Monday, March 14, 2011

Emilio Augustín Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7

The Argentine claimant in Maffezini sought to avoid the requirement in the Argentina-Spain BIT that disputes first be submitted to a Spanish court and that the claimant wait 18 months after that lawsuit was filed to submit the dispute to arbitration. The claimant argued that the Chile-Spain BIT contained no such requirement and, therefore, Chilean investors in Spain received more favorable treatment to which the claimant was entitled under the MFN clause in the Argentina-Spain BIT. Spain argued that, in extending MFN privileges with respect to “all matters subject to this agreement,” the treaty parties intended to refer only to substantive investment protections, not to dispute resolution procedures provided in the BIT. Based on the broad MFN language in the Argentina-Spain BIT and relying on Ambatielos, the Maffezini tribunal concluded that “there are good reasons to conclude that today dispute settlement arrangements are inextricably related to the protection of foreign investors, as they are also related to the protection of rights of traders under treaties of commerce,” and therefore that dispute resolution procedures from one BIT could be imported into another BIT through its MFN clause.

 
Source: http://wwhttp://www.iilj.org/research/documents/IF201011.Bigge.pdfw.iilj.org/research/documents/IF2010-11.Bigge.pdf

Saluka Investments B.V. vs The Czech Republic

An international arbitral tribunal had found that the Czech Republic breached the international treaty between the Netherlands and the Czech Republic for the promotion and protection of investments in an action brought by Nomura affiliate Saluka Investments B.V. (Saluka).    Saluka held 46.16% of the shares of Investicni a Postovni banka (IPB) in the Czech Republic. Following a programme of discriminatory state aid to IPB’s competitors, the Czech Republic placed IPB into forced administration in June 2000 and transferred its business over the following weekend to rival Ceskoslovenska Obchodni banka (CSOB) for one Czech crown.
 
The arbitral tribunal held the Czech Republic’s actions to be a breach of its obligation to treat foreign investors fairly and equitably. The case has further proceeded  to its second phase, in which the arbitral tribunal assessed the amount of damages that the Czech Republic had to pay.

Merrill & Ring v. Canada

This case concerns a claim by the Investor in respect of the implementation of Canada‘s Log Export Regime to the Investor‘s timber operations in British Columbia and the requirement that any of its exports be subject to a log surplus testing procedure, among other regulatory measures. The U.S. firm had contended that Canada imposed restrictions on the export of logs from Canada to the United States, and that these restrictions obliged the company to sell its products in Canada for less than they could fetch if exported to the United States. The claimant also objected to the administration of the log export regime which was viewed as exerting unfair, un-transparent and discriminatory effects.
An important issue related to the relevance of different levels of government lies in the context of "in like circumstances". The Tribunal refers to "nationality-based discrimination" and also mentions "differentiated treatment which is arbitrary and unjustified." The Tribunal rejected the claims under either standard.  With the nationality-based argument, it said there was no evidence; on the "differentiated treatment" point, it went back to its "categories" reasoning. 

Sunday, March 13, 2011

Plama Consortium Limited (PCL) v Bulgaria

         In a 27 August 2008 decision, a tribunal has concluded that Plama Consortium Limited (PCL), a Cyprus firm, was not entitled to protections afforded under the Energy Charter Treaty (ECT), given that it had fraudulently misrepresented itself when it invested in a privatized refinery, Nova Plama AD. In addition, the Tribunal found that even if PCL were entitled to certain ECT protections, the Republic of Bulgaria did not breach its treaty obligations. As a result, PCL was ordered to pay all the fees and expenses of the Tribunal and ICSID’s administrative charges, as well as USD$ 7 million in legal fees and other costs incurred by Bulgaria.
        PCL had sought some USD$ 122 million in damages plus interest for alleged breaches of obligations under the ECT and Cyprus-Bulgaria bilateral investment treaty, after Nova Plama AD had its assets liquidated to meet creditors’ claims. Specifically, PCL argued that Bulgaria (i) failed to create stable, equitable, favorable and transparent conditions for the investment, (ii) failed to provide the investment with fair and equitable treatment, (iii) failed to provide the investment constant protection and security, (iv) subjected the investment to unreasonable and discriminatory measures, (v) breached its contractual obligations vis-à-vis PCL, and (vi) subjected the investment to measures having an effect equivalent to expropriation.
        In defense, Bulgaria raised objections to the Tribunal’s jurisdiction over the admissibility of PCL’s claims by arguing that the company’s investment in Nova Plama AD involved misrepresentations in violation of Bulgarian law. As a result, Bulgaria asserted that the investment was void ab initio (from the beginning) under Bulgarian law and, therefore, not an “investment” as contemplated by the ECT.
While the Tribunal found that Bulgaria’s allegations of misrepresentation did not deprive it of jurisdiction to hear this case, they did bar PCL from seek protection under the ECT given that its investment in Nova Plama AD was obtained by fraud. The Tribunal concluded that “[t]he investment in Nova Plama was . . . the result of a deliberate concealment amounting to fraud, calculated to induce the Bulgarian authorities to authorize the transfer of shares to an entity that did not have the financial and managerial capacities . . .” required to continue with its operations. 
        Consequently, the Tribunal determined that PCL’s investment violated not only Bulgarian law but international law, including the principle of good faith, the principle of auditor propriam turpitudinem allegans—that nobody can benefit from his own wrong and international public policy—and that a contract obtained by wrongful means should not be enforced by a tribunal.
While the Tribunal went on to dismiss the PCL’s allegations against Bulgaria, the importance of this decision lies in the Tribunal’s unequivocal rejection of claims made by dishonest investors. Similar to the adage originating in the English courts of equity that “he who comes to equity must come with clean hands”, the Tribunal’s decision affirms that if investors want to seek refuge under international treaties, honesty is the best policy.

Source: http://www.iisd.org/itn/2008/09/30/plama-consortium-limited-v-republic-of-bulgaria-honesty-is-the-best-policy/

Burlington Resources Inc v Republic of Ecuador

In  Burlington Resources Inc v Republic of Ecuador (ICSID Case No ARB/08/5) the tribunal considered whether it had jurisdiction over claims relating to tax legislation and lack of protection against indigenous protests.

Ecuador objected the tribunal's jurisdiction over non-expropriation claims raised by a US oil company based on Ecuador's tax legislation and indigenous opposition to the claimant's oil exploration in Ecuador. Most of Ecuador's objections were successful. The tribunal found that it did not have jurisdiction in relation to:
  • Non-expropriation claims which challenged Ecuador's tax legislation, as these matters were outside the scope of the US-Ecuador bilateral investment treaty (BIT).
  • Claims relating to breach of contract.
  • Claims relating to the breach of the obligation to provide full protection and security, as the claimant did not fulfil the necessary requirements before filing a request for ICSID arbitration, which made these claims inadmissible.
The tribunal adjourned one jurisdictional issue to the merits phase, as a related objection by Ecuador had not been sufficiently discussed. The dispute will now proceed to the merits phase, as Ecuador did not object to the tribunal's jurisdiction in relation to claims of expropriation.
The tribunal's decision was based on a strict interpretation of the BIT and is a good illustration of how a BIT exceptions clause relating to tax issues works in practice. It also provides a useful analysis of "investment" and "investment agreement", and illustrates the importance of compliance with treaty obligations to negotiate and give notice of a dispute before proceeding to submit a dispute to arbitration.

Source: http://dispute.practicallaw.com/1-502-7188#null

Saturday, March 12, 2011

Dallah Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan


1. Facts of the Case
The Claimant, Dallah Real Estate and Tourism Holding Company “Dallah” is a Saudi Arabian company providing services for the Holy Places. In 1995 the Claimant and the Pakistani Government signed a memorandum of understanding to provide housing for Pakistani Hajj pilgrims in Mecca. The Pakistani Government set up a trust which would enter into a long-term agreement with Dallah. The contract was established between the Awami Hajj Trust (the “Trust”) and Dallah, was signed in September 1996. The contract included an arbitration clause providing for ICC arbitration in Paris in the event of a dispute. The Government appeared in the Contract as guarantor of a loan to the benefit of the Trust and the Trust had the right to assign its rights and obligations under the Contract to the Government. After 6 November 1996, the Trust ceased to exist after a new Pakistani Government not promulgating the necessary Ordinance under Pakistani law to allow the Trust to continue.

 In 1998, Dallah commenced arbitration proceedings against the Government under ICC rules in Paris seeking damages for breach of contract. The Government refused to take part in the proceedings on the basis that it was not a party to the Contract and it did not consent to arbitration under the arbitration clause in the Contract. The arbitral tribunal had held in a first partial Award on 26 June 2001, that as a non signatory, the Government of Pakistan was bound by the arbitration agreement. The decision of the Tribunal relied on transnational principles and usages, factual circumstances of the case with particular regard to the parties conduct and intention. The Tribunal held a second partial award on liability in 19 January 2004 and the final award against the Government of Pakistan on 23 June 2006, with damages in the amount of USD 20,588,040. Dallah tried to enforce the Award in England. The Government opposed enforcement in England, Aikens J decline to enforce the Award on the grounds of section 103 (2) (b) of the English Arbitration Act 1996, because of the non existence of a arbitration agreement between the parties. Subsequently, the Court of Appeal dismissed Dallah's appeal on 20 July 2009 and the issue came before the Supreme Court. The Government also made an application to the French Courts to set aside the Award. Dallah asked the Supreme Court to stay its proceedings pending a decision in France. The Supreme Court denied the stay and in the judgment, declined to enforce the arbitral award in favor of Dallah Real Estate and Tourism Holding Company. The Paris Court of Appeal, in February 2011, decided that the Government of Pakistan is a party to the arbitration agreement, rejecting the annulment proceedings.

Friday, March 11, 2011

Ronald Lauder vs. the Czech Republic

The CME v. Czech Republic and Lauder v. Czech Republic were cases decided by two different tribunals in 2001. It is prime example of conflicting decisions in international arbitration and subject of many treatises, with some authors going as far as calling it "the ultimate fiasco in investment arbitration". In 1993, US national Ronald Lauder invested into Czech private television broadcaster TV nova by means of his German company (which was later succeeded by Dutch company Central European Media (CME)). Some 20 suits started in front of the Czech courts and international tribunals, including UNCITRAL arbitrations CME v. Czech Republic and Lauder v. Czech Republic, after his business partner, Czech citizen Vladimír Železný, effectively deprived CME of its investment by breaking off the deal between Lauder's and Železný's companies. CME and Lauder respectively sought damages for alleged interference of the Czech Media Council, a government entity granting broadcasting licences, into the business arrangements between Lauder's and Železný's companies, which supposedly eventually contributed to loss obtained by Lauder. Effectively dealing with the same facts , the tribunals handed down two contradictory arbitral awards: one dismissed the claim by Lauder, while the other awarded CME damages of $270 million and 10% interest.

Procedural issues

The tribunals had to deal with a number of procedural issues. Firstly it was the fact, that the same dispute was submitted to the Czech courts, to the other arbitration in Stockholm/London respectively, and also to ICC as a proceeding between Železný and CME. The London arbitration observed, that neither Lauder nor the Czech Republic are parties to any of the numerous proceedings, and that none of these courts would decide on the basis of USA-CZ treaty and that the concurrent Stockholm arbitration will base its decision on NL-CZ treaty. On the other hand the Stockholm arbitration stressed out that "a party may seek its legal protection under any scheme provided by the laws of the host country ... (and that the both bilateral investment treaties) are part of the laws of the Czech Republic and neither of the treaties supersedes the other. The London panel noted, that collecting damages by the Claimant in either of the processes may reduce the damage claimed in the present proceeding, and it further pointed out, that the Czech Republic refused de facto consolidation of the two proceedings by insisting on different arbitral tribunals in the cases, rather than having the same tribunal decide both, as proposed by Lauder and CME.

Merits

The London tribunal held that the Czech Republic "did not take any measure of, or tantamount to, expropriation of the Claimant's property rights within any of the time periods, since there was no direct or indirect interference by the Czech Republic in the use of Mr. Lauder's property or with the enjoyment of its benefits."
Source: http://en.wikipedia.org/wiki/CME/Lauder_v._Czech_Republic#Decisions

Eureko BV v the Slovak Republic

In Eureko BV v the Slovak Republic (PCA Case No 2008-13, UNCITRAL Arbitration Rules) Award on Jurisdiction, Arbitrability and Suspension, an UNCITRAL tribunal considered Slovakia's jurisdictional objection based on its accession to the EU.

The dispute arose under the bilateral investment treaty between the Netherlands and the Czech and Slovak Federal Republic. The claimant was a Dutch financial services group. The underlying dispute was based on the claimant's allegations of indirect expropriation caused by Slovakia's reversal of the liberalisation of its health insurance market in 2006. The respondent in an UNCITRAL arbitration, Slovakia, raised a jurisdictional objection claiming that the bilateral investment treaty (BIT) between Slovakia and the Netherlands was terminated by virtue of the accession of Slovakia to the EU. The tribunal rejected the objection and found it had jurisdiction over the dispute.

The tribunal found that:
  • The BIT had not been terminated.
  • The BIT was not incompatible with EU law, and therefore applied.
  • The BIT granted more extensive rights to investors than existed under EU law.
  • The arbitration clause in the BIT did not violate EU law.
  • The relevance of EU law to the dispute did not make the dispute non-arbitrable.
The award addresses the controversial issue of "intra-EU BITs" and contains the tribunal's in-depth observations concerning differences in the standard of investor protection offered under the BIT and EU law, and the European Commission's observations concerning intra-EU BITs. The award illustrates the potential competition between two overlapping regimes of international economic law: EU law on the one hand, and intra-EU BITs on the other. (Eureko BV v the Slovak Republic (PCA Case No 2008-13, UNCTIRAL Arbitration Rules) Award on Jurisdiction, Arbitrability and Suspension (26 October 2010).)

Source: http://dispute.practicallaw.com/7-503-9310#null

Mavrommatis case (Greece v. United Kingdom)

The foundations of diplomatic protection were stated in 1924 by the Permanent International Court of Justice in connection with the Mavrommatis case: "It is an elementary principle of international law that a State is entitled to protect its subjects, when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channels. By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights – its right to ensure, in the person of its subjects, respect for the rules of international law." Diplomatic protection thus has its origins in the idea of a fusion of private and state interests.

The main facts are the following:
Mavrommatis, a Greek national, was in 1914 granted concessions by the Ottoman authorities for certain public works in what later became the British mandated territory of Palestine. Greece alleged that Great Britain, through the Palestine Government, had refused fully to recognize the concessions in Jerusalem and Jaffa, principally by having granted to a Mr. Rutenberg concessions partially overlapping those enjoyed by Mavrommatis, and accordingly sought compensation. Art. 26 of the mandate, conferring jurisdiction on the P.C.I.J., applied to disputes relating to the interpretation or application of the provisions of the mandate between Great Britain and another member of the League of Nations which could not be settled by negotiation. On a preliminary objection by Great Britain to jurisdiction, on 30 August 1924, the Court held (7 to 5) that it had jurisdiction in respect of the Jerusalem concessions, but not the Jaffa concessions. The dispute was between Great Britain and another member of the League of Nations. ‘It is an elementary principle of international law that a State is entitled to protect its subjects, when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channels. By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf, a State is in reality asserting its own rights—its right to ensure, in the person of its subjects, respect for the rules of international law. The question, therefore, whether the present dispute originates in an injury to a private interest, which in point of fact is the case in many international disputes, is irrelevant from this standpoint. Once a State has taken up a case on behalf of one of its subjects before an international tribunal, in the eyes of the latter the State is sole claimant’: P.C.I.J., Ser. A, No. 2 at 12. The dispute could not in the circumstances of the case be settled by negotiation; and (so far as concerned the Jerusalem concession, but not the Jaffa concession) related to a relevant provision of the mandate. Although Protocol XII of the Treaty of Lausanne of 24 July 1923 (28 L.N.T.S. 11;), which formed the Peace Treaty with Turkey, contained provisions expressly relating to the recognition of concessions in Palestine but without recognizing the Court's jurisdiction in cases of dispute, it complemented the mandate and did not render inoperative its jurisdictional clauses. The PCIJ summarized the ‘legal dispute’ in Mavrommatis as follows: ‘[…] a dispute is a disagreement on a point of law or fact, a confl ict of legal views or interests between two persons.’


Source: http://www.answers.com/topic/mavrommatis-jerusalem-concessions-case

Monday, March 7, 2011

New York Convention 1958

Article I

1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

2. The term "arbitral awards" shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.

3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State. It may also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration.


Article II


1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

2. The term "agreement in writing" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.


Article III


Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards


Article IV


1. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply:


(a) The duly authenticated original award or a duly certified copy thereof; (b) The original agreement referred to in article II or a duly certified copy thereof.
2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.
Article V



1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:


(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or (b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or (c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or (d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) The award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or (b) The recognition or enforcement of the award would be contrary to the public policy of that country.
Article VI


If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V (1) (e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.


Article VII


1. The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.

2. The Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 shall cease to have effect between Contracting States on their becoming bound and to the extent that they become bound, by this Convention.


Article VIII


1. This Convention shall be open until 31 December 1958 for signature on behalf of any Member of the United Nations and also on behalf of any other State which is or hereafter becomes a member of any specialized agency of the United Nations, or which is or hereafter becomes a party to the Statute of the International Court of Justice, or any other State to which an invitation has been addressed by the General Assembly of the United Nations.

2. This Convention shall be ratified and the instrument of ratification shall be deposited with the Secretary-General of the United Nations.


Article IX


1. This Convention shall be open for accession to all States referred to in article VIII.

2. Accession shall be effected by the deposit of an instrument of accession with the Secretary-General of the United Nations.


Article X


1. Any State may, at the time of signature, ratification or accession, declare that this Convention shall extend to all or any of the territories for the international relations of which it is responsible. Such a declaration shall take effect when the Convention enters into force for the State concerned.

2. At any time thereafter any such extension shall be made by notification addressed to the Secretary-General of the United Nations and shall take effect as from the ninetieth day after the day of receipt by the Secretary-General of the United Nations of this notification, or as from the date of entry into force of the Convention for the State concerned, whichever is the later.

3. With respect to those territories to which this Convention is not extended at the time of signature, ratification or accession, each State concerned shall consider the possibility of taking the necessary steps in order to extend the application of this Convention to such territories, subject, where necessary for constitutional reasons, to the consent of the Governments of such territories.


Article XI


In the case of a federal or non-unitary State, the following provisions shall apply:


(a) With respect to those articles of this Convention that come within the legislative jurisdiction of the federal authority, the obligations of the federal Government shall to this extent be the same as those of Contracting States which are not federal States; (b) With respect to those articles of this Convention that come within the legislative jurisdiction of the constituent states or provinces which are not, under the constitutional system of the federation, bound to take legislative action, the federal Government shall bring such articles with a favourable recommendation to the notice of the appropriate authorities of constituent states or provinces at the earliest possible moment; (c) A federal State Party to this Convention shall, at the request of any other Contracting State transmitted through the Secretary-General of the United Nations, supply a statement of the law and practice of the federation and its constituent units in regard to any particular provision of this Convention, showing the extent to which effect has been given to that provision by legislative or other action.
Article XII


1. This Convention shall come into force on the ninetieth day following the date of deposit of the third instrument of ratification or accession.

2. For each State ratifying or acceding to this Convention after the deposit of the third instrument of ratification or accession, this Convention shall enter into force on the ninetieth day after deposit by such State of its instrument of ratification or accession.


Article XIII


1. Any Contracting State may denounce this Convention by a written notification to the Secretary-General of the United Nations. Denunciation shall take effect one year after the date of receipt of the notification by the Secretary-General.

2. Any State which has made a declaration or notification under article X may, at any time thereafter, by notification to the Secretary-General of the United Nations, declare that this Convention shall cease to extend to the territory concerned one year after the date of the receipt of the notification by the Secretary-General.

3. This Convention shall continue to be applicable to arbitral awards in respect of which recognition or enforcement proceedings have been instituted before the denunciation takes effect.


Article XIV


A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting States except to the extent that it is itself bound to apply the Convention.


Article XV


The Secretary-General of the United Nations shall notify the States contemplated in article VIII of the following:


(a) Signatures and ratifications in accordance with article VIII; (b) Accessions in accordance with article IX; (c) Declarations and notifications under articles I, X and XI; (d) The date upon which this Convention enters into force in accordance with article XII; (e) Denunciations and notifications in accordance with article XIII.

Article XVI


1. This Convention, of which the Chinese, English, French, Russian and Spanish texts shall be equally authentic, shall be deposited in the archives of the United Nations.

2. The Secretary-General of the United Nations shall transmit a certified copy of this Convention to the States contemplated in article VII.

Wednesday, March 2, 2011

ICJ competence

Article 34

1. Only states may be parties in cases before the Court.
2. The Court, subject to and in conformity with its Rules, may request of public international organizations information relevant to cases before it, and shall receive such information presented by such organizations on their own initiative.
3. Whenever the construction of the constituent instrument of a public international organization or of an international convention adopted thereunder is in question in a case before the Court, the Registrar shall so notify the public international organization concerned and shall communicate to it copies of all the written proceedings.

Article 35

1. The Court shall be open to the states parties to the present Statute.
2. The conditions under which the Court shall be open to other states shall, subject to the special provisions contained in treaties in force, be laid down by the Security Council, but in no case shall such conditions place the parties in a position of inequality before the Court.
3. When a state which is not a Member of the United Nations is a party to a case, the Court shall fix the amount which that party is to contribute towards the expenses of the Court. This provision shall not apply if such state is bearing a share of the expenses of the Court

Article 36

1. The jurisdiction of the Court comprises all cases which the parties refer to it and all matters specially provided for in the Charter of the United Nations or in treaties and conventions in force.
2. The states parties to the present Statute may at any time declare that they recognize as compulsory ipso facto and without special agreement, in relation to any other state accepting the same obligation, the jurisdiction of the Court in all legal disputes concerning:
a. the interpretation of a treaty;
b. any question of international law;
c. the existence of any fact which, if established, would constitute a breach of an international obligation;
d. the nature or extent of the reparation to be made for the breach of an international obligation.
3. The declarations referred to above may be made unconditionally or on condition of reciprocity on the part of several or certain states, or for a certain time.
4. Such declarations shall be deposited with the Secretary-General of the United Nations, who shall transmit copies thereof to the parties to the Statute and to the Registrar of the Court.
5. Declarations made under Article 36 of the Statute of the Permanent Court of International Justice and which are still in force shall be deemed, as between the parties to the present Statute, to be acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they still have to run and in accordance with their terms.
6. In the event of a dispute as to whether the Court has jurisdiction, the matter shall be settled by the decision of the Court.

Article 37

Whenever a treaty or convention in force provides for reference of a matter to a tribunal to have been instituted by the League of Nations, or to the Permanent Court of International Justice, the matter shall, as between the parties to the present Statute, be referred to the International Court of Justice.

Article 38

1. The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply:
a. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states;
b. international custom, as evidence of a general practice accepted as law;
c. the general principles of law recognized by civilized nations;
d. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.
2. This provision shall not prejudice the power of the Court to decide a case ex aequo et bono, if the parties agree thereto.

Preliminary Objections (Nigeria v. Cameroon), Judgment of 1995

On 29 March 1994, Cameroon filed an application instituting proceedings against Nigeria in a dispute concerning the question of sovereignty over the Bakassi Peninsula, which it claimed was in part under military occupation by Nigeria, and requested the Court to determine the course of the maritime frontier between the two States in so far as that frontier had not already been established by the Maroua Declaration signed by the Cameroonian and Nigerian Heads of State in 1975.
As a basis for the jurisdiction of the Court, Cameroon referred to the declarations made by both States whereby they accept that jurisdiction as compulsory (Article 36, paragraph 2, of the Statute of the Court). In an additional application filed on 6 June 1994, Cameroon extended the case to a further dispute with Nigeria over "a part of the territory of Cameroon in the area of Lake Chad", which it claimed was also occupied by Nigeria. Cameroon asked the Court to specify definitively the frontier between itself and Nigeria from Lake Chad to the sea, to order the withdrawal of Nigerian troops from Cameroonian territory and to determine reparation for the material and non-material damage inflicted.
The Court was  asked to adjudge and declare not only "sovereignty over the disputed parcel in the area of Lake Chad" but also to "specify definitively the frontier between Cameroon and the Federal Republic of Nigeria from Lake Chad to the sea" (a distance of approximately 1,680 kilometres).
Nigeria submits:
(1) that Cameroon, by lodging the Application on 29 March 1994, violated its obligations to act in good faith, acted in abuse of the system established by Article 36.2 of the Statute, and disregarded the requirement of reciprocity established by Article 36.2 of the Statute and the terms of Nigeria's Declaration of 3 September 1965;
(2) that consequently the conditions necessary to entitle Cameroon to invoke its Declaration under Article 36.2 as a basis for the Court's jurisdiction did not exist when the Application was lodged; and
(3) that accordingly, the Court is without jurisdiction to entertain the Application.
 
In a Judgment rendered on 11 June 1998, the Court rejected seven of the preliminary objections raised by Nigeria and declared that an eighth one would have to be dealt with during the proceedings on the merits. It further declared that it had jurisdiction in the case and found Cameroon's claims admissible.

Tuesday, March 1, 2011

ICJ preliminary objections Costa Rica v Nicaragua, Nicaragua v US

Dispute Regarding Navigational and Related Rights (Costa Rica v. Nicaragua), Judgment of 13 July 2009
135.  It was only in its Rejoinder that Nicaragua submitted that the claim was not admissible on the ground that this particular claim was not included nor was it implicit in the Application. Nicaragua also asserts that this claim did not arise directly out of the subject-matter of the Application.
136. Costa Rica in the first round of the oral hearings, as well as discussing the merits of the claim, addressed its admissibility in some detail. It submitted, first, that Nicaragua, by pleading to the merits in the Counter-Memorial, implicitly accepted the admissibility of the fisheries claim; second, that Nicaragua was to be taken as having consented to the jurisdiction of the Court and is debarred from raising the issue; third, that Costa Rica had reserved the right to supplement and modify its Application; fourth, that the claim was implicitly included as being “a step to aggravate and extend the dispute”, a matter included in the Application; and, fifth, the claim fell within“other applicable rules of international law” also referred to in the Application. 
137. The Court recalls at the outset that admissibility is distinct from jurisdiction. In the  current instance the Court is dealing with the question of admissibility. It is further recalled that it is for the Court to determine in the light of the circumstances of each case whether an application is admissible (Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, Judgment, I.C.J. Reports 1992, p. 240). Under Article 40, paragraph 1, of the Statute of the Court, the “subject of the dispute” must be indicated in the Application; as established in the Court’s jurisprudence, an additional claim must have been implicit in the Application (Temple of Preah Vihear (Cambodia v. Thailand), Merits, Judgment, I.C.J. Reports 1962, p. 36) or must arise “directly out of the question which is the subject-matter of that Application” (Fisheries Jurisdiction (Federal Republic of Germany v. Iceland), Merits, Judgment, I.C.J. Reports 1974, p. 203, para. 72). With regard to Nicaragua’s argument that Costa Rica’s claim relating to subsistence fishing is inadmissible on the grounds that Costa Rica failed to include, even implicitly, the claim in its Application, the Court notes that the alleged interferences by Nicaragua with the claimed right of subsistence fishing post-date the filing of the Application.As to Nicaragua’s second argument that the claim does not arise directly out of the subject-matter of the Application, the Court considers that in the circumstances of this case, given the relationship between the riparians and the river and the terms of the Application, there is a sufficiently close connection between the claim relating to subsistence fishing and the Application, in which Costa Rica, in addition to the 1858 Treaty, invoked “other applicable rules and principles of international law”.
139. Accordingly, Nicaragua’s objection to admissibility cannot be upheld.


Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Jurisdiction and Admissibility, Judgment of 26 November 1984, ICJ Reports 1984, pp. 429-442:84. 

The Court now turns to the question of the admissibility of the Application of Nicaragua. The United States of America contended in its Counter-Memorial that Nicaragua's Application is inadmissible on five separate grounds, each of which, it is said, is sufficient to establish such inadmissibility, whether considered as a legal bar to adjudication or as "a matter requiring the exercise of prudential discretion in the interest of the integrity of thejudicial function".
86. The first ground of inadmissibility relied on by the United States is that Nicaragua has failed to bring before the Court parties whose presence and participation is necessary for the rights of those parties to be protected and for the adjudication of the issues raised in the Application. The United States first asserts that adjudication of Nicaragua's claim would necessarily implicate the rights and obligations of other States, in particular those of Honduras
89. Secondly, the United States regards the Application as inadmissible because each of Nicaragua's allegations constitutes no more than a reformulation and restatement of a single fundamental claim, that the United States is engaged in an unlawful use of armed force, or breach of the peace, or acts of aggression against Nicaragua, a matter which is committed by the Charter and by practice to the competence of other organs, in particular the United Nations Security Council.
91. It will be convenient to deal with this alleged ground of inadmissibility together with the third ground advanced by the United States namely that the Court should hold the Application of Nicaragua to be inadmissible in view of the subject-matter of the Application and the position of the Court within the United Nations system, including the impact of proceedings before the Court on the ongoing exercise of the "inherent right of individual or collective self-defence" under Article 5 1 of the Charter. This is, it is argued, a reason why the Court may not properly exercise "subject-matterjurisdiction" over Nicaragua's claims.
99. The fourth ground of inadmissibility put forward by the United States is that the Application should be held inadmissible in consideration of the inability of the judicial function to deal with situations involving ongoing conflict.It is for reasons of this nature that ongoing armed conflict must be entrusted to resolution by political processes.
102. The fifth and final contention of the United States under this head is that the Application should be held inadmissible because Nicaragua has failed to exhaust the established processes for the resolution of the conflicts occurring in Central America. In the contention of the United States, the Contadora process, to which Nicaragua is Party, is recognized both by the political organs of the United Nations and by the Organization of American States, as the appopriate method for the resolution of the issues of Central America.

Territorial and Maritime Dispute (Nicaragua v. Colombia), Preliminary Objections, Judgment of 13 December 2007
43. The Court recalls that in its first preliminary objection, Colombia claims that pursuant to Articles VI and XXXIV of the Pact of Bogotá, the Court is without jurisdiction under Article XXXI of the Pact to hear the controversy submitted to it by Nicaragua and should declare the controversy ended (for the text of Articles VI, XXXI and XXXIV of the Pact of Bogotá, see paragraphs 55 and 56 below). In this regard, Colombia, referring to Article VI of the Pact, argues that the matters raised by Nicaragua were settled by a treaty in force on the date on which the Pact was concluded, namely the 1928 Treaty and the 1930 Protocol. Colombia adds that this question can and must be considered at the preliminary objections stage.
45. The Court initially notes that the Parties disagree on whether the questions raised by the first preliminary objection may be examined at this stage of the proceedings.The determination by the Court of its jurisdiction may touch upon certain aspects of the merits of the case (Certain German Interests in Polish Upper Silesia, Jurisdiction, Judgment No. 6, 1925, P.C.I.J., Series A, No. 6, p. 15). Moreover, the Court has already found that the question of whether the 1928 Treaty and the 1930 Protocol settled the matters in dispute does not constitute the subject-matter of the dispute on the merits. It is rather a preliminary question to be decided in order to ascertain whether the Court has jurisdiction (see paragraph 40 above).
120. Consequently, after examining the arguments presented by the Parties and the material submitted to it, the Court concludes that the 1928 Treaty and 1930 Protocol did not effect a general delimitation of the maritime boundary between Colombia and Nicaragua. It is therefore not necessary for the Court to consider the arguments advanced by the Parties regarding the effect on this question of changes in the law of the sea since 1930. Since the dispute concerning maritime delimitation has not been settled by the 1928 Treaty and 1930 Protocol within the meaning of Article VI of the Pact of Bogotá, the Court has jurisdiction under Article XXXI of the Pact. Therefore, the Court cannot uphold Colombia’s first preliminary objection in so far as it concerns the Court’s jurisdiction as regards the question of the maritime delimitation between the Parties.

5. SECOND PRELIMINARY OBJECTION
121. In addition to Article XXXI of the Pact of Bogotá, Nicaragua  invoked as a basis of the Court’s jurisdiction the declarations made by the Parties under Article 36 of the Statute of the Permanent Court of International Justice, which are deemed, for the period for which they still have to run, to be acceptances of the compulsory jurisdiction of the present Court pursuant to Article 36, paragraph 5, of its Statute (see paragraph 1 above). In its second preliminary objection, Colombia asserts that the Court has no jurisdiction on this basis.
127. Colombia argues that, in any event, the Court would have no jurisdiction on this basis since Colombia’s optional clause declaration had been withdrawn by the date of the filing of Nicaragua’s Application. Colombia further contends that even if its declaration were found to be in force at the time when Nicaragua filed its Application, the alleged dispute would fall outside the scope of the declaration as a result of a reservation which excluded disputes arising out of facts prior to 6 January 1932. According to Colombia, the facts which have given rise to the dispute between Nicaragua and Colombia, namely the conclusion of the 1928 Treaty and 1930 Protocol, predate 6 January 1932.
140. The Court thus upholds the second preliminary objection relating to jurisdiction under the optional clause declarations raised by Colombia in so far as it concerns the Court’s jurisdiction as regards the question of sovereignty over the islands of San Andrés, Providencia and Santa Catalina, and finds that it is not necessary to examine the objection in so far as it concerns sovereignty over the other maritime features in dispute between the Parties and the maritime delimitation between the Parties (see paragraph 132).

Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Croatia v. Serbia), Preliminary Objections, Judgment of 18 November 2008, paras. 52-130

Preliminary Objections (Nigeria v. Cameroon), Judgment of 25 March 1999

ICJ preliminary objections

ICJ statute, Article 36

1. The jurisdiction of the Court comprises all cases which the parties refer to it and all matters specially provided for in the Charter of the United Nations or in treaties and conventions in force.
2. The states parties to the present Statute may at any time declare that they recognize as compulsory ipso facto and without special agreement, in relation to any other state accepting the same obligation, the jurisdiction of the Court in all legal disputes concerning:
a. the interpretation of a treaty;
b. any question of international law;
c. the existence of any fact which, if established, would constitute a breach of an international obligation;
d. the nature or extent of the reparation to be made for the breach of an international obligation.

ICJ court rules, Article 79
          1. Any objection by the respondent to the jurisdiction of the Court or to the admissibility of the application, or other objection the decision upon which is requested before any further proceedings on the merits, shall be made in writing as soon as possible, and not later than three months after the delivery of the Memorial.  Any such objection made by a party other than the respondent shall be filed within the time-limit fixed for the delivery of that party's first pleading.
          2. Notwithstanding paragraph 1 above, following the submission of the application and after the President has met and consulted with the parties, the Court may decide that any questions of jurisdiction and admissibility shall be determined separately.
          3. Where the Court so decides, the parties shall submit any pleadings as to jurisdiction and admissibility within the time-limits fixed by the Court and in the order determined by it, notwithstanding Article 45, paragraph 1.
          4. The preliminary objection shall set out the facts and the law on which the objection is based, the submissions and a list of the documents in support;  it shall mention any evidence which the party may desire to produce.  Copies of the supporting documents shall be attached.
          5. Upon receipt by the Registry of a preliminary objection, the proceedings on the merits shall be suspended and the Court, or the President if the Court is not sitting, shall fix the time-limit within which the other party may present a written statement of its observations and submissions;  documents in support shall be attached and evidence which it is proposed to produce shall be mentioned.
          6. Unless otherwise decided by the Court, the further proceedings shall be oral.
          7. The statements of facts and law in the pleadings referred to in paragraphs 4 and 5 of this Article, and the statements and evidence presented at the hearings contemplated by paragraph 6, shall be confined to those matters that are relevant to the objection.
          8. In order to enable the Court to determine its jurisdiction at the preliminary stage of the proceedings, the Court, whenever necessary, may request the parties to argue all questions of law and fact, and to adduce all evidence, which bear on the issue.
          9. After hearing the parties, the Court shall give its decision in the form of a judgment, by which it shall either uphold the objection, reject it, or declare that the objection does not possess, in the circumstances of the case, an exclusively preliminary character.  If the Court rejects the objection or declares that it does not possess an exclusively preliminary character, it shall fix time-limits for the further proceedings.
          10. Any agreement between the parties that an objection submitted under paragraph 1 of this Article be heard and determined within the framework of the merits shall be given effect by the Court.
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*Amendment entered into force on 1 February 2001.  Article 79 of the Rules of Court as adopted on 14 April 1978 has continued to apply to all cases submitted to the Court prior to 1 February 2001.
[1]In Article 79, paragraph 1, as amended, the words “as soon as possible, and not later than three months after the delivery of the Memorial” have been substituted for the words “within the time-limit fixed for the delivery of the Counter-Memorial” contained in the text of this paragraph as adopted on 14 April 1978.
Paragraphs 2 and 3 of the amended Article 79 are new.
The former paragraphs 2 to 8 have been renumbered, respectively, as paragraphs 4 to 10.