Towards a Universal Justice? Putting International Courts and Jurisdictions into Perspective [1 ed.] 9789004298712, 9789004298705

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Towards a Universal Justice? Putting International Courts and Jurisdictions into Perspective

Towards a Universal Justice? Putting International Courts and Jurisdictions into Perspective Edited by

Dário Moura Vicente

LEIDEN | BOSTON

Library of Congress Cataloging-in-Publication Data Names: International Law Association. Regional Conference (2014 : Lisbon, Portugal), author. | Vicente, Dário Moura, editor. Title: Towards a universal justice? / edited by Dário Moura Vicente. Description: Leiden : Brill Nijhoff, 2016. | Includes index. Identifiers: LCCN 2015048878 (print) | LCCN 2015049224 (ebook) | ISBN 9789004298705 (hardback : alk. paper) | ISBN 9789004298712 (E-book) Subjects: LCSH: International courts--Congresses. | Jurisdiction (International law)--Congresses. | Justice--Congresses. | International Court of Justice--Congresses. Classification: LCC KZ6250 .I58 2016 (print) | LCC KZ6250 (ebook) | DDC 341.5/5--dc23 LC record available at http://lccn.loc.gov/2015048878

Want or need Open Access? Brill Open offers you the choice to make your research freely accessible online in exchange for a publication charge. Review your various options on brill.com/brill-open. Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/brill-typeface. isbn 978-90-04-29870-5 (hardback) isbn 978-90-04-29871-2 (e-book) Copyright 2016 by Koninklijke Brill nv, Leiden, The Netherlands. Koninklijke Brill nv incorporates the imprints Brill, Brill Hes & De Graaf, Brill Nijhoff, Brill Rodopi and Hotei Publishing. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill nv provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, ma 01923, usa. Fees are subject to change. This book is printed on acid-free paper and produced in a sustainable manner.

Contents Foreword xi List of Contributors xiv

Part 1 The Growing Role of International Courts and Jurisdictions: The Permanent Court of International Justice, the International Court of Justice, and Beyond 1 Introduction 3 Rui de Moura Ramos 2 From Absence to Abundance: Tracing the Development and Impact of International Courts 10 Miguel de Serpa Soares 3 The Cases Where the International Court of Justice Lacked Jurisdiction: A Brief Analysis and Commentary 23 Rita Teixeira and Ricardo Bastos 4 Energy at Sea and the Jurisprudence of the International Court of Justice 38 Dimitra Papageorgiou and Eva Tzavala

part 2 International Inspection and Control Mechanisms 5 An Overview of the International Inspection and Control Mechanisms 59 Fernando Loureiro Bastos 6 The uefa Financial Control Body 74 José Cunha Rodrigues

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Part 3 European and Other Regional Courts of Human Rights 7 Introduction 85 Ireneu Cabral Barreto 8

The European Court of Human Rights as the European Constitutional Court 89 Paulo Pinto de Albuquerque

9

The African Court on Human and People’s Rights and its Position in the International and African Judicial Architectures 98 José Pina-Delgado

10

Cultural Rights and a Right to Cultural Identity before the European Court of Human Rights: Present Approaches and Future Challenges 136 Laura-Maria Crăciunean

11

The Influence of Inter-American Human Rights Law on the Jurisprudence of the Brazilian Supreme Federal Court 163 Adriana Ramos Costa and Eleonora Mesquita Ceia

12

Comparing and Discussing the Different Approaches to Remedies for Child Victims before the European Court of Human Rights and the Inter-American Court of Human Rights 190 Francesca Capone

13

The International Criminal Court and Human Rights: Achievements and Challenges 206 Ondřej Svaček

14

Brazil and the Inter-American System for the Protection of Human Rights: Conventionality Control on the Criminal Lawsuit no. 470 222 Alex Ian Psarski Cabral, Cristiane Helena de Paula Lima Cabral and Mario Lúcio Quintão Soares

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Part 4 Dispute Resolution Mechanisms Concerning International Trade and Investment, in Particular within the wto and icsid 15

Investor-State Dispute Settlement in the European Perspective: Recent Developments 247 Dário Moura Vicente

16

Dispute Resolution under the Energy Charter Treaty 264 Alejandro Carballo

17

Understanding the Interaction between the wto Regime and International Investment Regime: Reversing the Approach 276 Ozge Varis

18

Legal Certainty during eu Accession: What Can a Foreign Investor in a Future Member State Legitimately Expect? 290 Sadie Blanchard

19

Dispute Resolution Mechanisms Concerning International Trade and Investment, in Particular within wto and icsid. A Dual Coverage in the Services Sector 306 Carmen Saugar Koster

20 The wto Dispute Settlement System and Renewable Energy Subsidies: The Case of Feed-in Tariffs 319 Paolo Davide Farah and Elena Cima 21

Evidence and the Principle of Good Faith in Investment Arbitration: Finding Meaning in Public International Law 347 Emily Sipiorski

22

Challenges of Investor-State Dispute Settlement Mechanism in ttip 363 Jerzy Menkes and Magdalena Słok-Wódkowska

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Part 5 International Commercial Arbitration 23

The Confluence of Transnational Rules and National Directives as the Legal Framework of Transnational Arbitration 383 Luís de Lima Pinheiro

24 The Challenges of Taking Evidence in International Commercial Arbitration: The Problem of Legal Privileges 432 Tatjana Shterjova

Part 6 The Court of Justice of the European Union 25 Introduction 449 Fausto de Quadros 26 The Court of Justice of the European Union 451 Maria José Rangel de Mesquita 27

Infringement Procedure and the Court of Justice as an EU Law’s Assurer: Member States’ Infringements Concerning Failure to Transpose Directives and the Principle of an Effective Judicial Protection 468 Joana Covelo de Abreu

28 The United Nations Sanctions Regimes and a Judicialized European Union Perspective 476 Mateus Kowalski and Sofia Machado

Part 7 Domestic Courts as International Jurisdictions? 29 Introduction 497 Catherine Kessedjian 30 Limits on Jurisdiction of Domestic Courts to Grant Civil Damages for International Law Violations 500 Peter D. Trooboff

Contents

31

Corporate Group Structures and the Limits of Personal Jurisdiction. us/European Comparative Remarks 516 Rui Pereira Dias

32 Towards Judicial Accountability in the Business & Human Rights Field? 528 Humberto Cantú-Rivera

Part 8 Postscript 33 The Judicial and Constitutional Challenges of Legal Globalisation 547 Miguel Poiares Maduro Index 565

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Foreword Manuel de Almeida Ribeiro One of the most remarkable aspects of the evolution of modern international law is its growing jurisdictionalization. Despite being presented as the law without court or police, which it truly is, given the lack of universal and obligatory jurisdiction that characterizes international law, many non-universal jurisdictions, either with specialized or regional competence, have appeared and are today an indispensable means of solving disputes between states or between states and non-state actors. In view of this remarkable reality, the Portuguese Society of International Law (Sociedade Portuguesa de Direito Internacional), which is the Portuguese branch of the International Law Association, considered it appropriate to organize a conference in Lisbon, inviting distinguished speakers from all over the world and calling for papers from other students and scholars in order to discuss the different realities included in what we called “International Courts and Jurisdictions”. In fact, if the creation of international jurisdictions of very different scopes and aims is a post Second World War tendency, its roots date back to the beginning of the xixth century. Modern international arbitration was a development of international law in the xixth century, with remarkable successes, such as the Jay Treaty Arbitrations and the Alabama Arbitration, which led many people to believe that the ideal substitute for war could be found, and led to the creation of the Permanent Court of Arbitration. If, unhappily, war did not end and the xxth century went down in history as the bloodiest of modern history, this situation did not stop the evolution of international law. It can be said that the last century was simultaneously the century of war and the century of law. After the First World War, the Treaty of Versailles created the Permanent Court of International Justice, which became seen as the most remarkable and lasting legacy of the League of Nations, and was recreated within the scope of the United Nations as the International Court of Justice after the Second World War. More than merely solving disputes between states, the jurisprudence of both these courts had an immense impact on the development of international law. Sometimes the International Court of Justice is accused of low productivity and a tendency to avoid decisions of the merits, mostly when states contest its jurisdiction, even after having accepted it previously in the abstract. It is true that politics are not completely separate from the inner life of the Court,

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as would be desirable, but there are no perfect human works and the bright side of the jurisprudence is remarkable. Even when not exceeding 200 decisions in 70 years, many of them concerning delimitations of land and sea borders, generally the judgements of the Court are accepted by the parties and potential conflicts are avoided. The period that followed the end of the Second World War was particularly marked by two new developments: decolonization and European integration. Although not perfect, as with many products of human ingenuity, their influence was remarkable. The decolonization process led to the universalization of international law, which having been mainly a product of inter-European relations in earlier times, later included the American states. The European integration process gave birth to a new category, partially international, partially a tertium genus. Among the African States, new institutions, particularly those of what is today the African Union, have the goal of promoting cooperation between the new African States and protection of human rights as—decades before them—the institutions of the Organization of American States also intended to do. Over centuries international law was predominantly the law of war and peace. In the xxist century, in this troubled world order in which we live, international law became the international expression of every chapter of law and is no longer confined to interstate relations. Accepting the jurisdiction of international human rights courts has became an indispensable companion of internal rule of law. Particularly when these jurisdictions are open to the complaints of private citizens even against their national states. Increasing relations between states and private corporations, individuals and states, individuals in trans-boundary relations and involving other actors that since recently are included in the general category of participants in international law, calls for adequate means of effectively resolving disputes. International law has evolved into new branches such as International Environmental Law and the Law of the Sea. The International Tribunal for the Law of the Sea, created by the United Nations Convention on the Law of the Sea, although still with a small caseload, has become a prestigious specialized jurisdiction. The dynamics of international economics and the indispensability of international investment as a tool for promoting economic development convinced states to accept new mechanisms of dispute resolution involving private parties. In this context new bodies emerged such as the icsid, the World Energy Charter arbitrations and the World Trade Organization panel process.

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The international legal order in the broader sense of the expression allows new private international means of preventing and solving conflicts, namely the international inspection and control mechanism within special activities with a relevant trans-border expression as is the case in sport. It is difficult to imagine international businesses without international commercial arbitration. The prestige of non-governmental organizations, such as the International Chamber of Commerce, shows how the international civil society contributes strongly to shaping this world, not without borders but with a growing trans-border life. Describing the state of thinking about these issues is important in itself and in an ever-changing world must be done from time to time. Yet our ambition with this project went a little further: we wished to discuss among all the participants not only the unique field of speciality of each one but the relations between all the subjects of the programme. That is why we chose not to split the participants into different panels, but to organize a single two-day panel. We think, and hope that the approximately two hundred attendees at the conference agree with us, that such a purpose was achieved to a very satisfactory level. It permitted us to explore the interactions and conflicts of the different international courts and jurisdictions, and discuss how we can expect the contradictions in the system to be overcome. This book is the collective result of hundreds of individual contributions, both written and oral. The expectation and ambition of the organizers was to gather such a distinguished assembly and promote an occasion for personal contact, and that which most academics so enjoy: create a platform for debate. We find that, essentially due to the merits of our participants, our aim was achieved. This book will remain as a memory of the conference and a milestone in the approach to international courts and jurisdictions.

List of Contributors Joana Covelo de Abreu is PhD researcher on European Union Law, with a fct’s fellowship. Invited Lecturer (University of Minho Law School). Degree in Law (16 values) and Master’s Degree in Procedural Law (17 values) by the University of Minho. Lawyer. Collaborating Member of the Centre of Studies in eu Law (UMinho). President of eynorth (Associação dos Jovens Europeus do Norte de Portugal). Paulo Pinto de Albuquerque is a Judge at the European Court of Human Rights and a Associate Professor with tenure at the Faculty of Law of the Catholic University of Lisbon. He is also an Adjunct Professor, Illinois College of Law, United States of America. Invited Professor at the High Military Studies Institute of the Ministry of Defence of Portugal. Expert of greco (Group of States against corruption) appointed by the Council of Europe. Expert of the European Commission in the European Union projects “Victims of Crimes and Mediation” and “Crime Repression Costs in Context”. Ireneu Cabral Barreto was born in Ponta do Sol, Madeira. He graduated in Law at the University of Coimbra. His career began as a Public Prosecutor in 1964 and was appointed Judge at the Supreme Court of Portugal in 1997. Between the years of 1984 and 1992 he was the Portuguese Government Agent before the Commission and the European Court of Human Rights and a member of several committees of the Council of Europe, including the Steering Committee of Human Rights, being President in 1990 and 1991. In 1993, he became member of the European Commission of Human Rights and, in 1998, he was appointed Judge of the European Court of Human Rights (echr), where he remained until March 31, 2011. The President of the Republic of Portugal appointed him as Representative of the Republic for the Autonomous Region of Madeira on April 11, 2011, and he currently exercises these functions. He has published several articles and books, mainly concerning human rights. Fernando Loureiro Bastos is Professor at the Faculty of Law of the University of Lisbon; Senior Researcher of the Centre for Research in Public Law, University of Lisbon; Fellow of the Institute for International and Comparative Law in Africa, Faculty of Law, University of Pretoria; Member of marsafenet (NETwork of experts on legal

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aspects of MARitime SAFEty and security); Counsel and Co-Agent of GuineaBissau in the Virgínia G Case (2014), International Tribunal for the Law of the Sea. Ricardo Bastos is ll.m. in Public International Law at Leiden University and Bachelor in Law at the New University of Lisbon, with a semester spent abroad at the University of Munich. Member of the Portuguese Branch of the International Law Association. Team member in the Telders, Europa and Jessup Moot Court Competitions. Sadie Blanchard is a Research Fellow at the Max Planck Institute for International, European and Regulatory Procedural Law, where her research focuses on international investment law and arbitration, international economic law, and transnational business regulation. She holds a j.d. from Yale Law School and is a member of the New York bar. Alex Ian Psarski Cabral is College Professor in Belo Horizonte, Minas Gerais, Brazil. PhD student in Public International Law in the Pontifical Catholic University of Minas Gerais. Master in Legal and International Studies, Faculty of Law, University of Lisbon. Lawyer. Cristiane Helena de Paula Lima Cabral is College Professor in Belo Horizonte, Minas Gerais, Brazil. PhD student in Public International Law in the Pontifical Catholic University of Minas Gerais. Master in Legal and International Studies, Faculty of Law, University of Lisbon. Lawyer. Humberto Cantú-Rivera is an Associate Researcher and PhD Candidate at the Centre de recherché sur les droits de l’homme et le droit humanitaire (crdh) of Université PanthéonAssas Paris ii. He has been a Visiting Professional at the Office of the un High Commissioner for Human Rights (2012) and a Scholar of The Hague Academy of International Law (2013). Francesca Capone is a Postdoctoral research fellow and the Coordinator of the Master in Human Rights and Conflict Management at the Scuola Superiore Sant’Anna, in Pisa,

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Italy. She holds a Joint Doctorate Degree from the Scuola Superiore Sant’Anna and Tilburg University. She has been a visiting fellow and a guest lecturer at several academic institutions across Europe. Her main areas of expertise are ihrl, ihl and icl, in particular victims’ rights to remedies. Alejandro Carballo holds a llb with Economics, a Certificate on international conflicts, llm, an European PhD in international law, and has a attached the Harvard Program on  Negotiation. He provides legal advice to the Energy Charter Secretariat, the  Energy Charter Conference and its subsidiary bodies. In addition, he is in  charge of the ect dispute settlement mechanisms and the travaux pré­ paratoires. Previously, he was a Senior Associate at an international law firm were he advised states and private clients on a wide range of public international law issues. Alejandro has been a Visiting Fellow at the University of Cambridge and lectured in Public International Law. He was a member of the Executive Council of the American Society of International Law, and ­participated in the working groups of unidroit Principles of International Commercial Contracts and the Hague Conference Principles on Choice of Law in international contracts. Eleonora Mesquita Ceia is Doctor of Law at the Saarland University, Saarbrücken (Germany). Professor  of Constitutional and International Law at the Faculty of Applied Social Sciences, Brazilian Institute of Capital Markets, Ibmec, Rio de Janeiro (Brazil). Elena Cima is a PhD Candidate in international law at the Graduate Institute of International Law and Development Studies in Geneva, where she also works for the LL.M Program in International Law. Her research interests include public international law, international trade law, international environmental law, energy law, and Chinese law. Prior to starting her doctoral studies, she worked at Yale Law School as a research scholar and teaching assistant. Research Associate at gLAWcal— Global Law Initiatives for Sustainable Development (United Kingdom). LL.M. at Yale Law School (2013–2014); Bachelor of Laws LL.B (2010), Summa Cum Laude, from the University of Milan; EU Commission Marie Curie Fellow (2011–2013 at Tsinghua University School of Law, THCEREL—Center for Environmental, Natural Resources & Energy Law in Beijing (China). Research Fellow at Università del Piemonte Orientale “Amedeo Avogadro”, DiSEI—Dipartimento di Studi per l’Economia e l’Impresa (Italy).

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Visiting Scholar (2009–2010) at Harvard Law School, EALS—East Asian Legal Studies (USA). Adriana Ramos Costa is Master of International Juridical Science at the University of Lisbon, Lisboa (Portugal) and Professor of Constitutional and Human Rights Law at the Faculty of Applied Social Sciences, Brazilian Institute of Capital Markets, Ibmec, Rio de Janeiro (Brazil). Laura-Maria Craciunean is an Associate Professor PhD, at “Lucian Blaga” University of Sibiu, Romania, Faculty of Law, where she teaches courses on Public International Law International Humanitarian Law and Diplomatic Law. Her research interests are related to economic, social and cultural rights, cultural diversity and human rights and minorities protection. Since September 2014, she also serves as an independent expert in the un Human Rights Council Advisory Committee. Rui Pereira Dias is an Assistant Professor (Assistente) at the University of Coimbra (Portugal). ll.m. (’11), New York University (International Business Regulation, Litigation, and Arbitration). Paolo Davide Farah is University Professor at West Virginia University, John D. Rockefeller IV School of Policy and Politics, Department of Public Administration and College of Law, Morgantown, WV, USA; Research Scientist and Principal Investigator at gLAWcal – Global Law Initiatives for Sustainable Development, United Kingdom; Dual PhD in International Law, Aix-Marseille University, France and Università degli Studi di Milano, Italy; LL.M, College of Europe, Bruges, Belgium; J.D., University of Paris Ouest La Defense Nanterre, France. Visiting Scholar, Harvard Law School, Cambridge, MA, USA, East Asian Legal Studies, 2011–12; Fellow at the IIEL — Institute of International Economic Law at Georgetown University Law Center (USA). Catherine Kessedjian is Professor and Adjunct Dean of the Collège Européen de Paris at the Université de Paris Panthéon-Assas. She coordinates its llm in European Law. She acts as an arbitrator under the auspices of major dispute settlement institutions or in an ad hoc capacity. She is also active as mediator. Before joining the Université

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Panthéon-Assas, she was Adjunct General Secretary of the Hague Conference of Private International Law. She has been a Avocat au Barreau de Paris from 1982 till 1998. Mateus Kowalski holds a PhD in International Politics and Conflict Resolution from the University of Coimbra, a llm in International Law from the University of Lisbon and a Degree in Law from the University of Coimbra. Invited Professor at the Universidade Autónoma de Lisboa, where he is also a researcher in the field of international criminal justice. He was Legal counsellor at the Portuguese Ministry of Foreign Affairs within the field of International Law. Delegate to several international organizations, including the United Nations, the European Union and the Council of Europe. Sofia Machado is a Law graduate from Universidade Católica Portuguesa (Portugal), with a llm from the University of Kent (uk). She specialized in Public  International Law, having presented her thesis under the title of The Security Council as a Quasi-judicial Body: A Critical Analysis from the Perspective of the 1267 Sanctions System. Upon concluding her studies she completed an internship with the Permanent Mission of Portugal at the United Nations. Miguel Poiares Maduro Doctor in Law by the European University Institute, he was Advocate-General at the European Court of Justice, in Luxembourg, from 2003 to 2009 and Lecturer at numerous institutions, including: College of Europe, Catholic University of Lisbon, New University of Lisbon, London School of Economics, University of Chicago Law School, Centre for Political and Constitutional Studies of Spain, Ortega y Gasset Institute in Madrid, and Institute of European Studies of Macau. Before his appointment to the Portuguese Government, in April 2013, as Minister in the Cabinet of the Prime Minister and for Regional Development, he was Director of the Global Governance Program and Professor of Law at the European University Institute in Florence, Italy, and Visiting Professor at the Yale University Law School. Jerzy Menkes is lld, full professor of public international law, chief in Chair of International Law and International Organization, Warsaw School of Economics, President of Polish Branch of ila.

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Maria José Rangel de Mesquita is an Associate Professor of the Faculty of Law of the University of Lisbon (eu Law, International Law and Public Law). Coordinator of the Jean Monnet Teaching Module “European Union’s External Action Role in a Global World” (2012–1015). Judge at the Constitutional Court (since 2012). Participating member of the Jean Monnet Centre of Excellence of the University of Lisbon— Faculty of Law (2011–2014). Member of Project on Principles of European Tort Law—Public Liability (Institute for European Tort Law, 2010–2015). Member of the Direction Board of the aida-Portugal. Dário Moura Vicente is Professor of Private International Law, Comparative Law and Civil Law at  the  Faculty of Law of the University of Lisbon, where he obtained his PhD  in  Law and whose Institute for Juridical Cooperation he chairs. He was  a  Visiting Professor at The Hague Academy of International Law, the Paris  V University, the Complutense University in Madrid and the Urbino University. He has also taught extensively in other Portuguese-speaking countries. Dimitra Papageorgiou is a post-doctoral researcher at the University of Athens. Dimitra studied law at the University of Athens, where she was awarded her PhD in 2014. She has worked for the Council of Europe and the Greek Ombudsman. Her research interests include public international law, with a focus on international economic law, human rights law and international energy law. José Pina-Delgado is lecturer of Legal Theory and Public Law at the Department of Law and  International Studies of the Institute of Legal and Social Sciences of Praia  (iscjs-Portuguese acronym), Cape Verde. Former Commissioner of the National Human Rights Commission of Cape Verde and former head of the Unit  of International Criminal Cooperation and Fundamental Rights of the Ministry of Justice of Cape Verde. Former Special Legal Adviser on Public Law matters of the Ministries of Justice, Internal Affairs, Defence and State Reform. He has published papers on public law, human rights and theory of law and has drafted national human rights policy or legal instruments, namelly the i National Human Rights Report and the ii Human Rights National Plan of Action of Cape Verde, regulations of the legal aid legislation and a bill on Asylum.

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Luís de Lima Pinheiro is a Professor at the School of Law, University of Lisbon, teaching Conflict of Laws, Introduction to the Study of Law, Civil Law and International Business Law, in the j.d., ll.m. and PhD courses. He is author of many textbooks, essays and articles on the subjects of Conflict of Laws, Comparative Law, Interna­ tional Business Law, International Commercial Arbitration, Commercial and Maritime Law and Civil Law. Fausto de Quadros is Professor of International and European Law at the Law Faculty of the Lisbon University and Visiting Professor at the University of Strasbourg. He has a Jean Monnet Chair ad personam in European Constitutional Law—Political Union and is a Academic Coordinator of the Jean Monnet Center of  Excellence of the Lisbon University. He is Co-author of the Encyclopedia of Public Interna­ tional Law, ed. by Rudolf Bernhardt, and of The Max Planck Encyclopedia of International Law, ed. by Rüdiger Wolfrum. He is an icc and a wto Arbitrator. Rui de Moura Ramos is currently Professor of Law in the Faculty of Law of Coimbra University (Portugal) and the Chair of the Scientific Board of University of Coimbra Institute for Legal Research (UCILeR). Previously, he has been Judge of the Court of First Instance of European Communities (1995–2003) and Judge (2003–2012), Vice-President (2003–2007) and President (2007–2012) of the Portuguese Constitutional Court. He is a member of several scientific institutions (mainly, the Institute of International Law) and has a great number of scientific publications, dealing mainly with Private International Law, European Union Law and International Law. Manuel de Almeida Ribeiro has a Law degree from uerj, State University of Rio de Janeiro (1978) and a PhD in Political Science, Technical University of Lisbon (1992). Aggregation in political and juridical sciences, Technical University of Lisbon (2002). Attorney at law (since 1979). Tenured professor of International Law in the Social and Political Sciences Institute of the University of Lisbon (since 2003). Adviser of the Prime Minister of Portugal (1992–1995). President of the Portuguese Society of International Law. Member of the Executive Committee of the International Law Association. José Cunha Rodrigues is Chairman of the uefa Club Financial Control Body, former Attorney General of the Portuguese Republic and former Judge at the Court of Justice of the European Union.

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Carmen Alexandra Saugar Koster is an Attorney at Law specialized in International Dispute Settlement (midsllm- Graduate Institute of International and Development Studies, Geneva, Switzerland) and in International Law and International Relations (llmFaculty of Law, University of Granada, Spain). She is a dual PhD candidate (cotutelle) in International Investment Law at the universities of Geneva and Granada. Tatjana Shterjova is a Teaching and research fellow at the University “Ss.Cyril and Methodius”— Faculty of Law “Iustinianus Primus”, Republic of Macedonia, and Advisor at the Permanent Court of Arbitration attached to the Economic Chamber of Macedonia. She holds a master’s degree from the University “Ss.Cyril and Methodius”—Faculty of Law “Iustinianus Primus”, and is currently working on a Ph.D thesis in the field of civil procedural law at the same University. Emily Sipiorski is currently completing her PhD dissertation on the application of the principle of good faith by investment tribunals. She was a senior researcher and lecturer at the Institute for Economic Law at Martin Luther University, Halle, Germany from 2009 until 2014. She has a jd from Hamline University in St Paul, Minnesota and an ma in Central European Studies from Jagiellonian University, Krakow, Poland. Magdalena Słok-Wódkowska is lld, associate professor of European law and public international law, expert of the eu Affairs Committee of the Polish Senate. Mário Lúcio Quintão Soares is College Professor in Belo Horizonte, Minas Gerais, Brazil. Master and PhD in Law, Federal University of Minas Gerais. Lawyer. Miguel de Serpa Soares was appointed the Under-Secretary-General for Legal Affairs and United Nations Legal Counsel in September 2013. He oversees the Office of Legal Affairs, the overall objectives of which are to provide a unified central legal service for the United Nations. Mr Serpa Soares has extensive experience of legal and international affairs, having represented his country in various bilateral and multilateral international forums, including the Sixth Committee of the United Nations General Assembly, the Committee of Public International Law Advisers of the Council of Europe and the International Criminal Court’s

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Assembly of State Parties. Before taking up his current position, Mr Serpa Soares was Director General of the Department of Legal Affairs of the Ministry of Foreign Affairs of Portugal from 2008. Earlier in his career, he acted as Legal Adviser to the Permanent Representation of Portugal to the European Union, Brussels (1999–2008). Born in Angola in 1967, Mr Serpa Soares holds a degree (Licenciatura) in law from the Faculty of Law of the University of Lisbon (1990), where he also served as Assistant Lecturer from 1989 to 1993, and a Diplôme de Hautes Etudes Juridiques Européennes, Collège d’Europe, Bruges (1992). Ondřej Svaček is a senior lecturer at the Department of International and European Law, Faculty of Law, Palacký University, Olomouc (Czech Republic). He specializes in international criminal law and the law of international responsibility. He is a member of the American Society of International Law, the European Society of International Law and the Czech Society of International Law. Rita Teixeira holds a ll.m in Public International Law at Leiden University and a Bachelor degree in Law at the New University of Lisbon. Member of the Direction at the Portuguese Branch of the International Law Association. Represented Portugal in international moot court competitions. Peter Trooboff is Senior Counsel in the Washington office of Covington & Burling llp and specializes in public and private international legal matters including international litigation and arbitration. He is a former president of the American Society of International Law (1990–92), an honorary member of the Board of Editors of the American Journal of International Law, a member since 1991 of the Curatorium of the Hague Academy of International Law and a member of  the u.s. Secretary of State’s Advisory Committee on Private International Law. Eva Tzavala is a doctoral research assistant at the University of Athens in the field of international energy law, international environmental law, human rights law and law of treaties. She has been teaching international law at the Greek Police Academy, appointed as a legal expert at the Hellenic Asylum Appeal Committees and worked for the United Nations and Greek ngo’s. In addition to her academic

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work, she is a practising attorney-at-law (Athens Bar Association) in corporate and business law. Ozge Varis is graduated from Yeditepe University Faculty of Law with llb degree. She holds Masters in Law (llm) from University of Amsterdam, Amsterdam Law School in International and European Union Law. She was admitted to the Istanbul Bar and Turkish Bar Associations as a qualified attorney at law in 2011. She has been doing her PhD at University of Dundee, cepmlp since October 2012 under supervisions of Professor Peter D. Cameron and Professor Pieter Bekker.

Part 1 The Growing Role of International Courts and Jurisdictions: The Permanent Court of International Justice, the International Court of Justice, and Beyond

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chapter 1

Introduction Rui de Moura Ramos First of all, I would like to congratulate very warmly the International Law Association for the organisation of this Regional Conference adressing the role of international courts in the present international society. I also want to express my gratitude to the Portuguese Branch of the Association (mainly to Professor Dário Moura Vicente, as Congress coordinator) for having chosen this important topic as the subject matter of our meeting and for having invited me to chair this first session. Finally, I also want to present my best compliments to all who are in this room and mainly to those who share this session with me: Mr. Miguel Serpa Soares, who is presently, as you certainly are aware, Under-Secretary General for Legal Affairs and Legal Counsel of the Organisation of the United Nations, and the two pairs of young lawyers, Misses Dimitra Papageorgiu and Eva Tzavala, who join us from Greece (National and Kapodistrian University of Athens) and will deal with “Energy at Sea and the Jurisprudence of the International Court of Justice”, and Rita Teixeira and Ricardo Bastos, from Portugal, who will present a very interesting analysis on “The Cases where the International Court of Justice Lacked Jurisdiction; A Brief Analysis and Commentary”. The general topic of this section (“The Growing Role of International Courts and Jurisdictions: The Permanent Court of International Justice, the International Court of Justice and Beyond”) underlines one of the recent features that nowadays characterizes the international community and refers to its main jurisdictional organs of a general scope. In fact, our international society is no more a community where there is ni législateur, ni juge ni gendarme, and the multiplication of its jurisdictional organs is one of its more apparent characteristics. Such a multiplication is well demonstrated by the number of international and regional courts we can notice nowadays,1 some of them being referred to in the programme of this conference. We will hear about international courts having general jurisdiction (as was the case in the time of The Permanent

1 On this topic see also António Augusto Cançado Trindade, “The expansion of international jurisdiction”, in Liber amicorum Peter Leuprecht, Bruxelles, 2012, Bruylant.

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Court of International Justice and applies nowadays to The International Court of Justice), international courts having jurisdiction on specific matters (The International Criminal Court,2 but we could also add the International Tribunal for the Law of the Sea) and regional courts having jurisdiction on specific matters (such as the European Court of Human Rights, the African Court on Human and People’s Rights,3 the Inter-American Court of Human Rights and the Court of Justice of the European Union4). Furthermore, reference will also be made to some dispute resolution mechanisms available in the international arena, such as those from the icsid Convention, wto Treaty, and Energy Charter Treaty. The great majority of these courts operate within the framework of a specific organization (like, for example, the two European Courts, which belong, respectively, to the institutional structure of the Council of Europe and the European Union) and their creation and development is therefore linked to the evolution of the international legal order and the increasing exercise of law-making in international society. The emergence of these jurisdictional institutions cannot be dissociated from the general trend of globalization and fragmentation that is also a characteristic of the present state of creation and development of law in the

2 On this aspect, see Dai Tribunali Penali Internazionali ad hoc a una Corte Permanente (a cura di Flavia Lattanzi ed Elena Sciso), Napoli, 1996, Editoriali Scientifica, Pedro Caeiro, “Tribunais Penais Internacionais: ‘etapas de um caminho’ ou ‘astros em constelação’? (Uma visão político-jurídica do Estatuto de Roma)”, 10 Revista Brasileira de Ciências Criminais (2002), pp. 98–106, Eugene Kontorowich, “Three international courts and their constitutional problems”, 99 Cornell Law Review (2014), pp. 1353–1386, Fausto Pocar, “Remarks on the future on international criminal justice”, in O Direito Internacional e o Primado da Justiça (António Augusto Cancado Trindade/António Celso Alves Pereira, Coeditores), Rio de Janeiro, 2014, Renovar, pp. 303–313, and Sang-Hyun Song, “The International Criminal Court and the Kampala Review Conference”, ibidem, pp. 315–322. And for some aspects of its jurisprudence, Joana Costa, Joint Criminal Enterprise. O fundamento da imputação individual do facto colectivo na jurisprudência dos Tribunais Penais Internacionais, Coimbra, 2014, Coimbra Editora. 3 Noting the development of other courts on this continent, see Abdulqawi A. Yusuf, “The emergence of judicial institutions for inter-State disputes in Africa: A brief survey”, in O Direito Internacional e o Primado da Justiça (cit. supra, note 2), pp. 283–302. 4 One can speak of a kind of mimetic effect, when considering the developments in this area. Besides the case of human rights protection (see the several courts indicated in this text) the same seems valid for economic integration. In this context, see the studies assembled in Hacia una Corte de Justicia Latinoamericana (José Vidal Beneyto, Ricardo Alonso Garcia y otros), Valencia, 2009, Fondación amela.

Introduction

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international community.5 In fact, at the international level, law is more and more created by distinct authors that refer to different procedures of law-making, with the view of solving old and new problems that, as is generally accepted, cannot be dealt with in a satisfactory way at the national level. This is valid with respect to old international authors that detained previously the exclusive membership in international society (Nation-States), that use more frequently bilateral and multilateral treaties. But it is especially true concerning international organizations, whose place in international society, as is well known, has significantly widened in the last years. An important number of these organizations deploy their activity in a specific field and such activity is pursued in several cases by enacting international rules. In addition, these organizations frequently have a complex structure that is in certain situations a source of conflicts between its different organs and the Member States. The need to solve these conflicts was one of the reasons that justified the  inclusion of courts (naturally, international courts) in the institutional structure of some of these organizations. These courts have jurisdiction on the interpretation of the treaties that constitute their main charter and of the ­unilateral acts created by the organs and institutions that are foreseen in these instruments, and it is not disputed that, because of the importance of the functions deployed, they have acquired a very important status in international society.6 Meanwhile, this development has not been the fruit of a reasoned and foreseen programme, but the result of an answer to the growing needs of the international community. So we can notice cases of overlapping in the areas covered by the different organizations7 and the possible existence of conflicts between the 5 In this respect, see Angela Del Vecchio, Giurisdizione Internazionale e Globalizzazione. I tribunali internazionali tra globalizzazione e frammentazione, Milano, 2003, Giuffrè, and, for a more detailed consideration, Alessandra di Martino, Il territorio: Dallo Stato-Nazione alla Globalizzazione. Sfide e prospettive delllo Stato Costituzionale aperto, Milano, 2010, Giuffrè. 6 See for example António Augusto Cancado Trindade, ‘A contribuição dos tribunais internacionais à evolução do direito internacional contemporâneo’, in O Direito Internacional e o Primado da Justiça (cit. supra, note 2), pp. 3–89. 7 Even if this overlapping refers mainly to the competences of the different organizations there are also some cases where the courts must consider the application of different instruments pursuing the same goal. See, in respect of the protection of human rights in European Union, Bruno Genevois, « La convention européenne des droits de l’homme et la Charte des droits fondamentaux de l’Union européenne; complementarité ou concurrence? » 26 Revue Française de Droit Administratif (mai–juin 2010), pp. 437–444, and Ricardo Alonso García, El Juez nacional en la encrucijada europea de los derechos fundamentales, Navarra, 2014, Editorial Aranzadi.

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decisions of some of these courts is by no means excluded. And it is clear that there is no supreme authority with jurisdiction to solve these kinds of problems. This fact can be considered the result of the circumstances that have presided during the creation and development of international society, which are very distinct from those present in the establishment of the domestic ones. In fact, concerning the latter, definition and regulation of power has taken place first at an internal level, mainly by the enactment of a Constitution that institutes the system of powers in the State and the means to protect the fundamental rights of persons. The situation has been very different in the former, due to the fact that international society presents itself like a community where the system of power is not defined in advance and where there are no entities disposing of authority to impose respect and compliance on those sharing its membership. This is also one of the reasons for the growing claim of constitutionalization of international law and international society, so present in the academic debate in the last years.8 I do not have the possibility to develop this question further, also because my role here is mainly that one of enabling others to express their views, more than to present mine, but I just want to emphasize one point at this stage. It concerns the function of Courts in this process and in this debate. In fact, as it has been observed very soon concerning the European Union,9 law, and mainly law in action, that is to say law as interpreted and applied by courts, has played a very important role in such a process. And if we turn to international society and international law as a whole, this role is played not by one single court but by the set of (international and also domestic10) courts 8

9 10

See, for example, the book of Jan Klebbers, Anne Peters and Geir Ulfstein, The Constitutionalization of International Law, Oxford, 2009, Oxford University Press. It is well known that the question was first dealt in respect of the European Union. See, for example, J.H.H. Weiler, The Constitution of Europe. “Do the new clothes have an Emperor?” and other essays on European integration, Cambridge, 1999, Cambridge University Press, Miguel Poiares Maduro, A Constituição Plural. Constitucionalismo e União Europeia, Cascais, 2006, Principia, and Maria Rosaria Donnarumma, “Il processo di ‘costituzionalizzazione’ dell’Unione Europea e la tensione dialettica tra la giurisprudenza della Corte di Giustizia e le giurisprudenze delle Corti Costituzionali”, 20 Rivista Italiana di Diritto Pubblico Comunitario (2010), No. 2, pp. 407–449. See the seminal essay from Eric Stein, “Lawyers, Judges and the Making of a Transnational Constitution”, 75 The American Journal of International Law (1981), pp. 1–27. Reference must be made, in this respect, mainly to Constitutional Courts and Supreme Courts exercising constitutional functions. Specifically addressing the relationship between these two jurisdictions in the field of human rights, see Vincenzo Sciarabba,

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(even if we cannot speak of a system, when considering it) that deploy its jurisdiction on the international arena. It has been common to refer, in this respect, to the “dialogue des juges”,11 as a way of recognizing that in an area where there is no supreme authority (even on the jurisdictional level) the relationship between the different levels is not authoritatively defined by one jurisdiction12 but by the several jurisdictional authorities by way of accommodation between the different ones, in a process of trying to prevent contradictions between their rulings and the decisions of the others. When pursuing this task, that supposes the establishment of a kind of cooperation,13 international courts must elaborate in the international area as  a whole, taking in due consideration all the circumstances surrounding the dictum that they have to produce and the different sources of applicable law. But they must also consider that they are not the only ones having the

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Tra Fonti e Corti. Diritti e principi fondamentali in Europa: profili costituzionali e comparati degli sviluppi sovranazionali, Padova, 2008, Cedam. And on the possible evolution of Strasbourg court, see Jens Meyer-Ladewig, “The European Court of Human Rights as European Constitutional Court”, in Liber amicorum Peter Leuprecht (cit. supra, note 1), pp. 183–210. Considering the question with respect to the two European Courts (Strasbourg Court of Human Rights and Luxembourg Court of European Union), see the set of articles included in Pouvoirs, No. 96, 2001 (Les Cours Européennes. Luxembourg et Strasbourg); and in the framework of the eu/usa relationships, see Elaine Mak, “The us Supreme Court and the Court of Justice of the European Union: emergence, nature and impact of transatlantic judicial communication” in A Transatlantic Community of Law. Legal perspectives on the relationship between The eu and us legal orders (Edited by Elaine Fahey and Deirdre Curtin), Cambridge, 2014, Cambridge University Press, pp. 9–34. And for a broader perspective, see the communications inserted in Le dialogue des juges. Actes du colloque organisé le 28 avril 2006 à l’Université Libre de Bruxelles, Bruxelles, 2007, Bruylant. In fact it is not easy to foresee the repetition of the trend concerning adaptation of procedural domestic orders that has taken place in view of enabling the revision of domestic decisions considered by the European Court of Human Rights in violation of the obligations assumed in the European Human Rights Convention. On this process, see Vincenzo Sciarabba, Il Giudicato e la cedu. Profili di Diritto Costituzionale, Internazionale e Comparato, Milano, 2012, Cedam. See, on this topic, Lech Garlicki, «Cooperation of courts: The role of supranational jurisdictions in Europe», 6 International Journal of Constitutional Law (July/October 2008), Nos. 3 & 4, pp. 509–530, and, in a more particular context, Elaine Fahey, «Towards a transatlantic community of law? The use of law between the eu and us legal orders: questions of legal form and characterisation», in A Transatlantic Community of Law. Legal perspectives on the relationship between The eu and us legal orders (cit. supra, note 11), pp. 131–157.

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responsibility to intervene, and that they share that responsibility with other courts. What is new, in this respect, in comparison with the situation we know in internal systems, is the fact that inside the latter there is a pyramidal architecture that gives the ultimate say to one jurisdictional entity. In the opposite way, not only is such a (hoc sensu) Constitution in international society lacking, but also the definition of the essential rules about who would be part of it is, in the present situation, left to the courts.14 It is true that these courts have not been formally invested with this authority, and it is also possible to recall that this fact can also be used as an argument in the sense that the masters of the treaties15 have not given (or, have even refused to give) courts such a power. And try to derive from such an assumption a conclusion in the sense that courts are not enabled to do so. But it is also true that they simply cannot afford not to interpret the system where they are supposed to deploy their function. And since this system is not a well fixed and established one, but rather the existing international system as a whole, they can by no means escape, in the absence of a pre-established charter of constitution of this society, to fulfill the task of supplementing this absence, starting from the definition of the set of fundamental values and principles presiding over their activity. We can therefore conclude, at least for the moment, that the increasing number of courts in international society is certainly a fact, but that their growing role goes further than what could be expected at a first glance. Indeed, they (all of them,16 and not within a vertical structure but rather by way of reciprocal accommodation) are supposed to construe an order from the emerging disorder of orders17 that in a certain way characterises the international community, respecting the plurality that is inherent in international law

14

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They are therefore called, in a certain sense, to read the constitution of international society. Underlining that it is not so different what happens at an internal level, see Jamal Greene, “Giving the Constitution to the Courts”, 117 Yale Law Journal (March 2008), No. 5, pp. 886–919. We must start with the assumption that there is always a treaty (or eventual another kind of juridical act) presiding and organizing the activity of an international tribunal. The fact that the task belongs to all the courts does not exclude that we can argue for the existing of a special role for some of them. Concerning the icj, see Andrew Lang, “The role of the International Court of Justice in a context of fragmentation”, 62 International and Comparative Law Quarterly (October 2013), No. 4, pp. 777–812. See in this sense Neil Walker, “Beyond boundary disputes and basic grids: Mapping the global disorder of normative orders” 6 International Journal of Constitutional Law (July/ October 2008), Nos. 3 & 4, pp. 373–396.

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and international society, and therefore rediscovering the possible unity existing in this area.18 The difficulty and importance of such a task led some authors to call this XXIst century the Century of the Judiciary. Even for those who do not want to go so far as is presupposed by such an idea, it seems indisputable that the reality to which this conference calls our attention deserves to be the subject of our reflection. One reason more to congratulate the organizers of this conference for having included this subject in our agenda.

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Suggesting a methodology to accomplish this task, see Michel Rosenfeld, “Rethinking constitutional ordering in an era of legal and ideological pluralism”, 6 International Journal of Constitutional Law (July/October 2008), Nos. 3 & 4, pp. 415–455.

chapter 2

From Absence to Abundance: Tracing the Development and Impact of International Courts Miguel de Serpa Soares I wish to start by conveying my deep gratitude to the organizers of this conference for inviting me. Being here with you is a moving and special moment for me. As you may know, I am a proud graduate of this school, and I am reminded now of when I was sitting in this room as a first-year-student almost 30 years ago. Allow me to add that I consider it to be a noble part of my duties as Legal Counsel of the United Nations to go to academic institutions to discuss matters of public international law with students. The world today presents countless opportunities and challenges in the area of international law and international relations— and in order to live up to our aspirations, the international community will rely on your intellect, hard work and imagination. I wish you all the best as you pursue careers in this field and I look forward to speaking with you throughout the day. Introduction With regard to my presentation, I will be speaking on the question of the “growing” role of international courts and jurisdictions—which is, I think, an instructive title. There were times in the history of international life when it would have been impractical—perhaps even disingenuous—to speak with a straight face about a “growing” role for international courts. That is because from the advent of the modern law of nations—which is generally traced to the late 15th or early 16th centuries, although with intellectual roots stemming from long before that—up until the early 20th century, the existence of such institutions was largely a figment of the international imagination. That situation changed dramatically with the invention of the Permanent Court of International Justice (pcij), as provided for by the Covenant of the League of Nations, and it underwent a further evolution with the establishment of the International Court of Justice (icj) as the principal judicial organ of the United Nations in June of 1945. These institutions were premised on a general principle of international law that pre-dated their establishment, specifically, the principle that international disputes between the States shall be settled by peaceful means. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_003

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This principle, which in many ways is foundational to the functioning of the international system, is reflected in many international instruments, including in Article 2, paragraph 3 and Article 33 Charter of the United Nations, and in the 1982 Manila Declaration on the Peaceful Settlement of International Disputes. Such a principle does not necessarily prescribe how international disputes shall be settled, however, and, in fact, the vast majority of disputes are settled by non-judicial means. In accordance with Article 33, paragraph 1 of the Charter, the parties to an international dispute shall make recourse to a number of non-judicial measures and mechanisms, including negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, and so on. Just as in the case of the domestic legal system, the spectre of litigation, with all the costs and uncertainties that it entails, keeps most disputes out of the courts. The lack of compulsory jurisdiction in most instances further dissuades States and the governments representing them from submitting their disputes to judicial settlement. And yet, in the international system today, there is evidence that international courts are exerting an increasingly important impact on relations between States. In most cases, this impact stems not only from the settlement of a particular dispute—which is of course important—but also from what I would view as the signaling effect of judicial decisions. International courts, which are seemingly growing in number and diversity each year, and the jurisprudence that they produce, represent an integral, and often authoritative, assessment of the law. When done well—as it most often is—this assessment becomes the status quo ante for States—the lex lata upon which future international relations are predicated. Although not formally parties to the dispute, third-states often take account of such interpretations and circumscribe their actions accordingly. This impact of the decisions of international courts certainly argues in favour of their existence; but as has rightly become a focus in recent years, we should critically examine how the international judicial environment as a whole should operate and be organized. If the objective is not only to settle discrete disputes but also to signal the rule on a particular question to other international actors, are more courts better, or should the courts that already exist be better utilized? Should we seek to impose a formal, or perhaps even informal, hierarchy among international courts, such that the system as a whole will serve to self-correct itself, or is better to channel the benefits of diversification by allowing specialized courts to operate in their own semiautonomous spheres? Does the absence of involuntary compulsory judicial

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review enable the international system to operate more efficiently, or does it sacrifice international law at the altar of political expediency? Is it possible to knit together a cohesive international judicial system, or is it better to allow for the organic, and sometimes sporadic, development that has characterized the system to date? In what follows, I will attempt to touch on these and related questions by first briefly tracing the history of international courts. The purpose will be to identify the sources of the international judicial system that we see today. Given their impact on the development of the modern system, I will pay particular attention to the creation and experience of the pcij and its successor, the icj. The second stage in my analysis will be to examine the current context and, specifically, the so-called proliferation of international courts. In the course of this discussion, I will seek to critically examine the effect of such proliferation, taking into account both the history and the current use and impact of international courts. I will also focus on the unique role of the icj as the judicial environment as a whole has become more crowded and examine how, in the absence of a formal, uniform hierarchy among international courts, the icj seemingly continues to exert a preeminent jurisprudential influence. Finally, I will look forward, and put forth what I view as the future logical development of the international judicial system. Looking forward is always a risk—I will be the first to admit that—and chances are that there are developments that will occur in both the near and distant future that no one will have foreseen; however, based on the international community’s collective experience over the last 100 or so years, I think it is possible to make some defensible hypotheses on where the arc of development of the international judicial system may be leading. I

A Brief History of International Courts

As I noted in my introduction, for much of its existence, modern international law was characterized by its lack of international judicial institutions. That does not mean, however, that the ideas underlying the current system were absent. To the contrary, the idea of engaging third parties for the impartial adjudication of disputes between nations—as well as peoples—traces back to the early records of human existence, reflected in the Christian, Islamic, Judaic and other religious texts, as well as the records of the Egyptian, Babylonian, Persian, Hellenic and Roman civilizations.

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However, it is true, I think, that these ideas about the adjudication of international disputes and, particularly, the submission of international disputes to binding judicial adjudication, were not realized in what could rightly be called a generally applicable and institutionalized way, until the creation of the pcij in 1922. Given its novelty as the first standing international tribunal with general jurisdiction, the pcij was, perhaps surprisingly, quite effective. Over the course of its 24 or so years of existence, five of which were stricken by the Second World War, the pcij dealt with 29 contentious issues between States, and delivered 27 advisory opinions. In its jurisprudence, we see some fundamental early opinions that have shaped the current judicial environment—Wimbledon, Lotus, Mavrommatis, Factory at Chorzów, Free City of Upper Savoy and the District of Gex, Free City of Danzig, to name a few. Another important indicator of the pcij’s success was how its decisions were taken by the parties appearing before it. As you can imagine, it was quite a shift in the attitude of States and governments at the time to submit their disputes to judicial adjudication—still further was resolve necessary to take the decision—favourable or unfavourable—and implement it; and yet one of the legacies of the pcij is that its decisions were largely followed. Part of this success is owed to the way in which the institution was created. As many of you are no doubt aware, the pcij was not formally an organ of the League of Nations. Rather, while the Covenant, in its Articles 13 and 14, provided for the establishment of the pcij, its Statute was an independent international instrument. This made the pcij available to States even if they were not Members of the League. Moreover, in certain circumstance, States that were not parties to its Statute could also appear before the Court. In this sense, even though the pcij was comprised largely of European States with shared values and approaches to international law, it was the first truly international judicial forum serving all nations—it had, in effect, the imprimatur of openness and inclusivity. In addition, I believe another part of the pcij’s success can be tied to the independent quality of its opinions and the excellence of its judges. If you have a chance to go back and read some of the jurisprudence of the Court, you will see the attention to detail and devotion to their craft that these judges practiced. In today’s 140-character Twitter-verse, I really think there is something to be said for the kind of rigorous judicial examination that was undertaken at the pcij. Another element that no doubt led to its success was the balance struck with regard to the Court’s jurisdiction—while the Optional Clause in its Statute allowed for States to accept compulsory jurisdiction, and the Court had similar

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mandatory jurisdiction for disputes falling under certain of the Peace Treaties of Versailles and other international agreements, some of the tension that might have accompanied ipso facto compulsory jurisdiction for all States Parties to the Statute was released by the fundamentally voluntary nature of the Court’s jurisdiction. Such a balance reflected the evolving nature of international relations at the time—on the one hand States guarded their sovereignty, while, on the other, steps were being taken toward a greater international cooperation on issues of mutual concern. Such a balance between State interest and a sort of international conscience remains equally valid today. States’ voluntary acceptance of the jurisdiction of the various international courts continues to represent a core trait of the international judicial system. While we could spend many hours exploring the jurisprudence and institutional underpinnings of the pcij—the aspect that can be gleaned from the foregoing that I think is most instructive, at least for the purposes of today’s discussion, is that it put the Court in a position to be successful. That the institution did, in fact, succeed served as proof that a permanent, universal judicial mechanism could exist and function effectively. What had started as an experiment gradually evolved into a viable and important institution. Of course, international events conspired to spur further evolutions in the international judicial system. In the wake of the Second World War, which the mutual security system envisioned by the Covenant of the League of Nations had failed to prevent, the international community deemed it necessary to bring into being a new international organization. The United Nations, as you all know, was the result—and the icj was created to serve as its principal judicial organ. It is interesting to note that while the United Nations as a whole differed quite drastically from the League of Nations—there was no reasonable analogue to the United Nations Security Council, for instance, in the League—the Charter itself notes that the Statute of the icj “is based upon the Statute of the [pcij]”. Given the relative success of the pcij, the drafters of the Charter clearly faced a question of whether to simply update the existing working model or create a new one. In the end, the decision to build the Court de novo, which was taken by the four Sponsoring Powers—China, the Soviet Union, the United Kingdom and the United States—in the Dumbarton Oaks proposals was made largely on the basis that the dissolution of the League rendered similar action necessary with respect to the closely-linked pcij. Underlying these justifications there seemed to be a feeling that the post-Second World War era necessitated a clean break from the inter-War institutions that had not been effective enough to save the world from the scourge of war.

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In its form and functions, however, the icj clearly benefited from the rich practice and established procedures of the pcij, and there are obvious similarities in the foundational instruments of the two institutions. Importantly, like the pcij, the icj’s compulsory jurisdiction was the subject of an optional clause. However, as in all cases of succession, the icj also acquired a distinct international personality. Many of its founding principles are novel. Unlike the pcij, for instance, which had been linked to the League, but not nested within it, the new Court was established as an integral part of the United Nations. The Charter of the United Nations lists the icj among the principal organs of the United Nations, together with the General Assembly, the Security Council, the Economic and Social Council, the Trusteeship Council and the Secretariat. Moreover, the Statute of the Court was annexed to the Charter to further emphasize and secure the special place of the new judicial body in the United Nations system. The Charter also drew clear intra-organizational linkages between the Court and the other principal organs. Article 96 of the Charter, for instance, granted both the General Assembly and the Security Council the power to request advisory opinions on “any legal question”. United Nations specialized agencies were also given the ability to request advisory opinions on “legal questions arising within the scope of their activities”. Moreover, in accordance with Article 94, if any party to a case failed to perform the obligations under a judgment rendered by the Court, the other party may have recourse to the Security Council, which may, if it deemed necessary, make recommendations or decide upon measures to be taken to give effect to the judgment. Any action by the Security Council in this regard is, of course, subject to the veto, and in the Nicaragua case the limits of this enforcement power came into stark relief. Nonetheless, it is possible to see the clear evolution in the institutional foundations from the pcij to the icj. The ambitions of the United Nations as a whole were reflected as well in this new judicial institution. II

The Current Context—The Proliferation of International Courts and the Role of the icj

Despite the energy that accompanied its creation, and an active first few years, over the course of its first few decades as a whole, the icj was not a particularly busy institution. While its early cases were integral—Corfu Channel as well its advisory opinions in Reparations and the Reservations to the Convention on the Prevention and Punishment of Genocide cases, to name a few—and its jurisprudence in the 1960s and 1970s—think of the Certain Expenses and South West

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Africa advisory opinions, and the contentious proceedings in the North Sea Continental Shelf and Fisheries Jurisdiction cases—laid some of the jurisprudential foundations for its decisions that would come later, there were entire years during the 1950s and 1960s where the Court laid essentially dormant, devoid of a serious caseload. This did not mean, however, that the international judicial system as a whole was not undergoing some rather radical changes. The creation and early stages of development of the icj coincided with a new trend in international relations—exemplified by a general increase in global, regional and sub-regional cooperation. States, whether firmly established or newly created, gave substance to their desire for closer relations and mutually beneficial alliances through the creation of a number of new organizations including, and perhaps most interes­ tingly given the relative lack of such institutions previously—courts. Part of the force driving the development of these new courts was, I think, a feeling on a part of the founders of the various cooperative alliances and other regional and international organisations, that judicial authority and, in some cases, judicial review, as well as the legitimacy that came along with it, was a necessary part of the overall package of incentives and assurances that States needed in order to comfortably enter into cooperative arrangements. Accordingly, the so-called “proliferation” of international courts finds its roots in the creation institutions such as the European Court of Human Rights, which was created in 1950; the European Court of Justice, which was created in 1957; the Inter-American Court of Human Rights, the African Court on Human and People’s Rights and so on. Over the ensuing decades a number of other specialized courts emerged. The far-reaching International Tribunal for the Law of the Sea (itlos) began its work to adjudicate disputes falling under the regime of the United Nations Convention on the Law of the Sea. The World Trade Organization (wto) and the General Agreement on Trade and Tariffs (gatt) gave rise to their own dispute settlement regimes. The International Centre for Settlement of Investment Disputes (icsid) emerged as an especially prolific venue for the settlement of investment-related disputes, including between States and foreign investors. The list goes on from there. Perhaps no single area of the law has seen as much proliferation and development as international criminal law. On the shoulders of the Nuremburg and Tokyo tribunals a whole range of international and hybrid criminal courts and tribunals were formed to establish individual international criminal responsibility. From the International Criminal Tribunal for the former Yugoslavia (icty) and the International Criminal Tribunal for Rwanda (ictr), to the Special Court for Sierra Leone (scsl), the Extraordinary Chambers in the

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Courts of Cambodia (eccc), the Special Tribunal for Lebanon (stl), and, importantly, the International Criminal Court (icc). In a certain sense, these international criminal tribunals were experimental, ambitious projects. However, they proved to be serviceable and, to a large extent, effective—building a basis for delivering international criminal justice and eliminating impunity both outside, during, and in the aftermath of conflict. The icc was a natural continuation of the accumulated experience that had started in the late 1940s and regained momentum in the early 1990s. The impressive membership of 122 States Parties to the Rome Statute of the icc clearly demonstrates the commitment on the part of the international community to make international justice and the elimination of impunity a reality. Despite the achievements of these new international courts, the proli­ feration of international courts in general has been criticized by many. The multiplication of such mechanisms results in two separate but related phenomena—first, so-called “forum-shopping” on the part of States, and second, the possibility of overlapping and/or incompatible decisions. The former feeds into the fear that States only use international courts when they are reasonably certain that they will receive a positive decision—allowing them, to some extent, to escape what may be difficult decisions of policy by hiding behind the judicial process—while the latter gives weight to the tendency toward the fragmentation of international law, an issue which has been percolating for some time, and which gives international lawyers some pause as they critically examine their system as a whole. To a certain extent, however, I think these criticisms, and the reasons that lay behind them, are over-emphasized in the discourse. Forum-shopping, to the extent that it exists, is not without its positive effects. Competition among the courts may have the effect of stimulating their development. As  they say, “necessity is the mother of invention”—and when international courts compete for cases, it may not necessarily be a race to the bottom. Rather, those courts that can put forth a sustainable and reliable jurisprudence—getting the legal answers themselves right, rather than placating to particular parties—may, in fact, be the most effective over the longer-term. More recent international instruments even incorporate forum-shopping possibilities into their dispute settlement provisions. For instance, a unique and unprecedented system was introduced in the United Nations Convention on the Law of the Sea, which provides for four dispute settlement forums, including itlos, the icj and two other binding forms of arbitration under Annexes vii and viii of the Convention.

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I would suggest that the most effective way to engage with such “cafeteriastyle” adjudication, as it has also been called, is to remain optimistic, while also keeping a critical eye on how the system functions. It may indeed be the case that such structures serve to undermine the integrity of the international legal system, and that it will inevitably leads to a politicization of the legal field. However, that kind of outcome is not predetermined and it sells some of the States that are using these mechanisms short if we assume only the worst possible scenarios. The other main aspect of the new system that I think bears particular attention is, as I mentioned, the prospect of overlapping or incompatible decisions on cases with similar subject matter. If such decisions were to occur on a large scale, it may result in the general breaking down of the integrity of the international judicial system. Parties appearing before the various courts may receive conflicting signals about what the law actually is—which, in a fundamental way, represents the task of the judicial institutions. A classic example of what might be categorized as an overlapping decision is that which was reached in the Tadic case before the icty. In Tadic, the Appeals Chamber of the icty deviated from the well-established “effective control” standard of State responsibility applied by the icj since the Nicaragua case and replaced it with the principle of “overall control”. While no State was a party before the icty—that decision was focused, you will recall, on individual criminal responsibility—this decision brought some uncertainty to the important sphere of State responsibility. Since both the icj and the icty are considered by States to be highly authoritative sources of the interpretation of the law, the decisions created a gray area; where previously States had been presented with a more unified interpretation of the law, the icty’s decision created some doubt. Situations such as Tadic will no doubt continue to occur, and international lawyers as well as others in the international community, will be wellserved by maintaining their awareness of such developments and holding judicial institutions accountable for their jurisprudence through critique, commentary, study and other similar means. Through this kind of attention and discourse, judicial decisions that are truly overlapping or incompatible will be properly understood as such, and the international community will be able to move toward broadly accepted interpretations of complex legal questions. Taken together, these two aspects of the new international judicial system give rise to an important question about the lack of a formal hierarchy. In most domestic systems, for instance, forum-shopping and overlapping decisions are ironed out through a formal process of appeals accompanied by the principle

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of stare decisis. In the international system, no such formal review process or principle exists across the various courts. Despite the lack of formal hierarchy among the international courts and tribunals, there is a general consensus that the icj is the informal “leader of the pack”. This is evidenced in the Court’s experience over the course of its existence, both in terms of the cases that have come before it and how those cases have been interpreted by other courts and by the international community writ large. As I have mentioned, in its first few years of existence the years the Court was relatively active. At that point States were interested in the possibilities offered by the new judicial mechanism and optimistic about the development of international justice. This phase in the work of the Court was a part of the global post-war commitment to international law and judicial settlement of disputes that seemed to spread across the continents. In the early cases of the Court, with the exception of a few outliers brought by the main protagonists of the Cold War, States brought cases of genuine legal, rather than political, disputes. Those included the Corfu Channel case that I have already mentioned, as well as the Fisheries case, the Asylum case, the Haya De La Torre case and others. States’ compliance with the judgments of the icj was also extremely high at this point—leaving aside, for the sake of argument, the refusal of Albania to pay damages to the United Kingdom in the Corfu Channel case. After this early rush of activity, however, the Court’s workload began to wane considerably. Much of this can probably be traced to the larger political dynamics of the period. As the Cold War intensified, the number of cases brought before the Court dropped precipitously. The gaps in submissions in this period are striking—on occasion the Court went three or four years without receiving any new cases. When the Court did receive new cases, it often took long periods for an opinion or decision to be reached. This, combined with the feeling among developing States that the Court was acting to carry out more powerful interests, served to limit the Court’s docket. Of course the Court then undertook what was perhaps its most controversial case, first finding that it had jurisdiction, and then issuing its judgment against the United States in the Nicaragua case. Nicaragua was notable for many reasons, but for the purposes of this discussion, I will say only that it showed both the potential and the limits of the icj. By engaging in a politically charged issue and finding against one of the world’s superpowers, the icj asserted for itself a main role in international affairs. At the same time, the icj’s decision was not without negative effects in terms of the power of the institution—the United States rescinded its acceptance of

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the icj’s compulsory jurisdiction, and other States followed suit, either removing or limiting their acceptance to exclude certain categories of politically sensitive disputes. Whatever the precise impact of Nicaragua may have been, and I will leave that to others to determine more conclusively, over the last two-plus decades, we have nonetheless seen a dramatic increase in the icj’s docket, as well as a rather dramatic shift in perception of the Court by States. As a result, not only is the Court busy, but it is also increasingly looked to for the final word on legal issues—both by the parties who are subject to the dispute in question and to other States who may be seized with similar concerns. In my view, several factors are particularly relevant for assessing the reasons for such success. First and foremost, despite the proliferation of the international courts that I have noted, only the icj has general jurisdiction. As specified in its Statute, the unique mandate of the Court “comprises all cases which the parties refer to it and all matters specially provided for in the Charter of the United Nations or in treaties and conventions in force”. This gives the Court the opportunity to opine on a wide-range of issues, which the other, more specialized courts, are not necessarily free to do. Second, the bench of the Court, as well as the counsel for the parties appearing before it, has shown exceptional legal expertise, resulting in decisions of a high caliber and authoritative value. This is a legacy that began with the pcij and continues today, both in the minds of jurists and in the perceptions of governments submitting their disputes to the Court. Third, many recent judgments and opinions of the Court provided longawaited answers to complex politically-laden cases. In this sense, I am thinking of, among others, the Kosovo, Wall and Legality of the Threat or Use Nuclear Weapons advisory opinions, as well as the array of contentious cases that touched on sensitive issues for the States involved, such as the Armed Activities and Jurisdictional Immunities cases, to name a few salient examples. Fourth, the Court has become increasingly “client-oriented”, offering convenient and effective means for the peaceful resolution of the differences between the States. A main part of this client-orientation is the speed with which decisions are delivered. In its early years, cases before the icj lasted for many years. However, through improvements in its case-management techniques, the Court has managed to speed-up proceedings significantly. This has made recourse to the Court much more palatable for parties who need answers to pressing questions. It is a practical, operational aspect of the Court that has had a substantial effect on its success. Fifth, the Court has experienced a steady increase in the volume of its cases where the legal principles are relatively well-established, particularly with

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regard to territorial and maritime delimitation cases. Over the history of international law, border disputes were a major cause of political tensions in bilateral relations, costing States significant resources to resolve. The icj has expertly moved to afford an important service to States in this regard—providing highly beneficial, and cost-effective, delimitation solutions. Along with this increase in caseload and appeal of the Court, we have seen a larger number of States, particularly developing States, accepting—or openly considering to accept—the jurisdiction of the Court. To further boost this momentum and encourage Member States to refer their legal disputes to the Court, the Secretary-General launched a campaign in 2013, aimed at increasing the number of States that recognize the compulsory jurisdiction of the Court under Article 36, paragraph 2, of the Court’s Statute. Advocating for the withdrawal of the reservations that States may have to compromissory clauses in multilateral treaties to which they are a party has also been a focus. Such campaigns carried out by the United Nations and supported by its Member States are essential to further promote the status of the Court and highlight the importance of the peaceful settlement of international disputes more generally. Other inspiring trends include the growing compliance of the States with the judgments of the Court—here I am thinking of the recent Maritime Dispute case between Peru and Chile, where the preparatory measures taken by the parties prior to the issuance of the final judgment represents a sort of template for compliance—as well as the significant number of citations of icj judgments and opinions by both other judicial institutions and political actors. On this latter point, while I do not have the empirical analysis, as a participant in the discourse surrounding many politically sensitive issues, I can tell you that I am increasingly seeing the influence of the work of the icj—and the influence of legal analysis in general—on how the international community approaches issues of mutual concern. III

Looking Forward

Over the course of these remarks, I have tried to give an overview of what I see as the past and current context of the international judicial system. With your indulgence, I would now like to put forward a few thoughts on what we may see in the future. In my view, what we are likely to see is a settling in among the various ­judicial institutions; those that are “successful”, defined as being both practically useful and substantively respected, will gain influence, while other

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i­ nstitutions, either through mistakes in their creation, or through poor practice and implementation, will fade or lose influence. The various courts will compete, and some will win out over others. I also think we will continue to see courts relying on each other’s jurisprudence, not because of formal rules on hierarchy, but because it is a natural part of the judicial process to be aware and use the determinations of other judicial actors. For those empirically-minded among the audience, I think it will remain important to track such citations, drawing inferences along the way about the impact of particular institutions, including the icj. Going a step further, and perhaps more optimistically, I think we will also see courts formally relying on the icj for authoritative assessments of the law, either through requests for advisory opinions or some other formal means of inter-court cooperation. I also think it’s possible that political actors, such as the organs of the United Nations, may request more advisory opinions from the icj on politically sensitive issues. The arc we are seeing is bending toward a greater judicialization of complex political questions, and I think that trend is likely to continue, with States relying more and more on the clear answers that the law often provides (and politics often does not). Whether we see such practices materialize in the future is not for me or any other single person to decide, but I think it will be extremely interesting to watch as the story of the international judicial system continues to unfold.

chapter 3

The Cases Where the International Court of Justice Lacked Jurisdiction: A Brief Analysis and Commentary Rita Teixeira and Ricardo Bastos The importance of the International Court of Justice (icj or Court) is beyond question: 160 cases have made it to the general list of the Court since 1947; to the present date, 70 countries have made declarations under the optional clause of Article 36(2) recognizing the Court’s jurisdiction as compulsory; dispute resolution clauses in thousands of international agreements mention it. With a record of more than half a century of case law, the un Court solved a considerable number of disputes between states, avoiding international conflicts. This chapter will, however, focus on the cases where that was not possible to achieve—the cases where the icj decided it lacked jurisdiction. Even though it has been a matter disputed in over fifty proceedings, only in a few of them did the icj refuse to assess the merits on the grounds that it did not have jurisdiction to entertain them. This brief study will look at those cases and list and analyze what were the Court’s grounds and reasoning. Its aim is to synthetize in what circumstances cases before the icj may fall outside its scope of jurisdiction and contribute to the task of determining where the line is drawn. I Introduction 1. The basis for jurisdiction of the International Court of Justice (icj or Court) is the consent of the states parties to a dispute.1 This consent may be expressed: (i) by the conclusion of a special agreement (compromis); (ii) through the inclusion of a jurisdictional clause in a treaty (compromissory 1 In the words of the icj, the principle that “the Court can only exercise jurisdiction over a State with its consent” is “a well-established principle of international law embodied in the Court’s Statute” - Case of the monetary gold removed from Rome in 1943 (Italy v. France, United Kingdom and usa), Preliminary Question, Judgment of 15 June 1954, icj Reports 1954, p. 19, at 32. See also East Timor (Portugal v. Australia), Judgment of 30 June 1995, icj Reports 1995, p. 90, at para. 26.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_004

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clause);2 (iii) by virtue of declarations made by states recognizing the Court’s jurisdiction as compulsory, in relation to any other state accepting the same obligation, in all legal disputes concerning the matters specified in Article 36(2) of the icj Statute (optional clause); or by accepting jurisdiction for a case brought against them, on the terms of the Forum Prorogatum doctrine.3 As such, the scope of the icj’s jurisdiction depends directly on the willingness of states to consent to the adjudication of disputes by it—and considering the importance of the issues that may be at stake (more frequently than not, of a political nature), it does not come as a surprise that they have been reluctant do so.4 For this same reason, states that appear before the Court as respondent often present preliminary objections to jurisdiction.5 2. The Court has jurisdiction to decide any dispute regarding the scope of its own jurisdiction (a power commonly referred to as compétence de la compétence), by virtue of Article 36(6) of its Statute, and it has done so in a considerable number of cases. In the majority of them, it rejected the preliminary objections and found that it could address and adjudge the dispute-matter. Nevertheless, there have been cases where, due to a series of different reasons, the icj could not find a basis to establish its jurisdiction and has determined

2 Generally, through a compromissory clause the states parties agree in advance to submit to the Court any dispute concerning the implementation and interpretation of a treaty. 3 According to the Forum Prorogatum doctrine, if a state has not recognized the jurisdiction of the Court at the time when an application instituting proceedings is filed against it, that state has the possibility of accepting it subsequently to enable the Court to entertain the case. The PCIJ has upheld its jurisdiction even where consent has been given after the initiation of proceedings in an implied or informal way or by a succession of acts – see, inter alia, cases Mavrommatis (1924), pcij Series A, No. 2, p. 34, and The Rights of Minorities of Upper Silesia (1928), pcij series A/B no. 15, pp. 24-26. However, the icj has also stressed out that the fact that the respondent state has not refused to appear before the Court and has participated in the procedures and made submissions can not be interpreted as consent to the Court’s jurisdiction over the merits if the very purpose of this participation was to challenge that jurisdiction – see Armed Activities case (drc v. Rwanda), para. 22. 4 Similar conclusion in A. Llamzon, Jurisdiction and Compliance in Recent Decisions of the International Court of Justice, 18(5) European Journal of International Law 815 (2007), at 817. 5 As Merrills has noted, “Once a legal act indicating consent has been performed, jurisdiction may be established, even if the state is unwilling to litigate when an actual case arises. There is thus no contradiction between the consensual basis of the Court’s jurisdiction and the fact that the Court is regularly called upon to consider—and frequently rejects as ill-found— objections to its jurisdiction to un-willing respondents”—J. Merrills, International Dispute Settlement (2011), p. 117. It should be highlighted that this is a problem only within the scope of the Court’s compulsory jurisdiction, and not when a dispute is submitted to it by means of a special agreement.

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that it could not judge the merits of the dispute. Those cases will be the focus of this paper. 3. This work will take an approach which is more descriptive and synthetic in nature, rather than doctrinal and theoretical. Hopefully, it should provide a starting point and/or useful data for additional studies on the subject of the delineation of the icj’s jurisdiction. Accordingly, it will present the reasoning adopted by the Court in the contentious cases that were dismissed for lack of jurisdiction, organized into the categories of jurisdiction in which the decision was made: jurisdiction ratione materiae; jurisdiction ratione personae; jurisdiction ratione temporis.6 The list of the cases that were taken into consideration for this study7 and the mode of citation can be found in Annex i. Annex ii provides a table-resume that relates the cases considered with the grounds on which the icj determined it lacked jurisdiction. II

The Cases and the Grounds for Lack of Jurisdiction

a Lack of Jurisdiction Ratione Materiae 4. Article 36(1) sets the rule for the Court’s substantive or material jurisdiction (jurisdiction ratione materiae): it comprises all cases which the parties refer to 6 Regarding the classification of the different questions as falling within the scope of jurisdiction instead of admissibility, as well as belonging to one of the different categories of jurisdiction, this paper will follow the one proposed by the icj. Specific references will be made when relevant. Also, no analysis on jurisdiction ratione loci will be provided since the Court has never decided that it lacked jurisdiction on this particular basis (although it has been already invoked and discussed in, e.g., the Application of the cerd case (Georgia v. Russia), para. 22). 7 The authors only considered the cases that made it to the General List of cases of the icj and not applications that were not added to it by appliance of Article 38(5) of the Rules of the Court. Left outside were also the eight cases (Treatment in Hungary of Aircraft and Crew of the United States of America (United States of America v. Hungary) (United States of America v. ussr); Aerial Incident of 10 March 1953 (United States of America v. Czechoslovakia); Antarctica (United Kingdom v. Argentina) (United Kingdom v. Chile); Aerial Incident of 7 October 1952 (United States of America v. ussr); Aerial Incident of 4 September 1954 (United States of America v. ussr); and Aerial Incident of 7 November 1954 (United States of America v. ussr)) where the Court found that it could take no further steps upon an application in which it was admitted that the opposing party did not accept its jurisdiction but that entered the Court’s General List (only because they were prior to the entry into force of the mentioned article, dated from 1 July 1978). In all these cases, the lack of jurisdiction was not at dispute: the applicant state brought the dispute to the Court in the case the respondent would agree to establish jurisdiction in that particular case, knowing that it would be refused a judgment if that did not happen.

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it and all matters specially provided for in the Charter of the United Nations (un Charter) or in treaties and conventions in force. Under this paradigm, the consent of the states involved in the litigation is the condition for the icj to entertain any contentious case brought before it. It dismissed eight cases8 for having concluded that it lacked jurisdiction ratione materiae. 5. One way for the Court to acquire jurisdiction is by means of declarations made by states under Article 36(2) of the Statute (known as optional clause declarations). It should be noted that, even though the wording of Article 36(5) of the Statute9 seems to transfer the effect of declarations made under Article 36 of the Statute of the Permanent Court of International Justice (pcij) to the jurisdiction of the new court, subsequent rulings have restricted its application to the declarations made by states which were represented at the San Francisco Conference and were signatories of the un Charter and of the Statute of the icj.10 As a consequence, the Court declared itself to be without jurisdiction in the Aerial Incident case (Israel v. Bulgaria), given that Bulgaria’s declaration of consent to the pcij jurisdiction could not constitute consent to the compulsory jurisdiction of the icj. 6. When states make declarations under Article 36(2) of the Statute, they do not necessarily contain an acceptance of the Court’s jurisdiction to adjudge on all matters enounced in the Article: states often make reservations excepting some specific disputes from its consent.11 Therefore, the Court will have jurisdiction only over matters where the consent of the two parties to a dispute coincides (only where there is a common ground). 8 9

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See Annex ii. It reads as follows: “Declarations made under Article 36 of the Statute of the Permanent Court of International Justice and which are still in force shall be deemed, as between the parties to the present Statute, to be acceptances of the compulsory jurisdiction of the International Court of Justice for the period which they still have to run and in accordance with their terms”. The provision operates subject to two conditions: (i) that the state having made the declaration should be a party to the Statute; (ii) that the declaration of that state should still be in force. So far as non-signatory states were concerned, shortly after the entry into force of the icj Statute, the dissolution of the pcij freed them from their obligations. Therefore it cannot be said that their declarations were still in force when they were later admitted to the un - the question of a transformation of an existing obligation could no longer arise as far as they were concerned. Reservations can exclude from the jurisdiction of the Court, e.g., disputes which have to be firstly submitted to arbitration or disputes relating to a certain type of events or conflicts, or, far more commonly, disputes that belong to the domestic jurisdiction of a state.

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In fact, in a number of cases the Court could not consider the merits precisely because the subject matter of the litigation was one covered by a reservation on a state party’s declaration. In the Fisheries Jurisdiction case (Spain v. Canada), for instance, the Court had to consider the reservation made by Canada in 1994, excluding from its jurisdiction “disputes arising out of or concerning conservation and management measures taken by Canada with respect to vessels fishing in the nafo Regulatory Area (…) and the enforcement of such measures”.12 The judges had to analyze its wording and scope and eventually reached the conclusion that it covered the matter in dispute, thus rendering its decision of lack of jurisdiction. Likewise, in the Aerial Incident case (Pakistan v. India), the Court upheld India’s preliminary objections and ruled that it had no jurisdiction to entertain the merits of the dispute. India had made a reservation to its declaration accepting the compulsory jurisdiction of the Court under Article 36(2), according to which it would have no jurisdiction over disputes involving that state and another member of the Commonwealth of Nations. 7. These two cases are examples of more simple or straightforward decisions, where the lack of jurisdiction resulted from a reservation made by the respondent state to its optional clause declaration. However, in a number of cases the Court had to consider a reservation made by the applicant—in light of the reciprocity principle. Through the application of this principle, a state party in a dispute is entitled to invoke a reservation to the declaration under Article 36(2) made by the other party.13 As a consequence, the Court will have to analyze the most restrictive reservation within the declarations made by the states parties to a dispute in order to ascertain jurisdiction, as it is enjoyed only to the extent to which the declarations coincide. This principle was applied in the Norwegian Loans case (France v. Norway), where the respondent state claimed that it was entitled, by virtue of the condition of reciprocity, to invoke the reservation contained in the French optional clause declaration (relating to matters within its national jurisdiction).14 The 12 Fisheries Jurisdiction case (Spain v. Canada), para. 14. 13 The icj has already highlighted that the concept of reciprocity concerns the scope and substance of the commitments, including the reservations. See Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America), Jurisdiction and Admissibility, Judgment, i.c.j. Reports 1984, p. 392. Para. 62 reads: “The notion of reciprocity is concerned with the scope and substance of the commitments entered into, including reservations, and not with the formal conditions of their creation, duration or extinction”. 14 The reservation reads as follows: “This declaration does not apply to differences relating to matters which are essentially within the national jurisdiction as understood by the Government of the French Republic”.

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decision of the Court in this case was that “in accordance with the conditions of reciprocity to which acceptance of the compulsory jurisdiction is made subject in both Declarations and which is provided for in Article 36, paragraph 3, of the Statute, Norway, equally with France, is entitled to except from the compulsory jurisdiction of the Court disputes understood by Norway to be essentially within its national jurisdiction”.15 Having in consideration that Norway submitted that the dispute between the two parties was within the jurisdiction of its municipal law, the Court gave full effect to the reservation and declined to exercise jurisdiction.16 It is interesting to note that reservations as the one made by France—the so-called “automatic reservations”17—have seen their legality questioned, since it should be up to the Court (and not states) to determine under Article 36(6) of the Statute whether or not it has jurisdiction over a given case. Judge Lauterpacht has criticized these reservations in its dissenting opinions to the Norwegian Loans case (France v. Norway) and the Interhandel case (Switzerland v. usa),18 stating that Governments are free to accept the jurisdiction of the Court and to limit it to a minimum, but that minimum, “if it is to be a legal obligation, must be subject to determination by the Court itself and not by the Government accepting it”.19 Such doubts about the validity of these reservations may lead to its rejection in future rulings. 8. The ICJ can also have jurisdiction by means of a compromissory clause in a specific treaty or convention. Nowadays, it is estimated that over 300 treaties have a clause by which the parties agree to accept the jurisdiction of the Court in case of a dispute concerning its application or interpretation.20 Such clauses only confer jurisdiction to the Court to solve disputes within the exact scope of its wording—usually to matters arising from

15 16 17

See Norwegian Loans case (France v. Norway), p. 19. Id., p. 22. The term is applied to a reservation to a declaration under the optional clause of Article 36(2) of the icj Statute that aims at excluding disputes from the jurisdiction of the Court solely by determination of the reserving state. These reservations often exclude from the Court’s jurisdiction matters that fall within the domestic jurisdiction of that state. 18 Norwegian Loans case (France v. Norway), Dissenting Opinion of Judge Sir Hersch Lauterpacht, p. 60; Interhandel (Switzerland v. United States of America), Judgment of March 21st, 1959: icj Reports I959, p. 6, Dissenting Opinion of Judge Sir Hersch Lauterpacht. 19 See Norwegian Loans case (France v. Norway), Dissenting Opinion of Judge Sir Hersch Lauterpacht, p. 60. 20 See icj faq, available at: http://www.icj-cij.org/information/index.php?p1=7&p2=2.

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the  application or interpretation of the treaty.21 Unless otherwise provided, states can make reservations to these com­ promissory clauses. States  have also celebrated treaties with the general aim of  promoting peaceful settlement of disputes that constitute general acceptances of jurisdiction—but those have proven less successful as they received little support.22 In the Legality of Use of Force case (Yugoslavia v. usa) (Order of 2 June 1999), the Court ruled that the respondent state’s reservations to the Convention on the Prevention and Punishment of the Crime of Genocide excluded the dispute from the scope of jurisdiction of the icj. The usa reservation provided that, with reference to Article ix of the Convention, the state had to give specific consent in each case before any dispute in which it was called to be a party could be submitted to the jurisdiction of the Court. This meant that the effects of the compromissory clause were, in fact, completely excluded, and in the absence of specific consent the Court ruled that it could not exercise jurisdiction in the case, even prima facie. Similar situations were found in the Armed Activities case (drc v. Rwanda) and in the Continental Shelf case (Greece v. Turkey), where the Court declared that compromissory clauses invoked by the respective applicants as basis for jurisdiction could not be relied upon since the respondent state had made a reservation regarding them when acceding to the Convention in question. 9. It may also occur that compromissory clauses establish procedural preconditions that states must fulfill before they can submit a dispute to the icj— requirements of previous attempts at negotiations or recourse to arbitration are quite common, noting a preference by the states for negotiated solutions.23 Such dispositions also constitute limits to the parties’ consent to jurisdiction. According to previous icj rulings since “[the Court’s] jurisdiction is based on the consent of the parties and is confined to the extent accepted by them”, “[w]hen that consent is expressed in a compromissory clause in an international

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In the Armed Activities case (drc v. Rwanda) the Court determine that the compromissory clauses of the unesco Constitution, the Montreal Convention and the who Constitution did not constitute a basis for jurisdiction since it did not find the disputematter to be related with the interpretation of these Conventions. See Merrills, supra note 5, at 117. For an analysis on this, by reference to the Application of the cerd case (Georgia v. Russia) see W. Lane, Keeping Good Faith in Diplomacy: Negotiations and Jurisdiction in the icj’s Application of the cerd, 35 b.c. International and Comparative Law Review 33 (2013). Available at: http://lawdigitalcommons.bc.edu/iclr/vol35/iss3/3.

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agreement, any conditions to which such consent is subject must be regarded as constituting the limits thereon”.24,25 In those situations, if the applicant state has not satisfied the conditions established therein, the icj will determine that it does not have jurisdiction to adjudge on the merits of the dispute on that basis, as it has done in the Application of the cerd case (Georgia v. Russia). In this judgment of 1 April 2011, the Court uphold Russia’s interpretation of the wording of Article 22 of the Convention on the Elimination of All Forms of Racial Discrimination (“[a]ny dispute…which is not settled by negotiation or by the procedures expressly provided for in this Convention”) as establishing preconditions to be fulfilled before submitting the case to the Court, concluding that Georgia had not acted accordingly. In the Armed Activities case (drc v. Rwanda), in 2006, the Court had already used the same reasoning to refuse to rely on several of the compromissory clauses invoked by the Democratic Republic of the Congo (drc) as a basis for jurisdiction. For instance, both Article 75 of the Constitution of the World Health Organization and Article 29(1) of the Convention on Discrimination against Women provide that the icj will have jurisdiction in respect of disputes that could not be solved by negotiation nor by other dispute settlement mechanisms referred therein, and the drc did not prove that it had previously resorted to those. b Lack of Jurisdiction Ratione Personae 10. Although the issues related to the consent of the states involved in litigation may be the most common grounds to deprive the icj of jurisdiction to entertain contentious cases, they can only be addressed with the precondition that the states parties are qualified to have access to the Court. In this regard, Article 35 of the icj Statute, the principal provision dealing with the Court’s jurisdiction ratione personae,26 establishes that as a general rule the Court is open to all

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Armed Activities case (drc v. Rwanda), para. 88. It has been debated whether the precondition of previous resort to negotiations (or other dispute settlement mechanisms) constitutes an issue of jurisdiction or one of admissibility, and the position of the icj has been to relate it with the scope of jurisdiction – see Armed Activities case (drc v. Rwanda), para. 88. Also, see supra note 6. As to the exact legal nature of this precondition, the position adopted by the icj itself is endorsed: “It should first be observed that the question whether or not a State meets the conditions of Article 35 of the Statute can be regarded either as an issue relating to the Court’s jurisdiction ratione personae or as an issue preliminary to the examination of jurisdiction. The Court sees no need to settle this debate, any more than it felt obliged to do so in its earlier decisions. Where the conditions of Article 35 are not met, the Court is without jurisdiction to adjudicate the dispute on the merits” – Application of the Convention on

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states27 party to its Statute, in accordance with paragraph 1, and others states are only entitled to appear before it under the conditions established in paragraph 2. The right, thus delimited, of the states involved in a case to access the Court is fundamental—as the icj has put it itself: “[t]he Court can exercise its judicial function only in respect of those states which have access to it under Article 35 of the Statute. And only those states which have access to the Court can confer jurisdiction upon it”.28 When an objection is raised by the respondent state regarding jurisdiction ratione personae, it should be the first question to be decided. 11. This right was disputed in the Legality of Use of Force cases, initiated on 29 April 1999 by the former Federal Republic of Yugoslavia (later, Serbia and Montenegro) against ten member states of nato, “for violation of the obligation not to use force”. Besides the cases against the usa and Spain—that the Court adjudged were prima facie outside its scope of jurisdiction29—in all the others the icj took the position, unanimously, that it could not proceed to the merits because it lacked jurisdiction ratione personae since the applicant did not have access to the Court at the time of application. It must be noted that these cases were the result of a series of historical facts and conditions that will not likely be repeated. In fact, the paramount issue was whether the Federal Republic of Yugoslavia was the continuator state of the Socialist Federal Republic of Yugoslavia (SFRY) as a member of the un (after the break-up of the latter in 1991-1992).30 In the absence of an authoritative determination by the competent organs of the organization defining clearly the legal status of Yugoslavia, it remained ambiguous and open to different assessments during the period 1992-2000. This situation only came to an end on 2000, when the state requested admission to membership in the un and it was so admitted. Therefore, at the time of filing its application the state was not a member, neither a state party to the Statute of the icj (also, not having become a party to the Statute on any other basis) and the Court was not open to it under Article 35(1) of the Statute.

27 28 29 30

the Prevention and Punishment of the Crime of Genocide (Croatia v. Serbia), Preliminary Objections, Judgment of 18 November 2008, icj Reports 2008, p. 412, para. 66. The Statute of the icj determines that, for contentious jurisdiction, only states can be parties before the Court - Article 34(1). Legality of Use of Force case (Serbia and Montenegro v. Netherlands), para. 44. Legality of Use of Force cases, Orders of 2 June 1999. See para 8. of this paper. For a complete analysis of the complicated litigation involving the capacity of Yugoslavia following the dissolution of the sfry see Shabtai Rosenne, Capacity to Litigate in the International Court of Justice: Reflections on Yugoslavia in the Court, 80(1) British Yearbook of International Law 217 (2009).

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The Court further concluded that the compromissory clause of the Convention on the Prevention and Punishment of the Crime of Genocide (invoked by the applicant state as a basis for establishing the Court’s jurisdiction) did not provide it with access to the Court under Article 35(2) of the Statute,31 since it did not enter into force before the latter. c Lack of Jurisdiction Ratione Temporis 12. The jurisdiction of the icj can also be limited by temporal factors—the socalled jurisdiction ratione temporis. The Court found it had no jurisdiction to decide on the merits on this ground in three cases.32 In the Certain Property case (Liechtenstein v. Germany) the respondent state, besides arguing that there was no dispute to begin with, submitted that the Court lacked jurisdiction ratione temporis because the relevant facts were prior the parties consent to the icj’s jurisdiction. Both states referred to, among others, the Phosphates in Morocco case from the pcij, where the Court applied a test for establishing jurisdiction ratione temporis (which consisted on finding the real cause of the litigation).33 The icj found this previous jurisprudence to be relevant to the case. It found that the real cause of the litigation was the legislative decrees dated from 1945 under which certain property owned by Liechtenstein nationals was confiscated and, in consequence, upheld Germany’s preliminary objection. In fact, they were prior to the entry into force between the parties of the Convention upon which the applicant state based the Court’s jurisdiction (the European Convention for the Peaceful Settlement of Disputes of 29 April 1957, in 18 February 1980). In the Anglo-Iranian Oil Co. case (uk v. Iran) the Court had to consider the reservation made by Iran to its declaration under Article 36(2). According to the respondent, it limited the jurisdiction of the Court to treaties subsequent to the entry into force of that declaration—and the uk was unable to prove otherwise. Therefore, the Court concluded that it was without jurisdiction ratione temporis, considering also historical conflicts of Iran and the fact that 31

32 33

The Court decided on a restrictive interpretation of the provision of Article 35(2), interpreting the words “treaties in force” as referring to treaties that were in force at the time that the Statute itself came into force. It supported this decision on an argument of consistency with the main thrust of the text and with an analysis of the travaux préparatoires, from which results that the article must be interpreted, mutatis mutandis, in the same way as the equivalent text in the Statute of the pcij. See, for all, Legality of Use of Force case (Serbia and Montenegro v. Portugal), paras. 102 et seq. See Annex ii. Phosphates in Morocco (Italy v. France), pcij Ser. A/B, No. 74. 1938 p. 18.

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Iranian law through which the declaration was approved provided a proof of Iran’s intention on such limitation. Finally, the temporal scope of the icj jurisdiction was at stake in the Legality of Use of Force case (Yugoslavia v. Spain) (Order of 1999). In this case, a reservation made by Spain in its declaration under the optional clause excluded from the jurisdiction of the Court disputes “to which the other party or parties  have accepted the compulsory jurisdiction of the Court less than 12 months prior to the filing of the application bringing the dispute before the Court”.34 Such was the case, so the Court said it lacked jurisdiction prima facie.35 III Conclusion 13. Throughout this paper, the authors set out to list and describe the cases where the icj considered it had no jurisdiction to judge the merits of a dispute. It was possible to conclude that, from all the cases that made it to the General List and had preliminary objections on jurisdiction filled, only nineteen (ten of which were the identical Legality of Use of Force cases) saw a verdict of lack of jurisdiction to entertain the application. The Court has used three bases to justify their dismissal: lack of jurisdiction ratione materiae, lack of jurisdiction ratione personae and lack of jurisdiction ratione temporis. In Annex ii, a table summary synthetizes these data. 14. From this brief analysis, it became clear that the range of legal issues that can arise when the icj is examining the question of jurisdiction is very wide,36 including questions of interpretation of specific reservations made to declarations accepting the compulsory jurisdiction of the Court, the appliance of the  reciprocity principle and compromissory clauses in multilateral treaties (problems within the scope of jurisdiction ratione materiae), as well as questions of recognition and statehood and of membership of the un (problems within  the  scope of jurisdiction ratione personae), or even the determination  of the time of the relevant facts in dispute and either they occurred prior to the  consent given by states (problems of jurisdiction ratione temporis).

34 35

36

Legality of Use of Force case (Yugoslavia v. Spain) (Order of 1999), p. 12. However, as the Court realized in the subsequent judgment of the other Legality of Use of Force cases, Yugoslavia (later, Serbia and Montenegro) was not even a party to the Court Statute at that date. See part II.b. of this paper. As noted in Merrills, supra note 5, at 12.

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This is due, partly, to respondent states not limiting their preliminary objections to jurisdiction solely on one ground, but usually presenting many (including reasons of ratione locis, which were not yet upheld by the Court). icj pronouncements, however, will frequently not address all the objections raised, as they conclude for the lack of jurisdiction the moment they upheld one. Not all these grounds, however, are equally frequent justifications for a pronouncement on lack of jurisdiction. In fact, it became obvious that the main challenge to the Court’s compulsory jurisdiction is formed by reservations made by states to its declarations of consent (either refusing a compromissory clause or limiting its acceptance under Article 36(2) of the Statute). As seen, they can deprive the Court of the power to adjudge and solve certain disputes, either having regard to its subject-matter, either to its timeframe. Judgments of lack of jurisdiction ratione personae, on the opposite, should be  circumscribe to very specific circumstances, and should be quite rare when, at present, 193 states are entitled to appear before the Court, as members of the un. 15. On a final note, it is the authors’ conviction that these cases represent a small percentage in the list of all the cases brought before the icj. As such, they constitute an exception to the general rule, which is for the Court to give a decision on the merits of the dispute, rather than preliminarily dismissing it—even if its actions are directly dependent on the consent given by states (and remembering that cases can still be stop by inadmissibility issues). Only by doing so can the Court serve as a means of promoting peaceful settlement of disputes between states, a fundamental principle of the international legal order. Annex i List of all cases considered and mode of citation ­– Application of the International Convention on the Elimination of All Forms of Racial Discrimination (Georgia v. Russian Federation), Preliminary Objections, Judgment of 1 April 2011, icj Reports 2011, p. 70; cited as: Application of the cerd case (Georgia v. Russia). –­  Armed Activities on the Territory of the Congo (New Application: 2002) (Democratic Republic of the Congo v. Rwanda), Jurisdiction and Admissibility, Judgment of 3 February 2006, icj Reports 2006, p. 6; cited as Armed Activities case (drc v. Rwanda).

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35

–­  Certain Property (Liechtenstein v. Germany), Preliminary Objections, Judgment of 10 February 2005, icj Reports 2005, p. 6; cited as: Certain Property case (Liechtenstein v. Germany). ­– Legality of Use of Force (Yugoslavia v. United States of America), Provisional Measures, Order of 2 June 1999, icj Reports 1999, p. 916; Legality of Use of Force (Yugoslavia v. Spain), Provisional Measures, Order of 2 June 1999, icj Reports 1999, p. 761; Legality of Use of Force (Serbia and Montenegro v. United Kingdom), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 1307; Legality of Use of Force (Serbia and Montenegro v. Portugal), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 1160; Legality of Use of Force (Serbia and Montenegro v. Canada), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 429; Legality of Use of Force (Serbia and Montenegro v. Netherlands), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 1011; Legality of Use of Force (Serbia and Montenegro v. Belgium), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 279; Legality of Use of Force (Serbia and Montenegro v. Italy), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 86; Legality of Use of Force (Serbia and Montenegro v. Germany), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 720; Legality of Use of Force (Serbia and Montenegro v. France), Preliminary Objections, Judgment of 15 December 2004, icj Reports 2004, p. 575; cited as: Legality of Use of Force cases. –­ Aerial Incident of August 1999 (Pakistan v. India), Jurisdiction of the Court, Judgment of 21 June 2000, icj Reports 2000, p. 12; cited as: Aerial Incident case (Pakistan v. India). ­– Fisheries Jurisdiction (Spain v. Canada), Jurisdiction of the Court, Judgment of 4 December 1998, icj Reports 1998, p. 432; cited as: Fisheries Jurisdiction case (Spain v. Canada). – Aegean Sea Continental Shelf (Greece v. Turkey), Jurisdiction of the Court, Judgment of 19 December 1978, icj Reports 1978, p. 3; cited as: Continental Shelf case (Greece v. Turkey). –­ Case concerning the Aerial Incident of July 27th, 1955 (Israel v. Bulgaria), Preliminary Objections, Judgment of May 26th 1959, icj Reports I959, p. 127; cited as: Aerial Incident case (Israel v. Bulgaria). –­ Case of Certain Norwegian Loans (France v. Norway), Jurisdiction of the Court, Judgment of July 6th, 1957: icj Reports 1957, p. 9; cited as: Norwegian Loans case (France v. Norway). –­ Anglo-Iranian Oil Co. case (United Kingdom v. Iran), Jurisdiction of the Court, Judgment of 22 July 1952, icj Reports 1952, p. 93; cited as: AngloIranian Oil Co. case (uk v. Iran).

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Annex ii Table summary of considered cases and their decisions Cases

Lack of Lack of jurisdiction ratione jurisdiction ratione materiae personae

Lack of jurisdiction ratione temporis

Non-fulfillment Application of the cerd case of procedural (Georgia v. Russia)—2011 preconditions

Armed Activities case (drc v. Rwanda)—2006

Inter alia, reservations to compromissory clauses, non-fulfillment of procedural preconditions Relevant facts previous to entry into force of Convention

Certain Property case (Liechtenstein v. Germany) Legality of Use of Force case (Yugoslavia v. usa)—1999 (Order)

Reservation to compromissory clause Reservation to compromissory clause on the temporal scope of consent

Legality of Use of Force case (Yugoslavia v. Spain)—1999 (Order) Legality of Use of Force case (smn v. uk)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. Portugal)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. Canada)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. Netherlands)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

CASES WHERE THE ICJ LACKED JURISDICTION

Cases

Lack of Lack of jurisdiction ratione jurisdiction ratione materiae personae

Legality of Use of Force case (smn v. Belgium)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. Italy)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. Germany)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

Legality of Use of Force case (smn v. France)—2004

Serbia was not party to the Statute; Art. 35(2) did not apply

37 Lack of jurisdiction ratione temporis

Reservation to Aerial Incident case (Pakistan optional clause v. India)—2000 declaration Fisheries Jurisdiction case (Spain v. Canada)—1998

Reservation to optional clause declaration

Continental Shelf case (Greece v. Turkey)—1978

Reservation to compromissory clause

Consent only to Aerial Incident case (Israel v. pcij’s Bulgaria)—1959 jurisdiction Norwegian Loans case (France v. Norway)—1957

Anglo-Iranian Oil Co. case (uk v. Iran)—1952

Reservation to optional clause declaration and principle of reciprocity Reservation to optional clause declaration on the temporal scope of consent

chapter 4

Energy at Sea and the Jurisprudence of the International Court of Justice Dimitra Papageorgiou and Eva Tzavala Over the past years, the uses of the sea have multiplied. States today have a newly found respect for the sea, regarding it as an endless and constantly renewable energy source. The gas and oil industries were the first to invest in the resources coming from the seabed and thus were the first to attract the interest of international law. Contemporary international energy law questions, such as delimitation and state jurisdiction issues, security concerns over energy installations, respect for the marine environment, regulation of energy investments and trade and renewable energy considerations touch upon different fields of international law (i.e. law of the sea, human rights law, environmental law, investment law and of course general international law and maritime law). It is true that international energy law does not have its own monitoring bodies or dispute settlement organs. In investor-state disputes, parties opt for arbitration resolution, mainly the International Centre for Settlement of Investment Disputes (icsid) or an ad hoc Tribunal pursuant to uncitral rules. In terms of interstate disputes, parties often choose either the International Tribunal for the Law of the Sea (itlos) or the International Court of Justice (icj). Due to its universal prestige, the icj is deemed a suitable judiciary organ to address energy questions of transboundary character or impact, especially in relation to the delimitation of international boundaries, use of force and security concerns and global environmental impact from high-risk activities at sea. So far, the jurisprudence of the icj has not dealt to a large extent with issues of energy at sea. However, energy at sea falls within the general scope of the icj’s role to promote and clarify international law. Professor Talus in his recent handbook on international energy law draws a distinction between energy law and resources law,1 which is not followed by the authors of this chapter, since, in our opinion, matters of sovereignty over resources and their exploitation lie at the core notion of “energy”. Energy does

1 K. Talus (ed.), Research Handbook on International Energy Law, Edward Elgar Publishing, 2014, p. 4. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_005

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not entail only the supply of power but, first and foremost, its production (drilling, mining, management of deposits a.o.). This traditional approach generated our interest into a thorough study of the icj’s jurisprudence in order to “extract” the raw materials of our wider research on energy at sea issues. Therefore, the present research focuses on two main categories of claims, which have preoccupied the judges of the icj and are linked to energy questions. In the first part, we will elaborate the methodology of maritime delimitation used by the icj with regard to energy at sea, by closely examining all maritime delimitation cases involving exploitation or exploration rights of maritime zones of coastal states. Particular reference will be made to those interstate disputes that affected already defined or conceded oil exploitation rights. In the second part, we will explore whether the customary substantive norms of international environmental law revealed by the Court’s jurisprudence apply with respect to energy installations at sea. Specific questions to be addressed are the regulation of state liability for transboundary harm and the absence of relevant cases in the icj’s docket as well as the application of the icj’s jurisprudence on nuclear weapons to all uses of nuclear energy.

Part 1: Energy at Sea as a Factor for Determining Maritime Boundaries

Energy resources at sea, their exploration and exploitation, have preoccupied the icj in a number of cases and most of them concerned matters of delimitation of maritime boundaries.2 This comes as no surprise. The unclos, echoing the 1958 Convention on the Continental Shelf, provides that the coastal states exercise over the continental shelf “sovereign rights for the purpose of exploring it and exploiting its natural resources”, independently of any express proclamation.3 By the same token, states have interest in claiming an

2 For an overview, see G. Giraudeau, Les différends territoriaux devant le juge international: Entre droit et transaction, Martinus Nijhoff Publishers, 2013. See also N. Bankes & S. Trevisanut, Energy at Sea, 29(4) International Journal of Marine and Coastal Law 561–572 (2014). 3 United Nations Convention on the Law of the Sea, Vol. 1833 unts 3136, Article 77(1), hereinafter unclos. See also Articles 2(1) and 2(3) of the Convention on the Continental Shelf, Vol. 499 unts 311. The icj in the North Sea Continental Shelf Case recognized that these rights exist ipso facto and ab initio, see North Sea Continental Shelf (Federal Republic of Germany v. Denmark and Federal Republic of Germany v. The Netherlands), Judgment, icj Reports 1969, p. 3, pars 19, 39 and 43. For more information on the rights of the states over the resources in the respective maritime zones, see N. Schrijver, Sovereignty Over Natural Resources: Balancing rights and duties, Cambridge University Press 1997; M. Evans, The Law

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exclusive economic zone (eez), since in the eez they exercise sovereign rights for the purposes of “exploring and exploiting, conserving and managing” both living and non-living natural resources, including the wind and wave power and they also have jurisdiction, among others, over the establishment and use of artificial islands, installations and structures.4 To this end, natural resources are most often the “hidden agenda” of states when they put forward claims of maritime delimitation.5 The icj was called to determine the way that energy resources at sea should be treated as factors that can influence the delimitation of maritime boundaries. It would be useful at this point to recall that the icj, after a long jurisprudence of maritime delimitation disputes presented before it, landed in the Romania v. Ukraine case on a 3-stage approach that it has employed ever since when carrying out maritime delimitation.6 First, the Court establishes a provisional equidistance or median line strictly relying on geometrical criteria.7 Second, it examines whether there are special circumstances calling for the adjustment or shifting of the provisional equidistance line in order to achieve an equitable result.8 At the final stage, the Court applies the proportionality principle so as to confirm that no great disproportionality of maritime areas is evident in each of the parties’ shares. Indeed, the issue of exploration and exploitation of oil and gas has preoccupied states, most of which were engaged in such operations in disputed waters. The existence of energy resources and their subsequent exploitation ignited negotiations and led the disputes before the icj, although states never based their arguments entirely on this basis.

4 5 6

7 8

of the Sea, in M. Evans (ed.), International Law, 3rd edition, Oxford University Press, 2010, pp. 651–686, at p. 671 et seq. Article 56 unclos. Case Concerning the Continental Shelf (Libyan Arab Jamarihiya v. Malta), icj Reports 1985, p. 13, at par. 48. Maritime Delimitation in the Black Sea (Romania v. Ukraine), Judgment, icj Reports 2009, p. 61. The practice and debate with respect to maritime delimitation is portrayed in M. Evans, Maritime Boundary Delimitation: Where Do We Go From Here?, in D. Freestone, R. Barnes & D. Ong (eds), The Law of the Sea: Progress and Prospects, Oxford University Press, 2006, pp. 137–160. See also P. Weil, Perspectives du Droit la Délimitation Maritime, Paris, 1988; S. Jiuyong, Maritime Delimitation in the Jurisprudence of the International Court of Justice, 9 Chinese Journal of International Law 271–291 (2010). Romania v. Ukraine, supra note 6, pars 116–119. Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea intervening), Judgment, icj Reports 2002, p. 441, at par. 288; Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), Judgment of 8 October 2007, at par. 271.

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The first time that energy at sea is mentioned in the jurisprudence of the icj, albeit indirectly, is in the North Sea Continental Shelf case.9 It was at the time obvious that the legal problems to be created by the new technologies and the increasing demand for energy resources coming from the sea would create concerns that should be taken into account when dealing with delimitation. Judge Jessup admits: “…it is hardly necessary to recall that the legal problems with which it deals have arisen out of the rapidly increasing demand for sources of energy and the development of new techniques permitting the extraction of resources from the subsoil of submarine areas. As problems of international law, the problems relating to the exploitation of the natural resources of the continental shelf are of recent origin. Although the seeds of the contemporary doctrine of the continental shelf may be found in earlier legal writings, it is only during the last quarter of a century that technical developments have added practical significance to the problems”.10 The existence per se of natural resources as special circumstances has been considered in a number of cases brought before the icj, which mostly operated within the framework of equitable principles.11 In the North Sea Continental Shelf case it was held that there is no legal limit to the factors that may constitute a special circumstance that the Court should take into account when applying equitable procedures,12 thus natural resources such as oil and gas could be one of those factors. However, when it comes to the continental shelf “only those that are pertinent to the institution of the continental shelf as it has developed within the law, and to the application of equitable principles to its delimitation, will qualify for inclusion”.13 In that case, the Court considered that the existence of natural resources was a factual element, which had already been dealt with by the parties, thus it was a relevant factor for the negotiations for delimitation.14 The Court implicitly put as a criterion that in order for energy resources to be taken into account in a delimitation dispute they should have preoccupied in some way the states concerned, though without specifying any further the manner or degree of such involvement.

9 10 11

12 13 14

North Sea Continental Shelf, supra note 3. Id., Dissenting Opinion of Judge Sorensen. M.D. Evans, Maritime delimitation and expanding categories of relevant circumstances, 40(1) iclq 1–33 (1991), at p.3. See also D.A. Colson, The Delimitation of the Outer Continental Shelf between Neighboring States, 97 (1) ajil 91–107 (2003), at p. 92. North Sea Continental Shelf, supra note 3, at par. 93. Libya v. Malta, supra note 5, at par. 48. North Sea Continental Shelf, supra note 3, at par. 97.

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The existence of oil and gas in a specific area and their economic importance was emphasized by the states in their submissions in the Tunisia v. Libya case, the first case where the icj considered state practice in relation to oil concessions and energy resources as an economic factor. Both states evoked economic considerations as special circumstances to be taken into account by the icj for deciding the delimitation line, since they had both already granted licenses or concessions in areas of the continental shelf they deemed appertained to them.15 The Court rejected economic considerations and simply stated that “the presence of oil-wells in an area to be delimited, it may, depending on the facts, be an element to be taken into account in the process of weighing all relevant factors to achieve an equitable result” (emphasis added),16 therefore, it may also be not. Apparently, for the Court oil wells should not be regarded in isolation from other factors that determine a delimitation line. It attached great significance to the de facto line that was a result of the oil concessions granted by the parties17 and added that the Court “must take into account whatever indicia are available of the line or lines which the parties themselves may have considered equitable or acted upon as such”.18 In a similar way, the tribunal in the Guinea v. Guinea Bissau dispute stated that economic factors were not relevant circumstances, as being “factors that are sometimes uncertain”.19 Overall, while it is true that economic factors may play a key political role during the negotiations of delimitation of maritime boundaries, the international courts and tribunals have so far avoided establishing a firm judicial framework of equitable apportionment of natural resources in general and 15

16

17 18 19

Such an argument was presented in the Continental Shelf (Tunisia v. Libyan Arab Jamahiriya), Judgment, icj Reports 1982, p. 18. Tunisia argued that the Court should bear in mind “the relative poverty vis-à-vis Libya in terms of absence of natural resources”. In a similar reasoning, the Court in the Gulf of Maine case pointed out that the real subject of the dispute was the economic prospect of the enormous fisheries resources in Georges Bank and the potential of the resources in its subsoil, see Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada v. United States of America), Judgment, icj Reports 1984, p. 246, at par. 232. Tunisia v. Libya, supra note 15, at par. 107. In the Greenland v. Jan Mayen case, the Court held that such factors are deemed to change over time, therefore delimitation should not be based on these factors, since by its nature entails permanence and stability, see Maritime Delimitation in the Area between Greenland and Jan Mayen (Denmark v. Norway), Judgment, icj Reports 1993, p. 38. Tunisia v. Libya, supra note 15, at par. 96. Id.,at par. 118. Award of 14 February 1985 arbitration for the delimitation of the maritime boundary between Guinea and Guinea Bissau (Guinea v. Guinea Bissau), at par. 122.

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energy resources in particular solely basing their decision on economic considerations.20 For such cases, the Court openly encourages states to resort to a “mutually advantageous cooperation”,21 since it is not its role to establish a regime of equitable allocation of resources.22 For the Court, the unity of deposits is nothing more than “a factual element which it is reasonable to take into consideration in the course of the negotiations for a delimitation” and in such situations it is for the best interest of all parties that the dispute is resolved “either by an agreed, or failing that by an equal division of the overlapping areas, or by agreements for joint exploitation, the latter solution appearing particularly appropriate when it is a question of preserving the unity of a deposit”.23 This obligation for joint exploitation is mirrored in Articles 74(3) and 83(3) unclos which acknowledge the importance of energy resources in the economic development of the states concerned and are designed to promote mutual understanding, friendly relations and cooperation pending a final agreement. unclos is the main legal instrument to accommodate claims of delimitation of maritime boundaries and the identification of state rights to exploit natural resources at sea. In particular, by virtue of Article 74(3) unclos, states are required to make “every effort to enter into provisional arrangements of a practical nature and, during this transitional period, not to jeopardize or hamper the reaching of the final agreement”.24 The same obligation is found in Article 83(3) for the delimitation of the continental shelf. The permissible activities in connection to the exploration and exploitation of natural resources that states can undertake without breaching any of the obligations arising from Articles 74 and 83 unclos were clarified in the Guyana v. Suriname case as (a) activities undertaken by the parties pursuant to provisional arrangements of a practical nature and (b) unilateral acts which would not have the effect of jeopardizing or hampering the reaching of a final agreement on the delimitation of a maritime boundary.25 Going a step 20 21 22 23 24

25

R. Kolb, Case law of equitable maritime delimitation: digest and commentaries, The Hague, Martinus Nijhoff Publishers, 2003. Guinea v. Guinea Bissau, supra note 19, at par. 123. L.D.M. Nelson, The Roles of Equity in the delimitation of maritime boundaries, 84(4) American Journal of International Law 837–858 (1990) at p. 855. North Sea Continental Shelf, supra note 3, at par. 99. Article 74(3) unclos. For the regime applicable to transboundary resources and the problems thereof, see A. Székely, The International Law of Submarine Transboundary Hydrocarbon Resources: Legal Limits to Behavior and Experiences for the Gulf of Mexico, 26 Natural Resources Journal 733–768 (1986). In the Matter of an Arbitration between Guyana and Suriname (Guyana v. Suriname), pca Award of 17 September 2007, at par. 466.

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further, the tribunal clarified that unilateral acts such as seismic exploration were acceptable for sovereigns or companies, while “activities of the kind that lead to a permanent physical change, such as exploitation of oil and gas reserves” are not.26 There is a common state practice of issuing gas and oil exploration permits in disputed waters, in the absence of previous agreements. Energy resources as special circumstances and consequently the potential of the exploitation of energy resources at sea was not disregarded by the states which adapted their conduct pending the final delimitation of the maritime boundaries and entered into agreements for the exploitation of energy resources.27 The Court was therefore asked to determine which conduct prior to the delimitation dispute could be relevant.28 In these cases, the Court sought to find the existence of a de facto maritime boundary in relation to the conduct of the states concerned. In the Tunisia v. Libya case, the Court finally adopted a de facto line that had emerged from the previous state practice in the area in relation to oil concessions, thus the parties showed and confirmed the existence of a modus vivendi.29 This modus vivendi was also invoked by Canada in the Gulf of Maine case, where Canada asked the Court to find that there was a “modus vivendi maritime limit” or else a “de facto maritime limit”, since the Canadian line coincided with the us delimitation line and was respected by both states and the oil companies. The Court distinguished this case from Tunisia v. Libya and stipulated that even if it accepted that there was a de facto line formed by the oil concessions, the conditions of acquiescence were still not met.30 It should be noted that the same modest role was reserved for the conduct of the parties in the Greenland v. Jan case, without the Court further explaining the pattern of

26

Id., at par. 467. With this obiter, the tribunal abstained from the Aegean Sea Continental Shelf case, where the icj had found that “seismic exploration of the natural resources of the continental shelf without the consent of the coastal state might, no doubt, raise a question of infringement of the latter’s exclusive right to exploration”, see Aegean Sea Continental Shelf Case (Greece v. Turkey), Interim Protection, Order of 11 September 1976, icj Reports 1976, p. 3, at par. 31. 27 Ch. Robson, Transboundary Petroleum Reservoirs: Legal Issues and Solutions, in G.H. Blake, W.J. Hildesley, M.A. Pratt, R.J. Ridley, C.H. Schofield (eds), The Peaceful Management of Transboundary Resources, Graham & Trotman/Martinus Nijhoff Publishers, pp. 3–22. 28 See for instance Nicaragua v. Honduras supra note 8, at par. 208. 29 Tunisia v. Libya, supra note 15, at par. 117. 30 Gulf of Maine, supra note 15, at pars 148–152. For a consolidated analysis of the concept and its use by the icj, see N.S.M. Antunes, Estoppel, Acquiescence and Recognition in Territorial and Boundary Dispute Settlement, Routledge, International Boundaries Research Unit, 2000.

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conduct that would suffice to prove acquiescence of the parties or an uncontested will to sovereign. Progressively, the Court became more eloquent on the yardstick that it would use when considering the conduct of states. More specifically, in the Cameroon v. Nigeria case, the Court was asked to consider the oil licenses that had been awarded in the disputed area as special circumstances. The Court did not contest Cameroon’s sovereignty over the Bakassi Peninsula, based on the oil concessions granted by Cameroon and Nigeria. The rationale was that the pattern of oil licensing in this particular area happened to coincide with pre-existing Cameroon title in Bakassi, therefore reinforcing Cameroon’s position;31 Cameroon oil licensing activities in Bakassi were evidence that it never abandoned its title.32 However, for the other areas, it concluded that  “although the existence of an express or tacit agreement between the  parties on the siting of their respective oil concessions may indicate a c­ onsensus on the maritime areas to which they are entitled, oil concessions and oil wells are not in themselves to be considered as relevant ­circumstances justifying the adjustment or shifting of the provisional delimitation line”.33 The ruling in Cameroon v. Nigeria was taken into consideration by the pca in the Guyana v. Suriname dispute, where it upheld the dictum in Cameroon v. Nigeria that oil concessions are to be taken into consideration only when they are based on an express or tacit agreement between the parties.34 The tribunal sought to identify the boundary between the two states on equitable considerations, which included, among others, the conduct of the parties in the disputed area.35 The pca stayed in line with the previous jurisprudence of the icj and rejected Guyana’s argument that its conduct in granting oil concessions should determine the outcome of the delimitation. Similarly, shortly after the pca had delivered its judgment on the Guyana v. Suriname dispute, the icj in the Nicaragua v. Honduras case was asked to determine the maritime boundaries between Nicaragua and Honduras, as well as the sovereignty over a small group of islands whose territorial seas encompassed a considerable quantity of oil and gas deposits.36 31 32 33 34 35 36

Cameroon v. Nigeria, supra note 8, at par. 215. Id., at par. 223. Id., at par. 304. Id. Guyana v. Suriname, supra note 25, pars 378–392. It is worth noting that, contrary to the previous case-law which concerned energy resources and oil concessions in the continental shelf, both in the Guyana v. Suriname

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Honduras relied on the evidence of oil concessions to claim territory over the disputed area and asserted effectivités upon the islands that served as landbased assistance for the drilling activities in the context of the offshore concessions.37 Honduras also contended that oil concessions granted to the area, respected by both parties and in combination with the fishing activities in the same area could suggest that there was a de facto boundary based on a tacit agreement between the Parties. The Court went a step beyond its previous jurisprudence and raised the bar in relation to the conduct of the parties. It found that there was no compelling tacit agreement in effect between the Parties of a nature to establish a legally binding maritime boundary, since even if it had found that a provisional line existed for a period of time, still the granting of oil concessions could not be considered as an indication of an agreement as to where the maritime boundaries should lie.38 As to the islands, the  Court relied on the concept of effectivités. Siding with Honduras, it asserted that an antenna erected in 1975 on one of the islands, in the context of authorized exploration activities, demonstrated Honduras “intention and will to act as sovereign”.

Part 2: Environmental Legal Implications from Energy Projects at Sea

In principle, states have a permanent, absolute and exclusive sovereignty over their natural resources. However, at sea, the exploration and exploitation of living and non-living marine resources by the coastal state within its territorial sea or exclusive economic zone are regulated by international law with due respect to the interests of third states or mankind. To this end, the exercise of a coastal state’s sovereign right to exploit its offshore hydrocarbons deposits is subjected to general international environmental law restrictions, such as the principle of co-operation (for the protection and preservation of the marine

37 38

arbitration and the Nicaragua v. Honduras dispute the countries invoked offshore oil and gas activity to support their territorial claims. For a brief comment on the dispute, see Y. Tanaka, Reflections on Maritime Delimitation in the Nicaragua v. Honduras Case, 68 Zaorv 903–937 (2008). See also T. Treves, Maritime Delimitation and Offshore Features, in S. Jayakumar, T. Koh & R. Beckman (eds), The South China Sea Disputes and Law of the Sea, Edward Elgar Publishing, 2014, pp. 121–143. Nicaragua v. Honduras, supra note 8, at par. 202. Id., at par. 253.

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environment),39 the principle of equitable utilization (in case of shared resources)40 and the duty to protect and preserve the marine environment,41 among others. 39

40

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See Articles 74(3), 83(3), 123, 197, 199–202 unclos; United Nations, General, Assembly, Cooperation in the field of the environment concerning natural resources shared by two or more states, un Doc. A/Res/28/3129, 13 December 1973; United Nations Environmental Programme, Intergovernmental Working Group of Experts on Natural Resources Shared by Two or More States, Draft principles of conduct for the Guidance of States in the Conservation and Harmonious Utilization of Natural Resources Shared by Two or More States, Draft principles of conduct for the Guidance of States in the Conservation and Harmonious Utilization of Natural Resources Shared by Two or More States, 1978; Pulp Mills on the River Uruguay (Argentina v. Uruguay), Judgment, icj Reports 2010, p. 14; The Mox Plant Case, (Ireland v. uk) (Provisional Measures, Order of 3 December 2001), itlos Reports 2001, at par. 82; Case Concerning Land Reclamation by Singapore in and around the straits of Johor (Malaisia v. Singapore), (Provisional Measures, Order of 8 October 2003), itlos Reports 2003, at par. 92. See Article 4 in United Nations, International Law Commission, Draft Articles on the Law of Transboundary Aquifers, un Doc. A/63/10, 2008. Mr. Yamada, the Special Rapporteur concluded that, “while there were some similarities between non-recharging aquifers and the natural conditions of oil and natural gas, the majority of regulations to be worked out for oil and natural gas would not be directly applicable to aquifers”. In the Sixth Committee, the representatives of Governments adopted the above position citing different grounds on why oil and gas shall be treated differently than aquifers (C. Yamada, Fifth Report on shared natural resources: transboundary aquifers, International Law Commission Sixtieth Session, un Doc. A/Cn.4/591, pp. 2–3). See also Article 6 United Nations Convention on the Law of the Non-Navigational Uses of International Watercourses, 21 May 1997, http:// treaties.un.org, last visited on 30/12/2015. The icj applied the principle of equitable exploitation with respect to living resources at sea in the Fisheries Jurisdiction Case (uk v. Iceland), Judgment, icj Reports 1974, p. 31. However equitable utilization is not equal to equal allocation of resources. P. Birnie, A. Boyle and C. Redgwell, International Law & the Environment, 3rd edition, Oxford University Press, 2009, p. 202. E. Louka, International Environmental Law: Fairness, Effectiveness, and World Order, Cambridge University Press, 2006, p. 53. Reference shall be made also to the dispersed practice of States entering into Joint Development Agreements or Cross Border Utilization Agreements for hydrocarbon shared deposits. They opt for a joint venture between interested States and oil companies or rely on the concept of exploitation of the cross border deposits as a single unit. Analytically, see V. Becker-Weinberg, Joint Development of Hydrocarbon Deposits in the Law of the Sea, Springer, 2014. For the regime applicable to transboundary resources and the problems thereof, see A. SzéΚely, The International Law of Submarine Transboundary Hydrocarbon Resources: Legal Limits to Behavior and Experiences for the Gulf of Mexico, 26 Natural Resources Journal 733–768 (1986). See Article 193 unclos.

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In addition, energy development projects carry with them environmental risks during oil or gas production (drilling, maintenance procedures) as well as in the course of their transport (through pipelines or ships).42 In 2010, a bpoperated oil-drilling platform exploded in the Gulf of Mexico after a highpressure methane gas rose from the well to the rig. This caused the sinking of the platform and one of the worst oil spills in us history, since oil was leaking for 87 days before the well was sealed and innovative clean-up procedures were put into place by the us Coast Guard and the Environmental Protection Agency in charge.43 Operational or accidental discharges at sea may have serious repercussions in aquatic life, the economic life of neighbouring states and the global climate. Oil spills from pipelines fractures or ships are common risks in the execution of energy transport contracts. Although international conventions regulate some of the above-mentioned environmental concerns, such as prevention measures and liability claims from oil pollution from ships,44 other domains remain totally unregulated, at the international level, such as state responsibility from environmental harm caused by offshore energy installations.45 In the meantime, regional conventions or group initiatives regulate the behaviour of states alongside international rules, guiding states on the implementation of their governmental energy policy.46 42 43 44

45

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M. Gavouneli, Pollution from offshore installations, Graham & Trotman/M. Nijhoff, 1995, p. 41. C.L. Hagerty and J.L. Ramseur, Deepwater Horizon Oil Spill: Selected Issues for Congress, Congressional Research Services, 2010. See e.g. 1954 London Convention on oil pollution from tankers, 1969 International Convention on Civil Liability for Oil Pollution Damage (amended in 1992), 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (amended in 1992), 1973/78 marpol Convention for the Prevention of Pollution from Ships, 1982 United Nations Convention on the Law of the Sea (Part xii: Protection and Preservation of the Marine Environment), 1990 Convention on Oil Pollution Preparedness, Response and Co-operation (opprc), 1996 Convention on Liability and Compensation for the Carriage of Hazardous and Noxious Substances by Sea. M. Fitzmaurice, International Responsibility and Liability, in D. Bodansky, J. Brunee and E. Hey, The Oxford Handbook of International Environmental Law, Oxford University Press, 2007, p. 1034. In the framework of un Economic Commission for Europe, two regional conventions are adopted. First, the Convention on Environmental Impact Assessment in a Transboundary Context in 1991 (Vol. 1989 unts 34028) and second the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters in 1998 (Vol. 2161 unts 37770). In addition, the European Union is active in the elaboration of norms aiming to protect the marine environment, such as the Directive 2008/56/Ec of the European Parliament and of the Council of 17  June 2008 establishing a framework for community action in the field of marine

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Judiciary organs, such as the International Court of Justice play a fundamental role in (a) setting of international standards, (b) controlling compliance with these standards and (c) developing the law. Historically, the courts and tribunals seized on environmental matters have clarified treaty norms, identified the existence of customary norms and enhanced the role of environmental norms in public international law.47 In its early jurisprudence, the icj had scarcely dealt with environmental questions stemming from economic or industrial activities undertaken by states. In a post-war context, the icj in its Corfu Channel Case launched the discussion on state liability for harm caused unknowingly within its territory or control. With respect to Albania’s obligation to inform third states on the danger of the passage (minefield), the Court underlined “every State’s obligation not to allow knowingly its territory to be used for acts contrary to the right of other States” (sic utere tuo ut alienum non laedas).48 In Professor’s Fitzmaurice opinion, the Court implicitly rejected the theory of strict liability, previously established by the landmark Trail Smelter Arbitration49 but opted for a tort liability based on due diligence.50 However, even if Corfu Channel was subsequently listed as one of the pillars of early environmental law jurisprudence, at  that time, icj’s judges were more concerned about the principle of good

47

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environmental policy (Marine Strategy Framework Directive), oj L 164, 25.6.2008, pp. 19–40. Finally, on G20 level, a Global Marine Environment Protection Initiative has been launched on sharing best practices to protect the marine environment, to prevent accidents related to offshore oil and gas exploration and development, as well as marine transportation, and to deal with their consequences (http://www.g20gmep .org/, last visited on 30/12/2015). P. Sands, Litigating Environmental Disputes: Courts, Tribunals and the Progressive Development of International Environmental Law, in T.M. Ndiyae and R. Wolfrum (eds), Law of the Sea, Environmental Law and Settlement of Disputes. Liber Amicorum of Judge Thomas Menash, Martinus Nijhoff Publishers, 2007, p. 313. Corfu Channel Case (uk v. Albania), Merits, icj Reports 1949, p. 22. Trail Smelter Arbitration (u.s. v. Canada), 3 Rep. Int’l arb. Awards 1905 (1941). In the same case, the Tribunal established the ‘polluter pays’ principle, which holds that the polluting state should pay compensation for the transboundary harm it has caused. For further elaboration on Trail Smelter Case’s impact on environmental law see R.M. Bratspies and R.A. Miller (eds), Transboundary harm in international law: lessons from the “Trail Smelter” arbitration, Cambridge University Press, 2006. M. Fitzmaurice, The Corfu Channel Case and the Development of International Law, in N. Ando, E. McWhinney and R. Wolfrum (eds), Liber amicorum Judge Shigeru Oda, Kluwer Law International, 2002, pp. 132–133.

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neighbourliness and the right of innocent passage rather than liability for environmental harm resulted by Albania’s negligent acts.51 In its course of work, the icj never pronounced on general international law regulating state liability for transboundary environmental harm, whether accidental or not. This topic is, nowadays, at the top of the list in states’ practice and scholars’ dialogue regarding oil and nuclear spills. In Sheffield’s opinion, “states have demonstrated a clear reluctance” to acknowledge a customary value to the strict liability regime.52 Similarly, the un International Law Commission, which was considering the topic of “International liability for injurious consequences arising out of acts not prohibited by international law,” received the same opposition by states.53 Therefore, the “polluter pays principle” is currently widely used by states which raise compensation claims against the perpetrator of the harm following the legal framework on civil liability.54 In a second era of the icj’s jurisprudence, the Court “delicately” addressed environmental concerns arising from energy installations. Even if the two Nuclear Tests Cases as well as the Advisory Opinion on the Legality of Nuclear Weapons concern nuclear energy for military use, these cases may serve as a precedent for nuclear energy for electricity. From a pragmatic point of view, “the development of atomic energy for peaceful purposes and the development of atomic energy for bombs are in much of their course interchangeable and interdependent”.55 Inter alia, nuclear reactors for weapons construction 51

52

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In relation to the effects of Corfu Channel Case in environmental matters, Dr. Viñuales puts it in its proper prospective, stating that “the potential of such an assertion for the development of norms relating to the protection of the environment irrespective of any specific harm caused to a state cannot be overlooked”. J.E. Viñuales, The Contribution of the International Court of Justice to the Development of International Environmental Law: A Contemporary Assessment, 32 (1) Fordham International Law Journal (2008), p. 242. K. Sheffield, Of Pulp Mills and Oil Spills: Strict state liability under customary international law when energy and resource projects cause transboundary environmental harm, Eco-bulletin, June 2011, p. 3. This topic has shrunk and renamed in 1997 (“International liability in case of loss from transboundary harm arising out of hazardous activities”), while in its last draft the term ‘liability’ disappeared (“Allocation of loss in the case of transboundary harm arising out of hazardous activities”). A legal presumption on the strict liability of the person in control of the dangerous activity applies. E. Louka, supra note 40, p. 448. See 1946 Acheson-Lillienthal Report on the control of atomic energy in Nuclear Energy Information Service, Nuclear Power and Nuclear Weapons, http://www.neis.org/literature/ Brochures/weapcon.htm, last visited on 30/12/2015.

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use plutonium whereas nuclear reactors for commercial use produce plutonium, so there is clearly a link between supply and demand.56 From a legal point of view, the environmental consequences from the use of nuclear weapons in comparison with those arising from accidents in nuclear factories are similar albeit different in range. On the political level, the 2011 Fukushima nuclear power plant accident re-launched the debate on the safety of nuclear installations and the environmental risks entailed in the production of “clean energy”. In its aftermath, scientists’ discussions flourished on the advantages of floating nuclear power plants, while Russia has already planned to launch one at sea in 2018.57 In the 1974 Nuclear Tests Cases concerning the legality of atmospheric nuclear tests conducted by France in the South Pacific, the Applicants raised concerns on the health of the population due to radioactive matter released in the atmosphere by the tests. New Zealand, in particular, asked the Court to declare that France violated the “rights of all members of the international community” with respect to the protection of the environment.58 However, the Court, while taking note of the relevant findings of the un Scientific Committee on the Effects of Atomic Radiation, made no prima facie assessment on the merits of the case. Judge De Castro, in his dissenting opinion, reasoned that “the Applicant is not entitled to ask the Court to declare that atmospheric nuclear tests are unlawful” since he lacked its own material legal interest59 and thus, the subject matter of the dispute is the violation or not of the principle sic utere tuo ut aliaenum non laedas, previously asserted in the Corfu Channel. So, in the Nuclear Tests case, the use of nuclear weapons for testing purposes was approached in connection with the harm (emissions) occurred in the neighbouring states. On the other hand, in its 1996 Advisory Opinion, the Court examined the use of nuclear weapons under the angle of  prohibition of the use of force principle and found no customary rule

56 57

58 59

For more details on interaction between nuclear power reactors and nuclear weapons, see E. Louka, Nuclear Weapons, Justice and the Law, Edward Edgar Publishing, 2011. The Economist, “Nuclear power: all at sea”, 26 April 2014; Reuters, “Russia’s Rosatom, China may develop floating nuclear power plants”, us edition, 29 July 2014, www.reuters .com, last visited on 30/12/2015. Nuclear Tests Case (New Zealand v. France), Application instituting proceedings, icj Pleadings. Vol. ii, p. 8. Equally, “the Court has no jurisdiction to declare that all atmospheric nuclear tests are unlawful, even if as a matter of conscience it considers that such tests, or even al1 nuclear tests in general, are contrary to morality and to every humanitarian consideration”. Nuclear Tests Case (Diss. Op. Judge De Castro), icj Reports 1974, pp. 388–389.

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­providing that the use of nuclear weapons is per se unlawful.60 In its obiter dictum, the Court confirmed the customary status of Principle 21 of the Stockholm Declaration,61 by explicitly stating that “the existence of the general obligation of States to ensure that activities within their jurisdiction and control respect the environment of other States or of areas beyond national control is now part of the corpus of international law relating to the environment”.62 In the Gabcikovo – Nagymaros Case, the Court applied the 1977 Treaty concerning the construction and operation of a System of Locks for the production of energy. After reaffirming the great significance that it attaches to respect for the environment,63 the Court took note of “new norms and standards” in the evaluation of the environmental risks, without naming them. As it is stated, “the Court is mindful that, in the field of environmental protection, vigilance and prevention are required on account of the often irreversible character of  damage to the environment and of the limitations inherent in the very mechanism of reparation of this type of damage”, whereas the “need to reconcile economic development with protection of the environment is aptly expressed in the concept of sustainable development”.64 The concept of sustainable development is fundamental in balancing the energy development and economic progress projects with the need to protect

60 61

62 63 64

Advisory Opinion on the Threat or Use of Nuclear Weapons, icj Reports 1996, p. 226. “States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to exploit their own resources pursuant to their own environmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction”, Report of the United Nations Conference on the Human Environment, un Doc. A/Conf.48/14/Rev.1, 1973. Similar wording may be found in Principle 2 of the Rio Declaration on Environment and Development, Report of the United Nations Conference on Environment and Development, un Doc. A/Conf.151/26, vol. i, 1992. Advisory Opinion on the Threat or Use of Nuclear Weapons, supra note 60, p. 241. Gabcikovo – Nagymaros Project (Hungary/Slovakia), Judgment, icj Reports 1997, p. 38. Ibid., pp. 74–75. In 1998, the wto Appellate Body has similarly noted about sustainable development that it is “a concept that has been generally accepted as integrating economic and social development and environmental protection” (United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body, Wt/ Ds58/Ab/R (12 October 1998), at par. 129). For an attempted definition of the sustainable development and a thorough analysis on its dimensions, see P. Sands and J. Peel, Principles of International Environmental Law, 3rd edition, Cambridge University Press, 2012, pp. 206–217. On the legal nature of this concept, see V. Barral, Sustainable Development in International Law: Nature and Operation of an Evolutive Legal Norm, 23 (2) ejil (2012), pp. 377–400.

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the environment and natural resources for present and future generations.65 This latter preoccupation is embodied into the “precautionary approach” doctrine.66 However, the Court in the Gabcikovo – Nagymaros Case missed the opportunity to confirm the emerging precautionary principle,67 which was already put forward for discussion by its greatest advocate, Judge Weeramantry, in a number of icj cases. First, on the occasion of the 1995 Second Nuclear Tests Cases,68 Judge Weeramantry, for evidentiary purposes (reversal of the burden of proof), claimed that the precautionary principle, which has been adopted by countries of the European Union69 and is gaining support as part of the international law of the environment, must have been applicable to France. At the same time, he drafted another dissenting opinion to the Court’s Advisory Opinion on the Legality of Nuclear Weapons, whereas the precautionary principle is listed, among other environmental principles, as been violated by the nuclear weapons.70 One year later, the same Judge attached a separate opinion of high academic value on development versus environment considerations in the Gabcikovo – Nagymaros Judgment71 and clarified that “the principle of sustainable development is thus a part of modern international law by reason not only of its inescapable logical necessity” (as mentioned in his 1995 Dissenting Opinion), but also “by reason of its wide and general acceptance by the global

65 66 67 68

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K.E. Makuch and R. Pereira (eds), Environmental and energy law, Wiley-Blackwell, 2013, p. 15. See Principle 15 of Rio Declaration on Environment and Development, supra note 61. D. Bodansky (ed.), Evolution and State of the Precautionary Principle in International Law, Kluwer Academic Publishers, 2002, p. 164. Request for an Examination of the Situation in Accordance with Paragraph 63 of the Court’s Judgment of 20 December 1974 in the Nuclear Tests (New Zealand v. France) Case, (Diss. Op. of Judge Weeramantry), icj Reports 1995, pp. 317–362. See 1992 Baltic Sea Convention, 1992 ospar Convention, 1990 Bergen ece Ministerial Declaration on Sustainable Development and other texts mentioned by Judge Weera­ mantry in his dissenting opinion. Advisory Opinion on the Threat or Use of Nuclear Weapons (Diss. Op. of Judge Weeramantry), supra note 60, p. 280. “Natural resources are not individually, but collectively, owned, and a principle of their use is that they should be used for the maximum service of people. There should be no waste, and there should be a maximization of the use of plant and animal species, while preserving their regenerative powers. The purpose of development is the betterment of the condition of the people”. Gabcikovo – Nagymaros Project (Separate Opinion of Judge Weeramantry), supra note 63, p. 110.

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community”.72 It is noted that the Court had kept its “cautious approach” not to pronounce on the customary nature of the “precautionary approach” in all subsequent environmental cases, such as the 2010 Pulp Mills Case and the 2014 Whaling in the Antarctic Case.73 The Aerial Herbicide Spraying Case was removed from the list before giving the Court the opportunity to address Ecuador’s claims on Colombia’s violation of its obligation of precaution.74 In parallel with due diligence and regulation obligations imposed on states indulging in industrial activities liable to cause transboundary harm, the necessity to conduct an environmental impact assessment prior to the execution of any works has been a long-standing practice which evolved into a legally binding customary norm, in the aftermath of the 2010 Pulp Mills judgment. As the Court has formulated it, “it may now be considered a requirement under general international law to undertake an environmental impact assessment where there is a risk that the proposed industrial activity may have a significant adverse impact in a transboundary context, in particular, on a shared resource”.75 Finally, “after cautious beginnings, the Court has embraced international environmental law and today can be seen as one of its advocates”.76 Conclusions Energy at sea has always been a thorny issue for the icj and it becomes thornier with the increasing interest of states over energy resources at sea. From the older judgments of the icj to the latest Nicaragua/Honduras, oil concessions 72 73

74 75 76

Ibid., p. 95. In the Pulp Mills Case, the Court stated that “a precautionary approach may be relevant in the interpretation and application of the provisions of the Statute”, Pulp Mills, supra note 39, p. 51. According to Tanaka, the precautionary approach is not deprived of a normative value and can be used as an element of interpretation of existing rules of international law (Y. Tanaka, The International Law of the Sea, Cambridge University Press, 2012, p. 241). On the contrary, Judge Cançado-Trindade is affirmative of the legal binding character of principles of prevention and precaution which do exist and are proper to International Environmental Law (Sep. Op. of Judge Cançado-Trindade, pp. 176–177, at pars. 112–113). Aerial Herbicide Spraying (Ecuador v. Colombia), Order, 13 September 2013, General List No. 138. Pulp Mills, supra note 39, p. 83. M. Fitzmaurice, The International Court of Justice and International Environmental Law, in C.J. Tams and J. Sloan (eds), The Development of International Law by the International Court of Justice, Oxford University Press, 2013, p. 353.

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have failed to become determinants of maritime delimitation, although they are now openly invoked by States and thus most thoroughly examined by the international courts. International jurisprudence has shown so far that the mere existence of natural resources, such as oil and gas, is no reason per se for the shifting of a delimitation line. Even today there is no rule of international law, which requires states to delimit their respective sections of the continental shelf in such a way as to apportion to each surrounding state a “fair share” of the mineral resources that are found within their territories. Such a requirement would entail precise knowledge of the location and size or quantity of natural resources of all parts of the area beforehand and this is rarely the case.77 At the same time, the icj remains reluctant in proceeding to recognise a principle on the allocation of natural resources that would be applicable to all maritime delimitation disputes. Truth be told, the allocation of natural resources cannot be seen separately from the overall context of the dispute, the existence or non-existence of a relevant agreement between the concerned States and the general economic potential of these resources. However, an ad hoc assessment of each dispute is not the proper solution either. The international jurisprudence as presented in this chapter reveals that the general rules of maritime delimitation remain applicable, although the Permanent Court of Arbitration in Guyana/Suriname went a step forward by indicating the acceptable energy resource exploration and exploitation activities in disputed waters. The Court acknowledges that the conduct of the states relating to oil concessions may determine the delimitation, but this pattern of conduct must be driven by a compelling78 and long-lasting agreement,79 in order to weigh on a future delimitation and to prove acquiescence80 or sovereign activity. The notable reluctance of the international tribunals to attribute evidentiary weight to the oil practice in their determination of the delimitation line81 can be explained by the fact that oil concessions are not a cession of territory82 and even if they correspond to an agreed provisional boundary, they still are to be distinguished from an international boundary.83 Even with such agreements it 77 78 79 80 81

82 83

North Sea Continental Shelf, supra note 6, Separate Opinion of Judge Jessup. Nicaragua/Honduras, supra note 5, at par. 253. Gulf of Maine, supra note 12, at par. 151. Libya/Malta, supra note 10. According to the tribunal in the Guyana/Suriname case, previous jurisprudence reveals a “marked reluctance […] to accord significance to the oil practice of the parties in the determination of the delimitation line”, at par. 390. Cameroon v. Nigeria, supra note 5, at par. 215. Nicaragua/Honduras, supra note 5, at par. 253.

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is still very difficult to ensure the predictability of a delimitation line, especially bearing in mind the number of relevant factors that are taken into account by the icj in order to achieve the best possible result for all states involved in a dispute. In terms of state responsibility for environmental harm caused by energy installations, international law does not provide any solutions yet, since states are reluctant to acknowledge their responsibility and stick to the polluter pays principle. Therefore, no relevant jurisprudence exists before the icj. However, the environmental acquis of the Court on substantive norms of prevention of environmental harm (such as the need to conduct an environmental impact assessment), the promotion of sustainable development and the emphasis added on cooperation in the management of environmental risks are indicative of the new direction of the Court in environmental matters and are applicable in energy activities at sea.

Acknowledgments

This paper is part of the research conducted within the context of the “ENERGY AT SEA” Project, implemented within the framework of the Operational Programme “Education and Lifelong Learning” (Action “ARISTEIA II”) and co-funded by the European Social Fund and National Resources.

part 2 International Inspection and Control Mechanisms

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chapter 5

An Overview of the International Inspection and Control Mechanisms Fernando Loureiro Bastos i Foreword This section will be devoted to International Inspection and Control Mechanisms, a virtually unexplored field in terms of dispute settlement in international law, and the general legal literature available on the issue is very limited. Accordingly, in order to promote the scientific debate on the subject, this section will be divided into two parts. On the one hand, at an introductory level, a brief presentation of some of the existing international inspection and control mechanisms will be made in order to give an overview of the mechanisms that are usually included in its scope. On the other hand, forming the core of the section, José Narciso da Cunha Rodrigues, Chairperson of uefa’s Financial Control Body will make a presentation about the activities of that entity. The very extensive curriculum vitae of the speaker, in addition to the position he has been exercising for the past two years, make it necessary only to highlight the fact that he served as Attorney-General of the Republic of Portugal between 1984 and 2000 and that he was a Judge of the European Union Court of Justice between 2000 and 2012. The overall picture of the mechanisms that will be presented and the indepth analysis of the activities of the uefa Financial Control Body offer a chance to assist in the publicising of this issue and, in this way, to contribute to the promotion of its research at an international law level1,2 As with all the seeds 1 An example of a research study in progress on the matter in an international law perspective is, “International Grievance Mechanisms and International Law and Governance (igms)”, coordinated by Vanessa Richard, under the cnrs, appearing between 01/12/2012 and 30/12/2016, with funding from the European Research Council (erc Grant No. 312514) (summary of the project available at http://www.igms-project.org/EN/about/DescriptionIGMsEN. pdf). In accordance with the information available, “[t]his research intends to explore these international regulation mutations and justiciability gaps revealed by a global governance approach through an in-depth study of the international mechanisms which grew in the cracks, the inter-national being materialised here as an ‘in-between’ space or a ‘legal no man’s land’ rather than an ‘among’. For the purpose of this project, international grievance mechanisms (igms) are defined as non-judicial grievance mechanisms set up on a permanent basis by non-binding international instruments or international organisations, which

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_006

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that are being sown, the existence of fruit and its quality is something that can be appreciated only in the future, particularly in any future call for papers that may be open to other international conferences on dispute settlement. ii Introduction A first approach to international inspection and control mechanisms should begin with an inquiry into its legal-international nature in order to answer the basic question of whether we are in the presence of international courts or international dispute settlement mechanisms. In the second edition of the Manual on International Courts and Tribunals, edited by Ruth Mackenzie, Cesare Romano, and Yuval Shany, with the participation of Philippe Sands, in 2010,3 ​​the international inspection and control mechanisms appear to be grouped in the sixth part of the work and are referenced under the descriptive designation of Inspection, Review, and Compliance Mechanisms in International Financial Institutions. The sixth part of the work is divided into two points, viz. 17. The Inspection Panel of the World Bank, and 18. Other Inspection, Review, and Compliance Mechanisms in International Financial Institutions. In the remaining six parts of the work the following matters are treated sequentially: i. Global Courts; ii. Arbitration Institutions; iii. International Criminal Courts and

aim at calling an entity—either public or not—to account for its actions in situations where no responsibility/liability mechanism can be set in motion because of the nature of the actors involved, and the lack of direct legal connection between them, and the non-binding character of the instruments these mechanisms ‘control compliance’ with. They answer to a regulation and justiciability gap, they emerged along some diagonal relationships the global governance approach brings to light and they also reveal a search for values: all in all, they deal with those relations which are “disregarded by the system (Steward, 2008)”, in bold in the original (pp. 2 and 3). 2 Analyzing the issue from a global administrative law perspective, see Thomas N. Hale, “Infocourts’ and the accountability of international organizations: evidence from the World Bank Inspection Panel”, paper presented at the 4th Global Administrative Law Seminar. Global Administrative Law: From Fragmentation to Unity, Viterbo, June 13–14, 2008 (available at http://www.iilj.org/gal/documents/Hale.pdf). 3 International Courts and Tribunals Series, Oxford University Press. The use of this work as a starting point for the search for an answer to the question posed is justified, as stated by James Harrison of the University of Edinburgh, in the review made about the work in question, because it is “a reference book. It presents basic information about the most significant international dispute settlement mechanisms in existence today” (The Edinburgh Law Review, vol. 15, 2011, pp. 340–342). The first edition of the work, edited by Philippe Sands, Ruth Mackenzie and Yuval Shany, was published in 1999 (London, Butterworths).

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Tribunals; iv. Regional Economic Integration Bodies/Free Trade Agreements; v. Human Rights Bodies; and vii. Compliance Procedures in Multilateral Environmental Agreements. According to the cited work, the mechanisms included in Part vi “do not fall strictly into the categorization of ‘international courts and tribunals’ ”, and “[t] hey comprise a variety of mechanisms, involving a variety of fact-finding, forms of mediation and other procedures, established within international and regional development banks to provide a forum to which affected parties may bring concerns or complaints alleging that the bank in question is not complying with its own policies and procedures in respect of a specific project”.4 In the work developed by pict—The Project on International Courts and Tribunals5—from which the Manual on International Courts and Tribunals is one of the most interesting results—it is important to note that the particularities of the Inspection Panels led to the creation of a specific grouping by placing them in the generic category of Quasi-Judicial Other Implementation and Control Dispute Settlement, taking into account the characteristics they shared with the remaining one hundred twenty-five international bodies and mechanisms used in the analysis. According to Cesare Romano, in 2004,6 despite its “staggering diversity”, the entities in question had in common the following characteristics: firstly, “all of these entities make legal determinations (…). To be precise, these 125 bodies determine whether certain acts are congruous with certain norms”; secondly, “in order to make their determinations they all resort to the same body of law: international law”; thirdly, “all of these international bodies have been established directly or indirectly (i.e, through a decision taken by a body established by treaty) by international agreements”; fourthly, “they are subject to a legal order that is different from that of national systems, but, at the same time, that they are subject to (and materially dependent on) State support”; and finally, “collectively they are the expression of a widely shared need to abandon a world where only States count and might rule, in favor of an order where certain fundamental common values are shared, protected and enforced by all members of a wide society, composed of States, International Organisations and individuals in all their legal incarnations (ngos, peoples, corporations, natural persons, etc.)”. The previous references are useful with regard to the collection of some elements for an answer to the question initially formulated about international 4 Handbook on International Courts and Tribunals, 2nd ed., Oxford University Press, 2010, p. 461. 5 About pict—Project on International Courts and Tribunals see the materials available at http://www.pict-pcti.org. 6 The International Judiciary in Context: the Synoptic Chart (available at http://www.pict-pcti .org/publications/synoptic_chart/synop_c4.pdf).

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inspection and control mechanisms. Firstly, as they are not international tribunals in the strict sense of the term, they can be qualified as international dispute settlement mechanisms. Secondly, their activity is regulated by international law acts within the framework of international organizations, not being dependent on the internal law of any State to be able to act. And, thirdly, the legitimacy with regard to triggering their activity is attributed to natural and legal persons having the nationality of any State, without the prior exhaustion of the domestic remedies of the State where the dispute is occurring being necessary. The above references, nevertheless, although helping to clarify the scope of the subject, equally lead to limiting the international inspection and control mechanisms to a particular type of international organization, viz. the “international and regional development banks.” From this a second question emerges, viz. are the international inspection and control mechanisms dispute settlement mechanisms specific to this type of international organization or may they be used in other areas and activities regulated by international law? The answer to the question about the potential scope of application of the international inspection and control mechanisms necessarily requires a brief presentation of the dispute settlement mechanisms that have been included in this category, namely those that have been created over the last two decades by international and regional development banks. iii

A Brief Presentation of the International Inspection and Control Mechanisms Created in International and Regional Development Banks

As an object of study and analysis at an international law level7,8 the international inspection and control mechanisms are a relatively recent self-control 7 On this matter, in general, in addition to Manual…, cit., pp. 461–498; see Paul J. Nelson, ‘Transparency mechanisms at the multilateral development banks’, World Development, vol. 29, 2001, pp. 1835–1847; Daniel D. Bradlow, ‘Private complaints and international organizations. The comparative study of the independent inspection mechanisms in international Financial Institutions’, Georgetown Journal of International Law, vol. 36, 2005, pp. 403–494; Richard E. Bissell and Suresh Nanwani, ‘Multilateral development bank accountability mechanisms: Developments and challenges’, Manchester Journal of International Economic Law, vol. 6, 2009, pp. 2–55; and Katarína Chovancová, ‘Inspection mechanisms of international development banks’, The Comparative Law Yearbook of International Business, vol. 33, 2011, pp. 495–549. 8 A broader perspective, including “export promotion agencies” as the Japan Bank for International Cooperation, the Nippon Export and Investment Insurance, the Export Development Canada and the us Overseas Private Investment Corporation can be found on Accountability Counsel (Natalie Bridgeman Fields), Accountability Resource Guide. Tools for

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mechanism that can be found in the functioning of the international and regional development banks.9 In successive order the following will be presented: a) the Inspection Panel of the World Bank; b) the Office of the Compliance-Advisor/Ombudsman (cao) of the International Finance Corporation and the Multilateral Investment Guarantee Agency; c) the Accountability Mechanism of the Asian Development Bank; d) the Independent Consultation and Investigation Mechanism of the Inter-American Development Bank; e) the Independent Review Mechanism of the African Development Bank; and, finally f) the Project Complaint Mechanism of the European Bank for Reconstruction and Development. Taking into account their priority and the fact that they have been a reference model for other mechanisms of dispute settlement, the following brief notes will give greater attention to the Inspection Panel of the World Bank and to the Office of the ComplianceAdvisor/Ombudsman (cao) of the International Finance Corporation and the Multilateral Investment Guarantee Agency. a Inspection Panel of the World Bank10 The Inspection Panel was established on 22 September 1993 by the Board of Executive Directors of the World Bank in two resolutions with identical content,

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Redressing Human Rights & Environmental Violations by International Financial Institutions, Export Promotion Agencies & Private Corporate Actors, version 7.1., July 2012, available at http://www.accountabilitycounsel.org/wp-content/uploads/2012/04/ARG-7.1.pdf. In 2010, following the experience initiated by the Inspection Panel of the World Bank, the European Investment Bank created a Complaints Mechanism, with the objective of “providing the public with procedures enabling the alternative and pre-emptive resolution of disputes between the public and the eib [European Investment Bank] Group” (European Investment Bank Complaints Mechanism Operating Procedures, August 2013, p. 3). About the Inspection Panel of the World Bank, in addition to the literature cited in Mackenzie, Roman, Shany, and Sands, Manual…, cit., p. 477, see also Daniel D. Bradlow, ‘International Organizations and Private Complaints: the case of the World Bank Inspection Panel’, Virginia Journal of International Law, vol. 34, 1994, pp. 553–614, Daniel D. Bradlow e Sabine Schlemmer-Schulte, ‘The World Bank’s New Inspection Panel: a constructive step in the transformation of the international legal order’, Zeitschrift fur Auslandisches Offentliches Recht und Volkerrecht, vol. 54, 1994, pp. 392–415; the studies about this subject compiled in Gudmundur Alfredsson and Rolf Ring (editors), The Inspection Panel of the World Bank. A different complaints procedure, Martinus Nijhoff, 2001, and in Dana Clark, Jonathan Fox e Kay Treakle (editors), Demanding Accountability. Civil-Society Claims and the World Inspection Panel, Rowman & Littlefield Publishers, 2003; Andria Naudé Fourie, The World Bank Inspection Panel and Quasi-Judicial Oversight. In search of the ‘Judicial Spirit’ in Public International Law, Eleven International Publishing, 2009, and ‘The World Bank Inspection Panel’s normative potential: a critical assessment, and a restatement’, Netherlands International Law Review, vol. 59, pp. 199–234; and

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of the ibrd—International Bank for Reconstruction and Development—and the ida—International Development Association, subsequently modified in 1996 and in 1999. The Inspection Panel is an independent entity within the structure of the ibrd and the ida, created with the aim of providing persons allegedly affected by projects financed by the World Bank with a means to make complaints about the damages that are caused to them. After the submission of a written complaint, the Panel Inspection will undertake a research study in order to determine whether the damage alleged by the parties “has totally of partially resulted from failure of the Bank to comply with its policies and procedures, including social and environmental safeguard policies and procedures, during design, appraisal and implementation of Bank-financed projects”.11 The Inspection Panel is composed of three members, appointed for nonrenewable five-year terms. In order to ensure their impartiality, members of the Inspection Panel may not have been employed by the World Bank within two years prior to their appointment to the Inspection Panel, or come to be contracted by the World Bank in the year following the termination of their mandate. The activity of the Inspection Panel is supported by a Secretariat and independent experts hired to pursue specific tasks. The Inspection Panel process takes place in four separate phases:12 i) firstly, a request for an investigation shall be made, about which a decision of admissibility or inadmissibility should be made within fifteen business days; ii) secondly, there will be a preliminary assessment of the admitted complaint, about which a recommendation on whether or not a thorough investigation on the matter should be conducted will be sent to the Board of Executive Directors of the World Bank;13

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Eugenia López-Jacoiste, ‘El control cuasi jurisdiccional del Panel de Inspección del Banco Mundial’, Anuario Español de Derecho International, vol. 29, 2013, pp. 111–164. The Inspection Panel at the World Bank. Operating Procedures. April 2014, p. 6. According to the website of the Inspection Panel, the evolution of processes takes into account the following phases and sub-phases: i) registration of request; ii) management response; iii) eligilibity report; iv) board approval; v) investigation ongoing; vi) investigation report; vi) management report; vii) board discussion; viii) follow up and progress report; e ix) process completed. In the “confirmation of eligibility and technical recommendation on whether to Investigate”, the Inspection Panel comes to balancing the following six criteria:

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iii) thirdly, a thorough investigation will be conducted on the issue which will culminate in the preparation of a report, in the elaboration of recommendations to be considered by the Board of Executive Directors of the World Bank,14 and with the decision that this body will accept the recommendations made by the Inspection Panel members; iv) and, finally, fourthly, there will be an evaluation by the Inspection Panel of the measures taken in accordance with the “action plan” approved by the Board of Executive Directors of the World Bank. According to the Word Bank, the Inspection Panel intends to fulfill two distinct functions:15 on the one hand, it “provides a forum for people, including those who are often poor and vulnerable, to seek recourse for harm which they believe result from Bank-supported operations”; and, on the other hand, “provides an independent and impartial assessment of claims about harm and related non-compliance with Bank policies as a check-and-balance for the Board and other concerned stakeholders”. The relevance of the Inspection Panel mission in assessing complaints concerning projects financed by the World Bank is shown by the assessment of ninety-nine complaints received by the end of 2014.16

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i) criterion (a): “The affected party consists of two or more persons with common interests and concerns who are in the Borrower’s territory”; ii) criterion (b): “The request asserts in substance that a serious violation by the Bank of its operational policies and procedures has or is likely to have a material adverse effect on the requester”; iii) criterion (c): “The Request asserts that its subject matter has been brought to the attention of Management and that, in the Requesters’ view, Management has failed to respond adequately demonstrating that it has followed or is taking steps to follow the Bank’s policies and procedures”; iv) criterion (d): “The matter is not related to procurement”; v) criterion (e): “The related loan has not been closed or substantially disbursed”; and iv) criterion (f): “The Panel has not made a recommendation on the subject matter or, if it has, that request does not assert that there is new evidence or circumstances not known at the time of the prior request” (The Inspection Panel…, cit., pp. 15 e 16). According to paragraph 13 of 1999 Clarification of the Board’s Second Review of the Inspection Panel, “[t]he Panel will discuss in its written report only those material adverse effects, alleged in the request, that have totally or partially resulted from a serious Bank failure of compliance with its policies and procedures”. The Inspection Panel…, p. 6. About the activity of the Inspection Panel of the World Bank, see the data available on the website of the Inspection Panel; and Andria Naudé Fourie, The World Bank Inspection Panel Casebook, Eleven International Publishing, 2014.

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Office of the Compliance-Advisor/Ombudsman (cao) of the International Finance Corporation and the Multilateral Investment Guarantee Agency The Office of the Compliance-Advisor/Ombudsman (cao) of the International Finance Corporation and the Multilateral Investment Guarantee Agency was created in 1999, taking into account that the control of the activities of these two entities was not part of the powers of the Inspection Panel of the World Bank, despite their being part of the World Bank Group. The cao is an independent recourse and accountability mechanism in the framework of the ifc’s and miga’s structure, chaired by the Compliance Adviser/Ombudsman, which aims to assess the environmental and social effects of projects that are pursued by those two entities. In developing its activity, the cao “provides communities and individuals with access to a grievance mechanism that offers redress for negative and/or social impacts associated with ifc/miga projects. This includes impacts related to business and human rights in the context of the ifc Policy and Performance Standards on Environmental and Social Sustainability”.17 Three distinct functions were assigned to the cao:

b

i) “Dispute Resolution role: in responding to complaints, cao attempts to resolve the issues raised using a flexible, collaborative, problem-solving approach. The focus of cao’s Dispute Resolution role is on accessing directly those individuals and/or communities affected by the project and helping them, the client, and other relevant stakeholders resolve complaints, ideally by improving environmental and social outcomes on the ground”;18 ii) “Compliance role: cao oversees compliance investigations of the environmental and social performance of ifc and miga, particularly in relation to sensitive projects, to ensure compliance with policies, standards, guidelines, procedures, and conditions for ifc/miga involvement, with the goal of improving ifc/miga environmental and social performance”;19

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Operational Guidelines cao, [2013], p. 4. In the cao Operational Guidelines is outlined that, p. 4, “cao has no authority with respect to judicial processes. cao is not an appeals court or a legal enforcement mechanism, no is cao a substitute for international court systems or court systems in host countries”. cao Operational…, cit., p. 4. cao Operational…, cit., p. 5.

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iii) “Advisory role: cao is a source of independent advice to the President and the senior management of ifc and miga. Advice is based on insights gathered from cao’s dispute resolution and compliance interventions and is focused on broader environmental and social policies, guidelines, procedures, strategic issues, trends, and systematic issues based on the experiences gained through its case work, with the goal of fostering systemic improvements in ifc/miga”.20 The procedures for dispute resolution and compliance, being relevant for the resolution of conflicts, have a common initial phase during which: i) there will be the submission of a complaint that will be subject to an admissibility assessment within fifteen business days;21 and ii) a preliminary assessment of the complaint by the cao dispute resolution experts will be made, within one hundred and twenty working days, in order to consider whether there is justification for opening a dispute resolution process or a compliance appraisal. The opening of a dispute resolution process is the result of a voluntary decision of the parties involved in the project. The main objective of this process is to achieve a solution to the dispute that may be satisfactory to all concerned. The dispute resolution process can be carried out by: i) facilitation and information sharing; ii) joint fact-finding;22 iii) dialogue and negotiation; or iv) mediation and conciliation. Compliance with the agreement reached amongst the parties involved in the dispute can be monitored by the cao. The mandate of the cao at the compliance level aims to assess the performance of the ifc and miga in the environmental and social fields, so that whether “the outcomes of the business activity or advice are consistent with the intent of the relevant policy provisions” are evaluated.23 In this area, the performance of the cao is divided into two parts, compliant appraisal and 20 21

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cao Operational…, cit., p. 5. The complaint is likely to be accepted if: i) “[t]he complaint pertains to a project that ifc/miga is participating in, or is actively considering”; ii) “[t]he issues raised in the compliant pertain to cao’s mandate to address environmental and social impacts of ifc/miga projects”; e iii) “[t]he complainant is, or may be, affected by the environmental and/or social impacts raised in the complaint” (cao Operational…, cit., p. 13). According to the cao Operational…cit., p. 18, “[j]oint fact-finding is an approach that encourages the parties to jointly agree on the issues to be examined; the methods, resources, and people that will be used to conduct the examination; and the way that information generated will be used by the parties”. cao Operational…, cit., p. 22.

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compliance investigation. The purpose of compliant appraisal, on the one hand, “is to ensure that compliance investigations are initiated only for those projects that raise substantial concerns regarding environmental and/or social outcomes, and/or issues of systemic importance to ifc/miga”.24 The purpose of the investigation compliance, on the other hand, is to “objectively obtaining and evaluating evidence to determine whether environmental and social activities, conditions, management systems, or related information are in conformance with the compliance investigation criteria”. The compliance investigation criteria include “ifc/miga policies, Performance Standards, guidelines, procedures, and requirements whose violation might lead to adverse environmental and/or social outcomes”.25 c Accountability Mechanism of the Asian Development Bank26 The Accountability Mechanism of the Asian Development Bank was established in 2003 and revised in 2012. It replaced the Inspection Function, in operation since 1995, created in order to assess compliance of projects financed by the Asian Development Bank with its operational policies and procedures.27 The Accountability Mechanism as their fundamental aim to “provide an independent and effective forum for people adversely affected by ADB-assisted projects to voice their concerns and seek solutions to their problems, and to request compliance review of the alleged non-compliance by the adb with its operational policies and procedures that may have caused, o risk likely to cause, them direct and material harm”.28 The Accountability Mechanism, as amended in 2012, was organized in order to: “(i) increase adb’s [Asian Development Bank] development effectiveness and project quality; (ii) be responsive to the concerns of projectaffected people and fair to all stakeholders; (iii) reflect the highest professional and technical standards in its staffing and operations; (iv) be as independent 24 25 26

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cao Operational…, cit., p. 22. cao Operational…, cit., p. 23. About the Inspection Policy of the Asian Development Bank, see Eugenia McGill, “The Inspection Policy of the Asian Development Bank”, in Gudmundur Alfredsson and Rolf Ring (editors), The Inspection Panel of the World Bank. A different complaints procedure, Martinus Nijhoff, 2001, pp. 191–207. In accordance with the Accountability Mechanism Policy in 2012, 2012, p. 2, “[f]rom 1995 to 2003, adb received eight requests for inspection, of which six were deemed ineligible”. During the first version of the Accountability Mechanism, from 2004 to 2011, the mechan­ ism received 39 complaints, of which only 13 were deemed eligible (Accountability Mechanism…, cit., p. 48). Accountability Mechanism…, cit., p. 21.

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and transparent as possible; (v) be cost-effective and efficient; and (vi) be complementary to other supervision, audit, quality control, and evaluation systems at adb”.29 The Accountability Mechanism pursues two distinct functions: i) a problem solving function, intended to “respond to problems of local people affected by ADB-assisted projects through a range of informal and flexible methods”,30 through consultive dialogue, information sharing, joint fact-finding, and mediation; and ii) the compliance review function, in order to “investigate alleged noncompliance by adb with its operational policies and procedures that has caused, or is likely to cause, direct and material harm to project-affected people”.31 Independent Consultation and Investigation Mechanism of the Inter-American Development Bank32 The Independent Consultation and Investigation Mechanism of the InterAmerican Development Bank was created in 2010 and revised in 2014. It replaced the Independent Inspection Mechanism, in operation since 1994, which had been created in order to increase transparency, accountability, and efficiency of Inter-American Development Bank. The objectives of the Independent Consultation and Investigation Mechanism are:33 to “[p]rovide a mechanism and process independent of Management in order to investigate allegations by Requesters of Harm produced by the Bank’s failure to comply with its Relevant Operational Policies in Bank-Financed Operations”; “[p]roviding information to the Board regarding such investigations”; and “[b]e a last-resort mechanism for addressing the concerns of Requesters, after reasonable attempts to bring such allegations to the attention of Management have been made”.

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Accountability Mechanism…, cit., p. 21. Accountability Mechanism…, cit., p. 21. Accountability Mechanism…, cit., p. 21. About the Independent Investigation Mechanism of the Inter-American Development Bank, see Gay Davies Miller, “The Independent Investigation Mechanism of the InterAmerican Development Bank”, in Gudmundur Alfredsson and Rolf Ring (editors), The Inspection Panel of the World Bank. A different complaints procedure, Martinus Nijhoff, 2001, pp. 209–217; Mackenzie, Romano, Shany and Sands, Manual…, cit., pp. 478–481. About the Independent Consultation and Investigation Mechanism, see Victoria Elliott, Elena Costas-Perez, Karl Truong, William Partridge e Maria Valeria Junho Pena, Evaluation of the Independent Consultation and Investigation Mechanism (icim), 2012. Policy of the Independent Consultation and Investigation Mechanism. Approved Version, December 17, 2014, p. 1.

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The Independent Consultation and Investigation Mechanism activities are developed through: i) a “Consultation Phase: This phase provides an opportunity for the Parties to address the issues raised in the Request in a voluntary, flexible and collaborative manner”; and ii) a “Compliance Review Phase: This phase offers an investigative process related to the issues raised in the Request to establish whether the Bank failed to comply with any of its Relevant Operational Policies34 and whether that has caused Harm to the Requesters”.35 The Consultation Phase “is intended to be flexible, consensus-based, and tailored to the specific issues raised in the Request related to policy noncompliance. The methods to be used will depend on factors such as urgency, type of Harm involved, remedies sought and the likelihood that the exercise will have a positive outcome. These methods include but are not limited to: information gathering, joint fact-finding, consultation, negotiation, and mediation”.36 The Compliance Review Phase, in turn, is “fact-finding in nature. It is not a judicial process and is not designed to establish guilt or innocence, or to adjudicate blame among the various Parties involved. The icim [Independent Consultation and Investigation Mechanism] only has a mandate to investigate allegations of noncompliance with Relevant Operational Policies in Bank-Financed Operations. It does not have a mandate to investigate actions of governments, public entities, local authorities, Borrowers, Executing Agencies or other lenders, sponsors or investors in connection with Bank-Financed Operation”.37 e Independent Review Mechanism of the African Development Bank The Independent Review Mechanism (irm) of the African Development Bank in operation since 2006, under the Compliance Review and Mediation Unit, was revised in 2009.38 The irm was established “for the purpose of providing people adversely affected by a project financed by the Bank, the Fund, the Nigeria Trust Fund 34

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In the Relevant Operational Policies, the following areas are included in accordance with the Policy of the Independent…, p. 6: “Access to Information (OP-102)”, “Environment and Safeguards Compliance (OP-703)”, “Disaster Risk Management (OP-708)”, “Public Utilities (OP-708)”, “Involuntary Resettlement (OP-710)”, “Gender Equality in Development (OP-761)” e “Indigenous Peoples (OP-765)”. Policy of the Independent…, cit., p. 2. Policy of the Independent…, cit., p. 8. Policy of the Independent…, cit., p. 10. About the activities of the Independent Review Mechanism, see The Independent Review Mechanism. Annual Report 2013 [2014].

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and other Special Funds administered by the Bank (collectively the ‘Bank Group’) with an independent mechanism through which they can request the Bank Group to comply with all its own policies and procedures”.39 The mandate of the irm covers compliance review and problem-solving functions. In accordance with the first, “the irm will, in the case of Bank Groupfinanced sovereign guaranteed projects, focus on issues of non-compliance by an institution within the Bank Group with any of its operational policies and procedures in respect to the design, implementation or supervision of such project, and, in the case of private sector and/or non-sovereign guaranteed Bank Group-financed projects, on social and environmental compliance”.40 For its part, “[t]he problem-solving function will be used where complaints or grievances can also, or alternatively, benefit from problem-solving techniques to assist in trying to resolve the underlying issues. These techniques will include independent fact-finding, mediation, conciliation, dialogue facilitation taking into consideration best customary practices for handling complaints”.41 Project Complaint Mechanism of the European Bank for Reconstruction and Development42 The Project Compliant Mechanism (pcm) of the European Bank for Reconstruction and Development was established in 2010, and it currently works in accordance with the rules adopted in May 2014.43 It replaced the Independent Recourse Mechanism that had been established in 2003. The mandate of the pcm is pursued through the two functions, a Problemsolving function, and a Compliance Review function. The objective of the first is “restoring a dialogue between the Complainant and the Client to resolve the issue(s) underlying a Compliant without attributing blame or fault”,44 while the second “seeks to determine whether or not the ebrd has complied with a Relevant ebrd Policy in respect of an approved Project”.45

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irm Operating…, cit., p. 1. irm Operating…, cit., p. 1. irm Operating…, cit., p. 1. About the Independent Recourse Mechanism About, see Mackenzie, Romano, Shany and Sands, Manual …, cit., pp. 493–496. In accordance with the Project Complaint Mechanism. Annual Report 2013, p. 4, “[s]ince its launch in 2010 the pcm has seen a dramatic increase in the number of requests received (…). During the last three years, the pcm received 64 letters or complaints, of which 14 were registered, six suspended for registration and 44 deemed ineligible”. Project Complaint Mechanism (pcm). Rules of Procedure. As approved by the Board of Directors at its Meeting on 7th May 2014 (in force as of 7 November 2014), p. 1. Project Complaint…, cit., p. 1.

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It must be noted that “[t]he fact that a Complaint has been registered and/ or found eligible for either a Compliance Review and/or a Problem-solving Initiative will not, of itself, have the effect of suspending the Bank’s interest in the Project. However, if at any time during the processing of a Complaint, the pcm Officer believes that serious, irreparable harm will be caused by the Bank’s continued processing of the Project or disbursements in respect of the Project, the pcm Officer may make an interim recommendation to suspend further Bank processing of the Project or, if possible, disbursements in respect of the Project”.46 iv

Is the uefa Club Financial Control Body a Manifestation of the Use of International Inspection and Control Mechanisms by Entities Other than International and Regional Development Banks?

This brief presentation of the existing international inspection and control mechanisms in international and regional development banks clearly leads towards a negative answer to the question formulated above. Both by virtue of the objectives that they intend to achieve and by the methods they use in the pursuit of their activities, these mechanisms of conflict resolution are not necessarily a specificity of international and regional development banks.47 From this answer follows a final question to finish this introduction, viz. can the uefa Club Financial Control Body be considered to be a manifestation of the use of international inspection and control mechanisms by entities other than international and regional development banks? In accordance with paragraph 1 of Article 3 of the Procedural rules governing the uefa Club Financial Control Body of 2014, it is possible for the uefa Club Financial Control Body (cfcb) to “impose disciplinary measures as defined in these rules in the event of non-fulfilment of the requirements set out in the uefa Club Licensing and Financial Fair Play Regulations” [subparagraph d)], and to “decide on cases relating to club eligibility for the uefa club competitions to the extent provided for by the regulations governing the competitions in question” [paragraph e)]. It should be noted that, under Article 6 of the Procedural rules

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Project Complaint…, cit., p. 6. One manifestation of the potential of these mechanisms to be created in international entities other than international and regional development banks is the inclusion of the Office of Audit and Investigations (oai), established in the United Nations Development Program, on the Independent Accountability Network.

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aforementioned, “[t]he members of the cfcb are independent. They are bound exclusively by the uefa Statutes, rules and regulations and the law”. The response to the above question will certainly be provided by the contribution of Chairperson of the uefa Club Financial Control Body (cfcb), José Narciso da Cunha Rodrigues, which will follow this brief introduction. To conclude, in order to stimulate future debate, it will be useful to have highlighted already the fact that the use of the Union of European Football Associations (uefa) and the uefa Club Financial Control Body for the proposed test cannot ignore a previous questioning about the international legal nature of these bodies and the sources of law they employ, taking into account that the international effects of their activities are indisputable and permanently reported.

chapter 6

The uefa Financial Control Body José Cunha Rodrigues To speak about football in the context of international courts and jurisdictions might seem a little provocative! On the other hand, I can imagine that you were a little disappointed when you learned that the initials of my name, “C.R.”, mean “Cunha Rodrigues” and not “Cristiano Ronaldo”! I of course apologise for that deception and I will try to explain the reasons for the theme I have chosen. I have been asked to speak on the topic of international inspection and control. With this in mind, I thought that it might be interesting to introduce a peculiar aspect of international justice, which concerns activities which are growing in social and economic importance. By this I mean sport and, in particular, football. As a consequence of the “autonomy of sport”, it is common to say that football falls outside of the legal framework of the State. We are all familiar with the arguments against integrating football into official systems of justice because of the characteristics of these systems. Nevertheless, all around the world, the reality is that there is an increasing movement away from traditional models of justice and towards greater specialisation and the creation of specific bodies. This movement follows a trend to regulate sporting activities in several fields. Generally speaking, we would say that, in Europe, sport is subject to European law in so far as it constitutes an “economic activity”. The Declaration on Sport (29) annexed to the final act of the Conference, which adopted the text of the Amsterdam Treaty emphasises the social significance of sport. As with the banking sector, we can consider the systemic risks concerning the economy of football, recalling numerous examples of clubs entering into administration and/or bankruptcy. In this regard, it is important to remember that just under half of all European football clubs (49 per cent) take the form of “non-profit associations”. This means that the links between football, the economy and society are increasing, as are calls for the intervention of State legislators. For example, the general economic deterioration in Europe highlighted a growing risk regarding the financing of football. The problems to consider are therefore: (a) how to organise mechanisms of inspection and control to deal with these economic difficulties?; and (b) how

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to safeguard the overall interests and needs of the different stakeholders (leagues, clubs, players and supporters)? The link between these questions and the general situation in Europe is confirmed by the White Paper of the European Commission on Sport, which highlighted uefa’s club licencing system as the natural framework for improving financial transparency and management in football clubs. In the same context, the European Parliament encouraged this system and quoted uefa’s financial fair play regulations as an example of good corporate governance practice in sport. In order to tackle these challenges, uefa decided that it was necessary to organise an independent and specialised judicial body. As I will explain, uefa adopted a model, which applies the essential principles of the administration of justice. This approach has led to an interesting dialogue between official bodies and private institutions in order to satisfy urgent matters of legality and justice. It is also interesting to observe that uefa’s solutions correspond to the most recent reforms applied in administrative, labour, civil and criminal law. With regard to the need for reform, I must admit that traditional models of justice suffer from certain prejudices about justice being a prerogative of the State and about the implications of the right to access justice. These prejudices are blocking the solutions and creating problems of specialisation and credibility. The movement towards the creation of courts for arbitration and the acceptance of institutional private bodies may signify that, in the long term, legal systems can evolve towards a position of greater pluralism, provided that fundamental rights can be safeguarded. If I am right, we must recognise that the problem of justice in football is not an eccentricity but a crucial theme and, with that in mind, we have made a positive choice by including it in this collection. As I mentioned earlier, today we are going to speak about financial fair play. In this area, we must first ask ourselves if we are looking at a new era in sport and, in particular, football? The answer to this question can be found by considering the concept of the “market”. Even as early as 1899, Jackson said of football in England: “There is no doubting the obvious fact that the Football Association had turned from its original object of promoting sport and had adopted the core of the business of football”. As we know, over the years sport has become even more of an economic activity. As a result of the globalisation of the economy after the Second World War, sporting events and audiovisual media together began to develop a special place in the markets. And this has continued into the present day. Despite the very severe economic conditions affecting European markets in recent times, football revenues

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have continued to grow. The aggregate revenues of the 237 competing clubs competing in uefa club competitions during the 2013/2014 season was €8.1 bn, equivalent to 57 per cent of the total revenues of €14.1 bn reported in 2012 by the 700 clubs competing in Europe’s top tier domestic competitions. Broadcasting rights represented more than 55% of the total 2013/14 revenues. It it is not surprising that some financial turbulence has been felt in professional football, as it is an economic activity. Principally, the debts in many clubs have risen to unstable and unacceptable levels. The social and cultural importance of sporting activities and their relationship with economic freedoms, namely in the field of competition, called for some regulation in order to ensure the stability, integrity and fairness of sport at European level. uefa is one of the institutions that was quick to recognise this need for change. The need to protect professional football from predatory movements generated by wild capitalism took a central place in the objectives of uefa’s financial fair play regulations. The main problem uefa faced was to decide if such regulations were compatible with traditional rules of economic regulation (e.g. eu competition law). The concept of financial fair play aims to encourage clubs to operate on the basis of their own revenues. This objective became a slogan, but it was quickly understood that uefa was aspiring to initiate new models of governance in football. It is important to note that sport does not fall outside of the legal framework of the State or, indeed, applicable international and European community legislation. As I said, sport is subject to eu law in so far as it constitutes an economic activity. Since uefa is an association of undertakings (or more accurately, an association of associations of undertakings) its regulations must be compatible with the provisions of the eu treaties. As a consequence, every decision of uefa, which restricts the freedom of action of the parties necessarily falls within the prohibition laid down in Article 101 (1) tfeu. The Court of Justice has consistently recognised that sporting activities and, in particular, football, have considerable social importance. This importance has also been confirmed by the Treaties (namely Article 165, 1) and the legislation of Member States. uefa has always been aware that it has to act as a regulator for the general good of football. In 2004/2005, uefa introduced its club licensing system. Today, this system includes the following matters amongst its objectives: (a) the improvement of the economic and financial capability of the clubs; (b) increasing the transparency and credibility of the clubs; (c) placing the

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necessary importance on the protection of creditors; (d) safeguarding the ­continuity of international competitions for one season; (e) monitoring the financial fair play in those competitions; and (e) protecting the integrity of international competitions for one season. In October 2008, uefa created a Financial Fair Play Working Group. The objectives and the goals of the Group were based on the idea that clubs should “live within their own means”. The main recommendations of the Group can be summarized as follows: (a) to encourage clubs to respect financial commitments and to protect creditors; (b) to improve the transparency of clubs; and (c) to create an independent control body to ensure clubs fulfill their obligations and to ensure such a body has the authority to impose specific measures and sanctions. The Break-Even Requirement is perhaps the most interesting element of these objectives and goals. The Break-Even Requirement provides that a club, over a rolling period of three (up to five) years, must break-even, i.e. that its “relevant income” should at least match its “relevant expenses”, subject to an “acceptable deviation” that, as a general rule, amounts to €5 million. Relevant income essentially refers to income generated from football activity, such as revenue from gate receipts, broadcasting rights, sponsorship and advertising. It also includes any profit generated on the disposal of player registrations or any income from the disposal of player registrations. Relevant expenses essentially refers to expenses incurred while running a club’s football activities, such as employee benefits expenses and other operating expenses, plus either the amortization or costs of acquiring player registrations. A club’s break-even result is the difference between its relevant income and its relevant expenses in a given reporting period. At this stage, it might be interesting to consider if there are any similarities between the laws of the State and the laws of football. Can any analogies be drawn between State regulations and football rules? What about State aid rules, which prevent undertakings from trading at a level in excess of their own resources by prohibiting the injection of funds by the State? Is there an analogy between uefa’s financial fair play regulations and the prudential rules applied to banks? Is there an analogy between financial fair play and insolvency laws aimed at preventing companies from trading whilst insolvent? Further, we might also wish to consider the impact of uefa’s financial fair play regulations. Has the break-even principle had a detrimental effect on European football? How can we ensure justice in sports and, in particular, in football? These are indeed difficult questions to answer. As you know, the media world is characterized by the quick growth of new technologies and their capacity to afford knowledge to users in real time. It can

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be said that football is an activity where we can better see a rupture in the notions of time, space, truth and certitude. This rupture comprises the perception of the game and public opinion. The reality is often captured by passion and interest. On the other hand, there are obvious links between football’s economy and financial interests. With this in mind, we might ask ourselves, is it possible to distinguish a football club’s sporting activities from its economic activities? All these questions lead us to a fundamental issue: what is the role of traditional bodies for administration of justice in a sporting context? At the beginning of the 1980s, the increase in international sports-related disputes and the absence of any independent authority specializing in sports-related matters led the world’s leading sports organization, the International Olympic Committee (ioc), to reflect on the question of sports dispute resolution. In 1983, the ioc ratified the statues of the Court of Arbitration for Sport (the “cas”). The cas became operational on 30 June 1984. Generally speaking, a dispute may be submitted to the cas only if there is an arbitration agreement between the parties on disputes connected with sport. In 1996, the cas moved to decentralized offices (i.e. separate from the ioc) and ad hoc divisions were admitted. For example, the cas was asked by uefa to create ad hoc divisions for the uefa European Football Championships held in Belgium/Netherlands in 2000, in Portugal in 2004 and in Switzerland/ Austria in 2008. The cas performs its functions through arbitrators, of whom there are at least 150, with the aid of a court office, which is headed by the Secretary General. The design of the initial uefa Club Financial Control Panel reflected this evolution. In September 2009, uefa’s Executive Committee approved the creation of a Club Financial Control Panel. This body comprised financial and legal experts. Members had to be independent from the Executive Committee, the uefa Organs for the Administration of Justice and uefa committees and could not hold any position in uefa’s member associations, leagues and clubs. It was composed of a Chair and up to eight members appointed by the uefa Executive Committee. The main task of the Club Financial Control Panel was to ensure that uefa’s club licensing system was applied correctly and to implement the new financial fair play regulations. For these purposes, it could order financial audits to be carried out on football clubs. The success of this experience encouraged uefa to create a new body in March 2012, known as the Club Financial Control Body (the “cfcb”). The cfcb is a new uefa Organ for the Administration of Justice and replaced the Club Financial Control Panel, given that it was considered necessary to have a more “specialised” body capable of enforcing the rules.

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The cfcb is underpinned by an Investigatory Chamber, led by the cfcb Chief Investigator, with primary responsibility for the investigation stage of the proceedings and an Adjudicatory Chamber, with primary responsibility for the judgment stage of the proceedings. The cfcb Chairman heads the Adjudicatory Chamber and supervises the functioning of the cfcb in accordance with the uefa Club Licensing and Financial Fair Play Regulations. The 8 members of the Investigatory Chamber are mainly financial experts and qualified lawyers, while the 5 members of the Adjudicatory Chamber are mainly qualified lawyers and judges. The members of the cfcb are independent. The cfcb can take disciplinary measures and its final decisions may be appealed to the cas. In line with the composition of the cfcb, proceedings include an investigatory phase and a judgment phase. At the end of the investigatory phase of a case, the cfcb Chief Investigator, after having consulted with the other members of the Investigatory Chamber, may decide to: a) b) c) d)

Dismiss the case; Conclude, with the consent of the defendant, a settlement agreement; Apply, with the consent of the defendant, disciplinary measures limited to a warning, a reprimand or a fine up to a maximum amount of €100.000; or Refer the case to the Adjudicatory Chamber.

Settlement agreements shall be deemed appropriate in circumstances, which justify the conclusion of an effective, equitable and dissuasive solution without referring the case to the Adjudicatory Chamber. Settlement agreements may set out the obligations to be fulfilled by the defendant, including the possible application of disciplinary measures and, where necessary, a specific timeframe. The Chief Investigator monitors the proper and timely implementation of settlement agreements. Any decision of the Chief Investigator to dismiss a case, to conclude a settlement agreement or to apply disciplinary measures may be reviewed by the Adjudicatory Chamber on the initiative of the Chairman of the cfcb. Any decision of the Chief Investigator to conclude a settlement agreement or to apply disciplinary measures may also be reviewed by the Adjudicatory Chamber at the request of a “directly affected party”. The Adjudicatory Chamber only reviews decisions of the Chief Investigator with regard to the existence of a “manifest error of assessment”. Following a referral from the Investigatory Chamber, the cfcb Chairman invites the defendant to submit its written observations within a suitable time limit and may, on his own initiative or at the request of the defendant, convene an oral hearing.

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Hearings may be attended by the defendant, its legal/professional advisers and, with the permission of the Chairman, any other person. The Adjudicatory Chamber’s deliberations are confidential and may, where necessary, take place by means of video or telephone conference. The Adjudicatory Chamber makes its final decision by simple majority. Abstentions are not taken into account. In the event of a tie, the cfcb Chairman has the casting vote. The final decisions of the Adjudicatory Chamber are published. The Adjudicatory Chamber may, following a reasoned request from the defendant, redact the decision to protect confidential information or personal data. According to Article 42 of Procedural Rules governing the cfcb and Article 4 of uefa Disciplinary Regulations, in the absence of specific provisions, the cfcb shall take a decision on the basis of recognised legal principles, in accordance with justice, fairness and/or customary uefa rules (or, where this is not possible, on the rules it would establish were it to legislate). The following disciplinary measures may be imposed against any defendant other than an individual: a) Warning; b) Reprimand; c) Fine; d) Deduction of points; e) Withholding of revenues from a uefa competition; f) Prohibition on registering new players in uefa competitions; g) Restriction on the number of players that a club may register for participation in uefa competitions, including a financial limit on the overall aggregate cost of the employees benefits and expenses of players registered on the A-list for the purposes of uefa competitions; h) Disqualification from competitions in progress and/or exclusion from future competitions; i) Withdrawal of a title or award. The following disciplinary measures may be imposed against any defendant who is an individual: a) Warning; b) Reprimand; c) Fine; d) Suspension for a specified number of matches or a specified or unspecified period;

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e) Suspension from carrying out a function for a specified number of matches or for a specified or unspecified period; f) Ban on exercising any football-related activity. Disciplinary measures may be combined. A disciplinary measure may be suspended in whole or in part, for a specific period of time or until the occurrence of a specific event. Evidence shows, according to uefa information, that for the first time in recent history there was a more than €600 million decrease in club losses and that the overdue payables decreased from €57 million to €9 million. In addition, the 237 clubs competing in European club competitions have reduced their aggregate losses by 36 per cent.

Part 3 European and Other Regional Courts of Human Rights

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chapter 7

Introduction Ireneu Cabral Barreto I would like to begin by thanking Professor Dário Moura Vicente and the “International Law Association” for inviting me to moderate this session concerning “European and other Regional Courts of Human Rights”, and telling you about my joy to be here with you to address a topic that was, and still is, so dear to me. For nearly thirty years, my main concern was undoubtedly human rights, being an agent of the Portuguese Government before the Court and the European Commission of Human Rights, later, as a member of that Commission and, finally, as a Judge of the European Court of Human Rights. During this period, I came across and reflected on the difficulties that arise from human rights in the global world we live in and, particularly, the challenges posed to the European Court of Human Rights to give a prompt response to all complaints alleging violations of fundamental rights by the States parties. As you know, the Court was a victim of its huge success and is always fighting against its chronic delay. Several improvements have been made to overcome the deficiencies of the Court including one that causes me great concern: the new orientation on the interruption of the six months deadline to submit the complaint.1 And what can we expect from the new Protocols 15 and 16? I do not want to elaborate on these issues for now, but, if we have time, perhaps I will return to them in order to explain to you what I have already written and sustained several times: the solution to the Court’s overload lies in the States, that should create effective and accessible internal means in order to terminate and remedy human rights violations. Only when these means do not prove to be adequate in order to repair such violations should the Court be called in. 1 Jurisprudence in this field, is as follows: “The running of the six month period is interrupted by the first letter from the applicant setting out summarily the object of the application, provided that the letter is not followed by a long delay before the application is completed. In order to interrupt the running of the six-month period all that is required is that the applicant should be clearly identifiable and should have set out at least in substance, his complaints, the other formalities can be completed later. After the 31 January 2004, in order to interrupt the running, all formalities should be completed.”

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Judge Pinto de Albuquerque will discuss the system of protection offered by the Court. It will also be very interesting to listen to Professor José Pina Delgado on other regional systems of human rights protection: the African and the Inter-American; both having a Commission and a Court and both being very similar to the European system before the 1998 reform. I have studied in detail the Inter-American system which always left me with mixed feelings: on the one hand, one of profound disappointment because two major American States, Canada and the United States, have not agreed to the jurisdiction of the Court of St. Joseph San José; on the other hand, surprise at the strong jurisprudence of this Court, particularly when it comes to arbitrating fair compensation. Indeed, Article 63 of the American Convention establishes that in case of a violation of a right or freedom protected by this convention, the Court shall rule that the injured party be ensured the enjoyment of his right or freedom. “It also determines, “if appropriate, that the consequences of the measure or situation that constituted the breach of such right or freedom be remedied and that fair compensation be paid to the injured party”. The largest amplitude of this text allows various forms of compensation, including non-monetary reparations. The Inter-American Court of Human Rights has found special ways, taking into account the characteristics of the case, to realistically and effectively repair or, at least, minimize the damage caused by the breach. Thus, the Court has imposed on States to amend, repeal or adopt domestic laws or judgments, or to adopt specific measures, some very imaginative, in order to mitigate or eliminate the material or moral damage caused by the violation detected. Here we have some leading cases: i.

In the case Aleboetoe / Suriname, of September 14, 1996, the murder victims were a tribe of African origin who lived in the jungle preserving traditional customs; the Court ordered, for reparation to victims or their families, creating two funds with the sums which fixed the reopening of a school and a medical service. ii. In the case Loaysa Tamayo / Peru, of November 27, 1998, the Court referred first to the “life project” of the victim affected by the violation— illegal detention; Judgments and Street Children (Villagran Morales et al / Guatemala), of December 3, 2001, and Cantoral Benavides / Peru on December 3, 2001, arguing that the violation committed contending with the “life project”, switched personality development and construction of the victims lives, thus causing a loss of opportunities, forced the State to

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bear the costs of their higher education (as in that first Judgment Trujillo Oroza / Bolivia, of February 27, 2002, the Court ruled that the State added the name of the victims to an educational center, during a public ceremony in the presence of their relatives). iii. In the case Barrios Altos / Peru, of March 14, 2001, the Court examined the massacre during a popular festival which was invaded by a death squad known as the Colina Group; this group, armed and hooded, slaughtered 15 people and wounded 4, the Court ruled that the State, in addition to compensation for the families of the victims and the wounded, should reopen the investigation and punish those responsible. iv. In the case Neira Alegria / Peru, of January 19, 1995, the Court ordered the State to do everything possible to locate and identify the bodies of victims and deliver them to their families. Returning to the issue of improving the European system, I must say that if one does not want to touch the right of individual complaint, the subsidiary nature of the control mechanism of the Convention should be extended in all directions. If the subsidiary principle is properly understood, it should be up to the States to provide mechanisms, which allow them to effectively remedy the violations of rights and freedoms guaranteed by the Convention. In this scenario, the Strasbourg Court would be reserved for extreme situations in which, despite all, it was not possible to find a remedy or solution internally. Actually, Article 35, § 1, is based on the assumption, embodied in Article 13 (with which it has a close affinity), that the domestic legal order provides effective remedies. Thus, in announcing explicitly the obligation of States to protect human rights, first within their own domestic law, Article 13 provides for the benefit of individuals, an additional guarantee of effective enjoyment of the rights in question. As follows from the preparatory work, “the object of Article 13 is to provide a means by which individuals can obtain, at the national level, reparations for violations of their rights guaranteed by the Convention, before they have to trigger the international mechanism complaint before the Court.” The rule of exhaustion of domestic resources and the right to effective remedies are in fact two sides of the same coin: it requires, first, that States parties ensure the rights and obligations enshrined in the Convention and, if these are violated, that the victims are offered the appropriate, effective and accessible means, so they can receive internally amends for the damage they suffered. In some States, there are special processes to sanction violations of human rights. Given the countless complaints about the excessive length of proceedings that come from Italy—which at one point reached the number of 13,000

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pending complaints—it was necessary to react. In order to internally make effective the principle of ‘reasonable period’, which is written in the Constitution, the Italian Parliament adopted, on March 24, 2001, an Act, the Pinto Act, enshrining the right to reasonable redress for excessive length of proceedings and respective judicial action to effect. Another specific means, under Spanish law, for violations of the ‘reasonable period’ (besides the writ of amparo), lies in Articles 292 et seq. of the Organic Law on the Judiciary, which offers the possibility of making a claim for compensation to the Ministry of Justice by abnormal functioning of the judicial system. Bear in mind that the decision of the Minister of Justice may be subject to judicial review before the administrative courts. It is a domestic guarantee that must be exhausted before presenting the complaint in Strasbourg. Other specific means that exist today in Italy, Spain, France (e.g., civil action against the State) and Portugal (e.g., procedural acceleration in criminal proceedings) are both of judicial and administrative nature. All these instruments apply only to violations of reasonable duration of proceedings and the question of its effectiveness to sanction another type of violations seems justified. I wonder if it is possible, at least for certain types of violations that the creation of a domestic organ filtering complaints internally, proves to be effective? This model will certainly have some drawbacks and no-one can guarantee that it would solve the delays of the Court in a satisfactory manner. But this solution is also compatible with almost all those others that have been proposed with the same aim, and, moreover, is in accordance with the discretion (margin of appreciation), that is, with the theory that calls upon the national courts in the first place, to sanction human rights violations occurring in the respective States parties. In summary and conclusion, all measures allowing the Court to continue its role as guardian of the European legal order are welcome, provided they do not disturb the Court’s place as the last resort for all those who were victims of human rights violations that were not internally and properly repaired.

chapter 8

The European Court of Human Rights as the European Constitutional Court Paulo Pinto de Albuquerque 1.

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The European Convention on Human Rights provides for a system of protection of the “substance” of human rights of all individuals within the jurisdiction of the States Parties. Moreover, the Convention guarantees not rights that are theoretical or illusory but rights that are practical and effective. Being more than a multilateral agreement on reciprocal obligations of States Parties, the Convention creates obligations for States Parties towards all individuals within their jurisdiction, envisaging the practical implementation of the protected rights and freedoms in the domestic legal order of the States Parties. Therefore, the States Parties to the Convention are legally obliged not to hinder in any way the effective exercise of the right of individual application and to make such modifications in their domestic legal systems as may be necessary to ensure the full implementation of the obligations incumbent on them. Seen from another perspective, these are the consequences of the principle of good faith in fulfilling treaty obligations, foreseen in Articles 26 and 31 of the Vienna Convention on the Law of Treaties. The most important instrumental obligation of States Parties to the Convention is the obligation to abide by the Court’s judgments (Article 46 of the Convention). At first sight the Convention provides that the effects of the Court’s judgments are restricted to the parties to the case, that is, the applicant or applicants and the respondent State or States. This first reading is misleading, however, and a correct construction of Article 46 requires it to be read jointly with Article 1. In the light of these provisions read together, the Court’s judgments have a direct and erga omnes effect. In the seminal case of Vermeire v. Belgium, the Court explicitly reasoned that it could not reject in 1991, with respect to a succession, which had taken effect on 22 July 1980, complaints identical to those, which it had upheld on 13 June 1979 in the Marckx v. Belgium judgment. The failure by the Belgian legislature to implement Marckx at the national level did not absolve the respondent State of its international obligation to prevent future breaches of the Convention as a result of the same deficient

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i­ nheritance law, having regard to the fact that the courts were also bound by the Convention as interpreted by the Court. Thus, the Court recognised the stare decisis force of Marckx, which had already settled the issue raised by the applicant in Vermeire. In other words, the Court has recognised the direct and erga omnes effect of its judgments, or to quote from Marckx itself, the “effects extending beyond the confines of this particular case”, within the legal order of the respondent State. In fact, the Court had already formulated, in clearer terms, the erga omnes effect of its judgments when it affirmed, in Ireland v. the United Kingdom, that “the Court’s judgments in fact serve not only to decide those cases brought before the Court but, more generally, to elucidate, safeguard and develop the rules instituted by the Convention, thereby contributing to the observance by the States of the engagements undertaken by them as Contracting Parties (Article 19) (art. 19).” The argument of the Court— that “the conclusion thus arrived at by the Court is, moreover, confirmed by paragraph 3 of Rule 47 of the Rules of Court. If the Court may proceed with the consideration of a case and give a ruling thereon even in the event of a “notice of discontinuance, friendly settlement, arrangement” or “other fact of a kind to provide a solution of the matter”, it is entitled a fortiori to adopt such a course of action when the conditions for the application of this Rule are not present”—still carries much weight today. The Court has on many occasions refused to strike out a case, even though the applicant had sought to withdraw his or her application, because it considered that the case raised questions of a general character affecting the observance of the Convention or involved a question of general interest both for the respondent State and other States Parties. The same underlying general interest justified the introduction of the concept of “potential victim” and the practice of third party intervention. The “maintenance and further realization of human rights and fundamental freedoms” in the Council of Europe and the “achievement of greater unity between its members” indeed call for this broad understanding of the Court’s mission, not only in regard to the conditions for admissibility of applications to the Court and the striking out of applications, but also to the effects of its judgments. The collective nature of the Court’s input logically impacts on the erga omnes nature of its output. As the Court explained in Karner v. Austria, “Although the primary purpose of the Convention system is to provide individual relief, its mission is also to determine issues on public-policy grounds in the common interest, thereby raising the general standards of protection of human rights and extending human rights jurisprudence throughout the community of Convention States.”

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In addition, both the principle of good faith and the principle of subsidiarity require that the erga omnes effect of the Court’s judgments be as broad as possible. In the light of the principle of good faith in fulfilling treaty obligations, States Parties must not act contrary to the case-law established by the Court while interpreting the Convention. It would be very problematic, to say the least, for a State Party to maintain a legal provision or an administrative or judicial practice, act or omission that had already been found incompatible with the Convention with regard to another State Party. States Parties not involved in the proceedings must not turn a blind eye to the authoritative interpretation of the Convention made by the Court, which is the final instance invested with that power (Article 19 of the Convention). If they were to do so, either wilfully or negligently, they would be at variance with their own Convention engagements as interpreted by the Court, and thus fail to show the attentive commitment to the fulfillment of treaty obligations, which is called for by the principle of good faith in performing a treaty. However, if the States Parties abide by the standards set in the Court’s case-law, even when they have not been involved in the particular disputes in respect of which the case-law was established, they not only avoid future findings of a violation, but also anticipate the implementation of the rights and freedoms foreseen in the Convention. This proactive approach by the States Parties is also required by a rigorous application of the principle of subsidiarity, which enhances the shared responsibility of States and the Court in securing and enforcing the rights and freedoms of the Convention. Being States Parties at the forefront of the application of the Convention, they are also the first to be confronted with the challenges thrown up by infringements of the rights and freedoms enshrined in the Convention, and they must effectively and promptly resolve these violations at the national level. The full implementation of the Convention at national level requires States Parties to take all measures necessary to redress, and preferably to prevent, violations. Failure to comply with the Court’s case-law, even by States not party to the disputes in respect of which this has been established, would run counter to the aforementioned obligation to act effectively, promptly and in a preventative way in order to secure to everyone the rights and freedoms of the Convention . Ultimately, the direct and erga omnes effect of the Court’s judgments also derives from the inclusion of the Convention among the principles of general international law, which are accepted as an integral part of the domestic legal orders. Moreover, human rights build a continuum

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between international and national legal systems, which interfere with each other, since human rights are not a subject “essentially within the domestic jurisdiction” of States, as provided for by Article 2, paragraph 7, of the United Nations Charter. In a context of pluralist and interdependent international and national legal orders, human rights are a condition sine qua non of both. Hence, the principle of sovereignty does not limit the effective and practical impact of the Convention on domestic legal orders. These developments have culminated in the recognition of the Convention as a “constitutional instrument of European public order” and of its “peremptory character” with regard to other international organisations and therefore of the Court as “Europe’s Constitutional Court”. Hence, all bodies and representatives of any public authority of the respondent State, at all levels of its organisation (national, federal, regional or local), are directly bound by the Court’s judgments and therefore, to use the phrase coined by the Brighton Declaration, “all laws and policies should be formulated, and all State officials should discharge their responsibilities, in a way that gives full effect to the Convention.” In this context, the Court being tasked with the power to interpret and apply the Convention through final and binding judgments (Article 19 of the Convention), the direct and erga omnes effect of the Court’s judgments may not be restricted, in any way, by the States Parties. Only the Court itself can determine a restriction of the effects of its judgments. In principle, member States have the choice of the means to be used in their domestic legal system to perform their obligation under Article 46 of the Convention. This is one of the most important practical consequences of the principle of subsidiarity. But this freedom is not unconditional. The choice of means must be compatible with the conclusions, that is, the operative part and the substance (ratio decidendi) of the reasoning set out in the Court’s judgment. Furthermore, a State party to a treaty may not invoke the provisions of its internal law as justification for its failure to perform the said treaty, nor may a State responsible for an internationally wrongful act rely on the provisions of its internal law as justification for failure to comply with its obligations. The Court’s initial policy of refraining from issuing consequential orders has given way to a broad policy of directions to take specific remedial measures and even orders to the respondent States regarding how to execute the judgment. The Court’s judgments are no longer purely declaratory, but prescriptive. Where required by the specific circumstances of the case, the Court has assumed competence to determine the forms of execution of its judgment, through both concrete and general measures

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11.

12.

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to be implemented by the legislature, the government/administration or the judiciary of the respondent State. The obligation to execute a judgment may include a concrete positive measure, such as to return confiscated land to the applicant, to release the applicant immediately, or to organise a new trial or reopen the domestic proceedings, or to secure effective contact between the applicant and his daughter at a time which is compatible with the applicant’s work schedule and on suitable premises, or to reduce the numbers of prisoners in a prison, or even a concrete negative measure, such as not to claim back the compensation paid following an expropriation at the national level. The obligation to prevent a repetition of the violation may require the adoption of general measures where there is no domestic legal framework compatible with the Convention or the existing domestic legal framework or administrative practice is contrary to the Convention. Systemic problems call for general solutions through “pilot-judgment” procedures and “Article 46 judgments” (or so-called “quasi-pilot judgments”). In some cases the national constitutions may have to be amended, since the Convention “makes no distinction as to the type of rule or measure concerned and does not exclude any part of the member States’ ‘jurisdiction’ from scrutiny under the Convention” (United Communist Party of Turkey and Others v. Turkey). The Court’s judgment must be executed by the judiciary, even before the completion of the domestic legislative reform, since “the freedom of choice allowed to a State as to the means of fulfilling its obligation under Article 53 cannot allow it to suspend the application of the Convention” (Vermeire v. Belgium). In practice, national courts have to refuse to apply the national law or adopt a new interpretation of the national law in order to comply with the Court’s judgments and the international obligation not to repeat a Convention violation. In view of the increasingly prescriptive nature of the Court’s judgments, and consequently of the growing dual facet of the States parties’ obligation to comply with the Court’s judgments as an obligation of result and means, the Court’s control of the application of Article 46 of the Convention is becoming crucial. In Olsson v. Sweden (no. 2), the Court was faced with the persistent failure by the national authorities to allow contacts between the applicants and their children in spite of a previous judgment of the Court in favour of the applicants. The Court held that “the facts and circumstances underlying the applicants’ complaint under Article 53…are essentially the same as those which were considered above under Article 8, in respect of which no violation was found”

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and concluded that “no separate issue arises under Article 53”. Thus, the Court left open the possibility that there might be circumstances under which a complaint under former Article 53 (now Article 46, § 1) of the Convention could be examined. The answer to the question left open by Olsson (no. 2) calls for a teleological interpretation of the Convention. 14. Human rights treaties should be interpreted in a way, which is most protective of the rights and freedoms which they foresee. This principle was stated in Wemhoff v. Germany, where the Court affirmed that it was necessary “to seek the interpretation that is most appropriate in order to realize the aim and achieve the object of the treaty, not that which would restrict to the greatest possible degree the obligations undertaken by the Parties”. This is also in accordance with Article 31 of the Vienna Convention on the Law of Treaties, which provides for a teleological interpretation of international law. In the light of this principle, it is evident that the jurisdictional nature of the Court would be dangerously at risk if the Court did not react to infringements of its judgments and, even worse, if the final word on the execution of its judgments were de facto dependent on the will of the first addressees of the judgments themselves: the governments. The entire system of human rights protection would be sacrificed on the altar of politics, the Court’s judgments being downgraded to provisional statements on disputes in need of a subsequent political satisfecit to be effective. The applicant’s victory at the Human Rights Building would be a Pyrrhic one, the respondent State having a second chance to fight the case in the Palais de l’Europe. Human rights would then be a deceptive mirage in Europe. To ensure that human rights do not become a mere mirage, the most protective interpretation of the Convention’s rights and freedoms is required: to guarantee real, not virtual, independence of the judicial power and an effet utile, not apparent, of the rights and freedoms of the Convention, it is indispensable that the Court be vested with the implied power to oversee the execution of its judgments, and, if need be, to contradict a decision of the Committee of Ministers in this regard. 15. International law and practice have long acknowledged the “implied powers doctrine”, according to which international organisations not only have the powers which are explicitly foreseen in their founding texts, but also such powers as are necessary for the most efficient exercise of their tasks. Applied to the present case, this doctrine requires that international tribunals and adjudication bodies be implicitly vested with the power to supervise the execution of their judgments when this is necessary for the discharge of their functions. In the European legal framework of human rights, the Court’s power to supervise the execution of its

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judgments is implicit in its duty to ensure compliance with States Parties’ obligations under the Convention and its power to decide any question regarding the application of the Convention (Article 19 in conjunction with Article 32). Protocol No. 14 was a step in the right direction, but still did not fully enshrine this implied power. The Protocol provides for an enlargement of the Court’s power to control the execution phase: the Court can interpret its own judgments and decide that a respondent State has not complied with them when problems arise during the execution process. When considering requests for interpretation of its judgments, the Court is exercising inherent jurisdiction: it goes no further than to clarify the meaning and scope which it intended to give to a previous decision deriving from its own deliberations, specifying if need be what it thereby decided with binding force. In infringement proceedings, the Court assesses compliance by a State Party with its obligations under Article 46 of the Convention, without reopening the question of the violation that gave rise to the original judgment. In spirit, the new infringement proceedings include both inactivity on the part of the respondent State, which has done nothing to execute a Court’s judgment, and incomplete or even inadequate execution by the respondent State. The rationale is the same: the Convention requires full execution of the Court’s judgments and partial or inadequate compliance with the Court’s judgment can be as harmful as no compliance at all. The explicit recognition in Protocol No. 14 that these important powers vest in the Court does not conceal the fact that they are dependent on a request by the Committee of Ministers, that is, by the States Parties. If the same powers to interpret the Court’s judgments and determine that the respondent State had not complied with them were not conferred on the Court when the initiative belonged to the injured party, not only would the injured party be placed in a position of inferiority with regard to the respondent Government, but, worse still, the respondent State could “block” the effects of the Court’s judgments at the level of the Committee of Ministers, the Court being powerless to oppose any political “blockage” during the execution phase. The qualified majority of two thirds of the Governments’ representatives entitled to sit on the Committee required to launch interpretation and infringement proceedings, the limited factfinding and data-collection powers of the Committee, namely, the lack of on-site visits, hearings of witnesses and other means of assessing the real effects of norms enacted and measures taken, and especially the imbalance between the injured party’s and the Government’s position

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in the execution proceedings before the Committee, aggravate this risk. In fact, the injured party does not have formal standing in the execution proceedings before the Committee of Ministers, although it can address communications to the Committee. Any case may be examined under the enhanced supervision procedure upon the request of a State Party or the Secretariat, but not of the injured party. The injured party may not express his or her views on general measures. In addition, in a referral to the Court for interpretation of a judgment the Committee of Ministers reflects “in particular” the views of the State Party concerned, but not those of the injured party. In infringement proceedings, the Committee of Ministers’ referral decision to the Court reflects only the views of the State Party concerned, not those of the injured party. The one-sidedness of these legal avenues reveals an imbalance between the respondent State Party and the injured party, which weakens the intrinsic fairness of these proceedings. In the event of failure of the aforementioned supervisory mechanism of the Committee of Ministers, the injured party’s only effective legal avenue by which to address an incorrect interpretation of or non-compliance with a Court’s judgment remains access to the Court itself. 20. The foregoing arguments, once assembled, lead to the following conclusive assertion: the Court has joint competence with the Committee of Ministers to supervise the execution of its own judgments, and the exercise of the Court’s competence prevails over a contrary decision of the Committee of Ministers. Faced with some regrettable cases of clear non-compliance with its judgments, the Court has affirmed its power to censure such non-compliance. It could not have done otherwise. This was the only way to protect the Court’s authority and the Convention’s legal force. The danger of denial of the authority of the Court’s judgments and the concomitant deprivation of the legal force of the Convention were wisely avoided by the enlightening judgment in the case of Verein gegen Tierfabriken Schweiz (VgT) v. Switzerland (no.2). The cornerstone of the Grand Chamber’s judgment was the Court’s assumption of its inherent (implied) competence to examine the domestic authorities’ conduct after the first Verein gegen Tierfabriken judgment, with the crucial argument that “[u]f the Court were unable to examine it, it would escape all scrutiny under the Convention”. Thus, the rationale of Verein gegen Tierfabriken Schweiz (VgT) (no.2) covers not only the actions of national authorities that conflict with the Court’s judgment, but a fortiori also omissions by national authorities where they are required by a judgment of the Court to take measures to terminate a violation of the Convention.

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The importance of this position is further enhanced by the fact that the Court did not refrain from contradicting the Committee of Ministers’ Resolution ResDH(2003)125 terminating its supervision of the execution of the first Verein gegen Tierfabriken judgment. 21. With a firm statement of the Court’s power to oversee the infringement of Article 46 of the Convention, Emre v. Switzerland (no.2) applied the crowning touch to that approach. The respondent State had expelled the applicant for an indeterminate period of time, which the Court found disproportionate. The Federal Court maintained the expulsion order, but reduced the period to ten years. The question put by the Court in paragraph 68 of Emre (no. 2)—namely, whether by reducing the period of the applicant’s expulsion to ten years the Federal Court had complied with the conclusions and spirit of the Court’s previous judgment of 2008— signals the intention of the Court to treat the second complaint as true infringement proceedings. In the crystal-clear and decisive wording of paragraph 75, the Court censured the respondent State’s conduct after the first Emre judgment. Furthermore, the Court affirmed in straightforward terms what would have been the “most natural execution” of the first Emre judgment: nullification with “immediate effect” of the impugned measure of expulsion from the national territory. In this context, the finding of a violation of Article 46 was a logically necessary consequence of the reasoning. 22. In sum, the Court not only assists the execution process in a number of ways, for example by itself providing guidance as to the proper execution measures, it also bears the ultimate responsibility for the long-term effectiveness of the entire system of protection of human rights in Europe by overseeing the compliance of the execution process with Article 46. These powers can be exercised in respect of an applicant’s complaint if and when the Committee of Ministers’ supervision cannot ensure full compliance with the Court’s judgment by the respondent State. If the Court is not bound by a decision of the Committee to close the execution proceedings, a fortiori it is not estopped on grounds of lis pendens from examining the issue of execution of judgments.

chapter 9

The African Court on Human and People’s Rights and its Position in the International and African Judicial Architectures* José Pina-Delgado i

Africa and the Rights Protection Controversy

In many ways Africa (as in the other continents) has a problematic, paradoxi­ cal and peculiar relation with human rights both from a foundational and practical perspective.1 Classical human rights (life; physical integrity; freedom, privacy, property) and, above all, the idea that they are “trumps” against the State (or any Public Power),2 the Community or the Nation, were seen, by many, as strange to African culture,3 justifying the development of a system which, at least initially, integrated a more communitarian perspective4 with

* I thank Professors Dário Moura Vicente and Manuel de Almeida Ribeiro for the opportunity given to test some of these ideas at the Conference, as well as Justice Cabral Barreto (echr), Professor Rainer Hoffman (Frankfurt) and all commentators of the presentation. This article covers developments up to December 2014. This article was written before my election as Associate Justice of the Constitutional Court of the Republic of Cape Verde and doesn’t reflect the view of that judicial institution or of that State. 1 The different approaches and the tensions that underline this relation are represented in C Heyns & K Stefyszin (eds), Human Rights, Peace, and Justice in Africa: A Reader (Pretoria, pulp, 2006), passim, and in the general handbooks, collective works and monographies on Human Rights in Africa namely F Viljoen, International Human Rights Law in Africa 2 ed. (Oxford, oup, 2012); A Dosl & J Diescho (eds), Human Rights in Africa: Legal Perspective on their Protection and Promotion (Whindoek, Konrad Adenauer Foundation, 2009). 2 See R Dworkin, “Rights as Trumps”, in J Waldron (ed), Theories of Rights (Oxford, oup, 1984), 153–167. 3 For a recent, and largely personal, critique of basic foundational perspectives on universal rights, M Mutua, Human Rights. A Political and Cultural Critique (Philadelphia, University of Pennsylvania Press, 2002). 4 A comparative presentation is provided by DA Masolo, “Western and African Communitarianism: A Comparison”, in K Wiredu (ed), A Companion to African Philosophy (Malden, Mass, Blackwell, 2004), 483–498.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_010

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‘peoples rights’5 and ‘individual duties’,6 and more protective in the sense that it also targets social rights7 and vulnerable persons (children, women and the elderly);8 to use expressions dear to contemporary political philosophers, rejecting “individualistic”, “atomistic” or “liberal” visions of it.9 But that does not represent the entire picture, though it is a rather expected reaction if one bears in mind that the promotion of a phony universalism, when particular values of one’s own culture are presented as so abstract and general to the point that reasonable particular traditions are deemed to be wrong, underde­ veloped and uncivilized, or when one establishes models of democracy and rule of law that besides its core structure goes on providing for exclusivist answers to all of their dimensions. To most African societies community is important, but no one could say that is not also relevant in many Western societies. However, it does not necessarily result, far from it, in emptying the individual will,10 but drives him towards car­ ing for his neighbor.11 And the important question to ask is whether the human 5

6 7 8

9

10

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See the ‘African Charter on Human and Peoples’ Rights’, in C Heyns & M Killander (eds.), Compendium for Key Human Rights Instruments of the African Union (Pretoria, pulp, 2013), 29–40, arts. 19–24, and for an early assessment of this normative category, J Crawford (ed), The Rights of Peoples (Oxford, Clarendon, 1988). The use of this concept at the African System is discussed by C Baldwin & C Morel, “Group Rights”, in M Evans & R Murray (eds), The African Charter on Peoples’ Rights. The System in Practice 1986–2006, 2 ed (Cambridge, cup, 2008), at 244–288. African Charter on Human and Peoples’ Rights, chap. ii, arts. 27–29. Ibid., arts. 15–17. Ibid., art. 18 (3) and (4); Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa; African Charter on the Rights and Welfare of the Child in C Heyns & M Killander (eds.), supra at 5, at 62–72; 77–89. The reading of C Taylor, “Atomism”, in Philosophy and Human Sciences. Philosophical Papers (Cambridge, cup, 1985), v. ii, 187–210, is an asset, because it provides for a critique of what they consider a liberal facet. DA Masolo, “Western and African Communitarianism: A Comparison”, supra at 4, at 495–496 (“The critique of liberal individualism latent in African communitarianism is, therefore, not a rejection of the value of individuality; rather, it merely envisages an alter­ native way of pursuing it in the human community. As a matter of fact, the criticisms of individualism in the African texts noted above compare well with MacIntyre’s (1984), Taylor’s (1989), and Kekes’ (1997) critiques of the Western liberal idea of autonomy as a failure and an escape from having to address the prevalence of evil”). Though favoring, in a prescriptive way, a liberal development to my own society, I cannot disagree with the saying of Masolo on this matter: “I believe that communitarianism has its benefits as well as its burdens on individuals; and that these, if properly considered, are not as oppressive of the individual as is often believed. But they can be misunderstood or even

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person, in Africa, is so inexpressive to the point that they cannot be deemed to have interests different to or outside their community, which points to the real­ ity of a tension between individual and group that structurally is not different from other continents, and that rights, democracy and the protection of indi­ vidual interests can matter in Africa.12 Moreover, the tragic aspect of the whole story is that by trying to fight Western influence in African legal systems or pre­ sent a system authentically African, both different from the Universal and the European and American ones,13 critics fail to perceive that plenty of character­ istics that proudly are defended as truly African are no more than colonial creations,14 were supported by neocolonial projects15 and, to quote a famous Africanist expression, represented historically, a “black man’s burden”.16

12 13

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15 16

abused, just as the liberties of the individual under liberalism have sometimes been. I believe that because it calls for mutual and reciprocal responsibility from everyone, com­ munitarianism is based on an ineluctable fact of human life: that to exist as an individual within a social space is to differ, to be different. But communitarianism goes further in involving the idea that being inscribed in a social space requires of everyone to realize that they cannot live in society and be indifferent. The ethics of participatory difference requires of everyone a responsibility toward those with whom they share a social space. Everyone is called upon to make a difference by contributing to the creation of the humane conditions which, at least, conduce to the reduction of unhappiness and suffering” (Ibid., p. 496). See T Maluwa, ‘Contextualizing Democracy and Human Rights in Africa’, in International Law in Post-Colonial Africa (The Hague/Boston/London, Kluwer, 1999), at 121–147. For the comparison, C Heyns; W Strasser & D Padilla, “A schematic comparison of regional human rights systems” (2003), 3 ahrlj, 76; C Heyns; D Padilla & L Zwaak, “A schematic comparison of regional human rights systems: an update” (2005), 5 ahrlj, 308. For this assertion, M Mandani, Citizen and Subject. Contemporary Africa and the Legacy of Late Colonialism (Princeton, Princeton University Press, 1996), attributing non-demo­ cratic proclivities to authoritarian colonial policies of indirect rule, and, even more vehemently, D Mungazi, The Mind of Black Africa (Westport, Conn/London, Praeger, 1996) at 202–203 (“among these traditions [held by African societies] was the observance of democratic principles. European colonial governments’ argument that Africans did not practice democracy is completely erroneous. It was the colonial system that left the legacy of dictatorial behavior that the African leaders used as role models following the end of colonialism. The second error is that the leaders of the newly independent coun­ tries of Africa also adopted the methods that the colonial governments used in dealing with the people. As was the case during the colonial period, the leaders of the indepen­ dent countries of Africa sought political office to maximize personal gain, not to serve the needs of their people”). A Andereggen, France’s Relationship with Subsaharan Africa (Westport, Conn, Praeger, 1994). See B Davidson, The Black Man’s Burden. Africa and the Curse of the Nation-State in Africa (London, James Currey, 1992), passim.

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Often, the invocation of those traditions and the appeal to mystified collective entities (family, state, community) were mere instruments to give a free pass to rulers to treat as they wished the supposed citizens of African states and to accept as inevitable gross human rights violations and internal oppression of certain categories of persons by virtue of their gender, religion and ethnicity, and so on.17 Perhaps the acknowledgement of this evidence is a reason that helps explain the adjustments made in this regard with the last African human rights treaties, especially in the field of members of vulnerable groups—as women and children—protection.18 And the fact is that the African Human Rights System, established under the African Charter of Human and Peoples’ Rights,19 at least normatively, repre­ sents developments unseen in Europe20 and in the Americas,21 which pre­ ceded it, radical examples of this being the power of the Regional—the African Union—and Sub-Regional Organizations—namely the Economic Community of West African States and, in the paper, the Central African Community—to intervene militarily in situations of genocide, crimes against humanity or war

17 18

19 20

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Which many African philosophers classify as a betrayal of African values (see D Mungazi, The Mind of Black Africa, supra at 14, passim). With these human rights treaties the tension between protection of cultural practices and safeguard of individual rights is abstractly balanced in favor of the latter. For exam­ ple, under the African Charter on the Rights and Welfare of the Child’, supra at 8, Article 1 (3), “Any custom, tradition, cultural or religious practice that is inconsistent with the rights, duties and obligations contained in the present Charter shall to the extent of such inconsistency be discouraged” and under the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa’, supra at 8, Article 2 (b), “(…) to enact and effectively implement appropriate legislative or regulatory measures, including those prohibiting and curbing all forms of discrimination particularly those harmful practices which endanger the health and general well-being of women”, completed by article 5, under which “States parties shall prohibit and condemn all forms of harmful practices which negatively affect the human rights of women and which are contrary to recognised international standards”. In general, UO Umozurike, The African Charter on Human and Peoples’ Rights (Dordrecht, Martinus Nijhoff, 1997) at 29–61. See DJ Harris; M O’Boyle; EP Bates & CM Buckley, Harris, O’Boyle & Warbrick Law of the European Convention on Human Rights 3. ed. (Oxford, oup, 2014), and A Mowbray, Cases, Materials, and Commentary on the European Convention on Human Rights 3.ed. (Oxford, oup, 2012). For an overview, JM Pasqualucci, The Practice and Procedure of the Inter-American Court of Human Rights (Cambridge, cup, 2013).

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crimes22,23, or the early drafting of a regional system with an expanded con­ cept of refugee24 and, more recently, including a scheme to protect internally displaced persons.25 The understanding that a system of regional protection of rights requires the use of courts and litigation is not one that automatically fits all African cultures26 22

23

24

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Constitutive Act of the African Union [11 July 2000], Article 4 (h) reproduced by C Heyns & M Killander (eds.), supra at 5, at 4–12. For comments, e.g., B Kioko, ‘The right of inter­ vention under the African Union’s Constitutive Act: From non-interference to non-inter­ vention’ (2003), 85 International Review of the Red Cross, 807; D Kuwali, ‘The end of humanitarian intervention: Evaluation of the African Union’s right of intervention’ (2009), 9 African Journal of Conflict Resolution, 41; id., The Responsibility to Protect: Implementing of Article 4(h) Intervention (The Hague, Martinus Nijhoff, 2010); GA Aneme, A Study of the African Union’s Right of Intervention against Genocide, Crimes against Humanity and War Crimes (Nijmegen, Wolf, 2011); A Yusuf, “The Right of Forcible Intervention in Certain Conflicts”, in AA-Q Yusuf & F Ouguergouz (eds), The African Union: Legal and Institutional Framework. A Manual on the Pan African Organization (Leiden, Martinus Nijhoff, 2012), at 335–353, D Kuwali & F Viljoen, Africa and the Responsibility to Protect: Article 4(h) of the African Union Constitutive Act (Oxford, Routledge, 2014). Protocol Relating to the Mechanism for Conflict Prevention, Management, Resolution, PeaceKeeping and Security [Lomé, 10 December 1999] (Abuja, ecowas Executive Secretariat, 1999), Article 25, and a presentation in J Kabia, Humanitarian Intervention and Conflict Resolution in West Africa. From ecomog to ecomil (Aldershot, Ashgate, 2009). oau Convention Governing the Specific Aspects of Refugee Problems in Africa, in Christof Heyns & Magnus Killander (eds.), supra at 5, Article 1. For a recent comment G Bekker, “The protection of asylum seekers and refugees within the African regional human rights system” (2013), 13 ahrlj, 1. See text in C Heyns & M Killander (eds.), supra at 5, 143–154, and a comment in F ZorziGiustiniani, ‘New Hopes and Challenges for the Protection of idps in Africa: The Kampala Convention for the Protection and Assistance of Internal Displaced Persons in Africa’ (2011), 32 Denver Journal of International Law & Policy, 347. See, for instance, KM Clarke, Fictions of Justice. The International Criminal Court and the Challenge of Legal Pluralism in Sub-Saharan Africa (Cambridge, cup, 2009). It is also curi­ ous that in the first case taken to the African Court, the petitioner, Michelot Yogogambe, contrasted a judicial solution with an African solution, marked by “reconciliation through dialogue, truth and reparations”, in his remarks (Michelot Yogogombaye v. Senegal (Application n. 1/2008), Judgement of 15 December 2009, para. 22), and asked the court to “order the Republic and State of Chad and the Republic and State of Senegal to establish a national ‘Truth, Justice, Reparations, and Reconciliation’ Commission for Chad, on the South Africa model derived from the philosophical concept of Ubuntu for all the crimes committed in Chad from 1962 and 2008, and so doing resolving in African manner the problematic case of the former Chadian Head of State, Hissein Habrè”. Due to jurisdic­ tional problems the Court declined to deal with the merits, but the fact was that a judicial

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or, at least, the (rather) romantic and thick version of them.27 As a result, it is defended that non-judicial means to solve those same disputes,28 would be pref­ erable to African countries and peoples, some would say in defense of the nonsuitability of Western institutions to the African continent. Judicial settlement was not used in a systematic manner in Africa, though one cannot really suggest that this was due to cultural incompatibility.29 In any case, the fact is that judicial settlement is increasingly acceptable, though one would not list it as one of the major African contributions to the development of international law.30 In spite of bearing in mind, intuitively, that there is no such a thing as an African Morality (and not a European or Latin American one),31 because the continent is as plural as one can get, with its multiethnic states, an Arabic/Maghrebian part, former settler societies and creole creations,32 if one understands international or regional systems of rights protection as constructed over thinner conceptions of

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remedy was seek to counter judiciary criminal procedings, is an aspect that has some degree of irony. We use the concept coined by M Walzer, Thick and Thin. Moral Argument at Home and Abroad (Notre Dame, University of Notre Dame Press, 1994) passim. E.g., see the articles in ME O’Connell (ed), International Dispute Settlement (Dartmouth, Ashgate, 2003), passim, and JG Merrils, International Dispute Settlement 4. ed. (Cambridge, cup, 2005). Some of the evaluations of the (mal) functioning of African organizations and of dispute settlement in Africa avoided this connexion, attributing it to other, more political, factors (see J-M Bipoun-Woum, Le Droit International Africain: problèmes généraix—reglement des conflicts, Paris, lgdj, 1970); E Jouve, L’Organisation de l’Unité Africaine (Paris, puf, 1984); PF Gonidec, L’OUA trente ans aprés (Paris, Khartala, 1993)). As UO Umozurike, The African Charter on Human and Peoples’ Rights, supra at 19, 93, synthetizes, “traditional reconciliatory, diplomatic and recommendatory methods are preferred. African tradi­ tional dispute settlement places a premium on the improvement of relations between the parties more on the basis of equity, good conscience and fair play rather than on strict legality. It is however doubtful whether traditional reconciliatory methods can be a sub­ stitute for modern judicial settlement”. For this expression, see the renowned Nigerian jurist, TO Elias, Africa and the Development of International Law (Dordrecht, Martinus Nijhoff, 1988). Cf. BJ Van der Walt, “Morality on Africa: Yesterday and Today. The Reason for the Contemporary Crisis” (2003), 37 In Die Skriflig, 51. Though rather outdated, the important article by MG Smith, “Pluralism, Race, and Ethnicity in Selected African Countries”, in J Rex & P Mason (eds), Theories of Race and Ethnic Relations (Cambridge, cup, 2006), at 187–225, presents a vision of this racial, ethnic and cultural pluralism, and, even a proponent of African Morality as T Metz, “Towards an African Moral Theory” (2007), 15 Journal of Political Philosophy, 321, has to take that into account when presenting his theory by excluding “Islamic Arabs in North Africa and white Afrikaners in South Africa, among others”.

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morality that every culture can accept,33 it has some explanatory role in this mat­ ter in the sense that it highlights a constant tension between traditional concep­ tions of administration of justice and the material creation of Courts as means to pragmatically deliver it.34 Despite having all this in mind, the aim of this paper is limited to the pur­ pose of presenting an overview of the position of the African Court on Human and Peoples’ Rights in the framework of the International and the African Regional judiciary. There are plenty of tribunals, courts and jurisdictions in Africa, but we will only deal with those that have human rights protection mandates. ii

The African Judicial System of Rights Protection

Africa was a late-comer to the world of international judicial settlement of dis­ putes. For this reason, one of the endeavours aimed at mapping the interna­ tional judiciary in the early nineties was completely silent on Africa35 and attention was no better in the following decades.36 Fair enough. There was not much to tell. But, the picture changed dramatically37 making it an important object of the study of international courts.38 In the last fifteen years the region is witnessing a proliferation of courts and bodies,39 which, to a large extent, cover human rights litigation and in this sense overlap. They can be permanent 33 34

35 36

37 38 39

M Walzer, supra at 27, passim (using the expression a thin universalistic morality). For example, the study of J Widner, Building the Rule of Law: Francis Nyalali and the Road to Judicial Independence in Africa (New York, Norton, 2011), and the review essays of M Dudziak, “Who Care About Courts? Creating a Constituency for Judicial Independence in Africa” (2003), 101 Michigan Law Review, 1622, and HK Prempeh, “African judges, in their own cause: Reconstituting independent courts in contemporary Africa” (2006), 4 International Journal of Constitutional Law, 592. See M Janis (ed), International Courts for the Twenty-First Century (Dordrecht: Martinus Nijhoff, 1992). With a very limited reference in C Romano, “International Organizations and the International Judicial Process: An Overview”, in LB de Chazournes; C Romano & R Mackenzie (eds), International Organizations and International Dispute Settlement. Trends and Prospects (Ardsley, ny, Transnational Publishers, 2002) 3–36 at 32–33 (con­ cerning advisory jurisdictions of some regional courts). F Viljoen, supra at 1, at 419–420. K Alter, The New Terrain of International Law. Courts, Politics, Rights (Princeton, pup, 2014). The expression used by KM Clarke, supra at 26, at 94–96, “the tribunalization”, fits also the situation described in this article.

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specialized regional bodies, permanent sub-regional courts, international courts with jurisdiction over African countries, ad hoc judiciary institutions and national courts. 2.1 The Permanent Regional Bodies At the regional level, some bodies were created specifically to monitor the implementation of the African Charter: the African Commission on Human and Peoples’ Rights; the African Court on Human and Peoples’ Rights and the human rights section of the African Union Court of Justice and Human Rights, and a Committee set up to oversee the application of the African Charter on the Rights and Well-Being of the Child. The Commission40 is a quasi-judicial body composed of 11 commissioners,41 which receives communications from State Parties42 or even individuals and ngos regarding rights43 protected by the African Charter on Human and Peoples’ Rights. Even if, in hindsight,44 it would be unfair to consider the Commission a failure because, at least, it has provided for a periodical forum to discuss human rights problems in Africa and, in the last decades, managed to interpret the Charter in order to give some meaning to its rights and procedures,45 its achievements were not much higher because it has had legal and material limitations due to continuous problems of lack of funding and working conditions, poor legal support, part-time commissioners, in some 40

41 42 43 44

45

Which is mentioned by the African Charter on Human and Peoples’ Rights, Articles 30–63, in C Heyns & M Killander (eds.), supra at 5; for an excelent overview of the work of the Commission see articles in M Evans & R Murray (eds), supra at 5, passim, and the early assessment of E Ankumah, The African Commission on Human and Peoples’ Rights. Practice and Perspectives (The Hague, Martinus Nijhoff, 1996). African Charter on Human and Peoples’ Rights, Article 31. Ibid., Articles 47–54. Ibid., Articles 55–59. See also R Murray, “The African Charter on Human and Peoples’ Rights 1987–2000: An overview of its Progress and Problems” (2001), 1 ahrlj, 1, the well balanced, CA Odinkalu, “The role of cases and complaints in the reform of the African Human Rights System” (2001), 2 ahrlj, 225, and especially the contrast provided by F Viljoen, supra 1, 414–420. Besides being the result of concrete application of the Charter to specific situations, the interpretative function is one of the main achievements of the Commission, creating an important body of understandings about the African Charter ready to be used by the judicial institutions created to protect rights in Africa, is explicitly established by the African Charter, Article 45 (3), under which The Commission can “Interpret all the provi­ sions of the present Charter at the request of a state party, an institution of the Organization of African Unity or an African organisation recognized by the Organization of African Unity”.

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cases closely connected with their own governments, that gather twice a year for fifteen-day meetings, and with the additional problem of managing confi­ dentiality. Those are a group of reasons that explain why the Commission did not meet all the expectations of Africans and was not able to stand with effec­ tiveness in the protection of human rights in the region, justifying the intro­ duction of a judiciary organ in the system. Therefore, the African Court on Human and Peoples’ Rights46 was created in Ouagadougou, Burkina Faso, in 1998,47 to complement the Commission,48 in the context of major changes in the regional human rights framework.49 The structure of the African Court does not solve all the problems that were identi­ fied in the Commission’s experience, though, contrary to the Commission, it has the power to deliver binding decisions50 by independent judges51 and adopts clearly a principle of publicity.52 The fact is that the Protocol to the African Charter establishing the Court was slow to attract the necessary ratifi­ cations to enter into force and, in the meantime, the African Union’s judiciary 46

47

48

49

50

51 52

For the context and main facts surrounding its creation, A O’Shea, “A Human Rights Court in an African Context” (2000), 26 Commonwealth Law Bulletin, 1313; F Ouguergouz, “The Establishment of an African Court of Human and Peoples’ Rights: A Judicial Premiere for the African Union” (2003), 11 Afr. Y. B. of Int’l L, 79; D Juma, “Lost (or Found) in Transition? The Anatomy of the New African Court of Justice and Human Rights” (2009), 13 Max Planck ybunl, 267. By the ‘Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights’, in C Heyns & M Killander (eds.), supra at 5, at 41–47. Under the Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra 47, Article 2, “The Court shall, (…), complement the protective mandate of the African Commission on Human and Peoples’ Rights (…)”. See AM Mangu, “The Changing Human Rights Landscape in Africa: Organisation of the African Unity, African Union, New Partnership for African Development and the African Court” (2005), 23 Netherlands Quarterly of Human Rights, 379. Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 30 (“The state parties to the present Protocol undertake to comply with the judgment in any case to which they are parties within the time stipulated by the Court and to guarantee its execution”). Under Article 17 (1), “The independence of the judges shall be fully ensured in accordance with international law”. Accordingly to the Protocol, Article 28 (5) “The judgment of the Court shall be read in open court, due notice having been given to the parties”. For the importance of this solu­ tion, M Killander, “Confidentiality versus publicity: Interpreting article 59 of the African Charter on Human and Peoples’ Rights” (2006), 6 ahrlj, 572.

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organ, the African Court of Justice,53 with a mandate to be a communitarian court, with powers to interpret the Act and other Union legal instruments, and to be a dispute settlement body between member states,54 was created. Arguments of budgetary order and rationalization of costs, propelled the Regional Organization and African States to approve a Protocol, not yet in force, to merge the two institutions,55 establishing the African Court of Justice and Human Rights,56 a tribunal divided in two sections, a general one regard­ ing African Union Law and dispute settlement between States, and the other concerned specifically with human rights,57 with a correspondent increase in the number of judges to sixteen58 and a revision of its competence and juris­ diction to cover all those three domains.59 The effect of this specific develop­ ment is raising some concerns, namely related to a possible subordination of the rights function to communitarian or international law controversies between states or between them and au organs,60 but it is perhaps too soon to have a final position on this matter. It is also possible that having rights pro­ tected by the Court that inherits the title that belonged to the African Court of Justice of “principal judiciary organ of the African Union”61 will have a central­ ity that will facilitate its mission. Notwithstanding, even before the new Court starts operating, an amendment to the Protocol aiming at introducing a third 53

The African Court of Justice was already the original judicial organ of the African Union as established by its ‘Constitutive Act of the African Union’, supra at 22, Article 5, but the Protocol was approved only in 2003, entering into force in 2009 (text and information on state parties available in the official homepage of the African Union, http://www.au.int/ en/sites/default/files/PROTOCOL_COURT_OF_JUSTICE_OF_THE_AFRICAN_UNION. pdf Protocol of the Court of Justice of the African Union’, consulted on the 11 of December 2014). 54 See Ibid., Article 19, on competence and jurisdiction. 55 See I Kane & A Motala, “The Creation of a New African Court of Justice and Human Rights”, in M Evans & R Murray (eds), supra at 5, at 406–440; J Biggon & M Killander, “Human Rights Developments in the African Union during 2008” (2009), 9 ahrlj, 295, at 306–307. 56 Protocol on the Statute of the African Court of Justice and Human Rights, in C Heyns & M Killander (eds.), supra at 5, at 47–71. 57 Ibid., Article 19. 58 Ibid., Article 3. 59 Ibid., Article 28, which is, in general, the result of the jurisdiction of the two courts that were merged. 60 See G Bekker, “The African Court on Human and Peoples’ Rights: Safeguarding the Interests of African States” (2007), 51 African Law Journal, 151. 61 Protocol of the Court of Justice of the African Union, supra at 53, Article 2 (2), though with a small rephrasing to “main judicial organ”.

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section, a criminal one, with jurisdiction over international and African crimes, with correspondent grounds for jurisdiction, was recently approved.62 2.2 The Sub-Regional Courts The African judiciary system is completed by sub-regional Courts, some of which have jurisdiction over the same matter as the African Court of Human and Peoples’ Rights. There is no sub-regional system of rights protection in Africa totally independent of the regional one, but there are in place regional norms, mechanisms and bodies that can be used to protect rights and one of the regions—East Africa—approved a bill of rights recently.63 Though special­ ized courts or quasi-judicial human rights sub-regional mechanisms do not exist at this stage, some sub-regional community courts, such as the ecowas Court of Justice,64 which, through a supplementary protocol65 to its Statute, established its human rights jurisdiction,66 and granted access to individuals,67 the East African Court of Justice68 and, before suspension and suppression of 62

63 64

65 66

67 68

Protocol on Amendments to the Protocol on the Statute of the African Court of Justice and Human Rights, Adopted by the 23rd Ordinary Session of the Assembly, Malabo, Equatorial Guinea, 27th June 2014, available at http://www.au.int/en/content/protocolamendments-protocol-statute-african-court-justice-and-human-rights, accessed on 14 December. See documents in S Ebobrah & A Tanoh (eds), Compendium of African Sub-Regional Human Rights Documents (Pretoria, pulp, 2010), passim. For general presentations, S Ebobrah, “A rights-protection goldmine or a waiting volcanic eruption? Competence of, and access to, the human rights jurisdiction of the ecowas Community Court of Justice” (2007), 7 ahrlj, 307; MT Ladan, Introduction to Ecowas Community Law and Practice. Integration, Migration, Human Rights, Access to Justice, Peace and Security (Zaria, Ahmadu Bello University Press, 2009), chap. V, and the analysis of K Alter; L Helfer & J McAllister, “A New International Human Rights Court for West Africa: the ecowas Community Court of Justice” (2013), 107 ajil, 737. Supplementary Protocol Amending the Protocol relating to the Community Court of Justice, in Solomon Ebobrah & Armand Tanoh (eds), supra at 63, at 199–202. Ibid., Article 3 (changing Article 9), according to which “The Court has jurisdiction to determine case[s] of violation of human rights that occur in any Member State”, which adds to the competence over communitarian law issues that impact on human rights as free movement of persons, economic liberties or protection of property. Ibid., Article 4 (inserting a new Article 10), opening access to “individuals on applications for relief for violations of their human rights (…)”. See East African Community Treaty (as amended) in S Ebobrah & A Tanoh (eds), supra at 63, 37–57, especially chap. 8. See, e.g., James Gathii, “Mission Creep or a Search for Relevance. The East African Court of Justice’s Human Rights Strategy” (2013), 24 Duke Journal of Comparative & International Law, 249.

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human rights jurisdiction, the sadc Tribunal,69 which was tragically doomed by an human rights decision (Campbell and Others v. Zimbabwe70), have/had, in different degrees, direct jurisdiction to address human rights related cases or indirectly when related to free movement of persons and other economic liberties71 or when the matter falls under the power to interpret communitar­ ian legal instruments. 2.3 Ad-Hoc Criminal Courts In addition to those permanent institutions, a comprehensive presentation of the African Judicial System would have to include international or interna­ tionalized ad hoc Courts or Chambers like the International Criminal Tribunal for Rwanda,72 established by the un Security Council under its Chapter vii of the Charter powers73 and that seats at Arusha, Tanzania,74 with the specific 69 70

71

72

73

74

See Protocol on Tribunal and Rules of Procedure thereof in S Ebobrah & A Tanoh (eds), supra at 63, at 375–399. Mike Campbell (Pvt) Ltd and Others v. Republic of Zimbabwe [November 18, 2008], Reproduced in 48 International Legal Materials 530, at 530–548 (with an introductory note by Ben Chigara) ruling that Zimbabwe violated the rights of petitioners by expropri­ ating their property with discriminatory reasons and without paying proper compensa­ tion. For aditional comments, A Moyo, “Defending human rights and the rule of law by the sadc Tribunal: Campbell and Beyond” (2009), 9 ahrlj, 590; F Cowell, “The Death of the Southern African Development Community Tribunal’s Human Rights Juridiction” (2013), 13 Human Rights Law Review, 1. For further discussion, LN Murungi and J Gallinetti, “The Role of Sub-Regional Courts in the African Human Rights System” (2010), 7 Sur. International Journal of Human Rights, 118; S Ebobrah, “Application of the African Charter by African Sub-Regional Organisations: Gains, Pains and the Future” (2012), 16 Law, Democracy and Development, 49, and for recent developments, id, “Human rights developments in African sub-regional economic communities during 2012” (2013), 13 ahrlj, 178. S/RES/955 (1994), 8 November 1994, para. 1 (deciding (…) to “establish an international tribunal for the sole purpose of prosecuting persons responsible for genocide and other serious violations of international humanitarian law committed in the territory of Rwanda and Rwandan citizens responsible for genocide and other such violations com­ mitted in the territory of neighboring States, between 1 January 1994 and 31 December 1994” and adopting its Statute (in an annex)). For an evaluation, Erik Møse, “Main Achievements of the icrt” (2005), 3 jicj, 920. un Charter [26 June 1945], chap. vii (an official version can be found at the United nations homepage: https://treaties.un.org/doc/publication/ctc/uncharter.pdf, accessed 15 November 2014). S/RES/977 (1995), 22 February 1995, available at the United Nations Documents homepage: http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N95/050/66/PDF/N9505066.pdf ? OpenElement, accessed 15 December 2014 (establishing the seat of the Court at Arusha).

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mission and jurisdiction to judge crimes committed during the Rwandan Genocide,75 a court whose functions are scheduled to end in 2015 when it hears its last appeal;76 the Special Court for Sierra Leone,77 created by a Treaty between the United Nations and the Sierra-Leonean government78 in order to persecute certain crimes committed during the civil conflict that raged in that West African country,79 with its extensions to the Hague in order to prosecute Charles Taylor in a stable environment80 and to the Court after life (The Residual Special Tribunal for Sierra Leone81), and, finally, the African Extraordinary Chamber, established by a legally binding agreement between the African Union and Senegal aimed to deal with Hissené Habré’s case82 and human rights violations in Chad under his dictatorship in the eighties of the last century.83 75

E.g., G Prunier, The Rwanda Crisis: History of a Genocide (New York, Columbia University Press, 1996), and P Gourevitch, We Wish to Inform You That Tomorrow We Will be Killed With Our Families: Stories from Rwanda (New York, Picador, 1998). 76 The Report on the Completion Strategy of the International Criminal Tribunal for Rwanda as at 5 November 2014, S/2014/829, 19 November 2014, passim, points that the only signifi­ cant case remaining is the appeal of the Butare Case. 77 See CC Jalloh (ed), The Sierra Leone Special Court and its Legacy: The Impact for Africa and International Criminal Law (Cambridge, cup, 2013). 78 Agreement Between the United Nations and the Government of Sierra Leone on the Establishment of a Special Court for Sierra Leone [16 January 2002], in United Nations Treaty Series, New York, United Nations, 2004, v. 2178, at I 38342. 79 Primarily “To prosecute persons who bear responsibility for serious violations of interna­ tional humanitarian law and Sierra Leonean Law committed in the territory of Sierra Leone since 30 November 1996” (Ibid., Article 1; Statute of the Special Court for Sierra Leone, in Ibid., at 145–153). 80 Headquarters Agreement between the Kingdom of the Netherlands and the Special Court for Sierra Leone [The Hague, 19 June 2006; Freetown, 19 June 2006], in United Nations Treaty Series, New York, United Nations, 2007, v. 2419, at I 43648. 81 Agreement between the United Nations and the Government of Sierra Leone on the Establishment of a Residual Special Tribunal for Sierra Leone, in United Nations Treaty Series, I 50125, 2007, mutatis mutandis, with the same purposes of finishing business. 82 See infra. 83 Under the Statute of the Extraordinary African Chambers, Article 1 (“The purpose of this Statute is to implement the decision of the African Union concerning the Republic of Senegal’s prosecution of international crimes committed in Chad between 7 June 1982 and 1 December 1990, in accordance with Senegal’s international commitments”) (English unof­ ficial translation available at http://www.hrw.org/print/news/2013/09/02/statute-extraordi­ nary-african-chambers, accessed 11 December 2014). For a general presentation, A Bodley & SK Tefera, “The Extraordinary Role of the Extraordinary African Chambers Convened to Try the Former Chadian Leader Hissène Habré” (2013), 3 African Law Today, 1.

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2.4 International Tribunals with Jurisdiction over African Countries Furthermore, one has to include in the system the jurisdictional reach of insti­ tutions like the International Court of Justice,84 a partial overlap, namely because the icj only grants locus standi to States and never to individuals, and the more controversial International Criminal Court,85 over a significant num­ ber of African countries,86 which, by the way, is still to a large extent, for differ­ ent reasons, a kind of African Criminal Court, ruled from abroad or perceived as such in the Continent.87 The feud existing between the icc and some African States had the immediate effect of attracting proposals that will lead to a focus on the idea of African institutions for African problems of which the insistence on an African criminal system to prosecute persons for gross human rights violations is a good example.88 84

85 86

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See Statute of the International Court of Justice, available at the United Nations home­ page: https://treaties.un.org/doc/publication/ctc/uncharter.pdf, accessed 15 December 2014. Rome Statute of the International Criminal Court [17 July 1998], in United Nations Treaty Series, New York, United Nations, 2004, v. 2187. By the end of 2014, a considerable number of African countries—namely 34—had already consented to its jurisdiction by becoming parties to the Rome Statute (see the list on the homepage of the icc: http://www.icc-cpi.int/en_menus/asp/states%20parties/african% 20states/Pages/african%20states.aspx, accessed in 15 December 2014). See, for different angles of the problem, CS Igwe, “The iccs Favourite Customer: Africa and International Criminal Law” (2008), 41 Comparative and International Law Journal of South Africa, 294; D Tadli, “The African Union and the International Criminal Court: The Battle for the Soul of International Law”, (2009), 34 sayil, 57; C Geevers & M du Plessis, “Another Stormy Year for the International Criminal Court and for its Work in Africa” (2010), 35 sayil, 163; CC Jallow, “Africa and the International Criminal Court: Collision Course or Cooperation?” (2012), 34 North Carolina Central Law Review, 203; R Cole, “Africa’s Relationship with the International Criminal Court: More Political than Legal” (2013), 14 Melbourne Journal of International Law, 1; G Naldi & K Maglivers, “The Ever Difficult Simbiosis of Africa with the International Criminal Court” (2013), 66, Revue Helenique de Droit International, 59; G Werle; L Fenandez & M Vornbaum (eds), Africa and the International Criminal Court (The Hague, t.m.c. Asser Press, 2014). See Protocol on Amendment to the Protocol on the Statute of the African Court of Justice and Human Rights, supra at 62, Article 14: “The International Criminal Law sec­ tion will have jurisdiction to try persons for the following crimes: genocide; crimes against humanity; war crimes, crimes of unconstitutional change of government; piracy; terrorism; mercenaries; corruption; money laundering; trafficking in persons; trafficking in drugs; trafficking in hazardous wastes; illicit exploitation of natural resources and the crime of agression”. For background and comment, K Raus, “Jurisprudential Innovation or Accountability Avoidance? The International Criminal

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2.5 Domestic Courts At the national level, human rights are protected by a myriad of institutions, both judicial—ordinary courts of law, high and supreme courts; constitu­ tional courts89—,and non-judicial—national human rights commissions; ombudsman90—by means of a multiplicity of procedures. For obvious reasons also, the level of protection differs from State to State and depends most of all on the real implementation of democracy, rule of law and protection of basic rights in Africa, factors that are lacking in most of African States, even the ones that formally recognise that regime. Partial Conclusion To conclude this part, one can stress that the regional proliferation of courts and the regional inconsistency in creating a well-planned architecture of judi­ ciary institutions and bodies, adding unexpected new ones, extinguishing oth­ ers, and constantly putting pressure on them all does not generate a good environment for the judicial settlement of disputes and human rights litiga­ tion in the Continent, because the overlap of jurisdictions can create a danger of concurrence, general financial weakness and limited membership of African countries. For this matter, there is a point beyond which proliferation of courts91 can be deemed as negative as the excessive proliferation of rights.92 This is a risk that the Tribunal that was created to be the central organ in

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Court and Proposed Expansion of the African Court of Justice and Human Rights” (2012), 97 Minnesota Law Review, 669. A good overview is provided by H K Prempeh, “Marbury in Africa: Judicial Review and the Challenges of Constitutionalism in Africa” (2006), 80 Tulane Law Review, 1; AK Abebe & CM Fombad, “The Advisory Jurisdiction of Constitutional Courts in Sub-Saharan Africa” (2013), 46 George Washington International Law Review, 54, and in articles inserted in M Killander (ed), International Law and Domestic Human Rights Litigation in Africa (Pretoria, pulp, 2010). See R Murray, The Role of Human Rights Institutions at the International and Regional Levels: The Experience of Africa (Oxford, Hart, 2007); C Maina Peters, “Human Rights Commissions in Africa—Lessons and Challenges”, in A Dosl & J Diescho (eds), supra at 1, at 348–374, and the special number of 1 The International Ombudsman Yearbook (1997), Special Number: Strengthening the Ombudsman Office in Africa. See, for all, Benedict Kingsbury, “Foreword: Is the Proliferation of International Courts and Tribunals a Systemic Problem?” (1999), 31 New York University Journal of International Law & Politics, 679. See Carl Wellman, The Proliferation of Rights. Moral Progress or Empty Rethoric? (Boulder, Westview Press, 1999).

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human rights in the region, the African Court on Human and Peoples’ Rights, is facing at this moment. The African Court of Human and Peoples’ Rights in the Books and in Action: An Overview 3.1 Taking Cases to and Requesting Advisory Opinions of the Court Taking cases to the Court93 depends on Articles 3 and 5 of the Protocol and Rules of Court Number 26 and 33, all related to jurisdictional matters,94 which establish a material jurisdiction over human rights recognised by the African Charter or by a human rights instrument ratified by a State concerned or on a procedural question under those treaties or the Protocol,95 and grants locus iii

93 See also F Viljoen, “Communications under the African Charter: Procedure and Admissibility”, in M Evans & R Murray (eds), supra at 5, 76–138 at 129–136, and M Killander & A Abebe, “Human Rights Developments in the African Union during 2010 and 2011” (2012), 12 ahrlj, 199, at 214–216; M Killander & B Nkrumah, “Human Rights Developments in the African Union during 2012 and 2013” (2014), 14 ahrlj, 275, at 288–291, for general presentations of the case law. 94 For an overview of the main issues confronting the jurisdiction of international courts, C Amerasinghe (ed.), Jurisdiction of Specific International Tribunals (Leiden, Martinus Nijhoff, 2009). 95 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 3 (2) (“The jurisdiction of the Court shall extend to all cases and disputes submitted to it concerning the interpre­ tation and application of the Charter, this Protocol and any other relevant human rights instrument ratified by the states concerned”). In David Francis Omary and Others vs. Tanzania (Application n. 1/2012), achpr, 28 March 2014, para. 69–77, the Court consid­ ered that even if the applicant mentions an instrument that doesn’t bind the respondent State, if the same rights have a place in the Charter or in other applicable Human Rights Treaty that does, the Court has competence rationa materiae: “The Court (…) rules that reference by the applicants to the Declaration to allege a violation has no effect on juris­ diction as long as the alleged violation is also provided for by a treaty ratified by the State concerned”. This rejection of a formalist approach was confirmed in Peter Joseph Chacha v. Tanzania (Application n. 3/2012), achpr, Ruling of 24 March 2014, para. 113, moment when the Court stressed, in response of Tanzania’s defence team contention that the applicant has only based his case in the Tanzanian Constitution, a kind of province of national courts, “where only national law or constitution has been cited and relied upon in the application, the Court will look for corresponding articles in the Charter or any other human rights instrument, and base its decision thereon”.

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standi96 to State-Parties:97 (a) that lodged a complaint at the Commission; (b) against which a complaint has been lodged at the Commission and, (c) whose citizen is a victim of a human rights violation;98 the African Commission,99 and African Inter-Governmental Organizations.100 Finally, under Article 5 (3), the Court could entitle relevant NonGovernmental Organizations with observer status before the Commission and 96

Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 5; for comments, RW Eno, “The Jurisdiction of the African Charter on Human and Peoples’ Rights” (2002), 2 ahrlj, 223; D Juma, “Access to the African Court on Human and Peoples’ Rights: A Case of the Poacher Turned Gamekeeper” (2007), 4 Essex Human Rights Review, 1. 97 At first glance, in this case, personal jurisdictional conditions are easier to meet, because the Court only needs to check if the State against which the application is submitted has bound itself to the Protocol (African Commission on Human and Peoples’ Rights v. Libya (Application n° 2/2013), achpr, Order of Provisional Measures of 15 March 2013, para 12), but its not clear whether a signatory of the Charter that has not bound itself to the Protocol can submit a case against a State-Party of the Protocol. No State-Party has started procedures under the African Charter in the African Court, which, is rather nor­ mal, even in other systems, because, for diplomatic, corporative and political reasons States are generally reluctant to use international courts to protect individuals, even their own nationals. As Walter Kälin & Jörg Künzli, The Law of International Human Rights Protection (Oxford, oup, 2009), at 234–235, puts it “in practice interstate complaints are hardly used. There has not been a single instance of a state filling a complaint of this kind at the universal level, and only Europe and in one case Africa have experienced such proceedings at the regional level.” 98 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra 47, Article 5 (b); (c) and (d). 99 The African Commission on Human and Peoples’ Rights has used its power to submit cases only three times: (1) African Commission on Human and Peoples’ Rights v. Libya (Application n. 4/2011), on gross and systematic violations of human rights in Libya, but the case was dropped when the Ghadaffi regime fell (Order of 15 March 2013); (2) African Commission on Human and Peoples’ Rights v. Libya (Application n° 2/2013, still pending), aiming at executing a decision on the adoption of provisional measures in favour of Saif Ghaddaffi submitted to indefinite and incommunicado detention without formal charge and consequently in a situation of risk to his physical integrity and life, and, finally; (3) African Commission on Human and Peoples’ Rights v. Kenya (Application 6/2013, still pend­ ing), on the safeguard of cultural rights of a minority from legislative and administrative measures with potential impact on its livelihood. 100 See also the Request for Advisory Opinion by the African Committee of Experts on the Rights and Welfare of the Child before the African Court on Human and Peoples’ Rights, Request n. 2/2013, Advisory Opinion of 14 December 2014, considering that the requesting entity qualified didn’t qualify as an “African Intergovernmental Organization”.

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individuals to have direct access,101 if, in accordance with Article 34 (6), the State under whose jurisdiction the violation occurs has made the declaration accepting the competence of the Court to receive cases related to it.102 Though it is unclear whether the Protocol establishes a right of ngos with observer status103 and individuals to access the Court directly (“The Court may entitle (…)”), the Rules have to be interpreted in the sense that such possibility was effectively granted, because under Rule 33 “Pursuant to (…) the Protocol, the following are entitled to submit cases to the Court: (…) f. An individual or a Non-Governmental Organization (…)”.104 Eventually, in order to pass temporal jurisdiction requirements and subsidiary application of the general treaty regime embodied in the Vienna Convention of 1969, the violation has to occur after the Protocol entered into force to a signatory state and in the case of individual and ngo applications after the declaration of acceptance of jurisdiction.105 101 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 5 (3). 102 Accordingly, “At the time of the ratification of this Protocol or any time thereafter, the state shall make a declaration accepting the competence of the court to receive petitions under article 5(3) of this Protocol. The Court shall not receive any petition under article 5 (3) involving a state party which has not made such a declaration” (Ibid., Article 34 (6)). 103 For this specific matter, N Mbelle, “The Role of Non-Governmental Organisations and National Human Rights Institutions at the African Commission”, in: M Evans & R Murray (eds), supra at 5, at 289–315. 104 Rules of Court, ACHPR [Arusha, 2 June 2010], http://www.africancourt.org/pt/images/ documents/Court/Interim%20Rules%20of%20Court/Final_Rules_of_Court_for _Publication_after_Harmonization_-_Final__English_7_sept_1_.pdf, accessed 15 December 2014, Article 33 (“1. Pursuant to the provisions of articles 5 and 34 (6) of the Protocol, the following entities are entitled to submit cases to the Court: a. The Commission; b. The State Party which has lodged an application to the Commission; c. The State Party against which an application has been lodged at the Commission; d. The State Party whose citizen is a victim of a human rights violation; e. An African Intergovernmental Organization; f. An individual or a Non-Governmental Organization which has observer status before the Commission provided the requirements of article 34(6) of the Protocol are met”). 105 This question was discussed in David Francis Omary and Others vs. Tanzania (Application n. 1/2012), supra at 95 para. 81–84,with a dissenting opinion on this matter by Judge Ouguergouz. In one of the cases, Beneficiaries of the Late Norbert Zongo et al. v. Burkina Faso (Application n. 13/2011), achpr, Order of 21 June 2013, the Court claimed jurisdiction over another violation, but declined to hear an alegation of violation of right to life, because it occurred in 1998, before the declaration and the entering into force of the Protocol.

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The main condition established by the Protocol to grant direct access to individuals, the declaration, was challenged in Femi Falana v. the Africa Union (2011)106 and in Atabong Denis Atemberg v. The African Union (2011)107 on grounds of violation of the Charter’s rights of access to justice, in the form of the right to a fair hearing, principle of non-discrimination and invalidity of the protocol’s norm in regards to that instrument, but the Court after deciding that it did not have jurisdiction, naturally made no comments on its merits. Notwithstanding, three of the justices (Akuffo, Ngoepe and Thompson), con­ sidering that the Court had jurisdiction to hear the case and judge on its own competence in what regards the validity of an article establishing jurisdiction,108 found that the precept was null and void for being inconsistent with a hierar­ chically superior norm.109 At the first opportunity, they stressed that the Court, lacking competence of constitutional review, could not strike down the con­ ventional act,110 but on the second, not necessarily speaking as a Court, that they had no “hesitation on declaring Article 34 (6) null and void”.111 In practice, the reasons for declining to review most of ngo or individ­ ual submissions were procedural, either jurisdictional or related to admis­ sibility. In some cases jurisdiction was not established because it was clear that the Court did not have jurisdiction over a State that did not make the 106 Femi Falana v. The African Union (Application n. 1/2011), achpr, Decision of 26 June 2012. 107 Atabong Denis Atemberg v. The African Union (Application n. 14/2011), achpr, Decision of 15 March 2013. 108 “One cannot disqualify the Applicant from approaching the Court by invoking the very article the validity of which the Applicant is seeking to challenge (Femi Falana v. African Union (Application n. 1/2011), supra at 95, Dissenting Opinion of Judges Sophia Akuffo; Bernard Ngoepe and Elsie Thompson, para 13). 109 For these justices, as “the Charter ranks higher than the Protocol”, “the Protocol is subser­ vient to the Charter”. Therefore, “to the extent that Article denies individual direct access to the Court, which access the Charter does not deny, the Article far from being a supple­ ment measure towards the enhancement of the protection of human rights, as envisaged by Article 66 of the Charter, does the very opposite. It is at odds with the objective, lan­ guage and spirit of the Charter as it disables the Court from hearing applications brought by individuals against a state which has not made the declaration, even when the protec­ tion of human rights entrenched in the Charter, is at stake. We (…) hold that it is inconsis­ tent with the Charter” (Ibid., para 14–16). 110 “We find no provision in the Protocol empowering the Court to declare null and void and/ or to set aside Article of the Protocol” (Ibid., para 7). 111 Atabong Denis Atemberg v. The African Union (Application n. 14/2011), supra 107, Dissenting Opinion of Judges Sophia Akuffo; Bernard Ngoepe and Elsie Thompson, at 5.

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declaration of Article 34 (6)112 or was not a part of the Protocol or even of the African Union,113 or that the applicant ngo had not obtained observer status in the African Commission.114 In others it understood that not all violations of rights amounted to human rights violations that could trig­ ger its protective mandate, and consequently establish its material juris­ diction.115 Finally, in two cases jurisdiction was not established because the Court considered that a non-State entity—such as the African Union or its organs—cannot appear at the Court as respondents,116 in spite of

112 In Michelot Yogogombaye v. Senegal (Application n. 1/2008), supra at 26, para 34, the first case to be heard by the Court (for additional comments, J Biggon & M Killander, “Human Rights Developments in the African Union during 2009” (2010), 10 ahrlj, 212, at 227–228) it was decided that “direct access to the Court by an individual is subject to the deposit by the respondent State of a special declaration authorizing such a case to be brought before the Court”, an orientation followed in Sofiane Ababou v. Algeria (Application n. 2/2011), achpr, Decision of 16 June of 2011; Daniel and Mulugeta Amare v. Mozambique and Mozambique Airlines (Application n. 5/2011), achpr, Decision of 27 September 2011; Ekollo Mondi Alexandre v. Republic of Cameroon and Federal Republic of Nigeria (Application n. 8/2011), achpr, Decision of 23 September 2011; National Convention of Teachers Trade Union v. Gabon (Application n. 12/2011), achpr, Decision of 15 December 2011; Delta International Investments S.A., Mr and Mrs A.G.L. De Lange v. South Africa (Application n. 2/2012), achpr, Decision of 13 March 2012; Emmanuel Joseph Uko and Others v. South Africa (Application n. 4/2012), achpr, Decision of 13 March 2012; Amir Adam Timan v. Sudan (Application n. 5/2012), achpr, Decision of 13 March 2012; Baghdadi Ali Mahmoudi v. Tunisia (Application n. 7/2012), achpr, Decision of 26 June 2012. 113 Youssef Ababou v. Kingdom of Morocco (Application n. 7/2011), achpr, Decision of 2 September 2011. 114 In Association Juristes Africains pour la Bonne Gouvernance v. Côte d’Ivoire (Application n. 6/2011), achpr, Decision of 16 June 2011, jurisdiction was not established because the ngo that filed the application hadn’t an observer status in the African Commission of Human and Peoples’ Rights. 115 In Ernst Francis Mtingwi v. Malawi (Application n. 1/2013), achpr, Decision of 15 March 2013, the Court decided that it couldn’t function as an appeal instance of internal courts for pure domestic labour disputes that didn’t violate human rights, declining jurisdiction in the matter (para 13–16). In Efoua Mbozo Samuel v. Pan African Parliament (Application n. 010/2011), achpr, Decision of 30 September 2011, the Court, with the dissenting opinion of Judge Ouguergouz, suggested that a labour dispute between the African Union and an employee, could not trigger its material jurisdiction. 116 Efoua Mbozo Samuel v. Pan African Parliament (Application n. 10/2011), achpr, Decision of 30 September 2011; Atabong Denis Atemberg v. The African Union (Application n. 14/2011), supra 107, passim.

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Article 34(6) not mentioning it.117 The main doubt that was raised in this matter was related to the necessity of a judicial dismissal of such applica­ tion or if an administrative rejection by the Registar was enough as one of the judges kept on insisting in his dissenting opinions.118 Regardless of this, perhaps all those jurisdictional setbacks had a positive pedagogical effect because the cases submitted by ngos or individuals that are pend­ ing at the Court’s list are all applications against States that made Article 34 (6) declarations. In what regards admissibility, most of the cases were deemed unacceptable for exhaustion of local remedies related reasons.119 By a rather slim margin, the Court decided that local remedies were not exhausted in Mkandawire v. Malawi (2013).120 Unanimously it was also the result of Omary and Others v. Tanzania (2014),121 and, in another narrow difference, of 6 to 4, it was the result of Peter Joseph Chacha’s complaint against Tanzania (2014).122 In this last case, the rift was caused by a process with a Kafkian face123 with abuse of police powers to

117 As mentioned in Femi Falana v. African Union (Application n. 001/2011), supra at 106, para. 63, “the fact that a non-state entity like the African Union is not required by Article 34 (6) of the Protocol to make the declaration does not necessarily give the Court jurisdiction to accept applications brought by individuals against such entity; there may be other grounds on which the Court may find that it has no jurisdiction. In the present instance, what is specifically envisaged by the Protocol and by Article 34 (6) in particular is pre­ cisely the situation where applications from individuals and ngos are brought against State Parties”. 118 Namely the Algerian Justice, Mr. Ouguergouz, since Michelot Yogogombaye v. Senegal (Application n.001/2008), supra at 26, para 2. 119 On admissibility and exhaustion of local remedies, the classical study of AA Cançado Trindade, The Application of the Rule of Exhaustion of Local Remedies in International Law (Cambridge, cup, 1983), chap. I, and, specifically S Ebobrah, “The Admissibility of Cases under the African Court of Human and Peoples’ Rights” (2009), 3 Malawi Law Journal, 87, and, for a related discussion, H Onoria, “The African Commission on Human and Peoples’ Rights and the Exhaustion of Local Remedies in the African Charter” (2003), 3 ahrlj, 1, and F Viljoen, “Communications under the African Charter: Procedure and Admissibility”, supra at 93, at 92–128, that presents the experience of the Commission on the interpreta­ tion of Article 56 of the Charter. 120 Mkandawire v. Malawi (Application, n. 3/2011), achpr, Judgement of 21 June 2013. 121 David Francis Omary and Others vs. Tanzania (Application n. 1/2012), supra at 95, para. 88–138. 122 Peter Joseph Chacha v. Tanzania (Application n. 3/2012), supra 95, para. 159 (3). 123 In their Dissenting Opinion, Sophia Akuffo; Elsie Thompson and Ben Kioko (Ibid., para. 63), intentionally or not, emphasized the continuous “metamorphosing” of the charges.

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investigate124 and an excessive pre-trial detention period.125 The elements, cer­ tainly, justified another outcome as proposed by the minority of judges, which, at least, took the nature of the right presumably violated into account.126 The power to decide materially a case depends on its admissibility under Articles 56 of the Charter and 6 (2) of the Protocol and of Rule 40,127 which conditions applications to disclosure of the identity of the Applicant (even though he is allowed to request for anonimity);128 compliance with the Constitutive Act of 124 Ibid., Dissenting Opinion of Sophia Akuffo; Elsie Thompson and Ben Kioko, para. 12 (“it is clear that he was caught in a vicious cycle of attempting to find resolution to his com­ plaints and finding himself thwarted at practically every turn by procedural technicalities that effectively had nothing to do with the substance of his complaints were either found premature, not properly made or incompetent. The complaints were also intrinsically tied to ever-changing and hardly moving criminal charges the Applicant was facing, (…)”). 125 We quote the same dissenting opinion stressing that “freedom of the person is sacrosanct, and in our view, any act on the part of the State which curtails such freedom must fulfill the requirements of the Charter, in both word and spirit. Where a person is incarcerated pending trial, justice requires that the trial be concluded in the optimal time to enable the person to know his or her fate, and more importantly, to prevent inordinately lengthy remand of a possibly innocent person; this is merely the concomitant of the presumption innocence” (Ibid., para. 76). 126 The other judicial magistrate that voted against the majority, Judge Ouguergouz, remem­ bered in his opinion that it “is a typical procedural right because it guarantees the effec­ tiveness of all substantive rights set out in the African Charter. It is the only human right whose effective respect will in turn determine the effective control of all other rights set out in the Charter” (Ibid., Dissenting Opinion of Judge Fatsah Ouguergouz, para 11). 127 According to this Rule, “(…) applications to the Court shall comply with the following conditions: 1. disclose the identity of the Applicant notwithstanding the latter’s request for anonymity; 2. comply with the Constitutive Act of the Union and the Charter; 3. not contain any disparaging or insulting language; 4. not be based exclusively on news dis­ seminated through the mass media; 5. be filed after exhausting local remedies, if any, unless it is obvious that this procedure is unduly prolonged; 6. be filed within a reasonable time from the date local remedies were exhausted or from the date set by the Court as being the commencement of the time limit within which it shall be seized with the mat­ ter; and 7. not raise any matter or issues previously settled by the parties in accordance with the principles of the Charter of the United Nations, the Constitutive Act of the African Union, the provisions of the Charter or of any legal instrument of the African Union” (Rules of Court, African Court on Human and Peoples’ Rights [Arusha, 2 June 2010], supra at 104, Rule 40). 128 In David Francis Omary and Others vs. Tanzania (Application n. 1/2012), supra at 95, para. 88–90, the Court decided that the fact that the name of the case was changed due to the forgo of one of the plaintiffs, responsible for the initial naming of the case (the Court in Ernest Karata and Others v. Tanzania (Application n. 1/2012), achpr, Ruling of 21

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the Union and the Charter; non-inclusion of any disparaging or insulting language;129 not to be exclusively based on news disseminated through the mass media;130 not to raise any matter or issues previously settled by the parties in accordance with the principles of the Charter of the United Nations, the Constitutive Act of the African Union, the provisions of the Charter or of any legal instrument of the African Union.131 The most important is, and arguably will be for a while, the requirement that an application can only be filled after exhaustion of existent local reme­ dies, if any, unless it is obvious that the procedure is unduly prolonged, and the presence of which the Court evaluates even if the respondent State does not raise the issue.132 The construction of the rule of exhaustion of local remedies September 2013), had already accepted the change of the name of the case, doesn’t imply in the violation of this requirement, and in Lohé Issa Konaté v. Burkina Faso (Application n. 4/2013), Judgement of 15 December 2014, para 46, discarded the contention by the respondent that the fact that the applicants use an incorrect name (People’s Democratic Republic of Burkina Faso) and not Republic of Burkina Faso would lead to the a denial in receiving the petition (“In the view of the Court, an error as such in the title of the Application, though related to the identity of the Applicant or the Respondent State, can­ not therefore be deemed to constitute a ground for the inadmissibility of the Application”). 129 In Lohé Issa Konaté v. Burkina Faso (Application n. 4/2013), supra at 128, para 64–73, the Court discussed a point raised by Burkina Faso that when the applicants used the already mentioned expression “People’s Democratic of Burkina Faso” (“(…) the Court should take note that this refers, in a devious and biased manner, to the former peoples democracies of Eastern Europe and to a sadly notorious People’s Republic in Asia over which everyone agrees that its main characteristics were or are dictatorship and massive violations of human rights. Therefore, to refer to Burkina Faso as “People’s Democratic Republic” in a case where it stands accused of violating freedom of the press and freedom of expression, cannot be deemed to be trivial or considered as a mere oversight, as the Applicant claims; it is indeed disparaging within the meaning of Rule 40 of the Rules and Article 56 of the Charter”) (para 65), but it decided that the respondents didn’t show that this was dispar­ aging or insulting language (para. 72). 130 Exclusive is read literally, meaning as in David Francis Omary and Others vs. Tanzania (Application n. 1/2012), supra at 95, para 95–97, that the application depends only of news disseminated by the mass media, with the requirement being fulfilled if it is based in testimonies. 131 In Mkandawire v. Malawi (Application, n. 3/2011), supra at 120, para 33, the Court decided that if an application submitted to another body was withdrawn, one “has a right to approach another forum”. 132 In Ibid., para 37, the Court used the argument that “the law does not have to be pleaded. Failure by the Respondent to raise the issue of non-compliance with the requirements stipulated in the Protocol and the Charter cannot render admissible an application which is otherwise inadmissible”, which is a point subject to discussion. If it is rather clear that

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by the Court is stressing the necessity that before submiting a case, the appli­ cants should explore all domestic judicial remedies133 available,134 namely appeals to all national higher courts.135 They have to be effectively tested in a case by case basis136 and no presumption of unsuitability based on prior pro­ cedural decisions and pre-judgments on the capacity to deliver justice,137 other personal feelings regarding these institutions138 and delays caused by inaction of the plaintiffs139 can be attributed to the State in order to take profit of the unreasonable delay caveat. Notwithstanding, if the Court notices an abnormal delay in the procedures, namely taking into account the time of each stage, admissibility is recognised.140 In reason of different treatment of public inter­ est ngo’s internally in what regards capacity or interest to be in court for human rights violations, the Court has already stressed that if remedies are inexistent for them it considers that they were exhausted.141 the Court, moto proprio, has the obligation to satisfy itself that it has jurisdiction, the same is not necessarily true in relation to rules of admissibility. 133 In Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (Joint Applications n. 9/2011 and 11/2011), achpr, Judgment of 14 June 2013, para 82, the Court stressed that political processes don’t have to be exhausted for the reason that “it is not an available, effective and sufficient remedy because it is not freely accessible to each and every individual; it is discretionary and may be abandoned any­ time; moreover, the outcome thereof depends on the will of the majority. No matter how democratic the parliamentary process will be, it cannot be equated to an independent judicial process for the vindication of the rights under the Charter”. 134 In Lohé Issa Konaté v. Burkina Faso (Application n. 4/2013), supra at 128, para 108–115, the Court adopted the position that even if a judicial remedy exists, but the applicant does not have procedural legitimacy or, if it does, it is unsuitable to its purposes, namely because it limits entities that have access to certain courts (in the case the Constitutional Council) or cannot be used to strike down a contested legislative act (in the case the Cour de Cassation), there is not an available resource in the terms of the Protocol. 135 Peter Joseph Chacha v. Tanzania (Application n. 3/2012), supra at 95, para. 141. 136 See Beneficiaries of the Late Norbert Zongo at al. v. Burkina Faso (Application n. 13/2011), achpr, Judgment of 28 March 2014, para. 92. 137 Peter Joseph Chacha v. Tanzania (Application n. 3/2012), supra at 95, para 152 (rejecting anticipation of a negative result as a justification for not exhausting local remedies). 138 Ibid., para. 145 (rejecting personal frustration as justification for not exhausting local remedies). 139 See David Francis Omary and Others vs.Tanzania (Application n. 1/2012), supra at 95, para. 133 (“the delay in the process has been occasioned by internal bickering among the claimants”). 140 Beneficiaries of the Late Norbert Zongo et al. v. Burkina Faso (Application n. 13/2011), supra at 136, para 105. 141 Ibid., para 107–111.

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The other condition, that the application be filled within a reasonable time from the date local remedies were exhausted was dealt with directly in the case Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania, but the Court considered that, attending particular circumstances, “a one year delay from the date of the judgment of the Court of Appeal until the applications were filed was not unreasonable long”.142 The possibility of requesting advisory opinions is mentioned by Article 4 of the Protocol143 and Part v of the Rules, establish­ ing that the Court can give them if (a) related to a legal matter; (b) concern­ ing the Charter or to any Human Rights Instrument, and (c) requested by the African Union or any of its Organs, a Member State, or an African Organization if recognized by the African Union. Besides that it has to state with precision the specific question on which the opinion is being sought and specify the provisions of the Charter or of any human rights instrument in respect of which the opinion is being requested, the circumstances giving rise to the request as well as the names and addresses of the representatives of the enti­ ties making it. The limit is that the matter in not pending before the Commission. In what concerns advisory opinions,144 procedural questions can be impedi­ tive too, though, most of times, for good reasons, at least from the legal point of view. In the request of Pan-African Lawyers Union and Southern African Litigation Centre,145 regarding a matter that was pending before the African Commission on the suspension of the sadc Tribunal by Member States it was clear the objective of having a kind of authentic interpretation146 to support 142 Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (Joint Applications n. 9/2011 and 11/2011), supra at 133, para 83. 143 According to this article, “1. At the request of a member state of the oau, the oau, any of its organs, or any African organisation recognised by the oau, the Court may pro­ vide an opinion on any legal matter relating to the Charter or any other relevant human rights instruments, provided that the subject matter of the opinion is not related to a matter being examined by the Commission. 2. The Court shall give reasons for its advisory opinions provided that every judge shall be entitled to deliver a sepa­ rate or dissenting opinion” (Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 4). 144 In general, AP van der Mei, “The Advisory Jurisdiction of the African Court on Human and Peoples’ Rights” (2005), 5 ahrlj, 27. 145 Request for Advisory Opinion by Pan-African Lawyers Union and Southern African Litigation Centre, n. 2/2012, achpr, Order of 15 March 2013. 146 See Hans Kelsen, Pure Theory of Law (Clark, nj, Law Exchange, 2009) 353–355.

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the application; to the Socio-Economic Rights and Accountability Project that tried to obtain a position on whether systematic and widespread poverty in Nigeria violated prohibition on discrimination, the answer was that the request didn’t comply with requirements established by article 68 (2) of the Rules, namely naming the circumstances giving rise to the request.147 The two advisory opinions that State-Parties requested the Court didn’t bear fruits either; in one of them, there was no proof that the person who signed the request, a French barrister, was acting on behalf of Libya,148 and in the other, Mali, that initially tried to obtain an interpretation on the legal status of ictr convicted persons that were serving in Malian prisons, formally gave up its solicitation.149 The only opinion of the Court so far followed from a request of the African Committee on the Rights and Welfare of Children regarding its own standing before the African Court.150 According to the judges the Committee has stand­ ing to request an advisory opinion as an organ of the African Union,151 but that it is not one of the entities that could submit a contentious case to the Court.152 Still pending is an interesting request by four Nigerian ngos, that seeks to obtain the position of the Court on the conflicting obligations to obey deci­ sions taken by competent organs of the African Union instructing African States not to cooperate with the icc to detain the President of Sudan, Al-Bashir, and the duties to cooperate established by the Rome Statute, and another request by an ngo of human rights protection.153 3.2 Decisions of the Court As other judicial institutions,154 the Court has power to: (a) decide on its own jurisdiction and on admissibility issues; (b) ex officio or responding to requests adopt provisional measures if certain conditions are met namely cumulative 147 Request for Advisory Opinion by Socio-Economic Rights and Accountability Project, achpr, Order 0f 15 March 2013. 148 Request for Advisory Opinion by Advocate Marcel Ceccaldi on Behalf of the Great Socialist Peoples Libyan Arab Jamahiriya, n. 2/2011, achpr, Order of 13 March 2012. 149 Request n. 1/2011, achpr, Order of 30 March 2012. 150 Request for Advisory Opinion by the African Committee of Experts on the Rights and Welfare of the Child before the African Court on Human and Peoples’ Rights, supra at 100, passim. 151 Ibid., para 100 (3) (i). 152 Ibid., para 100 (3) (ii). 153 Request n. 1/2014, 28/3/2014; Request n. 2/2014, 19/6/2014, available information in http://www.african-court.org/en/index.php/2012-03-04-06-06-00/advisory-opinion, last accessed 18 January 2015. 154 C Brown, A Common Law of International Adjudication (Oxford, oup, 2007).

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presence of a case of extreme gravity and urgency and necessity to avoid a irreparable harm to persons; (c) adopt other interim measures requested by the litigants or approved moto proprio; (d) judge on the merits of the matter; (e) adopt remedies in case of violation of rights, including payment of fair compensation or reparation; (f) interpret (for purposes of execution) and review its own decisions. As decisions on jurisdiction and admissibility and other measures were already commented, I will not address them in this part of the article. 3.2.1 Provisional Measures155 Under Article 27(2) of the Protocol156 and 51 (1) e (2) of the Rules,157 the adoption of provisional measures depend on the existence of a situation (a) of extreme gravity; (b) of urgency, and (c) that demands action to avoid irreparable harm. If these three conditions, cumulatively, are in place, and the Court satisfies itself that it has prima facie jurisdiction,158 it has to order provisional measures to protect the right, though remaining with discretion to choose the measure to apply as long as it is suitable for the concrete case.

155 See G Naldi, “Interim Measures of Protection in the African System for the Protection of Human and Peoples’ Rights” (2002), 2 AHRLJ, 2, and D Juma, “Provisional Measures under the African Human Rights System: the African Courts Order Against Libya” (2012), 30 Wisconsin Journal of International Law, 344. 156 “In cases of extreme gravity and urgency, and when necessary to avoid irreparable harm to persons, the Court shall adopt such provisional measures as it deems necessary” (Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, Article 27 (2)). 157 “1. Pursuant to article 27(2) of the Protocol, the Court may, at the request of a party, the Commission or on its own accord, prescribe to the parties any interim measure which it deems necessary to adopt in the interest of the parties or of justice. 2. In case of extreme urgency, the President may convene an extraordinary session of the Court to decide on measures to be taken. He/she may, in this regard, and by all reliable means, enlist the views of the Members not present” (Rules of Court, ACHPR [Arusha, 2 June 2010], supra at 104 Article 51 (1) and (2)). 158 See African Commission on Human and Peoples’ Rights v. Libya (Application 2/2013), achpr, Order of 15 March 2013, para 10, according to which “before ordering provisional measures, the Court need not satisfy itself that it has jurisdiction on the merits of the case, but simply needs to ensure that it has prima facie jurisdiction”. In Baghdadi Ali Mahmoudi v. Tunisia (Application n. 7/2012), supra at 112, the Court, without much argu­ ment, declined to order interim measures because there was no appearance of jurisdiction.

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Provisional measures were ordered in the case Commission v. Libya (2011),159 regarding gross and systematic violation of human rights in the context of the internal strife,160 even without a request of the applicant and being absent pleadings and hearings,161 and Commission v. Libya on behalf of Saif Ghadaffi (2013) in order to protect his life and personal integrity, right to freedom and security of the person from harm and access to lawyers and family.162 In another 2013 case, the African Commission on Human and Peoples’ Rights v. Kenya,163 the Court ordered that the Respondent restore limits imposed on land transactions of the protected group and other acts that could imperil the rights under litigation. It has also adopted provisional measures partially in Lohé Issa Konaté v. Burkina Faso (2013),164 a case recently decided on the mer­ its, because it refused to order the release pending judgement of a person pun­ ished under a contested criminal norm that restrained freedom of expression with the justification that if it granted the relief it would affect the consider­ ation of the substantive issue in discussion.165 The path taken by the majority was criticized by three justices166 and one of the rulings on the merits considered

159 For comments, J Oder, “The African Court on Human and Peoples’ Rights’ Order in Respect of the Situation in Libya: A Watershed in the Regional Protection of Human Rights?” (2011), 11 ahrlj, 495. 160 African Commission of Human and Peoples’ Rights v. Libya (Application n. 4/2011), achpr, Order of 25 March 2011, para 25 (1) and (2) (to refrain from any action that would result in loss of life or violation of physical integrity of persons and to report on measures taken). 161 Ibid., para 9–12. 162 African Commission on Human and Peoples’ Rights v. Libya (Application n. 2/2013), supra at 158, passim; for comments, R Cole, “The emerging jurisprudence of the African Court on Human and Peoples’ Rights - African Commission on Human and Peoples’ Rights v Great Socialist Peoples’ Libyan Arab Jamahiriya (order for provisional measures)” (2012), 14 University of Botswana Law Journal, 147. 163 African Commission on Human and Peoples’ Rights v. Kenya (Application 6/2013), achpr, Case Summary. 164 Lohé Issa Konaté v. Burkina Faso (Application n. 4/2013), achpr, Order of Provisional Measures, 4 of October 2013. 165 Ibid., para 23, granting only in the part of the request for access to medical aid, but not on provisional release pending trial. 166 “The granting of this leg of the request of provisional measure will in no way touch or preju­ dice the substantive application. If the application is refused the Applicant will simply be sent back to jail to complete his sentence.(…). Failure to grant this leg of the application will cause irreparable harm. Admittedly, every case has to be judged on its own merits, but gen­ erally it can be said that personal freedom cannot be compensated by monetary damages” (Ibid., Joint Dissenting Opinion by Justice Ramadhani, Tambala and Thompson, para 2–4).

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custodial sentence incompatible with Article 9 of the Charter and other legal instruments.167 3.2.2 Decisions on the Merits Only three cases have been decided on the merits by the Court. The first was Beneficiaries of the Late Norbert Zongo at al. v. Burkina Faso (2013),168 in which it considered that the State violated African Charter’s Article 7 obligations by not adopting sufficient, meaning executive, measures of investigation, criminal persecution and judgment to assure that one has to have his case heard and, rather polemically, that the omission of the State in punishing a murder com­ mitted against a journalist violates freedom of expression of all journalists.169 Perhaps the most controversial was Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (2013),170 the decision on internal organization of democratic procedures that would put on alert even well-minded African States, because it questioned the validity of amendments to the Constitution of a State made by a contituent power with legitimacy to do it. The last case to be decided on the merits was Lohé Issa Konaté v. Burkina Faso (2014), with the Court finding violations of freedom of expression and other freedoms related to journalist activities and freedom of the press. In a kind of African Sullivan,171 the judges understood that incrimina­ tion of defamation could illegally limit rights if used in disproportionate man­ ner to protect public authorities172 or to target ordinary speech173 as was the 167 Lohé Issa Konaté v. Burkina Faso (Application n. 4/2013), achpr, Judgement of 15 December 2015, para 164. 168 Beneficiaries of the Late Norbert Zongo at al. v. Burkina Faso (Application n. 13/2011), supra 136, para 156. 169 Ibid., para 187, with four votes against of Judges Niyungeko, Ouguergouz, Guisse and Aba, that considered that this effect, though possible, was far from evident in the present case (Common Dissenting Opinion, para 4–6). 170 Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (Joint Applications n. 9/2011 and 11/2011), supra at 133, passim; for back­ ground, A Makulilo, “Introductory note to the independent candidate case by the African Court of Human and Peoples’ Rights” (2013), 4 Open University Law Journal, 6. 171 K Hall & M Urofsky, New York Times v. Sullivan. Civil Rights, Libel Law, and the Free Press (Lawrence, University Press of Kansas, 2011). 172 Lohé Issa Konaté v. Burkina Faso (Application 4/2013), supra at 167, para 155 (“The Court is of the view that freedom of expression in a democratic society must be the subject of a lesser degree of interference when it occurs in the context of public debate relating to public figures”). 173 Ibid., para 165 (“Apart from serious and very exceptional circumstances for example, incitement to international crimes, public incitement to hatred, discrimination or vio­

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case of Burkina Faso’s laws.174 One can expect other merits decisions on the pending cases listed,175 but arguably some will fall in the preliminary phase and, if past behaviour and real circumstances are taken into account, the Libyan case has bleak chances of compliance. 3.2.3 Remedies According to Article 27 of the Protocol, “If the Court finds that there has been violation of a human or peoples’ right, it shall make appropriate orders to rem­ edy the violation, including the payment of fair compensation or reparation”.176 This, naturally, allows the Court to have a wide range of options when it comes to remedies. Firstly there is an overlap between the decision on the merits find­ ing a violation and remedy, because the former is also “a form of reparation”.177 As the measures are not typified, the remedies can be tailored accordingly with the nature of the case. In practice, the Court has already adopted different remedies and measures, namely ordering legislative (covering ordinary as well as fundamental laws) and administrative changes in a State legal order.178

174 175

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lence or threats against a person or a group of people, because of specific criteria such as race, colour, religion or nationality, the Court is of the view that the violations of laws on freedom of speech and the press cannot be sanctioned by custodial sentences, (…)”). Ibid., passim. African Commission on Human and Peoples’ Rights v. Kenya (Application n. 6/2012), achpr; African Commission on Human and Peoples’ Rights v. Libya (Application n. 2/2013), Rutabynga Crysanthe v. Rwanda (Application n. 3/2013), achpr, Case Summary, Alex Thomas v. United Republic of Tanzania (Application n. 5/2013), achpr, Case Summary; Onyango and Others v. Tanzania (Application n. 6/2013), Abubakari v. Tanzania (Application n. 7/2013), apdh v. Côte d’Ivoire (Application n. 1/2014), Uwintije v. Rwanda (Application n. 2/2014), Umuhoza v. Rwanda (Application n. 3/2014) (see Status of Applications received by the Court, available at http://www.african-court.org/en/index. php/2012-03-04-06-06-00/cases-status1, last visited 15 January 2015). Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 27. Peter Joseph Chacha v. Tanzania (Application n. 3/2012), Dissenting Opinion of Sophia Akuffo; Elsie Thompson and Ben Kioko, para. 82 (3), and Christopher Mtikila v. Tanzania (Application n. 011/2011), Ruling on Reparations of 13 June 2014, para 46 (1), holding that the decision recognising the violation constitutes per se a sufficient form of reparation for “non-pecuniary damages”. Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (Joint Applications n. 9/2011 and 11/2011), supra at 133, para 126 (3), Tanzania was “directed to take constitutional, legislative and all necessary measures within a reasonable time to remedy the violations found by the Court and to inform the Court of the measures taken”.

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The Court is opting, in general, to decide on compensation and reparation in a separate decision,179 resulting from an autonomous request by the aggrieved party,180 which is also permitted by the rules.181 In Rev. Christopher Mtikila v. Tanzania it took this path ruling on compensation after deciding on the merits of the case and of adopting other remedies,182 but, justifying that the applicant failed to present evidence of loss, didn’t recognise pecuniary, non-pecuniary damages or even legal costs in the concrete case.183 The problem was that Tanzania grabbed the opportunity and rebuffed the judgment of the Court reiterating that its laws didn’t allow independent candidates to run for office, despite the opinion of the court,184 and, consequently, used the same proce­ dure as a kind of appeal. 3.2.4 Interpretation and Revision of Decisions The Protocol allows the Court to “interpret its own decisions”,185 but Rule 66 restricts it to interpretation for the purposes of execution of a judgement.186 In Mkandawire v. Malawi,187 the judges received a request for interpretation of a group of questions. The majority seemed to adopt the view that questions other than those necessary for the execution of the judgement could be

179 Beneficiaries of the Late Norbert Zongo et al. v. Burkina Faso (Application n. 13/2011), supra at 105, para 203 (7). 180 Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania (Joint Applications n. 9/2011 and 11/2011), supra at 133, para. 125. 181 According to the Rules of Court, ACHPR [Arusha, 2 June 2010], supra at 104, Article 63, “The Court shall rule on the request for the reparation, submitted in accordance with Rule 34 (5) of these Rules, by the same decision establishing the violation of a human and peo­ ples’ right or, if the circumstances so require, by a separate decision”. 182 Christopher Mtikila v. Tanzania (Application n. 11/2011), achpr, Ruling of 14 June 2014, passim. 183 Ibid, para 46 (2) and (3). 184 Ibid, para 23, which raised concern and a response of the Court that made its concerns heard (para 43). 185 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, Article 28(4). 186 Rules of Court, ACHPR [Arusha, 2 June 2010], supra at 104, Article 66 (“Pursuant to arti­ cle 28(4) of the Protocol, any party may, for the purpose of executing a judgment, apply to the Court for interpretation of the judgment within twelve months from the date the judgment was delivered unless the Court, in the interest of justice, decides otherwise”). 187 Urban Mkandawire v. Malawi (Application n. 3/2011), achpr, Ruling of 28 March 2014.

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explained, but according to their discretion.188 In the same submission, Mkandawire filled for revision of the decision of the Court, which the Court can consider under article 28, according to which “(…), the Court may review its decision in the light of new evidence under conditions to be set out in the Rules of Procedure”.189 These provide that “a party may apply to the Court to review its judgment in the event of the discovery of evidence, which was not within the knowledge of the party at the time the judgment was delivered. Such application shall be filled within six (6) months after that party acquired knowledge of the evidence so discovered”.190 In the concrete case, the Court understood that the requirements were not fulfilled, because the applicant didn’t present new evidence.191 3.2.5 Compliance and Enforcement of Court Rulings192 The Court’s judgement are legally binding for the Parties,193 but in the case of non-compliance the best the Court can expect is that political organs of the African Union take the necessary measures in order to compel States to abide by the decision or expect it to result from pressure from other States, international organizations or from the civil society. Though in a different context the experi­ ence of other African human rights bodies, both regional and sub-regional, show that acceptance of jurisdiction does not necessarily translate in promptitude to execute negative decisions by international judicial institutions.194 The Libyan 188 Ibid., para 8 (arguing that it was necessary to avoid confusion). 189 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 28 (3). 190 Rules of Court, ACHPR [Arusha, 2 June 2010], supra at 104, Article 67. 191 Urban Mkandawire v. Malawi (Application n. 3/2011), supra at 187, para 14. 192 For an early assessment, JS Warioba, “Monitoring Compliance with and Enforcement of Binding Decisions of International Courts” (2001), 5 Max Planck YBUNL, 41, and for differ­ ent perspectives on the African Court, R Cole, “African Court on Human and Peoples’ Rights: will political stereotypes form an obstacle to the enforcement of its decisions?” (2010), 58 Comparative and International Law of South Africa, 24, CS Martorana, “The New African Union: Will it Promote Enforcement of the Decisions of the African Court on Human and Peoples’ Rights?” (2008), 40 The George Washington International Law Review, 583. 193 “The state parties to the present Protocol undertake to comply with the judgment in any case to which they are parties within the time stipulated by the Court and to guarantee its execution” (Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 30). 194 For example, F Viljoen & L Louw, “State Compliance with the Recommendations of the African Commission on Human and Peoples’Rights, 1993-2004” (2007), 4 International

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refusal to abide by the provisional measures ordered by the Court on behalf of Saif Ghadaffi195 and the insistence of Tanzania on its position, despite its prob­ able correcteness,196 is hardly a good start for the Court. Partial Conclusion The main question concerning the African Court on Human and Peoples’ Rights position is to determine if a more strict jurisdictional system would be suitable.197 And the answer has to be negative. At this stage, a step-by-step evo­ lution that takes into account states acceptability of external judicial account­ ability for ordinary human rights abuses, allowing them not to be submitted to the total control of the African Court if they are not ready, being realistic about it, seems to be the best way to attract their membership. It will not help if the Court starts embarking on the kind of forced activism or ill-advised judgment seen in one of the few opportunities that it had to decide a case on the merits (Tanganyka Law Society; Legal and Human Rights Center v. Tanzania and Rev. Christopher Mtikila v. Tanzania), when it did not take into account the necessary differences between the intensity of scrutiny required to protect passive political rights when compared to most civil rights and circumventing the required restraint,198 and deference,199 that, especially international courts,200 have to have to reasonable and democratic Journal of Civil Society Law, 22 (“our study suggests that the mere fact that the Court will provide legally binding and specific remedies and better formulated judgments will not in itself guarantee improved state compliance. The advent of the Court may coincide with a gradual hardening of human rights commitments and lead to improved human rights adherence, but it would then be on the strength of a stronger domestic and regional politi­ cal commitment, increased publicity, and greater involvement of civil society”) (at 50). 195 See the Activity Report of the African Court for the Year 2013, EX.CL/825 (xxiv), para 27–33. 196 Christopher Mtikila v. Tanzania (Application n. 011/2011), supra at 182. 197 See, e.g., the critic of D Juma, “Access to the African Court on Human and Peoples’ Rights: A Case of the Poacher Turned Gamekeeper” (2007), supra at 96, passim, to the regime inserted in the Protocol. 198 For all, M Tushnet, “Judicial Activism and Restraint in a Section  33 World” (2003), 53 University of Toronto Law Review, 89; P Lenta, “Self-Restraint and Jurisdictional Overreach” (2004), 20 South African Journal of Human Rights, 544. 199 In general, L Gruszczynski & W Werner, Deference in International Courts and Tribunals: standard of review and margin of appreciation (Oxford, oup, 2014). 200 See E McWhinney, “The International Court of Justice and International Law-Making: the Judicial Activism/Self-Restraint Antinomy” (2006), 5 Chinese Journal of International Law, 3; M Pinto, “National and International Courts—Deference or Disdain?” (2008), 30 Loyola of Los Angeles International & Comparative Law Review, 247.

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internal forms of a State political organization.201 It will be much better and acceptable by Members to reserve pro rights interpretations to cases involv­ ing the violation of basic civil rights of individuals, which it did not, for instance, in Chacha v. Tanzania. If the substitution envisaged by the Protocol that created the African Court of Justice and Human Rights materializes,202 the same situation will persist, because there will be no compulsory jurisdiction for African Union Members or African Charter of Human and Peoples’ Rights Parties. Therefore, it will only reach those states that bind themselves to the Protocol; and, in the case of ngos and individuals, locus standi in judicium, will be a reality only if the State accepts it, through an express declaration.203 The advantages of the new sys­ tem will be, compared with the current context, the nature of the Court, a quasi-Community Tribunal, with increased jurisdiction,204 and an expansion of entities205 that can access the Court with the addition of the Assembly and the Parliament of the African Union and other organs of the Union authorized by the Assembly,206 with the subsequent withdrawal of conditions for States’ to access the Court207 on any issue or dispute, and staff members of the Union on labour disputes.208 In human rights related matters, besides those entities, the African Committee of Experts on the Rights and Welfare of the Child, African Intergovernmental Organizations accredited to the Union and its organs and African National Human Rights Institutions were added to a list209 that still includes the African Commission,210 but that maintains the same pro­ vision regarding individual and ngo direct access. Furthermore, the number of entities that can request an advisory opinion was shortened to communitar­ ian entities, namely Assembly, the Parliament, the Executive Council, the 201 K Hopkins, “Effects of an African Court on the domestic legal orders of African States” (2002), 2 ahrlj, 234, warned against the paranoia of inadequate application of the Law by the Court, but, at this moment, even sympathetic States have legitimate cause of concern. 202 Protocol on the Statute of the African Court of Justice and Human Rights, supra at 57, Article 1 (Replacement of the 1998 and 2003 Protocols) and 2 (Establishment of a single Court). 203 Ibid., Article 8. 204 Statute of the African Court of Justice and Human Rights, supra at 56, Article 28. 205 Ibid., Article 29. 206 Ibid., Article 29 (b). 207 Ibid., Article 29 (“on any issue or dispute” “State Parties to the present Protocol”). 208 Ibid., Article 29 (c).This was remembered by the Court in Efoua Mbozo Samuel v. Pan African Parliament (Application n. 010/2011), supra at 115, para 6. 209 Ibid., Article 30. 210 Ibid., Article 30 (b).

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Peace and Security Council, the Economic, Social and Cultural Council, the Financial Institutions or any other organ of the Union authorized by the Assembly,211 with the suppression of the “African Organizations” recognized by the oau (au).212 The African Court of Human and Peoples’ Rights Position in the International and African Judicial Architectures The position of the African Court of Human and Peoples’ Rights is central in the continental judiciary architecture. It is one of the two main tribunals of the region with the African Court of Justice, still to be installed. In the context of the international judiciary system it is also an important court, especially because it was created to deal with rights in a region still confronted with gross violations.213 It had a slow start, yet this does not doom it per se. Comparatively, great accomplishers like the European Court of Human Rights and medium level ones such as the Inter-American system also had very inauspicious moments in their beginnings.214 Notwithstanding, it is in a very delicate position.215 Firstly, because formally it will, probably, be substituted by the African Court of Justice and Human iv

211 Ibid., Article 53. 212 Protocol to the African Charter on Human and Peoples’ Rights on the Establishment of an African Court on Human and Peoples’ Rights, supra at 47, Article 4. 213 In the Matter between the Government of the Republic of Zimbabwe and Louis Karel Flick; Richard Etheredge; William Michael Campbell; President of South Africa, cct 101/12 [2013] zacc, Judgement of 27 June 2013 (CJ Mogoeng), it is said that “[f]or the right or wrong reasons, or a combination of both, Africa has come to be known particularly by the west­ ern world as the dark continent, a continent which has little regard for human rights, the rule of law and good governance. Apparently driven by a strong desire to contribute posi­ tively to the renaissance of Africa, shed its southern region of this development-inhibiting negative image, coordinate and give impetus to regional development, Southern African States established the Southern African Development Community (sadc) with special emphasis on, among other things, the need to respect, protect and promote human rights, democracy and the rule of law” (para 1). 214 Respectively, E Bates, The Evolution of the European Convention on Human Rights. From its Inception to the Creation of a Permanent Court of Human Rights (Oxford, oup, 2010), and C Cerna, ‘The Inter-American Court of Human Rights’ in: Mark Janis (ed), supra at 35, at 117–158. 215 See also M du Plessis & L Stone, “A Court not Found?” (2007), 7 ahrlj, 522, to whom “It is a court staffed by judges who know that they are presiding over a tribunal that, if it comes to hear any cases at all, is moribund from the start, and which is beset by inherent prob­ lems such as article 34(6) of the Protocol establishing an African Court on Human and

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Rights. Secondly, it is exposed to different challenges if compared to the other regional human rights courts, because it has and will have, regardless of its concrete form, the concurrence of important and very active sub-regional courts,216 especially the ecowas Community Court of Justice, but also increas­ ingly of the East African Court of Justice. Even the suspended sadc Tribunal managed to have some impact on protection of rights, partially with the help of South African Courts.217 Moreover, other international courts and foreign jurisdiction are still con­ current to the African courts as is demonstrated, for instance and for different reasons, some inevitable, in Gaddafi,218 Gbagbo219 and even in Kiobel.220 And Peoples’ Rights. To be a judge of the African Court on Human and Peoples’ Rights is to sit in an uneasy twilight zone” (at 543). 216 For the main issues related to the general problem, Y Shany, The Competing Jurisdictions of International Courts and Tribunals (Oxford, oup, 2003). 217 See Government of the Republic of Zimbabwe v. Fick and Others (657/11) [2012] zasca 122, Judgment of 20 September 2012, and In the Matter between the Government of the Republic of Zimbabwe and Louis Karel Flick; Richard Etheredge; William Michael Campbell; President of South Africa, supra at 213, passim. For comments and prospective effects, see, e.g., M du Plessis & M Forere, “Enforcing the sadc Tribunals Decision in South Africa: Immunity” (2010), 35 sayil, 265, and E de Wet, “The Case of Government of the Republic of Zimbabwe v. Louis Karel Fick: A First Step Towards Developing a Doctrine of the Status of International Judgements within the Domestic Legal Order” (2014), 17 Potchefstroom Electronic Law Journal, 1. 218 The Prosecutor v. Saif Al-Islam Gaddafi, icc 01/11-01/11, available at the homepage http:// www.icc-cpi.int/en_menus/icc/situations%20and%20cases/situations/icc0111/ related%20cases/icc01110111/Pages/icc01110111.aspx, accessed 31 December 2014. 219 The Prosecutor v. Laurent Gbagbo, icc 02/11-01/11; The Prosecutor v. Simone Gbagbo, icc 02/11-01/12 (the two case are related to the situation of Côte d’Ivoire (available at iccs official homepage: http://www.icc-cpi.int/en_menus/icc/situations%20and%20cases/ situations/icc0211/Pages/situation%20index.aspx, accessed 31 December 2014)) and Simone Ehivet and Michel Gbagbo v. Côte d’Ivoire, ECW/CCJ/APP/18/11, Decision of 22 February 2013. Ms. Gbagbo is currently under trial in Abidjan for events associated to the post-electoral violence of 2011 (Ivory Coast Trial Opens Against Former First Lady Simone Gbagbo, Times Live, 26 December 2014, available at http://www.timeslive.co.za/ africa/2014/12/26/ivory-coast-trial-opens-against-former-first-lady-simone-gbagbo, accessed 31 December 2014). 220 See Kiobel, Individually and on Behalf of Her Late Husband Kiobel, et al. v. Royal Dutch Petroleum co. et al., U.S.Supreme Court, Decision of 17 April 2013 (CJ. Roberts). Though the Supreme Court’s decision was negative to the possibility of using in a widespread manner us courts to protect violations of rights in other parts of the World (“there is no indication that ats was passed to make the United States a unique hospitable forum for the enforcement of international norms” (p. 12)), emphasizing a presumption against extra-territoriality

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this danger is patent in Hissenè Habré, a case regarding the intention to try the former Chadian dictator for crimes against humanity and related both to the duty to prosecute and to accused persons guarantees,221 in which the ecowas Community Court222 and the International Court of Justice223 exchanged decisions, sometimes in contrary directions,224 with the African Court of

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(“We therefore conclude that the presumption against extraterritoriality applies to claims under the ats, and nothing in the statute rebuts that presumption” (p. 13)), four of the justices—Breyer, with Ginsburg, Sotomayor and Kagan joining –, curiously the liberals of the Roberts Court (see the recent L Tribe & J Matz, Uncertain Justice. The Roberts Court and the Constitution (New York, Henry Holt, 2014), as well as M Coyle, The Roberts Court. The Struggle for the Constitution (New York, Simon & Schuster, 2013) and J Tobin, The Oath. The Obama White House and the Supreme Court (New York, Doubleday, 2012)), joined the result, but rejected that presumption, namelly considering the use of the Alien Torts Act in order to reach gross human rights violators, because, in the expression of Justice Breyer, “today’s pirates include torturers and perpetrators of genocide” (at 5). See a very useful chronology in Human Rights Watch, Chronology of the Hissène Habré Case, available http://www.hrw.org/sites/default/files/related_material/Timeline%20 Habr%C3%A9%20case.pdf, accessed 17 January 2015. Seized by the former dictator lawyers on his behalf, the Court considered that constitu­ tional and legislative measures taken by Senegal to create normative conditions to submit Habré to a criminal trial would violate his human rights, ordering respect for previous definitive decisions of the Senegalese judiciary and to the “absolute principle of nonretroactivity”, though opening the possibility of a judgment according to an ad hoc proce­ dure of an international nature (Hissein Habrè v. Senegal, ECW/CCJ/APP/07/08, Decision of 18 November 2010, para. 61 Reproduced in Ecowas Law Report of 2010 (Abuja, ecowas, 2013)), at 71–93. Questions Concerning the Obligation to Prosecute or Extradite (Belgium v. Senegal), icj, Judgment of July 2012, para 122 (6), stressing “Senegal’s duty to comply with its obligations under the Convention cannot be affected by the decision of the ecowas Court of Justice”, and ordered, unanimously, Senegal to “without further delay, submit the case of Mr. Hissène Habré to its competent authorities for the purpose of prosecution, if it does not extradite him”. In practice, the icj circumvented the West African sub-regional court decision, which granted relief to the petitioner. A second submission by Habrè (Hissein v. Senegal, ECW/CCJ/APP/11/13, Decision of 5 November 2013) challenging the composition and procedural rules of the African Extraordinary Chambers, created to implement the decision to judge, and requesting the suspension of the proceedings, the ecowas declined reviewing the validity of the cre­ ation of the Special Chambers by Treaty (para 44–46) and to comment directly on the effects of the icj decision on its own ruling, showing some deference. Nevertheless, in a obiter dicta, the Abuja Court has not shied away from remembering that it is doctrinal and jurisprudential dogma that there is no such a thing as an hierarchy between international jurisdictions, which is also applicable to the icj (para 48). Had the case been admitted

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Human and Peoples’ Rights standing still without intervention in reason of its jurisdictional limits.225 This is explained by the narrow jurisdictional and access regime of the Court, especially when confronted with others that allow direct access to individuals and do not follow rules of exhaustion of local remedies. Though it seems contradictory with what was said before, it is the reality of most courts, condemned to stand, at least in their first years, between a rock and a hard place. Either they are conceived to depend on a flexible jurisdictional and access regime and risk not attracting enough States, or they have a stricter one and risk being impossible to access and irrelevant. In the end of the day, this is a political question and not a legal one. The level of power of a court, the range of protection and the degree of compliance will always depend on the states that create them and of the legal culture they have. This is not impos­ sible to achieve in Africa, though in paces suitable to be, gradually, supported by each State.

and decided by the African Court its ruling risked the same fate and the same confronta­ tion with the icj. 225 Michelot Yogogombaye v. Senegal (Application n. 1/2008), supra at 26, para 37 (“The Court concludes that Senegal has not accepted the jurisdiction of the Court to hear cases insti­ tuted directly against the country by individuals or non-governmental organizations. In the circumstances, the Court holds that pursuant to Article 34 (6) of the Protocol, it does not have jurisdiction to hear the application”).

chapter 10

Cultural Rights and a Right to Cultural Identity before the European Court of Human Rights: Present Approaches and Future Challenges Laura-Maria Crăciunean 1 Introduction In the 90’s, as Michael Keating put it, “there was something of a rediscovery of culture” and of its implications on all the areas of social life. Cultural approaches in social sciences, in general, have emerged as a response given to methodological individualism and to the rational choice theories. It has been asserted that1 taking culture into account will help us to better locate individuals, within their social context, where their choices can actually have a meaning; it will help us to bring into question forms of action that cannot be easily explained in the calculated language of the rational choice theory. As a main result, ration­al choice became just one of the culturally determinant modes of action, among the others.2 This type of approach was also reflected in international law, in particular in human rights law, where it has materialized in concerns such as: the desire to improve the minorities or indigenous peoples’ systems of protection, the wish to “translate” several cultural aspects into legal terms—for example, by formulating and regulating certain principles, such as the respect for cultural diversity—to better explain and clarify the content of cultural rights or to enhance the latter mechanism of protection. There were several international legally binding and soft law documents adopted immediately after 1990: at the Council of Europe level, the Framework Convention for the Protection of National Minorities (fcnm);3 at the un level, the Optional Protocol to the International Covenant on Economic, Social and Cultural 1 M. Keating, Culture and Social Science in D. de la Porta, Michael Keating (eds.), Approaches and Methodologies in the Social Sciences. A Pluralist Perspective (Cambridge-New York, Cambridge University Press), 2008, pp. 102–103. 2 Idem. 3 Signed at Strasbourg, on the 1st of February 1995 and entered into force on the 1st of February 1998. hereinafter referred to as the Framework Convention (fcnm). The fcnm is in force in for Romania starting from the 1st of February 1998.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_011

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Rights (op-icescr)4 and the un Declaration on the Rights of Indigenous Peoples;5 at unesco level, the Declaration on Cultural Diversity6 and the Convention on the Protection and Promotion of the Diversity of Cultural Expressions.7 All these instruments attempt to substantiate and build up a new approach to human rights, calling for a reevaluation of some of their fundamental principles, such as, for instance, the value of individual autonomy—reflected in the liberal, individualistic orientation of the great majority of treaties on human rights—or the one of “internal” self-determination. One of these developments was also aimed at establishing a distinct legal right, namely the right to cultural identity.8 The existence and the legal consecration of such a right represents a real challenge, at least from two points of view: firstly, translating culture into legal terms or conceptualizing a right that relates to culture and secondly, taking due account of the collective dimension such a right entails. The latter aspect makes it rather “dangerous” in the eyes of states, which are concerned about the impact of such an approach on the exercise of their traditional functions. The difficulties and the implications of the encounter between culture and law have been illustrated by professor Emmanuel Decaux, from whom we quote: “descended from the absolute sphere of art, culture enters legal relativism and the logics of conciliating the private and the general interest”.9 This chapter will be structured in the following manner: firstly, the theoretical resources, which might lie the foundations of a distinct subjective right to cultural identity and the arguments/advantages supporting its legal consecration, will be discussed; it will also be pointed out the disadvantages and the practical consequences or difficulties that such a demarche entails (Section 2).

4 Opened for signature on the 10th of December 2008 and entered into force on the 5th of May 2013. 5 Adopted, on the 13th of September 2007, by the un General Assembly, through Resolution no. A/RES/ 61/295. 6 Adopted by unesco, on the 2nd of November 2001. Hereinafter referred to as the unesco Declaration of 2001. 7 Adopted by the unesco, in Paris, on the 20th of October 2005 and entered into force in March 2007. Hereinafter referred to as the unesco Convention of 2005. 8 See, for more details, Y.M. Donders, Towards a Right to Cultural Identity? School of Human Rights Research (Antwerp/Oxford/New York, Intersentia/Hart, 2001). 9 See, Em. Decaux, Comment la prise en compte des droits culturels interfère sur la compréhension des autres droits de l’homme? in Patrice Meyer-Bisch , Les droits culturels, une catégorie sous-développée de droits de l’homme, Actes du viii-e Colloque Interdisciplinaire sur les droits de l’homme, Editions Universitaires Fribourg Suisse, volume 22, 1993, p. 196.

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Secondly, several legally binding and soft law instruments, adopted by the Council of Europe, related to the topic and considered to be valuable resources for courts when it comes to the protection of cultural identity, will be brought into picture, namely: the fcnm and the European Convention for the Protection of Fundamental Rights and Liberties (echr).10 Within the context of addressing the last document, I will also approach the Report on Cultural Rights before the European Court of Human Rights (ECtHR)11 prepared by the Research Division of the ECtHR12 and released to the public in January 2011. This report constitutes a synthesis of the cases-law adjudicated by the Court in the broader context of cultural rights. The report also makes reference, in Section iii, to a right to cultural identity. The selected case-law shows the interesting approach that the ECtHR took while dealing with the protection of intra- and inter-state cultural diversity and in relation with the existence of a distinct right to cultural identity. Practically, the Court used cultural rights in order to defend cultural diversity as well as several aspects related to cultural identity such as: ways of life, traditions, customs, a right to culture etc. One could wonder though, if the echr also regulates cultural rights? Throughout its text it is noted that, unlike other conventions with a similar object, the echr does not make reference to a right to culture, a right to participate in cultural life or to any other right which contains an explicit reference to culture, nor to cultural rights as such. However, the report illustrates how, by means of a dynamic interpretation of various provisions of the Convention, the Court succeeded in protecting cultural identity and, in the broad sense, cultural rights. In the present chapter discussions shall be limited only to what the Court identifies, within the mentioned report, as “the right to cultural identity”. Despite its formulation, the Court does not consider it to be a subjective individual right per se, but rather a “basket of rights”, which itself has used in order to shape several useful principles of real importance for protecting cultural, ethnic or religious identity (Section 3). In conclusion, despite the new approaches to cultural diversity and cultural rights, a distinct legal right to cultural identity is still hard to imagine. The main obstacle could be its collective dimension and what such a collective dimension 10 11 12

Hereinafter referred to as echr. Hereinafter referred to as ECtHR. Cultural Rights in the Case-Law of the European Court of Human Rights, European Court of Human Rights, Research Division, January 2011, at the following address: http://www.echr.coe.int/NR/rdonlyres/F8123ACC-5A5A-4802-86BE-8CDA93FE58DF/0/ RAPPORT_RECHERCHE_Droits_culturels_EN.pdf.

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could entail. However, this does not mean a lack of protection. Several civil and political rights, as the ECtHR showed, also have a cultural dimension, which can constitute a useful tool when it comes to the protection of various aspects related to cultural identity (Section 4). 2

The Right to Cultural Identity—Theoretical and Practical Aspects

2.a Arguments Given the constant importance of cultural rights—even prior to the clarification of their full content, legal regime or their real way of protection, before the international courts—scholarly conceptual debates were also aimed at drawing up a possible list13 of cultural rights, as recognized by several international law documents. This list was meant to include also civil, social and political rights, which are related to cultural identity,14 respectively civil, social and political rights having a mixed nature. As all the rights contained in the list15 were considered to be related to cultural identity, thus constituting important tools for its protection, the central question was whether these rights are sufficient for the achievement of the purposes referred to. So, in the eventuality of a negative answer, the further question was if the actual human rights protection system should be adapted 13

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15

P. Meyer-Bish, also known as the leader of the Fribourg Group, identifies three groups of cultural rights, namely: 1. cultural rights as regulated in international law instruments— the right to take part in the cultural activity of a community and the protection of author’s rights (art. 27 of the Universal Declaration on Human Rights and of the International Covenant on Civil and Political Rights, and art. 15 of the International Covenant on Economic, Social and Cultural Rights); the right to education (art. 26 of the Universal Declaration on Human Rights and article 13 of the International Covenant on Economic, Social and Cultural Rights), linguistic liberties of persons belonging to national minorities (article 27 of the International Covenant on Civil and Political Rights); 2. the rights recognised to authors or cultural rights of expression—academic freedoms, rights of journalists and artists; 3. The cultural dimension of some civil rights—the right not to be discriminated against, freedom of thought, conscience and religion, freedom of opinion and expression, freedom of association, including the right to belong or not to a specific cultural community. See for details, P. Meyer-Bish, Analyse des droits culturels…, pp. 18–19. For instance, before the ECtHR, several aspects related to the individual’s cultural identity are protected, in the absence of express provisions on cultural rights, through article 8 (the right to respect for private and family life), article 9 (freedom of thought, conscience and religion) or Article 2 of the Protocol I to echr (the right to education). At point 3.

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as to include a new distinct legal right, namely a right to cultural identity? Such a distinct right, will be, consequently, meant at enhancing the protection of cultural identity. Those who argue in favor of such a right—including unesco during the 70’s and the 80’s—use as main arguments the serious violations of human rights, perpetrated with the intention of affecting the identity of certain communities, as such. They believe that the recognition of a collective cultural identity would be needed in order to protect and promote, more efficiently, but in an equal manner, both the identity of communities and the one of the individuals. As far as the individuals are concerned, cultural identity is considered to be an important component of human dignity. As its component, cultural identity should enjoy protection from restriction or oppression because otherwise it will lead to alienation, confusion or even to violent conflict. It is believed that the disregard of someone’s cultural identity affects the very existence of his/ her human dignity.16 In addition, given the weak conceptualization of cultural rights,17 the legal consecration of a distinct right to cultural identity would also give the necessary impetus to new developments in the area;18 such a right might be seen as an umbrella-concept, comprising all other cultural rights.19 A distinct right to cultural identity20 would also be interesting to debate, from the perspectives of human rights universalist and relativist theories. 16

17

18

19

20

See for this view, V. van Dyke, The Cultural Rights of Peoples, Universal Human Rights, 1980, pp. 1–21; J.H. Burgers, The Right to Cultural Identity in J. Berting and others (eds.), Human Rights in a Pluralist World: Individuals and Collectivities, Westport/London, Meckler, 1990, pp. 251–254. See for details, L.-M. Crăciunean, About Cultural rights in International Law: Conceptual Clarifications, in Revista Română de Drept Internaţional [The Romanian Journal of International Law] (2011) N°12, pp. 49–91. J. Symonides, The History of the Paradox of Cultural Rights and the State of the Discussion within unesco in P. Meyer-Bisch, Les droits culturels, une catégorie sous-développée de droits de l’homme, Actes du VIIIe Colloque interdisciplinaire sur les droits de l’homme, Editions Universitaires Fribourg, Suisse, 1993-A, pp. 176–177. See for details on a list of cultural rights, L.-M. Crăciunean, Protecţia drepturilor culturale în dreptul internaţional [The Protection of Cultural Rights in International Law] (Bucharest, C.H. Beck, 2011), p. 38. See for details, D.-C. Dănişor, Constituţia României comentată. Titlul I. Principii generale [The Romanian Constitution. Comments. Title I. General Principles], (Bucharest, Universul Juridic, 2009), pp. 228–234; D.-C. Dănişor, Dreptul la identitate al persoanelor aparţinând minorităţilor naţionale [The right to identity for persons belonging to national minorities] in D.-C. Dănişor, D. Dănişor, Dreptul la identitate [The right to identity], (Bucharest, Universul Juridic, 2010), pp. 30–40.

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Valuing, from a legal point of view, various cultural aspects or promoting ­various cultures is undoubtedly meant to produce, looking at it from these two perspectives, either the fear of cultural relativization of human rights, with the consequence of affecting theirs hard core or, on the contrary, theirs adaptation to context, to the cultural realities of the societies to which the individuals concerned belong to. Admitting the existence of a separate right to cultural identity, does not mean ignoring the clear distinction which must be drawn between the proclamation of the right and its implementation, nor the fact that the implementation of such a right—which is by no way different from the one of any other right—cannot be done in a unconditional, absolute manner, but within certain limits. The right should be implemented by taking into account all the other human rights, considered to be the hard core, as well as eventual rights belonging to certain communities. In this respect, it is generally accepted, nowadays, that the universal meaning of a certain human right does not mean its universal implementation.21 Both the unesco Declaration of 2001 and the unesco Convention of 2005 emphasize the fact that “no one may invoke cultural diversity to infringe upon other human rights”. From this perspective, a right to cultural identity will not be different from any other human right and, in particular, from the rights which are related to someone’ s cultural identity, such as the freedom of religion or the right to education. While human rights legal rules have a universal character, being thus applicable to all, on the basis of human dignity, their implementation is not, nor must it be, uniform. States have the possibility of taking into account the specific situation and the national context when they are called upon to implement those legal rules. In this context, the margin of appreciation doctrine, the subsidiarity and the proportionality principles, as recognized by the European human rights system of protection, constitute efficient jurisprudential constructions meant to protect the inter- and intrastate cultural diversity. Those who oppose to the legal recognition of a distinct right to cultural identity22 invoke “the authentication” of a powerful argument which might be used as basis for a series of questionable and isolated practices or cultural activities, having the potential of affecting other human rights (for example, 21 22

Y.M. Donders, quoted work, p. 5. J. Donnelly, Universal Human Rights in Theory and Practice, Cornell University Press, 1989; J.-B. Marie, Les droits cultureles: interface entre les droits de l’individu et les droits de la communautés in P. Mayer-Bisch (ed.), Les droits cultureles, quoted work, pp. 197–213.

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early marriages, the inferior position of woman, certain cultural practices affecting the physical integrity of the children etc.). These scholars are of the opinion that such a right would not bring about anything good but, on the contrary, it is likely to cause interpretations, which will impair on effectiveness and application of some other human rights, considered to be the hard core. However, there are two distinctions to be drawn: on the one hand, a distinction between the proclamation and the implementation of a certain specific right and, on the other hand, a distinction between cultural practices and cultural rights. To this argument some scholars also add the one according to which the recognition of a distinct right to cultural identity would not bring anything new in the current mechanism through which cultural diversity is protected.23 They consider that international human rights law already addresses this problem when recognizing and protecting freedom of thought, of conscience and of religion, freedom of association or the right to education. In addition, the unclear, vague character of such a right, its significant collective dimension24 or even the breach of the principle of equality, could constitute serious obstacles for its application.25 Consequently, for the time being—acknowledging that cultural rights still lack consistent clarification of theirs content, theirs implementation is nor properly done and theirs mechanism of protection, conceived under the op-cescr, is rather new26—the recognition of a separate legal right to cultural identity would not help, but on the contrary. It will only bring new variables and uncertainties. In addition, given its close connection with the cultural rights of the persons belonging to minorities or the ones of indigenous peoples, its recognition as separate legal right—even if recognized as an individual one—is also expected to hinder the ratification process of the opcescr. The collective dimension of such a right could be easily seen as one of the main reasons for states’ reluctance. 23 24

Y.M. Donders, quoted work, pp. 339–340. M. Galenkamp, Individualism versus Collectivism. The Concept of Collective Rights, (rfs, Rotterdam, 1993), p. 102. The author underlines, we belive with good reason, that, when certain collective rights are acknowledged, several difficult questions also arose. For instance: Which are the prerequisites, on the basis of which, we can decide if certain groups may be acknowledged as collective entities or, on the contrary? or Who is “the genuine voice” entitled to ask for these things on behalf of the group? 25 See for more details, Y.M. Donders, quoted work, pp. 14–18. 26 The op-cescr entered into force on the 5th of May 2013.

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In addition, given its extremely vague content, a first appropriate step will be its clarification. This is to be done in order to see whether protecting cultural identity by means of a distinct right would bring something new, meaning a greater protection,27 as compared to the one already provided for, by the present system. For example, both the un Committee on Human Rights28 and the ECtHR have successfully used other civil, political, economic or social rights in order to protect aspects related to cultural identity. The Content of the Right to Cultural Identity: Object, Subject, Obligations of the States In the case of a negative answer—meaning the lack of legal recognition of a separate subjective right to cultural identity—things are very simple in the sense that the present human rights systems of protection offer a sufficient legal basis for the protection of one’s cultural identity, be it the individual or the community. In the case of a positive answer—meaning its recognition as a separate legal right—a right to cultural identity raises many conceptual questions in relation to its content, to its object, the holder (s) of the right, the debtor (s) of the right, the obligations of the states or the legal consequences resulting from such an acknowledgment. The object of a right to cultural identity would be cultural identity as such, an extremely wide and unclear concept because of the vagueness of the term “culture” itself. The subject(s) could be the individual or the community. As we have shown, the general preference is that of a collective right to cultural identity, as the concept itself suggests the importance that the community has in the process of constructing the individual’s identity. Concerning the obligations of the states, these could be of a vast nature: positive, negative, to comply with, to protect, and/or to fulfill.29

2.b

2.c How Such a Right Can be Named? One other problem, which was identified by scholars, was the terminological one, namely the possible name of such a right. 27 28 29

The same position was expressed by the Human Rights Committee of the Kingdom of the Netherlands. See for details, Y.M. Donders, quoted work, pp. 5–22. See for details, on the un Human Rights Committee case-law, L.-M. Crăciunean, Protecţia drepturilor culturale…, pp. 21–37. See, for more details, Y.M. Donders, quoted work, pp. 334–340.

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It has been claimed,30 and we believe that it is for good reason, that we cannot speak about a “right to cultural identity”, because it would mean “the right to have a cultural identity”; or, identity is not a product, service or status that can be delivered, purchased or provided for by someone, in this case by the states; its a rather complex process, in which the individual himself is the main actor. Moreover, in the situation in which we consider this identity as something that should be granted to the individual by the state, this approach could lead to dangerous conclusions as states could use this “tool” in a discriminatory manner.31 There are also a series of difficulties related to the implementation of a right which is formulated in the manner “the right to cultural identity”, because identity cannot be simply “drawn”. For this reasons, the quoted author prefers the syntagm the right to preserve one’s own cultural identity. The individual’s cultural identity is the result of his participation, throughout his entire life, in the existence of several different communities; it is not a status but an act. For this reason, it will be much more appropriate, as Patrice MeyerBisch also suggested,32 to refer to it as to the right to cultural identification, i.e.— in the sense that it is the right of the individuals to freely identify, during their entire life, with several cultural communities (families, religions, races, nations etc.) but also the right to freely opt out from these identifications. Yvonne Marie Donders33 believes that the syntagm the right to the preservation and/or the development of cultural identity also deserves to be taken into account. She justifies this choice by pointing out a double dimension: on the one hand, the existence of a right belonging to the communities and to the individuals to develop their identity and, on the other hand, the existence of a right to protect and preserve it; however, she suggests her own formula, namely: the right to freedom of cultural identity. Her option for this formula is motivated by the fact that one of the central ideas pleading in favor of the existence of a separate legal right to cultural identity is the one connected to

30

31

32

33

J. Donnelly, The Universal Declaration Model of Human Rights: A Liberal Defense, Human Rights Working Papers, no. 12, posted on 12 February 2001 on: www.du.edu/humanrights/workingpapers/index.html. M. Galenkamp, Individualism versus Collectivism—The Concept of Collective Rights, Gouda Quint, 1998, p. 116. The author mentions, as an example, the racial segregation policies in South Africa. P. Meyer-Bisch, Les droits culturels formait-ils une Catégorie Spécifique des Droits de l’Homme? Quelques difficultés logiques in Patrice Meyer-Bisch (ed.), Les droits culturelles une catégorie Sous-développée the droits de l’homme, Actes du Colloque VIIIe interdisciplinaire sur les droits de l’homme Coste Universitaires Fribourg, Suisse, 1993-A, p. 35. Y.M. Donders, quoted work, pp. 5–6.

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the possibility of freely changing that cultural identity; in this case, its formulation, as a freedom, would better illustrate this idea of change, of development. She believes that, from this point of view, the right to freedom of cultural identity would be closer, as its formulation and content are concerned, to the freedom of religion. In my view, in the hypothesis in which such a separate subjective right will be legally recognised, the appropriate wording will be freedom to cultural identity or, better yet, the right to freedom of cultural identification. Under this formula states would have both positive, and negative obligations; then, the right it would be seen as an individual right with a collective dimension and it would not be unclear, as to the possibility of granting the exclusive power of communities over the individuals; the individual’s right to freely choose whether he or she wants to be a part of that community will be better observed and protected. On the other hand, even if discussions with respect to the existence of a separate right to cultural identity started from the way in which unesco has regulated these aspects, in its previous documents (for example, the Mexico Declaration of 1982), at present—not even at the unesco’s level—cultural identity is not dealt with in strictly legal terms (not even by the unesco Declaration of 2001, nor by the unesco Convention of 2005). The latter mentioned documents only deal with cultural diversity and the right to the protection and development of cultural identity. So there is not such a subjective legal right, namely a right to cultural identity. This syntagm is used rather as a moral and political value, which deserves to be protected. Its use imposes to states a certain conduct, namely to be diligent when adopting cultural policies, in the sense of choosing those cultural policies which are the most suitable in order to guarantee and respect one’s own cultural identity.34 In spite of the fact that there are authors who35 argue that a distinctive subjective right to cultural identity already exists in international law and in spite of the fact that different un resolutions also use this syntagm,36 these views 34

35

36

See in this respect, Y.M. Donders, A Right to Cultural Identity in unesco, in F. Francioni and M. Scheinin (eds.), Cultural Human Rights, International Studies in Human Rights, (Leiden-Boston, Martinus Nijhoff Publishers, 2008), p. 339. P. Thornberry, The un Declaration on the Rights of Persons Belonging to National or Ethnic, Religious, Linguistic Minorities: Background Analysis, Observations and an Update, in A. Philips, A. Rosas (eds.), Universal Minority Rights (Turku/Abo, London, 1995), p. 41. Resolution no. 2002/26 of the 22nd of April 2002, Resolution no. 2004/20 of the 16th of April 2004 and Resolution no. 2005/20 of the 15th of April 2005, issued by the Human Rights Committee. all of them denominated “The promotion of the benefit of cultural rights for all and respect for different cultural identities”, paragraph 5.

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are to be seen as isolated and do not render useless the scholars’ debates on the matter. In Romania,37 debates on the possible existence of a distinct right to cultural identity can be built on, in particular, in relation to Article 6 of the Romanian Constitution,38 the right to identity. However, in the following section we shall only illustrate the manner in which the European Court of Human Rights, through its case-law, has approached the issue of a right to cultural identity. 3

Cultural Diversity and a Right to Cultural Identity before the echr

3.a Classical Approach At the Council of Europe’s level, cultural diversity is protected, most of the times, in close connection with the rights of persons belonging to minorities. In terms of conventional standards, this protection is to be achieved through the fcnm and the echr. In spite of the fact that the echr’ s scope of application does not cover explicitly the right of persons belonging to minorities, the ECtHR developed

37

38

However, the debates on the existence of a distinctive legal right to cultural identity would have been fueled if the Romanian Parliament would have adopted the draft law on national minorities. The draft was submitted to the Romanian Parliament, by its initiator, in 2005. Currently it lies within the Chamber of Deputies, where it is to be debated in its plenary session. On the 25th of June 2012 the project, with the amendments that were made in the Human Rights, Cults and National Minorities Issues Committee was sent to the Chamber of Deputies with the proposal to be submitted for debate before its plenum. However, the report includes significant amendments, as compared to the initial project, including the one regulating the cultural autonomy for national minorities. These provisions, in particular, are most interesting in the context of our discussion on the existence of a distinct right to cultural identity. See for details, The report of the Committee for Human Rights, Cults, and National Minority Issues no. 25/42/2012, whose contents may be consulted at: http://www.cdep.ro/comisii/drepturile_omului/pdf/2012/rp502_05.pdf. See Romanian Constitutional Court, Decision no. 799/2011 in T. Toader, Constituţia României reflectată în jurisprudenţa constituţională [The Romanian Constitution Reflected in the Constitutional Jurisprudence], (Bucharest, Hamangiu, 2011), p. 10. The Romanian Constitutional Court has shown, referring to article 6 of the Romanian Constitution, that: “The regulation of the manner in which the state shall guarantee the right of national minorities to identity is not to be done through a constitutional disposition but by means of law”. And we add, by means of organic law as regulated by article 73 paragraph 3 letter r of the Romanian Constitution.

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several tools and principles which proved to be useful in protecting several aspects related to their identity. There is though, one text in the echr which refers, explicitly, to national minorities namely Article 14 of the Convention, according to which: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, color, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. However, we must note that Article 14 is not autonomously applicable. It can be applied only in conjunction with another article (a right) regulated by the Convention. As a first observation, the link that exists between the fcnm and the echr is established in both the Preamble of the fcnm and in its Article 23. The Explanatory Report of the fcnm deals with it in a more detailed manner.39 Thus, the Preamble makes reference to echr and points out that the rights enshrined therein are a valuable source in the process of clarification and development of the rights of persons belonging to national minorities. Article 23 points out the relationship between the two instruments by stating: The rights and freedoms flowing from the principles enshrined in the present framework Convention (fcnm), in so far as they are the subject of corresponding provision in the Convention (echr) or in its protocols thereto, shall be understood so as to conform to the latter provisions (the ones of the echr). The Report regulates, in more details, the relation between the two conventional instruments, in Article 23, as follows: This provision deals with the relationship between the framework Convention and the Convention for the Protection of Human Rights and Fundamental Freedoms, reference to which is included in the Preamble. Under no circumstances can the framework Convention modify the rights and freedoms safeguarded in the Convention for the Protection of Human Rights and Fundamental Freedoms. On the contrary, rights and freedoms enshrined in the Framework Convention which are the subject 39

Council of Europe Documents, Explanatory Report on the Framework Convention for the Protection of National Minorities, 1995, §10, p. 201.

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of a corresponding provision in the Convention for the Protection of Human Rights and Fundamental Freedoms must be interpreted in accordance with the latter. The aforementioned provisions emphasize once more the individual character of the rights recognised for the persons belonging to national minorities, and leaves aside the collective dimension, namely the one referring to rights granted to minorities as such. The relation between the two conventional instruments, set forth by the fcnm, is nevertheless important as it gives to the echr a level of interpretation through which the latter can clarify the content and applicability of several rights that are granted to persons belonging to national minorities. The practical application of this relation can be easily traced by a simple reading of the 2011 ECtHR’ s Report on cultural rights. However, this matter will be touched upon at a later stage. A second observation, refers to the fact that the fcnm does not, explicitly, refer to a distinct subjective right to cultural identity. Article 5 stipulates that the States Parties undertake to promote the conditions that are necessary for persons belonging to the national minorities to maintain and to develop their culture, and to preserve the essential elements of their identity, namely their religion, language, traditions and cultural heritage. States Parties shall also refrain from policies or practices aimed at assimilation of persons belonging to national minorities against their will. The latter obligation also extends to the situation in which such actions would result from third parties conduct. State Parties shall ensure respect for the right of every person belonging to a national minority to freedom of peaceful assembly, freedom of association, freedom of expression and freedom of thought, conscience and religion. A series of linguistic rights, or rights related to education in the mother tongue, the right to be informed promptly, in a language which is understood, on the reasons for arrest or detention, the nature and the reason for the accusation, including the right to receive an interpreter, free of charge (this last right, in the echr practice, falls within the scope of protection of Article 6, the right to a fair trial40), the right to effectively participate in the cultural, social, economic life, as well as in the debate on public issues, in particular those aimed at the respective minority, are also added.

40

However, the echr does not recognize the right to use a language of free choice, even if it is the mother tongue, in the communication with the public authorities, regardless of the size of the group in question. There is though, one exception, in civil and criminal cases, in which such practice is accepted. This, however, is regulated by in the fcnm.

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All these provisions clearly entail that what the drafters of the fcnm had in mind was the classic European approach to the protection of cultural, linguistic or religious identity of persons belonging to national minorities. In other words, the protection of these values was envisaged in an indirect manner, by using other civil, economic or social rights. It is the so-called protection by means of a “basket of rights” which are related to several aspects of one’s own identity. 3.b Developments and Challenges. This classic approach is also used by the ECtHR. As we have shown, whenever it is about cultural rights, in the broad sense, so including the rights of persons belonging to minorities, the Court, in the absence of an explicit regulation by the echr,41 and through dynamic interpretation, has found the necessary resources to do so. Through this mechanism, the Court has formulated several principles, which are important for the protection of one’s own cultural identity, including the one of persons belonging to minorities. In 2011, the Report on Cultural Rights in the Case-Law of the European Court of Human Rights, issued by the the Research Division of the European Court of Human Rights, shows that cultural rights, in the broad sense, were protected by the ECtHR through the use of other civil or political rights such as: the right to a fair trial (Article 6 of the echr), the right to respect for private and family life (Article 8 of the echr), freedom of thought, of conscience and religion (Article 9 of the echr), freedom of expression (article 10 of the echr) or the right to education (Article 2 of the 1st Protocol to the echr). However, the relevant point for our paper, namely for the discussion on the possible existence of a distinct legal right to cultural identity, is Section iii of the Report, entitled precisely “the right to cultural identity”. Although the report expressly mentions the fact that it does not represent the official position of the Court, this is less important for our analysis. But, what is important is the fact that the European Court is trying to clarify the content of this right, in which sense establishes a series of links with other civil and political rights and formulates several principles that are to be observed when dealing with aspects related to one’s own cultural identity. 41

The explicit regulation of a separate legal right to cultural identity was discussed during the negotiations conducted in relation with the adoption of an Additional Protocol to the echr, in cultural matters, which were carried out from 1993 to 1995. Some participants in the debates believed that the explicit regulation of such a legal right to cultural identity is to be left outside, because is likely to encourage the nationalist and secessionist tendencies of minorities residing in the Eastern and South Eastern European states.

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So, beyond the title, which may, indeed, suggest the existence of a possible distinct subjective right to cultural identity, the contents of this point confirms, practically the opposite, namely the in-existence of such a distinct right. In fact, in spite of its name, what the Court took into account was the right to preserve the ethnic, cultural and religious identity of persons belonging to minorities. As it can be easily noticed, all the cases which are mentioned under the “umbrella” concept the right to cultural identity, have been dealt with by the ECtHR, in the context of other civil and political rights, namely: the right to private and family life (Article 8), freedom of thought, of conscience and religion (Article 9) or freedom of association (Article 11). However, the Court has left out from the contents of a possible right to cultural identity, an important element which is referred to in all the instruments for the protection of the rights of persons belonging to the national minorities, namely, the language. The same approach was followed in respect of the cultural and natural heritage. The three mentioned were placed under two separate headings: “language rights”, respectively “cultural and natural heritage”. However, the Court underlined that language rights are also protected in relation with the provisions of Articles 6, 8 and 10 of the echr and that the cultural and natural heritage’s protection is to be seen in relation with the provisions of Article 2 of the 1st Protocol to the echr. So, what the Court actually did was to use the so-called “basket of rights” in order to protect certain distinct aspects related to the ethnic and religious identity of a person. The Court also stressed the role which freedom of association plays in the preservation and protection of one’s own identity. Thus, what the Court had in mind was to shape and explain the content of a possible distinct right to cultural identity, to show that one’s own identity is well protected by means of other rights and to explicitly state several principles that could help in this kind of cases. But the Court did not have in mind to create a new distinct subjective right to cultural identity. The cultural identity of the person is a complex concept, an umbrella-type one, which entails many components. Its protection, in practical terms, shall be achieved through the use of other civil and political rights, which are already regulated by the echr. The link that the Court established between the above mentioned rights and freedom of association adds an important collective dimension to the individual rights referred to above, as the Court acknowledges the importance, for the social cohesion, of the interaction that takes place, on the one hand, between groups and on the other hand, between groups and individuals.42 42

ECtHR, Decision from the 17th of February 2004, Case Gorzelik and others v. Poland , application no. 44158/98, § 92.

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In the 2011 Report, one could find several principles that the ECtHR used when dealing with identity issues, namely: – the existence of an emergent consensus among the Council of Europe’s Member States, on the fact that minorities have special needs and that states also have positive obligations, in their respect, in observance of their security, identity and ways of life; however, these special needs do not confer upon such persons an absolute immunity from the general laws which are designed to protect the interests of the community as a whole, interests which could have also an impact on the manner in which those laws are implemented.43 – cultural diversity is a value of the community as a whole44 and as a consequence the protection of the rights of persons belonging to minorities shall be achieved, not only in order to fulfill their own interests, but also in order to preserve cultural diversity, as such, as a value of the entire community; - diversity shall not be perceived as a threat but, on the contrary, as a source of enrichment;45 the formulation of this principle was made in a case in which the Court also stressed the importance of Article 14 of the echr, on the interdiction of discrimination, on grounds of race or ethnic origin; this case, involved the excessive use of violence against some members of the Roma community, by state agents, during an arresting procedure, on the sole grounds that those persons in question belonged to that particular community, so they are deemed to be much more violent than other people; in the same case the Court reaffirmed the principle of prohibition of discrimination and it reassessed the definition of discrimination,46 which it 43

44 45 46

The distinction is made between the right itself and its implementation, which may vary from one member state to another depending on its culture, traditions, history, etc, and clear reference is made to the case-law principle of the margin of appreciation. This allows freedom to the states, under the supervision of the European judge, to implement the rights in the social, political, economic, cultural and historic context . It is presumed that the national legislator is much more in a position to know all of these conditions. See, echr, the Resolution of January 18, 2001, in the Chapman v. the United Kingdom of Great Britain and Northern Ireland, no. 27238/95, echr, 2001-I, § 93. ECtHR, Decision from the 18th of January 2001, Case Chapman v. the United Kingdom of Great Britain and Northern Ireland, § 93. ECtHR, Decision from the 6th of July 2005, Case Nachova and others v. Bulgaria, [gc] application no. 43577/98 and no. 43579/98, § 145. “Discrimination is the different treatment of persons, which find themselves in similar objective situations”. ECtHR, Decision from the 6th of July 2005, Case Nachova and others v. Bulgaria, application no. 43577/98 and no. 43579/98, §146.

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had previously established in Willis vs. United Kingdom of Great Britain and Northern Ireland;47 –  the ethnic identity of a person constitutes an essential aspect of his or hers private life48 so it must be protected protected under article 8 of the echr, regulating the right to respect for private and family life; in above mentioned case, the Court used article 8 in order to protect one’s person right to freely choose his/hers ethnic or cultural identity and the right of that choice, when this choice is based on objective criteria, to be respected; the Court considered as objective criteria, the following: the common language, religious beliefs and/or common cultural or traditional origins (§ 58); in formulating those criteria the Court also referred to the Grand Chamber’s Decision in the Sejdić and Finci vs. Bosnia and Herzegovina,49 upon the settlement of which the ECtHR explained the notion “ethnicity” in the following manner: “(…) ethnicity and race are similar notions. If the notion of race relies on the idea of biological classification of human beings, as well as on the color of the skin or facial characteristics, ethnicity has its origin in the existence of different social groups which are characterized, in particular, by the fact that they have in common a nationality, a religious faith, a language and common cultural or traditional origins. As a consequence, discrimination against a person, based on ethnicity, is a form of racial discrimination (…)”; – the acknowledgment of the right to preserve his/hers own identity and the right to have a family life in accordance with their own traditions;50 this right also falls within article 8 of the echr’ s scope of application; the right should not be seen as one which is unlimited, absolute but subjected to restrictions that may result from the need to protect the general interests of a certain community, as a whole, or values such as: the rights and freedoms of others, public order, morality etc. –  the prohibition of discriminatory treatment on ethnic grounds has been formulated by the Court, in the following manner, in D. H. and Others vs. Czech Republic: 47 48 49 50

ECtHR, Decision from the 11th of June 2002, Case Willis v. United Kingdom of Great Britain and Northern Ireland, application no. 63042/97, §48, ECtHR 2002-iv. ECtHR, Decision from the 27th of April 2010, Case Cibotaru v. Republic of Moldova , no. 27138/04. ECtHR, Decision from the 22nd of December 2009, Case Sejdić şi Finci v. Bosnia and Herţegovina, application no. 27996/2006 and 34836/2006, §43. ECtHR, Decision from the 18th of January 2001, Case Chapman v. United Kingdom of Great Britain and Northern Ireland, application no. 27238/95, §73.

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No difference in treatment, solely or in a decisive manner, based on the ethnic origin of a person may be objectively justified in a contemporary democratic society, which relies upon principles such as pluralism and the respect for different cultures.51 The lack of an objective and reasonable justification, can also be equated with the lack of an objective and legitimate interest and the lack of reasonable proportionality between the means that are used and the pursued goals.52 – the principle according to which States Parties may also resort to positive discrimination in order to correct certain factual disparities; this principle has been established and reiterated, on several occasions, by the ECtHR, in the following manner: Article 14 of the Convention does not prohibit the Contracting Parties to treat certain groups differently, with the aim to correct the factual differences that might exist among them. In fact, the presence of such disparities and the failure of States Parties to correct them, in the absence of an objective and rational justification, may constitute an infringement of article 14;53 – freedom of assembly and association is an important freedom for persons belonging to minorities and for the proper functioning of every democratic society; thus, persons belonging to minorities have the right to form associations, for the purposes of promoting their own culture and conscience;54 pluralism is also achieved by recognizing and observing diversity and the dynamics of cultural traditions, ethnic and cultural identities, religious faiths, ideas and

51 52 53

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ECtHR, Decision from the 13th of November 2007, Case D.H. and others v. Czech Republic, application no. 57325/00, §175, 176 and 196. ECtHR, Decision from the 8th of March 2010, Case Munoz Diaz v. Spain, application no. 49151/07, §47. ECtHR, Decision from the 23rd of July 1968, Case “On certain aspects concerning the use of languages in education, in Belgium” v. Belgium , application no. 1474/62, 1691/62, 1769/63, 1994/63, 2126/64, §10; ECtHR, Decision from the 6th of April 2000, Case Thlimmenos v. Greece, application no. 34369/97, §44, in echr 2000-iv; ECtHR, Decision of the 13th of November 2007, Case D.H. and others v. Czech Republic, application no. 57325/00, §175. ECtHR, Decision from the 10th of July 1998, Case Sidiropoulos and others v. Greece, in the Reports of Judgments and Decisions 1998-iv, §44.

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artistic literary and socio-economic concepts;55 the harmonious interaction between persons and groups, having different identities, is essential for the achievement of social cohesion; – the existence of minorities and of various cultures in a country is a historical fact which every democratic society must tolerate and even protect or support in accordance with the established principles of international law; thus, the promotion of a minority culture, through the activities of an association, cannot constitute a threat to the territorial integrity of the respective State or to its public order.56 As one could easily notice, the ECtHR shaped these principles when dealing with several individual cases relating, in one way or another, with minorities issues. In none of the before mentioned decisions the Court used the syntagm “national minorities”. It only referred to persons belonging to “minorities”. The Court has also, in some cases, referred to minorities as such, but only to show that some of the individual rights, that are enshrined in the Convention, have also an important collective dimension or, in other words, that those rights gain their full and complete understanding, in relation with the established values belonging to a certain community.57 This key of interpretation is valuable in respect of the protection of cultural diversity at the intra- and interstate level.58 Thus, national context do matter. As well as does the margin of appreciation doctrine.59 However, this “contextual approach” goes hand in hand with the European supervision, thereby guaranteeing a variable geometry in the application of the Convention and providing, to a large extent, space for the protection of cultural diversity. 55 56 57

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ECtHR, Decision from the 17th of February 2004, Case Gorzelik and others v. Poland , application no. 44158/98, §92. ECtHR, Decision from the 27th of March 2008, Case Tourkiki Enosi Xanthis and others v. Greece, application no. 26698/05, §51. For instance, in the Chapman v. Great Britain and Northern Ireland, the Court referred to the Roma ethnic identity and stated that the desire to live in a caravan is a way of life, an integral part of a longstanding tradition of the Roma minority; a somehow similar approach was taken by the Court in Munoz Díaz v. Spain, when stating that: “The force of the collective faiths belonging to a well-defined cultural community, cannot be ignored”. ECtHR, Decision from the 8th of March 2010, Case Munoz Diaz v. Spain , application no. 49151/07, constitutes, in our opinion, an example of the manner in which the ECtHR protected intrastate cultural diversity. Being conceptualized, at first, as a jurisprudential doctrine, the margin of appreciation became a conventional doctrine according with the provisions of article 1 of the 16th Protocol to the echr (signed in Strasbourg on the 16th of May 2013; the Protocol was signed by Romania but it is not in force yet).

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This aspect is even better illustrated by the ECtHR’ s Decision in Munoz Díaz vs. Spain. In this case, the Court found that the refusal to pay a survivor’s pension to a Roma woman, upon the death of her husband, to which she was married in accordance with the Roma community traditions, constitutes a breach of Article 14 of echr and of Article 1 of the 1st Protocol to the echr. In other words, the Court acknowledged the validity of a traditional Roma marriage, for the said purpose, namely that the surviving spouse receive the survivor’s pension. This is an interesting case, in several respects, including the one related to the assessments by the Court, of the validity of a traditional Roma marriage, concluded in Spain. The validity of this traditional marriage was discussed and acknowledged in the context of the Spanish authorities’ refusal of an application, that was made by a Roma woman, in order to obtain survivor’s benefits. This case is also important from the margin of appreciation doctrine’s point of view, as it emphasize the immense role this doctrine plays in the echr’s mechanism. Furthermore, the case points out the supervision of the Strasbourg judge. Eventually, we believe that the case is a good illustration of the way in which the margin of appreciation doctrine and this supervision go hand in hand. Thus, practically, the state’s margin of appreciation can be lifted, in order to protect intrastate cultural diversity, when the State Party itself fails to protect a certain right guaranteed by the echr. This decision shows that the Court indirectly protected aspects related to the cultural identity of persons belonging to communities, which have different traditions from the majority. And it did so including against their states of origin, meaning at the intrastate level. This way of action is less common, as normally, the margin of appreciation and the European supervision are targeted at protecting the interstate cultural diversity. However, we must not ignore the context and purpose, in which the Court considered such a marriage to be valid. It did not assert that the right to cultural identity gives to these people the right to marry in accordance with their own tradition, it did not impose on states to acknowledge the effects of such marriages, nor did it turn such marriage into an alternative to the civil marriage—which is acknowledged and practiced by the vast majority of European states. The Court only asserted that, in this particular case, the “firm conviction of the claimant that she is married and that such a marriage produces all its legal effects, a conviction which was also supported by a series of documents emanating from the Spanish authorities”, entitles her to request and obtain the survivor’s pension. A few short factual and legal backgrounds may be useful. In its reasoning, the Court applied some of the principles already established in its previous cases (namely: the principle of non-discrimination; the right to preserve one’s own identity; the right to live one’s life in accordance

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with one’s own traditions; the principle according to which minorities have special needs and states also have positive obligations in relation with the protection of their security, identity and theirs ways of life; however, these needs do not confer upon these persons an absolute immunity from the general laws which are designed to protect the interests of the community as a whole) and stated that: The request of the applicant was based on her firm belief that she has a legally valid marriage, which belief also results from the fact that she comes from a community whose values are well established and rooted in the Spanish society, belief that was strengthened to the claimant by the conduct of the Spanish authorities, which in several documents that issued referred to her as the wife of M.D.; in addition, The Court must take into account the fact that she belongs to a community within which the validity of a marriage, according to specific rites and traditions, has never been doubted or regarded as contrary to public order” or “the force of the collective convictions of a community, which is well-defined from a cultural point of view, cannot be ignored (§59). The Court also presented the historical and legislative context which established such a belief for the applicant, respectively the fact that on the date of her marriage according to the Roma community traditions, in 1971, in Spain there was a law in force which did not allow for any kind of marriage by law, except for the Canon law of the Catholic Church; according to rules of the latter, the applicant would have had to forgo her prior religion (which fact, considers the Court, would have violated the applicant’s religious freedom); although this law was abolished, after the entry into force of a new constitution, in 1978, and the new law would have allowed the claimant to opt for a civil marriage, she has not done so, being firmly convinced of the validity of the marriage established in 1971, in accordance with the traditions and rites belonging to the Roma ethnic community. As already underlined above, in this particular case, the Court applied its own principles, that previously acknowledged in some of the cases it dealt with, and gave legal effects to a traditional Roma marriage, for the purpose of obtaining a survivor’s pension. The Court did not wish to say more than that. It did not, under any circumstances, wish to assert that the right to cultural

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i­dentity is the one in whose name the case was solved as such. Furthermore, we believe that, in that particular case, the lack of a “cultural sensitive” approach would have had produced an unjust effect for the applicant. However, we do not believe, that the Court could “overlook” and recognize the validity of such a marriage in other contexts and situations, for example, in the case of early marriages in the Roma communities. It simply could not apply the same logic of its established principles. The reason is that there are other rights (in particular the rights of children or of women) which should take priority. Thus, “the force of collective beliefs of a community which is well-defined from a cultural point of view” is not likely to have similar effects to those it had in the above discussed case. 4 Conclusions To conclude, as previously shown,60 the marginal syntagm “the right to identity”, used by Article 6 of the Romanian Constitution, in spite its formulation as a right, is, in fact, the umbrella-concept under which certain elements of this identity are protected,61 namely the cultural, ethnic, linguistic and religious ones. The protection of these elements is carried out, in particular, through other subjective rights, which are recognized to all individuals, for example, freedom of thought, conscience and religion or freedom of association etc. Consequently, it will be hard to speak about a distinctive legal right to cultural identity but rather, of a principle which is applicable in the field of minorities’ protection. I assert that it is a principle, on the one hand, because it is regulated under the 1st Title of the Romanian Constitution, entitled The Fundamental Principles of the Romanian State and, on the other hand, because, after a simple reading of the text, it becomes clear, in spite of the marginal syntagm, that the texts is actually referring to several elements that make up the identity of an individual, namely elements like culture, ethnicity, language and religion, and it dose not refer to a distinctive legal right to identity. 60 L.-M. Crăciunean, Protectia drepturilor culturale…, p. 38 and the following; L.-M. Crăciunean, Is there a Right to Cultural Identity? in East West Cultural Passage, C. Peter Magrath Research Center for Cross-Cultural Studies, (2011), no. 11, pp. 142–164. 61 The Romanian Draft Law on the Protection of National Minorities, in Article 9 paragraph 2, stipulates that: “within the meaning of the law, the elements of identity are: language, culture, historical monuments, the movable cultural heritage, traditions and religion”.

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The existence of a right to cultural identity is still debated among scholars.62 The main issues under debate are focused on the concrete contents of the right, on the debtor of the right (who should ensure an identity to an individual) and what such a right might bring new in the human rights protection system.63 In addition, it was feared that, sometimes, such a right would operate against the individual’s freedom and, moreover, it would not face out to a rigorous scientific analysis. Such a distinctive right would rather be harmful to the personal freedom, as the individual may be compelled, by the cultural community he or she belongs to, to make certain choices which, under regular circumstances, he or she would not have made. The scientifically based arguments can be found in the rhetorics of different sociologists, anthropologists, but also legal scholars.64 There are several . . . ideas that go against such a recognition. These ideas could be of great help in a long-term approach on the rights of persons belonging to national minorities. In the first place, even if one is to start from the premise that ethnicity may be an important source of differentiation, which may be reflected in the individual’s choices, or in the way in which the individual is experiencing and perceiving the surrounding world, it would be questionable to think that ethnicity acts in an isolated, singular manner and that it is the absolute determinant of all the behaviors or actions of an individual. That could turn everyone into being the prisoner of his own ethnic (cultural) background. Moreover, following the same rationale, one cannot choose and/or escape this ethnic heritage, as it is imposed on him by virtue of birth, into a certain community or in a given group. And this group/community has the right to preserve and develop this heritage, thus having the right to constrain the individual to act in a specific way. I believe, though, that such an approach is not at all realistic. In the contemporary world, at least in Europe, an individual does not spend his entire life, and in an exclusive manner, under the glass globe of the ethnic community into which he was born. Although it is clear that an individual inherits certain cultural features because he/she was raised in a specific environment, which subsequently influences his/her choices and the way in which he/she relates to

62

63 64

See also, A. Vigorito, Pour un droit a la différence culturelle. Un plaidoyer á double tranchant? in M.-C. Foblets, N. Yassari (eds.), Legal Approaches to Cultural Diversity, Martinus Nijhoff Publishers, Leiden/Boston, 2013, pp. 249–285. See, for more detail, Y.M. Donders, quoted work, pp. 5–22. See for details on the theory which we will explain below, P. Keller, Re-thinking Ethnic and Cultural Rights in Europe in Oxford Journal of Legal Studies 18/1998, pp. 36–38.

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the surrounding world,65 his/her identity is not unique, but multiple, it is not static, but dynamic and it is not determined in a structural, fundamental manner, by his/her affiliation to a certain culture or ethnic group. It is only influenced, to a certain extent, by this affiliation. In fact, each and every individual constructs his/her identity. This construction is achieved on the basis of his/ her own choices and experiences, in the context of his own interpretations and, in particular, in the way in which he/she values all these experiences. It is not likely for an individual to relate to a single culture but, rather, to all the cultural aspects and cultures that he comes across with during his entire lifetime. The ethnic or cultural heritage may be responsible for the manner in which he perceive these cultures. As Asbjørn Eide noticed, people are, equally, cultural producers and the products of culture.66 This approach reveals a relationship that it is both interesting and dynamic. The concept of the multiple identity of an individual and the lack of scientific rigor of the absolute cultural determinism, as presented above and analyzed by Perry Keller, are also stated, in the 2004 un Report on human development.67 Synthetically speaking, the report places cultural freedom at the very foundation of the human personality development and considers that the individual does not have a single identity, conferred upon by a state or by a group, but he has a multiple identity. This identity is built over time, during the entire life of the individual concerned, in an individual manner, as each an every individual has different experiences throughout his own life. So, this identity 65 66 67

P. Keller, quoted work, p. 36. A. Eide, Cultural Rights as Human Rights in A. Eide, C. Krause, A. Rosas (eds.), Economic, Social and Cultural Rights (Martinus Nijhoff, Dordrecht, 1995), p. 230. This idea of the multiple identity of an individual, which is seen as a permanent process achieved by identifying the individual, throughout their lifetime, with different communities, was also acknowledged in the United Nations Report of 2004 on human development, entitled Cultural Liberty in Today’s Diverse World, United Nations Development Program, New York, 2004, pp. 3–4. This report sustains that states should respect cultural diversity within their borders and, through multicultural policies, they should accommodate cultural diversity, and by no way should they aim at the uniformity of cultural identities, departing from the wrong idea that a uniform society is a society without tensions and, therefore, capable of following the natural way of development. In order to demonstrate this model, the report aims at busting five of the myths related to the powerful reaction of the states dealing with the problem of acknowledging cultural diversity. Among these “busted” myths also lies that of the unique identity of an individual. Individuals can and do have multiple identities which are complementary: ethnic origin, religion, race, citizenship; an individual can be identified with several groups, communities.

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evolves individually. The cultural element is very important as a starting point but it is questionable to assume that the individual’s identity is static. The report questions the established practice of states who, in the twentieth century, in order to shape up the nation as a unitary, homogeneous construction, assumed the role of supplier of this unique identity. As we were saying, this is not only valid for states but also for other smaller groups, such as all kind of minorities. Precisely under this aspect the existence of a distinct legal right to cultural identity is both debatable and questionable. The syntagm that it is used now, namely the right to the preservation and development of ethnic, cultural, linguistic and/or religious identity68 is much more scientifically rigorous, despite its content, which can, sometimes, be difficult to establish. The recognition of a distinct legal right to cultural identity would raise too many questions to which scholars were not able to answer, at least by now, in a satisfactory manner. Who must “provide” an identity to an individual? How about the persons belonging to national minorities? Can the state be responsible for this? Can the minority group, as such, be responsible to provide an identity to the individual? Within what limits? Which are the components of this identity and who has the legitimacy to establish those components? If the state is responsible for providing it, where does it draw the components of this identity from and what problems may be placed under the aspect of everyone’s freedom to choose? If this responsibility lies within the competences of a specific minority group to which an individual belongs to, which are the concrete components of that identity and who has the legitimacy, in the group, to establish and impose them on the other members? And how? There is a well known principle established, both in general international law and even in the Romanian draft law on the protection of persons belonging to national minorities, namely the one stating the freedom of a person to identify or not with a certain minority. A complementary provision is the one prohibiting to public authorities to require a person to declare their belonging to a specific minority. This is the spirit of what we have said above. The individual’s identity is a process, is built through a series of choices, which choices may be influenced, to a certain extent, by certain cultural predetermined elements but that cannot be considered, in an absolute manner, as culturally determined. Even more interesting is the argument used by Marlies Galenkamp.69 She starts from the distinction and, at the same time, the connection between 68 69

Or its formulation as a freedom as we proposed before. M. Galenkamp, quoted work, pp. 112–113.

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Gemeinschaft70 and Gesellschaft71 and shows72 that in the modern society, due to mobility and individualization, the same individual is simultaneously a part of multiple and distinct groups; each of these groups has its own contribution and “affects” only certain components of the individual identity of the person. The main consequence is that such an approach makes the collective rights seem as something outdated, since a single community is no longer sufficient to ensure, constitutively, the identity of an individual.73 But the fact that the individual identity results from the interaction with a single community which also marks him in a decisive manner, is not only unlikely but even almost impossible, in a modern society, in which the individual is and is obliged to be very mobile, in both time and space. Secondly, ethnic groups do not have a static identity themselves. They interact with other ethnic groups, be they a minority or a majority etc.; through this interaction they reinforce, define and redefine, at all times, their own collective identity. Their interaction is natural and a valuable source of inspiration and life. As an individual cannot live isolated, in the same way, cultural communities perish if they become isolated. Thus, in spite of the fact that among the individuals of an ethnic community there is a certain common denominator, it is not one absolutely determinant for their individual actions and/or choices. From this perspective, the identity of an ethnic group will always be diverse and not homogeneous.74 70

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In a Gemeinschaft, each individual is part of a reduced and significant number (with special relevance) of groups and each of these groups occupies a very large part of their life; in such a community the identity of individuals is determined, mainly, also by their quality as a member of the respective community. See for this explanation of the term Gemeinschaft, M. Galenkamp, quoted work, pp. 112–113. In a Gesellschaft , due to mobility and individualization, the same individual is simultaneously a part of multiple and distinct groups, each having its own contribution and “affecting” only certain components of their life. Or, in other words, “modern man, unlike his predecessors, belongs to several tribes simultaneously”. See for this explanation of the term Gesellschaft, M. Galenkamp, quoted work, pp. 112–113. Emphasizing that this is also the conclusion of some other scholars such as Joel Feinberg or John McCamant (Joel Feinberg, Harmless Wrongdoing , Part iv of the Moral Limits of Criminal Law, Oxford, 1988; John F. McCamant, Social Science and Human Rights in International Organization, Vol. 35, No. 3, pages 157–552). M. Banton, The Legal Regulation of Majority-Minority Relations, lecture at the luf—Lustrum Congress The Social Construction of Minorities and their Cultural Rights in Western Europe, Leiden, 12–14 September 1990, quoted by Marlies Galenkamp, quoted work, p. 112. P. Keller, op. cit., p.36.

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With respect to those presented above, the ethnicity of the person, although it has an important role in the construction of an identity, and in spite of the fact that some authors present it as a determining factor, we believe that, in addition to the serious problems it may pose under the scientific rigorousness, it is not even useful as concept, in the field of the rights of persons belonging to minorities. Even if we accept that the ethnicity of a person is an important part of his identity, granting collective rights to groups as such, for this only reason is a questionable practice. When stating these things we also have in mind the historical aspects connected with the protection of the rights of persons belonging to national minorities in Romania. A right to cultural identity75 raises too many problems on the one hand, under the aspect of identifying its content and on the other hand, as to those who have the right to establish this content. I doubt that the legal consecration of such a right would be useful to a climate that needs to reflect both cultural diversity and the regional stability. In conclusion, I share the beliefs of Marlies Galenkamp. The latter, referring to the balance that must be kept between collective and individual requests, draws a comparison between the situation of indigenous peoples and the situation of the national minorities in the former Republic of Yugoslavia, and emphasizes: If indigenous peoples may have justification for such a request (a collective right to cultural identity), in order to preserve their identity, in the case of the disputes between the Serbs, Croatian and Muslims, in the former Yugoslavia, such requests should no longer be observed (…) they are simple requests of groups as such, justified by the need to protect the cultural identity of the group. But, in the case of the latter, the reality has demonstrated that only by silencing the element called ethnicity and emphasizing individual rights, this conflict can be kept under control and even eliminated.76

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In the same manner in which was shaped by the Romanian legislator, in Chapter v— Cultural autonomy, of the Romanian Draft Law on the Protection of National Minorities. M. Galenkamp, quoted work, p. 187.

chapter 11

The Influence of Inter-American Human Rights Law on the Jurisprudence of the Brazilian Supreme Federal Court Eleonora Mesquita Ceia and Adriana Ramos Costa Introduction1 In recent decades there has been a movement of globalization of constitutional law, characterized by the fact that constitutional law surpasses the borders of the respective States and becomes directly relevant to other legal orders, including non-state ones.2 In this context, the emergence of an international constitutionalism is discussed, which encompasses two processes closely interlinked: i) the constitutionalization of international law and; ii) the internationalization of constitutional law that consists of opening the internal constitutional order to legal sources of international law. In view of the greater integration of global society, the approximation between national and international jurisdictions reveals itself as a promising alternative to a suitable solution for global problems, considering the inability of state and international orders to resolve them alone. This explains why the dialogue among courts issue became one of the central topics on the agenda of constitutionalism of many countries.3 For instance, Brazil. In effect, since the adoption of the Constitution of the Federative Republic of Brazil of 1988 (hereinafter, “CRFB/88”) the Brazilian legal system shows itself open to international law. Concerning International Human Rights Law, Brazil has ratified the main protective instruments in this field. However, the international human rights jurisprudence is not yet valued by national courts.4 1 The authors would like to thank Fellipe Müller for their valuable comments and assistance in the framework of the research group “The Cross-Fertilization Process in the Brazilian Supreme Federal Court: the use of international jurisprudence on human rights protection” funded by Ibmec-rj (Brazil). 2 Neves, Marcelo. Transconstitucionalismo. São Paulo: Martins Fontes, 2013, pp. xix. 3 Ibid., p. 137. 4 See Ramos, André de Carvalho. O Diálogo das Cortes: O Supremo Tribunal Federal e a Corte Interamericana de Direitos Humanos. In: Amaral Junior, Alberto do; Jubilut, Liliana Lyra. O stf e o Direito Internacional dos Direitos Humanos. São Paulo: Quartier Latin, 2009, p. 809.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_012

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The objective of this chapter is to examine the influence of Inter-American Human Rights Law on the jurisprudence of the Brazilian Supreme Federal Court (hereinafter, “stf”) regarding fundamental rights protection. This in order to critically assess stf’s role within this scenario of active transjudicial dialogue among courts. Through the analysis of selected stf’s decisions, the chapter points out that, on the one hand, Inter-American Human Rights Law plays a significant role, by helping the stf to overcome previous positions and revoking domestic provisions at odds with international standards of human rights protection; but, on the other hand, it plays no role at all, since it is not invoked by stf in capital rulings, where it would be fully applicable. The limitation of the chapter to Inter-American Human Rights Law can be justified given the importance of this regional protective system for the development of human rights protection in Brazil.5 The chapter is organized as following. Section  1 explains the process of internationalization of human rights and the phenomenon of transjudicial dialogue directly connected with the first. Section 2 describes the relationship between International Human Rights Law and CRFB/88. Section 3 outlines the main features of the Inter-American human rights system and stf. Then it examines four selected cases, in order to evaluate the influence of InterAmerican Human Rights Law on stf’s jurisprudence. The conclusion presents the results of the chapter. i

The Internationalization of Human Rights and Transjudicial Dialogue

The process of internationalizing human rights began after the end of the Second World War.6 The serious human rights violations committed under the German Nazi regime boosted the creation of norms and institutions capable of ensuring respect for human dignity. The internationalization of human rights 5 ceia, Eleonora Mesquita. A jurisprudência da Corte Interamericana de Direitos Humanos e o Desenvolvimento da Proteção dos Direitos Humanos no Brasil. Revista da emerj, Rio de Janeiro, v. 16, n. 61, 2013. 6 In fact, even before the outbreak of the Second World War certain factors had already contributed so that later human rights were protected and positivized as universal rights under international law. Such factors are the first milestones of the process of internationalization of human rights, namely, the International Humanitarian Law, the League of Nations and the International Labour Organisation. See Piovesan, Flávia. Direitos Humanos e Direito Constitucional Internacional. 7. ed. São Paulo: Saraiva, 2006a, p. 107ff.

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thus arises from the common will of States towards a more effective international action for the protection of such rights. A set of international protective rules and mechanisms is constituted and the possibility of State responsibility in the international field is recognized, in case of human rights violations. Hence, internationalizing human rights presupposes the relativization of the classic concept of State sovereignty—as an absolute and unlimited power—and the affirmation of the individual as a true subject of international law.7 Gradually a “complex corpus juris” has formed, composed of numerous international protective instruments, on different levels (global and regional), with different beneficiaries (general or specific) and several mechanims of control and supervision (committees and courts).8 This diversity of organs and normative instruments in the field of human rights protection is part of the phenomenon described as “fragmentation” of international law.9 The honourable judge of the International Court of Justice, Antônio Cançado Trindade, points out that the above-described phenomenon moves away the alleged exclusive competence of States regarding human rights protection. Moreover, it results in proliferation of international supervision organs, which began to act concomitantly with the national bodies. In effect, with the evolution of human rights internationalization, domestic law and international law started to act in constant interaction. In this sense, national bodies became bound by human rights treaty provisions and contemporary constitutional law opened itself to international human rights law, by incorporating its principles and general obligations.10 Thus, the internationalization of human rights brought together national and international jurisdictions, in order to guarantee an effective human rights protection in the domestic level. In this context of interpenetration between international law and domestic law an essential feature is the thesis of “transconstitutionalism” defended by 7 8

Piovesan, 2006a, op. cit., p. 117. Trindade, Antônio Augusto Cançado. A proteção dos direitos humanos e o Brasil (1948– 1997): as primeiras cinco décadas. Brasília: Editora da Universidade de Brasília, 1998, p. 18. 9 The thesis of the fragmentation of international law defends that from the juridicization of specific areas of the international agenda—such as trade, environment and human rights protection—arose the coexistence of autonomous normative systems submitted to their own principles and institutions. They are, therefore, independent systems with no hierarchical link between them. This implies the possibility of conflict between these systems concerning the interpretation of the basic principles of international law, what explains its fragmentation. See Lage, Délber Andrade. A jurisdicionalização do direito internacional. Belo Horizonte: Del Rey, 2009, pp. 6–7. 10 Trindade, op. cit., pp. 19–20.

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Marcelo Neves. According to this distinguished jurist, due to the increasing integration of the international society, constitutional problems concerning fundamental rights protection and State power limitation became relevant to other jurisdictions—beyond the national one—which are provoked to offer solutions to them. Such problems would be transconstitutional, because their solution would require the involvement of domestic, international, supranational and transnational courts.11 Neves claims that the “transition bridges”12 between these different legal systems are built based on the work of their judges and courts, thus emerging a “conversation” or “dialogue” between courts.13 The extent to which the same constitutional problem regarding human rights protection may be raised before various courts (national, international, supranational or transnational) requires cooperation between these bodies. This is because state, international, supranational and transnational legal orders are not able to offer— when considered separately—satisfactory solutions to normative problems of the world society. That is why transconstitutionalism is the most promising alternative, since it allows a plurality of perspectives for a solution to those problems.14 In other words, from transconstitutionalism results a constitutional cross-fertilization among courts, in the sense that they are open to a mutual and constructive learning.15 The expression “constitutional cross-fertilization” was presented by AnneMarie Slaughter, who defines it as the engagement of judges and courts “in a growing dialogue with their counterparts around the world on the issues that arise before them”.16 This phenomenon arises, largely, as a result of the globalization, which “means that judges in different countries will have to decide more and more cases involving issues governed by international or foreign law”.17 According to Slaughter, foreign or international decisions have a “persuasive authority”, in the sense that they offer new information and perspectives that can help judges tackle a particular constitutional problem more creatively or with greater insight.18 She points out that from an increasing cross-fertilization 11 Neves, op. cit., pp. xxi–xxii. 12 “Transition bridges” (“pontes de transição”) are models of interlinking that serve a transversal rationality between legal systems. See ibid., p. 128. 13 Ibid., p. 117. 14 Ibid., p. 131. 15 Ibid., p. 119ff. 16 Slaughter, Anne-Marie. A new world order. Princeton: Princeton University Press, 2004, p. 70. 17 Ibid., p. 72. 18 Ibid., p. 77.

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among judges around the world emerges a “global jurisprudence” that refers to the existence of active transjudicial dialogue, where principles of pluralism and legitimate difference prevail. Furthermore, she warns that judges or courts that failure to participate in this dialogue take the risk to reduce strongly their influence in the global legal system.19 The next sections will examine the role of the Brazilian constitutional judges in this scenario, particularly concerning their dialogue with the InterAmerican Human Rights Law. ii

International Human Rights Law and the Brazilian Constitution of 1988

The CRFB/88 consolidates the rupture with the authoritarian military regime installed in 1964, delimiting the beginning of the democratization process in Brazil. This fact has a considerable impact on Brazilian law regarding the protection of fundamental rights and on Brazil’s engagement in the international system of human rights protection. In this sense, the Brazilian Constitution not only confers extraordinary importance to fundamental rights, but also enables significant progress in the recognition of international obligations in human rights protection. One notes that the CRFB/88 privileges the issue of fundamental rights protection soon after the beginning of its text, where the Constitution establishes the principle of human dignity as one of the foundations of Brazilian Democratic State of Law.20 It shows that the CRFB/88 recognises the fundamental rights, whose common origin is the value of human dignity, as core elements for the realization of the democratic principle.21 The CRFB/88 innovates compared with Brazilian previous constitutions, by  locating in its first chapters an extensive list of fundamental rights and guarantees, and granting them the condition of “stone clauses”.22 Moreover, 19 20

21 22

Ibid., p. 79. Article 1° CRFB/88 states: “The Federative Republic of Brazil, formed by the indissoluble union of the states and municipalities and of the Federal District, is a legal democratic state and is founded on: […] iii – the dignity of the human person […].” See brasil. Constitution of the Federative Republic of Brazil. 3. ed. Brasília: Chamber of Deputies, Documentation and Information Center, 2010, p. 13. Piovesan, 2006a, op. cit., p. 26. The so-called “stone clauses” are rights and principles of essential importance to the Democratic State of Law instituted by CRFB/88 and, therefore, form the untouchable part of the Constitution. Thus, article 60 §4° CRFB/88 provides: “No proposal of amendment

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the CRFB/88 extends the catalogue of fundamental rights in comparison with the previous constitutions, since it establishes not only civil and political rights, but also economic, social and cultural rights. The legal force of all these rights before the public power is assured by the principle of immediate applicability of the norms defining fundamental rights and guarantees as stated under article 5° §1° CRFB/88.23 With regard to the performance of Brazil in international relations, the CRFB/88 assumes an unprecedented internationalist orientation in Brazilian constitutional history. In this sense, the CRFB/88 is the first Brazilian Constitution that sets out the principle of the prevalence of human rights as a basic norm to govern the action of the Republic in international affairs.24 According to Flávia Piovesan, the adoption of the prevalence of human rights principle by the CRFB/88 implies not only Brazil’s commitment in the process of establishing norms concerning International Human Rights Law, but also the constituents’ pretension to full integrate such norms into the Brazilian internal legal order.25 In fact, with the end of authoritarianism and, in particular, after the CRFB/88 promulgation, Brazil has started to ratify important international human rights instruments. For instance, the Inter-American Convention to Prevent and Punish Torture in 1989; the United Nations Convention on the Rights of the Child in 1990; the International Covenant on Civil and Political Rights in 1992; the International Covenant on Economic, Social and Cultural Rights in 1992; and the American Convention on Human Rights in 1992.26 With respect to the integration of international human rights norms into Brazilian law it is worth noting the rule of article 5° §2° CRFB/88, which represents a true “opening clause” of Brazilian Constitutional Law to International

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shall be considered which is aimed at abolishing: i- the federative form of State; ii- the direct, secret, universal and periodic vote; iii- the separation of the Government Powers; iv- individual rights and guarantees.” See brasil, op. cit., p. 26. Article 5° §1° CRFB/88 determines: “The provisions defining fundamental rights and guarantees are immediately applicable.” See brasil, op. cit., p. 20 and Piovesan, 2006a, op. cit., pp. 33–36. Article 4° CRFB/88 foresees: “The international relations of the Federative Republic of Brazil are governed by the following principles: i- national independence; ii- prevalence of human rights; iii- self-determination of the peoples; iv- non-intervention; v- equality among the states; vi- defence of peace; vii- peaceful settlement of conflicts; viiirepudiation of terrorism and racism; ix- cooperation among peoples for the progress of mankind; x- granting of political asylum.” See brasil, op. cit., p. 13 and Piovesan, 2006a, op. cit., pp. 37–39. Piovesan, 2006a, op. cit., p. 40. Piovesan, 2006a, op. cit., p. 260ff and Trindade, op. cit., p. 111ff.

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Human Rights Law.27 This provision confers a special position on international treaties, to the extent that it confers on international treaty law the status of material constitutional norms. Therefore, the rights established in human rights international treaties, in which Brazil is a party, are part of the catalogue of rights enshrined in the CRFB/88. In short, based on the rule of article 5° §2°, the CRFB/88 gives due recognition to the special character of human rights international treaties.28 After the CRFB/88 promulgation the stf affirms as its primary mission the protection of fundamental rights and, in effect, follows the trend of the Constitution, opening itself to the internationalization of human rights protection. In this context, there are relevant cases which show the use not only of the jurisprudence of the Inter-American Court of Human Rights, but also of provisions of the American Convention on Human Rights, by the Supreme Court in its reason-giving activity. The next section will study some of these cases, in order to identify what kind of influence the Inter-American Human rights Law has on the jurisprudence of the stf. In other terms, the purpose is to determine if the Brazilian constitutional judges keep a constructive conversation with the International Human Rights Law or isolate themselves from it. iii

The Inter-American Human Rights Law and the stf Constitutional Jurisprudence

The The Inter-American human rights system is characterized by the high levels of social inequality and the young democracies of Latin American region. Its historical origin goes back to the proclamation of the Charter of the Organization of American States (oas) and of the American Declaration of the Rights and Duties of Man, both in 1948.29 27

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Article 5° §2° CRFB/88 provides: “The rights and guarantees expressed in this Constitution do not exclude others deriving from the regime and from the principles adopted by it, or from the international treaties in which the Federative Republic of Brazil is a party.” See brasil, op. cit., p. 20. So understands Piovesan, 2006a, op. cit., p. 52 and Trindade, op. cit., pp. 133–134. The Charter of the oas is the international treaty that established the Organisation concerned, whose objective is the defence of the American continent’s interests, by searching peaceful solutions for the economic, social and cultural development of the region. In turn, the American Declaration of the Rights and Duties of Man is a recommendation approved by the Member States of the oas that covers the human rights foreseen in the Charter of this Organisation. Until the conclusion of the American Convention on Human

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After the adoption of these two instruments began a gradual development of the mechanims of human rights protection in the Inter-American system. In this context, in 1959, was created a specialized organ for the promotion and protection of human rights in the scope of the oas, namely, the Inter-American Commission on Human Rights (hereinafter, “the Commission”). Initially, the Commission should function provisionally until the institution of the American Convention on Human Rights (hereinafter, “the Convention”), which occurred in 1969. However, due to the fact that the Convention has not been ratified by all Member States of the oas, there emerged a double system of human rights protection in the American continent. On the one hand, the general system based on the oas Charter and on the American Declaration of the Rights and Duties of Man, whose supervision body is the Commission, for the States non-Parties to the Convention. On the other hand, the stricter system founded on the Convention, which is binding only for its States Parties and includes the same Commission and the Inter-American Court of Human Rights (hereinafter, “iachr”).30 The Convention, also known as the Pact of San Jose, is the most important instrument of the Inter-American human rights system.31 It recognizes a catalogue of civil and political rights similar to that established by the International Covenant on Civil and Political Rights. In contrast, the Convention does not state specifically any economic, social and cultural rights.32 In ratifying the Convention the States assume negative and positive obligations. On the one hand, they must not infringe the rights guaranteed by the Convention and, on the other hand, they must adopt the necessary measures to give effect to such  rights, for example, by adapting their internal law to the Convention (Article 2 of the Convention).33 Finally, the Convention provides a human

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Rights, in 1969, this Declaration provided the normative basis for the human rights protection in the Inter-American system and remains so in relation to the States non-Parties to the Convention. See Godinho, Fabiana de Oliveira. A proteção internacional dos direitos humanos. Belo Horizonte: Del Rey, 2006, pp. 89–90. Ibid., pp. 91–92. Brazil incorporated the Convention into national law via the publication of Decree N° 678 on November 11 1992. For a more detailed analysis of the Convention see Piovesan, Flávia. Direitos Humanos e Justiça Internacional: um estudo comparativo dos sistemas regionais europeu, interamericano e africano. São Paulo: Saraiva, 2006b, p. 87ff. A catalogue of economic, social and cultural rights was only provided within the scope of the Inter-American Human Rights System in 1988 with the adoption of the Protocol of San Salvador. Article 2 of the Convention states: “Where the exercise of any of the rights or freedoms referred to in Article 1 is not already ensured by legislative or other provisions, the States

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rights ­monitoring and implementation system, which is integrated by the Commission and the iachr. According to Article 41 of the Convention the main function of the Commission is to promote the respect and defence of human rights. The Commission performs such a function, mainly through the examination of individual petitions and interstate communications (Articles 44 and 45 of the Convention), as well as through its legitimacy to submit cases of human rights violations before the Court.34 In turn, the iachr, created in 1969 by the Convention, is a judicial autonomous institution and not an organ of the oas. It has two core competencies: i) the contencious competence, which concerns the task of the iachr to judge cases of human rights violations only in relation to the States that have expressly accepted its compulsory jurisdiction;35 ii) the consultative competence, which concerns the role of the iachr to formulate non-binding opinions on the interpretation of the Convention or any international treaties related to human rights protection applicable to American States.36

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Parties undertake to adopt, in accordance with their constitutional processes and the provisions of this Convention, such legislative or other measures as may be necessary to give effect to those rights or freedoms.” Based on this provision, the iachr determines that no State may invoke the provisions of its internal law as justification to not comply with the Court’s decisions. See ceia, op. cit., p. 24 and Organization of American States, American Convention on Human Rights. “Pact of San Jose, Costa Rica” (B-32). Available at http://www.oas.org. Accessed on: 30 June 2014. In accordance to article 61 i of the Convention “only the States Parties and the Commission shall have the right to submit a case to the Court.” See Organization of American States, op. cit. For a full analysis on the Commission see Piovesan, 2006b, op. cit., p. 91ff. Article 62 i of the Convention provides: “A State Party may, upon depositing its instrument of ratification or adherence to this Convention, or at any subsequent time, declare that it recognizes as binding, ipso facto, and not requiring special agreement, the jurisdiction of the Court on all matters relating to the interpretation or application of this Convention.” See Organization of American States, op. cit. Article 64 of the Convention determines: “i- The member states of the Organization may consult the Court regarding the interpretation of this Convention or of other treaties concerning the protection of human rights in the American states. Within their spheres of competence, the organs listed in Chapter x of the Charter of the Organization of American States, as amended by the Protocol of Buenos Aires, may in like manner consult the Court; ii- The Court, at the request of a member state of the Organization, may provide that state with opinions regarding the compatibility of any of its domestic laws with the aforesaid international instruments.” See Organization of American States, op. cit. For a more detailed analysis of the iachr see Piovesan, 2006b, op. cit., p. 98ff.

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Article 68 i of the Convention states that the State Parties shall comply with the judgment of the Court in any case to which they are parties. This means that, the iachr judgments have a binding effect and, consequently, the noncompliance with them entails the State’s international responsibility. On 10th December 1998 Brazil accepted the compulsory jurisdiction of the iachr, by promulgating the referred declaration by Decree N° 4.463 of November 2002. Hence, the iachr judgments are binding on Brazil. On the other hand, the stf, created in 1828, is the highest judicial body in Brazil.37 It is composed of eleven Justices, who are appointed by the President of the Republic and then submitted to a public hearing before the Senate (Article 101 and sole paragraph CRFB/88). In the context of redemocratization, the CRFB/88 expanded significantly the stf’s powers, especially regarding the control of constitutionality and the fundamental rights protection. According to Article 102 CRFB/88 the stf’s major competence is to safeguard the Constitution. Among its constitutional powers the stf is responsible to judge: the direct action of unconstitutionality, the declaratory action of constitutionality and the allegation of disobedience of fundamental precept deriving from the Constitution itself;38 in common criminal offences the President of the Republic, the Vice-President, the members of the National Congress, its own Justices and the Attorney-General of the Republic;39 the extradition requested by foreign State;40 habeas corpus, writs of mandamus, habeas data and writs of injunction decided in a sole instance by the Superior Courts, in the event of a denial;41 and, on extraordinary appeal (the so-called “recurso extraordinário”), cases decided in a sole or last instance, under the terms of article 102 iii CRFB/88. With reference to the effects of the stf judgments, Article 102 §2° CRFB/88 provides that “the final decisions on merits, pronounced by the Supreme Federal Court, in direct actions of unconstitutionality and declaratory actions of constitutionality shall have force against all, as well as a binding effect, as regards the other bodies of the Judicial Power and the governmental entities and entities owned by the Federal Government, in the federal, state, and local levels.”42 As mentioned above, the CRFB/88 expanded significantly the stf’s powers. In addition, as Luís Roberto Barroso notes, the demand for justice in Brazilian society has significantly grown under the CRFB/88. This can be explained, on 37

For a complete study on the stf see Mendes, Gilmar Ferreira et al. Curso de Direito Constitucional. 5. ed. São Paulo: Saraiva, 2010, p. 1075ff. 38 Article 102 i “a” and §1° CRFB/88. 39 Article 102 i “b” CRFB/88. 40 Article 102 i “g” CRFB/88. 41 Article 102 ii “a” CRFB/88. 42 See brasil, op. cit., p. 83.

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the one hand, by Brazilians’ rediscovery of their citzenship and of their consciousness of their own rights and, on the other hand, by the fact that the CRFB/88 created new rights and new judicial actions, extending the active legitimacy for the enforcement of interests.43 Consequently, with the promulgation of the CRFB/88, Brazilian Judiciary and, especially, the stf have become powerful and influential institutions in the national, political and judicial scene. In this sense the stf has decided political and social issues of great importance, such as the same-sex stable unions, the party fidelity and the interruption of pregnancy in case of anencephaly, among others. This greater participation of the Judiciary in the resolution of fundamental political and social issues—as a result of its institutional rise because of the national redemocratization process—corresponds to the phenomenon known as “judicialization of social relations” or “judicialization of politics”.44 However, in performing these important constitutional functions, the stf seldom refers to the iahrc’s jurisprudence in the rationale of its decisions,45 as shown in the graphics below:46 43

See Barroso, Luís Roberto. Neoconstitucionalismo e constitucionalização do direito, p. 15. Available at www.luisrobertobarroso.com.br. Accessed on: 30 June 2014. 44 The limits and possibilities of the Judiciary’s democratic legitimacy is a subject intrinsically related to the judicialization of politics and social relations. On the one hand, it is claimed that the Judiciary is not the competent organ to decide over fundamental political and social issues, since its members are not legitimised by the popular vote. On the other hand, it is argued that constitutional courts have a “contramajority” function, that is, the non-elected public bodies and officers have the power to depart or conform the laws enacted by the elected representatives of the people, in order to guarantee the fundamental rights. See ibid., pp. 15–16. 45 References to the conventional norms of the Inter-American Human Rights Law as well as to decisions of foreign courts (like the Supreme Court of the United States and the Federal Constitutional Court of Germany) are more common in the stf’s jurisprudence. So point out Piovesan, Flávia. “Força integradora e catalizadora do sistema interamericano de proteção dos direitos humanos: desafios para a pavimentação de um constitucionalismo regional”. In: Gonzaga, Alvaro de Azevedo; Gonçalves, Antonio Baptista (Coords.). (Re)pensando o Direito. Estudos em homenagem ao Prof. Cláudio De Cicco. São Paulo: Editora Revista dos Tribunais, 2010, pp. 120–121 and Ramos, André de Carvalho. “O Supremo Tribunal Federal e o Direito Internacional dos Direitos Humanos”. In: Sarmento, Daniel; Sarlet, Ingo Wolfgang (Coords.). Direitos Fundamentais e o Supremo Tribunal Federal: balanço e críticas. Rio de Janeiro: Lumen Juris, 2011, pp. 33–35. 46 Source: www.stf.gov.br. Abbreviations: ac- Civil Action (“Ação Civil”); adi- Direct Action of Unconstitutionality (“Ação Direta de Inconstitucionalidade”); adpf- Allegation of Disobedience of Fundamental Precept (“Ação de Descumprimento de Preceito Fundamental”); ap- Criminal Action (“Ação Penal”); are- Appeal in Extraordinary Appeal (“Agravo em Recurso Extraordinário”); ext- Extradition (“Extradição”); ms- Writ of Mandamus (“Mandado de Segurança”); pet- Petition (“Petição”); re- Extraordinary

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This section will investigate four selected cases of the stf’s jurisprudence, which deal with constitutional problems that have produced effects both nationally and internationally, namely: a) competence of military justice for civilians; b) university degree requirement for the profession of journalist; c) civil arrest of the unfaithful depositary; and d) reception of 1979 Brazilian Amnesty Law. All these topics were addressed not only by stf but also by iachr. After the analysis of the decisions, the goal is to assess the influence of the Inter-American Human Rights Law on the stf’s jurisprudence, in order to determine if the stf is engaged in the phenomenon described above of the “constitutional cross-fertilization”. a) (In)Competence of Military Justice for Civilians The issue of the military criminal jurisdiction over civilians at times of peace is controversial in stf’s jurisprudence. Thus, on the one hand, there is a series of decisions in which the stf affirms the exceptional character of military crimes committed by civilians at times of peace.47 From this perspective, the trial of a

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Appeal (“Recurso Extraordinário”). The graphics were elaborated by Fellipe Müller on the basis of the collected data in the framework of the research group “The Cross-Fertilization Process in the Brazilian Supreme Federal Court” funded by Ibmec-RJ (Brazil). This research aims to analyze quantitatively and qualitatively the use by the stf of decisions of the main international human rights courts, after the promulgation of the CRFB/88. For example, criminal contempt against a military, falsification of document and use of alleged false document, provided that the fact offends against the military administration and service, and crimes against property under the military administration. These crimes

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military crime committed by a civilian before the Military Justice is only admitted, when it affects legal goods and interests directly related to typical functions of the Armed Forces, which are foreseen in article 142, caput, CRFB/88.48 It has so been decided in several judgments,49 among which worthy of special mention is the stf’s decision in the hc N° 112.936 of 5 February 2013, because of its current relevance. It was about an alleged crime of contempt against a military, which occurred in a strange environment for the Armed Forces administration, namely, the performance of law enforcement and street patrolling activities in the process of occupation and pacification of communities in the Alemão and Penha Complex in Rio de Janeiro.50 In this case, the stf granted the writ of hc based on the correct following argument: “it does not fall within the federal military criminal jurisdiction the prosecution of civilians, at times of peace, for alleged crimes committed by them in a strange environment to the military administration and for alleged crimes committed against military of the Armed Forces in the context of

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are foreseen in articles 299, 311, 315 and 404ff of the Brazilian Military Penal Code (Decree Law N° 1.001 of 21 October 1969). For instance, the defence of the Country, the guarantee of the constitutional powers and of law and order. Habeas Corpus (hereinafter, hc) N° 105.348/RS, rapporteur Justice Ayres Britto, 19 October 2010; hc N° 106.171 mc/am, rapporteur Justice Celso de Mello, 16 November 2010; hc N° 106. 171/AM, rapporteur Justice Celso de Mello, 1 March 2011; hc N° 109.544/BA, rapporteur Justice Celso de Mello, 9 August 2011; hc N° 110.237 mc/pa, rapporteur Justice Celso de Mello, 12 September 2011; hc N° 107.731, rapporteur Justice Ayres Britto, 13 September 2011; hc N° 110.274, rapporteur Justice Gilmar Mendes, 14 September 2011; hc N° 110.143 mc/rs, rapporteur Justice Luiz Fux, 27 March 2012; hc N° 110.122 mc/sc, rapporteur Justice Luiz Fux, 27 March 2012; hc N° 113.167 mc/sp, rapporteur Justice Luiz Fux, 18 April 2012; hc N° 113.477 mc/ce, rapporteur Dias Toffoli, 7 May 2012; hc N° 105.256/PR, rapporteur Justice Celso de Mello, 12 June 2012; hc N° 114.559 mc/rs, rapporteur Justice Luiz Fux, 13 September 2012; hc N° 115.181 mc/ba, rapporteur Justice Luiz Fux, 19 September 2012; hc N° 115.912 mc/ba, rapporteur Justice Celso de Mello, 18 December 2012; hc N° 115.433 mc/sc, rapporteur Justice Celso de Mello, 18 December 2012; hc N° 115. 549 mc/ba, rapporteur Justice Celso de Mello, 4 February 2013; hc N° 112.936/RJ, rapporteur Justice Celso de Mello, 5 February 2013; hc N° 110.237/PA, rapporteur Justice Celso de Mello, 19 February 2013; hc N° 118.160 mc/ce, rapporteur Justice Luiz Fux, 11 June 2013; hc N° 119.498/RJ, rapporteur Justice Cármen Lúcia, 18 October 2013; and hc N° 115.549/BA, rapporteur Justice Celso de Mello, 10 June 2014. Under article 144 CRFB/88, public security is exercised by means of the following agencies: i- federal police; ii- federal highway police; iii- federal railway police; iv- civil polices; v- military polices and military fire brigades. It means, public security is not a typical activity of the Armed Forces.

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o­ ccupation and pacification of the communities located in the carioca hills, since the role of ostensible policing is a typical activity of public security”.51 It is noteworthy that all decisions previously listed, that recognize the incompetence of the military criminal jurisdiction to process and judge military crimes committed by civilians at times of peace, make reference to the iachr sentence in the Palamara-Iribarne v. Chile Case of 22 November 2005.52 Humberto Palamara-Iribarne was a retired Chilean Navy officer, who at the time of the events was a civil servant hired as contractor by Chilean Navy. In 1992, he wrote a book, based on public access information, on issues related to military intelligence services and the need to harmonize it with certain ethical standards. Because of this, criminal charges were instituted against him before the Military Justice for contempt of authority and breach of military duties. As a result, the Chilean Military Justice arrested Mr. Palamara-Iribarne and prohibited the publication of his book, on the grounds that it affected “national security and national defense”. Consequently, Mr. Palamara-Iribarne not only lost his job and all the investment poured into the book priting, but also was forced to move away from his family. On January 1996 a petition was filed before the Commission, which, on April 2004, filed an application before the iachr against Chile. On November 2005 the iachr decided that Chile had violated several rights of Mr. PalamaraIribarne, such as freedom of expression, property and judicial guarantees (articles 13, 21 and 8 of the Convention, respectively). Furthermore, the iachr ordered Chile to adapt its domestic law to the international standards on military criminal jurisdiction, so that military justice will operate as an exceptional system applicable to the military regarding crimed committed in the exercise of their duties.53 51 52

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See Supremo Tribunal Federal, 1ª Turma, hc N° 112.936/RJ, Rapporteur Minister Celso de Mello, 5 February 2013, p. 2. Available at www.stf.gov.br. Accessed on: 30 June 2014. It is also important to mention that there are decisions in the stf jurisprudence which recognize the incompetence of the Military Criminal Justice for civilians, but make no reference to the iachr sentence in the Palamara Iribarne v. Chile Case. See, for instance, hc N° 112.863 mc/rj, rapporteur Justice Cezar Peluso, 5 June 2012; hc N° 112.936 mc/rj, rapporteur Justice Celso de Mello, 29 June 2012; hc N° 115.671, rapporteur Justice Dias Toffoli, 8 November 2012; hc N° 115.389 mc/am, rapporteur Justice Celso de Mello, 14 November 2012; hc N° 116.339, rapporteur Justice Rosa Weber, 19 December 2012. “As to the need to bring its domestic law in line with the international standards on military criminal jurisdiction , it is the Court’s view that, should the State consider that having military criminal courts is in fact necessary, their jurisdiction must be restricted to cases concerning crimes of a strictly military nature committed by military personnel in active

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On the other hand, there are several stf’s decisions that recognize the competence of the Military Justice, based on Article 9 of the Military Penal Code, to institute legal proceeding and trial against civilians accused of contempt and disobedience committed against military of the Armed Forces in service performance of surveillance, guarantee and preservation of the public order.54 These decisions admit that the trial of civilians by military tribunals, at times of peace, is exceptional, but prescribed by law and declared constitutional by the stf. Thus, in typical activity of public security, such as the ostensible policing in the process of occupation and pacification of the carioca communities, the Armed Forces shall enjoy this institutional protection. Therefore it is concluded that the stf is not unified regarding the issue of the military criminal jurisdiction over civilians at times of peace. As explained above, for identical situations (contempt committed by a civilian against a military in the context of occupation and pacification of the carioca communities) the Justices assume different positions. A group of Justices, based on the iachr jurisprudence, restrict the possibilities of competence of the Military Justice for civilians to the cases, in which the act affects legal goods and interests directly related to typical functions of the Armed Forces (Article 142, caput, CRFB/88). In turn, another group of Justices, without making reference to the iachr jurisprudence, submit civilians to the military criminal jurisdiction, when they commit a crime against a military in the service performance of law enforcement and street patrolling, even though these tasks are not typical activities of the Armed Forces. b) University Degree Requirement for the Profession of Journalist In 2001 the Brazilian Federal Prosecutor’s Office initiated a public civil action against the Union, in order to prevent that the Ministry of Labour and

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service only. Therefore, through its own domestic laws, the State is required to set limits to the subject-matter and personal jurisdiction of military courts, so that under no circumstance may a civilian be subjected to the jurisdiction of military courts”. See iachr Court. Palamara-Iribarne v. Chile case, judgment of 22 November 2005, § 256. Available at www.corteidh.or.cr. Accessed on: 30 June 2014. So was decided in the following cases: hc N° 96.949/RS, rapporteur Justice Ayres Britto, 26 April 2011; hc N° 112.919 mc/rj, rapporteur Justice Gilmar Mendes, 24 May 2012; rhc N° 115.788 mc/rj, rapporteur Justice Gilmar Mendes, 20 November 2012; hc N° 113.128 mc/rj, rapporteur Justice Luís Roberto Barroso, 10 October 2013; hc N° 113.128/RJ, rapporteur Justice Luís Roberto Barroso, 10 December 2013; ARE N° 800.119/DF, rapporteur Justice Luís Roberto Barroso, 27 March 2014; ARE N° 796.829/DF, rapporteur Justice Luís Roberto Barroso, 27 March 2014; and hc N° 112.932/RJ, rapporteur Justice Luís Roberto Barroso, 13 May 2014.

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Employment required the university degree in journalism for the exercise of the journalistic profession, according to article 4° v of the Decree-Law N° 972 of 17 October 1969. The central argument of the Federal Prosecutor’s Office was that such requirement breaches the fundamental right of freedom of expression, which is guaranteed under articles 5° ix and 220 CRFB/88. At first instance the complaint was upheld. Then, as a result of the ex officio review and others legal remedies, the case was taken to the respective Federal Regional Court, which accepted the Union’s appeals. Because of this, the Federal Prosecutor’s Office brought an extraordinary appeal before the stf, advocating the contrariety of the requirement of article 4° v of the Decree-Law N° 972/1969 to the CRFB/88 (re N° 511.961/SP, rapporteur Justice Gilmar Mendes, 17 June 2009).55 The majority of the Justices followed the vote of the rapporteur for the incompatibility of the university degree in journalism and professional ­registration at the Ministry of Labour and Employment requirements as conditions for the exercise of the journalistic profession. Firstly, the Justices pointed out that the Decree-Law N° 972/1969 was enacted under the auspices of the military and dictatorial regime, with the clear intention to keep intellectuals and artists opposed to the regime away from the media. For this reason, the referred Decree-Law does not meet the values of the CRFB/88, which enshrines the freedom of expression as a fundamental right.56 The understanding was that the inalienable right to communicate should be guaranteed to everyone, and not only trained and graduated journalists. According to the majority of the Justices, the profession of journalism could always be well exercised, regardless the university degree. Besides, journalism is a profession that does not demand specific professional qualifications, which are vital for the collectivity’s protection.57 Therefore, the university degree requirement would restrain disproportionately the journalistic activity, what would result, consequently, in the control over the media itself.58 55 56

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See Ramos, 2009, op. cit., pp. 825–826. See Supremo Tribunal Federal, Tribunal Pleno, re N° 511.961/SP, Rapporteur Minister Gilmar Mendes, 17 June 2009, p. 784. Available at www.stf.gov.br. Accessed on: 30 June 2014. Ibid., pp. 813–815. “The journalism is a differentiated profession because of its close bond to the full exercise of freedoms of expression and information. […] The journalism and the freedom of expression are, therefore, activities which are linked to their very nature and that’s why they cannot be thought and dealt with separately. […] In the field of the journalistic profession, there is no space for state regulation in relation to the professional qualifications. Article 5° iv, ix, xiv, and article 220 do not allow the control, by the State, regarding the

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Along with these considerations, the rapporteur, Justice Gilmar Mendes, indicated that the requirement of Article 4° v of the Decree-Law N° 972/1969 infringes the freedoms of thought and expression laid down in article 13 of the Convention. He supports his argument, by invoking the iachr’s position embodied in the Advisory Opinion N° 5 of 13 November 1985. On July 1985 the Government of Costa Rica submitted to the iachr an advisory opinion request concerning the compatibility of Law N° 4.420 of 22 September 1969 of Costa Rica, which determined the compulsory membership in an association for the practice of journalism, with Article 13 of the Convention (freedom of thought and expression). On this occasion, the iachr clarified that the obligation of professional registration in a collegiate body for journalists, as well as the requirement of a particular university degree as condition for the exercise of the journalistic profession offend the freedom of speech. According to the iachr, the freedoms of speech and information are indispensable to the rule of law and, consequently, such regulations (obligation of registration and university degree requirement) are unlawful and violate the Convention.59 In his vote within re N° 511.961/SP, Justice Gilmar Mendes has placed great emphasis on the Advisory Opinion N° 5 of the iachr, by transcribing a large part of its content. Indeed, the referred Opinion was used by Justice Mendes as one of the main grounds to abolish the university degree requirement for the exercise of the profession of journalism in Brazil. Thus, this case (re N° 511.961/SP) constitutes a good example of constructive dialogue between stf and iachr, in the extent that the Brazilian court invoked an understanding of the InterAmerican judges, in order to guarantee the effectiveness of fundamental rights at domestic level.

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access and exercise of the journalistic profession. Any type of control of this kind, which interferes with the freedom to exercise the profession of journalism, constitutes prior control that […] characterizes preventive censorship of freedom of expression and information, which is expressly forbidden by article 5° ix CRFB/88.” [free translation of the authors]. See Supremo Tribunal Federal, re N° 511.961/SP, op. cit., pp. 758–762. “Pursuant to these provisions and leaving aside some exceptions not here relevant, Law N° 4.420 authorizes individuals to engage in the remunerated practice of journalism only of they are members of the Association. It also provides that only individuals who are graduates of a particular university have a right to join the association. This regime conflicts with the Convention in that it restricts, in a manner not authorized under Article 13(2), the right to freedom of thought and expression that belongs to each individual. Moreover, it also violates the Convention because it unduly limits the right of the public at large to receive information from any source without interference.” See iachr Court. Advisory Opinion OC-5/85 of 13 November 1985, §84. Available at www.corteidh.or.cr. Accessed on: 30 June 2014 and ramos, 2009, op. cit., p. 825.

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c) Civil Arrest of the Unfaithful Depositary An interesting case of openness of the stf to the Inter-American Human Rights Law relates to the conflict between Article 7.7 of the Convention60 and Article 5° lxvii CRFB/88.61 Whereas the constitutional provision allows the civil imprisonment in the case of an unfaithful trustee, the international one prohibits it. Such conflict was the central question of the following rulings: re N° 466.343/SP, rapporteur Justice Cezar Peluso, 3 December 2008; re N° 349.703/RS, rapporteur Justice Gilmar Mendes, 3 December 2008; and hc N° 87.585/TO, rapporteur Justice Marco Aurélio, 3 December 2008. In these cases the stf, by majority of votes, decided to give international human rights treaties a privileged normative status in relation to the one given to traditional international treaties. Hence, the stf revised its early jurisprudence, which, since 1977, had established the thesis of normative parity between international treaties and ordinary legislation.62 In this sense, the stf resolved that international human rights treaties, when approved according to Article 5° §3° CRFB/88 (introduced by Constitutional Amendment N° 45 of 30 December 2004),63 will have constitutional hierarchy. In turn, international human rights treaties, when not approved according to Article 5° §3° CRFB/88, will have supralegal hierarchy (below the Constitution, but above ordinary legislation). And, finally, other international treaties (not related to human rights) are at the same level of hierarchy with ordinary laws.64 60

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Article 7.7 of the Convention: “No one shall be detained for debt. This principle shall not limit the order of a contempt judicial authority issued for nonfulfillment of duties of support.” See Organization of American States, op. cit. Article 5° lxvii CRFB/88: “There shall be no civil imprisonment for indebtedness except in the case of a person responsible for voluntary and inexcusable default of alimony obligation and in the case of an unfaithful trustee.” See brasil, op. cit., p. 19. In addition to the CRFB/88, the civil imprisonment of the unfaithful depositary is foreseen in the infraconstitutional legislation, namely, in article 4° of Decree N° 911 of 1 October 1969 and in article 652 of Law N° 10.406 of 10 January 2002 (the Brazilian Civil Code). See Piovesan, 2010, op. cit., p. 120. This constitutional provision determines an identical procedure as to the one for the approval of constitutional amendments. So provides article 5° §3° CRFB/88: “International human rights treaties and conventions which are approved in each House of the National Congress, in two rounds of voting, by three fifths of the votes of the respective members shall be equivalent to constitutional amendments.” See brasil, op. cit., p. 20. It should be highlighted the overruled votes of Justices Celso de Mello, Cezar Peluso, Eros Grau and Ellen Gracie, who argued for the constitutional hierarchy of all international human rights treaties, whether approved or not approved according to article 5° §3° CRFB/88. They grounded their position in the fact that CRFB/88 establishes the prevalence

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The stf has clarified that CRFB/88 just admitted the civil imprisonment of the unfaithful depositary. Thus, the infraconstitutional legislation could decide freely with regard to the permission or prohibition and, in that last case, the Convention would prevail over the Brazilian Civil Code.65 Thereby, in face of the Constitution’s supremacy over international treaties, article 5° lxvii was not revoked by the incorporation of the Convention into Brazilian law. But it has rather lost its applicability because of the “paralyzing effect” of international human rights treaties in relation to infraconstitutional legislation, which regulates the subject.66 As a result, the doctrine qualifies the stf’s decision in re N° 466.343/SP, re N° 349.703/RS and hc N° 87.585/TO as paradigmatic, since it values not only the Inter-American, but the entire International Human Rights Law, to the extent that in this decision the stf recognizes a privileged position to international human rights treaties in Brazilian legal order.67 d) Reception of 1979 Brazilian Amnesty Law In October 2008 the Federal Council of the Brazilian Bar Association (oab) brought an allegation of disobedience of fundamental precept before the stf (adpf N° 153/DF, rapporteur Justice Eros Grau, 29 April 2010), whereby it requested the Court to give an interpretation in conformity with the Constitution to Brazilian Amnesty Law (Law N° 6.683 of 28 August 1979). The objective was that the stf declared that the amnesty given by this Law to political crimes or derived crimes to these does not extend to common law crimes carried out by agents of the repression against the political opposition during the military regime.68

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of human rights (article 4° ii) and recognizes the constitutional status of international human rights treaties (article 5° §2°). Thus, international human rights treaties, even if previous to the Constitutional Amendment N° 45/2004, would be considered constitutional norms. This position is also backed up by the most respected doctrine on the subject. For a full analysis on the debate about the normative hierarchy of international treaties in stf see ramos, 2011, op. cit., p. 9 ff. See Neves, op. cit., p. 146. Supremo Tribunal Federal, Tribunal Pleno, re N° 466.343/SP, Rapporteur Minister Cezar Peluso, 3 December 2008, pp. 1160–1161. Available at www.stf.gov.br. Accessed on: 30 June 2014. See Piovesan, 2010, op. cit., p. 120. The applicant argued that those common law crimes—such as torture, rape and murder—could not be covered by the institute of connection between crimes. Besides, such agents could not have committed political crimes—those practiced against the public order or the national security—because they were precisely responsible to combat them.

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On April 2010 the stf, by majority of votes, decided for the dismissal of the case, by declaring constitutional the interpretation, according to which the Brazilian Amnesty Law has represented a broad, general and unrestricted forgiveness, as well as an essencial precondition for the reconciliation and redemocratization process in Brazil. In accordance with the rapporteur’s vote, Justice Eros Grau, it makes no sense to question the reception of the Amnesty Law by CRFB/88. That’s because this Law was ratified by Constitutional Amendment N° 26 of 27 November 1985, which at that time was already manifestation of the original constituent power. Thus, the Amnesty Law of 1979 was integrated into the new constitutional order that began to fully operate with the adoption of the new Constitution on 5 October 1988. Finally, he concludes that the Amnesty Law of 1979 does not belong to the previous constitutional order, but rather is incorporated to the current one and, therefore, its compatibility with CRFB/88 is unquestionable.69 For the purpose of this chapter, it is worth highlighting the dissenting vote of Justice Ricardo Lewandowski based on important precedents of the iachr, namely the Goiburu and Others v. Paraguay case; the Ximenes Lopes v. Brasil case; the Baldeón Garcia v. Peru case; the Pueblo Bello Massacre v. Colombia case; and the Mapiripán Massacre v. Colombia case. In these cases, as Justice Lewandowski indicated, the iachr stated that the States Party to the Convention have the obligation to investigate, judge and punish the gross violations of human rights, pursuant to Article 1.1 of the Convention. The noncompliance with this obligation constitute a breach of the Convention and, consequently, generating the international responsibility of the State. The iachr jurisprudence quoted above was one of the reasons of Justice Lewandowski’s decision for the partial upholding of the case. He decided to give an interpretation in conformity with the Constitution to Brazilian Amnesty Law, so that the State agents are not automatically covered by the amnesty granted by this Law, but the judge should rather undertake a case-bycase approach.70

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The applicant also alleged the violation of the following constitutional principles: isonomy (article 5°, caput and xxxix); non-concealment of the truth or the right of information (article 5° xxxiii); democracy and Republic (article 1°); and human dignity (article 1° iii and article 5° xliii). For a full description of adpf N° 153 case see ceia, op. cit., p. 138 ff. Supremo Tribunal Federal, Tribunal Pleno, adpf N° 153/DF, Rapporteur Minister Eros Grau, 29 April 2010, pp. 43–44. Available at www.stf.gov.br. Accessed on: 30 June 2014. Supremo Tribunal Federal, adpf N° 153, op. cit., pp. 129–130.

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Likewise, Justice Celso de Mello invoked relevant precedents of the iachr in his vote within adpf N° 153. They are the following cases: Barrios Altos v. Peru; Loayza Tamayo v. Peru; and Almonacid Arellano and Others v. Chile. He pointed out that in these rulings the iachr proclaimed the absolute incompatibility with the Convention of national laws that granted amnesty only to State agents, the so-called “self-amnesty laws”. This is because the Convention does not tolerate the criminal forgetfulness of gross violations of human rights neither legitimate national laws that protect criminals who infringed fundamental values assured by the Convention.71 However, according to Justice Celso de Mello, the Brazilian Amnesty Law has a bilateral character, because it benefits all parties involved: opponents of the regime and State Agents. Hence, this Law cannot be qualified as a “selfamnesty law” and, consequently, it would be unacceptable, within the case in question, to invoke the mentioned iachr’s precedents. Based on this and other considerations Justice Celso de Mello dismissed the case.72 With due respect to Honourable Justice Celso de Mello, it should be stressed that iachr does not restrict its jurisprudence to the so-called “self-amnesty laws”. So the iachr itself affirmed in the sentence of the case Gomes Lund and Others v. Brazil: “In regard to the that argued by the parties regarding whether the case deals with an amnesty, self-amnesty, or “political agreement”, the Court notes […] that the non-compatibility with the Convention includes amnesties of serious human rights violations and is not limited to those which are denominated, self-amnesties.”73 Thus, the non-compatibility of amnesty laws with the Convention does not stem from a formal question, but rather from the material aspect, namely the 71

Ibid., p. 183. So states the iachr in the case of Barrios Altos v. Peru: “This Court considers that all amnesty provisions, provisions on prescription and the establishment of measures designed to eliminate responsibility are inadmissible, because they are intended to prevent the investigation and punishment of those responsible for serious human rights violations such as torture, extrajudicial, summary or arbitrary execution and forced disappearance, all of them prohibited because they violate non-derogable rights recognized by international human rights law.” See iachr Court. Barrios Altos v. Peru case, judgment of 14 March 2001, §41. Available at www.corteidh.or.cr. Accessed on: 30 June 2014. 72 Supremo Tribunal Federal, adpf N° 153, op. cit., p. 184. 73 See iachr Court. Gomes Lund and Others v. Brazil case, judgment of 24 November 2010, §175. Available at www.corteidh.or.cr. Accessed on: 30 June 2014. In this case, Brazil was considered responsible for the enforced disappearance of 70 persons, as a result of the operation of the Brazilian Army between 1972 and 1975, whose purpose was to eradicate the Araguaia Guerrilla, in the context of the military dictatorship in Brazil. For a complete description of the Gomes Lund and Ohers v. Brazil case see ceia, op. cit., p. 124 ff.

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non-punishment of serious violations of human rights committed by military regimes. As a result, in Gomes Lund and Others v. Brazil case, the Court declared that: “The provisions of the Brazilian Amnesty Law that prevent the investigation and punishment of serious human rights violations are not compatible with the American Convention, lack legal effect, and cannot continue as obstacles for the investigation of the facts of the present case, neither for the identification and punishment of those responsible, nor can they have equal or similar impact regarding other serious violations of human rights enshrined in the American Convention which occurred in Brazil.”74 The conclusion is that in the judgment on the merits of adpf N° 153 the stf has lost the great opportunity to bring its jurisprudence into line with the settled case-law of the iachr. In disregarding the iachr’s interpretation concerning the compatibility of national amnesty laws with the Convention, the stf did not recognize the invalidity of Brazilian Amnesty Law in the view of the State obligations undertaken within the Convention. Such stf’s behaviour resulted in the international responsibility of Brazil in the case of Gomes Lund before the iachr. This shows the great relevance of a constructive dialogue between national constitutional courts and the iachr, in order to prevent the State responsibility in future international contentious issues and also to guarantee the effectiveness of human rights in domestic level. Conclusion Nowadays, due to the increasing integration of the international society, constitutional problems concerning fundamental rights protection and State power limitation became relevant to other jurisdictions beyond the national one. This phenomenon is called by the specialized doctrine “transconstitutionalism”. The extent to which the same constitutional problem may be raised before national, international, supranational or transnational courts, it requires a cooperation—or put better—a “conversation” between these bodies. From transconstitutionalism results a constitutional cross-fertilization among courts, which is a rich and dynamic dialogue process between judges 74 See iachr Court. Gomes Lund and Others v. Brazil case, op. cit., p. 113. On May 2014 the Party for Socialism and Freedom (psol) has submitted the adpf N° 320 before the stf, requesting the Court to express itself on the enforceability of the iachr sentence in the Gomes Lund case, considering that this ruling states that the Brazilian Amnesty Law is incompatible with the Convention. The claim is still awaiting judgment in stf.

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and courts around the world, that offers them helpful information and perspectives, in order to tackle a particular constitutional problem more creatively or with greater insight. The increasing judicial cross-fertilization creates a “global jurisprudence” that refers to the existence of active transjudicial dialogue, where principles of pluralism and legitimate difference prevail. So that judges or courts that failure to participate in this dialogue take the risk to reduce strongly their influence in the global legal system. This chapter examined four selected cases of the stf’s jurisprudence, which deal with constitutional problems that have produced effects both nationally and internationally, in order to assess the influence of Inter-American Human Rights Law on the stf’s jurisprudence. The objective was to determine if the stf is engaged in the “constitutional cross-fertilization” process, in particular, in a constructive dialogue with the iachr. Firstly, it is to conclude that Inter-American Human Rights Law does not exercise a great influence on the stf’s jurisprudence yet. Although references to the conventional norms of the Inter-American Human Rights Law are common in stf jurisprudence, this Court seldom refers to the iahrc’s jurisprudence in the rationale of its decisions. Within the analysis of the selected rulings cases of openness can be found, but also isolationism by the stf in relation to Inter-American Human Rights Law. In the ruling concerning the abolition of the civil arrest of the unfaithful depositary the stf opened itself to Inter-American Human Rights Law, by granting not only the Convention but also all international human rights treaties a special position in Brazilian law. Moreover, the stf aligned itself with the iachr’s settled position based on the general principle of international law, that no State Party may invoke the provisions of its internal law as justification to not comply with the Convention. Similarly, the case of the end of the university degree requirement for the profession of journalist is a good example of constructive conversation between the stf and the iachr. In this case the stf invoked the iachr’s Advisory Opinion N° 5, in order to change the legislation in force and enlarge the exercise of fundamental rights at the domestic level. Furthermore, the stf’s decision in this case has its importance in the context of transitional justice in Brazil.75 In determining the non-reception of Article 4° v of Decree-Law 75

Transitional Justice consists of a process of investigations, trials and reparations which take place after the change of a political regime to another. Its objectives are: i) to offer material and moral compensation to the victims of arbitrary violence by the State; ii) to pacify the society, by eliminating tensions between political groups that continue to

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N° 972/1969 the stf has demonstrated a clear break with the authoritarian legislation of the military regime. On the other hand, the case of adpf N° 153 is an example of stf’s isolationism regarding its relationship with the iachr. In this ruling the iachr jurisprudence was disregarded and misused by the majority of the Justice, leading to Brazil’s conviction in the iachr within the Gomes Lund case. Moreover, unlike its performance in the case of re N° 511.961/SP, the stf in adpf N° 153 lost the great opportunity to contribute once again to the promotion of transitional justice in Brazil. In this sense, the stf, pursuant to iachr’s jurisprudence, could declare the Brazilian amnesty law incompatible with the Convention and, consequently, make feasible the trial and punishment of State agents responsible for perpetrating serious human rights violations during the military regime. Finally, with regard to the rulings concerning the competence of Military Justice for civilians, the stf has been divided over this subject. A group of Justices, based on iachr’s jurisprudence in the case of Palamara-Iribarne v. Chile, defends a restrictive interpretation, according to which the submission of civilians to Military Justice is only admitted, when the action affects legal goods and interests directly related to typical functions of the Armed Forces. On the contrary, another group of Justices rejects iachr’s jurisprudence, by admitting the judgment of military crimes committed by civilians before the Military Justice even in the case of performance of non typical activities of the Armed Forces. Actually, neither of these groups of Justices fully apply iachr’s position in Palamara-Iribarne case, under which “under no circumstance may a civilian be subjected to the jurisdiction of military courts.” Hereby, the stf also fails to promote transitional justice in Brazil, by not ending this remnant of the military dictatorship, when the rule was the submission of civilians to the jurisdiction of Military Criminal Justice. Based on these findings and other theoretical perspectives from the literature, the chapter concludes that in Brazil a domestic legal, political and social change is possible through international human rights law. However, this desirable influence depends largely on stf’s willingness to participate in an active transjudicial dialogue with other courts. In this sense, the stf should be support the previous regime and the forces related to the new government; iii) to take political measures to prevent that authoritarian experiences happen again. It requires institutional and legislative reforms, as well as public awareness and information campaigns. See Dimoulis, Dimitri. O caso dos denunciantes invejosos. 9. ed. São Paulo: Revista dos Tribunais, 2014, pp. 10–11.

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encouraged to use more often international human rights courts’ precedents in its jurisprudence. That is because the stf alongside these courts have the same mission, namely the promotion of human dignity. With particular regard to Inter-American Human Rights Law, the Convention’s norms and iachr’s jurisprudence are important interpretation tools for national courts to determine the content and extent of fundamental rights. That is why it is necessary that stf, when confronted with a transconstitutional problem in fundamental rights protection, makes use of InterAmerican Human Rights Law. This is not only in order to prevent the State’s international responsibility—since the iachr fixes the interpretation of Brazil’s international obligations under the Convention—but also to incorporate international standards for human rights protection at the domestic level. Ultimately, it is essential to promote in Brazilian law a greater approximation between national and international jurisdictions in the field of human rights protection. References Barroso, Luís Roberto. Neoconstitucionalismo e constitucionalização do direito, p. 15. Available at www.luisrobertobarroso.com.br. Accessed on: 30 June 2014, 2005. Brasil. Constitution of the Federative Republic of Brazil. 3. ed. Brasília: Chamber of Deputies, Documentation and Information Center, 2010. Ceia, Eleonora Mesquita. A jurisprudência da Corte Interamericana de Direitos Humanos e o Desenvolvimento da Proteção dos Direitos Humanos no Brasil. Revista da EMERJ, Rio de Janeiro, v. 16, n. 61, 2013, pp. 113–152. Dimoulis, Dimitri. O caso dos denunciantes invejosos. 9. ed. São Paulo: Revista dos Tribunais, 2014. Godinho, Fabiana de Oliveira. A proteção internacional dos direitos humanos. Belo Horizonte: Del Rey, 2006. IACHR Court. Advisory Opinion OC-5/85 of 13 November 1985. Available at www .corteidh.or.cr. Accessed on: 30 June 2014, 1985. IACHR Court. Barrios Altos v. Peru case, judgment of 14 March 2001. Available at www .corteidh.or.cr. Accessed on: 30 June 2014, 2001. IACHR Court. Palamara-Iribarne v. Chile case, judgment of 22 November 2005. Available at www.corteidh.or.cr. Accessed on: 30 June 2014, 2005. IACHR Court. Gomes Lund and Others v. Brazil case, judgment of 24 November 2010. Available at www.corteidh.or.cr. Accessed on: 30 June 2014, 2010. Lage, Délber Andrade. A jurisdicionalização do direito internacional. Belo Horizonte: Del Rey, 2009.

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Mendes, Gilmar Ferreira et al. Curso de Direito Constitucional. 5. ed. São Paulo: Saraiva, 2010. Organization of American States, American Convention on Human Rights. “Pact of San Jose, Costa Rica” (B-32). Available at http://www.oas.org. Accessed on: 30 June 2014, 1969. Piovesan, Flávia. Direitos Humanos e Direito Constitucional Internacional. 7. ed. São Paulo: Saraiva, 2006a. Piovesan, Flávia. Direitos Humanos e Justiça Internacional: um estudo comparativo dos sistemas regionais europeu, interamericano e africano. São Paulo: Saraiva, 2006b. Piovesan, Flávia. “Força integradora e catalizadora do sistema interamericano de proteção dos direitos humanos: desafios para a pavimentação de um constitucionalismo regional”. In: Gonzaga, Alvaro de Azevedo; Gonçalves, Antonio Baptista (Coords.). (Re)pensando o Direito. Estudos em homenagem ao Prof. Cláudio De Cicco. São Paulo: Editora Revista dos Tribunais, 2010, pp. 111–123. Ramos, André de Carvalho. “O Diálogo das Cortes: O Supremo Tribunal Federal e a Corte Interamericana de Direitos Humanos”. In: Amaral Junior, Alberto do; Jubilut, Liliana Lyra. O STF e o Direito Internacional dos Direitos Humanos. São Paulo: Quartier Latin, 2009, 805–850. Ramos, André de Carvalho. “O Supremo Tribunal Federal e o Direito Internacional dos Direitos Humanos”. In: SARMENTO, Daniel; SARLET, Ingo Wolfgang (Coords.). Direitos Fundamentais e o Supremo Tribunal Federal: balanço e críticas. Rio de Janeiro: Lumen Juris, 2011, pp. 3–36. Slaughter, Anne-Marie. A new world order. Princeton: Princeton University Press, 2004. Supremo Tribunal Federal, Tribunal Pleno, RE N° 466.343/SP, Relatoria do Ministro Cezar Peluso, 3 de dezembro de 2008. Inteiro Teor do Acórdão. Available at www.stf .gov.br. Accessed on: 30 June 2014. Supremo Tribunal Federal, Tribunal Pleno, RE N° 511.961/SP, Relatoria do Ministro Gilmar Mendes, 17 de junho de 2009. Inteiro Teor do Acórdão. Available at www.stf .gov.br. Accessed on: 30 June 2014. Supremo Tribunal Federal, Tribunal Pleno, ADPF N° 153/DF, Relatoria do Ministro Eros Grau, 29 de abril de 2010. Inteiro Teor do Acórdão. Available at www.stf.gov.br. Accessed on: 30 June 2014. Supremo Tribunal Federal, 1ª Turma, HC N° 112.936/RJ, Relatoria do Ministro Celso de Mello, 5 de fevereiro de 2013. Inteiro Teor do Acórdão. Available at www.stf.gov.br. Accessed on: 30 June 2014. Trindade, Antônio Augusto Cançado. A proteção dos direitos humanos e o Brasil (1948–1997): as primeiras cinco décadas. Brasília: Editora da Universidade de Brasília, 1998.

chapter 12

Comparing and Discussing the Different Approaches to Remedies for Child Victims before the European Court of Human Rights and the Inter-American Court of Human Rights Francesca Capone 1

Introduction and Preliminary Remarks

According to Tomuschat ‘Few would argue that persons suffering a grave breach of their human rights should not have a right to full reparation’ and the other remedies in place within the existing international legal framework.1 Even fewer would argue that child victims, notably among the most vulnerable groups of victims, should not be awarded prompt and adequate remedies for the harm suffered. Since the approval by the un General Assembly (‘General Assembly’) in 2005 of the Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights and Serious Violations of International Humanitarian Law (‘Van Boven-Bassiouni Principles and Guidelines’ or ‘Basic Principles and Guidelines’) a lot of emphasis has been placed on the existence of individuals’ remedy and reparation claims under international law.2 The legal consequences arising from gross and serious violations of International Human Rights Law (‘ihrl’) and International Humanitarian Law (‘ihl’), which, under certain circumstances, may amount to crimes under international law,3 are very specific: universal jurisdiction, the non-applicability of statutes of limitations, and, in

1 C. Tomuschat, ‘Reparation for Victims of Grave Human Rights Violations’, in Tulane Journal of International and Comparative Law, 10(2002): 157–184. 2 un General Assembly’s Resolution A/RES/60/147, Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law. Available at: http://daccess-dds-ny .un.org/doc/UNDOC/GEN/N05/496/42/PDF/N0549642.pdf?OpenElement. 3 Report of the International Commission of Inquiry on Darfur to the United Nations Secretary-General Pursuant to Security Council Resolution 1564 of 18 September 2004, at Para 175.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_013

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particular, the right to a judicial remedy.4 According to the Basic Principles and Guidelines the remedies provided for victims of ihrl and ihl violations are three, namely (a) Equal and effective access to justice; (b) Adequate, effective and prompt reparation for the harm suffered; (c) Access to relevant information concerning violations and reparation mechanisms.5 The present chapter will analyse and discuss how and to what extent the three remedies listed in the Basic Principles and Guidelines can be, and have been, accessed by child victims before two of the existing regional human rights judicial bodies,6 i.e. the European Court of Human Rights (‘ECtHR’) and the Inter-American Court of Human Rights (‘IACtHR’). More in detail the chapter will first shed light on the key concepts adopted, secondly it will focus on the three remedies and their implementation before the regional human rights courts considered and finally it will draw some conclusive remarks highlighting the main differences and the possible ways to improve the situation of child victims in the regional human rights justice systems. 2

Definitions and Key Concepts Adopted

From the outset an important caveat is needed, children can play a role in judicial settings as perpetrators, witnesses and victims, the focus of this contribution is on the latter category and the access to remedies as victims of ihrl violations, therefore all the considerations related to the other situations will not be addressed here. As stated above the first goal of the present paper is to define the key concepts adopted. Article 1 of the un Convention on the Rights of the Child (‘crc’) establishes that ‘a child means every human being below 4 See generally C.J. Tams, Enforcing Obligations Erga Omnes in International Law (Cambridge: Cambridge University Press, 2005), see also M.C. Bassiouni(eds), International Criminal Law 3rd edition (Leiden: Martinus Nijhoff Publsihers, 2009), A. Cassese, International Criminal Law (Oxford: Oxford University Press, 2008), F. Capone, ‘Remedies’, (R. Wolfrum eds) Max Planck Encyclopedia of Public International Law, Oxford University Press, 2012. See also ‘A Handbook on the Basic Principles and Guidelines on the Right to a Remedy and Reparation’, Redress, March 2006, which is available at: http://www.redress.org/downloads/publications/ Reparation%20Principles.pdf. 5 See Basic Principles and Guidelines, Principle vii. 6 The African Court on Human and Peoples’ Rights, which was established on 25 January 2004, is not included in the present analysis because at the time of writing, the African Court had not yet rendered a decision awarding reparation. See Redress, Report ‘Reaching for Justice: The Right to Reparation in the African Human Rights System’, October 2013, available at: http://www.redress.org/downloads/publications/1310Reaching%20For%20JusticeFinal.pdf.

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the age of eighteen years unless under the law applicable to the child, majority is attained earlier’.7 This definition has been embraced also at the regional level. In the Inter American human rights system there is no standard definition of the child for legal purposes, therefore both the Inter-American Court of Human Rights and the Inter-American Commission on Human Rights (‘iachr’) have stipulated that the definition of child is based on the provisions of Article 1 of the crc.8 The same criterion has been applied within the European Human Rights system: in particular Article 1 of the European Convention on the Exercise of Children Rights states that it targets everyone who has not yet attained the age of 18 years.9 The crc, alongside its Optional Protocols,10 laid down the main principles that shall guide child victims’ participation in judicial proceedings and which apply in all settings, both national and international. These principles are the primary consideration of the child’s best interests and the right of the child to participate in the proceedings affecting him or her.11 Article 3, paragraph 1, of the crc provides the child with the right to have his or her best interests assessed and taken into account as a primary concern in all actions or decisions that affect him or her, both in the public and private sphere. Despite the broad use of this concept, the “child’s best interests” has been properly defined only through the adoption of the Committee on the Rights of the Child (‘crc Committee’ or ‘the Committee’) General Comment 14, in 2013. According to the Committee, the best interests of the child needs to be interpreted as a dynamic concept that encompasses various issues which are continuously evolving. It should be read as a threefold concept, which entails a substantive right, a fundamental interpretative legal principle and a rule of procedure.12 Article 12 of the crc is represented as one 7 8 9 10

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un General Assembly, Convention on the Rights of the Child, 20 November 1989, United Nations, Treaty Series, vol. 1577, p. 3. Inter-American Court of Human Rights, Juridical Condition and Human Rights of the Child. Advisory opinion OC-17/02 of August 28, 2002. Series A No 17, Chapter v. Council of Europe, European Convention on the Exercise of Children’s Rights, 25 January 1996, ets 160. The United Nations General Assembly in 2000 adopted two Optional Protocols to the Convention on the Rights of the Child to increase the protection of children from involvement in armed conflicts and from sexual exploitation. On 14 April 2014, a third Optional Protocol was adopted, allowing children to bring complaints directly to the Committee on the Rights of the Child. See Article 3 and Article 12 of the crc. See the Committee on the Rights of the Child, General Comment No. 14 (2013) on the right of the child to have his or her best interests taken as a primary consideration (art. 3, para. 1), CRC/C/GC/14 at para 6. See F. Capone ‘Representing Child Victims’ in R.M. Letschert

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of the most innovative of the Convention and it is considered as a unique provision in human rights treaty law.13 Its scope is to address the legal and social status of children, who, on the one hand lack the adults’ full autonomy but, on the other hand, are recognized by the crc as subjects of rights. These two Articles, 3 and 12, appear to be intimately entwined and mutually reinforcing. In particular, Article 3(1) cannot be correctly applied if the requirements of Article 12 are not met. Similarly, by facilitating the essential role of children in all decisions affecting their lives, Article 3(1) is crucial for the implementation of Article 12.14 In a nutshell both Articles are essential to guarantee children’s access to remedies and the enjoyment of the rights thereof, including the right to claim for reparations and the right to be informed about the violations and the reparations mechanisms. The need to place particular emphasis on children’s rights stems from the vulnerability attained to this particular group of victims. According to a Report released by the World Bank vulnerability can be can be generally defined as “the exposure to uninsured risks leading to a socially unacceptable level of well-being’ and it is measured according to physical and emotional development, ability to communicate needs, mobility, size and dependence”.15 From a legal perspective, notwithstanding the fact that this notion has not been clearly defined at either the national or international level, the necessity of special treatment of certain categories of victims is well established and acknowledged.16 In particular vulnerable victims are generally

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eds  Manual for Victims’ Representatives before the International Criminal Court forthcoming. Article 12 of the crc establishes that: 1. States Parties shall assure to the child who is capable of forming his or her own views the right to express those views freely in all matters affecting the child, the views of the child being given due weight in accordance with the age and maturity of the child. 2. For this purpose the child shall in particular be provided the opportunity to be heard in any judicial and administrative proceedings affecting the child, either directly, or through a representative or an appropriate body, in a manner consistent with the procedural Rules of the national law. The Committee on the Rights of the Child, General Comment No. 12 (2009), The right of the child to be heard, CRC/C/GC/12. See J. Hoogeveen, et al. 2005. A Guide to the Analysis of Risk, Vulnerability and Vulnerable Groups, World Bank, available at: http://siteresources.worldbank.org/INTSRM/Publications/ 20316319/RVA.pdf. See the Report ‘Victims in Europe: Implementation of the eu Framework Decision on the standing of victims in the criminal proceedings in the Member States of the European Union’ (Jul 2009) at 39, available at: http://www.bkb.cz/files/uploaded/UserFiles/File/ Project_Victims_Europe_Final_Report.pdf. The Recommendation on Assistance to Crime Victims issued by the Council of Europe affirms that “[S]tates should ensure that victims who are particularly vulnerable,

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recognised as those victims who find it especially difficult to fully exercise their rights due to cultural, physical or psychological reasons.17 Children’s experiences of vulnerability have been described as “multidimensional and different from those of adults”.18 Besides child-specific factors, some authors have highlighted also the existence of “child-intensified vulnerabilities”, which may affect the whole population, but have a stronger impact on children,19 i.e. physical/biological vulnerabilities; dependency related vulnerabilities and institutionalized disadvantage.20 In light of these factors it is a truism to note that child victims, in comparison with adult victims, face a number of additional challenges in the attempt to benefit from the existing legal remedies. At the international level, such challenges tend to augment due to the additional hurdles that characterise the access to human rights mechanisms, including the regional courts. 3

Equal and Effective Access to Justice and Access to Information for Child Victims

According to Francioni “when a right is violated or damage is caused, access to justice is of fundamental importance for the injured individual and it is an essential component of the rule of law”, the author further explains that access to justice shall be defined as “the right to seek a remedy before a court of law or a tribunal which is constituted by law and which can guarantee independence

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either through their personal characteristics or through circumstances of the crime, can benefit from special measures best suited to their situation”. See in particular Art 3.4 of the Recommendation Rec (2006) 8 of the Committee of Ministers to Member States on Assistance to Crime Victims (Adopted 14 Jun 2006), available at: https://wcd.coe.int/ ViewDoc.jsp?id=1011109&Site=CM&BackColorInternet=9999CC&BackColorIntranet=FF BB55&BackColorLogged=FFAC75. See F. Capone et al., Education and the Law of Reparations in Insecurity and Armed Conflict, British Institute of International and Comparative Law (biicl) and Protecting Education in Insecurity and Armed Conflict (peic), London, October 2013. unicef. 2009. Joint Statement on Advancing Child-Sensitive Social Protection. Available at: http://www.unicef.org/aids/files/CSSP_joint_statement_10.16.09.pdf. R. Sabates-Wheeler, S. Devereux and A. Hodges.2009. Taking the Long View: What does a child focus add to social protection? ids Bulletin, 40: 109–119. K. Roetten and R. Sabates-Wheeler, A Child Sensitive Approach to Social Protection: Serving Practical and Strategic Needs, paper presented at the conference “Social Protection for Social Justice”. London, Institute of Development Studies, 13–15 April 2011.

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and impartiality in the application of the law”.21 Despite its recognised relevance, access to justice remains difficult to achieve, also at the regional level where the system in place for the protection and promotion of human rights is quite advanced and based on specific treaty arrangements. With regard to the European human rights system two bodies are responsible for the enforcement of the rights enshrined in the European Convention on Human Rights (‘echr’),22 namely the European Court of Human Rights and the Committee of Ministers.23 Cases before the ECtHR can be brought either by States Parties,24 which can refer alleged breaches by another State Party of the rights contained in the echr,25 or by individuals and non-governmental organisations.26 Applications are admissible if the local remedies have been exhausted27 and within a period of six months from the date on which the final decision was 21

See generally F. Francioni eds, Access to Justice as a Human Right (Oxford: Oxford University Press, 2007). 22 Council of Europe, European Convention for the Protection of Human Rights and Fundamental Freedoms, as amended by Protocols Nos. 11 and 14, 4 November 1950, ets 5. 23 The European Human Rights system formerly included also the European Commission of Human Rights (European Commission), but on 1 November 1998, when Protocol 11 to the echr came into force, the European Commission was abolished and its functions were merged into those of a permanent and full-time European Court. The decisions of the European Court are binding on member states. They are transmitted to the Committee of Ministers of the Council of Europe, which is responsible for supervising their execution. 24 Previously, it was only possible for individuals to submit complaints if the accused state had made a declaration accepting the jurisdiction of the court in such cases. However, since the coming into force of Protocol 11, the individual complaints procedure has become an automatic and compulsory procedure for all states parties to the echr. All 47 Council of Europe member states are party to the echr. 25 See Article 33 of the echr. 26 See Article 34 of the echr, according to which “The Court may receive applications from any person, nongovernmental organisation or group of individuals claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto […]” The application must contain all the documents listed in Rule 47 of the Court Rules. It should be noted that since January 1st 2014 Rue 47 has been amended and the Court will implement more stringent requirements to reduce its heavy workload and downsize the number of individual complaints. See the latest edition of the Rules at: http://www.echr.coe.int/Documents/Rules_Court_ENG.pdf. 27 The obligation to exhaust local remedies is part of international customary law and it is embedded in both regional human rights treaties and universal treaties. See Article 35 of the European Convention on Human Rights, Article 41(1) of the International Covenant on Civil and Political Rights and Articles 2 and 5 of the Optional Protocol thereto, Article 46 of the American Convention on Human Rights and Article 50 and 56 of the African Charter on Human and Peoples’ Rights.

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taken within the domestic legal system. The application form to resort to the ECtHR is available on the Court’s website,28 alongside a set of other documents drafted to explain the procedure to follow step by step.29 Notably none of the documents is “translated” in a child friendly version.30 Even though to date most, if not all, of the cases in which children are named as applicants have in fact been initiated and pursued by adults,31 child victims’ active role is not encouraged through the dissemination of material that can be fully understood and easily grasped. So far the children rights’ breaches which have been referred to the ECtHR include the ill-treatment of children in police custody; the right to legal assistance for children in conflict with the law; the detention and deportation of young children; the right to hear children’s voice in child protection and placement decisions; international adoption and corporal punishment at home and at school.32 It should be also noted that within the European regional human rights system there is no expert or institution specifically appointed to address issues related to children, nor to facilitate their access to the Court. In particular, the Commissioner for Human Rights, which is the independent institution within the Council of Europe responsible for promoting human rights, has a broad mandate that does not focus on children’s

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The form, which must be completed, signed and sent by post to the Registrar of the ECtHR, is available at: http://www.echr.coe.int/Documents/Application_Form_2014_1_ ENG.pdf. For example there are a Q&A factsheet, an online admissibility checklist, a flow chart describing the progress of a case and so on. The documents are available at: http://www .echr.coe.int/Pages/home.aspx?p=applicants#n13886588800237265277355_pointer. Child friendly versions of documents relevant to child victims have been drafted in few occasions, notably the child friendly version of the final report issued in 2004 by the trc for Sierra Leone, which is available at: http://www.unicef.org/infobycountry/files/ TRCCF9SeptFINAL.pdf, and the child friendly version of the Optional Protocol to the crc on a Communication Procedure, which entered into force in 2014 and sets out an international complaints procedure for child rights violations available at: http://srsg.violenceagainstchildren.org/sites/default/files/cropped_images/RaisingUnderstanding_OCPC .pdf The Council of Europe has preprared and disseminated a number of child friendly material, available at: http://www.coe.int/t/dg3/children/Child_friendly_material_CoE_ Programme_Building_a_Europe_for_and_with_children_25052011.pdf, but none of them focus on access to the ECtHR. See P. Newell, Background Paper on International Justice for Children: Children’s use of international and regional human rights complaint/communications mechanisms. All the cases regarding children can be consulted through Theseus, a database containing the Court’s case-law concerning children’s rights, which is available at: http://www.coe .int/t/dg3/children/WCD/simpleSearch_en.asp.

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rights and does not empower him to act upon individual complaints.33 As a result, the claims concerning violations of children’s rights undergo the same procedure as all the other claims, even though the victims require the adoption of specific measures and support in exercising their legal capacity. Within the Inter-American human rights system it is important to clarify from the outset that child victims, and victims in general, cannot directly access the IACtHR. According to the provisions enshrined in the American Convention on Human Rights34 only the Inter-American Commission and States Parties to the American Convention may submit complaints directly to the Court,35 whilst individuals, groups and organisations can resort to the Inter-American Commission.36 Moreover the IACtHR may only hear cases where the State involved has both ratified the American Convention on Human Rights and accepted the Court’s contentious jurisdiction.37 Access to the Court is hence subject to a number of factors which make particularly difficult even to conceive the idea of a child victim, or a group of children, resorting to the Inter-American Human Rights system proprio motu. Despite the fact that the IACtHR is not directly accessible by the victims, including and in particular children, the Inter-American human rights system has greatly contributed to strengthening children’s rights. In the first place it shall be underlined that unlike the European Convention on Human Rights, the American Convention enshrines a specific provision on the rights of the child, namely Article 19, which manifestly recognises the status of children as legitimate rights-holders.38 Furthermore, in 1998 the Office of the Rapporteur of the Rights of the Child has been established within the Inter-American Commission. The Office provides advice to the iachr in the proceedings of individual petitions, cases and 33 34 35 36

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Further info on the mandate of the Commissioner for Human Rights is available at: http://www.coe.int/web/commissioner/mandate. Organization of American States (oas), American Convention on Human Rights, “Pact of San Jose”, Costa Rica, 22 November 1969. Art. 61(1) of the American Convention on Human Rights. According to Art 44 of the American Convention “Any person or group of persons, or any nongovernmental entity legally recognized in one or more member states of the Organization, may lodge petitions with the Commission containing denunciations or complaints of violation of this Convention by a State Party.” Currently, 25 oas Member States have ratified the American Convention on Human Rights, 20 of whom have opted to accept the Court’s contentious jurisdiction in accordance with Article 62 of the American Convention. See http://www.cidh.oas.org/basicos/ english/Basic4.Amer.Conv.Ratif.htm. Art. 19 “Every minor child has the right to the measures of protection required by his condition as a minor on the part of his family, society, and the state.”

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requests of precautionary and provisional measures, which address the rights of the child.39 So far violations of children’s rights brought before the IACtHR have encompassed, inter alia, breaches of the right to life, prohibition of torture, extra judicial executions, illegal detention and right to nationality and to equal protection.40 Most of the cases brought before the iachr have been initiated by national or regional ngos,41 and the rest by the children’s parents or other relatives.42 The fact that children resort to the European and the Inter-American Human Rights systems only through their parents and legal guardians or specialised ngos has an impact on the concrete exercise of the right to access information concerning violations and reparation mechanisms. The crc General Comment on the right of the child to be heard has stressed that in order for the States Parties to implement this right, they should review or amend their legislation and introduce effective mechanisms providing children with access to appropriate information, adequate support, if necessary, feedback on the weight given to their views, and procedures for complaints, remedies or redress.43 Similarly the Guidelines on Justice in Matters Involving Chid Victims and Witnesses of Crimes,44 a non binding document adopted by the Economic and Social Council in 2005, stress the importance of the right of the child to be informed about existing support mechanisms that he or she can access when making a complaint and participating in the investigation and court proceedings. According to the Guidelines child victims shall receive also information concerning the availability of health, psychological, social and other relevant services as well as the means of accessing such services along with legal or other advice or representation, compensation and emergency financial support, where applicable.45 The Guidelines target the States, which bear the primary responsibility to provide victims with judicial remedies, but

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Further info about the mandate of the Rapporteurship on the Rights of the Child is available at: http://www.oas.org/en/iachr/children/mandate/Functions.asp. 40 M. Feria Tinta, The Landmark Rulings of the Inter American Court of Human Rights on the Right of the Child (Leiden: Martinus Nijhoff Publishers, 2008). 41 In particular Casa Alianza and the Center for Justice and International Law (cejil). 42 See Newell, supra n31. 43 The Committee on the Rights of the Child, General Comment No. 12 (2009), The right of the child to be heard, CRC/C/GC/12. 44 un Economic and Social Council (ecosoc), un Economic and Social Council 2005/20: Guidelines on Justice in Matters Involving Child Victims and Witnesses of Crime, 22 July 2005, E/RES/2005/20. 45 Ibidem.

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the rights and principles enshrined are to be applied in every judicial setting, national or international. 4

Adequate, Effective and Prompt Reparation for the Harm Suffered

Reparation is a term with a well-established legal meaning, which refers both to the obligation to repair and the right to claim and obtain redress. The often-quoted passage of the Factory at Chorzow Judgment stresses that the aim  of reparation is to ‘wipe out all the consequences of the wrongful act’.46 Under international law the traditional forms of reparation identified are restitution, compensation and satisfaction.47 Within the human rights framework also rehabilitation and guarantees of non-repetition are included amongst the kinds of reparation available for the victims.48 Article 39 of the crc enshrines a specific provision concerning children’s right to obtain redress, which underlines in particular States’ duty to provide child victims with measures  to promote physical and psychological recovery and social reintegration.49 Traditionally the primary form of reparation is restitution, which entails the restoration of the status quo ante disrupted by the violation occurred. It is, however, blatant to observe that violations of ihrl that affect  fundamental rights of the victims cannot be fully restored generating what has  been described as “the basic paradox at the heart of reparations”. Therefore  rather than restitution in cases of ihrl violations a comprehensive  and victim centred approach should be sought and implemented. To this end, according to Redress reparation comprises ‘the wide range of measures that may be taken in response to an actual or threatened violation,

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See case of Factory at Chorzow, Merits, Permanent Court of International Justice, Ser. A, No. 17 (1928), p. 47. 47 See International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts, November 2001, Supplement No. 10 (A/56/10), Chapter iv.E.1 Art 34 “Full reparation for the injury caused by the internationally wrongful act shall take the form of restitution, compensation and satisfaction, either singly or in combination, in accordance with the provisions of this chapter.” 48 See the Basic Principles and Guidelines supra n2. 49 Art. 39 “States Parties shall take all appropriate measures to promote physical and psychological recovery and social reintegration of a child victim of: any form of neglect, exploitation, or abuse; torture or any other form of cruel, inhuman or degrading treatment or punishment; or armed conflicts. Such recovery and reintegration shall take place in an environment which fosters the health, self-respect and dignity of the child.”

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including the substance of the relief as well as the procedure to attain it’.50 In other words the right to reparation encompasses both a procedural and a substantive dimension.51 So far the role played by regional human rights bodies, in particular by the IACtHR,52 has been essential for the development of an innovative and forward-looking approach towards reparation,53 including in the aftermath of violations of children’s rights.54 Whilst the IACtHR has awarded all the types of reparation foreseen in the Basic Principles and Guidelines promoting a holistic model of reparative justice, its European counterpart has interpreted the provision enshrined in Article 41 of the echr in a restrictive way.55 The reparations awarded so far by the ECtHR in cases where children’s rights were at stake took exclusively the form of compensation for the damages suffered by the victims. Also in cases where the violations perpetrated against child victims appear to be particularly grave, e.g. Ciğerhun Öner v. Turkey,56 C.A.S. and

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See Redress, ‘A Sourcebook for Victims of Torture and Other Violations of Human Rights and International Humanitarian Law’, 2003 http://www.redress.org/downloads/publications/SourceBook.pdf. P. De Greiff, the un Rule of Law Tools for Post-Conflict States (2008), which is available at: http://www.ohchr.org/Documents/Publications/ReparationsProgrammes.pdf. In its judgments the Inter-American Court of Human Rights refers to ‘reparations’. The recourse to the plural, which is often used to allude to national administrative programs, highlights the Court’s tendency to award many forms of redress, ranging from material to symbolic reparation. See Art. 63(1) of the American Convention “if the Court finds that there has been a violation of a right or freedom protected by this Convention, the Court shall rule that the injured party be ensured the enjoyment of his right or freedom that was violated. It shall also rule, if appropriate, that the consequences of the measure or situation that constituted the breach of such right or freedom be remedied and that fair compensation be paid to the injured party.” On the Inter American Court of Human Rights’ jurisprudence in general, see L. BurgorgueLarsen and A. Ubeda de Torres, The Inter American Court of Human Rights: Case Law and Commentary (Oxford University Press: Oxford, 2011). T.M. Antkowiak, ‘Remedial Approaches to Human Rights Violations: The Inter-American Court of Human Rights and Beyond’, in Colombia Journal of Transnational Law 46(2008): 352–419. See Art. 41 of the echr, according to which “[…]the Court shall, if necessary, afford just satisfaction to the injured party.” ECtHR Ciğerhun Öner v. Turkey (no. 2) (Application no. 2858/07), Judgment 23.11.2010. A 12-year-old boy was ill-treated by police officers while being held in police custody (not registered), the victim has been awarded 30,000 euros in respect of non-pecuniary damage and eur 2,900 in respect of costs and expenses.

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C.S. v. Romania,57 Nencheva and Others v. Bulgaria,58 the ECtHR has not tried to pursue a wider and deeper approach to victims’ redress. In respect of claims for the restoration of rights, the ECtHR has ruled that a breach imposes on the State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach. However, if the restoration of the status quo ante is impossible, the respondent State is free to choose the means to comply with the judgment in which the European Court of Human Rights has found a breach, and the Court will not make consequential orders or declaratory statements in this regard.59 For example, in the Scozzari and Giunta case, the Court has noted that the purpose of awarding a sum of money as a form of just satisfaction is to provide reparation ‘solely’ for damages that ‘cannot otherwise be remedied’.60 Through such a statement, the Court has stressed that an order under Article 41 to pay compensation is not the only legal consequence of a violation of a Convention right, but it is for the respondent State to choose what measures to take to achieve restitution in kind.61 As underlined above the IACtHR on the other hand has promoted and implemented a completely different approach by outlining in its judgments all the steps that a State has to undertake to redress the violation(s) occurred. To this end the Inter-American Court has ordered a variety of reparative measures tailored on the different cases, such as public ceremonies performed with the participation of both local leaders and state’s authorities; the construction of 57

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ECtHR, C.A.S. and C.S. v. Romania (Application no. 26692/05) Judgment 20.03.2012. The case concerned a seven-year-old’s complaint that it had taken the authorities five years to investigate his repeated rape by a man, eventually acquitted, who had forced his way into the family flat when the boy had come home alone from school. The Court awarded to the victim the sum of 15,000 euros in respect of non-pecuniary damages. Nencheva and Others v. Bulgaria (Application no. 48609/06), Judgment 18.06.2013. Due to the inactivity of the responsible public institutions, fifteen children and young adults died between December 1996 and March 1997 in a home for physically and mentally disabled young people in the village of Dzhurkovo, from the effects of cold and shortages of food, medicines and basic necessities. The Court awarded to the applicants 10,000 euros in respect of non-pecuniary damages. See Redress, supra n50 at 38. V. Colandrea, ‘On the Power of the European Court of Human Rights to Order Specific Non- monetary Measures: Some Remarks in Light of the Assanidze, Broniowski and Sejdovic Cases’, in Human Rights Law Review 7(2007): 396–411. Scozzari and Giunta v. Italy, Applications nos. 39221/98 and 41963/98, Judgment 13 July 2000. In the case at stake two children have been removed from their family and placed in a children’s home co-funded and run by two men who have been convicted of sexual abuse of three handicapped people in their care. Ibidem at para 246.

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memorials and schools named after the victims;62 the establishment of a radio program on the national radio station to discuss issues pertaining to children’s rights;63 grant a scholarship named after the victim to provide access to a career for low-income youths;64 the imposition on the state of structural changes to domestic law.65 In cases involving child victims, the IACtHR has placed particular emphasis on concepts such as the “life project” of the victim66 and his or her reasonable expectations for the future,67 stressing the importance of recognising children not only as legitimate right-holders and victims entitled to the right to reparation, but also as subjects with the peculiar characteristic of being “adults in fieri”, i.e. persons with evolving capacities68 and vast potential. Even though several of the cases brought before the IACtHR deal with the death or disappearance of child victims, the Court with its innovative approach has constantly underlined how measures of rehabilitation, satisfaction and guarantees of non-repetition can contribute to the promotion and the implementation of children’s rights more effectively than compensation. 5

Conclusive Remarks

This chapter provided an overview of the different approach to remedies, which has emerged from an analysis of the provisions regulating the functioning of two regional human rights courts and their case law in instances involving child victims. A number of conclusive observations stem from this comparison. In primis, with regard to access to justice and relevant information, 62

See for example IACtHR Case Gomez Paquiyauri vs. Peru, Merits, Reparations and Costs, 8 July 2004. Ser. C No.110. 63 IACtHR, Case of Molina Thiessen v. Guatemala, Reparations and Costs, at Para 41, July 3, 2004. Serie C No. 108. 64 Ibidem. 65 IACtHR, Case of the Serrano-Cruz Sisters v. El Salvador, Merits, Reparations and Costs, November 2004, Serie C No. 118. 66 IACtHR, Case of Bulacio v. Argentina. Merits, Reparations and Costs. Judgment of September 18, 2003. Series C No. 100. During the proceedings before the IACtHR a friendly settlement was reached and was validated by the Court itself. 67 IACtHR, Case of the “Street Children” (Villagrán-Morales et al.) v. Guatemala. Merits, November 19, 1999. Series C No. 63. 68 See generally G. Lansdown, The Evolving Capacities of the Child, unicef Innocenti, Research Paper, 2005. Available at: http://www.unicef-irc.org/publications/pdf/evolving -eng.pdf.

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it shall be noted that none of the two Courts fully satisfy the international standards enshrined in the crc and in several non-binding documents, in particular both Courts appear to be difficult to resort to for a child victim or for a group of children. Crucial in this sense is the work of local and international ngos which are called to step in and report violations against children in all those cases where the family members are not the children’s strongest advocates, e.g. because their interests collide. Moreover, very few children are aware of their rights, while the majority of them simply ignore the possibility to act as rights-holders independently, at least to a certain extent, from adults. To this end child-friendly material should be realised and made available by the relevant regional human rights bodies, alongside raising awareness campaigns and outreach initiatives able to shed light on the procedures that can be started in case of ihrl violations perpetrated by States agents or other actors in breach of States’ due diligence. The main differences between the two Courts considered have emerged with regard to reparations, the third type of remedy listed in the Basic Principles and Guidelines. As clarified above the right to reparation consists of a procedural and a substantive dimension. Both Courts provide a route to claim for reparations, whilst there is a huge gap in terms of substance of the relief awarded to the victims. The ECtHR in fact has interpreted its role in a very restrictive way, without taking into account the full potential of a holistic strategy to achieve victim’s redress and the diktat of Article 39 of the crc which calls for measures able to “promote physical and psychological recovery and social reintegration”. The IACtHR on the other hand has strengthened and implemented a more proactive and tailored approach, which duly considers the victim’s needs and characteristics, including his or her vulnerability as a child and the necessity to overcome the trauma suffered through education, rehabilitation and reintegration measures. In light of the above it seems clear that much more needs to be done to achieve the implementation of the key principles embedded in the crc within the international human rights framework; however, it should not be forgotten that the primary responsibility to guarantee access to remedy to child victims lies with the States. In fact States, which voluntarily committed themselves to abide by the treaty arrangements that established the regional human rights bodies, can and should play a more prominent role. First, by increasing child victims’ access to remedies at the national level and, secondly, by ratifying the Optional Protocol to the crc on a communications procedure that offer a new international venue to obtain justice and redress for violations of the rights of the child.69 69

Despite the fact that the crc has almost universal ratification, OP3 so far has been ratified or accessed only by 17 States Parties.

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Bibliography Antkowiak, T.M., ‘Remedial Approaches to Human Rights Violations: The InterAmerican Court of Human Rights and Beyond’, in Columbia Journal of Transnational Law 46(2008): 352–419. Bassiouni, M.C., International Criminal Law 3rd ed., (Leiden: Martinus Nijhoff Publsihers, 2008). Burgorgue-Larsen, L., and A. Ubeda de Torres, The Inter American Court of Human Rights: Case Law and Commentary (Oxford: Oxford University Press, 2011). Capone, F., ‘Remedies’, in R. Wolfrum eds Max Planck Encyclopedia of Public International Law (Oxford: Oxford University Press, 2012). Capone, F., ‘Representing Child Victims’ in Manual for Victims’ Representatives before the International Criminal Court, R.M. Letschert ed. (Heidelberg: Springer, 2014). Crawford, J., The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries (Cambridge: Cambridge University Press, 2002). De Greiff, P., Rule of Law Tools for Post-Conflict States on Reparations Programmes, (OHCHR, 2008: 29). Feria Tinta, M., The Landmark Rulings of the Inter American Court of Human Rights on the Right of the Child (Leiden: Martinus Nijhoff Publishers, 2008). Francioni, F., Access to Justice as a Human Right, (Oxford: Oxford University Press, 2007). Hoogeveen, J., et al., A Guide to the Analysis of Risk, Vulnerability and Vulnerable Groups, (World Bank: 2005). Lansdown, G., The Evolving Capacities of the Child, UNICEF Innocenti, Research Paper, 2005. Newell, P., Background Paper on International Justice for Children: Children’s use of international and regional human rights complaint/communications mechanisms Children’s Use of International and Regional Human Rights Complaint/ Communications Mechanisms: Background Paper’, International Justice for Children (Strasbourg, 2007). Nifosi-Sutton, I., ‘The Power of the European Court of Human Rights to Order Specific Non-Monetary Relief: a Critical Appraisal from a Right to Health Perspective’, in Harvard Human Rights Journal 23(2010): 51–73. Pasqualucci, J., The Practice and Procedure of the Inter-American Court of Human Rights, 2nd ed., (Cambridge: Cambridge University Press, 2014). Roetten, K. and R. Sabates-Wheeler, ‘A Child Sensitive Approach to Social Protection: Serving Practical and Strategic Needs’, paper presented at the conference “Social Protection for Social Justice”. London, Institute of Development Studies, 13–15 April, 2011.

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Roht-Arriaza, N., ‘Reparations in the Aftermath of Repression and Mass Violence’, in My Neighbor, My Enemy: Justice and Community in the Aftermath of Mass Atrocity, E. Stover and H.M. Weinstein ed. (Cambridge: Cambridge University Press, 2004): 122. Sabates-Wheeler, R., Devereux, S., and A. Hodges, ‘Taking the Long View: What does a child focus add to social protection?’, IDS Bulletin, 40(2009): 109–119. Shelton, D., Remedies in International Human Rights Law, 2nd ed., (Oxford: Oxford University Press, 2005). UNICEF, Joint Statement on Advancing Child-Sensitive Social Protection, 2009. Van Bueren, G., International Law on the Rights of the Child (Amsterdam: Kluwer, 1998).

chapter 13

The International Criminal Court and Human Rights: Achievements and Challenges Ondřej Svaček Introduction That International Criminal Court (icc or Court) is obliged to consider internationally recognized human rights in its interpretation and application of applicable law is very well known.1 The exact boundaries of the principal interpretative guideline contained in Article 21(3) of the Rome Statute nevertheless remains subject to considerable debate both in the doctrine and practice of the icc. The aim of this chapter is to analyze achievements (consensus) reached with respect to the interpretation and application of human rights before the icc and at the same time point to challenges which remain and should be settled in upcoming years. The chapter reveals a close inter-relation existing between international criminal law and human rights law and highlights the importance of human rights jurisprudence before the icc. The icc’s jurisprudence rendered since 2005 has clarified some contentious aspects of Article 21(3), which have been steadily discussed in scholarly literature.2 These are assessed in the opening part of the paper. Firstly, the 1 Article 21(3) of the icc Statute provides: The application and interpretation of law pursuant to this article must be consistent with internationally recognized human rights, and be without any adverse distinction founded on grounds such as gender as defined in article 7, paragraph 3, age, race, colour, language, religion or belief, political or other opinion, national, ethnic or social origin, wealth, birth or other status. 2 Gallant, Kenneth S. Individual Human Rights in a New International Organization: The Rome Statute of the International Criminal Court. In: Bassiouni, Cherif (ed.) International Criminal Law. Vol. iii. Ardsley: Transnational Publishers, 1999, pp. 693–723. Pellet, Alain. Applicable Law. In: Cassese, Antonio et al. The Rome Statute of the International Criminal Court: A Commentary. Vol. ii. Oxford: oup, 2002, pp. 1079–1082. Hafner, Gerhard, Binder, Christina. The Interpretation of Article 21(3) icc Statute. Opinion Reviewed. Austrian Review of International and European Law. 2004, vol. 9, pp. 163–190. Mcauliffe de Guzman, Margaret. Article 21. Applicable Law. In: Triffterer, Otto. Commentary on the Rome Statute of the International Criminal Court: observers’ notes, article by article. München: Beck, 2008, pp. 711–712. Schabas, William. The International Criminal Court: a commentary of the Rome Statute. Oxford: oup, 2010, pp. 397–400. Sheppard, Daniel. The International Criminal Court and ʺInternationally Recognized Human Rights˝: Understanding Article 21(3) of the Rome

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jurisprudence confirms that ‘internationally recognized human rights’ encompass hard law sources (international treaty and custom) as well as soft law instruments. Next, regional human rights instruments are given the same relevance as their universal counterparts. Consistent reference to the European regional mechanism in purely African cases reveals that the icc has refused a contextual approach and even refers to sources, which would be clearly inapplicable if the case were to be decided before a domestic court. Finally, according to the icc, human rights operate not only as an interpretative guideline but can also prevail over the inconsistent provision of the Statute and other primary sources applicable before the icc (human rights as lex superior), and even act as an autonomous source of law. There is a doctrinal agreement, despite lack of a clear icc’s pronunciation on this issue, that the norm-generating function is limited only to procedural aspects and cannot be extended to the area of material international criminal law—the principle nullum crimen sine lege, as another central interpretative guideline, precludes any possibility of widening the scope of individual criminal responsibility under international law.3 Despite considerable progress, there are still problematic issues concerning the application and interpretation of human rights before the icc, which are addressed in the second part of this paper. The icc, as an international organization, is not fully equipped to implement some human rights, which were originally tailored to states (e.g. non-refoulement). It might be asserted that the different legal personality of the icc limits mechanical transposition of human rights standards, which presuppose existence of states into its jurisprudence. Next, one might ask whether the icc can interpret human rights extensively and confer on individuals even those rights which have not been awarded by

Statute. International Criminal Law Review. 2010, vol. 10, no. 1, pp. 43–71. Paulussen, Christophe. Male captus bene detentus? Surrendering suspects to the International Criminal Court. Antwerp: Intersentia, 2010, pp. 820–837. Croquet, A.J. Nicholas. The International Criminal Court and the Treatment of Defence Rights: A Mirror of the European Court of Human Rights’ Jurisprudence? Human Rights Law Review. 2011, vol. 11, no. 1, pp. 91–132. Young, Rebecca. ‘Internationally Recognized Human Rights’ before the International Criminal Court. International and Comparative Law Quarterly. 2011, vol. 60, no. 1, pp. 189–208. Deprez, Christophe. Extent of Applicability of Human Rights Standards to Proceedings before the International Criminal Court: On Possible Reductive Factors. International Criminal Law Review. 2012, vol. 12, no. 4, pp. 721–741. 3 Grover, Leena. A Call to Arms: Fundamental Dilemmas Confronting the Interpretation of Crimes in the Rome Statute of the International Criminal Court. European Journal of International Law. 2010, vol. 21, no. 3, pp. 558–563.

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any international human rights enforcement mechanism ever before (e.g. financing of family visits of the accused). What legal consequences might this have? Finally, there is a clear tendency in the icc’s case-law to limit the ultimate responsibility of the icc for violations of human rights which occurred at the national level (the requirement of concerted action between a state and the icc Prosecutor). Obtaining the presence of the accused in violation of his/ her human right to personal liberty might be taken as example. The question remains how this approach is compatible with general concepts of customary international law—the responsibility of international organizations for internationally wrongful acts and due diligence. These achievements and challenges shall be analyzed in more detail in the next sections. 1

Human Rights before the icc—Achievements

A notion of ‘internationally recognized human rights’ is interpreted by the icc in a broad manner. It encompasses not only customary international law, widely ratified universal human rights treaties (e.g. iccpr, cedaw, cat) and related jurisprudence,4 but even soft-law instruments. In the Lubanga case, the tch i, with reference to Article 21(3), relied in its legal determination of ‘victim’ and ‘harm’ on the un Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law (the so-called van Boven-Bassiouni principles).5 This approach was criticized by Judge Blattmann who argued that Basic Principles are “not a strongly persuasive or decisive authority”.6 Nevertheless, the ach opined that the tch had been merely guided by the Basic Principles and found no errors in this reference.7 The ach confirmed that in the context of Article 21(3) the icc’s chambers may rely even on sources which are not legally binding. Of course, the icc is not bound to apply soft-law instruments, but it is entirely free to refer to them. Be that as it may, it is noticeable that both chambers did not refer to a 4 The Prosecutor v. Bemba. ICC-01/05-01/08-320. Fourth Decision on Victims’ Participation. ptch iii, 12 December 2008, § 40. 5 The Prosecutor v. Lubanga. ICC-01/04-01/06-1119. Decision on Victims’ Participation. tch i, 18 January 2008, § 35. Compare A/RES/60/147 (21 March 2006). 6 The Prosecutor v. Lubanga. ICC-01/04-01/06-1119. Separate and Dissenting Opinion of Judge René Blattmann, § 4–6. 7 The Prosecutor v. Lubanga. ICC-01/04-01/06-1432. Judgment on the appeals of The Prosecutor and The Defence against Trial Chamber I’s Decision on Victims’ Participation of 18 January 2008. ach, 11 July 2008, § 33.

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well-settled jurisprudence of the international human rights courts which provides for a definition of victim. For instance, the European and American regional human rights protection systems with their case-law on indirect victims might have been significantly relevant here.8 According to Abels, the important factor here is the fact that Article 21(3) does not refer to legally binding international human rights.9 Soft-law instruments can therefore fall into its scope. Next, the existing case-law shows that the icc puts strong emphasis not only on universal human rights instruments, but usually builds up its Article 21(3) argumentation on regional human rights treaties. The position of the latter was subject to controversy and its practical usage before the icc was contested at least among some scholars.10 It is possible to distinguish two possible approaches here: (a) contextual, and (b) minimalist.11 Under the first scenario, the icc should apply only those regional human rights instruments that would be relevant had a case been prosecuted before domestic courts. Simply, if the icc deals with an African case, it should refer only to the Banjul Charter and disregard its American or European counterparts. On the other hand, under the minimalist perspective, there is no such limitation and the icc is free to apply any regional human rights catalogue, which has been recognized internationally. Undoubtedly, the icc has chosen the minimalist path and consistently refers to the echr (or the achr) even in purely African cases, which are currently being prosecuted before it.12 This position is to be welcomed as there 8

Compare Burgorgue-Larsen, Laurence, Úbeda de Torres, Amaya. The Inter-American Court of Human Rights. Case Law and Commentary. Oxford: oup, 2011, pp. 113–117. echr. Practical Guide on Admissibility Criteria. 2011, p. 13. Available at http://www.echr.coe.int/ Documents/Admissibility_guide_ENG.pdf. 9 Abels, Daniel. Prisoners of the International Community. Legal Position of Persons Detained at International Criminal Tribunals. The Hague: T.M.C. Asser Press, 2012, p. 141. Abels, after pointing out other examples of soft-law reference in the icc’s jurisprudence, compares Article 21(3) with Article 106(2) of the icc Statute—the latter speaks about ‘widely accepted international treaty standards’. 10 Compare Hafner and Binder who on the basis of literal reading of Article 21(3) assert that “[r]egional standards […] would be excluded due to the requirement that the rights have to be internationally recognized.” Supra, p. 187. 11 Sheppard, D.: supra, pp. 63–67. 12 The Prosecutor v. Al-Bashir. ICC-02/05-01/09-3. Decision on the Prosecution’s Application for a Warrant of Arrest against Omar Hassan Ahmad Al Bashir. ptch i, 4 March 2009, § 9, § 32. The Prosecutor v. Lubanga. ICC-01/04-01/06-tEN. Decision on the confirmation of charges. ptch i, 29 January 2007, § 86–87. The Prosecutor v. Lubanga. ICC-01/04-01/062205. Judgment on the appeals of Mr Lubanga Dyilo and the Prosecutor against the Decision of Trial Chamber I of 14 July 2009 entitled “Decision giving notice to the parties

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is nothing in the icc Statute or other relevant rules applicable before the icc what would preclude the Court from taking this stand. To the author’s knowledge, the icc has not yet considered differences between various human rights catalogues and related jurisprudence.13 It is not excluded—and due to the fact that the icc is permitted to apply virtually all human rights treaties, it is quite probable—that this issue may find its path to the Court. Possible conflicts and diverging standards should be reconciled by reference to the key principle in international human rights protection: the highest standard should prevail.14 The early jurisprudence of the icc has already elucidated the functions and role of human rights before the icc. The function of Article 21(3) has been described by scholars as (a) interpretative, (b) normative conflict-solving and (c) norm-generating (gap-filling).15 The first approach is the most conservative one. It limits the role of human rights to a mere interpretative guideline. This position was famously outlined by the ach in the Lubanga case in following words: “Human rights underpin the Statute; every aspect of it […] Its provisions must be interpreted and more importantly applied in accordance with internationally recognized human rights.”16 The conservative approach presupposes a pre-existence of applicable rule under Article 21(1)(a)–(c). To put

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and participants that the legal characterisation of the facts may be subject to change in accordance with Regulation 55(2) of the Regulations of the Court”. ach, 8 December 2009, § 84. To give just one example, it is possible to refer to interpretation of ‘law’ with respect to limitation of human rights (triple test). While the echr interprets this word in a material sense, the iachr prefers a formal reading. Shelton, Dinah, Carozza, Paolo. Regional Protection of Human Rights. Oxford: oup, 2013, p. 630. Differences in human rights protection, which is a topic going beyond the scope of this paper, deal with fragmentation in international law. Compare Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law. Report of the Study Group of the International Law Commission. 13 April 2006. UN GA (A/CN.4/L.682). On the specific issue of fragmentation in international human rights law compare e.g. Fragmentation in International Human Rights Law—Beyond Conflict of Laws. Nordic Journal of Human Rights. 2014, vol. 32, no. 2, pp. 87–175. The Prosecutor v. Mrkšić and Šljivančanin. icty. IT-95-13/1-A. Judgment, Partially Dissenting Opinion of Judge Pocar. ach, 5 May 2009, § 7. Young, R.: supra, pp. 199–201, Sheppard, D.: supra, pp. 58–63, Pellet, A.: supra, pp. 1079– 1081, Hafner, G., Binder, Ch.: supra, pp. 173–177. The Prosecutor v. Lubanga. ICC-01/04-01/06-772. Judgment on the Appeal of Mr. Thomas Lubanga Dyilo against the Decision on the Defence Challenge to the Jurisdiction of the Court pursuant to article 19 (2) (a) of the Statute of 3 October 2006. ach, 14 December 2006, § 37.

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this differently, human rights can enter the floor of the icc only after a relevant applicable law has been identified.17 One has to logically ask what hierarchy exists between norms applicable by the Court? The Rome Statute draws a clear hierarchy between primary (Statute, Elements of Crimes, Rules of Procedure and Evidence), secondary (applicable treaties and the principles and rules of international law) and tertiary sources (general principles of law derived from national laws).18 The scholars present unsurprisingly opposite opinions on the hierarchy between human rights and law applicable according to Article 21(1)(a)–(c) of the icc Statute. According to Gallant, Hafner and Binder, in cases of possible contradiction the icc Statute prevails over human rights, which are nevertheless superior to other primary, secondary and tertiary sources of law.19 On the other hand, Pellet strongly advocates precedence of human rights over all other applicable rules, including the Rome Statute itself—with respect to the role attached to human rights, he speaks about “international super-legality”.20 Pellet asserts that the icc is obliged to refuse to apply the Rome Statute (and other applicable rules) when they are inconsistent with internationally recognized human rights.21 Importantly, any possible normative conflict concerns applicability, i.e. not validity of conflicting rules—the icc is not endowed with power to invalidate a provision of the Rome Statute (and other applicable rules) which is found incompatible with human rights.22 The jurisprudence of the icc has preferred the latter approach. In case of conflict between the icc Statute (and any other applicable norm) and internationally recognized human rights, human rights prevail and make 17

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The Prosecutor v. Lubanga. ICC-01/04-01/06-679. Decision on the Practices of Witness Familiarisation and Witness Proofing. tch 1, 8 November 2006, § 10. This approach has been strongly advocated by part of scholars who at the same time rejected a more generous norm-generating function of Article 21(3). Compare Young, R.: supra, p. 201. Young argues that the conservative approach was confirmed by the Appeals Chamber. Nevertheless, the Appeals Chamber has in the same decision (ICC-01/04-01/06-772) adopted a more liberal line of reasoning (compare infra note 30). Bitti, Gilbert. Article 21 of the Statute of the International Criminal Court and the treatment of sources of law in the jurisprudence of the icc. In: Stahn, Carsten, Sluiter, Göran. The Emerging Practice of the International Criminal Court. Leiden: Martinus Nijhoff, 2009, pp. 285–304. Gallant, K.S.: supra, pp. 702–703, Hafner, G., Binder, Ch.: supra, p. 190. Pellet, A.: supra, p. 1079. Cassese, Antonio et al. Cassese’s International Criminal Law. Oxford: oup, 2013, p. 11. Sluiter, Göran et al. International Criminal Procedure: Principles and Rules. Oxford: oup, 2013, p. 83.

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the Statute and any other norm according to Article 21(1) inapplicable. In the Katanga and Chui case, the tch ii considered the possibility of the immediate return of three witnesses who after completion of testimonies, fearing persecution upon their return to the drc, applied for asylum in the Netherlands. The tch ii concluded that it “is unable to apply article 93(7) of the Statute in conditions which are consistent with internationally recognized human rights, as required by article 21(3) of the Statute.”23 The Chamber referred to the right to apply for asylum and the right to effective remedy which would be violated had the witnesses been returned to the drc. Simply, human rights made the relevant provision of the icc Statute inapplicable. This outcome has not been changed even in the appeals proceedings.24 In its decision, the ach did not cast doubt upon precedence of human rights over a provision of the Statute—it merely concluded that Article 93(7) of the Statute could and should have been interpreted by the tch in conformity with human rights in this case as there was no normative conflict between both sources of law which would have made the Statute inapplicable.25 Superiority of internationally recognized human rights before the icc is nevertheless not absolute. If the standard in the internationally recognized human rights catalogue is lower than the standard contained in the icc Statute, the latter prevails. For instance, under Article 67(1)(f) of the icc Statute, the accused has a right to a competent interpreter and translation, if any of the proceedings of or documents presented to the Court are not in a language which he/she fully understands and speaks.26 On the other hand, Article 14(3) (a) of the iccpr or Article 6(3)(a) of the echr speak only about language which a person understands. In the Katanga case the ach concluded “that the standard applicable under the Statute is high—higher, for example, than that

23

The Prosecutor v. Katanga and Chui. ICC-01/04-01/07-3003-tENG. Decision on an Amicus Curiae application and on the “Requête tendant à obtenir présentations des témoins DRC‐D02‐P‐0350, DRC‐D02‐P‐0236, DRC‐D02‐P‐0228 aux autorités néerlandaises aux fins d’asile” (articles 68 and 93(7) of the Statute). tch ii, 9 June 2011, § 37. With respect to the non-refoulement principle compare text infra. 24 The Prosecutor v. Chui. ICC-01/04-02/12-158. Order on implementation of the cooperation agreement between the Court and the Democratic Republic of Congo concluded pursuant article 93(7) of the Statute. ach, 20 January 2014, § 30. 25 The ach ordered the Registrar to return witnesses to the drc after consultation with the Netherlands which was therefore provided with the opportunity to take necessary steps in respect of the pending asylum applications of witnesses. 26 Sluiter, G.: supra, p. 92.

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applicable under the European Convention on Human Rights and the iccpr.”27 Unsurprisingly, the Chamber found the assistance of these human rights instruments limited and elaborated on a standard, which would reflect more demanding wording of the icc Statute provision. Taking into account that international human rights law provides only a minimum standard, which can be expanded at the domestic or organizational level, this is the only possible solution.28 The rich potential of Article 21(3) nevertheless does not end up here. The jurisprudence of the icc confirms even the norm-creating (gap-filling) function of human rights. The classical example of this approach is usage of a stay of proceedings in an event of flagrant violation of the human rights of the accused, even though this institute is not contained in the Rome Statute or other primary law applicable before the icc.29 In the Lubanga case the ach concluded: “Where fair trial becomes impossible because of breaches of the fundamental rights of the suspect or the accused by his/her accusers, it would be a contradiction in terms to put the person on trial. […] If no fair trial can be held, the object of the judicial process is frustrated and the process must be stopped”.30 Finally, the proceedings were not stayed at this stage, as the ptch and the ach did not find any violation of human rights. Nevertheless, the proceedings in the same case were temporarily stayed later (for seven months) due to non-disclosure by the Prosecutor of exculpatory materials covered by Article 54(3)(e) of the icc Statute.31 27

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The Prosecutor v. Katanga. ICC- 01/04-01/07-522. Judgment on the appeal of Mr. Germain Katanga against the decision of Pre-Trial Chamber I entitled “Decision on the Defence Request Concerning Languages”. ach, 27 May 2008, §§ 43–45, § 62. Compare e.g. the decision of the Czech Constitutional Court which concluded: “[I]t is an internationally recognized principle that ratification of an international treaty does not affect more favourable rights, protection and condition guaranteed by domestic legislation.” Pl. ÚS 31/94, 24 May 1995, No. 164/1995 Coll. Schabas, W.: supra, p. 399. The Prosecutor v. Lubanga, supra note 16, § 37. Paulussen rightly points out an inconsistency in this finding. The ach even established the second test, stressing the discretion (i.e. not an obligation) with respect to a stay of the proceedings. Paulussen, Ch.: supra, p. 890. The ach ruled: “Where the breaches of the rights of the accused are such as to make it impossible for him/her to make his/her defence within the framework of his rights, no fair trial can take place and the proceedings can be stayed.” The Prosecutor v. Lubanga, supra note 16, § 39. Decision of the tch (ICC-01/04-01/06-1401) from 13 June 2008 was confirmed by the ach. Compare The Prosecutor v. Lubanga. ICC-01/04-01/06-1486. Judgment on the Appeal of the Prosecutor against the decision of Trial Chamber I entitled “Decision on the consequences of non-disclosure of exculpatory materials covered by Article 54(3)(e) agreements and the

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If Article 21(3) is being employed in the icc’s jurisprudence as an autonomous source of law, it is logical to ask the limits of its usage. This issue is of course not unimportant. Would it be for example possible to extend elements of the crime of conscripting or enlisting children under the age of fifteen years into the national armed forces or using them to participate actively in hostilities (Article 8(2)(b)(xxvi) and Article 8(2)(e)(vii) of the icc Statute) by reference to international human rights law which protects children until the age of eighteen years?32 It seems persuasive that any such extension of criminal responsibility is clearly inadmissible. Despite the prominent position of Article 21(3) in the system of applicable law before the icc, it cannot be read in isolation; quite the contrary, it must be applied and interpreted systematically with reference to another principal interpretative guideline, namely the principle of legality contemplated in Article 22 of the icc Statute. The nullum crimen sine lege principle is itself firmly embedded in international human rights law as a right of absolute character which does not permit any derogation.33 Simply, the principle of legality trumps Article 21(3) and limits its usage before the icc. In support of this conclusion, Schabas refers to travaux preparatoires which “require interpretation by the Court to be consistent with the nullum crimen sine lege rule”.34 To put it differently, the norm-generating function of internationally recognized human rights is restricted only to procedural issues and cannot be extended to the area of substantive international criminal law.35 Human rights cannot be used as a sole justification for expanding jurisdiction of the icc and

32 33 34 35

application to stay the prosecution of the accused, together with certain other issues raised at the Status Conference on 10 June 2008”. ach, 21 October 2008. Compare Article 1 and Article 2 of the Optional Protocol to the Convention on the Rights of the Child on the involvement of children in armed conflict. Compare Article 11(2) of the udhr, Article 15 of the iccpr, Article 7 of the echr, Article 9 of the achr, Article 7(2) of the achpr, Article 49 of the cfreu. Schabas, W.: supra, p. 398. Another example of the norm-creating function deals with Rule 81(4) of the icc rpe. Compare Sluiter, G.: supra, p. 93. The rpe provides for restriction on disclosure of identity of victims, witness and their family members. The ach nevertheless expanded wording of the rpe to cover even ‘innocent third parties’. The Chamber stressed that Rule 81(4) should be read to include the words ‘persons at risk on account of the activities of the Court’ which was the interpretation in adherence with the requirement contained in Article 21(3) of the icc Statute. Compare The Prosecutor v. Katanga. ICC-01/04-01/07-475. Judgment on the appeal of the Prosecutor against the decision of Pre-Trial Chamber I entitled “First Decision on the Prosecution Request for Authorisation to Redact Witness Statements”. ach, 13 May 2008, § 57.

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the broadening of the criminal responsibility of accused or suspect persons investigated and prosecuted before it.36 To the knowledge of the present author, the mutual relation between the principle of legality and internationally recognized human rights has not yet been considered by the icc, but, if the Court would face this issue, it will have virtually no other option than to confirm the primacy of the nullum crimen sine lege rule. At the same time, the jurisprudence of the icc has already confirmed the norm-generating function with respect to procedural issues before the Court. 2

Human Rights before the icc—Challenges

The previous section described achievements and clarifications the icc’s jurisprudence has already brought with respect to Article 21(3). It also pointed to some aspects which have not yet been expressly solved before the icc (diverging standards of human rights protection, relation to the principle of legality), but which should not be challenging for the Court as there are obvious solutions for them. On the other hand, some conclusions concerning human rights already adopted by the icc are challengeable and pose important questions, which will be briefly discussed here. It was already asserted that the icc, as an international organization, is not fully equipped to implement some human rights, which were originally tailored to state-individual relations. The principle of non-refoulement, brought before the icc in connection with detention of witnesses from the drc, can be taken as an example here. In 2011 the tch ii excluded application of the non-refoulement principle with respect to Article 68 (protection of victims and witnesses), because, as an international organization, the icc does not possess territory and therefore it is unable to implement this principle within its ordinary meaning—only a State which possesses territory is able to apply non-refoulement.37 The tch ii went on to say that, even if the icc decided to return witnesses immediately, which would be clear violation of the right to apply for asylum and the right to effective remedy, the only entity responsible for violation of the non-refoulement 36 37

Grover, L.: supra, p. 562. According to Grover, Article 22 operates as lex specialis in relation to Article 21(3). The Prosecutor v. Katanga and Chui. ICC-01/04-01/07-3003-tENG. Decision on an Amicus Curiae application and on the “Requête tendant à obtenir présentations des témoins DRC‐D02‐P‐0350, DRC‐D02‐P‐0236, DRC‐D02‐P‐0228 aux autorités néerlandaises aux fins dʹasile” (articles 68 and 93(7) of the Statute). tch ii, 9 June 2011, § 64.

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principle would be the Netherlands.38 In 2013 the same chamber, in its interpretation of its own 2011 decision, concluded that the principle of non-refoulement attained ius cogens status and “the only means to adhere to the peremptory norm of non-refoulement was to suspend article 93(7) of the Statute temporarily and not apply it.”39 It seems that the tch ii accepted that the addressee of non-refoulement is the Court itself—here with respect to Article 93(7) of the icc Statute. Finally, in its decision issued in 2014, the ach concluded that the aforementioned provision can be implemented in conformity with human rights (without explicit reference to non-refoulement) and ordered immediate release of detained witnesses, with the Registrar’s obligation to provide the Netherlands with the opportunity to take adequate steps in respect of pending asylum requests. At first sight, icc’s case-law on non-refoulement is not entirely consistent. The tch ii excluded its application in relation to Article 68, but confirmed it in respect of Article 93 of the Statute. Does this mean that various provisions of the Rome Statute are subject to different human rights standards? And who is the addressee of non-refoulement obligations? It is obvious that positive obligations arising out of this principle, whatever their precise scope is, are not transferable to international organizations as they presuppose the existence of states with their territory.40 It might be tempting to say that the icc is bound at least by a negative obligation, but it is not the case either. Closer examination reveals that any transport of a person in custody from the premises of the Court to the point of departure from the host State shall be carried out by the competent Dutch authorities.41 The only entity responsible for violation of non-refoulement would therefore be the Netherlands. Except for the hypothetical and improbable situation of the icc acting on its own initiative in violation of the headquarters agreement, non-refoulement is not applicable before the icc. This is true not only in respect to Article 68 but at the same time with respect to Article 93 of the icc Statute. As easy as this conclusion seems to be, it took three years to reach it before the Court. This may be used 38

Ibid, § 73. The Chamber ruled that by immediate return it would constrain the Netherlands to violate the witnesses’ rights to invoke the non‐refoulement principle. The addressee of the norm is nevertheless the Netherlands, not the icc itself. 39 The Prosecutor v. Katanga. ICC-01/04-01/07-3405-tENG. Decision on the application for the interim release of detained Witnesses DRC- D02-P-0236, DRC-D02-P-0228 and DRCD02-P-0350. tch ii, 1 October 2013, § 30. 40 Wouters, Kees. International Legal Standards for the Protection from Refoulement. Antwerpen: Intersentia, 2009, pp. 324–327. 41 Compare Article 44 and Article 45 of the Headquarters Agreement Between the International Criminal Court and the Host State.

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as an example of difficulties the icc might face when it adopts human rights, which presuppose the existence of a state. The second challenge concerns the extensive interpretation of human rights before the icc. An illustrative example deals with the right to family visits of persons detained by the Court. Before the icc the existence of this right as such, which is clearly uncontestable, was not at stake but attached positive obligation to fund these visits. The case originated from the request of Mathieu Chui, who applied for funding of a visit of his nuclear family (wife and six children). In her decision, the Registrar explained that, although no positive obligation to fund family visits exists, she decided to fund all or part of the costs of the family visits of the detained persons on a discretionary basis in consideration of their personal situation.42 In the instant case the Registrar decided to finance visits of only a limited number of family members. The detainee then applied for judicial review before the Presidency, which overturned the impugned decision. The Presidency, relying on the echr’s jurisprudence which emphasizes that human rights must be interpreted in a practical and effective, rather than theoretical and illusory, manner, concluded that the right to receive family visits necessitates the provision of funding for such visits by the Court.43 The icc Presidency ruled in favor of the positive obligation to cover the costs of family visits of detained persons, which has clearly never been provided by any international human rights courts.44 The reaction came immediately. During meetings of the Assembly of State Parties (asp) and related bodies some delegations warned against the creation of a new (customary) law by the icc. There were fears that such a law could be later used against states at the domestic level.45 In its resolution on family visits of indigent detainees the asp expressly stressed “that, according to existing law and standards, the 42

The Prosecutor v. Katanga and Chui. ICC-RoR-217-02/08. Decision on “Mr Mathieu Ngudjolo’s Complaint Under Regulation 221(1) of the Regulations of the Registry Against the Registrar’s Decision of 18 November 2008”. Presidency, 10 March 2009, § 10. (Family Visits Decision). 43 Ibid, § 32. 44 The echr has never expressly provided for a positive obligation to cover the costs of family visits of detained persons—an obligation that would arise out from Article 8 of the echr. The nearest precedents cover only family visits as such. Compare Selmani v. Switzerland. Appl. no. 70258/01. echr, 28 June 2001, § 1. The echr decided that “detention of a person in a prison at a distance from his family which renders any visit very difficult, if not impossible, may in exceptional circumstances constitute an interference with his family life.” 45 Abels, D.: supra, pp. 648–650.

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right to family visits does not comprise a co-relative legal right to have such visits paid for by the detaining authority or any other authority.”46 The important question here is whether the icc can go beyond the limits of existing internationally recognized human rights. A grammatical interpretation of Article 21(3) would indicate an answer in the negative (application and interpretation must be consistent with internationally recognized human rights). Then the argument may follow that, even if the icc is not formally bound by external jurisprudence on human rights, it simply cannot disregard it as it is pronounced by organs established especially for this purpose.47 The icc should therefore accept limits of this jurisprudence and should not exceed it. On the other hand, it cannot be expected that the icc, as an autonomous entity, will mechanically adopt existing principles previously sanctified by human rights bodies. Quite the contrary, it will stress the uniqueness of its own position and the background in which it operates as justification for possible divergence from existing standards.48 Current jurisprudence of the icc reveals that the Court, in the application and interpretation of human rights, acts very much as a human rights court.49 The inevitable outcome of such a new role is that the Court will interpret human rights according to its specific needs—it will have a margin of appreciation.50 Nevertheless, any dividing line between creative interpretation and law-making is very blurred. Be that as it may, any departure from the existing human rights framework should be well reasoned and elaborated to prevent possible opposition from states pointing to selfattribution of a law-making function by the icc. Finally, the third challenge deals with a tendency on the part of the icc to disregard violations of human rights, which occurred at the domestic level. Under the current icc jurisprudence, the icc finds relevant only those violations, which are the result of the ‘concerted action’ between the 46 47 48

49 50

Resolution ICC-ASP/8/Res.4, 26 November 2009. Compare Article 21(2) of the icc Statute. Family Visits Decision, § 32. The same holds true with respect to the iachr. Despite heavy reliance on the echr’s case-law, the iachr departs from it when it finds necessary to consider regional specificities. Compare Lixinski, Lucas. Comparative International Human Rights Law: An Analysis of the Right to Private and Family Life across Human Rights “Jurisdictions”. Nordic Journal of Human Rights. 2014, vol. 32, no. 2, pp. 99–117. The Prosecutor v. Lubanga. ICC-01/04-01/06-tEN. Decision on the confirmation of charges. ptch i, 29 January 2007, § 79. ptch i elaborated on the proportionality test. According to Medina, “the content of a right necessarily evolves as new possibilities of its application are unveiled.” Medina, Cecilia. The Role of International Tribunals: Law Making or Creative Interpretation? In: Shelton, Dinah (ed.) The Oxford Handbook of Human Rights Law. Oxford: oup, 2013, p. 653.

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icc (Prosecutor) and a state. This aspect is especially important in respect to obtaining accused persons.51 The last part briefly analyzes how the requirement of concerted action conforms to principles of attribution in the law of responsibility of international organizations, especially to Article 9 of the Draft Articles on the Responsibility of International Organizations for Internationally Wrongful Acts adopted by the International Law Commission (ilc) in 2011(dario) and the principle of due diligence. The term ‘concerted action’ was used for the first time in the Lubanga case by the ptch i in 2006.52 In explanation of this concept, the ptch i referred to the case-law of the echr (Stocké v. Germany) and the ictr (Semanza, Rwamakuba, Barayagwitza). In this author’s opinion, concerted action constitutes a specific rule of attribution of the (wrongful) conduct to the icc—it deals with the mutual relation between different entities (here the icc and a state).53 It presupposes ex ante participation of the icc (typically the Prosecutor) on the conduct of a state. This approach might be criticized because it does not take into consideration possible ex post attribution anticipated in Article 9 of the dario (acknowledgement and adoption of the conduct as its own). One may ask, whether the potential benefit of the accused’s presence before the icc, obtained e.g. by a violation of human rights by a state—and solely by a state, may amount to acknowledgement and adoption regulated in Article 9 of the dario and may therefore be attributed to the icc. It is possible to refer to the Eichmann abduction from Argentina, which is used by the ilc in the Draft Articles on Responsibility of States for Internationally Wrongful Acts (2001), as an analogous example.54 In this situation Israel benefited from the capture of Eichmann, which was allegedly undertaken by 51

52

53

54

The tendency to disregard violation of human rights at domestic level is nevertheless visible even in other areas—compare The Prosecutor v. Katanga and Chui, supra note 23, § 62. The Prosecutor v. Lubanga. ICC-01/04-01/06-552. Decision on the Defence Challenge to the Jurisdiction of the Court pursuant to article 19 (2) (a) of the Statute. ptch i, 3 October 2006. Later this decision was confirmed by the ach as follows: “nothing reveals an error in this finding which cannot but be sustained.” Compare The Prosecutor v. Lubanga, supra note 16, § 42. From this perspective, the case Stocké v. Germany does not seem to be entirely persuasive authority for establishment of this test. In the part referred to, the echr speaks about the seriousness of the conduct, rather than the relation between various entities. Yearbook of the International Law Commission, 2001, vol. ii, Part Two, p. 53, § 5. As was revealed later, Eichmann had been abducted from Argentina by Mosad, de iure organ of Israel. An internationally wrongful act was therefore attributable to Israel from its very beginning, not only ex post. Compare Paulussen, Ch.: supra, pp. 137–153.

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private individuals. What if the Court would be in the same situation as Israel? What if the accused had been apprehended in a violation of human rights which would not have been the result of concerted action between the icc and a state or private individuals? Would the benefit of the accused’s presence before the icc amount to ex post attribution? The nearest precedent is represented by the Nikolić case decided before the icty. The accused, Dragan Nikolić, had been abducted by unknown individuals and later handed over to sfor.55 Finally, he was transferred to the icty, which simply made a profit from his presence in The Hague. Unsurprisingly, in the light of the accused’s abduction, the defence challenged the exercise of jurisdiction by the Tribunal. Among other things, the Tribunal considered “whether the fact that sfor and Prosecution became mere passive beneficiary of fortuitous (even irregular) rendition to Bosnia could amount to “adoption” and “acknowledgement” of the illegal conduct as their own.”56 Without any detailed analysis, the tch responded to this question in the negative.57 Even if external jurisprudence is not binding for the icc, it is probable that this conclusion would be adopted even before the icc. It seems that an argument built on ex post attribution of unlawful conduct would fail before the icc. Nevertheless, even if responsibility under dario would not be accepted, it is still possible to take into account the concept of due diligence. Here the considered question would be whether the icc, even if it had not been involved in the violations of the human rights of the accused, had any positive obligation to minimize these violations and prevent them, irrespective of their authors.58 The concept of due diligence is different than international responsibility, as no attribution must be established here. It is enough to briefly say that its applicability before international criminal tribunals was examined and confirmed in the case-law of another ad hoc international criminal tribunal. In the Kajelijeli case the ictr ruled that “under the prosecutorial duty of due diligence, the Prosecution is required to ensure that, once it initiates a case, the case proceeds to trial in a way that respects the rights of the accused.”59 To the author’s knowledge, the concept of due diligence has unfortunately not yet 55

The Prosecutor v. Nikolić. IT-94-2-PT. Decision on Defence Motion Challenging the Exercise of Jurisdiction by the Tribunal. tch ii, 9 October 2000, § 15. 56 Ibid, § 66. 57 Ibid, § 67. 58 Taylor, Melinda, Jalloh, Charles Ch. Provisional Arrest and Incarceration in the International Criminal Tribunals. Santa Clara Journal of International Law. 2013, vol. 11, no. 2, p. 320. 59 Prosecutor v. Kajelijeli. ICTR-98-44A. Judgment, ach, 23 May 2005, § 220.

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been introduced before the icc. It is advisable that it should find its way here, as it would be a welcome contribution to human rights protection before the Court. Conclusion Without any doubt, current jurisprudence of the icc confirms the rich potential, fundamental role and primary importance of internationally recognized human rights for the activity of the icc. This chapter analyzed both achievements and challenges dealing with the application and interpretation of human rights before the icc. The icc has not yet said its final word on this issue, and new jurisprudence will surely come. It might address the conflict between various human rights catalogues, the relation between Article 21(3) and the principle of legality, the extensive interpretation of human rights exceeding the scope of protection existing in the jurisprudence of international human rights courts, or the relevance of human rights violation at the domestic level. It is advisable that any incoming case-law be well-reasoned and elaborated to be fit for the lead role human rights play in international criminal law. This text was prepared under the support from Grant No. CZ.1.07/2.3.00/30.0041 - Support for building excellent research teams and intersectoral mobility at Palacky University in Olomouc II (POST-UP II).

chapter 14

Brazil and the Inter-American System for the Protection of Human Rights: Conventionality Control on the Criminal Lawsuit no. 4701 Alex Ian Psarski Cabral,2 Cristiane Helena de Paula Lima Cabral,3 Mario Lúcio Quintão Soares4 Introduction Human rights protection was significantly boosted in the post-World War ii period, given the atrocities perpetrated in the fields of war. From this point, the States felt the need to establish international mechanisms aimed at the protection of rights inherent to people as humans. In 1945, then, the United Nations Organization (uno) was created with the purpose of international peace and safety, and, especially, to devise mechanisms able to not only avoid an even more devastating war, but also to institute instruments to foment individual defense before States. Three years after the establishment of the uno, in 1948, from a Resolution of the General Assembly of the United Nations, the Universal Declaration of Human Rights (udhr) was instituted and became the foundation for many international texts about the protection of individual rights. In America, the regionalism that already prevailed in the creation of the International Conference of American States, conceived in 1889, originated the Organization of American States (oas). The oas inaugurated the Inter-American Human Rights System, aimed at protecting peace and justice, but also the protection of sovereignty, territorial integrity and independence of its members. 1 Credits to Fundação de Amparo à Pesquisa—fapemig from the State of Minas Gerais, for the support. 2 Academic Professor. Candidate for a PhD in International Public Law at the Pontifical University of Minas Gerais. Master in Legal International Sciences by the The University of Lisbon School of Law. 3 Academic Professor. Candidate for a PhD in International Public Law at the Pontifical University of Minas Gerais. Master in Legal International Sciences by the The University of Lisbon School of Law. 4 LL.M and PhD in Law by the Federal University of Minas Gerais. Academic Professor.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_015

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Both the Inter-American Commission on Human Rights and the InterAmerican Court of Human Rights (ichr) were created to act subsidiarily in systematic human rights violations cases, being also entitled to determine sanctions to the signatory States. From the analysis of the constituting treaties of the Inter-American Human Rights System and its reception in Brazilian law, this chapter aims to address Criminal Lawsuit No. 470, known in Brazil as the ‘Mensalão’ case. Some aspects of the suit that culminated in the conviction of congressmen for corruption, conspiracy for crime and other offenses will be considered in light of the alleged possibility of the oas organs modifying the decision taken by the Brazilian Supreme Federal Court (stf). Namely, this chapter will analyse the arguments used by those who believe there was, in this case, a violation of the principle of the two-tiered justice system (i.e., the right to be heard by an appellate court), a misconception that could be theoretically reverted by the Commission or by the ichr by recommending the reviewing of the decision in order to protect human rights in cases in which there is privilege of forum5 for the decision of any trial. Beyond the controversy of the alleged violation of human rights in this case, the main goal is to present a ground for legal debate under a technical-scientific perspective regarding the performance of the Court. 1 The Inter-American System for the Protection of Human Rights The American Declaration of the Rights and Duties of Man, established together with the Charter of the Organization of the American States in 1948, controls not only the appropriate mechanisms of constitution and defense of human rights in the oas but also the organs that would be responsible for judging violations of the rights of American citizens. A fundamental text of human rights protection on the American continent, the American Convention of Human Rights of 1969,6 also referred to as the Pact of San José, brings up the organs responsible for the judging and processing of all questions related to the human rights violations by the American States. It is considered the milestone of the Inter-American system of human rights protection. The Inter-American system is essentially composed of two organs: the InterAmerican Commission of Human Rights and the Inter-American Court of 5 The prerogative some individuals have of being judged in a higher level of jurisdiction because of their position (Reviser’s note). 6 It is worth emphasizing that the United States of America and Canada did not ratify the San Jose Pact.

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Human Rights; each one with its singularities, but both with the intention of protecting and defending human rights, be it in favor of the oas State members or of any other State. The Inter-American Commission of Human Rights, established by the Charter of the oas of 1948, originated from the viii Resolution of the Meeting of Consultation of Ministers of Foreign Affairs in 1959. It was created with an ambivalent function,7 working simultaneously as an organ of the oas and of the American Convention of Human Rights. It is composed of seven members, and its main function is to promote the observance and the defense of human rights, with the jurisdiction to “formulate recommendations to the governments of the State members, when appropriate, in the sense of making them adopt progressive measures towards the human rights”.8 Due to its presence at the American Declaration of the Rights and Duties of Man, the Commission has jurisdiction over each of the oas State members, regardless of their adhesion to the Pact of San José. The great innovation of the Inter-American Commission is the fact that individuals can present their disputes directly to it, whenever there is a violation of human rights by one of the oas State members. The Inter-American Court of Human Rights is considered to be the judicial organ of the Organization of American States, being composed of seven judges born on the State members of the oas, and it has as its main jurisdiction the interpretation and the application of the norms from the Inter-American system of human rights protection. According to the Pact of San José, the Court will only act within the States that compose the oas and those who ratified the Pact. Nevertheless, it is possible for a State that has not yet properly ratified the American Convention of Human Rights to accept the jurisdiction of the Court.9

7 Mazzuoli, Valério de Oliveira. Os sistemas regionais de proteção dos direitos humanos—uma análise compartiva dos sistemas americano, europeu e africano. Coord: Bianchini, Alice; Gomes, Luiz Flávio; Oliveira, William Terra de. São Paulo: Editora Revista dos Tribunais, 2011. p. 24. 8 Cfr article of 41 of San Jose Pact. Organization of American States. Inter-american Convention on Human Rights (San Jose Pact). Available: . Access on Aphril 10th, 2014. 9 Organization of American States. American Convention of Human Rights (San José Pact). In: . Access on April 10th, 2014.

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According to the American Convention, the iachr’S functions are defined in two categories: (a) contentious (Articles 61, 62 and 63) and, (b) advisory (Article 64). Despite the contentious jurisdiction, it is important to highlight that the Court is not the oas system’s main jurisdiction for the resolution of the disputes that involve the interpretation of the human rights treaties, as well as any human rights violation. The Court is merely subsidiary and complementary to the States’ jurisdiction. This means that, in order to access this jurisdictional organ, it is necessary to observe multiple requirements, enumerated in Articles 48 to 50 of the American Convention. In order to act in its contentious jurisdiction, the State must consent and recognize the jurisdiction of the Court as compulsory to resolve questions concerning the interpretation of its founding treaty. This topic is utterly relevant for the procedure of the Court, as it was the object of ‘Advisory Opinion—3/83’, which stated that while there is no such consent, the Court’s jurisdiction may not be enforced, insofar as “It would make no sense, therefore, to examine the merits of the case without first establishing whether the parties involved have accepted the Court’s jurisdiction.”10 Concerning the sentences pronounced by the Court, Article 67 of the InterAmerican Convention stipulates that they shall not be appealed and that the only possibility of revision is to present, within 90 days, a request for interpretation of the ruling, with the possibility of the interpretation by any of the parties. Despite being mandatory, the decisions of the Court essentially depend on the observation of the principle of good faith by the States to enforce its measures. There are no grounds in the Inter-American Convention for the adoption of coercive measures to ensure the State’s observance of the Court’s decision.11 Regarding the State’s compensation for human rights violations, the Court’s tendency is to adopt the following measures: 10

11

Cfr informations on Organization of American States. Interamerican Cort of Human Rights. Advisory Opinion oc 3/83, September 8th, 1983. Available: < http://www.corteidh .or.cr/index.php/en/advisory-opinions>. Access on May 10th, 2014. Originally consulted text in Portuguese: “fica sem sentido examinar o mérito que soluciona a controvérsia sem antes ter estabelecido se as partes envolvidas aceitaram ou não sua jurisdição”. Cfr informations on Cançado Trindade. Antônio Augusto. El ejercicio de la función judicial internacional—memorias de la Corte Interamericana de Derechos Humanos. 2 ed. Belo Horizonte: Del Rey, 2013.

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(a) full restitution, eliminating all the effects of violation leading to the repair of the immediate damage and loss of profits. (b) interruption of illicit behavior, considered a basic prerequisite for the elimination of the consequences of international illicit behavior; it requires the offending State to interrupt its illicit behavior, but this does not prevent other forms of repair (c) compliance, defined by a set of measures able to provide extremely flexible repair methods to be chosen, in light of real situations, by the international judge (d) indemnification, requiring the offending State to pay compensation to the victim for the damage caused, in case the violation cannot be fully eliminated by the return to the status quo (e) guarantees of non-repetition, which are the obtaining of safeguards against the reiteration of the conduct offending international obligations.12 The relevance of the Inter-American system for the protection of human rights is undeniable. Alongside the European system, it is among the most complete devices of human rights protection in the world and has enabled a significant paradigm shift throughout the Americas. However, how has the attitude of the Brazilian government been towards the jurisdiction and the decisions of the Court? Supremacy and Constitutional Stiffness in the Conventionality Control: The Two-tiered Justice System in the Brazilian Constitutional Order and in the Inter-American Human Rights System In Hans Kelsen’s normative hierarchy, a norm will be inferior to another whenever the second works as the fundament of validity to the first. And whenever 2

12

Cfr Guerra, Sidney. A proteção internacional dos direitos humanos no âmbito da Corte Interamericana e o controle de convencionalidade. Revista do Programa de Pós Graduação em Direito da ufc, Ceará, vol. 32, jul/dez 2012, Available: . Access on May 10th, 2014. Original text in Portuguese: “(a) restituição na íntegra, eliminando-se todos os efeitos da violação levando-se a reparação do dano emergente e lucros cessantes; (b) cessação do ilícito, considerada exigência básica para a eliminação das consequências do ilícito internacional, devendo o Estado violador interromper sua conduta ilícita, esclarecendo-se que isso não impede outras formas de reparação; (c) satisfação, entendida como um conjunto de medidas capazes de fornecer fórmulas extremamente flexíveis de reparação a serem escolhidas em face de casos concretos, pelo juiz internacional; (d) indenização, cabendo ao Estado infrator indenizar pecuniariamente a vítima pelos danos causados, caso a violação não possa ser completamente eliminada pelo retorno ao status quo; (e) garantias de não repetição, que são a obtenção de salvaguardas contra a reiteração da conduta violadora de obrigação internacional”.

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an inferior norm deviates from the commandment of the superior norm, the former will lack validity, since there will be a violation of the formal or material aspect of its respective validity grounds.13 The Brazilian Supreme Court (Supremo Tribunal Federal—stf) has already affirmed repeatedly the supremacy of the constitution in the Brazilian legal order. This means that no legal act in a broader sense (laws, decrees, ordinances, regulations, etc.) overrides the normative force of the constitutional text. The constitution’s supremacy is guaranteed by the constitutional rigidity idea, since the text of the constitution can only be modified by following the procedure established by the National Constituent Assembly. It is on this rigidity that the constitutionality control is based and, consequently, the conventionality control. As reported by former Justice of the Brazilian Supreme Court, Carlos Mário da Silva Velloso,14 the Constitution, on no account, may subordinate itself to international treaties. This only reinforces the idea that the iachr cannot behave as an appellate level able to nullify any decision pronounced internally by Brazilian law, as will be addressed below. On the other hand, the exercise of the contentious jurisdiction of the InterAmerican Court attributes huge relevance to the conventionality control of the legislation and for the adequation of domestic law to the international treaties signed by Brazil. This is true especially regarding the founding treaties of the Inter-American Human Rights system, which aim to give effective fulfilment to the decisions emanating from the Court. In the general legal regime of international treaties in Brazilian Law, the 1988 Constitution has adopted the rule that establishes the necessity of internal homologation of an international treaty as a condition for it to produce effects in national territory. But the treaty’s normativity level is modified when it comes to human rights. Regardless of whether it relates to human rights or not, the international treaty should be internally homologated in accordance to a complex act, which presupposes approval by the National Congress, via Legislative Decree and ulterior ratification by the President of the Republic, by the publication of a Presidential Decree, according to Articles 84, viii and 49, I of the Brazilian Constitution. It must not be forgotten that, since the 1988 Constitution, there has been a significant change of paradigms with respect to the protection of human rights 13 14

Kelsen, Hans. Teoria Pura do Direito. 7 ed. Coimbra: Almedina, 2008, p. 215. Velloso, Carlos Mário. A Constituição não se subordina a tratados. Available: . Access on May 14th, 2014.

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in Brazil, the human being is now of supreme value as consecrated in the constitutional text. Such a transformation was a consequence of the moment in which the country was immersed, given the Brazilian insertion in the international scenario back then. Composing not only the universal system, but also the regional system of human rights protection, Brazil is submitted to the decisions made under the Inter-American Court and Commission of Human Rights. In 2004, the inclusion of the 3rd Paragraph in the 5th Article of the 1988 Constitution, through Constitutional Amendment Number 45, the status of constitutional amendment was attributed to the treaties which regarded human rights, thus shattering the original determination that the treaties would only have the status of ordinary statutes.15 The new status of human rights treaties in Brazil led to the need of a positioning from the Supreme Court (stf) in regard to treaties approved prior to the enactment of Constitutional Amendment No. 45. The case that established the position of the stf was the re 466343-sp.16 Based on Justice Gilmar Mendes’s thesis, the other justices determined, by five votes against four, that the forced entry of the human rights treaties approved by Brazil prior to Constitutional Amendment No. 45 would have asupralegal status, therefore situating it under the Constitution and above the infra-constitutional laws. The conventionality control can refer to the constitutionality or legality of the norms brought by the international treaties, depending on the chosen control parameter.17 When the treaties are internalized based on the 3rd Paragraph of the 5th Article, the control is processed regarding its constitutionality, given its status of constitutional norm. On the other hand, the treaty based on the 2nd Paragraph of the 5th Article of the Constitution(in other words, the treaty that contains supralegal norms), calls for a control of legality. This is the case of the Pact of San José. 15 16 17

This article is not meant to criticize the inclusion of the paragraph nor to discuss the various theories on the subject. Brasil. Supremo Tribunal Federal. re 466.343-1/SP. Rel. Min. Cezar Peluso, Tribunal Pleno, j. 03.12.2008, Dje 05.06.2009. Representing the minority, Mazzuoli uses the expression “conventionality control” only to the treaties with constitutional level. Cfr Mazzuoli, Valério de Oliveira. Teoria Geral do Controle de Convencionalidade no Direito brasileiro. Available , Access on May 15th, 2014, p. 335.

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In spite of its creation having occurred in 1969, Brazil only adhered to the Inter-American Convention of Human Rights in 1992, through Decree No. 678. Subsequently, in 1996, the country adhered to the Protocol of San Salvador, which addresses Economic, Social and Cultural Laws, and, two years later, recognized the jurisdiction of the Court through Legislative Decree No. 89. In Brazil, the sentences pronounced by the Inter-American Court will be considered as a judicial enforceable order and must be immediately executed. There is no need of homologation by the Superior Court of Justice. In matters of compensation, these will be financed by the Union. Legal action has been taken against Brazilbefore the Inter-American Commission of Human Rights, the Gomes Lundi case, also referred to as the Araguaia Guerrilla case, being one of the most notable ones. After Brazil’s disobedience to the questions presented by the Commission in September 2010, the Inter-American Court pronounced a decision unfavourable to the Brazilian State. The National Truth Commission was created as a consequence, and it is responsible for inquiring into the violations of human rights during the military dictatorship. Another emblematic case was that of Maria da Penha Maia Fernandes, which pointed out the connivance of the Brazilian State regarding violence practiced against the plaintiff. In this case, the measures presented by the Commission reverberated internally, prompting the creation of the famous Maria da Penha Statute (2006), which provided special protection mechanisms to women against domestic violence. With no doubt left to the Court’s contentious jurisdiction, it is important to consider the role of the Court, specifically in those cases in which all the resources focused on the reconsideration of controversial matters in internal level were depleted. It just so happens that, among those who advocate for the possibility of the annulment of the decision pronounced on Criminal Lawsuit No. 470, there are those who suggest the possibility of the Inter-American Court to act as an an Appelate Court for domestic decisions, which definitely does not follow. It is well-known that, regarding the exercise of criminal jurisdiction, there is no language whatsoever in the oas treaties of human rights protection which suggests that. It is imperative to concede that a performance, at these levels, by these regional jurisdictional organs, even in the Inter-American system of human rights protection, does not belong in the inter-governmental nature, which characterizes the Organization of American States. About the Inter-American Court’s performance, Cançado Trindade’s opinion is that:

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(…) they do not operate as Courts of Appeal or review of decisions of the domestic Courts. Nonetheless, the State’s internal acts may be object of examination by the international supervising organs, when it comes to verifying its conformity with the international obligations of the States in matters of the human rights.18 A major point concerns the cases judged in the first and only jurisdiction tier by the superior national Courts, i.e., when the constitutional text imposes that the highest Court acts as the only organ responsible for the judgment of criminal matters, as is the case of Brazil. The point is that an analysis of the role of the Court as a sort of an “appellate level” entails the contextualization of the two-tiered justice system both in Brazilian law and in the the Inter-American System of Human Rights. And, in this particular case, it is limited by immanent constitutional limits regarding the privilege of jurisdiction due to the prerogatives of a certain function, as it will be discussed below. The two-tiered justice system, a concept directly connected to procedural Law, refers to the prerogative conceded to any party in a lawsuit to request the reconsideration of the decision, whether by the case’s judge or by any other jurisdictional organ, since there is discontentment with the decision initially pronounced. It is deeply connected to the due process of law, but it is not the same as it, as it will be soon presented. Considering the problematic aspects around the nature of this benefit, a short analysis of the two-tiered jurisdiction in Brazilian Law and in the Pact of San José is necessary. The Brazilian Constitution presents, in its 5th article, numerous guarantees inherent to the procedures of a lawsuit, be it administrative or judicial. Categorically, in items liv and lv, which address the due process of law, the adversarial principle and full defense principle. In the same spirit, the Code of Civil Procedure, in the title specifically dedicated to appeals, established that the parties involved have the opportunity of 18

Cançado Trindade apud Piovesan. Available: . Access on May 10th, 2014. Original text in Portuguese: “(…) tampouco operam como tribunais de recursos ou de cassação de decisões dos Tribunais internos. Não obstante os atos internos dos Estados podem vir a ser objeto de exame por parte dos órgãos de supervisão internacionais, quando de trata de verificar sua conformidade com as obrigações internacionais dos Estados em matéria de direitos humanos.”

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requiring the revision of a judicial decision in a superior tier. Even though, in cases involving the Public Treasure, as well as if there is a condemnation at a value over 60 (sixty) minimum wages, the sentence, mandatorily, will be reviewed by a superior level. This review by a superior court is what the authors usually refer to as the two-tiered system. It turns out that, while there are no doubts when it comes to the juridical nature and the normative force of the due process of law, the full defense and the adversarial principles, which represent explicit constitutional guarantees, the same consensus does not exist when it comes to the two-tier principle. Part of the Brazilian doctrine states that this is a true implicit constitutional guarantee, acting as the corollary of the adversarial and full defense principles, all composing the due process of law. The relevance that the Constitution has assigned to the due process of law (5th Article, liv) is unquestionable. Moreover, it is one of the most celebrated constitutional guarantees, aimed at ensuring the effectiveness of the rights guaranteed to the citizens and providing a wider control of the legal and state acts in the Democratic Rule of Law. Laid down in various international documents, it is from the due process of law that many principles originate, such as the legal defense and the adversarial system, regardless of the procedural area in question, whether within the aspects of material or administrative law. However, a simple reading of the constitutional text makes clear that the same treatment was not given to the two-tiered principle, which does not even stand between the fundamental rights and guarantees. This is naturally because the due process of law and the two-tier principle have an autonomous existence. And the due process of law, with the guarantees of full defense and the adversarial system and others that equally follow, ensure themselves independently of the case’s review by an appellate court, as the two-tier principle proclaims. The observance of those constitutional guarantees inherent to the procedure (the due process of law, full defense and the adversarial system) is perfectly possible without the need to appeal to a superior court, mainly because there is no guarantee that the new decision, pronounced by another person or organ, will be imbued with the desired justice or correction.19 .

19

Cfr Laspro, Oreste Nester de Souza. Duplo grau de jurisidção no direito processual civil. Coleção Estudos de Direito de Processo Enrico Tullio Liebman. Vol 33. São Paulo: Revista dos Tribunais, 1993. Ticianelli, Maria Fernanda Rossi. Princípio do duplo grau de jurisdição. Curitiba: Juruá, 2005. Nery Junior, Nelson. Princípios do processo civil na

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On the other hand, if it does not configure as an explicit procedural guarantee, nothing prevents one from recognizing the two-tiered system as a principle. Consequently, its application is conditioned to the rules of interpretation for the resolution of conflicts between principles. Here one finds the classical distinction between norms as rules (all or nothing standards) and norms as principles, qualitatively different from each other, as reported by Canotilho according to the abstraction level, determinability, fundamentality, proximity of the concept of Law and of the normogenetic nature.20 Canotilho clarifies that the principles have a high abstraction level and, since they are vague and indeterminate, they demand concreting mediations, contrary to the standard rules, which have direct application. In a systematic interpretation, this mediation calls for the fitting of the principle into the legal order, in a way to harmonize them. That does not substitute the fundamental role of the principle in the scheme of the sources of law, nor its structuring nature. Furthermore, the principles are the true grounds of the rules and perform a normogenetic function. According to the author, “they are legally binding ‘standards’ rooted in the concept of justice (Dworkin) or in the concept of Law (Larenz)”.21 An interpretation of this sense would lead to the inevitable conclusion that it is enough for another judge to review the case so the two-tier principle can be fulfilled. This means that, as a principle, the two-tiered system aims—and this does not occur in every case—to the possibility of a new appreciation of the case, and this does not necessarily guarantee, per se, that rulings given by premier jurisdictions will be reviewed by appellate courts. Therefore, that ensures that the apparent absence of the principle (held in Criminal Lawsuit No. 470) is doubly overcome: (a) by the possibility of the ­filing of other procedural appeals able to promote the case’s review, as in the case of the motions for reconsideration; (b) by the need to harmonize the ­two-tiered justice system principle with the explicit guarantee of

20 21

Constituição Federal. 6 ed. São Paulo: Revista dos Tribunais, 2000. The author Antônio de Pádua Notariano Júnior understands that: “not being an expressed constitutional warranty, the two-tiered system is so a constitutional principle.” Notariano Junior, Antônio de Pádua. O duplo grau e o §3° do artigo 515 do cpc, introduzido pela Lei n° 10.352/2001. Revista de Processo, n. 114, ano 29, mar-abr, São Paulo: Revista dos Tribunais, 2004. Canotilho, J.J. Gomes. Direito constitucional e teoria da constituição. 7 ed. Coimbra: Editora Almeida, 2000. p. 1161. Canotilho, J.J. Gomes. Direito constitucional e teoria da constituição. 7 ed. Coimbra: Editora Almeida, 2000, p. 1162.

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­ rivilege of jurisdiction due to prerogatives of the position, as it will be p observed below. It is noticeable that the Pact of San José, also referred to as the InterAmerican Convention of Human Rights, brought in its 8th article the so designated judicial warranties and among them established “the right to appeal the sentence to a superior judge or tribunal”.22 And Article 2523 from the same Pact states that: 1.

2.

Everyone has the right to simple and prompt recourse, or any other effective recourse, to a competent court or tribunal for protection against acts that violate his fundamental rights recognized by the constitution or laws of the state concerned or by this Convention, even though such violation may have been committed by persons acting in the course of their official duties. The States Parties undertake: a. to ensure that any person claiming such remedy shall have his rights determined by the competent authority provided for by the legal system of the state; b. to develop the possibilities of judicial remedy; and c. to ensure that the competent authorities shall enforce such remedies when granted.

With the inclusion of this article, it was added to the roll of the rights protected by the Pact of San José, the need of compliance to the double-tiered jurisdiction by all the States which have ratified the Inter-American Convention. Such inobservance has already been addressed in an analysis by the InterAmerican Court, through a dispute presented against the Venezuelan State, called “Caso Barreto Leiva vs Venezuela”, with its sentence delivered on November 17th, 2009.24 22

23

24

Cfr. Article 8° of American Convention of Human Rights—San Jose Pact. Available: . Acess May 14th, 2014. Article 25 of American Convention of Human Rights—San Jose Pact. Available. Available: . Access on May 11th, 2014. In the referred case, the Inter-American Commission of Human Rights has presented a representation against the Venezuelan State claiming that it was not given an opportunity to the victim, within many guarantees present at the Pact of San José, the right of defense in a judicial procedure, the constitution of a lawyer, the development of evidence and also the violation of the two-tier principle.

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The 5th article of the Brazilian Constitution, in its 1st Paragraph, establishes the immediate applicability of the fundamental rights, while the 2nd Paragraph relates to the possibility of observance, by the Brazilian Law, of other rights and guarantees established in international treaties Brazil has partaken. In this way, there are no doubts that the rules provisioned in the InterAmerican Convention can be applied and used by individuals in judicial disputes. And when it comes to the status of the treaty in Brazilian juridical planning, the country’s Supreme Court has already opted by its prevalence facing the infra-constitutional rules, so it has a supra-legal status. Initially, the Inter-American Court of Human Rights only has the jurisdiction to appreciate eventual human rights violations complaints by the Brazilian State after the presentation of the request against Brazil in the Inter-American Commission of Human Rights. Only then will the Commission analyze the matter and be able to present or not recommendations to be followed by Brazil. From this point on, if the recommendations are not observed, the Commission will be authorized to send accusations against Brazil to the Court. Without the intention of entering the criminal merit of the accusation in the judgment of Criminal Lawsuit No. 470, this item will focus on the polemic aspects around possible violations of human rights practiced by the Federative Republic of Brazil, in the referred case. It is well known that forty defendants were indicted by the practice of crimes provisioned in the Brazilian criminal legislation, such as conspiracy (Article 288), speculation (Article 312) and active corruption (Article 333). The defendants, among them members and former members of the Brazilian parliament, were condemned in a decision pronounced by the Supreme Court. Throughout the trial, questions regarding possible rights and fundamental guarantees violations were presented, some of these rights and guarantees provisioned in the Pact of San José. One of those violations refers to the 8th Article, 2, “h”, which deals with the possibility of appealing from judicial decisions to a superior judge or Court. The question is not so simple. As previously noted, it involves the concept of “privilege of jurisdiction by prerogative of function”, expressly established in the Brazilian Constitution. Article 102, I, “b”, of the Constitution dictates the original jurisdiction of the Supreme Court to process and to judge common criminal infractions in which the members of the National Congress are defendants, for example. This procedural warranty is conceded due to the role or function which the determined person occupies at the moment the crime is committed, and its

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purpose is to avoid the creation of ad hoc Courts, as well as assuring the respect to the principle of equality and public interest. The legislator’s option was to guarantee that individuals who exercise certain public functions were judged by collegiate organs, avoiding contradictory judgments and providing unity in the judgments criteria, aiming to the public interest. For those reasons, it is perfectly acceptable that the internal law of the State brings up provisions concerning the jurisdiction of specific Courts for the judgment of persons who exercise functions defined by law. It is a special protection of the society’s interest through the concession of privilege to the person who exercises any public role. The Brazilian Code of Criminal Procedure (Código de Processo Penal—cpp) itself (Article 69) establishes that connection and continence (item v) and the function prerogative (item vii) determine the judicial jurisdictions. In addition, it states that the jurisdiction for judging individuals with this prerogative will be of the Supreme Court, the Superior Federal Court of Justice (Superior Tribunal de Justiça—stj), the Regional Federal Courts and the Courts of Justice of the States and the Federal District, according to Article 84. Besides that, the cpp states that, when there are infractions committed by several persons, or when they were accused for the same infraction (Articles 76 and 77), the process may be evoked due to the the connection and continence, prevailing the agent’s special jurisdiction. The fact is that when the legal text establishes the jurisdiction of a Court to the examination of cases which involve the prerogative of function, there can be conflicts with certain procedural principles, such as, for example, the twotiered principle.25 In Brazil, the Supreme Court is the organ in the highest tier of the Judiciary, with appellative jurisdiction to appreciate cases in ordinary or extraordinary levels of appeal. As previously stated, the Constitution has also attributed to this Court the original jurisdiction to appreciate lawsuits in which the infractions were committed by certain individuals. In those cases, the lawsuit originally filed in the stf is doomed to not observe the two-tiered system principle, since there is no other Court to which 25

Considered if the eventual questionings about the curtailment of defense to the defend­ ants which did not have privileged jurisdiction should have been done from the moment of the complaint’s presentation, in 2007, and when after the delivery of the judgment by the Supreme Federal Court, when it was common knowledge that the two-tier principle could not be respected.

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the Constitution has given the ability to exercise this appellative competence above the stf. In an attempt to solve those questions, the stf’s Internal Regulation,26 in its Article 333, provisions the possibility for the filing of a motion for reconsideration when there is a non-unanimous decision of the Plenary or the Group which rules the criminal action in favor of the prosecution (item i); which judges the criminal revision unfounded (item ii); which judges the motion to set aside judgment (item iv); which, in an ordinary criminal appeal, was unfavorable to the defendant (item v). In this sense, and considering the exercise of its original jurisdiction, the admission of a motion for reconsideration in the criminal action guarantees to the party the right to appeal and, then, make use of the two-tiered system. Although this decision is not reviewed by another Court, a new judgment of the case is possible. The analysis requires the following question: how to reconcile the privilege of jurisdiction by prerogative of function and the double-tiered jurisdiction? Logically, in these situations, the interpretation will always be the task of the Judiciary. When analyzing the dispute, it should apply the best solution to the case, thus adopting the criteria of interpretation it sees fit, like the analogy, for example. In the Inter-American Court of Human Rights precedents, a case has been specially invoked as a parameter for the thesis of the need of the annulment of the “Mensalão” judgments: the precedent of the case Barreto Leiva vs. Venezuela. In 2008, the Inter-American Commission presented a dispute against Venezuela to the iachr for the non-commitment of its recommendations for a violation of processual guarantees to Barreto Leiva. According to it, the right of full defense, the natural judge and the two-tier jurisdiction principles were all limited, as well as other violations referred to the absence of summoning and previous, detailed communication about the accusation. From all the points disputed in the judgment of the Court, the two-tiered principle is the one that deserves the biggest emphasis, since it was used for justifying the possibility of an annulment within the “Mensalão” judgment. Certainly, the iachr has already pacified the understanding that the parts, in a criminal procedure, have the right to appeal with the aim of protecting the right of defense and provoke a review of the contested decision. 26

Brasil. Supremo Tribuinal Federal. Regimento Interno. Available: . Access on May 10th, 2014.

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In this case, the decision of iachr was in the sense of determining that Venezuela recognized to Barreto Leiva the possibility to appeal against the judgment, with the right to revise the entire judgment and to verify if all the requirements under domestic law had been properly respected. Besides, the iachr has also condemned Venezuela to make its internal juridical planning adequate, at a reasonable term, in order to allow that the two-tiered systemright to appeal would be offered to anybody, including those who have special privileges due to the roles they perform. It is worth saying, under the Inter-American system, that the integrating States have formally recognized the Inter-American Court of Human Rights jurisdiction as mandatory to decide based on the Pact of San José. The states themselves who underwent the jurisdiction of the Inter-American Court of Human Rights were acting with absolute sovereignty. This means that these States undertook the effect of their own political and legal desire to comply with the decision of the iachr. However, although mandatory, these decisions lack effective means of coercion for its enforcement, guiding themselves primarily on the contractual pacta sund servanda dogma, absorbed by the law of treaties. In the case Barreto Leiva vs. Venezuela, for example, the Court’s decision was in favor of a new judgment, but that judgment never occurred. On September 6, 2012, Venezuela signed an instrument of termination of the InterAmerican Convention on Human Rights. Despite this decision, it is important to note that the very judgment issued by the iachr recognizes the ability of the State to adopt privileged forums for trial of persons occupying public office, in order to ensure maximum legitimacy for the procedure. On the other hand, although the Inter-American System and the European System of Protection of Human Rights do not match, there is nothing to prevent one from eventually inspiring the other. The Court of San José, Costa Rica, is not bound in any way to the European Convention on Human Rights and its Additional Protocols (and vice versa). But, when considering the same subject—the protection of human rights— the jurisprudence of the Strasbourg Court has been invoked by analogy in similar cases. In the European System, the principle of the two-tiered system is not an absolute principle, and contemplates exceptions. One of them is precisely the situation of the existence of a privileged forum, examined in the core of due process provided for in the 6th article of the Convention for the Protection of Human Rights and Fundamental Freedoms.

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There, the procedural privilege of being judged originally by the highest court of a country due of the function performed, even when culminated with the inability to appeal to a higher court, does not imply a violation of the principle of due process. Instead, in light of the juridical parameters of proportionality, the conflict is treated from the need to balance the values of the supremacy of the public interest, an object of the prerogative of function, and the individual interests of deputies and senators. However, as obvious the Venezuelan case may seem, it will never submit to the jurisdiction of the European system. The analogy, while useful, will not be able to resolve itself, in the way the conflict is presented. Likewise, a situation of threat to human rights in Venezuela, though it may be a useful analogy in some respects, may not supply a parameter for interpretation for the Brazilian case. Even though it may be in the same Inter-American system, the asymmetries between Venezuela and Brazil, mainly in the field of human rights, are notorious. Regardless of the controversy about whether or not the Ushuaia Protocol of 1998, establishing the democratic commitment and configured as mandatory clause for Access to the Mercosur, was being followed, the fact is that there are serious doubts as to the evolution of the democratic process in Venezuela. And the decision pronounced by the Court has a different complexity when it comes to systematic human rights violations, which, definitely, did not happen in the Brazilian case. In contrast, both the constitutional principle of due process, which inspires the two-tier jurisdiction, and their natural unfolding—a full defense and the adversarial system—were fully achieved, properly supported as expressed in the 1988 Constitution. Conclusion As pointed out, the jurisdiction of the Inter-American Court of Human Rights is restricted to the protection of people and to the requirement of adequate compensation for eventual violations, as determined in human rights treaties. The regional system of human rights protection is intended neither to judge individual behavior nor to undertake individual criminal conviction. The trial of individuals is of the responsibility of the International Criminal Court, according to provisions included in the Rome Statute.

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Moreover, the action of the court is subjected to the submission of a direct claim to it, either by the Inter-American Commission or by another Member State. Their decisions, although mandatory, still lack effective means of coercion, for their effectiveness is guided primarily by the contractual pacta sund servanda dogma, absorbed by the law of treaties. In the Barreto Leiva vs Venezuela case, the Court’s decision favored a new trial that never occurred. Instead, on September 6, 2012, Venezuela signed an instrument of termination of the American Convention on Human Rights, relieving itself from its commitments to the Inter-American Human Rights System. The fact of the matter is that, through the conventionality control mechan­ ism, Brazil must bring its domestic legislation into line with the international instruments to which it is bound. The proposal is to consolidate the devices present in its own Constitution, thus avoiding conflicts with international norms. After all, in spite of the supremacy of the Constitution and the rule of constitutional rigidity, there is no way to disregard the rules arising from international treaties, which also comprise the Brazilian legal system. This is what occurs specifically in the conflict between the two-tier principle laid down by the rules of the San José Pact and the privilege of jurisdiction by prerogative function, as expressly contemplated by the 1988 Constitution. The episode is sustained in the absence of criteria for deliberation between the privilege of jurisdiction by prerogative function and the double-tiered jurisdiction. This absence does not occur in the European system of human rights protection, which is expressed to honor the former at the expense of the second exception. It is clear that, in cases filed directly in the Supreme Court, it will not be possible to apply the second tier in the strict sense, given that there is no other court above the court responsible for safeguarding the Constitution. But generically speaking, adopting a two-tiered perspective as the review of the case is perfectly possible. In any case, it is necessary to understand the true meaning and the real legal basis of a judicial system stratified into two tiers. There is no doubt that the two-tier is applicable to the process development principle, whether it is civil, criminal or administrative. Once the nature of this principle is recognized, consequently, its application is conditioned by rules of hermeneutics for the resolution of conflict between principles. However, contrary to due process, the double-tiered jurisdiction does not constitute an express procedural guarantee. And the reason for that is the

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fact that the observance of constitutional guarantees relating to due process is entirely possible without having to necessarily appeal to a higher court. Mainly because there is no guarantee that the new decision, pronounced by another person or organ of higher tier, will be imbued with the desired justice or righteousness. Because of that, one should take into account that this is not an absolute principle, since its relativization does not mean a violation of the adversarial and full defense principles. Even among the defenders of the violation thesis, there are those who agree that a claim such as this, when subsisting, occurs not only in procedural last moment, but given its severity, should be recorded and repeated from the first moments of the criminal action. Specifically in the case of “Mensalão”, had the inobservance of the two-tier principle effectively contributed to the stifling of the defense, this infringement should have been mentioned at the first opportunity, when the complaint was accepted by the Supreme Court, in 2007. Additionally, it is clear that the procedural essence of the two-tier principle was fully met in this criminal action, given the possibility of review of the decision was provided and the subsequent examining of the motion for reconsideration. Definitely, in the presented case, neither the natural jurisdiction of the Supreme Federal Court, nor the connection between the conduct of the defendants represented no obstacle to due process. On the other hand, one cannot deny that, considering the primary function of the stf as it was proposed by the Constituent Assembly as the American model, its performance should be restricted to cases involving conflicts with the constitutional text. The responsibility for acting as responsible for the prosecution of criminal offenses of those who hold certain public offices would certainly be better exercised if originally left to the Superior Court to charge, allowing the Supreme Court to the appealing instance. Also, there is no impediment to the Inter-American Court deciding to pre­ sent suggestions to the Brazilian state, such as for example, the adequacy of the rule of establishing jurisdiction of the privileged forum to the two-tier principle, present in the San Jose Pact. However, what is really not possible is to glimpse a mistrial in the case of the “Mensalão” as recommended in Venezuela, since, in the Brazilian case, there is not objectively any disrespect to set standards to protect human rights. Should this occur, in our view, the same purposes, which entailed the construction of the Inter-American system—rooted in human rights protection— could become seriously compromised.

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And as there is no definitive reason for this to occur, a mistrial in the case of the “Mensalão” could honor impunity, impacting negatively on the Brazilian and international society. More than that, it could jeopardize the future of the Court and the Inter-American System of Human Rights itself. Bibiliography Basile, Juliano. Brasileiro assume vaga na Corte de São José. Valor Econômico, Brasília, 04 de fevereiro de 2013. Available: < http://www.aer.adv.br/upload/noticias/anexo/ 74.JPG>. Access on May 14th, 2014 Brasil. Constituição da República Federativa do Brasil, 05 de outuvro de 1998. Available: . Access on May 10th, 2014. Brasil. Decreto n° 4.338, 25 de setembro de 2002. Promulga o Estatuto de Roma do Tribunal Penal Internacional. Available: < http://www.planalto.gov.br/ccivil_03/ decreto/2002/D4388.htm>. Access on 15th May, 2014. Brasil. Decreto 678, 06 de novembro de 1992. Promulga a Convenção Americana sobre Diretos Humanos (Pacto de São José da Costa Rica), de 22 de novembro de 1969. Available: . Access on May 10th, 2014 Brasil. Decreto Lei n° 3.689, 03 de outubro de 1941. Código de Processo Penal. Available: . Access on May 14th, 2014 Brasil. Supremo Tribunal Federal. RE 466.343-1/SP. Rel. Min. Cezar Peluso, Tribunal Pleno, j. 03.12.2008, Dje 05.06.2009. Brasil. Supremo Tribunal Federal. Regimento Interno. Available: . Access on May 10th, 2014 Brasil. Supremo Tribunal Federal. Ação Penal 470-MG. Voto Ministro Celso de Mello. Available: . Access on May 14th, 2014 Brasil. Supremo Tribunal Federal. ADIN 1480-DF. Rel. Ministro Celso de Mello, Tribunal Pleno, j. 04.09.1997, Dje 18.05.2001. Cançado Trindade, Antônio Augusto. O esgotamento de recursos interno no direito internacional. Brasília: Editora Universidade de Brasília, 1984. Cançado Trindade. Antônio Augusto. El ejercicio de la función judicial internacional— memorias de la Corte Interamericana de Derechos Humanos. 2 ed. Belo Horizonte: Del Rey, 2013

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Canotilho, J.J. Gomes. Direito constitucional e teoria da constituição. 7 ed. Coimbra: Editora Almeida, 2000 Dinamarco, Cândido Rangel. A reforma da reforma. 4 ed. São Paulo: Malheiros, 2002. Europe. Europe Council. European Convention on Human Rights. Rome, November 04th, 1950. Available: . Access on May 16th, 2015. European Union. European Court of Human Rights. Available: . Access on May, 15th 2014. Guedes, Gabriel Pinto. O duplo grau de jurisdição nos processo de competência originária da Corte Superior. Anais de Ciências Criminais, Pontifícia Universidade Católica do Rio Grande do Sul, vol IV, n. 22. Available: . Access on May 15th, 2014. Guerra, Sidney. A proteção internacional dos direitos humanos no âmbito da Corte Interamericana e o controle de convencionalidade. Revista do Programa de Pós Graduação em Direito da UFC, Ceará, vol. 32, jul/dez 2012, Available: < http://pt.scribd. com/doc/219147420/A-PROTECAO-INTERNACIONAL-DOS-DIREITOS-na-CIDH>. Access on May 10th, 2014 Jayme, Fernando Gonzaga. Direito humanos e sua efetivação pela Corte Interamericana de Direitos Humanos. Belo Horizonte: Del Rey, 2005. p. 91. Kelsen, Hans. Teoria Pura do Direito. 7 ed. Coimbra: Almedina, 2008 Laspro, Oreste Nester de Souza. Duplo grau de jurisidção no direito processual civil. Coleção Estudos de Direito de Processo Enrico Tullio Liebman. Vol 33. São Paulo: Revista dos Tribunais, 1993 Mazzuoli, Valério de Oliveira. Os sistemas regionais de proteção dos direitos humanos— uma análise compartiva dos sistemas americano, europeu e africano. Coord: Bianchini, Alice; Gomes, Luiz Flávio; Oliveira, William Terra de. São Paulo: Editora Revista dos Tribunais, 2011. Mazzuoli, Valério de Oliveira. Teoria Geral do Controle de Convencionalidade no Direito brasileiro. Available: , Access on May 15th, 2014. Mercosur. Protocolo de Ushuaia sobre o Compromisso Democrático no Mercosul, Bolívia e Chile. 24 de julho de 1998. Available: . Access on May 14th, 2014 Nery Junior, Nelson. Princípios do processo civil na Constituição Federal. 6 ed. São Pulo: Revista dos Tribunais, 2000 Notariano Junior, Antônio de Pádua. O duplo grau e o §3° do artigo 515 do CPC, introduzido pela Lei n° 10.352/2001. Revista de Processo, n. 114, ano 29, mar-abr, São Paulo: Revista dos Tribunais, 2004. Organization of American States. American Convention on Human Rights (San Jose Pact). Available: . Access on May 10th, 2014

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Organization of American States. Inter-American Court on Human Rights. Advisory Opinion OC 3/83, September 8th, 1983. Available: < http://www.corteidh.or.cr/index .php/en/advisory-opinions>. Access on May 10th, 2014. Organization of American States. Charter of the Organization of American States, February, 27th 1967. Available: . Access on May 10th, 2014. Organization of American States. Inter-American Commission on Human Rights. Available: . Access on May 10th, 2014. Organization of American States. Inter-American Commission on Human Rights. Available: . Access on May 10th, 2014. Organization of American States. Inter-American Commission on Human Rights. Case 11.552 Julia Gomes Lund and others (Guerrilha do Araguaia). Available: < http:// www.oas.org/pt/cidh/decisiones/demandas.asp>. Access on May 10th, 2014; Organization of American States. Inter-American Commission on Human Rights. Case Barreto Leiva vs Venezuela. November 17th, 2009. Available: < http://www.corteidh .or.cr/docs/casos/articulos/seriec_206_esp1.pdf>. Access on May 14th, 2014 Organization of American States. Inter-American Commission on Human Rights. Case 12.051 Maria da Penha Maia Fernandes. Available: . Access on May 10th, 2014 Piovesan, Flávia. A Justicialização do Sistema Interamericano de Proteção dos Direitos Humanos: Impacto, Desafios e Perspectivas. Available: < http://www .internationaljusticeproject.org/pdfs/Piovesan-writing-1.pdf>. Access on 15 de maio de 2014. Santos, Alberto Silva. A internacionalização dos direitos humanos e o sistema interamericano de proteção. Belo Horizonte: Arraes Editora, 2012. Santos, Marina França. Fundamentos da garantia fundamental do duplo grau de jurisdição. Available: . Access on 10 de maio de 2014. pp. 75–76. Ticianelli, Maria Fernanda Rossi. Princípio do duplo grau de jurisdição. Curitiba: Juruá, 2005 Tourinho Filho, Fernando. Processo Penal. 24 ed. vol. II, São Paulo: Saraiva, 2002, p. 126 United Nations General Assembly. Universal Declaration of Human Rights, December 10th, 1948. Available: . Access May 15th, 2014. Velloso, Carlos Mário. A Constituição não se subordina a tratados. Available: < http:// www.iabnacional.org.br/IMG/pdf/doc-10051.pdf>. Access on 14 de maio de 2014

Part 4 Dispute Resolution Mechanisms Concerning International Trade and Investment, in Particular within the wto and icsid

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chapter 15

Investor-State Dispute Settlement in the European Perspective: Recent Developments Dário Moura Vicente i

Outline of the Problem

Investor-State Dispute Settlement and Its Importance in Enforcing International Investor Protection Diplomatic protection by an investor’s home State is the classical mechanism available under International Law in order to ensure redress of damage caused by wrongful acts or omissions of the host State.1 It has, however, a number of well-known shortcomings. On the one hand, it is subject to the exhaustion of local remedies of the host State, which may be time-consuming and biased towards that State. On the other hand, its exercise is discretionary, since the home State of the aggrieved party may freely decide whether and in what terms it will take action against another State on its behalf.2 It is in this context that Investor-State Dispute Settlement (isds) mechan­ isms have recently experienced an extraordinary development. By allowing 1

1 See, on the notion, scope and terms of exercise of diplomatic protection, the Draft articles on Diplomatic Protection adopted by the United Nations International Law Commission in 2006 (available at http://legal.un.org). On the diplomatic protection of investors, see Fausto de Quadros, A protecção da propriedade privada pelo Direito Internacional Público, Coimbra, 1998, pp. 387 et seq.; Christoph Schreuer, “Investment Protection and International Relations”, in A. Reinisch/U. Kriebaum (eds.), The Law of International Relations. Liber Amicorum Hanspeter Neuhold, The Hague, 2007, pp. 345 et seq.; Ben Juratowitch, “The Relationship between Diplomatic Protection and Investment Treaties”, icsid Review, 2008, pp. 10 et seq.; Gabrielle Kaufmann-Kohler, “Non-Disputing State Submissions in Investment Arbitration: Resurgence of Diplomatic Protection?”, in Laurence Chazournes/Marcelo Kohen/Jorge Viñuales (eds.), Diplomatic and Judicial Means of Dispute Settlement, Leiden, 2012, pp. 305 et seq. 2 See, in this sense, the ruling rendered by the International Court of Justice on 5 February 1970 in the Barcelona Traction case, in which the Court affirmed: “The State must be viewed as the sole judge to decide whether its protection will be granted, to what extent it is granted, and when it will cease. It retains in this respect a discretionary power the exercise of which may be determined by considerations of a political or other nature, unrelated to the particular case” (International Court of Justice Reports, Advisory Opinions and Orders, 1970, pp. 3 et seq., no. 79).

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_016

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investors to bring claims directly against host States before an independent and neutral jurisdiction, e.g. an arbitral tribunal, for the breach of their obligations, without requiring them to submit their claims to the domestic courts of those States or to request diplomatic protection from their home States, those mechanisms have depoliticized investment disputes and provided investors with a much bolder enforcement mechanism for their entitlements under International Law. isds mechanisms have further allowed investors to rely directly on rules contained in international investment agreements, which in some countries may only be applied by local courts after they have been transposed into internal law. Investor-State Dispute Settlement within the Context of International Investment Agreements In the past fifteen years, isds cases have proliferated, largely thanks to provisions contained in International Investment Agreements (iias) that expressly allow foreign investors to resort to arbitration against their host States in the case of non-compliance with any of their rules.3 There are currently about 3000 such agreements, both bilateral (bits)4 and multilateral (such as the North American Free Trade Agreement signed in San Antonio, Texas, on 17 December 1992,5 and the Energy Charter Treaty,6 concluded in Lisbon on 17 October 1994). Typically, bits comprise two parts. The first one contains a number of rules concerning the substantive protection of foreign investments, such as the prohibition of expropriations and nationalizations without adequate compensation, the right to fair and equitable treatment, the prohibition of arbitrary and discriminatory measures, the free transfer of funds related to investments and the most favorable nation clause.7 In the second part, Contracting States ­usually give their assent to the settlement by arbitration of disputes related to investments made in their territories by a national of the other Contracting 2

3 On this see Dário Moura Vicente, “Arbitragem de Investimento: a Convenção icsid e os Tratados Bilaterais”, Revista da Ordem dos Advogados, 2011, pp. 751 et seq. 4 See the list of bits available at https://icsid.worldbank.org. 5 Available at http://www.naftanow.org. The protection of foreign investment, as well as dispute settlement, are regulated in Chapter 11 of the agreement. 6 Available at http://www.encharter.org. The promotion and protection of foreign investment are regulated in part iii and dispute settlement in part v of the Treaty. 7 For a synthesis of contemporary tendencies in the substantive protection of foreign investments as set out in oecd member states’ bits, see Marie-France Houde, “Novel Features in Recent oecd Bilateral Investment Treaties”, in International Investment Perspectives, Paris, 2006, pp. 143 et seq.

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State, provided that negotiations for that purpose were unsuccessfully undertaken for a given period of time (the “cooling off period”). Ordinarily, no duty to exhaust local means is imposed. In order to trigger the arbitral mechanism, the investor only has to notify the host State of his consent and of the intent to arbitrate. The consensus thus formed replaces the arbitration agreement, which is indispensable in international commercial arbitration.8 If, however, the investor opts to sue the host State before its domestic courts, the arbitration route will as a rule be excluded for him (this is the so-called “fork in the road clause”).9 According to data published by the United Nations Conference on Trade and Development (unctad), between 1987 and 2013 the overall number of known treaty-based arbitrations reached 568.10 Since there is no international registry of such arbitrations, the total number is however likely to be higher. In recent years, damages claimed and awarded in those arbitrations have reached extremely high amounts. Such was the case in Occidental Petroleum v. Ecuador (decided in 2012),11 concerning the expropriation of the claimants’ investments in the Republic of Ecuador, in which the defendant State was ordered to pay $1.77 billion to the claimants; in Al-Kharafi v. Libya (decided in 2013),12 in which Libya was ordered to pay compensation in excess of $935 million to an investor seated in Egypt for the breach of a contract for the construction of a tourist resort in Tripoli; and in the proceedings commenced by the former shareholders of the Russian oil company Yukos (decided in 2014),13 concerning the expropriation of their investments in this country, in which three awards were given ordering the defendant State to pay an aggregate amount of approximately $40 billion to the claimants. isds mechanisms have 8

See Julian Lew/Loukas Mistelis/Stefan Kröll, Comparative International Commercial Arbitration, The Hague/London/New York, 2003, p. 764. 9 See, in this sense, the arbitral award rendered in Pantechniki S.A. Contractors & Engineers (Greece) v. The Republic of Albania (icsid Case No. ARB/07/21), available at https://icsid .worldbank.org. 10 See unctad, World Investment Report 2014, New York/Geneva, 2014, p. 124. 11 See Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of Ecuador (icsid Case No. ARB/06/11), available at https://icsid .worldbank.org. 12 See Mohamed Abdulmohsen Al-Kharafi & Sons Co. v. Libya and others available at http:// www.italaw.com. 13 See Hulley Enterprises Limited (Cyprus) v. The Russian Federation (pca Case No. aa 226); Yukos Universal Limited (Isle of Man) v. The Russian Federation (pca Case No. aa 227); and Veteran Petroleum Limited (Cyprus) v. The Russian Federation (pca Case No. aa 228), available at http://www.pca-cpa.org.

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thus become the means of settling some of the largest financial disputes in contemporary history. The European Union’s Competences in Regard to Foreign Trade After the Lisbon Treaty According to unctad, European investors are the most frequent users of isds, as they have been responsible for 53% of cases commenced between 1987 and 2013. In 2013, 42% of known new cases were commenced against eu Member States.14 Also for these reasons, isds has gained enormous significance for the European Union. The entry into force in 2009 of the Treaty of Lisbon has however introduced a major change in the international framework of isds.15 In fact, article 207(1) of the Treaty on the Functioning of the European Union (tfeu), as amended by the Lisbon Treaty, has included the negotiation and conclusion of iias among the eu’s exclusive competences.16 Although this “multilateralization” of investor protection, as some have called it,17 inevitably involves a certain loss of autonomy for eu Member States, it also allows them, as well as investors seated in them, to benefit from the greater bargaining power of the eu vis-à-vis third States and from a potentially wider network of treaties. As its first steps in exercising these competences, the eu concluded negotiations in 2014 for the eu-Canada trade agreement (the Comprehensive Economic and Trade Agreement or ceta) and the eu-Singapore Free Trade Agreement, and it began talks for a trade agreement with the us (the Transatlantic Trade and Investment Partnership or ttip), on the contents of which the European Commission has conducted a public consultation.18

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Op. cit., p. 125. See, on this issue, Dário Moura Vicente, “El arbitraje de inversiones y las nuevas competencias de la Unión Europea conforme al artículo 207 del tfue”, Arbitraje: Revista de arbitraje comercial y de inversiones, 2012, volume 3, pp. 9 et seq., with further references. According to which: “The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union’s external action”. See Christoph G. Benedict, “The Multilateralization of Investment Protection under the Lisbon Treaty: Fears and Hopes of Investors”, icsid Review, 2009, pp. 446 et seq. See the analysis by the European Commission of the results of that consultation in Online public consultation on investment protection and investor-to-state dispute settlement (isds) in the Transatlantic Trade and Investment Partnership Agreement (ttip), document SWD(2015) 3 final, Brussels, 13 January 2015, available at http://trade.ec.europa.eu.

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It is unclear, however, whether the Union’s competence to enter into these agreements is an exclusive one or must be shared with Member States, in which case the latter should also ratify them. Article 207 tfeu only refers to direct foreign investment, whereas the agreements at stake also comprise indirect investment, including portfolio investments in which the investor usually exerts no influence over the management of companies that serve as vehicles for the investment. A positive reply to the above-mentioned question may nevertheless be inferred from articles 3(2) and 63(1) of the tfeu,19 since portfolio investments affect the free movement of capitals. The issue is however controversial and will ultimately have to be decided by the Court of Justice of the European Union. 4 The “Grandfathering” Regulation The new eu competences in regard of iias have, however, not automatically terminated the existing bits between eu Member States and third countries. The status of these bits was defined by Regulation (eu) no. 1219/2012, of 12 December 2012,20 also known as the “grandfathering” Regulation,21 which sets out a number of transitional provisions for bits between eu Member States and third countries.22 This Regulation allows bits signed before 2009 to stay in force until a new agreement is concluded between the eu and the third country; it further allows 19

Which state, respectively, that: “The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope”; and “Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited”. 20 Published in the Official Journal of the European Union, no. L351, of 20 December 2012, pp. 40 et seq. 21 A grandfather clause being the term used in American law to refer a legal provision that keeps in force an old rule in regard of certain situations and determines the applicability of a new rule to future situations. In this case, bits entered into before the Lisbon Treaty continue to apply by virtue of the said regulation until they are replaced by new agreements. 22 See, on this regulation, Nikos Lavranos, “In Defence of Member States’ bits Gold Standard: The Regulation 1219/2012 Establishing a Transitional Regime for Existing Extra-EU bits— A Member State’s Perspective”, Transnational Dispute Management, volume 10 (2013), issue 2; Maria João Palma, “A nova política europeia de investimento decorrente do Tratado de Lisboa—o Regulamento grandfathering e a articulação entre a competência da União Europeia e as competências remanescentes dos Estados-Membros”, forthcoming in Revista Internacional de Arbitragem e Conciliação, volume 8 (2015).

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Member States to negotiate and conclude new bits if so authorized by the eu; and it provides that the Commission will have the right to participate in any isds proceedings commenced under such bits. The enforceability of existing Member States’ extra-eu bits was thus confirmed by this Regulation. They therefore constitute an important legacy that the eu has received from the Member States. The European Union as a Party to Investor-State Dispute Settlement and the Problems it Raises Although the bits already concluded at the time of the entry into force of the Treaty of Lisbon were preserved in the terms defined in the grandfathering Regulation, agreements concluded between the Union and third countries will eventually replace them. Regarding investor protection in these agreements, several problems arise, which may be summarized as follows:

5

a) Should isds, notably arbitration, be retained by the eu as the preferred dispute-settlement mechanism? b) If yes, what are the arbitration venues available to the eu? c) Are current isds mechanisms compatible with the competences of the Court of Justice of the European Union concerning the interpretation of eu Law? d) How should the financial responsibility arising from isds be apportioned between the eu and Member States? These are the issues that this paper will now address. ii

Problems Posed by the Current Regulatory Framework of InvestorState Dispute Settlement

The Need for Greater Transparency, Independence and Predictability in Investor-State Dispute Settlement A reply to the first of those questions calls for a reflection on the problems posed by the current regulatory framework of isds, which has been the object of several criticisms.23 These include the following: 6

23

On which see notably Gus Van Harten, Investment Treaty Arbitration and Public Law, Oxford, 2007; idem, Why Arbitrators not Judges? Comment on the European Commission’s approach to investor-state arbitration in ttip and ceta, 2014, available at http://ssrn.com.

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b)

c)

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Lack of transparency—International arbitration is generally confidential. The International Center for the Settlement of Investment Disputes (icsid) and the Permanent Court of Arbitration (pca), which are frequently chosen to administer investment arbitrations, publish on their websites a list of cases and most awards rendered by arbitral tribunals set up under their auspices; but proceedings conducted according to their rules are ordinarily not open to the public.24 In ad hoc arbitrations awards are as a rule not published (or at least were not so until recently). This is deemed by many as inappropriate in cases involving States, given the public interests involved. Lack of independence—Arbitrators may easily incur in conflicts of interests, in particular when they act simultaneously as counsel in other arbitrations; and the repeat appointment of the same persons as arbitrators potentially jeopardizes their independence in regard of the conflicting parties.25 Lack of predictability of arbitral awards—Since no appeal is ordinarily allowed from arbitral awards, divergent interpretations of identical or similar provisions contained in iias may occur, leading to uncertainty in respect of investors’ rights and host States’ liabilities.

The United Nations’ Resolutions on Transparency in Treaty-based Investor-State Arbitration The United Nations Resolution no. 68/109, of 16 December 2013,26 has addressed some of these problems. It recognizes the value and widespread use of arbitration as a method of settling investment disputes. Yet it also recognizes the need for greater transparency in such arbitrations, in order to take account of the public interests involved. For this purpose, that Resolution has adopted the United Nations Commission on International Trade Law Rules on Transparency in Treaty-Based InvestorState Arbitration,27 providing inter alia for the publication of certain documents concerning investment arbitrations, the possibility of submissions by third parties (amici curiae) and the publicity of hearings.

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26 27

See on these institutions Ruth Mackenzie/Cesare Romano/Yuval Shani, The Manual on International Courts and Tribunals, 2nd ed., Oxford, 2010, pp. 101 et seq. See Albert Jan van den Berg, “Qualified Investment Arbitrators?”, in Patrick Wautelet/ Thalia Kruger/Govert Coppens (eds.), The Practice of Arbitration. Essays in Honour of Hans van Houtte, Oxford/Portland, 2012, pp. 53 et seq. Available at http://www.un.org. Available at http://www.uncitral.org.

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These rules have been in force since 1 April 2014 and apply to all arbitrations conducted under the uncitral Arbitration Rules on the basis of an iia concluded after that date, except if the parties agree otherwise. On 10 December 2014, the UN General Assembly has approved Resolution no. 69/116 whereby the United Nations Convention on Transparency in TreatyBased Investor-State Arbitration was adopted. Under this Convention Parties to investment treaties concluded before 1 April 2014 express their consent to apply the UNCITRAL Rules on Transparency. These Rules shall apply to any investorState arbitration, whether or not initiated under the UNCITRAL Arbitration Rules, in which the respondent is a Party that has not made a relevant reservation under its provisions, and the claimant is of a State that is a Party that has also not made such a reservation. The Convention applies to investor-State arbitrations commenced after the date when it enters into force in respect of each Party concerned. It was opened for signature in Port Louis, Mauritius, on 17 March 2015, and shall enter into force six months after the date of deposit of the third instrument of ratification, acceptance, approval or accession. Investor-State Dispute Settlement’s Impact on the Exercise of State Regulatory Powers Another problem raised by isds is the risk of a “chilling effect” on the exercise by States of their regulatory powers: in order to avoid paying high compensations to foreign investors, States may, according to this line of reasoning, refrain from adopting environmental, labor, consumer, public health and other legislative or administrative measures that may adversely affect foreign investments. This inevitably constrains the use of sovereign powers by host States in sensitive areas at the expense of national interests. Such is the consequence, it is argued, of a typically private adjudication system, such as arbitration, being employed in public law disputes. These considerations have played a relevant role in the denunciation of the icsid Convention by Bolivia (2008), Ecuador (2009) and Venezuela (2012). However, they also gained a certain resonance in Europe when Germany was sued before an icsid arbitral tribunal by the Swedish firm Vattenfall, which claimed that it had suffered damages in excess of one billion euros as a consequence of the discontinuance of the German nuclear program decided by the Parliament of that country in the wake of the Fukushima accident.28

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28 See Vattenfall ab and others v. Federal Republic of Germany (icsid Case No. ARB/12/12), available at https://icsid.worldbank.org. The proceedings were pending in 2014.

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9 An International Investment Court? Criticism of isds has also led to proposals for the creation of a standing international investment court, which would have exclusive jurisdiction to decide this type of disputes. That court would consist of tenured judges appointed by the States, which would ensure their independence from business and other private interests. An appeals chamber would guarantee consistency of findings. Proceedings would be public, thus allowing for greater transparency.29 In the absence of multilateral regulation of foreign investment, which is currently non-existent, enforcing the exclusive jurisdiction of an international investment court would however be problematic. A court with the said composition would furthermore prevent parties from choosing their own adjudicators, which is one of the main advantages of arbitration as a means of dispute settlement. Nevertheless, the setting up of an Investment Court has recently been ­gaining favour within the EU, as will be seen below. 10 Calvo Reborn? Domestic Courts as an Alternative Another possible alternative, which is reminiscent of the so-called Calvo doctrine30 that found its way into several Latin American constitutions in the 19th century, would be to submit disputes arising from foreign investment exclusively to the domestic courts of host States. This idea has somehow inspired Australia’s 2014 bit with Japan, which omits any isds provisions. It was most likely influenced by the fact that Australia was sued in 2012 by Philip Morris under the Australia-Hong Kong bit for its tobacco plain packaging regulations which allegedly deprived the claimant of the value of its investments in Australia.31 That alternative may, however, prove unreliable whenever the domestic courts of the host State do not guarantee due process or deny effective access to justice for foreign investors. This, rather than the exception, is still the rule in a large number of countries.32 Unsurprisingly, in other trade agreements (such as the one concluded with South Korea in 2014) Australia has consented 29

In this sense, see Gus van Harten, A Case for an International Investment Court, London, 2008, available at http://www.ssrn.com. 30 On which see, most recently, Patrick Juillard, “Calvo doctrine/Calvo clause”, in Rüdiger Wolfrum (ed.), Max Planck Encyclopedia of Public International Law, Oxford, 2012, vol. i, pp. 1086 et seq. 31 See Philip Morris Asia Limited (Hong Kong) v. The Commonwealth of Australia (pca Case No. 2012–12), available at http://www.pca-cpa.org. The proceedings were pending in 2014. 32 See, in this respect, the instructive examples reported by Jan Paulsson in “Enclaves of Justice”, Transnational Dispute Management, vol. 4 (2007), issue 5.

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to isds; and the current Government of that country has opted for a case-bycase approach in this regard.33 One might say that the above-mentioned concerns do not arise in relationships between the Member States of the European Union and the United States of America or Canada, given that their judiciaries already provide sufficient protection to foreign investors, and that for this reason the inclusion of isds mechanisms in trade agreements with those countries would not be not justified.34 In reality, however, even the judicial systems of eu Member States suffer from important structural weaknesses, as is demonstrated by the case-law of the European Court of Human Rights on violations of the right to a fair trial set out in article 6 of the European Convention of Human Rights.35 Yet even if the said argument were accurate, it would prove too much and, if taken seriously, lead to the exclusion of commercial arbitration as well. The fact that isds mechanisms may not be strictly necessary in certain countries in order to provide effective protection to foreign investors does not preclude that such mechanisms present certain advantages that justify their adoption. Among these are the greater speed and flexibility of arbitration proceedings, their lower costs (especially in comparison with the cost of judicial proceedings in the usa) and the specialization and neutrality of arbitrators, who do not intervene as sovereign bodies of one of the disputing parties. The Availability to the European Union of the Existing Arbitration Venues In the case of the eu, the option for arbitration as the preferred isds mechanism poses a further problem—that of the available arbitration venues.36 Several alternatives may be considered in this regard. icsid is the arbitration center most frequently chosen for this purpose. The icsid Convention,37 concluded in 1965, now has 158 Member States, all of

11

33 34

35 36 37

See Luke Nottage, Why no investor-state arbitration in the Australia-Japan fta?, available at http://blogs.usyd.edu.au. Such was the view expressed by the German Minister of Economic Affairs, Sigmar Gabriel, when ceta was publicly discussed: see Financial Times, 25 September 2014. The objection raised by Germany against the inclusion of isds in ceta was however subsequently withdrawn. In 2013 alone 166 such violations were identified by the European Court of Human Rights: see the statistics available at http://www.echr.coe.int. See, in this respect, Günes Ünüvar, Dispute Settlement Alternatives in Future eu bits. Building the Framework for Investment Protection, Brussels, 2012. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, available at https://icsid.worldbank.org. For a commentary, see Christoph Schreuer et al., The icsid Convention: A Commentary, 2nd ed., Cambridge, 2013.

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which are required to recognize and enforce arbitral awards rendered in accordance with its rules as if they were final judgments of courts of those States. No exequatur of those awards is thus required, which immensely facilitates their enforcement. However, membership of icsid is restricted to World Bank Member States. Accession of the eu would therefore require an amendment of the Convention, which is not likely in the short term given the high number of Parties to the Convention and the complexity of the procedures usually required to alter any international treaty. International Chamber of Commerce (icc) arbitration is another option.38 This is nevertheless fundamentally aimed at commercial disputes, in which the above-mentioned concerns with public access to information and the participation of third parties in the proceedings do not have the same relevance. uncitral Arbitration Rules,39 which are eligible in disputes arising from eu iias, are still another possible option, in spite of the eu not being a member of uncitral. However, contrary to icsid or icc, uncitral does not administer arbitral proceedings conducted in conformity with its rules, which are essentially meant for ad hoc procedures. 12 The European Union Court of Justice’s Competences A further problem concerns the compatibility of isds with the exclusive competences of the Court of Justice of the European Union (cjeu). As is well known, the cjeu is entrusted with guaranteeing the uniform interpretation and application of eu Law. This is ensured inter alia by preliminary rulings as provided in article 267 tfeu. Compatibility of isds mechanisms enshrined in eu iias with the cjeu’s competences may therefore require allowing preliminary references by arbitral tribunals entrusted with the settlement of investment disputes. That possibility is, to be sure, not expressly provided for in the tfeu, which restricts requests for preliminary rulings to “any court or tribunal of a Member State” and only deems them mandatory in regard of “a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law”. A recent order from the Eighth Chamber of the cjeu,40 allowing a request for a preliminary ruling by an arbitral tribunal set up in Portugal in order to settle a dispute between the holder of a pharmaceutical patent and a producer of generic drugs, may however be a step in that direction. That request was 38 See icc Rules of Arbitration, available at http://www.iccwbo.org. 39 See uncitral Arbitration Rules, available at http://www.uncitral.org. 40 See Order of the Court (Eighth Chamber) of 13 February 2014, Merck Canada Inc. v Accord Healthcare Ltd and Others, case no. C-555/13, available at http://curia.europa.eu.

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accepted considering that it originated from a compulsory tribunal whose jurisdictional powers flowed from a statute and that its decisions had the same effects as those of a court—all of which are characteristics common to isds. iii

The European Union’s Response

The Endorsement of Investor-State Dispute Settlement Mechanisms by the European Commission The position of the eu in regard of the inclusion of isds mechanisms in its future iias will now be considered. A first tentative reply to the questions at stake came from the European Commission in its communication of 7 July 2010 entitled “Towards a comprehensive European international investment policy”.41 In this paper, the Commission stated that “Investor-state dispute settlement, which forms a key part of the inheritance that the Union receives from Member State bits, is important as an investment involves the establishment of a longterm relationship with the host state which cannot be easily diverted to another market in the event of a problem with the investment”. According to the Commission, “Investor-State [dispute settlement] is such an established feature of investment agreements that its absence would in fact discourage investors and make a host economy less attractive than others. For these reasons, future eu agreements including investor protection should include investor-State dispute settlement”. The same document nevertheless stresses the need for greater transparency, consistency and predictability in isds.

13

14 The European Parliament’s Position A more restrictive stance was adopted by the European Parliament in its Resolution of 6 April 2011,42 in which it expresses “its deep concern regarding the level of discretion of international arbitrators to make a broad interpretation of investor protection clauses, thereby leading to the ruling out of legitimate public regulations”; and the belief that “changes must be made to the present dispute settlement regime, in order to include greater transparency, the opportunity for parties to appeal, the obligation to exhaust local judicial remedies where they are reliable enough to guarantee due process, the possibility to use amicus curiae”. 41 Document com (2010) 343 final, available at http://trade.ec.europa.eu. 42 See European Parliament Resolution of 6 April 2011 on the future European international investment policy, available at http://www.europarl.europa.eu.

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15 The “Financial Responsibility” Regulation A further step towards instituting isds mechanisms in future eu iias was taken in Regulation (eu) no. 912/2014, of 23 July 2014,43 which governs the apportionment between the eu and its Member States of financial responsibility linked to such mechanisms. This Regulation applies to proceedings initiated by a claimant of a third country pursuant to an agreement to which the Union is party, or to which the Union and its Member States are parties (article 1). However, it shall only govern disputes where the submission of a claim to arbitration has been lodged after 17 September 2014 and that concern treatment afforded after that date (article 24). The Union shall act as the respondent where the dispute concerns treatment afforded by its institutions, bodies, offices or agencies (article 4). In principle, it shall only bear the financial responsibility arising from such disputes; Member States shall bear the financial responsibility arising from treatment afforded by them, except insofar as such treatment was required by eu law (article 3). iv

The Way Ahead

16 The Case for Investment Arbitration In light of the above it is clear that isds mechanisms, particularly arbitration, are an important accountability mechanism for host States that fail to comply with their duties under iias. Where such mechanisms are absent, rules on protection of foreign investment risk remain dead letter. Hence their significance for capital-exporting countries, among which eu Member States stand out. Those mechanisms are however also an important device in order to attract foreign investment, not only for countries that ultimately receive it, but also for those through which multinational companies structure their investments, considering inter alia their bits network.44 It should be noted, in this regard, that the often conveyed idea that arbitral tribunals systematically decide investment disputes in favor of investors is 43 44

Published in the Official Journal of the European Union, no. L257, of 28 August 2014, pp. 121 et seq. See, on this, Christoph Schreuer, “Nationality of Investors: Legitimate Restrictions vs. Business Interests”, icsid Review, 2009, pp. 521 et seq., stating that: “In principle, there is no reason why a prudent investor should not organize its investment in a way that affords maximum protection under existing treaties. It is neither illegal nor improper for an investor of one nationality to establish a new entity in a jurisdiction perceived to provide a beneficial regulatory and legal environment, including the availability of an investment treaty” (p. 524).

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inaccurate: according to data published by unctad, from the total number of cases disposed of until 2013 43% were decided in favor of the State party to the proceedings, 31% in favor of the investor and 26% were settled.45 On the other hand, one should acknowledge that no other dispute settlement mechanism is as effective in ensuring the enforcement of International Law in investment disputes, and that all alternatives to isds previously ­considered have serious drawbacks that do not support their adoption in future iias entered into by the eu.46 The Need for Reform of Current Investor-State Dispute Settlement Mechanisms The solution for the problems currently posed by isds mechanisms therefore does not necessarily reside in abandoning them, but rather in reforming them, in order for a proper balance to be reached between investor protection and regulatory freedom. This can be achieved inter alia by:

17

a) Adopting more precise definitions of such notions as “investment”, “investor”, “fair and equitable treatment”, “indirect expropriation”, etc., often enshrined in iias; b) Recognizing Member States’ and the eu’s right to regulate investors’ activities in order to protect the general interest; c) Ensuring greater transparency in investment arbitration proceedings in line with the 2013 un Resolution; and d) Adopting Arbitrators’ Codes of Ethics ensuring their independence and impartiality in respect of the interests at stake. 18 ceta and ttip These measures can now be found in the text of ceta, signed by the repre­ sentatives of the eu and Canada on 26 September 2014.47 Chapter 8 of that ­agreement is dedicated to investment and Section D of this chapter concerns reso­­lution of investment disputes between investors and states. 45 See unctad, World Investment Report 2014, cit., p. 126. 46 See Christoph Schreuer, “Do We Need Investment Arbitration?”, Transnational Dispute Management, vol. 11 (2014), issue 1. 47 A revised version of which was made available on 29 February 2016 at http://trade.ec. europa.eu. See on CETA’s ISDS provisions August Reinisch and Lukas Stifter, “What about ISDS in EU Investment Agreements?”, Revista Internacional de Arbitragem e Conciliação, vol. 8 (2015), pp. 7 et seq.

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Among its main innovations, the following are worth mentioning: a)

The explicit enshrinement of the Contracting Parties’ right to regulate in order to achieve legitimate policy objectives;48 b) The definition of the notions of “investment”,49 “investor”,50 “fair and equitable treatment”,51 “indirect expropriation”,52 etc. c) The adoption of detailed rules on the functioning of dispute resolution mechanisms, including: the establishment of a permanent Tribunal, with 15 members appointed in advance by the Contracting Parties, and an Appellate Tribunal that may review the former’s awards; time-limits for the commencement of proceedings against Contracting Parties; total transparency in the hearings, which shall be open to the public; the possibility of parties agreeing at any time on having recourse to mediation procedures; the possibility of the ceta Joint Committee ruling on the interpretation of the treaty, thereby limiting arbitral tribunals’ discretion and the risk of divergent interpretations; rules on arbitrators’ ethics; and the duty of the unsuccessful party to pay the costs of the arbitration. 48

See the preamble text in which the Contracting Parties recognize “that the provisions of this Agreement preserve the right of the parties to regulate within their territories” and “the parties’ flexibility to achieve legitimate policy objectives, such as public health, safety, environment, public morals and the promotion and protection of cultural diversity”. 49 Article 8.1: “Every kind of asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, which includes a certain duration and other characteristics such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk”. 50 Article 8.1: “A Party, a natural person or an enterprise of a Party, other than a branch or a representative office, that seeks to make, is making or has made an investment in the territory of the other Party”. 51 Article 8.10, n.° 2: “A Party breaches the obligation of fair and equitable treatment referenced in paragraph 1 where a measure or series of measures constitutes: Denial of justice in criminal, civil or administrative proceedings; Fundamental breach of due process, including a fundamental breach of transparency, in judicial and administrative proceedings. Manifest arbitrariness; Targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; Abusive treatment of investors, such as coercion, duress and harassment; or A breach of any further elements of the fair and equitable treatment obligation adopted by the Parties in accordance with paragraph 3 of this Article”. 52 Annex 8-A: “indirect expropriation occurs if a measure or series of measures of a Party has an effect equivalent to direct expropriation, in that it substantially deprives the investor of the fundamental attributes of property in its investment including the right to use, enjoy and dispose of its investiment, without formal transfer of title or outright seizure”.

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Parties to ceta also affirm their intent to establish with other trading partners a permanent, multilateral investiment Tribunal.53 One may assume that the same path will be pursued by the European negotiators of ttip.54 The guidelines for the negotiation of this Agreement were disclosed on 9 October 2014 by the European Council.55 They admitted the inclusion of isds mechanisms in the Agreement, although their precise terms were not revealed. In sum, those guidelines state the following in this respect:56 a) b)

c)

The inclusion of investment protection and isds will depend on whether a satisfactory solution, meeting the eu interests, is achieved. The matter shall also be considered in view of the final balance of the Agreement; Investment protection should be without prejudice to the right of the eu and the Member States to adopt and enforce, in accordance with their respective competences, measures necessary to pursue legitimate public policy objectives such as social and environmental objectives, security, stability of the financial system, public health and safety in a non-discriminatory manner; The Agreement should aim to provide for an effective and state-of-theart isds mechanism, providing for transparency, independence of arbitrators and predictability of the Agreement, including through the possibility of binding interpretation of the Agreement by the Parties.

A firm intent to provide for arbitration as the preferred ISDS mechanism in TTIP thus already seemed to be lacking on the part of the EU in these guidelines. This was confirmed by the European Union’s proposal for a new Investment Court System in TTIP and other EU trade and investment negotiations, made public on 12 November 2015.57 This proposal calls for the establishment of a new court system composed of a Tribunal of First Instance with 15 publicly appointed judges and an Appeal Tribunal with 6 publicly appointed members.

53 54

Article 8.29. See, on this, Roland Kläger, “The Impact of the ttip on Europe’s Investment Arbitration Architecture”, Zeitschrift für Deutsches und Amerikanisches Recht, 2014, pp. 68 et seq. 55 See Directives for the negotiation of the Transatlantic Trade and Investment Partnership between the European Union and the United States of America, document 11103/13, available at http://data.consilium.europa.eu. 56 See §§ 22 e 23 of the document cited in the previous note. 57 Available at http://trade.ec.europa.eu/doclib/docs/2015/november/tradoc_153955.pdf

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This Tribunal would have exclusive jurisdiction to decide investment disputes under TTIP. These developments are obviously not unrelated to the repercussions that the above-mentioned concerns regarding the current functioning of isds mechanisms and their possible impact on the exercise of the Member States’ and the Union’s regulatory competences have had in the European press and in certain academic circles.58 Whether they will meet with American acceptance is open to doubt, particularly in light of the fact that the Trans-Pacific Partnership (ttp) that the US have recently concluded with eleven other Pacific Rim countries provides for investor-State arbitration as the ordinary isds mechanism. 58

See, e.g., Peter Muchlinski /Horatia Muir Watt/Gus Van Harten/Harm Schepel, Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (isds) in the Transatlantic Trade and Investment Partnership (ttip), available at http://www.kent.ac.uk.

chapter 16

Dispute Resolution under the Energy Charter Treaty Alejandro Carballo 1 Introduction The Energy Charter Treaty (ect), as a multilateral treaty addressing primarily investment and trade matters—in addition to transit, competition and other concerns in relation to the energy sector–, needed strong dispute resolution provisions in order to strengthen its implementation. In fact, at the time when the Treaty was negotiated, there were concerns about the neutrality and effective functioning of the domestic juridical systems of some member countries/ signatories—in particular countries in transition –. By providing alternative means of dispute resolution outside domestic courts, the ect increased confidence of investors and traders, thereby promoting investment and trade flows between members. The ect contains several dispute resolution mechanisms, each one of which is designed to address in a tailor-made fashion a particular subject matter or aspect of the Treaty. This shows the importance and unique role of the dispute settlement provisions. These dispute resolution mechanisms may be divided into two main groups: (i) Dispute resolution between Contracting Parties (Article 27 of the ect)—with the exception (Articles 6.7, 27.2 and 28 of the ect) of competition disputes (Article 6 of the ect), environmental disputes (Article 19 of the ect), trade disputes (Article 29 and Annex D of the ect) and trade-related investment matters (Article 5 of the ect). There is an additional conciliation mechanism for transit disputes (Article 7.7 of the ect). (ii) Dispute resolution between an investor and a Contracting Party (Article 26 of the ect). The starting point for all these mechanisms is the desirability of an amicable agreement between the parties to any dispute. However, in the event that this does not prove possible, then the Treaty opens a number of additional avenues to solve the dispute.

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Disputes between the Contracting Parties to the Energy Charter Treaty

2.1 Arbitration between Contracting Parties (Article 27 ect) According to Article 27 of the ect, disputes concerning the application or interpretation of the Treaty, if not settled through diplomatic channels within a reasonable time and unless otherwise agreed in writing by the Contracting Parties, can be submitted by either Contracting Party to the dispute to an ad hoc tribunal. The Secretariat knows of one case in which a member state invoked Article 27 of the Treaty, though the dispute was settled through diplomatic channels. In comparison with investment disputes with an investor under Article 26 of the ect, the scope of inter-state disputes is wider. Nevertheless, pursuant to Articles 27.2 and 28 of the ect, the ad hoc international arbitration is not available in the following cases: • Application or interpretation of competition and environmental issues (Articles 6 and 19 of the ect); • Observance of obligations under an individual investment contract (last sentence of Article 10.1 of the ect) against states listed in Annex IA;1 • Application or interpretation of trade-related matters (Article 29 of the ect) or trade-related investment matters (Article 5 of the ect) unless both parties to the dispute agree otherwise. Since the first official draft in September 1991, negotiators opted for international arbitration—by way of a reference to the Hague Convention for the Pacific Settlement of International Disputes as revised in 1907—instead of the jurisdiction of the International Court of Justice (icj).2 It was mentioned as an explanation that ‘the Hague Convention was chosen due to its wide acceptance, its well understood and travelled procedures, and its considerable practice in handling international disputes of the type which may be engendered by the Basic Protocol’. Soon after, the us suggested to change it for the ‘more modern’ uncitral rules (adaptable to state-state disputes) or, alternatively, icsid. Article 27 of the ect contains detailed provisions on the establishment of such ad hoc tribunal. It ensures the establishment of the tribunal—which, unless otherwise agreed, shall sit in The Hague and use the premises and facilities 1 Australia, Canada, Hungary and Norway. 2 bp 2, of 11 September 1991. In the very first working document, August 1991, the icj is only mentioned in order to appoint arbitrators.

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of the Permanent Court of Arbitration—even if the other party fails to cooperate in the matter. The tribunal shall follow, in the absence of an agreement to the contrary, the uncitral Arbitration Rules and its award shall be binding and final on the Contracting Parties to the dispute. Although there is no specific provision as regards enforcement of awards, the treaty requires the Contracting Parties to deposit a copy of the award with the Secretariat, which shall make it generally available. 2.2 Panel System in Trade Disputes (Annex D) In respect of trade-related disputes, Article 29 of the ect provides for a dispute resolution mechanism (Annex D) that is based on the gatt/wto panel model. It applies only in cases where at least one of the disputing Contracting Parties is not a member of the wto. The ect fulfils a unique role in this respect, because it makes a gatt/wto-like dispute settlement system available to nongatt/wto members. As a general rule, dispute settlement under Article 29 of the ect is a substitute for arbitration between Contracting Parties under Article 27 of the ect. Nevertheless, according to Article 28 of the ect, Contracting Parties have the right to submit a trade-related dispute (including a dispute on trade-related investment matters—trims–) to arbitration under Article 27 of the ect, provided that they both agree. Article 29 of the ect does likewise not exclude that foreign investors bring actions relating to trims under Article 26 of the ect. The ect trade dispute resolution mechanism is lighter, less detailed and simpler than that developed under the wto. When a panel concludes that the measure in dispute does not comply with the Treaty, it may recommend that the offending party alter or abandon the measure. The panel’s report is subject to adoption by the Charter Conference acting by a vote of ¾ of those present and voting provided that at least a simple majority of all Contracting Parties to the Treaty supports the decision. This is different from the wto procedures where panel reports are automatically adopted unless disapproved by consensus. Therefore, the Treaty retains an element of political decision-making that could serve as an additional incentive for mutually acceptable out-of-court resolutions of trade-related disputes. An Amendment to the Trade-Related Provisions of the Treaty was adopted on 24 April 1998 and entered into force in 2010. Annex D of the ect, as amended, still falls short of incorporating a quasi-automatic adoption of panel reports or a standing Appellate Body as in the wto. The Trade Amendment only provides for guidance by the wto Rules and Procedures on dispute settlement (in particular, panels shall take into account panel interpretations of the wto Agreement).

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To put in place the dispute settlement system, in 2012 the Charter Conference adopted a roster of panellists3 from which, in the event of a trade dispute, three persons are chosen by the Secretary-General to serve on a panel. Individuals on the roster are legal experts nominated by Contracting Parties and persons who have served as panellists on gatt or wto dispute settlement panels. 2.3 Conciliation in Transit Disputes (Article 7) Article 7.7 of the ect provides for a conciliation mechanism in relation to ‘disputes over any matter arising from Transit’ (as defined in Art. 7.10 ect). According to subparagraph (f) of such article, the Conference shall adopt standard provisions concerning the conduct of conciliation and the compensation of conciliators. The Conference fulfilled this requirement by a Decision adopting the ‘Rules Concerning the Conduct of Conciliation of Transit Disputes’ on 12 November 1998.4 According to Article 7.7 of the ect, a Contracting Party may refer the dispute to the Secretary-General of the Energy Charter Secretariat, who shall appoint a conciliator whose task is to seek agreement of the parties to a resolution of the dispute. In the absence of such agreement, the conciliator shall make a recommendation for the resolution of the dispute, or on a procedure to achieve such resolution, and a decision on interim tariffs and other conditions until the resolution of the dispute. The Contracting Parties undertake to observe, and ensure that entities under their control or jurisdiction observe, any such interim decision for 12 months following from the decision (or until resolution of the dispute whichever is earlier). The conciliation mechanism is thus a hybrid of voluntary conciliation and binding dispute resolution of interim nature. The initial proposal (conciliation by the Governing Council/Energy Charter Conference)5 was challenged by some countries who preferred a binding arbitration. Poland then proposed a compromised solution (fast track-procedure), which should primarily involve ‘conciliation, but if necessary, arbitration with clear time limits.’6 The Chairman of the Working Group ii then drafted a proposal encompassing: (i) referral to the Secretary General, (ii) conciliation and, as a last stage, (iii) arbitration (the later imposing interim tariffs, terms and conditions).7 After some comments by 3 4 5 6 7

CCDEC 2012 11 ttg. CCDEC 1998 11 ttg. ba 6, of 21 January 1992. Meeting of Working Group ii of 5 February 1993 Letter of S. Fremantle, of 12 February 1993, attaching a Draft Chairman’s note. Room Document 4, of 22 February 1993 (Working Group ii).

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the industry, the draft was amended eliminating the reference to arbitration— since the Chairman of the Working Group believed that the use of term ‘arbitration’ for an interim binding decision could have lead to confusion–.8 As a result, the conciliator was empowered to decide the interim tariffs and other terms and conditions for transit, which have to be observed by the Contracting Parties to the dispute for 12 months after the date specified by the conciliator or until resolution of the dispute through other way (whichever is earlier). Since it was considered that the initial expression (disputes over ‘terms and conditions’) ‘could limit the types of transit dispute eligible for the conciliation’,9 the conciliation procedure currently covers disputes regarding ‘any matter’ arising from transit. Nevertheless, the aim of Article 7.7 of the ect is to resolve amicably transit disputes at the Contracting Parties level, not to deal with commercial disputes, which are to be solved through the contractually agreed dispute settlement mechanisms. It respects the contractual freedom of enterprises to solve their transit disputes themselves, while allowing a mechanism for solving transit disputes derived from actions by Contracting Parties, its subnational authorities, agencies/controlled companies or privileged enterprises affecting transit (Articles 22 and 23 of the ect). The ect took on a pioneer role establishing for the first time a specific, fasttrack dispute settlement mechanism for transit disputes. This aspect of the Treaty is particularly important, given the economic significance of energy transit and the fragility of transit security, especially, but not exclusively, in cis countries. Nevertheless, given the sensitivities and political constraints within which the transit article was negotiated, it leaves certain issues open. In particular, the relationship with the other dispute settlement mechanisms of the Treaty. Due to the uncertainties regarding the application of the conciliation procedure, such conciliation mechanism has not yet been invoked. In 2015, the Conference approved some amendments to enhance and clarify the conciliation mechanism. 2.4 Competition Disputes (Article 6 ect) Article 6.5 of the ect deals with the settlement of competition disputes. If a Contracting Party considers that any specified anti-competitive conduct carried out in the territory of another Contracting Party is adversely affecting an important interest concerning the alleviation of market distortions and barriers to competition, it may notify the other Contracting Party and request that 8 Letter of S. Fremantle of 18 February 1993 attaching a new draft and covering letter. 9 Room Document 20, of 24 February 1993 (Working Group ii): Report of the Chairman of the Working Group iv (Transit) reflecting the discussion of 23 February 1993.

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the latter’s competition authorities initiate appropriate enforcement action. The notified Contracting Party, or, as the case may be, its competition authorities may consult with the competition authorities of the notifying Contracting Party and shall accord full consideration to the request of the latter in deciding whether or not to initiate enforcement action with respect to the alleged anticompetitive conduct. This scheme is known as ‘positive comity’. Positive comity does not hinder the independence of the competition authorities of the member states. Competition authorities in the world are already familiar with this concept, as they achieve it through enforcement cooperation agreements. In addition, according to Article 6.7 of the ect, Contracting Parties have the possibility to resolve the dispute through diplomatic channels. No other dispute settlement mechanism is provided for within the ect for resolving this type of disputes, though Contracting Parties can voluntarily agree to submit the dispute to other dispute settlement mechanism. 2.5 Environmental Disputes (Article 19 ect) Article 19 of the ect contains various obligations of Contracting Parties with regard to the protection of the environment. E.g., each Contracting Party shall strive to minimize in an economically efficient manner harmful environmental impacts occurring from all operations within the energy cycle in its area, and to take precautionary measures to prevent or minimize environmental degradation. According to Article 19.2 of the ect, the Charter Conference shall, at the request of one or more Contracting Parties, review disputes concerning the application or interpretation of these obligations, aiming at a solution. However, this possibility only exists if arrangements for the consideration of such disputes are not available in other appropriate international fora. 3

Arbitration between an Investor and a Host State (Article 26 ect)

Article 26 of the ect grants foreign investors (as defined in Article 1.6 of ect) the right to directly sue a Contracting Party (as defined in Article 1.3 of ect)10 in case of ‘an alleged breach of an obligation of the host State under Part iii of the Treaty’, i.e. the provisions relating to investment promotion and protection. 10

For the purposes of the ect, the term investor-state dispute settlement mechanism would not be correct, since a Regional Economic Integration Organisations (e.g. the eu) can be also a Contracting Party and, therefore, a defendant in an investment arbitration under the ect.

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Part iii of the Treaty includes provisions for the minimum and non-discriminatory treatment of foreign investments (Article 10); entry and work permits for key personnel (Article 11); compensation for losses to investments owing to armed conflicts, civil disturbances or other similar events (Article 12); ‘prompt, adequate and effective’ compensation in the event of expropriation (Article 13); and repatriation of capital, profit and other payments in a freely convertible currency (Article 14). Article 26 of the ect does not apply to other disputes in which a foreign investor might be involved. For instance, if a Contracting Party fails to promote the conditions for access of foreign investors to its capital markets, such investors would not have access to dispute resolution under the Treaty, because the relevant provision (Article 9 of the ect) does not fall under Part iii of the ect; however, such a matter could be brought to state-to-state arbitration according to Article 27 of the ect. Prior Consultations According to Article 26.1 of the ect, a prerequisite to arbitration is that such dispute is not settled within a period of three months from the date on which either party to the dispute requested amicable settlement. Although a period of three months is traditional in investment treaties, it is a relatively short period compared, for example, to the six month cooling-off period provided for by nafta. Option of Domestic and International Dispute Settlement If consultations/negotiations fail, the foreign investor can choose to submit the dispute to: • Domestic courts or administrative tribunals of the Contracting Party party to the dispute;11 • Any applicable, previously agreed dispute settlement procedure; • International arbitration or conciliation. All Contracting Parties give their unconditional consent to the submission of a dispute to international arbitration or conciliation. It is worth noting that since Article 46 of the ect allows no reservations to the treaty, no Contracting Party can deny its consent unless:

11

Understanding n. 16 of the Final Act of the European Energy Charter Conference records that there is no requirement for a Contracting Party to enact Part iii of the treaty into its domestic law.

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• listed in Annex ID12 in relation to the submission of a dispute to international arbitration where it has already been dealt with by another dispute resolution forum contained in Article 26.2.a-b of the ect. • listed in Annex IA13 in respect of disputes of alleged breaches of any obligations entered into by the Contracting Party with an investor or an investment of an investor of any other Contracting Party (last sentence of Article 10.1 of the ect). Options between Different International Arbitration Fora If foreign investors choose to submit a dispute to international arbitration, they can choose amongst the following: • The International Centre for the Settlement of Investment Disputes (icsid) established by the Washington Convention of 1965. This option is available if both the Contracting Party party to the dispute and the Contracting Party of the investor are parties to the icsid Convention; • The icsid Additional Facility Rules for the Administration of Proceedings by the icsid Secretariat. These arbitration rules are available where only one of the Contracting Parties is a party to the icsid Convention. In this case, the provisions of the icsid Convention itself do not apply (i.e., the recognition and enforcement of the award is not governed by the provisions of the icsid Convention); • A sole arbitrator or an ad hoc arbitration tribunal established under the uncitral Arbitration Rules; or • An arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce. There exist detailed procedural rules for all of these arbitration proceedings, including the establishment of tribunals, selection of arbitrators, hearings and costs. Applicable Law and Finality of Awards Regardless of which of the above-mentioned options for international arbitration is chosen by the investor, the arbitral tribunal shall decide the issues in 12

13

Australia, Azerbaijan, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, European Union and Euratom (as successors to the European Communities), Finland, Greece, Hungary, Ireland, Italy, Japan, Kazakhstan, Mongolia, Norway, Poland, Portugal, Romania, the Russian Federation, Slovenia, Spain, Sweden, Turkey and the United States. Australia, Canada, Hungary and Norway.

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dispute in accordance with the ect and applicable rules and principles of international law (Article 26.6 of the ect). The award, which may include an award of interest, shall be final and binding on the parties to the dispute (Article 26.8 of the ect). The Treaty requires, furthermore, that each Contracting Party shall carry out the arbitral awards without delay and shall make provision for effective enforcement of such awards. Some concerns have been raised regarding the statements in the interim award in the case of Electrabel v. Hungary as to the presumption that ‘no contradiction exists between the ect and eu law’14 and that ‘eu law would prevail over the ect in case of any material inconsistency.’15 Nevertheless, it should be mentioned that (i) the proposal16 made during the negotiations to consider that the Community rules (now eu law) shall apply instead of the ect was limited to relations amongst members of the European Communities (not between them and non-members of the European Communities) insofar as there was ‘no community rule governing the particular subject concerned’ and that (ii) such proposal was rejected at the early stages of the negotiations of the Treaty. Furthermore, it must be pointed out that the Energy Charter Conference has autonomous decision-making power and its decisions may require the adoption or modification of eu legislation.17 Where disputes arise out of an act by a sub-national entity of a Contracting Party, Article 26.8 of the ect further stipulates that the award shall authorise the Contracting Party to pay monetary damages in lieu of any other remedy granted (i.e. specific performance). This provision ensures that the central government, in cases where it lacks the authority to ensure compliance by a subnational entity, can discharge its obligation to comply with the award by payment of a monetary sum. Enforcement of Arbitral Awards Many of the parties to the un Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the ‘New York Convention’) have declared that they will enforce an arbitral award only if it is rendered in a State that is also a party to the New York Convention and/or the claim arises out of a commercial 14

Electrabel S.A. v. Hungary, icsid No. ARB/07/19, Interim Award of 30 November 2012, para. 4.134. 15 Supra, at para. 4.191. 16 BA-18, of 18 September 1992. 17 98/181/EC, ecsc, Euratom: Council and Commission Decision of 23 September 1997 on the conclusion, by the European Communities, of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects.

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relationship or transaction. Therefore, in order to facilitate the enforcement of ect awards, Article 26.5.b of the ect provides that (i) any investment arbitration shall, at the request of any party to the dispute, be held in a State that is a party to the New York Convention and (ii) that claims submitted to arbitration are considered to arise out of a commercial relationship or transaction. Some Statistics Since the first case recorded in 2001 up to December 2015, the Secretariat has collected public information on 88 investment arbitrations brought by investors against Contracting Parties under the Energy Charter Treaty: 25 cases were concluded with a final arbitral award, 1 case was discontinued, 9 cases were settled by an agreement of the parties and 53 cases are still pending. In relation to the existing awards, jurisdiction was denied in 5 cases (including 2 cases where the claim was found to be fraudulent); in 7 cases the tribunal found no breach of the ECT; in 2 cases the Contracting Party was found liable but the investor either failed to prove the damages or its claim for damages was considered premature and unfounded; and in 11 cases was the Contracting Party ordered to pay damages. Future Improvements For some time, the Energy Charter Secretariat followed the debates raised by other international organisations (mainly unctad and oecd) on the suitability and effectiveness of investment arbitration and on investment dispute settlement more in general. As a result, at the 24th meeting of the Energy Charter Conference in Nicosia on 5 December 2013, the Secretary General proposed several measures for improving the investment dispute settlement mechanism under Article 26 of the ect. The Investment Group of the Energy Charter Conference is currently discussing (i) an effective framework for investment mediation and conciliation; (ii) the establishment of an ‘Energy Charter’ investment ombudsman, at the domestic or at the international level; and (iii) the introduction of transparency based on the uncitral Transparency Rules. In fact, under Point 5 of the (2014) Conclusions of the Review under 34.7 of the ect,18 the Energy Charter Conference mandated its standing groups and Secretariat to place more emphasis on amicable investment dispute settlement, including to explore the establishment of a body of experts in investment mediation/ conciliation; as well as considering the setting up of an investment Ombudsman. 18

CCDEC 2014 06 gen.

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Additional Mechanisms

The Facilitating Role and Good Offices of the Energy Charter Secretariat In February 2012, the Secretariat acting upon the request of several companies, provided its good offices in facilitating the amicable solution with Albania, Bulgaria, Greece, Romania and tfyr of Macedonia regarding severe restrictions of electricity exports in the Balkan region.19 In 2014 and 2015, the Energy Charter Secretariat received several requests from investors to act as facilitator and to assess an investment conflict before its aggravation. As a consequence, the above-mentioned Point 5 of the Conclusions of the 2014 Review, also mandates the Energy Charter Secretariat to (i) provide assistance with good offices, mediation and conciliation; as well as to (ii) provide neutral, independent legal advice and assistance in dispute resolution and participate in pre-trial proceedings between Contracting Parties (before they revert to the mechanisms contained in Article 27 or Annex D of the ect).

4.1

4.2 Model Early Warning Mechanism In 2009–2010 the then Ad Hoc Strategy Group of the Energy Charter Conference discussed the role of the Energy Charter in view of emergency situations affecting the security of energy supply. A number of options were presented as how to strengthen the effectiveness of the legally binding provisions of the ect, in particular the obligation to secure established flows of energy. In the Joint Rome Statement of December 2009,20 the member states aimed at the resolution of controversies in case of emergency in the context of common implementation mechanisms of the Energy Charter Treaty. Similar goal was included in the Road Map for Modernisation, of 24 November 2010.21 While bilateral early warning mechanisms can assist the parties in better preparing for a possible emergency situation, it may be argued that they have their limits to comprehensively address emergency situations, as those normally involve other parties as well. E.g., it is worth recalling that the monitoring of the transit of natural gas through Ukraine agreed on 10 January 2009 was at least a trilateral mechanism involving the eu, Russia and Ukraine. At the same time, it is also true that the gas disputes of 2009 and preceding years all had an impact beyond these three parties.

19 20 21

http://www.encharter.org/index.php?id=21&id_article=267&L=0. CCDEC 2009 14 gen. CCDEC 2010 10 gen.

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Recent events confirmed the need for a multilateral early warning response mechanism. In fact, in view of the situation in Ukraine, the Secretary General of the Energy Charter Secretariat set up, on an ad hoc basis, an Energy Security Contact Group in March 2014.22 The Contact Group allowed the parties concerned to exchange information and to work together with the aim of preventing a major interruption of energy flows. As a result, a Model Energy Charter Early Warning Mechanism—designed as an instrument of preventive energy diplomacy, confidence building and emergency measures—was welcomed by the Energy Charter Conference in November 2014.23 Parties can refer to it, voluntarily, on a case by case basis, in order to prevent and overcome emergency situations in the energy sector related to the Transit and supply of electricity, natural gas, oil and oil products through cross-border grids and pipelines. It is complementary to other mechanisms for early warning and dispute resolution agreed bilaterally between individual parties, and it is available to the Signatories of the future International Energy Charter (to be adopted in The Hague in May 2015). At the centre of the mechanism is the Energy Security Contact Group, which brings together the parties concerned (who are willing to participate), the Chairmanship of the Energy Charter Conference and the Secretariat. The Contact Group shall establish information relevant to the actual threat to energy security and aim at elaborating a common evaluation of the situation and recommendations on how to address it. The Contact Group can set up a Monitoring Group to establish information on the ground. 22 23

http://www.encharter.org/index.php?id=660&L=0. CCDEC 2014 14 ttg.

chapter 17

Understanding the Interaction between the wto Regime and International Investment Regime: Reversing the Approach Ozge Varis 1

Introduction: Two Branches of One Tree: International Investment Law & International Trade Law

International economic law is a broad term, which includes international investment law and wto law. These two sub-branches of international economic law interact like two branches of one tree. As the branches of trees share sunlight, water and, most importantly, the root of the tree; the wto law and international investment law share the same root. Thus, they both arise from international economic law; they not only share the same international law background, but also a similar understanding of legal norms and principles. International investment law and wto law are branches of international economic law, albeit branches of general international law, as well. Therefore, they are not only affected by international economic law, but they also carry the fundamental norms and principles of international law. International law has two remarkably important characteristics; a fragmented and cyclical nature. All international law regimes have these two characteristics in their nature and they affect their nature.1 On the one hand, international investment law and its importance for international capital flows and globalisation cannot be denied. The system appears complicated because of the huge numbers of bilateral investment treaties (hereinafter bits), multilateral investment agreements (hereinafter mias), regional trade and investment treaties, national regulations, national and international judicial awards. On the other hand, wto law and international trade law have a significant role in the world’s economy and globalisation. Sustainability of international markets, international economy and trade is maintained and regulated by international trade law.

1 Leal- Arcas, R., “The multilateralization of international investment law” 35 North Carolina journal of international law and commercial regulation, p. 33.

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According to much of the literature, the international trade law regime seems to be a good example and guide for its international investment counterpart. When the general system of international law is considered, it would not be incorrect to claim those legal regimes affect each other. In contrast to the existing literature, this article will not only analyse the possible effects of wto law on the international investment law regime, but also the possible effects of international investment law regime on wto law. Therefore, all those explanations evoke the following questions: “To what extent do the international trade dispute settlement regime and the international investment dispute settlement regime overlap and affect one another?” and “What kind of interactions between the international investment law regime and international trade law take place, especially in aspects of consistency?” Those questions will also evolve sub-questions such as: “Can the wto regime and the international investment regime guide each other to solve consistency issues?” and “Is there any possibility that international investment law can guide international trade law?” Based on the afore-going explanations, this article will focus on interactions between the international investment law and the international trade law regimes, and attempt to understand the situation between the wto dispute settlement system and international investment dispute settlement. In essence, the aim of this article is to show the possible effects of international investment law and international trade. In order to comprehend the interaction between these two branches of international economic law, first of all, the nature of those branches should be understood. The comparison criteria of their natures are actors, development processes. Understanding wto law and international investment law will help to analyse differences and the common points within each. Thereafter a comparison of those two legal regimes and their interaction will be analysed. 2

International Investment Law & wto Law: Understanding Their Natures

2.1 The Nature of International Investment Law International investment law is one of the most complicated and contentious international law regimes and its historical background and development system is different from other international law regimes. Despite this complex system involving different kinds of treaties and legal documents, international investments were not as complicated in the past.

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The treatification2 process of international investments was instigated a long time ago, but the system developed slowly over the centuries. Hence international investment law is still developing; it is in the adolescent years of its development.3 This significant characteristic of international investment law is a result of the introduction of the international investment treaty, which consists of modern investment provisions that may be traced from the time of World War i (hereinafter wwi). This slow development process did accelerate after World War ii (wwii). As a result of rapid developments, the system became complex and now appears to be in deep crisis.4 In reality, the system acts to apply and help to solve investment disputes: international investment law involves issues and challenges, which may be observed in every new legal area or rule. The early beginnings of international investments go back to ad 1296, in an agreement between King Erik of Norway and merchants in Hamburg. The king provided privileges to Hamburg merchants for ‘meliorandum terram nastram cum mercaturis’ (for the amelioration of our territories through trade).5 However, international investment law, according to modern needs, started to appear in the 18th century. The United States of America (hereinafter the usa) began to secure its commercial and investment activities outside the usa’s territory, through the Treaty on Friendship, Commerce and Navigation in 1796, concluded with many other countries. The main idea behind those Friendship Treaties—both the usa treaties and the European treaties—was to improve trade more rather than investments. Another similarity between these treaties was the sources and the norms used to secure investments.6 In 1868, the famous Calvo Doctrine was published by Carlos Calvo, the Argentine jurist. He claimed that the host state must have full sovereignty over the interpretation and application of applicable international rules and 2 The word “treatification” is used by Jeswald W. Salacuse in reference to the process of development ranging from customary law to treaties; Salacuse, J.W., The Law of Investment Treaties, Oxford University Press, New York, 2010, p. 78. 3 Alvarez, E., “The Once and Future Foreign Investment Regime”, in: Arsanjani, M.H. et al., eds., Looking to the Future: Essays on International Law in Honour of W Michael Reisman, Koninklijke Brill N.V, Leiden, 2010, pp. 607–608. 4 In the doctrine, many scholars prefer to describe it as a “legitimacy crisis”; however, a legitimacy crisis is a strong word choice in order to describe problems of international investment law. This discussion excluded from this article; however, for further discussion please check: Browers, C. Schill, S., “Is Arbitration a Treat or a Boon to the Legitimacy of International Investment Law”, Chicago Journal of International Law, vol. 9, 2009, p. 471. 5 Supra nt. 3, p. 80. 6 Supra nt. 3, pp. 158–159.

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norms.7 After the Calvo Doctrine and the Russian Revolution in 1917, the security of investments and foreign investors’ rights became difficult to ensure. During wwi and wwii, the international investment regime suffered due to poor international financial and economic development. After wwii, the importance of an international investment regime for domestic and international economic development was acknowledged. States started to seek a form of protection for their investors and investments outside of their territories. As a result of this, Germany signed the first bit with Pakistan in 1959. The Germany-Pakistan bit started a new trend for investment protection and international investment law.8 The icsid Convention opened for signatures on 18th March 1965, and entered into force on 14th October 1966.9 Before the icsid Convention, similar attempts, such as the Havana Charter (1948), the International Chamber of Commerce’s International Code of Fair Treatment of Foreign Investment (1949), the International Convention for the Mutual Protection of Private Property Rights in Foreign Countries (1957), had not been successful. After the icsid, the oecd Draft Convention on the Protection of Foreign Property (1967) was also unsuccessful. The icsid Convention and the icsid itself were a revolutionary development in international investment law history and for the international investment regime. The icsid Convention offers a practical approach and institutional support for the enforcement of bits and international investment law. More explicitly, investors and the host states achieved effective compensations and remedies for the first time in the history of international investment law.10 Today, the international investment regime is governed by a high number of bits and multilateral treaties that involve investment provisions, international dispute settlement institutions and ad hoc tribunals.11 All of the aforementioned explanations resulted in a remarkable outcome for the international investment regime. International investment law and its principles are the result of the strong need to sustain globalisation and international economic development. Today, international investment law is a 7 8 9 10 11

Dolzer, R., and Schreuer, C., Principles of International Investment Law, Oxford University Press, Oxford, 2012, p. 1. Supra nt. 3, pp. 88–89. Supra nt. 4. Waters, M., “Globalization”, Routhledge, London, 2001, p. 1. Governing elements international investment law regime will be referred to as ‘institutions of international investment regime’.

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separate field of international law and international economic law regime, and therefore has its own rules and principles. Nevertheless, this does not mean that the fundamental norms and principles of international law are not applicable to international investment law. In international investment law, the regime is governed by home states, host states, investors and other institutions; international investment regime’s norms and principles are established with international treaties, customary international law, and arbitral awards. States may be in a position of being the host state or home state because bits are not one-sided treaties. In other words, all rules and principles within bits bind both parties. Additionally, both states are obliged to provide a secure investment environment for the investors. The first distinguishing characteristic of the international investment regime is the kind of actors involved in the regime. In most international law regimes, the relevant actors are mainly sovereign states and international organisations. However, the actors within the international investment regimes are sovereign states, foreign investors and dispute settlement institutions. Foreign investors are natural persons or legal persons who are subject to private law regimes. Dispute settlement institutions may be established as being either ad hoc or institutional. These actors and their roles in the international investment law regime have shaped its development. More explicitly, the regime is regulated by international investment treaties that are signed by two sovereign states. When disputes arise, these are resolved between the investor and the host state by an international investment dispute resolution institution. The most significant and distinct characteristic of international investment law is related to dispute resolution. Different from other international law regimes, disputes are resolved between host states and investors under international investment law. This means that the international investment law dispute resolution mechanism allows a person or legal person who is a foreigner to bring a claim against a sovereign state, in front of an international dispute resolutions body. The actors and their roles in the international investment regime have led to another important feature of international investment law. International law regimes are divided into two frameworks based on actors and disputes: public international law and private international law. Public international law mostly governs relationships between states and international legal persons (as well as individuals), while private international law generally governs issues related to conflict of laws or applicable rules of jurisdiction. Based on this division, international law regimes belong to one of these frameworks, but international investment law and its sui generis nature make

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it difficult to categorise.12 International investment regime actors and their relationships with one another are particularly different, and the regime is governed by complex bilateral international treaties. As a result of the sui generis features of the regime, categorising international investment law as either strictly public international law or private international law is beyond the bounds of possibility. Another distinct feature of the international investment regime is its development process. The development processes of international law and international legal regimes are mostly cyclical. They generally start with a legal relationship between two states and then develop to involve contributions of more than two states. The circle then proceeds with regional international legal regimes. Therefore, in general, relations begin bilaterally and then become multilateral and finally regional;13 if necessary, this cycle may start again from the beginning.14 The cycle is an applicable approach to understanding many international legal regimes; however, international investment law does not fit this cyclical pattern. In the history of international investment law, there have been many attempts to create successful multilateral investment treaties. For instance, the Multilateral Agreement on Investment (hereinafter after mai) is one example of the failed attempts to create a multilateral environment in international investment law. The mai was initiated by the Organisation for Economic Co-operation and Development (hereinafter oecd) in 1998. The agreement failed because it sought to regulate international investment environment with a binding international instrument. On the one hand, the mai was understood as an opposite impact towards globalisation and a liberal international economic order by capital exporting countries. On the other hand, the mai was seen as a binding international legal instrument that introduced investment protection rules without accommodating environmental, human rights concerns.15 This aspect of the mai lacks an international instrument, which regulates general principles and norms of international investment. This can be seen as 12 Van Harten, G., Investment Treaty Arbitration and Public Law, Oxford University Press,Oxford, 2007, p. 8. 13 For further explanation about “cyclical nature of international law” please see: Leal-Arcas, R., International Trade and Investment Law: Multilateral, Regional and Bilateral Governance, Edward Elgar Publishing Limited, Cheltenham, 2011, pp. 1–8. 14 Ibidem. 15 Sornarajah, M., “The International Law on Foreign Investment”, Cambridge University Press, Cambridge, 2010, p. 27.

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the cyclical nature of international law which does not apply within international investment law. However, the existence of the icsid and its enforceable nature suggests that the cyclical nature of international law partially exists in international investment law. In other words, the icsid convention is the first step to establishing a multilateral framework for the consensus of dispute resolution of the international investment regime.16 The development process of international law is different from other international law regimes. The nature of international law is fragmented and cyclical, as previously mentioned. This fragmentation is reflected in the complex and high number of bits and different dispute resolution institutions of international investment law. The cyclical nature of international law is, however, partially true in the case of international investment law. Despite the international investment regime being governed via bilateral relations, the icsid Convention and the high demand of the dispute resolution system of icsid are proof that the multilateral part of cyclical nature should be interpreted in a different way. With regard to the explanations above, it would not be incorrect to state that international investment law has a sui generis nature. This does not mean that defining investment is as complicated as understanding the international investment regime. International investment treaties define investments as broadly as possible to provide as much protection as possible.17 In the most general terms, international investments include both tangible and intangible assets, which are moved from one country to another under the full or partial control of foreign investors for the purpose of producing wealth. As a consequence of broad bit provisions, the capacity to consider foreign investment as an interpretative tool is in the hands of arbitrators. This bring us to the conclusion that the sui generis nature of the international investment law regime and independent arbitrators, is one of the primary reasons for inconsistency issues within international investment law. 2.2 The Nature of International Trade Law As in the case of the international investment law regime, the early beginnings of international trade law were based on economic arguments and merchants’ need of legal protection. From the early ages, international trade was developed by the merchants. The Greeks, Romans, Phoenicians, and in the years of global discovery, Dutch, Spanish, English and Portuguese explorers established 16 17

Supra nt. 14, pp. 32–35. Supra nt. 16, p. 10.

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international trade routes and helped the progress of the international trade regime.18 Therefore in the 17th and 18th centuries, merchants’ economic activities and protection of the countries from hostile economic activities brought about the need to set legal norms and principles, especially in Great Britain and Continental Europe.19 With ideas of David Hume and Adam Smith, the strong ties between international trade and economics were theorized.20 Strong ties between international trade and economics were theorized through the ideas of David Hume and Adam Smith. However, early versions of international trade norms and principles made up part of the bilateral Friendship, Commerce and Navigation treaties, for example international investment law norms and principles.21 After wwi, the League of Nations supported developing international trade and international trade law based on liberal economic theories. Despite the support of the League of Nations, the Great Depression and wwii caused protectionist practices in world economy and raised tariffs; even the usa Reciprocal Trade Agreements Programme could not prevent the deteriorating situation. The history and development of international trade law changed after wwii as the Western countries realized that isolation could not prevent recession and economic crisis. Furthermore, in order to sustain international peace and security, international trade played a key role and it brought in international norms and principles to regulate international trade regime. In 1946 and 1947, 57 countries negotiated international trade rules with the usa, the United Kingdom and the United Nations Economic and Social Council leading. Finally, the un Conference on Trade and Employment was finalised in November 1947, later on it would be named the Havana Charter.22 Besides the negotiations under the un Economic and Social Council, other negotiations were proceeding under the Interim Commission of ito, as of December 1945. The fundamental aims of the ito negotiations were to reduce high trade tariffs and conclude a multilateral agreement on international trade and commerce. The second part of the ito negotiations was agreed, and the General Agreement on Tariffs and Trade was signed in 1947.23 After 18 19 20 21 22 23

Mercurio, B., and others, “World trade law: texts, materials and commentary” (First edn, Hart 2008), p. 66. Trebilcock, M.J. and Howse, R., “The Regulation of International Trade” (Third edn, Routledge Taylor & Francis Group 2005), pp. 1–3. Supra nt. 21. Supra nt. 22. Supra nt. 21 p. 67. Supra nt. 1 p. 44.

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the 1947 Geneva round and signing of the gatt, negotiations were finished and parties agreed on improvements to the international trade regime and gatt. Finally, the Uruguay round (1986–1994) presented the opportunity in which to establish the wto.24 Today, international trade law, the international trade regime and related treaties—especially The General Agreement on Tariffs and Trade (hereinafter gatt) and The General Agreement on Trade in Services (hereinafter gats)— are governed by the World Trade Organization. Moreover, disputes are claimed and solved between states. With the establishment of the wto, the international trade law regime gained its multilateral character and became institutionalized. Although bilateral and other multilateral trade agreements and treaties still exist, the wto norms and principles are the fundamentals of the international trade law regime. The wto system includes general council, trade areas’ specialized committees, councils, working groups and a dispute settlement body.25 The top decision body of the wto is the Ministerial Conference and signatory states are able to solve their problems here. From the aforementioned explanations, it is clear that the wto and inter­ national trade law have an institutionalized and multilateral character. Despite the bilateral and other trade agreements between states, the international trade law regime is primarily and mainly developed through the wto regime. Member states can solve their trade related disputes by the wto dispute settlement body and decisions are binding. In the wto dispute settlement system, the disputing parties may be able to apply their appellate right in the Appellate Body, where decisions are final and binding. In the wto dispute settlement system, dispute parties are both sovereign states, and they are obliged to implement the wto Dispute settlement body’s decisions. The dispute settlement body and the Appellate Body do not are not bound by precedents with precedents or stare decisis but they should take related or previous decisions in related issues into consideration. Therefore, this gives a consistent and cyclical characteristic to the wto regime. Furthermore, this also provide consistency and uniformity among dsb and Appellate Body decisions and application of the wto law. Another important characteristic of the wto law is that member states are obliged to invoke the wto law in their national law and they should avoid

24 25

Supra nt. 21 p. 70. Supra nt. 1 p. 118.

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conflict between wto law and national law.26 In the international law aspect, in the case of conflict between other international law norms and principles and the wto law, other international norms and principles may prevail, such as human rights’ treaties.27 Lastly, the wto law may help to fight against poverty and establish good governance because the uniformity of fundamental norms and principles helps to control arbitrary treatment of governments on economies, and application of discriminatory norms and principles in trade law. 3 Inter-play between International Investment Law and the wto Law As previously explained, the international investment law regime is fragmented and mostly based on bilateral agreements. Moreover, parties are different from other international law regimes. The wto law and international trade law has developed in a more multilateral and less fragmented way. The wto regime has a dispute settlement body and Appellate Body and hence the wto regime and international trade law progresses better as far as consistency and uniformity are concerned. According to many scholars, the international investment regime needs a multilateral treaty, dispute settlement body and appellate body in order to maintain uniformity and consistency, and the wto regime and international trade law can be used as a guide for this process.28 However, supporters of these approaches have missed some important points. First of all, their nature is different from each other. As emphasized earlier, actors of international investment law regime are sovereign states and private persons who have an international legal personality. The system is based on bits or other international legal agreements which involve investment provisions. As a consequence, the nature of the international investment law regime does not make it easy to establish a dispute settlement body and appellate body like the wto, because all bits have different wording or represent different logic, based on sovereign states’ consensuses. 26 27

Supra nt. 1 pp. 64–65. Lindroos, A., and Pauwleyn, J., “ Conflict of Norms in Public International Law: How wto Law Relates to other Rules of International Law “ [Martinus Nijhoff Publishers, an imprint of Brill] 2 International Organizations Law Review, p. 227. 28 Sushama, D.J., “Appellate Structure and Need for Legal Certainty in Investment Arbitration” Kluwer Arbitration Blog accessed 01/05/2014.

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Additionally, the desirability of consistency and uniformity of international investment regime via multilateral agreements should be discussed.29 In the past, there were attempts to create multilateral investment treaty but all those attempts failed because states did not like to lose their privileges in host states, which they gain with bits.30 In other words, international trade law and the wto regime cannot guide— as suggested in the general literature—international investment law regime in aspects of consistency and uniformity. However, this does not mean that there is nothing to gain from the wto regime. The most important and remarkable lesson which the international investment regime should learn from the wto law, is with relevance to precedent/stare decisis issues. As previously stated, the dispute settlement body and appellate body do not bind with previous decisions, whereas relevant decisions should be taken into account in the wto law. In international investment arbitration, arbitrators do not bind with other awards—even if they arise from similar issues and the same treaties. In this perspective, international investment arbitrators should re-calibrate their system and take other awards into account.31 When the approach reversed and the possible guidance of international investment law regime to international trade law and the wto law would be discussed, issues related to enforcement of dispute settlement awards and the wto commitments may become to surface. Alford explain this issue in five steps; 1.

Umbrella clauses in bits could create a private right of action for resolving wto disputes. Investment arbitration circumvents the traditional barriers to initiating a wto dispute. 2. With wto dispute settlement the Member States control all decisions with respect to adjudication and resolution of the dispute.

29

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31

Kurtz, J., “Building Legitimacy Through Interpretation in Investor-State Arbitration: On Consistency, Coherence and the Identification of Applicable Law” in Zachary Douglas, Joost Pauwelyn and Jorge Vinuales (eds), The Foundations of International Investment Law: Bridging Theory Into Practice (1st edn, Oxford University Press 2013) accessed 21/09/2013. Legum, B., “Options to Establish Appellate Mechanism for Investment Disputes”’ in Karl P. Sauvant and Michael Chiswick-Patterson (eds), Appeals Mechanism in International Investment (4, First edn, Oxford University Press 2008). Bekker, P.H.F., “Recalibrating the Investment Treaty Arbitration System Through NonCompartmentalized Legal Thinking” Harvard International Law Journal < http://www. harvardilj.org/wp-content/uploads/2013/12/Bekker_to_Publish.pdf> accessed 01/01/2014.

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4.

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Investment arbitration is not a unilateral remedy imposed in response to a wto violation, but neither is it wto dispute settlement. Investment arbitration may provide a vehicle for compensating or attenuating the harm caused to investors without offending the wto restrictions on unilateral trade. The goal of investment arbitration is, consistent with traditional understandings of state responsibility, to “wipe-out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed.” In investment arbitration monetary compensation effect directly investors, and home state did not involve with the issue. This helps to parties gain time and money.32

The investment treaties and international investment regime are designed to aid enforcement of arbitration of awards more effectively than the wto regime and international trade law. The broadly-written and interpreted umbrella clauses of investment treaties can be a good option to force member states of the wto for applying their commitments.33 4 Conclusion As previously summarised, the international investment law regime developed separately from other international economic law regimes, including international trade law. In addition, its nature is different because the needs and roles of relevant actors are various. The actors involved in the international investment regime have various roles and positions in comparison to other international law regimes, for example, in international trade law all regimes are governed by states via international institutions and international organisations. Despite on-going discussions with regard to international investment law, according to the icsid 176, disputes were solved under the icsid Convention, and 275 investment disputes have been solved under the icsid Convention up to today.34 In total, 451 international investment disputes have been solved under icsid. If other international investments dispute resolution institutions, ad hoc 32

33 34

Alford, R., “Using Investment Arbitration to Enforce wto Commitments” Kluwer Arbitration Blog accessed 18/04/2014. Ibid 33. International Center for Settlement of Investment Disputes, About icsid, 2014, available online at (accessed 15 November 2013).

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arbitrations and alternative dispute resolution methods are counted, it gives a picture of the dimensions of international investment. Besides investment disputes, today, almost 2600 bits and around 300 regional trade and investment treaties are applicable.35 This means that although modern international investment law is young, its significance cannot be ignored. It is a large and promising new legal area, which may able to achieve more than other legal regimes. In international trade law regime, the system has more uniform structure, fragmentation in the system is less than international investment law. Main actors in international trade law regime are sovereign states and international institutions. The regime is mostly govern by the wto, and this makes international trade law regime’s norms and principles more coherent and consistent. In summary, both legal regimes are different from each other—especially their natures are different from each other—and their development processes are also different. On the one hand, we have bilateral and not uniform-natured international investment law regime; on the other hand, multilateral and uniform wto law and international trade regime. Despite their different natures— and in this aspect it would not be fair to compare them—they both come from international economic law and international law, in the broader perspective. As a result, they share the same background and common legal norms and principles. As originally stated, they are two branches of one tree. In other words, international investment law regime and international trade law regime are held under international law, more specifically under international economic law but their nature and their rules are different. Even if they pursue their progress in different ways and different aims, they have lessons to learn from each other. If we put the classical approach to one side, which indicates that the international investment law regime may learn from the wto law, equally the wto law has lessons to learn from the international investment law regime. Bibliography Alford R, ‘Using Investment Arbitration to Enforce WTO Commitments’ Kluwer Arbit­ ration Blog accessed 18/04/2014. Alvarez, E, ‘The Once and Future Foreign Investment Regime’, in: Arsanjani, M.H. et al., eds., Looking to the Future: Essays on International Law in Honour of W Michael Reisman, Koninklijke Brill N.V, Leiden, 2010. 35

Vandevelde, K.J., “A Brief History of International Investment Agreements”, uc Davis Journal of International Law & Policy, vol. 12, ed. 1, 2005, 1–2.

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Bekker PHF, ‘Recalibrating the Investment Treaty Arbitration System Through NonCompartmentalized Legal Thinking’ Harvard International Law Journal < http:// www.harvardilj.org/wp-content/uploads/2013/12/Bekker_to_Publish.pdf> accessed 01/01/2014. Browers, C and Schill, S, ‘Is Arbitration a Treat or a Boon to the Legitimacy of International Investment Law’, Chicago Journal of International Law, vol. 9, 2009. Dolzer, R, and Schreuer, C, ‘Principles of International Investment Law’, Oxford University Press, Oxford, 2012. Kurtz J, ‘Building Legitimacy Through Interpretation in Investor-State Arbitration: On Consistency, Coherence and the Identification of Applicable Law’ in Douglas Z, Pauwelyn J and Vinuales J (eds), The Foundations of International Investment Law: Bridging Theory Into Practice (1st edn, Oxford University Press 2013) accessed 21/09/2013. Leal Arcas, R, ‘The multilateralization of international investment law’ 35 North Carolina journal of international law and commercial regulation 33, 2009. Leal Arcas, R, ‘The multilateralization of international investment law’ 35 North Carolina journal of international law and commercial regulation 2009. Legum B, ‘Options to Establish Appellate Mechanism for Investment Disputes ’ in Sauvant KP and Chiswick-Patterson M (eds), Appeals Mechanism in International Investment (4, First edn, Oxford University Press 2008). Lindroos A and Pauwleyn J, ‘ Conflict of Norms in Public International Law: How WTO Law Relates to other Rules of International Law’ [Martinus Nijhoff Publishers, an imprint of Brill] 2 International Organizations Law Review 227, 2005. Mercurio B and others, World trade law: texts, materials and commentary/Simon Lester and Bryan Mercurio; with Arwel Davies and Kara Leitner (First edn, Hart 2008). Salacuse, J. W, ‘The Law of Investment Treaties’, Oxford University Press, New York, 2010. Sornarajah, M, ‘The International Law on Foreign Investment’, Cambridge University Press, Cambridge, 2010. Sushama DJ, ‘Appellate Structure and Need for Legal Certainty in Investment Arbitration’ Kluwer Arbitration Blog accessed 01/05/2014. Trebilcock MJ and Howse R, The Regulation of International Trade (Third edn, Routledge Taylor & Francis Group 2005). Van Den Bossche, P, The Law and Policy of the World Trade Organizations (First edn, Cambridge University Press 2008a). Van Den Bossche, P, ‘The Law and Policy of the World Trade Organizations’ (First edition, Cambridge University Press 2008b). Van Harten, G, ‘Investment Treaty Arbitration and Public Law’, Oxford University Press,Oxford, 2007. Waters, M, ‘Globalization’, Routhledge, London, 2001.

chapter 18

Legal Certainty during EU Accession: What Can a Foreign Investor in a Future Member State Legitimately Expect? Sadie Blanchard i Introduction The expansion of the European Union1 has raised controversy over the compatibility of newly applicable eu law in recently acceded Member States with their pre-existing treaties protecting foreign investment. The position of the European Commission is that “intra-eu BITs are not compatible with the eu single market.”2 Provisions of eu law governing the movement of capital, non-discrimination among nationals of Member States, and dispute resolution on matters of eu law have been argued to conflict with provisions of bilateral investment treaties (BITs) between eu Member States and with the investment chapter of the Energy Charter Treaty (ect) as between Member States.3 Nevertheless, 190 bilateral investment treaties remain in force among Member States.4 In addition, nine States are on the eu accession agenda; of those, Serbia alone has twenty BITs in force with current Member States.5 This chapter focuses on intra-eu investment treaty claims challenging conduct of newly acceded Member States related to the requirements of ­accession. Despite the ongoing efforts of the European Commission to foreclose such 1 Many of the facts of the disputes discussed herein occurred before the Lisbon Treaty, under the European Community; however, for the sake of simplicity I will refer throughout the paper to the European Union. 2 European Commission, Monitoring Activities and Analysis, Bilateral Investment Treaties Between Member States, http://ec.europa.eu/internal_market/capital/analysis/monitoring _activities_and_analysis/index_en.htm#maincontentSec5 (last visited 14 Nov. 2014). 3 E.g., Eureko B.V. v. Slovak Rep., pca Case No. 2008–13 (Eureko I), Award on Jurisdiction, Arbitrability and Suspension, paras. 175–186 (26 Oct. 2010); European Commission, Monitoring Activities and Analysis, supra note 2. 4 Erhard Bohm, Marie-Christine Motaabbed, Chapter iv: Investment Arbitration, The European Union and the Unloved BITs of Its Member States, in Christian Klausegger, Peter Klein, et al. (eds.), Austrian Yearbook on International Arbitration, Vol. 2014, pp. 371–392, at 372. 5 Serbia, Bilateral Investment Treaties, unctad Investment Policy Hub, http://investmentpolicyhub .unctad.org/IIA/CountryBits/187#iiaInnerMenu. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_019

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claims,6 they will remain relevant for some time yet.7 Investment treaty tribunals have consistently rejected arguments that they lack jurisdiction over intra-eu disputes.8 Many Member States have refused to comply with European Commission requests to terminate their intra-eu BITs.9 Even if they were to comply, the treaties typically include a clause maintaining their protections for existing investors for a number of years (typically ten or fifteen) after termination.10 Thus, even if a future eu accession treaty expressly terminated existing BITs with Member States, or if Member States terminated their BITs with one another according to the treaties’ procedures, they could still be subject to investor claims under the treaties for more than a decade. It is questionable whether efforts to rescind such clauses through amendment and joint termination can affect disputes relating to past conduct.11 Finally, the accession cases have broader implications, discussed below, for investments made in current Member States and for non-eu investors in the eu. 6

7

8

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10 11

E.g., Amicus Curiae Brief of the European Commission in U.S. Steel Global Holdings I B.V. v. The Slovak Republic, pca Case No. 2013–6, at 20–25 (15 May 2014); Invitation to submit comments pursuant to Article 108(2) of the Treaty on the Functioning of the European Union, Official Journal of the European Union, 2014/C 393/03 (7 Nov. 2014), available at http:// eur-lex.europa.eu/legal-content/EN/TXT/?qid=1404723846895&uri=OJ:JOC_2014_393_R_0003. The settlement of another such case was reported in October 2014. See Luke Eric Peterson, Revealed: A First Look at Arguments Made by European Commission in its Recent Bid to Halt UNCITRAL Arbitration Under Intra-eu BIT, IA Reporter, 21 Oct. 2014, http://www .iareporter.com/articles/20141022_2. Electrabel v. Hungary, icsid Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, paras. 4.158-4.166 (30 Nov. 2012); Eastern Sugar v. Czech Republic, scc No. 088/2004, Partial Award, paras. 104–176 (27 March 2007); Oostergetel v. Slovak Republic, Decision on Jurisdiction, para. 74 (30 April 2010); Micula v. Romania, icsid Case No. ARB/ARB/05/20, Decision on Jurisdiction, at 86–97; aes, pp. 27–33; Eureko I, Award on Jurisdiction, Arbitrability and Suspension, pp. 60–77 (26 Oct. 2010). European Commission, Monitoring Activities and Analysis, supra note 3; Damon Vis-Dunbar, eu Member States Reject Call to Terminate Intra-eu Bilateral Investment Treaties, Investment Treaty News, 10 Feb. 2009, http://www.iisd.org/itn/2009/02/10/eu-member-states-reject-the -call-to-terminate-intra-eu-bilateral-investment-treaties/ (last visited 15 Nov. 2014).The European Commission recently initiated infringement proceedings against five Member States for refusing to terminate their intra-EU BITs. European Commission, Press Release, Commission asks Member States to Terminate their Intra-EU Bilateral Investment Treaties, 18 June 2015, http://europa.eu/rapid/press-release_IP-15-5198_en.htm. E.g., Agreement on Encouragement and Reciprocal Protection of Investments Between the Kingdom of the Netherlands and the Czech and Slovak Republic, art. 13(3), 1 Oct. 1992. Eastern Sugar, paras. 176–177; Luke Eric Peterson, Czech Republic Terminates Investment Treaties in Such a Way as to Cast Doubt on Residual Legal Protection for Existing Investments, International Arbitration Reporter, 1 Feb. 2011.

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This chapter does not challenge the conclusion uniformly reached by investment treaty tribunals that, under the Vienna Convention on the Law of Treaties (vclt), eu law does not supersede intra-eu investment treaties upon accession. It observes, however, that the legal uncertainty inherent in the accession process is in tension with investment treaty protections, and that arbitral tribunals must navigate between the legal certainty protected by investment treaties and the regulatory flexibility required for a State to satisfy the acquis communautaire and accede to the eu. Tribunals have confronted this tension when applying the fair and equitable treatment standard, which has been held to require good faith, due process, non-discrimination, and the protection of investors’ legitimate expectations.12 Several of these branches of fair and equitable treatment may be used to assess whether a State’s conduct during accession conforms to its investment protection obligations.13 This paper focuses on one branch—legitimate expectations—that is particularly pertinent to the tension between regulatory flexibility and legal certainty. It examines how arbitral tribunals hearing claims against newly acceded Member States have applied the legitimate expectations doctrine to navigate investors’ claims to enforce alleged pre-accession expectations throughout and beyond accession. Significant points of agreement and one major divergence of views emerge from the arbitral awards. The chapter supports an approach that properly accounts for the time at which and context in which an investor’s expectations are formed, as opposed to a blanket rule declining to protect expectations against State conduct required by eu law. It argues that such a blanket rule fails to protect legitimate expectations and hampers the ability of candidate countries to attract investment. The chapter proceeds as follows. Part ii explains the current state of the investment treaty jurisprudence, which consistently holds that investment treaty protections survive eu accession. Part iii describes the competing values at stake during the accession process and the role of the legitimate expectations doctrine in mediating the tension between them, and then briefly explains the contours of the doctrine in investment treaty law. Part iv analyzes arbitral tribunals’ legal findings on legitimate expectations, and Part v concludes with a discussion of the existing approaches’ systemic consequences for eu candidate countries and potential broader implications. 12 13

Dolzer & Schreuer, Principles of International Investment Law 142–160 (2d ed. 2012). For example, tribunals have also considered how eu law and accession obligations impact the rationality, reasonableness, and arbitrariness of an acceding State’s conduct. See aes v. Hungary, icsid Case No. ARB/07/22, Award, paras. 7.6.9, 9.2.13, 9.2.16, 10.2.3, 10.3.16 (23 Sept. 2010); Micula, paras. 748–754.

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293

The Continued Applicability of Investment Treaty Protections after eu Accession

Jurisdictional and substantive arguments put forward by the European Commission and some respondent States that, upon accession, eu law supersedes investment treaty protections have consistently failed. Investment tribunals have decided that they retain jurisdiction over investment treaty disputes between Member States and investors of other Member States.14 The tribunals have held that, under the rules of treaty interpretation in the vclt, the eu accession treaties concluded to date have not expressly or implicitly terminated pre-existing investment treaties or superseded the right to investor-State arbitration granted in BITs. That right can be terminated only by the procedure set out in the relevant BIT, typically requiring one treaty party to formally notify the other of its intent to terminate and preserving the right for investments that exist at the time of termination.15 Tribunals have also rejected arguments that eu law displaces investment treaties’ substantive protections.16 The European Commission, while acknowledging that intra-eu BITs are not implicitly terminated by eu accession under Article 59 of the vclt,17 has argued that investment treaty provisions are inapplicable under several theories: (i) lex posterior, in particular under Article 30 of the vclt, which governs successive treaties relating to the same subject matter;18 (ii) “internal eu conflict rules of supremacy” where the relevant investment treaty specifies that the applicable law includes the domestic law of the treaty parties or other relevant rules of international law applicable between them;19

14

15 16 17 18 19

Electrabel, paras. 4.158–4.166; Eastern Sugar v. Czech Republic, scc No. 088/2004, Partial Award, paras. 104–176 (27 March 2007); Oostergetel v. Slovak Republic, Decision on Jurisdiction, para. 74 (30 April 2010); Micula, pp. 86–97; aes, pp. 27–33; Eureko I, Award on Jurisdiction, Arbitrability and Suspension, pp. 60–77 (26 Oct. 2010). E.g., Agreement on Encouragement and Reciprocal Protection of Investments Between the Kingdom of the Netherlands and the Czech and Slovak Republic, art. 13, 1 Oct. 1992. E.g., Eureko I, Final Award, paras. 272–276. Eureko I, Award on Jurisdiction, Arbitrability and Suspension, para. 187. E.g., id., paras. 188–193. E.g., id., paras. 11, 188–193. For example, Article 26(6) of the ect requires a tribunal to apply “this Treaty and applicable rules and principles of international law.”

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(iii) subordination of the ect to eu law in light of its special historical grounding in the European integration project and the eu’s status as a contracting party.20 Applying the vclt,21 investment tribunals have not found any basis for concluding that eu law displaces the substantive protections of investors in the disputes before them.22 In some disputes the challenged conduct occurred before accession, so eu law was not yet applicable in the host State.23 In the post-accession context, tribunals have rejected the argument that the relevant norms should be compared in the abstract in search of hypothetical incompatibilities, instead reasoning that, for a conflict to arise, a specific provision of eu law relevant to the dispute would have to be at odds with a relevant provision of the BIT. High-level overlap in the matters regulated was not sufficient.24 Thus, in the cases before them, investment tribunals have found no incompatibility between the relevant rules that would justify disregarding investment protection standards or revoking recourse to investor-State arbitration as a means of enforcing them. However, even if there is no c­ onflict of legal rules, there are undeniable tensions between the rights ­protected by investment treaties and the legal change involved in eu accession. iii

The Tension between Legal Certainty and Change during Accession: A Role for Legitimate Expectations

One tribunal identified the “competing values” at stake during accession as “the substantive and procedural protections of the rights of a foreign investor and the economic integration of eu Member States into the European Union operating under the rule of law.”25 That characterization can be refined by unpacking each side of the posited dichotomy.

20 21 22 23 24 25

Electrabel, paras. 4.132–4.169. Eureko I, Jurisdiction, paras. 288–292; Electrabel, paras. 4.130–4.133; Eastern Sugar, paras. 142–181. E.g., Eureko I, Final Award, paras. 272–277; Eastern Sugar, paras. 104, 160–165, 180; Oostergetel, paras. 74, 79, 86–87; Electrabel, para. 4.191. Micula, para. 319; Eastern Sugar, para. 176. Eureko I, Final Award, paras. 274–276. Electrabel, para. 4.112.

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In investment treaties, States promise certain protections for foreign investors in order to attract capital to promote economic development.26 For eu accession candidates, attracting foreign investment is an integral part of the accession process, supporting the development of the economy to a level that can compete in the common market.27 Indeed, until recently the stability and association agreements concluded by candidate countries called for the conclusion of bilateral investment treaties with Member States to promote a favorable investment environment.28 Legal predictability is widely recognized as a key aspect of a favorable investment environment that investment treaties seek to promote. FN: E.g., Dolzer & Schreuer, supra note 12, at 22; infra note 33 and accompanying text. On the other hand, an immediate consequence, if not a goal, of eu stability and association agreements and of accession agreements is to quite drastically alter the domestic regulatory environment to conform it to eu norms (the acquis communautaire), particularly in the area of economic governance. Thus, another key value at stake during the transition process is regulatory flexibility. Tension thus exists between the regulatory flexibility necessary to permit the far-reaching reforms required for European integration and the maintenance of sufficient legal certainty to attract foreign investment, itself instrumental to achieving European integration. This is not discordance solely between investment treaty rules and accession requirements; it is inherent in the accession process itself. The legitimate expectations doctrine is well suited to mediating this tension. The following definition of the doctrine is drawn from a comparative study of national systems: “[A]ny individual who, as a result of governmental conduct, holds certain expectations concerning future governmental activity, can require those expectations to be fulfilled unless there are compelling reasons for not doing so.”29 Legal protection of legitimate expectations may be rooted in several theories. Like the principles of estoppel and good faith, the doctrine protects reliance, placing “a responsibility [on] the party making [a] statement as a necessary assumption of the risk of another party acting upon the statement,”30 especially where the party making the statement “secures 26 27 28

29 30

E.g., Treaty Between the Federal Republic of Germany and the State of Israel Concerning the Encouragement and Reciprocal Protection of Investments, Ger.-Isr., June 24, 1976, Preamble. Micula, paras. 190–195, 677–678. E.g., Europe Agreement Establishing an Association Between the European Economic Communities and their Member States, of the One Part, and Romania, of the Other Part, art. 74(2) (1994). Robert Thomas, Legitimate Expectations and Proportionality in Administrative Law, at xv (2000). D.W. Bowett, Estoppel Before International Tribunals and Its Relation to Acquiescence, 33 British Y.B. of International Law 176 (1957), quoted in W. Michael Reisman & Mahnoush

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some advantage” to itself.31 From an economic perspective, the protection of legitimate expectations promotes legal certainty to incentivize the productive allocation of resources and thus the creation of economic value. The jurisprudence of legitimate expectations across jurisdictions grapples with the limits of protection of expectations—with where to place the boundary between legal certainty for private actors and regulatory flexibility for the State.32 Investment treaty jurisprudence has elaborated legitimate expectations as a strand of the fair and equitable treatment standard typically inscribed in investment protection and promotion treaties. A recent award stated, “It is widely accepted that the most important function of the fair and equitable treatment standard is the protection of the investor’s reasonable and legitimate expectations.”33 The doctrine includes two broad aspects. First, it holds a State liable for violating specific undertakings it has made vis-à-vis foreign investors, including contractual agreements and unilateral promises that meet certain conditions. Second, and more controversially, it has been found to protect the general stability of the legal framework.34 The protection of investors’ expectations has raised concerns about the ability of a State to change its policy.35 It may appear that an investor who cannot establish objectively wrongful conduct by the State (such as bad faith, arbitrariness, discrimination, lack of transparency, or failure of due process) can clear the lower hurdle of proving that the State undermined its subjective expectations. This concern is heightened when the general stability of the legal framework is found to be protected and in the context of reform processes such as eu accession. When a State implements extensive regulatory changes to comply with eu law, no great tension should arise from the application of investment treaty norms that require the State to execute any changes transparently, rationally, and non-discriminatorily, and to afford due process of law H. Arsanjani, The Question of Unilateral Governmental Statements as Applicable Law in Investment Disputes, in Volkerrecht Als Wertordnung—Common Values in International Law. Essays in Honour of Christian Tomuschat, at 409, 420 (Dupuy et al., eds. 2006). 31 Id. See also Case Concerning Territorial Dispute (Libyan Arab Jamahiriya v. Chad), Judgment of Feb. 13, 1994, I.C.J. Reports 1994, at 6. 32 Michele Potesta, Legitimate Expectations in Investment Treaty Law: Understanding the Roots and the Limits of a Controversial Concept, 28 icsid Review 88, 93–98 (2013); Elizabeth Snodgrass, Protecting Investors’ Legitimate Expectations: Recognizing and Delimiting a General Principle, 21 icsid Review 1, 30–48 (2006). 33 Electrabel, para. 7.75. 34 Potesta, supra note 32, at 100–116; Snodgrass, supra note 32, at 5–11. 35 edf v. Romania, icsid Case No. 05/13, Award para. 217 (8 Oct. 2009); Douglas, Nothing if Not Critical for Investment Treaty Arbitration: Occidental, Eureko and Methanex, 22(1) International Arbitration 27, 28, 35, 51 (2006).

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to those affected. By contrast, the idea that beyond those fundamentals of fairness and good governance, an investor’s expectation of a specific regulatory outcome should be upheld might give greater cause for concern. That basic background sets the stage for examining how investor-State tribunals have applied this doctrine in the context of eu accession. iv

Two Views on Legitimate Expectations and Accession

In four arbitrations—Eastern Sugar v. Czech Republic,36 AES v. Hungary,37 Electrabel v. Hungary,38 and Micula v. Romania39—treaty-based investor-State arbitration tribunals considered arguments that eu accession impacted what an investor could legitimately expect when it made its investment in an eu candidate country. This section presents and analyzes the tribunals’ legal reasoning and conclusions. A The Presumption of Non-Stabilization Following the trend of more recent cases,40 the eu accession cases have emphasized the host State’s right to regulatory flexibility over any right of the investor to general stability of the legal framework. Even in earlier cases, tribunals held that not just any change to the law would support a claim, but only fundamental changes to the legal framework. For example, in cms v. Argentina, the tribunal reasoned that “[t]he measures complained of did in fact entirely transform and alter the legal and business environment under which the investment was made,” thwarting the investor’s legitimate expectations in violation of the investment treaty.41 Even that exacting standard for liability, however, could present limitations to a State undergoing an extensive reform process like eu accession, and the trend away from protection of general regulatory stability allows more leeway for harmonization with eu law. 36 37 38 39 40

41

Eastern Sugar v. Czech Republic, scc No. 088/2004, Partial Award (27 March 2007); aes v. Hungary, icsid Case No. ARB/07/22, Award (23 Sept. 2010). Electrabel v. Republic of Hungary, icsid Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability (30 Nov. 2012). Micula v. Romania, icsid Case No. ARB/ARB/05/20, Award (11 Dec. 2013). Parkerings v. Lithuania, Award, paras. 327–38 (11 Sept. 2007); bg Group v. Argentina, Final Award, paras. 292–310 (24 Dec. 2007); Plama v. Bulgaria, Award, paras. 258–61 (27 Aug 2008); aes v. Hungary, Award, paras. 9.3.27 (23 Sept 2010); Paushok v. Mongolia, Award, 28 April 2011, para. 302; Impregilo v. Argentina, Award, 21 June 2011, paras 290–91; El Paso v. Argentina, Award, paras. 344–55, 365–74 (31 Oct 2011); edf, paras. 216–220. cms v. Argentina, Award, paras. 274–276 (12 May 2005) (internal citations omitted).

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The eu accession cases in particular emphasize the general regulatory flexibility of the acceding State.42 That is true even of the awards rendered under the ect, which expressly provides in Article 10(1) that the Contracting Parties “shall… encourage and create stable…conditions for investors of the other Contracting Parties.” The aes tribunal elaborated the limits of the ect’s protection of stability. It reasoned that the relevant stability is at the level of the legal framework, which is by definition subject to change as it adapts to new circumstances day by day and a state has the sovereign right to exercise its powers which include legislative acts. …[A]ny reasonably informed business person or investor knows that laws can evolve in accordance with the perceived political or policy dictates of the times.43 The tribunal held that “absent a specific commitment from Hungary” to maintain the situation upon which the investor allegedly relied, the investor could not benefit from the ect’s stability provision.44 Similarly, the Micula tribunal, interpreting a typical fair and equitable treatment provision (unlike the ect’s explicit stability reference), reasoned, In the Tribunal’s view, the fair and equitable treatment standard does not give a right to regulatory stability per se. The state has a right to regulate, and investors must expect that the legislation will change, absent a stabilization clause or other specific assurance giving rise to a legitimate expectation of stability.45 Therefore, the cases demonstrate a presumption against regulatory stabilization, requiring specific assurances in order for any expectation of stability to be protected. B The Importance of the Time at Which Expectations Are Formed It is well established that the relevant expectations are those that exist at the moment the investment is made.46 This aspect of the doctrine preserves additional space for regulatory change. An investor cannot complain about aspects 42 43 44 45 46

Micula, paras. 529, 666; aes, paras. 9.3.28–9.3.35; Electrabel, paras. 7.75–7.77. aes, paras. 9.3.29–9.3.34. Id., para. 9.3.34. Micula, para. 666. Dolzer & Schreuer, Principles of International Investment Law 146 (2d ed 2012); aes, para. 9.3.7–9.3.8.

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of the legal framework that existed before it made its investment,47 including preexisting or foreseeable instability in the legal and regulatory framework.48 In each of the four eu accession cases, the investment was made, and the relevant expectations thus formed, before accession but after the host State had entered into a stability and association agreement with the European Union (the Europe Agreements), which required the State to harmonize its law with eu law and also indicated that the State might eventually become an eu Member State. In Eastern Sugar, the tribunal determined that the investor’s expectations about the future regulatory environment at the time it made its investment had to take into account the Czech Republic’s “obvious” desire to join the eu.49 Thus, Eastern Sugar “had to expect that the regulation of the sugar market would, as accession neared, become roughly the protectionist regime prevailing in European Union countries.”50 The tribunal thus looked to the history of eu agricultural regulation as forming the relevant expectations that Eastern Sugar could have held about the future of its regulation in the Czech Republic. Similarly, the Micula tribunal considered the context of eu accession relevant to whether the claimants’ expectations were legitimate.51 Thus, broadly, legislative and regulatory reforms moving the host State’s law closer to the eu regulatory environment are foreseeable to investors in eu candidate countries and must be taken into account when determining what they could legitimately expect. But is it unreasonable for investors to hold any expectations whatsoever of stability? The next section considers the issue of specific commitments by the host State, which give rise to the most basic core of expectations subject to legal protection. C Legitimate Expectations Arising from Host State Commitments The eu accession cases diverge on the treatment of specific commitments by the host State. This divergence departs from the larger body of arbitral jurisprudence and commentary, in which the protection of specific commitments is the less controversial aspect of the legitimate expectations doctrine.52 47 48

49 50 51 52

Duke Energy v. Ecuador, icsid Case No. ARB/04/19, Award, para. 340 (18 Aug. 2008); Tecmed, icsid Case No. arb(af)/00/2, Award, para. 154 (29 May 2003). Bayindir v Pakistan, Award, paras. 192–197 (27 Aug 2009); Ursula Kriebaum, The Relevance of Economic and Political Conditions for the Protection under Investment Treaties, 10 The Law and Practice of International Courts and Tribunals 383, 387 (2011). Eastern Sugar, paras. 235–242. Id., para. 237. Micula, paras 327–328. E.g., Snodgrass, supra note 32, at 30–32.

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In each of the accession cases, the precise impact of reforms that would be made to comply with the acquis communautaire, as well as when accession would occur, was not foreseeable when the investments were made, as many as ten years before accession.53 eu candidate countries seeking to attract capital for development negotiate with investors and implementing incentive schemes amid such uncertainty. Particularly murky issues include whether certain contractual arrangements will later be determined to constitute State aid, and whether incentives expressly labeled as State aid for disfavored regions will be determined to violate eu law. Given the absence of protection of general regulatory stability, one way that candidate countries can attract investment is by committing to maintain particular situations for a certain time period. Such commitments could include contracts with investors, unilateral undertakings, or other statements or conduct ­representing that a particular situation will be maintained or a regulation will not change.54 Two views have emerged in the eu accession cases regarding whether specific commitments of the host State during the accession process can give rise to legitimate expectations protected against eu law. Under one view, actions of the host State taken in a reasonable effort to comply with eu law can never violate an investor’s legitimate expectations. A second view holds that eu law and the harmonization requirements of the accession process are factual elements to be considered to determine what the investor legitimately expected when making the investment. 1 Electrabel: No Legitimate Expectations against eu Law Requirements The Electrabel tribunal held that eu law was part of the law applicable to the ­merits of the dispute; thus, the ect had to be interpreted harmoniously with eu law.55 It based this conclusion on what it found to be a recognition in Article 1(3) of the ect that eu decisions are binding on eu Member States.56 Article 1(3), falling under the heading “Definitions,” states, “Regional Economic Integration Organization” [(rieo)] means an organ­ ization constituted by states to which they have transferred competence over certain matters a number of which are governed by this Treaty, 53 54 55 56

Eastern Sugar, paras. 7–14; aes, para. 2.1.2, 3.2, 4.1–4.4.3, 4.12; Electrabel, paras. 6.1–6.2; Micula, paras. 179–185, 246. Id. Electrabel, paras. 4.132, 4.191. Id., para. 4.132 ; Art. 1(3) ect.

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including the authority to take decisions binding on them in respect of those matters. The eu is a Contracting Party to the ect as a rieo. On that basis, the tribunal invoked the investor’s legitimate expectations as impacting the applicable law: As regards protection under the ect, investors can have had no legitimate expectations in regard to the consequences of the implementation by an eu Member State of any such decision by the European Commission. In other words, the possible interference with a foreign investment through the implementation by an eu Member State of a legally binding decision of the European Commission was and remains inherent in the framework of the ect itself. [T]he ect does not protect the Claimant, as against the Respondent, from the enforcement by the Respondent of a binding decision of the European Commission under eu law.57 Further, the tribunal elaborated a deferential standard to be applied to actions taken to comply with eu law: not only actions required by eu law but also those reasonably believed to be required could not be found to violate the investor’s legitimate expectations, in addition to a margin of appreciation in implementation.58 Put another way, the principle elaborated in Electrabel is that investors of eu Member States investing in other Member States have a legitimate expectation only that Member States will implement their reasonably perceived eu law obligations in a rational and non-arbitrary manner, thus collapsing legitimate expectations into the more “objective” doctrines of fet.59 Under the great deference the tribunal afforded to actions required by eu law or institutions, even specific assurances made by a Member State as to the maintenance of a particular situation would not be protected against changes required by eu law. The glaring problem with the Electrabel tribunal’s analysis is that it fails to consider the crucial question of the time at which expectations are formed. When Electrabel made its two investments, it would be nine and six years, respectively, before Hungary was an eu Member State.60 Therefore, the analysis that “investors can have had no legitimate expectations in regard to the consequences of the implementation by an eu Member State of any such decision by 57 58 59 60

Id., paras. 4.142, 4.169 (emphasis added). Id., para. 6.91. Paras. 6.73 et seq. Electrabel, paras. 6.1–6.2.

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the European Commission” is problematic.61 The reasoning presumes that an investor in an eu candidate country must expect that when that country becomes an eu Member State—at some unspecified future time, possibly a decade or more hence62—it might be subject to a binding adverse State aid decision. As explained above, when an investment is made in a candidate country, there is often great uncertainty regarding when accession will happen and how compliance with the acquis and, later, accession might impact the investment. In Electrabel, there was no finding that the investor should have known that its contractual arrangement would later be found to constitute illegal State aid. By applying the legitimate expectations doctrine in a novel way as impacting the applicable law rather than as a factual inquiry, the Electrabel tribunal placed all of the risk arising from the uncertainty inherent in accession on the investor. The tribunal declined to delve into the question of whether, as a matter of fact, Hungary represented to the investor that the pricing formula in its contract would continue beyond eu accession. Contractual promises are considered to be among the strongest evidence of undertakings creating legitimate expectations,63 and Electrabel had a contract whose term continued beyond accession.64 In addition, Hungary’s conduct indicated that it may have itself believed the contracts could continue: it argued before the European Commission shortly before accession that the contracts should be considered eu law-compatible State aid.65 There are thus at least prima facie indications that Hungary may have given specific representations to Electrabel. Despite these circumstances, the Electrabel tribunal declined to examine whether, as a matter of fact, Hungary created in the investor legitimate expectations that it subsequently breached by terminating Electrabel’s contract. 2 An Alternative: A Factual Inquiry into Whether State Commitments Created Legitimate Expectations In contrast to the Electrabel approach, three tribunals—including one constituted, like Electrabel, under the ect—have agreed that the harmonization requirements of the Europe Agreement (before accession) and eu law (after 61 62

Id., para. 4.142. The Agreement Creating an Association Between the Republic of Turkey and the European Economic Community was signed in 1963, and Turkey still has not acceded. 63 Potesta, supra note 32, at 100–101. 64 Electrabel, paras. 6.1–6.2. 65 Electrabel, paras. 6.67.

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accession) would be considered as facts going to the existence and the legitimacy of the investor’s expectations.66 As the Micula tribunal stated, [F]actually, the general context of eu accession must be taken into account when interpreting the BIT. …The overall context of eu accession in general and the pertinent provisions of eu law in particular may be relevant to the determination of whether…Claimants’ expectations were legitimate.67 In these cases, that eu law or harmonization obligations under the Europe Agreement required some action was not dispositive of whether the State could be held liable, but was one element to be taken into account.68 The aes tribunal found that that, entirely apart from any question of eu law, the investor had no legitimate expectation to the continuation of the situation on which it based its claim.69 The Eastern Sugar tribunal found that the challenged measures were not in fact required by eu law but were at odds with eu agricultural policy.70 The analysis in those cases is thus of limited relevance for the present discussion. Micula, however, extensively considered how the uncertainty inherent in the accession process should be taken to impact the investor’s legitimate expectations. The investors were found to have a legitimate expectation that the incentives they were granted by Romania to invest in underdeveloped regions would be maintained beyond accession because Romania took the requirements of eu accession into account in granting those incentives and in decisions thereafter to maintain them.71 Romania also gave investors various assurances that the incentives would be maintained for ten years.72 The tribunal analyzed eu State aid rules and determined that it was reasonable for the investor to believe that the aid it was granted conformed to eu law as permissible aid to promote underdeveloped regions.73 Indeed, the tribunal concluded 66

67 68 69 70 71 72 73

Eastern Sugar, paras. 232–242; Micula, paras. 327–328; aes, para. 7.6.6. The tribunal in aes followed this approach even though like Electrabel the arbitration was brought under the ect and involved post-accession State conduct. See aes, para. 7.6.6. Micula, paras 327–328. Id., para. 513–514. aes, para. 9.3.18. Eastern Sugar, paras. 265–266, 274, 286–296, 314, 332, 335, 338. Micula, para. 677. Id., para. 872. Id., paras. 691–707.

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that Romania itself believed as much up to the point that the European Commission concluded otherwise.74 As compared with Electrabel, Micula, aes, and Eastern Sugar are more protective of legal certainty while giving due consideration to the exigencies of the transition to eu membership. Instead of a blanket rule holding that acts taken to comply with eu law cannot breach an investor’s legitimate expectations, the factual approach to legitimate expectations recognizes that an investor’s reasonable expectations about future regulation in an eu candidate country are based on more than the fact that a State has concluded a stability and association agreement with the eu and thus might at some future time become a Member State. v Conclusion The eu accession investment treaty decisions reveal one point of agreement and two important doctrinal splits. There is agreement on a presumption against regulatory stability in the inherently fluid environment of an eu candidate country. Electrabel splits with the other accession decisions and the larger body of case law by ignoring the time the investment was made as a factor relevant to the investor’s legitimate expectations and by declining to protect expectations arising from specific commitments of the host State. It may be tempting to label the two views in the doctrinal split in pro-investor versus pro-State terms. On that spectrum, one might call Electrabel pro-State (or pro-eu), because the tribunal gave greater deference to State conduct taken in pursuit of eu harmonization. Micula could be labeled pro-investor because it did the converse. But by looking only backwards, such a characterization misses much. The incentives created by Electrabel may also harm eu candidate countries by diminishing their ability to make credible promises in order to induce investment. Any commitment by the State that might later conflict with European regulation essentially loses a major avenue of enforcement, since under Electrabel a tribunal will not review the facts to determine whether the State created a legitimate expectation that the commitment would be maintained in spite of the eu harmonization process. The potential impact of such a rule is exacerbated by the inherent uncertainty in the accession environment and the presumption against general regulatory stability. The Electrabel approach might thus impede the ability of candidate countries both to negotiate medium- and long-term contracts (like those at issue in aes and Electrabel) and to induce investment through regional aid for disfavored regions (as in Micula). Given the uncertainty facing a prospective investor in a candidate country, especially early in the accession 74

Id., para. 691–707.

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­ rocess, such a rule jeopardizes even investments involving contracts or aid that p ultimately would be compatible with eu law. The European Commission’s resistance against the enforcement of investment treaty awards that it believes to be incompatible with eu State aid law threatens the same consequences.75 The intra-eu accession cases also have broader implications. First, while much of the argument advanced in these cases and much of the commentary on them has focused on their intra-eu nature, their reasoning and conclusions on legitimate expectations are not specific to intra-eu disputes. All investors will have access to the same information about a host State’s eu candidacy, so the legitimacy of an investor’s expectations in this context is unconnected with the investor’s nationality. Moreover, Electrabel’s holding rested on the host State’s transfer of competences to the eu, as acknowledged, according to the tribunal, in the ect.76 The tribunal reasoned that that acknowledgment precluded the investor from having a legitimate expectation of being protected from actions lawfully required of the host State by the European Commission. That putative acknowledgment in the treaty would have been equally apparent to all ect contracting States and is equally discoverable by any investor through due diligence. Electrabel’s reasoning on legitimate expectations could thus be held to apply in any ect claim against an eu Member State. Second, while Electrabel and Micula concerned withdrawals of State aid, the issue of whether investors’ expectations are protected against changes made to conform to eu law extends beyond the matter of State aid. The European Commission reportedly took steps to intervene in the first Vattenfall v. Germany arbitration in 2011.77 The case concerned not State aid but delays and restrictions imposed on a power plant project.78 While Germany never submitted briefing in the case because the parties reached a settlement, an official reportedly stated that the challenged actions were efforts to comply with the eu’s water framework directive.79 That statement and the Commission’s planned intervention indicates the potential invocation of eu law to defend member State actions in a variety of regulatory domains. Therefore, Electrabel’s and Micula’s divergent approaches to the relevance of eu law to investor expectations could have a much wider impact than first appears. 75 E.g., Amicus Curiae Brief, supra note 7; Invitation, supra note 6. 76 Electrabel, para. 4.142. 77 Peterson, supra note 7. 78 Vattenfall AB, Vattenfall Europe ag, Vattenfall Europe Generation ag v. Federal Republic of Germany, icsid Case No. ARB/09/6, Request for Arbitration, 30 Mar. 2009. 79 Damon Vis-Dunbar, Vattenfall Request for Arbitration Sheds New Light on Dispute with Germany,  11July2009,http://www.iisd.org/itn/2009/07/10/vattenfall-request-for-arbitrationsheds-new-light-on-dispute-with-germany/.

chapter 19

Dispute Resolution Mechanisms Concerning International Trade and Investment, in Particular within wto and icsid. A Dual Coverage in the Services Sector Carmen Saugar Koster [T]he dangers for international law, resulting from the increasing number of judicial institutions in the modern world, should be stressed […] it would be most regrettable if, on specific problems, different courts were to take divergent positions.1 i Introduction The proliferation of international dispute settlement mechanisms poses considerable challenges to the coherence of the international legal system. Jurisdictional overlaps in international investment and trade dispute resolution mechanisms paves the way for potentially parallel and successive disputes, in both disciplines of international economic law. The existing “spaghettibowl”2 has led to a complex system, which may create legal uncertainty and unpredictability by undermining the transparency of the legal regimes. However, the existing overlaps do not necessarily give rise to judicial competition, as the proceedings are largely complementary.3

1 Gilbert Guillaume: ‘The Future of International Judicial Institutions’ in International and Comparative Law Quarterly (1995, Vol. 44, Issue 4, cit. at p. 861). 2 unctad: Investment Provisions in Economic Integration Agreements (Geneva, 2006, cit. at p. 8). 3 Brooks E. Allen and Tommaso Soave: “Jurisdictional Overlap in wto Dispute Settlement and Investment Arbitration” in Arbitration International (Vol. 30, Issue 1, lcia, 2014, cit. at p. 1). The Softwood Lumber case between Canada and the United States can be cited as an example of the interplay between “competing” international mechanisms, in particular wto, nafta and lcia fora, for the settlement of a single dispute related to the import of lumber; See Leona Guglya: “The Interplay of International Dispute Settlement Mechanisms: The Softwood Lumber Controversy” in Journal of International Dispute Settlement (2011, Vol. 2, No. 1, at p. 175). For further information on this case, see Daowei Zhang: The Softwood Lumber

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_020

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This chapter seeks to address these problems. Section ii relates to legal issues rising out of the interplay between different international dispute settlement mechanisms related to trade and investment. Section iii considers international investment in the services sector as the main area of jurisdictional overlap between the legal regimes in order to finally conclude on the specific legal implications that the dual coverage has with respect to foreign investors. ii

Combining Dispute Settlement Mechanisms: Rising Issues of Jurisdiction and Admissibility

There exists an increasingly common practice of combining international trade and investment dispute settlement mechanisms in a single treaty, being the most frequent form of manifestation of this trend the investment chapters embedded in preferential trade agreements or ptas, as specific level of regional integration agreements. It has been noted that When intra-firm trade is at the higher ends of the value-added chain,4 i.e. trade related to vertically-integrated production methods requiring large capital investments, countries are more likely to sign deep ptas with investment chapters instead of shallow ptas.5 wto Members would sign these arrangements under three sets of rules: Paragraphs 4 to 10 of Article xxiv of the General Agreement on Tariffs and Trade or gatt; paragraph 2(c) or the enabling clause of the 1979 Decision on Differential and More Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries; or Article v of the General Agreement on Trade in Services or gats. These rules allow ptas, to be set up as a special exception under the World Trade Organization or wto law, with the a priori prohibition to exclude a mode of supply from the agreement.6 However, a loophole to consider

War: Politics, Economics and the Long us-Canadian Trade Dispute (rff Press, Washington, 2007). 4 Raymond Hicks and Kris Johnson: “When a bit Just Isn’t Enough: Why We See Investment Chapters in Preferential Trade Agreements” (Princeton University, 2012, presented at the 2011 Annual Meeting of the American Political Science Association, cit. at p. 27). 5 “Deep” ptas would include measures “that do not directly concern trade, such as those protecting investments and intellectual property rights and those opening government procurement to foreign bidders”. See Andreas Dür, Leonardo Baccini, Manfred Elsig and Karolina Milewicz: “The Design of International Trade Agreements: Introducing a New Database” in Social Science Research Network (2012, cit. at p. 30). 6 Sherry Stephenson: “gats and Regional Integration” in Pierre Sauvé and Robert M. Stern (eds.): gats 2000—New Directions in Services Trade (2000, cit. at p. 92).

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is whether the requirement to set up the company locally before selling to local consumers, as a restriction on investment, would correspond with an exclusion of cross-border supply and therefore be inconsistent with Article v of the gats. Most regional trade agreements, covering the so-called WTO-extra issues as competition and investment,7 establish procedures for resolving disputes among the signatories. However, there is a lack of uniformity in the design of these dispute settlement mechanisms, which has paved the way to large academic research on possible jurisdictional conflicts between regional agreements and the wto dispute settlement mechanism.8 There is no clear rule regarding the relationship between wto jurisdiction and other jurisdictions. Only Article 23 of the dsu seems to prevent other jurisdictions from adjudicating wto violations, but cannot prohibit other tribunals from exercising jurisdiction over claims arising out from their own treaty provisions, which may overlap with wto provisions.9 These issues of horizontal allocation may raise questions of jurisdiction and admissibility. In contrast to what happens in investment treaty arbitration, there is no express differentiation between jurisdiction and admissibility under the wto dispute settlement understanding. The investment tribunal, in order to proceed with the merits of a claim arising out of an investment, must have jurisdiction over the parties and the claims and the submitted claims must be admissible. Indeed, the decision concerning the admissibility of a claim made by the international treaty tribunal on the basis of its adjudicatory power would be insusceptible of review beyond which is available to decisions 7 Claude Chase, Alan Yanovich, Jo-Ann Crawford and Pamela Ugaz: Mapping of Dispute Settlement Mechanisms in Regional Trade Agreements—Innovative or Variations on a Theme? (wto Staff Working Paper ersd, 10 June 2013, cit. at p. 5). 8 See e.g. Jennifer Hillman: “Conflicts between Dispute Settlement Mechanisms in Regional Trade Agreements and the wto—What Should the wto do?” in Cornell International Law Journal (2009, Vol. 42, at pp. 193 et seq.); Lorand Bartels and Federico Ortino (eds.): Regional Trade Agreements and the wto Legal System (Oxford University Press, International Economic Law Series, 2006, at pp. 465 et seq.); Ernst-Ulrich Petersmann: “Proliferation and Fragmentation of Dispute Settlement in International Trade: wto Dispute Settlement Procedures and Alternative Dispute Resolution Mechanisms” in Julio Lacarte and Jaime Granados (eds.): Inter-Governmental Trade Dispute Settlement: Multilateral and Regional Approaches (London, Cameron May Limited, 2004, at pp. 417 et seq.); Caroline Henckels: “Overcoming Jurisdictional Isolationism at the wto-fta Nexus: A Potential Approach for the wto” in European Journal of International Law (2008, Vol. 19, No. 3, at p. 571); Victoria Donaldson and Simon Lester: “Dispute Settlement” in Simon Lester and Bryan Mercurio (eds.): Bilateral and Regional Trade Agreements, Commentary and Analysis (Cambridge University Press, 2009, at pp. 367 et seq.). 9 Kyung Kwak and Gabrielle Marceau: Overlaps and Conflicts of Jurisdiction between the wto and rtas (Conference on Regional Trade Agreements, wto, 26 April 2002, cit. at paras. 21 and 24).

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on the merits.10 Some arbitral jurisprudence takes into consideration issues of jurisdiction, admissibility and competence, on the basis of Article 41 of the International Centre for the Settlement of Investment Disputes (icsid) Arbitration Rules, even when no express reference to the term “admissibility” can be found in the Washington Convention nor in the Rules.11 Under the wto system, instead, it has been noted that the distinction can be found between the scope of decision of a panel and the existence of the conditions related to the exercise of an action or process.12 The Panel in Mexico-Soft Drinks considered that “discretion may be said to exist only if a legal body has the freedom to choose among several options, all of them equally permissible in law. […] Such freedom […] would exist within the framework of the dsu only if a complainant did not have a legal right to have a panel decide a case properly before it”.13 The Appellate Body14 has left open the door to the possible distinction between issues of jurisdiction and admissibility, to the extent that certain legal 10

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Zachary Douglas: The International Law of Investment Claims (Cambridge University Press, 2009, cit. at pp. 134 et seq.). See also Veijo Heiskanen: “Ménage à trios? Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration” in icsid Review (2014, Vol. 29, No. 1, at pp. 231 et seq.). See e.g., sgs Société Générale de Surveillance sa v. Republic of the Philippines, icsid Case No. ARB/02/06, Decision on Objections to Jurisdiction, 29 January 2004, cit. at para. 154. The tribunal considered the rule of exhaustion of local remedies a matter concerning admissibility rather than jurisdiction in the strict sense. See also Abaclat and others v. Argentine Republic, icsid Case No. ARB/07/5, Decision on Jurisdiction and Admissibility, 4 August 2011, at paras. 585 et seq.; Wintershall Aktiengesellschaft v. Argentine Republic, icsid Case No. ARB/04/14, Award of 8 December 2008, at paras. 160 et seq.; Occidental Petroleum Corporation and Occidental Exploration and Production Company v. Republic of Ecuador, icsid Case No. ARB/06/11, Decision on Jurisdiction, 9 September 2008, at paras. 90 et seq. Other tribunals do not enter into the distinction between these legal concepts, adopting a pragmatic approach, as e.g. Bayindir Insaat Turizm Ticaret Ve Sanayi as v. Islamic Republic of Pakistan, icsid Case No. ARB/03/29, Decision on Jurisdiction, 14 November 2005, at para. 87; Pan American Energy llc and bp Argentina Exploration Company v. Argentine Republic, icsid Case No. ARB/03/13, Decision on Preliminary Objections, 27 July 2006, at para. 54. See Veijo Heiskanen: “Jurisdiction, Admissibility and Competence in Investment Treaty Arbitration” in ICSID Review, vol. 29, No. 1 (2014), pp. 231 et seq. Joost Pauwelyn and Luis Eduardo Salles: “Forum Shopping Before International Tribunals: (Real) Concerns, (Im) Possible Solutions” in Cornell International Law Journal (2009, vol. 42, issue 77, cit. at p. 93). Report of the Panel Mexico-Tax Measures on Soft Drinks and Other Beverages, WT/DS308/ AB/R, cit. at para. 7.7. Report of the Appellate Body Mexico-Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, at paras. 53 et seq.

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impediments different from issues of jurisdiction may turn into a cause of inadmissibility of a claim as, for instance, a choice-of-forum provision in an external treaty. But there is little wto jurisprudence relevant to the question on the applicability of non-WTO choice-of-forum provisions before wto adjudication.15 Jurisdictional overlaps, in contrast, would rarely occur for the case of exclusive jurisdiction forum clauses included in customs unions and closely integrated regional trade agreements, precluding from initiating the wto dispute settlement mechanism.16 However, it remains a grey area whether a wto panel would be entitled to decline jurisdiction if both parties to the dispute have agreed on a clause giving exclusive jurisdiction to another dispute settlement mechanism. A conflict between the jurisdictional clause of a wto Panel and the jurisdictional clause of regional trade agreement’s tribunals may occur. In this line, Article 23 (1) gives a procedural right to Member States of the multilateral trading system to initiate a procedure within the wto intergovernmental dispute resolution mechanism, while referring to the exclusive jurisdiction of the wto panel over wto related claims. Regional trade agreement’s jurisdictional clauses providing for choice-of-forum, but requiring the chosen forum to be used to the exclusion of the other,17 jurisdictional clauses included in regional trade agreements providing for exclusive jurisdiction of these tribunals and specifically excluding the wto jurisdiction,18 in certain circumstances would exempt the complaining party from initiating the wto dispute settlement mechanism. These types of jurisdictional clauses would likely lead to a conflict with Article 23(1) of the dsu, because of prohibiting what this article explicitly permits.19 However, the jurisdictional clauses must be applicable in the wto dispute settlement system for a jurisdictional conflict to arise due to the overlap.20 15

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Gabrielle Marceau and Julian Wyatt: “Dispute Settlement Regimes Intermingled: Regional Trade Agreements and the wto” in Journal of International Dispute Settlement (2010, Vol. 1, No.1, cit. at p. 71). Songling Yang: “The Key Role of the wto in Settling its Jurisdictional Conflicts with rtas” in Chinese Journal of International Law (Oxford Journals, 2012, cit. at p. 2). See for instance, Article 2005(6) of nafta: “Once dispute settlement procedures have been initiated under Article 2007 or dispute settlement proceedings have been initiated under the gatt, the forum selected shall be used to the exclusion of the other, unless a Party makes a request pursuant to paragraph 3 or 4” (emphasis added). See for instance Art. 2005(1) of nafta in relation with Arts. 2005(3) and 2005(4). Panel Report EC-Bananas iii (us), cit. at paras. 7.159–7.160. A conflict between Multilateral Environmental Agreements and wto norms could never arise in the first place, if the meas are inapplicable in the wto dispute settlement mechan­ ism. See Joost Pauwelyn: Conflicts of Norms in Public International Law: How wto Law

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If the Claimant lacks the procedural right of initiating a proceeding under the wto dispute settlement mechanism because of a jurisdictional clause, the wto would still have jurisdiction but would have to find the case inadmissible.21 However, trying to find a wto legal basis to prevent double litigation remains difficult.22 In sum, the legal consequences of the potential jurisdictional overlaps between the operation of dispute settlement mechanisms established by external treaties to the multilateral trading system and the wto dispute resolution mechanism itself are far from being clear. This brings into question the coherence of the international legal system due to the resulting uncertainty as regards legal security and unpredictability. The field of international trade law is not alien to the proliferation phenomenon of dispute resolution mechan­ isms and overlap between different trade systems can therefore lead to several conflicts. This complex area raises many legal policy questions and calls for further reflection and analytical work. This contribution however, focuses on a related but different issue, which is the intermingle of two different disciplines of international economic law, i.e. trade and investment, due to the jurisdictional overlap in a specific area, resulting in the possible dual access to completely different fora or international dispute settlement mechanisms to which, under certain conditions, foreign investors in the services sector are entitled to. It is a jurisdictional overlap between international investment and trade law which rather than resulting in competing jurisdictions, they may become complementary from the perspective of the foreign investor’s interests, opening the door to what could be called “forum shopping”. Separate international investment agreements provisions related to investment in services may interact reinforcing their commitments under the General Agreement on Trade in Services, playing the most-favoured-nation (mfn) clause an important role in relation to commitments made with respect to covered investments. In the same way as gats treats non-discrimination obligations, ptas normally specify that the mfn content is not absolute, but rather subject to reservations and exclusions. NAFTAstyle ptas, for instance, in which all investment and trade are covered unless specifically excluded do not apply to non-conforming measures listed. Indeed,

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Relates to other Rules of International Law (Cambridge University Press, 2003, cit. at p. 472). Ibid supra, Joost Pauwelyn and Luis Eduardo Salles (2009), cit. at p. 94. Gabrielle Marceau and Julian Wyatt: ‘Dispute Settlement Regimes Intermingled: Regional Trade Agreements and the wto’ in Journal of International Dispute Settlement (2010, Vol.1, No.1, cit. at p. 72).

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many preferential trade agreements including investment chapters or provisions offer a dual coverage by specifically protecting financial services within the ­covered investment in the services sector, on a trade in services basis and including all modes of supply. A degree of complexity is added when the agreement covers financial services and related issues in a separate chapter, because of its non-equal application to the different supply modes of services.23 iii

Overlapping Jurisdictions in International Investment in the Services Sector

The main area of overlap between international investment and trade law is foreign direct investment in the services sector. The same factual scenario may give rise to both wto and icsid adjudication. However, the scope of the General Agreement on Trade in Services or gats is narrower and because of that only foreign investors holding the ownership or control over services companies may benefit from both dispute resolution mechanisms. This includes foreign investors that offer services without being it the core or main line of business.24 Foreign investors holding a minority equity share in the company are normally excluded from this dual coverage, because both disciplines would apply to the minimum common denominator, which is “measures by Members affecting trade in services” within the meaning of Article I(1) of the gats, an agreement subject to two exclusions concerning governmental services and air traffic rights and directly related services.25 The precise content of these carve-outs is unclear and depends on the economic structure and specific

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See Pierre Sauvé and Martín Molinuevo: “Architectural Approaches to the Treatment of Trade and Investment in Financial Services in Selected Preferential Trade Agreements” in Mona Haddad and Constantinos Stephanou (eds.): Financial Services and Preferential Trade Agreements: Lessons from Latin America (The World Bank, Washington d.c., 2010, cit. at p. 83). The concept of commercial presence is not limited to companies whose main line of business is the “services” sector, but also to companies whose business is focused on “goods” and provide services related to those products, or act as the wholesaler or retainer of the products. See Appellate Body Report Canada-Autos, WT/DS139-142/R, at para. 163. See also Martín Molinuevo: Protecting Investment in Services: Investor-State Arbitration Versus wto Dispute Settlement (Kluwer Law International, Global Trade Law Series, Vol. 38,2012, cit. at pp. 52 and 258). See Rudolf Adlung: “Services Negotiations in the Doha Round: Lost in Flexibility?” in Journal of International Economic Law (2006, Vol. 9, No. 4, at pp. 865 et seq.).

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commitments of the States.26 The language used in this provision “reflects the intent of the drafters to give a broad reach to the gats” to the extent that “no measures are excluded a priori” from its scope,27. The scope of the gats ratione materiae is derived from the essential attributes of a service transaction which is circumscribed by reference to the concept of “trade in services”, a definition which encompasses the movement of factors of production, including investment, labour, consumers, the operation of foreign suppliers and imports.28 It is broader than the commonly used concept of transactions between residents and non-residents of a country.29 Nonetheless, this broad definition is narrower than the scope of international investment agreements in general, which are understood to apply to all measures affecting covered investments, covering foreign minority participation as well and without normally including carve-outs on specific areas within the services sector nor applying exclusions for government procurement of services from the application of main provisions, as provided by Article XIII(1) in the gats, in relation to market access, national treatment and the most favored nation standard. In treaty-based investment arbitration, the jurisdiction ratione materiae is drafted following different formula in bilateral investment treaties and regional trade agreements including investment chapters, but always establishing a close connection between the subject matter of the dispute and the foreign investment and usually providing a broad asset-based30 or enterprise-based definition,31 excluding portfolio investment in the latter case on a general 26

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See E.H. Leroux: “What is a ‘Service Supplied in the Exercise of Governmental Authority’ under Article i:3(b) and (c) of the General Agreement on Trade in Services?” in Journal of World Trade (2006, vol. 40, Issue 3, cit. at pp. 345 et seq.). Appellate Body Report on EC-Bananas iii, cit. at para. 220, and Panel Report on EC-Bananas iii (Ecuador), cit. at para. 7.285. Friedl Weiss: “Trade and Investment” in Peter Muchlinski, Federico Ortino, Cristoph Schreuer (eds.): The Oxford Handbook of International Investment Law (Oxford University Press, 2008, cit. at p.192). See also Article XXVIII(c) of the GATS. See Friedl Weiss: “The General Agreement on Trade in Services” in Common Market Law Review (Kluwer Academic Publishers, 1995, Vol. 32, Issue 5, at p. 1177 et seq.). In other words, a broad definition including any generated economic value in the host country by the foreign investor’s business. See Lluís Paradell: “The bit Experience of the Fair and Equitable Treatment Standard” in Federico Ortino, Lahra Liberti, Audley Sheppard and Hugo Warner (eds.): Investment Treaty Law, Current Issues ii (British Institute of International and Comparative Law, 2007, cit. at p. 66); Ruben Eduardo Tempone: Protección de las Inversiones Extranjeras (Ciudad Argentina, 2003, at pp. 43 et seq.). See generally unctad: Scope and Definition (1999, at pp. 31–32).

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basis.32 In contrast, the Washington Convention, which sets out icsid’s jurisdiction in relation to any legal dispute arising directly out of an investment,33 does not provide a definition for what has to be considered as “investment”, being the consent given by the parties the main player for the establishment of icsid’s jurisdiction.34 Summarizing, the ratione materiae jurisdiction’s minimum common denominator of this dual coverage would be “investment” as “trade in services” as defined in the gats, which can take place through all means of services supply, including cross-border supply, consumption abroad, commercial presence and presence of natural persons.35 The Panel in China-Audiovisual Services noted that the gats defines “commercial presence” as “any type of business or professional establishment” through “the constitution, acquisition or maintenance of a juridical person, or the creation or maintenance of a branch or a representative office, within the territory of a Member for the purpose of supplying a service”.36 In other words, for a foreign legal entity to be covered within the meaning of “commercial presence”, it must provide “services” and be a juridical person of another Member State. This definitional clearness contrasts with the lack in the gats of a legal definition on what constitutes “services”, only mentioning governmental services as the 32

See generally unctad: Dispute Settlement: Investor-State (Geneva, 2003, at p. 48); M. Sornarajah: The International Law on Foreign Investment (Cambridge University Press, 2004, at pp. 220 et seq.); Noah Rubins: “The Notion of ‘Investment’ in International Investment Arbitration” in Norbert Horn (ed.): Arbitrating Foreign Investment Disputes. Procedural and Substantive Legal Aspects (Kluwer Law International, Studies in Transnational Economic Law, Vol. 19, 2004). 33 Article 25(1) of the Washington Convention of 1965 (icsid Convention on the Settlement of Investment Disputes Between States and Nationals of Other States). 34 Rudolf Dolzer and Christoph Schreuer: Principles of International Investment Law (Oxford University Press, 2008, cit. at p. 80). See also Jan Paulsson, Nigel Blackaby and Lucy Reed: Guide to icsid Arbitration (2010, at p. 13). For a detailed study on the definition of ‘investment’, see: Emmanuel Gaillard: ‘Identify or Define? Reflections on the Evolution of the Concept of Investment in icsid Practice’ in International Investment Law for the 21st Century. Essays in Honour of Christoph Schreuer (Oxford University Press, 2009, at pp. 403–416); Brigitte Stern: ‘Are there New Limits on Access to International Arbitration?’ in icsid Review, Foreign Investment Law Journal (2010, Vol. 25, Issue 1, at pp. 1–11); Phoenix Action, Ltd. v. the Czech Republic, icsid Case no. ARB/06/05, Award, 15 April 2009. 35 Article I(2) of the gats. See generally Diana Zacharias: “Article i gats: Scope and Definition” in Rüdiger Wolfrum, Peter Tobias Stoll and Clemens Feinäugle (eds.): Max Planck Commentaries on World Trade Law: wto—Trade in Services (Martinus Nijhoff Publishers, 2008, vol. 6, at pp. 48 et seq.). 36 Panel Report China-Audiovisual Services, WT/DS363/R, cit. at para. 7.974.

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general carve-out. As the terms of the sectors covered are broad,37 the agreement would apply to all business activities related to the supply of services, insofar they are not supplied in the exercise of governmental authority.38 On the basis of Article XXVIII(c) of the gats and in relation with the measures affecting trade and investment in services, the scope is not limited to measures taken “in respect to” services, but also with regard to any measure that may have an effect on them.39 Bearing in mind the concept of “measures” provided by Articles I(3) and XXVIII(a) of the same legal text, it has been noted that private trade-restrictive conduct supported or even encouraged by a government would likely fall within the definition provided by wto law while, on the contrary, actions initiated by private parties which are considered lawful would exceed the wto’s competence.40 Having considered the ratione materiae jurisdictional overlap between the disciplines of international investment and trade, in relation to foreign investment in the services sector, rules on locus standi in international investor-State arbitration and in the world trade organization dispute settlement mechanism are hardly comparable. The Dispute Settlement Understanding (dsu) of the wto does not expressly refer to jurisdiction ratione personae. However, on the basis of Articles 23(1) and 3(7) of the dsu, the wto jurisdiction is compulsory and exclusive for wto Members. Member States are granted standing in wto disputes by their mere status of members, resulting the wto in a “club” reserved to the prime actors of public international law and some customs unions, such as the European Union or China’s Special Administrative Regions, on the basis of Article XII(1) of the WTO Agreement. In contrast, international investment agreements grant foreign investors a direct action against measures adopted by the host State. In investment treaty arbitration, the jurisdiction ratione personae would extend to a contracting State and to a natural or juridical person holding the nationality of another contracting State, taking into consideration the relevant provisions in the investment treaty and in the domestic law of the State and, when applicable, Article 25 of the icsid Convention.41 This explains why, for instance, multinational corporations will pursue claims before an international arbitration 37 38 39 40 41

See the non-mandatory Services Sector Classification List of the wto Secretariat. See Article I(3)(b)and (c) of the gats. Panel Report us-Gambling, WT/DS285/R, cit. at para. 5.22. Werner Zdouc: Legal Problems Arising under the General Agreement on Trade in Services: Comparative Analysis of gats and gatt (Universität St. Gallen, 2002, cit. at p. 114). See Zachary Douglas: The International Law of Investment Claims (Cambridge University Press, 2009, at pp. 284–325).

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forum, while sovereign States consider pursuing a parallel wto claim in the national interest. From a foreign investor’s perspective, as claimant, the fact of having direct access to investment arbitration without the need of going through the filter of their own government makes arbitration the natural forum for international investment related disputes. The effort for a foreign investor in services in order to settle its dispute through the wto inter-governmental dispute resolution mechanism would be greater, as the investor would need to work jointly and subordinated to the governments. Leaving aside the procedural issues, from a substantive point of view, the applicable provisions in the different sets of rules are hardly comparable,42 as we are talking about two different legal disciplines of international economic law. However, the jurisdictional interplay with respect to the dually covered sector means that the same facts may trigger claims of both nature, as for instance the imposition of performance requirements might give rise, on the one hand, to a claim based on the gats43 or on the Agreement on TradeRelated Investment Measures (trims),44 and on the other hand to a claim based on an international investment agreement.45 Protection against preferential treatment would be based on the mfn provisions in the gats46 and international investment agreements;47 or an import ban on services could give rise to a claim based on a market access violation under the gats48 or a claim on indirect expropriation under an international investment agreement,49 due to limitations on the number of suppliers.50

42

For a detailed study on the substantial rights granted to foreign investors in services in a comparative study, see Martín Molinuevo, Ibid supra (2012, at pp. 75 et seq.). 43 Articles i and xvii of the GATS. 44 Article ii of the trims. 45 See e.g., nafta, Article 1106; India-Kuwait bit, 2001, Article 4(4). 46 Article ii of the gats. 47 See e.g., nafta, Article 1103. 48 Article xvi of the gats. 49 See e.g., nafta, Article 1110; Burkina Faso-Chad bit, 2001, Article 5(1); SwitzerlandMozambique bit, 2002, Article 6; Norway-Indonesia bit, 1991, Article 6(1). Spain-Russian Federation BIT, 1991, Article 6. Ibid. supra cit. Martín Molinuevo (2012). 50 However, domestic regulation should be distinguished from market access in gats, to the extent that the effect of banning certain imports could not be regarded as a market access restriction. See Joost Pauwelyn: “Rien ne va plus? Distinguishing domestic regulation from market access in gatt and gats” in World Trade Review (2005, 4(2), at pp. 131–170).

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Concluding Remarks

The main area of overlap within international trade and investment disciplines arises with respect to foreign investment in the services sector, giving rise to potential parallel and successive disputes with different legal solutions, on the basis of a same factual scenario. It should be stressed that clear conflict norms would lay in the core for avoiding any judicial competition, contributing to the coherence of the international legal order by encouraging a de facto “complementarity”. The intermingle between both legal regimes leaves the door open to, for instance, use trade remedies to enforce arbitration awards51 or to potentially enforce investment commitments in trade agreements through umbrella clauses in bilateral investment treaties.52 Including an investment chapter or investment related provisions in preferential trade agreements, specifically protecting financial services within the covered investment in the services sector, establishes an extra fan of protection to foreign investors. Investors appear to be better protected under these dual coverage agreements. However, the degree of legal complexity is greater when they cover financial services in a separate chapter because of its nonequal application to the different modes of services supply,53 and the need for clear rules should be highlighted in order to avoid potential overlaps between the disciplines on investment and trade in services. Special attention should be given to this specific financial services sector, which is still considered sensitive by a number of countries, which may tend to restrict, because of this reason, the access to investor-state arbitration. The special position hold by foreign investors in the services sector, due to the existing dual coverage within the international economic legal order, allows them to choose between the available fora for the resolution of their disputes. The same factual scenario may give rise to both wto and international investment arbitration adjudication. However, the scopes of the sets of rules differ and both wto and icsid dispute settlement mechanisms provide different remedies. While wto dispute resolution mechanism seeks to bring its member States in conformity with their assumed trade obligations,54 investor-State arbitration seeks an economic compensation for the violated rights 51 52 53 54

In other words, when a developed State threatens to remove preferential trade benefits to a developing State in case it does not honor its international arbitration commitments. See Roger P. Alford: “The Convergence of International Trade and Investment Arbitration” in Notre Dame Law School Scholarly Works (2013), cit. at p. 55. See Ibid. supra Pierre Sauvé and Martín Molinuevo (2010), at pp. 79-99. See Articles 19 and 22 of the wto dsu.

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regarding the covered investment and/or, when possible, the restitution of the property. The effort for the foreign investor in order to protect its right would be greater under wto litigation, being investment arbitration the natural forum for the settlement of disputes related to investment in the services sector. In any case, the assessment on the access to the dispute settlement fora should be done on a case-by-case basis, depending on the interests of the foreign investor.

chapter 20

The wto Dispute Settlement System and Renewable Energy Subsidies: The Case of Feed-in Tariffs* Paolo Davide Farah** and Elena Cima*** 1 Introduction Historically, government subsidization began to be frequently and systematically adopted during the mercantilist period from the xvi and the xvii century, although in some countries it goes back even longer.1 This period was * The introduction of this chapter is original and written by Paolo Davide Farah. The rest of the article was previously published as Paolo Davide Farah and Elena Cima, 27 THE GEORGETOWN INTERNATIONAL ENVIRONMENTAL LAW REVIEW 4, December 2015, pp. 515 - 537. This scientific result is part of the West Virginia University Energy Institute and Multi-Disciplinary Center for Shale Gas Utilization (WV, USA). The research leading to these results has received funding from the People Programme (Marie Curie Actions) of the European Union’s Seventh Framework Programme (FP7/2007-2013) under REA grant agreement n°269327 Acronym of the Project: EPSEI (2011-2015) entitled “Evaluating Policies for Sustainable Energy Investments: Towards an Integrated Approach on National and International Stage” and gLAWcal - Global Law Initiatives for Sustainable Development. Corresponding Author e-mail address, Professor Paolo Davide Farah: [email protected]. ** A special acknowledgment should be addressed to the East Asian Legal Studies at Harvard Law School who has hosted me as Visiting Scholar and provided excellent academic and research environment. Earlier drafts of this article were presented at the “Fifth Annual Colloquium on Environmental Scholarship,” Vermont Law School, October 4, 2014 and at the “Law, Technology and Development: Opportunities and Challenges in EU-China Relations” conference organized by University of Strathclyde Law School & Faculty of Law and by Fudan University, Shanghai, held at University of Strathclyde Law School, November 11, 2014. A special thanks to the conference participants and David M. Driesen (Syracuse University College of Law), Tracy Bach (Vermont Law School), Francesco Sindico (University of Strathclyde, Law School), Stephanie Switzer (University of Strathclyde, Law School), Chen Li (Fudan University Law School), Zhongfa Ma (Fudan University School of Law) and Shigang Li (Fudan University School of Law). *** Substantial parts of this chapter were written when I was EU Commission Marie Curie Fellow at Tsinghua University School of Law, THCEREL – Center for Environmental, Natural Resources & Energy Law in Beijing (China) and Research Fellow at Università del Piemonte Orientale ‘Amedeo Avogadro’, DiSEI Dipartimento di Studi per l’Impresa e il Territorio (Italy). 1 For a more detailed historical analysis and background on subsidies, see John H. Jackson, World Trade and the Law of gatt (Bobbs-Merrill Co., 1969); Ennio Triggiani, Gli Aiuti Statali © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_021

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characterized by the introduction of new production and commercialization methods. The merchant class was vested with great power, and often used such power to provide political institutions with suggestions and requests. Indeed, political support was a fundamental element of companies’ survival and growth because states had the power to affect the market and promote the competitiveness of national companies. A broad array of strategies and measures could lead to this result—including the adoption of discriminatory tax regulations and quotas against foreign products and companies in favor of domestic industries. In Europe, mercantilism developed at a time when the economy was in transition, after centralized nation-states successfully replaced the previous feudal system. Moreover, technological innovation in the transportation sector—and in particular in shipping—together with increasing urbanization, led to a rapid and exponential growth in international trade. The function of mercantilism was twofold: on the one hand, it focused on how international trade could bend to serve the interests of nation-states, while on the other it explored ways for national governments to contribute to domestic companies’ trade and business development. Those were the years that saw the adoption of modern accounting. The latter allowed precise and constant monitoring of trade inflows and outflows, creating the necessity of maintaining a positive trade balance, which could be achieved by ensuring that exports were higher than imports. This was possible thanks to the introduction of new domestic products that could effectively replace traditionally imported ones. During the liberalist period—characterized by a laissez-faire economic policy—public subsidies were set aside, while they revived at the end of the xix century when protectionism enjoyed a new vogue. Since then, subsidies have been used by governments both to promote national economic, social, and political policy as well as to correct market distortions. It is generally recognized that subsidies often produce harmful effects on free trade and production rather than equitable results, and international trade law has taken into account all these concerns in drafting specific rules on subsidies. In this contribution, we are going to draw the attention on the effects of subsidies, distinguishing subsidies which are necessary for desirable and acceptable purposes from those that are nothing but disguised protectionist measures and that might trigger international trade remedies. In particular, this evaluation will be applied to renewable energy subsidies. Governmental Alle Imprese Nel Diritto Internazionale e Comunitario 1–41 (Cacucci Editori, 1993); Paolo Picone & Aldo Ligustro, Diritto dell’Organizzazione Mondiale del Commercio 229 (Cedam, 2002).

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support to alternative and renewable energy industry represents a fairly common choice for governments in need to comply with the commitments that bind them within the international framework for climate change.2 Besides being a common choice, renewable energy subsidies represent an effective one: according to the Intergovernmental Panel on Climate Change (ipcc), “one of the most effective incentives for fostering greenhouse gas (ghg) reductions are the price supports associated with the production of renewable energy, which tend to be set at attractive levels. These price supports have resulted in the significant expansion of the renewable energy sector in countries belonging to the Organization of Economic Cooperation and Development (oecd) due to the requirement that electric power producers purchase such electricity at favorable prices.”3 2 The international commitments on climate change and global warming are enshrined in the text of the Kyoto Protocol, which was adopted in 1997. The Protocol sets explicit emission targets for certain signatory countries: each of these countries was to reduce its ghg emissions so that its total emissions, when converted to a carbon-equivalent basis, did not exceed a specified percentage of its base period emissions. On the other hand, developing and least developed countries were not addressed with any specific commitment, but could benefit from certain flexible mechanisms provided for in the Protocol and thus contribute to the global emission reduction. The three flexibility mechanisms—Emission Trading (et), Joint Implementation (ji) and Clean Development Mechanism (cdm)— have been conceived with the aim of providing countries with a flexible means by which they can meet their emission targets. After the end of the first commitment period (2008–2012), the emission targets were reaffirmed for a second commitment period (2013–2020). See in general World Climate Change: The Role of International Law and Institutions (Ved P. Nanda ed., Westvlew Press, 1983); International Law and Global Climate Change (Robin Churchill and David Freestone eds., Graham & Trotman, 1991); Verheyen Roda, Climate Change Damage and International Law: Prevention Duties and State Responsibilities (M. Nijhoff Publishers, 2005); Friedrich Soltau, Fairness in International Climate Change Law (Cambridge University Press, 2009). 3 ipcc Fourth Assessment Report: Climate Change 2007 (Working Group iii: Mitigation of Climate Change) § 13.2.1.5. The ipcc (Intergovernmental Panel on Climate Change) was established in 1988 by the combined effort of the World Meteorological Organization (wmo) and the United Nations Environment Programme (unep). The main task of this scientific body is to provide the leading powers with a clear scientific view on the current state of climate change and its potential environmental and socioeconomic consequences. It is open to all member countries of the United Nations (un) and the wmo, and counts the participation of 195 countries so far. The ipcc released five Assessment Reports since 1990—the first in 1990, and then in 1995, 2001, 2007, and 2014. The fifth assessment report consists of three Working Group (wg) reports and a Synthesis Report (syr). All ipcc documents are available on the website of the ipcc, http://www.ipcc.ch/ (last accessed Jan. 16, 2015). S. Gupta, D.A. Tirpak, N. Burger, J. Gupta, N. Höhne, A.I. Boncheva, & A. Sari, Policies, instruments and co-operative

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This chapter is divided into four sections. The first one (section 2), offers a brief description of the evolution of the World Trade Organization (wto) regulation of subsidies, while in the second one (section  3) we analyze the approach of the wto towards renewable energy subsidies, focusing on specific issues, such as the case of feed-in tariffs and local content requirement. Section  4 provides an overview of wto disputes involving subsidies in the renewable energy sector, and Section 5 focuses on the recent decisions in the Canada—Renewable Energy and Canada—Feed-in Tariff Program disputes. Finally, we draw some conclusions. 2

Evolution of wto Subsidies Regulation

Subsidies4 were first regulated internationally under the framework of the General Agreement on Tariffs and Trade (gatt)5 and the wto.6 The gatt/wto arrangements, in Options for liberalising trade in environmental goods in the Doha Round (R. Howse & P. van Bork eds., International Centre for Trade and Sustainable Development, 2007). 4 Peter Van Den Bossche. The Law and Policy of the World Trade Organization. Text, Cases and Materials 551–593 (Cambridge University Press, 2005); Andreas F. Lowenfeld, International Economic Law 199–241 (Oxford University Press, 2002); Petros C. Mavroidis, The General Agreement on Tariffs and Trade. A Commentary 178–180 (Oxford University Press, 2005); David Luff, Le droit de l’Organisation Mondiale du Commerce. Analyse Critique 375–512 (Bruylant, 2004); Marc Benitah, The Law of Subsidies under the GATT/wto System 1–353 (Kluwer Law International, 2001); Edwin Vermulst & Folkert Graafsma, wto Disputes. Anti-dumping, Subsidies and Safeguards 281–459 (Cameron May, 2002); Terence P. Stewart & Amy S. Dwyer, wto Antidumping and Subsidy Agreements. A Practitioner’s Guide to “Sunset” Reviews in Australia, Canada, the European Union, and the United States 1–68 (Kluwer Law International, 1998); Pierre Didier. Les Principaux Accords de l’OMC et leur Transposition dans la Communauté Européenne 165–244 (Bruylant, 1997); Thomas Weishing Huang, Trade Remedies. Laws of Dumping, Subsidies and Safeguards in China 1–260 (Kluwer Law International, 2003); Picone & Ligustro, supra note 1, at 229–267; Mattia Melloni, The Principle of National Treatment in the GATT: A Survey of the Jurisprudence, Practice and Policy (Bruylant Editions, 2005). 5 General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter gatt]. 6 The wto came into being on 1 January 1995 and it is the successor to the General Agreement on Tariffs and Trade (gatt). After the World War ii, the Bretton Woods Conference took place in 1944 with the objective of creating relevant forums for the Nations for maintaining stability and encouraging open markets. The economic nationalism has been indicated as the major factor which brought to World War ii and the Bretton Woods Conference wanted to pose the proper international conditions for the economic recovering. The Conference set up the International Bank for Reconstruction and Development (ibrd), the International

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subsidies regulation is characterized by an interesting evolution.7 Before the conclusion of the Uruguay Round negotiations leading to the establishment of the wto and the adoption of an Agreement which addressed specifically the subject of subsidies—the Agreement on Subsidies and Countervailing Measures8 or ascm—Article xvi of the gatt represented the only source of discipline for subsidies. This provisions initially contained only one paragraph (corresponding to Section A—Subsidies in General of the current text of the gatt 1994), which allows Member States to grant or maintain any subsidy as long as they notify the other contracting parties. The only limit occurs if and when the subsidy causes or threatens to cause serious prejudice to the interests of any other contracting party. In this event, “the contracting party granting the subsidy shall, upon request, discuss with the other contracting party or parties concerned, or with the Contracting Parties, the possibility of limiting the subsidization.”9 The provision appears to be quite limited in both its scope and Monetary Fund (imf) and the General Agreement on Tariffs and Trade (gatt) as principal multilateral institutions providing stability to the international monetary, financial, and commercial systems. They are indeed considered the pillars of contemporary international political economy. In particular, the gatt was signed after the failure of negotiating governments to create the International Trade Organization (ito). During the discussions regarding the ito, 15 States began parallel negotiations for the gatt as a way to attain basic and immediate tariff reductions, even before the adoption of the ito. Once the ito failed in 1950, only the gatt survived. The gatt, initially thought as a provisional agreement, had been ruling the international trade for nearly 50 years. 7 For a thorough analysis of the historical evolution of gatt and wto negotiations on subsidies, see Marc Bénitah, The Law of Subsidies under the gatt/wto System (Kluwer Law International, 2001); Gary N. Horlick & Peggy A. Clarke,The 1994 wto Subsidies Agreement, 17(4) World Competition 41–54 (1993); Andrew L. Stoler, The Evolution of Subsidies Disciplines in gatt and the wto, 44(4) J. World Trade 797–808 (2010); Gary N. Horlick, A Personal History of the wto Subsidies Agreement, 47(2) J. World Trade 447–452 (2012); Patrick J. McDonough, Subsidies and Countervailing Measures, in GATT Uruguay Round: A Negotiating History (1986–1992) (Terence P. Stewart ed., 1993) at 803–1008; Alan O. Sykes, The Economics of the wto Rules on Subsidies and Countervailing Measures, in The World Trade Organization: Legal, Economic and Political Analysis, Volume I, (in Patrick F.J. Macrory, Arthur E. Appleton, Michael G. Plummer eds., Springer, 2005); Gilbert R. Winham, International Trade and the Tokyo Round Negotiations (Princeton University Press, 1986); Terry Collins-Williams & Gary Salembier, International Disciplines on Subsidies: the gatt, the wto and Future Agenda, 30 J. World Trade 5–17 (1996). For a focus on the current Doha negotiations, see Debra P. Steger, The Subsidies and Countervailing Measures Agreement: Ahead of its Time or Time for Reform?, 44(4) J. World Trade (2010). 8 Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 14 [hereinafter ascm]. 9 gatt Article xvi.

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effects.10 The Kyoto Round led to the adoption, in 1979, of the Subsidies Code, which redefined extensively the general framework of the existing regulation,11 drastically limited the restrictions on export subsidies, developed injury assessment criteria, and established a Subsidies Code Committee to resolve disputes.12 However, not differently from the gatt, the Code failed to provide a clear definition of “subsidy.” It is necessary to wait for the 1986 Punta del Este Ministerial Declaration, which initiated the Uruguay Round, to finally have a definition of “subsidies” and an articulate regulation thereof, although risks of misinterpretation still remain. In the particular sector of subsidies regulation, the Uruguay Round led to multiple results. First of all, four new paragraphs were added to gatt Article xvi, focusing on export subsidies.13 The second result consisted in the adoption of a dual-track approach,14 splitting subsidies disciplines into two different agreements: the ascm and the Agreement on Agriculture (AoA ).15 The two agreements contain provisions and standards that differ consistently in terms of both their scopes and effects. Such difference affects several economic sectors, including the energy and renewable energy sector, as paragraph 3.3 will show.

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In its original wording, gatt Article xvi only applied to primary products, it did not distinguish between agricultural and industrial products, and, despite the whole discipline rested upon the determination of the serious prejudice caused by the subsidy, no definition of serious prejudice was provided. See Andrew L. Stoler, The Evolution of Subsidies Disciplines in gatt and the wto, supra note 6. The 1979 gatt Subsidies Code was one of the major results of the Tokyo Round, recognizing that subsidies are “important instruments for the promotion of social and economic policy objectives.” This Code is the Agreement on Interpretation and Application of Articles vi, xvi and xxiii of the gatt. In particular, in contrast with the previous set of rules, which allowed countervailing duties to be used only on contracting parties, when the subsidies actually cause injury to domestic industry, the new Subsidy Code made a clear distinction between responses to contracting parties of the gatt and responses to other countries when subsidies were activated. See Triggiani, supra note 1, at 334–353. William K. Wilcox, gatt-Based Protectionism and the Definition of a Subsidy, 16 Boston U. Int’l L.J. 150 (1998). See Andrew L. Stoler, The Evolution of Subsidies Disciplines in gatt and the wto, supra note 6, at 798–801. This choice is often motivated by the need to bring on separate discussions when an issue is related to two different agreements. Moreover, keeping the discussion about subsidies in one single forum would have made the task of finding a suitable solution to this complex problem even harder. Agreement on Agriculture, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1867 u.n.t.s. 410 [hereinafter AoA].

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The wto subsidies disciplines contained in the ascm do not deal with all forms of subsidization but rather focus on those forms of support that create distortions to international trade. As a matter of fact, it is possible to identify several different types of subsidies, which operate at different stages and have different targets.16 This means that they produce different effects and, therefore, are not granted the same treatment under wto law. Moreover, even among trade-distorting subsidies, a few lines need to be drawn: some of them— such as subsidies supporting research and development (R&D)—are treated more favorably, while others—such as export subsidies and subsidies dependent on local content requirement—are highly opposed. Under the ascm, subsidies were initially divided into three categories: prohibited, actionable, and non-actionable.17 While prohibited subsidies18 (described in Article iii and including both export subsidies and local content requirement subsidies) are trade distorting per se and therefore totally unacceptable,19 actionable subsidies20 are only potentially trade distorting, which means that the complaining country has to show that the subsidy has an adverse effect on its interests. This category reflects what has been defined as effects-based 16 17

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Gustavo E. Luengo Hernandez de Madrid, Regulation of Subsidies and State Aids in WTO and EC Law (Kluwer Law International, 2007). For a general overview of the regulation of subsidies provided in the wto, see Patrick F.J. Macrory, Arthur E. Appleton & Michael G. Plummer, The World Trade Organization: Legal, Economic and Political Analysis (Springer, 2005) 687–734; Jeffrey Waincymer, WTO Litigation: Procedural Aspects of Formal Dispute Settlement (Cameron May, 2002) 765– 769; R.K. Gupta, Anti-Dumping and Countervailing Measures: The Complete Reference (Sage, 1996); M. J. Trebilcock & Robert Howse, The Regulation of International Trade 268–273 (Routledge, 2005); Andreas Loweldeld, International Economic Law (Oxford University Press, 2003) 234–241; Alan O. Sykes, The Economics of wto Rules on Subsidies and Countervailing Measures, in The World Trade Organization: Legal, Economic and Political Analysis (A. Appleton, P Macrory, and M. Plummer eds., 2005); Gary N. Horlick & Peggy A. Clarke, wto Subsidies Discipline During and After the Crisis, 13(3) J. Int’l Econ. L. 859–874 (2010); Debra P. Steger, The Subsidies and Countervailing Measures Agreement: Ahead of its Time or Time for Reform?, supra note 6, at 779–796. wto Agreement on Subsidies and Countervailing Measures (ascm), Part ii (Prohibited Subsidies), Article 3 (Prohibition) and Article 4 (Remedies). Most developing and least developed countries see both export and local content subsidies as crucial to their industrialization and development, while industrialized nations have always considered this particular category of governmental support as severely and inherently trade distorting. See Debra P. Steger, supra note 6, at 787. wto Agreement on Subsidies and Countervailing Measures (ascm), Part iii (Actionable Subsidies), Article 5 (Adverse Effects), Article 6 (Serious Prejudice) and Article 7 (Remedies).

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approach, where the adverse effect of the government intervention needs to be demonstrated for the subsidy to be addressed by the Organization.21 If not prohibited or actionable, the subsidy is permitted. Initially, a third category of subsidies existed under the ascm—the so-called non-actionable subsidies.22 This category, which included subsidies that did not create any trade-distorting effects, was introduced on an experimental basis for a five-year period, which expired in 2000 without being renewed.23 3

The Approach of the wto towards Renewable Energy Subsidies

Investment in renewable energy is one of the core strategies to address the adverse effects of climate change. The support that governments give to the renewable energy sector covers a wide variety of measures24 that range from 21

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The effects-based approach was first adopted in the Tokyo Round Subsidies Code, where the adverse effects that needed to be demonstrated included: a) injury to the domestic industry of another signatory; b) nullification or impairment of benefits; and c) serious prejudice. Part ii of the ascm deals with actionable subsidies and foresees the same three types of adverse effects as in the Subsidies Code. According to former ascm Article 8, the following subsidies, provided that several explicitly listed conditions are granted, shall be non-actionable: “a) assistance for research activities conducted by firms or by higher education or research establishments on a contract basis with firms […]; b) assistance to disadvantaged regions within the territory of a Member given pursuant to a general framework of regional development31 and non-specific (within the meaning of Article 2) within eligible regions […]; and c) assistance to promote adaptation of existing facilities to new environmental requirements imposed by law and/or regulations which result in greater constraints and financial burden on firms […].” Robert Howse, Do the World Trade Organization Disciplines on Domestic Subsidies Make Sense? The Case for Legalizing Some Subsidies, in Law and Economics of Contingent Protection in International Trade (Kyle W. Bagwell, George A. Bermann, and Petros Mavroidis eds, Cambridge University Press, 2010) at 85–102; Hyung-Jin Kim, Reflections on the Green Light Subsidy for Environmental Purposes, 33(3) J. World Trade 167–175 (1993); Sadeq Z. Bigdeli, Resurrecting the Dead? The Expired Non-Actionable Subsidies and the Lingering Question of “Green Space” (2012) 8 Manchester J. Int’l Econ. L. (2012). Alan O. Sykes, The Economics of wto Rules on Subsidies and Countervailing Measures, supra note 15. See Miguel Mendonca, David Jacobs & Benjamin Sovacool, Powering the Green Economy—the Feed-in Tariff Handbook (Earthscan, 2010); Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, Working Paper No. 2011/321 (June 2011); Simonetta Zarrilli, Domestic Taxation of Energy Products and Multilateral Trade Rules: Is This a Case of Unlawful Discrimination?, 37(2) J. World Trade 359–394 (2003); Philippe Menanteau, Dominique Finon & Marie-Laure Lamy, Prices Versus Quantities:

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taxes on carbon emissions to measures aimed at transferring an economic advantage to firms and companies investing in renewables or to consumers that buy them, such as grants, loans, tax incentives, or pricing support (like feed-in tariffs).25 One might even say that public support is not just preferable but rather necessary in the specific case of measures intended to fight climate change: according to economic analysis, public support is needed whenever the market fails to tackle specific externalities or to provide consumers with the goods and services they ask for.26 This seems to be the case when it comes to global warming, if we believe that climate change may be the “greatest and widest-ranging market failure ever seen,” as stated in the Stern Report.27 The real problem, when it comes to promoting the use and diffusion of renewable energy, lies in the fact that neither the benefits of the deployment of such energy nor the true costs of fossil fuels are included in their prices. This makes fossil fuels relatively cheap and renewable goods and services relatively expensive. The standard economic reaction to this situation is the introduction of governmental provisions as well as pigovian taxes28 or subsidies intended to redress economic injustices or imbalances. We already mentioned the former existence—within the framework created by the ascm—of a category of non-actionable subsidies,29 which represented a narrowly tailored exception to the ascm discipline and covered certain assistance to research activities, to disadvantaged regions, and to promote the adaptation of existing facilities to new environmental requirements.30 Unlike other Agreements, such as the gatt or the General Agreement

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Choosing Policies for Promoting the Development of Renewable Energy, 31(8) Energy Pol’y 299–812 (2003); Anthony D. Owen, Renewable Energy: Externality Costs as Market Barriers, 34(5) Energy Pol’y 632–642 (2006). On feed-in tariffs see generally See Miguel Mendonca, David Jacobs & Benjamin Sovacool, supra note 24; Miguel Mendonca, Feed-In Tariffs: Accelerating the Deployment of Renewable Energy (Earthscan, 2012); Mario Ragwitz, Claus Huber & Gustav Resch, Promotion of Renewable Energy Sources: Effects on Innovation, 2 Int’l J. Public Pol’y 35, 56 (2007). See Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 5. Nicholas Stern, The Economics of Climate Change: Stern Review (Cambridge University Press, 2007). A pigovian tax is a tax applied to an economic activity that generates negative externalities. wto Agreement on Subsidies and Countervailing Measures (ascm), Part iv (NonActionable Subsidies), Article 8 (Identification of Non-Actionable Subsidies) and Article 9 (Consultations and Authorized Remedies), supra note 22. Article 8.2 of the ascm, supra note 22.

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on Trade in Services (gats), the ascm imposes a very strict discipline and contains no general exception clause. One reason for it lies in the fact that the Agreement was negotiated in the late 80”s and early 90”s when the world was moving towards embracing free market and privatization. This provision could have been used to allow renewable energy subsidies but, as already mentioned, it is no longer in place and therefore other wto rules need to be examined that might achieve the same result. Subsidization of the renewable energy industry raises a number of issues. In the next few paragraphs, we will give an overview of three issues that we consider especially relevant and which are central in the case law analyzed in the second part of this contribution: (a) feed-in tariffs; (b) local content subsidies; and (c) the relationship between the rules on subsidies provided for in the ascm and those set out in the wto Agreement on Agriculture. 3.1 Feed-in Tariffs and the Definition of ‘Subsidies’ Feed-in tariffs (fits) refer to a regulated minimum guaranteed price per kilowatt-hour that an electricity company must pay for renewable energy fed into the national electricity grid by a private independent producer. Feed-in tariffs, like all the other programs based on financial incentives, usually occur at the national level. The literature on this subject shows that they been especially successful when part of a broad package of support measures (tax deductions, “soft” loans, and investment incentives) for selected technologies.31 The role played by fit programs in the wto arena has been the subject of a long debate. The debate actually is way broader and relates to all types of regulatory measures. As a matter of fact, regulation is linked to the specific priorities of each country and that is why trade laws are usually softer on them.32 Some authors argue that such tariffs do not fall within the scope of the ascm for several reasons. For example, according to Howse (2005), such tariffs “represent a 31 Lucy Butler & Karsten Neuhoff, Comparison of Feed-In Tariff, Quota and Auction Mechanisms to Support Wind Power Development, 33 Renewable Energy 1854–1867 (2008). 32 Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 20. Luca Rubini frames the issue clearly and precisely, stressing that “the elusive and broad category of regulatory measures is generally considered to be beyond the reach of subsidy laws and is subject only to other provisions. […] Regulatory measures remain the true, and unclear, frontier of subsidy laws” and “as a consequence, regulatory intervention has been the traditional object of other provisions. The breadth of the concept of regulation entails that its legal treatment is particularly complex […] and often involves difficult distinctions between measure and measure.” Luca Rubini, The Definition of Subsidy and State Aid—WTO and EC Law in Comparative Perspective 191 (Oxford University Press, 2009).

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regulation of the electricity market, and their directive character goes to regulating market behavior and transactions, not imposing a governmental function on a private body.”33 This argument leads to the conclusion that Article 1 of the ascm—which provides a definition of “subsidies” stating their existence whenever a financial contribution is made by a government or any public body within the territory of a member, which confers a benefit—would not apply to feed-in tariffs. However, it is necessary to draw the line somewhere when it comes to regulation, or we just risk giving countries too much policy freedom, which might be used in manners that distort and restrict international trade.34 Therefore, some authors suggest that measures that constitute equally direct or immediate forms of support should also be covered, which would make feed-in tariffs fall under the scope of the ascm.35 3.2 Local Content Subsidies: Double Measure of Support Local content requirements (the obligation to use a certain percentage of domestic input in the manufacture of a given product) are widely considered to be a quite effective tool to reach industrial policy objectives. As a matter of fact, such requirements grant a sure and fast development of the domestic industry.36 However, they also create distortions in the competition framework of the economic sector involved, since they provide domestic producers with a 33

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Robert Howse, Post-Hearing Submission to the International Trade Commission: World Trade Law and Renewable Energy: the Case of Non-Tariff Measures (Renewable Energy and International Law Project, May 5, 2005). The same reason underlies the carefully chosen wording of the chapeau of GATT Article xx, which makes exceptions to GATT rules contingent upon the proof of non-protectionist interests. As a matter of fact, the chapeau of GATT Article xx allows Members to adopt measures inconsistent with GATT rules provided that they fall in one of the paragraphs of the provision and “subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.” See infra, section 5.2. Luca Rubini, The Definition of Subsidy and State Aid—wto and ec Law in Comparative Perspective, supra note 32, at 121; Robert Howse, Post-Hearing Submission to the International Trade Commission: World Trade Law and Renewable Energy: The Case of NonTariff Measures, supra note 33; Sadeq Z. Bigdeli, Incentive Schemes to Promote Renewables and the wto Law of Subsidies, in International Trade Regulation and the Mitigation of Climate Change (Sadeq Z. Bigdeli, Thomas Cottier & Olga Nartova eds, Cambridge University Press, 2009). Luca Rubini, Ain’t Wastin’ Time No More: Subsidies for Renewable Energy, the scm Agreement, Policy Space, and Law Reform, 15(2) J. Int’l Econ. L. 525, 551 (2012); Dani Rodrik, One Economics, Many Recipes—Globalization, Institutions, and Economic Growth

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considerable comparative advantage against foreign competitors. Moreover, this behavior can probably involve a chain of reactions since the home country might as well decide to subsidize its companies or to retaliate against other products of the host country. Local content requirements usually characterize strategic and crucial sectors of a country—in particular those sectors where the country wants to ensure a steady development of its own industry.37 Renewable energy is certainly one of them for many countries. In the renewable energy sector, local content requirements can be included in several different measures—such as subsidies, investment agreements, partnerships and joint-ventures with foreign actors. China is probably the country where these requirements have been implemented with greatest intensity and success: thanks to the “Buy Chinese” policy that favors local manufacturers, 70 low-cost local producers supply about 75 per cent of new wind turbines. The best example is provided by the Wind Power Concession Program, adopted in 2004 with a 20-year operation period, and now revoked after the challenge brought by the United States at the wto.38 This government-run bidding program encouraged domestic and international companies to develop wind projects and originally promoted large-scale wind farms, requiring foreign investment enterprises to procure locally 70 per cent of the total parts and components used for products manufactured in China. The Renewable Energy Law of the People’s Republic of

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(Princeton University Press, 2008); Ha-Joon Chang, Kicking Away the Ladder— Development Strategy in Historical Perspective (London: Anthem Press, 2003). In particular, local content requirement has become an effective government regulation of Foreign Direct Investments in developing countries, where it is necessary to allow them to fully realize the employment and technology transfer benefit. See unido, Industrial Policy and the Developing Countries: An Analysis of Local Content Regulations (unido/IS.606, 3 Feb. 1986); ); Larry D. Qiu & Zhigang Tao, Export, Foreign Direct Investment and Local Content Requirement, 66 J. Dev. Econ. 101–125 (2001). See also C.C. Chao & E.S.H. Yu, Content Protection, Urban Unemployment and Welfare, 26 Canadian J. Econ. 481–492 (1993); G. Davidson, S.J. Matusz, & M.E. Kreinin, Analysis of Performance Standards for Direct Foreign Investment, 16 Canadian J. Econ. 876–890 (1985); Gene M. Grossman, The Theory of Domestic Content Protection and Content Preference, 96 Q.J. Econ. 583–603 (1981); A Hollander, Content Protection and Transnational Monopoly, 23 J. Int’l Econ. 283–297 (1987); K. Krishna & M. Itoh, Content Protection and Oligopolistic Interactions, 55 Rev. Econ. Stud. 107–125 (1988); Sajal Lahiri & Yoshiyasu Ono, Foreign Direct Investment, Local Content Requirement, and Profit Taxation, 108 Econ. J. 108, 444–457 (1998); F. Lopez-de-Silanes, J.R. Markusen, & T.F. Rutherford, Trade Policy Bubtleties with Multinational Firms, 40 Eur. Econ. Rev. 1605–1628 (1996); M. Richardson, Content Protection with Foreign Capital, 24 Oxford Econ. Papers 103–117 (1993). See infra Section 4.

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China39 extended this requirement to all renewable energy projects throughout the country.40 Despite the fact that some note that the obligation to source certain inputs locally pursue both industrial and environmental objectives,41 as far as subsidies contingent on the use of domestic inputs are concerned, the result is often a “double measure of support.” This is precisely why, at the wto level, local content subsidies are—together with export subsidies—given a stricter treatment: total prohibition. According to ascm Article 3.1(b), “[…] the following subsidies, within the meaning of Article 1, shall be prohibited […] (b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.”42 3.3 The Agreement on Subsidies and the Agreement on Agriculture As we mentioned in paragraph 2, during the Uruguay Round, a dual-track approach was followed, splitting subsidies disciplines into the ascm and the AoA. The main distinction concerns the scope of application of the two agreements: the ascm establishes rules that apply to industrial products, while the AoA covers all those products that can be defined as agricultural. The disciplines foreseen in the two Agreements are different, and the subsidies to agricultural products are subjected to overall stricter and more rigorous rules than those applying to industrial products. Another difference concerns the approach of the two agreements: as far as export subsidies are concerned, they are prohibited for industrial goods while permitted under the AoA; on the other hand, concerning domestic subsidies, the ascm follows an effects-based discipline (the discipline applies if 39

Zhōnghuá Rénmín Gònghéguó Kě Zàishēng Néngyuán Fǎ (2009 xiūdìng) (中华人民共和 国可再生能源法(2009修订) [ Renewable Energy Law of the People’s Republic of China

(2009 Revision)] (Promulgated by the Standing Comm. Nat’l People’s Cong., Dec. 26, 2009). 40 The Renewable Energy Law of the People’s Republic of China provides a framework for government intervention in the renewable energy sector, in order to increase production from renewable sources and boost the Chinese industry. Within this framework, local production plays a central role (together with investment in Scientific and technological research and development, construction of renewable energy projects and of relevant information systems, among others). Article 24 states that “The Government budget establishes renewable energy development fund to support,” among others “(5) Localized production of the equipment for the development and utilization of renewable energy.” 41 See Aaron Cosbey, Renewable Energy Subsidies and the wto: The Wrong Law and the Wrong Venue, 44 Subsidy Watch 1 (June 2011). 42 ascm Article 1.

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and when the subsidy causes adverse effects, as it is clear from the actionable-subsidies discipline43), while the Agreement on Agriculture opts for a more effective proscriptive approach (it is not necessary to demonstrate the adverse effect of a measure, while what matters is whether the subsidy complies or not with the provisions of the Agreement which are outlined below).44 The main goal of the Agreement on Agriculture (AoA),45 is to progressively reduce “agricultural support and protection” through a comprehensive strategy covering three areas of action (pillars): market access, domestic support, and export subsidies.46 As far as domestic support is concerned, the AoA classifies subsidies into three “Boxes”—Amber, Blue, and Green—depending on their effects on production and trade.47 The Amber Box includes forms of support that need to be progressively phased out by the Member States; however, countries that during the base period provided such support are not asked to remove it altogether but to undertake reduction commitments.48 They have 43

44 45

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The same approach is visible in Articles 5 and 6 of the ascm, significantly titled Adverse Effects and Serious Prejudice, as well as in part iii of the Agreement dealing with actionable subsidies. See Andrew L. Stoler, supra note 6, at 806–807. Research Handbook on the WTO Agriculture Agreement: New and Emerging Issues in International Agricultural Trade Law 1 (Joseph A. McMahon & Melaku Geboye Desta eds., Edward Elgar Publishing, 2012). Melaku Geboye Desta, The Law of International Trade in Agricultural Products: From gatt 1947 to the wto Agreement on Agriculture (Wolters Kluwer Law & Business, 2002); Joseph A. McMahon, The wto Agreement on Agriculture: a Commentary (Oxford University Press, 2006); Agricultural Subsidies in the WTO Green Box: Ensuring Coherence with Sustainable Development Goals (Ricardo Meléndez-Ortiz, Christophe Bellmann & Jonathan Hepburn eds., Cambridge University Press, 2010); WTO Disciplines on Agricultural Support: Seeking a Fair Basis for Trade (David Orden, David Blandford & Tim Josling eds., Cambridge University Press, 2011). The reduction of domestic support to the agricultural sector is still at the core of the Doha Development Agenda. Endorsed mostly by developing countries, the need to further reduce agricultural support is clear from the July 2008 Package, drafted in Geneva and seen as an important stepping-stone in the Doha negotiations. Research Handbook on the wto Agriculture Agreement: New and Emerging Issues in International Agricultural Trade Law, supra note 38, at 7. The amber box includes subsidies which are most directly linked to production levels, the blue box contains production-limiting programs that still distort trade, while the green one covers measures that cause not more than minimal distortion of trade or production. See ictsd, Agricultural Subsidies in the wto Green Box: Ensuring Coherence with Sustainable Development Goals, September 2009, at 2; ictsd, Biofuels Subsidies and the Law of the wto, June 2009. On the other hand, all those countries that did not provide such support are not allowed to introduce it.

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agreed to cap their annual total expenditure on domestic support, expressed in the so-called Aggregate Measure of Support (ams).49 These reduction commitments do not apply to those subsidies that cause not more than minimal distortion of trade or production, and are covered by the Green Box. It is clear from this description that the treatment granted to domestic support according to the AoA and the ascm is inherently different: there could be subsidies that are permissible under the former but would contravene the latter. This is why the classification of a product as “agricultural” or “industrial” entails considerable consequences. As far as renewable energy subsidies are concerned, several issues rise—for example—when dealing with biofuels:50 it is necessary to distinguish between ethanol and biodiesel.51 The AoA applies to all “agricultural products,” which, as clarified in Annex 1 to the Agreement, cover all products listed in Chapters 1 to 24 of the Harmonized System.52 This means that biodiesel is not included in the scope of the AoA, since it is

49 The ams is defined in AoA Article 1(a) as “the annual level of support, expressed in monetary terms, provided for an agricultural product in favor of the producers of the basic agricultural product or non-product-specific support provided in favor of agricultural producers in general […].” Moreover, Annex 3 gives guidelines on the calculation of the ams. 50 Biofuels are commonly referred to as “liquid transportation fuels […] derived from agricultural, forest and any other organic material”. unctad, The Biofuels Market: Current Situation and Alternative Scenarios (unctad, 2009). Since the increase in global awareness of climate change, the use of biofuels has grown exponentially. Despite the undeniable advantages of using biofuels—such as reduction of ghgs, as well as increasing economic growth and independence—such exploitation produces several negative effects, especially in terms of challenges to food security. See Doaa Abdel Motaal, The Biofuel Landscape: Is There a Role for the wto?, 42(1) J. World Trade 84 (2008); José G.M. Caiado, Bioenergy Development and Trade in wto Context, in Regulation of Energy in International Trade Law 229, 229–230 (Yulia Selivanova ed., 2011). 51 Ethanol is an alcohol fuel obtained by the fermentation of sugars present in various crops, while biodiesel is a fuel derived from plant oils, fats, or greases. They are both growing really fast as alternative fuels, being renewable, safe, and less polluting than fossil fuels. See José G.M. Caiado, Bioenergy Development and Trade in wto Context, supra note 52, at 230–232. 52 Except fish and fish products and plus certain other products specified in Annex I. The Harmonized Commodity Description and Coding System (“Harmonized System”) was established by the World Customs Organization (wco). This system for classifying goods traded internationally entered into force in 1988 for those countries which were members of wco and contains more than 5,000 six-digit subheadings, which may be subdivided further to reflect national administrative and statistical requirements.

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classified as an “industrial product” and therefore falls under the ascm,53 while ethanol—which is classified as an “agricultural product”—is covered by the AoA. This means that ethanol-related subsidies fall under one of the Boxes provided for in the AoA. It is generally agreed that most forms of support to ethanol production fall into the Amber Box discipline, which grants them more favorable treatment than the one provided for biodiesel subsidies under the ascm.54 The difference would be even greater, were ethanol subsidies to be included in the Green Box. However, the Green Box should not be seen as a broad category sheltering measures on the basis that they offer some environmental benefits. As a matter of fact, the AoA sets out precise and rigorous requirements that measures need to meet for this Box to apply,55 and the current schemes involving ethanol do not meet such criteria. 4

Overview of wto Disputes Involving Subsidies in the Renewable Energy Sector

So far, the Dispute Settlement Body (dsb) of the wto has been presented with a few disputes regarding renewable energy, while none has been presented in

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Biodiesel falls under Chapter 38 of the Harmonized Commodity Description and Coding System (hs), which covers chemicals not listed elsewhere. Steenblik, Liberalization of Trade in Renewable Energy and Associated Technologies: Biodiesel, Solar Thermal and Geothermal Energy, oecd trade and environment working paper 2006/1. Most subsidies on biodiesel—as well as other biofuels—fall within the ascm category of “actionable subsidies.” To contravene the Agreement, these subsidies need to be proven to have certain adverse effects, which will be extensively analyzed further on in the article. Annex 2 to the AoA lists the conditions that a measure needs to meet to be considered exempted from the reduction commitments. Two categories of requirements can be identified: general and specific. The general conditions require the measure to (a) have no (or minimal) trade-distorting effects or effects on production; (b) be part of a publicly funded government program; (c) not involve transfers from consumers; and (d) not have the effect of providing price support. Besides, Annex 2 lists several policy-specific criteria. Among the 12 different categories identified in the Annex, the category examined in paragraph 12—“environmental programs”—is certainly the most interesting one when it comes to ethanol. Paragraph 12 requires the measure to be part of a “clearly-defined government environmental or conservation program and be dependent on the fulfillment of specific conditions under the government program, including conditions related to production methods or inputs,” while the amount of payment “shall be limited to the extra costs or loss of income involved in complying with the government program.”

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relation to measures supporting fossil fuels—and especially oil.56 On the other hand, several disputes concerned export and local content subsidies (thus “prohibited” under the ascm). The findings and conclusions reached by the wto panel and Appellate Body in these cases can surely help clarify the wto approach towards such types of governmental support. What can be concluded from the analysis below is that both the panel and Appellate Body have interpreted the rules quite narrowly, so as to not leave much space to States’ policies in favor of renewables. This, despite the inarguable evolution of the wto case law toward its deep and final objectives represented by the wto preamble when it comes to assessing the relationship between trade and non-trade concerns, and especially the environment.57 56 The US-Gasoline dispute deals with a petroleum-derived product, and specifically concerns a US measure providing imported and domestic gasoline with different treatments. While it certainly offers incredible insights on the interpretation of several GATT rules, it does not address the central theme of our paper—the specific role played by energy in the WTO framework. See also Paolo Davide Farah & Elena Cima, Energy Trade and the WTO: Implications for Renewable Energy and the opec Cartel, 16 (3) Journal of International Economic Law, 707–740 (September 2013); Paolo Davide Farah & Elena Cima, L”energia nel contesto degli accordi dell”omc: sovvenzioni per le energie rinnovabili e pratiche opec di controllo dei prezzi, 2 Diritto del Commercio Internazionale, 343-381(2013). 57 The first time the relevance of environmental concerns vis-à-vis free trade was subject of debate was in the context of the gatt Tuna I case. In this occasion, the Panel gave an extremely narrow approach of the gatt so to leave no room for environmental measures. See United States—Restrictions on Imports of Tuna from Mexico (Tuna I), gatt b.i.s.d. (39th Supp.) 155 (1993) (report not adopted by the gatt Contracting Parties). We can distinguishing three generations of cases. The first generation of gatt Panels dealing with trade and environment issues is composed of five cases: the Canadian Tuna case, the Canadian Herring and Salmon case, the Thai Cigarettes case, the Tuna/Dolphin I case and the Superfund case. All these panels showed a certain unwillingness to adequately take into account environmental needs. They left little hope for the future of environmental measures with a trade-hindering effect: it would have been difficult to conceive a darker picture, from an environmental point of view, for the trade- environment relationship. The second-generation cases (Tuna/Dolphin ii and c.a.f.e. case ) opened the door to a more environmentally friendly interpretation of gatt provisions. These decisions have deeply influenced the trade and environment decisions taken since the establishment of the wto. The third generation of cases coincides with the creation of the wto. Despite the persistence of several procedural obstacles, the cases of this generation (Reformulated Gasoline, Hormones, Shrimp/Turtle, Shrimp/Turtle ii, and Asbestos) can be read as more open and sensitive to environmental issues. The evolution towards an increasing accept­ance of environmental concerns is exemplified in the decisions of the following disputes: Appellate Body Report, United States—Standards for Reformulated and Conventional Gasoline (us— Gasoline), WT/DS2/AB/R (Apr. 29, 1996); Appellate Body Report ec—Measures Affecting

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The first two disputes relate to the Canadian renewable energy generation sector: Canada—Feed-In Tariff Program and Canada—Renewable Energy.58 In both disputes, the Canadian measures challenged, respectively, by the European Union (eu) and Japan, as well as the wto provisions, whose violation is complained of, are the same. Both the eu and Japan challenged the fit Program established by the Canadian province of Ontario in 2009 providing for guaranteed, long-term pricing for the output of renewable energy generation facilities that contained a defined percentage of domestic content. The complainants deemed this program to be inconsistent with—among others— Articles 3.1(b)59 and 3.260 of the ascm because of the local content requirement present in the feed-in tariff system.61 The panels circulated their Reports on 19 December 2012, rejecting the complainants’ claim that the challenged measures were to be considered “subsidies” according to the ascm.62 As we

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Meat and Meat Products (ec—Hormones), WT/DS26/AB/R (Jan. 16, 1998); Appellate Body Report, United States—Import Prohibition of Certain Shrimps and Shrimp Products (us— Shrimps), WT/DS58/AB/R (Oct. 12, 1998); Appellate Body Report, ec- Measures Affecting the Prohibition of Asbestos and Asbestos Products (ec—Asbestos), WT/DS135/AB/R (Mar. 12, 2001); Appellate Body Report, Brazil—Measures Affecting Imports of Retreated Tyres (Brazil—Retreated Tyres), WT/DS332/AB/R (Dec. 3, 2007). See John H. Jackson, Comments on Shrimp/Turtle and the Product/Process Distinction, 11 Eur. J. Int’l L. 303–307 (2000); Robert L. Howse & Donald H. Regan, The Product/Process Distinction—An Illusory Basis For Disciplining ‘Unilateralism’ In Trade Policy, 11(2) Eur. J. Int’l L. (2000). Panel Report, Canada—Measures Relating to the Feed-In Tariff Program (Canada—Feed-In Tariff Program), WT/DS426/R (Dec. 19, 2012) and Appellate Body Report, WT/DS426/ AB/R (May 6, 2013); Panel Report, Canada—Certain Measures Affecting the Renewable Energy Generation Sector (Canada—Renewable Energy), WT/DS412/R (Sep. 13, 2010) and Appellate Body Report, WT/DS412/AB/R (Dec. 19, 2012). ascm Article 3.1(b) reads: “Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited […] (b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.” According to ascm Article 3.2, “A Member shall neither grant nor maintain subsidies referred to in paragraph 1.” The other claims regarded the alleged violation of Article 2.1 of the Agreement on Trade Related Investment Measures (trims) and gatt Article iii:4. The Panel’s rejection of the complainants’ claim regarding the violation of ascm Articles 3.1(b) and 3.2 is based on the fact that, according to the Panel, the complainant could not prove that a “benefit” was conferred through the measures at issue and therefore could not prove the existence of a benefit according to Article 1 of the ascm. The reasons underlying such a ruling will be analyzed further on in the paper when dealing with subsidies. On the other hand, the other claim—regarding the violation of trims Article 2.1 and

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will see in the following paragraphs, the Report circulated by the Appellate Body on 6 May 2013, casts doubt on the accuracy of the panels’ reasoning.63 In 2010, another dispute was initiated, this time by an investigation carried out by the United States Trade Representative (ustr) on 15 October 2010, which covered a broad variety of Chinese policies and practices affecting trade and investment in the wind power technology sector.64 As a follow-up to this investigation, the United States (us) held wto consultations with China on 16 February 2011.65 However, such consultations did not cover all the issues raised in the investigation but rather focused on subsidies. The us made clear the view that the subsidies provided to Chinese wind turbine manufacturers under the Special Fund program—through which Chinese manufacturers of wind turbines and of components of wind turbines can receive multiple grants— were prohibited because they were conditioned upon the use of domestic over imported goods (and therefore “prohibited” according to Article 3 of the ascm Agreement). Following those consultations, China took action formally revoking the legal measure that had created the Special Fund program.

gatt Article iii:4—was accepted. Panels Reports, Canada—Feed-In Tariff Program, and Canada—Renewable Energy, supra note 60. 63 Appellate Body Reports, Canada—Feed-In Tariff Program, and Canada—Renewable Energy, supra note 60. 64 The ustr investigation was based on a petition filed on September 9, 2010 by the usw. C. Moyer, J. Wang & T.P. Stewart, on behalf of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, aflcio clc (usw), China Policies Affecting Trade and Investment in Green Technology, Petition for Relief under Section  301 of the Trade Act of 1974 as amended before the United States Trade Representative (ustr), Vol. 1 of 9: Petition and Exhibits s.1, September 9, 2010, at 208. The text of the petition is available on the ustr website, at http://www .ustr.gov/about-us/press-office/reports-and-publications/2010/petition-chinas-policiesaffecting-trade-and-inv. The United States has then requested a consultation with the wto Dispute Settlement Body: China—Measures concerning Wind Power Equipment, WT/ DS419. The challenged policies were the following: (a) quotas imposed on the export of several raw materials necessary to produce wind turbines; (b) subsidies contingent on export performance and on the use of domestic products over imported ones, allegedly inconsistent with Article 3.1 of the Agreement on Subsidies and Countervailing Measures (scm Agreement) and with paragraph 10.3 of China”s Accession Protocol; (c) local content requirement, deemed to be inconsistent with gatt article iii:4 and paragraph 3(a) of China”s Accession Protocol; (d) trade distorting subsidies, violating scm articles 5 and 6; and (e) technology transfer requirements for investors, found to be inconsistent with paragraphs 1.2 and 7.3 of the Accession Protocol. 65 China—Measures Concerning Wind Power Equipment, supra note 66.

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Two new requests for consultation have been presented in 2012 and 2013: European Union and Certain Member States—Certain Measures Affecting the Renewable Energy Generation Sector66 and India—Certain Measures Relating to Solar Cells and Solar Modules.67 In the first case, China requested consultations with the eu, Greece, and Italy regarding certain feed-in tariff programs implemented by a number of eu member states in the renewable energy sector, while in the second, the us challenged Indian measures relating to domestic content requirements under the Jawaharial Nehru National Solar Mission (“nsm”) for solar cells and solar modules. 5

The Disputes Involving Canada and Renewable Energy: Is There Room for Change?

All the disputes briefly described above involve subsidies accorded to renewable energy enterprises, considered prohibited according to Article 3 of the ascm because of the “local content requirement” they prescribe.68 While in the China—Wind dispute, the official position of the panel is unknown because China removed the measure at stake after consultations with the us, and the last two disputes are still at a request-for-consultations stage, the panel and Appellate Body Reports on Canada—Feed-In Tariff Program and Canada— Renewable Energy, offer interesting insights on the problems of subsidies in the renewable energy sector. In order to decide whether subsidies—generally prohibited—might be permitted because of their “green” nature, we will answer two questions: are measures supporting renewable energy to be considered as “subsidies” according to the ascm? And secondly, if they are, can they still be justified? Do Measures Supporting Renewable Energy Qualify as “Subsidies” according to the ascm? The ascm provides a definition of “subsidies” in Article 1: a subsidy exists whenever a financial contribution is made by a government or any public body 5.1

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Request for Consultations by China, European Union and Certain Member States—Certain Measures Affecting the Renewable Energy Generation Sector, WT/DS452/1 (Nov. 5, 2012). Request for Consultations by the United States, India—Certain Measures Relating to Solar Cells and Solar Modules, WT/DS456/1 (Feb. 6, 2013). ascm Article 3.1(b) identifies the following subsidies as prohibited: “subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.”

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within the territory of a member, which confers a benefit. Moreover, according to Article 1.2, only a measure that is a “specific subsidy” as defined in Part I of the ascm is subject to the wto’s subsidies discipline. In order to verify whether measures adopted to support trade in renewable energy fall within the scope of the ascm, two requirements need to be analyzed: (a) the existence of a financial contribution of public nature; and (b) the existence of a benefit. 5.1.1 The Existence of a Financial Contribution Article 1 of the ascm contains a detailed and exhaustive list of governmental measures that qualify as “financial contribution”, thus providing for a high degree of certainty and predictability.69 Such measures range from grants, loans, and equity infusions (government practices which involve a direct transfer of funds), to fiscal incentives (government revenue that is otherwise due is foregone or not collected), and provision of goods or services as well as purchase of goods. According to the same provision, such measures do not need necessarily to be of public nature: as a matter of fact, when entrusted or directed by the government, measures carried out by private entities still qualify as “financial contribution.”70 Moreover the aforementioned measures are not to be considered alternative but they might even be cumulative. As a matter of fact, the Appellate Body in the Canada—Renewable Energy and Canada— Feed-In Tariff Program disputes, quoting a previous dispute,71 stated that “a transaction could be covered by more than one subparagraph” because—for example—there is “no ‘or’ included between the subparagraphs.”72 In this specific case, the Japan had initially claimed that Ontario’s fit Programme would qualify as both “direct transfer of funds” and “purchase of goods,” under ascm Article 1(a)(1)(i) and 1(a)(1)(iii). The panel considered the fit Program as a “purchase of goods,” ruling out the second possible qualification based on the 69 70

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Debra P. Steger, supra note 6, at 781, 784. ascm Article 1: “For the purpose of this Agreement, a subsidy shall be deemed to exist if: (iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments”. wto Agreement on Subsidies and Countervailing Measures (ascm), Part I (General Provisions), Article 1. For a detailed analysis of Article 1 of the ascm, see Vermulst & Graafsma, supra note 4, at 281–305; see also Didier, supra note 4, at 193. Request for Consultation by the European Communities, United States—Measures Affecting Trade in Large Civil Aircraft, WT/DS317/1 (Oct. 6, 2004). Appellate Body Reports, Canada—Feed-In Tariff Program, and Canada—Renewable Energy, supra note 60, 5.122.

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assumption that such finding would infringe “[the] principle of [effective treaty interpretation],” thus considering the subparagraphs of Article 1 as alternative. The Appellate Body reversed the panel’s findings declaring the possibility for a measure to fall under two or more subparagraphs. However, it found that the arguments advanced by the claimant on this matter were not sufficient and therefore ruled out the qualification of the measure at stake as “direct transfer of funds.” When assessing the type of financial contribution, the panels and the Appellate Body considered the fit program implemented by the Government of Ontario as involving a “purchase” according to Article 1(a)(1)(iii), based on several legal arguments. One of the main arguments used by the Panel is that the “Government of Ontario takes possession over electricity and therefore ‘purchases’ electricity.”73 According to the Panel, what is required by the term “purchase” is just the mere “payment (usually monetary) in exchange for a good:”74 (a) it does not require the entity purchasing the good (in this case, the government) to be supplied for its own use; (b) nor it implies physical possession over the good purchased. In particular, as far as electricity is concerned, physical possession would be inherently impossible, being “an intangible good that, in general, cannot be stored and must be consumed almost at the same time it is produced.”75 5.1.2 The Existence of a Benefit As stressed by the Panels in Canada—Renewable Energy and Canada—Feed-In Tariff Program—and previously noted by both the Panel and Appellate Body on other occasions76—to assess the existence of a benefit, the analysis should not focus on whether the recipient is better off than its competitors but rather whether it is better off than it would have been without the financial contribution.77 This approach might allow measures adopted to support renewable 73 74 75 76 77

Panels Reports, Canada—Feed-In Tariff Program, and Canada—Renewable Energy, supra note 60, 7.224. Id., 7.227. Id., 7.229. Appellate Body Report, Canada—Measures Affecting the Export of Civilian Aircraft (Canada—Aircraft), WT/DS70/AB/R (Jul. 21, 2000), 157. Whether the subsidy affects competition needs to be analyzed later and separately when assessing the actual effects of the subsidy (and so this analysis will take place only when it is proved that the specific financial contribution falls within the scope of ascm Article 1). Sadeq Z. Bigdeli, Incentive Schemes to Promote Renewables and the wto Law of Subsidies, in International Trade Regulation and the Mitigation of Climate Change (Sadeq Z. Bigdeli, Thomas Cottier & Olga Nartova eds., Cambridge University Press, 2009). Luca Rubini, The

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energy producers. As a matter of fact, we need to consider that, as we emphasized previously, the prices of neither fossil fuels nor renewable energies include the negative externalities of the former and the positive ones of the latter. This creates a condition of disadvantage for renewable energy producers. Thus, if we need to just consider whether the recipient of the financial contribution is better off than absent the contribution itself—without considering the impact on competition—in this case we might say that the subsidy is not conferring an advantage but rather compensating a disadvantage faced by the producer.78 In order to compare the position of the recipient with and without the financial contribution, one must identify the specific marketplace and use it as a benchmark:79 as stated by the Appellate Body, “that a financial contribution confers an advantage on its recipient cannot be determined in absolute terms,

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Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 24–25. See also Appellate Body Report, Canada—Aircraft, supra note 78, 149. Since renewable energy producers face costs significantly higher that those faced by producers of fossil fuels, these kinds of support measures “simply reimburse or compensate the enterprise for taking some action that it would otherwise not take, and the enterprise has not necessarily acquired any competitive advantage over other enterprises that neither take the subsidy nor have to perform these actions.” See Robert Howse, Climate Change Mitigation Subsidies and the wto Legal Framework: A Policy Analysis, International Institute for Sustainable Development (2010) at 13. As stated by the Appellate Body in Canada—Aircraft, “the marketplace provides an appropriate basis for comparison in determining whether a ‘benefit’ has been ‘conferred’, because the trade-distorting potential of a ‘financial contribution’ can be identified by determining whether the recipient has received a ‘financial contribution’ on terms more favorable than those available to the recipient in the market.” wto Appellate Body Report, Canada—Aircraft, supra note 78, 157. See also Panel Report, Canada—Export Credits and Loan Guarantees for Regional Aircraft (Canada—Aircraft Credits and Guarantees), WT/ DS222/R, adopted 28 January 2002, para 7.343; Panel Report, United States—Tax Treatment for “Foreign Sales Corporations” (us—fsc) (Article 21.5—ec), WT/DS108, adopted 20 August 2001, 7.278–7.296. The same conclusion was reached by the Panels in Canada— Renewable Energy and Canada—Feed-in Tariff Program. Here, the Panels stressed that the importance of the marketplace in this analysis is further supported by Article 14 of the scm, which sets some rules for calculating the amount of the subsidy in terms of the benefit to the recipient and which has been proved to be “relevant context in interpreting Article 1.1(b).” According to this provision, for the government purchase of goods to confer a benefit, it needs to be made for “more than adequate remuneration,” and the adequacy of this remuneration must be evaluated in relation to the “prevailing market conditions” for the good in question in the country of purchase. Panel Reports, Canada—Renewable Energy and Canada—Feed-in Tariff Program, supra note 60, 7.274. wto Appellate Body Report, Canada—Aircraft, supra note 78, 155 and 158.

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but requires a comparison with a benchmark, which, in the case of subsidies, derives from the market.”80 However, the panel concluded that the marketplace identified by the complainants—the wholesale electricity market that currently exists in Ontario—could not be used as a “reliable” indicator because it was not competitive enough: if the absolute nonexistence of government intervention is not required, on the other hand, a government’s involvement as a provider of a particular good which makes it impossible to determine whether a recipient is “better off” absent the financial contribution, rules out the possibility to use that particular marketplace as a benchmark.81 This evaluation led the panel to conclude that the existence of a benefit had not been proved. The Appellate Body found two main problems with the panels’ analysis of the relevant market for the purpose of the benefit comparison. According to the Appellate Body, not only the panels did not follow the right sequence of steps in the benefit analysis—they should have started, rather than concluding, with the definition of the relevant market—but the analysis itself was inaccurate. As a matter of fact, the panels should not have limited their analysis to the benchmarks that were part of the complainants’ argument in a situation where the evidence and the arguments presented by the complainants may have allowed them to take into account several additional factors (such as the type of contract, the size of the customer, and the type of electricity generated).82 This might have led to a different conclusion and to the identification of a market that could have been used as benchmark. Unfortunately, the

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Appellate Body Reports, Canada—Feed-in Tariff Program, and Canada—Renewable Energy, supra note 60, 5.164. Appellate Body Report, United States—Final Countervailing Duty Determination with respect to certain Softwood Lumber from Canada (us–- Softwood Lumber iv), WT/DS257/ AB/R (Jan. 19, 2004, 93. Several authors argue that this is a problem affecting energy in general: the energy market is extremely distorted because of the heavy public intervention, especially in support of fossil fuels. Luca Rubini, The Definition of Subsidy and State Aid— WTO and ec Law in Comparative Perspective, supra note 35, at 226–233; Luca Rubini, The Subsidization of Renewable Energy in the WTO: Issues and Perspectives, supra note 24, at 24; Daniel Peat, The Wrong Rules for the Right Energy: The WTO scm Agreement and Subsidies for Renewable Energy 24 Environmental Law and Management (2012); Robert Howse, World Trade Law and Renewable Energy: The Case of Non-Tariff Barriers (unctad, 2009) 11. The following WTO disputes deal with this specific issue: Canada—Measures Affecting Dairy Exports (Canada—Dairy), DS113; us—Softwood Lumber iv, ds 257. Appellate Body Reports, Canada—Feed-in Tariff Program, and Canada—Renewable Energy, supra note 60, 5.170-178, 5.214, 215.

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insufficient findings in the panel report made it impossible for the Appellate Body to complete the legal analysis.83 5.2 Are “Subsidies” on Renewable Energy Justified? The complainants in the Canada—Renewable Energy and Canada—Feed-In Tariff Program disputes were not able to prove the existence of a benefit for the recipient of the government measure, and therefore there was no violation of the ascm by the Government of Ontario. It might be nevertheless interesting to conduct a purely theoretical reasoning over the possibility to justify measures supporting renewable energy if they were to be found to be “prohibited subsidies” according to ascm Articles 1 and 3. In particular, we would like to address an issue which has proved to be extremely controversial: the possibility to apply the general exceptions set out in gatt Article xx to the ascm, since the latter lacks its own exceptional clause. Can we apply gatt Article xx to a subsidy, which goes beyond the scope of the Agreement? In other words, can gatt Article xx integrate the provisions of the scm Agreement? Various arguments can be made against such applicability. First of all, one might stress the fact that in order for gatt Article xx to apply, the ascm should explicitly recall it, as it happens in the Agreement on Sanitary and Phytosanitary Measures (sps Agreement), which makes express reference to gatt Article xx(b) in Articles 1 and 2.4.84 Furthermore, not only does the ascm not mention such provision but, in Article 3.1, on prohibited subsidies, it specifically excludes from the scope of the provisions what is “provided in the Agreement on Agriculture.” Finally, the Agreement on subsidies used to have its own exception, enshrined in Article 8, now no longer in force. The existence of a provision similar to Article xx but designed exclusively for the scm Agreement could be seen as a sign of the inadequacy and eventually inapplicability of gatt Article xx.85 On the other hand, a few arguments have been proposed in favor of the applicability of gatt Article xx to the ascm: the first one relates to a general 83 84

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Id., 5.224. According to sps Article 1, Members desire “to elaborate rules for the application of the provisions of gatt 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article xx(b),” while Article 2.4 reads as follows: “Sanitary or phytosanitary measures which conform to the relevant provisions of this Agreement shall be presumed to be in accordance with the obligations of the Members under the provisions of gatt 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article xx(b).” Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 35.

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principle of international law, the second one is the result of a purely logical reasoning, and the last one is based on the wto case law. First, we need to consider the hierarchy of the different agreements belonging to the wto legal framework. As a matter of fact, the principle of lex specialis derogat legi generali, widely applied by international courts and tribunals, is a broadly accepted customary international law principle of treaty interpretation.86 The gatt applies as soon as trade in goods is affected, and can be therefore classified as lex generalis, while the scm Agreement—as well as other agreements such as the sps, the tbt, the AoA, and so on—has a specific scope of application and therefore qualifies as lex specialis. This means that, while the provisions of the ascm—as lex specialis—take precedence over those of the gatt—lex generalis—in case of conflict, the gatt remains always applicable to fill in possible gaps, where the ascm does not specifically contemplate otherwise. The second argument is purely logical. It stems from the analysis of the different measures covered by the two agreements (gatt and ascm) and from the consideration that denying the applicability of the exceptions set out in gatt Article xx to subsidies would create irreversible and unjustified policy inconsistencies. As a matter of fact, the gatt covers measures—such as total bans and quotas—which are widely known as more restrictive and trade-distorting than subsidies. Needless to say that such an approach would end up allowing more distorting measures and banning less distorting ones.87 Finally, the last argument is based on the wto case law. In the China—Publications and Audiovisual Products88 dispute, the Appellate Body agreed that Article xx of the gatt could apply to China’s Protocol of Accession (in particular to Article 5.1),89 and for the first time it showed a positive attitude towards the idea that such provision might be applicable beyond the scope of the agreement.90 86

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With specific reference to this principle in the context of the wto, see Joost Pauwelyn, Conflicts of Norms in Public International Law: How WTO Relates to Other Rules of International Law 385 (Cambridge University Press, 2003). See also Tim Graewert, Conflicting Laws and Jurisdictions in the Dispute Settlement Process of Regional Trade Agreements and the wto, 1(2) Contemporary Asia Arbitration J. 287–334 (2008). See Robert Howse, Climate Change Mitigation Subsidies and the wto Legal Framework: A Policy Analysis, International Institute for Sustainable Development 13 (2010); Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 35. Appellate Body Report, China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China— Publications and Audiovisual Products), WT/DS363/AB/R, (Dec. 21, 2009). Id., 205–233. In this dispute, the United States challenged a variety of provisions within various Chinese measures as inconsistent with paragraph 5.1 of China”s Accession Protocol, related to the

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There is still a crucial difference between China’s Accession Protocol and the scm Agreement: the latter—like the other wto agreements—does not include a general “without prejudice clause” as written in China’s Accession Protocol. Whether this obstacle could be overcome or not based on the legal relationship between the ascm and gatt provision, is still debated.91 It follows that the wto treaty structure is complex and the relationship between the provisions of the wto Agreements is not at all clear. On the one hand, the wto panel and Appellate Body are not likely to agree to the application of Article xx to the ascm provisions, since, in the interpretation of wto agreements, they have often adopted a quite narrow approach that appears to apply the rules of the Vienna Convention on the Law of Treaties (vclt) rather mechanically.92 On the other, the recent ruling in the aforementioned China— Publications and Audiovisual Products case represents a “welcome development in wto jurisprudence.”93 Undoubtedly, however, allowing gatt Article xx to be used to justify any wto violation—even beyond the list of objectives mentioned therein—would confer considerable power to the panel and the Appellate Body, increasing the discretion they already exercise in the “weighing and balancing” activity required under Article xx.94 6 Conclusions The goal of this contribution was to highlight some unresolved issues and tensions that characterize the way the wto deals with renewable energy subsidies. These tensions include, first, the inherent lack of coherence and coordination among different wto Agreements and the insufficiency of current interpretive

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regulation of the right to import the specific products at stake into China. China invoked gatt Article xx(a) as a defense, especially relying upon the introductory clause of paragraph 5.1 of its Accession Protocol, which reads: “without prejudice to China”s right to regulate trade in a manner consistent with the wto Agreement.” Luca Rubini, The Subsidization of Renewable Energy in the wto: Issues and Perspectives, supra note 24, at 36; Joost Pauwelyn, Squaring Free Trade in Culture with Chinese Censorship: The wto Appellate Body Report on ‘China—Audiovisuals’, 11(1) Melbourne J. Int’l L. 119 (2010). Joost Pauwelyn, Squaring Free Trade in Culture with Chinese Censorship, supra note 92. Julia Ya Qin, Pushing the Limits of Global Governance: Trading Rights, Censorship and wto Jurisprudence—A Commentary on the China–Publications Case, 10 Chinese J. Int’l L. 271, 292 (2011). Julia Ya Qin, The Challenge of Interpreting “wto-plus” Provisions, 44(1) J. World Trade 127, 132 (2010). Julia Ya Qin, Pushing the Limits of Global Governance: Trading Rights, Censorship and wto Jurisprudence, supra note 94, at 293. Joost Pauwelyn, Squaring Free Trade in Culture with Chinese Censorship, supra note 92.

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tools. Second, the non-inclusion of ‘energy’ or ‘renewable energy’ in any wto agreement makes it hard for wto rules to fully acknowledge and value the specific obstacles faced by renewable energy producers and consumers. It is necessary to weigh the positive externalities of renewable energy use against the negative ones created by fossil fuels when evaluating national policies, and the wto still lacks a suitable mechanism to achieve this goal. Third, the need to condemn local content requirement should be balanced with the necessity, for developing countries and emerging economies, to develop or improve their own domestic renewable energy industry, and a subsidy program completely void of a local content requirement would hardly help the country develop it own domestic production and market. One possible solution could be to include a period of transition, provided for in the Protocol of Accession, where the local content requirements are accepted by the wto until a certain level of development is reached. All these tensions show the fundamental inadequacy of existing wto rules in this area. It is now indisputable that climate change is one of the most relevant problems to face contemporary world and it has to be addressed with new instruments, which, in the framework of the wto, would require a change of course: leaving the current judicial status-quo behind with the adoption of a more flexible interpretation of wto Agreements toward sustainable development and the protection of the environment.

chapter 21

Evidence and the Principle of Good Faith in Investment Arbitration: Finding Meaning in Public International Law Emily Sipiorski i Introduction Investment arbitration is a relatively young field of dispute resolution, and therefore, available precedent for taking decisions can be limited in comparison to more developed areas of international law. Often situations arise in which the language of either the treaties or the rules simply offer limited or no guidance. By reaching into broader principles of public international law, tribunals are able to supplement the limited guidance provided. In this respect, tribunals reach into public international law, in particular decisions by the International Court of Justice, to support decisions—using both the reasoning of earlier public international law tribunals as well as the larger principles of public international law. The use of the principle of good faith is a critical example of this interaction. As will be discussed below, good faith allows interaction with the ideal of a fair trial as well as procedural fairness. In the submission of evidence, the idea of a fair trial as well as the principle of good faith frequently act as guiding principles in decisions on evidence. As a more defined field of law, public international law gives authority to the development of investment arbitration. This grounding, however, does not mean that investment arbitration mirrors public international law. Instead, tribunals often apply these principles and the reasoning of international tribunals but within the confines of the investment arbitration context—thus giving it a distinct interpretation and application. Cross-referencing with public international law serves usefully as a background to strengthen the field of investment arbitration. The following chapter first identifies the background to the general idea of the fair trial and the principle of good faith as supported in public international law as well as the application by tribunals. Then the analysis turns to how the application of these general principles has been developed in the investment arbitration context.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_022

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The Principles Guiding Evidentiary Submissions in Public International Law

A Good Faith in Public International Law Good faith has been well-recognized as a general principle of international law.1 Supporting its place as a general principle, Kotzur has noted that ‘[g]ood faith belongs to the very few legal principles which do find resemblances in more or less all legal systems and legal cultures.’2 The basic meaning of good faith varies, however, in its application in international and national contexts.3 The principle arises throughout legal codes and decisions as a means of ensuring fairness. Yet, the principle cannot be simply defined. Notably, Bin Cheng indicated that good faith ‘eludes definition’.4 Such clear definition is arguably a 1 Bin Cheng, General Principles of Law as applied by International Courts and Tribunals (Cambridge: Cambridge University Press, 1953, reprinted 1994), 103 ff. (noting the relevance of good faith in inter alia treaty formation, treaty performance, and the exercise of rights); James Crawford, Brownlie’s Principles of Public International Law, 8th ed. (Oxford: Oxford University Press, 2012) 377 ff. (noting the application of good faith in treaty relations); Anthony D’Amato, ‘Good Faith’, in: Encyclopedia of Public International Law (1992), 599–601 (stating that ‘[t]he principle of good faith requires parties to a transaction to deal honestly and fairly with each other, to represent their motives and purposes truthfully, and to refrain from taking unfair advantage that might result from a literal and unintended interpretation of the agreement between them.’); Markus Kotzur, ‘Good Faith (Bona fides)’, in: Max Planck Encyclopedia of Public International Law (2009) (stating that ‘[b]ona fides takes a most prominent place among the general principles as specified in Art. 38(1)(c) Statute of the International Court of Justice’); Andrew Mitchell, ‘Good Faith in wto Dispute Settlement’, 7 Melbourne Journal of International Law 341 (2006), 341 (tracing its origins in modern international law to the drafting of the Statute of the Permanent Court of International Justice); J.F. O’Connor, Good Faith in International Law, (Aldershot: Darmouth, 1991), 2 (describing good faith as ‘the foundation of all law […]’); M. Virally, ‘Review Essay: Good Faith in Public International Law’, 77 American Journal of International Law 130 (1983), 130 (‘It is commonly understood by international lawyers that a requirement of good faith in various contexts is a well-established principle of international law and even one of the most fundamental ones’); Elisabeth Zoller, La Bonne Foi en Droit International Public, (Paris: A. Pédone, 1977). 2 Kotzur, in Max Planck Encyclopedia of Public International Law. 3 Peter Schlechtriem, Good Faith in German Law and in International Uniform Laws: ‘If the principle of good faith and fair dealing is indeed common to all legal systems based on the values of western civilization, then it should be easy to find a common core of concrete rules derived from this principle. […] But I have looked in vain for a monograph […] which would report and compare in detail the various manifestations of the principle and its applications and understanding in the legal systems of the Western world […].’ 4 Bin Cheng, General Principles of Law as Applied by Courts and Tribunals, 105. Cremades further contemplates the complexity of defining with specific state examples. After stating that good faith has been applied in the international arbitration context, he further notes

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necessity for achieving some of the most basic aspects of procedural fairness and the fair trial: consistency. One rule transcends the cacophony of definitions. Namely, the principle never stands alone, but rather is applied with respect to other obligations. This perspective on good faith was specifically noted by the icj in the Cameroon v. Nigeria decision: ‘Although the principle of good faith is one of the basic principles governing the creation and performance of legal obligations […] it is not in itself a source of obligation where none would otherwise exist.’5 The icj has further considered the principle as part of the basic ‘[t]rust and confidence inherent in international co-operation.’6 Good faith is most frequently referenced in legal codes governing contracts— both in the international and domestic context.7 In these explicit references to good faith, the principle typically seeks to achieve fairness—the inevitable pairing with the idea of ‘fair dealing’.8 More complicated are the applications of the principle of good faith where the legal code does not provide for such explicit application. Instead, the court or tribunal considers it necessary as a means of achieving justice. In a sense, it is a recognition that the mere language of the treaty or contract is simply insufficient in its application for justice to be achieved. Thus, the court or tribunal

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that ‘[n]evertheless, it is not clear what the concept of good faith actually means. […] In the Anglo-Saxon sphere, doctrine and jurisprudence demonstrate a radical rejection of good faith that they hold to be ‘abhorrent’ with the adversarial spirit, which must govern in the world of contracts. Naturally, this rejection has been mitigated in the legal system of the United States, where there is no shortage of voices advocating good faith as the great recent discovery in u.s. law. In other legal systems, good faith is questioned as are, in general, any standards which may lead to arbitrariness by judicial or arbitral decision-makers.’ (citations deleted) Cremades, Good Faith in International Arbitration, 766. Cameroon v. Nigeria, Preliminary Objections Judgment, icj Reports, 1998, para. 38. Nuclear Tests (New Zealand v. France), icj Reports 457, 1974, para. 49. For consideration of the principle in the international or plurilateral context, see cisg Art. 7(1) provides ‘[i]n the interpretation of this Convention, regard is to be had to its international character and to the need to provide uniformity in its application and the observance of good faith in international trade.’; Principles of European Contract Law, Art. 1:201(1): ‘Each party must act in accordance with good faith and fair dealing. In the domestic context, see Restatement of the Law Second, Contracts, Section 205: ‘Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.’; German Civil Code, Section 242: ‘Der Schuldner ist verpflictet, die Leistung so zu bewirken, wie Treu und Glauben mit Rücksicht auf die Berkehrssittee es erfordern.’; French Civil Code Art. 1134(3). UNIDROIT Principles of International Commercial Contracts Art. 1.7: ‘(1) Each party must act in accordance with good faith and fair dealing in international trade. (2) The parties may not exclude or limit this duty.’

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turns to the principle of good faith—applied with another obligation—to reach a fair conclusion. Thus, when it is applied in this context, it is up to that court or tribunal to determine its necessity. Nothing specifically directs such application. B Good Faith in Investment Arbitration Good faith has been frequently referenced by tribunals in reaching decisions. However, the application of the principle lacks consistency.9 At times, tribunals apply good faith based on the provision of the treaty: i.e., the bilateral investment treaty (bit) requires that the host state provide fair and equitable treatment, which in turn implies conduct in good faith.10 Other times, the 9

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See generally, A.F.M. Maniruzzaman, ‘The Concept of Good Faith in International Investment Law—The Arbitrator’s Dilemma’, 89 Amicus Curiae: Journal of the Society for Advanced Legal Studies (2012), 18 (describing good faith as ‘a subject of perennial controversy since it was derived from the Roman legal equivalent “bonas fides”.’); Eric De Brabandere, ‘“Good Faith”, “Abuse of Process” and the Initiation of Investment Treaty Claims’, 3 (3) Journal of International Dispute Settlement 609 (2012), 609 ff.; Martha Belete Hailu, ‘Good Faith (Lack of) in Investment Arbitration and the Conduct of the Ethiopian Government in the Salini Case: Exercise of Legitimate Right or ‘Exhibit A’ for Guerrilla Tactics?’, 6 Virtual Library, http://vi.unctad.org/resources-mainmenu-64/digital library?i= VA&op=all&q=hailu&act=search&option=com_gslink 2012. Roland Kläger, ‘Fair and Equitable Treatment’ in International Investment Law, (Cambridge: Cambridge University Press, 2013) 130 ff. (“the principle of good faith has met with wide recognition in the discussion regarding the concept of fair and equitable treatment […] In their analysis of a possible breach of fair and equitable treatment, arbitral tribunals frequently highlight good faith as a guiding principle in the relationship between the investor and the host state.”); Rudolf Dolzer/Christoph Schreuer, Principles of International Investment Law, 2nd ed. (Oxford: Oxford University Press, 2012) XX; Genin and Others v. Estonia, icsid Case No. arb/99/2, Award, 25 June 2001, para. 367 (stating that ‘Article ii(3) (a) of the BIT requires the signatory governments to treat foreign investment in a “fair and equitable” way. […] Acts that would violate this minimum standard would include acts showing a willful neglect of duty, an insufficiency of action falling far below international standards, or even subjective bad faith.’); Mondev International Ltd v. United States of America, icsid Arbitration No. arb(af)/99/2, Award, 11 October 2002, para. 116 (‘To the modern eye, what is unfair or inequitable need not equate with the outrageous or the egregious. In particular, a State may treat foreign investment unfairly and inequitably without necessarily acting in bad faith.’); Tecnicas Medioambientales Tecmed S.A. v. The United Mexican States, icsid Case No. arb(af)/00/2, Award, 29 May 2003, para. 153 (‘The Arbitral Tribunal finds that the commitment of fair and equitable treatment included in Article 4(1) of the Agreement is an expression and part of the bona fide principle recognized in international law, although bad faith from the State is not required for its violation[.]’); Waste Management v. United Mexican States, icsid Case No. arb(af)/00/3,

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t­ ribunal links obligations to act in good faith to the investor’s requirement to comply with the laws of the host state.11 Other tribunals find for application of

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Award, 30 April 2004, para. 138 (noting that “[a] basic obligation of the State under Article 1105(1) [of the nafta] is to act in good faith and form, and not deliberately to set out to destroy or frustrate the investment by improper means.”); Bayindir Insaat Turizm Ticaret ve Sanayi A.S. v. Islamic Republic of Pakistan, icsid Case No. ARB/03/29, Award, 14 November 2005, para. 237 (referring to the interpretation of the fair and equitable treatment obligation as stated in Tecmed); Saluka Investments B.V. v. The Czech Republic, UNCITRAL, Partial Award, 17 March 2006, para. 307 (‘A foreign investor protected by the Treaty may in any case properly expect that the Czech Republic implements its policies bona fide by conduct that is, as far as it affects the investors’ investment, reasonably justifiable by public policies and that such conduct does not manifestly violate the requirements of consistency, transparency, even-handedness and nondiscrimination. In particular, any differential treatment of a foreign investor must not be based on unreasonable distinctions and demands, and must be justified by showing that it bears a reasonable relationship to rational policies not motivated by a preference for other investments over the foreign-owned investment.’); Sempra Energy International v. Argentine Republic, icsid Case No. ARB/02/16, Award, 28 September 2007, paras. 291–292, 297 (contrasting the positions of the parties by noting that the claimant “explains that while this particular standard [of fair and equitable treatment] originates in the obligation of good faith under international law, it has gradually acquired a specific meaning in the light of decisions and treaties, and requires, inter alia, a treatment compatible with the expectations of foreign investors, the observance of arrangements on which the investor has relied in making the investment, and the maintenance of a stable legal and business framework.” While noting that the respondent considers that ‘fair and equitable treatment is a standard indistinguishable from the customary international minimum standard[.]’ Ultimately, the tribunal maintains with respect to the fair and equitable treatment standard that ‘[t] he principle of good faith is thus relied on as the common guiding beacon that will orient the understanding and interpretation of obligations, just as happens under civil codes.’); Frontier Petroleum Services Ltd. v. The Czech Republic, UNCITRAL, Final Award, 12 November 2010, para. 301 (‘It follows from these authorities that action by the host state that is not in good faith is at variance with the fair and equitable treatment promise. However, not every violation of the standard of fair and equitable treatment requires bad faith.’). Dolzer/Schreuer, Principles of International Investment Law; Plama Consortium Limited v. Republic of Bulgaria, icsid Case No. ARB/03/24, Award, 27 August 2008, para. 135 (‘the Arbitral Tribunal considers that this situation [deliberate concealment amounting to fraud] does not involve the ‘strawman’ provision set out in the Bulgarian Privatization Law, the Tribunal is of the view that this behavior is contrary to other provisions of Bulgarian law and to international law and that it, therefore, precludes the application of the protections of the ect.’); Phoenix Action, Ltd. v. Czech Republic, icsid Case No. ARB/06/5, Award, 15 April 2009, para. 106 (‘States cannot be deemed to offer access to the icsid dispute settlement mechanism to investments not made in good faith.’); Gustav F

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good faith based on the language of the relevant convention which provides for applicable provisions of public international law.12 Still more generally, some tribunals require consideration of the icsid Convention or the treaty, international agreements respectively, with deference to general principles of law.13 In other instances, the tribunal simply disregards any relevance of good faith and analyzes the actions based strictly on the express language of the treaty or concession agreement.14 These applications encompass both a substantive perspective to good faith—considering the host state’s obligations to the investors—as well as procedural good faith with reference to the arbitral proceedings specifically.15

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W Hamester v. Republic of Ghana, icsid Case No. arb/07/24, Award, 18 June 2010, para. 123 (‘An investment will not be protected if it has been created in violation of national or international principles of good faith; by way of corruption, fraud, or deceitful conduct; or if its creation itself constitutes a misuse of the international investment protection under the icsid Convention. It will also not be protected if it is made in violation of the host State’s law […]’). icsid Convention, Art. 42(1) which provides: ‘The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable.’ adc Affiliate Ltd. v. Republic of Hungary, Award, 2 October 2006, para. 290. Inceysa Vallisoletana, S.L. v. Republic of El Salvador, icsid Case No. arb/03/26, Award, 2 August 2006, para. 230 ff.; Phoenix v. Czech Republic, paras. 77, 100 ff. Cremades, Good Faith in International Arbitration, 761 ff. Cremades contends that ‘[i]t is difficult to find any international arbitration award not based on, or that does not at least mention, good faith.’ This statement is most likely too broad and unqualified, but perhaps refers to be implicit and explicit references to good faith. For an analogous consideration in national/constitutional interpretation, consider Scalia/Garner, Reading Law: the Interpretation of Legal Texts, St Paul 2012. An important distinction should be made between procedural aspects of good faith—for example, interpreting treaty language—and substantive application of good faith. Substantive good faith impacts the obligations of the parties and their rights. Both aspects of good faith will be covered in this study. See also De Brabandere, ‘Good Faith’, ‘Abuse of Process’ and the Initiation of Investment Treaty Claims, XX (‘From a substantive perspective, ‘good faith’ often is used to assess the conduct of the host State. From a procedural perspective, ‘good faith’ likewise plays a significant role in relation to the conduct of the arbitral proceedings, linked to the obligation to arbitrate fairly.’). The Abaclat tribunal generally distinguished procedural good faith from ‘material good faith’. Noting that material good faith had been approached by tribunals in two ways: ‘(i) It can be seen as an issue of consent and thus of jurisdiction, where the consent of the Host State cannot be considered to extend to investments done under circumstances breaching the principle of good faith; (ii) It can be seen as an issue relating to the merits, where the key question

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C Fair Trial Good faith can be closely associated with the general right to a fair trial—and the inevitable association with fair dealing during the process of dispute resolution. Parties’ right to a fair trial is equally well accepted in international law.16 A fair trial includes the right to a ‘fair and public hearing by an independent

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is whether the circumstances in which the relevant investment was made are meant to be protected by the relevant BIT.’ In contrast, the tribunal noted that the two approaches to procedural good faith by tribunals included ‘(i) It can be seen as an issue of consent and thus of jurisdiction, where one party considers procedural aspects to be key components of the consent of the Host State; or (ii) It can be seen as an issue of admissibility, where the key question is whether the way in which the investor initiated the proceedings, although in accordance with the applicable provisions, aim to obtain a protection, which he is—under the principle of good faith—not entitled to claim.’ See Abaclat and others v. Argentina, icsid Case No. ARB/07/5, Decision on Jurisdiction and Admissibility, 4 August 2011, para. 648 ff. (holding that ‘tfa’s role in the proceedings [did] not amount to an abuse of rights which would justify dismissing Claimants’ claim for lack of admissibility.’). Universal Declaration of Human Rights, Art. 10; International Covenant on Civil and Political Rights, Art. 14: “All persons shall be equal before the courts and tribunals. In the determination of nay criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.”; European Convention on Human Rights, Art. 6: providing in part “In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law […] Everyone charged with a criminal offence has the following minimum rights: […] (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him.”; Legal Status of Eastern Greenland Case, Art. 6; United States Constitution, 6th Amendment, providing “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.”; Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals, 295–299. See also Patrick Robinson, The Right to a Fair Trial in International Law, with Specific Reference to the Work of the icty, Berkeley Journal of International Law Publicist 2 (2009), 1–11, 1–2. The historical origins of this right to a fair trial can be linked to the Lex Duadecim Tabularum, the written code of laws of the Roman Republic from 455 B.C. as well as to the Magna Carta, signed in 1215, which provided in part that “No freeman shall be taken, or imprisoned, or disseized, or outlawed, or exiled, or in any way harmed—nor will we go upon or send upon him—save by the lawful judgment of his peers or by the law of the land.”

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and impartial tribunal’17 as well as the general idea of equality before the court. The European Convention on Human Rights notes the right to have witnesses and examine the opposing parties’ witnesses.18 An early discussion of this idea of the right to be heard occurred in the Salvador Commercial Co. Case (1902). The court noted the importance of due process and considered that the ‘opportunity to be heard’ was intrinsically part of that right.19 Disputes in which this right has not been respected have resulted in either annulment or the consideration as such.20 The opportunity to be heard includes both presentation of the witnesses as well as evidence. The tribunal in Germany v. Venezuela stated that ‘[i]n its wider and universal sense [evidence] embraces all means by which any alleged fact, the truth of which is submitted to examination, may be established or disproved.’21 Thus, this right to submit evidence is inextricably connected to the right of a fair trial. D Discretion of the Courts in Evidentiary Submissions International courts generally leave substantial discretion to the judges to determine when evidence can be submitted and how much weight should be given to the respective evidence.22 The icj has maintained that ’within the limits of its Statute and Rules, [the Court] has freedom in estimating the value of various elements of evidence, though it is clear that general principles of judicial procedure necessarily govern the determination of what can be regarded as proved.’23 The Iran-us Claims Tribunal consistently held that the parties had the responsibility of presenting evidence in order to prove

17

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21 22 23

Universal Declaration of Human Rights, Art. 10: “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.”; International Covenant on Civil and Political Rights, Art. 14. European Convention on Human Rights, Art. 6. U.S.F.R. (1902), p. 838, p. 871 as cited in Cheng, General Principles of Law as Applied by International Courts and Tribunals, 291. Cheng, General Principles of Law as Applied by International Courts and Tribunals, 291 et seq.; Umpire Cases, Granadine-United States Claims Commission (1857), questioning the regularity of the proceeding following failure for certain evidence to be considered. Germany v. Venezuela, Venezuelan Arbitrations, Hague Tribunal (1903), 622. Pauwelyn, Evidence, Proof and Persuasion in wto Dispute Settlement: Who Bears the Burden?, Journal of International Economic Law 1 (1998), 227–258, 230. icj, Case concerning Military and Paramilitary Activities in and against Nicaragua, Merits, Judgment of 27 June 1986, icj Reports at 40, para. 60 (1986).

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the claim.24 Tribunal Rules, Article 25, paras. 5–6 regulate the oral submission of evidence during the hearing and allows the tribunal to weigh the evidence that is presented.25 In wto law, Art. 11 dsu requires that the panel make an objective assessment of the facts before it. Art. 13 dsu provides that the panel has the ‘right to seek information and technical advice from any individual or body which it deems appropriate’. Article 13(2) specifically provides for the use of experts by the panel. However, rules instructing the panel on which evidence to include or exclude do not exist. The panel in Argentina-Footwear held that the rules of procedures of panels do not prohibit the practice of submitting additional evidence after the first hearing of the panel. Until the wto Members agree on different and more specific rules on this regard, our main concern is to ensure that ‘due process’ is respected and that all parties to a dispute are given all the opportunities to defend their position to the fullest extent possible.26 The presentation of evidence by the opposing party is a key aspect of the party’s good faith behavior in presentation of evidence.27 In this regard, the panel in Argentina-Footwear noted that [i]t is often said that the idea of peaceful settlement of disputes before international tribunals is largely based on the premise of co-operation of the litigating parties. In this context the most important result of the rule of col­laboration appears to be that the adversary is obligated to provide the tribunal with relevant documents which are in its sole possession. This obligation does not arise until the claimant has done its best to secure evidence and has actually produced some prima facie evidence in support of its case.28 There is a close linkage between parties’ good faith actions and the general right to a fair trial in the wto context. Thus, good faith often becomes a principle relied upon in the international context to ensure that the fair trial is preserved. 24

25 26 27

28

Islamic Republic of Iran v. United States, Case A/I5, Award No. 529-A15 (ii:A & ii:B)-FT, May 6, 1992, 28 Iran-U.S. Cl. Trib. Rep. 139 (1992). See also Howard Needles Tammen & Bergendoff v. Islamic Republic of Iran, Award No. 244-68-2, 8 11 Iran-U.S. Cl. Trib. Rep. 336 (1986); and Fluor Corp. v. Islamic Republic of Iran, Order of November 13, 1987, 18 Iran-U.S. Cl. Trib. Rep. 68 (1988). Marossi, The Necessity for Discovery of Evidence in Fact-Finding Process of International Tribunals, Journal of International Arbitration 26(4), 511–531 (2009), 512 et seq. Argentina-Footwear, Panel Report, para. 6.55. Pauwelyn, Evidence, Proof and Persuasion in wto Dispute Settlement: Who Bears the Burden?, Journal of International Economic Law 1 (1998), 234; see also Kazazi, Burden of Proof and Related Issues, A Study on Evidence Before International Tribunals (1996), 371–372. Para. 6.40.

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Evidence in Investment Arbitration

Because of the very openness and freedom involved in the submission of evidence, tribunals reach into the aforementioned broader principles to give legitimacy and merit to the respective decisions. This same reliance occurs in investment arbitration to achieve similar ends. The rules guiding investment arbitration implicitly ensure that parties have a fair trial. This right to a fair trial is not expressly provided for in investment arbitration conventions or treaties but has been recognized by tribunals.29 The fair trial as applied in the investment arbitration context includes a right to be heard as expressed in public international law, and is thus related to the right to present evidence and witnesses to ‘understand the truth of the matter at hand’.30 The requirement emerges in the broader aspects of the general provisions regarding annulment. Arbitral tribunals have applied this ground as a reason for dismissal, including inability to present relevant evidence.31 In particular, the Fraport Annulment Committee considered that ‘[i]f an arbitral tribunal fails to accord such a right [to submit evidence], then its award will be subject to annulment.’32 An award can be annulled, for example under the icsid Convention, where ‘there has been a serious departure from a fundamental rule of procedure’.33 Such warning creates substantial room for interpretation when few specific guidelines are available for how procedural fairness shall be 29

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Fraport v. Philippines, icsid Case No. arb/03/25, Annulment Proceeding, paras. 197–199; MINE V. Guinea, Decision on Annulment, 22 December 1989, 4 icsid Reports, para. 5.06 as cited in Fraport v. Philippines, Annulment Proceeding, para. 198; Cheng, General Principles of Law as Applied by International Courts and Tribunals, 295–299. Statute of the icj Art. 43 provides for the submission and presentation of evidence; see also Patrick Robinson, The Right to a Fair Trial in International Law, with Specific Reference to the Work of the icty, Berkeley Journal of International Law Publicist 2 (2009), 1–11, 2: ‘In modern times, they refer to the right to be heard and to defend oneself, the right to be subject to the rule of law, and the right to have one’s case adjudicated by an independent and impartial tribunal.’ Fraport v. Philippines, icsid Case No. arb/03/25, Annulment Proceeding, 23 December 2010. Fraport v. Philippines, icsid Case No. arb/03/25, Annulment Proceeding, 23 December 2010, para. 200. icsid Convention Art. 52(1)(d); see also UNCITRAL Art. 34(2)(a)(ii). Although not directly applicable in the investment arbitration context, with regard to international arbitration, the Art. V(1)(b) of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides that an award can be dismissed where a party was “unable to present his case.”

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achieved. The seriousness of annulment results in tribunals ensuring that such fundamental rules are followed. In the Fraport annulment decision, the tribunal also noted that The requirement that the parties be heard is undoubtedly accepted as a fundamental rule of procedure, a serious failure of which could merit annulment. It was expressly referred to as an example of such a rule by the framers of the icsid Convention and was accepted as such by both parties to the present annulment proceeding. The right to be heard has been recognised as a fundamental rule of procedure applicable to international arbitral proceedings generally. The lack of guidance, however, regarding these rules leads tribunals to consider standard rules of procedure in public international law. In this regard, tribunals frequently turn to the general idea of a fair trial and principle of good faith. As it has been considered in Fraport, basic rules as generally derived out of good faith are part of the essential rubric to be applied. Tribunals ensure a fair trial by generally relying on the principle of good faith. A The Rules Regulation of evidence is limited but detailed below with respect to icsid and the iba Rules. The language of relevant arbitral rules allow tribunals full discretion over what and how evidence is submitted. Notably, the icsid Arbitration Rules provide that tribunals make decisions based on evidence on a case-by-case basis. Article 34(1) provides that ‘[t]he Tribunal shall be the judge of the admissibility of any evidence adduced and its probative value.’34 In his commentary on the icsid Convention, Schreuer has indicated that in this article ‘[t]he tribunal has discretion in deciding on the relevance and admissibility of the evidence adduced by the parties and in exercising the power to summon further evidence and is not bound by the parties’ submission regarding the taking of evidence.’35 Evidence collection and submission has generally been standardized through the work of the International Bar Association (iba).36 The iba Rules on the Taking of Evidence in International Arbitration were first introduced in 34 35 36

icsid Rules, Article 34(1). Schreuer, The icsid Convention: A Commentary, 643. This attempt to standardize the rules, does not equate to uniformity in application. On this subject, see generally Pietrowski, Evidence in International Arbitration.

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1983 and were replaced in 1999 with a set of rules designed to create order in a system of relative disorder.37 New rules were again adopted in 2010.38 These rules have only soft law authority in the work of the international tribunals— the tribunals are not obliged to follow these rules. Often these rules of evidence are used in parallel with rules provided by the arbitral institution.39 Good faith has been expressly included in the updated 2010 iba Rules on the Taking of Evidence, but has not been defined.40 The Foreword of the Rules expressly states ‘[t]he Rules are designed to be used in conjunction with, and adopted together with, institutional, ad hoc or other rules or procedures governing international arbitrations.’ The Commentary on the 2010 Rules further states that the iba Rules are intended to fill the gaps left by the institutional rules of evidence.41 However, these rules have become the de facto code to be followed in this context, especially in the investment arbitration context where there is no parallel law of the seat to be followed or recognized by the tribunal.42 Some of the key features of this document include the power of the tribunal to determine which evidence to give the most consideration to: ‘The Arbitral Tribunal shall determine the admissibility, relevance, materiality and weight of evidence.’43 This is often a basic principle regarding the power that international arbitral tribunals’ possess. The document also promotes the idea of flexibility in the arbitral procedure generally.44 The Preamble of the Rules first acknowledges the good faith requirements for collection of evidence: 37

See generally Hanotiau, The Conduct of the Hearings, in Newman/Hill (eds), The Leading Arbitrators’ Guide to International Arbitration (2004), 369, 374; Strong/Dries, Witness Statements under the iba Rules of Evidence: What to Do about Hearsay?, 304–305; International Bar Association, available at . 38 Shterngel, The Revised iba Rules on the Taking of Evidence in International Arbitration: Focus on Document Production and Privilege, available at . 39 Strong/Dries, Witness Statements under the iba Rules of Evidence: What to Do about Hearsay?, 302. 40 See generally, Martinez-Fraga, Good Faith, Bad Faith, but Not Losing Faith: A Commentary on the 2010 iba Rules on the Taking of Evidence in International Arbitration, 387. 41 Commentary on the New iba Rules of Evidence, available at . 42 Lee, iba Rules on the Taking of Evidence in International Arbitration, Singapore International Arbitration Blog, 18 July 2012, available at . 43 2010 iba Rules of Evidence, Article 9(1). 44 Commentary on the New iba Rules on Evidence.

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‘ The taking of evidence shall be conducted on the principles that each Party shall act in good faith and be entitled to know, reasonably in advance of any Evidentiary Hearing or any fact or merits determination, the evidence on which the other Parties rely.’45 Therefore, submission, collection and presentation of evidence, as an essential element of the procedure of an arbitral proceeding, is often assessed with consideration of whether that evidence meets standards of good faith. Thus, even when respecting the soft law provisions of the iba Rules, tribunals are implicitly directed to recognize and apply principles of international law. Tribunals have applied the principle of good faith to these elements of investment proceedings as a means of ensuring the fair trial requirements are met. B The Cases: Applying the Good Faith Standard This good faith standard has been expressly considered by several investment panels. The edf v. Romania tribunal denied the admission of certain evidence submitted to prove that officials had requested a bribe. In assessing the collection of evidence, the tribunal noted that ‘there are good reasons to believe that those principles of good faith and procedural fairness have not been respected.’ The tribunal relied on the icj opinion in the Corfu Channel case as a basis for its decision on submitting evidence illegally obtained. Similarly, in the Methanex v. United States nafta arbitration applying the UNCITRAL Rules, the tribunal concluded that unlawful collection of evidence was contrary to the principle of good faith. In contrast, however, the tribunal did not make an express reference to the use of the principle in public international law. Nonetheless, the understanding applied by the tribunal closely reflected the meaning derived from icj decisions. 1 Methanex In the Methanex v. United States nafta arbitration applying the UNCITRAL Rules, the tribunal concluded that unlawful collection of evidence was contrary to the principle of good faith. Thus, the tribunal applied good faith in the international context as a means of recognizing behavior that would be criminal in the domestic context. In Methanex, the claimant made an attempt to collect evidence in the dumpsters of the office building of one of the lobbyist who had advocated for enactment of the law for environmental protection which eventually resulted in the losses for Methanex. The claimant collected 45 2010 iba Rules on the Taking of Evidence in International Arbitration, available at .

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this evidence to demonstrate the malign intent in the enactment of the law.46 Important in the consideration for the tribunal was that the claimant had entered the property of Regent International to acquire the documents. Such behavior was considered by the tribunal to be ‘wholly inappropriate.’47 ‘[T]he Tribunal decided that this documentation was procured by Methanex unlawfully; and that it would be wrong to allow Methanex to introduce this documentation into these proceedings in violation of a general duty of good faith imposed by the UNCITRAL Rules and, indeed, incumbent on all who participate in international arbitration, without which it cannot operate.’48 Thus, the tribunal maintained that ‘successive and multiple acts of trespass’ exceeded the scope of documents meeting the good faith requirement, and were consequently not considered by the tribunal in the proceeding. 2 edf v. Romania As another example, in edf v. Romania, evidence submitted to support the request of a bribe was denied admission. In assessing the collection of evidence, the tribunal noted that ‘there are good reasons to believe that those principles of good faith and procedural fairness have not been respected.’ In edf v. Romania evidence was collected by one party in a manner in which the tribunal considered exceeding standards of good faith. The claimant alleged that a bribe had been solicited by the state. edf claimed that the solicitation of the bribe, as requested by first the Prime Minister, then the State Secretary under the Prime Minister and the Chief of Cabinet, was in fact an act of state. The claimant denied agreeing to pay the bribe. Instead, they alleged that the cancellation of their contract for operating duty-free services in the airport and in-flight was directly linked to the refusal to pay the usd 2.5 million bribe as requested. The claimant alleged that this bribe solicitation was violation of the ‘fair and equitable treatment obligation owed to the claimant pursuant to the bit, as well as a violation of international public policy, and that ‘exercising a State’s discretion on the basis of corruption is a […] fundamental breach of transparency and legitimate expectations’.49 The claimant attempted to prove the authenticity of this allegation with oral testimony of one witness and by submitting an audio recording of a request for a bribe that took place between a minister and one of the representatives for the claimant’s company. The audiotape was allegedly not discovered by the claimant until shortly before the hearing was scheduled to take place at 46 47 48 49

Methanex, Part ii, Chapter G. Methanex, Part ii, Chapter 1, para. 59. Methanex, Part ii, Chapter 1, para. 58. edf v. Romania, para. 221.

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the World Bank facilities in Washington. The icsid panel was asked to consider whether this evidence could be submitted. The panel found that there was no ‘clear and convincing’ evidence that the bribe had in fact been solicited as alleged. The panel reasoned that because the allegations were against the highest officials in the Romania government, they would require a standard of ‘clear and convincing’ evidence. The panel held that ‘[t]he evidence before the tribunal in the instant case concerning the alleged solicitation of a bribe is far from being clear and convincing.’50 The tribunal held that the authenticity of the tape could not be established and the evidence was declared inadmissible.51 The tribunal made its decision not to include the audio recording into evidence on the fact that it was ‘not authenticated, [was] incomplete and [was] riddled with manipulations that rob it of all evidentiary value.’52 In assessing the collection of evidence, the tribunal noted that [g]ood faith and procedural fairness being among such principles, the Tribunal should refuse to admit evidence into the proceedings if, depending on the circumstances under which it was obtained and tendered to the other Party and the Tribunal, there are good reasons to believe that those principles of good faith and procedural fairness have not been respected.53 The tribunal concluded that the recording must have been completed with an on-the-body recorder, thus ‘the proffered audio was obtained illegally having been made secretly in violation of the fundamental right of privacy of the person recorded.’54 The Romanian Constitution in addition to Art. 12 of the Universal Declaration of Human Rights and Art. 8 of the European Convention on Human Rights, were sources cited for maintaining that a recording made without the knowledge of the speaker is illegal. The authenticity of the recording could not be established. Although the tribunal noted that there is no ‘icsid rule of “minimally acceptable evidence”’55 and that icsid Arbitration Rule 34(1) and iba Rule Article 9(1) provide that the arbitral tribunal may admit and give weight to evidence based on their discretion,56 fundamental rules of procedure require that evidence be authentic. Because there was no original recording submitted into evidence, the panel considered the authenticity of the reproduction based on expert evidence. 50 51 52 53 54 55 56

edf v. Romania, para. 221. edf v. Romania, para. 225; Procedural Order No. 3 dated Aug. 29, 2008. edf v. Romania, Procedural Order No. 3, para. 4. edf v. Romania, Procedural Order No. 3, para. 47. edf v. Romania, Procedural Order No. 3, para. 4. edf v. Romania, Procedural Order No. 3, para. 12. edf v. Romania, Procedural Order No. 3, para. 19.

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iv Discussion As a means of regulating what and how evidence is submitted, arbitrators will rely on the principle of good faith as understood by the icj. This cross-­reference acts as a grounding for the field of investment arbitration. As a relatively new field of dispute resolution in comparison to public international law, deriving authority and basis for decisions from public international law allows for a greater authority. This is particularly true in light of the lack of precedent in investment arbitration. As earlier decisions merely act as a reference, the guidance offered by a more developed field of law enables greater legitimacy for all decisions, but in particular, difficult decisions that had not been formerly approached in that context. Without this application of public international law, investment arbitration would not have the capacity to develop with the same strength. The system forces reliance on the principles arising out of public international law by the very language of the treaties and the conventions. This reliance not only grounds the system but also allows for respect to the transformations that occur within those principles over time. This in turn makes investment arbitration a form of dispute resolution more likely to endure. Questions remain, however, regarding how investment tribunals transform the interpretation of good faith for the purpose of rules of evidence specific to investment arbitration. Is there a transformation or manipulation of the interpretation that leaves decisions irrelevant in the field of public international law? Or, is there a basis for the cross-reference of understandings? Although there is a reliance and respect for the principles arising out of public international law, there is also a certain transformation that occurs in the application of the principle in another context. The laws being assessed, the parties, and the issues at hand are all of sufficient variance that a new understanding of the principles inevitably occurs. Nonetheless, as the concepts of the fair trial and good faith continue to develop in this context of investment arbitration, there is no imposition on such interpretations being further developed by international courts. There is a growing relevance of the interpretation of good faith in evidentiary matters by investment tribunals that could eventually result in the further consideration by other courts and tribunals. The basic elements regarding evidence are similar: high levels of discretion given to the tribunal and the basic right to be heard. Thus the level of subjectivity allowed by introducing the idea of good faith into evidence submission further advances these more general notions of justice.

chapter 22

Challenges of Investor-State Dispute Settlement Mechanism in ttip Jerzy Menkes and Magdalena Słok-Wódkowska Introduction Standards of State-State Dispute Settlement (ssds), and specifically Investor– State Dispute Settlement (isds), operated to protect investors against law abuses in those host countries that were not law-abiding ones. The protection was required both for investors’ property, and for host countries to attract investors. In the absence of any guarantee that ‘the general principles of law recognized by civilized nations’ shall be respected both aliens needed protection against a host country’s lawlessness and the host country—its citizens— against lawlessness consequences in the form of opportunities of economic development, attracting looters’ investors. Current arguments for a particular protection—referring to rights in a state of law—of investments has significantly decreased. Bilateral Investment Agreements (bits) are concluded between ‘states of law’, between states of investors’ origin and destination. Those states modify or resign from isds perceiving their faults rather than advantages. The European Union is a new actor in the scene of bits. Therefore it has to face all of the challenges related to it. This is especially visible on the occasion of concluding such demanding and controversial agreements as the Trans­ atlantic Trade and Investment Partnership (ttip). The aim of our chapter is to analyse and discuss challenges of isds in ttip. In the first part we present isds mechan­isms generally with its advantages and disadvantages. In the second part we analyse the eu legal competence, legal framework and current practice within the field of investments protection and isds in order to make some conclusions about possible ttip provisions. We also discuss the current state of negotiations and doubts related to a possible investment chapter of the ttip. i

Origins of Investor–State Dispute Settlement

One of the fundamental factors determining an economic decision of investors is assessment of risks connected to undertaking and running a business © koninklijke brill nv, leiden, ���� | doi 10.1163/9789004298712_023

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activity. Legal risks seem to be the most important. They are crucial for potential investors, as every foreigner has in the back of his mind the memory of legal discrimination against aliens. And, despite centuries having passed since ancient Rome split the law into ius civile and ius gentium or initiated institutions of proxeny and proxenos as an antidote to the lack of legal protection for ‘aliens’, the memory and concerns survived, as well as the specific approach. On the one hand, states consider the business activity of aliens beneficial for their own development. On the other hand, they are afraid of that presence and apply all sorts of restrictions.1 The restrictions are used within the whole trans-Atlantic area.2 In the us they are legitimate,3 and gained regulatory basis across Europe.4 Likewise, the state control of economic activities of aliens is well established.5 Still, this memory of the past creates grounds for fears and legal solutions that are designed to protect against the fulfilment of those fears (today) and deriving from the falsified image of the past, at its best—for those claiming the experience, reasons selective organization of facts. It is true, that old polis (the formula of ethnic nation communities rather than a Staatsvolk) were communities, by their substance oriented on backing up ‘biological communities’— based on distinguishing between a one of us / an alien, and therefore by their nature closed. That, however, did not imply in any case either a negative discrimination or a repressiveness towards aliens. Current connotations of the term ‘Ghetto’ refer automatically to Nazism but originally this institution often meant discrimination against aliens and religious freedom privilege. Foreign protection in the French formula was provided by the formula of “droit d’aubaine6” or, more elaborately, seigniors’ duty. Generally, however, referred to as the basis for protective regulations, discrimination against aliens in the past disregards cases of non-compliance. And yet the distant past provides for both Roman hospitium publicum agreements 1 See most controversial „Exon-Florio Amendment”. 2 See F.A. Mann, Reflection on a commercial law of nations. Brit. Y. B. Int’l L. 1957 Vol. 33, No 20, pp. 34–39, and Arbitration between Libya and Taxaco Overseas Petroleum Company and al. (top-co). Award of January 19, 1977. International Legal Materials 1978, No. 17, paragraphs 46–51. 3 See “Graham v. Richardson”. Supreme Court of the United States, 1971. 4 For example French act Carte de commerçant (1938). 5 Since 1789 legislation has restricted ownership of vessels of United States registry entitled to fly the American flag to American nationals. Land and mineral rights possessed by the federal government have generally been reserved for sale or lease to citizens. 6 See P. Sahlins, La nationalité avant la lettre. Les pratiques de naturalisation en France sous l’Ancien Régime. Annales, Histoire, Sciences Sociales 2000, Vol. 55, No 5, p. 1083.

Challenges of Investor-State Dispute Settlement Mechanism in ttip 365

and ‘isopolity’ of ancient Greece. Still, in the not so distant past, in particular not that distant in law, Article 41 of the English Magna Carta provides Libertatum (‘All merchants shall have safe and secure exit from England, and entry to England, with the right to tarry there and to move about as well by land as by water, for buying and selling by the ancient and right customs, quit from allevil tolls, except (in time of war) such merchants as are of the land at war with us. And if such are found in our land at the beginning of the war, they shall be deltained, without injury to their bodies or goods, until information be received by us, or by our chief justiciar, how the merchants of our land found in the land at war with us are treated; and if our men are safe there, the others shall be safe in our land.7’). While Article 42 of Magna Carta provides ‘It shall be lawful in future for any one (excepting always those imprisoned or outlawed in accordance with the law of the kingdom, and natives of any country at war with us, and merchants, who shall be treated as is above provided) to leave our kingdom and to return, safe and secure by land and water, except for a short period in time of war, on grounds of public policy—reserving always the allegiance due to us.’ That can be perceived as a contemporary desired law priority. The culmination of this regulatory framework—non-discrimination—is Article 46. 2 of the Haque Convention iv on Land Warfare, which formulates an explicit prohibition against confiscation of private property. However, if the past was so well-regulated, why do we assess it so badly? Truth is, of course, complex. The experience of the past provides not only examples of discrimination, but also past restrictions in relation to foreign testamentary and hereditary capacity (escheatage) under Wildfangrecht in Germany and the Netherlands in keurmede.8 The past means also property expropriation of foreigners (as well as own citizens) after the revolution in Russia in 1917 (‘Lena Goldfields Arbitration’ is a symbol of power of a threat rather than the power of law9). The past, justifying the sense of danger of proprietors, is not forgotten by their addressees or cancelled by their developers’ (relatively new) ideas and postulates of the nieo (New International Economic Order) and the practice referencing to them.10 7 8 9 10

http://www.orbilat.com/Languages/Latin/Texts/06_Medieval_period/Legal_Documents/ Magna_Carta.html. See R. Arnold, Aliens. (in:) R. Bernhardt (Dir.), Encyclopedia of Public International Law. Elsevier Science Publishers b.v. 1985, vol. 8 p. 6. See V.V. Veeder, The Lena Goldfields Arbitration: The Historical Roots of Three Ideas. International and Comparative Law Quarterly 1998, Vol. 47, pp. 747–792. See J. Menkes, Nowy Międzynarodowy Ład Ekonomicznych. Studium prawnomiędzynarodowe. Uniwersytet Śląski 1983, p. 158–168.

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It is possible to conclude, however, that different treatment—discrimination against aliens concerns in international practice the aliens, rather not their property and collective efforts to protect them are focused on less and less frequent risks (relatively defying e.g. protection of migrant workers’ rights). Paradoxically, a state may grant diplomatic protection solely against acts directly against partnership rights and not legal persons as such.11 After World War ii the practice to protect foreign ownership with international law regulations was consistently enhanced. Hence, the need for protection and the search for its instruments by foreigners. Still today the conviction is common that a fair process is warranted by the judges of the accused vicinage. (“Section 8. That in all capital or criminal prosecutions a man has a right to demand the cause and nature of his accusation, to be confronted with the accusers and witnesses, to call for evidence in his favor, and to a speedy trial by an impartial jury of twelve men of his vicinage, without whose unanimous consent he cannot be found guilty; nor can he be compelled to give evidence against himself; that no man be deprived of his liberty except by the law of the land or the judgment of his peers. Section 11. That in controversies respecting property, and in suits between man and man, the ancient trial by jury is preferable to any other and ought to be held sacred.” Virginia Declaration of Rights and “Sixth Amendment. In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favour, and to have the Assistance of Counsel for his defence.” the United States Constitution). They are procedural warranties of the property right recognized to be a fundamental human right12 (“Article 17. Property being an inviolable and sacred right, no one can be deprived of it, unless demanded by public necessity, legally constituted, explicitly demands it, and under the condition of a just and prior indemnity.” Declaration of the Rights of Man and of the Citizen, Déclaration des droits de l’homme et du citoyen and “Article 17. (1) Everyone has the right to own property alone as well as in association with others. (2) No-one shall be arbitrarily deprived of his property.” Universal Declaration of Human Rights).13 Thus, everyone fears a trial before the “foreign court” run by a “foreign law”. 11 12 13

See I. Seidl-Hohenveldern, Aliens, Property. (in:) R. Bernhardt (Dir.), Encyclopedia of Public International Law. Elsevier Science Publishers b.v. 1985, vol. 8 p. 20. See L. Henkin, The Age of Rights. Columbia University Press 1990. See J. Menkes, Protection of Foreign Investment Property under International Law. Polish Quarterly of International Affaires 2000, No 4, s. 63–85.

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ii

Investors and their Rights Protection

The indicated concerns of investors are real. Despite the fact that legal standards of risk protection constitute the hard core of International Human Rights as well as public international law.14 The concerns are also common among those whose “host state” is located in the Trans-Atlantic legal area. Foreign investors (from the “home state”) fear discriminatory treatment in the “host state”.15 Those concerns have not been met by the practice of diplomatic protection16—protecting the rights of investors in the legal regime of the “State-State-Dispute-Settlement” (ssds).17 Despite practice, in which there were abuses of the right of diplomatic protection of citizens abroad, in Latin America, among others, victims of abuse are not alien—but the host State. In response to specific cases the Calvo doctrine formulated a standard of equal treatment as protection against de facto discrimination against nationals of the host country18 which soon became the standard within the Treaty of Commerce and Navigation concluded that Latin American States at the Ilma Cogress ii supported at numerous Inter-American conferences. Yet similarly, the lack of acceptance for law abuse and discrimination against citizens and the host country, that resulted in the Calvo doctrine, makes an abuse—deprivation of investors right to diplomatic protection of the host country by their own country (Calvo clause) unacceptable. On the contrary, investors’ expectations accompanied by the law evolved towards investors protection within the legal framework of bits19 that, 14

15 16

17 18 19

See F.A. Mann, Reflection on a commercial law of nations. Brit. Y. B. Int’l L. 1957 Vol. 33, No 20, pp. 34–39, and Arbitration between Libya and Taxaco Overseas Petroleum Company and al. (top-co). Award of January 19, 1977. International Legal Materials 1978, No. 17, paragraphs 46–51. See K. Yannaca-Small, Improving the System of Investor-State Dispute Settlement. oecd Working Papers on International Investment 2006/01 http://dx.doi.org/10.1787/631230863687. See, Mavromaatis Palestine Concessions (Jurisdiction)”. p.c.i.j. Series A, No. 2, pp. 11–12 and Article 1 of the Draft Articles on Diplomatic Protection “Definition and scope. For the purposes of the present draft articles, diplomatic protection consists of the invocation by a State, through diplomatic action or other means of peaceful settlement, of the responsibility of another State for an injury caused by an internationally wrongful act of that State to a natural or legal person that is a national of the former State with a view to the implementation of such responsibility.” Draft Articles on Diplomatic Protection 2006. Yearbook of the International Law Commission, 2006, vol. ii, Part Two. Executed in the regime of Treaties of Friedenship, Commerce and Navigation (fcn), The first fcn was concluded with France in 1778 and till the end of 1960s in bits regime. C. Calvo, Le droit international théorique et pratique: précédé d’un exposé historique des progrès de la science du droit des gens. Paris 1896, vol. 3, p. 142, vol. 6, p. 231. Initiated by 1958 bit between Germany and Pakistan.

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predominantly, allows settlement of investor v. state disputes before the arbitral tribunal. This process was initiated in 1987 when a Hong Kong investor used a uk bit against the government of Sri Lanka20. Such a regime of dispute settlement is provided both by new generation bits21 and international trade treaties (e.g. nafta) as well as international investment agreements (e.g. the Energy Charter Treaty). Most bits guarantee investors “fair and equitable treatment”, “full protection and security” and “ free transfer of means” as well as access to isds in disputes against the “host state”. Most disputes are settled under the International Convention for the Settlement of Investment Disputes and Chapter 11 of nafta. Foreign investors do not need to make use of diplomatic protection of the “Home State”, being able to protect their rights within the regime of the investor-state dispute settlement.22 And they make use of that way. The number of disputes pending predominantly against the eu states i.e. the Czech Republic, Spain, Hungary and Slovakia is steadily growing and the protection of investors benefit not only investors from the transatlantic space, but also from Turkey or Jordan.23 New regulations, however, are being criticized. isds is often considered unilaterally favourable for foreign investors. It is also considered less favourable for a host state restricting, among others, its capacity to protect public health, natural environment or human rights. Recognizing that isds as a model solution will survive (as indicated by both bilateral and multilateral treaty practice) balancing legitimate interests of the parties i.e. foreign investors and a host state poses a challenge. The pendulum must be balanced, the dispute settlement regime must likewise protect the interests of the society and its institutions. Otherwise, the Venezuela 2012 termination of the agreement of the International Centre for Settlement of Investment Disputes of the World Bank which is not a single phenomenon, whose assessment cannot be limited to considering it a manifestation of the political aberration of the regime24 and

20

See S. Singh, S. Sharma, Investor-State Dispute Settlement Mechanism: The Quest for a Workable Roadmap. Utrecht Journal of International and European Law 2013, Vol. 29, Issue 76. 21 See A.F. Lowenfeld, International Economic Law. Oxford University Press 2nd ed., pp. 570–2. 22 See Ch. Tietje, E. Siporski, The evolution of investment protection based on public international law treaties: lesson to be learned. (in:) A.K. Bjorklund, A. Reinisch (ed.), International Investment Law and Soft Law. Edward Elgar PL 2012, p. 237. 23 See Recent Developments in Investor-State Dispute Settlement (ISDS). unctad No. 1 April 2014 http://unctad.org/en/PublicationsLibrary/webdiaepcb2014d3_en.pdf. 24 It should be noticed that states felt threatened, also in the diplomatic protection regime, as evidenced by Calvo doctrine. Art. 27 of Mexican constitution proves that.

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may herald a steady diverging from isds.25 The icsid regime faces many challenges. One of them is related to its subjective status; on the one hand, there are (still) 158 countries who are parties to the Convention, despite the given notices. On the other hand, however, the eu is not a party to icsid (Convention on the Settlement of Investment Disputes between States and Nationals of Other States), and that may result in the atrophy of the regime. Investor versus State dispute settlements must be fair. To achieve this, among other things, transparency of the proceedings is applied (see Article 29 of us model-bit 201226)27 i.e. rejecting confidential in camera proceedings and 25

26

See Australian government position from 2011 r. When trade agreements threaten sovereignty: Australia beware. The Conversation 14 November 2013 http://theconversation .com/when-trade-agreements-threaten-sovereignty-australia-beware-18419. „Article 29: Transparency of Arbitral Proceedings 1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the following documents, promptly transmit them to the non-disputing Party and make them available to the public: (a) the notice of intent; (b) the notice of arbitration; (c) pleadings, memorials, and briefs submitted to the tribunal by a disputing party and any written submissions submitted pursuant to Article 28(2) [Non-Disputing Party submissions] and (3) [Amicus Submissions] and Article 33 [Consolidation]; (d) minutes or transcripts of hearings of the tribunal, where available; and (e) orders, awards, and decisions of the tribunal. 2. The tribunal shall conduct hearings open to the public and shall determine, in consultation with the disputing parties, the appropriate logistical arrangements. However, any disputing party that intends to use information designated as protected information in a hearing shall so advise the tribunal. The tribunal shall make appropriate arrangements to protect the information from disclosure. 3. Nothing in this Section requires a respondent to disclose protected information or to furnish or allow access to information that it may withhold in accordance with Article 18 [Essential Security Article] or Article 19 [Disclosure of Information Article]. 4. Any protected information that is submitted to the tribunal shall be protected from disclosure in accordance with the following procedures: (a) Subject to subparagraph (d), neither the disputing parties nor the tribunal shall disclose to the non-disputing Party or to the public any protected information where the disputing party that provided the information clearly designates it in accordance with subparagraph (b); (b) Any disputing party claiming that certain information constitutes protected information shall clearly designate the information at the time it is submitted to the tribunal; (c) A disputing party shall, at the time it submits a document containing information claimed to be protected information, submit a redacted version of the document that does not contain the information. Only the redacted version shall be provided to the non-disputing Party and made public in accordance with paragraph 1; and

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instituting the possibility to appeal the decision.28 Those demands mean departing from traditional commercial arbitration rules. Meeting them means the evolution of the law, proving the ability to react to challenges. Another not appreciated problem of the isds regime is discrimination of a national investor relative to a foreign one. The national investor does not have access to isds, thus one of the effects may be the investors exodus abroad. iii

Division of Competences in the eu and its Consequences for an isds

In a well-established world of bilateral investments treaties the eu is a new actor, which is on one hand trying to create its own rules and address problems related to isds, on the other is itself struggling with its own problems arising from the mere fact that it is an international organization, created by different states with different needs and traditions related to bits. The eu (formerly European Economic Community—eec and European Community—ec) was always competent to conclude agreements related to trade aspects of investments. These were a part of a European trade policy, usually qualified as an exclusive competence of the eec/ec. Competence to conclude agreements related to commercial presence, even though there were no doubts already at that time, was directly confirmed in the European Court

27

28

(d) The tribunal shall decide any objection regarding the designation of information claimed to be protected information. If the tribunal determines that such information was not properly designated, the disputing party that submitted the information may (i) withdraw all or part of its submission containing such information, or (ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the tribunal’s determination and subparagraph (c). In either case, the other disputing party shall, whenever necessary, resubmit complete and redacted documents which either remove the information withdrawn under (i) by the disputing party that first submitted the information or redesignate the information consistent with the designation under (ii) of the disputing party that first submitted the information. 5. Nothing in this Section requires a respondent to withhold from the public information required to be disclosed by its laws.” http://www.ustr.gov/sites/default/files/BIT%20 text%20for%20ACIEP%20Meeting.pdf. More in Transparency and Third Party Participation in Investor-State Dispute Settlement Procedures. oecd Working Papers on International Investment, 2005/01, oecd Publishing. http://dx.doi.org/10.1787/524613550768. D.A. Gantz, An Appellate Mechanism for Review of Arbitral Decisions in Investor—State Disputes: Prospects and Challenges. (September 8, 2005). bepress Legal Series. bepress Legal Series.Working Paper 703. http://law.bepress.com/expresso/eps/703.

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of Justice (ecj) Advisory Opinion 1/9429 concerning the ec membership in the wto. The ecj though confirmed also that in relation to trade in services as well as intellectual property rights such a competence is not exclusive. It resulted in the fact that trade agreements, which include provisions related to trade in services, so-called Economic Integration Agreements (eia) have been concluded as so-called mixed agreements, together by the eu and its member states. Such a conclusion has been made by the ecj based on the previous wording of the Treaty provision—Article 11030 then replaced by an Article 13331 of the Treaty establishing the European Community. This article did not refer directly to investment nor to its protection. The wording of Article 133 led to the following practice: The eu covered some aspects of investments in its trade agreements, such as the right to establishment of commercial presence or free movement of capital. Member states retained their competence in the field of promotion and protection of investments. Therefore, member states have concluded bilateral investment agreements (bits) with third countries. In their bit they were fully allowed to design isds systems adjusted to their needs. They were also fully responsible for conducting disputes and arbitrations as well as enforcement of judgments. A new Article 207 par 1 of the Treaty on the Functioning of the European Union (tfeu), which replaced Article 133 in the Treaty of Lisbon, was heavily changed. According to Article 207, the common commercial policy is “based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies”. New wording refers directly to all aspects of the wto law as well as to foreign direct investment without clarifying or narrowing the scope of coverage within this field. 29 30

31

ecr [1994], p. I-5267. Article 110: „By establishing a customs union between themselves Member States aim to contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and the lowering of customs barriers. The common commercial policy shall take into account the favourable effect which the abolition of customs duties between Member States may have on the increase in the competitive strength of undertakings in those States.” o.j. c 224, 31.08.1992 p. 1–79. Article 133(1) „The common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies.”, o.j. c 325, 24.12.2002, p. 90.

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Such wording implies that the eu has exclusive competence to conclude international agreements related to all aspects of investments—the possibility of investing in the eu, as well as promotion and protection of investment, as a common commercial policy is expressly qualified as an exclusive competence of the eu in Article 3 (1e) tfeu. As a result, member states formally ceased to have a competence to conclude bits unless they are “empowered by the Union or for the implementation of Union acts” (Article 2 (1) tfeu). Because of the change of competence, there was a need to determine the future and status of numerous bits between the eu member states and third countries. In July 2010 the Commission presented its communication “Towards a comprehensive European international investment policy” in which the Commission presented its future actions within this field. It also explained the reasons why the Commission thinks the eu bits can be better to protect and promote investments—they should be more modern, and provide a higher level of protection for bits concluded by the eu member states throughout the past fifty years. The Commission revealed that it is not going to prepare the eu model bit, and is going to negotiate a bit with any third country separately in order to conclude an agreement possibly best suited to a partner and specific negotiating context. Already in that communication the Commission explained that its priority in the short term is negotiating investment agreements as a part of comprehensive trade agreements. Potential agreements mentioned were eu-Canada, eu-India as well as eu-Singapore and eu-MERCOSUR32. The ttip could not have been mentioned as negotiations started in 2013. It was though quite clear that the Commission intends to include investments chapters in all so-called competitiveness-driven free trade agreements. In the Communication the Commission addressed also the problem of isds in its future investment agreements. Although it was mentioned that the Commission intended to include isds chapters into its investment agreements, it also mentioned possible challenges of the eu being a party of a dispute. As Commission stated: “Current structures are to some extent ill-adapted to the advent of the Union.”33 as systems of resolution of investment disputes are open for states and not for international organizations. The Commission indicated also main challenges of its future isds systems: the eu isds should be transparent, the jurisdiction should be consistent and predictable (through establishing quasi-permanent arbitrators), there should be established set of rules (the eu would like to accede the Convention on the Settlement of 32 33

com(2010) 343, p. 6. Ibidem, p. 10.

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Investment Disputes between States and Nationals of Other States - icsid Convention), although it will require changes in the Convention. In 2010 the Commission presented also a proposal for binding rules solving the problem of already existing bits—the proposal for a regulation, which after two years of negotiations entered into force in January 2013. Regulation (eu) No 1219/2012 of the European Parliament and the Council of 12 December 2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries provides, that bits concluded by member states and notified in accordance with the Regulation may be maintained in force (Article 3). A key element here is a notification process, which covers all bits concluded by a member state with a third country both before and after entry into force of the Lisbon Treaty and require providing the Commission with detailed information on a bit as well as an assessment procedure pursued by the Commission. According to Chapter iii of the Regulation, member states of the eu are authorised to conclude new and modify existing bits, unless this is inconsistent with the eu law, principles or plans to open negotiations with the same partners on the eu level. A member states, which intends to open negotiations should be authorised by the Commission. The chapter is crucial for the current landscape of the eu investment agreements as it effectively changed the division of competence between the eu and its member states. The competence remained de facto shared, although the eu gained a solid mandate for negotiating its own bits on the eu level. The second legal instrument, crucial for the isds, is a Regulation (eu) No 912/2014 of the European Parliament and of the Council establishing a framework for managing financial responsibility linked to investor -to -state dispute settlement tribunals established by international agreements to which the European Union is party.34 The aim of the Regulation is to divide competences between the eu and its member states in case of a dispute arising on the basis of an investment agreement concluded by the eu or by the eu and its member states as one party (mixed agreement). bits concluded solely by the eu member states were excluded from the scope of the Regulation. The Regulation is ­crucial for the isds, as it is a prerequisite for concluding the eu investment agreement including an isds mechanism. The Regulation is based on a principle that the eu is responsible for bearing the financial responsibility arising from treatment afforded by the institutions, bodies or agencies of the eu. It is also a respondent if the dispute concerns such treatment. If the treatment is afforded by a member state, it is a member state who is a respondent and is responsible for bearing financial 34

oj L 257, 28.8.2014, p. 121.

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responsibility. There are some exceptions, precisely described in Article 14 of the Regulation. There are also provisions concerning cooperation and exchange of information between the eu and member states during arbitration proceedings. iv

isds in the Transatlantic Trade and Investment Partnership

ttip is supposed to be one of the most ambitious agreements. Concluded by both parties, it is supposed to cover not only trade liberalization but also investments and their protection. A potential isds chapter was not excluded, but the eu conditioned it on the results of negotiations. Already in the negotiations mandate35 adopted by the eu Council in June 2013, there were set conditions, which need to be met by the future isds in order to be agreed on by the eu. It was also made clear that the isds will be applicable only to the investment protection chapter, excluding chapters related to inter alia market access. Although the main challenges of the eu-us isds were known by the time negotiations started,36 under pressure of a broad public negotiations within this field were suspended by the eu in January 2013. The European Commission announced its intention to hold public consultations on the issue. Public online consultation began in March and became an opportunity for the Commission to address the aims and boundaries of isds.37 The majority of the eu objectives, which are going to pushed ahead during negotiations, were already mentioned in the Communication of 2010. First of all the Commission intends to limit the scope and omit nebulous wording of clauses related to a right to regulate, indirect expropriation or fet. According to the Commission, these provisions are often misinterpreted or even abused by investors, which might possibly be supported by arbitrators. This thesis seems to be an answer to fears of European public opinion. It was envisaged for example in the analysis prepared for the European Parliament,38 35

Restricted document, Directives for negotiations on the Transatlantic Trade and Investment Partnership between the European Union and the United States of America, 17 June 2013, http://eu-secretdeals.info/upload/TTIP-mandate_M-Schaake_website.pdf. 36 See: Fact Sheet: Investment Protection and Investor-to-State Dispute Settlement in eu ­agreements, November 2013, http://trade.ec.europa.eu/doclib/docs/2013/november/tradoc_151916.pdf. 37 See: Public consultation on modalities for investment protection and isds in ttip, http:// trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152280.pdf. 38 Legal Implications of ttip for the Acquis Communautaire in envi Relevant Sectors, Policy  Department A: Economic and Scientific Policy of the European Parliament, http:// www.europarl.europa.eu/RegData/etudes/etudes/join/2013/507492/IPOL-ENVI_ET(2013) 507492_EN.pdf.

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where such cases like the infamous Metalclad39 case were invoked. Also a Vattenfall v. Germany40 case, which has not been finished yet, was mentioned. The problem with these provisions relates to the fact that their vagueness is essential for their effectiveness. The aim of these provisions, especially the fet standard, is to cover situations that are not predictable at the time of conclusion of a treaty. What can be done (and what the Commission claims to do) is to narrow the scope of application of these clauses. It is also possible to exclude from investment protection system situations when a disadvantageous decision was made by a state in the normal exercise of their regulatory powers and adopted in a non-discriminatory manner, in general purpose. These criteria were for example mentioned in the Saluka41 case. Also many procedural improvements are going to be written into the isds mechanism in the ttip (as well as other eu investment treaties). European Commission intends to limit the possibility of bringing several claims to different tribunals. It is going to achieve it by mandatory dismissal of such cases by tribunals. The Commission did not reveal any details on how it is going to persuade tribunals other than its ecj or arbitration tribunals established on a basis of ttip to act like this. Procedures are to be more transparent, with public access to documents. Such a solution, although very positive from the academia point of view, might not be equally welcomed by investors. Arbitrators are going to be chosen only from a list, mutually agreed by the eu and the us, in order to prevent conflicts of interest. Such a solution was already agreed in the eu-Canada agreement and do not seem to be controversial. Already at the beginning of negotiations it was proposed to create an appellation mechanism applicable to isds. The Commission supposedly would like to create a mechanism similar to the one functioning in the wto legal system. No further details have been reveal and such a declaration gives more questions than answers: Whether such an appellate body is going to be created especially to resolve disputes arising under ttip or it is going to be more general? If the eu intends to accede icsid Convention, how it is going be written in the system? What rules could be used in such an appellation mechanism? 39

Metalclad Corporation v. The United Mexican States, icsid case No. ARB(AF)/97/1, Award from 30.08.2000. 40 Vattenfall ii case, where Germany were sued for phasing out nuclear plants in 2011. Documents from the procedeengs are not public accessible. An overview of the case: N. Bernasconi-Osterwalder, R. Hoffmann, The German Nuclear Phase-Out Put to the Test in International Investment Arbitration? Background to the new dispute, Vattenfall v. Germany (ii), http://www.iisd.org/pdf/2012/german_nuclear_phase_out.pdf. 41 Saluka Investments b.v. vs. The Czech Republic, unicitral pca case, Partial award from 17.03.2006, http://www.pca-cpa.org/showpage.asp?pag_id=1149, par. 155.

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Public consultations ended in July 2014. No report has been presented yet. The Commission published only general statistics. It got nearly 150,000 answers. Surprisingly, majority of them came from individuals and only 569 from organ­ izations, mainly non-governmental organizations. Overwhelming majority of answers came from three capital-exporting states: United Kingdom (more then 52,000), Austria and Germany (over 32,000 of responses each). There were many capital-importing states with only a few answers. The Commission is now analyzing the responses and announced publication of the outcome at the beginning of 2015. Although with a change of the eu Trade Commissioner on 1 November, the Commission admitted that a better dialogue with stakeholders and European societies is needed, no particular steps has been taken within isds negotiations. At the same time, though, a few Member States expressed its opposition to a whole idea of a possibility of sewing eu governments by American (as well we Canadian on the basis of ceta) companies. Among these voices the strongest were German and French. German Minister of Economics Sigmar Gabriel, stating in his letter (of 26 March 2014) to the eu Trade Commissioner Karel de Gucht, that “from the perspective of the [German] federal government, the United States and Germany already have sufficient legal protection in the national courts”42. On the other hand, it is worth to mention, that the Germen government eventually admitted that it will not oppose the isds in both ceta and ttip43. In turn, the French Senate and National Assembly issued an opinion preceded by a report, in which they expressed strong opposition against isds. It was based mainly on a lack of transparence in negotiations, but above all—on a possible limitations to the right to regulate by a state, which is probably the strongest objections of developed states towards isds. Other challenges related to the isds in the ttip are equally important in every bit between developed states and can be sum up as follows: the first objection is “unpredictability of judgments”. Arbitrators settle differently the same or similar (as to the merits) cases. This difference infringes the legal predictability, which is the essence of rules of law. Th second objection is lack of transparency. Agreements of a new type and the demands of law change that situation. To elaborate on this issue, General Assembly Resolution no. 68/109 on 16 December 2013 should be

42 43

eu drills into corporate protection clause in us trade deal, EUObserver, 27.03.14, http:// euobserver.com/news/123654 [access: 20.12.2014]. See: Sigmar Gabriel: ‘Germany will approve ceta’, EurActive, http://www.euractiv.com/ sections/trade-society/sigmar-gabriel-germany-will-approve-ceta-310416 [access: 20.12.2014].

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recalled44. Thirdly, there are doubts as to the independence of arbitrators. The allegations against arbitrators were not groundless, as was indirectly proved by isds unicitral’s 2013 supplementing with the code of arbitrators ethics. All these issues were mentioned in the European Commission’s documents, which intends to deal with them in newly negotiated investment agreements. v

Current Practice of the eu in the isds

Currently, Article 207 tfeu, Regulation No. 1219/2012 and recently adopted Regulation No. 912/2014 form a legal framework for future investment agreements concluded by the eu. There is no model bit provided by the Commis­ sion and practice within this field is very scarce. Moreover, as the Commission claimed in its Communication45 it is not going to create any. Therefore, the only source of some presumptions related to the isds in the ttip is current scarce practice. There are only two agreements, claimed to be negotiated only recently, that cover investment protection and isds—an investment chapter including isds in the Comprehensive Economic and Trade Agreement (ceta)46 and a relevant, separately negotiated investment chapter of the euSingapore Free Trade Agreement47. In both of them the Commission tried to address some fears of member states as well as most criticised elements of the isds. Especially ceta is seen as a lightweight ttip and its provisions are widely commented on as a possible solutions for the future ttip agreement. In both agreements the Commission tried to cope with the most controversial issues related to isds mechanisms. On the one hand, it made efforts to limit the margin of appreciation by the judges by clarifying the text itself and making it less nebulous. As quite similar solutions were used both in the eu-­Singapore and ceta, it is probable that we can expect them in the ttip as well. 44

45 46 47

ga recognized the need for „…Recognizing the need for provisions on transparency in the settlement of such treaty-based investor-State disputes to take account of the public interest involved in such arbitrations, Believing that rules on transparency in treaty-based investor-State arbitration would contribute significantly to the establishment of a harmonized legal framework for a fair and efficient settlement of international investment disputes, increase transparency and accountability and promote good governance.” United Nations Commission on International Trade Law Rules on Transparency in Treaty-based Investor-State Arbitration and Arbitration Rules (as revised in 2010, with new article 1, paragraph 4, as adopted in 2013), A/RES/68/109. com(2010) 343, op. cit., p. 6. Final text accesible at: http://ec.europa.eu/trade/policy/in-focus/ceta/ [access: 18.12.2014.] Text of the Agreement is available at http://trade.ec.europa.eu/doclib/docs/2014/october/ tradoc_152844.pdf [access 28.12.2014].

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One of achievements that has been mostly endorsed by the Commission itself is more precise wording of the fair and equitable treatment (fet) clause present in both negotiated agreements. Wording of both fet clauses is very similar and it is combined with a full protection and security standard (which is quite common also in other bits). The most important part, though, is a definition of the fet standard as a behavior related to (a) denial of justice in criminal, civil or administrative proceedings; (b) fundamental breach of due process, (c) manifest arbitrariness;48 (d) harrassment, coercion, abuse of power or similar bad faith conduct.49 The ceta definition covers also “targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief”. On the other hand, the eu-Singapore Agreement refers to “a breach of the legitimate expectations of an investor arising from specific or unambiguous representations from a Party so as to induce the investment and which are reasonably relied upon by the investor”, which is only generally stated in the ceta. Hence, both catalogues are partly open, as they can be supplemented by mutually agreed situations and premises. The aim of the clarifications of the fet is to diminish a risk of being challenged in the investor-state arbitration. The very same objective was an incentive to add clarification to the second element of investment agreements mostly criticized by developed states—too broad understanding of the notion of indirect expropriation. In both agreements there were annexes added, in which parties expresis verbis excluded measures that are “designed and applied to protect legitimate public policy objectives such as public health, safety and the environment, do not constitute indirect expropriation” unless they appear to be manifestly excessive or discriminatory. In both cases (fet and indirect expropriation) the solution seems to be reasonable as long as it is not misread by arbitrators. Therefore the eu Commission worked on more strict rules of isds proceedings. Firstly, there are some limitations on a subjective scope of isds in both agreements. It is only accessible to companies, which really operate in a host state. To build higher confidence in arbitrators, they can be chosen only from the list agreed by both parties. In both agreements there are established codes of conducts for the arbitrator. Finally, there is a visible emphasis on transparency of the proceedings, nonetheless, they are stronger in the ceta. With the exception of confidential or protected information, all the documents should be made available to the public. Hearings should be also open to the public. 48 49

In the eu-Singapore Agreement it is “[m]anifestly arbitrary conduct”, which seems to be a little bit narrower. The wording comes from the eu-Singapore agreement, while ceta refers to “Abusive treatment of investors, such as coercion, duress and harassment”.

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Amicus curiae briefs should be accepted according to both ceta and the eu—Singapore. vi

Preliminary Conclusion

isds, created as a specific value legal protection tool, is increasingly the tool to destroy other values, in the catalogue of social values ranked on a par with property. This is not surprising, as duration and costs of the proceedings are hardly acceptable in such cases as Chevron Corporation and Texaco Petroleum Corporation v. The Republic of Ecuador while the case costs, especifically those of Hulley Enterprises Limited (Cyprus) v. The Russian Federation dramatically exceeded the acceptable standard.50 Similar doubts arise with the suspicion that for some lawyers the International Court of Justice is a springboard to an investment arbitration carreer.51 It seems that a bright perspective for isds comes with specifying—setting standards for its rules while simultaneously maintaining the current situation of isds’s insufficient regulations that prevent bits lowering standards. Thus, isds’s future seems not so much gloomy as difficult to predict. The eu seems to make efforts to create some new standards that are designed to save the future of bits and isds. Both ceta and the eu–Singapore agreements address some of the biggest challenges related to the isds. Clarification of the most nebulous and over-used clauses as well as setting standards for proceeding are steps in the right direction. The ttip will be probably the most import of these steps, as it may settle a future standard of isds. It will probably also be the most difficult investment treaty to negotiate, taking into account the reluctance of European states and societies. Therefore the outcome of public consultation will be a key element in the nearest future. In conclusion, social relations associated with the law in action may not be similar to the situation in a restaurant in which subsequent stakeholders using (unilaterally) the menu create à la carte dishes for all, defying both preferences and habits of others. The functioning of law obeying societies requires on the one hand regulatory stability and predictability i.e. stability of decisions based on them, on the other hand, equity in weighing and taking account of interests. 50

51

„ORDERS Respondent to pay to Claimant Hulley Enterprises Limited damages in the amount of usd 39,971,834,360”, compensation limited to 70, 5%. http://italaw.com/sites/ default/files/case-documents/italaw3278.pdf. The tribunal composition in the case Hulley Enterprises Limited (Cyprus) v. The Russian Federation: Yves Fortier—President, Dr. Charles Poncet and Judge Stephen M. Schwebel.

Part 5 International Commercial Arbitration

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chapter 23

The Confluence of Transnational Rules and National Directives as the Legal Framework of Transnational Arbitration Luís de Lima Pinheiro Introduction i. Transnational arbitration is, in a broad sense, every arbitration that gives rise to problems of determination of its legal framework.1 By legal framework of arbitration is understood the set of standards (rules and principles) primarily applicable by an arbitral tribunal. The legal framework of the arbitration comprises the standards applicable to all the issues, either procedural or substantive, of the arbitration process, namely the validity of the arbitration agreement, the constitution, jurisdiction and operation of the arbitral tribunal, the determination of the substantive applicable law and the prerequisites of the arbitral award. These standards can be either “substantive” (material) or “conflictual”, i.e., they may either directly regulate the arbitration or refer that regulation to another normative body.2 For example, Art. 52(1) and (2) of the Portuguese Arbitration Act (lav) contains the choice of law rule on the determination of the law applicable to merits in the arbitrations in which interests of international business are at stake (transnational arbitration in narrow sense—Art. 49(1) lav). Most of the statutory rules applicable to transnational arbitration, however, are “substantive” (material) rules that directly regulate all the transnational arbitrations that fall under their scope of application. 1 I have in view exclusively the voluntary arbitration, method of jurisdictional dispute resolution in which, based upon the parties will, the decision is entrusted to a third party. To this purpose, a third party is a private person distinct from any of the disputing parties and that does not act on his behalf. For a convergent view, see Jarrosson [1987: 367 et seq., maxime 372 e 2001: 19 et seq.], Pierre Lalive/Gaillard [1989: 911 et seq.], and Lalive/Poudret/Reymond [1989: 271]. 2 For the distinction between substantive rules and choice of law rules see Lima Pinheiro [2014 § 2 B], with more references.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_024

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Arbitration gives rise to problems of determination of its legal framework whenever the disputed relationship or the arbitration itself has relevant legal connections to more than one country. Thus, the arbitration will be deemed transnational, first of all, where the dispute arises from a transnational relationship, i.e., a relationship that gives rise to a choice of law problem.3 Where the relationship is domestic, the arbitration will still be deemed transnational if the procedure has a legal relevant connection with more than one country, mainly when the arbitration is held in another country. Domestic arbitration is the opposite of transnational arbitration. Domestic arbitration is wholly contained in the interior of a national legal order and, therefore, the legal framework of domestic arbitration is defined entirely by such a national legal order.4 Domestic arbitration does not give rise to problems of determination of its legal framework. Public courts are genetically and organically linked to a country:5 they are created by the law of a country and are part of its political organization. The law of this country defines their legal framework and establishes their lex fori. The standards that form this framework are applied by professional judges, who are subject to a public law code of rules. Tribunals of domestic arbitration are not created by the law of the country where they are seated, nor are generally envisaged as State authorities either, but they are wholly contained in the social sphere of that country and, therefore, they are wholly submitted to the law of that country.6 Transnational arbitral tribunals are in a different position: besides not being created by the law of a country nor being part of its political organization, they have relevant legal connections to more than one country and, therefore, no country holds exclusive jurisdiction to define their legal framework. Consequently, these tribunals do not have a lex fori as the public courts do and are not governed by a singular national system of Conflict of Laws.7 3 On the notion of transnational relationship, see Lima Pinheiro [2014: § 1 B]. 4 Without excluding, however, the operation of infranational autonomous sources of law. See also Goldman [1963: 374 et seq.]. 5 In a federal State, the federal courts are linked to the union and the State courts are linked to the respective State of the union. 6 See also Oppetit [1998: 84 et seq.]. 7 This is the largely prevailing opinion in the arbitration case law – cf., namely, ad hoc in the case bp v. Libya (1973) [ilr 53 (1979) 297], vii/1, and icc no 1512 [Clunet (1974) 904 with approving annotation of Derains] – and among the authors – cf. Balladore Pallieri [1935: 302 et seq. and 340]; Klein [1955: 205 et seq.]; Batiffol [1957: 111, 1973a: 325 et seq. and 1973b: 26]; Currie [1963: 785]; Fouchard [1965: 366 and 378 et seq.]; Gentinetta [1973: 74 et seq.]; DebyGérard [1973: 199 et seq.]; Pierre Lalive [1976: 159 et seq., 1977: 156 and 305 et seq. and 1991: 44]; Eisemann [1977]; Schnitzer [1977: 298 et seq.]; Julian Lew [1978: 535] apparently approved in

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The fact that transnational arbitrations are held in the territory of given countries is not irrelevant but has a limited significance. The place where an arbitration takes place is determined by the parties or, in their omission, by the arbitrator frequently upon considerations of convenience and opportunity. Often the choice falls upon a “neutral” country, which has no connection with the disputed relationship. Furthermore, in some cases an arbitration is conducted in more than one country and, in principle, it is even possible an arbitration by correspondence, by videoconference, or otherwise online, in which the parties or the arbitrators never actually meet in a given place. By denying that the transnational arbitral tribunals have a lex fori which, a priori, may define their legal framework, I do not dispute that the countries with a significant relationship with the arbitration hold concurrent jurisdiction to regulate as well as to control the arbitration. Transnational arbitration is also in contact with standards that are formed in the community of international trade operators and may be faced with claims of applicability of supranational standards (either international or from a regional community). this point by Lagarde [1981: 220]; Von Mehren [1982: 222–223 e 226–227]; Loquin [1983: 298]; Jacquet [1983: 113]; Mayer [1982: 214 and 1992: 276]; Derains [1984: 75]; Ferrer Correia [1984/1985: 27 et seq. and 1989: 204 et seq.]; Fumagalli [1985: 467]; Drobnig [1987: 98–99 and 106]; Basedow [1987: 16]; Christian Von Bar/Mankowski [2003: 84] keeping the opinion defended in the previous edition; Bucher [1987: 214 and 1996: 48 et seq.]; Rigaux [1988: 310]; Lipstein [1988: 177]; Schlosser [1989: 162 et seq.]; Lalive/Poudret/Reymond [1989: 395 et seq.]; Bonell [1993 n.° 3]; Batiffol/Lagarde [1983: 577–578]; Stein [1995: 71 et seq. and 122 et seq.]; Fouchard/Gaillard/Goldman [1996: 654]; Benedettelli [1997: 913]; Lima Pinheiro [1998: 572 et seq.]; Rechsteiner [2001: 92]; Oppetit [1998: 30 e 85]; Bernardini [2000: 198], Grigera Naón [2001: 221 et seq.]; Berger [2001: 41]; Rubino-Sammartano [2006: 561 and 1103]; Fernández Rozas [2002: 46], although defending that the arbitration is always linked to the law of the country where it seats. See further Bento Soares/Moura Ramos [1986: 386] and Botelho Da Silva [2004: 15 et seq.]. This doctrine was adopted by the Geneva Convention on the International Commercial Arbitration (1961) – Art. 7(1) –, by the uncitral Model Law (Art. 28(2)) and by the Arbitration Rules of cci (Arts.15 and 17), aaa (Arts. 16 and 28 of the International Arbitration Rules) and lcia (Arts. 14, 22.3 and 22.4). Also the us Supreme Court, in the judgment rendered in the case Mitsubishi Motors (1985) [473 u.s. 614], held that “the international arbitral tribunal owes no prior allegiance to the legal norms of particular states”, and the French Cassation, in the judgment rendered in the case Putrabali (2007) [R. arb. (2007) 508], held that “la sentence international, qui n’est rattachée à aucun ordre juridique étatique, est une décision de justice internationale dont la régularité este examinée au regard des règles applicables dans le pays où sa reconnaissance et son exécution sont demandées”. See also Juenger [1990: 214] and Von Mehren/Jiménez De Aréchaga [1989a: 107 et seq.]. The contrary view is sustained by some of the supporters of the seat theory (infra iii. A) – see, namely, Mann [1967: 160].

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Therefore, transnational arbitration unavoidably gives rise to problems of determination of its legal framework. ii. In the course of transnational arbitration, or in connection therein, it is necessary to determine the law applicable to certain issues, maxime to the aspects of the arbitration agreement that are not directly regulated and to the merits of the dispute. Either the arbitrators or, in given circumstances, the public courts in the exercise of their functions of assistance and of control of the arbitration or at the stage of enforcement of the arbitral award may be faced with issues related to the formation, validity, effects and interpretation of the arbitration agreement. Many of these issues are regulated directly through substantive rules or principles.8 Where, however, this does not occur, and unless the arbitration agreement is merely a domestic one, it becomes necessary to choose the applicable law. In order to decide the dispute that is subject to arbitration, transnational arbitral tribunals have first to choose the law (or the non-normative criteria of decision) applicable. The problem of the determination of the legal framework of arbitration arises autonomously in a logically previous moment in relation to the choice of the law applicable to the arbitration agreement and to the merits. In fact, the conflict standards (rules and principles) that shall be used in the choice of the applicable law belong to the legal framework of the arbitration. Before choosing the law applicable to these issues, it is necessary to determine the conflict standards that guide that choice. iii. The problem of determination of the legal framework of the arbitration is not the object of a unitary approach in many works devoted to the transnational arbitration. Frequently, this problem is let us say diluted in the chapter on the law applicable to the arbitration agreement, the “law governing the procedure” and the law applicable to the merits of the dispute. This approach shall not be approved, due to several reasons. Firstly, this approach leads to confusion between the moment of the determination of the relevant conflict law and the moment of the choice of the applicable substantive law (which is the result of the operation of that conflict law). It would be otherwise if the arbitrators were not bound by any conflict standards in the choice of the “substantive” (material) applicable law. Nevertheless, this is not my understanding.9 8 See Lima Pinheiro [2005 §§ 7 and 8, 21–23]. 9 See Lima Pinheiro [2005 §§ 21 e 25].

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Secondly, according to the main national systems, as well as before the standards developed by the arbitration case law and by rules of arbitration centers, there is no place for a choice of the “law governing the procedure”. The national and transnational sources delegate to the parties and, in their omission, to the arbitrators, the shaping of the governing procedural rules within the limits drawn by a few fundamental principles.10 To embrace, under such a formula, the whole problem of determination of the legal framework of the arbitration is misleading, because there are rules and principles at stake other than procedural and because, as I will try to demonstrate later (infra iii A), this problem cannot be solved through the choice of a law based upon a multilateral choice of law rule.11 Lastly, the problem of the determination of the legal framework of the arbitration is common not only to these aspects but also to others (such as, for example, the prerequisites of the arbitral award) and shall be envisaged from a unitary point of view, since the ideas and the criteria put forward to deal with it are, in principle, applicable to all of its aspects. From the point of view adopted in the present article, the determination of the legal framework of transnational arbitration requires the consideration of certain national directives emanated from the countries that hold jurisdiction to regulate the arbitration. The legal framework of arbitration is formed by legal standards and, therefore, are the normative directives which are at stake here. This feature of the determination of the arbitration’s legal framework displays some parallel with the subject of relevance of judgments rendered by public courts to the transnational arbitral tribunals, namely the binding of the arbitral tribunals by the res judicata formed by judgments and by injunctions pursuing the prevention, suspension or cessation of the arbitration process. The present article does not deal with this subject, which does not concern the determination of the legal framework of the arbitration. The same shall be said regarding the less frequent case of public administrative acts concerning the arbitration. iv. The determination of the legal framework of the transnational arbitration is marked by an irreducible relativism. The determination of the legal standards that shall be applied by the arbitral tribunal may be envisaged from the point of view of each one of the national legal orders that have a significant relationship with the arbitration, from the point of view of a Transnational Law of Arbitration (shaped by standards which are formed independently from the action of national and supranational authorities) and, still, from the perspective of the arbitral tribunal itself. 10 11

See Lima Pinheiro [2005 § 24] and Art. 30 lav. I.e., a choice of law rule that may refer either to the law of the forum or to a foreign law.

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The global comprehension of the issues related to the determination of the legal framework of the arbitration demands a reflection from the different perspectives that correspond to the national legal orders with a significant relationship with the arbitration, to the Arbitration Transnational Law and to the arbitral tribunal.12 The attempts to solve the problem in absolute and universally valid terms frequently resemble the attempt to square the circle. Thus, the present essay is organized around three axes: national regulation of arbitration (i), transnational regulation of arbitration (ii) and determination of the legal framework of the arbitral by the arbitrators (iii). It shall be stressed that the point of view of the arbitration tribunal is the most important for this essay, since it is from this point of view the most complex and pressing issues on the determination of the legal framework of the arbitration arise. For this reason the iii Part, dealing with the determination of the legal framework of the arbitration by the arbitrators, has a conclusive character, converging in it the elements gathered in the two first parts. The present essay summarizes the points of view advanced in my book “Arbitragem Transnacional—A Determinação do Estatuto da Arbitragem”.13 i

National Regulation of Transnational Arbitration

A) Sources and Methods of National Regulation of Arbitration In the main national legal orders the arbitration is regulated by supranational, national, infranational and transnational sources. 12

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On the spatial scope of application of the lav, see Santos Júnior [2012: 61 et seq.] The relativism, which postulates the recognition of a plurality of points of view equally relevant, and the pluralism, which demands the participation of a plurality of subjects in the scientific knowledge and in the obtaining of solutions for the social problems are by Kaufmann [1997: 297 et seq.] raised to basic concepts of the Philosophy of Law in the modern democratic societies. This does not prevent that, by definition, there are a core of values and moral standards of behavior shared by the great majority of the members of a given society which are required by the social intercourse – see also Murphy/Coleman [1990: 94 et seq,] and Rawls [1993: 15 et seq., 37 et seq. and 141 et seq.]. It must be recognized that the rightness or justice of the prevailing conceptions, based upon ideological standings and political beliefs, may be discussed and is subject to evolution. But the social conscience of the values in a given historical moment, taking into account not only the transitory majorities, but also the acquired heritage of fundamental values and principles, the trend of evolution, may justify suprapositive limits to the laws enacted by the political power – see also Menezes Cordeiro [2012: 492 et seq.]. Editora Almedina, Coimbra, 2005.

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The supranational sources are essentially international conventions, which may be of universal or of regional scope. The main international convention of universal scope is the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). More than 140 countries are parties, including the most influential in the field of arbitration. The Convention regulates only the recognition of the arbitration agreement and the recognition and enforcement of foreign arbitral awards. It shall be emphasized that, according to the best understanding, this Convention obliges the Contracting States to recognize “foreign” arbitral awards even where the arbitration has not been organized under a national legal order and even where the arbitrators have not applied national law to the merits of the dispute.14 It is so, unless the award has been set aside or suspended in the country in which, or under the law of which, it was made (Art. 5/e). Among the conventions of regional scope shall be mentioned the European Convention on International Commercial Arbitration (Geneva, 1961), the InterAmerican Convention on International Commercial Arbitration (Panama, 1975), the Acordo sobre Arbitragem Comercial Internacional do Mercosul (Buenos Aires, 1998) and the twin agreement among the Mercosul, Bolivia and Chile (Buenos Aires, 1998).15 The European Convention results from the work carried out by the European Commission for Europe of the United Nations (ece/un) and had originally in view to further the arbitration in East-West relations.16 As parties to the Convention are admitted the member countries of the ece/un as well as the countries admitted to the Commission in an advisory capacity. Presently, 31 countries are parties to the Convention, including Germany, France and Italy. The Convention systematically regulates the arbitration, with exception of the recognition and enforcement of foreign decisions (albeit limiting the grounds for the annulment of the award in a Contracting State which allow the refusal of recognition and enforcement in another Contracting State). A working group of the ece/un is studying the possibility of revision of the Convention. The Inter-American Convention on International Commercial Arbitration has been approved in the first Inter-American Specialized Conference of Private International Law, held in Panama, in 1975. The Convention has been ratified by the majority of American countries, including the usa and Brazil, although it has been said that its practical meaning is limited.17 14 15 16 17

See Lima Pinheiro [2005 § 30], with more references. See Zanetti [2002: 637 et seq.] and Fernández Arroyo (org.) [2003: 217 et seq.]. See Klein [1962: 624]. Cf. Samtleben [1980: 266 et seq.].

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The Inter-American Convention regulates the recognition of the arbitration agreement; delegates to the arbitration parties the regulation of the constitution and operation of the arbitral tribunal, referring, in their omission, to the rules of procedure of the Inter-American Commercial Arbitration Commission (iacac);18 provides for the legal force of the arbitral award and regulates the recognition and enforcement of the “foreign” awards in terms similar to the New York Convention. At the level of national sources it has been acknowledged that since the nineteen sixties there has been a strong harmonizing tendency, furthered by the international conventions that have just been mentioned and by the Model Law on International Commercial Arbitration adopted by uncitral in 1985 and amended in 2006 .19 The United Nations General Assembly, meeting on 11 December 1985, recommended to all the Member States that they have this model in mind in the elaboration or revision of their arbitration statutes. This Model Law inspired, until October 2010, the statutes of 97 States and territories, and, among them, the statutes of Australia, Canada, Germany, Greece, Hong-Kong, Ireland, Japan, Macao, the Russian Federation, Scotland, Spain and some us States.20 We are thus witnessing a process of globalization of basic notions, techniques and fundamental principles of transnational arbitration. Already in 1992 BLESSING stressed that while in the fifties an arbitration held in London was substantially different from one held in New York, Tokyo, Paris or Zurich, it was possible to assert that, at the time, the basic parameters have become similar if not, to a large extent, almost identical.21 Notwithstanding, the same author pointed out a certain deviation of developing or semi-developing countries in relation to some of these basic parameters.22 In the following years, globalization has moved forward, relying upon a change of attitude from many of these countries. In the main national systems, the most important national source is the statutes. 18

The “rules of procedure” of the iacac are based, since 1978, in the uncitral Arbitration Rules, adopted by the Resolution no. 31/98, of the United Nations General Assembly (1976) – see Montoya Alberti [1999: 83 et seq.]. The version of the iacac Rules presently in force has been adopted in 2000 – see Adriana Polania – “Inter-American Commercial Arbitration Commission”, Yb. Comm. Arb. 27 (2002) 331. 19 See Sanders [1995]. 20 See http://www.uncitral.org. 21 81–82 and 88. 22 82 et seq.

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Most of these systems have recent23 or relatively recent 24 statutes on voluntary arbitration. A few of these systems, however, have older statutes.25 Although the English and us legal orders, as members of the Common Law family, adopt the system of stare decisis (binding precedent), thus assigning a specially important role to court decisions as a source of law, it is a fact that statutes are today the main national source of Arbitration Law. This does not prevent the case law of national courts from playing an important role not only in matters that are not governed by the arbitration acts but also within the scope of these acts. Infranational and transnational sources are autonomous sources in relation to the national and supranational authorities, mainly the rules of the arbitration centers and the custom based upon arbitration case law. The distinction between these two sources can be drawn with reference to the social sphere of a country: infranational sources are contained within this sphere, transnational sources go beyond this sphere. The custom based upon arbitration case law and the rules of the arbitration centers are the main transnational sources of Arbitration Law.26 In fact, the rules created by these processes are recognized as binding standards of conduct in the arbitration circles or within the scope of the arbitration center that has enacted them and are applicable by the arbitral tribunals independently from the point of view taken by a singular national legal order.27 Transnational arbitral tribunals even apply primarily standards from transnational source. These sources operate mainly on an autonomous plane in relation to the national legal orders, embodying a Transnational Law of Arbitration (infra ii. A). Nonetheless, it shall not be excluded that legal national orders may give relevance to these sources and that, consequently, the rules thereby created may be applied by national courts when dealing with arbitration issues. This is par23

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Namely “English” Arbitration Act of 1996; Brazilian Arbitration Act from 1996; Arts. 1025–1062 German Civil Procedure Code, with the redaction given in 1997; Arts. 806–840 of the Italian Civil Procedure Code, with the redaction given in 2006; Arts. 1442–1527 of the French Civil Procedure Code, with the redaction given in 2011, the Portuguese Arbitration Act of 2011. Namely Arts. 1, 7 and 176–194 of the Switzerland Federal Act of Private International Law of 1987, with minor modifications of 2005 and 2006. Namely, in the us, the Federal Arbitration Act of 1925, with amendments of 1970 and 1990. The recognition of these transnational sources is due, in first place, to Fouchard [1965: 41 et seq.]. See also Fouchard/Gaillard/Goldman [1996: 169 et seq.]. See, for example, icc no 8938 (1996) [Yb. Comm. Arb. 24 (1999) 174], in which it was clearly held that the provision of the icc Arbitration Rules at stake is an “independent rule of International Arbitration Law”.

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ticularly obvious in respect to the rules of arbitration centers: in the ­decision of many arbitration issues the national courts must take into consideration the rules of the center chosen by the parties. The rules of arbitration centers are sources of contractual provisions since, through a suitable reference made by the parties, their rules may be incorporated in the arbitration agreement.28 Furthermore, the rules of arbitration centers are sources of law too.29 The provisions therein contained are characterized by the generality, inasmuch as their addressees are indeterminable at the time of the adoption of the rules. These addressees are not only the arbitrators but also the parties themselves. These rules are applied by the arbitration tribunal that operates within the scope of the respective center independently from a reference made in the arbitration agreement. Their applicability results automatically from the submission of the dispute to the respective arbitration center. Therefore, they are not a mere model of regulation that only binds through an incorporation in the arbitration agreement or in other agreement concluded between the parties, between the parties and the arbitrators or between the arbitrators and the entity which administrates the arbitration center.30 The rules of arbitration centers are created by private institutions and are applied by the tribunals that operate within their scope independently of the relevance assigned to them by a singular national legal order. They are, for all these reasons, transnational other infranational sources of Arbitration Law. Among many rules of arbitration mention shall be made of the Arbitration Rules of the International Chamber of Commerce (icc, 2012), the Rules of the London Court of International Arbitration (lcia, 2014), the International Arbitration Rules of the American Arbitration Association (aaa, 2014), included in the International Dispute Resolution Procedures, and the Arbitration Rules of the World Intellectual Property Organization (wipo, 2014). A further mention 28 29 30

See Mayer [1989: 389] and Berger [1993: 485 et seq.]. For a convergent view, see Marrella [2003: 579 and 722 et seq.]. Von Hoffmann [1976: 4], Böckstiegel [1982: 706], and Berger [1993: 488–489] hold the contrary opinion. According to one understanding, the submission to autonomous provisions, namely the acceptation of the articles of association by the new members, would have always a contractual character – see Meyer-Cording [1971: 75, 97 et seq., and 131 et seq.]. This understanding, however, is challenged by other authors: Flume [1983: 315 et seq.] sustains that the binding force of the articles of association to the new members derives from the quality of member, not from an autonomous act of “submission”. In any case, neither the delimitation of the addressees within the personal scope of the institution nor the possible contractual source of the provisions excludes its characterization as legal rules – cf. Meyer-Cording [1971: 83 et seq. and 97 et seq.].

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shall be made of the uncitral Arbitration Rules (2010), that are adopted in many ad hoc arbitrations.31 B) Forms of National Control of Arbitration The national control of arbitration is the necessary counterpart for the concession of jurisdictional effects to the arbitral award.32 In effect, in the present stage of the organization of the international community, in which there is no international court with jurisdiction to control the transnational arbitration, the national legal orders are only willing to assign jurisdictional effects to a decision rendered by private persons under the condition of being allowed to exercise some control over the arbitration or, at least, over the jurisdictional effects of the award.33 This control is mainly designed to assure that the jurisdiction of the arbitrators is based upon a valid arbitration agreement, that a few fundamental principles regarding the procedure are respected and that the decision is compatible with some fundamental standards of the forum legal order. Before the main systems this control is made mainly at three stages: – at the stage of court reviewing of the “national” arbitral award; – at the stage of ordering the enforcement of the “national” arbitral award; – at the stage of recognition of the “foreign” arbitral award. The clearly prevailing tendency to abolish the need of a recognition procedure or of homologation of “national” arbitral awards is to a larger extent justified by the policy of promoting the arbitration and avoiding additional costs and delays. This tendency gives rise, however, to two questions. On the one hand, it could be asked if the criterion adopted for the distinction between “national” and “foreign” awards is functionally appropriate to the difference of treatment arising therefrom.34 On the other hand, arbitral tribunals are not national authorities and, ­therefore, the awards they render are always decisions external to the national legal order. In light of this, it seems that whenever the arbitral award is invoked 31

32 33 34

The adoption of these rules by agreement of the parties of international contracts has been recommended by a resolution of the United Nations General Assembly adopted on 15 December 1976. In general, on the national control of arbitration, see Deby-Gérard [1973: 199 et seq.], Dasser [1989: 299 et seq.], Gottwald [1987: 59], and Park [1997: 156 et seq.]. See also Peter Behrens [1993: 15 et seq.] and Bernardini [2000: 7]. On this topic, see Lima Pinheiro [2005 §§ 35–36 and §§ 29 et seq.].

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before a national court a control of the conformity of the arbitration with some fundamental standards should be possible. The generality of the systems establishes this control in what concerns the enforcement of the arbitral award. It would be conceivable that this control also took place where the res judicata effect of the “national” arbitral award is raised incidentally in a suit brought in a national court. The methods of national control of the arbitration in the main national systems are largely based upon the model established by the New York Convention. According to this Convention, the national control of arbitration is assured by a primary jurisdiction—the jurisdiction from the country in which, or under the law of which, the award was made –, and a secondary jurisdiction—the jurisdiction from the recognition country.35 The primary jurisdiction has the power of reviewing the “national” arbitral award (in principle under the request of one of the parties) and the secondary jurisdiction is in charge of the recognition of the “foreign” arbitral award. The setting aside of the award in the primary jurisdiction deprives the award of effects both in the forum country and in all the countries that do not recognize awards nullified by the primary jurisdiction. The control exercised by the secondary jurisdiction is confined to effects of the award in the legal order of the recognition country. Nevertheless, the Convention does not exclude that the Contracting States, based upon their domestic law, recognize awards nullified in the country of origin.36 Some national courts have taken advantage of this possibility. According to a more radical proposal, the court reviewing should even be abolished.37 The arbitral awards might no longer be set aside in the country of origin and would only be subject to national control in the country where their recognition or enforcement was sought.38 In favor of the control of the arbitral award in the country of origin, however, there is a decisive reason: the losing party shall be entitled to see the 35 36 37 38

See Reisman [1992: 113–114]. See Lima Pinheiro [2005 § 30], with more references. See Fouchard [1997: 351 et seq.] and Girsberber [1999: 255 e 260]. This solution has been enacted in Belgium (Art. 1717 (4) of the Code judiciaire), in 1985, regarding the arbitrations between parties without a personal link with Belgium, but partially waived in 1998 – Art. 1717 (4) of the Code judiciaire only allows that parties without a personal link with Belgium waive the resort to an annulment action by agreement. This last solution is inspired by Art. 192 of the Switzerland Federal Act of Private International Law – see Horsmans [1997: 500 et seq.]. See, more recently, Art. 1522 of the French Civil Procedure Code, with the redaction given in 2011.

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validity of the award ruled definitively in a sole national jurisdiction.39 Otherwise, the party who has obtained a favorable award may attempt to recognize and enforce an award successively in several countries, compelling the other party to comply with a flawed award or to bear the costs of an opposition to the enforcement in all these countries. The legitimate interest of the losing party in a definitive judicial ruling on the validity of the award is reinforced by the risk of incurring serious “social” sanctions for non-compliance which do not depend on the intervention of a court.40 C) Main Models of National Regulation and Control of Arbitration The position taken by a national legal order regarding the regulation and control of arbitration may correspond to four main models: a non-recognition system, a non-intervention system, an assimilation system and a framework system. The non-recognition system is opposed to all the other systems which are founded on the principle of recognition of arbitration as a method of jurisdictional dispute resolution. This system denies the procedural effect of the arbitration agreement and the jurisdictional effects of the arbitral award. This system was to some extent adopted by the “socialist” countries which did not allow the arbitration or only allowed it in external relations.41 Thus, until 1987, in the countries of Eastern Europe, arbitration was only allowed in respect of disputes arising from “private relationships” between legal persons from different countries in matters of international trade or of other international economic, scientific or technological relationships.42 These arbitrations were carried out by permanent arbitral tribunals which operated in the frame of the Chambers of External Commerce of these countries.43 39

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See Van Den Berg [1981: 355–356], Park [1983: 30–31, 1999: 818–819 and 2001: 599–600], Remiro Brotóns [1984: 236–237], Reisman [1992: 117], Poudret [2000: 775 et seq.], Goode [2000: 262], and Poudret/Besson [2002: 904–905 and 963–964]. Since this primary jurisdiction is founded, in first line, in the interest of the parties, it shall be honored, in its determination, the parties will – see also Reisman [1992: 117]. This points in the direction of the primary jurisdiction being, in principle, the country of the conventional seat of the arbitration fixed by the parties or, in their omission, by the arbitrators, even if the proceedings are held in another country – see Lima Pinheiro [2005 § 35]. See Lima Pinheiro [2005 Introduction i]. Exceptionally, it shall be allowed the recognition of decisions nullified in the country of origin, when the annulment in the country of origin is contrary to the public policy of the recognition country. Cf. René David [1987: 113 et seq.]. See Sanders [1996 no. 61]. See Sanders [1996 nos. 61 et seq.].

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The reconversion of these “socialist” countries in market economies has generally been joined by an evolution in the direction of acceptance of the arbitration and of adoption of a framework system.44 As systems of recognition of the arbitration, the non-intervention system and the assimilation system represent opposite poles in the national regulation and control of arbitration. A national legal order which adopts the non-intervention system declines to define or even outline the legal framework of the arbitration, confining itself to the definition of the conditions under which the arbitration agreement may exclude the judgment of the case by a court and the arbitral award may produce its effects as a jurisdictional act in the domestic sphere. Close to this non-intervention system are those legal orders that exclude the court reviewing of awards rendered in arbitrations that are conducted within its sphere, as well as, although more loosely, those that allow the waiving of the annulment action by agreement of the parties. I have previously stated the reasons why I do not advocate this solution (supra i. B). In the opposite extreme, a legal order that follows the assimilation system puts the legal framework of arbitration and of national courts as far as possible on the same footing. The jurisdiction of the arbitral tribunal still depends on the conclusion of an arbitration agreement, but the national order endeavors to systematically regulate the organization of the tribunal and the arbitral ­process; and, in principle, the national order directs the arbitration tribunal to determine the law governing the merits of the dispute according to the conflicts law applicable by the national courts. The traditional attitude in some systems favored a certain assimilation of arbitral tribunals seated in the territory of one country with its courts. An expression of this attitude could be found, for instance, in the understanding that the arbitral tribunals should apply the general conflicts law in force in the legal order of this country. This was the conception that prevailed in the resolution approved by the International Law Institute in its sessions of Amsterdam, 1957, and Neuchâtel, 1959.45 It was also, basically, the position of the English law regarding the tribunals seated in English territory, notwithstanding the possibility of choice by the parties of the national law applicable to the arbitration agreement, as well as to the arbitral procedure, based upon the English

44 45

See Sanders [1996 no. 65]. For a convergent view, see the reports of Sauser-Hall.

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397

choice of law rules.46 Nonetheless, the evolution operated by the “English” Acts of 1979 and 1996 has clearly led to a framework system. Among the main motives for resorting to arbitration is the search for a justice that is quick and appropriate to the case. The interest for the arbitration as an alternative method of dispute resolution would be greatly impaired if the arbitral tribunals were subject to the same procedural rules (and in the transnational arbitration, to the same conflicts law) than the national courts.47 Considering that the transnational arbitration is subject to concurrent jurisdictions of regulation and control of a plurality of countries, the national regulation, even if endeavoring to honor the specificity of the arbitration, is a potential source of conflict of national directives and of other difficulties for the operation of the arbitration.48 By respecting a wide sphere of action of the parties and the arbitrators, the countries allow them to formulate the solutions most appropriate to the nature and circumstances of the case and ease the development of transnational rules based upon the arbitration case law and rules of the arbitration centers. Therefore, the countries shall not seek the systematic regulation of transnational arbitration according to an ideal and technically perfect model; the guiding ideas of their normative action shall rather be the definition of the best possible framework for the autonomy of the parties and the arbitrators, and the respect for the operation of the transnational arbitration rules within certain basic limits that they cannot give up. We are thus led to a framework system, which represents a compromise between the aforementioned extreme positions. According to this system, the legal framework of the arbitration is outlined by the arbitration law in force in the internal order, which delegates to the parties and to the arbitrators the determination of the greater part of the rules that will shape this legal framework. The main national legal orders have adopted this system. The Geneva Convention from 1961 and uncitral Model Law have given a substantial contribution to the wide acceptance of this framework system. 46

47 48

Cf. Mann [1967: 160 et seq., 1968: 363–364 and 1984: 197–198], Dicey & Morris [12.ª ed., 574 et seq.] and Redfern/Hunter/Smith [2nd ed., 75 et seq. and 91 et seq.]. See, for a critical view, Pierre Lalive [1977: 305 et seq.]. See Von Mehren [1982: 220 et seq.]. See also the considerations of Stein [1995: 76 et seq.].

398

de Lima Pinheiro

The framework system honors the specificity and the autonomy of the transnational arbitration, without giving up some fundamental requirements of procedural justice, the establishment of some rules that are normally important for the good operation of the arbitration and of the general criteria on the determination of the law applicable to the merits. ii

Transnational Regulation of Transnational Arbitration

Concept, Legal Force and Sources of the Transnational Law of Arbitration By Transnational Law of Arbitration it is understood the set of standards (rules and principles) applicable by the arbitral tribunal and that are formed independently from the action of national and supranational authorities. It has been previously mentioned that transnational arbitration, although not immunized before the jurisdiction to prescribe of the countries that have a significant relationship with the arbitration, enjoys a large autonomy in relation to the singular national legal orders. This autonomy allows that its legal framework be in first line defined by transnational law.49 The existence of a Transnational Law of Arbitration was pointed out, already in 1965, by Fouchard, who refers to the birth and development of a “law of the practitioners of international commercial arbitration”, created by “international community of merchants”.50 Von Mehren advocates also resorting to “anational” procedural rules and autonomous choice of law rules.51 The possibility of the formation of autonomous standards is recognized by other authors in what concerns this second aspect.52 The aforementioned (supra i. A)

A)

49 50 51 52

See Stein [1995: 94–95] and Lima Pinheiro [1998 § 11 C]. 1965: 41. See also Fouchard/Gaillard/Goldman [1996: 169 et seq.]. Compare Dasser [1989: 70–71] and Poudret/Besson [2002: 100]. 1982: 220 et seq. See Goldman [1963: 366, 380 et seq. and 415 et seq.], Hellwig [1984: 421], Loussouarn/ Bredin [1969: 43–44], Derains [1972: 99 et seq.], Von Mehren [1982: 224 et seq.], Pierre Lalive [1982], and Bucher [1987: 214 et seq.]. As emphasized by Stein [1995: 142 et seq.], in what concerns the determination of the applicable law one shall not expect the development of an autonomous conflict system based on fast choice of law rules, since the prevailing tendencies shown in the arbitration case law, in the cases where the parties did not provide on the applicable law, point otherwise; nonetheless, this does not mean the impossibility of development of standards on the determination of the law most appropriated to the case. See further the references made by Isabel Vaz [1990: 166, footnote 228 and 205–206], and by Marques Dos Santos [1991: 685 e 689–690].

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globalization of basic notions, techniques and fundamental principles of the arbitration favors considerably this development. The processes generally recognized in the arbitration circles as suitable for the creation of legal standards applicable to the transnational arbitration are custom and regulation by arbitration centers. When speaking of custom, I have mainly in mind the custom based upon arbitration case law, which results from the integration in the legal conscience of the arbitration circles of solutions developed by a uniform and steady arbitration case law. Transnational Law of Arbitration is a favorable ground for the development of custom based upon arbitration case law, thanks to the selflimitation that characterizes the national and supranational regulation of arbitration, to the arbitral tribunal non-submission to a singular national legal order and to the fact that normally the parties do not define the applicable procedural rules.53 The reasons why the rules of arbitration centers shall be deemed sources of law were aforementioned (supra i. A). The transnational arbitral tribunals apply, primarily, standards from transnational sources. Certainly, the binding effect of Transnational Law of Arbitration is limited by the need of taking into consideration some directives emanated from the countries that have a significant relationship with the arbitration or in whose courts the enforcement of the award may be sought. Notwithstanding, as far as possible, arbitrators shall honor the claim for applicability of Transnational Law of Arbitration standards.54 Having in mind this set of sources it becomes clear that the institutional arbitration is on quite a different footing from the ad hoc arbitration in what concerns the transnational regulation. The institutional arbitration is systematically regulated by the rules of arbitration center and, consequently, is subject to a developed set of transnational rules,55 while the autonomous standards that are part of the legal framework of ad hoc tribunals are essentially from customary arbitration law, are in limited number and, in most cases, display a high degree of indetermination. 53 54

55

See also Smit [1997: 110]. For a convergent view, see Goldman [1963: 363 et seq. and 413 and 1964: 189], Fouchard [1965: 378 et seq.], Loussouarn/ Bredin [1969: 43–44], Derains [1972: 99 et seq.], Von Mehren [1982: 224 et seq.], Pierre Lalive [1982], Bucher [1987: 214 et seq.], and Stein [1995: 84 et seq.]. See still the references made by Isabel Vaz [1990: 166, footnote 228 e 205 et seq.], Marques Dos Santos [1991: 685 e 689 et seq.], Berger [1993: 544 et seq.], Schwartz in Transnational Rules in International Commercial Arbitration, icc Institute of International Business Law and Practice, Paris, 1993, 59, and Gaillard [1995: 15–16]. The point has been already pointed out by Fouchard [1965: 303 et seq.].

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de Lima Pinheiro

The inventory of the standards of customary law of transnational arbitration is still to be done. It seems unquestionable that in transnational arbitration the arbitrators regard themselves as bound by some rules and principles concerning the validity of the arbitration agreement, the parties freedom to choose the law applicable to the merits of the dispute and the relevance of trade usages.56 Furthermore, some fundamental procedural principles shall be deemed part of Transnational Law of Arbitration, which are common to a large majority of national systems, such as the “adversary principle” and the “equality of the parties principle” (due process).57 The development of the Transnational Law of Arbitration is also desirable from a legal policy point of view.58 First of all, the rules of Transnational Law of Arbitration are created in the arbitration milieu; this assures their appropriation to the specificity of transnational arbitration. As international uniform rules, they offer the best possible solution, at the present stage of the organization of the international community, to the regulation problems of transnational arbitration. The legal force of these rules does not prevent the applicability of mandatory rules of national law, insofar as this legal force does not interfere, in principle, with the duty to take into consideration some national directives (infra iii. B). Lastly, the requirement of conformity with general principles of law and fundamental principles accepted in the international community assures that the arbitrators and the parties are not bound by solutions contrary to the internationally prevailing concepts of justice. B) Legal Foundation of Transnational Arbitration With the recognition of a Transnational Law of Arbitration autonomous in relation to national legal orders one has still not answered the question about the legal foundation of transnational arbitration, i.e., the source of the jurisdiction of the arbitral tribunal, of the legal effects of procedural acts done by the arbitrators and the parties and of the jurisdictional effects of the arbitral award.

56

57 58

See Lima Pinheiro [2005 §§ 44 et seq.]. The CENTRAL’s Transnational Law Digest & Bibliography (tldb) [in tldb.uni-koeln.de/TLDB.html], with more references to case law and literature, suggests that already are part of the Arbitration Transnational Law many rules governing the arbitral procedure. Cf. Goldman [in Colloque de Bâle sur la loi régissant les obligations contractuelles (cit.), 1983: 193] and Pierre Lalive [1986 nos. 47 et seq.]. Compare Poudret/Besson [2002: 100] and Smit [1997: 97].

The Confluence of Transnational Rules

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According to the traditional view, which still prevails in Common Law systems and in Germany, every arbitration has its roots in a legal order, which is its base legal order [ordre juridique de base], to employ an expression that has arisen in the context of the State contracts.59 As well as the arbitration of International Law (mainly between States and/or international organizations) is rooted in the international legal order, every domestic or transnational arbitration would be rooted in a national legal order.60 The legal framework of every transnational arbitration would be defined by a national legal order—the “law of arbitration” –, which would be the foundation [Grundnorm] of the effects of the arbitration agreement and of the arbitral award.61 In this context, a reference may be made to the often-cited metaphor formulated by Raape: the “arbitral tribunal is not on a throne over the Earth, does not soar in the air, it shall in any place land, in any place be ´connected to the ground`”.62 This doctrine denies the existence of an autonomous legal order of the international trade in which the transnational arbitration may be founded, and alleges that, albeit the arbitration is grounded in the parties autonomy, this autonomy is not an original legal power, but derived from a delegation or permission of the national legal order. It is further argued that any transnational arbitration, either domestic or transnational, may occasion the intervention of national courts, either at the stage of court reviewing of the arbitral award or at the stage of its recognition. Nonetheless, from the fact that arbitration is subject to national jurisdictions to prescribe and to adjudicate does not result necessarily that it is founded in a national legal order. Three main theories are advocated as an alternative to this traditional view: – the legal foundation of transnational arbitration is based exclusively on the parties’ autonomy; 59 60

61 62

See Lima Pinheiro [1998 § 15 B and 1999]. See, namely, Sauser-Hall [1952: 531], Raape [1961: 557], Mann [1967: 159 et seq.], Von Hoffmann [1970: 110], Münzberg [1970: 37 and 63–64], Nagel [1978: 50–51], Smit [1997: 95 et seq.], Schwab/Walter [2005: 360–361], Redfern and Hunter on International Arbitration [2009: 173 et seq., maxime 191], Schlosser [1989: 143 and 163 et seq.], Sanders [1999: 248], Sandrock [2001: 685], Bernardini [2000: 8–9 and 31–32], and Goode [2000: 256–257]. For this view, see Poudret/Besson [2002: 83]. 1961: 557. In the German original, which I have translated freely, “Das Schiedsgericht thront nicht über der Erde, es schwebt nicht in der Luft, es muß irgendwo landen, irgendwo ´erden`”.

402

de Lima Pinheiro

– transnational arbitration has legal foundation on the whole of national legal orders in which the award may produce effects; – transnational arbitration is founded on a Transnational Law autonomous in relation to national legal orders. Let us examine summarily each one of these views. The theory that founds transnational arbitration exclusively on the parties’ autonomy, exercised in the arbitration agreement, is mainly supported in French legal literature, but is echoed in other circles.63 This theory presupposes that party autonomy is an original source of legal effects, i.e., that it produces legal effects independently from the operation of rules or principles of law.64 The issue is quite controversial.65 In my opinion, party autonomy could only produce legal effects directly, without the mediation of law, if private persons were holders of an “original” or “constitutional” legal power, in the sense of a source of law which is not, itself, regulated by law. It seems to me equivocal to speak of an “autonomous order” in respect of the contractual regulation. A legal order is a normative structure of a society.66 A contractual relationship, even if multi-party, cannot be a society in the sociological sense and, correlatively, it is not conceivable a legal order formed exclusively by contractual provisions.67 By denying that contractual parties form a society governed by its own law, it is further denied the chance of envisaging the contract conclusion as the exercise of a “constitutional” power.68 Consequently, it is the law that assigns legal effects to the contract.69 Since there is still no world society governed by a global legal system, the legal relevance of a contract has to be based upon a national, supranational or transnational law. In the context of transnational arbitration, I believe that the jurisdiction of  the arbitral tribunal and the legal effects of procedural acts and of the 63

64 65 66 67 68 69

See an embryonic form of this view in Holleaux [1956: 179] and Carabiber [1961: 180], and the development made by Von Mehren [1982: 215–216], Mayer [1982], and Luzzatto [1987 nos. 2 and 3]. See Münzberg [1970: 136]. See references in Lima Pinheiro [2005 § 43]. Or, in other words, a subsystem of the global social system. For a convergent view, see Curti Gialdino [1972: 796–797]. In any case it would be impossible to derive the legal force of an act from the regulation in itself established. See arbitral awards in the cases Aramco (ad hoc, 1958) [ilr 27: 117], Mobil Oil (Iran-u.s. Claims Tribunal, 1987) [Iran-u.s. Claims Trib. Rep. 16 (1987) 3], and Texaco (ad hoc, 1977) [ilr 53: 389]. Among the authors see, namely, Batiffol [1964] and Giardina [1984: 52 et seq.].

The Confluence of Transnational Rules

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a­ rbitral award have to be founded in the law. In the expression of Fragistas, transnational arbitration cannot be “suspended in the air”.70 The fact that, as it is generally accepted,71 the invalidity of the arbitration does not hinder the jurisdiction of the arbitral tribunal to decide on its jurisdiction, evidences that the jurisdiction of the arbitral tribunal is not founded exclusively on the arbitration agreement.72 The concept of a transnational arbitration exclusively founded on the parties’ autonomy is thereby refuted. Nevertheless, the law on which the transnational arbitration may be founded is not necessarily a singular national law. These considerations lead us to the examination of the theories that found the transnational arbitration on the whole of the national legal orders in which the award may produce effects and on transnational law. The idea that arbitration is not necessarily subject to the legal order of the country where it seats, has led some authors to look for the legal foundation of the arbitration in the whole of the legal orders in which is sought the production of legal effects by the arbitral award.73 It is my understanding that this theory does not provide a satisfactory explanation for the legal relevance of transnational arbitration either. The jurisdiction of the arbitral tribunal is a legal effect of the arbitration agreement that, according to the previously mentioned, has to be based upon the law. The legal effects of the acts done by the arbitrator and the parties in the arbitration process have also to be derived from the law. In some cases, however, the legal orders in which the legal effects of the arbitral award will be sought cannot be foreseeable at the time of the constitution of the tribunal and during the arbitration process. It is equally conceivable that the legal orders that may be foreseeable fora of recognition and enforcement disagree among each other on the validity of the arbitration agreement or the arbitrators’ powers. Therefore, often the arbitrators and the parties cannot find guidance in the whole of the legal orders in which the legal effects of the arbitral award are sought. 70 71 72 73

1960: 14. See also Rigaux [1982: 263]. See Lima Pinheiro [2005 § 12], with more references. See Lima Pinheiro [2005 § 9]. This idea was outlined by Paulsson [1983] who, in a first moment [1981], still follows a line of reasoning close to the aforementioned conception; Bucher has also appointed in a convergent direction [1989: 91]. The clearest formulation of this conception can be found in Fouchard/Gaillard/Goldman [1996: 654]. See also Seraglini [2001: 60 et seq. and 280 et seq.]. This conception has found echo in the arbitration case law – see cci no. 10623 (2001) [asa Bulletin 21/1 (2003) 82].

404

de Lima Pinheiro

This theory, then, is either a mere variation of the view previously discussed, in which transnational arbitration is exclusively founded on the autonomy of the parties, albeit the legal effects of the award are controlled by the legal orders of the countries of recognition and/or enforcement, or postulates resorting to a rule or principle whose legal force is autonomous insofar as it does not depend on the concurrence of the legal orders of all of the countries of recognition and/or enforcement. Transnational arbitration practice suggests precisely that arbitrators and parties rely on a transnational principle that allows the jurisdictional resolution of disputes arising from transnational relationships by private persons, based upon the will of the parties, independently of the position taken, in the particular case, by this or that national legal order. We are thereby led to the theory that founds transnational arbitration in transnational law autonomous in relation to the national legal orders. This theory is naturally advocated by the supporters of the lex mercatoria doctrine, especially those that assert the existence of an autonomous order of international trade. Already Fouchard, in his treaty on International Commercial Arbitration published in 1965,74 admitted this possibility, although pointing out limits to the complete “internationalization” of the arbitration. A few years later, it was the turn of Gentinetta to essay a construction that founds transnational arbitration in a combination of autonomy of the parties and “general principles of law”.75 More recently, this theory has found an improved formulation in authors that hold a view of transnational law dissociated from an autonomous legal order of international trade, namely Rigaux 76 and the later Von Mehren.77 In my view, transnational arbitration is not, as a whole, inserted in an autonomous legal order of international trade, since this legal order has not yet been formed.78 This assertion, however, does not exclude the possibility of an institutional insertion of the arbitration in a sectorial autonomous order.79 This possibility 74 75 76 77

78 79

24 et seq. 1973: 108 et seq. See also Eisemann [1977: 191 et seq.]. 1987: 142 et seq., 1989: 242–243, and 1993: 1435. In the same line of reasoning see Fazzalari [1997: 4–5]. 1990: 57–58. See also Gaillard [2007: 91 et seq.] finding the legal ground of the transnational arbitration in an “arbitral legal order” based upon “transnational rules” inferred by a comparative method from the prevailing trends in the national legal orders; this conception also shares some points of view with the abovementioned doctrine of Gentinetta. See Lima Pinheiro [1998 § 18 D and 2005 § 41], with more references. See also Benedettelli [1997: 911].

The Confluence of Transnational Rules

405

deserves serious examination in case of institutional arbitrations that operate in the framework of professional organizations of sectorial and/or regional scope. In this case, the legal force of the arbitration agreement and of the procedural acts done by the arbitrators and by the parties is founded on the respective autonomous order. In the more common cases, in which the arbitration is not inserted in a sectorial autonomous order, I deem defensible that the Transnational Law of Arbitration may be to a certain extent the legal foundation of transnational arbitration. The foundation of voluntary arbitration is a concretization of the principle of autonomy of the parties: the subprinciple of autonomous resolution of disputes.80 This principle has a different standing at the level of domestic arbitration and at the level of transnational arbitration. In domestic arbitration, the principle is in force as an element of the national legal order, and is mainly materialized in the legal regime that allows the voluntary arbitration. It is the national legal order that assigns jurisdictional power to the arbitral tribunal. In transnational arbitration, the principle is in force as an element of Transnational Law of Arbitration. Its legal force is derived from its integration in the legal conscience of the arbitration circles as a constitutional principle of arbitration (custom based upon the arbitration case law) and from the rules of the arbitration centers.81 National legal orders, or at least those that adopt framework or non-intervention systems (supra ii. C), recognize transnational arbitration as an autonomous legal institution, based upon the principles of autonomous resolution of disputes and largely self-ruled by the parties and the arbitrators. The legal order of the recognition country, for instance, cannot presuppose that the arbitrators exercised powers allocated by its domestic rules. By recognizing and/or enforcing awards rendered in transnational arbitrations, even where these were entirely based on autonomous standards, a national legal order is at the same time recognizing the legal force of that transnational law. 80 81

For a convergent view see Habscheid [1959: 114], Von Mehren [1980 no. 56], and Peter Behrens [1993: 14 et seq.]. See also Von Mehren/Jiménez De Aréchaga [1989b no. 13], sustaining that the jurisdiction power does not emanate necessarily from the State and that the constrains and pressings that result from social and economical groups – namely the community of the actors of international trade –, may shape a jurisdictional process even without the support of political power.

406

de Lima Pinheiro

Nevertheless, it does not seem that the legal foundation of transnational arbitration lies only on the Transnational Law of Arbitration. It seems true that the validity and the legal force of the arbitration agreement are founded in the first place on the transnational principle of autonomous resolution of disputes. From the same principle is derived the “obligatory” effect of the arbitral award, which explains why under the New York Convention (Art. 5/1/e) the binding nature of the award does not depend, according to the best understanding, on the legal order of the country of origin.82 The jurisdictional effects of the arbitration agreement and of the arbitrators’ rulings, however, are also the result of the position taken by the countries which have a significant relationship with the arbitration. The jurisdictional power of the arbitrators is mainly based upon national recognition: depend on the national legal orders the relevance of the arbitration agreement before the national courts (namely as a procedural defence), the enforcement of procedural decisions, the res judicata effect of the arbitral award before national courts and the enforcement of the arbitral award. In conclusion, the jurisdiction of the arbitral tribunal has a complex foundation: the transnational principle of autonomous resolution of disputes, which underlies all the transnational arbitration, and the recognition of one or more of the countries which have a significant relationship with the arbitration.83 iii

Determination of the Legal Framework of Arbitration by the Arbitrators

Traditional Views on the Determination of the Legal Framework of Arbitration (Seat of Arbitration and Autonomy of the Parties) It has been seen that, according to the traditional view, every transnational arbitration has its foundation on a national legal order (supra ii. A). It is derived therein that the legal framework of the arbitration would be defined by a national legal order—the law of the arbitration—designated by a connecting factor.84 A)

82 83

84

See Lima Pinheiro [2005 § 30], with more references. It shall be pointed out a partial convergence with Fouchard/Gaillard/Goldman [1996: 414] when they sustain that the rule jurisdiction-jurisdiction is founded on the law of the whole of countries willing to recognize the decision made by the arbitrators on their own jurisdiction. See, namely, Mann [1967: 159 et seq.], Von Hoffmann [1970: 110 et seq.], Schlosser [1989: 163 et seq.], Redfern and Hunter on International Arbitration [2009: 173 et seq.], Schwab/Walter [2005: 360–361], and Poudret/Besson [2002: 83].

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Thus, to follow the traditional view, the arbitral tribunal shall determine the legal framework of the arbitration based upon a choice of law rule which designates the national law governing the arbitration. This view is shared by the traditional theories on the determination of the legal framework of the arbitration which, however, disagree on the choice of the national legal order that shall define this legal framework. Among the theories on the determination of the legal framework of the arbitration, the most current is the one that postulates the application of the law of the tribunal’s seat. It was the prevailing view until the end of the fifties.85 having been adopted by the aforementioned Resolution of the International Law Institute on the Arbitration in Private International Law (sessions of Amsterdam, 1957, and Neuchâtel, 1959).86 This view has arisen as the projection in the plane of the determination of the legal framework of the transnational of the jurisdictional conception of the arbitration (so in Pillet, Niboyet and, substantially, in Sauser-Hall).87 According to this theory, it is by virtue of the law of the arbitration’s seat that the arbitrators perform a jurisdictional function and, therefore, transnational arbitration is necessarily subject to this law.88 Among the supporters of the seat theory shall be mentioned Mann.89 Mann argues that arbitrators are unavoidably subject to the “jurisdiction to prescribe” of the country where the tribunal functions and that it is the law of the arbitration’s seat which decides if and under which conditions the arbitration is permitted. Only the country of the arbitration’s seat has such a complete and effective control over the arbitral tribunal. Therefore, the country of the arbitration’s seat is the only one which is in position to create the lex arbitri.90 The first criticism that is moved against the seat theory concerns its theoretic foundation, which lies in the jurisdictional concept of arbitration. It is based upon an assimilation of the transnational arbitral tribunals to the 85 86 87 88

89

90

See Bernardini [2000: 198] and Blessing [2000 no. 633]. Cf. Arts. 1, 2, 8, 9, 11, and 12. See Goldman [1963: 367–368] and Fouchard [1965: 364 et seq.]. Cf. Pillet [1924: 533 et seq.] and Niboyet [1950: 135]. See also Bartin [1930: 608–609], Mann [in Ann. Inst. dr. int. 63–I (1989) 170–171], and Reisman [1992: 1]. On the legal nature of arbitration see Lima Pinheiro [2005 § 18]. 1967: 160 et seq. See also Schnitzer [1958: 884–885], Park [1983], and Goode [2000: 250 et seq. and 256 et seq.]; further bibliographic references may be found in Sandrock [1992 footnotes 5–10]. 1967: 161 and 1985: 219.

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de Lima Pinheiro

national courts that the theory under scrutiny deems the arbitration process inserted in the legal order of the country of the tribunal’s seat.91 Klein and Fragistas correctly pointed out that the arbitrators do not exercise a public function and, consequently, the arbitration process is not necessarily subject to the law of the country where it is carried out.92 Albeit the arbitrators are entrusted with a jurisdictional power, this does not mean that they exercise, by delegation, a public function.93 By holding its sessions within the territory of a country, the arbitral tribunal does not exercise public powers of this country.94 It is beyond doubt that transnational arbitral tribunals are not part of the judicial organization of the country where they seat. It is often cited, in this context, the award rendered in the case icc no 2321 (1976), in an arbitration held in Sweden, in which before the allegation, rose by one party, of the interdependency of national courts and arbitral tribunals under Swedish law, the arbitrator stated: “As arbitrator I am myself no representative or organ of any State. My authority as arbitrator rests upon an agreement between the parties to the dispute…”.95 In the second place—and this objection applies especially against the arguments put forward by Mann –, the country where the arbitration process takes place has no exclusive jurisdiction to regulate and control the arbitration; this jurisdiction is concurrent with the jurisdiction of other countries.96 In case of conflict of national claims to regulate or control the arbitration, there is no a priori reason to give preference to the claim of the country where the arbitration process takes place. Therefore, no compelling reason, namely of International Law, obliges the arbitrators to apply the law of the arbitration seat.97 A third critical consideration is both of pragmatic nature and of legal policy. Often the place of the arbitration has no significant connection with the disputed relationship, being chosen for reasons of convenience or of opportunity, or even because it is a “neutral” ground (supra Introduction ii). In these cases, on the one hand, the country where the arbitration takes place has not, in principle, an interest in the regulation of the disputed relationship, 91 92 93 94 95 96 97

See Goldman [1963: 373], Fouchard [1965: 364 et seq.], Pierre Lalive [1976: 168 et seq.], and Batiffol/Lagarde [1983 no. 724 n. 1]. 1958: 281 et seq. and 1960: 8, respectively. See Lima Pinheiro [2005 § 18]. See also Goldman [1963: 373–374], Fouchard [1965: 366 et seq.], Schlosser [1989: 38], and Craig/Park/Paulsson [2000: 322]. Yb. Comm. Arb. (1976) 133. See Lima Pinheiro [2005 § 34]. See also Goldman [1963: 376] and Pierre Lalive [1976: 168 et seq.].

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either through its “substantive” law or through its conflicts law. The parties interest in the compliance with the law in force in the place of the arbitration also depends to a large extent on the circumstances of the particular case, namely on the probability of the enforcement of the award being sought in the local country or on the enforcement in another forum being blocked by the annulment in the local country. On the other hand, as Fouchard has emphasized,98 it does not make sense to impose on the arbitrators the application of the conflicts law of the arbitration place, where nor the parties or the arbitrators are familiarized with this law and there is not any significant relationship between the country of the arbitration place and the disputed relationship. In principle, the conflicts law of a country is only applicable to the relationships that have significant contacts with this country. In case of the arbitration seat being fixed by the arbitrators in a country that does not have significant contacts with the disputed relationship, the choice of law rule of this country may not have steered the conduct of the parties and, consequently, the resolution of the dispute based upon the law applicable by virtue of that choice of law rule would mean a kind of “legal roulette”.99 Lastly, seat theory may raise insurmountable practical difficulties within its conceptual framework. The arbitration may not have a single material seat, because the proceedings are held in different countries, or may even not have any material seat, because it is conducted entirely through correspondence or modern communication tools, such as the Internet.100 When understood in this sense, the seat theory is in manifest contradiction with the largely prevailing tendencies in the arbitration case law,101 in the rules 98 1965: 375. 99 See also Lew [1978: 253 et seq.]. 100 As pointed out by Batiffol/Lagarde [1983: 578] and Von Mehren/Jiménez De Aréchaga [1989a: 108]. Naturally, if one adopts a purely conventional concept of seat, the parties might, through the choice of the seat, determine the legal framework of the arbitration, even if the arbitration is entirely conducted elsewhere. The seat theory will than come close to the autonomy of the parties theory. In the text, we presuppose that the arbitration seat is not understood in a purely conventional sense. 101 See, in matter of State contracts, the awards in the cases Aramco (1958) [ilr 27: 117]; Sapphire (1963) [ilr 35: 136], in part; Texaco (1977) [ilr 53: 389]; Liamco (1977) [ilr 62: 140 and R. arb. (1980) 132]; and Aminoil (1982) [Clunet 109 (1982) 869]; among icc arbitrations, for example, awards rendered in the cases nos.1434 (1975) [Coll. icc (1974–1985), 262], 3043 (1978) [Clunet 106 (1979) 1000], 4381 (1986) [Coll. icc (1986–1990) 263] (see, on this award, Derains [1994: 269]), and 6294 (1991) [Coll. icc (1991–1995) iii 405 an. Hascher], in which the arbitrator stated clearly that “Un principe incontesté de la doctrine dominante établit que, contrairement au juge étatique, l’arbitre international n’est pas tenu de respecter les règles du droit international privé de son siège”.

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of the main arbitration centers, in the unification of the Law of Transnational Arbitration and in the national laws that adopt systems of framework or of non-intervention in matter of transnational arbitration.102 This is the reason why one may read, in the writings of the most acclaimed authors, that this theory is today “completely surpassed”.103 The Geneva Convention of 1961 has been a milestone in ruling out this theory, by establishing a special choice of law rule for the transnational arbitration which, in lack of a choice by the parties, allows the arbitrators to resort to the choice of law rule that “they deem applicable” (Art. 7/1). This understanding has been reinforced by the uncitral Arbitration Rules (former Art. 33(1), Art. 35(1) after the 2010 revision) and Model Law (Art. 28(1) and (2)). Notwithstanding, the seat theory is still advocated by a significant number of authors, in a formulation that is more flexible and more adjusted to the framework system prevailing in the main national legal orders. According to this formulation, arbitrators shall apply mandatory rules of the seat country, but the common procedural law and the general conflicts law are not, in principle, mandatory applicable in the arbitration.104 Most of these authors no more justify this theory on the jurisdictional concept of arbitration or in the exclusive jurisdiction of the country where the arbitral tribunal seats. In favor of the application of law in force in the country where the tribunal seats is now argued that it is this country which has the closest connection with the arbitration and that the decision has, for the purpose of recognition and enforcement, the “nationality” of this country.105 102 Cf. Lalive/Poudret/Reymond [1989: 397], Schwab/Walter [2005: 452], and Bernardini [2000: 198–199 footnote 39]. Lew [1978: 252] points out that this theory never had widespread acceptance. The issue is disputed in Germany – see Martiny [1999: 535 et seq.] and Junker [2000: 445 et seq.], who favor, in relation to conflicts law, the view expressed in the main text. 103 Cf. Pierre Lalive [1991: 42]; see also Blessing [2000 no. 633]. 104 May be understood in this sense the comment to the Art. 220 of the Second Restatement, Conflict of Laws [c], stating that the arbitration is governed by the local law of the State to which it has its most significant relationship, which is, as a rule, the State where the arbitration hearings were conducted and the award rendered. See also Park [1983: 22 et seq.], Sandrock [1992: 789 et seq. and 2001: 675, 677–678 and 680], Berger [1993: 89 et seq. and 478 et seq.], Sanders [1996 no. 158 compare 1977 no. 10.2], Redfern and Hunter on International Arbitration [2009: 179 et seq. and 234 et seq.], Schwab/Walter [2005: 407], Fernández Rozas [2002: 23, 46, 51 and 200], Poudret/Besson [2002: 85 and 608 et seq.], Blessing [2000 n.° 625 et seq.], but sustaining that the rules of the national arbitration laws are, in principle, non-mandatory; and Born [2009: 1248 et seq. and 1310 et seq.]. 105 —Among the rules of the main arbitration centers, only the wipo rules (2002) seem adopt this theory (Arts. 3 and 61/b). A few arbitration rules reserve the application of

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In the arbitration case law, even recent, the awards that follow seat theory, understood in this way, to determine the “law applicable to the arbitration”, are not rare.106 Even when understood in this way the seat theory is wrong. From a conceptual point of view, the seat theory is logically flawed. This theory postulates that the arbitrators are subject to the law of the seat in virtue of a choice of law rule that adopts this connecting factor. Since this rule does not belong to the Transnational Law of Arbitration, reality that the supporters of this theory generally deny, its source could only be national and, apparently, it will be the legal order of the seat country. Thus, the conclusion is introduced on the premises: one cannot say that the arbitrators are subject to the legal order of the arbitration seat without presupposing that the arbitrators are bound by a choice of law rule of this order. Second, it has been emphasized that, from the perspective of the parties and the arbitrators, no national legal order has an exclusive claim of applicability.107 Arbitrators have to pay attention to the directives that are emanated from the countries that have a significant relationship with the arbitration or in which the enforcement of the award may be sought, and not only to the directives of the country where the arbitration takes place. For this purpose, what matters is the scope of application claimed by national systems, not the applicability derived from any multilateral choice of law rule.108 Furthermore, as already emphasized, often the dispute does not have a close connection with the country where the arbitral tribunal seats, namely in all the cases in which parties or arbitrators choose a “neutral” country. The mere circumstance of the arbitration being carried out in the territory of a country does not constitute, by itself, a sufficient connection to justify a ­prevailing interest of this country in the regulation of the arbitration. The interest of the parties in the compliance with the directives emanated from the country where the arbitration is held also depends largely on the circumstances of the case. For these reasons, the arbitrators are not compelled to mandatory rules of the “law applicable to the arbitration” without specifying this law (for example, Art. 1/3 of the uncitral arbitration rules). 106 See namely, award in the case bp v. Libya (1973) [ilr 53 (1979) 297], iii/2; preliminary decision cci no. 7929 (1995) [Yb. Comm. Arb. 25 (2000) 312]; partial award icc no 8420 (1996) [Yb. Comm. Arb. 25 (2000) 328]; award Hamburg Friendly Arbitration de 29/12/1998 [Yb. Comm. Arb. 24 (1999) 13]; award no. 1930 Netherlands Arbitration Institute (1999) [Yb. Comm. Arb. 25 (2000) 13]. 107 Supra Introduction i. See further Loquin [1983: 299 et seq.], Schlosser [1989: 163 et seq.], and Benedetteli [1997: 914 et seq.]. 108 Cf. Schlosser [2002 § 1025 no. 4].

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give preference to the directives coming from the country where the arbitral tribunal seats.109 The theory of the autonomy of the parties in the determination of the legal framework of the arbitration has arisen as an expression of the contractual conception of the arbitration in the plane of transnational arbitration. This theory has found an early defender in Balladore Pallieri. This author infers from the “contractual character of arbitration” that all the acts that integrate the arbitration shall be regulated by the same law which regulates the arbitration agreement. This law is designated by the choice of law rule applicable to other contracts, namely the law chosen by the parties.110 The autonomy theory is widely accepted in the usa,111 prevailed in Germany until the reform of 1997, and is advocated by many authors in other countries.112 English authors also affirm generally that the parties may choose the law applicable to the arbitration,113 however, since they do not distinguish between the perspective of the English legal order—which limits the scope of such a “choice”114 –, and the point of view of the arbitral tribunal, it is far from clear that it is truly a choice of law. 109 See award icc no 10623 (2001) [asa Bulletin 21/1 (2003) 82], maxime no. 127. 110 1935: 340 et seq. 111 Cf. Splosna Plovba of Piran v. Agrelak Steamship Corp. (1974) [381 F. Supp. 1368] usdc s.d. New York; Remy Amerique v. Touzet Distribution (1993) [816 F. Supp. 213] usdc s.d. New York; Domke/Wilner [1984: 393 et seq. and 1998: 161 et seq.]; Varady/Barceló iii/Von Mehren [2003: 552–553]; and Born [2009: 1286–1287]. In this sense also points, although summarily, comment b to Art. 218 of the Second Restatement, Conflict of Laws. See further Hirsch [1979: 45–46]. The tendency to admit the choice of the law applicable to the arbitration has found some projection in the Supreme Court case law regarding the relations between federal law and state law – see Volt Information Sciences Inc. v. Board of Trustees of Leland Stanford Junior University (1989) [489 u.s. 468] and Mastrobuono Et Al. v. Shearson Lehman Hutton, Inc., Et Al. (1995) [514 u.s. 52] and, on these cases, Born [2014: 165 and 517–518]. Nonetheless, it is not well established the practical scope of the autonomy theory in the federal law – see Born [2014: 1534, 1576, and 3005–3006] and Macneil/Speidel/Stipanowich [1995 § 44.40.1]. 112 See Klein [1955: 212 et seq. and 223 et seq., 1958: 266 et seq. and 1967: 93 et seq.], Mezger [1960: 281 et seq.], Fragistas [1960: 7 et seq.], Sanders [1977 no. 10.2, compare 1996 no. 158], Batiffol/Lagarde [1983: 578], Luzzatto in Tarzia/Luzzatto/Ricci [1995 Art. 24 no. 4], Id. [1994: 261], and Nygh [1997: 6–7]. See further Moura Vicente [1990: 91 et seq.]. 113 Cf. Jonathan Hill [1997: 288 et seq.]; Cheshire, North & Fawcett [2008: 652], sustaining that the arbitration process, in lack of a choice of the applicable law, is regulated by the law of the place of the arbitration; Dicey & Morris [13.ª ed., 2000: 603]; Sutton/Gill [2003: 71]. 114 Art. 2/1 of the “English” Arbitration Act of 1996. See also Dicey, Morris and Collins [2012: nos 16–033 et seq.].

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Autonomy theory displays, in relation to the seat theory, the advantage of taking into consideration the interests of the parties, and contains a certain degree of truth. In effect, it is clear that the real will of the parties in respect of compliance with directives of a given country shall be honored, without meaning, however, that the parties may completely exclude the relevance of other countries directives. Nevertheless, the appeal to the “contractual character of the arbitration” is equivocal, insofar as, in the main systems, arbitration has a mixed nature contractual-jurisdictional, constituting a jurisdictional activity and leading to a decision with jurisdictional legal force.115 As a criterion for the determination by the arbitrators of the legal framework of the arbitration, this theory is not only limited but also not useful. Limited, because this theory only gives a solution where the parties have chosen the law applicable to the merits of the dispute or (which is rare) the law applicable to the arbitration.116 Not useful, due to the two reasons previously stated regarding the theory seat. First, the logical argument. The submission of the arbitration to the law chosen by the parties presupposes that the arbitrators are bound by a choice of law rule that adopts the autonomy theory. However, which is the source of this rule? In case it is a choice of law rule in force in the legal order chosen by the parties, its applicability presupposes, in its turn, the submission of the arbitration to the law chosen by the parties. And the circle is closed. Second, this theory fails when it postulates the exclusive submission of the transnational arbitration to the law of a given country. It has been previously pointed out that there is not for the parties and the arbitrators a singular national legal order that claims exclusive applicability and that the arbitrators have to take into consideration directives potentially emanated from different countries, as well as to the scope of application that national systems claim, instead of any multilateral choice of law rule that designates a given national system. In conclusion, to determine the legal framework of the arbitration arbitrators may have to pay attention to directives emanated from different countries, as well as to supranational directives and to Transnational Law of Arbitration.

115 See Lima Pinheiro [2005 § 18], with more references. 116 See Goldman [1963: 378–379] and Pierre Lalive [1976: 164 et seq.].

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Arbitrators as Addressees of Transnational Law of Arbitration as Well as of National and Supranational Directives The binding of the arbitrators by the directives emanated from the countries that have significant contact with the arbitration shall be understood in the light of the legal foundation of the arbitration and of the submission of the arbitration to the jurisdiction to prescribe of a plurality of countries. On the one hand, transnational arbitration may neither exclude the jurisdiction of (or the exercise of the jurisdiction by) national courts nor lead to an award with full jurisdictional effects without recognition by a national legal order. On the other hand, transnational arbitrations are embraced by the normative and institutional spheres of the countries that have a significant relationship with the arbitration. Arbitrators must rather take into consideration the concrete claims of applicability of the law of the interested countries, than apply any multilateral choice of law rule (such as the ones that adopted the seat theory or the autonomy theory). The activity of the arbitrators is further embraced by supranational powers of regulation, namely the powers exercised by international organizations of universal and regional scope. It derives therefrom that the arbitrators have to pay attention to the directives of these organizations. Arbitrators shall always comply with the directives emanated from international organizations of universal scope. Arbitrators shall also comply with the directives from regional organizations (such as the European Union), whenever the disputed relationship is entirely inserted within its social sphere. Thus, the authors have been asserting that Resolutions of the United Nations Security Council that (at least in part) have normative character shall be respected by the arbitrators.117 The same shall be said about the application of the European Union Competition Law even if the law applicable to the merits of the dispute is the law of a third country and the parties do not raise the issue.118 Differently, the arbitrator shall have a margin of discretion, or shall I rather say a margin of evaluation, of the directives emanated from regional organizations where the disputed relationship displays at least one significant connection with a third country. This margin of evaluation allows the taking into

B)

117 See, for a convergent view, Landy-Osman [1991: 609 e 618], Hans Van Houtte [1997: 168], and Grigera Naón [2001: 323 footnote 357], referring to an unpublished icc award. 118 See, in favor of the ex officio application of the eu Competition Law, Mello [1982: 362– 363], Avillez Pereira [1994: 331–332], Hanotiau [1997: 48], Derains [1997: 76–77], Philip [2002: 530], and Dolmans/Grierson [2003: 44 e 46].

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consideration the legitimate interests of the parties and of the countries at stake.119 The exercise of national powers of regulation of the arbitration has been characterized by self-restraint; the main systems confine themselves to outline the legal framework of the arbitration and to delegate to the parties and to the arbitrators the determination of most of the rules that shall integrate that legal framework. The chance of contradictory directives emanated from different countries and the fact that transnational arbitration is not legally founded in a single national legal order confer to the arbitrator a margin of evaluation of these directives that is not compatible with an absolute submission to the law of a given country. Arbitrators are not also, in principle, directly bound by international conventions of unification.120 Arbitrators are not, in principle, subjects of International Law or, even if one admits a limited international subjectivity of individuals and legal persons of national law,121 are not subjects of the obligations created by international conventions of unification in the light of their text, purpose and system of sanctions. Arbitrators shall take into account the unified rules applicable to or in the arbitration on the same footing that rules of domestic source in force in the legal order of the Contracting States. Supranational directives applicable to the arbitration are also scarce and generally have as object short ranging issues related to the merits of the dispute. These factors result in transnational arbitral tribunals enjoying a wide autonomy. This wide autonomy allows, from the point of view of the parties and of the arbitrators, the legal framework of the arbitration to be in first line defined by contractual self-regulation and by the Transnational Law of Arbitration (supra ii).122 Arbitrators shall apply this Transnational Law of Arbitration, albeit this duty is limited by the need of taking into consideration some national and 119 See Blessing [2000 no.764], Lima Pinheiro [2005 § 58], and the icc award no 6475 (1994) [icc International Court of Arbitration Bull. 6/1 (1995) 52]. 120 Cf. Mayer [1992: 276 et seq.]; Kassis [1993: 516 et seq.]; Lima Pinheiro [1998 § 11 D and 2005 §§ 51 et seq.]; Zürcher Komm/Heini [2004 Art. 187 nos. 3 and seq.]; and, regarding the unified conflicts law, also Martiny [1999: 533], Junker [2000: 454 et seq.], and Kropholler [2006: 50]. Compare Moura Vicente [2002: 401 and 406]. 121 See, namely, Daillier/Forteau/Pellet [2009: nos 417 et seq.], Seidl-Hohenveldern/Stein [2000: 177 et seq.], Brownlie [2003: 529 et seq.], Jorge Miranda [2012: 213 et seq.], and André Gonçalves Pereira/Fausto De Quadros [1993: 378 et seq.]. 122 See Stein [1995: 94 et seq.] and Lima Pinheiro [1998 § 11 D].

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supranational directives. Therefrom also results a margin of evaluation of transnational directives. From the point of view of the parties and of the arbitrators, transnational arbitration may be primarily envisaged as an autonomous method of dispute resolution, which, a posteriori, is susceptible to a rather limited control by national courts, namely by the court holding jurisdiction to the award review, to the recognition of a “foreign” arbitral award and to the enforcement.123 The legal framework of arbitration results then from the confluence of sources which operate in different legal orders and normative planes. The determination of the legal standards primarily applicable by the arbitral ­tribunal demands, to a large extent, a mediating activity of the arbitrators who, for this purpose, shall inquire about the content of these sources and evaluate the directives thereby contained. In particular, arbitrators have to determine the relevant national directives and to resolve cases of conflict of directives emanated from different countries or of national directives with Transnational Law of Arbitration. When performing these tasks, arbitrators shall not act arbitrarily, but according to suitable criteria, which conform themselves with the legal concepts that are shared in the international community and that allow a fair evaluation of the interests, policies and goals at stake. The determination of the national directives that the arbitrators shall apply requires a balancing of these interests, goals and values.124 This balancing is also needed for the resolution of conflicts that may occur between national directives. Following this line of reasoning, the method for the determination of the relevant directives is the balancing of typical and legitimate interests of the parties, of legitimate and reasonable interests of the countries, of goals of the world society in course of formation and of values of transnational public policy. This method is able to lead to the formulation of guiding criteria for the balance of these values, which are characterized by the flexibility and by a high degree of indetermination, in order to allow the taking into account of all the circumstances of the case. Parties have a typical interest in the performance of the arbitration agreement, which shall lead to the resolution of the disputes by the arbitrators. Furthermore, parties are normally interested in a valid award, which will not 123 See, for a general view, Pierre Lalive [1977: 63 et seq.] and Von Mehren/Jiménez De Aréchaga [1989b no. 13]. 124 The resort to a Rule of Reason has also been proposed by Schnyder [1995: 303–304], but solely with respect to the applicability of singular mandatory rules by the arbitral tribunal.

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be set aside and that will be enforceable. This consideration leads us to take into account, in the first place, the directives of the country where the enforcement of the award may be sought, insofar as compliance with them is a condition of enforceability.125 Where the enforcement may be prevented by the setting aside of the award in another country, this criterion also justifies the consideration of the directives of this other country.126 Thus, it is widely accepted that the commands of the country where the enforcement of the award may be sought shall be taken into consideration.127 Some rules of the arbitration centers also point to a certain extent in this direction (Art. 41 icc and Art. 32(2) lcia).128 The above said does not mean, however, that the arbitrators shall comply with national directives whenever non-compliance may jeopardize the enforceability of the award. Arbitrators have to balance the interest in a valid and enforceable award with other parties’ interests and with the interests of countries at stake. Bearing in mind the high rate of voluntary performance of arbitral awards it is easily understandable that parties’ interest in the resolution of the dispute by the arbitrators may be to a certain extent independent from the enforceability of the award. This interest may justify, for example, that the arbitral tribunal does not apply the rule of the country where it seats determining the non-arbitrability of the dispute, where the resolution of the dispute by the arbitrator is compatible with the principles of Transnational Law of Arbitration,129 even if that non-application brings the risk of annulment of the award by the courts of the arbitration seat and, therefore, jeopardizes the enforceability of the award in another country. It is not possible to formulate a more determinate criterion in this respect, a case-by-case evaluation being unavoidable. Furthermore, frequently it is not foreseeable in which country the enforcement of the award may be sought. Before the chance of enforcement in several countries, the interest in obtaining an enforceable award does not justify, by 125 See, for a convergent view, Pierre Lalive [1967: 650, 1976: 162 and 1991: 51], Lalive/Poudret/ Reymond [1989: 396], Bucher [1989: 95], Nygh [1997: 6], Clay [2000: 637–639] and Botelho Da Silva [1999 passim and 2004: 30], with exclusion of the directives of any other country. Compare Poudret/Besson [2002: 648]. 126 See also Raeschke-Kessler/Berger [1999: 123]. 127 Compare Blessing [2000 no. 799–800]. 128 On Art. 35 of icc rules, see analysis done by Lima Pinheiro [2005 § 55]. 129 See Lima Pinheiro [2005 § 23].

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itself, the compliance with the directives emanated from just one of those countries.130 This has been recognized in some awards rendered in icc arbitration.131 In the arbitration of disputes arising from State contacts, between a State and a private person national from another State, there are often strong reasons for the non-application of some mandatory rules either of the “enforcement country” or of the country where the tribunal seats, even if such non-application constitutes a ground for refusal of recognition and enforcement of the award.132 In effect, in the arbitrations started by the private party, the “enforcement country” is, in first line, the Defendant State and this State may eventually raise the immunity of enforcement regarding its assets located in other countries. Therefore, the enforcement of an award rendered against the State party can be, a priori, excluded, being then irrelevant, from the enforceability point of view, the application or non-application of such mandatory rules by the ­arbitral tribunal. In these circumstances, the arbitral tribunal shall be exclusively guided by considerations of justice. The protection of the parties’ interests also justifies the taking into consideration of the parties will in respect to the compliance with directives from a given country. Thus, where the parties express their will regarding the application to the arbitration of rules emanated from a given country, these rules shall be applied as far as they are compatible with the transnational public policy of arbitration and their application does not conflict with directives from another country that shall prevail. The consideration of national policies postulates that the directives of the countries having a legitimate and reasonable interest in the regulation of the arbitration or of a part of it shall be honored. The interest is legitimate where it is founded in an internationally valid jurisdiction ground,133 deserves protection in the light of International Law and derives from the pursuance of social policies. The countries with a legitimate interest in regulating the arbitration or a part of it are mainly the country where the arbitration takes place or is conventionally seated, the country where both parties have their seat, habitual residence or relevant place of b­ usiness and, in what concerns specifically the merits of the dispute, the countries that have a significant relationship with the disputed relationship. 130 See also Grigera Naón [2002b: 140–141]. 131 See, namely, cci no. 6379 (1990) [Coll. icc iii 134] and no. 10623 (2001) [asa Bulletin 21/1 (2003) 82–111]. 132 See Paulsson [1981: 376 et seq.] and Lipstein [1988: 192]. 133 See also Hans Van Houtte [1997: 168], Blessing [2000 no. 807], and Grigera Naón [2001: 323–324 and 338–339].

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The reasonableness of the interest takes into account the value standards prevailing in the international community.134 The international community is here understood in a broad sense, which embraces the whole of social relationships, in the sense of world society, although still in a formative stage.135 It is namely reasonable the interest of a country in the application of its competition law to practices that occur in its territory or produce effects in its market, provided that it expresses policies in conformity with the value standards prevailing in the international community.136 The same may be said about the interest of a country in the compliance with its exchange rules, where these pursue goals generally recognized by the international community.137 Albeit the point is more controversial,138 I believe that the interest in the application of embargo or boycott statutes may be legitimate if it is in conformity with the International Law and may be reasonable if it pursues goals generally recognized by the international community. The issue of the reasonableness of the interest has been frequently raised regarding anti-corruption statutes. The fight against corruption is a legitimate goal widely recognized in the international community, but the means employed are not always reasonable.139 Even where a legitimate and reasonable interest underlies the national directive, its relevance to the arbitral tribunal may be excluded by transnational 134 For a convergent view, see Blessing [2000 nos. 808 et seq.] speaking about a criterion of “application-worthiness”, and Grigera Naón [2001: 336–337], with resort to the “functional methodologies” developed by North American authors. Fouchard/Gaillard/Goldman [1996: 866 et seq.] also appeal to values widely accepted in the international community, but have essentially in view only the moral values. 135 On the reasonableness of the States’ interest in the applicability of certain mandatory rules, see Lima Pinheiro [2012: 141–142]. 136 —Drobnig [1987: 116] asserts the existence of a wide agreement in this respect. See, in particular, judgment of the us Supreme Court in the aforementioned case Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc. (1985). 137 This is the case of the exchange rules kept or enacted in conformity with the Agreement for the International Monetary Fund, which are object of special choice of law rule contained in paragraph b of section 2 of Art. viii of this Agreement. See Berger [1997: 113 et seq.]. On this rule see Lando [1984: 398], Moura Ramos [1991: 706–707 footnote 702], Lima Pinheiro [1998 § 20 H], and Berger [1997: 118 et seq.]. 138 See Racine [1999: 341–342]. 139 See, in respect to the case Hilmarton, award icc no 5622 (1988) [R. arb. (1993) 327], and judgments of the Court of the Canton of Geneva 17/11/1989 [R. arb. (1993) 342], and of the  Swiss Federal Court 23/6/1992 [R. arb. (1993) 691]; see further judgment usca Ninth  Circuit, in the case Northrop Corporation v. Triad International Marketing (1987) [811 F.2d 1265].

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public policy.140 The arbitral tribunal is not bound by national directives, either in matters of procedure or in relation to the merits of the dispute, that are contrary to transnational public policy.141 In most cases, a directive contrary to transnational public policy is also contrary to the value standards prevailing in the international community, thus excluding the reasonableness of the interest. Therefore, the arbitral ­tribunal shall not apply rules that establish a “racial” or religious discrimination, even if they are in force at the seat of the arbitration and claim applicability.142 Notwithstanding, there are conceivable cases in which the transnational public policy constitutes an autonomous ground of irrelevance of national directives. This may be the case of some measures of State intervention on contracts concluded by autonomous public entities that are devoted to benefiting theses public entities to the detriment of the foreign party.143 C) Solution of Conflicts of National Directives It follows from the above that arbitrators shall, in principle, comply with relevant national directives. From the absence of international rules of coordination of national systems results the possibility of concurrence of national claims of regulation of the same transnational arbitration or of lack of claim to regulate a transnational arbitration. National regulation claims of a transnational arbitration may be compatible among each other. That is what happens in most cases. In other cases, however, the directives are contradictory, i.e., they establish duties and/or permissions of conduct of arbitrators or of parties in the context of the arbitration that are incompatible. The concurrence of claims of regulation leads then to a directives conflict. When faced with conflicts of national directives arbitrators shall perform a balancing of interests of the parties, policies and interests of the countries involved and the goals of the world society in formation.144 For this purpose, the arbitral tribunal shall, first of all, inquire into the policies underlying the competing national directives. At the second stage, the arbitration tribunal shall determine the interests that will be satisfied by complying with each of the national directives. After determining these interests, the arbitral tribunal shall analyze its relative weight. 140 Cf. Fouchard/Gaillard/Goldman [1996: 662, 667 and 875–876], Seraglini [2001: 322–323 and 417–418], and Grigera Naón [2001: 323 and 2002a: 614–615]. 141 On transnational public policy, see Lima Pinheiro [2005 § 47], with more references. 142 Cf. Fouchard/Gaillard/Goldman [1996: 876]. 143 See Lima Pinheiro [2005: § 57 and 2012: 129 et seq.], with more references. 144 A convergent suggestion, in respect to the concurrence of overriding rules [Eingriffsnormen] of different countries, is already found in Schnyder [1995: 307].

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In some cases, it will not be possible to rank the national interests at an abstract level. However, even if it is possible to assign a greater weight to a given interest in detriment to another, the balance decision shall always be taken having in mind all the circumstances of the case. Depending on the circumstances of the case, the balance may lead to the complete sacrifice of the interests in the application of a directive in favor of the interests in the application of another directive, as much as point to a harmonization of these interests, which postulates reciprocal adjustments of both directives or the unilateral adjustment of one of them. In the second case, one shall follow the proportionality principle (in broad sense) as applied in cases of conflicts of fundamental rights and of contradiction of principles: the restriction of a directive shall confine itself to the strictly necessary and shall be materially adjusted to the benefit that is obtained with the compliance with the other directive. Coordination of the Transnational Law of Arbitration with National Directives The application of Transnational Law of the Arbitration in conformity with national directives does not raise any problem. The arbitral tribunal shall also apply the Transnational Law of Arbitration that goes beyond national directives, since arbitrators have the duty to comply, as far as possible, with transnational standards applicable to the arbitration. In case of conflict of Transnational Law of Arbitration with relevant national directives, it is not possible to rank at an abstract level these sources. One may say that, in principle, Transnational Law of Arbitration shall not be applied against relevant national directives. Nonetheless, it is conceivable that, in exceptional circumstances, it may be justified to apply Transnational Law of the Arbitration against directives, in principle relevant, of one of the countries in contact with the arbitration. This possibility arises where the parties do not have an interest in the compliance with these directives and the interest of the country at stake, although reasonable, is neither common to the other countries involved nor results from an especially significant relationship with the arbitration.

D)



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Van Den Berg, A. 1981 – The New York Arbitration Convention of 1958. Towards a Uniform Judicial Interpretation, Deventer et al. Van Houtte, Hans 1993 – “Changed circumstances and pacta sunt servanda”, in Transnational Rules in International Commercial Arbitration, ed. by Emmanuel Gaillard, 105–123, Paris. 1997 – “Trade Sanctions and Arbitration”, Int. Bus. Lawyer (April 1997) 166–170. Várady, Tibor, John Barceló e Arthur Von Mehren 2003 – International Commercial Arbitration: A Transnational Perspective, 2nd ed., St. Paul, Minn. Vaz, Isabel 1990 – Direito Internacional Público e Lex Mercatoria na disciplina dos contratos internacionais, Lisboa. Vicente, Dário Moura 1990 – Da arbitragem comercial internacional. Direito aplicável ao mérito da causa, Coimbra. 2002 – “Resolução extrajudicial de conflitos de consumo com carácter transfronteiriço”, in Direito Internacional Privado. Ensaios, vol. I, 393–414. Zanetti, Alicia 2002 – “Arbitraje comercial internacional en el Mercosur”, in Avances del Derecho Internacional Privado en América Latina. Liber Amicorm Jürgen Samtleben, 633–666, Montevideu. Zürcher Kommentar zum IPRG 2004 – Kommentar zum Bundesgesetz über das Internationale Privatrecht (IPRG) vom 18. Dezember 1987, 2nd ed., ed. by Daniel Girsberger, Anton Heini, Max Keller, Jolanta Kren Kostkiewicz, Kurt Siehr, Frank Vischer and Paul Volken, Zurique, Basileia e Genebra.

chapter 24

The Challenges of Taking Evidence in International Commercial Arbitration: The Problem of Legal Privileges Tatjana Shterjova 1 Introduction International commercial arbitration is much praised primarily for its ability to meet the expectations of parties and counsels coming from diverse legal backgrounds and cultures, and providing all them with an opportunity to feel ‘home-based’ in the course of the proceedings. The arbitration process must adapt to the differing needs of parties coming from diverse legal backgrounds and cultures, and alleviate (or completely eliminate) the feeling of discomfort each party gets when being faced with rules and procedures unfamiliar to her procedural background. This is particularly troublesome when it comes to the organization of the arbitration proceedings and especially, the evidence gathering process. The rules governing these issues rarely provide precise answers to the myriad of issues that usually arise regarding the organization of the arbitral process, and the fact-finding activities leading to a decision on the merits of the dispute, or even if they do—they are much less elaborate than rules governing the procedure and evidence before national courts. The problem is even more emphasized if the fact is borne in mind that the issues relating to the evidence gathering process are very often covered with a stark contrast in the perception in civil-law and common-law countries. One striking example of this problem is the issue of legal privileges—concerning the right of a party to withhold certain information and documents from the arbitration proceedings, without having to bear negative consequences for its omission. This chapter will focus on the problem of legal privileges in arbitration proceedings, starting with the challenges related to the evidence gathering process in international commercial arbitration generally, the nature of legal privileges, the problem of determining the appropriate applicable law, and the prospects of its further development—the possibility of devising an autonomous set of rules regulating this issue, in order to overcome the problems.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_025

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The Challenges of Taking Evidence in International Commercial Arbitration

Although much is said and written on international commercial arbitration, the conduct of the procedure itself and the diversely developed arbitration practices usually stay hidden behind the doors of the arbitration venues. Most of the theoretical analysis and case-law regarding the conduct of the arbitration proceedings, and more importantly, the fact-finding process, are derived not from commercial arbitration, but from other forms of international dispute resolution.1 There are only rare attempts to open the doors on the international arbitral process for the world to look behind.2 The various issues related to the evidence gathering process, including legal privileges, can be viewed differently depending on the procedural background of the subject applying them. The responsibility for evidence presentation, admissibility of evidence, the obligations to present evidence of benefit of the opposing party, the methods and standards of proof, may all be differently observed depending on the ‘procedural background’ of the parties, their counsels and the arbitrators.3 Namely, a party or counsel coming from common law jurisdiction may be accustomed on relying primarily on oral testimony in proving its assertions, tested by cross-examination, while their civil law counterparts would probably give greater weight to contemporaneous documents.4 Furthermore, it is customary for a person originating from a common law jurisdiction to expect the tribunal to oblige the parties to present all relevant evidence, including documents which are adversary to their interests, and accordingly, to draw adverse inferences from non-production of those documents. By contrast, such competences of the arbitral tribunal may be considered excessive by a party/counsel originating from a civil law jurisdiction—they 1 The only possibility to get an insight on the manner arbitral tribunals are conducting arbitral proceedings and their decisions regarding evidentiary issues are, for instance the decision of the Iran-United States Claims Tribunal, or arbitral proceedings with the participation of a state authority as a party in the proceedings. 2 Such example is the survey on this issue prepared by the Queen Mary University of London, 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process, http://www.arbitration.qmul.ac.uk/docs/164483.pdf (last accessed on 26.12.2015). 3 For a more comprehensive discussion on the differences in the fact-finding process between common law and civil law procedures, see Yves Derains, “La Practique de l’Administration de la Prevue dans l’Arbitrage Commercial International”, Revue de l’Arbitrage, 2004, pp. 781–802. 4 Jeffrey Waincymer, Procedure and Evidence in International Arbitration, Kluwer Law International, The Hague, 2012, p. 746.

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may feel more comfortable in the course of the proceedings if it is left only to the parties to determine what information they want to rely upon, and they are not compelled to produce adverse evidence, or to bear negative consequences for the failure thereof.5 The parties prefer arbitration as a dispute resolution method, amongst others, because it gives the parties an opportunity to control the procedure,6 or simply, the fact that the parties have opted-out of their national dispute resolution system should not automatically mean that the parties are willing to relinquish some procedural guarantees they enjoy in their national systems. Even if the arbitrators are not familiar with some particularities of the evidence gathering process in the party’s national legislation, the party is nevertheless entitled to reasonably expect to bring with her in the arbitration proceedings much of the rights it enjoys under its national law,7 relying on the expectation that information which was privileged at the time when it was created should remain such in the whole course of the proceedings. For that reason, an arbitral tribunal, when exercising its wide discretionary powers with respect to procedural rules, must apply rules which are familiar or at least acceptable to the parties, taking into account their legal background.8 Although the national evidentiary rules are not directly or indirectly applicable to arbitration proceedings, yet as a matter of practice both arbitrators and legal counsel may be affected by and inclined to follow evidentiary approaches of their national law.9 The arbitration rules themselves rarely provide precise answers for these evidentiary issues. Arbitration rules use a wide formulation authorizing the tribunal to determine the appropriate mode for conducting the proceedings— including the powers of the tribunal to determine the applicable law or to apply its own rules of evidence.10 In the same manner, the uncitral Model 5

As Waincymer rightly points out, many of the features of each of these procedural systems are oversimplified and generalized, and at other times, they are misleadingly simplistic— see Waincymer, op.cit., pp. 746–748. However, the result still remains that there are differing positions on a variety of issues between parties coming from different jurisdictions. 6 Loukas Mistelis, “International Arbitration—Corporate Attitudes and Practices—12 Perceptions tested: Myths, Data and Analysis: Research Report”, American Review of International Arbitration, Vol. 15(3–4), 2006, pp. 525–590. 7 Patricia Shaughnessy, “Dealing with Privileges in International Commercial Arbitration”, Scandinavian Studies in Law, Vol. 51, 2007, p. 452. 8 Karl-Heinz Böckstiegel, Stefan Kröll, Patricia Nacimiento, Arbitration in Germany: The Model Law in Practice, Kluwer Law International, The Hague, 2007, p. 289. 9 Shaughnessy, op.cit., p. 458. 10 uncitral 2012 Digest of Case Law on the Model Law on International Commercial Arbitration, p. 101. In fact, the arbitral rules usually leave the possibility for the tribunal to use

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Law on International Commercial Arbitration provides that in the absence of an express agreement by the parties ‘…the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such manner as it considers appropriate’.11 This power conferred on the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.12 Certainly, parties, driven by the primacy of their autonomy of will, can fashion the proceedings as they see fit,13 and make individualized arrangements governing the arbitral process, but in practice, that rarely occurs. Although parties are free to agree on specific procedures regarding the evidence gathering process, it is highly unlikely that at the outset they will agree on the admissibility of particular evidence, and the possible law to be applicable upon a privileges objection. Either due to lack of anticipation of forthcoming arbitration, laziness, fear of conflict, or some other rationale, the parties rarely use their authorization to choose the applicable law.14 Without an express choice of procedural, substantive or privilege law by the parties, the arbitrators are not required to apply national rules of civil procedure or evidence.15 That leaves the arbitrators the possibility to use wide discretion in deciding evidentiary issues, allowing the development of a set of rules which progressively rise to the level of a standardized arbitration procedure.16 This discretion frees the arbitrators from adhering to a particular approach in deciding evidentiary all appropriate means—see for example icc Rules of Arbitration, art. 22, dis-Arbitration Rules 98, art.24; scc Arbitration Rules 2010, art. 19; viac Rules of Arbitration, art. 28; etc. 11 See art. 19, para. 2 of the uncitral Model Law on International Commercial Arbitration— hereinafter uncitral Model Law. 12 See uncitral Model Law art. 19, para. 2. Nevertheless, arbitration practitioners themselves point out that in determining the procedural framework at the outset of proceedings, arbitrators should take parties’ expectations more into consideration and tailor the procedure to the particularities of each case, rather than simply following general procedural templates—see Queen Mary University of London, 2012 International Arbitration Survey, p. 11. 13 Ali Z. Marossi, “The Necessity for Discovery of Evidence in the Fact-Finding Process of International Tribunals”, Journal of International Arbitration, Vol. 26, No. 4, 2009, p. 511. 14 Rachel Reiser, “Applying Privilege in International Arbitration: The Case For A Uniform Rule”, Cardozo Journal of Dispute Resolution, Vol. 13, 2012, p. 676. 15 Jose Alvarez, “Evidentiary Privileges in International Arbitration”, in: International Arbitration 2006: Back to Basics?, (ed. Albert Jan van den Berg), Kluwer Law International, 2006, p. 663. 16 See George M. von Mehren, Claudia T. Salomon, “Submitting Evidence in an International Arbitration: The Common Lawyer’s Guide”, Journal of International Arbitration, Vol. 20, No. 3, 2003, p. 285.

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issues, and providing them the option to “pick and choose” the most appropriate solution.17 However, concerns could be raised for the excessive arbitral discretion in deciding certain evidentiary issues: …leaving such issues to arbitral decision-making during the proceedings leads to the ‘dark side of [arbitral] discretion’ which lies in the discomfort that a party may feel when arbitrators make up their own rules as they go along, divorced from any precise procedural canons set in advance.18 In deciding evidentiary issues, arbitrators should in fact find the right balance between the efficiency of the procedure and the due process guarantees in the arbitration proceedings—the rights to be heard and being provided an equal treatment in the procedure, or as they are usually referred to—the “Magna Carta” of arbitration.19 ‘A tribunal that restricts a party’s right to tender particular evidence and then concludes that it has not met its burden of proof, may be rightly or wrongly accused of failing to afford the party an opportunity of reasonably presenting its case’.20 However, although these procedural guarantees should provide a party the full opportunity to present its case, it does not mean that that party will be able to present all of the evidence it deems appropriate— on the contrary, the arbitrators are only obliged to provide the parties with a reasonable opportunity, as long as the party’s position in the arbitration proceedings does not contravene the efficiency of the proceedings, and does not lead up to delays and obstructions in the proceedings.21 3

The Nature of Legal Privileges

It is a generally recognized principle that reliance by a party on a fact requires that party to prove that fact, or otherwise that party will lose on the particular claim or defense. In cases when that evidence is in the possession of the opposing party, given that the arbitrators do not have the compulsory power to oblige 17 18 19

20 21

Gaillard, Emmanuel, Savage, John (eds.), Fouchard, Gaillard, Goldman on International Commercial Arbitration, The Hague, Kluwer Law International, 1999, p. 689. William W.Park, “Arbitration’s Protean Nature: The Value of Rules and the Risks of Discretion”, Arbitration International, Vol. 19, 2003, No. 3, p. 286. Howard M. Holtzman, Joseph E. Neuhaus, A Guide to the uncitral Model Law on International Commercial Arbitration: Legislative History and Commentary, Kluwer Law and Taxation Publishers, Deventer Boston 1989, p. 564. See Waincymer, op.cit., p. 762. Holtzman, Neuhaus, op.cit., pp. 551–552.

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the opposing party to produce the evidence, the only possibility is to draw adverse inferences from the party’s failure to produce the requested evidence. Apart from raising procedural objections (concerning the contents of the request for production, or the time-limit in which it has been submitted), there are number of reasons that might affect the tribunal’s decision to order a party the production of specific document or a group of documents concerning the admissibility, relevance, materiality and weight of the documents requested—such as the existence of a compelling commercial or technical confidentiality, grounds of special political or institutional sensitivity, considerations of procedural economy, proportionality, fairness or equality, and legal impediments or privilege.22 Regardless of their regulation in different legal systems, and their variations in substance, scope, breadth and ownership, each privilege reflects a judgment that the social value of excluding evidence outweighs the influence such evidence may have in ascertaining truth in a particular case.23 Rules of privileges are premised on the concept that, in order to further certain interests, confidentiality or non-disclosure is considered more important than the value of the evidence.24 Although different types of privileges can be identified (including for instance professional privileges, self-incrimination, family testimony, business secrets or settlement discussions), legal privileges are probably most likely to be introduced in arbitration proceedings. They relate to communication between the party and its attorney, and are grounded on the need to secure open communications between professionals and the party that has engaged them, in the context of contemplated or actual adjudicatory process, with the purpose to reassure the person seeking legal advice that his communication with his legal advisor will not be used against him at a later date. Legal privileges, concerning the right of a party to withhold certain information and documents from the arbitration proceedings, without having to bear negative consequences for its omission, might prove to be one of the most troublesome objections that an arbitral tribunal might face. This is partly due to the stark contrast in the perception of the mere concept of privilege in civillaw and common-law countries. While civil-law countries tend to regard privilege as part of the attorney’s professional secrets, common-law countries link the privileges to the party’s right to proper legal advice.25 22 See iba Rules on the Taking of Evidence in International Arbitration, 2010, Art. 9.2. 23 Richard M. Mosk, Tom Ginsburg, “Evidentiary Privileges in International Arbitration”, International and Comparative Law Quarterly, Vol. 50, 2001, p. 346. 24 Mosk, Ginsburg, op.cit., p. 345. 25 Michelle Sindler, Tina Wustemann, “Privilege Across Borders in Arbitration: Multijurisdictional Nightmare or a Storm in a Teacup?”, asa Bulletin, Vol. 23, No. 4, 2005, p. 613.

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Both concepts arise from the party’s right to a proper defense, as necessary to allow a client to seek legal advice in full confidence that the information given to the lawyer will not be used against him. However, these concepts might cause additional problems for the arbitral tribunal when deciding upon such an objection in the course of the proceedings. Namely, under civil law’s notion of privilege, it is most tightly connected to the counsel providing the legal advice—and not the party whose interests that counsel represents, and therefore, it would be reasonable that the quest for the applicable law in regard of the issue of legal privilege should have its starting point from the law applicable to the counsel. Furthermore, since the privilege belongs to the counsel, any conduct by the party (including the selection of an applicable procedural regime that does not recognize privileges) could hardly be seen as a waiver of the privilege of certain information or documents.26 Contrarily, common-law privilege is a right belonging to the party, which is primarily intended to protect the party from the comprehensive discovery rights of the opposing party. Hence, any determination of privileges must be viewed in terms of the rights of the party concerned.27 Another stark difference between these two concepts would be the treatment of the information and documents concerning an in-house counsel of a party, and providing an answer to the question whether these corporate lawyers are cleared from the influence of the client, or they are just parties to a simple employer-employee relationship. While in common-law jurisdictions corporate lawyers are admitted to the Bar and are subject to the accepted code of ethics, thereby being undoubtedly covered by the privilege concepts, a party might not be entitled to presume that automatically in a civil-law jurisdiction, although exceptions exist.28 4

The Problem of Determining the Applicable Law to Privileges in International Commercial Arbitration

In light of the aforementioned, the tribunal’s determination of the applicable law regarding possible claims of privilege may lead to detrimentally differing 26 27 28

Javier H. Rubinstein, Britton B. Guerrina, “The Attorney-Client Privilege and International Arbitration”, Journal of International Arbitration, Vol. 18, No. 6, 2001, pp. 593–594. Klaus Peter Berger, “Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion”, Arbitration International, Vol. 22, No. 4, 2006, p. 504. For a comprehensive overview of the availability of protection from disclosure of communications between in-house counsel and the officers, directors or employees of the companies they serve on a country-by-country basis, see Lex Mundi, In-House Counsel and the Attorney Client Privilege, August 2009, http://www.lexmundi.com/images/ lexmundi/PracticeGroups/LADR/Attorney_Client_Update8.09_Main_Document.pdf (last accessed on 28.06.2014).

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consequences to the outcome of the proceedings. The assignment rising before the tribunal is even more challenging having in mind that regulation of the issue of privilege can hardly (or more precisely almost never) be found in arbitration statutes and rules, and even when they are—it is with using broad, general terms as to their applicability. For instance, the iba Rules provide that the Arbitral tribunal shall, at the request of a party or on its own motion exclude from evidence or production any document, statement, oral testimony or inspection due to legal impediment or privilege under the legal or ethical rules determined by the tribunal to be applicable, without further guidance as to the manner of determining the applicable law. Instead, the iba Rules only provide that in considering issues of legal impediment or privilege the arbitral tribunal may take into account any need to protect the confidentiality of a document created or statement or oral communication made in connection with and for the purpose of providing or obtaining legal advice; any need to protect the confidentiality of a document created or statement or oral communication made in connection with and for the purpose of settlement negotiations; the expectations of the parties and their advisors at the time the legal impediment or privilege is said to have arisen; any possible waiver of any applicable legal impediment or privilege by virtue of consent, earlier disclosure, affirmative use of the document, statement, oral communication or advice contained therein, or otherwise; and the need to maintain fairness and equality as between the parties, particularly if they are subject to different legal or ethical rules (art.9(3) of the iba Rules). When making the choice, the arbitrators should bear in mind several considerations—administrative ease, the equal treatment of the parties, their reasonable expectations, and providing them with a predictable system of selecting the applicable privilege law.29 So, how should an arbitral tribunal determine the issue of privilege? The starting point might be a distinction of two possible qualifications—the tribunal may decide to take a procedural or a substantive approach to this issue. On the one hand, the right to legal privileges may be viewed as procedural issue, since it limits the procedural possibilities for establishing the truth, and it can result in limiting discovery requests.30 A procedural approach would lead to application of the rules of the applicable law to the arbitration proceedings, which would usually be the rules of the law of the seat of arbitration—lex arbitri. 29 Reiser, op.cit., p. 668. 30 Fabian von Schlabrendorff, Audley Sheppard, “Conflict of Legal Privileges in International Arbitration: An Attempt to Find a Holistic Solution”, in: Global Reflections in International Law, Commerce and Dispute Resolution: Liber Amicorum in Honor of Robert Briner, (eds. Gerald Aksen et al.), icc Publishing, 2005, p. 764.

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Generally the diverse lex arbitri rules provide for wide discretionary powers for the arbitral tribunals in deciding evidentiary issues, controlling them with issues of public policy. However, domestic privilege laws of the seat of arbitration could not even be regarded as providing possible answers, as they could hardly respond to the expectations of parties in arbitration proceedings who have chosen a neutral venue supportive of the arbitral process.31 Although this approach would certainly avoid the perils of applying different laws for similar issues raised by the opposing parties, thus threatening to evade the equal treatment of the parties in the course of the proceedings, it nevertheless does not provide satisfactory solutions, since it cannot always properly address the needs and expectations of the parties. Namely, most of the evidentiary material (referring primarily to documentary evidence) is created long before the arbitration proceedings have been initiated, before the seat of the arbitration was determined, or even before the parties have even concluded the contract giving rise to the particular arbitration proceeding. Thus, the seat of arbitration, which in many occasions is randomly selected in the quest of the parties for a neutral solution, cannot be expected to properly address several evidentiary contentious issues, which are diametrically regulated in civil-law and common-law countries. As Berger points out: It would be highly unsatisfactory and not in line with the legitimate expectations of the parties if the law of the seat of the arbitration would be applied to the issue of evidentiary privileges when the relevant communication took place or the relevant documents were exchanged in another jurisdiction or even in another continent, years before the seat was chosen (for mere purposes of convenience) or the arbitration was commenced.32 The issue of legal privileges can also be regarded as substantive in nature—in fact, privileged information does affect the party’s behavior outside the procedural setting, and focusing on the value of the relevant information or communication allows a substantive qualification irrespective of the holder of the right, or his procedural background.33 However, treating privilege issues as substantive issues might unfortunately also lead to unsatisfactory results. Namely, if the issue of evidentiary privileges is qualified as an issue of substance, it would either mean that the choice of applicable law made by the parties

31 Waincymer, op.cit., p. 803. 32 Berger, op.cit., p. 509. 33 Berger, op.cit., p. 509.

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(if contained in the arbitration agreement itself or in subsequent arrangements by the parties) should also apply to issues of legal privilege, or that the applicable law should be determined by the arbitral tribunal, applying the conflict of laws approach. Automatically extending the choice of law for the contractual relationship to questions of evidence would infringe the legitimate expectations of the parties,34 since it is usually not their intention to subject their confidential material to the provisions of law they choose to be applicable to their main contractual relation, or even more, they do not give any thought of rules of privileges in the chosen national law. As a matter of fact, privilege issues, and the confidentiality of documents they both produce in the pre-contractual period, would certainly be the last thing on the parties’ minds when concluding the arbitration agreement and choosing the applicable substantive law. Therefore, under a substantive approach the arbitral tribunal would have to apply the conflict of laws rules. For instance, Art.28, para.2 from the uncitral Model Law provides that ‘failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable’. In that situation, the tribunal by applying ‘the closest connection test’ will have to arrive to the applicable law. Several relevant connecting factors could be taken into consideration: the law of the contract, the lex arbitri, the domicile of the relevant party, the domicile of the counsel, the place any document in issue was drafted, the place where the information was provided, the place where the document is kept, the law providing for the ethical and other duties of counsel, the law of the state where the award is likely to be enforced.35 The arbitral tribunal may decide to narrow the dilemma, and take up a territorial approach, thus taking into consideration where the communications took place, or which jurisdiction has the closest connection to the events or communication in question.36 This multiplicity of possible connecting factors, instead of easing the arbitrator’s task in determining the applicable law, seems to cause even greater problems—strictly speaking, if the closest connection test is to be individually applied to each evidence whose production has been requested, that would put the parties in a rather unfavorable position since it would lead to different applicable laws with varying privilege standards being applied to different evidence. Namely, a common law based party would be entitled to have its 34 35 36

Olaf Meyer, “Time to Take a Closer Look: Privilege in International Arbitration”, Journal of International Arbitration, Vol. 24, No. 4, 2007, p. 368. See Sindler, Wustemann, op.cit., p. 619 et seq., for an overview of all the possible questions that might arise before an arbitral tribunal faced with a privilege claim. Rubinstein, Guerrina, op.cit., p. 598.

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confidential documents and the communication with its counsel exempt from a duty to disclose, while a civil-law based party, under the applicable law most closely connected to its documents, would probably have to make all those documents available to the other party, or bear negative consequences for the failure thereof. That would lead to an unequal treatment of the parties in the course of the arbitration proceedings, or in the bottom line, it would simply be unfair. However, the parties, apart from the due process guarantees, are entitled to expect that they will be treated equally in the course of the proceedings— or simply, that the same rules of privilege will apply to both parties, regardless of the forum of the dispute.37 For these reasons, regardless whether a procedural or a substantive approach is being applied, many authors criticize the ‘monistic approach’ to privileges in international arbitration, aiming at determining the national law of a single country as an applicable law, since, as previously shown, it merely produces dubious results. National laws themselves are not best positioned to respond to the peculiarities of international commercial arbitration, since they are tailored to each country’s law on discovery.38 Even more, an approach that seeks to equalize the law applicable to both parties will still have to consider which regime of the two (or more) should be applied and whether one party can waive its more preferential rights to deny those of its opponent for strategic reasons.39 For that reason, a ‘cumulative approach’ is suggested as a more appropriate solution—authorizing the tribunal instead of applying the conflict of laws to determine one national law as applicable, to review cumulatively all the national laws that might be connected to the dispute, and find a ‘middle ground’ instead. In doing so, the arbitral tribunal may set its standards between two endpoints—applying the ‘most favored nation rule’ or the ‘least favored nation rule’. In this quest, the arbitral tribunal might not only refer to the national jurisdictions of both parties, but also the law of the seat of arbitration or the law most closely connected to the evidence might be taken into consideration, as well. If the tribunal decides to seek the lowest common denominator in protective standards, the tribunal’s decision would be compelling both parties to submit all evidence they have in their possession, based on the consideration that neither set of communications should be protected.40 Conversely, if the highest possible level of protection is 37

Craig Tevendale, Ula Cartwright-Finch, “Privilege in International Arbitration: Is It Time to Recognize the Consensus?”, Journal of International Arbitration, Vol. 26, 2009, p. 828. 38 Meyer, op.cit., p. 370. 39 Waincymer, op.cit., p. 805. 40 Berger, op.cit., p. 519.

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applied, the arbitral tribunal would have to apply an approach in which the parties and their counsels avail themselves of the privilege rules that exist in both parties’ home jurisdictions, and thus enabling each party to claim any privileges available under the law of the party’s adversary, but not available under that party’s law.41 However, if the highest possible level of confidential information of the parties is accepted, a question remains—will the arbitral tribunal have sufficient knowledge to render an award in the particular arbitration proceedings, or more precisely—how can a court dispense justice if it is prevented from learning all of the key facts on which the award depends42? 5

Conclusion—A Proposed Solution?

The present regulation of the issues of privilege, viewed either way, does not give satisfactory results. If viewed as a procedural issue, it would lead to the application of the lex arbitri, which usually relates to a place which was randomly chosen as a neutral venue for the arbitration proceedings, and neither corresponds to the expectations of the parties, nor to the specificities of the communication and the documents which might have been created long before the dispute even arose. On the other hand, a clear substantive approach would lead to exasperating and time-consuming activities of determining the law of the closest relationship for every single document whose production has been requested in the course of the proceedings—which would ultimately lead to inequality of the parties, since different applicable laws with varying privilege standards will be applicable to different evidence produced by either party. As noted before, currently the only possible route for the arbitral tribunal would be to make several previous determinations—to only arrive to a set of national rules, which are the least appropriate for resolution of arbitral dispute, simply because they are designed to fit a particular national system. For that reason, a common view arises between authors and arbitration practitioners that the development of autonomous set of rules regulating this issue is becoming an essential.43 Although the application of the “least favored nation rule” 41 42

Rubinstein, Guerrina, op.cit., p. 601. Paul S. Reichler, “Problems of Evidence Before International Tribunals”, in: International Arbitration—Contemporary Issues and Innovations (ed.John Norton Moore), Martinus Nijhoff Publishers, 2013, p. 48. 43 Meyer, op.cit., p. 373, Rubinstein, Guerrina, op.cit., p. 599, Berger, op.cit., 513, Sindler, Wustemann, op.cit., p. 638.

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might result in practical non-existence of privileges in international commercial arbitration, and the “most favored nation rule” might just lead to almost none of the relevant facts being presented before the arbitral tribunal, a common denominator should however be found. And it should not be done just individually, on a case-by-case basis by every single arbitral tribunal deciding in a particular case, but on wider basis—preferably in supranational rules. By this means, regardless of whether a higher or a lower standard is set, it will ease the uncertainty of the parties and reduce the possibilities of surprises in the course of the proceedings, thus leading to protection of parties’ due process rights in the proceedings, while maintaining the efficiency of the arbitral process. Selected Bibliography Alvarez, Jose, “Evidentiary Privileges in International Arbitration”, in: International Arbitration 2006: Back to Basics? (ed. Albert Jan van den Berg), Kluwer Law International, 2006. Berger, Klaus Peter, “Evidentiary Privileges: Best Practice Standards versus/and Arbitral Discretion”, Arbitration International, Vol. 22, No. 4, 2006. Böckstiegel, Karl-Heinz, Kröll, Stefan, Nacimiento, Patricia, Arbitration in Germany: The Model Law in Practice, Kluwer Law International, The Hague, 2007. Derains, Yves, “La Practique de l’Administration de la Prevue dans l’Arbitrage Commercial International”, Revue de l’Arbitrage, 2004. Gaillard, Emmanuel, Savage, John Fouchard, Gaillard, Goldman on International Commercial Arbitration, The Hague, Kluwer Law International, 1999. Holtzman, Howard M Neuhaus, Joseph E., A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, Kluwer Law and Taxation Publishers, Deventer Boston, 1989. Lex Mundi, In-House Counsel and the Attorney Client Privilege, 2009. Marossi, Ali Z., “The Necessity for Discovery of Evidence in the Fact-Finding Process of International Tribunals”, Journal of International Arbitration, Vol. 26, No. 4, 2009. Meyer, Olaf, “Time to Take a Closer Look: Privilege in International Arbitration”, Journal of International Arbitration, Vol. 24, No. 4, 2007. Mistelis, Loukas, “International Arbitration—Corporate Attitudes and Practices—12 Perceptions tested: Myths, Data and Analysis: Research Report”, American Review of International Arbitration, Vol. 15 (3–4), 2006. Mosk, Richard M., Ginsburg, Tom, “Evidentiary Privileges in International Arbitration”, International and Comparative Law Quarterly, Vol. 50, 2001. Park, William W., “Arbitration’s Protean Nature: The Value of Rules and the Risks of Discretion”, Arbitration International, Vol. 19, 2003, No. 3.

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Queen Mary University of London, 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process. Reichler, Paul S., “Problems of Evidence Before International Tribunals”, in: International Arbitration—Contemporary Issues and Innovations (ed. John Norton Moore), Martinus Nijhoff Publishers, 2013. Reiser, Rachel, “Applying Privilege in International Arbitration: The Case For A Uniform Rule”, Cardozo Journal of Dispute Resolution, Vol. 13, 2012. Rubinstein, Javier H., Guerrina, Britton B., “The Attorney-Client Privilege and International Arbitration”, Journal of International Arbitration, Vol. 18, No. 6, 2001. Shaughnessy, Patricia, “Dealing with Privileges in International Commercial Arbitration”, Scandinavian Studies in Law, Vol. 51, 2007. Sindler, Michelle, Wustemann, Tina, “Privilege Across Borders in Arbitration: Multijurisdictional Nightmare or a Storm in a Teacup?”, ASA Bulletin, Vol. 23, No. 4, 2005. Tevendale, Craig, Cartwright-Finch, Ula, “Privilege in International Arbitration: Is It Time to Recognize the Consensus?”, Journal of International Arbitration, Vol. 26, 2009. UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration. von Mehren, George M., Salomon, Claudia T, “Submitting Evidence in an International Arbitration: The Common Lawyer’s Guide”, Journal of International Arbitration, Vol. 20, No. 3, 2003. von Schlabrendorff, Fabian, Sheppard, Audley, “Conflict of Legal Privileges in International Arbitration: An attempt to Find a Holistic Solution”, in: Global Reflections in International Law, Commerce and Dispute Resolution: Liber Amicorum in Honor of Robert Briner, (eds. Gerald Aksen et al.), ICC Publishing, 2005. Waincymer, Jeffrey, Procedure and Evidence in International Arbitration, Kluwer Law International, The Hague, 2012.

Part 6 The Court of Justice of the European Union

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chapter 25

Introduction Fausto de Quadros First of all I would like to congratulate the ila for having organized this meeting in Lisbon. It gives me great pleasure to chair this panel. I welcome all the participants and I am very pleased to see here some of my old friends who have come from abroad and also to see here some our students, which reflects their special interest in International Law and European Law. Let me introduce briefly the subject of this panel. Public International Law (pil) has progressed greatly in recent decades. Until the end of the Second World War it was primordially a Law of Peace and War in the way of ius belli ac pacis from Grotius. After the Second World War it began to deal progressively with subjects that until then were the monopoly of the sovereignty of the States. This was the case with respect to human rights, economic and financial relations between States, self-determination and social and economic development of peoples, humanitarian law in case of armed conflicts, continental integration, etc. Despite all the changes introduced in this way in universal and regional International Law, the progressive breaches of human rights at the wordwide level, the increase in international terrorism and the rise in the number and severity of regional conflicts, have been demonstrating the insufficiency of the modern international political and judicial means to overcome the challenges pil faces nowadays. Look what is happening today in the Middle East and in Central Europe. pil does not have the means to condemn and to put an end to very serious violations of human rights of individuals and minorities, and to stop the cruel activities of terrorist groups in the Middle East and to condemn in the Ukraine the occupation of one sovereign State that is a member of the un by another member State of the un. Concerning specifically the subject of this panel, I must begin by saying that the European Court of Justice (ecj) plays a key role in the current international judiciary. Regarding the scope of its jurisdiction, the legitimacy to access it and its powers of coertion, we can say that in the International Community there is no other court so close to the judiciary of a Federation of States. The Union owes it much of the expansion of its legal system. During the last 60 years of integration the ecj has often substituted the inaction of the political

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institutions of the Union and the lack of will and courage of the member States in deepening the integration and reforming the Treaties. It was this Court that pushed the European Union Law (eul) forward. It has been and it will allways be a controversial question as to whether it has sometimes done so going beyond the frontiers of what is allowed by the Treaties. I do not know if you will discuss it in this conference. What I do know, regardless of this question, is that the eul owes much of its evolutiuon to the activity of the ecj, above all by taking advantage in its jurisprudence of some appropriate contributions of American and German federalism. But it is also important to point out that the jurisprudence of the ecj contributed much to the enrichment of the national legal systems of the member States. In some branches, for instance, Competiton Law, Administrative Law, extracontratual liability of States including for judicial acts or omisions, the Legislative and Judicial powers of the member States have very often adopted the dogmatic reasoning of the Judges of Luxembourg. The intensive dialogue that since the 70s has been carried out between the jurisprudence of the ecj, on the one side, and the jurisprudence of the French Conseil d’État, the German Bundesverfassunsgericht and the Italian Corte Costituzionale on the other side have contributed greatly to the progress of the concerned national legal systems and the eul as well.

chapter 26

The Court of Justice of the European Union Maria José Rangel de Mesquita 1

From Paris to Lisbon: From One Institution to Three Courts

1.1 The origins of the present Court of Justice of the European Union (cjeu) go back to the Treaty of Paris that created a specific court besides the other institutions of the new European Coal and Steel Community (ecsc) according to the traditional model of the institutional framework of international organisations (vg. United Nations (un) model): one organisation, one court within its institutional framework. The «Court» was then giving the competence to «ensure the respect of the Law in the interpretation and application» of the Treaty and of the executing regulations.1 This model, that was maintained when the two other European Communities—the European Economic Community (eec) and the European Atomic Energy Community (Euratom)—were created by the Treaties of Rome2 (although the fusion of the courts of the three European Communities was then foreseen but maintaining a differentiation of competence according to each of the founding treaties), evolved in the years to come, not only because of the success of the phenomena of European integration and the successive enlargements but also because of the success of its system of justice that led to an increase of the cases brought before the Court. This evolution took place through the creation of different courts within the jurisdictional institution of the European Communities (ecs) and afterwards of the European Union (eu). The turning points in this respect occurred in the eighties with the first revision of the founding treaties by the Single European Act3), when the creation of a new judiciary organ was foreseen and afterwards put into practice (then the Court of First Instance (cfi)); and afterwards, with the revision Treaty of Nice4 the creation of specialized courts within the

1 Arts. 31–45 of the Treaty establishing the ecsc of 18/4/1951 that entered into force in 23/7/1952. 2 Arts. 164–188 of the Treaty establishing the eec of 25/03/1957 that entered into force in 1/1/1958. 3 Single European Act signed in 17/2/1986 and 28/2/1986 that entered into force in 1/7/1987. 4 Treaty of Nice of 26/2/2001 that entered into force in 1/2/2003.

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European Union jurisdictional institution was foreseen leading to the establishment of the first specialized court (the Civil Service Tribunal). 1.2 At present, after the entry into force of the Treaty of Lisbon in the 1st of December 2009, the (single) jurisdictional institution of the European Union (the Court of Justice of the European Union) includes three Courts: the Court of Justice, the General Court and one specialised Court (the Civil Service Tribunal).5 This means that: (i) the jurisdictional system of the eu includes, besides the Court of Justice (cj), a specialized Court (the Civil Service Tribunal (cst)) and a common first instance court (the General Court (gc)) which is competent to rule on most actions brought by those subjects of European Union Law that have legitimacy to accede to the cjeu (a member state, an eu institution or a natural or legal person); (ii) the jurisdictional system of the eu includes, as a rule, two degrees (in some cases even three) of jurisdiction with (formal) hierarchy although in some cases restricted to matters of Law: hierarchy between the gc and the cj and hierarchy between the cst and the gc—since the decisions of the gc can be reviewed by the cj and the decisions of the cst can be reviewed by the gc).6 Moreover, the jurisdiction of the original Court of Justice of the European Communities (cjec), and after of the cjeu, has been conceived originally as a general jurisdiction regarding the fields of competence that the member states decided to transfer to the ecs (and after the eu) level—respecting of course 5 Art. 19 of the Treaty of the European Union of 7/2/1992. 6 A recent example involving Portugal can illustrate such hierarchy between the gc and the cj: the case in which the cj recently reviewed a decision of the gc that had annulled a decision of the Commission (Decision C(2008)7419 of 25/11/2008) asking for the payment of the penalty payment in which Portugal had been condemned by the cj (in a second action for failure to act in breach of eu Law regarding liability for breach eu rules on public procurement)— Decision of the gc of 29/3/2011, Portugal v Commission, T-33/09, and Decision of the cj of 15/1/2014, Commission v Portugal, C-292/11P (and previous Decision of the cj of 10/1/2008, Commission v Portugal, C-70/06 imposing a penalty payment). This decision was innovative since it focused mainly on the competence of the Commission vis à vis the competence of the cj regarding the control of the execution of a cj sentence issued in an action for infringement imposing a penalty payment to a member state as well as the delimitation of competence between the gc and the cj in this respect (see in particular n.°s 77–81).

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the principle of compétence d’attribution—and these fields were enlarged with the successive revisions of the founding treaties therefore contributing to enlarge the scope of jurisdiction of the cjec and, after the Treaty of Maastricht, the cjeu. 2

Specific (Main) Features of the Court of Justice of the European Union: Beyond Public International Law

2.1 The jurisdictional system of the European Communities and the Court of Justice of the European Communities were born under the sign of the nature of the European integration process: a supranational integration process. This nature has influenced the main specific and innovative features of the cjec— and after the Maastricht Treaty the Court of Justice of the European Union— thus bringing them apart, in some aspects, from the International Public Law and from the features of international jurisdictional systems of intergovernmental International Organizations. 2.2 Since its creation the jurisdiction of the cjec/cjeu was designed as not only permanent (which is the rule regarding the jurisdictional organs of intergovernmental International Organisations such as the un) but also compulsory, (mainly) exclusive and not allowing reservations formulated by the member States—thus designed as a jurisdiction more ‘immune’ to state sovereignty, although following the international principle of settlement of disputes by peaceful means. It cannot be however forgotten that the influence of state sovereignty in the design of the cjec/cjeu and its jurisdiction has slightly changed with the Treaty of Maastricht establishing the European Union. In fact, due to the establishment of the pillar structure of the European Union, it brought ‘one (not so small) step behind’ regarding the compulsory jurisdiction of the Court in matters of the so-called intergovernmental second pillar (Common Foreign and Security Policy (cfsp)) and preliminary rulings on matters of the third pillar (after the Treaty of Amsterdam the so-called Police and Judicial Cooperation in Criminal Matter (pjccm))—allowing member states to accept, or not, preliminary rulings and to choose which courts may refer a preliminary ruling to the cjeu in this field and thus approximating the cjeu to international courts to the extent that jurisdiction regarding this particular means of review depends on the will of the member States

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(and regarding cfsp to the extent that the jurisdiction of the cjeu is rather limited and therefore not accepted fully by the member states). Nevertheless, at present, after the entering into force of the Treaty of Lisbon, the essential features of the cjec as conceived ab initio are still in force regarding the cjeu. Besides the above mentioned (general) features that differ from public international law courts and systems of international universal justice, the model of the cjecs—and nowadays the cjeu—revealed then and still reveals today innovative features—progressively adopted by other universal or regional systems of international justice. Among these features (some of which may have been influenced by national legal systems of member states) the following are worth to be underlined by reference to the cjeu: (i) The direct access to the cjeu (as parties) by all subjects of eu Law: not only the member states but also eu institutions (and organs) and natural and legal persons to which eu Law also applies; (ii) The differentiation of actions (and procedures)—either principal or instrumental, such as interim or provisional measures—that may be brought by such subjects of eu Law before the cjeu: according to its specific purpose and subject to different requirements namely regarding legitimacy which is still today more restrict regarding legal and natural persons; The jurisdiction of the cjeu therefore includes four main categories of actions aimed at different purposes: (a) preliminary rulings on the interpretation and validity of eu Law (article 267 tfeu); (b) legality actions and procedures aimed at review the validity of acts or omissions of the eu institutions and organs—action for annulment, action for omission and illegality exception (articles 263–266 and 277 of tfeu); (c) full jurisdiction actions («pleine jurisdiction») aimed at the behaviour of members states and the compliance with the eu Law (infringe­ ment procedures or action for non-fulfilment of eu obligations—­ articles 258–269 tfeu) and at the liability of the eu and its insti­tutions and awarding compensation for damages (eu liability action—articles 268 and 340 tfeu); actions to review sanctions applied by eu institutions (in order to supress, reduce or increase the sanction applied under the form of a lump sum or a penalty payment (article 261 tfeu);

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(d) among others: judicial review of state actions under the Statute of the European Investment Bank and of acts of its organs and judicial review of national central banks actions under the relevant eu Law (article 271, a) to c) and d), tfeu); judgement pursuant an arbitration clause (article 272 tfeu); disputes between member states submitted to the cjeu under a special agreement (article 273 tfeu)—the latter being relevant in the context of the eu recent intergovernmental developments regarding economic policy within the framework of the Economic and Monetary Union.7 (iii) the cooperation relationship between the cjeu and national courts of the member states through preliminary rulings aiming at the uniformity of the interpretation and application of eu Law; (iv) the figure of the Advocates-General of the Court of Justice—which duty is, acting with complete impartiality and independence, to make reasoned submissions on cases that require their involvement (article 252 tfeu)—namely close to the features of the Commissaire du Gouvernement within the Conseil d’État); (v) the development of specific judicial means to ensure the compliance of some of the cjeu decisions—either by involving the Court itself (penalty payments or financial sanctions in which the Court can condemn member states within—some first degree and all second degree-infringement actions against member states (article 260, 2 and 3, tfeu) or by using national procedural means (execution of cjeu decisions applying sanctions to actors other than members states (articles 280 and 299 tfeu). And so deriving from the traditional path according to which compliance with decisions of international (universal or regional) courts are a matter for intergovernmental organs, including regarding the imposition of sanctions to a member state failing to comply with a court judgement (vg the un Security Council, the Committee of Ministers of the Council of Europe or the Assembly of Heads of State and Government and the Executive Council of the African Union8). 7 Art. 8 of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union between 25 member states signed on the 2nd March 2012 (Treaty on Stability)—this article is considered to constitute a «special agreement» between the contracting parties (and member states of the eu) within the meaning of article 273 of the tfeu (art. 8(3) of the Treaty on Stability). 8 Respectively art. 94(2) of the un Charter; art. 46(2) to (4) of the European Convention on Human Rights; art. 52 of the Protocol of the Court of Justice of the African Union and art. 9(1), e) of the Constitutive Act of the African Union, arts. 29(2) and 31 of the Protocol to the African Charter on Human and People’s Rights on the establishment of an African Court on

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2.3 The establishment of the European Union by the Maastricht Treaty besides leading to the mentioned (apparently small but rather significant) ‘one step behind’ regarding compulsory jurisdiction over the second pillar and partially the third pillar of the eu (the latter applying only until the end of the transitional period of 5 years set up by the Treaty of Lisbon which ended in 1/12/20149) also led to allowing a differentiation of the procedural regimes of some actions and procedural instruments (in some cases still in force): preliminary rulings;10 infringement procedures against member states and action for annulment of decisions of the Council within the procedure for violation of eu values by member states);11 or action for annulment of restrictive measures adopted within the cfsp.12 2.4 Moreover, the jurisdictional system based on the jurisdiction of the cjeu is completed by a set of developed procedural rules regarding each of the eu Courts (cj, gc, cst) based on the model of procedural rules originally laid down for the cjec (and after the cjeu) and allowing today faster procedures (urgent procedure regarding preliminary rulings in the area of freedom, security and justice; expedited or accelerated procedure either in (other) preliminary rulings or in other actions13).

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Human and People’s Rights, as well as art. 46(4) and (5) of the Protocol on the Statute of the African Court of Justice and Human Rights (the latter not yet in force). The Council of Ministers, foreseen as an organ of the Organization of African Unity (art. vii (2) of the oua Charter, became the Executive Council with the Constitutive Act of the African Union (art. 5(1), (b) and arts. 10–13). See art.10 of Protocol (No 36) on Transitional Provisions annexed to the Treaty of Lisbon. After the Treaty of Amsterdam, which brought a part of the third pillar into the first pillar, the third pillar regime (ex-art. 35 teu), the regime within the visa and asylum policy (ex-art. 68.° ec Treaty) and the general preliminary regime (ex- art. 234 ec Treaty)—the end of the pillar structure by the Treaty of Lisbon brought an end to this differentiation (after the end of the 5 year transitional period). Art. 7 teu and art. 269 tfeu regarding violation of the eu values (infringement procedure for qualified violation of eu law); and art.126 tfeu regarding the excessive government deficits (special infringement procedure within the European and Monetary Union). Arts. 215 and 275, second paragraph, tfeu. See art. 23a of the Protocol (N° 3) on the Statute of the Court of Justice of the European Union and arts. 105–106 (expedited preliminary ruling procedure), arts. 107–114 (urgent preliminary ruling procedure) and arts. 133–136 (expedited procedure regarding direct actions) of the Rules of Procedure of the cjeu.

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2.5 To sum up, the cjeu was originally designed in an innovative way; its original features were consistent with the supranational nature of the European integration—thus introducing a feature of ‘subordination’ (and to some extent limitation of state sovereignty); although a ‘step behind’ occurred within the framework of the creation of the European Union (then based in 3 pillars) the Lisbon Treaty put the jurisdictional system back in the track of the ‘integration path’—especially regarding the Area of Freedom, Security and Justice (ex-3rd pillar) and the field of fundamental rights. This goes not without mentioning some relevant issues that may question the ‘completion’ or ‘fullness’ of the eu jurisdictional system based on the cjeu further addressed: mainly the scope of jurisdiction (since the limitations of the ratione materiae jurisdiction of the cjeu regarding the cfsp still remain), the dual protection in matters of fundamental rights or the future relation with other international regional judicial systems and their respective courts. 3

The Role of the Court of Justice of the European Union

3.1 Pushing the European Integration Forward With the configuration described previously the cjecs first, and afterwards the renamed (and reshaped) cjeu, has played a most relevant role in the development of the European integration—effectively affecting the legal status of the different subjects of eu Law and actors of the eu legal Order. It has in fact acted as an engine of the European integration and has pushed the European integration forward—au fur et à mesure of the evolution of the European integration and of the domains of competence that have been progressively included in the material scope of European integration and foreseen in the successive revision treaties—vg free circulation within the internal market and European citizenship—and even bringing into the European integration areas ab initio not expressly foreseen in the treaties—vg protection on fundamental rights, liability of member states for breach of eu Law, including liability due to national jurisdictions, or increasing legitimacy of natural or legal persons to review eu acts.14 14 See infra, footnote 24; see Decision of the cfi of 3/5/2002, Jégo-Quéré, T-177/01—although the cj reviewed it and did not sustain the Decision (cj of 1/4/2004, Jégo-Quéré, C-263/02P. See also, after the changes introduced by the Lisbon Treaty in art. 264, paragraph 4, tfeu, Decision of the cj of 3/10/13, Inuit, C-583/11P.

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Moreover, it has contributed definitively to the configuration of the eu legal Order, namely including its applicability to different subjects of eu Law (when this applies to the case); its relationship with national legal orders (vg principle of primacy of eu Law or principle of direct effect15) and the reconfiguration of national legal order (vg. to name some examples through the principle of effective legal protection and provisional measures in national law, especially concerning administrative law and procedural law; compulsory preliminary rulings by national courts not ruling in last instance when these are inclined to consider an eu act invalid16); the drawing of the line between different areas of competence (vg cpjmp and other areas or cfsp and other areas—today cfsp as part of the eu external action and others eu policies)17 thus defining the line between the competence of the eu organs in such respect). In fact as the doctrine usually underlines, the cjeu has acted as a (materially) constitutional court, an administrative court or even an international court solving disputes between member states. It must also be underlined that the institutions themselves often refer to the case Law of the cjeu within the exercise of their competences (vg Commission Communications on public procurement)—and the revision treaties also have incorporated some of the cj case law in such relevant issues as fundamental rights (protection of fundamental rights by the eu legal Order but also control of eu acts that may violate fundamental rights) or exclusivity of the eu ius tractuum.18 15 See infra footnote 23; and regarding direct effect, among others, see Decisions of the cjec of 4/12/74, Van Duyn, 41/74, of 19/1/1982, Ursula Becker, 8/81, and of 10/11/92, Hansa Fleisch, C-156/91. 16 Decision of the cjec of 22/10/1987, Foto-Frost, 314/85. 17 Judgement of the cj of 20/5/2008, Commission v. Council, C-91/05 which annulled the Decision 2004/833/CFSP of the Council of 2/12/2004 implementing the Joint Action 2002/589/CFSP on combating the proliferation of small arms and light weapons—since taking account of its aim and its content the contested decision contains two components, neither of which could be considered to be incidental to the other, one falling within Community development cooperation policy and other within the cfsp and therefore the Council infringed ex-art. 47 teu (see n.°s 31–34 regarding the competence of the cjeu and n.°s 76–77 and 108–109 on the findings of the Court applying the criteria—previously to the Treaty of Lisbon—according to which the first pillar prevails over the others). 18 Vg Commission Interpretative Communication on the Community law applicable to contracts awards not or not fully subject to the provisions of the Public Procurement Directives (2006/C 179/02); art. 6 teu and arts. 3(2) and 216(1) tfeu.

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It must as well not be forgotten that the cjeu has to face new challenges arising out not only from the wording of the eu treaties—such as the challenge arising out of the accession of the eu to the echr—and secondary law but also from the last trends of the European integration developed in parallel with the treaties by means of (traditional but atypical) international intergovernmental treaties—vg the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union that attributed the cjeu competence under article 273 of the tfeu to review the failure of member states (and contracting parties) with its article 3(2) regarding the fulfilment of member states specific obligations under such treaty.19 Moreover the development of eu Law allowed the cjeu to review eu institutions acts as well as state actions in the light of eu obligations in new contexts, such as the revision of the founding treaties by a decision of the European Council in the context of the crisis,20 the capacity of a member state to pay a penalty payment or a lump sum payment considering the effects of the crisis21 or the competence of the European Central Bank (ecb) within the European and Monetary Union.22 19

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Supra, footnote 7. It must be asked which action will be used by a contracting party for such purpose and when the member states do not comply with the judgement of the Court, whether financial sanctions can be applied to them. Decision of the cj of 27/11/2012, Pringle, C-370/12—preliminary ruling on the validity of the Decision 2011/199/EU of the European Council of 25/3/2011 amending article 136 tfeu (new 136(3) tfeu), concerning the stability mechanism for the Member States whose currency is the euro as well as on the interpretation of several articles of the teu and tfeu (regarding the competences of the eu and the member states within the emu and the ratification of the Treaty establishing the European Stability Mechanism signed on the 2/2/2012). Decision of the cj of 19/12/2012, Commission v Ireland, C-374/11 (second degree infringement action imposing a penalty payment and a lump sum for failure to implement the cj decision in case C-188/08, Commission v Ireland)—considering that the capacity of the member state to pay was reduced in the context of economic crisis (see n.°s 44 and 52) while fixing the amount of the penalty payment and of the lump sum payment, and Decision of the cj of the 19/12/2012, Commission v Ireland, C-279/11, also considering that the member state ability to pay a lump sum as it stands in the light of the latest economic data submitted for appraisal by the Court «has to a certain degree been diminished in the context of the economic crisis» (n.°s 78–79). Gauweiler and Others, C-62/14—request for a preliminary ruling from the Bundesver­ fassungsgericht lodged on 10/2/2014 namely on the validity of the decision of the Governing Council of the European Central Bank of 6 september 2012 (on the Outright Monetary Transactions programme) and its compatibility with the relevant articles of the tfeu (arts. 119, 127(1) and (2) and 123(1)). The Conclusions of the Advocate-General cruz VILLALÓN were presented on the 14/1/2015. Infra, 3.2.

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The Relationship with National Courts, Especially Constitutional Courts Another aspect that must be addressed regarding the role of the cjeu relates to preliminary rulings by national court and therefore the relationship with these, especially constitutional courts. One can say that preliminary rulings foreseen in the founding treaties involving a relationship between the cjeu and national courts has been one of the most relevant types of eu judicial procedures since the beginning of the European integration. And so it is for, among other, three main reasons: i) because it was conceived and used as an instrument on uniformity within the legal Order of the ecs/eu (uniformity of interpretation and application of eu primary and secondary Law); ii) because most of the principles arising out of the cjeu case law were enounced and developed within preliminary rulings (vg cases Costa/enel and Simmenthal and primacy; case Factortame and primacy regarding provisional measures; cases Stauder, Internationale ­ Handelsgeselshaft and Wachauf and the protection of fundamental rights prior to the Maastricht Treaty; cases Francovich and Köbler and state liability, including liability arising out of the judicial function23); iii) and also because preliminary rulings—despite the fact that it is not federal mechanism allowing the cjeu to declare invalid a national rule contrary to eu law –, has revealed to be a relevant indirect way to disclose failure of member states to comply with obligations arising out of eu Law and therefore disclose the non-conformity between national Law and eu Law leading to modifications of national law.24 Moreover, it must be also underlined that such mechanism has been, with some differences adopted within other international (namely regional) jurisdictional systems in the framework of regional international organisations— that is the case in Latin America within the Andean Community which has 3.2

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Decisions of the cjec of 15/7/62, Costa/E.N.E.L., 6/64, and of 9/3/78, Simmenthal, 106/77; Decision of the cjec of 19/6/1990, Factortame, C-213/89; Decisions of the cjec of 12/11/69, Stauder, 29/69, of 17/12/70, Internationale Handelsgesellschaft, 11/70 and of 13/7/89, Wachauf, 5/88; Decisions of the cj of 19/11/1991, Francovich and others, C-6/90 and C-9/90 and of 30/9/2003, Köbler, C-224/01. To illustrate this with an example of cases involving Portugal, see Decisions of the cj of 14/9/2000, Mendes Ferreira, C-348/98 (a case of non-conformity between a civil code rule regarding liability arising out of car accidents where no fault exists and ec secondary law regarding harmonisation on compulsory motor insurance) and of 21/9/2000, Modelo Continente sgps, C-19/99 (a case of non-conformity between a national rule on the charge payable for a notarially attested act recording an increase of capital and ec secondary law concerning indirect taxes on the raising of capital).

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today a judicial system of guarantee designed according to the eu model25 and, to some extent, within the Central American Integration System.26,27 The relationship between the cjeu and national courts and among them Constitutional Courts merits a word for four main reasons: i) in the beginning of the European integration, especially regarding the issues of protection of fundamental rights, constitutional courts of the Member States did not resign from their task to protect fundamental rights mainly in times where such protection was not foreseen expressly by the treaties at the level of the ecs— which occurred only with the Maastricht Treaty; ii) constitutional courts of Member States (although not all) have used their competence attributed by the founding treaties to make preliminary rulings to the cjeu (vg preliminary ruling raised by the Bundesverfassungsgericht of Germany on the 10 February 2014 on the validity of a decision of the Governing Council of the European Central Bank and thus related with the competence of the ecb vs the competences of member states;28 the preliminary ruling raised by the Tribunal 25 26 27

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Arts. 32–36 of the Treaty establishing the Court of Justice of the Andean Community and arts. 121–128 of the Statute of this Court (http://www.comunidadandina.org). Art. 22, k), of the Statute of the Central American Court of Justice, as well as art. 24 of the same Statute (http://www.sica.int). See also the case of the «consultive opinions» of the Revision Permanent Court of the Mercosur although not binding on national courts (art. 3 of the Olivos Protocol to the Dispute Settlement in the Mercosur, Decision cmc n.° 02/2007, regulating the procedure for the Superior Courts of the member states of the Mercosur to present a request for a consultive opinion to the Revision Permanent Court and Decision cmc n.° 15/10, modifying the delays for the issue of a consultive opinion (http://www.mercosur.int)—see the Consultive Opinion n.° 01/2007, 2, A e B, on the legal regime and on the concept, nature and aims of the consultive opinions (http://tprmercosur.org). Since these opinions are not binding on national courts this instrument is closer to the (non-binding) advisory opinions that can be issued by international and regional courts—vg by the International Court of Justice ((icj) art. 96 of the un Charter, arts. 65–68 of the Statute of the icj and arts.102–109 of the Rules of Procedure of the icj), by the International Tribunal of the Law of the Sea ((itlos) regarding the Seabed Disputes Chamber, art. 191 of the un Convention on the Law of the Sea and arts. 130–137 of the Rules of Procedure of the itlos and regarding the itlos, art. 138 of the same Rules); or, in the future, by the European Court of Human Rights ((ECourtHR) Protocol n.° 16 to the Convention for the Protection of Human Rights and Fundamental Freedoms that foresees that highest courts and tribunals of a High Contracting Party (to the echr) may request the ECourtHR to give advisory opinions on questions relating to the interpretation or application of the rights and freedoms defined in the Conventions and the protocols thereto in the context of a pending case). Supra, footnote 22.

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Constitucional of Spain on the 9 June 2011 related to the European arrest warrant and the surrender procedures between member States, on the validity and interpretation of the Council Framework Decision 2002/584/JHA of 13 June 2002 and on the interpretation of article 53 of the Charter;29 or the preliminary ruling raised by the Conseil constitutionnel of France on the 4 April 2013 also on the European arrest warrant and the surrender procedures between Member States and on the interpretation of the Council Framework Decision 2002/584/ JHA;30 iii) since the national constitutions are also source of eu law in respect of fundamental rights, and a principle of the higher protection applies, attention must be paid by the eu level to the way in which these national courts interpret and apply it;31 iv) some constitutional courts according to their respective competences have ruled on the revision treaties and its conformity with the national constitutional order—previously to the approval ratification of those treaties.32 4

Scope of Jurisdiction: In and Out Domains of Material Competences

Although the cjeu has always have a relevant role concerning the development of the European integration some juridical issues still deserve further attention. Among these issues the matter of scope of jurisdiction (ratione materiae) of the cjeu is a nuclear issue of the system of judicial guarantee of the eu legal order which is based on the activity of the cjeu. It must therefore be considered which domains of material competences of the eu are in and out of the cjeu scope of jurisdiction and the way it implies more or less integration or sovereignty. Although, as mentioned above, the jurisdictional system was born with supranational features to the extent that jurisdiction of the Court was compulsory regarding all ecs Law—despite the one step backwards with the Maastricht 29 30 31 32

Decision of the cj of 26/2/2013, Melloni, C-399/11—see also the consequent Sentence of the Tribunal Constitucional of 13/2/2014 (amparo 6922/2008). Decision of the cj of 30/5/2013, Jeremy F., C-168/13 ppu—see also the consequent Decision of the Conseil constitutionnel of 14/6/2013 (Decision 2013–314-qpc of 14/6/2013). See art. 6(3) teu and art. 53 of the Charter. Vg the Judgement of 30 June 2009 of the Bundesverfassungsgericht of Germany stating that the Act Approving the Treaty of Lisbon is compatible with the Basic Law only by taking into account the provisos specified in the decision (2 BvE 2/08 and others, par. 420).

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Treaty and the half step forward with the Lisbon Treaty—the integration method does not apply fully concerning jurisdiction of the cjeu. In fact, regarding Common Foreign and Security Policy—today a significant part of the External Action of the eu—the competence of the cjeu to rule on such matters through one of the actions foreseen in the Treaties is still an exception— because the member states (as Herren der vertragen) so decided in the Lisbon Treaty (articles 24 teu and 275 tfue). In what concerns cfsp the cjeu can only rule on proceedings brought as an annulment action reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of the rules on cfsp (competence that was given to the Court by the Lisbon Treaty (article 275 tfeu) clearly as a ‘follow up’ and consequence of the Kadi case law on the review of the legality of restrictive measures33) and also to monitor compliance with article 40 teu (cfsp vs other eu policies in order to safeguard the institutions respective competences in such areas (article 40 teu)). The subtraction from the scope of jurisdiction of the Court of such set of rules (on cfsp) that are most relevant for the external action of the eu and are the basis for many of the actions of the eu regarding foreign policy and actions and missions outside the eu—meaning supremacy of state sovereignty—is still a weak feature of the jurisdictional system of the eu and of the cjeu competence and therefore a weak feature of the Union as a Union of Law. Moreover such exclusion apparently seems to apply not only concerning judicial review but also concerning the advisory competence within the eu Treaty making power—this aspects would also require further clarification although the cj in a recent case annulled a cfsp decision of the Council approving an international agreement within the cfsp on the grounds of breaching of article 218 (10) tfeu according to which the European Parliament shall be immediately and fully informed at all stages of the procedure.34 Other aspect related to the scope of jurisdiction that is also worth mentioned— at least to underline that there is a need for clarification of the treaties—is the apparent limited jurisdiction of the Court in respect of the procedure for 33

34

Decision of the cfi of 21/9/2005, Kadi v Council and Commission, T-306/01 and Decisions of the cj of 3/9/2008, Kadi and Al Barakaat v Council and Commission, C-402/05P and C-415/05P. Already after the entering into force of the Treaty of Lisbon, also Decisions of the gc of 30/9/2010, Kadi v Comissão, T-85/09 and of the cj of 18/7/2013, Commission and Council v Kadi, C-584/10P, C-593/10P and C-595/10P. Decision of the cj of 24/06/2014, Parliament v Council, C-658/11, n.° 73—the cj annulled the Council Decision 2011/640/CFSP of 12/7/2011, on the signature and conclusion of the international agreement between the eu and the Republic of Mauritius relating exclusively to the cfsp—see n.°s 90 e 91.

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violation of the core values of the Union by the member states: the competence attributed to the Court is a competence only in respect of procedural stipulations contained in article 7 teu (and not on the substantial matter of violation of such core values which is not in line with the enlargement of the jurisdiction of the cjeu and the place of the Charter, after the Treaty of Lisbon, within the eu sources of Law). In fact, in a moment in which is discussed the accession of the eu to the echr and therefore the submission of the eu as a defendant before the ECourtHR—no rule in the treaty foresees expressly the competence of the cjeu in the matter of fundamental rights (being however clear that the eu sources of fundamental rights are included in the legality block that the cjeu is bound to guarantee and apply). And the future developments on the accession can lead to a dual protection of fundamental rights within the eu Legal Order according to the legal basis of the infringed right—the echr (two levels of transnational judicial protection within the cjeu and the ECourtHR) and the Charter (one level of transnational judicial protection within the cjeu). 5

Future (Upcoming) Challenges

The Relationship with Other Systems of International Justice: The Accession of the European Union to the European Convention on Human Rights and the Relationship between the Court of Justice of the European Union and the European Court of Human Rights Firstly some remarks must be done on the future (upcoming) challenge regarding the relationship with other systems of international justice in the perspective of the accession of the eu to the echr and the future relationship between the cjeu and the echr. Up to now, the cjeu as acted formally as a ‘closed’ system—although not ignoring the case law of other international (universal or regional) courts and jurisdictions. In the cases where the eu is already a part of a judicial international system—the wto and the itlos cases—the domains of competence in which the eu can bring an action or be sued (and it has been so) are ‘specific’ domains of eu competences (and policies). The announced accession of the eu to the echr—and the final version of Draft Agreement of Accession35 –, despite the advisory opinion of the cjeu

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Document 47+1(2013)008rev2, Fifth Negotiation Meeting between the cddh Ad Hoc Negotiation Group and the European Commission on the Accession of the European

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issued on the 18 December 2014 being contrary to the Draft Agreement of Accession36 –, puts things in a different perspective. Firstly, because the area of fundamental rights (although not identified as such in the founding treaties, or even as a shared competence, as mentioned above) is a transversal one that has implications in all eu policies and actions—and including those that today are excluded from the scope of jurisdiction of the cjeu (the cfsp, included in the External Action of the eu and foreseen in the teu), but will not be excluded from the scope of jurisdiction of the ECourtHR according to the Draft Agreement on the Accession; secondly because this accession does not imply only state members (or organisations, as the wto system), but also legal and private persons, namely the citizens; thirdly because this accession may imply a real formal (and material) hierarchy between the Strasbourg and the Luxembourg Court (since both have competence to rule on the violation of fundamental rights foreseen in the echr)—and such hierarchy derives clearly from the draft agreement on the accession when the mechanism of co-respondant is at stake;37 finally because it raises an issue of dual (double/ triple) judicial protection within the eu according to the source of violated fundamental right (echr: three (national courts, cjeu, ECourtHR); Charter (national courts, cjeu)—which can lead to a differentiation contrary to eu Law. In fact, some of the arguments put forward by the Court of Justice in the Opinion 2/13 relate to some of these issues—namely the scope of jurisdiction of the cjeu regarding cfsp.38 In this respect, according to the Court of Justice—and differently from the view of the Advocate-General39 –, the draft agreement fails to have regard to the specific characteristics of the eu law with regard to the judicial review of acts, actions or omissions on the part of the eu

36

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Union to the echr, Final Report to the cddh, of 10 June 2014, Appendix I, Draft revision agreement on the accession of the European Union to the Convention for the protection of Human Rights and Fundamental Freedoms and Anex V, Draft explanatory report on the Agreement on the Accession of the European Union to the Convention for the Protection of Human Rights and Fundamental Freedoms. Opinion 2/13 of the Court (Full Court) of 18 December 2014 on the Draft agreement on the Accession of the eu to the echr, issued on the basis of art. 218 (11) tfeu at the request of the European Commission. Art. 3(6) of the Draft Agreement on the Accession. Opinion 2/13, viii, B), 2, e) The specific characteristics of eu law as regarding judicial review in cfsp matters, n.°s 249–257. View of Advocate-General KOKOTT delivered on 13 June 2014, vi, A), 3, c), Legal protection in the cfsp, n.°s 82–103, e C), 1, b), iii), The discrepancy between the scope of powers of the ECtHR and those of the Court of Justice of the eu in the framework of the cfsp, n.°s 185–196.

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in cfsp matters in that it entrusts the judicial review of some of those acts, actions or omissions exclusively to a non-eu body.40 It is sure that there is an important dialogue between the cjeu and the echr and reciprocal influences in their case law can be found,41 but the accession, according to the Draft Agreement, to some extent, will put an end to or at least will modify substantially this ‘informal’ dialogue since, as it is, the Draft Agreement may imply an hierarchy with primacy of the ECourtHR –which would be a major change in the relationship between the two transnational Courts. The opinion of the Court of Justice 2/13 on the Draft Agreement of Accession, concluding that such Agreement is not compatible with eu law—Article 6(2) teu and Protocol (N° 8) relating to Article 6(2) of the Treaty on the European Union on the accession of the Union to the European Convention on the Protection on Human Rights and Fundamental Freedoms—will allow the necessary time to evaluate the juridical issues still open regarding the accession of the eu to the cehr and the relationship between the two (transnational) Courts, namely those addressed by the Court of Justice that led to the mentioned (negative) conclusion, as well as other relevant issues in the perspective of the guarantee of the specific characteristics of the eu legal Order either pointed out by the Advocate-General in her View on which depend the compatibility of the Draft Agreement with the Treaties42 or ­previously by the doctrine—which is namely the case, besides those already mentioned, of the 40

41

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The other main reasons for which the cj held that the Draft Agreement on the accession is not compatible with eu law are the following: it is liable adversely to affect the specific characteristics and the autonomy of eu law in so far it does not ensure coordination between Article 53 of the echr and Article 53 of the Charter, does not avert the risk that the principle of Member State’s mutual trust under eu law may be undermined, and makes no provision in respect of the relationship between the mechanism established by Protocol No 16 and the preliminary ruling procedure provided for in Article 267 tfeu; it is liable to affect Article 344 tfeu in so far it does not preclude the possibility of disputes between Member States or between Member States and the eu concerning the application of the echr within the scope ratione materiae of eu law being brought before the Court; it does not lay down arrangements for the operation of the co-respondent mechan­ ism and the procedure for the prior involvement of the Court of Justice that enable the specific characteristics of the eu and eu law to be preserved (Opinion 2/13, n.° 258). Vg, involving eu secondary law on asylum, the Decision of the ECourtHR of 21/1/2011, mss/Belgium and France and the Decision of the cj of 21/12/2011, ns and me, C-411/10 and C-493/10, n.° 88. That is the case, among others, of ensuring, in such a way as to be binding under international law, that the prior involvement of the cjeu pursuant to Article 3(6) of the Draft Agreement extends to all legal issues relating to the interpretation, in conformity with the echr, of eu primary law and eu secondary law and that requests by the eu and its Member States pursuant to Article 3(5) of the Draft Agreement for leave to become

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future of the (rebuttable) presumption of equivalent protection by the eu legal Order used by the ECourtHR;43 the relationship between the «just satisfaction» (article 41 echr) and the action for damages caused by the eu (articles 268 and 340 tfeu) in the perspective of the exhaustion of «domestic remedies» (article 35 cehr); or even of the lack of procedural means in the eu founding treaties in force to ensure the prior intervention of the cjeu foreseen in article 3(6) of the Draft Agreement of Accession and whether such mechanism is compatible with eu Law to the extent that as designed will imply the (material) hierarchy of the ECourtHR. Moreover the ‘time window’ opened by the conclusion of the Opinion 2/13 of the cjeu will also allow to reflect further, in a wider perspective, on the (still existing) insufficiencies of the eu Jurisdictional system, including regarding the protection of fundamental rights, as well as on the option to strength such system as an (interim or even definitive) alternative to the path of accession of the eu to the echr. Scope of Jurisdiction: Fundamental Rights and Common Foreign and Security Policy Finally, and considering the mentioned wider perspective, some closing brief remarks must be made on the future challenge regarding the revision of the Treaties concerning the scope of jurisdiction of the cjeu in respect of the protection of human rights and the control of the cfsp. In what concerns protection of fundamental rights and judicial review in this respect, and since article 19 of teu is silent in this respect, the eu primary law should, at least, foresee in a clear way that the judicial control attributed to the cjeu includes the protection of the fundamental rights as transversal matter related with all eu policies and actions, including the cfsp. The review of the current limited scope of the jurisdiction of the cjeu regarding cfsp will certainly be a challenge within a future revision of the founding treaties. It must be underlined that a Union of Law requires that all areas of eu integration, including the cfsp, where the action of the eu has increased, should be subject to judicial review. Moreover, it is not understandable that Member States are ready to allocate such control to an external transnational regional court (the ECourtHR) and do not allow the cjeu to exercise such control—at least in a first level of judicial review.

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co-respondents are not subject to any plausibility assessment by the ECourtHR (vide n.°s 172–174, 229–235 and vii, n.° 280). Enounced in the Decision of the ECourtHR of 30/6/2005, Bosphorus, 45036/98, n.°s 155 and 156 and applied afterwards in the Decision of the ECourtHR of 20/1/2009, Cooperatieve Producentenorganisatie van de Nederlandse Kokkelvisserij ua, 13645/05, B.3, p. 17 and following.

chapter 27

Infringement Procedure and the Court of Justice as an EU Law’s Assurer: Member States’ Infringements Concerning Failure to Transpose Directives and the Principle of an Effective Judicial Protection Joana Covelo de Abreu In the eu, an infringement procedure is a judicial mechanism, which allows the cjeu to declare Member States’ infringements concerning eu original and secondary law. In this sense, and as far as eu law is concerned, the failure to fulfil the obligation of notifying measures of directives’ transposition determined the largest number of infringement procedures. This number was so high that the Lisbon Treaty revised the very own regime of infringement procedure, more specifically, the cjeu decisions’ character. Before the Lisbon Treaty, when there was not a directive transposition, the cjeu could only impose on the errant Member State a lump sum or a penalty payment when the latter had not complied with the cjeu’s first decision. After the revision referred to above, the cj had the ability to, simultaneously, declare the infringement and impose a lump sum or a penalty payment in the first infringement procedure. In this context, taking as read that the eu already has a Constitution based on its constitutive Treaties (as is constantly referred to in cj case law, they operate as an eu “basic constitutional charter”), the cj appears as a constitutional court where infringement procedure is a control mechanism on Member States’ legislative omissions. As was introduced in the tfeu the novelty concerning the possibility of lump sums or penalty payments’ imposition to Member States in the first infringement procedure, citizens’ rights protection was indirectly enhanced. But, in fact, citizens and companies do not have the capacity to bring proceedings before the cjeu—only the European Commission and Member States have—and they can only present a complaint to the European Commission about the infringement. Knowing that there has been a long discussion regarding a new Treaties’ revision, the principle of an effective judicial protection (as derived from both articles 19, n.° 1, 2nd paragraph of the tfue and 47 of the cfreu and from the cjeu case law) is the most needed “laboratory” to see if there is a social maturation capable to justify and even to promote that citizens

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_028

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and companies gain the capacity to bring proceedings before the cjeu on an infringement procedure. 1

Infringement Procedure and the cj as an eu Law’s Assurer

Under infringement procedure, we can recognize the cjeu as an eu Law’s assurer since it has, as last addressee, national legislator. In this sense, we have to explain that we made this presentation having in mind that the eu can be seen as a predominantly constitutional legal order.1 In fact, the eu is not a State but “creates juridical rules that are biding to MemberStates and their citizens” functioning “as a legal order, or as an organised settlement of legal rules”.2 In the same way as a State creates legal rules and is bound by them, the eu creates legal rules and is bound by the rules it creates—where the Treaties are the eu legal basis as national Constitutions are Member-States’ legal basis.3 eu Treaties settle its objectives, its institutional arrangement and its institutional balance principle’s observance. In this sense—and as was already stressed by the cjeu—treaties function as an eu Constitution. In this context, infringement procedure is a eu judicial mechanism that allows the European Commission (under article 258 of the Treaty on the Functioning of the European Union—tfeu) or other Member-State (under article 259 of the tfeu) to react when a Member-State does not comply with eu original or secondary law. It allows the cjeu to declare that infringement in a process that is marked by two major phases: a preliminary, non-judicial one, where the Commission makes all necessary informal approaches to the breaching State and assesses if there are the necessary conditions (namely, social, economic, political, etc.) in order for that State to comply with eu Law; and a judicial phase, where the cjeu is called upon to intervene and to evaluate if that State is, in fact, in breach of eu Law, declaring the infringement. In this sense, when there is a non-compliant State, we have to imagine two different scenarios: (1) that Member-State ends up complying with eu Law, even if late; or (2) it does not fulfil its obligations derived from eu Law.4 In fact, 1 See Maduro, Miguel Poiares, A Constituição Plural. Constitucionalismo e União Europeia, Principia, Estoril / Cascais, 2006. 2 See Silveira, Alessandra, Princípios de Direito da União Europeia (Doutrina e Jurisprudência), 2.ª Edição Revista e Atualizada. Erasmus. Ensaios & Monografias, Quid Juris, 2011, p. 26. 3 See Silveira, Alessandra, Princípios de Direito da…, pp. 26 e 27. 4 See Mesquita, Maria José Rangel de, Efeitos dos Acórdãos do Tribunal de Justiça das Comunidades Europeias proferidos no âmbito de uma acção por incumprimento, Almedina, 1997, p. 69.

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since the early stages of the integration process, the eu dealt with the need of assuring the fulfillment of the cjeu’s decisions. When it comes to the declaratory decision in the infringement procedures, its execution depends, almost entirely, on the will of the Member-State, where its behaviour is decisive for the prosecution of the European objectives.5 In this matter, the tfeu does not define the notion of infringement—it was derived from the cjeu’s jurisprudence. Taking into consideration Fausto Quadros and Ana Maria Guerra Martins position, infringement is “the violation by national authorities of the rules, norms and mandatory principles of”6 eu Law.7 With the Lisbon Treaty, infringement procedure suffered a legislative change concerning States’ failure to transpose directives. In fact, if under the previous regime, the cjeu could not condemn the Member State in the payment of a lump sum or a penalty payment in the first infringement procedure—in fact, it could only declare the infringement—the Lisbon Treaty conceptualized the opportunity, when there was a failure to transpose a directive, of the Member State being condemned to a lump sum or a penalty payment in the first procedure. Therefore, it became clear that besides declaring the infringement, the cjeu has now the power (even if not entirely absolute) to simultaneously declare the infringement and condem the Member-State to a lump sum or a penalty payment. And this happened because the major number of infringement procedures was mainly based on failure to transpose directives. The cjeu decided that we are facing a failure to transpose directives when the omission is “real”, as derived in case law such as The Commission vs. Italy where this Court declared that despite the fact that Italian legislation was contrary to eu Law, the infraction was merely patent.8 It also declared that even when national legislation is not mandatory, it can be in breach of the Treaties and infringement can be declared.9 Given that the cjeu works as a constitutional court when Member-States legislative omissions happen on transposing directives, it makes sense for us to analyse if not only the Commission and other Member-States should have 5 See Mesquita, Maria José Rangel de, Efeitos dos Acórdãos do Tribunal de Justiça…, p. 69. 6 See Quadros, Fausto de, and Ana Maria Guerra Martins, Contencioso da União Europeia, 2ª Edição, Almedina, 2009, p. 228 (free translation). 7 See also Bergerès, Maurice-Christian, Contencioso Comunitário, tradução, Resjurídica, p. 184. 8 See cjeu case law Commission vs. Italy, 15th April 1970, process n.° 28/69, Rec. 1970, pp. 187 a 197. 9 See cjeu case law Code du travail maritime français, 4th April 1974, process n.° 167/73, Rec. 1974, pp. 359 a 374.

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legitimacy to start this procedure or, in the light of the principle of an effective judicial protection, also private parties should have legitimacy. 2

Infringement Procedure and its (Active and Passive) Legitimacy

Concerning passive legitimacy, breaching Member-States are those that can be called upon in order to explain why they are infringing eu Law. However, it is the Member-State itself—and not one of its powers (legislative, judicial or administrative)—that has passive legitimacy.10 “Infringement’s author is the State as a whole. State is responsible by the breach whatever the public collective person or organ is responsible for the action or omission that based the infringement”.11 And this happens because of the loyalty principle imposed on Member-States—these are going to answer for their powers’ conduct, even if this relates to the behaviour of the judicial power (since we know that the judicial power enjoys independence, although that does not affect the fact that its Member-State can be in breach of eu Law because of its action or omission).12 On the other hand, we find active legitimacy concentrated among the European Commission and the Member-States (articles 258 and 259 of the tfeu).13 Therefore, we can see that depending on who began the proceedings, the procedure will have different phases. Under article 258 of the tfeu, the Commission has to shown a real and direct interest in reacting against a Member-State, which is “consistent with [the first’s] task of ensuring”14 the application of eu Law. In fact, it is not always necessary to involve the cjeu to make the breaching Member-State comply with eu Law—that is why the Commission has a wide power concerning the moment it will present the procedure before the cjeu (when the breaching Member-State maintains its infringement situation). The Commission also has the ability not to present the infringement procedure when it understands that the breaching Member-State has already complied. But this understanding does not certify that the breaching Member-State actually surpassed its 10 See cjeu case law Commission vs. Belgium, 2nd December 1986, process n.° 239/85, Col. 1986, p. 3660. 11 See Quadros, Fausto de, and Ana Maria Guerra Martins, Contencioso da União…, p. 232 (free translation). 12 See Silveira, Alessandra, Princípios de Direito da…, p. 182. 13 For further developments, see Weatherill, Stephen, Cases & Materials on eu law, 8th Edition, Oxford University Press, 2007. 14 See Lenaerts, Koen, Dirk Arts and Ignace Maselis, Procedural Law of the European Union, Edition Robert Bray, 2nd Edition, Thompson, Sweet & Maxwell, London, 2006, p. 143.

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infringement.15 When a complaint is presented to the Commission—in order to obtain from it a reaction against the infringement under article 258 of the tfeu—and it does not act accordingly, there will not be any basis for an action for annulment because “the Commission does not adopt any binding legal act in the course of the pre-litigation stage: it does not determine the rights and duties of the Member State or afford any guarantee that a given line of conduct is compatible with the Treaty. Accordingly, an opinion of the Commission cannot release a Member State from its Treaty obligations and certainly does not give it a license to restrict rights which individuals derive from the Treaty”.16 “In such a case, the source of any damage lies in the Member State’s infringement of the Treaty and not in any shortcoming of the Commission”.17 On the other hand, it is not necessary that any complaint is presented to the Commission, since it can react under its own initiative. The Commission has a discretionary power of submitting or not an infringement procedure to the cjeu since it is “the guardian of the Treaty”.18 Deciding about this specific matter, the cjeu noted that the Commission “has the ability and not the duty to promote an infringement procedure”.19 Under article 259 of the tfeu, other Member-States have active legitimacy to promote the infringement procedure. There is, however, a different procedure to be observed. The Member-State (with active legitimacy) shall present its complaint to the Commission. Here, the informal procedure begins, allowing the breaching Member-State to present its written and oral observations. After this phase, the Commission has the ability to present a reasoned opinion, where the latter will expose it understands that there was or there was not an eu Law infringement. If the Commission does not present its reasoned opinion in three months (after the Member-State has presented its complaint), the Member-State with active legitimacy has the ability to initiate an infringement procedure before the cjeu. However, since the Commission has to take notice of the infringement, it allows it to continue the proceedings under article 258 of the tfeu. But if the Commission uses that power, nothing prevents the Member-State from also proceeding with the infringement procedure. In fact, in those cases the 15 16 17 18 19

See Lenaerts, Koen, Dirk Arts e Ignace Maselis, Procedural Law of the…, p. 145. See Lenaerts, Koen, Dirk Arts e Ignace Maselis, Procedural Law of the…, p. 146. See Lenaerts, Koen, Dirk Arts e Ignace Maselis, Procedural Law of the…, p. 147. See Lenaerts, Koen, Dirk Arts e Ignace Maselis, Procedural Law of the…, p. 144, footnote n.° 89. See Quadros, Fausto de, and Ana Maria Guerra Martins, Contencioso da União…, p. 243 (free translation).

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Commission presents its reasoned opinion on just one of the topics the Member-State mentioned, the Member-State has the right to continue with the proceedings, not only about what was referred to in the reasoned opinion, but also on what it referred to in its complaint but did not receive the Commission’s support for. Until 2006, only 4 infringement procedures were presented under article 259 of the tfeu and only two were decided by the cjeu. But the main issue under discussion concerns the fact that neither article 258, nor article 259 of the tfeu say anything about private parties having the ability to promote an infringement procedure. In fact, it is settled that citizens and companies do not have the right to promote an infringement procedure. Despite the fact that they do not have active legitimacy,20 they are not completely excluded from the infringement procedure. In fact, they have the ability to present a complaint to the Commission. Afterwards, the Commission will have the possibility to investigate the reasons presented and whether those are true and whether the facts evoked are or are not an infringement situation. But the Commission does not have to prosecute the complaint since there is not an obligation imposed on the Commission. Stephen Weatherill also calls our attention to the fact that the breaching State can be held liable on a national level when direct effect is at stake. In this particular case, national courts will adopt measures that can end the infringement, being able to refer to the cjeu if they have any doubts. Therefore, we can grasp some limitations concerning the infringement procedure’s reactive force concerning who can initiate the proceedings: when national law is not in compliance with eu Law—namely, when a directive’s transposition does not occur—first repercussions are felt by the European citizens’ juridical sphere. It is our believe that this was one of the main reasons the European legislator included the innovation under article 260, n.° 3 of the tfeu: now, the breaching Member-State can be condemned to the payment of a lump sum or a penalty on the first infringement procedure when it failed to transpose directives. Despite this last revision, it seems that the mechanism could be more operative if it allowed citizens and companies to promote an infringement procedure, in the same way that legitimacy is given to MemberStates (under article 259 of the tfeu). Therefore, besides being able to present a complaint to the Commission—that might or might not be pursued by it— private parties would have the power to submit the matter to the Commission’s consideration in order to present a reasoned opinion, but after a three-month period without the Commission presenting its position, they would have the chance to promote proceedings before the Court of Justice. 20 See cjeu case law Star Fruit, 14th February 1989, process n.° 247/87, Rec 1989.

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In this theoretical construction, we have to suppose some kind of filtering mechanism so the cjeu would not be “sunk” in infringements procedures: some kind of a popular action would be the best choice. We are sure about one thing: it would promote a closer relationship between private parties and the European institutions and it would promote a better way to look after compliance with eu Law. 3

The Principle of an Effective Judicial Protection as Justification to Active Legitimacy of Private Parties

As we know, the principle of an effective legal protection, consecrated in articles 19, nr. 1, 2nd paragraph of the Treaty of the European Union (teu) and 47 of the Charter of Fundamental Rights of the European Union (cfreu), is composed of several layers, in order to grant protection to both parties in a litigation. It comprises a right to action—given to the person that will start the litigation in the competent court—which states that all people in the eu have an equal opportunity to go to court to defend those rights. It also contemplates a right to an equal and impartial judgement, granted by an equidistant judge and that judgement will not be delayed for a greater time. It also presupposes that there is a right to equal positions when it comes to access to justice despite economic differences, which means that MemberStates must provide the necessary means to everyone so that they can see their litigations being presented in court, whether they have the financial capacity to do so or not. This principle of an effective legal protection unfolding allows private parties to know that eu law will be applicable in every Member-State in a harmonious and homogeneous way. It is due to the cjeu case law that it is possible to understand the principle of an effective legal protection as an eu general principle and as a fundamental right. To our matter, we must call upon discussion of the right to action consecrated in article 47, 1st paragraph of the cfreu. In this sense, particular parties have, today, the possibility to present a complaint to the Commission when they face a breach of eu Law. However, they do not have the certainty that their complaint will be analysed and proceedings will begin under an infringement procedure. When it comes to lack of directives’ transposition, it would be useful if private parties could gain active legitimacy like the one that is recognised to Member-States, in order to have the chance to promote an infringement procedure under the cjeu when the Commission does not deliver its

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reasoned opinion within three months of the date on which the matter was brought before it. However, this can create a complex delay issue on the cjeu decisions: enlarging active legitimacy to private parties can lead to the impossibility of the cjeu deciding in a short period of time. Therefore, a mechanism of preliminary acceptance of claims would be the best solution so that the cjeu would not have to deal with an exponential increase of cases to decide.

chapter 28

The United Nations Sanctions Regimes through a Judicialized European Union Perspective Mateus Kowalski and Sofia Machado 1 Introduction The restrictive measures also known as ‘sanctions’ are binding measures of a political-administrative character (thus without a judicial nature), which have as purpose the maintenance of international peace and security, as well as the implementation of the specific political decisions associated to it (thus, in theory, without a punitive purpose1) (Kowalski, 2014). They have in principle a complementary and last-resort nature, being chosen and applied when diplomacy is not enough to prevent or resolve a situation of threat to or a breach of peace, as well as the violation of International Law including Human Rights Law. The restrictive measures include arms embargoes, as well as embargoes of other military or double-use goods; travel bans; and economic and financial restrictions such as trade restrictions or the freezing of bank accounts and of other assets. The sanctions regimes can result from multilateral sources, this being the case with respect to the sanctions adopted by the United Nations (un) or by the European Union (eu), or unilateral sources when adopted by a single country. At the un level, the creation of these restrictive measures and their implementation, as well as the establishment of the Security Council Committees that manage them, are tasks belonging to the un Security Council. Examples of un sanctions regimes in force include restrictive measures directed to Iran2, Libya3 and Al-Qaida.4,5 1 It is worth noting that, for instance, the Guidelines of the Al-Qaida and Associated Individuals and Entities un Security Council Committee for the Conduct of its Work clearly state that “sanctions are intended to be preventative in nature” while setting them apart from any type of criminal proceedings (United Nations, 2013: 4). 2 Sanctions regime concerning Iran established pursuant to Security Council Resolution S/RES/1737 of 27 December 2006. The sanctions include an embargo on proliferation-sensitive nuclear and ballistic missile programmes, a ban on the export and/or procurement of any arms and related materiel from Iran, a ban on the supply of the certain categories of conventional weapons and related materiel to Iran, and a travel ban and an assets freeze on designated persons and entities.

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Today, these complex regimes are arguably the most powerful and effective tools available for the maintenance of international peace and security. At the eu level, sanctions regimes are considered a vital tool of eu foreign policy.6 While some of those regimes consist of autonomous measures to be applied by the eu,7 others, known as ‘bilateral country regimes’, give effect to previous un Security Council resolutions—as are the cases of the sanctions regimes concerning Libya, Iran or Al-Qaida. Indeed, all the un sanctions are also adopted at the eu level in its entirety.8 Since the un Security Council decisions are only binding on the un Member States (and not on their national private natural and legal persons), their subsequent adoption at the eu level makes it unnecessary to adopt a national legal act by any of its twenty-eight Member States in order to implement at the national level the restrictive measures decided by the un Security Council level. This chapter deals with the ‘bilateral country regimes’, since this type of sanctions regime allows for a more direct analysis of the impact of the decisions by the Court of Justice of the European Union (the ‘Court’) on the un sanctions system. One of the critical issues here is the difference in standards and mechan­ isms of review between the un legal order, on the one side, and the eu legal order, on the other—the latter being more restrictive and protective of fundamental rights, in particular in what concerns the rights of defense of the persons or entities to which a restrictive measure is applied. There is no un court to which natural or legal persons subject to sanctions can resort. In response to the appeals for a fairer review system, the Office of the Ombudsperson came into existence, in 2010, functioning independently within the un Security Council. However, this administrative review, besides being restricted to the Al-Qaida sanctions regime, may not meet the due process standards set by

3 Sanctions regime concerning Libya established pursuant to Security Council Resolution S/RES/1970 of 26 February 2011. The sanctions include a travel ban, an assets freeze, an arms embargo, as well as measures in relation to attempts to illicitly export crude oil. 4 Sanctions regime concerning Al-Qaida and associated individuals and entities established pursuant to un Security Council Resolution S/RES/1267 of 15 October 1999. The sanctions include a travel ban, an assets freeze, as well as an arms embargo. 5 Currently, there are in force 15 un sanctions regimes and 36 eu sanctions regimes. 6 See more about eu sanctions policy in www.eeas.europa.eu/cfsp/sanctions/index_en.htm. 7 The ‘autonomous sanctions regimes’ are adopted regarding countries or situations for which the un Security Council has not adopted any sanctions regime, as are the examples of the eu sanctions regimes regarding Syria or Russia. 8 Although the eu sanctions may go beyond the scope of a certain un sanction regime, as is the case of the eu sanctions regime regarding Iran.

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Human Rights Law9 and eu Law (or, for that matter, eu Member States Law). Furthermore, all the twenty-eight eu Member States are also bound by the Charter of the un (which establishes the priority of the un legal order). This means that a conflict of obligations may arise to those twenty-eight States. At present there is a significant caseload pending before the Court regarding restrictive measures: there are 96 such cases pending. The Court’s jurisprudence is setting the tone of the eu debate and also contributing to the un debate on sanctions. Most of the problems regarding ‘bilateral sanctions regimes’ implementation, at both eu and national levels, may best be solved by the adoption of adequate due process mechanisms upstream, at the un level. The present chapter argues that this may well be one of those eu constitutional moments induced by the Court, where its impact is felt, not only at the eu internal level, but also indirectly at the un level, in an interesting bottom-up flow from a regional to a universal realm. The present chapter will address first the adoption and implementation of sanctions regimes at the un and the eu levels. Secondly, the chapter will consider the red lines that the Court is delineating with regard to the adoption and implementation of those regimes by referencing some of the most emblematic cases on the subject, as well as the impact of its judicial discourse upstream at the un system. There is an intense informal dialog going on between Brussels and New York, notably regarding the ‘bilateral sanctions regimes’. The pressure on the un and on the twenty-eight Member States which are also members of the eu, is therefore immense. 2

The Adoption of Restrictive Measures at the un and eu Levels

2.1 The un Universal Level The adoption of un sanctions regimes, it being a key responsibility of the Security Council, was only possible after the so-called ‘return to the Security Council’ in the early 1990’s after the end of the Cold War. The year 1989 marks the end of the antagonism between the great powers, which resulted in the blockage of the Security Council in previous decades. The revitalization of the Security Council has, as a symbolic moment, the delivery to the un Secretary General on the 3rd November 1989 of a letter by high officials of the 9 See the report of the Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, un General Assembly document A/67/396 of 26 September 2012.

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Soviet Union and the United States requesting the inclusion in the agenda of the General Assembly, as an urgent matter, of an additional item entitled “enhancing international peace, security and international co-operation in all aspects in accordance with the Charter of the United Nations”.10 This event represents the end of the Cold War at the un. Another key moment happened on the 31st January 1992, when the Security Council met for the first time in its existence at the level of Heads of State and Government. The subject of the meeting was ‘the responsibility of the Security Council in the maintenance of international peace and security’. At the end of this historical gathering, it was officially stated that “the members of the Council also recognize that change, however welcome, has brought new risks for stability and security. (…) The international community therefore faces new challenges in the search for peace”.11 This solemn declaration symbolizes the revitalization of the Security Council after the end of the Cold War: the once antagonizing powers committed themselves to collective action for peace and security at the Security Council. The recourse to non-military measures, i.e. to sanctions, could now be enhanced as a privileged tool for the maintenance of international peace and security. Sanctions regimes are decided by the Security Council under Chapter vii of the Charter, more precisely under Article 41. In fact, in accordance with Article 39 of the Charter, only if the Security Council determines the existence of a threat to the peace, a breach of the peace or an act of aggression, can it activate the powers conferred to it under Chapter vii, and decide on enforcement measures for the maintenance or restoration of international peace and security: either non-military or military measures.12 The non-military measures are listed in a non-exhaustive way in Article 41: in addition to the references to economic sanctions, the disruption of transport and communications, or the severance of diplomatic relations, this Article also states that the Security Council may decide on any other measure, not involving the use of armed 10 See un General Assembly document A/44/245 of 3 November 1989. The explanatory memorandum stated that “in the light of recent developments, there are renewed prospects for international co-operation towards common goals” (§2). Following the inclusion of this item in the agenda, the General Assembly adopted the resolution A/RES/44/21 of 15 November 1989. 11 See un Security Council document S/23500 of 31 January 1992, 2–3. 12 Article 39 reads as follows: “the Security Council shall determine the existence of any threat to the peace, breach of the peace, or act of aggression and shall make recommendations, or decide what measures shall be taken in accordance with Articles 41 and 42, to maintain or restore international peace and security.”

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forces, it considers appropriate to the situation.13 Currently, most of those measures shape the sanctions regimes operated through the Sanctions Committees, which are subsidiary organs of the Security Council established for each sanction regime. Today, Article 41 represents a cornerstone of the new system of collective security of the un. During the Cold War, however, it remained a dead letter being applied only twice: the embargo against Southern Rhodesia in 1965;14 and the embargo against South Africa in 1977.15 In contrast, since the end of the Cold War, enforcement action under Article 41 has become a common tool for maintaining or restoring peace. At first, most of the measures decided under Article 41 took the shape of comprehensive economic embargos, backed by military enforcement. Security Council action pursuant to the Iraqi invasion of Kuwait represents the first time in its history that such comprehensive embargos were employed.16 Through resolutions 661 (1990) and 678 (1990), acting under Chapter vii, the Security Council imposed an economic embargo against Iraq17 and authorized Member States to resort to “all necessary means (…) to restore international peace and security in the area”.18 However, the humanitarian side effects for the local populations of targeted countries became evident (Weiss et al., 1997). The sanctions regime on Iraq became a paradigmatic example of such side effects (Sponeck, 2006).19 Therefore, since the mid-1990’s the comprehensive economic embargos paradigm changed, and efforts began in order to develop the so-called ‘targeted sanctions’ also known as ‘smart sanctions’ (Cortright and Lopez, 2002). It was agreed that sanctions should strike precisely those responsible (individuals and entities) for the threat, breach of the peace or act of aggression, and leave innocents and the most vulnerable segments of the local population unaffected, including 13

14 15 16 17 18 19

Article 41 reads as follows: “The Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures. These may include complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.” See S/RES/217 of 20 November 1965. See S/RES/418 of 4 November 1977. At the time, other examples of similar measures included the implementation of economic sanctions against Libya, Serbia and Haiti. See also Caron (1993). See S/RES/661 of 6 August 1990, §3. See S/RES/678 of 29 November 1990, §2. As the author summarizes, there were widespread “calls for ‘humanizing’ sanctions for Iraq” (2006: 13).

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through the establishment of certain humanitarian exceptions in the Security Council resolutions (Matsukuma, 2009). The sanctions regimes are currently managed by Security Council Sanctions Committees that, upon receiving listing requests from Member States, designate the individuals and entities that are to be targeted. The deliberations of the Committees are based on evidence and information presented by the Member State that made the request (Cameron, 2006). The targeted individuals and entities are not informed prior to the decision to impose restrictive measures upon them. Listing determinations are also often made based on sensitive information that, due to national security concerns, cannot be made public and, as a consequence, those listed may never have access to the full body of evidentiary material presented against them (Biersteker and Eckert, 2009). Additionally, when an individual or entity is listed20 by the Security Council, through its Sanctions Committees, there is no un court to which they can resort.21 That also means that, as underlined by Keller and Fischer, there are no “legal safeguards countervailing a possible arbitrary exercise of political power” of the Security Council (2009: 258). 2.2 The eu Regional Level The adoption of restrictive measures falls under the eu Common Foreign and Security Policy.22 The Union does not have exclusive competences in this policy area. This is one area where essential authority remains with eu Member States, although the European Commission and, to a lesser extent the European Parliament, are associated with the process. The un Charter provides that the Security Council may decide restrictive measures under Chapter vii. Given the fact that the immediate subjects of Security Council restrictive measures are the un Member States, the obligation to implement the measures adopted is up to them, including the freezing of assets, travel bans, trade restrictions or arms embargoes, among other measures. Moreover, since the resolutions of the Security Council do not apply 20 21

22

The terms ‘designated’ and ‘listed’ (individuals or entities) are used interchangeably. Regarding the un order, there are no mechanisms of judicial review of sanctions or even, and more broadly, a political control (by the un General Assembly) or a judicial control of the activity of the un Security Council. The International Court of Justice has contentious competence only regarding States. The un Administrative Tribunal sole competences concern employment disputes of un Secretariat staff and the un Joint Staff Pension Fund. See also on the subject Bedjaoui (1994). See Articles 21 and following of the Treaty on European Union (tue) and 215 the Treaty on the Functioning of the European Union (tfeu).

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directly to individuals and private entities—for instance, Security Council resolutions have no direct effect on a bank that holds an account of a listed person—a procedure was instituted at the eu level in order to deal with the legal problems of national implementation of restrictive measures. Upon the adoption by the un Security Council of new sanctions, the eu adopts legal acts—regulations and decisions23—transcribing those restrictive measures, which have a direct effect on individuals and entities in all eu Member States.24 It is thus unnecessary to adopt a national legal act by any of the eu twentyeight Member States to give national implementation to the restrictive measures decided by the Security Council. In the end, the eu plays in this matter a ‘mediator’ role between the un legal order and that of each of its twenty-eight Member States. The eu legal system encompasses an active judicature, which, in accordance with the eu Treaties, has the power to review the conformity of eu legal acts with the fundamental rights and principles ensured by the eu. As such, there have been various instances where the Court has been asked to review the conformity of the eu legal acts that give effect to restrictive measures adopted by the Security Council with the fundamental principles of the eu. 3

The Impact of the Court in the Multilateral Sanctions Systems

3.1 The Limits Established by the Court At present there is a significant caseload pending before the Court of Justice of the European Union regarding restrictive measures: at the time of writing there are 96 such cases pending. Most of them are pending before the General Court—the first instance level court. The remaining cases are pending before the Court of Justice—the appellate level court. From the abundant case-law of the Court, it is illustrative to underline some of the most difficult challenges faced by the Court regarding sanctions, by

23

24

See Article 288 of tfue. A ‘Regulation’ is a binding legislative act that is generally and directly applicable to both public and private entities in all its terms. A ‘Decision’ is also directly applicable but only on those to whom it is addressed. Just to give a clarifying example, Security Council resolution 1970 (2011), which establishes restrictive measures concerning the situation in Libya was transcribed into the eu legal order through Council Decision 2011/183/CFSP (2011) and Council Regulation 204/2011 (2011).

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referring to some of the most emblematic cases on this subject and how the Court answered to them, thus building its own view on the matter and setting parameters on how the eu Law on the subject should be interpreted and applied, at least from its perspective. It is, nevertheless, important to keep in mind that the views of the Court are not necessarily consensual: many of its decisions were contested by eu Member States—which are concerned with the conflict that it creates with their obligations under un Security Council resolutions—and by other eu institutions.25 Nothing new here: it has always been like that when the Court induces constitutional moments.26 Furthermore, what is at stake is a difficult balance between the needs of security (to which States and political institutions tend to give priority) and the protection of fundamental rights (that the Court seems to privilege). On another tone, it is also relevant to recall the fact that some of the issues raised by the Court on sanctions can also be raised at national courts on very similar grounds. The standards of review are in general similar. If the Court finds that the legal acts imposing sanctions infringe upon eu Law, including fundamental rights, the Court may annul the part of the legal act concerning the applicant. However, the annulment of the act concerned may not have an immediate effect: those legal effects may persist by decision of the Court until expiration of the period for bringing an appeal or, if an appeal is brought, until that appeal is dismissed. During that period, it may be possible to remedy the infringements determined by the Court. 25

26

As an example, the Kadi ii case at the appeal phase had as appellants the European Commission, the eu Council and the United Kingdom; as other parties to the proceedings, Yassin Abdullah Kadi and France; as interveners in support of the European Commission and the United Kingdom, Bulgaria, Italy, Luxembourg, Hungary, Netherlands, Slovakia and Finland; as interveners in support of the eu Council, Bulgaria, Czech Republic, Denmark, Ireland, Spain, Italy, Luxemburg, Hungary, Netherlands, Austria, Slovakia and Finland (Commission, Council, United Kingdom vs. Yassin Abdullah Kadi, Joined Cases C-584/10 P, C-593/10 P and C-595/10 P). Throughout its history, the Court has contributed immensely to the development and to the integration process of the eu at the legal and political levels, and also as an idealist concept. The Court’s jurisprudence was essential in the building of the eu, at least in three different areas: the shaping of the eu legal order (for instance with the Van Gend & Loos judgment of 1963 introducing the principle of the direct effect of Community Law in the Member States, or with the Costa judgment of 1964 establishing the primacy of Community Law over national law); the construction of the common marketplace (e.g. the Dijon judgment of 1979 or the Bosman judgment of 1995); and the affirmation of fundamental rights as a corner-stone of the Union (e.g. the Defrenne judgment of 1976 or the Brown judgment of 1998).

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For the present purpose, it is useful to group the Court’s decisions in two thematic categories. The first being fundamental rights standards; and the second being the relation between the eu and the un legal orders. Regarding the first category (the fundamental rights standards), the Court has been reluctant to accept any derogation when it relates specifically to fundamental rights, even though it generally accepts some derogations to eu Law. When restrictions to fundamental rights are needed to preserve security, the Court accepts that those restrictions may be justified. However, the Court stresses that those restrictions have to meet some basic standards common to any order that is based on the rule of law, notably the rights of defense, in particular the right to be heard and the right to effective judicial review of fundamental rights restrictions. According to the Court, the rights of defense require targeted individuals to be informed of the evidence presented against them that forms the basis of the imposition of restrictive measures, within an acceptable period of time after their enactment, and to be granted an opportunity to voice possible objections. The Court also added that failure to provide relevant information prevents individuals from defending their rights in the best possible way and the Court from fulfilling its duty under the eu Treaties of delivering an effective judicial review. If not, the legal act establishing sanctions under review before the Court can be annulled where it concerns the applicant. That was the ruling of the Court in several cases, including the ompi27 or the Kadi I28 cases, among many others. The Court has called to attention three procedural rights that are extremely sensible and difficult to cope with in order to guarantee the rights of defense as a whole: the statement of reasons, access to classified information and evidence. Regarding the statement of reasons, the Court has argued in various cases that a eu Council act imposing restrictive measures must be accompanied by a statement of reasons referring not only to the statutory conditions of application of that act, but also to the actual and specific reasons for which the Council considers that the person or entity concerned must be subject to such measures. In the Kadio Morokro case,29 Mr. Morokro was the president of  the  Pétro Ivoire Company and did not exercise any official governmental 27 28

29

Judgment of the Court of First Instance of 12 December 2006 in the case T-228/02, Organisation des Modjahedines du peuple d’Iran vs. Council of the European Union. Judgment of the Court of Justice of 3 September 2008 in the joined cases C-402/05 P and C-415/05 P, case Yassin Abdullah Kadi and Al Barakaat International Foundation vs. Council and Commission. Judgment of the General Court of 16 September 2011 in the Case T-316/11, Kadio Morokro vs. Council.

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f­ unctions. The Court recalled that a Council act imposing restrictive measures has not only to comply with eu Law, but has also to state the specific reasons that justify the listing of that particular person. Since the European Council had not stated any specific reasons for the listing of Mr. Morokro, the Court annulled the act where it referred to his listing. Another directly related and sensitive issue is the matter of access to classified information where the real reasoning for listing someone often lies. Because it is classified, the States that propose the listing may not be willing to give access to such information to the listed person or entity, or even to the Court. However, it is the Court’s understanding, as for instance in the Kadi ii case,30 that judicial review must include the review of all the information that has determined the listing, which necessarily includes classified information. If the classified information is not disclosed to the Court, the Court may rule on the insufficiency of reasons for the listing and, therefore, decide on the annulment of the eu legal act that transcribes the restrictive measures adopted by the un Security Council against an individual or entity. Regarding evidence of the reasons that lead to a listing, in the Fulmen and Mahmoudian case31 the General Court rejected the argument by the European Council that the judicial review must be limited to determining that the reasons relied on to justify the adoption of restrictive measures are merely ‘probable’. The abstract ‘probability’ is not enough: it further requires concrete evidence and information. The Court also rejected the view that the burden of proof was with the Member States that made the listing proposal, and that evidence could not be disclosed if it came from confidential sources. In what concerns the second category (the relation between the eu and the un legal orders) the Kadi I case has triggered this both interesting and problematic issue. Yassin Abdullah Kadi, a resident of Saudi Arabia, was designated by the un Security Council under the Al-Qaida Sanctions Regime. In order to give effect to the restrictive measures adopted by the un Security Council, the European Council, within the then European Community, adopted in 2002 a Regulation32 ordering the freezing of the funds and other economic resources of the persons and entities listed in its annex. Mr. Kadi was designated and thus included in that list. He then brought action before the Court of First Instance33 for annulment of that regulation. In its judgment of 2005, the Court 30 31 32 33

Judgment of the Court of Justice of 18 July 2013 in joined cases C-584/10 P, C-593/10 P and C-595/10 P, Commission, Council, United Kingdom vs. Yassin Abdullah Kadi. Judgment of the General Court of 21 March 2012 in joined cases Joined Cases T-439/10 and T-440/10, Fulmen and Mahmoudian vs. Council. Council Regulation (ec) n.° 881/2002 of 27 May 2002. With the Treaty of Lisbon the first instance court was renamed ‘General Court’.

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of First Instance rejected the pleas of Mr. Kadi and confirmed the validity of the Regulation and of the listing of Mr. Kadi.34 In particular, the Court of First Instance ruled that, in principle, the Community courts had no jurisdiction to review the validity of the Regulation at stake, given that the eu Member States are bound to comply with the resolution of the Security Council according to the terms of the un Charter, which would prevail over the Community Law— in practice conferring an immunity of jurisdiction to eu acts implementing un Security Council resolutions.35 However, in 2008, at the appellate level, the Court of Justice overruled the decision of the Court of First Instance.36 In its judgment, the Court of Justice considered that the Court has after all competence to review restrictive measures adopted by the then European Community which give effect to un Security Council resolutions. The Court refused the existence of any immunity of jurisdiction of eu acts implementing un Security Council resolutions.37 This view has been followed by the General Court in later judgments.38 Moreover, the Court of Justice affirmed that eu Member States, in particular 34

35

36 37

38

Judgment of the Court of First Instance of 21 September 2005 in case T-315/01, Yassin Abdullah Kadi vs. Council of the European Union and Commission of the European Communities. The Court affirmed that “(…) reference to infringements either of fundamental rights as protected by the Community legal order or of the principles of that legal order cannot affect the validity of a Security Council Measure or its effect in the territory of the Community”, in Judgment of the Court of First Instance of 21 September 2005 in case T-315/01, Yassin Abdullah Kadi vs. Council of the European Union and Commission of the European Communities, §224. See note 32 above. The Court of Justice affirmed in its judgment of 3 September 2008 that “immunity from jurisdiction for a Community measure like the contested regulation, as a corollary of the principle of the primacy at the level of international legal obligations under the Charter of the United Nations, especially those relating to the implementation of resolutions of the Security Council adopted under Chapter vii of the Charter, cannot find a basis in the ec Treaty” (§300) and that “the Community judicature must, in accordance with the powers conferred on it by the ec Treaty, ensure the review, in principle the full review, of the lawfulness of all Community acts in the light of the fundamental rights forming an integral part of the general principles of Community law, including review of Community measures which, like the contested regulation, are designed to give effect to the resolutions adopted by the Security Council under Chapter vii of the Charter of the United Nations” (§326). It is interesting to note the position of Advocate General Bot in the Kadi ii case. Bot, while in agreement with the Court’s decision of not granting immunity from jurisdiction to regulations giving effect to Security Council resolutions, expressed in his opinion to the

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those that are members of the un Security Council39 have the obligation to ensure, to the extent possible, that the un Security Council refrains from making decisions that may conflict with the fundamental principles of the eu legal order. 3.2 The Impact Regarding the un Sanctions System Complying with those eu fundamental rights raises at the same time difficulties in implementing restrictive measures decided by the un Security Council which do not observe the referred rights of defense. There is a constant and complex need to strike a balance between fundamental rights and security when enacting peace and security measures. And at the un Security Council the security aspect clearly prevails. Additionally, and as previously mentioned, there is no due process mechanism at the un level capable of fulfilling the full judicial review standard established by eu Law. This particular issue has been analyzed against the wider problem of the relationship between the Law of the un and eu Law. It is relatively peaceful, international courts’ rulings and among International Law authors, the generic understanding that, as a result of the universality of the Charter of the un and of its Articles 25 and 103, the obligations of the Charter prevail over any other obligations arising from other treaties and also obligations other than those contained in treaties (Bernhardt, 2002). The International Court of Justice has stated as much when it claimed that in the case of “conflicting [treaty] obligations”40 those obligations arising from the un Charter should prevail. Following this reasoning, those obligations also prevail over the eu Treaties. In practice, according to this view, it means that the resolutions of the un Security Council imposing sanctions take precedence over eu Law, including the one on fundamental Kadi ii case concerns with regards to the standard of review being applied by the Court. Bot claimed that the applied standard risks “encroaching on the prerogatives of the Security Council in defining what constitutes a threat to international peace and security and the measures necessary to eradicate that threat” (§71). Furthermore, Bot suggests that developing cooperation between the eu and the un is the “most effective way (…) to balance the objectives of combating terrorism and optimum protection of the fundamental rights of listed persons” (§76), in European Commission, Council of the European Union, United Kingdom of Great Britain and Northern Ireland v Yassin Abdullah Kadi, Opinion of Advocate General Bot, 19 March 2013, Joined cases C-584/10 P, C-593/10 P and C-595/10 P. 39 In 2014, France, Lithuania, Luxembourg and the United Kingdom. In 2015, Spain will become member and Luxembourg will end its membership. 40 Questions of Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v United States of America), Provisional Measures, Order of 14 April 1992, I.C.J. Reports 1992 (§42).

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rights, and over any acts taken by eu institutions. Since all the twenty-eight eu Member States are parties to the Charter of the un, it is easy to predict a conflict of obligations. Notwithstanding, there are those who claim that such derogations are only possible in the case of ‘mutually exclusive obligations’, i.e. conflicting obligations; and in the case of ‘international security’ and ‘fundamental rights’ there are those who do not see these obligations as mutually exclusive, but on the contrary, as mutually reinforcing (Bianchi, 2006; Cameron, 2006). The traditional concept of due process comes down to the idea of fair trial and equality of arms. Despite some of the developments in enhancing due proc­ ess within the un sanctions system, they are still far from meeting the traditional due process standards, notably those put forward by the Court and provided for in human rights treaties. The un is not a party to human rights treaties. However, the rules codified in those treaties may anyway constrain the action of the un Security Council. Firstly, it is possible to perceive a trend widening the scope of customary international law in regard to due process to include the action by the un Security Council vis-à-vis individuals. Despite being a political organ, the Security Council has to abide by the limits of the Law established by the Charter (Delbrück, 2002). Under Article 24(2) of the un Charter, the Security Council has to act “in accordance with the purposes and principles of the un”.41 One of those is the “respect for human rights and fundamental freedoms for all” as laid down in article 1(3) of the Charter. Although the Charter does not have a human rights catalogue it establishes nonetheless a general obligation of the un to respect and to observe human rights (Riedel, 2002). Moreover, there is a growing general consensus that counter-terrorism measures have to meet human rights standards.42 Also, the fact that the un has moved towards action vis-à-vis individuals, has led some to argue that international instruments like the Universal Declaration of Human Rights and the International Covenant of Civil and Political Rights should be used as a standard of interpretation of the rights encompassed in Article 1(3) of the un Charter. Secondly, it could be argued that members of the un Security Council cannot decide favorably on sanctions if they may result in the violation of human rights treaties to which they are parties, and by the same token, other States cannot implement such sanctions (Cameron, 2006). Thirdly, and connected with the latter argument, eu Member States have the obligation to act in a way as to ensure that the un Security Council refrains from making decisions that may conflict with the fundamental principles of the eu legal order.43 41 See Article 24(2) un Charter. 42 See un Human Rights Council (2009). 43 See Section 3.1 above.

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From the eu Law perspective, the tfeu, following well-established case law of the eu Court of Justice, provides that Treaties and law adopted by the Union on the basis of the eu Treaties have primacy over Member States national law.44 On the subject of the relation between eu Law and general International Law, the tfeu accepts to a certain extent some derogations to the eu Treaties, including in the instance of the un legal order.45 However, it is also recognized that the un sanctions regimes suffer from serious dilemmas, particularly in what concerns the fundamental rights of access to justice, including the right of defense, which cannot be overcome with the simplistic argument that the un legal order prevails over any other, including the ones that indeed guarantee those fundamental rights such as the eu and the eu Member States legal orders. The jurisprudence of the Court has left us with a legacy of established standards that the eu must abide by when enacting un Security Council resolutions, which has left the eu Member States in the delicate position of being unable to fully implement Security Council’s restrictive measures, thus endangering the effectiveness of the sanctions regimes (Genser and Barth, 2010). Those sets of standards and the consequent difficulties in the implementation of the sanctions regimes brought the debate on sanctions back to the Security Council, in a manner which has been described by Posh as “a new bottom-up process in which a regional court pressures the un Security Council to change its policy towards fundamental rights” (2009: 5). The pressure is not just on the un legal order, but also on the eu legal order as its Member States must strive to find a mechanism that will allow them to fulfill their obligations vis-à-vis the un, while ensuring the respect for due process standards as prescribed by eu law. In an attempt to provide some form of relief to members of the un, which had experienced difficulties in the implementation of the sanctions regimes, the Security Council worked on two different mechanism of reform, which sought to raise due process standards. The first consisted in the establishment of a ‘focal point’ within the Secretariat of the un, created by Security Council resolution 1730 (2006),46 through which listed individuals could request their 44

Declaration 17 annexed to the Final Act of the Intergovernmental Conference, which adopted the Treaty of Lisbon, concerning primacy. 45 Article 351 §1 of the tfue reads as follows: “the rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties”. 46 See un Security Council Resolution S/RES/1730 of 19 December 2006.

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delisting. It should be noted that today, irrespective of the Sanctions Committee, which authorized the listing, and with the exception of those on the Al-Qaida Sanctions List, every listed individual can resort to the ‘focal point’. The second attempt to reform led to the creation of the Ombudsperson in June 2010.47 However, its scope is restricted to the Al-Qaida sanctions regime. This means that individuals, groups, undertakings or entities seeking to be removed from the Security Council’s Al-Qaida sanctions list can submit their request for delisting to an independent and impartial Ombudsperson. After gathering information and speaking with the petitioner seeking delisting, as well as with relevant States and organizations, the Ombudsperson may recommend to the un Security Council the delisting of the petitioner from the sanctions list. However, it is just a recommendation: the final decision on the delisting remains within the powers of the Security Council. The Ombudsperson is, therefore, a mechanism of administrative review limited in its scope and without the capacity of delivering final and binding decisions. Nevertheless, it has to be understood as a step in the right direction. What may be surprising is the silence of the Court regarding the Ombudsperson in the Kadi ii case at the appellate level, failing to recognise the relevance and the potential of this mechanism for enhancing due process in the multilateral sanctions system. Due process standards are fundamental guarantees that legal proceedings are fair and that the person subjected to such proceedings will be given due notice of the decision; that he/she will have an opportunity to be heard before the decision is given and that he/she may challenge such decision. The due process standards set forth by eu Law—or, for that matter, by the majority of the eu Member States constitutional Law—include judicial review.48 Therefore, a mere administrative review is not sufficient to meet the eu Law standards. Consequently, the ‘relief’ mechanisms currently in place in the un are insufficient to meet eu standards as set by the Court. Nevertheless, the debate at the un is ongoing and there is a growing determination to work on furthering the development of the powers of the Ombudsperson as well as their their scope. In October 2014,49 the Ombudsperson herself argued before the Security Council about the lack of rationale behind the granting of an independent review mechanism to some, but not to others, and about the need to strengthen the role of the Ombudsperson in order to better serve as an impartial review mechanism. Furthermore, Ombudsperson 47

The Office of the Ombudsperson was established by un Security Council resolution S/RES/1904 of 17 December 2009. 48 Articles 263 and 275 of the tfue, and Declaration on Articles 75 and 215 of the tfue. 49 See un Security Council document S/PV.7285 of 23 October 2014.

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made the argument that a fairer mechanism would not only make implementation of sanctions more effective, but would also contribute to a reduction in the “number of domestic and regional court challenges”.50 The pressure, to which this chapter has alluded, is being felt by the un and, in particular, the Security Council. The voices calling for fairer procedures are growing in number and in strength, and different platforms dedicated to transparency and fairness in the un mechanisms are playing a role in the debates. The Court’s case law is setting the tone of the eu debate on sanctions, and is making the pressure increase upstream at the un. Taking into account not only its high standards and its institutional maturity but also the international recognition that it has, it is possible to say that the Court may also play an international constitutional role, which is visible in the instance of the un sanctions system. This role of the Court might help enhance a rights-based approach to International Law. However, it is also important to note that, as observed by Ziegler (2009), this amplified role of the Court is not exempt from the risk of contributing to the fragmentation of International Law, which in turn may prejudice accountability. Moreover, the Court while implicitly affirming a constitutional role in international society seems to have adopted a dualist approach that moves the eu order away from the International Law realm. 4

Final Remarks

One of the critical issues of the relation between the un and eu legal orders is the different standards and mechanisms of review between both of them—in particular in what concerns the rights of defense of the individuals and entities listed. Sanctions are an important tool for peace and international security. However, there are also limits to their implementation, in particular in what regards fundamental rights, which cannot simply be set aside on behalf of security. And there are indeed different standards at the un level and at the eu level, the latter being more restrictive and protective of fundamental rights. This is basically the extremely difficult balance that the eu is trying to achieve also in a necessary dialogue with the un in what regards the ‘bilateral sanctions regimes’. The Court is establishing red lines and providing useful guidelines for implementing such measures. For instance, the Court has refused any ‘immunity of jurisdiction’ of eu acts when implementing un Security Council resolutions— they have to comply with eu legal fundamental rights standards. In another 50

Idem.

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example, the Court affirmed that eu Member States that are members of the un Security Council have the obligation to act in a way as to ensure that the Security Council refrains from making decisions that may conflict with the fundamental principles of the eu legal order. In another case, the Court stated that their own considerations remain fundamentally valid even after the creation of the un Office of the Ombudsperson because the activity of that un Security Council subsidiary organ does not provide an effective judicial procedure for review of decisions in the context of Al-Qaida sanctions regime (besides being the only un sanctions regime having a designated ombudsperson). In conclusion, with regard to the ‘bilateral sanctions regimes’, the dialog between the un and eu legal orders with respect to restrictive measures is legally and politically difficult. If from a un point-of-view it is possible to invoke prevailing powers of the Security Council conferred to it by the Charter of the un (under Articles 25 and 103) and its universality, from a eu perspective it is possible to answer with the superiority of its fundamental rights regime and due process mechanisms. Although it is possible to have a long discussion on what legal order should prevail over eu Member States regarding restrictive measures, there should not be any discussion over the fact that the un due process should be improved. Furthermore, since the decisions by the un Security Council establishing restrictive measures intend to have an important direct impact on individuals, they should be accompanied by adequate due process mechanisms, with due regard for human rights. The eu legal order, as well as the national legal orders, offers good standards for such an improvement. This may well be one of those eu constitutional moments induced by the Court, in the sense that it is contributing to settle the place of the eu within the international society, in particular vis-à-vis the un, and to affirm the priority of some of its structural principles, particularly fundamental rights. This also serves as a good example of a legal flow from the regional to the universal realm, which today informs the ‘new regionalism’ trend (Telò, 2007). In this sense, one cannot but agree with the claim by Pureza that “regional organizations are fabrics of the globally hegemonic codes of good governance and instruments for binding their member states to those codes” (2012: 12). Nevertheless, the universal realm cannot be simply supplanted when global peace and security are at stake. The key-word here should be ‘complementarity’ and not ‘fragmentation’. The responsibility to ensure complementarity when striving for peace and security falls on both regional and universal institutions, and their members, through institutional dialog. And the eu and its members have also a great responsibility in ensuring that complementarity prevails and in fostering dialog towards that end.

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Bibliography Bedjaoui, Mohammed (1994) Nouvel Ordre Mondiale et Contrôle de la Légalité des Actes du Conseil de Sécurité. Bruxelles: Bruylant. Bernhardt, Rudolf (2002) “Article 103” in Simma, Bruno (ed.) The Charter of the United Nations: a Commentary, vol. II. Oxford: Oxford University Press, 1292–1302. Bianchi, Andrea (2006) “Security Council’s Anti-terror Resolutions and their Implementation by Member States: An Overview” Journal of International Criminal Justice. 4(5), 1044–1073. Biersteker, Thomas; Eckert, Sue (2009) “Addressing Challenges to Targeted Sanctions: An Update of the ‘Watson Report’” Watson Institute for International Studies, www .watsoninstitute.org/pub/2009_10_targeted_sanctions.pdf [18 December 2014]. Cameron, Iain (2006) “The European Convention on Human Rights, Due Process and United Nations Security Council Counter-Terrorism Sanctions” Council of Europe, www.irpa.eu/wp-content/uploads/2011/05/I.-Cameron-Report-06.pdf [23 December 2014]. Caron, David (1993) “The Legitimacy of the Collective Authority of the Security Council” American Journal of International Law. 87, 552–588. Cortright, David; Lopez, George (eds.) (2002) Smart Sanctions: Targeting Economic Statecraft. Lanham: Rowan & Littlefield Publishers. Delbrück, Jost (2002) “Article 24” in Simma, Bruno (ed.) The Charter of the United Nations: a Commentary, vol. I. Oxford: Oxford University Press, 442–452. Genser, Jared; Barth, Kate (2010) “When Due Process Concerns Become Dangerous: The Security Council’s 1267 Regime and the Need for Reform” Boston College International and Comparative Law Review. 33(1), 1–41. Keller, Helen; Fischer, Andreas (2009) “The UN Anti-Terror Sanctions Regime under Pressure” Human Rights Law Review. 9(2), 257–266. Kowalski, Mateus (2014) “Sanções” in Mendes, Nuno; Coutinho, Francisco (eds.) Enciclopédia de Relações Internacionais. Lisboa: Dom Quixote, 463–465. Matsukuma, Jun (2009) “The Legitimacy of Economic Sanctions: An Analysis of Humanitarian Exemptions of Sanctions Regimes and the Right to Minimum Sustenance” in Charlesworth, Hilary; Coicaud, Jean-Marc (eds.) Fault Lines of International Legitimacy. Cambridge: Cambridge University Press, 360–388. Posh, Albert (2009) “The Kadi Case: Rethinking the Relationship between EU Law and International Law?” Columbia Journal of European Law Online, www.cjel.net/ wp-content/uploads/2009/03/albertposch-the-kadi-case.pdf [31December 2014]. Pureza, José (2012) “New Regionalism and Global Constitutionalism: Allies, not Rivals” Conference Paper 8/2012, European Society of International Law, http://papers.ssrn .com/sol3/papers.cfm?abstract_id=2193752 [26 December 2014].

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Riedel, Eibe (2002) “Article 55(c)” in Simma, Bruno (ed.) The Charter of the United Nations: a Commentary, vol. II. Oxford: Oxford University Press, 917–941. Sponeck, Hans-Christof (2006) A Different Kind of War: The UN Sanctions Regime in Iraq. New York: Berghahn Books. Telò, Mario (2007) “New Regionalism and the Role of the European Union” in Telò, Mario (ed.) European Union and New Regionalism: Regional Actors and Global Governance in a Post-Hegemonic Era. Aldershot: Ashegate, 1–18. UN Human Rights Council (2009) Report of the United Nations High Commissioner for Human Rights on the protection of human rights and fundamental freedoms while countering terrorism, A/HRC/4/88, 9 March 2009. United Nations (2013) “Guidelines of the [Al-Qaida and Associated Individuals and Entities UN Security Council] Committee for the Conduct of its Work” United Nations Security Council, www.un.org/sc/committees/1267/pdf/1267_guidelines.pdf [23 December 2014]. Weiss, Thomas; Cortright, David; Lopez, George; Minear, Larry (eds.) (1997) Political Gain and Civilian Pain: Humanitarian Impacts of Economic Sanctions. Lanham: Rowan & Littlefield Publishers. Ziegler, Katja (2009) “Strengthening the Rule of Law, But Fragmenting International Law: The Kadi Decision of the ECJ from the Perspective of Human Rights” Human Rights Law Review. 9(2), 288–305.

Part 7 Domestic Courts as International Jurisdictions?

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chapter 29

Introduction Catherine Kessedjian Who would dare deny that human rights violations need to be sanctioned, be they perpetrated by States, public authorities, individual or private corporations and entities? And instead of leaving this matter only to penal or criminal law, it is now accepted that deterrence of wrongful conduct may be achieved through private enforcement in domestic courts, i.e. actions for tort. This is the purpose of the panel assembled around three presentations respectively by Peter Trooboff, Humberto Cantu Rivera and Rui Pereira Dias. Having reflected on the three papers one conclusion imposes itself: we have not yet found the right balance. Corporations still have many possibilities to escape their obligations because of the complexity of the issues posed by civil actions for violation of human rights in domestic courts. To name only a few: (a) whether a State has adjudicatory power to open its courts to plaintiffs; (b) even if the answer to (a) is positive, under which jurisdictional basis those courts will be able to decide, -that jurisdictional rule must be fair to both the plaintiff and the defendant-; (c) whether a court may use a doctrine such as forum non conveniens, to decline jurisdiction; (d) whether a court may act under the rule of forum necessitatis; (d) if a court does provide access to justice, under which applicable law the matter will be decided; (e) what will be the extraterritorial effect of the decision rendered? In the limited space here, the papers could not cover all of these issues, but allow a reflection on the obstacles still facing claimants when they want to vindicate their rights after an alleged violation by a corporation. Indeed domestic courts have not yet taken the full measure of their obligations in the field, even after the United Nations adopted the Guiding Principles on Business and Human Rights in June 2011, also known as the Ruggie Principles. The second pillar of the Ruggie Principles is entitled “the corporate responsibility to respect human rights” and the third pillar is entitled “access to remedy”. Principle 25 sets the scene and it is pertinent to copy the provision in extenso: “As part of their duty to protect against business-related human rights abuse, States must take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction those affected have access to effective remedy.”

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The wording of the Principle is noteworthy. First, it is addressed to the States where the violation has taken place. However, it is well known in practice that many violations take place in countries where the State may be dysfunctional and with a judicial system that may not offer the proper remedies. Hence, if the Principles were to be understood as placing a duty to remedy only on the State where the violation took place it would not be a real step forward. But Principle 25 also directs its call to make available effective remedies to the State whose “jurisdiction” is concerned. Hence, Principle 25 may be interpreted to enlarge the number of States concerned to any State who cares to take jurisdiction over the violation. This is in conformity with the fact that the Ruggie Principles are based on the “home country control” principle, so that the State where the corporation is located must exercise its regulation authority towards that corporation. States must not have a double standard and allow in foreign countries what they forbid at home. This is why the study of jurisdictional rules under domestic law discussed by all three panelists whose papers are assembled here is absolutely essential. Traditionally, the US courts had an extensive conception of their international jurisdiction under the loose guidance of the Supreme Court interpreting the Due Process clause of the Federal Constitution. More recently, also because the United States have been criticized for their extensive rules, the Supreme Court started to cut down on international jurisdiction and did so particularly when dealing with cases on human rights violations. This is certainly unfortunate, but at the same time, it is understandable that the United States may not want anymore to attract foreign plaintiffs in cases that are entirely unrelated to its territory. In Europe, the situation is different as the texts dealing with international jurisdiction apply only, in most cases, to defendants domiciled on the territory of one of the member States. This is true for the entirety of the European Union and the Lugano Convention countries. For defendants located in third States (as they are called in the European Union) Member States continue to use their own rules on jurisdiction. In any case, in Europe, whether under uniform European rules or Member States rules, the defendant’s domicile is the main rule of jurisdiction. And in matter of tort, the place of the causal act or the place where the damage is suffered are the two main alternative jurisdictional rules. Unfortunately, the United States and many other countries lack in their legal order an important jurisdictional rule that is a necessary component for a serious fight against human rights violation through civil actions. That rule is called “forum necessitatis” or jurisdiction of necessity, which is very often linked with the fight against denial of justice. The idea is that when the “natural” fora do not offer a remedy or are not willing to open their courts or public

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authorities to claimants, any other State has the power to prosecute the tortfeasor as long as certain conditions are met. This is not the place to develop this idea. As Peter Trooboff mentions at the end of his paper, Prof. A. Bucher makes some proposals in his Hague lectures soon to be published and in his report for the Institut de droit international not yet public. So, more discussions will develop once policy makers, scholars and practitioners around the world get to know his work. Suffice it to say at this juncture that, for human rights violations, I would be in favor of relaxing entirely the nexus usually required between the State that acts under the forum necessitatis and the case.

chapter 30

Limits on Jurisdiction of Domestic Courts to Grant Civil Damages for International Law Violations Peter D. Trooboff In this chapter I will address four issues that relate to one aspect of the theme of this final session of the International Law Association (ila) Regional Conference, namely, Domestic Courts as International Jurisdictions In particular, I will address the following four subjects that bear upon the terms for conferring and the basis for limiting the jurisdiction of domestic courts to grant civil damages for international law violations: • Personal jurisdiction of domestic courts to adjudicate civil actions for human rights violations; • Extraterritoriality of a domestic causes of action for human rights violations; • U.S. civil remedies arising for claims resulting from support for international terrorism; and • Possible “universal jurisdiction” of domestic courts over defendants for civil remedies for human rights violations. Because of space limitations, this overview cannot present a comprehensive analysis of the many facets of each of these subjects. Nor is it heavily burdened with authority or by elaboration of concepts that have necessarily been summarized. I try, instead, to identify key issues that will require further study by scholars and decisions from courts. I look forward to other opportunities to elaborate and discuss in other fora issues that I raise. I greatly appreciate the opportunity that the Portuguese Branch of the International Law Association afforded to me to contribute these thoughts to this volume resulting from the ila Regional Conference in Lisbon. I begin by explaining briefly why it is valuable to focus on civil remedies for international law violations. In just the past few years the United States Supreme Court has issued several key decisions relating to civil remedies for human rights violations. Commentators in the United States and in other nations view these u.s. cases as important in thinking about potential international and domestic civil remedies. Further, European scholars view the outcome in some u.s. cases as reflecting a clash between national protection

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of multinational corporations and global protection of human rights. I am not convinced that it is necessarily correct to criticize u.s. cases on this basis but, in any event, it is necessary to clarify what the cases decide and to highlight their potential global implications. In addition, the decisions in these u.s. cases include significant analysis of importance to scholars and practitioners. For practicing lawyers and scholars in the field of private international law the recent u.s. cases on personal jurisdiction have especially important practical consequences. Finally, understanding the u.s. cases enriches discussion of possible international civil remedies and possible rationale for establishing universal jurisdiction. 1

u.s. Human Rights Cases—General Personal Jurisdiction

I begin with two recent Supreme Court cases, Daimler ag v. Bauman1 concerning personal jurisdiction over a non-u.s. defendant in the context of humanrights litigation, and Kiobel v. Royal Dutch Petroleum Co.2 concerning whether claims for violating international law include a cause of action where the alleged conduct occurred extraterritorially, i.e., outside the United States. Daimler ag arose in the u.s. District Court for Northern District of California where, as those familiar with u.s. law know, the judges are appointed by the President, require advice and consent of the Senate and serve for life. In Daimler, the plaintiffs were Argentine residents who sought damages under the Alien Tort Statute (ats)3 and the Torture Victims Protection Act (tvpa)4 and under California law against Daimler ag, the German parent stock company which manufactures Mercedes-Benz automobiles, which resulted from the Daimler merger with Chrysler and which is based in Stuttgart, Germany. Plaintiffs alleged that Daimler’s Argentine subsidiary, Daimler Argentina, collaborated with Argentine security forces during 1976–1983 “Dirty War.” As a result of this alleged collaboration, Daimler Argentina was accused of having played a role in kidnapping, detaining, torturing and killing certain Daimler Argentina workers that constituted violations of human rights, international law and domestic tort statutes. Plaintiffs did not contend that any of the alleged conduct of defendant Daimler ag or Daimler Argentina occurred in the United States. 1 2 3 4

134 S. Ct. 746 (2014). 133 S. Ct. 1659 (2013). 28 u.s.c. § 1350. 106 Stat. 73, note following 28 u.s.c. § 1350.

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As is well known, to hear such claims a domestic court is required to have subject matter jurisdiction, i.e., the court must be authorized under domestic law to hear the claims based on national or international law. Prof. Kessedjian has translated subject-matter jurisdiction as compétence d’attribution. A court is also required to have adjudicatory or personal jurisdiction over the defendant, whether individual or corporate. Prof. Kessedjian has translated this concept of personal jurisdiction over the defendant as compétence ratione personam. Both civil and common law provide for person jurisdiction over defendant based on either general and specific jurisdiction. When a court has general jurisdiction, the cause of action is not required to be related to any specified relationship of defendant to the territory of the forum state in which the domestic court sits. General jurisdiction has sometimes been called “all-­ purpose” jurisdiction because claims against the defendant may be unrelated to the basis for finding the requisite nexus between the defendant and the territory of the court. On the other hand, when a court has specific jurisdiction, the plaintiff is required, at least under u.s. law, to show a nexus between the defendant, the cause of action and forum state. In Daimler, personal jurisdiction was clearly based on general personal jurisdiction since there was no u.s. nexus to the causes of action, i.e., plaintiffs alleged no activity in the United States of Daimler ag relating to the violations that constituted the basis of their claims. Put another way, there was no basis for the plaintiffs to claim that the California federal court had specific jurisdiction over the defendant because the complaint asserted no aspect of the alleged violations occurred in the United States. In short, either there was general personal jurisdiction or no jurisdiction in the u.s. court in California. Briefly, under United States law, limits on personal in United States are imposed by “due process” clause of Fifth and Fourteenth Amendments to the United States Constitution. Our Supreme Court has clarified that “due process” when applied to determining adjudicatory jurisdiction of our courts reflects concern with a “individual liberty” interest and with fairness of asserting the court’s authority over a particular defendant.5 Prior to the Supreme Court’s decision in 2011 in Goodyear Dunlop Tires Operations, S.A. v. Brown,6 American litigants could show general personal jurisdiction under the applicable Supreme Court case law by demonstrating 5 For a good summary of the u.s. Constitutional underpinnings of general and specific jurisdiction and of the decisions that elaborate the application of the Due Process Clause by u.s. courts in personal jurisdiction cases, see R. Brand, “Transaction Planning Using Rules on Jurisdiction and the Recognition and Enforcement of Judgments,” 358 Recueil des cours 9, 54 (2011). 6 131 S. Ct. 2846 (2011).

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that defendant’s activities in the territory of forum state were “continuous and systematic” provided that it was “reasonable” to assert jurisdiction over the defendant on the facts of the case. This basis for general personal jurisdiction has often be called “doing business” jurisdiction because the defendant was found to have engaged in sufficient continuous and systematic business activities in the jurisdiction to permit the court to hear unrelated causes of action. In the original negotiations at the Hague Conference on Private International Law on the Judgments Project, this basis of jurisdiction was highly controversial. As the report that Professors Nygh and Pocar prepared on the draft Conference convention explained, the preliminary draft convention proposed to prohibit “doing business” jurisdiction. Their report explained that “…there is a significant margin of uncertainty in applying it [“doing business” jurisdiction], because of the difficulty of determining the quality and quantity of activity which is needed in order to find personal jurisdiction; this again has to be left to the court seised to decide.”7 In Daimler, Daimler ag had established a Delaware subsidiary that was based in New Jersey, Mercedes-Benz usa (mbusa). That subsidiary distributed Daimler-made autos to dealers throughout the United States. The Court of Appeals decided the case on the basis that Daimler ag had conceded that mbusa was subject to general jurisdiction in California. But how could that basis for jurisdiction over the subsidiary reach the German parent company? The Court of Appeals for the Ninth Circuit held that the District Court had properly found general personal jurisdiction over Daimler A.G. based on an “agency” theory if mbusa performed certain crucial functions for Daimler AG and if Daimler A.G. exercised actual control or had the right of control over mbusa. The Circuit Court based the first part of its agency theory for general jurisdiction on whether mbusa were found to perform tasks that its parent, Daimler ag, would be required to perform if subsidiary were not present. In the appellate court’s words, the subsidiary was a “manifestation of the parent’s presence.” In the case of Daimler ag’s relationship with mbusa, the Court of Appeals also found the requisite control relationship to satisfy this second aspect of its agency theory for general personal jurisdiction. Further, the appellate court found the assertion of personal jurisdiction over Daimler ag to be reasonable. In that connection, the Circuit Court indicated that it was influenced by “strong interest” of California in “adjudicating and redressing international human rights abuses.” In a strong dissent, Judge Diarmuid O’Scannlain termed the majority’s ruling to be “affront to due process,” and a “gratuitous 7 P. Nygh and F. Pocar, Report of the Special Commission on the Prel. Draft Convention of 30 October 1999 at 80 (Prel. Doc. No. 11, August 2000).

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threat to our nation’s economy, foreign relations, and international comity.” The Supreme Court granted certiorari to review the 9th Circuit’s ruling. Just two years before, the Supreme Court had decided Goodyear in a decision that significantly narrowed “general jurisdiction” under Due Process clause of the 14th Amendment of the U.S. Constitution. In summary, the Court held in Goodyear that domicile for an individual is the “paradigm forum for exercise of general jurisdiction.” In the case of a corporation, “it is an equivalent place, one in which the corporation is fairly regarded as at home.” (Emphasis added.) When Daimler reached the Supreme Court, the Court reversed the Court of Appeals and held that it would be a violation of Due Process for the District Court to assert general jurisdiction over Daimler ag. Relying heavily on its recent ruling in Goodyear, the Supreme Court explained that general jurisdiction over corporation exists “only when…affiliations with the State… are so constant and pervasive” that Daimler would be “essentially at home.” The Court rejected the agency theory of 9th Circuit as too broad under the Due Process Clause since it would “sweep beyond even the ‘sprawling view of general jurisdiction’ that we rejected in Goodyear.” In brief, the Court found that the disallowed agency theory would potentially result in general jurisdiction wherever a subsidiary operates. Further, the rejected agency theory would, the Court warned, require a burdensome and imprecise inquiry in every case concerning whether the subsidiary is an agent for a particular purpose. The Supreme Court in Daimler went further than Goodyear in characterizing the prior approach of “substantial, continuous and systematic course of business” as “unacceptably grasping.” It also said that the “reasonableness” test for general personal jurisdiction is “superfluous” if corporation is “genuinely at home in forum state.” In that connection Justice Ginsburg elaborated in her opinion for eight of the nine Justices that general jurisdiction “has come to occupy a less dominant place” and that specific jurisdiction is favored in more recent cases. As a result of the holding in Daimler, a plaintiff asserting alleged violation of human rights under ats or the tvpa faces severe problems in securing personal jurisdiction over a parent corporate defendant. That parent company will not be subject to general jurisdiction in the United States if not “essentially at home” and that will rarely be the case. Further, the agency theory for reaching the parent through a local subsidiary has also been rejected by the u.s. Supreme Court. That leads human rights advocates to ask, as we shall see, whether there might be a basis for asserting “universal personal jurisdiction” to fill the gap.

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Extraterritorial Reach of u.s. Causes of Action for Human Rights Violations

The plaintiffs in Kiobel were Nigerian residents of Ogoniland who claimed violation of the ats and customary international law by Shell Oil holding companies incorporated in Netherlands and United Kingdom. Those companies jointly owned a Nigerian oil exploration and production operating subsidiary (Shell Nigeria). Plaintiffs protested environmental practices of Shell Nigeria in Nigeria. All allegations in the case concern conduct in Nigeria. No conduct was alleged to have occurred in the United States by the defendant u.k. and Dutch Shell parent companies or by Shell Nigeria. The text of ats which dates back to 1789 is short and seemingly uncomplicated: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”8 The claims under ats against the Shell Oil holding companies and Shell Nigeria related to allegations that the defendants had violated international law by enlisting Nigerian military and police who attacked Ogoni villages. The concerned Nigerian military and police were alleged to have engaged in beating, raping, killing and arresting the Nigerian plaintiffs and their families and in destroying and looting their properties. This was a big case in which the Court received many amici briefs at every stage of the proceedings. Brief filed with the Court included those from the United States Government submitted in accordance with customary practice by the Solicitor General of the Department of Justice, the u.n. High Commissioner for Human Rights, the European Commission on behalf of the European Union, the Governments of the United Kingdom, Netherlands and the Federal Republic of Germany, human rights organizations, international legal scholars, a number of multinational corporations and several chambers of commerce and business trade associations.9 8 Professor Kessedjian has furnished a helpful translation of the ats into French: “Les tribunaux fédéraux de première instance sont compétents pour statuer sur toute action civile intentée par un étranger, uniquement en raison d’un délit commis en violation du droit des gens ou d’un traité auquel les Etats-Unis sont partie.” C Kessedjian, “Les actions civiles pour violation des droits de l’homme, aspects de droit international privé,” [2002–04] Comité français de Droit Int’l Privé 151, 152). 9 A full listing of the amici briefs at the several stages of the proceedings can be found usefully collected at: http://www.scotusblog.com/case-files/cases/kiobel-v-royal-dutch-petroleum/.

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Until the 20th Century, the ats was largely unutilized by aliens seeking remedies in u.s. courts for alleged violations of international law. The Supreme Court addressed the enhanced reliance on the statute in Sosa v. AlvarezMachain10 when it held that the ats confers subject-matter jurisdiction on federal district courts to hear only certain tort claims. The Court identified in Sosa the three causes of action recognized in the 18th Century—namely, violation of safe conduct; infringement of rights of ambassadors; and piracy. In addition, Sosa held that federal common law provides for a “modest number of [new] international law violations” under the ats. These additional causes of action would be “based on present-day law of nations” and would involve claims which “rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to” the three 18 Century offenses. When Kiobel reached the Second Circuit Court of Appeals, the issue presented on appeal was whether the ats establishes a cause of action for corporate liability of Shell holding companies. The Second Circuit panel held 2 to 1 over a strong dissent that no such corporate liability could be found in customary international law. The Supreme Court granted certiorari for review of corporate liability issue under international law, specifically as to whether corporations were potentially liable under international law for aiding and abetting in alleged wrongful acts of the Nigerian military and police. During oral argument on this corporate liability issue, several Justices asked whether and why the ats applies to alleged conduct that occurred entirely outside the United States. As a result, the Court ordered reargument in Kiobel on the issue that was stated as follows: “Whether and under what circumstances the [ats] allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States?” At a second oral argument, the Court addressed the extraterritoriality issue for only those claims that can be heard under ats, as interpreted by Sosa. This case did not address the scope of the grant of subject matter jurisdiction for cases under customary international law that could be heard in u.s. courts based on, for example, u.s. state law or foreign law. In its ruling in Kiobel, the Supreme Court held unanimously against the plaintiffs, dismissed the claims against the Shell Oil companies and held that the cause of action allowed by Sosa did not apply to the extraterritorial facts alleged by the plaintiffs. There has been and will be much debate concerning the reasoning on which this decision is based. The opinion of Chief Justice John Roberts in which four other Justices joined held that the presumption 10

124 S. Ct. 2739 (2004).

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against extraterritorial application of u.s. law applies to determining causes of action under ats that Sosa allowed.11 The major concern highlighted in the opinion of the Chief Justice was with potential interference with foreign relations powers of Executive and Legislature branches that could result from applying the ats extraterritorially. In this case the Chief Justice holds that the “relevant conduct took place outside the United States.” His opinion ends with the important gloss on the ats and the causes of action allowed by Sosa: “And even where claims [under the ats] touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.” He adds that “it would reach too far to say that mere corporate presence [of u.s.-organized company] suffices.” Only Congress could, his opinion states, extend the ats to such situations with “a statute more specific than the ats.” The opinion of the Chief Justice and each of the other opinions in Kiobel raises policy issues concerning civil claims under the ats for human rights violations. Each will influence lower courts. Scholars and courts will need to read those opinions carefully in applying Kiobel. For example, Justice Kennedy added in a short concurring opinion that he anticipated other cases involving alleged serious violations of international law “may arise” that are not covered by the tvpa or by the reasoning in Kiobel relating to the ats. In those cases, he adds, “the proper implementation of the presumption against extraterritorial application may require some further elaboration and explanation.” On the other hand, Justices Alito and Thomas would narrow ats claims even further. They take the position that the presumption against extraterritoriality means that ats claims, as interpreted by Sosa, should be allowed only if “domestic conduct is sufficient to violate an international law norm that satisfies Sosa’s requirements of definiteness and acceptance among civilized nations.” In other words, it is not enough to have some domestic conduct; instead, the cause of action—the relevant conduct and injury—should be required to have occurred in United States. On the other hand, Justice Breyer in an opinion joined by Justices Ginsburg, Sotomayor and Kagan would not have invoked the presumption against extraterritoriality to decide Kiobel. Instead, in their view the ats applies when there 11

Applying controversially to the ats the presumption against extraterritoriality that the Court had recently relied upon in Morrison v. National Australia Bank Ltd., 561 Sup. Ct. 247 (2010) when interpreting a statute regulating conduct even though the Chief Justice acknowledged that the Court in Sosa had determined the ats to be a “strictly jurisdictional” statute.

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is “some distinct American interest” to be vindicated. Justice Breyer acknowledges sharing the Chief Justice’s concern with potential interference with foreign relations powers of Executive and the Congress. He would hold that ats jurisdiction exists where there is an alleged tort on American soil; the defendant is an American national; or “defendant’s conduct substantially and adversely affects an important American national interest.” He would include within the scope of the ats claims which prevents u.s. from becoming “safe harbor” for “torturer” or “other common enemy of mankind.” Justice Breyer agrees with the holding because defendants are foreign corporations, their conduct occurred outside the United States and that conduct allegedly involved collaborating with non-Americans. His opinion emphasizes that he attaches no significance for these purposes to the listing of their shares for trading on New York Stock Exchange like many other companies. European scholars have criticized Kiobel as excessively protective of u.s.based multinational corporations. There are also sharp disagreements in the United States with Kiobel. Even before the Supreme Court ruled, Judge Pierre Leval, who was the dissenting judge the Second Circuit had written that “Without [civil] remedies [for victims of violations of international law]…the law of nations amounts to little more than a pious fraud.”12 He reminds that the applicable international legal rules against genocide and other international legal wrongs were devised by the community of nations—not just the United States or any other nation. As we shall see, u.s. courts in the post-Kiobel cases will necessarily place emphasize on where conduct occurred for purposes of the extraterritoriality test. But Judge Leval asks what if “fair and just adjudication” is not available where the conduct occurred? From the scholarly analysis since Kiobel, it is also clear that the ats arguably remains potentially available for subject-matter jurisdiction of claims based on causes of action that do not rely upon the limited ruling in Sosa.13 In post-Kiobel cases, it becomes clear how important the ruling will potentially be for the human rights community and its clients. For example, in Cardona et al. v. Chiquita, Brands International, Inc. et al., 760 F.3d 1185 (11th Cir., 2014), the plaintiffs are several thousand Colombian citizens who filed claims 12 13

P. Leval, Distant Genocides, 38 Yale J. Int’l L. 231, 250 (2013). For an excellent analysis clarifying what the Court decided and may not have decided in Kiobel, see C. Vazquez, Things We Do with Presumptions: Reflections on Kiobel v. Royal Dutch Petroleum, 89 Notre Dame L. Rev. 1719 (2014)(explaining why, among other key points, Kiobel did not, as some have stated, decide the extraterritorial reach of the subject matter jurisdiction established by the ats but rather the extraterritorial reach of the cause of action allowed by Sosa).

Jurisdictional Limits on Granting Civil Remedies

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against two u.s.-incorporated Chiquita Brands companies that are incorporated in New Jersey and headquartered in Ohio.14 They alleged that the two American companies had authorized torture, personal injury and death committed by Colombian paralegal forces. In particular, plaintiffs asserted that the u.s. companies had reviewed, approved and conceived a plan in the United States for payments to and weapons for Colombian terrorist organization. The Court of Appeals for the 11th Circuit read the claims narrowly and emphasized that the alleged torture occurred outside the United States. Since none of the alleged tortious acts occurred in United States and there was no other u.s. nexus, the Court of Appeals held that Kiobel required dismissal of the claims. Indeed, in dictum the Court of Appeals adds that torture by private actors may not fall into limited class of claims for violation of the law of nations allowed by the ats under Sosa.15 3

Civil Remedy for Terrorism Support

Congress has established a civil remedy for damages resulting from support of terrorism that has received to date rather little attention. The statute in question plays a key role in Courtney Linde et al. v. Arab Bank plc which was tried before a jury in Brooklyn in the u.s. District Court for the Eastern District of New York with Judge Brian M. Cogan presiding. In that same district, cases involving Bank of China, Credit Lyonnais, National Westminster Bank and Royal Bank of Scotland are also reported to be pending based on the same statute. 14 15

Full disclosure: Covington & Burling llp is counsel to the defendant although the author has played no role in the case. The Courts of Appeals in four Circuits appear already to have split over how to interpret Kiobel and such Circuit splits are one of the most often cited bases for litigants to persuade the Supreme Court to review lower court decisions. Compare Cardona which is discussed in the text with the following: Shimari v. caci Premier Technology, Inc., 758 F.3d 516 (4th Circ. 2014)(permitting the District Court to hear the cause of action under the ats based on operation of Abu Ghraib prison in Iraq because the claims sufficiently “touch and concern” the United States); Mujica v. Airscan, Inc., 771 F.3d 580 (9th Cir. 2014)(rejecting the ats claim on the basis of the presumption against extraterritoriality when the defendants were non-u.s. corporations and the alleged support of bombing by of the Colombian Air Force occurred outside the United States); and Balintulo v. Daimler AG, 727 F.3d 174 (2nd Cir. 2013)(disallowing ats claims against U.S. and German companies based on support for the apartheid policy of the former South African Government) and Balintulo v. Ford Motor Co. et al., ___ F.3d ____ (2nd Cir. July 2015)(amended complaints did not allege sufficient facts to overcome the presumption against extraterritoriality).

510

Trooboff

The statute in question is part of Antiterrorism Act of 1990 and provides as follows: Any national of the United States injured in his or her person, property, or business by reason of an act of international terrorism, or his or her estate, survivors, or heirs, may sue therefor in any appropriate district court of the United States and shall recover threefold the damages he or she sustains and the cost of the suit, including attorney’s fees. 16 The statute defines “International terrorism” to mean activities that— (A) involve violent acts or acts dangerous to human life that are a violation of the criminal laws of the United States or of any State, or that would be a criminal violation if committed within the jurisdiction of the United States or of any State; (B) appear to be intended—(i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and (C) occur primarily outside the territorial jurisdiction of the United States, or transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum; Under this statute “international terrorism” is expressly defined to include conduct outside u.s. or which “transcends national boundaries.” Plaintiffs have generally based their causes of action on alleged “material support or resources” for international terrorism, which is defined to include “financial services” among the means for providing such support.17 As a result, financial institutions are likely target of causes of action under the statute. The statute also establishes and for a civil claim a criminal conviction establishes civil liability conclusively. The legislation includes a provision allowing damages to include attorneys’ fees which, of course, will encourage contingent fee arrangements for representation in such cases. Further, the statute allows for treble damages against those found to have supported terrorism. And there is a special statute of limitations that allows claims to be filed under 2019 for international terrorism that occurred after September 11, 2001. 16 18 u.s.c. § 2333. 17 18 u.s.c. § 2339B(g)(4) incorporating for this key term the same definition as appears in 18 u.s.c. 2339A.

Jurisdictional Limits on Granting Civil Remedies

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Arab Bank is headquartered in Jordan; and is the leading financial institution in Jordan. Arab Bank has 200 branches in 30 countries The Government of Hashemite Kingdom of Jordan filed an amicus brief in support of Bank and stated that the Bank plays a “significant role in the Jordanian and surrounding regional economies.” According to Jordan, this was the first time that its Government had ever filed an amicus brief in u.s. legal proceedings. In the complaint, the plaintiffs allege that Arab Bank transferred funds to parties that then transferred the funds to terrorists and their families. Plaintiffs are clear that the funds from Arab Bank went to parties that were not designated as foreign terrorist organizations by the United States and not otherwise designated for u.s. sanctions. Nonetheless, the plaintiffs assert, Arab Bank allegedly should have “looked back” to discover that the ultimate recipients of the funds were persons or entities that had been designated as terrorists by u.s. and u.n. For example, such funds that passed through Arab Bank were allegedly ultimately received by a Saudi Committee that is alleged to have aided families of terrorists. In the case, there was a major dispute regarding discovery that led to the District Court imposing conclusive adverse issue determinations against the Arab Bank as a sanction for non-disclosure.18 When the trial was concluded and Judge Cogan issued jury instructions that included such conclusive issue determinations, the jury held against Arab Bank after only two days of deliberations following a six-week trial.19 The next phase of the case would have assessed damages for the violations determined by the jury but the case was settled in August 2014 with the many press reports of the settlement differing over the amount, terms and reasons for the parties agreement. It is likely that, had there been no settlement, appeals would have taken years concerning the issue sanctions which were energetically disputed not only by Arab Bank but also by the United States. 18

19

To review the major controversy over the sanctions that were imposed by the District Court including the intervention by the United States Government on behalf of the Arab Bank but not in support of overruling the District Court’s sanctions, see District Court Memorandum Opinion and Order of April 8, 2015 (04-cv-2799 (BMC) (VVP)) and proceedings relating to Petition for Certiorari in Arab Bank v. Linde (No. 12–1485) and amicus brief of the United States, http://www.scotusblog.com/case-files/cases/arab-bank-v-linde/. For news reports of the jury verdict and background on the policy split within the u.s. Government over whether to support the Jordanian bank, see: http://www.nytimes .com/2014/09/23/nyregion/arab-bank-found-guilty-of-supporting-terrorist.html?_r=0;and http://www.economist.com/news/finance-and-economics/21620286-venerable-jordanian ­-bank-found-complicit-terrorist-attacks-consorting. For one of the many press reports on the  settlement and its background see http://www.americanlawyer.com/id=1202735418 703/What-Drove-Arab-Bank-to-a-Billion-Dollar-Settlement

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To be sure, absent the kind of sanction for issue determination that was imposed in the Arab Bank case, success in cases under this anti-terrorism statute will be challenging. In Rothstein v. ubs ag,20 the Second Circuit Court of Appeals ruled that, even though factual allegations of the plaintiff taken in the light most favorable to plaintiffs, with all reasonable inferences drawn in their favor, plaintiffs are required to allege facts that show a “proximate causal relationship between ubs’s transfers of funds to Iran and Hamas’ and Hezbollah’s [sic] commission of the terrorist acts that caused plaintiffs’ injuries.“ The Court of Appeals found no link in complaint alleging connection between funds to Iran and terrorist acts. Specifically, in Rothstein, the Second Circuit found that the Complaint did not allege “that ubs was a participant in the terrorist attacks that injured plaintiffs;” “that ubs provided money to Hezbollah or Hamas;” “that u.s. currency ubs transferred to Iran was given to Hezbollah or Hamas;” or “that if ubs had not transferred u.s. currency to Iran, Iran, with its billions of dollars in reserve, would not have funded the attacks in which plaintiffs were injured.” Thus, the Court found that the complaint lacked, as noted above, allegations of the required ““proximate causal relationship” to the terrorist acts causing plaintiff’s injuries.21 The Court of Appeals also held that ubs cannot be held liable civilly under the statute for aiding and abetting financial support to a terrorist organization. As interpreted by the Second Circuit, the statute includes aiding and abetting liability under criminal provisions but has no comparable provision allowing aiding and abetting as a basis for civil liability. It would seem likely that the reasoning in Rothstein might have affected how on appeal the Court of Appeals would have viewed the jury instructions that were issued in Arab Bank case even if some issue sanctions were allowed for the refusal to comply with discovery requests. In short, it remains to be seen how far this civil remedy actually reaches.

20 21

708 F.3d 82 (2nd Cir. 2013). The standard of proof imposed on the plaintiff in cases under this statute is still the subject of considerable litigation and seems likely to continue to raise issues that may ultimately reach the Supreme Court: see, e.g., Weiss v. National Westminster Bank, 768 F.3d 202 (2nd Cir. 2014)(plaintiff not required to show actual knowledge by the bank that its client was supporting terrorism and holding that the statute imposes a “less exacting” standard requiring “only a showing that NatWest had knowledge that, or exhibited deliberate indifference to whether Interpal provided material support to a terrorist organization, irrespective of whether Interpal’s support aided terrorist activities”) and Boim v. Holy Land Foundation for Relief and Dev., 549 F. 3d 685 (7th Cir. 2008) (Posner, J.).

Jurisdictional Limits on Granting Civil Remedies

4

513

Universal Personal Jurisdiction

The issue of universal personal jurisdiction arose in years prior to 2000 at the Hague Conference on Private International Law in negotiations for the Judgments Project on international jurisdiction and recognition and enforcement of judgments. The problem presented for the delegates to the Hague Conference was as follows: How should a proposed convention on international jurisdiction preserve and protect grounds for personal jurisdiction that would otherwise be prohibited when a cause of action is based on an alleged violation of fundamental human rights? In such cases there is often an absence of substantial connection between defendant, cause of action and forum. We have seen that was the case in Daimler. If the proposed Hague Conference were to prohibit as a basis for direct jurisdiction so-called “tag jurisdiction” based on personal service of process or “doing business” jurisdiction how should the exception to these prohibitions be drafted to cover alleged violations of human rights? Of course, the premise of this question is that absent such an exception there will not be an adequate basis for personal jurisdiction under the proposed convention or the law of many nations. Further, even if such an exception can be properly fashioned, is it wise and appropriate to include such an exception in the proposed convention and to which alleged violations should it apply and on what conditions? In Kiobel, u.s. Solicitor General said to the Supreme Court concerning causes of action under Sosa: “defendant is a foreign corporation of a third country—the United States cannot be thought responsible in the eyes of the international community for affording a remedy for the company’s actions, while the nations directly concerned could.” In other words, putting aside the Constitutional and statutory issues in Kiobel, it cannot be excluded that there would be opposition on policy grounds in the United States for creating a broader cause of action for hearing human rights violations. Kiobel supports that restrictive approach insofar as it requires for ats cases that rely on Sosa, as we have seen, that even when the claims “touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.” In addition, as we have seen, Daimler presents on Due Process grounds a strong Constitutional barrier to finding a basis for personal jurisdiction in human rights cases that arise principally outside the United States. In the Draft Convention that the Hague Conference delegates prepared,22 Art. 18 addressed this issue by providing as follows: 22

Judgments Project—Prelim. Doc. 11 (August 2000).

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3. Nothing in this Article shall prevent a court in a Contracting State from exercising jurisdiction under national law in an action [seeking relief] [claiming damages] in respect of conduct which constitutes – Variant One: [(a) genocide, a crime against humanity or a war crime[, as defined in the Statute of the International Criminal Court]; or][(b)a serious crime against a natural person under international law; or] [(c) a grave violation against a natural person of non-derogable fundamental rights established under international law, such as torture, slavery, forced labour and disappeared persons]. The explanation of the text emphasized that sub-paragraphs [b) and] c) above would apply only if the party seeking relief is exposed to a risk of a denial of justice because proceedings in another State are not possible or cannot reasonably be required. And then there was another option for this same provision, Variant Two: Nothing in this Article shall prevent a court in a Contracting State from exercising jurisdiction under national law in an action [seeking relief] [claiming damages] in respect of conduct which constitutes – [a serious crime under international law, provided that this State has established its criminal jurisdiction over that crime in accordance with an international treaty to which it is a party and that the claim is for civil compensatory damages for death or serious bodily injury arising from that crime.] Variant 1 elaborates on several causes of action and requires a showing of difficulty or impossibility for filing in an alternative forum if claim is for other than for genocide, war crimes, etc. Variant 2 requires a treaty and allows related civil claims only for a death/serious injury resulting from alleged international crime over which state has taken jurisdiction. Variant 2 requires no showing of denial of justice because of unavailability of alternative forum The foregoing demonstrates the difficulty of formulating basis for universal personal jurisdiction for civil remedies. The questions to be addressed include: • Which violations of fundamental human rights justify any exception for personal jurisdiction? • Is there any required showing of unavailability of alternative forum and, if so, for which violations?

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• Which claims under Art. 18(3) would qualify under Sosa and fall under the Alien Tort Statute after Kiobel? Would the u.s. require new legislation? How would the legislation be formulated to overcome a Constitutional challenge based on the Due Process Clause? At this point it is opportune to remind that the Committee International Civil Litigation and the Interests of the Public under the chairmanship of Professor Catherine Kessedjian presented a report on “International Civil Litigation for Human Rights Violations” to the International Law Association (ila) at its 2012 Sofia biannual meeting. As a result, the ila approved Resolution No. 2/2012 which adopted the Sofia Guidelines on Best Practices for International Civil Litigation for Human Rights Violations. A key concept in that report was that a forum has jurisdiction to prevent a denial of justice by affording a “forum of necessity” if “a sufficient connection” exists to the dispute. Grounds for such a connection establishing personal jurisdiction include “presence of plaintiff” and nationality of the plaintiff.23 These same issues are explored in a lengthy report on Universal Jurisdiction by Professor Andreas Bucher of Geneva who was president of the Hague Conference Diplomatic Conference in 2005 resulting in Hague Convention on Choice of Court Agreements. He developed his ideas for the Institut de droit international. Bucher’s study focuses on required nexus, requisite interest, unavailability of alternative forum, jurisdiction over defendant, applicable procedure and law, effectiveness of final judgment, etc. Some of his thinking appeared in the published version of his lecture at the Hague Academy of International Law that was delivered in August 2014. You should watch for his future publications, which will have an interesting and thoughtful proposal.24

23 24

The text of the ila Resolution and the Report of its Committee are available at: http:// www.ila-hq.org/en/committees/index.cfm/cid/1021. For a summary and overview of Professor Bucher’s thinking see, “La compétence universelle civile,” 372 Recueil des cours (2015) and for the Institut’s Resolution, http://www .justitiaetpace.org/idiE/resolutionsE/2007_san_01_en.pdf.

chapter 31

Corporate Group Structures and the Limits of Personal Jurisdiction. us/European Comparative Remarks Rui Pereira Dias 1 Introduction Corporate group structures have always been uneasy to tackle in multiple regulatory contexts and for various reasons. Amidst the problems that groups of companies pose to national and international legal frameworks, one is the relevance of corporate affiliations1 in determining personal jurisdiction over one corporate entity: that is, in what extent are (more or less intense) corporate ties relevant for the amenability to suit of a company not directly, or formally, present in a forum. Focusing on general jurisdiction, let us refer to the most recent jurisprudence of the us Supreme Court on the subject of assertion of personal jurisdiction on the basis of corporate affiliations (2.); describe the situation in eu jurisdictional law (3.); and draw a brief comparison of both legal frameworks, using as a tool two hypotheses mirroring the Supreme Court cases on general jurisdiction referred-to (4.). This will lay the groundwork for a rough sketch of a few aspects to be distinguished, which could prove useful, it is believed, when interpreting and developing the legal standards for the relevance of corporate affiliations in general jurisdiction (5.). 2

The Latest us Jurisprudence: Supreme Court’s Holdings in Goodyear (2011) and Bauman (2014)

For the sake of brevity, let us straightway address the most recent developments, i.e., the Supreme Court’s decisions in Goodyear and in Daimler Chrysler

1 The use of this expression (corporate affiliation) is widely spread, even though it may encompass quite different realities, from integrations (in the sense of the German Eingliederung in group law: see § 319 Aktiengesetz), wholly-owned subsidiaries of parent companies, or mere participation relationships that provide for control, or some degree of influence, of the parent over the subsidiary. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_032

Corporate Group Structures and the Limits of Personal Jurisdiction 517

v. Bauman. After decades without having granted certiorari in general jurisdiction cases involving international elements,2 the Supreme Court decided the first case in June 20113 and the second in January 2014.4 In Goodyear, Justice Ginsburg’s opinion pointed at what has been read as a restraint to general jurisdiction. In order to justify amenability to suit for dealings entirely distinct from activities in the forum, a corporation shall be “fairly regarded as at home”; paradigm definitions of home being place of incorporation and principal place of business. In Bauman, the Court retakes the issue to clarify that these two “paradigm bases for general jurisdiction…have the virtue of being unique…as well as easily ascertainable”, thus lending jurisdictional rules “greater predictability”.5 But “Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business: it simply typed those places paradigm all-purpose forums.”6 Therefore, the door remains open for “exceptional cases”, where “a corporation’s operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State.”7 More specifically regarding the issue of corporate affiliations, undoubtedly present, in theory, in both cases, the outcome is unfortunately frustrating. In Goodyear, a “single enterprise” theory was the object of a forfeited contention by respondents, due to late assertion, and thus not addressed.8 The Court, notwithstanding, cited secondary authority in the sense that “merging parent and subsidiary for jurisdictional purposes requires an inquiry ‘comparable to the corporate law question of piercing the corporate veil’”.9 2 The latest before had been the 1984 decision in Helicopteros Nacionales de Colombia, S.A. v. Hall et al., 466 u.s. 408 (1984). 3 Goodyear Dunlop Tires Operations, S.A., et al. v. Brown et ux., co-administrators of the estate of Brown, et al., 564 u.s. 1 (slip opinion; docket no. 10–76), decided June 27, 2011. 4 Daimler AG v. Bauman et al., 571 u.s. 1 (slip opinion; docket no. 11–965), decided January 14, 2014. The famous case Kiobel et al. v. Royal Dutch Petroleum Co., 569 u.s. (slip opinion; docket no. 10–1491), decided April 17, 2013, dealing with the extraterritorial applicability of the Alien Tort Statute, did not entertain the question of personal jurisdiction (but “the issue could have been presented in Kiobel itself”: Linda J. Silberman, “Jurisdictional Imputation in Daimler Chrysler AG v. Bauman: A Bridge Too Far”, in Vanderbilt Law Review, vol. 66, 2013, p. 123). 5 Bauman, cit., p. 19. 6 Id., ibid. 7 Id., p. 20, fn. 19. 8 Goodyear, cit., pp. 13–14. 9 Goodyear, cit., p. 14, citing Lea Brilmayer/Kathleen Paisley, “Personal Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies, and Agency”, in Calif. L. Rev., 74, 1986.

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In Bauman, the court recognizes it “has not yet addressed whether a foreign corporation may be subjected to a court’s general jurisdiction based on the contacts of its in-state subsidiary”, expressly identifying the alter ego and the agency theories in contention. “But we need not pass judgment”, the Court concludes, “on invocation of an agency theory in the context of general jurisdiction, for in no event can the appeals court’s analysis be sustained”. As a result, those who expected the Court to issue some guidance on how exactly corporate affiliations play out in the jurisdictional inquiry remain without answer. 3

The Situation in Europe

There have not been recent significant developments in eu regulation on personal jurisdiction. The so-called Brussels I bis Regulation (or recast),10 fully applicable on January 10, 2015, does not materially change the 2001 Brussels Regulation on the relevant provisions. Those are, namely, the general rule actor sequitur forum rei, according to which a company is to be sued in the forum of its domicile, defined for the purposes of the Regulation as the place where it has its: (a) statutory seat, or (b) central administration, or (c) principal place of business (Article 63(1)). And there is jurisdiction based on a branch, agency or establishment, in what has already been called a “quasi-general jurisdiction”:11 as regards a dispute arising out of the operations of a branch, agency or other establishment, there is also jurisdiction to adjudicate in the courts for the place where the branch, agency or other establishment is situated (Article 7(5)). This may be particularly important for corporate affiliations when combined with 10

11

Regulation (eu) No. 1215/2012 of the European Parliament and of the Council, of 12 December 2012, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). See Miguel Virgós Soriano/Francisco J. Garcimartín Alférez, Derecho procesal civil internacional. Litigación internacional, 2a. ed., Thomson Civitas/Aranzadi, Navarra, 2007, p. 135. Peter Mankowski, “Art 5”, in Ulrich Magnus/Peter Mankowski (eds.), Brussels I Regulation, 2nd ed., Sellier, München, 2012, Rn. 270, maintains that this amounts to “playing with words”: it should not obnubilate the requirement, not akin to the us general jurisdiction test, that the dispute founding jurisdictional attribution in the forum State arises out of the operations of the branch, agency or establishment situated within such State. However, interpreting this rule as establishing a quasi-domicile in the place of the branch, or rather as a conduct-linked basis of jurisdiction for disputes arising out of the acts done in that particular place (and so, in this latter sense, closer to what is conceived as specific jurisdiction in us terminology), may be relevant for the rule’s application whenever the operations of the establishment have already ceased: see Adrian Briggs, Private International Law in English Courts, Oxford University Press, Oxford, 2014, 4.279.

Corporate Group Structures and the Limits of Personal Jurisdiction 519

Article 8(1), which allows a defendant to be sued away from “home” when one of the codefendants is domiciled in the forum, and provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. This provision, although not specifically designed for the parent-subsidiary constellations, may be very much suitable in a great array of corporate affiliation cases.12 It is fit to remind that the cjeu’s case law on the equivalent rules preceding Article 7(5) has bracketed off the idea of somehow isolating corporate legal entities under a strict formalistic approach. It rather affirmed that a subsidiary with its own independent legal existence may qualify as an establishment for such purposes.13 That is, the jurisdictional inquiry does not turn on the chosen legal form: paramount is the external perception and the appearance created—“even if, from the point of view of company law, the two companies are independent of each other”.14 Furthermore, the presence of a parent-subsidiary corporate relationship, linked with the inherent intricacies of company law, has given cause to more or less generous interpretations of Articles 7(1) and (2) (contractual and extracontractual matters, respectively) and what can be called a jurisdiction based upon accessoriety: if a creditor of the company has a claim based on contract or tort, his further claim to hold the shareholders or a parent company liable should also qualify on contract or tort. This construction is highly debatable.15 We name it, on the one hand, to keep 12 13

14

15

As noted by Linda J. Silberman, “Jurisdictional Imputation in Daimler ”, cit., p. 130. In fact, a parent company may be qualified as an establishment of its own subsidiary for jurisdictional purposes, as it happened in the cjeu’s case sar Schotte GmbH v. Parfums Rothschild SARL, C-218/86 (1987.12.09); subscribing this solution, see only Jan Kropholler/ Jan von Hein, Europäisches Zivilprozessrecht—Kommentar zu EuGVO, LuganoÜbereinkommen 2007, EuVTVO, EuMVVO und EuGFVO, 9. Aufl., Verlag Recht und Wirtschaft, Frankfurt am Main, 2011, Art. 5, Rn. 108 (with further references); critically, Hélène Gaudemet-Tallon, Compétence et exécution des jugements en Europe, 4e. éd., lgdj, Paris, 2010, pp. 241–242, 244. Para. 15 of cjeu’s SAR Schotte v. Parfums Rothschild SARL, C-218/86 (1987.12.09): the rule equivalent to now Article 7(5) “must be interpreted as applying to a case in which a legal entity established in a Contracting State maintains no dependent branch, agency or other establishment in another Contracting State but nevertheless pursues its activities there through an independent company with the same name and identical management which negotiates and conducts business in its name and which it uses as an extension of itself”. Read from across the Atlantic, it has been said “the judgment is not so different from what an American court might rule under the heading of ‘alter ego’ or ‘apparent authority’”: Andreas F. Lowenfeld, International Litigation and Arbitration, 3rd ed., Thomson/West, St. Paul, Minn., 2006, p. 247. Favorable to it, Peter Mankowski, “Art 5”, cit., Rn. 51–52. More cautiously, in the light of  predictability and the necessarily narrow interpretation of special jurisdiction rules

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in mind this resort to Articles 7(1) and (2) as one possibility, even if not undisputed, in order to find a jurisdictional solution to corporate group cases. On the other hand, it further helps us underline how the difficulties in asserting it, when the underlying ratio may seem worth fighting for, could be solved through a thoughtful interpretation of the already cited Article 8: in reality, the most typical situation may be addressed by way of demonstrating the close connection between claims that will usually be based on the same cause of action16 and so generate the risk of irreconcilable judgments if tried separately, therefore authorizing the claimant to hale into court not only the company domiciled in the forum State, but also its parent company to be equally held liable for ultimately the same facts.17 4

Europe and the us Compared: Similar Principles, Different Approaches

The divergent approaches to jurisdiction in Europe and the us have been subject to thorough analyses, so that it would be unfit to take up the issue in these brief lines. It suffices to recall, as the descriptions above help demonstrate, how the us courts’ approach tends to be defendant-specific, as opposed to a more claim-specific approach of European law.18 Needless to say, the structurally different approaches to, and regulations of, jurisdiction may prove to be a reason to explain different outcomes when ascertaining jurisdiction, even where, as in both of these legal contexts, the founding

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presented by today’s Article 7, see e.g. Johannes Weber, Gesellschaftsrecht und Gläubigerschutz im Internationalen Zivilverfahrensrecht—Die internationale Zuständigkeit bei Klagen gegen Gesellschafter und Gesellschaftsorgane vor und in der Insolvenz, Mohr Siebeck, Tübingen, 2011, pp. 288–291. In this sense, in what concerns suing both directors of the company and the latter itself, Rafael Arenas García, “La responsabilidad de los administradores sociales desde la perspectiva del derecho internacional privado”, in Rafael Arenas García et al., La internacionalización del Derecho de Sociedades, Atelier, Barcelona, 2010, p. 167; Id., “Suing Directors in International Litigation”, in Stefan Grundmann et al. (Hrsg.), Festschrift für Klaus J. Hopt zum 70. Geburtstag am 24. August 2010—Unternehmen, Markt und Verantwortung, vol. i, Walter de Gruyter, Berlin, New York, 2010, p. 329. In this direction, see Peter Gottwald, “EuGVO Art. 5”, in Wolfgang Krüger/Thomas Rauscher (Hrsg.), Münchener Kommentar zur Zivilprozessordnung, Band 3 (§§ 1025–1109, egzpo, gvg, eggvg, UKlaG, Internationales und Europäisches Zivilprozessrecht), 4. Auflage, Verlag C.H. Beck, München, 2013, Rn. 86. For a brief reminder, see Peter D. Trooboff, “Beginning to Rethink Personal Jurisdiction”, in A Commitment to Private International Law—Essays in Honour of Hans van Loon, Intersentia, Cambridge, Antwerp, Portland, 2013, p. 602.

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principles may be said to be broadly coincident—namely, litigation fairness to the parties, on the one hand, and predictability and ease of administration, on the other.19 5 The eu Regulation Tested by Mirrored Goodyear and Bauman Cases Let us draw a sketch of how those differences play out in the face of similar circumstances, “mirroring” Goodyear und Bauman by way of turning them European, rather than us jurisdictional cases. In Goodyear, the court had to decide whether North Carolina residents, relatives of the victims of a bus accident occurred in France claiming wrongful-­ death damages, could file suit in North Carolina against a group of defendants none of which was resident or headquartered or incorporated in this State. On the one hand, there was the parent Goodyear usa, an Ohio corporation, who did not contest North Carolina courts’ personal jurisdiction over it. On the other hand, there were three subsidiaries organized and operating respectively in Turkey, France, and Luxembourg, who all moved to dismiss the claims for want of personal jurisdiction, given that they were not registered to do business in North Carolina, had there no place of business, employees, or bank accounts, nor did they advertise products or solicit business in North Carolina, let alone sell themselves or ship tires to that State.20 The Supreme Court held these foreign defendants not amenable to suit in North Carolina for claims unrelated to anything that connects them to such State, where they are hence not to be regarded “at home” so as to justify the assertion of general jurisdiction.21 19

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See Arthur Taylor von Mehren, “Theory and Practice of Adjudicatory Authority in Private International Law: A Comparative Study of the Doctrine, Policies and Practices of Common and Civil-Law Systems”, in rcadi, t. 295 (2002), 2003, p. 68. It was deemed irrelevant to this respect that “a small percentage of petitioners’ tires (tens of thousands out of tens of millions manufactured between 2004 and 2007) were distributed within North Carolina by other Goodyear usa affiliates” (Goodyear, cit., p. 4), notwithstanding the arguments of the respondents in the sense that such a view would be tantamount to a legitimation of an outsourcing to foreign courts of “the exclusive right to decide whether those subsidiaries are liable in tort for the injuries caused by the defective products they produce”: see Brief for the Respondents, p. 52. Like in previous jurisprudence, namely Helicopteros 466 u.s. 408 (1984) (and Goodyear presented no reason for differentiation, as expressis verbis stated by Justice Ginsburg for the Court at p. 12), the sales of Goodyear tires “sporadically made in North Carolina through intermediaries” were not to qualify as “continuous and systematic general business contacts”; these latter could, if present, justify the assertion of general jurisdiction.

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In assessing what would result if a similar case were brought within the realm of application of the above-identified Brussels I bis Regulation, we shall ask what would happen in the mirrored circumstances of a parent company incorporated and seating in e.g. France, who is a co-defendant with its whollyowned subsidiaries incorporated in e.g. Ohio, North Carolina, and also in Mexico. Should an European state court applying Brussels I bis assert jurisdiction over these three defendant subsidiaries, provided that jurisdiction has been established over the French corporation, concerning a claim that arises out of a bus accident occurred in e.g. North Carolina? The answer appears to be negative. Difficulties start in the application of the eu Regulation itself: its general jurisdiction rule (domicile of the defendant) is only applicable to defendants domiciled in a Member State (Article 4(1)), and the law of the Member State’s seized court will apply to jurisdiction “if the defendant is not domiciled in a Member State”, except in the (herein inapplicable) cases of the protective jurisdiction grounds, exclusive jurisdiction or a pactum de foro eligendo (Article 6(1)). That is, the special jurisdiction rules of Article 7 and 8 will be apparently inaccessible, given that they add possible fora only applicable against a “person domiciled in a Member State”, as stated in both provisions. For those non-European defendants, the residual national jurisdiction rules of each Member State shall be resorted to; this means that the outcome, in terms of determining whether the imagined eu state court would have jurisdiction, may be quite different depending on the Member State of the seized court. The state of the law is thus not at all satisfactory,22 especially given that a judgment issued on the basis of national jurisdictional provisions will still be automatically recognized, as long as it has been issued by a court of a Member State. Therefore, a direct comparison with the us jurisdictional system is hampered at that point: for the fact scenario at hand, there is no consensual pan-European response, even if the decision by a court of any Member State will be recognizable and enforceable in every other Member State, without any possibility of claiming an eventual exorbitance of jurisdiction. Article 45(3) is clear in denying it by stating that, except for the protective and the exclusive grounds of jurisdiction, “jurisdiction of the court of origin may not be reviewed. The test of public policy…may not be applied to the rules relating to jurisdiction.” A harmonizing possibility23 is advanced by those who propose an 22 23

A “disgrace”, in the words of Adrian Briggs, Private International Law in English Courts, cit., 4.302. Case law on connected claims has been making clear that here lies a possible difficulty for the coherence of the Regulation. And it must be firmly taken into account that this is an important rule for the operation of eu jurisdictional framework: complex cases are the ones posing complex problems, and more regularly than not will complex cases have

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application by analogy of now Article 8 also to a non-eu domiciliary, to avoid placing the latter in a more favorable position (to escape jurisdiction on connected claims) than that of a person domiciled in a Member State.24 Independently of a general adhesion to this proposal, an argument in its favor can be drawn from the existence of substantive-law rules holding one of the defendants fully liable for the other’s debts, if one of those defendants is not a eu-domiciliary. Here is a field where corporate legal provisions may play a role, such as the ones to be found in Portuguese law.25 In Bauman,26 there was a claim by twenty-two residents of Argentina against a German corporation, DaimlerChrysler Aktiengesellschaft (Daimler AG). Suit was filed in a us federal court sitting in California, on the basis of tortious facts allegedly committed in Argentina, by an Argentinian subsidiary of Daimler. Why California? Because, as far as the jurisdictional analysis is concerned, a us subsidiary of Daimler AG (mbusa), incorporated in Delaware and with principal place of business in New Jersey, distributes Daimlermanufactured vehicles throughout the us, including California. So, claimants sought an attribution of the Californian contacts of mbusa to Daimler AG, in order to hale the latter into court in that State. But this was finally denied, as nothing more than the “importance”27 of mbusa’s services for Daimler AG’s activity was demonstrated. The Supreme Court recognizes it has “not yet addressed whether a foreign corporation may be subjected to a court’s general jurisdiction based on the contacts of its in-state subsidiary”, citing different tests from the more rigorous alter-ego theory (“a subsidiary’s jurisdictional ­contacts can be imputed to its parent only when the former is so dominated by the latter as to be its alter ego”) to the less rigorous agency relationship. This one, the court insists, may very well be relevant for specific jurisdiction cases,

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more than a single person or entity on the side of defendants. This means Article 8 will highly probably be tested in the most complicated circumstances. For instance, what is the role of an inadmissible claim, as to anchor the jurisdiction on the domicile of one of the codefendants? The law states explicitly no control of such admissibility, but there are voices pointing at how poor a basis of jurisdiction that would create. See e.g. Stefan Leible, “Art 6 Brüssel I-VO”, in Thomas Rauscher (Hrsg.), Europäisches Zivilprozess- und Kollisionsrecht—EuZPR/EuIPR—Kommentar—Bearbeitung 2011— Brüssel I-VO/LugÜbk 2007, Sellier, München, 2011, Rn. 7 (with further references). See infra, 6. For a more detailed account of this case, see supra the contribution of P. Trooboff. The circuit court’s decision here reversed relied on precedent giving pivotal importance to whether the subsidiary performs services “sufficiently important” to the foreign ­corporation so that, in the former’s absence, the latter would itself, through its own officials, “undertake to perform substantially similar services.” See Bauman, cit., p. 16, with citations.

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in the course of e.g. determining whether a corporation is purposefully availing itself of a forum by directing its agents to act there; but not typically in general jurisdiction cases, such as the one undisputedly at hand.28 Even if there were “continuous and systematic” commercial contacts with California, they could never amount to a sufficient basis for jurisdictional attribution, given that neither the case is one of “conduct-linked jurisdiction” with the forum (specific jurisdiction), nor the defendant presents contacts so substantial and of such nature (mainly, place of incorporation or principal place of business) as to render it essentially at home in the forum State. Quite clearly can we depict a similar final negative answer from the European standpoint, vis-à-vis a mirrored Bauman case. Let us picture the twenty-two residents of Argentina now filing suit in a e.g. Portuguese court, based on acts allegedly perpetrated by the Argentinian subsidiary of a e.g. Californian parent company, who owns the capital of a subsidiary incorporated in the United Kingdom, with principal place of business in Germany and sizable sales in Portugal (where this “European” subsidiary is hypothetically sued).29 As for the “European” subsidiary, the Portuguese courts, applying Brussels i bis, would have no grounds of jurisdiction to reach out for. Neither is the company domiciled in Portugal for general jurisdiction purposes of Article 4, nor is there any occurrence in or impact upon Portugal in terms of triggering the special jurisdiction grounds of Article 7 (the “sizable sales” would be as irrelevant for the eu jurisdictional test as they were for the us one). But even assuming, for purposes of this conjecture, that the “European” subsidiary was amenable to suit in Portugal, there remains the inaccessibility of the Regulation provisions to bring claims against those (such as the us or the Argentinian subsidiaries) not domiciled in any Member State. We therefore reach an outcome similar to the one in the “mirrored” Goodyear: except for the existence of substantive-law rules of liability such as the Portuguese ones briefly described infra, it appears not easy to conceive a duly buttressed justification for an analogous overarching of non-eu domiciliaries under Article 8. 6

How to Go about Corporate Affiliations for Jurisdictional Purposes: Some Topics for Debate

With this framework in mind, let us take the opportunity to present some brief observations for further thought and discussion. 28 29

See Bauman, cit., p. 16 (including fn. 13). In the actual Bauman case, as we just saw, the Daimler subsidiary was sued in California but had been incorporated in Delaware and had principal place of business in New Jersey.

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It seems important to recall that the principle of corporate legal separateness, together with the limitation of liability usually bound to it as a derivation of the rule that each of the incorporated entities is erected as a center of imputation of its own, hence liable only for the obligations assumed on its behalf, are hallmarks of the private law of organizations. It is probably so in all jurisdictions, certainly in Europe and the us. That does not mean those principles are insurmountable, as v.g. doctrines of “piercing of corporate veil” profusely show. But it does mean that such legal separateness or independence is the point of departure, and rightly so—it is needless to point out all the economic and social underpinnings of legal personality and limitation of liability. Notwithstanding, fundamental rights may need to be especially protected in particular contexts, and that is why human rights violations have been claiming a particular status. A Committee of the International Law Association chaired by Prof. Kessedjian has approved resolutions that ultimately originated the 2012 Sofia Guidelines dealing with this issue. The rule on personal jurisdiction is to be found in Article 2: the courts of the State of the defendant’s domicile shall have jurisdiction, being domicile defined for the legal person in terms similar to what we have seen above in the eu Regulation (Article 63(1)).))30,31 As for connected claims, Guideline 2.2. again reminds us of the European approach. Centered on the claim rather than the defendant, it puts together two different forms of relatedness, in order for a court to justify the assertion of jurisdiction upon non-domiciled but related parties,32 always provided that it 30

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According to Guideline 2.1(1)(b), domicile for a legal person refers to the place where “(i) it has its statutory seat or is incorporated or under whose law it was formed; or (ii) it has its central administration; or (iii) its business, or other professional activity, is principally carried on.” Compared to the eu Regulation, we find minor tunings: in (i), the place (or law) of incorporation is added to statutory seat, and these are criteria with strong affinities; in (iii), “professional activity” is added to “business”. Such particular status of human rights violations also permitted, or rather called for, the inclusion of rules introducing a highly valuable flexibility in the jurisdictional system: on the one hand, a forum of necessity at the courts of any State with a “sufficient connection to the dispute” whenever the exercise of adjudicatory authority is in order to “avert a denial of justice” (Guideline 2.3.); on the other hand, a forum non conveniens rule, not imposed to judicial systems where such doctrine is unheard of (“as long as it is allowed under the law of the forum”), and conditional namely upon an efective assertion of jurisdiction by the “more convenient” court (see Guideline 2.5.). Full provision of Guideline 2.2. (Connected claims) is as follows: “2.2(1) The courts of the State where one of a number of defendants is domiciled shall have jurisdiction over all of the defendants in respect of closely connected claims. 2.2(2) Claims are closely connected in the sense of paragraph 2.2(1) if: (a) it is efficient to hear and determine them together; and (b) the defendants are related.

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is “efficient33 to hear and determine” the claims together. In (a) and (b), it is attended to the corporate relationships or affiliations, independently of how the facts play out;34 whereas (c) and (d) are purely factual. These two forms are to be regarded differently, I believe, from the standpoint of the importance of the corporate legal elements for their interpretation. We may say that the second form, which elects fact-driven criteria, is fairly independent from the corporate-legal links between the intended codefendants: concerted or directed activities are not necessarily caused by corporate “subjection” of a party to the other, for many other facts may be at the origin of such concertation or direction. Whereas the first form must necessarily receive broad indications from the corporate-legal delineation of how the entities relate with each other; to assume it as a point of departure is perhaps the only way of respecting the general principle of corporate separateness. This is tantamount to asserting the need to separate factual imputations from a kind of corrective jurisdictional approach to the corporate legal entity. When a conduct is factually imputable or attributable to an entity, however, it makes more sense to assume such a factual localization in the forum in order to justify amenability to suit, which is typical of an inquiry of specific jurisdiction; it is less fit to use such imputation to justify a presence in a forum as to hale the company into court for claims unrelated to the facts underlying the imputation, i.e., in a general jurisdiction inquiry.35 In Europe, the language of the “irrelevance of links under company law”,36 if taken to the letter, is not fully compatible with the respect for corporate personality, and the limitation of liability that comes with it in modern company law (even if the liability question must be distinguished from the jurisdictional inquiry). It may serve for the factual imputation cases, where a “paramount importance of the external perception and appearance”37 is recognized; it does

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2.2(3) Defendants are related in the sense of paragraph 2.2(2)(b) in particular if at the time the cause of action arose: (a) they formed part of the same corporate group; (b) one defendant controlled another defendant; (c) one defendant directed the litigious acts of another defendant; or (d) they took part in a concerted manner in the activity giving rise to the cause of action.” Article 8(1) of Brussels I bis reads “expedient”. Even though, it must be stressed, the control criterium under (b) can be read also in a more “factual” fashion, as footnote 282 of the Final Report of the Committee makes clear by expressly not limiting control to stock ownership. Linda J. Silberman, “Jurisdictional Imputation in Daimler ”, cit., p. 126, points out the importance of the role of Due Process also for the “imputation” question, even if the latest case law has not focused that aspect. See Mankowski, cit., Rn. 281 et seq. Id., ibid.

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not, however, serve in the absence of such facts, so that the standard for justifying deviation from corporate rules must then be set higher, and most importantly be articulated with the applicable company law. An integrated analysis of the applicable substantial corporate law may be necessary when seeking the fittest interpretation of these rules of jurisdiction. Take the example of Portuguese company law of groups, recently assessed by the Court of Justice of the European Union38 in a case involving the liability of a foreign (but eu-) parent for debts of the wholly owned Portuguese subsidiary. Substantive law provides for joint and several liability of the parent company, which forms a group with one or more subsidiaries, for the debts of the latter (Article 501 of the Portuguese Companies Code). Even if there is no deviation from the principle that each and every company of the group maintains its own corporate legal personality, this corporate liability seems sufficient to establish jurisdiction over the foreign parent according to Article 8 of Brussels I bis Regulation, and it may further be considered as a possibly attendable argument for the analogous application of this provision also to a non-eu domiciliary. There is always a latent fear that making jurisdiction dependent upon corporate legal aspects would open the door to all sorts of manipulations. But that is to assume a bias that will not always be reasonable: that all corporate structuring is somehow prone to fraudulent manipulations, or not to mirror corporate and business reality as it is. Jurisdictional standards, in order not to be exorbitant, should probably have the opposite point of departure. And, in intra-eu legal discussions, such bias is not only exaggerated, it may further be at times inconsistent with the eu fundamental freedoms. The right of establishment, as broadly interpreted by the Court of Justice, is not a fraudulent tool: it is presently envisaged as a right, even when its exercise openly aims at v.g. circumventing more rigorous corporate laws.39 This is a reason why a consistent approach to eu law demands jurisdiction and corporate law not to treat each other as untrustworthy neighbors.

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Even if not giving the soundest account of such regulation vis-à-vis the question of its extraterritorial application: see Rui Pereira Dias, “A responsabilidade das sociedades-mãe estrangeiras no regime dos grupos: os cinzentos do acórdão Impacto Azul (tjue, C-186/12, 20.6.2013)”, in iii Congresso Direito das Sociedades em Revista, Almedina, Coimbra, 2014, p. 411 et seq. As expressly stated by the cjeu in Centros Ltd v. Erhvervs- og Selskabsstyrelsen, C-212/97 (1999.03.09).

chapter 32

Towards Judicial Accountability in the Business & Human Rights Field? Humberto Cantú-Rivera i Introduction After the unanimous adoption and endorsement of the un Guiding Principles on Business & Human Rights in June 2011,1 a tide of initiatives have appeared at the international, regional and local levels to implement such principles and develop them within the corresponding spheres of commercial activities and operations. Some of them have been led by States, but an overwhelming majority has been developed by non-state actors (ngos and multinational corporations alike) in different industrial fields. As important and necessary as such type of initiatives may be, an important part of this process—which may be a central piece to developing a more binding nature to this un project on corporate accountability—is still lagging behind: adjudication at the national level, which was described by John Ruggie in his Guiding Principles as an essential part of the state duty to protect. Three years after the appearance of the un Guiding Principles, there have been few examples of this type of accountability—judicial accountability. However, the existing examples (whether successful or not) have garnered attention for the participation of major transnational companies in alleged human rights violations, as well as for the interpretation made by different judiciaries of current international standards regarding human

1 The un Guiding Principles on Business and Human Rights are a soft law report of the former Special Representative of the Secretary-General on the issue of human rights and transnational corporations and business enterprises. They are divided in three interrelated pillars, focused on the state duty to protect human rights, including from non-state actors (Pillar i), on the corporate responsibility to respect internationally recognized human rights, through human rights due diligence and impact assessments (Pillar ii) and on the need to have access to remedies against corporate-related human rights abuses (Pillar iii). An important amount of literature exists on the mandate of John Ruggie as Special Representative: see e.g. R. Mares (ed.), The un Guiding Principles on Business and Human Rights—Foundations and Implementation, Leiden, Martinus Nijhoff, 2012; and J. Ruggie, Just Business: Multinational Corporations and Human Rights, New York, w.w. Norton, 2013.

© koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_033

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rights. A significant majority of these cases have focused on the analysis of customary rules of international law, jus cogens principles, treaties and voluntary commitments of corporations to international initiatives on corporate social responsibility, as well as on drittwirkung (horizontal application of human rights) and corporate obligations to apply human rights standards at the domestic level. While few in number, the content of these judgments has been particularly dense, and shown the myriad difficulties appearing at this intersection of public and private international law, of international economic law and the human rights world. This chapter aims to analyze whether actual judicial accountability is taking place in the business & human rights field—or if it can ever actually happen. To this end, the chapter will briefly analyze and discuss judgments by several European judiciaries (particularly of France, the United Kingdom and The Netherlands), as well as by judiciaries in some countries in the Americas (namely by Mexico and Ecuador). With this in mind, the chapter will try to dissect whether there are common standards regarding judicial accountability of multinational corporations for human rights violations throughout the different judiciaries, if there is a logical pattern across them to reach their conclusions, and to ponder whether accountability of multinational corporations is on the horizon for these “non-subjects” of international law. ii

Between Torts and International Customary Law: Corporate Accountability for Human Rights Abuses in Europe

Recent cases brought against transnational corporations before several European judiciaries have relied on different arguments and grounds to try to hold such non-state actors accountable for their involvement in human rights violations. While less publicized than some of their American counterparts, they have provided interesting ‘food for thought’ in relation to several issues, particularly judicial interaction and the interpretation of sources of law. Also, such cases reflect two important grounds of discussion in relation to corporate accountability for international law, namely the reliance on torts on the one hand, and on international customary law on the other hand, to hold corporations accountable for their involvement in human rights abuses. While the arguments of the parties have been diverse in the different cases, they are clear evidence of a turn to home state jurisdictions as forums for adjudication of human rights causes, which constitute a relatively more certain—or at least less controversial—judicial avenue than relying on extraterritorial jurisdiction. The next paragraphs will analyze in a chronological order three particular

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cases, stemming from the United Kingdom, The Netherlands and France, in an effort to discern some common characteristics in judicial cases related to corporate conduct. A case that set forth an important precedent in relation to corporate accountability was Chandler v. Cape plc.2 While not exactly based on human rights law, the case saw the plaintiff, David Chandler, file a lawsuit against Cape plc, the parent company of his former employer, Cape Products, for breaching a duty of care to him. As a result of his work with the subsidiary decades earlier, the plaintiff claimed to have developed asbestosis, despite the parent company knowing of the health risks involved in its business and that of its subsidiary. The first instance of the case saw the judge rule that on the basis of an assumption of responsibility,3 the parent company would be liable for its negligence on ensuring that its subsidiary took all necessary health and safety measures to protect the health of its employees. In particular, the first instance judge found that given that the defendant dictated its subsidiaries’ policies in relation to health and safety issues, there was a sufficient degree of proximity between both companies, and thus, Cape plc “retained responsibility for ensuring that its own employees and those of its subsidiaries were not exposed to the risk of harm through exposure to asbestos.”4 On appeal, the High Court retained the first instance judgment, considering that the assumption of responsibility would be based on the existence of proximity between the parent company and its subsidiary, and the fairness of imposing liability on the parent company. In this regard, the High Court determined that four scenarios would justify imposing liability on a parent company: where the businesses of a parent company and its subsidiary are the same to a large extent; where the parent has or ought to have superior knowledge regarding health and safety in the industry; where the parent company knows or ought to have known that the subsidiary’s system of work is unsafe; and where the parent knows or ought to have foreseen that its knowledge would be relied upon by the subsidiary or its employees, regardless of the former’s intervention in the policies of the latter.5 Thus, based on the omission by the parent company to advise its subsidiary on precautionary measures, the 2 Judgment, Chandler v. Cape plc, [2012] ewca Civ 525 (Court of Appeal, 25 April 2012). 3 Ibid., §31. 4 Ibid., based on the Caparo test stemming from Caparo Industries plc v Dickman [1990] 2 ac 605. This three-stage test determines the existence of a duty of care when a damage is foreseeable, there is a relationship of proximity between the parties and where it is fair, just and reasonable to impose liability. 5 Ibid., §80.

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Court determined that the parent company was responsible for the health and safety of its subsidiary’s employees, and dismissed the appeal. The Court of Appeal did not acknowledge to be piercing the corporate veil of Cape plc; however, the effect of the judgment is precisely that, for it imposes a duty of care upon parent companies for the actions of their subsidiaries if they find themselves to be within the four standards set forth in Chandler. Another important case that was recently decided is Friday Alfred Akpan et al. v. Royal Dutch Shell plc et al.6 The case, brought before the District Court of The Hague, was based on the allegations of environmental and personal damages suffered by the plaintiff, Friday Alfred Akpan, due to two oil spills occurred in 2006 and 2007 in Nigeria. Both of them were the result of negligence from the defendants in the maintenance of its oil-producing operations in the Ikot Ada Udo region, which resulted in the loss of Akpan’s means of livelihood, who was a farmer and fisherman. In its analysis, the District Court held that a causal link between the violation of a duty of care by the Nigerian subsidiary and the damages suffered by the plaintiff existed,7 and that the Nigerian subsidiary, Shell Petroleum Development Company of Nigeria Ltd, committed a tort of negligence by not preventing the sabotage of the oil structures.8 This case offers interesting judicial considerations on different fronts, particularly in relation to the international jurisdiction of Dutch domestic courts, on the potential liability of parent companies for the actions of their subsidiaries, and on the analysis of human rights violations by corporate actors. The District Court of The Hague held in Akpan that an international trend to hold parent companies of multinationals liable in their home state jurisdictions for actions of their foreign subsidiaries abroad has appeared,9 which would mean that Dutch courts may potentially have jurisdiction in cases with few connections to the Netherlands over different entities of a corporate group, 6 Judgment, Friday Alfred Akpan et al. v. Royal Dutch Shell plc et al., Case C/09/337050/ ha za 09–1580 (The Hague District Court, 30 January 2013). For a more detailed analysis of the Dutch jurisdictional position on extraterritoriality, see H. Cantú Rivera, ‘Developments in Extraterritoriality and Soft Law: Towards New Measures to Hold Corporations Accountable for their Human Rights Performance’, Anuario Mexicano de Derecho Internacional, vol. xiv, 2014, pp. 743–749. 7 Judgment, Friday Alfred Akpan et al. v. Royal Dutch Shell plc et al., Case C/09/337050/ ha za 09–1580 (The Hague District Court, 30 January 2013), §4.45. 8 Ibid. 9 Ibid., §4.5: “For quite some time…there has been an international trend to hold parent companies of multinationals liable in their own country for the harmful practices of foreign (sub-) subsidiaries, in which the foreign (sub-) subsidiary involves was also summoned together with the parent company on several occasions.”

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whenever a subsidiary of a Dutch parent company may have caused damage.10 This is based not only in the conflict of laws rules under Dutch civil procedure law11—whereby the Dutch nationality of the parent company of a corporate group may be relevant enough to bring its foreign subsidiary before the Dutch judicial system—,12 but also on the figure of forum necessitatis,13 according to which a court may find to have jurisdiction over a case if there is an important risk of a denial of justice.14 Thus, in a sense, the domestic legal provisions of The Netherlands would allow its courts to have extraterritorial jurisdiction on different grounds, and become a potential forum to hear human rights claims against Dutch corporate groups.15 An interesting point exists in relation to the analysis of human rights violations of corporate actors. The Court notoriously stated that the Nigerian subsidiary could not be blamed for an active conduct, but for negligence, which could not be deemed to be “an infringement of a human right.”16 This position, however, may be dubious, given the agreed notion that corporations should take all available measures to prevent negative impacts on human rights, in order to comply with their responsibility to respect under the un Guiding Principles.17 While corporations do not have the same obligations or legal responsibilities as States in relation to human rights—who have a dual standard that imposes responsibility for actions or omissions—, it is clear that their failure to prevent damage (an omission itself) can potentially pose a threat to the full enjoyment of certain rights. Thus, just as a tort of negligence 10

However, the Court disagreed on following the standard set forth in Chandler regarding corporate veil piercing. Ibid., §4.29. 11 Notably, the Court stated: “However, the forum non conveniens restriction no longer plays any role in today’s international private law.” Ibid., §4.6. 12 Dutch Code of Civil Procedure, art. 7.1. 13 Dutch Code of Civil Procedure, art. 9(c). 14 See N. Jägers, K. Jesse & J. Verschuuren, ‘The Future of Corporate Liability for Extraterritorial Human Rights Abuses: The Dutch Case Against Shell’, ajil Unbound, 2014, p. e-39. 15 Ibid., p. e-40: “The wording of the judgment indicates that the district court’s decision has great relevance beyond this specific case. The judgment provides the opportunity for victims of corporate transnational environmental harms or human rights violations to sue a foreign subsidiary of a Dutch multinational corporation where a parent company might be held liable under the applicable foreign law…”. 16 Judgment, Friday Alfred Akpan et al. v. Royal Dutch Shell plc et al., Case C/09/337050/ ha za 09–1580 (The Hague District Court, 30 January 2013), §4.56. 17 Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, A/HRC/17/31 (21 March 2011), §11.

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gives rise to the responsibility of a private actor in the civil law realm for a damage it has caused, a lack of diligence that negatively affects the sphere of rights of an individual or group would also give rise to responsibility in the human rights realm, regardless of the public or private character of the perpetrator. The two aforementioned cases have in common that a corporate negligence was determined by the courts, which led to a relatively rare awarding of damages to the plaintiffs. Both of them are, to a certain extent, implicitly linked to the cause of human rights and to the effects that corporate activities may have in the sphere of fundamental rights of people that are close to their operations, either directly (such as in the employment relationship in Chandler) or indirectly (like in the livelihood of the plaintiff in Akpan). In spite of not using the terminology contained in the un Guiding Principles on Business and Human Rights, both cases contain seminal elements of the second pillar of the framework developed by John Ruggie, namely the human rights due diligence standard. For example, in Chandler the court considered that given the proximity between a parent company and its subsidiary and the fact that the parent company should have advised its subsidiary on the health risks posed by asbestos to the latter’s employees, it had a liability for a lack of due diligence. Such position is relatively similar to the wording of principle 13, which states that businesses should seek to prevent or mitigate human rights impacts (including on the rights to health and life) that are linked to them by their business relationships, such as in the case of Cape plc’s subsidiary. The same can be said of the Akpan case, where the court determined that a lack of due diligence in sealing an oil well existed, which could have been prevented if measures to prevent the sabotage of the pipelines (regular due diligence) or the damage to the human rights of stakeholders such as Akpan (human rights due diligence) were taken. This would be reflected in the same principle 13, which states that companies should avoid causing or contributing to adverse human rights impacts through their own activities. The precise effect of both judgments is the redress of negative impact of human rights, even though the vehicle to such conclusion came in the form of tort law and negligence.18 A different scenario and arguments were brought before the French judiciary, which in consequence led to a particularly different yet interesting

18

Cf. R. McCorquodale, ‘Waving Not Drowning: Kiobel Outside the United States’, American Journal of International Law, vol. 107, 2013, p. 851: “While the effects of the litigation may seem the same in some instances, this lack of legal expression diminishes the potential significance of the clear statement in the Guiding Principles that corporations (and not just states) may be liable for violating human rights.”

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approach. In the Jerusalem Tramway case,19 the Versailles Court of Appeals dismissed a claim brought against the French companies Alstom and Veolia, where the plaintiffs Association France-Palestine Solidarité and the Palestine Liberation Organization alleged the companies’ involvement in the construction of a railway between illegal Israeli settlements in Palestinian territory and of Israel’s own territory, which would be contrary to international humanitarian law and certain jus cogens norms, as well as to the companies codes of conduct and voluntary commitments of corporate social responsibility. The plaintiffs requested the Court of Appeals to declare the contract void for having an unlawful object—alleging it would be used to continue the occupation of the West Bank—, to prohibit its further execution, and to award compensation to the plaintiffs for the alleged violations of international law committed by the corporate defendants. The Versailles Court of Appeals, however, did not consider the claims to have merit, and thus dismissed the claim on different grounds. First, the court determined that corporate responsibility only stems from the agreements that companies voluntarily enter into;20 therefore, considering that corporations don’t have a recognized international legal personality, the court held that the invoked treaties were not opposable to them, given that they had not signed the treaties and that the obligations deriving from the conventions were not applicable to companies.21 Secondly, the Versailles Court considered that the international humanitarian norms invoked by the plaintiffs (the Geneva and The Hague Conventions and protocols) do not contain subjective rights—therefore not creating a cause of action for individuals—,22 and cannot be invoked against non-state subjects such as corporations.23 Finally, the appellate court considered that corporate social responsibility initiatives,

19 Judgment, Association France-Palestine Solidarité et al. v. Société Alstom Transport sa et al., Case No. 11/05331 (Cour d’appel de Versailles, 22 March 2013). 20 Ibid., p. 21. 21 Ibid., p. 23. 22 Ibid. (described as a vertical effect by the court.) However, see Sh. Weill, The Role of National Courts in Applying International Humanitarian Law, Oxford, Oxford University Press, 2014, p. 7, who describes the gradual development of an international rule of law concerning international humanitarian law, that is primarily advanced by the judicial enforcement of domestic courts. 23 Judgment, Association France-Palestine Solidarité et al. v. Société Alstom Transport sa et al., Case No. 11/05331 (Cour d’appel de Versailles, 22 March 2013), p. 23, described as a horizontal effect by the court.

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such as the Global Compact or the companies’ ethical codes, served only a  referential purpose and consequently were not legally binding upon corporations.24 In relation to the determination made by the court that companies lack an international legal personality, which would excuse their compliance with international obligations deriving from humanitarian conventions, it is clear that such a position reflects an antique notion that is inherently attached to international humanitarian law (as well as to general international law): that the laws of war (and of international relations in general) are directed and applicable to States only, as only them can (traditionally) entertain such actions. However, the fact that companies can positively or negatively affect human rights—and thus, some of the rights protected by international humanitarian norms25—is a well recognized notion in contemporary international law, and the general acceptance of the existence of a corporate responsibility to respect human rights should theoretically have inclined the scale towards a more open position by the French court.26 Furthermore, international humanitarian law—on which the claims were largely based—has traditionally covered not only States intervening in conflict, but also other non-state actors involved, determining standards and obligations that are applicable to conflict zones.27 An example is the Montreux

24 25

26

27

Ibid., p. 28. The recourse was rejected for inadmissibility by the Cour de cassation in July 2014. See e.g. R. Kolb, Ius in bello: Le droit international des conflits armés, Brussels, Bruylant, 2003, p. 178, explaining that Geneva Convention iv protects fundamental rights of civilians; M. Bettati, Droit humanitaire, Paris, Seuil, 2000, p. 22, explaining the appearance of a convergence between fundamental principles of both law regimes (international humanitarian law and international human rights law) that conform the core of non-derogable rights, and the mutual influence of both normative fields. See e.g. M. Devers, ‘La responsabilité civile des entreprises multinationales pour fait internationalement illicite’, in A. Peters et al. (dirs.), Les acteurs à l’ère du constitutionnalisme globale, Paris, Société de législation comparée, 2014, p. 180, arguing that some international soft law standards (such as recommendations from the un Human Rights Council) can be useful for domestic jurisdictions to evaluate and interpret the state of international law at a given time on a particular topic. See also D. Thürer, ‘International Humanitarian Law: Theory, Practice, Context’, Recueil des cours, vol. 338, Leiden, Martinus Nijhoff, 2009, on the corporate responsibilities under international law. See D. Thürer, op. cit. p. 229, detailing that the main criterion for being subject to international obligations is the participation of an actor, not its formal character.

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Document on Private Military and Security Companies,28 a recent initiative specifically targeting the conduct and actions of corporate actors, which has been supported by 51 states, including France. Thus, if the conduct of private military and security companies is considered to be covered by different international humanitarian law provisions29—a position that is rejected by the Versailles court based on the alleged inexistence of a customary rule that would ban corporate responsibility for its involvement in the commission of crimes against humanity, contrary to the consolidated and spread alignment of norms from different bodies at the international level recognizing a corporate responsibility to respect human rights—, it wouldn’t be illogical to consider that other corporations would share the same responsibility of respecting international humanitarian and human rights standards.30 Another important aspect highlighted by the French court is that international humanitarian norms allegedly don’t provide a cause of action to civilians;31 however, a few examples from other jurisdictions32 would seem to prove the opposite, regardless of the level of success—or impunity—resulting from those cases. 28

Montreux Document on Pertinent International Legal Obligations and Good Practices for States Related to Operations of Private Military and Security Companies During Armed Conflict, Montreux, 17 September 2008, available at http://www.icrc.org. 29 For example, §22 states: “pmscs are obliged to comply with international humanitarian law or human rights law imposed upon them by applicable national law…”. 30 Yet another interesting argument would find that the Versailles Court of Appeals could base its jurisdiction on the ‘Responsibility to Protect’ doctrine, according to which the international community of states should act to prevent the commission of genocide, ethnic cleansing, war crimes or crimes against humanity whenever a sovereign state is unwilling or unable to do so. In this light, it could be argued that the French court could at least partially protect the population in the Occupied Palestinian Territories through an injunction that would prevent the companies from continuing to conduct business in a context where human rights violations and breaches of humanitarian law that may amount to international crimes are taking place. While still a very early notion, see H. Cantú Rivera, ‘On the Responsibility to Protect and the Business & Human Rights Agenda’ in R. Barnes & V. Tzevelekos (eds.), Beyond Responsibility to Protect: Towards Responsible Use of International Law?, Antwerp, Intersentia, 2016 for an initial analysis of how corporate conduct and the responsibility to protect projects may overlap. 31 Judgment, Association France-Palestine Solidarité et al. v. Société Alstom Transport sa et al., Case No. 11/05331 (Cour d’appel de Versailles, 22 March 2013), p. 23. 32 Re ‘Agent Orange’ Product Liability Litigation, 373 F. Supp. 2d 7 (edny 2005), where the court held that corporations were not immune to allegations of war crimes; or the more recent and still ongoing Al Shimari et al. v. caci Premier Technology, Inc. et al., 13–2162 (4th Cir. 2014), dealing with torture by a corporate government contractor in the Abu Ghraib prison in a context of war. The main reason for the consideration of such claims by the

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To an important extent, however, it appears that most courts deciding cases based on international law would have a preference towards applying explicit and binding international norms or customary rules (lex lata), rather than soft law initiatives or implicit considerations (lege ferenda).33 While this decision is important to provide legal certainty to the parties of a litigation procedure, it forecloses the possibility that judiciaries take into consideration the development of new rules of international law (perhaps even of nascent customary rules), which in many cases would represent a contradiction to the actions, positions and commitments undertaken by the Executive branch of many countries in international fora. Despite this apparent contradiction, even the idea of a horizontal application of human rights that would be opposable to corporations continues to be a largely doctrinal development, given the general reluctance of domestic tribunals to apply human rights and humanitarian norms traditionally directed to States to non-state actors,34 with relatively few examples of Drittwirkung35 (some recent ones explained infra) in existence,36 which are crucially dependent on domestic law provisions. The two legal avenues through which European corporations have been brought before domestic courts for alleged violations of international law (and especially of human rights) show the diversity of methods available depending on the legal tradition of the corresponding forum. While one of the cases relied

33

34

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judiciary is the clear overlap between international human rights and humanitarian norms, which would open causes of action or jurisdictional statutes to claims based on such violations of international law. A. Herzberg, ‘Kiobel and Corporate Complicity—Running with the Pack’, ajil Unbound, 2014, p. e-42: “The courts [in North American and Europe] have expressed, in various ways, a reluctance to find an international rule of liability…”. R. McCorquodale, op. cit., p. 850: “In all of the litigation that has been undertaken outside the United States, none of the violations has been cast directly in human rights terms. Instead, a violation of a privacy right, a health right, or a labor right is presented as, for example, a claim in tort for negligence or a breach of contract.” See also Human Rights Committee, General Comment No. 31, CCPR/C/21/Rev.1/Add.13 (26 May 2004), §8. For a clear definition of the concept of Drittwirkung and on the idea of horizontal application of human rights law, see M. Karavias, Corporate Obligations Under International Law, Oxford, Oxford University Press, 2013, pp. 20 et ss. See e.g. H. Muir Watt, ‘Les enjeux de l’affaire Kiobel: le chaînon manquant dans la mise en oeuvre de la responsabilité des entreprises multinationales en droit international public et privé’, in Droit international privé (Année 2010–2012), Pedone, Paris, 2013, p. 237, where she explains that the responsibility of corporations is initially ‘filtered’ by state responsibility (who has an obligation to ensure the application and respect of international instruments within its jurisdiction), but that whenever a corporation commits an offense prohibited by domestic legislation, its responsibility can be compromised.

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purely on British tort law, another one provided remedies while relying on private international law and domestic provisions on civil procedure, effectively adjudicating an extraterritorial case while applying the lex loci delicti, and thus only providing an effective forum to bring the complaints at the place where the parent company was “at home.” A third case, argued on the basis of international humanitarian law, human rights and customary rules of international law, saw a domestic tribunal analyze the extent to which international law has developed to encompass the conduct of corporations within its reach, to find that—despite recent examples and even actions of its government on the contrary—no such notion exists under international law. What these examples show is that there is still an important need for guidance on issues related to corporate conduct and human rights, and that despite the diplomatic position of states in international fora, a relevant distance still exists between domestic adjudication and public policy. iii

Examples from Latin-American Jurisdictions: Cases from Ecuador and Mexico

Cases brought before the jurisdictions of developed economies, such as those in Europe or in the United States of America, have attracted a lot of attention because many of the corporations headquartered or incorporated therein have allegedly participated in gross human rights abuses abroad, mostly in developing countries. Taking advantage of the sometimes still developing rule of law in such countries and of the existent ‘race to the bottom’ among host states to attract foreign direct investment, some corporate actors have had important— negative and positive—impacts on the livelihoods of people.37 This is a particular common feature in Latin-America, where many transnational corpo­rations (including some headquartered in the region) participate in different sectors and industries in pursuit of their economic interests. This intense economic activity, particularly in the extractive sector but also on other fields such as telecommunications, has paved the way for interesting judicial decisions that may at least partially reflect the position of developing countries in relation to the respect of human rights by economic actors, and particularly corporations. It is important to note before analyzing some examples from Latin-American jurisdictions that most countries in the sub-continent share a 37

See generally O. De Schutter, J. Swinnen & J. Wouters (eds.), Foreign Direct Investment and Human Development, London, Routledge, 2013, for a very thorough review of how foreign direct investment may impact people and which problems and questions it raises.

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civil law tradition, which allows for a relatively similar use of legal provisions and procedures. However, the examples discussed in the next paragraphs reveal the different approaches taken by the governments in turn, which may reflect also their tendencies in favour of capitalism or social democracies. One of the most widely publicized cases to have taken place recently in Latin-America regarding corporate involvement in human rights violations and environmental damage is Aguinda et al. v. Chevron Corp.38 This case is based on the largely documented pollution of the Lago Agrio region in Ecuador by oil companies (initially Texaco, then Chevron, both working with the national oil company) and the profound and damaging effects of their activity in the livelihoods of the population inhabiting the region.39 After a two decades-long judicial battle, in November 2013 the Ecuadorian Supreme Court awarded damages to the plaintiffs for the amount of $9.5 billion u.s. dollars, constituting the largest compensation for an environmental case ever. However, such judicial decision—which is final and binding under Ecuadorian law—and its enforcement have been fought by the defendant, who has used different legal recourses to block the award. To date, contradicting resolutions between a partial award from the Permanent Court of Arbitration,40 a u.s. judicial opinion deriving from a racketeering lawsuit41 in favour of Chevron that would block the enforcement of the Ecuadorian judgment, and the Ecuadorian’s Supreme Court own judgment have contributed to create an interesting and paradigmatic case study that shows the power of transnational corporations to evade accountability for their participation, either alone or in collaboration with others, in important human rights violations end environmental degradation. While this case is still ongoing, other developments that are a direct reference to business and human rights have taken place in the judicial sphere of Mexico, based on international and domestic legal provisions

38 Judgment, María Aguinda et al. v. Chevron Corp., Case No. 2003–0002 (Sala Única de la Corte Provincial de Justicia de Sucumbíos, 14 February 2011). 39 An interesting article providing a clear narrative of the case can be seen in P.M. Barrett, ‘Amazon Crusader. Chevron Pest. Fraud?, Bloomberg Businessweek, 9 March 2011, available at http://www.businessweek.com/magazine/content/11_12/b4220056636512.htm See also iachr, Report on the Situation of Human Rights in Ecuador, OEA/Ser.L/V/II.96 (24 April 1997), especially Chapter viii on the effects of development activities in the enjoyment of human rights. 40 Partial Award, Chevron Co. et al. v. The Republic of Ecuador, Case No. 2009–23 (Permanent Court of Arbitration, 17 September 2013). 41 Opinion, Chevron Corp. v. Steven Donziger, et al., Case No. 11 Civ. 0691 (District Court for the Southern District of New York, 4 March 2014).

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and their direct—or horizontal—application to non-traditional subjects of international law. Two recent cases that were reviewed by the Mexican Supreme Court dealt with the obligation of non-state actors (and particularly of companies) to comply with human rights norms and to refrain from infringing on them. In the first case, two plaintiffs brought an amparo42 claim against a judicial decision in a civil case absolving a real estate development company from nullifying a purchase agreement and paying compensation for its non-compliance with the human right to adequate housing. In the civil claim and its subsequent appeals, the main argument was that the company failed to respect the specific requirements of the human right to an adequate standard of living, and in particular of its housing dimension, developed in Article 11.1 of the International Covenant on Economic, Social and Cultural Rights, as well as through its official interpretation by the un Committee on Economic, Social and Cultural Rights in General Comment No. 4,43 giving rise to a human rights violation that would nullify the contract. In its analysis of the claim, the Supreme Court stated that the obligation to implement adequate measures to comply with international and national human rights standards extended to the private sector participating in the development of real estate, and was not exclusive of state organs.44 Furthermore, the Supreme Court based its argument of human rights compliance by non-state actors on the “basic expectation of society that corporations will abide by the applicable standards.”45 The Court also made reference to the state duty to protect from human rights violations by corporations, and to 42 The amparo procedure is used to challenge the conformity of a judgment with constitutional provisions, normally before the federal jurisdiction; in this case, an amparo directo en revisión is a procedure whereby the Supreme Court may exceptionally and discretionally attract a case for review where the direct interpretation of a constitutional provision or human right is the subject matter. It is a constitutional procedure originating in the 1850s under Mexican constitutional law, which was later adopted by other Latin-American jurisdictions and by Spain. For a recent review of the amparo procedure under Mexican law, taking into consideration the important constitutional reforms of 2011 on this instrument, see E. Ferrer Mac-Gregor & R. Sánchez Gil, ‘El amparo mexicano del siglo xxi: Notas sobre su nuevo régimen constitucional y legal’, Anuario de Derecho Constitucional Latinoamericano, 2013. 43 Committee on Economic, Social and Cultural Rights, General Comment No. 4: The right to adequate housing (art. 11(1) of the Covenant), un Doc. E/1992/23 (01 January 1992). 44 Judgment, Amparo Directo en Revisión No. 3516/2013 (First Chamber of the Supreme Court, 22 January 2014), pp. 49–50. 45 Ibid., p. 53.

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the latter’s responsibility to respect human rights,46 while pointing out that compliance with human rights was not subject to the will of the parties for being a public policy exception.47 Thus, while not directly quoting the standards developed at the United Nations by John Ruggie in his role as Special Representative on business and human rights, the Supreme Court acknowledged that such basic social expectations on corporate conduct would require them to comply with the law and to respect human rights.48 An important development in Mexican domestic law was attained in 2013 when a new Amparo Act was passed by Congress, according to which a private person would be deemed as a “responsible authority whenever it performs acts equivalent to those of an authority, that affect rights as understood in this section, and whose functions are determined by a general norm.”49 In this sense, the Amparo Act states that any person that through its actions or omissions affects the rights of a third party can be considered a responsible authority, and thus subject to be brought before the courts through an amparo proceeding, to stop an irreparable damage to a human right that may be affected by its actions. In this line of thought, a second case reviewed by the Mexican Supreme Court was a complaint appeal (recurso de queja)50 whereby an indigenous community (the Hñähñu) brought a complaint against Telmex (the leading ict service provider in the country) and the Ministry of Communications and Transport, for the violation of the rights to freedom of expression, access to information, equality before the law and the right to work,51 as determined by the American Convention on Human Rights and its Additional Protocol. The plaintiffs indicated that the company had failed to ensure the continuous and permanent provision of the telephone service, while the state had failed to 46 47 48

Ibid., p. 37. Ibid., p. 54. Curiously, this position has been particularly criticized by human rights scholars, who see it as not providing enough basis for the legalization of a human rights standard applicable to corporations; see e.g. S. Deva & D. Bilchitz (eds.), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect?, Cambridge, Cambridge University Press, 2013. However, this case, while an isolated example, reflects how it may not be a baseless provision. 49 Ley de Amparo, art. 5 fr. ii. 50 A recurso de queja is an appeal available to the parties of an amparo trial, whereby the party that was affected by the decision of the court to review an amparo can file an appeal on the basis that—inter alia—the decision was inappropriate. 51 Judgment, Recurso de Queja No. 23/2014 (Second Chamber of the Supreme Court, 26 March 2014).

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protect and ensure their human rights for a lack of diligent supervision on the provision of the telecommunications services that were licensed to the private corporation. Through the complaint appeal submitted to the Supreme Court, Telmex was fighting the decision of a federal court to consider it as an authority; however, the Supreme Court considered that since the company was in charge of the telecommunications public service (deemed as a strategic field by the Constitution, which could be licensed to private companies), it could not abruptly interrupt the service provision since that action would affect the right to an adequate standard of living, unless a constitutional exception explicitly allowed it.52 Furthermore, it founded its decision in the case law of the Inter-American Court of Human Rights, particularly with regard to the importance telecommunications have within a democracy for the exercise of the right to freedom of opinion and expression. The Supreme Court dismissed the complaint appeal and determined that the company was performing an “act of authority”, thus having the obligation to stop the human rights violation and remedy the damages inflicted upon the plaintiffs. Two interesting developments can be observed from these cases, both of a horizontal and vertical nature: corporations have a legal responsibility to respect human rights within their business agreements, not just as a basic expectation of society, but as a matter of public policy; this implies that human rights are to be observed whenever a contract is concluded by two parties, regardless of the horizontal nature of the business relationship. Secondly, whenever a corporation impacts on human rights through its actions or omissions regardless of its private nature, it can be held responsible for the human rights violation in addition to the state organ in charge of ensuring the protection of human rights. These examples show how Latin-American jurisdictions are dealing with the issue of corporate accountability for human rights impacts, and how, through the use of different doctrines and procedures, they are evaluating the human rights performance of corporations. The Ecuadorian case shows a negative extreme, where a powerful transnational company may elusively escape judgment in one jurisdiction and use its resources to fight other jurisdictional attempts to hold it accountable. This situation is, without a doubt, one of the main reasons why Ecuador is actively pursuing a new international binding

52 Judgment, Recurso de Queja No. 23/2014 (Second Chamber of the Supreme Court, 26 March 2014), p. 11.

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agreement on business and human rights53 that imposes direct international obligations upon corporations. However, the Mexican cases show the positive side of the equation, where domestic courts in developing countries may use international and domestic law to ensure respect of the rule of law and human rights by corporate actors. Of course, these examples only offer a limited view of the wide range of problems and obstacles that developing countries may face when trying to make a company abide by international human rights law and its own domestic standards; however, it also provides evidence that host states to transnational corporations have an equally important role to play in the search of a solution to the issue of human rights and corporate accountability. iv

Concluding Thoughts

Claims against corporations for human rights abuses have started to move away from us courts, whose jurisdiction on foreign-cubed cases was severely limited by the 2013 Kiobel opinion. Several cases have been brought in different European countries where corporations are headquartered, to try to hold corporations accountable in their home States for their involvement and participation in human rights violations abroad. Given the complexity of these transnational disputes and an insufficient (or perhaps unclear) guidance from international law on the issue of extraterritorial jurisdiction, it is likely that claims will be brought more often before courts in countries where transnational corporations are ‘at home’. In addition, there is a growing recognition of the responsibility of developed States to regulate the extraterritorial activities of its companies and to provide remedies for victims of human rights violations, which may incline the scale towards a more ‘balanced’ distribution of judicial claims against corporations.54 An important difference exists in relation to judicial accountability if the legal system has a civil law or common law tradition. In cases under common law systems, judges usually have a higher level of discretion to adjudicate and to consider different doctrines and exceptions that have either been developed by the judiciary or suggested by other branches of government. On the other hand, from the cases reviewed in this article, it seems plausible that courts in 53

54

Human Rights Council, Elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights, A/HRC/RES/26/9 (26 June 2014). This would be the opposite to the large concentration of claims brought in us courts under the Alien Tort Statute.

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civil law systems have less discretion to adjudicate on grounds other than the direct interpretation and confrontation of the arguments and facts of a case to a legal rule. In my opinion, the latter approach can provide more legal certainty to the parties of litigation throughout the judicial process, which is of a singular importance for both corporations and victims of human rights abuses.55 Whether corporate accountability for human rights abuses is on the horizon will depend largely on the arguments submitted by litigating parties, and the commitment of the state—including its judicial system—to uphold and enforce human rights within its jurisdiction. While domestic courts may not be particularly used to adjudicate matters involving questions of international law on a regular basis, the growing recognition that corporations can affect human rights both positively and negatively will be an important asset for the defense of human values and dignity, therefore imposing upon domestic courts a larger role to play in the field of business and human rights.

55

On this point, see E. Decaux, ‘Le projet de l’onu sur la responsabilité des entreprises transnationales’ in I. Daugareilh (dir.), Responsabilité sociale de l’entreprise transnationale et globalization de l’économie, Brussels, Bruylant, 2010.

Part 8 Postscript

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chapter 33

The Judicial and Constitutional Challenges of Legal Globalisation Miguel Poiares Maduro

The Emergence of the “Travelling” Judge and the Perils of Legal Jetlag

Today’s legal challenges often require judges to “travel” between different legal orders without leaving their own, provoking, in some instances, a sort of legal jetlag. Such challenges are a product of legal globalization, which, in turn, is a product of economic, social and cultural globalisation. One of the most interesting aspects of legal globalisation is the judicialisation of international relations. One can, perhaps, define judicialisation as the adjudication of litigation arising from transnational relations by judicial or quasijudicial bodies in the light of procedural and substantive rules.1 We can identify four different sets of phenomena in judicial globalisation: • The increase in international judicial or quasijudicial bodies (besides the International Court of Justice we now have courts such as the International criminal Court, the Appellate Body and Panels of the wto, the “European Courts”—sometimes no longer described as international courts, the InterAmerican Court of Human Rights, and many other judicial bodies of regional organisations). • The extraterritoriality of national judicial systems, which, increasingly, assume jurisdiction in deciding transnational and international cases. • The increased submission to arbitration mechanisms of international conflicts between States, between these and private persons and between the latter themselves.2 1 For a more developed presentation see: A. Stone Sweet “The New gatt: Dispute Resolution and the Judicialization of the Trade Regime”, in M. Volcansek (ed.), Law Above Nations: Supranational Courts and the Legalization of Politics (Florida, Florida University Press, 1997); M. Shapiro /A. Stone Sweet, On Law, Politics and Judicialization (Oxford, Oxford University Press, 2002). 2 Among others, the Common Court of Justice and Arbitration of the Organization for the Harmonization of Corporate Law and the Judicial Tribunal of the Organization of Arab Petroleum-Exporting Countries. © koninklijke brill nv, leiden, ���6 | doi 10.1163/9789004298712_034

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• The emergence of international networks of judges, which institute more less formal mechanisms of cooperation and coordination.3 As said, this judicialisation corresponds to a broader process of globalisation of the law expressed in many different ways, that go from informal processes of legal harmonization that generate a common legal culture4 to the globalisation of law firms and legal education. These processes have created powerful legal, social and economic dilemmas. They challenge many of the traditional paradigms of the law, including the State’s legal monopoly, the autonomy of national political communities and the traditional forms of participation and representation. They require profound changes in the way in which we think and teach the law. They also create or demand a new kind of judge both at the national and international level. A judge, that even when deciding in purely domestic cases, often has to be aware of the transnational impact of its decisions. Legal globalization promotes the interdependence of different national and international legal orders, and places judges in the difficult position of being both protectors of their own legal order and translators and arbitrators among different legal orders. While performing these roles judges often operate supported by incomplete legal orders and are called to adjudicate in areas subject to the competition of different legal systems. Legal Globalisation and Counterpunctual Law I often describe this reality as one of contrapunctual law. Couterpoint is the musical method of harmonising different melodies that are not in a hierarchical relationship among them. The discovery that different melodies could be heard at the same time in an harmonic manner was one of the greatest developments in musical history and greatly enhanced the pleasure and art of music. In Law we also have to learn how to manage the non-hierarchical relationship between different legal orders and institutions and to discover how to gain from the diversity and choices that offer us without generating conflicts that ultimately will destroy those legal orders and the values they sustain. For this to be possible several conditions have to be satisfied. The first condition is that all legal orders must mutually recognize each other and their right to “self-determination”. Therefore, the globalisation of the 3 Anne-Marie Slaughter, A Global Community of Courts (2003) 44 Harvard International Law Review, 191. 4 See, as example, Bruce Ackerman, The Rise of World Constitutionalism, Virginia Law Review, 83 (1997), 771–797.

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law, which has been described as creating a form of legal and constitutional pluralism, imposes the recognition and adjustment of each legal order to the plurality of equally legitimated claims of authority made by other legal orders. This has profound consequences for when judges (even domestic ones) act as transnational judges, having to balance the claims of these competing legal orders. A second condition relates to the way in which the integrity and coherence of the Law can be secured in such a context of competing legal orders and sources of law claiming jurisdiction over a particular issue. Such claims of jurisdiction over transnational situations must be accompanied by a commitment to take into account the potential effects of the decision of a particular legal order in other legal orders. In reality, the Global law arising from the regulation of transnational situations ends up being a product of the interaction between different national and international legal orders. In this context, any judicial body (national or international) must reason and justify its decisions in the context of the global legal order in which they are impacting. However, for this to be possible and in order to satisfy the requirement of equality in the competing determinations of the law, any judicial decision must be argued in “universal” terms. Such decision must be grounded in a doctrine that could be applied by any other court in a similar situation, including, in this context, the courts of a different legal order. This prevents courts from deciding transnational legal cases in a purely “domestic” manner (thereby excluding the view point of some of the other affected interests). It also engages the courts from different jurisdictions in the forms of legal conversation that Carl Baudenbacher has so often described. Such an approach will also decrease the risks of fragmentation of this emerging “Global legal order”. It is possible to have a coherent legal order in a context of competing determinations of the law so long as all the participants share the same commitment to a coherent legal order and adjust their competing claims in accordance with their commitment to engage in a coherent construction of a common legal order. This also requires their decisions to be deliberated and justified so as to fit with the decisions of the other participants and, in that way, safeguard the coherence of the legal order. But such a globalised context also requires a rethinking of traditional legal methodologies. In a context of competing authorities in determining what the law is institutional choice becomes even more crucial. Such a legal pluralist world multiplies the forums for conflict resolution and the arguments and institutions to which one can appeal to promote a redefinition of a certain composition of interests. Material definitions of the scope of application of different legal systems will not work in such a context.

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The only way to define the borders of the different legal systems and promote an appropriate allocation of legal resources (judicial and otherwise) among them is by reinforcing the mutual understanding of their respective virtues and malfunctions and their conscience that they are only one among a variety of institutional alternatives to address transnational situations. This means that each legal order and their respective institutions (including courts) must be fully aware of the institutional choices involved in any request for their intervention with regard to transnational situations. However, as the work of Neil Komesar has demonstrated, institutional choices are often the product of poor institutional analysis.5 The importance of institutional choices in a context of legal pluralism only serves to reinforce the need to do comparative institutional analysis to guide courts and other actors in making those choices. In this way, contrapunctual law also requires the adoption by legal actors of a new legal methodology along the lines of the comparative institutional analysis that has been originally developed by Neil Komesar.6 The debates on what kind of legal model (in particular if and what kind of constitutional model) ought to correspond to legal globalisation give us a good example of the challenges involved in this area and of the importance of taking institutional analysis seriously in the law.

Legal Globalisation and the Model of Global Law: Can There be Global Constitutionalism?

Normative conceptions of global governance tend to reflect very different philosophical and even ideological perspectives on the project of globalisation itself. Law is also either seen as an instrument of globalisation or a barrier to it. The current debate on the possibility of constitutionalism at the global level, particularly in the domain of international trade law, encapsulates many of these different perspectives. Next, I would like to discuss some of these alternative views on global constitutionalism and the role of law in their context. 5 See Neil Komesar, Imperfect Alternatives – Choosing Institutions in Law, Economics and Public Policy (Chicago and London: Chicago University Press, 1994). 6 Unfortunately, we do not have the space to develop this analysis in here. For an in depth analysis see: Neil Komesar, Law’s Limits: Rule of Law and the Supply and Demand of Rights (Cambridge University Press, 2001). See also: Maduro, Miguel Poiares We The Court: The European Court of Justice and the European Economic Constitution (Oxford, Hart Publishing, 1998).

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Rights Constitutionalism Petersmann speaks of a developing international constitutionalism the contours of which are still unclear.7 As in regional forms of integration, trade law is conceived as the engine of global integration and its emerging constitutionalism.8 The World Trade Organization and the agreements derived from the Uruguay Round are conceived as the primary tool for such global constitutionalism. To these he has further added the other international human rights documents.9 He argues for a “rightsbased” constitutional development from the ground up, through individual litigants and courts (such as happen in the European Union).10 Petersmann establishes a direct legitimating link between individuals and the new forms of global governance, mainly those based on human rights and international trade. The role of international trade law is that of guaranteeing the freedom of individuals in the international arena so that they can fully enjoy their personal autonomy. The way to promote global constitutionalism is by extending the scope and application of international trade law, human rights documents and disputesettlement mechanisms. For Petersman there is an emerging process of global constitutionalism where democracies will operate “in a constitutional framework of national and international guarantees of freedom, nondiscrimination, rule of law and institutional ‘checks and balances’”.11 This vision of Petersmann, shared by others, transfers to the global arena Hayek’s12 and the ordo-liberals conception of constitutionalism as a constraint on public power. A conception that has also influenced the discourse of European constitutionalism.13 Under this view, international human rights and international trade law are not in opposition but, on the contrary, in the words of another author ‘they are topologically similar: (b)oth international trade law and international human rights are largely deregulatory—they 7

8 9

10 11 12 13

Ernst-Ulrich Petersmann, ‘How to Reform the un System? Constitutionalism, International Law and International Organizations’, 10 Leiden Journal of International Law (1997) 421, at 463. Ibidem at 445. Ernst-Ulrich Petersmann, Time for a United Nations «Global Compact» for Integrating Human Rights into the Law of Worldwide Organizations: Lessons from European Integration, European Journal of International Law 13 (2002) 621–650. Op. cit., at 423. Op. cit., at 447 and 448. Friedrich A. Hayek, The Road to Serfdom, 50th Anniversary edn., Intro by Milton Friedman (Illinois University of Chicago press, 1994). Miguel Poiares Maduro, We The Court: The European Court of Justice and the European Economic Constitution (Oxford, Hart Publishing, 1998).

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declare what the State should not do. In each regime, the problem to be solved is the overbearing State which wants to control voluntary activity.’14 But, of course, this entails a particular notion of both human rights and international trade law which is not consensual.15 The content of human rights is not undisputed and they may also require strong government intervention. In the same way, international trade law may be developed my enacting international regulatory standards to which all economic operators would have to conform instead of focusing on the liberalisation of trade through the elimination of the different regulatory standards to which economic operators have to comply with. As a consequence, the relevant question becomes whether the current processes of global governance hold the necessary legitimacy to enforce a particular conception of human rights or international trade.16 The focus of such form of global constitutionalism is on a notion of constitutionalism based nondiscrimination, individual rights (mainly economic rights) and dispute-settlement mechanisms. The expectation is that these instances will develop into a set of individual constitutional rights protected at  the global level from any form of power. The dynamics of international trade will fuel the development of an international rule of law through these economic rights and dispute-settlement mechanisms. Such dynamics will result however in a limited conception of the ideals of constitutionalism. The fundamental idea is that of constitutionalism as limited government. The fundamental fear is that of the many. The fundamental suspicion lies over the political process. In reality, behind such conception lies a deep distrust over the political process and the way it organises and exercises power. However, the alternative institutions to which power is transferred through general rules of a higher legal rank, embodied in such a particular set of human rights, are generally assumed in a an idealised form. Those institutions tend to be either the courts or the market. But, as the analysis of the paradoxes and 14 15

16

Steve Charnovitz, The Globalization of Economic Human Rights, 25 Brooklyn Journal of International Law 1999, 113. See the Petersmann-Alston debate (see E.U Petersmann, Time for a United Nations «Global Compact» for Integrating Human Rights into the Law of Worldwide Organizations: Lessons from European Integration, European Journal of International Law (2002), 621– 650; P.H. Alston, Resisting the Merger and Acquisition of Human Rights by Trade law: A Reply to Petersmann, ejil 13 (2002), 815–844; and Petersmann responding, Taking Human Dignity, Poverty and Empowerment of Individuals More Serioulsly: Rejoinder to Alston, 13 ejil (2002), 845–851, resumed in Elisabeth Burgi/Thomas Cottier/Joost Pauwelyn (eds.), Human Rights and International Trade (Oxford, oup, 2005)). Pettersmann has argued that his vision includes the protection of social and other human rights but this is contested; see the Pertersmann-Alston debate, cited.

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tensions of constitutionalism has hopefully highlighted, such institutions are themselves subject to other forms of constitutional suspicion and potential malfunctions. Political Constitutionalism: The Cosmopolitan View The other Kantian and liberal trend is that which focus on the ideal of a cosmopolis.17 Here the ambition is greater than in the previous case. The ambition is that of creating a global civil society that can reconstitute at that global level the political contract of the States (and not between the States). The existence of a global political community would make it possible to have democracy at that level. Such an ambition is supported on a liberal normative claim to higher inclusion and to bring down the national borders that restrict a full expression of the ideal of a society of free and equal individuals. In this light, the processes of global governance become a welcome scenario from which to build this global democracy. The proposals on how to do it vary18 but they have both bottom-up elements (for example, promoting the creation of transnational political action) and topdown elements (promoting the democratic reform of international organizations such as the un). The first problem with such vision is how difficult it is to transform it into a viable programme for action. This result’s not only in a pragmatic critique but also in a normative one: the gap between the basis for the legitimacy claim (the ideal of higher inclusion) and its expression on global governance is such that the theory may serve to legitimate nondemocratic processes. But there is a broader problem with this theory that transcends its viability problem. It is a theory that, again, focuses on a limited perspective of constitutionalism. It ignores that the problem with larger political communities and constitutionalism is not simply a problem of how difficult it is to achieve them. It is also a problem that regards the balance between scope and intensity of participation that I have mentioned above. The larger the political community the more inclusive it will be. But the more inclusive it is the lower the importance and relative weight of each individual participant and, with it, the higher it is also the risk of less individual autonomy. Smaller jurisdictions exist not only because large ones are not possible. They exist because, in some instances,

17

See the different variants in Danilo Zolo, Cosmopolis: Prospects for World Government (Cambridge Policy Press, 1997). 18 See David Held, Democracy and the Global-Order – From the State to Cosmopolitan Governance (Cambridge Polity Press, 1995) and Richard Falk, Revitalizing International Law (Anels, Iowa State University Press, 1989).

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they provide for better participation and allow for greater differentiation and individual autonomy.19 Procedural Constitutionalism: Alternative Deliberative Processes Here the focus is on overcoming the challenge to the legitimacy of global governance by focusing on the quality of the deliberative processes adopted at the global level: they should be more inclusive of civil society (ongs participation etc.); they should promote access to the deliberative process; they should adopt higher standards than the State regarding transparency and access to information. The legitimacy generated by these alternative forms of participation from those of the classic representative model of the State would provide global governance with its value added vis a vis States and their forms of constitutionalism. The basic shortcoming pointed to such visions is that the legitimacy that they promote does not appear to be sufficient to overcome the more traditional democratic legitimacy of the State. It may be true that they furnish global governance with some democratic insights but What happens when, as increasingly is the case, the exercises of power by the processes of global governance conflict with those democratically determined by a State? But there are also problems regarding the idealised assumptions of deliberative proc­ esses made by such theories. In some cases, more access to the decision-­making processes and higher transparency may not solve but aggravate problems of participation. Such deliberative views tend to overlook the simple fact that participation is dependent on both the costs of participation and its benefits. If the individual benefits are low because quite disseminated (as it is often the case with dispersed groups and disseminated interests) then easier access and higher transparency may simple make the decision-making processes even more susceptible to capture by concentrated interests. It will be the latter (due to their much higher stakes) to make predominant use of that easier access and higher transparency. In reality, in some cases, the move to a higher jurisdiction, such as some process of global governance, may improve constitutional ideals precisely because such process is less accessible and therefore it insulates the political process from the influence of concentrated interests. Again, no limited conception of constitutionalism will serve us. The Rejection of Global Constitutionalism: The State View A first argument against global constitutionalism can be encapsulated in a slogan: “small is better”. The presumption is that small communities work better 19

They may also give raise to opposite fears but that is something I will discuss below.

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in processing the different affected interests. Transaction and information costs are lower, participation viable, more intense and more effective and with that also cooperation is easier. There is even, in some, a certain ideal view of small communities of deliberation where rational discourse is fully possible, the different perspectives are taken into account, and the decisions are often achieved through consensus. In some cases, the imaginary is not based on the State but on smaller communities but it, naturally, servers to criticise even larger jurisdictions. Of course, the dangers of exclusion and tyranny involved in small communities are also often acknowledge but States are assumed has having dominated those risks and, as a consequence, global governance is a step too far from the original ideal of small communities. There is also another common perception of democracy linked to this: that power should be as close as possible to the people. By moving power to a larger jurisdiction we are moving it further away from them with all its perceived negative consequences. As it moves from the city to the world, democracy appears to lose its quality and, in some sense, it is almost as if its great ambition (to include all) also becomes its greatest handicap. Again we have a limited view of constitutionalism: small is not always better. And that is the case because of the exclusionary features of small jurisdictions and the frequent externalities of their decisions (lower inclusion) but also because, in other instances, they may be particularly prone to majoritarian bias (a minority may be easy to identify and insulate from the rest of the community). Another aspect that can be found, in a more or less clear fashion, underlying some views opposing global constitutionalism to is the normative assumption that it cannot (and not simply that it currently does not) secure the necessary conditions of political loyalty. The latter would require some form of ethno, cultural or historical identity and not simply civic commitment. In this light, constitutionalism is not a producer of values but instead produced by them. It does not form a community of discourse for values deliberation but it embodies, instead, the values of a preexistent community. This is a thicker communitarian view. This view is different from the above in that the latter does not require such preexistent community of values. It simply argues that democracy works better in smaller jurisdictions. This is a view of constitutionalism that is also in opposition with the view of constitutionalism argued above that I dispense myself from repeating. There is, however, a stronger argument in favour of the State as the single form of constitutionalism and, therefore, as constituting both the limit and the single form of legitimacy for global governance. It departs from the absence in the global society of some of the characteristics of national constitutions (such

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as the lack of an underlying political community that I have noted above). Koskenniemi has argued that, in spite of the generalized international agreement on a human rights discourse, the lack of a true international consensus on the number and content of human rights entails that these cannot form the basis for an alternative source of legitimacy of a new international social order.20 For this author, the best form to prevent an authoritarian definition of what those rights and other principles of international law are is the intermediation of the State ‘because its formalbureaucratic rationality provides a safeguard against the totalitarianism inherent in a commitment to substantive values, which forces those values on people not sharing them’.21 Following this view, the only legitimate form of global governance would be that limited to cooperation and institutionalised debate among States. They would remain the single source of the international society.22 There are two problems in this: first, it ignores the reality that, as the same author recognises, international organisations more than simply enforcing preexisting agreements, establish and define priorities and policies.23 Even if we could still say that many of such priorities and policies are defined by deliberation where States representatives participate the question still arise on what kind of regime should govern those deliberations once they become an independent form of power (constitutionalism or traditional international law?); second, it makes a too broader claim of constitutional legitimacy for the State. As I will argue in more detail below Koskenniemi may be right if he is simply noting a presumption in favour of national constitutional processes but that presumption does not have to be absolute and there are even instances where a form of global constitutionalism can be legitimate precisely because of the role it plays in improving national constitutional processes. The Structural Bias View A final perspective over global governance notes its dangers not by opposing it to the State but because of the particular character of the constitutionalism 20

21 22 23

Martti Koskenniemi, The Future of Statehood, 32 Harvard International Law Journal 1991, 397. For example, at 399: «The protection of human rights, however, cannot form a meaningful basis for social order. If we are to define our polity in terms of human rights, we must ascertain the number and content of such rights». Ibidem, at 407. People still disagree about the political good. In normal circumstances, states still provide the means to direct substantive disagreement into institutionalised debate. Ibidem, at 410. Ibidem, at 403.

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that global governance is seen as embodying. Global governance is conceived, for example, as determining not only a loss of State control but of political control in general. In this perspective, globalisation is presented as a more or less atomised form of power at the global level whose processes reflect a particular set of interests. It is not globalisation or global constitutionalism that is at stake but the particular set of values that it currently embodies. Global governance is illegitimate not because of its global character but because of its structural bias. Its processes are seen, at best, as empowering the market at the expense of the political processes, at worst, as empowering particular economic interests at the expense of the general community. In some cases, this is conceived as the product of a decentralised form of power.24 In others, it is even traced back to a centralised authoritarian imposition of one power over all the others. Concepts of international trade, for example, are seen as embedding particular moral and societal visions. This is criticised not only because it promotes what is seen as an illegitimate imposition of particular contestable notions of societal values on all political communities but also because that application often entail the transposition of those values to totally different contexts without taking into account the particularities of those contexts.25 Moreover, it is also the case that those values are often exported in an ideal form that does not even correspond to the reality of their application in their home systems.26 These visions are more difficult to criticise, in the context of this paper, because they tend to be self-referential and to challenge many of the assumptions of constitutionalism with which I have worked. In some cases they deny the legitimacy of the outcomes of democratic deliberation because they deny that the conditions for such democratic deliberation can be fulfilled by current societies. In some other cases they deny broadly the potential for rational deliberation. Let me therefore be simple: if they are simply noting that current constitutional forms do not provide a full realisation of constitutional ideals they are right. As I have stated, the nature of constitutionalism is such that it never provides a perfect reflection of all the involved interests and their intensity. It can only provide for approximations. Theories of structural bias 24 Michael Hardt/Antonio Negri, Empire (Mass., Harvard University Press, 2001). 25 See Boaventura de Sousa Santos, Law and Counter-hegemonic Globalization: Toward a Cosmopolitan Legality (co-edited with Cezar Rodriguez Gavarito) (Cambridge University Press, 2005). 26 See David Kennedy, When Renewal Repeats Thinking Against the Box, 32, n.y.u.j. Int’l L.&Pol. 335 (2000).

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can be useful in pointing to some constitutional malfunctions in the current institutions but that tell us nothing in terms of a normative program for the pursuit of constitutionalism and democracy. First, these theories are often short in terms of putting forward institutional alternatives. Second, even if those institutional alternatives where advanced we would still have to review whether they would not suffer from even more serious constitutional malfunctions. The problem with all these different theories is that they adopt a single in­sti­ tutional perspective27 or, perhaps better in the present context, a single con­ stitutional viewpoint. Those that argue for a rights constitutionalism are, in effect, trusting the definition of those rights to either the market (economic competition under free trade and nondiscrimination) or international courts. They distrust States and highlight the potential malfunctions in their political and judicial proc­ esses. But they forget the potential malfunctions in the transnational institutions which they empower. Their analysis of the latter normally takes place in a costless transaction world, contrary to their view of the former, normally assessed in real world contexts. Those that argue for cosmopolitan perspectives suffer from a similar shortcoming. They stress the gains in inclusion generated by democratic global institutions. But ignore the many democratic malfunctions that arise in the context of larger jurisdictions of participation. Champions of the State and its sovereign powers also adopt a single institutional perspective. They highlight the democratic deficiencies of global processes but ignore many of the current constitutional malfunctions of the State both in terms of inclusion of outside interests and participation of certain domestic interests. The same could be said of the sophisticated deliberative theories. They assume that those perfect deliberative conditions are easy to establish through the right procedures but ignore that in massive and complex societies of high transaction and information costs those procedures may actually increase some of the traditional political malfunctions. As discussed above, it is not even true that we can establish higher transparency and access to the political process and information as generalised principles of constitutional law to be applicable in all cases. So much for civil society as a solution for our problems. The higher participation of the so-called actors of civil society may, in some instances, be part of the solution but it may also be part of the problem. That depends on the specific context and the available institutional alternatives. This is not to say that these 27 See Neil Komesar, Imperfect Alternatives, Choosing Institutions in law, Economics and Public Policy (Illinois, University of Chicago Press, 1997).

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theories have no normative value. On the contrary, they highlight the potential democratic and constitutional value of the different institutional alternatives. But, in doing so, they in effect prove that, as Neil Komesar as recently pointed out,28 in a costless transaction world, all these institutions would provide perfect participation. In the market, people would freely express their preferences through what they buy or in what jurisdiction they can decide to live. The aggregation of all the voluntary market transactions would bring about the most democratic decision (that most preferred by either the higher number of people or by the higher intensity of their different preferences). In States, national political processes would have no problem in collecting the necessary information to aggregate collective preferences, expressed according to the intensity of the stakes of the different affected interests (whose full participation was assured by the absence of information and transaction costs). Those States could latter fully coordinate their preferences with those of all other States in a costless transaction world of international relations. But in such a world, the same could be done by international organisations, capable of collecting all the necessary information and reflect the interests of all participating States. In such costless transaction world, international organisations could even take localised decisions because they would have no problem in measuring the intensity of the different interests to design the appropriate localised decisions and then balance them with the benefits of possible harmonisation. Of course, such localised decisions could also be left to localised deliberative processes since, in such a costless transaction world, they could perfectly reflect all the local interests and internalise outside costs. To sum up: in a world without transaction and information costs it would not matter what institutional choice one would make in the international order (absent redistributive goals). The problem is that we do not live in such a world and therefore any constitutional proposal that compares, on the one hand, a certain constitutional malfunction, detected in “reallife” circumstances, and, on the other hand, a certain constitutional ideal model, conceived in a world without transaction and information costs, may be insightful but not suitable.

In Search of a Constitutional Framework for Legal Globalisation

I can now to move into briefly sketching a different approach for a possible normative project of constitutionalism in global governance. This cannot be 28 See Neil Komesar, Law’s Limits: Rule of Law and the Supply and Demand of Rights (Cambridge University Press, 2001).

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based on a fully fledge new constitutional model, with a complete architecture of principles and institutions. My argument has been precisely that no such model can be found. Instead, what I try to put forward is much more modest: it is a methodology for constitutional choices in global governance that can make use of all the theories mentioned and, in doing so, reflects the paradoxes and tensions upon which constitutionalism is founded. Constitutionalism at the Global level does not necessarily requires (neither may it be desirable to have) a constitution at the global level. What it does require is an appropriate framework to deal with the challenges of constitutional character and importance that arise at the Global level. Constitutional questions require constitutional answers but they do not necessarily require a global constitution of some sort. When faced with a conflict between different constitutional orders or between the latter and international legal orders, judges must be provided with a methodology capable of helping them in the choices (of constitutional relevance) that they are bound to make. A first conclusion from the previous analysis is that the usual approaches to global governance and its appropriate legal model suffer from single institutionalism or, in a broader sense, single constitutionalism: they focus on a particular set of constitutional malfunctions and propose a constitutional alternative without taking into account the paradoxes and balances of constitutionalism and the potential constitutional malfunctions of the alternatives proposed in a world of high transaction and information costs. The normative project of constitutionalism cannot be pursued by the setting up of idealised institutions or processes. No single constitutional model is adequate. First, the transaction and information costs which mediate between constitutional rules and institutions and individuals make so that such institutions frequently fail in mirroring their constitutional ideal. The existence of different constitutional institutions is a reflection of such reality and of the need to make institutional choices between increasingly imperfect institutional alternatives. Any model which argues on the basis of an institutional ideal in comparison with an institution operating in a world of transaction and information costs is doomed from the start. Second, constitutionalism is inherently paradoxical and grounded on a permanent balance between often conflicting values (such as freedom vs. civic solidarity; majoritarian vs. minoritarian rights; inclusion vs. intensity of participation). Any form of single constitutionalism, which advocates for a particular institutional model of constitutionalism, ignores those paradoxes of constitutionalism and how they require different institutional alternatives. A second conclusion that this same nature of constitutionalism allows us to see is that national constitutionalism is simply a contextual representation of

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constitutionalism and not its single possible expression. There is nothing in constitutionalism that requires its limitation to the borders of the States. This does not mean, however, that national constitutionalism is both unnecessary and without normative authority. A third conclusion is precisely that national constitutionalism is still, nevertheless, the closer approximation we have to constitutional ideals. This is so because of the conditions created by the national political communities. They provide conditions of political and social loyalty (linked to a long term political contract) that allow for the best contextual resolution of the tensions of constitutionalism. This recognition of the particular legitimate authority hold by national constitutionalism cannot, however, ignore that there is a claim for constitutionalism at the global level. This claim derives from the forms of power that the processes of global governance already entail. These phenomena require more than a simple reference to the international commitment of the State; they require a constitutional form of controlling the extent of autonomous normative decisions that are left for global and regional institutions and of reviewing their impact on national constitutionalism. They also require a constitutional form of balancing the competing national constitutional claims that come into contact through the interdependence and conflicts of jurisdiction between different legal orders.29 But what can be the character of global constitutionalism and how is it to be related to national constitutionalism? In other words, how can I reconcile the claim for a global constitutionalism with the recognition of the higher normative authority claimed by national constitutionalism? To solve this conundrum I first propose a distinction between constitutions and constitutionalism. Constitutions refer to constitutionalism linked to a long-term political contract supported by or with a political community. Constitutionalism, itself, is broader: it is a normative theory to allocate, discipline and govern power in such a way as to maximise the ideals of freedom and full participation and representation. Such a theory is applicable to larger and smaller jurisdictions of social decision making, to political processes and to courts or markets. It is and ought to be applicable to any institution that exercises power. Its expression does not have to be the same of national constitutionalism. What it does require is the same burden of choices between institutional alternatives. Choices to be made in light of the substantive and procedural processes I have identified and the dynamics of participation linked to those institutional 29

Miguel Poiares Maduro, Is There Any Such Things as Free or Fair Trade? A Constitutional Analysis of the Impact of International Trade on the European Social Model, in: Gramne De Búrca/Joanne Scott (eds.), The eu and the wto Legal and Constitutional Issues (Oxford, Hart Publishing, 2001).

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c­ ontexts. We cannot require global governance to be legitimated under the same conditions as those of national constitutional law. But we must require it to be legitimised in constitutional terms. Constitutionalism without a political community must focus on exit and voice without expecting loyalty. It cannot therefore be based in the traditional democratic model of the State. But it must proceed to make similar constitutional choices by taking into the constant tradeoffs between the constitutional values of inclusion and intensity of participation, the different stakes of potentially affected interests and the way the different global institutional alternatives interact with transaction and information costs. The fact is that global governance cannot aspire to reflect the democratic and constitutional model of the States but, instead, its normative value can be found in providing new institutional alternatives to correct some of the constitutional malfunctions of those States. The conundrum I have presented is not, however, totally solved by recognising the existence of constitutionalism beyond the State. What happens when global constitutionalism collides with national constitutionalism? The conditions fulfilled by national constitutionalism as a proxy for constitutionalism do establish an institutional presumption in its favour. It must be global governance to hold the burden of demonstrating its added constitutional value in certain settings to overcome that preference. Where (independent) power has been transferred towards the global level we must find a constitutional added value to legitimize the exercise of such power. The tendency here would be to say that when global constitutionalism provides for the inclusion of out of state interests it would overcome that burden. But that is not so: again, we would be forgetting that the paradoxes and balances of constitutionalism may require us to favour intensity or civic solidarity instead of inclusion and that this could tilt the balance in favour of national constitutionalism. Moreover, the lack of long-term political contract makes it difficult, as we said, for global constitutionalism to realise some of the tradeoffs that are related to less consensual modes of constitutional decision-making. The long term perspective inherent in the institutional choice among polities has to be taken into account. This further reinforces the presumption in favour of national constitutionalism but does not make it insuperable. There are instances where global governance and constitutionalism can prevail over national claims of constitutional self-determination even when it involves an exercise of power that cannot be traced back to an explicit State commitment. We can present some proxies that may help us in identify when we can apply the normative claims derived from global constitutionalism in its relation with the States:

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• When States can be said to have made a broader commitment to a partial global constitutionalisation of certain areas or forms of action. In other words, where they have committed themselves to include out-of-state interests. • When the international commitments of States bring their respective constitutional orders into collision. There is an inherent tension between the emergence of international interdependence (which presupposes impacting on the polities of the others) and the respect for the independent decisions of different polities (which can be argued both in terms of sovereignty and in terms of higher democratic claims). This must also be regulated by global constitutionalism. • Where forms of global governance have altered the constitutional balance within the States, global constitutionalism may actually serve to re-install that constitutional balance but at the global level. This does not mean that the processes of global governance should prevail in all these circumstances but simply that it is more likely that the presumption in favour of national constitutionalism will be overcome. Whether or not that will be the case depends on a constitutional and comparative institutional analysis to be made in the specific cases. In the context, I described, of an incomplete and, often, segmented global legal order it is impossible to appeal to an international constitutional order capable of helping judges decide the constitutional conflicts which may arise in transnational litigation. Instead, in the absence of that constitutional order, we should focus on a constitutional legal methodology that may help the judges and other legal operators to make those difficult choices. In other words, we should try to develop a map to guide us in our increased travelling between different legal orders.

Index Accountability Mechanism [of the Asian Development Bank] 63, 68–69 Action for annulment 454, 472 Action for omission 454 Adjudication 12, 13, 18, 24, 94, 123n154, 254, 286, 310, 312, 317, 508 , 528, 529, 538, 547 Admissibility 25n6, 27n13, 30n25, 34, 64, 67, 90, 113n93, 116, 118, 118n119 African Court on Human and People’s Rights 4, 16, 98–135, 191n6 African Judicial Architecture 132–135 Aguinda et al. v. Chevron Corp 539 Alien Tort Statute and ats 501 American Convention on Human Rights 541 Amparo 88, 222n1, 462n29, 540, 540n42, 540n44, 541, 541n49, 541n50 Applicable law 7, 206, 211, 214, 271, 286n29, 291n8, 293, 295n30, 297n38, 301, 302, 383, 386, 398n52, 412n113, 432, 434, 435, 438–443, 497 Arbitration 11, 26n11, 38, 60, 75, 247, 265–266, 278n4, 290n4, 306n3, 344n86, 347–362, 364n2, 383–431, 432–445, 455, 519n14, 539, 547 Arbitration proceedings 256, 260, 271, 374, 432–434, 436, 437, 439, 440, 442, 443 A right to cultural identity 136–162 Article 21(3) 206, 206n2, 208, 209, 209n9, 209n10, 211n17, 212–214, 214n35, 215, 215n36, 218, 221 Article 63 of the American Convention 86 Autonomy of the Parties in Arbitration 397, 404, 405, 406, 409n100, 412 Bilateral Investment Agreement 248, 248n4, 248n7, 251, 251n21, 251n22, 252, 256n36, 258, 259, 276, 279, 280, 282, 285, 286, 288, 290, 290n4, 291, 293, 363, 367n18, 368, 370–373, 378, 379 Bilateral Investment Treaties 248n7, 276, 290, 290n2, 290n5, 291n9, 295, 313, 317 Bilateral investment treaty 350

Brazil 163, 163n1, 164, 167–169, 167n20, 168n24, 169n27, 170n31, 172, 175n46, 180, 183, 184, 184n73, 185, 185n74, 186, 187, 222–243, 336n57, 389 Brazilian Law 167, 168, 182, 186, 188, 223, 227, 230, 234 Brazilian Supreme Federal Court 163–189, 223 Brussels i bis Regulation 518, 522, 527 Calvo Doctrine 255n30, 278, 279, 367, 368n24 Canada 27, 27n12, 36, 37, 42n15, 44, 49n49, 62n8, 86, 223n6, 250, 256, 257n40, 260, 263, 265n1, 271nn12–13, 306n3, 312n24, 322, 322n4, 336, 336n58, 337nn62–63, 338–345, 372, 375, 390 Case law 23, 43n20, 45n36, 91, 113n93, 138, 138n12, 143n28, 146, 149, 151n43, 185, 196n32, 200n54, 202, 208, 209, 209n8, 216, 218n48, 219–221, 256, 328, 335, 344, 384n7, 387, 391, 397, 398n52, 399, 400n56, 403n73, 405, 409, 411, 412n111, 433, 434n10, 458, 460, 463, 464, 466, 468, 470, 470nn8–9, 471n10, 473n20, 474, 482, 489, 491, 502, 519, 522n23, 526n35, 542 ceta 250, 252n23, 256n34, 260–263, 376–378, 376n43, 377n46, 378n49, 379 Chandler v. Cape plc. 530, 530n2 Charter of the United Nations 11, 15, 20, 26, 52n61, 119n127, 120, 479, 486n37 Children 86, 93, 99, 101, 123, 142, 157, 191, 192, 192n10, 193, 194, 196, 196nn30–32, 197, 198, 198n39, 201n58, 201n60, 202, 202n67, 203, 214, 214n32, 217 cjeu. See Court of Justice of the European Union (cjeu) Climate Change 321, 321n2, 321n3, 322n3, 326, 327, 327n27, 329n35, 333n50, 340n77, 341n78, 344n87, 346 Collective security 480 Common Foreign and Security Policy 453, 463, 481

566 Company law 519, 526, 527 Competition disputes 264, 268–269 Compromissory clause 21, 23–24, 24n2, 28, 29, 29n21, 30, 32, 33, 34 Conciliation 11, 67, 71, 264, 267–268, 270, 273, 274 Constitutional Court 6n10, 7n10, 89–97, 112, 112n89, 146n37, 146n38, 173nn44–45, 185, 213n28, 458, 460, 461, 462, 468, 470 Constitutional guarantee 231, 239 Constitutionalism beyond the State 562 Constitutionalization of International Law 6, 6n8, 163 Constitutional Values 559, 562 Conventionality control 222–243 Corporate accountability 528, 529–538, 542–544 Corporate affiliations 516, 516n1, 517–519, 524–527 Corporate responsibility 497, 528n1, 534–536, 541n48 Corporate social responsibility 529, 534 Corporations 61, 62n8, 63, 66–68, 249n11, 309n11, 315, 341n79, 375n39, 379, 419n136, 419n139, 497, 498, 501, 504–506, 508, 509n15, 513, 517, 517n9, 518, 521–523, 523n27, 524, 528, 528n1, 529, 531n6, 532, 532n15, 532n17, 533n18, 534–536, 536n32, 537, 537n36, 538–540, 541n48, 542, 543, 543n53, 544 Court of justice 3, 4, 7n11, 8n16, 10, 16, 23–37, 38–56, 59, 76, 105, 106n46, 107, 107n53, 107nn55–56, 107n61,108, 108n62, 108nn64–65, 108n68, 111, 111n84, 111n88, 112n88, 130n200, 131, 131n202, 131n204, 132–134, 134nn222–223, 165, 229, 235, 247n2, 251, 252, 257–258, 265, 347, 348n1, 379, 449, 451–467, 468–475, 477, 481n21, 483n28, 485n30, 486, 486n37, 487, 489, 527, 547, 547n2, 550n6, 551n13 Court of Justice of the European Union (cjeu) 4, 7n11, 251, 252, 257, 451–467,  468–471, 470nn8–9, 471n10, 472, 473,  473n20, 474, 475, 477, 482, 519,  519nn13–14, 527n39 Cultural rights 114n99, 136–162, 168, 170, 170n32, 540, 540n43

Index Culture 98, 99, 104, 135, 136, 136n1, 137, 138, 141, 143, 148, 151n43, 453, 154, 157, 157n61, 159, 345n90, 345n91, 348, 432, 548 Cyclical 276, 281, 281n13, 282, 284 Developing Countries 307, 330n37, 332n46, 346, 390, 538, 543 Diplomatic Protection 247, 247n1, 248, 366, 367, 367n16, 368, 368n24 Direct effect of the Court’s judgments 483 Discovery 129, 282, 349n4, 355n25, 435n13, 438, 439, 442, 511, 512, 548 Dispute Resolution 4, 23, 66, 67, 78, 264–275, 280, 282, 287, 288, 290, 306–318, 347, 353, 359n45, 362, 383n1, 392, 395, 397, 416, 433, 434, 434n14, 439n30, 547n1 Dispute settlement 16, 17, 24n5, 30, 30n25, 38, 44n30, 59, 60, 60n3, 61–63, 103nn28–29, 104n36, 107, 247–263, 264, 266–268, 269, 269n10, 270, 273, 277, 279, 280, 284–287, 306, 306n3, 307–312, 314n32, 315, 317, 318, 319–346, 348n1, 350n9, 351n11, 354n22, 355n27, 363–379, 461n27, 552 Domestic remedies 62, 467 Drittwirkung 529, 537, 537n35 Dual Coverage 306–318 Due diligence 49, 54, 203, 208, 219, 220, 305, 528n1, 533 Due Process Clause 498, 502, 502n5, 504, 515 Duty of care 530, 530n4, 531 Early Warning Mechanism 274–275 ecowas Court of Justice 108, 134n223 Effective judicial protection 468–475 Effectivites 46 Energy Charter Treaty 4, 248, 264–275, 290, 293n19, 294, 298, 300, 300n56, 301, 302, 303n66, 305, 351n11, 368 Energy resources 39–44, 45n36, 54, 55 Environment 11–13, 38, 47, 47nn39–40, 48, 48n46, 49n46, 50n51, 51, 52, 52n61, 53, 53n66, 70n34, 112, 158, 165n9, 176, 199n49, 259n44, 261n48, 269, 280, 281, 295, 297, 299, 304, 321n3, 334n53, 335, 335n57, 346, 368, 378 Environmental disputes 49n47, 264, 269

Index Environmental liability 39, 48, 48n45, 49, 50, 50n52, 529 eu accession 290–305 eu Common Foreign and Security Policy 481 eu law’s assurer 468–475 European Convention on Human Rights 89, 101, 132, 195, 195n27, 197, 213, 237, 353n16, 354, 354n18, 361, 455n8, 464 European Court Of Human Rights 4, 7n10, 7n12, 16, 85, 89–97, 132, 136–162, 190–205, 207n2, 256, 256n35, 461n27, 464–467 European Union (eu) 4, 5n7, 6, 6n8, 7n11, 48n46, 53, 59, 193n16, 250–251, 251n20, 252, 256–259, 262n55, 271n12, 290, 290n1, 290n4, 291n6, 294, 299, 315, 322, 336, 338, 338n66, 363, 371, 373, 374n35, 414, 450, 451–467, 469, 471n14, 474, 476–494, 498, 505, 527, 551 European Union Law 450, 452 Evidence 11, 45, 46, 60n2, 65n13, 68, 81, 101, 128, 129, 211, 234n25, 302, 342, 347–362, 366, 368n24, 403, 432–445, 481, 484, 485, 529, 543 Execution of judgments 97 Extraterritorial effect of the decision 497 Extraterritoriality 134n220, 500, 506, 507, 507n11, 508, 509n15, 531n6, 547 Fact-finding process 355n25, 433, 433n3, 435n13 Fair and equitable treatment 248, 260, 261, 261n51, 292, 296, 298, 313n30, 350, 350n10, 351n10, 360, 368, 378 Fair trial 149, 213n30, 256, 347, 349, 353–355, 356, 356n30, 357, 359, 362, 488 Family visits 208, 217, 217n42, 217n44, 218, 218n48 Federalism 450 Feed-in-tariffs 319–346 Financial fair play 75–79 Football 73–78, 81 Forum necessitatis 497–499, 532 Forum non conveniens 497, 525n31, 532n11 Forum Shopping 17, 18, 309n12, 311 Fragmentation 4, 8n16, 17, 60n2, 165, 165n9, 210n13, 381, 387, 308n8, 491, 492, 549

567 Friday Alfred Akpan et al. v. Royal Dutch Shell plc et al. 531, 531nn6–7, 532n16 Fundamental rights 6, 75, 85, 138, 164, 166, 167, 168, 168n23, 169, 172, 179, 180, 185, 186, 188, 199, 213, 231, 233, 234, 361, 421, 457, 458, 460–462, 464, 465, 467, 474, 477, 482, 483, 483n26, 484, 486n35, 486n37, 487, 487n38, 488, 489, 491, 492, 514, 525, 533, 535n25 General jurisdiction 3, 13, 20, 452, 502–504, 516, 517, 518, 518n11, 521, 521n21, 522–524, 526 Global Constitutionalism 550–552, 554–556, 557, 561–563 Global Governance 59n1, 60n1, 345nn92–93, 550–557, 559–563 Globalization 4, 163, 166, 279n10, 329n36, 390, 399, 544n55, 547, 548, 552n14, 557n25 Good Faith 29n23, 89, 91, 225, 292, 295, 347–362 Good offices 274 Groups of companies 516 Guiding Principles on Business and Human Rights 497, 528n1, 532n17, 533 Hierarchy 11, 12, 18, 19, 22, 134n224, 181, 181n64, 182n64, 211, 226, 344, 452, 452n6, 465, 466, 467 Hissene Habre 110, 110n83, 134, 134n221, 134n223 History of international investment law  279, 281 Home State jurisdiction 529, 531 Human Rights 4, 16, 38, 61, 85, 89–97, 98, 136–162, 163–189, 190–205, 206–221, 222–243, 256, 281, 353, 366, 449, 455n8, 476, 497, 500, 525, 528–544, 547 Human rights due diligence 528n1, 533 Human rights litigation 104, 112, 112n89 Human rights protection 4n4, 86, 94, 104, 114n97, 123, 139, 158, 163n1, 164, 165, 165n9, 166, 167, 169, 170, 170n29, 171, 188, 209, 210, 210n13, 215, 221–224, 226, 228, 229, 238, 239, 240 Human rights violations 85, 88, 101, 110, 111, 114, 115n104, 117, 121, 164, 165, 171, 184,

568

Index 184n71, 185, 187, 190n1, 200n54, 221, 223, 225, 234, 238, 497–500, 507, 513, 515, 525, 525n31, 528, 529, 531, 532, 532n15, 536n30, 539, 540, 542, 543

iba Rules 357, 358, 358nn37–44, 359, 359n45, 361, 437n22, 439 iba Rules on the Taking of Evidence in International Arbitration, in-house counsel 357, 358, 358n38, 358n40,  358n42, 359n45, 437n22 icc Statute 206nn1–2, 209n9, 210–213, 214, 214n35, 216, 218n47 icj. See International Court of Justice (icj) icsid 4, 16, 38, 247n1, 248nn3–4, 249n9, 249n11, 250n17, 253, 254, 254n28, 256, 256n37, 257, 259n44, 265, 271, 272n14, 279, 282, 287, 287n34, 291n8, 292n13, 296n32, 296n35, 297nn37–39, 299n47, 305n78, 306–318, 350n10, 351nn10–11, 352, 352nn11–13, 353n15, 356, 356n29, 356n31–33, 357, 357nn34–35, 361, 368, 369, 373, 375, 375n39 Implied powers doctrine 94 Independent Consultation and Investigation Mechanism [of the Inter-American Development Bank] 63, 69–70 Independent Review Mechanism [of the African Development Bank] 63,  70–71 Infringement procedure 454, 456, 456n11, 468–475 Inspection Panel [of the World Bank] 60, 63–65, 66, 68, 69n32 Institutional Alternatives/Choices 561 Inter-American Convention of human rights 229, 233 Inter-American Court of Human Rights 4, 16, 86, 101n21, 132n214, 169, 170, 190–205, 209n8, 223, 224, 234, 236–238, 542, 547 Inter-American Human Rights Court 4, 16, 86, 101n21, 132n214, 163–189, 190–205, 209n8, 222–243, 542 Inter-American human rights system 164, 169, 170, 170n32, 192, 197, 198, 222, 223, 226–238 International and regional development banks 61, 62–73

International Commercial Arbitration 249, 249n8, 385n7, 389, 390, 398, 399n54, 404, 432–445 International Commercial Arbitration International Court of Justice (icj) 3, 4, 8n16, 10, 12, 14, 15–21, 22, 23–37, 38–56, 111,111n84, 130, 134nn223–224, 135n224, 165, 247, 247n2, 265, 265n2, 347, 348, 349, 349nn5–6, 354, 354n23, 356n30, 359, 362, 379, 461n27, 481n21, 487, 547 International Courts 3, 5, 7, 8n16, 10–22, 23–37, 38–56, 60, 60n3, 61, 61nn4–5, 66n17, 74, 104, 104n35, 105, 111, 111n84, 112n91, 113n94, 114n97, 129n192, 130, 130nn199–200, 133, 133n216, 134, 139, 165, 247n2, 253n24, 265, 299n48, 344, 347, 348n1, 353n16, 354, 354nn19–20, 356n29, 362, 379, 393, 415n119, 453, 458, 461n27, 481n21, 487, 547, 558 International Covenant on Economic, Social and Cultural Rights 540 International Criminal Court (icc) 4, 4n2, 17, 60, 102n26, 111, 111nn85–86, 111nn87– 88, 123, 133nn 193n12, 206–221, 238, 514, 547 International Criminal Law 16, 110n77, 111nn87–88, 191n4, 206, 206n2, 207, 207n2, 211n21, 214, 221 International customary law 195n27, 529–538 International Energy Charter 275 International Human Rights Law 98n1, 142, 163–165, 167–169, 182, 184n71, 187, 190, 190n2, 208, 210n13, 213, 214, 218n48, 535n25, 543 International inspection and control mechanisms 59–73 International Investment 248–250, 255, 258, 258n42, 276–289, 292n12, 298n46, 306, 307, 311, 312–316, 317, 350nn9–10, 351n11, 352n11, 366n15, 368, 368n22, 370n27, 372, 375n40, 377n44 International Investment Agreements 315 International investment regime 276–288 International Judicial Architecture 98–135 International judiciary 61n6, 104, 132,449 International Justice 3, 4, 10, 17, 19, 26, 26n9, 74, 196n31, 199n46, 348n1, 454, 464–467

569

Index International Law 3, 10, 23n1, 38, 59, 85, 100n12, 136, 163, 190, 207, 247, 272, 276, 293, 306, 321n2, 347–362, 365n8, 389, 439n30, 449, 453–457, 476, 500–515, 518, 529, 548n3 International Society 3–6, 8, 8n15, 9, 166, 185, 241, 491, 492, 556 International trade regime 283, 284, 288 International treaties 169, 169n27, 171, 181, 182, 182n4, 227, 228, 234, 239, 280, 281 Investment Arbitration 247n1, 253, 259–260, 260n46, 262n54, 269n10, 273, 285n28, 286, 287, 287n32, 290n4, 306n3, 313, 314n32, 316, 318, 347–362, 375n40, 379 Investment ombudsman 273 Investment protection, negotiations 250, 374, 375 Investment treaties 247n1, 248n7, 270, 276, 278n2, 280, 281, 282, 287, 288, 290, 290n2, 290n5, 291n9, 291n11, 292–295, 299n48, 313, 317, 375 Investor-State Arbitration 252n23, 253–254, 256n33, 286n29, 293, 294, 297, 312n24, 315, 317, 377n44, 378 Investor-State Dispute Settlement (isds)  247–263, 269n10, 363–379 Ireneu Cabral Barreto 85–88 isds. See Investor-State Dispute Settlement (isds) Jerusalem Tramway 534 John Ruggie 528, 528n1, 533, 541 Judicial accountability 130, 528, 529, 543 Judicial Cross-Fertilization 186 Judicial Dialogues 7, 75, 102, 186, 450, 466 Judicialization 22, 173, 173n44, 547n1 Jurisdiction 3, 10, 23–37, 38–56, 74, 86, 89, 104, 163, 190, 210n16, 223n5, 248, 265, 280, 290, 306, 344, 352, 367, 383, 433, 449, 452, 486, 497, 500–515, 516–527, 529, 547 Jurisdiction ratione materiae 25–30, 33, 313, 315 Jurisdiction ratione personae 25, 30–32, 33, 34, 315 Jurisdiction ratione temporis 25, 32–33 Jurisprudence 3, 4n2, 11, 13–15, 17, 18, 22, 32, 38–56, 85n1, 86, 90, 125n162, 146n38, 163–189, 200n54, 206, 207, 207n2, 208,

209, 209n9, 210, 211, 211n18, 213–215, 217, 218, 220, 221, 237, 292, 296, 299, 309, 310, 322n4, 345, 345nn92–93, 349n4, 450, 470, 478, 483n26, 489, 516–518, 521n21 Jus cogens 529, 534 Kiobel v. Royal Dutch Petroleum Co. 501 Lack of directives transposition 474 Lack of jurisdiction 25–33, 34 Law Applicable to the Arbitration 386, 396, 411, 411n105, 412, 412n111, 413 Legal certainty 285n28, 290–305, 537, 544 Legal Foundation of Transnational Arbitration 400–406 Legal Globalization 547, 548 Legal Integration 4, 61, 166, 168, 294, 306, 399, 405, 449, 457, 460, 462, 463, 552 Legal privileges 432–445 Legitimate expectations 292, 294–305, 360, 378, 440, 441 Lump sum 454, 459, 459n21, 468, 470, 473 Mandatory rules in Arbitration 400, 410, 411n105, 416n124, 418 Manual on International Courts and Tribunals 60, 61, 253n24 Maritime delimitation 21, 39, 40, 40n6, 41n11, 42n16, 43n20, 46n36, 55 Member States’ infringement 468–475 Models of jurisdictions 74, 166, 393 Nature of international law 281n13, 282 New infringement procedure’s scheme 95 Non-refoulement 207, 212n23, 215, 216, 216n38 Nuclear energy 39, 50, 50n55 Office of the Compliance-Advisor/ Ombudsman [of the International Finance Corporation and the Multilateral Investment Guarantee Agency] 63, 66–68 Oil and gas exploitation 40, 41, 44, 46, 47n40, 55 Oil concessions 42, 44, 45, 45n36, 46, 54, 55 Optional clause 13, 15, 23, 24, 26, 27, 28n17, 33

570 Peaceful settlement of disputes 29, 32, 34, 355 Penal action 173n46, 452, 497 Penalty 452n6, 454, 455, 459, 459n21, 468, 470, 473 Permanent Court of International Justice 3, 10, 12, 13, 14, 15, 20, 24n3, 26, 26nn9–10, 32, 32n31, 32n33, 199n46, 348 Personal jurisdiction 178n53, 500, 501–504, 513–515, 516–527 Preliminary rulings 257, 453, 456n13, 459n20, 459n22, 461, 462, 466n40 Principle of double standard of jurisdiction 498 Principle of reasonable period 88 Principle of subsidiarity 91, 92, 141 Privileges 167, 223, 230, 233, 235, 235n26, 236–239, 278, 286, 358, 364, 432–445, 483 Project Complaint Mechanism [of the European Bank for Reconstruction and Development] 63, 71–72 Proliferation 12, 15–21, 104, 112, 112nn91–92, 165, 306, 308n8, 311, 458n17, 476n2 Public International Law 10, 49, 63n10, 191n4, 255n30, 280, 281, 285n27, 310n20, 315, 344n86, 347–362, 365n8, 366n11, 367, 368n22, 449, 453–457 Public policy exception 541, 542 Regional human rights systems 100n13, 102n24, 196 Religious freedom 156, 364 Remedies 62, 70, 87, 118, 118n119, 119n127, 120, 121, 121nn137–138, 122, 124, 127–128, 130n194, 135, 179, 190–205, 233, 247, 258, 279, 309n11, 317, 320, 322n4, 325n18, 325n20, 327n29, 467, 498, 500, 501, 506, 508, 512, 528n1, 538, 543 Remedy 85, 87, 103n26, 121nn133–134, 127, 127n178, 190, 190n2, 191, 191n4, 194, 203, 208, 212, 215, 233, 257, 272, 287, 483, 497, 498, 509–512, 513, 532n17, 542 Renewable Energy 38, 319–346 Reparations 52, 86, 124, 127, 127n177, 128, 128n181, 190, 190nn1–2, 191, 191n4, 191n6, 198, 199–202, 199, 199n147, 200 200n52, 201–203, 208

Index Reservation 27, 27n14, 28, 28n17, 29, 32, 33 Responsibility of international organizations 208, 219 Rights protection in Africa 108 The right to culture 138 The right to participate in cultural life 138 Ruggie Principles 497, 498 sadc Tribunal 109, 109n70, 122, 133 Sanctions 87, 88, 454, 477, 477n8, 480, 511 Security Council 14, 15, 109, 132, 190n3, 414, 455, 476nn1–2, 477, 477nn3–4, 477n7, 478, 479, 479nn11–12, 480, 480n13, 481, 481n21, 482, 482n24, 483, 484, 486, 486n35, 486nn37–38, 487, 487n38, 488, 489, 489n46, 490, 490n47, 490n49, 491, 492 Services Sector 306–318 Sources of Arbitration Law 391, 392 Specialisation 74, 75 Specialization 256 Specific jurisdiction 502, 502n5, 504, 518n11, 523, 524, 526 Sporting activities 74, 76, 78 ssds. See State-State Dispute Settlement (ssds) State Control of Arbitration 364 State duty to protect 528, 528n1, 540 State Regulation of Arbitration 77 State-State Dispute Settlement (ssds)  363, 367 Sub-regional courts 105, 108–109, 109n71, 133 Subsidies 250, 319–346, 371, 371n31 Supreme Court 7n11, 133n220, 134n220, 169, 173n45, 227, 228, 234–236, 239, 240, 364n3, 385n7, 412n111, 419n136, 498, 500, 501, 502, 504, 506, 508, 509n15, 512n21, 513, 516, 517, 521, 523, 539, 540, 540n42, 540n44, 541, 541n51, 542, 542n52 Sustainable Development 52, 52n64, 53, 53n69, 56, 321n3, 322n3, 332n45, 332n47, 341n78, 344n87, 346 Taking of evidence 357, 358, 358n38, 358n40, 358n42, 359, 359n45, 437n22 Terrorism 111n88, 168n24, 449, 478n9, 487n38, 488, 500, 509–512 Torts 134n220, 529, 531, 532, 533, 538

Index Trade 16, 38, 61, 117n112, 165n9, 248, 264, 276, 306–318, 320, 349n7, 363, 385, 476, 505, 547n1 Transatlantic Trade and Investment Partnership (ttip) 250, 250n18, 252n23,  260–263, 363–379 Transconstitutionalism 165, 166, 185 Transit disputes 268 Transjudicial Dialogue 164–167, 186, 187 Transnational Arbitration 383–431 Transnational Law of Arbitration 387, 391, 398–400, 405, 406, 411, 414–420, 421 Treaty of Lisbon 250, 252, 371, 452, 454, 456, 456nn9–10, 458n17, 462n32, 463n33, 464, 485n33, 489n44 Treaty of Rome 111n85, 207, 213, 274 ttip. See Transatlantic Trade and Investment Partnership (ttip) uefa Financial Control Body 59, 74–81 Umbrella clauses 286, 287, 317 un Committee on Economic, Social and Cultural Rights 540 un Guiding Principles on Business & Human Rights 528, 528n1, 533 United Nations (un) 3, 10, 11, 14–17, 20–22, 23, 26, 26n10, 31, 33, 34, 39n3, 47nn39–40,

571 48n44, 48n46, 50, 51, 52n61, 72n47, 92, 109, 109nn73–74, 110n78, 110nn80–81, 111n84–85, 119n127, 120, 129n192, 136, 137, 137n5, 143, 143n28, 145, 145n35, 158n62, 159n67, 168, 190nn2–3, 191, 192n10, 198n44, 200n51, 208, 210n13, 222, 247n1, 249, 253–254, 260, 272, 283, 321n3, 377n44, 389, 390, 390n18, 393n31, 414, 449, 451, 453, 455, 455n8, 461n27, 476, 476n1, 476–495, 497, 528, 528n1, 532n17, 533, 535n26, 540, 540n43, 541, 551n7, 551n9, 552n15, 553 Universal jurisdiction 190, 500, 501, 515 usa 7n11, 23n1, 28, 29, 31, 256, 278, 283, 389, 412, 503, 521, 521n20 Victims 85, 86, 90, 114, 115n104, 195n26, 197, 199, 199n49, 200n56, 201n57, 202, 203, 208, 209, 226, 234n25 Violations of reasonable duration of proceedings 88 World Trade Organization (wto) 4, 16, 52n64, 266, 276–289, 306–318, 319–346, 322n4, 323nn7–8, 324n15, 325n17, 326n22, 348n1, 371, 464, 547, 551 wto. See World Trade Organization (wto)