Hague Yearbook of International Law / Annuaire de la Haye de Droit International, Vol. 25 (2012) : Hague Yearbook of International Law / Annuaire de la Haye de Droit International [1 ed.] 9789004258808, 9789004258792

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hague yearbook of international law * * * annuaire de la haye de droit international

This yearbook is produced by the Association of Attendees and Alumni of the Hague Academy of International Law Cet annuaire est produit pas l’Assocation des auditeurs et anciens auditeurs de l’Académie de droit international de La Haye. Established /fondée 1923

The Board of the Association of Attendees and Alumni of the Hague Academy of International Law 2012 Secretary General | Mr. Dr. Maurice Kamga, L.L.M. Vice Secretary General | Ms. Eerke (H.S.E.) Steller Secretary | Ms. Susan M.K. van Haeringen Summer Assistants | Ms. Kathleen Theunis and ms. Fransijn Bulhof Administrative Assistant | Ms. Susan M.K. van Haeringen Official Seat | Peace Palace, Carnegieplein 2, 2517 KJ The Hague, The Netherlands P.O. Box 82108, NL-2508 EC, The Hague Bank account | 430609531 ABNAMRO Bank, The Hague Email address | [email protected] Website | www.aaahail.org

The Editorial Board of the Hague Yearbook of International Law 2012 Editor-in-Chief | Mr. Dr. Nikos Lavranos, LL.M. Vice-Editor-in-Chief | Ms. Dr. Ruth A. Kok, LL.M. Editorial Board Member | Ms. Dr. Hege Elisabeth Kjos, J.D. Editorial Board Member | Ms. Frederike E.M. Stikkelbroeck, LL.M. Editorial Board Member | Mr. Dr. Jure Vidmar, LL.M. Editorial Associate | Ms. Marianne Lamour, LL.M. Editorial Assistant | Ms. Emily S. Lewis Email address | [email protected] Website | http://hagueyearbook.weebly.com

Advisory Board / Comité Consulatitif Serge Brammertz | Prosecutor of the International Criminal Tribunal for the Former Yugoslavia (ICTY) Jacomijn J. van Haersolte-van Hof | Advocate (advocaat) at HaersolteHof and arbitrator (The Netherlands) Peter Hilpold | University Professor at Innsbruck University (Austria) Bruno Simma | Judge at the International Court of Justice (ICJ) The Hague Yearbook of International is a continuation of the Yearbook of the Hague Academy Association of which the last issue is Volume 54/55/56 covering the years 1984/ 1985/1986.

L’ Annuaire de la Haye de Droit International est une continuation de l’Annuaire de l’Association, dont le dernier tome est le Volume 54/55/55 relatif aux années 1984/1985/1986.

HAGUE YEARBOOK OF INTERNATIONAL LAW

ANNUAIRE DE LA HAYE DE DROIT INTERNATIONAL

edited by

Nikos Lavranos, Ruth Kok et al.

2012

VOLUME 25

LEIDEN | BOSTON 2013

issn 0167-6660 isbn 978-90-04-25879-2 (hardback) isbn 978-90-04-25880-8 (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.

Table of Contents

Editorial Note du Secrétaire général de l’AAA | Association of Attendees and Alumni of the Hague Academy of International Law – Secretary General’s Note

vii

xi

Private International Law

1

1

Private International Law sans frontières Chris Thomale

3

2

Hague Conference on Private International Law—Work in 2012 Micah R. Thorner and Kay Jagath Rommerts

3

Reflections on the Hague Conference on Private International Law at 140—20 Years Forward Peter D. Trooboff and Frederike E.M. Stikkelbroeck

International Criminal Law 4

Security Council Referrals to the ICC and EU Fundamental Rights: A Test for ECJ’s Stance in Kadi I Mihail Vatsov

21

59

77

79

Public International Law

105

5

107

Declaratory Judgments of the International Court of Justice Juliette McIntyre

vi

Table of Contents

6

7

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be? Nuwan Peiris Le gel des avoirs d’une banque centrale étrangère comme réaction décentralisée à un fait internationalement illicite : rétorsion ou contre-mesure? Emanuel Castellarin

159

173

International Investment Law and Arbitration

199

8

The Neer Rumour Heather L. Bray

201

9

The Permanent Court of Arbitration in 2012 Yanying Li and Camille M. Ng

221

10

Fostering Stability and Confidence in the Financial Markets— A Global Affair: P.R.I.M.E. Finance Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

About the Editorial Board

237

251

Editorial

This year’s volume of the Hague Yearbook of International Law is a very festive one as it is the 25th volume, which is indeed a very respected and mature age for a law journal. This Editorial Board, which has been working on the Hague Yearbook of International Law since the 2010 issue, is proud to see that the modernisation initiated since then has been very fruitful and positively received. Indeed, the numbers of sold copies has not only been stabilised, but even increased in the past years, which is additional proof of the fact that the Hague Yearbook of International Law is highly valued and considered to be an important law journal that is read worldwide. The Editorial Board is particularly grateful to the constant and active support by Lindy Melman of our publisher BRILL/Martinus Nijhoff. As in previous years, we constantly strive to improve the quality of the Yearbook in line with the mission statement, which is to aim to “present the newest developments in international law as they are shaped by the numerous international institutions based in The Hague.” The mission statement goes on by emphasising the special nexus of the Yearbook with the city of The Hague by stating that “[i]n view of the various international institutions that are situated in The Hague, the scope of the Hague Yearbook of International Law is very broad, covering public international law, private international law, international criminal law, international investment law & arbitration as well as relevant European law.” Accordingly, we are particularly pleased that two Hague-based international institutions have contributed to the Yearbook by presenting an overview of their activities. The first is the Permanent Court of Arbitration (PCA), which was established in 1899 and thus is one of the oldest international institutions in The Hague. The PCA has been administering a large number of disputes between states, but also increasingly between investors and states by way of arbitration. The second is P.R.I.M.E. Finance, which was only established in 2012 and thus is probably the youngest international institution in The Hague. P.R.I.M.E. (Panel of Recognised International Market Experts) in Finance has been set up to assist

viii

Nikos Lavranos

judicial systems in the settlement of disputes on complex financial transactions, thereby responding to an increasing need to resolve such matters more effectively. The Editorial Board hopes that both institutions will from now on provide an update of their activities to the Yearbook every year, thereby making them permanently part of the broad range of international institutions that feature every year in the Yearbook. This corresponds to another central mission of the Yearbook, which is to provide “a forum for practitioners that are working at the international institutions as well as scholars to present their views on the trends and practice of international law. In particular, the Hague Yearbook of International Law welcomes submissions from young practitioners and scholars from around the world.” Accordingly, this year’s issue starts with the private international law section featuring Chris Thomale’s article arguing that the traditionally existing borders of private international law are becoming increasingly vague, due to the transnational setting in which it operates. This is followed by the yearly update of the work of the Hague Conference on Private International Law written by Micah Thorner and Kay Jagath Rommerts. The private international law section concludes with the contribution by Frederike Stikkelbroeck, Member of our Editorial Board, together with Peter Trooboff, in which they reflect on the Hague Conference on Private international Law at 140 – 20 Years Forward. In the international criminal law section, Mihail Vatsov discusses the novel links and possible impact of UN Security Council referrals to the ICC on the particularly strong fundamental rights-oriented jurisprudence of the ECJ, as espoused in the seminal Kadi I judgment. The public international law section covers a wide variety of very different topics. Juliette McIntyre reviews the role and function of declaratory judgments of the ICJ, which have undergone significant changes in the past decade. The question of what role and function a certain remedy of an international court should have is also discussed by Nuwan Peiris, but in the context of provisional measures issued by ITLOS. Subsequently, Emanuel Castellarin takes us to the intricate issue of immunity of foreign central banks and the question to what extent the practice of freezing assets could be considered a wrongful act. Heather Bray opens the international investment law & arbitration section by challenging the significance of the Neer v. Mexico decision of 1926, which over time has become one of the cases most often referred to as reflecting the minimum standard of treatment of aliens. Yanying Li and Camille Ng give us a detailed overview of the activities of the PCA in the past year. Finally, Gerard Meijer, first Secretary General of P.R.I.M.E. Finance, together with Camilla Perera-de Wit, describe the organisation, tasks and functions of the newly established P.R.I.M.E. Finance. We hope that the reader finds this year’s issue at least as interesting as those of the past 25 years. The Editorial Board will carry on striving to put together interesting volumes of the Hague Yearbook of International Law that cover all areas of international law

Editorial

and are open to all scholars and practitioner’s worldwide. In order to be able to continue to achieve this, we invite submissions of unpublished material. All submissions should be send by 1st March 2014 to [email protected]. A Call for Papers with all relevant information will be published on our website: http://hagueyearbook.weebly.com/ Nikos Lavranos Editor-in-Chief

ix

Note du Secrétaire général de l’AAA Note from the Secretary General of the AAA

Chers lecteurs, chères lectrices,

Dear readers,

Vous avez entre les mains l’édition 2012 de l’Annuaire de La Haye de droit international. Il s’agit d’une revue scientifique dont la qualité et le prestige ne sont plus à démontrer. L’Annuaire a été mis sur pied par l’Association des auditeurs et anciens auditeurs de l’Académie de droit international de La Haye (communément appelée «AAA»), aux fins de permettre aux théoriciens et praticiens du droit international de publier et d’échanger des connaissances ayant trait aux évolutions récentes du droit international, et notamment du droit ayant un lien quelconque avec La Haye, capitale mondiale du droit international. Précisons d’ailleurs que la ville commémore en cette année 2013 le centenaire du Palais de la Paix, qui abrite la Cour internationale de Justice, la Cour permanente d’arbitrage et l’Académie de droit international. Il s’agit donc d’un millésime spécial pour la communauté de juristes qui a un quelconque lien avec ledit Palais. Par ailleurs, le présent annuaire est le vingt-cinquième volume de l’organe d’expression scientifique de l’AAA.

Please find herewith the 2012 edition of the Hague Yearbook of International Law. This academic publication, the quality and prestige of which is now firmly established, was created by the Association of Attendees and Alumni of The Hague Academy of International Law (commonly referred to as the «AAA») with the aim of providing a forum for scholars and practitioners in the field of international law to present and exchange their views on recent developments in international law, in particular any such developments with a connection to The Hague, legal capital of the world. It should further be noted that this year, 2012, The Hague is commemorating the centenary of the Peace Palace, the seat of the International Court of Justice, the Permanent Court of Arbitration and the Academy of International Law. It is thus a special year for the community of jurists who have any link with the abovementioned Palace. Furthermore, the present yearbook has now reached its twenty-fifth volume. We are very proud of this achieve-

xii

Dr. Maurice K. Kamga

Nous ne pouvons qu’en être fiers et remercier tous ceux qui ont contribué à la pérennité de cette publication qui contient des articles rédigés par des personnes qui ont eu l’honneur et le privilège de suivre au moins une session de cours d’été ou de participer à d’autres programmes de l’Académie, à savoir le Centre d’études et de recherche en droit international et relations internationales, le cours de perfectionnement en droit international ou les programmes extérieurs. Les contributions à l’Annuaire sont également ouvertes à tous juristes internationalistes qui souhaiterait participer à la diffusion de la connaissance en matière de droit international public, de droit international privé et du droit des investissements et de l’arbitrage. Ayant créé des liens solides pendant leur séjour à La Haye, notamment à travers de nombreuses activités socioculturelles et la visite de nombreuses institutions ayant leur siège à La Haye, les membres de l’AAA sont donc vivement encouragés à conserver ce lien avec l’Académie par le truchement de cet Annuaire. IIs sont si nombreux, de par le monde, à exceller dans de nombreuses professions qui font appel à leur expertise en droit international : cet Annuaire leur est ouvert et ils peuvent y publier des articles aussi bien en anglais qu’en français. Les nouvelles équipes managériale et éditoriale de l’AAA et de l’Annuaire, respectivement, sont heureuses de l’évolution positive qui s’est enclenchée il y a deux ans. C’est sous leur responsabilité qu’a été publié le volume 2010 de l’Annuaire. Nous ne pouvons que féliciter le rédacteur-

ment and take this occasion to thank everyone who contributed to the durability of this publication which on occasion contains articles from people who have had the honour and privilege of following at least one Summer course or have participated in other Academy programmes, such as the Centre for Studies and Research in International Law and International Relations, the Seminar for Advanced Studies in International Law or the External Programmes. Naturally, the Yearbook welcomes submissions from all or any international lawyers who wish to participate in the diffusion of knowledge in the field of public international law, private international law, investment law and law of arbitration. After having made and solidified contacts during their stint in The Hague, especially through many sociocultural activities and visits to a good number of institutions headquartered in The Hague, the members of the AAA are very keen to keep close ties with the Academy; there is such a wealth of alumni throughout the world, who excell in many professions where their expertise in international law is extremely useful. The new management of the AAA and the editorial board of the Yearbook are delighted with the positive evolution of the Yearbook, which started two years ago; it was under this new leadership that Volume 2010 of the Yearbook was published. We congratulate the Editor-in-Chief, Dr. Nikos Lavranos, and his Vice Editor-in-Chief, Dr. Ruth Kok, for the excellent results achieved. With the assistance of the Deputy Secretary General, Ms Sophie

Note du Secrétaire général | Secretary General’s Note

en-chef, M. Nikos Lavranos, et son adjointe, Mme Ruth A. Kok, pour l’excellent travail qu’ils ont réalisé. Avec la vice-secrétaire générale, Mlle Sophie Brinkel, et notre secrétaire, Mme Susan van Haeringen, nous tâcherons de continuer l’œuvre, ô combien exaltante, de relance et de redynamisation de l’Association. Nous pourrons compter à cette fin sur le précieux support des responsables de l’Académie, en l’occurrence le Secrétaire général, le professeur Yves Daudet, et le Trésorier, M. Van Hoogstraten. La contribution de tous les anciens de l’Académie est la bienvenue pour une telle entreprise. Nous espérons pouvoir compter sur vous tous! Pour toute information complémentaire sur l’Association, voir le site Internet suivant : www.aaahail.org.

Brinkel, and our administrative assistant, Ms Susan van Haeringen, we are looking forward to carrying on the good work and to focusing our energy on the exalted task of revitalising the Association. We know that we can count on the precious support of those overseeing the activities of the Academy, namely the Secretary General, Prof. Yves Daudet, and the Treasurer, Mr. Van Hoogstraten. For the success of this initiative, the participation of alumni of the Academy is most appreciated. We hope to be able to count on your support! For any further information on the Association, please refer to the following website : www.aaahail.org.

Bonne lecture.

Enjoy reading!

Dr. Maurice K. Kamga Secrétaire général de l’AAA Juriste à la Cour internationale de Justice

Dr. Maurice Kamga Secretary-General of the AAA Legal Officer, International Court of Justice

xiii

Private International Law

͕

Private International Law sans frontières Chris Thomale*

Abstract Modern developments of Private International Law in and outside Europe raise two fundamental questions at the same time. On a doctrinal level, the traditional, formal modus operandi of choice of law rules as established by Friedrich Carl von Savigny seems to be overridden by external influences like substantial justice and human rights. This nourishes the suspicion of an underlying political re-nationalisation of Private International Law. The article argues for the middle-ground position that, while the successive materialisation of Private International Law should be admitted, this process takes place in an increasingly transnational setting. Qu’est devenue la ‘communauté de droit entre États’? Définie dans le sens savignien, elle a tout simplement disparu depuis fort longtemps. Du moment que l’on admet que les rapports de droit répondent à certains objectifs et que ceux-ci tendent à ne pas être les mêmes pour les différents États, on ne saurait affirmer l’existence, a priori, d’une unité international des solutions et en faire d’emblée le fondement des règles de conflit [de lois et de juridictions] comme le postule la doctrine savignienne.1

*

Dr. jur.; Junior Lecturer and assistant of Prof. Dr. Marc-Philippe Weller at the University of Freiburg, Germany. The article is based on an essay for which I was awarded the Diploma cum laude by the Hague Academy of International Law during the Private Law Session 2011. Whereas references have been added for publication, both, structure and text of the original have essentially remained unchanged.

1

What has become of the ‘Community of Law between States’? Defined in a Savignyan manner, it has quite simply disappeared for a long time. As soon as one admits that legal relations respond to certain objectives and that these tend not to be the same for different states, one cannot affirm the existence, a priori, of an international unity of solutions and make it the foundation of rules of conflict [of laws and jurisdictions] as is proposed by Savignyan teaching.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͙ – Chris Thomale

͕

Introduction

In the outlined quotation, Professor Bucher exclusively refers to what the Community of Law between states is not. In the following, the main proposition shall be argued that the decisive and characteristic feature of modern Private International Law is to be seen in a shift from inter-nationalism towards trans-nationalism. As Georges Scelle and Amartya Sen have pointed out, modern societies do not follow conventional, national borders but have regrouped and reallocated themselves along transnational lines, such as profession and political inclination.2 It is submitted that this societal development has not left Private International Law unaffected but instead has influenced it both in its practical application— which shall be called the normative aspect—and in its doctrinal evolution, which shall be referred to as the disciplinary aspect. Beforehand, however, Bucher’s antithesis shall be considered.

͖

Antithesis: national particularism and doctrinal fragmentation of Private International Law

The reconstruction of the Savignyan method Bucher gave in his General Course in 2009 can be summed up as follows: The German jurist Friedrich Carl von Savigny sees choice of law rules as working mechanically and neutrally with regard to the substantial law whose application they lead to.3 For each legal relationship a seat is being determined, leading to the national legal order, to which the relationship is most closely connected. Bucher’s reconstruction is by and large convincing and can systematically be backed up by the fact that, in volume VIII of the System des heutigen Römischen Rechts, Savigny offers a composite account of interlocal and intertemporal conflicts of laws, thereby neutrally determining the substantial laws’ scope both in space and time.4 Seen from a historical perspective, Savigny endorses herein an adjusted version of Immanuel Kant’s categorical and legal imperative: A formal and thus neutral allocating scheme.5 Yet, this neutral system is grounded on the tacit assumption that individual spheres of freedom in a given society are guaranteed, which Savigny takes for

A. Bucher, La dimension sociale du droit international privé (Martinus Nijhoff, The Hague, 2011) p. 47.

2 3 4 5

G. Scelle, Précis de droit des gens: principes et systématique (Sirey, Paris, 1932) pp. 27 et seq.; A. Sen, Identity and Violence. The Illusion of Destiny (Penguin, London, 2007) p. 149 et seq. Bucher, supra note 1, pp. 42 et seq. F. C. von Savigny, System des heutigen Römischen Rechts, Vol. VIII (Veit und Comp., Berlin, 1849). On general aspects of Kantian influence on private international law, see: G. P. Romano, ‘Le droit international privé à l’épreuve de la théorie kantienne de la justice’, 139:1 Journal du Droit International (2012) pp. 59 et seq.

Private International Law sans frontières

granted in every legal system.6 According to Savigny, this commonly shared assumption of the prevalence of individual freedom constitutes the Community of Law between States. It is exactly at this point that Bucher begs to differ. Bucher recognises, at least as a complimentary feature, not only the negative freedom of human beings, i.e. freedom from interference, but also acknowledges the positive freedom to choose, as John Stuart Mill and Isaiah Berlin have prominently done before him.7 Freedom, according to Bucher, is not a task of passive indifference but rather of active protection. Bucher sees this protection bestowed by the various nation states according to national policies. It is for this reason that Bucher concludes, as cited, that the Savignyan Community of Law between States has faded away if one ever existed at all. This shall now be considered in light of current Private International Law.

͖.͕ ͖.͕.͕

National particularism at Private International Law Conflict of law rules

The crucial notion of conflict of law rules, where national particularism is given force, is the public policy ‘exception’. In its two facets of negative and positive public policy, the latter of which is commonly referred to as ‘mandatory norms’, it allegedly provides a means of vindicating national policy decisions against the intrusion of foreign law. Even in a system of mutual trust such as that of the European Union,8 this trust does not remove the need to maintain this exception, as recent decisions of the European Court of Justice (ECJ) such as Sayn-Wittgenstein9 and the Rome I,10 II,11 III12 Regulations also prove. Furthermore, Bucher argues that

6 7

8

9 10 11 12

Cf. H. E. Yntema, ‘The Historic Bases of Private International Law’, 2 American Journal of Comparative Law (1953) pp. 309 et seq. This is how Bucher’s reference to human rights’ influence on the conflict of law ought to be read, cf. Bucher, supra note 1, pp. 74 et seq. See also J. S. Mill, On Liberty (Longman, Roberts & Green, London, 1859); I. Berlin, Two Concepts of Liberty (Clarendon Press, Oxford, 1958). For an overview on this topic see A.K. Kaufhold, ‘Gegenseitiges Vertrauen. Wirksamkeitsbedingung und Rechtsprinzip der justiziellen Zusammenarbeit im Raum der Freiheit, der Sicherheit und des Rechts’, 47:4 Europarecht (2012) pp. 408-432. ECJ, Case C-208/09 Ilonka Sayn-Wittgenstein v. Landeshauptmann von Wien [2010] ECR I-13693. Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, OJ L 177/6, 4 July 2008. Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the Law Applicable to Non-Contractual obligations, OJ L 199/40, 31 July 2007. Council Regulation (EU) No 1259/2010 of 20 December 2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation, OJ L 343/10, 29 December 2010.

͙ – Chris Thomale

this exception reappears—in a ‘disguised’ way—within choice of law rules. This is, historically, because one can trace certain bilateral choice of law rules back to unilateral rules which, for their part, can be traced back to public policy. Articles 6 and 8 of the Rome I Regulation providing national protection for consumers and workers are uncontested examples of this. Additionally, rules like Articles 4 and 5 of the Rome I Regulation can be reduced to the main goal of assuring that an exporting seller or provider of services only has to comply with one legal order—at least this rationale is by far more convincing than the classical fiction of a ‘neutral’ allocating scheme. The same applies to Article 4 para. 1 Rome II Regulation in the field of torts, in which residents are protected to the effect that their home law is applicable if they have suffered harm there. The act of characterisation can also be quoted in Bucher’s favour. Characterisation, as far as the received view goes, is generally done along national concepts of the lex fori. As Adrian Briggs states in his textbook, national law defines the ‘pigeonholes’ where foreign law is allowed to enter.13 From this point of view nothing seems more national than national conflict of law rules, as is also prominently upheld by Klaus Schurig.14 Recent European legislation may also be advanced. The Rome III Regulation contains Article 13, for example, according to which courts of a State whose system is unaware of the institution of divorce are not forced to apply it via the Regulation. Similarly, according to the judgement in Cartesio, each Member State has full power to take away legal personality if the real seat of a company is shifted outside its territory.15 Here, the Nation State prevails, contrary to the unifying spirit of Rome III and the free movement of establishment according to Articles 49 and 54 TFEU. The Regulation on Insolvency Proceedings bears that very same tension by allowing secondary insolvency proceedings according to Article 27 et seq. alongside the main proceedings at the Centre of Main Interest (cf. Article 3), under the condition that there are assets situated in a Member State.16 Finally, the common law approach of the United States tends to analyse directly and jointly the possibly applicable substantial laws at hand according to their policy content, which may be illustrated by the classic New York Court of Appeals decisions of Babcock v. Jackson17 and Neumeier v. Kuchner.18 Within the field of con-

13 14

15 16 17 18

A. Briggs, The Conflict of Laws, (2nd edn, Oxford University Press, Oxford, 2008) p. 9. K. Schurig, Kollisionsnorm und Sachrecht (Duncker & Humblot, Berlin, 1981) pp. 102, 210 et seq. See also regarding the German law of unjust enrichment: C. Thomale, Leistung als Freiheit (Mohr Siebeck, Tübingen, 2012) p. 252. ECJ, Case C-210/06 Cartesio [2008] ECR I-09641. Council Regulation (EC) No 1346/2000 of 29 May 2000, OJ L 16/1, 30 June 2001. New York Court of Appeals, Babcock v. Jackson, 12 NY2d 473, 9 May 1963. New York Court of Appeals, Neumeier v. Kuchner, 31 NY2d 121, 7 July 1972.

Private International Law sans frontières

flicts of law rules, it seems to follow that nothing is more present than national policy considerations, despite and opposite to the received Savignyan picture.

͖.͕.͖

Procedural aspects of Private International Law

The predominance of national borderlines can just as well be argued as far as procedural Private International Law is concerned. In the area of international jurisdiction, for example, one widely accepted view is that whereas civil law systems, especially within the European Union, tend to make modest use of their public law jurisdiction to adjudicate on private matters, the United States tend to excessively avail itself of it. In support of this view, reference is usually made firstly to the infamous tag jurisdiction regarding natural persons, as shown in the Burnham case.19 Secondly, the wide notion of minimum activity or conduct and the ancillary theories of stream of commerce as provided in International Shoes20 and Asahi 21 can be invoked. Thirdly and finally, statutes like the U.S. Foreign States Immunity Act (1976) and the Alien Torts Claims Act (1789) trigger exorbitant jurisdiction. The reason for this is that even though these statutes do not regulate international/personal jurisdiction head on, in their application, jurisdiction is usually deemed by United States courts to be implied, as can be seen, for instance, in the Altmann case.22 International jurisdiction in the United States is also not regarded as the apt playing field for consumer protection. Here, a former Universal Commercial Code was rejected by the States, which is why the current Universal Commercial Code of 2008 does not provide for adequate consumer protection anymore, as the decision Carnival Cruise Lines v. Shute demonstrates.23 Articles 17 and 23 of Brussels I Regulation provide for an extensive protection of the consumer, who can only be sued in his or her place of residence, but at the same time can sue the other party both at this and at the latter’s seat, as he or she wishes.24 This provision is not even open to autonomous adjustment via choice of court agreements. When it comes down to the conciliation of multiple jurisdictions, the United States and also, traditionally speaking, the English common law adhere to the notion of forum non

19 20 21 22 23 24

US Supreme Court, Burnham v. Superior Court of California, 495 U.S. 604, 29 May 1990. US Supreme Court, International Shoe Co. v. Washington, 326 U.S. 310, 3 December 1945. US Supreme Court, Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 24 February 1987. US Supreme Court, Republic of Austria v. Altmann, 541 U.S. 677, 7 June 2004. US Supreme Court, Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 17 April 1991. Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12/1, 16 January 2001.

͙ – Chris Thomale

conveniens, having notably been clarified in the decisions of Piper v. Reyno25 and Union Carbide.26 It allows a defendant to advance a motion against the assumption of jurisdiction by the seized court, upon which the latter can declare itself incompetent to adjudicate and remit the claimant to the natural, i.e. the more apt, court. Conversely, although the latest EU legislation does invoke the notion of forum non conveniens in Article 15 of Brussels II bis Regulation27 and in Article 6 of the Regulation on Successions,28 in general it clings to the idea (l) of lis pendens, as laid down in Article 27 Brussels I Regulation and specified in the eminent ECJ decisions of Owusu,29 Gasser,30 Turner,31 and West Tankers.32 Furthermore, central notions of civil procedure can be deemed to be irreconcilably different between the United States and the EU: Whereas the U.S. system of civil procedure departs from the paradigm of jury trials where all the evidence has to be presented at once and therefore needs to be gathered in pre-trial discovery, continental systems prefer in-trial discovery, allowing evidence to be brought in step by step, both on motions of the parties and in exceptional cases ex officio on motion of the judge. This procedural difference also widely translates into the fact that the pleading and the delivery of proof on foreign law are considered an act to be performed by the managing judge. Consistently, procedural aspects of Private International Law also seem to support Bucher’s view whereupon this area has to be construed along lines and indeed frontiers of national policy and legal tradition. However, not only normative arguments within positive law but also doctrinal developments can be adduced in this respect.

25 26 27

28

29 30 31 32

US Supreme Court, Piper Aircraft Corporation v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 8 December 1981. US Court of Appeals for the Second Circuit, Plaintiffs v. Union Carbide Corporation, 809 F.2d 195 (2d Cir.), 28 December 1982. Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, OJ L 338/1, 23 December 2012. Regulation (EU) No 650/2012 of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, OJ L 201/55, 107, 27 July 2012. ECJ, Case C-281/02 Owusu [2005] ECR I-553. ECJ, Case C-116/02 Gasser [2003] ECR I-14693. ECJ, Case C-159/02 Turner [2004] ECR I-03565. ECJ, Case C-185/07 West Tankers [2009] ECR-I-00663.

Private International Law sans frontières

͖.͖ ͖.͖.͕

Doctrinal fragmentation of Private International Law Personal-historical fragmentation

As Max Gutzwiller emphasised in his General Course of the late 1920s, no area of law can be thought of in which history plays such a decisive role as it does in Private International Law: “En droit international privé, l’histoire est tout.” 33 This being said, it would be surprising if the Bucherian view could not be supported by looking at the historical evolution which the doctrine of Private International Law has undergone. And indeed, it is a feasible perspective on that history to look at it in terms of doctrinal fragmentation along national or at least regional lines. Since a complete survey on this vast topic cannot be given in this article, I shall confine myself to the way in which the notions of comity and vested rights, marking the first patches of international colour amidst the grey in grey of medieval territorialism, have evolved ever since. They were first prominently invoked by Ulricus Huber in his De Conflictu Legum Diversarum in Diversis Imperiis as a free self-restraint of the territorial state, and have since then also been adopted by Joseph Story.34 From then on, the discussion seems to have evolved along national lines: It was Albert Venn Dicey who rejected the notion of comity for the Law of England, as he took it to fall prey to judicial subjectivism. Nonetheless, he accepted the vested rights doctrine, whilst on the continent the German scholar Savigny rejected the concept of vested rights.35 He deemed it a petitio principii: Before being able to determine which rights are vested and which are not, conflict of law rules have to be applied. It follows, that the vested rights doctrine can be fully reduced to the simple operation of conflict of law rules.36 In the United States, after Joseph Henry Beale had referred to both notions,37 Walther Wheeler Cook discarded vested rights and comity altogether by following the tradition of American legal realism and reducing legal doctrine in that field exclusively to national courts’ actual practice.38 In the following, Brainerd Currie did not deem these notions very helpful either in developing his theory of state interest, albeit

33 34 35

36 37

38

M. Gutzwiller, ‘Le développement historique du droit international privé’, in Recueil des cours de l’Academie de la Haye Vol. 29 (Hachette, Paris, 1929), p. 292. U. Huber, De Conflictu Legum Diversarum in Diversis Imperiis (1689). A. V. Dicey, A Digest of the Law of England with reference to the Conflict of Laws, 2nd ed. (Stevens and Sons, London, 1908). For further details and quotes see S. E. Thorne, ‘Sovereignty and the conflict of law’, in S.E. Thorne (ed.), Essays in English Legal History (Hambledon, London, 1985) p. 184. Savigny, supra note 4, pp. 131 et seq. See J. H. Beale, A Treatise on the Conflict of Laws, Vol. 3 (Baker, Voorhis & Co, New York, 1935); American Law Institute, Restatement of the Law: Conflict of Laws (American Law Institute Publishers, St. Paul, Minn., 1934). W. W. Cook, ‘The Logical and Legal Basis of the Conflict of Laws’, 33:5 The Yale Law Journal (1924) pp. 460 et seq.

͙ – Chris Thomale

that this can be seen as an exercise of comity.39 In the new-born Italian state, although it is not evident which view its finest jurist, Pasquale Stanislao Mancini, took on the question of vested rights, it may flow from his general nationalitybased approach that—bearing in mind that he was keen to open national law via this principle40—he probably disapproved of vested rights as much as he did of comity, due to their vagueness and scent of misunderstood deference to the sovereignty of states.41 Hence, not only does positive law seems to be adhering to national borders, but also the personal-historical development of Private International Law doctrine appears to be fragmented in this way. Essentially, the same can be argued regarding its substantial development.

͖.͖.͖

Substantial fragmentation

As the above outlined comparisons show, the essential method, rationale, or technique of United States law and of common law in general allegedly lies in a case by case approach in order to achieve practical justice, whereas continental systems and the European Union both seem to favour the application of clearcut, black letter rules for the sake of legal certainty. This can notably be shown, firstly, in the area of choice of law where, for instance, Article 3 Rome I and Article 14 Rome II Regulation provide such defined rules, whereas the Babcock v. Jackson legacy demands for a balanced assessment of national policies and substantial justice in each case.42 Secondly, the juxtaposition of forum non conveniens at common law on the one hand and lis pendens in the European Union on the other hand contains such an example. However, the case for fragmentation does not come to an end there, as the EU doctrine of Private International Law recently seems to have turned into a house divided in itself as far as so-called new methods of Private International Law have arisen. Dominique Bureau and Horatia Muir Watt provide a compelling analysis of this phenomenon in their textbook.43 According to them, European Private International Law within the area of choice of law has become increasingly polyvalent in its functionality.

39 40

41 42 43

Cf. B. Currie, ‘Notes on Methods and Objectives in the Conflict of Laws’, 2 Duke Law Journal (1959) p. 177: “We would be better off without choice-of-law rules.” See the succinct rephrase by Erik Jayme, Pasquale Stanislao Mancini. Internationales Privatrecht zwischen Risorgimento und praktischer Jurisprudenz (Gremer, Ebelsbach, 1980) p. 41: “Gleichbehandlung durch Beachtung der Unterschiede”. P. S. Mancini, cited in: Jayme, ibid, p. 54. Babcock case, supra note 17. D. Bureau and H. Muir Watt, Droit International Privé, (Vol. 1, 2nd Edn, Presses Universitaires de France, Paris, 2010) pp. 356 et seq.

Private International Law sans frontières

The first phenomenon discerned by these authors is what they consider a so called materialisation. In its essence, this phenomena can be equated with the widely shared Bucherian view already commented upon, that modern Private International Law is inherently coloured by considerations of substantial justice. Secondly, an augmenting degree of relativism can be observed. For example, there is a rising tendency to endorse soft and dynamic connecting factors like habitual residence as opposed to rigid ones like nationality.44 The Rome Regulations support that view. Proximity exceptions like Article 4 para. 3 Rome I Regulation soften the effective connecting factors even more, proving—in Bucher’s reading—yet another loophole for what in essence are policy considerations.45 Moreover, multiple or alternative connecting factors are recognised. These multiple connecting factors appear in two modes: On the one hand, they appear as an approximation of proximity, like the so-called ‘Kegelian ladder,’ where the cascade of connecting factors by and large still adheres to the Savignyan neutrality of conflict of law rules.46 On the other hand—and more remarkably—multiple connecting factors are also used on an openly result-oriented basis, when national conflict rules use applicable substantial laws in order to achieve or lean towards a certain result.47 Common phenomena are, for instance, favor negotii, favor testamenti and favor alimenti, where alternative laws are applied until the contract or the testament can be deemed formally valid, or the claimant can be granted an action for maintenance. This is the area where the Bucherian analysis seems most convincing because here it becomes obvious that the series of subsidiary connecting factors have nothing in common with the neutral, mechanical operation of choice of law rules, but rather with a disguised decision of national policy to favour a certain result of that procedure.

44

45 46

47

Examples are legion. Consider, for instance, Article 21 of the Regulation on Successions, supra note 28. It therefore runs with the academic tide to advance a flexible, subjective reading of habitual residence itself as a connecting factor. See Marc-Philippe Weller as reported by C. Thomale, ‘Quale “parte general” per il diritto internazionale privato dell’Unione europa’ at , visited on 6 January 2013. Also: E. Jayme, Zugehörigkeit und kulturelle Identität (Wallstein Verlag, Göttingen) pp. 32 et seq. Bucher, supra note 1, pp. 76 et seq. Cf. J. Kropholler, Internationales Privatrecht, 6th ed. (Mohr Siebeck, Tübingen, 2006) p. 347 in note 8. At the European level, Article 8 Rome III Regulation and Article 17 of the Proposal for a Council Regulation on jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes (COM126 final, 16 March 2011) exemplify this principle. Cf. S. C. Symeonides, ‘Material justice and conflicts justice in choice of law’, in P. Bordeers and J. Zekoll (eds.), International Conflict of Laws for the Third Millennium (Martinus Nijhoff, Leiden/New York, 2000) pp. 125 et seq.

͙ – Chris Thomale

A further mechanism is imposed on EU conflict of law rules by Articles 20, 49 and 54 TFEU on European citizenship and the freedom of establishment, commonly referred to as ‘recognition of legal situations’. In the area of legal persons, inter alia the Centros,48 Überseering,49 and Inspire Art 50 cases have put forward the idea that even though the conflict of law rules on corporate law have not been harmonised on the EU level, every receiving Member State has to recognise a corporation duly established in another Member State. To quite a similar effect the ECJ judgements in Garcia Avello51 and Grunkin & Paul have led to the fact that natural persons, regardless of what conflict of law rules say, enjoy recognition of their name and other personal properties in all Member States.52 Finally, increasing constitutionalisation of Private International Law puts yet another layer on the intricate ensemble of conflict of law rules. The German Federal Constitutional Court, for example, held several provisions of German Private International Law unconstitutional because they were deemed discriminatory or in defiance of the freedom to divorce.53 This shows once again the gist of the Bucherian view: Private International Law is not neutral and universal but—both in its application and in its doctrinal foundations—so nationally particularistic and fragmented that today the Savignyan method might be labelled a mere façon de parler; a reminiscence of a past long bygone.

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Thesis: Transnational universalism and doctrinal convergence in Private International Law Transnational universalism in Private International Law

Although it is submitted that the Bucherian case is perfectly sustainable considering the omnipresence of substantive justice and public policy considerations in the field of Private International Law, the further reaching claim, that these extrinsic values are derived from Nation States, has to be refuted.

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Conflict of law rules

If the alleged examples for the presence of national policy considerations are reconsidered, they turn out not to be as convincing as they seem at first glance. Public Policy, to begin with, is a notion that only operates with reference, firstly,

48 49 50 51 52 53

ECJ, Case C-212/97 Centros [1999] ECR I-01459. ECJ, Case C-208/00 Überseering [2002] ECR I-09919. ECJ, Case C-167/01 Inspire Art [2003] ECR I-10155. ECJ, Case C-148/02 Garcia Avello [2003] ECR I-11613. ECJ, Case C-353/06 Grunkin & Paul [2008] ECR I-07639. Leading case: German Federal Constitutional Court, 4 May 1971, BVerfGE 31, pp. 58 et seq. See also BVerfGE 63, pp. 181 et seq.

Private International Law sans frontières

to a concrete and consequentialist assessment of the result in the given case. This by itself reduces its applicability, as foreign laws, outrageous as they may seem in abstracto, may still be applied in the given case if there is no sufficient connection to the forum or if the hypothetical application of the lex fori would yield the same result, albeit on other grounds. To this effect the German courts have deemed talaq divorces and glove marriages valid in singular cases, even though these institutions per se run counter to equality of sex and private autonomy.54 Secondly, in modern times of collective legislation, public policy exceptions to conflict of law rules tend to appear in harmonised legal instruments where they are immersed in what one may call an ‘international colour’.55 In this regard, reference shall be made to the Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption, in which the exception is only allowed in the ‘child’s interest’.56 Similarly, recital 25 of the Rome III Regulation and recital 28 of the proposed Regulation on Registered Partnerships state that public policy exceptions are only recognised subject to Human Rights as provided for in the Charter of Fundamental Rights of the European Union.57 In the framework of mandatory norms, i.e. the positive facet of public policy, the Ingmar case can be construed as to have come up with an independent concept of European mandatory norms.58 Furthermore, it is in this context that Johan Meeusen speaks of a bilateralisation of the ordre public for the sake of non-discrimination: this notion does not operate as an exception anymore but rather as a safeguard for transnational values.59 Therefore, as far as ordre public bears testimony to policy considerations, they are increasingly governed by transnational values today. Turning towards characterisation, despite Adrian Briggs’ conservative reading, the Law of England also conceives characterisation in a “broad internationalist spirit”.60 To a similar effect, Ernst Rabel has proposed a comparative characterisation, detaching conflict of law rules from their substantial law background and 54 55 56

57

58 59 60

Cf. German Federal Court of Justice, 19 December 1958, BGHZ 29, pp. 137 et seq.; German Federal Court of Justice, 6 October 2004, BGHZ 160, pp. 332 et seq. Cf. Gutzwiller, supra note 33. Convention of 29 May 1993 on Protection of Children and Co-operation in Respect of Intercountry Adoption, , visited on 5 January 2013. Proposal for a Council Regulation on jurisdiction, applicable law and the recognition and enforcement of decisions regarding the property consequences of registered partnerships, COM(2011) 1127/2, 16 March 2011. ECJ, Case C-381/98 Ingmar [2000] ECR I-09305. J. Meeusen, ‘Le droit international privé et le principe de non-discrimination’, in Recueil des cours de l’Academie de la Haye, Vol. 353 (2011). England and Wales Court of Appeal, Raiffeisen Zentralbank Österreich AG v. Five Star Trading [2001] EWCA Civ 68; [2001] Q.B. 825, p. 27.

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placing them into a transnational context.61 This view savours increasing support in both modern European doctrine and legislation,62 and notably seems to have also been adopted by Dominique Bureau, when he refers to a presumed lex communitatis in the scope of the Rome I and II Regulations.63 Moreover, like characterisation, several other doctrines of Private International Law leave national boundaries by their very mode of operation: Concepts like interlocking issues, substitution, transposition etc. constitute a semantic framework which is fully detached from any national legal order. It is also severely misleading to reduce the U.S. approach to choice of law to a mere national policy analysis. Rather, what happens in the cited cases is that all national policies affected are being considered in their own right, thereby adhering to a transnational idea of equality of legal orders. This becomes utterly apparent when the policy analysis is eventually governed by a Pareto-like assessment of how national policies can be reconciled with each to the effect that an optimal balance is being reached.64 Very importantly, harmonising instruments such as the United Nations Convention on Contracts for the International Sale of Goods,65 the Hague Conventions, and the proposed Common European Sales Law,66 as well as mediated

61 62

E. Rabel, ‘Das Problem der Qualifikation‘, 5 Journal of Comparative and International Private Law (1931) pp. 241 et seq. Article 39 Bulgarian Private International Law Code (Qualification) reads as follows: (1)

(2)

(3)

63

64 65 66

Where determination of the applicable law depends on the qualification of the essential elements or of the relationships, the said qualification shall be performed according to Bulgarian law. Where a specific legal institution or legal concept are unknown to Bulgarian law and cannot be defined through interpretation pursuant to Bulgarian law, the foreign law which governs the said institution or concept must be taken into consideration for the qualification thereof. Upon performance of qualification, account must be taken of the international element in the relationships which are being settled and of the specifics of private international law.

See further on Art. 39 Bulgarian PIL Code: P. Maesch, Kodifikation und Anpassung des bulgarischen Rechts an das Europäische Recht (Mohr Siebeck, Tübingen 2010) p. 152. This quote refers to an oral conversation at the Hague Academy 2011, where Dominique Bureau held a Course titled: “Les mutations méthodologiques du droit international privé contemporain.” Cf. Supreme Court of Canada, Interprovincial Co-operatives v. The Queen in Right of Manitoba [1976] 1 SCR 477-504 on constitutional aspects of this line of thought. United Nations Convention on Contracts for the International Sale of Goods, UN doc. A/CONF 97/19, 1489 U.N.T.S. 3, 22 April 1980. Proposal for a Regulation of the European Parliament and the Council on a Common European Sales, COM(2011) 635 final, 11 October 2011.

Private International Law sans frontières

harmonisation via e.g. UNIDROIT Principles67 and Principles of European Contract Law,68 whether they are concerned with substantial law, conflict of laws or both, have limited the scope of national public policy in the field and have consequently established transnational structures. The same can be stated regarding the increased importance and recognition of the choice of law agreements such as those in the Rome I-III Regulations and in the Draft Hague Principles on Choice of Law in International Contracts (2012), of which the latter, in Article 3, even includes the choice of non-state law.69 Wherever such an autonomous choice is being made, conflict of law rules are largely obviated and their respective problems bypassed.

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Procedural aspects of Private International Law

A closer look at the functioning of the U.S. and the European systems in practice reveals that—contrary to a persistant narrative, which is recited above—the readiness to claim jurisdiction is not significantly higher in the United States.70 This is so because U.S. courts have shown a considerable reluctance to exaggerate claims of jurisdiction, such as in VW Volkswagen v. Woodson,71 and also in the recent case of J. McIntyre Machinery v. Nicastro.72 The test applied in the latter— that the defendant must have purposefully availed himself of access to U.S. jurisdiction—rather invokes a criterion very similar to Article 15 para. 1 lit. c) Brussels I Regulation. Even more, seen in connection with the rejoinder jurisdiction according to Article 6 No. 1 Brussels I Regulation and the broad reading applied to it by the ECJ in, for instance, Freeport,73 the European system could reasonably be deemed to advance even bolder claims of jurisdiction. This is especially the case as long as, according to Articles 2 and 3 Brussels I Regulation, national exorbitant jurisdictions like Section 23 of the German Civil Procedure Law 74 remain applicable 67 68 69

70 71 72 73 74

UNIDROIT Principles of International Commercial Contracts (2010), , visited on 6 January 2013. Principles of European Contract Law (1999), , visited on 6 January 2013. Hague Conference on Private International Law, Draft Hague Principles on the Choice of Law in International Contracts, available at , visited on 6 January 2013. See supra at 2.1.2. US Supreme Court, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 21 January 1980. US Supreme Court, J. McIntyre Machinery v. Nicastro, docket no. 09-1343, 2 February 2010. ECJ, Case C-98/06 Freeport [2007] ECR I-08319. Section 23 German Civil Procedure Law (Specific jurisdiction of assets and of an object) reads as follows:

͙ – Chris Thomale

if the defendant is not domiciled in an EU Member State.75 Finally, also in this area, trans- or even a-national structures are on the rise. The field of consumer protection law gives a fitting example that the new deal seems to be an overarching reconfiguration of procedures along the lines of the given subject matter, as it is prominently represented by the current UNCITRAL work on online dispute resolution particularly designed for internet trading.76 Turning to the alleged juxtaposition of civil procedural traditions, these are also way more similar in practice than they appear in theory. As John Langbein has pointed out, pre-trial discovery has evolved towards notions of managerial judging, e.g. when preliminary meetings are held during the discovery process.77 Conversely, continental in-trial discovery has been endorsing strict preclusion measures demanding that evidence must be brought before court in time (for example, Section 296 German Civil Procedure Law 78), which effectively leads to similar situations in fact. The same applies to the question of pleading foreign law, For complaints under property law brought against a person who has no place of residence in Germany, that court shall be competent in the jurisdiction of which assets belonging to that person are located, or in the jurisdiction of which the object being laid claim to under the action is located. Where claims are concerned, the debtor’s place of residence and, in cases in which an object is liable for the claims as collateral, the place at which the object is located shall be deemed to be the location at which the assets are located.

75

76

77 78

These rules remain essentially unchanged in Articles 5 and 6 of the recently published recast of Brussels I, Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. UNCITRAL,Working Group III on Online Dispute Resolution, see , visited on 6 January 2013. J. H. Langbein, ‘The German Advantage in Civil Procedure’, 52:4 University of Chicago Law Review (1985) pp. 823 et seq. Section 296 German Civil Procedure (Refusal to accept submissions made late) reads as follows: (1)

(2)

Any means of challenge or defence submitted only after the deadline imposed in its regard (section 273 (2) number 1 and, insofar as this deadline has been set to a specific party, number 5, section 275 (1), first sentence, subsection (3) and subsection (4), section 276 (1), second sentence, subsection (3), section 277) are to be admitted at the court’s discretion and conviction only if admitting them to the proceedings would not delay the process of dealing with and terminating the legal dispute, or if the party provides sufficient excuse for such delay. The court may refuse to admit any means of challenge or defence that, in contravention of the stipulations made in section 282 (1), are not submitted in due time or that, in contravention of the stipulations of section 282 (2), are not communicated in due time, if it finds at its discretion and conviction that admitting them to the proceedings would delay the process of dealing with and terminating the legal dispute, and that the delay is the result of gross negligence.

Private International Law sans frontières

where the classically received systematic differences boil down to the need for good legal advice, which is recommendable and indispensable in both systems nonetheless, and raises questions rather of access to justice and financial help than of competition of allegedly contrary systems.79 Finally, the autonomous choice of court, as recognised in Brussels I Regulation and the Hague Convention on Choice of Court Agreements,80 is also a vehicle by which national differences can be obviated and superseded. The crucial instrument of arbitration has to be seen in the same context: Being recognised in the widely ratified New York Convention,81 it does not only vindicate far-reaching autonomy to the parties but points to the fact that, even in the delicate fields of recognition and enforcement of foreign titles, a broad transnational consensus has been reached for quite some time.82

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Doctrinal convergence in Private International Law Personal-historical convergence

Fortunately, doctrinal evolution of Private International Law did not stop at the above said stage of fragmentation but has been evolving further. Probably the most striking example is being delivered by the interest theory of Gerhard Kegel and Henri Battifol.83 Not only do German and French doctrines converge here, but in its essence, this theory also comes very close to what is being suggested by American realists: a flexible approach that tries to strike a balance between the various interests involved. Additionally, one could refer to Albert Ehrenzweig, who received both an Austrian and an American legal education and—to provide

(3)

(4)

79 80 81 82

83

Any objections made, at too late a time, concerning the admissibility of the complaint and that the defendant may elect to forgo, are to be admitted only if the defendant provides sufficient excuse for the delay. In the cases set out in subsections (1) and (3), the grounds precluding culpability are to be substantiated should the court so require.

T. C. Hartley, ‘Pleading and proof of foreign law: The mayor European systems compared’, 45:2 International and Comparative Law Quarterly (1996) p. 292. Convention of 30 June 2005 on Choice of Court Agreements, , visited on 5 January 2013. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 330 U.N.T.S. 38, 10 June 1958. On the European level, cf. Articles 32 et seq. Brussels I Regulation. In the new Regulation (EU) No 1215/2012, supra note 75, Articles 36 et seq. have ceased to require any special procedure or declaration on recognition and enforceability. G. Kegel, ‘Begriffs- und Interessenjurisprudenz im internationalen Privatrecht’, in Festschrift für Hans Lewald (Topos Verlag, Basel, 1953) pp. 259 et seq.; H. Battifol, ‘L’Avenir du droit international privè’, in Choix d’articles rassemblés par ses amis (Librairie générale de droit et de jurisprudence, Paris, 1976) pp. 315 et seq., notably p. 325.

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only a rough and ready analysis—merged these into his seven heuristic principles of international case assessment.84 In the meantime, his data theory 85 has been re-imported to Europe both in the Ingmar case as well as in Article 17 Rome II Regulation.86 Alongside this positivist development, Ehrenzweig’s disciples and ‘granddisciples’, including, notably, the Erik Jayme School, have been advancing doctrinal refinements of data theory such as the two-step approach to conflicts solutions, which in turn get re-received on an international level.87 Although there can only be made room for some anecdotic evidence in this essay to support the claim, one may hold that the Zitelmannian ideal of a Private International Law Family has at least in part become reality.

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Substantial convergence

With regard to the substantial convergence of Private International Law, suffice it to point out three facts: Firstly, the juxtaposition alleged above of preserving legal certainty (civil law solution) on the one hand and doing equity to the individual case (common law solution) on the other hand is flawed. First and foremost, this is so because in their practical application, continental conflict of law rules have not been showing this predictability but rather remind of a leap into the dark: After all, from a political point of view, it is the very gist of a choice of law rule to follow it blindly, i.e. in demonstrative disregard of the substantial law they lead to.88 In return, once equity to the individual case is considered in the broader context of limitation of

84

85 86 87

88

For a succinct reconstruction see E. Jayme, ‘Ausländische Rechtsregeln und Tatbestand inländischer Sachnormen. Betrachtungen zu Ehrenzweigs Datum-Theorie’, in E. Jayme and G. Kegel (eds.), Gedächtnisschrift für Albert A. Ehrenzweig (C.F. Müller Verlag, Heidelberg, 1976) p. 40. A. Ehrenzweig, ‘Local and Moral Data in the Conflict of Laws: Terra Incognita’, 16 Buffalo Law Review (1966-67) pp. 55-60. See supra note 58. E. Jayme, ‘The American Conflicts Revolution and its Impact on European Private International Law’, in University of Amsterdam (ed.), Forty Years On: The Evolution of Postwar Private International Law in Europe (Kluwer, Deventer, 1990) pp. 15 et seq. especially at note 62; M. P. Weller, ‘Die Verlegung des Center of Main Interest von Deutschland nach England’, 37:6 Zeitschrift für Unternehmens- und Gesellschaftsrecht (2010) pp. 835-866.; id., ‘Internationales Unternehmensrecht 2010. IPR-Methodik für grenzüberschreitende gesellschaftsrechtliche Sachverhalte’, 39:4 Zeitschrift für Unternehmens- und Gesellschaftsrecht (2010) pp. 679-709. See also G. Schulze, ‘Moralische Forderungen und das IPR‘ 30:4 Praxis des Internationalen Privat und Verfahrensrechts (2010) pp. 290 et seq. In deliberate transformation of the famous Wittgensteinian phrase: “Ich folge der Regel blind.“ Cf. L. Wittgenstein, Philosophische Untersuchungen (Suhrkamp, Frankfurt am Main, 1984) § 219.

Private International Law sans frontières

transaction costs as intended e.g. by the Neumeier approach89 in accordance with the Coase-theorem,90 a case by case approach also has to—and via stare decisis does—assure legal certainty. Secondly, the alleged fragmentation within Europe can be dealt with by means of received notions of Private International Law. For instance, in the field of international corporate law, Marc-Philippe Weller has proposed to construe the Überseering 91 legacy as a disguised choice of law rule in favour of the statutory seat doctrine.92 It is submitted that this very same analysis can be extended to the Grunkin & Paul 93 case by transforming European citizenship into a disguised choice of law rule, thereby incorporating so-called ‘diagonal conflicts’, which allegedly seem to fall outside traditional private international law doctrine, into basic choice of law methodology.94 Thirdly and finally, the recent decision of the European Court of Human Rights in Rose and Rose v. Switzerland, in which choice of law rules were overridden by Human rights considerations, clearly shows that the alleged constitutionalisation of Private International Law has in fact, above all, become a transnational phenomenon.95 This may be complicating the task, but it is certainly neither nationalising nor inter-nationalising the operation of Private International Law.

͘

Concluding remarks

To put it briefly and succinctly, both the positive application of Private International Law and its doctrinal development point towards a transnationalisation of the topic: That is, a topic overarching national boundaries rather than affirming them, by relating to them as inter-nationality does. What repercussions has this caused within the legal community? Legal practice and legal education have

89 90 91 92 93 94

95

Neumeier case, supra note 18. R. H. Coase, ‘The Problem of Social Cost’ 3:1 Journal of Law and Economics (1960) pp. 1 et seq. Überseering case, supra note 49. Weller, supra note 87, p. 697. Grunkin & Paul case, supra note 52. J. Heymann, ‘The Relationship between EU Law and Private International Law Revisited: Of Diagonal Conflicts and the Means to Resolve Them’, Yearbook of Private International Law Vol. XIII (2011) pp. 557-588, conceptually borrowing from C. Joerges, ‘The challenges of Europeanization in the realm of private law: A plea for a new legal discipline’, 14 Duke Journal of Comparative & International Law (2004) pp. 183 et seq. ECtHR, Losonci Rose and Rose v. Switzerland, application no. 664/06, 9 November 2010, , visited on 6 January 2013.

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been transnationalised:96 Big law firms have brought about a community of global lawyers that can hardly be caught in national terms.97 The University of Geneva issues a ‘Certificat de Droit Transnational’,98 whilst the Bologna process enhances the education of lawyers with translingual and transdiciplinary skills.99 The question of why we should retain the notion of nationality might arise, albeit in the dress of trans-nationality, rather than opting for an even more pervasive concept like ‘Global Private Law’. In my view, one should not succumb to this hackneyed temptation: The moment Private International Law is cut loose from any reference to nation and territoriality, even at a metaphorical level, it foregoes its genealogical identity of being an act of humanisation against the stubbornness and self-righteousness of the Westphalian State. Our discipline should always bear this in mind and name, constantly reasserting the vast achievement (indeed Er-rungen-schaft) it has brought about: The openness towards the other.100 In this adjusted sense, the ethical foundation of a transnational community of private law can be found in a variation of the famous Deprézian phrase: Le droit transnational privé est l’invitation à l’autre.

96

For an overall view on this development see S. Chesterman, ‘The Evolution of Legal Education: Internationalization, Transnationalization, Globalization’, 10:7 German Law Journal (2009) pp. 877 et seq. 97 On multiple deontology problems caused thereby: C. A. Rogers, ‘Cross-border bankruptcy as a model for the regulation of international attorneys’, in P. Bekker et al. (eds.), Making Transnational Law Work in the Global Economy (Cambridge University Press, Cambridge, 2010) pp. 635 et seq. 98 See Univeristé de Genève, Certificat de Droit Transnational, , visited on 6 January 2013. 99 Cf. Bologna Declaration 19 June 1999 of the European Ministers of Education, , visited on 7 January 2013. 100 The German noun ‘Errungenschaft’ (accomplishment or achievement) is derived from the verb ‘ringen’ (to agonise, compete or struggle) and thereby conveniently supports the point made in the text.

͖

Hague Conference on Private International Law—Work in Micah R. Thorner* and Kay Jagath Rommerts**

Abstract Since its establishment in 1893, the Hague Conference on Private International Law has continued to address global trends and needs to enact multilateral global governance mechanisms in furtherance of cross-border transactions and relations, the improvement of legal security, and deepening of the relationship with governmental, intragovernmental and non-governmental organisations. As such, the Hague Conference is a true melting pot of various legal systems and legal doctrines. At present the Hague Conference counts 72 members (71 States and the European Union) and continues to build bridges between various legal systems. In doing so, the Hague Conference continues its commitment to recognise the needs and desires of particular members in their connection to the region and world at large.

͕

Highlights of

The Hague Conference on Private International Law achieved a number of significant accomplishments in the course of 2012. Some highlights of the past year include:

*

**

Director, Hague Conference International Centre for Judicial Studies and Technical Assistance. Ms Thorner received her Juris Doctorate (JD) degree from Georgetown University (2008) and a Bachelor of Arts degree (BA) from Oberlin College (2000). Intern, Hague Conference International Centre for Judicial Studies and Technical Assistance. Mr Rommerts is a Juris Doctor Candidate at Northeastern University School of Law. He received a Master of Science (MSc) in Medical Anthropology and Sociology from the University of Amsterdam (2010) and received a Bachelors of Arts from University College Roosevelt, the International Honors College of Utrecht University (2008).

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͚ – Micah R. Thorner and Kay Jagath Rommerts

͕.͕

Three Special Commission meetings convened

The Permanent Bureau (‘Secretariat’) of the Hague Conference (‘Permanent Bureau’) organised three Special Commission meetings in the course of calendar year 2012. Two of these, namely Part II1 of the Special Commission meeting on the practical operation of the 1980 Child Abduction Convention and the 1996 Child Protection Convention from 25 to 31 January 2012,2 and the Special Commission meeting to review the practical operation of the 1961 Apostille Convention3 from 6 to 9 November 2012, respectively, provided stakeholders with an opportunity to discuss the relevant Hague Conventions and how to address certain practical matters pertaining to the instruments’ operation within and among Contracting States. The meeting of the Special Commission on the Choice of Law in International Contracts,4 held from 12 to 16 November 2012, differed from the two other meetings in that its goal was to review Draft Principles, rather than to examine the practical operation of an existing Convention. In addition to work on the Draft Principles, Special Commission experts also developed recommendations regarding future steps the Council should consider at its forthcoming 2013 meeting.

͕.͖

Opening of Hague Conference Asia Pacific Regional Office

During its annual meeting in April 2012, the Council on General Affairs and Policy of the Hague Conference on Private International Law (‘Council’) endorsed the initiative of the Secretary General to establish an Asia Pacific Regional Office in Hong Kong Special Administrative Region of the People’s Republic of China (‘Hong Kong SAR’). In light of the Council’s endorsement, the official opening of this new office took place on 13 December 2012. The Asia Pacific Regional Office is expected to be a tremendous resource for States in the Asia Pacific Region.

1 2 3 4 5

The Special Commission meeting on the practical operation of the 1980 Child Abduction Convention and 1996 Child Protection Convention took place in June 2011. See Section 3.1, International Protection of Children and Vulnerable Adults, International Family and Family Property Relations. See Section 3.2, International Legal Co-operation and Litigation. See Section 3.3, International Commercial Finance Law. See Section 5.1, Developments at the Regional Level.

Hague Conference on Private International Law—Work in ͚͙͚͘

͕.͗

Joint Conference of the European Commission and the Hague Conference on Access to Foreign Law in Civil and Commercial Matters

As part of its mandate to monitor developments in the area of access to foreign law in civil and commercial matters, the Hague Conference, jointly with the European Commission, organised a conference on this fast-evolving subject. From 15 to 17 February 2012, more than 130 legal professionals from more than 35 States gathered to discuss the latest development in this very important area, at the heart of access to justice issues. Thanks to generous funding from the European Commission, publication of the Joint Conference proceedings will take place in the course of 2013.

͕.͘

Expert Group on the financial aspects of intercountry adoption

One of the main remaining concerns for the proper implementation of the 1993 Intercountry Adoption Convention is the financial aspect of intercountry adoption. In accordance with the recommendation of the Council, a group of experts met in The Hague to discuss ways to develop tools to properly legislate and to control and monitor financial issues in accordance with the 1993 Convention in October 2012. Among others, the Expert Group recommended that a set of agreed-to terms, a summary list of good practices, and a Discussion paper on the financial aspects of intercountry adoption prepared by the Permanent Bureau for the Expert Group should all be made publicly available to stakeholders for future reference.

͕.͙

Launching of the e-Country Profile under the Convention

Child Support

Through generous Norwegian funding and an in-kind contribution from Alphinat Canada, conclusion of the electronic version of the Country Profile for the 2007 Child Support Convention took place in 2012. This first Hague Convention country profile in electronic form will greatly facilitate the exchange of information in different languages between States Parties with respect to their implementation of the Convention. Conclusion of the electronic version of the Country Profile will also provide valuable information to applicants. It will ensure timely compliance with Convention obligations with a minimum of administrative effort.

6 7 8

See Section 2.2, Future Work. See supra note 3. Ibid.

͚ – Micah R. Thorner and Kay Jagath Rommerts

͕.͚

Regional Seminars: Bermuda Seminar and Dakar Workshop

The Hague Conference was also responsible for two major regional events in 2012: (1) a seminar for the Caribbean region and Bermuda (May 2012) focusing on Hague family and child protection Conventions as well as Hague instruments on legal co-operation and litigation; and (2) a Workshop in Dakar, Senegal, (November 2012) specifically addressing the 1993 Intercountry Adoption Convention. The objective of both seminars was not only to promote the work of the Hague Conference, but also to collectively provide training and support to States likely to share similar concerns or challenges.

͕.͛

Technical Assistance and Judicial Training

Through the International Centre for Judicial Studies and Technical Assistance of the Hague Conference, States were able to obtain targeted support, advice and training regarding the implementation or operation of one or more Hague Conventions. In 2012, more than 20 individual States received customised assistance and / or training from Hague Conference experts.11 In particular, the Permanent Bureau continued to provide assistance to several countries under its Intercountry Adoption Technical Assistance Programme (‘ICATAP’) through the course of 2012. In this regard, it should be noted that ICATAP is increasingly receiving support from Central Authority (or other) experts from Member States which are a party to the 1993 Hague Intercountry Adoption Convention. For example, in 2012 the Philippines and Chile provided assistance to Cambodia and Guatemala, respectively.

͖ ͖.͕

Developing and Refining Hague Conventions Work in

The Hague Conference continues to be a leader in the development of private international law by responding to new global demands for mechanisms which facilitate cross-border transactions and relationships. To meet this end, the Organisation’s principal objective is the development of multilateral treaties. In addition and often as a supplement to binding instruments, the Hague Conference may work on non-binding rules and model laws or Principles. Consistent with these objectives, the Council reviewed the Permanent Bureau’s current work and considered whether and how proposed topics for future work should be included in the new work programme. In response to this feedback, the Permanent Bureau’s

9 10 11

See Section 5.1, Developments at the Regional Level. See Section 5.2, The Centre’s Technical Assistance and Judicial Training Activities. The number of individual States receiving technical assistance in 2012 does not include States that may have participated in regional seminars (e.g., the events in Bermuda and Dakar).

Hague Conference on Private International Law—Work in ͚͙͚͘

work throughout 2012 was carried out in accordance with the Council’s April 2012 mandate on work, the development of new instruments and the provision of relevant post-Convention services.

͖.͕.͕

Accessing the content of foreign law

The Council decided in April 2012 that “the Permanent Bureau should continue monitoring developments [relating to a possible international instrument or mechanisms addressing access to foreign law] but not take any further steps in this area at this point.” As part of its monitoring activities, the Hague Conference played a key role in the Access to Foreign Law in Civil and Commercial Matters conference. This event, jointly organised by the Hague Conference and the European Commission, took place in Belgium, February 2012. Attendees included experts from 35 States with experience working in various different legal systems and traditions around the world. Nine international organisations or agencies, and ten other professional or academic institutions and organisations also attended this conference. The Brussels Conference produced 14 unanimous conclusions, emphasising “the increasing need in practice to facilitate access to foreign law, in many areas of the law such as in family law, the law of succession and commercial law, as a result of, among other things, globalisation and the cross-border movement of persons, goods, services and investments.” The Conference also stressed the need for and advantages of “co-operative mechanisms to be developed at the global level to facilitate access to foreign law” and agreed that “access to foreign law is an important component of access to justice, strengthens the rule of law, and is fundamental to the proper administration of justice.” The Conference confirmed results of past Hague Conference global experts meetings on this topic, affirming that any global instrument should not seek to harmonise the status of foreign law in national procedures, but should rather focus on the facilitation of access to foreign law for a variety of actors, including judges, legal practitioners, notaries, government officials and the general public. According to the Conclusions and Recommendations of the Brussels Conference, any new instrument in the area should be operational in different legal systems and traditions and be useful both in the context of cross-border litigation and in noncontentious matters, such as contractual negotiations, estate planning and family arrangements.

͖.͕.͖

Choice of Law in International Contracts

In response to work presented by the Working Group on the Choice of Law in International Contracts, particularly the Draft Hague Principles on Choice of Law in International Contracts, accompanying Report and the Policy Document prepared by the Working Group, the Council decided that a Special Commission should

͚ – Micah R. Thorner and Kay Jagath Rommerts

be convened during the course of 2012 to discuss the proposals presented to the Council and develop a recommendation for future steps. The Special Commission meeting took place in November 2012.

͖.͕.͗

The Judgments Project

The Permanent Bureau has taken a number of steps to facilitate the continuation of the Judgments Project. First, the Permanent Bureau launched a new Judgments Project Section of the Hague Conference website in 2011 to provide useful and readily accessible information on the abundant materials produced in relation to the project. The specialised section on the Hague Conference website includes a detailed chronology of the Judgments Project: links to relevant documentation and previous work; a summary of work carried out since 2010; and an extensive bibliography. Second, the Permanent Bureau has been monitoring recent bilateral and regional developments relating to judgments in civil and commercial matters. At a meeting from 12 to 14 April 2012, the group of experts working on this topic recommended that work be undertaken towards a future binding instrument on the recognition and enforcement of judgments, including jurisdictional filters. In addition, a subsequent meeting of the expert group was held in February 2013 to consider matters of direct jurisdiction (including parallel proceedings).

͖.͕.͘

Experts’ Group on Agreements including Mediated Agreements

The Council also decided in 2012 to establish an Experts’ Group to carry out further exploratory research on cross-border recognition and enforcement of agreements reached in the course of international child disputes, including those reached through mediation, taking into account the implementation and use of the 1996 Child Protection Convention. This Experts Group is expected to meet in 2013.

͖.͕.͙

Working Party on Mediation in the context of the Malta Process

The Council agreed that the Working Party on Mediation in the context of the Malta Process should continue its work on the implementation of mediation structures in the course of 2012. An electronic discussion forum on this topic was 12

The Malta Process’ objective is to improve co-operation among States to resolve difficult cross-border family law disputes where the relevant international legal framework is silent. The Malta Process is particularly relevant in disputes between Contracting States and non-Contracting States with Shariah-based or Shariah-influenced legal systems. The Malta Process aims to improve child protection between the relevant States by ensuring support for the child’s right to remain in contact with both parents despite living in different States. The Malta Process also focuses on combating inter-

Hague Conference on Private International Law—Work in ͚͙͚͘

subsequently developed this past year to facilitate the exchange of information and ideas between Working Party members. A meeting of the Working Party has been scheduled for April 2013.

͖.͕.͚

Working Group on Article Convention

( ) b) of the

Child Abduction

In response to the reports on Parts I and II of the Sixth Meeting of the Special Commission on the practical operation of the 1980 Child Abduction Convention and the 1996 Child Protection Convention, the Council decided to establish a Working Group composed of a broad range of experts to develop a Guide to Good Practice on the interpretation and application of Article 13(1) b) in 1980 Child Abduction Convention cases. This Guide to Good Practice would include a section specifically intended to provide guidance to judicial authorities. The Permanent Bureau began preliminary research into this topic and plans to convene the next Working Group meeting on this topic later in 2013.

͖.͕.͛

Technical Assistance Working Group

The Council instructed the Working Group on Technical Assistance to develop recommendations regarding a strategic framework for technical assistance and post-Convention services provided by the Hague Conference. A report of the Working Group’s progress will be given to the Council in April 2013.

͖.͖ ͖.͖.͕

Future Work Private International law issues surrounding the status of children, including issues arising from international surrogacy agreements

In 2012, the Hague Conference’s work on the “private international law issues surrounding the status of children, including issues arising from international surrogacy arrangements” continued apace. In 2011, the Council instructed the Permanent Bureau to intensify its work on this topic, “with emphasis on the broad range of issues arising from international surrogacy arrangements” and provide a preliminary report on progress to the Council in 2012.14 The Council welcomed this preliminary report and asked the Permanent Bureau to “continue the current work under

13 14

national child abduction. See also Section 3.1, International Protection of Children and Vulnerable Adults, International Family and Family Property Relations. See supra note 10. See Prel. Doc. 10 (March 2012) for the attention of the April 2012 Council on General Affairs and Policy at , visited on 14 March 2013.

͚ – Micah R. Thorner and Kay Jagath Rommerts

the 2011 Council mandate” and “prepare and distribute a Questionnaire in order to obtain more detailed information regarding the extent and nature of the private international law issues being encountered in relation to international surrogacy arrangements, as well as in relation to legal parentage or ‘filiation’ more broadly.” 15 The requested Questionnaire will be circulated in 2013 and the Permanent Bureau is expected to present a final Report on this subject to the Council in 2014.

͖.͖.͖

Recognition and enforcement of foreign civil protection orders

In April 2011, the Council added to the Hague Conference work programme “the topic of the recognition of foreign civil protection orders made, for example, in the context of domestic violence cases.” 16 Consistent with this mandate, the Permanent Bureau was instructed to prepare “a short note on the subject to assist the Council in deciding whether further work on this subject is warranted”.17 Therefore, the Permanent Bureau presented a document entitled Recognition and Enforcement of Foreign Civil Protection Orders: A Preliminary Note in fulfilment of the previous year’s mandate to the Council in April 2012.18 This document provided comparative information on national legislation in this field and presented a description of existing or planned national and regional projects that address cross-border recognition and enforcement of protection measures.19 It also noted significant national and regional policy attention given to this area of law based on a growing awareness of “[t]he ease of international cross-border travel combined with the severe risk to an individual who cannot obtain immediate recognition and enforcement of a foreign protection order.” 20 The Council subsequently concluded that the Permanent Bureau should circulate a questionnaire to Members in order to assess the need and feasibility of an

15

16

17 18 19

20

See the Conclusions and Recommendations of the 2012 Council on General Affairs and Policy, para. 21 at , visited on 14 March 2013. See the Conclusions and Recommendations of the 2011 Council on General Affairs and Policy, para. 23 at , visited on 14 March 2013. Ibid. See Prel. Doc. 7 (March 2012) for the attention of the April 2012 Council on General Affairs and Policy , visited on 14 March 2013. The terms ‘protection order’, ‘protection measure’ or other similar general terminologies are used in various jurisdictions and under various national or regional legal instruments, denoting legal regimes that seek to protect victims or potential victims of domestic violence and / or other types of harmful interpersonal behaviour. Foreign Protection Orders: Joint ULCC/CCSO Working Group Report With Draft Act and Commentaries, Uniform Law Conference of Canada, Civil Law Section, 7-11 August 2011 (Winnipeg, Manitoba), effective 30 November 2011, p. 3.

Hague Conference on Private International Law—Work in ͚͙͚͘

instrument in this area and to obtain further information on existing legislation. The Permanent Bureau was instructed to report its progress on this topic to the Council in 2013.

͖.͖.͗

The application of certain private international law techniques to aspects of international migration

In April 2012, the Council accepted that the Permanent Bureau would continue to explore, in consultation with interested Members and relevant international organisations, the potential value of using certain private international law techniques in the context of international migration.

͖.͖.͘

Other possible future work

The Council invited the Permanent Bureau to continue to follow developments in the following areas: – questions of private international law raised by the information society, including electronic commerce, e-justice and data protection;21 – jurisdiction, and recognition and enforcement of decisions in matters of succession upon death; – jurisdiction, applicable law, and recognition and enforcement of judgments in respect of unmarried couples; and – conflict of laws issues relating to the enforceability of close-out netting provisions, taking into account in particular the work undertaken by other international organisations. The Council decided to delete from the Agenda of the Conference the topics dealing with the assessment and analysis of transnational legal issues relating to indirectly held securities and security interests.

͗

Post-Convention Services

For more than 30 years, post-Convention services, including the promotion and efforts at monitoring the practical operation of Hague Conventions, have been provided by the Permanent Bureau of the Hague Conference. The shift from treaty development and administration began at the Hague Conference as early as 1977 when the Permanent Bureau organised the first Special Commission on the operation of the 1965 Service Convention. This highly successful first Special 21

See Prel. Doc. 13 (March 2010) for the attention of the April 2010 Council on General Affairs and Policy at , visited on 15 March 2013 (discussing the issue of data protection following a debate at the CrossBorder Data Flows and Protection of Privacy conference).

͚ – Micah R. Thorner and Kay Jagath Rommerts

Commission review meeting was the start of a practice that has become an established feature of the Organisation. Since that time, the post-Convention services offered by the Permanent Bureau have expanded in line with global demands to include, for example: – Special Commission meetings; – guides to good practice, practical handbooks, implementation checklists and other publications and development of electronic databases; – fact-finding missions to States to analyse and diagnose issues; – developing strategies for implementation and / or recommendations to overcome identified obstacles in the operation of Hague Conventions; – drafting and review of implementing legislation and / or enforcement mechanisms; – assistance with the creation and training of an effective Central Authority; and – seminars, conferences and workshops for judges (including continuing education programmes), other government officials and legal practitioners, and group training activities for the purpose of facilitating the consistent implementation and interpretation of Hague Conventions. The exact nature and scope of these services provided by the Permanent Bureau in 2012 are described in greater detail below.

͗.͕ ͗.͕.͕ a)

International Protection of Children and Vulnerable Adults, International Family and Family Property Relations Child Abduction Convention ( ) and Child Protection Convention ( ) Promoting ratifications and accessions

Lesotho and the Republic of Korea both acceded to the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction in 2012. The 1980 Convention entered into force for Lesotho on 1 September 2012 and will enter into force for Korea on 1 March 2013. Greece, Lesotho, Montenegro, the Russian Federation, Sweden and the United Kingdom of Great Britain and Northern Ireland deposited their instruments of ratification or accession to the Hague Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children in 2012. With the exception of Belgium and Italy, all European Union Member States are now Parties to the 1996 Convention. At the end of 2012, the 1980 Child Abduction Convention counted 89 Contracting States and the 1996 Child Protection Convention counted 39 Contracting States.

Hague Conference on Private International Law—Work in ͚͙͚͘

b)

Sixth Meeting of the Special Commission on the practical operation of the Child Abduction Convention ( ) and the Child Protection Convention ( ) (Part II)

The second and final part of the Sixth Special Commission meeting to review the practical operation of the 1980 Child Abduction and 1996 Child Protection Conventions took place in The Hague from 25 to 31 January 2012. During this meeting, experts from around the world gathered in the Academy Building of the Peace Palace to examine and discuss policy matters pertaining to these Conventions. Both Conventions are important instruments to protect the safety and welfare of children all over the world. More than 240 experts and observers from 67 States, along with relevant representatives from international and non-governmental organisations identified areas of the Conventions where further work might be considered in the field of cross-border family law, including cross-border recognition and enforcement of consensual agreements and the “grave risk of harm” defence in return proceedings under the 1980 Child Abduction Convention. A further subject of discussion was the Malta Process (see above).22 The Conclusions and Recommendations adopted at Part II of the Sixth Meeting of the Special Commission on the practical operation of the 1980 Child Abduction Convention and the 1996 Child Protection Convention included a series of tasks that require specific action on the part of the Permanent Bureau. These tasks were approved by the 2012 Council on General Affairs and Policy. In particular, the Council invited the Permanent Bureau to convene a Working Group to develop a Guide to Good Practice on the interpretation and application of Article 13(1) b) of the 1980 Child Abduction Convention.23 In particular, the 2012 Council asked the Permanent Bureau to “establish a Working Group, composed of a broad range of experts, including judges, Central Authorities and cross-disciplinary experts, to develop a Guide to Good Practice on the interpretation and application of Article 13(1) b) of the 1980 Child Abduction Convention, with a component to provide guidance specifically directed to judicial authorities”.24 Furthermore, the Council considered recommendations from the 2012 Special Commission meeting that exploratory work be undertaken to identify legal and practical problems that may exist in the recognition and enforcement abroad of 22

23

24

See supra note 12; see also Publications and the list on Judicial Seminars at , visited on 15 March 2013. See Conclusions and Recommendations of the Sixth Meeting of the Special Commission (Part II - January 2012), paras. 81-82 at , visited on 15 March 2013. See Conclusions and Recommendations adopted by the April 2012 Council on General Affairs and Policy, para. 6 at , visited on 15 March 2013.

͚ – Micah R. Thorner and Kay Jagath Rommerts

agreements settling cross-border family disputes, taking into account the implementation and use of the 1996 Child Protection Convention.25 This recommendation was approved by the 2012 Council, which specifically decided “to establish an Experts’ Group to carry out further exploratory research on cross-border recognition and enforcement of agreements reached in the course of international child disputes, including those reached through mediation, taking into account the implementation and use of the 1996 Convention. Such work shall comprise of the identification of the nature and extent of the legal and practical problems, including jurisdictional issues, and evaluation of the benefit of a new instrument, whether binding or non-binding, in this area.” 26 The Special Commission also paid increased attention to Central Authority co-operation and communication under the 1980 Child Abduction Convention. Considering the serious consequences for the operation of this Convention in the event of failure to inform the Permanent Bureau promptly of changes in the contact details of Central Authorities, the Special Commission requested the Permanent Bureau to remind Central Authorities of their duty to inform “promptly of changes in the contact details of Central Authorities” once a year. In response to this request, an annual reminder was sent out by the Permanent Bureau in 2012. This reminder also called on all States Parties to the 1980 Child Abduction Convention which have yet to complete and submit a Country Profile to do so as soon as possible. The States Parties were furthermore reminded to keep their Country Profile regularly updated. Carrying forward other recommendations made by the Special Commission, the Permanent Bureau has invited signatories and States Parties to join the 1996 Child Protection Convention, as well as all States actively considering accession to, or ratification of this Convention to designate one or more representatives to be added to an informal e-mail network (‘listserv’) to discuss strategies and challenges in the implementation of that Convention in 2012.27 The Permanent Bureau also launched a mentoring programme for States in response to the suggestion by the Special Commission that immediately following a State becoming Party to the 1980 Child Abduction Convention (or, in an appropriate case, where a State is preparing to do so or has expressed a strong interest in doing so), that State should be offered the opportunity to visit an experienced

25

26 27

See Conclusions & Recommendations of the Sixth Meeting of the Special Commission (Part II - January 2012), paras. 76-77 at , visited on 15 March 2013. See supra note 25, para. 7. See Conclusions & Recommendations of the 2011 Special Commission (Part I), para. 2 at , visited on 15 March 2013.

Hague Conference on Private International Law—Work in ͚͙͚͘

Contracting State to gain knowledge and understanding of the practical operation of the Convention.28

c)

Working Party on Mediation in the framework of the Malta Process

The Working Party on Mediation established in the framework of the Malta Process aims at promoting the development of mediation structures to help resolve cross-border family disputes concerning custody of or contact with children where the 1980 Child Abduction Convention and the 1996 Child Protection Convention do not apply.29 Over the course of 2009 and 2010, the Working Party drafted the Principles for the establishment of mediation structures in the context of the Malta Process (‘Malta Principles’) and an accompanying Explanatory Memorandum.30 The Malta Principles call for the establishment of a Central Contact Point for international family mediation in each State. This Central Contact Point is intended to facilitate the provision of information on available mediation services in the respective jurisdictions, access to mediation, and information regarding other important related issues, such as relevant legal information. The Principles further refer to certain standards regarding the identification of international mediation services as well as regarding the mediation process and mediated agreements. The Principles stress the importance of making mediated agreements binding or enforceable in participating States. With regard to the implementation of the Principles, the number of States having established Central Contact Points for international family mediation doubled from three to six with Germany, the Slovak Republic and the United States joining over the course of 2012. The States with Central Contact Points now includes Australia, Germany, France, the Slovak Republic, Pakistan and the United States of America.

d)

Guide to Good Practice on Mediation

The Guide to Good Practice on Mediation under the 1980 Child Abduction Convention was published in English and French in 2012. A Spanish translation was in progress at the end of 2012. With this Guide, the Hague Conference seeks to promote good practices in mediation and other processes to bring about the agreed resolution of international family disputes concerning children, which fall within

28 29 30

See supra note 26, paras. 28-29. See supra note 12 (describing the Malta Process). See Principles for the Establishment of Mediation Structures in the context of the Malta Process at , visited on 15 March 2013.

͚ – Micah R. Thorner and Kay Jagath Rommerts

the scope of the 1980 Child Abduction Convention. The Permanent Bureau also hopes that the Guide will assist State Parties in the implementation of this Convention and provide useful information to those States who consider becoming a Party to the Convention. Additionally, the Guide may also serve as a valuable tool for the implementation of the 1996 Child Protection Convention that also calls on Central Authorities to facilitate, by mediation or similar means, reaching solutions for the protection of the person or property of the child in situations to which the Convention applies. Thanks to the generous support of the European Commission, translations of the Guide into other official European Union languages and into Arabic are expected to be made available in 2013.

e)

Participation in seminars and expert meetings

Permanent Bureau staff participated in numerous events, such as conferences and seminars to promote and educate stakeholders about the 1980 Child Abduction and 1996 Child Protection Conventions. Moreover, the Permanent Bureau took part in training seminars and workshops to facilitate the operation and implementation of these Conventions. Some of these workshops included presentations to judges and other government officials (including those from the relevant Central Authorities), legal professionals and other stakeholders. In particular, this work in 2012 took place in Belgium, Bulgaria, Hong Kong SAR, Croatia, Cyprus, Czech Republic, France, Germany, the Russian Federation, Spain, Switzerland, the United Kingdom and Northern Ireland and the United States of America. The Permanent Bureau also continued its collaboration with the European Union and the Council of Europe in connection with new accessions and other matters of mutual interest. The Permanent Bureau continued its cooperation with UNICEF through numerous efforts. One example of its collaboration with UNICEF was the Permanent Bureau’s attendance of A Better Way to Protect All Children—the Theory and Practice of Child Protection Systems conference organised by UNICEF India in 2012.

f)

Electronic tools

Implementation the International Child Abduction Statistical (‘INCASTAT’) database continued in 2012. The system allows Central Authorities designated under the 1980 Child Abduction Convention to report their statistics and to generate statistical analyses via graphs and charts, as well as other formats. Successful efforts were undertaken in 2012 to raise funds for updates to INCASTAT, expected to take place in 2013. The International Child Abduction Database (‘INCADAT’) was established by the Permanent Bureau in 1999 to make leading decisions rendered by national and selected regional courts in respect of the 1980 Child Abduction Convention

Hague Conference on Private International Law—Work in ͚͙͚͘

publicly accessible.31 It currently contains summaries of more than 1,000 decisions from more than 40 States in English and French and, to a lesser extent, in Spanish and German. INCADAT is used by judges, Central Authorities, legal practitioners, researchers and other interested individuals. It has contributed considerably to the effective operation of the 1980 Child Abduction Convention by promoting mutual understanding and consistent interpretation among the 89 States Parties to this Convention. Since the final revision of the database, completed in 2010, INCADAT contains a Case Law Analysis section which provides a comparative case law commentary on key topics of the 1980 Child Abduction Convention. The iChild case management system for the 1980 Child Abduction Convention is designed to store and keep track of all essential information concerning child abduction cases. This tool is available in English, French and Spanish. The following States are currently using iChild, either independently or as part of a larger software package: Canada, Denmark, Ireland, Mexico, the Netherlands, New Zealand, Spain and the United Kingdom and Northern Ireland.

g)

The Judges’ Newsletter on International Child Protection

In 2012, one volume of The Judges’ Newsletter on International Child Protection was published by the Permanent Bureau. Volume XVIII, published with the generous support of LexisNexis, focuses on Part I of the Sixth Meeting of the Special Commission on the practical operation of the 1980 Child Abduction Convention and 1996 Child Protection Convention held in June 2011.32

h)

International direct judicial communications

As of 31 December 2012, the International Hague Network of Judges (IHNJ) included the formal and informal nominations of 72 Network Judges from Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, Hong Kong SAR, Colombia, Costa Rica, Cyprus, the Czech Republic, Denmark, the Dominican Republic, Ecuador, El Salvador, Finland, France, Gabon, Germany, Guatemala, Honduras, Hungary, Iceland, Ireland, Israel, Kenya, Luxembourg, Malta, Mexico, the Netherlands, New Zealand, Nicaragua, Norway, Panama, Paraguay, Peru, Romania, Serbia, Singapore, South Africa, Spain, Sweden, Trinidad and Tobago, the United Kingdom and Northern Ireland (England and Wales, Northern Ireland and Scotland) and Oversees Territories (Cayman Islands, Bermuda), the United 31 32

The International Child Abduction Database (INCADAT) can be accessed at . See The Judges’ Newsletter section on the Hague Conference website at , visited on 15 March 2013 (showing all volumes of, with the exception of the Special Edition No 1 published in 2010. The volumes are available in English and French, and, in some cases, in Spanish).

͚ – Micah R. Thorner and Kay Jagath Rommerts

States of America, Uruguay and Venezuela. The number of judges that are a part of the IHNJ is steadily growing as the importance of this network is increasingly acknowledged. The Emerging Guidance and General Principles for Judicial Communications were endorsed by experts at the 2012 Special Commission meeting to review the operation of the 1980 Child Abduction and 1996 Child Protection Conventions (Part II) and the Council on General Affairs and Policy at its April 2012 meeting invited their wide dissemination.

͗.͕.͖ a)

Intercountry Adoption Convention ( ) Promoting ratifications and accessions

Fiji, Lesotho, Montenegro and Rwanda acceded to the 1993 Intercountry Adoption Convention in 2012. This brings the total number of Contracting States to this Convention to 89. Notably in 2012, the United Nations Committee on the Rights of the Child recommended in its individual State compliance reports that Bosnia and Herzegovina, the Cook Islands, Liberia, Myanmar, Namibia and Nepal either ratify or accede to the 1993 Intercountry Adoption Convention in accordance with their obligations to adopt other relevant international instruments which facilitate compliance with the Convention on the Rights of the Child.34

b)

Guides to Good Practice on the operation of the Intercountry Adoption Convention

The first Guide to Good Practice on the operation of the 1993 Intercountry Adoption Convention is now also available in German, in addition to English, French, Khmer, Mandarin, Russian, Spanish and Ukrainian. In 2012, the Guide to Good Practice No 2: Accreditation and Accredited Bodies was finalised in English and French. Subject to available resources, translation into Spanish will soon follow. This second Guide clarifies Convention obligations and standards for the establishment and operation of accredited bodies; encourages acceptance of higher standards than the ones established by the Convention; identifies good practices; and proposes a set of model accreditation criteria which will assist Contracting States in achieving greater consistency with the professional standards and practices of accredited bodies.

33

34

Hague Convention of 29 May 1993 on Protection of Children and Co-operation in Respect of Intercountry Adoption, at , visited on 14 May 2013. See Office of the United Nations High Commissioner for Human Rights at , visited on 15 March 2013.

Hague Conference on Private International Law—Work in ͚͙͚͘

c)

New “Information Brochure” on the Convention

A new ‘Information Brochure’ on the 1993 Intercountry Adoption Convention was published in English and French in late 2012. This brochure aims to provide a succinct and easily accessible summary of key information concerning the 1993 Intercountry Adoption Convention.

d)

Expert and Working Groups

In October 2012, an Expert Group composed of representatives from Central Authorities of origin and receiving States met in The Hague to discuss the financial aspects of intercountry adoption.35 The Expert Group endorsed a Discussion Paper on the Financial Aspects of Intercountry Adoption prepared by the Permanent Bureau, agreed to uniform definitions of key terms, developed tables on costs and contributions associated with intercountry adoption and reflected on the development of tools to address issues relating to the financial aspects of intercountry adoption. In November 2012, a Discussion Paper entitled Co-operation between Central Authorities to develop a common approach to preventing and addressing illicit practices in intercountry adoption cases was published in English, French and Spanish. This Discussion Paper was the result of work conducted by an informal group of experts co-ordinated by the Australian Central Authority following a recommendation made by the 2010 Special Commission meeting on the practical operation of the 1993 Intercountry Adoption Convention. The Discussion Paper points to specific forms of co-operation between States to prevent and address conflicting practices within the 1993 Convention framework.

e)

Participation in seminars and expert meetings

The Permanent Bureau continued to actively participate in key meetings and seminars concerning the 1993 Intercountry Adoption Convention in 2012, including the EurAdopt Conference, Intercountry Adoption is still an option (Berlin, Germany, 26 to 27 April); the Searching for a system with guarantees in international adoption seminar organised by a Spanish accredited body and an association of adoptees and adoptive parents (Valladolid, Spain, 26 October); a judicial training for French judges with the title Adoption in Europe and in the World: Evolution and Perspectives (Paris, France, 18 October); the International Adoption Association’s Annual Conference (Dublin, Ireland, 3 November), and the Annual Spanish meeting of Central Authorities, accredited bodies and associations of adoptive parents and adoptees (La Rioja, Spain, 13 December). 35

The Expert Group representatives came from various geographical regions and different legal systems. In addition, UNICEF, International Social Service (ISS), EurAdopt and two independent experts also took part.

͚ – Micah R. Thorner and Kay Jagath Rommerts

͗.͕.͗ a)

Child Support Convention and Protocol on Applicable Law ( ) Promoting ratifications and accessions

The 2007 Child Support Convention will reach an important milestone in 2013, entering into force subsequent to ratification by two States on 1 January, 2013. Norway ratified the Convention on 6 April 2011, followed by Albania, which deposited its instrument of ratification for the Convention on 13 September 2012. Bosnia and Herzegovina became the third Contracting State on 25 October 2012.

b)

Practical Handbooks and other materials

A final version of the Practical Handbook for Caseworkers under the 2007 Child Support Convention was completed in 2012 and has been circulated to Hague Conference Members for final comments. The Practical Handbook will be made available in print and online and is expected to be published in 2013. Professor Alegría Borrás (Universidad de Barcelona), with the Permanent Bureau’s assistance, has undertaken work to complete a Spanish version of the Explanatory Report for the 2007 Child Support Convention. The Spanish version will be made available on the Hague Conference’s website in early 2013 and will be of great assistance to States in Spanish-speaking countries. Additionally, with funding from the European Commission, the Permanent Bureau, the École Nationale de la Magistrature of France, and the Romanian Ministry of Justice successfully completed a joint project on Enhancing International Judicial Co-operation in Matters relating to Maintenance Obligations. The project produced (1) a practical handbook for judges covering the 2007 Child Support Convention, the 2009 European Union Regulation on Maintenance, and the 2007 Protocol on applicable law (where relevant); and (2) an information brochure on the international recovery of maintenance for the general public. The practical handbook for judges and the brochure will be made available in print and online and is expected to be published in English, French and Romanian in 2013.

c)

Electronic tools

Work is continuing on the development of the automated case-management system, iSupport, which, with the help of existing technology, will further improve co-operation, efficiency and consistency in the processing of applications under the 2007 Child Support Convention. 36

Hague Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, at , viewed on 14 May 2013, and Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, at , viewed on 14 May 2013.

Hague Conference on Private International Law—Work in ͚͙͚͘

Thanks to supplementary funding provided by Norway and an in-kind contribution by Alphinat Canada, an electronic version of the Country Profile for the 2007 Child Support Convention has been completed. The following states tested the e-Country Profile in November 2012: Canada (British Columbia), Luxembourg, Norway, the Slovak Republic, and the United States of America. In addition, European Union Member States gained access to the e-Country Profile in December 2012. It consists of a standard form developed by the Hague Conference to assist Contracting States in fulfilling their information-sharing obligations as Parties to the Convention, including information on designated Central Authorities and on national laws regarding procedures for child support. The e-Country Profile will become more widely available in early 2013.

͗.͖ ͗.͖.͕ a)

International Legal Co-operation and Litigation Apostille Convention ( ) Promoting ratifications and accessions

In 2012, Nicaragua and Uruguay acceded to the Apostille Convention. As of 31 December 2012, the Convention counted 104 Contracting States (including all 27 European Union Member States). The Apostille Convention is the most widely ratified or acceded to Hague Convention. Its popularity is largely due to its relevance in everyday lives of people and cross-border business transactions. With several million Apostilles issued every year throughout the world, the Apostille Convention is also the most widely used of all the Hague Conventions. The accession of Nicaragua and Uruguay reaffirms the growing interest of Latin American States in the Apostille Convention. With the support from the Hague Conference Latin American office, all Latin American States are either a Contracting State to the Convention or actively considering acceding to it.

b)

Workshops and seminars

In September 2012, the Permanent Bureau participated in an expert group hosted by the European Commission to discuss a future proposal for a legislative initiative on promoting free movement of public documents within the European Union. The expert group meeting is a result of a public consultation launched by the European Commission Directorate-General for Justice in December 2010 with the publication of its Green Paper entitled Less Bureaucracy for Citizens. The expert group meeting was an opportunity for the Permanent Bureau to learn about the current state of affairs in Europe and answer questions concerning the electronic Apostille Program (‘e-APP’). 37

Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents, at , viewed on 14 May 2013.

͚ – Micah R. Thorner and Kay Jagath Rommerts

In November 2012, the Permanent Bureau participated in a workshop organised by the Ministry of Justice of Viet Nam entitled ASEAN Regulations and Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents in Hội An, Viet Nam. Experts from several ASEAN Member States, namely, Cambodia, Indonesia, Laos, Philippines, Singapore and Thailand, as well as representatives from the ASEAN Secretariat attended the workshop. There, the Permanent Bureau presented the Apostille Convention (including the e-APP) and stressed the benefits of the Apostille Convention in facilitating the global circulation of public documents. It should be noted that in this regard ASEAN is currently exploring ways to simplify the authentication requirements for public documents, whether by accession to the Convention or by the development of a regional agreement modelled on the Convention. On 14 December 2012, the International Chamber of Commerce (‘ICC’) urged in a press release that all States should join the Apostille Convention. The ICC confirmed the Apostille Convention as an instrument that facilitates cross-border trade and foreign investment; the World Bank already emphasised this in its 2010 report, Investing Across Borders.

c)

Special Commission meeting to review the practical operation of the Apostille Convention ( )

A Special Commission meeting took place in The Hague from 6 to 9 November 2012 to review the practical operation of the Apostille Convention. This was the third meeting of its kind (following meetings in 2003 and 2009) and the first to be dedicated exclusively to the practical operation of the Apostille Convention (the 2003 and 2009 meetings also involved the review of other Hague Legal Co-operation Conventions). This was a very successful meeting given the useful discussions and the wide representation from various regions in the world. Observers from 75 States and international organisations and 162 experts attended the meeting. Thirty Conclusions and Recommendations were adopted by Special Commission experts, which provide an authoritative statement on the interpretation and application of the Convention.38 The Special Commission meeting was an important opportunity to discuss the Convention’s workings. Experts considered questions regarding the Convention’s application and examined options to further simplify the Apostille process. The Special Commission reaffirmed the effectiveness and practical operation of the Convention. Experts also endorsed the Handbook on the Practical Operation of the

38

See Conclusions and Recommendations of the 2012 Special Commission meeting on the practical operation of the Apostille Convention, at , visited on 15 March 2013.

Hague Conference on Private International Law—Work in ͚͙͚͘

Apostille Convention (‘Apostille Handbook’).39 The draft of this handbook was used as a reference source during the meeting. The Permanent Bureau was particularly pleased to welcome several nonMember States to the meeting, mostly from Latin America and Southeast Asia, which expressed an interest in joining the Convention. Another positive sign was the attendance of a delegation of high-level officials from Burundi, which resulted from collaboration with TradeMark East Africa to promote the Convention among Partner States of the East African Community.

d)

Apostille Handbook / Brief Implementation Guide / The ABCs of Apostilles

With the assistance of an Experts’ Group which met in The Hague in 2011 May,40 the Permanent Bureau finalised a draft of the Apostille Handbook in 2012 after the publication of The ABCs of Apostilles 41 brochure in 2010 and How to Join and Implement the Hague Apostille Convention in 2011.42 The Handbook, which is designed to assist Competent Authorities in carrying out their functions under the Convention, received the endorsement of the Special Commission at its meeting in 2012 and is due to be published in the course of 2013.43

e)

Electronic Apostille Program (e-APP)

In January 2012, the word ‘pilot’ was removed from the title of the e-APP, reflecting the success of the program and the fact that the e-APP has in fact become a reality in many parts of the world. As Uruguay joined on 31 December 2012, numerous other States that have implemented at least one component of the e-APP. Over

39 40 41 42

43

See Draft Handbook on the Practical Operation of the Apostille Convention at visited on 15 March 2013. See supra note 40. The ABCs of Apostilles is targeted to members of the public who use Apostilles in the course of their cross-border activities. How to Join and Implement the Hague Apostille Convention is a brief implementation guide designed to assist authorities in new or potential Contracting States that are assessing the possibility of acceding to the Apostille Convention or that are actively preparing its implementation. The first part was the publication of The ABCs of Apostilles brochure in 2010 intended for members of the public that use Apostilles in the course of their cross-border activities. This was followed by the publication of the How to Join and Implement the Hague Apostille Convention guide in 2011, which is designed to assist authorities in new or potential Contracting States that are assessing the possibility of acceding to the Apostille Convention or that are actively preparing its implementation.

͚ – Micah R. Thorner and Kay Jagath Rommerts

150 Competent Authorities from 16 Contracting States now participate in the programme.44 At its meeting in November 2012, the Special Commission recognised the value of the e-APP as a tool to further enhance the secure and effective operation of the Apostille Convention and urged Contracting States that had not yet done so to actively consider implementing at least one of its components.45 As has been the case for almost every year since its launch, an international forum on the e-APP was held in 2012. Under the auspices of the Turkish Ministry of Transport, Maritime Affairs and Communications in collaboration with the Permanent Bureau, the 7th International Forum on the electronic Apostille Program (e-APP) was held in Izmir, Turkey, from 14 to 15 June, 2012. The event was co-hosted by the IT Law Institute of Istanbul Bilgi University, Yaşar University, the Internet Board of Turkey and the Information and Communication Technologies Authority of Turkey. Approximately 120 experts from 31 countries attended the Forum and it was the first of this kind to be held in Eurasia. It provided an international venue for the exchange of information on the latest developments of the e-APP worldwide, including the achievements made thus far. The meeting participants also discussed plans for the implementation of the e-APP in Turkey. Therefore, the Izmir Forum was an excellent opportunity to assess the advantages of the e-APP and to draw from the experience of the growing number of States that have implemented or are planning to implement either one or both components of the e-APP. The Permanent Bureau also took part in other e-APP meetings which took place in 2012 in Canada, Switzerland and Turkey.

͗.͖.͖ a)

Service Convention ( ) Promoting ratifications and accessions

In 2012, Armenia, Montenegro, and the Republic of Moldova acceded to the 1965 Service Convention. Promotion to accession to the Service Convention occurred throughout the year at numerous meetings, including at Latin American regional events and missions.47 44

45

46

47

See Implementation Chart of the e-APP at , visited on 15 March 2013 (listing contracting States that have implemented at least one component of the e-APP and their corresponding implementation dates). See Conclusions and Recommendations of the 2012 Special Commission meeting on the practical operation of the Apostille Convention, at , visited on 15 March 2013. Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, at , viewed on 14 May 2013. See Seminar on the work of the Hague Conference and its relevance for the Caribbean Region and Bermuda, discussed in Section 5.1, Developments at the Regional Level.

Hague Conference on Private International Law—Work in ͚͙͚͘

b)

Practical Handbook on the

Service Convention

Even though demand for the third edition of the Practical Handbook on the Operation of the 1965 Service Convention (2006) remains high, preparations are underway for an updated version containing developments in electronic service and recent case law.

c)

Participation in seminars

With the view to promote good practices under the 1965 Service Convention and to keep abreast of developments regarding the service of documents, the Permanent Bureau continues to co-operate with judicial officers (huissiers de justice) at the international and regional level. The Permanent Bureau participated in several events organised by judicial officers in Canada, Morocco and South Africa, the latter being the 21st International Congress of the International Union of Judicial Officers in Cape Town from 1 to 4 May 2012.

͗.͖.͗

Evidence Convention (

)

In 2012, Armenia, Colombia, and Montenegro acceded to the 1970 Evidence Convention. Accession was promoted throughout the year. Promotion to accession to the Evidence Convention Service Convention occurred throughout the year alongside the Service Convention (see above).

͗.͖.͘

Access to Justice (

)

The Hague Conference continued to support ratification and accession to the 1980 Access to Justice Convention throughout 2012 at numerous events. One event where The Hague Conference’s effort came to fruition was the regional seminar for the Caribbean Region and Bermuda in Bermuda in May 2012.50

͗.͖.͙

Choice of Court Convention (

)

The Permanent Bureau continues to monitor developments in various States regarding the ratification of the Choice of Court Convention.

48

49 50 51

Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters, at , viewed on 14 May 2013. Hague Convention of 25 October 1980 on International Access to Justice, at , viewed on 14 May 2013. See Section 5.1, Developments at the Regional Level. Convention of 30 June 2005 on Choice of Court Agreements.

͚ – Micah R. Thorner and Kay Jagath Rommerts

The European Union, which is signatory to the Convention, adopted the Brussels I Recast Regulation (Regulation (EU) No 1215/2012 of 12 December 2012) on jurisdiction, recognition and enforcement of judgments in civil and commercial matters. The Brussels I Recast Regulation includes rules on choice of court agreements in line with the Convention. The recast Regulation will take effect two years after its entry into force. Formal approval of the 2005 Convention is expected by the European Commission soon. During the course of 2012, experts from the Permanent Bureau also met with officials from other States to discuss the Choice of Court Convention. Ratification and accession of the 2005 Choice of Court Convention were also promoted at a number of regional events, including the regional The Relevance of the Hague Conventions for the Caribbean Region and Bermuda seminar in May 2012.52 Promotion of the Convention also took place at the EU-Russia: Towards Full Mutual Recognition of Judicial Decisions conference organised by the Franco-Russian Legal Society. The event, which took place at the Court of Cassation in Paris, France, offered participants from across the European Union and Russia an occasion to take stock of the Choice of Court Convention and the benefits that its entry into force will bring to cross-border business. The timing of the event was significant as the Russian Federation is currently studying the Convention with a view to possible ratification. The international business community has indicated that it hopes the 2005 Choice of Court Convention will enter into force in the near future. In a 29 November 2012 statement, the International Chamber of Commerce (‘ICC’) “reaffirmed its support for the Hague Choice of Court Convention and urge[d] governments to bring it into force without further delay.” The ICC noted that the Convention was a “necessary tool towards effective cross-border dispute resolution” that “provides international commercial transactions with increased certainty.” It also stressed that implementation of the Convention would contribute to a favourable climate for trade and investment.

͗.͗ ͗.͗.͕

International Commercial Finance Law Choice of Law in International Contracts

From 12 to 16 November, 2012, over 115 experts from 59 States, the European Union and a number of international and non-governmental organisations attended the Special Commission meeting on the Choice of Law in International Contracts and unanimously agreed to recommend that the Hague Conference should finalise the Hague Principles on the Choice of Law in International Contracts (‘Hague

52

See Section 5.1, Developments at the Regional Level.

Hague Conference on Private International Law—Work in ͚͙͚͘

Principles’). The goal of these Principles is to reinforce party autonomy via global rules pertaining to the choice of law in international commercial contracts. The text of the Draft Principles, as approved at the November 2012 Special Commission meeting, are available on the Hague Conference website.53 In addition to approving the text of the Draft Principles, Special Commission experts also agreed to a process for finalising an accompanying Commentary to the Draft Principles. This Commentary would include practical examples and additional explanations regarding the application of the Principles. It is expected that the Principles will complement the 2005 Choice of Court Convention. Although the Convention guarantees the freedom of contracting parties to choose a jurisdiction, it does not address the issue of the choice of the applicable law in international contracts. It is this aspect of party autonomy that has been the subject of research by the Permanent Bureau since 2006.

͗.͗.͖

Traffic Conventions

The Hague Conference continued to follow developments in connection with the European Commission’s study on the relationship between the 1971 Traffic Accidents Convention and Regulation (EC) No 864/2007 on the applicable law to non-contractual obligations (‘Rome II’).

͗.͗.͗

Securities Convention (

)

The 2006 Securities Convention is designed to clarify and predict the law governing issues affecting the holding and transfer of intermediated securities. Examples of intermediate securities are securities credited to an account with a broker, bank, clearing agency or other intermediary. The Permanent Bureau continued to promote the 2006 Securities Convention in 2012, at regional seminars as well as other events such as a Hague Securities Convention Workshop held in Johannesburg, South Africa from 30 April to 6 May 2012, which offered participants an occasion to become familiar with the Securities Convention.

53

54 55

See Draft Hague Principles as Approved by the November 2012 Special Commission Meeting on Choice of Law in International Contracts and Recommendations for the Commentary at , visited 15 March 2013. Hague Convention of 4 May 1971 on the Law Applicable to Traffic Accidents, at , viewed on 14 May 2013. Hague Convention of 5 July 2006 on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary, at , viewed on 14 May 2013.

͚ – Micah R. Thorner and Kay Jagath Rommerts

͘

Co-operation with Sister Organisations (UNCITRAL and UNIDROIT)

The Permanent Bureau continued its co-operation with a large number of intergovernmental as well as non-governmental international organisations. Special mention should be made of the continued close co-operation with the United Nations Commission on International Trade Law (UNCITRAL) and the International Institute for the Unification of Private Law (UNDROIT).56 The annual co-ordination meeting of the heads of the Secretariats of the three organisations took place in Rome on 5 June 2012. The Secretary General also participated as an observer in the UNDROIT Governing Council in May 2012 (Rome). In addition, the Hague Conference participated as an observer in a in Rome Committee of Governmental Experts on the Enforceability of Close-Out Netting Provisions meeting from 1 to 5 October in Rome. The purpose of the meeting was to discuss the nine Principles on close-out netting that had been prepared by an experts group (with the Hague Conference participating as an observer). A subsequent meeting is planned for March 2013.

͙ ͙.͕

Developments at the Regional Level and Efforts of the International Centre for Judicial Studies and Technical Assistance Developments at the Regional Level

In 2012, the Permanent Bureau continued to expand its regional presence in certain target areas. Those places include specific focus areas in the Americas, the Caribbean, the Asia Pacific, and Africa. Activities on a regional level encourage co-operation and co-ordination among States with special cultural, geographic and linguistic ties. In turn, this facilitates more effective adaptation of the Hague Conventions to the particular legal environments shared by States on a regional level. In addition to its regional programmes, the Permanent Bureau has also continued to pursue the establishment of regional offices as a means of providing greater access for States to the Hague Conference. The activities described below were supported by the International Centre for Judicial Studies and Technical Assistance.

56

See also Info. Doc. 1 (April 2012) for the attention of the April 2012 Council of on General Affairs and Policy, at , visited 15 March 2013.

Hague Conference on Private International Law—Work in ͚͙͚͘

a)

The Americas

Beginning in 2005, the Hague Conference embarked on a Special Programme for Latin American States.57 The expansion of this programme over the past seven years was made possible by support and co-ordination provided to the Permanent Bureau by the Liaison Legal Officer for Latin America. In addition, the Regional Office in Latin America continues to benefit from the work of a part-time Legal Assistant, who has been working for the Liaison Legal Officer for Latin America since 2009. The Regional Office has continued to provide essential support throughout Latin America by providing the following services: responding to requests from officials, judges, practitioners and academics in the region; organising and running training sessions for legal actors; assisting with the preparation of regional seminars and providing logistical and organisational support; revising and translating documents; and communicating with National Organs and Central Authorities to encourage greater participation in Hague Conference activities. Such activities included the completion of questionnaires and attendance at Special Commission meetings. The Regional Office in Latin America worked with the Central American Judicial Council to organise its second meeting in Antigua, Guatemala, in 2012. Attendees included Presidents or Vice Presidents of the Supreme Court of Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, and Puerto Rico. There, the Liaison Legal Officer presented the Hague Child Protection and Legal Co-operation Conventions. Participants were subsequently asked to consider the Hague Conventions as helpful tools to develop and harmonise judicial co-operation both at the regional and global level. In light of this meeting, the Judicial Council agreed to explore how to best promote and implement the Hague Conventions throughout Central America. There have also been considerable developments regarding the Apostille Convention in the Latin American region throughout the year. As noted above, Nicaragua and Uruguay acceded to the Convention. And at present, the national legislatures of Chile, Guatemala, and Paraguay are considering whether to become parties. The Permanent Bureau, through its Regional Office for Latin America offers support to States, such as Bolivia, Brazil and Cuba, which are currently studying accession to the Convention.

57

States which have previously received support from the Liaison Legal Officer for Latin America include Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela, as well as Canada, Spain and the United States of America.

͚ – Micah R. Thorner and Kay Jagath Rommerts

b)

The Asia Pacific Region

The Council during its annual meeting from 17 to 20 April 2012 endorsed the initiative of the Secretary General to establish an Asia Pacific Regional Office. The Council welcomed the generous offer from the Hong Kong SAR to host this Office, which is the second regional office of the Hague Conference.58 The official opening of this new office took place on 13 December 2012 and was attended by the Representative of the new Asia Pacific Regional Office, The Honourable Mr Justice Michael J. Hartmann; the Secretary General of the Hague Conference, Mr Hans van Loon; and numerous high-level officials, including top ministers from the Governments of China and the Hong Kong SAR such as the Chief Executive of the Hong Kong Special Administrative Region, the Vice Minister of Foreign Affairs of the People’s Republic of China, and the Secretary for Justice of the Hong Kong Special Administrative Region.

c)

The Caribbean Region

In the context of promoting the work of the Hague Conference in the Caribbean, from 21 to 24 May, the Government of Bermuda, in collaboration with the Permanent Bureau, and with the support of the Commonwealth Secretariat in London, organised The work of the Hague Conference on Private International Law and its relevance for the Caribbean Region and Bermuda seminar. This Seminar covered each of the main areas of private international law addressed by Hague Conventions, namely (1) child protection, family and property relations, (2) legal co-operation and litigation, and (3) commercial, torts and financial law. Attendees to this event included 125 representatives from more than 20 States and overseas territories, international organisations and experts from the Permanent Bureau of the Hague Conference.59 The goal of the Seminar was to provide information to participants about the Hague Conference in general and to discuss several Hague Conventions and their relevance to the region and connected jurisdictions in particular. The participants agreed to share information obtained from the Bermuda Seminar with the relevant authorities of the States in the Region, as well as regional and international organisations and professional associations. States which had not yet become a Member of the Hague Conference pledged to explore the possibility of doing so. The Seminar participants further welcomed the fact that a number of States in the Region have already become Contracting States to various Hague Conventions, and that a number of these Conventions apply to overseas territories in the Region by way of extension. With respect to Conventions

58 59

As mentioned before, Buenos Aires, Argentina, is home to the first regional office of the Hague Conference. Participating States in the Bermuda Seminar are listed in note 63, infra.

Hague Conference on Private International Law—Work in ͚͙͚͘

that are not yet applicable, each jurisdiction was encouraged to actively consider its merits and assess the possibility of joining the Conventions by way of ratification or accession, or by having them extended to the jurisdiction. This Seminar was the first of its kind that focused primarily on Caribbean States. In addition, this year States will consider the possibility of organising a follow-up event in 2014.

d)

Africa

In collaboration with the Governments of France, Belgium, Canada, Italy, the Netherlands and Switzerland, the Hague Conference organised the Conference of Francophone sub-Saharan Africa on the Strengthening of Family and Alternative Care. This four-day workshop on intercountry adoption took place in Dakar, Senegal in November 2012. This event served as a follow up on work concluded at the first Francophone Seminar held in The Hague, the Netherlands, in June 2009. The November 2012 workshop included more than 60 experts from Central Authorities, the judiciaries and international organisations. Participants included representatives from countries of origin which are States Parties60 to the Convention and States of origin which have shown an interest in acceding.61 In addition, French-speaking experts from Belgium, Canada, France, Italy, the Netherlands, Switzerland and the United States of America, as well as experts from other international organisations (such as UNICEF) and non-governmental organisations participated in the workshop.62 The aim of the workshop was to bring together experts and judges from different French-speaking countries in order to increase knowledge about the Convention and promote its practical implementation in these countries. The agenda also included an opportunity for experts to share their respective experiences and good practices identified with respect to the operation of the 1993 Intercountry Adoption Convention. The workshop also encouraged other countries (1) to consider joining the Hague Conference; and (2) to consider signing and ratifying or acceding to the 1993 Intercountry Adoption Convention in order to guarantee that intercountry adoptions take place in respect of the best interests of the child.

60 61 62

Parties to the Convention include: Burkina Faso, Burundi, Guinea, Mauritius, Madagascar, Mali, Rwanda, Senegal and Togo. States that have shown interest in joining include: Benin, Congo, Côte d’Ivoire, Niger, Haiti and Democratic Republic of Congo. The non-governmental organisation included: EurAdopt, International Social Service, Save the Children and the African Child Policy Forum (‘ACPF’).

͚ – Micah R. Thorner and Kay Jagath Rommerts

͙.͖

The Centre’s Technical Assistance and Judicial Training Activities

The Hague Conference International Centre for Judicial Studies and Technical Assistance (‘Centre’) co-ordinates technical assistance and judicial training programmes in the form of customised support to States seeking assistance before becoming a Party to one or more of the Hague Conventions. The Centre also assists with programmes or seminars designed for States which have expressed a desire for assistance with the implementation or training on the operation of Hague Conventions. Now, almost in its sixth year of operation, the Centre continues to build its role as an integral part of the Permanent Bureau. In 2012, the Centre played a pivotal role in providing support to the following States and / or regions: Antigua, Argentina, Benin, Bulgaria, Cambodia, Caribbean States,63 Chile, Colombia, Croatia, Ethiopia, Francophone Africa,64 Ghana, Haiti, Korea, Lesotho, Mozambique, Paraguay, Romania, Russian Federation, Senegal, South Africa, Turkey and Viet Nam. In short, through its operations, the Centre has supported assistance given to numerous countries and the surrounding regions by: identifying, formulating, and implementing projects; assisting in the drafting of legal instruments; improving the institutional capabilities of governments and executing agencies; formulating development strategies and methods for improving the rule of law; promoting useful technologies to facilitate operation of the Hague Conventions; and fostering regional co-operation. In light of the successful implementation of these tasks, and exponentially growing needs, the past few years have seen a substantial increase in requests for assistance made to the Permanent Bureau.

63

64

A Commonwealth Secretariat co-sponsored regional seminar provided technical assistance. The regional seminar entitled The work of the Hague Conference on Private International Law and its relevance for the Caribbean Region and Bermuda, was attended by Caribbean representatives from Anguilla, Antigua, Barbados, Belize, Bermuda, British Virgin Islands, the Cayman Islands, Dominican Republic, Grenada, Haiti, Jamaica, St Kitts and Nevis, St Lucia, Trinidad, Turks and Caicos. Representatives from the United Kingdom and the United States of America were also present at this event. Invitees included experts from countries of origin that are Party to the Convention and countries of origin that have shown interest in joining. Current parties that sent experts are Burkina Faso, Burundi, Guinea, Madagascar, Mali, Mauritius, Rwanda, Senegal and Togo. Prospective or potential countries of origin that sent experts are Benin, Congo, Côte d’Ivoire, Niger, Haiti and Democratic Republic of Congo. Other invitees included French-speaking experts from Belgium, Canada, France, Italy, the Netherlands, Switzerland and the United States of America; as well as experts from other international organisations, such as UNICEF, and non-governmental organisations (among whom Euradopt, International Social Service, Save the Children and African Child Policy Forum (ACPF)).

Hague Conference on Private International Law—Work in ͚͙͚͘

͙.͖.͕

Child Protection Assistance Programme

The Child Protection Assistance Programme (‘CPAP’) provides technical assistance and develops training programmes focused on the Hague Children’s Conventions, in particular the 1993 Intercountry Adoption Convention, the 1980 Child Abduction Convention, the 1996 Child Protection Convention and the 2007 Child Support Convention and its Protocol. These Children’s Conventions provide a practical framework for the realisation of the rights of children and their families. The term ‘families’ includes children’s primary caregivers. By effectively implementing the Hague Children’s Conventions and by complying with their obligations, States give effect to many rights contained in the United Nations Convention of 20 November 1989 on the Rights of the Child (‘Convention on the Rights of the Child’). In the area of child protection, judicial trainings were organised by the Permanent Bureau through its Latin American Office which focused on the 1980 Child Abduction Convention in Colombia.65 Additionally, the Liaison Legal Officer presented the merits of the Hague Children’s Conventions at the Third meeting of the Mexican Network of judicial co-operation for the protection of children (Tercera reunión de la Red Mexicana de Cooperación Judicial para la Protección de la Niñez), held in Mexico on 19 April 2012 (through video-conference) and at the International Congress of operators responsible for the implementation of the rights of children and adolescents (Congreso internacional de los garantes del cumplimiento de los Derechos de los niños, niñas y adolescentes), organised by the 2nd Circuit of Guairá and the Supreme Court of Justice of Paraguay on 5 October 2012. Using a global network of contacts and experts, the CPAP strives to develop solutions to local needs. Assistance might involve providing advice on legislation and structural organisation and capacity building; identifying and overcoming bad practices; and, educating individuals who are responsible for implementing the Hague Children’s Conventions such as judges, government officials and welfare workers, which collectively plays a role in capacity building with respect to child protection systems.

65

As noted below, the Liaison Legal Officer for Latin America met with the Judicial Authorities and the Central Authority (ICBF) in Medellin, Colombia in 2012 to discuss the operation of the 1993 Intercountry Adoption Convention, particularly with regards to the implementation of the principle of subsidiarity and the declaration of adoptability of children. In addition, the Liaison Legal Officer participated in a training of different actors involved in the adoption process. This training was co-organised by the University of Medellin (responsible for the logistics) and the Hague Conference (responsible for the academic programme and selection of experts) with the support of ICBF.

͚ – Micah R. Thorner and Kay Jagath Rommerts

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Intercountry Adoption Technical Assistance Programme

Part of CPAP includes the Intercountry Adoption Technical Assistance Programme (‘ICATAP’), which aims to provide assistance to certain States which are planning ratification of, or accession to the 1993 Intercountry Adoption Convention, or which have ratified or acceded to the Convention but need assistance with implementation of the Convention. ICATAP has played a key role in many successful events and other efforts undertaken in 2012 to meet its objectives. For example, a consultant, seconded by the Central Authority of Luxembourg, came to the Permanent Bureau, and provided training to the Central Authority (‘SENAME’) of Chile. The training was on the legal and technical criteria for the selection, preparation and follow-up support of prospective adoptive parents, as well as on the role and tasks of a Central Authority of a receiving State (in addition to being a State of origin, Chile has started to act as a receiving State for adoptions). The consultant shared her knowledge and experience with other receiving States’ Central Authorities. The Hague Conference Liaison Legal Officer for Latin America met with the Judicial Authorities and the Central Authority (‘ICBF’) to discuss the operation of the 1993 Intercountry Adoption Convention in Colombia, particularly issues related to the principle of subsidiarity and declarations on the adoptability of children. In addition the Liaison Legal Officer and the Principal Legal Officer in charge of adoptions participated in a training session of different actors involved in the adoption process. The training session was co-organised by the University of Medellin (responsible for the logistics) and the Hague Conference (responsible for the academic programme and selection of experts) with the support of ICBF. The Permanent Bureau continues its co-operation with the authorities of Guatemala concerning the implementation and application of the 1993 Intercountry Adoption Convention. In early 2012, it facilitated a mission of the Chilean Central Authority to Guatemala to provide technical assistance to the Guatemalan Central Authority’s (Consejo Nacional de Adopciones, CNA) multidisciplinary team in relation to the assessment of affective bonds developed between a child and caregiver. The Hague Conference Liaison Legal Officer in Latin America travelled to Guatemala in July 2012 to discuss the need to resolve transition cases, which were initiated before the Convention entered into force. The Liaison Officer also explored the possibility of starting a pilot project for the selection of a very limited number of adoption accredited bodies that would be able to assist a small number of prospective adoptive parents in the intercountry adoption of special needs children. After discussions with the relevant authorities and experts, it was decided that the Permanent Bureau would look at the possibility of collaboration on such pilot programme at the appropriate time. Building on the work undertaken in previous years, the Permanent Bureau, in collaboration with UNICEF, provided legal support to Cambodia with the drafting of Regulations (Prakas) on financial issues of adoption and criteria to authorise

Hague Conference on Private International Law—Work in ͚͙͚͘

foreign adoption accredited bodies. The Central Authority of the Philippines provided training to the Central Authority of Cambodia (the Intercountry Adoption Central Authority Committee and Intercountry Adoption Administration (‘ICAA’)) during the month of November and made some recommendations regarding good practices Cambodia may wish to consider in light of its goal to resume adoptions in 2013. Adoptions were temporarily suspended to improve safeguards protecting the best interests of children involved in intercountry adoptions. The training included step-by-step training of ICAA staff on how to assess and process children’s dossiers, prospective adoptive parents’ dossiers and the authorisation of foreign accredited bodies. A delegation from the Ministry of Health and Welfare and the Central Adoption Resources met in The Hague with the Permanent Bureau to discuss the possible signature and ratification of the 1993 Intercountry Adoption Convention in the Republic of Korea (‘Korea’). The meeting focused on the advantages of becoming a party to the Convention, the procedural steps towards signature and ratification, the role of a Central Authority and the existing legal framework in Korea regarding adoptions. In addition, in September, the Permanent Bureau met with the Korean non-governmental organisation Truth and Reconciliation for the Adoption Community in Korea (‘TRACK’). TRACK advocates for transparency with regards to past and present Korean adoption practices and for the protection of human rights of adult adoptees, children and families. Other major topics of discussion included the preparation to accession to the Convention and the importance of signing and ratifying the Convention for Korea. The Permanent Bureau continued to provide legal and technical advice to Haiti during 2012. The Permanent Bureau focused particularly on the draft Law on Adoption and a new administrative procedure for intercountry adoptions. The administrative procedure’s focus rested on strengthening adoption safeguards once the Law on Adoptions enters into force. In December 2012, the draft Law on Adoptions was submitted to the Senate. Therefore, the near future may see further progress on the draft Law. On 12 June 2012, the Parliament of Haiti voted in favour of the ratification of the 1993 Intercountry Adoption Convention. In order for the Convention to enter into force, Haiti will have to deposit its instrument of ratification with the Ministry of Foreign Affairs of the Netherlands. The Dutch Ministry of Foreign Affairs is the depositary for the Convention. In response to these developments, the Permanent Bureau in collaboration with the authorities of Haiti (‘IBESR’) and with the support of the ‘Montreal Group’ drafted a Work Plan for technical assistance that focused on the legal and structural strengthening of the adoption system.66 Haiti plans to resume intercountry 66

The Montreal Group includes the Central Authorities of Belgium, Canada (Quebec and federal authorities), Chile, France, Germany, Italy, the Netherlands, Switzerland, the United States of America, UNICEF and other international experts.

͚ – Micah R. Thorner and Kay Jagath Rommerts

adoptions by early 2013 after the Government of Haiti had temporarily suspended adoptions fearing that existing laws inadequately protected childrens’ interests. An event on intercountry adoption alternatives and controversies took place at the Fifth International Policy Conference on the African Child titled in Addis Ababa, Ethiopia, in May 2012. There, participants adopted the Guidelines for Action on Intercountry Adoption of Children in Africa; a work written in consultation with Permanent Bureau. The Guidelines were endorsed by the African Committee of Experts on the Rights and Welfare of the Child in November 2012. At the invitation of the Benin Ministry of Justice and the Ministry of Family and Social Affairs, and with the support of the Embassy of France in Benin, the Permanent Bureau participated in a seminar on Child Protection and Challenges of Intercountry Adoption, which was organised in order to sensitise senior officials of several ministries, representatives of the judiciary as well as representatives of the civil society to the benefits of ratifying the 1993 Intercountry Adoption Convention. Two meetings were also held with different officials to discuss key issues relating to the implementation and operation of the Convention. With the support of a Swedish adoption accredited body (Adoptionsforum), a Permanent Bureau consultant participated in the Workshop regarding international standards in adoptions in September 2012 in Ghana. As part of the mission, the Consultant met with the authorities involved in intercountry adoption, including Supreme Court judges, in order to discuss the current situation in Ghana and develop recommendations regarding the next steps to be taken for Ghana to accede to the 1993 Intercountry Adoption Convention. The Consultant also discussed at these meetings key implementation issues, such as the establishment of a Central Authority; identifying and certifying accredited bodies; and ensuring adequate consent is provided in order for the adoption to take place. The Permanent Bureau also reviewed and commented on Ghana’s Guidelines on Intercountry Adoptions so as to ensure consistency with the 1993 Intercountry Adoption Convention. Lesotho acceded to the 1993 Intercountry Adoption Convention in 2012. The Permanent Bureau provided guidance to the new Central Authority on available resources to develop an implementation plan; detailed explanations about the operation of the Convention; and the authorisation of foreign accredited bodies. Finally, the Permanent Bureau, with the support of UNICEF, undertook a mission to Mozambique in August 2012 to promote and explain the four modern and currently in force Hague Child Protection Conventions.67 The mission particularly emphasised the 1993 Intercountry Adoption Convention. The Permanent Bureau shared best practices and certain challenges met by States Parties to the 1993 Intercountry Adoption Convention. The Permanent Bureau also proposed a pathway towards accession to this Convention, including guidance on how to 67

Specifically, these Conventions included the 1980 Child Abduction Convention, the 1993 Intercountry Adoption Convention, the 1996 Child Protection Convention and the 2007 Child Support Convention (and 2007 Protocol).

Hague Conference on Private International Law—Work in ͚͙͚͘

ensure that any domestic legislation affecting adoptions is consistent with the Convention. The visit included high-level meetings with three Ministers (the Ministers represented the following departments: Women and Social Action; Justice and Foreign Affairs), Members of Parliament and representatives of the Supreme Court of Mozambique.

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Legal Co-operation and Litigation Assistance Programme

The Legal Co-operation and Litigation Assistance Programme (‘LCAP’) provides technical assistance and develops training programmes focused on the Hague Legal Co-operation Conventions. These Conventions focus on removing obstacles encountered in cross-border litigation, providing easy access to court proceedings and reducing risk of fraud and abuse in the legal process. The framework of the Hague Legal Co-operation and Litigation Conventions provides increased legal security and certainty resulting in benefits such as creating a legal environment which is conducive to foreign investment and trade. The Conventions concerned include the 1961 Apostille Convention, the 1965 Service Convention, the 1970 Evidence Convention, the 1980 Access to Justice Convention as well as the 2005 Choice of Court Convention. LCAP seeks to improve the consistent operation and implementation of these Conventions and may include: diagnostic missions to explore local situations and identify specific needs for technical assistance; providing advice on the practical application of the Conventions, such as legislative, structural and organisational issues; and developing training programmes for judicial and government officials responsible for implementing the Conventions.

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Commercial and Finance Law Assistance Programme

The commercial and finance law assistance programme (‘ComAp’) currently provides technical assistance pertaining to the implementation and operation of the 2006 Securities Convention. Overcoming legal uncertainty through this Convention could improve and strengthen domestic legal and financial systems to encourage foreign investment and trade. However, limitations existed due to the low number of States that had ratified or acceded to the 2006 Securities Convention in 2012, which, in turn, hampered concerted efforts to provide technical assistance.

͚ ͚.͕

Development of the Organisation Growth of the Hague Conference

The Permanent Bureau, in consultation with Members of the Hague Conference, continues to work strategically toward increasing the Organisation’s membership to further expand its presence and reach as a global intergovernmental organisation.

͚ – Micah R. Thorner and Kay Jagath Rommerts

A formal ceremony took place at the Permanent Bureau in the presence of the Minister of Justice of Viet Nam on 28 September. There, the Government of the Netherlands received a letter addressed to the head of the Dutch Treaty Division of the Ministry of Foreign Affairs to sponsor Viet Nam’s Membership of the Hague Conference. The Dutch Government was pleased to do so and sent a proposal to Members of the Organisation through their Diplomatic Missions to admit Viet Nam as a Member of the Conference per Article 2 of the Statute of the Hague Conference. As of 31 December 2012 Zambia (15 March 2004), Colombia (17 July 2006), Lebanon (28 May 2010) and Burkina Faso (7 October 2011) have also been admitted as Members and will join the Organisation upon acceptance of the Statute. The Permanent Bureau continues to encourage these States to proceed with the necessary steps for acceptance of the Statute. As a result, on 31 December 2012, membership of the Hague Conference comprised of 72 Members (71 States and the European Union): Albania, Argentina, Australia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Jordan, Republic of Korea, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Monaco, Montenegro, Morocco, the Netherlands, New Zealand, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Serbia, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Suriname, Sweden, Switzerland, The former Yugoslav Republic of Macedonia, Turkey, Ukraine, United Kingdom of Great Britain and Northern Ireland, United States of America, Uruguay and Venezuela, as well as the European Union. By 31 December 2012, 70 Member States plus the European Union and 69 nonMember States were Parties to one or more of the Hague Conventions adopted since 1951.

͚.͖

Secondments and Internships

In 2012, the Hague Conference welcomed 19 interns from the following countries: Argentina, Australia (Peter Nygh Internship Programme), Azerbaijan, Brazil, Canada, Cyprus, France, Greece, Japan (University of Tokyo), Tunisia, United States of America, and Viet Nam. An expert on secondment was provided by the United States. Switzerland also allowed one of its officials from the Federal Office of Justice to spend 10 months (September 2011 to June 2012) working for the Permanent Bureau.

Hague Conference on Private International Law—Work in ͚͙͚͘

͛

Conclusion

The Hague Conference continues to be a frontrunner in the development of private international law. It does so by playing a central role in the development of multilateral global governance mechanisms in furtherance of cross-border transactions and affairs. In addition to its core tasks, the Hague Conference expanded its collaboration and co-operation with numerous governmental, intra-governmental and non-governmental organisations. In 2012, the Hague Conference also hosted and participated in seminars and conferences in its effort of creating a more just world. Vested in its commitment to the rule of law, the Hague Conference also sought to facilitate and cater to the needs of States in the context of their regional relationships. As such, the Hague Conference continued its effort to establish regional offices and opened its second regional office. The Asia Pacific Regional Office in Hong Kong will be a tremendous resource for States in the Asia and Pacific region and apt to work with and between diverse legal systems in light of improving legal security.

͗

Reflections on the Hague Conference on Private International Law at — Years Forward Peter D. Trooboff* and Frederike E.M. Stikkelbroeck**

Abstract The Hague Conference on Private International Law celebrated its 120th anniversary in April 2013. Establishment of the Conference in 1893 contributed significantly to developing The Hague as the International City of Peace and Justice. From its inception, the Conference has focused its work on three pillars of activities – family law, legal cooperation and commercial law – and has participated in drafting 45 multilateral treaties in the field of private international law. Today the Conference is the world leading intergovernmental organization on cross-border cooperation in civil and commercial matters. This article presents the remarks at a round table during the Conference’s anniversary celebration in which the panelists were distinguished representatives of UNICEF, UNCRC Committee, African Committee of Experts on the Rights and Welfare of the Child, UNIDROIT, UNCITRAL, WTO and World Bank Group. Each of the panelists reflected on the future of the Hague Conference and, in particular, on continued and future cooperation with the Conference during the next 20 years by their respective international organizations. The discussion that followed their individual presentations is also summarized. The panel was also a welcome occasion for the panelists to honor the many years of outstanding service to the Conference of its Secretary General, Hans van Loon, who conceived the panel because he recognized the importance of focusing on this important subject.

*

**

Mr. Trooboff is a former President of the American Society of International Law and is currently Senior Counsel at Covington & Burling LLP, Washington, D.C. He moderated the round table on the future of private international law and the work of the Hague Conference that was held on April 8, 2013, in The Hague. Ms. Stikkelbroeck, who collaborated in preparing this summary of the panel, is currently Senior Legal Counsel with Akzo Nobel N.V. and was formerly Director of the Hague Conference’s International Centre for Judicial Studies & Technical Assistance.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck

͕

Introduction

The panel focused on the work of the three pillars of activities of the Hague Conference: family, legal co-operation and commercial. Its goal was to identify specific proposals for collaboration by the Hague Conference with the international organizations represented. The panel was moderated by Peter Trooboff, who initiated the series of reflections with the following observation prior to introducing the panelists: Two years after his graduation in mathematics from King’s College Cambridge, Alan Turing then 26 years old, published an article in 1936 in the Proceedings of the London Mathematical Society. That article described generally what is come to be called the Turing machine. It was not an actual construct but, if you will, a virtual machine. The article explained the efficiencies of such a machine. Mathematicians will argue about whether Turing covered everything or got it all right. But this much we can say with the benefit of hindsight – this one publication by this young man described many of the key elements of today’s digital age: the overall design and operation of computers, the uses of software programs and the development of algorithms. 77 years later after that article, the article holds up rather well as an astonishing look into the future. I don’t know whether we will do as well today as Alan Turing did in his time, in describing the future of Private International Law today or the role of the Hague Conference. We will certainly try to look at least 20 years into the future and to predict, perhaps even advocate, specific collaborative programs with the Hague Conference by each of the organizations represented here.

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Specific Proposals for Collaboration of the Hague Conference with the Represented International Organizations United Nations Children’s Fund (UNICEF)

Susan Bissell is currently Chief of Child Protection at UNICEF, an appointment that is the culmination of decades of successful completion of many challenging assignments to protect the rights and wellbeing of children. Today with programs in 170 countries her office directs a team of professionals dedicated to among other matters assisting children affected by armed conflict and strengthening systems designed to prevent violence against children. Ms. Bissell’s remarks were as follows: Both the Hague Conference and UNICEF have among our aspirations that of protecting children throughout the world. While we cannot protect them from everything, we can and must protect them from violence, exploitation and abuse. Who are the children we are protecting? They are the 220 million under the age of 5 who do not have birth certificates; the 115 million engaged in the worst forms of child labor; the 1 billion living in countries and territories affected by war;

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward and the thousands of children who languish in institutions the world over. They are also the children living in the 14 countries listed by the Security Council for committing grave violations, such as killing, maiming, recruitment, and sexual violence. These are the numbers we’d like to see reach ZERO – there is an underlying moral rationale for this, a rights imperative, and a sound economic argument. While protecting children is already a big task when children live in homes and communities, it is an even bigger challenge when children are ‘on the move’. Today we see children who move with both parents, or with one parent, mobile on their own – at any age, I hasten to add – alongside a friend, or in the hands of a trafficker. Children and families are mobile in response to climate change or conflict, to unite with extended family, or simply to seek a better life. Mobility in whatever guise can make children particularly vulnerable. With the increasing numbers of children crossing national State boundaries, protection concerns are becoming increasingly cross border and require inter-country collaboration. Although we have different missions and mandates, both UNICEF and The Hague Conference face similar challenges and opportunities in using international law to protect children and support families. We both must grapple with the difficulties involved in applying international legal standards and instruments to a diverse range of national legal systems. Both of our organizations consider not only the focus on the legislation in the country but on its application. And both organizations persevere in these endeavors, despite the challenges, because we understand the importance of international law not just at the statutory level, but in the everyday lives of people, of families, of children. We understand the four Hague Children’s Conventions as well as the Convention on the Rights of the Child as binding legal documents to which we can hold governments accountable for their obligations to children and families, and, at the most basic level, as fundamental building blocks of a system of laws and standards to protect and support children, especially at times in their lives when they may be especially vulnerable. UNICEF recognizes that the importance of the four Hague Conventions in bridging gaps between public and private international law lies not just in ensuring that States regulate issues such as inter-country adoption and maintenance, or respond to international abduction and to trafficking, in a harmonized and systematized manner. The Hague Conventions also matter because their implementation at State level directly effects implementation of the Convention on the Rights of the Child. This commitment to protecting every child is our greatest common bond, and it is a common bond that I sincerely hope we will still be celebrating when UNICEF reaches its 120th anniversary. Both UNICEF and the Hague Conference know that ratification of a convention, and the depositing of official documents, do not signal the end of our work, as great as it may be to arrive at that point. UNICEF and The Hague Conference have enjoyed a particularly fruitful collaboration, co-parenting – as it were – the conventions’ first steps in a country, with UNICEF supporting their operationalization

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck in individual countries, and collaborating with the Hague Conference in addressing particular issues. For example, in many countries UNICEF has taken a role in facilitating missions by the Permanent Bureau to provide technical assistance in implementing the Convention Requirements. And UNICEF works with the government to ensure the policy and legal integration within the whole child protection system such as in building the capacity of child protection services. In Cambodia, for instance, UNICEF supported six Permanent Bureau missions, including one by the Secretary General – and in Guatemala there were nine missions to strengthen that country’s adoption system. We have also worked together on multi-country events, such as regional meetings in Latin America and in Southern Africa. This cooperation both allows for awareness-raising and the identification of training or technical assistance needs in countries yet to contract to the Convention. For example a workshop for Southern and Eastern Africa on all the child-related Hague Conventions in February 2010 has influenced the decisions of two Southern African countries to take steps to join the Inter-country Adoption Convention. Other events supported by UNICEF included the third Malta Conference in March 2009, and training for judges in Madagascar in 2010. A representative of the Hague Permanent Bureau also participated in the Francophone Conference on the Alternative Care Guidelines in Dakar, Senegal, in May 2012, and in a child protection systems conference in New Delhi, India in November 2012. UNICEF would again like to congratulate the Conference on reaching its 120th anniversary. Thank you again for our fruitful collaboration with the Hague Permanent Bureau. There is still much to be done at a time when children are increasingly mobile, and always precious. It is certainly fair to say that the more countries that contract to the Hague Conventions, the better protected children will be. UNICEF stands ready to collaborate with the Hague Conference in every way possible. As we envision our future work together we certainly anticipate paying greater attention to the 1996 Child Protection Convention and its implementation. This will imply capacity building within our own organization, and we will reach out to you for your expertise and experience in this process. To conclude on a personal note: thank you Hans van Loon – and a big thanks to your team – for the warm, collegial working relationships we maintain. We look forward to sustaining these, wherever your future path takes you.

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United Nations Committee on the Rights of the Child (UNCRC Committee) and the African Committee of Experts on the Rights and Welfare of the Child

Benyam Mezmur is a member of the UNCRC Committee and a research fellow and lecturer at the University of Western Cape in Cape Town, South Africa. He is the Vice Chairperson of the African Committee of Experts on the Rights and

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward

Welfare of the Child with a special responsibility for addressing concerns with violence against children. Mr. Mezmur’s remarks were as follows: I would like to thank the organizers for the kind invitation. Indeed, in a fashion unmistakable in both clarity and intent, this panel reaffirms the fact that one of the organization’s priorities remains children’s rights. It also underscores the point that the Hague Conference is indeed a global and multifaceted organization, with an ever-increasing interest and impact on the African continent. As outlined in the 2012 Annual Report of the Conference, this celebration will offer an occasion not only to measure the achievements of the Hague Conference in terms of the vision of its founders and of evolving needs but also to reflect on its future mission. As experts from other international organizations, we are expected to present our views on the role of, and possibilities and needs for co-operation with, the Hague Conference. I will limit my intervention in terms of geography, target group, and treaty, namely Africa, children, and the four Hague Conventions - on the 1980 Child Abduction Convention, the 1993 Intercountry Adoption Convention, the 1996 Child Protection Convention, and the 2007 Child Support Convention. As preliminary points: Africa is increasingly looking inwards to find solutions to its challenges based on its African institutions. Second, African countries are increasingly trying to learn from each other’s countries and regions experiences, which again makes cooperation with African institutions important. In this respect, the concept of comparability is important. Africa is not only the new frontier for Intercountry Child Adoption, but the issues covered by the other three Hague Children’s Conventions are gaining increasing attention. Unfortunately the number of African countries that are members of the Hague Conference is very limited. The Hague Conference is aware of some of the obvious reasons why this is the case, and maybe through some sort of cooperation and international support, an aggressive effort can be made to increase such representation. On a related note, the number of States Parties to the Hague Children’s Conventions is increasing with time. For instance, Rwanda and Lesotho are two African countries that joined the Hague Convention in 2012. A few more African countries are on course to do so. While on the topic of ratification, the UNCRC Committee has consistently and systematically recommended to States Parties to the United Nations Convention on the Rights of the Child (the UNCRC) to ratify the Hague Convention. It has done so since early 1994, before the coming into force of the Hague Convention. In fact, in its recommendations, the CRC Committee’s language has partly shifted with time emphasizing the increasing importance of ratifying the Hague Convention. This shift in emphasis is notable starting from “the hope that the State party will become a party” to recommending that “the State party (…) [r]atify”, to “recommends that the State party (…) [s]peedily ratify”, to the CRC Committee “notes with regret that the State party has still not ratified” the Hague Convention. A similar level of lobbying and collaboration is needed not only to sustain this push in relation to

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck the Hague Intercountry Adoption Convention by the African Committee, but also in the context of the other Hague Children’s Rights Conventions by both Committees. One of the issues that cooperation helps to minimize is inconsistency. This means inconsistency in conceptualization, in implementation as well and in follow-up. Much clarity is needed in relation to some principles and concepts in the context of intercountry adoption. Therefore, the Hague Conference can strongly cooperate with treaty bodies in proposing, and giving input for a General Comment on Article 21 of the UNCRC. In fact, the idea of a General Comment on Article 21 of the UNCRC is not so much an idea whose time has come, but rather an idea whose time is few years late in coming. In addition, a treaty body is often as strong as its information base. Issues related to Hague Children’s Convention are not necessarily receiving the attention they deserve in the consideration of States Parties Reports by Treaty Bodies. In this respect, a leaf can be taken from the Global Initiative to End Corporal Punishment that regularly submits briefs to the relevant human rights treaty bodies (including the CRC Committee and the African Committee) prior to the consideration of a State Party Report. This has significantly helped in raising the information base of these treaty bodies, and contributed to adding clarity to the nature of States Parties obligations on the subject matter. Judicial training, which the Permanent Bureau has done in few occasions, still makes a significant contribution in promoting the Hague Children’s Conventions. In the area of intercountry adoption, a number of case laws on the African continent bring to the fore the role of the international players, notably the Hague Permanent Bureau staff, Central Authorities, foreign adoption agencies, treaty bodies and the international media. This is because, in the absence of a uniform approach and because legislation in a number of African countries has not been finalised, judge-made law in this region is resulting in inconsistencies (and sometimes incoherence) in the interpretation and application of the principles and rules governing inter-country adoptions. Moreover, developments are seemingly taking place in the absence of a clear role for Central Authorities and other governmental structures, which is highly undesirable. As stated elsewhere, ‘intercountry adoption is not purely a matter for private legal regulation (…) [it] adds the foreign Central Authority, the foreign accredited adoption service provider, the local Central Authority and local accredited inter-country adoption service provider to the equation. Hence it is a status changing event which falls properly within the sphere of the executive branch of government.’ Until such time that the executive branches of government take the lead in this process, the urgent need for a regular and concrete judicial training by the Hague Conference for a number of African countries continues to be real. Regional seminars and workshops continue to play a significant role to promote the work of the Hague Conference, but also to collectively provide training and support to States likely to share many of the same concerns or obstacles. The Francophone Seminar on the Hague Convention, which was organised by

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward the Hague Conference on Private International Law (in partnership with other organisations) from 22-26 June 2009 is worthy of mention. This seminar brought together experts and judges (mainly from French-speaking African countries which are Contracting States to the Hague Convention) in order to promote a good understanding of the Hague Convention. A similar seminar was organised in 2007. In addition, the African Judicial Seminar at the Hague (2006) in the context of the Hague Project for International Co-operation and the Protection of Children in the Southern and Eastern African Region – which explored the role of the Hague Conventions in the practical implementation of the UNCRC and the African Charter on the Rights and Welfare of the Child (ACRWC) is also notable. A conference in February 2010 for Eastern and Southern Africa on the Hague Children’s Conventions, which focused on the benefits of the Conventions for the Region as a whole, as well as practical aspects of implementation, is also exemplary. The potential of these kinds of events to improve the implementation of the Hague Conventions in Africa, and attract other States to ratify the treaty is crucial. These events also help to profile the advantages of the Hague Conventions; offer a platform for networking and dialogue; and assist in identifying regional and sub-regional challenges and opportunities to improve the cross-border protection of children. Such events can also be seen as capacity building exercises, contributing to the expertise of stakeholders (such as judges) on the implementation of the Hague Conventions. The challenge in relation to the 1993 Child Adoption Convention in a number of African countries is predominantly “misconception”. For instance, countries feel they will have to open the floodgates by ratifying the Hague Convention, or open up for adoptions by same-sex couples, or believe that ratification will be a silver bullet. However, in relation to the 1996 Child Protection Convention, lack of awareness of the existence of this Convention seems to be a barrier. There is again a need to cooperate with various institutions, including the treaty bodies, but also Regional Economic Communities at the African level (e.g., the Economic Committee of West African States and the Southern Africa Development Community), to push the agenda of this Convention forward. Another important area in which I foresee the need for a more concrete and strong cooperation with various institutions, including the treaty bodies and regional organizations (such as the African Union and RECs), is in international surrogacy. The issues revolving around international surrogacy are complex and becoming more pressing. There are currently no international laws which make provision for rights of parentage either from the perspective of the commissioning parents, gestational mothers or most importantly the child. It is therefore no surprise that on Thursday, 7 April 2011, the Hague Conference’s Council on General Affairs and Policy invited its Permanent Bureau to intensify its work on the broad range of issues arising from international surrogacy arrangements. These issues include the legal status of a child born as a result of an international surrogacy arrangement; the legal relationship between the commissioning parents and a child born as a result of a surrogacy arrangement taking place

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck overseas; issues related to documentation such as birth certificates, guardianship orders, passports etc; the transfer of legal parentage; the child’s nationality, immigration status; and who has parental responsibility for the child, who is under a duty to maintain the child, etc. Coming up with an agreeable and solid international instrument on international surrogacy will by no means be a “walk in the park”. Rather it is probably a situation of “ten percent inspiration and ninety percent perspiration” work. The so-called prescriptive and restrictive approaches, a liberal and non-interventionist regime strongly promoted by few but influential countries, issues of international consensus, comity, and so forth, will require cooperation and collaboration at the highest level including from treaty bodies. Maybe 20 years down the line, it might not only be possible but desirable too to establish a practice and system of intercountry adoption that works not on the basis of receiving countries that approach sending countries, but rather a reverse of this model, which emphasizes the need of countries of origin and protects them from undue pressure from receiving countries. This would be more or less a “don’t call me, I will call you” system. In addition, with the Optional Protocol on Individual Complaints (OPIC) of the CRC Committee hopefully coming into force this year, it also opens another avenue for input from the Hague Conference in the work of the CRC Committee. I also note with great interest and appreciation the recent opening of the new Hague Conference Asia Pacific Regional Office in Hong Kong, which was done after the endorsement of this initiative by the Hague Conference’s Council on General Affairs and Policy in April 2012. The new office, which is expected to be a significant resource for all States in the Asia Pacific region was opened in December 2012. Some of the proposals mentioned above would indeed be facilitated well with the presence of a similar regional office in Africa. To conclude, the Hague Conference is already undertaking most of these issues mentioned above though there is room for deepening and widening the efforts. Most of these issues need additional resources. I don’t believe in the saying, the “lack of money is the root of all evils”. It is my submission that these would be resources well utilized to cover the part of the world with more than fifty percent of its population below the age of eighteen, that has a number of challenges but also opportunities for the application of the Hague Children’s Conventions. In this respect, the treaty bodies can and should play a significant role, and cooperate with the Hague Conference in bringing this to fruition. Maybe on a lighter note, in 20 years when the Hague Conference celebrates its 140th Anniversary, I am sure I am not being too optimistic to expect (rather than hope) that we will have one Excellency speaking on “the Impact of the Hague Conference in the Africa Region”. My life expectation as an Ethiopian male is fiftyseven years and I hope to still be around and active at that time. Congratulations in turning 120 years as that is not an easy feat! Clearly, this is not an organization that is counting its days, but making its days count. It is not growing old, but growing up.

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward

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International Institute for the Unification of Private Law (UNIDROIT) and United Nations Commission on International Trade Law (UNCITRAL)

José Angelo Estrella-Faria has served since October 2008 as the Secretary General of UNIDROIT. He served for many years as Senior Legal Officer with the Secretariat of UNCITRAL in Vienna. He also served for a number of years with the General Legal Division of the United Nations Office of Legal Affairs in New York. Mr. Estrella-Faria reflected on the Hague Conference’s potential collaboration with both UNIDROIT and UNCITRAL. His remarks were as follows: It is an honour to participate at this high level panel as we celebrate the 120th anniversary of the Hague Conference. UNIDROIT and the Hague Conference have similar mandates, namely to harmonise and unify the law in two distinct, but complementary areas: private international law (Hague Conference) and substantive private law (UNIDROIT). We share a long history of close cooperation, which I would not be able to review in the limited time available to this panel. As a matter of fact, this is not what I have been asked to do today. It is befitting of the Hague Conference’s dynamic and visionary Secretary-General Hans Van Loon, that we celebrate the Conference’s jubilee not by taking stock of the Conference’s remarkable record of achievements in its long history, but by looking ahead at its development in the next 20 years. We are all eager to jump back into the future, so I shall be brief. Here is what the crystal ball of a sister organisation of the Hague Conference shows me: Participation in international rule-making. The early era of legal harmonisation, when bodies such as the Hague Conference or UNIDROIT were created, remained confined to Europe for a long time. After World War II we saw a period of rising “universalism” characterised by the creation of truly global organisations, mainly within the UN system, but also independently. We seemed to have entered a third phase of legal harmonisation, which has been dubbed “the dawn of inter-regionalism”. Regional integration organisations, in particular the European Union, are increasingly active in the field of legal harmonisation. To the extent that these organisations assume exclusive competence over certain areas of law, they may also claim the authority to negotiate international uniform law instruments with States outside their region. I suspect that by the year 2033, the risk of regional organisations replacing completely their member States at international negotiations may still be limited to Europe. There is indeed no indication that other regional integration schemes will be willing to go so far. If they do, though, all organisations may learn from the experience of the Hague Conference in achieving a proper balance between the common regional position represented by the organisation and the wealth of legal traditions of its member States. The international rule-making process would be severely impoverished if their voices were to be completely silenced.

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck Raising awareness of legal harmonisation work. At least in the commercial law field, legal harmonisation work is justified by the belief that legal disparity is an obstacle to trade and investment and that legal harmonisation helps reduce transaction costs. However, the impact of uniform law is not easily quantifiable, which makes it difficult to secure an adequate level of political interest for legal harmonisation work. I would hope that by the year 2033, formulating agencies have used their extensive contacts to industry, practitioners and the academic world to develop a methodology for assessing the economic impact of legal harmonisation. The availability of general economic impact studies may be instrumental in removing preconceived ideas about the harmonisation process and gaining domestic support for specific uniform law projects and expediting practical implementation. My second hope in this context would be that governments and international organisations develop greater awareness of the private law implications of broader topics in the international political agenda: environment, migration, trade liberalisation, food security, child protection, money laundering. Admittedly, private law is not at the forefront of the debate on any of these issues, and understandably so. But each of these phenomena has private law implications as well. Greater investment in food production requires a favourable legal framework; international trade demands respect of contracts; child protection the enforcement of judgements; fighting money laundering presupposes transparent corporate structures; the protection of the environment imposes liability for environmental damage. “Rule of law” begins with constitutional law, political, social and human rights. But is not complete without individual private rights. International harmonisation and domestic law reform. The classical reading of the mandate given to formulating agencies would limit their activities to harmonising private law at the international level, rather than to modernising domestic private law. A more constructive and forward-looking interpretation, however, would enable formulating agencies, where appropriate, to promote the modernisation of the law of particular groups of States in need of special assistance. In the same way that awareness of economic impact may strengthen the case for legal unification and harmonisation, the consistent integration of economic analysis in the harmonisation process – where appropriate – enhances the role of formulating agencies in promoting domestic legal reform. International uniform law instruments elaborated with the expertise and under the auspices of UNIDROIT, the Hague Conference and UNCITRAL reflect legal standards acceptable to various legal systems and countries at different stages of economic development. They deserve being recognised as solid, unbiased and transparent indicators of the quality of the law in the areas they cover. I would dare to hope that by the year 2013, future bilateral and multilateral donors providing assistance to domestic law reform will have duly acknowledged

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward the advantages in terms of greater legitimacy and acceptability of such instruments as opposed to legislation drafted ad hoc by private sector consultants. Of course, formulating agencies would seldom have expertise in all areas related to the practical implementation of their texts continuously available for addressing all needs of receiving countries. However, this should not in itself be an obstacle to more involvement in law reform. The formulation of joint programmes or implementation strategies in co-operation with other organisations involved in rule-making or law reform in a given area might allow for the development of a common approach to the implementation of specific standards or instruments (obviously suitably adapted to the country’s context). The input of formulating agencies might be limited to general advice on the elements of such an approach or might – subject to the availability of resources – extend to a greater involvement in specific projects. At the very least, the secretariat of a formulating agency has a role to play as a “clearing house” of information to know who the specialists in particular fields of law are. Cooperation in the implementation and application of international standards. An international uniform law instrument is of little value if it is not implemented in practice or if it is not correctly applied. Deficient domestic institutional design, poor regulatory machinery, insufficient resources, and lack of training, among others, are known for frustrating the objectives of law reform. In other areas, uniform law instruments may be incorrectly applied or may even be avoided due to lack of knowledge by judges and practitioners. The Hague Conference has been a pioneer among the rule-making organisations in devising tools for proper implementation of Hague Instruments. It suffices to mention the framework for cooperation and sharing of information in connection with the Child Adoption and the Child Abduction Conventions. The focus on the implementation phase should be intensified and should eventually become a regular feature of each international uniform law instrument, whenever possible. UNIDROIT has experience with the establishment of an operational infrastructure to ensure the practical functioning of an international convention, namely: the International Registry for Aircraft Objects under the Cape Town Convention on International Interests in Mobile Equipment. Based in Dublin (Ireland) and managed by a private company selected through international public bidding, the registry works under the supervision of the International Civil Aviation Organisation (ICAO). The registry operates exclusively by electronic means, applying the highest standards of data protection and speed of communications. It already counts nearly 300,000 fillings since the entry into force of the Convention, in 2006. I would hope that by the year 2033, formulating agencies, and the organisations that are affected by the work we do, have expanded existing mechanisms for disseminating information on the application of uniform texts beyond the various databases and information tools that already exist (the UNILEX database maintained by UNIDROIT, or the CLOUT system and the CISG Digest developed by UN-

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck CITRAL, or the INCADAT of the Hague Conference) into a systematic and as much as possible coordinated approach to the application of uniform law instruments. As a matter of fact, drawing on its expertise in the area of judicial cooperation, the Hague Conference could become the leading agency in identifying needs for assistance in connection with the application of uniform law instruments and devising assistance programmes, beyond the implementation of its own instruments. Additional measures to promote uniform interpretation might include supporting programmes for training judges (but possibly also for arbitrators or lawyers) in the interpretation and application of uniform law. This might take the form of seminars specifically dedicated to them or the elaboration of training programmes, a common syllabus or other forms of teaching materials that might be used for training purposes or be incorporated in the curricula of domestic academies or schools dedicated to the training or continuing education of judges. Cooperation with universities and, in particular, with other international organisations with expertise in technical assistance and training for lawyers from developing countries, might be explored with a view to developing joint programmes. Conceivably, standard teaching materials or a teaching plan for uniform law could be provided for inclusion in the curricula of law schools around the world. I have exhausted my time, but certainly not the list of what this great organisation can still be doing 20 years down the road, and even less so of what the foresight of its Secretary General could have envisaged by then, where he not about to embark in an exciting new phase of his life for which I should like to wish him the best of luck and happiness.

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World Trade Organization (WTO)

Rufus Yerxa is Deputy Director-General of the World Trade Organization since 2002. Prior to his service at the WTO, Mr Yerxa was Deputy United States Trade Representative. His remarks were as follows: It gives me great pleasure to be here at your 120th anniversary meeting. We are part of a varied panel, with different institutional affiliations and areas of work. Yet one thing seems to be common to us all: we are all convinced that international cooperation, such as that fostered by regional and multilateral institutions, is an essential tool for addressing the main challenges world society faces. This is not to say that fostering such international co-operation is an easy task. But, as a former resident of The Hague once said, “All excellent things are as difficult as they are rare” (Baruch Spinoza, Ethics). The Hague Conference and the WTO have different mandates, respectively (i) to promote the progressive development of common rules of private international law; and (ii) To progressively reduce obstacles to international trade and promote a level playing field for international exchanges.

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward Each of the two institutions also works differently. The Hague Conference serves as a forum for the development and implementation of multilateral treaties or conventions in different fields of private international law. Ultimately, those common rules apply to international judicial and administrative cooperation in civil matters and to contractual and family relations between individuals. In turn, the WTO serves as a forum for governments to develop and implement multilateral rules on trade-related issues, including on trade in goods, trade in services and trade-related aspects of intellectual property rights. WTO rules ultimately impose obligations on governments, but do not apply directly to private relations between individuals. At the same time, however, the activities of both institutions are instrumental to the broader goal of promoting international trade and investment as a means of contributing to economic growth and development. The origins of the multilateral trading system, currently represented by the WTO, can be traced back to the GATT 1947. The GATT was mostly concerned with regulating tariffs on imports, which at the time were the most obvious obstacle to international trade. For more than 60 years, first through the GATT and since 1995 through the WTO, countries have been successful in reducing tariffs and other border obstacles to international trade. Liberating international trade has been a key factor for promoting economic growth over the last half century and for lifting millions of people out of poverty, including in the developing world. And yet, international trade continues to face obstacles. Those obstacles are different from the tariffs and other border measures that traditionally affected trade. Today’s exporters and importers have to deal with red tape and bureaucratic costs, with differences in standards and technical regulations, with subsidies and internal regulations. And, of course, they still have to deal with the uncertainty and additional costs associated with negotiating, signing and implementing international contracts. All of these circumstances result in unpredictability and increased transaction costs, and therefore reduce the potential benefits that could accrue from international trade. Although our mandates are different, both the WTO and the Hague Conference are engaged in addressing these issues. As we have heard from earlier speakers, The Hague Conference is engaged with the development of common rules to facilitate international contracts. WTO Members have been addressing these issues in the context of the multilateral round of trade negotiations that was launched in November 2001 in Doha. Those negotiations are intended to result in a review of current multilateral trade rules in agricultural and industrial market access, trade in services, and many other subjects. Yet the conclusion of that cycle of talks has proved elusive and negotiations are dead-locked.

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck Nevertheless, in the WTO there is an increased perception that it may be possible to achieve a separate multilateral agreement to facilitate trade, by reducing red tape and simplifying bureaucratic requirements and procedures. An agreement on trade facilitation is currently being negotiated and could be approved as early as December during the upcoming 9th WTO Ministerial Conference in Bali. Although the final content of a WTO trade facilitation agreement is still uncertain, some of the proposals include: (i) The reduction of formalities and documentation requirements for the importation, exportation or transit of goods and the establishment of a single window for traders to submit documentation and data required. (ii) The possibility for traders to submit by electronic means import documentation and other data required for importation prior to the arrival of the goods, for pre-arrival processing of such documents. (iii) The strengthening of cooperation between the customs and border agencies of Members and the elimination of consular transaction requirements in connection with the importation of goods. The OECD has estimated that the costs of complying with customs procedures, paperwork and associated border delays constitute roughly 10% of the value of any trade transaction. This puts these costs of trading across borders at around US$2 trillion, which is equivalent to almost double the current average (tradeweighted) tariff. An agreement on trade facilitation that results in fewer fees and paperwork, less red tape, more transparency and reduced obstacles to goods in transit could reduce those costs by half. This would be equivalent to eliminating all remaining tariffs on imports. These are only some of the initiatives that multilateral institutions such as the WTO and the Hague Conference can each contribute within their respective mandates, and in a mutually-supportive manner, in order to reduce transaction costs and to facilitate increased trade.

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World Bank Group

Anne-Marie Leroy is Senior Vice President and General Counsel of the World Bank Group since 2009. Before, she was with the World Bank Group as senior public sector specialist in the nineties, working on public management issues in NorthAfrica. Ms. Leroy’s remarks were as follows: Thank you very much for inviting me to join you today to celebrate the 120th Anniversary of the Hague Conference. The organization’s long history, its broad membership, and the important multilateral legal instruments on private international law that it has developed, are proof of the significant role that the Hague Conference has played in contributing to increased legal certainty in matters involving multiple jurisdictions.

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward In a similar vein, for several decades the World Bank has promoted, and continues to promote the role of law as an important dimension of sustainable and equitable economic growth, including in connection with the facilitation of commerce across borders. As Ibrahim Shihata, former General Counsel of the Bank said, “[t] he rule of law creates certainty and predictability; it leads to lower transaction costs, greater access to capital, and the establishment of level playing fields.” Private international law, in particular, contributes to the removal of legal obstacles and the creation of cross-border private law relations and transactions. Private international law balances international consensus with domestic recognition, and also balances the actions of sovereigns and of private actors. Private international law principles and rules help to improve commercial certainty by providing clear channels to increase investment and facilitate the development of international trade. As you know, the World Bank has given considerable attention to strengthening the legal enabling environment – both within nations and internationally – to facilitate the growth of equitable and inclusive private sector-led growth and to facilitate the flow of goods, services, and capital across borders. Private international law is a helpful means to that end. For example, studies conducted by the World Bank have noted the positive effect of the Apostille Convention (or Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents), on the ability of foreign investors to start businesses in those countries that are parties to it. The Convention has greatly simplified the authentication of public documents to be used abroad by dispensing with a cumbersome legalization process and replacing it with a single authentication certificate from an authority in the State where the document was executed. Through its numerous conventions, the Hague Conference is creating “public goods” that provide uniform solutions to complex problems faced by many countries, despite their differences in legal systems. Its influence cannot be measured solely by the number of states that have formally adopted these conventions; many countries also often use these conventions as “models,” borrowing all or some of the rules therein and incorporating them into their domestic laws. In recent years, our member countries have seen the critical role of the World Bank as residing not only in its provision of long-term financing for development, but in the knowledge and know-how that the Bank is able to help convene and harness to enhance development efforts. We aspire to be a “Solutions Bank” for development, and critical part of that depends on the power of shared knowledge. With its global reach, the World Bank is ideally positioned to connect and convene stakeholders from around the world in order to facilitate knowledge exchange across international boundaries. In today’s world, knowledge does not only flow from north to south, but the reverse is also true, as are south-south exchanges. President Kim recently noted that knowledge now flows “from entrepre-

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck neurs in Delhi to citizens in rural Mexico to civil society in Lagos to policymakers in Sarajevo.” In the World Bank’s Legal Vice Presidency, the “Global Forum on Law, Justice, and Development” facilitates the knowledge exchange goal. The Global Forum is pioneering a transformative agenda for a global discourse that includes law, justice, and equity in the new paradigm of economic development that is both sustainable and equitable. The Global Forum offers the potential to harness an enormous coalition of intellectual partners across continents and disciplines into a platform for knowledge-sharing and dissemination for the purpose of aiding policymakers in improving development outcomes. To date, 126 partners from international organizations, international financial institutions, civil society organizations, the Judiciary, Central Banks, and foundations have joined the Global Forum. The Hague Conference itself has also joined this initiative. The World Bank welcomes the inclusion of more partners to utilize this platform to the fullest extent. Last year, for example, The Hague Conference participated in the “Law, Justice, and Development Week 2012,” where the Global Forum was launched, specifically in the session “How to Work Together: International Organizations and the Development of the Law of Secured Transactions.” In this session, representatives from The Hague Conference, UNCITRAL, and UNIDROIT discussed the work of their organizations, their texts on secured transactions, and approaches to integrate the work of their organizations into the development dialogue. At the core of the Global Forum are its Thematic Working Groups, which cover several areas. There are Working Groups dealing with “Justice and Rule of Law,” “Law and the Economy,” “Environmental and Natural Resources Law,” “Governance and Anti-Corruption,” and “Empowerment and Equity for Diverse Communities.” The Working Groups are divided into sub-groups that are led by intellectual partners who are accountable for managing each sub-group and for its knowledge outputs. The Forum can provide The Hague Conference an opportunity to make an invaluable intellectual contribution by participating in these Working Groups and taking the lead on private international law issues. There are many possibilities for cooperation among our organizations. The World Bank, in particular, always welcomes initiatives that may contribute to the achievement of the developmental objectives set forth in its Articles of Agreement. We could develop this by improving the World Bank’s knowledge of the Hague Conference conventions and their potential for fostering private sector development. The World Bank Group is a very large and complex organization, and we should be able to organize awareness-building events around the conventions and the themes they deal with.

Reflections on the Hague Conference on Private International Law at ͙͘͜—͚͘ Years Forward

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Concluding Remarks—Priorities for Future Action

In their concluding remarks, the panelists were asked to address what priority they would give to particular steps under three headings: (i) adherence – States joining the Hague Conference and/or becoming party to one or more Hague Conventions; (ii) implementation – systems strengthening and techniques for effective compliance; and (iii) new initiatives. Because this last exchange was brief and was intended to identify the ideas that emerged from the collective presentations, we include these points without trying to associate them with particular speakers because there tended to be agreement on the points presented: – All panelists have focused on how much the world is changing and how rapidly it is changing in terms of not just the problems we face but also the kinds of governance structures that we have to deal with. In this exciting time we clearly see a rise to prominence of more and more nations and groups that have been underrepresented in the nation-state system. The end of the sort of bipolar world we lived in for a long time has brought about tremendous change both in terms of economic activity but also in terms of differing perspectives on what kind of governance structures to adopt and what does the rule of law mean. Every institution needs to take account of these developments in framing its agenda and many will, as a result, undergo significant transformation. We are no longer in a world in which one or two powerful countries or blocs of countries can control while others are required to reconcile themselves to that kind of leadership. Now power is much more a shared module among peoples, regions, states and institutions. Every international institution must focus on how that evolving environment changes the work of all of our organizations and how can we respond most effectively to a much more shared model of governance and what kind of principles can contribute to the rule of law. – Turning to specifics, the panelists noted that Africa is a huge continent that is still missing to a considerable extent on the Hague Conference map. The panelists urged the Hague Conference to focus on including Africa and the many African countries that are not yet Conference members in the activities relating to all three pillars of the Conference’s work. They also pointed to the growing trends towards regionalization and growing regional trade. They encouraged the continued efforts of the Hague Conference to reach out to various regions through its new offices in Buenos Aires and Hong Kong. In addition, the Hague Conference has been a pioneer in providing technical assistance to ensure the benefits of the investment represented by adopting conventions. The Hague Conference should continue and enhance these programs reaching not only states but also individuals – whether judges, scholars, practitioners or citizens. – The panelists urged that the Hague Conference join with other organizations in using their expertise to consolidate and systematize existing private law instruments. This collaborative effort would focus on how much instru-

͛ – Peter D. Trooboff and Frederike E.M. Stikkelbroeck

–

ments overlap, and how loopholes between them. It would also ask why some instruments are successful and others are not. Such an effort would help in educating the international community understand on what has already been accomplished and would, if adopted in individual countries, bring about significant benefits. This effort would also help promote greater coordination about existing organizations. In particular, it would lead them to discuss their respective work programs and find a better way of spending money, avoiding duplication of instruments, and complementing each other. The panelists also recommended that the Hague Conference not try to replace personal contact with communication through electronic means only. They urged training in countries where there is no or very slow internet since some countries do not even have 24 hour power coverage. Thus, the Hague Conference should continue organizing regional conferences and travelling although it has financial consequences. From a concrete perspective, panelists urged prompt adherence to those entirely uncontroversial Hague Conventions that provide a great benefit by reducing the costs of goods, e.g., the 1961 Hague Convention that abolishes the need for legalization of foreign public documents (the “Apostille Convention”). Adoption of this Convention has been shown to cut as much as 10 percent of the cost of imported and exported goods. In the field of family law, panelists raised the issue of civil registration and advocated that the Hague Conference becoming strong advocate for civil registration and in particular birth registrations related to the relevant child protection conventions. They also asked that the Hague Conference help UNICEF in deepening UNICEFs understanding and ability to work with 1996 Child Protection Convention.

International Criminal Law

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Security Council Referrals to the ICC and EU Fundamental Rights: A Test for ECJ’s Stance in Kadi I Mihail Vatsov*

Abstract The Kadi decisions of the European Courts created much discussion about where European Union (EU) law stands as regards international law and how both relate to each other.1 The European Court of Justice (ECJ) ruled, on an appeal of Mr Kadi, that EU fundamental rights should be protected and are not to be derogated from just because an EU measure implements a Security Council Resolution. This judgment of the ECJ was delivered in the context of Security Council Resolutions providing for targeted sanctions – that is – the Security Council targets certain individuals and by acting under Chapter VII lays down sanctions directly against those individuals. The issue that proved most problematic for the ECJ when dealing with Kadi was that the Security Council Resolutions, and later on, the EU measures implementing them did not respect fundamental rights and did not provide the necessary remedies.

*

1

Intern at the External Relations Division of the Organisation for the Prohibition of Chemical Weapons (OPCW); LLB Candidate at The Hague University of Applied Sciences. The views expressed in this contribution are the author’s alone and cannot be attributed to the OPCW. The author can be contacted at [email protected]. Case T-315/01 Yassin Abdullah Kadi v. Council of the European Union and Commission of the European Communities [2005] ECR II-3649; Joined Cases C-402/05P and C-415/05P Yassin Abdullah Kadi and Al Barakaat International Foundation v. Council and Commission (Grand Chamber) [2008] ECR I-6351 (Kadi I); Case T-85/09 Yassin Abdullah Kadi v. Commission [2010] ECR II-5177 (Kadi II GC); Joined Cases C-584/10 P, C-593/10 P and C-595/10 P Commission v. Kadi (Kadi II ECJ). Most recently, Advocate General Bot delivered his Opinion in Kadi II and criticised the intensity of review undertaken by the General Court and took a more ‘international law friendly’ approach. It is now for the ECJ to put the matter to rest. Opinion of Advocate General Bot delivered on 19 March 2013 in Joined Cases C-584/10 P, C-593/10 P and C-595/10 P Commission v. Kadi.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͜ – Mihail Vatsov

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Introduction

Under contemporary international law the individual is probably the most vulnerable subject/object and rarely is given standing to protect himself. This is why targeted sanctions almost as severe as sanctions against States must provide for much more procedural protection. The absence of those makes the highly defensive stance of the ECJ most needed.2 Having said that, it should be borne in mind that not all Security Council Resolutions are targeting individuals, and when they do, the rights of the individuals are not always disregarded. An example of the latter is a Security Council referral to the International Criminal Court (ICC). In such a case the attitude of the ECJ, it is to be argued, should be different, and the ECJ should be more willing to accept the consequences for the individual. Accordingly, the discussion in this paper is going to assess whether, by employing ECJ’s reasoning in Kadi I and applying it to a situation involving a Security Council referral to the ICC, the ECJ would strike down the measure implementing the referral. It will be argued that, under the Rome Statute, there is sufficient protection to render it unnecessary. Thus, in a case of a Security Council referral to the ICC, should the matter reach the ECJ, the latter should not strike down the measure taken to implement the referral. In Part I of the contribution the nature of Security Council referral to the ICC will be discussed in general terms. In Part II, the rights before the ICC and the EU fundamental rights will be examined. First, the rights of the accused under the Rome Statute are going to be reviewed. In particular, the review will look at the investigation and trial stages. Next, the EU fundamental rights which could be affected in a situation of a referral will be discussed. To that extent, the Charter of Fundamental Rights of the European Union (‘Charter’) will be examined. Other sources, to which the ECJ referred in Kadi, will also be looked upon. In Part III the two sets of rights and their respective scope will be juxtaposed.

2

See generally N. Lavranos, ‘Judicial Review of UN Sanctions by the European Court of Justice’ 78 Nordic Journal of International Law (2009) pp. 343, 358.

Security Council Referrals to the ICC and EU Fundamental Rights

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Security Council referral to the ICC

The Security Council referral to the ICC is the most important touching point between the United Nations (UN) and the ICC.4 It is laid down in Article 13(b) of the Rome Statute5 and it is one of the three provisions concerning the triggering of the ICC’s jurisdiction.6 Furthermore, for a referral to be made, Article 13(b) requires the usage of Chapter VII powers by the Security Council. Once a referral is made and the ICC’s jurisdiction is triggered, the Security Council ‘accepts’ that the Rome Statute provisions are the applicable rules.7 A referral also imposes obligations on

3

4

5

6 7

See in general H. Olasolo, The Triggering Procedure of the International Criminal Court (Martinus Nijhoff, Leiden, 2005); W. Schabas, The International Criminal Court: A Commentary on the Rome Statute (Oxford Commentaries on International Law, OUP, New York, 2010) pp. 293-304; M. Arsanjani, ‘Reflections on the Jurisdiction and Trigger-Mechanism of the International Criminal Court’, in H. von Hebel, J. Lammers and J. Schukking (eds.), Reflections on the International Criminal Court: Essays in honour of Adriaan Bos (TMC Asser Press, The Hague, 1999) pp. 57-76; F. Berman, ‘The Relationship Between the International Criminal Court and the Security Council’, in H. von Hebel, J. Lammers and J. Schukking (eds.), Reflections on the International Criminal Court: Essays in honour of Adriaan Bos (TMC Asser Press, The Hague, 1999) pp. 173-180; S. Williams and W. Schabas, ‘Article 13’ in O. Triff terer (ed.), Commentary on the Rome Statute of the International Criminal Court: observers’ notes, article by article (Beck, München, 2008) pp. 563-574; N. White and R. Cryer, ‘The ICC and the Security Council: An Uncomfortable Relationship’, in J. Doria et al., The legal regime of the International Criminal Court: Essays in honour of professor Igor Blishchenko (Nijhof, Leiden, 2009) pp. 455-484; E. Wilmshurst, ‘The International Criminal Court: The Role of the Security Council’ in M. Politi and G. Nesi (eds.), The Rome Statute of the International Criminal Court: A challenge to impunity (Ashgate, Aldershot, 2001) pp. 39-41. K. Gallant, ‘The International Criminal Court of the System of States and International Organizations’, in F. Latanzi and W. Schabas (eds), Essays on the Rome Statute of the International Criminal Court (vol 2, Ripa Fagnano Alto, Sirente, 2004) pp. 3, 20; P. Gargiulo, ‘The Controversial Relationship between the International Criminal Court and the Security Council’ in F Latanzi and W Schabas (eds), Essays on the Rome Statute of the International Criminal Court (vol 1, Ripa Fagnano Alto, Sirente, 2000) p. 67; F. Latanzi, ‘The Rome Statute and State Sovereignty. ICC Competence, Jurisdictional Links, Trigger Mechanism’, in F. Latanzi and W. Schabas (eds.), Essays on the Rome Statute of the International Criminal Court (vol 1, Ripa Fagnano Alto, Sirente, 2000) pp. 51, 60-66. Rome Statute of the International Criminal Court (adopted 17 July 1998, entered into force 1 July 2002, as amended 2010) 2187 UNTS 90 Article 13(b); Article 13(b) provides: A situation in which one or more of such crimes appears to have been committed is referred to the Prosecutor by the Security Council acting under Chapter VII of the Charter of the United Nations. Schabas, supra note 3, p. 293. Situation in Darfur, Sudan (ICC-02/05) Decision on Application under Rule 103 (4 February 2009) para. 31.

͜ – Mihail Vatsov

the Prosecutor8 and should he decide not to act on the referral his decision may be challenged before a Pre-Trial Chamber.9 Three ‘parameters’ have been held necessary for a referral to be properly made.10 Those are the temporal, territorial and personal scope of the ICC jurisdiction that the Security Council triggers. To define the temporal scope requires a certain point in time to be determined. So far, the prevailing practice is to indicate 1 July 2002 as such a point in time for referrals.11 Subsequent practice also shows that a referral of a situation may be prospective as well as retrospective.12 That is, the temporal jurisdiction of the ICC continues even after the date of the Security Council referral.13 However, at which point in time the temporal jurisdiction is revoked and by whom is not clear. The territorial scope is defined by reference to a certain geographical location. This has been done by reference to the whole of a state,14 a certain administrative region,15 or a vaguely defined part of a state.16 The personal scope is not an indispensable part of a referral. It covers both the inclusion of certain individuals as

8 9 10

11

12

13 14

15 16

Rome Statute, supra note 5, art 53. Schabas, supra note 3, pp. 667-670. Situation in the Democratic Republic of the Congo (ICC-01/04) Decision on Applications for Participation in the Proceedings of VPRS-1, VPRS-2, VPRS-3, VPRS-4, VPRS-5, VPRS-6 (17 January 2006) para. 65; Schabas supra note 3, 298; M Neuner, ‘Darfur: the first Security Council Referral of a Situation to the International Criminal Court’ in D. Ficher, Transformation des Rechts in Ost und West: Festschrift fur Prof. Dr. Herwig Roggemann zum 70. Geburtstag (Berliner Wissenschafts-Verlag, Berlin, 2006) pp. 463, 471. Darfur SCR 1593 UN SCOR, 60th Sess., 5158th mtg UN Doc S/RES/1593 (2005) para. 1; Schabas, supra note 3, p. 298; But see Peace and security in Africa SCR 1970 UN SCOR, 66th Sess., 6491st mtg UN Doc S/RES/1970 (2011) para. 4. Bashir (ICC-02/05-01/09) Decision on the Prosecution’s Application for a Warrant of Arrest against Omar Hassan Ahmad Al Bashir (4 March 2009) para. 37; Also Abu Garda (ICC02/05-02/09) Decision on the Prosecutor’s Application under Article 58 (7 May 2009) para. 2. Schabas, supra note 3, p. 298. E.g., Situation in the Democratic Republic of the Congo (ICC-01/04) Decision to Hold Consultation under Rule 114 (21 April 2004) pp. 2, 3; Katanga (ICC-01/04-01/07) Decision on the evidence and information provided by the Prosecution for the issuance of a warrant of arrest for Germain Katanga (5 November 2007) para. 10. Situation in Darfur, Sudan (ICC-02/05) Decision on Application under Rule 103 (4 February 2009) para. 31. President of Uganda refers situation concerning the Lord’s Resistance Army (LRA) to the ICC , visited 27 October 2012.

Security Council Referrals to the ICC and EU Fundamental Rights

well as the exclusion of certain individuals from the jurisdiction of the ICC.17 So far a Security Council referral has not explicitly referred an individual to the ICC but has used the power to exclude individuals. The referral of Uganda, on the other hand, made reference to the Lord’s Resistance Army (‘LRA’), which led to arrest warrants for senior leaders of the LRA.18 There are indeed differences between a state-party referral and a Security Council referral. However, there is nothing to suggest that, if political consensus is reached, a Security Council referral cannot make explicit reference to an individual or defined group of individuals when referring a situation to the ICC.

͗

Protection before the ICC and under EU Fundamental rights

Thus far the relation between the Security Council and the ICC has been examined and it can be seen that the Security Council delegates some of its enforcement powers through referrals to the ICC. Accordingly, it is now necessary to examine the protection available for the individual before the ICC when the delegated Security Council powers are being used. Subsequently, their compatibility with protection under EU law will be discussed.

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Legal protection before the ICC General protection

The principle of ne bis in idem is enshrined in Article 20 of the Rome Statute.19 Three situations are provided for in this article.20 They are (1) a re-trial by the ICC after an ICC trial; (2) a re-trial at a national court after an ICC trial; and (3) a re-trial 17

18

19

20

For inclusion, see the referral of Uganda ibid; for exclusion see Darfur, supra note 11, para. 6; Peace and security in Africa SCR 1970 UN SCOR, 66th Sess., 6491st mtg UN Doc S/ RES/1970 (2011) para. 6. Situation in Uganda (ICC-02/04-01/05) Warrant of Arrest for Raska Lukwiya (8 July 2005); Situation in Uganda (ICC-02/04-01/05) Warrant of Arrest for Vincent Otti (8 July 2005); Situation in Uganda (ICC-02/04-01/05) Warrant of Arrest for Okot Odhiambo (8 July 2005); Situation in Uganda (ICC-02/04-01/05) Warrant of Arrest for Dominic Ongwen (8 July 2005); Situation in Uganda (ICC-02/04-01/05) Warrant of Arrest for Joseph Kony Issued on 8 July 2005 as Amended on 27 September 2005 (27 September 2005). The nullum crimen sine lege principle in the Rome Statute is not related to the preconditions for the exercise of jurisdiction. Thus, Security Council referrals triggering the ICC’s jurisdiction for States not parties to the ICC is not violating the principle. See M. Vagias, The Territorial Jurisdiction of the International Criminal Court: Certain Contested Issues (Bynkershoek Publishing, The Hague, 2011) pp. 86-87 citing M. Boot, Nullum crimen sine lege and the subject matter jurisdiction of the International Criminal Court: genocide, crimes against humanity, war crimes (School of Human Rights Research Series, Antwerpen, Intersentia, 2002) pp. 378-379. Schabas, supra note 3, p. 376.

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by the ICC after a national court trial. As regards the first situation, an acquittal or conviction bars a subsequent trial before the ICC “with respect to conduct which formed the basis of crimes for which the person has been convicted or acquitted by the Court”.21 This provision is subject to few qualifications, at it starts with “[e] xcept as provided in the Statute”. Such exceptions are: the possibility of the Prosecutor appealing an acquittal based on procedural error, error of fact, or error of law,22 or appeal of a conviction by the convicted person or the Prosecutor on behalf of the convicted,23 in which case the Appeals Chamber can order a new trial or adjudication on facts before a different Trial Chamber.24 An accused may also be charged with several charges based on the same conduct. This is not dealt with by Article 20 as such but is relevant for this discussion. Such cumulative charging has been held possible, but only where distinct crimes are charged and “[t]his is only possible if each statutory provision allegedly breached in relation to one and the same conduct requires at least one additional material element not contained in the other”.25 As regards the second situation, Article 20(2) provides a prohibition for a person to be tried by another court for a crime referred to in Article 5 of the Statute. It is interesting that the provision refers to a crime and not to conduct.26 This seems to allow a trial for a murder or rape based on the same conduct for which a person was prosecuted for a crime under the ICC’s jurisdiction, which has happened in the practice of other tribunals.27 So far this has not happened in the practice of the ICC and it is not clear to what extent an acquitted individual will be threatened by a re-trial in contradiction with the ne bis in idem principle. It should be reminded

21 22 23 24 25

26 27

Rome Statute, supra note 5, Art. 20(1). Rome Statute, supra note 5, Art. 81(1). Rome Statute, supra note 5, Art. 81(2). Rome Statute, supra note 5, Art. 83(2)(b). Bemba (ICC-01/05-01/08) Decision Pursuant to Article 61(7)(a) and (b) of the Rome Statute on the Charges of the Prosecutor Against Jean-Pierre Bemba Gombo (15 June 2009) para. 202; Along the same reasoning, see Prosecutor v Delalic et al (Appeals Chamber Judgment) ICTY-96-21-A (20 February 2001) para. 412. See the discussion in Schabas, supra note 3, pp. 378-379. Three Nazi defendants acquitted at Nuremberg but convicted under German law for the same conduct, see T. Taylor, The Anatomy of the Nuremberg Trials (Alfred A Knopf, New York, 1992) pp. 612-614. Emmanuel Bagambiki who was acquitted for charges of genocide, complicity in genocide, conspiracy to commit genocide, crimes against humanity and war crimes but convicted by the Court of First Instance of Rusizi, in absentia for rape and incitement to commit rape - charges not pursued at the ICTR, see Ntagerura et al (Judgment) ICTR-99-46-A (7 July 2006); Rwanda Sentences to Life in Prison a Person Acquitted by the ICTR and Living in Belgium, 11 October 2007, at , viewed on 28 October 2012.

Security Council Referrals to the ICC and EU Fundamental Rights

that the ICC cannot as such enforce this provision at the national level of a state party. Also, non-state parties are not bound by this provision. Article 20(3) seems to be the most controversial as it covers the situations where the Prosecutor wants to start proceedings against a person already tried by another court but with unsatisfactory results.28 This is to prevent cases where individuals were convicted or acquitted in sham trials designed to protect them from real prosecutions or were not conducted in accordance with the norms of due process recognised by international law. That way, it closely resembles one of the criteria for admissibility in Article 17(1)(c) of the Rome Statute. Practice on this provision is yet to be seen. The principle of nullum crimen sine lege is enshrined in Article 22 of the Rome Statute, whilst the principle of nulla poena sine lege is set out in Article 23. Each will be dealt with in turn. Article 22(1) sets out the principle of legality—the requirement that prosecution and punishment have basis in clear legal provisions which were in force at the time of the conduct. In particular, criminal responsibility is not permitted for conduct which was not a crime in the jurisdiction of the ICC at the relevant time. The crimes in the jurisdiction of the ICC are defined at length and are further complemented by the Elements of Crimes instrument. Thus, the principle is observed as regards the Statute. Second, Article 22(2) further elaborates on the principle of legality—the strict application of the law (lex stricta) and provides that any doubt is to be resolved according to the principle in dubio pro reo. Third, Article 22(3) is a provision related more to Article 10 than the legality principle. It recognises that the Statute does not include all crimes under international law and the fact that they are omitted in the Statute does not affect their status under international law. Article 23 sets out the nulla poena principle but does not provide for precise sentences, as some national codes do. However, in Part 7 of the Rome Statute the sentencing provisions can be found, with a series of general provisions included therein.29 Thus, Pre-Trial Chamber I rejected the argument that the legality principle is not observed for sentencing and stated that the four parameters of the principle are observed—lex scripta, lex praevia, lex certa and lex stricta.30 Article 24 of the Rome Statute lays down yet another principle of criminal law– the prohibition of retroactivity of criminal laws.31 In paragraph 1, a prohibition of 28 29 30

31

Schabas, supra note 3, p. 379. Rome Statute, supra note 5, Arts. 77 and 78; See also Schabas, supra note 3, p. 416. Lubanga (ICC-01/04-01/06) Decision on the Confirmation of Charges (29 January 2007) para. 303; K. Ambos, ‘“Nulla Poena Sine Lege” in International Criminal Law’ in R. Haveman and O. Olusanya (eds.), Sentencing and Sanctioning in Supranational Criminal Law (Supranational Criminal Law Series, Intersentia, Antwerp, 2006) pp. 17-22. It should be noted here that retroactivity and retrospectivity of criminal law should be distinguished in the context of Security Council referrals. See explanation on the difference between the two notions in Vagias, supra note 19, pp. 88-89.

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criminal responsibility before the entry into force of the Statute, that is 1 July 2002, is set out. That is why Security Council referrals cannot predate that date. The issue of continuous crimes32 was discussed during drafting but was left undecided, and it will be for the ICC to determine.33 Under paragraph 2, a person being investigated, prosecuted or convicted shall benefit from the more favourable law if the applicable law to the case, which is defined in Article 21, changes before a final judgment.

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Investigation

Article 55 is the central provision in the Rome Statute setting out the protection an individual enjoys during investigation. It sets out guarantees for two distinct situations.34 First, in paragraph 1, it deals with the rights of any individual in respect of an investigation. Second, in paragraph 2, it deals with the rights of individuals about to be questioned for whom there are grounds to believe have committed a crime. The Prosecutor and the national authorities must have due regard to Article 55 during questionings.35 A violation of this article could, in principle, lead to exclusion of evidence thus obtained in accordance with Article 69(7) of the Statute.36 Under Article 55(1)(a) the guarantee against self-incrimination is set out and two main elements of it can be seen.37 No one can be compelled, first, to incriminate him or herself and, second, to confess guilt. Next, in Article 55(1)(b), it is prohibited for anyone to be “subjected to any form of coercion, duress or threat, to torture or to any other form of cruel, inhuman or degrading treatment or punishment”. The next subparagraph provides the right to a competent interpreter once a person

32

33

34

35 36 37

Those are crimes which can present themselves over a certain period of time and are not expressed by a single act or omission. Such can be enforced disappearances or the conscription of child soldiers where the person in question played an active role in the continued engagement of the child. P. Saland, ‘International Criminal Law Principles’ in R. Lee The International Criminal Court: The making of the Rome Statute: issues, negotiations, results (Kluwer, The Hague, 1999) pp. 196-197; R. Pangalangan, ‘Article 24’ in O Triff terer (ed.), Commentary on the Rome Statute of the International Criminal Court : observers’ notes, article by article (2nd ed, Beck, München, 2008) p. 739; Schabas, supra note 3, p. 419; Y. Kim, The International Criminal Court: A commentary of the Rome Statute (Wisdom House, Leeds, 2003) p. 304. S. Zappala, ‘Rights of Persons during an Investigation’ in A. Cassese et al. (eds.), The Rome Statute of the International Criminal Court: A Commentary (vol 2, OUP, Oxford, 2002) pp. 1181, 1196. Rules of Procedure and Evidence, ICC-ASP/1/3 (Part II-A) (adopted 9 September 2002, entered into force 9 September 2002), Rule 112(1). Schabas, supra note 3, p. 686. Ibid.

Security Council Referrals to the ICC and EU Fundamental Rights

is questioned in a language that he or she does not “fully understand and speak”. The qualification ‘fully’ has been held by the Appeals Chamber to mean a higher standard than simply understanding or speaking a certain language.38 This right closely resembles the right to an interpreter during trial.39 Finally, under Article 55(1)(d), “arbitrary arrest or detention” are prohibited and, in particular, no one shall “be deprived of his or her liberty except on such grounds and in accordance with such procedures as are established in the Statute”. The Appeals Chamber has confirmed the right of every person to effectively contest the deprivation of liberty.40 Under Article 55(2) a complementary set of guarantees are provided for, as it deals with persons for whom there are grounds to believe have committed a crime within the ICC’s jurisdiction. It applies both to questioning by the Prosecutor and national authorities cooperating with the ICC. The existence of the objective test of ‘grounds to believe’ provides higher protection for the questioned, as it makes it harder for the Prosecutor to argue that the person was not a suspect at the time of questioning.41 The person questioned shall be informed of the rights provided in Article 55(2) prior to the questioning. Those rights are: (a) to be informed prior to the questioning that there are grounds to believe that he or she committed a crime in the ICC’s jurisdiction; (b) to remain silent; (c) to have legal assistance of his or her own choosing, or if without sufficient means to be provided with such assistance, where the interests of justice so require; and (d) to be questioned in the presence of counsel, unless the right to counsel was voluntarily waived. Questioning under Article 55(2) should be audio or video recorded and must be transcribed and given to the questioned.42 Only “where the circumstances prevent such recording taking place” can the questioning be convened without recording.43

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Trial Proceedings

Articles 66 and 67 set out the main safeguards for the accused during trial. The former Article deals with the presumption of innocence and the latter prescribes

38

39 40

41 42 43

Katanga et al (01/04-01/07 OA 3) Judgment on the appeal of Mr Germain Katanga against the decision of Pre-Trial Chamber I entitled ‘Decision on the Defence Request Concerning Languages’ (27 May 2008) paras. 56-57. Rome Statute, supra note 5, Art 67(1)(f). Bemba (ICC-01/05-01/08 OA) Judgment on the appeal of Mr Jean-Pierre Bemba Gombo against the decision of Pre-Trial Chamber III entitled ‘Decision on Application for Interim Release’ (16 December 2008) para. 31. Schabas 2010, supra note 3, p. 688. Rules of Procedure and Evidence, supra note 35, Rule 111(1). Rules of Procedure and Evidence, supra note 35, Rule 111(2).

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the rights of the accused. Although Article 67 is placed in the Chapter dealing with trial, it has been confirmed to apply to all stages of the proceedings44 as pre-trial stage violations may affect the proceedings and the outcome of the trial45 and the ICC has the power to exclude evidence,46 if abuses occur.47 Under Article 66 “[e]veryone shall be presumed innocent until proved guilty before the Court in accordance with the applicable law” and the burden is on the Prosecutor to show that the accused is guilty beyond reasonable doubt. The presumption of innocence has been held to be a “general principle in criminal procedure [which] applies, mutatis mutandis, to all stages of the proceedings”.48 Under Article 67(1), subject to Article 64(7), the accused is entitled to public hearing, a fair hearing conducted impartially, a list of minimum guarantees, and full equality. As regards a fair hearing, the ICC has held it to be closely linked to the notion of ‘equality of arms’,49 and has borrowed the notion as developed by the international case law.50 The mentioning of minimum guarantees permits the ICC

44

45

46 47 48 49

50

Situation in the Democratic Republic of the Congo (ICC-01/04) Decision on the Prosecution’s Application for Leave to Appeal the Chamber’s Decision of 17 January 2006 on the Applications for Participation in the Proceedings of VPRS 1, VPRS 2, VPRS 3, VPRS 4, VPRS 5, VPRS 6 (31 March 2006) paras. 34-35. Situation in the Democratic Republic of the Congo (ICC-01/04) Judgment on the Prosecutor’s Appeal Against the Decision of the Pre-Trial Chamber I Entitled ‘Decision on the Prosecutor’s Application for Warrants of Arrest, Article 58’ (13 July 2006) para. 11. Rome Statute, supra note 5, Art. 69(7)(b). Schabas, supra note 3, pp. 794-795. Bemba case, supra note 25, para. 31. Situation in Uganda (ICC-02/04-01/05) Decision on Prosecutor’s Application for Leave to Appeal in Part Pre-Trial Chamber II’s Decision on the Prosecutor’s Application for Warrants of Arrest under Article 58 (19 August 2005) para. 30; Lubanga (ICC-01/04-01/06) Decision on the Defence request for leave to appeal regarding the transmission of applications for victim participation (6 November 2006) p. 7; Katanga (ICC-01/04-01/07 OA) Judgment on the appeal of the Prosecutor against the decision of Pre-Trail Chamber I entitled ‘First Decision on the Prosecution Request for Authorisation to Redact Witness Statements’ (13 May 2008) para. 73; Katanga (ICC-01/04-01/07 OA2), Judgment on the appeal of Mr Germain Katanga against the decision of Pre-Trial Chamber I entitled ‘First Decision on the Prosecution Request for Authorisation to Redact Witness Statements’ (13 May 2008) para. 63; Situation in Darfur, Sudan (ICC-02/05) Decision on the Request for Leave to Appeal to the Decision Issued on 23 September 2007 (31 October 2007) p. 6. Bemba case, supra note 40, para. 32; Lubanga (ICC-01/04-01/06) Decision on the consequences of non-disclosure of exculpatory materials covered by Article 54(3)(e) agreements and the application to stay the prosecution of the accused, together with certain other issues raised at the Status Conference on 10 June 2008 (13 June 2008) para. 79; Situation in Uganda, supra note 49, para. 30.

Security Council Referrals to the ICC and EU Fundamental Rights

to adopt an expansive reading of the term ‘fair hearing’.51 Full equality, provides protection to the accused against discriminatory practices before the ICC.52 The minimum guarantees are listed in the subparagraphs of Article 67(1). First, under subparagraph (a) the accused is “[t]o be informed promptly and in detail of the nature, cause and content of the charge, in a language which the accused fully understands and speaks”. This provision builds on the guarantees during investigation53 and confirmation of charges.54 As in Article 55(1)(a), requirement to be informed in the language the accused understands or speaks is qualified by the term ‘fully’. Here, as well, the ICC has stressed this difference and held that it provides a higher degree of rights than in other courts.55 Second, subparagraph (b) entitles the accused to “adequate time and facilities for the preparation of the defence and to communicate freely with counsel of the accused’s choosing in confidence”. Third, subparagraph (c) provides the entitlement to be “tried without undue delay”. This provision complements other provisions on “expeditious proceedings” elsewhere in the Statute.56 Naturally, what constitutes undue delay would vary according to the complexity of the case in question. The expeditiousness of trial is, furthermore, taken into consideration when joinder of cases is decided on.57 Fourth, under subparagraph (d) the right of presence at trial is laid down. This right is explicitly limited by Article 63(2) in case of disruptive behaviour of the accused. The right is further limited by the possibilities for ex parte hearings in certain circumstances.58 Such circumstances are warranted by the protection of witnesses or sensitive evidence,59 although, if necessary in the interests of justice,

51

52 53 54 55 56 57

58 59

Lubanga (ICC-01/04-01/06) Décision relative au système définitif de divulgation et a l’établissement d’un échéancier, Annexe I, Analyse de la décision relative au système définitif de divulgation (15 May 2006) para. 97; Schabas, supra note 3, p. 800; W. Schabas, An Introduction to the International Criminal Court (CUP, Cambridge, 2001) pp. 98-99. Schabas, supra note 3, p. 801. Rome Statute, supra note 5, Art. 55(2)(a). Ibid, art 61(3); See also Regulations of the Court, ICC-BD/01-01-04 (adopted 26 May 2004, entered into force 26 May 2004), Regulation 52. Katanga et al case, supra note 38, para. 49. Rome Statute, supra note 5, art 64(2); Rules of Procedure and Evidence, Rule 101. Katanga et al (ICC-01/04-01/07 OA 6) Judgment on the Appeal Against the Decision on Joinder rendered on 10 March 2008 by the Pre-Trial Chamber in The Prosecutor v. Germain Katanga and Mathieu Ngudjolo Chui Cases (9 June 2008) para. 8. Schabas, supra note 3, p. 807. Rome Statute, supra note 5, Art 72(5)(d); Rules of Procedure and Evidence, supra note 35, Rules 57, 74, 81(2), 83, 88(2), 134(1).

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the presence should be allowed.60 The right of self-representation is also included in subparagraph (d). It complements the right during investigation61 and is further elaborated in the Rules of Procedure and Evidence.62 So far this right has not been exercised.63 Fifth, under subparagraph (e), the right to examine witnesses and present defences and evidence is provided for. This provision, it has been held, introduces “adversarial hearing” at the ICC.64 The mode and order of questioning witnesses and presenting evidence is determined by the presiding judge so as to be effective and fair for the determination of the truth.65 Be that as it may, the defence has the right to examine a witness last.66 However, an important thing to note is that the ICC cannot compel witnesses to appear before it with subpoena, for example, due to the difficulties with State cooperation in that regard.67 The rights to present defences and evidence are to be considered part of the fair trial guarantee enshrined at the beginning of Article 67. Those rights are further substantiated by Part 3 of the Statute, which sets out defences and the obligation in Article 67(2) of the Prosecutor to disclose evidence, respectively. Sixth, subparagraph (f) entitles the accused to an interpreter and translation as required by fairness, free of any cost, if the relevant proceedings or documents “are not in a language which the accused fully understands and speaks”. It should be noted that the last words of the provision are identical to Article 67(1)(a) and Article 55(1)(c). The interpretation of the latter two must, therefore, be applicable to this provision as well. Thus, it was held that, under this provision, the accused has the right to be provided with the translation of all documents which are in a language which he does not fully understand or speak for the purpose of participating effectively in his criminal trial.68 Seventh, subparagraph (g) provides for the right of silence of the accused. It complements the respective right at the investigation stage which is similarly

60 61 62 63 64

65 66

67 68

W. Schabas 2010, supra, note 3, p. 807. Rome Statute, supra, note 5, Art. 55(2). Rules of Procedure and Evidence, supra, note 34, Rule 21(4). W. Schabas 2010, supra, note 3, p. 808. Lubanga (ICC-01/04-01/06 OA8) Decision of the Appeals Chamber on the Joint Application of Victims a/0001/06 to a/0003/06 and a/0105/06 concerning the ‘Directions and Decision of the Appeals Chamber’ of 2 February 2007 (13 June 2007) para. 18. Regulations of the Court, supra, note 53, Regulation 43. Rules of Procedure and Evidence, supra, note 34, Rule 140(2); This is subject to Article 64, paragraphs 8 (b) and 9, Article 69, paragraph 4 of the Statute, and rule 88, sub-rule 5 of the Rules of Procedure and Evidence. W. Schabas 2010, supra, note 3, p. 811. Lubanga (ICC-01/05-01/08) Decision on the Defence’s Request Related to Language Issues in the Proceedings (4 December 2008) para. 14.

Security Council Referrals to the ICC and EU Fundamental Rights

worded. The scope of the right extends as far as requiring that the silence of the accused is not a consideration in the determination of guilt or innocence.69 The right to silence is also closely connected to the right to presumption of innocence and is not qualified whatsoever, except in relation to certain specific defences.70 Next, subparagraph (h) contains the rather unusual entitlement to “make an unsworn oral or written statement in his or her defence”. This provision, it should be noted, cannot be used to circumvent the sworn testaments. This is because there is nothing to require the judges to give unsworn statements the weight they would give them if they were sworn statements.71 This right is not limited as to the time and form of the statement.72 Finally, subparagraph (i) provides for a prohibition on the reversal of the burden of proof. This right is complementary to Article 66 of the Statute as it furthers the guarantee of the presumption of innocence. Substantively, it means that the accused does not have to prove his innocence but only to cast doubt on the validity of the accusation made.73 Under Article 67(2) the Prosecutor is under an obligation to disclose to the defence evidence in possession or control of the Prosecutor which he or she “believes shows or tends to show the innocence of the accused, or to mitigate the guilt of the accused, or which may affect the credibility of prosecution evidence”. This provision complements other disclosure rules in the Rome Statute74 and is connected to the obligation to investigate incriminating and exonerating circumstances equally.75 The obligation in Article 67(2) is fundamental part of the right to a fair trial.76 However, the obligation is not limitless. An important limitation is the power of the Prosecutor to collect evidence confidentially.77 Furthermore, when 69 70 71 72 73 74 75

76

77

Rome Statute, supra note 5, Art. 67(1)(g); Schabas, supra note 3, p. 813. Lubanga (ICC-01/04-01/06 OA 11) Partly dissenting opinion of Judge Georghios M. Pikis (11 July 2008) para. 14. Schabas, supra note 3, p. 815. Lubanga (ICC-01/04-01/0) Decision on opening and closing statements (22 May 2008) para. 14. Lubanga case, supra note 70. See Rome Statute, supra note 5, Arts. 61(3), 64(3)(c); Also Rules of Procedure and Evidence, supra note 35, Rule 77. Bemba (ICC-01/04-01/08) Decision Regarding the Disclosure of Materials Pursuant to Article 67(2) of the Rome Statute and Rule 77 of the Rules of Procedure and Evidence (12 November 2008) para. 14; Schabas, supra note 3, p. 817. Lubanga case, supra, note 49, para. 79; Katanga et al (ICC-01/04-01/07) Decision on Article 54(3)(e) Documents Identified as Potentially Exculpatory or Otherwise Material to the Defence’s Preparation for the Confirmation Hearing (20 June 2008) para. 3. Lubanga (ICC-01/04-01/06 OA 13) Judgment on the appeal of the Prosecutor against the decision of Trial Chamber I entitled ‘Decision on the consequences of non-disclosure of exculpatory materials covered by Article 54(3)(e) agreements and the applica-

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a State provides confidential information subject to national security concerns,78 the disclosure obligation on the Prosecutor is further relaxed.79 When there is doubt as to the classification of information under the categories spelled out in the first sentence there is a determination by the ICC. Upon request of the Prosecutor, this can take place in an ex parte hearing,80 where it is decided based on the access of the defence to the materials in question.81

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Fundamental rights under EU law affected by a Security Council referral

After reviewing the protection for an individual before the ICC it is time to discuss the protection provided under EU law. EU fundamental rights are part of the general principles of EU law,82 and can be found listed in the Charter,83 which is not, however, the only source of EU fundamental rights.84 Nevertheless, the Charter will be used as a reference text and a starting point for the assessment of fundamental rights.85 The Charter is a binding instrument having the same legal value as the EU Treaties.86 The rights therein are as they result from the constitutional traditions and international obligations common to the Member States, the Euro-

78 79 80 81 82 83 84

85

86

tion to stay the prosecution of the accused, together with certain other issues raised at the Status Conference on 10 June 2008’ (21 October 2008) para. 43; Schabas, supra note 3, p. 818. Rome Statute, supra note 5, Art. 72(1). Schabas, supra,note 3, p. 820. Rules of Procedure and Evidence, supra note 35, Rule 83. Katanga et al case, supra note 76, para. 39. Treaty on European Union [2008] OJ EU C115/13, Art. 6(3). Charter of Fundamental Rights of the European Union [2007] OJ EU C303/01. The sources of EU fundamental rights are the Charter, the ECHR and the common constitutional traditions of the Member States. See e.g. H. Raulus ‘The Charter of Fundamental Rights as a Set of Constitutional Principles’ in M. Trybus and L. Rubini (eds), The Treaty of Lisbon and the future of European law and policy (Elgar, Cheltenham, 2012) p. 190; H. Raulus ‘Fundamental Rights in the Area of Freedom, Security and Justice’ in S. Wolff et al. (eds.), Freedom, security and justice after Lisbon and Stockholm (TMC Asser Press, The Hague 2011) p. 220; K. Lenaerts ‘The Court of Justice of the European Union and the Protection of Fundamental Rights’ 31 Polish Yearbook of International Law (2011) p. 80. Joint communication from Presidents Costa and Skouris (24 January 2011); T. Marguery ‘The Protection of Fundamental Rights in European Criminal Law After Lisbon: What Role for the Charter of Fundamental Rights?’ 37 European Law Review (2012) p. 456. Treaty on European Union [2008] OJ EU C115/13, Art. 6(1).

Security Council Referrals to the ICC and EU Fundamental Rights

pean Convention of Human Rights (‘ECHR’),87 the Social Charters adopted by the EU and the Council of Europe and the case law of the Court of Justice of the EU and European Court of Human Rights (‘ECtHR’).88 The interpretation of the rights listed in the Charter is to be in accordance with the provisions in Title VII of the Charter and the courts of the EU and the Member States are to give due regard to the explanations of the Charter.89 For the purposes of this paper only the fundamental rights relevant for a SC referral to the ICC will be discussed. Before looking at the substantive rights, however, the scope of application ratione personae and ratione loci of the rights of the Charter, which are going to be discussed, need to be clarified. This is an important issue in the case of Security Council referrals.

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Personal and territorial scope of application of the discussed rights

The Charter explicitly states that rights which correspond to those of the ECHR shall have the same meaning and scope.90 This provision is to be read narrowly and not to include the personal and geographical scope of the rights in the ECHR. This is mainly because of the difference between the membership of the EU and the Council of Europe (CoE). This seems obvious at first sight. However, the more subtle consequence of this is that the interpretations given by the ECtHR on the personal and territorial scope of the ECHR do not apply to the EU or, in any event, do not have the force that ECtHR case-law on the interpretation of rights has. In other words, when the ECtHR is faced with the question of whether a certain right is applicable in certain territory, the ECtHR will not interpret the right itself, but rather Article 1 of the ECHR. These are two completely different, albeit closely related issues, which are not to be mixed. This, of course, does not mean that EU law and, for that matter, the fundamental rights cannot have effects outside the territory of the EU. It only means that the personal and territorial scopes of application of fundamental rights are to be given an autonomous interpretation. To begin with, the Charter, in contrast to the ECHR and other international human rights treaties, does not have an express provision on its personal reach.91 87 88 89 90 91

Convention for the Protection of Human Rights and Fundamental Freedoms (adopted 4 November 1950, entered into force 3 September 1953) 213 UNTS 222. Charter of Fundamental Rights of the European Union [2007] OJ EU C303/01, para. 6 of the preamble. TEU, supra note 86, Art. 6(1); The Charter, supra note 88, para. 7 of the preamble, Art. 52(7). The Charter, supra note 88, Art. 52(3); Explanations Relating to the Charter of Fundamental Rights [2007] C303/17, p. 33. D. McGoldrick, ‘The Charter and United Nations Human Rights Treaties’ in S. Peers and A. Ward (eds.), The European Union Charter of fundamental rights (Hart, Oxford, 2004)

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An early draft of the Charter stated in its Preamble that “each person is therefore guaranteed the rights and freedoms set out hereafter”,92 but this suggestion in the draft did not last. Now the Charter contains different specifications for different categories or groups of persons.93 The rights that will be discussed below apply to all persons as they refer to ‘everyone’ and ‘no one’. Thus, they are not qualified by the citizenship, nationality or the social status of the persons. The territorial scope of application of the EU fundamental rights is to be examined in the context of the different sources that they are comprised from. The ECHR and the common constitutional traditions of the Member States constitute part of the general principles of EU law.94 The Charter on the other hand has the same legal value as the Treaties. The ECJ has not ruled on what this means as regards the territorial application but it seems safe to assume that it means that the articles on the territorial application of the Treaties95 and their interpretations are to be applied.96 This difference in classifications may very well create some confusion in certain situations. For example, in the case of territories like the Overseas Countries and Territories (OCTs), only certain, explicitly listed, provisions of the Treaties apply. Thus, the Charter may not be applicable. However, whenever the EU acts under the Treaty provisions that are applicable, the general principles of EU law apply in full force. Accordingly, it may be the case, sometimes, that fundamental rights protection can be ensured only through the application of general principles, and the Charter completely excluded. However rare such situations may be it is important to remember that they are possible. Leaving exceptional situations aside, the territorial (and potentially extraterritorial) application of the Treaties and thus of the Charter in general should be examined. The rule is that the Treaties apply to the territories of the Member States and other European territories for whose external relations a Member State is responsible and special arrangements are provided for territories that are in a special relationship with some of the Member States.97 However, as the ECJ said, the definitions of the geographical application of the Treaties that have been prescribed do not “preclude [EU] rules from having effects outside the territory of the

92 93 94 95 96

97

pp. 104, 108; Federation of German Industries – BDI, and the Confederation of German Employers’ Associations – BDA, CONTRIB 339 CHARTE 4489/00. D. McGoldrick, supra note 91, p. 108. Ibid. TEU, supra note 86, Art. 6(3). TEU, supra note 86, Art. 52; Treaty on the Functioning of the European Union [2010] OJ C83/47 Arts. 349 and 355. Cf E. Guild et al., Implementation of the EU Charter of Fundamental Rights and its Impact on EU Home Affairs Agencies: Frontex, Europol and the European Asylum Support Office (Study) (European Parliament, Brussels, 2011) p. 48. TEU, supra note 86, Art. 52; TFEU, supra note 95, Arts. 349 and 355.

Security Council Referrals to the ICC and EU Fundamental Rights

[EU]”.98 What would be needed is ‘a sufficiently close link’ between the created situation and EU law or the law of a Member State which falls within the competences of the EU.99 What constitutes a sufficiently close link is to be assessed on a case-by-case basis and with regard to the actual provisions from the Treaties involved. The main principle guiding the ECtHR when deciding on the extraterritorial application of the ECHR is territoriality, as can be seen from the Banković case, and any extraterritorial application is to be exceptional.100 This seems much more limited than the ‘sufficiently close link’ test as it seems to imply that links other than territoriality can satisfy it. However, the present state of the law is not clear. The extent to which the Charter is to be applied throughout the world in respect of EU institutions’ acts or acts of Member States within the scope of EU law is still not clear.101 Whether future EU action in criminal matters will extend the extraterritorial application of EU law is another ‘wait-and-see’. In any event, it should be noted that, whatever the future EU legislation or eventual interpretation of the ECJ are, they should respect the international law rules on extraterritorial jurisdiction.

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Right to an effective remedy and to a fair trial

Article 47 of the Charter safeguards the right to an effective remedy before a tribunal and to a fair and public hearing in reasonable time by an independent and impartial tribunal established by law.102 Furthermore, the possibility of being advised, defended and represented is provided for. Legal aid is to be provided to those who lack sufficient resources if necessary to ensure effective access to justice.

98 99

Case C-214/94 Ingrid Boukhalfa v. Bundesrepublik Deutschland [1996] ECR I-2253, para. 14. See generally in employment relationships Ibid, para. 15; Case 237/83 Prodest v. Caisse Primaire d‘ Assurance Maladie de Paris [1984] ECR 3153 para. 6; Case 9/88 Lopes da Veiga v. Staatssecretaris van Justitie [1989] ECR 2989 para. 15; Case C-60/93 Aldewereld v. Staatssecretaris van Financiën [1994] ECR I-2991 para. 14; Case C-106/11 M.J. Bakker v. Minister van Financiën [2012] ECR I-0000 para. 28; in the area of competition law Case T-204/03 Haladjian Frères SA v. Commission of the European Communities [2006] ECR II-3779 para. 167; see the argument of the Commission which was rejected because the Commission was to take only the Community interest into account in the particular case and not because it was wrong in all situations Case C-120/94 R, Commission of the European Communities v. Hellenic Republic [1994] ECR I-3037, para. 76. 100 Banković and others v. Belgium and 16 other NATO States (App no 52207/99) (2001) ECHR 2001-XII para. 73. 101 McGoldrick, supra note 91, p. 107. 102 M. D’Amico ‘Article 47 – Right to an Effective Remedy and to a Fair Trial’ in W. Mock et al. (eds.), Human rights in Europe: Commentary on the Charter of Fundamental Rights of the European Union (Carolina Academic Press, Durham, 2010) p. 290.

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The protection referred to in Article 47 of the Charter applies to everyone whose rights and freedoms guaranteed by EU law are violated. The right to an effective remedy (rectius effective judicial protection) is based by the ECJ on the constitutional traditions common to the Member States.103 It is also based on Articles 6 and 13 of the ECHR,104 albeit having narrower scope.105 The protection in the EU is wider as it guarantees effective remedy before a court and the right to fair hearing is not confined to only certain types of disputes.106 Furthermore, the right to effective remedy is not intended to be theoretical and illusory but practical and effective,107 thus practical impediments must not unduly obstruct the exercise of the right108 or otherwise render it virtually impossible or excessively difficult to exercise.109 Effectively, those rights guarantee access to court to the persons to whom they apply. The principle of equality of arms is also included in the right to effective judicial protection.110 It ensures a balance between the parties to proceedings and thus guarantees that any document submitted to the court may be examined and challenged by any party to the proceedings.111 Furthermore, the right to effective judicial protection includes the right to be presented with reasons for a contested decision.112 Finally, the right to legal aid, where necessary to ensure effective

103 104 105

106 107

108 109

110 111 112

Case T-461/08 Evropaïki Dynamiki - Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v. European Investment Bank [2011] ECR I-0000, para. 118. Case C-222/84 Johnston [1986] ECR 1651, para. 18; Joined Cases C-23/04 to C-25/04 Skafianakis [2006] ECR I-1265, para. 28. Explanations, supra note 90, p. 29-30; EU Network of Independent Experts on Fundamental Rights, Commentary of the Charter of Fundamental Rights of the European Union (2006) p. 360. Case C-294/83‘Les Verts’ v. European Parliament [1986] ECR 1339 para. 23; Explanations, supra note 90, p. 30. Marckx v. Belgium (App no 6833/74) (1979) Series A no 31, para. 31; Airey v. Ireland (App no 6289/73) (1979) Series A no 32, para. 24; Artico v. Italy (App no 6694/74) (1980) Series A no 37, para. 33. F. Jacobs, ‘The right to a Fair Trial in European Law’ [1999] EHRLR 2. Case C-312/93 Pertbroeck v. Belgian State [1995] ECR I-4599, para. 23; Case C-326/96, Levez [1998] ECR I-7835, para. 18; Case C-120/97 Upjohn v. Licensing Authority [1999] ECR I-223, para. 32. Opinion of Advocate General Cruz Villalón delivered on 26 June 2012 in Case C-199/11 Europese Gemeenschap v. Otis NV and others, para. 57. Ibid., para. 58. Evropaïki case, supra note 103, para. 122; see also Case 36/75 Rutili [1975] ECR 1219, paras. 37- 39; Case 222/86 Union nationale des entraineurs et cadres techniques professionnels du football (UNECTEF) v. Georges Heylens [1987] ECR 4097, paras. 15-16.

Security Council Referrals to the ICC and EU Fundamental Rights

remedy, is also laid down in ECtHR’s case law.113 The ECJ has held it (and arguably extended its scope) to cover both natural and legal persons as regards the EU.114

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Presumption of innocence and right of defence

Article 48 of the Charter provides for the presumption of innocence and rights of the defence.115 It is said to be the same as the Article 6(2) and (3) of the ECHR and, pursuant to Article 52(3) of the Charter, to have the same scope and meaning as the corresponding protection guaranteed by the ECHR.116 The presumption of innocence has been held by the ECJ to imply that everyone is presumed innocent until proven guilty according to law. Thus, it precludes “any formal finding and even any allusion to the liability of an accused person for a particular infringement in a final decision unless that person has enjoyed all the usual guarantees accorded for the exercise of the rights of the defence in the normal course of proceedings resulting in a decision on the merits of the case”.117 However, it does not preclude limited in time, precautionary measures that are laid down by law and adopted by a competent authority, that neither constitute sanctions nor prejudge finding of innocence or guilt.118 Furthermore, under ECtHR case law the presumption of innocence permits certain reversals of the burden of proof119 and the drawing of reasonable inferences from the applicant’s behaviour (i.e. silence).120 As regards the burden of proof states are required to maintain reversed presumptions within reasonable limits, taking into account the importance of what is at stake, maintaining the rights of the defence, observing the principles of proportionality and necessity, and providing justification thereof.121 Be that as it may, the presumption of innocence does require a prosecution to 113 114

115

116 117

118 119 120 121

Airey case, supra, note 107. Case C-279/09 DEB Deutsche Energiehandels- und Beratungsgesellschaft mbH v. Bundesrepublik Deutschland [2011] ECR I-13849, paras. 35-36; T. Marguery, supra note 85, p. 457. M. D’Amico ‘Article 48 – Presumption of Innocence and right of defence’ in W. Mock et al. (eds.), Human rights in Europe: Commentary on the Charter of Fundamental Rights of the European Union (Carolina Academic Press, Durham, 2010) p. 299. Explanations, supra note 90, p. 30. Joined Cases T-22/02 and T-23/02 Sumitomo Chemical and Sumika Fine Chemical v. Commission [2005] ECR II-4065, para. 106; Case T-474/04 Pergan Hilfsstoffe für industrielle Prozesse v. Commission [2007] ECR II-4225, para. 76; Case T-299/08 Elf Aquitaine SA v. European Commission [2011] ECR II-4255, para. 168. Case T-49/07 Sofiane Fahas v Council of the European Union [2010] ECR II-5555, para. 64. Salabiaku v. France (App no 10519/83) (1988) Series A no 141 A, para. 27. John Murray v. the United Kingdom (App no 18731/91) (1996) ECHR 1996-I. Salabiakucase, supra note 119, para. 28; V. Rose, ‘Reverse burdens of proof: the golden thread in Article 101(3) TFEU’ (ALBA Annual Conference, May, 2011), para. 15.

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prove its case without using evidence obtained through coercive or oppressive methods against the will of the accused.122 The rights of defence are closely connected to the right to an effective legal remedy enshrined in Article 47 of the Charter,123 and often complement each other, as will be seen below. The right of defence includes the rights to be heard,124 to effective judicial review,125 to access to the file,126 and to be given sufficient period of time to exercise these rights.127 The right to be heard applies to all proceedings initiated against a person which are liable to culminate in a measure adversely affecting that person.128 It gives to the parties the right of inspecting and commenting on the evidence and observations submitted to the court,129 thus making their views known effectively.130 As a consequence, this places a duty on the authorities to be attentive of the submitted observations, to examine carefully and impartially relevant aspects of the individual case and, eventually, to give a detailed statement of reasons for the decision.131 The obligation to state reasons and the right to effective judicial review also require that the reasoning followed by the institution that adopted the measure is communicated in a clear and unequivocal fashion, either at the

122 123 124 125 126

127 128

129 130

131

Heaney and McGuinness v. Ireland (App no 34720/97) (2000) ECHR 2000-XII. Kadi I case, supra note 1, para. 349. Case C-89/08 P Commission v. Ireland and Others [2009] ECR I-11245, para. 50. Kadi I case, supra note 1, para. 333. Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland A/S and Others v. Commission of the European Communities [2004] ECR I-123, para. 68. Case C-349/07 Sopropé [2008] ECR I-10369, para. 37. Case C-277/11 M. M. v. Minister for Justice, Equality and Law Reform, Ireland and Attorney General [2012] ECR I-0000, para. 85; Commission v. Ireland case, supra note 112; Sopropé case, supra note 127, para. 36; Case C-462/98 P Mediocurso-Estabelecimento de Ensino Particular Ld.ª v. Commission of the European Communities [2000] ECR I-7183, para. 36; Case C-7/98 Krombach [2000] ECR I-1935, para. 42; Case C-32/95 P Commission v. Lisrestal and Others [1996] ECR I-5373, para. 21; Case 17/74 Transocean Marine Paint Association v. Commission [1974] ECR 1063, para. 15. Commission v. Ireland case, supra note 124, para. 52; Case C-450/06 Varec [2008] ECR I-581, para. 47. M. M. case, supra note 128, para. 87; Case C-287/02 Spain v. Commission [2005] ECR I-5093, para. 37; Lisrestal case, supra note 128, para. 21; Mediocurso case, supra note 128, para. 36; Case C-141/08 P Foshan Shunde Yongjian Housewares & Hardware v. Council [2009] ECR I-9147, para. 83; Sopropé case, supra note 127, para. 37. M. M. case, supra note 128, para. 88; Case C-269/90 Technische Universität München [1991] ECR I-5469, para. 14.

Security Council Referrals to the ICC and EU Fundamental Rights

time the measure is adopted or as swiftly as possible afterwards.132 This is needed in order to enable those persons or entities concerned to ascertain the reasons for the measure and exercise their right to bring an action.133 There is no explicit provision governing the language of the communications required by Article 48. However, Article 6(2) ECHR on which it is based provides for “a language he understands” and “to have free assistance of an interpreter if he cannot understand or speak the language used in court”. Furthermore, the obligation to state reasons, discussed above, requires that the person concerned should be able to understand, clearly and unequivocally, the reasoning behind the decision affecting him. Thus, it could be concluded that a decision should be given to its addressee in an understandable language. Otherwise, the effectiveness of the rights of the defence would not be respected. However, the exact standard as regards the understanding of the given language by the addressee is not clear. The right of access to the file provides the person concerned with the opportunity to examine all the documents in the investigation file which may be relevant for his defence.134 Those include both incriminating and exculpatory evidence, save for internal documents of the Commission, documents containing trade secrets and other confidential documents.135 Failure to communicate a document breaches this right if (1) the document is relied on to prove a point in the case which could be proved only by reference to this document,136 and (2) where an exculpatory document is concerned it need only be established that the nondisclosure was able to influence, negatively, the course of the proceedings and the content of the decision.137

132

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134

135 136 137

See generally Case T-192/08 Transnational Company “Kazchrome” AO and ENRC Marketing AG v. Council of the European Union [2011] ECR I-0000, para. 333; Case T-343/06 Shell Petroleum and Others v. Commission [2012] ECR I-0000, para. 108; Joined Cases F-7/11 and F-60/11 AX v. European Central Bank [2012] ECR I-0000, para. 131. Case C-548/09 P Bank Melli Iran v. Council [2011] ECR I-0000, para. 47; Kadi I case, supra note 1, para. 336; Opinion of Advocate General Cruz Villalón delivered 19 December 2012 in Joined Cases P, C-479/11 P, C-480/11 P, C-481/11 P, C-482/11 P Gbagbo v. Council, para. 55. Case T-30/91 Solvay v. Commission [1995] ECR II-1775, para. 81; Case C-199/99 P Corus UK v. Commission [2003] ECR I-11177, paras. 125-128; Aalborg Portland case, supra note 126, para. 68. Aalborg Portland case, supra note 126, para. 68. Case 322/81 Michelin v. Commission [1983] ECR 3461, paras. 7 and 9; Case 107/82 AEG v. Commission [1983] ECR 3151, paras. 24-30; Solvay case, supra note 134, para. 58. Solvay case, supra note 134; Aalborg Portland case, supra note 126, para. 74.

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The right to sufficient time to exercise the rights of defence, if not provided for by EU law it is to be provided by national law in accordance with the principles of equality and effectiveness.138

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Principles of legality and proportionality of criminal offences and penalties

Article 49 of the Charter provides for the principles of nullum crimen sine lege (legality), non-retroactivity and proportionality of penalties.139 The principle of legality “implies that legislation must define clearly offences and the penalties which they attract. That condition is met if the individual concerned is in a position, on the basis of the wording of the relevant provision and with the help of the interpretative assistance given by the courts, to know which acts or omissions will make him criminally liable.” 140 The principle of non-retroactivity that is provided gives twofold protection, first, the prohibition on imposing a heavier penalty and, second, the obligation to apply a lighter penalty, if the law provides for such subsequently to the offence.141 The non-retroactivity of penal provisions is recognised by the ECJ as common to all legal orders of the Member States and it is enshrined in Article 7 ECHR.142 The second paragraph of Article 49 corresponds to Article 7(2) ECHR and has the same meaning and scope as the ECHR provision.143 The purpose of Article 7(2) ECHR is to ensure that the non-retroactivity clause does not affect laws which were passed under exceptional circumstances in order to suppress war crimes and other serious crimes.144 Proportionality between penalties and criminal offences is enshrined in the common constitutional traditions of the Member States and in ECJ’s case law.145 This principle requires an assessment of whether the penalty provided exceeds

138 139

Sopropé case, supra note 127, para. 38. M. D’Amico ‘Article 49 – Principles of Legality and Proportionality of Criminal Offences and Penalties’ in W. Mock et al. (eds.), Human rights in Europe: Commentary on the Charter of Fundamental Rights of the European Union (Carolina Academic Press, Durham, 2010) p. 303. 140 Case C-303/05 Advocaten voor de Wereld [2007] ECR I-3633, paras. 49-50; see also Marguery, supra,note 85, p. 452. 141 M. D’Amico, supra note 139, p. 303. 142 Case C-331/88 The Queen v. Minister of Agriculture, FEDESA Fisheries and Food and Secretary of State for Health, ex parte: Fedesa and Others [1990] ECR I-4023, para. 42. 143 Explanations, supra note 90, p. 31. 144 A.D.Q. c Belgique (Appl no 1028/61) 4 Yearbook 325 (EComHR), p 7; EU Network of Independent Experts on Fundamental Rights, supra note 93, pp. 381-382. 145 Explanations, supra note 90, p. 31.

Security Council Referrals to the ICC and EU Fundamental Rights

what is appropriate and necessary to attain the objective pursued by the rules that have been breached.146 In particular, it has to be assessed whether the provided penalty corresponds with the importance of the aim to be achieved and whether the disadvantages caused are not disproportionate to the aims pursued.147 Needless to say, this is a case-by-case balancing exercise.

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Right not to be tried or punished twice in criminal proceedings for the same criminal offence

Article 50 of the Charter provides for the ne bis in idem principle.148 It is a general principle of EU law149 and corresponds to Article 4(1) of Protocol 7 to the ECHR (not yet ratified by all EU Member States),150 which has narrower scope as it applies to a single state.151 The shortcomings related to the ratifications (or the absence thereof) are remedied, as regards EU law, with the reference to the ECHR, which covers both the Convention and the Protocols to it.152 The ne bis in idem principle prohibits double penalties and double prosecution in criminal proceedings in relation to the same person and the same offence after a final acquittal or convic-

146 Case C-356/97 Molkereigenossenschaft Wiedergeltingen eG v. Hauptzollamt Lindau [2000] ECR I-5461, para. 35; Case C-118/89 Lingenfelser [1990] ECR I-2637, para. 12; Case C-354/95 National Farmers’ Union and Others [1997] ECR I-4559, para. 49; Case C-319/90 Pressler [1992] ECR I-203, para. 12. 147 Molkereigenossenschaft case, supra note 146, para. 36; Case C-8/89 Zardi [1990] ECR I-2515 para. 10; Pressler case, supra note 134, para. 12; Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, para. 41. 148 Opinion of Advocate General Cruz Villalón delivered on 12 June 2012 in Case C-617/10 Åkerberg Fransson, para. 48. 149 Joined Cases 18/65 and 35/65 Gutmann v. EAEC Commission [1966] ECR 103; Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P Limburgse Vinyl Maatschappij and Others v. Commission (LVM) [2002] ECR I-8375, para. 59; Case C-289/04 P Showa Denko v. Commission [2006] ECR I-5859, para. 50; Opinion of Advocate General Kokott delivered on 8 September 2011 in Case C-17/10 Toshiba Corporation and Others v. Úřad pro ochranu hospodářské soutěže [2012] ECR I-0000, para. 99; Opinion of Advocate General Kokott delivered on 15 December 2011 in Case C-489/10 Criminal proceedings against Łukasz Marcin Bonda [2012] ECR I-0000, para. 13. 150 At the time of writing Belgium, Germany, the Netherlands and the United Kingdom have not yet ratified Protocol No 7 to the ECHR. 151 Opinion of Advocate General Kokott in the Bonda case, supra note 149, para. 44; EU Network of Independent Experts on Fundamental Rights, supra note 105, p. 388. 152 Explanations, supra note 90, p. 33; C. Kollonay-Lehoczky, K. Lorcher and I. Schomann, ‘The Lisbon Treaty and the Charter of Fundamental Rights of the European Union’, in N. Bruun, et al. (eds.), The Lisbon Treaty and social Europe (Hart, Oxford, 2012), pp. 76-77.

͜ – Mihail Vatsov

tion within the EU.153 In other words it “prohibits a fresh assessment in depth of the alleged commission of an offence which would result in the imposition of either a second penalty, in addition to the first, in the event that liability is established a second time, or a first penalty in the event that liability not established by the first decision is established by the second”.154 The application of the principle by the ECJ has been different for area of competition law and in the context of the rules governing the area of freedom, security and justice.155 As regards the latter the ECJ has held that for the principle to apply, only identity of the material acts is important, that is, the existence of a set of concrete circumstances which are inextricably linked together.156 As regards what constitutes criminal proceedings and an offence, the ECJ has used the ECtHR’s Engel criteria:157 The legal classification of the offence under national law, the very nature of the offence, and the nature and degree of severity of the penalty that the person concerned is liable to incur.158 As regards the expression ‘final acquittal or conviction’ it means that “a ruling has been given on the question whether an offence has in fact been committed or that the legality of the assessment thereof has been reviewed”.159 It is not clear what exactly the ECJ meant by ‘ruling’. However, if the interpretation of the ne bis in idem principle in Article 54 CISA160 is employed, it would mean decisions definitively discontinuing prosecutions in a Member State, even where such decisions are adopted without judicial involve-

153

M. D’Amico ‘Article 50 – Right not to be Tried or Punished Twice in Criminal Proceedings for the Same Criminal Offense’, in W. Mock et al. (eds.), Human rights in Europe: Commentary on the Charter of Fundamental Rights of the European Union (Carolina Academic Press, Durham, 2010), p. 309. 154 LVM case, supra note 149, para. 61. 155 Opinion of Advocate General Kokott in Toshiba case, supra note 149, para. 116. In her opinion Advocate General Kokott suggested that the ECJ should not use different criteria for different areas of EU law because it is detrimental to the unity of the EU legal order. The ECJ, however, in para. 97 of the judgment, preserved its approach towards competition law cases. 156 Case C-436/04 Van Esbroeck [2006] ECR I-2333, paras. 27, 32 and 36; Case C-467/04 Gasparini and Others [2006] ECR I-9199, para. 54; Case C-150/05 Van Straaten [2006] ECR I-9327, paras. 41, 47 and 48; Case C-367/05 Kraaijenbrink [2007] ECR I-6619, paras. 26 and 28; Case C-261/09 Mantello [2010] ECR I-11477, para. 39. 157 Engel and Others v. the Netherlands (App no 5100/77) (1976) Series A no 22; Sergey Zolotukhin v. Russia (App no 14939/03) (2009); Lauko v. Slovakia (App no 26138/95) (1998) ECHR 1998-VI, para. 56. 158 Case C-489/10 Criminal proceedings against Łukasz Marcin Bonda [2012] ECR I-0000, para. 37. 159 LVM case, supra note 149, para. 60. 160 Convention implementing the Schengen Agreement on the Gradual Abolition of Checks at the Common Borders [2000] OJ L239/19 (Schengen Convention).

Security Council Referrals to the ICC and EU Fundamental Rights

ment and are not judicial decisions as such.161 Be that as it may, the principle does not preclude a resumption of proceedings in respect of the same conduct where the first decision was annulled for procedural reasons without any ruling having been given on the substance of the facts alleged.162

͘

Juxtaposition of the protection before the ICC and the protection under EU law

So far the protection an individual enjoys before the ICC and under EU fundamental rights law have been reviewed. From this examination, it can be seen that all of the EU fundamental rights related to criminal proceedings can be identified in corresponding provisions in the ICC Statute. In particular, the rights protected in (1) Article 47 of the Charter can be found in Articles 55 and 67 of the Statue; (2) Article 48 of the Charter can be found in Articles 55, 66 and 67 of the Statue; (3) Article 49 of the Charter can be found in Articles 22, 23 and 24 of the ICC Statute; and (4) Article 50 of the Charter can be found in Article 20 of the Statute. The repetition of articles from the Statute is due to the groupings of rights in the Statute according to the stage of the procedure. The further the procedure at the ICC goes the more rights the individual enjoys. The scope of the protection guaranteed in the ICC Statute, as it can be seen, does not fall below the protection required under EU law. To the contrary, the ICC Statute provides greater protection than that required under EU law in certain areas. Unlike in the EU, the presumption of innocence at the ICC prohibits any reversal of the burden of proof, and the exercise of the right to silence cannot be a consideration in the determination of guilt or innocence. Furthermore, in the ICC Statute there is a very high level of protection as regards the language in which communication is made with the individual. Moreover, the ICC provides for the quite unique right to make an unsworn statement in defence. Other safeguards in the ICC Statute put in relation to the rights of the individual are that the application and interpretation of the law applicable before the ICC must be consistent with the internationally recognised human rights163 and that any evidence obtained in violation of internationally recognised human rights164 is to be declared inadmissible.165

161

Joined cases C-187/01 and C-385/01 Criminal proceedings against Hüseyin Gözütok and Klaus Brügge [2003] ECR I-1345, para. 38. 162 LVM case, supra note 149, para. 62. 163 Rome Statute, supra,note 5, Article 21. 164 Rome Statute, supra note 5, Article 70(7). 165 See also Rome Statute, supra note 5, Article 36(3)(b)(ii) and the reference to human rights in the section entitled ‘Core Values’ of the Staff Regulations for the International Criminal Court, ICC-ASP/2/Res 2, Regulation 1.2(a).

͜ – Mihail Vatsov

͙

Conclusion

The fight of Mr Kadi for his fundamental rights at the Security Council has recently ended with a positive result for him and this would hardly have happened without the strong stance of the ECJ.166 Although Mr Kadi’s case is, currently, still pending on appeal, it is not expected that the ECJ would drastically change its view about fundamental rights.167 And it should not. This is a victory for the rule of law over arbitrariness. The ECJ should continue to examine the acts of the EU institutions, even when they implement Security Council resolutions. However, the ECJ should not be blinded by its protectionist stance, either. Indeed, the targeted sanctions of the Security Council in the fight against terrorism have regrettably few human rights guarantees, if any, for the individuals that they target. However, this is not the case when the Security Council refers a situation to the ICC. When measures in the EU are adopted in order to implement the Security Council Resolution referring a situation to the ICC or, for that matter, to cooperate with the ICC and the Prosecutor in order to discharge the obligations in the same Resolution connected with the referral, the individual that will be affected will enjoy a high level of protection of his human rights at the ICC. A level of protection that corresponds and even goes further than the protection required under the EU fundamental rights. Furthermore, in cases of Security Council referrals, the Security Council de facto delegates some of its enforcement powers to the ICC and, in particular, the Prosecutor. Thus, the ICC is acting in support of international peace and security, next to bringing justice for some of the most heinous crimes—things that the EU should not turn its back on. Accordingly, if the implementing measures are challenged for incompatibility with fundamental rights and the case finds its way to the ECJ, the ECJ should not strike down those measures, or otherwise declare them contrary to EU fundamental rights, because what matters is the actual protection of the individual and not under which set of rules that protection is provided.

166 Security Council Al-Qaida Sanctions Committee Deletes Entry of Yasin Abdullah Ezzedine Qadi from Its List SC/10785 visited 25 December 2012. 167 Kadi II visited on 31 March 2013.

Public International Law

͙

Declaratory Judgments of the International Court of Justice Juliette McIntyre*

Abstract Of all the remedies awarded by the International Court of Justice, easily the most common is the declaratory judgment. For example, the four judgments awarded by the Court in 2012 each involved, or was in full or in part, a declaratory judgment. However, the remedy itself has been the subject of surprisingly little academic analysis, indeed no meaningful analysis at all for more than a decade. In this time the Court’s jurisprudence and practice in the use of declaratory judgments has undergone significant changes, most particularly with respect to the Court’s use of the declaratory judgment as a mode of reparation in the form of satisfaction. This article not only updates the literature to reflect these changes, but develops a broad conceptual framework for the analysis of declaratory judgments, traversing its theoretical underpinnings, jurisdictional basis and categories of use. In light of this framework, it then turns to assess and analyse the Court’s modern use of declarations as reparation.

͕

Introduction

While the International Court of Justice (‘the Court’) has a broad mandate to “decide in accordance with international law such disputes as are submitted to it”,1 the means by which it may ‘decide’ such disputes and the remedies that the Court may award to parties appearing before it are not prescribed by any of the Court’s founding instruments. Nor have they been the subject of significant recent at-

*

1

LL.M. (Cantab). Assistant Professor, Thompson Rivers University, British Columbia; Associate, Lipman Karas, Adelaide. My sincerest thanks go to Professor James Crawford and Dr Joe McIntyre for their support and encouragement. Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 38.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͝ – Juliette McIntyre

tention in the literature.2 This lack of sustained academic analysis is perhaps most apparent in respect of the most common of these remedies, the declaratory judgment.3 The Permanent Court of International Justice (‘the Permanent Court’) almost immediately established a practice of granting declaratory judgments,4 and the Court has proved unhesitating in creatively expanding the use of the declaratory judgment to address novel situations. The declaratory judgment’s protean and flexible qualities tend to defy simple characterisation; the word ‘declare’ is content free and a declaratory judgment might be directed to almost any subject or object imaginable.5 In this article I aim to provide new conceptual clarity in respect of the role and purpose of the declaratory judgment. I begin by establishing the essential characteristics of the declaratory judgment; while there are commonalities between the declaratory judgment and other remedies, there are a number of distinguishing features which mark the declaratory judgment as a unique, purely ‘judicial’, remedy. Secondly, this article discerns three distinct categories of declaratory judgment that fall within this conceptualisation. Finally, I argue that the Court’s jurisprudence must be assessed against the conceptual boundaries of the declaratory judgment, and examine the conceptual problems that arise from the Court’s apparent use of the declaratory judgment as a mode of reparation (specifically, satisfaction) where it has determined that a State’s responsibility is engaged for a breach of its international obligations. This article posits that the declaratory judgment’s inherent nature as an exclusively judicial remedy, imposed on States by a third party, excludes it from being conceived as a form of reparation, the latter being conceptually limited to interState relationships. Instead, I offer an analysis aimed at re-conceptualising the Court’s jurisprudence, moving beyond the simple acceptance that a declaratory judgment may constitute reparation in the form of satisfaction, ultimately con-

2

3

4 5

The notable exceptions being both more than a decade old: C. Gray, Judicial Remedies in International Law (Clarendon Press, Oxford, 1990) and I. Brownlie, ‘Remedies in the International Court of Justice’ in Vaughan Lowe and Malgosia Fitzmaurice, Fifty Years of the International Court of Justice – Essays in Honour of Sir Robert Jennings (Grotius Publications, CUP, Cambridge, 1996), pp. 557-566. C. Brown, A Common Law of International Adjudication (OUP, Oxford, 2007), pp. 208-9; F.A. Mann, ‘The Consequences of an International Wrong in International and National Law’ 48 British Yearbook of International Law (1976), pp. 1, 10; Gray, supra note 2, p. 96; James Crawford, The International Law Commission’s Articles on State Responsibility (CUP, Cambridge, 2002), p. 233. Treaty of Neuilly‚ Article 179‚ Annex‚ Paragraph 4 (Interpretation), 12 September 1924, PCIJ, Judgment, P.C.I.J. Series A, No. 3, p. 3. “Nothing is declared about nothing”, says French: Justice R. French, ‘Declarations Homer Simpson’s remedy - is there anything they cannot do?’ (FCA) Federal Judicial Scholarship [2007], p. 27.

Declaratory Judgments of the International Court of Justice

cluding that the declaratory judgment as satisfaction must be understood not as a mode of reparation, but as the Court’s only viable means by which to censure wrongful conduct on the part of States. This re-conceptualisation resolves the tension between the nature of the declaratory judgment and its use in practice.

͖

Essential Characteristics of the Declaratory Judgment

A study of the declaratory judgment must begin by outlining its defining characteristics, its unique physiognomy, to provide clarity as to its broad scope and purpose. The first of these characteristics is that the declaratory judgment is a remedy. Making this point explicit emphasises that the declaratory judgment can only be issued at the conclusion of contentious proceedings addressed to the ‘merits’ or final resolution of a particular question or dispute. The judgment’s “declaratory, determinative and adjudicatory function” is perhaps its foremost characteristic.6 As such, the Court must have jurisdiction to award the remedy. Second, while a declaratory judgment is a mere declaration,7 it differs from an ‘executory’ judgment “only in the fact that it does not carry as an appendix a decree of execution.” 8 Third, a judicial declaration resolves the dispute with finality and the force of res judicata vis-à-vis the engaged parties. It is a “final binding determination of the rights of the parties, hence can be rendered only where there are adverse parties in litigation.” 9 Thus, fourth, there must be a concrete dispute, an “existing controversy as to … rights”,10 in which the applicant has a “definite legal interest capable and worthy of judicial protection”, and the respondent “an adverse interest”.11 Moreover the judgment must impact existing legal relations. Judgment will only be given if it can have “a concrete effect in the relations between the parties”.12 In this sense, a “fundamental purpose” of the declaratory judgment is “to clarify and stabilize the legal relations of the parties.” 13 These effects must be capable of effective, future application, and the legal question to be determined cannot be “fictitious, abstract, hypothetical, academic, or dead”.14

6 7 8 9 10 11 12 13 14

E. M. Borchard, Declaratory Judgments (Banks-Baldwin, Cleveland, 1934), p. 8. Ibid. E. M. Borchard, ‘The Declaratory Judgment in the United States’ 37:2 West Virginia Law Quarterly (1931), pp. 127-128. Ibid. Ibid. Ibid., p. 130. S. Rosenne, The Law and Practice of the International Court, 1920-2005, Volume III Procedure (4th edn., Martinus Nijhoff Publishers, Leiden, 2006), p. 1580. Nuclear Tests (Australia v. France), Judgment, 20 December 1974, ICJ, I.C.J. Reports 1974, pp. 253, 321 (para. 21). Borchard, supra note 8, p. 128.

͝ – Juliette McIntyre

͖.͕

Jurisdiction

Despite the lack of a specific provision for the award of declaratory judgments in the Court Statutes, both the Permanent Court and the Court have unhesitatingly accepted that they have jurisdiction to give declaratory judgments.15 While the Court’s jurisdiction is limited by the consent of States,16 once the Court has jurisdiction over the dispute, “no separate basis for jurisdiction is required by the Court to consider the remedies a party has requested for the breach of the obligation.” 17 This formulation acknowledges the importance of the non ultra petita principle,18 but also highlights that where the Court is satisfied that it has jurisdiction to determine the merits of a particular dispute it necessarily follows that the

15 16

17

18

Gray, supra note 2, p. 66; Northern Cameroons (Cameroon v. United Kingdom), 2 December 1963, ICJ, Preliminary Objections, I.C.J. Reports 1963, pp. 15, 36. E.g., Anglo-Iranian Oil Co. case, 22 July 1952, ICJ, Jurisdiction, I.C.J. Reports 1952, pp. 93, 102-3; Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v. Belgium), 14 February 2002, ICJ, Judgment, I.C.J. Reports 2002, pp. 3, 49 (para. 7) (Oda); Certain Phosphate Lands in Nauru (Nauru v. Australia), 26 June 1992, ICJ, Preliminary Objections, I.C.J. Reports 1992, pp. 240, 259-62; Corfu Channel (United Kingdom v. Albania), 25 March 1948, ICJ, Preliminary Objections, I.C.J. Reports 1948, pp. 15, 27; East Timor (Portugal v. Australia), 30 June 1995, ICJ, Judgment, I.C.J. Reports 1995, pp. 90, 101 (para. 26); Case of the monetary gold removed from Rome in 1943, 15 June 1954, ICJ, Preliminary Question, I.C.J. Reports 1954, pp. 19, 32; Certain Questions of Mutual Assistance in Criminal Matters (Djibouti v. France), 4 June 2008, ICJ, Judgment, I.C.J. Reports 2008, pp. 177, 200; Oil Platforms (Islamic Republic of Iran v. United States of America), 12 December 1996, ICJ, Preliminary Objections, I.C.J. Reports 1996, pp. 803, 891-892; Cf. Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v. Russian Federation), 1 April 2011, ICJ, Preliminary Objections, pp. 61-62. See further S. Rosenne, The Law and Practice of the International Court, 1920-2005, Volume II Jurisdiction (4th edn., Martinus Nijhoff Publishers, Leiden, 2006), pp. 549-62; R. Donner, International Adjudication: Using the International Court of Justice (Suomalainen Tiedeakatemia, Helsinki,1988), p. 16.; M. S. M. Amr, The Role of the International Court of Justice as the Principal Judicial organ of the United Nations (Kluwer, The Hague, 2003), p. 178 et seq.; A. Orakhelashvili, ‘The Concept of International Judicial Jurisdiction: A Reappraisal’ 2 Law and Practice of International Courts and Tribunals (2003) pp. 501, 504-5. For principle in respect of Permanent Court see A. P. Fachiri, The Permanent Court of International Justice: Its Constitution, Procedure and Work (2nd edn., OUP, Oxford, 1932), p. 70. LaGrand (Germany v. United States of America), 27 June 2001, ICJ, Judgment, I.C.J. Reports 2001, pp. 466, 485 (para. 48), citing Factory at Chorzów, 26 July 1927, PCIJ, Jurisdiction, P.C.I.J. Series A, No. 9, pp. 4, 22; Cf. C. F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009), p. 167. See also D. Shelton ‘Righting Wrongs: Reparation in the Articles on State Responsibility’ 96 American Journal of International Law (2002) pp. 833, 835. E.g., Corfu Channel case (Assessment of the amount of compensation due from the People’s Republic of Albania to the United Kingdom of Great Britain and Northern Ireland), 15 December 1949, ICJ, Judgment, I.C.J. Reports 1949, pp. 244, 249; Cf. Arrest Warrant case, supra note 16, pp. 18-9 (para. 43).

Declaratory Judgments of the International Court of Justice

Court must be empowered to adjudicate; that is, to deliver a judgment, applicable with binding force between the parties, on the questions submitted to it. As a minimum, this will take the form of a declaratory judgment.19 As Orakhelashvili argues, the Court’s remedial jurisdiction should be interpreted expansively because “the notion of remedies is wider than reparation”.20 What is clear is that the Court’s jurisdiction to award a declaratory judgment is not premised on its jurisdiction to award reparation. Article 36 of the respective Court Statutes21 indicates that States in their optional clause declarations may recognise the compulsory jurisdiction of the Court in respect of the “nature and extent of the reparation to be made for a breach of an international obligation.” 22 However, the Permanent Court in Certain German Interests did not suggest that this clause was the basis of its jurisdiction to issue a declaratory judgment; an approach that points immediately to the conceptual distinction between the declaratory judgment and reparation. Rather, the Permanent Court’s concern was not in respect of its jurisdiction to award a declaratory judgment, but rather a broader concern of competence or admissibility,23 foreshadowing the Court’s

19 20 21

22 23

Cf. Amerasinghe’s hierarchy of remedies, in which the declaratory judgment is considered the least ‘important’: Amerasinghe, supra note 17. A. Orakhelashvili, ‘Questions of International Judicial Jurisdiction in the LaGrand Case’ 15 Cambridge Law Journal (2002) pp. 105, 115. Statute of the Permanent Court of International Justice, opened for signature 16 December 1920, 6 L.N.T.S. 380 (entered into force 8 October 1921), Art. 36(d); Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 36(2)(d). Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 26(2)(d). Certain German Interests in Polish Upper Silesia, 25 May 1926, PCIJ, Merits, P.C.I.J. Series A, No. 7, pp. 4, 18-19. The Permanent Court was content to rely on the broader terms of Article 36 (“[t]he jurisdiction of the Court comprises all cases which the parties refer to it and all matters specially provided for in treaties and conventions in force”), along with Article 63 (“every State … has the right to intervene in the proceedings: but if it uses this right, the construction given by the judgment will be equally binding upon it”) and a reference to Article 14 of the Covenant of the League of Nations, opened for signature 28 June 1919, L.N.T.S. 1 (entered into force 10 January 1920) (“[t]he Court shall be competent to hear and determine any dispute of an international character which the Parties thereto submit to it”) to conclude that a declaratory judgment was not excluded from its jurisdiction. This is consistent with Judge Bustamante’s reasoning in Northern Cameroons (supra note 15): “The admissibility of a declaratory legal action at the international level is recognised in advance in paragraph 2 of Article 36 of the Statute of the Court (sub-paragraphs (a), (b) and (c)).” Northern Cameroons case, supra note 65, p. 170 (Bustamante) and appears to indicate that the primary concern was not a strict one of jurisdiction, but rather a broader concern of competence or admissibility, i.e., the propriety of the Court’s exercising its jurisdiction in the circumstances. See

͝ – Juliette McIntyre

conclusion in LaGrand that where the Court has jurisdiction over the merits of a dispute no separate basis of jurisdiction is required to determine the question of remedies.24 However, the terms of the jurisdictional instrument may provide the basis for, and may be determinative of, the Court’s competence in respect of certain remedies.25 The three mechanisms by which the Court might obtain jurisdiction–compromissory clause, optional clause declaration or special agreement–each impact differently on the Court’s remedial jurisdiction. The primary obligation may carry its own required consequence for breach.26 Indeed, it is possible for the parties to agree to exclude reparation altogether; for example, most territorial disputes are referred to the Court by special agreement and “bypass issues of responsibility”.27 Likewise it is possible that an adjudicatory body might be vested with the power to determine only questions of compensation and not the underlying question of legality.28 Insofar as the Court is empowered to determine the “nature and extent of the reparation” 29 it may be suggested that the Court could be compelled to determine only this, and not whether the breach of an international obligation in fact occurred; that is, not the ‘merits’ of the underlying claim. Neither the Per-

24 25

26

27

28

29

Rosenne, supra note 16, p. 524; H. Lauterpacht, The Development of International Law by the International Court (Stevens and Sons Limited, London, 1958), pp. 205-206. LaGrand case, supra note 17, p. 485 (para. 48). See M. Shaw, ‘The International Court, Responsibility and Remedies’ in M. Fitzmaurice and D. Sarooshi, Issues of State Responsibility before International Judicial Institutions – The Clifford Chance Lectures, Vol. 7 (Hart, Oxford, 2004), pp. 19-33, 21; Cf. Orakhelashvili, supra note 20, p. 123. This was the situation which arose in the LaGrand case, supra note 17: see R. Higgins, ‘The International Court of Justice: Selected Issues of State Responsibility’ in M. Ragazzi (ed.) International Responsibility Today – Essays in Memory of Oscar Schachter (Martinus Nijhoff, The Hague, 2005), pp. 271, 277. E. Milano, ‘Territorial Disputes, Wrongful Occupations and State Responsibility: Should The International Court Of Justice Go The Extra Mile?’ 3 The Law and Practice of International Courts and Tribunals (2004) pp. 509-510. See also H. Mosler, ‘The Area of Justiciability: Some Cases of Agreed Delimitation in the Submission of Disputes to the International Court of Justice’ in J. Makarczyk (ed.), Essays in International Law in Honour of Judge Manfred Lachs (Martinus Nijhoff, The Hague, 1984), p. 411. For example the 1794 Jay Treaty restricted its Commissioners to determining “the amount of … losses and damages”, for which “full and complete compensation … will be made by the British Government.” See Treaty of Amity, Commerce, and Navigation, signed 19 November 1794, 12 Bevans 13 (entered into force 28 October 1795), Art. VII; See also Alabama Claims Arbitration (1872) 1 Moore 495; Treaty of Washington, signed 8 May 1871, 12 Bevans 170 (entered into force 17 June 1871), Art. 1. Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 26(2)(d).

Declaratory Judgments of the International Court of Justice

manent Court nor the present Court has ever been called upon to exercise such a function, but it is theoretically available. Ultimately the question is whether parties, by their instruments of consent, might be able to exclude the Court’s jurisdiction to award a declaratory judgment in the same manner that they are able to exclude the Court’s jurisdiction in respect of reparation. The simple answer is that in the absence of an agreement to limit the Court’s jurisdiction to the determination of reparation, and even in the absence of any express attribution of jurisdiction in respect of remedies, the Court will retain jurisdiction to award declaratory judgments.30 Certainly there are no intrinsic jurisdictional bars to a claim for a declaratory judgment; for example, there is no requirement that local remedies must be exhausted.31 Presuming the Court has jurisdiction to determine the merits, and in the absence of extraordinarily clear language to the contrary in the instrument conferring jurisdiction, there is no basis on which to suggest the Court cannot issue a declaratory judgment. The Court must enjoy as inherent jurisdiction that which it’s judicial character requires.32 Given that it is the duty of the Court to resolve disputes, it must be empowered with the ability to declare the law and legal status of the parties before it; this is an indispensable aspect of the Court’s ability to function as a Court.33 Having submitted to third party adjudication, it is not open to the parties to contract out of that adjudication, which will, at the very least, take the form of a declaratory judgment.

͖.͖

A mere Declaration

Secondly, the factor that arguably most distinguishes the declaratory judgment is that it “conclusively declares the pre-existing rights of the litigants without the appendage of any coercive decree.” 34 Zamir and Woolf describe the declaratory

30 31

32 33 34

See Amerasinghe, supra note 17, p. 168. Although this is somewhat controversial. See R. Ago, ‘Sixth Report on State Responsibility—the internationally wrongful act of the State, source of international responsibility (continued)’, Yearbook of the International Law Commission, Volume II, Part I, Documents of the Twenty-Ninth Session (1977) (U.N. Doc. A/CN.4/SER.A/1977/Add.1 (Part 1)), p. 32 (para. 80); C. F. Amerasinghe, Local Remedies in International Law (2nd edn., Cambridge Studies in International and Comparative Law, CUP, Cambridge, 2004), pp. 265-7; Gray, supra note 2, p.98; Electricity Company of Sofia and Bulgaria, 4 April 1939, PCIJ, Preliminary Objections, P.C.I.J. Series A/B, No. 77, p. 64; Interhandel Case (Switzerland v. United States of America), 21 March 1959, ICJ, Preliminary Objections, I.C.J. Reports 1959, p. 6. Amerasinghe, supra note 17, pp. 164-5. Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 38. Borchard, supra note 6, p. vii; see also E. M. Borchard, ‘The Declaratory Judgment – A Needed Procedural Reform’ 28 Yale Law Journal (1918) pp. 105, 149. Stair’s treatise de-

͝ – Juliette McIntyre

judgment as “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs … to be contrasted with an executory, in other words coercive, judgment which can be enforced by the courts.” 35 The declaratory judgment must be understood as simply a judicial statement “confirming or denying” a legal right or obligation of the parties, in response to a dispute between them.36 Unlike compensation or restitution, the declaratory judgment merely specifies the legal relationship of the parties, and goes no further in providing material relief.37 Such relief may follow in subsequent proceedings,38 but the declaratory judgment is itself a complete remedy.39 This feature may appear to be of little relevance in the international juridical context, given that “la sentence international est juridiquement obligatoire: elle n’est jamais exécutoire.” 40 However, despite its being less common, both the Permanent Court and the present Court have issued judgments that may be considered ‘coercive’, that is, have required some act of compliance on the part of one or both parties: the payment of compensation,41 restitution,42 or the implementation of

35 36 37 38 39 40

41 42

scribed declaratory actions as “those, wherein the right of the pursuer is craved to be declared, but nothing is claimed to be done by the defender”: Viscount Stair, The Institutions of the Law of Scotland deduced from its Originals, and collated with the Civil, Canon and Feudal Laws and with the Customs of Neighbouring Nations (Edinburgh, 1693; More’s edn., 1832), 4.1.46, cited in Lord Woolf and J. Woolf, Zamir and Woolf: The Declaratory Judgment (3rd edn., Sweet and Maxwell, London, 2002), p. 298. Woolf, supra note 34, p. 1. L. Sarna, The Law of Declaratory Judgments (The Carswell Company, Toronto, 1978), p. 1. Ibid. Gray, supra note 2, pp. 97-8; Brownlie, supra note 2, p.560; Borchard, supra note 34, p.149. As the Court’s decision in Colombian-Peruvian asylum case, Judgment of November 20th 1950, I.C.J. Reports 1950, pp. 266, 288 (dispositif ) demonstrates. A. Giardina, ‘La mise en œuvre au niveau national des arrêts et decisions internationaux’ (1979-IV) Hague Recueil, p. 248. See also E. M. Borchard, ‘Editorial Comment – Declaratory Judgments in International Law’ 29 American Journal of International Law (1935) pp. 488, 489. Judgments taking the form of a declaration may also be perceived as less offensive to the sovereignty of States: see Gray, supra note 2, pp. 68, 98; Mann, supra note 3, p. 10; Sunderland, ‘A Modern Evolution in Remedial Rights – The Declaratory Judgment’ 16 Michigan Law Review (1917) pp. 69, 76. E.g., S.S. “Wimbledon”, 17 August 1923, PCIJ, Judgment, P.C.I.J. Series A, No. 1, pp. 15, 30; Corfu Channel case (Compensation), supra note 18, p. 244. E.g., Arrest Warrant case, supra note 16, p. 3, where the Court ordered Belgium to cancel the warrant (paras. 72-6). Congo viewed this remedy as restitution (para. 73), as did the Court, (para. 76). See also Jurisdictional Immunities of the State (Germany v. Italy: Greece Intervening), Judgment of 3 February 2012, p. 51 (para. 139); and arguably the order to conduct “review and reconsideration” in LaGrand, supra note 17, p. 466, to wit, see Orakhelashvili, supra note 16, p. 543.

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delimited boundaries.43 Couvreur suggests that any international judgment can be considered ‘executory’ because “it is not only liable to be complied with but actually requires some compliance”.44 Couvreur sees this in part as a manifestation of the norm pacta sunt servanda: insofar as the parties have necessarily consented to the adjudicative function of the Court, they are bound to comply with the resulting decision.45 However, this approach confuses ‘binding’ with ‘executory’; declaratory judgments are the former but not the latter.46 Important institutional mechanisms do exist to ensure States’ compliance with the executory orders of the Court, where necessary,47 but declaratory judgments are simply a statement of the relevant legal position, and do not need enforcement mechanisms.48 The point is usefully illustrated by the Asylum case, which originated in an unsuccessful coup attempt in Peru in 1948.49 The Colombian Embassy granted Victor Raúl Haya de la Torre asylum, and requested safe conduct from the Peruvian government to permit Haya de la Torre to leave the country. Peru refused, and the parties submitted their dispute to the Court.50 Peru in its counter-claim asked the Court to ‘adjudge and declare’ that the grant of asylum was made in violation of 43

44

45 46 47

48

49 50

E.g., Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada/US), 12 October 1984, ICJ, Judgment, I.C.J. Reports 1984, p. 246; Maritime Delimitation in the Area between Greenland and Jan Mayen (Denmark v. Norway), 14 June 1993, ICJ, Judgment, I.C.J. Reports 1993, p. 38; Maritime Delimitation in the Black Sea (Romania v. Ukraine), 3 February 2009, ICJ, Judgment, I.C.J. Reports 2009, p. 61; Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea intervening), 10 October 2002, ICJ, Judgment, I.C.J. Reports 2002, pp. 303, 456-7 (para. 325.III (B)-(D)) (dispositif ). P. Couvreur, ‘The Effectiveness of the International Court of Justice in the Peaceful Settlement of Disputes’ in A. S. Muller et al., The International Court of Justice – Its Future Role After Fifty Years (Martinus Nijhoff, The Hague, 1997), pp. 83-116, p.106. Ibid., p. 104. See further Section 2.3, infra. Couvreur, supra note 44, p. 106; Q. Wright, ‘The International Court of Justice and the Interpretation of Multilateral Treaties’ 41:2 American Journal of International Law(1947) pp. 445, 448; Charter of the United Nations, opened for signature 26 June 1945, 1 U.N.T.S. 16 (entered into force 24 October 1945), Art. 94. See M. E. O’Connell, ‘The Prospects for Enforcing Monetary Judgments of the International Court of Justice: A Study of Nicaragua’s Judgment Against the United States’ 30 Virginia Journal of International Law (1989) pp. 891, 902-5. On enforcement, see Sir Robert Jennings, ‘The Judicial Enforcement of International Obligations’ (1987) 47 Zeitschrift für ausländisches öffentliches Recht und Völkerrecht, p. 3 et seq.; F. B. Sloan, ‘Advisory Jurisdiction of the International Court of Justice’ 38 California Law Review (1950), p. 830 et seq. On compliance, see C. Paulson, ‘Compliance with Final Judgments of the International Court of Justice since 1987’ 98:3 American Journal of International Law (2004), p. 434 et seq. Asylum case, supra note 39. Ibid., pp. 268-70.

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the Havana Convention on Asylum.51 The Court observed that this counter-claim sought simply to define the legal relations between Colombia and Peru,52 before concluding that the grant of asylum had been prolonged for a reason not recognised by the Convention.53 Stating in the dispositif that “the grant of asylum … was not made in conformity with … that Convention,” 54 the Court declared Colombia to be in breach of its international obligations, but stopped there. Indeed, the Court “left entirely open the problem of what was to happen” to Haya de la Torre.55 Having issued the declaration, the Court was not concerned with how the parties would give effect to it.56 The ‘inconclusiveness’ of this result has been criticised,57 but it highlights a fundamental aspect of the declaratory judgment: it ‘pronounces’ upon a legal relationship, but does not contain “any order which can be enforced against the defendant.” 58 Brownlie argues that all judgments are declaratory of either the existence of international obligations, legal entitlement, or of the absence of legal justification, because even “an award of damages, or an order for restitution … is premised upon a finding of legal entitlement.” 59 This tells only part of the story. The more complete analysis is that every judgment on the merits declares the rights and obligations of the parties; this is an essential aspect of the judicial act and remains true whether or not the judgment is followed by a decree ordering one of the parties to do something.60 However, while every judgement involves a declaration of the applicable law, not every judgment is a ‘declaratory judgment’. This descriptor is limited to the “large and important” class of cases where enforcement does not arise, where “the Court’s task is completed the moment it has declared the

51 52 53 54 55 56

57 58 59 60

Ibid., p. 270. Ibid., p. 280. Ibid., p. 287. Ibid., p. 288 (dispositif). Judge N. Singh, The Role and Record of the International Court of Justice (Martinus Nijhoff, The Hague, 1989), p. 102. A request for interpretation was rejected (Request for Interpretation of the Judgment of November 20th 1950 in the Asylum Case (Colombia v. Peru), 27 November 1950, ICJ, I.C.J. Reports 1950, pp. 395, 402) and further separate proceedings were also rejected on the basis that the Court 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, (Colombia v. Peru), 13 June 1951, ICJ, Judgment, I.C.J. Reports 1951, pp. 71, 83 (dispositif)). See Rosenne, supra note 12, p. 1545; Gray, supra note 2, p. 99. Woolf supra note 34, p. 2. Brownlie, supra note 2, p. 560. Borchard, supra note 6, p. 20.

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law”.61 In these cases, the Court’s function is “completely performed” by determining and deciding the case in a form binding upon the parties.62 Judgments that require any act of execution are not properly conceived of as declaratory.63

͖.͗

Res Judicata

Thirdly, it is critical to highlight that while declaratory judgments do not require execution they are not “mere opinion[s] devoid of legal effect”.64 Declaratory judgments, like all judgments, are binding on the parties,65 and in no way contingent

61 62 63 64 65

Jennings, supra note 48, p. 15. Borchard, supra note 6, p. 8. J. Collier and V. Lowe, The Settlement of Disputes in International Law, Institutions and Procedures (OUP, Oxford, 1999), p. 178. Woolf, supra note 34, p. 4. Certain German Interests case, supra note 23, p. 19; Factory at Chorzów (Merits), 13 September 1928, PCIJ, Judgment, P.C.I.J. Series A, No. 17, pp. 4, 20; Northern Cameroons case, supra note 15, pp. 33, 37. This binding character is reflected in Article 59 of the Court’s Statute: “The decision of the Court has no binding force except between the parties and in respect of that particular case.” (Statute of the Permanent Court of International Justice, opened for signature 16 December 1920, 6 L.N.T.S. 380 (entered into force 8 October 1921) and Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945)) and in the principle of res judicata as a general principle of law: see B. Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP, Cambridge, 1953), p. 336; Collier and Lowe, supra note 63, p. 177; V. Lowe, ‘Res Judicata and the Rule of Law in International Arbitration’ (1996) 8 African Journal of International and Comparative Law pp. 38, 39; I. Scobbie, ‘Res Judicata, Precedent and the International Court: A Preliminary Sketch’ (1999) 20 Australian Yearbook of International Law, p. 299. See also Interpretation of Judgments Nos. 7 and 8 Concerning the Case of the Factory at Chorzów, 16 December 1927, PCIJ, Judgment, P.C.I.J. Series A, No. 13, pp. 4, 23 (Anzilotti). Not every reason or argument given by the Court “is part of the res judicata”: see South-West Africa (Ethiopia v. South Africa; Liberia v. South Africa), 18 July 1966, ICJ, Second Phase, I.C.J. Reports 1966, pp. 6, 334 (Jessup); see also Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), 26 February 2007, ICJ, Judgment, I.C.J. Reports 2007, pp. 43, 95 (para. 126); Rosenne, supra note 12, p. 1571. Cf. Polish Postal Service in Danzig, 16 May 1925, PCIJ, Advisory Opinion, P.C.I.J. Series B, No. 11, pp. 6, 29. See further Rosenne, supra note 12, pp. 1533-4. Moreover, res judicata applies only between the parties to the proceedings, and leaves the rights of third States intact: Couvreur, supra note 44, p. 102 (n47). See also Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), 26 November 1984, ICJ, Jurisdiction and Admissibility, I.C.J. Reports 1984, pp. 392, 431; Frontier Dispute (Burkina Faso/Mali), 22 December 1986, ICJ, Judgment, I.C.J. Reports 1986, pp. 554, 580; Land, Island and Maritime Frontier Dispute (El Salvador/Honduras: Nicaragua intervening), 11 September 1992, ICJ, Judgment, I.C.J. Reports 1992, pp. 351, 30; Nauru case, supra note 16, pp. 240, 261.

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on the parties’ subsequent consent or approval.66 Declaratory judgments are not “a source of advice which [States] are at liberty to disregard”.67 This was confirmed by the Permanent Court’s Judgment No. 13,68 wherein the Permanent Court was asked to interpret its decision in Certain German Interests, specifically whether that case had decided the question of the right of ownership of the factory at Chorzów with binding force in accordance with Article 59.69 In reaching its conclusion (in the affirmative), the Permanent Court noted that its original decision was “in the manner of a declaratory judgment”, the purpose of which was “to ensure recognition of a situation at law, once and for all and with binding force as between the Parties; so that the legal position thus established cannot again be called in question so far as the legal effects ensuing therefrom are concerned.” 70 By this statement, the Permanent Court set down one of the most regularly invoked explanations of the principles underlying the use of the declaratory judgment in international law.71 At first glance, it provides nothing particular to declaratory judgments. It could be interpreted as a mere affirmation that a court’s judgments in contentious proceedings are res judicata. The Permanent Court confirmed, however, that the declaration of a legal situation contained in the operative part of a judgment has binding res judicata effect even where that declaration does not ostensibly require any action on the part of a party. In this way the Permanent Court draws the distinction between ‘binding’ and ‘executory’ orders. As noted above, declaratory judgments are the former but not the latter. The former term is passive, the other active. While the executory orders require immediate action, a binding yet passive declaratory judgment only comes into effect if a State intends to act contrarily to the Court’s declaration, and finds itself bound to comply. In other words, the declaratory judgment binds the parties’ future conduct.72 To this end, the binding force of res judicata must also be understood as not only obliging the 66 67 68 69 70 71

72

Free Zones of Upper Savoy and the District of Gex, 7 June 1932, PCIJ, Judgment, P.C.I.J. Series A/B, No. 46, p. 96, p. 161. See also Mosler supra note 27, pp. 414-5. Lauterpacht, supra note 23, p. 250. Chorzów Factory (Interpretation) case, supra note 65, p. 4. Ibid., p. 20, cf. p. 23 (Anzilotti). See also Fachiri, supra note 16, p. 274. Chorzów Factory (Interpretation) case, supra note 65, p. 20. Application of the Interim Accord of 13 September 1995 (the Former Yugoslav republic of Macedonia v. Greece), 5 December 2011, ICJ, Judgment, p. 20 (para. 49); Northern Cameroons case, supra note 15, pp. 141 (Morelli), 193 (Beb A Don). See also mentions in Avena and Other Mexican Nationals (Mexico v. United States of America), 31 March 2004, ICJ, Judgment, I.C.J. Reports 2004, pp. 12, 19 (para. 67) (Sepúlveda); Right of Passage over Indian Territory (Portugal v. India), 12 April 1960, ICJ, Merits, I.C.J. Reports 1960, pp. 6, 74 (Badawi/Winiarski); and a footnote in Judge Jessup’s Dissenting Opinion in the South West Africa (Second Phase) case, supra note 65, p. 334. Cf. Gray, supra note 2, pp. 101-2; contra Ritter, ‘L’affaire des Essais nucléaires et la notion de jugement déclaratoire’ (1975) 21 Annuaire français de droit international, p. 278 et seq.

Declaratory Judgments of the International Court of Justice

parties to comply with the judgment, but also requiring that the judgment itself is capable of binding the parties’ future conduct. This is aptly demonstrated by the outcome of the Northern Cameroons case. Cameroon asserted that the United Kingdom had failed to meet its obligations in respect of a Trusteeship Agreement for the territory of the Cameroons under British mandate.73 While concerned with the United Kingdom’s responsibility for compliance with its international obligations, no application for restitution, compensation or other reparation was made by Cameroon; it sought only a declaratory judgment.74 Two days after the application was submitted, the Trusteeship Agreement which governed the obligations of the United Kingdom expired.75 In its judgment, the Court emphasised that a declaratory judgment must be “capable of effective application” 76 and must have “some practical consequence”, in the sense that it must affect existing legal rights or obligations of the parties.77 Given that the Trusteeship Agreement had expired, there was “no opportunity for a future act of interpretation or application … in accordance with any judgment the Court might render.” 78 The Court explained that this requirement of “forward reach” 79 may be satisfied in a declaratory judgment where the Court “expounds a rule of customary law or interprets a treaty which remains in force”,80 because its judgment will naturally have “a continuing applicability”.81 Because this was lacking, the Court refused to proceed to the merits. The Court in Northern Cameroons was concerned that its declaratory judgment must be capable of impacting the rights and duties of the parties.82 As noted above, this may be called passive compliance, the idea that the parties may not be required to act immediately to comply, but are restricted in their future conduct.83 This is to be distinguished from a requirement to execute an active, coercive, order.

73 74 75 76 77 78 79 80 81 82 83

Northern Cameroons case, supra note 15, p. 20. Ibid., p. 36. Ibid., p. 26. See also GA Res 1608 (XV). Northern Cameroons case, supra note 15, p. 33. Ibid., pp. 33-4. Ibid., p. 37. Ibid. Ibid. Ibid. See Northern Cameroons case, supra note 15, p. 107 (Fitzmaurice). Cf. L. Gross, ‘Limitations Upon the Judicial Function’ 58 American Journal of International Law (1964) p. 415, p. 421; Mosler, supra note 27, pp. 414-5.

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͖.͘

The ‘Dispute’ Requirement

Finally, it is important to reaffirm that as the existence of a genuine dispute is integral to the Court’s competence,84 its ability to render a declaratory judgment is dependent upon the existence of a dispute.85 As the Court emphasized in the Nuclear Tests cases, “the existence of a dispute is the primary condition for the Court to exercise its judicial function”.86 A dispute sets “the machinery of the Court in motion”,87 and must remain in existence until the Court’s final judgment is rendered.88 There is nothing in the nature of the declaratory judgment that alters this fundamental requirement. A declaratory judgment must relate to, and resolve, a concrete controversy; it cannot be concerned with hypothetical issues. It is this characteristic, along with its binding nature, which differentiates the declaratory judgment from the advisory opinion.89 It follows that declaratory judgments must 84

85

86 87 88 89

Oil Platforms case, supra note17, pp. 803, 855 (para. 30) (Higgins). See also Northern Cameroons case, supra note 15, p. 132; LaGrand case, supra note 17, p. 544 (para. 4) (ParraAranguren). C. Tomuschat, ‘Article 36’ in A. Zimmermann et al. (eds.), The Statute of the International Court of Justice: A Commentary (OUP, Oxford, 2006), p. 597. See also Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Arts. 36, 38(1), 40(1). The Permanent Court defined a ‘dispute’ as “a disagreement on a point of law or fact”: Mavrommatis Palestine Concessions (Greece v. United Kingdom), 30 August 1924, PCIJ, Jurisdiction, P.C.I.J. Series A, No. 2, pp. 6, 11. See also Georgia v. Russia case, supra note 16, p. 15 (para. 29). In South West Africa, the Court posited that a dispute requires that “the claim of one party is positively opposed by the other”: South-West Africa (Ethiopia v. South Africa; Liberia v. South Africa) 21 December 1962, ICJ, Preliminary Objections, I.C.J. Reports 1962, pp. 319, 328. In Northern Cameroons the Court explained that the existence of a legal dispute presupposes “opposing views” as to the interpretation and application of a legal rule: Northern Cameroons case, supra note 15, pp. 15, 27. See also Bosnian Genocide case, supra note 65, p. 614 (para. 29). Similarly, Borchard suggests that a dispute amounts to a “controversy”: the claim by the applicant must be driven by a tangible interest and the respondent must have an interest in opposing that claim. He notes, “[u]nless the parties have such conflicting interests, the case is likely to be characterized as one for an advisory opinion, and the controversy as academic, a mere difference of opinion or disagreement not involving their legal relations, and hence not justiciable”: Borchard, supra note 6, pp. 26-28. This corresponds with Judge Barwick’s explanation that a dispute constitutes “[t]he claim on the one hand and the denial on the other that a right exists or as to its extent or as to its breach”: Nuclear Tests (Australia v. France) case, supra note 13, pp. 428-9 (Barwick). Nuclear Tests (Australia v. France) case, supra note 13, pp. 270-1 (para. 55). South-West Africa (First Phase), supra note 85, p. 565. Arrest Warrant case, supra note 16, p. 12 (para. 24); Georgia v. Russia case, supra note 16, p. 4 (para. 15); Nuclear Tests (Australia v. France) case, supra note 13, pp. 270-2 (paras. 55-9). Sloan, supra note 48, p. 841. Rosenne, supra note 16, p. 964; Legality of the Threat or Use of Nuclear Weapons, 8 July 1996, ICJ, Advisory Opinion, I.C.J. Reports 1996, pp. 226, 236-7 (para.15); Admission of a State to the United Nations (Charter, Art. 4), 28 May 1948, ICJ, Advi-

Declaratory Judgments of the International Court of Justice

be kept within their proper limits; that is, they must not be used as a means of obtaining advisory opinions by States.90 In the words of Judge Petrén, “the essence of the judicial function is to declare the law between the Parties as it exists, and not to declare what the law would have been if the existing law had not existed.” 91 In the first part, the absence of a genuine dispute will ipso facto render a case abstract, and hence non-justiciable.92 However, there are also cases in which the dispute is either divorced from the facts, based on hypothetical facts (i.e. on an act which has not yet occurred), or where the dispute has ceased to be of material significance.93 In each of these scenarios, the appropriateness or otherwise of rendering a declaratory judgment may be determined by asking to what end the judgment is directed. The Court’s judgment must “serve a practical end” by resolving disputed jural relations in respect of either present obligations, or prospectively.94

͖.͘.͕

Where the Dispute is Not Connected to the Facts

The Permanent Court faced such a dispute in the Treaty of Neuilly case. Here, Bulgaria and Greece requested 95 the Permanent Court to do no more than offer its interpretation of the relevant parts of the treaty.96 Despite its not being concerned with any question of fact, Treaty of Neuilly was not an advisory opinion, nor did the Permanent Court suggest that such a request was beyond its competence. Rather, its rendering the judgment implicitly suggests that the Permanent Court considered the declaratory judgment a useful means by which to offer a bind-

90 91 92 93 94 95 96

sory Opinion, I .C.J. Reports 1948, pp. 57, 61; Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970), 21 June 1971, ICJ, Advisory Opinion, I.C.J. Reports 1971, pp. 16, 27 (para. 40), pp. 173-4 (De Castro); Western Sahara, 16 October 1975, ICJ, Advisory Opinion, I.C.J. Reports 1975, pp. 12, 73 (Gros), 121-2 (Dillard); Judge M. Shahabuddeen, Precedent in the World Court (CUP, Cambridge, 2007 reprint), p. 171; Donner, supra note 16, p. 121; M. O. Hudson, ‘The Effect of Advisory Opinions of the World Court’ 42:3 American Journal of International Law (1948) p. 630; Amr, supra note 16, p. 111; K. Oellers-Frahm, ‘Article 96 UN Charter’ in A. Zimmermann et al. (eds.), The Statute of the International Court of Justice: A Commentary (OUP, Oxford, 2006), p. 189. Lauterpacht, supra note 23, p. 201. Fisheries Jurisdiction (UK v. Iceland), 25 July 1974, ICJ, Merits, I.C.J. Reports 1974, pp. 3, 156-7 (Petrén). Woolf, supra note 34, p. 146. Ibid. Borchard, supra note 34, p. 111. Treaty of Neuilly, P.C.I.J. C/06/2, Documents, Special Agreement for Arbitration, 18 March 1924, Art. 1. Treaty of Neuilly case, supra note 4, p. 9.

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ing interpretation of a treaty where the interpretation itself was in dispute.97 The Treaty of Neuilly was, however, merely a summary judgment, issued pursuant to a joint request which itself was based on an explicit permission in the treaty.98 The Permanent Court did not consider its general competence with respect to declaratory judgments concerned with questions of law that are divorced from a concrete factual scenario. In Certain German Interests, the Permanent Court’s ability to award “purely declaratory judgments” 99 was challenged by the respondent State, Poland, on the basis that Germany’s first claim regarding the effect of the Polish Law of 14 July 1920,100 was ‘abstract’ in character.101 Poland submitted that while the Court could make a decision as to whether the sale of factory at Chorzów was legal or not, it would be contrary to Article 59 for the Court to decide whether the Polish Law was unlawful in general.102 The Polish government also argued that Article 23 of the Geneva Convention under which the Permanent Court was seised only permitted it to hear a dispute concerning the interpretation and application of the Convention, and that “[i]l faut donc qu’il y ait application; des divergences sur l’interprétation sans application ne suffisent pas pour rendre la Cour compétente.” 103 The Permanent Court rejected this argument, finding that “Article 59 of the Statute, which has been cited by Poland, does not exclude purely declaratory judgments. The object of this article is simply to prevent legal principles accepted by the Court in a particular case from being binding upon other States or in other disputes.” 104 By this, the Permanent Court appears to be conscious of the broader normative effect that such a declaratory judgment might have. Poland’s objection certainly suggests that it was concerned about the implications an abstract interpretation of a treaty would have on the legal rights of States parties not present in the proceedings; that the terms of Article 59 were imperative, and because the judgment could only bind the parties to the dispute it was necessarily correct that the judgment should only bind the parties to the dispute. However, the Permanent Court

97 98

See Gray, supra note 2, pp. 96-7. Statute of the Permanent Court of International Justice, opened for signature 16 December 1920, 6 L.N.T.S. 380 (entered into force 8 October 1921), Art. 29. 99 Certain German Interests case, supra note 23, p. 19. 100 Ibid., p. 12. 101 Ibid., p. 16. 102 P.C.I.J., Series C, No.09/1, Speeches Made and Documents Read before the Court, Discours Prononce Par M.Limburg (Representant Le Gouvernement Polonais) a la Séance Publique, 16 July 1925, pp. 46, 99-100. 103 P.C.I.J. C/09/1, Speeches Made and Documents Read before the Court, Discours Prononce Par M.Limburg (Representant Le Gouvernement Polonais) a la Séance Publique, 16 July 1925, pp. 46, 55. 104 Certain German Interests case, supra note 23, p. 19.

Declaratory Judgments of the International Court of Justice

reconciles itself that even a judgment offering only a particular construction of a treaty will not affect the interests of third States; such States have the capacity to intervene if they are concerned to offer their own views on the interpretation but the resulting judgment would bind them as interveners.105 If States choose not to intervene, they will not be bound by the interpretation.106 Relying on Article 14 of the Covenant of the League of Nations, which enabled Permanent Court to “hear and determine any dispute of an international character which Parties thereto submit to it”,107 Article 36(a) of its governing statute, by which the Permanent Court was empowered to consider simply “the interpretation of a treaty”,108 and referring back to its decision in Treaty of Neuilly,109 the Permanent Court concluded that its jurisdiction in respect of the construction and application of a treaty did not require that act of interpretation to be connected to concrete circumstances. Indeed, the Permanent Court held that it not only had the power to make abstract interpretations of treaties but that this was “one of the most important functions” it could perform.110 However, as Judge Wellington Koo subsequently emphasised in Northern Cameroons, despite what was said by the Permanent Court about the acceptability of abstract treaty interpretation, Certain German Interests actually “bore directly on, 105

Ibid. See also Statute of the Permanent Court of International Justice, opened for signature 16 December 1920, 6 L.N.T.S. 380 (entered into force 8 October 1921), Art. 63; Lauterpacht, supra note 23, pp. 205-6. 106 However, legal conclusions by the Court undoubtedly carry a certain authority stemming beyond the immediate confines of the case (Sir Gerald Fitzmaurice, ‘Some Problems Regarding the Formal Sources of International Law’ in Symbolae Verzijl, Présentées au Professeur J.J.W. Verzijl à l’occasion de son LXX-ième anniversaire (Martinus Nijhoff, The Hague, 1958), p. 170) and the Court has been cognizant of this: see Aegean Sea Continental Shelf (Greece v. Turkey) (Jurisdiction), I.C.J. Reports 1978, p.3, pp. 6-17 (para. 39). See also J. J. Quintana, ‘The International Court of Justice and the Formulation of General International Law: The Law of Maritime Delimitation as an Example’ in A.S. Muller, D. Raič and J.M. Thuránszky, The International Court of Justice – Its Future Role After Fifty Years (Martinus Nijhoff, The Hague, 1997), pp. 367-384, p. 372. For example Jennings points out that where the Court declares a boundary, that boundary is valid erga omnes (Jennings, supra note 40, p. 12). As Couvreur observes, the rule of res judicata “is seen to have limitations when a court is asked to interpret clauses of treaties which may be in question in different disputes”: Couvreur, supra note 44, pp.102-3 (n47). See further Lauterpacht, supra note 23, p. 62. 107 Covenant of the League of Nations, opened for signature 28 June 1919, L.N.T.S. 1 (entered into force 10 January 1920), Art. 14. 108 Statute of the Permanent Court of International Justice, opened for signature 16 December 1920, 6 L.N.T.S. 380 (entered into force 8 October 1921), Art. 36. 109 Certain German Interests case, supra note 23, pp. 18-9. See also Fachiri, supra note 16, p. 235. 110 Certain German Interests case, supra note 23, pp. 18-9.

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and was meant to settle, the disputes between the parties.” 111 The interpretation of the Convention “could not have had more concrete cases for application.” 112 Moreover, the Permanent Court appeared to move away from favouring abstract interpretation in the case concerning the Interpretation of the Statute of Memel Territory, where the Court highlighted the “inconvenience” 113 resulting from the fact that a number of the questions in the application by the United Kingdom, France, Italy and Japan114 were “formulated as questions purely in abstracto, without any reference to the facts of the dispute which has arisen.” 115 The Permanent Court was particularly perturbed by the question which asked the Court to state the conditions and circumstances in which a right to dismiss the President of the Directorate would exist.116 Having found, as a matter of broad principle,117 that the Statute of Memel Territory permitted the Governor of that territory to dismiss the President in cases of serious acts which would violate the relevant Convention,118 the Court refused to go further, noting that its exposition of the broad principle was “sufficient to indicate the conditions and circumstances in which such a right would exist” 119 but observing that the question of “whether or not such conditions or circumstances were present would always depends on the facts of the particular case.” 120 Judge Anzilotti was not even prepared to go as far as the majority, rather arguing the Court should have found the application “inadmissible” as it did not “embody the essential features of a claim for legal redress”121 and critically observing that “[i]n its judicial capacity, the Court cannot answer questions; it must pass upon claims.” 122 In the bilateral context, the Permanent Court’s proposition in Certain German Interests is uncontroversial: the two parties to the treaty are bound by the Court’s construction as res judicata whether that construction is abstract or grounded in concrete circumstances. But it is unclear that an abstract interpretation of a 111 112 113 114 115 116 117 118 119 120 121 122

Northern Cameroons case, supra note 15, p. 62 (Wellington Koo). Ibid. Interpretation of the Statute of the Memel Territory, 11 August 1932, PCIJ, Judgment, P.C.I.J. Series A/B, No. 49, pp. 294, 311. P.C.I.J. C/059, Application Instituting Proceedings, 11 April 1932, Documents of the Written Proceedings, pp. 12-3. Interpretation of the Statute of the Memel Territory case, supra note 113, p. 311. Ibid., p. 312. Ibid., p. 321. Ibid., p. 337. Ibid., p. 321. Ibid. Ibid., p. 349. Ibid., p. 350. Cf. Fisheries case (UK v. Norway), 18 December 1951, ICJ, Judgment, I.C.J. Reports 1951, p. 116.

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multilateral treaty would be successfully contested by different States in different proceedings, despite its not being formally binding.123 The terms of the treaty do not change, and providing there are no reservations which impact the applicability of particular clauses, it cannot be supposed that the Court would have reason to interpret the treaty differently.124 Indeed in Avena, the Court appeared to confirm that where it has to construe a multilateral treaty, “this construction applies also to future cases”,125 and particularly emphasised “the fact that in this case the Court’s ruling has concerned only Mexican nationals cannot be taken to imply that the conclusions reached by it in the present Judgment do not apply to other foreign nationals finding themselves in similar situations”.126 The reason that a different interpretation may be required in different cases stems from the impact of the concrete factual circumstances on the law. Courts, by the nature of their function, apply the abstract rule of law to concrete cases, thus creating the legal rule for the case before them.127 In this act, the task of the remedy is to “convert law into results”.128 But as Higgins observes, in a situation which calls for the abstract interpretation of a treaty, “[t]he line between the performance of a purely academic function, and the granting of a declaratory judgment, is obviously fine”.129 The Court must be cautious not to stray too far from the immediate factual confines of the situation appertaining to the parties before it.

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Where the Issue is Hypothetical

Certainly the Court should not, in contentious proceedings, engage in speculation as to the lawfulness of, or legal results flowing from, hypothetical facts.130 As Ritter notes, ‘[u]n comportement futur, hypothétique, inconnu, ne peut pas être apprécié; il ne peut, par conséquent, constituer l’objet d’un prononcé judiciaire.’ 131 In

123 124 125 126 127 128 129 130 131

Fitzmaurice, supra note 106, p.170; Couvreur, supra note 44, pp. 102-3 (n47); Lighthouses Arbitration between France and Greece (France v. Greece) (1956) 23 ILR 81, p. 86. See S. L. Bray, ‘Preventive Adjudication’ 77 University of Chicago Law Review (2010) pp. 1275, 1294. A. Orakhelashvili, ‘Judicial Competence and Judicial Remedies in the Avena Case’ 18 Leiden Journal of International Law (2005) pp. 31, 47. See also Avena case, supra note 71. Avena case, supra note 71, p. 70 (para. 151). H. Lauterpacht, The Function of Law in the International Community (OUP, Oxford, 1933, reprint 2011), p. 263. D. Shelton, Remedies in International Human Rights Law (2nd edn., OUP, Oxford, 2005), p. 20. R. Higgins, ‘Policy Considerations and the International Judicial Process’ 17 International and Comparative Law Quarterly (1968) pp. 58, 73. Gray, supra note 2, p. 101; Orakhelashvili, supra note 20, p. 125. Ritter, supra note 72, p. 281.

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the Fisheries Jurisdiction cases, the applicants each requested a declaratory judgment: the United Kingdom requested that the Court find Iceland’s promulgation was “without foundation in international law and … invalid”,132 while Germany asserted that Iceland’s claim had “no basis in international law and can therefore not be opposed to the Federal Republic of Germany”.133 However the Court refused Germany’s request for a declaration “establishing the principle” 134 that compensation was due from Iceland for interference with German fishing vessels.135 The United Kingdom had abandoned its own similar claim.136 The Court highlighted that it was not possible to request a declaration that compensation is due unless “the claimant asks the Court to … determine, in a subsequent phase of the same proceedings, the amount of damage to be assessed.” 137 In other words, the Court rejected the possibility of ordering an obligation to make reparation in the abstract, without sufficient evidence and calculation of actual loss, whether that evidence is presented in the same or subsequent proceedings.138 It is also important not to misconstrue the impact of the ‘forward reach’ requirement of a declaratory judgment, which Gray appears to do when she suggests that a declaratory judgment might also “give detailed guidance to states on their future conduct rather than merely state their relative legal positions”.139 Admittedly, the Court has at times included recommendations on how the parties should conduct themselves, either in the body of the judgment or the dispositif.140 For example, after having declared that Senegal was in breach of its international obligations in Questions Relating to the Obligation to Prosecute or Extradite, the Court ordered Senegal to either extradite Mr. Hissène Habré or submit his case to the competent authorities.141 However, it would be incorrect to surmise 132 133

Fisheries Jurisdiction (UK v. Iceland) case, supra note 91, p. 7 (para. 11). Fisheries Jurisdiction (Federal Republic of Germany v. Iceland), 25 July 1974, ICJ, Merits, I .C.J. Reports 1974, pp. 175, 179 (para. 12). 134 Ibid., p. 204 (para. 76). 135 Ibid., pp. 203-5 (paras. 71-6). 136 Fisheries Jurisdiction (UK v. Iceland) case, supra note 91, p. 7 (para. 12). 137 Fisheries Jurisdiction (Germany v. Iceland), supra note 133, p. 204 (para. 76). 138 Contra Case concerning the Temple of Preah Vihear (Cambodia v. Thailand), 15 June 1962, ICJ, Merits, I.C.J. Reports 1962, pp. 6, 36; see Gray, supra note 2, pp. 106-7. 139 Gray, supra note 2, p. 100; contra the result in the Haya de la Torre case, supra note 56, p. 83 (dispositif) and the Asylum case, supra note 49, p. 288 (dispositif). 140 A. Pellet, ‘Article 38’ in A. Zimmermann, C. Tomuschat and K. Oellers-Frahm (eds.) The Statute of the International Court of Justice: A Commentary (OUP, Oxford, 2006), pp. 695-6. E.g., Société Commerciale de Belgique, 15 June 1939, PCIJ, Judgment, P.C.I.J. Series A/B, No. 78, pp. 160, 178; Gabčíkovo-Nagymaros Project (Hungary/Slovakia), 25 September 1997, ICJ, Judgment, I.C.J. Reports 1997, pp. 7, 79. Cf. Free Zones case, supra note 66, p. 169. 141 Questions Relating to the Obligation to Prosecute or Extradite (Belgium v. Senegal), 20 July 2012, ICJ, Judgment, para. 122(6) (dispositif ).

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that in doing so the Court has ever strayed beyond simply affirming the binding character of its judgments. This is most aptly demonstrated by the LaGrand and Avena cases, which both turned on similar failures by the United States to inform individuals subject to the death penalty of their right to consular assistance from their State of nationality (Germany and Mexico, respectively).142 The Court ordered that should such a scenario be repeated, the United States should provide,143 “review and reconsideration of the conviction and sentence”.144 Orakhelashvili observes that in doing so the Court appears to deviate from the “generally accepted principle” that it “should not deal with hypothetical questions but merely apply legal rules to the existing facts”.145 However because declaratory judgments of the Court are binding, they must be complied with, albeit passively, and a future failure by the United States to comply with the Court’s judgments would have serious, irreversible, consequences for the individuals involved. The Court’s formulation merely emphasises the binding character of its judgment and does not speculate on the legal results flowing from hypothetical facts.

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Where the Dispute has Ceased

Finally, the Court has at times found that events occurring subsequent to the filing of an application may render it without object.146 In this sense the dispute is abstract insofar as a judgment can no longer impact rights and obligations of the parties which may have previously existed. The impact of this requirement is clearly illustrated by the Northern Cameroons case. While it was common ground in that case that a request for a declaratory judgment must relate to an existing dispute,147 the Court held that because the Trusteeship Agreement was no longer in force Cameroon’s application had been rendered “moot” 148 and any judgment “would be without object.” 149 The Court recognised that while it was compelled to state the law in the form of a judgment, this judgment must be “in connection

142 143 144 145 146 147 148

149

Avena case, supra note 71, p. 12; LaGrand case, supra note 17, p. 466. For a detailed analysis of the relationship between these cases, see Orakhelashvili, supra note 16, p. 31 et seq. The LaGrand judgment used the more permissive formulation “allow”. LaGrand case, supra note 17, p. 516 (para. 128(7)) (dispositif ); Avena case, supra note 71, p. 73 (para. 153(11)) (dispositif ). Orakhelashvili, supra note 20, p. 125. See Nuclear Tests (Australia v. France) case, supra note 13, p. 272 (para. 62); Northern Cameroons case, supra note 15, p. 38; Arrest Warrant case, supra note 16, pp. 14-5 (para.3 2). CR 1963/1, 19 September to 3 October and 2 December 1963, p. 397 (Sir John Hobson). Northern Cameroons case, supra note 15, p. 97 (fn1) (Fitzmaurice): “The term ‘moot’ is here used … as denoting a case or claim which is or has become pointless and without object.” Ibid., p. 38.

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with concrete cases where there exists at the time of the adjudication an actual controversy involving a conflict of legal interests between the parties”.150 Judge Fitzmaurice emphasised that it was not the Court’s task “to apportion blame in vacuo”.151 According to the majority, a case which does not impact the legal rights of the parties is abstract, and as such, not justiciable. This could not be remedied by the fact that only a declaratory judgment was sought. As Judge Wellington Koo observed, while a declaratory judgment is not concerned with the question of implementation, this does not mean the Court can render a declaratory judgment where “it could only be one of the nature of an academic pronouncement”.152 Judge Fitzmaurice affirmed that such a judgment, however “high its authority as a pronouncement of law”, would “at most have an academic interest”.153 As he concluded: courts of law are not there to make legal pronouncements in abstracto … they are there to protect existing and current legal rights, to secure compliance with existing and current legal obligations, to afford concrete reparation if a wrong has been committed, or to give rulings in relation to existing and continuing legal situations.154

The Court’s conclusions in this respect were far from unanimous. Judge Badawi, dissenting, thought that it was “more than questionable” that a judgment must have practical application where the application is for an inherently non-executory declaratory judgment.155 Judge Beb A Don observed that the nature of the dispute was “not such as to require a material prejudice”, instead a mere conflict of views concerning interpretation suffices in which case the judgment “cannot be anything but declaratory”.156 Judge Morelli argued that “since a dispute is regarded as existing, the usefulness of the decision resides precisely in the very settlement of the dispute”.157 Morelli’s argument suggests that a declaratory judgment in such a situation has “undoubted legal effects” insofar as the judgment is res judicata and obliges the parties to recognise the dispute as settled in a particular way.158 However, the majority of the Court was rightly concerned that its judgment could not affect the legal duties of the United Kingdom, as those no longer 150 151 152 153 154 155 156 157 158

Ibid., pp. 33-4. Ibid., pp. 97, 100 (Fitzmaurice). Ibid., p. 64. Ibid., p. 98-9 (Fitzmaurice). Ibid. Ibid., p. 151 (Badawi). Ibid., p. 194 (Beb A Don). Ibid., p. 138 (Morelli). Ibid.

Declaratory Judgments of the International Court of Justice

existed, and could not affect the legal rights of Cameroon as it could not and did not assert any right or interest in the subject-matter of the dispute.159 Importantly, and illustratively, the final outcome for Cameroon may have been very different if reparation had been sought, as reparation is conceptually directed to the redress of past harm.160 As Judge Fitzmaurice emphasized, there would be nothing unusual in a claim for a declaratory judgment where the treaty was still in force, because that judgment would serve a dual purpose: it would prohibit continuing breaches, thus having immediate effect, and would provide a correct interpretation of the treaty, thus serving “a useful and effective legal purpose during the life-time of the treaty”.161 Equally, Fitzmaurice noted that it would be “quite normal” to make a claim for “compensation or other reparation” in respect of damage caused by breaches of a treaty which has ceased to be in force.162 But the combination of a “defunct” 163 treaty and no claim for reparation meant the declaratory judgment could not address “rights or obligations for either party to receive, enjoy, do or refrain from doing anything.” 164 Similarly in the Nuclear Tests cases, the Court was faced with a situation in which the claim concerning French atmospheric nuclear testing in the South Pacific was perceived to have lost its object, following a series of unilateral statements on the part of France that the tests were to cease.165 The majority observed: It does not enter into the adjudicatory functions of the Court to deal with issues in abstracto, once it has reached the conclusion that the merits of the case no longer fall to be determined. The object of the claim having disappeared, there is nothing on which to give judgment.166

159

See the submissions of Counsel for the United Kingdom, Sir John Hobson: CR 1963/1, p. 397. 160 See discussion of this point in the minority judgments: Northern Cameroons case, supra note 15, pp. 131-49 (Morelli); 150-3 (Badawi); 184-96 (Beb A Don). Cf. pp. 97-130 (Fitzmaurice). 161 Northern Cameroons case, supra note 15, p. 98 (Fitzmaurice). 162 Ibid. 163 J.G. Merrills, ‘Sir Gerald Fitzmaurice’s Contribution to the Jurisprudence of the International Court of Justice’ 48 British Yearbook of International Law (1976) pp. 183, 200. 164 Northern Cameroons case, supra note 15, p. 98 (Fitzmaurice). 165 Nuclear Tests (Australia v. France) case, supra note 13, pp. 253-272; Nuclear Tests (New Zealand v. France), 20 December 1974, ICJ, Judgment, I.C.J. Reports 1974, pp. 457-478. 166 Nuclear Tests (Australia v. France) case, supra note 13, pp. 271–2 (para. 59); Nuclear Tests (New Zealand v. France) case, supra note 165, p. 477 (para. 62).

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However, the majority’s conclusion was severely criticised in the Joint Dissenting Opinion,167 where it was noted that the French statement was “merely factual and not juridical”.168 In distinguishing Northern Cameroons, the opinion emphasised that “a declaratory judgment stating the general legal position” applicable between Australia and France “would have given the Parties certainty as to their legal relations.” 169 In particular the Opinion argued that the Northern Cameroons case recognised “a critically significant distinction” between a declaratory judgment “without effect” because the treaty was no longer in force and a declaratory judgment which “interprets a treaty that remains in force … or expounds a rule of customary law” which would have “continuing applicability”.170 In other words, as noted in Northern Cameroons and consistent with the jurisprudence of the Permanent Court, a judgment cannot be said to be “without effect” or an issue moot when it concerns an analysis of the continuing applicability of a treaty in force or of customary international law.171 Whatever one’s opinion as to the correctness or otherwise of the Court’s ultimate decision in the Nuclear Tests cases,172 it is the minority judgment which clearly expounds the accepted principles in respect of a declaratory judgment. The dispute before the Court must concern rights and duties of the parties which are ongoing and extant at the time of the decision. Whether or not it does so is a question of fact for each case, and as the Nuclear Tests cases demonstrate, the assessment of that question can be controversial. The ‘dispute’ requirement remains a threshold that must be surmounted by the parties, irrespective of the remedy sought.173 In this sense, the Court’s competence in respect of declaratory judgments must be understood in light of the broad mandate encompassed in Article 38 of its Statute.174 If a declaratory judgment is capable of effectively resolving a dispute concerning extant rights, it is a suitable remedy.

167 Nuclear Tests (Australia v. France) case, supra note 13, pp. 312 et seq. (Onyeama et.al.). 168 Orakhelashvili, supra note 20, p. 124, referring to Nuclear Tests (Australia v. France) case, supra note 13, pp. 312 et seq. (Onyeama et.al.). 169 Nuclear Tests (Australia v. France) case, supra note 13, p. 320 (para. 20) (Onyeama et.al.). 170 Ibid., p. 321 (para. 21) (Onyeama et.al.). 171 Ibid. 172 Compare Mann, supra note 3, p. 12 and T. M. Franck, ‘Editorial Comments – Word Made Law: The Decision of the ICJ in the Nuclear Tests Cases’ 69 American Journal of International Law (1975) pp. 612-13. 173 In respect of the declaratory judgment, it is the “closeness or remoteness” of the dispute to the question upon which a declaratory judgment is sought, that will be decisive in determining whether the case is truly contentious, or a request for an advisory opinion (such as cannot be sought by States): Mosler, supra note 27, p. 414. 174 Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 38.

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Categories of Declaratory Judgment

The defining characteristics of the declaratory judgment set out above – an act of adjudication within the Court’s jurisdiction, but a mere declaration, with the force of res judicata, which resolves a dispute – can be aptly demonstrated by considering the situations in which the Court has utilised the declaratory judgment remedy. There have been several attempts to categorise instances in which declaratory judgments have been awarded. Borchard, for example, suggests that that an action may be brought for a declaratory judgment on two types of operative facts: those which may also justify an “executory” order, and those which are not susceptible of other relief.175 In contrast, Gray argues that there cannot be a clear-cut distinction between a declaration that there has been a breach of international law and a declaration of right, i.e. the interpretation of a treaty or the settling of a question of territorial sovereignty, but acknowledges that “the form of the judgment is different.” 176 At the other extreme, Brownlie, despite his reluctance to segregate the declaratory judgment from other remedial forms,177 identifies six types of declaratory judgment: The declaratory judgment as a first stage in proceedings,178 the declaration of legal entitlement, the declaration that an act is contrary to international law,179 a declaration that specific acts of implementation are required,180 the declaration of applicable rules and principles of international law, and the declaration as a form of satisfaction.181 None of these attempts have been entirely satisfactory; perhaps because rigid categorisation is not possible given the “considerable flexibility” the Court has shown in dealing with remedies.182 Rather than forlornly attempting to comprehensively assign each of the Court’s judgments to a particular box, this article instead aims simply to distinguish between three broad roles which the declaratory judgment performs: Declarations of right or title; declarations of applicable law; and declarations of State responsibility.

175 176 177 178 179 180 181 182

Borchard, supra note 6, pp. 24-5. Gray, supra note 2, pp. 17-8, 97. Brownlie, supra note 2, p. 560. Ibid. Ibid., p. 561. Ibid., p. 562. Ibid., p. 563. J. Crawford, ‘Third Report on State Responsibility’, Yearbook of the International Law Commission, Volume II, Part I, Documents of the Fifty-Second Session (2000) (U.N. Doc. A/ CN.4/SER.A/2000/Add.1 (Part 1)), p. 6 (para. 7(3); e.g., Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea intervening), 10 October 2002, ICJ, Judgment, I.C.J. Reports 2002, p. 303.

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Declarations of Right or Title

The first category involves the resolution of disputes concerning title to territory, or the rights or status of the parties. In such cases, the dispute does not involve questions of legality or such issues are marginalised;183 an unlawful act need not have occurred, nor a destruction of the status quo.184 In this form of declaratory judgment, the Court “becomes an instrument not merely of curative but also of preventive justice.” 185 Declaratory judgments concerned with the legal rights or interests of parties but not with questions of responsibility are rare. One example is the Right of Passage case,186 in which the Court was asked to declare that Portugal had a right of passage over Indian territory between its enclaves of Dadra and Nagar-Aveli and the coastal district of Daman. This formulation of the claim revealed both a right claimed by Portugal and a correlative obligation binding upon India.187 However, the Court concluded that while Portugal had a right of passage over the intervening Indian territory to the extent necessary for the exercise of Portuguese sovereignty over the enclaves, India had not acted contrary to its obligations.188 As such, the judgment is merely declaratory of Portugal’s right and raises no further question of responsibility. Similarly, the Court declared the rights of both Costa Rica and Nicaragua in respect of navigation on the San Juan River in its 2009 judgment.189 On the other hand, declarations in respect of territorial title are one of the most common uses of the Court.190 The value of the declaratory judgment in resolving disputes as to territory is immediately apparent: No unlawful act need have occurred nor any harm been caused for parties to have recourse to the Court.191 In these cases the ‘mere’ declaration is sufficient to entirely resolve the dispute.192 There is some debate as to whether the delimitation and/or demarcation of a land or maritime boundary is a declaratory judgment or is more accurately characterised as an order for specific performance.193 I suggest that the cases may be 183 184 185 186 187 188 189

Brownlie, supra note 2, p. 561. Borchard, supra note 6, p. viii. Ibid. See also Bray, supra note 124, p. 1276. Right of Passage case, supra note 71. Ibid., p. 28. Ibid., pp. 45-6. Dispute regarding Navigational and Related Rights (Costa Rica v. Nicaragua), 13 July 2009, ICJ, Judgment, I.C.J. Reports 2009, pp. 213, 269-272 (para. 156). 190 Borchard, supra note 40, p. 489. 191 Milano, supra note 27, pp. 522-3. 192 Brown, supra note 3, p. 208. 193 Amerasinghe, supra note 17, p. 167, would suggest that all boundary cases result in orders for “virtual specific performance”.

Declaratory Judgments of the International Court of Justice

distinguished by considering whether or not the boundary is pre-existing. The order attributing title to a pre-determined area will be a declaratory judgment; otherwise it is an order for specific performance.194 For example, in its 2008 application, Peru requested the Court to determine the course of the boundary between the maritime zones of Peru and Chile.195 The boundary between these States has not previously been delimited, by agreement or otherwise.196 As such, the final order on the merits will necessarily require that both parties give effect to the new boundary, essentially an act of specific performance.197 On the other hand, where the boundary is settled but the dispute concerns sovereignty or title to territory, the order is more properly classified as declaratory.198 For example, in Indonesia/Malaysia,199 the ICJ simply concluded that “sovereignty over Pulau Ligitan and Pulau Sipadan belongs to Malaysia.” 200 Of course it is not always so straightforward, as often cases will raise questions both of attribution of sovereignty over predetermined territories and of the delimitation of boundary lines.201 One recent example of this arose in the Territorial and Maritime Dispute case between Nicaragua and Colombia. Nicaragua sought a declaration that Nicaragua had sovereignty over specified cays and islands and, in addition, the delimitation

194 See D. Reichert-Facilides, ‘Down the Danube: The Vienna Convention on the Law of Treaties and the Case Concerning the Gabčikovo-Nagymaros Project’ 47 International and Comparative Law Quarterly (1998) pp. 837, 850. Ultimately, as the Court highlighted in Burkina Faso/Mali, the distinction between attribution and delimitation “is not so much a difference in kind but rather a difference of degree.”: Burkina Faso/Mali, supra note 65, p. 563 (para. 17). 195 Maritime Dispute (Peru v. Chile), Application of Peru, 16 January 2008, p. 6 (para. 13). The Court concluded its oral proceedings on 14 December 2012. 196 Ibid., p. 2 (para. 2). 197 See also Gulf of Maine case, supra note 43, p. 246; Jan Mayen case, supra note 43, p. 38; Maritime Delimitation in the Black Sea case, supra note 43, p. 61 (which also involved questions of treaty interpretation); and in respect of part of the maritime boundary, Cameroon v. Nigeria (Merits), supra note 43, pp. 456-7 (para. 325.III(B)-(D)) (dispositif ). 198 E.g., The Minquiers and Ecrehos case (France/United Kingdom), 17 November 1953, ICJ, Judgment, I.C.J. Reports 1953, p.47; Case concerning Sovereignty over certain Frontier Land, 20 June 1959, ICJ, Judgment, I.C.J. Reports 1959, p. 209; Sovereignty over Pedra Branca/ Pulau Batu Puteh, Middle Rocks and South Ledge (Malaysia/Singapore), 23 May 2008, ICJ, Judgment, I.C.J. Reports 2008, p. 12. 199 Sovereignty over Pulau Ligitan and Pulau Sipadan (IndonesialMalaysia), 17 December 2002, ICJ, Judgment, I.C.J. Reports 2002, p. 625. 200 Ibid., p. 686 (para. 150) (dispositif ). 201 E.g., Maritime Delimitation and Territorial Questions between Qatar and Bahrain, 16 March 2001, ICJ, Merits, I.C.J. Reports 2001, p. 40; Kasikili/Sedudu Island (Botswana/Namibia), 13 December 1999, ICJ, Judgment, I.C.J. Reports 1999, p. 1045; Frontier Dispute (Benin/Niger), 12 July 2005, ICJ, Judgment, I.C.J. Reports 2005, p. 90.

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of a continental shelf boundary.202 Colombia in reply sought a declaration of its own sovereignty over the disputed maritime features.203 The Court declared that Colombia had sovereignty over the relevant islands,204 and chose to also delimit a “single maritime boundary delimiting the continental shelf and the exclusive economic zones”.205 Claims to territory become even more complex when the conclusions in respect of title, which might be declaratory in form, lead the Court to issue more precise orders as to the conduct of the parties. This is particularly the case where one State’s exercise of purported sovereignty prior to the Court’s decision results in adverse possession or occupation. Milano notes that this “does not per se entail the responsibility of the occupying State”,206 but it will undoubtedly require the “restitution” of the occupied territory.207 Milano suggests that “fault and negligence” will determine the ultimate “wrongfulness” of the adverse possession, and thus presumably whether or not a further order in terms of responsibility and reparation is required.208 By way of example, in the Cameroon v. Nigeria and Temple cases, the Court emphasised that withdrawal from the disputed territory was a necessary result of its conclusions in respect of territorial title.209 Moreover in the Temple case, having found that sovereignty over the disputed area belonged to Cambodia, the Court briefly considered whether Thailand was obliged to return various objects of cultural significance which had allegedly been removed from the Temple. The Court found that it could only give “a finding of principle in favour of Cambodia, without relating it to any particular objects”.210 As a result, Gray characterises the judgment as declaratory,211 insofar as it states “in principle that there should be reparation”.212 This characterisation is disputed by Thirlway,213

202 Territorial and Maritime Dispute (Nicaragua v. Colombia), 19 November 2012, ICJ, Judgment, para. 17. 203 Ibid. 204 Ibid., para. 251(1) (dispositif ). 205 Ibid., para. 251(4) (dispositif ). 206 Milano, supra note 27, p. 531. 207 Ibid., p. 523. 208 Ibid., p. 540. 209 Cameroon v. Nigeria (Merits), supra note 43, p. 451 (paras. 312-317); Temple case, supra note 138, p. 37. 210 Temple case, supra note 138, p. 36. 211 C. Gray, ‘Is There an International Law of Remedies?’ 56 British Yearbook of International Law (1985) pp. 25, 37 (n52). 212 Gray, supra note 2, p. 107. 213 H. Thirlway, ‘The Law and Procedure of the International Court of Justice 1960– 1989: Part Seven’ 66 British Yearbook of International Law (1995) pp. 1, 96 (n. 355).

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Higgins,214 and Milano,215 who consider the judgment to be ordering restitution; also the characterisation the Court gave to the issue.216 But neither characterisation gives a complete picture. While dispositif of the Temple judgment is certainly declaratory in its first clause, the judgment demonstrates clearly the Court’s flexibility in devising remedies which may perform more than one function: It is in part declaratory and in part restitution; there is no need for it to be considered one or the other exclusively.217

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Declarations of Applicable Law

Secondly, there are cases where the Court is called upon to adjudicate a dispute concerning the content of the law which governs the parties’ relations, not the impact of applicable law. This may be as simple as a dispute regarding the interpretation of a clause in a bilateral treaty or as complex as the entire legal regime governing methods of maritime boundary delimitation.218 The declaratory judgment can be an important means of “resolving questions about the existence or content of customary international law”.219 Alternatively, a State which considers itself to be a persistent objector could seek from the Court a declaration that it is not bound by a particular norm of international law. This has never occurred, but it is theoretically consistent with conceptual parameters of the declaratory judgment. Also falling within this category are those judgments in which the Court determines the validity of a separate arbitral award or contract which governs the obligations of the parties. This has only occurred four times, and in each case the Court determined that the award/contract was valid and binding.220 The content

214 215 216 217

Higgins, supra note 26, p. 284. Milano, supra note 27, p. 514. Temple case, supra note 138, p. 36. See also Cameroon v. Nigeria case, supra note 43, p. 452 (para. 319), pp. 534-6 (Mbaye)). Cf. Milano, supra note 27, pp. 538-9 who classifies the judgment as declaratory despite its also containing an executory order. 218 North Sea Continental Shelf (Germany/Denmark; Germany/Netherlands), 20 February 1969, ICJ, Judgments, I.C.J. Reports 1969, p. 3; Continental Shelf (Libyan Arab Jamahiriya/ Malta), 3 June 1985, ICJ, Judgment, I.C.J. Reports 1985, p. 13; Continental Shelf (Tunisia/ Libya), 24 February 1982, ICJ, Judgment, I.C.J. Reports 1982, p. 18. 219 Shelton, supra note 128, p. 255. 220 Arbitral Award of 31 July 1989 (Guinea-Bissau v. Senegal), 12 November 1991, ICJ, Judgment, I.C.J. Reports 1991, pp. 53, 76 (para. 69) (dispositif ); Case concerning the Arbitral Award made by the King of Spain on 23 December 1906 (Honduras v. Nicaragua), 18 November 1960, ICJ, Judgment, I.C.J. Reports 1960, pp. 192217 (dispositif ); Lighthouses in Crete and Samos, 8 October 1937, PCIJ, Judgment, P.C.I.J. Series A/B, No. 71, pp. 94, 105-6 (dispositif ); Société Commerciale de Belgique case, supra note 91, p. 178 (dispositif ).

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of the law in this sense is contained in the relevant award; the declaration of the Court merely confirms its applicability. In cases concerned only with the declaration of applicable law, no steps have necessarily been taken by either party which contravene their international obligations221 or, where steps have been taken, the question of responsibility is not raised by the parties and the Court is prohibited by the non ultra petita rule from determining responsibility. The declaration is sought simply to clarify legal relations and provide a foundation for future negotiations or diplomatic relations.222 In this scenario, the Court is able to grant a declaratory judgment but no other remedy. This category of declaratory judgment performs an important function, allowing the parties to “learn authoritatively how they are to govern themselves in the future”.223 Brownlie describes this type of judgment as a “legitimate and constructive exercise of the judicial function”.224 In the first cases to seek a declaration of this type, Germany, Denmark, and the Netherlands submitted special agreements asking the Court to decide on “what principles and rules of international law are applicable to the delimitation … of the areas of the continental shelf in the North Sea which appertain to each of them”.225 The parties undertook to subsequently agree a delimited boundary in accordance with the principles and rules espoused by the Court.226 The Court had noted that its role was “to indicate to the Parties the principles and rules of law in the light of which the methods for eventually effecting the delimitation will have to be chosen.” 227 While Gross suggests that by not delineating the relevant boundaries, the Court is not being asked to resolve a dispute,228 the better view is that the relevant dispute relates not to the actual location of the boundary, but to the legal principles by which the delimitation should be effected. Mosler 221 Borchard, supra note 8, p. 128. 222 A. D’Amato, ‘The United States Should Accept, by a New Declaration, the General Compulsory Jurisdiction of the World Court’ 80:2 American Journal of International Law (1986) pp. 331, 335. 223 Borchard, supra note 34, p. 121. 224 Brownlie, supra note 2, p. 564. 225 North Sea Continental Shelf cases, Pleadings, Oral Arguments, Documents 1968, Vol. 1, pp. 5-6, Special Agreement, 20-February 1967, Art. 1(1). 226 Ibid., Art.1(2). 227 North Sea Continental Shelf cases, supra note 218, p. 46 (para. 84). See also Land, Island and Maritime Frontier Dispute (El Salvador/Honduras: Nicaragua intervening), supra note 65, p. 351, in which the Court found that while it had jurisdiction to determine “the legal situation” pertaining to the frontier, it was excluded, by the terms of the jurisdictional instrument, from proceeding to delimitation (pp. 616-7 (para. 432) (dispositif )). 228 L. Gross, ‘The International Court of Justice: Consideration of Requirements for Enhancing its Role in the International Legal Order’ 65 American Journal of International Law (1971) pp. 253, 279.

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notes that the Court’s judgment is “detailed enough and sufficiently linked with the entire dispute … for the binding effect of the Judgment to have settled the dispute definitively with the exception of some flexibility regarding the delimitation lines.” 229 In essence, it is a subtle but important distinction in the terms of the relevant special agreement that will prevent a case of this type from straying too far into the territory of hypothetical. If the agreement only asks “what are the principles of law applicable to maritime boundary delimitation?” it can rightly be considered abstract. But by strictly relating the applicable principles of law to the situation pertaining between the parties, while leaving unsettled the precise act of delimitation, the special agreement can satisfy the requirement that the declaratory judgment resolve a concrete dispute.230 This model of special agreement was also utilised in Tunisia/Libya, and Libya/ Malta, albeit in the latter the Court was also asked “to indicate how the applicable principles and rules can, in practice, be applied by the Parties”.231 Libya requested that the Court only pronounce on the applicable law while Malta requested a full delimitation, but the Court was able to sidestep both submissions by deciding that the method found applicable would dictate the requirement, or otherwise, of drawing a line.232 In the North Sea Continental Shelf cases and Tunisia/Libya, the Court emphasised that the relevant special agreements “make it clear that the Parties recognize the obligation to comply with the Judgment of the Court”.233 Despite this, Schwebel suggests that States seeking a declaration as to the applicable law may be “left with the freedom to apply or not to apply” the rules and principles set

229 Mosler, supra note 27, p. 417. 230 Ibid., p. 421. 231 Libya/Malta case, supra note 218, pp. 22-3 (para. 18). In the Tunisia/Libya case, supra note 218, the Court was requested to ‘clarify the practical method for the application of these principles and rules’, but the act of delimitation was still reserved to the parties: supra note 218, p. 38 (para. 25). 232 Libya/Malta, supra note 218, p. 23 (para. 19). Concluding that the applicable law required implementation of the equidistance principle, the Court established an “adjusted” median line based on this principle: pp. 56-8 (para. 79) (dispositif ). Cf. Jan-Mayen case, supra note 43, pp. 77-8 (paras. 88-9). 233 Tunisia/Libya case, supra note 218, p. 40 (para. 30); North Sea Continental Shelf cases, supra note 218, p. 13 (para. 2). This was re-emphasised by the Court in the Application for Revision and Interpretation of the Judgment of 24 February 1982 in the Case Concerning the Continental Shelf (Tunisia v. Libya),10 December 1985, ICJ, Judgment, I.C.J. Reports 1985, pp. 192, 229 (para. 68): “Thus the Court is bound to note that the obligation still rests upon both Parties to carry out the Special Agreement to the very end, and to have the 1982 Judgment implemented so that the dispute is finally disposed of.”

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out by the Court, and as such these cases are no more than advisory opinions.234 Donner also warns that the request cannot be “an advisory opinion disguised in a special agreement.” 235 These particular concerns are premised on a misunderstanding of the declaratory judgment. In each of the North Sea Continental Shelf cases, Tunisia/Libya, and Libya/Malta, there was a clear dispute as to the scope and content of the applicable law. Furthermore, whether or not the parties have undertaken to apply the principles and rules of international law in the terms of the special agreement (in which case they would be bound by the terms of that treaty in any event), the declaratory judgment has binding force.236 The Court’s role cannot be reduced to one of mere “guidance”; this was emphasised in Tunisia/Libya.237 The applicable law having been determined, parties are not in a position to apply different legal principles or rules to the act of delimitation from those set down by the Court. Finally, it is possible for the Court to issue a declaratory judgment interpreting a particular provision in a bilateral or multilateral treaty. The most common compromissory clauses apply to ‘disputes’ concerning the ‘application or interpretation’ of the bilateral or multilateral agreement in which they are found.238 Without such a dispute as to ‘interpretation’, it is not possible for the Court to award a declaratory remedy. Rosenne has argued that Article 63 of the Statute, which permits States to intervene in proceedings concerned with the interpretation of a treaty to which it is a party, evidences the proposition that each party to a treaty should be able to initiate proceedings to obtain a declaratory judgment on the correct interpretation of that treaty.239 From a remedies perspective there is nothing to suggest that States cannot seek an interpretation of a treaty even where there is no breach of that treaty, but the question of whether such a case is admissible or whether the Court has jurisdiction will depend on the terms of the particular treaty.240 For present purposes it is sufficient to note that a declaratory judgment is an appropriate and available remedy for States seeking the interpre234 S. M. Schwebel, ‘Was the Capacity to Request an Advisory Opinion Wider in the Permanent Court of International Justice than it is in the International Court of Justice?’ 62 British Yearbook of International Law (1991) pp. 77, 117. 235 Donner, supra note 16, p. 102. 236 Chorzów Factory (Interpretation) case, supra note 65, p. 20; Statute of the International Court of Justice, opened for signature 26 June 1945, 33 U.N.T.S. 993 (entered into force 24 October 1945), Art. 59. 237 Tunisia/Libya case, supra note 218, p. 40 (para. 29). 238 J. I. Charney, ‘Compromissory Clauses and the Jurisdiction of the International Court of Justice’ 81 American Journal of International Law (1987) pp. 855–6. 239 S. Rosenne, The Law and Practice of The International Court of Justice (A. W. Sijthoff, London, 1965), pp. 518-9. See also D.N. Hutchinson, ‘Solidarity and Breaches of Multilateral Treaties’ 59 British Yearbook of International Law (1988) pp. 151, 178. 240 E.g., Interpretation of the Statute of the Memel Territory case, supra note 113, p. 243.

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tation of a multilateral treaty, provided that the requested interpretation is not too far divorced from the factual situation pertaining to the relevant State, such as to render the request abstract.241

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Declarations of Responsibility

Finally, a declaratory judgment may be issued in cases concerned with the responsibility of States.242 An order for reparation may follow the decision that there has been a breach of an obligation,243 or the applicant party may request, or receive, only a declaration of the breach.244 There are also occasional, but notable, incidents of the Court making a declaration that a State has breached its obligations and having decided reparation is due for damage sustained by the applicant State, reserving the decision on reparation for settlement between the parties or failing which, by subsequent recourse to the Court.245 For example, in the Di241 Mosler, supra note 27, p.414. Cf. Avena case, supra note 71, p. 70 (para. 151). 242 Article 1 of the 2001 in the Draft Articles on Responsibility of States (‘ASR’) establishes the “basic principle underlying the articles as a whole”, that “[e]very internationally wrongful act of a State entails the international responsibility of that State.” Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, Yearbook of the International Law Commission, Volume II, Part I, Documents of the FiftyThird Session (2001) (U.N. Doc. A/56/10) (‘ASR Commentary’), p. 32 (para. (1)). See also Spanish Zone of Morocco Claims (1923) 2 R.I.A.A. 641. 243 This situation arose in Chorzów Factory. The Court having determined that the Polish Law was in breach of the Geneva Convention, (Certain German Interests case, supra note 23, p. 5) subsequent proceedings were addressed to determining the required reparation: Chorzów Factory (Merits) case, supra note 65, p. 4. 244 See Gray, supra note 2, pp. 97-8. In an example of this, although unsuccessful, Liberia and Ethiopia in South West Africa sought only a declaration that certain legislation was contrary to the obligations of South Africa under the Mandate: South West Africa (Second Phase) case, supra note 65, pp. 15-6. In Legal Status of Eastern Greenland, the Permanent Court issued a declaratory judgment in which it decided that Norway’s declaration of occupation constituted a violation of the existing legal situation, and was accordingly unlawful and invalid (Legal Status of Eastern Greenland, 5 April 1933, PCIJ, Judgment, P.C.I.J. Series A/B, No. 53, pp. 22, 75 (dispositif )). While Denmark reserved its right to ask for a decision on the nature of the reparation due for Norway’s unlawful acts (p. 23) Norway withdrew its claim to the territory and the case was terminated without reparation being decided: Legal Status of the South-Eastern Territory of Greenland, 11 May 1933, PCIJ, Order, Series A/B, No. 55, p. 157. 245 Armed Activities on the Territory of the Congo (Democratic Republic of Congo v. Uganda), 19 December 2005, ICJ, Judgment, I.C.J. Reports 2005, p. 168, is one example. See pp. 280-282, particularly paras. 5-6 and 13-14. The Military and Paramilitary Activities in and against Nicaragua case (supra note 65) is another, see pp. 146-50 (dispositif ). Other claims which have been unsuccessful in proceeding to the merits were formulated in this manner: e.g. Nauru case, supra note 16, p. 240.

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allo case, the Court declared in a first set of proceedings that the Democratic Republic of Congo had violated certain provisions of the International Covenant on Civil and Political Rights, the African Charter on Human and People’s Rights, and the Vienna Convention on Consular Relations,246 and ordered that failing agreement between the parties, the question of compensation due to Guinea would be settled by the Court in subsequent proceedings.247 There is no good reason to suggest that this type of decision is conceptually different from that in Chorzów Factory; this formulation merely expressly prioritises settlement between the parties—an option which is always available to the parties in any event. It is to be distinguished from an abstract decision that reparation is due ‘in principle’ because the Court retains a supervisory role in which evidence and calculation of actual loss will be presented in subsequent proceedings, failing settlement.248 None of these scenarios raise any conceptual difficulties. However, in the use of declaratory judgments in State responsibility cases, two striking differences between the practice of the Permanent Court and the International Court of Justice emerge which require closer consideration. First, the International Court has developed a practice of awarding what might be termed ‘injunctive’ declaratory judgments, explicitly ordering the offending party to cease the unlawful activity. For example, in Nicaragua (Merits) the Court’s judgment contained an injunctive declaration “that the United States is under a duty immediately to cease and refrain from all such acts as may constitute breaches of the foregoing legal obligations”.249 Likewise in Questions Relating to the Obligation to Prosecute or Extradite, the Court ordered that Senegal was “required to cease [its] continuing wrongful act, in accordance with general international law on the responsibility of States for internationally wrongful acts”.250 The Permanent Court, on the other hand, did not award declaratory judgments stating that a party was under an obligation to act in a certain way.251 Gray expresses misgivings that this manner of “injunctive” declaration is beyond the competence of the

246 Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), 30 November 2010, ICJ, Judgment, I.C.J. Reports 2010, p. 639 (para. 165) (dispositif ). 247 Ibid. See also Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), 19 June 2012, ICJ, Compensation owed by the Democratic Republic of the Congo to the Republic of Guinea. 248 Contra Gray, supra note 2, pp. 106-7; Temple case, supra note 138, p. 36. 249 Military and Paramilitary Activities in and against Nicaragua case, supra note 65, p. 149 (para. 292(12) (dispositif ). See also Nuclear Tests (Australia v. France) case, supra note 13, pp. 312-9 (paras. 2-18) (Onyeama et.al.); Arrest Warrant case, supra note 16, p. 33 (para. 78(3)) (dispositif ). 250 Questions Relating to the Obligation to Prosecute or Extradite case, supra note 141, paras. 121 and 122(6) (dispositif ). 251 Gray, supra note 2, p. 67.

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Court,252 while Brownlie is unconcerned, noting merely that there is no “significant difference” between this mode of declaration and the mere declaration that certain conduct is contrary to international law.253 The latter view is preferable. The injunctive form of declaration does no more than make explicit the offending State’s already subsisting obligation to cease unlawful conduct.254 For example, in the Arrest Warrant case, the Court ordered that Belgium “must, by means of its own choosing, cancel the arrest warrant of 11 April 2000.” 255 This is no more than was implicitly required by the Court’s conclusion that the arrest warrant was issued unlawfully,256 and as a form of declaratory judgment, it satisfies all of the relevant criteria discussed above, including having a ‘forward reach’ insofar as it continues to govern the legal relationship of the parties by requiring Belgium to respect the immunity from prosecution of Congolese government ministers in the future. The second distinction which emerges is much more significant. It is in the use of the declaratory judgment as a mode of reparation in and of itself. The jurisprudence of the Permanent Court demonstrates that it was consistent in drawing a distinction between the declaratory judgment and modes of reparation, both conceptually, and as a matter of practice. In Chorzów Factory (Jurisdiction), the Permanent Court highlighted that its jurisdiction to find a breach of an international obligation necessarily included the jurisdiction to order reparation, because “[i]t is a principle of international law that the breach of an engagement involves an obligation to make reparation in an adequate form”,257 but importantly, the Permanent Court distinguished between the mere declaration of breach, and the award of reparation resulting from that breach.258 Reparation could be awarded in separate proceedings,259 during the same proceedings,260 or not at all,261 but there was no suggestion by the Permanent Court that the declaratory judgment of itself constituted reparation. Indeed, the very reason that questions of liability and reparation can be divided into separate proceedings is because of this important distinction between the declaratory judgment and reparation.

252 Ibid., pp. 64-8. 253 Brownlie, supra note 2, pp. 561-3. 254 ASR Commentary, supra note 242, p. 88 (Art. 30) See discussion in Crawford, supra note 3, pp. 196-8. 255 Arrest Warrant case, supra note 16, p. 33 (para. 78(D)(3)) (dispositif ). 256 Ibid., p. 33 (para. 78(D)(2)) (dispositif ). 257 Chorzów Factory (Jurisdiction) case, supra note 17, p. 21. 258 Ibid., p. 25. 259 Chorzów Factory (Merits) case, supra note 65, pp. 63-5 (dispositif ). 260 S.S. “Wimbledon” case, supra note 41, p. 33. 261 Legal Status of Eastern Greenland case, supra note 244, p. 75 (dispositif ).

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In contrast, while the Court has continued to issue judgments declaring that a State is responsible for unlawful acts without deciding the question of reparation, it has also established a parallel practice of awarding declaratory judgments as reparation for harm caused by unlawful acts. This presents a serious challenge to the conceptual parameters of the declaratory judgment as recognised in this paper, and requires a reassessment of the Court’s jurisprudence in order to resolve the resulting analytical tension.

͘

The Declaratory Judgment as Reparation

The starting point of this argument requires a clear definition of the concept of ‘reparation’. Two principles govern reparation in international law: An international wrong generates a new obligation for the offending State to make full reparation,262 and the reparation must insofar as possible wipe out the consequences of the illegal act.263 These principles are not contentious.264 Indeed, Fitzmaurice suggests that the notion of responsibility would be “devoid of content” if it did not involve an obligation make reparation.265 Jiminez de Aréchaga describes reparation as the “generic term which describes the various methods available to a State for discharging, or releasing itself from … responsibility”.266 Thus, reparation is “not coterminous with ‘damages’ or ‘compensation’”; rather it is an “umbrella concept”, which can be embodied in various forms.267 Satisfaction is one mode of reparation, a remedy falling beneath this broad umbrella. However, the “exact juridical status” of satisfaction remains unclear, and on a proper analysis it

262 Chorzów Factory (Jurisdiction) case, supra note 17, pp. 21-2; ASR Commentary, supra note 242, p. 91 (Art. 31); Crawford, supra note 3, p. 201. 263 Chorzów Factory (Jurisdiction) case, supra note 17, pp. 21-2; Chorzów Factory (Merits) case, supra note 65, p. 47. See also ASR Commentary, supra note 242, p. 91 (para. (3)); Crawford, supra note 3, p. 201; Shelton, supra note 128, p. 20 and Shelton, supra note 17, p. 844. 264 According to Vattel, every State has the right to obtain complete reparation when an injury is done: E. de Vattel, The Law of Nations or Principles of the Law of Nature (4th edn., Clark and Sons, London, 1811), p. 155 (para. 51) and Grotius observed that “From … a Fault or Trespass, there arises an obligation by the Law of Nature to make Reparation for the Damage, if any be done”: Grotius, Bk 2, Ch 17 (para. 1) in Hugo Grotius, The Rights of War and Peace: Including the Law of Nature and of Nations, translated by A.C. Campbell (Nabu Press, Breinigsville, 2011). 265 Sir Gerald Fitzmaurice, The Law and Procedure of the International Court of Justice Vol. I (Grotius, CUP, Cambridge, 1987), p. 6. 266 J. de Aréchaga, ‘Report of the International Law Commission on the work of its fortyfifth session’, 3 May - 23 July 1993, Official Records of the General Assembly, Forty-eighth session, Supplement No. 10 (U.N. Doc A/48/10), p. 59. 267 Brown, supra note 3, p. 186.

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is not apparent that declaratory judgments, although often awarded as satisfaction, should be considered a mode of reparation.268 The Court’s practice of awarding a declaratory judgment as satisfaction began with Corfu Channel. The UK and Albania submitted to the Court a special agreement asking it to resolve two questions. The first concerned the responsibility of Albania for damage sustained by British warships in Albanian waters, and whether there was any resulting obligation to pay compensation; 269 the second asked whether the UK had violated Albania’s sovereignty and owed a duty to give satisfaction.270 The Albanian government requested that the Court should find that the UK “committed a breach of the rules of international law and that the Albanian Government has a right to demand that it should give satisfaction therefor.” 271 The Court reached the conclusion that there was a duty upon Albania to pay compensation to the UK,272 although it reserved the assessment of damages for a later proceeding.273 Regarding the second question, the Court unanimously concluded that it “must declare that the action of the British Navy constituted a violation of Albanian sovereignty” 274 and immediately proceeded to note: “[t]his declaration is in accordance with the request made by Albania through her Counsel, and is in itself appropriate satisfaction.” 275 The Court repeated this formulation in the dispositif.276 Brownlie suggests that Corfu Channel “appears to qualify as a declaratory judgment and the Court, as is its custom, was responding to the request of the party concerned in the matter of remedies.” 277 However, by stating that the declaration constitutes appropriate satisfaction, the Court appears to have adopted an expanded conception of the declaratory judgment, one that would develop it in a manner not immediately consistent with the categories and characteristics advanced above. Importantly, it must be noted that while Corfu Channel has proven highly influential, it was unusual on its facts. Albania had requested that that the Court order

268 C. F. Amerasinghe, Jurisdiction of International Tribunals (Martinus Nijhoff, The Hague, 2003), p. 417. 269 Corfu Channel (United Kingdom v. Albania), 9 April 1949, ICJ, Merits, I.C.J. Reports 1949, pp. 4, 10-11. 270 Ibid., p. 6. 271 Ibid., p. 12. 272 Ibid., p. 23. 273 Ibid., p. 25; See also L. Green, ‘Case Comment – The Corfu Channel Case (Merits)’ 12:4 Modern Law Review (1949) pp. 505 et seq. 274 Corfu Channel (Merits) case, supra note 269, p. 35. 275 Ibid. (Emphasis added). 276 Ibid., p. 36. 277 Brownlie, supra note 2, p. 563.

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that it had a right to demand satisfaction from the United Kingdom.278 It requested an apology as the mode of satisfaction, but abandoned this request during the oral proceedings and accepted that a declaration would be sufficient.279 Thus the Court in Corfu Channel was arguably simply giving effect to the non ultra petita principle. Given Albania’s abandonment of its request for an apology, a declaration was the only effective means of answering the second question in the special agreement. Judge Azevedo observed that because under the Special Agreement a pecuniary sanction had not been requested it could therefore not be granted, even symbolically. He advocated that the Court should “break away from the familiar mediaeval procedure … such as apologies, flag saluting, etc” and reasoned that as a result: There remains only one moral sanction that can be applied without disregarding the absence of a claim for the assessment of damages. The matter cannot be left to the future; for the sanction must re ipsa be found in the Judgment. This will be purely declaratory, and will state that the United Kingdom’s conduct was contrary to international law and in every way abnormal.280

However, the Court does not explain why it considered it necessary to propose that the declaratory judgment in this case constituted satisfaction, or what it meant by the use of that term. Arguably the Court felt bound to address reparation due to the formulation of the special agreement, but there is nothing which suggested that the Court was prevented from simply awarding an ‘ordinary’ (contrasted with ‘reparatory’) declaratory judgment. Despite the apparently expansive scope of the language used, when considered in the specific context of the dispute, the decision of the Court does not necessarily support the broader proposition that a declaratory judgment can be reparation. Nonetheless, the ‘Corfu Channel formulation’ has subsequently been remarkably popular, and in constant use by the Court, including in its most recent jurisprudence.281 A notable example was the Bosnian Genocide case, where Serbia argued that the terms of the Genocide Convention282 limited the Court to the granting of a declaratory judgment regarding breaches of the duties to prevent and pun-

278 279 280 281

Corfu Channel (Merits) case, supra note 269, p. 12. Ibid., pp. 25-6. Ibid., p. 114 (paras. 44-5) (Azevedo). E.g., Mutual Assistance in Criminal Matters case, supra note 16, pp. 245 (para. 204), 247 (para. 205(2)(a) (dispositif ); Case Concerning Pulp Mills on the River Uruguay (Argentina v. Uruguay), 20 April 2010, ICJ, Judgment, p. 79 (para. 282(1) (dispositif ); FYROM v. Greece case, supra note 71, p. 47 (para. 169). 282 Convention on the Prevention and Punishment of the Crime of Genocide 78 U.N.T.S. 277, signed 9 December 1948, entered into force 12 January 1951, Art. IX.

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ish the commission of genocide by individuals.283 Serbia’s counsel submitted that there was “no evidence that, as a matter of treaty law, the usual array of remedies was expected to be applicable”.284 Bosnia and Herzegovina argued precisely the opposite: That the Convention was drafted so as to ensure State responsibility for acts of genocide, and not merely to provide a declaratory judgment in cases of a failure to prevent or punish.285 In the course of the oral proceedings, Bosnia and Herzegovina’s counsel acknowledged that a declaratory judgment might be the appropriate form of reparation “for certain Convention violations”,286 but that since significant damage was financially assessable, “reparation in the form of compensation” was required.287 The Court found that while the obligation to prevent genocide was one of conduct and not of result,288 Serbia had failed to meet this obligation in respect of Srebrenica in 1995.289 Considering the issue of reparation, the Court concluded that since it could not “regard as proven a causal nexus” between the Serbia’s breach of its obligation to prevent genocide and the damage resulting from the genocide at Srebrenica, compensation was “not the appropriate form of reparation”,290 but it was “clear” that Bosnia and Herzegovina was entitled to “reparation in the form of satisfaction”, and that this would take the form of a declaration, as in the Corfu Channel case.291 There is something decidedly unsettling in the Court’s decision to treat the death of some 7000 Bosniaks as ‘satisfied’, and Serbia’s responsibility ‘discharged’, by a “toothless declaration”.292 However, as I argue below, there exists a better way of conceptualising the declaratory judgment as satisfaction, consistent with both

283 284 285 286 287 288 289 290 291

CR 2006/17, 13 March 2006, p. 13 (para. 14) (Brownlie). Ibid., p. 44 (para. 304) (Brownlie). Bosnian Genocide case, supra note 65, p. 105 (para. 150). CR 2006/31, 18 April 2006, p. 9 (para. 23) (Pellet). Ibid. Ibid., p. 221 (para. 430). Ibid., p. 238 (para. 471(5)) (dispositif ). Ibid., p. 234 (para. 462). Ibid., pp. 234 (para.463), 239 (para. 471(9)) (dispositif ). See further S. Sivakumaran, ‘Case Concerning the Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia And Herzegovina v. Serbia and Montenegro), Judgment of 26 February 2007’, in J. C. Barker (ed.) ‘Decisions of International Tribunals’ 56 International and Comparative Law Quarterly (2007) pp. 695, 706; C. Tomuschat, ‘Reparation in Cases of Genocide’ 5 Journal of International Criminal Justice (2007) pp. 905, 910-1. 292 Tomuschat, supra note 291, p. 910. See further M. Milanović, ‘State Responsibility for Genocide: A Follow-Up’ 18:4 European Journal of International Law (2007), p. 669; and A. Gattini, ‘Breach of the Obligation to Prevent and Reparation Thereof in the ICJ’s Genocide Judgment’ 18:4 European Journal of International Law (2007), p. 695.

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theory and practice; not as a mode of reparation, but as a penalty. This conception may go some way towards vindicating the Bosnian Genocide decision.

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Defining Satisfaction

Unfortunately, the nature and purpose of ‘satisfaction’ “has not been conceived in an unequivocal way over the centuries.” 293 Amerasinghe suggests that the function of satisfaction is repairing moral injury but notes that “it is not easy to determine when exactly such injury exists.” 294 Jørgensen understands satisfaction to be applicable where a State has “suffered a moral injury (sometimes called a political injury) which consists in the infringement of the State’s rights per se, and in the injury to its honour, dignity and prestige.” 295 The ASR Commentary defines satisfaction as “the remedy for those injuries, not financially assessable, which amount to an affront to the State.” 296 It considers satisfaction an “exceptional” form of reparation, available only for those injuries that “cannot be made good by restitution or compensation.” 297 Only if those two forms have not provided full reparation may satisfaction be required.298 Traditional acts equating to satisfaction include apologies299 and salutes to the flag, although Graefrath considers these forms of satisfaction “anachronistic”,300 and Judge Azevedo described them in Corfu Channel as “mediaeval”.301 Alternatively, satisfaction may include another modality that is neither disproportionate nor humiliating to the responsible State.302 The question becomes whether the declaratory judgment is capable of representing such a modality.

293 E. Wyler and A. Papaux, ‘The Different Forms of Reparation: Satisfaction’ in J Crawford et al. (eds.), The Law of International Responsibility (OUP, Oxford, 2010) pp. 623, 625. 294 Amerasinghe, supra note 268, p. 417. 295 N. H. B. Jørgensen, ‘A Reappraisal of Punitive Damages in International Law’ 68 British Yearbook of International Law (1997), pp. 247, 264. 296 ASR Commentary, supra note 242, p. 106 (para. (3); Crawford, supra note 3, p. 231. 297 ASR Commentary, supra note 242, p. 105 (Art. 37(1)). Cf. C. Hoss, ‘Satisfaction’, Max Planck Encyclopaedia of International Law, paras. 5-6. 298 ASR Commentary, supra note 242, p. 105 (para. (1)); Crawford, supra note 3, p. 231. 299 E.g., S.S. ‘I’m Alone’ (1935) 3 R.I.A.A. 1616, p. 1618. 300 B. Graefrath, ‘Responsibility and Damages Caused: Relationship Between Responsibility and Damages’ 185 Recueil des Cours (1984-II) pp. 19, 85. 301 Corfu Channel (Merits) case, supra note 269, p. 114 (paras. 44-5) (Azevedo). 302 ASR Commentary, supra note 242, p. 105 (Art.37).

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͘.͖

The Declaratory Judgment as Satisfaction

In addressing this question, a useful analysis is provided by the drafting history of the ASR. This analysis strongly supports the argument that despite the terminology of the Court, the Corfu Channel formulation is not an instance of satisfaction “in the usual meaning of the word”, since the declaration is that of a court and not of a party.303 This argument is consistent with the ILC’s decision to exclude the declaratory judgment from its conception of the forms and methods of satisfaction. While the declaratory judgment was once listed as a mode of satisfaction,304 it was removed during the ILC’s 52nd session because of the conceptual difficulties caused by its inclusion.305 This was principally because the ASR framework of State responsibility is concerned with inter-State legal relationships and not relationships between States and third-party dispute resolver.306 The Special Rapporteur observed, correctly, that a State cannot “grant or offer a declaration in respect of itself; this can only be done by a competent third party.” 307 As such, the declaratory judgment does not fit within the understanding of reparation as an obligation owed by the offending State.308 The Commentary to Article 37 highlights the difficulty inherent in attempting to fuse the declaratory judgment with satisfaction and reparation: [Judicial] declarations are not intrinsically associated with the remedy of satisfaction. Any court or tribunal which has jurisdiction over a dispute has the authority to determine the lawfulness of the conduct in question and to make a declaration of its findings … Such a declaration may be a preliminary to decision on any form of reparation, or it may be the only remedy sought.309

303 S. Haasdijk, ‘The Lack of Uniformity in the Terminology of the International Law of Remedies’ 5:2 Leiden Journal of International Law (1992) pp. 245, 256; Ian Brownlie, System of the Law of Nations State Responsibility Volume I (Clarendon Press, Oxford, 1983), p. 209. 304 G. Arangio-Ruiz, ‘Second Report on State Responsibility’, Yearbook of the International Law Commission, Volume II, Part I, Documents of the Forty-First Session (1989) (U.N. Doc. A/ CN.4/SER.A/1989/Add. 1 (Part 1)), p. 56 (Art. 10); Crawford, supra note 3, p. 327. 305 Crawford, supra note 182, pp. 54-5 (para. 183). 306 Ibid., p. 13 (para. 7(b) and (c)). 307 Ibid., p. 55 (para. 185). 308 There was suggestion that satisfaction should include “acknowledgement” by the offending State, and where a State declined to acknowledge that it had committed a breach, the corresponding remedy obtained in any subsequent judicial proceedings would be a declaration. Conceptually this is a sound proposition, and it was adopted in the final Article 37: ASR Commentary, supra note 242, p. 105 (Art. 37); International Law Commission, ‘Report on the work of its fifty-second session (1 May-9 June and 10 July-18 August 2000)’ General Assembly Official Records, Fifty-fifth Session, Supplement No. 10 (A/55/10), p. 35 (para. 155); Crawford, supra note 3, p. 233. 309 ASR Commentary, supra note 242, p. 107 (para. (6)).

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There are three broad arguments in favour of accepting the Court’s apparent use of the declaratory judgment as reparation. However, each of these suffers from a fatal weakness, as set out below. The better analysis is that the declaratory judgment should not be conceptualised as a mode of reparation.

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Practice of the Court

The first of these arguments is that the Court has established a practice of awarding declaratory judgments as reparation in the form of satisfaction.310 For example, the ILC observes that declaratory relief is “[o]ne of the most common modalities of satisfaction provided in the case of moral or non-material injury to the state.” 311 This argument initially appears very attractive, despite its circularity. However, it fails to address clear inconsistencies between this practice and the conceptual parameters of the declaratory judgment. The declaratory judgment, when used as reparation, lacks two of the distinctive characteristics of the declaratory judgment: forward reach, and the force of res judicata.312 Firstly, it is difficult to reconcile the declaratory judgment as satisfaction with the requirement that it have a future impact; reparation is necessarily concerned with redress for past harm. In Northern Cameroons Judge Badawi in dissent highlighted this inconsistency.313 Secondly, a declaratory judgment used as reparation for a past course of conduct also lacks “the force of res judicata in respect of future courses of conduct, which would necessarily be different from the course of conduct forming the subject of the decision although more or less similar to it.” 314 Unlike other forms of reparation, a declaratory judgment has effect as issue estoppel between the parties,315 and binds future conduct, but it has “essentially no claim-preclusive effect at all”.316 A party that obtains a declaratory judgment “is not prevented from

310

311 312 313 314 315 316

ILC, supra note 367, p. 40 (para. 200). E.g., Corfu Channel (Merits) case, supra note 269, p. 36; Bosnian Genocide case, supra note 65, p. 234 (para. 463); Mutual Assistance in Criminal Matters case, supra note 16, pp. 245 (para. 204), 247 (para.205(2)(a) (dispositif ); Pulp Mills case, supra note 281, p. 79 (para. 282(1) (dispositif ); FYROM v. Greece, case, supra note 71, p. 47 (para. 169). ASR Commentary, supra note 242, p. 106 (para. (6)); Crawford, supra note 3, p. 233. Northern Cameroons case, supra note 15, p. 37. Ibid., p. 150 (Badawi). Cf., Rosenne, supra note 12, p. 1579 (n193), suggesting that Corfu Channel was potentially expounding a rule of customary international law. Northern Cameroons case, supra note 15, p. 139 (Morelli). M. Aronson, B. Dyer and M. Grove, Judicial Review of Administrative Action (3rd edn., Law Book Co, Sydney, 2004), p. 802; Bray, supra note 124, p. 1293. Bray, supra note 124, p. 1293.

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bringing a subsequent suit on the same facts for further relief.” 317 As such the Court’s jurisprudence is, on its face, too inconsistent to justify reliance on it as a proof of the declaratory judgment as reparation.

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Legal Damage

Thirdly, it has been proposed that the declaratory judgment can be moulded to fit within the concept of reparation by conceiving it as a means of redress for ‘legal damage’ or ‘legal injury’.318 Legal damage is a superficially attractive notion, as it neatly resolves the tension created by the Court’s use of the declaratory judgment as satisfaction. It creates (ex post facto) a type of damage to which the declaratory satisfaction can be directed. However, it is an unnecessary legal fiction, “lacking any discrete content”,319 and not logically sustainable. Although writing in a different context, Anzilotti provides the most succinct explanation of legal damage; that “le dommage se trouve compris implicitement dans le caractère antijuridique de l’acte”.320 Hoss suggests that legal damage is a type or sub-category of immaterial damage,321 to be distinguished from affronts to the dignity of a State,322 which Fasoli,323 and Tanzi,324 suggest is a form of moral damage. Fasoli submits that the concept of ‘legal’ damage coincides with the “mere violation of a legal right or with the non-material injury inherent in any breach of the law”, while ‘moral’ damage concerns “an offence directed to the sovereign dignity or honour of a State.” 325 Tanzi argues that “any violation of a legal obligation entails in itself a damage, irrespective of the occurrence of a ‘vis-

317 318

Ibid. The ASR Commentary defines “injury” as “any damage, whether material or moral”: p. 91 (Art. 31(2)). See ASR Commentary, supra note 242. 319 S. Wittich, ‘Non-Material Damage and Monetary Reparation in International Law’ (2004) 15 Finnish Yearbook of International Law pp. 321, 348-350. 320 Notably, this explanation arose in the context of an article concerned more precisely with responsibility for injury to aliens: Anzilotti, ‘La responsabilité internationale des Etats à raison de dommages soufferts par des étrangers’ 13 Revue générale de droit international public (1906) pp. 5, 13. 321 Hoss, supra note 297, para. 6. 322 Ibid., para. 7. 323 E. Fasoli, ‘Declaratory Judgments and Official Apologies as Forms of Reparation for the Non-Material Damage Suffered by the State: the Djibouti-France Case’ 7 The Law and Practice of International Courts and Tribunals (2008) pp. 177, 179. 324 A. Tanzi, ‘Is damage a distinct condition for the existence of an internationally wrongful act?’ in Marina Spinedi and Bruno Simma (eds.) United Nations Codification of State Responsibility (Oceana, New York, 1987), pp. 1, 9. 325 Fasoli, supra note 323, p. 182.

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ible’ injury”,326 and that the appropriate mode of reparation for such legal damage is satisfaction, because of its immaterial nature.327 Support for the concept of legal damage may also be found in Barboza’s critique of the ASR, where he notes that “[r]esponsibility is basically reparation, reparation and injury are inseparable, and legal injury is the only damage that is, in turn, inseparable from the breach of an obligation. So, the breach of an obligation invariably causes a legal injury and legal injury requires reparation.” 328 Barboza surmises that one of the objects of a declaratory judgment is redress for legal injury.329 However Barboza inadvertently reveals one of the most significant flaws in the argument. Responsibility is not, basically or otherwise, coterminous with reparation. The ASR are clear, and it is generally accepted, that damage is not a precondition for the invocation of responsibility;330 responsibility is “independent” of any damage that may ensue.331 The significance of this may be understood by reference to ASR Articles 42 and 48, which regulate the entitlement of two ‘classes’ of States to invoke the responsibility of a wrongdoing State.332 Article 42 permits an “injured” State to invoke the responsibility of another State.333 Consistently with the decision not to require damage as an element of responsibility, any State to which the obligation breached was due individually, or in the case of multilateral obligations, which was “specially affected” by the breach, qualifies as an injured State.334 In cases of the breach of a multilateral obligation which do not specially affect a particular State, responsibility may still be invoked under Article 48 by a State acting in the collective interest.335 As such, although responsibility may be invoked by any State to which an obligation is due, only an “injured State” or a “specially affected State” is entitled to reparation. Other States may still re-

326 Ibid., p. 10. 327 Tanzi, supra note 324, p. 9. 328 J. Barboza ‘Legal Injury: The Tip of the Iceberg in the Law of State Responsibility’ in M. Ragazzi (ed.) International Responsibility Today – Essays in Memory of Oscar Schachter (Martinus Nijhoff, The Hague, 2005), pp. 7, 22. Barboza uses the term “legal injury” rather than “legal damage”, but draws no distinction between the concepts. Cf. Wittich, supra note 319, p. 325. 329 Ibid., p. 19. 330 ASR Commentary, supra note 242, p. 34 (Art. 2), p. 36 (paras. (9)-(10)); Crawford, supra note 3, p. 84. 331 Wittich, supra note 319, p. 324. 332 Invocation of responsibility is understood as encompassing formal measures such as the commencement of proceedings before an international court or tribunal: ASR Commentary, supra note 242, p. 117 (para. (2)); Crawford, supra note 3, p. 256. 333 ASR Commentary, supra note 242, p. 117 (Art. 42). 334 Ibid., (Art. 42 (b)(i)); Crawford, supra note 3, p. 255. 335 ASR Commentary, supra note 242, p. 126 (Art. 48); Crawford, supra note 3, p. 276.

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sort to the Court, and are able to seek a declaratory judgment, but no more than this.336 Because damage is not a precondition for responsibility, the fiction of ‘legal damage’ does not inevitably support a conception of the declaratory judgment as form of reparation. Indeed, the better argument seems to be that the fiction of ‘legal damage’ or ‘legal injury’ ought to be abandoned as unnecessary and distracting. Wittich offers compelling arguments for the abandonment of any such concept.337 First, he observes that since there is no limitation, subject to principles of jus cogens, on the obligations that States may enter into, it is implicit that there may be breaches of said obligations which do “not involve any identifiable or even presumable kind of material or non-material damage.” 338 Second, he notes that in the bilateral context, damage serves the purpose of identifying the injured State capable of invoking the responsibility of the wrongdoing State, and as such the notion of legal damage or injury is superfluous, because “in the bilateral context, where every obligation of a state corresponds, in a synallagmatic way, to a legal rights of another state, any breach of this obligation necessarily ‘produces’ an injured state”.339 Third, he argues that the concept of legal damage “is not one that singles out a specific type of damage comparable to material or moral/non-material damage … relevant for concomitant issues such as the form and amount of reparation.” 340 On balance, Wittich concludes that the notion of legal injury or damage “does not have any identifiable meaning and is merely another term for illegality or wrongfulness”.341 These are convincing arguments, particularly as the Court has never accepted the concept of legal damage, despite its regularly awarding declaratory judgments as satisfaction.342 The concept of legal damage represents a post facto academic rationalisation for explaining the language of the Court. The internal logical flaws and lack of juridical acceptance mean that it is a poor foun336 Such an approach, while progressive, is nonetheless consistent with the approach of the Court in the South West Africa (Second Phase) case where the Court, despite rejecting the claims for a declaration by Ethiopia and Liberia, accepted the possibility of a claim by States that had not suffered damage (supra note 65, p. 32 (para. 44)). As explained by Judge Jessup: “international law has long recognized that States may have legal interests in matters which do not affect their financial, economic, or other ‘material’, or, say, ‘physical’ or ‘tangible’ interests.”: p. 343 (Jessup). 337 According to Wittich, legal injury refers to the “nature of the illegality of the act.” As such, his use of the phrase is consistent with the phrase “legal damage” as used by Fasoli, Tanzi and Barboza. Wittich, supra note 319, p. 325. 338 Wittich, supra note 319, p. 348. 339 Ibid., p. 349. 340 Ibid., p. 350. 341 Ibid. 342 Wyler and Papaux, supra note 293, p. 627.

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dation for what would be a radical re-conception of the fundamental parameters of the declaratory judgment.

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Affirmation of the Rule of Law

There is a third argument in favour of the declaratory judgment as a mode of reparation, but which concerns not damage done to the applicant State but damage to the rule of law itself. Proponents of this argument suggest that a declaratory judgment may effectively affirm and confirm the continuation of the legally binding force of the breached obligation.343 This suggests a division like that proposed by Brown between the ‘private’ adjudication function of the Court, which resolves the dispute and does justice between the parties; and the ‘public’ function which is concerned with the administration of justice in the broad sense.344 In this model, the declaratory judgment is aimed at protecting against erosion of the rule of law that “might threaten from frequent violations.”345 As Barboza explains, “[i]n a decentralized legal order such as international law, deseutudo is a constant threat.” 346 For example, if a contractual obligation is breached, and this fact goes unacknowledged, the norm of pacta sunt servanda is weakened.347 Anzilotti argues that the breach of a particular right gave rise to “l’obligation de rétablir, sous une forme quelconque, l’ordre juridique troublé par lui”,348 and Shelton suggests that while breach of an agreement may cause no specific harm, the breach itself “may undermine the effectiveness of the legal regime and respect for the rule of law.” 349 Nonetheless, while it is certainly the case that a judgment or award by an international court or tribunal can do much to protect and maintain the rule of law in the international system, it does not appear that there is anything unique in this sense which distinguishes the declaratory judgment from any other judicial pronouncement. Moreover, it little explains why a declaratory judgment, while possibly serving this purpose, should be considered as reparation.

343 Fasoli, supra note 323, p. 184. 344 C. Brown, ‘The Inherent Powers of International Courts and Tribunals’ 76 British Yearbook of International Law (2005) pp. 195, 229-30. 345 Graefrath, supra note 300, p. 86. 346 Barboza, supra note 328, p. 19. 347 Ibid. 348 Anzilotti, supra note 320, p. 13. 349 Shelton, supra note 17, p. 839.

Declaratory Judgments of the International Court of Justice

͘.͗

The Declaratory Judgment as a Penalty

There appears, therefore, to be little theoretical support for the conception of the declaratory judgment as a mode of reparation. Moreover, it is possible to recharacterise the Court’s use of the Corfu Channel formulation in such a manner as to restore consistency between the declaratory judgment’s use as satisfaction in practice and the conceptual parameters of the declaratory judgment. Through this re-characterisation the Court’s use of the declaratory judgment as satisfaction is conceived as a penalty, not as a form of reparation. The use of declarations as a form of penalty can be traced back over a century. In the Carthage and Manouba cases,350 decided in 1913, the tribunal refused to award nominal damages for offense to the French flag and pecuniary damages for moral injury (préjudice moral) to France, as it reasoned, in both cases using the same language, that “pour le cas où une Puissance aurait manqué à remplir ses obligations, soit générales, soit spéciales, vis-à-vis d’une autre Puissance, la constatation de ce fait, surtout dans une sentence arbitrale, constitue déjà une sanction sérieuse.” 351 Though the Carthage and Manouba decisions are not declaratory judgments, this was the first time an international adjudicative body had proposed that a statement of breach by an authoritative tribunal in itself constituted a penalty for wrongful conduct. Arangio-Ruiz suggests that the term ‘sanction’ as used by the tribunals in Carthage and Manouba should “obviously be read as an equivalent of ‘satisfaction’, especially of those aspects of satisfaction which appear to have a punitive nature.” 352 While the ASR Commentary moves away from this aspect of satisfaction, noting expressly that “satisfaction is not intended to be punitive in character”,353 it should be noted that arguably the ILC’s ‘narrow’ conception of satisfaction on this point may not fully reflect the Court’s practice.354 In noting that the judicial declaration was a means of sanctioning wrongful conduct, Judge Azevedo’s comments in Corfu Channel echo those of the Carthage and Manouba tribunals.355 As such, it might be suggested that the Court in Corfu Channel was conscious of the punitive element of satisfaction at the time of its conclusion that the declaratory judgment constituted appropriate satisfaction.356 If it is accepted that the declaratory judgment, when used as satisfaction, is directed to penalising the responsible State and not to repairing any injury, the apparent divergence between the practice of

350 351 352 353 354 355 356

Affaire du Carthage (1913) 11 R.I.A.A. 449; Affaire du Manouba (1913) 11 R.I.A.A. 471. Affaire du Carthage, p. 460; Affaire du Manouba, p. 475. Arangio-Ruiz, supra note 304, p. 35 (para. 117). ASR Commentary, supra note 242, p. 107 (para. (8)); Crawford, supra note 3, p. 234. Shelton, supra note 128, p. 91. Corfu Channel (Merits) case, supra note 269, p. 114 (paras. 44-5) (Azevedo). Ibid., p. 36.

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the Court and its statements regarding the conceptual parameters of the declaratory judgment can be reconciled. The foundations of this resolution can been seen in the observations of Wyler and Papux that “satisfaction is linked to an injury consequent upon the perpetration of some sort of fault, regardless of the specifics of that notion in international law”.357 While restitution and compensation are the means by which to restore the injured party to the situation which would have existed if the wrongful act had not been committed,358 satisfaction is focussed on the wrongfulness of the act in question, and provides the means for acknowledgement of the wrong, expression of regret, and restoration of the relationship.359 Satisfaction “aims at punishing—in the most general sense of the word—an injury which is judged not susceptible of being redressed … by the traditional forms of reparation”.360 As Garcia-Amador notes, “the scope of [satisfaction] is determined more by the nature of the wrongful act than by the injury actually caused.” 361 Appreciating this element of satisfaction obviates the need to create a legal damage. In the words of Grotius: “Injuries done might be considered in a twofold Respect, either as they may be repaired or punished”.362 Satisfaction conceptually has this dual character—it may be a form of reparation or it may be a penalty. This broader dual-characteristic conception of ‘satisfaction’ profoundly affects the analysis and interpretation of the Court’s usage of ‘satisfaction’. Two distinct policies can be pursued under the rubric of that term: Reparation and punishment. Both policies are appropriate for the judicial context. However, while the reparation aspect of satisfaction is clear, if outdated, the punishment aspect is unfamiliar even if more relevant in the modern context. Given that the equality of States is a fundamental precept of the international system, the castigation of internationally wrongful conduct is “more effectively fulfilled through a public declaration by an independent organ than through an apology or the like.” 363 In the absence of a collective enforcement authority, the judicial declaration serves to punish and deter wrongdoing.364 The “condemnation of an internationally wrongful act by an impartial third party of recognized authority”,365 that is, by the Court, may thus achieve “equilibrium” between the 357 358 359 360 361 362 363 364 365

Wyler and Papaux, supra note 293, p. 623. Chorzów Factory (Jurisdiction) case, supra note 17, p. 22. Shelton, supra note 128, p. 54. Wyler and Papaux, supra note 293, p. 625. F.V. Garcia-Amador, The Changing Law of International Claims Vol. 2 (Oceana, New York, 1984), p. 559. Grotius, supra note 264, Bk 2, Ch 20 (para1(1)). Graefrath, supra note 300, p. 86. Shelton, supra note 128, p. 54. Wyler and Papaux, supra note 293, p. 636.

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interests of the States involved and the interests of the wider international community in having unlawful acts “punished”, in a broad sense.366 The Court’s practice of pronouncing its declarations to be appropriate satisfaction generally appears to be closely linked to the punitive dimension of satisfaction.367 FYR Macedonia highlighted in its claim for a declaratory judgment that such a judgment “would avoid further impunity.” 368 It perhaps even serves to explain its use in the Bosnian Genocide case, and respond to criticism that the extraordinarily serious failure by Serbia to prevent the genocide could not be “repaired” by a mere declaration.369 Despite the language used by the Court in that case,370 ‘satisfaction’ that is affected in this manner is (or should be) directed to the second limb, that of punishment, rather than the first limb of reparation. Of course, as Shelton notes, “the line between satisfaction as a remedy and satisfaction as an expression of disapproval or sanction has not always been clear.” 371 In the declaratory judgment the line tends to go from unclear to invisible, as it too may serve this dual purpose. It may be simply a declaration that particular conduct is unlawful, as a precursor to the offending State’s making reparation; or it may be that the declaration that particular conduct is unlawful takes on the character of a denouncement of that conduct—satisfaction in the punitive sense. Seen in this light, the apparent inconsistency between the characteristic requirements of the declaratory judgment and the Corfu Channel formulation also reveals itself to be not as troublesome as it initially appears. It is merely an additional emphasis on wrongfulness placed by the Court on the standard declaration of responsibility for unlawful conduct; there is no conceptual difference. Significantly, whereas ‘satisfaction’ in the remedial sense has ‘executory’ consequences, in the second punitive sense any legal effect is passive, but retains an impact for the future.372 The declaration as punitive satisfaction has the necessary binding forward reach on the parties’ future conduct—expressing “opprobrium to the wrongdoer” 373 and prohibiting future breaches of the same type.374

366 Ibid. 367 Shelton, supra note 128, p. 54; Garcia-Amador, supra note 361, p. 575. 368 FYROM v. Greece case, supra note 71, Reply of the former Yugoslav Republic of Macedonia, 9 June 2010, para. 6.15. 369 Gattini, supra note 292, p. 711; Milanović, supra note 292, p. 691. 370 Cf. Bosnian Genocide case, supra note 65, pp. 234 (para.463), 239 (para. 471(9)) (dispositif ). 371 Shelton, supra note 128, p. 91. 372 Arguably the socio-political effects may be more active in their consequences, though of course such aspects do not challenge the legal position directly. 373 Shelton, supra note 128, p. 12. 374 H. Kelsen, ‘Compulsory Adjudication of International Disputes’ 37 American Journal of International Law (1943) pp. 397, 402.

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As observed by Brown, reparation is “to some extent independent of international judicial practice, for the obligation to make reparation arises as a result of state responsibility … regardless of whether this is determined in international judicial proceedings or through diplomatic processes.” 375 The declaratory judgment, however, is indivisible from the judicial act, and is not properly conceived as a form of reparation, particularly given its inherent incompatibility with the obligations of responsibility and reparation as obligations pertaining to States, as set out in the ASR. Rather, it appears that the Court’s use of the declaratory judgment as a mode of satisfaction is not concerned with the reparatory aspect of satisfaction, but with its punitive dimension. Understood as such, the conceptual parameters of the declaratory judgment can be reconciled with its use in practice. The apparent inconsistency in the Court’s use of declaratory judgment as satisfaction arises from a misconception of that ambiguous term. A declaration is not awarded as reparation, akin to an apology or salute to the flag, but as an explicit recognition of a State’s responsibility for its unlawful acts in a manner that censures the wrongdoer. Unlike any attempt to use the declaratory judgment as reparation, this characterisation is entirely consistent with the conceptual parameters of the declaratory judgment developed in this paper.

͙

Conclusion

This article has sought to provide a more coherent exposition of the characteristics of the declaratory judgment in international law, and a more purposive analysis of the Court’s use of the declaratory judgment. Brownlie proposed that the declaratory judgment encompasses a “variety of remedial forms”.376 It is perhaps more accurate to suggest that the declaratory judgment is a single, but protean and flexible, remedy. Because of this, the Court is able to use the declaratory judgment to respond to a wide variety of disputes, including those concerned with determining rights, settling boundaries, ascertaining the applicable law or establishing breaches of international law. As pondered by the Chief Justice of the Australian High Court: “Well may we ask rhetorically of declarations as Homer Simpson asked of donuts – is there anything they can’t do?” 377 When examined by reference to its distinctive characteristics as a binding declaration of the rights of the parties, with effect for the future, the declaratory judgment reveals itself as essentially a paradigm act of adjudication; its importance deriving from the fact that the resolution of a dispute can be of greater significance than the award of restitution or compensation, especially for States

375 Brown, supra note 3, pp. 186-7. 376 Brownlie, supra note 2, p. 560. 377 French, supra note 3, p. 31.

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“committed to upholding the rule of law.” 378 In such situations, the mere declaration usually obviates the need for coercive relief.379 Certainly, there may be any number of circumstances in which the Court is prepared, or able, to grant a declaration when it is “not prepared to grant any other remedy.” 380 However, the Court has not been sufficiently clear in defining the role of the declaratory judgment in proceedings concerned with questions of State responsibility. More precisely, the foregoing analysis suggests that the distinctive characteristics of the declaratory judgment, and its inherent nature as an exclusively judicial remedy, excludes the declaratory judgment from being conceived as a form of reparation, the latter being inherently an obligation owed by the offending State, addressed to making amends for past conduct. Intending to move beyond simple acceptance that a declaratory judgment may constitute appropriate satisfaction, this article has offered an analysis aimed at re-conceptualising the Court’s jurisprudence in this respect. In particular, the apparent tension in Court’s use of the declaration as satisfaction can be resolved if the term ‘satisfaction’ is understood as the Court’s attempting to sanction wrongful conduct on the part of States. It is perhaps misconceived to distinguish between the declaration of responsibility and the declaration as satisfaction; each is one side of the same coin. In any event, States intending to seise the Court of their disputes may be assured that ubi jus, ibi remedium. Or at least, declaratoria remedium.

378 Brown, supra note 3, p. 192. 379 Borchard, supra note 34, p. 106. 380 Woolf, supra note 34, p. 6.

͚

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be? Nuwan Peiris*

Abstract This brief survey discusses the recently concluded provisional measures case of ARA Libertad from the International Tribunal for the Law of the Sea where the Tribunal ordered the Argentine warship arrested by the Ghanaian Court to be released. This case dealt with many contentious issues like the interim character of the Tribunal, immunity of a warship in a port, pendency of a local action etc. where the jurisprudence was still left unresolved.

͕

Introduction

‘Can a pig’s tail be straightened?’, asks a Cypriot proverb. It is rather like asking ‘will the International Tribunal for the Law of the Sea (‘ITLOS’) ever develop judicially manageable standards for provisional measures under Article 290(5)?’ The recent case of ARA Libertad (Provisional Measures)1 under Article 290(5) of the UNCLOS2 before the ITLOS between Argentina and Ghana is one example of this difficulty. The Tribunal ordered the release of the Argentine warship ARA Libertad, held in detention in Ghana, dismantling the enforcement proceedings in the High Court

*

1

2

Author is an Attorney-at-law in Sri Lanka and is a State Counsel attached to the Attorney General’s Department, Sri Lanka. He was formerly the Independent Counsel to Presidential Commission of Inquiry into the Serious Violations of Human Rights in Sri Lanka 2007. He is an ITLOS Nippon Fellow and holds a LL.B (OUSL), MICS (UK) and a Chartered Shipbroker UK. Usual disclaimer applies. See Order, The “ARA Libertad” Case (Argentina v. Ghana), Provisional Measures (Case No. 20) (Dec. 15, 2012), accessible at , viewed on 16 May 2013. United Nations Convention on the Law of the Sea 1982 Dec. 10, 1982, 1833 U.N.T.S. 397.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͞ – Nuwan Peiris

of Ghana which had been instituted by NML Ltd over its defaulted Sovereign Bonds from Argentina. This case of provisional measures inter alia brings into sharp conflict the fundamentally conflicting nature of the type of remedies the Tribunal can grant pendente lite under Article 290(1) and pending the constitution of the UNCLOS arbitral forum under Article 290(5); and this brief survey addresses some of the issues the Tribunal may have considered in its attempt to grant provisional relief under Article 290(5).

͖

General Overview of UNCLOS on the Status of Warships

The structure of UNCLOS is primarily based on maritime zones.3 Each maritime zone contains rights and obligations for state parties, and so is the treatment accorded to a warship. Definition of warship is contained in Article 29. Article 95 gives warships complete immunity on the high seas. And this is also reflected in Article 236 on marine pollution which exempts warships from its application. This is based on the primacy accorded to the flag state where only the flag state should have jurisdiction over warships. But this unbridled status is not given to warships in territorial seas. In territorial waters, Article 31 states that if a warship does not comply with the costal state regulations concerning passage, she can be asked to leave. And the responsibility for damages caused by a warship shall be borne by the flag state (Article 31). The present case is concerned with Article 32. The contentious Article 32 states: Immunities of warships and other government ships operated for non-commercial purposes With such exceptions as are contained in subsection A and in Articles 30 and 31, nothing in this Convention affects the immunities of warships and other government ships operated for non-commercial purposes.

The instant case had to re-examine the scope of Article 32 for a warship that had entered a port facility, hence under the port jurisdiction.

͗ ͗.͕

Factual Matrix Background

NML Capital Limited (‘NML’) is a Cayman Island Company which is an affiliate of a New York based hedge fund entity which, in this instance, purchased sovereign debt at a discounted face value and then sought to enforce it. The sover-

3

See T. Treves, ‘Law of the Sea’, Max Planck Encyclopedia of Public International Law, Vol. VI, (Oxford University Press 2012), p. 708 at para. 23.

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

eign bonds had been issued by Argentina in February and July 2000 as per a Fiscal Agency Agreement (‘FAA’) between Argentina and Bankers Trust Company, having New York law as the applicable law. The FAA also contained a sovereign immunity waiver clause. Argentina declared a moratorium in December 2001 on all its sovereign debts. Thereafter, between June 2001 and 2003, NML purchased Argentine sovereign bonds at nearly half of the discounted face value—on the principal value of USD 172,153,000—and was in unmerciful pursuit of enforcement against Argentine property. NLM obtained a summary judgment in a Federal Court in New York on the bonds for a total, including interest, of USD 284,184,632.30. NML filed a common law action on that summary judgment in the UK, and succeeded before Blair J in the Commercial Court. The UK Court of Appeal reversed the Commercial Court on the basis of Argentina’s state immunity, but Commercial Court ruling was restored by the Supreme Court. NLM later tried the same strategy in Ghana, which became the basis for the ITLOS case.

͗.͖

The Case before ITLOS

The facts before ITLOS were straightforward.4 Frigate ARA Libertad was a warship of the Argentine Navy and had been in use for Naval Cadet training trips.5 When the Frigate arrived on the port of Tema in Ghana on 1 October 2012, she was ceremoniously welcomed by Government of Ghana. But on next day, she was arrested and detained by an Interlocutory Injunction from the Ghanaian Court on an enforcement application filed by NLM on the unsettled value of Bonds.6 The Argentine Government entered appearance in Court to set aside the Order on grounds of warship immunity.7 The Court refused. Argentina appealed to the Court of Appeal where the case may have been completed by end of January 2013. However, before the conclusion of the appeal case, Argentina made a request for provisional measures to the ITLOS on 29 October 2012, and filed a Request for Provisional Measures to the ITLOS on November 14th 2012.8

4

5

6

7 8

See The “ARA Libertad” case, Separate Opinion of Judges Wolfrum and Cot, Para. 56: , visited 18 March 2013. See Request for Provisional Measures submitted by Argentina on 14 November 2012, Para. 3: , visited 18 March 2013. See Written Statement of the Republic of Ghana, para 4: , visited 18 March 2013. See Request for Provisional Measures by Argentina, supra note 1, para. 11. See Written Statement of the Republic of Ghana, supra note 1, paras. 6-7.

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Although Argentina had made a declaration under Article 287 to accept the jurisdiction of ITLOS, since Ghana has not made a declaration under Article 287, the case on merits would be heard by an arbitral tribunal constituted under Annex VII. Argentina prayed for provisional measures under Article 290(5) for the release of the vessel from the ITLOS pending the constitution of the arbitral Tribunal.

͘

Submissions of the Parties

The Applicant—Argentina—contended that the ship was a warship within the definition of Article 29 of the UNLCOS, and should have the undisputed right to immunity accorded to a warship under Article 32 of the UNCLOS. Further, Argentina also invoked Articles 18(1)(b), 87(1)(a) and 90 of UNCLOS as a basis for its claim. As argued by Argentina, these provisions provide a prima facie jurisdiction to the arbitral tribunal under Annex VII and empowered the ITLOS to grant provisional measures under Article 290(5) until the arbitral Tribunal is constituted.9 Furthermore, Argentina contended that provisional measures were necessary and appropriate because of a real and imminent risk of irreparable prejudice to its rights where continued detention posed a serious risk to the safety of the warship and the crew.10 Hence, Argentina asked ITLOS for the unconditional release of the ship and to ensure that the ship was re-supplied to that effect. Article 18(1) defines ‘passage’ for the purposes of innocent passage in territorial seas, whereas paragraph (b) deals with navigation to or from internal waters or a port facility, such as that which ARA Liberated was prevented from leaving. Articles 87 and 90 relate to the freedom of the High Seas and the Right to Navigation, which ARA Libertad was denied from enjoying due to its detention in the port of Tema. In its response, Ghana never expressly denied the immunity accorded to a warship, but strongly objected to the prima facie jurisdiction in view of Articles 32, 87 and 90 not being applicable to internal waters or to a port facility.11 Ghana also denied any irreparable harm or urgency.12 Interestingly, Ghana also argued that the sovereign immunity waiver clause in the Argentine bond, which became the basis for the New York Judgment in favour of NML, prevented Argentina from claiming sovereign immunity as a defence.13

9 10 11 12 13

See Request for Provisional Measures, supra note 1, para. 24. See Request for Provisional Measures, supra note 1, para. 60. See Request for Provisional Measures, supra note 1, para. 11. See Request for Provisional Measures, supra note 1, paras. 19, 24. See Request for Provisional Measures, supra note 1, para. 16.

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

͙ ͙.͕ .

The Order for Provisional Measures The Order

The Tribunal unanimously allowed the unconditional release of frigate ARA Libertad along with its commander and the crew. The Order allowed the ship to leave the port of Tema and ensured that the ship was re-supplied to that effect. The Tribunal was inclined to view the ship as a military ship14 faced with a grave and urgent situation where force was used on her to move to another berth without the authorisation of the Commander.15 The main Order stated that although Article 32 appears under “Territorial Sea and Contiguous Zone” like the definition of a warship in Article 29, it is applicable to all maritime spaces including internal waters.16 And the fact that Article 32 contains the wordings “nothing in this Convention affects the immunities of warships”17 gives weight to this. In any event, the Tribunal observed that “a difference of opinion” on the applicability of Article 32 was sufficient to create a dispute18 which afforded prima facie jurisdiction of the Annex VII arbitral tribunal.19 Further, ITLOS also noted that Ghana did not dispute the immunity for warships in internal waters accorded by general international law. However the Order noted that Artsicles 18(1)(b), 87 and 90 of UNCLOS did not provide a basis for prima facie jurisdiction of the Annex VII arbitral tribunal.20 Furthermore, the Tribunal took the position that the obligation to exchange views under Article 283 was satisfied, considering the effort that Argentina had taken to resolve the dispute by negotiation.21 And the Tribunal also came to the conclusion that the urgency of the situation required the preservation of the rights of parties to grant prescriptive measures.22 The Tribunal did not deal with the argument on the applicability of the sovereign immunity waiver clause; it would have been interesting to observe how this was dealt with by an arbitral forum. However, it would be dogmatic if immunity waiver clauses were perceived to be enforced against embassy property, warplanes, and warships, where the intention of such clauses is only to waive the filing of action against the sovereign. Even the New York judgement against Argentina was never enforced on the Argentine Embassy property in US and it

14 15 16 17 18 19 20 21 22

See The “ARA Libertad” case, supra note 1, paras. 94, 97, 98. Ibid., para. 99. Ibid., para. 64. Ibid., para. 63. Ibid., para. 65. Ibid., paras. 66, 67. Ibid., para. 61. Ibid., paras. 69, 72. Ibid., para. 100.

͞ – Nuwan Peiris

is inconceivable that US courts would enforce it against Argentine warplanes or warships visiting US. Judge Paik appended a Declaration on issue of urgency and irreparability stating that the Main Order should have been much clearer on these requirements, whilst emphasising that there is a low threshold test to establish prima facie jurisdiction.23 Judge Lucky appended a Separate Opinion advocating a pragmatic approach when the Convention is silent, in which Article 32 should be deemed to include internal waters for the reason that it does not explicitly exclude the immunity of warships in internal waters, and it must also be interpreted in congruence with other rules of international law which assures warship immunity.24 Judges Wolfrum and Cot also filed a joint Separate Opinion on the issue of estoppel,25 whereas Judge Rao in his opinion questioned whether it was a sufficient basis to find prima facie jurisdiction.26 Judge Rao is of the view that waiver or estoppel may become relevant, however, at the stage of merits. Judge Rao concluded his Opinion with an emphatic statement that the Main Order should have had “a clear statement to the effect that even an attempt to threaten or use of force against a warship would … be a matter impinging on … international peace and security”.27 It is unclear under what premise Judge Rao made this sweeping statement at the climax of his Opinion, since a warship does not enjoy uninhibited status within the territory of a receiving state where force can be used for expulsion as the last resort if the peace of the port is endangered by it.28 The genesis of State practice pertaining to the immunity of a warship is based on sovereign recognition, cooperation and respect.29 Whilst Argentina has the right to prevent the execution of a judgment on the warship, she also has an obligation to cooperate with the port authority in Tema when asked to move to 23

24

25

26

27 28 29

See The “ARA Libertad” case, Declaration of Judge Paik, para. 1, available at , visited 18 March 2013. See The “ARA Libertad” case, Separate Opinion of Judge Lucky, available at , visited 18 March 2013. See The “ARA Libertad” case, Joint Separate Opinion of Judge Wolfrum and Judge Cot, available at , visited 18 March 2013. See The “ARA Libertad” case, Separate Opinion of Judge Rao, , visited 18 March 2013. Ibid., para. 16. See C. J Colombos, International Law of the Sea (6th Edn., Longmans, 1967), pp. 273-274. See S. Sucharitkul, ‘Immunities of Foreign States Before National Authorities’, 149 Recueil des Cours 87 (1976 I)

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

another berth to mitigate port costs and congestion.30 This issue was ignored by ITLOS. The consequent aggravation of costs to the port caused by the ARA Libertad should have at least been featured in the Order in the form of security by Argentina. In this sense, the Order should have been more balanced and not onesided; especially considering that ARA Libertad entered Tema, it could not act in defiance to all forms of cooperation. Not surprisingly, the main Order significantly relied on the resulting aggravating situation between the Ghanaian enforcement authorities and the ARA Libertad as a basis to prescribe provisional measures without any discussion on the instigating role of the ARA Libertad, which is more akin to a final conclusion from a tribunal on the merits. Besides, when ARA Libertad decided to enter the port, the doctrine of acquiescence/estoppel could also operate on the basis of their own representations to cooperate with the receiving State. Further, in an application for provisional relief, it is incumbent upon the Applicant—in this case Argentina—to disclose all the material facts relevant to the Tribunal. It is observed that the Application filed by Argentina was significantly devoid of information on the local litigation with NLM, its active involvement to resist, and the sovereign immunity waiver clause in the bonds. And neither was the entire docket in the local case made available to the Tribunal by Argentina, until the Respondent volunteered to file it, if necessary, in the last round of arguments. In an application for interim relief, the Tribunal should have given judicial consideration on sufficient levels of disclosure for the Tribunal to come to a conclusion.

͙.͖

Separate Opinion of Judges Wolfrum and Cot

Judges Wolfrum and Cot’s joint Separate Opinion deserves a discussion given its criticism on the main Order. They could not agree with significant parts of reasoning in the Order; in particular, the centrality of the issue of Article 290(5) in determining prima facie jurisdiction in the light of Article 288.31 The Separate Opinion dealt with the object and purpose of provisional measures, the issue of prima facie jurisdiction of the Annex VII arbitral tribunal, and finally the issue of estoppel. As far as the prima facie jurisdiction was concerned the Opinion advocated three steps. First, “to establish which threshold has to be applied” in determining the arbitral tribunal’s prima facie jurisdiction, second, the existence of a legal dispute and, finally, “whether the Applicant in its discourse with the Respondent has presented facts and law” which permitted the Tribunal to construct the prima facie jurisdiction of the arbitral tribunal.32

30 31 32

See Written Statement of the Republic of Ghana, supra note 6, paras. 5, 21. See Separate Opinion of Judges Wolfrum and Cot, supra note 4 , paras. 1, 2. Ibid., para. 11.

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In dealing with the threshold level to be applied in order to determine the arbitral tribunal’s prima facie jurisdiction, the Tribunal noted that the applicant must invoke the provisions of the UNCLOS not in an abstract way, but on a sound legal basis. In this regard, the Opinion also highlighted a case-by-case approach to Article 290(1) and (5) based on the requirement of urgency and on the facts available to the tribunal at that “moment”.33 In dealing with the existence of a legal dispute, the Separate Opinion, inter alia, disagreed with the majority view on the interpretation of Article 32.34 Article 32 applies to territorial sea and it has no application to internal waters or a port facility, hence could not be used as a legal basis in the instant case. The learned judges took the view that Article 32 did not create a rule under the UNCLOS on the immunity of warships, as it instead addresses limitations and exceptions to immunity, comparable to Article 95.35 In that way, Article 32 only makes reference to the conventional general law which corresponds with the last preambular paragraph of the Convention on immunities of warships,36 and there only in relation to the territorial sea and not the internal waters. The Opinion further stated its disagreement with the main Order that Article 32 creates a “general clause governing the immunity of warships in all ocean spaces” and stated that the application of Article 32 should be confined to territorial seas and innocent passage,37 which is also consistent with the legislative history.38 In territorial waters, Article 32 does not reflect the customary international law being incorporated into the Convention; it treats the immunity of warships as a fact.39 Hence this cannot be a basis to decide on the prima facie jurisdiction of the arbitral tribunal under Annex VII.40 In any event, the learned judges took the view that this did not preclude the assertion of immunity for warships in internal waters41 where the basis is in customary international law and not in the Convention.42 The Opinion, however, relied on procedural estoppel,43 which prevented Ghana from opposing the instant proceedings in view of its undertaking in welcoming the ship as a military ship. Hence, ITLOS made procedural estoppel a basis to 33 34 35 36 37 38 39 40 41 42 43

Ibid., para. 16. Ibid., paras. 38, 39. Ibid., para. 42. Ibid., para. 41. Ibid., para. 45. Ibid., para. 46. Ibid., para. 50. Ibid., para. 51. Ibid., para. 47. Ibid., para. 43. Ibid., paras. 62, 68.

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

grant provisional measures. It is dubious to view procedural estoppel as a legal basis, either to construct prima facie jurisdiction, or to establish a legal norm on immunity for warships in internal waters.44

͚

Article

and the Immunity of a Warship

The state practice of granting immunity to a warship in ports is reflected in the infamous Schooner Exchange v. M’Faddon,45 which is considered as the “first definitive statement of the doctrine of foreign state immunity”.46 The question is how far this practice in ports/internal waters is embodied in UNCLOS. In view of the Separate Opinion of judges Wolfrum and Cot, for matters concerning the immunity for warships in internal waters which are in the hands of customary international law and not the Convention, it becomes problematic when selecting an appropriate forum to resolve law of the sea disputes. This Opinion essentially relies on general international law concepts like estoppel and that contained in Article 4 of the ILC’s Draft Articles on International Responsibility.47 It is questionable whether such concepts can be identified with any specific provision in the Convention, whilst in the same vein, the application of such concepts subconsciously promotes the liberal application of general international law to apply and interpret the Convention. In this sense, why is Article 32 treated differently in the application of general and customary international law? A finer but fragmented approach to interpretation of the Convention may eventually create a convoluted approach to an otherwise composite expansion of the Tribunal’s jurisprudence. Contrary to the said Opinion, it is not rational to confine the application of saving clauses like Article 32 by using the last preambular paragraph of the Con-

44 45 46

47

See Opinion of Judge Rao, supra note 26. Schooner Exchange v. M’Faddon, 11 U.S. 116 (1812). L. M. Caplan, ‘State Immunity, Human Rights, and Jus Cogens: A Critique of the Normative Hierarchy Theory’, 97 Am. J. Int’l L. 741(2003), p. 745. See also Ian Sinclair’s lecture in The Hague Academy, in which he described The Schooner Exchange as the “true foundation” of foreign state immunity: I. Sinclair, ‘The Law of Sovereign Immunity: Recent Developments’, 167 Recueil des Cours 113(1980 II), p 215. For a more general account on the development of sovereign immunity, see J. M. Sweeney, The International Law of Sovereign Immunity (Policy Research Study, U.S. Dep’t of State, 1963); T. R. Giuttari, The American Law of Sovereignty: An analysis of Legal Interpretation (Praeger, New York, 1970), pp. 26-102; G. M. Badr, State Immunity: An analytical and prognostic view (Martinus Nijhoff, The Hague, 1984), pp. 9-62. See Art. 4 of the Draft Articles on International Responsibility by the International Law Commission, which deals with Conduct of Organs of State: Draft Articles on the Responsibility of States for Internationally Wrongful Acts, Report of the International Law Commission on the Work of its Fifty-Third Session, UN Doc A/56/10; GAOR 56th Session, UN General Assembly, 2001.

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vention, which states that “matters not regulated by this Convention continue to be governed by … general international law”. It is more sensible to see the incorporation of a rule on immunities of a warship in general international law in Article 32 in the context of Article 293, as Judge Lucky did,48 rather than interpreting Article 32 in the context of the last preambular paragraph, as Judges Wolfrum and Cot did. The latter interpretation may also relegate general international law out of the Convention leading to a fragmented approach to international forum selection. In addition, if Article 32 is understood in the light of exceptio probat regulam in casibus non exceptis, or the ‘the exception that proves the rule’,49 it gives more sense to the clause “matters not regulated by this Convention continue to be governed by … general international law” in the preamble not as a rule/reference of exclusion but an inclusionary effort for “… codification and progressive development of the law of the sea achieved in this Convention” as assured in the penultimate preambular paragraph. This is fortified by the decisive opening preambular clause where the Convention was promulgated with the “desire to settle … all issues relating to the law of the sea”. Even the overall approach of the Opinion itself strengthened this reasoning when the Opinion applied the general international law concepts like procedural estoppel and Article 4 of the ILC Draft Articles on State Responsibility, emphasising that the Convention did not exclude the rules of general international law being applied.

͛ ͛.͕

The Overall Approach of the Tribunal Pending Local Litigation: The Cart before the Bull?

At the time of the case concerning provisional measures, Argentina was an active participant in the local case. The injunction had been appealed against by Argentina to the Court of Appeal, and the dispute on the moving of the vessel, based on a motion by the Ports Authority, was pending before the High Court.50 The Government of Ghana, being the executive, took the defence that it was unable to interfere with the domestic case in view of the separation of powers embodied in the Ghanaian Constitution. Without much consideration, ITLOS judges dismissed this defence. On the contrary, the overlapping nature of exhaustion of local remedies and the inability to rely on the conduct of the judicial organ of a state party as an excuse cannot, and should not be, lightly presumed. The latter excuse of Ghana may

48 49

50

See Judge Lucky’s Opinion, supra note 24, paras. 34-38. In English, it means “the exception confirms the rule in cases not excepted”; see B. A. Garner, The Oxford Dictionary of American Usage and Style, (Oxford University Press, 2000), p. 138. See Written Statement of the Republic of Ghana, supra note 6, para. 6.

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

implicitly raise jurisdictional issues on Article 295’s requirement of exhaustion of local remedies under Section 2 of Part XV, if Ghana was prevented from relying on the pending case as a defence in a provisional measure case. The fact that Ghanaian judicial proceedings were pending at the time of the provisional measure case meant that local remedies were in a process of being exhausted; as such, Ghana relying on the defence that she was unable to interfere with the judiciary seems justifiable. ITLOS, however, was inclined to reason that the conduct of the judicial organ being independent of the executive branch of Ghana was not a valid defence. On the other hand, the Order contained no discussion on the exhaustion of local remedies; neither was it raised ex proprio motu. A criticism is that the ITLOS did not see the critical connection between the two issues. The legal relationship that exists between the exhaustion of local remedies on one hand and the State’s inability to interfere with the judicial acts as a legitimate defence on the other hand was not considered by the Tribunal. The discussion on the connection of these two issues of the Order should have been greater, given that the case dealt with a provisional matter, and effectively, the provisional case may have had an indirect stay on the local case, where Argentina herself was in active participation. Generally, the requirement of exhaustion of local remedies is not necessary in a case for provisional measures given the urgency, hence the jurisdictional bar of Article 295 is now understood to be directory and not mandatory.51 Synonymously, there is no necessity for a total exclusion of a defence in provisional measures where a State party can rely on acts of the judiciary as an excuse. ITLOS judges were instantaneously dismissive of the latter defence in their Orders.52 Had the Tribunal weighed the relevance of local remedies at the provisional measure stage and its intended exhaustion, it would have provided a far better substantive approach. Further, such provisional measures would have beeen more cooperative with the pending litigation in Ghana and the prospective UNCLOS arbitral forum. This was not to be. The Tribunal ordered the ship, which was the subject of ths case, to sail away from the Ghanaian jurisdiction, effectively granting the final relief of the prospective UNCLOS arbitral forum for Argentina, and making the Ghanaian court functus. Conversely, if the tribunal was inclined to view the exhaustion of local remedies to be prima facie illegal, or ‘not required by law’, given the fundamental character of the immunity accorded to a warship, the Tribunal at the outset may have pre-empted the outcome of the prospective UNCLOS forum. This case of 51

52

See Separate Opinion by Judge Laing in The M/V “Saiga” (No. 2) Case (Saint Vincent and the Grenadines v. Guinea), Provisional Measures, ITLOS 1999, para. 9, available at , visited 18 March 2013. See The Opinion by Judge Rao, supra note 26, paras. 6-8; and Opinion by Judges Wolfrum and Cot, supra note 4, para. 55.

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provisional measures brings into sharp conflict the fundamentally conflicting nature of the type of remedies the Tribunal can grant pendente lite and pending the constitution of the UNCLOS forum. The apparent confusion associated in mapping the jural relationship between these concepts—namely, the exhaustion of local remedies, pending judicial litigation as an excuse, and the transitional character of the ITLOS jurisdiction—at the threshold stage seems convoluted, and the inclination to grant selective primacy to one of the three concepts at the expense of the other will necessarily have an effect on the prospective UNCLOS arbitral forum.

͛.͖

Dissecting the Problem: An Egg within an Egg?

In general, this underlying problem seems to be a basic confusion that runs within the fabric of international law. The exhaustion of local remedies, the inability to rely on the judicial acts as a defence, and the interim character of the UNCLOS arbitral forum (Article 290(1)) operates like the sides of a jural triangle. It is a question of which side the court is willing to stretch, depending on the factual matrix of the case. The challenge is that this jural triangle has a problem within it; namely, the added transitional character of the ITLOS under Article 290(5) as opposed to Article 290(1). The question is whether the Tribunal failed to develop judicially manageable standards for cases involving provisional measures, especially keeping in mind the ‘comity’ towards the future UNCLOS arbitral tribunal.53 It seems that the Tribunal had pre-empted, and perhaps substituted, itself in a role that a domestic court should have played. Had the Tribunal first understood its role—that is, to cooperate with the pending litigation where both parties were active—the Tribunal may not have found it difficult to understand its role towards the prospective arbitral tribunal. The role of provisional measure cases is flexible, and it has a general supervisory power to continuously prescribe, modify and revoke provisional measures until such time the arbitral tribunal is constituted. Had this aspect been taken seriously, the Tribunal should have directed the parties on compliance measures which would have helped to exhaust the local remedy which both had participated in. In this way, it may not be surprising that if the Tribunal views the pending local action to be of merit, it may order cash bail, or any form of bail bond, or a letter of undertaking, before prescribing measures on ship release. On the contrary, the tribunal may decide to release the vessel outright as a provisional measure. If so, it has to reach a fairly a high threshold test, in as much as the impugned arrest is so unjust and apparent on the face of record that no reasonable State in legitimate conduct of its affairs would resort to such an act. This is a high threshold test, es-

53

See Opinion of judges Wolfrum and Cot, supra note 4, para. 5.

ARA Libertad from ITLOS: How Provisional a Provisional Measure Should Be?

pecially where the tribunal views the pending local litigation to be so manifestly obnoxious that the exhaustion of local remedies is unwarranted. In that event, the tribunal should specifically explain why the pursuit of such local judicial remedies are unnecessary. The Tribunal should explain, first, how the exhaustion or the continuation is manifestly obnoxious; second, how such continuation, or the pursuit of such local remedies must immediately be stopped, even before the constitution of tribunal; third, that where there exists an irreversible judicial prudence that even when the UNCLOS arbitral forum is constituted, it will not deviate from the stand so taken by the instant Tribunal; fourth, that is will provide a fall back monetary guarantee to the value of the ship in the case of Argentina found wrong so as to compensate the affected party; fifth, that the last requirement can be waivered off, if the act complained is so unjust. In such an instance the bar of the first threshold test must be raised further. It will not be insurmountable for a future Tribunal to approach on the following lines when cases of similar facts are presented.

͜

Creating a Dichotomy Between ‘Pure’ Internal Waters and a Port Facility

This case also cast a profound doubt as to whether the pre-UNCLOS approach of treating internal waters and port facilities as one should be maintained any longer. Though a regime for ports was dismissed in the UNCLOS I negotiations,54 UNCLOS III negotiations included an array of provisions in different Parts on port state responsibilities, so much so that it should not be confused with that of state sovereignty on ‘purely’ internal waters. A port by its very nature being a reception facility to ships should be treated as part of freedom to respect navigation, as law of the sea cannot exist without such facilities. The same is also true for internal transit waters like Kiel Canal, archipelagic waters, or Article 8(2) waters where one cannot be obtrusively dismissive of such being treated in UNCLOS.55 Such an evolutionary approach is not inconsistent considering that the definition of internal waters in UNCLOS does not interfere with provisions on port state responsibility. This lends much credence to separating the treatment of port facilities with ‘purely’ internal waters. Resultantly, extension of UNCLOS to port facilities and internal waters makes sense when it excludes ‘purely’ internal waters.

54 55

See The Opinion of Judges Wolfrum and Cot, supra note 4. For a General account on Kiel Canal see R. Lagoni, ‘Kiel Canal’, Max Planck Encyclopedia of International Law, Vol. VI (2012), p. 584.

͞ – Nuwan Peiris

͝

Conclusion

The case of ARA Libertad reflects the tangents on which the Tribunal has to work on for cases on Article 290(5), while simultaneously stressing the need to develop judicially manageable standards for such cases. The ITLOS Order was far too involved in the discussion relating to the immunity of a warship, rather than engaging in a discussion on the suitability, the nature, and the scope of the relief that should have been granted. But the seductive ease with which the Tribunal prescribed one-sided provisional measures in a case involving a warship in a port facility highlights the progressive nature of the Tribunal’s jurisdiction and its desire to see the evolutionary development of the law of the sea.

͛

Le gel des avoirs d’une banque centrale étrangère comme réaction décentralisée à un fait internationalement illicite : rétorsion ou contre-mesure? Emanuel Castellarin*

Abstract Freezes of assets of foreign central banks are becoming common in the practice of the United States, Canada and the European Union as a reaction to breaches of international obligations by other States, currently including Syria and Iran. This article argues that they are wrongful per se, thus they must be qualified as counter-measures and that their wrongfulness can only be excluded under the conditions drawn by Articles 49-53 of the ILC’s Draft Articles on the Responsibility of States for Internationally Wrongful Acts. Prima facie, the wrongfulness of freezes of assets of foreign central banks might stem from their inconsistency with the central banks’ customary immunity of execution or with the Articles of Agreement of the IMF. In fact, they are inconsistent with the former but not with the latter. State practice unanimously recognises immunity over the foreign central bank’s assets used to enforce the foreign State’s monetary policy, but is divided as to its extension to assets used for commercial activities. Notwithstanding the restrictive nature of the immunity, freezes of assets currently in force are not designed to comply with it, so that derogations do not cover all protected assets. On the other hand, freezes of assets of foreign central banks are consistent with monetary international law. True, they are restrictions on payments for current transactions, which are generally forbidden by Article VIII Section 2(a) of the IMF’s Articles of Agreement. Nonetheless, they benefit from a tacit authorisation by the IMF’s Executive Directors as they are not motivated by balance of payments concerns but by security reasons, and have little impact on the international monetary system.

*

Doctorant à l’École de Droit de la Sorbonne, Université Paris 1 Panthéon-Sorbonne; Diplômé de l’Académie de droit international de la Haye (2012).

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͟ – Emanuel Castellarin

͕

Introduction

Le gel des avoirs1 d’une banque centrale étrangère2 se répand dans la pratique des Etats occidentaux et de l’Union européenne comme mesure de pression aux importants effets économiques en réaction à des conduites considérées comme internationalement illicites. Sa qualification alternative de rétorsion ou de contremesure, avec toutes les conséquences qui s’en suivent, impose de s’interroger sur le caractère licite ou illicite en soi de cette mesure. Le fondement juridique du gel des avoirs peut être soit une résolution du Conseil de sécurité prise en vertu du Chapitre VII de la Charte, soit le droit international général, qui reconnaît comme licites tous les actes adoptés par un sujet dans l’exercice de ses compétences, à l’exclusion de ceux qui violent une règle internationale.3 Puisque le gel des avoirs d’une banque centrale étrangère s’inscrit toujours dans une série de mesures restrictives discriminatoires, le contexte de son utilisation a changé dans le temps. Pendant la guerre froide, le gel des avoirs des banques centrales étrangères fut sporadiquement couplé à celui des avoirs de leurs Etats. Le cas le plus connu, qui suivit les précédents concernant la Chine et Cuba, fut le gel américain des biens iraniens dans le cadre de la crise des otages de Téhéran.4 Un autre gel des avoirs

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Le gel des avoirs est une mesure prise par un Etat rendant momentanément indisponibles les avoirs d’un étranger se trouvant sur le territoire de l’Etat ou entre les mains de ses ressortissants (J. Salmon (dir.), Dictionnaire de droit international public, Bruxelles, Bruylant, 2001 p. 529). Par « avoir » on entend ici tout bien ou crédit dont une personne peut entrer en possession ou détenir le contrôle. Il n’existe pas de définition juridique universelle du concept de « banque centrale », car celle-ci est établie par chaque Etat ou par traité (comme l’est la Banque Centrale Européenne). A défaut d’une définition juridique, elle ne peut être qualifiée que par les fonctions dont elle est investie par le ou les Etats qui l’ont créée, notamment par son privilège d’émission de la monnaie nationale, par la gestion des réserves officielles de change et par le rôle de prêteur de dernier ressort sur le plan national (J. Salmon, supra note 1, p. 121). La banque centrale exerce donc principalement des fonctions différentes de celles des banques commerciales, qui lui permettent la supervision et la régulation de la politique monétaire (Ch. Proctor, Mann on the Legal Aspects of Money, Oxford, Oxford University Press, 7e éd, 2012, pp. 570-571). Son degré d’indépendance n’est soumis à aucune règle de droit international (J. Salmon, ibid., p. 121). La licéité des actes non interdits peut avoir deux fondements alternatifs : une présomption de liberté en faveur des sujets internationaux ou une lacune du système juridique international. La présomption de liberté est classique (CPJI, arrêt du 7 septembre 1927, Lotus, série A n° 10, p. 18) ; le raisonnement fondé sur une lacune de l’ordre juridique international, qui aboutit au même résultat, correspond à la métaphore de la traversée d’un carrefour autorisée non par un feu vert, mais par l’absence de feu rouge (v. l’opinion individuelle du juge Guillaume à CIJ, avis consultatif du 8 juillet 1996, Licéité de la menace ou de l’emploi d’armes nucléaires, CIJ Rec. 1996, par. 9). Executive Order 12170, 44 Fed. Reg. 65729, 14 novembre 1979; P. Juillard, Th. Flory, D. Carreau, « Chronique de droit internationale économique », AFDI, vol. 25 (1979), pp. 615-620.

Le gel des avoirs d’une banque centrale étrangère

adopté par les Etas-Unis visa la Libye5 et un gel d’avoirs réciproque fut adopté par le Royaume-Uni et par l’Argentine lors de la guerre des îles Falkland/Malouines en 1982.6 Toutes ces mesures étaient prises selon les pouvoirs d’urgence de l’exécutif dans le cadre d’un différend bilatéral. Après la fin de la guerre froide, le gel des avoirs des banques centrales est devenu un moyen de réaction décentralisée par plusieurs Etats à ce qu’ils considéraient comme un fait internationalement illicite:7 les Etats-Unis s’en sont notamment servis contre l’Iraq, le Soudan et la Birmanie/ Myanmar, qui faisaient également l’objet de sanctions du Conseil de sécurité.8 Tout en étant des mesures autonomes, ces gels des avoirs anticipaient ou prolongeaient donc des sanctions centralisées. La résolution 1973 (2011) du Conseil de sécurité concernant la Libye marque l’internationalisation de l’emploi du gel des avoirs des banques centrales.9 En 2012, les avoirs de la Banque centrale d’Iran ont été gelés par l’Union européenne10 et par les Etats-Unis.11 L’UE12 et le Canada13 ont aussi gelé les avoirs de la Banque cen5 6

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Executive Order 12544, 51 Fed. Reg. 1235, 8 janvier 1986. Control of Gold, Securities, Payments and Credits (Argentine Republic) Directions de 1982 (Statutory Instruments 1982, n° 512), 3 avril 1982; A. F. Lowenfeld, International Economic Law, Oxford, Oxford University Press, 2008, p. 893. Sur le concept de réaction décentralisée v. F. Dopagne, Les contre-mesures des organisations internationales, Louvain-la-Neuve, Anthemis, 2010; D. Alland, Justice privée et ordre juridique international, Paris, Pedone, 1994; L. A. Sicilianos, Les réactions décentralisées à l’illicite, Paris, LGDJ, 1990. Dans le cas de l’Iraq, la mesure fut adoptée le 2 août 1990, avant que le Conseil de sécurité n’autorise l’adoption de sanctions contre l’invasion du Koweït: Executive Order 12722, 55 Fed. Reg. 31803; A. F. Lowenfeld, supra note 6, p. 871. Pour limiter les conséquences de l’invasion, les avoirs du Koweït, y compris de sa banque centrale, furent aussi saisis le même jour: Executive Order 12723, 55 Fed. Reg. 31805; H. L. Clark, K. A. Matthews, « Iraq/Kwait Economic Sanctions: Trade Relations on a War Footing », The International Lawyer, vol. 25 (1991), pp. 391-414. S/RES/1973 (2011), par. 19. La résolution a été transposée dans l’UE par la décision 2011/137/PESC du Conseil du 28 février 2011, J.O. L 58, pp. 53-62 et par le règlement (UE) n° 204/2011 du Conseil du 2 mars 2011, J.O. L 58, pp. 1-13. Les avoirs de la banque centrale ont ensuite été dégelés après la résolution 2009 (S/RES/2009 (2011), par. 15-19). Décision 2012/35/PESC du Conseil du 23 janvier 2012, J.O. L 19, pp. 22-30, art. 20 ; règlement (UE) n° 267/2012 du Conseil du 23 mars 2012, J.O. L 88, p. 1-112, art. 23. National Defense Authorization Act for Fiscal Year 2012, H.R. 1540 (112th), section 1245, mise en œuvre par un amendement de la Iranian Financial Sanctions Regulations (31 CFR 561) et par l’Executive Order 13599, 77 Fed. Reg. 6659, 5 février 2012. Décision 2012/739/PESC du 29 novembre 2012, abrogeant la décision 2011/782/PESC, J.O. L 330, pp. 21-51, art. 25 ; règlement (UE) n° 36/2012, art 14, J.O. L 16, p. 1-32, modifié par le Règlement (UE) n° 168/2012 du Conseil du 27 février 2012, J.O. L 54, pp. 1-5. Règlement sur les mesures économiques spéciales visant la Syrie, DORS/2011-114, 24 mai 2011, modifié le 5 mars 2012, Gazette du Canada, vol. 146, n° 6, art. 3.

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trale de Syrie. Dans la législation américaine, les banques centrales de Syrie, de Birmanie/Myanmar et du Soudan sont toujours comprises parmi les démembrements de l’Etat frappés par des gels d’avoirs.14 Le changement induit par la résolution 1973 (2011) est particulièrement important pour l’Union européenne,15 qui avait déjà démontré dans les années 2000 être consciente de l’importance des banques centrales dans le financement d’activités internationalement illicites,16 mais n’avait jamais adopté de gel d’avoirs visant une banque centrale en tant que telle. Dans le contexte actuel, le gel des avoirs d’une banque centrale a la fonction économique d’arrêter le financement d’activités considérées comme internationalement illicites, de manière directe s’il empêche l’acquisition des biens nécessaires à cette activité, ou de manière indirecte si la réaction choisie implique l’isolement de l’Etat ciblé du système financier international. En raison de la liberté étatique quant à l’organisation de sa banque centrale, certaines banques centrales sont contrôlées directement par le gouvernement, qui les utilise aussi pour l’accomplissent de fonctions typiques des banques commerciales, notamment la participation directe au commerce extérieur de l’Etat. Le gel des avoirs a des conséquences économiques particulièrement importantes pour certains Etats exportateurs de pétrole, comme la Libye et l’Iran. En effet, leurs banques centrales accomplissent toutes les fonctions typiques des banques centrales, mais participent aussi à l’allocation des ressources provenant du commerce du pétrole.17 Les banques centrales sont ciblées en raison de leur implication directe, dirigée 14 15

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31 CFR par. 537.307 (Birmanie/Myanmar); 31 CFR par. 538.305 (Soudan); 31 CFR par. 542.201 (Syrie), mis en œuvre par l’Executive Order 13582, 76 Fed. Reg. 52209, 17 août 2011. L’Union européenne détient une compétence exclusive pour l’adoption des mesures restrictives, dont la mise en œuvre incombe aux Etats membres (art. 215 TFUE ; CJCE, 14 janvier 1997, The Queen, ex parte Centro-Com v. HM Treasury and Bank of England, aff. C-124/95). Les gouverneurs des banques centrales, ainsi que certains de leurs collaborateurs, étaient visés par des gel de fonds individuels (Règlement (CE) n° 702/2008 de la Commission du 23 juillet 2008 modifiant le règlement (CE) n° 314/2004 du Conseil concernant certaines mesures restrictives à l’égard du Zimbabwe, J.O. L 195, pp. 19-21, annexe III ; Règlement (CE) n° 353/2009 de la Commission du 28 avril 2009 modifiant le règlement (CE) n° 194/2008 du Conseil renouvelant et renforçant les mesures restrictives instituées à l’encontre de la Birmanie/du Myanmar, J.O. L 108, pp. 20-52, annexe I; Règlement (UE) n° 1284/2009 du Conseil du 22 décembre 2009 instituant certaines mesures restrictives spécifiques à l’encontre de la République de Guinée, J.O. L 346, pp. 26-38, annexe II). Il était aussi déjà commun d’imposer des restrictions à l’activité des banques commerciales de l’Etat visé, ainsi que le gel des avoirs d’autres représentants de l’Etat, même jouissant d’une immunité internationale. M. H. Adeli, « The Consequences of Sanctions on Iran’s Central Bank », Iranian Diplomacy, 4 février 2012, , consulté le 23 février 2013.

Le gel des avoirs d’une banque centrale étrangère

par le gouvernement, dans les activités considérées comme internationalement illicites.18 Le gel de leurs avoirs s’inscrit donc dans le durcissement progressif des mesures restrictives à l’égard d’un certain Etat, qu’elles soient autorisées voire imposées par le Conseil de sécurité ou non. La Libye est le seul Etat dont la banque centrale a été ciblée par une résolution du Conseil de sécurité; dans le cas de l’Iran, le gel des avoirs est une mesure autonome qui élargit les sanctions économiques du Conseil de sécurité;19 pour la Syrie, la mesure est totalement autonome.20 La question de la licéité du gel des avoirs des banques centrales étrangères en droit international est susceptible de se poser devant la CJUE et les juridictions de l’Etat qui exécute la mesure,21 ou sur la scène internationale.22 Les me18

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Par exemple, dans le cas de la Libye, le Conseil de sécurité soutenait que la banque centrale était « [s]ous le contrôle de Mouammar Kadhafi et de sa famille, et source potentielle de financement de son régime » (S/RES/1973 (2011), annexe II). Dans le cas de l’Iran, l’Union européenne considère qu’« il convient d’instituer des mesures restrictives à l’encontre de la Banque centrale d’Iran en raison de son implication dans des activités visant à contourner les sanctions infligées à l’Iran » (décision 2012/35/PESC, supra note 10, considérant 12) et les Etats-Unis que « [t]he financial sector of Iran, including the Central Bank of Iran, is designated as a primary money laundering concern ... because of the threat to government and financial institutions resulting from the illicit activities of the Government of Iran, including its pursuit of nuclear weapons, support for international terrorism, and efforts to deceive responsible financial institutions and evade sanctions » (National Defense Authorization Act for Fiscal Year 2012, supra note 11, section 1245, b)). La résolution 1929 (S/RES/1929 (2010)), ne prévoit ni cette mesure ni un embargo sur les hydrocarbures, mais dans le préambule elle note « le lien potentiel entre les recettes que l’Iran tire de son secteur de l’énergie et le financement de ses activités nucléaires posant un risque de prolifération, et ... que le matériel et les matières utilisés par les procédés chimiques de l’industrie pétrochimique sont très semblables à ceux qui sont employés dans certaines activités sensibles du cycle du combustible nucléaire ». En parallèle au gel des avoirs de la banque centrale, ont été adoptées des mesures autonomes concernant le commerce de ressources énergétiques, qui est arrivé à compter pour 80 pour cent des exportations iraniennes, et d’autres domaines commerciaux et financiers. Aucune sanction économique n’a été adoptée par le Conseil de sécurité dans les résolutions sur les Moyen Orient concernant la Syrie: S/RES/2052 (2012) ; S/RES/2059 (2012) ; S/RES/2084 (2012); S/RES/2042 (2012); S/RES/2043 (2012). Il existe des précédents sur la licéité en droit américain de l’executive order de 1979 (supra note 4): R. M. McGreevey, « The Iranian Crisis and US Law », Northwestern Journal of International Law & Business, vol. 2 (1980), 383-454, pp. 400-422. A supposer qu’elle soit tenue au respect d’une certaine règle internationale, l’Union européenne, dotée de la personnalité internationale, peut engager sa responsabilité internationale, notamment si elle « donne des directives à un État ou à une autre organisation internationale et ... exerce un contrôle dans la commission du fait internationalement illicite » (CDI, Projet d’articles sur la responsabilité des organisations internationales, art. 15, ). Si l’Union n’engage pas sa responsabilité, ses Etats membres peuvent engager la leur, notamment « si, en se prévalant du fait que l’organisation est compétente relativement à l’objet d’une de [leurs] obligations internationales ..., il[s] contourne[nt] cette obligation en amenant l’organisation à commettre un fait qui, s’il avait été commis par [eux], aurait constitué une violation de cette obligation. » (art. 61, par. 1 du Projet d’articles précité). La responsabilité de l’Union et de ses Etats membres peut aussi être conjointe. G. Arangio-Ruiz, « 3e rapport sur la responsabilité des Etats », Annuaire de la CDI, 1991, vol. II, I, p. 10. Le projet d’articles sur la responsabilité des organisations internationales « ne traitent pas des conditions de licéité des contre-mesures lorsqu’elles sont prises par une organisation internationale lésée contre un État responsable »: CDI, Projet d’articles sur la responsabilité des organisations internationales, commentaire à l’art. 22, par. 2. Pour une qualification de contre-mesure de l’ensemble des mesures restrictives de l’Union européenne contre l’Union, v. P.-E. Dupont, « Countermeasures and Collective Security: The Case of the EU Sanctions Against Iran », Journal of Conflict and Security Law, vol. 17 (2012), pp. 301-336, pp. 311-323. L’article soutient rapidement la thèse de l’illicéité du gel des avoirs de la banque centrale iranienne: p. 314. R. W. Edwards, « Extraterritorial Application of the U.S. Iranian Assets Control Regulations », AJIL, vol. 75 (1981), pp. 870-902; J. E. Hoffman, I. H. Giddy, « Lessons from the Iran Experience : National Currencies As International Money », Journal of Comparative Corporate Law and Securities Regulation, vol. 3 (1981), pp. 271-286. Les mesures restrictives autonomes par rapport aux résolutions du Conseil de sécurité ne sont pas eo ipso facto contraires à la Charte des Nations Unies, au moins si elles prolongent des résolutions du Conseil (v. E. Lagrange, P. M. Eisemann, « Article 41 », in J.-P.

Le gel des avoirs d’une banque centrale étrangère

sible incompatibilité avec l’immunité coutumière des banques centrales, organes étatiques dont la protection internationale est nécessaire à l’exercice de la souveraineté économique d’un Etat (1). En outre, en raison de leur rôle, les gels d’avoirs pourraient empêcher les banques centrales d’accomplir les fonctions nécessaires à la participation des Etats au système monétaire international, dont la stabilité est protégée par les Statuts du FMI (2).

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La compatibilité du gel des avoirs avec l’immunité d’exécution des banques centrales

Dans l’affaire des immunités juridictionnelles Allemagne c. Italie, la Cour internationale de justice («CIJ») a eu l’occasion de rappeler que la règle coutumière de l’immunité des Etats, « solidement enracinée dans la pratique contemporaine des Etats»,27 « procède du principe de l’égalité souveraine des Etats qui, ainsi que cela ressort clairement du paragraphe 1 de l’article 2 de la Charte des Nations Unies, est l’un des principes fondamentaux de l’ordre juridique international ».28 Ainsi, l’Etat jouit d’une immunité d’exécution à l’étranger,29 qui opère comme une exception en droit procédural interne, mais aussi comme une règle substantielle dont la violation est internationalement illicite. A la différence de l’immunité de juridiction, qui permet à l’Etat d’échapper à la compétence des juridictions étrangères, l’immunité d’exécution lui permet d’échapper aux mesures de contrainte ou d’exécution forcée de la part d’un autre Etat.30 Le débat sur l’immunité d’exécution a toujours été centré sur son côté juridictionnel ; or les mesures restrictives, adoptées par le pouvoir législatif et mises en œuvre par le pouvoir exécutif, sont extra-

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Cot, A. Pellet, M. Forteau (dir.), La Charte des Nations Unies, Paris, Economica, 3ème éd., 2005, pp. 1195-1242, p. 1204). Elles peuvent l’être si elles sont contraires à une résolution les interdisant ou imposant des mesures incompatibles, la primauté des obligations découlant de la Charte par rapport à d’éventuelles obligations conventionnelles contraires étant assurée par l’art. 103 de la Charte. Toutefois, ce n’est pas le cas en l’espèce. CDI, ACDI, 1980, vol. II, II, p. 144; CIJ, Immunités juridictionnelles de l’État (Allemagne c. Italie; Grèce (intervenant)), arrêt du 3 février, par. 56, . CIJ, ibid., par. 57. H. Fox, The Law of State Immunity, Oxford, Oxford University Press, 2e éd., 2008, pp. 464473; A. Dickinson, R. Lindsay, J. P. Loonam, State Immunity. Selected Materials and Commentary, Oxford, Oxford University Press, 2004; L. G. Radicati di Borzolo, La giurisdizione esecutiva e cautelare nei confronti degli Stati stranieri, Milano, Giuffrè, 1992, pp. 180-186; C. H. Schreuer, State immunity : some recent developments, Cambridge, Grotius, 1988, pp. 156-159; A. Reinisch, « European Court Practice Concerning State Immunity from Enforcement Measures », EJIL, vol. 17 (2006), 803–836, pp. 826-827; L. Gramlich, « Staatliche Immunität für Zentralbanken? », Rabels Zeitschrift, vol. 45 (1981), pp. 545-601. J. Salmon, supra note 1, pp. 559-560.

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juridictionnelles. Si le pouvoir judiciaire étatique n’est pas appelé par la banque centrale étrangère à faire primer l’immunité coutumière sur le gel des avoirs, il n’aura pas l’occasion de se prononcer sur la question. Les précédents sont très rares: la compatibilité du gel américain avec l’immunité de la banque centrale iranienne s’est notamment posée entre 1979 et 1980 en relation aux engagements internationaux des Etats-Unis envers l’Iran, qui dépendent aussi bien de la portée de l’immunité accordée par la législation nationale que de son articulation avec le traité d’amitié de 1955 entre les deux Etats.31 Dans quelle mesure peut-on appliquer aux mesures restrictives visant des banques centrales étrangères des règles conçues pour être invoquées devant les juridictions internes? On ne peut pas exclure le développement d’un droit coutumier autonome des saisies extrajuridictionnelles, mais, en l’absence d’une pratique établie en la matière, les règles sur l’immunité d’exécution juridictionnelle s’imposent par analogie : en effet, du point de vue du droit international l’Etat qui gèle les avoirs est responsable quel que soit l’organe qui adopte ou met en ouvre la mesure.32 Les Etats se partagent entre la conception absolue et la conception relative de l’immunité: alors que la première reconnaît aux biens de la structure étatique une protection inconditionnée liée à sa nature souveraine, la seconde est fondée sur la protection fonctionnelle des seuls biens que l’Etat affecte à ses activités souveraines, à l’exclusion de ses activités commerciales.33 La renonciation à une éventuelle immunité, juridiquement possible, est pratiquement inconcevable lorsque le gel concerne une partie importante des avoirs d’une banque centrale. La pratique étatique, codifiée par les textes internationaux, a reconnu aux banques centrales une immunité, dont il est raisonnable de croire qu’elle est relative (2.1). Malgré le caractère restrictif de cette immunité, les gels des avoirs actuellement en vigueur ne sont pas totalement compatibles avec elle (2.2).

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La nature relative de l’immunité

La division de la pratique étatique en matière d’immunité d’exécution des banques centrales (2.1.1) se reflète dans la difficulté d’identifier la règle coutumière, qui concerne donc seulement les avoirs affectés à des activités accomplies jure imperii (2.1.2).

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R. M. McGreevey, supra note 21. CDI, « Projet d’articles sur la responsabilité de l’Etat pour fait internationalement illicite », ACDI, 2001, vol. II, II, p. 26, art. 4. v. E. K. Bankas, The State Immunity Controversy in International Law, Berlin, Springer, 2005.

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Le partage des pratiques étatiques

Traditionnellement, la pratique étatique majoritaire en matière d’immunité ne distinguait pas les banques centrales des autres entités étatiques. Cette pratique influence encore une partie des Etats dotés d’une législation en matière d’immunités des Etats étrangers, notamment l’Australie,34 et une bonne partie des Etats où le régime des immunités est jurisprudentiel, comme l’Allemagne.35 Dans les années 1970, les législations britannique et américaine sur les immunités souveraines ont introduit des dispositions spécifiques sur l’immunité d’exécution des biens des banques centrales, qui ont clarifié définitivement que la banque centrale est un organe étatique. En effet, avant l’adoption de ces législations, certains Etats, influencés par la doctrine classique de l’immunité absolue, ne reconnaissaient l’immunité qu’aux démembrements de l’Etat dépourvus de la personnalité morale, excluant ainsi la plupart des banques centrales.36 Les tentatives de codification internationale confirment le dépassement de la vielle approche structurelle, car à l’instar des législations britannique et américaine, elles prévoient toujours une disposition spéciale sur les biens des banques centrales.37 Les banques centrales jouissent donc certainement d’une immunité coutumière, mais afin d’établir si tout gel de leurs avoirs est illicite il faut déterminer si tous les avoirs ou si seuls les avoirs affectés à une activité souveraine sont protégés par l’immunité. La pratique de certains Etats reste inspirée par la conception absolue de l’immunité, alors que d’autres sont inspirées par la conception relative et fonctionnelle : les Etats particulièrement intéressés à cause de la présence sur leur territoire d’importants centres financiers se partagent entre les deux camps.

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Foreign States Immunity Act, Act No. 196 of 1985, section 35(1). H. Fox, supra note 29, p. 472; Ch. Steven, B. Krauskopf, « Immunity of foreign central banks under German law », Journal of International Financial Markets, vol. 2 (2000), pp. 138-149. Trendtex Trading Corporation c. Central Bank of Nigeria, All England Law Report 1977, vol. 1, pp. 881-882. La doctrine avait suggéré que les législations britannique et américaine, qui ont fait ce choix pour la première foi, comprenaient une disposition spéciale sur les banques non pour se conformer à une opinio juris, mais comme conséquence d’un choix politique favorable à la permanence des banques centrales étrangères sur les places financières de Londres et New York (W. Blair, « The Legal Status of Central Bank Investments under English Law », Cambridge Law Journal, vol. 57 (1998), pp. 374-390, p. 378; J. R. Crawford, « International Law and Foreign Sovereigns: Distinguishing Immune Transactions », British Yearbook of International Law, vol. 54 (1983), pp. 75-118, p. 118). Cette hypothèse a été avancée aussi pour la législation chinoise de 2005, inspirée par les nécessités de Hong Kong et par le souhait de favoriser aussi Macao (L. Zhu, « State Immunity from Measures of Constraint for the Property of Foreign Central Banks : the Chinese Perspective », Chinese Journal of International Law, vol. 6 (2007), pp. 67-81).

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La législation britannique, imitée par certains Etats de tradition de common law,38 accorde aux banques centrales étrangères une immunité d’exécution large, dont la doctrine considère qu’elle interdit la saisie des avoirs indépendamment de leur affectation.39 La République Populaire de Chine, fidèle à sa conception absolue de l’immunité, considère aussi l’immunité d’exécution des banques centrales étrangères comme indépendante de l’affectation des biens.40 En l’absence de renonciation à l’immunité, qu’elles permettent, ces législations ont l’avantage de protéger le consentement de la banque centrale à la saisie de ses biens, car elles empêchent que l’Etat qui l’opère distingue lui-même les actes jure imperii des actes jure gestionis. En France, malgré la nature principalement jurisprudentielle du droit des immunités, le législateur a consacré dans l’article L. 153-1, al. 1er du Code monétaire et financier (‘CMF’) une approche particulièrement protectrice des biens des banques centrales: « [n]e peuvent être saisis les biens de toute nature, notamment les avoirs de réserves de change, que les banques centrales ou les autorités monétaires étrangères détiennent ou gèrent pour leur compte ou celui de l’Etat ou des Etats étrangers dont elles relèvent », avec la seule exception, prévue à l’alinéa 2, des biens faisant partie « d’un patrimoine qu[e la banque centrale] affecte à une activité principale relevant du droit privé ». 41 Dans la pratique d’autres Etats, l’immunité des biens des banques centrales est relative. Ainsi, selon le Foreign Sovereign Immunities Act américain de 1976, the property of a foreign state shall be immune from attachment and from execution, if … (1) the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execu-

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41

Singapore, Sovereign Immunity Act de 1979, art. 16 par. 4; Pakistan, State Immunity Ordinance de 1981, art. 15, par. 4; Afrique du Sud, Foreign States Immunities Act de 1981, art. 15, par. 3. State Immunity Act de 1978, section 14(4): « Property of a State’s central bank or other monetary authority shall not be regarded ... as in use or intended for use for commercial purposes; and where any such bank or authority is a separate entity [procedural privileges] shall apply to it as if references to a State were references to the bank or authority. »; R. Higgins, « Execution of State Property: United Kingdom Practice », Netherlands Yearbook of International Law, vol. 10 (1979), pp. 35-54, p. 51; H. Fox, « Enforcement Jurisdiction, Foreign State Property and Diplomatic Immunity », ICLQ, vol. 34 (1985), pp. 115-141, p. 137. Loi sur l’immunité juridictionnelle d’exécution des biens des banques centrales étrangères de 2005, art.1, reproduit in L. Zhu, supra note 37: la législation chinoise démontre que, si l’Etat du for se refuse de distinguer les deux catégories de biens, la renonciation à l’immunité par l’Etat protégé joue un rôle fondamental. Cet alinéa s’applique seulement si le demandeur dispose d’un titre exécutoire, introduisant ainsi une différence de régime entre la saisie conservatoire et la saisie-exécution, qui caractérise aussi la jurisprudence américaine (H. Fox, supra note 29, p. 471).

Le gel des avoirs d’une banque centrale étrangère tion, or from execution, notwithstanding any withdrawal of the waiver which the bank, authority or government may purport to effect except in accordance with the terms of the waiver. 42

L’expression “for its own account“ a été interprété par la doctrine et les juridictions américaines comme se référant aux seuls biens affectés à des activités jure imperii.43 Le Canada a adopté une législation similaire, subordonnant clairement l’immunité à l’affectation des biens à une activité non commerciale. 44 Plusieurs Etats de tradition romano-germanique appliquent pour les biens des banques centrales le critère de l’affectation, comme pour les biens des autres organes étatiques. Ainsi, les biens affectés à une activité souveraine ne peuvent pas être saisis,45 mais ceux affectés à une activité commerciale peuvent l’être.46 Par activité jure imperii il faut entendre, dans le cas des banques centrales, leurs activités typiques de gestion directe de la politique monétaire, à l’exclusion de celles qui sont normalement accomplies par des banques commerciales, comme le financement et la distribution des bénéfices d’activités commerciales.47 Aussi bien la conception absolue que la conception relative de l’immunité comportent un risque d’abus, c’est-à-dire d’utilisation de droits détournée de leur but et dommageable à d’autres sujets.48 L’Etat qui bénéficie d’une immunité absolue peut l’utiliser pour fausser la concurrence avec des opérateurs commerciaux privés; l’Etat qui ne reconnaît qu’une immunité relative peut qualifier d’affectés à des activités commerciales des biens que d’autres considéreraient comme affectés à des activités souveraines. En effet, un problème crucial est celui de la détermination de l’affectation des biens à une certaine activité: elle est facilitée par l’appartenance, rare en pratique, des biens à un patrimoine distinct affecté à une 42 43

44

45 46

47 48

USC 28 par. 1611 lett. b. E. T. Patrikis, « Central Bank Property : Immunity from attachment in the United States », University of Illinois Law Review, 1982, p. 265-287, p. 277; Banque Campafina c. Banco de Guatemala, 599 F Supp. 329 (SDNY 1984), ILR, vol. 92, pp. 399-405, p. 402. « Sous réserve [de renonciation], sont insaisissables les biens qu’une banque centrale ou une autorité monétaire étrangères détiennent pour leur propre compte et qui ne sont pas utilisés ou destinés à être utilisés dans le cadre d’une activité commerciale » (loi sur l’immunité des États, L.R.C. (1985), ch. S-18), section 12 (4). P. ex. Cass. civ. 1ère, 3 novembre 1952, Epoux Martin c. Banque d’Espagne ; Cass. civ. 1re, 19 mai 1976, Zavicha Blagojevic c. Banque du Japon. Landgericht Frankfurt, Y.M.N. Establishment c. Central Bank of Nigeria, 2 décembre 1975, ILR, vol. 65, p. 131 et seq., p. 137; Cour d’appel de Brussels, Leica AG c. Central Bank of Iraq et Etat irakien, 15 février 2000, Journal des tribunaux (Belgique), n° 6 (2001); Tribunal fédéral suisse, Banque centrale de la République de Turquie c. Weston Compagnie de Finance et d’Investissement SA, 15 novembre 1978, ILR, vol. 65, p. 417 et seq. Supra note 2. v. A. Ch. Kiss, L’abus de droit en droit international, Paris, LGDJ, 1953.

͟ – Emanuel Castellarin

certaine activité, mais elle peut être très délicate si tous les biens de la banque centrale font partie d’un même patrimoine affecte à la fois à des activités jure gestionis et à des activités jure imperii, comme c’est le cas normalement.49 Dans cette hypothèse, l’affectation des biens à l’une ou à l’autre n’est que potentielle: les législations et les jurisprudences défendant l’immunité relative ne peuvent qu’introduire une présomption d’affectation, faisant peser sur la partie qui soutient le contraire la charge de la preuve. Par exemple, la jurisprudence suisse50 ne reconnaît pas d’immunité à des comptes de banques centrales étrangères à défaut de preuve qu’ils sont utilisés pour des activités souveraines ; la jurisprudence française antérieure à l’introduction du code L.153-1 du CMF en 2005 retenait le même raisonnement.51 Au contraire, une juridiction fédérale américaine a renoncé à saisir certains fonds privés pourtant saisissables détenus par une banque centrale étrangère car ils étaient impossibles à distinguer de ceux utilisés pour des activités souveraines.52 Un exemple de la difficulté de l’établissement de la présomption est fourni par la jurisprudence allemande : alors que dans une affaire un Landgericht a conclu que l’éventualité de l’affectation des biens a une activité souveraine ne suffisait pas à activer l’immunité,53 dans une autre affaire des bénéfices du commerce de pétrole ont été considérés par le Bundesverfassungsgericht comme protégés par l’immunité une fois entrés dans le compte d’une banque centrale affectée à des activités souveraines, indépendamment de leur utilisation finale.54 En effet, cette difficulté est particulièrement aiguë lorsque le gel des comptes bancaires de la banque centrale présente un intérêt réel car les bénéfices du commerce des hydrocarbures peuvent y être versés, comme dans le cas de l’Iran.

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L’existence d’une immunité coutumière pour les seuls avoirs affectés à une activité souveraine

Comme la pratique des Etats, les tentatives de codification en la matière ont aussi adopté des points de vue différents: l’Institut de Droit International («IDI») et l’International Law Association («ILA») ont défendu l’immunité relative, alors

49 50 51 52 53 54

J. R. Crawford, « Execution of Judgments and Foreign Sovereign Immunity, » AJIL, vol. 75 (1981), 820-869, 865. Tribunal fédéral suisse, République socialiste du peuple arabe de Lybie-Jamahiriya c. Actimon SA, 24 Avril 1985, ILR vol. 82, p. 30 et seq., p. 35. Cass. civ. 1ère, 11 février 1969, Englander c. Statni Banka Ceskoslovenska. Weston Compagnie de Finance et d’Investissement v. La Republica del Ecuador, 823 F Supp. 1106 (SDNY 1993). Supra note 46. Bundesverfassungsgericht, National Iranian Oil Company, Recueil BVerfGE, aff. 678, 679, 680, 681, 683/81, vol. 64, p. 1.

Le gel des avoirs d’une banque centrale étrangère

que la CDI a choisi une formulation plus générale. La résolution de l’IDI sur les aspects récents de l’immunité de juridiction et d’exécution des Etats, adoptée à Bâle en 1991 prévoit que « les catégories suivantes de biens d’un Etat bénéficient de l’immunité d’exécution ... c) les biens de la Banque centrale ou de l’autorité monétaire de l’Etat utilisés pour leurs besoins propres ou dont l’utilisation à ces fins est prévue ».55 Le projet d’articles de l’ILA révisé à Buenos Aires en 1994 est également restrictif : « Attachment or execution shall not be permetted, if … 3. The property is that of a State central bank held by it for central banking purposes ».56 La Convention des Nations Unies sur l’immunité juridictionnelle des Etats et de leurs biens du 2 décembre 2004,57 issue d’un projet d’articles de la CDI, est considérée comme la tentative de codification la plus significative en la matière. Selon son article 19 (Immunité des États à l’égard des mesures de contrainte postérieures au jugement), [a]ucune mesure de contrainte postérieure au jugement, telle que saisie, saisiearrêt ou saisie-exécution, ne peut être prise contre des biens d’un État en relation avec une procédure intentée devant un tribunal d’un autre État excepté si et dans la mesure où : … c) Il a été établi que les biens sont spécifiquement utilisés ou destinés à être utilisés par l’État autrement qu’à des fins de service public non commerciales et sont situés sur le territoire de l’État du for, à condition que les mesures de contrainte postérieures au jugement ne portent que sur des biens qui ont un lien avec l’entité contre laquelle la procédure a été intentée.

A ce propos, l’article 21 (Catégories spécifiques de biens) prévoit explicitement au par. 1 que « [l]es catégories de biens d’État ci-après ne sont notamment pas considérées comme des biens spécifiquement utilisés ou destinés à être utilisés par l’État autrement qu’à des fins de service public non commerciales au sens des dispositions de l’alinéa c de l’article 19 : … c) Les biens de la banque centrale ou d’une autre autorité monétaire de l’État ». Le sens de cet article est clair: il n’est pas raisonnable d’interpréter cette disposition comme comprenant implicitement une exception pour les biens utilisés pour des activités commerciales. L’exclusion expresse par la CDI, faute d’un appui suffisant, des mots proposés par le Rapporteur spécial « et utilisés à des fins monétaires » à la fin du texte58 confirme le sens ordinaire des termes. La portée de cette disposition est clarifiée par les 55 56 57 58

Résolution de l’IDI, Les aspects récents de l’immunité de juridiction et d’exécution des Etats, session de Bâle, 1991, art. 4, par. 2 lett. c. ILA, Revised Draft Articles for a Convention on State Immunity, Buenos Aires, 1994, art. VIII lett. C.3, 4. G. Hafner, L. Lange, « La Convention des Nations Unies sur l’immunité juridictionnelle des Etats et de leurs biens », AFDI, vol. 50 (2004), pp. 45-76. CDI, « Projet d’articles sur les immunités juridictionnelles des Etats et de leurs biens », ACDI, 1991, vol. II, II, p. 62, Commentaire à l’art 19 par. 1, par. 5.

͟ – Emanuel Castellarin

commentaires de la CDI à son projet d’articles. A priori, on pourrait se demander si la présomption qu’elle institue est réfragable ou irréfragable: le terme « considérées » pourrait indiquer tant une orientation pour l’interprète qu’une véritable fiction juridique. En d’autres termes, le juge de l’exécution, ou par analogie l’autorité chargée du gel des avoirs, doit-il se contenter de considérer tous les biens de la banque centrale comme utilisés seulement à des fins de service public non commerciales ou peut-il se référer à l’utilisation réelle des biens, considérant cette disposition seulement comme un cas de figure de la maxime in dubio mitius ? La CDI précise que cette disposition « vise à protéger certaines catégories de biens, en les excluant de toute présomption de consentement à des mesures de contrainte »59 et entend réagir à la jurisprudence des juridictions nationales permettant la saisie des biens des banques centrales étrangères.60 La valeur de cet article est pourtant douteuse : reflète-t-il le droit coutumier? La Convention n’est pas encore en vigueur, faute d’un nombre de ratifications suffisantes61 et l’approche délibérément «militante» du projet d’articles de la CDI, qui réagit aux jurisprudences nationales permettant la saisie, fait état d’une intention de développement du droit international plutôt que de sa codification. En effet, la codification internationale ne peut pas recomposer une pratique étatique divisée sur la portée de l’immunité des biens des banques centrales. Dans ces conditions, le droit coutumier se forme a minima, mais, devant présumer la limitation d’une souveraineté, s’agit-il de celle de l’Etat qui adopte la saisie ou de celle de l’Etat dont les biens sont saisis ? La règle de l’immunité d’exécution peut opérer sur certains biens de la banque centrale mais pas sur d’autres sans qu’il existe des doutes sur son contenu, qui est l’interdiction de rendre indisponibles les biens.62 Il serait déraisonnable de conclure qu’aucun bien des banques centrales étrangères n’est protégé par une immunité: la division de la pratique étatique sur les biens affectés à des activités commerciales ne remet pas en question l’existence de l’immunité pour les biens considérés par l’autorité qui décide la saisie comme utilisés pour des activités souveraines. Le droit coutumier positif contient donc uniquement une immunité relative. Le gel des avoirs des banques centrales est donc licite si les avoirs sont affectés à une activité jure gestionis, comme le commerce d’hydrocarbures. Le but essentiel de la mesure peut donc être atteint de manière licite en droit international, à

59 60 61 62

Ibid., p. 61, par. 1. Ibid., par. 2. La Convention été signée par 28 Etats, et ratifiée par 13 sur les 30 nécessaires pour l’entrée en vigueur (art. 30). Cette situation se distingue de celle où le contenu même de la règle est défini par une pratique étatique non uniforme, par exemple celle du droit d’asile en Amérique latine dans l’affaire Haya de la Torre (CIJ, Droit d’asile (Colombie c. Pérou), arrêt du 20 novembre 1950, Recueil 1950, p. 277).

Le gel des avoirs d’une banque centrale étrangère

condition de respecter l’immunité des avoirs affectés à des activités jure imperii ; or ce n’est pas le cas des gels des avoirs actuellement en vigueur.

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L’incompatibilité partielle des gels des avoirs en vigueur avec l’immunité

Malgré les dérogations prévues (2.2.1), les gels d’avoirs révèlent une inspiration qui les empêche de respecter l’immunité des avoirs affectés à des activités souveraines (2.2.2).

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Des dérogations indépendantes de l’affectation des avoirs

S’ils s’étendaient à tous les avoirs des banques centrales ciblées, les gels des avoirs des banques centrales étrangères en vigueur seraient clairement incompatibles avec l’immunité de certains d’entre eux. Or ils prévoient toujours des dérogations octroyées par l’exécutif au cas par cas, qui toutefois ne couvrent pas tous les avoirs protégés par l’immunité. En effet, l’immunité relative est inspirée par la nécessite de satisfaire les droits des créditeurs en traitant de la même manière tous les opérateurs économiques qui accomplissent le même type d’activité commerciale.63 Or la finalité du gel des avoirs des banques centrales n’est pas la régulation des phénomènes économiques, mais l’influence sur la conduite d’un autre Etat. Les dérogations ne sont pas dictées par le respect du souverain étranger mais par des préoccupations économiques et humanitaires en faveur de la population, comme le démontre le Conseil de l’Union européenne pour l’Iran : compte tenu de l’implication possible de cette dernière dans le financement du commerce extérieur, des dérogations sont jugées nécessaires afin que cette mesure financière ciblée n’empêche pas les opérations commerciales, y compris les contrats portant sur des vivres, des soins de santé, des équipements médicaux ou répondant à des besoins humanitaires.64

A cause de cette différente inspiration, certains avoirs affectes à des activités souveraines peuvent faire l’objet d’un gel, qui est alors incompatible avec l’immunité qui les protège.

63

64

I. Pingel-Lenuzza, Les immunités des Etats en droit international, Bruxelles, Bruylant, 1998, pp. 46-53. Pour un plaidoyer récent pour la nécessité d’élargir les conséquences de cette ratio legis, concernant les comptes bancaires des ambassades mais valable aussi pour ceux des banques centrales étrangères, v. C. Ryngaert, « Embassy Bank Accounts and State Immunity from Execution: Doing Justice to the Financial Interests of Creditors », Leiden Journal of International law, vol. 26 (2013), pp. 73-88. Règlement 267/2012, supra note 10, considérant 12.

͟ – Emanuel Castellarin

Aux Etats-Unis les dérogations aux gels des avoirs des banques centrales sont régies en général par la partie 501 du chapitre 31 du Code of Federal Regulations, qui est peu adapté à éviter la violation de l’immunité protégeant les avoirs affectés à des activités souveraines. Des règles plus détaillées concernent les mesures restrictives concernant l’Iran, au terme desquelles elles shall apply with respect to a foreign financial institution owned or controlled by the government of a foreign country, including a central bank of a foreign country, only insofar as it engages in a financial transaction for the sale or purchase of petroleum or petroleum products to or from Iran conducted or facilitated on or after that date that is 180 days after the date of the enactment of this Act.65

De manière similaire, les décisions du Conseil n’interdisent pas « un paiement par une institution financière non désignée dû au titre d’un contrat commercial spécifique, dès lors que l’État membre concerné a établi, au cas par cas, que le paiement n’est pas reçu directement ou indirectement par une personne ou entité visée [par d’autres mesures] », les transferts ayant « pour objet de fournir aux institutions financières relevant de la juridiction des États membres des liquidités en vue du financement d’échanges commerciaux, dès lors que le transfert a été autorisé par l’État membre concerné » et les « paiements à la Banque centrale d’Iran versés en exécution d’obligations [non relatives aux biens et services soumis à embargo] ».66 Les conditions de fond et de procédure de ces dérogations, qui incombent aux Etats membres, sont précisées par les règlements.67

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La protection insuffisante des avoirs couverts par l’immunité

Puisque les avoirs qui font l’objet d’une dérogation sont identifiés seulement par le secteur commercial de provenance ou d’affectation, aucune référence n’est faite à leur affectation à des activités jure imperii. Les Etats-Unis et l’Union européenne n’ont donc pas pris en compte l’immunité d’exécution des banques centrales étrangères, alors que le Conseil de l’Union européenne a prévu des dérogations pour les avoirs nécessaires aux activités officielles de missions diplomatiques ou consulaires ou d’organisations internationales.68 Les dérogations aux gels des avoirs peuvent couvrir aussi bien des transferts vers la banque centrale 65 66 67

68

National Defense Authorization Act for Fiscal Year 2012, supra note 11, section 1245, lett. d, par. 3. Décision 2012/35/PESC, supra note 10, art. 21, par. 7-9. Règlement 267/2012 (Iran), supra note 10, art. 28 ; règlement 36/2012 (Syrie), supra note 12, art. 21 bis, introduit par le Règlement (UE) n° 867/2012 du Conseil du 24 septembre 2012, J.O. L 257, pp. 1-2. Règlement 267/2012 (Iran), supra note 10, art. 27; règlement 36/2012 (Syrie), supra note 12, art. 16.

Le gel des avoirs d’une banque centrale étrangère

que des paiements effectués par la banque centrale. Parmi les avoirs qui entrent dans le patrimoine de la banque centrale, certains peuvent être débloqués en raison de leur provenance, non liée à un secteur commercial ciblé par les mesures restrictives. La banque centrale peut affecter ces avoirs à une activité jure imperii ou jure gestionis, pourvu que cette dernière ne soit pas ciblée par les mesures restrictives. Les autres avoirs, provenant d’un secteur ciblé par les mesures restrictives, sont gelés sans égard à leur affectation future.69 Le gel sélectif des avoirs ne poserait pas problème si leur déblocage était possible pour financer toutes les activités jure imperii de la banque centrale. Or le déblocage des avoirs est possible seulement pour financer des activités commerciales, par ailleurs non ciblées par les mesures restrictives. Les transferts ainsi autorisés sont possibles seulement au sein de l’Union européenne, à l’exclusion donc du transfert vers un Etat tiers et du rapatriement des avoirs. De plus, les dérogations sont à interpréter de manière restrictive pour éviter tout contournement.70 Le rapatriement d’avoirs, même à des personnes non ciblées par les mesures restrictives, entraîne en tout cas un risque de contournement : il est en effet impossible de connaître l’utilisation finale des avoirs rapatriés. Il résulte donc que la banque centrale peut utiliser ses avoirs seulement pour des activités souveraines (et pour les activités commerciales non interdites) dans l’Union européenne, mais non dans son Etat d’origine. En d’autres termes, la nature sectorielle des dérogations suit une logique indépendante de celle de l’immunité d’exécution, qu’elles ne permettent pas de respecter dans tous les cas. La compatibilité avec l’immunité ne peut être assurée que par une dérogation générale concernant les avoirs affectés aux activités typiques de la banque centrale. Une catégorie de dérogations prévue par le Canada dans le cas de la Syrie semble inspirée par l’intention de concilier le gel des avoirs avec le droit international, puisqu’elle concerne les avoirs affectés à « toute activité exercée en application d’un accord ou d’un arrangement conclu entre le Canada et la Syrie ».71 Cette disposition ne se réfère pourtant pas au droit coutumier et risque aussi de ne pas mettre l’exécutif dans la condition de toujours respecter l’immunité.

69

70

71

Lors qu’il est certain que des biens sont affectés à la satisfaction d’une demande judiciaire ou arbitrale, il est pourtant logique et compatible avec l’immunité de les débloquer (Règlement 267/2012 (Iran), supra note 10, art. 24, lett. a). En particulier, le Conseil de l’UE prévoit dans le cas de l’Iran: « Eu égard aux tentatives de l’Iran d’utiliser son système financier pour contourner les sanctions, il est nécessaire d’exiger une vigilance accrue en ce qui concerne les activités des établissements financiers et de crédit iraniens afin d’empêcher le contournement du présent règlement, notamment le gel des avoirs de la Banque centrale d’Iran. » (Règlement 267/2012, supra note 10, considérant 17). Règlement sur les mesures économiques spéciales visant la Syrie, supra note 13, art. 3.2, lett. a.

͟ – Emanuel Castellarin

Toutes les formulations des dérogations démontrent donc que l’immunité coutumière n’a pas été prise en compte en tant que telle dans la conception des gels des avoirs. Puisque certains avoirs protégés par l’immunité font l’objet du gel, celui-ci est partiellement illicite en droit international et engage la responsabilité de l’Etat ou de l’Union européenne. La responsabilité est engagée indépendamment de la mise en œuvre effective du gel des avoirs, dès lors que la législation le prévoyant est seulement suspendue ou non appliquée mais produit encore des effets.72 En outre, malgré les dérogations, les gels des avoirs des banques centrales d’Etats membres du Fonds monétaire international semblent prima facie incompatibles avec les droits que ces Etats tirent des Statuts du Fonds.

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La compatibilité du gel des avoirs avec le droit du Fonds monétaire international

Le droit monétaire international protège la stabilité monétaire en interdisant certaines mesures restrictives des échanges internationaux. Par exemple, les Iranian Assets Control Regulations américaines de 1979 ont suscité plusieurs interrogations quant à leur nature présumée de « réglementation du contrôle des changes » au sens de l’art VIII section 2(b) des Statuts du FMI et à leur invocabilité devant les juridictions étrangères.73 Le gel des avoirs des banques centrales étrangères soulève à cet égard les mêmes questions que les gels d’avoirs individuels et les embargos. Toutefois, quoiqu’assorti de dérogations, il peut avoir des conséquences monétaires quantitativement plus importantes.74 Puisque son intérêt économique est de limiter l’activité commerciale de l’Etat visé dans des domaines stratégiques, il est conçu pour avoir un impact sur la balance des paiements et 72 73

74

Pour une hypothèque judiciaire suspendue mais non annulée : CIJ, supra note 27, par. 112. N. A. Simon, « The Iranian Assets Control Regulations and the International Monetary Fund Agreement: Are the Regulations “Exchange Control Regulations”? », Boston College International and Comparative Law Review, vol. 4 (1981), pp. 203-223; W. F. Ebke, « Article VII, Section 2(b), International Monetary Cooperation, and the Courts », The International Lawyer, vol. 23 (1989), pp. 677-710. Malgré ses conséquences monétaires, l’embargo concernant l’or associé au gel des avoir des banques centrales (pour l’Iran, règlement 267/2012, supra note 10, art. 15 ; pour la Syrie, Décision 2012/739/PESC, supra note 12, art. 11) ne soulève pourtant pas de problèmes spécifiques quant au droit du FMI. Les Statuts ne comprennent plus, depuis le second amendement, aucune référence au commerce de ce métal (J. Gold, Legal and institutional aspects of the international monetary system: selected essays, Washington, FMI, vol. II, p 723-777). Il en va de même pour l’embargo sur les billets de banque (règlement 267/2012, supra note 10, art. 16; règlement 36/2012, supra note 12, art. 11) qui sont aussi des biens ordinaires dépourvus de valeur légale, certes nécessaires à l’activité de la banque centrale mais non jouissant d’un régime particulier en droit international.

Le gel des avoirs d’une banque centrale étrangère

donc sur la stabilité de la monnaie de l’Etat visé.75 En effet, même quand le gel des avoirs permet à la banque centrale visée de poursuivre ses activités souveraines, la balance des paiements de son Etat en est affectée, car elle évolue selon les échanges commerciaux avec l’étranger indépendamment de la qualité publique ou privée des opérateurs économiques. L’Etat s’approvisionne donc plus difficilement en devises étrangères, qui lui sont nécessaires pour garantir la convertibilité de sa monnaie. Empêchant l’accomplissement des opérations commerciales gérées par la banque centrale, le gel de ses avoirs est prima facie incompatible avec l’article VIII section 2(a) des Statuts du FMI (3.1). Toutefois, cette illicéité n’est que théorique, car la pratique de l’organisation permet de réputer licites les gels des avoirs adoptés par un Etat non pour équilibrer sa balance des paiements, mais pour des raisons de sécurité (3.2).

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Le gel des avoirs comme restriction aux paiements relatifs à des transactions courantes

Le gel des avoirs affecte directement les opérations de commerce extérieur (3.1.1) en les restreignant : il est donc plus qu’un simple contrôle sur leurs modalités (3.1.2).

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Le gel des avoirs comme mesure affectant des paiements pour transactions courantes

Selon l’article VIII section 2(a) des Statuts du FMI [s]ous réserve des dispositions de la section 3, paragraphe b), de l’article VII et de la section 2 de l’article XIV, aucun État membre n’impose, sans l’approbation du 75

Il est difficile d’évaluer exactement l’impact monétaire du gel des avoirs par rapport aux autres mesures restrictives et à d’autres facteurs, mais les données économiques disponibles pour l’Iran fournissent un exemple de ce retentissement. Sans doute à cause de la progressive limitation de l’approvisionnement de devises étrangères, la devise iranienne, le rial, a subi une chute spectaculaire de son cours de marché. Le taux de change officiel fixé par le gouvernement iranien à environ 12000 rial pour un dollar est en effet réservé à certains opérateurs économiques ; le gouvernement a introduit au profit des importateurs un taux fixe plus avantageux que le taux de marché pratiqué par les dealers de rue, qui peut atteindre 40000 rials pour un dollar (R. Gladstone, « A New Sign of Distress as Iran’s Currency falls », New York Times, 1er octobre 2012 ; Le Monde, « Le rial glisse et savonne la planche au gouvernement iranien », 2 octobre 2012). Ces pratiques sont surveillées par le FMI en tant que possibles taux de change multiples, interdits par l’art. VIII section 3 des Statuts, dont l’Iran a accepté les obligations en 2004. L’Iran a aussi accepté d’assurer la convertibilité officielle de sa monnaie selon l’art. VIII section 4.

͟ – Emanuel Castellarin Fonds, de restrictions à la réalisation des paiements et transferts afférents à des transactions internationales courantes.

Cet article, qui n’a pas été modifié lors des amendements aux Statuts et conserve une place centrale dans le système monétaire international,76 protège la convertibilité dite “de marché” d’une devise, que l’on distingue de la convertibilité “officielle” opérant entre banques centrales. Tous les Etats ayant adopté jusqu’à présent des gels de avoirs de banques centrales étrangères ont accepté les obligations de l’article VIII.77 Le lien de cette disposition avec les objectifs du FMI est étroit, car elle permet d’« [a]ider à établir un système multilatéral de règlement des transactions courantes entre les États membres » (iv), d’« abréger la durée et réduire l’ampleur des déséquilibres des balances des paiements des États membres » (vi) et par là de « [p]romouvoir la stabilité des changes » (iii) et de « [f] aciliter l’expansion et l’accroissement harmonieux du commerce international » (ii). Les « paiements pour transactions courantes » sont définis par l’art XXX (d) des Statuts : Par paiements pour transactions courantes, il faut entendre les paiements qui n’ont pas pour objet le transfert de capitaux; ils comprennent notamment : 1) tous les paiements dus au titre du commerce extérieur et des autres opérations courantes, y compris les services, ainsi que les facilités normales à court terme de banque et de crédit ; 2) les paiements dus au titre d’intérêts sur des prêts ou de revenus nets d’autres investissements ; 3) les paiements d’un montant modéré pour l’amortissement d’emprunts ou la dépréciation d’investissements directs ; et 4) les envois de fonds d’un montant modéré pour charges familiales.

Cette définition, indépendante de la qualité officielle de celui qui accomplit ou reçoit le paiement, délimite la notion par rapport à celle de transfert de capitaux, soumis au régime différent et plus permissif de l’article VI section 3 des Statuts, qui en permet le contrôle, même de manière discriminatoire.78 En pratique, le 76

77

78

J. Gold, supra note 74, p. 171 et seq.; D. Carreau, Le Fonds Monétaire International, Paris, Pedone, 2009, p. 89 et seq.; R. Geiger, « Legal Aspects of Convertibility », Georgia Journal of International and Comparative Law, vol. 4 (1974), pp. 74-92. Les Etats n’ayant pas accepté les obligations de l’art. VIII sont soumis au régime transitoire de l’art. XIV par. 2, selon lequel ils peuvent maintenir des restrictions aux paiements et transferts afférents à des transactions internationales courantes. La section 3, paragraphe b) de l’art. VII, concernant les monnaies rares, ne s’applique pas non plus aux gels d’avoirs actuellement en vigueur, qui ont pour objet des devises convertibles. Décision n° 541-(56/39), 25 juillet 1956 (FMI, Selected decisions, p. 510).

Le gel des avoirs d’une banque centrale étrangère

contrôle des transferts de capitaux accompagne toujours le gel des avoirs des banques centrales dans le cadre d’un ensemble de mesures restrictives ciblant au moins une partie de l’économie d’un Etat.

͗.͕.͖

Le gel des avoirs comme restriction

L’article VIII section 2(a) interdit les restrictions aux paiements pour transactions courantes, qu’ils soient faits vers l’étranger ou sur le territoire d’un Etat membre du FMI à un étranger souhaitant rapatrier les bénéfices ou les réutiliser dans un autre Etat membre du FMI. Selon le Conseil des gouverneurs [t]he guiding principle in ascertaining whether a measure is a restriction on payments and transfers for current transactions under Article VIII, Section 2, is whether it involves a direct governmental limitation on the availability or use of exchange as such.79

L’inspiration historique de cette définition de restriction est liée aux mesures de portée générale, alors que le gel des avoirs des banques centrales, comme celui de personnes privées, n’opère qu’une restriction ad hoc; toutefois, la définition du Conseil des gouverneurs est suffisamment générale pour les inclure. La restriction se distingue notamment du simple contrôle, qui consiste à établir les modalités du paiement sans l’interdire de manière générale. Ainsi, la soumission des paiements à des licences qui sont toujours octroyées80 ou à l’utilisation de certaines devises n’est pas considérée comme une restriction aux paiements. En revanche, l’interdiction faite à un opérateur économique de disposer de ses avoirs ne se borne pas à réguler les paiements, mais les empêche totalement. Ainsi, le gel des avoirs que les banques centrales utilisent pour des transactions courantes, mis en ouvre par l’exécutif et limitant la disponibilité de leurs avoirs, constitue une restriction. La définition du Conseil des gouverneurs se concentre sur la disponibilité des devises, mais est a fortiori remplie si tout type d’avoir est rendu indisponible. Les dérogations réduisent l’effet économique les gels d’avoirs, mais ne suffisent pas à rendre cette mesure un simple contrôle, car elles ne sont pas toujours octroyées par l’exécutif. Prima facie, donc, le gel des avoirs des banques centrales exerçant des activités commerciales est contraire à l’article VIII section 2(a) des Statuts du FMI ; notamment, le fait qu’une restriction aux paiements pour transactions courantes a été adoptée pour des raisons de sécurité nationale ou internationale ne la justifie pas.

79 80

Décision n° 1034-(60/27), 1er juin 1960, par. 1 (FMI, Selected decisions, p. 562). J. Gold., supra note 74, p. 172.

͟ – Emanuel Castellarin

Toutefois, la restriction est interdite seulement lorsqu’elle est accomplie « sans l’approbation du Fonds », qui est accordée de manière relativement large.

͗.͖

La licéité du gel des avoirs en raison de sa motivation

Le Fonds approuve tacitement les gels d’avoirs adoptés pour des raisons de sécurité (3.2.1), d’autant plus qu’ils ont des effets économiques limités sur le système monétaire international (3.2.2).

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L’approbation tacite des restrictions aux paiements adoptés pour des raisons de sécurité

Généralement, les restrictions aux paiements sont utilisées, comme les contrôles de change et les restrictions aux transferts de capitaux, pour des raisons de balance commerciale. Du point de vue économique, l’effet d’une restriction aux paiements est indépendant de sa motivation, mais celle-ci se reflète sur la portée de la restriction. L’appréciation par le FMI de la licéité des restrictions adoptées uniquement pour des raisons de sécurité nationale ou internationale soulève les problèmes typiques des mesures restrictives ayant un contenu financier et une finalité politique: d’un côté, le Fonds est compétent en raison de la nature et des effets de la mesure ; de l’autre côté, il n’est pas le forum le plus adéquat pour en apprécier l’opportunité et les effets politiques.81 A l’égard des restrictions prises pour des raisons de sécurité la compétence du FMI doit donc s’exercer, mais d’une manière différente que pour les restrictions les plus communes, liées à la balance des paiements. Le Conseil des gouverneurs, conscient de cette difficulté, a poursuivi dès les premières années d’activité du Fonds une politique permissive fondée sur la non-interdiction plutôt que sur l’autorisation expresse. Dans sa décision 144-(52/51), le Conseil des gouverneurs, tout en reconnaissant que la motivation d’une restriction n’a pas d’effet quant à sa licéité, reconnaît avant tout qu’il ne lui appartient pas d’établir la volonté de l’Etat adoptant la restriction ; par conséquent, il reconnaît à chaque Etat membre la faculté de motiver certaines restrictions avec la préservation de la sécurité nationale ou internationale. Cette qualification unilatérale déclenche un régime juridique de faveur, caractérisé par une procédure d’approbation doublement spéciale, soumis à la condition de la notification des mesures au Fonds au plus tard 30 jours après leur adoption. A la différence des restrictions d’inspiration économique, qui doivent être expressément approuvées par le Conseil des gouverneurs, les restrictions justifiées par des raisons de sécurité profitent d’une présomption d’approbation : après examen par le Conseil des gouverneurs, si dans les 30 jours suivant la notification le Fonds n’informe pas l’Etat membre de la non-approbation des mesures,

81

R. W. Edwards, supra note 25, p. 874.

Le gel des avoirs d’une banque centrale étrangère

celles-ci sont réputées approuvées.82 La majorité requise pour l’adoption d’une décision doit donc se former contre les restrictions : tant que les mesures sont adoptées par des Etats détenant une large portion des quotes-parts, la majorité est politiquement impossible à atteindre. De surcroît, l’adoption d’une décision négative est de facto impossible à cause de l’utilisation de la règle du consensus. Même en cas d’approbation tacite, les restrictions doivent être temporaires.83 Toutefois, leur maintien en vigueur procède d’un second élément de spécialité de la procédure d’évaluation : alors que le Fonds doit renouveler expressément l’approbation des restrictions d’inspiration économique, pour les restrictions adoptées pour des raisons de sécurité il se réserve simplement la faculté de révoquer ou modifier expressément l’approbation tacite après révision périodique.84

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L’effet limité des gels des avoirs sur le système monétaire international

Jusqu’à présent, les gels des avoirs des banques centrales, régulièrement notifiés,85 ont toujours rencontré l’approbation tacite du FMI. Si leur caractère temporaire n’est pas en question,86 la compatibilité de la procédure instituée par la décision 144-(52/51) avec les Statuts soulève des doutes. La validité des décisions du Conseil des gouverneurs est soumise au respect des Statuts, y compris de ses objectifs.87 Vue l’importance de l’interdiction des restrictions aux paiements pour transactions courantes, une interprétation téléologique des Statuts aboutirait à considérer que, parmi les restrictions non prévues par les articles VII section 3(b) et XIV, seules celles temporaires et nécessaires pour rétablir la balance des paiements seraient admissibles par le Conseil des gouverneurs.88 Les mesures de sécurité, même tacitement approuvées par les Conseil des gouverneurs, serai-

82 83

84 85 86

87 88

Décision n° 144-(52/51), 14 août 1952, par. 1 (FMI, Selected Decisions and Selected Documents of the IMF, Washingtion, Fonds monétaire international, 35ème éd., 2010, p. 556). Décision n° 955-(59/45), 23 octobre 1959 (FMI, ibid., p. 560); J. Gold, « The Iran-United States Claims Tribunal and the Articles of the International Monetary Fund », George Washington Journal of International Law and Economics, Vol. 18, Issue 3 (1985), pp. 537580, p. 575. Décision n° 955-(59/45), ibid., par. 2. FMI, Annual Report on Exchange Arrangements and Exchange Restrictions, , consulté le 23 février 2013. Par exemple, Décision 2012/739/PESC, supra note 12, art. 31. Plus en général, les mesures restrictives sont temporaires car elles sont subordonnées au maintien par l’Etat ciblé de sa conduite. Statuts du FMI, art. préliminaire, i. M. R. Schuster, M. Robert, The Public International Law of Money, Oxofrd, Clarendon press, 1973, p. 155.

͟ – Emanuel Castellarin

ent donc contraires à l’esprit des Statuts.89 Cette opinion semble bien fondée, car la procédure spéciale prévue par la décision 144-(52/51) peut être assimilée à un amendement des Statuts qui pourtant ne respecte pas les conditions prévues par l’article XXVIII des Statuts.90 Utilisée pour permettre l’application des résolutions du Conseil de sécurité,91 elle introduit aussi un risque d’arbitraire qui peut profiter aux seuls Etats ayant une participation majoritaire au Fonds. Cette vision normativiste est toutefois à relativiser : l’analyse des restrictions par le FMI repose, selon la tradition de l’organisation, sur une logique moins strictement juridique. Les mesures restrictives sont appréciées dans le contexte de la politique économique des Etats qui les adoptent et de la situation économique mondiale. Il n’est pas tant question, en effet, de droits réciproques des Etats membres, mais de compatibilité des mesures avec le système monétaire international. L’esprit des Statuts, qui prima facie disqualifie toute restriction aux paiements, peut donc être utilement invoquée pour en tolérer certaines. Ainsi, par exemple, les mesures restrictives adoptées par les Etats-Unis sont appréciées dans le contexte général de leur participation satisfaisante au système international des paiements.92 De la même manière, les inquiétudes de l’Iran, ciblé par les restrictions aux paiements, ne sont partagées que dans la mesure où elles reflètent la dégradation possible du commerce international de pétrole.93 De manière plus générale, la pratique des restrictions aux paiements semble soulever peu d’intérêt par rapport à d’autres sujets en raison de son faible impact sur l’économie mondiale, puisque la place centrale de l’article VIII section 2(a) dans les Statuts était inspirée par la nocivité des restrictions généralisées dans l’entre-deuxguerres.

89 90

91

92

93

N. A. Simon, supra note 73, p. 221. Outre l’approbation du Conseil des gouverneurs, cet article requiert les trois cinquièmes des États membres disposant de quatre-vingt-cinq pour cent du nombre total des voix. Le premier précédent de ce type est celui des transactions concernant la Rhodésie en 1966 (J. Gold, Membership and Non-membership in the International Monetary Fund, Washington, Fonds monétaire international, 1974, pp. 277-78). FMI, Staff report dans le cadre des consultations avec les Etats-Unis prévues par l’art. IV des Statuts, 2 août 2012, p 65. Les mesures de l’Union européenne et du Canada n’ont pas encore été prises en considération dans le même cadre. FMI, Public Information Notice dans le cadre des consultations avec l’Iran prévues par l’art. IV des Statuts, 2011: « Many Directors noted the authorities’ concern about the impact of sanctions on the transfer of oil export proceeds, including potential adverse effects on oil markets, and some Directors called on the staff to monitor and assess Iran’s access to the international payment system. » Toutefois, cette analyse est antérieure au durcissement des mesures restrictives de 2012. Pour la Syrie, aucune analyse similaire n’est disponible car les dernières consultations dans le cadre de l’art. IV des Statuts se sont tenues en 2009.

Le gel des avoirs d’une banque centrale étrangère

Du point de vue de la viabilité du système monétaire international, l’effet le plus grave des restrictions aux paiements courants se produit lorsqu’elles sont appliquées par un Etat membre de manière généralisée et sans dérogation. Il ne s’agit pas, en effet, d’une pratique dont la nocivité économique est due à son caractère discriminatoire, à la différence des pratiques visées par l’article VIII section 3, y compris les taux de change multiples. En cela, elles semblent plutôt assimilables à la restriction des mouvements de capitaux (article VI section 3), dont la licéité n’est pas exclue par leur caractère discriminatoire. En d’autres termes, le caractère discriminatoire de ces restrictions contribue paradoxalement à son acceptation par le FMI : leur impact jusqu’à présent minime sur le système des paiements internationaux a permis d’éviter largement la controverse sur leur licéité. Par conséquent, en dépit de sa nature restrictive des paiements pour transactions courantes, le gel des avoirs des banques centrales étrangères n’est pas considéré comme illicite en droit du FMI.

͘

Conclusion

Par l’adoption de gels des avoirs de banques centrales étrangères, l’Union européenne et le Canada ont franchi une étape dans le durcissement de leurs mesures restrictives, imitant ainsi les Etats-Unis. Ces mesures, toujours adoptées à cause des fonctions accomplies par les banques centrales, s’inscrivent dans une stratégie active de réaction décentralisée aux faits internationalement illicites, même en l’absence d’une autorisation du Conseil de sécurité quant à leur adoption. Elles s’appuient sur des normes permissives et utilisent un levier économique pour poursuivre des buts politiques ; toutefois, elles peuvent être illicites in se. Leur compatibilité avec le droit du FMI est assurée par l’autorisation tacite du Conseil des gouverneurs; en revanche, la manière dont sont formulées la plupart des dérogations aux gels des avoirs en vigueur ne suffit pas à exclure la saisie d’avoirs affectes à des activités souveraines et protégés par une immunité coutumière. Réagissant à un fait internationalement illicite, les gels des avoirs des banques centrales étrangères actuellement en vigueur doivent donc être qualifiés de contre-mesures et non de simples rétorsions. Par conséquent, ils peuvent être adoptés par un sujet lésé par l’illicite auquel ils réagissent. En revanche, est discutée la question de savoir si un sujet non lésé est aussi habilité à les adopter. Leur licéité peut être exclue seulement aux conditions restrictives codifiées aux articles 49-53 du projet de la CDI sur la responsabilité des Etats. L’évaluation du respect de ces conditions ne peut qu’être faite au cas par cas : elle soulève notamment la question de la proportionnalité par rapport à l’illicéité d’une mesure qui marque une évolution des «sanctions intelligentes» des années 2000.

International Investment Law and Arbitration

͜

The Neer Rumour Heather L. Bray*

Abstract This article reviews the 1926 Neer v. Mexico decision within both its historical context in the jurisprudence of the United States-Mexican General Claims Commission and within its contemporary context in international investment law. In doing so, this article attempts to dispel a rumour that the Neer decision represents the customary international law minimum standard of treatment, a rumour that host States in international investment law have so tenaciously tried to advance. The author concludes that the Neer decision was a historically insignificant case, decided within a very unique context involving physical security of an alien, and was never meant to apply beyond cases involving a denial of justice. Serious misfortunes, originating in misrepresentation, frequently flow and spread before they can be dissipated by truth.1

͕

Introduction

The idea that a single decision represents the present day articulation of the minimum standard of treatment is unverified. While there have been numerous attempts to make the rumour stick, such attempts would only come to fruition

*

1

LL.B, LL.M, S.J.D. (Candidate) at the University of Arizona. The author can be contacted at [email protected]. I am grateful to Professor David Gantz for his comments and suggestions on an earlier draft of this paper. J. Sparks (ed.), The Writings of George Washington; Being His Correspondence, Addresses, Messages, and Other Papers, Official and Private, Selected and Published from the Original Manuscripts; with A Life of the Author, Notes, and Illustrations (Russell, Shattuck, and Williams and Hilliard, Gray, and Co., Boston, 1836) p. 124 (the quote is from a Letter to John Jay, Governor of New York on 8 May 1796 from George Washington).

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. - .

͠ – Heather L. Bray

through the North American Free Trade Agreement (NAFTA) Article 1105(1). It would take a different context, forum, and time period, but together the United States, Canada and Mexico would start a rumour. It would involve an uncorroborated statement that the 1926 Neer v. Mexico decision represents the customary international law minimum standard of treatment. Such statement would subsequently be disseminated to a wide international investment law audience, whereby the Neer case would be circulated again and again as representing the one and only minimum standard. Whether we call it gossip, a fabrication, a scandal, or just bad law, the effect is remarkable and far-reaching. The wording of the Neer case did not suddenly appear on the pages of the decision rendered by the United States-Mexican General Claims Commission in 15 October 1926. Ironically, the words would first flow from the lips of Fred Nielsen, the American Commissioner who would later write the concurring opinion in the Neer decision, in his oral argument before the American and British Claims Arbitration Tribunal in the Case of the Cayuga Indians. Nielsen would use the words not to express the minimum standard of treatment but to define the term ‘denial of justice.’ The definition proposed included “an obvious outrage—a wrong of such a character that reasonable men could not differ concerning it”.2 From there, the language would later appear, with a few minor adjustments, in the infamous Neer case. The Commission, in one of the most influential contributions to international law, would provide that for treatment of an alien to breach the international standard it “should amount to an outrage, to bad faith, to wilful neglect of duty, or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognize its insufficiency”.3 Afterwards, the Neer case would lay dormant for the next 70 or so years. But it would eventually re-emerge strong and well within the NAFTA Chapter 11 rumour mill. In this contribution, I will attempt to dispel the Neer rumour. This will be done in two parts. In the first part, I will go to where the rumour originated and evaluate the Neer decision within its historical context. I will analyse the facts and reasoning in the Neer case and question the legal sources, if any, used by the Commission to articulate the minimum standard of treatment. Next, in order to determine its legal significance, I will review the treatment of the Neer decision by subsequent cases before the Commission. I will look at how subsequent cases treated the Neer case, specifically looking at whether they relied, ignored or distinguished the case. In part two of the contribution, I will situate the rumour within its contemporary context in the international investment law arena. Here, I will look at both the reliance on the Neer standard by NAFTA and non-NAFTA tribunals.

2 3

C. Eagleton, ‘Denial of Justice in International Law’, 22 Am. J. Int’l L. (1928), p. 539. Neer (U.S.) v. United Mexican States, (1926), U.S.-Mex. Claims Commission, 4 R.I.A.A.60, pp. 61-62.

The Neer Rumour

͖ ͖.͕

Neer within its Historical Context US-Mexican General Claims Commission

The US-Mexico General Claims Commission was established under the General Claims Convention of 8 September 1923.4 Pursuant to Article 1, the General Commission had jurisdiction over all claims against Mexico by United States citizens and against United States by Mexico citizens, “except those arising from acts incident to the recent revolutions”.5 A three member Commission6 was to decide claims “in accordance with the principles of international law, justice, and equity”.7 In a seven-year time span (1924 to 1931), the United States filed 2,781 claims,8 Mexico filed 836 claims,9 the Commission acted upon 148 claims,10 issued 94 awards,11 delivered 21 dissenting opinions, produced over 1200 pages of opinions, provided two time extensions,12 and witnessed three tribunal resignations.13 The claims filed with the Commission involved a wide range of legal issues, including expulsions, maltreatment of prisoners, failure to apprehend, punish and prosecute wrongdoers, collection of illegal taxes, postal money orders, contracts, and bonds.14 As one scholar noted, while the “opinions [did] not always reveal a high

4 5 6

7 8 9 10 11 12 13

14

General Claims Commission, U.S.-Mex, 4 R.I.A.A. 7, 8 September 1923. The Special Claims Commission reserved exclusive jurisdiction over claims by US citizens against Mexico arising from acts of revolutionary forces between 1910 and 1920. Each Commission was to be comprised of three members, one member appointed by each government party, and a third selected either by mutual agreement or by the President of the Permanent Court of Arbitration in the event of default. See General Claims Commission, supra note 4, Art. 1. Ibid. A.H. Feller, ‘The Mexican Claims Commission’, 19 Iowa Law Review (1933-1934), p. 226 (noting that the US filed 2,781 claims amounting to USD 513,694,267.17). Ibid., p. 227 (noting that Mexico filed 836 claims amounting to USD 245,158,395.32). J.J. McDonald and C.R. Barnett, ‘The American-Mexican Claims Arbitration’, 18 American Bar Association Journal (1932), p. 185 (out of 148 claims, 54 cases were disallowed). Ibid. (American citizens received a monetary award in 89 cases and Mexico received awards in five cases). The term of the Commission was extended for periods of two years in 1927 and in 1929. The original Presiding Commissioner, van Vollenhoven of the Netherlands, resigned on 31 August 1927. Sinballc was appointed on 16 June 1928 and resigned on 1 July 1929. Alfaro was appointed on 27 May 1930. Parker of the United States was an original Commissioner. After resignation, Nielsen replaced him. MacGregor was the Mexican Commissioner. He maintained his position throughout the term of the Commission. McDonald and Barnett, supra note 10, p. 186. McDonald and Barnet conducted a survey of the type of claims decided by the General Claims Commission and concluded “the majority concern maltreatment in prison, murder, personal injury, robbery and unlawful arrest and imprisonment. Denial of justice, therefore occupies a prominent place in the opinions”.

͠ – Heather L. Bray

standard of judicial reasoning … many of them are of decided importance for the development of international law”.15

͖.͖

The Neer Case

The Neer case involved the first claim by the Commission decided on the merits. The Netherlands Commissioner van Vollenhoven wrote the unanimous decision and American Commissioner Nielsen wrote a concurring opinion. It was presented by the United States on behalf of the heirs of Paul Neer. The incident occurred on 16 November 1924 at eight o’clock in the evening while Mr. Neer and his wife were proceeding home on horseback from work at a mine in northwest Mexico, where Mr. Neer was superintendent. On the journey, a group of armed men stopped Mr. Neer, engaged him in conversation, and eventually shot and killed him with three bullets. Mrs. Neer, the only eyewitness of the murder, escaped the attack but was unable to later identify the culprits. Before the Commission, the United States predicated its argument on a denial of justice, which alleged that the “Mexican authorities showed an unwarrantable lack of diligence or an unwarrantable lack of intelligent investigation in prosecuting the culprits” responsible for Mr. Neer’s death.16 The Commission disagreed. Mexican authorities visited the scene of the murder and examined Mr. Neer’s corpse, interviewed witnesses (including Mrs. Neer), and arrested and detained a number of suspects, although the suspects were later released because of insufficient evidence.17 While the Commission admitted that the Mexican “authorities might have acted in a more vigorous and effective way”,18 the Commission ultimately held that Mexico’s actions did not constitute an international delinquency and disallowed the United States claim.19 The claim was determined on two main points: (first) that the propriety of governmental acts should be put to the test of international standards, and (second) that the treatment of an alien, in order to constitute an international delinquency, should amount to an outrage, to bad faith, to wilful neglect of duty, or to an insufficiency of governmental action so far short of

15

16 17 18 19

Ibid., p. 227. See also A.H. Roth, The Minimum Standard of International Law Applied to Aliens (A.W. Sijthoff, 1949), p. 95 (US-Mexico Claims Commission cases are “the backbone of our evidence in support of the international standard”). Neer, supra note 3, p. 61. Ibid. Ibid. Ibid., p. 62.

The Neer Rumour international standards that every reasonable and impartial man would readily recognize its insufficiency.20

The first point was in response to Mexico’s argument that the authorities involved in investigating Mr. Neer’s killing should be measured against a domestic law standard.21 In a rather unoriginal pronouncement, the Commission provided that the international, not domestic, standard provided the proper measuring stick for determining whether the acts of a State constitute an international delinquency. As Judge Stephen Schwebel in his May 2011 address to the International Arbitration Club remarks: “It was hardly seminal.” 22 Jan Paulsson also criticised this aspect of the Neer case stating “no direct authority was citied for [the legal proposition], though authority was available”.23 Accepting the international standard as the appropriate reference to evaluate State conduct, the Commission in the second point espouses a standard of review, which demarcates the boundary between “an international delinquency” and “an unsatisfactory use of power included in national sovereignty”.24 Again without any authorities, the Commission constructs an insurmountable wall of adjective modifiers: outrage, bad faith, wilful neglect of duty, or insufficiency of governmental action. The decision is less than three pages.25 It contains not more than three authorities—none of which support the two major findings of the Commission.26 And yet, this seemingly small, insignificant originating event has promulgated an enormous international rumour.

20 21 22

23

24 25 26

Ibid., pp. 60-61. Ibid., p. 64 (Nielsen, concurring opinion). S.M. Schwebel, ‘Is Neer Far from Fair and Equitable?’ Address at the International Arbitration Club in London, 5 May 2011, , visited on 27 February 2013. Schwebel cites the Norwegian Shipowners Claims and the Certain German Interests in Upper Silesia as other cases before Neer case that made similar propositions. J. Paulsson and G. Petrochilos, ‘Neer-ly Misled?’, 22 ICSID Review – Foreign Investment Law Journal (2007), p. 244. Paulsson and Petrochilos, like Schwebel, reference the Norwegian Shipowners Claims and Certain German Interests in Upper Silesia as authorities for this proposition. Neer, supra note 3, p. 61. Commissioner van Vollenhoven’s decision spans one and half pages. The concurring opinion by Nielson is four and half pages. The decision cites the William Parker case of 31 March 1926 regarding nationality of a claim, an article by John Basset Moore, and an article by De Lapradelle and Politis.

͠ – Heather L. Bray

͖.͗

The General Claims Commission and the Importance of Neer

As will be discussed later, Neer has had an enormous impact on the interpretation of the minimum standard of treatment under Article 1105(1) of the NAFTA.27 But what impact did Neer have on subsequent claims at the General Claims Commission? Out of the 148 claims decided by the General Claims Commission, less than ten cases made reference to the Neer case. Of these cases, only four relied on the Neer decision for articulation of the minimum standard of treatment,28 although at least six employed Neer-like language.29 Three of the cases, while citing the Neer case, referred to other parts of the decision, including the concurring opinion of Nielsen30 and two cases distinguished the Neer case.31

͖.͗.͕

Cases Relying on the Neer Decision

In García v. U.S., an American border patrol officer shot and killed a small child who was illegally crossing the Rio Grande with her family by raft.32 The officer was found guilty by a court-martial but the President of the US later set aside the sentence. Less than two months after Neer, the Commission rejected the denial of justice claim using the Neer standard: In order to assume such a denial there should be convincing evidence that, put to the test of international standards, the disapproval of the sentence of the courtmartial by the President acting in his judicial capacity amounted to an outrage, to bad faith, to wilful neglect of duty, or to an insufficiency of governmental action so far

27 28

29

30

31 32

Infra, Part III. García (Mex.) v. United States of America, (1926), U.S.-Mex. Claims Commission, 4 R.I.A.A. 119; Massey (U.S.) v. United Mexican States, (1927), U.S.-Mex. Claims Commission, 4 R.I.A.A. 155; Eitelman (U.S.) v. United Mexican States, (1928), U.S.-Mex. Claims Commission, 4 R.I.A.A. 336; Gordon (U.S.) v. United Mexican States, (1930), U.S.-Mex. Claims Commission, 4 R.I.A.A. 586. See Way (U.S.) v. United Mexican States, (1928), U.S.-Mex. Claims Commission, 4 R.I.A.A. 391; Mecham (U.S.) v. United Mexican States, (1929), U.S.-Mex. Claims Commission, 4 R.I.A.A. 440; Chapman (U.S.) v. United Mexican States, (1930), U.S.-Mex. Claims Commission, 4 R.I.A.A. 632; Balderas de Díaz (Mex.) v. United States of America, (1926), U.S.-Mex. Claims Commission, 4 R.I.A.A. 106; Robinson (U.S.) v. United Mexican States, (1927), U.S.Mex. Claims Commission, 4 R.I.A.A. 151. Kennedy (U.S.) v. United Mexican States, (1927), U.S.-Mex. Claims Commission, 4 R.I.A.A. 194; Faulkner (U.S.) v. United Mexican States, (1926), U.S.-Mex. Claims Commission, 4 R.I.A.A. 67; Morton (U.S.) v. United Mexican States, (1929), U.S.-Mex. Claims Commission, 4 R.I.A.A. 428. Chattin (U.S.) v. United Mexican States, (1927), U.S.-Mex. Claims Commission, 4 R.I.A.A. 282; Venable (U.S.) v. United Mexican States, (1927), U.S.-Mex. Claims Commission, 4 R.I.A.A. 219. García, supra note 28.

The Neer Rumour short of international standards that every reasonable and impartial man would readily recognise its insufficiency. None of these deficiencies appears from the record.33

Similarly, in Massey v. Mexico, the Commission was tasked with determining whether the Mexican authorities had committed a denial of justice in failing to take proper measures to punish the slayer responsible for the death of an American.34 The culprit had been arrested and imprisoned, but later escaped. The concurring Commissioner MacGregor used the Neer case as an expression of the denial of justice standard.35 The case of Eitelman v. Mexico involves a strikingly similar fact pattern to Neer.36 Eitelman worked at a mine and was brutally murdered on the way home from work. Later, his body was found by the roadside, where his skull was fractured and various bones were broken. The local authorities visited the scene of the murder, instituted a post mortem examination, gathered information about the victim, and arrested two men on suspicion. The men were later released because there was insufficient evidence to warrant detention. Like in Neer, the heirs of Eitelman alleged that the Mexican authorities committed a denial of justice by failing to investigate and prosecute the culprits guilty of murdering Eitelman. In a five-paragraph decision, the Commission dismissed the claim, relying on “the principles underlying the decision in the case of [Neer]”.37 In Gordon v. Mexico, the Commission relied on the language of Neer to dismiss the denial of justice claim alleging that Mexican authorities had failed to apprehend and punish those responsible for shooting an American subject.38 The American had been shot by one of two Mexican military officers during target practice. While one of the officers was immediately arrested, no one was ever punished in connection with the shooting because the courts were unable to ascertain which of the two officers fired the shot in question. Accordingly, the Commission concluded: The question then, is one of a decision of a court of last resort and in view of the circumstances, and of the opinions of this Commission in analogous cases, it cannot now be said that the said decision amounts to an outrage, or that it is rendered in

33 34 35

36 37 38

Venable, supra note 31, p. 224 (emphasis added). Massey, supra note 28. Ibid., pp. 162-163 (MacGregor, concurring opinion) (citing the Neer case: “outrageous way, in bad faith, in willful neglect of their duties, or in a pronounced degree of improper action.”). Eitelman, supra note 28. Ibid., p. 337. Gordon, supra note 28.

͠ – Heather L. Bray bad faith, or shows a wilful neglect of duty or insufficiency of governmental action so far short of international standards as to constitute a denial of justice.39

In all of the cases relying on Neer, the claims alleged a failure of authorities to apprehend or punish a wrongdoer and thus were predicated on a denial of justice.

͖.͗.͖

Cases utilising Neer-like language

Other cases, while not citing the Neer case, have utilised similar language. In all of these cases, denial of justice formed the basis of the claim. In Way v. Mexico, involving the failure to punish adequately the murderer of an American citizen, the Commission held that the evidence did not reveal “gross or palpable irregularity upon which an international delinquency could be predicated”.40 Similarly, in Mecham v. Mexico, the Commission, while admitting that “more efficacious measures” could have been used to apprehend the culprits responsible for Mecham’s death, the Mexican authorities actions did not fall below the standard of international law showing “a degree of negligence, defective administration of justice, or bad faith”.41 Again, in Hall v. Mexico, the Commission reiterated the test necessary for finding a denial of justice to include “convincing evidence of a pronounced degree of improper governmental administration”.42 Other cases have followed the trend exploiting Neer-like language to build an insurmountable minimum standard of treatment to include “a manifest failure to meet the obligations of international law”,43 “manifest wrong or error”,44 “convincing evidence of clearly wrongful conduct”,45 and “clear and notorious injustice, visible … at a mere glance”.46

͖.͗.͗

Cases relying on other parts of the Neer decision

The Kennedy v. Mexico decision involved a denial of justice claim for an inadequate sentence of two months for the accused that shot and permanently crippled an American.47 While the Commission referred to the Neer case in its decision, it did so in a very limited capacity. Specifically, the Commission referenced the con39 40 41 42 43 44 45 46 47

Gordon, supra note 28, p. 590 (emphasis added) (citing Neer-like language). Way, supra note 29, p. 396. Mecham, supra note 29, p. 443. Hall (U.S.) v. United Mexican States, (1929), U.S.-Mex. Claims Commission, 4 R.I.A.A. 539, p. 542 (Nielsen, concurring opinion). Chapman case, supra note 29, p. 639. Ibid., p. 640. Balderas de Díaz case, supra note 29, p. 107. Robinson case, supra note 29, p. 153. Kennedy case, supra note 30.

The Neer Rumour

curring opinion of Nielsen for the principle that international tribunals should provide domestic courts deference when reviewing their proceedings. When it came to defining the standard of review, the Kennedy Commission preferred a broader articulation, one that determines whether the Mexican law permitting a two-month sentence is “outside of the standards used by civilized countries”.48 Although Kennedy fails to acknowledge the source of this standard, it is comparable to the one espoused by Nielsen in Neer: One that is “determined according to ordinary standards of civilization”.49 The standard was also articulated in the Roberts v. Mexico case. Here, the Commission, making no reference to the Neer decision rendered only two weeks prior, stated that the “test is, broadly speaking, whether aliens are treated in accordance with ordinary standards of civilization”.50 Unlike Kennedy and Neer, however, the Roberts case was framed on the grounds of cruel and inhumane imprisonment. It was not classified as denial of justice. In both Faulkner v. Mexico and Morton v. Mexico, the Commission cited the Neer case. However, the citations did not make reference to the second legal proposition—the standard of review—set forth in the Neer case. In Faulkner v. Mexico,51 involving an improper arrest, the Commission cited Neer for the first legal proposition “that the test lies in the application of international standards”.52 In Morton v. Mexico,53 involving an inadequate sentence for the murder of an American subject, the Commission cites Nielsen’s concurring opinion in Neer for the principles under international law dealing with the “failure of authorities [to] adequately punish wrongdoers”.54

͖.͗.͘

Cases Distinguishing the Neer Case

Two cases before the General Claims Commission restrict the application of Neer to cases involving denial of justice. The Commission in Chattin v. Mexico draws a firm distinction between direct liability and indirect liability, the former arising from legislative or executive acts and the latter arising from judicial acts.55 According to the Chattin Commission, the Neer standard was only intended to apply

48 49 50 51 52 53 54 55

Ibid., p. 197. Neer case, supra note 3, p. 65 (Nielsen, concurring opinion). Roberts (U.S.) v. United Mexican States, (1926), U.S.-Mex. Claims Commission, 4 R.I.A.A. 77. Faulkner case, supra note 30. Ibid., p. 71. Morton case, supra note 30. Ibid., p. 429. The Commission also cites the Swinney case, Youmans case, Roper case, and the Kennedy case. Chattin case, supra note 31. Chattin involved an American citizen working as a conductor on a Mexican railway who was charged with embezzlement for stealing railway

͠ – Heather L. Bray

to cases involving the judiciary, or denial of justice claims, and requires evidence showing “outrage, bad faith, wilful neglect of duty, or insufficiency of action apparent to any unbiased man”.56 However, in “cases of direct responsibility, insufficiency of governmental action entailing liability is not limited to flagrant cases such as cases of bad faith or wilful neglect of duty”.57 The distinction between indirect and direct liability also arose in the Venable v. Mexico case, which did not deal with a denial of justice, but rather involved direct responsibility of Mexico for actions of a superintendent of a National Railway. In Venable, a superintendent illegally prevented certain railway engines, belonging to an American, from leaving Mexico. Like Chattin, the Venable Commission provided that only cases involving indirect liability require the onerous Neer threshold: “Direct responsibility for acts of executive officials does not depend upon the existence on their part of aggravating circumstances such as an outrage, wilful neglect of duty, etc.” 58 Later when the Venable Commission reviewed the actions of a court clerk and the indirect responsibility of Mexico it relied on the Neer standard: “No fault can

56

57

58

tickets worth four pesos, tried, convicted and subsequently sentenced to two years in jail. Ibid., p. 287. While the Commission uses Neer language, it does not cite the Neer case. See Barcelona Traction, Light and Power Company (Belgium v. Spain), 31 December 1965, ICJ, Counter Memorial of Spain, p. 508. Spain relied on the Chattin case for the argument that the Neer standard applies only to the acts of judiciary and does not extend to acts of the executive: “Le critère distinctif fut réitéré et renforcé dans les sentences arbitrales rendues par la Commission générale des Réclamations entre le Mexique et les EtatsUnis, présidée par le juriste hollandais Van Vollenhoven. Dans I’Affoire Chottin, tranchée en 1927, cette Commission indiqua que la différence entre la responsabilité qu’encourt 1’Etat du fait d’actes du pouvoir exécutif, d’une part, et. du fait d’acies du pouvoir judiciaire, de l’autre, consiste en ceci que, dans le premier cas, «la responsabilité n’est pas limitée aux cas flagrants tels que les cas de mauvaise foi ou de négligence volontaire des devoirs r En teranche, les actes judiciaires «ne sont pas considérés comme insuffints, à moins que le tort commis n’équivale zi outrage, mauvaise foi, négligence volontaire des devoirs, ou à une insuffisance d’action évidente aux yeux de toute personne impartiale.” But see Barcelona Traction, Light and Power Company, (Belgium v. Spain), 16 May 1967, ICJ, Reply of the Belgian Government, p. 316. The Belgian Government argues that the Neer standard applies regardless of whether the breach arises from a failure on behalf of the legislative or administrative branches: “Cueillons aussi dans la sentence Neer (R.S.A., IV, p. 62) cette autre indi- cation qui va dans la mème direction: « Il importe peu Sue l’insuffisance provienne d’une exécution déficiente d’une loi intelligente ou du fait que les lois du pays ne permet- tent pas aux autorités de se mettre au niveau des standards internationaux.” Chattin case, supra note 31, p. 286. While the Commission uses Neer language, it does not cite the Neer case. But see dissenting opinion of MacGregor citing directly to Neer (supra, note 31, p. 308). Venable case, supra note 31, p. 224.

The Neer Rumour

be imputed to the Court, and certainly not a defective administration of justice amounting to an outrage, bad faith, wilful neglect of duty, or apparently insufficient governmental action.” 59 This examination of the decisions of the General Claims Commission exposes a number of important points. It shows that even within the General Claims Commission, the Neer decision was not considered very persuasive. The Commission relied on it in very few cases (in less than three per cent of all cases), even though similar fact patterns warranted closer analysis. Abraham Feller’s cursory mention of the Neer decision in his seminal monograph dedicated to the Mexican Claims Commissions is further proof of its relative unimportance.60 Additionally, the Neer case was never intended to be an all-encompassing minimum standard of treatment. The Neer standard, even in 1926, was only intended to apply to claims predicated on a denial of justice. Cases involving direct responsibility of governmental authorities required a lower standard based on the “ordinary standards of civilization”.61 Even Nielsen, who first used Neer-like language in the Case of the Cayuga Indians almost a year prior to the Neer case, used it merely to denote the denial of justice standard.62

͗ ͗.͕

Neer within Present Day Context NAFTA and Neer

Article 1105(1) of the NAFTA provides: “Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.” From the beginning, there has been disagreement as to the standard of protection accorded to investors under Article 1105(1). Early on, in the SD Myers v. Canada case, which involved Canada’s export ban of polychlorinated biphenyl waste, Canada relied on the Neer case as the appropriate articulation of the standard of treatment required under Article 1105(1).63 SD Myers also relied on the Neer case, however, it did so only in relation to the first legal proposition: “the propriety of governmental acts should be put to the test of international standards”.64 With regard to Canada’s reference to the first legal proposition in the Neer case, SD Myers pointed out that “[t]he passage cited by

59 60 61 62 63 64

Ibid., p. 226 (citing the Neer case) (citations omitted). See Feller, supra note 8. Roberts case, supra note 50, p. 80. Eagleton, supra note 2, p. 539. See e.g., SD Myers v. Canada, 5 October 1999, Ad hoc—UNCITRAL Arbitration Rules, Canada’s Counter-Memorial on the Merits, para. 289 (citing the Neer case). SD Myers v. Canada, 20 July 1999, Ad hoc—UNCITRAL Arbitration Rules, Memorial of the Investor Initial Phase, para. 100.

͠ – Heather L. Bray

Canada only concerns the application of the principles of “denial of justice,” and does not extend to all contexts.65 The tribunal rejected Canada’s endorsement of the Neer standard providing that “a breach of Article 1105 occurs only when it is shown that an investor has been treated in such an unjust or arbitrary manner that the treatment rises to the level that is unacceptable from the international perspective”.66 In finding that Canada breached its fair and equitable treatment obligation, the tribunal explained that a breach of the national treatment provision “essentially establishes a breach of Article 1105 a well”.67 In Pope & Talbot v. Canada, Canada again maintained that the content of Article 1105(1) could be found in the 1926 Neer decision.68 Canada argued that the “test in Neer was applied consistently by the United States-Mexico Claims Commission” 69 and “other international bodies”.70 In support of the former contention, Canada cited Faulkner, Chattin, Roberts, and Way.71 As noted above, the Chattin case narrowed the Neer decision to cases involving a denial of justice case; Roberts employed a more liberal standard based on the ordinary standards of civilisation; and Faulkner only relied on Neer to reinforce the notion that international delinquency is measured by international rather than domestic standards. The only case that applied Neer-like language was in the Way case, which involved a denial of justice. In regard to the latter contention, Canada relied on the Chevreau case72 and Amco Asia v. Indonesia case,73 where neither case cited Neer nor relied on the Neer standard to define the minimum standard of treatment. It is doubtful therefore that the Neer case “continues to be the seminal statement on the meaning of the minimum standard”.74

65 66 67

68 69 70 71 72 73 74

SD Myers v. Canada, 15 December 1999, Ad hoc—UNCITRAL Arbitration Rules, Investor’s Supplemental Memorial, para. 106. SD Myers v. Canada, 13 November 2000, Ad hoc—UNCITRAL Arbitration Rules, First Partial Award and Separate Opinion, IIC 249 (2000), para. 263. Ibid., para. 266. But see dissenting opinion of Chiasson, supra, para. 267 where he explains that a breach of another provision of the NAFTA (e.g. national treatment provision) cannot support a breach of Article 1105. Pope & Talbot v. Canada, 10 October 2000, Ad hoc—UNCITRAL Arbitration Rules, Canada’s Counter-Memorial (Phase Two), paras. 258, 261, 266, 309 (referring to the Neer case). Ibid., para. 261. Ibid., para. 266. Ibid., paras. 258-265. Chevreau (Fr. v. Gr. Brit.), (1931), PCA, 2 R.I.A.A. 1113. Amco Asia Corporation v. Indonesia, 20 November 1984, Award, ICSID Case No. ARB/81/1. Pope & Talbot, Can. Counter-Memorial, supra note 68, para. 266.

The Neer Rumour

In the 2001 Award on the Merits, the Pope & Talbot tribunal adopted an additive interpretation of Article 1105(1).75 “That is, investors under NAFTA are entitled to the international law minimum, plus the fairness elements.” 76 This tribunal sustained this interpretation even though the “language of Article 1105 suggest[ed] otherwise”.77 In sidestepping the textual limitation in Article 1105, and instead preferring to interpret the provision based on its bilateral commercial treaty pedigree, the tribunal disregarded Canada’s emphasis on the Neer threshold limitations including “egregious,” “outrageous” or “shocking”.78 A few months later, the Pope & Talbot tribunal revisited its additive interpretation of Article 1105(1) in light of the recent Free Trade Commission’s (FTC) binding interpretation on 31 July 2001, which provides, in the relevant part: 1.

2.

Article 1105(1) prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to investments of investors of another party. The concepts of ‘fair and equitable treatment’ and ‘full protection and security’ do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.79

The FTC’s interpretation essentially limited Article 1105(1) to the protection at customary international law. While bound by the FTC’s insertion of the word ‘customary’ into Article 1105(1), the Pope & Talbot tribunal still rejected Canada’s static interpretation of customary international law as ‘frozen’ in the 1920s.80 The Pope & Talbot tribunal preferred an evolutionary interpretation of customary international: “There has been evolution in customary international law concepts since the 1920s [and] the range of actions subject to international concern has broadened beyond the international delinquencies considered in Neer to include the concept of fair and equitable treatment.” 81 75

76 77 78 79

80 81

The additive interpretation of Article 1105 provides that the concept of fair and equitable treatment provides protection in addition to the protection offered at international law. Pope & Talbot v. Canada, 10 April 2001, Ad hoc—UNCITRAL Arbitration Rules, Award on the Merits of Phase 2, IIC 193 (2001), para. 110 [emphasis in original]. Ibid. Ibid., para. 118. NAFTA Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions (31 July 2001), , visited on 27 February 2013. Pope & Talbot v. Canada, 31 May 2002, Ad hoc—UNCITRAL Arbitration Rules, Award on Damages, IIC 195 (2002), para. 57. Pope & Talbot, Award on the Merits of Phase 2, supra note 76, para. 58.

͠ – Heather L. Bray

Subsequent NAFTA cases have followed Pope & Talbot’s lead and accepted the evolutionary interpretation of customary international law.82 The Mondev v. U.S. tribunal distinguishes the Neer case from modern international investment law.83 The tribunal points out that Neer involved a distinct fact pattern concerning “physical security of the alien”,84 transpired in a unique time period in international law where the individual had a minimal role,85 and occurred well before the bilateral and regional investment treaties “influenced the content of rules governing the treatment of foreign investment”.86 For these reasons, the Mondev tribunal approved a progressive interpretation of Article 1105(1) and rejected the reliance on the archaic Neer decision: The term “customary international law” refers to customary international law as it stood no earlier than the time at which NAFTA came into force. It is not limited to the international law of the 19th century or even of the first half of the 20th century, although decisions from that period remain relevant. In holding that Article 1105(1) refers to customary international law, the FTC interpretations incorporate current international law, whose content is shaped by the conclusion of more than two thousand bilateral investment treaties and many treaties of friendship and commerce. Those treaties largely and concordantly provide for “fair and equitable” treatment of, and for “full protection and security” for, the foreign investor and his investments.87

Similarly, the tribunal in ADF v. U.S. noted, “both customary international law and the minimum standard of treatment of aliens … are constantly in a process of

82

83

84 85 86 87

See e.g., International Thunderbird Gaming Corporation v. Mexico, 26 January 2006, Ad hoc—UNCITRAL Arbitration Rules, IIC 136 (2006), para. 194 (although accepting that the content of the minimum standard of treatment has evolved since 1926, the tribunal nonetheless provides that the “threshold for finding a violation of the minimum standard of treatment still remains high”); Cargill v. Mexico, 13 August 2009, ICSID Case No. ARB(AF)/05/2, IIC 479 (2009), paras. 282-285 (remarking that customary international law may evolve but that such evolution must still adapt the Neer decision to the present economic conditions. According to the tribunal, “key to this adaptation is that … the required severity of the conduct as held in Neer is maintained”). S.M. Schwebel was one of the tribunal members in the Mondev decision. It is likely that Schwebel was the one that wrote the section of the decision dealing with Article 1105(1). See Schwebel, supra note 22 where he speaks about the persuasiveness of the Mondev decision. Mondev International v. United States, 11 October 2002, ICSID Case No. ARB(AF)/99/2, IIC 173 (2002), para. 115. Ibid., para. 116. Ibid., para. 117. Ibid., para. 125.

The Neer Rumour

development”.88 Thus customary international law “is not a static photograph of the minimum standard of treatment of aliens as it stood in 1927 when the Award in the Neer case was rendered”.89 Likewise, Waste Management v. Mexico and GAMI v. Mexico refused to confine Article 1105(1) to the type of treatment referred to in the Neer case, which “was decided more than half a century before NAFTA saw the light of day”.90 Not all NAFTA cases, however, have adopted an evolutionary, non-Neer bound analysis of Article 1105(1). In Glamis Gold v. U.S., for example, the tribunal observed that the “fundamentals of the Neer standard” still apply today.91 While the tribunal accepted that there has been an evolution since 1926 in “the international view of what is shocking and outrageous”,92 the customary international law minimum standard of treatment remains paralysed by the Neer decision, as evidenced by tribunals’ habitual use of adjective modifiers.93 Except for the aspect of bad faith, which is no longer required to show a violation of the minimum standard of treatment, the Glamis Gold decision required an act to be “sufficiently egregious and shocking—a gross denial of justice, manifest arbitrariness, blatant unfairness, a complete lack of due process, evident discrimination, or a manifest lack of reasons” to constitute a breach of Article 1105(1).94 88

89

90

91 92 93 94

ADF Group v. United States, 9 January 2003, ICSID Case No. ARB(AF)/00/1, IIC 2 (2003), para. 179. See also ADF Group v. United States, 19 July 2002, ICSID Case No. ARB(AF)/00/1, Canada’s Second Submission pursuant to NAFTA Article 1128, para. 33 where Canada argues: “Canada’s position has never been that the customary international law regarding the treatment of aliens was ‘frozen in amber at the time of the Neer decision’. Obviously, what is shocking or egregious in the year 2002 may differ from that which was considered shocking or egregious in 1926. Canada’s position has always been that customary international law can evolve over time, but that the threshold for finding violation of the minimum standard of treatment is still high.” ADF Group v. United States, Award, supra note 88, para. 181. The Tribunal also notes that the “Claims Commission in the Neer case did not purport to pronounce a general standard applicable not only with respect to protection against acts of private parties directed against the physical safety of foreigners while in the territory of a host State, but also in any and all conceivable contexts”. GAMI Investments v. Mexico, 15 November 2004, Ad hoc—UNCITRAL Arbitration Rules, IIC 109 (2004), para. 95; Waste Management v. Mexico, 30 April 2004, ICSID Case No. ARB(AF)/00/3, IIC 270 (2004), para. 93; See more recently Chemtura Corporation v. Canada, 2 August 2010, Ad hoc—UNCITRAL Arbitration Rules, IIC 451 (2010), para. 215 (remarking that Article 1105(1) does not require “that a violation must be outrageous in order to breach such standard”). Glamis Gold v. United States, 14 May 2009, Ad hoc—UNCITRAL Arbitration Rules, IIC 380 (2009), para. 22. Ibid., para. 613. Ibid., para. 614. Ibid., para. 616.

͠ – Heather L. Bray

Recently, in Merrill & Ring v. Canada, the tribunal was given a chance to revisit the Neer test endorsed by the Glamis Gold tribunal. The tribunal commented that the “high threshold of Neer is not applicable” in the investment law context “except for cases of personal safety, denial of justice, and due process”. Absent those three exceptions, “today’s minimum standard is broader than that defined in the Neer case and its progeny”.95 In arriving at this conclusion, the Merrill & Ring tribunal engaged in a historical analysis and traced the evolution of two tracks in international investment law. The first track, which gained legitimacy in the 1920s in large part from decisions rendered by the United States-Mexico Claims Commission, concerned situations involving due process, denial of justice, and physical mistreatment of aliens and “only marginally with matters relating to business, trade or investments”.96 The first track eventually merged into what is now termed international human rights law, which emphasises equal protection of aliens and nationals alike. “This evolution led to major international conventions on human rights” and propelled “the development of rules of customary law in this field”.97 Parallel with the development of the first track, a second track, pertaining to the treatment of aliens in relation to business, trade and investment, was also developing. Originating in the field of diplomatic protection and gradually taking shape in the form of specialised regimes for the protection of foreign investment, this track has never required the “showing of outrageous treatment” laid down in the Neer case.98 Based on these two tracks and their different evolutionary routes, the Merrill & Ring tribunal concludes that “cases of personal safety, denial of justice, and due process”, which maintain the burdensome Neer standard, should be distinguished from all other investment claims alleging a breach of Article 1105(1). This decision is not only consistent with previous NAFTA Chapter 11 cases but it is also consistent with the Neer decision itself, which was only intended to apply narrowly to denial of justice.

͗.͖

Non-NAFTA Cases and Neer

NAFTA Parties are not the only Respondent States relying on the Neer standard as the current articulation of the international minimum standard of treatment.99

95 96 97 98 99

Merrill & Ring Forestry v. Canada, 31 March 2010, Ad hoc—UNCITRAL Arbitration Rules, IIC 427 (2010), para. 201. Ibid., para. 197. Ibid., para. 201. Ibid., paras. 205-207. See e.g., EDF International v. Argentina, 11 June 2010, ICSID Case No. ARB/03/23, IIC 556 (2012), para. 344 (Argentina advancing the Neer standard); Railroad Development Corpo-

The Neer Rumour

Most arbitral tribunals, absent one, however, have rejected the Neer case as representative of customary international law.100 In rejecting the Neer standard, nonNAFTA arbitral tribunals have relied on three main arguments. First, tribunals, focusing on the specific wording of the applicable investment treaty, have adopted an autonomous interpretation of the fair and equitable treatment provision. In EDF v. Argentina, the tribunal noted that unlike NAFTA Article 1105(1), Article 3 of the Argentina-France Bilateral Investment Treaty notably lacks any mention of “minimum standard” and instead uses the phrase “principles of International Law.” Such wording “invites consideration of a wider range of principles related to fairness and equity”.101 Similarly, in Vivendi v. Argentina the reference to “principles of international law” in the fair and equitable treatment provision supported “a broader reading than the Neer standard”.102 Rather than antiquated principles from the 1920s, the tribunal encouraged the review of contemporary principles.103 While the Saluka v. Czech Republic tribunal characterised the fair and equitable treatment standard as an autonomous standard allowing it to escape the Neer stronghold, the tribunal nevertheless acknowledged that the distinction between an autonomous interpretation and an interpretation based on customary international law “when applied to the specific facts of a case, may well be more apparent than real”.104 Second, tribunals have used Pope & Talbot’s evolutionary theory of customary international law to circumvent the harshness of Neer.105 In both Siemens v. Argentina and Azurix v. Argentina, the tribunals identified an evolution in arbitral awards away from the Neer case that no longer requires bad faith or malicious

ration (RDC) v. Guatemala, 29 June 2012, ICSID Case No. ARB/07/23, IIC 553 (2012), para. 210 (El Salvador arguing that the Neer standard “has not changed significantly over time”); Compañía de Aguas del Aconquija SA and Vivendi Universal SA v. Argentina, 20 August 2007, ICSID Case No. ARB/97/3, IIC 307 (2007), para. 6.6.3 (Argentina relying on the Neer case); SAUR International SA v. Argentina, 6 June 2012, ICSID Case No. ARB/04/4, IIC 547 (2012), Decision on Jurisdiction and Liability, para. 492 (Argentina supporting the 1926 Neer decision). 100 In Genin v. Estonia, 25 June 2001, ICSID Case No. ARB/99/2, IIC 10 (2001), para. 367 the tribunal explains: “[an] Act that would violate this minimum standard would include acts showing a willful neglect of duty, an insufficiency of action falling far below international standards, or even subjective bad faith”. 101 EDF, supra note 99, para. 1001. 102 Vivendi, supra note 99, para. 7.4.7. 103 Ibid. 104 Saluka Investments v. Czech Republic, 17 March 2006, PCA—UNCITRAL Arbitration Rules, IIC 210 (2006), Partial Award, para. 291. 105 See e.g., BG Group v. Argentina, 24 December 2007, Ad hoc—UNCITRAL Arbitration Rules, IIC 321 (2007), para. 302; Vivendi, supra note 99, footnote 325.

͠ – Heather L. Bray

intention to prove a breach of the fair and equitable treatment provision.106 Recently, in Railroad Development v. Guatemala, the tribunal criticised the reasoning of the General Claims Commission in Neer for failing to reference State practice in formulating the minimum standard of treatment. Exposing a paradox, the tribunal states: “It is ironic that the [Neer] decision considered reflecting the expression of the minimum standard of treatment in customary international law is based on the opinions of commentators and, on its own admission.” 107 In fact, “[b]y the strict standards of proof of customary international law applied in Glamis Gold, Neer would fail to prove its famous statement … to be an expression of customary international law”.108 The Railroad Development tribunal instead accepted the evolutionary interpretation of customary international law, which is “constantly in the process of development”.109 Third, tribunals, like Merrill & Ring, narrow the application of the Neer case to denial of justice claims only. In SAUR v. Argentina and Lemire v. Ukraine the tribunals affirmed that Neer is reserved for claims involving a denial of justice, whereas the broader Roberts case more appropriately applies to violations committed by acts of the administrative or legislative branches.110

͘

Neer-ly Over?

Considering that the Neer decision represents one of many cases arising from the Commission and occupies less than three pages of legal reasoning, it is interesting to ask why this particular historical passage figures so prominently in the NAFTA Chapter 11 jurisprudence. And why the three NAFTA Parties have so tenaciously advanced it. The Neer decision was historically insignificant. Not only was the case decided in a very different context involving physical security of an alien rather than the protection of foreign investors and their investment but it also was decided in a very different economic era. Since 1926, the economic landscape has been reshaped and moulded by the great depression, global wars, the recognition of fundamental human rights, the establishment of the WTO, and the explosion of bilateral and multilateral investment treaties. Additionally, the Neer decision was only ever meant to apply to denial of justice claims. This narrow application was

106 Siemens v. Argentina, 6 February 2007, ICSID Case No. ARB/02/8, IIC 227 (2007), para. 299; Azurix v. Argentina, 23 June 2006, ICSID Case No. ARB/01/12, IIC 24 (2006), para. 372. 107 Railroad Development, supra note 99, para. 216. 108 Ibid. 109 Ibid., para. 218 (citing the ADF decision). 110 SAUR, supra note 99, para. 493; Lemire v. Ukraine, 14 January 2010, ICSID Case No. ARB/06/18, IIC 424 (2010), Decision on Jurisdiction and Liability, paras. 248-249, 254.

The Neer Rumour

applied by the General Claims Commission and affirmed in the recent Merril & Ring decision. Despite the passage of over 80 years, the Neer rumour is still strong. It was started in 1926 based on unverified, doubtful truth. It has been spread by the NAFTA Chapter 11 Parties. But like any rumour, it can, and should, be dispelled.

͝

The Permanent Court of Arbitration in Yanying Li and Camille M. Ng*

Abstract The Permanent Court of Arbitration (‘PCA’) was the first permanent intergovernmental institution to provide a forum for the resolution of disputes between States. While the international community still contends with inter-State disputes, it has also seen the rise of other kinds of disputes—disputes between investors and States, for example. In recent years, the PCA has adapted to the evolving dispute resolution needs of the international community. This article discusses the highlights of its work in 2012.

͕

Introduction

One hundred and fourteen years ago, there were no permanent intergovernmental institutions committed to the resolution of disputes between States through arbitration and other peaceful means.1 Established to fill this gap, the PCA today has evolved from administering exclusively inter-State disputes to disputes involving various combinations of States, State-controlled entities, international organisations and private parties. This article provides an overview of the development of the PCA, using its 2012 activities to illustrate what it does.

*

1

This paper was prepared by Yanying Li (PCA Assistant Legal Counsel) and Camille M. Ng (PCA Assistant Legal Counsel). The authors are very grateful to Dirk Pulkowski (PCA Legal Counsel) and Brooks Daly (PCA Deputy Secretary-General) for their helpful comments. The opinions expressed in this paper are the personal views of the authors See J. van Haersolte-van Hof, ‘Revitalization of the Permanent Court of Arbitration’, 54 Netherlands International Law Review (2007), p. 395.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. .

͡ – Yanying Li and Camille M. Ng

͖ ͖.͕

Background History

The PCA was founded at the 1899 Hague Peace Conference—a “precursor of the League of Nations and the United Nations”—which Czar Nicholas II of Russia initiated in an effort to halt the burgeoning arms race in Europe and to promote dispute resolution through peaceful means.2 Most of the 26 States that attended the Conference favored a permanent arbitral institution with compulsory jurisdiction. The remaining States rejected the notion of compulsory jurisdiction, but were eventually persuaded to agree that such an institution would be permanent. So it happened that the 1899 Convention for the Pacific Settlement of International Disputes (‘1899 Convention’) established an institution without compulsory jurisdiction but with a permanent administrative framework to support international arbitral proceedings and other forms of dispute resolution.3 Four completed arbitrations,4 two international inquiry commissions,5 at least two international wars,6 and eight years later, the 1907 Convention for the Pacific Settlement of International Disputes (1907 Convention), which was signed during the 1907 Hague Peace Conference, elaborated on the framework of the PCA. It was ultimately responsible for “creat[ing] the conditions for [the PCA’s] further development, in terms of both membership and the use of its services in the field of international dispute resolution.” 7

2

3

4

5

6 7

United Nations Conference on Trade and Development, ‘Dispute Settlement 1.3 Permanent Court of Arbitration’, , visited on 8 April 2013. See B. Daly, ‘Permanent Court of Arbitration’, in C. Giorgetti (eds.), The Rules, Practice, and Jurisprudence of International Courts and Tribunals (International Litigation in Practice), (Martinus Nijhoff, 2012), p. 38. Pious Fund of the Californias, USA/Mexico, Arbitration Agreement dated 22 May 1902, Award dated 14 October 1902; Preferential Treatment of Blockading Powers against Venezuela, Great Britain, Germany and Italy/Venezuela, Arbitration Agreement dated 7 May 1903, Award dated 22 February 1904; Japanese House Tax, Germany, Great Britain and France/Japan, Arbitration Agreement dated 28 August 1902, Award dated 22 May 1905; and Muscat Dhows, France/Great Britain, Arbitration Agreement dated 13 October 1904, Award dated 8 August 1905. See T. Van Den Hout, ‘Resolution of International Disputes: The Role of the Permanent Court of Arbitration – Reflections on the Centenary of the 1907 Convention for the Pacific Settlement of International Disputes’, 21 Leiden Journal of International Law (2008), p. 645. Incident in the North Sea (Dogger Bank Case), Great Britain/Russia, Inquiry Agreement dated 25 November 1904, Report dated 26 February 1905 and ‘Tauvigno’, ‘Camouna’, and ‘Gaulois,’ France/ Italy, Inquiry Agreement dated 20 May 1912, Report dated 23 July 1912. Ibid. Boer War of 1899–1902 and the Russo Japanese War of 1904–5. Ibid., p. 644. Ibid.

The Permanent Court of Arbitration in ͚͙͚͘

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Structure

The PCA today maintains the three-partite structure set forth in the 1899 and 1907 Conventions, as represented in the diagram below:

The Administrative Council is the governing body of the PCA and is comprised of the diplomatic representatives of its Member States (States who have acceded to either of the 1899 and 1907 Conventions), as well as the Minister of Foreign Affairs of the Netherlands.8 It meets biannually in the Peace Palace in The Hague to decide on budget issues, policy matters, and new initiatives. The PCA currently has 115 Member States, the most recent being Bangladesh, which acceded to the 1907 Convention in 2012, and Vietnam, which acceded to the 1899 Convention in 2011 and the 1907 Convention in 2012.9 The ‘Members of the Court’ refers to a list of arbitrators who are “of known competency in questions of international law, of the highest moral reputation, and disposed to accept the duties of Arbitrators.” 10 This list is intended to assist— but does not constrain—parties in selecting appropriate arbitrators for their disputes. Member States may appoint up to four persons for inclusion in the list of the Members of the Court.11 Housed in the Peace Palace, the International Bureau is the secretariat of the PCA. It is staffed by multinational and multilingual lawyers and administrators who provide parties and arbitral tribunals with registry support, including serving as the official channel of communications and assisting with the archiving of documents, providing financial, logistical and technical support, and assisting in the or8

9 10 11

See Art. 28 of 1899 Convention for the Pacific Settlement of International Disputes, 29 July 1899; Art. 49 of 1907 Convention for the Pacific Settlement of International Disputes, 18 October 1907. Both Conventions are available at , visited on 27 March 2013. The list of the Member States of the PCA is available at , visited on 8 April 2013. Article 23 of the 1899 Convention. Ibid.

͡ – Yanying Li and Camille M. Ng

ganisation of meetings and hearings, whether at the Peace Palace or elsewhere.12 Mr. Hugo H. Siblesz, the former Ambassador of the Netherlands to France and Director-General for Political Affairs of the Netherlands Ministry of Foreign Affairs, began his five-year term as the 13th Secretary-General of the PCA on 1 June 2012. As of the date of this article, the International Bureau consists of 14 legal counsel who are supported by 11 assistant legal counsel and seven case managers.

͗ ͗.͕

PCA cases Registry cases

The cases administered by the PCA consist of not only arbitrations between States but also arbitrations between an investor and a State under bilateral or multilateral investment treaties or national investment laws; arbitrations between private parties and States, State-controlled entities, or intergovernmental organisations; and intra-State arbitrations.13 In 2012, the PCA administered 88 cases, of which 27 were initiated that year. The PCA’s case docket for 2012 is represented graphically below:

12 13

See Arbitration Services, , visited on 26 March 2013. It should be noted that under Article 47(1) of the 1907 Convention, the International Bureau was “authorized to place its offices and its staff at the disposal of the Contracting Powers for the use of any special Board of Arbitration”. In 1934, at the time of the Radio Corporation of America v. China case, Article 47 (1) was interpreted by the PCA Administrative Council as encompassing disputes between a State and a non-State actor.

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͗.͖

State-to-State Disputes

This section briefly discusses five of the six State-to-State arbitrations that the PCA administered in 2012, with the sixth case confidential at this time.

a)

Mauritius v. United Kingdom

In an arbitration initiated by Mauritius in 2010 pursuant to Article 287 and Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS),14 Mauritius challenges the establishment by the United Kingdom of a Marine Protected Area around the Chagos Archipelago, which prohibits fishing and other activities.15 To address the jurisdictional objections filed by the United Kingdom in October 2012 and the parties’ written submissions on bifurcation filed in November 2012, a oneday hearing on bifurcation was held in January 2013 in Dubai, UAE.16 The tribunal decided against bifurcation in the same month.17 The Parties are thus to proceed with the submission of their written pleadings.

b)

Pakistan v. India

In a 2010 arbitration initiated by Pakistan against India under Article IX and Annexure G of the Indus Waters Treaty, a 1960 international agreement governing the use of the Indus river system that runs through both countries,18 Pakistan claims that the Kishenganga Hydro-Electric Project (KHEP) being constructed by India— specifically, KHEP’s planned diversion of the waters of the Kishenganga/Neelum, as well as the use of the drawdown flushing technique—is a violation of the Trea-

14

15

16 17 18

The members of the arbitral tribunal are Professor Ivan Shearer (President), Sir Christopher Greenwood, Judge Albert Hoffmann, Judge James Kateka, and Judge Rüdiger Wolfrum. See The Republic of Mauritius v. The United Kingdom of Great Britain and Northern Ireland, , visited on 26 March 2013. See Mauritius v. United Kingdom, Reasoned Decision on Challenge dated 30 November 2011, para. 32, , visited on 15 April 2013. Ibid., pp. 2-3. Mauritius v. United Kingdom, Procedural Order No. 2, , visited on 15 April 2013. The court of arbitration consists of Judge Stephen M. Schwebel (President), Sir Franklin Berman KCMG QC, Professor Howard S. Wheater FREng, Professor Lucius Caflisch, Professor Jan Paulsson, Judge Bruno Simma, and H.E. Judge Peter Tomka. See Pakistan v. India, PCA Press Release dated 15 February 2012, , visited on 26 March 2013.

͡ – Yanying Li and Camille M. Ng

ty.19 In contrast, India maintains that both the design and operation of the KHEP conform with the Treaty.20 Following the first site visit conducted by the full court of arbitration in June 2011, a delegation of the arbitral court conducted a second and more limited site visit in February 2012.21 The two-week merits hearing was conducted in the Peace Palace in August 2012.22 A Partial Award was issued in February 2013.23 The Parties are currently expected to make further submissions, as ordered in the Partial Award.24

c)

Bangladesh v. India

Initiated in 2009 pursuant to Article 287 and Annex VII of the UNCLOS, this arbitration concerns the delimitation of the maritime boundary between Bangladesh and India.25 It is currently pending, and the schedule of pleadings is not publicly available.

d)

Ecuador v. United States

In 2012, an arbitration between Ecuador and the United States was concluded.26 This case concerned the interpretation of Article II(7) of the US-Ecuador BIT 27

19 20 21

22 23

24 25

26 27

Ibid. See Pakistan v. India, PCA Press Release dated 1 September 2012, , visited on 15 April 2013. The full court of arbitration conducted an earlier site visit to the Neelum-Jhelum and Kishenganga hydro-electric projects and surrounding areas in June 2011. See Pakistan v. India, PCA Press Release dated 15 February 2012, supra note 18. See Pakistan v. India, PCA Press Release dated 20 August 2012, , visited on 26 March 2013. See Pakistan v. India, Partial Award dated 18 February 2013 and PCA Press Release dated 19 February 2013, , visited on 15 April 2013. See ibid. The arbitral tribunal consists of Professor Dr. Rüdiger Wolfrum (President), Judge Thomas A. Mensah, Dr. Pemmaraju Sreenivasa Rao, Professor Ivan Shearer and Professor Tullio Treves. See Bangladesh v. India, , visited on 26 March 2013. Certain of the Parties’ written submissions in this case are available at , visited on 26 March 2013. See The Republic of Ecuador v. The United States of America, , visited on 26 March 2013, referring to the Treaty between the United States of America and the Republic of Ecuador Concerning the Encouragement and Reciprocal Protection of Investments dated 27 August 1993 (US-Ecuador BIT).

The Permanent Court of Arbitration in ͚͙͚͘

which states that “[e]ach Party shall provide effective means of asserting claims and enforcing rights with respect to investment, investment agreements, and investment authorizations”.28

e)

Croatia v. Slovenia

Conducted in accordance with the PCA Optional Rules for Arbitrating Disputes between Two States,29 the dispute between Croatia and Slovenia centers on, first, the course of the maritime and land boundary between the two States, which the parties agreed should be determined according to “the rules and principles of international law”,30 and, second, Slovenia’s junction to the High Sea and the regime for the use of the relevant maritime areas, which the parties agreed would be governed by “international law, equity and the principle of good neighbourly relations.” 31 A first procedural meeting was held in April 2012. The Parties are currently exchanging submissions, and the hearing for this case is scheduled for the spring of 2014.32

͗.͗ a)

Investor-State Disputes Overview

While the PCA administered 54 investor-State arbitrations in 2012—the bulk of its case docket for that year—in only 11 of these cases did the parties consent to the publication of case details on the PCA’s website. The following chart provides an overview of these cases.

28 29

30 31 32

See Ecuador v. United States, Request for Arbitration and Statement of Claim, para. 2, , visited on 26 March 2013. The members of the arbitral tribunal are Judge Gilbert Guillaume (Presiding Arbitrator), Professor Vaughan Lowe QC, Judge Bruno Simma, Dr. Jernej Sekolec, and Professor Budislav Vukas. See Arbitration Between the Republic of Croatia and the Republic of Slovenia, , visited on 26 March 2013; See also PCA Press Release dated 13 April 2012, , visited on 26 March 2013. Art. 3 (1) of the Arbitration Agreement dated 4 November 2009. See PCA Press Release dated 13 April 2012, Ibid. Art. 4 of the Arbitration Agreement dated 4 November 2009. See PCA Press Release dated 13 April 2012, supra, note 29. See PCA Press Release dated 13 April 2012, supra, note 29.

͡ – Yanying Li and Camille M. Ng PARTIES

BIT/MIT

TRIBUNAL

US-Ecuador BIT

Mr. V.V. Veeder QC (Presiding Arbitrator), Dr. Horacio Grigera Naón, and Professor Vaughan Lowe QC Mr. Bernard Hanotiau (Presiding Arbitrator), Professor Georges AbiSaab, and Professor Kaj Hobér Sir Franklin Berman KCMG QC (Presiding Arbitrator), Judge Stephen M. Schwebel, and Judge Bruno Simma Dr. José Miguel Júdice (Presiding Arbitrator), Mr. Manuel Conthe, and Dr. Raúl Emilio Vinuesa

SOUTH AMERICAa 1

Chevron Corporation & Texaco Petroleum Company v. The Republic of Ecuador b

2

US-Ecuador BIT Murphy Exploration & Production Company - International v. The Republic of Ecuador c

3

Merck Sharpe & Dohme (I.A.) Corporation v. The Republic of Ecuador d

US-Ecuador BIT

4

Guaracachi America, Inc. & Rurelec plc v. Plurinational State of Bolivia e

US-Bolivia BIT f and UKBolivia BIT g

a b

c d e

f

g

The region refers to the location of the respondent State. See 1. Chevron Corporation and 2. Texaco Petroleum Company v. The Republic of Ecuador (PCA Case No. 2009-23), , visited on 26 March 2013. See Murphy Exploration & Production Company - International v. The Republic of Ecuador, , visited on 26 March 2013. See Merck Sharpe & Dohme (I.A.) Corporation v. The Republic of Ecuador, , visited on 26 March 2013. See 1. Guaracachi America, Inc. (U.S.A.) and 2. Rurelec plc (United Kingdom) v. Plurinational State of Bolivia, , visited on 27 March 2013. Treaty between the Government of the United States of America and the Government of the Republic of Bolivia Concerning the Encouragement and Reciprocal Protection of Investment. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Bolivia for the Promotion and Protection of Investments.

The Permanent Court of Arbitration in ͚͙͚͘ PARTIES

BIT/MIT

TRIBUNAL

Chapter 11 of the North American Free Trade Agreement (NAFTA)

Judge Bruno Simma (Presiding Arbitrator), Professor Donald McRae, and Professor Bryan Schwartz

Judge Bruno Simma (Presiding Arbitrator), Professor Dr. Karl-Heinz Böckstiegel, and Professor Vaughan Lowe QC Maître L. Yves Fortier, C.C., Q.C. (Presiding Arbitrator), Mr. Henri Alvarez, Q.C., and Professor Brigitte Stern Sir Christopher Greenwood (Presiding Arbitrator), Dr. Alexander Petsche, and Professor Brigitte Stern

NORTH AMERICA 5

Bilcon of Delaware et al v. Government of Canada h

EUROPE 6

OAO Gazprom v. The Republic of Lithuania i

Russia-Lithuania BIT j

7

InterTrade Holding GmbH v. The Czech Republic k

Germany-Czech/Slovak Republic BIT l

8

Austria-Czech/Slovak European American Investment Bank AG v. The Federal Republic BIT n Slovak Republic m

h i j k l m n

See Bilcon of Delaware et al v. Government of Canada, , visited on 25 March 2013. See OAO Gazprom v. The Republic of Lithuania, , visited on 26 March 2013. Agreement Between the Government of the Russian Federation and the Government of the Republic of Lithuania on the Promotion and Reciprocal Protection of Investments. See InterTrade Holding GmbH v. The Czech Republic, , visited on 26 March 2013. Treaty Between the Federal Republic of Germany and the Czech and Slovak Federal Republic concerning the Promotion and Reciprocal Protection of Investments. See European American Investment Bank AG v. The Slovak Republic, , visited on 26 March 2013. Agreement between the Republic of Austria and the Czech and Slovak Federal Republic Concerning the Promotion and Protection of Investments.

͡ – Yanying Li and Camille M. Ng

9

PARTIES

BIT/MIT

TRIBUNAL

Achmea B.V. (formerly known as “Eureko B.V.”) v. The Slovak Republic o

Dutch- Slovak BIT p

Professor Vaughan Lowe QC (Presiding Arbitrator), Professor Albert Jan van den Berg, and Mr. V.V. Veeder QC

Mongolia-China BIT r

Donald Francis Donovan, Esq. (Presiding Arbitrator), Dr. Yas Banifatemi, and Mark A. Clodfelter, Esq

ASIA 10

China Heilongjiang International Economic & Technical Cooperative Corp., et al. v. Mongolia q

AUSTRALIA 11

Philip Morris Asia Ltd. v. The Commonwealth of Australia s

Hong Kong-Australia BIT t Professor Karl-Heinz Böckstiegel (Presiding Arbitrator), Professor Gabrielle Kaufmann-Kohler, and Professor Donald M. McRae

Of the cases listed above, three are of particular interest and shall be discussed in turn below.

o p q r

s t

See Achmea B.V. (formerly known as “Eureko B.V.”) v. The Slovak Republic, , visited on 26 March 2013. Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic. See China Heilongjiang International Economic & Technical Cooperative Corp., et al. v. Mongolia, , visited on 26 March 2013. Agreement between the Government of the Mongolian People’s Republic and the Government of the People’s Republic of China concerning the Encouragement and Reciprocal Protection of Investments. See Philip Morris Asia Ltd. v. The Commonwealth of Australia, , visited on 26 March 2013. Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments.

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a)

Philip Morris Asia Ltd. v. The Commonwealth of Australia

In an arbitration initiated in 2011 under the 2010 United Nations Commission on International Trade Law (UNCITRAL) Rules pursuant to the Hong Kong-Australia BIT of 1993,33 Phillip Morris claims that Australia’s Tobacco Plain Packaging Act 2011 “bars the use of intellectual property on tobacco products and packaging, transforming [the Claimant’s wholly-owned subsidiary] from a manufacturer of branded products to a manufacturer of commoditized products with the consequential effect of substantially diminishing the value of [the Claimant’s] investments in Australia.” 34 The first procedural meeting was held in Singapore in July 2012.35 In October 2012, the tribunal designated Singapore as the place of arbitration36 and postponed its decision on whether to bifurcate the proceedings into a jurisdictional phase and a merits phase to after the submission of the first round of pleadings.37 In November 2012, and after having considered the parties’ submissions on this matter, the tribunal clarified the confidentiality regime applicable to the arbitration.38 The parties are currently scheduled to exchange written submissions.

b)

Guaracachi America, Inc. & Rurelec plc v. Plurinational State of Bolivia

Initiated in 2010, this arbitration conducted under the 2010 UNCITRAL Rules involves the expropriation by Bolivia of a subsidiary of Guaracachi America, Inc. and Rurelec plc in the power sector of that country in May 2010, as well as certain

33 34 35 36 37 38

Philip Morris Asia Ltd. v. Australia, Procedural Order No. 1 dated 7 June 2012, para. 2.2, , visited on 28 March 2013. Philip Morris Asia Ltd. v. Australia, Procedural Order No. 3 dated 26 October 2012, para. 3, , visited on 28 March 2013. Philip Morris Asia Ltd. v. Australia, Procedural Order No. 2, para. 1.1,, visited on 28 March 2013. Philip Morris Asia Ltd. v. Australia case (Procedural Order No. 3), supra note 34. Philip Morris Asia Ltd. v. Australia, Procedural Order No. 4 dated 26 October 2012, s. VI, paras. 1, 3, , visited on 28 March 2013. In its decision, the Tribunal ordered that (1) the Registry shall publish the Tribunal’s awards, decisions, and orders on its website, subject to prior redaction. Neither parties shall be precluded from doing so; (2) All hearings, meetings and conferences shall be held in camera, and their transcripts shall be kept in confidence; (3) A Party may publish all documents that it has filed in the present arbitration, including all pleadings, memorials and submissions and all annexures (including witness statements and other evidence); (4) Each Party shall be permitted to make neutral public statements concerning the nature of the issues in dispute in these proceedings and its procedural status. See Philip Morris Asia Ltd. v. Australia, Procedural Order No. 5 dated 30 November 2012, s. V, , visited on 28 March 2013.

͡ – Yanying Li and Camille M. Ng

other measures taken by Bolivia which are alleged to have caused damage to the Claimants’ investments.39 After considering the parties’ views on bifurcation, the tribunal decided against having a separate hearing on Bolivia’s jurisdictional objections.40 The hearing on both jurisdiction and merits took place in early April 2013 in Paris.41 The parties are expected to submit their post-hearing briefs in late May 2013.42

c)

Bilcon of Delaware et al v. Government of Canada

In an arbitration initiated in 2008 under the 1976 UNCITRAL Rules and pursuant to Chapter 11 of North American Free Trade Agreement (NAFTA),43 Bilcon of Delaware Inc. and other claimants allege that certain government measures of Canada relating to the conduct of an environmental assessment of the claimants’ proposed quarry project44 were arbitrary, discriminatory, and fundamentally unfair, and that as a result, Canada had breached its obligations under NAFTA.45 In 2012, the tribunal addressed privilege claims in the document production process,46 decided disputes between the parties in relation to the designation of documents classified as politically or institutionally sensitive,47 clarified the parties’ obligation to produce documents that postdate the claimant’s notice of intent,48 and established a comprehensive procedural calendar for the remainder

39 40

41 42 43 44 45 46 47 48

See Guaracachi America, Inc. and Rurelec plc v. Bolivia, Notice of Arbitration, para. 4, , visited on 28 March 2013. See Guaracachi America, Inc. and Rurelec plc v. Bolivia, Procedural Order No. 10 dated 17 December 2012, , visited on 28 March 2013. See Guaracachi America, Inc. and Rurelec plc v. Bolivia, Hearing (audiorecordings) of 2-9 April 2013, , visited on 17 April 2013. See Guaracachi America, Inc. and Rurelec plc v. Bolivia, Procedural Order No. 19 dated 12 April 2013, , visited on 17 April 2013. See Bilcon of Delaware et al v. Government of Canada, , visited on 25 March 2013. See Bilcon of Delaware et al. v. Canada, Notice of Arbitration, paras. 10-11, , visited on 28 March 2013. See Bilcon of Delaware et al. v. Canada, Notice of Arbitration, paras. 11-12, , visited on 28 March 2013. See Bilcon of Delaware et al. v. Canada, Procedural Order No. 12 dated 2 May 2012, , visited on 28 March 2013. Bilcon of Delaware et al. v. Canada, Procedural Order No. 13 dated 11 July 2012, , visited on 28 March 2013. Bilcon of Delaware et al. v. Canada, Procedural Order No. 14 dated 19 September 2012, , visited on 28 March 2013.

The Permanent Court of Arbitration in ͚͙͚͘

of the proceedings.49 The hearing on both jurisdiction and merits is scheduled for 17 to 28 June 2013.50

͗.͘

Appointing Authority Cases

Both the 1976 and 2010 versions of the UNCITRAL Arbitration Rules empower the Secretary-General of the PCA to designate an appointing authority for the purpose of appointing arbitrators to tribunals or else ruling on challenges to the arbitrators appointed by the parties.51 Parties may also request that the SecretaryGeneral act directly as appointing authority under the UNCITRAL Rules or other procedural regimes.52 As seen in the chart below, the docket of the PCA with regard to Appointing Authority Cases has been steadily growing since 1976.

49

50 51

52

Bilcon of Delaware et al. v. Government of Canada, Procedural Order No. 15 dated October 17, 2012, p. 2, , visited on 28 March 2013. Ibid, p. 3. The UNCITRAL Rules 1976 is available at: , visited on 26 March 2013. The UNCITRAL Rules 2010 is available at: , visited on 26 March 2013. See Arbitration Services, , visited on 26 March 2013.

͡ – Yanying Li and Camille M. Ng

In 2012, the PCA received 39 new requests relating to its appointing authority services under the 1976 and 2010 UNCITRAL Rules and other ad hoc arbitration provisions.53 These requests are represented graphically below.

The Secretary-General designated an appointing authority in response to 17 such requests (the remaining 10 requests had been withdrawn or rendered moot by the parties’ subsequent agreement on the choice of appointing authority), acted as appointing authority with respect to all nine requests, and resolved all three arbitrator challenges.54 The PCA also continues to serve as the secretariat of the Appointing Authority to the Iran-United States Claims Tribunal. The current Appointing Authority is former President of the Supreme Court of the Netherlands (‘Hoge Raad’), Justice W.E. Haak. In 2012, and in consultation with the parties, Justice Haak appointed Professor Norbert Kronke and Judge Bruno Simma as third-country members of the Tribunal, effective July and December 2012, respectively.55

53 54 55

See Permanent Court of Arbitration 112th Annual Report, p. 16 (forthcoming). Ibid. Ibid., p. 18.

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͘ ͘.͕

Other Initiatives Host Country Agreements

The PCA seeks to enter into host country agreements with States that are signatories to either the 1899 or 1907 Conventions. These agreements secure certain privileges and immunities from the host country for adjudicators and participants in PCA-administered proceedings, such as fiscal exemptions or conditional immunity from legal processes, as well as the provision of facilities and services required for the proceedings themselves, such as office space and secretarial services.56 While the PCA has concluded nine such agreements since 1999,57 it reached two milestones with regard to host country agreements in 2012. First, on July 2012, the PCA utilised its host country agreement with Singapore for the first time, and secured from the Singapore government certain privileges and immunities for participants in the procedural meeting in Philip Morris Asia Ltd. v. Commonwealth of Australia and, in conjunction with the Singapore International Arbitration Centre, the provision of facilities and services for that meeting as well.58 Second, the PCA organised several events in Mauritius, where the PCA has maintained an office since 2010,59 including the Mauritius International Arbitration Conference 2012 60 and a judicial training workshop for over 40 Mauritian and African judges on the New York Convention.61 The PCA also supported the successful bid by Mauritius to host the 2016 International Council for Commercial Arbitration Congress.62

͘.͖

PCA Arbitration Rules

In December 2012, the Administrative Council adopted the ‘PCA Arbitration Rules 2012’, a set of modern procedural rules for the arbitration of disputes involving at

56 57 58

59 60

61 62

See Host Country Agreements, , visited on 26 March 2013. These nine States are as follows: Argentina, Chile, Costa Rica, India, Lebanon, Mauritius, Netherlands, Singapore, and South Africa. See Philip Morris Asia Ltd. v. Commonwealth of Australia, Procedural Order No. 2 dated 3 August 2012, , visited on 26 March 2013. See PCA Mauritius Office, , visited on 26 March 2013. See News: ‘PCA supports Second Mauritius International Arbitration Conference’, , visited on 26 March 2013. See News: ‘New York Convention Road Show launched in Mauritius’,, visited on 26 March 2013. See Latest News: ‘Mauritius to host second biennial congress in December 2012’,, visited on 26 March 2013.

͡ – Yanying Li and Camille M. Ng

least one State, State-controlled entity, or international organisation.63 The drafting committee was chaired by Professor Jan Paulsson. The new rules consolidate four sets of PCA procedural rules from the 1990s64 and update them, in light of the 2010 revisions to the UNCITRAL Arbitration Rules and the PCA’s experience with its existing procedural rules and the 1976 UNCITRAL Arbitration Rules.65 The PCA Arbitration Rules 2012 do not replace the sets of rules from the 1990s, which remain available to parties.

͘.͗

PCA Financial Assistance Fund

The Financial Assistance Fund was established by a 1994 agreement of the Administrative Council to help eligible developing countries offset the costs involved in international arbitration or other means of dispute settlement offered by the PCA.66 In 2012, the PCA extended a grant from this fund to a Latin American State.

͙

Conclusion

As the previous discussion shows, 2012 was an interesting year for the PCA. While the PCA’s original area of focus in State-to-State dispute resolution has become more active than at any time in the institution’s history, the PCA’s ability to respond to the evolving needs of the international community has greatly increased the demand for its services.

63

64

65 66

See News: ‘New PCA Arbitration Rules Adopted’, , visited on 26 March 2013. These four sets of PCA optional procedural rules are the Optional Rules for Arbitrating Disputes between Two States (1992), the Optional Rules for Arbitrating Disputes between Two Parties of Which Only One is a State (1993), the Optional Rules for Arbitration Between International Organizations and States (1996), and the Optional Rules for Arbitration Between International Organizations and Private Parties (1996). Ibid. See News: ‘New PCA Arbitration Rules Adopted’, supra note 63. See Permanent Court of Arbitration 112th Annual Report, supra note 33, p. 20.

͕͔

Fostering Stability and Confidence in the Financial Markets—A Global Affair P.R.I.M.E. Finance Prof. Dr. Gerard J. Meijer* and Camilla M.L. Perera-De Wit**

Abstract Making the current financial systems work more efficiently, in both the developed as well as the emerging markets, is not an easy task. According to the authors, a part of that task must be to ensure that financial market disputes are resolved more adequately and effectively. The impact of adequately settling disputes in global finance in both the emerging markets, as well as the developed markets, was for many years overlooked and underestimated. In addition, cross border impacts are unrecognised, the complexity of the cases misunderstood. And then there is the increase in the use of arbitration in financial market dispute resolution, which has given food for thought about the effect of litigating global financial markets disputes in court. The total notional amounts outstanding of over-the-counter derivatives amounted to USD 639 trillion at end-June 2012.1 Financial markets of this size have a strong impact on economies, both on a global level as well as on a local level. P.R.I.M.E. Finance stands for ‘Panel of Recognised International Market Experts in Finance’. The facility was established to help resolve, and to assist global judicial systems in the resolution of, disputes concerning complex financial transactions. This article outlines the reasons for the organisation’s creation and existence and gives a description of its scope, its services and its structure.

* **

1

Secretary General, P.R.I.M.E. Finance Registrar, P.R.I.M.E. Finance. Parts of this article were also published in previous publications by the same authors. This article also draws, with his permission, on previous speeches and writings by Professor Golden, including ‘The courts, the financial crisis and systematic risk’, in Capital Markets Law Journa 4 suppl 1(2009); and ‘Do we need a world court for the financial markets?’ in D. Vriesendrop et al. (eds), Liber in Honorem W.J. Deetman (The Hague Academic Press, 2008). Bank for International Settlements (BIS), ‘OTC derivatives markets activity in the first half of 2012’, 13 November 2012, , visited on 22 April 2013.

Nikos Lavranos, Ruth Kok, et al. (eds.), Hague Yearbook of International Law ͚͙͚͘. Copyright Koninklijke Brill NV. ISBN - - - . pp. .

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

͕

The need for P.R.I.M.E. Finance

The complex financial transactions’ world is subject, it is said, to “an immense black hole of legal uncertainty”.2 Legal uncertainty, or legal risk, is hardly new: It “has hovered over the derivatives market since the first swap”.3 Legal uncertainty is partly based on the concern about the ability of national courts to render decisions that can be relied upon with confidence by market participants in a complex world of increasingly connected markets and jurisdictions and partly a consequence of the very complexity of many complex financial transactions in the first place.4 Financial market litigation certainly seems to have increased since 2008. Financial market litigation is often complicated: Just as the transactions and the markets have become more complex, so have the disputes in relation thereto. And, because of standard contracts and terms, and the volume of trading covered by these, wrong decisions threaten systemic risk. Most prominently, the International Swaps and Derivatives Association, Inc. (‘ISDA’) has sponsored a wide range of documents for over-the-counter derivatives, including various editions of its master agreements (the ‘ISDA Master Agreement’). The ISDA Master Agreement is “one of the most widely used forms of agreement in the world … [and] … probably the most important standard market agreement used in the financial world”.5 The ISDA Master Agreement is not the only such market standard agreement, of

2

3 4 5

Baragwanath, ‘How should we resolve disputes in complex international financing transactions?’, paper delivered at the opening of P.R.I.M.E. Finance in the Peace Palace in The Hague on 16 January 2012. S. K. Henderson, Henderson on Derivatives (2nd ed., LexisNexis, UK, 2010), para. 10.1. J. Ross, ‘The case for P.R.I.M.E. Finance: P.R.I.M.E. Finance cases’, Capital Markets Law Journal 7 (2012), pp. 221-222. Lomas and others v. JFB Firth Rixson, Inc. and others, EWHC 3372 (Ch) 2010, para. 53.

Fostering Stability and Confidence in the Financial Markets

course.6 This has led to a form of global law ‘by’ but not yet ‘of’ contract.7 It is the ‘of’ contract that P.R.I.M.E. Finance has in part been founded to help establish.8 Although the idea of setting up a special subject matter dispute resolution facility for disputes between parties in the financial markets was first raised before the financial crisis, the need for such a facility was confirmed by the crisis, in view of the considerable number of financial market disputes it generated.9 To date, national courts and ad hoc arbitration have been unable to produce a settled and authoritative body of global law in this particular field. Especially troublesome is the fact that a serious difference in views has recently been expressed by the English and New York courts more than once on the same subject matter, and after long and protracted litigation.10 All this is not necessarily surprising given the often technical nature of the subject matter and the absence, in many jurisdictions, of dedicated financial courts. 6

7 8 9

10

Various market sponsor entities have sponsored and published several other forms of documentation (English and non-English) for OTC derivatives – including the European Master Agreement by ISDA; local language ISDA master agreements by the French and German banking associations; in China, the NAFMII Master Agreement by the National Association of Financial Markets Institutional Investors; and, in Australia, the AFMA schedules and documentation by the Australian Financial Markets Association. The New York Federal Reserve, together with the British Bankers’ Association, the Canadian Foreign Exchange Committee and the Tokyo Foreign Exchange Markets Committee, has sponsored and published the International Foreign Exchange Markets Agreement (IFEMA), the International FX and Currency Option Agreement (IFXCO), the Foreign Exchange and Options Master Agreement (FEOMA) and the International Currency Option Master (ICOM). In the case of repos, stock lending and foreign exchange transactions, the International Capital Market Association (ICMA) has drafted and sponsored various versions of its global master repurchase agreements (the GMRA), as has the Securities Industry Financial Markets Association; The International Securities Lending Association (ISLA) has drafted and sponsored various editions of its securities lending agreements (the SLA); and The Futures and Options Association (the FOA) has sponsored and published its FOA master netting agreements. Many documents in the bond and credit or loan markets are similarly standardised. For example, the Loan Market Association has sponsored and published its Multicurrency Term and Revolving Facilities Agreement. A French translation of this agreement has also been published. J. B. Golden, ‘The courts, the financial crisis and systemic risk’, Capital Markets Law Journal (2009), p. 4. Ross, supra note 5, pp. 221-222. J. P. Braithwaite, ‘OTC derivatives, the courts and regulatory reform’, Capital Markets Law Journal 7 (2012) pp. 364, 367-8. The author reports that, in the two-and-a half year period from the beginning of 2009, there were more trials, appeals and interim applications in the English courts involving ISDA documentation than there were in the whole of the 16 years before that put together. Golden and Perera, ‘Introducing P.R.I.M.E. Finance — The Hague Based Dispute Resolution Facility for Financial Market Disputes’, CapLaw, No. 1/2013 (2013).

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

There is a lot at stake, and the markets have a justifiable interest in having important cases decided by experts. The remedies in the derivatives markets, for instance, are very different from the remedies in the loan and bond markets, even though the contemplated cash flows may be similar. The cases, as a result, may be especially challenging for judges without considerable familiarity with the relevant industry contracts. Global market facts and trade usages are highly relevant, and need to be understood and accounted for. Judges need both an appetite for, and experience of, comparative law and practice and international finance.11 The idea of creating a specialised facility for the settlement of financial disputes was expressed for the first time by Professor Jeffrey Golden, Visiting Professor at the London School of Economics and Political Science, retired founding Partner of Allen & Overy LLP’s US law practice and former Senior Partner in the firm’s global derivatives practice, during a conference held in The Hague, in December 2007.12 In recognising that better regulation is only part of the answer, a roundtable meeting took place in The Hague in October 2010, following the G20 summit of finance ministers and central bankers in Korea, to explore the feasibility of P.R.I.M.E. Finance. The meeting was chaired by the former Lord Chief Justice of England and Wales, Lord Woolf, who was joined by 60 finance experts, including lawyers, judges, market representatives, Chief Legal Officers (‘CLOs’), regulators, central bank officials, and many of the founding fathers of the derivatives and structured finance industries. The market need for this initiative has been further identified through expert meetings in 2010 and 2011 with lenders, dealers and ‘buy-side’ market participants, jurists and financial market regulators in various financial centers of the world, including Dubai, Moscow, London, New York, Frankfurt, Paris, and Dublin. P.R.I.M.E. Finance was formally established in May 2011 and the first board meeting was held the following month. With the support from the Dutch authorities and the enthusiastic commitment of its experts, P.R.I.M.E. Finance, a Dutch not-for-profit foundation, officially opened for business on 16 January of 2012. Its first enquiry and fee quickly followed. Through its service of developing specialised derivatives and arbitration programmes for the judiciary, both in advanced and developing economies, P.R.I.M.E. Finance, together with collaborating entities, provides training, issues supporting expert advice, and engages in relevant research. Judicial training programmes are currently being developed on four

11 12

Golden and Perera, supra note 10. This article draws, with his permission, on previous speeches and writings by Professor Golden, including ‘The courts, the financial crisis and systematic risk’, Capital Markets Law Journa 4 suppl 1(2009); and ‘Do we need a world court for the financial markets?’ in D. Vriesendrop et al. (eds), Liber in Honorem W.J. Deetman (The Hague Academic Press, 2008).

Fostering Stability and Confidence in the Financial Markets

continents,13 while an award for ‘Best Newcomer’ at the Global Arbitration Review (‘GAR’) arbitration awards ceremony in Stockholm and nominations for several innovation awards have also recently been achieved.14 Also, a ‘P.R.I.M.E. Finance Fellowship’ has now been created at the Netherlands Institute for Advanced Study (‘NIAS’) to promote research in the field of law relevant to the activities of P.R.I.M.E. Finance.15 P.R.I.M.E. Finance is designed to serve the need for an adequate settlement of complex cases between parties in the financial markets, such as banks, insurance companies, financial institutions, investment funds, pension funds, and companies.16 By providing one-stop access to the best collective knowledge of law and market practice regarding derivatives and other complex financial products, P.R.I.M.E. Finance attempts to reduce legal uncertainty and to foster stability and confidence in the world of finance.

͖

Organisation

P.R.I.M.E. Finance’s Advisory Board is chaired by Lord Woolf of Barnes and its Management Board is chaired by Professor Jeffrey Golden. Although the Secretariat of P.R.I.M.E. Finance is based in The Hague, its reach is intended to be global and consequently the provision of services and expertise will be available to market parties worldwide. P.R.I.M.E. Finance will draw on the knowledge and expertise of the more than 90-strong Panel of Experts, including some of the most senior people in the financial markets. Among the experts are sitting and retired judges, central bankers, regulators, representatives from private practice and, of course, derivative market participants. It is a diverse and international group with a variety of backgrounds in terms of nationality, jurisdiction, location, market activity, and linguistic skills. This distinguished group of individuals has been carefully vetted and is strongly committed to the goals of the organisation. P.R.I.M.E Finance’s great strength lies in the knowledge and training of this group of legal and market experts, an offering which currently includes some of the most senior people both from the world of finance and financial markets law and from the world of arbitration with collectively more than 2,500 years of relevant experience. Through its Panel, P.R.I.M.E. 13 14

15 16

P.R.I.ME. Finance, Events, Judicial Training, , visited on 22 April 2013. Spalton and Clemmie, ‘The winners take it all’, Global Arbitration Review, 9 March 2012, , visited on 22 April 2013. NIAS, Current Fellows , visited on 22 April 2013. P.R.I.ME. Finance, About us, , visited on 22 April 2013.

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

Finance provides independent and multi-jurisdictional expertise in relation to complex financial transactions. It is a facility that is arguably unique within the world’s financial markets. P.R.I.M.E. Finance aims to be a centre of excellence, dedicated to promoting a more sophisticated approach to financial market dispute settlement, with a particular focus on issues arising in relation to industry standard documentation and market practices for derivatives and other complex financial products. As such, it endeavours to be an easily accessible, centralised, multi-linguistic and multi-cultural college of expertise. Its mission is to serve a public policy need by ensuring that the requisite expertise is available for the settlement of these complex cases, thereby reducing legal uncertainty and systemic risk and fostering stability and confidence in, and a more settled and authoritative body of law for, world finance.

͗

Services

P.R.I.M.E. Finance’s services will include: (i) dispute resolution services: the services to be offered will include arbitration, mediation, expert witness services and advisory services; P.R.I.M.E. Finance expects to be a forum for market participants from all over the world, (ii) judicial training: from the outset, P.R.I.M.E. Finance will provide training for judges through customized training programs, both upon request and through a series of conferences, which will draw upon the knowledge and experience of the organization’s experts, (iii) a library / database facility: P.R.I.M.E. Finance will develop and maintain a specific database of relevant case law and publications. As indicated above, P.R.I.M.E. Finance will not limit itself to providing dispute resolution services for the financial markets. Arbitration, mediation, and expertwitness services constitute only one—albeit important—linchpin on which P.R.I.M.E. Finance will base its future foundation. Its ambitious objectives include developing a centre of excellence that will promote a more sophisticated understanding of matters relating to documentation, law, and market practice in the fields of derivatives and other complex financial products. To this end, the services that P.R.I.M.E. Finance will deliver include the aforementioned training and a database of cases relating to complex financial transactions from all around the world. P.R.I.M.E. Finance has launched its training and technical assistance programme in support of domestic courts and judges, aimed at setting up round tables to provide jurists with a more sophisticated understanding of the documentation, relevant law, precedents, and market practices for derivatives and complex financial transactions. Judicial training activities on four continents are currently being developed in collaboration with the International Bar Association (‘IBA’), The Hague Institute for Global Justice (‘THIGJ’), and the American Bar Association (‘ABA’). This curriculum is being developed by a number of our Experts and close contacts, including sitting and retired judges. These round tables are

Fostering Stability and Confidence in the Financial Markets

expected to be multi-linguistic and multi-cultural, the programme will be implementable globally, but it will be tailored (depending on the state of local judicial knowledge and relevant case law and regulation) to specific jurisdictions. The working group on the development of the curriculum for the judicial training is chaired by the Hon. Ben F. Tennille (Ret.), a member of the Management Board of P.R.I.M.E. Finance and one of P.R.I.M.E. Finance’s experts. As part of the technical assistance and training programme, late last year P.R.I.M.E. Finance and the European Bank for Reconstruction and Development (‘EBRD’) conducted a one-day round-table session with the Supreme Arbitrage Court of the Russian Federation on derivatives instruments, trading, and regulation with a special focus on issues arising in the Russian derivatives market and international complex product cases. Particular attention was paid to issues relating to documentation, close-out netting, and standard contracts and terms. The session was attended by judges and relevant staff of the Supreme Arbitrage Court, the Moscow Districts Courts and senior representatives of the EBRD. The Russian session was followed by an extended presentation to the American College of Business Court Judges at their annual seminar at the George Mason Law School in Arlington, Virginia. The audience consisted of state court judges who manage complex business litigation courts across the United States, and who are most likely to see disputes involving derivatives and master agreements. The presentation provided an introduction to derivatives and the ISDA Master Agreement, its history, its place in the financial markets, and the current legal issues arising from its use. The development of the P.R.I.M.E. Finance database will aid in the global understanding of issues relating to complex financial transactions from around the world and it will facilitate the accessibility of relevant precedents and documents to judges and scholars. The process of developing the database started with a three-month research project at the NIAS, in which senior judge Sir David Baragwanath conducted an analysis of cases that could be submitted to P.R.I.M.E. Finance. During his research, Sir David concluded that there is a pressing need for greater professionalism in handling complex financial transactions and indicated that P.R.I.M.E. Finance is well-placed to bring clarity and authority to the field.

͘

Developing economies

As an evident example of the fact that the use of complex financial products is no longer restricted to London and New York, commodity derivatives, which are derivative contracts where the value of the contract is derived from an underlying commodity, such as metals, agricultural goods and energy, show what kind of impact complex financial products can have, as the use of these products can contribute significantly to rises in commodity prices, located in developing coun-

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

tries, which as a result impact local communities and individual lives there, as well as in the developed world.17 When looking at the functioning of the financial markets more closely, one may ask why the risks in relation to some of the more highly speculative products, such as bonds and derivatives, seem so marginally assessed. The manner in which risk is defined is crucial to the industry of finance. Bonds are certificates of debt, generally long-term, under the terms of which an issuer (such as a state or a municipality or company) contracts to pay the holder (an investor) a fixed principal amount on a stated future date and, usually, a series of interest payments during its life.18 Derivatives are a financial instrument that transfers risk from one party to the other. It derives its value from the price or rate of some other underlying assets such as bonds, loans, equities, currencies, commodities, indices, published rates, or combinations of those assets.19 By shifting risks from where they naturally fall to where they can best be managed, financial products, even if complicated in the eyes of some, can be useful tools in helping countries which may be single commodity dependent achieve sustainable development. Justice in the wider sense is more likely to be realised, if a measure of financial stability can also be ensured by encouraging effective risk management in this way.20 Human rights and the financial market place have never been more closely connected than in these times due to globalisation and the international and cross border nature of the agreements in place. It is not difficult to see how human rights have been affected by the financial crisis: the loss of jobs, the loss of housing and the increase in food prices are just examples of this. Instable markets very quickly can turn around a state’s financial position and people’s immediate livelihoods. The complexity of the derivatives products used by banks and others, and the risk management in relation thereto have serious effects on a State’s, and on an individual’s, financial position, and thereby also on some very basic and immediate human rights. The United Nations Secretary-General has defined the rule of law as: a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation

17 18 19 20

ISDA, Derivatives Consulting Group, DGC Glossary, , visited on 12 April 2013. Ibid. Ibid. Professor Golden and W.J. Deetman, supra note 12.

Fostering Stability and Confidence in the Financial Markets of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.21

In an aim to contribute to legal certainty, avoidance of arbitrariness and procedural and legal transparency, as described above, P.R.I.M.E. Finance will provide direct access to the best collective knowledge and experience on documentation, law and market practice for derivatives and other complex financial products, which in its turn is intended to develop and strengthen the rule of law globally. It intends to foster stability and confidence in the global financial markets, thereby contributing to social and economic stability and equality. P.R.I.M.E. Finance’s Panel of Experts hosts some of the key members of the Financial and ADR community, and the support they can provide to judiciaries will significantly aid jurisdictional understanding of the technicalities required to handle complex financial disputes. P.R.I.M.E. Finance aims to contribute to global justice and enhance the effectiveness of alternative dispute resolution through the support of judges, equipping local jurists with the knowledge and skills necessary to hear complex cases and issue sound and globally robust decisions. Judges who understand finance can help ensure the kind of rule of law that would support the contracts and trading that can achieve this.

͙

Growing Interest in Arbitration in the Financial Markets

By virtue of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), P.R.I.M.E. Finance arbitral awards can be enforced in more than 140 jurisdictions.22 The New York Convention is considered to be one of the key advantages of international arbitration. This was also confirmed by an ISDA working group on arbitration, which provided further insight into the use of arbitration in the derivatives markets.23 The working group indicated that the increase in the use of arbitration in the financial sector is driven primarily by a combination of the unattractiveness of litigating such disputes before the courts in many jurisdictions, particularly in emerging markets, and the considerable advantage of international enforcement of arbitral awards under 21

22 23

United Nations Security Council, The rule of law and transitional justice in conflict and post-conflict societies. Report of the Secretary General, 23 August 2004, para. 6, , visited on 12 April 2013. United Nations, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, United Nations Conference on International Commercial Arbitration. ISDA, ‘Memorandum for members of the International Swaps and Derivatives Association, Inc: Memorandum on arbitration in derivatives’, 19 January 2011; and ISDA, ‘The use of arbitration under an ISDA Master Agreement: feedback and policy options’, 10 November 2011, , visited on 13 April 2013.

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

the New York Convention, which, on a separate note, will also apply to arbitral awards rendered under the auspices of P.R.I.M.E. Finance. Agreements relating to cross border financial documentation increasingly contain arbitration clauses, for reasons mentioned above, and also because parties wish to resolve the dispute behind closed doors and because they would like to choose their own expert arbitration panel qualified to settle the dispute effectively and promptly. The P.R.I.M.E. Finance model arbitration clause (Annex I) is specifically drafted for cross-border finance documentation. A well-drafted arbitration clause is of the utmost importance, to avoid enforceability issues amongst others, where arbitration is the parties’ preferred basis for the resolution of their contractual disputes. A form of Amendment Agreement incorporating an arbitration clause for use in conjunction with ISDA Master Agreements is also being finalised at present (Annex II). Furthermore, P.R.I.M.E. Finance can look forward to the fact that its host jurisdiction, the Netherlands, already an arbitration-friendly country, has a new flexible and forward looking Arbitration Act currently before the Dutch Parliament. P.R.I.M.E. Finance was invited to review and has commented on the drafts of this new Act. Additionally, P.R.I.M.E. Finance has acquired observer status to the UNCITRAL Working Group II (Arbitration and Conciliation). As an observer member and a non-governmental entity, P.R.I.M.E. Finance may take the floor to present the views of the organisation on matters where it has expertise or international experience so as to facilitate UNCITRAL deliberations.

͚

P.R.I.M.E. Finance Arbitration Rules and Mediation Rules

The P.R.I.M.E. Finance Arbitration Rules and Mediation Rules were prepared in consultation with P.R.I.M.E. Finance’s Panel of Experts, comprising arbitration, mediation, and financial experts contributing expertise and knowledge to tailor the rules for disputes arising in financial markets. In addition, ISDA’s working group on arbitration was particularly inspirational, providing further insight in the use of arbitration in derivatives markets. The P.R.I.M.E. Finance Arbitration Rules are based on the globally used and well-tested UNCITRAL Arbitration Rules 1976 (as revised in 2010).24 In order to ‘institutionalise’ the UNCITRAL Rules, the P.R.I.M.E. Finance Secretariat has been built in as the body administering the arbitral proceedings. In preparing the Arbitration Rules, deviations from the original text have, to the extent possible, been kept to a minimum, both in order to ensure that reference can be made to the reputable legal commentaries on the UNCITRAL Arbitration Rules and in order to

24

United Nations, UNCITRAL Arbitration Rules (as revised in 2010), , visited on 12 April 2013.

Fostering Stability and Confidence in the Financial Markets

confirm the role that is attributed to the Permanent Court of Arbitration (‘PCA’) under those Rules. Under the UNCITRAL Rules, as adapted for P.R.I.M.E. Finance,25 the Secretary General of the PCA, also based in The Hague, acts as appointing authority for P.R.I.M.E. Finance unless the parties have designated another person or entity as appointing authority. P.R.I.M.E. Finance is modelled for a one or three member arbitrator tribunal. If parties do not make a choice on the same, then three arbitrators will be appointed, as in the disputes that are likely to be brought before P.R.I.M.E. Finance, parties may wish to compose a tribunal of both finance as well as arbitration experts. In case of a sole arbitrator, the arbitrator shall be appointed jointly by the parties. If three arbitrators are to be appointed, each party shall appoint one arbitrator. The two arbitrators will appoint the third arbitrator. The arbitrators shall, in principle, be selected from P.R.I.M.E. Finance’s approved list of experts. However, if, for example, parties to the arbitral proceedings prefer to choose arbitrators of a respective nationality which is not represented on the P.R.I.M.E. Finance list of approved experts, parties should be able to choose experts ad hoc from outside this list. P.R.I.M.E. Finance acknowledges that the parties’ freedom to choose the experts to the case at hand is an important feature of international arbitration. While Article 1.1 of the P.R.I.M.E. Finance Arbitration Rules allows for the parties to expressly modify the rules as they deem appropriate so as to enable them to actually choose arbitrators from outside P.R.I.M.E. Finance’s list of experts, P.R.I.M.E. Finance is currently reviewing its rules in order to include a mechanism to facilitate this without requiring the parties to make any express modification as referred to above. In case the appointment of an arbitrator by a party or by the two party-appointed arbitrators mechanism fails to occur, the Secretary General of the PCA may step in. The Secretary General of the PCA has agreed that, if a request to him for the selection of arbitrators is made under the Arbitration Rules of P.R.I.M.E. Finance, he will select arbitrators exclusively from P.R.I.M.E. Finance’s expert list. In addition, the P.R.I.M.E. Finance Arbitration Rules include certain provisions and annexes that reflect further particular needs of dispute resolution in the area of complex financial products. For example, the Arbitration Rules contain special provisions on fast-track proceedings, comprising expedited proceedings, emergency proceedings, and referee proceedings. In order to contribute to the aim of creating an authoritative body of law, the Arbitration Rules contain a special provision on the publication of arbitral awards. P.R.I.M.E. Finance may publish an arbitral award or order in its entirety if anonymised and if none of the parties objects to such publication within a certain time limit. It may always include in its publications excerpts of an arbitral award or order in anonymised form. 25

Ibid, Article 6 and P.R.I.ME. Finance, P.R.I.M.E Finance Arbitration Rules, 16 January 2012, Article 6 (1), , visited on 12 April 2013.

͙͘ – Prof. Dr. Gerard J. Meijer and Camilla M.L. Perera-De Wit

The P.R.I.M.E. Finance Mediation Rules are based on the UNCITRAL Conciliation Rules 1980 and on more recent developments in mediation; they have also been amended in order to better suit the purposes of P.R.I.M.E. Finance. Finally, it is worth noting that dispute resolution proceedings under the Rules of P.R.I.M.E. Finance may be conducted anywhere in the world. The P.R.I.M.E. Finance clause leaves the choice of the place of the arbitration open to the parties involved. The Rules also include the possibility for the arbitral tribunal to determine the place of arbitration if the parties have not previously agreed on it. 26 The place of arbitration is a legal, and not a geographical concept. As a general rule of thumb, the legal environment at the place of arbitration should be favourable to arbitration, with national courts providing support where necessary as opposed to interventionist ones. Also, it is strongly recommended that the place of arbitration be in a country that is a party to the New York Convention. Although it is not a requirement as such, parties frequently choose a politically and culturally ‘neutral’ place of arbitration. It is, thus, for the parties to carefully chose the place of arbitration and preferably to have knowledge of the applicable national arbitration act. In addition to parties being able to choose the place of arbitration, the hearings can take place anywhere in the world, be it in the place of arbitration or elsewhere. P.R.I.M.E. Finance has been offered use of the arbitration facilities in the Peace Palace, regardless of the legal seat of arbitration involved.

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Concluding observations

P.R.I.M.E. Finance was established to help resolve, and to assist global judicial systems in the resolution of, disputes concerning complex financial transactions. By providing one-stop access to the best collective knowledge of law and market practice regarding derivatives and other complex financial products, P.R.I.M.E. Finance attempts to reduce legal uncertainty and to foster stability and confidence in the world of finance. To carry out its mission, P.R.I.M.E. Finance will draw on the knowledge and expertise of its Panel of Experts. In fact, P.R.I.M.E Finance’s great strength lies in the knowledge and training of this group of legal and market experts. Through its Panel, P.R.I.M.E. Finance provides independent and multi-jurisdictional expertise in relation to complex financial transactions. As a primary service, P.R.I.M.E. Finance will offer dispute resolution mechanisms. There has been a growing interest in Arbitration in the Financial Markets, driven primarily by a combination of the unattractiveness of litigating such disputes before the courts in many jurisdictions, particularly from emerging markets, and the considerable advantage of international enforcement of arbitral 26

P.R.I.ME. Finance, P.R.I.M.E Finance Arbitration Rules, 16 January 2012, Article 18, , visited on 22 April 2013.

Fostering Stability and Confidence in the Financial Markets

awards under the New York Convention. These same benefits also apply to arbitral awards rendered under the auspices of P.R.I.M.E. Finance. Moreover, the parties may wish to have the dispute resolved behind closed doors and have the possibility to choose their own expert arbitration panel qualified to settle the dispute effectively and promptly. The P.R.I.M.E. Finance Arbitration Rules and Mediation Rules were prepared in consultation with P.R.I.M.E. Finance’s Panel of Experts, comprising arbitration, mediation, and financial experts contributing expertise and knowledge to tailor the rules for disputes arising in financial markets. In addition, ISDA’s working group on arbitration was particularly inspirational, providing further insight in the use of arbitration in derivatives markets. The P.R.I.M.E. Finance Arbitration Rules are based on the globally used and well-tested UNCITRAL Arbitration Rules 1976 (as revised in 2010). In order to ‘institutionalise’ the UNCITRAL Rules, the P.R.I.M.E. Finance Secretariat has been built in as the body administering the arbitral proceedings. In addition, the P.R.I.M.E. Finance Arbitration Rules include certain provisions and annexes that reflect further particular needs of dispute resolution in the area of complex financial products. Conversely, the P.R.I.M.E. Finance Mediation Rules are based on the UNCITRAL Conciliation Rules 1980 and on more recent developments in mediation; they have also been amended in order to better suit the purposes of P.R.I.M.E. Finance. However, P.R.I.M.E. Finance will not limit itself to providing dispute resolution services for the financial markets. It will also provide services related to judicial training and a library/database facility. Likewise, P.R.I.M.E. Finance’s work is not only intended for developed economies. Emerging economies are also of particular interest. Complex financial products can have great impact on emerging nations and human rights. For example, commodity derivatives, which are derivative contracts where the value of the contract is derived from an underlying commodity, such as metals, agricultural goods and energy, show what kind of impact complex financial products can have as the use of these products can contribute significantly to the rise in commodity prices, located in the developing countries, which as a result impact local communities and individual lives there as well as in the developed world. P.R.I.M.E. Finance aims to contribute to global justice and enhance the effectiveness of alternative dispute resolution through the support of judges, equipping local jurists with the knowledge and skills necessary to hear complex cases and issue sound and globally robust decisions. By doing so, it will foster stability and confidence in the global financial markets, thereby contributing to social and economic stability and equality.

About the Editorial Board

Mr. Dr. Nikos Lavranos, LL.M. Nikos Lavranos is a Senior Trade Policy Advisor responsible for all Dutch Bilateral Investment Treaties (BITs) at the Dutch Ministry of Foreign Affairs, The Hague. In the academic year 2008-2009, he was a Max Weber Fellow at the European University Institute (EUI) Florence. Before that he was a Senior Researcher and Senior Lecturer at the University of Amsterdam. In 2009 he published his second book on Jurisdictional Competition between international courts and tribunals. In 2004 he received his PhD from Maastricht University for his doctoral thesis on Decisions of International Organization in the European and Domestic Legal Orders of selected EU Member States. He also received an LLM-degree from Maastricht University and obtained a Law degree from J.W. Goethe University in Frankfurt. His main areas of expertise are: investment & arbitration law, WTO law, public international law and EU law (in particular external relations).

Ms. Dr. Ruth A. Kok, LL.M. Ruth Kok is a Member of the Legal Research Office (Section Criminal Law) of the Supreme Court of The Netherlands. In addition, she serves as a Substitute Judge at the Extradition Chamber of the District Court of Amsterdam (The Netherlands). In 2007 she received her PhD from Amsterdam University for her doctoral thesis on Statutory Limitations in International Criminal Law. She obtained her Law degree from Leiden University (The Netherlands). Her main expertise is (international) criminal law.

Ms. Dr. Hege Elisabeth Kjos, JD. Hege Elisabeth Kjos is Assistant Professor at the University of Amsterdam. Her courses and research focus on international law and international dispute settlement in general, and international investment law and arbitration in particular. She serves as Acting Director of the Amsterdam International Law Clinic and Dep-

About the Editorial Board

uty General Editor of Arbitration International (Kluwer). Hege Elisabeth was previously employed at the Legal Department of the World Bank in Washington D.C. She holds a Juris Doctor degree, a Cand. Mag. degree, and a Bachelor of Arts degree following studies in the United States, the Netherlands, France, and Norway. Her PhD degree was received from the University of Amsterdam.

Ms. Frederike E.M. Stikkelbroeck, LL.M. Frederike Stikkelbroeck is Senior Legal Counsel/Advocaat at the Legal Group of Akzo Nobel N.V. Before joining AkzoNobel, she was with the Hague Conference on Private International Law for five years, both as Attaché to the Secretary General and as Director of the Hague Conference International Centre for Judicial Studies and Technical Assistance. She was law associate (advocaat) at De Brauw Blackstone Westbroek N.V. (The Netherlands) from 2001 to 2006 and is admitted to the Amsterdam and Paris bars. She obtained her law degree from Radboud University Nijmegen (The Netherlands) where she specialized in Private International Law. Since 2002, she has served as deputy-secretary of the Netherlands Standing Government Committee on Private International Law.

Mr. Dr. Jure Vidmar, LL.M. Jure Vidmar is an Anglo-German Fellow in the Institute of European and Comparative Law, Faculty of Law, University of Oxford. He holds a doctorate in politics from the University of Salzburg and a doctorate in law from the University of Nottingham. Jure’s main research and teaching interests lie within public international law, human rights, European law, and political theory. His publications have mainly covered topics such as the creation, recognition and delimitation of states; human rights and democracy; the right of self-determination; the right to political participation and democratisation theory.

Ms. Marianne Lamour, LL.M. Marianne Lamour is a PhD student at the University of Paris Ouest Nanterre La Défense (France), where she is teaching European Union Law classes. She is also a member of the Cedin (Centre de droit international de Nanterre). She obtained an LLB in English and French Laws at the University of Essex (United Kingdom) and a Master in International and European Law at the University of Paris Ouest Nanterre La Défense.

About the Editorial Board

Ms. Emily Lewis, LL.M. Emily Lewis is a student at the University of Amsterdam (The Netherlands), where she completed her Masters in International and European Law. She obtained her L.L.B in English Law at the University of Manchester (United Kingdom).