International arbitral jurisdiction 9789004181335, 9004181334

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International Arbitral Jurisdiction

International Litigation in Practice General Editors

Loretta Malintoppi Eduardo Valencia-Ospina Advisory Board

David Anderson John R. Crook Gilbert Guillaume Pieter Kooijmans Sean D. Murphy Alain Pellet Brigitte Stern Prosper Weil Rüdiger Wolfrum Sir Michael Wood

VOLUME 2

The titles published in this series are listed at the back of this volume, and also at brill.nl/inli

International Arbitral Jurisdiction By

Chittharanjan F. Amerasinghe

LEIDEN • BOSTON 2011

This book is printed on acid-free paper. Library of Congress Cataloging-in-Publication Data Amerasinghe, Chittharanjan Felix, 1933– International arbitral jurisdiction / by Chittharanjan F. Amerasinghe. p. cm. — (International litigation in practice ; v. 2) Includes index. ISBN 978-90-04-18133-5 (hardback : alk. paper) 1. Arbitration, International. 2. Jurisdiction (International law) I. Title. KZ6115.A46 2011 341.5’22—dc22 2010050599

ISSN 1874-0502 ISBN 978 90 04 18133 5 Copyright 2011 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Hotei Publishing, IDC Publishers, Martinus Nijhoff Publishers and VSP. 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.

Contents Abbreviations ................................................................................................ Table of Cases ...............................................................................................

ix xiii

PART I

PROLOGUE Chapter One Introductory Observations .............................................. History of Arbitration ............................................................................. Arbitration as a Means of Dispute Settlement .................................... Representation before Arbitral Tribunals ............................................ Personality of Arbitral Tribunals ........................................................... The Place of Precedent ............................................................................ Scheme of Work .......................................................................................

3 4 7 14 15 15 17

PART II

GENERALITIES Chapter Two La Compétence de la Compétence .................................. History ........................................................................................................ Initial Explanation of the Rule ............................................................... Current Status ........................................................................................... Possible Limitations ................................................................................. Raising Proprio Motu the Issue of la Compétence de la Compétence ............................................................................................ Finality of the Determination on la Compétence de la Compétence ............................................................................................ Jurisdiction of Other Tribunals to Decide on the Compétence of a Tribunal .............................................................................................. The Issue of Conflict of Interest ............................................................

23 23 26 30 33 40 41 42 44

vi

Contents

Chapter Three Consent as the Basis of Jurisdiction ............................ The Requirement ...................................................................................... Requirements for Effective Consent ..................................................... Consent and Individuals ......................................................................... The Relationship of Consent to Inherent Jurisdiction ....................... Parameters of Consent ............................................................................

47 47 49 53 54 55

Chapter Four Interpretation of Clauses Submitting to Jurisdiction ................................................................................................ General Principles .................................................................................... Restrictive Interpretation ........................................................................ The Contra Proferentem Rule ................................................................. The Doctrine of Sovereignty ...................................................................

57 57 60 63 65

Chapter Five The Matter of Compétence ............................................... Forum Prorogatum and Compétence ..................................................... The Judgment on Compétence and Res judicata ................................. Identifying Matters of Compétence ....................................................... Time for Raising Issues of Compétence ................................................ Sources of Jurisdiction ............................................................................. Scope of Primary Jurisdiction .............................................................. Fundamental Limitations on the Scope of Primary Jurisdiction ..... Exercise of Jurisdiction and Discretion ............................................... Proof of Jurisdiction ................................................................................

69 72 74 76 78 79 82 85 92 93

Chapter Six Inadmissibility ...................................................................... Grounds for Inadmissibility ................................................................... Waiver and Estoppel ................................................................................ Time for Raising Objections to Admissibility .....................................

95 97 100 117

Chapter Seven Incidental Jurisdiction: Intervention and Interim Measures .................................................................................................... Intervention ............................................................................................... Interim Measures .....................................................................................

119 121 130

Chapter Eight Jurisdiction vis-à-vis Remedies ..................................... Inherent or Implied Jurisdiction ........................................................... The Principle of Non Ultra Petita and Jurisdiction ...........................

147 151 165

Chapter Nine Jurisdiction to Reopen Cases ......................................... Res judicata and Finality ......................................................................... Reopening Cases .......................................................................................

167 167 174

Contents

vii

Chapter Ten The Iran-U.S. Claims Tribunal ........................................ Primary Jurisdiction: Compétence and Admissibility ....................... Incidental Jurisdiction: Interim Measures ........................................... Reopening Cases .......................................................................................

199 199 243 259

Annex to Chapter Ten ................................................................................. 1. Declaration of the Government of the Democratic and Popular Republic of Algeria (General Declaration), 19 January 1981 .................................................................................. 2. Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran (Claims Settlement Declaration), 19 January 1981 .....................................

268

274

Index ...............................................................................................................

279

PART III

THE IRAN-U.S. CLAIMS TRIBUNAL

268

Abbreviations AD AIDI AJIL Am. UJILP Arb. International Brooklyn JIL BYIL Calif. WILJ Canadian YBIL CIJ CJEC CLJ CSAT CSD Dickinson JIL Duke LJ EC ECR European JIL FILJ GA General Declaration German YBIL Hague Recueil Harv. ILJ IACHR IAT ICC ICJ ICJYB

Annual Digest Annuaire de l’institut de droit international American Journal of International Law American University Journal of International Law and Policy Arbitration International Brooklyn Journal of International Law British Yearbook of International Law California Western International Law Journal Canadian Yearbook of International Law Court International de Justice Court of Justice of the European Communities Cambridge Law Journal Commonwealth Secretariat Arbitral Tribunal Claims Settlement Declaration (Iran-US) Dickinson Journal of International Law Duke Law Journal European Communities European Court Reports European Journal of International Law Foreign Investment Law Journal UN General Assembly Declaration of the Government of the Democratic and Popular Republic of Algeria (January 19, 1981) German Yearbook of International Law Recueil des Cours de l’Académie de Droit International de la Hague Harvard International Law Journal Inter-American Court of Human Rights International Administrative Tribunal International Chamber of Commerce International Court of Justice Yearbook of the ICJ

x

Abbreviations

ICLQ ICSID ICTY IJIL ILC ILM ILO ILOAT ILR Iran-US CTR ITLOS J. Int’l Arb. JDI JUNAT LDA LN LNTS MAT Mich. LR MIGA Moore, History and Digest

NAFTA National LJ Neth. Quarterly HR NILR NYJICL NYUJIL OAS OASAT OECD PCA PCIJ R.A.I.

International and Comparative Law Quarterly International Centre for Settlement of Investment Disputes International Criminal Tribunal for the Former Yugoslavia Indian Journal of International Law International Law Commission International Legal Materials International Labour Organization ILO Administrative Tribunal International Law Reports Iran-US Claims Tribunal Reports International Tribunal for the Law of the Sea Journal of International Arbitration Journal de Droit International Judgments of the UNAT London Debt Agreement League of Nations LN Treaty Series Mixed Arbitral Tribunal Michigan Law Review Multilateral Investment Guaranty Agency Moore, History and Digest of the International Arbitrations to which the United States has been a Party (1898), 6 vols. North American Free Trade Agreement National Law Journal Netherlands Quarterly on Human Rights Netherlands International Law Review New York University Journal of International and Comparative Law New York University Journal of International Law Organization of American States OAS Administrative Tribunal Organization for European Cooperation and Development Permanent Court of Arbitration Permanent Court of International Justice Lapradelle et Politis, Receueil des arbitrages internationaux

Abbreviations

RDILC Rec. TAM RGDIP RHDI Romanian JIL SC Sydney LR Texas ILJ UN UNAT UNCITRAL UNCLOS UNRIAA UNTS WB WBAT YBCom.Arb. YBILC ZAORV

xi

Revue de droit international et de legislation comparée Recueil des décisions des tribunaux arbitraux mixtes Revue general de droit international public Revue Hellenique de droit international Romanian Journal of International Law UN Security Council Sydney Law Review Texas International Law Journal United Nations UN Administrative Tribunal UN Conference on International Trade Law UN Convention on the Law of the Sea UN Reports of International Arbitral Awards UN Treaty Series World Bank WB Administrative Tribunal Yearbook of Commercial Arbitration Yearbook of the International Law Commission Zeitschrift für ausländisches öffentliches Recht und Völkerrecht

Table of Cases A1 Decision, The Islamic Republic of Iran v. The United States of America 220 Acosta-Andres, Azola Blanco and Véliz García (No. 2) 173, 174 Aegean Sea Case: see Aegean Sea Continental Shelf Case Aegean Sea Continental Shelf Case 50–1, 133–4 Aeronutronics Overseas, Inc. Case, Interim Award, 27 Aug. 1984 246–7 Aeronutronics Overseas Services, Inc., Case (1984): see Aeronutronics Overseas, Inc., Case, Interim Award, 27 Aug. 1984 Aeronutronics Overseas Services, Inc. Case (1985) 144, 247 Aeronutronics Overseas Services, Inc. Case (1986) 205, 257 Affaire Losinger and Co.: see Losinger Case A-G v. Mobil Oil NZ Ltd. 32 AHFI Planning Associates, Inc. Case 202 Air Service Agreement Case 8 Air Transport Agreement Case 8 Alabama Arbitration: see Alabama Claims Alabama Claims 8, 11 Albert Berookhim Case 231 Alexandras Lyons Lianosoff Case 208, 214 Alfred Haber, P.A. Case 218, 226 Alfred L.W. Short Case 230, 231 Ali Asghar Case 202 Ambatielos Arbitration 11, 43, 153 Ambatielos Case: see Ambatielos Case (Obligation to Arbitrate) Ambatielos Case (Jurisdiction) 28, 43 Ambatielos Case (Merits) 43, 48 Ambatielos Case (Obligation to Arbitrate) 43–4, 105, 106 Ambatielos Case (Preliminary Objections): see Ambatielos Case (Jurisdiction) Ambatielos Claim: see Ambatielos Arbitration Amco Arbitration: see Amco v. Indonesia Amco Arbitration (Resubmitted Case: Jurisdiction) 74, 192–6 Amco Case: see Amco v. Indonesia

xiv

Table of Cases

Amco v. Indonesia 61, 151, 187–8, 192–6 American Bell International, Inc. Case 233–4, 236 American Farm Products International, Inc. Case 221 American Housing International, Inc. Case 220 American International Group, Inc. et al. Case 215 Ammann and Whitney Case 202 Amoco International Finance Corp. Case, Partial Award 240 Amoco Iran Oil Co. Case 202 Anaconda-Iran, Inc. Case 235, 236 Angelopoulos, Decision No. 69 170 Angelopoulos, Decision No. 92 170 Anglo-French Continental Shelf Arbitration 91 Anglo-Iranian Oil Co. Case (Interim Protection) 248 Anglo-Iranian Oil Co. Case (Preliminary Objection): see Anglo-Iranian Oil Co. Case Anglo-Iranian Oil Co. Case 82, 106, 107, 133, 139 Annulment Case: see Award on the Annulment Application by Indonesia (Amco Case) Application for Revision and Review Case 183 Application of the Genocide Convention Case (Provisional Measures) 79 Arab Republic of Egypt Case 32 Aramco Arbitration 67 Arbitral Award of 31 July 1989 Case 32 Argentina-Chile Frontier Case 8 Arrest Warrant of 11 April 2000 Case 88, 165 Arrest Warrant of 11 April 2000 Case (Provisional Measures) 134–5 Arthur J. Fritz Case 220–1 Arthur Young and Co. Case 230, 234, 242 AS v. Iran–United States Claims Tribunal 15 Asylum Case 165 Asylum Case (Interpretation) 185 Atlantic Richfield Co. Case, Interim Award (8 May 1985) 244, 254, 255 Atlantic Richfield Co. Case, Interim Award (1985): see Atlantic Richfield Co. Case, Interim Award (8 May 1985) Atlantic Richfield Co. Case: see Atlantic Richfield Co. Case, Interim Award (8 May 1985) Avco Corp. Case 203, 234, 245, 265–6 Avco Corporation Case: see Avco Corp. Case Award No. 93–2–3 105 Award on the Annulment Application by Indonesia (Amco Case) 187–8 Award on the Merits (Amco Case) 187–8

Table of Cases

xv

Barcelona Traction Case 209 Barcelona Traction Co. Case (Preliminary Objection): see Barcelona Traction Company Case (Preliminary Objection) Barcelona Traction Company Case (Preliminary Objection) 79, 168 Baron de Neufliza Case 177 Beagle Channel Arbitration 8, 13 Behring International, Inc. Case 138, 145, 205, 232, 240–1, 244, 247 Behring International, Inc. Case (1983 and 1985), Interim Awards 248–9, 250 Bendex Corp., et al. Case 203 Bendone-Derossi International Case 136–7, 232 Benjamin R. Isaiah Case 216, 226 Bering Sea Case 11 Betsey Case 23, 26–7, 35, 44 Bikoff, et al. Case 215, 216 Birnbaum, Harold, Case (1993) 200, 238 Birnbaum, Harold, Case (1995) 261–2, 265, 266 Blondel Case 24 Blount Brothers Corp. Case 201, 218, 237 Bluefin Tuna Arbitration: see Bluefin Tuna Cases Bluefin Tuna Cases 13, 31, 85, 137, 139 Boeing Company Case 250 Border and Transborder Armed Actions Case 88 Border and Transborder Armed Actions Case (Jurisdiction and Admissibility): see Border and Transborder Armed Actions Case Bosnian Genocide Convention Case (Provisional Measures): see Genocide Case Bosnian Genocide Convention Case (Provisional Measures), Order of 8 April 1993: see Genocide Case Bosnian Genocide Convention Case (Provisional Measures), Order of 13 September 1993 143 BP v. Libya 156, 160 Breard Case, Order 134 British Property in the Spanish Zone of Morocco Case 158 Brower Case 163 Burton Marks and Harry Umann Case 48, 52, 72, 208 Canino Case 74 Carlson Case 232 Carthage Case 162, 164 Casablanca Deserters Case 159

xvi

Table of Cases

Case Concerning Certain German Interests in Polish Upper Silesia 231 Case Concerning the Arbitral Award of 31 July 1989 134 Case Concerning the Land and Maritime Boundary between Cameroon and Nigeria 134, 135 Case Concerning the Legal Status of the South-Eastern Territory of Greenland 248 Case No. A1 (Iran and United States, Case A/1 (Issue II)) 238, 239 Case No. A2 (Iran v. United States) 221, 222 Case No. A2 (Iran v. United States, Case No. A/2): see Case No. A2 (Iran v. United States) Cases Nos. A1 and A2 (The Islamic Republic of Iran v. The United States) 84, 217 Cases Nos. A4 and A15 (18 January 1984) 249 Cases Nos. A4 and A15 (1 February 1984) 249–50 Case No. A15 250–1 Cases Nos. A15(IV) and A24 (the Islamic Republic of Iran v. the United States of America): see Islamic Republic of Iran v. United States of America (Case Nos. A15(IV) and A24) Case No. A18 212–3, 223 Case No. A18 (Islamic Republic of Iran v. United States of America): see Case No. A18 Case No. A20 (Islamic Republic of Iran v. United States of America) 222 Case No. A24 258 Case No. A25 (Islamic Republic of Iran v. United States of America) 222 Case No. A28 223, 242 Case No. A28 (Islamic Republic of Iran v. United States of America): see Case No. A28 Case No. A29 222 Case No. A30 222 Case No. B1 250 Cases of Dual Nationality (No. 22) 62, 63, 70 Catherine Etezadi Case 225 Cayuga Indians Case 164 CBS Incorporated Case 215 Central Rhodope Forests Arbitration 62 Cession of Vessels and Tugs for Navigation on the Danube 67 Chad/Libya Territorial Dispute Case 91 Charbin (No. 2) 173 Charles J. Jansen Case 88 Chas. T. Main International Inc. Case 223 Chemins de fer Zeltweg Case: see Chemins de fer Zeltweg-Wolfsberg et Unterdrauberg-Woellen Case

Table of Cases

xvii

Chemins de fer Zeltweg-Wolfsberg et Unterdrauberg-Woellen Case 34, 105, 126 Cherafat Case (1992) 263 Cherafat, Jean, Case: see Gloria J. Cherafat Case (1985) Chevreau Case 63 Chorzów Case: see Chorzów Factory Case (Interpretation) Chorzów Factory Case (Interpretation) 168, 169, 172, 173, 185 Chorzów Factory Case (Merits) 151, 156, 172–3 Chorzów Factory (Jurisdiction) Case 113, 114, 150 Claim of American Security & Trust Co. 217 Claim of Mr. Victor E. Pereira 205 Claim of the United States and the Paraguay Navigation Case 24 Collins Systems International, Inc. Case 236, 237 Collins Systems International, Inc. Case (1992) DECISION NO. DEC 104– 431–2 236 Colombian Bond Cases 24 Combustion Engineering Case: see Combustion Engineering, et al. Case Combustion Engineering, et al. Case 202, 203, 215, 234, 235, 237, 242 Compagnie d’electricité de Sofia et Bulgarie Case 132 Compagnie d’electricité de Varsovie Case (Interlocutory Award) 83 Compagnie d’electricité de Varsovie Case (Jurisdiction) 83 Compagnie du Port des Quais et des Entrepôts de Beyrouth and the Société Radio-Orient Case 107 Compagnie internationale des wagons-lits Case 124 Competence of the International Labour Organization in the Matter of the Regulation of Conditions of Work of Persons Employed in Agriculture Opinion 61 Component Builders, Inc. Case, Interim and Interlocutory Award (27 May 1985) 136, 253–4 Component Builders, Inc., et al. Case 214 Component Builders, Inc. et al. Case (1989) 257 Computer Sciences Corp. Case 201–2, 204, 215, 235, 237–8, 241–2 Comte Andrassy v. Czechoslovak State 124 Corfu Channel Case 79 Corfu Channel Case (Compensation) 74 Costa Rica v. Nicaragua 122 Creditcorp. International Inc., et al. Case 232 Dadras International, et al. Case 223, 224 Dallal Case 213 Dallal, Mark v. The Islamic Republic of Iran 264 Dames and Moore Case (1983) 215

xviii

Table of Cases

Dames and Moore Case (1984) 264–5 Decision No. 4 21 Decision No. DEC 67–REF 35–2 (22 Dec. 1988) 221 Delagoa Bay Case 11 Delimitation of the Continental Shelf Case 48 Delimitation of the Continental Shelf Case (Application for Interpretation) 183, 186 Delimitation of the Frontier-line Case 186 Development and Resources Corporation Case 201 DIC of Delaware, Inc., et al. Case 98, 214, 219 Didier Case 25 Donin de Rosier, Paul, Case 174, 186, 266–7 Donin de Rosier, Paul, Case, Interim Award (4 Dec 1984) 254–5 Dresser Industries, Inc. Case 228 Dreyfus Frères et Cie et al. Case 25 E-Systems, Inc. Case 132, 138, 141, 144, 232, 251–3 E-Systems, Inc. Case (4 Feb 1983) 253, 254 E-Systems, Inc. Case, Interim Award (4 Feb 1983): see E-Systems, Inc. Case (4 Feb 1983) East Timor Case 90 Eastern Extension, Australasia and China Telegraph Co. Ltd. Case 82–3 Eastman Kodak Co. Case 240 Economy Forms Corp. Case 218 Edgar Protiva, et al. Case 98, 202, 225, 238 El Salvador v. Nicaragua 156, 157 Electricité de Beyrouth Co. Case 107 Electricity Company of Sofia and Bulgaria Case 34, 79–80, 139 Electricity Company of Sofia Case (Preliminary Objection): see Electricity Company of Sofia Case Electricity Company of Sofia Case: see Electricity Company of Sofia and Bulgaria Case Electronic Systems International Inc. Case 202 Elettronica Sicula S.p.A. (ELSI) Case 104, 115–16 Elf Aquitaine Iran v. National Iranian Oil Company 108 Emanuel Too Case 221, 229–30 Eric M. Hermann Case 136, 138 Esahak Saboonchian Case 201, 208, 242 Exchange of Greek and Turkish Populations Opinion 67 Fabiani Case 171 Fairen Garbi and Solis Corrales Case 103

Table of Cases

xix

Faith Lita Khosrowshahi, et al. Case 202, 224–5 Filleting within the Gulf of St. Lawrence 57 First Award: see Award on the Merits (Amco Case) First National Bank of Boston Case 237 First Travel Corp. Case 214 Fisheries Jurisdiction (Spain v. Canada) Case (Jurisdiction) 93–4, 134 Fisheries Jurisdiction (UK v. Iceland) Case (Jurisdiction) 133, 134 Fisheries Jurisdiction Case: see Fisheries Jurisdiction (Spain v. Canada) Case (Jurisdiction) Fisheries Jurisdiction Cases (Interim Protection) 139–40, 248–9 Flexi-Van Leasing Case, Order 209–10 Fluor Corporation Case (1986): see Fluor Corporation Case, Interim Award (1986) Fluor Corporation Case, Interim Award (1986) 252, 255 Fluor Corporation Case, Interim Award (7 Aug. 1986): see Fluor Corporation Case, Interim Award (1986) FMC Corp. Case 219 Ford Aerospace and Communications Corp. Case (1982) 227, 228 Ford Aerospace and Communications Corp. Case (1986) 186, 266 Ford Aerospace and Communications Corp. Case (1987) 204, 257 Ford Aerospace and Communications Corporation Case, Interim Award, 27 April 1983 245, 246, 247 Ford Aerospace and Communications Corporation, et al. Case (1984) 144 Foremost Tehran, Inc., et al. Case 203, 214, 216, 218 Fotochrome, Inc. v. Copal Co. Ltd 241 Framatome S.A. et al. Arbitration 67 French Co. of Venezuela Railroads Case 62, 82 French-Tunisian Arbitral Council Case 88 Frontier Dispute Case 91 Future Trading Incorporated Case 227 General Electric Co. Case 214 General Motors Corp. Case, Order 209–11 General Motors Corp., et al. Case 234 General Petrochemicals Corp. Case 232 Genocide Case 135, 143 George Edwards Case 215 George Turnbull, Manoa Co. (Ltd.), Orinoco Co. (Ltd.) Case 158 George W. Drucker, Jr. Case 215, 227, 228 George W. Hopkins Case 160–1 German Interests in Polish Upper Silesia Case: see German Interests in Polish Upper Silesia Case (1925)

xx

Table of Cases

German Interests in Polish Upper Silesia Case (1925) 113 German Interests in Polish Upper Silesia Case (Jurisdiction): see German Interests in Polish Upper Silesia Case (1925) Gibbs and Hill, Inc. Case 227 Giovanni Cervetti Case 160–1 Gloria J. Cherafat Case, Order (1985) 263–4 Godinez and Cruz Case: see Godinez and Cruz (Preliminary Objections) Case Godinez and Cruz (Preliminary Objections) Case 103 Gold of the National Bank of Albania 58 Gordon Williams Case 208 Gould Marketing, Inc. Case 204, 235 Greek Powder and Cartridge Co. Case 126 Green, A.A., Case 178 Gruen Associates, Inc. Case 208, 218 Guano Case 121, 122, 126 Gulf of Maine Case 91 Gut Dam Arbitration 153 H.B. Fox Geotechnical Consultants, Inc. Case 213 Halliburton Company Case 227 Harold Birnbaum Case (1993): see Birnbaum, Harold, Case (1993) Harold Birnbaum Case (1995): see Birnbaum, Harold, Case (1995) Harris International Telecommunications, Inc. Case, Partial Award 253 Harrington and Associates, Inc. Case 98, 214 Harza Engineering Co. Case 201, 232–3 Haya de la Torre Case 119–20 Heim et Chamant Case 176–7 Henry F. Teichmann, Inc., et al. Case 218 Henry Morris v. the Government of the Islamic Republic of Iran 264 Hilpern 71 Hilti Actiengesellshaft Case 130 Hoashang Kachen Case 201, 203 Hoffland Honey Co. Case 241 Holiday Inns Arbitration: see Holiday Inns Case (1972 and 1982) Holiday Inns Case (1972 and 1982) 138–9, 141–2 Holiday Inns S.A., Occidental Petroleum Corporation et al. v. Government of Morocco: see Holiday Inns Case (1972 and 1982) Horst Pufürst Case 51–2, 72, 73–4 Hostages Case 140 Hotel Metropole Case 157 Housing and Urban Services International, Inc. Case 204, 208–9, 223–4

Table of Cases

xxi

Houston Contracting Co. Case 203, 204 Houston Contracting Co. Case (Rectification) 266 Howard Needles Tammen and Bergendoff Case 203, 215, 227, 234, 237 Howard, Needles, Tammen and Bergendoff Case (HNTB) Case: see Howard Needles Tammen and Bergendoff Case Hubeau 169 Hungarian Optants Case 27 I.V.E.M. Case (No. 183) 191 Ian L. McHarg, et al. Case: see McHarg Case (1986) Icelandic Fisheries Jurisdiction Case: see Fisheries Jurisdiction (UK v. Iceland) Case (Jurisdiction) ILOAT Judgments Opinion: see Judgments of the I.L.O. Administrative Tribunal Opinion I’m Alone Case 162, 163, 179 Interfirst Bank Dallas, N.A. Case 237 Interhandel Case (1959) 36, 37, 71, 102, 105, 106, 114, 115, 116 Interhandel Case (Interim Protection) (1957) 134 Interhandel Case (Preliminary Objections): see Interhandel Case (1959) International Administratie Kantoor N.V. v. Federal Republic of Germany 63 International Schools Services, Inc. Case 211 International Systems and Controls Corporation Case: see International Systems and Controls Corp. Case International Systems and Controls Corp. Case 83, 214, 227, 234 International Technical Products Corp., et al. Case 98, 203, 216 Interpretation of Article 79, §6(c), of the Peace Treaty (No. 196) 57, 62, 63 Interpretation of the Greco-Turkish Agreement Opinion 33, 34 Interpretation of the Treaty of Neuilly Arbitration 61 Iran v. United States (Cases Nos. A15(iv) & A24) (1998) 132 Iran v. U.S.A., Cases No. A-4 and A-15 243 Iranian Hostages Case: see Hostages Case Iran-United States, Case No. A/1 83 Iran-United States, Case No. A/18 77 Isaac Harrington Case 24 Islamic Republic of Iran v. United States of America (1986) 211 Islamic Republic of Iran v. United States of America (1987), 14 Iran-U.S. CTR p. 327 222 Islamic Republic of Iran v. United States of America (1987), 16 Iran-U.S. CTR p. 289 222 Islamic Republic of Iran v. United States of America (1988) 249 Islamic Republic of Iran v. United States of America (1993) 244–5

xxii

Table of Cases

Islamic Republic of Iran v. United States of America (Cases Nos. A15(IV) and A24) (1993) 245, 257–8 Islamic Republic of Iran v. United States of America (Cases Nos. A15(IV) and A25) 229 Islamic Republic of Iran v. United States of America, Case A21 224 Island of Palmas Case 10 ITEL International Corp. Case 200, 203–4, 219 ITEL International Corporation Case: see ITEL International Corp. Case J.I. Case Co. Case 204 Jack Rankin Case 227, 230 Jalal Moin Case 242 James M. Saghi, et al. Case 216–17 Jan Mayen Case 15, 91 Jaworzina Opinion 178, 185 Jaworzina Case: see Jaworzina Opinion Jonathan Ainsworth Case 214 Judgments of the Administrative Tribunal of the I.L.O. Opinion: see Judgments of the I.L.O. Administrative Tribunal Opinion Judgments of the I.L.O. Administrative Tribunal Opinion 34, 71, 77 Judgments of the ILOAT Opinion: see Judgments of the I.L.O. Administrative Tribunal Opinion Jurisdiction Case: see Resubmitted Case, Decision on Jurisdiction (Amco Case) K. Haji-Bagherpour Case 83, 229, 231–2 Karl Wiser Case 84 Katherine M. Drier Case 175 Kavoukas and Parham 77 Kenneth P. Yeager Case: see Yeager Case Keysons International Corp. Case 203, 234 Khalil 175 Kianoosh Jafar Case 209 Kimberly Clark Corp. Case 237 Kingdom of the Hellenes v. FRG 127 Klöckner Case: see Klöckner v. Cameroon Klöckner v. Cameroon 31, 187, 188 Knickerbocker Insurance Company of New York Case 84–5 Krankenvesorgung der Bundesbvahnbeantem, Frankfurt Case 124 Kronprins Gustaf Adolf Arbitration 61 Kummerow et al. Case 82

Table of Cases

xxiii

La Abra Case 178 “La Constancia” Case 24, 34 La Grand Case 143 La Grand Case, Order 134, 143 La Grand Case (Provisional Measures): see La Grand Case, Order La Masica Case 155 L’Affaire de la Société Radio-Orient 157 Lake Lanoux Arbitration 8 Land and Maritime Boundary between Cameroon and Nigeria Case (Preliminary Objection) 15 Land, Island and Maritime Frontier Dispute Case 128 Land, Island and Maritime Frontier Dispute Case (Application to Intervene) 119, 127–8, 130 Lazare Case 178 Le More Case 25 Legality of Use of Force Cases (Provisional Measures) 135, 137–8 Lehigh Valley Railroad Company et al. Case 181–3 Levis & Levis & Veerman Case 124 LIAMCO v. Libyan Arab Republic 108 Libya/Malta Continental Shelf Case 15 Lighthouses Arbitration 153 Lillian Byrdine Grimm: see Lillian Byrdine Grimm Case Lillian Byrdine Grimm Case 63, 83, 226, 227, 230 Lilly Mythra Fallah Lawrence Case 231 Linen, Fortinberry and Associates, Inc. Case 144, 202, 253 Lockerbie Case 71–2 Lockheed Corp. Case 202 Losinger and Cie, S.A., Case 89 Losinger Case 82, 106, 107 Lotus Case 66 Lubelski v. Etât du Burundi 58 Management of Alcan Aluminium Ltd. et al. Case 215–16 Manouba Case 162, 164 Manuchehr Haddadi Case 227 Mark Dallal v. the Islamic Republic of Iran: see Dallal Case Martini Case 157 Mavrommatis Palestine Concessions Case: see Mavrommatis Palestine Concessions Case (Preliminary Objection) Mavrommatis Palestine Concessions Case (Jurisdiction): see Mavrommatis Palestine Concessions Case (Preliminary Objection)

xxiv

Table of Cases

Mavrommatis Palestine Concessions Case (Preliminary Objection) 34, 56, 76, 81 Mclaughlin Enterprises, Ltd. Case 204 McHarg Case (1983) 255 McHarg Case (1986) 215, 255, 257 Merrill Lynch and Co., et al. Case: see Merrill Lynch, et al. Case Merrill Lynch, et al. Case 202, 234 Meta Bengston Case 88–9 Methanex Corp. Case 125 Middle East Management and Construction Corp. Case 220 Miliani Case 162 Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v. United States of America), Provisional Measures: see Nicaragua Case (Provisional Measures) Military and Paramilitary Activities in and against Nicaragua Case: see Nicaragua Case (Jurisdiction and Admissibility) Mine Case 188–91 Ministry of Roads and Transportation v. Port of Vancouver, Washington 200 Minnesota Mining and Manufacturing Co. Case 216 Minority Schools (Upper Silesia) Case: see Minority Schools Case Minority Schools Case 96 Mobil Oil Iran, Inc. Case: see Mobil Oil Iran, Inc. et al. Case Mobil Oil Iran, Inc. et al. Case 200, 224 Mohamed Mousavi Case 229 Mohsen Asgari Nazari Case 202, 216 Mohsin Case 45–6 Monastery of Sain Naoum Opinion 171 Monetary Gold Case 55–6, 89–90, 91, 92 Morrison-Knudsen Pacific Ltd Case 223, 234 Morteza Khatami Case 212 Moverie Case 24 Mox Plant Case 137 Nasrollah Khosrowshah Case 209 Nicaragua Case: see Border and Transborder Armed Actions Case Nicaragua Case (Jurisdiction and Admissibility) 79, 82, 90–1 Nicaragua Case (Merits) 149, 165 Nicaragua Case (Order) 130–1 Nicaragua Case (Provisional Measures) 134, 136, 139 Norberto Paquet Case 160–1 Norman Gabay, et al. Case 203

Table of Cases

xxv

North Sea Continental Shelf Cases 91 Northern Cameroons Case 56, 76, 81–2, 82–8, 132–3 Northern Cameroons Case (Preliminary Objection): see Northern Cameroons Case Norwegian Loans Case 34, 36, 37, 103 Nottebohm Case 24, 32–3, 34, 35, 82 Nottebohm Case (Preliminary Objection): see Nottebohm Case Nottebohm Case (Second Phase) 71, 76 Nuclear Tests Cases 56, 76, 82, 87, 133–4, 139 Nuclear Tests Cases (Interim Protection) 248 Occidental Petroleum Corporation et al. Case 144 Office français v. Office allemande 127 Oilfield of Texas, Inc. Case 200 Opal H. Sether Case 218 Orinoco Case: see Orinoco Steamship Company Case Orinoco Steamship Company Case 170, 191 Otis Elevator Co. Case 214 Owens-Corning Fiberglass Corp. Case 233 Parviz Karim-Panahi Case 230, 242 Passage through the Great Belt Case 134 Patrimoine Clément Raoul Boccara (No. 245) Case 183 Patrimoine Giuseppe Camino Case 132, 142 Patrimoine Giuseppe Camino Case (No. 266): see Patrimoine Giuseppe Camino Case Pensions of Officials of the Saar Territory Case 64, 65 Pepsico, Inc. Case (1) 205 Pepsico, Inc. Case (2) 186, 266 Petrolane, Inc. Case: see Petrolane, Inc. et al. Case Petrolane, Inc. et al. Case 208, 219 Phelps Dodge Corp. and Overseas Private Investment Corp. Case 208 Phelps Dodge Corp. Case 214 Phibro Corp. Case 219, 226 Philadelphia-Girard National Bank Case 180 Phillips Petroleum Co. Case (1982) 200, 202, 240 Phillips Petroleum Co., Iran Case (1989) 224, 236, 238 Phillips Petroleum Co., Iran Case, Interlocutory Award: see Phillips Petroleum Co. Case (1982) Phillips Petroleum Co., Iran Case: see Phillips Petroleum Co. Case (1982) Phosphates in Morocco Case 82 Phosphates Lands in Nauru Case 91–2

xxvi

Table of Cases

Pinochet Case 46 Pious Fund Case 25–6, 168 Pious Fund Case of Californias: see Pious Fund Case Presidential Order No. 1 222 Pulau Ligitan and Pulau Sipadan Case 129 Qatar and Bahrain Case (Jurisdiction and Admissibility) 51 Qatar and Bahrain Maritime Delimitation and Territorial Questions Case (Jurisdiction and Admissibility): see Qatar and Bahrain Case (Jurisdiction and Admissibility) Questech, Inc. Case (1983) 136, 256 Questech, Inc. Case (1985) 256, 257 Question of Jaworzina Opinion 171 R.J. Reynolds Tobacco Co. Case 234 R.N. Pomeroy et al. and Government of Islamic Republic of Iran: see R.N. Pomeroy, et al. Case R.N. Pomeroy, et al. Case 215, 233, 235 Ram International Industries, Inc. Case 260–2 Rann of Kutch Arbitration 8, 13 Raygo Wagner Award (Second) 219–20 Raygo Wagner Equipment Co. Case 219 RCA Global Communication Disc, Inc. Case (1983–2) 253 RCA Global Communication Disc, Inc. Case: see RCA Global Communications, Inc. et al. Case (1983) RCA Global Communications Disc, Inc. et al. Case (1983) 132, 144, 246, 255 RCA Global Communications, Inc. Case: see RCA Global Communications, Disc, Inc. et al. Case (1983) Reading and Bates Corporation Case, Interim Award (1983): see Reading and Bates Corporation Case, Interim Award of 9 June 1983 Reading and Bates Corporation Case, Interim Award of 9 June 1983 246, 255 Refusal Case No. 3 206 Refusal to Accept the Claim of Atiyeh Showrai 205 Refusal to Accept the Claim of Mr. Mohammed Sadegk Jahanger 205 Refusal to Accept the Claim of Mr. Moshe Bassin 205 Refusal to File Claim of United Technologies International, Inc. 205 Refusal to File Claim of Detroit Bank and Trust Company 206–7 Refusal to File Claims of Abdol Hamid Jahani Case 209 Refusal to File the Claim of Robert J. Lee 205 Reliance Group, Inc. Case 215, 232

Table of Cases

xxvii

Request for Examination of the Situation Case 135 Responsibility for Acts of Germany Committed Subsequent to July 31, 1914, and before Portugal Entered the War (Arbitration) 84 Resubmitted Case, Decision on Jurisdiction (Amco Case): see Amco Arbitration (Resubmitted Case: Jurisdiction) Rexnord, Inc. Case 219 Reynier and Erba 170 Reynold, Inc. Case 240 Reza Said Malek Case 212–13 Rhodope Forests Case 155, 158–9 Richard D. Harza Case 214, 235–6 Rio Grande Irrigation and Land Co. Case 25, 33, 72 Rio Grande Irrigation and Land Company Case: see Rio Grande Irrigation and Land Co. Case Rockwell International Systems, Inc. Case 132, 136, 144, 204, 246 Rockwell International Systems, Inc. Case (1983) 253, 254 Rockwell International Systems, Inc. Case (1989) 257 Rockwell International Systems, Inc. Case, Interim Award (6 June 1983): see Rockwell International Systems, Inc. Case (1983) Romak S.A. (Switzerland) v. the Republic of Uzbekistan 58–60 Ronald Stuart Koehler Case 202 Russian Indemnity Case 26 SA du charbonnage Frederic-Henri Case 124 Sabotage Cases 178 Saiga Case 85 Saint Naoum Case: see Saint Naoum Monastery Opinion Saint Naoum Monastery Opinion 178, 179–80 Salem Case 34, 58, 62 Sanchez Case 163–4 Saudi Arabia v. Aramco Arbitration 8 Savarkar Case 159 Schebegal Coporation Case 226 Schlegal Corporation Case 215 Schreck Case 178, 179 Seaco, Inc. Case (1986) 215 Seaco, Inc. Case (1987) 266 Sea-Land Service, Inc., Case 226 Sedco, Inc., et al. Case (1985) 208, 215 Sedco, Inc., et al. Case (1987) 174, 186, 266 Sedco, Inc., et al. Case (1989) 202, 238 Sehgal (No. 2) 173

xxviii

Table of Cases

Shahrem Mobasser Case 209 Shannon and Wilson, Inc. Case 213, 221 Shering Corp. Case 204 Shipside Packing Company, Incorporated Case 246, 247 Société “Radio-Orient” Arbitration 25, 33 Société “Radio-Orient” Case: see Société “Radio-Orient” Arbitration Société anonyme “Chemins de fer Zeltweg-Wolfsberg et UnterdranburgWoellan” Case: see Chemins de fer Zeltweg-Wolfsberg et Unterdranburg-Woellan Case Sola Tiles, Inc. Case 214 Soufraki v. UAE 183 South West Africa Cases (Second Phase) 76, 86–7 Southern Bluefin Tuna Cases: see Bluefin Tuna Cases SPP (ME) Ltd. and SPP Ltd. v. Egypt (1988, Jurisdiction) 31 SPP (Middle East) Ltd. and Southern Pacific Properties Ltd. v. Arab Republic of Egypt and Egyptian General Company for Tourism and Hotels 31–2 Springer Case 83 Stanwick Corp. et al. Case 202 Starrett Housing Corp. et al. Case 238 Steiner and Gross v. Polish State 104 Stevenson Case 162 Stone and Webster Overseas Group, Inc. Case 228 Sully Case 24 Swiss Confederation v. FRG (No. 1) 83 Sylvania Technical Sys. Inc. Case 237 T.C.S.B. Case 83, 227, 237 T.C.S.B., Inc. Case: see T.C.S.B. Case Taba Arbitration 13 Tadić 32, 34, 84, 88 Tadić Case: see Tadić Tadjer-Cohen Associates, Inc. Case 253 Tadjer-Cohen Associates, Inc. Case, Interim Award (11 Nov. 1985) 244, 254 Tarrab (No. 10) 173 Teledyne Industries Incorporated Case 245–6 Temple of Preah Vihear Case (Preliminary Objection) 79 Texaco v. Libya Arbitration 8 The Government of the Islamic Republic of Iran v. The Government of the U.S.A. 63 The Government of the Islamic Republic of Iran v. the Government of the United States of America (Cases No. A4 and A15(III) (19 January 1984) 258–9

Table of Cases

xxix

The Government of the Islamic Republic of Iran v. United States of America (Cases No. A4 and A15(III)), Interlocutory Award (1 Feb. 1984) 259 The Macedonian 158 The United States of America, on behalf of U.S. Nationals and the Islamic Republic of Iran, Award on Agreed Terms No. 483 239 The Wimbledon Case 61, 66–7, 150 Thevenet 169 Time, Inc. Case 218, 240 Tippets, Abbett, McCarthy, Stratton Case 201, 223, 228, 238 TME International Inc. Case 242 Tokios Tokele’s Case 144 Touché Ross and Co. Case (1983) 247 Touché Ross and Co. Case (1985) 257 Trail Smelter Arbitration: see Trail Smelter Arbitration (1938) Trail Smelter Arbitration (1938) 8, 154, 155–6 Trail Smelter Arbitration (1941) 83, 168, 170–3, 177–80 Trail Smelter Arbitration (Final Award): see Trail Smelter Arbitration (1941) Trail Smelter Case: see Trail Smelter Arbitration (1938) Tranter 168 Treaty of Neuilly Case (Interpretation) 185 Tunisia/Libya Continental-Shelf Case (Intervention) 122, 124 U.S.A. v. The Islamic Republic of Iran 62–3 Uiterwyk Case: see Uiterwyk Corp., et al. Case Uiterwyk Corp., et al. Case 186, 205, 215, 219, 220, 237 Uiterwyk Corp., et al. Case (Rectification etc.) 266 Uiterwyk Corporation Case: see Uiterwyk Case Uiterwyk Inc. Case: see Uiterwyk Case Ultrasystems Inc. Case 218, 227, 230–1 Ultrasystems Incorporated Case: see Ultrasystems Inc. Case Ungarische Erdges A.G. v. Etât romain 132 Ungarische Landes-Central Sprakassa Case 124 Unidyne Corp. Case 242 United Finance Company Case 157 United Painting Co., Inc. Case 224, 231 United Painting Company Case: see United Painting Co., Inc. Case United Parcel Service Case 125 United Technologies International Inc. Case 138, 141, 243, 250 Velasquez Rodriguez Case 103 Vernie Rodnye Pointin Case 231 Viviano Gallardo Case 103

xxx

Table of Cases

Walfish Bay Boundary Arbitration: see Walfish Bay Boundary Case Walfish Bay Boundary Case 8, 25, 33–4 Walter Fletcher Smith Case 159 Walter W. Arensberg, et al. Case 214, 236 Watkins-Johnson Co., et al. Case 257 Weil Case 178 Westinghouse Electric Corp. Case 234 Westinghouse Electric Corporation Case, Interlocutory Award 253 Whittaker Case: see Whittaker Corp. Case Whittaker Corp. Case 219, 220 William Bikoff, et al. Case: see Bikoff, et al. Case William J. Levitt Case 215 William Ray Hollyfield Case 221 Wimbledon: see The Wimbledon Case Wintershell A.G. et al. v. The Government of Qatar 69 Yeager Case 83, 227, 230 Young Case: see Young Plan Case Young Plan Case 34, 48, 52, 72, 73 Zamen Azar Nourafahan Case 214 Zokor International, Inc. Case 228

Part I Prologue

Chapter One Introductory Observations The object of the present study is to examine the jurisprudence of international arbitral tribunals in order, particularly, to indicate what common principles have evolved pertaining to their jurisdiction and to discuss the jurisdictional practice of the Iran-US Claims Tribunal. There are two preliminary observations to be made. First, the concern is with jurisdiction in international disputes. The meaning of “international disputes” has been elucidated by me in my treatise Jurisdiction of International Tribunals.1 The jurisdiction studied here is restricted to international disputes as there explained. Second, the study is confined to international tribunals, as also defined there,2 and only to international arbitral tribunals.3 As has been stated, In order that a tribunal may be characterized as an international tribunal, it must be created by states or international organizations which, though they may have international legal personalities of their own, are, nevertheless, composed principally of states. Tribunals created by international organizations may be regarded as derivatively created by states. The creators must be entirely states or international organizations or both, as parties to the act of creation.4

1 2 3

4

(2003) pp. 3–9. Ibid., pp. 9–12. Standing tribunals or courts, such as the ICJ and the ITLOS are not covered. The Iran-US Claims Tribunal, on the other hand, is an arbitral tribunal, though it has functioned for a long time. ICSID arbitral tribunals are ad hoc, being constituted under a specific chapeau regime. The chapeau jurisdiction formed the subject of Chapter 6 of my treatise Jurisdiction of Specific International Tribunals (2009). C.F. Amerasinghe, op. cit. note 1, pp. 10–11. In the case of the ICSID arbitral tribunals the system has been created by states, though individuals participate with states in the creation of individual tribunals. Tribunals created simply by states, on the one hand, and individuals, on the other, though they may be referred to as international, are not covered by the definition for the present purpose.

4

Chapter One

History of Arbitration As long as there have been identifiable separate groups in the world, there have been methods of peacefully settling disputes between them. Clearly some form of negotiation or consultation between the parties to the dispute was the most seminal and elementary form of dispute settlement. The use of these methods can be found in the pre-Christian era, whether in the West or the East. There is evidence that settlement of disputes akin to the modern international dispute with the intervention of a third party, whether by mediation, conciliation or arbitration, was also known in early times. More particularly there were systems of arbitration which have been documented going back to the Greek city-states and even early civilizations in other parts of the world. The history of the development of arbitration as a method of peaceful settlement of disputes between groups and later between nation-states demonstrates how third-party intervention became accepted as a legitimate means of settling disputes. However, arbitration in its modern form does not bear a resemblance to these early forms of arbitration. History shows that third-party settlement is not a modern phenomenon, although it never existed in its modern forms until recently, and its development into the current systems of arbitration and adjudication took a long time.5 Much of the evidence available concerns dispute settlement in the western world. Whatever may have been the position in other parts of the world, that did not influence modern developments. The settlement of disputes by arbitrators in its pre-modern form between groups such as citystates and later other polities occurred from pre-classical antiquity in the West down to the late Middle Ages. The importance of this kind of arbitration varied at different times. It was very different from modern international arbitration, and did not influence significantly the structure of international arbitration as prevails today. The Hellenic system of arbitration is known from inscriptions, from a number of actual decisions, e.g., the arbitration between Athens and Mytilene by Periander of Corinth concerning the possession of the strategically important fortress of Sigeion on the Hellespont and that between Athens and Megara by a tribunal of Salamis (both around 600 B.C.), and from events within the Hellenic Amphiktyony. The mechanism operated through regional religious organizations exercising a limited

5

See on the development of arbitration Schlochauer, “Arbitration” in Bernhardt (ed.), 1 Encyclopedia of Public International Law (1981) at pp. 15 ff. This section relies on the material in my treatise cited in note 1 above pp. 13–16.

Introductory Observations

5

jurisdiction under sacral law.6 The arbitrations among the non-hegemonial confederacies, however, were closer to arbitration in the modern sense. In the second half of the fifth century B.C. Athens and Sparta concluded treaties with some provision for the settlement of disputes by arbitration but they were never applied, since apparently no arbitrator was prepared to make a decision between the two powers, and the hegemony of one subsequently prevented the use of these provisions. Arbitrations are also to be found in the period from the battle of Chaironeia (338 B.C.), which put an end to the independence of the Greek communities in foreign relations, to the beginning of Roman rule (168 B.C.).7 These arbitrations were, however, clearly based on the dominance of Macedonian and, later, Roman tribunals. Similarly, in Roman times arbitral awards were, as a general rule, made either in the exercise of the sovereignty of Rome over other political bodies or as imperial measures to maintain the Pax Romana; Rome itself was never party to arbitration. A thousand years later in the Middle Ages there arose a form of arbitration which became widespread. Again this was nothing like modern international arbitration. It occurred first between the city-states of Italy, between Italian princes and communities and between Swiss cantons, and was later used between smaller political communities. On rare occasions it was to be found between other states. Medieval arbitration was generally characterized by the fact that it was a substitute for decision by the courts, similar to trial by ordeal, or in the nature of a feudal court to decide between parties of equal status, or jurisdiction claimed by the Emperor or by the Pope in virtue of his spiritual authority for himself or for his representative which can be traced to the idea of a Respublica Christiana. It was only in a formal sense an arbitration. Popes Innocent III and Boniface VII sought unsuccessfully to introduce a system of compulsory arbitration with the Pope as an independent arbitrator. In the kind of disputes which are typical of modern arbitration, such as frontier disputes, the exchange of prisoners of war and compensation for breaches of the peace by illegal acts of war, there was no clear dividing line between arbitration and diplomatic methods of settling the disputes. The position of the arbitrator was frequently that of a conciliator or amiable compositeur. Awards were generally based on rules borrowed from Canon Law, modified in part by legal scholars, or on principles taken from Roman private law and applied to questions of public and international law. In the course of the fifteenth century, as a result of the political changes

6 7

Lammasch, Die Lehre von der Schiedsgerichtsbarkeit in ihrem ganzen Umfange (1914) p. 24. Some of these concerned territorial disputes on the borders of the Hellenic empire, e.g., the disputes between Crete and the Aegean island states: see Lammasch, ibid.

6

Chapter One

principally, there was an increase in the non-observance of arbitral awards and this led to the decline of the medieval system of arbitration and its ultimate demise in the sixteenth century. As early as 13068 scholars and statesmen began to consider plans for an international peace organization, in which the establishment of arbitral tribunals would play a decisive part. Later Georg von Podebrad, for example, in his plan for a perpetual peace alliance (1462) recommended the creation of a Court for the Maintenance of Peace and the Duke of Sully suggested the settlement of disputes by arbitration within the framework of a world organization.9 There were also similar suggestions by Eméric Crucé10 and, at the time of the Peace of Utrecht by Abbe Saint Pierre.11 Hugo Grotius (and later Jeremy Bentham) considered arbitration and judicial settlement to be the most effective means for maintaining the peace.12 The same idea inspired the Quakers13 in the New World. As has been stated elsewhere, The conditions for the use of international arbitration in its modern form were only created with the gradual breaking up of the medieval world from the 17th century onwards and the rise of nation-states in a society of independent, sovereign states. The idea of arbitration was promoted by the existence side by side of equal powers maintaining legal relations with one another, and also by the gradual recognition of their interdependence. It was not till the 18th century that disputes between states were submitted to impartial bodies deciding according to objective rules. The development of modern international arbitration began in Anglo-American international legal relations and on the American continent. Its origin can be traced to the conclusion of the Jay Treaty of 1794 between Great Britain and the U.S.A. Numerous other similar treaties followed. After that arbitration was referred to in numerous treaties and it became a common feature of international relations in the west, principally. In 1899 and 1907 the Hague Peace Conferences produced a codification of the existing international law on arbitration and attempted to develop them further. These conferences produced the Conventions for the Pacific Settlement of International Disputes of 1899 and 1907. In the 20th century international arbitration developed further and has been frequently used.14

The creation of standing courts and tribunals in the twentieth century did not significantly interfere with the incidence and use of international arbitra-

8 9 10 11 12 13 14

See, e.g., Pierre Dubois, De recuperatione terrae sanctae (1306). See de Bethune, Memoires (between 1617 and 1635). Le nouveau Cynée (1623). Projet pour l’endre la paix perpetuelle en Europe (1713). “Plan for an Universal and Perpetual Peace” in Principles of International Law (1787). See Penn, Essay towards the Present and Future Peace of Europe (1693). C.F. Amerasinghe, op. cit. note 1 pp. 15–16.

Introductory Observations

7

tion. It is referred to in Article 33(1) of the UN Charter as a method of settling international disputes peacefully. It remains, inter alia, as an important alternative to recourse to standing courts and is still resorted to frequently. In general it may be said that parties to international disputes invoke arbitration principally because those parties may involve themselves in the choice of arbitrators or judges and also in matters of procedure, and choice of law. Be that as it may, modern international arbitration is a judicial method of dispute settlement.

Arbitration as a Means of Dispute Settlement “Arbitration” as such has a long history. However, in its modern form it dates back to the late eighteenth century – to the Jay Treaty, between the UK and the USA. Further, the commissions set up under the Jay Treaty, as also some other commissions established subsequently,15 were supposed to blend juridical with diplomatic considerations to produce what was in effect a negotiated settlement. Also the earlier practice of having a dispute arbitrated by one sovereign head of state or government led to the practice of answers being given to questions without reasons being given, so that it was impossible to identify the legal considerations underlying the decisions. It is only from the beginning of the twentieth century that the juridical element not only predominated but became potent. The 1899 and 1907 Hague Conventions for the Pacific Settlement of International Disputes described the object of international arbitration as the settlement of disputes between states by judges chosen by the parties themselves and on the basis of respect for law.16 They further provided that recourse to the procedure implied submission in good faith to the award of the tribunal. These treaties established two basic characteristics of arbitration – decisions binding upon the parties and on the basis of law. That the organs of decision are referred to as “tribunals” does not as such differentiate them from the permanent courts of the international system in regard to these two aspects. However, while both arbitration and judicial settlement are similar in these respects, they are structurally different from each other. Arbitration is resorted to by mutual consent of the states parties to a specific dispute where such parties retain considerable control over the process, particularly

15

16

See, e.g., the commissions established under the Treaty of Ghent (USA and UK) of 1814. For this section see C.F. Amerasinghe, op. cit. note 1 pp. 19–26. See Article 15 of the 1899 Hague Convention and Article 37 of the 1907 Hague Convention.

8

Chapter One

through the power of appointing arbitrators of their own choice.17 By contrast, judicial settlement relies upon pre-constituted international courts or tribunals, the composition of which is not in principle subject to control by the parties to the dispute. Arbitration generally or basically has as parties states or international organizations or such international entities. But sometimes arbitration in the international sphere pertaining to international disputes may be between states, international organizations or such entities, and individuals or juridical persons, provided these arbitrations are constituted under international treaties or agreements to which the above entities are parties. Strictly, arbitrations between states, international organizations or such entities and individuals as are not under the aegis of an international treaty or agreement as far as their sponsorship goes are not international arbitrations but are in the realm of national legal systems. While these18 are important in across-the-border relations they are not international arbitrations of the international legal system as such. Apart from the 1899 and 1907 Hague Conventions, arbitration, as a means of peaceful settlement of disputes between states, is provided for in a number of multilateral treaties of global or regional character and also in several bilateral treaties.19 Arbitration, thus, emerged as one of the third-party procedures most frequently chosen for settling, for example, territorial and boundary disputes,20 disputes concerning interpretation of conventions or treaties,21 and those relating to any violation of international law.22 The 1899

17

18

19

20

21

22

Sometimes the parties may be bound by advance agreement to appoint arbitrators from a pre-existing list: see the 1907 Hague Convention and the 1982 UN Convention on the Law of the Sea (UNCLOS) in Article 2 of Annex VII and Article 2 of Annex VIII. See, e.g., the Texaco v. Libya Arbitration (1977), 53 ILR p. 389; the Saudi Arabia v. Aramco Arbitration (1958), 27 ILR p. 117. See, e.g., arbitration under the auspices of the ICSID established under the Convention for the Settlement of Investment Disputes between States and Nationals of Other States (1965): 4 ILM (1965) p. 532, and the Iran-US Claims Tribunal established under the Algiers Accords: 20 ILM (1981) p. 224. See, e.g., the Rann of Kutch Arbitration (India v. Pakistan) (1968), 7 ILM p. 633; ArgentinaChile Frontier Case (1966), 16 UNRIAA, pp. 109–81; the Beagle Channel Arbitration (Chile v. Argentina) (1978), 52 ILR, p. 93; the Walfish Bay Boundary Case (Germany v. GB) (191l), 11 UNRIAA, pp. 263–308. See, e.g., the Air Transport Agreement Case (USA v. France) (1963), 16 UNRIAA, pp. 5–71; Air Service Agreement Case (USA v. France) (1978), 18 UNRIAA, pp. 417–53. See, e.g., the Alabama Claims (USA v. UK), Moore, 1 History and Digest of the International Arbitration to which the United States has been a Party (1898). p. 653; the Trail Smelter Arbitration (USA v. Canada), 3 UNRIAA, pp. 1907–82; Lake Lanoux Arbitration (France v. Spain), 12 UNRIAA, pp. 281–317, and generally cases reported in 1–9 UNRIAA.

Introductory Observations

9

and 1907 Hague Conventions established the PCA to facilitate the settlement of disputes which diplomacy had failed to settle. In practice there are types of disputes which states have excluded from arbitration made available under a particular treaty, such as disputes arising from facts or events which occurred prior to the treaty establishing the arbitral procedure in question, disputes relating to questions which are within the exclusive jurisdiction of a state, disputes which concern the territorial integrity of a state, disputes concerning military activities, including military activities by government vessels and aircraft engaged in non-commercial service, and disputes in respect of which the Security Council of the United Nations is exercising the functions assigned to it in the Charter of the United Nations, unless the Security Council decides to remove the matter from its agenda or calls upon the parties to settle it by another peaceful procedure. Consent of the parties to arbitration may be expressed prior to or after the occurrence of a dispute. Parties may agree to submit all or special categories of future disputes to arbitration. This may be done through multilateral or bilateral treaties of a general nature or by the inclusion of a compromissory clause in a treaty which covers disputes, in general arising from the treaty or by special agreement or a Compromis subsequent to the occurrence of the dispute. Compromissory clauses, which are generally drafted in general terms, while expressing the consent of the parties to submit all or certain types of disputes to arbitration, often lack specificity as to the rules of establishment and operation of the tribunal. In addition to the compromissory clause the parties concerned must usually enter into a special Compromis which deals with the constitutional aspects of the arbitral tribunal to be established. Thus, in such a Compromis the parties to the dispute may deal with such issues as the composition of the tribunal, including the size and the manner of appointments and the filling of vacancies; the appointment of agents of the parties to the dispute; the questions to be decided by the tribunal; the rules of procedure and method of work of the tribunal including, where applicable, the languages used; the applicable law; the seat and administrative aspects of the tribunal, the financial arrangements for the expenses of the tribunal and the binding nature of the award of the tribunal and obligations and rights of the parties relating thereto. Not all these matters are always dealt with in Compromis and sometimes other issues are addressed. Arbitration as a third-party procedure may be performed by one individual appointed by the parties to the dispute, as a sole arbitrator or umpire,23 or by a group of individuals appointed to form an arbitral tribunal. In most

23

See, e.g., the appointment of the King of Italy as the sole arbitrator under the treaty of 6 November 1901 between the United Kingdom and Brazil regarding the boundary dispute

10

Chapter One

cases an odd number of arbitrators is usually provided for: some require five arbitrators24 while the most common practice has been arbitral tribunals of three members.25 Each party to the dispute has then the right to appoint either one of the three arbitrators, or two of the five arbitrators as the case may be. The third or the fifth arbitrator, who is also often designated chairman, is normally appointed by a joint decision of parties to the dispute and, in some cases, by a joint decision of the respective arbitrators already appointed by the parties. Where difficulties arise in the appointment of either the third or the fifth member, thus preventing the completion of the composition of the tribunal, the parties to the dispute may assign the right of making the necessary appointment in such a case to a third state, or a prominent individual.26 Some Compromis, after specifying certain rules of procedure, leave the determination of the remaining procedural questions entirely to the arbitral tribunal. For example, one Compromis provided that “the Tribunal shall subject to the provisions of this Compromis, determine its own procedure and all questions affecting the conduct or the arbitration”.27 Some Compromis, on the other hand, have used a more restrictive language in granting full competence to the tribunal to set rules of procedure. For example, one Compromis, after specifying rules of procedure for the arbitral tribunal, provided that: “In determining upon such further procedure and arranging subsequent meetings, the tribunal will consider the individual or joint requests of the

24

25

26

27

between British Guyana and Brazil, 12 UNRIAA p. 17; and the Island of Palmas Case, 2 UNRIAA p. 830. See, e.g., Geneva General Act for the Pacific Settlement of International Disputes, Article 22, 93 UNTS. p. 345. The Compromis of 11 September 1986 between Egypt and Israel regarding their boundary dispute in the Taba beachfront established a five-member tribunal. Each party appointed one member and the three other members, one of which was the President, were appointed by the parties jointly: Article 1 of the Compromis, 26 ILM p. 1. See, e.g., International Convention for the Protection of New Varieties of Plants of 2 December 1961. Article 36, 815 UNTS p. 89; Protocol on Privileges and Immunities of the European Space Research Organization of 31 October 1963, Article 27, 805 UNTS p. 279. See, e.g., Article 45 of the 1907 Hague Convention for the Pacific Settlement of International Disputes, in which the task is assigned to a third state, and Article 23 of the 1949 Revised General Act for the Pacific Settlement of International Disputes, in which that appointment task is first assigned to a third state and then to the President of the International Court of Justice. Article V of the Compromis of 22 January 1963 between France and the US regarding the interpretation of the Air Transport Services Agreement, 16 UNRIAA p. 9. Similarly, a broad competence was provided for another tribunal. The Compromis of that tribunal stated that “the Court shall, subject to the provisions of this Agreement, determine its own rules of procedure and all questions affecting the conduct of the arbitration”: Article 3 of the Compromis of 19 July 1975 (France and UK), 18 UNRIAA p. 5.

Introductory Observations

11

agents of the two governments.”28 Another agreement instructs the tribunal to ascertain the views of the parties before determining a particular rule of procedure.29 Parties to an arbitration may agree on the law that the tribunal should apply to their disputes. Some arbitration agreements require that specific rules be applied,30 and some only make a general reference to the applicable law. Many arbitration agreements in some way specifically stipulate international law as the applicable law.31 Some arbitration agreements have remained silent on this issue, in which case the assumption is that international law in general shall be applicable. Other arbitration agreements have chosen principles of equity, justice, equitable solution, etc., as applicable to the dispute.32 Parties to a dispute submitted to an arbitral tribunal are represented by agents whose appointment and powers may be stipulated in the Compromis indicating the time-period within which they are to be appointed.33 Such agents are usually entitled to nominate an assistant agent as occasion may require, and may be further assisted by such advisers, counsel and staff as the agent deems necessary. The agents of the parties to the dispute file written pleadings which may be limited to memorials and counter-memorials34 and which may be submitted in the order and within the time-limits determined by the tribunal. Such determination may also be made by the tribunal with respect to the oral proceedings and relevant documentary evidence. As appropriate, arbitral tribunals have also heard witnesses on behalf of parties to the dispute and have also made use of expert witnesses providing expert opinion to the tribunal on a given issue, as may be explicitly stated in a

28

29

30

31

32

33 34

The Convention of 3 August 1935 between the United States and Canada Concerning the Settlement of Difficulties Arising from Operation of a Smelter at Trail, 3 UNRIAA p. 1907. The Treaty for Conciliation. Judicial Settlement and Arbitration (with annexes) of 7 July 1965 between the United Kingdom of Great Britain and Northern Ireland and Switzerland, 605 UNTS p. 205. See the Treaty of Washington of 6 May 1871, which constituted the basis for establishing the Alabama Claims tribunal between the United States and the United Kingdom in Moore, International Arbitrations, p. 547. See, e.g., those mentioned in Systematic Study of Treaties for the Pacific Settlement of International Disputes, 1928–1948 (UN publication). See, e.g., the “equitable solution” principle applied by the 1872 arbitral tribunal in the Delagoa Bay Case (GB v. Portugal), Moore 5 International Arbitrations p. 494; the 1890 Bering Sea Case (GB v. US). 6 AJIL (1912) p. 2. See also the 1949 Revised General Act, Article 28: 71 UNTS p. 101, which recommends the application of these principles. Some Compromis do not do either. See, e.g., Article 5 in the Ambatielos Arbitration, 12 UNRIAA p. 8.

12

Chapter One

Compromis.35 The arbitrators as well as the parties to the dispute have the right to cross-examine such witnesses in the manner stipulated in a Compromis.36 The seat of the arbitral tribunal is usually specified in the Compromis. Where there is no such specification, the tribunal itself may, as recommended by its president,37 determine where to conduct its business. Arbitral tribunals are usually assisted by a secretariat or a registry to be responsible for the administrative arrangements for the arbitration. Two kinds of expenses are involved in an arbitration proceeding. One relates to the preparation of each party’s case and its presentation to the arbitral tribunal. These expenses are borne by the parties themselves. Other expenses include the common expense of the arbitral tribunal, such as the arbitrators’ fees, the salary of the registrar and the staff of the arbitral tribunal, interpreters, clerical facilities and such like. Parties to the dispute share the administrative costs of the tribunal. Generally the arbitrators’ fees are borne equally by both parties. Occasionally, however, some Compromis provide that each party pay the fees of their appointed arbitrator.38 Awards of arbitral tribunals are binding upon the parties to the dispute. Invariably, in all the Compromis, parties to the dispute also stipulate that they undertake to abide by the decision of the arbitral tribunal. However, after an award has been rendered, it may be subject to correction or revision in connection with obvious errors such as clerical, typographical or arithmetical errors.39 An award may also be subject to interpretation. Article 82 of the 1907 Hague Convention provides for a general competence for the arbitral tribunal which rendered the award to interpret it. There are also circumstances in which an award may be annulled, e.g., for fraud, or reviewed but there is generally no appeal from an award. Arbitration in its modern form began as an attempt to bring into the international system the rule of law and to replace with a technique of litigation resort to the use of armed force in the settlement of disputes. Since the 35

36

37

38

39

See, e.g., Articles 9 and 10 of the 30 July 1954 Compromis between the UK and Saudi Arabia, 201 UNTS p. 317. See, e.g., the 30 June 1965 Compromis between India and Pakistan regarding boundary arbitration, 17 UNRIAA p. 9, and the 16 July 1930 Compromis between Guatemala and Honduras, 2 UNRIAA p. 1312. See, e.g., Article 5 of the 10 July 1975 Compromis between France and the UK in the case concerning the delimitation of the continental shelf, 18 UNRIAA pp. 5 and 6. See, e.g., Article 12 of the Convention for Arbitration of Questions Regarding the Jurisdictional Rights in Bering Sea of 29 February 1892, in Moore, 5 International Arbitrations, p. 4762. See Article 31 of the ILC Model Rules in the Work of International Law Commission, 4th ed. (UN publication) p. 154.

Introductory Observations

13

establishment of the PCIJ and ICJ resort to arbitration in strictly interstate disputes has been less frequent. However, there are examples of significant interstate arbitrations, especially in territorial disputes, such as the Rann of Kutch Arbitration (India v. Pakistan) in 1968,40 the Beagle Channel Arbitration (Chile v. Argentina) of 197841 and the Taba Arbitration (Egypt v. Israel) of 1988,42 but also in other kinds of disputes,43 such as those involving the interpretation of treaties. What is to be noted though, is that the number of arbitrations involving a state as only one party, the other being an individual or juristic person, which have taken place under some kind of treaty between states, has increased. Arbitration may also now be institutionalized. The first attempt to do this was in the Hague Conventions of 1899 and 1907 pursuant to which the PCA was created. But the PCA was not a court nor did the institutionalization associated with it have any compelling nature. Much later, pursuant to the ICSID Convention of 1965, the ICSID was created with a true institutionalized and cogent structure for a particular kind of dispute. There is also the institutionalized arbitration system under the UNCLOS which, however, has been used less. A feature which modern arbitration shares with settlement of disputes by resort to standing courts, such as the ICJ, is that decisions (or awards) are based on law and are the result of adjudication, unless otherwise stated in the Compromis. Long-term arbitral bodies of an ad hoc nature, such as the Iran-US Claims Tribunal have functioned and function successfully, though they are not permanent bodies. This form of arbitration perhaps had its origin in the Claims Commissions of the nineteenth century but the modern phenomenon is of a more structured and sophisticated nature, almost comparable to a one-time institution, functions for a longer period and is of a broad nature in terms of jurisdiction. At the same time it is clear that the essentially ad hoc, onetime arbitration continues to survive and be resorted to on a frequent basis.44 The observation to be made is that adjudicatory settlement of international disputes by arbitration has become a common feature of international relations, has taken effective shape and has developed into one of the most viable means of international dispute settlement, even though it may not be the only one to which resort is had. 40 41 42 43 44

(1968), 7 ILM p. 633. (1978), 52 ILR p. 39. (1988), 80 ILR p. 224. See, for instance, the Bluefin Tuna Arbitration (2000), 39 ILM p. 1359. See Coussirat-Coustère and Eisemann, 1–4 Repertory of International Arbitral Awards (1989–91), for numerous examples.

14

Chapter One

Representation before Arbitral Tribunals An important aspect of effective adjudicatory procedures is representation for the parties. Generally parties may be represented before tribunals by persons of their choosing. There is no international bar as such to which persons who represent parties must belong, nor is it necessary that representatives belong to a national bar. As a consequence a legal qualification of any kind, let alone a qualification in international law, is not required even as a minimum for such representation. There are no general binding rules relating to representation which are binding on and govern international arbitral tribunals as such, though it is in the interests of the parties to have persons to represent them who are qualified and competent in the relevant law, which is international law or some aspect of it. Exceptionally the rules of a tribunal (sometimes, the statute or basic instrument) has provisions dealing with representation. In particular ad hoc arbitral tribunals do not generally have strict provisions governing representation. The UNCITRAL rules which are model rules for arbitration provide in Article 4 specifically that the parties may be represented or assisted by persons of their choice. Here there is no reference even to counsel or advocates which terms generally imply some kind of legal qualification in the person representing or assisting. The Iran-US Tribunal retains this UNCITRAL rule as Article 4 of its own rules of procedure.45 Representation of parties has generally not posed a problem in international arbitral adjudication. The approach has been to give the parties as much freedom as possible while also enabling them to use legally qualified persons to represent and assist them. Because legal expertise in the international legal field, whatever the area, is not dependent on admission to a national bar, such expertise being often located in persons with academic experience of some kind, rightly no insistence has generally been placed on national legal professional qualifications. On the other hand, while maximum freedom may be desirable, the need for some legal experience and qualifications, not necessarily professional or related to a national bar, cannot be denied if parties are to be effectively represented. Tribunals in general by not having restrictive applicable provisions but having very general provisions, if at all, have made it possible for the parties to opt for efficient representation, if they so wish.

45

2 Iran-US CTR p. 411.

Introductory Observations

15

Personality of Arbitral Tribunals Suffice it to note in passing that all international arbitral tribunals, which are created directly or indirectly by agreement between sovereign states most probably have international personality, i.e. separate personality as international organizations in public international law. This reality emerges from a case decided in 1987 by the Supreme Court of the Netherlands, AS v. IranUnited States Claims Tribunal.46 In that case the parties agreed on this point and the court adverted to this agreement in its judgment. However, because the issue related to jurisdiction, the court would have had to take it up, had it been its view that the Iran-US Tribunal was not endowed with international personality.

The Place of Precedent In the international legal system there is no principle of stare decisis, as understood in common law jurisdictions. Rather, as President Winiarski of the ICJ put it in a speech in the early 1960s, in regard to the ICJ, the Court has been conscious of the need to maintain a continuity of tradition, case law and methods of work without being bound by stare decisis as a principle or rule, and has sought guidance in the body of decisions of the PCIJ (and in its own earlier decisions) with the result that there is a remarkable unity of precedent, an important factor in international law.47 The ICJ itself has adopted a similar point of view. Thus, in the Libya/Malta Continental Shelf Case the Court mentioned that justice of which equity is a manifestation should display consistency and a degree of predictability.48 Later, in the Land and Maritime Boundary between Cameroon and Nigeria Case (Preliminary Objection) the Court formally endorsed this view, stating that the relevant question was whether there was cause not to follow the reasoning and conclusions of earlier cases.49 A corollary to this recognition of precedent as a force in the judicial function of the ICJ, is the Court’s approach to distinguishing cases. As has been said,

46

47 48 49

(1985), 94 ILR p. 327 (English translation). See for the local court decision, (1984), ibid. p. 326. See also the discussion in C.F. Amerasinghe, op. cit. note 1 pp. 41–4. See ICJYB 1961–1962 at p. 2. 1985 ICJ Reports at p. 39. 1998 ICJ reports at p. 292. See also for support for the view the Jan Mayen Case, 1993 ICJ Reports at p. 64. On the subject of precedent in the ICJ see the examination by Rosenne, The Law and Practice of the International Court 1920–2005 (2006) pp. 1552 ff.

16

Chapter One Corresponding to this is the care evidenced by the Court not formally to overrule earlier decisions but rather, where necessary, to try to explain away an earlier decision which it feels unable to follow. It does this usually on the basis of some factual particularity in one of other of the cases. The attitudes adopted in later decisions towards the 1959 decision in the Aerial Incident of 27 July 1955 Case illustrate this process and the relativity of the requirement of consistency of jurisprudence.50

It has also been pointed out that both the PCIJ and ICJ have used decisions of international arbitral tribunals as precedents.51 The practice of the ICJ is relevant to the functioning of international arbitral tribunals. Arbitral tribunals do respect precedents, whether of the ICJ (and PCIJ), other standing tribunals or other arbitral tribunals. They would use such precedents in establishing the law for the case before them. One arbitral tribunal will not lightly disregard a principle established by another tribunal. Nevertheless, arbitral decisions, it must be borne in mind, do not bind anyone or any court or tribunal beyond the parties to the arbitration. Moreover, care is taken by arbitral tribunals to apply assiduously the jurisdictional Compromis or agreements establishing them, which may render the decisions of earlier tribunals inapplicable. There are some caveats. Claims Commissions or Claims Tribunals have jurisdiction over many cases. A full tribunal, as opposed to a smaller tribunal, constituted under the same treaty or instruments establishing the Claims Tribunal, as in the case of the Iran-US Claims Tribunal, can issue decisions the law in which binds the smaller tribunals dealing with individual cases. Moreover, as between smaller tribunals in such cases, the decisions of earlier small tribunals would be treated with respect as precedents for the law, although not binding on later tribunals. The Iran-US Claims Tribunal in particular has tended to act in this fashion. While earlier precedents are respected by arbitral tribunals, there have been instances in which tribunals have gone their own way, thereby creating a conflict in the law applicable. Such is the case with the law relating to dual or multiple nationality in regard to compétence or admissibility of individual claims. The Iran-US Claims Tribunal was faced with this conflict and the full tribunal (nine members) resolved it for the work of the small tribunals (three members each).52 It is true, however, that there is a marked tendency among arbitral tribunals in the modern era to respect earlier precedents, including

50 51 52

Rosenne, ibid., p. 1555. Rosenne, ibid., pp. 1552, 1556 ff. See, for a discussion of the problems of dual nationality, with special reference to this tribunal, C.F. Amerasinghe, Diplomatic Protection (2008) pp. 266–76, C.F. Amerasinghe, op. cit. note 1 pp. 107–12.

Introductory Observations

17

those of the PCIJ and ICJ, even though they are not binding on them. This is the case with jurisdictional provisions of Compromis. It is possible, thus, to derive principles relating to the jurisdiction of international arbitral tribunals from the existing case law of international tribunals. Where there is no arbitral precedent, the case law of standing international courts may be relevant in establishing the law. Where neither arbitral precedents or precedents of standing courts exist, reasoning from principle may have to be adopted. It must be noted that in the practice of arbitral tribunals a distinction must be made between situations which require a tribunal to make differences from an earlier case or earlier cases based on the specific facts before it and those which are based on a different view of the principle or principles of law applicable. A tribunal is less ready to depart from established principle, revealed in precedents, while in the case of the former situation the tribunal will regard itself as compelled to make the differences apparent and distinguish the case before it. Tribunals respect earlier decisions generally and follow precedents. In such instances subsequent cases may be regarded as having been decided by the application of what have become general principles of law. The short point is that acceptance of a doctrine of stare decisis by international arbitral tribunals, and in regard to jurisdictional matters in particular, is not essential to create a practice of respecting precedents relating to principles of law established in earlier cases whether decided by standing courts such as the International Court of Justice or by individual tribunals. Consistency in principles of law is a value respected and accepted by tribunals or courts in any viable and effective system of justice. Moreover, predictability is also a value respected in connection with the administration of justice. The practice of applying in regard to principles of law precedents found in earlier cases is of particular value in the field of the jurisdiction of international arbitral tribunals. That having been said, it must also be recognized that the particular statutory instruments of each tribunal must be faithfully interpreted and applied. Precedent may be invoked, only provided violence is not done to the statutory instruments as drafted.

Scheme of Work The approach taken here examines the practical exercise of jurisdiction by international arbitral tribunals in the key areas of judicial settlement. Beginning in Part II with la compétence de la compétence (Chapter 2), the work examines also consent as the basis for jurisdiction of arbitral tribunals (Chapter 3), the interpretation of jurisdictional instruments (Chapter 4),

18

Chapter One

compétence including matters relating to the constitution of tribunals (Chapter 5), inadmissibility or irrecevabilité (Chapter 6), incidental jurisdiction covering jurisdiction relating to intervention and interim measures (Chapter 7), jurisdiction vis-à-vis remedies (Chapter 8), and jurisdiction to reopen cases (Chapter 9). The discussion will be of the general principles relating to arbitral tribunals and not of the jurisdiction of individual arbitral tribunals in particular,53 under their specified Compromis. However, in a separate chapter (Chapter 10) in Part III the jurisdictional questions which have arisen specifically relating to the Iran-US Claims Tribunal are discussed. The understanding is that this tribunal is not only longstanding but has evolved a specific jurisprudence on its own jurisdiction.54 The inclusion of the material as it appears per se in my earlier publication, Jurisdiction of International Tribunals, does make sense and needs no elaborate justification. The object of the present book is to present to the student, academic or practitioner a clear and full picture of the general principles of arbitral jurisdiction in public international law and to discuss the same.55 The study brings together in one book material on the jurisdiction of international arbitral tribunals and examines that jurisdiction. Incorporating, with appropriate adjustments, the earlier material, thus, makes it possible for a reader to have in one place what is necessary for the understanding of the subject. Chapters 2 to 9 (Part II) of the present work qualify as a second revised edition of the material on international arbitral tribunals in the earlier treatise. Chapter 10 (Part III) is completely new. At the same time it must be recognized that there are many principles in the jurisdictional field which are common to arbitral tribunals and such standing courts as the ICJ and ITLOS. On the other hand, while the jurisprudence of the ICJ and such standing courts will be called in aid as relevant precedents, where appropriate, the fact that there are differences must also be admitted. Consequently, the three books now form a trilogy. Readers interested in the jurisdiction of international tribunals will find all three books by me relevant to the subject and useful. Those interested in an across-the-board consideration of the law governing the jurisdiction of international tribunals will still find Jurisdiction of International Tribunals (2003), so to speak, required reading. In the second book of the trilogy, Jurisdiction of Specific 53

54 55

As may be expected, material in my earlier treatise, Jurisdiction of International Tribunals (2003), on arbitral tribunals has been used unsparingly. Both this present work and the earlier work emanate from the same publisher. The chapter on this tribunal, unlike the earlier chapters, contains completely fresh material. It should also be noted that the earlier book discussed the law relating to international jurisdiction in general, including material also on international arbitration.

Introductory Observations

19

International Tribunals (2009), readers will find a detailed consideration of six specific standing international tribunals or systems of international tribunals which are regarded as the most important. In this, the third book of the trilogy (2011), the jurisdiction of international arbitral tribunals in general and of the Iran-US Claims Tribunal, a longstanding ad hoc arbitral tribunal, in particular, is considered.56 On another note, while primary sources are referred to in the body of the text, secondary sources have been used, where useful.57

56 57

Martinus Nijhoff Publishers are the publishers of all three books. Aldrich, The Jurisprudence of the Iran-United States Claims Tribunal (1996), and Brower and Brueschke, The Iran-United States Claims Tribunal (1998), are to be noted in relation to Chapter 10 below.

Part II Generalities

Chapter Two La Compétence de la Compétence The first question that may face an international arbitral tribunal after it has been constituted is whether it has jurisdiction (compétence) to determine its own jurisdiction (compétence), i.e., whether it has power to decide whether it may proceed with the judicial settlement of the particular case (la compétence de la compétence). It is not a question that generally must be decided unless the matter is raised. Indeed, in many cases, tribunals have simply decided on their jurisdiction.

History As early as 1796 in the proceedings in the Betsey Case, decided under the Jay Treaty of 1794 between Great Britain and the USA there arose for the first time a difference of opinion especially as to the power of the Commission to determine for itself to what cases its jurisdiction extended.1 While there was disagreement among the Commissioners the Lord Chancellor of Great Britain expressed the view that any doubt respecting the authority of the commissioners to settle their own jurisdiction was absurd and that they must necessarily decide whether cases are within or without their competency.2 The matter did not go any further and the tribunal on the basis that the disagreement did not exist anymore whether among the commissioners or between the parties proceeded to settle the question of its jurisdiction.3 However, the principle itself that a tribunal has jurisdiction to decide on its own

1 2 3

See Moore, 4 International Adjudications, Modern Series (1931) p. 82. Moore, ibid. p. 85. In an earlier arbitration under the Jay Treaty the issue of la compétence de la compétence had arisen and resulted in arbitrators withdrawing because of disagreement: see Moore, 3 History and Digest of International Arbitrations (1898) p. 2277. In the Betsey Case the two American Commissioners expressed views in favour of la compétence de la compétence:

24

Chapter Two

jurisdiction did not come to be accepted immediately in litigation, as the subsequent history of the Jay Treaty arbitrations themselves shows.4 There were, nevertheless, several subsequent arbitrations in which the principle was followed without much discussion or was asserted by the tribunal.5 In 1866 in the “La Constancia” Case the mixed commission stated that certain facts adduced were “insufficient to absolve the Commission from examining whether consistently with the principles of international law they can or not assume jurisdiction” over certain claims.6 Yet, in the Alabama arbitration a statement made by the arbitrators was the result of agreement between the parties after an exchange of views, the agreement being that the tribunal should be allowed to determine its own jurisdiction, while the parties did not have to accept the tribunal’s determination unless they assented to it.7 This was not a true judicial determination of the issue. Several authors treat this arbitration as the starting point for the acceptance of the legal principle that tribunals have the competence judicially to determine their own competence,8 while in reality the principle was not judicially applied as a legal principle in that case. It had already been applied as such in the “La Constancia” Case which was decided by the Colombia-US Mixed Commission in 1866 several years before the Alabama Arbitration which was decided in 1872. In the late nineteenth and early twentieth centuries many arbitration treaties, both multilateral and bilateral, included an express provision that tribu-

4

5

6

7 8

(1797), Moore, 3 ibid. pp. 2278 ff. In the result their views were accepted because the British government agreed with them. See the Sully Case (1798), Moore, 3 ibid. pp. 2104 ff. Problems were still solved diplomatically and politically rather than judicially. See, e.g., the Claim of the United States and the Paraguay Navigation Case (1859, USA v. Paraguay), Moore, 2 ibid. pp. 1485 ff.; the Isaac Harrington Case (1962, USA v. Costa Rica), Moore 2 ibid. pp. 1551 ff.; the Colombian Bond Cases (1866, USA v. Colombia), 4 ibid. pp. 3614 ff.; the Blondel Case (1869, GB v. Venezuela), Lapradelle-Politis. 2 R.A.I. pp. 535 f. Moore, 3 op. cit. note 3 at p. 2740. See also the Moverie Case, referred to in Ralston, The Law and Procedure of International Tribunals (1926) at pp. 47–8, referring to Lobo’s BrazilianBolivian Arbitral Tribunal. Moore, 1 op. cit. note 3 at p. 647. Cavaré, 2 Le Droit International Public Positif (1962) p. 230. Berlia, “Le Jurisprudence des Tribunaux Internationaux en ce qui concerne Leur Compétence”, 88 Hague Recueil (1955) at pp. 199, 222. Rousseau, 5 Droit International Public (1983) p. 324 (view expressed originally in 1953); Fitzmaurice, 2 The Law and Procedure of the International Court of Justice (1986) p. 452 (article originally published in 1958); Rosenne, 2 The Law and Practice of the International Court of Justice (1997) pp. 848–9. Indeed, the ICJ seems to have adopted the view espoused by these authors in the Nottebohm Case (Preliminary Objection): 1953 ICJ Reports at p. 119.

La Compétence de la Compétence

25

nals had la compétence de la compétence.9 There were also several arbitrations in which the principle of la compétence de la compétence was expressly acknowledged and applied. It was recognized in 1884 in the Le More Case where the claim was dismissed for want of jurisdiction after one of the parties insisted that the tribunal decide on its jurisdiction and the tribunal did so.10 Later in 1900 in the Dreyfus frères et Cie et al. Case between Chile and France, where the constitutive document referred to the principle, the tribunal said “la doctrine at la jurisprudence sont unanimes pour admettre que les Tribunaux internationaux apprécient eux-mêmes leur compétence . . .” and applied the principle.11 In the Walfish Bay Boundary Case of 1911 the tribunal said, in applying the principle, “it is a constant doctrine of public international law that the arbitrator has powers to settle questions as to his main competence by interpreting the range of the agreement. . . .”12 When the issue arose in 1923 in the Rio Grande Irrigation and Land Co. Case,13 and more recently in 1940 in the Société “Radio-Orient” Arbitration,14 both decided after the 1907 Hague Convention had come into force, the tribunals, and the latter a PCA arbitral tribunal, had no hesitation in asserting the principle. In the former case the tribunal referred specifically to Article 73 of the Hague Convention15 and in the latter the tribunal stated: “tout tribunal d’arbitrage international est juge de sa propre compétence”.16

9

10

11 12 13 14 15 16

See, e.g., Hague Convention No. 1 for the Pacific Settlement of Disputes (1899), Article 48; Hague Convention on the Pacific Settlement of International Disputes (1907), Article 73; Arbitration Treaty (1902) among Argentina, Bolivia and Other States; Compromis d’Arbitrage 11(14) between France and Peru, Article 3 (see 1 UNRIAA at p. 217); Convention for the Submission to Arbitration of Certain Claims against the Government of Costa Rica (1922) between Great Britain and Costa Rica. Article 1 (see 1 UNRIAA at p. 372); Agreement Related to the British Properties in Spanish Morocco (1923) between Spain and Great Britain, Article 2 (see 2 UNRIAA at p. 621): Compromis (1925) between the USA and the Netherlands, Article 5 (see 2 UNRIAA at p. 833); Compromis (1930) between Germany, Belgium and Other powers, Article 15(8) (see 3 UNRIAA at p. 1373); Compromis Concerning the Tardien Accord (1936) between Belgium and France, Article 2 (see 2 UNRIAA at p. 1703). (1884, USA v. France), Moore, 2 op. cit. note 3 p. 1133 at pp. 1143–4. See also the Didier Case (1892, Chile v. USA), Moore, 4 ibid. at p. 4331 where the tribunal’s compétence de la compétence was exercised, though it was not a serious issue. (1900, Chile v. France), 15 UNRIAA at p. 99. (1911, Germany v. UK), 11 UNRIAA at p. 307. (1923, UK v. USA). 6 UNRIAA at p. 131. (1940, Egypt v. Syria and Lebanon). 3 UNRIAA p. 1874. 6 UNRIAA at p. 136. 3 UNRIAA at p. 1878. In several cases decided by the PCA tribunals the principle was applied without argument: see, e.g., the Pious Fund Case of Californias (1902, Mexico v.

26

Chapter Two

Initial Explanation of the Rule The two commissioners in the Betsey Case who took the view that the tribunal had the power to decide on it own jurisdiction when the principle was questioned for the first time gave the following reasons in their opinions in support of the principle on the basic understanding that the power was selfevident and incident to the powers conferred on the Commission:17 (i) It was clear that the parties did not envisage a future reference back to themselves to determine the cases which should be submitted to the Commission because the parties had neglected to mention it.18 (ii) If the Commission could not decide itself on its jurisdiction and was not asked to refer the question to the parties, the consequence would be that it should either assume that the case “was within its jurisdiction, or refer it to some other tribunal to determine this issue. Neither consequence was acceptable, the former because it would mark injustice in the absence of an examination of the question and the latter because there was no authority for it in the treaty of submission and there was no tribunal or person authorized to make this determination.19 (iii) The power to decide whether the claim was a case described in the arbitration treaty was implied in, if not explicitly understood from, the very power to decide on the justice of the claim – a denial of this being a contradiction.20 (iv) The Commission had previously dismissed several claims upon the sole ground of want of jurisdiction after the respondent had questioned its jurisdiction, which was the proper exercise of the Commission’s powers.21 (v) In view of (iv) above, the absence of competence to determine jurisdiction would be an exception which is subject to proof.22 (vi) The analogy with municipal (national) experience showed that courts of justice must decide on their jurisdiction whenever such jurisdiction is questioned.23 (vii) If there was a danger in allowing the Commission this power, the answer was to be found in the Law of Nations, the Common Law of England and common sense, namely that a party is not bound by the decision of arbitrators in a

17 18 19 20 21 22 23

USA), 9 UNRIAA p. 11; the Russian Indemnity Case (1912, Russia v. Turkey), 11 UNRIAA p. 431. There was no objection to its application. Moore, 3 op. cit. note 3 pp. 2282, 2293, 2298, 2303. Moore, 3 ibid. p. 2279. Moore, 3 ibid. p. 2282. Moore, 3 ibid. p. 2289. Moore, 3 ibid. pp. 2298, 2303. Moore, 3 ibid. p. 2299. Moore, 3 ibid. p. 2297.

La Compétence de la Compétence

27

case outside the submission, such a decision would be a dead letter and it would be no decision.24 Some late-nineteenth-century authors envisaged arbitration as a limited means of solving international disputes. It was resorted to by agreement and then the arbitrator was a “mandatory” who would violate his strict mandate if he arrogated to himself the right to adjudicate on his own competence or to interpret the Compromis.25 As international tribunals exercised their compétence de la compétence more frequently, authors referred to the existence of a controversy about that power and in general it was agreed that its exercise was both proper and necessary.26 However, while there was general agreement on the general principle there was a diversity of explanations for its existence.27 In some respects there was a repetition of the arguments of the two arbitrators in the Betsey Case.28 However, basically there were two views. One view referred the compétence de la compétence to the will of the parties (real or constructive). Accordingly, the parties were presumed to have agreed to confer on the tribunal the power to determine its jurisdiction.29 The power could not be exercised by the tribunal if the parties agreed to reserve it to themselves or to another organ. The

24 25

26

27

28

29

Moore, 3 ibid. p. 2290. E.g., Heffter, Le Droit International de l’Europe (Bergson’s translation, 1883) p. 238 note 5; Holtzendorf, Elements de Droit International Public (translated by Zographos, 1891) p. 523; Bonfils, Munuel de Droit International Public (1st ed. 1894) p. 523. Later authors have also characterized the Compromis as a mandate: see Borel, “Les Voies de Recours Contre les Sentences Arbitrales”, 52 Hague Recueil (1935–II) at p. 72. See, e.g., Rolin-Jacquemyns, “Quelques Mots sur la Phase Nouvelle Liu Differend AngloAmericain”, 4 RDILC (1872) at pp. 137, 139; Fiore, 2 Trattato do Diritto Internazionale Publico (1888) pp. 574–5; Martens, 3 Traite de Droit International (1887 translation by Leo) p. 153; Piedelievre, 2 Precis de Droit International Public (1895) p. 68; Merignhac, Traité Theorique et Pratique de l’Arbitrage International (1898) pp. 245–5; Calvo, 3 Droit International (1896) p. 481; Oppenheim, 2 International Law (1906) p. 25; Moore, 2 op. cit. note 3 p. 1241; Politis, La Justice Internationale (1924) p. 79. Iaccarino, “Della c.d. Competenza sulla Competenza dei Tribunali Internazaionali”, 14 Diritto Internazaionale (1960) at pp. 363–75. See the discussion of the Hungarian Optants Case on the theoretical justification of compétence de la compétence: Scelle, “La Litige Roumano-Hongrois devant le Conseil de la Société des Nations”, in La Réforme Agraire Roumanie en Transylvanie devant la Justice Internationale e le Conseil de la Société des Nations – Quelques Opinions (1928) at p. 309. See, e.g., Pradier-Fodéré, 6 Traite de Droit International Public (1894) p. 424; Lapradelle, “L’Exces de Pouvoir de L’Arbitre”, 2 Revue de Droit International (1928) at p. 32; Bosco, Rapporti e Conflitti fra Giurisdizioni Internationali (1932) p. 45.

28

Chapter Two

silence of the parties resulted in a rebuttable presumption that the tribunal had la compétence de la compétence.30 The second view, which was more common, regarded the compétence de la compétence as a power that was both inherent in every judicial organ, and independent of the will of the parties.31 Without this power the tribunal would not be able to act at all,32 because the power was the basis for the functioning of the tribunal. It could not be reserved by one party or by the agreement of both. Because the judge had the power to interpret the Compromis in order to reach a decision on the merits, he should also have the power to interpret the Compromis in order to come to a decision on jurisdiction. The principle was a general principle valid for national tribunals as well as for international tribunals.33 The power was a characteristic of a court of justice. Moreover, if it were denied to international tribunals, there could be no one else, for practical purposes, to decide the issue. There was no higher court nor were the parties in agreement. In order, therefore, that the dispute on jurisdiction and consequently the one on the merits be settled, the tribunal must itself exercise this power which was inherent. Arbitration was not to be governed by diplomatic action. As the substantive jurisdiction of the tribunal was limited by the parties’ own agreement, there was no danger in letting the tribunal exercise this power. Should there be such a danger it would certainly be materially less serious and practically less probable than the dangers involved in permitting the defendant to decide the issue.34 The two views had different consequences. One excluded the right of the parties to limit the tribunal’s jurisdiction to decide on its own jurisdiction, while the other, basing itself purely on consent, permitted agreed reservations which would take away that jurisdiction from the tribunal and vest it

30

31

32

33

34

Berlia, “La Jurisprudence des Tribunaux Internationaux en ce qui concerne leur Competence”, 88 Hague Recueil (1955) at p. 115. See Cavaré, 2 Le Droit international Public Positif (1962) at p. 228; Iaccarino, loc. cit. note 27 at pp. 375, 399, 402; Carlston, The Process of International Arbitration (1946) pp. 74–5, 76; Balasko, Causes de Nullité de la Sentence Arbitrale (1938) pp. 182–3, 185, 186; Rousseau, “Le Conflit Italo-Ethiopien”, 44 RGDIP at 22–5 (1937); Ralston, op. cit. note 6 pp. 47–8; Calvo, op. cit. note 26 p. 381. Ralston. op. cit. note 6 pp. 47–8; Iaccarino, loc. cit. note 27 at p. 403; Carlston, op. cit. note 31 pp. 74–5. Salvioli, “Sui Potere dell’ Arbitro a Pronunciarsi sulla Competenza”, 13 Diritto Internazionale (1959) at pp. 121–2. Bos, Les Conditions du Procès en Droit International Public (l957) p. 271; Hudson, International Tribunals (1944) p. 111; Balasko, op. cit. note 31 p. 183; Wittenberg, L’organisation Judiciaire, la Procédure et la Sentence Internationales (1937) pp. 368, 409; Politis, op. cit. note 26 p. 79. See also the Ambatielos Case (Preliminary Objections), 1952 ICJ Reports at p. 55, Judge Spiropoulos in a separate opinion. Cavaré, 2 op. cit. note 31 p. 228; Balasko, op. cit. note 31 p. 186.

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in one of the parties. However, in the practice of arbitration treaty making it became common to include a clause permitting a party and not the tribunal to decide whether ratione materiae the dispute or part of it should be submitted to the arbitral tribunal (the clause contraire). It then came to be acknowledged that the clause contraire had the effect of taking away the compétence de la compétence of the tribunal to the extent of the reservation but once the party concerned had exercised the right of reservation under the clause the tribunal would have the power and duty to exercise its compétence de la compétence.35 Conceivably, though the reservation of the right by a party to determine whether the dispute was subject to the tribunal’s jurisdiction could have the effect of completely depriving the tribunal of jurisdiction to determine its jurisdiction in cases in which the party exercised the right to decide that the whole dispute was in its opinion within the reserved clause and, therefore, solely by its volition outside the tribunal’s jurisdiction. While it is possible that, if a party with good legal effect withdrew under the clause contraire only a part of the dispute from the tribunal’s jurisdiction and yet contested the tribunal’s jurisdiction in relation to another part, the tribunal would have had la compétence de la compétence and the right to determine whether it had that compétence de la compétence in respect of the part of the dispute which had not been unilaterally withdrawn but in regard to which objections to the jurisdiction had been raised, it was also possible that both the question of la compétence de la compétence and the right to decide whether the tribunal had this competence be completely taken away from the tribunal by an exercise of will by one of the parties. Sometimes this dichotomy was not recognized by authors. The result was that they denied totally the implied or inherent power of the tribunal to decide on its jurisdiction, where there was no provision to the contrary in the arbitration treaty.36 It was only where the treaty included a clause contraire

35

36

Guggenheim, 2 Traité de Droit International Public (1954) pp. 107, 147; Wilson, “Reservation Clauses in Agreements for Obligatory arbitration”, 23 AJIL (1929) at p. 83. Examples are cited in United Nations, Systematic Survey of Treaties for the Pacific Settlement of International Disputes, 1928–1948, pp. 27, 32, 39. Reservations were often made of questions relating to “national honour, vital interests and the interests of third states”: Scott, The International Conferences of American States 1889–1928 (1931) pp. 40, 41. See also Cory, Compulsory Arbitration of International Disputes (1932) passim for discussion of this matter. Delbez, Les Principes Génerauxy du Contentieux International (1962) p. 70. See for a discussion of this, Simpson and Fox, International Arbitration (1959) pp. 15–16; Brierly, “Vital Interests and the Law”, 21 BYIL (1944). at p. 51; Kelsen, “Compulsory Adjudication of International Disputes”, 37 AJIL (1943) at p. 403; Barclay, The Method of Adjusting International Disputes in the Future (1971) p. 67. The non-existent power would include the right to decide whether the tribunal had the compétence de la compétence.

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that the tribunal would have any jurisdiction to decide on its competence and that outside the limits of the exercise of a party’s will under the reservation. The 1899 and 1907 Hague Conferences attempted in part to address the problems that were being faced. The 1907 Hague Convention on the Pacific Settlement of International Disputes provided in Article 73 that tribunals had la compétence de la compétence. This provision applied to arbitrations under the auspices of the PCA. The ILC took up the issue when it examined the subject of arbitral procedure from 1949 to 1958. After formulating more than one draft consequent upon discussions within the ILC and in the GA and the comments of governments, the ILC submitted to the GA a draft with a commentary, in Article 3 of which it was provided: 1. If, before the constitution of an arbitral tribunal, the parties to an undertaking to arbitrate disagree as to the existence of a dispute, or as to whether the existing dispute is wholly or partly within the scope of the obligation to arbitrate, such preliminary question shall, failing agreement between the parties upon the adoption of another procedure, be brought by them within three months either before the Permanent Court of Arbitration for summary judgement, or, preferably, before the International Court of Justice, likewise for summary judgment or for an advisory opinion . . . 3. If the arbitral tribunal has already been constituted, any dispute concerning arbitrability shall be referred to it.37

It is clear that even in 1958 there was much disagreement among states on the nature of arbitration – whether it was a diplomatic means of settlement or a judicial method. As a result the GA adopted a resolution on 14 November 1958 (Rs 1262 (XIII)) in which, inter alia, it merely brought the ILC draft articles to the attention of member states for consideration and use.38 However, since then there have been developments in practice and jurisprudence which show that the position has changed and that there is a certain tendency to adopt a practical approach which recognizes both the autonomy of the parties to a degree and the judicial nature of the international arbitral process so that la compétence de la compétence of arbitral tribunals including their power to decide whether they have that competence is in principle acknowledged.

Current Status Currently and perhaps after the Second World War there has been no serious issue raised about the compétence de la compétence of international tribunals.

37

38

2 YBILC (1958) at p. 5. The draft was in a report submitted by Scelle, the rapporteur for the ILC. Rs. 1262 (XII) of November 14, 1958 UNYB at p. 385.

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It has been discussed occasionally in the cases but in general the principle has been applied consistently. It has been regarded as an inherent power, not dependent on the agreement of the parties. Some institutional arbitration arrangements provide in their constitutive instruments that tribunals shall be judges of their own competence. The ICSID Convention provides as much in Article 41(1). As already seen, the 1907 Hague Convention had the equivalent provision for arbitrations through the PCA.39 The incidence of challenges to the principle of la compétence de la compétence before arbitral tribunals has been infrequent, whether the principle is expressly enshrined in the constitutive instrument or Compromis or not, although challenges to jurisdiction itself in a broad sense may be less infrequent.40 This signifies that by and large the principle is accepted. In the Bluefin Tuna Case, which was an ad hoc arbitration under Annex VII of UNCLOS, objections were raised by the respondent party to the jurisdiction of the tribunal, which were ultimately upheld, but there was never any issue as to whether the tribunal could pronounce on its own jurisdiction.41 Before the Iran-US Claims Tribunal the issue of the compétence de la compétence of the tribunal has never arisen although sometimes jurisdiction has been hotly contested. It has also not been agitated before ICSID tribunals. While the matter has been discussed by permanent courts, such as the ICJ, it has not been a significant issue in their work. In several ICSID arbitrations the principle which is enshrined in Article 41 of the ICSID Convention has been affirmed, while it has also been recognized by the tribunals that there had been no objection to the application of the principle. In Klöckner v. Cameroon the tribunal constituted to consider annulment of the original award stated: “It is neither contestable nor contested that the arbitrators have the power to determine their own jurisdiction (la compétence de la compétence) . . .”42 In the arbitration by the ICC of the case SPP (Middle East) Ltd. and Southern Pacific Properties Ltd. v. Arab Republic of Egypt and Egyptian General Company for Tourism and Hotels,

39

40

41 42

Chapter Xl of NAFTA by incorporating ICSID Arbitration impliedly accedes to the provision in the ICSID Convention. The Algiers Declaration (Claims Settlement) of 1981, which established the Iran-US Claims Tribunal, says nothing about la compétence de la compétence of the tribunal. On la compétence de la compétence under the ICSID Convention see C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) pp. 441–2. As Berlia points out, there is a “simple contestation de compétence” and a “double contestation de compétence”; loc. cit. note 30 at pp. 110–11. On the power to contest the jurisdiction of a tribunal to decide on its own jurisdiction see also Salvioli, loc. cit. note 32 p. 119. (2000, Australia and New Zealand v. Japan), 39 ILM p. 1359. (1985, Annulment), 2 ICSID reports at p. 103. See also for mention of the principle in other ICSID arbitrations – Amco v. Indonesia (1983, Jurisdiction), 1 ICSID reports at p. 391; SPP(ME) Ltd. and SPP Ltd. v. Egypt (1988, Jurisdiction ), 3 ICSID reports at pp. 152–5.

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which was not, however, an international arbitration proper, the tribunal pointed out that Egypt did not dispute the competence of the tribunal to rule upon and decide in a binding manner whether it had competence in the case.43 Arbitral tribunals have exercised the compétence de la compétence, where this competence has not been questioned.44 This has been done whenever an objection to primary jurisdiction has been raised. It may be concluded that the principle became fully accepted in international law and jurisprudence that an arbitral tribunal has the inherent jurisdiction to determine its own jurisdiction (la compétence de la compétence), whether the authority is expressly granted in its constitutive instrument or not. This is an incidental jurisdiction to determine primary jurisdiction.45 It may be mentioned also that in relation to the powers of arbitral tribunals the ICJ in the Arbitral Award of 31 July 1989 Case46 referred to “the rule accepted by general international law in the matter of international arbitration”, that, “in the absence of any agreement to the contrary, an international tribunal has the right to decide as to its own jurisdiction . . .”, citing its pronouncement in the Nottebohm Case (Preliminary Objection).47 It is significant that, while the Court referred to the presence of a provision in the arbitration agreement giving the tribunal the power to determine its own

43

44

45

46

47

(1983), 3 ibid. at p. 57. The French Court of Appeal in the same case on appeal affirmed the principle for arbitrations: Arab Republic of Egypt Case (1984), 3 ibid. at p. 85. Another domestic court in New Zealand in relation to a case in which ICSID arbitration was invoked asserted the principle: A-G v. Mobil Oil NZ Ltd. (1987), 4 ibid. at pp. 128, 133. For the compétence de la compétence of ICSID tribunals see further C.F. Amerasinghe, op. cit. note 39 pp. 441–2. In the case of ICSID tribunals, since the ICSID Convention established the power of the tribunal to decide on their own competence, no subsequent agreements between the parties to an arbitration or between individual states parties to the ICSID Convention can take the power away or modify it. For a discussion of the importance of la compétence de la compétence in an international criminal tribunal see the Tadić Case (1995), ICTY: Judicial Reports 1994–1995 pp. 353, 371 ff. See, e.g., some of the cases excerpted in Coussirat-Coustère and Eisemann, 1 Repertory of International Arbitral Jurisprudence (1989) pp. 390–5, 395–6, 398–9, 2 ibid. pp. 647–56, 656–7, 668–71, 3 ibid. pp. 1399–1450, 1453–78, 1485–1525. This manner of stating the matter was approved in Tadić, see footnote 43 above. What was said in that case is applicable also to arbitral tribunals. 1991 ICJ Reports at pp. 68–9. In the case the arbitration agreement gave the tribunal the power to determine is own jurisdiction. 1953 ICJ Reports at p. 119. The ICJ has stated clearly that it has la compétence de la compétence, basing itself on a general principle of law: see C.F. Amerasinghe, Jurisdiction of International Tribunals (2003) pp. 135–40, even though on this case there is express provision for such jurisdiction in its statute.

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jurisdiction, it also said that that provision “confirmed” the existence of the power, implying that even in the absence of an express provision the power would certainly have existed. In the Interpretation of the Greco-Turkish Agreement Opinion, the PCIJ, in dealing with the question raised of the powers of the Mixed Commission (not its own powers), had stated that “as a general rule, any body possessing jurisdictional powers has the right in the first place to determine the extent of its jurisdiction” and that, therefore, the Mixed Commission must settle any questions affecting its own jurisdiction.48

Possible Limitations The general principle of la compétence de la compétence has been formulated in regard to international arbitration in different ways. The evidence on qualifications of the principle is as follows: (i) In arbitrations, generally ad hoc, tribunals have stated the principle to be applicable to international arbitral tribunals, unless derogated from by agreement of the relevant parties, i.e. unless there is a clause contraire. Thus, in the Société “Radio-Orient” Case the tribunal stated that “en dehors des case où les parties en sont convenues autrement, tout tribunal d’arbitrage international est juge de sa propre compétence”.49 In the Rio Grande Irrigation and Land Co. Case the tribunal said: there is inherent in this and every legal tribunal a power, and indeed a duty, to entertain, and, in proper cases, to raise for themselves, preliminary points going to their jurisdiction to entertain the claim. Such a power is inseparable from and indispensable to the proper conduct of business. This principle has been laid down and approved as applicable to international arbitral tribunals . . . in our opinion, this power can only be taken away by a provision framed for that express purpose.50

Interstate arbitrations such as these have specifically referred to the qualification arising from express derogation from the principle of la compétence de la compétence. (ii) There are many arbitral decisions in which the principle of la compétence de la compétence has been stated without the qualification of express derogation. In the Walfish Bay Boundary Arbitration, for example, the tribunal merely stated that “it is a constant doctrine of public international

48 49 50

(1928), PCIJ Series B No. 16 at p. 20. (1940, Egypt v. Syria and Lebanon), 3 UNRIAA at p. 1878. (1923, UK v. USA), 6 UNRIAA at pp. 135–6.

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law that the arbitrator has powers to settle questions as to his own competence . . .”51 and no more. In the Young Plan Case the arbitral tribunal stated without reference to express derogation that “it still remains the responsibility of the Tribunal to determine, . . . its competence to act.”52 (iii) In regard to arbitrations specifically the ICJ in stating the principle of la compétence de la compétence has referred to “the absence of an agreement to the contrary” between the parties,53 while in stating the general principles in relation to international arbitral tribunals, the PCIJ referred to the principle without reference to the qualification based on the clause contraire in the constitutive instrument.54 Individual judges in both the PCIJ and the ICJ have referred to the general principle applicable to all international tribunals without reference to a qualification based on the clause contraire.55 (iv) In the Tadić Case the ICTY stated that It is true that this power (to determine the tribunal’s own jurisdiction) can be limited by an express provision in the arbitration agreement or in the constitutive instruments of the standing tribunals, though the later possibility is controversial, particularly where the limitation risks undermining the judicial character or the independence of the tribunal. But it is absolutely clear hat such a limitation, to the extent to which it is admissible, cannot be inferred without an express provision allowing the waiver or the shrinking of such a well-entrenched principle of general international law.56

The qualification was mentioned but in a rather guarded way.

51 52

53

54

55

56

(1911, Germany v. UK). 11 UNRIAA at p. 307. (1980), Belgium, France, Switzerland, UK and USA v. FRG), 59 ILR at p. 524. Other cases in which no qualification was mentioned include the Salem Case (1932, Egypt v. USA), 2 UNRIAA at p. 1181; the “La Constancia” Case (1866), Moore, 3 op. cit. note 3 at p. 2743. There are some transnational arbitrations in which no qualification was mentioned: e.g., the Chemins de fer Zeltweg-Wolfsberg et Unterdrauberg-Hoellen Case (1934), 3 UNRIAA at p. 1803. See the Nottebohm Case (Preliminary Objection), 1953 ICJ Reports at p. 119, the Arbitral Award of 31 July 1989 Case, 1991 ICJ Reports at pp. 68–9. Interpretation of the Greco-Turkish Agreement Opinion (1928), PCIJ Series B No. 16 at p. 20. While prior to the establishment of the PCIJ (1921) the clause contraire may have been included in arbitration treaties from time to time, it became much less common to include such a clause in arbitration treaties after that date. The Systematic Survey of Treaties for the Pacific Settlement of International Disputes, 1928–1948, published by the UN contains over 200 treaties. Only about six incorporate the clause contraire. See, e.g., Judge Moore in the Mavrommatis Palestine Concessions Case (1924), PCIJ Series A No. 2 at pp. 57–8; Judge Urrutia in the Electricity Company of Sofia and Bulgaria Case (1939), PCIJ Series A/B No. 77 at pp. 102–3; Judge Cordova in the Judgments of the Administrative Tribunal of the ILO Opinion, 1956 ICJ Reports at p. 163; Judge Lauterpacht in the Norwegian Loans Case, 1957 ICJ Reports at p. 44; Judge Guerrero, ibid. at pp. 68–9. (1995), ICTY: Judicial Reports 1994–1995 at p. 374. Emphasis added.

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(v) Most text-writers appear to mention the principle of la compétence de la compétence in regard to international arbitral tribunals without reference to the possibility of a qualification, based on a clause contraire.57 (vi) Institutionalized international arbitral tribunals, such as ICSID tribunals and tribunals operating under the aegis of the PCA, have never referred to any qualification of their power to determine their own jurisdiction. In both cases the governing instruments state quite clearly that tribunals shall have the power to determine their own jurisdiction, as has been seen. (vii) There is no evidence that tribunals have had to decide on qualifications of their jurisdiction to determine their own jurisdiction or, indeed, that parties to arbitration agreements and Compromis since the establishment of the PCIJ have made reservations to the jurisdiction of a tribunal accompanied by a provision that the decision on whether a dispute falls within the reserved area shall be made not by the tribunal but by the party concerned. This is the kind of qualification that is in issue – the clause contraire; when the parties not only reserve certain matters so that they are outside the jurisdiction of the tribunal but further provide that the determination of whether the dispute in hand falls within the reserved area shall be made by the party concerned and not by the tribunal. There have been cases, as early as the Betsey Case,58 in which areas have been reserved and it has been recognized by the tribunal that the dispute or disputes fell within the reserved areas, but this is not the same situation as would arise if the parties specifically stated that the determination of whether the dispute or disputes were excluded from the tribunal’s jurisdiction was taken out of the hands of the tribunals and left with one of the parties. The evidence is not conclusively in favour of the full effectiveness of a clause contraire in international arbitrations. Not only has there not been a case in which a tribunal has in effect not exercised its compétence de la compétence as the result of the inclusion of a clause contraire in the governing instruments, but the other evidence is conflicting, even if there are some dicta, for such they are, which support the view that a clause contraire in an arbitration agreement can have the effect of excluding the power of a tribunal to determine is own jurisdiction. The question is how is the evidence to be evaluated. The following analysis may be made.

57

58

See, e.g., Ralston, op. cit. note 6 pp. 44 ff.; Rousseau, 5 op. cit. note 8 p. 324; Fitzmaurice, 2 op. cit note 8 pp. 451–4. Although the latter cites the Nottebohm Case (Preliminary Objection) where the clause contraire is referred to in his discussion, he does not advert to it as a possibility even in relation to arbitration. (1797): See Moore, 3 op. cit. note 3 pp. 2278 ff.

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(i) It cannot be said with certainty that a clause contraire in an arbitration agreement which purports to deprive a tribunal of the power of determining its own jurisdiction in regard to a reserved domain, even though partial, has that particular effect. Recognizing this effect would undermine “the judicial character and independence of the tribunal” and would involve a contradiction in invoking third-party settlement of a dispute. It will be recalled that in Tadić the ICTY adverted to this matter even in regard to arbitration. Such recognition could practically negate the submission to arbitration as a mode of third-party settlement. Even though the reservation may be partial, giving effect to the subjective element in it would deprive the judicial intervention of the third party in arbitration of any effect because the submission to which consent had been given by both parties to the dispute may be reversed by the choice of one party. All such clauses, however partial, would unfortunately have this effect. Whatever the clause, it would leave legal withdrawal from the arbitration or jurisdictional grounds in the hands of one party. This is inconsistent with the choice of adjudication as a mode of settlement of a dispute. Thus, one possible conclusion is that a clause contraire is totally without effect insofar as and because it is inconsistent with submission to adjudicatory settlement by arbitration, even though such submission is based on the consent of the parties. The views expressed by Judges Guerrero,59 ArmandUgon60 and Lauterpacht,61 among others, in the ICJ on the effect of the automatic reservation under Article 36(6) of the ICJ Statute which refer to the case of the ICJ’s jurisdiction support the position taken above, if those views are transposed to the case of arbitration. What is the effect of recognizing the ineffectiveness of the clause seems to be ambiguous. It could be argued first, that the clause itself could be severed from the rest of the arbitration agreement and that the whole reservation clause will not be applied because it is invalid, while the rest of the arbitration agreement will remain valid. It is also possible, as a second alternative, that the subjective element alone in the clause be struck down as invalid, while the substance of the reservation itself, to be pronounced upon jurisdiction-wise by the tribunal alone, and the arbitration agreement stand. A third alternative is that the whole arbitration agreement is to be treated as invalid because of the presence of an element which militates against the judicial character and independence of the tribunal.

59 60 61

Norwegian Loans Case, 1957 ICJ reports at pp. 68–9. Interhandel Case, 1959 ICJ Reports at p. 92. Norwegian Loans Case, 1957 ICJ reports at p. 44, Interhandel Case, 1959 ICJ Reports at p. 104.

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In regard to such a reservation (automatic) in respect of acceptances of the jurisdiction of the ICJ, on the understanding that it is defective and cannot stand, while the Court has not addressed the matter, Judge Lauterpacht on the first occasion62 opted for the third alternative, while on another63 he consistently did the same. Judge Guerrero apparently may have opted for the first alternative,64 insofar as he did not mention the declaration as such at all but referred only to the invalidity of the reservation. Judge Armand-Ugon opted for the first alternative65 and Judge Spender in effect opted for the third alternative.66 Thus, judicial opinion is divided, if the analogy of submissions to the ICJ’s jurisdiction is used in the case of arbitration agreements. There is some attraction in the third alternative, because the clause contraire may be considered an integral condition for the acceptance of arbitral adjudication. On the other hand, a subjective reservation as a whole may be severed and regarded as out of court because parties are deemed to have known that such a reservation as a whole derogates from the judicial function and must fall in itself. The theory of implied knowledge may equally lead to the acceptance of the second alternative. The ultimate choice of alternative does not reveal itself clearly. In order to give the arbitration agreement some effect, which was undoubtedly intended, the choice may lie between the first and second alternatives. At the same time, if the third alternative (Judge Spender) is the correct one, tribunals would be under an obligation proprio motu to declare that the arbitration agreement is invalid and that there was no valid submission to arbitration, regardless or whether the parties raise the issue or not. For the most effective results, i.e., to give the arbitration agreement a chance of surviving, while recognizing the wishes of the parties to some extent, the second alternative would serve the best. (ii) Exactly the opposite alternative is to permit the clause contraire to have full effect but in practice this does not ever seem to have happened in the jurisprudence of international arbitration, though there appear to be dicta supporting the position. (iii) There is a third possibility, which, however, has not been adopted in practice whether in decisions of arbitral tribunals or in obiter dicta, the reason being that the issue has neither been argued nor decided upon in litigation. This is that an appropriate clause contraire is to be recognized as valid to the extent that it involves the exercise of a discretion which the

62 63 64 65 66

Norwegian Loans Case, 1957 ICJ reports at p. 44. Interhandel Case, 1959 ICJ Reports at pp. 101–2. Norwegian Loans Case, 1957 ICJ reports at pp. 68–70. Interhandel Case, 1959 ICJ Reports at p. 93. Ibid. at p. 57.

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tribunal has the power to review and, therefore, control in the exercise of its jurisdiction to determine its own jurisdiction. There are two matters of importance in this regard. First, the clause contraire cannot be so wide and general that it becomes impossible for a tribunal effectively to review the discretion incorporated in the clause. Secondly, a limited subjective reservation in a clause contraire would be controlled by reference to the principle of abuse of discretion which is known, inter alia, in international administrative law. The tribunal would not be substituting its own judgment for that of the party concerned but would verify that the discretion had been exercised in good faith inter alia, and without abuse. If this degree of control over jurisdiction, where there is a clause contraire, were allowed to prevail, it is possible to reconcile giving some effect to the clause contraire with the requirement of not “undermining the judicial character of independence of the tribunal”. While recognizing the autonomy of the parties to an appreciable extent, the power of the tribunal to determine its own jurisdiction is also to some extent, though not totally, respected. The consequence of having a clause contraire which is too general and wide would still be that it is to be regarded as invalid, because it becomes impossible for the tribunal to exercise any control at all over determining its own jurisdiction, while a limited clause contraire would be valid, because it permits control by the tribunal over an exercise of discretion, thus safeguarding in large measure the judicial character and independence of the tribunal. (iv) Certainly in the cases of arbitration which is institutionalized the situation will be different. Institutionalized arbitration systems, such as PCA and ICSID, have in common that the principal governing instruments provide that arbitral tribunals shall have the power to decide on their own jurisdiction. In the face of such an express provision, arbitration agreements submitting to arbitration within these institutionalized systems are not permitted to have clauses contraires. If they do, it is likely that only the subjective element in the reservation would be struck down, while the substantive part would be allowed to stand subject to the power of the tribunal to decide whether the dispute falls within the reservation so as to exclude its jurisdiction rather than the whole arbitration agreement or clause be declared invalid or the whole reservation be struck down. The reason for this is that in the face of the express statement of the principle that the tribunal has jurisdiction to determine its own jurisdiction, it is only the attempt to take away this power from the tribunal that needs to be thwarted. Though reservations may be permitted by agreement, the parties are deemed to be aware of the prohibition against depriving the tribunal of its compétence de la compétence. As a result, the inclusion of what is prohibited is to be treated as a faux pas, so to speak, and is to be disregarded. There is no reason also in this case to treat the clause contraire as valid to the extent that it contemplates the exercise of

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a discretion which the tribunal has the power of controlling and reviewing, because of the express prohibition in the governing instruments of any dilution or the tribunal’s compétence de la compétence. In the case of institutionalized arbitration systems, such as under Annex VII of UNCLOS, where the governing instrument is silent on the matter of la compétence de la compétence, the general principle that tribunals have jurisdiction to determine their own jurisdiction would be implied as an inherent attribute of arbitra1 tribunals. The question of the effect of a clause contraire is somewhat more difficult than in the case of ad hoc tribunals. Difficulties arise because the tribunals are established under a multilateral agreement and not under an agreement solely made between the parties. In these circumstances it is questionable whether a reservation of the kind envisaged, even though made with agreement among the particular parties to an arbitration, which takes the form of a clause contraire can be recognized as having any effect at all. The clause contraire in an arbitration agreement which is covered by the system established by the UNCLOS is not a reservation made at the time of signature or ratification of the UNCLOS nor made afterwards in pursuance of the provisions of the Convention and is, therefore, not covered by Section 2 of the 1969 Vienna Convention on treaties. It is an agreement between the parties made in circumstances where that agreement as a part of the arbitration agreement is covered by the UNCLOS arbitration system, which was established by multilateral agreement. Thus, the agreement incorporating the clause contraire cannot contain anything which is contrary to the express provisions or fundamental premises of the arbitration system except as the UNCLOS as the source of the arbitrations provides. The UNCLOS does not expressly permit derogations from the fundamental premise, inherent and not expressly stated though it is, that tribunals have the competence to determine their own jurisdiction. The fact that the parties to an arbitration specifically agree to them becomes irrelevant then. The conclusion is ineluctable, therefore, that the clause contraire cannot take away the power of the tribunal to determine its own jurisdiction. This conclusion raises another problem, namely, to what extent the clause contraire is invalid. The better view is that, while agreed limitations on jurisdiction may be permitted, only the power to determine whether the limitations are applicable in a given case or not may not be taken away from the tribunal and placed in the hands of the parties. Thus, it is only the part of the limitation on jurisdiction which takes that power away from the tribunal that will be struck down, the limitation itself being permitted to survive subject to judicial determination by the tribunal. In the case of institutionalized arbitration the multilateral nature of the establishment of the system may be taken to result in attributing by implication to parties the knowledge that derogation from the inherent principle of la compétence de la compétence

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is not permitted. Consequently, it is only the attempt to derogate from this principle that is to be thwarted and not the attempt to impose a limitation on jurisdiction. (v) It is clear from the above that the consent of the parties to the arbitration in connection with the power of a tribunal to determine its own competence, though it may sometimes have some relevance, is of limited relevance. An agreement between the parties to take this power away from the tribunal cannot take away this power entirely from the tribunal, to say the least. Clearly, on the other hand, the tribunal has an inherent power to determine its own jurisdiction and such power does not have to be conferred on it, expressly or implicitly, by the parties raising proprio motu the issue of la compétence de la compétence.

Raising Proprio Motu the Issue of la Compétence de la Compétence The issue here is whether the question whether the tribunal has the power to decide on its own jurisdiction (la compétence de la compétence) may be raised proprio motu by the tribunal, if it is not raised by the parties. This issue must be distinguished from the issue whether the tribunal may raise proprio motu the question whether it does have jurisdiction, if the parties do not address the issue in a particular case. It is a subtle but important distinction.67 The question whether a tribunal has la compétence de la compétence is not a question that generally must be decided if the tribunal is to proceed with the case. Indeed, in many cases tribunals have simply decided on their jurisdiction. The question whether the issue of la compétence de la compétence may be raised proprio motu by the tribunal has, therefore, not generally been argued before tribunals. What has happened is that, when the issue of its competence to deal with its competence has been raised before the tribunal, it has addressed it but, where it has not, it proceeded more recently on the assumption that it had such competence to deal with its own competence. The fact that tribunals have proceeded to address issues relating to their competence without always raising proprio motu the issue whether they

67

Some authors confuse these issues in dealing with a court’s power to decide whether it has la compétence de la compétence: see, e.g., Shihata, The Power of the International Court to Determine its Own Jurisdiction (1965) pp. 56–68, where in a chapter dealing mainly with the establishment of la compétence de la compétence the author discusses the question whether the question of compétence, i.e., once the competence to decide on competence has been established and the competence to decide on competence is being exercised, may be raised proprio motu. The issue discussed here has not been discussed before.

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had the competence to decide on their own competence does not necessarily mean that they may not do so. Where, if this were possible, there is a reasonably apparent issue arising from the circumstances of the case or instruments of submission to jurisdiction whether such competence to decide on competence did or did not exist, a tribunal could still act proprio motu. The reason why tribunals have so far not acted proprio motu is that their experience has most likely been that such an issue has not been reasonably apparent, whenever the issue has not been raised by one of the parties. As will be seen in a later chapter, questions of competence itself may, and must, generally be raised proprio motu by tribunals. Where exceptionally this may not be done, the exceptional circumstances must be established before the tribunal. If questions of competence may be raised proprio motu generally there is no reason why the question of la compétence de la compétence may not be raised proprio motu where this is called for in an appropriate case, in order to dispel any doubts and state the legal position clearly. There may, indeed, be circumstances in which this is called for, although these may be extreme, particularly where the instruments of submission have indications that the tribunal was to be (either partially or fully) deprived of the power to decide on its jurisdiction. The tribunal must then raise the issue proprio motu and decide how far the attempt to deprive it of that power has effect.

Finality of the Determination on la Compétence de la Compétence In this regard also a distinction must be made between the finality of determination by a tribunal that it has or has not the jurisdiction to decide on its own jurisdiction and the finality of its determination on its own jurisdiction. Determinations of la compétence de la compétence would generally be final to the extent that any determination of the tribunal particularly relating to its competence or jurisdiction are final. Thus, if such a decision may not be reviewed by another tribunal and there must be explicit provision for this, or by the tribunal itself, under the provision of the constitutive instrument or under general principles of law, the decision will be final. The ICSID Convention provides in Article 51 for revision of an arbitral award in limited circumstances and in Article 52 for annulment of an award where the tribunal has manifestly exceeded its powers. Review is to be by the same tribunal or by another tribunal if the same tribunal cannot be reconstituted, while annulment is to be by another tribunal (committee). In both cases there is a theoretical possibility of the decision on la compétence de la compétence taken by a tribunal being reopened. However, because the ICSID Convention in no uncertain terms confers on tribunals the power to decide

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on their competence (Article 41(l)), the possibility that a determination by the tribunal that it had competence to decide on its own competence by a simple application of Article 41(1) could successfully be questioned is moot. In the case of an ICSID tribunal a holding by the tribunal that it had the jurisdiction to decide on its competence could clearly be questioned under the provisions of the constitutive instrument by recourse to the methods there established. In this connection it is unlikely that provisions for review contained in the ICSID Convention could be used for this purpose because the conditions for review are very limited and do not pertain to wrongful exercise or power by the tribunal without the discovery of a new fact:. The finality of judgments of international tribunals may be subject to general principles of law relating to review and annulment of tribunal judgments, where the constitutive instruments of the tribunals do not, because of their express provisions rule out such review or annulment. These principles are discussed in a later chapter on review and annulment. To the extent that a general principle on review or annulment would be applicable in the circumstances of the case to a particular tribunal’s decision, the express provisions of its constitutive instrument do not exclude such review or annulment of a decision on la compétence de la compétence and it is possible to invoke or find a forum for such review or annulment, such decision would not necessarily be final. For example, where a constitutive instrument clearly states that a tribunal has power to decide its own competence and the tribunal refuses to exercise that power, if there is a relevant applicable general principle for review or annulment of the tribunal’s decisions, such a decision could be a subject for review or annulment. Equally, where the constitutive instrument is silent on the tribunal’s power to decide on its competence and the tribunal decides that it has or has not competence to decide on its own competence, general principles may apply. The finality of decision on jurisdiction of other kinds, e.g., decisions on competence and recevabilité are considered separately in later chapters. There may be different considerations involved.

Jurisdiction of Other Tribunals to Decide on the Compétence of a Tribunal It is possible that as a result of agreement between the parties to a dispute a tribunal other than the tribunal selected to decide the merits of a dispute may have jurisdiction in regard to the competence of the latter or certain aspects of it. It will be recalled that the 1958 draft or the ILC on Arbitral Procedure provides in Article 3(1) that the ICJ could decide on whether a dispute should be submitted to arbitration, if a dispute arose in regard to that

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obligation before the tribunal was constituted. The course of action suggested by the ILC draft was by an interpretation of the relevant instruments found to have been prescribed in the Ambatielos Case (Preliminary Objection).68 In that case the Court held that expressly or by necessary implication the provisions of the relevant agreements and other instruments gave it jurisdiction to decide whether the substantive dispute between Greece and the UK should be submitted to arbitration. It said, further, that the Court would decide whether there was a dispute which had to be submitted to arbitration while “the Commission of Arbitration would decide on the merits of the difference”.69 In the Ambatielos Case (Merits)70 the Court found that there was an obligation to arbitrate the dispute. In this case it was on a particular aspect of the jurisdiction of the arbitral tribunal that the ICJ was required to pronounce. There were other aspects of competence and admissibility on which the arbitral tribunal itself would continue to have jurisdiction. Eventually in the Ambatielos Arbitration,71 after the dispute was submitted to an arbitral tribunal, that tribunal examined a question of admissibility raised by the respondent and found that the claim was not admissible because local remedies had not been exhausted by the national in respect of whom the claim was made by the claimant state. The precedent of the Ambatielos Case in all its phases shows, firstly, that it is possible for aspects of la compétence de la compétence to be submitted to another tribunal than the tribunal constituted to decide the principal dispute and, secondly, that the determination on that aspect of competence by the other tribunal is binding on the parties to the dispute and the principal tribunal. Clearly this transfer of jurisdiction requires the agreement of the parties to the dispute and is not lightly to be presumed. The ICJ took great care to establish its jurisdiction to decide on the particular aspect of jurisdiction by examining all the relevant documents, instruments and the surrounding circumstances. Further, the ruling of the ICJ could not be upset by a contrary ruling on the same matter by the principal tribunal, though on other matters of competence, as has been seen, it had complete power to decide its own jurisdiction. In the Ambatielos Case only a particular aspect of jurisdiction was submitted to a different tribunal. However, there is no reason why by agreement the whole issue of la compétence de la compétence of an arbitral tribunal or a large measure of it cannot be submitted to a different tribunal, such as

68 69 70 71

1952 ICJ Reports p. 28. Ibid. at p. 44. 1953 ICJ Reports p. 10. (1956, Greece v. UK), 12 UNRIAA p. 119.

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the ICJ, for settlement, thus effectively depriving the arbitral tribunal of its compétence de la compétence. It must be emphasized that this may only be done by unequivocal agreement between the parties to the arbitration, the presumption being that the arbitral tribunal inherently has la compétence de la compétence until limitations are proven. Further, other than the Ambatielos Case there are no cases which have come up for decision in which the compétence de la compétence of a tribunal or part of it has been transferred to another tribunal. Clearly, where there are difficulties in proceeding with the arbitration because there are differences as to competence such as the basic arbitrability of the dispute, the mechanism of reference to an established court would facilitate the settlement of not only the preliminary dispute but the dispute as a whole. A reference of this kind could include the power of deciding whether the tribunal has competence to decide its own competence.

The Issue of Conflict of Interest The idea that a tribunal has the authority both to determine whether it has jurisdiction to determine its own jurisdiction (of whatever kind) and to determine whether it has jurisdiction (of whatever kind) in a given case has within it a possibility that a conflict of interest may in principle exist, because in both instances the tribunal, whether of one judge or more, may have an interest in preserving its own jurisdiction and it makes the decision on the issue. It is possible to postulate an inherent conflict of interest. However, in spite of this reality, it has been the practice to recognize in the case of both national and international tribunals their legal authority to make these determinations, whether there is an appeal to a higher tribunal or not, though in general in national systems there is some control by a higher judicial authority. In the international system the authority has now in principle come never to be questioned to the extent that it may exist according to law in a given case. The alternative to having the tribunal decide matters of jurisdiction is to have another independent tribunal determine it for the tribunal. But his would, inter alia, involve delays and be a very cumbersome procedure, whenever an objection to jurisdiction is raised. The fact, however, is that the possibility of a conflict of interest as such has never been faced.72

72

In the Betsey Case the two commissioners whose conclusion was subsequently accepted did refer to the possibility of another tribunal determining the issue of la compétence de la compétence. Moore, op cit. note 3 p. 2282. However, this alternative was not mentioned in

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That having been said, the question may be asked whether, granting that the mere vesting in a tribunal of authority in relation to jurisdiction does not call for rejection as illegal because of a conflict of interest the exercise of the authority to determine matters connected with its jurisdiction, the exercise of that authority could exceptionally be unlawful and invalid because of a conflict of interest. That there is a possibility of a serious conflict of interest in certain circumstances cannot be doubted. An example of an actual case is considered here.73 In brief, a tribunal composed of three judges appointed from a panel of five by the President of the tribunal, pursuant to the provisions of the statute of the CSAT and including the President, was replaced by order of the President in mid-stream, i.e., after the written proceedings had been completed and in the course of the oral proceedings, by a tribunal of one of the three judges, ostensibly in accordance with the statute and the rules of the tribunal. The third judge dissented from the order made by the President giving reasons on the ground that it was illegal and invalid. The single-judge tribunal proceeded to decide the case on the merits. Apparently, the issue of the jurisdiction or the tribunal was not raised by the parties or proprio motu by the single judge, so that it could be addressed by the parties. The judgment on the merits referred to the order of the President reconstituting the tribunal by replacement as a single-judge tribunal. There are two issues that arise. The first is whether the jurisdictional question is res judicata, even though it was not raised. The answer is that it is not res judicata.74 The second is whether the reconstituted tribunal of one judge could decide the question of its own jurisdiction arising from the circumstances of its constitution which arguably resulted in its being unlawfully constituted. It will be noted in this connection that the single judge supported the President’s order reconstituting the tribunal and the single judge was the judge appointed as a consequence of the order. It is unnecessary to discuss the merits of the issue of constitutionality. What is relevant is that the circumstances in which the single judge was appointed were open to

73

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the context of a possible conflict of interest. The commissioners referred to two alternatives to recognizing la compétence de la compétence, one being reference to another tribunal, the other being the simple assumption that in any case the tribunal had jurisdiction. Reference back to the parties was not considered a viable alternative because this was said not to have been requested. Reference to another tribunal was regarded as not having been authorized by the treaty of submission and the alternative of assuming that the tribunal had jurisdiction in any case was said to be an unjust solution. The Mohsin Case (2001), CSAT Judgment no. 3, the tribunal was an arbitral tribunal established by an international organization. See below Chapter 5, pp. 74 ff.

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question, raised an issue of the validity of the reconstitution of the tribunal and the single judge was not only involved in the decision making the appointment and supported it but was the judge appointed. Certainly in these circumstances the single judge did not have the lawful authority to decide the question of the constitution of the tribunal on the answer to which rested the resolution of the issue of jurisdiction, because there was a clear conflict of interest. Whether the issue of jurisdiction, therefore, was raised or not, the judgment on the merits could be contested as being null and void by one or both of the parties because the tribunal’s implied decision to assume jurisdiction was tainted as a result of a conflict of interest. It is irrelevant that the one or both parties did not object to the tribunal’s exercising jurisdiction. The existence of a conflict of interest would taint the exercise of jurisdiction in any case, whether there was an explicit decision on jurisdiction following argument by the parties or not, and whether there was tacit acquiescence on the part of one or both of the parties. It is a fact that an absence of jurisdiction cannot be cured by default. The result would be that the judgment on the merits has no validity and could be annulled, basically because of a conflict of interest,75 even though in general and usually the position may be accepted that there is not a sufficiently serious conflict of this nature when a tribunal decides matters of jurisdiction.

75

There are circumstances in national jurisdiction where the exercise of jurisdiction by a court has been declared null and void because of a conflict of interest in one of the judges of the court: see the Pinochet Case (1999), 38 ILM p. 432, a decision of the House of Lords of the UK in which a different bench of judges to the House set aside a judgment of the House in an earlier case on the same matter and between the same parties (Pincohet Case (1999), 38 ILM p. 581).

Chapter Three Consent as the Basis of Jurisdiction The Requirement In national systems the jurisdiction of tribunals is determined by enacted legislative instruments or the common law of the land. Agreement or consent of the parties to a dispute which is adjudicated is not the basis of the jurisdiction of the tribunal concerned. If agreement or consent is permitted to be the basis of jurisdiction of a tribunal, such as an arbitral tribunal, related to the legal system, it is because it is expressly and exceptionally permitted to be so by the law of the land. In any case such a tribunal is ultimately controlled in one way or another by a national tribunal whose jurisdiction is not based on consent of the parties to the dispute but on the legitimate law of the land. This is so whether the law of the land is based on an international treaty such as the New York Convention or on another source. Even a truly transnational arbitration which is based on consent has effectiveness and validity within a national legal system only because it is given such recognition by the law of the land whatever the source of that law and such an arbitration would generally be controlled even minimally by the courts of the national legal system whose jurisdiction would not be based on the consent of the parties. This is not the case with international tribunals. Their jurisdiction in contentious matters certainly, whether they are ad hoc tribunals, longstanding ad hoc tribunals, such as the Iran-US Claims Tribunal or Claims Commissions, or established or standing courts, such as the ICJ or ITLOS, is based on the consent of states which are generally parties to the dispute, or have some connection through consent in some form with the establishment of the tribunal and the formulation of its jurisdiction, e.g., if one party to the dispute is not a regular international legal subject but is, for instance, an individual. This is the general principle. International arbitral tribunals have affirmed this principle consistently and constantly, in one way or another, from the very inception of modern

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arbitration under the Jay Treaty. In the Delimitation of the Continental Shelf Case between France and the UK a five-judge tribunal of the ICJ stated quite categorically that “The Court necessarily derives its competence from the consent of both the Parties to the present arbitration.”1 As a result the tribunal took the view that it was insufficient to establish the Court’s competence that one party considered an area to be continental shelf subject to delimitation because the other party, not unreasonably, at the same time maintained that any delimitation of a boundary in that area would inevitably involve a delimitation of territorial sea. What had to be clear was that the parties had agreed under the Compromis or arbitration agreement to the delimitation by determining base-points in the given area, the jurisdiction given to the tribunal not being a general one to determine any base-points for the purpose of delimitation. Consequently, upon examining Article 2(1) of the Compromis the tribunal held that it had no jurisdiction to delimit the seabed and subsoil boundary in a certain area. In the Young Plan Case a seven-judge arbitral tribunal held that it had competence only to the extent contemplated and conferred upon it by the London Debt Agreement by which the tribunal had been established. It said that not even a subsequent agreement between the parties could confer on the tribunal a jurisdiction which was not contemplated by the London Debt Agreement.2 In the Burton Marks and Harry Umann Case the Iran-US Claims Tribunal referred to the jurisdictional boundaries established by the parties (Iran and the USA) to the Claims Settlement Declaration of 19 January 1981 under which the tribunal was established as “absolute” and stated that the Declaration alone delimited that jurisdiction.3 In the Ambatielos Case (Merits) the ICJ referred to the principle “to the effect that a state may not be compelled to submit its disputes to arbitration without its consent”,4 in concluding that in the case before it the two parties had an obligation to submit their dispute to arbitration because there was agreement to do so between them in written instruments. ICSID tribunals, which function under an institutionalized system (and the ICSID Convention) have made it quite clear that consent is the basis of the jurisdiction of these tribunals.5 What is required for consent is discussed further below. Other arbitration systems such as those under UNCLOS and involving the PCA also are based on the consent of the parties.

1 2 3 4 5

(1977), 18 UNRIAA at p. 24: French text, ibid. at p. 152. (1980), 59 ILR at p. 524. (1985), 8 Iran-US CTR at pp. 296–7. 1953 ICJ Reports at p. 19. See C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009), pp. 442 ff.

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Arbitral decisions have been quite unequivocal. In connection with judicial settlement by arbitration it was said, inter alia, at the First Hague Peace Conference of 1899 in explaining the rationale for the basis of consent: A voluntary system of jurisprudence in origin as well as in jurisdiction, it agrees with the just demands of sovereignty, of which it is only an enlightened exercise. For, if there is no power superior to the States which can force a judge upon them, there is nothing to oppose their selection of an arbitrator by common agreement to settle their disputes, thus preferring a less imperfect means of securing justice to a method more problematical and more burdensome.6

In the history of international adjudicatory dispute settlement arbitration came first. The result was that the general principle of consent which underlay arbitration died hard. The principle was accepted as the basis for adjudicatory settlement by established courts and even ad hoc tribunals other than arbitral tribunals, even though early, albeit tentative, attempts were made to use domestic judicial experience as a guide to the jurisdiction of such international courts.7

Requirements for Effective Consent Consent in More than One Step The prime example of a two-step procedure in arbitration is the procedure under the ICSID Convention. In the case of arbitration under the ICSID Convention, there are two requirements for consent to be made effective. First, as expressed in Article 25(1), the state party to the arbitration and the state whose national is a party to the dispute must be parties to the ICSID Convention. They must have given their consent to the tribunal exercising jurisdiction by this act but their act does not by itself create jurisdiction in any tribunal. It is no more than inchoate jurisdiction. It is significant that the Convention does not describe this consent as creating jurisdiction, just as the ICJ statute does not describe the first step taken by the states parties to a dispute as creating jurisdiction. Article 25(1) of the ICSID Convention then requires a second step by which consent to the jurisdiction of an ICSID tribunal is given by the parties to the dispute. It is true that one of the parties in this instance is not the same as one of the parties that acted in the context

6

7

Report by Baron Descamps: J.B. Scott, Reports to the Hague Conferences of 1899 and 1907 (1917) at p. 55. See the Report of L. Bourgeois on the Draft of the Advisory Committee of Jurists for the Establishment of a Permanent Court of International Justice (1920), in Société des Nations, Cour Permanente de Justice Internationale (1920) at p. 23.

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of the first step. But this is of no consequence. The second step taken together with the first creates jurisdiction in the tribunal. Indeed, the second step may be taken in time before the first.8 This does not affect its effectiveness when the first step is taken. The point is that it is only by the combination of the two steps that jurisdiction in the ICSID tribunal can be created. It is significant, perhaps, that Article 25(1) of the ICSID Convention describes the “jurisdiction” (compétence in the French text) of the Centre as extending to any dispute in respect of which the two steps referred to above have been completed. It does not refer to “jurisdiction” being created by the first step and “competence” being created by the second. The Convention envisages the existence of jurisdiction (compétence) only after both steps are on the record books, in whichever order they may take place. In the case of the ICSID Convention the two steps do not involve the same parties at each step unlike the situation under the ICJ statute.9 Form of Consent There may be specific requirements as to form of consent in the governing instruments of tribunals or courts, or there may not. For example, in the ICSID Convention Article 25(1) states that the consent between the state party to the dispute and the national of the other state should be in writing. This is the only specific requirement relating to consent which leaves open a considerable number of options to the parties concerned in regard to the manifestation of their mutual consent.10 In the absence of specific requirements, parties clearly have considerable freedom in manifesting consent to the submission of a dispute to the tribunal concerned. In the case of international arbitrations the question of the form of consent has not exercised tribunals, because the practice is for the states parties to have an arbitration agreement or Compromis “which is written and expresses the consent of the parties to the arbitration.” There have been no arbitration cases in which the issue of form has created a problem. As the ICJ said in relation both to arbitration (and other judicial settlement), there was “no rule of international law which might preclude a joint communiqué

8

9 10

See C.F. Amerasinghe, op. cit. note 5 pp. 442–7, and C.F. Amerasinghe, “Submissions to the Jurisdiction of the International Centre for Settlement of Investment Disputes”, 5 Journal of Maritime Law and Commerce (1974) at p. 213. On the ICJ Statute see C.F. Amerasinghe, op. cit. note 5 pp. 14 ff. See C.F. Amerasinghe, ibid. pp. 442–7, and C.F. Amerasinghe, “Model Clauses for Settlement of Foreign Investment Disputes”, 28 The Arbitration Journal (1973) at p. 236.

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from constituting an international agreement to submit to arbitration ...”11 This was a comment on whether a particular form was required for a consent to arbitration, a joint communiqué being in issue in the case. Clearly, because the consent is part of all international agreements ultimately it must satisfy the legal requirements, e.g., relating to capacity, for such an agreement. Modern diplomacy has developed a variety of methods of concluding agreements and expressing consent.12 Any of these must suffice as far as the Court is concerned. While the usual method derived from arbitral practice is to have a special formal agreement dealing with jurisdiction, such as a Compromis, this is certainly not the only method used. Whatever the form used, it is always a question for the tribunal to determine whether in the circumstances of the particular case there was a valid consent to its jurisdiction and the scope of that consent. As the ICJ has said in regard to a communiqué, it is not the form that matters but whether the document constitutes an agreement, which “depends on the nature of the act or transaction to which the Communiqué gives expression.”13 Where a specific form is not indicated, the consent required may be given in any form which evidences consent on the part of the entity concerned to submit to the jurisdiction of the tribunal or accepting the relevant jurisdictional prescriptions of the tribunal. For example, in the modern context, it is conceivable that consent to arbitration of a dispute may not be in writing but be recorded on a recording machine. What is relevant is to establish that the consent is validly given and obviously is mutual and is to the same content of jurisdictional provisions. Consent by Subsequent Conduct or by Subsequent Agreement Where consent has not been given, generally by only one of the parties, to the jurisdiction of the tribunal before the proceedings are begun, the question arises whether the consent may be given after the proceedings have begun, e.g., by conduct (forum prorogatum). In regard to arbitration it has explicitly been stated that arbitral tribunals do not recognize the principle

11

12

13

1978 ICJ Reports at p. 39. See also the Qatar and Bahrain Case (Jurisdiction and Admissibility), 1994 ICJ Reports at pp. 120–1, inter alia, citing the above case. The Vienna Treaty Convention in Article 3 (taken with Article 2) makes it quite clear that international agreements may be in forms other than the written form. The Aegean Sea Continental Shelf Case, 1978 ICJ Reports at p. 39. This case also demonstrates that the limits of consent general1y emerge from the agreement, whatever form it takes, and that then interpretation becomes important. On the aspect of limitations in this case see Robol, “Jurisdiction. Limits of Consent. The Aegean Sea Continental Shelf Case”, 18 Harv. ILJ (1977) p. 349.

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of forum prorogatum as applicable to their jurisdiction.14 In the Young Case the tribunal stated that “Not even an explicit agreement by the parties could confer on the Tribunal a jurisdiction that is not contemplated by the LDA (London Debt Agreement). . . .”15 Later in the Burton Marks and Harry Umann Case the Iran-US Claims Tribunal, in dealing with the argument that the respondent in the case, Iran, had by its subsequent conduct waived the jurisdictional boundaries established by the Compromis, said that “These jurisdictional boundaries established by the Covenants of the United States of America and the Islamic Republic of Iran in adhering to the Claims Settlement Declaration, are absolute and cannot be waived or modified unilaterally by an arbitrating party or parties.”16 These tribunals clearly applied the principle that no subsequent agreement, formal or otherwise, or conduct, such as explicit waiver or failure to raise an objection, could give an arbitral tribunal a jurisdiction which had not been established in the agreement concluded before the institution of proceedings by the parties to submit the dispute to arbitration. That rule seems to be unequivocally accepted. It would apply even in the case of ICSID arbitrations which are institutionalized. In any event the intent of Article 25(1) of the ICSID Convention which requires consent in writing to submit to the jurisdiction of ICSID and other provisions would seem to preclude any consent being perfected after the proceedings before the ICSID tribunal have been instituted. In fact, arbitral tribunals have on several occasions used the principle to recognize their duty to raise jurisdictional questions proprio motu at any stage of the proceedings. Arbitral tribunals have said on more than one occasion that it is their responsibility to determine, ex officio or proprio motu, their competence to act.17 In this connection the distinction between competence (compétence) and admissibility (recevabilité) is very relevant. Where subsequent conduct cannot be recognized as giving rise to consent it is only in connection with competence that this applies. Matters of inadmissibility, as will be seen in Chapter 6, are generally subject to waiver arising from conduct after the

14

15 16

17

The Horst Purfürst Case, Arbitral Commission on Property, Rights and Interests in Germany, (1958), 1 Entscheidungen at p. 142. (1980), 59 ILR at p. 524. (1985), 8 Iran-US CTR at p. 297. The absence of agreement of the other party to the Compromis becomes relevant even though the subsequent conduct of the one party may accrue to the benefit of the other party or individuals given claimant status under the original Compromis. See cases cited in footnotes 15 and 16.

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institution of proceedings which results in consent being given to the proceedings going forward, whether the tribunal is an arbitral tribunal or standing tribunal or court. As already seen, in the three arbitration cases referred to above the view was taken that not even a subsequent agreement, whether formal or not, between parties, made after the institution of proceedings could alter the jurisdictional authority of the arbitral tribunal given to it under the jurisdictional agreement applicable to it.

Consent and Individuals Since the inception of adjudicatory dispute settlement in international relations with the Jay Treaties, individuals, whether natural or juridical persons under national laws, have appeared before international tribunals. The early Claims Commissions of the nineteenth century admitted jurisdiction over individuals. Since then individuals have appeared before international tribunals constituted in one way or another pursuant to the consent of states. The issue is what is the relationship between the jurisdiction that tribunals exercise in these circumstances and the consent of the individuals over whom they exercise such jurisdiction. There are several different categories of situation that may be identified. First, there are consents given by the individual’s national state and the other state party whereby the individual per se is admitted as a party to proceedings, generally as the plaintiff or claimant. No formal consent is given by the individual, though there is a consent given when he institutes proceedings before the tribunal. This is the case with, for example, Claims Commissions and such ad hoc tribunals as the Iran-US Claims Tribunal. The point is that the consent of the state party to the proceedings and of the other state, generally the national state of the individual who is a party, is what matters. The jurisdiction of the tribunal is based on these consents and not on the consent of the individual as such, though in effect that consent also generally exists. As individuals per se do not have international personality in general, this is a situation in which states by agreement give them the right to appear before international tribunals and, thus, they enjoy a measure of international personality, but only because the states concerned have agreed to accord them this. The jurisdiction of the international tribunal in the situation is to be attributed primarily, if not solely, to the consent of the states concerned. Secondly, there is one clear example of a situation in which not only must there be consent to jurisdiction as a first step between the states concerned but there must also be consent to jurisdiction between the individual and the state which is the other party to the dispute – the case of arbitrations under

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the ICSID Convention.18 There must, first, be consent to the ICSID arbitration system by signature and ratification of the ICSID Convention by the states concerned. Secondly, there must be consent to the jurisdiction of the arbitral tribunal given again by the state party to the dispute and the individual party to the dispute. Here the consent of the individual is a reality and a needed requirement, laid down by the original agreement between states.

The Relationship of Consent to Inherent Jurisdiction Assuming the parties have consented to the jurisdiction of an international tribunal to what do they consent? Clearly the details of what has been consented to will not be completely or explicitly stated in the consent given. It is usual to state that what they have consented to is jurisdiction to settle the dispute by the application of substantive and procedural rules of law. In any case it may be asked what these rules are, because these are not usually spelled out or referred to in the instrument of consent or agreement. In addition there are other matters relating to jurisdiction which arise and raise issues as to their relation to consent. Tribunals have sometimes referred to their “inherent” and “incidental” jurisdiction in certain respects to the exercise of which explicit consent does not need to be given. Whether this jurisdiction is described as inherent or based on implied consent does not really matter because whichever way it is looked at what is relevant is that (a) it does not require express consent for its exercise and (b) there are circumstances in which by agreement of the parties the jurisdiction may be limited or modified. The real issue is the extent to which the jurisdiction may be so limited or modified. That it exists cannot be doubted. Its source is referable to general principles of law. It is, perhaps, better to describe the jurisdiction as inherent rather than as based on implied consent to the extent that the international law applicable in certain respects to the admissibility of consent as a limiting or modifying factor may itself control the scope of that consent in so imposing limitations and modifications. The question of la compétence de la compétence has already been discussed in Chapter 2. The other particular areas where inherent jurisdiction exists will be discussed in subsequent chapters and not only will the extent of that jurisdiction be the subject-matter of those chapters, but where appropriate the relevance of and scope of consent in limiting and modifying that jurisdiction will also be considered. These areas are principally the jurisdiction

18

See C.F. Amerasinghe, op. cit. note 5, Chapter 7.

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in regard to interventions, the incidental jurisdiction to order interim measures, the jurisdiction in regard to remedies, and the jurisdiction in regard to reopening a case. These areas will be discussed in Chapters 7, 8 and 9. Consent may also affect the choice of substantive law or procedural law applied to the extent that agreement between the parties may determine the law applicable. On the other hand there may be limits imposed on the admissibility of such agreement, if it violates, e.g., basic or fundamental principles of international law which are ius cogens, or frustrates the proper administration of justice by an international tribunal. As already pointed out in the previous chapter, matters of choice of substantive and procedural law are not being discussed here. Initial competence and the questions of recevabilité are also capable of being affected by consent. Indeed, basically, initial competence is dependent on consent. The question then is what are the legal limitations on the scope of this consent. This issue will be addressed in Chapter 5. In regard to recevabilité, consent may also be relevant to determine both the extent of limitations on recevabilité and the exceptions thereto. The problem will be discussed in Chapter 6.

Parameters of Consent The first general principle is that as a general rule consent of the parties to the dispute who submit the dispute to the tribunal is the basis for the tribunal’s jurisdiction. The second principle that emerges is that, while consent to settlement of the dispute by the tribunal by the exercise of its jurisdiction must exist, there are inherent aspects of the exercise of its jurisdiction to which the consent of the parties to the dispute need not expressly be given, such inherent jurisdiction being determined by norms pertaining to jurisdiction which have been developed and which apply unless in certain instances there is consent to the contrary on the part of the parties to the dispute. There is a third principle which is relevant and which will be demonstrated to the extent that it is applicable in some of the chapters that follow. In certain situations, though the parties may have consented, at least ostensibly, to the exercise of contentious jurisdiction by the tribunal to adjudicate on the dispute, there are circumstances flowing from general norms of international law relating to jurisdiction which may render this consent ineffective, if the norms are successfully applied. This is the principle that applies, for instance, when the rule of non-exhaustion of local remedies may be invoked as a bar to recevabilité in cases where the rule is applicable (this rule is discussed in the context of recevabilité in Chapter 6) or when the rule in the Monetary

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Gold Case is applied to preclude the exercise of jurisdiction to settle a dispute between parties that have consented to the tribunal’s exercise of jurisdiction, because on account of the interests of third parties there is a lack of competence in the tribunal (see the discussion of this rule in Chapter 5). The source of these principles is the general principles of law relating to the judicial function. There is a fourth point to be made. On the one hand, while consent is generally the basis of the jurisdiction of international tribunals, subject to certain inherent powers that they have, conversely, a principle is to be recognized that there are certain limitations on the contentious jurisdictional authority of such tribunals which cannot be waived even by consent, whether express or implied between or among the parties to the dispute. Proof of consent to confer jurisdiction on the tribunal even though certain requirements are absent could not give the tribunal jurisdiction. There have been no specific decisions of tribunals, as far as is known, on the question of whether consent can cure the absence of these requirements, but it is clear that there are certain fundamental requirements that are so inextricably involved with the judicial function of international tribunals that their absence would be an absolute bar to the assumption of jurisdiction by such tribunals. Examples of such requirements are the existence of a dispute19 and the need for the claim to have an object and not be moot.20 Further, the legal nature of the dispute may also be a fundamental requirement, irrespective of whether settlement ex aequo et bono is requested or not. Again, the source of this principle is to be found in a general principle of law applicable to the judicial function in international law. The last two principles flow from general principles of law pertinent to the international judicial function and are extremely important in the context of the general consensual basis of contentious jurisdiction. One of them limits the scope of consent in that it does not permit consent to enlarge a jurisdiction which intrinsically an international tribunal does not have on account of the nature of its judicial function. The other does not permit consent to derogate from certain elements of jurisdiction which an international tribunal intrinsically has based on the character of its judicial function.

19

20

In the Mavrommatis Palestine Concessions Case (Preliminary Objection) (1924), PCIJ Series A No. 11, the question whether a “dispute” had been presented to the PCIJ was discussed in the judgment where it was found that there was a dispute. Had the Court found that there was no dispute as defined by it, the consent of the parties to adjudication would not have cured that defect. The same principle would apply to arbitrations. The Nuclear Tests Cases, 1974 ICJ Reports at pp. 253 and 457, were dismissed on this ground as was the Northern Cameroons Case, 1963 ICJ Reports at p. 38. These limitations inherent in the judicial function are discussed further in Chapter 5.

Chapter Four Interpretation of Clauses Submitting to Jurisdiction General Principles It is to be supposed that the general principles of interpretation1 of treaties would apply equally to instruments submitting to the jurisdiction of international tribunals. According to these principles the ordinary meaning of the text in context would be given a certain primacy with good faith and teleology having an important place. Arbitral tribunals have applied these principles in interpreting compromissory clauses. In the Interpretation of Article 79, §6(c) of the 1947 Peace Treaty (No. 196) the arbitrators stated that in the international field there was no room for a “specially extensive” interpretation of arbitration clauses, presumably meaning that the natural meaning must be accepted.2 In Filleting within the Gulf of St. Lawrence, the tribunal referred to the common intention of the parties as the basis of the Compromis and emphasized that it was “dans les termes de ce compromis” rather than in the conclusions of the parties submitted to the tribunal that the scope of the tribunal’s jurisdiction was to be found.3 There are other principles that are applicable within the scope of the above three principles while there are supplementary rules of interpretation referred to in Article 32 of the 1969 Vienna Treaty Convention. In interpreting a jurisdictional clause to a large extent the relevant principles would be applicable to the particular case taking into account all the circumstances. For the principles positively applicable to the interpretation of jurisdictional texts, there is no need to look beyond the 1969 Vienna Treaty Convention. Pursuant to Article 31(1) of that Convention finding the ordinary meaning in context and in the light of object and purpose on the assumption 1

2 3

See Articles 31 and 32 of the 1969 Vienna Convention on the Law of Treaties. For the Convention see 8 ILM (1969) p. 679; 63 AJIL (1969) p. 875. (France v. Italy, 1955), 13 UNRIAA at p. 431. (Canada v. France, 1986), 110 RGDIP (1986) at p. 730.

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of good faith is basic to construction of treaties and will be primarily applied in interpreting jurisdictional instruments. Furthermore the rest of Article 31 (i.e., paras. (2)–(4)) is no doubt applicable to interpretation of jurisdictional clauses. Supplementary means referred to in Article 32 of the Vienna Treaty Convention may be used in the appropriate circumstances. These include reference to the travaux préparatoires and the circumstances of the conclusion of the jurisdictional clause. As an example of the resort to such supplementary means may be cited the Salem Case which was decided before the Vienna Treaty Convention came into effect, where the tribunal said: [I]nterpretation is however only admissible if the wording of the compromise allows of several meanings of which none can be recognized as the clear will and purpose of the parties. In this case the Arbitral Tribunal has to investigate which meaning agrees with what has been the joint will of the parties when they concluded the compromise. Now, in order to ascertain the joint will of the parties, an arbitral tribunal is likewise entitled, according to the predominating international practice, to refer to the discussions and negotiations which led to the compromise.4

In Romak S.A. (Switzerland) v. the Republic of Uzbekistan5 the arbitral tribunal referred to articles 31 and 32 of the Vienna Treaty Convention and applied those provisions in an arbitration under a BIT, in deciding whether there was an “investment” as required by the BIT. The tribunal took the view that the articles correctly reflected general international law apart from the Convention.6 Articles 31 and 32 of the Vienna Treaty Convention read as follows: ARTICLE 31 – GENERAL RULE OF INTERPRETATION 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:

4

5

6

(1932, Egypt v. USA), 2 UNRIAA at p. 1181. In a transnational arbitration involving a state as a party surrounding material was considered relevant to interpretation: see Lubelski v. Etât du Burundi (1968), 113 JPA at p. 88. See also for a similar approach in a true international arbitration the Gold of the National Bank of Albania (1953), 12 UNRIAA at p. 35. The provisions of Articles 31 and 32 of the Vienna Treaty Convention are cited fully below. They reflect general international law dehors the Convention. (2009), PCA. See the website of the PCA: . This arbitration affords a good example of how the general principles reflected in the Vienna Treaty Convention are to be applied; see ibid. pp. 39–42. Ibid. at p. 41, citing cases decided by the ICJ for the proposition.

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(a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. 3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended. ARTICLE 32 – SUPPLEMENTARY MEANS OF INTERPRETATION Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or, (b) leads to a result which is manifestly absurd or unreasonable.

Applying these provisions of the Convention the tribunal stated: 206. The point of departure for the Arbitral Tribunal remains the ordinary meaning of the term “investment” . . ., which entails expenditure or contribution, as well as the purpose of obtaining an economic benefit the existence and extent of which is, by definition, uncertain. However, as stated above . . ., the Arbitral Tribunal needs to construe the term “investments” in its context and in light of the object and purpose of the BIT. . . . and also to the definition of the term “returns” (Article 1(3)), the repeated references to “territory” in relation with the investment (particularly at Article 2), and the description of the protection offered at Article 3(1), all of which denote an economic activity involving some permanence or duration in relation to the host State. 207. The Arbitral Tribunal therefore considers that the term “investments” under the BIT has an inherent meaning (irrespective of whether the investor resorts to ICSID or UNCITRAL arbitral proceedings) entailing a contribution that extends over a certain period of time and that involves some risk. The Arbitral Tribunal is further comforted in its analysis by the reasoning adopted by other arbitral tribunals . . . which consistently incorporates contribution, duration and risk as hallmarks of an “investment.”7

The tribunal invoked in particular Art. 32(b) of the Vienna Treaty Convention which provides for resort to supplementary means of interpretation

7

Ibid. at p. 53.

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where the interpretation, according to Art. 31, leads to a result which is “manifestly absurd or unreasonable.”8 The tribunal then concluded: 241. . . . [T]he Arbitral Tribunal has discharged its mission to construe the agreement to arbitrate invoked by the Claimant and contained in the BIT, and has done so in application of public international law rules as embodied in the Vienna Convention – an instrument relied upon both by Romak and Uzbekistan. The Tribunal has therefore addressed and answered the question raised by the Parties, namely whether the claim brought by Romak falls within the jurisdiction of the Arbitral Tribunal as determined by the BIT. E. Conclusion 242. In summary, Romak did not own an “investment” within the meaning of Article 1 of the BIT. Romak’s rights were embodied in and arise out of a sales contract, a one-off commercial transaction pursuant to which Romak undertook to deliver wheat against a price to be paid by the Uzbek parties. 243. In the absence of any investment underlying the dispute, Uzbekistan has not consented to arbitrate this dispute in accordance with Article 9 of the BIT, and the Arbitral Tribunal does not have jurisdiction in the present matter.9

There are variations on the theme in given cases but the particular problem then requires attention in regard to jurisdictional clauses is whether there is a rebuttable presumption at least, if not an imperative, that such clauses must be interpreted restrictively. As an aspect of the restrictive principle of interpretation may also be considered the rule of interpretation alleged to be applicable that clauses of treaties must be interpreted contra proferentem, i.e., in case or doubt, against the party responsible for proposing or drafting the disputed clause. Another aspect relates to the relevance of the doctrine of sovereignty to interpretation of jurisdictional clauses.

Restrictive Interpretation The principle of restrictive interpretation in respect of treaty law in general, if such exists, is based on the notion that “restrictions on sovereignty cannot be presumed” which emanated in regard to the creation of customary international law in general from a pronouncement of the PCIJ in the Lotus Case.10 Certain authors have in the past contended that, because jurisdictional clauses are particularly in derogation of “sovereignty”, they must be

8 9 10

Ibid. at p. 46. Ibid. at p. 62. PCIJ Series A No. 10 at p. 18.

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interpreted restrictively.11 But the weight of evidence is against the application, as such, of any restrictive principle to jurisdictional clauses, whatever may be the case with other treaty provisions,12 though lip service may have been paid to the principle. The ICJ and the PCIJ have rejected restrictive interpretation as relevant in general to the interpretation of jurisdictional clauses.13 In practice what is done now by international arbitral tribunals in interpreting jurisdictional clauses is appropriately reflected in the statement made by the arbitral tribunal in the Amco v. Indonesia arbitration that: In the first place, like any other conventions, a convention to arbitrate is not to be construed restrictively, nor, as a matter of fact, broadly or liberally. It is to be construed in a way which leads to find out and to respect the common will of the parties: such a method of interpretation is but the application of the fundamental principle pacta sunt servanda, a principle common, indeed, to all systems of internal law and to international law. Moreover – and this is again a general principle of law – any convention, including conventions to arbitrate, should be construed in good faith, that is to say by taking into account the consequences of their commitments the parties may be considered as having reasonably and legitimately envisaged.14

The restrictive theory was rejected as such as was any liberal view of interpretation. Emphasis was placed on ascertaining the common will of the parties and on good faith. In that case jurisdiction was found to exist.15 On the other hand, the statement of principles of interpretation was somewhat incomplete, in that the proper reference to the intention or common will as expressed in the actual words used in the instrument taken in context and the relevance of the object and purpose of the instrument were not

11

12

13

14 15

See Rousseau, op. cit. note 5 pp. 273–4; Guggenheim, 1 Traité de Droit international public (1967) pp. 256–8. See, e.g., the statement of the sole arbitrator in the Kronprins Gustaf Adolf Arbitration (USA v. Sweden, 1930), 2 UNRIAA at p. 1254; the argument of counsel for Bulgaria in the Interpretation of the Treaty of Neuilly Arbitration (Bulgaria v. Greece, 1933), 3 UNRIAA at p. 1400; the joint dissenting opinion of Judges Anzilotti and Huber in The Wimbledon Case (1923), PCIJ Series A No. 1 at p. 37; and the statement of counsel for France in the Competence of the International Labour Organization in the Matter of the Regulation of Conditions of Work of Persons Employed in Agriculture Opinion (1922), PCIJ Series C No. 1 at pp. 274–5. See the discussion in C.F. Amerasinghe, Jurisdiction of International Tribunals (2003), pp. 106–9, 113–15. (1983), 1 ICSID Reports at p. 394. The decision in the arbitration on the merits was later partially annulled but not on the jurisdictional aspect: (1986), 1 ibid. pp. 509 ff. The resubmitted case did not involve any challenge to the decision on jurisdiction made in the first case in 1983: (1988) 1 ibid. pp. 543 ff.

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mentioned. These together with good faith are the basic constituent elements of interpretation reflected in Article 31 of the Vienna Treaty Convention and there is no reason why they should not be applied to the interpretation of jurisdictional clauses to the exclusion of any restrictive principle. In some arbitrations decided in the early twentieth century a restrictive interpretation was not adopted. In French Co. of Venezuela Railroads Case, the view was taken that, while the relevant protocol may impose limits on competence, within those limits the tribunal had wide powers.16 In the Central Rhodope Forests Arbitration the tribunal took the view that the arbitration clause should, in case of doubt, be interpreted “en faveur de la compétence” rather than in the opposite sense.17 In the Salem Case the tribunal stated that the object was to establish the common will of the parties at the time the Compromis was concluded and in doing so it may refer to discussions and negotiations, i.e., the travaux préparatoires.18 However, in a case decided by a chamber of the Arbitration Commission on Property, Rights and Interests in Germany the arbitrators said: In respect of competence, however, special considerations must be taken into account. In the interest of international arbitration in particular so as not to discourage the States, through unintended and unexpected extensions of the competence provisions, from concluding future agreements – it is necessary to interpret such competence provisions in a strict sense. It should also be borne in mind that the rules of interpretation of the various law systems do by no means coincide but, as far as interpretations beyond the mere wording are concerned are quite different from each other due to the stage of development and the style of each law system. In regard to the competence of the Commission, the application of Article 8 of the Charter must be limited to exceptional cases, because an ambiguous delimitation of competence, not contemplated by the contracting States, would jeopardize the very basis of international arbitration, namely, the well considered and carefully limited surrender of sovereign rights.19

The Iran-US Claims Tribunal has also expressed in more than one case a preference for the restrictive approach to interpretation of jurisdictional provisions. In U.S.A. v. The Islamic Republic of Iran the tribunal said: It is a well established principle of international law that provisions conferring jurisdiction upon an arbitral tribunal shall be interpreted in a restrictive man-

16 17 18 19

(1905, France v. Venezuela), 10 UNRIAA at p. 348. (1931, Bulgaria v. Greece), 3 UNRIAA at p. 1403. (1932, Egypt v. USA), 2 UNRIAA at p. 1181. (1967), Coussirat-Coustère and Eisemann, 3 Repertory of International Arbitral Jurisprudence (1991) p. 421. See also Interpretation of Article 79, §6(c), of the 1947 Peace Treaty (No. 196) (France v. Italy, 1955), 13 UNRIAA at p. 431; Cases of Dual Nationality (No. 22) (Italy v. UK, 1954). 14 UNRIAA ibid. at p. 36.

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ner. The question as to whether the Tribunal has jurisdiction over the claims in this case must be decided on the basis of this principle.20

In view of the approach taken by established courts such as the PCIJ and the ICJ,21 it must be concluded that the views expressed in such arbitrations as these do not reflect the better view. They also conflict with the views expressed in other arbitrations, some of which have been discussed above. There is no functional reason, besides, to distinguish between established courts and arbitral tribunals. Consent is at the heart of the jurisdiction of both kinds of tribunals. When an entity agrees to submit to the jurisdiction of an international arbitral tribunal there is no reason to suppose that it is not acting in good faith in regard to the submission with a view to or with the object and purpose, to use the language of the 1969 Vienna Treaty Convention, of having the tribunal exercise jurisdiction rather than not exercise it. In short the general principles of interpretation enshrined in the 1969 Vienna Treaty Convention are totally appropriate and adequate for jurisdictional clauses as such. As general principles which international tribunals apply, it may be said, negatively restrictive principles of interpretation are not relevant while positively the principles reflected in Articles 31 and 32 of the Vienna Treaty Convention of 1969 are applicable to the interpretation of jurisdictional clauses submitting to international tribunals.

The Contra Proferentem Rule The problem of applying the contra proferentem rule has arisen particularly in relation to unilateral declarations under the Optional Clause, Article 36(2) of the Statute of the ICJ (and the preceding provision of the PCIJ statute).22 Here it is relevant to state that neither a restrictive theory of interpretation of jurisdictional clauses nor a principle based on interpretation contra

20

21 22

(1984), 5 Iran-US CTR at p. 99. See also The Government of the Islamic Republic of Iran v. The Government of the U.S.A. (1984), 5 ibid. at p. 80, and Lillian Byrdine Grimm (1983) 2 ibid. at p. 80, decided by the same tribunal. There are some other arbitrations in which the tribunals have leaned towards a restrictive interpretation. See Cases of Dual Nationality (No. 22) (1954, UK v. Italy), 14 UNRIAA at p. 36, Interpretation of Article 79, §6(c), of the 1947 Peace Treaty (No. 196) (France v. Italy, 1955), 13 UNRIAA at p. 431 – “ne peut pas interprétée extensivement”, International Administrie Kantoor N.V. v. Federal Republic of Germany (1967), Coussirat-Coustère and Eisemann, 3 op. cit. note 18 at p. 1421 – “it is necessary to interpret such competence provisions in a strict sense.” See references in footnote 12 above. See the discussion in C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009), pp. 90–4.

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proferentem in case of doubt has in effect been accepted generally in the jurisprudence of the World Court, whatever has been stated or whatever lip service has been paid to those principles. Neither of the principles, moreover, is referred to at all in the 1969 Vienna Treaty Convention. It has been argued that the principle verba ambigua accipiuntur contra proferentem (ambiguities are to be construed against the party which has stipulated) is a general principle of law since it is common to the Roman, the Civil and the Common law.23 It has also been proposed that, while the rule is not applicable to some kinds of treaties, it applies to other kinds of treaties.24 However, it does not seem to have been recognized as a general rule in practice. The justification for this practice emerges from an explanation given by the arbitrator in the Pensions of Officials of the Saar Territory Case which in fact conceded that it may be applicable in certain circumstances but not where the agreement was the object of lengthy negotiations, precisely in regard to the question of officials’ pensions, and the parties came to mutual agreement on their proposals step by step. In such a case, which party it was that drafted the final text is, from the standpoint of this rule of interpretation, irrelevant, quite apart from the fact that . . . neither in the letter nor in the spirit of Article 10 can there be any doubt as to the rule contained in it.25

In that case the contra proferentem rule was not applied. Treaties, except those imposed by force or unequal treaties, are the result of common effort and the product of negotiations. They do not generally result from drafts imposed by one party. Thus, even though a particular provision may be based on a draft proposed by one negotiator, there is no reason to assume that that party was so forceful as to have without input from the other party looked after his own interests in such a way that it becomes necessary in interpreting the text to safeguard, by way of compensation, the interest of the other party. Even if treaties originate from draft proposed by one party there is no reason to suppose that the text was imposed on the other. There is little justification to apply the principle at all in the interpretation particularly of arbitral jurisdictional clauses and no evidence that this has been done. What is important is to give the text of the clause its “intended” meaning, without exercising a bias against the proposer, as such.

23

24

25

See H. Lauterpacht, “Restrictive Interpretation and the Principle of Effectiveness in the Interpretation of Treaties”, 26 BYIL (1949) at pp. 56 ff. See, e.g., Rousseau, 1 Droit international public (1970) pp. 297–8, 304–5. See also for the principle in general: Oertman, “Interests and Concepts”: in Schoch (ed.), The Jurisprudence of Interests (1948) at p. 63. (Germany v. Saar Territory, 1934), 3 UNRIAA at pp. 1564–5.

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In any event a pertinent observation is that, as applied to jurisdictional clauses, the rule contra proferentem gives rise to contradictions which make its relevance highly questionable, indeed unacceptable. Where there is evidence that one party was somehow responsible for the end product in the jurisdictional clause, the rule would require that, if that party is the complainant in the proceeding, in case of doubt the clause would have to be interpreted against that party’s interest so as to exclude jurisdiction. On the other hand, where that party is the respondent disputing jurisdiction and the claimant is arguing for jurisdiction, the application of the rule would result in the clause being interpreted so as to give the tribunal jurisdiction. This duality does not make sense at all. Thus, the rule could in reason not be a candidate in any circumstances for application to jurisdictional clauses. The qualification made in dicta in some decided cases26 that the rule may be applicable in certain situations cannot, therefore, be relevant to jurisdictional clauses at all. Further, there is no evidence that those qualifications were intended to cover jurisdictional clauses. What is important is not the interpretation contra proferentem but the interpretation with a view to establishing a meaning for the text which gives effect to the “intentions” of the single proponent by applying the recognized principles of interpretation.

The Doctrine of Sovereignty It would not be appropriate to discuss in detail here the doctrine of state sovereignty27 and its shortcomings, but a word must be said about it, particularly because the ICJ referred to it in connection with jurisdictional clauses, even though the tendency in modern international legal thought is to regard the doctrine as outmoded and irrelevant.28 In the Lotus Case the PCIJ invoked the doctrine to infer that there was no presumption of restrictions on the freedom of states to act in general, though the case dealt in particular with the exercise of criminal jurisdiction over persons. The relevant aspect of the doctrine to the subject being considered here concerns the notion that international obligations may not be imposed upon a state without its

26 27

28

See the Pensions of Officials of the Saar Territory Case, ibid. The doctrine grew up in relation to the internal nature of the state but developed into one relevant to international law in the twentieth century: see Oppenheim, 1 International Law (1955) pp. 120–3. See literature cited in Oppenheim, 1 International Law (1992) pp. 119 and 124 note 1 and Brownlie, Principles of Public International Law (1998) p. 289 note 1.

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consent.29 Hence comes the conclusion that states have the freedom to act as they wish and any limitations on such freedom cannot be presumed but must be proved by showing that the state properly consented to them. Transposed to the realm of jurisdiction of international tribunals the doctrine supposes that submission to the jurisdiction of such tribunals by a state must be positively and incontrovertibly proved, because it is assumed that its submission was limited by its desire to preserve its freedom to act, its consent being required, because the exercise of jurisdiction by an international tribunal over a state is a limitation on its freedom of action and, therefore, cannot be “presumed”. From that premise the conclusion is reached, logically or not, that instruments submitting to the jurisdiction of international tribunals to which a state is a party must be restrictively construed. The point is that these conclusions are strictly a non sequitur. On the assumption that consent is the source of limitation on a state’s freedom to act (which is not entirely clear because a state can be bound by general principles of law which may not essentially emanate from its consent), the question is whether consent must be given such a narrow connotation in relation to the freedom to act as to result in acceptance of restrictions on its freedom, including submissions to the jurisdiction of international tribunals, being restrictively construed. The freedom to act which seems to be regarded as sacrosanct in the doctrine of state sovereignty must include the freedom to act in such a way as to impose limitations on its freedom to act, e.g., through submission to the jurisdiction of international tribunals. The freedom to limit freedoms is just as much a part of the freedom to act as the freedom to act positively without limitations. This means that, when a state freely consents to limit its freedoms by submitting to the jurisdiction of an international tribunal, there is no reason to assume that this submission is to be regarded as having been given unwillingly or stingily, so as to imply that the submission is to be considered a presumptively limited submission. On the contrary it should be logical or reasonable to conclude that the submission was made in good faith to be construed on the assumption not that it was a restricted submission but one that was intended to be effective in the light of the terms of the submission. It would appear then that even on the view that a theory of state sovereignty is relevant to the interpretation of submissions to the jurisdiction of international tribunals the conclusion that it entails a restrictive theory of interpretation of such instruments does not hold water. In spite of its statement on sovereignty in the Lotus Case the same Court stated in The Wimbledon Case in regard to treaties:

29

See Brownlie, ibid. at p. 289.

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The argument has also been advanced that the general grant of a right of passage to vessels of all nationalities through the Kiel Canal cannot deprive Germany of the exercise of her rights as a neutral power in time of war, and place her under an obligation to allow passage through the canal of contraband designed for one of the belligerents; for, in this wide sense, this grant would imply the abandonment by Germany of a personal and imprescriptible right, which forms an essential part of her sovereignty and which she neither could nor intended to renounce by anticipation. This contention has not convinced the Court; it conflicts with general considerations of the highest order. It is also gainsaid by consistent international practice . . . The court declines to see in the conclusion of any treaty by which a State undertakes to perform or refrain from performing a particular act an abandonment of its sovereignty. No doubt any convention creating an obligation of this kind places a restriction upon the exercise of the sovereign rights of the State, in the sense that it requires them to be exercised in a certain way. But the right of entering into international engagements is an attribute of State sovereignty.30

The view has been adopted by international arbitral tribunals. In the Cession of Vessels and Tugs for Navigation on the Danube the arbitral tribunal held that The duty which the Arbitrator is compelled to perform by the explicit and unqualified language of the Treaties, which duty is made doubly imperative by the history and manifest objects of the provision, is the most delicate and difficult task which he is called upon to perform under any of the Treaties, but in discharging this duty the Arbitrator is not undertaking to interfere in any sense with the sovereign rights of any of the States. On the contrary, he is discharging this grave duty solely because all the States which have signed the Treaties have each, by its sovereign act, called upon the Arbitrator to do so.31

These views support the approach to sovereignty elaborated above. 30

31

(1923) PCIJ Series A No. 1 at p. 25. See also for a similar statement the Exchange of Greek and Turkish Populations Opinion (1925), PCIJ Series B No. 10 at p. 21: The principal reason why the Turkish Delegation has maintained the theory of an implicit reference to local legislation appears to be that, in their opinion, a contrary solution would involve consequences affecting Turkey’s sovereign rights. But, as the Court has already had occasion to point out in its judgment in the case of the Wimbledon, “the right of entering into international engagements is an attribute of State sovereignty”. In the present case, moreover, the obligations of the contracting States are absolutely equal and reciprocal. It is therefore impossible to admit that a convention which creates obligations of this kind, construed according to its natural meaning, infringes the sovereign rights of the High Contracting Parties. (1921), Allied Powers v. Germany, Austria, Hungary and Bulgaria), 1 UNRIAA at p. 103. There are some transnational (not international) arbitrations in which statements along the lines of the views expressed in the citations in the text above have been made; see, e.g., the Aramco Arbitration (1958) 27 ILR at pp. 152–3; the Framatome S.A. et al. Arbitration (1982), an ICC case with the Atomic Energy Organization of Iran as the other party, 111 JDI (1984) at p. 75 (where the tribunal stated that “sovereignty” does not mean that a state cannot submit to arbitration).

Chapter Five The Matter of Compétence By basic or primary jurisdiction is meant the compétence to proceed to settle the dispute on the merits. As will be seen, there is a jurisdiction relating to the performance of other acts than this in connection with the settlement of the dispute which will often be governed by somewhat different considerations. The requirements for the existence of primary jurisdiction in a given case must be fulfilled for the exercise of that jurisdiction. If they are not, the jurisdiction does not exist and may not be exercised. On the other hand, as was said in Wintershell A. G. et al. v. The Government of Qatar, a transnational arbitration, it is not necessary that the claimant party prevail on the merits in order that a tribunal have jurisdiction.1 The statement applies to all international tribunals as well. While in general the basis of this jurisdiction is consensual, not only must the tribunal examine the instruments in or sources through which this consent is expressed in order to establish the legal definition of its jurisdictional authority but it must ascertain whether the facts of the situation satisfy that legal definition. Primary (or basic) compétence is derived principally from an instrument (or instruments) which applies to the international tribunal to which a dispute is submitted. It may be a general multilateral convention such as UNCLOS or the ICSID Convention, a bilateral treaty such as an investment treaty, or the arrangement between Iran and the US that created the Iran-US Claims Tribunal, a Compromis creating an ad hoc tribunal for the particular dispute, such as the agreement submitting to arbitration the Beagle Channel dispute between Argentina and Chile which was decided in 1977, or, indeed, any other kind of instrument which legally creates or applies to the tribunal concerned. Because international tribunals have a juridiction attribué and not 1

(1988), 28 ILM at p. 812. On objections to jurisdiction generally see Malloy, “Objections to Adjudication in Contentious Cases before the International Court of Justice”, 5 Brooklyn JIL (1979) p. 262, Prott, “Avoiding a Decision on the Merits in the International Court of Justice”, 7 Sydney LR (1976) p. 433.

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a juridiction de droit commun, the terms of the governing instruments will determine the basic or primary jurisdiction or compétence of the tribunal. On the other hand, as will be seen in subsequent chapters, there are matters in regard to which international arbitral tribunals have an incidental or inherent jurisdiction, even though the governing instrument may be silent on these matters. Such matters include the authority to control the proceedings, to decide on remedies and the like. Already discussed was the inherent jurisdiction to decide on the tribunal’s own compétence. There are also matters such as the order of provisional measures in regard to which the tribunal has a certain incidental jurisdiction, even though it may not ultimately have full compétence to decide the merits and even if the existence of the latter has not been decided. Primary compétence to proceed generally with the settlement of the dispute submitted rests on the instruments governing the functioning of the tribunal. First, in the interpretation of these instruments, as was said in the Cases of Dual Nationality (No. 22) decided by a Commission established under the Peace Treaty of 1947, “No interpretation must ever arrive at a solution other than that which emerges formally from the Treaty, unless, obviously, this latter leads to an absurd result.”2 Secondly, as was said in regard to jurisdiction in the same case: The provisions of a treaty must be interpreted in such a way that they may conform as much as possible with the rules established by international law rather than derogate from these rulings. And let us say once for all that the arbitrator cannot substitute the legislator.3

Thus, interpretation of jurisdictional clauses must be formal and yet constructive (because interpretation must not lead to absurdity) while at the same time the judge must not turn legislator. These two principles apply to arbitral tribunals of whatever nature. The general approach to interpretation has been discussed in a previous chapter. Suffice it to note here that the two principles stated above are particularly important in regard to jurisdiction. While interpretation is not restrictive, it is equally not excessively liberal. While a functional or teleological approach may be warranted in the appropriate circumstances, generally there are limits to functionalism which turn on the avoidance of legislating. Compétence also concerns fundamental matters. Thus, jurisdictional limitations relating to compétence depend on what pertains to basic legal qualifications of an arbitral tribunal to examine complaints submitted and to

2 3

(1954, Italy v. UK), 14 UNRIAA at p. 36. Ibid.

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adjudicate on their merits.4 This is as opposed to matters of receivability (recevabilité), for instance, which are not fundamental. Also an application may be within a tribunal’s compétence but still be irreceivable, or it may be receivable but not subject to the compétence of the tribunal. The characteristic is important because, among other things, an objection relating to recevabilité may be waived or the opportunity to raise it lost, whereas a defect in jurisdiction can technically never be cured as far as the tribunal’s functioning in the case before it is concerned. Other consequences of the characteristic are that as will be seen, an objection to compétence may be raised proprio motu by the tribunal, if it is not raised by the parties, it is possible that the tribunal has an obligation to raise proprio motu such objections, and such objections may be raised at any time. These are examples of the consequences of the fundamental or essential nature of matters relation to primary compétence. The line between lack of compétence and irreceivability or inadmissibility is sometimes difficult to draw. The result of both is to render the case incapable of being decided on the merits. However, the rules relating to compétence may be stricter than those pertaining to irreceivability or inadmissibility.5 International tribunals, including international arbitral tribunals, are careful about the characterization of objections to jurisdiction and admissibility.6

4

5

6

See Judgments of the I.L.O. Administrative Tribunal Opinion, 1956 ICJ Reports at p. 87, for the application of this principle to IATs. The distinction was implicitly recognized by the UNAT in Hilpern, UNAT Judgment No. 57 (1955), JUNAT Nos. 1–70, p. 296, where the objections raised to jurisdiction were that the application had been filed too late and that the applicant was not a staff member. The latter objection related to the tribunal’s compétence, while the former argument concerned inadmissibility. It is to be noted that the ICJ in particular has been especially careful in recognizing clearly the distinction between compétence and recevabilité, to the extent that it has criticized the use of terms by a party which blurred that distinction. In the Interhandel Case in discussing the objection of the respondent (USA) that the claimant state’s (Switzerland) national had not exhausted local remedies as required by international law the Court said: Although framed as an objection to the jurisdiction of the Court, this objection must be regarded as directed against the admissibility (recevabilité) of the Application of the Swiss Government. Indeed, it is to be regarded as a plea which would become devoid of object if the requirement of the prior exhaustion of local remedies were fulfilled. 1959 ICJ Reports at p. 26. In the Nottebohm Case (Second Phase) the Court regarded and referred to the objection that Nottebohm did not have the nationality of the respondent state as related to admissibility (recevabilité ) and not to compétence: 1955 ICJ Reports at p. 12. On the other hand, in the Lockerbie Case, for example, the Court described as objections to jurisdiction the objections that there was no legal dispute and that the requisites of Article 14 of the Montreal Convention relating to settlement by the ICJ had not been satisfied. An objection based on

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There are several arbitral decisions in which tribunals have asserted their right to raise for themselves or proprio motu questions relating to compétence. In the Horst Pürfurst Case the arbitral commission stated that it “like any other international tribunal – must examine ex officio questions concerning its own jurisdiction (sa propre compétence) . . .”7 in the Burton Marks and Harry Umann Case, the Iran-US Claims Tribunal made it quite clear that: Claimant’s argument that respondent has waived its jurisdictional objections by not raising them is unavailing. Article 21(3) of the Tribunal Rules does not purport to preclude the Tribunal from raising jurisdictional issues on its own motion.8

In the Rio Grande Irrigation and Land Company Case the arbitral tribunal stated: Whatever be the proper construction of the instruments controlling the Tribunal or of the rules of procedure there is inherent in this and every legal tribunal a power, and indeed a duty, to entertain, and, in proper cases, to raise for themselves, preliminary points going to their jurisdiction to entertain the claim. Such a power is inseparable and indispensable to the proper conduct of business.9

In the Young Plan Case the arbitral tribunal said that “though the parties have raised no jurisdictional issue it still remains the responsibility of the tribunal to determine, ex officio, its compétence to act.”10 These statements make the point quite clearly. Text-writers generally have agreed with the view expressed above in regard to arbitral tribunals.11 The right of a tribunal to raise questions of compétence proprio motu may be of particular importance in the case of arbitral tribunals from the angle of doing justice and affording a party his or her rights.

Forum Prorogatum and Competénce Forum prorogatum as a title to jurisdiction involves the completion of a jurisdictional requirement by subsequent conduct. It relates to the jurisdictional

7

8 9 10 11

the incidence of an SC resolution was in contrast treated as a matter of admissibility (recevabilité): 1992 ICJ Reports p. 3. See further for the practice of other international tribunals, C.F. Amerasinghe, Jurisdiction of International Tribunals (2003) pp. 193–5. (1958, Arbitral Commission on Property, Rights and Interests in Germany), 1 Eintscheidungen at p. 142. (1985), 6 Iran-US CTR at p. 296. (1923, UK v. US), 6 UNRIAA at p. 135. (1980, Belgium, France, Switzerland and UK v. FRG), 59 ILR at p. 524. See, e.g., Ralston, International Arbitral Law and Procedure (1926) at pp. 21 ff.

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requirement of consent or agreement of the parties and not to requirements inherent in the judicial function. That is to say the doctrine applies only where the absence of consent given before the institution of proceedings is curable by implied consent flowing from conduct subsequent to the institution of proceedings. In regard to the first point, the existence of limitations to jurisdiction inherent in the judicial function has been discussed at the end of Chapter 3. Thus, in regard, for example, to the issue whether a dispute exists which is a matter of this nature it is not possible that the argument that there has been forum prorogatum can succeed. Similarly, where the claim is moot, the doctrine of forum prorogatum would not be relevant. The doctrine has been accepted categorically in the case of the World Court but this is the only tribunal in which it has been applied with success. However, the relevance in principle of the doctrine in arbitration has been denied. In the Horst Pürfurst Case, for instance, the tribunal which was an arbitral tribunal stated that “the principle of forum prorogatum does not apply to bodies of international jurisdiction charged with the performance of special functions.”12 The statement was qualified by reference to cases in which there was a provision in the constitutive Convention specifically permitting jurisdiction over questions subsequently referred to the tribunal by special agreement. In the Young Plan Case, however, the tribunal stated that “Not even an explicit agreement by the parties could confer on the Tribunal a jurisdiction that is not contemplated by the LDA (London Debt Agreement).”13 Thus, there seems to be a minor conflict between these cases. While conduct subsequent to the institution of proceedings which falls short of an explicit agreement may be inadequate as a forum prorogatum to create jurisdiction in an arbitral tribunal, which was absent in the first place, there is some disagreement on whether a subsequent special or explicit agreement may do so. The better view is that expressed in the Young Plan Case for the reason that, if conduct subsequent to the institution of proceedings is unacceptable as a source of consent, there is no reason why a special or explicit agreement which also gives rise to subsequent consent may do so. It is noted that the reference in the Horst Pürfurst Case to tribunals “charged with the performance of special functions” does not in effect restrict only to certain kinds of arbitral tribunals the principle that the doctrine of forum prorogatum does not apply. The bodies referred to in that case are clearly arbitral tribunals as such because arbitral tribunals are entrusted with special functions

12

13

(1958, Arbitral Commission on Property, Rights and Interests in Germany), 1 Eintscheidungen at p. 142. (1980, Belgium, France, Switzerland, UK v. FRG), 59 ILR at p. 524. The LDA established the tribunal.

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and in addition have juridiction attribué and not a general jurisdiction. The language used to describe arbitral tribunals in that case is unfortunate but the implication of the language is clear.

The Judgment on Compétence and Res judicata The principle of res judicata as a general principle of law of international adjudication, whether arbitral or otherwise, seems to be well accepted. It has been said by an arbitral tribunal that “D’après les principes géneraux du Droit international, la revision de la sentence du juge international n’est ouverte que lorsqu’elle est prevue par des dispositions procédurales precisant la but et les limites de cette institution . . .”,14 implying that in the absence of a contrary indication judgments of international tribunals are res judicata, even if this principle is not specifically expressed in the constitutive instruments of the tribunal. In the Amco Arbitration (Resubmitted Case: Jurisdiction) the statement was made that “the principle of res judicata is a general principle of law: . . .”15 In the case of the ICJ, Article 60 of its statute incorporates expressly the principle of res judicata (subject to Article 61) which has been specifically applied to decisions on jurisdiction by the Court. In the Corfu Channel Case (Compensation) Albania challenged the jurisdiction of the Court with respect to the assessment of damages. The Court held that: “The court may confine itself to stating that this jurisdiction was established by its Judgment of April 9th, 1941, that, in accordance with the Statute (Article 60), which, for the settlement of the present dispute, is binding upon the Albanian Government, that Judgment is final and without appeal, and that therefore the matter is res judicata.”16 Though the question of jurisdiction referred to in that case concerned the compétence to assess damages, which is slightly different from the authority to decide the merits of the case as such, both matters involve the consideration of competénce and the applicable rule is the same. The practice of the ICJ shows that under its statute the principle of res judicata applies equally to matters pertaining to compétence in general as it does to the judgment on the merits of the case, though this is not expressly stated in the statute itself. There is no reason why the same interpretation of the principle should not be applicable to the general principle of interna-

14 15 16

The Canino Case (1959, France v. Italy). 13 UNRIAA at p. 447. (1988), 1 ICSID Reports at p. 549. The Corfu Channel Case (Compensation), 1949 ICJ Reports at p. 248.

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tional law of res judicata, even where constitutive instruments or compromis are silent on the matter. The subsidiary question that arises is how the principle of res judicata would be applied if the particular issue of jurisdiction had been overlooked both by the parties and the tribunal, or not addressed by one or the other, and the merits had been consequently judged. The question is important because, while a finding that a tribunal has jurisdiction where the issue has been fully addressed may be res judicata, however wrong it may be thought to be by anyone, it may be argued that, if the particular issue relating to jurisdiction had not been raised before the tribunal, there can be no finality of a decision on the issue because there was no decision, following argument or at least notice to the parties, on the issue. Particularly, because the existence of jurisdiction cannot lightly be presumed and there is a duty upon the tribunal to raise proprio motu jurisdictional matters, the question assumes a different complexion from the similar question asked in relation to decisions on the merits or in regard to the substance or remedies and the like, where, inter alia, the tribunal has no responsibilities in regard to the raising of issues. It is cogently arguable that, because an international tribunal’s jurisdiction needs to be established and cannot be assumed, it cannot have jurisdiction by default. The acceptance of this argument would lead to the conclusion that, as a general principle, in the circumstances described above the principle of res judicata is to be interpreted in such a way that the issue that was not addressed could be litigated and decided and that this would be the case also where there is express provision for the application in general of the principle to the judgments of the particular tribunal. In the absence of an express contrary indication in the jurisdictional instruments of a tribunal – and the effect of express indication to the contrary may, indeed, be a matter for discussion – the above interpretation of the principle of res judicata in respect of judgments on compétence would be applicable as the appropriate interpretation of the general principle of res judicata. It is important to note that the result flows from the appropriate interpretation of the principle of res judicata and not from the recognition of an exception to it. Further, without a doubt the omission from the proceedings or the judgment already given of the issue which is being raised must be strictly proved. It is an issue relating to jurisdiction that must have been omitted. It is insufficient that what is in question are arguments or contentions and not a specific issue. This may be a very fine distinction but it must be drawn.

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Identifying Matters of Compétence Generally the instruments governing the functioning of a tribunal will indicate what are the matters concerning compétence, i.e., what is the extent and what are the limits of the tribunal’s authority in settling the dispute on its merits. But there are certain general principles relating to matters of compétence that may be applicable in the absence of specific mention in these instruments, such as the principles relating to the requirement of non-mootness17 or to the presence of a dispute.18 Indeed, some principles may be so fundamental that even consent among the parties to the dispute or explicit provisions in the governing instruments do not have a countervailing effect. This point is discussed further below. These fundamental principles aside, tribunals look entirely to the content of their governing instruments and their interpretation to determine the extent and scope of their jurisdiction and the limitations on it. The question of some importance that arises in respect of jurisdiction is how to distinguish matters of compétence from matters of recevabilité. The first point is that much will depend on the interpretation of the governing instruments, which means that there is some flexibility and some discretion left to the parties. This is so to the extent that what is a matter of recevabilité for one tribunal or in one situation may be a matter of compétence for another or in another situation. A good example of this is the nationality of claims rule or variations of it which in customary international law is regarded as a rule relating to recevabilité and not to compétence where it is applicable.19 In the case of the arbitrations which take place before the Iran-US Claims Tribunal pursuant to the Algiers Declaration and connected international instruments between Iran and the USA the nationality of claims rule as interpreted by the tribunal appears to be treated as a matter of jurisdiction, meaning compétence, because presumably the nationality of the claim is so fundamental under the governing instruments to the jurisdiction of the tribunal. For this reason, among other things, it would not be possible for the respondent State

17

18

19

See for this general principle, e.g., the Nuclear Tests Cases, 1974 ICJ Reports at pp. 253 and 457, and the Northern Cameroons Case, 1963 ICJ Reports at p. 15. See, e.g., the Mavrommatis Palestine Concessions Case (Preliminary Objection), (1924), PCIJ Series A No. 2 at p. 11, and the South West Africa Cases (Second Phase), 1962 ICJ Reports at p. 328, for this ground of the absence of jurisdiction. See the Nottebohm Case (Second Phase), 1955 ICJ Reports at pp. 12 and 26. In upholding the objection raised by the respondent based on the failure to meet the requirements of the nationality of claims rule on the part of the claimant state the ICJ declared the claim inadmissible (irrecevable).

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to waive the application of the rule. In Iran-United States Case No. A/18,20 where the issue of nationality of the individual claim was treated as related to the tribunal’s jurisdiction based on the express provisions or the instruments governing the tribunal (Article VII(l) and Article II of the Claims Settlement Declaration of 1981). The provision of Article II referring to the need for the claim to have the nationality of one of the parties was basic to the jurisdiction of the tribunal. The moral of this saga of the Iran-US Claims Tribunal is that the arbitral tribunal decides what are fundamental matters, and, therefore, which are matters of compétence, in terms of the particular compromise. It also decides what are matters of recevabilité, in terms of the particular Compromis. In this exercise a tribunal may decide in a given case on an interpretation of the Compromis that matters which would normally pertain to recevabilité have been endowed with fundamental characteristics, so that they have become in that instance matters of compétence. On the other hand, it is true that, in general, matters of standing (locus standi) are concerned with jurisdiction (compétence) and not receivability. Restrictions ratione temporis, to take another example, often could be matters of compétence or matters of recevabilité depending on how the governing instruments are framed in the given case.21 The second point is that there could be situations in which the question is answered by the tribunal by interpreting the governing instruments. Thirdly, because of the nature of compétence as a juridiction attribué, it is likely that there is a basic presumption of interpretation that what is regarded by the tribunal as a matter of fundamental importance in the light of the governing instruments or their interpretation will be treated as a matter of compétence rather than as a matter of recevabilité. The approach taken by the ICJ in the ILOAT Judgments Opinion in discussing the basic legal qualifications of the ILOAT to decide the merits of disputes22 would seem to indicate this conclusion. Compétence was, in effect, described in terms which related to the basic legal qualifications of a tribunal in a given situation to decide the merits of disputes. These considerations apply equally to arbitral tribunals as general principles.

20

21

22

(1984), 5 Iran-US CTR p. 251. On standing before the ICJ see Sonborn II, “Standing before the International Court of Justice: The Question of Palestinian Statehood Exemplifies the Inconsistencies of the Requirement of Statehood”, 7 Calif. WILJ (1977) p. 454. In the case of the WBAT statute, for instance, one restriction ratione temporis in Article II is a matter of compétence (see the restriction applied in Kavoukas and Parham, WBAT Reports (1981), Decision No. 3), while another relating to the time limits for the filing of applications is a matter of receivability. See 1954 ICJ Reports at p. 87.

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Time for Raising Issues of Compétence If, as has been pointed out above, absence of compétence cannot be cured, e.g., by default of the parties or of the tribunal, because compétence is a matter which is fundamental, then technically it would follow that (i) it is reasonable and in keeping with proper adjudicatory procedure and justice that issues as to compétence may be raised at any time and do not necessarily have to be raised at a particularly early stage in the proceedings, and (ii) unless the issues are in fact raised by the parties or by the tribunal and the parties are given an opportunity to address the issues, the issues can never become res judicata. An exception has to be made, however, where the doctrine of forum prorogatum is applicable, in which case unless the issue of lack of compétence is raised at the appropriate time and before the subsequent conduct giving rise to consent to compétence can take effect, the consent given by subsequent conduct would cure any defects in jurisdiction. Forum prorogatum has been applied as a source of consent to compétence hitherto only by the World Court. As pointed out, it has been denied any significance in regard to international arbitrations. Thus, in international arbitration, for all practical purposes there is no mandatory time limit for the filing of objections in relation to compétence, even if the procedures or rules of the tribunals require that such objections be filed at a particular time or before a certain point in the proceedings. Because of the fact that compétence cannot be pre-empted by a default, among other things, such procedural requirements relating to the filing of objections cannot result in the restoration of compétence to tribunals and are no more than rules provisionally to facilitate the conduct of proceedings by the tribunals. While the issue of the effect of provisions in the rules of procedure on the substantive content of compétence and its recognition has not been addressed or pronounced on by tribunals in general, with the exception of the World Court which by implication has done so by promulgating the effectiveness of forum prorogatum in relation to its own compétence in its judgments, logic and justice would require the solution proposed above. In the Rules of the Iran-US Claims Tribunal it is stated in Rule 21(3) that pleas as to jurisdiction must be raised no later than in the statement of defence, or in the reply to a counterclaim where applicable.23 In general this is probably the common practice in arbitral tribunals. It is clear that there are rules of procedure of tribunals that provide for the early submission of pleas on jurisdiction. However, as a matter of principle, a rule of procedure cannot affect or change the jurisdictional authority of

23

1 Iran-US CTR p. 78.

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the tribunal which is a matter of substantive law deriving from the relevant international legal sources of jurisdictional law. That is to say, these rules of procedure, while facilitating the orderly conduct of business, cannot by their strict application change the jurisdictional authority of the tribunal which is basic nor can they deprive the parties of the right to have the tribunal respect its own jurisdictional limitations.24

Sources of Jurisdiction Multiple Sources The source or sources of jurisdiction of an international tribunal are the instruments or other modalities through which the consent of the parties, whether direct, indirect, implied or imputed, is expressed.25 Generally these sources consist of, in the case of arbitration, the treaty or compromis instituting the arbitration. There is no formal or standard requirement for a source and sources may be sought in any place where they may be located. In fact there may be several sources from which may flow the jurisdictional authority of a tribunal and which may not only be multiple but be successive or possibly introduced at a later stage in the proceedings.26 Such matters have given rise to issues mainly before the ICJ. A word will be said here regarding multiple sources as such. The details and complexity of the situation arising from the invocation of several sources for jurisdiction have been discussed by the ICJ. However, the basic general principle which applies to multiple sources is the same for all tribunals and both it and its application were best explained by the PCIJ in the Electricity Company of Sofia Case: In its opinion, the multiplicity of agreements concluded accepting the compulsory jurisdiction is evidence that the contracting Parties intended to open up

24

25 26

Preliminary exceptions before the ICJ are discussed in Herczegh, “Exceptions préléminaires dans la pratique récente de la Cour internationale de Justice”, 5 Romanian JIL (1999) p. 214. Sources are sometimes referred to as “titles”. Multiplicity of sources has arisen before the PCIJ and ICJ: see, e.g., the Electricity Company of Sofia Case (1939), PCIJ Series A/B No. 77, the Corfu Channel Case, 1947–48 ICJ Reports p. 15. Successive sources have been addressed in the Barcelona Traction Company Case (Preliminary Objection), 1964 ICJ Reports p. 6, Temple of Preah Vihear Case (Preliminary Objection), 1961 ICJ Reports p. 17. There have been several cases before the ICJ in which additional titles introduced during the proceedings have been discussed: see, e.g., the Nicaragua Case (Jurisdiction and Admissibility) 1 1994 ICJ Reports p. 392, the Application of the Genocide Convention Case (Provisional Measures) 1993 ICJ Reports p. 3.

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Chapter Five new ways of access to the Court rather than to close old ways or to allow them to cancel each other out with the ultimate result that no jurisdiction would remain. In concluding the Treaty of conciliation, arbitration and judicial settlement, the object of Belgium and Bulgaria was to institute a very complete system of mutual obligations with a view to the pacific settlement of any disputes which might arise between them. There is, however, no justification for holding that in so doing they intended to weaken the obligations which they had previously entered into with a similar purpose, and especially where such obligations were more extensive than those ensuing from the Treaty. It follows that if, in a particular case, a dispute could not be referred to the Court under the Treaty, whereas it might be submitted to it under the declarations of Belgium and Bulgaria accepting as compulsory the jurisdiction of the Court, in accordance with Article 36 of the Statute, the Treaty cannot be adduced to prevent those declarations from exercising their effects and disputes from being thus submitted to the Court. It is necessary therefore in the first place to consider whether the objections raised by the Bulgarian Government to the jurisdiction of the Court under the Treaty are well-founded or not. Should they prove well-founded, the Court will then consider the objections raised by that Government under the declarations above mentioned. Only if both these sets of objections are alike held to be wellfounded will the Court decline to entertain the case.27

While there may be more than one source, sources are generally cumulative in effect and not exclusive, unless there is a contrary intention. Validity in Time A source of jurisdiction is effective from the date on which it enters into force until the date on which it ceases to be in force. When the source is a treaty or a written document, these dates will be determined, in case of uncertainty, by application of the general principles of interpretation or such instruments. The main problem that arises is when the proceedings have been instituted outside the two dates referred to above – the commencement date and the termination date – in regard to written instruments. The issue does not concern the mention in the treaty of specific dates before the commencement date and after the termination date which relates to a temporal factor in the content or scope of jurisdiction but a matter of the date of validity of the source of jurisdiction. There are circumstances in which it has been recognized that jurisdiction may exist where proceedings have been instituted before the source of jurisdiction becomes valid, i.e., when there is no indication within the source that the coverage of the instrument extends antecedently beyond the date of

27

(1939), PCIJ Series A/B No. 77 at p. 76.

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validity. The issue concerns a formal element ostensibly as contrasted with a matter of substance and it has been disposed of very practically by the PCIJ m the Mavrommatis Palestine Concessions Case ( Jurisdiction), where it was said that the Court, whose jurisdiction was international, was not bound to attach to matters of form the same degree of importance which they might possess in national systems of law and that, even if the application were premature because the Treaty of Lausanne had not yet been ratified, this circumstance would be covered by the subsequent deposit of the necessary ratifications.28 It will be observed that, while the Court mentioned the existence of the source of jurisdiction, the Treaty of Lausanne, and the treaty had been signed, thus having an inchoate validity, so to speak, the Court did not place much emphasis on this fact. What it did focus on was the fact that the institution of proceedings had taken place before the coming into force of the source of jurisdiction. It would, thus, hardly seem to be of significance that there was an inchoate validity of some kind of the source, the important feature being that the institution of proceedings took place at a time when the source of jurisdiction was not applicable because the international obligation relating to dispute settlement “was not yet effective” (il n’était pas encore en vigeur) with the result that at the time of institution of the proceedings the Court had no jurisdiction (la jurisdiction de Court n’existait pas). Thus, the principle that would seem to emerge is that, whenever proceedings before an international tribunal are instituted before the operative source of jurisdiction is effective, any defect that may exist because the institution of proceedings is premature, which would be fatal, if the defect were not cured by the time the case is taken up for adjudication, will not cause the failure of jurisdictional authority, if the defect in the validity of the source is “covered” (couvert) by subsequent events which give the source the necessary validity before the case is taken up for adjudication. This is, of course, subject to an express contrary indication in the source. Termination of Validity The general principle applied by the ICJ and applicable to the jurisdiction of arbitral tribunals as well is that the termination of the source of jurisdiction is effective for the future and makes invalid proceedings not instituted before the effective date of the termination. In the Northern Cameroons Case, where the source of jurisdiction, the Trusteeship Agreement, was terminated on 1 June 1961, the ICJ said that “Article 19 of the Agreement which provided

28

(1924), PCIJ Series A No. 2 at p. 34.

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for the jurisdiction of the Court . . ., was terminated with all other Articles of the Agreement, so that after 1 June 1961 it could not be invoked as a basis for the Court’s jurisdiction”.29 The statement clearly refers to the date of the institution of proceedings and not, for example, to the date of the events giving rise to the dispute. The two complementary aspects of the principle may be reflected in the propositions that (i) reliance cannot be placed on a source of jurisdiction that has terminated before the proceedings are instituted and is no longer in force,30 and (ii) where proceedings relying on a source of jurisdiction are instituted before the validity of that source of jurisdiction terminates, the continuation of the proceedings so instituted is not affected by the termination of validity of the source of jurisdiction.31

Scope of Primary Jurisdiction Often the extent of jurisdiction and the limits on such jurisdiction under the instruments granting jurisdiction has been the subject of dispute. Needless to say, the answers in such situations generally depend on the interpretation of the instruments granting jurisdiction. Some examples of the delineation of jurisdiction in arbitration may be considered. In an early twentieth century arbitration the tribunal held that what it was authorized to do was to settle the dispute by deciding according to law, the functions of the tribunal being strictly judicial,32 while in another of the same period the tribunal asserted that within the limits of the Compromis (the protocol) its powers were wide, but outside those limits it had no powers at all.33 In an arbitration between the UK and the USA the tribunal made it quite clear that its function under the Compromis was “not to lay down new rules” but to apply “the principles of international law, applicable to maritime warfare, existing in 1898”, which were “sufficient to enable it to

29 30 31

32 33

1963 ICJ Reports at p. 35. (1936), PCIJ Series A/B No. 66 at p. 5. Nottebohm Case (Preliminary Objection), 1953 ICJ Reports at pp. 122–3. In several other cases before both the PCIJ and the ICJ the situation was comparable: (see the Losinger Case (1936), PCIJ Series A/B No. 67, the Phosphates in Morocco Case (1938), PCIJ Series A/B No. 74, the Anglo-Iranian Oil Co. Case (Preliminary Objection), 1957 ICJ reports at p. 142, the Nuclear Tests Cases, 1974 ICJ Reports at pp. 253, 457, the Nicaragua Case (Merits), 1986 ICJ Reports at p. 28). On termination of validity in general see C.F. Amerasinghe, op. cit. note 6 pp. 280 ff. Kummerow et al. Case (1903, Germany v. Venezuela), 10 UNRIAA at p. 399. French Co. of Venezuela Railroads Case (1905, France v. Venezuela), 10 UNRIAA at p. 348.

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decide this case”.34 In an arbitration between France and Poland the tribunal held that it had compétence to interpret the relevant convention granting it jurisdiction and not merely apply it.35 Tribunals have held that they had authority under their respective governing instruments to establish rules of procedure for the instant arbitration,36 to provide for the “alternating modification and suspension” of a regime where it was given the power to establish a regime,37 and to include in the adjudication consideration of a detention of an individual which was not specifically mentioned in the Compromis but which, as neither of the parties had objected could be regarded as within the compétence of the tribunal.38 In a more recent case, where the issue was whether the doctrine of perpetuatio fori applied so that the tribunal’s jurisdiction was not excluded, it held that there was no conflict of jurisdictions at the time the proceedings took place because the competing tribunal had not been established at the time of the constitution of the present one.39 In another the tribunal held that interpreting domestic law where needed was within its jurisdiction.40 In two important cases the Iran-US Claims Tribunal made it quite clear that it had no jurisdiction beyond that conferred upon it by the “declarations” of the two states parties establishing the tribunal and that these instruments had to be interpreted in the context of the situation in a given case.41 In another case the same tribunal held that it had jurisdiction under its constitutive instruments to adjudicate on claims arising out of measures affecting “property” rights. Consequently, while it did not have jurisdiction over pure personal injury claims it did have jurisdiction over tortious acts such as expulsion which affected property rights.42

34

35 36

37 38 39 40

41

42

The Eastern Extension, Australasia and China Telegraph Co., Ltd. Case (1903), 6 UNRIAA at p. 118. The Compagnie d’electricite de Varsovie Case (Jurisdiction) (1929), 3 UNRIAA p. 1675. The Compagnie d’electricite de Varsovie Case (Interlocutory Award) (1932, France v. Poland), 3 UNRIAA at p. 1682. The Trail Smelter Arbitration (1941, Canada v. USA), 3 UNRIAA at p. 1973. The Chevreau Case (1931, France v. UK), UNRIAA at p. 1674. The Swiss Confederation v. FRG (No. 1) (1958) 25 ILR pp. 54–5. The Springer Case (1966, Arbitral Commission on Property, Rights and Interests in Germany), 9 Entscheidungen at p. 128. Iran-United States, Case No. A/1 (1982), 1 Iran-US CTR at p. 152; the T.C.S.B Case (1982), 1 ibid. at p. 266. The Yeager Case (1987), 17 ibid. at pp. 98 ff. On lack of jurisdiction of the tribunal over personal injury claims proper, see, e.g., the Lillian Byrdine Grimm Case (1983), 2 ibid. p. 78, the International Systems and Control Corp. Case (1986), 12 ibid. p. 239. An express exclusion in the governing instrument gave the tribunal no jurisdiction over a claim related to the seizure of particular US nationals: see the K. Haji-Bagherpour Case (1983), 2 ibid. p. 38.

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The Iran-US Claims Tribunal also faced in connection with establishing its compétence the task of interpreting and applying a jurisdictional provision of the governing instruments which required that the respondent be one of the two governments involved, namely the USA or Iran, and defined references to the two governments as meaning the government, any political subdivision, and any agency, instrumentality, or entity controlled by the government or any political subdivision (Article VII(3) and (4)). In response to a request by Iran the tribunal first held in Cases Nos. A1 and A2, The Islamic Republic Iran v. the United Stares,43 that the tribunal had no jurisdiction over claims by Iran against US nationals as such. The tribunal said that the General Declaration did not confer jurisdiction independently of the Claims Settlement Declaration, which was clear and limiting. The tribunal’s jurisprudence in regard to the issue of “control” referred to above is discussed in Chapter 10 below. In the cases on the subject decided by it the tribunal established the limits of its jurisdiction ratione personae under the governing instruments by interpreting them. Jurisdiction may also have to be established ratione materiae44 and ratione temporis. In connection with the remedies that may be granted, arbitral tribunals have examined and pronounced on their jurisdictional authority. In the Karl Wisser Case the tribunal explicitly rejected the proposition that it had jurisdiction to make a recommendation of an ex gratia payment to one party by the other.45 In the arbitration between Germany and Portugal on the Responsibility for Acts of Germany Committed Subsequent to July 31, 1914, and before Portugal Entered the War the tribunal concluded that it had power to award an indemnity for “préjudice matériel ni même moral ” but not to inflict a sanction by way of retribution which would be a “pouvoir repressif ”.46 In the Knickerbocker Insurance Company of New York Case the tribunal made it clear that it had been given exclusive and final jurisdiction in respect of the original claimant’s right to recover but that it had no jurisdiction to decide 43

44

45

46

(1982), 1 ibid. p. 101. On the tribunal’s jurisdiction in this respect see also Avanessian, Iran-United States Claims Tribunal in Action (1993) passim. For other claims included and excluded as such from the tribunal’s jurisdiction and thus establishing limits to it see ibid. p. 79 ff and passim; Aldrich, Jurisprudence of the Iran-United States Claims Tribunal (1996), pp. 44 ff; and Brower and Brueschke, The Iran-United States Claims Tribunal (1998) pp. 88 ff. Questions relating to jurisdiction ratione materiae have arisen before other kinds of tribunals: see, e.g., the Tadić Case, ICTY: Judicial Reports 1994–1995 at pp. 423 ff. See also ibid. at p. 505 on the issue of what law the tribunal had to apply. (1961, Austro-German Arbitral Tribunal), unpublished but excerpted in CoussiratCoustère and Eiseman, 3 Repertory of International Arbitral Jurisprudence (1991) p. 1419. (1930), 2 UNRIAA at pp. 1076–7.

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controversies over the asserted right to receive payment of certain successor and derivative claimants.47 Apart from decisions which determined by interpreting the governing instruments the scope or jurisdiction of a tribunal, there are those decisions which examine the factual situation and apply the provisions of the jurisdictional instruments to them. For example, in the Bluefin Tuna Arbitration the tribunal both interpreted a 1993 Convention which the parties to the arbitration had ratified and the UNCLOS and examined the facts in order to ascertain whether the facts satisfied the conditions required by their interpretation of the two conventions for the instant tribunal not having jurisdiction. The tribunal concluded that the provisions of the 1993 Convention (Article 16) “exclude(s) any further procedure” within the contemplation of Article 281(1) of the UNCLOS and also that the facts of the situation did trigger the exclusion of any such further procedure.48

Fundamental Limitations on the Scope of Primary Jurisdiction The existence of certain limitations on jurisdiction arising from such matters as mootness or the absence of a dispute has been mentioned earlier in this chapter. While the matter has not been discussed in specie by tribunals, it is possible, indeed, likely, that there are some principles relating to jurisdiction which are so fundamental that even consent between or among the parties to the dispute or explicit provisions in the governing instrument do not have a countervailing effect. The first question is whether it is correct to acknowledge the existence of unchangeable fundamental principles, i.e., virtually a ius cogens, relating to certain limitations on the jurisdiction of international tribunals in general. The second endeavour is to identify these principles as far as possible or at least give some indication of what they may be. As far as ius cogens is concerned, it is difficult not to recognize that, for example, the principle that there must be a dispute or the matter before the tribunal must not be moot, thus making an adjudication without purpose, is fundamental. It would seem that such principles as those mentioned above are so fundamental to the proper and just exercise of the judicial function that it is impossible to conceive of a judicial body not only not being permitted to

47

48

(1928, Germany v. USA), 8 UNRIAA at p. 49. On jurisdiction to grant remedies see further Chapter 8 below. (2000, Australia and New Zealand v. Japan), 39 ILM at pp. 1388 ff. ITLOS was confronted with a situation relating to the facts in the Saiga Case (1998), 37 ILM at pp. 292 ff.

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apply them but having to do other than to apply them in making an initial determination that it has jurisdiction to proceed with the adjudication at all. The crux of the problem really is whether these principles may be altered by the consent of the parties, in addition to there being a compelling effect as a result of their fundamental character. Thus, if a matter brought before the tribunal is moot, it would be without purpose to adjudicate on it. If the tribunal finds that this is so, even if there is agreement between or among the parties that the adjudication should proceed, for example, because they would like to have a declaration of the law for future reference, would the tribunal be bound to recognize and give effect to that agreement and not refrain from exercising its jurisdiction which it would otherwise refrain from doing? The answer seems ineluctable that it does not make sense to concede that the agreement must be given effect to, that the tribunal must refrain from applying the limitation on its jurisdiction and that the principle is, therefore, not so fundamental as to be ius cogens. The point is that principles such as this one are so inherently basic to the appropriate and just exercise of the judicial function that they must always be at the disposal of tribunals to apply. In any event, it is to be expected that in keeping with general principles of interpretation, tribunals will interpret their governing instruments in such a way as to conform to such basic principles. A more difficult question is what are these fundamental principles. The Need for a Dispute which is Legal The first principle that may be identified relates to the requirement that there be a dispute and the second principle refers to the related requirement that the dispute be legal. The two principles are associated. Both principles have been extensively applied by the World Court.49 There is no reason to suppose that international arbitral tribunals will not apply them. The Requirement of an Interest A third unalterable principle is that the claimant party must have an interest recognized by law in the subject-matter of the dispute. In the South-West Africa Cases (Second Phase) the ICJ applied this principle in coming to the conclusion that “the Applicants cannot be considered to have established any legal right or interest appertaining to them in the subject matter of the pres-

49

See the discussion in C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) pp. 44 ff; C.F. Amerasinghe, op. cit. note 6 pp. 224 ff. The requirement of a dispute of a legal nature has been discussed and accepted in ICSID cases: see C.F. Amerasinghe, ibid. p. 455, footnote 68, and pp. 459–60.

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ent claims . . .,”50 the subject matter of the claim being related to the mandate that South Africa had had over South West Africa, even though the claimants had been members of the LN which established the mandate. The Court was careful to distinguish between a general interest which lay behind an actio popularis and could not be recognized and a particular interest which could. The claimant must, it is clear, be able to show some involvement giving rise to a direct interest in the subject-matter of the claim and that it is not merely an academic party to the dispute, even if that involvement does not entail the protection of its own legal rights. There is no better defined description of a “legal interest” in international jurisprudence than that given above, though there is, apparently, a distinction between legal rights and legal interests. The principle, as discussed above, is applicable to arbitral tribunals. Mootness or Absence of Object Mootness or absence of object in adjudication is another fundamental reason for a tribunal’s not assuming jurisdiction in a particular case. In both the Nuclear Tests Cases51 and the Northern Cameroons Case52 the ICJ held that it could not proceed with the merits of the case because the issues raised were moot and there was no purpose served by doing so. In the former two cases the claimants in effect requested the Court to find that the carrying out of the nuclear tests in the South Pacific Region giving rise to radioactive fallout was a violation of international law. After the filing of the applications the respondent by unilateral declaration undertook not to carry out atmospheric nuclear tests in the South Pacific Ocean. Even though in both cases only a declaratory judgment was sought, because the Court found that the dispute had ceased to exist by the time it was ready to give its decision as a result of the unilateral declaration made by the respondent, so that the object of the claim had been achieved by other means, it decided that no further judicial action was required. In the latter case the claimant sought a declaration that the respondent as mandatory was in breach of the Trusteeship Agreement for the Cameroons under British Administration. The respondent raised the issue that at the time the case was taken up there was no dispute and that the claim was without object. After the filing of the application the Trusteeship Agreement came to an end. The Court held that the case was moot and devoid of object because of the latter fact. It made it clear that even though only a declaratory

50 51

52

1966 ICJ Reports at p. 51. 1974 ICJ Reports at pp. 253 and 457. See Ruiz, “Mootness in International Adjudication: the Nuclear Tests Cases”, 20 German YBIL (1977) p. 358. 1963 ICJ Reports at p. 15.

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judgment was requested adjudication on the merits would be inconsistent with the judicial function.53 The principle enunciated and explained by the ICJ is applicable to other tribunals as well. Although the Court may have regarded the matter as one involving its discretion to adjudicate on the merits,54 the issue is properly regarded as a fundamental aspect of compétence. Ascertainment of mootness depends on the circumstances of the case. Factors such as the nature of the remedy requested and its relationship to the change in circumstances, the changed circumstances themselves and considerations of practicality undoubtedly are relevant. In the ultimate analysis a finding of mootness or absence of purpose involves an exercise of judgment. However, this does not mean that once the determination of mootness or absence of purpose is made there needs to be a discretion vested in the Court as to whether it should proceed to examine the merits. Once such a determination is made the Court has no alternative but not to exercise its jurisdiction to adjudicate on the merits. Constitution of the Tribunal A relevant defect in the constitution of the tribunal would prevent the tribunal from having compétence. It is another reason of a fundamental nature for a tribunal’s not assuming jurisdiction. That a tribunal must be properly and legally constituted for a tribunal to have compétence is, thus, a principle of ius cogens. The locus classicus for this principle is an international criminal case.55 The principle is undoubtedly applicable to international arbitral tribunals. There have been a few arbitrations in which the status of arbitrators and, thus, the constitution of the tribunal have been questioned before arbitral tribunals but without success. The grounds on which such status has been questioned generally related to prejudice, conflict of interest or related factors.56

53

54

55

56

See for the Court’s explanation, ibid. at pp. 37 ff. In the Border and Transborder Armed Actions Case, 1990 ICJ Reports at p. 95, the Court stated that “subsequent events may render an application without object”. But subsequent events, even though the facts and situation may have changed, may not necessarily make an application moot. That the decision of the case will be without object must be clearly established for the Court’s jurisdiction not to exist: the Arrest Warrant of 11 April 2000 Case (2002), , paras. 29–32. Ibid. at pp. 37, 38. Some writers regard mootness as a ground for the exercise of a discretion: see Rosenne, 2 The Law and Practice of International Court, 1920–1996 (1996) pp. 546 ff. Tadić (1995), ICTY: Judicial Reports 1994–1995 p. 353. See the discussion in C.F. Amerasinghe, op. cit. note 6 pp. 178 ff. See, e.g., the Charles J. Jansen Case (USA v. Mexico, 1876), 3 Moore, History and Digest (1898) p. 2902, Decision No. 21 (France v. Mexico, 1929), 5 UNRIAA p. 511, French-Tunisian Arbitral Council Case (France v. Tunisia, 1957), 12 UNRIAA p. 277, the Meta Bengston

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On the whole, the constitution of arbitral tribunals has rarely been contested before such tribunals. The Rule in the Monetary Gold Case The rule in the Monetary Gold Case 57 also lays down a principle that is fundamental to the exercise of jurisdiction by an international tribunal. In that case both Italy and Albania had claims to the gold in question and the issue contested was whether either of those claims, and if so which, had priority over the British claim to the gold which was made in order to satisfy the judgment in another case. Italy claimed priority over Albania. Albania was not party to the proceedings in the case. The Court took the view that in order to decide the issue raised it was necessary to determine whether certain Albanian legislation of 1945 was contrary to international law. In the determination of that question, only Albania and Italy were interested. The Court said that to go into the merits of such questions would be to decide a dispute between Italy and Albania and that the Court cannot decide such a dispute without the consent of Albania. But it is not contended by any Party that Albania has given her consent in this case either expressly or by implication. To adjudicate upon the international responsibility of Albania without her consent would run counter to a well-established principle of international law embodied in the Court’s Statute, namely, that the Court can only exercise jurisdiction over a State with its consent. ... Albania has not submitted a request to the Court to be permitted to intervene. In the present case, Albania’s legal interests would not only be affected by a decision, but would form the very subject-matter of the decision. In such a case, the Statute cannot be regarded, by implication, as authorizing proceedings to be continued in the absence of Albania. ... Where, as in the present case, the vital issue to be settled concerns the international responsibility of a third State, the Court cannot, without the consent of that third State, give a decision on that issue binding upon any State, either the third State, or any of the parties before it.58

The Court accordingly found that the jurisdiction conferred upon it in that case could not, in the absence of consent by Albania, be exercised in respect

57

58

Case (Arbitral Commission on Property, Rights and Interests in Germany, 1959), 2 Entscheidungen p. 216. A similar issue arose in the Losinger and Cie. S.A. Case (1935), reported in PCIJ Series C, No. 78 p. 105, which was, however, a transnational and not an international arbitration. 1954 ICJ Reports at p. 19. Because the rule and its limitations are so fundamental the approach of the ICJ is discussed here. Ibid. at pp. 32 ff.

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of that Italian submission, that is, that it was not authorized to adjudicate upon that submission. On a second issue which involved the question of priority as between Italy and the United Kingdom to receive the gold, the Court again asked whether it could adjudicate on that claim. It pointed out that this claim, unlike the first, might seem to concern only Italy and the United Kingdom, both of which had accepted the jurisdiction of the Court. However, according to the jurisdictional instruments the issue of priority between Italy and the United Kingdom would only arise when it had been decided that, as between Italy and Albania, the gold belonged to Albania. The Court found, therefore, that the second Italian claim was dependent on the first, and that, because it could not adjudicate on the first Italian claim, it had to refrain from examining the question of priority. The Court held that it could not adjudicate on the second submission. The Court faced a similar situation in the East Timor Case 59 and applied the same rule. The Court has also clarified the limits of the rule in the Monetary Gold Case. In the Nicaragua Case ( Jurisdiction and Admissibility) it was argued by the respondent that the application was inadmissible as Nicaragua had failed to bring before the Court parties whose presence and participation was necessary. Dismissing that contention, the Court said: There is no doubt that in appropriate circumstances the Court will decline . . . to exercise the jurisdiction conferred upon it where the legal interests of a State not party to the proceedings “would not only be affected by a decision, but would form the very subject-matter of the decision”. . . . Where however claims of a legal nature are made by an Applicant against a Respondent in proceedings before the Court, and made the subject of submissions, the Court has in principle merely to decide upon those submissions, with binding force for the parties only, and no other State, in accordance with Article 59 of the Statute. As the Court has already indicated, other States which consider that they may be affected are free to institute separate proceedings, or to employ the procedure of intervention. There is no trace, either in the Statute or in the practice of international tribunals, of an “indispensable parties” rule of the kind argued for by the United States, which would only be conceivable in parallel to a power, which the Court does not possess, to direct that a third State be made a party to the

59

1995 ICJ Reports p. 90. See Sybesma-Knol, “The Indispensable Parties Rule in the East Timor Case”, in Reflections on International Law from the Low Countries in Honour of Paul de Waart (1998) p. 442. Torres Bernárdez, “The New Theory of “Indispensable Parties” under the Statute of the International Court of Justice”, in Wellens (ed.), International Law (1998) p. 737. See also the fuller discussion of this case in C.F. Amerasinghe, op. cit. note 6 pp. 232 ff.

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proceedings. The circumstances of the Monetary Gold case probably represent the limit of the power of the Court to refuse to exercise its jurisdiction . . .”60

The Court has recognized the limitations on the rule in other cases. For instance, in cases of delimitation of land frontiers, it has refused to see in the existence of a tribunal with a third state a reason for not proceeding to the determination of the frontier between the two states properly before it.61 This would not prejudice the position of that third state as regards the tripoint and its relations with the other two States. The judgment would not bind the third state.62 Such limitations on the rule were recognized in an international arbitration relating to frontiers.63 In connection with a dispute relating to the administration of a Trusteeship Agreement for which there were technically three administering authorities, one of which was the “active” partner – the Phosphate Lands in Nauru Case – the Court refused to see in the absence from the case of the other two administering authorities a ground for it not to exercise jurisdiction, while recognizing that the absence of those two states might have an influence on the responsibility of the respondent, a matter for the merits.64 The existence of the rule in the Monetary Gold Case as a principle of the general international law of jurisdiction seems not to be in doubt. It does not apply, as was said in the Phosphate Lands in Nauru Case, when “the legal interests of the third state which may possibly be affected do not form the very subject matter of the decision” which would result if the merits were

60 61

62

63 64

1984 ICJ Reports at p. 431. See the Frontier Dispute Case, 1986 ICJ Reports at p. 576, and the Chad/Libya Territorial Dispute Case, 1984 ICJ Reports at p. 33. See also, apart from the cases cited in the previous footnote, the North Sea Continental Shelf Cases, 1969 ICJ Reports p. 3, the Gulf of Maine Case, 1984 ICJ Reports p. 246, and the Jan Mayen Case, 1993 ICJ Reports p. 38, where this was regarded as the correct position. The Anglo-French Continental Shelf Arbitration (1977), 18 UNRIAA p. 3. The Court said: A State, however, which is not a party to a case is free to apply for permission to intervene in accordance with Article 62 of the Statute . . . But the absence of such a request in no way precludes the Court from adjudicating upon the claims submitted to it, provided that the legal interests of the third State which may possibly be affected do not form the very subject-matter of the decision that is applied for. . . . In the present case, a finding by the Court regarding the existence or the content of the responsibility attributed to Australia by Nauru might well have implications for the legal situation of the two other states concerned, but no finding in respect of that legal situation will be needed as a basis for the Court’s decision on Nauru’s claims against Australia. Accordingly, the Court cannot decline to exercise its jurisdiction. 1992 ICJ Reports at pp. 260 ff.

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adjudicated upon. Where this is not the case, the Court has jurisdiction to decide the merits of the case between the parties to the proceedings. There has been some controversy on the nature of the rule in the Monetary Gold Case, as defined and delimited by the Court. The view has been expressed that it is a matter of the discretion of the Court that the rule reflects and that it is not a rule defining jurisdiction. The Court used ambiguous language in that it referred to not being authorized to adjudicate, not being able to adjudicate, not being able to exercise its jurisdiction and being precluded from adjudicating upon claims without using the expression that it had no jurisdiction. There were also assertions by judges of the Court in individual opinions that the rule reflected a discretion. In spite of this, the better view is that the rule states a distinct limit on jurisdiction, and a fundamental one at that, which must be applied when the appropriate circumstances are present, leaving no room for a discretionary decision not to apply it.65 This position does not entail rejecting the limits placed upon the scope of the rule by the Court. The rule, though developed and applied by the ICJ, should be of general application, where it is relevant. Clearly, the rule would be applied by international arbitral tribunals. It would appear, however, that, while the basis in consent of the rule is clear, it is still open to discussion what are the exact limits of the rule. Conclusion The discussion above shows that there are, indeed, certain principles which are important and fundamental enough to be regarded as ius cogens in relation to compétence. The jurisprudence of international tribunals has dealt with these principles that have been discussed above and they certainly qualify to be regarded as ius cogens, as has been argued. On the other hand, there may be other such principles which have not been encountered in international jurisprudence which would also qualify.

Exercise of Jurisdiction and Discretion In the discussion of limitations of a fundamental nature on jurisdiction in the previous section it emerged that some matters, such as mootness, which result in a tribunal not exercising its jurisdiction have sometimes been linked

65

L. Gross, “Limitations on the Judicial Function”, 58 AJIL (1964) at p. 424, agrees with this view.

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to a tribunal’s discretion not to exercise its jurisdiction on grounds such as propriety. In spite of the language used in judgments, principally of the ICJ, the better view is that the two instances where this association has up to now been made, namely mootness or absence of object or purpose and the rule in the Monetary Gold Case, represent instances of fundamental limitations on jurisdiction which are peremptory rather than involving the exercise of discretion on the part of a tribunal. The reasons, basically connected with the nature of the judicial function, for the respect shown by tribunals for those limitations point to peremptory exclusions from a jurisdiction a court might otherwise have rather than to the exercise of a discretionary authority. There is a question which remains, however, namely whether, where a tribunal has jurisdiction (compétence) it may choose not to exercise it on the basis of an exercise of a discretion, however much the discretion is less than absolute and subject to measures of control of some kind. Only the two examples mentioned above have been used as a basis for postulating the existence of such a discretion. These have been explained as not being cases of discretion. In contentious cases at any rate the recognition of a discretion in regard to jurisdiction, as suggested by some, would tend to weaken the adjudicatory authority of judicial tribunals insofar as such authority would come to be regarded as not based on compelling grounds once jurisdiction is vested in them but controlled by an element of choice which leaves adjudication as an instrument for dispute settlement in a state of uncertainty. It makes no difference that the jurisdiction is international and not national and is basically consensual. The recognition of a discretion in this regard weakens the credibility and efficacy of a dispute settlement system based on adjudicatory methods and would detract from its character which distinguishes it from other modes of dispute settlement.

Proof of Jurisdiction While jurisdictional authority cannot be pre-empted and courts not only may but must, when necessary, raise issues of jurisdiction proprio motu, as pointed out earlier, an important question is whether a burden of proof exists and who bears it. The issue has been addressed by the ICJ and the conclusion reached is categorical. There is strictly no burden of proof. The principle is that the tribunal examines all the evidence and reaches the appropriate conclusion. In the Fisheries Jurisdiction Case the parties took different positions on who bore the burden of proof in regard to jurisdiction, both claiming that one or the other had a burden of proof in regard to various aspects. The Court unequivocally stated:

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Chapter Five 36. As Spain sees it, Canada has in principle accepted the jurisdiction of the Court through its declaration under Article 36, paragraph 2, of the Statute, and it is for Canada to show that the reservation contained in paragraph 2 (d ) thereto does not exempt the dispute between the Parties from this jurisdiction. Canada, for its part, asserts that Spain must bear the burden of this showing why the clear words of paragraph 2 (d ) do not withhold this matter from the jurisdiction of the Court. 37. The Court points out that the establishment or otherwise of jurisdiction is not a matter for the parties but for the Court itself. Although a party seeking to assert a fact must bear the burden of proving it . . ., this has no relevance for the establishment of the Court’s jurisdiction, which is a “question of law, to be resolved in the light of the relevant facts”. . . . 38. That being so, there is no burden of proof to be discharged in the matter of jurisdiction. Rather, it is for the Court to determine from all the facts and taking into account all the arguments advanced by the Parties, “whether the force of the arguments militating in favour of jurisdiction is preponderant, and to ‘ascertain whether an intention on the part of the Parties exists to confer jurisdiction upon it’ . . .66

There can be no doubt that this principle applies to the burden of proof in jurisdictional matters in any kind of international tribunal, including arbitral tribunals. Jurisdiction or compétence is a matter of law not of fact as such. Moreover, it is to be noted that the Court’s statement assumes that even in regard to the facts relevant to the issue of jurisdiction there is strictly no allocation of the burden of proof, insofar as it said that it makes its determination “from all the facts”. The assumption is that the parties must produce whatever evidence they have relevant to the issue. The tribunal then determines whether it has jurisdiction. Further, because jurisdiction may not be pre-empted but must exist, what a tribunal decides is whether it has jurisdiction (compétence) not whether it does not have jurisdiction.

66

1998 ICJ Reports at pp. 450–51. On this case see, e.g., “The Fisheries Jurisdiction Case (Spain v. Canada): Judgment on Jurisdiction of 4 December 1998”, 48 ICLQ (1999) p. 664.

Chapter Six Inadmissibility Admissibility of applications must be distinguished from questions relating to compétence (competence). In a given case a tribunal may have compétence to proceed with the merits, but may not be able to do so because of defects in or connected with the application which render it inadmissible (irrecevable). Conversely and strictly, though an application may not be rejected on the ground of inadmissibility the tribunal may be without competence to proceed to deal with the merits. As examples may be taken, for competence, the claim that there is no legal dispute or that the matter is one for domestic jurisdiction or that the issue in the application is moot, which would if established render the tribunal without competence to proceed with the merits; for admissibility in an appropriate case the claim that the rule of nationality of claims has not been satisfied or that local remedies had not been exhausted. The distinction between compétence (jurisdiction) and admissibility may not always be observed, especially in pleadings. The distinction is, however, of importance and has validity in the context of the exercise of jurisdiction by international tribunals.1 An important consequence of the distinction is that in a case, where a tribunal has no compétence in a dispute, the defect cannot be cured in relation to that particular dispute as framed and presented to the tribunal, given the governing instruments concerned, while in a case where the matter is inadmissible, it is possible that the defect may be cured, especially if the defect is of a procedural nature. Thus, the application may be successfully brought before the tribunal at a later date once the defect is cured. For example, absence of justiciability or “legality” in a dispute would, because it relates to competence, not be curable and the dispute as framed would always remain outside the jurisdiction of the tribunal. On the other hand, failure to exhaust

1

For the approach of the ICJ to this question see C.F. Amerasinghe, Jurisdiction of International Tribunals (2003).

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local remedies relates to admissibility and, though the application may be declared inadmissible because there was such failure, if and when local remedies have been exhausted, the application could be declared admissible and the merits decided. Similarly, where a procedural defect renders the application inadmissible, it would be admissible once the appropriate procedure is followed. A second consequence of the distinction is that failure to raise a question of admissibility (recevabilité) at the appropriate time before the merits are taken up will result in a waiver of the right to rely on the objection based on inadmissibility. This issue has rarely been addressed by international tribunals, though the matter has arisen in connection with the rule of local remedies particularly. Waiver does not occur in the case of objections to competence, particularly where the objection is not raised in time, as was seen in the previous chapter.2 Further, the issue does not hinge on whether the rules of the tribunal indicate when preliminary objections should be raised. While such rules will have the effect of implementing for the purposes of proceedings before the specific tribunal the rule that objections to admissibility must be raised before the merits stage, they cannot as such take away the rights of the parties to rely on the doctrine of waiver, if objections to admissibility are not raised in time. The significance, meaning and consequences of the application of the waiver principle will emerge particularly in the discussion of the objection based on the rule of local remedies. What is eminently clear, however, is that tribunals will not hesitate to regard as waived the right to rely on an objection to admissibility where the objection is not raised in time during the proceedings. It goes without saying that such waiver may take place also by express or implied consent to such waiver at any relevant stage before or during the proceedings by the party who may rely on the objection to admissibility. It should also follow that while a unilateral waiver will be effective, whatever the form, in the case of objections to admissibility, where conditions relating to jurisdiction are so changed that an objection to jurisdiction may not be relied on, the changes will have to be achieved through the agreement of all the parties before the proceedings are commenced so that the jurisdiction of the tribunal is clearly established. As seen in the previous chapter, 2

The PCIJ had explicitly addressed this question in the Minority Schools Case (1928), PCIJ Series A No. 15 at pp. 22, 23, where it took the view that objections to compétence may be raised at any stage in the proceedings and they are not subject to the doctrine of waiver. Conversely, matters of admissibility, if not raised before the merits are taken up, will be regarded as subject to the doctrine of waiver.

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such changes, even if agreed upon by all the parties, are not effective, if made after the commencement of proceedings. The decision of a tribunal on admissibility wil1 be res judicata to the extent that the matter was raised and a conclusion was reached upon it. The finding of admissibility or inadmissibility will not only be binding, as a decision of the tribunal, but it will determine the issue finally. However, in the event that the finding is one of inadmissibility, this will not affect the ability of the claimant to file a different claim on the facts, which again may or may not be admissible depending on the circumstances, or to file the same claim after the cause of inadmissibility has been removed, if this were possible. The res judicata, in other words, is not the merits of the case but the matter of admissibility. The merits still remain open for consideration. Moreover, the issue of admissibility may be canvassed again, if the facts surrounding such issue have changed.

Grounds for Inadmissibility A claim’s inadmissibility depends on the grounds, which may vary from case to case and which are available, for declaring the claim inadmissible. Two very important grounds for inadmissibility are to be found in connection with claims in respect of individuals in regard to diplomatic protection whether the individuals themselves are the claimants in the case before the tribunal or a state claims before the tribunal in respect of injuries to such individuals. Both these grounds for inadmissibility in general international law will be considered in particular later in this chapter. It may be pointed out that, as will be seen in Chapter 10, two grounds for inadmissibility relate to the failure to state a cognizable claim and to the fact that the claims concern political or non-justifiable questions. Matters ratione personae are generally not questions of admissibility. As a rule these matters concern competence.3 On the other hand, this issue of competence ratione personae is not to be confused with matters relating to persons who have substantive rights or obligations in various situations. These are matters of substance which properly must be treated as questions for the merits. Thus, before the Iran-US Claims Tribunal, issues concerning

3

See C.F. Amerasinghe, op. cit. note 1 pp. 25–7, for reference to the ICJ and ITLOS.

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beneficial ownership,4 assignees,5 inheritors6 and the like have arisen. These are matters for the merits concerning the substance of the claim because the issue is who has the substantive right, and have been treated by the tribunal as such, though sometimes it has regarded the matters as concerning admissibility.7 Issues of compétence or admissibility ratione personae are clearly distinguishable from the issue of substance about who has the rights in issue.8 On the other hand, the matter of nationality of a person, natural or legal, in a claim brought in the exercise of state’s right to protect its nationals is generally a subject concerning admissibility. This is how the matter has been regarded in the law of diplomatic protection. However, in a given situation the question of nationality may be made a matter of compétence rather than admissibility by agreement between the parties, because they regard it as a fundamental consideration for the adjudication. This seems to be the position under the constitutive instruments of the Iran-US Claims Tribunal, as pointed out in Chapters 5 and 10. This may be so, though the law applicable to the determination of the nationality of the claim for the purposes of compétence of the tribunal may be the same as for the purposes of admissibility in the law of diplomatic protection in general. This points to the conclusion that matters which are usually matters of admissibility may in the circumstances of the case become matters of competence. The criterion of whether this is so is whether the agreement of the parties reflected in the constitutive instruments of the tribunal has resulted in a change in what is the usual position. Two matters of admissibility have become associated with international litigation as it has developed. These are examined here in some detail. In the case of international disputes arising from injuries to persons, natural or juridical, there are two principles relating to admissibility which are of particular importance. The first is the principle, which is one of general international law, that in broad terms claims in the exercise of diplomatic protection for injuries to such persons may be brought only by the national state of the 4

5 6 7 8

See, e.g., the International Technical Products Corp., et al. Case (1991), 27 Iran-US CTR p. 206. See, e.g., the DIC of Delaware, et al. Case (1985), 8 ibid. p. 144. See, e.g., the Edgar Protiva, et al. Case (1995), 31 ibid. p. 89. See, e.g., the Harrington and Associates, Inc. Case (1987), 16 ibid at p. 302. It is a different matter that the issue of whether the person or persons concerned have the right to claim must be decided before the rest of the merits. There is some lack of clarity and confusion in the discussion of the matter of persons claiming rights before the Iran-US Claims Tribunal in Aldrich, The Jurisprudence of the Iran-United States Claims Tribunal (1996) pp. 124–8, 133–6, where the issues are dealt with broadly as relating to “standing”. While the treatment of the relevant issues by the tribunal has been equally unclear and confused, a discussion of the subject should put them in the appropriate perspective.

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injured person; the second is the principle that local remedies available in the wrongdoing state must be exhausted before such a claim may be brought. In regard to the first principle, the respondent state may raise the objection to admissibility based on the nationality of claims rule. The respondent objects that the requirements of the rule have not been satisfied by the claimant state’s national or by the claimant national. In regard to the second principle the respondent may raise the objection to admissibility based on the claim that local remedies have not been exhausted. The nationality of claims rule, on which an objection to admissibility may be based, has been examined in detail in my book entitled Diplomatic Protection.9 Suffice it here to mention that problems have arisen and been discussed by international tribunals, including arbitral tribunals, relating to (i) (ii) (iii) (iv) (v)

the determination of nationality; the various consequences of dual or multiple nationality; the relevance of the “effective link” theory; the relevance of continuous nationality; and special problems with the nationality of juridical persons.

International arbitral tribunals have applied the general rules of international law in this regard. As regards the second principle, the general rule applicable in cases of diplomatic protection is that local remedies in the wrongdoing state must be exhausted by the injured person as a precondition for admissibility of a claim before an international tribunal. The development, application and content, including limitations and exceptions, of the rule and other matters connected with it have been extensively dealt with in a treatise by me entitled Local Remedies in International Law.10 Thus, suffice it to say here that the rule is well established in customary or general international law as an objection to admissibility. The main features of the rule are: (i) as in the case of the law of diplomatic protection, there are several interests that converge and conflict and must be accommodated; (ii) the incidence of the rule is determined by concepts such as that of the “direct injury” and that of “jurisdictional connection”; (iii) in determining the scope of the rule the availability of remedies, the nature of the remedies available, the adequacy and effectiveness of the remedies available, whether the remedies are normally used, the raising

9 10

(2005), pp. 91–141. See also C.F. Amerasinghe, op. cit. note 1 pp. 259–84. (2004). See also C.F. Amerasinghe, Diplomatic Protection (2008) pp. 142–90.

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(vi) (vii) (viii)

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of substantive issues in the local proceedings, the persons involved in the use of the rule and the need for a final decision are relevant considerations; there are limitations on the scope of the rule based on such concepts as obvious futility; the question of the need to use procedural resources and the extent to which they need to be used is relevant and has been addressed by tribunals; the rule may be waived or estoppel may operate to exclude the invocation of the rule; the burden of proof in connection with the application of the rule is a relevant factor in its implementation; other problems relating to the time for raising objections based on the rule (which are relevant to the raising of objections to admissibility in general and are dealt with below), the time at which remedies must be exhausted and the problem of the continuing situation must be and have been addressed; properly interpreted and applied, the nature of the rule is entirely procedural and in no circumstances substantive.

International arbitral tribunals have contributed significantly to the development of the law relating to the objection to admissibility of a claim based on the rule of local remedies.

Waiver and Estoppel A significant feature of objections to admissibility is that they may be waived or the right to raise them be forfeited for various reasons. Thus, an examination of the merits may validly take place in certain circumstances, even if there were obstacles to admissibility. In this respect such objections differ from objections relating to competence (sometimes called “jurisdiction”). The latter may be raised at any time during the proceedings, the right to raise them may not be forfeited or waived and the absence of competence may never be pre-empted, as was pointed out in Chapter 5. In general it may be said that the principles of consent and good faith would be relevant to the law relating to issues of admissibility insofar as objections to admissibility may be excluded by the operation of either of them. The application of the principle of consent results in the exclusion of objections on the basis that they have been waived, either expressly or impliedly, by the respondent state, while the principle of good faith has the effect of excluding the application of the rule in circumstances such as where

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the doctrine of estoppel or its equivalent would operate. There are many aspects to waiver and estoppel. However, they have been addressed by jurists, arbitrators and judges mainly in regard to the rule of local remedies. Hence that experience is the basis of the examination of the problems. What is said of the objection based on the rule of local remedies will apply mutatis mutandis to other objections to admissibility. Express Waiver Express waiver takes place where the respondent state expressly agrees that the objection to admissibility will not apply to a particular dispute or particular disputes. This may take place either before or after the dispute has arisen and may even be by a unilateral act by the respondent state. Such waivers may be given in both multilateral treaties and bilateral treaties. These do not raise any real problems. Examples of such waivers of the rule of local remedies in bilateral treaties are to be found in those that set up the Mixed Arbitral Tribunals and Mixed Claims Commissions between the two world wars. Particular reference may be made to Article V of the Convention of 1923 establishing the US-Mexican General Claims Commission.11 A later example is the treaty between Canada and the US setting up the Gut Dam Arbitration in 1965.12 The ICSID Convention is an example of a multilateral treaty which excludes the operation prima facie of the rule. By virtue of Article 26 of that Convention, where a host state and an alien whose national state is a party to the Convention agree to submit to international arbitration under the auspices of ICSID, established under the Convention, there is no need for the alien to exhaust local remedies before seeking arbitration unless specific provision is otherwise made for such recourse. This is also a case where the waiver has been given before the dispute arises, unlike in respect of most bilateral treaties.13

11

12

13

See Feller, The Mexican Claims Commission l923–1934 (1983) p. 34: Nielsen, International Law Applied to Reclamations (1933) p. 70; Eagleton, “L’épuisement des recours internes et le déni de justice, d’aprês certaines decisions récentes”, 16 RDILC (1935) at pp. 518–19, 525–6. See Erades, “The Gut Dam Arbitration”, 16 NILR (1969) p. 161. García Amador recognized an express waiver by agreement in 1958 in Article 17 of his draft to the ILC: “International Responsibility, Third Report”, 2 YBILC (1958) at pp. 55, 57–8, 72. It may be noted that in the area of adjustment or settlement of environmental disputes, there is a marked tendency towards waiver of the rule: for a discussion of this see, e.g., Hoffman, “State Responsibility in International Law and Transboundary Pollution Injuries”, 25 ICLQ (1976) at pp. 513 ff.; Poulantzas, “The Rule of Exhaustion of Local Remedies and Liability for Space Vehicle Accidents”, 17 RHDI (1964) at pp. 103–4; Jenks, “Liability for Ultra-Hazardous Activities in International Law”, 117 Hague Recueil (1966) at pp. 191 ff.

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Where such an express waiver of the rule of local remedies is given in a bilateral or multilateral treaty and after or before the dispute arises it is normally irrevocable, although it may be revoked by the agreement of the parties or with the consent of the state of the alien affected. In the case of the ICSID Convention the express terms of the waiver permit revocation by unilateral act of the respondent or host state at any time before it submits to arbitration under the Convention, which has to be done by a separate act of consent in writing and with the agreement of the other party, after it has become a party to the Convention. Thus, while agreement to arbitrate raises a presumption that there has been an express waiver of the rule of local remedies, that presumption is rebuttable by a unilateral act by the host or respondent state, or by agreement between the alien and the state who are parties to the dispute, provided the revocation is done before or at the time that the consent or arbitration is given by the host or respondent state. Where there is a bilateral or multilateral agreement between states to submit to arbitration or international judicial settlement disputes between their nationals and host states, there has generally been no understanding that the rule of local remedies was waived by the very fact of such submission to arbitration or judicial settlement. As is evidenced by the numerous decided cases in which disputes were submitted to such arbitration or judicial settlement under such agreements, no reference was made to the specific inclusion of the rule in the treaties or agreements, and the rule was held to be prima facie applicable.14 This issue is discussed further below in regard to implied waiver. Difficulties arise in connection with express agreements made between host states and aliens excluding the rule or express renunciations of the rule. In the case of the above express agreements or renunciations the question is whether such agreements or renunciations may be unilaterally revoked. Clearly, if the agreement or renunciation is governed by a law other than that of the host state, no revocation according to the law of the host state can take place. But what if, for instance, the agreement appears in a contract governed by the law of the host state which was legally terminated according to the law of the host state: Can the alien or his national state then rely on the express waiver of the rule by the host state? The answer would seem to hinge on whether parts of a contract could be governed by a different law from that which governs other parts. In the case of arbitration clauses in state contracts with aliens, it seems possible to take the view that cancellation of the contracts does not result in the cancellation of the arbitration clause, probably on the basis that the arbitration clause stands on its own and is not subject

14

See the Interhandel Case, 1959 ICJ Reports p. 6.

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to the total law of the host state. While it may be interpreted in accordance with that law, it cannot be unilaterally and arbitrarily terminated under the law, although there may be refinements of this rule. A similar principle may be applicable to a waiver of the rule of local remedies in a state contract with an alien or a simple renunciation of the rule by a unilateral act in respect of an alien.15 Implied Waiver The question that really arises is whether and when a waiver of an objection to admissibility can be implied. This question obviously raises problems of interpretation, and as a rule each situation should be looked at individually to determine whether there has been a waiver.16 Clearly, to the extent that there has been a waiver, there can generally be no room for unilateral determination of the waiver. The view taken above of express waivers would support this opinion. Further, while the existence of a waiver will usually have to be determined on the merits of each case, there has been some practice on the question in relation to the rule of local remedies which warrants discussion. Submission by States to International Adjudication, Including Arbitration Submission to international adjudication (including arbitration), by agreements between states entered into before the dispute has arisen, has been discussed by arbitral tribunals. In regard to general arbitration treaties, whether they are entered into before or after the dispute arises, the case-law is contradictory. There are some cases which regard the agreement to arbitrate as a waiver of the rule of local remedies, while the majority seem to take the

15

16

The 1956 resolution of the Institut de droit international clearly stated: “La régle ne s’applique pas: . . . (b) au cas où son application a été écartée par l’acccord des Etats intéressés”, 46 AIDI (1956) at p. 358. But in fact what is really required is the consent of the host or respondent state, given in any form either generally or to the alien or to his national state. Such consent constitutes an express waiver. The IACHR has stated that the requirement of admissibility based on the exhaustion of internal remedies may be waived either expressly or tacitly, because it was a means of defence and that such a waiver would be irrevocable: see the Viviano Gallardo Case (1981), IACHR Series A at p. 88; the Velasquez Rodriguez Case (1987), IACHR Series C at p. 77; the Fairen Garbi and Solis Corrales Case (1987), IACHR Series C at pp. 82 ff.; the Godinez and Cruz Case (1987), IACHR Series C at pp. 75 ff. See the argument of the French government in the Norwegian Loans Case which related to the existence of an implied waiver of the rule of local remedies: 1 ICJ Pleadings (1957) at pp. 407 ff.

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opposite view.17 It is to be noted that in the Elettronica Sicula S.p.A. (ELSI) Case a Chamber of the ICJ held that an agreement in a treaty to submit to adjudication by the ICJ, entered into before the dispute arose, did not by itself imply a waiver of the rule of local remedies.18 The Chamber made it quite clear that implying a waiver in these circumstances was not an easy matter in the absence of a clear intention to do so. On the other hand, the situation is not quite the same in regard to treaties signed after disputes have arisen. In fact, it would seem that the PCIJ and the ICJ have not addressed themselves to this situation, insofar as the situation has not arisen in the cases decided by them. However, insofar as the two Courts have enunciated an undifferentiated general principle which supports the view of the majority taken in other decisions, there is added support for that view. In the last analysis, it would seem that the better view is that whether such treaties are signed before or after disputes arise, waiver of the rule of local remedies may be generally implied. Even in the case of general treaties to settle by arbitration, however, it may be possible, in the absence of an express waiver, to find from the natural meaning of the text or the circumstances surrounding the agreement that waiver of the rule of local remedies was in fact intended. For example, if it is stated that there shall be direct settlement by arbitration or international adjudication, the natural meaning of the text indicates that the rule has been waived.19 An example of implied waiver of local remedies in an agreement between states which was concluded after the disputes arose is to be found in connection with the agreement which set up the Iran-US Claims Tribunal. Article II of the Claims Settlement Declaration stated that the parties had agreed that an international tribunal would be set up for the purpose of deciding claims of nationals of the United States against Iran and claims of nationals against the United States, and any counterclaim which arises out of the same contract, transaction or occurrence that constitutes the subject matter of the national’s claim, if such claims and counterclaims are outstanding on that date of this Agreement whether or not filed with any court, and arise out of debts, contracts (including transactions which are the subject of letters of credit or bank guarantees), expropriations or other measures affecting property rights, excluding . . . claims arising under a binding contract between

17

18 19

See Law, The Local Remedies Rule in International Law (1961) p. 97. The weight of textual authority also favours the latter view: ibid. pp. 95 ff. 1989 ICJ Reports at p. 42 See Steiner and Gross v. Polish State, AD 1927–8 at pp. 472 ff.

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the parties specifically providing that any disputes thereunder shall be within the sole jurisdiction of the competent Iranian courts. . . .20

Article VII then provided that: “Claims referred to the arbitration Tribunal shall, as of the date of filing of such claims with the Tribunal, be considered excluded from the jurisdiction of the courts of Iran, or of the United States, or of any other court.”21 There was no specific and express exclusion of the rule of local remedies, but the combined effect of these two provisions apparently led the tribunal to conclude that the Declaration granted jurisdiction to the tribunal “notwithstanding that exhaustion of local remedies . . . doctrines might otherwise be applicable”.22 The tribunal did not explain how it came to this conclusion, but it was clear that the waiver of the rule must have been implied from the circumstances surrounding the Declaration and particularly the two provisions cited above, which describe reference to the courts of the two states parties to the arbitration arrangement as irrelevant and also exclude their jurisdiction. In the case of other objections to admissibility than those based on the rule of local remedies submission to international adjudication or arbitration certainly does not by itself imply a waiver of the right to raise those objections. The Issue of Arbitrability An implied waiver may be construed to take effect as a result of the circumstances surrounding an agreement between states where the issue to be decided by an international tribunal concerns the arbitrability of the dispute. In this situation the ICJ has held that the rule of local remedies is not applicable.23 On the other hand, a conflicting decision seems to have been pronounced by the same Court. In the Interhandel Case the Court refused to determine the question of arbitrability because local remedies had not been exhausted.24 However, in this case there were some strong dissenting opinions25 which took the view adopted in the earlier Ambatielos Case that the local remedies rule was not applicable to the issue of arbitrability. It would seem that the better view is that the question of arbitrability may be decided without local remedies having been exhausted, in particular since the issue 20 21 22 23

24 25

1 Iran-US CTR at p. 9 (italics added). 1 Iran–US CTR at p. 11. Award No. 93-2-3 (1983), 4 Iran-US CTR at p. 102. The Ambatielos Case, 1953 ICJ Reports p. 16. See also the Chemins de Fer Zeltweg Case (1934) (Austria v. Yugoslavia), 3 UNRIAA at p. 1803. 1959 ICJ Reports at p. 29. See 1959 ICJ Reports at p. 32 per Judge Carry, at p. 82 per Judge Klaestad, at p. 84 per Judge Winiarski and at pp. 120 ff per Judge Lauterpacht.

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does not relate to the merits or to material compensation or restitution.26 Also it is important in this connection that, even if a pronouncement is made on the issue of arbitrability, this does not pre-empt the arbitral tribunal from making a determination on the question whether local remedies had been exhausted.27 In this situation, however, it must be noted that it may be expressly agreed that local remedies should be exhausted before an international tribunal decides the issue of arbitrability. The same principles would arguably apply to other objections to admissibility.28 Arbitration Agreements between States and Private Parties The question whether and to what extent there has been an implied waiver of the rule of local remedies may arise in connection with arbitration clauses which are included in ordinary state contracts with aliens. Such contracts would not be on a par with treaties,29 nor strictly would they be contracts within the international legal system, nor between international persons, although they might be governed by transnational law.30 A preliminary question that must be answered is whether arbitration clauses included in such contracts would become ineffective, if the contracts themselves are terminated or cease to have effect for some reason. The question is of some importance, since, if arbitration clauses could become ineffective in this way, the question of whether there has been an implied waiver of the rule of local remedies may often become moot. The problem becomes particularly significant where, for example, the contract is governed by the national law of the state party to the contract and the contract is terminated under the law, perhaps by legislation. In an arbitration between Yugoslavia and a Swiss national, it was argued by Yugoslavia that the cancellation of the contract between Yugoslavia and the alien resulted in the cancellation of the arbitration clause and thus terminated the right of recourse to arbitration. The arbitral tribunal rejected the submission.31 The decision was by an arbitral tribunal which was not an organ of the international legal system, which it would have been had the dispute been between states, but one instead which was set up by a state and an alien to settle a dispute between them. Hence, its decision probably does

26 27 28 29 30

31

See Judge Lauterpacht in the Interhandel Case, 1959 ICJ Reports at p.120. See the Ambatielos Case, 1953 ICJ Reports p. 16. There are no arbitral decisions on this issue of arbitrability. See the Anglo-Iranian Oil Co. Case, 1982 ICJ Reports at p. 93. See, inter alios, the discussion in Amerasinghe, State Responsibility for Injuries to Aliens (1967), pp. 108 ff. and authorities there cited. See the Affaire Losinger and Co., Pleadings, Oral Statements and Documents (1936), PCIJ Series C No. 78 at pp. 119 ff.

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not share the prestige and value of an international decision or award. However, in the absence of any international cases on the matter this decision may have some persuasive force. The rationale of the decision would seem to lie in postulating that an arbitration clause in a contract between a state and an alien stands on its own and is separable from the contract as such, whatever may be the position under the national law of that state applicable to arbitration clauses in contracts between the state and an individual or between two individuals. The arbitration clause may have to be interpreted according to a national law, but the issue of its termination falls to be determined outside particular national systems of law, probably by some general principles of law applicable to international contracts or treaties. Importance really attaches to the negative conclusion reached above, even if there is no clear support for the positive suggestion. If the above were not the case, the purpose of having an arbitration clause in the contract between a state and an alien would be defeated. Because it seems to be the better view that arbitration clauses survive contracts between states and aliens, the substantive issue whether and to what extent a waiver of the rule of local remedies can be implied where such an arbitration clause occurs assumes importance. There appear to be many cases in which arbitration has been resorted to under a state contract with an alien and in which the argument has not been raised by the respondent state that the alien has not exhausted local remedies before seeking arbitration.32 In a few cases concerning this kind of arbitration which came before the PCIJ and the ICJ the issue was raised by the respondent state and the plaintiff state argued for a waiver of the rule, but in none of the cases was the issue decided.33 The fact that the issue of local remedies has not been contested in the majority of cases may lend some support to the view that an arbitration clause does imply a waiver of the rule of local remedies, at least in regard to the merits of the dispute, although it may not be conclusive. The absence of an international decision to the contrary would also not militate against this position. Indeed, it would be reasonable to conclude from the fact that arbitration has been chosen as the means of settling disputes that it was intended to withdraw the merits of disputes from the jurisdiction of the local courts and institutions at least until the arbitral award had been given.

32

33

See Schwebel and Wetter, “Arbitration and Exhaustion of Local Remedies”, 60 AJIL (1966) pp. 486 ff. The Affaire Losinger and Co. (1936), PCIJ Series A/B No. 67, Pleadings, Oral Statements and Documents (1936), PCIJ Series C No. 78; Anglo-Iranian Oil Co. Case, 1952 ICJ Reports p. 93, ICJ Pleadings (1951); the Electricite de Beyrouth Co. Case, 1954 ICJ Reports p. 107, ICJ Pleadings (1954); the Compagnie du Port des Quais el des Entrepôts de Beyrouth and the Société Radio-Orient Case, ICJ Pleadings (1960).

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It would seem to be difficult to find acceptable arguments for the opposite view. It is noted that the issue has not been faced by an international arbitral tribunal. There is some support for this view in other authorities. In LIAMCO v. Libya the sole arbitrator asserted: As the arbitration clause and the procedure outlined there are binding upon the contracting parties, and the procedure outlined there being imperative, the Arbitral Tribunal constituted in accordance with such clause and procedure should have exclusive jurisdiction over the issues of the dispute. No other tribunal or authority, local or otherwise, has competence in the matter. The exclusive and compulsory character of the arbitration process in such case is widely admitted in international law. It has been affirmed by international arbitral precedents . . . and has also been incorporated by the Convention of 1966 on the Settlement of Investment Disputes between States and Nations of other States.34

In Elf Aquitaine Iran v. National Iranian Oil Company the sole arbitrator made the following statement in response to the argument that the plaintiff company could have used a procedure of redress available under the law of Iran: The International Court of Justice has declared that ‘The rule that local remedies must be exhausted before the international proceedings may be instituted is a well-established rule of customary international law’, Interhandel case (Switzerland v. United States of America) (1959) I.C.J. Reports, at page 27. This rule of local remedies or redress that would require ELF to present its claims to the Special Committee before turning to an international remedy does, however, govern only complaints made by a state in the exercise of its right of diplomatic protection of its nationals, cf. e.g., Manual of Public International Law, 1958, edited by Max Sorensen, p. 582, and not, as pointed out by Maurice Bourquin in an article in The Business Lawyer, Volume XV (1960) p. 860 et seq., to a request from a party to an agreement on arbitration to initiate arbitral proceedings under that agreement. The parties have by choosing arbitration established a procedure for settlement of disputes which excludes the national legal remedies provided for in national legislation. The established procedure also implies that each party is entitled to have disputes settled by arbitration without evoking diplomatic protection and thus without fulfilling conditions to be met in order for their government to exercise diplomatic protection. The Sole Arbitrator has therefore reached the conclusion that the rule of local redress does not apply in this case, and the ELF is not obliged to submit its claims to the Special Committee, before these claims can be adjudicated by arbitration under the agreement.35

34 35

(1977), 62 ILR at pp. 179–80. This was a transnational, and not an international arbitration. 11 YBCom.Arb. (1986) at pp. 104-5. This was also a transnational and not an international arbitration.

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Such opinions as these were given in arbitrations which were neither interstate arbitrations nor arbitrations established under an arrangement governed by international law as such. However, they may be considered as relevant. There are also several textual authorities which support the view taken that there is an implied waiver where arbitration is chosen as a means of settling disputes between states and individuals.36 The views reflected above are quite acceptable, since it is acknowledged as implied in the last case, that such arbitrations are not instituted in the exercise of diplomatic protection. While it may be clear that some waiver of the local remedies rule may readily be implied, the extent of the waiver is not so clear. The evidence referred to above is not inconsistent with a partial waiver. It is compatible with the view that where there is an arbitration clause, resort to local remedies may be required before an international forum is invoked, even though the alien has indicated his willingness to arbitrate, or after the arbitration. The choice of arbitration as a means of dispute settlement does not exclude the possibility that the alien is expected, where possible, to exhaust local remedies in the event of a refusal to arbitrate on the part of the host state in order to secure enforcement of the obligation to arbitrate, or where the award has been rendered in favour of the alien, in order to secure enforcement or interpretation of the award, or where the award has been rendered against the alien, in order to have the award upset.37 Whether local remedies need not be exhausted for such purposes would then generally depend on other exceptions to the rule of local remedies, and not on any theory of implied waiver. On the other hand, the question may be raised whether the implied waiver could not be extended to cover even the situations and remedies excluded above, depending on the nature of the arbitration clause. It has been suggested that where the arbitral process is intended to be governed by a law other than the national law of the host state, a waiver of resort to local remedies is implied.38 This argument may well be based on the view that by

36

37

38

For recent authorities, see particularly the Report of the International Law Commission on its twenty-ninth session. 2 YB I LC (1977), Part II, at p. 49: Schwebel, International Arbitration: Three Salient Problems (1987) pp. 117–21. The latter author gives two more reasons for the inapplicability of the rule of local remedies to the arbitration situation, pp. 116–17, 121–2, but the best explanation is that of the implied waiver. See also Schwebel and Wetter, loc. cit. note 32 at pp. 499 ff. A similar view is espoused by Sohn and Baxter in the commentary to their draft Convention on the International Rcsponsibi1iy of States for Injuries to Aliens: see García Amador, Sohn and Baxter, Recent Codification of the Law of State Responsibility for Injuries to Aliens (1974) pp. 264–5. See Schwebel and Wetter, loc. cit. note 32, p. 499.

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choosing a different law from its own for the settlement of disputes by arbitration, the host state has impliedly agreed that resort to the remedies offered by its own legal system is not necessary. Be that as it may, this conclusion is not inescapable for the postulated situation, per se, in the absence of other indications of waiver. It is quite compatible with such a choice of a different law from that of the host state to govern the arbitral process that the intention was that resort should be had to the remedies of the host state, if available, for the purpose of enforcing the obligation to arbitrate, or of enforcing or interpreting the award, or of upsetting the award. The choice of a different legal system for the particular purpose of the arbitral process does not necessarily involve the renunciation of local remedies, which may be relevant for other purposes, if they are available. Nor can an implied waiver of the remedy relating to the obligation to arbitrate be assumed on the ground that the host state would lack the means to enforce a decision that there is an obligation to arbitrate because enforcement must take place outside its territory. In such a situation the mere decision on the issue may have the desired effect on the host state, and for that reason it could very well have been contemplated that resort should be had to local remedies on that issue. Whatever the force of these arguments, the view has also been clearly expressed that there are no limitations at all on the extent of the implied waiver.39 One reason given for this is that in those situations where it is envisaged that the implied waiver does not operate, the action taken by the host or respondent state would be “a denial of justice”, in relation to which in any case there would be no obligation to exhaust local remedies.40 While this reasoning results in the exclusion of the rule, the exclusion would flow not necessarily from an implied waiver, but from some other limitation. The theory based on “denial of justice”, obviously used in a very broad sense, has yet to be tested.41 The above analysis shows that, while the basic notion of an implied waiver in case of arbitration agreements such as are referred to may be accepted, the extent of the waiver is not settled. The understandings underlying two conventions involving arbitration between states and individuals or their subrogees would seem to support the views expressed above that an agreement to arbitrate between a state

39

40 41

See García Amador, “International Responsibility, Fifth Report”, YBILC (1960) at p. 57; Luzzato, “International Commercial Arbitration and the Municipal Law of States”, 157 Hague Recueil (1977) at p. 94. See Schwebel, op. cit. note 36 pp. 115 ff. This exception is different from those exceptions based on absence of access to courts and the like, which give rise to obvious futility. It is evidently a new ground for making an exception to the rule. The ground is not yet recognized.

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and an individual implies a waiver of the requirement that local remedies should be exhausted. The ICSID Convention, which came into force in 1966, deals essentially with such agreements to arbitrate, although these are institutionalized and given a special status under international law. The Convention, in Article 1(2) and later in Article 27(1), makes this clear by providing that a state whose national has agreed to submit a dispute to arbitration under the Convention shall not give diplomatic protection to such national, which indicates that the arbitration under the auspices of ICSID, although described as an “international” arbitration, is not an arbitration instituted in the pursuit of diplomatic protection. While Article 26 explicitly excludes the rule of exhaustion of local remedies where an arbitration under the auspices of ICSID has been agreed to, unless the exhaustion of such remedies had been made a condition precedent to such arbitration, paragraph 32 of the Report of the Executive Directors on the Convention, which is appended to the Convention and therefore has some interpretative value, states that: It may be presumed that when a State and an investor agree to have recourse to arbitration, and do not reserve the right to have recourse to other remedies or require the prior exhaustion of other remedies, the intention of the parties is to have recourse to arbitration to the exclusion of any other remedy.42

It may be concluded both that what is referred to as a rule of interpretation in substance reflects the rule of the implied waiver discussed above and that its incorporation as the implicit basis of Article 26 of the Convention reinforces the autonomy or general nature of that rule. The Report of the Executive Directors on the Convention may be regarded as part of the travaux préparatoires to which parties to the Convention subscribe when they sign and ratify the Convention. Thus, the view of the implicit waiver reflected in that Report may be taken to reflect the practice of such states at least, although, because the Convention explicitly incorporates the implicit waiver, that view is not essential for the application of the Convention. The Convention Establishing the MIGA does not specifically refer to the implicit waiver of the rule either in its Article 57 or in Annex II to the Convention, but there is a reference to the principle involved in the Commentary on the Convention Establishing the MIGA which may be treated as part of the travaux préparatoires and is of interpretative value. In paragraph 76 of the Commentary it is provided that disputes between host states and the Agency as subrogee of an investor should be settled in accordance with a set procedure or by special agreement between the parties. In the case of a negotiated agreement it is stated that “the agreement could, for example,

42

See Doc. ICSID/2 at pp. 10–11 of the Report.

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provide that the Agency first seek remedies available to it under the domestic laws or the host country and seek recourse to arbitration only if it has not obtained relief under such remedies within a specified period of time”.43 This statement assumes that an agreement to arbitrate between MIGA as the subrogee of an alien investor and a host state would normally imply waiver of the rule of local remedies unless reference to the need for exhaustion of such remedies is expressly made. Here, as in the case of the ICSID Convention, the understanding reflected is subscribed to by parties to the Convention as being of interpretative value. The same inferences may be made in this case as in the case of the ICSID Convention. These Conventions and their travaux préparatoires amply support the view taken earlier of the implicit waiver of the rule of exhaustion of local remedies where arbitration is agreed to between a host state and an alien. However, the extent of the rule of implicit waiver supported is not so evident. It is significant that in connection with both Conventions, what the interpretative texts purport to refer to is the rule of implicit waiver as understood in customary international law, whatever the terminology used. Therefore the proper definition of the limits of that rule is left to customary international law and is not affected by the provisions of these Conventions or anything contained in their travaux préparatoires which may be in conflict with such definition. Apart from the general support given the existence of the rule of implicit waiver in such arbitration cases, these documents do not really provide any assistance in establishing the exact parameters of the rule. In regard to these, whatever disagreement there is has not been dispelled. The application of these principles to other objections to admissibility in the case of the arbitration agreements being considered has not been canvassed. There is no reason for not accepting their general application where they result in an implication of waiver. Failure to Raise Preliminary Objection The right to object to admissibility of a claim before an international court or tribunal may be waived because of the failure on the part of the respondent state to raise at the proper time in the international proceedings the objections to admissibility (including those based on the rule of local remedies). This is an implied waiver of the application of the rule on the basis of a procedural position taken by the respondent state and takes place during the international proceedings. Once the waiver has taken place it is irrevocable.

43

See Convention Establishing the MIGA and Commentary on the Convention (1985) at p. 22 of the Commentary.

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The forfeiture of the right to rely on the objections is grounded in a general principle that applies to the raising of preliminary objections.44 Request for a Declaratory Judgment As a consequence of two judgments of the PCIJ on jurisdiction, it has been concluded that a request for a declaratory judgment precludes the raising of the objection by the respondent state that local remedies have not been exhausted. In the German Interests in Polish Upper Silesia Case the PCIJ held that the rule did not apply where the plaintiff state requested only “interpretation of certain clauses of the Geneva Convention”.45 The decision was explained in the subsequent Chorzów Factory ( Jurisdiction) Case where the Court said that the application in the first case “only asked the Court for a declaratory judgment between States, which only the Court could give, whereas the present Application seeks an indemnity . . .”46 The distinction, thus, lies between cases in which a judgment merely declaring a violation of international law is sought and that in which a remedial right is asserted.47 This view is based on the notion that since the initial act alleged to be the cause of the wrong would be a breach of international law by the respondent state, and not merely a breach of local law, a declaratory judgment on that issue would not be inapt and would in fact help to bring about a speedy solution of the dispute. The correlation implied in this reasoning between a judgment by an international tribunal and a breach of international law is easy to accept. So is the idea that, while a judgment on the merits for damages would, in such a case, be barred, it would not be unreasonable to allow a declaratory judgment. The conclusion does strike a compromise between the interests of the respondent state and those of the claimant and his state. By seeking and obtaining a declaratory judgment that the respondent state was in breach of international law, the claimant would be able to establish its position in international law, deriving all the psychological advantage of such a position, while the respondent state would not be prejudiced in its chances of remedying the injury through local means. The plaintiff state retains the advantage of having the law on its side, if the respondent state is in violation of the law, while the latter retains the right of using its own means of

44

45 46 47

The jurisprudence of the PCIJ and ICJ has not discussed this matter in relation to objections to admissibility as such. (1925), PCIJ Series A No. 6 at p. 20. (1927), PCIJ Series A No. 9 at pp. 26–7. See Beckett, “Les questions d’intérét general au point de vue juridique dans la jurisprudence de la Cour permanente de Justice internationale”, 39 Hague Recueil (1932) at p. 164; de Visscher, “Le déni de justice en droit international”, 52 Hague Recueil (1935) at p. 425; Kaufmann, “Régles générales du droit de la paix”, 54 Hague Reeueil (1935) at p. 456.

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redressing the wrong to the individual – a right which is a recognition of its responsible sovereign character – before being subjected to an international directive to perform its secondary obligation of redress in a particular way. However, insofar as the exception is based on the theory of an implied waiver, the waiver could be expressly reserved, provided it is done at the appropriate time. Among textual authorities the matter is not regarded as settled,48 while in its oral argument in the Interhandel Case the US Government apparently did not categorically take the view that the waiver was unqualified.49 It is not clear whether the view that there is an implied waiver is applicable across the board to all objections to admissibility. In general it would seem that it is not so applicable. Exceptionally, on an ad hoc basis a waiver may be implied if an intention to waive can be shown to exist by implication. The Principles of Estoppel and Good Faith The principles of estoppel and good faith may operate to exclude objections to admissibility, including those based on the application of the rule of local remedies. The doctrine of estoppel in broad terms prevents one party from taking advantage of another when the former by his actions has let the latter to act in a certain manner detrimental to the latter’s own interests. The principle of good faith is at the root of this doctrine. The exact scope of the doctrine in international law is not fully defined. There are no arbitral decisions on this matter but there are some judgments of the World Court which are relevant to international arbitration as well. For the purpose of the application of the rule of local remedies, the statement in the Chorzów Factory (Jurisdiction) Case, which purported to advert to an aspect of this doctrine, is a good starting point. The PCIJ said: “It is, moreover, a principle generally accepted in the jurisprudence of international arbitration, as well as by municipal courts, that one party cannot avail himself of the fact that the other has not fulfilled some obligation or has not had recourse to some means of redress, if the former party has, by some illegal act, prevented the latter from fulfilling the obligation in question, or from having recourse to the tribunal which would have been open to him.”50 The Court pointed to an illegal act in particular. However, the principles of good

48 49

50

See the discussion in the Institut de droit international: 46 AIDI (1956) at pp. 302 ff. ICJ Pleadings (1959) at pp. 501 ff. The ILC has supported in its most recent work on diplomatic protection, the view that an application for a declaratory judgment does not involve the implied waiver of the rule of local remedies: see C.F. Amerasinghe, op. cit. n. 10, pp. 91 ff. (1927), PCIJ Series A No.9 at p. 31.

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faith and estoppel have a broader coverage than that. In fact, any conduct on the part of one party which is intended to lead, and induces, the other party to act in a manner which is detrimental to his interests could qualify, there being no special requirement that the conduct be illegal. While the principles of estoppel and good faith may in appropriate circumstances have a general application to the exclusion of objections to admissibility, including objections based on the rule of local remedies, the manner in which they are applicable apparently has a strict definition. For example, in the case of the rule of local remedies there must be cogent evidence that the conduct was not only intended to lead the person to believe that local remedies need not be further exhausted, for whatever reason, but also that the latter could reasonably be expected to rely on that conduct, did rely on it and for that reason did not resort to the local remedies which were available. Thus, in the Interhandel Case the ICJ did not consider that the conduct of the US Government was of this nature when it said: The Court does not consider it necessary to dwell upon the assertion of the Swiss Government that the “United States itself has admitted that Interhandel had exhausted the remedies available in the United States courts”. It is true that the representatives of the Government of the United States expressed this opinion on several occasions, in particular in the memorandum annexed to the Note of the Secretary of State of January 11th, 1957. This opinion was based upon a view which has proved unfounded. In fact, the proceedings which Interhandel had instituted before the courts of the United States were then in progress.51

It would appear that in the circumstances of the case the Court considered that it was not reasonable to expect that the alien would rely on the opinion of the US Government, which was a party to the dispute and had no control on the US courts, and whose opinion on the existence of remedies was not necessarily an expert one. What is required for the principle of good faith and estoppel to operate is not merely that the host or respondent state express a general view about the existence of remedies, but that it conduct itself in such a way that a reasonable opponent would conclude that he was relieved of the duty to exhaust local remedies or that the rule would not be invoked. In the Elettronica Sicula S.p.A. (ELSI) Case a Chamber of the ICJ dealt with the argument that the rule of local remedies had been excluded by estoppel. While not denying that estoppel could have been relevant to the matter in hand, the Chamber held that estoppel did not operate to exclude the rule on the facts of the case. It explained the doctrine of estoppel and its application to the facts as follows:

51

1959 ICJ Reports at p. 27.

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Chapter Six 53. There was a further argument of the Applicant based on estoppel in relation to the application of the local remedies rule, which should be examined. In the “Memorandum of Law” elaborating the United States claim on the diplomatic plane, transmitted to the Italian Government by Note Verbale of 7 February 1974, one finds that the whole of Part VI (pp. 133 et seq.) deals generally and to some length with the “Exhaustion of Local Remedies”. There were also annexed the opinions of the lawyers advising the Applicant, which dealt directly with the position of Raytheon and Machlett in relation to the local remedies rule. The Memorandum concluded that Raytheon and Machlett had indeed exhausted “every meaningful legal remedy available to them in Italy” . . . In view of this evidence that the United States was very much aware that it must satisfy the local remedies rule, that it evidently believed that the rule had been satisfied, and that it had been advised that the shareholders of ELSI had no direct action against the Italian Government under Italian law, it was argued by the Applicant that Italy, if it was indeed at that time of the opinion that the local remedies had not been exhausted, should have apprised the United States of its opinion. According to the United States, however, at no time until the filing of the Respondent’s Counter Memorial in the present proceedings did Italy suggest that Raytheon and Machlett should sue in the Italian courts on the basis of the Treaty. The written aide-mémoire of 13 June 1978, by which Italy rejected the 1974 Claim, had contained no suggestion that the local remedies had not been exhausted, nor indeed any mention on the matter. 54. It was argued by the Applicant that this absence of riposte from Italy amounts to an estoppel. There are however difficulties about drawing any such conclusion from the exchanges of correspondence when the matter was still being pursued on the diplomatic level. In the Interhandel case, when Switzerland argued that the United States had at one time actually “admitted that Interhandel had exhausted the remedies available in the United States courts”, the Court, far from seeing in this admission an estoppel dismissed the argument by merely observing that “this opinion was based upon a view which has proved unfounded” (Interhandel, Judgment, I.C.J. Reports 1959, p. 27 ). Furthermore, although it cannot be excluded that an estoppel could in certain circumstances arise from a silence when something ought to have been said, there are obvious difficulties in constructing an estoppel from a mere failure to mention a matter at a particular point in somewhat desultory diplomatic exchanges.52

There are no clear examples of the application of the principles of estoppel and good faith in favour of a person in regard to the objection based on local remedies. While there is every reason why the principles should be relevant to the application of the rule of local remedies, it will naturally depend on the circumstances of each case whether the application of the principles should result in the exclusion of the rule. By analogy, on the basis of the above jurisprudence, the principles of estoppel and good faith may be applied to other objections to admissibility in the appropriate circumstances. Generally the issue would be whether the 52

1989 ICJ Reports at pp. 43–4.

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respondent state can rely on some factor which entitles it to conclude that the particular objection would not or could not be raised.

Time for Raising Objections to Admissibility The rules of arbitral tribunals may or may not deal with the time at which objections to admissibility must be filed. However, the Rules of 1978 of the ICJ in Article 79 address the question specifically. It is made quite clear that there are two kinds of objections which relate to juridiction ( jurisdiction) in a broad sense, one relating to compétence and one relating to admissibility. The ICJ itself stated that objections to compétence could be raised at any time, implying that Article 79(1) of the Rules was not absolute in regard to them in the sense that if such objections were not raised at the time indicated in Article 79, the right to raise them would be lost as having been waived or forfeited.53 The matter of objections to admissibility has not specifically been addressed by the Court – as opposed to objections relating to compétence. Nor has it been discussed in other courts or tribunals. Article 79(1) reflects what would be a general principle of law as far as objections to admissibility are concerned. The point is that such objections must be raised before the discussion of the merits is initiated by the filing of a pleading or in such a way that the Court is apprised of them not subsequent to the filing of the first pleading on the merits. Whether the rules or other instruments of a tribunal state this principle expressly, it is one which would be applicable procedurally but with substantive effects. Thus, if the objection is not filed within the time limit referred to above, the right to raise this objection (to admissibility) would be lost or forfeited. There would be an implied waiver of the objection to admissibility. This would be so, even where the doctrine of joint forum prorogatum, which is applicable to the jurisdiction of the ICJ, does not apply. The reason is that even in the case where forum prorogatum is not applicable, as in the case of arbitration in general, the tribunal would regard the possible right to object to admissibility as simply having been forfeited or waived, there being no need to invoke a general doctrine of forum prorogatum. The above reasoning does not need the authority of decided cases to support it. The conclusion flows from the application of general principles. What is significant is that the critical time for the filing of objections to admissibility is as described above.

53

See C.F. Amerasinghe, op. cit. note 1, Chapter 7.

Chapter Seven Incidental Jurisdiction: Intervention and Interim Measures Apart from jurisdiction to deal with the merits, an arbitral tribunal may have to deal with other matters which are only connected with the case on the merits. The jurisdiction to deal with these matters comes within the scope of the incidental jurisdiction of the tribunal.1 For example, Part III, Section D, of the 1978 Rules of Court of the ICJ deals with “Incidental Proceedings”. It covers matters such as interim protection, preliminary objections, counterclaims, intervention, special reference to the Court and discontinuance. Interpretation and revision of a judgment, for example, as post-adjudication phases, are dealt with separately, although they are connected with the principal proceedings and may, thus, be regarded as incidental. A Chamber of the Court stated that incidental proceedings by definition must be those which are incidental to a case which is already before the Chamber (or the Court, as the case may be) and thus, an incidental proceeding cannot be one which transforms that case into a different case with different parties.2 In the Haya de la Torre Case, the Court, using the term “incidental”, stated that “every intervention is incidental to the proceedings in the case”,3 thus describing the matter of intervention as being incidental

1

2

3

See Briggs, “The Incidental Jurisdiction of the International Court of Justice as Compulsory Jurisdiction”, Völkerrecht und rechtliches Weltbild: Festschrift für Alfred Verdross (1960) p. 89, Briggs, “La compétence incidente de la Cour internationale de Justice en tant que compétence obligatoire”, 64 RGDIP (1960) p. 217. The term “incidental jurisdiction” in connection with the PCIJ first appeared apparently in Hudson, The Permanent Court of International Justice: A Treatise (1934) p. 360. Land, Island and Maritime Frontier Case (Application to Intervene), 1990 ICJ Reports at p. 134. 1951 ICJ Reports at p. 76. See also Land, Island and Maritime Frontier Case (Application to Intervene), 1990 ICJ Reports at p. 4.

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to the proceedings. In international arbitration similar incidental questions may arise. In terms of jurisdiction, there are questions which arise in connection with incidental proceedings, particularly relating to the relevance of consent. The characteristic feature of jurisdiction over incidental proceedings is that it depends upon the subject-matter of the incidental proceedings having a legal connection with the principal proceedings on the merits. The conditions for a tribunal’s having jurisdiction over them may differ and depend on several factors. An important point is that this jurisdiction (in the absence of an expressed intention in the jurisdictional instruments) which is not invalid for any reason and can be given effect to, depends on general principles of law applicable to the international juridical process. As will be seen, in the case of interim measures jurisdiction to order them may not depend on the establishment of the conditions for consensual jurisdiction over the merits, while in other cases, such as the admission of an intervention, consent as such to the intervention in one form or other may be relevant. That jurisdiction to deal with the merits is not always necessary for jurisdiction in respect of, at least, some incidental matters has been seen to have been accepted, for example, in connection with la compétence de la compétence. The relationship to jurisdiction over the merits to the jurisdiction to deal with incidental matters may vary with the nature of the particular incidental matters. Indeed, occasionally, again as has been seen in relation to la compétence de la compétence, jurisdiction over incidental matters may inhere in a tribunal as a result of the judicial character of the tribunal. The authority to control the conduct of the case is also inherent in an international tribunal subject, to some extent, to the express agreement of the parties. This is not strictly to be regarded as incidental jurisdiction. In the case of the ICJ, Article 48 of the statute specifically gives the Court this authority when it states, inter alia, that the Court “shall make orders for the conduct of the case . . .”.4 Such actions taken under Article 48 may be taken after or before the jurisdiction of the Court to decide the merits has been established. The principal cases of “incidental” jurisdiction which require further discussion and examination are jurisdiction in relation to interventions by third parties, and the jurisdiction to order interim or provisional measures. In the process of settling a dispute on the merits, even before an international arbitral tribunal has established whether it has jurisdiction, based on compe-

4

For matters connected with the conduct of the case to cover which Article 48 has been issued, see Rosenne, 2 The Law and Practice of the International Court 1920–2005 (2006) p. 585, C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) p. 130.

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tence or admissibility, to proceed with such settlement, it may have to decide certain incidental matters in connection with (i) intervention by third parties to the dispute and (ii) the ordering of provisional or interim measures in connection with the dispute and prior to its settlement. The issue that arises in connection with the jurisdiction of the tribunal is whether and on what basis and conditions the tribunal has authority to recognize interventions and order provisional measures. The question of jurisdiction thus formulated is separate from any substantive issue that may arise, for example, in regard to what provisional measures may be ordered in a given situation. But even in respect of the latter issue the question of the scope of the authority to order provisional measures and the basis on which they may be ordered could be regarded as a matter of jurisdiction, though what particular measures are ordered in a given case would truly and entirely be a matter of substance. Similarly, in regard to intervention what an intervenor may be permitted to do, if allowed to intervene, may be regarded as a matter of jurisdiction.

Intervention In the case of interventions there are three principal questions relating to jurisdiction which arise when a third party seeks to participate as an intervenor in proceedings between two (or more) other parties. The first issue concerns the relevance of consent on the part of the principal parties to the dispute in determining whether the tribunal has jurisdiction to admit an intervention and the nature and extent of the consent in question, if any is required. The second issue is what other requirements are there for an intervenor to be allowed legitimately to take part in proceedings. The third issue relates to what an intervenor may properly do in the proceedings in the context of, e.g., raising issues and arguments. These matters may rightly be regarded as jurisdictional matters insofar as they pertain to the authority of the tribunal to accept an intervenor’s participation in the case and its authority to determine the scope of that intervention. It is interesting that in an early arbitration the tribunal said categorically that “il n’existe pas de principes généraux absolus en matière d’intervention”.5 It is important to note, in fact, that the statement refers to “absolute” principles as such. While there are no absolute principles, there are principles which are not so much flexible as opposed to absolute but, as will be seen, are to be adapted to situations.

5

The Guano Case (Chile/France) (1901), 15 UNRIAA at p. 315. In that case the tribunal applied some “principles” in relation to intervention.

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Consent of the Principal Parties In arbitration the principle was generally accepted that interventions could not be entertained without the agreement in some way of the principal parties to the dispute who had submitted it by agreement to the tribunal, and that third parties had no inherent right to intervention.6 The agreement of the parties could be given in the Compromis or arbitration agreement or subsequently orally or in writing or even perhaps by implication, e.g., not objecting. In a case decided in 1901 the tribunal made an important statement of principle in this regard. In the Guano Case between Chile and France, where a French national was suing the Chilean government under the interstate arbitration agreement the tribunal stated: Attendu que les règles ordinaires relatives à l’intervention en matière d’Arbitrage international, d’après lesquelles “l’intervention spontanèe d’un tiers n’est admissible qu’avec le consentement des Parties qui ont conclu le Compromis” (Règlement proposé par l’Institut de dr. int., Art. 16; Mérignhac, Traité de l‘Arbitrage international, §268), indépendamment du fait qu’elles n’ont été acceptées par aucun Etat et n’ont, en conséquence, aucun caractère obligatoire pour le Tribunal de céans, sont sans application en l’espèce; qu’en effet ces règles ont prévu le case le plus frequent, où les Parties qui conviennent de soumettre un litige aux Arbitres sont en même temps celles entre lesquelles la contestation est née, tandis que le Tribunal Arbitral franco-chilien a été institué par le Chili, la France et la Grande-Bretagne, avec l’adhésion du Pérou, pour permettre à des tiers, savoir aux créanciers du Pérou garantis par le guano, de fair valoir leurs pretentions respectives aux sommes deposes et à deposer par le Chili. . . .7

The general principle in its negative form was clearly stated, although in the instant case it did not apply for the reasons given: Peru was a party to the arbitration agreement. Thus, third parties (the creditors of Peru who were guaranteed by the guano) were permitted to submit their respective claims to the sum deposited or to be deposited by Chile. It follows that the arbitration agreement in question does not need to state the general principle itself whether in its positive form or in the converse, the principle being implied in the agreement. A corollary is that, if the arbitration agreement expressly modifies the principle or incorporates an amend-

6

7

The principle clearly generates locus standi ratione personae (légitimation) and pertains to jurisdiction ratione personae. See also the argument of Malta in the Tunisia/Libya Continental Shelf Case (Intervention), 3 ICJ Pleadings p. 448. (Chile/France, 1901), 15 UNRIAA at p. 315. The principle is dealt with in the 1875 Rules on Arbitration of the Institut de droit international (Art. 16). See Darby, International Tribunals (1904) p. 488. See also Costa Rica v. Nicaragua, decided by the Central American Court of Justice where the same view of the principle was expressed: Hudson, The Permanent Court of International Justice 1920–1942 (1943) pp. 64–6.

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ment to it, this agreement will be respected by the tribunal. The modification or amendment may accrue to the advantage or disadvantage of third party intervenors. There are no ready examples of such modification or amendment but a question that may arise, in the event that such modification or amendment is made, is whether a tribunal, while interpreting it to accord as far as possible with the fundamental principles of international adjudication, has the authority not to apply the modification or amendment to the extent that it violates such fundamental principles in any respect. There is no reason to deny the tribunal this authority, as the integrity of the adjudicatory system is an important fundamental value in international law. There have been many claims on intervention before various Mixed Arbitral Tribunals (MATs). Most of these tribunals were established after the First World War to settle claims arising out of the war.8 They did not provide for pure interstate arbitration in the sense that states were the actual parties in cases, since individuals had standing before them, but they were interstate in that they were created by national agreements. States provided by agreement between them a forum for consideration of their respective nationals’ claims against the other state. This was the model for the Iran-US Claims Tribunal. But what is of significance is that individuals have standing before those MATs as a result of interstate agreements which created genuinely international tribunals.9 The Rules of tribunals such as the Anglo-Austrian, Anglo-Hungarian, and Anglo-Bulgarian Mixed Arbitral Tribunals allowed for third party proceedings where the “defendant claimed to be entitled to indemnity, or contribution or other right arising out of or connected with the subject matter of the claim against any other defendant or any person who is not at the time a party to the cause . . .”. The rules of procedure of some of the MATs allowed any person with “a legitimate interest to intervene” in the case.10 Intervention was, thus, permitted in cases before many MATs.

8

9

10

Jurisdiction was granted to these tribunals by the Treaty of Versailles, Articles 296–7, 304–5, to hear claims by the nationals of allied or associated powers arising out of the exceptional war measures taken by Germany in respect of property or contractual claims. See Simpson and Fox, International Arbitration: Law and Practice (1959) p. 50; Wuhler, “Mixed Arbitral Tribunals”, in Bernhardt (ed.), 2 Encyclopedia of International Law (1981) at pp. 142–6. Brownlie agrees with this view: “The Individual before Tribunals Exercising International Jurisdiction”, 11 ICLQ (1962) p. 701 ff. On MATs see H. Lauterpacht, The Function of Law in the International Community (1933) p. 188. E.g., the Franco-German MAT Rules, Articles 20, 21, 22; the Hungarian-Czech MAT Rules 29, 30.

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In the Ungarische Landes-Central Sprakassa Case11 it was held that intervention should be permitted on the basis of a juridical interest, and that no other justification need be shown. Other cases required the intervenor to show a legitimate interest, rather than a legal interest.12 In the Compagnie internationale des wagons-lits Case13 intervention was allowed, despite party opposition after proceedings had been instituted, where the intervenor had an interest in the property subject of the claim separate from that of the parties. The tribunal accepted that the intervenor’s interest did not need to coincide with that of the defendant, provided it arose out of the same subjectmatter. In that case both Germany and the Compagnie had an interest in the wagon-lits; Germany wanted indemnification, while the Compagnie sought to protect its property. In this case and the SA du charbonnage Frederic-Henri Case,14 where again there was party opposition to the intervention, it was held to be sufficient if the intervenor believed that it would suffer prejudice if the alleged facts were upheld by the tribunal. The tribunal permitted intervention on the basis of alleged, not proven, facts. Before the Austrian-German Tribunal, established in 1957,15 intervention was allowed by any party “substantially interested in the outcome of a dispute between two parties”, and the intervenor was regarded as “on the side of a party whose interest was identical to his own”.16 In the Levis & Levis & Veerman Case17 a request to intervene was rejected, where there were two cases with similar facts pending before the tribunal, and the second case was being deferred until the first had been decided. The plaintiff in the second case requested to intervene in the first, anticipating that the arbitral tribunal would act consistently in both cases. The tribunal held that it had no power to apply by analogy provisions with respect to intervention that applied to other international tribunals, in particular those of the ICJ, as they were applicable to states, not individuals.18 An individual must establish a legitimate interest to be permitted to intervene, which did not exist on these facts. The appropriate time to raise the relevant arguments was during the second case. Clearly the required interest 11 12 13

14 15

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(1927), 4 AD (1927–1928) p. 478. The Czechoslovak State was the respondent. E.g., Comte Andrassy v. Czechoslovak State, 7 Rec TAM p. 880. (1921), referred to in the Tunisia/Libya Continental Shelf Case (Intervention), 3 ICJ Pleadings p. 331. Germany was the respondent. (1921), Decision of the French-German Tribunal, 1 ILR p. 227. The Austrian-German Treaty of 15 June 1957: See Seidl-Hohenveldem, The AustrianGerman Arbitral Tribunal (1972) p. 129. The Krankenvesorgung der Bundesbahnbeantem, Frankfurt Case, Case No. 37, (1962) ibid. p. 146. (1959), 28 ILR p. 587. FRG was the respondent. The distinction between this case and the practice of the ICJ is not apparent. For a discussion of such practice see C.F. Amerasinghe op. cit. note 4 pp. 131 ff.

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was lacking, though intervention was available as a possibility. The proper procedure was consolidation, if at all, not intervention.19 It would appear that in some cases intervention was permitted before MATs in spite of party opposition and on the basis of rules of procedure. It could be that the parties to the Compromis in the rules of procedure as adopted agreed to intervention on the terms incorporated in the rules of procedure. This is a possible explanation. Then the consent thus given could not be withdrawn by specific opposition. Even in the case of MATs the general principle that consent of the parties to the instrument setting up the tribunal to intervention is necessary would apply as a rule. It is not a convincing argument that MATs are different from the usual interstate tribunal or court because individuals are given locus standi before them.20 Indeed, the practice is reconcilable with the opposite view, as shown above. The fact that the issue of consent was not referred to by the tribunal does not mean that consent was not required. The existence of consent could very well have been assumed in the circumstances of the tribunal cases. In the case of arbitral tribunals which have an extended existence the above principles would be equally applicable, because they are arbitral tribunals. It is significant that the constitutive documents of the Iran-US Claims Tribunal contain no explicit reference to interventions,21 nor do the Rules of Procedure of the tribunal contain any reference to interventions,22 although it is conceivable that interventions may take place in relation to the kind of claims over which the tribunal has jurisdiction. The absence of any reference to intervention means that the general principles stated above would apply and interventions would not be permitted in the absence of specific agreement between the parties to arbitration. The ICSID Convention in Chapter IV dealing with arbitration has no express provisions dealing with intervention. Therefore, the general principles referred to above would apply, as being implied.23 The UNCITRAL Model Law on International Commercial Arbitration, though a model for private international and transnational arbitrations also

19

20 21 22 23

On consolidation see Rubino-Sammartano, International Arbitration Law (1990) p. 185, which deals with the Iran-US Claims Tribunal. See Chinkin, Third Parties in International Law (1993) pp. 269–70. See 1 Iran-US CTR (1983) passim. See 2 ibid. (1984) p. 405 ff. In two decisions (the Methanex Corp. Case and the United Parcel Service Case: see www .cyberus.ca/tweiler/naftaclaims) in ICSID arbitrations, under Chapter 11 of the NAFTA, interventions were permitted by virtue of the agreement of the parties to the ICSID Convention flowing from Article 1128 of the NAFTA which allows a party to the NAFTA to “make submissions to a tribunal on a question of interpretation of this Agreement (NAFTA)”.

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where states are involved, is often used as a basis for the settlement of disputes by international arbitral tribunals, viz., the Iran-US Claims Tribunal. It does not contain any reference to intervention. The implication, again, is that the general principles would apply in the absence of explicit incorporation or exclusion, as outlined above. Other Requirements In an early arbitration general principles of law relating to intervention were referred to and it was said that: . . . certaines lois de procédure subordonnet la régularité de l’intervenntion à la condition que l’intervenant justife d’un intérêt juridique à la solution de procès, tandis que d’autres, le Code de procédure français notamment, laissent au juge les pouvoirs d’appréciation les plus étendus, et sont interprétées par la jurisprudence en ce sens que l’existence d’un intérêt materiel et de fait, ou même d’un intérêt et de fait, ou même d’un intérêt purement moral, est une cause suffisante de recevabilité . . .24

This “intérêt juridique” which is broadly defined has elsewhere in arbitration been described as “un intérêt legitime” (in English “a legitimate interest”).25 Thus, in arbitration it was established that, apart from the consent of the parties to the arbitration being a condition for intervention, the intervenor had to satisfy the tribunal that it had a “juridical” or “legitimate” interest in the settlement of the dispute or which may be affected by the decision in the case. In the Société anonyme “Chemins de fer Zeltweg- Wolfsberg et Unterdranburg-Woellan” Case interventions “présentées au nom des obligatoires” could not be admitted because of the absence of this legitimate interest.26 On the other hand, in the Guano Case the intervention of the Société générale et la maison Leiden, Pumsel et Compagnie was admitted because of a legitimate interest on the part of the intervenor in the case between the parties on account of a contract with one of the parties, the tribunal holding that it “n’avait aucune raison de prononcer le conduction d’instance de la Société générale”.27 The arbitration cases discussed at the beginning of the previous section also dealt with this issue and are relevant.

24

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The Guano Case (Chile/France) (1901), 15 UNRIAA at pp. 315–16. In the Société anonyme “Chemins de fer Zeltweg-Wolfsberg et Unterdranburg-Woellan” Case between Austria and Yugoslavia the tribunal used the term “intérêt juridique”, as the tribunal did in the Guano Case: (1938), 3 UNRIAA at p. 1814. The Greek Powder and Cartridge Co. Case (Greece v. Germany) (1958), 1 Entscheidungen at p. 238 (English at p. 136). (1938), 3 UNRIAA at p. 1814. (1901), 15 UNRIAA at p. 316.

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The principle of “legitimate interest” is, in relation to intervention, thus, regarded as a general principle applicable to arbitrations which will be implied even if it is not explicitly stated. The legitimate interest was defined as not merely including “un intérêt materiel et de fait” but also “un intérêt purement moral”. This gives the possible interest a very broad scope. Clearly whether there is the required legitimate interest is a matter for the appreciation of the tribunal. It also depends on the particular circumstances of the case. In the case of institutionalized arbitration (e.g., ICSID) the principle would apply as a general principle of law, even where the relevant jurisdictional instruments are silent on the matter. But clearly also, whether in ad hoc arbitration or in institutionalized arbitration or standing courts, express provisions may modify, define, or even exclude the general principle. Scope and Procedures (i) In arbitral procedure it is well established that the intervenor may not interfere with or change the pleas or the issues raised in the main proceedings. Thus, the intervention is admitted insofar as its object does not conflict with those issues or go outside of them. In Office français v. Office allemand the Franco-German Mixed Arbitral Tribunal said: Attendu que s’agissant d’une action qui tend à établir l’existence d’un accord passé entre deux parties, il est manifeste qu’un tiers, étranger au dit accord, ne saurait valablement intervenir au procès, a mains d’adopter sans modification les conclusions de l’une ou de l’autre partie relativement à la teneur dudit accord; qu’ it s’ensuit que les conclusions prises dans la présente affaire par la succursale de la Banque L.R.P. des Pays autrichiens ne sont recevables qu’en tant qu’ elles concordant avec celles du demandeur; . . .28

It also follows from this that, as the Arbitral Commission on Property, Rights and Interests in Germany said, it “is a principle that a party intervening on behalf of one of the litigants must restrict itself to supporting the litigant’s submissions, and is not entitled to submit new submissions or submissions differing from the main application . . .”29 (ii) Closely connected with this principle relating to the scope of the intervention is the need for the object of the intervention not to be improper. There were no arbitral decisions on this aspect. However, the ICJ dealt directly with this principle in at least two cases. In the Land, Island and Maritime Frontier Dispute Case, the Chamber of the Court refused to regard as improper the

28 29

1922, 1 Receuil TAM at p. 921. Kingdom of the Hellenes v, FRG (1958), 1 Entscheidungen at 172.

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object of informing the Court of the nature of the legal rights of Nicaragua, the intervenor, which were in issue. The Court thought that that seemed to accord with the function of intervention. The Chamber concluded its judgment by stating: it appears appropriate to give some indication of the extent of the procedural rights acquired by the intervening State as a result of that permission (to intervene). This is particularly desirable since the intervention permitted relates only to certain issues of the many submitted to the Chamber. In the first place . . . the intervening State does not become a party to the proceedings, and does not acquire the rights, or become subject to the obligations, which attach to the status of a party, under the Statute and Rules of Court, or the general principles of procedural law. Nicaragua, as an intervener, has of course a right to be heard by the Chamber. That right is regulated by Article 85 of the Rules, which provides for submission of a written statement, and participation in the hearings . . . The scope of the intervention in this particular case, in relation to the scope of the case as a whole, necessarily involves limitations of the right of the intervener to be heard. An initial limitation is that it is not for the intervener to address arguments to the Chamber on the interpretation of the Special Agreement . . . because the Special Agreement is, for Nicaragua, res inter alios acta.”30

In the case Honduras, one of the parties, protested against the making of formal conclusions by Nicaragua. The Court stated: the Chamber must emphasize that States engaged in proceedings before the Court or a Chamber are under a duty to conform with all decision as to procedure, which the Court is specifically empowered to make by Articles 30 and 48 of its Statute. At the same time, in the present case, in which questions of the legal status of waters within the Gulf have been presented by the Parties as closely bound up with the status of the waters outside the Gulf (and, in the presentation of Honduras, with questions of delimitation), the Chamber considers that no useful purpose would be served by endeavouring to single out in the present Judgment which of the contentions of Nicaragua were squarely within the limits of its permitted intervention, and which might be said to have gone beyond those limits. The Chamber has taken account of the arguments of Nicaragua only where they appeared to it to be relevant in its consideration of the legal regime of the waters of the Gulf of Fonseca. The same approach has been adopted in relation to the “formal conclusions” presented by Nicaragua . . . Since Nicaragua has not, by being admitted to intervene, become a party to the case, the Chamber does not see in those conclusions any definition of the petita reflecting the Chamber’s mission. These conclusions were presented . . . as being “to aid the Chamber”, and it is on that basis that the Chamber has taken note of them, to the extent that they relate to the permitted object of the intervention.31

30 31

(Application to Intervene) 1990 ICJ Reports at p. 135. 1992 ICJ Reports at p. 581.

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The second case in which the question of object arose was the recently decided Pulau Ligitan and Pulau Sipidan Case referred to earlier. There the issue was raised by the parties that the object of the Philippine intervention would be inappropriate. The Court held against the intervention on the ground that the intervenor lacked the required legal interest but did address the matter of appropriate object and its relevance in its judgment by stating that only the first of the two objects adduced by the Philippines was appropriate.32 (iii) A matter of some importance related to the appropriate time for intervention in a case. For instance, while it may be proper to permit intervention when the merits are being taken up, it may be too early to permit that intervention at an earlier stage before the merits are addressed. For this reason a premature intervention will be refused by the tribunal. The situation has not arisen in an international arbitration, but came up before the ICJ in the Nicaragua Case33 between Nicaragua and the USA. The Court held that at the stage when issues relating to jurisdiction and admissibility had been raised and needed to be addressed El Salvador’s application to intervene could not be accepted. The Court said: 2. Whereas the Declaration of Intervention of the Republic of El Salvador, which relates to the present phase of the proceedings, addresses itself also in effect to matters, including the construction of conventions, which presuppose that the Court has jurisdiction to entertain the dispute between Nicaragua and the United States of America and that Nicaragua’s Application against the United States of America in respect of that dispute is admissible; 3. Whereas the Court notes that in its Declaration of Intervention the Republic of EI Salvador reserves the right in a later substantive phase of the case to address the interpretation and application of the conventions to which it is also a party relevant to that phase; . . . THE COURT ... (ii) . . . Decides that the declaration of intervention of the Republic of El Salvador is inadmissible inasmuch as it relates to the current phase of the proceedings brought by Nicaragua against the United States of America, . . .34

It is clear that, although this decision has been criticized, the Court was not rejecting the intervention outright but was merely stating that it had been

32 33 34

ICJ Press Release 2001/28. (Order), 1984 ICJ Reports at p. 215. Ibid. at p. 216.

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requested at the wrong point in the proceedings in the light of the content of the intervention. It was possible, as a consequence, for the application for intervention to be filed and considered by the Court after, and in the event that it decided that it could proceed with the examination of the merits. The decision was on a procedural point rather than a rejection of the intervention in substance. (iv) It is also not a requirement that a dispute be defined in prior negotiations before an application can be made for permission to intervene, because the function of intervention is something wholly different from the determination of a further dispute between the state seeking to intervene and one or both of the parties.35

Interim Measures International tribunals generally have an incidental jurisdiction to order interim or provisional measures in cases submitted to them. In the case of this incidental jurisdiction it is necessary not only to know the basis for such jurisdiction, i.e., whether a tribunal has such a jurisdiction in a given case, but also to identify the broad content or extent of the jurisdiction, including the effect of its exercise, because the jurisdiction to order interim measures is only meaningful in relation to its content, extent and effect. Thus, there are three questions to be addressed: (1) Does the tribunal have jurisdiction to order interim measures and what is its basis? (2) What are the principles governing the exercise of the jurisdiction to order interim measures? (3) What is the effect of an order providing for interim measures made in the exercise of this jurisdiction? Basis of Jurisdiction The first issue that arises concerns the source of the authority of a tribunal to order interim measures. Where there is express provision in the instruments setting up the arbitral tribunal, such provisions would govern the

35

See the Land, Island and Maritime Frontier Dispute Case, 1990 ICJ Reports at pp. 113–14. The effect of intervention is also special, including the result that the intervenor is bound by the judgment: see Chinkin, op. cit. note 20 pp. 223–4. See also the Hilti Aktiengesellschaft Case, [1990] ECR II p. 163, decided by the CJEC.

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jurisdictional authority to order interim measures.36 The UNCLOS provides in Article 290 in connection with compulsory settlement procedures which include arbitration that: If a dispute has been duly submitted to a court or tribunal which considers that prima facie it has jurisdiction under this Part or Part XI, section 5, the court or tribunal may prescribe any provisional measures which it considers appropriate under the circumstances to preserve the respective rights of the parties to the dispute or to prevent serious harm to the marine environment, pending the final decision.37

Compromis submitting disputes to arbitration and constitutive instruments of institutionalized arbitral tribunals, such as ICSID, may or may not have such provisions. In the case of the ICSID Convention Article 47 provides in regard to arbitration that: Except as the parties otherwise agree, the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party.

Care has been taken to distinguish provisions in rules of a tribunal from the provisions in the jurisdictional instruments of the tribunal. The former cannot as such change the provisions relating to interim measures in the latter, nor can they affect the general principles of law relating to such measures where they are applicable, in the event, for example, the jurisdictional instruments are silent on the matter. Rules are subordinate to the jurisdictional instrument and general principles and can only be effective to the extent that they are consistent with the provisions of such instruments and general principles. The provisions of Article 26 of the rules of procedure of the Iran-U.S. Claims Tribunal,38 however, incorporate a reference made in the jurisdictional instruments to the UNCITRAL Rules.

36

37 38

On the international arbitral practice on interim measures of protection see Mendelson, 46 BYIL (1972–3) p. 259, Dumbauld, Interim Measures of Protection in International Controversies (1932), Guggenheim, Les mesures provisoires de procédure internationale et leur influuence sur le développement de droit des gens (1931), Elkind, Interim Protection: A Functional Approach (1981). While many agreements providing for the peaceful settlement of disputes contain express terms relating to interim measures, orders on them are infrequent. The practice of the Iran-US Claims Tribunal in regard to interim measures is dealt with in detail in Chapter 10 below. See also Article 292 of the UNCLOS. See I Iran-US CTR, passim. The Claims Settlement Declaration (CSD) of 1981 did state in Article III(2) that the tribunal should conduct its business in accordance with the UNCITRAL model arbitration rules, except as modified (I ibid. p. 10). Article 26 of those rules, which was adopted without change by the tribunal, provides:

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The silence of jurisdictional instruments raises the subsidiary question what principles would govern the ordering of interim measures in these circumstances. It is clear that in the absence of a contrary intention expressed in the jurisdictional instruments, the general principles of law relating to interim measures would apply, which include the authority to order interim measures of protection. As was stated by the Iran-US Claims Tribunal, “(t)his Tribunal has an inherent power to issue such orders as may be necessary to conserve the respective rights of the Parties and to ensure that this Tribunal’s jurisdiction and authority are made fully effective.”39 There is an inherent power in tribunals to order interim measures, which include measures as envisaged by the Iran-US Claims Tribunal in that statement in its judgment. The power, however, is broader, as will be seen. Arbitral tribunals have proceeded on the assumption that they have jurisdiction to issue orders on interim measures even in the absence of express provision in the Compromis or constitutive instruments.40 The scientific literature on the subject reflects the same view. Thus, in the Northern Cameroons Case (Preliminary Objection) Judge Fitzmaurice in a separate opinion stated in dealing with the incidental jurisdiction, inter alia, to decree interim measures: “Although much (though not all) of this incidental jurisdiction is specifically provided

39

40

1. At the request of either party, the arbitral tribunal may take any interim measures it deems necessary in respect of the subject-matter of the dispute, including measures for the conservation of the goods forming the subject-matter in dispute, such as ordering their deposit with a third person or the sale of perishable goods. 2. Such interim measures may be established in the form of an interim award. The arbitral tribunal shall be entitled to require security of the costs of such measures. (2 ibid. p. 429) These are consistent with general principles to the extent that they merely provide for the taking of interim measures without defining their content. It is also clear that Article III(2) of the CSD did not purport to affect the general international law relating to interim measures by permitting the tribunal to change these, rather than implement them, through adoption of rules of procedure. The E-Systems, Inc. Case (1983), 2 Iran-US CTR at p. 57. See also on inherent powers to order interim measures the Rockwell International Systems, Inc. Case (1983), 2 Iran-US CTR p. 269, the RCA Global Communications Disc, Inc. et al. Case (1983), 4 ibid. p. 5, also Iran v. United States (Cases Nos. A15(iv) & A24) (1998), 34 ibid. p. 105. The tribunal referred to inherent powers regardless of the fact that Article 26 of its Rules was expressly envisaged in the constitutive instrument. On the inherent powers of international tribunals to order interim measures of protection see Carson, “Interim Measures of Protection: Theory and Practice in the Light of the Iran-United States Claims Tribunal”, 46 ZAORV (1984) p. 465. See, apart from the judgments of the Iran-US Claims Tribunal, e.g., the Compagnie d’electricité de Sofia et Bulgarie Case (1923), 2 Rec. TAM at pp. 926-7, Ungarische Erdgas A.G. v. Etât romain (1925), 5 Rec. TAM at p. 955, the Patrimoine Giuseppe Camino Case (No. 266), France v. Italy (1960), 13 UNRIAA at p. 451.

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for in the Court’s Statute, . . ., it is really an inherent jurisdiction, the power to exercise which is a necessary condition of the Court – or any court of law – being able to function at all.”41 A question that has confronted the ICJ and also the Iran-US Claims Tribunal concerns the relationship between jurisdictional authority to decide the merits and jurisdiction to decree interim measures. The question may be framed as whether in order that a tribunal have jurisdiction to order interim measures it must also have jurisdiction to decide the merits of the case or whether something less is required. There are several possible approaches which have been mooted in the ICJ of which the last referred to here has been accepted by the Court. The approach accepted by the Court may be taken by arbitral tribunals. The first is that the Court must have a clearly established jurisdiction. The view was expressed by dissenting judges (though not the Court itself ) in the Anglo-Iranian Oil Co. Case,42 by dissenting Judge Forster in the Nuclear Tests Cases,43 and in the separate opinion of Judge Morozov in the Aegean Sea Continental Shelf Case.44 This view is, however, in conflict with the view taken by the Court discussed below. A second possible view is that the question of jurisdiction is irrelevant to the ordering of interim measures. Interim measures can he ordered irrespective of any jurisdictional issues. The view has not been accepted either by the Court or by any of its judges. A third test is that it must be reasonably probable that the Court has jurisdiction. This test was suggested in individual opinions in cases such as the Anglo-Iranian Oil Co. Case,45 and the Icelandic Fisheries Jurisdiction Case.46 A fourth approach regards the question of jurisdiction as only one of the many circumstances to be considered. Judge Jiménez d’Aréchaga suggested this in the Nuclear Tests Cases47 and the Aegean Sea Continental Shelf Case,48 basing his view on the belief that the Court’s power, in respect of interim

41

42 43 44 45 46 47 48

1963 ICJ Reports at p. 103 (emphasis added). See also Elkind, op. cit. note 36 pp. 162–3, Cheng, General Principles of Law as Applied by International Courts and Tribunals (1953) p. 269, Dumbauld, op. cit. note 36 pp. 143–4, 181. Contra Sztucki, Interim Measures in the Hague Court (1983) pp. 61–7. 1951 ICJ Reports at p. 89. 1973 ICJ Reports at p. 99. 1976 ICJ Reports at p. 3. 1951 ICJ Reports at p. 97 per Judges Winiarski and Badawi Pasha dissenting. 1972 ICJ Reports at p. 21 ff., per Judge Padilla Nervo dissenting. 1973 ICJ Reports at p. 143. 1976 ICJ Reports at p. 16.

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measures, is based on Article 41 of the statute and not on the subsequent jurisdictional instruments of the parties. Lastly, there is the “prima facie” test. Judge Lauterpacht suggested, in the Interhandel Case,49 that there must be an instrument which prima facie confers jurisdiction on the Court and which contains no reservation which obviously excludes the dispute from that jurisdiction. This test was adopted by the Court in the Icelandic Fisheries Jurisdiction Case 50 and Nuclear Tests Cases.51 In the Nicaragua Case52 Nicaragua attempted to found jurisdiction on the two states’ optional clause declarations. Though the Court later held that it had no jurisdiction on this basis, it made an order indicating interim measures before considering the question of jurisdiction. It said that it need not satisfy itself as to its jurisdiction before so doing, but it must find, as it had done in the case, that there was a prima facie basis for it. In the Case Concerning the Land and Maritime Boundary between Cameroon and Nigeria, the Court said that it “may not indicate provisional measures unless the provision invoked by the Applicant appears, prima facie, to afford a basis on which the jurisdiction of the Court might be founded”.53 A similar approach was taken by the ICJ in the Breard Case54 and the La Grand Case.55

49 50 51

52

53 54 55

1957 ICJ Reports at p. 118–19. 1972 ICJ Reports at p. 12. 1973 ICJ Reports at p. 99. See also the Case Concerning the Arbitral Award of 31 July 1989, 1990 ICJ Reports p. 64, and the Passage through the Great Belt Case, 1991 ICJ Reports p. 12, which was settled. The Court avoided the issue in the Aegean Sea Continental Shelf Case, 1976 ICJ Reports p. 3, because it took the view that it was not called upon to prejudge jurisdiction over the merits, in fact declining to make an order for other reasons. (Provisional Measures) 1984 ICJ Reports p. 169. See on this case, Malloy, “Developments in the International Court of Justice: Provisional Measures in the Nicaragua Case”, 6 NYJICL (1984) p. 55, Tama, “Nicaragua v. United States: the Power of the International Court of Justice to Indicate Interim Measures in Political Disputes”, 4 Dickinson JIL (1985) p. 65. 1996 ICJ Reports at p. 21. Order of 9 April 1998, 1998 ICJ Reports at p. 255. Order of 3 March 1999, 1999 ICJ Reports at p. 15. On the Breard Case and the La Grand Case see Rieter, “Interim Measures by the World Court to Suspend the Execution of an Individual: the Breard Case”, 16 Neth. Quarterly HR (1998) p. 475, Addo, “Interim Measures of Protection for Rights under the Vienna Convention on Consular Relations”, 10 European JIL (1999) p. 713. In the Arrest Warrant of 11 April 2000 Case (Provisional Measures) the Court said: 67. Whereas, when the Court has before it a request for the indication of provisional measures, it has no need, before deciding whether or not to indicate such measures, to satisfy itself beyond doubt that it has jurisdiction on the merits of the case, but whereas it cannot nevertheless indicate those measures unless the provisions invoked appear prima facie to constitute a basis on which its jurisdiction could be founded;

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In this connection what is important is that there must be a prima facie basis for the Court to proceed to decide the merits of the case. Thus, conversely, if it is clear that the case is inadmissible, even if it had jurisdiction, the Court cannot issue orders for interim measures. In the Request for Examination of the Situation Case,56 New Zealand sought the indication of interim measures in the context of its claim that proposed French underground nuclear tests fell within the terms of paragraph 63 of the 1974 judgment, which stated that “if the basis of this judgment were to be affected, the Applicant could request an examination of the situation in accordance with the provisions of the Statute”. Part of the basis of the judgment was the obligation which the Court had found that France unilaterally made not to engage in atmospheric testing. The Court found that, because the case concerned underground testing, it had no bearing on the 1974 judgment, which was confined to atmospheric testing, and dismissed the New Zealand request in limine. It said that it became unnecessary to discuss the possibility of the existence of jurisdiction.57 The explanation is that it was clear that the case was inadmissible, irrespective of jurisdiction. Because it was clear that the Court had no authority to proceed with the merits of the case, on account of an objection to admissibility, other considerations relating to jurisdiction became irrelevant.58 Thus, positively there must be a prima facie basis for jurisdiction, i.e. for proceeding to decide the merits of the case, if the Court is to exercise jurisdiction to order interim measures. Conversely or negatively it follows that where it is clear that there is no basis for jurisdiction at all or that the case is clearly inadmissible, the Court cannot exercise the jurisdiction relating to interim measures.59

56 57 58

59

68. Whereas the Court concludes that the declarations made by the Parties pursuant to Article 36, paragraph 2, of its Statute constitute prima facie a basis on which its jurisdiction could be founded in the present case” (2000 ICJ Reports paras. 67–68). However, it found that there was no reason for ordering interim measures. See also the Genocide Case, 1993 ICJ Reports p. 3. 1995 ICJ Reports at p. 306. Ibid. See also for a finding that there was no prima facie basis for jurisdiction the ten Legality of Use of Force Cases (Provisional Measures) 1999 ICJ Reports at p. 139, 273, 373, 432, 492, 557, 671, 773, 839, 925. See for a discussion of these cases C.F. Amerasinghe, op. cit. note 4 pp. 149–50. There are some difficulties with the Case Concerning the Land and Maritime Boundary between Cameroon and Nigeria as to how these principles have been applied by the Court. See, for a discussion of this case, C.F. Amerasinghe, op. cit. note 4 pp. 150–1. However, the conclusion reached above is valid. It is open for the Court to find that it does not have jurisdiction over the merits even in dealing with incidental jurisdiction on interim measures.

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The view taken by the ICJ on the requirement of a prima facie basis for jurisdiction (and by implication for the admissibility of the application) has been accepted in arbitration where the jurisdiction to order interim measures flowed from the inherent powers of the tribunal which were elaborated upon in the rules of procedure of the tribunal. In the Bendone-Derossi International Case, the Iran-US Claims Tribunal stated: In an appropriate case, an international tribunal will grant interim measures of protection before determining its jurisdiction over the merits of the claim, provided that it is satisfied that there is, at least, a prima facie showing that it has jurisdiction over the substantive claim. This test was most recently applied by the International Court of Justice in its Order of 10 May 1984 in Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Provisional Measures, ICJ Reports 1984, p. 169, 179. The Court stated, at paragraph 24 of the Order: [O]n a request for provisional measures the Court need not, before deciding whether or not to indicate them, finally satisfy itself that it has jurisdiction on the merits of the case, or, as the case may be, that an objection taken to jurisdiction is well-founded, yet it ought not to indicate such measures unless the provisions invoked by the Applicant appear, prima facie, to afford a basis on which the jurisdiction of the Court might be founded . . . Without prejudice to the final determination of the jurisdictional issue, the Tribunal is not at present satisfied that it appears, prima facie, that there exists a basis on which it can exercise jurisdiction over the present claim.60

What was in issue in the case was the execution of an ICC arbitral award. The tribunal made it quite clear that its jurisdiction did not include this function in saying that: The Tribunal at this stage of the proceedings does not consider it a reasonable interpretation of the Algiers Declarations that it should act as a court issuing exequatur or that it should otherwise be empowered to enforce arbitral awards of other, independently constituted arbitral tribunals. This Tribunal is not a national court; it has a specific international character. It is not a manifestation of any one national public authority, and it cannot invest such other awards with any validity or status under any system of national law that those awards do not already possess.61

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(1984), 6 Iran-US CTR at pp. 131–2. Ibid. at p. 133. For other cases decided by the Iran-US Claims Tribunal, dealing with prima facie jurisdiction see, e.g., the Questech, Inc. Case (1983), 2 ibid. p. 95, the Rockwell International Systems, Inc. Cases (1983), 2 ibid. pp. 310 and 369, also the Component Builders, Inc. et al. Case (1985), 8 ibid. p. 3. See also the Eric M. Hermann Case (1958), 2 Entscheidungen at p. 134, where the international arbitral tribunal said that in spite of an objection to receivability being raised it was not prevented from ordering interim measures.

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It was clear that a prima facie basis for jurisdiction did not exist because its constitutive instruments manifestly did not include the kind of function envisaged by the claimant.62 The principle was applied by the ITLOS, for instance, in the Mox Plant Case where in the case submitted to an arbitral tribunal under the UNCLOS, the respondent contended that the ITLOS had no jurisdiction to prescribe provisional measures. It found that the Annex VII arbitral tribunal would prima facie have jurisdiction over the dispute and prescribed provisional measures. 63 The principle that in order to exercise the authority to issue orders for interim measures an international tribunal must have a prima facie basis for jurisdiction to decide the merits of the case, is accepted in arbitration, inter alia, as a general principle of law. Moreover, as in the case of the UNCLOS, a tribunal other than the tribunal having jurisdiction over the merits may be authorized to order interim measures.64 In considering the sources or titles of jurisdiction at the stage of deciding on interim measures, where the tribunal finds that it has no prima facie basis for jurisdiction on the basis of the titles cited in the application or early in the case, it will not consider a claim that it has such jurisdiction on the basis of another title to jurisdiction introduced late in the proceedings on interim measures. Thus, in the first Legality of the Use of Force Cases (Provisional Measures), the ICJ stated: “44. Whereas the invocation by a party of a new basis of jurisdiction in the second round of oral argument on a request for the indication of provisional measures has never before occurred in the Court’s practice; whereas such action at this late stage, when it is not accepted by the other party, seriously jeopardizes the principle of procedural fairness and the sound administration of justice; and whereas in consequence the Court cannot, for the purpose of deciding whether it may or may not indicate

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Article 290 of the UNCLOS gives an arbitral tribunal (and ITLOS) authority to prescribe provisional measures, explicitly where it “considers that prima facie it has jurisdiction” under the relevant provisions of the Convention. (2001) See press release ITLOS/Press 62, 3 December 2001. For the acceptance of the principle of prima facie jurisdiction by ICSID tribunals see C.F. Amerasinghe, op. cit. note 4 pp. 488–9. See Article 290(5) of the UNCLOS. In both the Mox Plant Case (2001), Press Release ITLOS/Press 62, 3 December 2001, and the Southern Bluefin Tuna Cases (1999), 38 ILM p. 1624, the ITLOS had to deal with requests for interim measures in cases referred to arbitral tribunals under Article 287(C) and Annex VII of the UNCLOS.

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provisional measures in the present case, take into consideration the new title of jurisdiction which Yugoslavia sought to invoke on 12 May 1999.”65 What is a late filing of such a claim is a matter of procedure to be decided by the tribunal, taking into account procedural fairness and the sound administration of justice. There is no reason why arbitral tribunals should not follow the approach of the ICJ on the issue of late filings. Although the matter has not arisen before any international tribunal, a question of importance is whether the tribunal has authority to and must raise proprio motu the issue whether it has incidental jurisdiction to decree provisional measures. The answer to the question must be in the affirmative, as the same principle applies to this aspect of compétence (jurisdiction) as to any other. The Principles Underlying the Exercise of the Jurisdiction Arbitral tribunals have referred, for example, to the “conservation of a right”,66 stated that parties must abstain from all measures “likely to prevent definitely the execution of their obligations”,67 or that “the full effectiveness of the Tribunal’s decisions” must be ensured,68 or that “this particular form of relief or remedy, pendente lite, may be granted when the rights and/or property which the issuance of such measures is designated to protect are deteriorating in such a manner that irreparable harm may be done to the said rights and/or property . . . before a First Award is rendered”.69 Provisions in constitutive instruments of tribunals, whether standing or arbitral, on the other hand, refer to “provisional measures which should be taken to preserve the rights of the parties” or use similar language.70 Some

65

66 67 68

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1999 ICJ Reports at p. 139. See also the sixth such case: ibid. at pp. 556–7. In the Holiday Inns Case (1978), which was later discontinued, in regard to an order for provisional measures, though issues of jurisdiction had been raised, the tribunal did not examine whether there was prima facie jurisdiction nor was the issue raised by the parties at the tribunal proprio motu (see 51 BYIL (1980) at pp. 135 ff.). This was patently incorrect, unless it was clear to all concerned that the tribunal had such jurisdiction. The Eric M. Hermann Case (1958), 2 Entscheidungen at p. 134. The Holiday Inns Case (1972), 51 BYIL (1980) at p. 136, an ICSID arbitration. The E-Systems, Inc. Case (1983), 2 Iran-US CTR at p. 57, the Behring International, Inc. Case (1985), 8 ibid. at p. 276. The United Technologies International Inc. Case (1986), 13 ibid. at p. 257. See, e.g., Article 47 of the ICSID Convention, Article 41 of the ICJ Statute, Article 290 of the UNCLOS. In the Holiday Inns Case (1978), the ICSID Tribunal held that, because Article 26 of the ICSID Convention stated that the consent to arbitration was “to the exclusion of any other remedy”, the ICSID tribunal was not prevented from exercising jurisdiction under Article 47 to order provisional measures simply on the grounds that the Moroccan courts had exercised such jurisdiction: see Lalive, “The First World Bank Arbitration (Holiday

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constitutive instruments are silent on when provisional or interim measures may be ordered. The UNCLOS specifically mentions in Article 290(1) preventing “serious harm to the marine environment” as one object of interim measures, which include interim measures ordered in arbitrations pertinent to UNCLOS. This was the objective implemented in the orders of interim measures in the Bluefin Tuna Cases made in 1999. Clearly, to the extent that a Compromis or a constitutive instrument of a tribunal is specific, the order of interim measures will be governed by the principles stated there. But, first, where the constitutive instrument is silent on the principles, the issue arises what are the underlying principles, objectives and limits of interim measures. Secondly, what is the implication of preserving the rights of the parties, which is mentioned in many constitutive instruments and is regarded as the object of interim measures, where an object must be implied, is a question that arises. The approach of the ICJ, which is extensive, and the manner in which they have dealt with problems that have arisen are illuminative in this regard. In the case of the ICJ, as was the case of the PCIJ, the statute clearly states the object of interim or provisional measures as being that of preserving the respective rights of the parties. The PCIJ and the ICJ have regarded this in their practice as covering both what may be called positive and negative orders. They have not only ordered states to refrain, and ensure that others refrain, from certain behaviour likely to aggravate or extend the dispute or to prejudice the rights that might result from the final judgment, as in the Electricity Company of Sofia and Bulgaria Case,71 the Nuclear Tests Cases,72 and the Nicaragua Case,73 but also have demanded certain positive actions by the parties. Thus, for example, in the Anglo-Iranian Oil Company Case74 the ICJ ordered that there should be “established by agreement between the Iranian Government and the United Kingdom Government a Board to be known as the Board of Supervision” and set out in detail the composition and duties of the Board. Again, in the Fisheries Jurisdiction Cases the Court said that the UK “should ensure that vessels registered in the United Kingdom do not take an annual catch of more than 170,000 metric tons of fish”, and that

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Inns v. Morocco) – Some Legal Problems”, in 1 ICSID Reports at pp. 656 ff. On provisional measures under the ICSID Convention, see also Delaume, “ICSID Tribunals and Provisional Measures”, I FILJ (1986) p. 237, Friedland, “Provisional Measures and ICSID Arbitration”, 2 Arb. International (1986) p. 335, Friedland, “ICSID and Court-Ordered Provisional Measures: An Update”, 4 ibid. (1988) p. 161. PCIJ Series A/B No. 79, Order of 5 December 1939. 1973 ICJ Reports at pp. 99 and 135. (Provisional Measures) 1984 ICJ Reports p. 168. 1951 ICJ Reports p. 89.

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the UK “should furnish the Government of Iceland and the Registry of the Court with all relevant information, orders issued, and arrangements made concerning the control and regulation of fish catches in the area”.75 In other respects the approach of the PCIJ and the ICJ may be summarized as follows:76 (1) The object of interim measures is to preserve the respective rights of the parties and to prevent likely action that is prejudicial to the rights of either party being taken before the final decision of the Court. (2) The object of interim measures presupposes that irreparable prejudice should not be caused to rights which are subject of a dispute. (3) The Court’s judgment should not be anticipated by reason of any initiative regarding the measures which are in issue. (4) There must be some urgency requiring measures to be taken. As corollaries to these principal requirements, (i) Measures ordered must not impair rights of a party which appear prima facie to be enjoyed, e.g., by virtue of an SC resolution; and (ii) The Court cannot make definitive findings of fact, the right of the respondent state to dispute the alleged facts and argue on the merits being unaffected by the Court’s decision on interim measures. The approach taken by arbitral tribunals which have not had to deal very often with requests for interim measures has been similar to that taken by the ICJ. The Iran-US Claims Tribunal has dealt in a few cases with the issue

75

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1972 ICJ Reports pp. 12 and 30. See also the Iranian Hostages Case, 1979 ICJ Reports p. 7, where interim measures were ordered. Generally on interim measures of protection in the ICJ see: Sztucki, Interim Measures in the Hague Court (1983), Elkind, Interim Protection, a Functional Approach (1981), Mendelson, “Interim Measures of Protection in Cases of Contested Jurisdiction”, 46 BYIL (1972–3) p. 258, Merrills, “Interim Measures of Protection and the Substantive Jurisdiction of the International Court”, 36 CLJ [1977] p. 86 and “Interim Measures of Protection in the Recent Jurisprudence of the International Court of Justice”, 44 ICLQ (1995) p. 90, Oda, “Provisional Measures: The Practice of the International Court of Justice”, in Lowe and Fitzmaurice (eds.), Fifty Years of the International Court of Justice (1996) p. 541. See also Collins, “Provisional and Protective Measures in International Litigation”, 234 Hague Recueil (1992) at pp. 224 ff., Collier and Lowe, The Settlement of Disputes in International Law (1999) pp. 168 ff., Gray, Judicial Remedies in International Law (1987) pp. 69 ff. For a discussion of the jurisprudence of the World Court on this aspect see, inter alios, C.F. Amerasinghe, op. cit. note 4 pp. 154–9.

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of interim measures, sometimes citing cases of the ICJ. Thus, in the United Technologies International Inc. Case the tribunal said 17. This article (Article 26 of the Tribunal Rules) embodies the generally accepted rule that an international arbitral tribunal is allowed to take interim measures. According to the practice followed by international arbitral tribunals, this particular form of relief or remedy, pendente lite, may be granted when the rights and/or property which the issuance of such measures is designated to protect are deteriorating in such a manner that irreparable harm might be done to said rights and/or property of the applicant before a Final Award is rendered. 18. The circumstances in which interim measures can be granted have been clearly stated in several decisions of the International Court of Justice. In the Anglo-Iranian Oil Co. Case the International Court of Justice, on 5 July 1951, issued an order indicating provisional measures and laid down, inter alia, the principle that the object of interim protection is “to preserve the respective rights of the Parties pending the decision of the Court”. The Court also tends to consider that the violation of a right must cause “irreparable prejudice” to justify the granting of interim measures. On 17 August 1972 the Court, in the Fisheries Jurisdiction Case, granted interim measures requiring that the litigants ensure that no action be taken which might prejudice the rights of the other party. The same principle was repeated by the Court in its orders of 22 June 1973 in the Nuclear Test Case.77

In the E-Systems, Inc. Case the tribunal in ordering interim measures said: This Tribunal has an inherent power to issue such orders as may be necessary to conserve the respective rights of the Parties and to ensure that this Tribunal’s jurisdiction and authority are made fully effective. Not only should it be said that the award to be rendered in this case by the Tribunal, which was established by inter-governmental agreement, will prevail over any decisions inconsistent with it rendered by Iranian or United States courts, but, in order to ensure the full effectiveness of the Tribunal’s decisions, the Government of Iran should request that actions in the Iranian Court be stayed until proceedings in this Tribunal have been completed.78

In the Holiday Inns Case an ICSID tribunal applying the express provisions of the ICSID Convention said: The Parties were in agreement to recognize before the Tribunal that at the date of this Decision contractual relations remain in existence between them based on a series of commitments the foundation of which apparently is the Contract of December 5, 1966. It follows that the Parties are under an obligation

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(1986), 13 Iran-US CTR at pp. 257–8. (1983), 2 ibid. at p. 57. See also on the stay of other proceedings as an interim measure in the Iran-US Claims Tribunal, Aldrich, The Jurisprudence of the Iran-US Claims Tribunal (1996) pp. 142 ff. On measures other than the stay of other proceedings in the same tribunal see Aldrich, ibid. pp. 150 ff. On the practice of the Iran-US Claims Tribunal relating to the ordering of particular interim measures see further below Chapter 10.

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In Patrimoine Giuseppe Camino Case (No. 266) a Franco-Italian tribunal said in respect of interim measures: En attendant que la procédure arbitrale se déroule, le Gouvemement français avait le devoir de maintenir les choses en l’état, en s’abstenant de toute initiative de nature à le placer dans l’impossibilité de faire face à ses obligations internationales telles qu’elles auraient été définies par les arbitres.80

The jurisdiction to grant interim protection through the ordering of measures clearly involves in its exercise a measure of judgment on the part of a tribunal. The decision whether to order measures or not is, however, not based on the exercise of an arbitrary discretion. There are certain principles which have been applied and which require tribunals to take decisions based on them and exclusive of other considerations, such as political advisability or convenience. The principles applied depend on the express provisions of the constitutive instruments of the tribunal concerned but, where these are nonexistent or require interpretation, the practice of the ICJ in its approach to the award of interim measures contains perhaps the best reflection of the basic principles. The Legal Effect of Orders of Interim Measures As a general rule arbitral decisions have not discussed the legal effect of orders of interim measures. The ICJ has recently in the La Grand Case, interpreting Article 41 of its statute, pronounced that such orders were legally binding, in the same way as other decisions in its judgments and mandatory, and that they were not merely recommendations or hortatory. The Court made an extensive analysis of how Article 41 was to be interpreted81 and concluded that orders for interim measures are binding in effect. This is so when they are intended to have this effect. The Court left open the possibility (see para. 110 of the judgment) for the Court to make non-binding decisions which would then be recommendatory. In fact the Court has never done this. All its orders of interim measures have been intended to be binding.

79

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51 BYIL (1980) at p. 136. For other ICSID cases on the method and discussion of ICSID practice see C.F. Amerasinghe, op. cit. note 4 pp. 459–91. (France v. Italy) (1960), 13 UNRIAA at p. 451. 2001 ICJ reports paras. 98–104, 107–10. See also C.F. Amerasinghe, op. cit. note 4 pp. 160–3.

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The possibility that Article 41 prescribed non-binding orders arose because of the language used in the texts, particularly the English text. It is not at all clear that, had the texts been differently worded, for example, leaving the issue of legal effect or orders open or undefined, that the assumption could be made that such orders are merely hortatory and not binding. In the case of arbitration it cannot be said that this assumption has ever been made nor has the issue been properly addressed or settled by tribunals. The general approach implied has been that such orders are decisions taken by tribunals and are, like the decisions taken in the final judgment, binding. No distinctions of any kind have been made in the cases between such orders and the dispositifs of judgments of tribunals. Apart from the interpretative exercise performed by the ICJ, which was necessary in the circumstances, it is in keeping with the judicial function and process that orders of interim measures have legally binding effect, unless they are not intended to do so, rather than that presumptively they do not have such binding effect. This is required, it may be asserted, by the demands or integrity and effectiveness for the judicial process. In the context of the general theory of adjudication this is not a position to justify which needs much argument or dialectic.82 In addition, what was said by the Court in its disquisition on Article 41 on the purpose and object of the statute83 could be extended to all judicial proceedings, including arbitrations, whatever are the jurisdictional instruments. The “basic function of judicial settlement of international disputes by binding decisions” belongs to all international tribunals of a judicial nature, including arbitral tribunals, not only to the ICJ as a standing court. The object of

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Fitzmaurice regarded as binding the orders of interim measures by the ICJ: see “The Law and Practice of the International Court of Justice, 1951-4: Questions of Jurisdiction, Competence and Procedure”, 34 BYIL (1958) p. 1. Judge Ajibola agreed with this view: see the Bosnia Genocide Convention Case (Provisional Measures), 1993 ICJ Reports at p. 397. See also on the subject, H. Lauterpacht, Development of International Law by the International Court of Justice (1958) pp. 253–4. Collins disagrees with the view that such orders are binding in international litigation: see “Provisional and Protective Measures in International Litigation”, loc. cit. note 75 at pp. 216–20, and see the authorities reviewed there. See also Oda, loc. cit. note 75 at pp. 554–6. The view has been expressed that an order of interim measures cannot be enforced through the SC under Article 94(2) of the Charter, because that provision covers only “judgments”; Mosler, in B. Simma (ed.), The Charter of the United Nations (1995) at pp. 103–4. But it is a question whether “judgments” in that Article excludes orders for interim measures which have the same binding force as the dispositifs of a final judgment on the merits or, for that matter, on competence or admissibility. Collier and Lowe agree with Mosler on this point: see op. cit. note 75 p. 175. See 2001 ICJ Reports para. 102 (the La Grand Case).

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interim measures in general, as was said to be the case under Article 41, is to prevent the tribunal “from being hampered in the exercise of its functions” particularly “because the respective rights of the parties to a dispute” before the tribunal “are not preserved”. Thus, it follows from this object and purpose that “the power to order interim measures entails that such measures should be binding, insofar as that power is based on the necessity, when the circumstances call for it, to safeguard, and to avoid prejudice to, the rights of the parties as determined by the final judgment” of the tribunal. On the binding effect of orders of interim measures, the ICSID tribunal in the Occidental Petroleum Corporation et al. Case said that orders for provisional measures, though described as recommendations in Article 47 of the ICSID Convention, were orders, not mere recommendations, and implied that they were binding on the parties.84 On the same point the language used in the Tokios Tokele’s Case may be cited: It is to be recalled that, according to a well-established principle laid down by the jurisprudence of the ICSID tribunals, provisional measures ‘recommended’ by an ICSID tribunal are legally compulsory; they are in effect ‘ordered’ by the tribunal, and the parties are under a legal obligation to comply with them.85

The Iran-US Claims Tribunal has, beginning with the Rockwell International Systems, Inc. Case, made clear its view that interim measures ordered by it are binding and create international obligations. In that case the tribunal said: The consistent practice of the Tribunal indicates that this inherent power is in no way restricted by the language in Article 26 of the Tribunal Rules. Further, the Government of Iran and the Government of the United States have agreed in the Algiers Declarations to confer upon this Tribunal jurisdiction over certain claims. It follows that both governments are under an international obligation to comply with any decisions rendered by the Tribunal pursuant to this agreement.86

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(2007), para. 58. (2003) Procedural Order no. 1 para. 4, ibid. (1983), 2 Iran-US CTR at p. 371. The same language was used in the RCA Global Communications, Inc. Case (1983), 4 ibid. at pp. 7–8. See also the E-Systems Inc. Case (1983), 2 ibid. at p. 60, the Ford Aerospace and Communications Corp. at al. Case (1984), 6 ibid. p. 104, the Aeronutronics Overseas Services, Inc. Case (1985) 8 ibid. at p. 78, the Linen, Fortinberry and Associates, Inc. Case (1985) 8 ibid. p. 85. In some cases, in which proceedings in Iranian courts had not been discontinued pursuant to orders of interim measures, the same tribunal has not hesitated to emphasize in effect that such proceedings were without legal effect whether concluded before or after the date of the tribunal’s award: see the Touché Ross and Co. Case (1985), 9 ibid. at p. 294, the Harris International Telecommunications, Inc. Case (1987), 17 ibid. at pp. 86–7, the Linen, Fortinberry and Associates, Inc. Case (1988), 19 ibid. at p. 68.

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That tribunal may use the word “request” rather than “order” when addressing either government in a decision on interim measures. However, such a request is in effect an order. When questioned as to the meaning of the term “request,” the tribunal in the Behring International, Inc. Case, for example, made it clear that the term meant the same as “order.”87

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(1985), 8 ibid. at p. 241.

Chapter Eight Jurisdiction vis-à-vis Remedies What is of concern here is the jurisdiction which international tribunals have to order remedies or to decide on what is to be done in terms of redress, if there has been a violation of the law, not particularly what they have actually done in the exercise of such jurisdictional authority. It may be the case that the exercise of choices once jurisdiction is established depends to some extent on the parameters of jurisdictional authority and that the former is inextricably linked with the latter. But it is possible to identify those broad parameters which define scope and leave some room for freedom in the exercise of the jurisdiction provided they are not exceeded.1 A second matter deserving attention is the source of the jurisdiction and particularly whether there is any inherent jurisdiction in the international judicial function to order remedies or particular types of remedies. Such inherent jurisdiction may or may not depend on the nature of the tribunal and the source of its establishment. A basic principle relevant to jurisdiction in relation to remedies is one that applies to international adjudication in general, namely that jurisdiction is consensual and depends basically on the agreement of the parties. Agreement in one form or another which is binding may define the scope of jurisdiction. One characteristic that needs to be noted in connection with possible inherent jurisdiction, however, as pointed out in other areas discussed earlier in

1

Remedies in international law in a variety of aspects have been discussed in various contexts by several authors but none have really addressed the basic jurisdictional issues that arise. Remedies as such have been considered, inter alios, by Personnez, La Réparation du préjudice en droit international public (1939); Reitzer, La Réparation comme conséquence de l’acte illicite en droit international (1938); Schermers, Judicial Protection in the European Communities (1992); Gray, Judicial Remedies in International Law (1987); Gray, “Is there an International Law of Remedies?” 56 BYIL (1985) p. 25; Gross, “Limitations upon the Judicial Function”, 58 AJIL (1964) p. 415. See further the bibliography in Gray, op. cit. above pp. 239–47.

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this work, is that there is logically a general principle that anything agreed to by the parties in relation to jurisdiction which conflicts with the fundamental judicial character of an international tribunal cannot be recognized as having effect. A corollary to this principle is the proposition that a tribunal must enjoy the jurisdiction as inherent which its judicial character requires. But this principle has two aspects. First, the agreement of the parties may alter, modify or derogate from jurisdictional authority which would otherwise flow as inherent from the judicial character of a tribunal. Secondly, such change must not deprive a tribunal of what is inherently unalterable in its jurisdiction because of its judicial character. There is clearly here a ius cogens in the law of international adjudication. What the principle entails is that, where an agreement deprives a tribunal of jurisdiction to the extent that it ceases to be able to perform its judicial function as a judicial tribunal, that agreement is one which cannot be recognized or to which effect cannot be given.2 These principles are relevant to the law of jurisdiction in respect of remedies, as they apply elsewhere in the area of jurisdiction. Generally, problems in regard to them have not arisen nor have they often been discussed, particularly the principle flowing from ius cogens referred to above. There may be a question as to what is inherent in remedial jurisdiction and what is the nature of an arbitral tribunal’s mandate, but the applicability of the general principle of inherence cannot be disputed, because not giving effect to it would render nugatory the existence of the judicial function in the international legal system. A problem may arise with distinguishing between the jurisdiction to order or award remedies and the principles of law and limits applicable to the content of such remedies, i.e. applying the distinction between jurisdictional authority and the principles relating to the implementation of jurisdictional authority. For example, the question whether a tribunal has jurisdiction to award damages can and must be distinguished from the question whether punitive damages may be awarded or damnum emergens may be included in an award of damages as an indirect injury, though the distinction may be a fine one. There may be other areas of remedies in which distinctions of this kind must be made. It is easy to see that the distinction applicable in the above kind of situation may not be as easy to apply as recognizing the similarity between the authority to award damages and the authority to order specific performance, both of which can legitimately be regarded as matters of remedial jurisdiction. The kind of distinction identified must, however, be made as it corresponds to the distinction between competence and merits.

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On this see Chapter 3.

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Difficulties may also arise in identifying sources of jurisdictional authority. As already pointed out, consent is a basic source of remedial jurisdiction as it is for jurisdictional competence on the merits. This means that the consensual instruments relevant to a tribunal’s establishment and functioning must be examined first to identify the scope of and limits on remedial jurisdiction. A question that may be raised is why a distinction should be drawn between competence to settle a dispute on the merits and compétence (jurisdiction) to determine reparation in the same case. Could it not be argued that deciding the merits and determining reparation for any violation of the law are so closely linked that competence to deal with the former necessarily includes the competence to deal with the latter, because they both concern settlement of the dispute?3 Just as, once competence to settle the dispute is established within the agreed parameters, if relevant, the tribunal has jurisdiction to select and apply to the merits the substantive and procedural law which may, however, also be subject to agreement of the parties, so if such competence is established, must it not entail jurisdiction to select and apply the remedies and the law applicable to them, because that is a matter which is intrinsic to the judicial function of settling disputes in general? In the Nicaragua Case (Merits) the ICJ referred to the submissions of the claimant on the compensation to be paid as reparation as being submissions “on the merits”.4 This statement, not incorrectly, apparently assimilates matters relating to remedies in all kinds of adjudicatory settlement to matters of merits. In a sense matters relating to remedies may be regarded as relating to the merits insofar as they may be contrasted with jurisdictional matters which precede that taking up of the merits or matters of incidental jurisdiction but this does not preclude the treatment of remedies as distinct from the merits proper, particularly for the purposes of the analysis of jurisdictional aspects. It is also the case that constitutive instruments do sometimes deal separately with jurisdictional authority to grant remedies and authority to decide the merits proper of the case. While there is evidence of the assimilation of remedies to matters of merits, however, the history of adjudicatory settlement in the modern era (since the

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4

See possibly the statement of the ICJ in regard to reparation in the Nicaragua Case (Merits), 1986 ICJ Reports at p. 142. This statement may also be interpreted as relating to inherent jurisdiction. Ibid.: “The third submission of Nicaragua in its Memorial on the merits, . . ., requests the Court to adjudge and declare that compensation is due to Nicaragua.” The fourth submission requests the Court to award to Nicaragua the sum of 370,200,000 United States dollars ‘which sum constitutes the minimum valuation of the direct damages’ claimed by Nicaragua.”

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early nineteenth century, after the Jay Treaty of 1794) shows that remedial measures have, in large measure, where necessary, been separated from the settlement of disputes on the merits, particularly to the extent that by specific agreement on remedies apart from competence to settle disputes the parties may define the jurisdiction of tribunals within the limits referred to earlier in this chapter. In other words, once jurisdiction to settle a dispute is assigned to a tribunal, it does not necessarily mean that it has an unalterable inherent jurisdiction to select the remedies it may indicate. Clearly, where there is no explicit agreement on the extent of a tribunal’s jurisdiction to choose remedies, such questions arise as whether there is an inherent jurisdiction to do so, what are its limits and how far all this depends on the genre of the dispute or proceeding. Where there is explicit agreement on remedies, the question that arises is how far this agreement is in accord with the principle that the fundamental judicial character and function of the tribunal must be respected (a ius cogens) and how the agreement is to be interpreted. These matters, while linked to the jurisdiction to settle the dispute on the merits, are regarded as sufficiently distinct from such jurisdiction as to be treated separately. In this context the distinction which is recognized between primary and secondary rights and obligations supports the approach being taken. The former category of rights and obligations includes only those of a substantive and procedural nature which the parties concerned enjoy in regard to the subject-matter of the dispute. The latter category covers only the sanctions which may be applied under the relevant law where the primary rights and obligations have not been respected. It happens that this distinction has particular value in regard to arbitral settlement of international disputes, because the two categories of rights and obligations are often dealt with separately in the attribution of jurisdiction to international arbitral tribunals. It is the jurisdiction to settle disputes about, and to determine, secondary rights and obligations that is the subject of a consideration of remedial jurisdiction.5

5

In the Chorzów Factory ( Jurisdiction) Case Poland questioned the jurisdiction of the PCIJ to award damages, as a separate issue, although the Court’s jurisdiction to deal with the merits of the dispute under the relevant convention was established: (1927), PCIJ Series A No. 9. In The Wimbledon Case the defendant state did not contest the jurisdiction of the PCIJ to award damages, even though the relevant treaty made no express provision for such an award and the Court exercised that jurisdiction: (1923), PCIJ Series A No. 1.

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Inherent or Implied Jurisdiction There are two situations in which inherent jurisdiction may become relevant. First, in interpreting constitutive or jurisdictional instruments, tribunals may assume a jurisdiction by invoking a meaning which includes an implied jurisdiction, or by filling a gap in the express provisions by invoking its inherent jurisdiction. Secondly, where relevant instruments are silent on the question of remedies, the tribunal may, in effect, refer to its inherent jurisdiction, though often not in those terms. Interpretation of Express Provisions A good example of the first situation is the interpretation in practice of the term “award” used in constitutive instruments in arbitration. In the case of both the ICSID Convention and the relevant jurisdictional instruments of the Iran-US Claims Tribunal all that is clear is that there is to be an award.6 There is no reason why “award” should not mean simply a judgment declaratory of the rights and obligations of the parties to the dispute. However, in both these instances it has been assumed that the remedies cover compensation or damages as reparation. This is a common approach taken by arbitral tribunals in respect of the jurisdiction to make an award. Both the tribunals constituted under the ICSID and the Iran-US Claims Tribunal have consistently ordered the payment of compensation or damages.7 On the other hand, while in both cases tribunals have discussed restitutio in integrum, which is a form of specific performance, as a remedy, neither tribunal has ordered it. Moreover, an ICSID tribunal has expressed the view that it doubted that cancellation of a revocation, and restoration, of a licence as restitutio in integrum was available as a remedy against a state.8 What these tribunals have done is to invoke an inherent jurisdiction to order damages or compensation, unless the contrary is stated. On the other hand, they have not been inclined to include specific performance in such a

6

7 8

See Section 4 of the ICSID Convention and Article IV of the 1981 Claims Settlement Declaration, 1 Iran-US CTR at p. 10. See 1–14 ICSID Reports and , Iran-US CTR passim. An ICSID Tribunal stated this in the Amco Case (1984), 1 ICSID Reports at p. 473. The Iran-US Claims Tribunal discussed the relevance of restitutio in integrum in the context of an unlawful expropriation by referring at length to the statements of the PCIJ in the Chorzów Factory Case (Merits), 1928 PCIJ Series A No. 17 at pp. 47 ff. on the subject: the Amoco International Finance Corp. Case (1987), 15 Iran-US CTR at pp. 246 ff. However, in that case the subject was not an unlawful taking of property and the question of restitutio in integrum did not arise.

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jurisdiction where the constitutive instruments do not refer to it. This exclusion may reflect the particular circumstances of the arbitrations concerned. Absence of Provision What the position is where there is no reference to remedies at all has been discussed by the ICJ. In arbitral practice, while seldom has there been a dispute as to the arbitral tribunal’s jurisdiction in respect of remedies, the jurisdiction to order remedies has been exercised, even though no mention is made of it in the jurisdictional instruments. There are two questions. The first is whether a tribunal has an inherent jurisdiction to order remedies at all but must in the absence of an express attribution of jurisdiction confine itself to a declaratory judgment on the rights and obligations of the parties and leave the determination of remedies to them. The second relates to the scope of this jurisdiction, if it exists, that is, what generic remedies it covers, regardless of how the content of these remedies is determined in any given case. As seen above, that there is inherent jurisdiction of some kind, deriving from the judicial function, is evidenced in part by the conduct of tribunals in interpreting the express terms or constitutive and jurisdictional instruments by reference to inherent jurisdiction, whether explicitly or impliedly, to cover what is not expressly mentioned. But more importantly the ICJ has explicitly made statements supporting the view that there is some inherent jurisdiction in regard to remedies deriving from a grant of jurisdiction to settle a dispute on the merits.9 Arbitral tribunals have had to deal with such questions generally as the assessment of damages under instruments giving them jurisdiction to award damages rather than those dealing with the jurisdiction to award certain kinds of remedies or any remedies at all, where the relevant instruments are silent on the matter. Recently international arbitration, i.e., between states, whether involving claims by individuals or otherwise, has become less used as a method of settling disputes compared to the earlier situation. Since the Second World War there has been a marked decrease in the number of such arbitrations. Between 1945 and 1970 there were 23 arbitrations, fewer than one a year, in comparison with the average (of course, taken for a much longer period) of three a year between 1794 and 1945.10 Since 1970, apart from the cases before the Commissions set up under the 1947 Peace Treaties11 and

9

10 11

For an analysis of the ICJ cases see C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) pp. 166–78. See Stuyt, A Survey of International Arbitrations (1990). See UNRIAA, volumes 13, 14 and 16.

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before the Austrian-German Arbitral Tribunal,12 ICSID arbitrations13 and cases before the Iran-US Claims Tribunal,14 arbitrations generally involved requests for judgments which did not involve requests for damages or compensation. Requests for damages and their award were rare.15 Commissions set up to decide claims against Italy were controlled by the detailed provisions on damages in the Peace Treaty. Apart from the particular arbitrations referred to above most modem international arbitrations involve requests by the parties for declaratory judgments stating their legal position in terms of the violation of substantive obligations and the failure to respect substantive rights.16 The questions to be examined are whether arbitral law acknowledges that in the absence of reference to remedies in the jurisdictional instruments a tribunal may, pursuant to its inherent jurisdiction, pronounce on remedies and, if so, what are the generic remedies it may prescribe, or whether in the absence of such express provision a tribunal is confined to giving a judgment merely declaring the violations or otherwise of the substantive law. The remedies generally in issue are (i) restitutio in integrum, a form of specific performance, (ii) specific performance as such, (iii) negative injunctions, (iv) damages or compensation, which involves monetary payment and (v) satisfaction. It is clear that the parties may agree that a tribunal may prescribe all or some of these remedies. This power to attribute jurisdiction has never been questioned. The arbitral jurisprudence on inherent jurisdiction is, however, less easy to evaluate, because generally jurisdictional instruments indicate what remedies are permissible. Nevertheless, there is some evidence that may

12 13 14 15

16

See Seidl-Hohenveldeon, The Austrian-German Arbitral Tribunal (1972). See 1–14 ICSID Reports, and . See 1–37 Iran-US CTR. Damages were claimed in the Ambatielos Arbitration (1956), 12 UNRIAA p. 91, the Gut Dam Arbitration (1965): see Lillich, “The Gut Dam Claims Agreement with Canada”, 59 AJIL (1965) p. 892, the Lighthouses Arbitration (1956), 12 UNRIAA p. 155. They were only awarded in the last, the second being settled by a lump sum payment and the case in the first being dismissed on a preliminary objection. On the awards and settlement in the Lighthouses Arbitration see 63 RGDIP (1959) p. 248. The Commissions set up to decide claims against Italy were controlled by the provisions on damages in the Peace Treaty: see 13, 14, 16 UNRIAA passim, Surrey, “Problems of the Italian Peace Treaty: Analysis of Claims Provisions and Descriptions of Enforcement”, Law and Contemporary Problems (1951) pp. 435–47. In the case of the USA the requirements of the Peace Treaty were elaborated and clarified by subsequent agreements: see 14 UNRIAA p. 67. A writer commenting in 1938 had predicted to the contrary that the right to actual reparation would be developed with the increase in scope or the law relating to state responsibility: Personnez, op. cit. note 1 p. 330.

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be examined. At the outset it may be remarked that there is some support for an element of inherent jurisdiction. The real issue is the generic extent. It must also be observed that tribunals have not been particularly explicit about the source of their inherent jurisdiction, where they implement such jurisdiction. For example, in cases where remedies other than damages have been awarded, or a declaratory judgment has been given, this has been done without any reference to national systems of law as sources of general principles of law. It is significant that the differences which exist in this regard among national systems do not bring about much variation in result. Thus, in Germany (and in the Eastern European countries) specific performance is the primary remedy for breach of contract. In France, Italy and Switzerland the judge has the power to order either damages or specific performance as he thinks appropriate. Specific performance is an exceptional remedy in common law systems. It is an equitable remedy and therefore will only be awarded where this would not lead to injustice and where the common law remedies are inadequate. Similarly in delict restitutio in integrum is the primary remedy in German law, optional in French law, and exceptional in common law systems. But in fact the difference between the results produced by common law and civil law systems may not be very great because the restrictions on specific performance and restitutio in integrum in the latter ensure that they are rarely allowed, where they would not be allowed in common law countries. However, in international arbitration the question of remedies available seems to have been left often to the judgment of arbitrators. On the other hand, it is not unusual for the jurisdictional instrument not to contain specific provisions on the question of remedies at all.17 This is true not only of those instruments which provide for the settlement of just one or two claims but also of those establishing a commission to decide a large number of claims. Treaties such as that of 1829 between Brazil and Great Britain,18 which contains precise rules for the adjustment of claims for indemnities, and the 1923 agreements between Mexico and various European states,19 which refer to damages (and give some guidance on the appropriate measure of damages), are rare. Most of the international arbitral tribunals were established to deal with claims for damages for injury to foreign nationals. These claims formed the largest single category of claims. For example, of the 435 arbitral tribunals

17

18 19

For an example of express provision for the award of remedies other than damages see the Trail Smelter Arbitration (1938), 3 UNRIAA p. 1905. See Parry, 79 The Consolidated Treaty Series 1648–1918 p. 397. See Feller, The Mexican Claims Commissions (1935) at pp. 412 ff.

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between 1794 and 1972 listed in a repertory,20 at least 261 dealt with claims for damages. The remaining tribunals were generally charged with giving their interpretations of international law rather than prescribing remedies for its violation. They gave judgments declaratory of rights and obligations of the parties on the merits, except that, 85 tribunals of these handled boundary disputes or questions of title to territory. The judgments in these cases may be regarded as requiring a kind of specific performance. Further, remedies other than damages for breaches of international law were rare. The power of tribunals to award particular remedies depends on the agreements under which they are established, but in general states parties have not made express provision on this. Some arbitral tribunals were expressly given the power to decide on “claims for pecuniary satisfaction”, but many were authorized simply to settle “all claims” and they made awards of damages.21 Jurisdictional problems do not arise when the tribunal is asked merely to interpret a treaty or otherwise declare the state of international law as applied to the case. But in the absence of express provision the jurisdiction to prescribe other remedies which are found in national legal systems, such as negative injunctions, specific performance, and restitutio in integrum, must depend on the practice of the tribunals themselves and on references to principle. It may also be observed that the award of remedies other than damages by international arbitral tribunals is unusual. Negative Injunctions In the Trail Smelter Arbitration22 an injunction was ordered, but express provision had been made for such an order in the Compromis. This stated that the tribunal should decide (1) Whether damage caused by the Trail Smelter in the State of Washington has occurred since 1 January 1932 and if so what indemnity should be paid therefor. (2) In the event of the answer to the first part of the preceding question being in the affirmative, whether the Trail Smelter should be required to

20 21

22

Stuyt, op. cit. note 10. E.g., the La Masica Case (1910), GB v. Honduras, 11 UNRIAA p. 551, the Rhodope Forests Case (1931), Greece v. Bulgaria, 3 UNRIAA p. 1389. In the latter case the tribunal derived its jurisdiction from Article 181 of the Treaty of Neuilly, which stated: “In cases of disagreement as to the application of this Article, the difference shall be submitted to an arbitrator appointed by the Council of the League of Nations.” The Greek Government sought reparation for the confiscation of the property of their nationals and the arbitrator allowed this without any discussion as to whether he had jurisdiction to do so. (1938), 3 UNRIAA p. 1905.

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refrain from causing damage in the State of Washington in the future, and, if so, to what extent. In El Salvador v. Nicaragua,23 the Central American Court of Justice was asked to issue an order enjoining the defendant state from carrying out its obligations under the Bryan-Chamorro Treaty, because these were incompatible with the requirement of a prior treaty made with the claimant state. The Court did not state that such an order was necessarily outside its jurisdiction, but refused to give an injunction in this case, since one of the parties to the Bryan-Chamorro Treaty was not subject to the jurisdiction of the Court. However, there has been no pronouncement either that a negative injunction cannot be issued. Restitutio in Integrum The PCIJ, in the Chorzów Factory Case (Merits), has explained that restitutio in integrum demands the re-establishment of the situation which would in all probability have existed if the illegal act had not been committed.24 Thus, it does not expressly require, though it may involve, an order for specific performance, and it goes further than specific performance in that it may include the rectification of harm already caused by the illegal act. Restitutio in integrum is often divided by writers into two categories, legal and material.25 The former involves an order by a tribunal for the repeal or alteration of a measure of the defendant state’s legislature, executive or judiciary, the latter typically involves an order for the restoration or repair of property unlawfully seized. There is rarely any specific provision for either type of restitutio in integrum in arbitration agreements. There are some writers who argue that restitutio in integrum is the primary remedy. As one writer says, “Depuis plus d’un siècle les commissions et tribunaux internationaux appliquent la règle qui prescript une restitution en nature au profit du lese et seulement en cas d’impossibilité une indemnité pécuniaire.”26 But the actual awards of restitutio in integrum in international arbitral practice are few. The view is based on principles found in national legal systems, though in the common law systems the remedy is an exceptional one.

23 24

25

26

(1917), 11 AJIL (1917) p. 674. (1928) PCIJ Series A No. 17. An arbitrator has equated restitutio in integrum to specific performance as such: the arbitrator (Lagergren) in BP v. Libya (1973), 53 ILR p. 297. See, e.g., García Amador, in García Amador, Sohn and Baxter, Recent Codification of the Law of State Responsibility for Injuries to Aliens (1974) at p. 100, Personnez, op. cit. note 1 p. 77. Reitzer, op. cit. note 1 p. 171.

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There is little evidence, however, to support the primacy of restitutio in integrum in international arbitral practice. A distinction must be made between those cases where express provision for the award of restitutio in integrum existed in the Compromis and those where no such provision was made.27 It cannot be said that a few cases of the former have created a general customary rule of international law establishing the primacy of restitutio in integrum not only for the reason that they are not numerous, but because it is doubtful that their inclusion in such Compromis was based on an opinio iuris. In some cases where no provision was made for it, “legal” restitutio in integrum was ordered, nevertheless. In the Martini Case, where no specific power to award restitutio in integrum was given in the Compromis, the tribunal held that a Venezuelan court had acted unlawfully in demanding certain payments from Martini. Hence, it concluded: Bien que ce paiement n’ait jamais été effectué, les obligations existent en droit. Ces obligations doivent être annullées, à titre de reparation. En prononçant leur annulation le Tribunal Arbitral souligne qu’un acte illicite a été commis et applique le principe que les conséquences de l’acte illicite doivent être effacés.28

In El Salvador v. Nicaragua the Central American Court of Justice held that: “The Government of Nicaragua, by availing itself of measures possible under the authority of international law, is under the obligation to re-establish and to maintain the legal status that existed prior to the Bryan-Chamorro Treaty between the litigant republics insofar as related to matters considered in this action.”29 In L’Affaire de la Société Radio-Orient30 the PCA directed the revocation of an order which they held had been made in violation of Egypt’s treaty obligations.31 27

28 29 30 31

De Eulate, “La restitutio in integrum en la prática y en la jurisprudencia internationales”, 29–32 Revista de ciencia y técnica juridica (1971–2) p. 11, gives a lengthy list of instances of restitutio in integrum in diplomatic and arbitral practice but he does not make this distinction. The arbitrator (Lagergren) in BP v. Libya drew the distinction, and after surveying those arbitral agreements where express provision was made for restitutio in integrum concluded that “such treaties and compromis are not numerous and consistent enough to be regarded as evidence of a uniform state practice”: see loc. cit. note 24 above. For restitution of property seized in war see Vasarhelyi, Restitution in International Law (1964), and Drucker, “Restitution in International Law”, 15 ICLQ (1966) pp. 263–9. (1930), 2 UNRIAA at p. 1002. (1917), 11 AJIL (1917) at p. 696. (1940), 2 UNRIAA p. 1871 (Levant States v. Egypt). Apart from cases settled by diplomacy, there are no other cases where “legal” restitutio in integrum was ordered without provision having been made for it expressly in the Compromis (see the United Finance Company Case and the Hotel Metropole Case, cited in de Eulate, loc. cit. note 27).

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As for material restitution, the tribunal in the British Property in the Spanish Zone of Morocco Case ordered the Spanish Government to provide premises for use by the British consul at Tetuan to replace those for whose unlawful destruction it was responsible.32 There are more examples of material restitution based on express provision in the treaty establishing the arbitral tribunal concerned or flowing from diplomatic settlement.33 On the other hand, where money unlawfully seized is ordered returned by an arbitral tribunal,34 this is really a case of the award of damages often with interest and not of true restitution because it is not the actual notes and coins seized which are ordered returned. It is significant that in many arbitration treaties made in the 1920s to which Germany was a party there was included a clause providing that, if, according to the constitutional law of the offending state, the effects of an act or decision found in violation of international law could not be rectified by administrative measures, the injured state should get appropriate relief in another form. Article 32 of the 1928 General Act includes this type of provision: If, in a judicial sentence or arbitral award it is declared that a judgment, or a measure enjoined by a court of law or other authority of one of the parties to the dispute, is wholly or in part contrary to international law, and if the constitutional law of that party does not permit or only partially permits the consequences of the judgment or measure in question to be annulled, the parties agree that the judicial sentence or arbitral award shall grant the injured party equitable satisfaction.35

This kind of provision points to the fact that a tribunal could in the first place order restitution. There are difficulties with material restitution in international law. For example, the length of time that has elapsed since the original unlawful act may make restitution difficult or impossible or restitution may not constitute an adequate remedy for all the damage involved and certainly it cannot repair moral or personal injury. Restitutio in integrum has also been refused by tribunals in several cases. Thus, in the Rhodope Forests Case36 Bulgaria had unlawfully confiscated forests belonging to Greek nationals. The choice whether to order restitutio in integrum or damages was left to the arbitrator who decided against the

32 33 34

35 36

(1923), 2 UNRIAA at p. 722. See de Eulate, loc. cit. note 27 at pp. 20 ff. There are several examples of this kind of case: see, e.g., The Macedonian (1958), USA v. Chile; Moore, History and Digest p. 1449; the George Turnbull, Manoa Co. (Ltd.), Orinoco Co. (Ltd.) Case (1903), USA v. Venezuela, 9 UNRIAA p. 299. See Hudson, 4 International Legislation (1931) p. 2529. (1931), 3 UNRIAA p. 1389.

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former on the ground that it would be unacceptable to compel Bulgaria to restore integrally the disputed forests as only some of the dispossessed owners had made claims and it was not likely that the forests were in the same position as they had been in 1918. Again, in the Walter Fletcher Smith Case37 the claimant United States requested either restoration of the property illegally seized and damaged by Cuba or pecuniary compensation. The arbitrator held simply that it was “for the best interests of the parties and of the public” that the remedy be damages. In two cases decided by the PCA, where it was held that there had been a breach of international law and where it might have seemed at first sight that restitution would be the appropriate remedy, this was refused. Thus, in the Savarkar Case38 the Court held that, while an irregularity had been committed in the arrest of Savarkar and his delivery to the British police by a French police officer, there was no rule of international law which imposed under the circumstances of the case any obligation on the state which had the custody of the prisoner to restore him because of a mistake made by the foreign agent who delivered him up. In the Casablanca Deserters Case 39 the secretary of the German consulate was held guilty of a grave violation of his duties for obtaining the protection of the Consul for deserters not of German nationality. The tribunal further held that the French military authorities should have respected the authority of the German Consul by leaving the deserters in his possession until the question of jurisdiction could be decided. The use of force by the French soldiers to seize the deserters was declared to be unwarranted, but the tribunal declined to direct the surrender of the deserters. The cases show that sometimes, where there is a choice accorded by the jurisdictional instrument, tribunals may choose not to order restitution, and that sometimes where the constitutive instruments are silent the tribunal may simply not choose restitution at all. However, while the cases may not support the principle that restitutio in integrum is the primary remedy, they do support the principle that a tribunal may order such restitution, if it chooses, even if the constitutive instruments are silent on the specific remedy available or even on remedies in general.40 On the other hand, there are no identifiable principles as to when restitution must be chosen rather than some other remedy.

37 38 39 40

(1929), 2 UNRIAA p. 913. (1911), 11 UNRIAA p. 252. (1909), 11 UNRIAA p. 119. Contra Baade, “Indonesian Nationalization Measures before Foreign Courts – a Reply”, 54 AJIL (1960) p. 801, Feller, The Mexican Claims Commissions (1935) p. 290.

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Specific Performance International arbitral tribunals confronted with requests for specific performance of obligations or otherwise as a remedial measure have dealt with such requests differently. In the Giovanni Cervetti Case41 and the Norberto Paquet Case42 the claimant states requested the tribunal to order the payment of interest on payments by Venezuela that were overdue, as required by the treaty in issue. However, the question whether it could order specific performance of the treaty obligation was not decided by the tribunal in either of these cases, for it held that it was not able to award interest to run beyond the termination of its labours. In the George W Hopkins Case, however, the Mexican Government had refused payment of six postal money orders issued by a revolutionary regime. As regards three of these orders, the tribunal ordered that “The Government of the United Mexican States shall pay to the Government of the United States of America on behalf of George W. Hopkins the total amount of the orders . . . with interest at the rate of 6% p.a. to the date on which the last award is rendered by the Commission.”43 This could very well be interpreted as an order for the specific performance of Mexico’s obligation to honour the postal order. It could also be regarded as an award of damages. It is, thus, not clear from international arbitral practice whether specific performance is a remedy that is available in the absence of express provision. Text writers have expressed different views on the matter. One view is that there is no reason why an order of specific performance should not be made.44 On the other hand, it has been said that specific performance is not a suitable remedy for an international tribunal.45 These are differences of opinion based on policy considerations, apparently. The practice of tribunals is inconclusive. However, it is significant that, although tribunals have not specifically stated positively that they have the authority to order specific performance, neither have they denied in any way that they have such power. On the contrary, the George W. Hopkins Case could be seen as involving specific performance. This case, thus, provides more evidence in favour of the availability of specific performance than against it. In the other two cases,

41 42 43 44

45

(1903), Italy v. Venezuela, 10 UNRIAA p. 496. (1903), Belgium v. Venezuela, 9 UNRIAA p. 325. (1926), USA v. Mexico, 4 UNRIAA at p. 219. See Mann, “The Consequences of an International Wrong in International and Municipal Law”, 48 BYIL (1976–77) at p. 13. See Ralston, International Arbitration from Athens to Locarno (1929) p. 61. The arbitrator in BP v. Libya took the same view as Ralston that specific performance was not an appropriate remedy: (1973) 53 ILR p. 297. This was not an international arbitration proper but a transnational one.

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while the requests could have been dismissed on the ground that specific performance was not an option for the tribunal, if the requests were regarded as for specific performance, the tribunal did not do this. Rather it rejected the requests for other reasons. Thus, in no case has there been an open denial of the availability of the remedy of specific performance, although there may have been opportunities to do so, even if it is apparent that the issue as such has not been raised by either or the parties and has not been specifically addressed. Damages Damages have been awarded by tribunals without question, where they have been requested, even in the absence of express provision in the jurisdictional instruments. They are the commonest remedy in arbitral practice.46 It has never been argued that in the absence of express provision for the award of damages, tribunals are limited merely to declaring the rights and obligations of the parties on the merits, i.e., to giving a declaratory judgment, or to awarding some form of satisfaction not amounting to substantial damages. Satisfaction The vast majority of international arbitral decision on reparation, generally in the form of damages, clearly concern claims by states involving injury to their nationals. In the law of state responsibility a distinction is generally made between injuries to individuals (“private”) and injuries to states (“public”).47 In regard to the latter the injury to a state’s honour and dignity claims prominence and often it is thought that the remedy for such injury is “satisfaction”. However, the exact juridical status of this remedy and its relation to pecuniary compensation for injury to a state as such are not clear.48 The function of satisfaction is admitted to be repairing moral injury to a state;49 but it is not easy to determine when exactly such injury exists. Under the traditional theory of state responsibility every injury to a foreign national involves a moral injury to his state. In arbitral practice, however, states

46

47

48

49

See the many cases extracted in Coussirat-Coustére and Eisemann, 1–3 Répertoire de la jurisprudence arbitrale internationale (1991). See the explanation by García Amador, loc. cit. note 25 at p. 91, Personnez, op. cit. note 1 p. 16. See Bissonnette, La Satisfaction comme mode de reparation en droit international (1952), Part II, Chapter 3, Brownlie, System of the Law of Nations: State Responsibility, Part I (1983) p. 208. See, e.g., Bissonnette, op. cit. note 48, García Amador, loc. cit. note 25 p. 89, Przetacznik, “La responsabilité internationale de l’étât a raison des préjudices de caractère moral et politique causés à autre étât”, 45 RGDIP (1974) p. 919.

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apparently claimed almost exclusively for injury to their nationals and rarely included separate claims on their own behalf. It has been found that satisfaction has been typically allowed in diplomatic practice in cases which include attacks on a state’s territory, its agents, official residences, ships and flag.50 The most common types of satisfaction for these injuries may be divided into four groups: apologies, punishment of the guilty, assurances as to the future, and pecuniary satisfaction. However, satisfaction as a remedy is encountered much less in arbitral jurisprudence than in diplomatic practice.51 It is, nevertheless, a remedy which has been awarded. In diplomatic practice the distinction between satisfaction and pecuniary compensation for injury to a foreign national is usually clear, as the typical measures of satisfaction are non-pecuniary. In arbitral decisions, however, it is sometimes more difficult to make this distinction. Here again, where the satisfaction is non-pecuniary, there is no problem. Thus, in the Carthage Case 52 and the Manouba Case 53 a declaratory judgment was held to constitute adequate satisfaction for violation of state sovereignty. In the I’m Alone Case the tribunal recommended that the United States should apologize to the Canadian Government for its unlawful action in sinking a Canadian ship.54 It is obviously more difficult to distinguish pecuniary “satisfaction” from damages. Unlike the latter, pecuniary satisfaction is not necessarily calculated on the basis of the extent of the injury involved. But, where there has been a moral or personal injury to the individual, it is difficult to distinguish whether an award apparently in excess of mere compensation for his financial loss includes an element for the satisfaction of the state or whether it includes simply compensation for moral injury to the individual. It is often not easy to separate the two and, further, to distinguish them from punitive damages. But this is a matter for the substantive law of damages. Pecuniary “satisfaction”, as opposed to other forms of satisfaction, has never been described as such by an international arbitral tribunal. When claims expressly based on indignity to the state have been made, these have been refused.55 There are cases where the amount awarded seems greater

50 51

52 53 54 55

See Bissonnette, op. cit. note 48. State practice on the award of satisfaction shows the lack of objective standards in this area, much depending on political factors: see Bissonnette, ibid., Part II, Chapters 1 and 2. In the extensive diplomatic practice on satisfaction the emphasis is on the affront to the state, however caused, rather than on any breach of international law. (1913), France v. Italy, 11 UNRIAA p. 449. (1913), France v. Italy, 11 UNRIAA p. 463. (1935), USA v. Canada, 3 UNRIAA p. 1609. See, e.g., the Miliani Case (1923), Mexico v. USA, 4 UNRIAA p. 173, and the Stevenson Case (1903), GB v. Venezuela, 9 UNRIAA p. 494.

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than necessary to compensate the injury to an alien, which is the substance of the claim, and in some of these it may be possible to infer an intention to provide pecuniary “satisfaction” for the state. It is not clear sometimes whether the relevant cases in fact involved the award of money to the claimant state as opposed to its national. It could be that the monetary award was intended for the individual and the terms of the decision were also supposed to constitute satisfaction for the state.56 Certainly, in the I’m Alone Case,57 however, pecuniary satisfaction was awarded to a state in the form of an award of money for itself rather than in the form of an increased award to its national from which the state was to derive more intangible satisfaction. Declaratory Judgments A question which may be asked is whether the declaratory judgment has been used by arbitral tribunals as a remedy within a tribunal’s jurisdiction for breaches of international law. Tribunals were often called upon to give judgments on the interpretation of a treaty or contract, or on the position of a boundary, or on sovereignty over a particular area, without pronouncing on breaches of international law, though in many cases such breaches are implicitly pronounced on in the judgments. A judgment which requires a certain course or behaviour from the states involved is more in the nature of an indication of specific performance than a declaration. These are not in issue. Declaratory judgments merely that there had been a breach of international law were not common in international arbitration. These were rarely requested, perhaps as a preliminary to a possible agreement on remedial action by the parties or to a later decision by the tribunal, or as a substitute for other remedies. There are awards of nominal damages but, while these judgments find a breach of international law, they purport also to establish that no substantial remedy is called for in the circumstances, though some recognition of a breach and the remedial consequences of such a breach is warranted.58 They are by no means simply declaratory. In the Sanchez Case the tribunal refused to give a declaratory judgment, as such, in the absence of evidence of damage which would have called for an award of damages. The Umpire on behalf of the tribunal said: “The Umpire does not take up this question of responsibility, because in the supposition that it might be determined abstractly or in principle against Venezuela it

56

57 58

See the discussion in Gray, op. cit. note 1 pp. 42–8, Bissonnette, op. cit. note 48. It may be noted that most interstate arbitrations since the Second World War have not involved claims for “satisfaction”. (1935), USA v. Canada, 3 UNRIAA p. 1609. See, e.g., the Brower Case (1910), GB v. USA, 6 UNRIAA p. 109.

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would not be possible to fix these terms concretely in order to make it effective, because the claimant has not proved even one of the facts necessary to estimate and determine any indemnity.”59 In the Cayuga Indians Case 60 the tribunal said that its powers were limited to making a monetary award and that it could not make a declaration “That the Cayuga Indians are entitled to the annuity for the future”, but could only award a lump sum representing the present value of such an annuity. While this may appear to be in form a rejection of jurisdiction to give a declaratory judgment, it is clear that the tribunal opted for an assessment of damages and was in fact refusing to assume jurisdiction to make a finding that there was an obligation, which would have to be specifically performed over a period. It was rather a choice of damages as a remedy rather than specific performance. In the Carthage Case 61 and the Manouba Case 62 the tribunal considered that a declaration constituted satisfaction for breach of an obligation, “Considering that in case a power should fail to fulfil its obligations whether general or special, to another power, the establishment of this fact especially in an arbitral award, constitutes in itself a serious penalty”. The tribunal refused pecuniary compensation for insults to the French flag. This was a case of the declaratory judgment being used as satisfaction. The arbitral decisions do not show that the declaratory judgment is excluded per se as a remedy from the jurisdiction of tribunals. On the contrary there are decisions in which such judgments have been given. Whether a tribunal chooses to give a declaratory judgment rather than, for instance, damages or specific performance, is a matter of judicial policy, depending on the circumstances of the case. The fact that, as in the Sanchez Case, a tribunal may refuse to give a declaratory judgment establishing a breach of law at all is a matter of choice depending on the circumstances of the case rather than a result of an absence of jurisdiction to do so. In the Sanchez Case itself the tribunal was obviously concerned about the “effectiveness” of its judgment without a finding of injury warranting an award of damages in deciding not to give a declaratory judgment. There was no indication that the tribunal was without jurisdiction to do so. Conclusion It would appear that in arbitral jurisprudence there is no indication that any of the forms of remedy discussed above is, as such, outside the jurisdiction

59 60 61 62

(1903), Spain v. Venezuela, 10 UNRIAA at p. 755. (1910), GB v. USA, 6 UNRIAA p. 173. (1913), France v. Italy, 11 UNRIAA at p. 460. (1913), France v. Italy, 11 UNRIAA at p. 475.

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of tribunals. In principle all of these remedies are within their jurisdiction, in the absence of provision in the jurisdictional instruments to the contrary. That jurisdiction is inherent to the extent that such forms of remedy are not provided for expressly in the jurisdictional instruments. There may be differences of form, nevertheless. For example, specific performance may not be indicated in the language of an order but may take the form of a declaration or finding of what a party or the parties must do or refrain from doing. This does not affect the substance of the matter as far as the nature of the remedy which is inherent in a tribunal’s jurisdiction is concerned. Basically tribunals have as wide an inherent jurisdiction in regard to remedies as is appropriate to their judicial functions as international tribunals. Clearly this inherent jurisdiction may in certain circumstances depend on the kind of tribunal in question but by and large a starting point for the consideration of the remedial jurisdiction of a tribunal is the wide scope of jurisdiction portrayed above. This amounts to saying that inherent remedial jurisdiction exists, unless it is shown to be otherwise, whether because of the provisions of the constitutive instruments of the tribunal or the circumstances of the case. In this connection the statement made by the ICJ in the Nicaragua Case (Merits) that “In general jurisdiction to determine the merits of a dispute entails jurisdiction to determine reparation”63 holds good for all international tribunals. “Reparation” here clearly means “modalities to repair the wrong”. There is no reason to restrict it to the award of damages.

The Principle of Non Ultra Petita and Jurisdiction The non ultra petita principle is a recognized general principle of law. It has been referred to by the ICJ in connection with claims on the merits.64 It has some bearing on jurisdictional choices for arbitral tribunals, especially where an inherent jurisdiction is being exercised. The principle requires that a judgment award as reparation no more than has been requested by the claimant. In relation to jurisdiction pertaining to remedies the application of the principle would require that a greater species of remedy not be chosen than 63 64

1986 ICJ Reports at p. 142. In the Asylum Case, 1959 ICJ Reports at p. 402, the Court referred to its duty “to abstain from deciding points not included in the submissions”. In the Arrest Warrant of 11 April 2000 Case (2002), para. 43, , the Court referred to its statement in the Asylum Case and described it as the non ultra petita rule, in applying it to the case in hand.

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the species requested, even if there is an inherent jurisdiction to select it. Hence, where, for example, only a declaratory judgment is sought, a tribunal may not, even if it has the inherent or expressed jurisdiction to do so, make an award of damages. Or, if compensation alone is sought in respect of an unlawful expropriation, a tribunal may not choose to order restitutio in integrum, even if it has the jurisdiction, inherent or otherwise, to do so. This presupposes a hierarchy of remedies, one being higher in the scale than another. It is possible to establish such a hierarchy on the basis of the importance of a remedy. Thus, restitutio in integrum would be at the top of the hierarchy, next would be placed specific performance, including negative injunctions which are a negative form of specific performance, next damages (which includes the lesser concept of compensation), next satisfaction less than damages and finally a declaratory judgment.

Chapter Nine Jurisdiction to Reopen Cases An international case (affaire) involving an international legal dispute which has been decided and disposed of by an international tribunal may be reopened and re-examined in certain circumstances. The nature of the reopening and re-examination will depend on a variety of factors. There are certain circumstances in which both the jurisdiction to reopen and the extent of the jurisdiction to re-examine will depend primarily and largely on the explicit agreement of the parties concerned as reflected, for example, in the Compromis or the constitutive instrument of the tribunal. There is also an inherent jurisdiction in this regard which all international tribunals have subject to permissible modification, exclusion or variation in the constitutive instruments. In the history of adjudicatory dispute settlement in the international legal system there have evolved several possible methods of reopening a case. There are proceedings (i) (ii) (iii) (iv) (v) (vi)

on appeal; for review short of appeal; based on fraud or corruption; for rectification; for interpretation; for annulment.

Res judicata and Finality Before considering these available methods and their incidence, it is necessary to examine the implications of finality of a judgment and in this connection the principle of res judicata. The constitutive instruments of established courts generally expressly state that the judgments of the tribunals shall be

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final (and binding) and, sometimes, without appeal,1 and the Compromis of arbitral tribunals may have the same or similar language. In these circumstances it is clear that the doctrine of res judicata is applicable. The doctrine means that the case or matter “is finally disposed of for good”, as the ICJ has said,2 or that a judgment given by the tribunal closes without further recourse the proceedings brought under its jurisdiction, as the ILOAT has stated.3 There are two questions that arise: first, what are the implications of the principle, and, second, does it apply in the absence of clear indications in the constitutive instrument of the tribunal that it does apply. In regard to the second question, it is likely that the doctrine is generally applicable as a general principle of law, even if the constitutive instrument makes no reference to it in one way or another. This is the better opinion. The view that the principle of res judicata is a general principle of law appeared in some statements made during the drafting of the statute of the PCIJ.4 Reference was there made to the arbitral award in the Pious Fund Case.5 In that case the issue raised in the Compromis was whether as a consequence of a former decision a claim came within the governing principle of res judicata. There is no reason to interpret the Compromis as indicating that the principle applied to the former decision, so that the later tribunal was precluded from finding that that decision was not covered by the principle. The tribunal did not question that the principle was applicable but applied it. It may be concluded that the tribunal applied it without question, not because it found that the Compromis compelled it to recognize the principle as applicable, which it did not, but because it believed it to be applicable as a general principle. In the Polish Postal Service in Danzig Opinion, the PCIJ referred with approval to the manner in which the doctrine of res judicata had been applied in the Pious Fund Case, where the parties and the matter of the dispute had been the same.6

1

2 3

4 5 6

For provisions relating to arbitration which lay down that judgments shall be “final” see, e.g., Article IV(l) of the Claims Settlement Declaration on the Iran-US Claims Tribunal and Article 53 of the ICSID Convention on ICSID tribunals. See the Barcelona Traction Co. Case (Preliminary Objection), 1964 ICJ Reports at p. 20. See Tranter, ILOAT Judgment No. 37 [1958] at p. 2. The principle of res judicata is a general principle of law: see David, L’Arbitrage dans le commerce international (1982) para. 339, Cheng, General Principles of Law (1987 reprint) p. 336, Judge Anzilotti (dissenting) in the Chorzów Factory Case (Interpretation) (1927), PCIJ Series A No. 13 at p. 27, Trail Smelter Arbitration (Final Award) (1941), 3 UNRIAA at pp. 1950 ff. PCIJ, Procès verbaux at pp. 31, 333 and passim. (1902), 9 UNRIAA p. 11. (1925), PCIJ Series B No. 11 at p. 30.

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As regards the first question, Judge Anzilotti’s dissenting opinion in the Chorzów Factory Case (Interpretation) enunciated the implications of the principle. In acknowledging that the principle applied, he stated: “we have here the three traditional elements for identification, persona, petitum, causa pretendi, for it is clear that “that particular case” (le cas qua été decidé) covers both the object and the grounds of the c1aim”.7 The explanation of this cryptic statement is that, when a plea that a complaint is barred by the doctrine or principle of res judicata is upheld, it means that a further ruling on claims is precluded, where such claims are identical in substance to claims on which the tribunal has already passed judgment,8 and that the doctrine becomes applicable where an earlier complaint has been dismissed, if three conditions are fulfilled simultaneously, namely that (i) the parties are the same; (ii) the substance of the claim is the same; and (iii) the cause of action is the same.9 A judgment with the force of res judicata is brought about when proceedings in an action filed by an applicant terminate. Proceedings would terminate in such a judgment, for example, for any of the following reasons: (i) (ii) (iii) (iv)

where the respondent and the applicant agreed to terminate proceedings; by a transaction between the applicant and the respondent; by withdrawal of the complaint; or by a final judgment from the court of jurisdiction.10

Thus, where the applicant had previously withdrawn his action which covered a series of requests and the withdrawal was accepted by the tribunal, the action became res judicata.11 As a consequence it was necessary that any subsequent action instituted by the applicant be substantiated by factual or legal circumstances arising subsequent to the date of the homologation of the withdrawal, since all previous actions were held to have been withdrawn.

7 8

9 10 11

(1927), PCIJ Series A No. 13 at p. 23. See, e.g., Hubeau, ILOAT Judgment No. 574 [1983] at p. 3. For a discussion of res judicata, see C.F. Amerasinghe, 1 Law of the International Civil Service (1994) pp. 241 ff. See also, for an explanation of the meaning of res judicata from a different angle, Cheng, op. cit. note 3 pp. 336 ff. See, e.g., Hubeau, ILOAT Judgment No. 574 [1983] at p. 4. See, e.g., Thevenet, OASAT Judgment No. 43 [1979]. Ibid.

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Apart from the effects of the principle of res judicata whereby subsequent actions are rendered non-justiciable or inadmissible because of prior judgments, there is an important consequence of the doctrine which has been recognized. It has been made clear that the doctrine of res judicata had the effect of binding the respondent to the extent that it could not disregard the decision in the judgment given in its subsequent conduct, so that the respondent could not reopen such decision by ignoring it and having it contested later before the tribunal by the former claimant.12 The applicability of the principle of res judicata has been adverted to by arbitral tribunals, in the course of dealing with applications for reopening cases. In the Orinoco Steamship Company Case a tribunal as early as 1910, referring to the finality of judgments, said: “Whereas it is assuredly in the interest of peace and the development of the institution of International Arbitration, so essential to the well-being of nations, that on principle, such a decision be accepted, respected and carried out by the Parties without any reservation, as it is laid down in Article 81 of the Convention for the Pacific Settlement of International Disputes of October 18th 1907, . . .”13 In 1941, faced with a request for revision, a tribunal, while making an extensive review of the authorities, stated: That the sanctity of res judicata attaches to a final decision of an international tribunal is an essential and settled rule of international law. If it is true that international relations based on law and justice require arbitral or judicial adjudication of international disputes, it is equally true that such adjudication must, in principle, remain unchallenged, if it is to be effective to that end. Numerous and important decisions of arbitral tribunals and of the Permanent Court of International Justice show that this is, in effect, a principle of international law. It will be sufficient, at this stage, to refer to some of the more recent decisions. In the decisions of an arbitral tribunal constituted under the statute of the Permanent Court of Arbitration concerning the Pious Funds of California (October 14, 1902, Hague Court Reports, 1916, p. 3) the question was whether the claim of the United States on behalf of the Archbishop of San Francisco and the Bishop of Monterey was governed by the principle of res judicata by virtue

12

13

See, e.g., Angelopoulos, Decision No. 69, OECD Appeals Board [1979], Recueil des décisions 63 à 82 (1980) p. 22, Angelopoulos, Decision No. 92, OECD Appeals Board [1982], Recueil des décisions 83 à 102 (1983) p. 29. In Reynier and Erba, CJEC Cases 79 and 82/63 [1964] ECR at p. 266, the CJEC said that, because the EC was a single entity, it was inconceivable that a judgment of the Court which had the force of res judicata with regard to one institution would not have the same force with regard to the EC as a whole. (1910), USA v. Venezuela, 11 UNRIAA at p. 238.

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of the arbitral award of Sir Edward Thornton. This question was answered in the affirmative. The Fabiani Case (French-Venezuelan Claims Commission, Ralston’s Report, Decision of Umpire Plumley, p. 110) is of particular interest for the present case. There had been an award by the President of the Swiss Confederation allowing part of a claim by France on behalf of Fabiani against Venezuela and disallowing the rest. As the terms of reference to the second arbitral tribunal were broader than to the first, it was contended by the claimants “that of the sums denied allowance by the honourable Arbitrator of Bern there are certain portions so disposed of by him as to be still in force against the respondent government under the general terms of the protocol constituting this Commission”. The first Arbitrator had eliminated all claims based on alleged arbitrary acts (faits du prince) of executive authorities as not being included in the matter submitted to his jurisdiction which he found limited by treaty to “denial of justice”, a concept which he interpreted as confined to acts and omissions of judicial authorities. It was argued, on behalf of claimants, that “the doctrine and jurisprudence are for a long time unanimous upon this uncontestable principle that a declaration of incompetence can never produce the effect of res judicata upon the foundation of the law”. Umpire Plumley rejected these contentions. “In the interest of peace”, a limitation had been imposed upon diplomatic action by a treaty the meaning whereof had been “finally and conclusively” settled “as applied to the Fabiani controversy” by the first award. The definition of denial of justice and the determination of the responsibility of the respondent Government were not questions of jurisdiction. And the Umpire concluded that “the compromise arranged between the honourable Governments . . . followed by the award of the honourable President of the Swiss Confederation . . . were ‘acting together’ a complete, final and conclusive disposition of the entire controversy on behalf of Fabiani”. Again in the case of the claim of the Orinoco Steamship Company between the United States and Venezuela, an arbitral tribunal constituted under the statute of the Permanent Court of Arbitration (October 25, 1910, American Journal of International Law, V, p. 230) emphasized the importance in international disputes of the principle or res judicata. The first question for the arbitral tribunal to decide was whether the decision previously rendered by an umpire in this case “in law” was “not void, and whether it must be considered to be so conclusive as to preclude a re-examination of the case on its merits”. As we will presently see, the tribunal held that the decision was partially void for excess of power. This, however, was rigidly limited and the principle affirmed as follows: “ . . . it is assuredly in the interest of peace and the development of the institution of international arbitration so essential to the well-being of nations, that, in principle, such a decision be accepted, respected and carried out by the parties without reservation.” In three successive advisory opinions, regarding the delimitation of the Polish Czechoslovak frontier (Question of Jaworzina, No. 8, Series B, p. 38), the delimitation of the Albanian frontier at the Monastery of Saint Naoum (No. 9, Series B, p. 21, 22), and the Polish Postal service in the Free City of Danzig (No. 11, Series B, p. 24), the Permanent Court of International Justice based its appreciation of the legal effects of international decisions of an arbitral character on the underlying principle of res judicata.

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Chapter Nine The principle was affirmed in the judgment of the Court on the claim of Belgium against Greece on behalf of the Société Commérciale de Belgique (Series A/B, No. 78, p. 174), wherein the Court said: “ . . . since the arbitral awards to which these submissions relate are, according to the arbitration clause under which they were made, ‘final and without appeal’, and since the Court has received no mandate from the parties in regard to them, it can neither confirm nor annul them either wholly or in part”. In the well-known case of Frelinghuysen v. Key (110 U.S. 63, 71, 72), the Supreme Court of the United States, speaking of an award of the United States Mexican Claims Commission, under the Convention of July 4, 1868, whereby (Art. V) parties agreed, inter alia, to consider the result of the proceedings as a “full, perfect, and final settlement of every claim”, said: “As between the United States and Mexico, the awards are final and conclusive until set aside by agreement between the two Governments or otherwise.” There is no doubt that in the present case, there is res judicata. The three traditional elements for identification: parties, object and cause (Permanent Court of International Justice, Judgment 11, Series A, No. 13, Dissenting Opinion by M. Anzilotti, p. 23) are the same. (Cf. Permanent Court of International Justice, Series B, No. 11, p. 30.)14

There is a problem with incidental decisions on preliminary points, and with decisions on matters of jurisdiction, the question being whether they can be res judicata. In the Trail Smelter Arbitration15 and the Chorzów Factory Case,16 decided by the ICJ, the view seems to have been taken or supported that incidental decisions on preliminary points were subject to the principle of res judicata. In the former case the tribunal said: Under the Statute of the Permanent Court of International Justice whereby (Article 59) “The decision of the Court has no binding force except between the parties and in respect of that particular case”, the Permanent Court of International Justice, in an interpretative judgment (Judgment No. 11, Series A, No. 13, pp. 18, 20 Chorzów Case), expressed the opinion that the force of res judicata was inherent even in what was an incidental decision on a preliminary point, the ownership of the Oberschlesische Company. The minority judge, M. Anzilotti, pointed out that “under a generally accepted rule which is derived from the very conception of res judicata, decision on incidental or preliminary questions which have been rendered with the sole object of adjudicating upon the parties’ claims are not binding in another case” (same decision, p. 26). Later on, in the same case (Judgment 13, Series A, No. 17, Dissenting Opinion of M. Ehrlich, pp. 75, 76), M. Ehrlich, the dissenting national judge appointed by Poland, adopted this statement. But M. Anzilotti (Judgment 11, Series A, No. 13, Dissenting Opinion, p. 27) did not expressly answer in the negative the question which he formulated, namely: Does this general rule also cover

14 15 16

Trail Smelter Arbitration (1941), 3 UNRIAA at pp. 1952 ff. (1941), 3 ibid. p. 1938. (1927), PCIJ Series A No. 13.

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the case of an action for indemnity following upon a declaratory judgment in which the preliminary question has been decided? It is true that, when the case came up again on the question of indemnity (Judgment 13, Series A, No. 17, pp. 31, 32), the Court seems to have avoided – as M. Ehrlich pointed out – the assertion that there was res judicata and reserved the effect of its incidental decision “as regards the right of ownership under municipal law”. But the Court said: “ . . . it is impossible that the Oberschlesische’s right to the Chorzów Factory should be looked upon differently for the purposes of that judgment (the previous Judgment No. 7 wherein it was decided that the attitude of the Polish Government in respect of the Oberschlesische was not in conformity with international law) and in relation to the claim for reparation based on the same judgment”, thus admitting in effect (M. Anzilotti now concurring) that it was bound by its previous decision.17

In regard to decisions on jurisdictional matters, the same tribunal said obiter that there was some authority for the proposition that a decision on jurisdiction, may, under certain circumstances, be reversed by the same court.18 If the view that jurisdictional decisions are not res judicata were correct, it would be a clear exception to the general application of the res judicata principle which may be supported by reasons of policy relating to the desirability of making sure not only that international tribunals do not assume jurisdiction where they have no authority to do so, but also that they do exercise jurisdiction where there is such jurisdiction. There are situations in which a judgment which has been rendered and would otherwise be covered by the principle of res judicata may be reopened, even if the constitutive instrument of the tribunal is silent on the matter. This was recognized in general in Charbin (No. 2).19 It has also been made clear in this context that pleas based on mistake of law or mistake in the appraisal of facts do not cause the exception to operate.20 There may be circumstances in which a previous judgment is examined, as will be seen, but these are to be regarded as exceptional and require good reasons for the reopening of the case. Because reopening a case is an exceptional procedure in relation to the principle of res judicata, the power to do so is to be construed strictly, whether under general principles of law or in the interpretation of constitutive

17 18

19

20

(1941), 3 UNRIAA at p. 1954. Ibid. The ICJ has taken a different view. See C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) p. 185. ILOAT Judgment No. 510 [1982] at p. 2. There are no arbitral decisions on this point and the two points that follow. See, e.g., Tarrab (No. 10), ILOAT Judgment No. 555 [1983] at p. 1. See also, Acosta Andres, Azola Blanco and Véliz García (No. 2), ILOAT Judgment No. 570 [1983] at p. 3, Sehgal (No. 2), ILOAT Judgment No. 579 [1983] at p. 1.

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instruments.21 Such a power, being a derogation from the principle of res judicata, becomes a limited power in many respects. A consequence of the principle of res judicata is that there is no inherent jurisdiction as such in the same or another tribunal to entertain an appeal from a judgment of a tribunal. Such a jurisdiction may only be conferred by express agreement, i.e., in the constitutive instruments of the tribunal having such jurisdiction. The Iran-US Claims Tribunal has reiterated that attempts in any form to reopen a case for re-argument before it could not be permitted or succeed.22 There has been no clear analysis of what distinguishes an appeal from a review or revision. Even if certain appellate jurisdiction may be limited in some way, there is a point at which limitations will deprive such jurisdiction of its appellate character and cause it to be only a review or revision jurisdiction. A review or revision jurisdiction is significantly limited and certainly more limited that an appeals jurisdiction. The difference may even be one of kind rather than of degree. An appeal usually, as it may be conceived under a general principle of law, enables re-examination per se of the case as it was presented, on the merits, and may involve substitution of judgment. A review does not fundamentally set out to do this, in relation to the case as a whole as originally presented, though it may incidentally achieve this. Reexamining the case, as it was presented, on the merits per se is precisely what is not permitted as a result of the principle of res judicata in respect of the judgments of international tribunals, including arbitral tribunals.

Reopening Cases Appeal Clearly, appeal from a judgment of an international arbitral tribunal must be provided for in the constitutive instruments of the tribunal. It is an exceptional procedure. It may be regarded as a derogation from the principle of res judicata. The right of appeal, whether to the same tribunal (a different chamber, perhaps) or to another, does not flow from a general principle of international law. To support this is the statement that has been made by the UNAT that no party may come back to court “because that party is dissatisfied with

21

22

See Acosta Andres, Azola Blanco and Véliz García (No. 2), ILOAT Judgment No. 570 [1983] at p. 2. See the Sedco, Inc., et al. Case (1987), 16 Iran-US CTR at pp. 283–4, the Paul Donin de Rosiere Case (1987), 14 ibid. at p. 101.

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the decision of the Tribunal and wants a second round of litigation”.23 For this reason, appeals are permitted only to the extent provided generally, and within the parameters established, in the governing instruments. Review Review which is different from appeal is also an inroad into the principle of res judicata. An appeal (“appel”) intrinsically enables generally examination of the case de novo on the merits in the light of what was presented to the court in the first instance and, where necessary, substitution of judgment. This is the general thrust of an appeal, although express provisions in constitutive instruments could limit the scope of the appeal to particular matters. There may be limited strictures on this proposition by general principle. Review or revision, on the other hand, is a more limited function in principle. Particular aspects alone of the case as presented in the first instance are involved in review, although the case may be reopened and re-examined, but generally a fresh judgment on the merits is not delivered, though exceptionally, in effect, it may be because of particular defects. Alternatively review jurisdiction may be generated by matters extrinsic to the case as presented in the first instance, namely new facts, though here again, the jurisdiction, if it exists, results in a reopening and re-examination of the case and a fresh judgment on the merits. Clearly, where provision is made for review in constitutive instruments of tribunals, the jurisdiction to review will be recognized to the extent incorporated in, and pursuant to, the express provisions of those instruments. There are arbitral tribunals whose constitutive instruments provide, or provided, for review by the tribunals themselves. In the Katherine M. Drier Case24 the tribunal was requested pursuant to the governing arbitration agreement to consider reviewing the award and making an additional award. The tribunal reopened the case and found that there was no evidence that the arbitrators had abused their discretion or were guilty of manifest error. Discovery of New Facts The classic case of a review jurisdiction is in circumstances where a new fact is discovered after the judgment has been given in a case by an arbitral tribunal. Article 51 of the ICSID Convention, for example, provides in regard to ICSID arbitrations:

23

24

Khalil [2000], UNAT Judgment No. 973 at p. 4. This statement is applicable to arbitration. For recourse on appeal to the PCIJ and ICJ from arbitral decisions see footnote 65 below. (1935), 8 UNRIAA p. 154.

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Chapter Nine (1) Either party may request revision of the award by an application in writing addressed to the Secretary-General on the ground of discovery of some fact of such a nature as decisively to affect the award, provided that when the award was rendered that fact was unknown to the Tribunal and to the applicant and that the applicant’s ignorance of that fact was not due to negligence. (2) The application shall be made within 90 days after the discovery of such fact and in any event within three years after the date on which the award was rendered.

The important general rules of such provisions are that (i) a new fact or evidence must be discovered; (ii) the fact or evidence must not have been unavailable at the time of the original trial or judgment; (iii) the unavailability of such fact or evidence must not have been due to negligence or fault of the party concerned; (iv) the fact or evidence would have in effect been a decisive factor. There is also often a time limit within which the application must be filed after the discovery of the fact and a much longer absolute time limit on the filing of applications. An Inherent Jurisdiction An important question is whether, in the absence of express provision in the relevant instruments, an arbitral tribunal has jurisdiction to reopen a case for revision. The matter has been discussed in arbitral decisions. In the Heim et Chamant Case the mixed arbitral tribunal applied a rule permitting review, although the constitutive instruments said nothing about review. The rule in question was similar to the provisions referred to above. The tribunal explained why the jurisdiction to review was a matter of general principle and, therefore, inherent. This jurisdiction was limited, however, to the case of discovery of a new fact, as opposed to matters of law. The tribunal explained its views as follows: Attendu que le Règlement de procédure prévoit que la révision d’une sentence rendue par le Tribunal arbitral peut être demandée à la suite de “la découverte d’un fait nouveau qui eût été de nature à exercer une influence décisive sur la sentence et qui, lors de la clôture des débats, était inconnu du Tribunal luimême et de la partie qui demande la revision; ... Att. que le Règlement de procédure laisse au Tribunal le soin d’apprécier souverainement s’il y a un fait nouveau et si celui-ci eût été de nature à exercer une influence décisive sur sa sentence; Att. que le Tribunal arbitral, en introduisant la révision dans son règlement de procédure, a voulu transposer dans l’arbitrage international une institution

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de droit interne qui a sa signification propre; qu’il a eu essentiellement en vue les risques d’erreur auxquels il se trouverait exposé, pour l’application du Traité, dans la recherché exacte de faits souvent anciens et particulièrement difficiles à établir a raison des circonstances troubles qui les ont entourés; que c’est contre de tells risques d’erreur de fait que la révision prévue par le Règlement de procédure est destinée à fournir une garantie aux parties, en la limitant d’ailleurs à un délai d’un an au maximum après le jour où la sentence a été rendue; Att. que, par l’institution de la révision, le Tribunal arbitral n’a pas eu l’intention de créer, par une voie indirecte, une deuxième instance non prévue par le Traité de Versailles, par lequel les Hautes Parties contactantes ont convenu, au contraire, de considerer les decisions du Tribunal arbitral comme définitives (art. 304 g); que c’est uniquement pour l’erreur de fait que le Règlement de procédure du Tribunal arbitral a institué la révision; ... Attendu que la notion de fait, comme source possible de revision, ne paraît toutefois pas devoir être appréciée en procédure arbitrale internationale suivant des norms identiques à celles consacreés en droit interne; qu’en effet, en matière de justice internationale, avec une instance uniques, ces norms paraissent devoir être, à certains égards, mains strictes que cells admises par certaines legislations internes, dans des procédures offrant les garanties de deux ou plusieurs degrés de juridictions; qu’à d’autres égards, ces norms sont plus restreintes dans le domaine international que dans une matière relvant de la souveraineté unique d’un seul État; que la notion de fait ne doit être prise ni dans un sens trop restrictif, qui nuirait à la cause même de la justice internationale en privant les parties d’une garantie nécessaire, ni dans un sens trop compréhensif, qui méconnaîtrait soit les besoins de certitude et de stabilité auxquels la justice doit satisfaire, soit des prérogatives essentielles de la souveraineté des États; Att. que la notion de fait ne doit pas être mise en opposition absolue avec celle de droit, dont il n’est pas toujours facile de la distinguer, mais qu’elle doit s’entendre d’une façon plus large, embrassant aussi les moyens de preuve touchant au droit et exceptionnellement le droit lui-même, lorsque le principe iura novit curia n’est pas applicable et que la preuve de droit incombe à la partie qui pretend pouvoir l’invoquer; qu’en effet la condition essentielle pour qu’un fait nouveau puisse ouvrir la voie de la révision est qu’il eut été de nature à exercer une influence décisive sur la sentence; que cette condition peut être remplie soit de la preuve d’un tel fait, soit exceptionnellement d’un droit que le juge n’est pas presume connaître et don’t l’existence apparaît dan le litige comme un element de fait à prouver par la partie qui s’en prévaut;25

An important case that set forth the law relating to the inherent jurisdiction to review cases as an exception to the concept of res judicata was the Trail Smelter Arbitration. There was an extensive examination of the law on the subject, attention being paid to, inter alia, the absence of a contrary indication in the constitutive instruments, the distinction between errors of fact

25

(1922), Franco-German MAT, 3 Rec. TAM at p. 54. See also the Baron de Neufliza Case (1927), Franco-German MAT, 7 Rec. TAM at p. 632.

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and errors of law, and cases where fraud was alleged and those where it was not. The application in the case was based on an error of law but apart from the finding that the tribunal had power to reopen the case where there were errors of law provided that they were “manifest”, there was material on other aspects. The tribunal said: The United States does not contend that the previous decision is void for excess of power, but asks for reconsideration and revision, as far as the costs of investigation are concerned, on account of a material error of law (Record, p. 6540). In the absence of agreement between parties, the first question concerning a request tending to revision of a decision constituting res judicata, is: can such a request ever be granted in international law, unless special powers to do so have been expressly given to the tribunal? The Convention for the Pacific Settlement of Disputes signed at The Hague, October 18, 1907 (Article 83) says: “The parties can reserve in the Compromis the right to demand the revision of the award.” In that case only, does the article apply. But, on the other hand, the Statute of the Permanent Court of International Justice (Article 61) does not require the grant of such special powers to the Court. In the Jaworzina Case (Advisory Opinions, Series B, No. 8, p. 37), the Permanent Court of International Justice expressed the opinion that the Conference of Ambassadors, which had acted in a quasi-arbitral capacity, did not retain the power to modify its decision, as it had fulfilled the task entrusted to it by giving the latter. In the case of Saint Naoum Monastery, however (Advisory Opinions, Series B, No. 9, p. 21), the Court seemed less positive as to the possibility of a revision in the absence of an express reservation to that effect. Arbitral decisions do not give to the question an unanimous answer. Thus, in the United States Mexican Mixed Claims Commission of 1868, whilst Umpire Lieber, on a motion for rehearing, re-examined the case, Umpire Thornton, in the Weil, LaAbra, and other cases, refused a rehearing, inter alia, on the ground that the provision of the Convention in effect debarred him from rehearing cases which he had already decided (Moore, International Arbitrations, 1329, 1357). In the single case of Schreck, however, he granted a request of one of the Agents to reconsider his decision. The case also of A.A. Green (Moore, International Arbitrations, 1358) was reconsidered by the Umpire and that of G. Moore (Moore, International Arbitrations, 1357) by the two Commissioners. In the Lazare case (Haiti v. United States), the Arbitrator, Mr. Justice Strong, refused a rehearing, “solely for the reason”, that in his opinion, his “power over the award was at an end” when it “had passed from his hands and been filed in the State Department”. (Moore, International Arbitrations, 1793). In the Sabotage cases, before the full American-German Mixed Claims Commission, the Umpire, Mr. Justice Roberts, granted a rehearing, although there was no express provision in the agreement empowering the Commission to do so (December 15, 1933, Documents, p. 1122, American Journal of International Law, 1940, pp. 154, 164). Whether final, in part, or not, the previous decision did not give final answers to all the questions. The Tribunal, by that decision, did not become functus officio. Part of its task was yet before it when the request for revision was presented.

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Under those circumstances, the difficulties and uncertainties do not arise that might present themselves where an arbitral tribunal, having completed its task and finally adjourned, would be requested to reconsider its decision. As said above, the petition is founded upon an alleged error in law. It is contended by the United States that the Tribunal erred in the interpretation of the Convention when it decided that the monies expended for the investigation undertaken by the United States Government of the problems created in the United States by the operation of the Smelter at Trail could not be included within the “damage cause by the Trail Smelter” (Article III(l) of the Convention, Record, p. 6030). Statements by the Tribunal that the controversy did not involve “any such type of facts as the persons appointed” in the I’m Alone case “felt to justify them in awarding to Canada damages for violation of sovereignty” and that in cases where a private claim was espoused “damages awarded for expenses were awarded, not as compensation for violation of national sovereignty, but as compensation for expenses incurred by individual claimants in prosecuting their claims for wrongful acts by the offending Government” were also challenged, although petitioner added that possibly these further statements might be regarded as dicta. (Record, p. 6040.) It was further argued that the solution adopted by the Tribunal was not a “solution just to all parties concerned”, as required by Article IV of the Convention. According to the Hague Convention (Article 83), a request tending to the revision of an award can only be made on the ground of the discovery of some new fact calculated to exercise a decisive influence upon the award and which at the time the discussion was closed was unknown to the Tribunal and to the party demanding the revision. It is noteworthy that, at the first Hague Conference, the United States Delegation submitted a proposal whereby every party was entitled to a second hearing before the same judges within a certain period of time “if it declared that it can call new witnesses or raise questions of law not raised or decided at the first hearing”. This proposal was, however, considered as weakening unduly the principle of res judicata. The text, as it now stands, was adopted as a compromise between the American view and the views of those who, such as de Martens, were opposed to any revision. The Statute of the Permanent Court of Justice (Article 61) substantially coincides with the Hague Convention: “An application for revision of a judgment can be made only when it is based upon the discovery of some fact of such a nature as to be a decisive factor, which fact was, when the judgment was given, unknown to the Court and also to the party claiming revision, always provided that such ignorance was not due to negligence.” In presenting this text, the report of the Advisory Committee of Jurists (Procès-Verbaux, p. 744) said very aptly: “The right of revision is a very important right and affects adversely in the matter of res judicata a point which for the sake of international peace should be considered as finally settled. Justice, however, has certain legitimate requirements.” These requirements were provided for in the text which enables the Court to bring its decision in harmony with justice in cases where, through no fault of the claimant, essential facts remained undisclosed or where fraud was subsequently discovered. No error of law is considered as a possible basis for revision, either by the Hague Convention or by the Statute of the Permanent Court of International Justice. The Permanent Court of International Justice left open, in the Saint Naoum Case (Series B, p. 21), the question whether, in the absence of express provision,

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Chapter Nine an award could be revised “in the event of the existence of an essential error being proved or of new facts being relied on”. ... A mere error in law is not sufficient ground for a petition tending to revision. The formula “essential error” originated in a text voted by the International Law Institute in 1876. From its inception, its very authors were divided as to its meaning. It is thought significant that the arbitral tribunal in the Orinoco Case avoided it; the Permanent Court in the Saint Naoum Case alluded to it. The Government of the Kingdom of the Serbs, Croats and Slovenes alleged essential error both in law and in fact (Series C, No. 5, II, p. 57, Pleadings of Mr. Spalaikovitch), but what the Court had in mind in the passage quoted above (see p. 36 of the present decision), was only a possible error in fact. The paragraph where this passage appears begins with the words: “This decision has also been criticized on the ground that it was based on erroneous information or adopted without regard to certain essential facts.” The Tribunal is of opinion that the proper criterion lies in a distinction not between “essential” errors in law and other such errors, but between “manifest” errors, such as that in the Schreck Case or such as would be committed by a tribunal that would overlook a relevant treaty or base its decision on an agreement admittedly terminated, and other errors in law. At least, this is as far as it might be permissible to go on the strength of precedents and practice. The error of interpretation of the Convention alleged by the petitioner in revision is not such a “manifest” error. Further criticisms need not be considered. The assumption that they are justified would not suffice to upset the decision.26

There is, thus, it appears, some inconsistency in the views expressed by arbitral tribunals on the inherent jurisdiction to review or revise of an international arbitral tribunal. Where constitutive instruments do not contain provisions on review, the inherent jurisdictional authority would be relevant for them, whether tribunal rules provide for review or not. What appears agreed in the arbitral decisions is that discovery of a new fact does activate an inherent jurisdiction to review in the appropriate situations. These situations are similar to what is reflected in the ICJ statute27 with some minor variations, particularly, perhaps, as regards time-limits. Beyond that the question is whether errors of fact or law in themselves could generate such a jurisdiction. One view is that errors of law certainly cannot. It is arguable, on the other hand, that manifest errors of law alone are subject to

26

27

(Final Award – 1941), Canada v. USA, 3 UNRIAA at pp. 1952 ff. On this case see Read, “The Trail Smelter Dispute”, 1 Canadian YBIL (1963) p. 213. See also the PhiladelphiaGirard National Bank Case (1930), USA v. Germany, 8 UNRIAA at pp. 70 ff., where a distinction was made between mere newly discovered evidence (which was insufficient) and an error of fact on the evidence earlier presented to the tribunal, as a basis for jurisdiction to review. See Article 61. For cases decided by the ICJ by application of this provision see Rosenne, Interpretation, Revision and Other Recourse from International Judgments and Awards (2007), pp. 129–32, 133–4.

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review, as are also manifest errors of fact alone. On the other hand, mere discovery of evidence has clearly been regarded as inadequate to support a review, if it does not establish the conclusion that a new fact has been discovered.28 It is to be noted that the inherent jurisdictional power to review is always subject to augmentation or reduction by express provision in constitutive instruments of arbitral tribunals. On the other hand, the mere provision that judgments are “final” or “final and binding” or “final and without appeal” does not take away from a tribunal its inherent jurisdiction to review.29 Rules are made by the tribunal and do not have the same status as the constitutive instruments. They are not constitutive instruments of a tribunal. They cannot, therefore, limit the jurisdictional powers of a tribunal, where the constitutive instruments expressly give those powers or do not take them away, when they are inherent powers. An inherent jurisdictional power remains such a valid power, even if the rules do not expressly recognize it.30 Fraud and Corruption There has been no doubt that a judgment may be reopened in cases of fraud or corruption. The fraud or corruption may be attributable either to the tribunal or any of those who constitute it or to witnesses. It is a matter of whether the fraud or corruption tainted the proceedings or judgment of the tribunal. It is very rarely, however, that an arbitral judgment has been reopened on the ground of fraud or corruption. It must first be recognized that constitutive instruments rarely contain provisions relating to the reopening of cases where there is fraud and corruption. The ICSID Convention, for example, is silent on the matter. There are some decisions, however, in which the issue has been addressed. The most important of these is the Lehigh Valley Railroad Company et al. Case. The arbitral tribunal in a second petition was confronted with the allegations by one party that certain witnesses proposed by the other (Germany) furnished the tribunal fraudulent, incomplete, collusive, and false evidence which unfairly misled the tribunal and unfairly prejudiced the claimant’s case and that evidence had come to light showing collusion between certain

28

29 30

See also Simpson and Fox, International Arbitration (1959) pp. 258 ff. for an account of some of the problems in arbitral practice. The situation in the Iran-US Claims Tribunal is examined in Chapter 10 below. On the permissibility of revision in general see Simpson and Fox, op. cit. note 28 p. 242, Reisman, Nullity and Revision (1971) pp. 208–12, Carlston, The Process of International Arbitration (1972) pp. 57–8, 224–8, 232, Sandifer, Evidence before International Tribunals (1975) p. 426, E. Lauterpacht, Aspects of the Administration of International Justice (1991) p. 100.

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witnesses, including some who had already testified, who could give evidence to show that the tribunal’s earlier decision was erroneous. The arbitrator, while refraining from examining the evidence at that stage of the proceedings, addressed the question of jurisdiction to reopen the case on the basis of these allegations. The arbitrator conceded that the jurisdiction depended on the constitutive agreement and instruments establishing the tribunal but found that there was nothing in them to stand in the way of the tribunal in justice and equity reopening the case in appropriate circumstances. Basing himself on general principles of inherent jurisdiction in interpreting the constitutive instruments, especially where they were silent, he stated: The petition, in short, avers the Commission has been misled by fraud and collusion on the part of witnesses and suppression of evidence on the part of some of them. The Commission is not functus officio. It still sits as a court. To it in that capacity are brought charges that it has been defrauded and misled by perjury, collusion, and suppression. No tribunal worthy of its name or of any respect may allow its decision to stand if such allegations are well-founded. Every tribunal has inherent power to reopen and to revise a decision induced by fraud. If it may correct its own errors and mistakes, a fortiori it may, while it still has jurisdiction of a cause, correct errors into which it has been led by fraud and collusion. I am of opinion, therefore, that the Commission has power to reopen these cases, and should do so, in order that it may consider the further evidence tendered by the American Agent and, dependent upon its findings from that evidence and any that may be offered in reply on behalf of Germany, either confirm the decisions heretofore made or alter them as justice and right may demand.31

Much earlier in the Benjamin Weil Case an arbitral tribunal had held that it could not rehear the case, even though the respondent requesting a rehearing had produced circumstantial evidence which, if not refuted by the claimant, would certainly have contributed to the suspicion that perjury had been committed and that the whole claim was a fraud.32 The matter has been addressed largely obiter by the Iran-US Claims Tribunal. The tribunal has never found that it had to entertain a legitimate claim to reopen a judgment on the ground of fraud or perjury but there were several occasions upon which the tribunal noted that a question existed whether it had an inherent or implied power to do so.33 Clearly, the judicial authorities do not present a clear attitude. On the other hand, the decision (ratio decidendi) in the Lehigh Valley Railroad Com-

31 32 33

(1933), USA v. Germany, 8 UNRIAA at p. 190. (1876), Mexico v. USA, Moore, 2 International Arbitrations (1898) p. 1324. The situation in the Iran-US Claims Tribunal is considered in Chapter 10.

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pany et al. Case supports the view that a case may be reopened where there are allegations of fraud, perjury or corruption. The other statements, particularly made by the Iran-US Claims Tribunal, as will be seen in Chapter 10, are obiter dicta in contrast to rationes decidendi. The result of reopening a case where there are allegations of fraud or corruption, needless to say, may be to reverse the award, modify it or confirm it. Rectification Very rarely do the constitutive instruments of tribunals provide for correction or rectification of a judgment which involves reopening the case. While the constitutive instruments of the Iran-US Claims Tribunal make no reference to rectification, the Rules of the tribunal refer in Article 36 to the power of the tribunal to reopen a case to rectify a judgment. This jurisdiction has never been questioned before that tribunal which invites the conclusion that the jurisdiction is inherent. The rules of the tribunal merely recognize this jurisdiction and implement the procedures for invoking it. In the Lehigh Valley Railroad Company Case the arbitral tribunal conceded in a general statement that, where the tribunal had made a mistake in calculation or where the decision “does not comport with the record as made”, the tribunal had the duty and power to reopen and make the necessary corrections.34 This was a recognition of an inherent jurisdiction. In the Patrimoine Clément Raoul Boccara (No. 245) similarly the tribunal said that it “pourrai corriger après coup une erreur materielle, c’est-a-dire d’expression, de calcul, de copie”.35 In the case of the ICJ the statute does not provide for the correction of clerical errors and the like but the Court has conceded that, nevertheless, it has the inherent jurisdiction to make such corrections.36

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36

(1933), 8 UNRIAA at p. 188. (1959), France v. Italy, 13 UNRIAA at p. 464. See also the Delimitation of the Continental Shelf Case (Application for Interpretation) (1978), 18 UNRIAA at p. 300, where the tribunal adverts to the tribunal’s jurisdiction in this respect. The tribunal said that the power to rectify need not be mentioned in the compromissory clause. In circumstances where the parties agreed that there existed a discrepancy between the earlier reasoning of the tribunal and the relevant operative provision of the award the tribunal proceeded to rectify an error in the dispositif. On rectification by ICSID tribunals which has been acknowledged to be possible see C.F. Amerasinghe, op. cit. note 18 pp. 493–4 (Article 49 of the ICSID Convention). For example, rectification was allowed recently in Soufraki v. UAE (2007), . See the Application for Revision and Review Case, 1985 ICJ Reports at p. 198. “Erreurs matérielles” is the term used usually for technical errors.

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There can be no question, therefore, that arbitral tribunals have an inherent jurisdiction to correct clerical and technical and similar errors. However, a “tribunal may have to decide, in the appropriate circumstances, what exactly is “a technical error”, which may be a difficult task sometimes. Clearly, clerical and grammatical mistakes may be such errors. But, if as has been held, a mistake in calculation which is a form of error in logic, is such an error, the question may be asked, whether errors in logic, for example, flowing from the drawing of erroneous conclusions from the reasoning or reasons given in the judgment, which may or may not be the result of oversight, may be characterized as technical errors. There are obviously some limitations, jurisdictionally, which apply to this kind of error in respect of whether it may be rectified. Interpretation Interpretation of a judgment which involves reopening a case, even if to a very limited extent, and is an inroad into the notion of finality and res judicata has been expressly permitted in constitutive instruments of international arbitral tribunals. For example, Article 50(1) of the ICSID Convention provides, for ICSID arbitrations, that “If any dispute shall arise between the parties as to the meaning or scope of an award, either party may request interpretation of the award . . .”. The statute of the ITLOS provides in Article 12(1) that “Any controversy which may arise between the parties to the dispute as regards the interpretation . . . of the award may be submitted by either party for decision to the arbitral tribunal which made the award.” There are examples of ad hoc arbitration treaties which have incorporated provisions for interpretation.37 Clearly, where interpretation is expressly provided for in constitutive instruments, the terms of those provisions would govern the jurisdiction to interpret. Cases have come up before the PCIJ and ICJ, in which it has had to determine its jurisdiction to interpret under the provisions of Article 60 of its statute. The interpretation given the provisions of Article 60 by the Court is important and in some respects is relevant to any inherent jurisdiction to interpret that may exist under general principles of law. With regard to interpretation the general principle is that interpretation cannot go beyond the limits of the judgment. If the original case was instituted by notification or a special agreement, the limits of the judgment will

37

See, e.g., Article 10 of the Arbitration Agreement on the Delimitation of the Continental Shelf between France and UK which resulted in the interpretative decision by the arbitral tribunal of 1978 (see 18 UNRIAA p. 271).

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be determined by the special agreement.38 It is possible that the final submissions of the parties determine the scope of the judgment: they make clear the points which had been settled with binding force and also establish whether a particular point has or has not been decided with binding force.39 Importantly, if the object of the request for interpretation is to obtain an answer to questions not so decided, it will be declared inadmissible.40 Interpretation relates entirely to ascertaining or clarifying what constitutes the binding decision (or the res judicata) and cannot go beyond those limits. For that reason, a judgment involving interpretation cannot consider new facts arising or becoming known after the principal judgment.41 The question is whether in the absence of explicit consent or provision in the constitutive instrument an arbitral tribunal has inherent jurisdiction to interpret its previous judgments. The PCIJ cast some doubt on the existence of such an inherent jurisdiction. In the Jaworzina Opinion the Court dealt with the duties of the Conference of Ambassadors which had been instructed by the Supreme Allied Council to divide the three territories of Teschen, Orava and Spisz. The Court concluded that this task had been fulfilled by the Conference, when it set up a Delimitation Commission and defined its powers. The Court said: The duties of the Conference . . . had some points in common with those of an Arbitrator entrusted by two States with the settlement of a frontier dispute between them. But in the absence of an express agreement between the parties, the Arbitrator is not competent to interpret, still less modify his award by revising it.42

It is possible to limit the statement to the kind of arbitration involved in the case, an ad hoc arbitration, for the settlement of land frontier disputes,43 or even to restrict it to the particular arbitration before the Court but the statement was a general one. In fact the practice of standing courts and arbitral tribunals since that case contradicts the general position adopted in that statement. While there have been arbitrations where interpretation of a previous judgment by a tribunal, whether the same or another, has taken

38 39 40 41

42 43

See, e.g., the Treaty of Neuilly Case (Interpretation) (1925), PCIJ Series A No. 4. The Chorzów Factory Case (Interpretation) (1927), PCIJ Series A No. 12 at p. 11. The Asylum Case (Interpretation), 1950 ICJ Reports at p. 402. For an examination of the ICJ and PCIJ cases see C.F. Amerasinghe op. cit. note 18 pp. 181–5. The World Court has in fact interpreted its previous judgments without having difficulty in asserting its jurisdiction to do so: see Rosenne, op. cit. note 27 pp. 91–111. (1923), PCIJ Series B No. 8 at p. 38. See Rosenne, 3 The Law and Procedure of the International Court 1920–2005 (2006) p. 1670.

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place on the basis of specific explicit agreement between the parties,44 there have also been instances of arbitral tribunals and standing courts exercising jurisdiction to interpret their own judgments even in the absence of explicit provision in the relevant constitutive instruments. An example is the IranUS Claims Tribunal. In the case of the Iran-US Claims Tribunal its constitutive instruments are silent on the jurisdiction to interpret its own judgments. However, the Rules of the tribunal (which are not constitutive instruments but emanate from the tribunal itself) in Article 35 enable either party in a case to request an interpretation of the award in the case. This article clearly reflects the view of the tribunal that it has the inherent jurisdiction to interpret its judgments. In fact in several cases requests for interpretation were made but the tribunal, while never disclaiming the jurisdiction to interpret, has found that there was no ambiguous language to interpret, it being its clear view that the jurisdiction to interpret would only be exercised where there was ambiguous language.45 In short a prima facie case must be made that there is an ambiguity in the dispositif, if jurisdiction is to be assumed.46 The inherent authority to interpret judgments of international arbitral tribunals would be similar to the power given by Article 60 of its statute to the ICJ to interpret its own judgments. Thus, what has been said elsewhere about the ICJ’s statutory jurisdiction to interpret its judgments must apply in principle also to the inherent jurisdiction of arbitral tribunals. That is to say, the formulation of Article 60 in principle covers the content of the inherent jurisdiction as well. The emphasis placed on the need for the existence of “ambiguity” by the Iran-US Claims Tribunal is a useful addition which is not in conflict with Article 60 of the ICJ statute but complements it and may be implied in that provision also.47

44

45

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See, e.g., Delimitation of the Frontier-line Case (1966), Argentina v. Chile, 16 UNRIAA at p. 174, Delimitation of the Continental Shelf (Application for Interpretation) (1978), France v. UK, 18 UNRIAA at pp. 285–7, 289. See, e.g., the Ford Aerospace and Communications Corporation., et al. Case (1986), 12 Iran-US CTR at p. 305, the Pepsico, Inc. Case (2) (1986), 13 ibid. at pp. 329–30, the Paul Donin de Rosiere Case (1987),14 ibid. at p, 101, the Sedco, Inc., et al. Case (1987), 16 ibid. at p. 284, the Uiterwyk Corp et al. Case (1988), 19 ibid. at p. 173. Interpretation before the Iran-US Claims Tribunal is considered in detail in Chapter 10. For some international arbitrations in which subsequent requests for interpretation have been allowed without objection and without discussion of the jurisdiction of the tribunals see Rosenne, op. cit. note 27 pp. 112–27.

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Annulment Jurisdiction to annul judgments of an international arbitral tribunal may specifically be provided for by its constitutive instruments. Apart from that there remains the question whether a tribunal has an inherent jurisdiction to annul, subject to a contrary indication in the constitutive instruments. Express Provision Where annulment of judgments of a tribunal are provided for by its constitutive instruments, these provisions govern the jurisdiction to annul. Even though the constitutive instruments may provide that the judgments are binding and without appeal or have similar effect, the instrument may provide that annulment is possible. The ICSID Convention provides in Article 53 that arbitral judgments are binding and without appeal but also provides in Article 52 that annulment is possible by another tribunal (Committee) constituted under the Convention. Where such provision is made, judgments may be reopened and annulled (or not) following the procedure set out in the constituent instrument. Article 52(1) of the ICSID allows either party to the arbitration proceedings to request the annulment of the award on one or more of the following grounds: the tribunal was not properly constituted; it manifestly exceeded its powers; there was corruption on the part of a member of the tribunal; there was a serious departure from a fundamental rule of procedure; or the award failed to state the reasons upon which it was based.48 The annulment jurisdiction of ICSID has been exercised in several cases: early on in what are the most important annulment cases one arbitral award of the Centre was completely annulled, and two awards were partially annulled. The first annulment ruling was made in the Klöckner Case,49 where the annulling tribunal decided that the award was to be completely annulled since the previous tribunal did not apply the law that it ought to have applied in accordance with the ICSID Convention, and thus exceeded its authority. In the Amco Case50 the annulling tribunal ruled that the award was to be partially

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The request for annulment is referred to the Secretary-General of ICSID who then appoints an ad hoc Committee of three members (tribunal) from the panel of arbitrators; however, arbitrators who participated in the tribunal which rendered the controversial award may not be appointed. The enforcement of the award could be delayed until a decision is rendered regarding its validity, either by means of a request made by the applicant, or at the initiative of the Committee. If the applicant requests a stay of enforcement of the award in his application for annulment, enforcement is delayed provisionally until the Committee has ruled on the request. (1985), 2 ICSID Reports p. 95. (1986), 1 ibid. p. 509.

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annulled, because the previous tribunal erred in calculating the sum of money actually invested, in that it did not compute the sum as required in accordance with Indonesian law. The tribunal had, thus, manifestly exceeded its powers. The second tribunal took the view that the deviation from the agreed amount was in fact substantive and justified the termination of the agreement by Indonesia. In the Mine Case51 Guinea requested the annulment of the award against it. The second tribunal dismissed the request for annulment of that part of the award which held that Guinea had been in breach of contract; however, it granted the request for annulment of the ruling with respect to damages. In the first two proceedings on annulment, the jurisdiction of the ad hoc tribunal was not questioned nor did the tribunals address the issue of jurisdiction. In the Mine Case, however, there were some issues raised about the jurisdiction of the ad hoc tribunal and the tribunal made some statements on this matter. On the concern for finality of ICSID arbitration decisions and the jurisdiction to reopen cases the tribunal took the view that, while the ICSID Convention described the awards of tribunals as binding and not subject to appeal (Article 53), there were clear exceptions to this by express provision in the Convention. It said:

51

(1989), 4 ibid. p. 79. The annulment decisions in the three cases but particularly in the Klöckner Case and the Amco Case have been examined by Pirwitz, “Annulment of Arbitral Awards under Article 52 of the Washington Convention on the Settlement of Investment Disputes”, 23 Texas ILJ (1988) p. 73, Reisman, “The Breakdown of the Control Mechanism in I.C.S.I.D. Arbitration”, 4 Duke LJ (1989) p. 739, Branson, “Annulments of ‘Final’ ICSID Awards Raise Questions about the Process’’, National LJ (1986) p. 25, Feldman, “The Annulment Proceedings and the Finality of ICSID Arbitral Awards”, 2 FILJ (1987) p. 85, Schatz, “The Effect of the Annulment Decision in Amco v. Indonesia and Klöckner v. Cameroon on the Future of the International Centre for Settlement of Investment Disputes”, 3 Am.UJILP (1988) p. 481, Thompson, “The Klöckner v. Cameroon Appeal: A Note on Jurisdiction”, 3 J.Int’l Arb. (1986) p. 93, Curtis, “Amco v. Indonesia”, 83 AJIL (1988) p. 106, Gaillard, “Amco v. Indonesia: Introductory Note”, 25 ILM (1988) p. 1339, E. Lauterpacht, op. cit. note 30 pp. 101 ff., Sturzenegger, “ICSID Arbitration and Annulment for Failure to State Reasons – The Decision of the Ad Hoc Committee in Maritime International Nominees Establishment v. The Republic of Guinea”, 9 J.Int’l Arb. (1992) p. 173, Hirsch, The Arbitration Mechanism of the International Centre for the Settlement of Investment Disputes (1993) pp. 34 ff. Many of these authors on account of these three annulment cases in which annulment did take place express concerns about the utility of the annulment mechanism under the ICSID Convention, because particularly it leads to the absence of instant finality and also causes delays. But the answer to this is that the primary aim should be to secure justice, even if it is at the expense of quick “fixes”. Indeed, the grounds for annulment under Article 52 of the Convention are specifically limited and the results of the application of that article have not been unfair or improper.

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A. Finality of ICSID Awards 4.02 Article 53 of the Convention provides that the award shall be binding on the parties “and shall not be subject to any appeal or to any other remedy except those provided for in this Convention”. The post-award procedures (remedies) provided for in the Convention, namely, addition to, and correction of, the award (Art. 49), and interpretation (Art. 50), revision (Art. 51) and annulment (Art. 52) of the award are to be exercised within the framework of the Convention and in accordance with its provisions. It appears from these provisions that the Convention excludes any attack on the award in national courts. The award is final in that sense. It is also final in the sense that even within the framework of the Convention it is not subject to review on the merits. It is not final, on the other hand, in the sense that it is open to being completed or corrected, interpreted, “revised”, or annulled. It is to this last remedy that Guinea has had recourse in the present case.52

The ad hoc tribunal also explained the limited nature of the remedy of annulment which was based only on five grounds and expressed clear views on the manner in which Article 52(1), particularly sub-paragraphs (b) and (d), should be construed. It said: 4.04 Article 52(1) makes it clear that annulment is a limited remedy. This is further confirmed by the exclusion of review of the merits of awards by Article 53. Annulment is not a remedy against an incorrect decision. Accordingly, an ad hoc Committee may not in fact reverse an award on the merits under the guise of applying Article 52. 4.05 The fact that annulment is a limited, and in that sense extraordinary, remedy might suggest either that the terms of Article 52(1), i.e., the grounds for annulment, should be strictly construed or, on the contrary, that they should be given a liberal interpretation since they represent the only remedy against unjust awards. The Committee has no difficulty in rejecting either suggestion. In its view, Article 52(1) should be interpreted in accordance with its object and purpose, which excludes on the one hand, as already stated, extending its application to the review of an award on the merits and, on the other, an unwarranted refusal to give full effect to it within the limited but important area for which it was intended. 4.06 The Committee notes that it is not inconsistent with the foregoing, and that it is in fact incumbent on an ad hoc Committee, to give full effect to the wording of Article 52(1) which defines and delimits the grounds for annulment. Thus, Article 52(1)(b) does not provide a sanction for every excess of its powers by a tribunal but requires that the excess be manifest which necessarily limits an ad hoc Committee’s freedom of appreciation as to whether the tribunal has exceeded its powers. Again, the text of Article 52(1)(d) makes clear that not every departure from a rule of procedure justifies annulment; it requires that the departure be a serious one and that the rule of procedure be fundamental in order to constitute a ground for annulment.53

52 53

(1989), 4 ICSID Reports at p. 84. Ibid. at p. 85.

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The tribunal took the view that it had jurisdiction to annul the award partially rather than fully, and that for this reason, Guinea’s request for partial annulment was clearly admissible. Guinea sought the annulment of the portion of the award adjudging MINE’s claim, and not annulment of the portion of the award adjudging Guinea’s counter-claim. Annulment of that portion had not been requested by MINE, either. As a result, that portion of the award would, in the tribunal’s view, remain in effect regardless of the annulment in whole or in part of the portion of the award in respect of which Guinea had formulated its request for annulment. In case of a resubmission of a dispute after annulment in part of the original award, the new tribunal would not reconsider any portion of the award not annulled.54 The ad hoc tribunal also conceded and acknowledged that the jurisdiction to annul was subject to a discretion on the part of the tribunal which, however, was based entirely on avoiding annulment, where it was not required to remedy procedural injustice and where it would unjustifiably erode the binding force and finality of ICSID awards, and not on the consideration that a series of annulments might impair the effectiveness and integrity of ICSID: 4.09 Article 52(3) provides that an ad hoc Committee “shall have the authority to annul the award or any part thereof on any of the grounds set forth in paragraph (1)”. The Convention does not require automatic exercise of that authority to annul an award whenever a timely application for its annulment has been made and the applicant has established one of the grounds for annulment. Nor does the Committee consider that the language of Article 52(3) implies such automatic exercise. 4.10 An ad hoc Committee retains a measure of discretion in ruling on applications for annulment. To be sure, its discretion is not unlimited and should not be exercised to the point of defeating the object and purpose of the remedy of annulment. It may, however, refuse to exercise its authority to annul an award where annulment is clearly not required to remedy procedural injustice and annulment would unjustifiably erode the binding force and finality of ICSID awards. 4.11 In the course of the proceedings, MINE has advanced the argument that a series of annulments of ICSID awards might impair the effectiveness and integrity of ICSID as an international institution for settlement of disputes between States and foreign investors. The Committee was accordingly urged to keep this consideration in mind in its examination of Guinea’s application. 4.12 MINE’s argument wrongly assumes that frequent annulments will necessarily be the result of overly strict tests applied by ad hoc Committees. It overlooks the possibility that such frequent annulments reflect neglect by arbitrators, parties or counsel of requirements flowing from the specificity of ICSID arbitration as defined in the Convention and the Arbitration Rules. A pure

54

Ibid.

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statistical approach, for which there is in any event no significant basis at the present time, is wholly inappropriate as a measure of ICSID’s effectiveness.55

There are some other examples of the exercise of annulment jurisdiction on the bases of explicit agreement, generally by reference to a different tribunal. In the I.V.E.M Case (No. 183) the request for annulment was based on the “vice d’ultra petita”. The tribunal found that the terms of the award did not “dépassent les limites de l’acte de citation (ici, de la requêt).”56 In the Orinoco Steamship Company Case the jurisdiction to annul of a fresh tribunal was created by an agreement between the two states concerned subsequent to the decision of the first tribunal.57 The respondent state argued that the original decision was valid, because there had been no excess of power, nor alleged corruption of judges, nor any “essential error” in the decision. Although on one of the claims the second tribunal held: “Whereas the appreciation of the facts of the case and the interpretation of the documents were within the competence of the Umpire and as his decisions, when based on such interpretation, are not subject to revision by this tribunal, whose duty it is not to say if the case had been well or ill judged, but whether the award must be annulled; that if an arbitral decision could be disputed on the ground of erroneous appreciation, appeal and revision, which the Conventions of The Hague of 1899 and, 1907 made it their object to avert would be the general rule;”58 on certain other points the second tribunal held void the award of the first tribunal for excessive exercise of power which in the case consisted not “in deciding a question not submitted to the arbitrators” but “in misinterpreting the express provisions of the relevant agreement in respect of the way in which they were to reach their decisions, notably in regard to the legislation or the principles of law to be applied”.59

55

56 57 58 59

Ibid. at pp. 85–6. The ICSID annulment mechanism had been criticized on a variety of grounds in the literature: see footnote 51 above. However, the possibility of annulment which is recognized, as will be seen, as an inherent jurisdictional power, in general international law, cannot be criticized. Rather must the scope of the jurisdiction be reasonably conceived. The scope of the ICSID jurisdiction to annul does not appear to be too wide and has been reasonably interpreted. The mechanism of arbitral annulment in national systems of law, particularly in private international law systems, has been examined by van den Berg, “Annulment of Awards in International Arbitration”, in Lillich and Brown (eds.), International Arbitration in the 21st Century (1992) p. 133. (1955), 13 UNRIAA at p. 376. (1910), 11 ibid. p. 237. Ibid. at p. 239. Ibid.

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Partial Nullity and Res judicata The issue that has arisen after the series of arbitral decisions in the Amco Case60 is that of res judicata and the implications of the application of the principle in the face of partial nullity declarations in respect of the judgment of the first arbitral tribunal by a subsequent tribunal pursuant to the annulment procedures provided for in the ICSID Convention. This is the only instance in which the issue has arisen. It arose under the ICSID Convention but there is no good reason why any solutions should not apply to partial nullity findings in general. The dispute in the case giving rise to the First Award arose out of a project to develop a hotel property in Jakarta, the Kartika Plaza. Amco Asia’s investment in the project was authorized by an investment licence issued by Indonesia’s Capital Investment Coordination Board (BKPM). In addition, construction and management of the hotel were governed by a joint venture agreement between Amco Asia and an Indonesian corporation, P.T. Wisma, which was affiliated with the Indonesian army. Following a management dispute with Amco Asia, P.T. Wisma seized control of the hotel with the assistance of Indonesian military forces. Some three months later the BKPM revoked Amco Asia’s investment licence, relying in part on the ground that Amco Asia had failed to invest the minimum $3 million of foreign equity capital required by the licence. In the First Award it was held that P.T. Wisma’s takeover of the hotel constituted illegal self-help and that the support lent by the Indonesian military violated both Indonesian law and international law. In addition, the tribunal determined that Amco Asia had been denied due process in the proceedings that culminated in the revocation of its investment licence, and that the revocation was substantively unjustified: Amco Asia had invested much more equity capital than the BKPM gave it credit for. The BKPM’s action therefore violated Indonesian law, as well as the international law principles of pacta sunt servanda and respect for acquired rights. The tribunal made several findings and arrived at several conclusions of law in the course of making the award. Indonesia in the Annulment Case adduced various grounds for annulment of the whole of the First Award. The second tribunal in that case rejected most of these grounds but it held that to qualify as meeting the requirements of the investment licence sums invested by Amco Asia were required by 60

The three relevant awards were (1) the Award on the Merits (1984), 1 ICSID Reports p. 413 (referred to here as the First Award), (2) Award on the Annulment Application by Indonesia (1986), 1 ibid. p. 509 (referred to here as the Annulment Case), (3) Resubmitted Case, Decision on Jurisdiction (1988), 1 ibid. p. 543 (referred to here as the Jurisdiction Case). On this case see also Curtis, “International Investment Disputes – Res judicata Effect of Partially Annulled ICSID Award”, 83 AJIL (1989) p. 106.

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Indonesian law to be recognized and registered by the competent Indonesian authority, the Bank of Indonesia, and that most of Amco Asia’s investment failed to meet that criterion. The second tribunal, consequently, held that the first tribunal had clearly failed to apply the relevant provisions of Indonesian law and had “manifestly exceeded its powers” in this regard.61 That finding was, therefore, annulled. The second tribunal, further, concluded that the first tribunal, in addition to overlooking the registration requirement, had contradicted itself in calculating the amount of Amco Asia’s investment; the tribunal, therefore, held that the first tribunal had “failed to state reasons” for its calculation and annulled that finding as well.62 Because the revocation of Amco Asia’s investment licence was substantively justified, the second tribunal concluded that the finding that Amco Asia could recover damages accruing after the date of its cancellation was flawed. Affirming the illegality of P.T. Wisma’s seizure of the hotel with the support of the Indonesian military prior to that date, the second tribunal found that Amco Asia would have been entitled to damages accruing between the date of the seizure and the date of revocation. However, it noted that the first tribunal’s award of damages was not segregated as to time period, but rather represented the capitalized present value, as of the date of the seizure of Amco Asia’s expected future earnings on the project. The second tribunal, as a consequence, annulled the award of damages as a whole. In the Jurisdiction Case the principal issue before the third tribunal was what treatment was to be given to those portions of the First Award that had been annulled. The tribunal rightly held in the first place that matters decided by the first tribunal in the First Award which had not been annulled by the second tribunal were res judicata and could not be reopened and reargued. This applied to all the matters of this nature which had been raised as issues in the Jurisdiction Case about which there was dispute as to whether they had been annulled or not. In the second place, in this regard, it held that, although the conclusions which had not been annulled were res judicata, the reasoning upon which those conclusions were based was not res judicata.63 The consequence of this was that that reasoning was not binding

61 62 63

1 ICSID Reports at p. 536. Ibid. at pp. 537–8. The third tribunal conceded that there was disagreement among systems of national law as to whether the principle adopted by the tribunal was established, citing, for the principle, de Visscher, Aspects recents de droit procédural (1966) at p. 179 and a study which concluded that the principle was accepted in the civil law systems: Millar, “The Premises of the Judgment as Res judicata in Continental and Anglo-American Law”, 39 Mich.L.R. (1940) at pp. 8–9; see 1 ICSID Reports at pp. 550–1. It proceeded to apply the principle stated in the text because, in its view, the system enabling partial declarations of nullity entrenched in

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to the extent that it could not be reopened and re-litigated. In regard to those conclusions that had been annulled the tribunal held that they were not res judicata and could be re-litigated. There was also a long list of conclusions of the first tribunal produced principally by Amco Asia Corporation, the claimant, which had not been raised in the annulment proceedings and in relation to which the question was asked whether re-litigation could take place because they were res judicata, because they had been reached by the first tribunal and had not been subjected to annulment in any case, though the reasoning behind these conclusions was not res judicata.64 It was in regard to the questions raised by Indonesia, the respondent, as to whether certain findings in the reasoning of the second tribunal, the annulling tribunal, which related to the conclusions annulling certain parts of the original award that the issue of res judicata was cogently pertinent. Following the principle that reasoning behind a holding was not res judicata, the third tribunal categorically held that some of the ancillary findings in the reasoning behind the conclusions of annulment were not res judicata and could be reopened and re-litigated in the proceedings before the third tribunal. The argument adduced by the respondent, Indonesia, that matters in the reasoning which were “integral to” the conclusions which were annulled could not be re-litigated, because they had become res judicata by virtue of the res judicata character of the conclusions of annulment, was not accepted. There are some difficulties with the approach of the tribunal to conclusions of annulment and the reasoning behind them. The point is that such conclusions are not conclusions of the same nature or genre as the conclusions in the first or original award which were the subject of annulment. The conclusions of annulment erased certain conclusions in the original award and left open the issues relating to them as undecided and open to litigation and settlement in a future arbitration, if necessary. What they did was not to insert the opposite conclusion to the conclusions reached in the original award but merely to remove the latter so that the position was that the conclusions were never reached. Thus, while it is not meaningless to say that the annulment conclusions are res judicata to the extent that they did in fact establish as a matter that was “chose jugé” that the conclusions in question in the original award did not exist, there is no sense in giving them any value as establishing positive or negative conclusions in regard to the respective

64

the ICSID Convention required and warranted it: ibid. at pp. 551 ff., but in fact it is most probable that the principle is accepted as a general principle applicable in international adjudication. Ibid. at pp. 556–7.

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claims raised in the original or first arbitration. Those annulling conclusions are not res judicata in a substantive sense in regard to claims and issues raised in the first arbitration and in regard to which the conclusions reached were annulled. Hence, the question of res judicata (“chose jugé”) in regard to these annulled conclusions, and by the same token the reasoning behind them, is irrelevant to the issue of what is res judicata and what is not in the first arbitral award, and what may be reopened and re-litigated. In fact, the consequence of the partial annulment is simply that (i) all the conclusions of the first award which were not annulled are res judicata, (ii) all the reasoning behind those conclusions is not res judicata, and (iii) everything else, particularly those conclusions and issues related to them which were annulled are not res judicata and are completely open to re-litigation, irrespective of the reasoning behind the annulment decisions and also the reasoning behind the matters that are res judicata as a result of being conclusions under the first award which still stand. More difficult, the above having been said, is to distinguish between conclusions (or “findings”) which are res judicata in a given judgment of a tribunal and what is part of the “reasoning” leading to such conclusions which is not res judicata, particularly when some conclusions or findings have been annulled and some have not, and still stand, whether they were the subject of the annulment proceedings or not. The issue may certainly arise where no annulment proceedings have taken place after an arbitration or adjudication and a related dispute is litigated in a later arbitration or adjudication between the same parties but the problem is particularly acute in cases where there has been partial annulment, as occurred in the Amco Case. In the Amco Case the rulings of the third tribunal as to what “findings” were conclusions that were res judicata may or may not be questioned on grounds related to the problem raised above, but that problem is of a general nature and it is one which is difficult to solve in the abstract. Solutions will relate to the circumstances of a particular case. It may not be always the answer to identify the final conclusion or finding or final conclusions or findings which lead directly to the prescription of a remedy as the only element that is res judicata. As the Amco Case shows, there may be findings prior to those final conclusions or findings which are sufficiently important for them to be regarded as res judicata. Not all of the matters identified as res judicata were final conclusions leading directly to the prescription of the remedy. Many of them were not of this nature but were findings or conclusions which were made in the course of coming to the final conclusions that there were breaches of contract. Hence, there is still a question the answer to which requires the exercise of judgment, namely what matters are “findings” or “conclusions” that are to be res judicata as contrasted with conclusions or findings that are not to be so regarded.

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Inherent Jurisdiction to Annul There are no instances where the question has arisen whether the same tribunal has an inherent jurisdiction to annul its previous judgments, i.e., where the constitutive instruments are silent on the matter. The question does not arise in relation to a different tribunal. The latter would not have an inherent jurisdiction to annul judgments which are not its own. The international system does not permit this, unless there is specific agreement to this among the parties concerned directly, indirectly or derivatively. If a tribunal has a limited inherent jurisdiction to revise or review its judgments, as has been pointed out in an earlier section, there is no good reason why it should not have a similar jurisdiction to annul its judgments, wholly or partly, which is a lesser exercise. Indeed, the conclusion may be stated conversely. If a tribunal has a certain inherent jurisdiction to review its own judgments in certain circumstances, it is logical that it has an inherent jurisdiction similar in scope to annul its own judgments. The scope of this jurisdiction will depend on what is determined to be the scope of the inherent jurisdiction to review which, it has been shown, exists in the current international adjudicatory system.65

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A completely new phenomenon is recourse to the PCIJ or ICJ in regard to international arbitral decisions with requests for interpretation or revision or with regard to the admissibility of the cases before the arbitral tribunals. The jurisdiction of the Word Court derives from the constituent texts of the tribunals or other instruments relating to the jurisdiction of the Court: see Rosenne, op. cit. note 27 pp. 145 ff.

Part III The Iran-U.S. Claims Tribunal

Chapter Ten The Iran-U.S. Claims Tribunal The object of this chapter is primarily to sharpen the cutting edge of the knife, so to speak. Three areas of the Iran-US Claims Tribunal’s jurisprudence will be examined in order to ascertain the particularities of the jurisdiction of the tribunal in these areas and also to investigate the specific contribution which the tribunal has made in these areas to the law governing international arbitral jurisdiction. It is believed that in these areas particularly, the tribunal has made a substantial and significant contribution by its approach, aside from the general contribution it has made in other areas as described in the preceding chapters. The tribunal has interpreted its constituent instruments in these areas but some of the contributions go beyond these instruments, in a manner of speaking, and will have an impact on general international law. The three areas are (1) the compétence of the tribunal and questions of admissibility (primary jurisdiction); (2) the ordering of interim measures (incidental jurisdiction); and (3) the reopening of cases already decided (corrective jurisdiction). Clearly, in these areas the tribunal has had, among other things, to interpret and apply the Compromis governing its establishment. However, some of the contributions the tribunal has made go beyond these instruments, in a manner of speaking, and will or may have an impact on the development of general international law.

Primary Jurisdiction: Compétence and Admissibility The tribunal, broadly, may or may not have competence over the matter, in dispute ratione temporis, ratione personae or ratione materiae.1 1

On compétence see the full examinations by Brower and Brueschke, The Iran-United States Claims Tribunal (1998) pp. 26–122, Aldrich, The Jurisprudence of the Iran-United States

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Compétence Ratione Temporis Claims “Outstanding” on the Relevant Date The Claims Settlement Declaration (CSD) requires that claims of nationals must have arisen on or before the date of the Algiers Accords, 19 January 1981.2 Article II, paragraph 1 states that the tribunal has jurisdiction “if such claims and counterclaims are outstanding on the date of this agreement, whether or not filed with any court.” Thus, the CSD does not require a previous filing with a court or tribunal for a claim to be “outstanding.” While some respondents have argued that the tribunal does not have competence over claims which had not been filed in any municipal court before 19 January 1981, the tribunal has consistently not accepted such arguments. In the Mobil Oil Iran, Inc. Case3 for example, the tribunal did not accept the respondents’ argument that it lacked jurisdiction over claims based on breach of contract and expropriation that never had been filed with any national court or international tribunal and had not been communicated to the respondents until November 1981. The tribunal stated that “the [CSD] expressly provides that, to be outstanding, a claim need not have been filed with a court.”4 It furthermore explained that the tribunal has jurisdiction over claims, not disputes, as do intergovernmental tribunals. The question as to whether a dispute was already born, therefore, does not arise. It suffices that a claim is ripe, so that a cause of action does exist . . .5

In this connection disagreement has arisen, however, over the term “outstanding” in the CSD provision. The tribunal generally has interpreted the term to mean that the claim must have ripened by 19 January 1981.6 Ripe-

2

3 4 5

6

Claims Tribunal (1996) pp. 44–123. The summaries of relevant cases in these works are particularly helpful. It would appear by its terms that this limitation does not apply to governmental claims: see concurring opinion of Aldrich in Ministry of Roads and Transportation v. Port of Vancouver, Washington (1983), 3 Iran-US CTR at p. 348. (14 July 1987), 16 Iran-US CTR p. 3. Ibid. at p. 17. Ibid. See also the Harold Birnbaum Case (1993), 29 ibid. p. 260 at p. 265, where the tribunal affirmed that “the tribunal has repeatedly held that a claimant need not have submitted a claim or instituted proceedings before 19 January 1981 for a claim to be ‘outstanding’ ”. Mobil Oil Iran Inc. Case (1987), 16 ibid. at pp. 16–17. See also, e.g., the Harold Birnbaum Case (1993), 29 ibid. at p. 245, the ITEL International Corporation Case (1990) 24 ibid. at p. 281; the Oil Field of Texas, Inc. Case (1986), ibid. at p. 314; the Phillips Petroleum Company, Iran Case (1982), ibid. at pp. 491–2.

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ness, according to the tribunal, occurs when a cause of action exists.7 Thus, if the claimed breach of contract, expropriation or other measure affecting property rights occurred, or alleged debt fell due, after 19 January 1981, the tribunal has taken the view that it must dismiss the claim.8 There has been difficulty in determining when a claim is outstanding or ripe in this sense. With respect to Iranian bank accounts the claimant in the Harza Engineering Co. Case9 alleged that its accounts in two Iranian banks had been appropriated as a result of interference by Iran with its use and enjoyment of those accounts. The banks countered that the accounts remained available to the claimant. The tribunal dismissed the claim as not outstanding on 19 January 1981, stating that a mere right to payment from a bank account was not a “claim within the meaning of the CSD, but a claim that the use of the account had been interfered with unreasonably or that the account had in some other manner been taken was such a claim. The tribunal found that, with respect to one bank, the claimant had made no effort to withdraw funds while, with respect to the other bank, the claimant failed to prove that the bank’s actions amounted to unreasonable interference. It also pointed out that while one cheque had been wrongfully dishonoured, thus giving rise to a claim for breach of contract, the claimant made no such claim and did not allege losses resulting from that refusal to honour. The tribunal refused to hold that a legal cause of action existed against a bank that it found had done nothing wrong and stated its willingness to honour properly drawn requests on the accounts.10 In the Blount Brothers Corp. Case the tribunal held that there was no “outstanding” claim, stating in this connection that it was axiomatic that the duties of a banker to honour its customer’s cheques and make such dispositions or transfers as are requested, only crystallized into a specific obligation once a cheque had been presented or a request had been made with respect to particular funds.11 The tribunal in the Computer Sciences Corp. Case, on the other hand, held that claims for bank accounts were outstanding where the claimant proved that it had made a demand for payment prior to 19 January 1981, but not with regard to other accounts where no demand was proved.12 In that case, the demands had been refused on the grounds of exchange restrictions, and the banks were held liable to the claimant on the

7

8 9 10 11 12

See the Esahak Saboonchian Case (1991), 27 ibid. at p. 254; the Development and Resources Corporation Case (1990), 25 ibid. at pp. 58–9. See, e.g., the Hooshang Kahen Case (1988), 18 ibid. at p. 290. (1982), ibid. p. 499. See also the Tippetts, Abbett, McCarthy, Stratton Case (1984), 6 ibid. p. 219. (1986), 10 ibid. p. 95 at pp. 140–1. (1985), 10 ibid. p. 269.

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ground that they had failed to show that they had sought approval of Bank Markazi as they were required to do by Iranian law. The tribunal has, in general, in regard to claims to funds in bank accounts found that it has jurisdiction where there was proof of demand prior to 19 January 1981 and dismissed cases for lack of jurisdiction where such proof was not given.13 The tribunal’s holdings with respect to the question whether a request for payment must be made prior to 19 January 1981 for a claim to be outstanding on that date have differed, depending on whether the claim is for withdrawal or transfer of funds from bank accounts or is another type of claim. In the Phillips Petroleum Co. Case and the Amoco Iran Oil Co. Case the tribunal held implicitly that no demand was necessary when a contract was nullified or property was expropriated.14 In the Ammann and Whitney Case the tribunal held that claims for payments due under a contract that was terminated pursuant to a force majeure clause in May of 1981 were nevertheless outstanding on 19 January 198115 The work was completed and billed prior to 19 January 1981. In the Linen, Fortinberry and Associates, Inc. Case,16 the tribunal awarded compensation for expenses that were reimbursable under a contract but that had been neither invoiced nor otherwise demanded prior to the submission of the claim to the tribunal. In the Sedco, Inc., et al. Case17 the tribunal held that claims based on demand promissory notes that had been issued in 1978 were outstanding because, under the applicable law of Texas, a cause of action on a demand promissory note matured on the date of its issuance and did not require a demand to have been made. The tribunal also held there that inter-company debts owed and payable prior to 19 January 1981 constituted outstanding claims, even though payment had not been demanded prior to that date and the claimant had considered writing off or forgiving the debts.18 In most claims involving the expropriation, taking, or deprivation of property rights, it was found to be clear that the actions that engaged the respon13

14 15 16 17 18

See, e.g., the Ronald Stuart Koehler Case (1986), 10 ibid., p. 333; the AHFI Planning Associates, Inc. Case (1986), 11 ibid., p. 168; the Lockheed Corp. Case (1988), 18 ibid. p. 292; the Stanwick Corp. et al. Case (1990), 24 ibid. p. 102; the Combustion Engineering, et al. Case (1991) 26 ibid. at p. 60; the Edgar Protiva, et al. Case (1995), 31 ibid. at p. 106. Contra, apparently, the Ali Asghar Case (1990), ibid. p. 238. (1982), 1 ibid. p. 487, and (1982), 1 ibid. p. 493. (1986), 12 ibid. p. 94. (1988), 19 ibid. p. 62. (1989), 21 ibid. p. 31. See also the Electronic Systems International Inc. Case (1989), 22 ibid. p. 339; the Merrill Lynch and Co., et al. Case (1991), 27 ibid. p. 122; the Faith Lita Khosrowshahi, et al. Case (1994), 30 ibid. p. 76; the Mohsen Asgari Nazari Case (1994), 30 ibid. p. 123.

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sibility of the Iranian Government occurred prior to the relevant date. In a few cases, however, the tribunal found that the relevant acts occurred subsequent to the relevant date and, consequently, the claims were dismissed for lack of jurisdiction. In the International Technical Products Corp. et al. Case, the tribunal clearly explained that: A claim for taking is outstanding on the day of the taking of property, where the alleged expropriation is carried out by way of a series of interferences in the enjoyment of the property, the breach forming the cause of action is deemed to take place on the day when the interference has ripened into more or less irreversible deprivation of the property rather than on the beginning date of the events. The point at which interference ripens into a taking depends on the circumstances of the case and does not require that legal title has been transferred.19

In most cases, where breach or termination of contract prior to the relevant date was alleged as the basis of a claim, the claim was clearly outstanding on that date. Compétence, thus, existed. If the breach or termination could not be proved, the claim would then be dismissed on the merits. In several cases, the conduct of the parties led to the conclusion that they had continued to treat the contract as in force on the relevant date and had waived any claim for prior breach.20 It is to be noted that there were a few cases in which claims and counterclaims based upon standby letters of credit or guarantees were held to be outside the tribunal’s jurisdiction as not outstanding on 19 January 1981. In the Howard Needles Tammen and Bergendoff Case the tribunal held that a counterclaim based on an allegedly wrongful refusal by a bank to pay two standby letters of credit securing advance payments and good performance when they were called by an Iranian bank on 30 December 1981 was not an outstanding claim, as the wrong complained of occurred only subsequent to the relevant date.21 The Itel International Corp. Case22 involved both a claim seeking a declaration that a guarantee and counterguarantee securing contractual performance should first have been reduced and subsequently should be considered cancelled, as should a 31 December 1981 demand for payment

19

20

21

22

(1985), 9 ibid. at p. 238 (footnote omitted). See also the Foremost Tehran, Inc., et al. Case (1986), 10 ibid. at p. 250; the Hooshong Kahen Case (1988), 18 ibid. p. 289; the Norman Gabay, et al. Case (1991), 27 ibid. p. 40. See, e.g., the Bendix Corp., et al. Case (1988), 18 ibid. at pp. 371–2; the Combustion Engineering, et al. Case (1991), 26 ibid. p. 60; the Kaysons International Corp. Case, (1993), 29 ibid. p. 222. (1986), 11 ibid. p. 302. See also the Avco Corp. Case (1988), 19 ibid. p. 200; the Houston Contracting Co. Case (1988), 20 ibid. p. 3. (1990), 24 ibid. p. 272.

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of the counterguarantee, and a counterclaim seeking the full amount of the counterguarantee and damages for the allegedly wrongful refusal to honour a 31 December 1981 demand for payment of the counterguarantee. The tribunal had no difficulty in dismissing both requests relating to the 31 December 1981 demand as not outstanding. The claimant’s request for reduction and cancellation of the guarantees was found to be more difficult. The tribunal, however, found that the claim for reduction of the guaranteed amount to a residual amount as provided in the contract was outstanding as, under the contract, such a reduction should have been made prior to 19 January 1981, but that the claim for cancellation was not outstanding, as the contract was still in effect on that date and the residual amount secured claimant’s performance of its residual contractual obligations. In several cases, parties requested declaratory relief from the tribunal in the form of determinations that they were exempt from certain potential future liabilities. The tribunal rejected these requests on the ground that such claims were not outstanding on the relevant date and consequently were outside its jurisdiction.23 In several cases, the outstanding claims requirement of the CSD caused the dismissal of claims based upon payments owed by Iran which were not due until some time after the relevant date. In the Kimberly-Clark Corp. Case,24 for example, the tribunal held that it had no jurisdiction to award damages for unpaid royalties that were not due under a licence agreement until after 19 January 1981. While a respondent was in breach of the licence agreement as early as 1978, the tribunal noted that the claimant chose not to terminate the licence as it had a right to do, but rather chose to consider it as continuing in force. Consequently, the tribunal was of the view that it could not conclude that there had been an anticipatory breach of the licence agreement as a whole. But the tribunal did find that it had jurisdiction to award damages for only those royalties that were due prior to 19 January 1981. To the extent that the claim could be shown to have arisen after that date, the claim was outside the tribunal’s jurisdiction. In some of the cases, anticipatory breach was argued unsuccessfully, often failing because the evidence demonstrated that the parties had treated the contracts in practice as still continuing and

23

24

See the Computer Sciences Corp. Case (1986), 10 ibid. p. 269; the Ford Aerospace and Communications Corp. Case (1987), 14 ibid. p. 24; the Rockwell International Systems, Inc. Case (1989), 23 ibid. p. 150. (1983), 2 ibid. p. 334. See also, inter alia, the J.I. Case Co. Case (1983), 3 ibid. p. 62; the Gould Marketing, Inc. Case (1983), 3 ibid. p. 147; the Shering Corp. Case (1984), 5 ibid. p. 361; the Housing and Urban Services International, Inc. Case (1985), 9 ibid. p. 313; the McLaughlin Enterprises, Ltd. Case (1986), 12 ibid. p. 146; the Houston Contracting Co. Case (1988), 20 ibid. p. 3.

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had waived breaches or extended due dates in recognition of the difficulties presented by the Iranian Revolution. Thus, in several cases the outstanding claims provision in the CSD prevented the tribunal from awarding damages which were clearly warranted. On the other hand, in the Pepsico, Inc. Case (1), where the claimant on 20 April 1979 validly demanded acceleration of the maturity of promissory notes, the claim on the promissory notes was held to be within the tribunal’s jurisdiction.25 In the few cases where claims were made for damages that were incurred after the relevant date, the tribunal held that a claim for such damages was outstanding on that date only if the damage was caused by a breach of duty that occurred before that date,26 regardless of when such damages began to accrue or whether such damages continued beyond the relevant date.27 Claims Filed after 29 January 1982 The CSD also set a deadline for the filing of claims with the tribunal. Article III(4) provides: “No claim may be filed with the tribunal more than one year after the entry into force of this agreement or six months after the date the President is appointed, whichever is later.” Since the President was appointed on 4 June 1981, the last day on which claims could be filed was 19 January 1982. Thus, the tribunal must refuse to consider any claim deemed to have been received by the tribunal registry after that date. This was the position taken in refusal to accept the claim of Mr Victor E. Pereira,28 where a courier service failed to deposit a claim on time.29 However, there are exceptions to the otherwise rigid enforcement of this deadline for filing. Two examples may be considered. First, because of the tribunal’s practice of permitting a claimant to aggregate claims, the tribunal accepted a claim of United Technologies International which had in effect been filed after the deadline for filing claims.30 There, the claimant had previously filed a timely claim of over $250,000. The tribunal then permitted the new untimely claim to be accepted in the form of an amendment to the previously filed claim.

25 26 27

28 29

30

(1986), 13 ibid. p. 3. See the Behring International, Inc. Case, (1985), 8 ibid., p. 238 particularly at pp. 271–2. See the Aeronutronic Overseas Services, Inc. Case (1986), 11 ibid. pp. 223; the Uiterwyk Corp. et al. Case, (1988), 19 ibid. p. 107, particularly at pp. 125, 137–8. (1982), 21 ibid. p. 3. See also, e.g., Refusal to Accept the Claim of Mr. Moshe Bassin (1985), 9 ibid. p. 3; Refusal to Accept the Claim of Atiyeh Showrai (1982), 1 ibid. p. 226; Refusal to File the Claim of Robert J. Lee (1982), 21 ibid. p. 7; Refusal to Accept the Claim of Mr. Mohammed Sadegk Jahanger (1982), 1 ibid. p. 128. Refusal to File Claim of United Technologies International, Inc. (1982), 21 ibid. p. 5.

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Second, in Refusal Case No. 3,31 the tribunal found that the provisions relating to filing deadlines on the CSD did not apply to claims filed under a different instrument. In that case the Detroit Bank and Trust Company was allowed to file a claim on 20 January 1982, a day after the deadline, against Industrial Mining and Development Bank of Iran for $2 million in connection with 2,000 promissory notes. The reason was that while basing jurisdiction on Article II(1) of the CSD, which permits claims by nationals of the US against Iran, the claimant relied on Paragraph 2(B) of the Undertakings of the Government of the United States of America and the Government of the Islamic Republic of Iran. This clause provided a scheme for the settlement of disputes between US banking institutions and Bank Markazi.32 The tribunal examined the evidence and concluded that Detroit Bank had complied with the procedural requirements of Paragraph 2(B). On the filing deadlines, if any, for referring such disputes to the tribunal, the tribunal stated: Paragraph 2(B) of the Undertakings provides that neither of the parties can refer disputes to this Tribunal before the second thirty day period has elapsed, but the paragraph establishes no limit within which the appropriate United States banking institution or Bank Markazi must refer the dispute to an international arbitration panel or to this Tribunal. The language of Article III, paragraph 4, of the Claims Settlement Declaration does not specify that the deadline provided therein to file a “claim” also applies to a “dispute” covered by Paragraph 2(B) of the Undertakings. The separate procedural mechanism for such “disputes” provides certain time periods but no filing deadline. “Claims” covered by Article II of the Claims Settlement Declaration and “disputes” covered by Paragraph 2(B) of the Undertakings have different settlement and pre-filing requirements and different sources for the payment of awards. Thus, a difference in time limitations for filing such “claims” and filing such “disputes” is not inconsistent or illogical.33

Accordingly, the Full Tribunal concluded that the 19 January 1982 filing deadline of Article II(4) was not applicable to disputes under Paragraph 2(B) of the Undertakings.

31 32

33

Refusal to File Claim of Detroit Bank and Trust Company, (1983), 2 ibid. p. 312. The relevant part of Paragraph 2(B) provides: Bank Markazi and the appropriate United States banking institutions shall promptly meet in an effort to agree upon the amounts owing. In the event that within 30 days any U.S. banking institution and the Bank Markazi are unable to agree upon the amounts owed, either party may refer such dispute to binding arbitration by such international arbitration panel as parties may agree, or failing such agreement within 30 additional days after such reference, by the Iran-United States Claims Tribunal. See 1 ibid. pp. 13–14. Refusal to File Claim of Detroit Bank and Trust Company, (1983), 2 ibid. at p. 315.

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In addition to banking disputes under Paragraph 2(B) of the above-mentioned Undertakings, the deadline in Article III(4) of the CSD clearly does not apply to interpretative claims (“A” claims) filed pursuant to either of paragraphs 16 and 17 of the General Declaration34 or under Article VI of the CSD.35 The filing deadline in Article III(4) likewise does not apply to counterclaims, which by their nature cannot be filed until after the claims upon which they are based are filed.36 Compétence Ratione Personae Nationals of the US and Iran Article II(1) of the CSD limits the tribunal’s jurisdiction over private claims in terms of the claimant’s nationality: An international arbitral tribunal (the Iran-US Claims Tribunal) is hereby established for the purpose of deciding claims of nationals of the United States against Iran and claims of nationals of Iran against the United States, . . .

Next, the CSD in Article VII(1) defines a national as (a) a natural person who is a citizen of Iran or the United States; and (b) a corporation or other legal entity which is organized under the laws of Iran or the United States or any of its states or territories, the District of Columbia or the Commonwealth of Puerto Rico, if, collectively, natural persons who are citizens of such country hold, directly or indirectly, an interest in such corporation or entity equivalent to fifty per cent or more of its capital stock.

The nationality requirement related to competence of the tribunal and not merely to admissibility. The approach of the tribunal indicates this. Article VII(2) added a limiting requirement that there must be continuous nationality, specifically continuous ownership of a claim by nationals of the same State from the date the claim arose until the date of the Accords (19 January 1981). The tribunal has held that the nationality requirements related to claims. If a claim against Iran, for example, had been owned continuously by U.S. nationals from the time the claim arose until 19 January 1981, that claim would satisfy the nationality requirements for jurisdiction and could be brought to the tribunal during the period when claims could be filed 34 35 36

1 ibid. at pp. 7–8. 1 ibid. at p. 11. The Rules of the tribunal expressly provide that a counterclaim or claim for set-off permitted by the CSD may be presented in the statement of defence or, if the tribunal determines the delay is justified, at a later stage in the proceedings: Article 19(3), 2 ibid. at p. 424.

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(19 October 1981 to 19 January 1982) regardless of the nationality of the claimant who owned the claim at the time of filing. Thus, in the Gruen Associates, Inc. Case the tribunal held that the dissolution of thy claimant corporation in 1982 did not affect the nationality of the claim because the only relevant period for the purpose of jurisdiction was the period from the time the claim arose until 19 January 1981.37 What is more in the Petrolane, Inc. et al. Case38 the tribunal clarified that the nationality of the claim need be proved only from the date the claim arose, not from an earlier date when the contracts in question were concluded. The tribunal in general looks to the domestic law of the state whose nationality is claimed to determine whether the claimant has the nationality of that state. This approach is in keeping with general international law. In accordance with this approach where the required continuity of nationality of claims was not proved, it dismissed the claims for lack of jurisdiction. Thus, in the Alexander Lyons Lianosoff Case39 the tribunal held that claims against Iran arising in 1918, 1923, and 1953 of a person who was either an Iranian national or a stateless person and which were inherited in 1977 by a US national did not satisfy the continuous nationality requirement of Article VII(2) of the CSD. In the Burton Marks and Harry Umann Case the tribunal reached a similar conclusion with respect to claims against Iran that were owned when they arose by an Iranian national and were assigned in 1976 to the American claimants.40 The tribunal generally looks to domestic law also to determine the nationality of a legal entity. Article VII(1) of the CSD expressly directs the application of domestic law by restricting jurisdiction to legal entities organized under the laws of Iran or the United States. However, as the tribunal noted in the Housing and Urban Services International, Inc. Case, international law may also be considered where appropriate. The tribunal stated: the Tribunal is an international forum, established by a treaty that bars parties who are not nationals of either the United States or Iran from appearing before it. Thus, while the Tribunal may take municipal law as its “point of departure”, it must look as well to international law on this question.41

37

38 39 40

41

(1983), 3 ibid. p. 97. See also the Sedco, Inc., et al. Case (1985), 9 ibid. p. 248; the Phelps Dodge Corp. and Overseas Private Investment Corp. Case (1986), 10 ibid. p. 121. (1991), 27 ibid. p. 64. (1984), 5 ibid. p. 90. (1985), 8 ibid. p. 290. See also the Esahak Saboonchian Case (1991), 27 ibid. p. 248. In the strange case entitled the Gordon Williams Case (1984), 17 ibid. p. 269, there was fraud which led to the tribunal finding that the required nationality was present when it was not. (1985), 9 ibid. at p. 330 (footnotes omitted).

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The tribunal in that case, in answering the question of its jurisdiction over a claim against Iran brought by a US member of an Iranian partnership, based its decision in part on the Barcelona Traction Case.42 The relevant issue there was what law the ICJ should apply to the question of diplomatic protection of shareholders of a corporation. The tribunal concluded that the question addressed by the ICJ in the Barcelona Traction Case was analogous to the issue before it, and applied both domestic and international law in reaching its decision to accept jurisdiction over the claim before it. The tribunal found such references to international law justified by Article V of the CSD which states: The Tribunal shall decide all cases on the basis of respect for law, applying such choice of law rules and principles of commercial and international law as the Tribunal determines to be applicable, taking into account relevant usages of the trade, contract provisions and changed circumstances.

Thus, when determining the nationality of both natural persons and legal entities, the tribunal first looks to domestic law and, as necessary, supplements it with reference to international law. The tribunal has applied its personal jurisdictional parameters strictly. If a claimant fails to allege his or her nationality properly, the tribunal does not entertain the claim.43 The failure of a claimant to submit any proof of nationality likewise warrants dismissal of the claim. In general, where claims of individuals were concerned, the tribunal accepted birth certificates, naturalization certificates, and passports as evidence of nationality. Dismissals of such claims for failure to prove the nationality of the claim generally resulted from those documents showing that the requisite nationality had been acquired only subsequent to the date the claims in question arose, and in some cases even subsequent to 19 January 1981.44 The Full Tribunal has never laid down any firm requirements for the proof of corporate nationality. However, Chamber One did so early on. The great majority of corporate claimants complied with those requirements no matter in which chamber their claims were pending. Those requirements were stated in Orders issued in the Flexi-Van Leasing Case45 and the General Motors 42 43

44

45

1970 ICJ Reports at p. 3. See, e.g., the Refusal to File Claims of Abdol Hamid Jahani Case (1982), 1 Iran-US CTR p. 168 (affirming the decision of the Tribunal Registrar refusing to accept the statement of claim against Iran of a claimant, Abdol Hamid Jahani, who, by his own admission, was a resident alien in the US). See also, e.g., the Shahrem Mobasser Case (1986), 10 ibid. p. 177; the Kianoosh Jafar Case (1988), 18 ibid. p. 80; the Nasrollah Khosrowshah Case (1987), 17 ibid. p. 266. (1982), Order of 15 Dec. 1982, 1 ibid. at p. 462 and General Motors Corp. et al. Case, 3 ibid. p. 11.

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Corp. Case.46 The chamber recognized the fact that, with respect to large, publicly traded, corporations, it would impose excessive burdens on both the parties and the tribunal to require production of shareholder lists, or proof of nationality of individual shareholders. Then it laid down requirements intended to ensure that claims presented as claims of US corporations met the nationality requirements of the CSD. As there were hardly any claims brought to the tribunal by Iranian corporations, the tribunal drafted its order with US corporations in mind, and, where relevant, their subsidiaries of any nationality. The order in the Flexi-Van Case concluded as follows: For the reasons stated above and in the circumstances of this case, the chamber orders that the following evidence shall be submitted: 1. A certificate by a government official of the state of New York, issued after January 19, 1981, showing the date when Flexi-Van Corporation was incorporated and whether it was in existence on the date of the certificate. 2. A certificate by a government official of the State of Delaware, issued after January 19, 1981, showing the date when Flexi-Van Leasing, Inc. was incorporated and whether it was in existence on the date of the certificate. 3. A copy of the page, or pages, of the proxy statement previously issued by F1exi-Van Corporation in connection with its Annual Meeting closest to the earliest date on which a claim in this case arose, which shows (i) the date of the Annual Meeting, (ii) the number of shares of each class of capital stock entitled to vote at the meeting and (iii) information with respect to any beneficial owners of 5% or more of the corporation’s voting stock. These pages should be attached to a certificate by an officer of Flexi-Van Corporation, sworn to before a notary public, that they are true and complete copies of pages included in the proxy statement in the form filed with the SEC and mailed to stockholders. In the event the proxy statement contains no reference to any beneficial owners of 5% or more of the corporation’s voting stock, such certificate shall include a statement as to whether that is because there were no such owners. 4. The same material as described in Paragraph 3, but related to the proxy statement in connection with the Annual Meeting or Flexi-Van Corporation closest to January 19, 1981. 5. A certificate by the firm of certified public accountants which audited and gave its opinion concerning the financial statements of Flexi-Van Corporation for the fiscal year ended immediately prior to its Annual Meeting closest to the earliest date on which a claim in this case arose, stating (i) the number of voting shares of Flexi-Van Leasing, Inc. stock which were issued and outstanding at the end of such fiscal year and (ii) the number of and percentage of such shares owned by Flexi-Van Corporation on that date. 6. The same material as described in Paragraph 5, but related to the fiscal year immediately prior to the Annual Meeting of Flexi-Van Corporation closest to January 19, 1981.47

46 47

Order of 18 Jan. 1983, 3 ibid. p. 1. 1 ibid. at p. 462.

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The Order in the General Motors Corp. Case followed this precedent except that it added a requirement, namely, that there must be a signed and notarized statement by a corporate officer stating the percentage of voting stock which was held by stockholders of record with addresses in the US as shown on the stockholders list used in connection with the corporation’s Annual Meeting closest to 19 January 1981. Iran subsequently filed a request for a decision by the Full Tribunal on the criteria for the proper application of the provisions of Article VII of the CSD relating to corporate nationality.48 The Full Tribunal held that clearly there was no appeal possible from decisions of the chambers, that insofar as the request was for the Full Tribunal to lay down a uniform rule of evidence, it did not pose a question concerning the interpretation or application of the CSD which either State Party could submit pursuant to Article VI(4), and that it was neither appropriate nor feasible to establish, in abstracto, without reference to the situation in any particular case, a general rule concerning the extent of the examination as to jurisdiction that may be needed. Nevertheless, the Full Tribunal agreed to interpret the phrase “capital stock” in Article VII(1) of the CSD, as it considered that request to be covered by Article VI(4) of the CSD. It held that “capital stock” included both voting and non-voting stock, and stated: Depending on the circumstances of each individual case, the Chamber will have to decide whether it is sufficient to rely solely on evidence of the ownership or the voting stock as in Flexi-Van, or if further evidence is needed. For example, a Chamber might wish to examine evidence of holdings of non-voting stock in cases where it constituted so large a part of the total capitalization of a Claimant corporation that the nationality of the owners of such non-voting stock should be taken into account.49

Soon after the Flexi-Van and General Motors Orders were issued, a new issue was presented to Chamber One – how was the nationality of a non-stock and non-profit corporation to be established. The Chamber decided to have the issue taken up by the Full Tribunal by relinquishing jurisdiction for the limited purpose of deciding whether the claim was the claim of a national of the US within the meaning of Article VII of the CSD. The tribunal considered the matter and issued an Interlocutory Award50 which decided by a majority that the claim was that of a US national. The majority held that Article VII did not require that the “interest” held in such a corporation by US nationals be beneficial interests or personal financial interests that could be sold,

48 49 50

Islamic Republic of Iran v. United States of America (1986), 11 ibid. p. 271. Ibid. at p. 275. The International Schools Services, Inc. Case (1984), 5 ibid. p. 338.

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transferred, or inherited. The relevant law of the District of Columbia, under which the claimant corporation was organized, provided that the directors of the corporation shall have the control and management of the affairs and funds of the society, and the tribunal held that the rights and powers of such directors were equivalent to the rights and powers of the stockholders in a stock corporation. Consequently, if US nationals held 50 per cent or more of the seats on the Board of Directors, a claim of the corporation would be a claim of a national of the US. All directors of the claimant were US nationals. The tribunal noted that international tribunals routinely accepted jurisdiction over non-profit, non-stock institutions, and cited a number of decisions of the PCIJ and of the US Foreign Claims Settlement Commission.51 Whether nationals who possess both Iranian and US nationality may bring claims has been debated. Iran considers persons who are nationals of Iran but claim also to possess US nationality to be disqualified from bringing claims against Iran; the US has argued the contrary. In Case No. A18 the tribunal held that “it has jurisdiction over claims against Iran by dual Iran-United States nationals when the dominant and effective nationality of the claimant during the relevant period from the date the claims arose until 19 January 1981 was that of the United States.”52 The tribunal further held that the determination of a claimant’s dominant and effective nationality involves a consideration of “all relevant factors, including habitual residence, centre of interests, family ties, participation in public life and other evidence of attachment.”53 The same principles apply to claims against the US by Iranian nationals who also have US nationality.54 Subsequently, Chamber Three issued an interlocutory award in the Reza Said Malek Case55 which further clarified the factors relevant to the dominant and effective nationality determination. In addition to such factors mentioned in Case No. A18, as habitual residence, centre of interests, family ties, participation in public life and other evidence of attachment during the relevant period from the date the claim arose until 19 January 1981, that chamber expanded the scope of the inquiry to include “the entire life of the Claimant, from birth, and all the factors which, during this span of time, evidence the reality and the sincerity of the

51

52 53 54

55

For other useful cases decided by the tribunal involving proof of corporate nationality see inter alios, Aldrich, op. cit. note 1 pp. 50–4. (1984), 5 Iran-US CTR at p. 265. Ibid. at p. 265. Ibid. at p. 265. See also the Morteza Khatami Case (1994), 30 ibid. at p. 274, describing the ultimate aim of the dominant and effective nationality determination as to “determine whether, under the totality of the circumstances, the claimant had stronger allegiance and attachment during the relevant period to the United States or to Iran.” (1988), 19 ibid. p. 48.

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choice of national allegiance he claims to have made.”56 The above principles have been applied by the tribunal in numerous cases.57 The dominant and effective nationality test adopted in Case No. A18 for natural persons has been held to apply to juridical persons as well where the determination of nationality depends upon the nationality of individuals who themselves possess dual nationality. Article VII(1) of the CSD defines corporate nationality, in part, by reference to “natural persons who are citizens of such country hold[ing], directly or indirectly, an interest in such corporation or entity equivalent to fifty per cent or more of its capital stock”. This reference enables the dominant and effective nationality test to be incorporated, when fifty per cent or more of capital stock is held by dual nationals of the United States and Iran. Thus, in the H.B. Fox Geotechnical Consultants, Inc. Case the tribunal accepted the fact that the dominant and effective nationality test could apply to a corporation wholly owned by a dual national of the US and Iran.58 Where it appears, however, that both US nationals not also having Iranian nationality and dual nationals own stock in a corporation, the tribunal will inquire into dominant and effective nationality only if the non-dual nationals own less than 50 per cent of the shares. Thus, in the Shannon and Wilson, Inc. Case the tribunal stated: [Claimant] is a closely held corporation, in which the vast majority or the outstanding shares have been owned by United States nationals at all relevant times, as demonstrated by corporate records and the birth certificates and passports of sixteen shareholders. It is therefore unnecessary for the Tribunal to determine the dominant and effective nationality of Mr. M. Mike Alizadeh, who possesses both United States and Iranian nationality under the respective laws of these States. Mr. Alizadeh owned at the relevant period not more than 5.3 per cent of the shares of [the Claimant], and [the Claimant] has established the requisite degree of ownership by United States nationals excluding such shares.59

When the claimant has the nationality of the US (or Iran, as the case may be) and the nationality of another state than Iran (or than the US, as the case may be), the rule applied by the tribunal is that all that is needed is a bona fide link between the claimant and the US (or Iran, as the case may be).60

56 57

58 59 60

Ibid. at p. 51. For details of how the tests for the dominant and effective nationality have been applied, and the factors considered in the cases, see particularly, Brower and Brueschke, op. cit. note 1 pp. 33 ff. and Chapter 9 therein. Order of 4 December 1987, 18 Iran-US CTR p. 70. (1985), 9 ibid. at p. 400. See the Dallal Case (1983), 3 ibid. p. 10.

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The assignment of a claim, as in general international law, does not necessarily make it impossible for there to be continuous nationality. The requirement of continuous nationality was satisfied, if all owners of the claim had the relevant nationality (Iranian or US, as the case may be). The cases decided have accordingly taken the view (i) that, where the nationality link was broken as a result of the assignment of the claim, the tribunal had no jurisdiction;61 (ii) or that, where that link was not broken, it did have jurisdiction,62 or (iii) that, where initially the claim did not belong to a person with the relevant nationality, though this was acquired by the assignment, the tribunal did not have jurisdiction.63 Indirect claims, whether through beneficial ownership or indirect ownership, may also have posed a problem, on account of the lack of clarity in the general international law applicable. Particularly, it was a fact that some US nationals who had claims against Iran owned their claims indirectly, in the sense that they owned non-American corporations that, in turn, owned property allegedly expropriated by Iran or had contractual claims against Iran. To avoid misunderstanding the issue was addressed expressly in the Declarations. Article VII(2) of the CSD which defined the “claims of nationals” over which the tribunal had jurisdiction states that they included claims (i) which are owned indirectly by such nationals through ownership of capital stock or other proprietary interests in juridical persons, (ii) provided that the ownership interests of such nationals, collectively, were sufficient at the time the claim arose to control the corporation or other entity, and (iii) provided, further, that the corporation or other entity is not itself entitled to bring a claim under the terms of the CSD. This provision was applied by the tribunal in deciding several cases involving individual owners of foreign corporations and corporate owners

61

62

63

See the Harrington and Associates, Inc. Case (1987), 16 ibid. p. 297; the International Systems and Control Corporation Case (1986), 12 ibid. p. 239. See the Phelps Dodge Corp. Case (1986), 10 ibid. p. 121; the Sola Tiles, Inc. Case (1987), 14 ibid. p. 223. See the Jonathan Ainsworth Case (1988), 18 ibid. p. 92, the Zamen Azar Nourafehan Case (1993), 29 ibid. p. 295; the Alexander Lyons Lianosoff Case (1984), 5 ibid. p. 90. For other cases on assignment (and subrogation) see, e.g., the DIC of Delaware, et. al Case (1985), 8 ibid. p. 144; the Walter W. Arensberg, et al. Case (1986), 10 ibid. p. 37; the Richard D. Harza Case (1986), 11 ibid. p. 76; the General Electric Co. Case (1991), 26 ibid. p. 148; the First Travel Corp. Case (1988), 9 ibid. p. 360; the Component Builders, Inc., et al. Case (1989), 23 ibid. p. 3; the Foremost Tehran, Inc. et al. Case (1986), 10 ibid. p. 228; the Otis Elevator Co. Case (1987), 14 ibid. p. 283. See also Aldrich, op. cit. note 1 pp. 124–8, for discussion of the cases.

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of foreign subsidiaries.64 Locus standi for claimants was found to exist, and the tribunal exercised compétence ratione personae where ownership went through several tiers of foreign subsidiaries.65 In several cases issues arose which required that the tribunal interpret the CSD in order to define more precisely its jurisdiction over indirect claims. Thus, the tribunal in the Sedco, Inc., et al. Case66 interpreted the continuity of nationality requirement as requiring such controlling ownership at all times from the time the claim arose until the date the Algiers Declarations were concluded, even though the article of the CSD referred only to the time at which the claim arose. The tribunal also held in that case that claims owned indirectly by US nationals through ownership interests in Iranian juridical entities were within its jurisdiction in the same way as those involving juridical entities of third countries were.67 The tribunal has also ruled in the Seaco, Inc. Case that it was not necessary that the claimants themselves owned a controlling interest in the foreign juridical entity provided that all US national owners collectively owned such an interest.68 In this case, the claimant corporation proved (a) that the corporation was owned more than 50 per cent by US nationals, (b) that it owned directly only a few per cent of the stock of a Bermuda corporation through which it was claiming, and (c) that, except for those few per cent, the stock of the Bermuda corporation was paired with the stock of the claimant so that the owners of one corporation were inevitably also the owners of the other corporation.69 In most cases control was proved through proof of ownership by US nationals of more than 50 per cent of the foreign corporation. Nevertheless, the tribunal has not held that control could not be proved, if the US shareholdings were less than 50 per cent, but in no case has it found that proof of control in such circumstances was made. In the Management of Alcan

64

65 66 67

68 69

See, e.g., the R.N. Pomeroy, et al. Case (1983), 2 Iran-US CTR p. 372; the American International Group, Inc. et al. Case (1983), 4 ibid. p. 95; the Dames and Moore Case (1983), 4 ibid. p. 212; the Sedco, Inc., et al. Case (1985), 9 ibid. p. 248; the William J. Levitt Case (1987), 14 ibid. p. 191; the Reliance Group, Inc. Case (1987), 16 ibid. p. 257; the Combustion Engineering Case (1991), 26 ibid. p. 60; the Schlegel Corporation Case (1987), 14 ibid. p. 176; the CBS Incorporated Case (1990), 25 ibid. p. 131; the Howard Needles Tammen and Bergendoff Case (1986), 11 ibid. p. 302. The Uiterwyk Corp., et al. Case (1988), 19 ibid. at p. 118. (1985), 9 ibid. p. 248. Ibid. at pp. 258–64. See also, e.g., the William Bikoff, et al. Case (1984), 7 ibid. p. 1; the Computer Sciences Corp. Case (1986), 10 ibid. p. 269; the Ian L. McHarg, et al. Case (1986), 13 ibid. p. 286; the George Edwards Case (1989), 23 ibid. p. 290. (1986), 11 ibid. p. 210. Ibid. at p. 214. See also the George W. Drucker, Jr. Case (1988), 19 ibid. p. 257.

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Aluminium Ltd et al. Case the tribunal found that no proof was offered of such control.70 In the Bikoff, et al. Case71 the tribunal concluded that the US claimants, who owned not more than one-third of the shares of an Iranian corporation, had relied primarily upon several powers of attorney and a resolution of the Board of Directors in their efforts to prove control, and found that those documents were not irrevocable and did not transfer voting control. The tribunal characterized as also significant the evidence showing that the claimants did not in fact control the operations of the company. The tribunal has also indicated that, where US nationals owned not a single share of the foreign corporation, evidence of de facto control would not satisfy the controlling ownership interests requirements of Article VII of the CSD.72 In the Mohsen Asgari Nazari Case the tribunal held that it did not have jurisdiction over an indirect claim brought by an owner of 33.75 per cent of the stock of a company in which a non-American owned more than 50 per cent of the stock.73 The tribunal held in several cases decided that the controlling ownership interests requirement of Article VII of the CSD could be satisfied by beneficial ownership, as well as by record ownership.74 In this connection the tribunal has also held in several cases that it was the beneficial owner of a claim who had standing to present the claim – that is the person entitled to the proceeds – rather than an owner of record who had no direct economic interest.75 For example, in the James M. Saghi, et al. Case the tribunal explained: 24. The Tribunal’s concern for beneficial interests flows naturally from the terms of the Algiers Accords, in particular, General Principle B which states the purpose of both Parties ‘to terminate all litigation as between the government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration.’ Articles II, paragraph 1, and VII, paragraphs 1 and 2, of the CSD give the Tribunal jurisdiction over claims arising out of debts, contracts, expropriations or other measures affecting property rights and define the terms ‘national’ and ‘claims or nationals’ by reference to persons who hold ‘ownership interests’, whether directly or

70 71 72 73

74

75

(1983), 2 ibid. p. 294. (1984), 7 ibid. p. 1. (1986), 11 ibid. at p. 214. (1994), 30 ibid. at pp. 150–1. For a critical account and evaluation of the tribunal’s decisions on indirect claims see Brower and Brueschke, op. cit. note 1 pp. 106–11. See, e.g., the International Technical Products Corp. et al. Case (1985), 9 ibid. p. 206; the Minnesota Mining and Manufacturing Co. Case (1987), 17 ibid. p. 294. For details on beneficial ownership see Brower and Brueschke, op. cit. note 1. See, e.g., the International Technical Products Corp. et al. Case (1985), 9 Iran-US CTR p. 206; the Foremost Tehran, Inc., et al. Case (1986), 10 ibid. p. 228; the Benjamin R. Isaiah Case (1983), 2 ibid. p. 232; the James M. Saghi, et al. Case (1993), 29 ibid. p. 20.

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indirectly. The evident purpose of these claims settlement arrangements could not be fully implemented unless the Tribunal’s jurisdiction were broad enough to permit the beneficial owners of affected property interests to present their claims and have them decided on their merits by the Tribunal. 25. The Respondent has argued that Article 40 of the Commercial Code of Iran bars the alleged beneficial ownership. However, the issue here is not the validity vel non under Iranian law or beneficial ownership interests vis-à-vis the company or third parties. Rather, it is whether the government of Iran is responsible, under international law, to beneficial owners for ‘expropriations and other measures affecting property rights.’ 26. The Tribunal’s awards have recognized that beneficial ownership is both a method of exercising control over property and a compensable property interest in its own right. This is consistent with the rule requiring continuity of nationality of State claims under public international law. That rule requires that a claim must have been continuously owned by a person (or series of persons) having the nationality of the State that presents the claim. Brownlie, Principles of Public International Law 480–81 (4th ed. 1990). In applying that rule, it is the nationality of the beneficial owner of the claim, rather than that of the nominal owner, that determines the nationality of the claim. As the United States Foreign Claims Settlement. Commission put it in Claim of American Security & Trust Co., the national character of a claim must be tested by the nationality of the individual holding a beneficial interest therein rather than by the nationality of the nominal or record holder of the claim. 26 I.L.R. 322, 322 (1958, II). The Tribunal concludes that the Claimants are entitled to claim compensation for the deprivation of their beneficial ownership interests in N.P.I. and Novin.76

The Respondent The tribunal also faced in connection with establishing its competence the task of interpreting and applying a jurisdictional provision of the governing instruments which required that the respondent be one of the two governments involved, namely the USA or Iran, and defined references to the two governments as meaning the government, any political subdivision, and any agency, instrumentality, or entity controlled by the government or any political subdivision (Article VII(3) and (4)). In response to a request by Iran the tribunal first held in Cases Nos. A1 and A2, The Islamic Republic of Iran v. The United States,77 that the tribunal had no jurisdiction over claims by Iran against US nationals as such. The tribunal said that the General Declaration did not confer jurisdiction independently of the CSD, which was clear and limiting.

76 77

Ibid. at pp. 27 ff. (footnote omitted). (1982), 1 ibid. p. 101. On the tribunal’s jurisdiction in this respect see also Avanessian, The Iran-US Claims Tribunal in Action (1993) passim; Brower and Brueschke, op. cit. note 1 pp. 88 ff.

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Subsequent to the decision in that case the question that came up from time to time with respect to the tribunal’s jurisdiction over respondents was whether they were “controlled” by the government. While most cases involved control by the executive institutions of the Iranian government, the tribunal decided that control by the legislative or judicial branches of the government also constituted control by the government.78 In establishing control the tribunal referred, first, to Iranian laws. In the Gruen Associates, Inc. Case79 the tribunal found the Iran Housing Company to be within the definition of “Iran”. The clinching evidence was the text of a law which provided, in Article 7, that the company was removed from the Ministry of Health and shall be “administered under the supervision of the Social Security Organization”. Secondly, the tribunal relied on ownership of the entity. In the Ultrasystems Inc. Case80 the tribunal held that Information Systems Iran (Isiran) was controlled by the Government of Iran on the basis of admissions by Isiran that 100 per cent of its capital stock was owned by the government through its ownership of Iran Electronics Industries Corp. In the Economy Forms Corp. Case the tribunal disposed of the argument that an entity owned indirectly by the government through another entity was not controlled by the government, stating that “no distinction is made in Article VII, paragraph 3, between direct and indirect control by the Government”, and concluding that “the separate juridical status of an entity two or more levels removed from the Government itself is not a sufficient basis from which to conclude that the entity conducts its operations free of the control of the Government.”81 In the Blount Brothers Corp. Case,82 the tribunal accepted evidence of ownership that the stock of a respondent company had been nationalized in 1979 and a director had peen appointed by the Government of Iran. In the Time, Inc. Case83 it was held that ownership of the stock of an Iranian company by an Iranian bank that was nationalized was sufficient to establish control of the company by the government. In the Henry F. Teichmann, Inc., et al. Case84 the tribunal found the respondent a controlled entity on the basis of evidence that a government-owned bank owned 62 per cent of the respondent’s shares and appointed the chairman of its Board of Directors.

78 79 80 81 82 83 84

The Alfred Haber, P.A. Case (1989), 23 Iran-US CTR p. 133. (1983), 3 ibid. p. 97. (1983), 2 ibid. p. 100. (1983), 3 ibid. p. 47. (1983), 3 ibid. p. 225. See also the Opal H. Sether Case (1988), 18 ibid. p. 275. (1984), 7 ibid. p. 8. See also the Foremost Tehran Inc., et al. Case (1986), 10 ibid. p. 228. (1986), 13 ibid. p. 124.

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Thirdly, the tribunal has consistently held that an entity was controlled by the Government of Iran whenever it was established that the entity was managed, administered, or supervised by persons appointed by the government or by another controlled entity. In the RayGo Wagner Equipment Co. Case85 there was conflicting evidence, which the tribunal did not resolve, as to whether the Star Line, being the respondent, had been nationalized. The tribunal based its finding of control on evidence that, since the Islamic Revolution, Star Line had been administered by persons appointed by some public authority and not by its registered Manager and Board of Directors. The tribunal stated that this established prima facie evidence of government control which was not sufficiently rebutted by the assertion that no formal changes have been officially registered in Iran with regard to the company. Thereafter the tribunal has held that, where the government had appointed managers in charge of day-to-day operations, the entities were “controlled” by the government, even though they had not been nationalized or expropriated.86 The tribunal has also on occasion cited the nature of the activity performed by a respondent as evidence that it was controlled by the government, but in all such cases there was also other evidence to support the conclusions reached. For example, in the RayGo Wagner Equipment Co. Case87 the tribunal supported its conclusion that the respondent was a controlled entity by noting that Article 44 of the Constitution of the Islamic Republic of Iran provides that the state sector of the economy is to include, inter alia, the shipping industry. In the FMC Corp. Case88 the tribunal held that the Social Services Organization was a controlled entity. The respondents argued that it was a non-profit organization, not a state organization. In addition to evidence that the entity had been dissolved by a formal legislative enactment in 1982 and that government liquidators had been appointed, the tribunal pointed to evidence that the government had removed all health and medical facilities from the entity in 1979 and placed them under the Ministry of Health and Well Being. Moreover, assertions made previously by the entity have been used by the tribunal in deciding whether it was government controlled. In the second RayGo Wagner Award,89 the tribunal referred to the evidence that, in a lawsuit in the USA between the same parties, the respondent argued that it

85 86

87 88 89

(1982), 1 ibid. p. 41l. See, e.g., the Rexnord, Inc. Case (1983), 2 ibid. p. 6, the DIC of Delaware, Inc., et al. Case (1985), 8 ibid. p. 144, the Petrolane, Inc. Case (1991), 27 ibid. p. 64. (1983), 2 ibid. p. 141. (1987), 14 ibid. p. 111. See also the ITEL International Corp. Case (1990), 24 ibid. p. 272. (1983), 2 ibid. p. 141. See also the Whittaker Corp. Case (1987), 14 ibid. p. 263, the Uiterwyk Corp. et al. Case (1988), 19 ibid. p. 107, the Phibro Corp. Case (1991), 26 ibid. p. 15.

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was a sovereign entity immune from the jurisdiction of US courts. The tribunal considered this evidence supportive of its conclusion, reached on other grounds, that the respondent was controlled by the Iranian government. In several cases the question arose whether the fact that an Iranian respondent had previously been a respondent in another case that was settled by the issuance of an Award on Agreed Terms was dispositive of the question whether it was an entity controlled by the Iranian government. In the A1 Decision, The Islamic Republic of Iran v. The United States of America the Full Tribunal, recognizing that it had only such jurisdiction as was provided in the Algiers Accords, stated its intentions with respect to Awards on Agreed Terms somewhat ambiguously: Therefore, if requested to make an award on agreed terms, the Tribunal will make such examination concerning its jurisdiction as it deems necessary. However, the Tribunal holds that it would be neither appropriate nor feasible to establish, in abstracto, without reference to the situation in any particular case, a general rule concerning the extent of the examination as to jurisdiction that may be needed.90

While the mere fact that a respondent had been a respondent in a case settled by an Award on Agreed Terms did not necessarily mean that the tribunal had considered whether it was, in fact, a “controlled” entity, yet it cited such Awards on Agreed Terms as supporting evidence in the Whittaker Case and Uiterwyk Case.91 Decisions by the tribunal holding a respondent not controlled by the government are relatively few. In two cases involving coooperative societies of employees, the tribunal found no evidence that the societies were controlled by the governmental organization whose employees they served or that they were acting as agents for those organizations.92 A far more difficult question concerning a different sort of cooperative society arose in the Arthur J. Fritz Case.93 There the cooperative society was that of construction companies, rather than of employees, and according to the evidence from July 1979 until September 1981 a Revolutionary Prosecutor controlled the disposition of the assets of the society. Apparently his involvement resulted from the failure of the society to pay debts owed to nationalized Iranian banks and the evidence showed that nearly all the inventory of the society was sold under his direction. Nevertheless, the tribunal held that the claimant had failed to prove

90 91 92

93

Decision No. 8-Al-FT (1982), 1 ibid. at p. 152. See note 89 above. See the American Housing International, Inc. Case (1984), 5 ibid. p. 235, the Middle East Management and Construction Corp. Case (1985), 9 ibid. p. 340. (1989), 22 ibid. p. 170.

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that the society was controlled by the government on the relevant date and the tribunal stressed that the evidence showed that the society’s Board of Directors continued to function and that, while the extent of the Prosecutor’s authority remained unclear, no evidence had been presented of any action not directly related to the attachment and the sale. In several cases, the claimant submitted essentially no evidence that a respondent was a “controlled” entity. The tribunal held against the claimant in these cases on jurisdiction ratione personae.94 In the William Ray Hollyfield Case95 the tribunal held that a claim against the General Systems Company (GSC) was not a claim against the Iranian government. The tribunal pointed out that GSC worked on a sensitive military project in Iran and that the control exercised over its activities by the Iranian military did not go beyond that which one could expect for such a project. In several tribunal decisions the tribunal refused to reverse earlier decisions by the Co-Registrars of the tribunal refusing to file claims by Iranian claimants against American companies.96 The tribunal has also held unequivocally that it has no jurisdiction to decide cases brought against US or Iranian nationals as such: i.e., nationals of either state, as such cannot be respondents.97 In all these cases the tribunal established the limits of its jurisdiction ratione personae under the governing instruments by interpreting them. Special Classes of Claims There are some classes of claims brought before the tribunal which are not expected to meet the requirements relating to claimants and respondents discussed in sub-sections (i) and (ii) above in order that the tribunal may assume jurisdiction. In the case of counterclaims the government is the claimant and the national becomes the respondent. The roles are reversed. The CSD in article II(1) specifically provides for jurisdiction of the tribunal over a counterclaim as long as it “arises out of the same contract, transaction or occurrence that constitutes the subject matter of the national’s claim.” Pursuant to this provision a large number of counterclaims have been filed in a variety of cases.

94

95 96 97

See, e.g., the Shannon and Wilson, Inc. Case (1985), 9 ibid. p. 397, the American Farm Products International, Inc. Case (1988), 18 ibid. p. 175, the Emanuel Too Case (1989), 23 ibid. p. 378. (1989), 23 ibid. p. 276. See, e.g., Decision No. DEC 67-REF 35-2 (22 Dec. 1988), 17 ibid. p. 331. See Case No. A/2 (Iran v. United States) (1982), 1 ibid. p. 101.

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The subject-matter jurisdiction on the case of counterclaims is discussed later in this chapter. Article VI(4) of the CSD provides that “any question concerning the interpretation or application of this agreement shall be decided by the tribunal upon the request of either Iran or the United States.” Similarly, paragraphs 16 and 17 of the General Declaration, and Article II(3) of the CSD provide that any dispute arising between the parties as to the “interpretation or performance” of any provision of the General Declaration is within the jurisdiction of the tribunal. In the first interpretative decision given by the Full Tribunal, Case No. A2 (Iran v. United States, Case No. A/2), the tribunal reviewed a request to interpret both the General Declaration and the CSD. It stated clearly that it “has not only the power but the duty to give an interpretation” on points raised by either state party under either declaration.98 Presidential Order No. 1 determined that interpretative disputes, known as “A” claims, would be decided by the Full Tribunal.99 Unlike private and intergovernmental disputes arising between the parties, interpretative disputes are not subject to the 19 January 1982 filing deadline of Article III(4) of the CSD nor do they have to have been “outstanding” as of 19 January 1981 as required by Article II(1) of the CSD. For example, the US filed Case No. A29 on 21 July 1994, more than a decade after the effective date of the Accords, concerning a dispute that had arisen only a few months before, and Iran filed Case No. A30 on 12 August 1996 involving, inter alia, US legislation adopted that year. The requirement that “A” claims must involve disputes “as to the interpretation or performance of any provision of the General Declaration or “questions concerning the interpretation or application” of the CSD, has been strictly applied. For example, an “A” claim cannot be used as a pretext to circumvent the final and binding nature of awards by, in effect, appealing a Chamber decision or award to the Full Tribunal.100 When a genuine question regarding the interpretation or application of the Algiers Accords is raised, the fact that the issue has been decided previously by an individual chamber will not, in itself, prevent the Full Tribunal from taking up the issue. Thus, the question of the tribunal’s jurisdiction over private claims filed by claimants having both Iranian and United States

98

99 100

(1982) 1 ibid. at p. 102. See also the Islamic Republic of Iran v. The United States of America (1987), 14 ibid. at pp. 327–8; the Islamic Republic of Iran v. The United States of America (1987), 16 ibid. at p. 289. (19 Oct. 1981), 1 ibid. p. 95. Iran attempted to do this in Case No. A20 (Islamic Republic of Iran v. United States of America) (1986), 11 ibid. p. 271, and in Case No. A25 (Islamic Republic of Iran v. United States of America), Order of 16 January 1990, 21 ibid. p. 302.

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nationality, on which Chamber Two had pronounced itself in two final awards, exercising jurisdiction over such claims, the Full Tribunal agreed to decide a request by the Government of Iran for a ruling.101 But, as the Full Tribunal noted in the case before deciding the issue, its decision to be given could not affect the two Chamber Two awards, which would stand as final and binding awards irrespective of the Full Tribunal’s decision.102 Certain claims brought by a government against the other government termed (“B” claims) are permitted under Article II(2) of the CSD which states: “The Tribunal shall also have jurisdiction over official claims of the United States and Iran against each other arising out of contractual arrangements between them for the purchase and sale of goods and services.” “The United States” and “Iran”, as used in this section, are defined the same as in the case of private claims. Thus, the terms include the government, any political subdivision, and any agency, instrumentality or entity controlled by the government or any political subdivision thereof.103 Standing The problem of the standing of a party was addressed early by the tribunal in the Tippets, Abbett, McCarthy, Stratton Case, where the tribunal held that, “to the extent that TAMS-AFFA purports to present a counterclaim for taxes and social security premiums allegedly owed separately by TAMS to the Iranian authorities, it lacks standing to assert such a counterclaim.”104 It is to be assumed that the tribunal was of the view that such a counterclaim – if otherwise within its jurisdiction – would have to be asserted by the Iranian tax authorities, and not by the respondent in the case, TAMS-AFFA Consulting Engineers. The tribunal regularly upheld the standing of partners, whether involved in joint ventures, consortia, or true partnerships, to claim for their own interests whenever those interests were distinguishable and separable from those of the other partners.105 The question of partners in a partnership was addressed directly in the Housing and Urban Services International, Inc. Case. There the tribunal found that the claimant (“HAUS”) and a German company formed a partnership under the Iranian civil code, but held nonetheless that HAUS

101 102

103 104 105

Case No. 18 (Islamic Republic of Iran v. United States of America) (1984), 5 ibid. p. 251. Ibid. at p. 252. On jurisdiction in “A” claims see also Case No. A28 (United States of America v. Islamic Republic of Iran) (2000), 36 ibid. at pp. 19 ff. CSD, Article II(3) and (4). (1984), 6 ibid. at p. 223. See, e.g., the Chas. T. Main International, Inc. Case (1983), 3 ibid. p. 156; the MorrisonKnudsen Pacific Ltd. Case (1984), 7 ibid. p. 54; the Dadras International, et al. Case (1995), 31 ibid. p. 127.

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could recover its proportionate share (85 per cent) of the funds due to the partnership from the respondents.106 The tribunal noted that it was unclear whether, under Iranian law, HAUS could sue for its share, stating: Nevertheless, the tribunal is an international forum, established by a treaty that bars parties who are not nationals of either the United States or Iran from appearing before it. Thus, while the tribunal may take municipal law as its ‘point of departure’, it must look as well to international law on this question. While international law seems to accept that as a rule a partner may not sue in his own name alone on a cause of action accruing to the partnership, where special reasons or circumstances required it, ‘international tribunals have had little difficulty in disaggregating the interests of partners and in permitting’ partners to recover their pro rata share of partnership claims. The most relevant ‘special circumstance’ in this sense exists when a partner’s claim is for its own interest, which is independent and readily distinguishable from a claim of the partnership as such.107

The tribunal then reviewed several decisions of other international tribunals, and concluded: Applying these tests to this case, the tribunal notes that HAUS’ right to the payments it alleges are due from TRC is readily identifiable, and separable from that of its partner. HAUS’ right is thus individual to it. There is no danger of double recovery or of injuring the rights of Meaplan, the absent partner, since it is free to sue elsewhere for its 15% interest in the allegedly unpaid amounts. The tribunal further notes that the reason most often cited for the severability of a partner’s personal claims – that he would otherwise be prevented from claiming before an international forum because of a foreign partner’s disability – applies in the context of the nationality requirements of the Claims Settlement Declaration. Thus, the tribunal finds that international law, in the particular circumstances of this case permits HAUS to bring a claim for its interest in the outstanding payments.108

In the Faith Lita Khosrowshahi, et al. Case109 the tribunal did not accept the respondent’s argument that Mrs. Khosrowshahi lacked the capacity to file a claim on behalf of one son who was a minor in 1981 when the claim was filed. The tribunal was of the view that neither the CSD nor the tribunal Rules excluded minors as claimants and noted that the son, who was an

106

107 108

109

(1985), 9 ibid. p. 313. See also the Mobil Oil Iran, Inc. et al. Case (1987), 16 ibid. p. 3 (individual members of the ‘second party’ to an agreement); the Phillips Petroleum Co. Iran Case (1989), 21 ibid. p. 79 (one member of the ‘second party’ to an agreement); the United Painting Co., Inc. Case (1989), 23 ibid. p. 351. (1985), 9 ibid. at p. 330 (footnotes omitted). Ibid. at p. 332. See also on partners, the Dadras International, et al. Case (1995), 31 ibid. p. 127. (1994), 30 ibid. p. 76.

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adult by the time of the hearing, was present and demonstrated his support, as did his father. In the Edgar Protiva, et al. Case110 the tribunal held that the claimants (two brothers) had standing to present their claims as two of the four persons entitled to inherit real property. Their claim was for the taking of the real property prior to the conclusion of the inheritance procedures. In the Catherine Etezadi Case111 the tribunal held that a wife had no standing to make a claim based on her beneficial interest in her husband’s Iranian civil service pension. The claimant alleged that her rights flowed from the law of the marital domicile (the State of California) and from a marital agreement. The tribunal found that, under Iranian law, the right to the pension belonged solely to the retiree husband, who was not a claimant before the tribunal. It explained: Consequently, when the statutory rights of the retiree have been terminated through the application of a special law, those rights which derive from his status also follow the fate of the original rights, and thus the Claimant’s independent pension rights have not been established in this Case. The Tribunal further underlines in this context that according to the general principles of international law the creation and application of a municipal pension system belongs to the sovereign rights of the State concerned and cannot be affected by private contracts between a retiree and members of his family or by legislation in another State. Therefore, the Claimant’s claim is dismissed.112

Compétence Ratione Materiae Article II(1) of the Claims Settlement Declaration The CSD limits claims of nationals of one state party against the other state party in terms of subject-matter, only to those which “arise out of debts, contracts (including transactions which are the subject of letters of credit or bank guarantees), expropriations or other measures affecting property rights.” This statement, particularly the phrase “other measures affecting property rights”, has required interpretation by the tribunal. First, the question has arisen whether quasi-contractual claims based on quantum meruit and unjust enrichment arise out of debts, contracts or other measures affecting property rights. The tribunal has held such claims to be within its jurisdiction, and has awarded compensation for the actions of Iran or its controlled entities when, because no other grounds for recovery were available, not to award compensation to the claimant would enrich

110 111 112

(1995), 31 ibid. p. 89. (1994), 30 ibid. p. 22. Ibid. at p. 43.

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the respondent unjustly. For example, early on in the Sea-Land Service, Inc. Case, the tribunal stated that the rule against unjust enrichment was inherently flexible and based on justice and equity. Thus, it was made necessary to take into account all the circumstances of each specific situation, because the underlying rationale of the rule was to establish a balance between two individuals, one of whom has enriched himself, with no cause, at the other’s expense.113 The tribunal has without difficulty or too much discussion exercised jurisdiction over claims of unjust enrichment. The main controversy has been about how the principle is to be applied.114 The tribunal also has been faced with the task of interpreting the phrase “other measures affecting property rights” as it related to tortious acts. In the Lillian Byrdine Grimm Case115 the claimant brought a claim based on injuries that she had suffered as a result of the alleged failure of the Government of Iran to protect her husband, an oil company executive, who had been assassinated in December 1978 in Iran. The claimant’s argument was that the tribunal had jurisdiction over her claim because the alleged failure to provide protection for her husband was a measure “affecting property rights” of the claimant. In dealing with this claim the tribunal applied the principle of eiusdem generis to the phrase “other measures”, concluding that it must be interpreted in the context of “debts and contracts”, and therefore must be construed as generically similar to “expropriations”. It stated: It would perhaps be possible to accept that the words “other measures” may cover both acts and failures to act and that for Mrs. Grimm “property rights” have arisen or are involved in this case. However, to hold in the context of Article II, paragraph 1, that such “property rights” were affected by the alleged failure to protect Mr. Grimm is far from the natural understanding of the circumstances that this failure just affected the life and safety of Mr. Grimm. Furthermore, compensation for mental anguish, grief and suffering can obviously not be a property right that was affected by the alleged failure to provide adequate protection of Mr. Grimm. The right to such compensation, if any, arose out of the assassination; it did not even exist prior to the assassination and could not be affected by the failure to provide protection.116

113

114

115 116

6 ibid. at pp. 168–9 (quoting Jiménez de Aréchaga, “International Law in the Past Third of Century”, 159 Hague Recueil at p. 300, and Francioni, “Compensation for nationalisation of foreign property: the borderland between law and equity”, 24 ICLQ (1975) at p. 273. See generally such other cases as the Alfred Haber, P.A. Case (1989), 23 Iran-US CTR p. 133; the Schebegal Corporation Case (1987), 14 ibid. p. 176; the Benjamin R. Isaiah Case (1983), 2 ibid. 232; the Phibro Corporation Case (1991), 26 ibid. p. 15. (1983), 2 ibid. p. 78. Ibid. at p. 79 (emphasis in original).

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Thus, the tribunal has taken the view that claims for moral injury, mental anguish, grief, suffering and personal injury clearly fall outside the tribunal’s jurisdiction.117 Subsequently in the Kenneth P. Yeager Case,118 the tribunal rejected Iran’s contention that all torts fall outside the scope of Article II(1) of the CSD, holding that the term “measures” as used in that provision was not limited to contractual relationships and included “ ‘torts’, if, and that is the relevant jurisdictional criterion, it affects property rights in a similar way as an expropriation.”119 In applying this criterion to a claim for wrongful expulsion, the tribunal concluded that expulsion is a measure by nature directed against the Claimant himself. Yet, it may, at the same time, directly affect his property or property rights.120

Accordingly, the tribunal came to the conclusion that the provision included claims arising out of a wrongful expulsion, if, and to the extent that, it affected a claimant’s property rights.121 Article II(1) of the CSD also specifically excludes from the tribunal’s jurisdiction private claims “arising under a binding contract between the parties specifically providing that any disputes thereunder shall be within the sole jurisdiction of the competent Iranian courts, in response to the Majlis position.” The tribunal was faced with the issue of how to deal with the various forum selection clauses contained in the contracts upon which numerous claims filed with the tribunal were based. To resolve the differing interpretations of the two governments of this portion of Article II(1), the Full Tribunal selected for decision nine cases presenting 17 representative forum selection clause formulations. On 5 November 1982 the Full Tribunal issued a series of nine Interlocutory Awards providing comprehensive guidance on this difficult jurisdictional issue.122

117

118 119 120 121

122

See, e.g., the Futura Trading Incorporated Case (1986), 13 ibid. p. 99; the Jack Rankin Case (1987), 17 ibid. p. 135; the International Systems & Controls Corporation Case (1986), 12 ibid. p. 239; the Ultrasystems Incorporated Case (1983), 2 ibid. p. 100. (1987), 17 ibid. p. 92. Ibid. at p. 99. Ibid. There may be a conflict in substance among the cases – e.g. the Kenneth P. Yeagar Case (1987), 17 ibid. p. 92, the Lillian Byrdine Grimm Case (1983), 2 ibid. p. 78, the Manuchehr Haddadi Case (1985) 8 ibid. p. 20: see Brower and Brueschke, op. cit. note 1 p. 60. However, the direction in which the tribunal was moving is clear. The Gibbs and Hill, Inc. Case (1982), 1 ibid. p. 236; the Halliburton Company Case (1982), ibid. p. 242; the Howard, Needles, Tammen and Bergendoff (HNTB) Case (1982), ibid. p. 248; the George W. Drucker, Jr. Case (1982), ibid. p. 252; the T.C.S.B., Inc. Case (1982), ibid. p. 261; the Ford Aerospace and Communications Corp. Case (1982), ibid. p. 268; the Zokor

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It is clear that the question whether the tribunal has jurisdiction must depend entirely on the interpretation of the relevant jurisdictional clause in each individual contract. However, the practice of the tribunal has been summarized as follows by one commentator. In essence, the tribunal decided that a contract clause that fails unambiguously to require that any and all disputes that arise under the contract be settled by Iranian courts, and only by Iranian courts, does not deprive the tribunal of jurisdiction over disputes arising from the contract. Thus, the tribunal retained jurisdiction where the contract required settlement through ‘competent courts according to Iranian law’, or ‘by arbitration laws of Iran’, or where only the maker of promissory notes undertakes to submit to the jurisdiction of Iranian courts, or where not all conceivable disputes are restricted to Iranian courts as in a clause requiring that ‘all disputes . . . arising out of interpretation of the contract or execution of the works . . . shall be settled . . . via referring to the competent Iranian courts’.”123 Moreover, the Full Tribunal returned the cases to the chambers for further proceedings, noting in cases where it found a clause that deprived the tribunal of jurisdiction that ‘[t]he extent to which the claims asserted in this case are based on this contract, and thus outside the Tribunal’s jurisdiction, and the extent to which they are based on other contracts or are not based on contract, and thus within the tribunal’s jurisdiction, remains to be determined by . . . the chamber to which this claim is assigned.’ In some cases where the Tribunal had no jurisdiction over a contractual dispute because of an Iranian courts clause, the claimant was able to prevail on a claim of expropriation and recover as part of the value of the expropriated concern an amount estimated to include the debt owed pursuant to the contract.124 On the other hand, the Tribunal rejected the argument that the phrase ‘binding contract’ meant ‘enforceable forum clause’ and refused consequently to decide whether changes in Iran would have rendered Iran courts clauses unenforceable. It is clear that the Tribunal was reluctant to engage in such a politically sensitive exercise, and it believed that an international arbitral tribunal – unlike a national court – should not be expected to decide the enforceability of forum selection clauses unless the parties unambiguously gave it a mandate to do so. While the United States obviously hoped that the word ‘binding’ would give the Tribunal the basis it needed to determine enforceability, the Tribunal noted that it is unclear whether the purpose intended by the United States was conveyed to Iran.125

123 124 125

International, Inc. Case (1982), ibid. p. 271; the Stone and Webster Overseas Group, Inc. Case (1982), ibid. p. 274; the Dresser Industries, Inc. Case (1982), ibid. p. 280. The Ford Aerospace and Communications Corp. Case (1982), 1 ibid. p. 269. See the Tippets, Abbett, McCarthy, Stratton Case (1984), 6 ibid. p. 219. Aldrich, op. cit. note 1 pp. 102–4. Footnotes are as cited in that commentator’s text with changes in numbering and other minor changes. Brower and Brueschke, op. cit. note 1 pp. 63 ff., see an inconsistency between the Ford Aerospace and Communications Corp. Case (1982), 1 Iran-US CTR p. 268, and the George W. Drucker, Jr. Case (1982), ibid. p. 252 (both cited above in footnote 122). Subsequent cases decided after the nine

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Hostages and Popular Movements Exclusion The CSD specifically excludes from the tribunal’s jurisdiction “claims described in paragraph 11 of the [General Declaration], and claims arising out of the actions of the United States in response to the conduct described in [such] paragraph.” Paragraph 11 of the General Declaration identifies such claims as those of the United States or a United States national arising out of events occurring before the date of this declaration related to (A) the seizure of the 52 United States nationals on November 4, 1979, (B) their subsequent detention, (C) injury to the United States property or property of the United States nationals within the United States Embassy compound in Tehran after November 3, 1979, and (D) injury to the United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran.

No hostage-related claims against Iran excluded by paragraph 11 of the General Declaration were in fact filed, but several claims against the US raised the jurisdictional question whether some or all of the actions on which the claims were based were actions taken by the US in response to the seizure of its embassy and detention of the hostages. In the K. Haji-Bagherpour Case,126 the tribunal dismissed for lack of jurisdiction a claim by the Iranian owner of a tanker truck that had driven into a staging area used by armed forces of the US in the course of the aborted hostage rescue mission on the night of 24 April 1980. Fire from American sentries allegedly destroyed the truck. The tribunal dismissed the claim for lack of jurisdiction, holding that the claim arose out of actions of the US in response to the conduct described in paragraph 11 of the General Declarations. In the Emanuel Too Case also the tribunal dismissed for lack of jurisdiction a claim for property loss allegedly resulting from the suspension of the claimant’s entry visa into the US in 1980. The tribunal stated: It seems clear that the United States suspended visas issued in Tehran in application of the Presidential Order issued in response to the seizure of its embassy. Consequently, the Tribunal holds that the suspension of the Claimant’s visa was

126

decided in 1982 and referred to in Brower and Brueschke, op. cit. note 1, footnote 299 ff. on pp. 69 ff. See also Stein, “Jurisprudence and Jurists’ Prudence: The Iranian-Forum Clause Decisions of the Iran-US Claims Tribunal”, 78 AJIL (1984) p. 1; Berglin, “Treaty Interpretation and the Impact of Contractual Choice of Forum Clause on the Jurisdiction of International Tribunals: The Iranian Forum Clause Decisions of the Iran-US Claims Tribunal”, 21 Texas ILJ (1985) p. 39. In the Islamic Republic of Iran v. United States (Cases Nos. A15(IV) and A25) (1998), 34 Iran-US CTR at p. 144, the tribunal stated that it had no jurisdiction to determine the enforceability of forum selection clauses. (1983), 2 Iran-US CTR p. 38. See also the Mohamed Mousavi Case (1988), 8 ibid. p. 24.

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Chapter Ten an act which arose directly ‘out of the actions of the United States in response to the conduct described in’ paragraph 11 of the General Declaration, namely the seizure of the United States embassy in Tehran. Therefore, the Tribunal has no jurisdiction over this claim.”127

In the Parvis Karim-Panahi Case128 the tribunal held that it had jurisdiction over an immigration claim against the US. There the claimant, an Iranian permanent resident of the US, was detained and held deportable on two separate grounds. First, he had travelled in Iran in violation of US federal regulations imposed in response to the detention of the fifty-two hostages. Secondly, he had abandoned his permanent residence in the US. The tribunal found that it had jurisdiction over the claim to the extent that it arose out of the second ground. In paragraph 11 of the General Declaration there were excluded from the tribunal’s jurisdiction claims against Iran related to the seizure of the fiftytwo US nationals and to their detention, those related to damage to property within the embassy compound in Tehran, and those related to injury to the United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the government of Iran. The application of this last provision became an issue in several cases. Iran argued that claims of any US nationals for loss of property as a result of riots or other disturbances during the revolution were excluded. The tribunal found it unnecessary to decide that question. The tribunal instead pointed out that “only injuries resulting from popular movements which are not an act of the Government of Iran are excluded from the Tribunal’s jurisdiction by this provision, which exclusion is no more than a restatement of the customary international law requirement that a State’s responsibility is engaged only by wrongful conduct attributable to the State.”129 In numerous claims seeking compensation for the actions of various Iranian individuals and groups, Iran has argued that the claims are excluded as being caused by “popular movements”.130 Such defences have been categorically rejected. For example, in the Ultrasystems Incorporated Case, the tribunal found that the claim was not a result of actions by popular movements, stating that:

127 128 129

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(1989), 23 ibid. at p. 386. (1992), 28 ibid. p. 225. Jack Rankin Case (1987), 17 ibid. at p. 141; the Alfred L.W. Short Case (1987), 16 ibid. at p. 79; the Kenneth P. Yeager Case (1987), 17 ibid. at pp. 100–1; the Arthur Young and Co. Case (1987), ibid. at p. 256. See, e.g., the Lillian Byrdine Grimm Case (1983), 2 ibid. at p. 79.

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With respect to [respondent’s] argument based on paragraph 11 of the General Declaration, we find it inapplicable to the claim for security costs. Such costs were incurred not as the result of any injuries caused by popular movements in the course of the Revolution, but in order to prevent such injuries . . . . [T]he exclusionary provisions of paragraph 11 can hardly have been intended to cover more than claims arising directly out of actual injuries. The claim therefore lies within the Tribunal’s jurisdiction since it allegedly “arise[s] out of ” the termination provisions of the Contract.131

In some cases the tribunal has ruled that the question of whether the actions giving rise to the claim were attributable to the Government of Iran rather than to “popular movements” was inexorably intertwined with the merits of the case and has assumed jurisdiction.132 Thus, the tribunal determined that it “cannot divorce” the respondent’s “popular movements” jurisdictional arguments from the merits of the case. The tribunal noted that “[t]o deny the jurisdiction on these grounds would amount to endorsing a fin de nonrecevoir, that is, in the words of the Permanent Court of International Justice, a ‘ground of defense based on the merits of the case and calculated to cause the judge to refuse to entertain the application’.”133 Thus, the rule applied by the tribunal is that “if the Claimant relies on acts which it contends are attributable to the Government of Iran, Paragraph 11 of the General Declaration does not effectively restrict the Tribunal’s jurisdiction.”134 As a result, therefore, the effectiveness of paragraph 11(D) of the General Declaration as a jurisdictional defence has been negligible.135

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(1983), 2 ibid. at p. 110 (emphasis in original). See also the K. Haji-Bagherpour Case (1983), ibid. p. 38, where it was found, however, that the claim was a direct result of retaliatory actions of the US, and therefore excluded from the tribunal’s jurisdiction. See, e.g., the Vernie Rodnye Pointon Case (1991), 27 ibid. p. 49. Ibid. at p. 58, at note 8 (quoting the Case Concerning Certain German Interests in Polish Upper Silesia (1925), PCIJ Series A No. 6, at p. 19). See also the Albert Berookhim Case (1990), 25 ibid. at p. 286; the Lilly Mythra Fallah Lawrence Case (1990), ibid. at pp. 194–5. The United Painting Company Case (1989), 23 ibid. at p. 362; see also the Alfred L.W. Short Case (1987), 16 ibid. at p. 79. Article II(1) of the CSD also specifically excludes “claims arising out of the actions of the United States in response to the conduct described in such paragraph (paragraph 11 of the General Declaration).” This exclusion was invoked by the US in the K. Haji Bagherpour Case. There an Iranian national, whose kerosene tanker truck was destroyed by United States military forces on the night of the aborted attempt to rescue the 52 American hostages, sought compensation for the truck, its contents, lost income and spiritual and moral damages. The respondent, the United States government, did not deny that it had destroyed a kerosene tanker truck on the night and at the place alleged by the claimant. But, it argued, inter alia, that the claim was excluded by Article II(1) as an action in response to the taking of the hostages. The tribunal dismissed the claim on the latter

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Counterclaims Article II(1) of the CSD provides for jurisdiction over “any counterclaim which arises out of the same contract, transaction or occurrence that constitutes the subject-matter of that national’s claims”. On account of the restriction on jurisdiction ratione personae in the CSD Iran brought many counterclaims against the private US claimants, as Iran’s only practical alternative in most cases would have been to bring suit in courts of the US.136 The tribunal has made the following rulings on counterclaims.137 (i)

If the claims in a case are dismissed for lack of jurisdiction, then any counterclaims must also be dismissed.138 (ii) A claimant remains free to withdraw any and all of its claims for relief. Such withdrawal, however, can have no effect on the tribunal’s jurisdiction over the counterclaims, unless the tribunal were to determine that it had no jurisdiction over the claims as originally filed. This is the effect of the decision in the Behring International, Inc. Case.139 (iii) In the E-Systems, Inc. Case, the Full Tribunal decided that respondents before the tribunal are not compelled to bring any counterclaims to the tribunal and remain free to pursue them in other forums if they elect not to bring them to the tribunal as counterclaims.140 (iv) The tribunal has asserted with some emphasis that there is no jurisdiction over counterclaims which do not arise from the same contract, transaction, or occurrence as a claim. While it is usually obvious whether a counterclaim is based on the same contract as a claim, it may be less obvious whether it arises from the same transaction or occurrence. The first case in which this issue arose was the Harza Engineering Co. Case where the tribunal, in dicta, said that a counterclaim based on standby letters of credit did not arise out of the same contract, transaction, or occurrence as the claim, which was for funds in a bank account

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ground, concluding that there could be “no doubt” as to the causal relationship between the taking of the 52 hostages and the rescue operation that led to the destruction of the claimant’s property: (1983), 2 ibid. at pp. 39–40. For reference to the numerous cases in which counterclaims were placed see Brower and Brueschke, op. cit. note 1 pp. 99–100, footnotes 443 to 452. See Aldrich, op. cit. note 1, pp. 111–20. Aldrich’s findings, which are accurate and complete, are reflected in what follows. The Reliance Group, Inc. Case (1982), 1 Iran-US CTR p. 384; see also the Bendone-Derossi International Case (1988), 18 ibid. p. 115; the Creditcorp International, Inc. et al. Case (1989), 23 ibid. p. 205; the Carlson Case (1991), 26 ibid. p. 193; the General Petrochemicals Corp. Case (1991), 27 ibid. p. 196. (1985), 8 ibid. at p. 238. 2 ibid. at p. 51.

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and which was dismissed as not outstanding on the date of the Algiers Declarations.141 In the Owens-Corning Fiberglass Corp. Case the tribunal explained its dismissal of a counterclaim that was based on a different licensing agreement from that on which the claim was based in the following terms: The provision in the Claims Settlement Declaration allowing jurisdiction over counterclaims (Article II, paragraph 1) limits that jurisdiction to counterclaims assertable by the particular respondent against whom the claim bas been brought and based on a cause of action that arises out of the ‘same contract, transaction or occurrence’ relied on by the Claimant. The Tribunal notes that this series is in the disjunctive, which suggests that ‘contract’, ‘transaction’ and ‘occurrence’ are alternatives. In other words, if a claim is based solely on a contract, a counterclaim must arise from the same contract to be within the jurisdiction of the Tribunal. Similarly, if a claim is for an occurrence, such as a taking of property, then a counterclaim would have to arise out of that same occurrence. On the other hand, it can doubtless be argued that, in a case where a prolonged or complex business transaction results in several contracts, a counterclaim should be within our jurisdiction, even if it arises from a different one of those contracts than the one on which the claim was based, because both arise from the same transaction. In the present case the Tribunal finds it unnecessary to decide this question, because the evidence indicates that [each of] the two licence agreements constitute the entire transaction. Indeed, Article 18 of each licence so provides.142

In the R.N. Pomeroy, et al. Case again the tribunal blandly dismissed for lack of jurisdiction a counterclaim arising from contracts between the parties that were earlier than the one on which the contract was based. It merely said summarily that the counterclaim was not within its jurisdiction, because it did not arise out of the same subject-matter as the claim.143 Later the same chamber decided the other way in the American Bell International, Inc. Case.144 While the tribunal dismissed for lack of jurisdiction counterclaims arising not from the contracts but from alleged violations of criminal law or torts, the tribunal held that, although the claims were based on two contracts between the parties, a counterclaim based on the third contract between them was within its jurisdiction. The tribunal stressed the facts that the counterclaim contract was a short-term contract that was followed by the two annual contracts on which the claims were based, that all involved the same project and that it was “apparently foreseen that all the successive contracts” would go to the same company. In light of these particular circumstances, the tribunal 141 142 143 144

(1982), 1 ibid. p. 499. (1983), 2 ibid. at p. 324. (1983), 2 ibid. at p. 379. (1984), 6 ibid. p. 74.

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found “that the linkage between all three contracts must be considered sufficiently strong so as to make them form one single “transaction” within the meaning of the Claims Settlement Declaration.”145 In the Morrison-Knudsen Pacific Ltd. Case, however, the tribunal ruled that three contracts between the parties relating to a single motorway project could not be viewed as part of a single transaction in which the respondent was not obligated to award all the contracts to the claimant, in which the contracts were executed on different dates and involved different services to be performed on different dates, and in which findings made with respect to claims and defences raised in connection with one contract would have no effect on claims and defences raised on another contract.146 Similarly, a month later, the same chamber dismissed for lack of jurisdiction counterclaims based on a licensing agreement between the parties in a case where the claims arose out of separate sales contracts. It said the linkage between the licensing agreement and the sales contracts was not sufficiently strong to make them a single transaction.147 The tribunal also held that counterclaims arising out of other contracts than those on which the claims were based were within its jurisdiction in the Westinghouse Electric Corp. Case.148 There the claimant entered into a series of contracts between 1971 and 1978 with the Iranian Air Force for the establishment and expansion of an integrated electronics depot for the maintenance of various electronic systems. The claimant brought claims arising from four of the contracts, and the Air Force counterclaimed on others. The tribunal found that three counterclaims based on three 1975 contracts which were part of a second general expansion of the depot were within its jurisdiction.149

145 146 147

148 149

Ibid. at pp. 83–4. (1984), 7 ibid. at pp. 82–4. The R.J. Reynolds Tobacco Co. Case (1984), 7 ibid. at p. 196. See also the Howard Needles Tammen and Bergendoff Case (1986), 11 ibid. p. 302; the General Motors Corp., et al. Case (1986), 13 ibid p. 282; the Arthur Young and Co. Case (1987), 17 ibid. p. 245; the Avco Corp. Case (1988), 19 ibid. p. 200; the International Systems and Controls Corp. Case (1990), 24 ibid. p. 47; the Combustion Engineering, et al. Case (1991), 26 ibid. p. 60; the Merrill Lynch, et al. Case (1991), 27 ibid. p. 122; the Kaysons International Corp. Case (1993), 39 ibid. p. 222. (1987), 14 ibid. p. 104. It would appear that the tribunal was not easily persuaded that counterclaims arising out of other contracts than those on which the claims arose were within its jurisdiction. It is only where the evidence indicated that the contracts were part of a single transaction in the sense that, whatever the legal rights of parties, as a practical matter, both parties were committed to the transaction in its entirety would the tribunal find jurisdiction over counterclaims arising under other contracts. The tribunal’s approach in the cases suggests its

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(v)

The tribunal has rejected the argument that fairness required that valid claims against a claimant should be allowed as setoffs against an award in favour of the claimant even when they fail to satisfy one or more of the requirements for jurisdiction over counterclaims.150 (vi) The tribunal has rejected a plea by the claimant that counterclaims should be limited to the amount of the claims and, in particular, that awards for counterclaims should be limited to setoffs against awards for claims on the ground that the tribunal lacked jurisdiction to give affirmative awards against US nationals.151 The tribunal stated: “So long as a counterclaim falls within the requirements of Article II(1) . . . the counterclaim is within our jurisdiction even if it exceeds the amount of the claim.”152 (vii) The tribunal has held that, in indirect claims, counterclaims against the claimants arising out of the same subject-matter as the claims were within its jurisdiction even though the other party to the contract – the third-country corporation – was not a party to the case before the tribunal.153 The tribunal never had to face the question whether affirmative recovery on such counterclaims against the claimants would be permissible. The tribunal’s views were stated clearly in the Richard D. Harza Case: 83. This dispute thus raises at least three preliminary questions: (1) whether the Tribunal has jurisdiction over the counterclaims as against Harza International, a Liberian corporation, under Article II, paragraph 1 of the Declaration as counterclaims arising out of the same contract as the claim; (2) whether the Tribunal has jurisdiction over the counterclaims as against the Claimants by virtue of the amendment of 21 October 1982; (3) whether, in any event, the Tribunal may make a net award in favour of the counterclaims or consider them only as a set-off against the claims. 84. As to the first question, the Tribunal determines that it lacks jurisdiction over counterclaims brought against Harza International because counterclaims must be directed against a claimant and not against a third party. R.N. Pomeroy et al. and Government of Islamic Republic of Iran, Award No. 50-40-3, p. 13 (8 June 1983). In this proceeding, Harza International is not a Claimant.

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151 152 153

reluctance to find a single transaction even where all contracts are part of a single project and were all between the same parties. The Computer Sciences Corp. Case (1986), 10 ibid. p. 269 at p. 309 particularly. See also the Combustion Engineering, et al. Case (1991), 26 ibid. at p. 84. The Gould Marketing, Inc. Case (1983), 3 ibid. p. 147. Ibid. at p. 152. See also the Anaconda-Iran, Inc. Case (1986), 13 ibid. at pp. 226–7. The R.N. Pomeroy et al. Case (1983), 2 ibid. p. 372; the Richard D. Harza, et al. Case (1956), 11 ibid. p. 76.

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Chapter Ten 85. With respect to question (2), Article II, paragraph 1 of the Claims Settlement Declaration confers upon the Tribunal jurisdiction over ‘any counterclaim which arises out of the same contract . . . that constitutes the subject-matter’ of the claim of a national. As noted, the counterclaims raised here all relate to the Contract and thus fall within the Tribunal’s subject-matter jurisdiction. If the claims had been brought as direct claims of Harza International, rather than as indirect claims of its shareholders, there would be no question that the Tribunal would have jurisdiction over the counterclaims. The issue before the Tribunal thus is whether a claimant that owns its claim indirectly is shielded jurisdictionally from counterclaims that could otherwise have been brought against the direct owner of the claim. We hold that it is not. 86. While the Claimants are correct in noting that claims against a corporation ordinarily may not be asserted against its shareholders, it also is true that shareholders such as the Claimants ordinarily may not assert claims belonging to their corporation. To the extent that the Claims Settlement Declaration provides otherwise and permits shareholders to raise corporate claims, equity requires that they take such claims subject to the defences and counterclaims that could have been raised as against the corporation. The Tribunal therefore holds that it has jurisdiction over the counterclaims raised by KWPA against the Claimants and arising out of the Contract. However, in view of the individual determinations below dismissing the counterclaims on the merits, the Tribunal need not decide the third question above concerning whether a net award can be made in favour of the counterclaims.154

(viii) In the Anaconda-Iran, Inc. Case, the tribunal faced a special issue. The contract on which the claim was based provided for International Chamber of Commerce arbitration of any disputes and, in so doing, explicitly prohibited any counterclaims or setoffs against the award in the event the arbitration should find a breach of contract. The tribunal held that the contract limitation did not affect the tribunal’s jurisdiction over counterclaims, as that jurisdiction was provided by the international agreement of Iran and the USA, not by the contractual agreement of the parties to the arbitration.155 (ix) The tribunal has held that it has no jurisdiction over counterclaims by or against non-parties. In a few cases respondents brought counterclaims against entities other than a claimant. It is, indeed, difficult to understand why the respondents thought they could succeed in impleading third parties.156

154 155 156

Ibid. at pp. 109–10. Footnote omitted. (1986), 15 ibid. p. 199. See the American Bell International, Inc. Case (1984), 6 ibid. p. 74 (counterclaim against the claimant’s parent corporation); the Walter W. Arensberg, et al. Case (1986), 10 ibid. p. 37 (counterclaim against claimant’s subsidiary corporation); the Phillips Petroleum Co. Iran Case (1989), 21 ibid. p. 79 (counterclaim against claimant’s parent corporation); and the Collins Systems International, Inc. Case (1992) Decision No. DEC 104–431–2, 28 ibid. p. 195.

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There are a few cases in which purported counterclaims were asserted by entities that had not been made respondents to the claims. In the KimberlyClark Corp. Case157 a non-respondent presented a counterclaim, and the claimant amended its statement of claim, with the permission of the tribunal, to add that counterclaimant as a respondent. In all other cases, the tribunal dismissed the purported counterclaims for lack of standing by the counterclaimant or as outside its jurisdiction.158 (x) The tribunal has held that it has no jurisdiction over counterclaims for taxes or social security premiums. When claims are based on contracts, the tribunal has consistently held that it has no jurisdiction over counterclaims seeking Iranian taxes or social security premiums allegedly owed by the claimant and attributable to the performance of those contracts. Such counterclaims are regarded as arising from provisions of Iranian law, not from the contracts. Even when the contracts contained clauses requiring the claimant to comply with Iranian tax and social security laws, it was the law, not the contract, that was the source of the alleged obligation. On the other hand, where the contract provided for the withholding for taxes of a percentage of payments due, or where such withholdings were the accepted practice of the parties pursuant to the contract, the tribunal made appropriate deductions for that purpose when calculating amounts due under the contract.159 In the Computer Sciences Corp. Case,160 the tribunal faced the unusual situation in which the claimant had included among its claims a claim for a tax clearance certificate asserting that it had paid off its Iranian taxes and was entitled to an Iranian tax clearance certificate for certain tax years. The claimant had named the Iranian Finance Ministry as a respondent to that claim. The Finance Ministry denied that the claimant was entitled to a clearance certificate and counterclaimed for taxes allegedly due for those years. Consequently, the

157 158

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(1983), 2 ibid. p. 334. See, e.g., the Interfirst Bank Dallas, N.A. Case (1987) 16 ibid. p. 291; the First National Bank of Boston Case (1988), 19 ibid. p. 302; the Uiterwyk Corp. et al. Case (1988) ibid. p. 107; the Combustion Engineering, et al. Case (1991), 26 ibid. p. 60; the Collins Systems International, Inc. Case (1992) 28 ibid. p. 21. See, e.g., the T.C.S.B., Inc. Case (1984), 5 ibid., p. 160; the Sylvania Technical Sys. Inc. Case (1985), 8 ibid. p. 298; the Blount Brothers Corp. Case (1986), 10 ibid. p. 56, the Computer Sciences Corp. Case (1986), 10 ibid. p. 269; the Howard Needles Tammen and Bergendoff Case (1986), 11 ibid. p. 302; the Collins Systems International Inc. Case (1992), 28 ibid. p. 21. (1986), 10 ibid. p. 269.

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tax counterclaim in that case did in fact arise from the same transaction or occurrence as the claim for the clearance certificate. However, the tribunal dismissed the claim for lack of jurisdiction, because it held that it had no jurisdiction over the claim. In explaining its holding, the tribunal said that tax laws were not enforceable except by the organs of the taxing State and that, therefore, it had no jurisdiction over the claim for a tax clearance certificate.161 Awards on Agreed Terms Article 34 of the Tribunal Rules specifically provides for awards on agreed terms: If, before the award is made, the parties agree on a settlement of the dispute, the arbitral tribunal shall either issue an order for the termination of the arbitral proceedings or, if requested by both parties and accepted by the tribunal, record the settlement in the form of an arbitral award on agreed terms. The arbitral tribunal is not obligated to give reasons for such an award.

Early in the tribunal’s operation a dispute arose between the states parties concerning whether and under what conditions the Security Account could be used to satisfy private settlements of claims filed with the tribunal. The United States position was that the tribunal may make such an award “only after it has reviewed the settlement and found that the claim is within the Tribunal’s jurisdiction and that the settlement represents a reasonable determination of the claim.” Iran argued that the tribunal, when presented with a request for an award on agreed terms from the parties, should issue such an award “if the claim is, prima facie, within the jurisdiction of the Tribunal.”162

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Ibid. at pp. 312–13. When claims are based on the taking or deprivation of property, tax counterclaims have rarely, if ever, been submitted, but the tribunal has, when valuing the property on a dissolution or asset value basis, taken into account relevant tax liabilities accrued at the date of taking or deprivation. On the other hand, the tribunal has taken account of prospective future tax liabilities only when determining future profitability of a going concern. In the unusual case of property taken while in the process of being inherited, the inheritance taxes that would have been due were deducted from the property value to determine its value to the heirs. For cases on these tax matters in relation to valuation, see, e.g., the Tippets, Abbett, McCarthy, Stratton Case (1984), 6 ibid. p. 219, the Sedco Inc., et al. Case (1989), 21 ibid. p. 31; the Starrett Housing Corp. et al. Case (1987), 16 ibid. p. 112, the Phillips Petroleum Co. Iran Case (1989), 21 ibid., p. 79; the Harold Birnbaum Case (1993), 29 ibid. p. 260; the Edgar Protiva, et al. Case (1995), 31 ibid. p. 89. These cases strictly did not involve counterclaims as such. For the arguments of both parties see Case No. A1 (Iran and United States, Case A1 (Issue II )) (1982), 1 ibid. at pp. 151–2 and p. 150 respectively.

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The tribunal in Case No. A1 (Iran and United States, Case A/1 (Issue II))163 viewed the question before it as embodying two issues: (i) the extent to which the tribunal must establish that it has jurisdiction over the claim; and (ii) whether the tribunal must approve the reasonableness of the settlement. Regarding jurisdiction the tribunal reaffirmed that the extent of the tribunal’s jurisdiction has been determined by Iran and the United States in the Algiers Declarations, and that, consequently, it has no jurisdiction over any matter not conferred on it by these Declarations. Accordingly, the tribunal held that if requested to make an award on agreed terms it will make such examination concerning its jurisdiction “as it deems necessary”.164 The tribunal refused, however, to give any more definite guidance than this, believing that “it would be neither appropriate nor feasible to establish, in abstracto, without reference to the situation in any particular case, a general rule concerning the extent of the examination as to jurisdiction that may be needed, given the large variety of situations in which matters of jurisdiction may arise and the detailed nature and complexity of the provision on jurisdiction in the Algiers Declarations.”165 It may be noted that the reluctance of the Full Tribunal to establish an articulated jurisdictional threshold concerning awards on agreed terms was helpful, when it was subsequently presented with the lump-sum settlement of the more than 2,700 outstanding small claims.166 In approving this settlement agreement, the award on agreed terms does not include general language concerning the likely jurisdiction of the tribunal among other things. On the contrary, the tribunal acknowledged that the settlement agreement covered some claims that were clearly beyond the jurisdiction of the tribunal. However, the tribunal concluded that this fact did not prevent it from issuing an award on agreed terms.167 This was a practical result. Admissibility Several grounds for inadmissibility have been raised before the tribunal.

163 164 165 166

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Ibid. p. 144. Ibid. at p. 152. Ibid. The United States of America, on behalf of U.S. Nationals and The Islamic Republic of Iran, Award on Agreed Terms No. 483 – CLAIMS OF LESS THAN US $ 250,000/86/B38/B76/ B77-FT (22 June 1990), 25 ibid. p. 327. Ibid. at pp. 329–30, where the tribunal gave reasons for its conclusions. Two commentators have remarked that the parties may have agreed to an amendment to the Algiers accord in entering into the settlement agreement: Brower and Brueschke, op. cit. note 1 p. 121, note 550. On some matter of substance relating to the acceptance or refusal of agreed terms see Brower and Brueschke, ibid. pp. 121–2.

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Availability of Other Remedies It has been argued that claims are inadmissible because local remedies were available and had not been exhausted. The tribunal without difficulty rejected Iran’s contention that the special commission established by its Single Article Act of 8 January 1980 retained sole jurisdiction over oil nationalization claims despite the Algiers Declarations, which excluded implicitly the need to resort to local remedies.168 The tribunal took the view that one purpose of the Algiers Declarations was, as stated in General Principle B of the General Declaration, to terminate all litigation as between the Government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration. Nor, as the tribunal has held, does the currency of proceedings before local courts, as in the case of liquidation and bankruptcy, render the applications inadmissible. In the Reynold, Inc. Case the tribunal said in respect of both procedures: Tchacosh and Siporex (respondents) have both alleged that they are currently under liquidation in Iran and that the Claimant may present its Claims to the liquidators. The process of liquidation in Iranian law is to be distinguished from the process of bankruptcy. The Claims Settlement Declaration does not exclude claims which may be brought under either of these processes. The mere availability of a local remedy, whether judicial or otherwise, cannot preclude the Tribunal from jurisdiction.169

In the Behring International, Inc. Case the tribunal denied the claimant’s request for a stay of the proceedings before the tribunal on the ground that it had petitioned for bankruptcy in the US. The tribunal stated: Irrespective of the provisions of the United States Bankruptcy Act neither the Algiers Accords nor the Tribunal Rules anywhere contemplate that proceedings here can in any way be regulated by the municipal law of either the United States or Iran. Indeed, the very purpose of establishing the Tribunal was to remove certain claims from the jurisdiction of the courts of the States Parties to this international forum. Plainly, permitting United States law to continue to regulate proceedings with respect to claims filed here and otherwise within our jurisdiction would contravene such intent.170

168

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See Phillips Petroleum Co., Iran Case (1982), Interlocutory Award, 1 Iran-US CTR p. 487, the Amoco International Finance Corp. Case (1987), Partial Award, 15 ibid. at pp. 196–7. (1983), 2 ibid. at p. 10. See also the Time, Inc. Case (1984), 7 ibid. at p. 10. The Eastman Kodak Co. Case (1991), 27 ibid. p. 21. 8 ibid. at p. 258. The tribunal added: Moreover, the Tribunal observes, but does not decide, that the automatic stay provision of the United States Bankruptcy statute, II US.C.A. § 362 (West Supp. 1985), does not purport to stay proceedings commenced by, as opposed to against, the debtor. Such stay also appears not to extend extraterritorially, as a matter of United States law, to foreign arbitral proceedings, at least those involving a foreign party lacking minimum current

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Political and Non-justiciable questions The tribunal has tended to regard certain claims as inadmissible, because they raised political questions, so that deciding them would require the tribunal to substitute its judgment for that of government agencies or officials, or because they were based on laws that could not be enforced extraterritorially. In the Hoffland Honey Co. Case the tribunal rejected on the merits a claim based upon an allegation that the respondent had sold oil which had been used to make agricultural chemicals, the use of which in Wisconsin had damaged many colonies of the claimant’s bees, on the ground that the oil sales were not the proximate cause of Hoffland’s losses. But it added: Finally, Hoffland’s claim is essentially a political claim, and thus inherently incapable of judicial resolution. Hoffland admits, for example, that the use of the specific agri-chemicals in question has been sanctioned by United States ‘Environmental Protection Agency rulings(s) and Department of Agriculture recommendations.’ Hoffland further notes that questions of national economic policy may be implicated in any decisions concerning oil imports. While we are sympathetic to Hoffland’s difficulties and understand its distress both at its losses and its inability to obtain compensation elsewhere, it is plain that the two Governments did not contemplate our intrusion into their political decisions in order to express our views, in monetary awards, as to the relative importance to each country of honey, corn, oil, and wheat.171

In the Computer Sciences Corp. Case the tribunal refused to admit a claim that the tribunal determine that the claimant was entitled to an Iranian tax clearance certificate. The tribunal said: Such a claim is essentially a request that this Tribunal enforce the tax laws of a sovereign State, that what it seeks is a binding declaration of the taxes owed by the Claimant. Under Article V of the Claims Settlement Declaration, the Tribunal is bound to apply those ‘choice of law rules and principles of . . . international

171

contacts with the United States. In Fotochrome, Inc. v. Copal Co. Ltd, 517 F.2d. 516 (2d Cir. 1975) (applying Bankruptcy Act of 1938), the United States Court of Appeals for the Second Circuit held that a bankruptcy court’s order could not operate to stay arbitral proceedings pending in Japan, commenced by a Japanese corporation against the debtor in bankruptcy, where the bankruptcy court lacked personal jurisdiction over the Japanese corporation. The court also held that the resulting arbitration award was recognizable and enforceable, subject to confirmation as such by a United States court pursuant to the provisions of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards without review of the underlying claim by the bankruptcy court. It seems all the more unlikely that a United States court would venture to interfere directly with an arbitral proceeding before an international tribunal established with the agreement of the United States Government. ibid. at pp. 258–9 (footnotes omitted). (1983), 2 ibid. at pp. 42–3.

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Chapter Ten law’ that it finds are applicable to the case at hand. It is a ‘universally accepted rule that public law cannot be extraterritorially enforced.’ Tax laws are manifestations of jus imperii which may be exercised only within the borders of a State. In addition, revenue laws are typically enormously complex, so much so that their enforcement is frequently assigned to specialized courts or administrative agencies. For these reasons, actions to enforce tax laws are universally limited to their domestic forum. It makes little difference for present purposes whether the rule is considered one of public or private international law. States may of course vary the rule by treaty, but ‘in view of the firmly established practice and the deeply rooted and universally accepted conviction of the international unenforceability of claims jure imperii, any qualification of the customary rule will presuppose the clearest possible expression of the international legislators’ intention.’ No such explicit expression appears in the Claims Settlement Declaration, and the Tribunal considers that it would be unwise to imply one.172

Failure to State a Cognizable Claim The tribunal has taken the view that claims were inadmissible, when they were so vague that they failed to state a cognizable claim or cause of action.173 Two cases considered what constituted a cognizable claim. In the Unidyne Corp. Case it was held that a claim for loss of equipment and furniture that had been left behind when the company’s personnel left Iran must fail because the information provided about the equipment and what happened to it fell short of what was necessary to establish a cognizable claim.174 On the other hand, in the Jalal Moin Case it was noted that defects or gaps in the claimant’s written pleadings had led to doubts concerning the existence of the claim but that evidence and arguments presented at the hearing were adequate to remove those doubts so that the tribunal could take up a claim allegedly arising out of measures affecting the claimant’s property rights.175

172

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174 175

(1986), 10 ibid. at pp. 312–13. The tribunal described the situation as an absence of jurisdiction but the matter pertained to admissibility. The tribunal subsequently came to the same conclusion, where a claimant sought a ruling that it had fulfilled its Iranian social security obligations: the Arthur Young and Co. Case (1987), 17 ibid. at pp. 263–4. In one case the tribunal even used similar reasoning to dismiss a claim for reimbursement of funds withheld pursuant to a contract to guarantee payment by the claimant of its social security dues: the TME International Inc. Case (1990), 24 ibid. at pp. 144–8. But see contra, e.g., the Combustion Engineering, et al. Case (1991), 26 ibid. at p. 78. On non-justiciability, or rather its inapplicability, in an “A” claim see Case No. A28 (United States of America v. Islamic Republic of Iran) (2000), 36 ibid. at pp. 20–1. Esahak Saboonchian Case (1991), 27 ibid. at p. 254, and the Parviz Karim-Panahi Case (1992), 28 ibid. at pp. 227–8. (1993), 29 ibid. p. 310. (1994), 30 ibid. at p. 74.

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Incidental Jurisdiction: Interim Measures The jurisdictional basis for dealing with requests for interim measures, and the legal effect of such measures when ordered have been discussed in Chapter 7, inter alia, in the context of the Iran-US Claims Tribunal. Further, the general principles underlying the exercise of the jurisdiction to order interim measures, as understood by the tribunal, have been referred to in that Chapter as well. Suffice it here, therefore, to discuss how the tribunal has implemented these principles in its decisions. The tribunal has cited the practice of international tribunals, stating in general that interim measures are a particular form of relief or remedy, pendente lite, [that] may be granted when the rights and/or property which the issuance of such measures is designed to protect are deteriorating in such a manner that irreparable harm might be done to the said rights and/or property of the applicant before a final award is rendered.176

In general, the need for interim measures of protection arises from the fact that the tribunal’s proceedings often take a long time. Because the exercise of the tribunal’s power to issue interim protection is governed by the rules of public international law,177 the ordering of interim measures has become prescribed by definite parameters that have been established in customary international law as reflected in the tribunal’s own past practice and precedents. What has occurred is that the tribunal requires the party seeking interim protection to prove either that there exists a threat of irreparable harm to property or to a right capable of being protected by the tribunal, or that a threat exists to the tribunal’s jurisdiction and authority, and in either case to show that an urgent situation exists justifying interim measures being taken before a final decision on the merits. Although the requirement of irreparable harm may sometimes be indistinguishable from the requirement of urgency, the tribunal has treated them as separate requirements. It must be pointed out that the tribunal has identified two general limitations upon its authority to order interim measures of relief. The first is that the relief should not be tantamount to awarding the party requesting relief

176

177

The United Technologies International, Inc. Case (1986), 13 ibid. at p. 257 (quoting Dumbauld, Interim Measures of Protection in International Controversies (1982) p. 143). On interim measures before the tribunal see in particular the detailed treatment in Brower and Brueschke, op. cit. note 1 pp. 216 ff., and Aldrich, op. cit. note 1 pp. 187 ff. See the tribunal’s statement in a case between the USA and Iran: Order of 18 January 1984, in Iran v. USA, Cases No. A-4 and A-15 (1984), 5 Iran-US CTR at p. 213.

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the final relief sought in its claim or counterclaim. In the Behring International, Inc. Case178 the tribunal applied this principle in rejecting a request by the respondents that it order the transfer to their custody of the goods in the claimant’s warehouse. However, the tribunal did grant other measures of interim relief, including ordering transfer of the goods to more adequate storage space to prevent their deterioration. The second limitation is that in general the tribunal will not grant a request for relief against a non-party to the case. In the Atlantic Richfield Co. Case179 the tribunal held that a request by the respondents for interim relief directed against a non-party to the case (the US) could not be granted. The claimant had obtained a licence from the US Treasury Department authorizing it to retain a judicial attachment of one of the respondents’ funds in an American bank account pending decision by the tribunal on its claim to those funds. The tribunal also noted that the subject-matter of the dispute was before the Full Tribunal in another case involving a dispute between the two governments. This limitation, it may be noted, was not ignored in the Tadjer-Cohen Associates, Inc. Case,180 where the tribunal granted the claimant’s request that the respondent be ordered to stay proceedings in an Iranian court against a third party, TCSB, an American firm. The case did not involve an order to a non-party, as was the order requested in the Atlantic Richfield Case. Rather was it apparently an order for the benefit of a non-party. However, the tribunal explained that TCSB had assigned its claim to the claimant and that the Iranian proceedings involved the same contract as the claim before the tribunal. The Need for Urgency Because interim protection is essentially a remedy designed to preserve the status quo pending the tribunal’s determination on the merits, there necessarily must be and in any event some urgency compelling the tribunal to act, such that if it did not do so before issuing the final award serious injury would result to the requesting party. An urgent situation must at least include a demonstration that the tribunal’s anticipated date of issuing the award on the merits will be too late to protect the threatened rights or property, although every case must be considered on the facts involved. Thus, the tribunal has denied requests for interim measures when the alleged harm was not sufficiently imminent. For example, in Islamic Republic of Iran v. United States of America the tribunal denied Iran’s request of 5 August 1988

178 179 180

(1985), 8 Iran-US CTR p. 44, Interim Award. (1985), 8 ibid. p. 179. (1985), 9 ibid. p. 302.

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to prohibit parallel litigation in any US court as not urgent.181 The orders of 22 August 1983 and 27 January 1984 in the Avco Corporation Case denied the respondents’ requests to restrain the sale of goods in view of the claimant’s assertion that no sale was planned.182 The tribunal’s approach is in accord with a general principle recognized by other international tribunals. As seen in Chapter 7 “urgency” is a separate requirement. In the Ford Aerospace and Communications Corporation Case the claimant before the tribunal was ordered by Iranian officials to appear before a Tehran court on 1 May 1983. On 7 February 1983, the claimant requested that the tribunal order a stay of that parallel litigation. On the same day on which the request came in, the tribunal invited Iran to respond to the claimant’s request. Iran did not respond, however, until 11 April 1983, and then merely requested that the case be transferred from Chamber Two to Chamber One. Thereafter, on 27 April 1983, more than three and one-half months after the claimant had requested the stay, Chamber Two issued an order requesting the Government of Iran to seek a stay of the Iranian litigation.183 This case illustrates that where the threat complained of is to occur in the near future but not immediately, the tribunal will offer the other party an opportunity to respond to the request for interim protection. Where possible, the moving party is then given a chance to rebut the other party’s answer. In Islamic Republic of Iran v. United States of America (Cases Nos. A15(IV) and A24),184 Iran was given more than three years to respond to answers given by the US Government to its initial request for an immediate stay of parallel litigation in the US. There was no urgency for interim measures. If the situation complained of is determined by the tribunal to affect imminently either the moving party’s rights or the jurisdiction and authority of the tribunal, it will issue appropriate interim or temporary restraining measures. Where the tribunal is required to act immediately, because of the urgency of the situation, it may act without even asking for the views of the party against which measures are to be issued. This can create problems in certain circumstances such as where one or more members of the Chamber or Full Tribunal are absent when such a request is made, or when the delay resulting from a full deliberation of the request would prevent the tribunal from acting sufficiently quickly. However, the practice in such cases was summed up in the Teledyne Industries Incorporated Case, where the tribunal stated:

181 182 183 184

(1993), 29 ibid. p. 214. See Brower and Brueschke, op. cit. note 1, footnote 1052. (1983), 2 Iran-US CTR at pp. 281–2. (1993), 29 ibid. p. 214.

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Chapter Ten The Tribunal considers that Respondent should be afforded the opportunity to file its Reply to Claimant’s Request for interim measures before final decision is taken with regard to that Request. However, in view of the statement by Claimant that it has been summoned to appear before a Court in Tehran in a case involving the same contract upon which Claimant’s claim in the present case is based, the Tribunal finds it appropriate immediately to request Respondent to move for a stay of the proceedings before the Tehran Court until such time as the Tribunal can render its decision on Claimant’s Request.185

Thus, only where there is a specific and compelling need will the tribunal grant a request for interim measures prior to receiving the views of the opposing party. In such situations, the tribunal has preferred to issue a temporary restraining measure. Such temporary restraining measures frequently have been granted by the tribunal pending further determination of a request for interim measures.186 In the Shipside Packing Company, Incorporated Case, the tribunal said: In view of the Claimant’s statement that “if the settlement is not reached soon, we will sell the goods” and its further statement that it has received a licence from the United States Government to do so, . . . the Tribunal finds it appropriate immediately to request the Claimant to take appropriate measures to ensure that no further steps are taken to sell the goods and properties held by the Claimant.187

In the Aeronutronic Overseas Services, Inc. Case188 the request for interim measures was first submitted to the tribunal by the claimants on July 26, 1984 in respect of Iranian municipal proceedings scheduled to take place in October 1984. Consistent with tribunal practice of considering the views of both parties whenever possible before deciding requests for interim protection, on 30 July 1984 the respondents were invited to reply to this request by 20 August 1984. On 20 August 1984, however, Iran requested a two-month extension in which to file its response. On 4 August 1984 the tribunal granted the extension until 8 October 1984 but also issued an order that

185

186 187

188

Order of 9 September 1983, 3 ibid. at p. 337. See also the Reading and Bates Corporation Case, Interim Award of 9 June 1983, 2 ibid. p. 401 ordering the claimant, in the light of scheduled hearing before the ICC, immediately to stay action brought before the ICC pending the tribunal’s decision on respondent’s request for interim measures; the Aeronutronic Overseas Services, Inc. Case, Interim Award, 27 Aug. 1984, 7 ibid. p. 214; the Ford Aerospace and Communications Corporation Case, Interim Award, 27 Apr. 1983, 2 ibid. p. 281. See references in Brower and Brueschke, op. cit. note 1 footnote 1061. (1983), 3 Iran-US CTR p. 331. See also the RCA Global Communication Disc, Inc. et al. Case (1983), 4 ibid. p. 5; the Rockwell International Systems, Inc. Case (1983), 2 ibid. p. 310. (1984), 7 ibid. p. 217.

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in view of the fact that the Claimant has been ordered to appear before the Public Court of Tehran on 20 October 1984, . . . it [is] necessary immediately to request the Government of Iran to move for a stay of the proceedings before the Public Court of Tehran until such time as the Tribunal renders a decision on the Claimant’s Motion based on the views of both parties.189

This case illustrates the Tribunal’s preference for affording the non-moving party an opportunity to respond but shows that when faced with unjustified delays in that response, it will not hesitate to issue temporary restraining measures if warranted. Apart from noting that the sufficient urgency of the request must be established to the satisfaction of the tribunal, one cannot identify further the details of the ground for the issuance of temporary restraining measures. For temporary stays of parallel proceedings, generally it seems sufficient that the requesting party alleges that the parallel proceedings involve a claim identical or substantially similar to a claim or counterclaim pending before the tribunal,190 or that the parallel proceeding involves the same issues of fact and law.191 For orders temporarily restraining the sale of property, immediate relief has been granted where it is clear that the other party intends to sell the goods and where the requesting party alleges that the goods are irreplaceable and that irreparable prejudice will result from a sale.192 Irreparable Prejudice or Harm The requirement that there be irreparable harm or prejudice primarily concerns the rights and interests of the parties. Requests alleging irreparable prejudice have generally related to the protection or disposition of property. Applications for relief have included requests for orders restraining the sale of goods, requests for conservation of goods, requests for permission to dispose of gods, requests for exportation of goods and requests for the return or release of goods or their entrustment to a third party.193

189

190

191

192

193

Ibid. at 219. This stay was later extended until the final determination of the case. See the Aeronutronic Overseas Services, Inc. Case (1985), 8 ibid. p. 75. See the Ford Aerospace and Communications Corporation Case (1983), 3 ibid. p. 384; the Touché Ross and Co. Case (1983), 3 ibid. p. 59. The Aeronutronic Overseas Services, Inc., Case (1984), 7 ibid. p. 217. Before granting temporary protection in that case, however, the tribunal first partially examined whether it possessed jurisdiction. See the Shipside Packing Company, Incorporated Case (1983), 3 ibid. p. 331 (temporary protection granted where claimant threatened to sell goods), the Behring International, Inc. Case (1983), 3 ibid. p. 173. See also Brower and Brueschke, op. cit. note 1 p. 226, text and footnotes 1068 to 1071.

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For example, relief relating to the conservation of goods was requested in the Behring International, Inc. Case. The tribunal granted interim relief in two awards in the case.194 In that case the tribunal decided in its first award upon certain interim measures to ensure that the respondents’ goods (numerous pieces of military equipment) would be moved from presently inadequate storage facilities provided by the claimant, Iran’s freight forwarder, to a more modern air-conditioned and humidity-controlled facility which was essential to conserve the goods and to permit an expert previously appointed by the tribunal to inventory the goods.195 In a subsequent award in the same case,196 the tribunal ordered the transfer of the goods to a warehouse that had been selected by the respondents, as the claimant had not moved the goods to a suitable part of its own facility. The tribunal reaffirmed its earlier finding that irreparable prejudice to the respondents’ asserted rights may result, if such a move were not made. The concept of irreparable prejudice was discussed as follows: irreparable prejudice has long been recognized as a basis for ordering provisional relief in international law. See, e.g., Case Concerning the Legal Status of the South-Eastern Territory of Greenland (Nor. v. Den.), 1932 P.C.I.J., Ser A/B, No. 48, p. 277 at 284 (order of 3 Aug.) (noting that ‘the Court has ruled that “the object of the measures of interim protection contemplated by the Statute of the Court is to preserve the respective rights of the parties pending the decision of the Court”, insofar, that is, as the damage threatening these rights would be irreparable in fact or in law’); Fisheries Jurisdiction Cases (U.K. v. Ice.), 1972 I.C.J. 12, 16 and (W. Ger. v. Ice.) 1972 I.C.J. 30, 34 (Interim Protection Orders of 17 Aug.) (‘the right of the Court to indicate provisional measures . . . presupposes that irreparable prejudice should not be caused to rights which are the subject of dispute’); Nuclear Tests Cases (Austral. v. Fr.); 1973 I.C.J. 99, 103 and (NZ. v. Fr.), 1973 I.C.J. 135, 139 (Interim Protection Orders of 22 June). A definition of ‘irreparable prejudice’ is elusive; however, the concept of irreparable prejudice in international law arguably is broader than the AngloAmerican law concept of irreparable injury. While the latter formulation requires a showing that the injury complained of is not remediable by an award of damages (i.e., where there is no certain pecuniary standard for the measure of damages, 43 C.J.S. Injunctions § 23), the former does not necessarily so require. See Anglo-Iranian Oil Co. Case (U.K. v. Iran), 1951 I.C.J. 89, 94 (Interim Protection Order of 5 July) (ordering, inter alia, joint control of contested oil company with profits to be deposited in escrow account. Arguably, rights sought to be protected susceptible to reparation by award of damages); Fisheries Jurisdiction Case (U.K. v. Ice.), 1972 I.C.J. 12, 13 (Interim Projection Order of 17 Aug.) (ordering Iceland not to enforce extension of exclusive fishing

194 195 196

See Aldrich, op. cit. note 1 pp. 150 ff. (1985), 8 Iran-US CTR at pp. 46–7. (1985), 8 ibid. at pp. 276–8.

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zone beyond pre-existing 12 mile limit. Arguably, any damage to U.K. fishing industry reparable by damages); Goldsworthy, Interim Measures of Protection in the International Court of Justice, 68 Am. J. Int’l L. 258, 269 (1974) (‘the [I.C.J.] test is not whether adequate compensation can ultimately be provided but whether “irreparable prejudice” would be occasioned to the rights of the applicant if interim protection is refused’).”197

Ultimately, in the Islamic Republic of Iran v. The United States of America,198 the tribunal held that the US had preserved its right in the Algiers Declarations to refuse to license exports to Iran of goods subject to its export control laws in effect prior to 14 November 1979 governing exports of military goods and, consequently, if the irreparable prejudice foreseen in the Behring International, Inc. Case was prejudice to Iran’s asserted right to take and use the goods, then there was no measurable prejudice as a practical matter, when it became clear that the USA would not permit their export. Interim measures were not ordered. At an early stage of the Behring International Inc. Case, the claimant had filed a notice of intent to sell the respondent’s goods held in the claimant’s warehouse and to place the proceeds of sale in a blocked account. The respondent asked for interim relief, pointing out that it continued to demand in a counterclaim that the goods be delivered to it. The tribunal ordered the claimant “to take whatever measures are necessary to assure that the sale of assets scheduled for 15 August 1983 is not carried out.”199 In several cases Iran sought restitution of its embassy and consular properties in the US and argued that the US was obligated by the Algiers Declarations to return such properties to Iran. Towards the end of 1983 Iran filed a request for interim relief in these cases to prevent the US from auctioning moveable properties of the Iranian embassy and consulates. It appears that the US had indicated an intention to auction some of these moveable properties as a means of obtaining compensation for its costs of caring for the properties. In an order of 18 January 1984, the tribunal denied the request on the ground that the circumstances did not appear to create a risk of irreparable prejudice, not capable of reparation by the payment of damages.200 On 31 January 1984, Iran filed a new request, accompanied by documentary evidence, including a more specific list of properties to be auctioned. While the United States asserted that it was making every effort to assure that objects of unique historical, artistic or cultural value were not among those consigned

197 198 199 200

See ibid. footnote 42 of the judgment. (1988), 19 Iran-US CTR p. 273. (1983), 5 ibid. at p. 173. Cases Nos. A4 and A15 (18 January 1984), 5 Iran-US CTR p. 112; Cases Nos. A4 and A15 (1 February 1984), 5 ibid. at p. 133.

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for sale, the tribunal took a different view and granted interim relief, noting that “it appears to the tribunal that the items on the list are irreplaceable”.201 The order was not limited to the items on the list furnished by Iran. The dispositif provided: The tribunal holds that the circumstances, as they are now presented to it, are such as to require the exercise of the tribunal’s power to order an interim measure of protection, pending the decision of the Full Tribunal in cases A-4 and A-15. The tribunal urgently requests the government of the United States of America to take all necessary and appropriate measures to prevent the sale of Iran’s diplomatic and consular properties in the United States which possess important historical, cultural, or other unique features, and which by their nature, are irreplaceable.202

In the light of the cases it appears on balance that irreparable damage will be regarded as a consequence, if the properties in question cannot be replaced by monetary compensation. If monetary compensation can make whole the injury, there can be no irreparable harm or prejudice.203 There are some cases, however, in which the tribunal has indicated a view that the availability of monetary compensation by itself does not preclude the possibility of irreparable harm or prejudice.204 This is not the better view, although it may be the case that the appreciation of irreparable harm is in any event a matter for the tribunal.205 In most cases where a party requests the return of goods, that request is among the claims or counterclaims at issue and consequently could not be the object of an interim measure of relief without thereby prejudging the merits of the case. In one case, however, the tribunal was confronted by a request with which it could deal. In Case No. A15,206 Iran brought to the tribunal numerous disputes with the US over interpretation of and compliance with the Algiers Declarations. Among those disputes was Iran’s request for return of its tangible properties in the US or, in the alternative, for compensation for the loss of such properties. Early in 1986 Iran filed a request for interim measures for protection in Case No. A15, alleging that the US government had removed two boxes of items from the warehouse where its goods that

201 202 203

204 205 206

Cases Nos. A4 and A15 (1 February 1984), 5 ibid. at p. 133. Ibid. See also Case No. B1 (1989), 22 ibid. at p. 109, the Boeing Company Case (1984), 5 ibid. p. 152 at pp. 153, 154, the United Technologies International, Inc. Case (1986), 13 ibid. p. 254. The Behring International Inc. Case (1985), 8 ibid. at pp. 276–8, footnote 42. See discussion in Brower and Brueschke, op. cit. note 1 p. 229. (1986), 13 Iran-US CTR p. 173.

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had been warehoused by Behring, its freight forwarder, had been moved. The US acknowledged the move and said that it was done because the items were classified for security reasons and could, under US law, be stored only in a warehouse certified for that purpose, which the warehouse in question was not. Pursuant to a request by the tribunal, the US gave an assurance that it recognized Iran’s title to the items in question and was holding them in Iran’s name and that it would not “change, modify or affect in any other way” those items. In denying Iran’s request the tribunal stated: It does not appear that the risk of any mishandling or unintentional modification of the equipment is at present greater than it would have been had the equipment remained in the Victory Van Warehouse. The Tribunal also cannot see how the mere removal of the two boxes and their storage in a different location would increase the risk of impairing the relief sought by Iran in the present case, i.e. return of the equipment to Iran. The Tribunal therefore does not find that irreparable harm was caused to Iran by this action.207

Protecting the Tribunal’s Jurisdiction Interim protection has been granted by the tribunal by stays of proceedings before other fora, most frequently fora in Iran, pending the termination of its own proceedings. In ordering such stays, the tribunal has been concerned primarily with protecting its own jurisdiction, authority and effectiveness in rendering a final award. The primary basis for such stays is to be found in Article VII(2) of the CSD. This provision states: Claims referred to the arbitration Tribunal shall, as of the date of filing of such claims with the Tribunal, be considered excluded from the jurisdiction of the courts of Iran, or of the United States, or of any other court.

Also Article IV(1) of the CSD in stipulating that all decisions and awards of the tribunal “shall be final” supports the exclusivity of the tribunal’s jurisdiction. On the basis of these provisions the tribunal has issued stays of parallel proceedings involving matters within its exclusive jurisdiction. Where jurisdiction is exclusive and a domestic suit is in derogation thereof, the mere initiating and pendency of that suit is inherently prejudicial and an order will, as a matter of course, be issued staying the domestic litigation. Early on the tribunal in the E-Systems, Inc. Case208 extended its authority to include staying parallel proceedings involving claims over which it did not

207 208

Ibid. at p. 175. On this case see Aldrich, op. cit. note 1 pp. 153–4. (1983), 2 Iran-US CTR p. 51 – Full Tribunal.

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have exclusive jurisdiction. The tribunal first determined that Article II(2)209 of the CSD and Principle B of the General Declaration210 did not confer upon it exclusive jurisdiction over Iranian claims that could have been brought as counterclaims before it but were not, and that Iran and Iranian parties were, therefore, free to initiate such claims before Iranian courts. In spite of that, the Full Tribunal requested the Government of Iran to stay parallel proceedings pending before the Public Court of Tehran, because the tribunal has an inherent power to issue such orders as may be necessary to conserve the respective rights of the parties and to ensure that this Tribunal’s jurisdiction and authority are made fully effective. Not only should it be said that the award to be rendered in this case by the Tribunal, which was established by intergovernmental agreement, will prevail over any decisions inconsistent with it rendered by Iranian or United States courts, but, in order to ensure the full effectiveness of the Tribunal’s decisions, the Government of Iran should request that actions in the Iranian Court be stayed until proceedings in this Tribunal have been completed.211

This decision does not warrant the conclusion that the mere presence of litigation in either Iran or the US, without more, is sufficient to warrant the tribunal’s issuing a stay.212 The issuance of a stay order will depend on the relationship of the parallel litigation to the claim before the tribunal. As stated in that case, interim measures will only be issued to ensure that the tribunal’s jurisdiction and authority are made fully effective. In order to ensure that it stays only those proceedings that threaten its jurisdiction or authority, the tribunal has required that two specific elements be present: the identity of the parties to both proceedings, and the identity of the subjectmatter in those proceedings. The first element requires that identical parties 209

210

211

212

Article II(2) of the CSD provides: “The Tribunal shall also have jurisdiction over official claims of the United States and Iran against each other arising out of contractual arrangements between them for the purchase and sale of goods and services.” Principle B of the General Declaration provides: It is the purpose of both parties, within the framework of and pursuant to the provisions of the two Declarations of the Government of the Democratic and Popular Republic of Algeria, to terminate all litigation as between the government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration. Through the procedures provided in the Declaration relating to the Claims Settlement Agreement, the United States agrees to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration. Ibid. at p. 57. On orders to stay litigation in national courts see Brower and Brueschke, op. cit. note 1 p. 229 ff., Aldrich, op. cit. note 1 pp. 142 ff. See, e.g., the Fluor Corporation Case (1986), 11 Iran-US CTR p. 296.

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are involved in both proceedings.213 This requirement has, nevertheless, been more broadly interpreted so as to include parties that, while not identical, are very closely related.214 In regard to the second element, the tribunal usually makes a preliminary determination as to whether the parallel litigation and the matter before the tribunal present common issues of law and fact before ordering a stay. As explained in the Linen, Fortinberry and Associates, Inc. Case, to prevent such inconsistent determinations and any concomitant prejudice to the rights of the parties, actions pending in the courts of the United States or Iran that are likely to present issues of law and fact must be stayed until the tribunal terminates or adjudicates finally the relevant claim before it.215

In that case, the tribunal determined that the lawsuit filed against the claimant in the Iranian courts arose out of the same contract and involved the same subject-matter as the claim pending before the tribunal. Consequently, the tribunal requested Iran to stay the proceedings in the Tehran courts.216 The requirement that the subject-matter be identical applies not only to matters presently before the tribunal, but also to matters that possibly could be brought before the tribunal in the future. In the E-Systems, Inc. Case,217 referred to above, the tribunal, in a case where the respondents had not yet filed their statements of defence and consequently had not indicated whether they intended to file any counterclaims but in which the respondents had commenced proceedings against the claimant in Iranian courts, the tribunal noted that the claims presented to the Iranian court arose out of the same contract as the claims before the tribunal and consequently would be admissible as counterclaims in the tribunal. The tribunal ordered a stay of proceedings in Iran pending completion of the proceedings in the tribunal.218 In the Component Builders, Inc. Case, the tribunal noted that it “has exercised such power to require a stay of Tehran court proceedings pending completion of Tribunal action where ‘it is obvious that the claim initiated

213 214

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See, e.g., the RCA Global Communications Disc, Inc. Case (1983–2), 4 ibid. p. 296. See, e.g., the Tadjer-Cohen Associates, Inc. Case (1985), 9 ibid. p. 302 (directing a stay of proceedings involving the assignor of a claim insofar as they related to the assignee, who was a party before the tribunal). (1985), 8 Iran-US CTR at p. 87. See also, e.g., the Harris International Telecommunications, Inc. Case, Partial Award (2 Nov. 1987), 17 ibid. at p. 50; the Westinghouse Electric Corporation Case, Interlocutory Award (12 Feb. 1987), 14 ibid. at pp. 106–7, 110; the Tadjer-Cohen Associates, Inc. Case (1985), 9 ibid. at p. 302; the Rockwell International Systems, Inc. Case, (1983), 2 ibid. p. 369. Interim Award (4 Feb. 1983), 2 ibid. p. 51. Ibid. at p. 57.

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before the Iran court had been admissible as a counterclaim before the Tribunal’, even though no counterclaim had been asserted.”219 In that case, the tribunal (Chamber Three), after making a comparison of the claims before the tribunal and the litigation in the Iranian court, concluded that the Iranian litigation sought adjudication of rights identical to the rights presented to the tribunal and ordered a stay of proceedings in Iran. The tribunal’s practice indicates that the requirement of identity of subjectmatter does not necessarily mean identity of claims. Thus, the tribunal has directed stays of proceedings brought by parties in other fora where the other proceedings involved the same subject-matter or issues of law and fact, even though that party had not asserted a counterclaim before the tribunal.220 It seems that parallel litigation is stayed particularly to avoid inconsistent results, and not merely to preserve the exclusivity of jurisdiction of claims filed before the tribunal. In the Paul Donin de Rosiere Case221 the respondent filed two separate requests for interim measures. The first request was for an order requiring the claimant to withdraw an action it had commenced in the courts or Basel, Switzerland, prior to the commencement of the proceeding at the tribunal. The second was for an order requiring the claimant to obtain a stay of a “hearing” scheduled to take place in the same action in the Basel Court of Appeal in the near future. The tribunal noted that the respondent, who sought the interim relief, “must discharge the burden of establishing the existence of . . . a threat to the Tribunal’s jurisdiction if it is to succeed in its present application for an order that those proceedings be withdrawn.”222 After examining the facts as presented by the parties, the tribunal came to the conclusion that the suit in Basel was not in violation of Article VII(2) of the CSD and denied the request for interim measures, because “the Tribunal can see no risk of grave or irreparable harm resulting to either party, or to the jurisdiction of this Tribunal, which would justify the granting of either of the measures currently sought” by the respondent.223 This case illustrates the 219

220

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Interim and Interlocutory Award (27 May 1985), 8 ibid. at p. 225, quoting the E-Systems Inc. Case, Interim Award (4 Feb. 1983), 2 ibid. at p. 55. See, e.g., the E-Systems, Inc. Case (4 Feb 1983), 2 ibid. p. 51 (same subject-matter); the Rockwell International Systems, Inc. Case, Interim Award (6 June 1983), 2 ibid. p. 369 (same legal and factual issues); the Tadjer-Cohen Associates, Inc. Case, Interim Award (11 Nov. 1985), 9 ibid. p. 302 (same subject-matter). Interim award (4 Dec 1986), 13 ibid. p. 193. Ibid. at p. 197. Ibid. at pp. 197–8. This case involved also an attachment of property. For another case, involving an attachment of property and in which a request for interim measures of relief was refused, see the Atlantic Richfield Co. Case, Interim Award (8 May 1985), 8 ibid. p. 179.

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proposition that, where the legal and actual issues in the parallel litigation do not overlap with the issues before the tribunal, the tribunal will deny the request for a stay.224 In the Fluor Corporation Case Iran, citing Article VII(2) of the CSD, filed a request for interim measures seeking to enjoin the claimant from commencing arbitration proceedings before the ICC. In rejecting the request for a stay, the tribunal stated: Although this provision (Article VII(2) of the CSD) may be interpreted to exclude recourse not only to courts but also to other arbitration fora, the Tribunal does not accept the view that a claimant is automatically barred from instituting a claim in another forum by the simple fact of having filed the same claim with this Tribunal, particularly when filing elsewhere might be necessary to preserve rights which might otherwise be time-barred. For if this Tribunal were to determine that it lacks jurisdiction it would be unjust to prevent a party thereafter from pursuing its claims in a forum that does have jurisdiction.225

In the Reading and Bates Corp. et al. Case, on the other hand, the tribunal did order a stay of proceedings in an ICC arbitration initiated by the claimants and allegedly involving the same claims. Despite the potential range of parallel proceedings covered by the exclusivity of the tribunal’s jurisdiction and the broad scope of its inherent powers, the tribunal has taken a cautious approach to ensuring the primacy of its jurisdiction over that of parallel proceedings. The simple fact that the tribunal has exclusive jurisdiction over a claim is, for example, an insufficient basis for enjoining the filing of claims in other fora. This approach of the tribunal is further evidenced by the fact that requests for interim relief concerning parallel proceedings, frequently couched in terms of requests for dismissal of those proceedings, have been successful only to the extent that the tribunal has directed that

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See also the RCA Global Communications Disc, Inc. Case (1983), 4 ibid. p. 5 (staying a proceeding in Iran that involved the same legal and factual issues as the claims before the tribunal). On the other hand, in the same case (1983), 4 ibid. p. 9, the tribunal refused to grant interim relief requesting that Iran be ordered to vacate a judgment obtained in a separate Tehran court proceeding, because that domestic litigation involved a dispute that arose out of separate contracts and involved parties who were not both parties to the case before the tribunal. While the tribunal has in this case on the facts refused to order the vacation of a judgment in the Iranian courts, it is not clear whether and when it will order the vacation of a judgment: see also the McHarg Case (1983), 7 ibid. p. 277 and (1986), 13 ibid. at p. 306. Interim Award (7 Aug. 1986), 11 ibid. at p. 297. See also the Atlantic Richfield Co. Case, Interim Award (1985), 8 ibid. p. 179, particularly at pp. 181–2. In the Reading and Bates Corp. Case the tribunal ordered a stay of ICC arbitration proceedings but later the case was settled; see Interim Award (9 June 1983), 1 ibid. p. 401, for the order of interim measures.

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the proceedings be stayed pending the final decision of the tribunal.226 In this manner, the interests of the party instituting the parallel proceedings in preserving its rights should jurisdiction before the tribunal fail, or should Iran not comply with its obligations to replenish the Security Account, are recognized. On the other hand, the tribunal’s interest in ensuring that any decision is not prejudiced by the results of parallel proceedings is also preserved.227 On a different point, in several cases the tribunal has been requested, when it issues a final award with respect to the case, to continue indefinitely orders for stays of proceedings in other fora. In response, the tribunal has stated in such awards that the other fora have no jurisdiction with respect to claims and counterclaims submitted to the tribunal and found by it to be within the jurisdiction of the tribunal, but it has declined to go further and issue permanent stay orders. Thus in the Questech, Inc. Case, the tribunal noted that it had ordered a stay of proceedings as interim relief, that this relief expired by its terms with the issuance of the Final Award, and that, despite the stay order, the Iranian court had proceeded to judgment. The tribunal then stated: the effect of the Tribunal’s assumption of its jurisdiction in the present case is that as of 30 March 1982, the date of the filing of the respondent’s counterclaims with the Tribunal, the Tehran court is no longer considered to have jurisdiction to deal with the subject-matter of the claim which the respondent brought before that court on 21 September 1982 (except for the part concerning social security premiums), and that the judgment entered into in the Respondent’s favour in the Tehran court was obtained from a court which had no jurisdiction over the case brought before it. While confirming this legal consequence of Article VII, paragraph 2, of the Claims Settlement Declaration and noting the Interim Award issued in this case, the Tribunal does not find a need or basis for the ordering of ‘continuing’ relief or any other relief beyond that previously granted.228

In the same Award229 the tribunal dealt in a similar manner with a request by the respondent that the claimant be ordered to withdraw its claims in an American court where proceedings had been stayed following conclusion of the Algiers Declarations. Similar dispositions were made in several other

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228 229

See, e.g., the Questech, Inc. Case (1983), 2 ibid. p. 96 (granting a stay in response to request for dismissal). See the Fluor Corporation Case (1986), 11 ibid. at p. 296 (denying request to enjoin claimant from instituting proceedings before the International Chamber of Commerce). (1985), 9 ibid. at p. 132. (1985), 9 ibid. at p. 136.

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awards where the other proceedings had been stayed and no judgment had been issued.230 Then in the Touché Ross and Co. Case, where a judgment had been obtained in Iran despite the tribunal’s stay order, the tribunal simply stated: The judgment of the General Court of Tehran of 21 May 1984 is without legal effect, and any further proceedings in pursuance of the claim on which that judgment was based will likewise be without legal effect.231

This formulation was somewhat different from the statement in the Questech, Inc. Case and was generally used thereafter by the tribunal in cases where Iranian parties had proceeded to judgment in Iranian courts in defiance of tribunal orders or interim awards requiring a stay of proceedings.232 Combination of Grounds for Interim Measures The various requirements for interim measures to be ordered discussed above may be combined in a single case. Thus, requests for interim protection could allege both threats to the tribunal’s jurisdiction and irreparable harm to the party’s rights. The nature of the issues involved was revealed in Cases Nos. A15(IV) and A24 ( The Islamic Republic of Iran v. The United States of America).233 The Full Tribunal first repeated the general principle that interim relief is to be granted, only if it is necessary to protect a party from irreparable harm or to avoid prejudice to the jurisdiction of the tribunal, and second added that this principle applied to intergovernmental cases. Iran had argued, in order to meet these requirements, that it was being subjected to “vexatious litigation tactics” and to “extraordinary discovery orders” in the US litigation.

230

231 232

233

See, e.g., the Aeronutronic Overseas Services, Inc. Case (1986), 11 ibid. at p. 246; the McHarg Case (1986), 13 ibid. at p. 306. (1985), 9 ibid. at p. 301. See, e.g., the Ford Aerospace and Communications Corp. Case (1987), 14 ibid. at p. 49; the Watkins-Johnson Co. et al. Case (1989), 22 ibid. at p. 253; the Component Builders, Inc. et al. Case (1989), 23 ibid. at p. 7 (no prior judgment, but the award said that ‘any continuance of the proceedings . . . would therefore be without legal effect’); the Rockwell International Systems, Inc. Case (1989), 23 ibid. at pp. 212–13. It may be noted also that in the last case referred to above the tribunal, in denying a related request, stated: Rockwell’s request that the Tribunal retain jurisdiction in this case to take further action should the Ministry not comply with this order is denied. That request concerns the execution of this Award. The Tribunal has no jurisdiction over disputes which may arise of non-compliance with this Award. (1989), 23 ibid. at p. 213. (1993), 29 ibid. p. 214. On the antecedents to this case which led to the claims in the case, see Brower and Brueschke, op cit. note 1 p. 235, note 1114.

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The tribunal made it clear that “injury that can be made whole by monetary relief does not constitute irreparable harm”234 and came to the conclusion that Iran had failed to demonstrate how these claims would lead to the infliction of irreparable harm on Iran. As a result, the Full Tribunal held that Iran had failed to show that an immediate stay of proceedings in the United States was necessary to avoid irreparable prejudice. In regard to the argument that there was a threat to the tribunal’s jurisdiction, the tribunal concluded that regardless of whether the US litigation was concluded before or after the Full Tribunal’s determination of Case No. A24, the Tribunal would be in a position to render an effective decision on Iran’s claim in that case. For example, if the United States litigation had not been concluded when the Full Tribunal decided Case No. A24 the tribunal would be in a position to decide whether the US was in violation of the Algiers Declarations in allowing the litigation to be revived and could at that time, assuming it were to find such a breach, take steps to bring about the termination of the US litigation and compensate Iran appropriately.235 In the same way, if the US litigation were concluded before Case No. A24 was decided, the tribunal would still be in a position to order the US to compensate Iran for any damages should it find the US to have been in breach. Therefore, the tribunal concluded that the continuation of the US litigation posed no threat to the jurisdiction of the tribunal to pronounce on the question whether the US had complied with the Algiers Declarations.236 Reopening a Case after the Issue of Interim Orders Where the tribunal has already denied a request for interim protection, the moving party may submit a subsequent request for interim measures in the same case. Then the tribunal has required that additionally there must be proof of new facts or changed circumstances if it is to examine the subsequent request. The situation arose in The Government of the Islamic Republic of Iran v. The Government of the United States of America (Cases Nos. A4 and A15(III)). In that case, the tribunal found that the first request from Iran for a stay failed to indicate any specific properties, the offer for sale or auction of which would have the result of creating a risk of irreparable prejudice, not capable of reparation by the payment of damages. The tribunal denied the request for

234 235 236

(1993), 29 Iran-US CTR at p. 218. Ibid. Ibid. at pp. 218 ff.

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interim relief,237 leaving open, however, the possibility that, if new facts were found to arise, Iran could make a new request for interim relief, specifically stating that its decision not to grant interim relief did not prevent the party which had made the request from making a fresh request in the same case based on new facts.238 Thereafter, on 31 January 1984, Iran filed another request for an interim order enjoining the US from auctioning moveable properties in Iran’s US embassy and consulates. Therein Iran identified specific exquisite, historical, and national properties which were scheduled to be auctioned in early February 1984. The tribunal decided that interim measures were necessary, basing itself on these new facts and on a statement submitted by the respondent which tended to support Iran’s claims that such properties were due to be sold. Consequently, the tribunal issued an interlocutory award in which it requested that “the Government of the United States of America . . . take all necessary and appropriate measures to prevent the sale of Iran’s diplomatic and consular properties in the United States which possess important historical, cultural, or other unique features, and which, by their nature, are irreplaceable.”239

Reopening Cases It is to be noted that the inherent jurisdictional power to review or reopen cases, which exists, as seen in Chapter 9, is always subject to augmentation or reduction by express provision in constitutive instruments of arbitral tribunals. On the other hand, the mere provision that judgments are “final” or “final and binding “ or “final and without appeal” does not take away from a tribunal its inherent jurisdiction to review. In the case of the Iran-US Claims Tribunal the Rules of the tribunal expressly provide for reopening and rehearing of a case where there is a request for interpretation, or rectification, or where claims presented had been omitted from the award. Article III(2) of the CSD, which contains the Compromis for the tribunal, states that the tribunal should adopt the UNCITRAL Rules. Thus, the Rules on reopening cases are a valid source of authority for the tribunal to reopen cases. The relevant sections of Articles 35, 36 and 37 of the Rules state as follows even though article IV of the CSD, which

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The Order of 18 January 1984, 5 ibid., p. 112 at p. 114. In this case, the claimant, the Government of Iran, submitted a request for an interim measure preventing the US from auctioning the moveable properties of the Iranian embassy and consulates in the US. Ibid. Interlocutory award (1 Feb. 1984), 5 Iran-US CTR at pp. 132–3.

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established the tribunal, provides that all decisions and awards of the tribunal shall be final and binding: Article 35 1. Within thirty days after the receipt of the award, either party, with notice to the other party, may request that the arbitral tribunal give an interpretation of the award. ... Article 36 1. Within thirty days after the receipt of the award, either party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors, or any errors of similar nature. The arbitral tribunal may within thirty days after the communication of the award make such corrections on its own initiative. . . . Article 37 1. Within thirty days after the receipt of the award, either party, with notice to the other party, may request the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. ...

However, it is not clear that the CSD, while virtually enacting its Rules for the tribunal, also intended to take away any inherent powers of jurisdiction the tribunal has which go beyond the powers referred to in Articles 35 to 37. It would, indeed, appear that such powers based on general principles of law have survived these provisions of the Rules. While the Rules refer to revision where the case is one of interpretation, rectification or omission to address a claim, it is conceivable that appropriately the tribunal has a broader inherent power to review under general principles of law, in view of the fact that the constitutive instruments do not state anything to the contrary. Some cases decided by the tribunal support this view that the scope of review available to the tribunal is not limited by the provision of the Rules (Articles 35, 36 and 37) but is broader under the general principles of law, which are applicable in the absence of exclusion in the constitutive instruments. Discovery of a New Fact There are two cases decided by the tribunal where the stand taken by it on the issue was part of the ratio decidendi of the case, so to speak. In the Ram International Industries, Inc. Case the tribunal made an extensive examination of the authorities, both judicial and textual. The tribunal concluded that: one requirement, namely, that an application for revision of an award “may be made only when it is based upon the discovery of some fact of such a nature as to be a decisive factor” follows closely the language of all reviewed legal provisions, judicial decisions and views of learned writers. Therefore, the Tribunal holds that for the purpose of a revision the new fact has to be decisive, in the

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sense that when placed alongside the other facts of the case, earlier assessed, it seriously upsets the balance, and consequently the conclusions drawn by the Tribunal.240

This statement taken in context was not limited to cases of fraud or corruption particularly. In the Harold Birnbaum Case the tribunal made it quite clear that there was no provision in the instruments of the tribunal for rearguing with a view to having the award reviewed or reasons for the award explained and that appeals were excluded. The tribunal then made this general statement: Where revisions are permitted, they are normally provided for in an express rule of procedure . . . There is not much room for reading implied powers into a contemporary bilateral arrangement; for its authors are aware of past experience. It is to be expected that today, two States that intended to allow the revision of awards rendered by a tribunal established pursuant to a treaty between them would do so by an unequivocal expression of their common will. Clearly Iran and the United States did not so provide in the Algiers Declarations. ... As noted, the final and binding force of an award does not necessarily exclude the possibility of a revision thereof. But the existence of express rules providing that the award is “final and binding”, coupled with the silence of the contracting Parties concerning the possibility of revision, makes it difficult to conclude that any inherent power to revise a final award exists. ... Although the Tribunal believes that, in the absence of exceptional circumstances, for example, allegations of fraud or perjury, it need not decide whether it has an inherent or implied power to revise its final and binding awards, it will nonetheless, for the sake of completeness, deal also with that part of the request which refers specifically to the Decision in Ram.241

The tribunal, first, did concede that in cases of fraud or perjury there was an inherent power to revise its decisions. Secondly, all it said was that it did not need to decide the question whether it had a broader inherent power than that, while not denying that one may exist. In the Ram International Industries, Inc. Case the tribunal did not limit its view of inherent powers to revise to cases of fraud or perjury, although in the Harold Birnbaum Case the tribunal said that in the former case the tribunal did so limit it.242 It is, 240

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(1993), 29 ibid. at p. 390. See also on this case Brower and Brueschke, op. cit. note 1 pp. 284 ff. (1995), 31 Iran-US CTR at pp. 289 ff. In some cases the tribunal had expressed the view obiter that the tribunal could not act outside the Rules to revise or review awards: the International Schools Services, Inc. Case (1987), 14 ibid. at p. 70, the American Bell International Inc. Case (1987) ibid. at p. 174. (1995), 31 ibid. at pp. 291–2. The tribunal in this case also cited other cases decided by the tribunal in which it had “reserved” its position: ibid. at p. 291.

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further, clear that in the former case the tribunal did expressly admit as a holding the possibility of review in the case of the presentation of a new fact that was decisive. But what is of greater importance is that in the conclusions reached in its judgment in the latter case it concluded after examining the facts that “quite apart from the absence of any allegation of fraud or perjury”, the alleged error is in no way “decisive” nor does it “seriously upset the balance” of the Award. . .”.243 The tribunal here conceded that fraud or perjury was not in issue but proceeded to examine the other allegation made relating to facts which would justify a revision and concluded that the error in question was not of a kind that would justify revision of its judgment. Does not this mean that it conceded that it had an inherent power to revise or review in certain circumstances (such as those alleged to exist in the case which did not involve fraud or perjury) but found on the facts that there was no cause for changing its earlier judgment? The Harold Birnbaum Case is, therefore, a possible authority, apart from the Ram Industries International, Inc. Case, that the tribunal has accepted the view that it had an inherent jurisdiction to review or revise, particularly in the context of newly discovered facts (as was made clear in the Ram Industries International, Inc. Case), even though it said it did not need to decide this point and expressed some doubts about the existence of such a power. The tribunal has made heavy weather of the fact that the Rules do not expressly permit review except as provided for in Articles 35, 36 and 37. This, however, reflects a possible misunderstanding of the situation. It is unnecessary to conclude that the CSD limited the jurisdictional powers of the tribunal, because the constitutive instruments virtually enact the Rules, so long as the CSD does not take away expressly what are inherent powers. An inherent jurisdictional power remains such a valid power, even if the Rules do not expressly recognize it.244 In view of the fact that particularly the power of revision on the discovery of a new fact (with certain safeguards) is within the inherent powers of an international arbitral tribunal, it is doubtful whether the tribunal’s rules could in the absence of express derogation in the constitutive instrument take away such power from the tribunal.245

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Ibid. at p. 292. On the permissibility of revision in general see Simpson and Fox, International Arbitration (1959) p. 242, Reisman, Nullity and Revision (1971) pp. 208–12, Carlston, The Process of International Arbitration (1972) pp. 57–8, 224–8, 232, Sandifer, Evidence before International Tribunals (1975) p. 426, E. Lauterpacht, Aspects of the Administration of International Justice (1991) p. 100. Such powers would be similar to that envisaged by Article 61 of the Statute of the ICJ and be modelled on the ICJ’s power.

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Absence of Consent to Agreed Settlement The Jean Cherafat Case originally involved a claim by Gloria Cherafat, individually and as a natural mother and next friend of her two children, who also were claimants. The tribunal had in 1985 terminated the proceedings in that case at the request of the claimants.246 Approximately three and one half years later, the father – joined by the two children (hereinafter the “applicants”) – argued that there had been no agreement to terminate the proceedings and requested the tribunal to reinstate the claim on the grounds of “error of municipal law,” “fraud” and “procedural impropriety”.247 In response to this request, the tribunal noted that the tribunal’s Rules did not provide for the reinstatement of claims that have been terminated. At the same time it said that it had never faced the question whether it had implied powers according to which, in exceptional cases, it could reinstate a terminated case. In addressing this question, the tribunal appears to have laid down a three-part test for the reinstatement of a terminated case. It said: in these circumstances any person requesting reinstatement would at the very least have to show prima facie that the Tribunal possesses such implied powers, that the individual circumstances would be such that they would be covered by such implied powers, if any, and that the request was timely made.248

Having said that, the tribunal stated, with regard to the question of implied powers, that it had based its termination order expressly upon Article 34(2) of the Tribunal Rules and that consequently “[i]n these circumstances the crucial requirement . . . is to show, prima facie, that the fact that [the claimants] did not object to the termination of proceedings cannot be justifiably equated with a consent to such termination because the circumstances of termination were such that the termination order cannot be meaningfully

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Order of 9 July 1985, in the Gloria J. Cherafat Case, Case No. 277. The decision to terminate the proceedings came in response to a submission from the children’s father requesting termination of the proceedings. Included in the request was a statement and supporting documents from the father that, pursuant to a divorce decree, separation agreement and a power of attorney issued by Gloria Cherafat, he owned all property rights relating to the claim in Case No. 277. Furthermore, he stated that he was the natural guardian of his minor children under Iranian law and that his custody and guardianship of the children also was stipulated in the divorce decree: see the Cherafat Case (1992), 28 Iran-US CTR at p. 217. The respondents did not object to the termination of the case, and the original claimants, i.e. Gloria Cherafat and the children, did not respond. Thereafter, the tribunal terminated the case pursuant to the tribunal Rules. See the account of this case in Brower and Brueschke, op. cit. note 1 pp. 252–4. (1992), 28 Iran-US CTR p. 216. Ibid.

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regarded as being based on consent.”249 After reviewing the applicants’ evidence, the tribunal concluded that the request fell short of establishing such a prima facie case. The tribunal specifically declined to decide whether it had an implied power to reinstate a case which had been terminated. However, the fact that it examined the facts on which the request for reinstatement was based and found that they did not establish the requirements for reinstatement seems to support the view that it considered that reinstatement was possible based on the required criteria. Fraud, Perjury and Corruption The question whether a case can be reopened on the ground of fraud, perjury or corruption has been addressed largely obiter by the Iran-US Claims Tribunal. The tribunal has never found that it had to entertain a legitimate claim to reopen a judgment on the ground of fraud or perjury but there were several occasions upon which the tribunal noted that a question existed whether it had an inherent or implied power to do so. In all but two cases the tribunal found it unnecessary to address that question. In the Dames and Moore Case the tribunal rejected a request by Iran that it reopen and set aside its earlier Award on the ground that it was, in part, based upon forged invoices and perjured testimony. The tribunal was not persuaded that there was any merit to the allegations and consequently found it unnecessary to decide whether it had any inherent or implied power to reopen and reconsider the case. However, it said: In the absence of an express grant of authority to the Tribunal to reopen and reconsider cases on the merits after issuance of an award, the question has been posed as to whether an “inherent power” to do so may exist “under exceptional circumstances”, at least where an award was based on forged documents or perjury. See Mark Dallal v. The Islamic Republic of Iran, Decision No. 30-149-1 (12 January 1984) and Henry Morris v. The Government of the Islamic Republic of Iran Decision No. 29-200-1 (16 Sept. 1983). The implied or inherent power of an international claims tribunal in this area is an issue which has been subjected to learned analysis and limited judicial scrutiny, with wholly inconsistent results. The instant request for reopening and reconsideration, however, falls well short of justifying any such effort to ascertain the precise balance struck

249

Ibid. at p. 221–2. Article 34(2) states: If, before the award is made, the continuation of the arbitral proceedings becomes unnecessary or impossible for any reason not mentioned in paragraph 1, the arbitral tribunal shall inform the parties of its intention to issue an order for the termination of the proceedings. The arbitral tribunal shall have the power to issue such an order unless a party raises justifiable grounds for objection.

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between finality of Tribunal dispositions, on the one hand, and the integrity of its processes on the other.”250

In the Harold Birnbaum Case the tribunal rejected a request for revision unconnected with fraud or perjury but noted that “in the absence of exceptional circumstances, for example, allegations of fraud or perjury, it need not decide whether it has an inherent or implied power to revise “awards which were final and binding”.251 The Iran-US Claims Tribunal has, thus, prevaricated and its statements are inconclusive either way in regard to revision or reopening for fraud or perjury (or corruption in general). The statements made by the Iran-US Claims Tribunal are obiter dicta in contrast to rationes decidendi. It may even be concluded that, insofar as that tribunal in the Dames and Moore Case addressed the evidence in concluding that the allegations of fraud and perjury were baseless, it impliedly reopened the case to make those findings and, thus, conceded that fraud and perjury were good grounds for reopening a case. If there was no inherent jurisdiction to reopen the case on the basis of fraud or perjury, the tribunal should simply not have examined the evidence of such fraud or perjury and dismissed the request for reopening, because it had no jurisdiction to entertain it. In any case, general principles of law and justice would seem to demand that such a jurisdiction exist. The result of reopening a case where there are allegations of fraud, perjury or corruption, needless to say, may be to reverse the award, modify it or confirm it. Rectification The Rules of the Iran-US Claims Tribunal refer in Article 36 to the power of the tribunal to reopen a case to rectify a judgment. This jurisdiction has never been questioned before that tribunal which invites the conclusion that the jurisdiction is inherent. The Rules of the tribunal merely recognize this jurisdiction and implement the procedures for invoking it. Article 36 of the Rules permits a party within thirty days of the receipt of the award to request the tribunal to “correct . . . any errors in computation, any decimal or typographical errors, or any errors of similar nature”. The statement of what kind of correction the jurisdiction relates to accurately reflects what the jurisdiction covers. The tribunal has rejected efforts to reargue issues decided in the award but in the Avco Corp. Case252 corrected a clerical error in the figures in one 250

251 252

(1985), 8 ibid. p. 117 (footnotes omitted). In the two cases referred to in the citation the tribunal had concluded that it found it unnecessary to examine the question whether it had inherent power to revise an award under exceptional circumstances. (1995), 31 ibid. p. 291. (1988), 19 ibid. p. 253.

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paragraph of the award. In the Houston Contracting Co. Case (Rectification)253 the tribunal exercised its jurisdiction to correct several computational errors that increased the amount awarded to the claimant by about $240,000, plus interest. In the Uiterwyk Corp., et al. Case (Rectification etc.)254 the tribunal exercised its jurisdiction to correct, at the request of the respondents, several computational errors. Interpretation In the case of the Iran-US Claims Tribunal the Rules of the tribunal in Article 35 enable either party in a case to request an interpretation of the award in the case. This article clearly reflects the view of the tribunal that it has the inherent jurisdiction to interpret its judgments. In fact in several cases requests for interpretation were made but the tribunal, while never disclaiming the jurisdiction to interpret, has found that there was no ambiguous language to interpret, it being its clear view that the jurisdiction to interpret could only be exercised where there was ambiguous language.255 In short a prima facie case must be made that there is an ambiguity in the dispositif, if jurisdiction is to be assumed. Interpretation has been understood to mean clarification. In the Uiterwyk Corp. et al. Case (Rectification etc.) the respondent in seeking an interpretation raised the argument that the sequestration of a certain amount was implied in the award. The tribunal held that the matter of sequestration had never been raised or argued in the original case, the award was quite clear and unambiguous and that the request for interpretation was an attempt to reargue the case which would not be permitted.256 In the Seaco, Inc. Case the arguments on which the request for interpretation was based referred to “procedural and legal errors”. The tribunal, while pointing out that there was no ambiguous language which required interpretation stated that the request amounted to an attempt to make an appeal from the previous judgment or secure its review which was not permitted.257 In the Paul Donin de Rosiere Case the request asked for a clarification of the term “status quo” used in the award. The tribunal again affirmed emphatically that the language of the

253 254 255

256 257

(1988), 20 ibid. p. 171. See also the Harold Birnbaum Case (1995), 31 ibid. p. 287. (1988), 19 ibid. p. 171. See, e.g., the Ford Aerospace and Communications Corporation Case (1986), 12 Iran-US CTR at p. 305, the Pepsico, Inc. Case (2) (1986), 13 ibid. at pp. 329–30, the Paul Donin de Rosiere Case (1987), 14 ibid. at p. 101, the Sedco, Inc., et al. Case (1987), 16 ibid. at p. 284, the Uiterwyk Corp., et al. Case (Retification etc.) (1988), 19 ibid. at p. 173. Ibid. (1987), 16 ibid. at pp. 283–4.

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award was quite clear and unambiguous and that the request was an attempt to reopen the case for reargument, which was not permissible.258 The inherent authority to interpret judgements of the tribunal is similar to the power given by Article 60 of its Statute to the ICJ to interpret its own judgments. Thus, what has been said elsewhere259 about the ICJ’s statutory jurisdiction to interpret its judgments must apply in principle also to the inherent jurisdiction of the tribunal. That is to say, the formulation of Article 60 in principle covers the content of the inherent jurisdiction as well. The emphasis placed on the need for the existence of “ambiguity” is to be noted. Conclusion The tribunal has concluded that it has the inherent power to reopen cases in the three instances referred to in Articles 35 to 37 of its Rules. Beyond that it has been somewhat equivocal as regards its inherent powers. The fact is that while expressing doubts, at the very most, about other inherent powers, such as the power to reopen cases upon the discovery of a new fact or for fraud, perjury or corruption, it has acted in its judgments in a way which would lead to the conclusion that it is of the view that it does have such inherent power. While it has generally said in the cases that it was unnecessary for it to decide whether it had the inherent power to reopen cases in other situations than those referred to in its Rules, it has taken the course of examining the facts before it and determining that without exception they did not warrant in any event the reopening of the cases, because the required elements for reopening were not present. That the facts were examined in order to establish whether the requirements for reopening were present is consistent with the assumption that it is possible that it does have other appropriate inherent powers to reopen cases as international arbitral tribunals in general have. In any event, the tribunal does appear to have indicated that an agreed termination of a case could be revoked by it and the case may be re-examined by it, if the consent involved had not been in reality given. Here again it has prevaricated, but has acted in a manner which leaves the impression that it would be ready to exercise the authority to reopen a case in an appropriate situation where the consent was found not to have been real. The tribunal has had no difficulty in conceding, implicitly perhaps, that it has the inherent power, recognized by its rules, to interpret judgments and rectify clerical and other errors in its judgments.

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(1987), 14 ibid. at p. 101. C.F. Amerasinghe, Jurisdiction of Specific International Tribunals (2009) pp. 191 ff.

Annex to Chapter Ten 1. Declaration of the Government of the Democratic and Popular Republic of Algeria (General Declaration), 19 January 1981 The Government of the Democratic and Popular Republic of Algeria, having been requested by the Governments of the Islamic Republic of Iran and the United States of America to serve as an intermediary in seeking a mutually acceptable resolution of the crisis in their relations arising out of the detention of the 52 United States nationals in Iran, has consulted extensively with the two governments as to the commitments which each is willing to make in order to resolve the crisis within the framework of the four points stated in the Resolution of November 2, 1980, of the Islamic Consultative Assembly of Iran. On the basis of formal adherences received from Iran and the United States, the Government of Algeria now declares that the following interdependent commitments have been made by the two governments: General Principles The undertakings reflected in this Declaration are based on the following general principles: A. Within the framework of and pursuant to the provisions of the two Declarations of the Government of the Democratic and Popular Republic of Algeria, the United States will restore the financial position of Iran, insofar as possible, to that which existed prior to November 14,1979. In this context, the United States commits itself to ensure the mobility and free transfer of all Iranian assets within its jurisdiction, as set forth in Paragraphs 4–9. B. It is the purpose of both parties, within the framework of and pursuant to the provisions of the two Declarations of the Government of the Democratic and Popular Republic of Algeria, to terminate all litigation as between the government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration. Through the procedures provided in the Declaration

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relating to the Claims Settlement Agreement, the United States agrees to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration. Point I: Non-Intervention in Iranian Affairs 1. The United States pledges that it is and from now on will be the policy of the United States not to intervene, directly or indirectly, politically or militarily, in Iran’s internal affairs. Points II And III: Return of Iranian Assets and Settlement of U.S. Claims 2. Iran and the United States (hereinafter “the parties”) will immediately select a mutually agreeable Central Bank (hereinafter “the Central Bank”) to act, under the instructions of the Government of Algeria and the Central Bank of Algeria (hereinafter “the Algerian Central Bank”) as depositary or the escrow and security funds hereinafter prescribed and will promptly enter into depositary arrangements with the Central Bank in accordance with the terms of this Declaration. All funds placed in escrow with the Central Bank pursuant to this Declaration shall be held in an account in the name of the Algerian Central Bank. Certain procedures for implementing the obligations set forth in this Declaration and in the Declaration of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States and the Government of the Islamic Republic of Iran (hereinafter “the Claims Settlement Agreement”) are separately set forth in certain Undertakings of the Government of the United States of America and the Government of the Islamic Republic of Iran with Respect to the Declaration of the Democratic and Popular Republic of Algeria. 3. The depositary arrangements shall provide that, in the event that the Government of Algeria certifies to the Algerian Central Bank that the 52 U.S. nationals have safely departed from Iran, the Algerian Central Bank will thereupon instruct the Central Bank to transfer immediately all monies or other assets in escrow with the Central Bank pursuant to this Declaration, provided that at any time prior to the making of such certification by the Government of Algeria, each of the two parties, Iran and the United States, shall have the right on seventy-two hours notice to terminate its commitments under this Declaration. If such notice is given by the United States and the foregoing certification is made by the Government of Algeria within the seventy-two hour period of notice, the Algerian Central Bank will thereupon instruct the Central Bank to transfer such monies and assets. If the

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seventy-two hour period of notice by the United States expires without such a certification having been made, or if the notice of termination is delivered by Iran, the Algerian Central Bank will thereupon instruct the Central Bank to return all such monies and assets to the United States, and thereafter the commitments reflected in this Declaration shall be of no further force and effect. Assets in the Federal Reserve Bank 4. Commencing upon completion of the requisite escrow arrangements with the Central Bank, the United States will bring about the transfer to the Central Bank of all gold bullion which is owned by Iran and which is in the custody of the Federal Reserve Bank of New York, together with all other Iranian assets (or the cash equivalent thereof) in the custody of the Federal Reserve Bank of New York, to be held by the Central Bank in escrow until such time as their transfer or return is required by Paragraph 3 above. Assets in Foreign Branches of U.S. Banks 5. Commencing upon the completion of the requisite escrow arrangements with the Central Bank, the United States will bring about the transfer to the Central Bank, to the account of the Algerian Central Bank, of all Iranian deposits and securities which on or after November 14, 1979, stood upon the books of overseas banking offices of U.S. banks, together with interest thereon through December 31, 1980, to be held by the Central Bank, to the account of the Algerian Central Bank, in escrow until such time as their transfer or return is required in accordance with Paragraph 3 of this Declaration. Assets in U. S. Branches of U. S. Banks 6. Commencing with the adherence by Iran and the United States to this Declaration and the Claims Settlement Agreement attached hereto, and following the conclusion of arrangements with the Central Bank for the establishment of the interest-bearing Security Account specified in that Agreement and Paragraph 7 below, which arrangements will be concluded within 30 days from the date of this Declaration, the United States will act to bring about the transfer to the Central Bank, within six months from such date, of all Iranian deposits and securities in U.S. banking institutions in the United States, together with interest thereon, to be held by the Central Bank in escrow until such time as their transfer or return is required by Paragraph 3. 7. As funds are received by the Central Bank pursuant to Paragraph 6 above, the Algerian Central Bank shall direct the Central Bank to (l) transfer one-half of each such receipt to Iran and (2) place the other half in a special interest-bearing Security Account in the Central Bank, until the balance in the Security Account has reached the level of U.S.$l billion. After the

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U.S.$1 billion balance has been achieved, the Algerian Central Bank shall direct all funds received pursuant to Paragraph 6 to be transferred to Iran. All funds in the Security Account are to be used for the sole purpose of securing the payment of, and paying, claims against Iran in accordance with the Claims Settlement Agreement. Whenever the Central Bank shall thereafter notify Iran that the balance in the Security Account has fallen below U.S.$500 million, Iran shall promptly make new deposits sufficient to maintain a minimum balance of U.S.$500 million in the Account. The Account shall be so maintained until the President of the arbitral tribunal established pursuant to the Claims Settlement Agreement has certified to the Central Bank of Algeria that all arbitral awards against Iran have been satisfied in accordance with the Claims Settlement Agreement, at which point any amount remaining in the Security Account shall be transferred to Iran. Other Assets in the U.S. and Abroad 8. Commencing with the adherence of Iran and the United States to this Declaration and the attached Claims Settlement Agreement and the conclusion of arrangements for the establishment of the Security Account, which arrangements will be concluded within 30 days from the date of this Declaration, the United States will act to bring about the transfer to the Central Bank of all Iranian financial assets (meaning funds or securities) which are located in the United States and abroad, apart from those assets referred to in Paragraphs 5 and 6 above, to be held by the Central Bank in escrow until their transfer or return is required by Paragraph 3 above. 9. Commencing with the adherence by Iran and the United States to this Declaration and the attached Claims Settlement Agreement and the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will arrange, subject to the provisions of U.S. law applicable prior to November 14, 1979, for the transfer to Iran of all Iranian properties which are located in the United States and abroad and which are not within the scope of the preceding paragraphs. Nullification of Sanctions and Claims 10. Upon the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will revoke all trade sanctions which were directed against Iran in the period November 4, 1979, to date. 11. Upon the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will promptly withdraw all claims now pending against Iran before the International Court of Justice and will thereafter bar and preclude the prosecution against Iran of any pending or future claim of the United States or a United States national

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arising out of events occurring before the date of this Declaration related to (A) the seizure of the 52 United States nationals on November 4, 1979, (B) their subsequent detention, (C) injury to the United States property or property of the United States nationals within the United States Embassy compound in Tehran after November 3, 1979, and (D) injury to the United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran. The United States will also bar and preclude the prosecution against Iran in the courts of the United States of any pending or future claim asserted by persons other than the United States nationals arising out of the events specified in the preceding sentence. Point IV: Return of the Assets of the Family of the Former Shah 12. Upon the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will freeze, and prohibit any transfer of, property and assets in the United States within the control of the estate of the former Shah or of any close relative of the former Shah served as a defendant in U.S. litigation brought by Iran to recover such property and assets as belonging to Iran. As to any such defendant, including the estate of the former Shah, the freeze order will remain in effect until such litigation is finally terminated. Violation of the freeze order shall be subject to the civil and criminal penalties prescribed by U.S. law. 13. Upon the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will order all persons within U.S. jurisdiction to report to the U.S. Treasury within 30 days, for transmission to Iran, all information known to them, as of November 3, 1979, and as of the date of the order, with respect to the property and assets referred to in Paragraph 12. Violation of the requirement will be subject to the civil and criminal penalties prescribed by U.S. law. 14. Upon the making by the Government of Algeria of the certification described in Paragraph 3 above, the United States will make known, to all appropriate U.S. courts, that in any litigation of the kind described in Paragraph 12 above the claims of Iran should not be considered legally barred either by sovereign immunity principles or by the act of state doctrine and that Iranian decrees and judgments relating to such assets should be enforced by such courts in accordance with United States law. 15. As to any judgment of a U.S. court which calls for the transfer of any property or assets to Iran, the United States hereby guarantees the enforcement of the final judgment to the extent that the property or assets exist within the United States.

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16. If any dispute arises between the parties as to whether the United States has fulfilled any obligation imposed upon it by Paragraphs 12–15, inclusive, Iran may submit the dispute to binding arbitration by the tribunal established by, and in accordance with the provisions of the Claims Settlement Agreement. If the tribunal determines that Iran has suffered a loss as a result of a failure by the United States to fulfill such obligation, it shall make an appropriate award in favor of Iran which may be enforced by Iran in the courts of any nation in accordance with its laws. Settlement of Disputes 17. If any other dispute arises between the parties as to the interpretation or performance of any provision of this Declaration, either party may submit the dispute to binding arbitration by the tribunal established by, and in accordance with the provisions of, the Claims Settlement Agreement. Any decision of the tribunal with respect to such dispute, including any award of damages to compensate for a loss resulting from a breach of this Declaration or the Claims Settlement Agreement, may be enforced by the prevailing party in the courts of any nation in accordance with its laws. Initialed on January 19, 1981 by Warren M. Christopher Deputy Secretary of State of the Government of the United States By virtue of the powers vested in him by his Government as deposited with the Government of Algeria

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2. Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran (Claims Settlement Declaration), 19 January 1981 The Government of the Democratic and Popular Republic of Algeria, on the basis of formal notice of adherence received from the Government of the Islamic Republic of Iran and the Government of the United States of America, now declares that Iran and the United States have agreed as follows: Article I Iran and the United States will promote the settlement of the claims described in Article II by the parties directly concerned. Any such claims not settled within six months from the date of entry into force of this Agreement shall be submitted to binding third-party arbitration in accordance with the terms of this Agreement. The aforementioned six months’ period may be extended once by three months at the request of either party. Article II 1. An international arbitral tribunal (the Iran-United States Claims Tribunal) is hereby established for the purpose of deciding claims of nationals of the United States against Iran and claims of nationals of Iran against the United States, and any counterclaim which arises out of the same contract, transaction or occurrence that constitutes the subject-matter of that national’s claim, if such claims and counterclaims are outstanding on the date of this Agreement, whether or not filed with any court, and arise out of debts, contracts (including transactions which are the subject of letters of credit or bank guarantees), expropriations or other measures affecting property rights, excluding claims described in Paragraph 11 of the Declaration of the Government of Algeria of January 19, 1981, and claims arising out of the actions of the United States in response to the conduct described in such paragraph, and excluding claims arising under a binding contract between the parties specifically providing that any disputes thereunder shall be within the sole jurisdiction of the competent Iranian courts, in response to the Majlis position. 2. The Tribunal shall also have jurisdiction over official claims of the United States and Iran against each other arising out of contractual arrangements between them for the purchase and sale of goods and services. 3. The Tribunal shall have jurisdiction, as specified in Paragraphs 16–17 of the Declaration of the Government of Algeria of January 19, 1981, over

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any dispute as to the interpretation or performance of any provision of that Declaration. Article III 1. The Tribunal shall consist of nine members or such larger multiple of three as Iran and the United States may agree are necessary to conduct its business expeditiously. Within ninety days after the entry into force of this Agreement, each government shall appoint one-third of the members. Within thirty days after their appointment, the members so appointed shall by mutual agreement select the remaining third of the members and appoint one of the remaining third President of the Tribunal. Claims may be decided by the full Tribunal or by a panel of three members of the Tribunal as the President shall determine. Each such panel shall be composed by the President and shall consist of one member appointed by each of the three methods set forth above. 2. Members of the Tribunal shall be appointed and the Tribunal shall conduct its business in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL) except to the extent modified by the Parties or by the Tribunal to ensure that this Agreement can be carried out. The UNCITRAL rules for appointing members of three-member tribunals shall apply mutatis mutandis to the appointment of the Tribunal. 3. Claims of nationals of the United States and Iran that are within the scope of this Agreement shall be presented to the Tribunal either by claimants themselves or, in the case of claims of less than $250,000, by the government of such national. 4. No claim may be filed with the Tribunal more than one year after the entry into force of this Agreement or six months after the date the President is appointed, whichever is later. These deadlines do not apply to the procedures contemplated by Paragraphs 16 and 17 of the Declaration of the Government of Algeria of January 19, 1981. Article IV 1. All decisions and awards of the Tribunal shall be final and binding. 2. The President of the Tribunal shall certify, as prescribed in Paragraph 7 of the Declaration of the Government of Algeria of January 19, 1981, when all arbitral awards under this Agreement have been satisfied. 3. Any award which the Tribunal may render against either government shall be enforceable against such government in the courts of any nation in accordance with its laws.

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Article V The Tribunal shall decide all cases on the basis of respect for law, applying such choice of law rules and principles of commercial and international law as the Tribunal determines to be applicable, taking into account relevant usages of the trade, contract provisions and changed circumstances. Article VI 1. The seat of the Tribunal shall be The Hague, The Netherlands, or any other place agreed by Iran and the United States. 2. Each government shall designate an Agent at the seat of the Tribunal to represent it to the Tribunal and to receive notices or other communications directed to it or to its nationals, agencies, instrumentalities, or entities in connection with proceedings before the Tribunal. 3. The expenses of the Tribunal shall be borne equally by the two governments. 4. Any question concerning the interpretation or application of this Agreement shall be decided by the Tribunal upon the request of either Iran or the United States. Article VII For the purpose of this Agreement: 1. A “national” of Iran or of the United States, as the case may be, means (a) a natural person who is a citizen of Iran or the United States; and (b) a corporation or other legal entity which is organized under the laws of Iran or the United States or any of its states or territories, the District of Columbia or the Commonwealth of Puerto Rico, if, collectively, natural persons who are citizens of such country hold, directly or indirectly, an interest in such corporation or entity equivalent to fifty percent or more of its capital stock. 2. “Claims of nationals” of Iran or the United States, as the case may be, means claims owned continuously, from the date on which the claim arose to the date on which this Agreement enters into force, by nationals of that state, including claims that are owned indirectly by such nationals through ownership of capital stock or other proprietary interests in juridical persons, provided that the ownership interests of such nationals, collectively, were sufficient at the time the claim arose to control the corporation or other entity, and provided, further, that the corporation or other entity is not itself entitled to bring a claim under the terms of this Agreement. Claims referred to the arbitration Tribunal shall, as of the date of filing of such claims with the Tribunal, be considered excluded from the jurisdiction of the courts of Iran, or of the United States, or of any other court.

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3. “Iran” means the Government of Iran, any political subdivision of Iran, and any agency, instrumentality, or entity controlled by the Government of Iran or any political subdivision thereof. 4. The “United States” means the Government of the United States, any political subdivision of the United States, and any agency, instrumentality or entity controlled by the Government of the United States or any political subdivision thereof. Article VIII This Agreement shall enter into force when the Government of Algeria has received from both Iran and the United States a notification of adherence to the Agreement. Initialed on January 19, 1981 by Warren M. Christopher Deputy Secretary of State of the Government of the United States By virtue of the powers vested in him by his Government as deposited with the Government of Algeria

Index Ad hoc Tribunals: see International Tribunals Adjudication, Submission to 4–13 Adjudicatory Dispute Settlement: see International Adjudicatory Dispute Settlement Adjudicatory Methods: see Dispute Settlement, International Adjudicatory Admissibility: see Receivability Agreed Settlement: see Iran–U.S. Claims Tribunal Agreement: see Consent, Convention, Forum Prorogatum Alabama Arbitration 24 Algiers Accords 268–77 Amerasinghe, Diplomatic Protection 99 Annulment: see Reopening Cases Appeal: see Reopening Cases, Jurisdiction vis-à-vis Arbitral Tribunals: see International Tribunals Arbitration, International, in general 4–17, 185 development of 4–7 Greek city states and 4–5 history 4–7 institutionalized 38–9 interim measures in 130–45 interpretation in 57–67 Jay Treaties and 7, 24 Middle Ages 5–6 nation states and 6 res judicata and: see Res Judicata revision and: see Reopening Cases, Jurisdiction vis-à-vis Awards on Agreed Terms 238–9 Binding Force: see Finality Claims Commissions 7, 101, 123–6 Clause Contraire: see Compétence de la Compétence Compétence 52, 69–94, 95, 98, 199–242 absence of object and: see herein mootness

constitution of tribunal and: see Constitution of Tribunal ex officio powers: see herein proprio motu powers forum prorogatum and: see Forum Prorogatum fundamental limitations on 85–92 identifying matters of 76–7 interest and 96–7 judgment on, and res judicata 74–5 legal dispute and 86 limitations on 85–92 mootness and 87–8 See also Mootness primary 69, 70, 82–5 proof of 93–4 proprio motu powers 72 ratione materiae 199, 225–39 ratione personae 199, 207–25 ratione temporis 199, 200–7 Rule in Monetary Gold Case and: see Monetary Gold Case, Rule in sources of 19 See also Consent; Constitution of Tribunal; Intervention; Iran–U.S. Claims Tribunal Compétence de la Compétence 23–46, 120 arbitration and 23–46 clause contraire 29, 33–40 common will and 27–30 conflict of interest and 44–6 explanation of 26–30 finality of determination of 41–2 history of 23–5 inherent jurisdiction and 28–30 judicial organs and 27–30 limitations on 33–40 other tribunals and 42–4 proprio motu powers 40–1 rationale of 26–30 See also Interpretation Compétence, Fundamental Limitations on: see Fundamental Limitations on Compétence Consent 9, 47–56, 101

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arbitration and 9, 47–56 form of 50–1 forum prorogatum and: see herein subsequent conduct ICSID Convention and 50, 52, 53, 54 individuals and 53–4 inherent jurisdiction and 54–5 ius cogens and 55–6 limits of: see herein parameters of parameters of 55–6 requirements for effective 49–53 subsequent agreement and 48 subsequent conduct and 51–3 two step 49–50 unwaivable limitations and 55–6 See also Forum Prorogatum; ICSID; Intervention; Iran–U.S. Claims Tribunal; Jurisdiction Constitution of Tribunal 88–9 Convention, Vienna, on Treaties (1969) 59–60 Counterclaims 232–8 Corporations: see Nationality of Claims Corruption: see Fraud; Iran–U.S. Claims Tribunal; Reopening Cases, Jurisdiction vis-à-vis CSD 225–8, 274–7 Declarations of the Government of the Democratic and Popular Republic of Algeria (2) 268–71 Diplomatic Protection 95–9, 109 Diplomatic Protection (Amerasinghe) 99 Dispute Settlement, International Adjudicatory 4–7 arbitration and 4–7 Disputes, International 3 Dominant Nationality: see Nationality of Claims Dual Nationality: see Nationality of Claims Estoppel

100–17

Finality 167–74 Finality of Judgments: see Judgments, Finality of Forum Prorogatum 72–4, 78 arbitration and 72–4, 78 compétence and 72–4 See also Consent; Jurisdiction Fraud: see Iran–U.S. Claims Tribunal; Reopening Cases, Jurisdiction vis-à-vis Fundamental Limitations on Compétence: see Ius Cogens GA 30 Good Faith

114–17

Hague Conventions (1899–1907) 30, 31

8–9, 25,

ICC3 136 ICJ 47, 48, 50, 64–7, 71–2, 81–2, 86–8, 89–92, 107, 108, 132–4, 137–8, 139, 140, 142–4, 149, 150, 168–9, 183, 184, 185, 186 Monetary Gold Case, rule in 89–92 See also Consent; Jurisdiction ICSID 3, 31–2, 48, 49–50, 51, 52, 54, 55, 101–2, 138–9, 141–2, 144, 151, 153, 184, 187–91, 192–5 See also Consent; Interpretation; Jurisdiction; Remedies; Reopening Cases, Jurisdiction vis-à-vis ICSID Convention 31–2, 48, 49–50, 51, 52, 54–5, 69, 101–2, 111–12, 125, 131, 138–9, 141–2, 144, 151, 153, 168, 184, 187–91, 192–5 See also ICSID ILC 30 Inadmissibility: see Receivability Incidental Jurisdiction: see Interim Measures; Intervention; Jurisdiction Indirect Claims: see Iran–U.S. Claims Tribunal Inherent Jurisdiction: see Consent; Compétence de la Compétence; Remedies; Reopening Cases, Jurisdiction vis-à-vis Inherent Powers: see Compétence de la Compétence; Consent; Iran–U.S. Claims Tribunal; Jurisdiction; Remedies; Reopening Cases, Jurisdiction vis-à-vis Injunctions, Negative: see Negative Injunctions Institutionalized Tribunals: see International Tribunals Interest 86–7 Interest, Conflict of: see Constitution of Tribunal; Compétence de la Compétence Interests: see Local Remedies, Exhaustion of Interim Measures 130–45, 199, 243–58 arbitration and 130–45 basic jurisdiction for 130–8 findings of fact 140 irreparable prejudice and 140, 141, 247–51 orders of, legal effect 130, 142–5 preserving rights and 138–40, 141 prima facie test and 134–8 principles of jurisdiction 130, 138–42 urgency and 140, 244–7 International Adjudicatory Dispute Settlement: see Dispute Settlement, International Adjudicatory International Arbitration: see Arbitration, International

Index International Courts: see International Tribunals International Disputes: see Disputes, International International Tribunals ad hoc 6, 13, 47 arbitral 4–17 established: see herein standing International Tribunals institutionalized 13 See also ICSID international personality of 15 law applied 11 procedure 12 representation before 11, 14 standing 3, 6–7 See also Arbitration; Compétence de la Compétence; Jurisdiction; Remedies International Tribunals, Standing: see International Tribunals Interpretation 57–67, 70, 266–7 ambiguity in 57–9 compétence and 57–67 compétence de la compétence and 23–46 contra proferentem 60, 63–5 effective approach in 59–61 functional approach in 59–61 general principles of 58–9 general rule of 57–8 good faith and 58, 62 ICSID and 54, 55–7 jurisdictional clauses, of 57–67 liberal 61–2 meaning in context for: see herein ordinary meaning object and purpose in 58–9 ordinary meaning in 58–9 presumptions of 58 restrictive 59–63 sovereignty and 65–7 subsequent practice and 58 supplementary means of 58–9 surrounding circumstances and 59 See also Iran–U.S. Claims Tribunal; Compétence de la Compétence; Remedies; Reopening Cases, Jurisdiction vis-à-vis Interpretation of Judgments: see Reopening Cases, Jurisdiction vis-à-vis Intervention 121–30 consent of principal parties and 121, 122–6 individuals and 124–5 judicial interest: see herein legitimate interest legal interest: see herein legitimate interest legitimate interest for 124–7

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moral interest for: see herein legitimate interest object of 127–9 other requirements and 121 scope and procedures of 127–30 time for 129–30 See also Incidental Jurisdiction; Jurisdiction Investment 59–60 Iran–U.S. Claims Tribunal 47, 48, 51, 52, 54, 55, 62–3, 69, 78–9, 84, 97–8, 125–6, 131, 132, 133, 136–7, 140–2, 144–5, 151, 157, 168, 182, 183, 185, 186, 199–277 absence of consent to agreed settlement 263–4 admissibility before 199, 239–44 Article II(1), Claims Settlement Declaration 225–8 availability of other remedies 240 awards on agreed terms 208–9 beneficial ownership 216–17 combination of grounds for interim measures 257–8 compétence of 78–9, 84, 199, 239 compétence ratione materiae 199, 225–39 compétence ratione personae 199, 207–25 compétence ratione temporis 199, 200–7 control 218–21 controlling ownership 218–21 corruption and: see herein fraud and corruption counterclaims 232–8 discovery of a new fact 260–2 failure to state a cognizable claim 242 fraud and corruption before 264–5 hostages and popular movements exclusion 229–31 incidental jurisdiction: see herein interim measures indirect claims 214–17 interim measures and 140–1, 199, 243–58 interpretation by 266–7 irreparable prejudice or harm 247–51 political and non-justiciable questions 241–2 primary jurisdiction 199–242 protecting the tribunal’s jurisdiction 251–7 rectification by 265–6 respondent 217–21 review by 199, 258–67 special classes of claims 220–3 standing 223–5 urgency 244–7

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Index

Irresponsible Prejudice Ius Cogens 85–92 See also Remedies Jay Treaties 7, 24, 150 Judgment, Declaratory: see Remedies; Waiver Judgments, Finality of 167–74 preliminary points 172–3 See also Compétence de la Compétence; Reopening Cases, Jurisdiction vis-à-vis Judgments, Interpretation of: see Interpretation; Reopening Cases, Jurisdiction vis-à-vis Judgements, Revision of: see Revision of Judgments Judicial Settlement: see Dispute Settlement, International Adjudicatory Jurisdiction 23–46, 69–94 basic: see herein primary constitution of tribunal and 88–9 discretion and 92–3 forum prorogatum: see Forum Prorogatum incidental 32, 119–45 inherent 28–30 mootness and: see Mootness political questions 241–2 primary 82–5, 199–242 proof of 93–4 revision and 173 See also Admissibility; Compétence; Consent; Constitution of Tribunal; Forum Prorogatum; ICSID; Compétence de la Compétence; Receivability Jurisdiction, Incidental: see Incidental Jurisdiction Jurisdiction. Inherent: see Inherent Jurisdiction Jurisdictional Clauses, Interpretation of: see Interpretation Jurisdiction of International Tribunals (Amerasinghe) 3, 18 Jurisdiction of Specific International Tribunals (Amerasinghe) 18–19 Legal Interest: see Interest Local Remedies, Exhaustion of 95–6, 110 accessibility of remedies and: see herein availability of remedies adequacy of remedies and 99 availability of remedies and 99 burden of proof in relation to 100 continuing condition and 100 continuing situation and 100 direct injury and 99 effectiveness of remedies and 99

estoppel and 100, 114–17 final decision and 100 interests and 99 jurisdictional connection and 99 limitations on 100 normal use and 99 obvious futility and 100, 110 procedural nature of rule of 100 procedural resources in relation to 100 raising objections based on 100 raising of arguments and 100 scope of rule of 99 substantive issues and 100 time for 100 time to raise objection based on: see herein raising objections based on waiver and 96, 100, 102 Local Remedies, Objections based on: see Local Remedies, Exhaustion of Local Remedies in International Law (Amerasinghe) 99–100 Local Remedies, Rule of: see Local Remedies, Exhaustion of MIGA 111–12 Mixed Claims Commissions: see Claims Commissions MNC: see ICSID Model Arbitration Rules (UNCITRAL) 125–6 Monetary Gold Case, Rule in 55–6, 89–92 Mootness 87–8 See also Compétence; Forum Prorogatum; Jurisdiction Multiple Nationality: see Nationality of Claims NAFTA 125 Nationality: see Nationality of Claims Nationality, Continuous: see Nationality of Claims Nationality, Dominant: see Nationality of Claims Nationality, Dual: see Nationality of Claims Nationality, Effective: see Nationality of Claims Nationality, Multiple: see Nationality of Claims Nationality of Claims 98–9, 207–17 assignment 214 continuous nationality and 99 control and 284 corporations: see herein juridical persons determination of nationality for 99, 208 dominant nationality and 207–17 dual nationality for 99, 207–17

Index effective link and 99 effective nationality and: see herein dominant nationality indirect claims 214–17 juridical persons and 99, 209–12 multiple: see herein dual nationality Negative Injunctions: see Remedies Nullity: see Annulment; Reopening Cases. Jurisdiction vis-à-vis Nullity, Partial: see Annulment; Reopening Cases, Jurisdiction vis-à-vis Objections to Receivability: see Receivability Partial Nullity: see Nullity, Partial PCA 48 PCIJ 57, 64–7, 139, 140, 150, 184, 185 Precedent 15–17 Procedure, Rules of 125 See also Jurisdiction Proof, Burden of 93–4 See also Local Remedies, Exhaustion of Proprio Motu Powers: see Compétence; Incidental Jurisdiction; Jurisdiction; Compétence de la Compétence Protection, Diplomatic: see Diplomatic Protection Provisional Measures: see Interim Measures Receivability 52–3, 71, 76–7, 95–117, 199, 239–44 estoppel and: see herein waiver grounds for rejecting: see herein objections to matters ratione personae and 97–8 objections to 96, 97–100 res judicata and 97 time to raise objections to 117 waiver (estoppel) and 96 See also Iran–U.S. Claims Tribunal; Jurisdiction; Local Remedies, Exhaustion of; Nationality of Claims Receivability, Objections to: see Receivability Rectification: see Iran–U.S. Claims Tribunal; Reopening Cases, Jurisdiction vis-à-vis Remedies 147–66 annulment: see Annulment availability of other 240 damages as 152–3, 154–5, 161–3, 164, 166 damnum emergens and 148 declaratory judgment as 152, 163–4, 166 ICSID and 151 implied jurisdiction and: see herein inherent jurisdiction inherent jurisdiction and 148–9, 150, 151–66

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interpretation and 151–2 ius cogens and 148, 150 negative injunctions as 153, 154–6, 166 non ultra petita principle and 165–6 reopening cases: see Reopening Cases, Jurisdiction vis-à-vis resitutio in integrum and 153, 154, 156–9, 164 restitution: see herein restitutio in integrum revision: see Revision satisfaction 153, 161–3 specific performance as 153, 159, 161–1, 166 See also ICJ; ICSID; Iran–U.S. Claims Tribunal; Jurisdiction Remedies, Local: see Exhaustion of Local Remedies Reopening Cases, Jurisdiction vis-à-vis 167–96 annulment 167, 187–96 appeal 167, 187–96 corruption: see herein fraud discovery of new facts 175–6 errors and 177–8 finality and 167–74 fraud 167, 181–3, 264–5 inherent 176–8, 196 interpretation of judgments 167, 184–6 partial nullity 192–5 rectification 167, 183–4, 265–6 res judicata and 164–74, 185, 192–5 revision: see herein review review 167, 170, 175 Representation: see International Tribunals Res Judicata: see Compétence; ICSID; International Arbitration; Judgments, Finality of; Receivability; Reopening Cases, Jurisdiction vis-à-vis Restitutio in Integrum: see Remedies Review: see Iran–U.S. Claims Tribunal; Jurisdiction; Reopening Cases, Jurisdiction vis-à-vis Revision: see Review Revision of Judgments: see Reopening Cases, Jurisdiction vis-à-vis Rule in Monetary Gold Case: see Monetary Gold Case, Rule in Rule of Local Remedies: see Local Remedies, Rule of Rules of Procedure: see Procedure, Rules of Scheme of Work 17–19 Settlement: see Judicial Settlement Situations, Continuing: see Local Remedies, Exhaustion of Sources of Jurisdiction 79–82 multiple 79–80

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termination of validity of 81–2 validity in time of 80–1 Sovereignty: see Interpretation Specific Performance: see Remedies Standing 223–5 Statute of ICJ 50, 134–5, 153 Stare decisis 15–17 Travaux Préparatoires 111–12 Treaties, Vienna Convention on: see Convention Ultra Petita Principle: see Remedies UNCITRAL Model Rules of 125–6, 131 UNCLOS 39, 48, 69, 85, 131, 137, 139 See also ITLOS

Vienna Convention on Treaties: see Convention Waiver 100–14 arbitrability and 105–6 arbitration agreements and 101, 106–12 declaratory judgment and 113–14 express 101–3 failure to raise objection and 112–13 implied 103–14 submission to international adjudication and 103–5 Work, scheme of 17–19