by the Rome Statute in triggering the jurisdiction of the International Criminal Court raises not only the question of the extent to which the links between the two may affect the independence of the ICC but also of the general international law and policy issues raised from a systemic perspective. The ICC is of course based on its own independent treaty. The relationship agreement concluded between the ICC and the United Nations recognizes the independence and judicial character of the Court and states in Article 2(3) that “The United Nations and the Court respect each other’s status and mandate”. Hence the role of the Security Council in the ICC proved to be one of the most controversial aspects of the 1998 Rome Statute for it raised concerns about the impact the political organ could have on that independence and impartiality. In fact, the ICC and the Security Council came to have even closer links than those established between the Council and its subsidiary organs, the two international criminal tribunals on Yugoslavia and Rwanda, in the sense that the political body not only can trigger but also intervene in some respects in the judicial process itself. But while some States at the diplomatic conference in Rome argued that a universally respected international criminal justice system required separating judicial from political, and individual from State responsibility, others on the contrary underlined the need to enlist the Security Council in ensuring an effective response to individual crimes. A number of factors have militated since the 1990s in favor of the institutionalization of international criminal responsibility. While at the domestic

26   Vera Gowlland-Debbas level debate is still on-going as to the objectives of criminal justice – deterrence, retribution, protection of victims – in international law a clear linkage has been forged between criminal justice and the maintenance of international peace and security. The former has therefore been seen as one means of contributing to the restoration and maintenance of the latter. The Statute of the International Criminal Court adopted in Rome in July 1998 sustains this linkage in its preamble, in “[r]ecognizing that such grave crimes [those over which the Court has jurisdiction] threaten the peace, security and wellbeing of the world”. Moreover, the embedding in the Rome Statute of the discretionary competence under Chapter VII of the Charter of the Security Council – an elitist, political body – within the Court’s procedures, with potentially important implications for the legal position of individuals, is based on the recognition that the functions of the ICC and the Council are complementary in respect of the four crimes over which the Court has assumed jurisdiction – genocide, crimes against humanity, war crimes and aggression – crimes which (apart from that of aggression) the Security Council has at one time or another determined to be a constituent element of the threat to or breach of international peace and security under Article 39 of the Charter, hence falling under its primary responsibility under the Charter. In addition, the Security Council has ventured into the field of individual criminal responsibility by playing a role in its institutionalization, beginning with the unprecedented creation of the ICTY and ICTR as subsidiary organs. International criminal justice is therefore now part and parcel of Chapter VII in the form of hybrid tribunals created by or linked to the Security Council, including in the framework of post-war reconstruction of war-torn societies, in which transitional justice is said to be a fundamental component in the search for reconciliation of national societies. This has raised concerns regarding the role which the Security Council should play in the field of individual criminal responsibility, in particular, the relationship between peace and justice and that between political and judicial organs when the former acts in a quasi-judicial capacity, thereby affecting the decision-making in the latter. To what extent does this constitute a liaison dangereuse?1 This also raises the problem of the consent lying at the base of

1

 See Vera Gowlland-Debbas, “The Relationship between Political and Judicial Organs of International Organisations: The Role of the Security Council in the New International Criminal Court”, International Organisations and International Dispute Settlement: Trends and Prospects, in eds. Laurence Boisson de Chazournes, Cesare Romano and Ruth Mackenzie (New York: Transnational Publishers, 2002), at 195–218, from which this contribution draws.

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treaties and the challenge posed to principles of criminal justice central to which is equality of individuals before the law.

II.  The Relationship between Peace and Justice My reference to the relationship between peace and justice, which admittedly has become somewhat of a cliché, is not to abstract notions of peace and justice, but to their more mundane meaning: on the one hand, the political concept of international peace maintenance, one of the purposes of the UN Charter; on the other hand, justice as involving judicial process. These two concepts can no longer be separated as they once were in the original Charter reading of Article 1(1), which links justice only to the peaceful settlement of disputes and not to collective measures, for they now interrelate in various ways. The peace and justice dilemma has the face of Janus, appearing both in the form of peace collaborating with justice, more accurately, a role for justice within peace, and in the form of peace vs. justice, when the two are in opposition or conflict. But peace can also reinforce justice, giving it the means for its enforcement. A.  Justice as an Instrument for Peace Justice as an instrument for peace has been a view sustained by the Appeals Chamber of the International Criminal Tribunal for the Former Yugoslavia (ICTY) in the Tadic case,2 in which it considered that the legality of the Tribunal’s creation rested on Article 41 of the UN Charter, its establishment constituting one measure the Security Council could itself impose under Chapter VII (as opposed to those measures it called on member States to carry out) in the exercise of its function of restoring peace in the former Yugoslavia. This was a laudable interpretation by the ICTY to the extent that it did not wish to rest its legal basis on the Security Council’s general and implied powers, in view of that organ’s expansionist tendencies, but to hinge it on an actual power; however, the evident political origins of the Security Council’s qualifications of a situation under Chapter VII does render justice secondary or subservient to peace and leaves it without a raison d’être when peace has been attained.  See The Prosecutor v. Dusko Tadic a/k/a “Dule” (‘Tadic Case’), ICTY Decision on the Defence Motion for Interlocutory Appeal on Jurisdiction (Case No: IT-94-1) 2 October 1995, at §§ 32–6. This view was endorsed by the International Criminal Tribunal for Rwanda (see The Prosecutor v. Joseph Kanyabashi), ICTR Decision on the Defence Motion on Jurisdiction (Case No: ICTR 96-15-T) 18 June 1997.

2

28   Vera Gowlland-Debbas Nevertheless, there is an acceptable rationale behind the provision of Article 13(b) of the Rome Statute under which the Security Council, acting under Chapter VII, may refer to the Prosecutor “a situation in which one or more of such crimes [within the jurisdiction of the Court] appears to have been committed”, in that it introduces a collective triggering mechanism parallel to that exercised unilaterally by States parties or by the Prosecutor and was intended to avoid the establishment of ad hoc tribunals by the Council, (though it has not prevented the Council since from in fact doing so). This provision carries also potentially important implications for the legal position of States and individuals, in particular in respect of certain safeguards that were instituted for States in the Statute. The referral by the Security Council of the situation in Darfur to the Court following on the recommendation of the International Commission of Inquiry, on the basis of Resolution 1593 (2005) – the first test case of these provisions – contributed to settling some of the questions raised by Article 13(b) of the Statute as well as illustrates the consequences of this outreach of a Security Council decision. The Security Council confirmed the necessity of a prior determination under Article 39, declaring that the situation in Sudan “continues to constitute a threat to international peace and security” and expressly acting under Chapter VII, decided “to refer the situation in Darfur since 1 July 2002” (the date of the entry into force of the Statute) to the ICC Prosecutor, thus also clarifying the question of whether the Council should abide by the principle of non-retroactivity. In its second referral to the ICC, the Security Council in its unanimous Resolution 1970 (2011) adopted in regard to the situation in Libya since 15 February 2011 (the start of the popular uprising in that country), not only expressly acted under Chapter VII of the Charter, but also under Article 41, including referral to the ICC among a package of sanctions covering such traditional measures as an embargo on arms, and targeted sanctions on highlevel persons in the Libyan regime. This clearly sustains the ICTY position on the non-exhaustive nature of Article 41. Both the Darfur and Libya referrals also underline how the Statute, in allowing the Security Council to bypass the pre-conditions for the exercise of jurisdiction under Article 12, can produce the peculiar situation in which non-State parties who are members of the Security Council (only two permanent members – the UK and France – are parties) may initiate a process leading to the prosecution of individuals coming from a non-State party. While the end result is not dissimilar to that created by an ad hoc tribunal set up by the Security Council, the particularity of these provisions lies in the interlocking of a consensual treaty-based regime with the mandatory decision-making of the Council. This has been challenged not only as an

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encroachment on third party treaty rights,3 but also as an inequality of treatment of the nationals of different non-State parties – while some have obligations and can be arraigned before the ICC, others have total impunity. Though the United States has vehemently objected to the effects of the ICC Statute on non-State parties, it has not been opposed to such referrals by the Security Council. It chose to abstain (along with three others, including one other Permanent Member – China) on the resolution on Darfur in return for certain safeguards imported into the resolution, e.g. recognition of the existence of agreements under Article 98(2) of the Statute, an oblique reference to the so-called “bilateral impunity agreements” concluded with a number of other States, safeguarding the immunity of its foreign and military personnel. It went even further by voting for the resolution on Libya, again in return for certain safeguards referred to below. These two referrals are a good illustration of how, from a voluntarist perspective, the original source of consent in the treaty-making process may become increasingly remote and complex, which makes Sir Elihu Lauterpacht’s comments regarding the quasi-judicial decisions of the Security Council, in his earlier enquiry into the administration of international justice, even more fitting: [W]here do we find the consent of those affected by a quasi-judicial decision of the Security Council to the exercise by that organ of such a jurisdiction? . . .  [W]e either have to identify a more remote act of consent or conclude that we are in the presence of a usurped power. Either way, it will be seen, the significance of consent – in the sense in which it has been relied upon by the ICJ and other international tribunals – is much reduced.4

Though the Statute is somewhat ambiguous in this respect,5 a referral by the Security Council has been confirmed as being subject to the rules on admissibility. Thus the Pre-Trial Chamber in the case of Darfur considered that the Security Council resolution was a valid referral under Article 13(b) of the Statute since, inter alia, there was an absence of criminal proceedings  In an explanation of its vote on the adoption of the Statute on 17 July 1998, the Indian representative stated: “The Statue will . . . give non-States Parties, working through the Council, the power to bind other non-States Parties. If that is indeed the intention, why have we gone through this charade of a Conference of Plenipotentiaries, and the agonizing over optional jurisdiction and State consent? Why wait now for signature and ratification?” Available at http://www.un.org/icc/speeches/717ind.htm (last accessed 13 November 2011). 4  Eli Lauterpacht, Aspects of the Administration of International Justice (Cambridge: Grotius, 1991), at 46. 5  See Jakob Pichon, “The Principle of Complementarity in the Cases of the Sudanese Nationals Ahmad Harun and Ali Kushayb before the International Criminal Court”, 8 International Criminal Law Review (2008) 185–228; Antonio Cassese, “The Statute of the International Criminal Court: Some Preliminary Reflections”, 10 EJIL (1999) 144–171, at 159. 3

30   Vera Gowlland-Debbas and Sudan had therefore shown its unwillingness or inability to prosecute.6 Similarly, in the case of Libya, the Prosecutor declared that despite certain proposals from Libya in that respect, his Office had not found any genuine national investigation or prosecution of the persons or conduct that would form the subject matter of the cases it would investigate.7 Generally speaking, the Council could of course still bypass the Statute by virtue of the operation of Article 103 of the Charter. While Article 103 is not applicable to the Court itself, a situation could arise in which Member States’ obligations under the Charter would have to prevail over those of the ICC in case of conflict. This would mean that member States would be obliged to cooperate with the Court regardless of the provisions on admissibility on the basis of a mandatory SC resolution to this effect (Article 48(1) of the Charter is also applicable).8 One could consider also that the State in question is “unable to carry out” the proceedings by virtue of the Council’s mandatory decision.9 This is an interesting illustration of how the linkage between the Security Council’s discretionary powers and the ICC has effects on State and individual rights. Another issue arising from both the Darfur and Libya referrals is that contrary to Article 115 of the Statute the resolutions require that no funding for the investigation into the Darfur situation shall come from the United  See The Prosecutor v. Ahmad Muhammad Harun (‘Ahmad Harun’) and Ali Muhammad Al Abd-Al-Rahman (‘Ali Kushayb’), Pre-Trial Chamber I, Decision on the Prosecution Application under Article 58(7) of the Statute, (ICC-02/05-01/07-1), 27 April 2007, at §§ 4–5. The Ad Hoc Counsel for the Defence also raised a challenge to the jurisdiction of the Court. See the defence arguments before Pre-Trial Chamber I (Claim for an exception to jurisdiction and admissibility), (Case No.: ICC-02/05) 9 October 2006), interpreting Article 13(b) as only applicable to States parties and citing inter alia, an apparent contradiction between Article 11(2) on non-retroactivity and Article 13 on referral should Article 13(b) be interpreted otherwise. But see Luigi Condorelli and Santiago Villalpando, “Referral, and Deferral, by the Security Council”, The Rome Statute for an International Criminal Court. A Commentary, in eds. Antonio Cassese et al. (Oxford: Oxford University Press, 2002), at 627; and Nigel White and Robert Cryer, “The ICC and the Security Council: An Uncomfortable Relationship”, The Legal Regime of the International Criminal Court (International Humanitarian Law), in eds. José Doria, Hans-Peter Gasser, M. Cherif Bassiouni, (Leiden: Brill, 2009), at 455–484. 7  First Report of the Prosecutor of the International Criminal Court to the UN Security Council pursuant to UNSCR 1970 (2011), at §§ 13–14. See also Office of the Prosecutor, “Informal expert paper: The principle of complementarity in practice” (2003), at §§ 68–69. Since this contribution was written, the Libyan authorities indeed began admissibility proceedings on 30 April 2012 challenging the admissibility of the case on the grounds that they were investigating Mr. Saif Al-Islam Gaddafi for allegations of crimes against humanity. 8  “Such decisions (of the Security Council) shall be carried out by the Members of the United Nations directly and through their action in the appropriate international agencies of which they are members.” 9  Condorelli and Villalpando, “Referral, and Deferral, by the Security Council”, at 637. 6

The Security Council and the ICC   31

Nations but must be borne by the States parties to the Rome Statute or from voluntary funds. The Council has thus also usurped the role of the General Assembly, which alone has the competence to approve such expenses. The question of whether the Security Council can and has lifted the immunity of heads of State or other high-level officials has been hotly debated in the case of Darfur in view of the arrest warrants issued by the office of the Prosecutor against President Bashir. The Pre-Trial Chamber has in its statements implied that the Security Council by acting under Article 13(b) has implicitly adopted Article 27 of the Statute and thus sanctioned the lifting of immunity.10 Similarly, in issuing arrest warrants against Muammur Gaddafi, his son Saif Al Islam Gaddafi and the head of the Libyan military intelligence, Pre-Trial Chamber 1 stated: At this juncture, the Chamber also notes that, consistent with its findings in the Al Bashir Case, the official position of an individual, whether he or she is a national of a State party or of a State which is not party to the Statute, has no effect on the Court’s jurisdiction.11

This is not the place to go into the question of whether States have an obligation under the Statute to lift the immunities of President Bashir if he comes through their territory. It has been pointed out that the tension between Article 27 and Article 98(1)12 of the ICC Statute is resolved if one interprets the obligation to give effect to immunity obligations under international law as owed only to non-State parties to the Statute. But the question has been raised as to whether the Security Council by way of referral could nevertheless impose an obligation on States to implement the ICC’s arrest warrant.13 While in the past Security Council resolutions have expressly sought to­

 The Prosecutor v. Omar Hassan Ahmad Al Bashir (‘Omar Al Bashir’), Decision on the Prosecution’s Application for a Warrant of Arrest against Omar Hassan Ahmad Al Bashir, PreTrial Chamber (Case No.: ICC-02/05–01/09) 4 March 2009, at §§ 41–45. See Dapo Akande, “The Legal Nature of Security Council Referrals to the ICC and its Impact on Al Bashir’s Immunities”, 7 Journal of International Criminal Justice (2009) 333–352, at 336. 11  Situation in the Libyan Arab Jamahiriya, Decision on the Prosecutor’s Application Pursuant to Article 58 as to Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Alsenussi, Pre-Trial Chamber I (Case No.: ICC-01/11) 27 June 2011, at § 9. 12  Article 27 of the Rome Statute provides that nobody enjoys immunity, substantial or procedural, before the Court. Yet, Article 98(1) states that “[t]he Court may not proceed with a request for surrender or assistance which would require the requested State to act inconsistently with its obligations under international law with respect to the State or diplomatic immunity of a person or property of a third State, unless the Court can first obtain the cooperation of that third State for the waiver of the immunity”. 13  See the discussion in Dapo Akande, “Security Council Referrals”; Paola Gaeta, “Does President Al Bashir Enjoy Immunity from Arrest?” 7 (1990) Journal of International Criminal Justice 315–332, who concludes that States parties to the Statute are not obliged to execute 10

32   Vera Gowlland-Debbas intervene in immunity issues before domestic courts, for example in the case of Iraq, and while it may be argued that the obligation of the Government of Sudan to cooperate with the Court under SC Res. 1593 on the basis of Article 25 of the Charter includes a lifting of the immunity of President Bashir, the Security Council has not expressly imposed such an obligation on all States. On the contrary, it has recognized that “States not party to the Rome Statute have no obligation under the Statute”. It has nonetheless ‘urged’ all States and concerned regional and other international organizations to cooperate fully with the ICC and reiterated this in SC Res. 1970 on Libya. The Security Council resolution may thus, as some have pointed out, act as an authorization to States, thus removing their responsibility under international law should they decide to implement the arrest warrant in order to give effect to the Security Council resolution, regardless of their obligations to respect the personal immunity of an acting head of State. The resolution on Darfur may be contrasted to the case of the immunity of the former President Charles Taylor in relation to the Special Court for Sierra Leone. SC Res. 1638 (2005) adopted on the basis of Chapter VII, mandated the UN Mission in Liberia to capture Taylor and in a binding Chapter VII resolution 1688 (2006), the Council requested all States to cooperate to ensure his appearance for trial. Admittedly by then he was only a former head of State. To conclude on the subject of referrals, the ICC Statute does nevertheless allow the Court to assert its independence in ensuring that referral of a situation by the Security Council does not automatically lead to proceedings in the Court, nor can the Council oblige the Court to act in view of the fact that the Court has la compétence de la compétence. The Prosecutor also has a certain discretion, for under Article 53 (2)(a–c) he/she can determine that there is not a sufficient legal or factual basis for an investigation or prosecution, that the case is inadmissible under Article 17, or that a prosecution would not be in the interests of justice. Despite the possibility that this may be reviewed by the pre-trial chamber, this is an added safeguard in respect of referral by a political organ. For the Council’s fact-finding may not correspond to the rigorous requirements for the initiation of a criminal justice process. Nevertheless, the Prosecutor has clearly stated that his discretion in this matter is of an exceptional nature and that there is a presumption in favor of investigation or prosecution; and he has carefully distinguished between the concepts of ‘the interests of justice’ in which the guiding criteria are the object and purpose of the Statute, namely the fighting of impunity, and the ‘interests of peace’, emphasizing that “the broader matter of the ICC request for surrender of President Al Bashir, and can lawfully decide not to comply with it, at 332.

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i­ nternational peace and security is not the responsibility of the Prosecutor; it falls within the mandate of other institutions.”14 B.  Justice as a Threat to Peace The final version of Article 16 of the Rome Statute15 introduced certain safeguards in providing that the Security Council must act affirmatively on the basis of a resolution adopted under Chapter VII requesting the Court to defer commencement or continuance of an investigation or prosecution. In such a situation, even a consensus among all five permanent members of the Council to block the Court would prove insufficient, while at the same time, the veto of only one of them would be sufficient to prevent such a deferral. Moreover, the temporal limitation of 12 months – although subject to renewal – was intended to act as an additional safeguard. However, SC Res. 1422 (2002) adopted on 12 July only a few days after the Statute came into force, raised concern once again over this provision by providing that cases . . . involving current or former officials or personnel from a contributing State not a Party to the Rome Statute concerning acts or omissions relating to a United Nations established or authorized operation, shall for a twelve-month period starting 1 July 2002 not commence or proceed with investigation or prosecution of any such case, unless the Security Council decides otherwise.

It also expressed its intent to renew this request yearly for “as long as may be necessary”, i.e. indefinitely. The resolution followed an intense public debate in which many questioned the legitimacy of the Security Council to interpret and change the meaning of an agreed treaty. Nevertheless, it was seen as a compromise that avoided the threat of a US veto against future United Nations peacekeeping operations. Although the resolution invoked the provisions of Article 16 of the Statute, it is debatable whether it was in conformity with it both as regards the resolution’s text and intent, as well as the object and purpose of the Statute. The source of the threat to the peace was unclear, the resolution expressly adopted under Chapter VII merely stated in its preamble that “it is in the  See Office of the Prosecutor, Policy Paper on the Interests of Justice, September 2007, at § 6. Available at www.icc-cpi.int (last accessed 13 November 2011). 15  “No investigation or prosecution may be commenced or proceeded with under this Statute for a period of 12 months after the Security Council, in a resolution adopted under Chapter VII of the Charter of the United Nations, has requested the Court to that effect; that request may be renewed by the Council under the same conditions.” The Council can also prevent an investigation that is on-going as long as a definitive judgment is not given, including effectuating the release of arrested persons. 14

34   Vera Gowlland-Debbas interests of international peace and security to facilitate Member States’ ability to contribute to operations established or authorized by the United Nations Security Council”. The request to the Court was made in generic terms, not in regard to a specific situation to be examined on its merits, appearing to go against the tenor of Article 16, which was not intended to give blanket immunity to a particular class of individuals. In short, the resolution would have called into question the principle of equality of individuals before the law by serving to shield certain individuals from the administration of justice. This has been seen as incompatible with basic principles of international criminal justice.16 The Secretary-General saw renewal of such a resolution as a barrier to the promotion of the rule of law in international affairs. Nevertheless, it cannot be seen, as some have done, as a de facto amendment of the Statute,17 for insofar as the legal effect of the request on the Court is concerned, it can only bind it within the framework of the Court’s Statute which is the only instrument to govern the jurisdiction and functioning of the Court (Article 1). It would therefore be up to the Court to determine its own competence and to decide whether it has been properly barred from action under its own Statute. The resolution’s intent to renew this request yearly though not expressly counter to Article 16 was considered to be contrary to its spirit. Nevertheless, the resolution was expressly renewed only once by SC Res. 1487 (2003), and expired in June 2004, after the Secretary-General demonstrated his strong opposition to its renewal in the light of prisoner abuse in Iraq. But aside from resolution 1422, other resolutions have likewise granted immunity to the nationals of third party States in the context of peacekeeping: SC Res. 1593 on Darfur strangely recalls in the preamble the provisions  See Eric David, “La cour pénale internationale”, 313 (2005) RCADI 325–454, at 352; and generally, Carsten Stahn, “The Ambiguities of Security Council Resolution 1422 (2002)”, 14 (2003) EJIL 85; Charles C. Jalloh, Dapo Akande and May du Plessis, “Assessing the African Union Concerns about Article 16 of the Rome Statute of the International Criminal Court” 4 (2001) African Journal of Legal Studies 5–50. 17  In a letter signed by the Ambassadors of New Zealand, South Africa, Brazil and Canada dated 12 July 2002, it is also stated: that in addition to the question of the legitimacy of the Security Council’s arrogating to itself the right to interpret and to change the meaning of treaties, its “action is damaging international efforts to combat impunity, the system of international justice, and our collective ability to use these systems in the pursuit of international peace and security”. Other States such as Germany and the Netherlands opposed the resolution (see UN Doc. S/PV.4568). But see the controversial view of the Appeals Chamber of the Special Court for Sierra Leone in The Prosecutor v. Fofana, Decision on Preliminary Motion on Lack of Jurisdiction Materiae: Illegal Delegation of Powers by the UN (Case No.: SCSL 2004-14-AR72(E)), 25 May 2004, § 28, that the Security Council could alter a treaty entered into with a State owing to Article 103 of the UN Charter. 16

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of Article 16 rather than Article 13(b) on referral – thus bringing in resolution 1422 through the back door – though the operative part of the resolution which grants a blanket immunity to nationals of non-State parties from the Court’s jurisdiction, is clearly not in conformity with Article 16.18 Nor can this be seen as an exception to Article 13(b) since referrals relate to situations not persons or categories of persons; the Prosecutor had refused to limit the referral by Uganda under Article 13(a) of the Statute to the situation “concerning the Lord’s Resistance Army” in northern Uganda. While as the Secretary-General points out, it is improbable that any peacekeeper would commit the kinds of systematic and widespread crimes under the jurisdiction of the ICC, resolution 1422 it must be remembered, covered also authorized military action, very different from peacekeeping operations and usually undertaken without the control of the United Nations. Thus, in SC Res. 1970 on Libya, the Council similarly makes explicit reference to Article 16 and decides that . . . nationals, current or former officials or personnel from a State outside the Libyan Arab Jamahiriya which is not a party to the Rome Statute of the International Criminal Court shall be subject to the exclusive jurisdiction of that State for all alleged acts or omissions arising out of or related to operations in the Libyan Arab Jamahiriya established or authorized by the Council . . . 

The peace vs. justice debate was refueled with the indictment of President Bashir of Sudan and led to calls within the UN to resort to the Council’s powers under the Court’s Statute to block it. The action of the ICC in issuing an arrest warrant has been criticized by both the League of Arab States and the African Union (AU),19 as was the Security Council referral of the  The Council in § 6: “Decides that nationals, current or former officials or personnel from a contributing State outside Sudan which is not a party to the Rome Statute of the International Criminal Court shall be subject to the exclusive jurisdiction of that contributing State for all alleged acts or omissions arising out of or related to operations in Sudan established or authorized by the Council or the African Union, unless such exclusive jurisdiction has been expressly waived by that contributing State.” The Security Council had also insisted on the inclusion of such provisions in the Statute of the Special Court for Sierra Leone and in Resolution 1497 (2003) relating to the setting up of a multinational force in Liberia, excluding the jurisdiction of the Special Court and the ICC, respectively, over peacekeepers or the personnel of contributing States not parties to the Rome Statute. Some States expressly stated that this jurisdictional immunity was incompatible with the Rome Statute as well as being in violation of international law, e.g. under the principle of universal jurisdiction or the passive personality principle. See the objections voiced in S/PV.4803 by Mexico, at 2–3, Germany, at 4, France, at 7. 19  Statement of the extraordinary session of the Ministerial Council of the League of Arab States to examine the developments in Darfur region, 8 August 2008; Communiqué of the 142nd meeting of the Peace and Security Council of the African Union, 21 July 2008. The Organization of the Islamic Conference and the Non-Aligned Movement had similar 18

36   Vera Gowlland-Debbas situation in Libya and the issuance by the ICC of arrest warrants against Muammar Gaddafi, his son and the head of Military Intelligence.20 The AU appealed to the Security Council to defer the action of the ICC for at least 12 months under Article 16 of the Statute. The Security Council in adopting resolution 1828 (2008) on the renewal of the mandate of UNAMID, the AU/ UN operation in Darfur, while reaffirming the need to bring to justice the perpetrators of the crimes in Darfur, merely took note of the AU concerns. As was to be expected, the Council was sharply divided on this issue, with Russia and China expressing support for action to suspend the indictment of the Sudanese leader. C.  Peace Sustaining Justice: Enforcement of Cooperation by the Security Council The Security Council has also been enlisted as an enforcement mechanism by the ICC under Article 87 (5) and (7) in instances of non-cooperation by State and non-State parties in matters which it has referred to the Court. While the Statute does not expressly mention how this enforcement is to take place, the Security Council could consider such refusals to cooperate as a threat to international peace and security thus enabling it to act under Chapter VII of the Charter. It could presumably also decide to do so in cases previously referred to the Court by a State or initiated by the Prosecutor proprio motu. Its powers under the Charter also enable it to act vis-à-vis non-State parties. In the case of Darfur, the Security Council resolution imposed on Sudan and “all other parties to the conflict” a duty to cooperate fully with the Court and invited the Prosecutor to address the Council every six months on actions taken pursuant to resolution 1593. Acting on the basis of the Council’s resolution, the Pre-Trial Chamber has been able to issue requests under Article 87(5)(a)21 to all Security Council members not parties to the Rome Statute for the arrest and surrender of suspects arraigned before the ICC on the basis that a Chapter VII resolution can provide an “appropriate basis” for cooperation. In the case of Libya, the Chamber also in its dispositif reactions. See also statements by some of the permanent members during the debate in S/PV.5947 See Annalisa Ciampi, “The Proceedings against President Al Bashir and the Prospects of their Suspension under Article 16 ICC Statute” 8 (2008) Journal of International Criminal Justice 885–897. 20  Situation in the Libyan Arab Jamahiriya, Decision on the Prosecutor’s Application Pursuant to Article 58 as to Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Alsenussi, Pre-Trial Chamber I (Case No.: ICC-01/11) 27 June 2011. 21  Article 87 (5)(a) provides that: “The Court may invite any State not party to this Statute to provide assistance under this Part on the basis of an ad hoc arrangement, an agreement with such State or any other appropriate basis.” See also Article 17 of the Relationship Agreement between the ICC and the UN.

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addressed a request for cooperation in the arrest and surrender of the suspects not only to the Libyan authorities and to all States Parties to the Statute, but also to Libya’s neighbours, as well as to UN Security Council members who were not States ­parties.22

III.  The Relationship between Judicial and Political Organs The various linkages which the Security Council entertains with the International Criminal Court raises the question also of the relationship between political and judicial organs. A.  The Role of the Council’s Quasi-Judicial Determinations of an Act of Aggression in Triggering the Court’s Jurisdiction It has been shown that the integration of the functions of the Security Council into the Statute may set challenges to the independence of the Court since both bodies are operating in similar types of situations, while acting in different fields of law, the one involving State, the other individual responsibility. The problem lies in that the quasi-judicial determinations of the political organ may have an impact on the judicial one. This is illustrated by the role to be played by the Security Council in the ICC in relation to the crime of aggression. At the Rome conference, the controversy surrounding the crime of aggression and the role of the Security Council was temporarily resolved by means of shelving it. While aggression, one of the most hotly debated issues, was finally incorporated into the Statute as one of the core crimes within the jurisdiction of the Court under Article 5, it would only become operative once a legal definition was incorporated into the Statute, along the same lines as the other Statute crimes, and the conditions set out for the exercise of the Court’s jurisdiction in respect of it. One major bone of contention in Rome in drafting the Statute was whether the Security Council should have the exclusive prerogative to determine an act of aggression by the State concerned before proceedings against particular individuals could be initiated before the Court. Article 5(2) of the Statute (which has now been deleted) did not refer to the Security Council but merely stated that “[s]uch a provision shall be consistent with the relevant provisions of the Charter of the United Nations.”  Situation in the Libyan Arab Jamahiriya, Decision on the Prosecutor’s Application Pursuant to Article 58 as to Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Alsenussi, Pre-Trial Chamber I, (Case No.: ICC-01/11) 27 June 2011.

22

38   Vera Gowlland-Debbas In an explanation of its vote, the United States had expressed the view that the Statute must recognize the role of the Security Council in determining that aggression has been committed, and that no State party could derogate from the powers of that body under the Charter. The United Kingdom also declared that Article 5(2) would be interpreted as meaning that the Security Council should make a prior determination of aggression. Finally the Kampala Review Conference in June 2010, after two weeks of intense debate and years of preparatory work, adopted by consensus on the final day, amendments to the Rome Statute which include a definition of the crime of aggression and a regime establishing how the Court will exercise its jurisdiction over this crime reflecting the difficult and complex compromise that ended the work of the Special Working Group on the Crime of Aggression (established in 2003). Briefly, a new Article 8bis of the Statute defines the individual crime of aggression as the planning, preparation, initiation or execution by a person in a leadership position of an act of aggression, the crime of aggression presupposing the existence of an act of aggression by a State. Paragraph 2 of Article 8bis bases the definition of an act of aggression on the 1974 GA Res. 3314 (XXIX) on the definition of aggression. Importantly, it contains the threshold requirement that the act of aggression by its character, gravity and scale constitutes a manifest violation of the Charter of the United Nations. More relevant in the context of this contribution are the conditions for the exercise of jurisdiction: the triggers for referrals to the ICC and in particular the relationship that should exist between the ICC and the Security Council.23 The central debate was on the primacy or prerogative of the Security Council in the matter of aggression. Unsurprisingly, the two permanent members of the Security Council who were States Parties, the United Kingdom and France, reiterated their view that the Security Council should be the only trigger for the prosecution of a crime of aggression, having the exclusive competence over a determination of an act of aggression by a State. Divergent findings on the latter could undermine the legitimacy of both political and judicial bodies.24 The majority of the States, however, insisted on ­limiting  For the relevant amendments adopted, see Official Records, Review Conference of the Rome Statute of the International Criminal Court, Kampala, 31 May to 11 June 2010, RC/11, Annex I, at 18–20. Available at http://www.icc-cpi.int/iccdocs/asp_docs/ASP9/OR/ RC-11-ENG.pdf (last accessed 13 November 2011). 24  Official Records, Review Conference of the Rome Statute of the International Criminal Court, Kampala, 31 May to 11 June 2010, RC/11, Annex VIII, Statements by States Parties in explanation of position after the adoption of resolution RC/Res.6 on the crime of aggression, 23

The Security Council and the ICC   39

the involvement of the Security Council and allowing the Prosecutor to proceed under certain conditions and internal judicial filters in the absence of a determination of aggression by the Security Council. They stressed the need for the Court to be able to act independently and to avoid politicization, with a view to ending impunity. The compromise finally reached was that all three jurisdictional “triggers” in Article 13 of the Rome Statute would apply to the crime of aggression. Under Article 15bis, the amendments would only come into effect one year after 30 ratifications of the amendment have been received and on the basis of a decision taken after 1 January 2017 by the same majority of States parties required for adoption of an amendment to the Statute under Article 121(5).25 There is also an opt-out clause for States parties,26 while non-State parties would be excluded altogether from the ICC’s jurisdiction (i.e. when the crime of aggression is committed either by one of their nationals or on their territory) unlike in respect of the other core crimes.27 It should be noted however that the ‘opt out’ option and the exclusion of the nationals of France, US and UK, at 122 and 124, respectively. Available at http://www.icc-cpi.int/ iccdocs/asp_docs/ASP9/OR/RC-11-Annexes-ENG.pdf (last accessed 13 November 2011). 25  Article 121(5) reads: Any amendment to articles 5, 6, 7 and 8 of this Statute shall enter into force for those States Parties which have accepted the amendment one year after the deposit of their instruments of ratification or acceptance. In respect of a State Party which has not accepted the amendment, the Court shall not exercise its jurisdiction regarding a crime covered by the amendment when committed by that State Party’s nationals or on its territory. 26  For the ambiguities arising from this clause, see Dapo Akande, “What Exactly was Agreed in Kampala on the Crime of Aggression?” EJIL Talk, 21 June 2010. Available at http://www .ejiltalk.org/what-exactly-was-agreed-in-kampala-on-the-crime-of-aggression/#more-2249 (last accessed 13 November 2011). 27  Under Article 15bis 1. The Court may exercise jurisdiction over the crime of aggression in accordance with article 13, paragraphs (a) and (c), subject to the provisions of this article. 2. The Court may exercise jurisdiction only with respect to crimes of aggression committed one year after the ratification or acceptance of the amendments by thirty States Parties. 3. The Court shall exercise jurisdiction over the crime of aggression in accordance with this article, subject to a decision to be taken after 1 January 2017 by the same majority of States Parties as is required for the adoption of an amendment to the Statute. 4. The Court may, in accordance with article 12, exercise jurisdiction over a crime of aggression, arising from an act of aggression committed by a State Party, unless that State Party has previously declared that it does not accept such jurisdiction by lodging a declaration with the Registrar. The withdrawal of such a declaration may be effected at any time and shall be considered by the State Party within three years. 5. In respect of a State that is not a party to this Statute, the Court shall not exercise its jurisdiction over the crime of aggression when committed by that State’s nationals or on its territory.

40   Vera Gowlland-Debbas non-State parties from ICC jurisdiction does not apply to Security Council referrals. In accordance with a new Article 15ter, the Court may exercise jurisdiction over the crime of aggression on the basis of a Security Council referral under Article 13(b). But the Security Council no longer has an exclusive prerogative to trigger the Court’s jurisdiction as had long been proposed. Under Article 15bis, the most controversial provision, the Prosecutor may initiate an investigation in relation to the crime of aggression proprio motu or upon a request from a State party, after first ascertaining whether the Security Council has made a determination of the existence of an act of aggression by a State (under Article 39 of the UN Charter) and on this basis the Prosecutor may proceed. But should the Council fail to act within six months, the Prosecutor may nevertheless proceed with the investigation after obtaining prior authorization from the entire Pre-Trial Division. To establish a time-frame within which that determination has to be made after which the Court may proceed itself is a more fitting reconciliation of the prerogatives of the Security Council with the independence of the Court and is similar to the compromise found in Article 16 relating to the competence of the Security Council to defer action by the Court. Moreover, the Security Council could still use its prerogatives under Article 16 to defer action also in relation to aggression. Draft proposals which had been put before the Working Group to have the Council effectively control access to the Court in so far as aggression by a State was concerned with no stipulated time limits would have been problematic.28 It should be pointed out in passing that the Security Council has so far not made a formal finding of an act of aggression under Article 39. When it has on occasion expressed concern over acts of States that it has qualified as aggressive, it has not done so as part of a formal determination under Article 39.29 This ambiguous language would make it very difficult for the Court to rely on such a finding. Moreover, as was pointed The same conditions for entry into force of the amendments apply under Article 15ter relating to a Security Council referral. 28  The judges on the ICTY, consulted on the ILC Draft Statute in 1995, had stated: “It does not seem necessary to provide that the court defer to the Security Council on the subject of aggression, the effect of which would be to give the Security Council, and in particular the permanent members, exclusive rights of definition over the term ‘aggression’, making it the ‘mouth of the oracle’ for this category of crimes. The Tribunal’s judges respectfully suggest that this would be an undesirable outcome.” See Ad Hoc Committee on the Establishment of an International Criminal Court, 3–13 April 1995, Comments received pursuant to paragraph 4 of General Assembly Resolution 49/53 on the Establishment of an International Criminal Court, Report of the Secretary-General (UN Doc.A/AC.244/1) 20 March 1995, at 30. 29  For example, it branded as aggressive only the acts of violence by Iraq against diplomatic missions and their personnel in Kuwait (SC Resolution 667 (1990)), not the actual invasion of Kuwait, although the latter entailed reparations.

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out in the debates, the in-built voting system within the Security Council would inevitably have led to double standards and to one-sided prosecutions, whereby the crimes of only one side to the conflict might be prosecuted (e.g. war crimes committed in the course of a war against an aggressor), while the other side could enjoy impunity for the act of aggression. It has been argued that the respective roles of the Security Council and the ICC would be complementary, not contradictory: once the Council had qualified an act of the State as aggression, the Court could then play its role in establishing individual criminal responsibility. But this is premised on a clear-cut separation of State from individual responsibility which may not be the case in practice, for there is no watertight division, as the ICJ has demonstrated in the Application of the Genocide Convention Case. Both articles 15bis and 15ter note that any determination by an organ outside of the Court will be without prejudice to the Court’s own finding of an act of aggression, thus guaranteeing judicial independence in the application of the substantive law. Were the Council to have had exclusive responsibility to determine through a political decision that a State had committed an act of aggression and were this finding to be authoritative for, and non-­reviewable by, the Court, this could have had the effect, for instance, of depriving a Head of State or other high official of the presumption of innocence or a legal defense such as a claim of self-defense. For how indeed could the Court reach a decision that the Head of State was not guilty of aggression after the Council had determined the State itself to be the aggressor? Such Security Council determinations have had therefore the potential to seriously impact on the legal position of an individual brought before the Court. Moreover, the Council would neither be bound by the definitions contained in the 1974 General Assembly resolution, nor for that matter by the definition of aggression included in the Statute of the International Criminal Court. Nevertheless, the Court will find it difficult to come to a conclusion different from that of the Security Council. Some States considered that the final proposals that did not retain the exclusive competence of the Council in the matter of aggression were not in conformity with the UN Charter. Undeniably, the Security Council has priority under the UN Charter in respect of the qualification of aggression and its consequences. But as the International Court of Justice has classically stated, primary does not mean exclusive responsibility in matters of international peace and security and UN practice has borne this out. The General Assembly has itself assumed the competence to define aggression in GA Res. 3314 (admittedly without mandatory force) and the Uniting for Peace Resolution had envisaged, in the absence of a Security Council determination of an act of aggression, resort to a General Assembly qualification. Moreover, draft proposals before the Working Group on Aggression

42   Vera Gowlland-Debbas had also proposed in the absence of a Security Council determination of an act of aggression, resort to the General Assembly. A determination of an act of aggression by the International Court of Justice had also been considered in earlier proposals as a trigger to the ICC’s jurisdiction. The ICJ has never considered itself debarred from a case in which aggression was alleged which meant that it could also reach its own separate qualification of such acts.30 Admittedly, such a determination by the ICJ would be dependent on a jurisdictional basis and hence on the prior consent of the alleged aggressor State. It is also true that the ICJ has so far deliberately avoided branding a State as an aggressor.31 B.  The Relationship between Judicial and Political Organs: Questions of Hierarchy and of Deference The ICC’s formal relationship with the United Nations is one based on consultation and coordination, not deference, in which each institution agrees to respect the mandate of the other. Yet as has been seen, the mechanisms by which the functions of the Security Council have been integrated into the Statute may set challenges to the independence of the Court. The fields of operation ratione materiae of the Council and the Court, though not identical, overlap, for both bodies are operating in the kinds of situations most likely to constitute threats to international peace and security. On the other hand, they operate ratione personae in different fields, the one involving individual, the other State, responsibility. The problem lies in that the quasijudicial determinations in the political organ have an impact on the judicial one and may in fact intervene in its functioning. This does raise areas of potential conflict. How does one avoid conflicts between political and judicial dispute settlement bodies in the absence of a hierarchical system? Which has to defer to the other? The relationship between the Security Council and other judicial bodies shows how this can be worked out in practice.  See Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America) (‘Nicaragua Case’), Jurisdiction & Admissibility, [1984] I.C.J. Reports 209, at 432, in which the Court did not shy away from examining responsibility in matters of aggression, armed attack and self-defense, despite arguments from the United States that these were non-justiciable issues, stating that “even after a determination under Article 39, there is no necessary inconsistency between Security Council action and adjudication by the Court”; see also Dissenting Opinion of Judge Schwebel, Nicaragua Case, Merits, Judgment, [1986] I.C.J. Reports 14, at 287–93, who pointed out that nothing in the Charter or travaux préparatoires supports the view that it was the intent of the drafters of the Charter to vest the determination of acts of aggression exclusively in the Security Council. 31  See e.g. Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda) Judgment, [2005] I.C.J. Reports 168, separate opinion of Judge Simma, at § 3. 30

The Security Council and the ICC   43

Two of the judicial organs established under the United Nations Charter – the ICJ and the ICTY – have refused to defer to the Security Council, and that notwithstanding differences in their Charter status (the one a principal organ of the UN, the other a subsidiary organ of the Security Council). The International Court of Justice has itself pointed out in a number of cases (Tehran Hostages Case, Nicaragua, Lockerbie) that the only form of litispendence in the Charter – that implied in Article 12 which expressly forbids the General Assembly “to make any recommendation with regard to a dispute or situation while the Security Council is exercising its functions in respect of that dispute or situation” – coordinates the jurisdiction of the two political organs and has not been replicated in the Charter in respect of the relationship between the International Court of Justice and the Security Council. It has consequently argued that there is clearly no hierarchy there between political and judicial organs, and that even where it is led to enter the field which is the Council’s primary responsibility, it is not obliged to defer to the Security Council.32 In cases in which the ICJ has been faced with the question of concurrent jurisdiction, it has always maintained that: “The Council has functions of a political nature assigned to it, whereas the Court exercises purely judicial functions. Both organs can therefore perform their separate but complementary functions with respect to the same events”.33 But it has been seen in the Lockerbie case that where the Security Council is acting under the mandatory provisions of Chapter VII its quasi-judicial determinations have had definitive legal effects as well as extensive legal consequences. Thus it has been held that a clear division of functions between the Security Council and the ICJ along the lines of a political/legal dichotomy is tenable, “so long as no aspect of these political solutions adopted by the Council sets aside, rules out or renders impossible the juridical solution expected of the Court”.34 As for the two ad hoc criminal tribunals, these have assumed a dual role, going beyond their status as subsidiary organs and appealing to their inherent judicial powers necessary for the fulfillment of their purpose, i.e. the administration of justice. Thus the ICTY Appeals Chamber distinguished its ‘primary’ from its ‘incidental’ or ‘inherent’ jurisdiction which derived from  See United States Diplomatic and Consular Staff in Tehran (United States v. Iran), [1980] I.C.J. Reports 3, at 22; Nicaragua Case [1984] I.C.J. Reports 209, at 433. 33  Case Concerning Questions of Interpretation and Application of the l97l Montreal Convention Arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya vs. United States of America/Libyan Arab Jamahiriya v. United Kingdom) Provisional Measures [1992] I.C.J. Reports 3, declaration of Judge Ni at 134 and 22, respectively, citing Nicaragua Case, Jurisdiction and Admissibility [1984] I.C.J. Reports 209, 434–435. 34  Ibid., dissenting opinion of Judge Bedjaoui, at 154 and 44, respectively. 32

44   Vera Gowlland-Debbas the exercise of the judicial function, refusing to regard itself exclusively as a ‘subsidiary organ of the Security Council – “a ‘creation’ totally fashioned to the smallest detail by its ‘creator’ and remaining totally in its power and at its mercy”. It is true of course, as the Tribunal goes on to say, that such inherent judicial powers as the principle of ‘compétence de la compétence’ can be limited by an express (though not inferred) provision in the Tribunal’s constitutive instrument, but in the view of the Tribunal “the latter possibility is controversial, particularly where the limitation risks undermining the judicial character or the independence of the Tribunal”.35 These arguments are even more pertinent in relation to a court that has its own independent legal basis, even though the Security Council’s enforcement mechanisms have been more closely woven into its Statute than the tribunals created by the Council itself.

IV.  Conclusion The role bestowed on the Security Council by the Court’s Statute puts to the test the need for the independence and impartiality of the ICC as a judicial organ. This has been one of the main stakes in modeling a workable relationship between the Security Council and Criminal Court. So far, though the Council has somewhat addressed these concerns and has manifested a cooperative attitude, both in its referral to the ICC and in not pursuing its deferral under resolution 1422. The amendments adopted at the Kampala Review Conference have also addressed the problem of Security Council constraints on the Court in the matter of the crime of aggression but which remain to be worked out in the practice once these amendments come into force. The question remains of the unity or coherence of the legal system. On the one hand, there is a need to develop and increase the effectiveness of international institutions to ensure the respect and enforcement of certain norms vital to the international community as a whole. Through its participation in the institutionalization of international criminal law, the Council has contributed indirectly to the development by criminal jurisdictions of ­international criminal law and procedures and hence to the furtherance of criminal justice. The Council has also insisted that the criminal tribunals

 Tadic Case, 7–9; see also the Special Court for Sierra Leone, Prosecutor v. Norman, Fofana, Kondewa (Case No.: scsl-04-14-A). Decision on prosecution appeal against the trial chamber’s decision of 2 August 2004 refusing leave to file an interlocutory appeal, 17 January 2005, § 31–32, confirming its inherent jurisdiction and the need to assume powers necessary for the fulfilment of its purpose, i.e. the administration of justice.

35

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it has created or has been associated with rigorously adhere to fundamental rules of criminal justice, including due process. At the same time, the interlocking of collective security mechanisms with the hybrid process of institutionalization of international criminal responsibility underlines the many risks involved in developing international law through a process that includes the ad hoc and piecemeal reactions of a political organ to particular crises, particularly in respect of the coherence of international law. This is well illustrated by the controversial creation of the Special Tribunal for Lebanon based on debatable legal grounds and which has, far from contributing to reconciliation of divided populations, affected the stability of the country concerned, as well as raised questions as to the coherent development of an international criminal justice system. In view of the pivotal role the Security Council has assumed in recent times, it would have been impractical to deny the Council any role at all in the forging of a system of individual criminal responsibility, and its linkage with the ICC can undoubtedly contribute to the latter’s authority. But this linkage must be tempered to ensure safeguards both for the rights of States and for those of individuals, in accordance with general principles of criminal law. This is only to underline the importance of viewing the relationship between the Security Council and the International Criminal Court, and the manner in which diplomatic means may trigger judicial action, not only as a technical and specialized question of international criminal justice but also as raising important systemic issues.

Chapter Four The Impact of Arrest Warrants Issued by International Criminal Courts on Peace Negotiations Paola Gaeta and Lyne Calder

I.  Introduction In perhaps no other arena is the tension between law and politics, or diplomatic and judicial means of dispute resolution, more fraught and potentially incendiary than in the context of international criminal justice mechanisms in ongoing conflicts. The crimes involved are the most heinous ones; the suspects are often leaders who still retain a great deal of political and military power; the perpetuation of long and bloody conflicts has devastating effects on an already long-suffering civilian population. On the one hand, the current state of international criminal justice requires that these crimes be ­investigated and the suspects prosecuted: the rule of law must be upheld. On the other hand, peace must be negotiated to ensure the cessation of hostilities. In this context, the issuance of an arrest warrant by an international criminal court against a sitting head of state, or rebel leader with the power to settle on a possible peace agreement, creates a fundamental tension between the interests of justice and the possibility of negotiating a cessation to ­hostilities. The complexity of international criminal justice lies in its many diverse, and occasionally contradictory, aims. Indeed, not only is the establishment of international criminal courts intended to punish the worst crimes, but it also has other aims, including preventing further criminal activity, contributing to the protection and reconciliation of the civilian population, bringing justice to the victims, and contributing to international peace and security. The question here is how these objectives can be achieved when the fighting is on-going and there is a pressing need to bring the armed conflict to

48   Paola Gaeta and Lyne Calder an end. What happens when the activity of an international criminal court no longer coincides with ensuring successful peace negotiations in the short term? What happens when an international criminal court issues an arrest warrant against a leader still in power, a leader who can play a crucial role in negotiating a successful peace settlement? Such a situation occurred for the first time in 1995, when the ICTY arrest warrant against Radovan Karadžić1 meant that he would not attend the peace talks in Dayton, jeopardising the negotiations in the eyes of many.2 Similar arguments were made in connection with the arrest warrants issued by the ICC against President Al Bashir of Sudan3 or against Muammar Gaddafi of Libya4 and other top members of those governments.5 This article will consider the various perspectives on the debate. It will then briefly focus on the prosecutorial discretion of the ICC Prosecutor under Article 53 of the Rome Statute,6 and consider to what extent the “interests of justice” can and do comprise consideration of political contingencies. We will argue that just as international law cannot be viewed in isolation from political realities, neither can political negotiators ignore the fact of international criminal justice mechanisms. We will suggest that international criminal justice has become a “political reality” and blanket amnesties are no longer an option. The only room for manoeuvre – an important one – lies not in whether an arrest warrant will be issued but in when it is released. That being said, international criminal justice requires the action of the international community to be fully effective.

 The Prosecutor v. Radovan Karadžić and, Ratko Mladić, ICTY Indictment (Case No. IT-955-I) 24 July 1995. 2  See Pierre Hazan, Justice in a Time of War: The True Story Behind the International Criminal Tribunal for the former Yugoslavia (College Station: Texas A&M University Press, 2004), at 64–89. 3  The Prosecutor v. Omar Hassan Ahmad Al Bashir, ICC, Pre-Trial Chamber I, Warrant of Arrest for Omar Hassan Ahmad Al Bashir, (Case No. ICC-02/05-01/09), 4 March 2009. 4  The Prosecutor v. Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Al-Senussi, ICC, Pre-Trial Chamber I, Warrant of Arrest for Muammar Mohammed Abu Minyar Gaddafi, (Case No. ICC-01/11) 27 June 2011. 5  See, for instance, the opposition to the warrant for Muammar Gaddafi by the African Union: Associated Press, “African Union Opposes Warrant for Qaddafi”, International Herald Tribune, 2 July 2011. Available at http://www.nytimes.com/2011/07/03/world/africa/03african .html (last accessed 25 July 2011); Richard Falk, “The International Criminal Court Plays Politics? The Qaddafi Arrest Warrants”, Wordpress, 29 June 2011. Available at http:// richardfalk.wordpress.com/2011/06/29/the-international-criminal-court-plays-politics-theqaddafi-arrest-warrants/ (last accessed: 25 July 2011). 6  Rome Statute of the International Criminal Court, adopted 17 July 1998 (UN Doc. A/ CONF.183/9), entered into force 1 July 2002. 1

The Impact of Arrest Warrants on Peace Negotiations   49

II.  Opposing Perspectives In discussing the merits and disadvantages perceived by proponents and opponents of the exercise of international criminal justice in ongoing conflicts it is helpful to borrow from the terminology propounded by Payam Akhavan, and distinguish two sets of opposing views: the political realists and the judicial romantics.7 For the political realists, the peace process – and the peace agreement – is the primary consideration. When peace is negotiated, rather than imposed, leaders must be presented with incentives to agree to peace. Immunity from prosecution is perceived as a vital bargaining chip, which must be kept firmly in the hands of political peace negotiators. The possibility of exile to a ­foreign country, in exchange for the cessation of hostilities and discreet abdication of power, is seen as a realistic, practical necessity. The judicial system, with its purported neutrality, is perceived as hampering the peace process by removing these ‘bargaining chips’ from the table. Most recently, the arrest warrant against Muammar Gaddafi8 had been violently criticised for reducing the options available to mediators.9 Rather than go discreetly into exile, ­Gaddafi saw his options so reduced that, these political realists claim, he had no option but to hang on to power in Libya. To quote the words used by Julie Flint and Alex de Waal in connection with the warrant against Al Bashir: it became, quite literally, a “fight to the death”.10 In supporting their position, political realists will refer to the amnesties provided by the South African Truth and Reconciliation Commission, an amnesty conditional upon the public confession of crimes committed by both sides. They will also emphasise amnesties in several UN-brokered peace agreements, such as Mozambique, El Salvador and Haiti.11 In particular, they will recall the disruption caused by the unsealing of the arrest warrant against

 Payam Akhavan, “Are International Criminal Tribunals a Disincentive to Peace? Reconciling Judicial Romanticism with Political Realism” 31 (2009) Human Rights Quarterly 624. As the author himself recognises, these polarised positions are exaggerated stereotypes. The distinction is helpful, however, to analyse these supposedly irreconcilable positions.  8  The Prosecutor v. Muammar Mohammed Abu Minyar Gaddafi, Saif Al-Islam Gaddafi and Abdullah Al-Senuss (Case No. ICC-01/11-01/11).  9  Associated Press, “African Union Opposes Warrant for Qaddafi”; Richard Falk, “The International Criminal Court Plays Politics? The Qaddafi Arrest Warrants”. 10  Julie Flint and Alex de Waal, “To put justice before peace spells disaster for Sudan”, The Guardian, 6 March 2009. 11  Elin Skaar, “Truth Commissions, Trials – Or Nothing? Policy Options in Democratic Transitions” 20 (1999) Third World Quarterly 1109.  7

50   Paola Gaeta and Lyne Calder Charles Taylor,12 President of Liberia at the time, by the first prosecutor for the Special Court for Sierra Leone, David Crane. Charles Taylor had just arrived in Accra (Ghana) to participate in a meeting with other West African leaders in an attempt to negotiate an end to Liberia’s civil war. The West African leaders were to attempt to persuade Charles Taylor to step down and accept asylum in Nigeria. Taylor found out about the arrest warrant upon his arrival in Accra and turned around, causing the collapse of the peace talks.13 The US Department of State reported that around one thousand people died as a result of the political violence, which increased between the failure of the Accra talks and the resignation of Taylor two months later.14 These same political realists will also refer to the case of the Lord’s Resistance Army (LRA) in Uganda waging a notoriously bloody war, involving the killing, raping and mutilation of the people of central Africa, stealing and brutalizing their children and displacing hundreds of thousands of people in the process, spanning more than twenty years. An ICC arrest warrant is pending against the LRA leader, Joseph Kony,15 who insists that he refuses to sign a peace agreement until the ICC drops the charges against him. The legal advisor to the chief mediator on the Ugandan peace process negotiations, Mr Barney Afako, has stated that in his own view the arrest warrant against the leadership of the LRA, and in particular the refusal by the ICC Prosecutor to withdraw the indictment and the arrest warrant against Joseph Kony, has had an impact on the latter’s refusal to sign the peace agreement reached at Juba.16 This peace accord provided, as an alternative mechanism of justice, a traditional reconciliation ritual, the so-called mato oput, in which the culprit drinks a potion made from a bitter root, confesses to his victims and makes amends. In particular, he stressed that “[j]ustice needs to be justified in terms of lives”, and asked how many more Acholi would need to be slaughtered before the ICC is in a position to try the LRA leaders. “The [international]  The Prosecutor v. Charles Ghankay Taylor AKA Charles Ghankay MacArthur Dapkpana Taylor, Indictment of Charles Ghankay Taylor, also known as Charles Ghankay MacArthur Dapkpana Taylor, (Case No. SCSL-03) 7 March 2003. 13  Kingsley Chiedu Moghalu, Global Justice: The Politics of War Crimes Trials (Stanford: Stanford University Press, 2008), at 109–111. 14  US Department of State: Bureau of Democracy, Human Rights and Labor, “Country Reports on Human Rights 2003 – Liberia”, 25 February 2004. Available at http://www.state.gov/g/ drl/rls/hrrpt/2003/27735.htm (last accessed 19 December 2011). 15  The Prosecutor v. Joseph Kony, Vincent Otti, Okot Odhiambo and Dominic Ongwen, ICC, Pre-Trial Chamber II, Warrant of Arrest for Joseph Kony (Case No. ICC-02/04-01/05), issued under seal on 8 July 2005, unsealed on 13 October 2005. 16  Barney Afako “No Quick Fix for the LRA”, The Guardian, 16 April 2009. Available at http:// www.guardian.co.uk/katine/katine-chronicles-blog/2009/apr/16/katine-joseph-kony-lra (last accessed 27 July 2011). 12

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criminal justice system is isolated from the moral consequences of its intervention”, he said.17 It must be stressed that part of the critical frenzy, rejecting the issuance of arrest warrants before the conclusion of a conflict, stems from the loss of control experienced by diplomats and mediators: an international criminal court, uncontrolled by either the parties to the conflict or the third parties involved in negotiations, is seen as unpredictable and thus potentially destabilising. The criticism surrounding the investigations in Uganda epitomise this concern. Another major concern for many critics relates to the loss of immunity for heads of state. Certain African heads of state mentioned this issue as the main cause of concern when the ICC arrest warrant was issued against Al Bashir.18 The judicial romantics on the other hand, consider that the interests of “justice” are not only of primary importance as an end in itself, but also that it is through the pursuit of such interests that a lasting and stable peace can be reached. For them, it is not about peace versus justice, as it is about reaching peace through justice. Peace, in their view, must come from a consistent policy of judicial prosecution. They emphasise the need for victims to obtain justice, and stress the role of international criminal law in the prevention and deterrence of further crimes. As such, criminal accountability can serve to (re)instate the rule of law and to deter a return to political violence in post conflict societies. Indeed, it has been argued that Milosevic’s participation in the Dayton negotiations (instead of his indictment for complicity in the ethnic campaign in Croatia and Bosnia Herzegovina) strengthened his belief that he could act with impunity and perpetuate criminal violence in Kosovo.19 In addition, it could be argued that the Lomé Agreement in Sierra Leone,20 which shared power and mining resources with the Revolutionary United Front (RUF) leader Foday Sandoh rather than pursuing perpetrators, contributed to inducing the RUF to violate the agreement less than a year later and attack

 Katy Glassborow, “Peace Versus Justice in Uganda”, Institute for War & Peace Reporting, Special Report, 15 February 2010. Available at http://iwpr.net/report-news/peace-versusjustice-uganda (last accessed 19 December 2011). 18  See, for example, AFP and Reuters, “Soudan: l’Union africaine veut interrompre la procedure contre Al-Bashir”, Le Monde, 17 April 2009. 19  Akhavan, “Are International Criminal Tribunals a Disincentive to Peace? Reconciling Judicial Romanticism with Political Realism”. 20  “Peace Agreement between the Government of Sierra Leone and the Revolutionary United Front of Sierra Leone”, signed 7 July 1999 (Lomé, Togo). Available at http://www.sierraleone.org/lomeaccord.html (last visited 19 December 2011). 17

52   Paola Gaeta and Lyne Calder UN peacekeepers.21 To express the need to fight impunity to deter further atrocity and build lasting peace, frequent reference is made to Hitler’s words to his ‘Death’s Head’ units on the eve of the invasion of Poland, ordering them to kill men, women and children because ‘[w]ho, after all, today speaks of the annihilation of the Armenians?’22 Judicial romantics also stress that arrest warrants can in fact lead to the marginalisation of a political leader, undermining their political clout and thus catalysing peace negotiations. In this context, judicial romantics will cite the marginalisation of Charles Taylor following the unsealing of the arrest warrant against him, and his withdrawal from the political arena two months later.23 They will also stress in this regard, the case of Karadžić who could no longer participate in the Dayton peace talks.24 The negotiations proved successful, despite critics arguing that the absence of Karadžić would make any settlement meaningless.

III.  Prosecutorial Discretion as a Tool to Reconcile ‘Romanticism’ and ‘Realism’ In the preceding section, we outlined two contrasting, stylised views. In order to come to any sort of conclusion about them, it is important to identify their different understanding of peace and their perception of time. Much of the political realist position rests on a ‘negative’ conception of peace: the focus is on settling upon a peace agreement that establishes a ceasefire, a cessation of violence and hostilities. Judicial romantics emphasise a notion of ‘positive’ peace, involving peace-building (rather than mere peace-keeping). The notion of ‘positive’ peace must be “meaningful, lasting and effective peace”, and requires the confluence of political, military, social and

 Akhavan, “Are International Criminal Tribunals a Disincentive to Peace? Reconciling Judicial Romanticism with Political Realism”. 22  Hitler briefed his generals at Obersalzburg in 1939 on the eve of the Polish invasion: “Genghis Khan had millions of women and men killed by his own will and with a gay heart. History sees him only as a great state-builder. . . . I have sent my Death’s Head units to the East with the order to kill without mercy men, women and children of the Polish race or language. . . . Who, after all, speaks today of the annihilation of the Armenians?” Cited in Norman Davies, Europe: A History (London: Pimlico, 1997), 909. 23  Kenneth A. Rodman, “Is Peace in the Interests of Justice? The Case for Broad Prosecutorial Discretion at the International Criminal Court” 22 (2009) Leiden Journal of International Law 99. 24  Akhavan, “Are International Criminal Tribunals a Disincentive to Peace? Reconciling Judicial Romanticism with Political Realism”. 21

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e­ conomic ­conditions.25 In general, the political realists will have a short-term perspective of the conflict. Their emphasis is on ending the conflict as soon as possible, and if that means deferring prosecution, then so be it. They are not necessarily opposed to arrest warrants being issued but are concerned with their timing: arrest warrants should not be issued against leaders while a conflict is ongoing. Judicial romantics base much of their argument on a long-term perspective: justice is necessary to reconcile warring factions to rebuild a society based on the rule of law. Arrest warrants should be issued based on the facts and the crimes, irrespective of political considerations. If we understand these differing conceptions of peace and time, the political realist and judicial romantic views are not necessarily irreconcilable. One cannot seriously deny that in situations of ongoing conflicts or fragile peace processes, in which those suspected and accused of war crimes are still in command and retain substantial power, an arrest warrant may jeopardise a swift resolution to the conflict. However, it is perhaps not so much a question of whether an indictment against a leader in power should be made public, but when: it becomes a question of the most appropriate timing. Indeed, if it is well-coordinated and the timing is right, negotiators recognise that the threat of an ICC investigation or the issuance of a warrant can be a political tool in negotiations. This is achieved by adding a cost to ongoing atrocities, thus shifting the cost-benefit analysis, and undermining the power of leaders. Stigmatisation can result in international isolation; erode political influence and military capability. Interestingly, the Rome Statute allows a small window of flexibility to manage potential contradictions between diplomatic and judicial considerations. Under Article 53 of the Rome Statute, the Prosecutor can indeed take into account the “interests of justice” in deciding whether to investigate and ­prosecute.26 The question, of course, is what exactly is included in these “interests of justice”, a formula which remains undefined in the Rome Statute. Should it be construed in such a broad manner as to include the “­interests

 Richard J. Goldstone “Bringing War Criminals to Justice during an Ongoing War”, Hard Choices: Moral Dilemmas in Humanitarian Intervention, in ed. J. Moore (New York: Rowman & Littlefield, 1998), at 200. 26  According to Article 53(1)(c): “[. . .] In deciding whether to initiate an investigation, the Prosecutor shall consider whether: [. . .] (c) Taking into account the gravity of the crime and the interests of victims, there are nonetheless substantial reasons to believe that an investigation would not serve the interests of justice”. Article 53(2)(c) continues, indicating that the Prosecutor can opt not to move from investigation to prosecution if it “[. . .] is not in the interests of justice, taking into account all the circumstances, including the gravity of the crime, the interests of the victims and the age or infirmity of the alleged perpetrator, and his or her role in the alleged crime”. See Rome Statute of the International Criminal Court. 25

54   Paola Gaeta and Lyne Calder of peace”,27 as has been suggested by some commentators?28 Should the ICC Prosecutor himself, an impartial judicial figure, consider political contingencies in deciding whether a particular case should go ahead? Or should the “interests of justice” be read more narrowly, as advocated by Amnesty International and Human Rights Watch in their policy documents,29 and instead limited to strictly prosecuting those most responsible for the gravest international crimes? At stake is the Prosecutor’s independence. The Prosecutor will have to justify his decision before the Pre-Trial Chamber, which will review it, and possibly reverse it. However, Article 53 does, in theory at least, allow the Prosecutor to decide whether, and when, to hold back prosecution and opt for alternative mechanisms, if doing so would hasten the conclusion of peace or persuade a dictator to step down. Clearly, the political realists support a very broad conception of prosecutorial discretion. With respect to the ICC, they argue that Article 53 allows for factoring the interests of peace negotiations in deciding whether or not to prosecute. The reference in Article 53 to the “interests of justice” is thus interpreted as giving primacy to the interests of peace negotiations. Meanwhile, the more legalist approach adopted by the judicial romantics focuses instead on the ICC’s role to prosecute those most responsible for serious international crimes, regardless of what role they may be expected to play in a potential peace process. They argue that only the evidence related to the crimes committed should be used to decide whether the prosecution’s case should go ahead. To allow political conjecture on the prospects of success in peace negotiations to interfere with the decision to defer (or halt) criminal prosecutions would violate the Prosecutor’s independence. This could potentially leave the Prosecutor vulnerable to manipulation by various warring factions. In early 2005, the Office of the Prosecutor was confronted with such a dilemma as it prepared to request an arrest warrant from the Pre-Trial Chamber for Joseph Kony and the LRA leadership, who are responsible for  Rodman, “Is Peace in the Interests of Justice? The Case for Broad Prosecutorial Discretion at the International Criminal Court”. 28  See statement from W. Bourdon in Luc Côté, “Reflections on the Exercise of Prosecutorial Discretion in International Criminal Law” 3 (2005) Journal of International Criminal Justice 162, at 178. 29  Martin MacPherson, “Open Letter to the Chief Prosecutor of the International Criminal Court: Comments on the Concept of the Interests of Justice”, 17 June 2005 (Amnesty International). Available at http://www.iccnow.org/documents/AI_LetterOTP_Interests_Aug05 .pdf (last accessed 19 December 2011); Human Rights Watch (HRW), “The Meaning of the ‘Interests of Justice’ in Article 53 of the Rome Statute”, Policy Paper, June 2005. Available at http://www.hrw.org/sites/default/files/related_material/2005_ICC_Interests_%20of_­ Justice.pdf (last accessed 19 December 2011). 27

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the abduction of more that 20,000 children as soldiers and sex slaves, and also for large-scale and widespread atrocities, principally against the Acholi population in Northern Uganda. The decision was publicly criticised by those who were trying to engage the LRA in peace talks.30 They argued, in line with political realist logic, that it would be a far better strategy to offer amnesty in exchange for demobilisation and employ traditional mechanisms of justice to reintegrate the LRA into the community. During the months between March and May the ICC Prosecutor, Luis Moreno Ocampo, met with various representatives of these groups, as well as victims and civil society groups. It was hinted at during press conferences given by the Office of the Prosecutor, that a delay in investigations might be envisaged to allow the peace process a chance to develop. Nevertheless, arrest warrants for Kony and four of his commanders were applied for in May, issued in July and unsealed in October 2005.31 In the proceedings initiated against Al Bashir and more recently against Gaddafi, the ICC Prosecutor had taken a strong stand against letting concerns about the peace process interfere with the exercise of his judicial function. Where evidence points to crimes having been committed by a particular suspect, those crimes must be investigated, no matter the suspect’s rank or role in finding a potential peace settlement. This view has been officially endorsed.32 For this stance the ICC Prosecutor has attracted praise and censure in equal measure. Indeed, the case against putting peace before justice was perhaps never so vocally criticised as during the months following the arrest warrant against Al Bashir, President of Sudan.33 A commentator has argued that history shows that “political factors – most notably the power of the perpetrators relative to the forces arrayed against them and the political strategies of the latter to address the conflict – determine when a criminal law approach is effective and whether it ­contributes to

 Adam Branch, “International Justice, Local Injustice: The International Criminal Court in Northern Uganda”, 51(3) (2004) Dissent 22; International Crisis Group, “Shock Therapy for Northern Uganda’s Peace Process”, Africa Briefing No. 23, 11 April 2005, at 5. 31  The Prosecutor v. Joseph Kony, Vincent Otti, Okot Odhiambo and Dominic Ongwen (Case No. ICC-02/04-01/05). 32  ICC – Office of the Prosecutor (OTP), “The Interests of Justice”, Policy Paper, September 2007. Available at http://www.icc-cpi.int/NR/rdonlyres/772C95C9-F54D-4321-BF0973422BB23528/143640/ICCOTPInterestsOfJustice.pdf (last accessed 19 December 2011). 33  See, for instance, Julie Flint and Alex de Waal, “To put justice before peace spells disaster for Sudan”. These authors reiterate a perspective already expounded in an article published in 2008: Julie Flint, Alex de Waal, and Sara Pantuliano, “ICC approach risks peacemaking in Darfur”, Letter to the Editor, The Guardian, 10 June 2008. 30

56   Paola Gaeta and Lyne Calder peace”.34 The Prosecutor should therefore exercise broad discretion in deciding whether to pursue a case, based on the political factors at play. This position has been endorsed by other critics who stress the Court’s role in enforcing international peace and security.35 However, this idea can also be viewed from the opposite angle. The same examples from history show that when there is political will to enforce and support a strong criminal justice system, the very strength of the justice system will influence the cost/benefit analysis that will influence a leader’s willingness to enter into negotiations. Indeed, if the criminal justice system is strong and allowed to operate impartially and thoroughly, if the legalistic ‘interests of justice’ are considered priorities, the political contingencies will be altered accordingly.36 In addition, as rightly emphasised by one commentator: “one cannot assume that if prosecutions are a potential disincentive to peace, then impunity will necessarily be an incentive”.37 Rather than arguing that international justice, and the Prosecutor in particular, should defer to the interests of peace, perhaps diplomats and peace negotiators should defer to the interests of justice – knowing that, in the long term, the interests of justice serve to instil a lasting, ‘positive’ peace.

IV.  Justice Cannot Stand Alone The positive or negative impact on peace negotiations of an arrest warrant against a leader in power is clearly a question of astute timing38 and necessarily entails some degree of uncertainty. Issuing an arrest warrant during an ongoing conflict is a gamble. In the best-case scenario, it could drastically weaken the position of the leader through diplomatic isolation and international (as well as, perhaps, domestic) pressure. In the worst case, it could  Rodman, “Is Peace in the Interests of Justice? The Case for Broad Prosecutorial Discretion at the International Criminal Court”, 101. 35  Steven Roach, Politicizing the International Criminal Court. The Convergence of Politics, Ethics and Law (Lanham: Rowman & Littlefield Publishers, 2006), at 6. 36  Gary Jonathan Bass, Stay the Hand of Vengeance: The Politics of War Crimes Tribunals (New Jersey: Princeton University Press, 2000), 20–28; Matthew R. Brubacher, “Prosecu­ torial Discretion within the International Criminal Court” 2 (2004) Journal of International Criminal Justice 71, at 73; Leslie Vinjamuri and Jack Snyder, “Advocacy and Scholarship in the Study of International War Crime Tribunals and Transitional Justice” 7 (2004) Annual Review of Political Science 345, at 346–352. 37  Akhavan, “Are International Criminal Tribunals a Disincentive to Peace? Reconciling Judicial Romanticism with Political Realism”, at 635. 38  For an analysis of the “astute timing” necessary in the issuance of the arrest warrant against Al Bashir, see: Christopher Gosnell, “The Request for an Arrest Warrant in Al Bashir: Idealistic Posturing or Calculated Plan?” 6 (2008) Journal of International Criminal Justice 841. 34

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strengthen his position and exacerbate the conflict. We would argue that neither of these two extremes are what we see in reality: the picture is rarely so black or white. The only way to reconcile the demands for peace with the demands for justice when a conflict is unfolding is to continue to build a culture where international criminal accountability is an unavoidable fact or, in other words, an inescapable ingredient of political life. The remarks of James LaMoyne, a UN mediator, seem apposite in this connection: “[i]t is very important”, he stressed, “that the parties involved in peace processes understand the fact that amnesty for the most serious crimes is no longer an option, that a new world has come into place.”39 In order to reconcile the demands of peace and justice, it is necessary that in the face of armed conflicts the international community is ready to exercise some form of credible coercive diplomacy, to try to change the perpetrators’ behaviour, to weaken them to the point where their cooperation is no longer necessary to end the conflict. In some circumstances this may require the resort to armed force, within the confines and in complete conformity with international law of course. It is only when the international community is willing and able to intervene to put an end to armed conflicts that peace and justice can go hand in hand, mutually reinforcing each other. In Bosnia, it was only when NATO was willing to use force, directly and indirectly through assistance to the Croat and the Bosnian military offences, that the conflict could come to an end, and the ICTY could make its contribution to peace by removing some leaders suspected of war crimes from the political arena. Similarly, in Sierra Leone, it was only with the British military intervention, following the attack by the RUF against five hundred UN peacekeepers, that peace and justice could be established. By referring to these examples, it is not our intention to suggest that the use of force is the only, or even the best, means to further the demands of peace and justice. Rather, our fundamental point is that neither the ICC prosecutor, nor international peace mediators can hope to meet these demands alone. Political and judicial means must support each other, and be fully supported by the international community. The world is now a different place than it was in 1990, at the time the Chilean dictator, Augusto Pinochet, stepped down from office. Immunity and impunity for international crimes is not an option, not even for powerful leaders unwilling to step down or heads of state perpetuating a conflict to hang on to power.  International Criminal Court, Review Conference of the Rome Statute, Kampala, (Doc. RC/ST/PJ/Rev.1), Stocktaking of International Criminal Justice, Peace and Justice, 22 June 2010, at § 10.

39

Section Two: Interaction During the Proceedings Before an International Court or Tribunal

Chapter Five Recourse to the International Court of Justice for the Purpose of Settling a Dispute Pierre-Marie Dupuy

I.  Introduction When two States come before the International Court of Justice, in principle it is because they have failed to agree to settle their dispute. This is not a political conjecture but a legal requirement. Apart from the jurisdictional requirements to be met, an application is not admissible until a legal dispute arises. However, it is precisely by virtue of the impossibility for the parties to reach an understanding that one of the parties may claim that this condition is fulfilled and the other may in turn raise a preliminary objection to admissibility. Recourse to a judicial settlement of the dispute can only be made to the extent that the earlier phase of negotiations has failed. Therefore, there is a diachronic relationship between judicial and diplomatic means for resolving disputes between States. The latter necessarily follows the former.1 It has certainly happened in the past that a contentious procedure was interrupted because an initially unexpected resolution of the disputed matter was reached by way of negotiations, which, exceptionally, were continued once judicial proceedings were underway. Such an occurrence is really quite exceptional. In the Great Belt case between Denmark and Finland, even  See the objection to the admissibility of the claim raised by Honduras against Nicaragua’s application in 1988, in the Case Concerning Armed Activities, in which Honduras emphasised in its pleadings the fact the there were ongoing negotiations in parallel to the judicial proceedings, as part of a process called “Contadora”, under the aegis of President Arias of Costa Rica in relation to Articles II and IV of the Pact of Bogota. The Court did not accept this objection and declared that it had jurisdiction on the basis of its interpretation of the special agreement, namely Article IV of the Pact of Bogota. The Court was careful to ensure that the negotiations conducted as part of the Contadora process had reached a “dead end” when Nicaragua filed its application before it against Honduras.

1

62   Pierre-Marie Dupuy though the ­parties had already exchanged the different parts of their written pleadings and counsel for each State (including the present writer on behalf of Finland) had prepared their oral arguments for the hearings to be held a few days later, to their surprise (if not their chagrin) the case was suddenly removed from the courtroom. Once the two Parties had reached an agreement, the proceedings became moot. However, the ongoing negotiations were not conducted by the two States, rather they were conducted between Denmark and a private Finnish company that was building oil platforms, the latter having objected that passage through the Great Belt would be rendered impossible by the construction of a bridge across this international strait.2 Formally at least, talks were kept open with a view to amicably settling the dispute, but between slightly different parties. Still, the question that is the theme of this book, i.e. diplomatic and judicial means of dispute settlement – can they get along?, calls for an answer in the negative with respect to the exercise of jurisdiction by the International Court of Justice and, more generally, any international court. The existence of a ‘dispute’, a requirement and a definition that stems from the jurisprudence of the Permanent Court of International Justice in the Mavrommatis case,3 explains why, in every contentious case and particularly in the written pleadings, each Party staunchly wishes to recount from its own perspective the historical events that led to the situation of no return beyond which recourse to the Court was the only way out. It is a Pirandellian universe in which ‘to each its own truth’, where one side systematically accuses the other of blocking the talks, of bad faith, and if not always, at the very least and most often, of ill will. It is then for the Court to reach an opinion based on criteria that, it must be noted, it does not always take the trouble to explain. In many cases, the Court’s jurisdiction based on Article 36 of its Statute is not itself devoid of underlying political considerations, especially when jurisdiction is founded on a unilateral application. Whoever takes the initiative to be the first to have recourse to a judge tends also to adopt a posture, which they hope will be advantageous, of not appearing afraid of justice but rather demanding justice because the law is on their side.4 Various considerations  Denmark accepted, in effect, to finance the relocation of the installations of the company Rauma-Repola – the naval manufacturer of the platforms – on Danish territory, away from the area in question where the construction of a bridge by reason of its height would make passage impossible for vessels carrying the platforms. 3  Mavrommatis (Greece v. United Kingdom), Judgment, [1925] P.C.I.J. Reports, Series A, No 2, at 11. On the concept of an international dispute, see Jean Salmon, ed. Dictionnaire de droit international public, (Brussels: Bruylant, 2001), at 338. 4  When the Court’s jurisdiction is not based on a special agreement, it would be wrong to consider that all difficulties concerning the exact function of the Court conferred upon it by 2

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of this kind may in practice encourage States to have recourse to an international court, whose symbolic status as a legal authority is acknowledged by both governments and public opinion, and which should not be overlooked. Still, there is a threshold between diplomatic means and the judicial method for resolving disputes that marks their difference in nature. Three possibilities are available in practice to States that wish to entrust the Court to settle their dispute. The first is ordinary in the sense that it is most consistent with the logic of its statute and in practice the most common. It is to ask the full Court to adjudicate the dispute. The second allows States to move in the direction of arbitration while still benefiting from the unrivalled authority of the World Court. It is the referral of a dispute to a Chamber of the Court, the composition of which will ultimately be negotiated between the parties. Several cases have made use of this possibility, even if the envisaged popularity of this procedure, facilitated by the revision of the Rules of Court in 1978, has not been reflected in practice, in contrast to what the Court itself may have expected. The third is a lateral move, one might say, insofar as it amounts to asking the Court the legal question at the heart of a bilateral dispute, whilst opening up the proceedings to all States party to the Statute, and thus to all United Nations member States. It is the use of proceedings that are not contentious but advisory, in principle aimed not at settling a dispute but determining the applicable law to a given situation. Each of these three recourses to the Court will be examined in turn, without losing sight of the need to identify the links between diplomatic means (in other words, in this case, also political means) for settling a dispute and judicial means. The latter will not be addressed by simply invoking the purely technical requirements of jurisdiction, but also the invocation of opportune reasons which, while providing a means to settle disputes, a court may also allow itself to be guided by political and diplomatic considerations.

II.  Recourse to the Full Court As explained elsewhere, the Court does not have the statutory privilege of being a kind of ‘Supreme Court’ in the international legal order.5 The Court the parties have been settled. Thus, in the case between Tunisia and Libya concerning the delimitation of the continental shelf, the two countries clashed over the scope of the role entrusted to the Court. Whereas Libya considered that the special agreement left it to the parties to trace the final boundary line, Tunisia read the agreement as allowing the Court to precisely trace the border itself. Continental Shelf (Tunisia/Libyan Arab Jamahiriya), Judgment, [1982] I.C.J. Reports 18. 5  Pierre-Marie Dupuy, “L’unité de l’ordre juridique international”, General Course on Public International Law (2002) RCADI, 297, at 460–478.

64   Pierre-Marie Dupuy has the privilege of having ratione materiae a general jurisdiction. In the specific context of the United Nations Organisation, the Court occupies a pre-eminent position because it is, by definition under the Charter, “the principal judicial organ”. There, however, is where such an eminent position ends. Contrary to what is sometimes advocated by one or other of its members with the purpose of ensuring the jurisprudential unity of international law,6 the ICJ does not take precedence over other international courts, of which a number have come into existence in recent times. A specialised court takes precedence in many cases over a court of general jurisdiction even though, in the context of the settlement of disputes concerning the law of the sea, States have consistently chosen to take their disputes to the Court in The Hague rather than to the Tribunal in Hamburg, at least until recent times. Being more and more confronted with the jurisprudence of competing judicial entities, the Court generally takes care not to rule on the merits of judgments delivered by other courts.7 It remains that the Court continues to enjoy a unique prestige. Its general jurisdiction, already recalled, its status as a principal organ of the United Nations organisation, and the importance of its case law have all led to it being designated ‘the’ international court. To the authority given to its precedent by virtue of Article 59 of the Statute is added the weight of its moral authority. This authority is not beyond criticism, or even erosion, as occurred in particular during the period immediately following the decision in 1966 in the case of South West Africa, in a rather unusual situation. The Court is particularly subject to conflicting expectations. Other judicial or quasi-judicial entities, such as the European Court of Human Rights in the case of Al-Adsani,8 or the Appellate Body of the WTO in the Hormones case,9 and even the Court of First Instance of the European Union in the case of Kadi,10 would be anxious to support their judgments  See, in particular, Gilbert Guillaume, “La Cour internationale de Justice: Quelques propositions concrêtes à l’occasion du cinquantenaire de la Cour internationale de Justice” 2 (1996) RGDIP 323–334; and, of the same author with Ronny Abraham, La Cour internationale de Justice à l’aube du XXIo siècle, le regard d’un juge (Paris: Pedone, 2003), at 344.  7  See in particular Giorgio Gaja, “Relationship of the ICJ with Other International Courts and Tribunals”, The Statute of the International Court of Justice: A Commentary, in eds. Andreas Zimmermann et al. (Oxford: Oxford University Press, 2006), at 543.  8  Al-Adsani v. United Kingdom [2002] 34 EHRR 11, Judgment of the Grand Chamber of 21 November 2001, concerning the compatibility of the prohibition of torture and immunity from jurisdiction.  9  Report of 16 January 1998 concerning the existence in positive law of a customary principle of precaution. European Communities – EC Measures Concerning Meat and Meat Products (Hormones), Appellate Body WT/DS26/AB/R, WT/DS48/AB/R, 16 January 1998. 10  Case T-315/01 Kadi v. Council and Commission [2005] E.C.R. II-3649, concerning the identity of a jus cogens norm and the possibility of recognizing the right of property as belonging to this normative category.  6

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on precedents from the Court. However, States meanwhile distrust anything that might suggest that the Court behaves like a ‘judge that governs’. They encourage the Court to settle disputes without ‘speaking the law’, which, nevertheless, is the primary meaning of ‘juris dictio’.11 The Court recalled in its advisory opinion on the declaration of independence of Kosovo the principle set out in the Lotus case, according to which everything that is not prohibited by international law is permitted,12 causing a few eyebrows to rise in academic circles, and with them those of Judge Simma, but which delighted foreign ministries! It is within this context that the perception, by definition subjective, of States to have recourse to the World Court can be repositioned. Sensitive to the authority of the Court, some States are more likely to turn to the Court because the judgment of which will save them face in public opinion back home. In light of such advantages, the slow pace and the high costs of ­proceedings seem less decisive. Regarding the latter, a trust fund was established in 1989 to help developing countries meet the expenses of an international case. These peripheral considerations should not obscure the procedural requirements, that are assumed to be well known, and stipulate that the Court’s jurisdiction be founded ultimately on the consent of the Parties. It should be noted in this respect that the number of optional declarations accepting the compulsory jurisdiction of the Court adopted by States on the basis of Article 36, paragraph 2, of the Statute remains today in the order of one third of all States party to the Statute.13 However, many treaties, notably multilateral treaties, provide for the jurisdiction of the Court to determine questions concerning the interpretation and application of the treaty provisions. Jurisdiction on the basis of a negotiated special agreement, in principle, has the advantage of ridding the proceedings of any disagreement between the Parties concerning their respective understandings of the scope of the question put to the Court. However, as we have seen, there are cases such as the case brought by Tunisia and Libya concerning the delimitation of a continental shelf, in which the dispute extended to the proper interpretation of the terms of the special agreement, even though it was a negotiated instrument.14 New  See Pierre-Marie Dupuy, “L’unité de l’ordre juridique”.  See Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, [2010] I.C.J. Reports 141, Declaration of Judge Simma, in which he deplores quite vigorously the narrow scope of analysis adopted by the Court. 13  On Article 36, see in particular, Christian Tomuschat, “Article 36” The Statute of the International Court of Justice: A Commentary, in eds. Andreas Zimmermann et al., 589 et seq. 14  See Continental Shelf (Tunisia/Libyan Arab Jamahiriya) Judgment, [1982] I.C.J. Reports 18. 11 12

66   Pierre-Marie Dupuy evidence, if required, is that most often required because of ulterior motives, as Paul Valery has said.

III.  Recourse to a Chamber of the Court The Court amended its Rules in 1978 to make access to its courtroom more attractive by facilitating the formation of chambers to hear disputes in accordance with Article 26 of its Statute.15 The idea was to increase the arbitral dimension of the ICJ, an element of which was already manifested in the institution of the judge ‘ad hoc’, by allowing the Parties – even though the new wording does not put it quite so bluntly – to negotiate between themselves the composition of the Chamber. The results remain modest. Six cases had been brought before a Chamber between 1982 (USA/Canada) and 2002 (Benin/Niger). With the exception of the ELSI case between the United States and Italy regarding the expropriation of a foreign investor,16 all the other cases have concerned a boundary delimitation, land or maritime, in North America (Gulf of Maine), Latin America (El Salvador/Honduras) and Africa (Benin/Niger and Burkina Faso/Mali). If the Parties are able to reach an agreement on the composition of the Chamber, they benefit from a number of advantages, including in particular the greater cultural proximity of the selected judges in relation to the matters in dispute. Thus, two inter-African disputes relating to two former colonies of France, that were brought before a Chamber, were pleaded exclusively in French, on the basis of documentation that largely constituted legislative texts and regulations based on what is called “le droit d’outre-mer”, the analysis of which was facilitated by a good knowledge of the general characteristics and peculiarities of French public law by the judges. However, time-wise it is not necessarily an advantage to initiate proceedings before a Chamber of the Court because such proceedings are not necessarily more expeditious. In addition to the negotiations required to determine the composition of a Chamber, the timetable of a procedure under this kind of limited arrangement is subordinate to proceedings before the full Court because the judges sitting in Chambers also participate in proceedings before the Court as a whole. It is consequently likely that there will be even more limited recourse to this type of arrangement in the future.

 See Paolo Palchetti, “Article 26” The Statute of the International Court of Justice: A Commentary, in eds. Andreas Zimmerman et al., 439 et seq. 16  Elettronica Sicula S.p.A (ELSI) (United States of America v. Italy) Judgment, [1989] I.C.J. Reports 128. 15

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However, one can be more sceptical a priori about the chances of ratione materiae specialised Chambers in the years to come. For example, the preestablished Chamber to hear environmental matters was not used by Argentina for its dispute with Uruguay in the Pulp Mills case. It is precisely political considerations that may explain in part the lack of attractiveness of recourse to Chambers. States generally prefer to entrust to the full Court with the task of settling their disputes, including questions relating to environmental law.

IV.  Recourse to the Court in Its Advisory Function Advisory proceedings are not designed to settle a dispute, but rather to provide a legal opinion.17 This can be understood as the law applicable to any dispute or litigious situation in question. In most cases, the entanglement between politics and law will be intense, but it is well settled that the Court will focus only on the strictly legal aspect of the question asked; it only very rarely refuses to exercise its advisory jurisdiction and, when it does, as it did regarding the request for an opinion by the World Health Organisation in respect of the military use of nuclear energy, it does not lack jurisdiction on its own accord, but rather because of the lack of powers of the organisation in question to request an opinion.18 The fact that an advisory opinion requires the Court to state the law, it is conceivable that the Court will be requested by an international institution to indicate which rules apply to a given situation. This can have many advantages both legal and political. Three cases illustrate this point: consequences for the United Nations member States of the continued presence of South African Union in Namibia (1971),19 whether Western Sahara was at the time of Spanish colonization a terra nullius and what were the legal ties of this territory to the Kingdom of Morocco and the “Mauritian entity” (1975)20 and, finally, what were the consequences of the construction of a wall in the territories occupied by Israel (2004)?21 The first advantage, obviously, of having recourse to advisory proceedings in such situations is that the Court may well be requested to address  See Jochen Frowein and Karin Oellers-Frahm, “Article 65”, The Statute of the International Court of Justice: A Commentary, in eds. Andreas Zimmermann et al., 1401 et seq. 18  Legality of the Use by a State of Nuclear Weapons in Armed Conflict, Advisory Opinion, [1996] I.C.J. Reports 66. 19  Legal Consequences for the States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970), Advisory Opinion, [1971] I.C.J. Reports 16. 20  Western Sahara, Advisory Opinion, [1975] I.C.J. Reports 12. 21  Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, [2004] I.C.J. Reports 136.

17

68   Pierre-Marie Dupuy legal issues that affect the international community as a whole even though neither the Union of South Africa, nor the Kingdom of Spain and even less likely, Israel, would have consented to the contentious jurisdiction of the Court in similar cases. The legal questions thus put to the principal judicial organ of the United Nations constitute at the same time major political and diplomatic initiatives, with the purpose of clarifying for each and every State not only the rights of the international community and its members, but also the obligations incumbent upon South Africa, Spain and Israel with respect to these territories. The advisory opinion can in effect be given in the absence of consent from these States, while at the same time allowing any United Nations member States that may so wish to present both written and oral submissions before the Court concerning their respective interpretations of the situation and the law governing it. The State concerned thus finds itself in a situation of political embarrassment, even if the opinion rendered by the Court is not binding, either for this State or any other. It is one thing to state the law, it is quite another to settle the dispute which led to the situation being considered by the Court. It is undoubtedly true that the 1971 opinion on Namibia constituted a useful part of the process that eventually led to the independence of Namibia and, more broadly still, the abolition of apartheid in South Africa itself. However, neither the Saharan question nor a fortiori the territories occupied by Israel and the construction of the wall to which the Court very clearly set out the applicable rules of international law that have been disregarded to date, have had any concrete impact on the outcome of the crisis in question. An advisory opinion rendered by the Court in its role as the principal judicial organ of the UN remains an avenue for allowing the Court, if it wishes to take the opportunity, to state the law on a given question and, consequently, to largely contribute to the affirmation or the clarification of rules of existing law. In a different judicial context, it is true, from the clear and precise formulation of the question asked, that this opportunity has been taken up in a striking manner in February 2011 by the United Nations Tribunal on the Law of the Sea regarding State responsibility for the exploration and exploitation of the seabed by commercial entities.22 In contrast, the Court has deliberately avoided such an approach in July 2010 with respect to the international status of Kosovo,23 on the basis of an admittedly poorly phrased question put by the UN General Assembly, but nevertheless on which the  Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area (Request for Advisory Opinion Submitted to the Seabed Disputes Chamber), Advisory Opinion, ITLOS Case No. 17, 1 February 2011. 23  Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, [2010] I.C.J. Reports 141. 22

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Court could have, if it deemed it appropriate, provided greater clarification on the law applicable to that particular situation. This raises another question, namely how if the judicial policy of the Court is evolving over time, the Court provides an opinio juris to a given problem that is not always exclusively legal?

Chapter Six Diplomatic and Judicial Means of Dispute Settlement and How They Got Along In The Pulp Mills Case Pablo Sandonato de León à SDD

I.  Introduction The Pulp Mills on the River Uruguay (Argentina v. Uruguay)1 case is an illustrative example that diplomatic and jurisdictional means of dispute resolution get along together in different and flexible ways. They not only interact at different stages of a dispute, but they serve each other reciprocally. In the Pulp Mills case, the International Court of Justice was to adjudge a dispute that arose when Uruguay authorised first one, and then a second, pulp mill, allegedly against the provisions of the applicable treaty, which called for a bilateral international organisation to authorise works that might be liable to affect, among other factors, the regime or the quality of the waters of the River Uruguay. Additionally, Argentina argued that the mills would not comply with internationally accepted environmental standards, therefore causing significant damage to the river and its environment. Consequently, the Court was to adjudicate on whether the provisions of the applicable treaty were respected or not, and whether the mills would pollute or not. We are not concerned here with the merits of the case but rather with how diplomatic and jurisdictional means of dispute resolution interacted in the case. This interaction can take place essentially in three forms. First, diplomatic means can take place before jurisdictional means. Secondly, diplomatic and  Case Concerning Pulp Mills on the River Uruguay (Argentina v. Uruguay), Judgment, I.C.J. Reports 1 [“Pulp Mills Judgment”].

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72   Pablo Sandonato de León jurisdictional means can take place concomitantly to other jurisdictional means. Thirdly, diplomatic means can take place after jurisdictional ones. The Pulp Mills case constitutes a good example of this triple interaction, since all three possibilities actually applied in the case. This contribution is therefore structured in three sections, namely: diplomatic means before jurisdictional means, diplomatic and jurisdictional means during other jurisdictional means and, finally, diplomatic means after jurisdictional means. However, in order to better understand this interaction as it applied in the case, a presentation of the background of the dispute and a brief summary of the history of the proceedings seems necessary. A.  Background and History of the Dispute The River Uruguay is a shared international river that runs along the approximately 500 kilometres of the Argentinean-Brazilian border upstream, and the Argentinean-Uruguayan border downstream. The latter was the object of a boundary treaty signed in 1961.2 Later, in 1975, Argentina and Uruguay signed another treaty to develop the provisions of the 1961 treaty: the Statute of the River Uruguay3 (“the Statute”). The main purpose of the Statute, as enshrined in Article 1, is to establish a “joint machinery for the optimum and rational utilisation of the River Uruguay”. Considered a forerunner of the contemporary law on international watercourses,4 the Statute established a system of notification and consultation for the party planning to carry out works that may substantially modify or alter the régime of the river or the quality of its waters. Towards this end the parties created a bilateral international organisation, the ‘Administrative Commission of the River Uruguay’ (‘CARU’, which is an acronym derived from its Spanish name ‘Comisión Administradora del Río Uruguay’). Additionally, the Statute covered other aspects related to the preservation and utilisation of the river, such as the exploration and exploitation of resources of the bed and subsoil, the conservation, utilisation and development of natural resources, the prevention and liability for pollution, and navigation and works planned on the river. Initial tensions between the parties arose when one company envisaged, as early as 2002, the construction of a pulp mill on the Uruguayan bank of the river. Soon, a second company became interested in building another pulp mill. The parties disagreed on whether the works were capable of ­substantively  Treaty Concerning the Boundary Constituted by the River Uruguay between the Eastern Republic of Uruguay and the Argentine Republic UNTS vol. 635, no 9074, at 91. 3  Statute of the River Uruguay, UNTS vol. 1295, no 21425, at 340. 4  See Yearbook of the International Law Commission, 1994, vol. II, Part Two, at 112, 114–115. In the same sense, see: Convention on the Law of the Non-navigational Uses of International Watercourses, 1997, at Article 6. 2

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modifying or altering the régime of the river or the quality of its waters, and therefore falling under the system of notification and consultation foreseen in the Statute. On 22 July 2002, the promoters of the first pulp mill, Spanish company Empresa Nacional de Celulosas de España (“ENCE”) through ‘Celulosas de M’Bopicuá S.A.’ submitted to Uruguayan authorities an environmental impact assessment as the first step to obtain the preliminary authorisation to construct a pulp mill. On 17 October 2002, CARU requested from the Uruguayan authorities the documentation submitted by ENCE, and reiterated that request six months later. On 14 May 2003, Uruguay submitted to CARU the “Environmental Impact Study, Celulosas de M’Bopicuá: Summary for public release”. On 15 August 2003, CARU requested further information, and reiterated the request one month later. By 2 October 2003, the Uruguayan Ministry of Housing, Land Use Planning and Environmental Affairs recommended ENCE to be granted an initial authorisation to build the plant, and informed CARU one week later, announcing that a report would be presented to it very shortly. On 9 October 2003, Uruguay granted the initial environmental authorisation for the construction of the ENCE plant. On the same date the presidents of Argentina and Uruguay met. Argentina maintained that the President of Uruguay promised his Argentine counterpart that no authorisation would be issued before Argentina’s environmental concerns had been addressed. Uruguay challenged this version of the facts and contended that the Parties agreed to deal with the ENCE project otherwise than through the procedure under the Statute and that Argentina let it be known that it was not opposed to the project per se. Argentina disputed these assertions. The day after the meeting, CARU declared its willingness to resume the technical analyses of ENCE as soon as Uruguay transmitted the requested documents. On 27 October 2003, Uruguay provided Argentina with ENCE’s impact assessment of July 2002, with the final assessment report, dated 2 October 2003, and with the initial environmental authorisation of 9 October 2003. Argentina contended that Article 7 of the Statute was not respected and the information submitted was incomplete. Upon the request of the Argentinean Ministry of Foreign Affairs, Uruguay then provided Argentina with a copy of the entire ENCE file, which was later forwarded by Argentina to CARU. On 2 March 2004, the parties’ Ministers for Foreign Affairs met and arrived at an understanding on the way forward as regards the authorisation of the mill.5 CARU resumed its work on 15 May 2004,6 taking note of the ministerial understanding of 2 March 2004,  The content of this understanding will be dealt with in the following section.  See CARU Minutes no 01/04, at 18–19 (15 May 2004) in: Case Concerning Pulp Mills on the River Uruguay, Argentina v. Uruguay: Uruguay Counter-Memorial, volume IV, annex 99. For

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74   Pablo Sandonato de León and accordingly preparing a water quality monitoring plan by 12 November 2004. One year later, on 25 November 2005, Uruguay authorised ENCE to start ground clearing works. On 11 March 2006, subsequent to a meeting of the parties’ presidents in Santiago de Chile, the President of Uruguay asked both ENCE and Botnia to suspend the construction of the plants. On 28 March 2006, ENCE agreed to suspend the construction of the plant for 90 days. However, on 21 September 2006, it announced that they would not build the mill at the planned site. Some time later ENCE announced the relocation of the mill in southern Uruguay, but the mill has still not been constructed. The second mill, “Orion (Botnia)”, and its adjacent port terminal, was to be built some kilometres downstream from the ENCE plant, and was promoted by Finish company Oy Metsä-Botnia AB,7 through its Uruguayan branches. A request for initial environmental authorisation was submitted on 31 March 2004. Between 29 and 30 April 2004 at an informal meeting, Orion provided CARU with information on their project. Subsequently, on 18 June 2004, CARU requested further information from Uruguay on the Orion project, and reiterated its request on 19 October and 16 November 2004. On 14 February 2005, Uruguay granted the initial authorisation to Orion. One month later, on 11 March 2005, and again on 6 May 2005, Argentina questioned the granting of the initial authorisation on grounds of the procedural obligations laid down in the 1975 Statute. On 12 April 2005, Uruguay authorised ground clearing and initial related works for the construction of the Orion mill. On 5 May 2005, the parties’ presidents agreed on the creation of a High-Level Technical Group (GTAN), constituted on 31 May 2005 by their Ministers of Foreign Affairs, to settle the dispute within 180 days. GTAN met 12 times, documents were exchanged, but two months after the expiration of the deadline, on 31 January and 3 February 2006 respectively, Uruguay and Argentina deemed GTAN a failure. Between 5 July and 22 August 2005, Uruguay authorised the construction of the adjacent port to the Orion mill as well as a series of constructions related to the mill. On 15 August and 13 October, Uruguay transmitted additional documentation related to the port to CARU. Argentina asked, through CARU, to suspend the initial works. On 24 August 2006, Uruguay authorised the commissioning of the port adjacent to the Orion mill, informing CARU on 4 September 2006. A week later, the Argentinean position at that time see also: “Statement by Argentine Ministry of Foreign Affairs, International Trade and Culture”, in: Alberto Angel Fernandez, “Report of the Head of the Cabinet of Ministers to the Argentine Senate”, Report No. 65, at 531 (March 2005) (reproduced in: Uruguay Counter-Memorial, volume III, annex 47). 7  In 2009, the Orion plant, owned until then by Oy Metsä-Botnia AB, was acquired by UPMKymmene Oyje. For simplicity we refer to it as “Orion”.

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­ ruguay authorised Orion to extract and use water from the River Uruguay U for industrial purposes, and notified CARU of this on 17 October 2006. B.  History of the Proceedings Argentina instituted proceedings against Uruguay before the ICJ on 4 May 2006. It argued that Uruguay’s initial environmental authorisation for the construction and the future commissioning of two pulp mills and the associated regime constituted a breach of Uruguay’s international procedural obligations of notification and consultation with CARU under the Statute.8 Argentina further argued that Uruguay breached its international substantive environmental obligations towards Argentina because the pulp mills would jeopardise the conservation of the environment of the River Uruguay and of the areas affected by the river.9 Accordingly, it asked the Court to declare Uruguay’s international responsibility, and called for cessation, restitution and adequate guarantees of non-repetition.10 Together with its application, Argentina submitted a request for the indication of provisional measures, based on the fact that the commissioning of a pulp mill would have significantly affected the quality of the waters of the River Uruguay, causing significant transboundary damage11 and affecting the right to a healthy environment for the riparian population.12 It further alleged, among other things, that the continuing construction would cause serious social and economic damage in the areas affected by the river.13 The Court, based on its established threshold for the indication of provisional measures, found that the circumstances did not represent “an urgent need to prevent [an] irreparable prejudice to the rights that are the subject of the dispute”14 and therefore did not require the exercise of its power to indicate provisional measures.15 The same criterion was applied later, on  Case Concerning Pulp Mills in the River Uruguay (Argentina v. Uruguay): Uruguay CounterMemorial, Memorial of Argentina, at 369, 9.1 [hereafter, Memorial of Argentina].  9  Mémoire de la République Argentine, Usine de pâte à papier sur le fleuve Uruguay (Argentine/Uruguay), at 11. 10  Memorial of Argentina, at 366, at § 8.40, i–iv. 11  Demande en indication de mesures conservatoires présentée par le Gouvernement de la République argentine, § 6, [hereafter, Demande en indication]. 12  Demande en indication, at § 4, “c”. 13  Pulp Mills on the River Uruguay (Argentina v. Uruguay), Provisional Measures, Order of 13 July 2006, [2006] I.C.J. Reports [“Order of 13 July”] 113, at § 16. 14  Order of 13 July, § 62 [quoting Passage through the Great Belt (Finland v. Denmark), Provisional Measures, Order of 29 July 1991, [1991] I.C.J. Reports 17, § 23; Certain Criminal Proceedings in France (Republic of the Congo v. France), Provisional Measures, Order of 17 June 2003, [2003] I.C.J. Reports 107, at § 22)]. 15  Order of 13 July 113, at § 73.  8

76   Pablo Sandonato de León 29 ­November 2006, when Uruguay submitted a request for the indication of provisional measures, as we shall see later on. At its judgment on the merits, the Court found that Uruguay, by unilaterally authorising the construction and the functioning of the mills, breached its procedural obligations under the Statute and that such finding constitutes appropriate satisfaction;16 but that it did not breach its substantive obligations under the same Statute.17 In the following three sections we will see how diplomatic means applied before, during and after the jurisdictional proceeding just described.

II.  Diplomatic Means Before Jurisdictional Means The choice of the actual means of dispute settlement is left to the concerned parties.18 Recourse to diplomatic means prior to seeking a jurisdictional resolution can be either optional or compulsory. Normally, parties will make recourse to diplomatic means on an optional basis, as they are not obliged to do so before making recourse to jurisdictional settlement. “Neither in the Charter nor otherwise in international law is any general rule to be found to the effect that the exhaustion of diplomatic negotiations constitutes a precondition for a matter to be referred to the Court”.19 Accordingly, a party to a dispute is equally free to make direct recourse to jurisdictional means. Another possibility, as in the Pulp Mills case, is that a previous pactum de negotiando requires the parties to attempt direct negotiation before instituting proceedings. In this case, “an obligation to negotiate does not imply an obligation to reach an agreement”,20 but they must be meaningful, in the sense that the parties should not “insist upon its own position without contemplating any modification of it”.21 They should be ready to make reasonable concessions in order to arrive at a friendly settlement. It is a question  Pulp Mills Judgment, at § 282 (1).  Pulp Mills Judgment, at § 282 (2). 18  Fisheries Jurisdiction (Spain v. Canada), Jurisdiction [1998] I.C.J. Reports 432, at § 56; Aerial Incident of 10 August 1999 (Pakistan v. India), Jurisdiction [2000] I.C.J. Reports 12, at § 53. 19  Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria), Preliminary Objections, Judgment, [1998] I.C.J. Reports 275, at § 56. See also the contribution of Professor Marcelo G. Kohen in this book. 20  Railway Traffic between Lithuania and Poland, Advisory Opinion, [1931] P.C.I.J., Series A/B, no 42, at 116. See also: North Sea Continental Shelf (Federal Republic of Germany/ Netherlands), Judgment, [1969] I.C.J. Reports 3, §. 87; Pulp Mills Judgment, § 150. 21  North Sea Continental Shelf (Federal Republic of Germany/Netherlands), Judgment, [1969] I.C.J. Reports 3, § 85, “a”. 16 17

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of “attitude and views of the Parties on the substantive issues of the question involved”,22 rather than a formal question on how diplomatic means are actually put in place. The pactum is therefore satisfied when negotiations are attempted in good faith and when there “has been a failure of negotiations, or when negotiations have become futile or deadlocked”.23 Even if this requires a case-by-case assessment24 it is unnecessary to enter “into a convoluted examination of every single action”.25 The idea is that there is no longer, on the date when the proceedings are instituted, or when the Court decides on its jurisdiction, a reasonable prospect for the dispute to be settled by negotiation.26 The Pulp Mills case is an example of a compulsory recourse to diplomatic means before making recourse to jurisdictional ones. Indeed, according to Article 60 of the Statute, disputes concerning the interpretation or application of the Treaty and the Statute “which cannot be settled by direct negotiations may be submitted by either Party to the International Court of Justice”.27 In the execution of this pactum, the parties attempted several diplomatic means before the institution of jurisdictional proceedings. Concerning the ENCE project, on 9 October 2003, the presidents of Argen­ tina and Uruguay met, in an effort to overcome the difficulties. The content of this meeting was later to be a point of contention. Argentina arguing that the President of Uruguay promised that no authorisation would be issued before Argentina’s environmental concerns had been addressed; and­  South West Africa Cases (Ethiopia v. South Africa; Liberia v. South Africa), Preliminary Objections, Judgment, [1962] I.C.J. Reports 346. 23  Case Concerning Application of the International Convention on the Elimination of All Forms of Racial Discrimination, Preliminary Objections, Judgment, at § 159 [“Case Concerning Application of the International Convention”], quoting: Mavrommatis Palestine Concessions (Greece v. United Kingdom), Judgment no 2, [1924] P.C.I.J., Series A, no 2, 13 [“Mavrommatis Palestine Concessions”]; South West Africa (Ethiopia v. South Africa; Liberia v. South Africa), Preliminary Objections, Judgment, [1962] I.C.J. Reports, 345–346; United States Diplomatic and Consular Staff in Tehran (United States of America v. Iran), Judgment, [1980] I.C.J. Reports 3, at § 51; Applicability of the Obligation to Arbitrate under Section 21 of the United Nations Headquarters Agreement of 26 June 1947, Advisory Opinion, [1988] I.C.J. Reports 12, at § 55; Questions of Interpretation and Application of the 1971 Montreal Convention Arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v. United States of America), Preliminary Objections, Judgment, [1998] I.C.J. Reports 115, at § 20. 24  Mavrommatis Palestine Concessions, at 13; Case Concerning Application of the International Convention, Joint Dissenting Opinion of President Owada, Judges Simma, Abraham and Donoghue and Judge ad hoc Gaja, at § 57. 25  Case Concerning Application of the International Convention, Joint Dissenting Opinion, at § 58. 26  Ibid. 27  Article 60 § 1. A similar provision is included in § 2, concerning the failure of conciliation procedures. 22

78   Pablo Sandonato de León Uruguay arguing that the parties agreed that the ENCE project should be channelled through a special procedure, leaving aside the one established under the Statute. Also concerning the ENCE plant, the parties’ foreign ministers met in Buenos Aires on 2 March 2004, and arrived at an understanding on the procedure to follow. This ministerial understanding was also a point of contention between the parties. Argentina argued that the understanding did not permit derogation from the Statute and was rather intended to implement it, and additionally that the understanding only applied with respect to ENCE. On the other hand, Uruguay argued that the ministerial understanding constituted a collateral solution to the Statute, as the parties were free in law and logic to set up a new procedure that would apply to both plants. The underlying theoretical issue here was therefore whether the verbal understanding could possibly modify or suspend the Statute’s applicability on a single-case basis. The Court attempted to harmonise the parties legal arguments, stating that the parties “are entitled to depart from the procedures laid down in the 1975 Statute”,28 but such departure may only proceed “in respect of a given project pursuant to an appropriate bilateral agreement”.29 Another example30 of previous diplomatic negotiations in this case is the 5 May 2005 agreement between the parties’ presidents to create GTAN. It constituted a good example of a direct negotiation involving political and technical components. The Group, with a 180-day mandate, held 12 unsuccessful meetings between August 2005 and January 2006. A further example of direct diplomatic negotiation before the institution of proceedings was a meeting of the parties’ presidents in Santiago de Chile, during the inauguration of Chilean President Michelle Bachelet, on 11 March 2006. A common declaration was then issued by the Argentinean and Uruguay presidents. They asked on the one side, that so-called “environmental” activists suspend the blockade of the international bridges over the River Uruguay for a maximum period of 90 days and, on the other side, that companies suspend the construction of the mills for the same period,31 in order to allow diplomatic negotiation to continue. ENCE suspended the

 Pulp Mills Judgment, at § 128.  Pulp Mills Judgment, at § 128. 30  Non-official mediation was also attempted by religious leaders, Gualeguaychú and Montevideo Archbishops, Mgrs. Jorge Eduardo Lozano and Nicolás Cotugno, respectively. 31  See http://www.lanacion.com.ar/787974–los-puntos-salientes-del-acuerdo and http://www .elpais.com.uy/Suple/LaSemanaEnElPais/06/03/17/lasem_naci_206686.asp (last accessed 22 March 2012). 28 29

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construction for 90 days,32 and Orion for 10 days.33 Activists did so for a similar period of time and negotiations then stagnated. Since no diplomatic solution seemed possible, Argentina instituted proceedings against Uruguay before the ICJ on 6 May 2006. As we shall see, diplomatic efforts also continued during this period.

III.  Diplomatic and Jurisdictional Means During Other Jurisdictional Means Judicial settlement of international disputes is simply an alternative to direct and friendly settlement. It is therefore also for the jurisdictional body to facilitate, so far as is compatible with its statute, such direct and friendly settlement.34 As diplomatic negotiations that started before the institution of proceedings can continue during judicial proceedings, new diplomatic means can be engaged once a jurisdictional body has already been seized. The Pulp Mills case presents examples of these two possibilities, but is also an illustration of the institution of jurisdictional (arbitral) proceedings between the same parties after other jurisdictional (judicial) proceedings were already underway. This in no way precludes the jurisdiction of the arbitral tribunal, nor does it affect in any way the jurisdiction of the judicial body. A.  Diplomatic Means During Jurisdictional Means The fact that negotiations are in train when the International Court of Justice is seized of a case is not, legally speaking, any obstacle to the exercise by the Court of its judicial function.35 Moreover, the Court welcomes such negotiations.36  Pulp Mills Judgment, at § 36.  Pulp Mills Judgment, at § 42 in fine. 34  See Free Zones of Upper Savoy and the District of Gex, Order, [1929] P.C.I.J. series A no 22, at 13. 35  Aegean Sea Continental Shelf, Judgment, [1978] I.C.J. Reports 3, at § 22 and 29. See also: United States Diplomatic and Consular Staff in Tehran, Judgement, [1980] I.C.J. Reports, at § 44. Concerning Security Council action while a case is pending before the Court see: Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Jurisdiction and Admissibility, Judgment, [1984] I.C.J. Reports 209, at 392, § 93; United States Diplomatic and Consular Staff in Tehran, Judgment, [1980] I.C.J. Reports 3, at § 40. 36  Passage Through the Great Belt (Finland v. Denmark), Provisional Measures, [1991] I.C.J. Reports 12, at § 35 and: Passage through the Great Belt (Finland v. Denmark), Order [1992] I.C.J. Reports 348. In the same sense see: Trial of Pakistani Prisoners of War, Order [1973] I.C.J. Reports 348. 32 33

80   Pablo Sandonato de León In the Pulp Mills case, while the case was being substantiated, Argentina and Uruguay continued negotiating in the light of finding a direct solution to the dispute. In this sense, at the XVII summit of Heads of State and Government of the Ibero-American countries, held in Montevideo in November 2006, the parties’ presidents requested the King of Spain to endeavour to reconcile their positions,37 and find a negotiated resolution of the dispute. While the King did not directly mediate in the dispute, he designated a careerdiplomat, then Spain’s Permanent Representative to the United Nations, to facilitate dialog between the parties. The mediation, officially called a “facilitation”, started in February 2007 but it soon became clear that the parties were still too far from each other for the facilitation to obtain any result. The fact that the parties did not arrive at an agreed solution as a result of the facilitation, and despite the many efforts, is a further element in the consideration of the dispute as a more complex issue. The Pulp Mills case also shows how different jurisdictional proceedings can take place concomitantly. B.  Jurisdictional Means During Other Jurisdictional Means There is room to consider that the litis pendentia exception precludes also at the international level the possibility of trying several jurisdictional proceedings on the same subject matter. However, nothing excludes the possibility of several jurisdictional proceedings to take place at the same time between the same parties for different subject matters. This, of course, can happen when the primarily competent jurisdictional body is not asked to adjudge the given subject matter, or it lacks jurisdiction on it, as happened in the Pulp Mills case. Indeed, in this dispute there were two different issues at stake. On one hand, the construction of the pulp mills and, on the other hand, the blockade of the access to the international bridges between the two parties. The first set of questions was presented by Argentina for settlement before the ICJ. The second set of questions was presented by Uruguay for settlement before a Mercosur ad hoc arbitral tribunal on 4 May 2006. The ad hoc Arbitral ­Tribunal38 was constituted on 21 June 2006 and, according to Mercosur

 See http://www.elpais.com.uy/06/11/05/ultmo_245918.asp and http://www.lanacion.com .ar/855806-papeleras-el-rey-de-espana-intervendra-por-pedido-de-kirchner (last accessed 22 March 2012). 38  The tribunal was composed by Mr. Carlos Barreira, from Argentina (originally, Argentina designated Mr. Héctor Masnatta, who was later to be replaced), Professor José Maria Gamio, from Uruguay, and Mr. Luis Marti Mingarro, from Spain, presiding. 37

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r­ egulations, the procedure developed expeditiously, and the tribunal rendered its award – unanimously – on 6 September 2006.39 Before the arbitral tribunal, Uruguay sought a declaration of the illegality of the blockade of the access to international bridges over the River Uruguay by Argentinian environmentalist groups and the adoption of necessary measures to prevent future ones. Argentina responded that Uruguay’s request lacked object as the blockades had been lifted, and also contended the allegation of damage. The arbitral tribunal did not engage with – nor touch upon – issues under the jurisdiction of the ICJ, and each jurisdictional body had a specific competence.40 Accordingly, the arbitral tribunal limited itself to its jurisdiction, and found that Argentina did not take the necessary measures to fulfil its duty of due diligence to avoid or put an end to the blockades and that this conduct was not compatible with its obligations under the Treaty of Asunción.41 Also to be noted is that, on 29 November 2006, after the arbitral tribunal had rendered its award, Uruguay submitted a request for the indication of provisional measures before the ICJ because, since 20 November 2006 “[o]rganized groups of Argentine citizens have blockaded a vital international bridge over the Uruguay River . . . , [and] the blockade . . . [would] deprive Uruguay of hundreds of millions of dollars in foregone trade and tourism”.42 Uruguay requested that Argentina should take all reasonable and appropriate steps to prevent or end the blockades. The Court however found that there was no “imminent risk of irreparable prejudice to the rights of Uruguay”43 in accordance with the Statute of the River Uruguay, and therefore did not grant the requested measures. A third possibility of interaction between diplomatic means and jurisdictional means consists of diplomatic means occurring after the closure of jurisdictional means. This was also the case in the Pulp Mills dispute.

 Available at http://www.mercosur.int/msweb/SM/es/Controversias/TPR/TPR_Tribunal%20 AdHoc_Laudo%20Libre%20Circulacion_ES.pdf (last accessed 22 March 2012). 40  Arbitral award of Mercosur’s ad hoc Arbitral Tribunal constituted to resolve the dispute instituted by the Eastern Republic of Uruguay against the Argentine Republic on the omission of the Argentinean State to adopt appropriate measures to prevent and/or put an end to the impediment to free circulation derived from the blockades in Argentinean Territory of access to the international bridges General San Martin and General Artigas that unite the Argentine Republic with the Eastern Republic of Uruguay [“Arbitral Award”], at 160. 41  Arbitral Award, 39. 42  Pulp Mills on the River Uruguay (Argentina v. Uruguay), Provisional Measures, [2007] I.C.J. Reports 1 (“Order of 23 January”), at 3, § 8. 43  Order of 23 January, at 3, § 50. 39

82   Pablo Sandonato de León

IV.  Diplomatic Means After Jurisdictional Means Judicial proceedings before the ICJ can be closed either by the pronouncement of a judgment or through an order of discontinuance of proceedings normally upon request by the parties.44 Discontinuance of proceedings normally happens when diplomatic means, taking place during jurisdictional means, arrive at a successful conclusion, by means of an agreement between the parties to the dispute. Therefore, “judicial proceedings may be discontinued when such negotiations result in the settlement of the dispute”.45 This was however not the situation in the Pulp Mills case. Diplomatic means can take place after the closure of jurisdictional proceedings following a judgment in three different manners. First, parties may in whole depart from the judgment,46 as no rule or principle of international law exists against such freedom of States,47 with the exception of peremptory norms. Secondly, parties may depart only in part from the judgment, and agree on a diplomatic solution that adheres to the judgment to a certain extent.48 Thirdly, diplomatic means can reappear after jurisdictional proceedings and be instrumental to the settlement of the conditions for the implementation of the decision, which can be a perfect execution of the ­judgment,49 44 In two orders for the indication of provisional measures the Court ordered, pursuant to the manifest lack of jurisdiction, the case to be removed from the general list without an express request from one party. See Legality of Use of Force (Yugoslavia v. United States of America), Provisional Measures, Order of 2 June 1999, [1999] I.C.J. Reports 916, §§ 29 et 34, 2; and Legality of Use of Force (Yugoslavia v. Spain), Provisional Measures, Order of 2 June 1999, [1999] I.C.J. Reports 761, §§ 35 and 40, 2. 45  Aegean Sea Continental Shelf, Judgment, [1978] I.C.J. Reports 3, § 29. 46  This was what happened in the Maritime Delimitation in the Area between Greenland and Jan Mayen case in which the Court established, in its Judgment of 14 June 1993, a delimitation (Maritime Delimitation in the Area between Greenland and Jan Mayen, Judgment, [1993] I.C.J. Reports 38, at § 94 (2) in fine, 91 and 92. Despite this, the parties entered into diplomatic negotiations that led to the signature, on 18 December 1995, of the Agreement concerning the delimitation of the continental shelf in the area between Jan Mayen and Greenland and concerning the boundary between the fishery zones in the area (UNTS vol. 1903, no 32441, 171). 47  Manley Hudson, La Cour permanente de Justice internationale, (Paris: Pedone, 1936), at 493. 48  This happened in the Corfu Channel case, where a diplomatic solution was found nearly 50 years after the Judgment. See J. C. R. Gray, Much fine gold; the history of a fifty-year negotiation (Havard Center for International Affairs, Fellow Paper, Cambridge MA, 1997); Constance Schulte, Compliance with Decisions of the International Court of Justice, (Oxford: Oxford University Press, 2004), at 97–98. Similarly, the American-Iranian dispute related to the hostages case. See Declaration of the Government of the Democratic and Popular Republic of Algeria; General Declaration, at § 11. Available at http://www.iusct.net/General%20 Documents/1-General%20Declaration%E2%80%8E.pdf (last accessed 22 March 2012). 49  See Ambatielos Case, Judgment, [1953] I.C.J. Reports 10, at 23. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Greek

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or simply take it as a source of inspiration.50 This later possibility was followed in the Pulp Mills case. Also to be noted is that the Court can make an explicit and binding call for diplomatic negotiations,51 which can prove to be more52 or less ­satisfactory.53 It can also make a less explicit and non-binding call for negotiations through a reference in the reasoning of its judgment,54 or an implicit and non-binding call for negotiations. The latter happened in the Pulp Mills case, where there is an implicit reference to negotiations in the last paragraph of the reasoning of the judgment. Indeed, in paragraph 281 the Court recalls the parties “long-standing and effective tradition of co-operation and co-ordination” which have in the past allowed them to find appropriate solutions “within its framework without feeling the need to resort to the judicial settlement of disputes provided for in Article 60 of the Statute until the present case was brought before the Court”.55 An implicit call for negotiations appears to be preferable, as the parties will preserve their entire freedom in the implementation of the judgment, within the limits of the judgment itself, yet with more clear and concrete elements upon which to develop diplomatic means. In the Pulp Mills case, the Court found that Uruguay breached its procedural obligations under the Statute, and considered that such declaration constituted an appropriate measure of satisfaction. Additionally, the Court

Government regarding the submission to arbitration of the Ambatielos claim, of 24 February 1955 (UNTS vol. 209, no 2827, 187) and the arbitral tribunal of 6 March 1956 (United Nations Reports of International Arbitral Awards, vol. XII, 83–153). 50  See North Sea Continental Shelf, Judgment, [1969] I.C.J. Reports 53, at “C”, § 1. Treaty concerning the delimitation of the continental shelf under the North Sea (with annexes and exchange of letters), signed between the Kingdom of Denmark and the Federal Republic of Germany, UNTS, vol. 857, no 12295, 119; Treaty concerning the delimitation of the continental shelf under the North Sea (with annexes and exchange of letters), signed between the Kingdom of the Netherlands and the Federal Republic of Germany, UNTS, vol. 857, no 12296, 142; and the Protocol to the Treaties of 28 January 1971 between the Federal Republic of Germany and Denmark and the Kingdom of the Netherlands, respectively, concerning the delimitation of the continental shelf under the North Sea, UNTS, vol. 857, no 12297, 161. 51  See Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), Judgment, [2007] I.C.J. Reports 659, § 321 (4). 52  See Fisheries Jurisdiction (United Kingdom v. Iceland), Merits, Judgment, [1974] I.C.J. Reports 175, at § 79 (3); Exchange of Notes Constituting an Interim Agreement between Iceland and the United Kingdom of Great Britain and Northern Ireland regarding the Fisheries Dispute Between these Countries (with map), UNTS vol. 900, no 12886, p. 93). 53  See Gabčikovo-Nagymaros Project (Hungary/Slovakia), Judgment, [1997] I.C.J. Reports 7, at § 155, 2, “b”. 54  See Haya de la Torre Case (Columbia v Peru), Judgment, I.C.J. Reports 71, at 83; and Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Jurisdiction and Admissibility, Judgment, [1984] I.C.J. Reports, At §§ 290–291. 55  Pulp Mills Judgment, at § 281.

84   Pablo Sandonato de León found that Uruguay did not breach its substantive obligations under the same Statute.56 Nowhere in the judgment however did the Court ­establish or ­suggest a particular set of measures to be taken in order to actually implement the judgment, to avoid a future potential pollution of the River Uruguay or to control the emissions of the pulp mill, assuming that their polluting character would have been proved. Upon the pronouncement of the judgment, the parties instituted a series of diplomatic negotiations in the light of the final settlement of the dispute. The judgment was delivered on 20 April 2010. Coincidentally, less than two months before the judgment was rendered, Uruguay’s new President had assumed office. This fact, together with the judgment, gave new strength to the diplomatic negotiations. As post-jurisdictional diplomatic negotiations and the final agreement went somewhat beyond the dispositive part of the judgment, it is fair to say that the parties honoured the Court’s call for their “long-standing and effective tradition of co-operation and co-ordination”. The parties’ presidents met as soon as one week after the judgment, on 28 April 2010,57 and again on 2 June 2010. On that occasion it was decided that, within CARU, a monitoring plan of the Orion mill should be prepared as stated in the judgment,58 and a control and pollution prevention plan of the River Uruguay in the shared part of the river should also be prepared. In respect of this latter matter, the presidents instructed their delegations at CARU to agree, within 45 days, on the criteria for the implementation of those plans. They also agreed to meet again within 60 days in Buenos Aires. The presidents met in Buenos Aires on 28 July 2010, and signed the Olivos Presidential Agreement. Through it both presidents decided to establish, within 30 days, a scientific committee within CARU [“Comité Científico en el seno de la Comisión Administradora del Río Uruguay (CARU)”], composed of 4 scientists, two from each side, in order to monitor the River Uruguay and all industrial and poultry establishments and urban centres dumping their effluents in the river. It was further agreed that the monitoring shall start at Orion mill and the mouth of the Gualeguaychú River in the River Uruguay and should continue on the Argentinian side at a point to be determined by the Uruguayan delegation. The Agreement also granted members of the scientific committee free access to the Orion mill, up to twelve times per year, in order to verify compliance with CARU and Uruguayan legislation. The  Pulp Mills Judgment, at § 282.  http://www.elpais.com.uy/100405/ultmo-480728/internacional/mujica-y-cristina-fijanpasos-para-despues-de-la-haya/ and http://www.lanacion.com.ar/1259082-en-uruguayaseguran-que-cristina-y-mujica-trataron-el-tema-del-bloqueo-contra-botnia (last accessed 22 March 2012). 58  These are the terms actually employed in the Agreement; see Pulp Mills Judgment, at §§ 197, 206, 266 and 281. 56 57

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Agreement establishing the Committee as a subsidiary body of CARU, but of compulsory consultation, was signed on 30 August 2010 in Montevideo. It makes express reference to the judgment of the ICJ and includes a series of directives on the constitution and functioning of the scientific committee, which must be consulted by CARU before it can take any decision on any activity CARU may develop concerning the control and prevention of the pollution of the River Uruguay in the framework of the joint monitoring activities. A final agreement settling the technical criteria for the joint monitoring of the Orion mill was later reached by the parties’ ministers of foreign affairs in Montevideo, on 14 November 2010.59 Finally, on 2 August 2011, the presidents of Argentina and Uruguay met again in Buenos Aires, and agreed on the Declaration of Buenos Aires, through which they verified the implementation of the Agreement of 2 June 2010 concerning the joint monitoring of the Orion mill at the mouth of River Uruguay, as well as the presentation of a report of the scientific committee within CARU, among other issues.60 With the Declaration of Buenos Aires the dispute for the authorisation and construction of pulp mills on the River Uruguay seems now to be settled, as the joint monitoring plan agreed upon is now in place, functioning and no pollution of the River Uruguay to the extent that it may constitute a breach of the obligations under the Statute has so far been detected.

V.  Conclusions As seen, diplomatic means of dispute settlement can take place either before, during or after jurisdictional means. They can take place before, proprio motu by the parties, or in the execution of a pactum de negotiando. They can take place during jurisdictional means, in the exercise of the parties’ freedom of negotiation. They can also take place after the closure of jurisdictional means, in order to execute the judgment, or even to find a different solution to it. In the case of the Pulp Mills dispute, diplomatic means took place before the institution of proceedings, through numerous regular meetings: high-level direct negotiations as well as GTAN negotiation attempts. Diplomatic means took place also during the jurisdictional means, through direct ­negotiation  http://www.lanacion.com.ar/1324977-acuerdo-con-uruguay-para-el-monitoreo-enla-planta-de-botnia and http://www.elpais.com.uy/101115/ultmo-528874/ultimomomento/ Almagro-y-Timerman-anunciaron-acuerdo-por-monitoreo-de-UPM/ (last accessed 22 March 2012). 60  Available at http://www.mrree.gub.uy/gxpsites/hgxpp001?7,1,73,O,S,0,PAG;CONC;73;3;D; 8884;5;PAG and http://www.mrecic.gov.ar/portal/ver_adjunto.php?id=3601 (last accessed 22 March 2012). 59

86   Pablo Sandonato de León and through the “facilitation” of the King of Spain. Additionally, arbitral proceedings took place after judicial proceedings, in order to settle particular aspects of the dispute falling outside the scope and jurisdiction of earlier judicial proceedings. After the pronouncement of the judgment by the Court, new life was given to the mutual relations of the parties, providing renewed direction in the high-level bilateral negotiations that led to the settlement of the dispute. The decision rendered on 20 April 2010 represented, in many aspects, a new beginning.

Chapter Seven The Relationship between Negotiations and Third-Party Dispute Settlement at the WTO, with an Emphasis on the EC-Bananas Dispute Hélène Ruiz Fabri

I.  Introduction Bananas are a fascinating fruit, being both the most consensual and the most confrontational. Consensual because nearly anybody, whatever their age and origin, likes eating bananas. Bananas bring generations back together, having the reputation of being the preferred fruit of both the eldest and the youngest. Notwithstanding, bananas are also very confrontational. It is difficult to find a fruit that has led to so many judgments, be it at the domestic level1 or at the international level.2 At the WTO, they seem to be part of a never ending story, especially when taking into account that this story has been inherited from the GATT period. Looking through the lens of the relationship between negotiations and third-party dispute settlement, the EC-Bananas dispute offers many examples of these practises intertwining and could therefore appear as a pre-eminent case-study on which to focus, although one can wonder whether such an intertwining makes it truly unique and original. In any event, it is interesting as a starting point to stress how much room the WTO Dispute Settlement System (‘DSS’) gives to negotiations and amicable settlement, what the Dispute Settlement Understanding (‘DSU’) calls “mutually agreed solutions” (Article 3.6). Moreover, the Banana dispute illustrates the various possible manifestations of entanglement between diplomatic and third-party means  German Constitutional Court, (2nd Senate), “Bananenmarktordnung” (2 BvL 1/97), 7 June 2000, BVerfGE 102, 147, French Version (extracts) in RTDH, 1183s (2001). Constance Grewe, “Le ‘traité de paix’ avec la Cour de Luxembourg: l’arrêt de la Cour constitutionnelle allemande du 7 juin 2000 relatif au règlement du marché de la banana”, (2001) RTDE 1–17. 2  The European Court of Justice has adjudicated many cases in relation to this fruit. 1

88   Hélène Ruiz Fabri of dispute settlement, and shows consequently the complexity of the relationship. Beyond any accepted belief, the dispute exposes that there is neither an imposed logic in the sequence, nor any natural order of succession. Although this statement applies in general, it is all the more valid for the WTO DSS insofar as the latter incorporates an implementation phase that gives room to third-party interventions, increasing the intertwining mentioned above but also giving rise to the impression that negotiations are at the beginning and at the end of all disputes. It also proves the necessity of pragmatism or of an open approach. A judicial decision does not necessarily settle a case in the sense that, even when the losing State does not resist implementation, negotiations can prove necessary beyond the decision in order to implement it. Non-paradoxically, the WTO DSS demonstrates this in a particularly clear manner due to the institutionalisation that results in a sequencing of the implementation phase, underlining the room left for negotiations and how much they are needed. Moreover, providing such a sophisticated mechanism for third-party dispute settlement does not prevent the WTO Dispute Settlement Understanding (DSU) from expressing a strong preference in favour of amicable settlements and stressing its goal of a positive settlement of disputes. However, the complexity of combining negotiation and third-party dispute settlement leads us to consider the tensions as well as the complementarity or contradictions. The Banana dispute illustrates the whole range of possible relationships, as will be shown by a short recollection of this saga (Part II). The next part of this chapter will then recapitulate in a general framework the various ways by which negotiations and third-party procedures are intertwined within the WTO DSS and point out the complexity of the intertwinings (Part III). Last, it will be pertinent to adopt a chronological analysis in order to point out the ambiguities and tensions of the relationship between negotiations, and their possible outcomes, and third-party dispute settlement, as well as to identify more specifically the room left in practise for mutually agreed solutions, i.e. in the perspective of the goal of the whole system, and how third-party intervention can either help or hinder (Part IV). The various outcomes illustrate how ambiguous the preference for mutually agreed solutions is.

II.  The Banana Saga: A Short Recollection3 I had some hesitation before including such a recollection in this paper for two main reasons. One is how boring such a chronology could be, ­something 3

 Gabrielle Marceau, “A WTO perspective and presentation of the Bananas Agreement”, Presentation before the Committee on International Trade of the European Parliament, 28 September 2010.

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that could be avoided by dispersing the corresponding information in a more general analysis. But what would have been lost consequently would have been, for those who haven’t followed closely the tracks of this case, the ability to grasp both its never-ending nature and its numerous twists and turns. The other reason is that the case is at the same time exemplary and unique. No other case illustrates as well the range of possible intertwinings between negotiations and third-party dispute settlement. It is therefore a good tool to investigate the potentials of the WTO Dispute Settlement System, including the possibility to take the road less traveled. But the fact that the case could be seen as a testimony of the flexibility of the system should not lead to underestimating its exceptional nature, and that it is likely not to be repeated. This cautionary note being made, it is possible to jump in to more than a decade of history of this case. The Banana Case began far before the birth of the WTO, in the early 90’s, when two episodes took place.4 It is concerned with the preferential treatment granted to some developing countries, ACP countries that are mostly former colonies of some EC Members, according to the fourth Lomé Convention, for which a waiver obtained under the GATT had been renewed under WTO law in 1996.5 Following the launch of the Single Market, a new EC single regime for the importation, sale and distribution of bananas was set up in July 1993. It was based, notably, on zero tariffs and on quotas that would benefit ACP countries, which protected them against competition by the so-called ‘dollars’ bananas, imported from Latin-American countries where they are produced mainly by American firms like Chiquita or Dole. Guatemala, Honduras, Mexico and the United States had requested consultations with the EC on 28 September 1995.6 After its accession to the WTO, Ecuador joined the complainants to again request consultations with the EC on 5 February 1996. Two months  After having expressed their concern in 1991 that an impending EU banana import regime would discriminate against Central American countries, Costa Rica, Colombia, Honduras, Costa Rica, Guatemala, Nicaragua and Venezuela requested consultations with the EU in 1992. The consultations having failed, the GATT Director-General was requested to use his good offices but made the suggestion to suspend the formal good offices for the sake of informal negotiations within the Uruguay Round commitments. Notwithstanding, the decision by the EU Council of Ministers on 17 December 1992 to establish a common banana regime that would enter into force in July 1993 was considered as indicating the failure of the good offices exercise. Therefore, at the request of the five countries, a panel was established which ruled that the EC regime violated various provisions of the GATT in June 1993. This was Banana I. When a new EU-wide banana import regime came into effect in July 1993, the same five Latin American countries requested a new panel to examine the new unified banana import regime. In February 1994, the second panel also ruled against the new banana import regime. This was Banana II. 5  For details, see Focus WTO, June 1996, at 5. 6  WT/DS16. 4

90   Hélène Ruiz Fabri later, i.e. the minimum delay between a claim and the request to establish a panel, such a request was introduced. The complainants asked the Director General to determine the composition of the panel, which means that no agreement had been reached in due time by the parties. The Panel report was issued on 22 May 1997. It concluded that the EC’s banana import regime was inconsistent with several provisions of WTO law, notably the tariff discrimination between ACP counties and other developing countries, and the implementation of quotas. Following an appeal notified by the EC in June 1997, the Appellate Body report, in which the Appellate Body mostly upheld the Panel’s findings, was circulated on 9 September 1997. After the DSB had adopted the Panel and Appellate Body reports, on 25 September 1997, began the time for implementation when, the defendant claiming that it was not able to implement immediately, the parties were supposed to find an agreement on the delay. The alternative, i.e. arbitration under Article 21:3 (c) DSU, was used, with the award being issued on 7 January 1998. The “reasonable period of time” for implementation of the recommendations and rulings of the DSB was considered to be 15 months and one week from the date of the adoption of the reports, i.e. it expired on 1 January 1999. During this period, negotiations to settle the case took place. On 18 August 1998, further to the new measures introduced by the EC in purported compliance with the recommendations and rulings of the Panel and the Appellate Body, the complainants requested consultations with the EC because they disagreed with the latter over the WTO-consistency of the EC’s revision of its legislation. The consultations were unfruitful, the EC announcing at the end of November that the new regulation would be fully operational from 1st January 1999. It then requested, on 15 December 1998, the establishment of a panel under Article 21.5 DSU to determine that the implementing measures of the EC must be presumed to conform to WTO rules unless challenged in accordance with DSU procedures. On 18 December 1998, Ecuador requested the re-establishment of the original panel, under Article 21:5 DSU, to examine whether the EC measures to implement the recommendations of the DSB were WTO-consistent. On 12 January 1999, the original panel was reconvened to examine both Ecuador’s and the EC’s requests under Article 21:5. At the same time (i.e. on 14 January 1999), the reasonable period of time being over, the United States, on the basis of Article 22:2 DSU, requested authorization from the DSB for suspension of concessions to the EC which, pursuant to Article 22:6 DSU, requested an arbitration on the level of suspension of concessions. The arbitrator’s report was circulated on 9 April and the reports of the 21:5 panels on 12 April 1999.7 The panel requested by 7

 See Hélène Ruiz Fabri, “Chronique du règlement des différends de l’OMC”, (1999) JDI 472–478; and of the same author, “Communautés européennes – Régime applicable à

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the EC found that, because a challenge had actually been made by Ecuador regarding the WTO-consistency of the EC implementing measures, it was unable to agree with the EC that the latter must be presumed to be in compliance with the recommendations of the DSB. This report was never adopted by the DSB, contrary to the Panel report requested by Ecuador, which found that the implementation measures taken by the EC were not fully compatible with the EC’s WTO obligations. This report was adopted by the DSB on 6 May 1999. In parallel, and following their request, the United States were authorized, from 19 April 1999, to suspend concessions to the EC. Ecuador made the same request in November 1999, the EC asking once again for an arbitration on the level of the suspension of concessions. The issue was referred to the original panel for arbitration. At the very same moment, the EC issued a proposal for a new reform of its banana regime, which consisted of a twostage process. A transitional tariff rate quota system would be applied until it was replaced by a tariff only system, the deadline for this replacement being 1st January 2006. The proposal included an alternative in terms of negotiations, first to continue discussions with the interested parties on the possible systems for the distribution of licences during the transitional regime, and second, if no feasible system could be found, negotiations under Article XXVIII of GATT in order to replace the system in force with a tariff only regime. But, on 24 February 2000, the EC informed the DSB that no agreement had been reached. One month later (on 24 March 2000), the arbitrator’s report on the Ecuadorian request for the suspension of concessions was circulated and on 18 May 2000, the DSB authorized Ecuador to suspend concessions to the EC. The EC went on reforming its system until it informed the DSB on 1st March 2001 of its adoption. But no later than 3 May 2001, it reported to the DSB that intensive discussions with the US and Ecuador, as well as the other cocomplainants and more generally the other banana supplying countries, had led to an agreement. On 22 June 2001, the EC notified an “Understanding on Bananas between the EC and the US” of 11 April 2001, and an “Understanding on Bananas between the EC and Ecuador” of 30 April 2001. The US and Ecuador had agreed to suspend their counter-measures as a counterpart for the commitment by the EC, first to adjust the tariff quotas, then putting in place no later than 1st January 2006 a tariff-only regime. The EC notified the Understandings as mutually satisfactory solutions within the meaning of Article 3:6 DSU but both Ecuador and the US denied l’importation, à la vente et à la distribution des bananes (Mise en œuvre)”, in eds. B. Stern and H. Ruiz Fabri, La jurisprudence de l’O.M.C./The Case-Law of the WTO, 1996–1997, (Leiden/Boston, Nijhoff, 2005), at 189–243.

92   Hélène Ruiz Fabri this qualification, arguing notably that it would be premature to take the item off the DSB agenda. The maintaining of the DSB agenda bound the EC to periodically report on the implementation. What was then at stake was the request for two waivers for the notified understandings. These two waivers were given to the EC by the Doha Ministerial Conference,8 one for its discrimination on tariffs and one for its quotas, each decision having an Annex providing a special arbitration procedure. This procedure was aimed at checking if the EC kept its commitments in terms of retariffication9 and according to the Annex, the arbitrator could be seized a second time if no mutually agreed solution had been found following a first recourse to arbitration. This is exactly what happened. On 1st August 2005, a first ­arbitration10 had concluded that the EC measures did not fully implement the EC commitments. Then, following the absence of any agreed solution, a second arbitration took place,11 only to confirm that the situation had not improved. The only way by which the EC could go on maintaining a zero tariff for ACP countries was to negotiate free trade agreements, which it began to do. When the Latin-American countries threatened to block the Ministerial Declaration in Hong Kong in 2005, the Director General offered Good Offices to negotiate an acceptable level of tariffs. These negotiations lasted 18 months but ultimately failed. In parallel, the measures adopted by the EC following the two arbitrations under the Doha Waiver had been subject on 30 November 2005 to a request of consultations by Honduras, Nicaragua and Panama under Article 21:5 of the DSU. Then came the turn of Ecuador, first on 16 November 2006, second on 28 November 2006, with a revised request for consultations under Article 21:5 DSU and Article XXII GATT 1994. During the following days, several countries had requested to join the consultations (Colombia, Belize, Ivory Cost, Dominica, the Dominican Republic, Saint Lucia, St. Vincent and the Grenadines, Suriname, ­Cameroon, Jamaica, Panama and the United States). The European Communities accepted all these requests. The establishment of a panel under Article 21:5 was requested on 23 February 2007 by Ecuador and on 29 June 2007 by the United States.  EC – The acp-ec Partnership Agreement, Decision of 14 November 2001, WT/MIN(01)/15.  In fact, these commitments were intended to reach an agreement on the tariff levels with the Latin-American countries. The WTO rules provide no rule regarding these levels, except that they have to be negotiated with the “principal suppliers” of the Latin-American countries in the area of bananas, and that they should not be applied in a discriminatory way. It is not useful to say that such an agreement remained out of reach as long as the EC wanted to keep an advantage for ACP countries. 10  EC – The acp-ec Partnership Agreement, Recourse to Arbitration pursuant to Decision of 14 November 2001, WT/L/616, 1 August 2005. 11  EC – The acp-ec Partnership Agreement, Second Recourse to Arbitration pursuant to the Decision of 14 November 2001, WT/L/625, 27 October 2005.  8  9

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In both cases, the Director General was asked to determine the composition of the panel. Both compliance panel reports, the first one circulated on 7 April 2008,12 the second one on 19 May 2008,13 concluded that the EC had failed to implement the recommendations and rulings of the DSB. In both cases, pursuant to a request from the parties, the DSB agreed to an extension of the time-period of 30 days provided by Article 16:4 DSU for adoption or appeal to enable them to explore the possibility of reaching a mutually agreed solution. However, on 28 August 2008, the EC notified its decision to appeal certain issues of law and legal interpretations developed by the compliance panels. The Appellate Body reports were circulated on 26 November 2008 and adopted in December 2008. Still, more than ten years after the first reports, the conclusions about WTO inconsistencies of the EC measures remained. This was not the last episode because in 2008 Colombia and Panama also initiated a dispute against the EC. Simultaneously, the Director General was asked to provide his Good Offices. Curiously enough, this procedure was not initiated on the basis of Article 5 DSU which deals with good offices, mediation and conciliation but on the basis of Article 3:12 DSU, which states that when a claim is introduced by a developing country against a developed country, the complainant has the right to invoke, instead of the provisions of Articles 4, 5, 6 and 12 DSU, the corresponding provisions of the Decision of 5 April 1966, Accelerated procedure at the request of a developing country Member.14 Yet, the first paragraph of Attachment B of this Decision states that, “[a]ny time after a request for consultations is made pursuant to Article 4 of the DSU, any party to the dispute15 may submit a request to the Director-General16 for provision of good offices, conciliation or mediation”.17 The conditions were met in the Banana Case inasmuch as the good offices provided were not within the original case (DS27) in which the United States acted as a complainant but within cases generated by claims introduced more  EC – Regime for the Importation, Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador, WT/DS27/RW2/ECU. 13  EC – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States, WT/DS27/RW/USA. 14  BISD, 14S/18. 15  Official FN: Article 1.1 of the DSU indicates that a ‘dispute’ in this context arises upon initiation of consultations pursuant to Article 4. 16  Official FN: References to the Director-General may, upon concurrence of the parties, include a designated Deputy Director-General. 17  Official FN: Good offices shall consist primarily of providing physical support and Secretariat assistance to the parties. Conciliation shall consist of good offices plus the further involvement of the Director-General in promoting discussions and negotiations between the parties. Mediation shall consist of conciliation plus the possibility of the Director­General to propose solutions to the parties. 12

94   Hélène Ruiz Fabri recently by Colombia (DS361) and Panama (DS364).18 These good offices,19 while remaining unfruitful, have opened the door to the continuation of the negotiations that led to the conclusion of two agreements between the European Union and its MFN suppliers, one with all the MFN suppliers from Latin America, the other with the United States. These two agreements were reached on 15 December 2009. The agreement with Latin American MFN suppliers, known as the Geneva Agreement on Trade in Bananas,20 was circulated at the General Council, which took note of it during its meeting of 17–18 December 2009. The agreement between the US and the EU was notified on 9 June 2010. They were formally signed in May 2010. Thus, it took 13 years between the end of the initial phase of Banana III and the mutually agreed solutions. The twists and turns of the case illustrate well the complex intertwining between negotiations and third-party dispute settlement, including the very specific and ad hoc regime provided by the Doha waiver. They also show how ambiguously the way in which the preference for mutually agreed solutions functions. The EU has saved time, much time, a time won inasmuch as one cannot expect the mutually agreed solutions to go beyond the rulings of the initial phase. Anyway, the settlement of the case does not mean that it is removed from the agenda of the DSB. For this, it would be necessary for the mutually agreed solutions to be formally notified, which has not been the case yet, neither for the new schedule by which the EC is supposed to implement the agreed tariffs.

III.  The Complex Intertwining between Negotiations and Third-Party Dispute Settlement within the WTO DSS: A General Framework Several criteria can be used to analyse the relationship between negotiation and third-party dispute settlement within the WTO DSS. A.  The intertwining between negotiation and third-party dispute settlement at the WTO is twofold. On the one hand, the DSU itself provides for several opportunities and even obligations to negotiate, therefore contributing to the intertwining. On the other hand, negotiations are always possible in parallel  EC – Regime for the Importation of Bananas (DS361) Initiated by Colombia, EC – Regime for the Importation of Bananas (DS364) Initiated by Panama, Report by the Director-­General on the Use of His Good Offices in the Above-Mentioned Disputes (pursuant to Article 3.12 of the DSU), WT/DS361/2 and WT/DS364/2, 22 December 2009. 19  In fact, one can wonder whether the process was not rather a mediation, inasmuch as the Director General had nominated a mediator. 20  WT/L/784. 18

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to and all the way through third-party dispute settlement proceedings. Logically, the first ones are, at least to a certain extent, subject to more legal rules. But this does not mean that the negotiations that are held simultaneously to third-party dispute settlement proceedings escape all the legal constraints of the DSU. B.  If one focuses on compulsory negotiations, i.e. the ones required by the DSU, they have in common the need to correspond to certain steps in the third-party dispute settlement process, and therefore have a procedural dimension. What is interesting in this regard is that although primacy is given in any case to an agreement to be found between the parties, it does not amount to a power or an ability given to each of them to block the procedure once a claim has been introduced. The system has been conceived so that when the parties are not able to find an agreement, the procedure can nevertheless go ahead unless the claimant decides to suspend it, at least during the initial phase of adjudication, with the implementation phase presenting more complexities. This calls for two further remarks. First, the room left for finding agreement between the parties in the build-up to the proceedings can make the WTO DSS look similar to arbitration. This can lead to the denial of the judicial character of this system, and it is all the more so that it perfectly fits with the mantra of the Member-driven organization.21 But this should nevertheless not be overestimated inasmuch as such trends can also be found in the most institutionalised judicial dispute settlement systems. Thus, in the ICJ a party not having a judge of its nationality on the bench is allowed to name an ad hoc judge. Second, the DSU provides for several ways of settling disputes. Beyond the negotiations which take place first because “[a] solution mutually acceptable to the parties to a dispute (. . .) is clearly to be preferred” (Article 3:7 DSU), the parties can opt for good offices, mediation, conciliation (Article 5 DSU and Article 3:12 DSU – see above the Banana Case) and what is called an “expeditious arbitration” (Article 25 DSU). It is up to the parties to find a common agreement to have recourse to these means of settlement and their will will prevail, which legally speaking means recourse to the most  Joseph H. Weiler, “The Rule of Lawyers and the Ethos of Diplomats: Reflections on the Internal and External Legitimacy of WTO Dispute Settlement”, Harvard Jean Monnet Working Paper no 9/00, at 4. Available at http://jeanmonnetprogram.org/papers/00/000901 .html (last accessed 7 November 2011); also published in (2001) Journal of World Trade 191–207; Hélène Ruiz Fabri, “Qui gouverne à l’OMC et que gouverne l’OMC?” (2010) Cahier En Temps reel. Available at http://www.entempsreel.com/2010/10/22/qui-gouvernelomc-et-que-gouverne-lomc (last accessed 5 August 2012).

21

96   Hélène Ruiz Fabri well-known procedure, i.e. the panel and Appellate Body process, an auxiliary one. But the practise goes against this qualification as auxiliary to other third-party dispute settlement means inasmuch as, despite a note from the Director General inciting the WTO Members to use the means provided by Article 5,22 this provision has never been implemented.23 In addition, the arbitration under Article 25 has been used only once, and moreover in very specific circumstances.24 This is not very surprising for two main reasons. One is that good offices, mediation and conciliation do not result in binding decisions, leaving the parties with the necessity to opt for a solution and therefore merely supplementing negotiations. And although the expeditious arbitration does not have the same limit, its comparative advantages still have to be acknowledged. One could come precisely from the expeditious nature but it remains to be demonstrated that, while requesting agreement of the parties in many procedural respects, it could be much faster than the panel process. This is the second reason. The timeframe provided by the DSU for the panel and Appellate Body proceedings is a rather tight one and although it is somehow criticised for not being fast enough or for not being respected, a view not necessarily widely shared by the parties which consider in any event this timeframe as unrealistic, it is difficult to compete with in terms of efficiency.25 Anyway, it remains to be demonstrated that both parties have as a goal to expedite the settlement process. More often the defendant does all it can to delay it. In this regard, agreeing with arbitration would be nonsensical. Thus, the DSU allows the claimant to request the establishment of a panel if the defendant “does not respond within 10 days after the date of receipt of the request, or does not enter into consultations within a period of no  See Communication from the Director-General, Article 5 of DSU, WT/DSB/25, 17 July 2001.  There is only one example of circumstances where three WTO members: the Philippines, Thailand and the EC, jointly requested the Director-General to mediate in order to examine the extent to which a preferential tariff treatment granted by the EC to other Members unduly impaired legitimate export interests of the other two requesting Members. The task of the mediator was also possibly to propose a solution. But the requesting Members considered the matter not to be a ‘dispute’ within the terms of the DSU, although they agreed that the mediator could be guided by procedures similar to those envisaged for mediation under Article 5 of the DSU. The Director-General nominated a Deputy Director-General to be the mediator (Communication from the Director-General, Request for Mediation by the Philippines, Thailand and the EC, WT/GC/66, 16 October 2002). The parties had agreed that the conclusions would remain confidential (Communication from the Director-General, Request for Mediation by the Philippines, Thailand and the EC, Addendum, WT/GC/66/ Add.1, 23 December 2002). 24  United States – Section 110(5) of US Copyright Act, WT/DS160. 25  Hélène Ruiz Fabri, “Le règlement des différends de l’OMC: une forme d’arbitrage?” (2009) Archives de philosophie du droit no 52, at 157–179. 22 23

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more than 30 days, or a period otherwise mutually agreed, after the date of receipt of the request” (for consultations) (Article 4:3), or “if the consultations fail to settle a dispute within 60 days after the date of receipt of the request for consultations” or “during the 60-day period if the consulting parties jointly consider that consultations have failed to settle the dispute” (Article 4:7), being understood that these delays can be reduced in cases of emergency, e.g. perishable goods,26 and are cut in half when the dispute concerns ­subsidies.27 The next steps in which negotiations have to take place are:   i) The terms of reference. Unless the parties to the dispute agree otherwise, the panel has the standard terms of reference provided by Article 7 DSU, which has always been the case since the first year when the case with special terms of reference took place;28   ii) The composition of the panel. In practise, the WTO Secretariat proposes panelists to the parties, in accordance with the conditions mentioned in Article 8 DSU. To make the choice smoother, an indicative list of panelists is provided to the parties. But the latter have increasing difficulty in finding agreement and increasingly use the possibility they have after 20 days following the establishment of the panel to ask the Director General to determine the composition of the panel. Whereas such a request was made in only one third of the cases having a number between 1 and 200, this ratio is over two-thirds for the cases numbered after 200. This phase has therefore become time-consuming, lasting an average of 70 days, while parties reluctant to go to the Director General try to find an agreement for more time. iii) There is a reasonable period of time available for the defendant to implement the rulings of the panel and/or the Appellate Body in case there is something to implement and it cannot be done immediately. Although Article 21:3 also mentions an approval by the DSB of the period of time proposed by the defendant, rather than an agreement between the parties, this is not really an option inasmuch as this approval requires a consensus with the complainant and therefore is in essence an agreement between the parties. If they are not able to find an agreement, the period of time for implementation is to be “determined through binding arbitration within 90 days after the date of adoption of the recommendations and rulings” (Article 21:3 (c)). There, another set of negotiations can take place for the choice of the arbitrator, insofar as it is noted that,  Article 4.8, which has never been implemented.  Article 4.3 and 4.4 of the Subsidies and Countervailing Measures Agreement. 28  Brazil – Measures Affecting Desiccated Coconut, WT/DS22. 26 27

98   Hélène Ruiz Fabri “if the parties cannot agree on an arbitrator within ten days after referring the matter to arbitration, the arbitrator shall be appointed by the Director-General within ten days, after consulting the parties” (Footnote to Article 21:3 (c)); iv) The consultations embodied in a recourse to Article 21:5 DSU by either party following a “disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings”;    v) The composition or completion of the Article 21:5 panel if it is not possible to resort to the original panel; vi) The level of compensation. In the event that the recommendations and rulings are not implemented within the alloted reasonable period of time, the Member concerned by implementation is bound to “enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation” (Article 22:2). An agreement of a satisfactory compensation has to be found within 20 days after the date of expiry of the reasonable period of time, otherwise “any party having invoked the dispute settlement procedures may request authorization from the DSB to suspend the application to the Member concerned of concessions or other obligations under the covered agreements”. However, in practise, whether because compensation is too costly or because the other party prefers to opt for a suspension of concessions that allows them to choose the trade counter-measures to be taken, there are very few examples of successful negotiations.29 The most frequently cited example is the case of United States – Section 110(5) of US Copyright Act in which on 23 June 2003,30 the US and the EC informed the DSB of a mutually satisfactory temporary arrangement, after having decided to suspend the arbitration proceeding under Article 22:7 requested in 2002. As shown by their brief description, all these negotiations are of several kinds, in the sense that they don’t all have the same purpose or object. While  The compensation does not consist of a monetary payment but as a benefit equivalent to the benefit nullified or impaired by the measure that has still to be modified through implementation. In any case, the compensation being subject as it is to most-favoured nation treatment also benefits other WTO Members. This is except if the parties to the dispute are able to identify a sector which is of particular interest to the complainant. Then, the non-discriminatory nature of compensation is not an incentive to negotiate efficiently, neither for the complainant who does not get an exclusive benefit, nor for the respondant who would have to carry a burden heavier than the amount of the benefit impaired or nullified. 30  WT/DS160. 29

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some of them are also devoted to trying to find a mutually agreed solution on the merits of the dispute, the others – most of them – have a far more limited scope and purpose and are targeting procedural decisions or stages which are to be taken within a predetermined period of time or else the DSU provides for a third-party intervention (the Director General or arbitration or an alternative) that imposes a solution. In terms of relationships between negotiations and third-party dispute settlement, while the latter constitute diplomacy under the threat of a guillotine, the former carry higher stakes. This leads us to move the line of reasoning in order to focus on them. C.  Focusing on negotiations as to the merits of the dispute is obviously going to the heart of dispute settlement. In this regard, the WTO DSU displays a rather clear purpose. As stated by Article 3:7 DSU, “[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute” and the mindset that comes with this is that “[a] solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred”. This is more or less a legal expression of the realist belief according to which a bad agreement is better than a good adjudication, under the assumption that negotiations result in a compromise which is more likely to effectively settle a dispute for good. This has two main implications. First, this can explain why negotiations are embodied in the dispute settlement process and constitute a binding stage before going ahead with a third-party dispute settlement. This is in no way original. Numerous compromissory clauses set out an obligation to negotiate as a pre-condition to be entitled to activate a third-party dispute settlement process, more often to seize the ICJ or an arbitral tribunal. Quite simply the DSU designs the negotiation stage more carefully than most of the other compromissory clauses or dispute settlement treaties. Second, the preference for a mutually acceptable solution can result from its often being quicker than third-party proceedings, which can be interrupted at any time. But giving such a primacy to the parties’ will does not mean that they are completely free when opting for a solution. Indeed the DSU requires that any mutually agreed solution is compatible with the covered agreements, i.e. WTO law (see below). (a)  Consultations The DSS is activated by the introduction of a claim that marks the beginning of dispute settlement at the WTO and in turn a period for compulsory negotiations called consultations – even if it is likely that there has already been some diplomatic contact before. Article 3:7 would appear to suggest this when it states that, “before bringing a case, a Member shall exercise its judgement as to whether action under these procedures would be fruitful”.

100   Hélène Ruiz Fabri It is not about giving evidence of a legal interest in bringing proceedings (the plaintiff does not have to prove that he has a direct or even legitimate personal interest to protect). The Appellate Body has already concluded, specifically in the Bananas Case where the EC challenged the US legal interest in bringing the case inasmuch as they do not export bananas, that Members have a broad discretion in deciding whether to bring a case, even though the texts call for great discipline.31 And although, in Bananas, it appeared to take an interest in the way in which a Member assesses its situation,32 it also noted that the discipline required is a “largely self-regulating” obligation, so that a Member bringing an action should be presumed to have duly examined its potential fruitfulness.33 Theoretically, this presumption may be questioned. In practise, however, it is virtually impossible to rebut owing to the extremely comprehensive way in which the direct or indirect nullification or impairment of benefits is conceived, since in its determination not only trade volumes but also prospective competitive relations can be taken into account. From this standpoint, the presumption is a reasonable one. It reveals a very open system. The consultations constitute the diplomatic phase of the dispute settlement proceedings and the DSU devotes to them a mere but rather detailed provision. The complainant sends the request for consultations to the defendant but also has to notify it to the WTO Secretariat which will publish it on the WTO website (www.wto.org) while allocating it a number/mark, WT/ DS (for World Trade/Dispute Settlement), which will be used all the way through the procedure. According to Article 4:4, the request for consultations “shall give the reasons for the request, including identification of the measures at issue and an indication of the legal basis for the complaint”. It must therefore make clear what are the provisions of the WTO agreements upon which a violation is invoked. It not only confirms that claims should not be introduced without thinking but also plays a role thereafter. Indeed, even if the request for consultations does not completely comprise all of the details of the dispute, it has to be written in a relatively detiailed way since a panel request is not admissible if it points at a measure that has not been

 Bananas Report, WT/DS27/AB/R, at § 135.  Bananas Report, WT/DS27/AB/R, at § 136. In this particular instance, the Appellate Body said it was satisfied that the United States was justified in bringing its claims and referred, in particular, to “a potential export interest” by the United States as a basis for acknowledging its right to bring a case. 33  A panel does not have to consider this assessment nor question it on its own authority. See Mexico – Anti-dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States. Recourse to Article 21.5, WT/DS132/RW, at § 74. 31 32

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formally subject to consultations.34 Of course the request for consultations has to be distinguished from the consultations themselves. As the Appellate Body underlined, “[a]s long as the complaining party does not expand the scope of the dispute, we hesitate to impose too rigid a standard for the “precise and exact identity” between the scope of consultations and the request for the establishment of a panel, as this would substitute the request for consultations for the panel request”.35 Moreover, the inadmissibility resulting from the fact that the measure at stake has not been subject to consultations is not what is called in French “un moyen d’ordre public”, which means that the argument is adjudicated only if the defendant brings it.36 Last, under the reservation that this was about a recourse to Article 21:5 DSU, i.e. the implementation phase, the Appellate Body has specified that “where the responding party does not object, explicitly and in a timely manner, to the failure of the complaining party to request or engage in consultations, the responding party may be deemed to have consented to the lack of consultations and, thereby, to have relinquished whatever right to consult it may have had”.37 The Appellate Body has notably considered that such a plea of inadmissibility could not be raised for the first time at the appeal stage.38 The most appropriate time is probably the moment when the DSB deals with the panel request for the first time by opposing the request under the argument that it points to measures which have not been subject to consultations (see below). A request for consultations can be based on several provisions of several WTO agreements but must nevertheless be based on such provisions. Even if it has long been stated that the WTO agreements should not be interpreted in clinical isolation and if the question of applicable law within the WTO DSS remains open, it remains true that a request for consultations as well as a panel request are bound to invoke some WTO inconsistencies, these requests being allowed to refer to several provisions of WTO law as a legal basis.39  US – Import Measures on Certain Products from the European Communities, WT/DS165/ AB/R, at § 70. 35  US – Subsidies on Upland Cotton, WT/DS267/AB/R, § 293. The reference to the “precise and exact identity” was quoted from the Appellate Body Report, Brazil – Aircraft, § 132. 36  Mexico – Anti-dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States. Recourse to Article 21.5, WT/DS132/AB/RW, § 64. 37  Mexico – Anti-dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States. Recourse to Article 21.5, WT/DS132/AB/RW, § 63. 38  US – Tax Treatment for “Foreign Sales Corporations”, WT/DS108/AB/R, § 165. 39  The case law (until 2009) shows that trade in goods remains paramount since the TRIPS and the GATS have been invoked, respectively constituting 8% and 6% of the requests for consultations. As for trade in goods, beyond the GATT that is always mentioned in the requests, the most invoked agreements are those concerning agriculture, antidumping (21%) and subsidies (23%). 34

102   Hélène Ruiz Fabri The consultations can also be polygonal when a single request for consultations emanates from several WTO Members. The Banana Case is the most famous in this regard, since Guatemala, Honduras, Mexico, Ecuador and the United States introduced a common claim.40 Polygonal consultations can also happen when several WTO members introduce quasi-simultaneous requests for consultations in relation to the same measure. Thus, the EC,41 Japan,42 Brazil,43 Korea,44 China,45 Switzerland46 and Norway47 requested on 4 April 2002 consultations with the US regarding their safeguard measure on imports of certain steel products and the consultations took place jointly in the premises of the US delegation in Geneva. As such, the consultations can take place outside the WTO and, in any event, the Secretariat does not take part in them. It is all about the parties facing each other with, if the request is made pursuant to GATT Article XXII and DSU Article 4.11,48 several other WTO Members attending as third parties. The complainant can indeed open the consultations to any WTO Member that has expressed its will to take part during the ten days following the publication of the request for consultations. The defendant has nevertheless the ability to oppose it, most of the time because it denies that this Member has a substantial interest in the case. Depending on the case, the third participants can be quite numerous. Such a participation is beneficial inasmuch as the consultations are confidential and can have further benefits in terms of the functions of the consultations (see below). The confidentiality of the consultations is logical but induces some tension within the system. The reasoning relies on the idea of good faith. First comes the question of knowing if what has been subject to the consultations coincides with the object of the claim, inasmuch as it is for the complainant to define the content of the panel request. As mentioned above, it seems impossible to require an exact identity but a balance can also be difficult to find between the need that consultations be useful – the parties should have a margin of liberty which should not backfire – and the requirement of good faith – the distinction between the diplomatic stage and the ­judicial stage  EC – Regime for the Importation, Sale and Distribution of Bananas, WT/DS16, followed by EC – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27. See above. 41  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS248. 42  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS249. 43  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS250. 44  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS251. 45  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS252. 46  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS253. 47  US – Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS254. 48  If the request for consultation is made under GATT Article XXIII then third party intervention is not possible. 40

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cannot justify any contradiction. But how can this be checked? In ­Brazil – Aircrafts,49 the Appellate Body noticed that the consultations have as a purpose to specify the facts. Under this approach, it is enough to make sure that the same dispute is dealt with (global assessment). Such a relaxed control is logical but leaves open the question of knowing if a WTO Member is bound by what happened during the consultations. The threshold is once again good faith and the functioning of the DSS shows a recurrent temptation to look into the consultations, although it could raise issues of evidence given that there is neither an account nor a verbatim of the consultations. Thus, in EC – Customs Classification of Certain Computer Equipment, the Appellate Body did not hesitate to make use of an information sheet presented by the EC to the US during the consultations to contrast the fact that they originally used terms that they later found too vague when used by the US during the proceedings.50 The consultations take place in the time frame designed by the DSU. The defendant is bound to answer to the request for consultations within ten days after notification and to engage consultations no later than 30 days after this date. Keeping silent is not a means for blocking the process. If the defendant does not respect these deadlines, he loses any right for consultations and the claimant becomes entitled to request directly the establishment of a panel. It is not the panel request but the establishment of the panel that marks the end of the consultations phase. The panel request is an additional pressure exerted by the complainant on the defendant who can gain extra time by opposing the first request. This comes from the fact that the adoption of the panel request requires a positive consensus at the first DSB meeting following its introduction whereas only a reverse consensus can block it at the second meeting. The respondant can gain de facto nearly one month and a half, unless the complainant asks for extraordinary meetings of the DSB. In fact, the average time for establishing a panel is 46 days. In any case, all depends on the mindset of the parties. Once it is acknowledged that the consultations are a central piece in the dispute settlement process and that the parties as well as the trade system find their advantage in an amicable and precocious settlement of disputes, it remains true that there are two kinds of implementation of the consultations. One corresponds to a compulsory passage that the parties cross while already having in mind  Brazil – Export Financing Programme for Aircraft, WT/DS46/AB/R, §§ 131–132. § 132: “We do not believe, however, that Articles 4 and 6 of the DSU, or paragraphs 1 to 4 of Article 4 of the SCM Agreement, require a precise and exact identity between the specific measures that were the subject of consultations and the specific measures identified in the request for the establishment of a panel.” 50  WT/DS62/AB/R, § 70. 49

104   Hélène Ruiz Fabri the subsequent judicial steps and the other to the genuine effort in favor of an agreed solution. In the first case, the complainant looks above all for pieces of evidence in preparation for the panel phase, whereas the respondant looks for specifications about the alleged inconsistencies in order to anticipate his defence, but also tries to gain some time by promising to provide further information and even tries some dissuasive manouvers by questioning the complainant on his own ‘turpitudes’ with the half-hidden prospect of a counter-claim. This is well illustrated by the cases Embraer/Bombardier.51 Brazil requested consultations with Canada on 19 June 1996 in relation to the export financing programs of the latter. The consultations took place in July 1996 and Brazil submitted its first panel request no later than September 1996. Then Canada introduced its own claim against Brazilian measures concerning exports of civil aircrafts on 10 March 1997. The two panels were established together by the DSB on 23 July 1998 and the proceedings went on in parallel. Even if this contradicts the principle laid down by Article 3:10 DSU according to which “[i]t is (. . .) understood that complaints and counter-complaints in regard to distinct matters should not be linked”, this is not unusual, especially in the field of export subsidies where any claim puts a precarious balance under threat. Thus, when the EC complained in November 1997 against the US tax system known as Foreign Sales Corporation52 by arguing that it should be considered as establishing a forbidden export subsidy, the US responded by disputing tax regulations from Belgium,53 the Netherlands,54 Greece,55 Ireland,56 and France.57 The US and the EC have even refined their practise, in the cases Boeing v. Airbus, to the point of submitting the requests for consultations on the same day.58 In the second kind of consultations, Members, in accordance with the requirement laid down by Article 4:5 DSU, attempt to obtain satisfactory adjustment of the matter, keeping in mind on the one hand the principle laid down by Article 3:10 according to which the dispute settlement procedures should be engaged in good faith and not considered as contentious acts and on the other hand the goal stated by Article 3:7 to secure a solution to  Brazil – Export Financing Programme for Aircraft, WT/DS46 and Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70. 52  US – Tax Treatment for “Foreign Sales Corporations”, WT/DS108. 53  Belgium – Certain Income Tax Measures Constituting Subsidies, WT/DS127. 54  Netherlands – Certain Income Tax Measures Constituting Subsidies, WT/DS128. 55  Greece – Certain Income Tax Measures Constituting Subsidies, WT/DS129. 56  Ireland – Certain Income Tax Measures Constituting Subsidies, WT/DS130. 57  France – Certain Income Tax Measures Constituting Subsidies, WT/DS131. 58  EC and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/ DS316 and US – Measures Affecting Trade in Large Civil Aircraft, WT/DS317. 51

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the dispute being both mutually acceptable and consistent with the covered agreements. Contrary to any common assumption, this is by far the most frequent situation as shown by the fact that about one request for consultations out of two is not followed by a panel request. Another clue allows us to assess how seriously the Members deal with the consultations. Thus, while the DSU allows the complainant to request a panel after the expiry of the 60 days following the request for consultations – so as to avoid unproductive negotiations to drag on – the average time between requests for consultations and panel requests is in fact 164 days with a minimum of three days59 and a maximum of 1529 days.60 In any event, the end of the consultations as envisaged by Article 4 DSU does not mean the end of the negotiations in reality. (b)  Negotiations Beyond the Consultations The DSU does not put a veil on the fact that negotiations can take place in parallel to any kind of proceedings. On the contrary, it consistently and openly states that “[p]anels should consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution” (Article 11). Once again, this is not unique. Thus, it suffices to mention Article 39 of the European Convention of Human Rights on Friendly Settlements, which states in its first paragraph that “1. At any stage of the proceedings, the Court may place itself at the disposal of the parties concerned with a view to securing a friendly settlement of the matter on the basis of respect for human rights as defined in the Convention and the Protocols thereto”.61 These negotiations are not legally framed by the DSU. In particular, they are confidential, develop outside the WTO and remain out of reach of any third attendance. Nonetheless, the possible agreement reached by the parties has in principle to be notified to the DSB. While this is not the most common situation, the DSB should be able to ensure that the agreement is in line with WTO law. One explanation is that the parties are reluctant to notify and at least are keen to wait until they are sure that the agreement is fully  EC – Measures Affecting the Grant of Copyright and Neighbouring Rights, WT/DS115.  EC – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, WT/DS174. 61  The paragraphs are: 2. Proceedings conducted under paragraph 1 shall be confidential. 3. If a friendly settlement is effected, the Court shall strike the case out of its list by means of a decision which shall be confined to a brief statement of the facts and of the solution reached. 4. This decision shall be transmitted to the Committee of Ministers, which shall supervise the execution of the terms of the friendly settlement as set out in the decision. 59 60

106   Hélène Ruiz Fabri implemented. The main reason is that panels do not have the competence to assess non-compliance with a mutually agreed solution,62 only claims of violation of a covered agreement. The Parties are therefore cautious and keep the case on the DSB agenda. In any case, a mutually agreed solution can be reached at any stage of the proceedings.

IV.  The Room Taken by or Left for Mutually Agreed Solutions Within the Proceedings: The Ambiguous Primacy of Mutually Agreed Solutions The year 2009 was a red-letter year to the extent that it saw the settlement of two cases – the Bananas Case, although in fact not formally settled, and the Hormones Case63 – which were both started during the GATT period and were reactivated under the WTO regime. These two examples illustrate two different ways of reaching an amicable settlement, differing from the one provided by Article 3:6 DSU, although this provision looks like it allows only one means of amicable settlement. But it remains true that only 70 out of the 410 cases registered until 1st June 2010 have led to the notification requested by Article 3:6 DSU. At first glance this could mean that there are few amicable settlements and that the Dispute Settlement System rather functions according to the logic of a contentious machinery. And yet the number of actual amicable settlements since 1st January 1995, including outside the scope of the formal rules provided by the DSU, testifies on the contrary to the rationale of Article 3:7 DSU, according to which “[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute. A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred”, and is not a mere utopia. Notwithstanding, an identification of the agreements that are not notified remains difficult due to fragmented information. Their analysis has therefore to be made separately of the agreements notified according to Article 3:6 DSU and the agreements, be they notified or not, have to be distinguished from the implicit solutions. In any event, these distinctions can be blurred by the fact that while announcing officially to the DSB that a mutually agreed  DSU review proposal in that case.  EC – Measures Concerning Meat and Meat Products (Hormones), WT/DS48 and WT/DS26. The US and the EU notified on 25 September 2009 an agreement concluded on 13 May 2009 (WT/DS26/48). The solution was nonetheless only partial inasmuch as it did not include the second complainant, Canada, and it sparked off some concern of other meat producers, as is shown by the declarations made by Australia, New-Zealand, Argentina, Uruguay and Brazil during the following meeting of the DSB on 23 October 2009, WT/ DSB/M275.

62 63

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solution has been reached, the Parties refrain from formally notifying the agreement as such until it has been fully implemented. In practise, only a close follow-up helps to distinguish between the notification of the existence of an agreement and the formal notification of it, although it has legal consequences inasmuch as only the latter leads to the withdrawal the case from the DSB agenda. In any event, even if the accumulated number of mutually agreed solutions means that the preference for them has come true, any stocktaking leaves open the issue of the second requirement mentioned in Article 3:7, that the mutually acceptable solution is consistent with the covered agreements. More precisely, one can wonder if and how this consistency is checked. A.  Agreements Notified According to Article 3:6 DSU This provision states that “[m]utually agreed solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements shall be notified to the DSB and the relevant Councils and Committees, where any Member may raise any point relating thereto”. This notification can be accomplished at any stage of the proceedings, although the consultations phase gathers more than half of the notified mutually agreed solutions. Such a notification can be delayed for a very long time. Thus, in the Chile – Measures affecting the Transit and Importing of Sword­ fish Case, for which the request for consultations had been submitted on 19 April 2000, it was only on 28 May 2010 that a joint statement of the parties announced that they intended to notify a mutually agreed solution on the basis of Article 3:6 DSU and that they had agreed without any condition that no party would assert in the future any procedural right granted by the DSU in relation to this case.64 During the panel phase, the notification of a mutually agreed solution can take place before the establishment of the panel,65 after the establishment but before its actual setting up,66 or after this setting up. In the latter situation, Article 12:7 DSU states that the panel has to confine its report “to a brief  WT/DS193/4.  Pakistan – Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/ DS36, WT/DS43/3, Ireland – Measures Affecting the Grant of Copyright and Neighbouring Rights, WT/DS82/3, EC – Measures Affecting the Grant of Copyright and Neighbouring Rights, WT/DS115/3, Egypt – Anti-Dumping Duties on Matches from Pakistan, WT/DS327. 66  Argentina – Transitional Safeguard Measures on Certain Imports of Woven Fabric Products of Cotton and Cotton Mixtures Originating in Brazil, WT/DS190, Brazil – Measures Affecting Patent Protection, WT/DS199, Turkey – Certain Import Procedures for Fresh Fruit, WT/ DS237, US – Equalizing Excise Tax Imposed by Florida on Processed Orange and Grapefruit Products, WT/DS250, Australia – Quarantine Regime for Imports, WT/DS287. 64 65

108   Hélène Ruiz Fabri description of the case and to reporting that a solution has been reached”. Six cases have resulted in such reports.67 It is of interest to underline that for the first three cases (DS7, 12, 14) dealing with the Trade Description of Scallops, as well as for the fourth, related to Measures Affecting Butter Products (DS72), where the EU acted as defendant, the notifications of the mutually agreed solutions took place after the Panel had communicated its interim report to the parties. It is no doubt that such a report that provides the purported rulings of the panel gives, when it is made clear that the defendant will loose, some basis for negotiations even if it is plausible that the complainant tends to be adamant. For the cases DS99 and DS323, the notification took place before the interim report was issued but after the last hearing which, most of the time, is given to understand the outcome of the thirdparty settlement of the dispute.68 Curiously enough, no report was published in relation to the cases DS21, DS210 and DS261, although a mutually agreed solution had been notified after the setting up of the Panel.69 It seems that the Legal Affairs Division didn’t find it useful due to the embryonic nature of the proceedings. In fact, the only stage in the proceedings where there is no case of notification is the appeal stage, even though Rule 30 (2) of the Working Procedure for Appellate Review states explicitly that: “[w]here a mutually agreed solution to a dispute which is the subject of an appeal has been notified to the DSB pursuant to paragraph 6 of Article 3 of the DSU, it shall be notified to the Appellate Body”. It has to be acknowledged in this regard that due to its brevity and the intensity of the legal sparring matches it generates, the appeal phase does not leave much room for negotiations. This being said, the stocktaking is not over inasmuch as mutually agreed solutions can also be found during the implementation phase. Indeed, such solutions have already emerged at any stage, be it after the ­adoption

 EC – Trade Description of Scallops, WT/DS7, EC – Trade Description of Scallops, WT/DS12, EC – Trade Description of Scallops, WT/DS14, EC – Measures Affecting Butter Products, WT/DS72, US – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99, Japan – Import Quotas on Dried Laver and Seasoned Laver, WT/DS323. 68  US – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99, Japan – Import Quotas on Dried Laver and Seasoned Laver, WT/DS323. 69  Australia – Measures Affecting the Importation of Salmonids, WT/DS21, Belgium – Administration of Measures Establishing Customs Duties for Rice, WT/DS210 and Uruguay – Tax Treatment on Certain Products, WT/DS261. 67

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of the report(s),70 after the expiry of the reasonable period of time for implementation,71 during the proceedings with a Panel under Article 21:5 with the communication of a report according to Article 12:7 mentioned above,72 after the adoption of the reports following recourse to Article 21:5,73 after requests of authorisation from the DSB to adopt trade counter-­measures74 and even after such authorizations have been granted, as illustrated by the situation of Ecuador in the Banana Case, not to mention implemented, as illustrated by the situation of the US in the same case. In all events, it seems paradoxical to speak about amicable solutions at this stage of the case inasmuch as a WTO Member has been condemned. Although the facts, e.g. in the Banana Case as well as the Hormones Case, show that mutually agreed solutions can be notified at a very late stage of a case, one can wonder whether it means that the decision made by the DSB through the adoption of the report(s), and therefore the res judicata, is defeated, although this risk should be considered limited inasmuch as any mutually agreed solution is requested to be in line with WTO law. It all depends upon how this conformity is controlled (see below) but, in any event, the Banana Case shows its specificity inasmuch as at this stage the negotiation of tariff levels was at stake, a negotiation for which WTO law provides no rules. For all that, most of the mutually agreed solutions are not notified on the basis of Article 3:6 DSU. B.  Other Mutually Agreed Solutions Numerous agreements settling cases are not actually notified. Thus, the agreement between the US and the EU in the Hormones Case or, more recently,  US – Preliminary Determinations with Respect to Certain Softwood Lumber from Canada, WT/DS236. 71  EC – Trade Description of Sardines, WT/DS231, EC – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS292, EC – Measures Affecting the Approval and Marketing of Biotech Products, WT/DS293. 72  US – Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAMS) of One Megabit or Above from Korea, WT/DS99/RW, already mentioned. 73  Australia – Subsidies Provided to Producers and Exporters of Automotive Leather, WT/ DS126, Japan – Measures Affecting the Importation of Apples, WT/DS245, US – Final Dumping Determination on Softwood Lumber from Canada, WT/DS264, US – Investigation of the International Trade Commission in Softwood Lumber from Canada, WT/DS277. 74  Canada – Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103, Canada – Measures Affecting Dairy Exports, WT/DS113, US – Final Countervailing Duty Determination with respect to certain Softwood Lumber from Canada, WT/ DS257. 70

110   Hélène Ruiz Fabri the agreements concluded by China with the EU,75 the US76 and Canada77 to settle the dispute related to Measures Affecting Financial Information Services and Foreign Financial Information Suppliers. Most of the time, the parties content themselves with informing the DSB that they have reached an agreement without notifying it, so there is no formal mutually agreed solution. Thus, in the Mexico – Certain Pricing Measures for Customs Valuation and Other Purposes Case,78 Guatemala let the DSB know on 29 August 2005 that a mutually agreed solution had been reached with Mexico, but without formally notifying it.79 More often, the complainant contents himself with waiving his claim and withdrawing his request for consultations or the establishment of a panel by declaring that the dispute can be considered as settled although the right to reactivate it remains. Most frequently, cases remain inactive although it is common knowledge that an agreement has been reached. Thus, in the Australia – Textile, Clothing and Footwear Import Credit Scheme Case,80 the Update of WTO Settlement Cases informed, through an official statement of 25 November 1996, that the Office of the US Trade Representative in Washington gave notice that the case had been settled.81 Why don’t the parties notify all these agreements, in accordance with the requirements of Article 3:6 DSU? The explanation lies mainly in what is provided by Article 3:5 DSU which states that “[a]ll solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements, including arbitration awards, shall be consistent with those agreements and shall not nullify or impair benefits accruing to any Member under those agreements, nor impede the attainment of any objective of those agreements”. And yet the parties to a dispute are sometimes not sure – this is an euphemism – of the consistency of their mutually agreed solution with WTO law and do not want to publish the content of the corresponding agreement, not to mention the mere existence of an agreement. A second explanation, in fact the most common and convincing one, is linked to the fact that the complainant dreads that a notification according to Article 3:6 DSU would produce a relinquishment of the rights to pursue the procedure. The complainant fears therefore to be bound by the agreement and unable to the re-start the procedure if there is no compliance. This latter  China – Measures Affecting Financial Information Services and Foreign Financial Information Suppliers, WT/DS372. 76  China – Measures Affecting Financial Information Services and Foreign Financial Information Suppliers, WT/DS373. 77  WT/DS378. 78  WT/DS298. 79  WT/DS298/2. 80  WT/DS57. 81  WT/DS/OV/34, at 369. 75

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fear is not fully justifiable anymore since the last Appellate Body report in the Banana Case82 ruled that the notified agreement did not deprive Ecuador from initiating proceedings under Article 21:5 since this State had not explicitly given away its right to pursue such a procedure in the agreement. But this could also incite the defendants to ask for such a waiving clause in the agreements (as in the Sword Fish Case mentioned above). In any event, it is clear that the complainants remain cautious and tend to block any notification in order to keep the case on the DSB agenda until full ­implementation. But in place of mutually agreed solutions identified as such, it is implicit positive settlements that are produced more frequently, something which can be only highlighted through recourse to a chronological inquiry through the proceedings. C.  Implicit Settlements Implicit settlements can be detected at nearly any stage of the proceedings. (a)  Implicit Settlements During the Consultations The consultations are the phase when an amicable solution is the most likely to emerge. Besides this is the goal assigned to the consultations according to Article 4:3 DSU, which states that the parties must “enter into consultations in good faith, with a view to reaching a mutually satisfactory solution”. And yet, among the 410 requests for consultations registered between 1st January 1995 and 1st June 2010,83 176 have not led to a request for a panel, an amount which largely overcomes the 36 notifications made at this stage on the basis of Article 3:6 DSU. Of course, one cannot be sure that some of these consultations do not lead at some point to a request for a panel. Thus, there is no obstacle for the US to request the establishment of a panel in the Korea – Measures Concerning the Testing and Inspection of Agricultural Products Case for which consultations had been requested on 4 April 1995.84 But this is highly implausible, even if there could have already been a considerable delay between the request for consultations and the request for a panel.85 Nonetheless, nearly one case in two is amicably settled during the consultations. Even if most of these mutually agreed solutions, remain unknown or implicit, some of them surface in addition to the formal notification under Article 3:6 DSU by way of the announcement of an agreement or of the end  Hélène Ruiz Fabri and P. Monnier, “Chronique du règlement des différends de l’OMC”, (2009) JDI 3 927–928. 83  The last period, from June 2010 to June 2011, is not taken into account. 84  WT/DS3. 85  1529 days in the EC – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs Case, WT/DS174. 82

112   Hélène Ruiz Fabri of the measure, which can even lead the complainant to announce the withdrawal of the request for consultations.86 (b)  Implicit Settlements During the Panel Phase According to Article 11 DSU, which deals about the function of the panels, “[p]anels should consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution”. As mentioned above, nine cases achieved a mutually agreed solution. But numerous other solutions were found between the request for the establishment of a panel and the setting up of it. Indeed, it is enough that the ­complainant either not submit a second request after the rejection of the first panel request,87 or to withdraw this second request at the last moment88 or, last, to never determine the composition of the panel nevertheless established,89 so that as during the consultations phase an amicable solution emerges through an implicit standing down. As for the consultations phase,

 Mexico – Measures Affecting the Import of Matches, WT/DS232, Mexico – Certain Measures Preventing the Importation of Black Beans from Nicaragua, WT/DS284, EC – Definitive Safeguard Measure on Salmon, WT/DS326, South Africa – Anti-Dumping Measures on Uncoated Woodfree Paper, WT/DS374. 87  Malaysia – Prohibition of Imports of Polyethylene and Polypropylene, WT/DS1, India – Measures Affecting Export of Certain Commodities, WT/DS120, Slovak Republic – Measure Affecting Import Duty on Wheat from Hungary, WT/DS143, Colombia – Safeguard Measure of Imports of Plain Polyester Filaments from Thailand, WT/DS181, Romania – Import Prohibition on Wheat and Wheat Flour, WT/DS240. 88  EC – Duties on Imports of Grains, WT/DS13, US – Tariff Increases on Products from the European Communities, WT/DS39, US – Anti-Dumping Duties on Imports of Colour Television Receivers from Korea, WT/DS89, Argentina – Safeguard Measures on Imports of Footwear, WT/DS123, Peru – Tax Treatment on Certain Imported Products, WT/DS255, US – Determination of the International Trade Commission in Hard Red Spring Wheat from Canada, WT/DS310. 89  EC – Duties on Imports of Cereals, WT/DS9, US – Measures Affecting Imports of Women’s and Girls’ Wool Coats, WT/DS32, Australia – Subsidies Provided to Producers and Exporters of Automotive Leather, WT/DS106, Argentina – Measures Affecting Imports of Footwear, WT/DS164, Nicaragua – Measures Affecting Imports from Honduras and Colombia, WT/ DS188, Philippines – Measures Affecting Trade and Investment in the Motor Vehicle Sector, WT/DS195, US – Definitive Safeguard Measures on Imports of Steel Wire Rod and Circular Welded Quality Line Pipe, WT/DS214, Peru – Taxes on Cigarettes, WT/DS227, EC – Provisional Safeguard Measures on Imports of Certain Steel Products, WT/DS260, Australia – Certain Measures Affecting the Importation of Fresh Fruit and Vegetables, WT/ DS270, US – Countervailing Duties on Steel Plate from Mexico, WT/DS280, US – Subsidies and Other Domestic Support for Corn and Other Agricultural Products, WT/DS357, US – Domestic Support and Export Credit Guarantees for Agricultural Products, WT/DS365, EC – Certain Measures Affecting Poultry Meat and Poultry Meat Products from the United States, WT/DS389. 86

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such a withdrawal can come through a formal act.90 But it can also come in a more subtle way by invoking, once the panel has been set up, Article 12:12 DSU according to which “[t]he panel may suspend its work at any time at the request of the complaining party for a period not to exceed 12 months. (. . .) If the work of the panel has been suspended for more than 12 months, the authority for establishment of the panel shall lapse”. It is therefore enough for the complainant to request the suspension of the panel proceedings and to stay silent for one year in order to be considered as having dropped the claim. This possibility is not merely anecdotal inasmuch as it has happened 11 times,91 in addition to the two times it has happened for panels established under Article 21:5.92 (c)  Implicit Settlements During the Implementation Phase Once again, it seems paradoxical to speak about amicable solutions inasmuch as a WTO Member has been condemned and the party that has lost the case is bound to implement immediately, unless there is a request for a reasonable period of time. Among 102 condemnations resulting from decisions by the DSB, 14 were not subject to a request for a reasonable period of time. This implies that the defendant, tacitly supported by the complainant(s), considers having already implemented the required action. In other words, there  Malaysia – Prohibition of Imports of Polyethylene and Polypropylene, WT/DS1, EC – Duties on Imports of Grains, WT/DS13, US – Measures Affecting Imports of Women’s and Girls’ Wool Coats, WT/DS32, US – Tariff Increases on Products from the European Communities, WT/DS39, US – Anti-Dumping Duties on Imports of Colour Television Receivers from Korea, WT/DS89, Australia – Subsidies Provided to Producers and Exporters of Automotive Leather, WT/DS106, Argentina – Safeguard Measures on Imports of Footwear, WT/DS123, Colombia – Safeguard Measure of Imports of Plain Polyester Filaments from Thailand, WT/ DS181, Philippines – Measures Affecting Trade and Investment in the Motor Vehicle Sector, WT/DS195, Peru – Taxes on Cigarettes, WT/DS227, Romania – Import Prohibition on Wheat and Wheat Flour, WT/DS240, Peru – Tax Treatment on Certain Imported Products, WT/DS255, US – Determination of the International Trade Commission in Hard Red Spring Wheat from Canada, WT/DS310. 91  US – The Cuban Liberty and Democratic Solidarity Act, WT/DS38, Argentina – Measures Affecting Textiles, Clothing and Footwear, WT/DS77, US – Measure Affecting Government Procurement, WT/DS88, US – Measure Affecting Government Procurement, WT/DS95, EC and Certain Member States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint), WT/DS347, Chile – Provisional Safeguard Measure on Certain Milk Products, WT/ DS351, India – Measures Affecting the Importation and Sale of Wines and Spirits from the European Communities, WT/DS352, Brazil – Anti-dumping Measures on Imports of Certain Resins from Argentina, WT/DS355 and Chile – Definitive Safeguard Measures on Certain Milk Products, WT/DS356. 92  US – Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/ DS282, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea WT/DS336. 90

114   Hélène Ruiz Fabri is a more or less implicit agreement of the parties to consider that the case is settled. After the reasonable period of time for implementation has been worked out, most of the time by means of an agreement between the parties as stated by Article 21:3 (b) DSU, 88 cases remain for which the issue of implementation was raised. And yet Article 21:5 DSU states that “[w]here there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel”. If there is no recourse under Article 21:5 DSU, one can infer that there is an agreement as regards implementation. This agreement is either that the defendant has not carried out the required implemented, and in this instance the complainant is entitled to request directly the authorisation to adopt counter-measures, as did the US and Canada in the Hormones Case93 or as regards most of the complainants in the Byrd Amendment Case,94 or alternatively, that the implementation has been performed. Although frequent, inasmuch as it has happened 61 times, the latter occurrence is seldom concretised in a formal agreement. Most of the time, the Member in charge of implementing declares to the DSB at the time of its last status report according to Article 21:6 DSU that the implementation has been performed. The complainant sometimes acknowledges – and the DSB decides to withdraw the issue from its agenda – or sometimes makes some reservations, but as long as proceedings under Article 21:5 are not initiated, one can consider that there exists a tacit agreement according to which the defendant has made the requisite implementation. As for the consultations, there is no time limit acting as a prescription and nothing could theoretically prevent a complainant from requesting a panel under Article 21:5 for a case in which the reasonable period of time has expired by a long duration. At the end of day, only fifteen cases are left for which there has been a disagreement on implementation in proceedings under Article 21:5 DSU. And there again, as seen above, a mutually agreed solution can emerge be it at the consultations stage,95 or at the panel stage.96 Implicit settlements also happen during the final stage of counter-­measures, something which can be inferred from the suspension of an arbitration under Article 22:6 DSU, as in the US – Sunset Reviews of Anti-Dumping Measures

 WT/DS26/48.  US – Continued Dumping and Subsidy Offset Act of 2000, WT/DS217. 95  US – Final Anti-dumping Measures on Stainless Steel from Mexico, WT/DS344. 96  Articles 12:7 or 12:12 DSU. 93 94

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on Oil Country Tubular Goods from Argentina Case,97 or from the rather small number of counter-measures effectively implemented compared to those which have been requested, not to say authorized. It remains true that the counter-measures also aim at reaching an amicable solution as stated by Article 22:8 DSU, according to which “[t]he suspension of concessions or other obligations shall be temporary and shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the nullification or impairment of benefits, or a mutually satisfactory solution is reached”. Last, as this paper has been introduced by evoking the single amicable solution reached in the Banana Case, this section cannot be concluded without mentioning the US – Section 110(5) of US Copyright Act.98 The US acknowledged that they had not implemented when the reasonable period of time was over but rather than requesting an authorization for taking counter-measures, the EU agreed with the US to opt for an arbitration under Article 25 DSU, this “expeditious arbitration” being “an alternative means of dispute settlement can facilitate the solution of certain disputes that concern issues that are clearly defined by both parties”. The parties having chosen to compose the arbitral tribunal with the members of the initial panel, the recourse to arbitration made sense mainly as it was aimed at escaping the ordinary implementation phase, on the understanding that the parties had agreed that “[t]he legal principles developed in former arbitration proceedings under Article 22 of the DSU, such as the allocation of the burden of proof between the parties, shall apply to this arbitration”.99 But the EU having been “disappointed with the Arbitrators’ reasoning”,100 when it turned out that the US had not implemented the award in the alloted period of time, it decided to come back to the ordinary procedure by requesting the authorisation to adopt counter-measures. An arbitration under Article 22:6 was then initiated, before being suspended when the parties reached a “temporary resolution of the dispute”, which was notified to the DSB on 23 June 2003 and according to which the US committed themselves to give a compensation until a final resolution. Although this temporary resolution of the dispute was supposed to cover only the period through to 20 December 2004,  WT/DS268/27.  US – Section 110(5) of US Copyright Act, WT/DS160.   99  US – Section 110(5) of US Copyright Act – Recourse to Article 25 of the DSU, WT/DS160/15, 3 August 2001. See the Arbitral Award at WT/DS160/ARB25/1, 9 November 2001. 100  According to its own terms, during the debate in the DSB. See DSB, Minutes of Meeting Held in the Centre William Rappard on 21 November 2001, WT/DSB/M/113, 17 December 2001, §§ 31–32.   97   98

116   Hélène Ruiz Fabri in 2011 the US still go on providing the DSB with the monthly status report requested for non-compliant cases. Nevertheless, the case could be seen as illustrating the common knowledge that a bad agreement is to be preferred to good proceedings. But this mere statement raises another problem, which is to know whether some parties could by means of a mutually agreed solution act contrary to the res judicata of the DSB, not to mention the requirements of the covered agreements. D.  The Consistency of Mutually Acceptable Solutions with WTO Law Mutually acceptable solutions are supposed to be consistent with the covered agreements. This means that WTO law is in no way considered auxiliary and cannot be set aside or waived due to the common will of parties to a dispute. But it is for us to assess how this obligation is respected, which calls for two primary remarks. First, one should think that inasmuch as the claimant could benefit from a judicial decision and as the implementation of this decision leans on the multilateral and institutionalised control of implementation provided by the DSU, this claimant has no interest in accepting an inferior solution compared to full implementation. Second, it could be argued that there is nevertheless control exercised by the DSB, which prevents the parties from doing whatever they want. This is the basic meaning of the obligation to notify the mutually acceptable solutions, for the sake of transparency and control. But these two obvious facts harbor some important nuances. In fact, it should be taken into account that most of the mutually agreed solutions are formally notified only after full implementation, and as such any purported control by the DSB loses a great part of its meaning. Moreover, the control by the DSB is relaxed inasmuch as, although it could be based on legal arguments in relation to consistency with WTO law, it does not lead to any kind of formal decision except the withdrawal of the case from the agenda of a debate during which other WTO members can express their possible concerns in relation to a mutually agreed solution. This of course should not be underestimated notably because it could give rise to new claims introduced by other interested members. Nevertheless, it can be one of the reasons why, as seen above, most of the mutually acceptable solutions are not notified. Moreover, consistency with the covered agreements is in the interests of the WTO system and if one can presuppose that a solution satisfying this requirement may by its very nature or logically satisfy the interests of the complainant(s) as well, the hypothesis that the latter could also be satisfied with a solution which is either inconsistent with or inferior to that which a third-party decision would guarantee also has to be considered. It remains to

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identify the circumstances or reasons that could lead a complainant to accept such a solution and to reflect on the feasibility of such a situation. Among the identifiable reasons, there is notably the time factor. What matters is the prospective nature of the dispute settlement mechanism in the sense that there cannot be any damages to compensate for the harm suffered due to the measure at stake. The longer the case lasts, the more costly it is and the more significant the prejudice is. And yet, despite the tight timeframe provided by the DSU, there is a trend toward a lengthening of the proceedings, especially at the panel stage. Later, everything depends on the tenacity of the defendant to resist implementation and on its ability to resist. There, the respective power of the parties together with the respective economic as well as political importance of the resolution of the case for them have to be taken into account. Admittedly, while looking forward to a final resolution, there are the means provided by Article 22 DSU, namely the negotiation of compensation or the request of an authorization for taking counter-measures. But, on the one hand, experience shows that the compensation mechanism does not function properly, notably because it is too costly for the defendant who has to propose compensation on a non-discriminatory basis, which means that it should benefit non only the complainant(s) but also any other affected WTO member. It is therefore plausible that it is more costly than being subject to counter-measures. It is all the more true that, on the other hand, counter-measures not only exceed the level of prejudice caused by nonimplementation, but their affliction depends on the ability or the capacity of the complainant(s) to implement them. However the facts suggest that counter-measures, although authorized are seldom implemented, including when the complainant is perfectly able to do so. This means that they act more as a lever for negotiations than as an instrument for sanctioning. Thus the more likely outcome is the negotiation of a compensatory solution that avoids the inconveniences and disadvantages of compensation in the sense of Article 22:1 DSU, namely engaging MFN treatment, and keeping the solution on a bilateral plain. Its advantage compared to counter-measures is its positive nature since it consists of opening markets, in contrast to counter-measures that rather lead to new barriers to trade. Thus the practise engenders an option that was excluded by the DSU as a matter of principle and which probably for this reason translates most of the time in implicit solutions. As seen above, this situation allows the complainant to keep a Sword of Damocles above the head of the defendant, consisting of the threat of a relaunching of the case – or the introduction of a new claim when the mutually acceptable solution has emerged before the end of the panel proceedings – if the commitment is not respected. From a

118   Hélène Ruiz Fabri ­ ragmatic point of view, it is plausible that even diverging at its core from p what the DSU allows for, mutually acceptable solutions do not deviate too much from what the complainant(s) could have obtained and what consistency with the covered agreements requires, unless there is a possibility that that another interested WTO member could introduce a claim. These remarks apply mutatis mutandis to all stages of a case where an amicable solution can be found, the initial claim having drawn the attention of the membership on the issue at stake.

Chapter Eight Investment Disputes – Moving Beyond Arbitration Michael E. Schneider The network of International Investment Treaties (IIT) which has developed during recent decades has created an unprecedented degree of legal security in the relations between foreign investors and their host States. But the legal system on which it is based remains rudimentary and the available remedy is almost exclusively rights-based arbitration and claims for financial compensation. As practiced today the system lacks the flexibility that is necessary for supporting complex long-term relations and their evolution in a changing economic, political, technological environment. Such flexibility is needed as part of the substantive legal rules governing the relationship between the foreign investor and the host State and in the methods by which these rules are given effect in cases of conflict. The present chapter considers approaches for resolving investment disputes which are responsive to the need for flexibility and the constraints which these approaches face; the equally important subject of developing the substantive rules and principles by which rights and obligations of the investor are reconciled with the evolving interests and objectives of the host society must be left for another study. While arbitration – producing as it does a rights-based binding ­solution – is a necessary basis for investment disputes, it appears desirable and indeed necessary to develop the system beyond arbitration. To this effect other mechanisms should be made available which provide greater flexibility in reconciling the conflicting objectives and interests. Alternative methods of dispute resolution (ADR), as they have been developed in commercial relations, may serve as a useful reference; but they must be adapted and developed to meet the specificity of the disputes as they arise in the relations between foreign investors and their host States.

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I.  The Context It is an essential prerequisite for the success of modern economies that individuals, acting alone or in groups, commit their own resources or those over which they have control to economic ventures. They do so in the context of organised societies, mainly States, which regulate the relationship between the economic activities, including the resources committed to investments, and the host societies in which such investments are made. Economists, such as Hernando de Soto in his seminal work on the “Mystery of Capitalism”, have emphasised the extent to which the reliability of these regulations, starting with the guarantee of property rights and their derivatives, are an essential feature for investments and economic development in our economies. But this legal stability is only one of the factors of the development equation. The success of an investment and the development of the society in which it is made are determined by many factors; these factors are subject to more or less frequent change. The relationship between investors and the host society, therefore, is fragile; at any time disruptions may occur. Societies and their legal systems have developed formal and informal mechanisms for managing the effect of such disruptions and for restoring productive relations after they have occurred; generally they succeed in one way or another. When the investment is made by players coming from outside the host society an additional dimension is introduced. This additional dimension may aggravate the disruptions and may cause complications in the attempts to restore productive relations. Traditionally, such attempts were placed in what is described as diplomatic protection, even if historically the protection was not always limited to very diplomatic means. In the second half of the last century a new feature was added by the progressive development of a world-wide network of treaties intended to provide some stability in the relationship between the foreign investor and the host States. They do so by providing some substantive rules concerning the treatment of foreign investors and by offering to the foreign investor recourse to international arbitration. The creation of this network of investor-State arbitration is a very important step in the development of international relations in a global economy. However, with the success of this new feature in the system, criticism arose. The criticism has different origins and causes and it is directed against different aspects of the process. Some critics attack the very principle that a foreign investor may bring a dispute with the host State before a body other than the State’s own courts; others find fault with the decisions rendered by the arbitral tribunals to which the disputes are submitted; and a third category of criticism concerns the procedures by which the dispute is resolved, in particular the time and money required for conducting such investment arbitrations.

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If one considers the system of investment arbitration in the more general context of the diversity of factors and interests which have a bearing on the relationship between a foreign investor and the host society, one can see the limitations of this system: it reduces this diversity to a small number of considerations which consist mainly in terms of the investor’s loss and compensation for it. Arbitration, as it is now practiced in investor-State disputes, “is focused entirely on the payment of compensation and not on maintaining a working relationship between the parties”.1 Moreover, investment arbitration deals with the complex issues that arise in investment disputes in the narrow framework of a legal system which is rudimentary and which develops in a haphazard manner. From this perspective, alternatives to arbitration as a form of dispute settlement have an importance and a dimension which would seem to be much greater than the methods of alternative dispute resolution in commercial relations. The need for them arises not just from a desire to avoid or reduce the increasing expenditures in time, money and other resources absorbed in investment arbitration proceedings. They would seem to be a necessary enlargement from the present investor-State arbitration regime. Such enlargement of the system therefore appears as an important feature for creating, on an international level, the means for reconciling the diverging interest between those who commit resources to risky investments and those who, in one way or another, are affected by these investments. The present chapter explores the mechanisms used in practice: the potential they may offer and the constraints they face. It first provides a brief overview of some ADR methods used in commercial disputes and of some of those which can be found in inter-State disputes. Investment disputes will be shown as a specific category, their specific features will be described and some examples and past experiences of ADR in these disputes will be presented. This will be followed by an assessment of the scope for change in this area and by considering possible approaches. Finally the initiative taken by the International Bar Association (IBA) in preparing Investor-State Mediation Rules will be examined.

II.  ADR in Commercial Disputes Alternative methods of dispute resolution are understood here as all those which lead to a solution adopted voluntarily by the parties to the dispute and not imposed by an arbitrator, a judge or some other authority.  UNCTAD, Investor-State Disputes: Prevention and Alternatives to Arbitration (UNCTAD Series, 2010), at xxiii and 19; decisions such as those in Goetz v. Burundi, discussed below in Section VI.C, are rare exceptions.

1

122   Michael E. Schneider The first and simplest alternative, self-evidently, is the attempt by the parties themselves at reaching a resolution of their dispute without the help of others. Much has been said about such attempts and the methods to be used for them to succeed. They remain probably the most frequent form in which disputes are resolved. However, they are normally not included in the discussion about ADR methods which are concerned essentially with the intervention of a third person, assisting the parties in one form or another in their search for the settlement of the dispute. These third persons, depending on the method adopted or on other criteria, are described as a facilitator, mediator, conciliator, neutral or, in the case of some specialised methods, an adjudicator, dispute board, or expert, to name but a few. Sometimes the term “neutral” is used to describe several or all of these third persons that seek to assist the parties in their search for the settlement.2 The role which the neutral assumes in ADR methods may vary considerably. On the one end of the spectrum one finds forms of assisted negotiation, where the parties have the lead and the neutral seeks primarily to assist them in addressing the dispute in the most efficient manner and in calming the emotions. At the other end of the spectrum one finds such forms as adjudication, dispute boards or the preliminary decision of the engineer in construction projects, where the neutral presents a solution which the parties agreed to apply at least provisionally until the completion of the works. If by that time one of the parties remains dissatisfied with the preliminary decision, it may commence arbitration proceedings in which the provisional decision may be “opened up” and the dispute is considered afresh, possibly with a different outcome. Reports on this system indicate that it is quite rare that the decision of the adjudicator or the dispute board is questioned and arbitration or court proceedings are commenced. The principal form that comes to mind in the discussion about ADR concerns methods in which the neutral plays an active role in the attempts of bringing the parties to a settlement without imposing it – not even provisionally. The process normally is described as conciliation or mediation. In this respect, too, different methods are applied. One criterion for distinguishing different methods appears of some importance: it concerns the opinion of the neutral. Some neutrals limit their 2

 The International Chamber of Commerce (ICC) ADR Rules, Preamble, provides: “Amicable settlement is a desirable solution for business disputes and differences. It can occur before or during the litigation or arbitration of a dispute and can often be facilitated through the aid of a third party (the “Neutral”) acting in accordance with simple rules. The parties can agree to submit to such rules in their underlying contract or at any other time.” See also, for example, Article 3 of the Rules dealing with selection of the Neutral. (Emphasis added.)

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role to assisting the parties to understand their opponent’s position and to bringing the opposing positions closer together until settlement is reached. Others express their own opinion, during the process or at its end. The latter approach has the advantage that the view of a neutral person may bring some sense of reality into the discussion between the parties. However, it also transforms the nature of this discussion. When the parties understand that the sole target of their argument in the negotiations is the persuasion of the opponent, they are likely to conduct the discussion differently than they would do if the neutral is a reference person who at some stage of the process expresses an opinion. In this latter situation, each of the parties is likely to target also the neutral in its argument in the hope of enlisting the neutral’s support and using it in the argument against the opponent. There have been attempts to express this distinction in the terminology, calling one method conciliation and the other mediation. However, these attempts have produced different and contradictory results.3 For the purpose of the present contribution the two terms will be used interchangeably. Finally, mention should be made of the combination of conciliation or mediation with arbitration. In some dispute resolution systems, attempts at conciliation are prescribed before a party may commence judicial proceedings; however, the two phases of the proceedings are conducted in stages and before different persons. In a more advanced form the two forms of dispute settlement are combined before the same person. Such combination is used in the court proceedings of some countries and is considered anathema in others. The combination is for instance well-known in the judicial system of Germany where the code of civil procedure expressly requires the judge to seek, at all stages of the court proceedings, to reconcile the parties.4 Judges there regularly interact with the parties in attempts to settle the case; often they succeed. Similar provisions and practices can be found in Switzerland.5 A similar approach is practiced in China and some other countries of the Far East. This practice of introducing conciliation as part of a contentious procedure has found application in domestic and international arbitration. Some arbitration acts expressly provide for it; so do some arbitration rules and

 Michael E. Schneider, “Combining Arbitration and Conciliation – Report at the Seoul Conference of the International Council for Commercial Arbitration”, (1996) ICCA Congress Series, No. 8, at 57–99. 4  The German Code of Civil Procedure (ZPO), Article 278 (1), provides: “Das Gericht soll in jeder Lage des Verfahrens auf eine gütliche Beilegung des Rechtsstreits oder einzelner Streitpunkte bedacht sein.” 5  They were reflected in the provisions of many of the 26 cantonal codes of civil procedure and can now be found in Article 124(3) of the new Federal Code of Civil Procedure. 3

124   Michael E. Schneider special guidelines.6 The practice, sometimes also referred to as Arb/Med is applied successfully by some arbitrators but remains controversial.7 It must be pointed out, however, that the type of conciliation or mediation which an arbitrator practices in the case of an Arb/Med procedure is not identical and often more limited in scope than a full-fledged mediation; it is normally limited to an anticipation of the outcome of the arbitration; opening the dispute to considerations and interests outside the scope of the arbitration is not normally considered as part of the role of an arbitrator who acts as ­mediator.

III.  ADR in International Relations between States In public international law the term ADR is not generally used. When a specialist in public international law considers alternatives, what comes to mind is most likely that between war and peaceful settlement of disputes. International practice has developed a variety of approaches to promote such peaceful settlement. Legal doctrine grouped them into diplomatic methods on the one hand and legal or judicial methods on the other. The latter include, in particular, proceedings before what is now the International Court of Justice, arbitration and a growing number of specialised international ­tribunals. Diplomatic methods of dispute settlement can be seen as corresponding to ADR in commercial disputes. They include negotiations, good offices and mediation, conciliation, fact-finding and inquiries. These traditional methods have been complemented by a variety of multilateral mechanisms. The United Nations, in particular through the Security Council, the General Assembly and the Secretary General play an important role in the prevention and settlement of international disputes; similar functions have been developed in the context of various regional or specialised organisations which provide for various forms of diplomatic dispute settlement as well as judicial or arbitral institutions.  For example, the Hong Kong Arbitration Ordinance (Cap. 609), Section 32, provides for it; International Arbitration Act of Singapore, Article 17(1); and CEDR Rules for the Facilitation of Settlement in International Arbitration. 7  See Michael E. Schneider, “Combining Arbitration and Conciliation”; Christian BuhringUhle, Arbitration and Mediation in International Business (Kluwer Law, second edition, 1996); Jack J. Coe, “Towards a Complementary Use of Conciliation in Investor-State Disputes – A Preliminary Sketch” 12 (2005) University of California, Davis Journal of International Law & Policy 7; Gabrielle Kaufmann-Kohler, “When Arbitrators Facilitate Settlement: Towards a Transnational Standard” 25 (2009) Arbitration International 187; CEDR Commission on Settlement in International Arbitration, Final Report, November 2009. 6

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The study of these various institutions and methods of diplomatic dispute settlement might provide useful inspiration and assistance when it comes to resolving investment disputes, in particular insofar as international implications of domestic conflicts are concerned. However, the reference must be considered with caution. The traditional method for dealing with investment disputes through diplomatic protection has given rise to resentment by host States. The avoidance of the causes for this resentment was precisely one of the principal objectives for the development of modern methods for the settlement of investment disputes through ICSID and bilateral investment protection treaties; but, as mentioned above, this development has created new resentment against the power of international arbitral tribunals in matters concerning the host state. As will be seen later in this chapter, the intervention of a third party may be useful or even necessary to increase the willingness of the host State and the various groups involved in the dispute and also that of the investor to seek a settlement which may save the investment project and avoid spending much time and money on arbitration or judicial proceedings. When looking to the practice between States for creative new solutions in the field of investment disputes, multilateral approaches might offer a promising reference, in particular where they make allowance for a diversity of players and interests. At this stage, three examples of diplomatic means of dispute settlement may be mentioned. The first concerns an international mediation which produced a mechanism for the resolution of a large number of claims of foreign investors against their host State. Following the Tehran hostage crisis, Algeria mediated the dispute between Iran and the United States, leading to the 1981 Algiers Declaration.8 As part of this settlement the Iran-US Claims Tribunal was created with the power for the adjudication of claims by both States and their nationals and the financial means for implementing the Tribunal’s decisions were provided. Another type of settlement mechanism provides for compensation of the victims of international conflicts. Such mechanisms have been created in favour of workers deported during World War II, to distribute funds held on dormant accounts, or for restoring property rights of people expelled from their homes. A particularly remarkable institution in this respect was the United Nations Compensation Commission (UNCC) which adjudicated several million claims against Iraq following its invasion and occupation of Kuwait and Security Council Resolutions declaring Iraq’s liability in 8

 Algiers Accords, ILM 20 (1981), at 224 et seq.

126   Michael E. Schneider ­ rinciple.9 While the disregard of Iraq’s rights as the defendant State in these p proceedings disqualifies the system as such for future dispute resolution, it nevertheless contained features which deserve further attention and may be promising for future development, especially in the context of the treatment of claims for environmental damages and the manner in which technical, commercial and legal issues were examined in a combined procedure. A very different example concerns international and domestic efforts to settle the civil conflicts in Tajikistan. In a recent article,10 Michael Forbes Smith describes the many years of efforts to reconcile conflicting factions in and around that country, bringing an end to the civil war after the State had become independent with the end of the Soviet Union. Forbes Smith seeks to compare the UN-moderated peace process with classic mediation theory, as applied to the resolution of civil and commercial disputes and to international political and military disputes. These examples show the diversity of methods and institutions used for resolving international disputes. This diversity includes the possibility of resolving different aspects of a complex dispute by different methods and institutions, grouping claims of many different parties if they are related to the same or similar legal bases and by adopting simplified procedures for certain aspects of a dispute. The last example illustrates the complexity of a mediation taking into account a variety of different players and developments as impacting on the evolution of political disputes. Even though investment disputes are not of a dimension as the civil war in Tajikistan, the diversity in the players and their interests, underlying antagonisms and disrupting developments can create obstacles of equal difficulty in the search for the resolution of investment disputes. They may require similar measures of creativity, patience and determination.

IV.  Investment Disputes as a Distinct Category In order to understand the role of ADR in investment disputes, the potential and the scope of improvements in the process, it is important to understand the specificity of investment disputes. While such disputes share many  Security Council Resolution 687 (1991), for this and other relevant texts see Boutros Boutros-Ghali, The UN and the Iraq-Kuwait Conflict (1990–1996), Document No 39, 203, 205 (United Nations, 1996); and the UNCC website. Available at http://www.uncc.ch/­ resoluti.htm (last accessed 25 March 2012). A publication on the work of the UNCC with a contribution by the present author is in preparation at Oxford University Press. 10  Michael Forbes Smith, “Similarities and Differences Between Commercial Mediation and Political Mediation: The Tajikistan Civil War Example” 78(1) (2012) Arbitration – Chartered Institute of Arbitrators 2 et seq.  9

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c­ haracteristics with commercial and other disputes, there are some characteristics that are specific to investment disputes or that are more prominent there. When discussing these specificities one should consider separately those on the side of the host State and those on the side of the investor. Moreover, there are differences between disputes that arise out of an investment agreement between the host State and a foreign investor and those that are specific to disputes subject to an investment protection treaty or similar international instrument. First of all it must be pointed out that international11 investment disputes have an ambiguous status which distinguishes them both from inter-State disputes and from purely commercial disputes, domestic or international: they concern a legal and factual situation centred in the host country and which in many respects is linked with its legal system. The term “investment”,12 despite the differences in its definition that need not be considered here, implies some form of engagement of resources by a foreign entity (a natural person or, in most cases, a corporation or other legal entity) in the host country. At the same time, investment disputes as they are considered here, contain elements of “internationalisation”, in particular by providing for the jurisdiction of a non-national authority, invariably international arbitration, normally at a seat abroad, and often also the application of a law other than that of the host State. Traditionally, the legal arrangements that provided for the internationalisation of this type of investment were of a contractual nature and often were described as “State Contracts”. The legal nature of these contracts and of the disputes arising under them has been the subject of intense academic debate,13 but has also occupied international fora including the United Nations and its specialised agencies.14 While agreements between States and foreign investors continue to be concluded and to give rise to investment disputes, the vast network of  The emphasis here is on “international” investment disputes so as to distinguish them from those disputes which are purely domestic because, irrespective of the nationality of the parties, they are subject only to the jurisdiction of the courts in the host country. 12  The term “investment” is critical to the jurisdiction of some institutions, in particular ICSID, and its definition has given rise to extensive legal writing. Here the term is taken as self-understood and the refinements in this discussion will be left aside. 13  See in particular the early seminal study by Karl-Heinz Böckstiegel, Der Staat als Vertragspartner ausländischer Privatunternehmen (Athenäum Verlag, 1971); this has been followed by a host of other books and studies. 14  E.g. General Assembly Resolution 1803 (XVII), U.N. Doc. A/5217 (14 December 1962) and a number of other texts, including those relating to Permanent Sovereignty over Natural Resources. 11

128   Michael E. Schneider investment protection treaties and similar instruments has created a new dimension for the relations between investors and host States. Despite their diversity, these international instruments form a legal framework for a large part of international investments; a framework for investments not only in developing countries but, as some recent cases have shown, also in the most advanced industrialised countries; and this framework provides both substantive legal rules concerning the treatment of foreign investors and the basis for enforcing them in arbitration. As part of this development, investment disputes have emerged as a new category in international arbitration. This new category increasingly can be distinguished from commercial arbitration not only by reference to the parties involved but also by the institutions involved, the professionals acting as counsel and arbitrator and by procedural practices. This distinction, as shall be shown presently, is justified by the specific features and challenges of investment disputes. More attention must be given to the question whether arbitration as it is now practiced is the most suitable method of dispute resolution to respond to these challenges and the improvements that can be made by alternative methods.

V.  Some Specific Features and Challenges of Investment Disputes Investment disputes, and in particular those arising in the context of a treaty, differ from commercial disputes in a number of ways. The challenges which they raise are reflected in arbitration proceedings; they create particular hurdles for other forms of dispute resolution and require that special attention be given to the adaptation and development of such other forms. The differences considered here concern first of all the nature of the dispute, in particular its subject matter. The differences also concern the nature and role of the parties to the dispute. The State and the investor differ in the role they play at the origin of the dispute and in its evolution; and they differ in what they have to offer in attempts to settle and with respect to the constraints under which they find themselves when considering an ADR procedure and the possibility of a settlement. A.  The Subject Matter of the Dispute Traditional investment disputes arise primarily from a contract regulating the investment and an alleged breach of this contract. Such breaches may relate to contributions that the host government committed to make to the investment project. In many cases, however, they concern commitments relating to governmental action itself. Such action may concern a concession for

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mining rights or for providing certain goods or services to the public, such as­ operating public transportation, utility supplies, telecommunications, news services or, as in the case of the monopolies granted to Ivar Kreuger, even matchsticks. In this context, the commitments of the government often extended to areas of its legislative action, in particular in the field of taxation or other regulations affecting the investment. Treaty based investor-State disputes also concern primarily governmental action. But since the breach invoked by the investor need not be based on the violation of an investment agreement with the claiming investor, the scope of such governmental action is much wider in treaty-based disputes. The case of the investor may relate to legislative or regulatory acts and their implementation, to acts of the administration or to action, including ­inaction, of the judicial system. The acts to which the dispute relates are not infrequently the consequence of a political process that may involve a diversity of political actors. This is obvious when legislative acts are concerned; but the action of the administration, and even of the judicial system, form part of the political system of the host State and are subject to political influence. In such circumstances, the dispute with the investor may involve interests and considerations quite unrelated to the investment itself and not infrequently a diversity of players, often with differing agendas. With respect to the investor and the investment itself, diverging interests and agendas also may play an important role in the generation of the dispute and its ­aggravation. Depending on the size and relative importance of the investment, the subject matter of the dispute, the measures affecting the investor or the lack of its protection, may be the subject of great public attention and any action taken by the government may cause heated debate in the public arena. It is readily apparent that these characteristics of the dispute also have an impact when a settlement of the dispute is sought. Dispute settlement procedures must take them into account if the settlement efforts are expected to have any success. B.  The State as a Party in Investment Disputes Probably more than most commercial transactions, investment operations often involve a large number of interrelationships and, on the side of the State, often a number of different entities. Depending on the organisation of the host State, the entities exercising public responsibility may well be subject to differing political control. Thus, an investment in an industrial plant may involve regulations at the level of the local community in which it is located as well as those of larger units and the central government. It also

130   Michael E. Schneider may depend on the supplies of utilities and services by public or regulated entities and it may rely on access to the local market. From a legal point of view at the international level, in matters of responsibility under an investment treaty, the State appears as a single entity. In reality, however, a variety of different entities may be involved. Whether they are independent of each other and have different legal personality in the domestic legal system or are merely departments of the government, they may have different objectives and priorities and may act in different manners; and they may differ about what an acceptable result would be.15 Clarifying the positions of all possible stakeholders and aligning all players to taking a coherent position can be a difficult task. Reaching such a joint position is all the more difficult if it requires the modification of previously defended positions, making concessions to the opponent in the dispute. Moreover, the individuals who have to develop positions in these different entities and who have to implement them are normally civil servants or politicians. They are responsible in varying degrees to the government, to their party or to the public at large. The forms that this responsibility takes may differ widely, depending on such aspects as the function of the person, the organisation of the State and the manner in which accountability is developed in the organisation. This type of responsibility is not easy to face; and it often leads to protective reactions. Courage to take unpopular decisions is not necessarily the dominant characteristic of civil servants or politicians. Avoiding risks or transferring them to other players often is a necessity for success in their careers or even their survival. The difficulty is aggravated by various checks and controls exercised over public servants. Auditing the decisions of public services and their justification is a necessary feature of public administration. So are anti-corruption measures. They imply that civil servants must justify their decisions before persons and institutions that view the circumstances in which a concession has been made from a rather different perspective. In particular, when the administration has publicly built up an apparently strong position towards the investor, it may not always be easy to explain to auditors and inspectors that abandoning this position and agreeing to a settlement was in the public interest and not the result of negligence or even made at the price of some personal benefit to the decision makers involved.16  See, for example, Edna Sussman, “The Advantages of Mediation and the Special Challenges to its Utilization in Investor State Disputes”, 27 (2000) Revista Brasileira de Arbitragem 64. 16  For comments on this aspect see Barton Legum, “The Difficulties of Conciliation in Investment Treaty Cases, Comments on Jack C. Coe” 21 (April 2006) Mealey’s 1, who cites as an example the number of agencies which in the United States are involved in decisionmaking in investment disputes; see also Margarete Stevens and Ben Love, Investor-State 15

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Concessions that normally are required for a settlement are generally even more difficult when stakeholders or otherwise interested groups outside the government are involved in the debate; they may be political parties in the opposition, groupings from the civil society in the country or even foreign players, public or private. Some of the players in the public debate may have an interest in keeping the dispute alive or may find it to their advantage to exploit the fact that concessions were made for achieving a settlement. It is therefore not surprising that observers have highlighted the difficulties “for government officials to engage in a process that may result in a recommended settlement that falls obviously short of the rhetorical positions that they have expounded in parliament and in public”.17 Or, as explained by Michael Reisman: . . . in States in which there are active political oppositions waiting for an opportunity to pounce on the incumbents for having ‘betrayed’ the national patrimony by settling with an investor, modalities other than transparent third-party decisions can undermine or even bring down governments and destroy personal careers. . . . [I]t is often easier for governments to have the right decision imposed by an outside tribunal rather than ‘conceded’ by the government.18

C.  The Position of the Investor For commercial parties, a dispute is generally a disturbance to their ordinary activities. Not only is it a wasteful exercise in terms of legal costs but also, and often more importantly, a dispute absorbs valuable resources and management time that could otherwise be spent on more productive activities. In addition, the dispute with a business partner may render useful cooperation and transactions more difficult if not impossible. These are some of the considerations which explain the favour that ADR methods generally enjoy with commercial enterprises. However, there are differences between investors; some are more inclined to finding a settlement than others. Differences may lie in the nature of the investor’s business and in the role that the specific investment has in its overall strategy. For some investors the individual project is part of a larger Mediation: Observations on the Role of Institutions, Contemporary Issues in International Arbitration and Mediation – The Fordham Papers 2009 (forthcoming), at 15. 17  Stephen Schwebel, “Is Mediation of Foreign Investment Disputes Plausible?”, 22(2) (2007) ICSID Review 241. 18  Michael Reisman, “International Investment Arbitration and ADR: Married but Best Living Apart” in UNCTAD, Investor-State Disputes: Prevention and Alternatives to Arbitration II (2011), Proceedings of the Washington and Lee University and UNCTAD Joint Symposium on International Investment and Alternative Dispute Resolution, held on 29 March 2010 in Lexington, Virginia, USA (New York and Geneva: United Nations, UNCTAD/ WEB/DIAE/IA/2010/8) 22, at 26. Republished in 24(1) (2009) ICSID Review 185.

132   Michael E. Schneider strategy; in the interest of that strategy or in the interest of good relations with the government in question, a settlement may be more attractive than the payment of damages at the end of several years of court or arbitration proceedings. In this context it is, of course of some relevance whether the disputed project or the relations with the government in general still have a promising future for the investor. There are, however, considerations that, on the side of the investor, too, play against settlement: bureaucracy is not limited to governments; some of the large enterprises exhibit similarities with public administration. In some cases, the investor may have no other remaining interest in the investment but to recover as much compensation as possible. There are also cases where one must have serious doubts about the validity and soundness of the investment itself and where, through the compensation sought, the investor would reap an unmerited profit. When considering the possibilities of settlement, one must bear in mind that formal dispute resolution proceedings in arbitration or in the courts may have objectives beyond the specific dispute that they concern. Such proceedings may be pursued by the investor for other reasons, for instance with the objective of obtaining concessions in other areas. Finally, mention must also be made of the involvement of third parties on the investor’s side. Such third parties may be insurance companies that have provided coverage of the investment and which, as part of the policy, require that the claim for compensation be pursued. Where the insurer is a public service in the investor’s home country, the dispute may, at some stage, move to the intergovernmental level. In the case of private insurances, the dispute may have to be fought out by the investor. Similar situations may arise in the case of third party funding or when claims are assigned to what are occasionally described as “vulture funds”. These and other factors play a role on the side of the investor when it comes to determining the disposition towards a settlement and designing procedures intended to bring it about. Some may favour such disposition while others may create obstacles. In other words, the obstacles to settlement and ADR procedures are situated not only on the side of the host State; depending on the circumstances, investors, too, may create such obstacles.

VI.  Past Experiences with ADR in Investment Disputes The more general considerations in the preceding section of this chapter can usefully be illustrated by a number of concrete examples from international investment disputes.

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A.  The ICSID Experience The difficulties of introducing ADR procedures in investment disputes find a striking confirmation by the experience of ICSID. Since its creation, ICSID offers not only arbitration services but also what it calls conciliation; a special set of rules has been prepared for this service. However, while ICSID arbitration – after having a slow start – is now widely used, conciliation under the ICSID Rules continues to have a shadow existence in comparison. Until 2011 there have been six conciliation procedures, compared to some 300 arbitration cases. And the record of these 6 conciliation cases is meagre: only one produced a report that recorded a settlement. Two cases settled even before a conciliation commission had been created. In the remaining three cases the conciliation commissions issued reports recording the failure of the parties to reach agreement.19 Very recently, three more conciliation cases were brought in 2011 and 2012; in the first and the third of these cases the Conciliation Committees have been constituted; apart from the names of the parties, the members of the Committee and some steps in the procedure, no details about the dispute and the procedure adopted have been published by ICSID.20 This quasi failure of the ICSID conciliation procedure contrasts with another observation: many ICSID cases, like many other disputes brought to arbitration, settle before an award is rendered. In the experience of ICSID, the rate of settlement after commencement of the arbitration is in the order of 40%. ICSID statistics for all cases up to the end of 2011 indicate that 39% of the disputes brought under the Convention and the Additional Facility Rules were “settled or proceedings otherwise discontinued”,21 i.e. including cases where the claimant simply gave up hope. Presumably this does not include those cases where the parties reached a settlement and submitted it  Nassib Ziade, “ICSID Conciliation”, News from ICSID, 13(2) (1996), 3; Ucheora Onwuamaegbu, “The Role of ADR in Investor-State Dispute Settlement: the ICSID Experience”, News from ICSID, 22(2) (2005), 12; Eloïse Obadia, “Antoine Goetz and others v. Republic of Burundi (ICSID Case No. ARB/95/3) – Introductory Note”, 15(2) (2000) ICSID Review, 454–456. 20  RSM Production Corporation v. Republic of Cameroon, registered as CONC/11/1 on 19 September 2011, Commission constituted on 17 February 2012; see also “Africa claims stop and start at ICSID”, Global Arbitration Review 6 March 2012. Since then the conciliation commission in this case has been constituted and commenced its work; two other conciliation cases were filed in 2012: Hess Equatorial Guinea, Inc. y Tullow Equatorial Guinea Limited v. Republic of Equatorial Guinea, CONC(AF)/12/1 and Republic of Equatorial Guinea v. CMS Energy Corporation and others, CONC(AF)/12/2; von Wobesser appointed as conciliator. 21  The ICSID Caseload Statistics, Issue 1, ICSID publication 2012, at 13. 19

134   Michael E. Schneider to the arbitral tribunal which embodied it in an award on agreed terms. An example for such an award will be discussed below; three other cases have been mentioned by Susan F. Franck.22 What explains this apparent contradiction – the reluctance of the parties to resort to conciliation and their willingness to settle once the arbitration has commenced? Why the need for commencing the expensive and time consuming process of arbitration if in the end it is not the arbitration award that resolves the dispute but a voluntary settlement? And if arbitration is necessary to commence the process, what can be done to improve the approach, leading to earlier settlement and with less waste of time and cost? B.  Difficulties to Settle or Even Negotiate Fairly The first factor, as explained above, relates to the difficulties faced by a public administration when it must take a decision which implies concessions to the investor. An example for these difficulties and their consequences has been provided in a recent ICSID award concerning the cases between the Republic of Georgia and Kardassopoulos and Fuchs. In its award, the arbitral tribunal described the manner in which the investment of Kardassopoulos and Fuchs, and in particular the compensation process following the expropriation of their investment, was handled. It concluded: . . . the spirit of settlement appears to have diminished over time as lengthy delays, refusals by various government officials to address the matter, and internal disputes over who carried responsibility for the matter combined to result in an overall obfuscation of the compensation process and disregard for the duty to provide compensation. (. . .) Over the course of a seven year period following the formal establishment of a compensation process, responsibility for Tramex’s claim was shuffled from one government ministry to another, without any progress. An overview of this process prepared . . . for President Shevardnadze in 2003 exposes the process for the farce that it had become.23

The claimants in this case then sought the assistance of Henri Kissinger, the former US Secretary of State, to intervene in their favour with President Shevardnadze. The arbitral tribunal noted that with that intervention “some relief appeared” on the horizon. But it then observed that . . . the tide turned again as a new government was elected and yet another State commission established to consider the matter of Tramex’s claims. This commission accomplished in one month what each previous commission had found

 Susan Franck, “Empirically Evaluating Claims about Investment Treaty Arbitration” 86 (2007) North Carolina Law Review 72. 23  Ron Fuchs v. The Republic of Georgia, ICSID Case No. ARB/07/15, Award, 3 March 2010, at §§ 443–448. 22

Investment Disputes – Moving Beyond Arbitration   135 itself incapable of accomplishing – the final disposition of the Tramex matter. This disposition was, however, wholly unacceptable.

In the end, the claimants were denied any compensation and had to resort to arbitration. The arbitral tribunal awarded to each investor US$15.1 million for their losses, plus US$30 million each in interest. In addition the Republic of Georgia was ordered to pay not less than US$7.9 million for the Claimants’ legal costs in the arbitration. Another recent case may serve to highlight the risks that may have to be faced by those who, on the side of the State, seek to find a solution. The case concerns a dispute that arose under the bilateral investment treaty between The Netherlands and Bolivia. On the basis of this treaty, Euro Telecom International (ETI) brought arbitration proceedings before ICSID. At the time of filing, Bolivia had notified its withdrawal from the Washington Convention; but this withdrawal became effective only shortly after the filing of the case by ETI. Bolivia objected to ICSID jurisdiction. An arbitral tribunal was nevertheless formed and proceeded with the case. In the circumstances one may well be of the opinion that the risk of Bolivia to lose its jurisdictional objection were high. The competent Bolivian Minister found a face-saving solution by agreeing to transform the ICSID arbitration into proceedings under the UNCITRAL Arbitration Rules before the same arbitrators. Shortly thereafter the Minister was removed from her function and subsequently became subject to criminal investigations.24 From the present author’s personal information, an example may be added: during the course of an arbitration the investor offered a settlement which would have avoided any payment by the Government. The offer was rejected even though the responsible persons in the Government were aware that it was more favourable than what could have been achieved in the arbitration. The arbitration continued and led to an award that ordered the Government to pay substantial amounts. Practitioners familiar with investment arbitration would be able to add similar cases where concessions made by government representatives have exposed them to sanctions or where the actual or perceived risk of such sanctions prevented settlements. C.  Providing Justification for a Change in Position Settlement of a dispute normally requires from all parties a change in the positions that they defended previously. In the circumstances described, parties must present an explanation by which they justify the change to those to whom they are responsible. The most frequently invoked change for  “Bolivia asks US Court to Block Telecoms Claim”, Global Arbitration Review, 12 October 2010.

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136   Michael E. Schneider justifying a new approach and willingness to settle relates to a change in the circumstances of the dispute. New circumstances may arise from a variety of events. For instance, the commencement of arbitration proceedings by the investor may serve for the public administration concerned as a new event that can justify a reconsideration of the position. Often the triggering event occurs during the course of the proceedings. Sometimes it may be a partial award that is taken as justification for such a change; in other cases the advancement of the case and the argument and evidence produced in the course of the proceedings brings a degree of clarification which produces the necessary reassessment. Two arbitration practitioners describe their experience as follows: . . . filing an ICSID arbitration against a host state could have a significant impact. Usually the host state will require ‘blood to be spilt’ – for instance, the ICSID tribunal issues an interim award in favour of the U.S. investor on jurisdiction – before the government will agree to settle.25

Judge Schwebel reported on his experience in a case in which he acted as a mediator: both parties “came to the mediation with inflexible demands upon the other. Neither party evidenced a willingness to modify those demands”. The mediation failed shortly after having started. The dispute moved on to arbitration and, when the proceedings had advanced and the award became imminent, the parties settled. Judge Schwebel had no information why the sensible solution had not been reached earlier, but he offered as a possible explanation that “the exchange of written pleadings was salutary in demonstrating to the parties that the position of each side had their infirmities”.26 A similar experience is relayed by Obadia. In one of the cases described by her, the parties showed a willingness to reach a settlement and the ICSID tribunal offered its assistance. The President of the Tribunal acted as mediator. At first the mediation failed and the parties had to resume the arbitration. However, as the proceedings continued, the parties reached agreement on some issues and left the others to be decided by the Tribunal.27 In a case concerning a large infrastructure project in southern Europe, the agreement with the Government provided for dispute settlement before the local courts; these refused to enter the claims filed by the foreign contractor who then brought some issues before an international technical expert  Arif Ali and Baiju Vasani, “Ten Golden Rules for U.S. Investors to Follow in Dispute Resolution Negotiations with a Foreign State or State Entity”, in American Arbitration Association (ed.), Handbook on International Arbitration and ADR, (Juris, 2nd edition, 2010), at 347, 352. 26  Schwebel, “Is Mediation of Foreign Investment Disputes Plausible?”, at 238. 27  Eloise Obadia, “How Proactive Arbitrators Really Are in Conducting Arbitral Proceedings: An ICSID Perspective”, News from ICSID 16(2) (1999), at 8. 25

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according to a procedure provided by the contract. Eventually the determination by the expert served as the basis for a settlement of the dispute.28 Similarly, two governments had agreed to find a solution for a large number of claims that had arisen under several projects involving contractors of one of them and public entities of the other. They agreed on a procedure by which the claims that had arisen under each of these projects would be submitted to pairs of experts: one legal, the other technical. The determinations made by these experts were not binding on the governments but served as the basis for negotiations between them and eventually led to a settlement of all disputes.29 In some cases the reluctance of governments to agree to a settlement goes so far that they require the arbitral tribunal to dress as an arbitral award the settlement reached confidentially. A case in point is the famous award in the dispute between the Government of Kuwait and Aminoil.30 According to information from a source that the present author considers very reliable, but which is contested by another source, the parties agreed towards the end of the proceedings on an amount of the compensation for the nationalization of Aminoil. Kuwait accepted to pay this amount immediately, if it was ordered by the arbitral tribunal to make the payment. The settlement was communicated confidentially to the arbitral tribunal which rendered a carefully reasoned award and a concurring opinion, ordering the payment of the agreed amount. Kuwait paid the award immediately.31 In the case of Antoine Goetz v. Burundi, an ICSID tribunal rendered a partial award by which it left to the Government the option between revoking an act that formed the subject of the investor’s complaint or to pay compensation. The Tribunal declared that, if the Government chose one of these two solutions it would not be in violation of its international obligations; if it failed to do so, the parties could resume the proceedings. On that basis the case was settled.32 This award followed the example of the award in the case of Texaco and Calasiatic v. Libya, where the arbitrator, relying on the terms of the arbitration clause, found that if the Government restored the concession, it would not be in breach of its obligations. The award brought about a rapid settlement, contrary to the two parallel cases which ordered payment of  Personal experience of the author.  For details see Michael E. Schneider, “The Art of Blending Arbitration and Other ADR Methods”, in Ingen-Husz, ADR in Business 2 (2011) 313, at 324. 30  Kuwait v. Aminoil, Final Award, 24 March 1982, reprinted in 21 (1982) I.L.M. 976, at 1042. 31  Account by Dr Jean-Flavien Lalive, counsel for Aminoil, reporting a discussion with a member of the arbitral tribunal after the completion of the case. 32  Goetz and others v. Burundi, ICSID Case No. ARB/95/3, Award (Embodying the Parties’ Settlement Agreement), 10 February 1999. 28 29

138   Michael E. Schneider compensation and which required many years of efforts until the claimants were able to make some recovery of the amounts awarded. Finally an example may be given for the intervention of a development finance institution (DFI). In a dispute concerning the construction of a dam financed by the X-DFI, the arbitral tribunal had rendered a partial award dealing with some of the claims; but a large number of other claims remained outstanding. In that situation, X-DFI addressed a letter to both parties containing the following passage: In the light of the above, X-DFI is of the opinion, that the time has come to openly discuss those issues [which remain unresolved] during a High Level Meeting (HLM) in order to identify possible solutions and to assess the possibility of an amicable settlement of the issues, by this avoiding lengthy and expensive further arbitration procedures. X-DFI, although not being party to the process, would like to support a possible amicable settlement and therefore offers to provide the framework and the required facilities for the HLM at its premises in. . . .

The parties did indeed meet as invited, reached a settlement and withdrew the remainder of the arbitration.

D.  Examples of Successful Mediations Despite the difficulties that have been highlighted in this chapter, there are investment disputes in which the parties are able to settle without reference to arbitration. Little is known about these disputes and the manner in which the settlement is reached. However, there are at least a few cases for which third party assistance in formalised procedures is reported. The following are two examples. One of these cases concerns the first and only ICSID conciliation that produced a settlement. In the dispute between Tesoro Petroleum Corp. and Trinidad and Tobago, Lord Wilberforce was appointed as conciliator. The success of his conciliation probably was due to the manner in which he conceived his task. In his recommendation he described this task in the following terms: . . . to examine the contentions raised by the parties, to clarify the issues, and to endeavour to evaluate their respective merits and the likelihood of their being accepted, or rejected, in Arbitration or Court proceedings, in the hope that such evaluation may assist the parties in reaching an agreed settlement.33

 Quoted from Ziade, loc. cit. 7; see also Lester Nurick and Stephen Schnably, “The First ICSID Conciliation – Tesoro Petroleum Corporation v. Trinidad and Tobago”, 1(2) (1986) ICSID Review 340.

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The approach, which sometimes also is described as early neutral evaluation, eventually led to a settlement of the dispute. The other example of a successful mediation brought about the settlement in the dispute between Vattenfall and Poland. In that case, Professor Thomas Wälde acted as mediator, assisted by a team of experts in electricity regulatory economics, electricity engineering and financial analysis. At the end of long and detailed analysis of the materials evidencing the parties negotiations and agreements and the evolution of the transaction, Professor Wälde made a proposal that was perceived as emanating from the parties’ own views of the transaction.34 Apart from the thorough engagement of Professor Wälde in his task and the creativity with which he addressed it, a major factor contributing to the success of the mediation probably lay in the interest that both parties had in the continuation of their relationship of energy delivery. These two examples may be compared to a subsequent investment dispute that Vattenfall brought first to ICSID arbitration before it could be settled. The dispute concerned the construction of a coal-fired power station in Hamburg and involved environmental regulations and permits of the City of Hamburg, of the Federal Republic of Germany and of the European Union; the project had given rise to protests from environmental and political groups and to court proceedings in Germany.35 Eventually several companies of the Vattenfall group initiated in April 2009 ICSID proceedings against the Federal Republic of Germany under the Energy Charter Treaty. The Tribunal was constituted but shortly thereafter the proceedings were suspended and after direct negotiations between the Parties the case was settled. The settlement was recorded in an award on agreed terms of March 2011.36

VII.  What To Do? In the circumstances described, one may well reach the conclusion that there is not much that can or should be done: those disputes that can be settled amicably are settled. Since, despite all obstacles, the numbers of the disputes that are settled, before or during arbitration, seem to be high, one may wonder whether additional efforts are justified.  Thomas Wälde, “Efficient Management of Transnational Disputes: Mutual Gain by Mediation or Joint Loss in Litigation”, 22(2) (2006) Arbitration International 205; see also Schwebel, “Is Mediation of Foreign Investment Disputes Plausible?”, at 238. 35  For some aspects of the dispute see Nathalie Bernasconi, “Background paper on Vattenfall v. Germany arbitration”, IISD, July 2009. 36  ICSID Case No ARB/09/6. 34

140   Michael E. Schneider Moreover, from the little that is known about those cases where the disputes are settled, it appears that such settlements are brought about in direct negotiations between the parties without the intervention of mediators and other ADR neutrals. Once the dispute has become ripe for settlement, the parties seem to be able to resolve it on their own and without outside help. However, the numbers of cases that do proceed through arbitration to the bitter end seem to be higher than those that are settled during the course of the arbitration; much time, money and other valuable resources are spent on them. Moreover, little is known about the circumstances of the settlements: it may well be that in many cases the settlement is limited to some aspects and takes account of some of the interests at stake; other important aspects of the dispute may have been excluded, causing the germination of new disputes in the future; or it may simply consist of one party giving up hope and abandoning its position. Valuable investments may thus have been lost or, if they continued to exist, may have done so under less favourable conditions. Thus, it may still be of interest to examine what can be done to increase the number of investment disputes that are settled, expand the scope of the settlement and improve the methods and conditions for reaching settlement. Leaving aside the important field of dispute prevention,37 possible lines of action to promote non-contentious dispute resolution may be found in three directions: (i) creating or strengthening the willingness to settle, (ii) improving the methods for reaching settlement, in particular by enlarging the participants (iii) considering the choice of the persons and institutions assisting in the search for settlement. A.  Creating or Strengthening the Willingness to Settle Probably the greatest obstacle to reaching settlement, by negotiation or by any other ADR method, consists of a complete lack of, or an insufficiently developed, willingness to settle. Some of the causes that may explain this difficulty in investment disputes have been described above. Action for improvement must render more visible the costs of the persisting disputes; it must make the risks of court and arbitration proceedings more apparent and must provide assistance for justifying changes in previously proclaimed positions. The first measure that might be considered in this respect concerns the costs of a drawn out dispute: these costs consist of a delay in the implementation of valuable investments or even their loss. In the situation of  See for example, UNCTAD, “Investor-State Disputes: Prevention and Alternatives to Arbitration”, UNCTAD Studies, 2010.

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c­ onfrontation that prevails in disputes, these costs sometimes are used to build up the claims by one side; the other side then perceives them as posturing in the litigation. Neutral evaluations of the costs – suffered by both sides – from such delays or losses may be helpful incentives to promote the interest in settlements. More directly, when the dispute is brought to arbitration, the direct costs, as they are documented in published awards, run into millions of US Dollars and sometimes even more.38 There has been some reluctance to award costs to the winning party as this is done frequently in commercial arbitration. However, this seems to be changing and in recent cases one finds awards that order the losing party to pay all legal costs expended by the winner. Such cost decisions may serve as a discouraging factor against bringing spurious claims or making untenable defences. However, the costs that have to be expected by a party often seem to be underestimated and the risk of having to bear the opponent’s costs rarely seems to be considered when deciding whether to seek settlement. An additional cost incentive could be created by arrangements which, at an early stage of the arbitration, seek to secure the costs of the winning party. In commercial arbitration, arising out of a contract between the parties, such arrangements are contrary to the underlying principle of commercial arbitration: the parties agree to settle their dispute in arbitration and to fund the procedure jointly by equal contributions to the advances that have to be paid to the arbitral tribunal and to the institution; it is only at the end that the costs are allocated according to the outcome of the arbitration and other relevant criteria. In such a context, there is room for security for costs only in very exceptional circumstances. The situation in treaty based investor-State arbitration is different: the action is not brought on the basis of a contract between the parties but by reference to a general commitment under the treaty. As a result of the application of arbitration rules created for contract-based arbitration, the parties to such treaty based proceedings are required to pay in equal shares the advances requested by the tribunal or the institution. It may be worth considering whether this principle of commercial arbitration should be applied in a more flexible manner in treaty-based arbitration. Depending on the financial basis of the investor, the State may be justified in claiming security for costs, especially if the investor is a special purpose vehicle in a tax-haven country. One might even consider going a step further and provide for securities for the respective claims, depending on preliminary assessments of the case. In such a situation as that described in the Fuchs v. Georgia award quoted above, the investor may find it quite difficult,  For some information on these costs see Franck, loc. cit., 66 et seq.

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142   Michael E. Schneider after many years of frustrating negotiations, to provide funding for costly arbitration proceedings. If it prevails in the arbitration, it may have ahead of it an equally arduous task in trying to obtain effective payment of the sums awarded by the arbitral tribunal. Decisions by which arbitral tribunals, at an early stage of the arbitration, address issues of arbitration costs and possibly also security for such costs and for the claims are rare; arbitral tribunals find it difficult at that stage to make decisions which may indicate a view on the possible outcome of the dispute, even if the view is declared to be provisional. Nevertheless, it may be worth considering further by what methods the parties to an arbitration can be alerted early to the costs which they may have to face not only for their own defence but also for that of the other party. Making the financial risks clearly apparent at an early stage of the arbitration may be a powerful incentive for settlement or favouring an ADR procedure. Another approach to increase the willingness for settling or engaging in an ADR procedure consists of providing some indications of the possible outcome of the dispute. In the previous section of this chapter examples have been given of cases where such indications have assisted the parties to review their positions and approach in a more conciliatory spirit the possibility of a settlement. From early evaluation to partial awards and alternative decisions, there are a variety of methods by which arbitrators or other third persons may provide such indications, leaving it to the parties whether they wish to follow these indications in their settlement and to complete those points that have remained open. Indeed, the very fact that the parties have received a clear signal that the proclaimed position is not as solid as assumed may provoke a true ADR process leading to solutions beyond the dispute itself. The initiative of such indications about the respective strengths and weaknesses of the parties’ positions may come from one of them or from outsiders, a financing institution or an insurance company; it may form part of an ADR procedure or may come only in the arbitration. Since such indications are provided on a preliminary basis without the full examination of the case, it is important that they remain provisional. Indeed, it is often their provisional nature which renders the approach acceptable to the parties to the dispute. The parties preserve the possibility of influencing the outcome of the dispute by adapting their argument and evidence to the neutral evaluation; but they are likely to have a better view on the risks that they must face if they continue in the arbitration. B.  Methods: Diversity of Procedures, Strengthening the Position of the Negotiators and Enlarging the Group of Participants In commercial ADR proceedings a variety of methods are offered. The parties choose one and occasionally several and normally apply them in sequence or

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alternatively. In investor-State disputes, in particular when the dispute has reached political dimensions, the lines between different ADR methods are not always clearly drawn. No specific method alone may be sufficient; combinations may often be useful or even necessary. The principal objective must be to adapt the chosen method or methods to the specific circumstances; this may require adjusting the process as it evolves. It may also require variations to established practices, such as the addition of a team of experts used in the example of Professor Wälde referred to above, assisting the mediator in devising solutions responsive to the interests and objectives of the parties. An aspect that requires particular attention is the choice of the participants. It is a basic principle of ADR proceedings that the ultimate decision makers must be involved in order to secure the success of the process. As explained above, the implementation of an investment project and the disputes that may result from it often involve a large and diverse number of governmental institutions and other stakeholders and interested groups. Therefore, one of the critical issues in the design of an ADR process for an investment dispute concerns the question as to how these interested groups are identified and integrated in it. The integration of these groups is necessary not only for reaching the settlement; when the settlement requires further action, its implementation often also requires the integration and support from these groups. In some cases the central government or the competent ministry alone may be in charge of this integration and may well be in a position to do so without the direct participation of any other players in the process. This may require mechanisms and procedures through which the negotiator on the side of the host State receives from other departments involved the necessary information and authority to conduct the negotiations and reach settlement, normally within defined limits. In this context budgetary authority is of particular importance.39 In other cases, the process may require that the group of participants be enlarged. A number of circumstances may render such an enlargement of the process difficult or even impossible: the interests may be too diverse or even opposing, the political system may be adverse to such cooperative solutions of the dispute; and some groups simply may not wish to have the dispute resolved because its continuation serves their political agenda. However, in the absence of such integration, the road to a settlement may remain closed or, if a settlement is found, it may remain without effect. Depending on the existing control and audit mechanism in the governmental organisation, it may be of critical importance for the success of the  UNCTAD, “Investor-State Disputes”, at 83 et seq.

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144   Michael E. Schneider settlement efforts to find a method in which the competent institution is associated in the process and, before the conclusion of the settlement, is given the opportunity of vetting the result. For the investor the situation in this context is particularly delicate: on the one hand the need of associating diverging stakeholders in the settlement attempts can be of critical importance; on the other hand, the investor, as a foreigner, is not an accepted actor in the political life of the host country; as a matter of principle, the investor must abstain from interference in it. The methods for enlarged ADR procedures do not seem to have received much attention among the lawyers dealing with dispute settlement procedures. They are more a subject of interest to political scientists or sociologists. Examples can be found for instance in collective bargaining, as it is practiced in many industrialised countries. Such collective bargaining occasionally is described by terms such as “arbitration”, even if the procedure is different from that generally used in commercial or investment arbitration. However, the example shows that outside the narrow world of arbitration lawyers there may be useful methods for resolving investment disputes in a manner that is more satisfactory to the present situation. A recently reported example from Switzerland may serve as an illustration for such truly alternative methods: for some 20 years quarry owners, neighbours and environmentalists fought against each other in the Canton of Zug in court proceedings, public initiatives, popular votes and other measures. Eventually the local government created a commission in which local authorities, quarry contractors, landowners, political parties and NGOs were assembled with the assignment of regulating the conditions of quarrying for the twenty or thirty years to come. Eventually they reached a compromise that put the dispute to an end by preparing regulations for quarry operations that were acceptable to all concerned.40 A similar alternative – and probably quite innovative approach – received much attention in Germany where public debates, demonstrations and a widely followed occupation movement against the construction of a new underground railway station in Stuttgart was at the centre of national attention for a considerable period of time; eventually it led to the replacement of the local government by the opposition engaged against the project. A key feature in the process and a major factor in the final resolution of the dispute was a mediation by Heiner Geissler, a retired politician with much experience in procedures of collective bargaining in labour disputes.41 The process assembled the Government, local authorities, the Federal Railway Company and interested contractors, political parties and the principal  Iten, “Der Boden unter den Füssen”, Neue Zürcher Zeitung, 14 January 2012, at 25.  Available at http://www.schlichtung-s21.de (last accessed 25 March 2012).

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initiative having organised the protests. While some jurists as commentators had problems with the legality of the process,42 it contributed to the restoration of peace in the region and the implementation of the project in an adapted form. Admittedly, an element of considerable additional complication would be introduced by including a foreign investor into such a mix of groups involved in the dispute. Nevertheless, these examples may serve as a challenge to the specialists in the settlement of international disputes, inviting them to search for creative solutions beyond the traditional forms of international arbitration. C.  The Persons and Institutions Assisting in the Dispute Settlement: The Relative Importance of Independence and Authority It will have become evident from the discussion above that mediators and other persons assisting the parties in their search for a settlement may have to have qualifications that at least in part go beyond those that make a good mediator in commercial disputes. In addition to the classic mediator skills and an understanding of the substance of the dispute, the mediator may have to have a sense for the political and social fabric of the host country, responding to the specific context in which the dispute evolves. In this respect it must appear as surprising to note the qualifications which, according to the Washington Convention, persons designated to serve as conciliators or arbitrators must have: “high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment”.43 These are, of course, important qualifications; but one would have expected that experience as a conciliator (or arbitrator) and some other qualifications necessary for understanding the political context of the dispute, and assisting the parties in resolving it, would also have to be included among the list. Apart from the personal qualifications of the mediator, there is another factor that may be of particular importance in the choice of the mediator in investment disputes: the respect that this person commands in the groups involved in the dispute and the weight that is attributed to his recommendations. Impartiality and independence have become the almost exclusive criteria for the selection of arbitrators and other “neutrals” in rules and guidelines relating to the selection. However, other possibly conflicting qualifications  Risse and Bach, “Wie frei muss Mediation sein? – Von Politik, Ideologie, Gesetzgebern und Gerichten”, (2011) SchiedsVZ, at 14 et seq. 43  Convention on the Settlement of Investment Disputes Between States and Nationals of Other States – International Centre for Settlement Of Investment Disputes, Washington 1965, Article 14 (1). 42

146   Michael E. Schneider are of relevance for the choice of a mediator in investment disputes and, in other times and other social contexts, have played a more important role. Traditionally, the reputation and authority of the person to whom the parties look for the settlement of their dispute was of particular importance. The settlement of a dispute depends not only on the wisdom and justice of the solution proposed or imposed but also on the credibility and the clout of its author. In the history of international relations there are numerous cases where the parties to a dispute turned to a person for the settlement of their dispute not because he44 was free of any actual or possible links with any of the parties, or because he did not give “rise to reasonable doubts in his independence and impartiality”, but because the parties believed that he had the capacity of finding a solution acceptable to both parties and, perhaps even more important, because the authority that any solution brokered by him would command. Among the examples that spring to mind, one may think of the Pope who settled the dispute between Spain and Portugal over the newly discovered lands in the West and whose decision still divides millions of people in Latin America by the language they speak. There is a long list of settlements between States that were brokered by other States, e.g. the mediation of France between Spain and the United States in 1898, that of the United States between Russia and Japan (1905), and between France and Tunisia (1958), that of the Soviet Union between India and Pakistan (1965) and the Camp David settlement between Egypt and Israel brought about by the President of the United States. It is unlikely that any of these successful mediators would have passed the IBA Guidelines on Conflicts of Interest or similar texts. The model that attributes weight to respected peers rather than totally independent outsiders has applications in other contexts, too. In commercial arbitration one may find traces of this approach in dispute settlement mechanisms operated by closed groups, as for instance at commodity exchanges. Traditionally, disputes in such exchanges were decided by other traders. The authority and respect commanded by these “commercial men” are the decisive criteria for their choice, rather than criteria of strict “independence” as they are now frequently prescribed. It is submitted that these considerations concerning the authority, respect and clout of the mediator may be of decisive importance in the success of a  In the historical context it is probably not politically incorrect to speak only of “he”; the cases where a woman was chosen as arbitrator are rare. As an exception the Queen of England comes to mind, who had been chosen as the arbitrator in the dispute between Argentina and Chile in the dispute over the Beagle Channel; sadly, the panel that eventually was appointed to resolve the dispute was composed only of men.

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mediation or similar ADR process. In the example of the political mediation about the railway station in Stuttgart mentioned above, the person chosen as mediator was a high ranking politician. Although he had not previously taken a public position on the dispute, his party was the leader of the coalition of the local government, which was one of the principal protagonists of the dispute. Nevertheless, the authority and respect that Dr Geissler commanded in the German political scene made him acceptable as a mediator and indeed an ideal person for this function. Can this experience be put to productive use in the mediation of investment disputes? I suggest that the answer should clearly be, yes! The reputation and authority of the mediator, additional to and independently of her mediation skills, can be expected to make decisive contributions at least at two levels: first of all at the engagement of the procedure, it may be more easily acceptable for the participants to leave their respective confrontational positions and enter into a mediation if they are invited to do so by a respected third person. When it comes to accepting the settlement and defending it, the solution adopted may pass more easily if it is associated with such a person. The clout of this person also might provide some protection to civil servants and politicians when they are accused that the settlement has compromised national interests. In addition to the personal reputation of the mediator, the institution recommending or appointing her may be of importance. International organisations, financing institutions involved in the project or some other institutions distinct from the parties but respected by them may make such a contribution, enhancing the effectiveness of the mediator. In some cases insurance schemes in the home State of the investor play a role in promoting settlements.45 Often such interventions remain discrete as in the example quoted above. In any event a balance must be struck between the additional weight that may be given to the mediator by such an intervention and the risk that the outsider gets drawn into the dispute, creating resentment or even liability. These considerations show that there are no simple solutions. What is required is first of all awareness of the diversity of the conflict situations, responsiveness to the factors determining this diversity and creativity in finding approaches that assist in finding solutions that take these factors into account as far as possible.  The UNCTAD Study on Investor-State Disputes (2010), at 95, mentions the case of the German Hermes insurance and the US Overseas Private Investment Corporation (OPIC); similar programmes exist in other countries, in particular in the field of export risk insurance. In some instances intergovernmental committees examine cases where the insurance of one State had to cover losses caused by the other State.

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D.  Improving the Rules – the IBA Investor State Mediation Rules Many of the factors described in this chapter that complicate the resolution of investment disputes concern the practices of the parties to investment disputes, constraints they face, their concerns, attitudes and approaches as well as those of institutions. Improvements will have to respond to these circumstances as they are specific to each dispute. It is not very likely that rules and regulations can bring much change, apart from providing the ad hoc or institutional framework in which initiatives can develop and address some of the practicalities that must be considered in the course of settlement attempts. At present there are a number of rules and regulations available dealing with ADR methods and concerning primarily conciliation of mediation procedures. UNCITRAL has offered Conciliation Rules since 1980 and a Model Law on International Conciliation since 2002. The principal arbitration institutions offer such services under different names: ADR Rules are offered by the International Chamber of Commerce (ICC) “applicable to whatever settlement techniques [the parties] believe to be appropriate to help them settle their dispute”. The Permanent Court of Arbitration (PCA) in The Hague provides Mediation Rules, so does the World Intellectual Property Organisation (WIPO), the London Court of International Arbitration (LCIA), the International Centre for Dispute Resolution (ICDR) and its parent organisation, the American Arbitration Association (AAA), the Swiss Chambers, the Stockholm Institute, the Vienna and many other chambers of commerce and other institutions. The only rules offered specifically for investment disputes are the Conciliation Rules of ICSID and its Additional Facility that have been mentioned already. The reasons for their lack of success most likely include the heavy procedure that they prescribe. The commencement of ICSID conciliation is cumbersome and takes several months, in the latest case it took from 19 September 2011, when the request was registered, until 17 February 2012 when a conciliation commission had been constituted. The procedure then provides for written statements, supporting documentation, witnesses, experts and hearings in a way that closely resembles arbitration proceedings. No wonder that these rules are “perceived as overly rigid”.46 While many of the existing mediation rules might well be used for some forms of ADR proceedings in investment disputes, it was nevertheless useful that consideration was given to specific ADR rules for such disputes. The  Stevens and Love, Investor-State Mediation: Observations on the Role of Institutions, Contemporary Issues in International Arbitration and Mediation – The Fordham Papers, at 23, with a more detailed criticism of these rules.

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Mediation Committee of the IBA has taken up the task.47 In 2008 it created a “State Mediation Subcommittee” under the leadership of Professor Jack Coe and Margarete Stevens. This subcommittee commenced its work by seeking to identify reasons why investor-State mediation is not more prevalent. It identified as the principal reasons (a) excessive rigidity of those rules specifically applicable to investorState mediation; (b) inadequate knowledge of the availability and potential benefits of mediation among representatives of States and investors; and (c) lack of a readily identifiable pool of mediators with both mediation skills and a background in investment disputes.48 Based on this work, the subcommittee then addressed the first of these factors and, under the new leadership of Anna Joubin-Bret and Bart Legum set up a Working Group on Rules for Investor-State Mediation. The Working Group prepared draft rules that were discussed at the IBA Conference in Dubai on 2 November 2011 and subsequently revised. The latest version, dated 2 March 2012 is circulated for further comments.49 It is planned that in 2012 the rules will be submitted to the IBA Council for adoption. The draft IBA Investor-State Mediation Rules in their present version differ from the ICSID Conciliation Rules primarily by a much greater degree of flexibility; they leave the organisation of the procedure to the parties with the assistance of the mediator. Their main function is to provide a framework and some guidance in this respect. The draft IBA Rules resemble other mediation rules, except that in the IBA Rules some aspects are regulated in greater detail. These common features of the rules do not call for special comments in the context of the present article. The comments below, therefore, are limited to highlighting some aspects of the draft rules that may be seen as responding to particular concerns arising in relation to investor-State disputes. The IBA draft rules regulate in detail the designation, resignation and removal of the mediator. As a matter of principle, the mediation is conducted by one mediator; co-mediation by two mediators is foreseen as an  The following explanations are based on Barton Legum, Anna Joubin-Bret and Inna Manassyan, “Rules for Investor-State Mediation – Draft Prepared by the International Bar Association State Mediation Subcommittee”, to be published in Roberto Echandi and Pierre Sauve (eds.), New Directions and Emerging Challenges in International Investment Law and Policy (Cambridge University Press, forthcoming), and on the notes addressed by the Co-Chairs to the members of the Sub-Committee. 48  Summary by the Co-Chairs of the State Mediation Subcommittee (Anna Joubin-Bret, Barton Legum) to the members of the Working Group on Investor State Mediation Rules, 9 March 2011. 49  Available at http://www.ibanet.org/LPD/Dispute_Resolution_Section/Mediation/Default .aspx (last accessed 25 March 2012). 47

150   Michael E. Schneider option. The mediator or the co-mediators are designated by the parties to the dispute and, if they cannot agree, with the assistance of a Designating Authority. In a mechanism similar to that in the UNCITRAL Arbitration Rules, the Secretary-General of the Permanent Court of Arbitration may be called upon to select a Designating Authority if the parties have failed to do so. The drafters of the rules have paid particular attention to qualifications for the mediator. The qualifications are set out in an appendix. They are not mandatory and merely serve as guidance for the parties and a Designating Authority which may have to intervene; but listing qualifications that are useful or even necessary for mediators in an investor-State mediation is a useful exercise as an examination of the list of these qualifications shows. This list is set out in Appendix B to the draft rules. It contains some qualifications that one would expect to find in such a document for any mediation, such as experience in mediation in general and specifically with respect to the languages and nationalities concerned. The list also mentions experience in dealing with governments and in dispute resolution proceedings with commercial entities in the substantive field of the investment at issue and in proceedings involving States or State agencies and instrumentalities; but in this context the list refers not only to investor-State disputes but also mentions peace negotiations, border disputes and trade disputes. The list specifically mentions experience as a mediator in cross-cultural disputes and points out that the “regional or international stature” of the person considered is a qualification to be considered when selecting the mediator. As mentioned already, the draft rules prescribe that the mediation is conducted “in accordance with the parties’ wishes and with the assistance of the mediator”; procedural decisions may be taken by the mediator, after consultation with the parties. Meetings of the mediator with one party only (“caucusing”) is expressly permitted; the rules address the question whether and how information from one party may be shared with the others. The mediation commences by a “mediation management conference”. Parties having agreed to mediate under the Rules undertake to participate at least in this conference. Thereafter, any party may withdraw from the mediation at any time, after having notified the other party or parties and the mediator. Prior to the withdrawal, the mediator shall hold a meeting, in person or by means of telecommunication, with the parties, including the withdrawing party. As a matter of principle, the mediation “shall be private” and only the mediator, parties and their representatives may attend. However, a party may communicate to the mediator and other party “the names of any nonparty whose participation in the mediation it deems necessary or useful to the settlement of the differences and disputes”. The communication is made

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“for discussion” and the participation of such “non-party” in the mediation must be agreed by the parties and the mediator. The mediator may consult experts and may request that a party provide additional information and material. The detailed rules deal with confidentiality issues; documents and communications concerning the mediation must remain confidential. But there is a list of exceptions that also includes both the fact that the parties have agreed to mediate or have settled in mediation; the terms of any settlement reached must remain confidential, unless otherwise agreed. In the light of the on-going work on transparency in investor-State disputes, especially in UNCITRAL, the confidentiality provisions may have to be reviewed. If requested by all parties, the mediator may make “oral or written recommendations to the parties jointly concerning an appropriate resolution of the differences and disputes”. However, the Rules also clarify that “the mediator shall not have authority to impose any partial or complete settlement on the parties”. Such a settlement must be agreed by the parties in writing; the parties undertake to “exercise their best efforts to ensure that any settlement agreement is fully performed by the parties”. Once adopted, these rules can be expected to make a useful contribution to the wider use of ADR procedures in investment disputes; but much remains to be done for the development and promotion of means by which international investment disputes can be resolved in a manner that is responsive to the challenges caused by the great diversity of the interests, issues and conflict situations that arise in them.

Section Three: Interaction at the Implementation Stage

Chapter Nine Between Saying and Doing: The Diplomatic Means to Implement the International Court of Justice’s Iuris Dictum Laurence Boisson de Chazournes and Antonella Angelini

I.  Introduction: The Vectors of Implementation “It is ironic” – noted Sir Robert Jennings some years ago – “that the Court’s business up to the delivery of judgment is published in lavish detail, but it is not at all easy to find out what happened afterwards”.1 So far, the attempts to address this issue have focused on the rate of compliance with the International Court of Justice’s (‘ICJ’ or ‘the Court’) decisions as well as on the means of legal redress in cases of non-compliance.2 Other facets of the postadjudicative phase have, however, stirred less interest. In particular, only a few authors have looked at the practical means of implementation,3 while barely anyone has explored the implementation of ICJ Advisory Opinions (‘AO’). To cast light on these aspects, we will analyze in particular the diplomatic means aimed at implementing ICJ pronouncements. At the outset, though, a simple question requires some reflection: what lies behind the abovementioned reticence?  Robert Jennings, “Presentation”, Increasing the Effectiveness of the International Court of Justice: Proceedings of the ICJ/UNITAR Colloquium to Celebrate the 50th Anniversary of the Court, in eds. Connie Peck and Roy Lee (Hague: Martinus Nijhoff Publishers/UNITAR, 1997), at 78. 2  The issue of compliance with ICJ judgments has been thoroughly dealt with. The most recent contributions are Aida Azar, L’exécution des decisions de la Cour internationale de Justice (Brussels: Bruylant, 2003) and Costanze Schulte, Compliance with Decisions of the International Court of Justice (Oxford University Press, 2004). 3  Affef Ben Mansour, La mise en œuvre des arrêts et des sentences des juridictions internationals (Brussels: Larcier, 2011). 1

156   Laurence Boisson de Chazournes and Antonella Angelini No doubt one could highlight a handful of reasons, ranging from the limited access to information on implementation initiatives to the difficulty of identifying the participants in the post-adjudicative phase, especially in the case of AOs,4 and so forth. Yet the crux of the matter is that the quid of post-adjudication proves hard to pinpoint in view of a conceptual framework suitable for identifying follow-up actions within the bundle of conduct surrounding an ICJ judgment or an AO. And, what is more, the fall-back on notions such as compliance or execution is unlikely to resolve the deadlock. It is no coincidence, in fact, if the ‘ironic’ neglect hinted by Sir Robert ­Jennings persists for certain aspects of post-adjudication which remains distant from the familiar backyard of compliance. Indeed, the means of implementation are the object of a political choice and, as such, traditionally outside the fence of legal analysis on post-adjudication,5 whereas the follow-up to AOs hardly fits with the classic understanding of compliance. Together, these observations suggest that the very notion of implementation needs some in-depth ­rethinking. To begin with, it is of note that we rarely think of implementation independently from compliance. The two terms are employed almost interchangeably in connection with the ‘post-adjudicative phase’. More precisely, ‘implementation’ is held to comprise all the actions that may facilitate or result in compliance, while compliance itself indicates the ‘state of conformity or

 Jean Salmon speaks of the difficulty of identifying the ‘Court’s audience’, see Jean Salmon, “Quels sont les destinataires des avis”, International Law, the International Court of Justice and Nuclear Weapons in eds. Laurence Boisson de Chazournes and Philippe Sands (Cambridge University Press, 1999), at 28–35. 5  Overall, it has been noticed that the enforcement of international judgments relies on the same mechanisms providing for the enforcement of any kind of international law obligation. Hence, the matter acquires a political rather than a legal character. On this point, see Edvard Hambro, L’exécution des sentences internationales (Recueil Sirey, 1935), at 47; Constantin Vulcan, “L’exécution des décisions de la Cour internationale de Justice d’après la Charte des Nations Unies” (1947) 51 RGDIP 187; Shabtai Rosenne, “L’exécution et la mise en vigueur des décisions de la Cour internationale de Justice” (1953) 57 RGDIP 532; Ehran Tuncel, L’exécution des décisions de la Cour internationale de Justice selon la Charte des Nations Unies (Messeiller, 1960), at 16, 60; Pasquale Paone, “Considerazioni sull’esecuzione delle sentenze della Corte internazionale di Giustizia” XIV Comunicazioni e studi (1975), at 632; Gilbert Guillaume, “Avant-Propos” in Azar, L’exécution des decisions de la Cour internationale de Justice, at xv. A similar observation was also made by the Committee of Jurists charged with the task of elaborating the Statute of the International Court of Justice. As they observed, “[i]t was not the business of the Court to ensure the executions of its decisions”, see Documents of the United Nations Conference on International Organization, vol. 4, at 853. 4

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identity between an actor’s behaviour and a specified rule’.6 Hence, the obligation of execution is taken as the backbone of implementation. Attention gravitates towards the parties and what they do after the pronouncement, with little interest for anything happening before or with the involvement of other subjects. Odd as it may seem, this same conception of implementation has been extended to AOs. While offering different grounds for the obligation to execute AOs,7 authors unanimously equate implementation with compliance. No matter the type of pronouncement, implementation is thus seen as a function of compliance. Yet, this does not necessarily cover all scenarios. There may be acts that do not necessarily end in – or end with – compliance, but are nonetheless related to the post-adjudicative phase of an ICJ pronouncement. This may arise, for instance, when there is no compliance notwithstanding the implementation efforts thereto. One of the parties may, in fact, refuse to engage in the conduct previously agreed upon; circumstances may change so as to alter the balance of interests among the parties or attempts to seek a different solution for their divergences and so forth. A grey area exists also when implementation produces practical and legal effects beyond the mere realization of the pronouncement. This happens particularly when implementation paves the way for the accommodation of broader issues between the parties, such as certain ICJ judgments concerning territorial disputes. In addition, one could think of conduct more remotely related to compliance and yet crucial to implementation. Examples range from the conclusion of agreements on the means to resolve frictions in the course of implementation, to the creation of organs or entities with monitoring or other implementation-related tasks.8 While compliance still lies in the background, these  See Kal Raustiala and Anne-Marie Slaughter, “International Law, International Relations and Compliance” Handbook of International Relations (SAGE 2002), in eds. Walter Carlasnes et al., at 538, 539. The same authors define implementation as ‘the process of putting international commitments into practice: the passage of legislation, creation of institutions (both domestic and international) and enforcement rules. Implementation is typically a critical step towards compliance, but compliance can occur without any effort or action by the government’. Similarly, see also Colter Paulson, “Compliance with Final Judgments of the International Court of Justice” (2004) 98 AJIL 434, at 436. 7  Some have held that the legal findings contained in AOs are binding in themselves and therefore require compliance. Paolo Benvenuti, L’accertamento del diritto mediante i pareri consultivi della Corte internazionale di giustizia (Giuffè, 1985). In a similar vein, Michla Pomerance, The Advisory Function of the International Court in the League and U.N. Years (John Hopkins University Press, 1974), at 341–367, 371. Others have found an obligation of execution to arise in case the requesting organ voluntarily accepts an AO, see Philippe Weckel, “Les suites des décisions de la Cour internationale de Justice” (1996) XLII AFDI 428. 8  For more details concerning specific cases, see Sections II and III. 6

158   Laurence Boisson de Chazournes and Antonella Angelini initiatives in themselves are aimed at facilitating or can lead to implementation, which is neither theoretically nor practically the same as compliance. So how should one deal with such conduct? Even broadly conceived, compliance fails to account for their relevance in post-adjudication. Realizing the pronouncement, in fact, is not necessarily the goal they pursue. Yet, if compliance is partly insufficient, some sort of orientation is still needed to sail the vast sea of diplomatic practice potentially surrounding an ICJ pronouncement. Some help may come from the change of perspective implicit in looking at the behaviour of the parties rather than exclusively at the pronouncement. Their acts have legal relevance if taken not only for the immediate realization of the Court’s legal ascertainment, but also for the effective functioning of international law. As any normative system, international law endeavours at assuring the containment and avoidance of disputes, with the term ‘dispute’ here broadly indicating a clash of interests between international law subjects. These two objectives are not always met concomitantly with or exclusively through compliance; however, it still seems reasonable to consider the conduct as fostering either of these goals as part of the implementation process. Accordingly, implementation comprises those acts which go beyond or diverge from compliance, but contribute to the resolution of a dispute not fully resolved, whether because of the Court’s limited jurisdiction or because of its reluctance to address some of the aspects relevant in casu. When ensuing from a diplomatic initiative, such acts will come under the scope of our analysis. The same goes for the efforts to accommodate the interests of States indirectly affected by a pronouncement, for instance in cases of territorial delimitations or of multilateral treaty interpretation. These examples also highlight the importance of implementation for the prevention of future disputes, in addition to the resolution of the existing ones. As a last point of illustration, one could recall those initiatives – like the establishment of monitoring bodies – aimed at channelling and cooling-off the persisting clashes of interest so as to prevent their escalation in a decentralized setting. Consequently, measuring compliance with ICJ judgments and AOs will not be the core of our analysis. Rather, we will seek to identify the conduct, initiatives and mechanisms taken in conjunction with a pronouncement and which contribute to the effective functioning of international law.9 This also entails a twofold shift in the focus of attention, classically centred on the actions taken after the pronouncement by those who have an obligation to execute it. On the one hand, we will in fact consider the initiatives taken  In a similar vein, Weckel speaks of the “suites contastées des decisions juridictionnelles” defined as “les comportements provoqués par ces actes”, see Weckel, “Les suites des décisions de la Cour internationale de Justice”, at 436.

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by the parties in collaboration with the Court and, on the other hand, we will look at the different deals concluded before the pronouncement for its implementation. Our attention will thus essentially gravitate towards the dialogue between the Court and its ‘audience’. Admittedly, such a broad approach could be criticised for being too porous or loose. Yet, concentrating narrowly on compliance is unlikely to offer a less slippery path of investigation. Several commentators have stressed the difficulty of measuring compliance with judgments owing to the complexity of most domestic processes designed to realize compliance,10 to the difference between States’ statements and their deeds, as well as to certain time factors.11 In the case of AOs, these difficulties seem even more daunting, as suggested by the lack of empirical investigations on this issue. What is more, a sound investigation on implementation cannot ignore that the addressees of – and, more broadly, the subjects affected by – an ICJ pronouncement may pursue goals collateral to compliance. It is submitted that such acts are legally relevant for implementation if they contribute to the containment of existing tensions and avoid the insurgence of new ones. With this framework in mind, let us now turn to the implementation of the ICJ judgments first and of its AOs next.

II.  Every Drop Makes an Ocean: The Efforts Towards Implementing ICJ Judgments Implementation is usually broached from the perspective of the pronouncement, rather than from that of the parties. An international lawyer would, in fact, most probably ask what is required to implement a given decision, rather than what is its surrounding context. Most classifications relating to implementation – for instance, the famous distinction between declaratory and constitutive pronouncements – rely on certain proprieties inherent to a judgment, likewise its impact on previous and future legal situations or its subject matter. Yet there may be a risk of overlooking that the course of post-adjudication is ultimately determined by the will of the parties. It is for them to embed the ‘juridical component’ within their  In this respect, Llamzon stresses particularly the hurdle of keeping track of and inferring determinative conclusions from the domestic process aimed at compliance, notably as far as federal systems are concerned. See Aloysius Llamzon, “Jurisdiction and Compliance in Recent Decisions of the International Court of Justice” (2007) 18 EJIL 815, at 845. 11  Philippe Couvreur, “The Effectiveness of the International Court of Justice in the Peaceful Resolution of Disputes” The International Court of Justice: Its Future Role After Fifty Years, in eds. AS Muller et al. (Hague: Martinus Nijhoff Publishers, 1997), at 112, footnote 75. 10

160   Laurence Boisson de Chazournes and Antonella Angelini dispute, according to what proves feasible and appropriate ­thereunder. The features of implementation will thus be influenced by the course of the pre-adjudicative phase and by the intervention of actors other than the parties – notably universal or regional international organizations and the Court itself. A.  A Long Journey: The Role of the Parties in Implementation In the context of a dispute, pragmatism is central to the relationship between the parties. The quest for some form of change in the allocation of interests, coupled with the informational asymmetries to which both parties are subject, brings a certain dose of uncertainty. The pre or post adjudicative initiatives reflect the pragmatic attempt to adjust to actual, as well as potential, changes in the circumstances surrounding a dispute. By illustrating this, we will try to highlight the main features of implementation by the parties to a decision. Upon seizing the Court,12 the parties clearly know they ought to execute the decision to come. However, an express reference to implementation before adjudication can mitigate some of the hurdles potentially looming over the horizon. Clauses on implementation may figure either in the special agreements conferring jurisdiction upon the Court or in other instruments adopted prior to the proceedings.13 This enhances the mutual confidence between the parties, pushing the oft-costly process of dispute resolution, as witnessed in a number of heavily charged cases, particularly delimitation

 Implementation is clearly influenced both by the thrust of the Court’s competence and by the mode of conferring jurisdiction to it. In this latter respect, it is commonly held that when the Court is seized consensually, there are more prospects of successful implementation than in cases of unilateral application. For a contrary view, see Llamzon, “Jurisdiction and Compliance in Recent Decisions of the International Court of Justice”, at 815. 13  The cases in relation to which one can find such clauses are the following: Case Concerning the Arbitral Award made by the King of Spain on 23 December 1906, Judgment, [1960] I.C.J. Reports 192 [“Arbitral Award”]; North Sea Continental Shelf; Case Concerning the Continental Shelf (Tunisia/Libyan Arab Jamahirya), Judgment, [1982] I.C.J. Reports 18 [“Continental Shelf (Tunisia/Libya)”]; Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada/United States of America), Judgment [1984] I.C.J. Reports 246 [“Gulf of Maine”]; Continental Shelf (Libyan Arab Jarnahiriya/Malta), Judgment [1985] I.C.J. Reports, 13 [“Continental Shelf (Libya/Malta)”]; Frontier Dispute (Burkina Faso/Mali), Judgment, [1986] I.C.J. Reports 554 [“Frontier Dispute (Burkina Faso/Mali)”]; Land and Maritime Dispute (El Salvador/Honduras); Territorial Dispute (Libya/Chad); GabcikovoNagimaros; in passing, Kasikili/Sedudu Island (Botswana/Namibia) Judgment [1999] I.C.J. Reports 1045 [“Kasikili/Sedudu”]; Frontier Dispute (Benin/Niger), Judgment, [2005] I.C.J. Reports 90 [“Benin/Niger”]. 12

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cases.14 Conversely, absent a clearly expressed engagement, implementation may prove arduous if positive acts of cooperation are needed. In the context of the Asylum case, for instance, the lack of a solid framework for implementation in the Act of Lima turned to be highly detrimental for ­implementation.15 Practically, implementation clauses set the overall framework for the future diplomatic actions to follow the decision. To this end, they often simply foresee the initiation of negotiations and the conclusion of an agreement in accordance with the pronouncement,16 while at times they even single out and establish how to deal with aspects potentially thwarting compliance. In the Frontier Dispute (Burkina Faso/Mali), for instance, since the parties feared a stalemate in demarcation, they decided a precise time limit for it and asked the Court to nominate three experts in charge of this objective.17 In a similar vein, States have occasionally concluded agreements or clauses addressing certain aspects parallel or indirectly related to the core of the dispute under adjudication. Particularly recurrent in connexion with the  For instance, the conclusion of a package-deal touching upon issues of implementation were fundamental to avoid the worsening of the dispute between Honduras and Nicaragua (Arbitral Award case). On this factual context, see Geneviève Guyomar, “Affaire de la sentence rendue par le Roi d’Espagne le 23 décembre 1906”, (1960) 6 AFDI 362–371. Also very tense was the situation between Burkina Faso and Mali prior to the submission of their dispute to the Court (Frontier Dispute (Burkina Faso/Mali)). 15  Colombia and Peru concluded an agreement, the Act of Lima of 31 August 1949, in which they agreed to submit their dispute concerning the situation of Mr. Haya de la Torre to the I.C.J. The same agreement also foresaw that had the parties been unable to agree on the specific subject matter of their dispute, any of them could have introduced the case through unilateral application. This happened to be the case and the Court was finally seized by Colombia. The act of Lima is reprinted in the Judgment of 20 November 1950, see Colombian-Peruvian Asylum Case (Colombia v. Peru) Judgment [1950] I.C.J. Reports 267 [“Asylum”]. 16  For instance, ICJ Pleadings, North Sea Continental Shelf, Vol. 1 Danish-German Special Agreement, 2 February 1967, 6–7 and German-Dutch special agreement, 2 February 1967, 8–9, (common) article 1(2) (North Sea Continental Shelf  ); similarly, ICJ Pleadings, Continental Shelf (Tunisia/Libya) Vol. 1, Special Agreement concluded between Tunisia and Libya in the Continental Shelf case, 9–10; in passing, Special Agreement between the Government of Canada and the Government of the United States of America to submit to a chamber of the International Court of Justice the delimitation of the maritime boundary in the Gulf of Maine Area, at (1981) 20 ILM 1378. 17  See particularly article IV of the Agreement between Mali and Upper Volta concerning the submission to a Chamber of the International Court of Justice of the frontier dispute between the two States, 1333 UNTS 97. In a similar vein, see also sections 3–5 of the special agreement concluded between Nicaragua and Honduras in the Arbitral Award case, Agreement (with related documents) for submitting to the International Court of Justice their differences with respect to the Award of His Majesty the King of Spain of 23 December 1906, 277 UNTS 159. 14

162   Laurence Boisson de Chazournes and Antonella Angelini e­ xploitation of certain resources, this practice appeared first in the Minquiers and Ecrehos case18 and later in the Gabcikovo-Nagimaros case.19 Overall, these agreements aim at avoiding the impairment of the parties’ respective rights pending adjudication, contributing to maintain a climate as favourable as possible to future negotiations on implementation.20 In sum, under their continuous interaction, the parties take certain diplomatic actions which impact upon implementation even before the judgment is rendered. These actions fix a framework for cooperating after the decision. Turning to the post-adjudicative phase, the locus par excellence of implementation, we enter a phase in which inter-party negotiations come again to the fore in order to decide how to practically execute the judgment and, ultimately, to what degree it is to be upheld. After adjudication, though, the resumed bilateral relationship between the parties comprises an authoritative ‘juridical component’. This blend of a ‘diplomatic’ and a ‘juridical’ component determine the main trends of implementation. At the outset, a clarification is in place concerning the stances that can be taken in respect of the pronouncement. One can distinguish two main genera, namely consensual and non-consensual forms of follow-up. When  A separate agreement concerning fishing rights had been concluded before adjudication and favoured the resolution of the dispute between France and the UK, the judgment needing not much in terms of compliance stricto sensu owing to its declaratory nature. See, Agreement Regarding Rights of Fishery in Areas of the Ecrehos and Minquiers, 20 January 1951, 121 UNTS 97. The judgment was rendered by the Court on the 17 November 1953, ‘The Minquiers and Ecrehos case (France/United Kingdom), Judgment [1953] I.C.J. Reports 47 [“Miquiers and Ecrehos”]. 19  The case could be submitted to the Court only once the parties agreed on the creation of a temporary water management regime to remain in place until the end of the proceedings, see Special agreement for the submission to the International Court of Justice of the differences concerning the Gabcikovo-Nagimaros Project, 1725 UNTS 225, article 4. A temporary agreement on the water management regime was reached on 19 April 1995. It was thereby established that the system of joint management should last for 14 days after the pronouncement, see Agreement Concerning Certain Temporary Technical Measures and Discharges in the Danube and Mosoni Branch of the Danube. 20  In a similar vein, one may also cite the agreement found between Iceland, Denmark and Norway in the framework of the Jan Mayen case (Maritime Delimitation in the Area between Greenland and Jan Mayen, Judgment [1993] I.C.J. Reports 38 [“Jan Mayen”]). In this case, the parties found an agreement on allocation, protection and management of capelin stock in the waters between Greenland, Iceland and Jan Mayen. The agreement, initially to intended to remain in place for three years and then renewed for two more years, was crucial for reducing tension between the parties, especially seeing that the case had been initiated through a unilateral application by Denmark. See, Agreement between Greenland/Denmark, Iceland and Norway on the Stock of Capelin in the Waters Between Greenland, Iceland and Jan Mayen, 12 June 1989, 1448 UNTS 170. For more details on the agreement and its role in the dispute, see Schulte, Compliance with Decisions of the International Court of Justice, at 222.

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acting consensually, the parties can accept and execute the judgment; completely or partially depart from it; or take actions exceeding the obligation to execute it. On the contrary, lacking agreement, the losing State may contest the judgment, but finally act in accordance with it or, conversely, act inconsistently with it. In response to that, the winning State can, provided it wishes to take action, try to negotiate an alternative solution or seek to unilaterally enforce the judgment notwithstanding its wholesale rejection. Needless to say, the parties dispose of all the usual diplomatic means to reach an agreement, be that bilaterally, with the intervention of one or more third State(s)21 or of an international entity. Not surprisingly, most of the accessible practice falls under the first scenario, corresponding to compliance as classically understood. This explains the general optimism towards compliance records.22 In line with our previous remarks, the negotiation of implementation provisions and other similar clauses before adjudication has smoothened the process of ­execution, culminating either in the conclusion of a formal agreement23 or in other

 See particularly, mediation by the US Ambassador and the Australian Foreign Ministry in the context of the Preah Vihear case, Case Concerning the Temple of Preah Vihear (Cambodia v. Thailand), Judgment [1962] I.C.J. Reports 6 [“Preah Vihear”] and mediation of Algeria in the Hostages case (United States Diplomatic and Consular Staff in Tehran, Judgment [1980] I.C.J. Reports 3 [“Hostages”]. Third States may also contribute to implementation by providing financial support, as it happened for instance in the Frontier Dispute Burkina Faso/Mali when the operation of demarcation was financed by the Swiss government, see Azar, L’exécution des decisions de la Cour internationale de Justice, at 124. 22  For instance, Schulte speaks of “. . . a generally satisfactory compliance record for judgments”, see Schulte, Compliance with Decisions of the International Court of Justice, at 403. In a similar vein, though somewhat less optimistic, Paulson maintains that while “no State has been directly defiant five [judgments] have met with less compliance than others”, see Paulson, “Compliance with Final Judgments of the International Court of Justice”, at 437. 23  Implementation agreements were concluded relatively smoothly in several cases. In the North Sea Continental Shelf case, Germany concluded separate treaties of delimitation with the Netherlands and Denmark on 28 January 1971, see Treaty Concerning the Delimitation of the Continental Shelf Under the North Sea, Denmark – Federal Republic of Germany, 28 January 1971, 857 UNTS 109 and Netherlands – Federal Republic of Germany, 28 January 1971, 857 UNTS 131. In the Continental Shelf (Tunisia/Libya) case after the second pronouncement of the Court upon Tunisia’s request for interpretation, the parties reached an agreement implementing the pronouncement on 8 August 1988, see Jonathan Charney and Lewis Alexander eds., International Maritime Boundaries (Hague: Martinus Nijhoff, Vol II, 1993) 1663. In the Continental Shelf (Libya/Malta) case the parties found an agreement on delimitation on 10 November 1986, see Agreement implementing Article III of the special agreement and the judgment of the International Court of Justice, Libya-Malta, (1990) 81 ILM 726–727. In the Territorial Dispute (Libya/Chad) the parties were able to reach and implement an agreement soon after the pronouncement, see Agreement on the Implementation of the ICJ Judgment Concerning the Territorial Dispute, 4 April 1994, 21

164   Laurence Boisson de Chazournes and Antonella Angelini forms of official endorsement of the judgment.24 Exceptions to that are, for instance, the Arbitral Award and the Gabcikovo-Nagymaros cases. Whereas the diplomatic difficulties following the Arbitral Award pronouncement were eventually resolved,25 the same cannot be said for the GabcikovoNagymaros dispute. Negotiations have largely been unfruitful,26 for the changes in the political climate after the pronouncement have dwarfed the relevance of previous agreements concluded by the parties. Successful implementation agreements or other diplomatic actions have proved possible also in the absence of a pre-agreed framework for implementation.27 Executing the terms of a judgment, though, is not the only option of consensual follow-up existing in practice. At times, States have agreed either to depart from the terms of the pronouncement or to take action not strictly required by it. In truth, only in one instance – namely, in the Jan Mayen case – the parties have decided to slightly modify the terms of the judgment; on the contrary, States have more frequently taken efforts that exceed the obligation to execute the pronouncement. For instance, the Court’s Sovereignty Over

(1994) 33 ILM 619. For further details as to the implementation of the 1994 agreement, see infra, part 3, on the role of IOs. 24  For instance, in the Gulf of Maine case, the parties merely expressed their acceptance of the judgment, while a climate of mutual confidence was furthered by the entry into force of the Agreement on Fisheries Enforcement, making reference to the ICJ pronouncement, see Agreement on Fisheries Enforcement of 26 September 1990, 1852 UNTS 74. In the Frontier Dispute (Burkina Faso/Mali) case, the case was settled thanks to the nomination of the experts entrusted to demarcate the border between the two States. The Kasikili/Sedudu and the Benin/Niger pronouncement were followed-up by the official positions taken by certain members of the government and other official celebrations, see respectively, Kristof Maletsky, “Praise for Namibia on Kasikili” Africa News Service, 16 December 1999, Westlaw 25960463 and Adrien Feniou “Implementation of ICJ Border Ruling Finalises Demarcation of Benin-Niger Border” Global Insight Daily Analysis, 19 February 2007. 25  See infra, part 3, paragraph 3. 26  Llamzon, “Jurisdiction and Compliance in Recent Decisions of the International Court of Justice”, at 814–815. 27  For instance, in the Corfu Channel case (Corfu Channel Case (United Kingdom v. Albania) Judgment [1949] I.C.J. Reports 4 [“Corfu Channel”]), the UK and Albania concluded in 1992 a memorandum of understanding settling their outstanding differences, see Geoffrey Marston, “United Kingdom Materials in International Law 199” (1994) 63 BYIL 615, 781–782. In the Ambatielos case (Ambatielos Case (Merits: Obligation to arbitrate)), Judgment [1953] I.C.J. Reports, 10 [“Ambatielos”]) the parties easily negotiated an agreement on implementation, see Agreement Regarding the Submission to Arbitration of the Amatielos Claim, Greece – UK, 24 February 1955, 209 UNTS 187. In the Qatar v. Bahrain case (Maritime Delimitation and Territorial Questions Between Qatar and Bahrain, Merits, Judgment, [2001] I.C.J. Reports 40 [“Qatar v. Bahrain”]) the parties positively welcomed the judgment and took several steps of mutual collaboration afterwards, see Schulte, Compliance with Decisions of the International Court of Justice, at 239.

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Certain Frontier Land pronouncement catalysed new efforts in delimiting certain areas upon which the Court had not ruled, thereby settling points of future potential contrast between the parties.28 Another example is provided by the international agency created by Senegal and Guinea Bissau for the joint exploitation of a disputed maritime zone, part of which had made the object of the Arbitral Award ICJ decision.29 This initiative proved crucial for compliance for it allowed addressing certain vital economic aspects not comprised by the Court’s mandate. Other examples, though not of a purely inter-State character, can be found in the Land and Maritime Dispute (El Salvador/Honduras) as well as in the Pulp Mills case,30 which will be discussed when dealing with the role of IOs in implementation. Leaving aside the realm of consensual execution, on several occasions the judgments of the Court have been contested by one of the concerned parties. To be precise, it is prudent to distinguish between the cases in which the parties have formally protested against the judgment, but ultimately acted compatibly with it, from those in which the judgment has been rejected and the dispute finally settled otherwise than in the pronouncement. Under the first label, one may include the Hostages case inasmuch as the Algiers Accords – which provided a comprehensive framework for settling the Iran-US dispute – ultimately realized the actions indicated by the Court, even though the agreements hardly mentioned the pronouncement. On the contrary, not even a remote echo of the ICJ’s voice can be heard in cases of wholesale rejection, such as the Fisheries Jurisdiction, Nicaragua and, for a long period of time, Corfu Channel pronouncements. Against the refusal to engage in implementation, the concerned States have reacted differently. Attempts at enforcement were made in relation to the Corfu Channel and the Nicaragua pronouncements, respectively, through unilateral action and institutional mechanisms.31 In both cases, though, the overall political contingencies, added to the complete lack of cooperation on the side of the debtor State, made such attempts nugatory. On the contrary, a more successful attempt can be seen in the strategy of the UK regarding Iceland’s unwillingness to accept the Fisheries Jurisdiction decision. After several efforts at enforcement,

 Case Concerning Sovereignty Over Certain Frontier Land (Belgium/Netherlands), Judgment [1959] I.C.J. Reports, 209. 29  Arbitral Award of 31 July 1989 (Guinea Bissau v. Senegal) Judgment [1991] I.C.J. Reports 53 [“Arbitral Award (Guinea v. Senegal)”]. 30  Case Concerning Pulp Mills on the River Uruguay (Argentina v. Uruguay), Judgment [2010] I.C.J. Reports 14 [“Pulp Mills”]. 31  The details of the UK’s action are reported by Oschar Schachter, “The enforcement of International Judicial and Arbitral Decisions” (1960) 54 AJIL 8–12. As to the attempts of Nicaragua through the UN see below, paragraph 3. 28

166   Laurence Boisson de Chazournes and Antonella Angelini the UK desisted from further insisting on the pronouncement and concluded a provisional agreement ensuring at least part of the UK’s interests.32 In light of this global overview, a ‘diplomatic’ and a ‘juridical’ component seems to permeate the post-adjudicative phase. The prominence of the former stresses the relativity of the res judicata, whose content can be modified by the parties either fully consensually or as the result of a pragmatic accommodation of interests imposed by one party’s rejection of the pronouncement. Yet, this does not deprive the ‘juridical component’ of any relevance for implementation; rather it calls for reflection on its role in directing the process of dispute resolution. In this vein, the pronouncement first of all offers a sort of authoritative benchmark for measuring the legitimacy of each party’s claim during negotiations on implementation.33 Additionally, the commitment to abide by the judgment may help justifying certain actions likely to raise discontent domestically, thereby reducing the political costs of dispute resolution.34 Finally, with regard to implementation efforts going beyond compliance, the pronouncement can also provide a framework for diplomatic initiatives addressing the overall dispute between the parties. In this way, the ‘diplomatic component’ compensates for the partiality of the res judicata by embedding part of its content, or at least its spirit, in the settlement of aspects not adjudicated by the Court.35 Together, these factors bring to light the manifold nuances of implementation and suggest recalibrating our attention from the result of execution stricto sensu to the process of negotiation related thereto. From this perspective, implementation efforts are to be assessed not only in terms of

 For more details, see Schulte, Compliance with Decisions of the International Court of Justice, at 151–158. 33  Weckel, “Les suites des décisions de la Cour internationale de Justice”, at 435. The delimitation cases in which the Court is demanded to indicate the general principles to be used in negotiation, see particularly North Sea Continental Shelf, Continental Shelf (Tunisia/Libya), Continental Shelf (Malta/Libya). 34  Numerous are the examples in this respect: for instance, in the Kasikili/Sedudu case, see the declaration of the Namibian President in the early aftermath of the decision, Christof Maletsky, “Kasikili KO” The Namibian 13 December 1999, (1999) Westlaw 10594387; in Land and maritime boundary (Cameroon v. Nigeria) the parties soon after the judgment similarly declared their wish to comply with it, thereby cooling off an extremely tense confrontation, see United Nations Information Service, “Statement by the Secretary-General Kofi Annan following the Geneva meeting with Presidents of Cameroon and Nigeria”, UN Doc. SG/SM/8495 AFR/515, 15 November 2002. 35  A good example is provided by the mandate of the special commissions created in connection with the Arbitral Award and the Land and Maritime Boundary (Cameroon v. Nigeria) decisions. For more details, see below, Section B. 32

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c­ ompliance, but also of their effectiveness in resolving the dispute existing between the parties.36 First and foremost, a clarification as to the temporal aspect of implementation is in order. Length is probably one of the first aspects which springs to mind thinking about implementation. Burdensome and long negotiations easily lower expectations of effectiveness. Yet the length of negotiations in itself tells little if merely calculated from when the decision has been handed down. One needs, in fact, considering at which stage the pronouncement enters the relationship between the parties and, more generally, what is the broader legal context at the time of adjudication and after. In this vein, a pronouncement on a situation not sufficiently clear in its factual implications will most likely result in being hard to implement.37 The same could be thought of a pronouncement which touches upon legal issues subject to structural change: this state of fluctuation will probably reverberate in implementation, with the most extreme case being a pragmatic settlement different from the one decided by the Court.38 In addition, the effective resolution of a dispute depends on the straightforwardness of the Court’s pronouncement. Often, with a too open-ended pronouncement – take the Asylum/Haya de la Torre or the GabcikovoNagimaros pronouncements – the ‘juridical component’ has only marginally directed the expectations and claims of the parties. This having been said, one cannot but admit the contingent character of the very concept of effective resolution, as conflict over a certain issue can always resurge, notwithstanding any previous effective resolution thereof. The cause of these hurdles, though, often resides in a lack of means, rather than of will, on the part of the concerned States. Third parties can help mitigate this deficiency and therefore have a role in implementation. Effective implementation will then have to be assessed looking at actors other than States, notably IOs and the Court itself.  It is important to note that, according to certain authors, the very notion of execution could be stretched so as to comprise not only cases of compliance stricto sensu, but also cases in which a negotiated solution, though different from the one envisaged by the Court, has finally resolved the dispute, see for instance Azar, L’exécution des decisions de la Cour internationale de Justice, at 107–108. 37  Weckel, “Les suites des décisions de la Cour internationale de Justice”, at 439. 38  For instance, Fisheries Jurisdictions. As recalled, the law on fishing rights was undergoing a deep change at the time of adjudication. Several States had started establishing 200-mile fishery zones in the late 70s; incidentally, the EEC Council approved a resolution in this sense on 6 November 1976. This practice coalesced into an emerging consensus during the Third UN Conference on the Law of the Sea. For a more detailed account of practice, see, among others, R. S. Smith, Exclusive Economic Zone Claims: an analysis and primary documents (Hague: Martinus Nijhoff Publishers, 1986). 36

168   Laurence Boisson de Chazournes and Antonella Angelini B.  Institutional Actors and Their Support for Implementation Various institutional actors have occasionally intervened in the implementation of the ICJ judgments. Contrary to what one may think, IOs have for a long time been relatively timid in this respect. Emblematic is the case of the United Nations (UN), which has exhibited an inability to fully use the enforcement powers enjoyed by the Security Council under article 94(2) of the Charter.39 A more active involvement has proved possible with the abandoning of a purely enforcement optic, which hardly suits the flexible and largely consensual framework of implementation.40 IOs are, in fact, well-positioned to provide a framework for negotiation and cooperation, as well as to offer practical support for States engaged in implementation. The examples in this respect are numerous and concern both universal and regional IOs. As a framework for cooperation, IOs allow for reducing the costs of communication between the parties, thereby expediting the course of negotiations vis-à-vis implementation.41 In addition, IOs can be directly involved  Article 94(2) was invoked first by the UK after the indication of provisional measures in the Anglo Iranian Oil case (1951) and later after the Nicaragua decision (1986). Recourse to this article has also recently been threatened by Honduras in the Land and Maritime Dispute (El Salvador/Honduras). Honduras has in fact sent a letter to the SC alleging that El-Salvador had unduly delayed the pursuance of demarcation according to the judgment, see Letter dated 22 January 2002 from the Chargé d’Affaires ad interim of the Permanent Mission of Honduras to the United Nations Addressed to the President of the Security Council, UN Doc. No. S/2002/108. Other post-adjudicative phases have been on the agenda of the Security Council aside from Article 94(2): Right of Passage; Fisheries Jurisdiction; Hostages Case, Application of the Genocide Convention (Application of the Convention on the Prevention and Punishment of the Crime of Genocide, Preliminary Objections, [1996] I.C.J. Reports 595). On the ineffectiveness of Article 94(2), see among others, Llamzon, “Jurisdiction and Compliance in Recent Decisions of the International Court of Justice”, at 846–848; Attila Tanzi, “Problems of Enforcement of Decisions of the ICJ and the Law of the United Nations” (1995) 6 EJIL 539. Article 94 has been dormant also with respect to the execution of provisional measures indicated by the Court. In this respect, see Laurence Boisson de Chazournes, “Les ordonnances en indication de mesures conservatoires dans l’affaire relative à l’application de la Convention pour la prévention et la répression du crime de genocide” (1993) 39 AFDI 514, 537–538. 40  The unilateral character of enforcement measures clashes with the margin of appreciation left to the parties in the implementation of a judgment and an imposed solution, similarly to forced initiatives taken by one of the parties only, is unlikely to bring about effective compliance, especially inasmuch as domestic action is necessary to realize the judgment. In a similar vein, Weckel, “Les suites des décisions de la Cour internationale de Justice”, at 438. 41  For instance, a few months after the Pulp Mills pronouncement the parties succeeded in establishing a joint environment monitoring program to be pursued under the framework of the Administrative Commission of the River Uruguay (CARU). On the 30 of August 39

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in implementation, playing a role somewhat in between that of a conciliator and a mediator as regards the parties. Of this type, first chronologically is the intervention of the Organization of American States (OAS) in the context of the territorial dispute between Honduras and Nicaragua. Having followed the situation since its inception,42 the OAS, through its Inter-American Peace Committee, interceded in the post-adjudicative phase to help overcoming the stalemate in demarcation due to pending issues of nationality and of acquired rights.43 More recently, the UN ushured a similar intervention in connection with the Land and Maritime Boundary (Cameroon v. Nigeria) case.44 After the pronouncement, the UN Secretary General (SG) alertly convened a meeting with the parties.45 In that occasion, The Heads of States of the two countries decided to establish a mixed commission, principally in charge of implementing the judgment, but also competent for demarcating the land and maritime boundary and for protecting the rights of the populations affected by the verdict.46 Overall, the Commission met with good results on most questions,47 except the thorny one concerning Nigeria’s retreat from 2010, Argentina and Uruguay concluded an agreement fixing the guidelines for a joint monitoring regime over the River Uruguay, see Acuerdo Argentina-Uruguay: Intercambio de notas reversals. Directivas para el monitoreo conjunto de Botnia-UPM y el Rio Uruguay. Available at http://www.dipublico.com.ar/?p=6157 (last accessed 14 December 2011). This first agreement has been completed by a later agreement (15 November 2010) setting the details for the joint monitoring system, see Monitoreo del Río Uruguay: planes específicos de la Planta Orion, y de la desembocadura del Río Gualeguaychú en el Río Uruguay. Available at http://www.caru.org.uy/prensa.html (last accessed 14 December 2011). 42  The Council of the OAS became active on the situation since 1 May 1957, upon Honduras’s request. The AOS had appointed an investigation committee, which had been able to broker a cease-fire between the two States and had suggested to have recourse to the ICJ. For more details, OAS/OEA, Secretaría General, Tratado Interamericano de Asistencia Reciproca (1973) Vol. 1, 1948–59, 5th edn, 233–306. 43  The Committee proposed the constitution of a mixed commission, tasked to decide upon these and other related matters; all other residual issues fell under the competence of the Committee itself. The work of the Committee was successfully completed in 1963, with the complete retreat of Nicaragua from all the territories which had been attributed to Honduras and the demarcation of the land boundary between the two States. See, Schulte, Compliance with Decisions of the International Court of Justice, at 129–132. 44  Land and Maritime Boundary Between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea Intervening), Judgment [2002] I.C.J. Reports 303. 45  For a detailed account of the SG’s efforts, see Interview of Kofi Annan, Former Secretary General of the United Nations by Nicolas Michel in this volume. 46  The summit took place in Geneva on 15 November 2002. For the documents concerning the summit and the work of the Mixed Commission, see www.un.org//UNOWA (last accessed 14 December 2011). 47  For a detailed account of the achievements of the Commission, see M. M. Salah, “La Commission mixte Cameroun/Nigeria, un mécanisme original de règlement des différends interétatiques” (2006) LI AFDI 162.

170   Laurence Boisson de Chazournes and Antonella Angelini the Bekassi peninsula. This matter, in fact, could only be solved through a bilateral agreement finally concluded in 2006,48 also thanks to the climate of mutual trust nurtured by the Commission. In both these cases, the diplomatic initiatives taken in the post-adjudication period went beyond compliance, with the aim of resolving certain issues crucial to extinguishing the respective disputes. In truth, these points could hardly have made the object of adjudication strictly speaking; it suffices to think about the question of nationality, or that of straddling villages and the relocation thereof. On the contrary, reliance on diplomatic means seemed more promising. Interestingly, the means produced for smooth implementation exhibit certain hybrid traits if compared with the classical means of diplomatic dispute settlement. For instance, in the Land and Maritime Boundary (Cameroon v. Nigeria), the UN acted more pervasively than a conciliator, but lacked the complete freedom of a mediator, since negotiations had to be carried in accordance with the ICJ judgment and of international law in general. This hints at the mutual supportiveness between the ‘juridical’ and the ‘diplomatic’ component. While the decision of the Court provides a framework of reference, diplomatic negotiation is necessary to handle issues which could be detrimental for the efficacy of the pronouncement. The presence of IOs reduces the costs of cooperation, correlatively making free-riding or defection by one party more burdensome. This is important in the first stages of interaction, especially if there is a lack of mutual trust between the parties. In addition to supporting negotiation, IOs have also supplied financial and logistical assistance. A few, yet quite articulated, standing financing mechanisms exist both at the universal and the regional level. The most prominent one is the UN Trust Fund, established in 1989 to ensure financial support for States bringing a dispute before the ICJ on a consensual basis.49 A financing  Green Tree Agreement, concluded the 12 June 2006 between Nigeria and Cameroon. For an assessment of the overall situation after the conclusion of the agreement, see Mashood Issaka and K. Y. Ngandu, “Pacific Settlement of Border Dispute: Lessons from the Bekassi Affair and the Green Tree Agreement. Meeting note” Pacific Settlement of Border Dispute: Lessons from the Bekassi Affair and the Green Tree Agreement in ed. Adam Lupel (International Peace Institute, 2008), 1–7. On 11 March 2010 the parties have also concluded an agreement for the joint development of several oil and gas fields located along their maritime boundary south of the Bakassi peninsula, see Chika Amanze-Nwachuku, “Nigeria, Cameroon Plan Joint Oil Exploration in Bakassi” This Day Live.com, 14 March 2011; Emmanuel Tumanjong, “Addax Petroleum likely candidate for Cameroon, Nigeria, oil deal” Dow Jones Newswires, 13 March 2011. 49  The Terms of Reference, Guidelines and Rules are annexed to the report: SecretaryGeneral’s Trust Fund to Assist States in the Settlement of Disputes through the International Court of Justice: Report of the Secretary-General, 7 October 1992, UN Doc. A/47/444. The terms of reference have been revised in 2004, see Secretary-General’s Trust Fund to Assist 48

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from the Fund can be demanded to cover the costs sustained either during the proceedings or in the implementation of the judgment, for instance, in the demarcation of boundaries. Unfortunately, very few demands have been addressed to the Fund.50 Yet this has not discouraged the AOS from setting up a similar mechanism at the regional level.51 Differently than the UN twin, the AOS Peace Fund can be utilized only for delimitation cases, to provide either financial or technical support – the latter through the Pan-American Institute of Geography and History. Up to now, the Fund has sponsored implementation activities only in the Land and Maritime Dispute (El Salvador/Honduras). Passing on to a more political kind of assistance, a rather unique example is that of a UN observer mission – UNASOG – created to monitor the withdrawal of Libyan troops from the Aouzou Strip.52 A UN presence to act with a joint team of officials from both countries had already been envisaged in the Agreement concluded by the parties to assure compliance with the judgment. Acting upon this basis, the SG had proposed the deployment of an observer unit, to remain in place until Libya’s complete withdrawal from the Aouzou Strip.53 Quite tellingly, the creation of UNASOG is the only instance in which a UN political organ has taken action in view of facilitating implementation. The failure to take enforcement actions as envisaged by the Charter has turned into a deadlock for political organs. Particularly regrettable is, in this respect, the AG’s inability to exploit creatively the broad powers entrusted to it by Article 10 of the UN Charter. While IOs have variously contributed to implementation, the ICJ has also not completely abstained from the implementation process. The Court, while at times recalling the parties’ obligation to execute its judgments,54 has refrained from indicating the means of implementation, since doing so States in the Settlement of Disputes through the International Court of Justice: Report of the Secretary-General, 21 September 2004, UN Doc. A/59/372. 50  Qatar v. Bahrain Territorial dispute (Qatar v. Bahrain), Frontier Dispute (Benin/Niger). 51  The Permanent Council of the OAS has adopted the guidelines for the Fund for Peace on the 13 November 2000. See OAE/Ser.G CP/INF 4453/00, available at http://www.oas.org/ consejo/Docs/cp07664e04.doc (last accessed 14 December 2011). 52  Security Council Resolution 915 of 4 May 1994. 53  Report Concerning the Agreement on the Implementation of the ICJ Judgment Concerning the Territorial Dispute Between Chad and Libya, 27 April 1994, UN Doc. S/1994/512. 54  For instance in the Frontier Dispute (Burkina Faso/Mali), 649, § 178. Incidentally, also the Permanent Court of International Justice had recalled the obligation to execute its pronouncements, see for instance The ‘Societé Commerciale de Belgique’, Judgment [1939] P.C.I.J. Reports, Series A/B 78, at 176. It is important also to recall that, according to Article 61 of its Statute, the Court “may require previous compliance with the terms of the judgment before it admits proceedings in revision”.

172   Laurence Boisson de Chazournes and Antonella Angelini ‘[w]ould depart from its judicial function’.55 Such reluctance notwithstanding, the Court has indeed played a role in the context of implementation. To begin with, the parties themselves have occasionally bestowed upon it certain tasks in implementation.56 Additionally, the Court has also called upon the parties to undertake negotiations – whether by asserting an explicit obligation or by merely recommending to do so – in view of implementing its pronouncement. As it appears, any actual involvement in implementation is down to the will of the parties and is, therefore, subject to their own strategy for dealing with potential threats against compliance. Instead, the Court’s motu proprio reference to diplomatic means hints at a different way of supporting the latter process. When referring to negotiations, the Court has indeed provided clues as to the content thereof. This is, admittedly, nothing special if the parties are found to have a legal obligation to undertake negotiations or other forms of diplomatic cooperation and the Court expounds on the general principles relevant thereto.57 On the contrary, less orthodox is the case of recommendations indicating some sort of practical approach to be sought during negotiations58

 Haya de la Torre. There the Court stated that it was ‘unable to give any practical advice as to the various courses which might be followed with a view to terminating the asylum, since, by doing so, it would depart from its judicial function.’ Haya de la Torre, 83. See also B. A. Ajibola, “Compliance with Judgments of the International Court of Justice”, Compliance with Judgments of the International Courts, in eds. Mielle Bulterman and Martin Kuijer (Hague: Martinus Nijhoff Publsihers, 1995), at 9, 12. 56  In the Continental Shelf (Tunisia/Libya) case, the parties had agreed–under Article 3 of the Special Agreement – to return to the Court for binding clarifications if they had not been able to reach an agreement within three months from the decision. In the Frontier Dispute (Burkina Faso/Mali), the parties had asked the Court to nominate three experts to assist them in the operation of demarcation, see article IV of the special agreement conferring jurisdiction upon the Court. Finally, in the Gabcikovo-Nagimaros case, the parties had agreed that, were they to fail in finding agreement within six months from the decision, “either Party may request the Court to render an additional judgment to determine the modalities for executing its Judgment”, see Article 5(3) of the Special Agreement. 57  See, for instance, North Sea Continental Shelf, at 47–48, §§ 85–86; Fisheries Jurisdictions, at 34–35 (UK) and 205–206 (FRG); Maritime Delimitation (Nicaragua v. Honduras), at 763, § 321. In a similar vein, see also Pulp Mills, at 70, § 281, referring to the parties’ obligation to cooperate under CARU. 58  See particularly, Gabcikovo-Nagimaros, 81, § 153. In a similar vein, even though not in an order on provisional measures, see also Great Belt case, Case Concerning Passage Through the Great Belt (Finland v. Denmark), Provisional Measures, [1991] I.C.J. Reports 19, at §§ 31, 34. Alternatively, the Court refused to provide any practical indication as to the content of the recommended negotiation in the Haya de la Torre case, see particularly at 83. 55

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or exhorting one or both parties to take a certain course of action.59 The latter approach has been criticized by some for being extraneous to the Court’s judicial function.60 Moreover, the Court’s tendency to recommend and, eventually, seek to influence negotiations raises a question of judicial strategy: why and when should the Court adopt such a course of action? First and foremost, it is important to recall that this somewhat ‘transactional’ logic has always featured alongside the more classical logic of ‘juris dicere’; in other words, the pragmatic solutions proposed by the Court have added to, rather than superseded, the legal findings made by it. This suggests a stratification of goals in the Court’s approach towards its function at the international level and, more precisely, interplay between the goal of effectively resolving a certain dispute and that of laying down the law. In the latter respect, it has been noticed that the Court tends to lay more emphasis on either objective according to the context of adjudication: if it perceives that the terms of its own pronouncement may spur further frictions between the parties or that its findings fall short of addressing some relevant aspects of the dispute at stake, it will likely be proactive in directing the course of post-adjudication.61 This suggests the Court may engage in ‘preventive’ or ‘remedial’ diplomacy.62 Diplomatic means are, in fact, invoked either to prevent new differences arising or to somehow remedy the Court’s inability to address and resolve certain important aspects of the dispute, be that because of its limited competence or because the applicable law was in flux.

 In Land and Maritime Boundary (Cameroon v. Nigeria) the Court took note “of the commitment undertaken by the Republic of Cameroon [. . .] ‘faithful to its traditional policy of hospitality and tolerance’ ”. This formulation has not passed unnoticed in doctrine for being quite unusual, since the Conclusions of the Parties were silent on this issue. Hélène Ruiz-Fabri and J. M. Sorel, “Chronique de jurisprudence de la CIJ (2002)” (2003) 134 JDI 858, at 886. 60  On the negative side, Gerald Fitzmaurice, The Law and Procedure of the International Court of Justice (Cambridge University Press 1993), at 558. Also commenting on the ‘persuasive’ role of this sort of recommendations, see Brigitte Stern, 20 ans de la jurisprudence de le Cour internationale de Justice (1975–1994) (Hague: Martinus Nijhoff, 1998), at 591. 61  Azar, L’exécution des decisions de la Cour internationale de Justice, at 127. In this respect, see also the remarks of Georges Abi-Saab, “De l’évolution de la Cour internationale: Réflexions sur quelques tendances récentes” (1992) 96 RGDIP 273, at 291–293. 62  As to the role of the function of ‘preventive diplomacy’ exercised by the Court, see also Judge Jennings with regard to the Great Belt case; Robert Jennings, “Speech made on the 15 October 1993 at the 48th session of the General Assembly” ICJ Yearbook 1992–1993, at 265. 59

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III.  Overlapping Layers: The Institutional and Relational Dimensions of the Implementation of ICJ Advisory Opinions While much has been said about the nature of the advisory competence of the ICJ, implementation is a less discussed topic among international lawyers.63 Yet it has been noticed that the implementation of AOs is a “field where the Court’s suasion powers face an even greater test”64 than in the case of judgments. And understandably so, since AOs insert within the institutional framework of an IO a ‘juridical component’ which, while generally lacking binding force,65 nonetheless entail a full-fledged legal ascertainment akin to that exercised by the Court under its contentious jurisdiction.66 As such, AOs may bear upon the legal situation not only of the requesting organ, but also of the Member States of the organization qua individual subjects or of nonMember States, depending on the particular demand. For the purposes of implementation, this means that AOs could trigger action by a handful of subjects, with the risk of further blurring what should be followed-up. To mitigate this hurdle, one should focus on the web of legal interests involved at the ‘institutional’ as well as at the ‘relational’ level of the life of IOs.67 Starting from the position of the requesting IO as the initial point of reference, two main scenarios are possible. The requesting IO can either have a direct interest in the question posed by the Court – because

 Implementation is only sparingly mentioned in certain studies about compliance with ICJ decisions, see E. K. Natwi, The Enforcement of International Judicial Decisions and Arbitral Awards in Public International Law (Sijthoff-Leyden 1966), at 159–162; Jonathan Charney, “Disputes Implicating the Institutional Credibility of the Court: Problems of Non-Appearance, Non-Participation and Non-Performance” The International Court of Justice at a Crossroads, in ed. L. F. Damrosch (New York: Transnational Publishers 1987), at 297–299. 64  Cesare Romano, “General Editors’ Preface”, in Schulte, Complicance with Decsions of the International Court of Justice, at viii. 65  In certain cases, notably in headquarters agreements or in general instruments setting forth the privileges and immunities of the UN or of its specialized agencies, the AO given by the ICJ is binding upon the parties. On this topic, see Roberto Ago, “The ‘Binding’ Advisory Opinions of the International Court of Justice” (1991) 85 AJIL 439. 66  Among others, Benvenuti, L’accertamento del diritto mediante i pareri consultivi della Corte internazionale di giustizia and Michla Pomerance, The Advisory Function of the International Court in the League and U.N. Years, as well as Mahasen Aljaghoub, The Advisory Function of the International Court of Justice 1946–2005 (Springer, 2006). It is important to recall that a similar position had already been taken by the Permanent Court of International Justice (PCIJ) in its Eastern Carelia pronouncement, Status of Eastern Carelia, Advisory Opinion [1923] P.C.I.J. Reports, Series B, No. 5, at 29. 67  For this classical distinction, see in general R. J. Dupuy, La Communauté internationale entre le mythe et l’histoire (Economica/UNESCO, 1986), at 41. 63

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the conduct of one of its organs is at stake68 or because it holds a right or an obligation towards one or more of its member States69 – or it can be a ‘third party’ where the legal ascertainment by the Court has no direct bearing on the IO, but touches upon the legal position of its member States or of nonmember States.70 Why are these different scenarios likely to impact on implementation? Fundamentally, because they allow for the prediction of its main dynamics, particularly as far as the potential role of the institutional machinery of .

 For instance, Admission of a State to the United Nations (Charter, Art. 4), Advisory Opinion [1948] I.C.J. Reports 57 [“Admissions”]; Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion [1949] I.C.J. Reports 174 [“Reparations”]; Competence of the General Assembly Regarding Admission to the United Nations, Advisory Opinion, [1950] I.C.J. Reports 4 [“Competence”]; Reservations to the Convention on Genocide, Advisory Opinion, [1951] I.C.J. Reports 15 [“Reservations”]; Effect of Awards of Compensation Made by the U.N. Administrative Tribunal, Advisory Opinion, [1955] I.C.J. Reports 47 [“Effect of Awards”]; South-West Africa-Voting Procedure, Advisory Opinion, [1955] I.C.J. Reports 67 [“Voting Procedure”]; Admissibility of Hearings of Petitioners by the Committee on South-West Africa, Advisory Opinion [1956] I.C.J. Reports 23 [“Admissibility of Hearings”]; Judgments of the Administrative Tribunal of the ILO Upon Complaints Made Against the UNESCO, Advisory Opinion, [1956] I.C.J. Reports 77 [“ILO Tribunal”]; Constitution of the Maritime Safety Committee of the Inter-Governmental Maritime Consultative Organization, Advisory Opinion, [1960] I.C.J. Reports 150 [“Maritime Committee”]; Certain Expenses of the United Nations (Article 17, paragraph 2, of the Charter), Advisory Opinion, [1962] I.C.J. Reports 11 [“Certain Expenses”]. 69  International Status of South-West Africa, Advisory Opinion, [1951] I.C.J. Reports 128 [“South West Africa”]; Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt, Advisory Opinion, [1980] I.C.J. Reports 73 [“WHO-Egypt”]; Applicability of the Obligation to Arbitrate under Section 21 of the United Nations Headquarters Agreement of 26 June 1947, Advisory Opinion, [1988] I.C.J. Reports 12 [“PLO Mission”]; Applicability of Article VI, Section 22, of the Convention on the Privileges and Immunities of the United Nations, Advisory Opinion, [1989] I.C.J. Reports 177 [“Mazilou”]; Difference Relating to Immunity from Legal Process of a Special Rapporteur of the Commission on Human Rights, Advisory Opinion [1999] I.C.J. Reports 62 [“Immunity from Jurisdiction”]. 70  Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) Notwithstanding Security Council Resolution 276 (1970), Advisory Opinion [1971] I.C.J. Reports 16 [“Namibia”]; Western Sahara, Advisory Opinion, [1975] I.C.J. Reports 12 [“Western Sahara”]; Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, [1996] I.C.J. Reports 226 [“Nuclear Weapons”]; Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, [2004] I.C.J. Reports 136 [hereafter, Wall]; Accordance with International Law of the Unilateral Declaration of Independence in Respect of Kosovo, Advisory Opinion, [2010] I.C.J. Reports [hereafter, Kosovo]. A case sui generis is that the Peace Treaties AO: although the main dispute concerned certain UN and non-UN members, the SG might also have played a role (under item III of the question posed by the GA), thus entailing an institutional component of follow-up; see Interpretation of Peace Treaties (second phase), Advisory Opinion [1950] I.C.J. Reports 221 [“Peace Treaties”]. 68

176   Laurence Boisson de Chazournes and Antonella Angelini the IO is concerned. Indeed, when the requesting IO has an interest of its own in the AO, implementation will primarily take place – and be shaped by – the institutional dimension. On the one hand, in fact, the ascertainment made by the Court will identify the law applicable to a situation where the organization is directly concerned, e.g. saying whether a certain conduct is legal or not, or whether a certain right exists or not. On the other hand, the organization will be able, through its institutional machinery, to take some autonomous action. The AO can fully be complied with, since the requesting organ can either decide to take certain implementing actions itself or it can prompt another organ(s) to do so. Somewhat different, though, is the situation of quasi-contentious cases, i.e. those in which the organization holds a right or an obligation vis-à-vis its member States. The presence of one or more individual States with their own interests calls for a focus on both the institutional and the relational dimension, since action or inaction could take place at any of them, and it is the interplay between the two that will finally shape implementation. The ‘duality’ inherent in the position of States within an IO – being as they are both members of the IO and independent subjects – is even more prominent in the implementation of AOs which do not determine either the legality of a conduct of the organization, or the existence of a right or an obligation of its own. This situation is different from the previous one in two main respects. First, the AO will not per se have binding force for the requesting IO, simply because the Court’s legal ascertainment will not concern – at least not immediately – its legal position. This means, in turn, that the AO will entail some form of obligation for the organization only if the organization upholds, acknowledges or decides to act according to the pronouncement. Secondly, and even more importantly, the IO will not have the capacity to autonomously ensure compliance, some forms of action always being necessary on the part of one or more individual States. In other words, whereas the IO can take steps towards implementation, the effectiveness thereof will ultimately depend on the independent initiatives of the member States. In similar situations, one may expect the relational and the institutional aspect to be deeply entrenched with one another, up to the point of diluting implementation in the continuous relationship between the institutional machinery of the IO and its member States qua individual subjects. Having this framework in mind, we will first look at the main features of implementation at each of these two dimensions in turn. A rich and eminently institutional implementation practice will be brought to light, challenging the common skepticism about the implementation of AOs. Again, this hints at a new perspective to assess the effectiveness of IOs beyond stricto sensu compliance.

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A.  Implementation of Advisory Opinions at the Institutional Dimension: An Engine for Change The organs requesting an AO have always taken action in relation to the Court’s pronouncement – mainly in the adoption of resolutions endorsing it.71 The conduct of the other organs of the IO, on the contrary, demonstrate a less uniform pattern. Accordingly, implementation at the institutional level will result more or less effective depending on the specific features of such a dynamic. In light of the organic structure of IOs, one can envisage three types of relations: between political organs, between a political and an administrative organ and, finally, between a political and a judicial organ. Not surprisingly, the relation between political organs allows little room for generalization, since the orientations respectively prevailing in the concerned organs are not necessarily unanimous towards the AO. This is why, in the chain of actions related to the AOs, examples of mutual support come along with instances of disguised avoidance. For instance, a collaborative approach underpinned the implementation of the Namibia AO. Not only the SC and the GA upheld and took prompt follow-up actions, but they also showed support for each other’s initiatives taken before and immediately after the pronouncement.72 Noteworthy, this collaboration proved lasting, as witnessed by the numerous cross references to be found in the relevant  The requesting organs have for instance: taken note of the AO in Admissions (GA Res. 197 A and B of 8 December 1948 also “recommending that each member of the GA and the SC ‘should act in accordance with the advisory opinion)’, Interpretation of Peace Treaties (GA Res. 385 of 3 November 1950), Reservations (GA Res. 598 of 12 January 1952), PLO (GA Res. 43/232 of 13 May 1988) and Nuclear Weapons (GA Res. 51/45 M of 10 December 1996); taken note with satisfaction in Western Sahara (GA Res. 3458 of 10 December 1975); Namibia (in the latter also “sharing” the position of the Court) (SC Res. 301 of 20 October 1971); welcomed the AO in Mazilu (ECOSOC Res. 1990/43 of 25 May 1990); expressed appreciation in Immunity from Jurisdiction (ECOSOC Res. 1999/64 of 30 July 1999); accepted in Certain Expenses (GA Res. 1854 A (XVII) of 19 December 1962); accepted and urged action to give effect to the AO in Status of South West Africa (GA Res. 449 A–B V of 13 December 1950); acknowledged and called upon member States to act according to the AO in Wall Case (GA Res. ES-10/15 of 2 August 2004); accepted in principle and created organs to study the subject matter in Effect of Awards (Res. 888 of 17 December 1954); authorized action of other organs in accordance with the AO in Reparations (GA Res. 365 (IV) of 3 December 1949), Wall Case (GA Res. ES-10/15 of 2 August 2004); adopted and endorsed in Voting Procedures (GA Res. 934 of 3 December 1955), Admissibility of hearings (GA Res. 1047 of 23 January 1957); in one case it has not mentioned the AO but recommended action in conformity with it: Competence of the GA (495 V of 4 December 1950). 72  The SC first adopted resolution 301 (1971), which endorsed the AO, dictated a number of binding measures in line with the obligations set forth in the AO, and further recalled GA previous resolution 2145 (XXI) to complete the legal regime envisaged by the Court, see §§ 5–6, 11 and 12 of SC Res. 301 of 20 October 1971. 71

178   Laurence Boisson de Chazournes and Antonella Angelini GA and SC resolutions expressly following-up the AO.73 An effective dialogue between the two political organs has not always taken place. In the situation leading to the Admissions and the Competence AOs the Council simply ignored the GA’s recommendations for implementation,74 implicitly exercising its power of auto-interpretation so as to reject the GA’s own interpretation of the AOs. At times, the Council failed to act upon certain pronouncements – the Western Sahara, Nuclear Weapons and Wall AOs being good examples – notwithstanding their relevance for peace and security issues.75 Predictably, a lack of any clear strategy has either delayed the resolution of the organs’ differences in views motivating the recourse to the Court,76 or weakened the institutional response to those pronouncements touching upon inter-State issues. Yet this has not meant a complete paralysis of political organs. Both or at least one of them have taken independent steps  After 1971, the SC made several references to the AO; see particularly SC Res. 323 of 6 December 1972, 366 of 17 December 1974. The SC also attempted a diplomatic strategy, through the mediation of the SG, to implement the AO, SC Res. 309 of 4 February 1972. The GA, for its part, reiterated its reference to the AO in GA Res. 3295 (XXIX) of 13 December 1974. This latest resolution, as well as Res. 3399 (XXX) of 26 November 1975, are referred to in SC Res. 385 of 30 January 1976, which contains the last express reference to the ICJ AO (the last resolution on the situation in Namibia was adopted in 1989, SC Res. 643 of 31 October 1989). 74  In this context, the SC failed to act according to the GA’s recommendation for implementation. In the case of the Admissions AO, the Council referred to the AO during its 444th and 445th meeting of 15 and 16 September 1949, but did not endorse the pronouncement nor the legal view previously expressed by the GA in its Res. 197 A and B (III) of 8 December 1948 and 296 K (IV) of 22 November 1948; see Repertoire of Practice of the Security Council (1946–1951), Chapter VII, 285–286. Concerning the Competence AO, the Council neither acted upon the GA invitation to recommend new members nor referred to the pronouncement. 75  The failure to act upon the pronouncement is not to be taken as total neglect. The Council, in fact, at times made reference to several of the cited AOs during its meetings. For instance, after the Western Sahara AO, the SC held several meetings in connection with the ‘green march’ into Western Sahara announced by King Hassan II of Morocco. During such meetings, both Spain and Morocco relied on the AO to support their opposite claims. The Council adopted three resolutions with respect to the ‘green march’ crises; none of these, though, make reference to the AO; see United Nations Yearbook (1975) 178–181. Also the Wall AO was mentioned during a number of SC meetings (the 5019th and 5039th meetings of 11 August and 17 September 2004 and the 5230th meeting of 21 July 2005) for calling upon Israel to abide to its obligations under the AO; see Repertoire of Practice of the Security Council, 15th Supplement Chapter VIII (2004–2007) at 10, 23. 76  This applies particularly to membership cases. The GA repeatedly referred to the Admissions AO to support its position as to the criteria for admission (see particularly, GA Res. 506 (VI) of 1 February 1952). None of its attempts proved successful and the stalemate on this issue could only be resolved in 1955, with a package admission, contrary to the letter of the Admissions AO. 73

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in furtherance of the cited AOs or otherwise referred to them. For instance, the GA created monitoring procedures,77 in charge of certain aspects of follow-up,78 and eventually established a diplomatic channel with regional actors to counter resistance over implementation.79 Alternatively, the relationship between the political and the administrative organs of the requesting IO has consistently proven successful. Most of the resolutions adopting an AO foresee some form of action by the Secretariat or the highest administrative body of the concerned IO, and this has been the gateway par excellence to realize acts of stricto sensu compliance.80 The conferral of implementation tasks to administrative bodies has not only obviated the limited operational capacity of political organs, but also made the process of follow-up receptive to changes in the political context surrounding a pronouncement. The practice of the UN offers broad evidence of this.­

 For instance, since 1996, the GA has regularly included the item ‘Follow-up to the advisory opinion of the International Court of Justice on the Legality of the Threat of Nuclear Weapons’ in its agenda. This item was first included through GA Res. 51/45 of 10 December 1996, Item M, § 6, in which the Court urged the initiation of multilateral negotiations for the conclusion of a “nuclear-weapons convention prohibiting the development, production, testing, deployment, stockpiling, transfer, threat or use of nuclear weapons and providing for their elimination” (§ 4). 78  A good example of these kinds of follow-up actions is the Registry for Damages established in connection with the Wall AO (see GA Res. ES-10/15 of 15 August 2004 and A/ES-10/L.20 of 16 December 2006). 79  For instance, the GA invited the Organization of African Unity to take action to find an equitable settling of the question of Western Sahara and to report the results to the UN SG, see Res. 33/31 of 13 December 1978, at §§ 3, 5. 80  The joint action of a political and an administrative organ has enabled compliance with the following pronouncements: Reparations (in Res. 365 (IV) of 3 December 1949 the GA authorized the SG to ask for compensation and to negotiate with the national States of the victims to avoid overlapping claims. The SG acted accordingly, asking compensation for the death of Count Folke Bernadotte and negotiating with France the damages to be claimed for the death of certain French citizens involved in the incident; see United Nations Yearbook (1950) 864–865); Reservations (the SG changed his prior practice as depositary of the Genocide Convention in accordance with the AO, as envisaged in GA Res. 598 of 12 January 1952); Effect of Awards (the GA accepted in Res. 888 of 17 December 1954 to establish, inter alia, a fund for special indemnity under the administration of the SG, who acted accordingly); ILO Tribunal (the UNESCO Executive Board authorized the Directorgeneral to pay the awards granted by the ILO Tribunal at the New Delhi Session of 1956, UNESCO 45 EX/Decisions, 14, item 11.1). See also Interpretation of Peace Treaties: whereas the SG refrained from creating a Treaty Commission without the members appointed by Bulgaria, Hungary and Romania, in accordance with the AO, the concerned States did not comply with their obligation to appoint such members, so that the AO was only partially complied with. 77

180   Laurence Boisson de Chazournes and Antonella Angelini It suffices to think of the negotiating powers81 and information gathering competences often given to the SG,82 not to mention the more complex follow-up mechanisms occasionally set up by the GA.83 The margin of discretion left to administrative organs has thus made up for the necessarily limited scope of the Court’s legal analysis by placing the pronouncement within the operational milieu of the organization. Against this backdrop, the relationship between the political organs of the requesting IO and the Court is open to numerous observations.84 One may wish to focus on the reasons underlying the recourse to the Court’s advisory competence,85 to discuss the appropriateness of AOs when political organs lack a shared intention to act in accordance with them or notwithstanding the prospect of having a marginal impact upon a situation through implementation, and so forth. Yet, considerations of the latter kind tend to perceive the Court somewhat indirectly, neglecting its potential role as a player in the phase of implementation. This is why we will leave these aspects aside, while concentrating on the dynamic interaction between the political organs of the requesting IO and the Court. Interestingly, political organs have, inter alia, asked for advice on the legality of certain practices taken in the follow-up to previous AOs. This has allowed the Court not only to enter more profoundly into the life of the requesting organization, but also to address certain fundamental issues of international law outside of its contentious competence. The  See, for instance, GA Res. 365 (IV) of 3 December 1949, § 2 (Reparations); GA Res. 1059 of 26 February 1957, §§ 1–3 (South West Africa); GA Res. 2871 of 20 December 1971, §§ 16–20 and SC Res. 309 of 4 February 1972, § 1 (Namibia); GA Res. 3458 of 10 December 1975, § 8 (Western Sahara). Negotiating powers have also been attributed to ad hoc entities, such as the Committee on South West Africa (GA Res. 749 (VIII) of 28 November 1953, § 13) and also to States, see below in this section, § 3. 82  For instance, GA Res. 51/45 M of 10 December 1996 mandated the SG to collect information on MS efforts in the field of nuclear disarmament. 83  For instance, see the Special Indemnity Fund created under GA Res. 888 of 17 December 1954, § 7 (Effect of Awards AO) or the Registry for Damages which is to be managed by a special office, under the authority of the SG; see GA Res. A/ES-10/L.20 of 16 December 2006 (Wall AO). 84  We will not consider specifically the relationship between judicial organs. It suffices to mention that the Court has issued several AOs reviewing the judgments of the UN Administrative Tribunal, always upholding the judgments of the Tribunal; see Application for Review of Judgment No. 158 of the United Nations Administrative Tribunal, Advisory Opinion, [1973] I.C.J. Reports 166; Application for Review of Judgment No. 273 of the United Nations Administrative Tribunal, Advisory Opinion, [1982] I.C.J. Reports 325; Application for Review of Judgment No. 333 of the United Nations Administrative Tribunal, Advisory Opinion, [1987] I.C.J. Reports 18. 85  For commentary on this point, Rosalyn Higgins “A comment on the current health of Advisory Opinions”, Fifty Years of the International Court of Justice in eds. Vaughan Lowe and Malgosia Fitzmaurice (Cambridge University Press 1996), at 567–579. 81

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requests made by the GA in connection with the situation in South Africa well illustrate this point. The first of such requests provided the occasion to frame the powers of the UN under the system of mandates (1950), while the second and third requests (1955–1956) enabled the endorsement of certain UN practices stretching the organization’s powers beyond the pre-Charter framework, while through the last request (1970) the Court could lay down the main features of the right of self-determination and of the UN powers related thereto.86 As it appears, the follow-up to AOs has been an engine for change in the functioning of the requesting organization vis-à-vis its member States and non-member States. On the one hand, the process of implementation has triggered the development of new practices;87 while on the other hand, it has paved the way for certain contested practices to fully enter the organization’s modus operandi once having received the imprimatur of legality by the Court. It is noteworthy that the requesting organs have routinely relied on AOs to counter the resistance of recalcitrant third States. So, in the context of the South-West Africa dispute, the GA referred to the relevant AOs to sustain the legality and opposability of certain of its (somewhat dubious) conduct, i.e. simple majority voting, hearings of individual petitions sine altera parte, unilateral termination of the mandate agreement without consulting South Africa.88 Additionally, the availability of a flexible institutional machinery has enabled follow-up actions tailored to the broad factual context of a pronouncement. Often, this has ended up ‘blurring’ implementation in the continuum of the organization’s policy towards a given issue. For instance, the GA inserted compliance with the Namibia AO within a broader programme of action, comprising the appointment of an adhoc committee tasked to review member States’ treaties with South Africa that were potentially incompatible with the AO. Similarly, on the basis of the Nuclear Weapons AO, the GA established within its first Committee an annual session on the  In chronological order, Status of South West Africa, Voting Procedure, Admissibility of Hearings, Namibia. 87  Several more examples could be cited. After the Reparations AO, the SG developed a series of principles for the exercise of functional protection by the UN, see Report A/1347 presented to the Fifth Session of the GA of 1950 (summarized in the United Nations Yearbook (1950) 863–864); following the Reservations AO, the SG modified his previous practice of the SG as depositary of the Genocide Convention; in connection with the South WestAfrica AO, the GA created an ad hoc committee (GA Res. 570 A (VI) of 19 January 1952, later ‘Committee on South Africa’) with the task of receiving reports and petitions from the territory (GA Res. 749 (III) of 28 November 1953, §§ 12–13). 88  Similarly, in connection with the PLO AO, the I.C.J. endorsed the SG’s previous finding as to the existence of a dispute in the application of the headquarters agreement. 86

182   Laurence Boisson de Chazournes and Antonella Angelini progress made towards the abandonment of nuclear weapons, including the review of the engagements made by States under regional as well as universal negotiating fora.89 As it appears, AOs have played in the life of IOs a role far beyond the mere clarification of the applicable law. The phase of follow-up has spurred a cross-fertilization process among organs, leading both to the confirmation of practice taken before the request and to the development of completely new ones. B.  The Relational Dimension in the Implementation of ICJ Advisory Opinions A pronouncement of the Court inevitably sparks interest among the Member States of the requesting organization. Complete neglect is hardly an option available for any of them, no matter what their specific legal interest in the context might be. Owing to the authoritative position of the Court, its voice will most probably trigger some sort of reaction, be it acceptance or contestation, in its most immediate audience, i.e. member States of the IO’s organs. For this same reason, a position of complete rejection will be strategically burdensome, especially for one isolated State seeking to avoid the possible consequences of a pronouncement.90 Hence, a collection of more or less fragmented claims is likely to coagulate around the pronouncement. The follow-up on AOs becomes, in a sense, the moment of confrontation among the different claims raised by Member States. In this context, the pronouncement will most probably be hijacked by States in the attempt to support their claims through the legal authority of the Court. This is no novelty in the life of political organs and, as in other instances, it may result  Implementation acts have blurred into the IO’s overall policy on a given instance in other cases also. For instance, in connection with the Effect of Awards AO and the Application for Review (1982) AO, the UN took steps towards revising the regulation of UN personnel, respectively, by setting an ad hoc committee to study a review mechanism for the judgments of the Administrative Tribunal (GA Res. 888 of 17 December 1954 and 957 (X) of 8 November 1955) and to amend the Staff Regulations (GA Res. 37/235 of 21 December 1982). On budgetary issues, after the Certain Expenses AO, the GA took action to establish special forms of contribution concerning peace-keeping missions, see GA Res. 1874 S-IV of 27 June 1973. 90  There have been only a few cases of the rejection of an ICJ AO. These include the case of South Africa, regarding the Namibia AO, see United Nations Yearbook (1971) 548–549. Israel also rejected the Wall AO, although it announced its willingness to abide by the ruling of its own High Court in respect of sections of the wall still to be built (International Legality of the Security Fence and Sections near Alfei Menashe, Israel High Court Ruling, Docket H.C.J. 7957/04, Judgment of 15 September 2005), see United Nations Yearbook (2004) 477. 89

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in a stalemate if none of the legal views expressed with regard to the pronouncement ultimately succeeds over the other competing one(s). As was very evident, a deadlock occurred in the context of the Western Sahara case. Spain and Morocco, in fact, relied so persistently on sharply different interpretations of the AO as to make any reference to it nugatory, both in their bilateral talks and before the UN organs involved in mediation.91 Such a fate is, though, not inevitable. In certain cases, AOs have proven successful to obtain a change of conduct or to return to a previously reached understanding. For instance, during the early discussions on the admission of new members to the UN, the SC members had conceded to take a single vote on multiple candidatures. At the time of the Admissions AO, the political situation between the US and the USSR had started deteriorating, making the previous voting practice on admission disadvantageous for the Western front. To avoid this, the western coalition maintained that, since the Court had ruled out single voting on multiple candidatures, the previous practice ought to be changed.92 Ultimately, the rejection of the USSR sponsored draft resolution qualifies as an instance of follow-up, as a conduct taken in connection with the pronouncement. Yet the independent initiative of member States seems here to play a much more central role than the IO institutional machinery. If it is so, should one expect any significant difference with in terms of effectiveness? A tentative answer to this question may be that, in fact, decentralized forms of follow-up tend to pursue a pragmatic accommodation of interests, as in the case of judgments. However, it is important to bear in mind that piecemeal efforts at implementation, which are more concerned with the immediate interests of the parties, can risk undermining the pronouncement itself. To illustrate this point, one may take some of the diplomatic inter-partes initiatives taken in connection with certain AOs. The Good Offices Committee, created to overcome the stalemate in the situation of South-West Africa,93 offers some of the best examples of inter-partes follow-up initiatives. In this case, the process of follow-up could have led to an outcome different from the letter of the AO. The Good Office Committee had in fact suggested the annexation of a portion of Namibia by South Africa in sharp contrast to the position taken by the Court. Ultimately, the UN quashed the proposed

 See United Nations Yearbook (1975) 179–184.  For a detailed account of the respective positions of the USSR and of the western coalition, see Repertoire of Practice of the Security Council (1946–1951), at Chapter 7, 285–286. 93  The three-member Good Offices Committee was mandated to negotiate with South Africa, Res. 1143 of 25 October 1957. 91 92

184   Laurence Boisson de Chazournes and Antonella Angelini annexation.94 Overall, the active involvement of the IO may be crucial to balance out the actual or potential results of inter-partes diplomatic initiatives.

IV.  Concluding Remarks We started this survey with the proposition that much had yet to be explored in the implementation of ICJ judgments and advisory opinions through diplomatic means. Indeed, the very notion of implementation needed clarification, covering both judgments and AOs. Finding some sort of ‘minimum common denominator’ was not only dictated by the scope of research we chose, but was also necessary to select the diplomatic actions which ought to be considered part of the process of implementation, notwithstanding the lack of an immediate practical and theoretical link with compliance. This allowed us to cover follow-up practices highly diverse not only in substance, but also in their effectiveness for pursuing the goals of the participants in implementation. Indeed, implementation often involves a range of subjects broader than its immediate addressees. Both in the case of judgments and of AOs, an institutional component can feature along with an interpartes one. Admittedly, international organizations are at the forefront when it comes to the implementation of AOs. But they have also played a role in the implementation of binding decisions. In the latter context, IOs have only recently started developing creative mechanisms of implementation, although exploiting little of the rich potential developed throughout the follow-up to AOs. Yet the few cases of intervention in support of States for the resolution of their disputes have proven largely successful, whereas the efforts to implement AOs have been dwarfed by IOs’ limited capacity to influence States having a legal interest in a particular matter. While highlighting the relevance of the inter-partes component in implementation, this also suggests that the latter may have a different impact, according to the context in which it is embedded. More precisely, the close relationship between the parties in connection with a binding decision provides the framework for, and arguably facilitates, the negotiating process of implementation. Even lacking collaboration, the parties will still most probably try to bargain for some pragmatic solution to secure as many as their interests affected by the dispute as possible. On the contrary, in the case of AOs the existence of an inter-partes component may be detrimental for implementation, especially if the requesting IO has no interest of its own at stake. The States concerned by the pronouncement, in fact, may free-ride on it without retribution, since the web of interests  GA Res. 1243 of 30 October 1958.

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around the pronouncement will seem too fragmented for triggering demands of redress by other States. Clearly, this dilutes the effectiveness of the AO, in spite of any genuine implementation effort on the part of the IO. An inquiry into the topic of the implementation of ICJ pronouncements is to be nourished by a continuous observation of State and institutional practice, coupled with an adjustment of the theoretical categories, in order to fully comprehend implementation. International scholars have so far been reluctant to engage in the latter task, being focused on compliance with binding decisions. This also hides a certain malaise in defining implementation without conflating it with compliance. Yet the old backyard risks turning from well-known and familiar to constraining. On the one hand, the more in-depth the post-adjudicative phase is analyzed, the less compliance itself may be apprehended in a straightforward and definitive way. On the other hand, as awareness of the parameters of implementation is rising in other judicial and non-judicial contexts, the gap concerning the ICJ AOs will soon be necessary to bridge. This contribution was intended to put forward and start a debate on some of these issues. We hope the seeds we have planted will grow and contribute to this end.

Chapter Ten Implementation of Recommendations and Rulings in the WTO System Gabrielle Marceau and Jennifer A. Hamaoui

I.  Introduction: Countermeasures in WTO Law and Rulings in the WTO System The WTO dispute settlement system is often described as a unique system of resolving international trade disputes among governments. The WTO adjudication system has particular specificities that distinguish it from other adjudication procedures in international law. For instance, in the event that a panel or the Appellate Body concludes that a WTO Member is in breach of one of its obligations under the covered agreements the losing party is requested “to bring its measure into conformity with the relevant WTO agreements”. Therefore there is only a single conclusion and a single permanent remedy: full compliance with WTO law. Moreover, the implementation of WTO rulings is unique insofar as it has put in place a multilateral surveillance system of “post-judgment procedures”1 for the supervision of implementation of the conclusions of its adjudication bodies and the articulation of remedies. In this sense, the WTO dispute settlement system includes some lex specialis provisions within the meaning of Article 55 of the International Law Commission’s Articles on State Responsibility (‘ASR’).2  Terminology used by John H. Jackson, Sovereignty, the WTO, and Changing Fundamentals of International Law (Cambridge University Press, 2006). 2  Unlike in general international law where a unilateral measure constituting a violation of international law may be justified as a countermeasure so long as it is intended as a proportionate response to another violation of international law attributable to another State and it meets certain substantive and procedural pre-conditions, in WTO law Members are precluded from taking unilateral retaliatory actions. In addition, a WTO law violation taken as a unilateral action in response to another violation does not constitute a circumstance precluding wrongfulness (Article 22 ILC ASR) and therefore cannot be invoked as 1

188   Gabrielle Marceau and Jennifer A. Hamaoui But at the same time, the WTO dispute settlement proceedings share a common feature with other interstate dispute settlement proceedings, which flows from the sovereignty of the parties to the dispute: the involvement of diplomacy and negotiations throughout the judicial proceedings. Whilst it is true that the diplomatic dispute settlement procedures of the GATT’s early years have made way to a more judicial dispute settlement mechanism with the creation of the WTO, the Dispute Settlement Understanding (‘DSU’) still embodies multiple provisions that afford a privileged position to diplomacy and negotiated settlements and foresee negotiations on different subject matters.3 Far from being a relic of the GATT era, diplomacy and negotiations continue to be at the centre of the dispute settlement mechanism (‘DSM’), which aims at securing a positive solution to a dispute pre­ferably through a solution mutually acceptable to the parties to a dispute and consistent with the covered agreements.4 Should we define diplomacy in broad terms as a tool of foreign policy for the management of international relations, it appears to play an important role in public international law at the different stages of conflict resolution.5 In WTO proceedings, from the initiation of a dispute settlement procedure to the stage of the implementation of rulings, diplomacy comes into play either as a means to trigger the application of judicial proceedings or as a means of enforcement of the ruling. This short article aims to explain the lex specialis system of retaliation in the context of the WTO, focusing on the diplomatic features of the dispute a valid defense in the context of a dispute before a WTO panel. The ILC has considered the WTO dispute settlement system as a system of lex specialis. (See Draft Articles on the Responsibility of States for Internationally Wrongful Acts, with commentaries, available at: http://untreaty.un.org/ilc/texts/instruments/english/commentaries/9_6_2001.pdf (last accessed 16 November 2011)). See the Gabčíkovo-Nagymaros Project case (Gabčíkovo-Nagymaros Project (Hungary/Slovakia), Judgment, [1997] ICJ Reports 7), which conditioned the legitimacy of countermeasures upon meeting certain requirements related to the purpose of countermeasures and procedural requirements such as the need to request the responsible State to fulfill its obligations. 3  Major changes such as the introduction of the negative consensus in the WTO political body (the Dispute Settlement Body (‘DSB’)) to refer a case to adjudication, to afford binding force to dispute settlement rulings and to authorize countermeasures, as well as the introduction of a stage of appeal, have contributed to a greater judicialization of the WTO dispute settlement system vis-à-vis the GATT system, affording the procedure a court-like character. 4  Article 3.7 of the DSU. 5  In a narrower sense, diplomacy refers to the practices of professional diplomats (Harold Nicolson). Whereas, according to a broader definition, diplomacy covers broad themes of statecraft and international relations (Henry Kissinger). See Christer Jönsson, “Diplomacy, Bargaining and Negotiation” in eds. Walter Carlsnaes and Beth A. Simmons, Handbook of International Relations (SAGE Publications, 2002), at 213.

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settlement proceedings that have to be followed before a Member is entitled to retaliate against another WTO Member and negotiated settlements after the phase of adjudication. We first review briefly the main procedural stages preceding the implementation of the rulings and recommendations of WTO adjudicating bodies. Second, we discuss this unique multilateral system of surveillance of Members’ implementation and retaliatory rights and obligations.

II.  Overview of the Procedural Steps Leading to an Authorization to Suspend Concessions or Other Obligations As described by the Appellate Body, the authorization to retaliate is granted following a long process of multilateral dispute settlement in which relevant adjudicative bodies, as well as the Dispute Settlement Body (‘DSB’),6 render multilateral decisions at key stages of the process.7 We explain hereafter the procedural stage leading to the adoption of panel and Appellate Body reports before discussing the WTO compliance process and the WTO surveillance over retaliation and the use of countermeasures in the form of suspension of concessions and obligations. A.  Summary of the Adjudicatory Stages in a Typical Dispute Settlement Case The dispute settlement mechanism of the WTO has been referred to as the “jewel of the crown”8 of the multilateral trading system insofar as it is unique in international law, both in terms of its functions and in terms of results. In terms of results, the dispute settlement mechanism is arguably the most  The DSB is a political organ composed of representatives of the entire membership of the WTO (153 Members, as of February 2011) and is responsible for administering the procedures under the DSU and supervising the dispute settlement process. In a nutshell, the DSB has the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of the implementation of rulings and recommendations, and authorize retaliation.  7  In that regard, the Appellate Body noted that the authorization to suspend concessions is necessarily preceded by a multi-stage dispute settlement process which encompasses: (i) consultations; (ii) panel proceedings; (iii) appellate review; (iv) the adoption of the panel and Appellate Body reports; (v) an arbitration to determine the reasonable period of time for implementation; (vi) compliance panel proceedings; (vii) compliance appellate review; and (viii) an arbitration to determine the level of suspension of concessions. Appellate Body report, US – Continued Suspension, at § 317.  8  Speech by DG Supachai Panitchpakdi, 9 June 2004, Marrakesh, Morocco “Ten Years After Marrakesh: the WTO and Developing Countries”.  6

190   Gabrielle Marceau and Jennifer A. Hamaoui ­ rolific of all international dispute settlement systems.9 As for its functions, p the DSM has exclusive and compulsory jurisdiction over a broad range of issues, that is to say, any dispute arising under the covered ­agreements.10 The WTO Members, by acceding to the WTO, have ratified the WTO Agreement as a single undertaking, thereby giving their consent to accept the jurisdiction of the DSM. In addition, the complaining Member is also precluded from using other for a for the resolution of a WTO-related dispute (Article 23 of the DSU). Article 3.7 of the DSU provides that: “A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred”. Consistent with this article, the DSU is sprinkled with provisions that open the door to diplomatic exchanges between the parties to the dispute for them to reach an agreement on different procedural matters such as the appointment of the members of the panel or the time frame in which the losing party is expected to implement the ruling, topics on which it is not infrequent for the parties to reach an agreement. The institutionalization of the possibility to negotiate a series of procedural issues seems to serve the broader objective of creating a productive atmosphere between the parties, which ultimately may promote the goal of settling the substantive matter through a mutually acceptable solution as provided for in Article 3.7 of the DSU. It is important to emphasize that at any time in the proceedings the parties can opt out of the court-like procedure and request the panel to suspend its work under Article 12.12 of the DSU in order to negotiate a mutually acceptable solution. A bilateral settlement always remains possible at all stages of the proceedings and parties are encouraged to continue to hold consultations in parallel with dispute settlement proceedings. (a)  Consultations The object and purpose of dispute settlement is that Members resolve their disputes promptly, preferably through consultations and, in any case multilaterally, foreclosing any recourse to unilateral actions.11 That is why the first stage of the process is to launch formal consultations in the WTO; that procedural step triggers the application of the provisions of the DSU. When a positive solution cannot be secured though consultations amongst the parties to the dispute, resort to adjudication becomes necessary. In that event, the DSM achieves another goal apart from settling the dispute given that it not only serves to preserve the rights and obligations of the Members under the  Peter Van Den Bossche, The Law and Policy of the World Trade Organization (Cambridge University Press, 2005), at 182. 10  Article 23 of the DSU. 11  Articles 3.7 and 23.1 of the DSU.  9

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covered agreements but it also helps to “clarify the existing provisions under those agreements”.12 Consultations are described as one of the key non-judicial or diplomatic features of the dispute settlement system.13 Consultations are also deemed to be mandatory insofar as the request for consultations is a necessary pre-condition for further proceedings. However, technically, it is only the request for consultations that is mandatory and the lack of consultations does not prevent the establishment of a panel.14 Despite this, in practice Members do engage meaningfully in consultations, usually significantly exceeding the 60-day period in which the DSU precludes the complainant from requesting the establishment of a panel following the receipt of its request for consultations.15 In addition, it is noteworthy that less than half of the requests for consultations proceed to the panel stage. (b)  The Panel Process If consultations among the parties fail to settle the dispute within the deadlines provided in the DSU, the complaining party is entitled to resort to litigation by requesting that a Panel be established. However, the possibility remains for the parties to find a mutually agreed solution at a later stage of the process.16 In fact, the DSU explicitly indicates, when describing the manner in which panels should perform their function of settling disputes, that they should consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution.17 In  Article 3.2 of the DSU.  WTO Dispute Settlement Handbook. 14  The Appellate Body in Mexico – Corn Syrup (Article 21.5 – US) clarified that Article 4.3 of the DSU relates the responding party’s conduct towards consultations to the complaining party’s right to request the establishment of a panel and that when the responding party does not respond to a request for consultations, or declines to enter into consultations, the complaining party may dispense with consultations and proceed to request the establishment of a panel. Appellate Body report, Mexico – Corn Syrup (Article 21.5 – US), at §§ 58–59. It also added that, “pursuant to Article 6.2 of the DSU, one of the requirements for requests for establishment of a panel is that such requests must indicate ‘whether consultations were held’. The phrase ‘whether consultations were held’ shows that this requirement in Article 6.2 may be satisfied by an express statement that no consultations were held. In other words, Article 6.2 also envisages the possibility that a panel may be validly established without being preceded by consultations.” Appellate Body report, Mexico – Corn Syrup (Article 21.5 – US), at § 62. 15  In practice, the average duration of consultations as of July 2012 has been 162 days (counting from the date of request for consultations to the date of the first request for the panel’s establishment). 16  See Article 4.7 of the DSU. 17  Article 11 of the DSU. 12 13

192   Gabrielle Marceau and Jennifer A. Hamaoui ­ ractice, panels consult the parties at the earliest stage of the proceedings p mostly on procedural issues, either when this is explicitly provided for in the DSU or as a matter of current practice in order to accommodate the needs of the parties. At a party’s request, the DSB will automatically establish a Panel unless the DSB decides otherwise by consensus. This is the so-called “reverse consensus” that characterizes every stage of the dispute process and renders the WTO DSM “quasi-automatic”.18 In other words, the DSU provides for procedural stages that automatically take place unless, by consensus, WTO Members—including the disputing parties—decide to the contrary. The established panel will generally be composed of three governmental or non-governmental individuals serving in their individual capacities chosen by the parties or appointed by the Director-General if parties fail to agree on the panelists. The process of panel composition illustrates the procedural consultations between the panel and the parties and negotiations between the parties explicitly foreseen in the DSU. Article 8.6 of the DSU establishes that the Secretariat shall propose nominations for the panel to the parties to the dispute and that the parties shall not oppose nominations except for compelling reasons. In practice, parties oppose nominations suggested by the Secretariat very frequently and do not agree on the identity of the three individuals to serve on the panel. Usually when the DSU affords the possibility of negotiating on certain procedural issues, it also foresees a back-up option in the event that the parties are unable to reach an agreement. In the case of panel composition, the DSU establishes a procedure for the Director-General to determine the composition if there is no agreement on the panelists within 20 days after the date of the establishment of a panel, at the request of either party. However, parties are free to devote more than 20 days in a attempt to agree on the identity of the panel, requesting the Secretariat to provide them with additional candidates to consider when they have failed to agree on the first slate of proposed candidates. Once established and composed, the panel can start work to carry out its function: assisting the DSB to resolve the dispute within a time span that normally shall not exceed six months.19 The panel process commences with an organizational phase and continues with a substantive phase. However, in some instances objections that could potentially render further proceedings  Pursuant to Article 6.1 of the DSU, a panel shall be established at the latest at the DSB meeting following that at which the request first appears as an item of the agenda. At the first DSB meeting, there is still a possibility to block the establishment because the rule of negative consensus only applies at the second DSB meeting in which the establishment is requested. 19  See also Article 12.9 of the DSU. 18

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impossible or unnecessary are raised and resolved at an early stage giving rise to preliminary rulings. Consultations also take place during the organizational meeting between the parties and the panel on procedural issues such as the timetable and working procedures for the panel’s work. It is in this context that parties can negotiate on a series of provisions not explicitly foreseen in the DSU such as special procedures for Business Confidential Information (BCI), providing translations of certain documents, or opening the hearing to the public, for example. Generally, the substantive phase starts with the exchange of a first set of parties’ written submissions; these are the complainants’ arguments substantiating factually and legally the claims made in its request for panel establishment and the respondent’s defense against the allegations of violations of WTO obligations. The first oral hearing (also called a substantive meeting as opposed to the organizational meeting) that follows the first exchange of submissions is the occasion for the parties to present their views orally and to respond to questions from the panel and from the other party. These questions are usually distributed and answered in writing after the meeting. Advanced questions can also be distributed prior to the meeting in order for the parties to prepare and make an efficient use of the time allocated during the meeting. In a subsequent stage parties will exchange simultaneously rebuttals to the other party’s arguments and the panel will hold a second substantive meeting. Once the oral hearings are concluded, and if necessary after seeking information and technical advice from experts, the panel carries out internal and confidential deliberations with the view to issuing a report determining whether the respondent has acted, as the complainant argues, inconsistently with its WTO obligations. The panel then submits a final report to the parties, which after being translated into the two other official WTO languages, is circulated to all WTO Members and transmitted to the DSB for its adoption within 60 days. The report becomes binding once adopted. However, the parties can decide to appeal the report, in which case the DSB cannot yet adopt it. At any stage of the proceedings parties can negotiate and conclude agreements on all sorts of topics, personalizing the proceedings to the particular needs of the dispute. It is in that context that the possibility of “enhanced third parties’ rights” were invented to provide additional rights beyond those codified in the DSU (Articles 10.2 and 10.3) in disputes where third parties can be specially affected by a panel process.20  In the first WTO case where these enhanced rights were granted, the panel decided after consultations with the parties to grant broader participatory rights noting that under prior GATT practice more expansive rights had been granted to third parties subject to the agreement of the parties. In the case at hand despite the parties’ disagreement on the issue

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194   Gabrielle Marceau and Jennifer A. Hamaoui (c)  The Appeal Process Any party to a dispute may appeal a panel report to the Appellate Body, which unlike panels, is a standing permanent body composed of seven Members that sits in divisions of three members. Appeals are limited to issues of law covered in the panel report and legal interpretations developed by the panel;21 hence the Appellate Body’s mandate is restricted to upholding, modifying or reversing the panel’s legal interpretation and determining whether the panel has committed a legal error. (d)  Panel’s Conclusions and Recommendations and Reasonable Period of Time to Implement When a panel or the Appellate Body concludes that a measure is inconsistent with the provision of a covered agreement it shall recommend that the responding Member “bring its measure into conformity”;22 in addition it may also suggest ways in which the Member concerned could implement the recommendation. Therefore, all panel reports have only a single ­recommendation, and there is only a single remedy: to bring a WTO inconsistent measure into compliance with WTO law. As for the losing party, its first obligation is to inform the DSB of its intention to comply with the recommendations at the DSB meeting following the adoption of the report. It is on this occasion that the Member concerned reports whether it is able to comply immediately with the recommendations and rulings and bring its measure into conformity with WTO law or states that it will only be able to achieve compliance within a reasonable period of time (RPT) because immediate compliance is impracticable.23 The RPT for implementation constitutes another example where the DSU makes room for a negotiated agreement between the parties or, if it is not possible provides for a procedure to determine this issue. Indeed, the RPT for implementation will be either (i) the time-period proposed by the losing party and approved by consensus by the DSB, (ii) the time-period mutually agreed by the parties to the dispute,24 or (iii) where neither of the first two prove possible, determined within 60 days by an arbitrator who is usually a member of the Appellate Body who was involved at the appeal stage, if any.

the panel considered it was appropriate to grant additional rights based on the effects of the challenged measures on the economy of third parties. (Panel report, EC – Bananas III (Ecuador), § 7.8.) 21  Article 17.6 of the DSU. 22  Article 19 of the DSU. 23  The RPT does not apply in the case of prohibited subsidies, which have to be withdrawn without delay (Article 4.7 of the SCM Agreement). 24  Within 45 days after the adoption of the report.

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III.  Implementation, Non-Compliance and Countermeasures A.  The So-Called “Sequencing Problem” Article 22.2 of the DSU provides that if the losing respondent fails to bring the measure found to be inconsistent into compliance within a RPT the prevailing complaining party may request DSB authorization to suspend concessions or other obligations. In addition, Article 22.6 of the DSU states that the DSB must grant such authorization within 30 days of the expiry of the RPT or refer the matter to arbitration. Article 21.5 of the DSU articulates the procedure to resolve disagreements regarding the consistency with WTO law of measures taken to comply with the recommendations and rulings.25 ­However, nowhere in the DSU is there a provision that clearly establishes that the initiation of retaliation proceedings under Article 22.2 is only possible after a compliance panel has issued a ruling under Article 21.5. In practice, once a Member is mandated by a ruling to bring its measure into conformity with the agreements, the tendency is for the losing Member to report to the DSB the steps undertaken and to declare itself in full compliance. However, the prevailing complaining party often disagrees as to whether compliance has been achieved and tends to immediately request the DSB’s authorization to suspend concessions and other obligations at a level that is claimed to be “equivalent” to the nullification of benefits caused by the WTO-inconsistent measure. In those circumstances, the responding party will request that a compliance panel (Article 21.5 DSU) be established to determine whether the measures it has undertaken do comply with the original recommendations and rulings.  If once the RPT has elapsed, the losing party has still not implemented the Panel or Appellate Body ruling, two situations can arise. One possibility is that the losing Member, when reporting to the DSB on whether it has implemented the ruling, acknowledges it has not yet put its measure into conformity (for instance because of internal reasons such as having to amend the laws through a lengthy legislative process). The other situation that arises frequently is that both parties disagree whether the implementing Member has complied with the ruling by putting its measure into conformity. While the losing Member maintains it has taken steps to implement, the winning party argues the measure taken by the losing Member is not WTO consistent and does not achieve full compliance. When such ­disagreement arises, either of the parties is in a position to request a so-called “compliance panel” under Article 21.5 of the DSU. If possible, the matter will be referred to the individuals that served on the original panel, which will decide in an expedited procedure whether compliance has occurred. A noteworthy feature of the mandate of the compliance panel is that it is not limited to examining whether the new measure taken to implement complies with the ruling of the original panel but it may also include a complete assessment (or a de novo review) of the new measure put in place allegedly to implement and ensure its consistency with the covered agreements. Therefore its examination is not curtailed by the claims made in the context of the original panel.

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196   Gabrielle Marceau and Jennifer A. Hamaoui This legal vacuum has also been filled by negotiations between the parties. In practice, the issue of sequencing has been solved by ad hoc agreements between the parties to the disputes, usually called “Agreement or Understanding Between X and Y Concerning the Procedures under Article 21 and 22 of the DSU”. The core obligations embodied in these agreements are, on the one hand, a commitment on the part of the losing respondent not to claim that the complainant requesting the DSB authorization is precluded from obtaining it because the request has been made outside the 30 day timeperiod and, on the other hand, the complainant’s commitment to resort to the suspension of concessions or other obligations only after the completion of the compliance proceedings. An amendment of the DSU has been advocated to clarify the logical sequence of the two proceedings and several proposals have been made in the context of the DSU negotiations to avoid the triggering of retaliation before the conclusion of compliance proceedings.26 B.  When There is Failure to Comply, the Winning Party May Accept Temporary Compensation Leaving aside the issue of disagreement about compliance, the objective of the DSM, where a multilateral determination of inconsistency has been made, is to ensure the withdrawal of WTO‑inconsistent measures within the RPT. If the losing Member fails to bring its measure into conformity with its WTO obligations within the RPT, the prevailing complainant is entitled to resort to either compensation or countermeasures. However given that compensation is voluntary, if the parties do not agree, the winning complainant will move to the retaliation stage and request countermeasures. Countermeasures are however limited to non-performance and may only be taken in order to induce compliance. Both compensation and countermeasures are only temporary measures and are not substitutes for full implementation of the DSB recommendations and rulings. Therefore Members can only resort to compensation or countermeasures when the immediate compliance or withdrawal of the measure is impracticable. Compensation will generally take the form of market access advantages the respondent offers to the winning complaining party, for instance tariff reductions.27 As noted above, compensation is voluntary and must be agreed  Report by the Chairman, Ambassador Ronald Saborío Soto, to the Trade Negotiations Committee for the Purpose of the TNC Stocktaking Exercise TN/DS/24 22 March 2010, Special DSB Session. See also footnote 25. 27  In the Japan – Alcoholic Beverages II dispute, Japan agreed to grant tariff concessions to the US, Canada and the EC in the form of tariff reductions and eliminations for certain products. However, such compensation did not come as an alternative to full compliance unlike compensation under Article 22.1 of the DSU insofar as it was embodied in a ­mutually 26

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upon by the parties to the dispute. Compensation is therefore an instance in which the DSU explicitly introduces the use of diplomatic tools not to settle the dispute but rather to provide temporary relief to the party suffering from the consequences of a WTO inconsistency. Moreover, Article 22.1 of the DSU requires that compensation be consistent with the covered agreements. This requirement has been seen as the reason why Members seldom have recourse to compensation because, depending on the form of compensation chosen, the respondent may have to extend the compensation granted to the winning complaining party to all WTO Members in order to comply with the Most Favored Nation principle (“MFN”).28 If compensation cannot be agreed upon, there is the possibility for the winning complainant to request the suspension of concessions or other obligations. If no satisfactory compensation is agreed within 20 days of the expiration of the RPT or compliance is not achieved within 30 days of the expiry of the RPT, any party having invoked the dispute settlement procedures may request authorization from the DSB to retaliate. C.  If Compensation Cannot Be Agreed, the Winning Party May Rely on Countermeasures (a)  Request to Suspend Concessions or Other Obligations (Article 22.2): Requirements If compensation cannot be agreed upon, the winning party may use countermeasures. In the WTO specific system, the winning party must first obtain the permission of the DSB to impose retaliation. As regards the procedure, acceptable solution notified by the parties. Although the parties did not notify the solution under Article 3.6 of the DSU, pursuant the mutually agreed solution Japan committed to revise its liquor tax scheme in order to implement the recommendations and rulings. (See Mutually Acceptable Solution on Modalities for Implementation WT/DS/10/17; WT/ DS/11715; WT/DS/8/17; WT/DS10/17/Add.1; WT/DS11/15/Add.1; WT/DS8/17/Add.1.) On this basis, the parties considered that Article 21.6 of the DSU no longer required that the issue of implementation on the agenda since they had resolved the matter. In the US – Section 110(5) Copyright Act case, the US agreed to make a lump-sum payment in the amount of US$3.3 million to a fund to be set up by performing rights societies in the European Communities for the provision of general assistance to their members and the promotion of authors’ rights. This was agreed through a mutually satisfactory temporary arrangement in force until full implementation (WT/DS160/23). However, it is not clear whether compensation can take the form of monetary payments. Therefore, neither of these cases can be strictly speaking defined as compensation of the type provided for in Article 22.1 of the DSU. 28  Whilst this statement holds true when compensation takes the form of a benefit in terms of market access for instance though a tariff reduction, it may not necessarily be the case if compensations take another form. The MFN principle is explained in footnote 9 above.

198   Gabrielle Marceau and Jennifer A. Hamaoui it is for the winning complainant to request the DSB’s authorization to suspend identified concessions. The suspension of concessions or other obligations is subject to two types of requirements: a quantitative requirement that results in a limitation on the level of suspension that can be authorized, and a requirement concerning the type of obligation that can be suspended. Concerning the level of suspension of concessions or other obligations, Article 22.4 of the DSU provides that it shall be equivalent to the level of nullification or impairment caused by the measure found WTO inconsistent.29 As for the type of obligation to be suspended, Article 22.3 of the DSU sets out the principles and procedures that must be followed. There are three types of retaliation that can be requested depending on the WTO obligations that are being suspended: (a) suspension of concessions in the same economic sector in which the nullification or impairment has been found (a sector is an area of trade);30 (b) suspension of concessions relating to different sectors under the same agreement (the so-called cross-retaliation or cross-sector retaliation); and (c) suspension of concessions under a different agreement from the one in which the violation was found (cross-agreement retaliation). The complainant has a limited margin of discretion to choose the type of retaliation that suits it best given that, as it has been observed in past arbitrations, Article 22.3 provides a “hierarchy of remedies” that a complaining party must follow in determining which sectors or under which agreements  Article 22.4 of the DSU. The Subsidies and Countervailing Measures Agreement (‘SCM’ Agreement) contains two specific rules regarding the level of suspension that can be authorized; for prohibited subsidies the level does not have to be equivalent to the level of nullification or impairment: Articles 4.10 and 4.11 of the SCM Agreement instead speak of “appropriate countermeasures” and defines them as “not meant to allow countermeasures that are disproportionate in light of the fact that the subsidies dealt with under these provisions are prohibited”. For actionable subsidies, Articles 7.9 and 7.10 of the SCM Agreement refer to “countermeasures commensurate with the degree and nature of the adverse effects determined to exist”. 30  Article 22.3 (f ) provides: for purposes of this paragraph, “sector” means: (i) with respect to goods, all goods; (ii) with respect to services, a principal sector as identified in the current “Services Sectoral Classification List” which identifies such sectors; (The list in document MTN.GNS/W/120 identifies eleven sectors) (iii) with respect to trade-related intellectual property rights, each of the categories of intellectual property rights covered in Section 1, or Section 2, or Section 3, or Section 4, or Section 5, or Section 6, or Section 7 of Part II, or the obligations under Part III, or Part IV of the TRIPS Agreement. 29

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suspension can be sought.31 Article 22.3 states that the complaining party should first seek to suspend in the same economic sector and under the same agreement in which the panel or Appellate Body has found a violation or other nullification or impairment, and only if that is impracticable or ineffective can it ­cross-retaliate, that is to say seek to suspend in a different economic sector within the same agreement. Finally, if cross-retaliation within the same covered agreement is either impracticable or ineffective and the circumstances are serious enough the complaining Member may seek to suspend concessions under another covered agreement. In practice, when a winning complaining party requests authorization to retaliate it includes in its request to the DSB a proposed level of suspension (an estimate of the level of nullification or impairment the violation has caused to its economy that is to say the economic harm caused) and a list of products to which it wishes to suspend obligations vis-à-vis the losing Member. For instance, a winning Member can retaliate against a ­WTO-inconsistent charge (tariff ) on bananas (a good) by imposing a ­tariff surcharge on the same or any other goods (bananas, cookies, cosmetics, automobiles . . .) because they are considered part of the same sector.32 As mentioned, when the initial inconsistent measures violate obligations in trade in goods, the winning complaining Member can suspend WTO obligations only if the imposition of a tariff on goods is impracticable or ineffective. Unlike the situation for goods where all goods are part of a single sector, in services there are eleven sectors. Therefore if, for example, the measure found inconsistent is a measure that relates to trade in services, and the winning party does not export a certain type of service, it may be authorized to  Decisions by the Arbitrators, US – Gambling (Article 22.6 – US), § 4.19 and US – Upland Cotton (Article 22.6 – US I), § 5.62. 32  For instance, in the US – FSC case the Panel report, as modified by the Appellate Body, found the US measure establishing special tax treatment for profits from US exports that are channeled through the so-called “Foreign Sales Corporations” constituted a prohibited subsidy (contrary to the SCM Agreement) and a violation of export subsidy commitments under the Agriculture Agreement. Given that the SCM Agreement and the Agriculture Agreement are agreements that govern trade in goods, when the European Union (“EU”), as the winning complaining party, requested the suspension of concessions, it presented a list of products that included chapters of the Common Customs Tariff without identifying individual products, but all were part of the same sectors in trade in goods. That list constituted the universe of products within which the European Union would then select products imported from the United States on which it would impose a tariff higher than its bound level. It is worth recalling that these higher tariffs would only be applied once the arbitrator had determined the level of nullification or impairment caused to the EU and thus the level of permissible countermeasures. The EU then submitted to the WTO a final selection of products representing the value equivalent to the amount of suspension authorized in line of the arbitrator’s decision. 31

200   Gabrielle Marceau and Jennifer A. Hamaoui suspend in another services sector, or even under another covered agreement, if it is impracticable and ineffective to suspend in the area of services and circumstances are serious enough.33 (b)  Arbitration Procedures under Article 22.6 of the DSU When faced with the possibility of retaliation, the targeted Member (called in the DSU the “Member concerned”) can object to the proposed level of suspension, arguing that it is not equivalent to the level of nullification or impairment caused by its measures. It can also claim that the hierarchy between the types of retaliation (Article 22.3) has not been respected. In that case, the Member concerned can request that the matter be referred to arbitration. This specific multilateral surveillance and control over the type and the level of retaliation is unique to the WTO DSM and reinforces the general prohibition against unilateral measures (Article 23). This arbitration is usually carried out by the members of the original panel serving as the “arbitrators”; if this is not possible (for instance, if the members of the original panel are not available), the arbitrator is appointed by the Director-General. The arbitration is an expedited procedure that must be completed within 60 days after the date of expiry of the RPT. In practice, this short time period is never respected and arbitration reports usually take on average 190 days to complete.34 (i)  Legal Basis and Applicable Legal Standards The functions of the arbitrator are explained in Article 22.7 of the DSU, which provides that:  In the US – Gambling case, the Panel report, as modified by the Appellate Body, found the United States had violated its GATS commitments (Recreational, Cultural and Sporting Services); however, when it came to the request for suspension of obligations, the winning complainant, Antigua, requested approval to suspend its concessions in intellectual property rights with respect to American copyrighted and trademarked products under the TRIPS Agreement because it deemed suspending obligations in the same sector (Recreational, Cultural and Sporting Services) was impracticable and ineffective. Indeed, although Antigua had made commitments in that sector, trade in this sector was negligible. In addition, suspension in another sector under the GATS, where Antigua had undertaken commitments (telecommunication services for instance), was also found impracticable and ineffective; this was not only due to the low volume of the trade but also due to the disruption that would be caused by changing services and suppliers and the resulting increased cost to Antiguan consumers and a heavier burden on Antiguan citizens while having no perceptible impact on the United States. Finally, the Arbitrator found the circumstances to be serious enough to authorize suspension under another agreement because of the great imbalance in terms of trade volume and economic power that exists between Antigua and the United States. 34  From the date of referral to the date of circulation of the arbitrator’s decision, as of July 2012. 33

Implementation of Recommendations and Rulings in the WTO System   201 The arbitrator16 acting pursuant to paragraph 6 shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. The arbitrator may also determine if the proposed suspension of concessions or other obligations is allowed under the covered agreement. However, if the matter referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator shall examine that claim. In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3. 16 The expression “arbitrator” shall be interpreted as referring either to an individual or a group or to the members of the original panel when serving in the capacity of arbitrator.

Therefore, as noted, there are two possible legal bases on which the losing respondent may challenge the request to suspend concessions or other obligations: the proposed level of suspension, and the principles and procedures of Article 22.3 of the DSU (cross-retaliation). (ii)  The Mandate of the Arbitrator in General Depending on which aspects of the proposed suspension are being challenged (the level or the type of suspension that is being sought or both), the mandate of the Arbitrator is to determine whether the proposed level of suspension is equivalent to the level of nullification or impairment and/or whether the principles and procedures for the suspension have been respected.35 (iii)  The mandate of the Arbitrator with Respect to the Level of Nullification or Impairment a.  The Permissible Level of Countermeasures/Suspension of Concessions or Obligations With respect to the level of countermeasures, the Arbitrator’s mandate requires it to determine, first, whether the proposed level of suspension is equivalent to the level of nullification or impairment suffered by the complainant as a result of the inconsistent measures. The Arbitrator’s mandate under Article 22.7 of the DSU requires it to determine whether the level of suspension of concessions or other obligations sought by the requesting Member is “equivalent to the level of nullification or impairment” of benefits  Past arbitrators have considered that a request for arbitration under Article 22.6 defines the terms of reference of the Arbitrator, while a complaining party’s request to the DSB under Article 22.2 defines the jurisdiction of the DSB in authorizing suspension by the complaining party and that referrals to arbitration under Article 22.6 as well as requests for suspension under Article 22.2 serve due process objectives similar to those of requests under Article 6.2 of the DSU. EC – Bananas III (Ecuador) (Article 22.6 – EC), at § 20.

35

202   Gabrielle Marceau and Jennifer A. Hamaoui that have accrued as a result of the WTO violation pursuant to Article 22.4 of the DSU. The burden rests on the party challenging the request for the suspension to prove that the level of suspension proposed is not equivalent to the level of nullification or impairment. Therefore, the Arbitrator has to consider the proposed level of suspension and in light of the arguments presented by both parties, determine whether it leads to an overestimation of the level of nullification or impairment and, hence, to a level of suspension in excess of the level of the nullification or impairment. This implies that the Arbitrator’s task is to calculate the approximate value of the adverse economic impact due to the measure found to be WTO-inconsistent. This assessment is based on the methodology paper presented by the requesting Member, to the extent the trade data and other economic assumptions are not rebutted by better economic data provided in the respondent’s written submission. The economic impact of the WTO-inconsistent measure (the nullification or impairment) is usually estimated by means of a counterfactual that calculates how much trade would have occurred had the WTOinconsistent measures been brought into conformity by the end of the RPT. The level of nullification or impairment is calculated by estimating what level of trade the complaining party would have had and comparing it to the trade that actually occurred. In practice, only when the Arbitrator concludes that the proposed level is not consistent with the equivalence requirement does its mandate also include making an estimate of the level of suspension that it considers to be equivalent to the nullification or impairment suffered. When assessing the equivalence of the proposed level of suspension and type of retaliation requested, the Arbitrator is precluded from examining the nature of concessions or other obligations to be suspended. Thus, for instance, the Arbitrator is precluded from questioning the requesting Member’s choice to retaliate with respect to one specific good over another. As in general international law, the retaliating Member enjoys a wide margin of discretion for selecting the measure to be taken as a countermeasure. b.  Burden of Proof The complainant typically provides in its methodology paper a proposed calculation, which is then challenged by the respondent. Often the respondent will question the economic assumptions on which the complainant has premised its calculation (for instance the elasticities that are used to estimate the counterfactual). In that case, it can propose alternative and more suitable assumptions. If the respondent makes a prima facia case that the proposed level of suspension would lead to a suspension in excess of the level of nullification or impairment, the Arbitrator may then develop a methodology to calculate the level of suspension equivalent to the level of nullification or impairment. It must be noted that determining with exactitude the level of

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nullification or impairment caused by a WTO-inconsistent measure may not be possible and it is an exercise that admits a certain margin of error. Initially, the burden of proof rests on the losing respondent, as the party challenging the request for suspension, to prove that the proposed level of suspension is not equivalent to the level of nullification or impairment. Accordingly, the losing respondent will need to adduce sufficient evidence to challenge the presumption that the proposed level of suspension is equivalent to the level of nullification or impairment and create a presumption that the level of suspension proposed by the requesting Member is not “equivalent” to the level of nullification or impairment.36 Should the losing respondent successfully challenge the proposed level of suspension, demonstrating that it is not equivalent to the level of nullification or impairment, the Arbitrator will typically recalculate the level itself.37

  For instance, the Arbitrator in EC – Hormones (Canada) stated: WTO Members, as sovereign entities, can be presumed to act in conformity with their WTO obligations. A party claiming that a Member has acted inconsistently with WTO rules bears the burden of proving that inconsistency. The act at issue here is the Canadian proposal to suspend concessions. The WTO rule in question is Article 22.4 prescribing that the level of suspension be equivalent to the level of nullification and impairment. The EC challenge the conformity of the Canadian proposal with the said WTO rule. It is thus for the EC to prove that the Canadian proposal is inconsistent with Article 22.4. Following well-established WTO jurisprudence, this means that it is for the EC to submit arguments and evidence sufficient to establish a prima facie case or presumption that the level of suspension proposed by Canada is not equivalent to the level of nullification and impairment caused by the EC hormone ban. Once the EC has done so, however, it is for the Canada to submit arguments and evidence sufficient to rebut that presumption. Should all arguments and evidence remain in equipoise, the EC, as the party bearing the original burden of proof, would lose. EC – Hormones (Canada) (Article 22.6 – EC), at § 9. 37  Arbitrators have considered that, if they determine that the proposed level is not equivalent to the level of nullification or impairment they have then the obligation to estimate the level of suspension that they consider to be equivalent. As expressed by the Arbitrator in EC – Hormones: In the event we decide that the Canadian proposal is not WTO consistent (i.e. the suggested amount is too high), we should not end our examination the way panels do, namely by requesting the DSB to recommend that the measure be brought into conformity with WTO obligations. Following the approach of the arbitrators in the Bananas case – where the proposed amount of US$520 million was reduced to US$191.4 million – we would be called upon to go further. In pursuit of the basic DSU objectives of prompt and positive settlement of disputes, we would have to estimate the level of suspension we consider to be equivalent to the impairment suffered. EC – Hormones (Canada) (Article 22.6 – EC), at § 12. 36

204   Gabrielle Marceau and Jennifer A. Hamaoui (iv)  Mandate of the Arbitrator with Respect to the Choice of Obligations to Suspend – the Issue of Cross-Retaliation The Arbitrator’s mandate in assessing whether the principles and procedures of suspension have been followed consists essentially in determining whether the requesting Member’s proposal has followed the hierarchy between the types of retaliation – i.e. has it requested retaliation under the same economic sector and the same agreement where the violation was found. Therefore, when cross-sector retaliation is requested, the Arbitrator must first examine the requesting Member’s arguments on why parallel retaliation was “impracticable” or “ineffective”. As far as the burden of proof is concerned, it is for the party claiming that suspension within the same sector and that agreement is impracticable or ineffective to discharge this. In the case law, practicability and effectiveness have been measured in terms of contribution to the objective of inducing compliance.38 In particular, past arbitrators have considered that a suspension is “not practicable” when it is not available in practice or not feasible, for example where the countermeasure exceeds the total amount of the trade available to be countered.39 Therefore, if the requesting Member shows that retaliation under the same sector and agreement does not achieve the goal of inducing compliance by the WTO recalcitrant Member, it will request authorization to retaliate under another agreement. When cross-agreement retaliation is requested, Article 22.3 requires that the arbitrator also consider whether circumstances are “serious enough” to justify cross-agreement retaliation. Although past arbitrators have described it as a case-by-case assessment,40 they have noted that this assessment could include a consideration of the elements identified in Article 22.3 DSU, namely the level of trade in the sector in which a violation has been found and its importance to the complaining party as well as the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension.41 Past arbitrators have also observed that these circumstances could be directly related to the practicability and effectiveness of the suspension under the same agreement.42 As noted, the Arbitrator in US – Gambling considered that the extremely unbalanced nature of the trading relations between the parties made it more difficult for Antigua to ensure the effectiveness of the suspension of concessions or other obligations against the US under the same agreement.43 The disproportionate  EC – Bananas III (Ecuador) (Article 22.6 – EC), at §§ 70–73 and 76.  US – Upland Cotton (Article 22.6 – US I), at § 5.73. 40  US – Gambling (Article 22.6 – US), at § 4.108, US – Upland Cotton (Article 22.6 – US II), at §§ 5.84 and 5.123. 41  US – Upland Cotton (Article 22.6 – US II), at § 5.215. 42  US – Gambling (Article 22.6 – US), at § 4.115. 43  US – Gambling (Article 22.6 – US), at § 4.114. 38 39

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adverse impact on the requesting Member’s economy of applying retaliation under the same agreement has also been considered as serious enough to justify cross-agreement retaliation.44 Finally, once all those determinations have been made, the award of the Arbitrator is issued. The DSB is then informed promptly of the result of the arbitration.45 Upon request, the DSB automatically46 grants the authorization to suspend concessions and other obligations, provided that the request is consistent with the Arbitrator’s decision. Despite having obtained an arbitral award recognizing a certain level of suspension and even despite having obtained DSB authorization to retaliate, the complainant may chose not to do so and attempt to negotiate with the losing respondent a mutually agreed solution or negotiate the modalities of implementation. D.  WTO Surveillance over Mutually Acceptable Solutions and Special Implementation Agreements WTO-related countermeasures are temporary measures that are not substitutes for full implementation.47 In that context, the DSB’s surveillance continues so long as the losing respondent has not brought its measure into compliance with its WTO obligations. Given that the dispute settlement system aims to secure a positive solution to a dispute, the DSU provides that a solution mutually acceptable to the parties to a dispute is clearly the option to be preferred.48 Mutually acceptable solutions may be reached at any time; whether during consultations or in parallel to dispute settlement proceedings, parties are encouraged to continue  US – Gambling (Article 22.6 – US), at § 4.114 and US – Upland Cotton (Article 22.6 – US II), at § 5.221. 45  Article 22.7 of the DSU provides: The arbitrator acting pursuant to paragraph 6 shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. The arbitrator may also determine if the proposed suspension of concessions or other obligations is allowed under the covered agreement. However, if the matter referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator shall examine that claim. In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3. The parties shall accept the arbitrator’s decision as final and the parties concerned shall not seek a second arbitration. The DSB shall be informed promptly of the decision of the arbitrator and shall upon request, grant authorization to suspend concessions or other obligations where the request is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request. (Emphasis added). 46  Unless the entire Membership rejects it by way of reversed consensus. 47  Article 22.8 of the DSU. 48  Article 3.7 of the DSU. 44

206   Gabrielle Marceau and Jennifer A. Hamaoui their talks with a view to settling definitively the dispute. As far as mutually agreed solutions are concerned, when the parties settle the dispute permanently, they are not allowed to settle on whatever terms they wish. Article 22.5 of the DSU requires all solutions to matters formally raised under the consultations and dispute settlement provisions of the covered agreements to be consistent with those agreements. Therefore the most common type of solution notified as mutually acceptable is the withdrawal or the amendment of the contentious measure, the outcome being the same as that of a WTO panel ruling. A common practice observed in the context of DSM implementation is that parties to disputes tend to conclude amongst themselves specific “deals”, the legal nature or “DSU classification” thereof remains unclear. Those specific deals are the result of the use of diplomatic means of resolving the dispute at the implementation stage of the ruling. Those special agreements are not notified as mutually agreed solutions under Article 3.6 of the DSU but normally take the form of a “Memorandum of Understanding” (“MoU”) or “Framework Agreement” and are notified as a joint communication from the parties. These temporary deals aim to avoid the imposition of countermeasures by the winning complaining party and are in force only on a temporary basis, until full implementation is carried out by the loosing Member. For instance, in the US – Upland Cotton dispute,49 Brazil had complete freedom to decide which products would be subject to retaliatory surcharges in import tariffs and which intellectual property and services rights could be targeted by supplementary countermeasures up to a certain annual amount of trade.50 However, Brazil informed the DSB that it had decided to postpone the imposition of countermeasures and that Brazil and the United States were currently engaged in a dialogue with a view to reaching a mutually satisfactory solution.51  The United States was required to withdraw the prohibited subsidies and to remove the adverse effects caused by the subsidies causing serious prejudice to the Brazilian cotton industry. 50  The arbitral award and the DSB authorized it to suspend concessions or other obligations under the Agreements on trade in goods, at a level not to exceed a certain value of annual trade and to suspend under the TRIPS Agreement and/or the GATS in the event that the total level of countermeasures would exceed a certain threshold. 51  Brazil notified the DSB that starting from 7 April 2010, Brazil would suspend the application to the United States of concessions or other obligations under the GATT 1994 in the form of increased import duties on certain products when they are imported from the United States. Brazil supplied the list of products that would be subject to the increased duties, together with the total rate of ad valorem duty that would be applied as a result of the increase. Brazil also informed the DSB that it would suspend the application to the United States of certain concessions or obligations under the TRIPS Agreement and/or the GATS and that it would notify to the DSB the specific concessions or obligations under 49

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The settlement was phased in two stages: first, the parties signed a “Memorandum of Understanding” on 20 April 2010 that created a fund for technical assistance and capacity building for the Brazilian cotton producing sector; then on 17 June 2010, the parties concluded a “Framework Agreement for a mutually agreed solution”. Neither the MoU nor the Framework Agreement was a substitute for full compliance with the DSB’s conclusions that required the United States to withdraw the prohibited subsidies and to remove the adverse effects caused by the US subsidies to the Brazilian cotton industry. However, both aimed to avoid the imposition of countermeasures on the United States. In the MoU, Brazil stated that it was still pursuing full compliance with the WTO dispute settlement ruling. However, any changes to farm programs would likely have to be made in the context of the 2012 US Farm Bill. The Framework Agreement also specified that it did not constitute a mutually agreed solution per se but that it laid out the parameters for discussions on a solution with respect to the subsidies provided to the US cotton industry and US export credit guarantees. Under the MoU, aside from financing the annual cotton fund of US$147.3 million which would continue in place until the passage of the next US farm bill or achievement of a mutually agreed solution to the dispute (whichever is sooner), the United States agreed to make some modifications to the operation of its Export Credit Guarantee Program and to declare the Brazilian State of Santa Catarina free of foot-and-mouth disease and other diseases. The Framework Agreement foresees periodic discussions on limits of cotton subsidies and identifies parameters for a future annual limit on domestic support for US cotton producers. Another example of a specific deal concluded between parties to a dispute may be found in the US – Section 110(5) of the Copyright Act dispute.52 The US Copyright Act which permitted, under certain conditions, the playing of radio and television music in public places (bars, shops, restaurants, etc.) without the payment of a royalty fee was found inconsistent with the TRIPS Agreement and the United States was requested to amend it (by removing the so-called “business” and “homestyle” exemptions). After the expiry of the RPT and the determination of the level of nullification or impairment by an arbitrator, the parties informed the DSB of a mutually satisfactory temporary agreement. The US Congress voted compensation of US$1.1 million per annum for a three-year period ending 2004. Therefore, the solution consisted not in implementing the ruling but in setting up a fund for the TRIPS Agreement and/or GATS whose application to the United States would be suspended before such suspension comes into force. 52  WT/DS160/24.

208   Gabrielle Marceau and Jennifer A. Hamaoui making payments directly to European copyrights collection societies. Again this solution is temporary and does not replace the full implementation. For this reason, pursuant to Article 22.6 of the DSU, the dispute continues to appear on the first point of the agenda of each DSB meeting dealing with non-implementation. Both those special and temporary deals are examples of situations where parties to a dispute were able to make good use of the important diplomatic space left out by the DSU. The operation of such temporary implementation agreements remains under the continued WTO multilateral surveillance that guarantees a strict prohibition against unilateral measures.

IV.  Conclusion The current system of countermeasures has been heavily criticized for being contrary to the ultimate policy goal of the WTO of trade liberalization as it involves trade restrictions. But more importantly, in economic terms, the restrictions imposed as countermeasures are sometimes referred to as self-inflicted wounds actually harming the Member imposing them because they usually have the effect of raising prices paid for imported goods by its domestic consumers. This effect is likely to be exacerbated with the growing importance of global supply chains in today’s economy and industries’ reliance on the supply of intermediate goods of other countries for their own production. Added to the loss in consumers’ welfare will be the loss in producers’ welfare resulting in products that would be subject to increased duties, together with the total rate of ad valorem duty that would be applied as a result of the increase. The potential negative impact of the imposition of countermeasures is undoubtedly one of the reasons why Members have chosen to resort to alternative temporary solutions, which, without substituting for full compliance, avoid the imposition of retaliatory measures whilst the implementing Member takes all necessary steps to withdraw any WTO inconsistency from its measures. Yet the threat of cross-retaliation has been hailed by developing countries as an important tool in their ability to cause difficulties for more powerful Members able to delay full compliance based on their economic power in the sector in which the original dispute took place. The WTO dispute settlement system has proved to be an effective system insofar as it offers positive prospects of changes or withdrawal of WTO-law inconsistent measures. Proof of such effectiveness can be found in the fact that most cases do not proceed to the consultations stage. In addition, even when cases proceed to the adjudication phase, requests for DSB authorization to suspend concessions and other obligations are still relatively few.

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Finally, even when authorized it is not infrequent for parties to avoid imposing countermeasures by settling the dispute through temporary arrangements. The possibility of having recourse to concrete sanctions is another element that reinforces the effectiveness of the DSM. In addition, the many possibilities of having recourse to negotiations between the parties constitute a mechanism which reinforces the effectiveness of the WTO DSM. The DSU illustrates how diplomacy can be introduced as a pillar of effective adjudication. Due to the flexibilities embedded in the text of the DSU there is room for both court-like proceedings and parties-driven processes, but depending on the use the parties make of such flexibilities. The WTO has put in place controls and limitations to the exercise of State sovereignty in the area of countermeasures by introducing a multilateral procedure that obliges the winning complainant to have its request for countermeasures authorized by the rest of the WTO Members; even if this authorization is quasi automatic it maintains a system of checks and balances. Bilateral negotiations between the parties, MAS and those new sorts of temporary implementation agreements offer an alternative to the imposition of countermeasures. Like the MAS that must be notified to the DSB, those new sorts of “implementation deals” remain subject to WTO multilateral control insofar as the loosing Member has the obligation to report on its status of implementation53 and in practice parties always notify those temporary implementation agreements as a step towards full implementation. By alternating multilateral and bilateral stages, the proceedings strike a balance between judicial and diplomatic means of dispute resolution.

Annex: Status of Implementation of Arbitrations EC – Bananas III (US): level of suspension authorized: US$191.4 million (annual); cross retaliation not requested. Status of implementation: countermeasures not currently imposed (WT/DS27). EC – Bananas III (Ecuador): level of suspension authorized: US$201.6 million (annual) (annual); cross retaliation. Status of implementation: countermeasures not currently imposed (WT/DS27). EC – Hormones (US): level of suspension authorized: US$116.8 million (annual); cross retaliation not requested. Status of implementation: countermeasures not currently imposed; parties have signed and notified a MoU (WT/DS26/28). EC – Hormones (Canada): level of suspension authorized: US$116.8 million (annual); cross retaliation not requested. Status of implementation:  Temporary agreements between the parties should arguably be reported.

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210   Gabrielle Marceau and Jennifer A. Hamaoui c­ ountermeasures not currently imposed; the press has reported parties had finalized a MoU but it has not been yet notified to the DSB (WT/ DS26, WT/DS48). Brazil – Aircraft: level of suspension authorized: CAN$344.2 million (annual); cross retaliation not requested. Status of implementation: countermeasures not currently imposed (WT/DS46). US – FSC: level of suspension authorized: US$4,043 million (annual); cross retaliation not requested. Status of implementation: countermeasures not currently imposed. The EU considered the legislative steps as satisfactory (WT/DS108). US – Offset Act (Byrd Amendment): level of suspension authorized: (same for all co-complainants): additional duties on yearly value of trade equal to amount of Byrd duties distributed times 0.72; cross retaliation not requested. Status of implementation: in February 2006, the United States repealed the Byrd Amendment effective October 1, 2007. While duties are no longer collected under the Byrd Amendment, distributions of previously collected duties continue. Canada and Mexico ceased retaliatory tariffs against the US in 2006. On 15 April 2010, the European Union published in Commission Regulation (EC) 305/2010 a revised list of US exports subject to trade sanctions. Effective 1 May 2010, the number of products subject to an additional 15percent import duty was increased. On 6 August 2010, Japan announced in its Press Release that it would extend countermeasures against the US (WT/DS217/234). US – Upland Cotton (Article 4.11 SCM): level of suspension authorized: variable annual amount based on a formula (US$147,4 million for 2006); cross retaliation: yes, if total level of applied countermeasures exceeds a variable threshold (US$406 million for 2006). Status of implementation: countermeasures not currently imposed. The parties notified a MoU and a framework Agreement (WT/DS267/45). US – Upland Cotton (Article 7.10 of the SCM Agreement) level of suspension authorized US$147.3 million per year; cross retaliation: Yes, if total level of applied countermeasures exceeds a variable threshold (US$406 million for 2006). The parties notified a MoU and a framework agreement (WT/ DS267/45). US – 1916 Act: level of suspension authorized: variable annual level not to exceed quantified. level of nullification or impairment sustained by the EC as a result of the 1916 Act; cross retaliation: not requested. Status of implementation: countermeasures not currently imposed. On 19 May 2003, legislation repealing the 1916 Act was introduced in the US Senate. Other bills repealing the 1916 Act were introduced in the US House of Representatives on 4 March 2003 (WT/DSB/M/178).

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US – Gambling level of suspension authorized: US$21 million annually; cross retaliation: yes. Status of implementation: countermeasures not currently imposed and cannot be imposed insofar as the US has modified its schedule of services commitments through the procedures of Article XXI of the GATS. At the DSB meeting on 24 April 2012, Dominica read a statement on behalf of Antigua and Barbuda which stated that the United States was not in compliance with the ruling of the panel, the Appellate Body and the compliance panel. Antigua and Barbuda had formally notified the United States of its desire to seek recourse to the good offices of the Director-General in finding a mediated solution to this dispute. Antigua and Barbuda requested that this matter remain under the DSB’s surveillance (WT/DS285). US – Zeroing (EC): Following successive joint requests for a suspension of the Arbitrator’s work, the EU and the US informed the DSB of a Memorandum envisioning a roadmap to solve the dispute. On 22 June 2012, the European Union withdrew its request for authorization to suspend concessions or other obligations pursuant to Article 22.2 of the DSU. The withdrawal followed the completion by the United States of the steps undertaken pursuant to the roadmap. On 2 July 2012, the Chairman of the Arbitrator informed the DSB that the Arbitrator had received a joint communication from the parties in which they stated that as the EU had withdrawn its request under Article 22.2 of the DSU, the US no longer made objections under Article 22.6 of the DSU. Therefore the parties requested the Arbitrator to notify the DSB that it was not necessary for it to issue an award in this dispute. Pursuant to this joint communication, the Arbitrator considered that it was not necessary for it to issue a decision and that it had completed its work (WT/DS294). US – Zeroing (Japan): Following successive joint requests for a suspension of the Arbitrator’s work, Japan and the US informed the DSB of a Memorandum of Understanding regarding this dispute. On 3 August 2012 Japan withdrew its request for authorization to suspend concessions or other obligations pursuant to Article 22.2 of the DSU pursuant the Memorandum of Understanding. On 2 July 2012, the Chairman of the Arbitrator informed the DSB that the Arbitrator had received a joint communication from the parties in which they stated that as the EU had withdrawn its request under Article 22.2 of the DSU, the US no longer made objections under Article 22.6 of the DSU. Therefore the parties requested the Arbitrator to notify the DSB that it was not necessary for it to issue an award in this dispute. Pursuant to this joint communication, the Arbitrator considered that it was not necessary for it to issue a decision and that it had completed its work (WT/DS322).

Chapter Eleven Monitoring Compliance with the Decisions of Human Rights Courts: The Inter-American Particularism Magnus Jesko Langer and Elise Hansbury

I.  Introduction A peculiar feature of the practice of the Inter-American Court of Human Rights (IACtHR) is its role in supervising the implementation of its decisions. The Court considers that an inherent aspect of its judicial function is to engage in compliance monitoring.1 This supervisory role is interesting in many respects, particularly because it raises a series of questions that lie at the heart of the tension between diplomatic (or political) and judicial means of dispute settlement. As a general matter, there seems to be a correlation between the relative increase in the Court’s activity and the decreasing role played by the body to which this supervisory function was legally devolved, namely the General Assembly of the Organisation of American States (OAS). Most often, this body only takes note of the Court’s reports and, in rare cases, calls on Member States to comply with the Court’s decisions. This relatively passive attitude may have repercussions on the Court’s authority, which could be negatively impacted if a State does not comply (or delays compliance) with a judgment and no action is taken by the General Assembly. This explains, in part, why the Court considers its involvement in implementation matters as an inherent part of its function. This said, the Court’s new activity has also a major drawback. It has led to a radical increase in the Court’s workload, which in turn may affect the effectiveness of the overall judicial system if the Court does not receive sufficient financial resources. 1

 I/A Court H.R., Case of Baena Ricardo et al. v. Panama, Competence. Judgment of 28 November 2003, Series C No. 104, at § 72.

214   Magnus Jesko Langer and Elise Hansbury On a more fundamental level, the pro-activeness of the IACtHR reveals an institutional gap within the OAS system that the Court has sought to fill but that, in practice, may prove to be beyond what Member States are ready to bear. In this context, this chapter argues that the role of the General Assembly of the OAS in supervising compliance with the Court’s decisions should be strengthened. This institutional evolution thus outlined reveals tensions between the diverse actors involved in the settlement of human rights disputes within the OAS system. On the one hand, Member States of the OAS appear in different capacities before OAS organs, usually the political organs, but also as defendant States in cases before the IACtHR (II). On the other hand, the IACtHR itself seeks to enhance the effectiveness of the human rights system by adopting progressive methods that may not receive effective support by the political organs of the OAS (III). This dialectic sheds light on the recent developments within the OAS system in connection with the enforcement of decisions rendered by the IACtHR (IV).

II.  The Ambivalent Role of States in the Human Rights System Modern international systems for the protection of human rights focus primarily on the actions of States with respect to individuals within their territory or under their control.2 The three main regional systems for the protection of human rights – the African, European and Inter-American systems – have developed in this respect various procedures – most prominently judicial bodies for the settlement of disputes3 – with the aim of fostering greater respect for human rights and creating an impetus for achieving democratic governance.4 The central role played by States reveals at the same  Article 1, American Convention on Human Rights, “Pact of San José”, San José, 22 November 1969, 1144 UNTS. 123 [ACHR]; Article 1, Convention on the Protection of Human Rights and Fundamental Freedoms, as amended by Protocols Nos. 11 and 14, Rome, 4 November 1950, 213 UNTS. 222 [ECHR]; Article 1, African Charter on Human and Peoples’ Rights, Banjul, 27 June 1989, 21 I.L.M. 58 [ACHPR]. 3  Article 33 ACHR; Article 19 ECHR; Article 30 ACHPR; Protocol to the African Charter on Human and People’s Rights on the Establishment of an African Court on Human and People’s Rights, 9 June 1998, OAU Doc. OAU/LEG/EXP/AFCHPR/PROT (III). 4  For example, the Preamble of the American Convention on Human Rights expresses the intention of the State Parties to reaffirm “their intention to consolidate in this hemisphere, within the framework of democratic institutions, a system of personal liberty and social justice based on respect for the essential rights of man.” See more generally on the relation between democracy and human rights, Héctor Gros Espiell, “La Democracia en el Sistema Interamericano” in Boutros Boutros-Ghali Amicorum Discipulorumque Liber – Paix, développements, démocratie – Peace, development, democracy (Brussels: Bruylant, 1998), at 1121; 2

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time possible tensions between their common objective to create a regional public order of human rights (the State-enforcer, B) and the eventuality of being accused in front of an international adjudicatory body for the violation of human rights (the State-defendant, A). Although the following considerations apply generally to the three main regional systems, special emphasis will be put on the Inter-American system, which is the main focus of this chapter.5 A.  The Individual Dimension: The State-Defendant Under the American Convention on Human Rights (ACHR), States Parties grant all persons under their jurisdiction the rights and freedoms enshrined in the Convention. This involves an obligation to respect the rights and freedoms provided therein but also the commitment to set the conditions for the full and effective enjoyment of these rights and freedoms.6 The latter obligation is further specified in Article 2 ACHR, which states that the Parties to the Convention undertake to give domestic legal effect to the rights and freedoms enshrined in the Convention by adopting legislative or other measures within their legal order to that effect. This obligation entails, inter alia, the adoption of such legislative measures and practices necessary to comply with the Inter-American decisions and orders.7 Accordingly, [t]he object and purpose of the American Convention is the effective protection of human rights. The Convention must, therefore, be interpreted so as to give it its full meaning and to enable the system for the protection of human rights entrusted to the Commission and the Court to attain its “appropriate effects.”8

Amaya Úbeda de Torres, Democracia y derechos humanos en Europa y en América. Estudio de los sistemas europeo e interamericano de protección de los derechos humanos (Madrid: Reus, 2007). 5  For an analysis of the European system, see Andrew Drzemczewski, “La prévention des violations des droits de l’homme: Les mécanismes de suivi du Conseil de l’Europe”, Rev. trim. dr. h. (2000): 386–428. For the African system, refer to Habib Gherari, “Responsibility for Violations of Human Rights Obligations: African Mechanisms”, in The Law of International Responsibility, eds. James Crawford, Alain Pellet and Simon Olleson (Oxford: Oxford University Press, 2010), at 775–789; Frans Viljoen and Lirette Louw, “State Compliance with the Recommendations of the African Commission on Human and Peoples’ Rights” 101 Am. J. Int’l L. (2007): 1–34. 6  Article 1 ACHR; I/A Court H.R., Case of Velásquez-Rodríguez v. Honduras, Merits. Judgment of 29 July 1988, Series C No. 4, at §§ 160–168. 7  Article 2 ACHR; I/A Court H.R., Case of García-Prieto et al. v. El Salvador, Preliminary Objections, Merits, Reparations, and Costs. Judgment of 20 November 2007, Series C No. 168, Concurring Opinion of Judge García-Ramírez, at § 4. 8  I/A Court H.R., Case of Godínez-Cruz v. Honduras, Preliminary Objections. Judgment of 26 June 1987, Series C No. 3, at § 33.

216   Magnus Jesko Langer and Elise Hansbury The interpretation of the rights and freedoms enshrined in the American Convention is thus governed by the principle of effectiveness (effet utile).9 The Court has inferred from this system of positive obligations, based on Articles 1 and 2 of the Convention, the right to exercise a “control of conventionality” binding upon the judicial power of the contracting Parties. The Judicial Power, in this sense, is internationally obligated to exercise “control of conventionality” ex officio between the domestic norms and the American Convention, evidently in the framework of its respective jurisdiction and the appropriate procedural regulations. In this task, the Judicial Power must take into account not only the treaty, but also the interpretation that the InterAmerican Court, as the final interpreter of the American Convention, has given it.10

It is therefore not surprising that, under the ACHR, the Parties that have accepted the compulsory jurisdiction of the IACtHR in accordance with Article 62 ACHR11 have also the specific obligation to comply with the judgments rendered by the Court in all cases to which they are parties.12 On this basis, defendant States found in breach of the ACHR are expected to enforce and execute sponte sua the final judgments of the Court, reflecting the general absence in international law of enforcement mechanisms of international judicial decisions. This general framework underlines the central role played by States in the implementation of the human rights obligations under the ACHR. In accordance with the general principle that States are obliged to repair any breach of an international obligation,13 enshrined in Article 63, ­paragraph 1  I/A Court H.R., Case of Velásquez Rodríguez v. Honduras, Preliminary Objections. Judgment of 26 June 1987, Series C No. 1, at § 30; I/A Court H.R., Case of González et al. (“Cotton Field”) v. Mexico, Preliminary Objections, Merits, Reparations and Costs. Judgment of 16 November 2009, Series C No. 205, at § 65. 10  I/A Court H.R., Case of Gomes-Lund et al. (Guerrilha do Araguaia) v. Brazil, Preliminary Objections, Merits, Reparations and Costs. Judgment of 24 November 2010, Series C No. 219, at § 176. See also, I/A Court H.R., Case of Almonacid Arellano et al. v. Chile, Preliminary Objections, Merits, Reparations and Costs. Judgment of 26 September 2006, Series C No. 154, at § 119. 11  To date, out of the twenty-five States that have ratified or adhered to the ACHR, twentyone have accepted the compulsory jurisdiction of the Court: Argentina, Barbados, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Uruguay, and Venezuela. See http://www.corteidh.or.cr/denuncias_consultas.cfm (last accessed on 25 February 2012). 12  See Article 68 § 1 ACHR. 13  I/A Court H.R., Case of Velásquez Rodríguez v. Honduras, Reparations and Costs. Judgment of 21 July 1989, Series C No. 7, at § 25. At the international level see, for instance, Factory at Chorzów, Jurisdiction, [1927] P.C.I.J., Series A, No. 9, at 21; Factory at Chorzów,  9

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ACHR, the IACtHR has ordered remedial measures such as pecuniary damages, but also non-pecuniary damages.14 The Court has stated that this norm grants it “a wide margin of judicial discretion” to determine the measures to repair all the consequences of the violation.15 Apart from individual measures destined to repair any damages suffered directly by a victim or a group of individuals related to the victim, usually identified as the next of kin, the Court is also increasingly ordering measures of satisfaction and non­repetition of a general and objective character, ranging from the renaming of a public place in commemoration of the victim to the adoption or modification of the relevant legislation in order to secure the effective enjoyment of rights and freedoms. According to some studies, the Court orders remedial measures aimed at satisfying four central objectives: the reparation of the rights impaired, the prevention of future violations, the investigation and punishment of human rights violations and the protection of victims and witnesses.16 The Court’s approach to reparations, namely that “the reparation must be designed to change [the specific] situation, so that their effect is not only of restitution, but also of rectification,”17 has been qualified by certain authors to be “to say the least, innovative and forward-looking.”18 Thus, the State found in breach of the Convention and ordered to repair the damage created is responsible for the implementation of the judgment of the Court Merits, [1928] P.C.I.J., Series A, No. 17, at § 47; Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion, [1949] I.C.J. Reports, at § 184; LaGrand (Germany v. United States of America), Judgment, [2001] I.C.J Reports, 27 June 2001, at 466, § 48. See generally, James Crawford, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries (Cambridge: Cambridge University Press, 2002), at 201. 14  In accordance with Article 63 § 1 ACHR in fine: “It shall also rule, if appropriate, that the consequences of the measure or situation that constituted the breach of such right or freedom be remedied and that fair compensation be paid to the injured party” (emphasis added). On the variety of measures ordered by the Court, see Carlos M. Ayala Corao, La ejecución de sentencias de la Corte Interamericana de derechos humanos (Universidad de Talca: Estudios Constitucionales, año 5, 2007). 15  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, Competence, at § 64. 16  Fernando Basch et al., “The Effectiveness of the Inter-American System of Human Rights Protection: A Quantitative Approach to its Functioning and Compliance with its Decisions” 12 SUR – Int’l J. Hum. Rts. (2010): 12. 17  I/A Court H.R., Case of González et al. (“Cotton Field”) v. Mexico, at § 450. 18  Laurence Burgorgue-Larsen and Amaya Úbeda de Torres, The Inter-American Court of Human Rights, Case Law and Commentary (Oxford: Oxford University Press, 2011), at 224. See also Amaya Úbeda de Torres, “La complexité de mise en œuvre des arrêts de la Cour interaméricaine, à propos de l’exécution de l’arrêt Barrios Altos (Chumbipuma Aguirre) c/ Pérou” in Réparer les violations graves et massives des droits de l’homme: la Cour interaméricaine, pionnière et modèle?, ed. Elisabeth Lambert Abdelgawad and Kathia Martin-Chenut (Paris: UMR, 2010), at 135.

218   Magnus Jesko Langer and Elise Hansbury as required by its international obligations, which cannot be limited by “the defects, imperfections or deficiencies of [its] national law.”19 In practice, however, this approach raises some difficulties. Aside from the possibility that a State may not accept the decision of the IACtHR and refuse to give it effect, the implementation of an international judicial decision may be rendered difficult due to other factors. For instance, State compliance – total compliance, partial compliance, or non-compliance – with a judgment of the Court of San José appears to be largely dependent on the type of remedy or the combination of different remedies ordered by the Court. Recent studies on compliance with IACtHR judgments have found that States generally comply more promptly with individual measures than with general measures, especially when they involve changes of legislation or even of the Constitution.20 Whereas compliance with the payment of pecuniary compensation – either for material or moral damages – is relatively straightforward and compliance rates are generally high,21 States seem more reluctant to comply with non-pecuniary remedies such as public apologies, the renaming of streets or the building of commemorative monuments.22 Notwithstanding these differences, compliance with individual measures seems to be relatively high across the region.23 In contrast, compliance with measures of a general nature, especially those aiming at preventing future violations,  I/A Court H.R., Case of Velásquez-Rodríguez v. Honduras, Reparations, at § 30.  Laurence Burgorgue-Larsen and Amaya Úbeda de Torres, at 187–191; Basch, “The Effectiveness of the Inter-American System of Human Rights Protection”, at 19. 21  The Court indicated in 2010, “the payment of pecuniary compensation is fully completed in about 80% of the judgments.” OAS, Annual Report of the Inter-American Court of Human Rights 2010 (San José, 2011), at 12. All annual reports are available on the Inter-American Court’s website: http://www.corteidh.or.cr/informes.cfm (last accessed 16 March 2012). 22  See for instance, I/A Court H.R., Case of Cantoral-Benavides v. Peru, Reparations and Costs. Judgment of 3 December 2001, Series C No. 88, at § 79; I/A Court H.R., Case of Las Palmeras v. Colombia, Reparations and Costs. Judgment of 26 November 2002, Series C No. 96, at § 75; I/A Court H.R., Case of Myrna Mack-Chang v. Guatemala, Merits, Reparations and Costs. Judgment of 25 November 2003, Series C No. 101, at § 279; I/A Court H.R., Case of La Cantuta v. Peru, Merits, Reparations and Costs. Judgment of 29 November 2006, Series C No. 162, at §§ 233–236; I/A Court H.R., Case of Goiburú et al. v. Paraguay, Merits, Reparations and Costs. Judgment of 22 September 2006, Series C No. 153, at §§ 173–174; I/A Court H.R., Case of the Pueblo Bello Massacre v. Colombia, Merits, Reparations and Costs. Judgment of 31 January 2006, Series C No. 140, at §§ 277–279; I/A Court H.R., Case of the Ituango Massacres v. Colombia, Preliminary Objections, Merits, Reparations and Costs. Judgment of 1 July 2006, Series C No. 148, at § 405; I/A Court H.R., Case of Radilla-Pacheco v. Mexico, Preliminary Objections, Merits, Reparations and Costs. Judgment of 23 November 2009, Series C No. 209, at § 351; I/A Court H.R., Case of the “Las Dos Erres” Massacre v. Guatemala, Preliminary Objections, Merits, Reparations and Costs. Judgment of 24 November 2009, Series C No. 211, at §§ 257–259. 23  Basch, “The Effectiveness of the Inter-American System of Human Rights Protection”, at 19. 19 20

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through legal reforms, as well as those aiming at investigating and punishing those responsible for human rights violations,24 is much lower even though in some cases, States have gone as far as to enact the necessary legislative or even introduce constitutional changes.25 For instance, Chile introduced a constitutional amendment following the The Last Temptation of Christ case.26 The prosecution and conviction of the former Peruvian president, Alberto Fujimori, in 2009 provides another example of the positive effects of the dialogue engaged between the IACtHR and the Peruvian Constitutional Court regarding the nullity ab initio of Peruvian amnesty laws.27 Nevertheless, the persistent refusal (or in some cases the incapacity due to a lack of resources)28 by some States to comply with measures of a general nature does present a serious challenge to the overall effectiveness of the human rights system, and in particular the authority of the Court, to the extent that the Court runs the risk of becoming marginalized. This contrasted picture can be explained by several factors. The first observation is that the IACtHR is quite often imposing a whole set of remedial measures, in many cases combining individual and general measures.29 Contrary to the approach adopted by the ECtHR, which leaves it to the discretion of the State to adopt the remedial measures it considers most appropriate,30 the IACtHR is most meticulous in imposing very specific measures, often to be implemented within a specific period of time. As a result, the implementation of a judgment, and especially the measures aimed at putting an end to a prevailing culture of impunity, may take several years, which can explain why a case may remain on the docket of the Court for up to ten years.

 According to Basch, the degree of compliance with these orders is respectively of 14% and 10%, ibid., at 18. 25  Ibid., at 19. 26  I/A Court H.R., Case of “The Last Temptation of Christ” (Olmedo-Bustos et al.) v. Chile, Merits, Reparations and Costs. Judgment of 5 February 2001, Series C No. 73; I/A Court H.R., Case of “The Last Temptation of Christ” (Olmedo-Bustos et al.) v. Chile, Monitoring Compliance with Judgment. Order of the Inter-American Court of Human Rights of 28 November 2003. 27  Sala Penal Especial, Corte Suprema de Justicia, Sentencia Alberto Fujimori Fujimori, Expediente No AV-19-2001, 7 April 2009. On this question, see more generally, Christina Binder, “The Prohibition of Amnesties by the Inter-American Court of Human Rights”, 12 German L. J. (2011): 1203–1230. 28  Nicholas Turner and Vesselin Popovski, “Human Rights in the Americas: Progress, Challenges and Prospects”, in Human Rights Regimes in the Americas, eds. Mónica Serrano and Vesselin Popovski (New York/Tokyo: UNU Press, 2010), at 236. 29  See for instance the cases mentioned above, supra. 30  Darren Hawkins and Wade Jacoby, “Partial Compliance: A Comparison of the European and Inter-American Courts of Human Rights”, 6 J. Int’l L. & Int’l Rel. (2010–2011): 51. 24

220   Magnus Jesko Langer and Elise Hansbury The Latin American context also plays a significant role in this respect. Whereas the ECtHR has historically only been confronted with relatively less widespread violations of human rights and freedoms,31 the IACtHR has had to deal from its inception with mass violations of human rights, ranging from enforced disappearances to extra judicial executions orchestrated by the State, and with underlying systemic issues that needed to be addressed in order to prevent those violations from being repeated.32 While this background may explain why the IACtHR has adopted a less deferential attitude towards State discretion than the ECtHR, the defiant reaction adopted by some States towards the measures ordered by the Court reveals at the same time the difficulties that those States have in dealing with their past, especially when it comes to prosecute and sanction the very public officials responsible for human rights violations as these might still hold a public function.33 It is true that the new democracies, in an effort to overcome the dark past of earlier dictatorship or military regimes, adhered to the ACHR and readily accepted the compulsory jurisdiction of the IACtHR in order to signal to their own population that they are committed to democratic governance.34 Yet, their reluctance to give effect to IACtHR judgments touching on systemic issues reveals the inherent structural problems of a system that essentially relies on spontaneous compliance. It therefore comes as no surprise that regional human rights systems, such as the Inter-American system, provide for other means to secure compliance with the decisions of their adjudicatory bodies. B.  The Collective Dimension: The State-Enforcer The regional systems for the protection of human rights create obligations of an objective character, transcending the individual interests of any particular Member State. These human rights conventions are the archetype of  Nevertheless, the Court has had to face more serious violations of human rights in more recent years, especially in cases of enforced disappearances. See on this question William Abresch, “A Human Rights Law of Internal Armed Conflict: The European Court of Human Rights in Chechnya”, 16(4) Eur. J. Int’l L. (2005): 741–767. 32  See for instance I/A Court H.R., Case of González et al. (“Cotton Field”) v. Mexico, at § 450. See also James L. Cavallaro and Stephanie Erin Brewer, “Reevaluating Regional Human Rights Litigation in the Twenty-First Century: The Case of the Inter-American Court” 102 Am. J. Int’l L. (2008): 772–774. 33  See for instance the case of Brazil, Glenda Mezarobba, “Between Reparations, Half Truths and Impunity: The Difficult Break with the Legacy of the Dictatorship in Brazil” 13 Sur – Intl. J. Hum. Rts. (2011): 7–25. 34  Hélène Tigroudja, “Propos conclusifs – la légitimité du “Particularisme interaméricain des droits de l’homme” en question”, in Le Particularisme Interaméricain des droits de l’homme, eds. Hélène Tigroudja and Ludovic Hennebel (Paris: Pedone, 2009), at 404. 31

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erga omnes partes obligations whose respect is the concern of all Member States, thus breaking the traditional paradigm of reciprocal obligations.35 As such, the Inter-American human rights system creates an international public order for the protection of human rights, and all Member States have an interest in its promotion and observance by all other Parties.36 As early as 1982, in its second advisory opinion, the Court emphasized the special character of human rights treaties, based on both the international and the European jurisprudence, stating that (. . .) modern human rights treaties in general, and the American Convention in particular, are not multilateral treaties of the traditional type concluded to accomplish the reciprocal exchange of rights for the mutual benefit of the contracting States. Their object and purpose is the protection of the basic rights of individual human beings irrespective of their nationality, both against the State of their nationality and all other contracting States.37

As a result, the American Convention, inspired by a set of superior common values, creates a system of collective guarantee based on objective obligations, which “govern mutual interests between and among the States Parties.”38 Within this framework, all Member States have procedural rights under the ACHR providing for standing in contentious proceedings against other Member States; but they arguably also have a collective obligation to supervise the implementation of IACtHR decisions by any Member State. Nothing prevents a Member State of the ACHR that has accepted the compulsory jurisdiction of the Court to lodge an inter-State complaint before the Court in accordance with Article 61 of the Convention.39 Any Member State can  I/A Court H.R., Interpretation of the American Declaration of the Rights and Duties of Man within the Framework of Article 64 of the American Convention on Human Rights, Advisory Opinion OC-10/89 of 14 July 1989, Series A No. 10, at § 38. 36  See Emmanuel Decaux, “Le territoire des droits de l’homme” in Liber Amicorum MarcAndré Eissen (Bruxelles: Bruylant, 1995), at 69. 37  I/A Court H.R., The Effect of Reservations on the Entry into Force of the American Convention on Human Rights (Arts. 74 and 75), Advisory Opinion OC-2/82 of 24 September 1982, Series A No. 2, at §§ 29–31. 38  I/A Court H.R., Case of the Constitutional Court v. Peru, Competence. Judgment of 24 September 1999, Series C No. 55, at § 41. 39  Article 61, § 1 ACHR reads as follows: “Only the States Parties and the Commission shall have the right to submit a case to the Court.” However, in accordance with Article 61, § 2, access to the Court is not direct, since a complaining State must first seek to resolve the dispute by submitting a complaint to the Inter-American Commission on Human Rights (Article 48–50 cum Article 45 ACHR). In order for an inter-State dispute to reach the Court, both States must have accepted the jurisdiction of the Commission (Article 45 ACHR) and of the Court (Article 62 ACHR). See further François Voeffray, L’actio popularis ou la défense de l’intérêt collectif devant les juridictions internationales (Paris: PUF, 2004), at 160–162. 35

222   Magnus Jesko Langer and Elise Hansbury lodge a complaint if it considers that another State is not implementing correctly the obligations arising under the Convention or if it alleges breaches of human rights standards protected under the Convention. In that respect, it is irrelevant whether the complaining State is directly injured by the actions of the other State, thus underlining the objective character of human rights obligations and setting aside the traditional requirement of the link of nationality in classical diplomatic protection cases. What is less clear is whether a State may lodge a complaint against another State on the basis of its noncompliance with a judgment of the Court, constituting a new and independent breach of the Convention.40 As discussed further below, the IACtHR considers that it is entitled to supervise compliance with its judgments, notwithstanding the general competence of the General Assembly of the OAS in this respect. But one may doubt the usefulness of such complaints at least when compared to the use of diplomatic means, either at the bilateral level or, more importantly, through the political organs of the OAS. This conclusion is strengthened by the fact that States rarely make use of their capacity to lodge inter-State complaints under existing regional human rights systems (no such complaint has been brought in the ACHR context).41 Therefore, it  In fact, it could well be argued that such non-compliance constitutes a continuous breach of the human rights impaired in the initial decision of the Court. More generally, see the tentative remarks given by Professor Rosenne concerning the question of third party standing to claim compliance with a binding decision of the International Court of Justice, Shabtai Rosenne, “Decisions of the International Court of Justice and the New Law of State Responsibility” in International Responsibility Today. Essays in Memory of Oscar Schachter, ed. Maurizio Ragazzi (Leiden: Martinus Nijhoff Publishers, 2005), at 307. 41  Article 45 § 1 ACHR. For possible reasons on the absence of inter-State complaints, see Voeffray, at 162–163. It has, however, been pointed out by some authors that the Court, through its advisory jurisdiction, settled what seemed to be real contentious cases between the United States of Mexico and the United States of America, who are not party to the American Convention. In its Advisory Opinions No. 16 and 18, the Court, while responding to a question of a general interest submitted by the State of Mexico, came to determine the legal framework applicable to the right to consular assistance of Mexican detainees in American prisons as well as the standard of treatment of Mexican irregular migrant workers on American soil. This was rendered possible due to the Court’s first Advisory Opinion where it extended its advisory jurisdiction over OAS Member States not Parties to the American Convention, through a systemic interpretation of its inherent powers as the main judicial institution of the OAS. See Hélène Tigroudja, «La fonction consultative de la Cour interaméricaine des droits de l’homme» in La fonction consultative des juridictions internationales, ed. Alain Ondoua et David Szymczak (Paris: Pedone, 2009), at 67–85; I/A Court H.R., “Other Treaties” subject to the Advisory Jurisdiction of the Court (Art. 64 American Convention on Human Rights), Advisory Opinion OC-1/82 of 24 September 1982. Series A No. 1; I/A Court H.R., The Right to Information on Consular Assistance in the Framework of the Guarantees of the Due Process of Law, Advisory Opinion OC-16/99 of 1 October 1999. Series A No. 16; I/A Court H.R., Juridical Condition and Rights of the Undocumented Migrants, Advisory Opinion OC-18/03 of 17 September 2003. Series A No. 18. 40

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is necessary to analyse the compliance monitoring mechanisms under the ACHR, and the manner in which the relevant organs of the OAS have interpreted and applied the relevant provisions of the Convention.

III.  The Ambiguous Relationship between the Judicial and Political Organs The challenges involved in the implementation of IACtHR decisions were anticipated by the drafters of the ACHR. With these challenges in mind, a specific provision was inserted in the ACHR on the procedure to be followed to supervise State compliance with the judgments of the Court. Article 65 of the Convention sets out this procedure: To each regular session of the General Assembly of the Organization of American States the Court shall submit, for the Assembly’s consideration, a report on its work during the previous year. It shall specify, in particular, the cases in which a state has not complied with its judgments, making any pertinent recommendations.42

According to this provision, the General Assembly of the OAS has general supervisory powers and may adopt recommendations or decisions in order to induce non-complying States to comply with the Court’s judgments. The Court itself has, according to the ACHR, only the functional power to report on any cases in which a State has not complied with its judgments, and may formulate any ‘pertinent recommendations’ in that respect to the General Assembly. Despite the relatively clear distribution of supervisory powers between the Court and the Assembly, in practice, this latter exercised little meaningful control and seemed reluctant to apply political pressure on noncomplying States. In turn, this reluctance has led the IACtHR to adopt a much more proactive stance based on a progressive interpretation of Article 65 ACHR. The following sections will first examine how the IACtHR has interpreted and applied Article 65 ACHR (A), and then outline the role of the General Assembly and other political organs of the OAS with respect to compliance monitoring (B). A.  Judicial Means of Monitoring Compliance In general, international tribunals become functus officio once they have rendered a final and definitive judgment in a contentious proceeding. Devoid of any competences to enforce and execute their decisions, tribunals do not engage in compliance monitoring activities. This approach has also ­generally  Article 65 ACHR.

42

224   Magnus Jesko Langer and Elise Hansbury been followed in the regional human rights frameworks.43 As mentioned above, the Inter-American system has followed a different approach, attributing competence to the IACtHR to report annually to the General Assembly of the OAS on whether States have complied with its judgments. However, the wording of Article 65 ACHR does not as such empower the Court to go beyond the gathering of information on this question. Yet, the IACtHR has adopted a different interpretation according to which it would be entitled to open, after its final judgment, a new formal compliance monitoring procedure, implying that the Court remains seized of all cases until it finds in a formal decision that all measures have been complied with.44 In its formative years it did so by starting a written procedure asking concerned States to supply information on their level of compliance and providing the opportunity to the Inter-American Commission and individual victims to comment on this issue. Since 2007, the written phase has been supplemented, when necessary, by an oral procedure (either private or public hearings) giving all affected parties to the dispute the opportunity to submit observations.45 This continuous and uninterrupted practice of the Court, which emerged in the grey zone of an indeterminate provision of the ACHR (and prior to 2005, without any further guidance in the Statute or the Rules of Procedure) reflects the Court’s interpretation of its inherent powers. At the same time, it raises a number of questions as regards the effectiveness of this approach, the distribution of powers amongst the various organs of the OAS, and ultimately the acceptance by the Member States of the jurisdiction of the IACtHR. Whereas these questions will be addressed in more detail in the following sections, it seems useful at this point to analyse the dynamic approach followed by the Court, as spelled out in the Baena-Ricardo case. The IACtHR has constantly invited concerned States to report on their level of compliance. As indicated above, the remedial measures ordered in the Court’s decisions are very specific and leave little discretion – due to  Article 45 ECHR; Article 29 ACHPR.  Since its very first case, Velásquez-Rodríguez v. Honduras, the Court indicated in the dispositif of its decision on reparations and costs that it would remain seized of the case until full compliance with its decision: “Decides that the Court shall supervise the indemnification ordered and shall close the file only when the compensation has been paid.” I/A Court H.R., Case of Velásquez-Rodríguez v. Honduras, Reparations and Costs. Judgment of 21 July 1989, Series C No. 7, at § 60, point 5 of the operative part. After the defendant State has complied with the decision, the Court declares the case closed. See for instance I/A Court H.R., Case of Tristán-Donoso v. Panama, Monitoring Compliance with Judgment. Order of the Inter-American Court of Human Rights of 1 September 2010. 45  See OAS, Annual Report of the Inter-American Court of Human Rights 2007 (San José, 2008), at 40. The first private hearings were held in the Garrido and Baigorria v. Argentina, Blake v. Guatemala, and Paniagua Morales et al. v. Guatemala cases. 43 44

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the special nature of human rights treaties46 – to the responsible State as to how to remedy the breach. States are therefore expected to provide a precise account of the measures that have been adopted and the expected time frame for compliance in all cases of partial compliance or non-compliance. Then the Court will briefly indicate in a separate section of its annual report to the General Assembly all the cases in which total compliance has not been achieved, indicating as appropriate whether the situation is one of partial compliance, of non-compliance, or pending if no information has yet been submitted by the particular State. Until 2003, all States found in breach of the Convention in 2002 had voluntarily agreed to submit the required information to the Court. In 2003, however, the Republic of Panama challenged the competence of the Court to engage in such compliance monitoring through formal post-judgment procedures. This was the first (and only) such challenge to the Court’s supervisory powers. Panama had been found in breach of Articles 8, 9, 16 and 25 of the ACHR by the Court in the Baena-Ricardo case, involving the dismissal of 270 government employees who had participated in a demonstration for labour rights. It had been ordered to pay compensation on various counts and to reinstate, where possible, all concerned employees in the government services.47 Consistent with its previous practice, the Court furthermore indicated “that it [would] supervise compliance with th[e] judgment and that it [would] close the case only after such compliance.”48 Thereafter, the Court did not hesitate to remind Panama – through official notes – that it was required to comply with the order within the fixed time-limits indicated in the judgment and pressing the State to refrain from causing further harm to the victims by postponing the payment.49 Although Panama submitted information concerning the payment of moral damages, it did not pay other pecuniary remedies or submit any information relevant to the determination of its level of compliance. As a result, the Court adopted a first order on compliance enjoining Panama to submit all necessary information within a specific period of time,50 followed several months later by a second order.51 At this point, Panama claimed that the Court lacked competence to monitor compliance with its own judgments, alleging inter alia that the  I/A Court H.R., Case of the Constitutional Court v. Peru, Competence, at § 47.  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, Competence, at § 214. 48  Ibid., at § 214, point 10 of the operative part. 49  See for instance the letter of May 26, 2001, of the Secretary of the Court to the Chancellor of Panama mentioned in Case of Baena-Ricardo et al. v. Panama. Monitoring Compliance with Judgment. Order of 21 June 2002, at § 4. 50  Ibid., point 1 of the operative part. 51  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama. Monitoring Compliance with Judgment. Order of 22 November 2002. 46 47

226   Magnus Jesko Langer and Elise Hansbury ­ ost-judgment stage is of the exclusive competence of the General Assembly p of the OAS and that the Court had exceeded its powers (doctrine of excès de pouvoir). Panama also argued that Article 65 imposes no positive obligation upon Member States to submit any information, and also, that States are not required under the ACHR to comply with decisions of the Court other than final judgments in the sense of Article 68, paragraph 1 of ACHR.52 In the absence of a more specific provision in the Court’s Statute or Rules of Procedure concerning the procedure to be followed during compliance monitoring, the Court solved the questions raised by Panama by adopting essentially a systemic53 and teleological54 interpretation of the relevant provisions of the Convention, in particular Articles 33, 62, paragraphs 1 and 3, and 65 of the ACHR.55 In accordance with its inherent attribution to determine the scope of its own competence (Kompetenz-Kompetenz),56 the Court concluded that: Its jurisdiction includes the authority to administer justice; it is not restricted to stating the law, but also encompasses monitoring compliance with what has been decided. It is therefore necessary to establish and implement mechanisms or procedures for monitoring compliance with judicial decisions, an activity that is inherent in the jurisdictional function.57  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, Competence, at § 54.  Ibid., at §§ 84–85. The Court briefly proceeded to a literal interpretation of Article 65, having rapid recourse to additional means of interpretation by resorting to the travaux préparatoires of the Convention in order to elucidate the common intention of the Member States. The Court considered that “when adopting the provisions of Article 65 of the Convention, the intention of the States was to grant the Court the authority to monitor compliance with its decisions [. . .], because it is not possible to apply Article 65 of the Convention unless the Court monitors compliance with its decisions.” Ibid., at § 90. 54  Ibid., at § 95. 55  Ibid., at § 100. 56  In accordance with Article 62 § 3 ACHR. See also I/A Court H.R., Case of Ivcher-Bronstein v. Peru, Competence. Judgment of 24 September 1999, Series C No. 54, at § 36; I/A Court H.R., Case of the Constitutional Court v. Peru, Competence, at § 35; I/A Court H.R, Case of Hilaire v. Trinidad and Tobago, Preliminary Objections. Judgment of 1 September 2001, Series C No. 80, at §§ 82 and 86–88; I/A Court H.R., Case of Benjamin et al. v. Trinidad and Tobago, Preliminary Objections. Judgment of 1 September 2001, Series C No. 81, at §§ 73 and 77–79; I/A Court H.R., Case of Constantine et al. v. Trinidad and Tobago, Preliminary Objections. Judgment of 1 September 2001, Series C No. 82, Competence, at § 73. 57  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, Competence, at § 72 (emphasis added, footnote omitted). The Court immediately added: “Monitoring compliance with judgments is one of the elements that comprises jurisdiction. To maintain otherwise, would mean affirming that the judgments delivered by the Court are merely declaratory and not effective. Compliance with the reparations ordered by the Court in its decisions is the materialization of justice for the specific case and, ultimately, of jurisdiction; to the contrary, the raison d’être for the functioning of the Court would be imperilled.” 52 53

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On this basis, the Court then set out the general procedure, which should find application so as to allow it to comply with its attribution to ascertain the state of compliance with its decisions in order to provide meaningful reports to the General Assembly. First, once a final judgment on the merits (and, as the case may be, on reparations and costs) has been rendered, the Court requests all relevant information from the responsible State. In line with the adversarial principle, the Court also receives observations submitted by the Commission and the victims or their legal representatives. Whereas the Court had so far conducted these proceedings in writing, in 2003, it expressly reserved the possibility to hold hearings if appropriate.58 During this stage of the procedure, the Court remains in constant contact with the parties, in particular the responsible State, issuing orders or sending communications to (. . .) express its concern in relation to aspects of the judgment pending compliance, to urge the State to comply with the Court’s decisions, to request detailed information on the measures taken to comply with specific measures of reparation, and to provide instructions for compliance, as well as to clarify aspects relating to execution and implementation of the reparations.59

Thus, the Court adopts a central role throughout the proceeding, including in gathering the relevant information but also in acting as a facilitator, suggesting alternative ways to address non-compliance.60 Second, the Court assesses the degree of compliance with respect to every remedy ordered in the judgment, adopting an order on compliance, which is then sent to the parties and published on a special page on the Court’s website. Third, the Court communicates its annual report to the attention of the General Assembly, and includes a specific section in its annual reports entitled “Contentious cases at the stage of monitoring compliance with judgment” where all cases under the Court’s supervision are listed.61 The report also contains more detailed, but  Ibid., at § 106.  Ibid., at § 105 (footnotes omitted). 60  The Court indicated in its 2010 Annual Report that “in the context of said hearings, which may be public or private, the Tribunal tries to placate the situation and, therefore, does not limit itself to take note of the information presented by the parties, but, under the principles to which it is adhered as a human rights court, among other aspects, suggests some alternatives to solve the case, calls the attention towards non-compliances that are defined by lack of willingness, promotes the preparation of compliance schedules for the parties involved and even offers its premises for the parties to hold conversations, which, on many occasions, are very difficult to arrange with the State involved.” OAS, Annual Report of the Inter-American Court of Human Rights 2010, at 5. 61  Ibid., at 82–86. See also Article 30 of the Statute of the IACtHR, Statute of the InterAmerican Court on Human Rights, O.A.S. Res. 448 (IX-0/79), O.A.S. Off. Rec. OEA/Ser.P/ IX.0.2/80, Vol. 1, at 98 reprinted in Basic Documents Pertaining to Human Rights in the 58 59

228   Magnus Jesko Langer and Elise Hansbury succinct information concerning each individual case, where the Court may indicate any pertinent recommendation for future action.62 Fourth, the Court does not close the file and remains seized of the case until total compliance has been stated. This allows the Court to continue calling the attention of the General Assembly to any persistent non-compliance by a responsible State in consecutive annual reports. Fifth, the Court indicates in its annual report all the cases where total compliance has been achieved, informing at the same time the General Assembly that it has closed the case file.63 This important evolution is even more remarkable if one considers that it is based on practice rather than on an explicit legal basis in the ACHR. This practice has been generally accepted by Member States – even if sometimes after a long period of time – and, as discussed in the next section, condoned by the General Assembly of the OAS. In 2003, the Court went as far as to suggest that a customary norm supporting the exercise of its supervisory powers had crystallized, as a result of both a general and repeated practice by all relevant actors (the Court, the States, and the General Assembly) and the necessary opinio juris communis (of the States).64 This observation, however, does not completely remove all doubts concerning the adequacy of such an ad hoc approach. As such, the Court was forced to elucidate its informal practice when Panama challenged its authority in this respect. In this sense Panama’s complaint pushed the Court to clarify its position in order to provide some legal certainty. Thereafter, the Court adopted a resolution, in 2005, indicating more precisely the ­procedure

Inter-American System, OEA/Ser.L.V/II.82 doc.6 rev.1, at 133 (1992). The Court occasionally also includes in its Annual Reports statistical data on the degree of compliance with its judgments, even incorporating graphics. See Annual Reports of 2009 and 2010. 62  For instance, the Court indicated in its 1994 Annual Report that it received no information regarding compliance from Suriname in the Aloeboetoe et al. and Gangaram Panday cases, and requested the General Assembly to urge Suriname to comply with its duty to collaborate with the Court on the issue of compliance monitoring. OAS, Annual Report of the Inter-American Court of Human Rights 1994 (San José, 1995), at 17–18. See further below under 3.2. 63  In its 2010 Annual Report for instance, the Court indicated that it “decided that the measures of reparation ordered in the cases of Herrera Ulloa v. Costa Rica and Tristán Donoso v. Panamá had been complied with fully.” OAS, Annual Report of the Inter-American Court of Human Rights 2010, at 12. 64  “Moreover, the Court’s authority to monitor compliance with its judgments and the procedure adopted to this end, are also grounded in the constant and standard practice of the Court and in the resulting opinio juris communis of the States Parties to the Convention [. . .] This opinio juris communis has been revealed because these States have shown a general and repeated attitude of accepting the monitoring function of the Court.” I/A Court H.R, Case of Baena-Ricardo et al. v. Panama, Competence, at § 102. See also at §§ 103–104.

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it would follow when engaging in compliance monitoring.65 In 2009, the Court took an additional step, amending its Rules of Procedure to include a specific provision on the “Procedure for Monitoring Compliance with Judgments and Other Decisions of the Court.”66 This provision stipulates (1) that the written procedure is the primary means of carrying out compliance monitoring; (2) that the responsible State is to submit a report; (3) that the victims or their legal representatives may submit their observations on the report; (4) that the Commission should thereafter present comments on the report and observations;67 (5) that the Court may require information from other sources, including expert opinions or reports, but also of amicus curiae;68 (6) that the Court may convene, as appropriate, the State, the victims’ representatives and the Commission to private or public hearings;69 and (7) that thereafter the Court shall determine the state of compliance and issue relevant orders.70 In conclusion, it may be observed that the IACtHR has engaged in a very broad interpretation of its mandate. Judge Cançado Trindade has recognized indeed that, under the Convention, the Court does not have ‘the duty to monitor compliance’.71 The Court has chosen to do so because of its conviction that this was the only way of safeguarding the effective implementation of the ACHR and securing to the victims an adequate right of access to justice. As stated by the Court, the “effectiveness of judgments depends on their execution. The process should lead to the materialization of the protection of the right recognized in the judicial ruling, by the proper application of this ruling.”72 However progressive the Court’s approach may be, the manner in which this result was ultimately achieved is not uncontroversial. In particular, it signals a shift in the balance established by the ACHR between the  I/A Court H.R., Applicability of Article 65 of the American Convention on Human Rights, Monitoring Compliance with Judgment. Order of the Inter-American Court of Human Rights of 29 June 2005. See in this respect Letizia Seminara, Les effets des arrêts de la Cour interaméricaine des droits de l’homme (Bruxelles: Bruylant, 2009), at 317–320. 66  Article 69 of the Rules of Procedure of the Inter-American Court of Human Rights, approved by the Court during its LXXXV Regular Period of Sessions, held from 16 to 28 November 2009. See: http://www.corteidh.or.cr/reglamento_eng.cfm (last accessed on 25 February 2012). 67  Article 69, § 1 of the Rules of the Court. 68  Article 69, § 2 of the Rules of the Court. 69  Article 69, § 3 of the Rules of the Court. 70  Article 69, § 4 of the Rules of the Court. Article 69, § 5 indicates further that this procedure applies equally to cases submitted by the Commission and by States, in accordance with Article 61, § 1 ACHR. 71  Laurie R. Tanner, “Interview with Judge Antônio A. Cançado Trindade, Inter-American Court of Human Rights” 31 Hum. Rts. Q. (2009): 993. 72  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, at § 73. 65

230   Magnus Jesko Langer and Elise Hansbury respective prerogatives of the Court and those of the political organs of the OAS. Even if the General Assembly would seem to have acquiesced in respect of the practice of the Court, the question remains whether the relatively low level of involvement of the General Assembly73 is a salutary evolution. The Court’s practice reveals indeed a significant institutional gap within the OAS system, which the Court has felt obliged to fill by adopting a proactive stance, representing yet another manifestation of the Inter-American particularism.74 In order to understand this gap, it is necessary to assess the role played by the political organs of the OAS. B.  Political Means of Monitoring Compliance As already mentioned, because of the objective and non-reciprocal character of the rights and freedoms enshrined in the ACHR, the Member States have created a system of collective guarantee where each State has a legal interest in seeing that all other Member States honour the obligations of the ACHR.75 These States can give effect to this system of collective guarantee through various means, either through direct bilateral diplomatic exchanges or through the specific supervisory mechanisms provided for in the ACHR. Member States that have consented to the compulsory jurisdiction of the IACtHR may lodge complaints against any other State that allegedly breaches its obligations under the Convention. For reasons discussed below, it is not surprising that to date no Member State has ever availed itself of this possibility. But aside from this judicial avenue,76 the Convention clearly specifies  Basch, “The Effectiveness of the Inter-American System of Human Rights Protection”, at 32; Laurence Burgorgue-Larsen and Amaya Úbeda de Torres, at 180. See also Tarciso Dal Maso Jardim, “Les difficultés et limites de mise en œuvre des réparations pour graves violations des droits de l’homme dans le système interaméricain”, in Réparer les violations graves et massives des droits de l’homme: la Cour interaméricaine, pionnière et modèle?, eds. Elisabeth Lambert Abdelgawad and Kathia Martin-Chenut (Paris: UMR, 2010), at 220; Bernard Duhaime, “Protecting Human Rights: Recent Achievements and Challenges” in Governing the Americas – Assessing Multilateral Institutions, ed. Gordon Mace, Jean-Philippe Therrien and Paul Haslam (Boulder/London: Lynne Rienner, 2007), at 143. 74  For further studies, see Hélène Tigroudja and Ludovic Hennebel, ed., Le particularisme interaméricain des droits de l’homme (Paris: Pedone, 2009). 75  The notion of “collective guarantee” has been employed by the IACtHR in various decisions, see supra. This position seems also to have been expressed by various Member States in meetings of the political organs of the OAS, where “several delegations referred to the role of the political organs as guarantors of the Convention”; see Report of the Committee on Juridical and Political Affairs on the Observations and Recommendations of the Member States regarding the Annual Report of the Inter-American Court of Human Rights, 8 May 2001, SP/CAJP-1790/91 rev. 1, at 4. 76  Under the OAS Charter, Member States can also seek to resolve their disputes by having resort to the Permanent Council, which may provide good offices (Article 85) in order to 73

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in its Article 65 that the General Assembly is the ultimate authority on matters of compliance and it is within this political organ – the highest political authority within the OAS – that the idea of collective guarantee should ideally materialize. Yet, the General Assembly has so far had little involvement in monitoring compliance with the Court’s judgments. In the next paragraphs, we discuss this involvement or lack thereof by reference to three main aspects. First, we survey the treatment of the Court’s annual reports by the political organs of the OAS. Second, we analyze the General Assembly’s practice in this connection. Third, we explore the various diplomatic means potentially available to the General Assembly to secure effective compliance with the Court’s judgments. According to Article 54 of the OAS Charter, the General Assembly is the supreme organ of the Inter-American system. Among its principal powers, the General Assembly considers the various reports submitted by the different organs composing the Inter-American system, including the annual reports of the IACtHR.77 However, before reaching the General Assembly, the reports of the IACtHR are first made available to the Permanent Council of the OAS through the Secretary General at least 90 days before the regular session of the General Assembly.78 Under Article 18 of the Rules of Procedure of the Permanent Council, the Committee on Juridical and Political Affairs (CJPA) is to consider the Court’s annual reports.79 After verifying that the report has been submitted in accordance with the formal requirements,80 the CJPA organises a meeting during which the President of the IACtHR can present the annual report and his observations, while all Member States are offered the opportunity to comment on the report.81 The CJPA will thereafter submit the annual report to the Permanent Council together with States’ comments as well as its own observations and recommendations.82 The Permanent Council examines these documents and submits them with its own observations and recommendations to the General facilitate the settlement of the dispute or recommend dispute settlement procedures such as the creation of ad hoc committees (Article 86). If such disputes cannot be settled, the Permanent Council must inform the General Assembly (Article 88). See also, Articles 9–11 of the Rules of Procedure of the Permanent Council, 27 August 2003, CP/doc. 1112/80 rev. 4 corr. 1. 77  Article 54 (f ) of the OAS Charter cum Article 65 ACHR. 78  Article 91 (f ) of the OAS Charter cum Article 35 (a) of the Rules of Procedure of the Permanent Council. 79  Article 18 of the Rules of Procedure of the Permanent Council. 80  Article 35 (a) and (b) of the Rules of Procedure of the Permanent Council. 81  See, for instance Observations and Recommendations by Member States on the Annual Report of the Inter-American Court of Human Rights, 24 May 2010, OEA/Ser.G, CP/CAJP-2890/10. 82  Article 18 in fine of the Rules of Procedure of the Permanent Council.

232   Magnus Jesko Langer and Elise Hansbury Assembly for consideration.83 The Council’s observations and recommendations are equally transmitted to the governments of the Member States at least 30 days before the General Assembly’s regular session.84 Thus, before reaching the General Assembly, the annual report of the IACtHR is channelled through two political bodies of the OAS, and the Member States have the possibility to comment inter alia on the issue of non-compliance with the judgments of the Court. In addition, any Member State can request that the observations and recommendations adopted by the Permanent Council receive separate consideration during the regular session of the General Assembly, in which case the General Committee of the General Assembly will address the matter, eventually reaching conclusions and adopting resolutions by a majority vote.85 Apart from the fact that the issue of non-compliance is discussed only once a year within the General Assembly forum, the competence of the General Assembly – acting as the highest supervisory authority – with respect to compliance monitoring may give the impression of a well-calibrated system to ensure respect by Member States of their obligations under the ACHR. However, the concrete actions taken by this body have overall been very discrete, notwithstanding the fact that the General Assembly was more assertive in the early years of the Court, and even more so prior to the creation of the Court, when it dealt with compliance with decisions of the Inter-American Commission.86 For instance, in the Aloeboetoe et al. and Gangaram Panday cases, the Court informed the General Assembly that Suriname had not submitted any information on its level of compliance and requested the Assembly to take action.87 The General Assembly adopted a resolution specifically urging Suriname to submit the necessary information to the Court.88  Article 35 (c) of the Rules of Procedure of the Permanent Council. Article 38 of the Rules of Procedure of the General Assembly indicates that the “observations and recommendations of the Permanent Council concerning the reports of the specialized organizations and bodies of the Organization may be combined into a single document and shall be sent directly to the plenary General Assembly together with those reports as information documents.” 84  Article 35 (e) of the Rules of Procedure of the Permanent Council cum Article 39 of the Rules of Procedure of the General Assembly. 85  Article 38 in fine of the Rules of Procedure of the General Assembly stipulates that “[a]ny delegation may request separate consideration of such observations and recommendations, in which case they shall be sent to the General Committee for that purpose.” On the voting procedure in the General Committee, see Article 65 of these Rules of Procedure. 86  Verónica Gómez, “The Interaction between the Political Actors of the OAS, the Commission and the Court”, in The Inter-American System of Human Rights, eds. David J. Harris and Stephen Livingstone (Oxford: Clarendon Press, 1998), at 192–197. 87  OAS, Annual Report of the Inter-American Court of Human Rights 1994, at 17–18. 88  “To urge the Government of Suriname to report to the Inter-American Court of Human Rights on the status of compliance with the Court’s judgments in the Aloeboetoe et al. 83

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In another instance, the Government of Peru withdrew its acceptance of the contentious jurisdiction of the Court with immediate effect after two complaints had already been submitted to the Court. The Court rendered two judgments in which it asserted jurisdiction, but faced with Peru’s recalcitrant stance, the Court first sent various communications to the OAS SecretaryGeneral, stating that: The step taken by Peru sets a serious precedent that directly affects the protection system established by the American Convention on Human Rights. Since this Court is entrusted with the defense of the totality of the system, we respectfully request that, as the depositary of the Convention, you take the measures that you consider appropriate in view of the conduct of the Peruvian State.89

Thereafter, the Court informed the General Assembly, requesting it to urge Peru to comply with its judgments and, in 2001, Peru acknowledged the valid and executable nature of the Court’s judgments. The General Assembly took note of Peru’s commitment and acknowledged with satisfaction that the issue had been resolved.90 Thus, in these cases the General Assembly did not hesitate to call directly on individual States, reminding them of their duties under the ACHR. However, a survey of the subsequent resolutions of the General Assembly reveals a marked shift in the attitude of this body when confronted with persistent non-compliance by several States, even in cases that have remained in the Court’s docket for up to a decade and have been mentioned every year in the Court’s annual reports. For instance, in the cases involving Trinidad and Tobago, the Court communicated in its 2003 report the total lack of cooperation of the State and asked the General Assembly to “require the State of Trinidad and Tobago to inform the Court about the measures adopted to comply with its judgment.”91 The passivity of the General Assembly in this instance prompted Judge Manuel Ventura Roble to issue a separate opinion where he expressed his deep concerns about the commitment of the political organs of the OAS with regards to the compliance of the Court’s judgments.92 In general terms, the General Assembly now and Gangaram Panday cases.” AG/RES. 1330 (XXV-O/95) of 9 June 1995, at § 3 of the operative part. 89  OAS, Annual Report of the Inter-American Court of Human Rights 1999 (San José, 2000), at 793–794. 90  OAS, Resolution of 5 June 2001 on the Observation and Recommendations on the Annual Report of the Inter-American Court of Human Rights, AG/RES. 1827 (XXXI-O/01), at § 2 of the operative part. 91  OAS, Annual Report of the Inter-American Court of Human Rights 2003 (San José, 2004), at 45. 92  I/A Court H.R., Case of Caesar v. Trinidad and Tobago, Merits, Reparations and Costs. Judgment of 11 March 2005, Series C No. 123, Separate Opinion of Judge Manuel E. Ventura Robles.

234   Magnus Jesko Langer and Elise Hansbury only takes note of the annual reports of the Court, never calling directly on a State to finally comply with the judgments of the Court. This observation needs to be qualified to the extent that the General Assembly and other political organs remain actively implicated in developing ways of strengthening the human rights system in general, and the compliance monitoring procedures in particular. Remarkably, several Member States, acting through the CJPA, have expressed the opinion that the political organs of the OAS should be more actively engaged in guaranteeing full compliance with the Court’s judgments.93 In fact, the CJPA has created a dialogue process in which the President of the IACtHR, together with other judges, participate, discussing the various means through which the political organs could lend more support to the Court.94 The General Assembly itself has adopted various resolutions on ways to strengthen the human rights system,95 and it has encouraged the Court to continue its dialogue with the Member States in the CJPA.96 It also regularly instructs the Permanent Council to “consider means of encouraging compliance by Member States with the judgments of the Court.”97 Finally, the Member States and the General Assembly have expressed their approval to the new practice of the Court to hold private hearings to monitor compliance, by emphasizing that such hearings “had proven to be one of the most effective mechanisms developed to promote compliance with these judgments.”98  CJPA, Report of the Committee on Juridical and Political Affairs on the Observations and Recommendations of the Member States regarding the Annual Report of the Inter-American Court of Human Rights, SP/CAJP-1790/91 rev. 1, 8 May 2001, at 28. 94  “With respect to the strengthening of the inter-American system of human rights, the Chair underscored and expressed her appreciation for the collaboration of the President of the Court with the Committee on Juridical and Political Affairs in the dialogue process. She announced that a special meeting would be held to deal with this subject in the presence of the President of the Court. The meeting would discuss such aspects as the part that the political organs could play with respect to compliance with the judgments of the Court.” Ibid., at 7. 95  See, for instance: OAS, Resolution of June 4, 2009 on the Strengthening of Human Rights Systems pursuant to the Mandates Arising from the Summits of the Americas, AG/RES. 2521 (XXXIX-O/09). 96  “To invite the Inter-American Court of Human Rights to continue to participate, with its judges, in the dialogue with member states in the reflection process on strengthening the inter-American human rights system, within the context of the Committee on Juridical and Political Affairs.” Ibid., at § 16 of the operative part. 97  Ibid., at § 6 (c) of the operative part. See also OAS, Resolution of June 8, 2010 on the Observations and Recommendations on the Annual Reports of the Organs, Agencies, and Entities of the Organization, AG/RES. 2587 (XL-O/10). 98  CJPA, Report of the Secretary of 24 May 2010 on the Observations and Recommendations by Member States on the Annual Report of the Inter-American Court of Human Rights, OEA/ Ser.G, CP/CAJP-2890/10. See also OAS, Resolution of 8 June 2010 on the Observations and 93

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From the foregoing, it is possible to identify several avenues where the question of non-compliance can be raised and discussed within the political organs. On the one hand, individual Member States can actively participate at all three levels, i.e. the CJPA, the Permanent Council, and the General Assembly, and seek to develop more effective ways for the political organs to exercise their supervisory functions. They may also opine on specific cases of non-compliance and try to convince their peers to adopt recommendations or decisions enjoining recalcitrant States to conform to the Court’s orders on compliance. On the other hand, the political organs themselves have sought to create impulses by engaging in a dialogue process on the ways to enhance the overall effectiveness of compliance monitoring procedures. However, it appears that up to now no political organ has proposed to adopt stricter measures such as public “naming and shaming” or the potential suspension of membership rights. In this regard, it is worth mentioning that the Inter-American Democratic Charter provides for such a mechanism enabling the General Assembly to intervene whenever there is “an unconstitutional interruption of the democratic order of a member state,”99 and, in extreme cases, authorizing the Assembly to suspend the State membership. For instance, the 2009 Coup d’État in Honduras led the General Assembly to suspend the membership of the country on the basis of Article 22 of the Inter-American Democratic Charter after the failure of diplomatic negotiations intended to restore the democratic order in the country. Although the General Assembly urged “the Inter-American Commission on Human Rights to continue to take all necessary measures to protect and defend human rights and fundamental freedoms in Honduras,”100 the suspension, which can be considered as an ultima ratio instrument of “naming and shaming,” is only authorized in extreme cases of alteration of the democratic order of a Member State. The rather passive attitude of the General Assembly is a manifestation of a deeper political equation. As discussed in section II, Member States find themselves in an ambivalent position. On the one hand, they seek to create international mechanisms that would foster greater respect for human rights, while, on the other hand, they are at risk of being found guilty of human rights violations by the IACtHR, especially when one considers the appalling

Recommendations on the Annual Report of the Inter-American Court of Human Rights, AG/RES. 2587 (XL-O/10).   99  Article 22, Inter-American Democratic Charter, adopted by the General Assembly at its special session held in Lima, Peru, on 11 September 2001. See also OAS, Resolution of June 5, 1991 on Representative Democracy, AG/RES. 1080 (XXI-O/91). 100  OAS, Resolution of 4 July 2009 on the Suspension of the Right of Honduras to participate in the Organization of American States, AG/RES. 2 (XXXVII-E/09) rev. 1.

236   Magnus Jesko Langer and Elise Hansbury human rights record of some Latin American countries over the last decades. Suffice only to mention the case regarding ‘Operation Condor’ involving the security and intelligence services of several Southern Cone regimes where the Court called upon the States to collaborate among themselves for the prosecution and punishment of those responsible for the systematic and gross violations of human rights. The evidence nevertheless proved that such prosecutions were rendered impossible at the national level, since the alleged perpetrators were hiding in neighbouring countries that were, at the time, involved in the operation. The Court therefore considered the resort to extradition as a privileged instrument to achieve this end.101 Thus, even though each individual State may have an interest in seeing that its neighbours respect the rights and freedoms enshrined in the ACHR, that same State will, in practice, not want to “stick its neck out” by lodging an interState complaint in front of the IACtHR or pursue vigorously any case of non-compliance within the political organs of the OAS. The reason is rather intuitive: that State could be the next on the pillory. This is an obvious limit to the effectiveness of the system of collective guarantee established by the American Convention. This said, a State that repeatedly fails to comply with the Court’s judgments or which remains “earmarked” for nearly a decade in the Court’s annual reports may also lose some of its bargaining power within the political organs of the OAS.

IV.  Between Legitimacy and Effectiveness: The Institutional Gap Revealed The practice of both the IACtHR and the political organs in connection with Article 65 ACHR reveals an underlying institutional gap within the Inter-American human rights system. Whereas the Court has adopted a very proactive – some might even say creative – stance and claimed the primary competence to monitor compliance with its judgments, the General Assembly of the OAS has not made full use of its prerogatives. By seeking to enhance the overall effectiveness of the human rights system, the Court has chosen to come to the rescue of the political organs of the OAS, thus taking the risk that the Court’s overall authority may ultimately suffer (A). This in turn raises the question whether the political organs of the OAS, and particularly the General Assembly, should discharge their initial powers more resolutely (B).  I/A Court H.R., Case of Goiburú et al. v. Paraguay, at § 132. See also, on the extradition of former President Alberto Fujimori, detained at the time of the case in Chile, I/A Court H.R., Case of La Cantuta v. Peru, Merits, at § 159.

101

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A.  Judicial Means at the Rescue of Political Means The judicial compliance monitoring procedures developed by the IACtHR are quite unique in international law. They seem to be a very effective mechanism to secure full compliance with the Court’s judgments. The practice of the Court to indicate various and very precise remedies can partly explain this involvement as only a judicial organ can verify correctly whether the legal remedies have been complied with under the law. Significantly, the Court’s practice, under Article 65, to monitor compliance with its judgments seems now well established. Apart from the single case where Panama challenged the Court’s authority in this respect, all other States have usually accepted to submit relevant information to the Court on their level of compliance. The political organs of the OAS also have recognized the duty of responsible States to inform the Court pursuant to Article 65 ACHR. As stated by the Court, if the General Assembly really considered that its monitoring powers are exclusive, then: (. . .) this political body would already have ruled in this respect, and this has not happened. It is not possible to suppose that, since 1989, the Court has been exercising a function that belongs to the maximum political body of the OAS and that the latter, knowing this, has allowed it.102

And yet, in asserting this prerogative, the Court is taking a significant risk. First, several judges of the Court have indicated themselves that the OAS system contains an institutional gap which forced the Court to overstretch its capacities and left the Court with little real support from the political organs. Second, the fact that several cases remain on the docket of the Court for over a decade does not really add much to the Court’s authority, quite to the contrary. Some States may even have the feeling that the Court is stretching too much the legal boundaries or even exceeding its powers, which may potentially prompt them to withdraw their acceptance of the contentious jurisdiction of the Court,103 or dissuade other States from accepting the Court’s jurisdiction.104 Third, compliance monitoring has seen a dramatic increase in  I/A Court H.R., Case of Baena-Ricardo et al. v. Panama, Competence, at § 110.  For instance, Trinidad and Tobago withdrew their acceptance of the contentious jurisdiction of the Court in 1998 since the jurisprudence of the Court regarding death penalty contradicted at the time the national law. As indicated further above, Peru sought to withdraw with immediate effect its acceptance of the contentious jurisdiction of the Court in order to avoid any adverse finding by the Court in the Ivcher Bronstein and the Constitutional Court cases. 104  The General Assembly itself regularly calls upon all States that have not yet accepted the contentious jurisdiction of the Court to do so. See the last resolution of the GA on this matter, OAS, Resolution of 7 June 2011 on Observations and Recommendations on the Annual Report of the Inter-American Court of Human Rights, AG/RES. 2672 (XLI-O/11). 102 103

238   Magnus Jesko Langer and Elise Hansbury the last years, creating an overload of activity of the Court that has not been accompanied by an increase of its financial resources.105 Whereas the Court’s approach undoubtedly leads to an increase in the overall effectiveness of the Inter-American human rights system, it may paradoxically undermine the effectiveness of the Court itself.106 Echoing the concerns expressed by Judge Cançado Trindade after he left the Court about the pragmatic approach increasingly followed by the Judges of the Court on the use of remedial measures,107 some studies have shown that such pragmatism could potentially suggest that the Court is not doing enough to issue clear principled decisions, thus questioning the legitimacy of the Court itself.108 Cançado himself, then President of the IACtHR, had clearly expressed at the beginning of the past decade his concerns on compliance monitoring before the political organs of the OAS.109 He had also warned that the OAS contains an institutional gap in this respect and that the Court needed to fill this gap by maintaining a close oversight on the enforcement and execution of its judgments.110 This lack of effective support by the political organs of the OAS to induce recalcitrant States to comply with their obligations under the ACHR has even led to rather unusual practices, such as the use  For instance, as pointed out in the 2010 Annual Report of the Court, the Court conducted 22 hearings and issued 40 orders on supervision of compliance in 2010. It maintains over a hundred cases on its docket for the purpose of compliance monitoring while receiving an average of 20 new cases every year. OAS, Annual Report of the Inter-American Court of Human Rights 2010, at 5. 106  Some authors have also highlighted the risk of excessive politization of the Court’s compliance monitoring activities, see for instance Letizia Seminara, at 322. 107  Laurie R. Tanner, “Interview with Judge Antônio A. Cançado Trindade”, at 994–995. 108  Jeffrey K. Staton and Alexia Romano, “Clarity and Compliance in the Inter-American Human Rights System”, 12 February 2011, http://www.saopaulo2011.ipsa.org/paper/ clarity-and-compliance-why-states-implement-orders-inter-american-court-human-rights (last accessed 25 February 2012). 109  CJPA, Report and proposals of 5 April 2001 of the President of the Inter-American Court on Human Rights, Judge Antônio A. Cançado Trindade, to the CJPA within the framework of the dialogue on the Inter-American System of Protection of Human Rights – Basis for a draft protocol to the American Convention on Human Rights to strengthen its protection mechanism, OEA/Ser.G, CP/CAJP-1781/01, at 18; CJPA, Speech by the President of the Inter-American Court of Human Rights, Judge Antônio A. Cançado Trindade, before the Committee on Juridical and Political Affairs of the Permanent Council of the Organization of American States, during the Dialogue on Strengthening the Inter-American System for the Protection of Human Rights, held on 19 April 2002, OEA/Ser.G, CP/CAJP-1933/02, at 21. 110  Antônio Augusto Cançado Trindade, “Une ère d’avancées jurisprudentielles et institutionnelles: Souvenirs de la Cour interaméricaine des droits de l’homme” in Le particularisme interaméricain des droits de l’homme, ed. Hélène Tigroudja and Ludovic Hennebel (Paris: Pedone, 2009), at 54–58. 105

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of ­separate opinions to list all cases of non-compliance and highlight the structural weaknesses of the OAS system.111 To what extent such practices also undermine the authority of the Court remains open to question. In any event, it is hardly encouraging to see the judges of the Court themselves calling the attention of the public to the low level of compliance with the Court’s judgments. It does in fact signal an underlying political problem that requires political (not judicial) action. By filling the institutional gap the IACtHR has clearly come to the rescue of the political organs of the OAS. However, the risks involved raise the question whether the pendulum should not move in the opposite direction so as to provide the Court with the necessary political and financial support to consolidate its authority and legitimacy. B.  Political Means at the Rescue of Judicial Means? The General Assembly of the OAS could avail itself of at least three instruments to increase the effectiveness of the compliance monitoring procedures. Apart from lending support to the dialogue process created within the CJPA, the General Assembly could either fill the institutional gap by creating a body comparable to the Committee of Ministers of the Council of Europe, which could focus exclusively on tracking compliance with the Court’s decisions. The General Assembly could also try to mobilize significantly more financial support, i.e. a larger portion of the OAS budget attributed to the IACtHR, to reduce the Court’s dependence on voluntary donations from States such as Norway or Spain. Finally, the General Assembly could become much more active in the compliance monitoring procedure, so as to create political pressure on recalcitrant States. With respect to the first proposal, it is interesting to note the evolution of compliance monitoring in the context of the European Convention on Human Rights. The European model, reflecting the traditional approach to international dispute settlement – i.e. the ECtHR closes each case after rendering its final judgment and a political organ, the Committee of Ministers, engages in compliance monitoring – has, however, been slightly modified by the Council of Europe in 2010. The initial draft of the American Convention, which served as a basis for State negotiations in 1969, contemplated in draft Article 57 a mechanism similar to that of the European Convention, whereby the decisions of the Court would be transmitted to the OAS ­Permanent  I/A Court H.R., Case of Caesar v. Trinidad and Tobago, Merits, Reparations and Costs. Judgment of 11 March 2005, Series C No. 123, Separate Opinion of Judge Manuel E. Ventura Robles.

111

240   Magnus Jesko Langer and Elise Hansbury Council.112 There is, however, no trace of the reasons why the referral to the OAS Permanent Council was later abandoned in the final version of the Convention, except for a brief intervention of the United States according to which the Permanent Council would not possess such powers.113 Three aspects of the European monitoring system deserve special attention. First of all, the Committee of Ministers works under the principle of continuous supervision, i.e. detached from the schedule of “regular” human rights meetings. Second, a twin-track supervision system has been put in place, where the cases either fall under “standard” or “enhanced” supervision.114 Enhanced supervision is provided for judgments requiring urgent individual measures, pilot judgments, judgments raising structural and/ or complex problems as identified by the Court or by the Committee of Ministers,115 and inter-State cases. Third, following the entry into force on June 1, 2010, of Protocol No. 14, the Committee of Ministers has been granted two new prerogatives in connection with the supervision of the execution of ECtHR judgments.116 The Committee may refer a judgment for interpretation to the Court, but more importantly, the Committee may initiate infringement proceedings where the Court concludes that a responsible State has failed to comply with the judgment.117 Thereafter, the case returns to the Committee, which may then take appropriate measures, eventually

 See Actas y Documentos, Conferencia Especializada Interamericana sobre Derechos Humanos, San José, Costa Rica, OEA/Ser.K/XVI/1.2, 7–22 November 1969, at 85–86 http://www.corteidh.or.cr/tablas/15388.pdf (last accessed on 25 February 2012). 113  Thomas Buergenthal and Robert Norris, ed., Human Rights. The Inter-American System. The Legislative History of the American Convention on Human Rights (New York: Oceana, 1982), at 54; Víctor Rodríguez Rescia, “La ejecución de sentencias de la Corte”, in El Futuro del Sistema Interamericano de Protección de los Derechos Humanos, eds. Juan E. Méndez and Francisco Cox (San José: IIDH, 1998), at 480. 114  Council of Europe, Supervision of the execution of judgments and decisions of the European Court of Human Rights: Implementation of the Interlaken Action Plan – Modalities for a twin-track supervision system, 6 September 2010, CM/Inf/DH(2010)37. On the distinction between “standard” and “enhanced” supervision, see also Council of Europe, Supervision of the execution of the judgments and decisions of the European Court of Human Rights: Implementation of the Interlaken Action Plan – Elements for a roadmap, 24 June 2010, CM/ Inf(2010)28rev, at §§ 7–8. 115  See, for instance, Council of Europe, Resolution Res(2004)3 of the Committee of Ministers on judgments revealing an underlying systemic problem, 12 May 2004. 116    Article 46, § 4 ECHR. See also Council of Europe, “Entry into force of Protocol No. 14: consequences for the supervision of the execution of judgments of the European Court by the Committee of Ministers”, Information document prepared by the Department for the Execution of Judgments of the European Court of Human Rights, 18 May 2010, DGHL-Exec/Inf(2010)1. 117  Article 95–99 of the Rules of the Court on “Infringement Proceedings.” 112

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leading to the suspension of the responsible State in case of serious violations of the principles of the rule of law.118 This approach is an acknowledgement of the Committee’s political nature. The so-called “Infringement Proceedings” are meant to circumvent this drawback by giving the judicial organ of the Council of Europe the possibility to assess on the basis of the law whether a responsible State has once again violated its obligations under the ECHR. To that extent, it is similar to the Inter-American approach where it is for the IACtHR to determine if a State is still in non-compliance. However, the collaboration between the political and judicial organs of the Council of Europe is much more developed and the respective prerogatives are much better determined than in the InterAmerican system, where the IACtHR has been forced to act in the interstices of the system to fill the institutional gap. The relevant organs of the OAS are, of course, following the institutional developments of the European system or the African system closely. In this respect, it is worth mentioning that Judge Cançado Trindade has argued in favour of the establishment of a permanent working group of the CJPA, consisting of representatives of the States Parties to the Convention, in order to monitor compliance on a continuous basis.119 The subcommittee would report back to the CJPA, which would then follow the established procedure. However, in spite of the various calls and proposals made by the Judges of the Court, no major progress has been made.120 It remains to be seen whether sufficient political will be mobilized in a near future to move ahead, especially now that the CJPA has again been directed, during the last session of the General Assembly, to “give priority to the preparation of a study on ways to strengthen the inter-American human rights system.”121  Article 46, § 5 ECHR. On the possibility of suspending a Member State, see the following legal provisions, Article 3 and 8 of the Council of Europe, Statute of the Council of Europe, London, 5 May 1949; and Article 26–27 of the Rules of Procedure of the Committee of Ministers, adopted by the Committee of Ministers at its 9th Session (August 1951) with amendments adopted at its 10th Session (March 1952), 16th Session (July 1955), 23rd Session (December 1958), 73rd (June 1959), 133rd (July 1964) and 934th (July 2005) meetings of the Ministers’ Deputies. 119  CJPA, Report and proposals of 5 April 2001 of the President of the Inter-American Court on Human Rights, Judge Antônio A. Cançado Trindade, to the CJPA, at 18; CJPA, Speech by the President of the Inter-American Court of Human Rights, Judge Antônio A. Cançado Trindade, before the Committee on Juridical and Political Affairs, at 21. See also, Laurie R. Tanner, “Interview with Judge Antônio A. Cançado Trindade”, at 993. 120  OAS, Resolution of 18 February 2011 on the Initiatives for Strengthening the Inter-American System of Human Rights, OEA/Ser.G CP/RES. 981 (1791/11). 121  OAS, Resolution of 7 June 2011 on Strengthening of the Inter-American Human Rights Systems pursuant to the Mandates arising from the Summits of the Americas, AG/RES. 2675 (XLI-O/11). 118

242   Magnus Jesko Langer and Elise Hansbury As a second, and more pressing alternative, the General Assembly of the OAS should seriously consider enhancing the financial means of the Court. Of all the permanent international judicial institutions around the world, the IACtHR is the one with the lowest financial means. In total, the IACtHR has an annual budget of under 2 million US$, and quite a large share is provided by foreign donors such as Norway and Spain.122 The comparison with the annual budget of the ECtHR (over 50 million US$) and even with the new African Court of Human and Peoples’ Rights (over 8 million US$) reveals the discrepancy. Arguably, the case load of the ECtHR is far larger, but with the dramatic increase in the compliance monitoring activity of the Court, there is a dire need for more resources. In fact, the IACtHR repeatedly called upon the General Assembly to act in this sense, but until now no real commitments have been made. The President of the Court has indicated last year, that the short-term increase of financial means should provide the Court with 4 million US$ annually, in the mid-term 8 million US$, and in the long-term 12 million US$.123 If the Court is to handle seriously the question of compliance monitoring, with over 100 cases kept on its docket, it is imperative that the General Assembly provides for regular, secure, and sufficient funds to the IACtHR. Any failure to do so would ultimately undermine the effectiveness and the authority of the Court. Finally, it is also possible that the political organs of the OAS, in particular the General Assembly, become more committed to the compliance monitoring process. Instead of limiting itself to taking note of the Court’s annual reports or reminding regularly the Member States that the Court’s judgments are final and binding or that States are obliged to submit relevant information to the Court on the state of compliance, the General Assembly could increase the political pressure on recalcitrant States. Obviously this is more likely to happen in cases of serious breaches of the ACHR or in cases where States openly and defiantly challenge the authority of the Court. However, the OAS has made a clear commitment to the idea of democratic governance by adopting the Democratic Charter in 2001. The link between democratic governance and human rights had already been stated by the Court in 1993: (. . .) there exists an inseparable bond between the principles of legality, democratic institutions and the rule of law [and] [i]n a democratic society; the rights  See for instance, Address by the President of the Inter-American Court of Human Rights, Judge Diego García-Sayán, before the XLI General Assembly of the Organization of American States, San Salvador, El Salvador, June 7 2011; OAS, Annual Report of the ­Inter-American Court of Human Rights 2010. 123  See, for instance, Permanent Council, Resolution of 18 February 2011 on the Initiative for Strengthening the Inter-American Human Rights System, CP/RES. 981 (1791/11). 122

Monitoring Compliance with the Decisions of Human Rights Courts   243 and freedoms inherent in the human person, the guarantees applicable to them and the rule of law form a triad, [and] [e]ach component thereof defines itself, complements and depends on the others for its meaning.124

A similar stance had been taken, as early as 1991, by Member States of the OAS when they adopted the Santiago Commitment to Democracy and the Renewal of the Inter-American System in an effort to reassert the importance of democratic consolidation in the region, which has become one of their main priorities.125 The Santiago Commitment constituted the starting point of a series of discussions among the Member States to strengthen representative democracy within the hemisphere, which resulted ten years later in the adoption of the Inter-American Democratic Charter. Article 3 of this Charter provides that: Essential elements of representative democracy include, inter alia, respect for human rights and fundamental freedoms, access to and the exercise of power in accordance with the rule of law, the holding of periodic, free, and fair elections based on secret balloting and universal suffrage as an expression of the sovereignty of the people, the pluralistic system of political parties and organizations, and the separation of powers and independence of the branches of government.

The Democratic Charter goes even further when it asserts that: Member states reaffirm their intention to strengthen the Inter-American system for the protection of human rights for the consolidation of democracy in the Hemisphere.

The Member States of the OAS have therefore acknowledged the link between the effective enforcement of human rights protection and a lasting democracy. It is thus a crucial aspect of democratic governance and of the idea of rule of law that Member States of the ACHR comply with the decisions of the IACtHR. On this basis, it could well be argued that the persistent lack of respect for human rights constitutes a threat, or even a rupture of the democratic order of a State, which could possibly lead to the suspension of the State’s membership in the Organization. Whether such an interpretation, or use, of the Charter was envisaged at the time of its adoption remains open to question. It should, however, be noted that the Charter, under its Chapter IV, does provide for graduated diplomatic procedures, ranging from  Certain Attributes of the Inter-American Commission on Human Rights (Articles 41, 42, 44, 46, 47, 50 and 51 of the American Convention on Human Rights), Advisory Opinion OC-13/93 of 16 July 1993, at § 31. 125  OAS, Santiago Commitment to Democracy and the Renewal of the Inter-American System, 4 June 1991, AG/RES. (XXI-0/91). For a detailed summary of the discussions, see Úbeda de Torres, Democracia y derechos humanos, at 94. See also Mónica Herz, The Organization of American States (New York: Routledge, 2011), at 64–67. 124

244   Magnus Jesko Langer and Elise Hansbury negotiations to suspension, aimed at exercising different degrees of political pressure on States to comply with their commitment to democratic governance. The General Assembly, in an attempt to give effect to the system of collective guarantee, at the basis of which lays the democratic principle, could make use of such a mechanism as a strong lever to engage negotiations with responsible States and bring them to comply with the judgments of the Court. The adoption of the Inter-American Charter demonstrates the will of the Member States to work towards a consolidation of democratic institutions within the hemisphere, which necessarily entails the consolidation of the respect for human rights. But it also shows that some existing mechanisms could be used to foster better compliance with the judgments of the Court. The key question is whether the Member States are genuinely willing to enforce the system of collective guarantee established by both the InterAmerican human rights instruments and the Democratic Charter.126 This would first involve a real commitment to complying with the Court’s judgments by the responsible State and second, a greater diplomatic commitment of OAS Member States towards securing compliance. This latter aspect would undoubtedly enhance the authority of the Court. Since it has been established that the effective implementation of human rights is not only the result of a functioning and healthy democracy but also a prerequisite thereof – and especially when one considers the remedial measures addressing systemic issues ordered by the Court – the dialogue between the responsible State and other OAS Member States could also work as a preventive mechanism. Would there be a need to suspend the membership of a State if there were, beforehand, truly democratic institutions respectful of human rights, thus capable of preventing the rupture of the democratic order? It could therefore be argued that, in this particular context, political means could be used to strengthen the operation of judicial means of dispute settlement.

V.  Conclusion Judicial and political organs within any legal order are closely related and their prerogatives need to be carefully balanced. Although they are, by necessity, independent from each other, they are at the same time complementary when it comes to ensuring their respective effectiveness and legitimacy. The example of how compliance with human rights judgments is monitored in the Inter-American context is particularly illustrative in this respect. Based  See on this question, Burgorgue-Larsen and Úbeda de Torres, at 178–181.

126

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on the rather laconic wording in the ACHR, the Court of San José has developed a practice of monitoring compliance with its own judgments, thereby enhancing the overall effectiveness of the regional human rights protection system through a redistribution of the prerogatives vested in the judicial and political organs of the OAS. Our message is not that the political organs of the OAS should interfere with the Court’s commendable initiative to secure relief to the victims of human rights violations and to promote general reforms leading to democratic governance. Our critique highlights the need for a more active involvement of the political organs of the OAS, foremost the General Assembly, in consolidating the authority of the Court and, ultimately, the effectiveness of the entire system. As the General Assembly has acquiesced in respect of the practice of the Court, it follows that the political organs of the OAS should support this substantial increase in the Court’s workload adequately. Eventually, the debate on how to better support the activity of the Court must be held within the political organs of the OAS, and the representatives of that organization should continuously exhort Member States to live up to their commitments. The role of the IACtHR in the implementation of its decisions provides an interesting illustration of the complex interface between political and judicial means of dispute settlement. The practice of the Court has clearly enhanced the effectiveness of the system. And yet, to succeed in the long term, the Court is likely to need adequate support from the political organs of the OAS. Thus, only a careful blend of both judicial and diplomatic means can further the overall effectiveness of the human rights system.

Chapter Twelve The Use of Alternative (Non-Judicial) Means to Enforce Investment Awards against States Jorge E. Viñuales and Dolores Bentolila

I.  Introduction As a rule States comply with investment awards. Yet, in some cases, the enforcement of such awards has proved to be difficult.1 This contribution focuses on the interaction between judicial and non-judicial means of enforcing investment awards. Specifically, it analyses a variety of ‘alternative’ or ‘non-judicial’ means that can be used either as a supplement to the judicial framework for enforcement or on a stand-alone basis, when judicial enforcement has been pursued unsuccessfully. The broad context of the topic is given by the legal framework governing the enforcement of investment awards. Under the Convention on the Settlement of Investment Disputes between States and Nationals of other States (‘ICSID Convention’)2 and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (‘New York Convention’)3 investment awards can be enforced before domestic courts through a rather simple mechanism leaving little or no room for review. Yet, when the loosing party is a State, an additional layer of complexity is added to the ­enforcement  L. E. Peterson, “How Many States Are Not Paying Awards under Investment Treaties?”, IA Reporter (7 May 2010), 202 et seq. F. J. Sedelmayer, “Franz J. Sedelmayer v. The Russian Federation: The Tribulations of an Arbitral Award Winning Party,” TDM, no. 3 (2006), at 39; S. Shuster, “German Court Rules against the Kremlin”, The Moscow Times 12 October 2006; L. E. Peterson, “Deadline Lapses without Payment by Kazakhstan on Bit Award”, IA Reporter (7 May 2010). 2  Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 18 March 1965, 575 UNTS 159; 4 ILM 532 (1965). 3  Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, 330 UNTS 38; 7 ILM 1046 (1968). 1

248   Jorge E. Viñuales and Dolores Bentolila ­ rocess. Certain assets of the State that are used for a public purpose are p covered by the State’s immunity of execution. Some other assets that are not used for a public purpose may also be out of reach if they belong to a separate entity organized by the State for the pursuance of certain economic activities. At a more practical level, the enforcement procedure before the domestic courts of a State may be organized in a way that allows for political interference. These and other difficulties in enforcing investment awards against States have fostered the development of mechanisms that go beyond the conventional exequatur. The analysis of a number of investment cases where enforcement was particularly difficult or (so far) unsuccessful suggests that investors, debt-collection funds, home States, third States, international organizations (IOs) and arbitral institutions have been increasingly engaging in efforts to achieve compliance through the use of alternative, non-judicial means. Such means range from the simple negotiation of a post-award settlement to some of the most intrusive forms of economic or political coercion on the host State to comply or settle. The use of some of these means has been assessed empirically.4 Others, instead, have received little or no attention. After a brief overview of the basic enforcement framework of investment awards (II), this chapter analyses the potential of several non-judicial means either as a supplement to judicial enforcement or as a full alternative to it (III).

II.  Enforcement before Domestic Courts A.  The Basic Legal Framework There are two distinct regimes governing the enforcement of investment awards. The first regime applies to awards rendered under the aegis of the ICSID Convention, i.e. when both the host State and the investor’s home State are a party to this treaty. All the other cases, including cases governed by the ICSID Additional Facility Rules, are governed by the regime applicable to international commercial arbitration awards. We first discuss the latter regime (a) and then move to the specific regime laid out by the ICSID Convention (b).

4

 L. Mistelis, and C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards. Special Section: Recognition and Enforcement of Arbitral Awards and Settlement in International Arbitration: Corporate Attitudes and Practices”, (2008) Am. Rev. Int’l Arb. 19, at 339.

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(a)  Non-ICSID Awards The enforcement of non-ICSID investment awards, including those arising from ad hoc proceedings (typically under the UNCITRAL Arbitration Rules), those administered by virtually all arbitration institutions (e.g. the International Chamber of Commerce, the Stockholm Chamber of Commerce, the London Court of International Arbitration, etc.) and even those conducted under the ICSID Additional Facility Rules, is governed by the relevant national laws on arbitration and international conventions on the recognition and enforcement of international commercial awards.5 Among these conventions the most important one is the 1958 New York Convention, which has been ratified by 145 States.6 The New York Convention governs the recognition and enforcement of foreign arbitral awards and ‘non-domestic awards’7 which decide disputes of a commercial nature. Investment awards, both contract and treaty-based, are covered by the New York Convention.8 Under the New York Convention State parties are required to recognize arbitral awards as binding and to enforce them in accordance with the rules of procedure of the territory where the award is relied upon, unless the party against whom enforcement is sought can establish the existence of one of the grounds identified in Article V for refusing recognition or enforcement.9  Aside from the New York Convention, the enforcement of arbitral awards may be governed by some regional conventions, such as the European Convention on International Commercial Arbitration, Geneva, 21 April 1961, 484 UNTS 364, the Inter-American Convention on International Commercial Arbitration, Panama, 30 January 1975, 1438 UNTS 245; the Riyadh Arab agreement for judicial cooperation, Riyadh, 6 April 1983; the OHADA Treaty for the harmonization of business law in Africa of October 17, 1993 in OHADA Journal officiel no. 4, 1 Nov 1997 de l’Organisation pour l’harmonisation en Afrique du Droit des Affaires (OHADA), available at http://www.ohada.com/ and a number of bilateral agreements, though their practical importance has declined as a result of the proliferation of multilateral conventions. 6  See UNCITRAL website at www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NY Convention_status.html (last accessed 11 July 2011). 7  This is subject to the reciprocity reservation (Art. I (3) of the New York Convention). 8  Z. Douglas, “The Hybrid Foundations of Investment Treaty Arbitration,” BYIL 74 (2004), at 220–24. 9  These grounds are limited to serious defects of the arbitral process or to a violation of the fundamental values of the State of enforcement. They include: (a) the inexistence or invalidity of the arbitration agreement; (b) lack of notice or violation of due process; (c) excess of power by the arbitral tribunal; (d) irregular composition of the arbitral tribunal; and (e) that the award has not yet become binding or has been set aside or suspended in the country of origin. See Art. V (1) of the New York Convention. In addition, the recognition and enforcement of an arbitral award may be refused if the subject matter of the dispute is considered non-arbitrable or contrary to the public policy of the country where enforcement is sought. See Art. V(2)(a)–(b). Letter (b) is sometimes considered as the “safety valve” under the Convention, preventing a totally unrestricted obligation to recognize and enforce 5

250   Jorge E. Viñuales and Dolores Bentolila It has been suggested that these grounds constitute a minimum threshold allowing States to be more liberal in the recognition of arbitral awards.10 One consequence of this view is the significant variation in the interpretation and application of the Convention from one State to another as well as the fact that, in certain countries, the control of the award is particularly limited. For example, in France the annulment of the award at the seat of the arbitration is not an obstacle to its enforcement, even though it constitutes a ground for refusal under Article V(1)(e).11 This said, it is generally accepted that the standard of review to be used by national courts when recognizing/enforcing foreign awards should be a deferential one, leading to a refusal only under exceptional circumstances.12 A significant entry point for domestic law concerns purely procedural issues, which are governed by the procedural rules of the country of enforcement, “with the implied exception that any specific procedural rules contained in the Convention prevail”.13 These procedural aspects include matters relating to the jurisdiction of the local court, time and cost of the foreign arbitral awards. Over the years, however, many national courts have developed a more deferential attitude toward international arbitration and have restricted their public policy. E.g. a Canadian court refused to set aside a NAFTA Chapter 11 UNCITRAL award in the S.D. Myers v. Canada case on public policy grounds because the arbitral award did not “breach fundamental notions and principles of justice so that that the decision [was] not in conflict with the public policy of Canada.” Pursuant to the court, “ ‘Public policy’ does not refer to the political position or an international position of Canada, but refers to ‘fundamental notions and principles of justice.’ ” Attorney-General of Canada v. S.D. Myers, Inc. and United Mexican States (Intervener), Canada, Federal Court, 13 January 2004, 8 ICSID Reports 194, at 213, § 76. A similar solution was reached in Feldman Karpa, where Mexico argued that the ICSID Additional Facility award in Feldman v. Mexico was contrary to Canadian public policy. United Mexican States v. Feldman Karpa, Canada, Ontario Court of Appeal, 11 January 2005, 9 ICSID Reports 508, 521, at § 67. 10  Fouchard, Gaillard, and Goldman, On International Commercial Arbitration (Kluwer Law International, 1999), at 978. 11  See Cour de cassation, 1re civ., 23 March 1994, Société Hilmarton Ltd. v. Société Omnium de traitement et de valorisation (OTV), JDI (1994), at 701, 702; Cour d’appel de Paris, 14 January 1997, République arabe d’Egypte v. Société Chromalloy Aero Services, JDI (1998), at 750; Cour d’appel de Paris, 10 June 2004, Société Bargues Agro Industries v. Société Young Pecan Company, Rev. arb. (2006), at 154. 12  This was expressly acknowledged by the Svea Court of Appeal in the CME case when it found that Swedish law “has adopted a restrictive approach towards the possibilities to successfully have an arbitration award declared invalid or set aside based on a challenge” and that the “same approach” characterizes the rules in the New York Convention. Czech Republic v. CME Czech Republic BV, Svea Court of Appeal, 15 May 2003, 9 ICSID Reports, at 438–93. 13  A. Börner, “Article III”, in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention, in eds. Herbert Kronke and Patricia Nacimiento (Kluwer Law, 2010), at 115–42.

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­ roceedings, whether these proceedings can be maintained against States or p State-controlled entities and whether their assets can be seized.14 When neither the New York Convention nor any other treaty governing recognition and enforcement are applicable, the arbitration laws of the State where recognition/enforcement is sought will apply. This would be the case if the State of enforcement has not ratified the New York Convention15 (nor any other convention on the issue) or if the Convention is not applicable due to the reciprocity reservation under Article I(3). In the first case, whereas some States may have established grounds for the refusal of recognition/enforcement of awards similar to those of Article V of the New York Convention,16 in some others the investor could face significant legal obstacles to enforce an award.17 When the State of enforcement has ratified the New York Convention but the latter is not applicable as a result of the reciprocity reservation, the situation seems to be less risky. Indeed, as noted by Fouchard, Gaillard & Goldman, the general regime provided for in domestic laws is sometimes more favourable to foreign awards than the regime provided for in the New York Convention.18 (b)  ICSID Awards The enforcement of awards rendered under the aegis of ICSID is subject to a special regime set out by the ICSID Convention. Article 53(1) states the principle that an award rendered pursuant to the Convention is binding on the parties and not subject to any review procedure other than those provided for in the Convention itself. The latter are limited to interpretation (Article 50), revision (Article 51) and annulment (Article 52). Article 54 provides that: ‘[e]ach Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by  Ibid., at 121–28.  The following States are not party to the New York Convention: Andorra, Burundi, Congo, Ethiopia, Guinea-Bissau, North Korea, Maldives, Nauru, Saint Lucia, Sierra Leone, Suriname, Timor-Leste, Tuvalu, Angola, Cape Verde, Democratic Republic of the Congo, Guyana, Libyan Arab Jamahiriya, Federated States of Micronesia, Palau, Samoa, Solomon Islands, Swaziland, Togo, Vanatu, Bhutan, Chad, Equatorial Guinea, Gambia, Iraq, Liechtenstein, Myanmar, Papua New Guinea, Sao Tome and Principe, Somalia, Taiwan, Tonga, Yemen, Comoros, Eritrea, Grenada, Kiribati, Malawi, Namibia, Saint Kitts and Nevis, Seychelles, Sudan, Tajikistan, Turkmenistan. 16  One example is Taiwan. See D. Sturzaker, “Arbitration in Asia”, Mediate.com November 2002. Available at: www.mediate.com/articles/sturzakerd.cfm (last accessed 22 July 2011). 17  This would be the case of some African States. See A. Asouzu, “African States and the Enforcement of Arbitral Awards: Some Key Issues”, Arbitration International 15, no. 1 (1999), 1–52. 18  This is the case, for instance, in France, Lebanon, the Netherlands, Quebec and the Côte d’Ivoire, Fouchard, Gaillard, and Goldman, On International Commercial Arbitration, 97. 14 15

252   Jorge E. Viñuales and Dolores Bentolila that award within its territories as if it were a final judgment of a court in that State.’ The provision establishes two different obligations: (a) the obligation to recognize the res judicata effect of an ICSID award; and (b) the obligation to execute the pecuniary obligations arising out from the award as a final local judgment.19 Whereas the obligation to recognize the award as binding is unrestricted (unless the award has been annulled or its enforcement stayed), the obligation to execute is (by contrast to the system of the New York Convention) limited to pecuniary obligations excluding restitution or other forms of specific performance. This has not been an obstacle to the enforcement of ICSID awards because, in the overwhelming majority of cases, investment tribunals have awarded damages only.20 Yet, the main innovation of the ICSID Convention is that it equates arbitral awards to a “final judgment” of the courts of the State where enforcement is sought. This is intended not only to simplify the procedure of enforcement, but also to shield awards rendered under the ICSID Convention from potential interference by domestic courts, even when the award is contrary to public policy.21 Thus, Article 54(2) states that it is sufficient to present to the competent court or authority of a Contracting State a copy of the award certified by the Secretary-General of the Centre. As under the New York Convention, Article 54(3) of the ICSID Convention provides an entry point for the application of national procedural laws governing the execution of local judgments.

 C. Schreuer, The ICSID Convention: A Commentary (Cambridge University Press, 2009), at 1136. 20  Ibid., at 1136. 21  Local courts in several cases have recognized this autonomous and simplified regime of enforcement of ICSID arbitral awards. This was done by the French Cour de Cassation in the SOABI case, where it held “the Washington Convention of March 18, 1965 has created in its Articles 53 and 54 an autonomous and simplified regime for recognition and enforcement which excludes the regime provided for in Articles 1498 et seq. of the New Code of Civil Procedure and, in particular, the means of recourse there-in provided” SOABI v. Senegal, Cour de cassation, 11 June 1991, 118 JDI (1991) translated by N. Ziadé, “Some Recent Decisions in ICSID Cases”, 6 ICSID Rev.-FILJ 514, Cases, 522. Likewise in the Occidental case, the English Court of Appeal stated that: “in the case of an ICSID arbitration, no recourse to the English court is currently possible under the Arbitration Act 1996 . . . The ICSID scheme also differs in having its own enforcement mechanism, so that the New York Convention is inapplicable.” Republic of Ecuador v. Occidental Exploration and Production Company, England, Court of Appeal, 9 September 2005, (2005) EWCA 1116, 12 ICSID Reports 129, at 148, § 38. 19

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B.  Additional Difficulties in Enforcing Awards against States The enforcement of arbitral awards against sovereigns entails a number of additional difficulties. Two important difficulties arise from the host State’s immunity from execution and the autonomy of certain State entities (a). In a 2008 survey on “Corporate Attitudes Towards Recognition and Enforcement of International Arbitral Awards”, 61% of the 80 corporations consulted stated that they had encountered difficulties in enforcing arbitral awards22 and, out of this 61%, 68% indicated that they had been unable to identify and access the assets of the State.23 In addition, there are risks of a procedural and economic nature (b). (a)  State Immunities and the Autonomy of State Entities Whereas accession to the ICSID Convention24 or to the New York ­Convention25 (or consent to international arbitration)26 may be considered as a waiver of the State’s immunity of jurisdiction, neither the New York Convention nor the ICSID Convention affect the rules on State immunity of execution. The latter point is expressly stated in Article 55 of the ICSID Convention and, although the New York Convention is silent on this point, accession to the New York Convention does not amount to a waiver of immunity of execution. As noted by the German Federal Supreme Court, Article III of the New York Convention merely requires that Contracting States recognize and enforce arbitral awards “in accordance with national rules of procedure” and such rules include principles on immunity of execution.27

 C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards: Enforcement of Arbitral Awards against States”, Am. Rev. Int’l Arb. 19 (2008), at 404–05. 23  Ibid. 24  See LETCO v. Liberia, District Court, S.D.N.Y., 12 December 1986, 2 ICSID Reports 385, at 388–09. 25  See S & Davis Intern., Inc. v. Republic of Yemen, 218 F.3d 1292, 1302 (11th Cir. 2000) and Matter of Arbitration Between Chromalloy Aeroservices, a Div of Chromalloy Gas Turbine Corp. and Arab Republic of Egypt, 939 F. Supp. 907, n. 1 (D.C. Cir. 1996); Seetransport Wiking Trader v. Navimpex Centrala Navala, 989 F. 2d 572 (2d Cir. 1993), cons. 3, XIX YBCA 812 (1994). 26  Practice is inconclusive. In favour: Fouchard, Gaillard, and Goldman, On International Commercial Arbitration, 390–93; Etat du Sénégal v. Seutin ès qualité de liquidateur amiable de la SOABI, Judgement of 5 December 1989, Cour d’appel de Paris, Fr., Rev. Arb. 164 (1990). However, this will depend on the law of the State where enforcement is sought. 27  Sedelmayer v. Russian Federation, German Federal Supreme Court, Order VII ZB 9/05, October 4, 2005, NJW-RR 2006, 198. Available at www.bundesgerichtshof.de/entscheidungen/ entscheidungen.php (last accessed 25 October 2011), at § 25. 22

254   Jorge E. Viñuales and Dolores Bentolila The specific scope of the rules on sovereign immunity significantly depends on the domestic law of the State of enforcement and it would be pointless to provide, in this chapter, a catalogue of the different legal regimes.28 The basic rule is that assets serving governmental purposes (iure imperii) benefit from immunity of enforcement, whereas assets serving commercial purposes (iure gestionis) do not.29 Overall, a rather restrictive view of the assets covered by sovereign immunity seems to prevail in practice,30 but this is not to say that awards against sovereigns are easily enforceable.31 Diplomatic,32 military,33

 These rules include national laws: (a) United States: the Foreign Sovereign Immunities Act 1976, 28 USC §§ 1330, 1602–11, 15 ILM 1388 (1976), as amended in 1988, 28 ILM 396 (1989) and in 1996/7, 36 ILM 759 (1997); (b) United Kingdom: State Immunity Act 1978, 17 ILM 1123 (1978); Canada: State Immunity Act 1982, 21 ILM 798 (1982); Australia: Foreign States Immunities Act 1985, 25 ILM 715 (1986). Yet, international law also has an important impact on this question. See e.g. the European Convention on State Immunity of 1972, European Treaty Series No. 74, 11 ILM 470 (1972). 29  See H. Fox, The Law of State Immunity (second edition, Oxford University Press, 2008). A. Reinisch, “European Court Practice Concerning State Immunity from Enforcement Measures,” (2006) European Journal of International Law 17, C. Schreuer, State Immunity: Some Recent Developments, Hersch Lauterpacht Memorial Lectures (Grotius, 1988); A. Reinisch, “Enforcement of Investment Awards”, Arbitration under International Investment Agreements, in ed. Katia Yannaca-Small (Oxford University Press, 2010), at 683. 30  K. M. Meessen, “State Immunity in the Arbitral Process”, Arbitrating Foreign Investment Disputes. Procedural and Substantive Legal Aspects, in eds. Norbert Horn and Stefan Michael Kröll (Kluwer Law International, 2004), at 397. 31  C. S. Miles, “Sovereign Immunity”, in Enforcement of Arbitral Awards against Sovereigns, ed. Doak Bishop (JurisNet, 2009), at 42. 32  An attempt to enforce the LETCO v. Liberia ICSID Award was made through the United States District Court for the District of Columbia against bank accounts held by Liberia’s Embassy, the court considered that they enjoyed immunity from execution; LETCO v. Liberia, United States District Court, District of Columbia, 16 April 1987, 2 ICSID Reports 390. 33  In LETCO v. Liberia, attempts were also made to execute the award in the United States against registration fees and other taxes due from ships flying the Liberian flag. The Court held that these were revenues that may fall within one of the exceptions of Sec. 1610 of the FSIA, such as military property of foreign States. LETCO v. Liberia, District Court, S.D.N.Y., 12 December 1986, 2 ICSID Reports 385, at 388–09. Military property is considered non-executable also in the Canadian State Immunity Act (Sec. 11(3), 21 ILM 800 (1982)), the Australian Foreign States Immunities Act (Sec. 32(3)(a), 25 ILM 722 (1986)) and the 2004 United Nations Convention which refers to “property of a military character or used or intended for use for military purposes” (Art. 21(1)(b) of the United Nations Convention). 28

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central bank,34 and cultural assets are, as a rule, excluded.35 Other assets, such as VAT refunds36 or third party charges for over-flight transit and landing rights37 have also been considered to be affected to governmental purposes and thereby shielded from enforcement procedures. Although a State may waive its immunity of execution, this is rare in practice38 and such waivers are interpreted restrictively.39 In addition, States often conduct their iure gestionis activities through separate legal entities. Commercial assets will often be the property of these entities, such as national companies or central banks. This makes it difficult for the investor to find assets that can be subject to attachment because the assets belong to a separate legal entity and not to the State itself. As noted by one commentator:  In AIG Capital Partners v. Kazakhstan investors tried to enforce an ICSID award in the United Kingdom through a third-party debt and charging order against assets of the National Bank of Kazakhstan held by a private bank in London. The High Court found that, apart from belonging to a separate legal person, the assets where not commercial in nature. See AIG Capital Partners Inc. and another v. Republic of Kazakhstan (National Bank of Kazakhstan Intervening), High Court, Queen’s Bench Division (Commercial Court), 20 October 2005, [2005] EWHC 2239 (Comm), 11 ICSID Reports 118. See also: U.S. FSIA (28 USC 1611(b)(1)); the Canadian Act (Sec. 11(4)(5), 21 ILM 801 (1982)); the British Act (Sec. 14(4), 17 ILM 1127 (1978)); the Australian Act (Sec. 35(1), 25 ILM 722 (1986)); and Art. 21(1)(c) of the 2004 UN Convention, which provide that central bank assets are immune from execution. 35  Art. 21(1)(e) of the 2004 UN Convention refers to “property forming part of an exhibition of objects of scientific, cultural or historical interest and not placed or intended to be placed on sale”; see also Hafner and Köhler, “The United Nations Convention on Jurisdictional Immunities of States and Their Property”, Netherlands Yearbook of International Law 3 (2004). D. P. Stewart, “The UN Convention on Jurisdictional Immunities of States and Their Property”, Am. J. Int’l L. 99 (2005). 36  Sedelmayer v. Russian Federation, Higher Regional Court Berlin (Kammergericht Berlin), Az. 25 W 15/03, December 3, 2003, SchVZ (2004) 102, § 44. 37  Ibid. On appeal: Sedelmayer v. Russian Federation, German Federal Supreme Court (Bundesgerichtshof), Order VII ZB 9/05, 4 October 2005. Available at www.bundesgerichtshof .de/entschei-dungen/entscheidungen.php (last accessed 1 March 2012). 38  C. Schreuer, The ICSID Convention, at 1173. E. Gaillard, “Some Notes on the Drafting of ICSID Arbitration Clauses,” ICSID Review – FILJ 3 (1988), at 146; Meessen, “State Immunity in the Arbitral Process”, at 392. 39  In Cameroon v. Wilsow Bank & Trust, the Paris Court of Appeals considered that a waiver drafted in broad terms does not entail that the State waived its immunity from execution on diplomatic assets. See CA Paris, 26 September 2001, République du Cameroun v. Wilsow Bank & Trust, Dalloz, I.R. 3017 (2001). See also Schreuer, The ICSID Convention, at 1175; regarding other cases and Art. 23 of the European Convention on State Immunity, 11 ILM 478 (1972). However, in Creighton v. Ministère des Finances de l’Etat de Qatar, the French Cour de cassation held that an agreement to arbitrate implied a waiver of immunity of execution; Cass. 1e civ. 6 July 2000, (2000) JDI, at 1054. 34

256   Jorge E. Viñuales and Dolores Bentolila [t]he end result is that the State will be effectively shielded from its creditors: when creditors try to enforce a decision against a State through assets allocated to jure imperii activities, the State will raise its immunity from execution; when creditors try to seize assets allocated to jure gestioni activities, they will be told that they are not pursuing the right debtor.40

When these entities lack independence or are the alter ego of the State, the principle of autonomy may be tempered.41 This said, domestic courts are reluctant to find these entities as a mere façade and pierce the corporate veil.42 Moreover, in some cases, a link between the dispute and the assets to be attached has been considered as a necessary requirement.43 Enforcing awards before the courts of the host State has its own specific problems. The potential hostility of the local authorities, including domestic courts, makes investors reluctant to pursue this avenue. In Azurix v. Argentina44 and CMS v. Argentina45 (subsequently acquired by Blue Ridge), the investors explored several avenues to enforce two ICSID awards but they seemed to

 E. Gaillard, “Effectiveness of Arbitral Awards, State Immunity from Execution and Autonomy of State Entities. Three Incompatible Principles”, in State Entities in International Arbitration. Iai Series, eds. E. Gaillard and J. Younan (Juris publishing, 2008), at 183. 41  In Walker International Holdings v. Société nationale des pétroles du Congo (SNPC) the Court de cassation authorized the attachment of funds held by French banks on the account of the national oil company of the Congo. The court said “SNPC according to its Statute did not possess sufficient functional independence to take autonomous decisions in its own interest and to be considered to enjoy legal and factual autonomy vis-à-vis the Congolese State.” Walker International Holdings v. Société nationale des pétroles du Congo (SNPC), Cour d’Appel de Paris, 23 January 2003; Cour de cassation, 6 February 2007, 04-13107. 42  Enforcement was refused against these entities assets in First National City Bank v. Banco para el Comercio Exterior de Cuba, 462 U.S. 611, 626–27 (1983); Benvenuti & Bonfant Srl v. Banque Commercial Congolaise, Cour de cassation Paris, 21 July 1987, 1 ICSID Reports 373, 374; AIG Capital Partners Inc. and Another v. Republic of Kazakhstan (National Bank of Kazakhstan Intervening), High Court, Queen’s Bench Division (Commercial Court), 20 October 2005, [2005] EWHC 2239 (Comm), 11 ICSID Reports 118; Cass. 1e civ., 4 January 1995, Office des cereals de Tunisie v. Bec frères, 122, JDI 649 (1995); Cass. 1e civ., May 12, 2004, Compagnie Noga d’importation et d’exportation v. EADS France, 2004 Bull. Civ. I, No. 135; Gaz. Pal., Somm. 3405 (2004). 43  Procureur de la République v. Société LIAMCO, Tribunal de grande instance, Paris, 5 March 1979, 106 JDI (1979) 65; Société Eurodif v. République Islamique d’Iran; Cour de cassation, 14 March 198 2 ILM 1062 (1984). A. Broches, “Awards Rendered Pursuant to the ICSID Convention: Binding Force, Finality, Recognition, Enforcement, Execution”, ICSID review 2, no. 2 (1987), at 330; G. R. Delaume, “Sovereign Immunity and Transnational Arbitration”, Arbitration International 3 (1987), at 38. 44  Azurix Corp v. The Argentine Republic, Award (ICSID Case No. ARB/01/12) 23 June 2006, 43 ILM 259. 45  CMS Gas Transmission Company v. The Argentine Republic Award (ICSID. Case No. ARB/01/8) 12 May 2005, 14 ICSID Reports 158. 40

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have low expections with respect to the possibility of seeking enforcement before Argentine courts.46 (b)  Procedural and Economic Difficulties The enforcement of investment awards also presents procedural and business-related difficulties. Aside from the risk that the court seized may refuse recognition or enforcement, some other procedural difficulties include excessive delays, high expenses and the potential disclosure of confidential information. Although the costs of enforcement proceedings vary from one case to the other, the estimated duration of such proceedings tends not to exceed 1 year.47 Yet, the difficulties involved in enforcing awards against States make such proceedings longer, more complex and therefore more expensive. In some cases, investors may have to initiate several proceedings in different countries where they find assets of the host State. This can be illustrated with the Sedelmayer saga, where the investor was able to seize assets of the Russian Federation only after 10 years of trying and some 20 enforcement proceedings!48 Moreover, some investment disputes are confidential and bringing them before a national court in an enforcement proceeding could make their existence and some related information public. The enforcement of investment awards may also be constrained by business-related difficulties. Investors may wish to preserve a reasonably good business relationship with either the host State or a third State linked to the latter. In this context, enforcement proceedings may be prejudicial to the business relationship. In some cases, investors may go as far as to avoid  A former Attorney General of Argentina stated to the press that if an ICSID tribunal renders an award considered by Argentina unconstitutional, Argentine courts would be empowered to decide on its constitutionality. La Nación, “Rosatti busca restarles poder a los fallos del CIADI mediante una ley”, dated Mar. 28, 2005, available at www.lana cion.com.ar/economia/nota.asp?nota_id=691070 (last accessed 1 March 2012); “El Gobierno pediría a la Corte la nulidad del laudo del Ciadi”, 17 May 2005, available at: http:// buscador.lanacion.com.ar/not.asp?nota_id=704866&high=rosatti (last accessed 1 March 2012). Instead, CMS requested a New York court to attach the funds of the Province of Santa Cruz that had been deposited in a bank in Switzerland, and which were supposed to be wired to New York. The attempt was unsuccessful and the Governor of the Province mocked the US company stating that they fell for it. La Nación, “Peralta dijo que los fondos de Santa Cruz ya están en el país”, dated Apr. 2, 2008. Available at: www.lanacion.com.ar/ politica/nota.asp?nota_id=1000641 (last accessed 1 March 2012). 47  L. Mistelis and C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes Towards Recognition and Enforcement of International Arbitral Awards. Special Section” at 351. 48  A. K. Bjorklund, “State Immunity and the Enforcement of Investor-State Arbitral Awards,” in (2008) Practice 829. See also: http://robertamsterdam.com/2008/03/russian_property_ seized_for_auction_in_germany/ (last accessed 1 March 2012).

46

258   Jorge E. Viñuales and Dolores Bentolila recourse to arbitration altogether. This was the case of many oil companies exploiting heavy oil in the Orinoco belt in Venezuela after the forced conversion of oil production sharing contracts into mixed companies controlled by the State in 2007.49 Or, if the investor has pursued arbitration proceedings, it may prefer to negotiate a post-award settlement in order to maintain the business relationship.50 The difficulties discussed in the foregoing paragraphs suggest that the basic judicial framework available for the enforcement of investment awards may have to be supplemented by some alternative methods of enforcement. In some cases, such other methods may even provide the most suitable enforcement avenue.

III.  Enforcement through Alternative Means A survey of investment disputes where enforcement was difficult or unsuccessful suggests that creditors are increasingly resorting to a variety of alternative means. As noted in the introduction, these means range from the mere negotiation of a post-award settlement to some sophisticated forms of economic or political coercion on the host State. They can be used either as a supplement to enhance the effectiveness of judicial means or on a standalone basis, when judicial means seem (or have proved to be) ineffective. Although the investor or, more specifically, the creditor always plays a key role, some measures may require the involvement of other actors. Here are some examples: (a) the investor could enter into negotiations for a postaward settlement or take steps to cause reputational damage to the creditworthiness of the host State or initiate new arbitration proceedings to put pressure on the latter or, still, sell their award at a discount to a fund that can pursue a more sophisticated enforcement strategy; (b) the investor’s (or the creditor’s) home State as well as some related third States can make diplomatic representations or, depending on the circumstances, even exercise diplomatic protection; (c) arbitral institutions can also make representations to the debtor or make non-compliance public or even propose mediation or conciliation proceedings to prompt a post-award settlement; (d) financial

 La migración de los contratos de servicios en la industria petrolera venezolana, in www .entorno-empresarial.com, November 2006, www.entorno-empresarial.com/?ed=70&pag=a rticulos&aid=596 (last accessed December 2011). 50  L. Mistelis and C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards. Special Section” at 339–40. 49

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institutions, such as the World Bank, could withdraw or suspend credit to the debtor State as well as facilitate a settlement. Often, a number of the above means will be pursued together as part of an overall enforcement strategy. By way of illustration, an investor with limited means (or patience) to pursue enforcement may sell its award at a discount to a ‘vulture’ or other funds. While the judicial enforcement of awards assigned to such funds could be potentially refused in some jurisdictions on public policy grounds,51 these funds tend to pursue more creative strategies. Thus, the award in CMS v. Argentina was assigned to a fund, Blue Ridge, which displayed an aggressive strategy of diplomatic pressure, including the request of hearings before the United States Trade Representative (USTR) to exclude Argentina from the list of beneficiary countries under the Generalized System of Preferences (GSP) program or lobbying efforts of the US Congress to vote for the withdrawal of World Bank loans. We understand that, so far, these efforts have been unsuccessful. But the ability of these funds to mobilize diplomatic and political pressure to force the debtor to comply with an award must not be underestimated. Their very specialization in distressed debt gives them means and know-how that regular investors often lack. In the following paragraphs, we analyze some of these alternative means in the light of current practice. We discuss tour à tour the means available to the investor (or the assignee of an award) (A), those requiring the intervention of the investor’s home State or other third States (B), and those requiring the intervention of an international organization or a private institution (C). A.  By Investors and Debt-Collection Funds The most frequent means pursued by investors and debt-collection funds include: (a) the negotiation of a post-award settlement; (b) public relations campaigns targeting the creditworthiness of the host State; and, in some  Under the common law rules of maintenance and champerty it is contrary to public policy to give financial support for litigation when there is no legitimate interest in the claim. Although the doctrine has been interpreted restrictively in the US in Elliott associates, LP v. Banco de la Nación and the Republic of Peru, admitting assignments of claims where the lawsuit is incidental to full payment of the debt assigned, when the enforcement of arbitral awards is assigned and the investment stays in the hands of the investor, it is difficult to consider the lawsuit, the exequatur, incidental. D. Sookun, Stop Vulture Fund Lawsuits: A Handbook (Commonwealth Secretariat, 2010), at 35. Similarly, in the UK, according to Trendtex Trading Corp v. Crédit Suisse, champerty would prohibit assignments where the assignee has no genuine commercial interest in taking the assignment and in enforcing it for his own benefit or when the cause of action is not ancillary to the right or interest assigned. However, champerty would not work as a defense to the action unless there is an abuse of process. In other words, the doctrine would only make the assignment unenforceable between the parties, at 16–554 and 19–049.

51

260   Jorge E. Viñuales and Dolores Bentolila cases, (c) the initiation of new arbitration proceedings to put pressure on the host State to comply with a previous award. (a)  Post-Award Settlements According to the aforementioned survey on “Corporate Attitudes Towards Recognition and Enforcement of International Arbitral Awards” post-award settlements are not uncommon. Some 40% of the corporations surveyed have negotiated post-award settlements.52 Although these numbers are applicable to international arbitration in general, not only mixed arbitrations,53 a settlement of an award rendered against a sovereign has advantages for both the investor and the host State. Whereas the investor will avoid spending time and money in enforcing the award, the host State will comply with its obligation at a discount or in instalments.54 The risks associated with the enforcement of an award against States together with the relative bargaining power of the parties have an impact on the value of the award and represents the value at which the creditor would be willing to settle or sell.55 When an investor anticipates that it will be difficult and/or expensive to find attachable assets, a post-award settlement may offer a suitable alternative. In the abovementioned survey, 54% of the corporations interviewed said that they had negotiated a settlement at an amount between 50% and 75% of the value of the award whereas only 35% of them settled for an amount above 75% of the value the award.56

 L. Mistelis and C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards. Special Section”, at 339. 53  Out of the total number of arbitrations in which the corporations consulted participated, 5% were against States and 21% were against State legal entities (although the percentage of post-award settlements may be different within the category of mixed arbitration, the above figures provide a preliminary indication). See Baltag, C., “Special Section on the 2008 Survey on Corporate Attitudes Towards Recognition and Enforcement of International Arbitral Awards: Enforcement”, at 398. 54  L. Mistelis and C. Baltag, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards. Special Section”, at 340. 55  Arbitral awards have a market value depending on the enforcement risks, and they can be sold to third parties. Such is the case of CMS who basically sold the unpaid award to Blue Ridge. As an investment strategy, these funds will buy awards for less and develop an aggressive tactic of diplomatic and economic pressure over the host State to induce compliance. 56  L. Mistelis, “Special Section on the 2008 Survey on Corporate Attitudes towards Recognition and Enforcement of International Arbitral Awards: The Settlement-Enforcement Dynamic in International Arbitration”, (2008) Am. J. Int’l L. 19, at 385. 52

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Settlements can be achieved by direct negotiations between the parties or assisted by other means through the intervention of conciliators or ­mediators.57 Technically, a settlement is an agreement whereby the parties relinquish their rights in favour of a compromise on the amount and modalities of payment of the award. A settlement does not necessarily involve direct cash payments. It may instead involve creative solutions with forward-looking terms, such as declaratory relief and future benefits, such as tax benefits or regulatory dispensations.58 The agreement may also include other terms, such as the release of guarantees and obligations regarding the investment (e.g. the release of certain machinery or the completion of certain works).59 At the treaty level, it has been considered that economic and physical coercion exercised by the host State over the investor to conclude an unfair post-award settlement is null and void and a violation of the fair and equitable standard (FET). In Desert Line Projects LLP v. Republic of Yemen, the investor had failed to enforce a previous award against Yemen. In a context characterized by bankruptcy proceedings and a variety of threats and attacks,60 the investor agreed to sign a post-award settlement in which the claimant relinquished over 50% of the value of the award. Yemen did not pay and the investor initiated a treaty-based arbitration against Yemen for violation of the applicable BIT, arguing that the settlement was null and void due to economic and physical duress and that the measures adopted by Yemen were contrary to the BIT. The tribunal found that although financial pressure per se does not render a settlement null, some element of abuse by the other contracting party does. The measures challenged had been abusive depriving the post-award settlement of any ‘international effect’ and breaching the fair and equitable treatment standard of the BIT.61 Yemen was ordered to

 D. Bishop, “Introduction: The Enforcement of Arbitral Awards against Sovereigns”, in Enforcement of Arbitral Awards against Sovereigns, ed. Doak Bishop (JurisNet, 2009), at 4. 58  Ibid., at 5. 59  In the case Desert Line Projects LLP v. Republic of Yemen, the tribunal disclosed the content of a post-award settlement. Although the settlement was reached under duress, it remains useful as an illustration of the contents of this type of settlements. The agreement contained the following main obligations: a) waiver of the claims and rights arising out of the award; b) the obligation to pay the settled sum according to the agreed modalities, c) the obligation of the investor to release the bank guarantees provided by the host State; d) the obligation of the investor to receive, complete and maintain all works in addition to provisional facilities established by the Company; e) the obligation of the host State to release all machinery, equipment and vehicles belonging to the investor; and f) formalities regarding endorsement. Desert Line Projects LLC v. Yemen, Award (ICSID Case No. ARB05/17) 16 February 2008, at § 144. 60  Ibid., at § 185. 61  Ibid., at § 194. 57

262   Jorge E. Viñuales and Dolores Bentolila pay the initial award.62 It is noteworthy that the tribunal considered that the relinquishment of 50% of the value of the award in a post-award settlement is unfair. In this connection, it held that a settlement is a standard of contractual practice where each party waives its rights and claims arising out of a dispute on a quid pro quo basis, and given that the domestic arbitration had already decided the dispute there was no longer a dispute.63 Thus “to accept that the amount awarded be amputated by half, falls well short of minimum standards of international law and cannot be the result of an authentic, fair and equitable negotiation.”64 This said, the amount at which the parties settled was not the only element considered by the tribunal in reaching its conclusion. (b)  Reputational Damage Another option is a public relations campaign targeting the refusal of the State to honour the arbitral award. According to one commentator “some investors apparently believe this may be their best leverage in collecting an award”.65 Bad publicity might affect the reputation of the host State, its investment climate,66 and its credit worthiness. Non-compliance with awards may have an impact on the country’s credit risk ratings. Credit-rating agencies, such as Moody’s, Standard & Poor’s and Fitch, regularly carry out sovereign risk rating exercises in which the capacity and willingness of States to service their debt in accordance with the conditions agreed with the creditors are taken into account.67 The determinants for payment capacity and willingness to repay the debt are of a different nature, reflecting macroeconomic variables, such as stock of foreign currency reserves and balance of payments flows, economic growth prospects and capacity to generate tax receipts, a variety of political factors, etc.68 Raising the awareness of the public and of credit-rating agencies about unpaid awards may influence the assessment of the unwillingness of the sovereign to pay its private debt. Countries with risky sovereign ratings may ­experience difficulties in accessing private capital markets.69 And even if the country does not borrow money internationally, sovereign ratings are used by analysts to  Ibid., point no. 3 of the dispositive part of the award.  Ibid., at § 176. 64  Ibid., at § 179. 65  D. Bishop, “Introduction: The Enforcement of Arbitral Awards against Sovereigns”, at 7. 66  J. Paulsson, “ICSID’s Achievments and Prospects”, (1991) ICSID Review – FILJ 6, at 386. 67  “What is Sovereign Risk and How to Measure it? Fixed Interest and Credit Research” (May, 2010). Available at www.cfsgam.com.au (last accessed December 2011). 68  Ibid. 69  Bank for International Settlements, Committee on the Global Financial System – CGFS Papers No. 43, “The impact of sovereign credit risk on bank funding conditions” Report 62 63

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impute a country risk premium to be included in the cost of capital computations. Such costs are then used for foreign direct investment evaluation.70 For these reasons, information on non-compliance is a significant instrument to induce a State to comply with an award. An illustration is provided by the post-award settlement concluded between Azurix and Argentina (further discussed below) where the investor undertook to assist Argentina in communicating to credit-rating agencies and banks Argentina’s compliance with its credit obligations.71 Such public relations campaigns could, however, violate confidentiality undertakings. This issue arose in Amco v. Indonesia, where the investor conducted a campaign against Indonesia while the arbitration was ­pending.72 The host State requested provisional measures from the tribunal to restrain the investor from making the dispute public based on confidentiality grounds. However, the tribunal found that neither the ICSID Convention nor the arbitration rules impose an obligation on the parties to maintain confidentiality of the arbitral proceedings.73 (c)  A New Arbitration as Bargaining Strategy Another alternative is to initiate a new arbitration arguing that the nonenforcement of (or non-compliance with) an award amounts, as such, to a breach of investment disciplines.74 The investor could pursue this as a strategy to pressurise the host State to comply with the award or to conclude a post-award settlement while the new arbitration is pending. If the State pays the award, the arbitral proceedings would be discontinued; if a settlement is achieved, it could be incorporated into the new award. As a rule, award creditors are unwilling to initiate a new arbitration against the very same respondent for rather obvious reasons. However, such a strategy may be useful when the new arbitration benefits from a more favourable regime of enforcement than the one applicable to the unpaid award.75 By submitted by a Study Group established by the Committee on the Global Financial System (2011). Available at: www.bis.org (last accessed 22 July 2011). 70  Ibid. 71  Generalized System of Preferences: 2009 Annual GSP Country Practices Review; Case No. 001-CP-09; Azurix Pre-Hearing Brief, at 9. 72  Amco Asia Corporation and others v. Republic of Indonesia, Decision on Request for Provisional Measures (ICSID Case No. ARB/81/1) 9 December 1983, 1 ICSID Reports 377 (1993). 73  Ibid., at 410–412. 74  D. Bishop, “Introduction: The Enforcement of Arbitral Awards against Sovereigns,” at 7. 75  L. Reed and L. Martinez, “Treaty Obligations to Honor Arbitral Awards and Diplomatic Protection”, in Enforcement of Arbitral Awards against Sovereigns, ed. Doak Bishop (JurisNet, 2009), at 23.

264   Jorge E. Viñuales and Dolores Bentolila way of illustration, this would be the case of a domestic award (by contrast to an international award) or of one where the losing party is a State entity (by contrast to the State itself ). These cases are generally triggered in situations where the investor holds an award against a bankrupt State entity or a State entity that only has assets in the host State where local courts make particularly difficult the enforcement of the award.76 Although the investor could try to enforce the award against the State and claim that the legal entity is an instrumentality of the State, the investor may also sue the State based on a breach of a BIT. The availability of the latter option will depend on (i) whether the award or the rights it declares qualify as protected investments under a treaty as well as on (ii) whether non-compliance or nonenforcement may amount to a violation of the treaty standards. Regarding (i), tribunals tend to consider that arbitral awards are not per se investments. Yet, the underlying rights enforced through such awards may qualify as investments. In Saipem v. Bangladesh, the protected investments were the contractual rights which were crystallized or declared by the award.77 According to this tribunal an arbitral award and the arbitration clause (as a contractual remedy) are part of the investment as an overall operation and, as such, may be protected by the investment treaty.78 In FPS v. Czech Republic, the investments were the contractual rights transformed into new rights in the award whose investment character was maintained by virtue of Article 1(a) of the applicable BIT.79 The tribunal in GEA v. Ukraine took a more restrictive stance and rejected the argument that an ICC award was an investment because the rights it declared resulted from a settlement which

 As to awards against bankrupts’ states entities these include: GEA Group Aktiengesellschaft v. Ukraine, Award, (ICSID Case No. ARB/08/16) 31 March 2011 [GEA v. Ukraine] (ICC award against Oriana which was bankrupt); Petrobart Ltd v. Kyrgyzstan, Award (SCC Case No. 126/2003), 29 March 2005 [Petrobart v. Kyrgyztan] (award of the Kyrgyz court of arbitration against RSM, the government obtained a suspension of enforcement proceedings 3 months before it was declared bankrupt). As to non-bankruptcy situations but where assets exist only in the host State is Saipem SpA v. Bangladesh, Award (ICSID Case No. ARB/05/7) 20 June 2009 [Saipem v. Bangladesh] (ICC award against Petrobangla but domestic courts of Bangladesh revoked arbitrators powers and annulled the award). 77  The Tribunal said “the rights embodied in the ICC Award were not created by the Award, but arise out of the Contract. The ICC Award crystallized the parties’ rights and obligations under the original contract.” The tribunal did not consider necessary to determine whether the award constituted an investment as such, Saipem v. Bangladesh, Ibid., at § 127. 78  Saipem v. Bangladesh, at § 110. 79  This article provides that “[a]ny change in the form of an investment does not affect its character as an investment”, Frontier Petroleum Services Ltd v. Czech Republic, Final Award, (PCA – UNCITRAL Arbitration Rules; IIC 465) 12 November 2010 [FPS v. Czech Republic] at § 231. 76

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was not itself an investment.80 The tribunal further noted in arguendo that, even if the settlement were to be seen as an investment, the fact that the Award rules upon rights and obligations arising out of an investment does not equate the Award with the investment itself. In the Tribunal’s view, the two remain analytically distinct, and the Award itself involves no contribution to, or relevant economic activity within, Ukraine such as to fall – itself – within the scope of Article 1(1) of the BIT or (if needed) Article 25 of the ICSID Convention.81

The rights arising out of an award relating to an investment are first and foremost pecuniary obligations. They are a remedy against damage suffered in the investment rights, be these contractual or not. This obligation is ancillary to and separate from the investment per se. It is ancillary because as a remedy, its existence depends on the existence of a contractual or property right (the investment) and its violation will affect the effectiveness of such right. It is separate from the investment because the pecuniary debt can, as such, be waived or assigned to third parties independently from the investment. The assignment of the rights arising out from an award relating to an investment to third parties does not make these parties the new owner of the investment. Therefore, a debt-collection fund who acquires the rights arising from an award could not launch a new arbitration as an enforcement strategy because it does not have an investment. Arguably a distinction should be made between situations where the investment continues to exist and situations where the investment no longer exists. In the former case, the investment and the award-related rights would be more easily distinguished than in the latter case, where the award-related rights embody the value of the initial investment. In those cases where the award transforms the rights of the parties, e.g. by changing their contractual rights into a settlement, the award itself would arguably embody the investment. By way of illustration, in FPS v. Czech Republic the original contractual rights (i.e. payments made to MA and Davidová) were transformed in the arbitral award into an entitlement to a first secured charge.82 With respect to (ii), for this strategy to be pursued non-compliance with or the non-enforcement of an award would have to amount (prima facie and after the assessment of the merits) to a breach of a BIT. In Saipem v. Bangladesh, the tribunal concluded – quite debatably83 – that the non-enforcement  GEA v. Ukraine, at § 161.  Ibid. 82  FPS v. Czech Republic, at § 231. 83  The possibility of expropriating arbitral awards by its non-enforcement has been confirmed by the ECHR in Stran Greek Refineries and Stratis Andreadis v. Greece, 9 December 1994 (Application No. 13427/87), Kin-Stib & Majkic v. Serbia, 2010, (Application No. 80 81

266   Jorge E. Viñuales and Dolores Bentolila of an ICC award by Bangladeshi courts amounted to an expropriation of the rights declared by the award.84 But this case is exceptional and, as a rule, a refusal of enforcement or a challenge before domestic courts would not amount to a violation of investment disciplines. Such was the conclusion of the tribunals in FPS v. Czech Republic and GEA v. Ukraine, where a refusal by domestic courts to enforce an award was considered to be in conformity with the BIT because no ‘egregious’85 mistreatment nor any arbitrariness, discrimination or bad faith could be discerned in the conduct of the local courts.86 For these ­reasons, this strategy should be limited to situations where non-compliance and non-enforcement of the award are blatantly unfair. One important consideration in deciding whether to initiate new arbitration proceedings as a tool to facilitate the enforcement of an unpaid award lies in the nature of the arbitration. Specifically, when the new arbitration is formally conducted under the ICSID Convention, rather than helping this approach may delay collection of the amounts claimed. Article 26 of the ICSID Convention provides indeed that ICSID arbitration is an exclusive remedy, which may have the effect of freezing parallel enforcement proceedings. This can be illustrated by reference to MINE v. Guinea,87 where the 12312/05). In the field of investment arbitration, given that the protected investment is the contractual right crystallized or declared in the arbitral award, it will be protected by expropriation as long as contractual rights are also protected. While investment arbitral tribunals generally consider that contractual rights may be expropriated (Revere Copper and Brass, Inc v. Overseas Private Investment Corporation, AAA Case No. 16/10/0137/76, Award of 24 August 1978, 17 ILM 1321; Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, ICSID Case No. ARB/84/3, Award of 20 May 1992, 3 ICSID Reports 189; Wena Hotels Ltd. v. Arab Republic of Egypt Award (ICSID Case No. ARB/98/4) 8 December 2000, 6 ICSID Reports 68; Waste Management, Inc. v. United Mexican States, Award of 30 April 2004, 43 ILM 967 (2004)). See however Z. Douglas, The International Law of Investment Claims (Cambridge University Press, 2009), at 202 et seq. 84  See Saipem v. Bangladesh, at § 129. 85  In GEA v. Ukraine, the tribunal stated that GEA had not presented evidence that the actions taken by the Ukrainian courts were “egregious” in any way and that they amounted to anything other than the application of Ukrainian law, at § 236. 86  In SPS v. Czech Republic the tribunal considered that the refusal to enforce an arbitral award on the grounds of public policy is not a violation of the BIT. “As far as the alleged violation of the fair and equitable treatment standard . . . this Tribunal concludes that there is no indication that the courts determining Claimant’s requests for the recognition and enforcement of the Final Award acted arbitrarily, discriminatorily, or in bad faith. Claimant’s requests were entertained by four levels of courts and Claimant had several opportunities to submit legal arguments on the proper interpretation and application of the exceptions to the recognition and enforcement of the Final Award established under Article V of the New York Convention”, at § 529. 87  Maritime International Nominees Establishment (MINE) v. The Republic of Guinea, Award (ICSID Case No. ARB/84/4) 6 January 1988, 4 ICSID Reports 54 [MINE v. Guinea].

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investor pursued ICSID proceedings against Guinea in parallel with other proceedings in Belgium and Switzerland seeking enforcement of an unpaid AAA award. The courts of both countries considered that enforcement proceedings are a remedy and as such prohibited under Article 26 of the ICSID Convention,88 a position which was also taken by the ICSID tribunal. B.  By the Investor’s Home State or Other Third States Historically, the main avenue available for the investor’s home State to protect the interests of its nationals was diplomatic protection (a). Yet, in contemporary practice, home States and other relevant third States (e.g. the State of the seat of the arbitration or the home State of the parent company) have resorted to other means of enforcement such as diplomatic exchanges or retorsion measures (b). (a)  Diplomatic Protection Diplomatic protection is a concept of customary international law whereby a State espouses the claim of its national against another State and pursues it in its own name.89 In the course of the ICSID Convention’s drafting, the exclusion of diplomatic protection was considered necessary in order to give full effect to arbitration, avoid a multiplicity of claims and claimants and remove the dispute from the realm of politics and diplomacy.90 This resulted in the introduction of Article 27(1), which excludes the right to resort to diplomatic protection or to bring an international claim in respect of a dispute to which the State and the investor had consented to arbitration, unless such other Contracting State fails to abide by and comply with the award rendered in such dispute. Many BITs include similar provisions suspending the exercise of diplomatic protection unless the award is not complied with.91 In this context, the exercise of diplomatic protection, widely understood, may take different forms, from negotiation to the institution of dispute

 Guinea v. MINE, Belgium, Court of First Instance, Antwerp, 27 September 1985, 4 ICSID Reports 32; Guinea v. MINE, Switzerland, Tribunal fédéral, 4 December 1985, 4 ICSID Reports 39, at 216; Guinea v. MINE, Tribunal de première instance, Geneva, 13 March 1986, 4 ICSID Reports 41, at 219. 89  In 2006 the International Law Commission (“ILC”) adopted Draft Articles on Diplomatic Protection. See Official Records of the General Assembly, Sixty-first Session, Supplement No. 10 (A/61/10).   90  C. Schreuer, The ICSID Convention, at 419.   91  See Z. Douglas, “The Hybrid Foundations of Investment Treaty Arbitration”, at 190. He cites amongst others, Chile, Switzerland, U.K. and Mongolia Model BITs as well as the Italy- Bangladesh BIT, Jordan-Italy BIT, Germany-Philippines BIT, Cambodia-Malaysia BIT and Korea-Bolivia BIT. 88

268   Jorge E. Viñuales and Dolores Bentolila s­ ettlement proceedings or even the adoption of countermeasures.92 The dispute could also be referred to an international tribunal, such as the ICJ93 or several other mechanisms (e.g. a panel under Article 1136 of the NAFTA).94 Diplomatic protection can be either an alternative or a supplement to the judicial enforcement of investment awards.95 It has been suggested that, during the negotiations of the ICSID Convention, the possibility to resort to diplomatic protection as a ultima ratio was seen as a necessary check on the shield provided to host States by their immunity of execution.96 However, this mechanism proved to be unworkable for at least three reasons.97 First, the exercise of diplomatic protection entirely depends on the discretion of the home State.98 The government may refuse to take up the claim or it may waive it or, still, it may decide to discontinue the proceedings. Moreover, the home State may be unwilling to espouse the claims of their nationals. This is illustrated by the Sedelmayer saga. After many unsuccessful attempts to seize Russian assets before German courts, Mr. Sedelmayer asked the German government to espouse his claim. However, Germany refused and, according to Sedelmayer, the German government even tried to dissuade him from seeking the attachment of Russian assets brought to Germany for an international aviation show.99 Second, the formal exercise of diplomatic protection is subject to certain conditions.100 The aggrieved natural or juridical person has to be a national of the State exercising diplomatic protection,101 the host State must have committed an internationally wrongful act and the investor is required to exhaust

 C. Schreuer, The ICSID Convention, at 1109.  See Art. 64 of the ICSID Convention.   94  Art. 1136(5) of NAFTA provides for a specific procedure for non-compliance with an award. A panel may determine that the failure to abide by and comply with the award is inconsistent with the obligations under the NAFTA and may recommend that the party concerned comply with the award. See also A. Broches, The Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 136 Recueil des Cours 331, at 376 et seq. (1972-II).   95  C. Schreuer, The ICSID Convention, at 426.   96  C. Schreuer, “Investment Protection and International Relations”, in The Law of International Relations – Liber Amicorum, eds. A. Reinisch and U. Kriebaum (Eleven International Publishing 2007), at 348.   97  J. Paulsson, “Arbitration without Privity”, ICSID Review 10, no. 2 (1995), at 255. 98  C. Schreuer, “Investment Protection and International Relations,”, at 345. 99  L. E. Peterson, “How Many States Are Not Paying Awards under Investment Treaties?” 100  See 2006 ILC Draft Articles on Diplomatic Protection Official Records of the General Assembly, Sixty-first Session, Supplement No. 10 (A/61/10). 101  Nationality has to exist continuously from the time of the injury until the claim is made or until the claim is settled, Schreuer, The ICSID Convention, at 415.   92   93

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the legal remedies available in the host State.102 It is not entirely clear the extent to which this latter condition applies in the context of investment disputes. It has indeed been suggested that the exclusion of the exhaustion of local remedies in Article 26 of the ICSID Convention also applies among Contracting Parties in cases of diplomatic protection for non-enforcement.103 Third, the remedies available in case of diplomatic protection are remedies in favour of the home State, not the investor.104 Therefore, even if diplomatic protection is invoked by the home State, this would not guarantee that the investor will collect his award. This is the case not only when the home State seeks (or is eventually granted) merely declaratory relief but also when it is granted compensation, since there is no guarantee that it will transfer the compensation received to the aggrieved national.105 (b)  Diplomatic Exchanges and Measures of Retorsion As mentioned above, the ICSID Convention does not preclude Contracting States from undertaking diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute at any time. These exchanges may include simple attempts to facilitate the settlement of the dispute amicably106 but they may also take more intrusive forms. An example is provided by Aucoven v. Venezuela where Mexico, the home State of Aucoven’s parent company, took a number of diplomatic steps to facilitate an amicable solution of the dispute between Venezuela and the investor, such as writing letters to the Venezuelan Ministry of Foreign Affairs or meeting with government officials to explore a viable and mutually acceptable solution.107 Although these exchanges took place before the award was rendered, they illustrate the type of means – short of diplomatic protection – that

 Ibid.  M. Paparinskis, “Investment Arbitration and the Law of Countermeasures”, BYIL 79 (2008), at 312. 104  Mavrommatis Palestine Concessions (Greece v. United Kingdom) [1924] P.C.I.J. Series A, No. 2, 2; C. F. Amerasinghe, Diplomatic Protection (Oxford University Press, 2008), at 319–20. 105  While it is usually considered that the State has absolute discretion on the disposal of the compensation received (US-German Mixed Claims Commission, Administrative Decision V, 7 UNRIAA 119, at 152), Art. 19 (c) of the 2006 ILC Articles on Diplomatic Protection provides that States should transfer any compensation received from the responsible State in respect of an injury to a national to the injured national. Ibid., at 320–24. 106  See Autopista Concesionada de Venezuela, C.A. v. Bolivarian Republic of Venezuela, Decision on Jurisdiction (ICSID Case No. ARB/00/5), 27 September 2001, 16 ICSID ReviewFILJ 469, at §§ 138–139. 107  These steps were considered as simple diplomatic exchanges in the meaning of Article 27(2) of the ICSID Convention. See ibid. at §§ 138–139. 102 103

270   Jorge E. Viñuales and Dolores Bentolila a State may resort to.108 An example of diplomatic exchanges relating more specifically to a situation where the host State has failed to comply with an existing award is provided by the Petrobart v. The Kyrgyz Republic.109 For several years, the Kyrgyz Republic had refused to pay an award rendered under the Energy Charter Treaty in favour of Petrobart Limited, a Cypriot energy trader. What is particularly noteworthy in this case is that the initiative to start diplomatic exchanges came neither from the investor’s home State nor the home State of its parent company but from Sweden, the State were the arbitration institution that handled the proceedings was located. Sweden considered indeed that it had an interest in ensuring the respect of awards rendered by the Stockholm Chamber of Commerce.110 Interestingly, following a number of diplomatic exchanges, the Kyrgyz Republic finally agreed to pay the award.111 Other examples of diplomatic manoeuvring to induce a host State to comply with an investment award are provided by the Azurix and CMS cases. Here, the creditors (which included a debt-collection fund, Blue Ridge, the assignee of CMS) filed petitions with the United States Trade Representative in order to review the eligibility of Argentina as a beneficiary of the U.S. GSP.112 Under this program, 129 developing countries (including Argentina) benefitted from preferential duty-free entry for thousands of products. To be eligible for the program, countries must meet a number of criteria that

 Another example of the use of political pressure at an even earlier stage of the dispute is provided by Compañía del Desarrollo de Santa Elena S.A. v. Republic of Costa Rica Award (ICSID Case No. ARB(AF)/00/01) 17 February 2000, at §§ 24–26. In this case, the United States, as the investor’s home State, pushed Costa Rica to consent to arbitration. This was done through the so-called ‘Helms Amendment’ prohibiting foreign aid to any country that had expropriated property of US citizens or corporations of which US citizens owned at least 50% of it, unless the country provided an effective remedy including ICSID arbitration. This law was invoked by the US Government to request the delay of a loan to Costa Rica by the Inter-American Development Bank, until Costa Rica consented to ICSID arbitration. Eventually, Costa Rica consented to arbitration. 109  L. E. Peterson, “Lengthy debt collection battle ends, as former Soviet state pays arbitral award; unusual form of diplomatic assistance seen” (29 September 2011). 110  L. E. Peterson, “How Many States Are Not Paying Awards under Investment Treaties?”. 111  According to reports “[a] source familiar with this process tells IAReporter that the Swedish Foreign Office took the view that it should advocate for payment of a “Swedish arbitral award” notwithstanding any other Swedish connection to the case. Consequently, the unpaid award was raised on at least 4 discrete occasions in bilateral diplomatic talks”, L. E. Peterson, “Lengthy debt collection battle ends, as former Soviet state pays arbitral award; unusual form of diplomatic assistance seen”. See also, Peterson “As new arbitral claim is brought against Kyrgyzstan, an ICSID award remains unpaid” (29 September 2011). 112  Federal Register/Vol. 75, No. 154/Wednesday, 11 August 2010/Notices 48737. 108

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can be regularly reassessed.113 The list of beneficiaries is subject to revision114 and any person may present a petition to the GSP Subcommittee to request modifications to the list of eligible countries for the GSP.115 It is under this mechanism that the creditors requested that Argentina’s designation as a Beneficiary Developing Country under the GSP be suspended or withdrawn.116 They argued that Argentina had failed to comply with its obligations under the relevant investment awards and that, as a result, it no longer met the eligibility requirements to benefit from the GSP.117 Further, the creditors argued that even if the President has the power to waive the mandatory criteria of US Code § 2462 when this is “in the national economic interest of the US”, the situation did not fall within the scope of this exception.118 To ­understand the stakes of this initiative, one must keep in mind that the delisting of Argentina could have significant economic repercussions for its export industry, which, according to estimates, had amounted to more than USD 500 million in benefits in 2010.119 This may explain why, a few days after the petition was filed, Argentina agreed to negotiate with Azurix the conditions for the payment of the award.120 According to Azurix, an agreement was indeed reached but it: . . . included significant advantages for Argentina, as it included a reduction in the amount of the Award and interest. The agreement also specified that, upon payment, all pending claims and disputes between Azurix and Argentina would be concluded, and that Azurix would withdraw its December 4, 2009 petition to the GSP Subcommittee. Finally, Azurix also offered in good faith to assist  These conditions may include: maximum per capita annual income level; geopolitical requirements (certain countries with communist regimes, e.g. China and Vietnam, or with links to terrorist groups, e.g. Libya and Iran, are excluded from the system); ‘good conduct’ requirements (e.g. States that have seized property of Americans without compensation can be ineligible); etc. See: GSP Guidebook, available at www.ustr.gov/webfm_send/2880, 20–21 (last accessed 1 March 2012). 114  Based on the annual review conducted by GSP Subcommittee. See U.S. Code § 2462. 115  See GSP Guidebook, available at www.ustr.gov/webfm_send/2880 (last accessed 1 March 2012). 116  Azurix Pre-Hearing Brief, at 14. 117  U.S. Code § 2462 “The President shall not designate any country a beneficiary developing country under this subchapter if any of the following applies . . . (b)(2)(E). Such country fails to act in good faith in recognizing as binding or in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens, which have been made by arbitrators appointed for each case or by permanent arbitral bodies to which the parties involved have submitted their dispute.” 118  Azurix Pre-Hearing Brief, at 15–17. 119  See La Nación, “EEUU suspende beneficios para exportaciones argentinas” (17 February 2011). 120  Azurix Pre-Hearing Brief, at 8. 113

272   Jorge E. Viñuales and Dolores Bentolila Argentina, following payment, in communication with credit rating agencies and international banks with regard to Argentina’s compliance with ICSID awards.121

In response to the creditors’ strategy, Argentina sent a letter to the US Government stating that it was in full compliance with its international obligations under the ICSID Convention because, in order to be enforced, ICSID awards must be first brought before Argentine domestic courts in accordance with Article 54 of the ICSID Convention. It also noted that should there be any disagreement on this point, it contemplated the possibility of submitting the case to the International Court of Justice.122 Notwithstanding this, in March 2012 Argentina’s designation as beneficiary under the GSP was suspended “because it has not acted in good faith in enforcing arbitral awards in favour of United States citizens”.123 C.  By International Organizations or Private Institutions A number of alternative means of enforcement can be pursued by international organizations or private institutions. Among these, two are particularly noteworthy. First, arbitration institutions, either inter-governmental (e.g. ICSID) or private (e.g. the International Chamber of Commerce) may play a role in the enforcement of arbitral awards by reminding the debtor of its obligation to comply with the arbitral award or by facilitating the negotiation of a settlement (a). Second, international development banks, such as the World Bank or other regional banks, may play a significant role in the enforcement of arbitral awards through a variety of channels (b). (a)  Arbitral Institutions Arbitration institutions may play a role in the enforcement of investment awards in several ways. They may, for instance, host post-award settlement discussions124 or, more frequently, remind the debtor of its obligation to comply with the award. According to some commentators, despite the absence of a clear legal basis in the ICSID Convention, the ICSID Secretariat ­sometimes reminds recalcitrant award debtors of the importance of payment,  Ibid., at 9.  La Nación, “Ofensiva Argentina para frenar a EE.UU” (21 September 2011), available at http://www.lanacion.com.ar/1407976-ofensiva-argentina-para-frenar-a-eeuu (last accessed 1 March 2012). 123  Proclamation by President Barack Obama to modify duty-free treatment under the GSP and for other purposes (26 March 2012) available at www.globalarbitrationreview.com/ cdn/files/gar/articles/White_House_statement.pdf (last accessed 3 April 2012), § 2. 124  According to reports, ICSID has hosted such negotiations at least once. See A. R. Parra., “The Enforcement of ICSID Awards”, Enforcement of Arbitral Awards against States, in ed. Doak Bishop (JurisNet, 2009), at 138. 121 122

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if only to avoid the accrual of further interest on the outstanding amount of the debt.125 Another possibility is to make non-compliance public. By way of illustration, in the context of the Grain and Feed Trade Association (‘GAFTA’),126 the Arbitration Rules specifically provide that: In the event of any party to an arbitration . . . neglecting or refusing to carry out or abide by a final award of the tribunal [. . . ] the Council of GAFTA may post on the GAFTA Notice Board, Web-site, and/or circulate amongst Members in any way thought fit notification to that effect.127

The Rules add in this connection that: [b]efore ‘posting’, GAFTA communicates with the defaulter and asks whether there is anything to be said – for instance, whether there is an outstanding balance due to him from the successful party. However, where GAFTA is satisfied that there is a default, its members are informed.128

The reasons why making an award public may incite the debtor to comply have already been discussed in connection with the question of reputational damage. Suffice it to add here that arbitral institutions benefit from a legitimacy that the creditor cannot claim. Although an arbitral institution may not go as far as pursuing an awareness campaign on unpaid awards, their mere posting of the information on unpaid awards facilitates the efforts of creditors and may add a measure of objectivity to their claims. (b)  The World Bank The World Bank is an important source of financial assistance to developing countries. The access of these countries to international financial markets is often difficult or very expensive (in terms of the interest rates they have to pay to borrow in international markets). This situation places the World Bank in a key position as a provider of financial and technical assistance as a result of which the Bank may exercise substantial leverage over its clients.129  Ibid., 137–38. See also J. Paulsson, “ICSID’s Achievments and Prospects”, 386; C. Schreuer, The ICSID Convention, at 1088; A. K. Bjorklund, “Symposium: Arbitration and National Courts: Conflict and Cooperation: Sovereign Immunity as a Barrier to the Enforcement of Investor-State Arbitral Awards: The Re-policitization of International Investment Disputes”, (2010) Am. Rev. Int’l Arb. 21, at 238; D. Bishop, “Introduction: The Enforcement of Arbitral Awards against Sovereigns”, at 7. 126  GAFTA official website available at http://gafta.com/ (last accessed 8 February 2012). 127  GAFTA Arbitration Rules, Art. 22(1). 128  Ibid. 129  H. Shams, “The World Bank and Investment Protection: A Question of Accountability,” in Arbitrating Foreign Investment Disputes. Procedural and Substantive Legal Aspects, eds. Norbert Horn and Stefan Michael Kröll (Kluwer Law International, 2004), at 111–1142. 125

274   Jorge E. Viñuales and Dolores Bentolila For present purposes, the question is to what extent the World Bank may use this leverage to incite borrowers to comply with unpaid arbitral awards. According to the World Bank’s Operational Manual there are three types of disputes between a member country and the nationals of other member countries in which the Bank takes an interest:130 (a) disputes over a failure to service external debt;131 (b) disputes over compensation to aliens when their property has been expropriated;132 and (c) disputes over the breach of governmental contracts.133 When a borrower country is unwilling to take steps or make necessary efforts to resolve or settle these disputes, the World Bank may be led to withhold or suspend lending to the country until such disputes have been solved.134 The decision of the Bank must be based on an assessment that the conduct of the borrower country is ‘substantially harming’ its credit worthiness.135 Under such circumstances, the Bank “may not appraise proposed projects in such a country unless it has good grounds for believing that the obstacles to lending will soon be removed.”136 The Bank may also call on the parties to find a settlement or otherwise seek to promote a prompt and adequate settlement.137 When the dispute concerns a project financed by The World Bank’s funds, the Bank may even assist in the negotiation of a settlement.138 Although non-compliance with arbitral awards is not specifically listed as a motive to withhold loans or to urge the parties to settle the dispute, it could arguably be seen as failure to take the necessary steps or make appropriate efforts to reach a fair settlement between the parties. Given the institutional links between ICSID and IBRD and IDA, which are all part of the World Bank’s Group, it has been suggested that this connection could play a significant role in fostering compliance with ICSID awards.139 It is, however, unclear if (and the extent to which) ICSID’s affiliation with the World Bank Group implies an “institutional gravitas that creates an incentive for sovereigns to comply with ICSID awards, lest they have difficulty securing future World  The World Bank Operational Manual, Operational Policies (WB OP 7.40) and as to the procedure see: The World Bank Operational Manual, Bank Procedures (WB BP 7.40). 131  WP OP 7.40 §§ 2–4, 8. 132  WP OP 7.40 §§ 5–7, 8. 133  WP OP 7.40 §§ 9–10. 134  WP OP 7.40 §§ 3, 5. 135  This is on a pure policy perspective. “This is evidenced in the fact that the Bank Procedures for implementing this Bank policy do not require any technical credit risk assessment as a precondition for taking a decision on the continuity of the Bank’s lending”, Shams, “The World Bank and Investment Protection: A Question of Accountability”, at 124. 136  Ibid. 137  WB OP 7.40 §§ 8–10. 138  WB OP 7.40 § 10. 139  C. Schreuer, The ICSID Convention, at 1107–08. 130

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Bank financing”.140 Although the World Bank has used this leverage in the post-war nationalisations of the 1960s or in the withholding of funds during the Anglo-Persian Oil Company dispute of the late 1940s or, still, in the Suez Canal dispute in the early 1950s,141 there is little practice in connection with unpaid ICSID awards. In Azurix v. Argentina142 and CMS v. Argentina,143 the lobby efforts of Azurix and Blue Ridge led the US government to sanction Argentina for the unpaid arbitral awards by voting in the World Bank and the Inter-American Development Bank to withdraw or suspend loans to Argentina.144 This strategy could potentially affect certain applications for credit made by Argentina amounting to some USD 1.600 millions.145

IV.  Conclusion The foregoing analysis suggests that the enforcement of investment awards can be pursued through a variety of avenues in addition to (or aside from) the basic legal regime for the recognition and enforcement of arbitral awards. This may be good news for aggrieved investors seeking to recover, as they would be able to avail themselves of a wider palette of means. However, from a policy perspective this chapter leads to a more nuanced conclusion. The investment arbitration regime was specifically developed to limit the incidence of inter-State politics on the resolution of investment disputes, but it left open the possibility to resort to diplomatic protection to overcome the difficulties on the enforcement of arbitral awards due to immunity of execution. Yet, diplomatic protection has proved to be a difficult option in practice because: (i) as a general matter States seem increasingly reluctant to exercise diplomatic protection; (ii) such exercise is, in all events, subject  S. Frank, “Foreign Direct Investment, Investment Treaty Arbitration, and the Rule of Law”, (2007) Pacific McGeorge Global Business & Development Law Journal 19, at 372; C. Schreuer, The ICSID Convention, at 1108. 141  H. Shams, “The World Bank and Investment Protection: A Question of Accountability,” at 125. 142  Azurix v. Argentina. 143  CMS v. Argentina. 144  El Clarín, “EE.UU votará contra los créditos internacionales para la Argentina”, (22 September 2011). Available at www.clarin.com/politica/EEUU-votara-creditos-internacionalesArgentina_0_559144131.html (last accessed 1 March 2012). See World Bank web site, available at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/0,,content MDK:22206342~menuPK:258559~pagePK:2865106~piPK:2865128~theSitePK:258554,00. html (last accessed 1 March 2012). 145  El Clarín, “EE.UU votará contra los créditos internacionales para la Argentina”, (22 September 2011), available at www.clarin.com/politica/EEUU-votara-creditos-internacionalesArgentina_0_559144131.html (last accessed 1 March 2012). 140

276   Jorge E. Viñuales and Dolores Bentolila to rather demanding conditions; and (iii) the remedies available – including potential compensation – are entirely in the hands of the home State, not the investor. The alternative means discussed in this article are perhaps a better option to collect a debt arising from an award. They mobilize a variety of actors (States, IOs, private institutions) and measures (affecting creditworthiness, influencing the operation of certain IOs or the availability of a GSP) and, thereby, they rely on different pressure strategies. In practice, these means can achieve a reasonable level of effectiveness. This effectiveness is sometimes due to the involvement of debt collecting funds, which can mobilize (i) specific know-how in the enforcement of arbitral awards, (ii) an institutional structure facilitating the adoption of enforcement measures and (iii) effective lobbying strategies. Investors with limited resources or coming from States with fewer means of political persuasion may sell their awards to these entities. The market has thus created an alternative fall back mechanism to enforce arbitral awards where the bargaining power of the investor is insufficient to collect the value of the award. The investor will certainly have to pay a price for it, but it will dispose of an alternative mechanism to the volatile institution of diplomatic protection. Of course, the use of these alternative means to enforce awards is sometimes problematic. An excessively intrusive strategy may be very disruptive to the economy of the country and to wider social interests. An example would be the triggering of a lower sovereign credit rating due to disproportional reputational damage.146 In addition, in cases of defaulting States, such as Argentina in 2005, sovereign debt creditors compete with award creditors. While default often requires complex restructuring of sovereign debt, award creditors, in particular vulture funds, will pursue the full value of the debt through independent channels, as did Elliott Fund with respect to Peruvian debt in the 1990s. This might be disruptive to the restructuring of the sovereign debt of the host State, in particular after the Abaclat decision on jurisdiction, where an arbitral tribunal asserted jurisdiction over the claims of 60,000 Argentine sovereign bondholders.147 While some concerns have been raised in connection with litigation to collect sovereign debts against Zambia and Liberia, which led to the Highly Indebted Poor Countries ­initiative (HIPC)  “U.S. Credit Downgraded: S&P Reduces Rating To AA+”, Haff Post Business, available at www.huffingtonpost.com/2011/08/05/downgrade-us-standard-and-poors_n_919867.html (last accessed 1 March 2012). 147  Abaclat and ors v. Argentina, Decision on Jurisdiction and Admissibility (ICSID Case No. ARB/07/5) 4 August 2011, available at http://italaw.com/documents/AbaclatDecisionon Jurisdiction.pdf (last accessed 1 March 2012); and Dissenting opinion of Georges Abi Saab of 28 October 2011, available at http://italaw.com/documents/Abaclat_Dissenting_ Opinion.pdf (last accessed 1 March 2012). 146

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limiting the collection of debts by vulture funds,148 enforcement of investment arbitral awards remains an area where further regulation is needed. The best avenue remains the negotiation of post-award settlements, which despite their many intricacies, offer an option adapted to the parties circumstances and needs. Post-award settlements will normally entail a reduction of the value of the award, but the adoption of intrusive stances and measures affecting wider social interests will be more easily avoided.

 However, these concerns are focused on the hurdles of highly indebted poor countries to restructure their public external debt. As a result of these concerns the World Bank adopted an initiative to reduce the amount commercial creditors may recover against Highly Indebted Poor Countries (HIPC). This initiative has been implemented by some countries through national laws, such as the UK by the UK Debt Relief 2010 Act.

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Section Four: Perspectives on the Interaction Between Diplomatic and Judicial Means

Chapter Thirteen Two Cases in Perspective: Boundary Delimitation in the Bakassi Peninsula and Criminal Accountability in Kenya Interview of H.E. Kofi Annan conducted by Nicolas Michel

Nicolas Michel Thank you very much, Mr. Secretary-General, for agreeing to participate indirectly in this way in our symposium. I know that you would have appreciated being able to participate in person, but since you were prevented from doing so, you now offer the participants a very kind way of sharing this day with them. The general topic of the symposium is the relationship between diplomatic and judicial means of dispute settlement. You personally have been involved in a number of cases and situations where both means did play a role and could play a role. We found it interesting to select more particularly two specific situations. First, the situation relating to the Bakassi Peninsula. That was a dispute between Cameroon and Nigeria on their land and maritime boundary. While a judgment was rendered by the ICJ in 2002, it took your efforts to get a full implementation of this judgment. Through mediation efforts you succeeded in bringing the parties together to negotiate the so-called Greentree Agreement that was concluded in 2006. And the second situation we will address is the one you experienced in Kenya, where the issue was more the relationship between diplomatic means and criminal accountability mechanisms. So, if you would like, we could start with the Bakassi situation. I think it would be interesting to hear from you when you were involved in the case, because the application was filed in 1994, you started your functions as Secretary-General in 1997 and the judgment was rendered in 2002. So, when were you involved? Was it before the judgment or after the judgment?

282   Nicolas Michel

Kofi Annan Now, first of all, let me say I am very happy to have the chance to discuss this with you and I am really sorry that I won’t be able to join you and the others at the seminar. But, thanks for giving me an opportunity to share some of my views with you and the others. Let me start by saying that, as far as Bakassi is concerned, I got involved before the judgment, and I will tell you why. Because, over the period prior to going to the Court there had been quite a lot of tensions and conflicts between Nigeria and Cameroon, and even when the case was in the Court, there were periodic eruptions. And I was pleased that they did go to the Court, but the judgment of the Court is an important step, not a final destination, because sometimes a court can come up with a judgment, and the parties refuse to implement or drag their feet, which gets us into the worst of all possible situations. I think a case in point is Eritrea and Ethiopia. So, I spoke to the two leaders and said that I thought they should begin thinking about how they implement the decision, and offered to help. At that point there was hardly any contact between the two leaders. They were not engaged at all. I spoke to Judge Guillaume, who was the President of the International Court of Justice, to tell him that I intended to approach the two leaders to help them implement the Court’s decision, and that I’d be grateful if he would let me know three months or so prior to the decision, so that I could begin to engage the parties. I didn’t want to know about the decision, but just the date on which the decision would be handed down. So I got a signal from him that the decision would be released on such and such a date. I then called the two leaders to ask if they would be prepared to meet with me to discuss the decision of the Court which was going to be released in three months and how the two of them would cooperate in implementing it and offering my services to assist them. So, we met outside Paris with the two of them, and it was very interesting, in fact, President Obasanjo was very pleased that the meeting had taken place. Indeed, he kept saying: ‘Mr. Secretary-General, you pulled off a minor miracle. The fact that the two of us are in this room today, discussing this issue, which I didn’t think would have been possible and we haven’t tried it, is a mini-miracle’. And that’s how we started. So, it was three months before the judgment. We met at St-Cloud, outside Paris, and began to plan ahead.

Nicolas Michel Now, Mr. Secretary-General, what was the relationship between the judgment and your mediation efforts? Was your objective to get a full ­implementation

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of the judgment or was it to reach some kind of a commonly agreeable solution between the parties?

Kofi Annan It was both, in a way. It was first to ensure that, having gone to the Court, they would commit, that they would accept the outcome of the Court, and that they would implement it faithfully, with my help. And it was also understood by all of us that if they did not implement it faithfully, they may be heading for further tensions and conflict, and that it was important that not only they themselves got committed, but that they encouraged their people to accept it and to prepare them for implementation.

Nicolas Michel When in a situation like this, a party fails to implement a judgment, the other party, according to the Charter, can have recourse to the Security ­Council. Did you at any point in the process envisage recourse to the Security ­Council?

Kofi Annan Not directly, in the sense that I wanted to push them to take responsibility and work with me in implementing the judgment. But, as you notice, it took us about three years or so to get to an agreement, and there were moments when one side sort of referred to the Council or possibly was saying ‘we should go to the Council’, more as a threat – this is the Cameroon side – more as a threat than a reality. So, both were keen to resolve it without recourse to the Council. And I was also pushing them to do it, because it was the best way to do it. If you went to the Council, it became immediately politicized, and national groups who were opposed to this would take advantage of that and in fact complicate an issue which had been solved through the judicial process and what we were talking of was implementation. They would have taken us back to interminable political discussions.

284   Nicolas Michel

Nicolas Michel You mention that your efforts took more than three years. Now, it’s well known that sometimes international mediations take much more than three years, but still three years is a rather long time. Can you explain what the reasons for this length of time were, and also what were the main difficulties that you had to overcome?

Kofi Annan I think the parties each had their own problems. On the Nigerian side, you had a fairly large Nigerian community that had settled in that area and felt that that was their region and they were not going to give it up, and they did not want any politician to sell them out. In terms of resources, there was oil and, in fact, Nigeria had an oil platform in the peninsula, which they eventually had to remove. And so the President of Nigeria, who I was convinced needed to play by the rules, had to carry his people along with him. He couldn’t move too far ahead of them. They would have repudiated his efforts and it could have led to tensions on the ground. So, he had to play for time, he had to convince them, he had to educate them and bring them along. And sometimes he brought some of them to the negotiations here in Geneva, including the Governor of the State, the Senators and particularly some of those who were vehemently opposed to handover. President Biya of Cameroon, on the other hand, also had his problems, but it was slightly easier for him in the sense that even though you had English and French Cameroon and there had been relations between Nigeria and Cameroon, there was always a suspicion that Nigeria, as a big neighbour, always wants to push Cameroon around and that they should not give in on anything that they don’t have to. And of course nobody knew when we started what the judgment was going to be. I think, in a way, the Court’s ruling helped because there was not one side that got everything. Cameroon did better, but Nigeria did not go home empty-handed. Some of the findings were in favor of Nigeria. So, the two had to really work to bring their parties around and of course we also had to break down the mistrust. Because there was a point where Nigeria, for example, would say: ‘We will leave, but maybe you should give us a lease over a very large area for about 50 years, and over time we will pull out’. And, of course, the other side would say: ‘Yes we trust you, but after you, what happens? Who and what comes after you?’ And then, of course, we were looking for a clean solution, which will not create an atmosphere where the crisis lingers and the tensions linger. So there was a period when we will

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make progress, but a complex progress, which if you accept it, will create problems for you down the line. And so, we sent everybody back home to think. And then, next time you come, you try to move the process forward and away from some other formulations that appeared like progress but were going to cause problems down the line.

Nicolas Michel How did you finally solve the remaining issues? I know that your modesty will not allow you to say the role that you personally played, but I witnessed the crucial role that you did play when you were alone with the two leaders at the very final stage. But, could you mention the key elements that contributed to the agreement that you found at Greentree?

Kofi Annan I think the key element was the desire of the leaders to solve it. And I told them that they were going to make history; and also send a message around the continent how issues should be solved; and that we don’t always have to pick up guns and kill each other; and that they have started a process which was so hopeful and so important for the continent; and that it should be a wonderful legacy for both of them to have. Secondly, they would stop the tensions and the killing and improve, in time, relations between the two countries. They speak the same language on the border, they knew each other, and in fact the question was: what happens? Do the Nigerians leave or the Cameroonians on the other side leave? So, you can make arrangements to have them do it. And besides, we’re going to set up a mixed commission, which will be chaired by a neutral person that I would designate, with equal numbers from either side that will help move the process along and help resolve any conflicts. And if it’s beyond them you know I, as SecretaryGeneral, would get involved and I gave them the assurance that I would personally be involved, I was also going to appoint a chair whom I trust and that I would work with.

Nicolas Michel So, the importance again of the implementation of the Greentree Agreement . . .

286   Nicolas Michel

Kofi Annan Yes. And also what was important, you notice at the Greentree Agreement we had witnesses. That was very important for Cameroon, because when you are in conflict with a big neighbour, you know, and you sign an agreement, an agreement that some people on your side are not sure you should sign or are not sure is fair, you want to make sure you have some big boys on your side who can help supervise. So, they were very concerned about this and I assured them that I would get the witnesses they need and that gave them the comfort to say that we have the international community with us on this one.

Nicolas Michel And now we can go over to the Kenya situation. There, the issue was more about the role, the importance of criminal accountability mechanisms. Could you tell us at what point in the process you thought that the criminal accountability dimension would have to be taken into account. Was it from the very beginning, or was it later? Did it come up later in the process?

Kofi Annan It came up in the course of the mediation. Right from the beginning I was determined not to go into Kenya and help rearrange the political chairs, share the power between the political elite and say we have resolved the problem, which we sometimes do as an international community. I felt it was also important that we send a message to the people that their issues also count. After all, they are the ultimate victims of what happened in Kenya. And so, apart from working with the political elite, I stayed very close to civil society, the business community, religious leaders, women’s organizations and youth. I met with them regularly from day one, telling them: ‘This is your country. We are negotiating an agreement that is yours. Don’t rely on the politicians to do it alone. You have to remain engaged.’ And I also engaged the media owners, telling them that they should be constructive and responsible which, by and large, they were. However, as we went forward and I saw the extent of the brutality, where over a thousand people were killed and 350,000 people were displaced; I couldn’t walk away without suggesting we do something about this. But we went about it in a methodical way. We didn’t put it on the table up front that we were going to bring in the ICC to prosecute people. They were

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accusing each other at the mediation table, with one side saying those who orchestrated the violence must pay for it. And I said no, we’ll come to that later, let’s take steps that stop the violence now and help those who have been displaced. So the agenda was very clear: stop the violence, provide assistance to those who had been displaced, then look at the political arrangements and settlement, find a political solution for the conflict and then deal with the long-term issues. But, as part of the process, we set up two committees: one chaired by Johann Kriegler, a South-African judge, to look into what happened at the time of the elections. Why did things go so wrong? Why couldn’t they tabulate the results quickly and effectively for one to know? And his report was quite illuminating. We brought Judge Kriegler in to chair the committee and we had some other foreigners and Kenyans working with him. His conclusion in the end was that no one could tell who won and who lost the elections. He said: ‘Mr. Secretary-General, it was very lucky that you came to the conclusion that you did, that they should come in and form a grand coalition, because after four months of investigation hearings around the country, I cannot tell you who lost and who won, and that the elections were so flawed that it wouldn’t help anyway’. And he then went on to say that there were about a million dead people on the polls. This we’ve cleaned up since then. But, you know, when you hear this you sort of have a feeling you owe it to the victims to try and do something about it. The other committee was the Waki Commission, which had a member from New Zealand and the Democratic Republic of Congo, for them to look into the atrocities and what happened. Their report was quite revealing. They came up with a list of crimes committed and a list of people who may have participated in these crimes. I met them two weeks before their report came out and I asked Judge Waki: ‘How is the report coming?’ He briefed me. But what also helped was that we encouraged the Kenyan Parliament to review these reports and they endorsed it. They endorsed both reports. In a country where you normally don’t see reports of any commissions – commissions were used to bury issues you don’t want to do anything about – suddenly, these two explosive reports were in the public domain, with Kofi Annan talking about it and pressing the leaders to do something about it. And that is how we managed to get the judicial aspect of the conflict brought to the fore.

Nicolas Michel Did the idea of an amnesty for the authors of the crimes committed during the post-electoral violence ever surface in your discussions as an incentive for leaders to talk and to find an agreement?

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Kofi Annan At the negotiations themselves, we didn’t dwell on amnesty and I did not encourage discussions on amnesty. But, in discussions with politicians at the highest level the idea was put forward that the way we normally resolve these issues in Kenya is to let time deal with it, to forget, to forgive and to move on. I said: ‘But, if you forget and you forgive, impunity can never end. In fact, you are feeding impunity, and if we don’t tackle this one, 2012 may be much worse’. And in fact, Kriegler, at the public presentation of his report, said: ‘If you don’t do what Mr. Annan is suggesting about some of these issues, 2012 will be much worse, and what happened this time, will be like a Christmas party,’ he told them bluntly. But I think what is important is that the Kenyan public civil society was so keen for justice and the pressure from the groups that I had been working with – not just from the human rights groups – but from all the groups, saying that these people must be punished. Because the events scared everybody in Kenya, not only those who were killed or lost relatives, but suddenly, your neighbour in Nairobi was not talking to you because you are from a different tribe. Somebody you have known for 15–20 years stops talking to you from one moment to the other, and they were getting SMS messages: ‘We know where you are, where your children go to school’. So it’s something that permeated society and they all wanted justice. And the attitude of the public is: ‘take all the rascals to The Hague, and keep them there’. And they also had the feeling that, if you did a purely local process, you would not get justice, because the big boys always have a way of getting away scot-free, and they didn’t want this to happen. So there was a mass movement for justice and people claiming justice for the victims, which made it difficult for the politicians to run away from it.

Nicolas Michel As you said, one of the features in that situation is that Kenya is a party to the Rome Statute of the International Criminal Court. Could you help us understand what role this fact played? Did this incite the parties to consider that criminal accountability would be unavoidable? Did it also play a role in your discussion on the creation of a national criminal accountability ­mechanism?

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Kofi Annan I think that it played a role in editorial pages and in comments on the radio and in newspapers that ‘we have an obligation – we are party to the Rome Statute and we must honour obligations’. So, this gave the civil rights movement and others a very strong platform to push for respect for the Statute. Apart from that, there was also a feeling that these crimes are committed time and time again, and each time there are elections there is violence, and this was the worst ever, and that if something is not done, they would be going down a very dangerous and slippery slope. And I think the other thing about their membership of the Rome Statute, which they were very proud of, is that the new constitution that was passed on the 4th of August by twothirds of the voters, and promulgated on the 27th of August, in effect has domesticated the Rome Statute. So they even have a stronger obligation now to honour those commitments. Recently, the Minister of Justice has been talking, over and beyond what The Hague does, of trying to set up a local tribunal to try the others. There have been some games; not everybody is for the court, there are those who are opposed to it, who feel they may be trapped or they may be targeted. And so they are trying to resist involvement of the court. And then, of course, you have those who see the indictment of certain individuals as removing the competition for them. And then, of course you have the general public, and the victims, who want justice. So it’s an interesting but a healthy situation. It’s going to be difficult for the court, because of the environment and the feeling that some of the witnesses may be intimidated or frightened, so they’ve been pushing for a strong witness protection system, and I understand some have already been taken out of the country.

Nicolas Michel Thank you. This indicates that judicial means, when used in an appropriate way, can make a decisive contribution to the overall solution of a dispute.

Kofi Annan I agree with you. And, this is where the question of timing, used properly by the prosecutor, can be of great help. I think that it’s extremely important that this debate of justice and peace, which sometimes becomes so acrimonious, it’s a false debate in the sense that you need both. You need to stop the killing, and I think you need to stop the killing first, but if you do not have

290   Nicolas Michel justice and people do not feel that their grievances have been dealt with, it’s extremely difficult to get serious reconciliation. So in fact justice reinforces peace, and the long-term peace that one is looking for. The idea that it is either/or, I think, is a false debate.

Nicolas Michel Thank you very much, Mr. Secretary-General. I am sure that all the participants will appreciate your very kind contribution to the symposium today.

Chapter Fourteen Observations on the Relationship between Diplomatic and Judicial Means of Dispute Settlement Lucy Reed*

I.  Introduction The title of this symposium is thought-provoking: “Diplomatic and Judicial Means of Dispute Settlement: Can They Get Along?” As with all complex questions, we must consider first ancillary questions. Here are some. First, what is meant by the word “diplomatic”? In addition to traditional foreign ministry-focused diplomacy, does this word also include “soft” tools of international dispute settlement, such as negotiation, mediation, inquiry and conciliation, which are listed in Article 33 of the Charter of the United Nations? These tools may be considered diplomatic in nature because the parties (ostensibly) retain control of the dispute and may accept or reject a proposed settlement. Of course, how much choice and control parties actually have depends on the Realpolitik of diplomacy. Second, where and between whom does diplomatic settlement of disputes take place? Answers could include the office of the Secretary General of the United Nations, the General Assembly, the Security Council, international and regional organizations, as well as the formal and informal talks that take place among diplomats and politicians. As an aside, what impact does diplomatic training have on judicial decision-makers? A significant number of the judges sitting on the International Court of Justice (‘ICJ’) have played roles in their respective Ministries of Foreign Affairs. Does their diplomatic training drive them towards consensus? *  The author thanks Viren Mascarenhas and Sam Prevatt, both associates in the International Arbitration Group of Freshfields Bruckhaus Deringer US LLP, for their invaluable assistance in researching and preparing these remarks. The views expressed herein are strictly the author’s own.

292   Lucy Reed Third, what is meant by “judicial means”? Are we discussing (a) decisions, (b) rendered on the basis of international law, (c) by independent third parties, (d) that are binding on the parties? Certainly, as the conference explored thoroughly, we must consider not just the impact of any final decisions rendered – are they followed by the parties? – but also the impact of all stages of the judicial process on the behaviour of actors under international law. For example, what effect does the issuance of an arrest warrant by a criminal tribunal have on the behaviour of the accused, other potential accused, and other players in international criminal law? In some circumstances, the judicial process can have a deterrent effect on future behaviour. Sometimes, however, the judicial process is retrospective. For example, consider the creation of claims commissions that are established to settle pre-existing ­disputes. Some other questions to consider: What do we mean by the quotation “can they get along?” Best friends? Sworn enemies? Would we settle for indifference? Healthy sibling rivalry? Also, would the answer to the question differ depending on when it is posed? How would this question have been answered 100 years earlier, in 1910, 12 years before the Permanent Court of International Justice held its inaugural sitting and long before the present wealth of international courts and tribunals? The answer is not necessarily obvious. After all, there were considerably more ad hoc inter-State arbitrations between 1900 and 1945 than between 1945 and 1990.1

II.  Observations With these questions in mind, I offer the following three observations. A.  Observation #1: It Does Not Follow from the Growth of International Courts and Tribunals that Judicial Means will Replace Diplomatic Means of Dispute Settlement International law and the resolution of disputes arising under international law, either through diplomatic or judicial means, are two distinct things. Law without adjudication was long the norm in international affairs. Still, even without adjudicatory mechanisms, the content of law mattered for at least two reasons. First, where law exists, it is usually followed (except, of course, in locales where the rule of law does not exist). Second, even though international disputes were traditionally resolved without adjudication, law plays a significant part in defining the points in issue and providing a framework 1

 See Christine Gray and Benedict Kingsbury, “Developments in Dispute Settlement: InterState Arbitration Since 1945”, (1992) BYIL 99–134.

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in political fora. Nevertheless, international law largely stood alone, unsupported by any judicial arrangements, except for ad hoc arbitrations. The situation is vastly different today. The widening and deepening of the subject matter and content of international law in recent decades has been accompanied by a plethora of international courts and tribunals. Without venturing into the issue of the potential fragmentation of international law as a result of “the burgeoning” of international courts and tribunals,2 I will focus on the relationship between international courts and tribunals and the diplomatic resolution of disputes. Despite the increasing availability of courts and tribunals, diplomacy is not likely to lose its predominant role in international dispute settlement for several reasons. First, a State always has discretion whether or not to institute proceedings against another State. It could be well within the first State’s larger interests – political, economic and diplomatic interests extending beyond a particular legal dispute – not to institute formal proceedings. Also, international legal proceedings are time-consuming and expensive, far beyond the means of many if not most States. Second, diplomatic negotiations are often a mandatory step before a State can turn to binding dispute settlement through the compromissory clause in a bilateral or multilateral treaty. Under these circumstances, attempts to resolve a dispute diplomatically must precede judicial settlement of the dispute. For example, in the Case Concerning Armed Activities on the Territory of the Congo between the Democratic Republic of the Congo (the ‘DRC’) and Rwanda, the DRC tried to base the jurisdiction of the ICJ to hear the dispute, in part, on the compromissory clause of the Convention Against the Discrimination of Women (‘CEDAW’). That clause (Article 29, paragraph 1) gives the ICJ jurisdiction in respect of any dispute between States concerning CEDAW’s interpretation and application, on condition that: (a) it has not been possible to settle the dispute by negotiation; (b) following the failure of negotiations, the dispute has, at the request of one such State, been submitted to arbitration; and (c) if the parties have been unable to agree on the organization of the arbitration, a period of six months has elapsed from the date of the request for arbitration.3 The Court found, inter alia, that any dispute raised by the DRC arising under CEDAW had not been the subject of negotiations, noting: “The evidence has not satisfied the Court that the DRC in fact sought to commence negotiations in respect of the interpretation or  See Rosalyn Higgins, “A Just World Under Law”, 100 (2006) Am. Soc’y Int’l L. Proc. 388, at 390. 3  Case Concerning Armed Activities on the Territory of the Congo (New Application: 2002) (Democratic Republic of the Congo v. Rwanda), Jurisdiction and Admissibility, Judgment, [2006] I.C.J. Reports 6 (“Congo v. Rwanda”), at § 87. 2

294   Lucy Reed application of the Convention.”4 Finding that the prerequisite conditions to its jurisdiction in the compromissory clause had not been fulfilled, the Court concluded that it did not have jurisdiction under CEDAW. Under such circumstances, the question is not whether diplomatic and judicial means of dispute settlement can get along – but rather whether the former has (mandatorily) preceded the latter. The ICJ recently reaffirmed this principle in its decision on the Preliminary Objections in the Case Concerning Application of the International Convention on the Elimination of All Forms of Racial Discrimination.5 The issue before the Court was whether Georgia had satisfied the conditions in Article 22 of the International Convention on the Elimination of All Forms of Racial Discrimination (‘CERD’) of negotiating and fulfilling certain procedural requirements prior to instituting judicial proceedings. The Court explained that the negotiation requirement in compromissory clauses fulfils three distinct functions. First, it gives notice to a respondent State that a dispute exists, and sets forth the scope and content of the dispute.6 Second, it encourages disputing States to attempt to settle their dispute by mutual agreement, “avoiding recourse to binding third-party adjudication.”7 Third, prior resort to negotiations indicates the outer limit of consent as to what the disputing States consider should be resolved through third-party adjudication.8 After evaluating the evidence put forward as to whether or not negotiations for the purposes of Article 22 took place, the Court concluded, “[i]n sum, the Court is unable to consider these statements – whether in the Georgian presidential press briefing or at the Security Council meeting – as genuine attempts by Georgia to negotiate matters falling under CERD.”9 Accordingly, the Court upheld Russia’s preliminary objection that it could not hear the case. The Court thus reaffirmed the principle that States may mandatorily need to resort to diplomatic negotiations before being able to institute judicial proceedings to resolve their disputes depending on the preconditions of the compromissory clause. Furthermore, States should make sure that they frame their negotiations in a manner that falls within the scope of applicable legal instruments upon which they will later rely in judicial dispute-settlement.  Ibid., § 91.  Case Concerning Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v. Russian Federation), Preliminary Objections, Judgment, April 1, 2011, at §§ 115–84. Available at http://www.icj-cij.org/docket/files/140/16398.pdf (last accessed 21 December 2011). 6  Ibid., at § 131. 7  Id. 8  Id. 9  Ibid., at § 181. 4 5

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Third, that international courts and tribunals exist does not necessarily mean States can access them. The international judicial settlement of disputes, which started in the form of inter-State arbitration, developed on the basis of consensual jurisdiction, as opposed to compulsory jurisdiction. Membership in the United Nations never required that Member States accept the compulsory jurisdiction of the ICJ. Rather, the jurisdiction of the Court in contentious proceedings is based on the consent of the States, which may be (a) expressed in a special agreement, (b) provided in treaties and conventions, or (c) recognized by a State as compulsory, in relation to any other State accepting the same obligation. As ICJ President Owada noted in his address to the Sixth Committee of the General Assembly in 2009, only 66 States out of 192 have ever made optional clause declarations accepting as compulsory the jurisdiction of the Court.10 Absent an effective basis for jurisdiction before the ICJ or another court or tribunal, a State desiring to litigate is left with only diplomatic means of dispute settlement. Under such circumstances, the question is not whether diplomatic and judicial means of dispute settlement can get along – because only one option exists. It is true that access to the ICJ might exist through the compromissory clause in a bilateral or multilateral treaty. In his 2009 address to the Sixth Committee, Judge Owada observed a new trend in the international community of attempting to reinforce the rule of law in treaty relations by creating the compulsory jurisdiction of the Court through compromissory clauses in bilateral or multilateral treaties. He referred to over 300 bilateral or multilateral treaties providing for compulsory recourse to the ICJ for disputes concerning the application and interpretation of the treaty in question. The result has been an increase in the proportion of pending cases brought to the ICJ under a compromissory clause from 15 percent in the 1980s, to 40 percent by 2000, to more than 50 percent in the first decade of the twentyfirst century.11 Even here, though, a potential litigant State might find roadblocks. Again, consider the Congo v. Rwanda case, where the DRC also tried to base the Court’s jurisdiction on Article IX of the Genocide Convention, which designates the ICJ as the court responsible to hear disputes relating to the Convention’s interpretation, application or fulfilment. On the basis of its reservation to Article IX, Rwanda argued that the Court did not have jurisdiction. The Court agreed.12 Although the Court affirmed that the prohibition of genocide  Speech by H. E. Judge Hisashi Owada, President of the International Court of Justice, to the Sixth Committee of the General Assembly, 30 October 2009, at 5, available at http:// www.icj-cij.org/presscom/files/4/15744.pdf?PHPSESSID=377173d5a268f3fc60e4f4b9b71d4 6ef (last accessed 21 December 2011). 11  Ibid. 12  Congo v. Rwanda, at § 70. 10

296   Lucy Reed is a jus cogens norm,13 it explained that the erga omnes or jus cogens nature of a norm of general international law does not in and of itself establish the Court’s jurisdiction, which must be based on the consent of the parties. The Court stated: the fact that a dispute relates to compliance with a norm having such a [ jus cogens] character, which is assuredly the case with regard to the prohibition of genocide, cannot of itself provide a basis for the jurisdiction of the Court to entertain that dispute. Under the Court’s Statute that jurisdiction is always based on the consent of the parties.14

Under this conceptual framework, an issue – here, the alleged commission of genocide on the territory of a State – may be both a political topic and a legal issue involving a peremptory norm of international law. However, depending on threshold jurisdictional questions, such as whether the concerned States are parties to the Genocide Convention with or without reservations to the compromissory clause, a dispute may or may not be subject to ICJ resolution. (The Court, of course, found in the Bosnia Genocide Case15 that it did have jurisdiction to hear the dispute arising under the Genocide Convention.) Absent ICJ jurisdiction or jurisdiction before another international tribunal, the only option that remains is diplomacy. In sum, the growth of courts and tribunals, whether of general or limited jurisdiction, does not necessarily mean that more dispute settlement will take place through judicial means. At the same time, however, the existence of effective international courts and tribunals may improve diplomatic negotiations as a means of dispute settlement. No party wishes to relinquish control over dispute resolution to a third party for adjudication unless no other option is available. Perhaps counter-intuitively, the existence of effective courts and tribunals might well mean that States use diplomacy with renewed vigour and patience. The spectre of judicial settlement may discipline disputing parties. On this last point, I will discuss one aspect of the Eritrea – Ethiopia Claims Commission, on which I served as a commissioner. In December 2000, Eritrea and Ethiopia agreed permanently to terminate the armed conflict that started in 1998, and to create a commission with jurisdiction over all claims for loss, damage or injury by one Government against the other, and by nationals of one party against the Government of the other party, relating to the armed conflict and resulting from violations of international  Ibid., at § 64.  Ibid. 15  Case Concerning Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Yugoslavia), Preliminary Objections, Judgment [1996] I.C.J. Reports 595, at § 47. 13 14

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humanitarian law, including the 1949 Geneva Conventions, or other violations of international law. The Commission followed a rigorous judicial procedure, adjudicating liability and damages in separate stages. Here, the diplomatic agreements created a judicial dispute resolution mechanism. Interestingly, the prospect of third-party adjudication apparently prompted the parties voluntarily to alter their behaviour. For example, Ethiopia had interned approximately 2,600 Eritrean prisoners of war (POWs) during the conflict. Eritrea filed its claims on 12 December 2001 for loss, damage and injury suffered as a result of Ethiopia’s alleged unlawful treatment of its POWs, seeking immediate release of all of the remaining POWs. On 29 November 2002, just a few days before the hearing was scheduled to take place at the Peace Palace in The Hague, Ethiopia released the remaining POWs. Presumably, Ethiopia took the view that it could present its case on the treatment of POWs more favourably at the hearing if it ensured the release of all POWs first. Ethiopia’s actions rendered moot Eritrea’s request that all remaining POWs be released. But the proceedings fundamentally mattered – they apparently prompted the release of the POWs. B.  Observation #2: The Role of Diplomatic and Judicial Means of Dispute Settlement May Depend on the Nature of the Dispute Whether judicial means of dispute settlement are available to a State might depend on the specific causes of action. The ICJ found in Congo v. Rwanda (by majority) that reservations to the compromissory clause of a treaty are valid if they do not violate the object and purpose of the treaty.16 Several judges of the ICJ explained, in a separate opinion, that human rights courts, such as the European Court of Human Rights and the Inter-American Court of Human Rights, and treaty-monitoring bodies, such as the Human Rights Committee, established to provide guidance on the International Covenant on Civil and Political Rights (the “ICCPR”), have found that States cannot make reservations to the jurisdictional clauses of multilateral human rights treaties, such as the European Convention on Human Rights, the American Convention on Human Rights, and the ICCPR.17 These judges explored the nuances of the validity of reservations to human rights instruments. They explained:

 Congo v. Rwanda, at § 67.   See Case Concerning Armed Activities on the Territory of the Congo (New Application: 2002) (Democratic Republic of the Congo v. Rwanda), Jurisdiction and Admissibility, Judgment [2006] I.C.J. Reports, Joint Separate Opinion of Judges Higgins, Kooijmans, Elaraby, Owada and Simma, 65, at 69.

16 17

298   Lucy Reed We believe it is now clear that it had not been intended to suggest that the fact that a reservation relates to jurisdiction rather than substance necessarily results in its compatibility with the object and purpose of a convention. Much will depend upon the particular convention concerned and the particular ­reservation. In some treaties not all reservations to specific substantive clauses will necessarily be contrary to the object and purpose of the treaty. Some such reservations to particular substantive clauses in, for example, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights, may be of this character. Conversely, a reservation to a specific ‘procedural’ provision in a certain convention, could be contrary to the treaty’s object and purpose. For example, the treaty bodies set up under certain United Nations conventions may well be central to the whole efficacy of those instruments.18

Judicial access to courts may be part and parcel of the object and purpose of human rights instruments. What does this example illustrate? Does the international community recognize that access to human rights bodies tasked with monitoring human rights instruments cannot be denied by member States? Should diplomacy and judicial settlement play different roles depending on the subject matter of the dispute? Do we accept – expect – that diplomacy may play a bigger role in inter-State disputes than in disputes affecting the fundamental human rights of an individual? In situations concerning human rights and, perhaps civil and political rights and social and economic rights, are we more hesitant to eliminate judicial means of dispute settlement? C.  Observation #3: The Increasing Role of Non-State Actors in International Law May Mean More Recourse to Judicial Dispute Resolution Than Diplomatic Resolution The increasing recognition of the rights and responsibilities of non-State actors in international law includes avenues for non-State actors to enforce their rights under international law directly through judicial means. In the field of investment arbitration, the role of diplomatic protection by States of the rights of aggrieved investors has been replaced, to a significant extent, by a system of bilateral and multilateral agreements for the protection of foreign investments, which typically permit the investor to pursue an action directly against the host State of the investment, through arbitration under the ICSID Convention or the UNCITRAL Rules. The ICJ took note of this phenomenon in the Case Concerning Ahmadou Sadio Diallo, where the court observed: in contemporary international law, the protection of the rights of companies and the rights of their shareholders, and the settlement of the associated  Ibid., at § 21.

18

Observations on the Relationship between Diplomatic and Judicial Means   299 disputes, are essentially governed by bilateral or multilateral agreements for the protection of foreign investments, such as the treaties for the promotion and protection of foreign investments [. . .] and also by contracts between States and foreign investors. In that context, the role of diplomatic protection ­somewhat faded, as in practice recourse is only made to it in rare cases where treaty regimes do not exist or have proved inoperative.19

This system generally may be far more appealing to foreign investors than traditional diplomatic espousal of their claims. The law of diplomatic protection entitles a State to exercise diplomatic protection on behalf of its affected citizen, but the State is not under any obligation to do so. Whether action is taken is, as a matter of international law, entirely a discretionary matter for the State.20 By contrast, under the present system, the foreign investor controls the decision of whether or not to institute proceedings against the host State. If it does, its home State is then prohibited, under Article 27 of the ICSID Convention, for example, from providing diplomatic protection under customary international law. What does this mean for diplomatic settlement of investment disputes? Certainly, the conceptual framework has changed. Diplomatic protection evolved at a time when only States were the subjects of international law. Accordingly, the legal fiction developed that an injury to a person amounted to an injury to that person’s State, thereby allowing the State, at its discretion, to bring an action to protect its national. Now, however, the right to redress is conferred directly upon the investor. Is there less room for diplomacy in international law when rights belong to investors? While the increasing number of investor-State disputes might suggest yes, the answer is not so straightforward. First, there are many relationships that are not covered by treaties. There simply may not be an applicable bilateral investment treaty (‘BIT’) between two States. Furthermore, some States, such as Ecuador, are actively terminating their existing BITs.21 Second, the injury or the investor may not qualify for protection under a treaty. Without exploring the scope of terms such as ‘investor’ or ‘investment’ under these treaties, the point is that treaties include jurisdictional  Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Preliminary Objections, I.C.J. 24 May 2007, General List No. 103 (“Diallo – Preliminary Objections”), at § 88. Available at http://www.icj-cij.org/docket/files/103/13856.pdf (last accessed 21 December 2011). 20  Case Concerning the Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), Second Phase, Judgment, [1970] I.C.J. Reports 3, at § 79. 21  United Nations Conference on Trade and Development, “Denunciation of the ICSID Convention and BITs: Impact on Investor-State Claims,” IIA Issues Note, no. 2, December 2010, at 1. Available at http://www.unctad.org/en/docs/webdiaeia20106_en.pdf (last accessed 21 December 2011). 19

300   Lucy Reed limitations – personal, subject matter and temporal – that may leave an aggrieved investor with no option other than diplomatic protection. Third, where an entire class of investors is damaged by a broad measure adopted by a host State, the most efficient hope for redress may be for the national State to take diplomatic protection action on behalf of the class. Having said this, a majority of an ICSID tribunal recently held in Abaclat and Others v. Argentine Republic that the tribunal had the power under Article 44 of the ICSID Convention and Rule 19 of the ICSID Arbitration Rules to adopt procedures to handle the mass claims of approximately 60,000 claimants purporting to have ownership interests in Argentine sovereign bonds in one ICSID proceeding.22 Nevertheless, the Abaclat tribunal observed some limits on whether it should hear these mass claims. In particular, the claims would have to be identical or at least sufficiently homogenous to be admitted in one proceeding and not to prejudice the rights of the respondent State.23 In situations where the claimants and/or their claims are heterogeneous, such consolidation in a single, binding proceeding may not be possible. We may see that an individual will have some claims that he or she may be able to bring directly (if these are human rights claims, for example) or in his or her capacity as an investor (if these are investment-related claims that arise under a bilateral investment treaty, for example). Alternatively, the State may be able to bring some claims on his or her behalf under the law of diplomatic protection. Consider the Ahmadou Sadio Diallo case before the ICJ: At the Preliminary Objections phase, the Court found that it had jurisdiction to hear those claims relating to Mr. Diallo’s rights as an individual on the territory of the DRC, explaining that diplomatic protection, although “originally limited to alleged violations of the minimum standard of treatment of aliens, has subsequently widened to include, inter alia, internationally guaranteed human rights.”24 Second, the Court found that Guinea had standing to assert claims involving a person of its nationality regarding allegedly unlawful acts committed by the DRC that infringed his direct rights as associé of two locally-incorporated companies, Africom-Zaire and AfricontainersZaire.25 However, the Court found that Guinea could not exercise diplomatic protection with respect to the rights of the two companies “by substitution” of Mr. Diallo.26 The Court explained that protection “by substitution”  Abaclat and Others (Case formerly known as Giovanna a Beccara and Others) v. Argentine Republic, Decision on Jurisdiction and Admissibility, (ICSID Case No. ARB/07/54), August 2011, at § 295. Available at http://italaw.com/documents/AbaclatDecisiononJurisdiction .pdf (last accessed 3 January 2012). 23  Ibid., at §§ 540–44. 24  Diallo – Preliminary Objections, at § 39. 25  See ibid., at § 65. 26  See ibid., at §§ 76–95. 22

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is essentially a “very last resort” available to “foreign shareholders of a company who could not rely on the benefit of an international treaty and to whom no other remedy is available.”27 However, the protection is limited – it can only apply where a company’s incorporation in the State committing the alleged violation “was required by it as a precondition for doing business there”, and since this fact had not been established by Guinea, the State did not have standing to assert claims on behalf of the companies.28 Thus, not all claims were available under the international law of diplomatic protection. Similarly, not all claims might be available under any existing bilateral or multilateral treaties depending on their jurisdictional scope. There may be gaps or lacunae regarding the claims that could conceptually be brought under international law as well as in the availability of a forum to adjudicate them.

III.  Thoughts on the Relationship between Diplomatic and Judicial Means of ‘Live’ Disputes When a dispute arises under international law, the concerned parties will use whatever tools are at their disposal to resolve the dispute peacefully and to their advantage. The parties might not explicitly choose or reject either judicial or diplomatic means in favour of the other. Indeed, parties might turn to both simultaneously, if possible, in ‘live’ disputes. As the dispute unfolds, one method might take precedence over the other. Here are some examples. A.  Scenario 1: Diplomatic/Political Developments Render the Judicial Process Moot Here is a not uncommon scenario: Parties prove unable to resolve a dispute diplomatically, and so one party institutes proceedings against another before a judicial forum, such as the ICJ. Time can play a role and, subsequently, while the proceedings are underway, the parties successfully negotiate a solution diplomatically, or one party voluntarily alters its own behaviour. The legal dispute becomes moot, and the judicial proceedings become ­unnecessary. To illustrate this scenario, let us consider the Nuclear Tests case between Australia and France before the ICJ.29 On 9 May 1973, Australia instituted proceedings against France regarding the latter’s atmospheric nuclear weapons tests over the Pacific Ocean. Australia and France had exchanged  Ibid., at § 88.   Ibid., at §§ 91, 93. 29  Nuclear Tests (Australia v. France), Judgment, [1974] I.C.J. Reports 253. 27

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302   Lucy Reed diplomatic correspondence on this subject, but Australia had been unable to convince France to terminate the tests.30 The Court scrutinized statements made by the French Government, including the President of France, that the 1974 atmospheric tests would be the last in the series of testing. Some of these statements were made while ICJ proceedings were underway, including a statement made by the French Minister of Defence on 11 October 1974. The Court concluded that, through these statements, France undertook a legal obligation to the international community that it would not continue tests after 1974.31 Accordingly, the Court found that Australia’s objective in filing the case – the termination of the tests – had been satisfied, leaving the proceedings without any remaining purpose: The Court having found that the Respondent has assumed an obligation as to conduct, concerning the effective cessation of nuclear tests, no further judicial action is required. The Applicant has repeatedly sought from the Respondent an assurance that the tests would cease, and the Respondent has, on its own initiative, made a series of statements to the effect that they will cease. Thus the Court concludes that, the dispute having disappeared, the claim advanced by Australia no longer has any object. It follows that any further finding would have no raison d’être.32

The Court’s finding that France’s statements had legal effect bears emphasis. If these statements were simply political in nature, and did not engage the international legal responsibility of France, then they could not have been dispositive of the case. B.  Scenario 2: The Parties Resolve Their Dispute Amicably and Voluntarily End the Judicial Proceedings In a different scenario, the parties reach a diplomatic agreement after initiating legal proceedings, and the applicant chooses to discontinue those proceedings. This situation is different from the Nuclear Tests case, where the Court – not Australia – found it unnecessary to continue and render a decision. Let us take a recent example: Honduras’ initiation of ICJ proceedings against Brazil in October 2009, against the backdrop of the constitutional crisis in Honduras. Former President José Manuel Zelaya Rosales advocated the Constitutional Assembly to write or reform the constitution with a fourth ballot box referendum. He called for a preliminary poll to be held on 28 June 2009, to gauge popular support for including the Constitutional Assembly  Ibid., at §§ 26–28.  Ibid., at § 51. 32  Ibid., at § 56. 30 31

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question in the November 2009 election. On 28 June, soldiers stormed the presidential palace, arrested President Zelaya, and put him on a plane to Costa Rica. A new government took over. President Zelaya returned covertly to Tegucigalpa on 21 September, taking refuge in the Brazilian Embassy. It was against this backdrop that the interim government of Honduras instituted the ICJ proceedings against Brazil. The thrust of the complaint was that Brazil unlawfully interfered with the domestic affairs of Honduras by harbouring the former President in its Embassy. Honduras based its legal causes of action on Article 2(7) of the United Nations Charter, the Vienna Convention on Diplomatic Relations and the American Convention on Diplomatic Asylum. Was the interim government legally capable of instituting these proceedings? This would not be the first time the ICJ faced such a question. However, in this instance, the Court was not required to decide the pending legal questions as Honduras discontinued the proceedings.33 In Honduras’ view, presumably, there was no reason to proceed with the case. By 27 January 2010, the political crisis had drawn to a close: the newly elected President Porfirio Lobo came to power, and a deal was struck allowing former President Zelaya to leave the Brazilian embassy to go into exile in the Dominican Republic. Although Honduras could still have sought declaratory relief from the ICJ – as it specified in its Application – that Brazil had violated Article 2(7) of the United Nations Charter, Honduras, in the final calculus, decided that it was no longer worth pursuing the case. What lessons can we take away from this example? First, a State might turn to litigation in the midst of tense political events with another State. The purpose might be to pressure the other State to change its behaviour regarding the dispute, or genuinely to petition the judicial institution to provide the legal framework to structure the parties’ future behaviour regarding the dispute. Second, States may nonetheless work to resolve these disputes diplomatically through regional and international processes while judicial proceedings are underway. Third, if and when the dispute has been resolved diplomatically, the applicant State might find either that the dispute is moot, or the resolution of the legal aspect of the dispute may be unnecessary.

 See Certain Questions Concerning Diplomatic Relations (Honduras v. Brazil), Order, 12 May 2010, General List No. 147, at 2. Available at http://www.icj-cij.org/docket/files/147/15939. pdf (last accessed 21 December 2011), (“Whereas the Court decided that, given the circumstances, no other action would be taken in the case until further notice. . . .”).

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304   Lucy Reed C.  The Role of Provisional Measures or Interim Relief in Facilitating Resolution of Disputes When political tensions erupt, such as the events in Honduras in 2009, States often react quickly. A recent trend on the part of States is to act not just diplomatically but also to accelerate the judicial process. States increasingly use the tool of interim relief or provisional measures – available, for example, under Article 41 of the ICJ Statute – to focus judicial, and public, attention on their pending dispute. Under Article 41(2), the Court is to give notice to the Security Council of any provisional measures ordered. The Court has increasingly been asked in the last decade to indicate provisional measures. In some instances the Security Council was simultaneously dealing with the same set of issues. We find a recent example in the ICJ’s Order of 15 October 2008, regarding Georgia’s request for provisional measures in the case concerning Application of the International Convention on the Elimination of All Forms of Racial Discrimination, brought against the Russian Federation. After noting the exceptional and complex situation on the ground in South Ossetia, Abkhazia and adjacent areas rendering ethnic Georgian, ethnic Ossetian and Abkhazian populations vulnerable,34 the Court concluded that the urgency warranted provisional measures and ordered the parties to (a) refrain from any act of racial discrimination within South Ossetia and Abkhazia and adjacent areas of Georgia, (b) facilitate the access of humanitarian assistance to local populations, (c) refrain from any action that would aggravate the dispute or make it more difficult to resolve, and (d) inform the Court as to compliance with the provisional measures. The Court reaffirmed that its provisional measures orders have binding effect on the parties, creating international legal obligations for both parties.35 What is the significance of this decision to our topic? The Court gives priority to provisional measures applications. Under Article 74 of the Rules of the Court, “[a] request for the indication of provisional measures shall have priority over all other cases”, and the Court, if not sitting when the request is made, will convene as a matter of urgency. Hence, a request for provisional measures allows a State – strategically – to get a dispute before the eyes of the Court more quickly than through the routine institution of proceedings. Second, the State, if successful, secures a legal framework – the dispositif of the Order – that could favourably influence the actions taken by the opposing State. Third, pursuant to Article 41(2) of the Statute, the Court will inform  Application of the International Convention on the Elimination of all Forms of Racial Discrimination (Georgia v. Russian Federation), Provisional Measures, Order of 15 October 2008, [2008] I.C.J. Reports 353, at § 143. 35  Ibid., at § 147. 34

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the Security Council of the provisional measures indicated, alerting it to the legal framework envisioned, to be added to other considerations before the permanent members of the Security Council. In sum, the strategic use of provisional measures brings matters to the forefront of judicial scrutiny, and the ICJ may set out a legal framework that could influence political – diplomatic efforts.

IV.  Concluding Observations The relationship between diplomatic and judicial means of dispute settlement is complex. In some cases, only one option may be available. For example, the relationship between the disputing parties may be so fractured that diplomacy will have no sway. Alternatively, one party may not have access to an international court or tribunal; in these instances, diplomatic negotiations will remain key. If both diplomacy and judicial means of dispute settlement are available, then parties may make use of both tools strategically: one route does not necessarily come at the expense of the other. Thus, to conclude, it may not matter whether diplomatic and adjudication can get along. Like family, they might be inevitably joined together, for better or worse.

Chapter Fifteen Non-Disputing State Submissions in Investment Arbitration: Resurgence of Diplomatic Protection? Gabrielle Kaufmann-Kohler

I.  Laying the Ground: Diplomatic Protection and Investment Arbitration It is commonplace to state that in the field of the treatment of aliens, investment arbitration has replaced the traditional mechanism of diplomatic ­protection.1 The establishment of a dispute settlement method allowing for  See generally Ben Juratowitch, “The Relationship between Diplomatic Protection and Investment Treaties”, 23(1) ICSID Review – Foreign Investment Law Journal 10 (2008); Christoph Schreuer, “Investment Protection and International Relations”, in August Reinisch and Ursula Kriebaum eds., The Law of International Relations – Liber Amicorum Hanspeter Neuhold (Eleven International Publishing: The Hague, 2007), 345–358. In its Decision on Preliminary Objections in the Diallo case, the International Court of Justice (ICJ) noted that “in contemporary international law, the protection of the rights of companies and the rights of their shareholders, and the settlement of associated disputes, are essentially governed by bilateral or multilateral agreements for the protection of foreign investments, such as treaties for the promotion and protection of foreign investments [. . .] and also by contracts between States and foreign investors. In that context, the role of diplomatic protection has somewhat faded, as in practice recourse is only made to it in rare cases where treaty regimes do not exist or have proved inoperative”. Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Preliminary Objections, I.C.J., 24 May 2007, General List No. 103, at § 88. For a recent definition of diplomatic protection, see Art. 1 of the International Law Commission (ILC) Draft Articles on Diplomatic Protection of 2006, which reads: “[. . .] diplomatic protection consists of the invocation by a State, through diplomatic action or other means of peaceful settlement, of the responsibility of another State for an injury caused by an internationally wrongful act of that State to a natural or legal person that is a national of the former State with a view to the implementation of such responsibility.” See also Art. 17 of the Draft Articles on Diplomatic Protection (2006), which stipulates that “[t]he present draft articles do not apply to the extent that they are inconsistent with special rules of international law, such as treaty provisions for the protection of investments”.

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308   Gabrielle Kaufmann-Kohler the investor’s direct recourse to an independent international forum, without the need for the home State to espouse the claim of its national against the host State, is usually commended for depoliticising the dispute and bringing it within the realm of law rather than of politics and diplomacy.2 The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (‘ICSID Convention’) contains the following provision addressing the issue of diplomatic protection: No Contracting State shall give diplomatic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to arbitration under this Convention [. . .].3

Hence, within the ICSID framework, the rule is that there can be no duplication of an international claim brought through investor-State arbitration by the espousal of the same claim by the home State through diplomatic ­protection.4 The relationship between investor-State arbitration and diplomatic protection is also addressed in a number of bilateral investment treaties  The travaux préparatoires of the ICSID Convention, for example, explain the exclusion of diplomatic protection in terms of the removal of the dispute from the realm of politics and diplomacy into the realm of law. See in this regard Christoph Schreuer, “Investment Protection and International Relations”, in August Reinisch and Ursula Kriebaum eds., The Law of International Relations – Liber Amicorum Hanspeter Neuhold, (The Hague: Eleven International Publishing, 2007), at 345–358, at 347, with references to the drafting history of the Convention. The ILC, in its commentary to Art. 17 of its Draft Articles on Diplomatic Protection remarked that “[t]he dispute settlement procedures provided for in BITs and ICSID offer greater advantages to the foreign investor than the customary international law system of diplomatic protection, as they give the investor direct access to international arbitration, avoid the political uncertainty inherent in the discretionary nature of diplomatic protection and dispense with the conditions for the exercise of diplomatic protection.” 3  1965 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, 575 U.N.T.S. 159, 4 I.L.M. 532 (1965) (‘ICSID Convention’). For an analysis of Art. 27 ICSID Convention, see Christoph Schreuer et al., The ICSID Convention: A Commentary (2nd ed., Cambridge University Press , 2009), at 414–430; Aron Broches, “The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States”, 136 RCADI 331 (1972): 371–380. For ICSID cases discussing the prohibition in Art. 27, see in particular Banro American Resources, Inc. and Société Aurifère du Kivu et du Maniema S.A.R.L. v. Democratic Republic of the Congo, Award (ICSID Case No. ARB/98/7), 1 September 2000 (excerpts); Autopista Concesionada de Venezuela, C.A. v. Bolivarian Republic of Venezuela, Decision on Jurisdiction, (ICSID Case No. ARB/00/5), 27 September 2001. Investor-State awards are available at http://icsid.world bank.org or at http://ita.law.uvic.ca. 4  An exception is provided for the event that the host State has failed to abide by and comply with the award rendered in an investor-State dispute. See the final sentence of Art. 27 ICSID Convention. In this regard, see Enron Corporation Ponderosa Assets, L.P. v. Argentine Republic, Annulment Proceedings, (ICSID Case No. ARB/01/3), Decision on the Argentine 2

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(BITs),5 and was also explicitly dealt with in the abandoned draft Multilateral Investment Agreement (MAI) elaborated within the Organisation for Economic Co-operation and Development (OECD).6 This paper is concerned with a specific issue in the relationship between diplomatic protection and investment arbitration. It discusses whether there is a risk that diplomatic protection, though formally excluded from investment arbitration, may return through the back door under the guise of one of the manifestations of transparency, that is the non-disputing State’s participation in arbitral proceedings. It seeks to answer this question first by addressing the current trend towards transparency in investment arbitration (II), then by reviewing the present law and practice on submissions by non-disputing States (III) and by establishing the basis and the limits for the tribunal’s authority to allow non-disputing States’ submissions, including by suggesting a rule (IV), before reaching a conclusion (V). Republic’s Request for a Continued Stay of Enforcement of the Award (Rule 54 of the ICSID Arbitration Rules), 7 October 2008, at §§ 63–65. 5  See, e.g., Art. 8(4) (preferred version) of the UK Model BIT (2004), reprinted in Rudolf Dolzer & Christoph Schreuer, Principles of International Investment Law (Oxford University Press: USA, 2008), at 381, which contains a provision to the effect that “[n]either Contracting Party shall pursue through the diplomatic channel any dispute referred to the Centre unless: (a) the Secretary-General of the Centre, or a conciliation commission or an arbitral tribunal constituted by it, decides that the dispute is not within the jurisdiction of the Centre; or (b) the other Contracting Party shall fail to abide by or to comply with any award rendered by an arbitral tribunal.” A similar provision is also to be found in certain treaties entered into by Switzerland. See, e.g., Art. 9(4) of the Switzerland-Pakistan BIT (1995): “Aucune Partie Contractante ne poursuivra par la voie diplomatique un différend soumis au Centre, à moins que (a) le Secrétaire général du Centre, ou une commission de conciliation, ou un tribunal arbitral institué par le Centre ne décide que le différend ne relève pas de la compétence de ce dernier, ou que (b) l’autre Partie Contractante ne se conforme pas à la sentence rendue par un tribunal arbitral.” For a slightly different formulation, see Art. 9(4) of the Germany-Philippines BIT (1998): “Neither Contracting State shall pursue through diplomatic channels any matter referred to arbitration until the proceedings have terminated and a Contracting State has failed to abide by or to comply with the award rendered by the International Centre for Settlement of Investment Disputes.” Unless otherwise indicated, BITs referred to herein are available at http://www.unctadxi.org/templates/ DocSearch____779.aspx (last accessed 3 January 2012). 6  See Art. C(1)(b) of the MAI Draft Consolidated Text, Doc. DAFFE/MAI(98)7/REV1, which reads: “A Contracting Party may not initiate proceedings under this Article for a dispute which its investor has submitted, or consented to submit, to arbitration under Article D, unless the other Contracting Party has failed to abide by and comply with the award rendered in that dispute or those proceedings have terminated without resolution by an arbitration tribunal of the investor’s claim.” See also the commentary to this provision in MAI, “Commentary to the Consolidated Text”, Doc. DAFFE/MAI(98)8/REV1, at 36. Documents related to the MAI are available at http://www1.oecd.org/daf/mai/index.htm (last accessed 3 January 2012).

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II.  Towards Transparency in Investment Arbitration There is a drive towards transparency in investment arbitration nowadays. Transparency has many facets and the term is generally used as a heading covering different aspects of the conduct of arbitral proceedings. Transparency is usually understood to comprise the following main issues: (i) whether the existence of investment arbitration proceedings should be made public; (ii) whether the general public should be granted access to the record of the proceedings or parts of it (awards, orders, briefs, documentary evidence, witness statements and expert reports); (iii) whether arbitration hearings should be opened to the general public; (iv) and whether non-disputing parties should be allowed to file written submissions as amici curiae in the proceedings. A few years ago, the ICSID Administrative Council amended the ICSID Arbitration Rules with effect from 10 April 2006.7 With regard to transparency, the most important innovation was ICSID Rule 37(2), which allows for the possibility that non-disputing parties file written submissions in a pending arbitration.8 The ICSID Rules are the ones most used in investorState disputes.9 The other set of rules that often apply in investment arbitrations are the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules.10 The UNCITRAL Arbitration Rules have  Aurélia Antonietti, “The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rules”, 21 (2006) ICSID Review – Foreign Investment Law Journal 427.  8  ICSID Arbitration Rule 37(2) reads: “After consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute (in this Rule called the “non-disputing party”) to file a written submission with the Tribunal regarding a matter within the scope of the dispute. In determining whether to allow such a filing, the Tribunal shall consider, among other things, the extent to which: (a) the non-disputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the proceeding by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties; (b) the non-disputing party submission would address a matter within the scope of the dispute; (c) the non-disputing party has a significant interest in the proceeding. The Tribunal shall ensure that the non-disputing party submission does not disrupt the proceeding or unduly burden or unfairly prejudice either party, and that both parties are given an opportunity to present their observations on the non-disputing party submission”.  9  According to data provided by the United Nations Conference on Trade and Development (UNCTAD), in line with past trends “the majority of cases accru[e] under ICSID (in total now 245 cases) and UNCITRAL (109). Other venues are used only marginally, with 19 cases at the SCC, six with the International Chamber of Commerce and four ad hoc. One further case was filed with the Cairo Regional Centre for International Commercial Arbitration. In six of the total of 390 cases, the applicable arbitration rules remain unknown”. See UNCTAD, Latest Developments in Investor – State Dispute Settlement, IIA Monitor No. 1, March 2011, at 2. 10  Ibid.  7

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been in force since their adoption by the UN General Assembly in 197611 and were revised in 2010.12 After the revision was completed, UNCITRAL entrusted its Working Group II on arbitration and conciliation with the task of preparing a “legal standard on the topic of transparency in treaty-based investor-State arbitration”.13 The works of the Working Group are currently ongoing.14 In addition to the rules governing the conduct of arbitration proceedings, transparency provisions may also be contained in investment treaties. Traditionally, international investment agreements did not include transparency provisions.15 However, starting from the early 2000s, transparency began being addressed in certain treaties. Important examples are provided in the recent US16 and Canada17 Model BITs (the texts of which have been used in subsequent treaties entered into by those two countries).18

III.  Non-Disputing States in Investment Arbitration: Current Law and Practice As was already noted, one of the aspects of transparency is the participation of non-parties in arbitration, often called non-disputing parties. One form of such participation is the one commonly referred to as amicus curiae. The ‘friend of the court’ typically files a written submission on a topic of which it  On the UNCITRAL Rules, see David Caron, Lee Caplan & Matti Pellonpää, The ­UNCITRAL Arbitration Rules, A Commentary (Oxford University Press, USA, 2006). 12  Official Records of the General Assembly, Thirty-first Session, Supplement No. 17 (A/31/17), chap. III, sect. C, at § 187. 13  Ibid., chap. III, sect. E, § 190. 14  See UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-third session (Vienna, 4–8 October 2010), U.N. Doc. A/CN.9/712; UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-fourth session (New York, 7–11 February 2011). 15  See UNCITRAL, Working Group II (Arbitration and Conciliation), Settlement of commercial disputes: Preparation of rules of uniform law on transparency in treaty-based investorState dispute settlement. Note by the Secretariat, 5 August 2010, U.N. Doc. A/CN.9/WG.II/ WP.160, at §§ 5–6. 16  See US Model BIT (2004), Arts. 28(3) and 29, reprinted in Rudolf Dolzer & Christoph Schreuer, Principles of International Investment Law, at 409–412. 17  See Canada Model Foreign Investment Promotion and Protection Agreement (FIPA) (2004), Arts. 38–39, available at http://www.international.gc.ca/trade-agreements-accords-commerciaux/ agr-acc/fipa-apie/what_fipa.aspx?lang=en#structure&menu_id=45 (last accessed 3 January 2012). In Canadian practice, BITs are called FIPAs. 18  See US-Uruguay BIT (2005), Arts. 28(3) and 29; US-Rwanda BIT (2008) (not yet entered into force), Arts. 28(3) and 29; Canada-Peru FIPA (2006), Arts. 38–39; Canada-Jordan FIPA (2009), Arts. 38–39. 11

312   Gabrielle Kaufmann-Kohler has particular knowledge in order to assist the tribunal in its decision-making. An amicus can for instance be a non-governmental organisation (NGO) active in the area of human rights or the environment that has an interest in a dispute that gives rise to issues of human rights or the environment.19 The amicus curiae can also be the so-called non-disputing State. In investment arbitrations conducted under an investment treaty, the respondent State is party to the arbitration as well as party to the treaty. The other State party to the treaty, which is the home State of the investor, is not party to the arbitration. Yet, the arbitration may well turn on the interpretation of the treaty. The State party to the treaty, which is at the same time party in the arbitration, will have its say about the interpretation while the other State party to the treaty, which is not party to the arbitration, will not be heard on the interpretation of the treaty.20 Should that State be allowed to participate as an amicus curiae? Should it be admitted as of right or only within the discretion of the arbitral tribunal? Several treaties allow for the participation of the non-disputing State. The best known example is the North American Free Trade Agreement (NAFTA), which includes an Article 1128 entitled ‘Participation by a Party’. This provision sets forth that “[o]n written notice to the disputing parties, a Party may make submissions to a Tribunal on a question of interpretation of this Agreement”. Similar provisions are to be found in the Central American Free Trade Agreement (CAFTA),21 in the US Model BIT (2004)22 and in the Canadian Model BIT (2004),23 as well is in certain recent BITs or Free Trade Agreements (FTAs) entered into by the US24 and Canada.25 Interestingly,  There is by now vast literature on amici curiae in investment arbitration. See, e.g., Brigitte Stern, “Civil Society’s Voice in the Settlement of International Economic Disputes”, 22 ICSID Review – Foreign Investment Law Journal 44 (2007); Florian Grisel & Jorge Viñuales, “L’amicus curiae dans l’arbitrage d’investissement”, 22 ICSID Review – Foreign Investment Law Journal 380 (2007). 20  See Anthea Roberts, “Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States”, 104 American Journal of International Law 179 (2010); Jack J. Coe, “Taking Stock of NAFTA Chapter 11 in its Tenth year: An Interim Sketch of Selected Themes, Issues and Methods”, 36 Vanderbilt Journal of Transnational Law 1381 (2003), at 1409–10. 21  See CAFTA-DR (2004), Art. 10.20.2. 22  See US Model BIT (2004), Art. 28(2). 23  See Canada Model FIPA (2004), Art. 35. 24  See US-Chile FTA (2003), Art. 10.19(2); US-Singapore FTA (2003), Art. 15.19(2); US-Morocco FTA (2004), Art. 10.19(2); US-Uruguay BIT (2005), Art. 28(2); US-Oman FTA (2006), Art. 10.19(2); US-Peru TPA (2006), Art. 10.20(2); US-Panama TPA (2007, not yet entered into force), Art. 10.20(2); US-Rwanda BIT (2008, not yet entered into force), Art. 28(2). 25  Canada-Chile FTA (1996), Art. G-29; Canada-Peru FTA (2008), Art. 832; ­Canada-Colombia FTA (2008), Art. 827(2); Canada-Jordan FIPA (2009); Canada-Panama FTA (2010), Art. 9.28(2). 19

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a mechanism to allow the non-disputing State party to make a submission with the permission of the tribunal was already provided in the 1983 rules of the Iran-United States Claims Tribunal.26 There appear to be no reported cases brought under those recent US or Canadian BITs or FTAs that include the provisions just referred to, with the consequence that there has been no opportunity yet to test the willingness of the investor’s home State to file a non-disputing party submission in a purely bilateral context. By contrast, the use of 1128-submissions in the multilateral context of NAFTA has been the rule rather than the exception, both by the home State of the investor and by the third State (meaning the State that is neither the respondent in that particular arbitration nor the State of nationality of the claimant).27 With regard to the much younger jurisprudence of CAFTA (made up of only a handful of cases so far), States have indeed made use of the mechanism to file non-disputing party submissions, although so far this has been only the case with third States and not with the investor’s home State.28

 See Notes to Article 15 of the Tribunal Rules of Procedure, at § 5: “The arbitral tribunal may, having satisfied itself that the statement of one of the two Governments – or, under special circumstances, any other person – who is not an arbitrating party in a particular case is likely to assist the tribunal in carrying out its task, permit such Government or person to assist the tribunal by presenting oral or written statements.” The Tribunal Rules of Procedure are available at www.iusct.org (last accessed 3 January 2012). 27  In proceedings under NAFTA, there have been more than 50 submissions pursuant to Art. 1128, rather evenly distributed between the three contracting States. In certain cases, States have filed several 1128-submissions in the same arbitration. See, e.g., Pope & Talbot Inc. v. Canada, NAFTA/UNCITRAL, where the US filed eight 1128-submissions. In certain cases, the Tribunal itself has invited the non-disputing State parties to make submissions on particular issues. See, e.g., Archer Daniels Midland Co. and Tate & Lyle Ingredients Americas Inc. v. United Mexican States (ICSID Case No. ARB(AF)/04/5), Concurring Opinion of Arthur W. Rovine, 21 November 2007, at § 20 (noting that “[u]nfortunately, neither Canada nor the United States filed submissions in the instant case, pursuant to Article 1128, notwithstanding invitations from the Tribunal to both governments to do so”). Many of the 1128-submissions have addressed the “fair and equitable treatment” standard under Art. 1105 NAFTA, in relation with the “international minimum standard of treatment” under customary international law, and the related question of the legal effect of the Free Trade Commission (FTC) Notes of Interpretation of 31 July 2001. Other issues covered by 1128-submissions have included, inter alia, the meaning of “in like circumstances” under Art. 1102 NAFTA or the scope of the provision on expropriation. 28  In three CAFTA arbitrations where the claimant was a US investor, the United States did not file any submission under Art. 10.20.2 CAFTA. See Railroad Development Corporation v. Republic of Guatemala, Second Decision on Objections to Jurisdiction (ICSID Case No. ARB/07/23) 18 May 2010, at § 18; Pac Rim Cayman LLC v. Republic of El Salvador, Decision on The Respondent’s Preliminary Objections under CAFTA Articles 10.20.4 and 10.20.5 (ICSID Case. No. ARB/09/12), 2 August 2010, at § 51; Commerce Group Corp. 26

314   Gabrielle Kaufmann-Kohler For the purpose of this paper, only one type of non-disputing State submissions will be considered, namely those filed by the State of nationality of the investor. Views expressed by the State parties to the treaty other than the investor’s home State will not be considered, because they do not create the risk of a possible resurgence of diplomatic protection.29 As already stated, NAFTA provides thus far the only context in which such home State submissions have been filed. A review of the publicly available record of cases under NAFTA shows that, in a total of 19 cases where the investor’s home State filed one or more submissions under Article 1128, in only two instances did the non-disputing State endorse the position of the claimant, i.e. of its own national against the foreign State.30 In the other 17 out of 19 cases, the national State of the investor sided with the latter’s opponent. Even in those two cases where the home State (in both instances, the United States) took a position supporting its own national, it did so only on certain issues, whereas on other debated questions of interpretation it sided with the respondent State. Thus, in Marvin Feldman v. Mexico, on the question of standing under 1117(1) NAFTA, the United States expressed the view, which was favourable to the Claimant, that the treaty did not bar a claim by a natural person who was both a citizen of the United States and a permanent resident (but not a citizen) of Mexico.31 However, on the different issue of whether and San Sebastian Gold Mines Inc. v. Republic of El Salvador Award (ICSID Case No. ARB/09/17) 14 March 2011, at § 40. 29  This is not of course to say that third party views are not relevant or do not raise other legal questions. In addition to problems relating to the procedure to be followed by arbitral tribunals with regard to non-disputing State party submissions (on which see in particular Martin Hunter, “Reflections on Article 1128 of the NAFTA”, in eds. R. Briner et al., Law of International Business and Dispute Settlement in the 21st Century – Liber Amicorum Karl-Heinz Böckstiegel, at 313–318; Martin Hunter & Alexei Barbuk, “Procedural Aspects of Non-Disputing Party Interventions in Chapter 11 Arbitrations” 3 (2003) Asper Rev. Int’l Bus. & Trade L. 151), the question arises as to the legal effect for the arbitral tribunal when all parties to the treaty (through the mechanism of such submissions) agree on a certain interpretation of the treaty. On this issue, see in particular Andrea J. Menaker, “Treatment of Non-Disputing State Party Views in Investor-State Arbitrations, in A. Rovine ed., Contemporary Issues in International Arbitration and Mediation: The Fordham Papers, Volume 2 (2008), at 59–80. 30  Data is up to date as of 31 March 2011, and retrieved from the website pages kept by the three NAFTA States. In particular, for cases filed against the United States, see http://www .state.gov/s/l/c3741.htm; for cases filed against Canada, see http://www.international.gc.ca/ trade-agreements-accords-commerciaux/disp-diff/gov.aspx?lang=en; for cases filed against Mexico, see http://www.economia.gob.mx/swb/en/economia/p_Solucion_Controversias_ InvEdo (last accessed 3 January 2012). 31  Marvin Roy Feldman Karpa v. United Mexican States Submission of the United States of America on Preliminary Issues (ICSID Case No. ARB(AF)/99/1), 6 October 2000, at §§ 2–12.

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the ­three-year limitation period for “making a claim” under Article 1117(2) NAFTA required a claimant to simply deliver a notice of intent or to actually submit the claim to arbitration, the United States favoured the latter interpretation, thus endorsing Mexico’s view.32 Similarly, in Metalclad Corporation v. Mexico, the United States, as the Claimant’s State of nationality, addressed several issues in its ­1128-submission. On the first question whether the actions of local governments, including municipalities, were subject to the NAFTA standards, the United States submitted an affirmative response, thus siding with the Claimant.33 On the second issue addressed in its submission, i.e. the meaning of the term “tantamount to expropriation” in Article 1110 NAFTA, the United States opined that such phrase was not intended to create a new category of expropriation. While cautiously submitting that its conclusion was “consistent with the positions taken by both the disputants in the case”,34 the opinion in fact leaned more towards an interpretation disfavouring the Claimant.35 These findings demonstrate that there is no risk of a resurgence of diplomatic protection in the NAFTA context, but rather the opposite phenomenon is more likely. The explanation may be that NAFTA is a limited environment in which each State is more likely to identify with the State rather than with the investor. This is presumably so because the non-disputing State is often itself a respondent and therefore seeks to preventively protect its own position. The aim of the three NAFTA States when making submissions as non-disputing parties appears to promote a balanced and long-term interpretation of the treaty, rather than to support their national investor in that specific case, or in the words of Meg Kinnear—at that time General Counsel in Canada’s Trade Law Division—in a letter addressed to the tribunal in Pope & Talbot Inc. v. Canada: The role of the NAFTA Parties as disputing parties, capital exporters, recipients of investments of other Parties and as sovereign states with a clear interest in the proper operation of the Agreement, transcends the merits of specific ­cases.36

 Ibid., at §§ 13–18.  Metalclad Corporation v. United Mexican States, Submission of the Government of the United States (ICSID Case No. ARB(AF)/97/1), 9 November 1999, at §§ 3–8. 34  Ibid., at § 9. 35  See ibid., at § 14, for the conclusion that “NAFTA claimants may not seek damages under Article 1110 for actions beyond those contemplated in the customary international law concepts of direct and indirect expropriation”. 36  Pope & Talbot Inc. v. Canada, NAFTA/UNCITRAL, Letter from Meg Kinnear to the Tribunal, 1 October 2001, at 4, attached as Exhibit A of the Submission of the United States of America in Chemtura Corporation v. Canada, 31 July 2009. 32 33

316   Gabrielle Kaufmann-Kohler Can these observations drawn from NAFTA practice be transposed to the BIT context? As already mentioned, there is no practice so far of nondisputing State submissions made pursuant to a provision in a BIT. There have, however, been a limited number of cases where, despite the absence of a provision in the treaty, the home State was asked or allowed to file a submission. In Aguas del Tunari v. Bolivia, the arbitral tribunal wrote to the government of the Netherlands—the home State of the investor—with regard to statements made by the government before the Dutch parliament concerning jurisdiction under the Netherlands-Bolivia BIT.37 In its letter, the Tribunal was mindful not to trigger the Netherlands’ diplomatic protection and limited its request to seeking comments on “specific documentary bases” on which the government had relied to provide its response to the parliament: The Tribunal recognizes the obligation of the Netherlands under [Article 27 of ] the ICSID Convention to not provide diplomatic protection to is nationals in the case of investment disputes covered by the Convention. In this sense, the Tribunal wishes to emphasize that it does not seek the view of the Netherlands as to the Tribunals’ jurisdiction in this matter, rather it seeks only to secure the comments of the Netherlands as to specific documentary bases for written responses which the Dutch government provided to parliamentary questions. [. . .] the Tribunal is also of the view that such questions must be specific and narrowly tailored, aimed at obtaining information supporting interpretative positions of general application rather than ones related to a specific case. It is the opinion of the Tribunal that it possesses the authority to seek this information under Rule 34 of the ICSID Arbitration Rules.38

In the end, the Tribunal found the information thus obtained unhelpful and “made no use of this document in arriving at its decision”.39 CME v. Czech Republic is an example of a somewhat different scenario. After the Tribunal had issued a partial award, the Czech Republic requested “consultations” with the Netherlands, as provided in the Netherlands-Czech Republic BIT,40 with a view to resolving certain issues of interpretation and application of the treaty arising from the Tribunal’s partial award. As a result of this procedure, the two contracting States issued “agreed minutes” ­containing a “common position” on the interpretation of the BIT.41 When the  The Tribunal characterised its request as “the first inquiry of a non-disputing State party to a BIT” (Aguas del Tunari v. Bolivia Decision on Respondent’s Objections to Jurisdiction (ICSID Case No. ARB/02/3), 21 October 2005, at § 258). 38  Ibid. The full text of the letter from the Tribunal to the Government of the Netherlands is reproduced as Appendix IV to the Decision on Respondent’s Objections to Jurisdiction. 39  Ibid., at § 260. 40  Netherlands-Czech Republic BIT (1991), Art. 9. 41  CME v. The Czech Republic, Final Award, UNCITRAL, 14 March 2003, at §§ 87–93. 37

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Tribunal rendered its final award, it took the “agreed minutes” into account as supporting its holdings.42 The arbitral proceedings were conducted under the UNCITRAL Rules. Thus, the prohibition of diplomatic protection in the ICSID Convention was not applicable, nor was diplomatic protection addressed in the BIT. In SGS v. Pakistan, the non-disputing Swiss State, in a letter addressed to ICSID, voiced its disagreement about the Tribunal’s narrow interpretation of the umbrella clause contained in Article 11 of the Switzerland-Pakistan BIT.43 The Swiss authorities wondered “why the Tribunal has not found it necessary to enquire about their view on the meaning of Article 11 in spite of the fact that the Tribunal attributed considerable importance to the intent of the Contracting Parties in drafting this Article and indeed put this question to one of the Contracting Parties (Pakistan)”.44 The letter was sent after the decision on jurisdiction had been rendered and thus had no influence on the outcome of the arbitration. Similarly, the United States intervened before the annulment committee in Siemens v. Argentina.45 This instance is different from the examples discussed so far in that the dispute was brought under the Germany-Argentina BIT, and thus the United States were not a party to the treaty at issue. The United States felt nevertheless “compelled” to intervene in view of the possible “repercussions” for other cases involving US investors.46 The US submission addressed the interpretation of Articles 53 and 54 of the ICSID Convention, and was a response to Argentina’s suggestion that the United States shared its position on the interpretation of theses articles. With regard to the ad hoc  Ibid., at §§ 437, 504.  See Emmanuel Gaillard, “Investment Treaty Arbitration and Jurisdiction Over Contract Claims – the SGS Cases Considered”, in Todd Weiler ed., International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (London: Cameron, May 2005), at 325–346. 44  Note on the Interpretation of Article 11 of the Bilateral Investment Treaty between Switzerland and Pakistan in the light of the Decision of the Tribunal on Objections to Jurisdiction of ICSID in Case No. ARB/01/13 SGS Société Générale de Surveillance S.S. versus Islamic Republic of Pakistan, attached to the Letter of the Swiss Secretariat for Economic Affairs to the ICSID Deputy-Secretary General dated October 1, 2003, published in 19 Mealey’s: Int’l Arb. Rep. E 3 (Feb. 2004). 45  See Siemens AG v. Argentine Republic, Annulment Proceeding, (ICSID Case No. ARB/02/8), Letter from Lisa J. Grosh to Claudia Frutos-Peterson, 1 May 2008, available at http://ita.law .uvic.ca (last accessed 3 January 2012). 46  The US stated that “[w]hile the United States would not normally seek to make an unsolicited submission in an ICSID proceeding in which it is not a party, we feel compelled to do so in this case . . . [The interpretation of Articles 53 and 54 ICSID Convention] has repercussions for cases well beyond the present one, including a number of disputes by U.S. investors against Argentina”. Ibid., at 1. 42 43

318   Gabrielle Kaufmann-Kohler committee’s authority to accept such submission, the United States invoked the amended ICSID Rule 37(2) on amicus curiae briefs, and alternatively Article 44 ICSID Convention, which had been used as legal basis for accepting amicus submissions under prior ICSID practice.47 Interestingly, Argentina’s subsequent response, while disagreeing on the substance of the US interpretation of the relevant provisions of the ICSID Convention, did not take issue with the Tribunal’s authority to accept the US submission.48 The most recent illustration of a home State submission is provided by Eureko v. Slovak Republic. In this UNCITRAL case, the Tribunal was confronted with the debated issue of the ‘intra-EU jurisdictional objection’, that is, the objection that the Tribunal lacked jurisdiction to hear a dispute between a European investor and a EU Member State, on the grounds that the underlying BIT was terminated (or the arbitration offer in the treaty had lapsed) as a result of the Respondent’s accession to the EU.49 The Tribunal wrote to the Netherlands’ Ministry of Economic Affairs inviting it to express a position on issues involving the Tribunal’s jurisdiction.50 The Dutch government provided observations on whether the BIT was in force and “legally valid” despite the Slovak Republic’s accession to the EU.51 In a subsequent letter to the Tribunal, the Dutch government attached a “[n]ote verbale” that it had received from the Slovak Ministry of Foreign Affairs bearing on the alleged termination of the BIT.52 In its award, the Tribunal acknowledged the input from the Netherlands as “helpful”,53 although it spelled out that it “has not found it necessary to rest any part of its decision upon the ostensible attitude of either Party to these arbitration proceedings—still less upon that of the Government of the Netherlands or of the European Commission—to the question of the status of the BIT or the existence, continuation or extent of the jurisdiction of the Tribunal.”54 As is evident from this last quotation, the tribunal in Eureko also received observations from the European Commission, which filed an amicus curiae brief on the intra-EU BIT issue.55 Eureko is not the only example of such  Ibid.  Siemens AG v. Argentine Republic, Annulment Proceeding, (ICSID Case No. ARB/02/8), Letter from the Procuración del Tesoro de la Nación to Claudia Frutos-Peterson, 2 June 2009, available at http://ita.law.uvic.ca (last accessed 3 January 2012). 49  Eureko B.V. v. The Slovak Republic, Award on Jurisdiction, Arbitrability and Suspension, UNCITRAL, PCA Case 2008-13, 26 October 2010. 50  Ibid., at §§ 30–32, 34, 36, and esp. 154–174. 51  Ibid., at §§ 155–163. 52  Ibid., at §§ 164–166. 53  Ibid., at § 217. 54  Ibid., at §§ 219 (emphasis added). 55  Ibid., at § 26, 30, 31, 33, 37, 41, 151–153, and esp. 175–211. 47 48

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participation by the European Commission in investment arbitration proceedings. In three ICSID cases (AES v. Hungary,56 Electrabel v. Hungary,57 and Micula v. Romania),58 the European Commission filed an application as a non-disputing party invoking ICSID Rule 37(2), and the tribunals granted the Commission’s request.59

IV.  Basis and Limits of a Non-Disputing State’s Submission The cases discussed above, in which tribunals were confronted with a home State submission in the absence of an explicit provision in the treaty à la Article 1128 NAFTA, raise several questions: What is the basis for the tribunal’s authority to accept such submissions? Should such submissions be admitted as a matter of right of the non-disputing State or only within the tribunal’s discretionary powers? And what should the scope of such submissions be? Answers to these questions are particularly needed when one considers that out of the almost 3,000 existing BITs, only a very small minority contain an express clause allowing non-disputing State submissions.60 To answer these questions, a distinction must be drawn between investment treaty arbitrations initiated under the ICSID Convention and arbitrations initiated under different rules. ICSID Rule 37(2) speaks of a ‘person or entity’ filing a non-disputing party submission. The initial proposal for the amendment of Rule 37 contained clearer language by referring to a ‘person or State’.61 In spite of this difference in terms, the wording finally adopted

 AES Summit Generation Limited and Aes-Tisza Erömü Kft v. Republic of Hungary, Award, (ICSID Case No. ARB/07/22) 23 September 2010, at §§ 3.18–3.22, and 8.2 (noting that “[t]he Tribunal also acknowledges the efforts made by the European Commission to explain its own position to the Tribunal and has duly considered the points developed in its amicus curiae brief in its deliberations”). 57  Electrabel S.A. v. Republic of Hungary, (ICSID Case No. ARB/07/19) (pending). 58  Ioan Micula, Viorel Micula, SC European Food SA and SC Starmill Srl, SC Multipack Srl v. Romania, (ICSID Case. No. ARB/05/20) (merits phase pending). The EC submission was filed after the Decision on Jurisdiction of 24 September 2008 was rendered. 59  On the European Commission’s participation as amicus in investment arbitration, see Séverine Menétrey, “La participation “amicale” de la Commission européenne dans les arbitrages liés aux investissements intracommunautaires”, 137 (2010) Journal du droit international 1127. 60  See the treaties quoted above in footnotes 21–25. 61  Working Paper of the ICSID Secretariat, Suggested Changes to the ICSID Rules and Regulations, (12 May 2005), available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType =ICSIDPublicationsRH&actionVal=ViewAnnouncePDF&AnnouncementType=archive& AnnounceNo=22_1.pdf (last accessed 3 January 2012), at 11. 56

320   Gabrielle Kaufmann-Kohler was not meant to rule out States62 and is broad enough to encompass nondisputing State submissions.63 A reading to the contrary pursuant to which a tribunal is entitled to accept a submission by an NGO, but not by a nondisputing State, would lead to awkward results.64 A caveat is, however, necessary. Among the factors that the arbitral tribunal must consider when deciding whether to allow a filing by a non-disputing party, Rule 37(2) mentions the fact that “the non-disputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the proceeding”.65 The reference to a submission on facts, rather than solely on points of law, raises some concerns. All provisions modelled around Article 1128 NAFTA allowing for a non-disputing State submission restrict such intervention to questions of interpretation of the treaty. If one reviews the practice under NAFTA, the standard incipit of the vast majority of the 1128-submissions underscores that the non-disputing State “takes no

 See also Aurélia Antonietti, “The 2006 Amendments to the ICSID Rules and Regulations and the Additional Facility Rules”, 21 ICSID Review – Foreign Investment Law Journal 427 (2006), at 435 (noting that “[t]he legal nature of the “third party” allowed to file a written submission raised concerns since some commentators found the wording “person or State,” as first suggested in the Working Paper, too restrictive. It is now trusted that the wording “person or entity,” as adopted in the final text, answers those concerns. It follows that the non-disputing party can be a natural person, a juridical person, an unincorporated NGO or a State”). 63  See Aguas Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, Order in response to a petition for transparency and participation as amicus curiae (ICSID Case No. ARB/03/19),19 May 2005, at §§ 10–16; Aguas Provinciales de Santa Fe S.A., Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A. v. Argentine Republic), Order in response to a petition for participation as amicus curiae (ICSID Case No. ARB/03/17), 17 March 2006, at §§ 11–16. 64  It may be added that the fact that an amicus curiae may be a State, rather than an NGO, is not an unknown scenario in international adjudication. The rules of procedure and evidence of the International Criminal Tribunal for the former Yugoslavia, for example, contain a provision entitled ‘Amicus Curiae’, which allows the Chamber “to invite or grant leave to a State, organization or person to appear before it and make submissions on any issue specified by the Chamber” (Rule 74 of the Rules of Procedure and Evidence of the International Criminal Tribunal for the former Yugoslavia, available at www.icty.org (last accessed 3 January 2012) (emphasis added)). Further, within the WTO context, the Appellate Body in one instance asserted authority to accept an amicus curiae brief from a WTO member State (Morocco). See Appellate Body Report, EC-Sardines, WT/DS231/AB/R, 26 September 2002, at §§ 153–170, and 314 (noting, at § 164, that “[a]s we have already determined that we have the authority to receive an amicus curiae brief from a private individual or an organization, a fortiori we are entitled to accept such a brief from a WTO Member, provided there is no prohibition on doing so in the DSU”). 65  ICSID Arbitration Rule 37(2) (emphasis added). 62

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position on how the interpretative position it offers . . . applies to the facts of the case”.66 This raises the question “whether there is a broader scope for non-disputing parties (amicus) to participate in an arbitration than is offered to non-disputing NAFTA States under NAFTA Article 1128”.67 Home State submissions do pose risks that NGO submissions do not raise. If the investor’s home State were allowed to file a submission beyond matters of interpretation of the treaty to which it is a party, and to address the facts in dispute, there would be a serious argument that Article 27 of the ICSID Convention is being breached. A home State submission defending a position on factual issues in aid of its own national would de facto equate, or at least come very close, to diplomatic protection. In order to avoid this risk, a tribunal faced with a non-disputing State request should construe Rule 37(2) in light of Article 27 of the ICSID Convention, which is a mandatory treaty provision not susceptible to being derogated from by a rule of procedure.68 Thus, it may authorise a submission of a non-disputing State, provided the submission is restricted to questions of treaty interpretation. The nature of Article 27 of the ICSID Convention as a mandatory provision provides clear authority for the tribunal to adopt such a restriction. The tribunal’s discretion in the assessment of the principle and scope of amici requests under Rule 37(2) as well as the tribunal’s residual powers under Article 44 of the ICSID Convention reinforce this authority, if need be. While this conclusion provides an affirmative answer to the question as to the authority for tribunals to accept submissions (and, if needed, to restrict their scope), it leaves unanswered the further question asked at the outset of this paragraph: In the absence of a provision in the investment treaty similar  See Pope & Talbot Inc. v. Canada, Submission of the United States of America, ­UNCITRAL/ NAFTA, 7 April 2000 (emphasis added). Almost identical language is invariably found in other 1128-submissions. 67  Meg Kinnear, Transparency and Third-Party Participation in Investor-State Dispute Settlement, Paper presented at the Symposium Co-Organised by ICSID, OECD and UNCTAD entitled “Making the Most of International Investment Agreements: A Common Agenda”, (Paris: 12 December 2005), at 9. This concern was also raised by Mexico in its ­1128-submission in the Methanex case, in which an investor-State tribunal was for the first time faced with an amicus curiae request by NGOs. Arguing that NAFTA did not allow such submissions, Mexico contended that “[i]f amicus curiae submissions were allowed, amici would have greater rights than the NAFTA Parties themselves, because of the limited scope of Article 1128 submissions . . . . such a result was clearly never intended by the NAFTA Parties”. See Methanex Corporation v. United States, Submission by Mexico, NAFTA/UNCITRAL, 10 November 2000, at §§ 4–7. 68  On the relationship between the ICSID Convention and the Arbitration Rules, see Christoph Schreuer et al., The ICSID Convention: A Commentary, at 682–683. 66

322   Gabrielle Kaufmann-Kohler to Article 1128 NAFTA, should non-disputing State submissions as of right be admitted in ICSID proceedings or is the arbitral tribunal granted a margin of discretion to refuse the filing of such submissions?69 The wording of Rule 37(2) (“the Tribunal may allow a person or entity . . . [i]n determining whether to allow such a filing . . .”) indicates that the arbitral tribunal enjoys discretion to refuse a non-disputing State submission. How should the tribunal exercise its discretion? One obvious answer is that it should refuse submissions beyond matters of treaty interpretation, which refers us back to the question just discussed about the scope of the non-disputing State’s interpretation. A further answer is that, as a rule, a tribunal should allow submissions from non-disputing States on treaty interpretation. Their value will be evident in most cases due to the fact that the home State may bring an unknown perspective on the interpretation of the treaty (including access to the travaux préparatoires which may not be otherwise available to the tribunal), thus avoiding one-sided interpretations limited to the respondent State’s contentions. The same is not true when ICSID jurisdiction is based on a contract or on a domestic law as opposed to a treaty. The usefulness of a submission by the investor’s home State would then be largely reduced, if not entirely eliminated (unless the question of interpretation concerns the ICSID Convention itself ).70 Here, the discretion of ICSID tribunals to refuse a home State’s submission would be broader. Let us now turn to investment treaty arbitrations conducted under rules other than ICSID (UNCITRAL and SCC being the two most important ones in this context).71 The framework here appears somewhat different. First, unlike ICSID, those rules do not contain any express provision on amicus curiae briefs. So long as no such rule is incorporated, the authority to grant leave to a non-disputing State to file a submission will necessarily have to be found in the tribunal’s residual powers.72 Second, those rules are silent on the issue of diplomatic protection.73 This is not surprising considering that both  For the view that home State submissions should be admitted as a matter of right, see Anthea Roberts, “Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States”, 104 (2010) American Journal of International Law 179, at 220. 70  As was the case with the U.S. submission in Siemens v. Argentina, quoted above in the text. 71  See above at footnote 9. 72  See UNCITRAL Rules, Art. 15(1) (1976 version) and Art. 17(1) (2010 version); SCC Rules, Art. 19(1). See, e.g., Methanex Corporation v. United States, Decision of the Tribunal on Petitions from Third Persons to Intervene as “Amici Curiae”, NAFTA/UNCITRAL, 15 January 2001, paras. 29–34. 73  The ICSID “Additional Facility” Rules provide a sort of middle ground in this regard, because while lacking a prohibition on diplomatic protection (Art. 27 ICSID Convention 69

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the UNCITRAL and the SCC Rules were elaborated for commercial arbitration and were only later used for investor-State disputes. Given the lack of a provision equivalent to Article 27 ICSID Convention, the home State’s room for manoeuvre in attempting to espouse the claim of its national appears wider in these arbitrations than in ICSID proceedings. One way to avoid such an interference would be to insert a provision in the investment treaty containing the offer of consent to UNCITRAL or SCC arbitration. As already noted, there are a number of BITs which address diplomatic protection.74 Certain BITs, which provide only for consent to ICSID, simply restate or slightly rephrase the content of Article 27 ICSID Convention in the text of the treaty (which per se is not necessary).75 Other BITs, however, which provide for both ICSID and UNCITRAL arbitration, contain a more general provision prohibiting the two contracting States from giving diplomatic protection to their nationals. Under this last pattern, followed for example by a significant number of Italian BITs,76 the prohibition of

not being applicable), they do provide for amicus curiae submissions (Art. 41(3) Additional Facility Rules). 74  See above at footnote 5. 75  For observations on the difference between the formulations used in such BIT provisions and the wording of Art. 27 ICSID Convention, see Ben Juratowitch, The Relationship Between Diplomatic Protection and Investment Treaties, 23(1) ICSID Review – Foreign Investment Law Journal 10 (2008), at 16–22; Christoph Schreuer et al., The ICSID Convention: A Commentary (2nd ed., 2009), at 426. 76  The following BITs entered into by Italy contain references to both ICSID and UNCITRAL arbitration, along with this (or similarly worded) clause: “Both Contracting Parties shall refrain from negotiating through diplomatic channels any matter relating to any arbitration procedure or judicial procedures that may have been instituted until these procedures have been concluded, and one of the Contracting Parties has failed to comply with the ruling of the Arbitration Tribunal or the judgment of the court of law within the terms prescribed by the ruling or the judgment, or any other terms that derive from international or internal law applicable to the case at issue.” See Italy-Turkey BIT (1995), Art. 8(4); Italy-Angola BIT (2002), Art. 9(4); Italy-Argentina BIT (1990), Art. 8(9); Italy-Bangladesh BIT (1990), Art. 9(3); Italy-Bolivia BIT (1990), Art. 9(3); Italy-Bosnia and Herzegovina BIT (2001), Art. 9(4); Italy-Democratic Republic of Congo BIT (2006), Art. 10(4)(b); Italy-Croatia BIT (1996), Art. 9(6); Italy-Egypt BIT (1989), Art. 9(3) (which was at issue in Waguih Elie George Siag and Clorinda Vecchi v. Egypt, Decision on Jurisdiction, (ICSID Case No. ARB/05/15), 11 April 2007, where the Tribunal noted (at § 198) that “[u]nder Article 9(3) of the BIT the avenue of diplomatic protection is specifically excluded while the arbitration is in progress”); Italy-Ethiopia BIT (1994), Art. 9(4); Italy-Hungary BIT, Art. 9(3); Italy-India BIT (1995), Art. 9(4); Italy-Kazakhstan BIT (1994), Art. 9(4); Italy-Lithuania BIT (1994), Art. 9(4); Italy-Libya BIT (2000), Art. 9(4); Italy-Mongolia BIT (1993), Art. 9(3); ItalyMorocco BIT (1990), Art. 8(3); Italy-Nicaragua BIT (2004), Art. 10(5); Italy-Peru BIT (1994), Art. 9(4); Italy-Tanzania BIT (2001), Art. 8(7); Italy-United Arab Emirates BIT (1995), Art. 9(3); Italy-Venezuela BIT (2001), Art. 8(9); Italy-Vietnam BIT (1990),

324   Gabrielle Kaufmann-Kohler ­ iplomatic protection would thus come into play whatever arbitration rules d are chosen by the claimant. This said, the overwhelming majority of BITs are silent on diplomatic protection. This raises the question whether the investor’s home State would be allowed to interfere with an ongoing investor-State arbitration by filing a non-disputing party submission which goes beyond treaty interpretation. This should not be the case. Even if an arbitration is conducted outside the framework of the ICSID Convention, there is no reason to allow for a broader scope of non-disputing party submissions beyond questions of interpretation of the treaty, simply because the applicable arbitration rules do not provide an express equivalent to Article 27 of the ICSID Convention. To allow the investor’s home State to run in aid of its national in an ongoing arbitration by pleading the facts in dispute would be contrary to the obligation to respect the investor-State arbitration dispute settlement framework which the State has undertaken when entering into the BIT. It would frustrate the object and purpose of the investor-State dispute settlement mechanism by introducing an ‘element’ of diplomatic protection which is alien to that.77 Or in the words of Judge Bennouna’s preliminary report on diplomatic protection: In consenting to arbitration, the parties to a dispute waive all other remedies. In this way, both the demand of the host State that local remedies be exhausted and the exercise of diplomatic protection by the State of nationality are put aside. In other words, where the right of the individual is recognized directly under international law (the bilateral agreements referred to above), and the individual himself can enforce this right at the international level, the “fiction” [on which the traditional idea of diplomatic protection rests] no longer has any reason for being.78

The investor-State dispute settlement mechanism involves a balance: the potential respondent State accepts to arbitrate with a private entity and as a trade-off it is relieved from the risk of being exposed to diplomatic protection Art. 9(3). See also Chile-Argentina BIT (1991), Art. 10(6); Bolivia-Ecuador BIT (1995), Art. 9(6). 77  See also Ben Juratowitch, “The Relationship between Diplomatic Protection and Investment Treaties”, 23(1) (2008) ICSID Review – Foreign Investment Law Journal 10, at 21–22 (expressing the view that “[e]ven where diplomatic protection is not explicitly excluded by a treaty, as a matter of practicality, one would still expect a State, in the exercise of its discretion, not to initiate diplomatic protection in a case in which a treaty remedy was available to the investor. One might further expect that a State would be estopped under customary international law from initiating a diplomatic protection action concerning rights covered by an investment treaty to which it was party where the relevant investor and the host State had both consented to arbitration”). 78  ILC, Preliminary Report on Diplomatic Protection, 4 February 1998, U.N. Doc. A/CN.4/484, para. 40.

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by the investor’s home State. To combine elements of the latter mechanism with the procedural framework of the former would disrupt such balance and must thus be deemed inadmissible. As a consequence, tribunals sitting under arbitration rules other than ICSID should exercise their procedural powers in such a fashion as to accept non-disputing State submissions on treaty interpretation but not beyond. The non-disputing State’s role is among the issues which are being considered by the UNCITRAL Working Group within the elaboration of a standard on transparency.79 In this context, the adoption of a rule on nondisputing State submissions would contribute to clarifying the legal position and increase the predictability of the arbitration process. To mark the difference between regular amici curiae and non-disputing State parties, it may be preferable to draft a separate provision devoted to the latter. Such rule should be formulated so as to limit the home State’s submission to questions of treaty interpretation along the lines of NAFTA Article 1128, while leaving the arbitral tribunal the power to refuse submissions which exceed such limits. A possible rule could read as follows: In arbitrations arising under an investment treaty, the Tribunal shall grant a request by a non-disputing State party to such treaty to make a submission to the Tribunal limited to questions of interpretation of the treaty. The Tribunal may define the scope of the questions of treaty interpretation which the nondisputing State’s submission may cover. The Tribunal shall ensure that the non-disputing State submission does not disrupt the proceedings or unduly burden or unfairly prejudice the disputing  See UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-fourth session (New York, 7–11 February 2011), U.N. Doc. A/CN.9/717, §§ 124 and 153 and Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-third session (Vienna, 4–8 October 2010), U.N. Doc. A/CN.9/712, §§ 49 and 103; UNCITRAL, Working Group II (Arbitration and Conciliation), Settlement of commercial disputes: Preparation of a legal standard on transparency in treaty-based investor-State arbitration. Note by the Secretariat, 9 December 2010, U.N. Doc. A/CN.9/WG.II/WP.162, § 3, and U.N. Doc. A/CN.9/WG.II/WP.162/Add.1, §§ 20–21; UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the work of its fifty-fourth session (New York, 7–11 February 2011), U.N. Doc. A/CN.9/717, § 124. See also the observations submitted by the government of Canada, in UNCITRAL, Working Group II (Arbitration and Conciliation), Settlement of commercial disputes: Transparency in treaty-based investor-State arbitration. Compilation of comments by Governments. Note by the Secretariat, 4 August 2010, U.N. Doc. A/CN.9/WG.II/WP.159/Add.1, § 15 and UNCITRAL, Working Group II (Arbitration and Conciliation), Settlement of commercial disputes: Transparency in treatybased investor-State arbitration. Comments of the Governments of Canada and of the United States of America on transparency in treaty-based investor-State arbitration under Chapter Eleven of the North American Free Trade Agreement (NAFTA). Note by the Secretariat, 7 December 2010, at 4–5 (expressing the view that non-disputing State submissions are of a different type than an amicus curiae submission).

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326   Gabrielle Kaufmann-Kohler parties. It shall give the disputing parties an opportunity to present their observations on the non-disputing State submission.

V.  Conclusion: Limiting Non-disputing State Submissions to Treaty Interpretation as a Safeguard against the Resurgence of Diplomatic Protection This contribution has attempted to highlight the interplay between nondisputing State submissions in investment arbitration and the possible ensuing dangers of the resurgence of diplomatic protection. The analysis of State practice under NAFTA has provided a clear picture showing that there is currently no risk of such a resurgence in a limited regional setting such as NAFTA. In the larger context of investor-State arbitration, one must distinguish between ICSID and other arbitrations. In the former, Article 27 of the Convention protects against ‘interventionist’ attitudes of home States. The protection will, however, only be effective if ICSID Arbitration Rule 37(2) is read to limit non-disputing State submissions to treaty interpretation matters. Although other arbitration rules contain no provision equivalent to Article 27, the procedural powers of the arbitrators should be exercised in the same manner as in ICSID arbitration. As a result, whatever forum is chosen by the investor for the resolution of its dispute with the host State, there should be no room for the investor’s home State exercising diplomatic protection. To allow the investor’s home State to come to the aid of its national in an ongoing arbitration would disrupt the carefully balanced framework of the investor-State dispute settlement mechanism. It would bring back the politicized atmosphere which is the consequence of a direct confrontation between two sovereigns that in the past led to friction between capital-importing and capital-exporting States, and which the investor-State dispute settlement mechanism precisely aims at avoiding (irrespective of which arbitration rules are chosen). An amicus curiae should exactly be that, a ‘friend of the court’; it should not be a friend of one of the two parties.80 Home State submissions should thus be welcomed by tribunals as a useful contribution towards a better decision-making process, provided they are limited to questions of treaty interpretation. Allowing a wider scope would, on the contrary, be at variance with the general objective underlying investment arbitration.  See Aguas Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, Order in response to a petition for transparency and participation as amicus curiae, (ICSID Case No. ARB/03/19) 19 May 2005, at § 13.

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Chapter Sixteen Negotiation and Adjudication: Complementarity and Dissonance Georges Abi-Saab It is with particular pleasure that I speak in this round-table not only because we are meeting here at the Graduate Institute where I taught for almost four decades, but also to bring the greetings of the African Foundation for International Law that I preside to this Conference organized by the Latin­American Society with the collaboration of the European Society and the American Society of International Law. Having given no title for my intervention in advance, I thought I would comment on the interventions of my colleagues along the axis of convergence and divergence between the two modes of the peaceful settlement of disputes: negotiation and adjudication. But as I listened to what was being said, I thought a better axis would be that of complementarity and dissonance. We have heard a lot on complementarities, but much less – if any – on dissonance, and perhaps rightly so. Still, there is some, which I shall address at the end of my remarks. Starting with the foundational dictum of the PCIJ already cited by Marcelo Kohen in the Free Zones case, which characterizes the relationship between the two modes of the settlement of disputes; but I have to quote it in French – because it was initially written in French, and in my submission, badly translated into English – and, as such, in French it reads: . . . le règlement judiciaire des conflits internationaux, en vue duquel la Cour est instituée, n’est qu’un succédané au règlement direct et amiable de ces conflits entre les Parties; que dès lors il appartient à la Cour de faciliter, dans toute la mesure compatible avec son Statut, pareil règlement direct et amical.1

 Case of the Free Zones of Upper Savoy and the District of Gex, [1929] P.C.I.J. Reports, Series A, No 22, at 13. (Emphasis added.)

1

328   Georges Abi-Saab It was translated in English as “judicial settlement is simply an alternative to the direct and friendly settlement of such disputes . . .”. However, “succédané” in French is not merely an “alternative”; it is, according to Le Grand Robert, “quelque chose qui supplée, qui remplace une chose absente”. It is a replacement to make up or fill in for something that does not exist or is unattainable; not merely an equivalent alternative, but a second best or an imperfect substitute. This was the perception of adjudication still lingering on then, in 1929; the direct heritage of the Westphalian paradigm with sovereignty and equality as its major premises or parameters; prompting sovereigns not to yield to any higher authority, be it a court. The great German historian of international law, Wilhelm Grewe describes the Peace of Westphalia era (until the last part of the 19th century) as the “nadir” of international adjudication; the rare arbitrations that took place during that period were more like two contending sovereign princes soliciting the intercession of a third one, i.e. a peer, to help them resolve their difference. Whence, the “old hat” mandate theory of arbitration, which is still occasionally echoed, depicting arbitrators as mandatories of the parties, settling the dispute in their place, rather than as persons endowed with jurisdictional power (be it based on consent) to decide the case by the application (i.e. as an arm) of the law. That was then the heritage of the PCIJ which, as a “permanent”, i.e. standing Court, was still a novelty in 1929. This reminds me of the repeated criticisms of my teacher, mentor and friend, Sir Robert Jennings, of the adjective “pacific” in the title of the Hague “Convention on the Pacific Settlement of International Disputes” of 1899 (revised in 1907); insinuating that going to court is as momentuous and extreme a decision as its “non-pacific” alternative of going to war; whilst, according to Jennings, going to court in international law should be considered, as in municipal law, as a banal routine act. Still, this is probably how resort to international litigation was perceived at the time of the adoption of the Convention in 1899, or even in 1929 when the PCIJ enunciated its dictum; viewing adjudication as a rare exception that remains subservient to the normal way of settling international disputes by negotiation, to be used only in the last resort. Things have radically changed since, though deeply ingrained ideas die hard. We live in a different world now, where recourse to international adjudication is much more frequent, before multiple fora on the universal, regional and sectorial levels, and where the two modes of the settlement of disputes interact and complement each other in diverse manners.

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I.  Complementarity If we consider the process of the peaceful settlement of international disputes as a whole, one can illustrate the complementarities between the two modes of settlement on a chronological scale, by reference to the adjudicative process. A.  At the Pre-adjudicative Stage At the beginning or at the creation, the whole process is triggered by the emergence of a “dispute”. And how can such a dispute emerge except through some kind of exchange, i.e. negotiations between the parties? In a book I wrote 45 years ago, I defined a dispute as “un accord sur un désaccord”, “an agreement to disagree”. This is the point of crystallization of the dispute. It is when the parties, however they communicate, put forward contradictory contentions and claims they reciprocally reject over the same subject matter. They don’t have to negotiate directly. They can make their positions publicly known through the media or in the General Assembly of the UN, as in the South West Africa cases with their opposition apparently reaching a deadlock. This was considered sufficient by the ICJ to satisfy the condition of prior negotiations and a fortiori for the crystallization of the dispute; which is what? It is the stage at which it becomes clear that the contenders or parties do not agree on certain issues of interest to them, and that these issues are sufficiently specified in terms of law or legally relevant facts to constitute a legal or justiciable dispute; that which tallies with the PCIJ locus classicus definition in the Mavromatis Palestine Concessions case: “A dispute is a disagreement on a point of law or fact, a conflict of legal views or of interests between two persons”.2 Thus, whether we consider prior negotiations a separate admissibility condition or a constitutive part of the condition of existence of a dispute, some kind of exchange or negotiation between the contenders, be they within a multilateral forum or even by proxy, is a necessary prelude to adjudication. Still, even with a crystallized dispute, the parties, or more usually one of them, may insist on trying to settle it by direct negotiations. However, even in this case, the possibility or threat of going to court, when such a possibility exists (in terms of competent forum and jurisdictional title) will always be lurking at the back of the minds of the negotiators and affecting, whether consciously or not, their strategies and choices. Another current non adjudicative way to settle a dispute once it emerges, is through parliamentary diplomacy, i.e. resort to international organisations 2

 Mavrommatis (Greece v. United Kingdom), Judgment, [1925] P.C.I.J. Reports, Series A, No 2, at 11.

330   Georges Abi-Saab whether universal, regional or sectorial. This is often used by a weak party to circumvent the reluctance of the stronger party “to treat” or negotiate meaningfully (and in the absence of a competent adjudicative forum). But these fora rarely have the constitutional power to go beyond conciliation (a notable exception is the WTO). Often, however, if they fail to reconcile the positions of the parties, they try to channel them towards adjudication. One should mention in this respect Article 36(3) of the UN Charter (“In making recommendations under this Article, the Security Council should also take into consideration that legal disputes should as a general rule be referred by the parties to the ICJ . . .”); though it has been invoked explicitly only once by the Security Council in the very first case brought before the ICJ, the Corfu Channel case. By contrast, in three cases in which I was involved, regional organisations put much pressure on the parties (particularly one of them), to make them sign a compromis to bring the case to the ICJ: the Arab League in the Continental Shelf case (Tunisia/Libya); and the OAU in the Frontier Dispute case (Burkina/Faso Mali) and the Territorial Dispute case (Libya/Chad). B.  During Adjudication Up to now, I have been speaking of complementarity in a chronological sense: negotiations as a necessary prelude or sometimes as a conduit to adjudication. But the two modes can complement each other concurrently; or, rather, adjudication can in turn feed into, and facilitate, negotiations. In the first place, negotiations can, and in practice often do, continue in parallel with adjudication. Secondly, if I may come back to Sir Robert Jennings, in his speech to the General Assembly, introducing the ICJ Report for the first year of his presidency, 1992–1993, he makes the point that the “new busy-ness” (i.e. heavy case load) of the Court can be partly explained by the fact that “the Court procedure is beginning to be seen as a resort to be employed in close relationship with normal diplomatic negotiations”, rather than a “last resort” when all else has failed, i.e. as an alternative to war.3 This awareness that resort to the Court “might usefully be employed at an earlier stage of the dispute” explains, according to Jennings, that during the reported year, two cases were withdrawn and settled out of court, after the parties have totally or partly pleaded them. This is because going to court early on in the dispute helps the parties define their positions. And once they have written their briefs and pleaded their case, they see what are their strong and weak points as well as those of the opposite party, which may bring them closer to an agreement.  Yearbook of the International Court of Justice 1992–1993 (United Nations, 1994), at 251.

3

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Sir Robert concludes that “[w]henever the Court or its procedures can help in this way, the Court is, in an important sense, still productively at work”.4 In other words, funneling the dispute through the Court enhances the chances of reaching an agreed solution. A third way of helping or facilitating negotiations is by suspending judicial or arbitral proceedings to afford the parties more time to reach a successful conclusion, as did the PCIJ in the Free Zones case. Fourthly, the parties may resort to adjudication not in order for the tribunal to resolve their dispute as a whole, but to decide a sticky point in their negotiations, as did Germany, the Netherlands and Denmark in the North Sea Continental Shelf cases in 1969; the decision of the Court serving as a major input in their negotiations. Fifthly, the same can be said of the possibility of requesting an advisory opinion by a competent political organ that is seized of a dispute between two member States, in order to clarify an important legal point at issue in the dispute. Here complementarity is good, so long as each organ knows and sticks to its role; so that the Court does not dabble with the politics of the situation and the political organ does not adulterate the contents of the advisory opinion in using it as an input in its own decision; both of which being varieties of dissonance. But before speaking of dissonance, two words should be said about the post adjudicative stage. C.  At the Post Adjudicative Stage Complementarity continues, in a chronological sense, into the post-adjudicative stage. A judgment or an award, as final and binding on the parties as it is, is rarely self-executing; unless it is merely a declaratory judgment. In most cases, however, there is a return to some kind of negotiations, with a view of implementing the judgment or award ensuing from adjudication. If the adjudication took place within an institutional framework, such as the WTO, it usually comprises a surveillance component, to follow-up the implementation of adjudicative decisions. To continue with the example of the WTO, this is done by the Dispute Settlement Body (DSB), which is a plenary organ, thus surveillance is carried out here collectively, through parliamentary diplomacy. In the absence of institutional surveillance, which is usually the case, the implementation of an international judgment or award requires a minimum of exchange and cooperation between the parties. If one of the parties is recalcitrant and refuses to cooperate and comply, the UN Charter provides, as far as judgments of the ICJ are concerned, that “the other party may have 4

 Ibid.

332   Georges Abi-Saab recourse to the Security Council, which may, if it deems necessary, make recommendations or decide upon measures to be taken to give effect to the judgment” (Article 94/2). But here again, this provision remained a dead letter, and was never invoked or used by the Security Council. Still, even between unequal parties, where the loosing party is the stronger one, it usually ends up seeking or accepting a face-saving device, through direct or indirect negotiations, in the guise of implementation. For once the legalities of the situation are clear, through the judgment, dragging the reputation of law-breaker or law-resister bullying the weak, carries a great nuisance value and constitutes a heavy political price to pay. Even monetary judgments, such as ICSID awards, which may be executed in all States parties to the Convention, are frequently subject to negotiation between the parties, on the basis of the award, but often mitigating that award, as investors (such as oil companies) have often other interests to preserve or promote, apart from monetary compensation.

II.  Dissonance Having made some remarks on complementarities, I would like to conclude by pointing to some potential sources of dissonance. In discussing how ICJ advisory opinions can usefully be used to complement the dispute settlement efforts of political organs, I made the proviso “as long as each organ knows its role and sticks to it without dabbling in the role of the other”. And it is such dabbling in general that causes dissonance. In the first place, sometimes such dissonance arises from the very mandate of the adjudicative body, by interjecting a consultation, negotiation or conciliation phase in the midst of the adjudicative process. For example, in the WTO, the Panel procedures include an “Interim Review Stage”, that precedes the adoption and release by the Panel of its report (Article 15 of the Dispute Settlement Understanding DSU). Another case that was mentioned in earlier discussions as an illustration of a tribunal acting as a conciliator is the Taba arbitration; a case in which I was closely involved. The Compromis provided for a conciliation phase after the oral hearings, to be undertaken by a special chamber composed of three out of the five arbitrators, which included the two national arbitrators, chaired by one of the three non-national arbitrators other than the President of the Tribunal. They were supposed to find a solution to recommend to the parties before the Tribunal decides the case. Why did the parties provide for that? It was because one of them did not want to go to arbitration at all. The peace treaty between Egypt and Israel provides, in Article 7 for “conciliation or arbitration”; and Israel insisted on conciliation. It did not agree to go to

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a­ rbitration except under duress. At that time there was a cohabitation agreement in Israel between the two major political parties: Labour and the Likud, according to which they alternated the premiership between them. Perez was Prime Minister. He absolutely wanted to meet the then Egyptian President Mubarak before leaving the Premiership, and Mubarak conditioned the meeting by his signing the compromis, which he did at the meeting two days before he left the post. The conciliation stage was a face-saving compromise. But it was a false compromise, because the conciliation chamber could not give any recommendation unless it was unanimously adopted by its three members; which gave each of the national arbitrators a veto, thus rendering the whole phase irrelevant. And indeed, the Chamber did not give any recommendation. Such peculiarities, not to say defectuosities, cannot be helped, though they can be mitigated by judges and arbitrators; for they result from the political pressures that are brought to bear on the drafting of the statutes or the compromis establishing the adjudicative organ or conferring jurisdiction on it. But even in the absence of such external constraints, dissonance ensues sometimes during the process or in the outcome of adjudication from the adjudicators’ own doings, as a result of a muddled understanding of their role and its limits. Thus, judges or arbitrators occasionally go beyond their mandate and try, while sitting as judges, to reconcile the positions of the parties and act as an intermediary between them. Needless to say, this is an aberration because, at least in the perception of the parties, the judge is no longer a judge. For this quality is not a mere gown that he can take off one day to act as a mediator, then put it on the following day and resume his function as a judge in the same case. Once he ceases to act as a judge, he is no longer seen as one. The Bench should avoid dabbling with the negotiations themselves, unless constrained to do so by its mandate, as in the Taba case. But of course, this does not mean that it should not facilitate negotiations in the different ways described above; as long as it does not get involved in them itself. The second type of potential dissonance relates to the outcome of the adjudicative process, the award or judgment itself. This happens when the tribunal dispenses what I call “transactional justice”, trying to satisfy both or all parties by cutting legal corners, rather than acting as a court of law, or as an organ of the international legal order. This kind of Solomonic justice can be understood where equity or equitable principles are part of the applicable law, as in maritime delimitations, but not elsewhere, particularly where there is a public or community interest. In sum, adjudication and negotiations can and do usefully complement each other, provided they are not mixed-up.

Concluding Observations Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales The chapters in this volume suggest that judicial means seldom evolve in isolation from diplomatic means. More often than not, judicial means are only a component of a broader dispute settlement process, punctuated by the use of various diplomatic means. Blending these two sets of dispute settlement means is, however, a delicate exercise. Importantly, any attempt at drawing general conclusions from the foregoing chapters must take into account, at a minimum, particular relevant rules that are applied in most circumstances, the specificities of different areas of international law as well as, more generally, issues of timing and compatibility between the means selected. In those areas of international law where the dispute has a predominantly inter-State or, to borrow the terminology of contract law, a ‘synallagmatic’ nature, synergies between diplomatic and judicial means can be expected to be less difficult. This is because the parties to the dispute are equal in nature (i.e. sovereign States) and are negotiating or litigating their own direct interests, even when the interests of their nationals may also be at stake. This point has been explored in the series of chapters devoted to disputes before the ICJ. The phenomenon, however, is not exclusive to inter-State disputes. Although in investment disputes interests may be diffused and belong to a variety of stakeholders, the parties to such disputes are transacting or litigating their own interests. Even in those cases where an investor’s home State decides to espouse the claim of its national, the configuration of interests remains relatively polarised, in that the investor and the home State will, as a rule, pursue a similar interest. A more complex configuration is present in trade disputes where, despite the inter-State nature of dispute settlement processes, the underlying interests are often those of the domestic industry of each State. Yet, in the trade context, the circumstances of the dispute may be such that the interests are not sufficiently aligned, for example because two or more different industries within the same State have different interests and, as a result, favour different outcomes. When the disconnection between the interests of the parties to a dispute and those of other stakeholders becomes significant, the combination of

336   Laurence Boisson de Chazournes, Marcelo G. Kohen and Jorge E. Viñuales ­ iplomatic and judicial means tends to be more difficult. In the areas of interd national criminal law and human rights, the parties pursuing judicial means are often different from those pursuing diplomatic means. By way of illustration, the plaintiffs in human rights proceedings may not want to see a dispute settled politically at the inter-State level, with or without the plaintiffs’ participation. In a similar vein, the victims of international crimes or the prosecutor of an international criminal court/tribunal may consider the intervention of the UN Security Council as a political disruption or, more generally, oppose the granting of certain political concessions (e.g. amnesties) in inter-State negotiations to end a conflict. Conversely, the conduct of negotiations may be disrupted by what diplomats may see as judicial interference. Thus, the configurations of interests most often present in different types of international disputes do have a bearing on the conflicting/synergistic interaction between diplomatic and judicial means. In addition, questions of timing and the political circumstances of each dispute will, of course, influence the operation of dispute settlement means. However, the assessment of such questions requires fine-grained analysis and can hardly be conducted in the abstract. In many circumstances, specific rules applicable to the dispute require exhaustion of diplomatic means before referring it to adjudication. Leaving aside these circumstances, and at a general level, the main conclusion one must gather from the chapters of this volume is that timing is indeed an issue. In some contexts, such as post-armed conflict situations, judicial means may become suitable only after some degree of stability has been achieved through diplomatic means. In other contexts, judicial means appear to be the only possible means to bring the parties together on a common discussion basis, provided that a jurisdictional link exists. Still, in some other contexts, the two sets of means may run in parallel, whether they are formally or informally connected. To a certain extent, the question of timing seems to be linked to the lesser degree of flexibility (or higher rigidity) inherent in judicial means, which suppose the intervention of a third-party taking a binding decision in accordance with international law. Yet, this should not be overemphasised. Once established, judicial proceedings present a discursive component that allows enough flexibility for diplomatic means to be concurrently pursued by the parties or even ‘facilitated’ by the judicial instance itself. It suffices to recall the well-known perception of the Permanent Court of International Justice’s own task, according to which “the judicial settlement of international disputes, with a view to which the Court has been established, is simply an alternative to the direct and friendly settlement of such disputes between the Parties; as consequently it is for the Court to facilitate, so far as is compatible with its Statute, such direct and friendly

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settlement”.1 The ICJ provides many examples, at times ‘suggesting’ that certain diplomatic actions be undertaken by the parties; while arbitral tribunals also do so, not least by indirectly paving the way for ADR by making the parties more aware of the costs of adjudication as well as of the possible outcomes of their dispute. That being said, the degree of formality still necessary to establish or have recourse to available judicial means may explain why reliance on diplomatic methods exclusively is very frequent. From this perspective, judicial means could be seen as a module to be incorporated or not into the overall dispute settlement process according to the specific needs of the parties. In other words, rather than a substitute, judicial means would be seen as a potentially useful “ingredient”, and an increasingly frequent one, if one takes into account the proliferation of international adjudication in the last two decades. The question that arises then is what the impact of such proliferation will be in the future. From a historically marginal role, to an increasingly important element of dispute settlement processes, to – perhaps in the future – the key component of international dispute settlement, international adjudication is likely to set the pace of the interactions between diplomatic and judicial means. Seen in light of the already widespread use of diplomatic means, the prospect of a more frequent recourse to judicial means hints that the interaction between these two means could eventually go beyond the synergistic/conflicting relationship mapped in the present volume. In other words, the question arises as to whether the very features of what we consider the ‘common’ functioning patterns of both means will eventually change. We hope that this volume will help to stimulate research into this and other questions.

 Free Zones of the Upper Savoy and the Gex District (France v. Switzerland), Order of 19 August 1929, [1929] P.C.I.J. Series A No 22, at 13.

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