state responsibility

CHAPTER 9CHAPTER 9

STATE RESPONSIBILITYSTATE RESPONSIBILITY

PROFESSORDR. ABDUL GHAFUR HAMID

9.1 NATURE OF STATE 9.1 NATURE OF STATE RESPONSIBILILTYRESPONSIBILILTY

• State responsibility refers to ‘liability’ of a state under international law.

• Responsibility arises from the breach by a State of an international obligation. That obligation can be one of customary international law or a treaty obligation.

• The main reference: the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts 2001, adopted by the GA on 28 Nov. 2002.

(1) Substantive rules of international law (Primary rules): customary or treaty rules laying down substantive obligations for States

(2) The law of State responsibility (Secondary rules): rules relating to (a) whether there has been a breach of a primary rule; and (b) the legal consequences of such a breach.

9.2 ELEMENTS OF STATE9.2 ELEMENTS OF STATE RESPONSIBILITY RESPONSIBILITY [pp. 253-54][pp. 253-54]

Art. 1: “Every internationally wrongful act of a State entails the international responsibility of that State.”

Art. 2: There is an internationally wrongful act of a state when conduct consisting of an action or omission:

(1)   Is attributable to the state under international law; and

(2) Constitutes a breach of an international obligation of the state.

Conduct: actions or omissionsConduct: actions or omissions

• Conduct attributable to the State can consist of actions or omissions.

• An example of an omission:• Corfu Channel case (1949) ICJ Rep. 4, where

the ICJ held that Albanian was responsible because it knew, or must have known, of the presence of the mines in its territorial waters and did nothing to warn third States of their presence.

Actions or omissions Actions or omissions [Cont.][Cont.]

• In the US Diplomatic and Consular Staff in Tehran case, 1980 ICJ Rep. 3, the Court concluded that Iran was responsible for the “inaction” of its authorities which failed to take appropriate steps to protect the embassy and its staff.

• Article 2 specifies the two constituent elements of an internationally wrongful act:

(1) attribution of conduct to the State; and (2) breach of an international obligation by the

State. [See Tehran Hostage case]• In principle, the fulfilment of these elements is a

sufficient. In some cases, however, the respondent State may claim that it is justified in its non-performance, by referring to a ‘defence’.

• Three requirements: attribution; breach and absence of any defence.

9.3 9.3 ATTRIBUTION OF CONDUCTATTRIBUTION OF CONDUCT TO THE STATETO THE STATE [The first element] [The first element]

• The State is an abstract entity. It cannot act of itself.

• An “act of the State” must involve some action or omission by a human being or group. States can act only by and through their organs or agents.

• The question is which persons should be considered as acting on behalf of the State.

• The general rule: A State organ is considered as acting on behalf of the State and its conduct is considered as an “act of the State” for which the State is responsible under international law.

• As a corollary, the conduct of private persons acting in their private capacity is not as such attributable to the State.

9.3.1 Conduct of State organs9.3.1 Conduct of State organs [Art. 4] [Art. 4] [Text Book p. 255][Text Book p. 255]

1. The conduct of any State organ shall be considered an act of that state under international law, whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central government or of a territorial unit of the State.

2.  An organ includes any person or entity which has that status in accordance with the internal law of the State.

Executive organExecutive organ

• Massey claim: Failure of Mexican authorities to punish the killer of Massey, a US citizen.

• Rainbow Warrior incident: Rainbow Warrior was blown up by French secret service agents.

Judicial organJudicial organ

• Immunity from Legal Process of a Special Rapporteur of the Commission on Human Rights (1999) ICJ Rep. 87

• [Dato’ Pram Cumarasuamy case]• “According to a well established rule of

international law, the conduct of any organ of a State must be regarded as an act of that State. This rule…is of a customary character.…”

Acting in an official capacityActing in an official capacity

• Even though a person or entity has the status of a State organ, the State will be responsible only when that person acts “in an apparent official capacity”. If the person acts in a private capacity, just as a private citizen, the State will not be responsible.

Mallen caseMallen case

• a Mexican consul had been violently attacked and beaten twice by an American police officer.

• As for the first attack, the evidence indicated a wanton act of a private individual who happened to be an official.

• On the second attack, the American police officer, showing his badge to assert his ‘official capacity’, struck Mallen with his revolver, and then took him at gun point to the county jail. It was held that the US was responsible for this second assault.

Conduct of persons or entities exercising Conduct of persons or entities exercising elements of governmental authority elements of governmental authority (para-Statal entities) [Art. 5] (para-Statal entities) [Art. 5] The conduct of a person or entity which is

not an organ of the State under Art. 4 but which is empowered by the law of that State to exercise elements of governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance.

9.3.2 Liability for 9.3.2 Liability for ultra viresultra vires act act [Art. 7][Art. 7]

The conduct of an organ of a State or of a person or entity empowered to exercise elements of the governmental authority shall be considered as an act of the State under international law if the organ, person or entity acts in that capacity, even if it exceeds its authority or contravenes instructions.

Caire claimCaire claim (1929) 5 RIAA 518(1929) 5 RIAA 518

• Caire, a French national, was killed in Mexico by two Mexican military officers. After failing to extort money, they took Caire to the military barracks and shot him.

• Held: The officers in question, even if they are to be regarded as having acted outside their competence…and even if their superior officers issued a counter-order, have involved the responsibility of the State, since they acted in their capacity as military officers and used the means placed at their disposal by virtue of that capacity.

Youmans claimYoumans claim (1926) 4 RIAA 110(1926) 4 RIAA 110

• A mob gathered around a house in Mexico within which were 3 US nationals. The mayor ordered a lieutenant to proceed with troops to put an end to the attack upon the Americans. Instead of doing that they opened fire on the house which resulted in the death of all the Americans.

• Held: We do not consider that …acts of soldiers committed in their private capacity…. it is clear that …the men were on duty under the immediate supervision and in the presence of a commanding officer.

Southern Pacific Properties (Middle East) Southern Pacific Properties (Middle East) Ltd v EgyptLtd v Egypt (1993) 32 ILM 933, ICSID(1993) 32 ILM 933, ICSID

• The co. entered into a contract with Egypt to develop land for tourism. There was strong opposition in Egypt because the plan would damage valuable antiquities. Egyptian government withdrew permission. They argued that Egypt was not responsible because the permission was contrary to Egyptian law and therefore ultra vires.

• Held: A State is responsible for unlawful acts of State organs, even if accomplished outside the limits of their competence and contrary to domestic law.

9.3.3 Conduct of persons directed or 9.3.3 Conduct of persons directed or control by the Statecontrol by the State [Art. 8] [Art. 8]

• Article 8, “The conduct of a person or group of persons shall be considered an act of a State under international law if the person or group of persons is in fact acting on the instruction of, or under the direction or control of, that State in carrying out the conduct.”

Nicaragua caseNicaragua case [pp. 259-60] [pp. 259-60]

• The test of “effective control”• “It would in principle have to be proved that that

State had effective control of the military and paramilitary operations in the course of which the alleged violations are committed. The Court …takes the view that the contras remain responsible for their acts, and that the United States is not responsible for the acts of the contras, but for its own conduct vis-à-vis Nicaragua.: [Must issue specific instructions concerning each of the unlawful action.]

Prosecutor v Tadi`cProsecutor v Tadi`c [p. 260] [p. 260]

• The test for whether the conduct of group is attributable to the State is whether they are under the ‘overall control’ of a State, without necessarily this State issuing instructions concerning each specific action.

• The ILC Article 8 adopts the somewhat stricter test of the Nicaragua case.

9.3.4 Conduct of an Insurrectional9.3.4 Conduct of an Insurrectional or other Movement or other Movement(1)Conduct of a successful insurrectional

movement which becomes a new government

[Art. 10] 1. The conduct of an insurrectional movement

which becomes the new government of a State shall be considered an act of that State under international law.

Short v Iran Short v Iran (1987) 16 Iran-US CTR 76(1987) 16 Iran-US CTR 76

• Short, an American citizen, was employed by an American co. in Iran. He alleged that he was forcefully expelled from Iran 3 days before the Revolutionary Govt. took office and claimed damages for his loss of employment benefits.

• Held: (a) Where a revolution leads to the establishment of a new government the State is responsible for the acts of the overthrown government insofar as the latter maintained control of the situation.

Short v Iran Short v Iran [Cont.][Cont.]

(b)The successor government is also responsible for the acts imputable to the revolutionary movement even if those acts occurred prior to its establishment, as a consequence of the continuity existing between the new organization of the State and the revolutionary movement.

(c) The claimant is unable to identify any agent of the revolutionary movement, the actions of which compelled him to leave Iran. The acts of supporters of a revolution [as opposed to its agents] cannot be attributed to the government. See judgment of the ICJ in Tehran Hostage case.

(2) (2) Unsuccessful or on-goingUnsuccessful or on-going insurrectional or other movementinsurrectional or other movement

- In fact the conduct of unsuccessful or on-going insurrectional movement can be assimilated to that of private individuals.

- It can be placed on the same footing as that of persons or groups who participate in a riot or mass demonstration, and it is likewise not attributable to the State [unless the State itself is guilty of breach of good faith or negligent in suppressing insurgency, etc.].

Home Missionary Society ClaimHome Missionary Society Claim(1920) 6 RIAA 42 (1920) 6 RIAA 42

The natives of Sierra Leone revolted against the British because they did not want the collection of a new tax. During the rebellion, all the United States’ missions were attacked and destroyed, and some of the missionaries were murdered.

Held: It is a well-established principle of international law that no government can be held responsible for the act of rebellious bodies of men committed in violation of its authority, where it is itself guilty of no breach of good faith, or of no negligence in suppressing insurrection.

Sambaggio caseSambaggio case (1903) 10 RIAA 499 (1903) 10 RIAA 499

An Italian national sought compensation for damage caused by unsuccessful revolutionaries in Venezuela.

Held: The very existence of a revolution presupposes that a certain set of men have gone beyond the power of the authorities; and unless the government has failed to use promptly and with appropriate force its constituted authority, it cannot reasonably be said that it should be responsible for a condition of affairs created without its volition.

9.3.5 Conduct acknowledged and 9.3.5 Conduct acknowledged and adopted by a State as its own adopted by a State as its own

[Article 11] Conduct which is not attributable to a State

under the preceding articles shall nevertheless be considered an act of that State under international law if and to the extent that the State acknowledges and adopts the conduct in question as its own.

United States Diplomatic and Consular United States Diplomatic and Consular Staff in Tehran CaseStaff in Tehran Case (1980) ICJ Rep. 3 (1980) ICJ Rep. 3

• In 1979, several hundred student-demonstrators occupied the US Embassy in Tehran by force and held the embassy staff as hostages.

• The Court divided the events into two phases. • In the first stage, the attack was carried out by

militants who in no way could be regarded as “agents” or organs of the Iranian State’. Therefore, according to the Court, the militants’ conduct could not be imputable to the State on that basis.

Tehran Hostage case Tehran Hostage case [Cont.][Cont.]

• Nevertheless Iran was held responsible in that it failed to protect the embassy and the diplomats as required by international law (Vienna Convention on Diplomatic Relations, 1961) .

• The second phase started after completion of the occupation of the embassy. At this stage, the Iranian Government was legally bound to bring to an end the unlawful occupation and pay reparation. Instead, it approved and endorsed the occupation and even issued a decree stating that the American embassy was a centre of espionage.

Tehran Hostage case Tehran Hostage case [Cont.][Cont.]

• The decree went on expressly to declare that the embassy and the hostages would remain as they were until the US had handed over the former Shah for trial.

• The approval given to the acts of the militants and the decision to perpetuate them translated continuing occupation of the embassy and detention of the hostages into acts of that State. The militants had now become agents of the Iranian State for whose acts the State itself was internationally responsible.

9.3.6 Conduct of private persons9.3.6 Conduct of private persons – – not attributable not attributable• In principle, a State is not responsible for

the acts of private individuals, unless they were in fact acting on behalf of that State.

• However, sometimes the acts of private individuals may be accompanied by some act or omission on the part of the State, for which the State is liable. The following are examples of such act or omission:

State will be responsible for its own omission State will be responsible for its own omission or inactionor inaction

(1) Failure to take reasonable care (due diligence) to prevent private individuals from committing wrongful acts against foreign nationals;

(2) Failure to punish responsible individuals or to provide the injured foreigner with the opportunity of obtain reparation from the wrongdoers in the local courts. [Denial of justice];

(a) Failure to exercise “due diligence”(a) Failure to exercise “due diligence” Asian Agricultural Products Ltd v Sri Lanka • A British company brought an action against Sri

Lanka and claimed compensation for the destruction of its Sri Lankan farm.

• The farm was in an area that was largely under the control of Tamil Tiger rebels. The farm management had offered to dismiss farm staff thought by the Government to be in league with them.

• Neglecting this offer, the Government forces launched a vast counter-insurgency operation in that area.

• Some company workers were killed and the

• farm was destroyed. • The Tribunal held that Sri Lanka was

responsible because it violated its due diligence obligation.

(b) Denial of justice(b) Denial of justice

• A State is responsible under international law if it fails to punish responsible individuals or to provide the injured foreign national with the opportunity of obtaining compensation from the wrongdoers in the local courts.

• In Janes Claim, Janes, an American citizen, was murdered at a mine in Mexico. The person who killed Janes was well known in the community where the killing took place.

• There is evidence that a Mexican magistrate was informed of the shooting within five minutes after it took place. However, even after eight years had elapsed, the murderer had not been apprehended and punished by the Mexican authorities.

• The Commission found that Mexico was responsible for the denial of justice and awarded damages accordingly.

9.4 BEACH OF AN INTERNATIONAL 9.4 BEACH OF AN INTERNATIONAL OBLIGATIONOBLIGATION[The Second Element][The Second Element]

[Article 12] There is a breach of an international obligation

by a State when an act of that State is not in conformity with what is required of it by that obligation, regardless of its origin or character.

Art. 12: ExplanationArt. 12: Explanation

• The phrase “regardless of its origin” refers to all possible sources of international obligations.

• In the Rainbow Warrior Arbitration (1990) 20 RIAA 217, it was held that “ any violation by any State of any international obligation, of whatever origin, gives rise to State responsibility and consequently, to the duty of reparation.

Art. 12: ExplanationArt. 12: Explanation

• International obligations may be established by a customary rule of international law, by a treaty, by a judgment given by the ICJ or any other international tribunal.

• In international law, there is no distinction between “contractual” and “tortious” responsibility nor between “civil” and “criminal” responsibility.

9.5 DEFENCES9.5 DEFENCES

[Arts. 20-26] These articles deal with the six types of

‘defences’ available to a respondent State, namely:

(1) consent; (2) self-defence; (3)countermeasures; (4)force majeure;

(5) distress; and (6) necessity.

Force majeureForce majeure

• It is defined in Article 23 (1) as “the occurrence of an irresistible force or of an unforeseeable event, beyond the control of the State, making it materially impossible in the circumstances to perform the obligation.”

• Rainbow Warrior Arbitration: France argued that urgency of medical treatment amounted to force majeure.

• Held: “the test for force majeure was one of ‘absolute and material impossibility’. It does not cover a circumstance rendering performance of the obligation more difficult or burdensome.”

DistressDistress

• Distress is defined in Article 24 (1) as a situation where “the author of the [otherwise wrongful] act…has no other reasonable way, in a situation of distress, of saving the author’s life or the lives of other persons entrusted to the author’s care”.

NecessityNecessity

• Article 25 (1): An act which (a) is the only means for the State to safeguard an essential interest against a grave and imminent peril; and (b) does not seriously impair an essential interest of the State or States towards which the obligation exists, or of the international community as a whole. The ILC, in its commentary affirms the exceptional nature of the plea of necessity.

9.6 LEGAL OCNSEQUENCES OF AN 9.6 LEGAL OCNSEQUENCES OF AN INTERNATIONAL WRONGFUL ACTINTERNATIONAL WRONGFUL ACT

• The following are the legal consequences of an internationally wrongful act:

(1) Continued duty of performance; (2) cessation and non-repetition; (3) Reparation; (4) Countermeasures.

(1) Reparation for injury(1) Reparation for injury

A important legal consequence of an internationally wrongful act is that the injured State is entitled to obtain reparation from the wrongdoing State.

Chorzow Factory CaseChorzow Factory Case

Reparation must, as far as possible, 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. Restitution in kind, or, if this is not possible, payment of a sum corresponding to the value which a restitution in kind would bear ….

Forms of reparationForms of reparation

[Article 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.

RestitutionRestitution

[Article 35]A State responsible for an internationally wrongful

act is under an obligation to make restitution, that is, to re-establish the situation which existed before the wrongful act was committed, provided and to the extent that restitution:

(a) Is not materially impossible;(b) Does not involve a burden out of all proportion

to the benefit deriving from restitution instead of compensation.

• Material restitution (Restitution in kind) [p. 289] An example of restitution in kind is found in the

Temple of Preah Vihear Case (1962)ICJ Rep. 6. in which the World Court ordered Thailand to

return to Cambodia religious objects it had taken illegally from a temple in Cambodia.

CompensationCompensation

[Article 36] 1. The State responsible for an internationally

wrongful act is under an obligation to compensate for the damage caused thereby, insofar as such damage is not made good by restitution. …

• See, e.g., The I’m Alone case, where the Commissioners recommended the payment by the United States of $ 25.000 as a material amend in respect of the wrong committed by the United States in sinking the I’m Alone.

SatisfactionSatisfaction

[Article 37] 1. The State responsible for an internationally

wrongful act is under an obligation to give satisfaction for the injury caused by that act insofar as it cannot be made good by restitution or compensation.

2. Satisfaction may consist in an acknowledgement of the breach, an expression of regret, a formal apology or other appropriate modality….

A good example of different forms of satisfaction can be found in the Borchgrave case,(1937) PCIJ, Ser. A/B, No 72, 165. In this case, a Belgian national was found dead on the roadside in Madrid. The Belgium Government demanded as reparation: (1) an expression of the Spanish Government’s excuses and regrets; (2) transfer of the corpse to the port of embarkation with military honours; …and (3) just punishment of the guilty.

See also Rainbow Warrior Arbitration

(2) Countermeasures(2) Countermeasures

Apart from self-defence. There are two traditional types of self-help, namely: (1) retorsion; and (2) reprisals.

A retorsion is an unfriendly act against an unfriendly act which does not involve a breach of an international obligation. Examples are:

(1) Disruption of normal diplomatic relations;(2) Embargoes of various kinds;(3) Withdrawal of voluntary aid programmes.

• A reprisal is an unlawful act in response to an unlawful act of another State.

• According to modern terminology, the term ‘countermeasures’ mainly refers to ‘reprisals’.

• The pre-condition for any lawful countermeasure or reprisal is that another State must first commit an internationally wrongful act against the State taking the countermeasure.

• A countermeasure (although it involves a breach of an international obligation) is done in response to the wrongful conduct of the wrong-doing State and is, therefore, deemed to be lawful under international law.

• Examples: Suppose that State B committed an internationally wrongful act against State A.

(1) A could seize or freeze the assets of B available within its jurisdiction;

(2) A could suspend its treaty obligations towards B;

(3) A could confiscate property owned by companies

of B available in A.• Like other forms of self-help, countermeasures

are open to abuse. They are, therefore, justified only in certain conditions and are subject to stringent limitations.

Limitations on countermeasuresLimitations on countermeasures

(1) Countermeasures must be directed at the wrongdoer State only and with the objective of compelling it to cease the wrongful act or to make reparation for it [Art. 49];

(2) Countermeasures shall not involve the use of armed force [Art. 50(1)(a)] [obligation to refrain from the use of force, Art. 2(4) of the Charter] ;

(3) Countermeasures shall not violate basic obligations under international law, e.g., obligations for the protection of fundamental human rights or obligations under jus cogens [Art. 50(1) (b)(c)&(d)];

Limitations (Cont.)Limitations (Cont.)

(4) Countermeasures shall not affect any dispute settlement procedure between two parties and inviolability of diplomatic agents, etc.[Art. 50(2)]

(5) Principle of ‘Proportionality’: countermeasures must be commensurate with the injury suffered [Art. 51]; see - Naulilaa case(1928) where it was held that one should consider as excessive and therefore unlawful, countermeasures that are out of all proportion to the act motivating them; see also Air Services Arbitration, (1946) 17 RIAA 417.

Conditions relating to resort to Conditions relating to resort to countermeasurescountermeasures

(1) Before taking countermeasures, the injured State shall notify its decision to take them and offer to negotiate [Art. 52(1)];

(2) Countermeasures may not be taken and if already taken must be suspended, if:

(a) the wrongful act has ceased; and (b) the dispute is pending before a court or

tribunal which has the authority to make decisions binding on the parties [Art. 52(3)(4)].

9.7 INVOCATION OF RESPONSIBILITY 9.7 INVOCATION OF RESPONSIBILITY RESPONSES BY THE INJURED STATE RESPONSES BY THE INJURED STATE AND OTHER STATESAND OTHER STATES• Once it has been established that a State

is responsible under international law, the next step to be considered is what the injured State, or other States having the legal interest in the breach, may do, or what action they may take in order to secure the performance of the obligations of cessation and reparation on the part of the responsible State.

9.7.1 Invocation of responsibility by an 9.7.1 Invocation of responsibility by an injured Stateinjured State

• Under Article 42, a State is entitled as ‘an injured State’ to invoke the responsibility of another State if the obligation breached is owed to:

(a) that State individually; or (b) a group of States including that State, or the

international community as a whole, and the breach of the obligation specially affects that State.

• The concept of the ‘injured State’ is important in the invocation of responsibility. This is the State whose individual right has been infringed by the internationally wrongful act or which has otherwise been particularly affected by that act.

• A state which is injured in the sense of Article 42 is entitled to resort to all means of redress. It can raise a claim against the responsible State, commence proceedings before an international tribunal, or take countermeasures.

9.7.2 Invocation of responsibility by a 9.7.2 Invocation of responsibility by a state other than the injured state: state other than the injured state:

The concept of obligations The concept of obligations erga omneserga omnes • The term “erga omnes” means “towards

all”. • Obligations erga omnes are concerned with

the enforceability of norms of international law, the violation of which is deemed to be an offence not only against the state directly affected by the breach, but also against all members of the international community.

• According to Article 48 (1), “any State other than an injured State is entitled to invoke the responsibility of another State in accordance with paragraph 2 if: … (b) The obligation breached is owed to the international community as a whole.”

• The existence of the obligations erga omnes has been confirmed by the International Court of Justice in Barcelona Traction, Light and Power Co. case:

Barcelona Traction CaseBarcelona Traction Case

• 33. … [A]n essential distinction should be drawn between the obligations of a State towards the international community as a whole, and those arising vis-à-vis another State in the field of diplomatic protection. By their very nature the former are the concern of all States. In view of the importance of the rights involved, all States can be held to have a legal interest in their protection; they are obligations erga omnes.

• 34. Such obligations derive, e.g., in contemporary international law, from the outlawing of acts of aggression, and of genocide, as also from the principles and rules concerning basic rights of the human person including protection from slavery and racial discrimination.

9.8 TREATMENT OF FOREIGN 9.8 TREATMENT OF FOREIGN NATIONALSNATIONALS

• A state has no general obligation to admit foreigners or foreign companies to its territory. However, once foreign nationals or companies are present in its territory, the State is under an international obligation not to ill-treat them.

• If the State violates this obligation it may incur international responsibility to the State of whom the person is a national.

• This type of State responsibility is one of the commonest forms of responsibility that arises in international law today.

The law of diplomatic protectionThe law of diplomatic protection

• The national State has the right under international law to extend diplomatic protection over its nationals or corporations present in a foreign country.

• The ‘law of diplomatic protection’ is an important subset of State responsibility. It can be defined as “resort to diplomatic action or other means of peaceful settlement by a State adopting in its own right the cause of its national in respect of an injury to that national arising from an internationally wrongful act of another State.”

9.8.1 National treatment or international 9.8.1 National treatment or international minimum standard?minimum standard?

• Whether or not a State is internationally responsible for the way it treats foreign nationals depends on the standard of treatment which international law obliges that State to adopt.

• It is only if the State falls below this standard that it becomes internationally responsible.

• Unfortunately, there is considerable debate as to the correct standard of treatment.

• There are two contrary views in this respect: the standard of national treatment and international minimum standard.

National treatmentNational treatment

• The state is not responsible if it accords foreign nationals standard of treatment which is not less than its own nationals, even though that standard may be much lower compared to international standard.

• it is favoured by ‘developing States’ especially because it allows them to establish an economic and social system of their own design.

• It allows a State to nationalize property owned by foreigners without fear of international responsibility, if its national law allowed it to nationalize the property of its own nationals.

International minimum standardInternational minimum standard

• Many states, especially those of the developed world, maintain that the treatment of foreign nationals is governed by an ‘international minimum standard’.

• This means that every state must treat foreign nationals within its territory by reference to a minimum international standard, irrespective of how national law allows that State to treat its own nationals. The standard has enjoyed the support of many international tribunals. [e.g., Neer claim]

What is the correct standard to be What is the correct standard to be followed?followed?

• There is no real consensus about which standard is obligatory under customary international law.

• This has caused considerable problems in the field of expropriation of foreign property.

• Although it appears that with globalization, more and more countries are ready to support the international minimum standard, the acute problem is that there is no agreement in respect of the content of this standard.

Examples of the international minimum standard in Examples of the international minimum standard in operation operation

• Duty not to harm: The State and its organs have the legal obligation to refrain from harming foreign nationals (see Youmans Claim).

• Not to mistreat in lawful custody: In the Roberts Claim, it was held that the treatment of Roberts in Mexican prison and the length of detention before facing trial were unreasonable and below the ‘ordinary standards of civilization’.

• Denial of justice: “A State is responsible if an injury to an alien results a denial of justice.”

• Denial of Justice exists when there is a denial, unwarranted delay or obstruction of access to courts, gross deficiency in the administration of judicial or remedial process, failure to provide those guarantees which are generally considered indispensable to the proper administration of justice, or a manifestly unjust judgment.

• In Chattin Claim, Mexico was held responsible for inadequacies and unfairness in the trial and prosecution of Chattin.

9.8.2 Admissibility of claims9.8.2 Admissibility of claims

Article 44 The responsibility of a State may not be invoked

if: (a) The claim is not brought in accordance with

any applicable rule relating to the nationality of claims;

(b) The claim is one to which the rule of exhaustion of local remedies applies and any available and effective local remedy has not been exhausted.

9.8.2.1 Nationality of claims9.8.2.1 Nationality of claims

A state can make an international claim against another State when the injured person is its national.

The general rule on ‘protection of nationals’ can be found in the following leading case:

Mavrommattis Palestine Concession case Mavrommattis Palestine Concession case (Jurisdiction)(Jurisdiction) (1924) PCIJ Ser. A, No. 2, p.12(1924) PCIJ Ser. A, No. 2, p.12

• It is an elementary principle of international law that a state is entitled to protect its subjects, when injured by acts contrary to international law committed by another state, from whom they have been unable to obtain satisfaction through the ordinary channels. By taking up the case of one of its subjects and by resorting to diplomatic action or international judicial proceedings on his behalf, a state is in reality asserting its own rights.

Bond of nationality: basis for the claimBond of nationality: basis for the claimPanevezys-Saldutiskis CasePanevezys-Saldutiskis Case

• The case concerned a claim for compensation for the expropriation of a railway company filed by Estonia against Lithuania.

• Held: It is the bond of nationality between the state and the individual which alone confers upon the state the right of diplomatic protection, and… the right to take up a claim.

(1)(1) Protection of private individualsProtection of private individuals

The Hague Convention on the Conflict of Nationality Laws, 1930

Article 1 It is for each state to determine under its own law

who are its nationals. This law shall be recognised by other states in so far as it is consistent with international conventions, international customs, and the principles of law generally recognised with regard to nationality …

Hague Convention Hague Convention [Cont.][Cont.]Article 5Article 5

Within a third state, a person having more than one nationality shall be treated as if he had only one…. A third state shall, of the nationalities which any such person possesses, recognise exclusively in its territory either the nationality of the country in which he is habitually and principally resident, or the nationality of the country with which in the circumstances he appears to be most closely connected.

Nottebohm caseNottebohm case Liechtenstein v Guatemala; 1955 ICJ Rep. 4Liechtenstein v Guatemala; 1955 ICJ Rep. 4

- Mr. Nottebohm was born in Germany. In 1905 he went to Guatemala, where he resided and conducted his business activities until 1943.

- In 1939, he visited Liechtenstein to apply for naturalization. After acquiring Liechtenstein nationality, he went back to Guatemala.

- Later, Guatemala expelled, and seized the property of, Nottebohm. Liechtenstein instituted proceedings against Guatemala. Guatemala argued that Liechtenstein could not extend diplomatic protection to Nottebohm in a claim against it.

Nottebohm caseNottebohm case [Cont.][Cont.]

Judgment of the ICJ• …Nationality is a legal bond having as its basis

a social fact of attachment, a genuine connection of existence, interests and sentiments, … the individual upon whom it is conferred … is in fact more closely connected with the population of the state conferring nationality than with that of any other state.

Nottebohm case Nottebohm case [Cont.][Cont.]

• He (Nottebohm) had been settled in Guatemala for 34 years. He had carried on his [business] activities there.

• In contrast, his actual connections with Liechtenstein were extremely tenuous. No settled abode, no prolonged residence in that country. No intention of settling there. … on the contrary, he returned to Guatemala very shortly after his naturalization and showed every intention of remaining there. …

Nottebohm case Nottebohm case [Cont.][Cont.]

These facts clearly establish, on the one hand, the absence of any bond of attachment between Nottebohm and Liechtenstein and, on the other hand, the existence of a long-standing and close connection between him and Guatemala. That naturalization …lacking in genuineness requisite to an act of such importance, …It was granted without regard to the concept of nationality adopted in international relations.

Nottebohm case Nottebohm case [Cont.][Cont.]

• (Therefore) Guatemala is under no obligation to recognise a nationality granted in such circumstances. Liechtenstein consequently is not entitled to extend its protection to Nottebohm vis-à-vis Guatemala and its claim must, for this reason, be held to be inadmissible. …

(2) (2) Protection of CompaniesProtection of Companies

• A State can bring an international claim on behalf of a company possessing its nationality

• A company is regarded as having the nationality of the State under the laws of which it is incorporated.

Barcelona Traction, Light and Power CoBarcelona Traction, Light and Power Co..,, [1970 [1970 ICJ Rep. 3]ICJ Rep. 3]• Barcelona Co. was established in Canada under

Canadian law to develop electricity supplies in Spain. In 1948 a Spanish court declared the Co. bankrupt and ordered the seizure of the assets of the Co. in Spain. Canada intervened on behalf of the company but later withdrew. Belgium brought this claim in respect of the injury to its nationals who were shareholders resulting from the injury to the company. Spain objected that since the injury was to the company, not the shareholders, Belgium had no right to bring the claim.

Barcelona Traction caseBarcelona Traction case [Cont.][Cont.]

Judgment of the ICJ• The concept …of the limited liability company …

the separate entity of the company and that of the shareholders, each with a distinct set of rights. … So long as the company is in existence the shareholder has no right to the corporate assets. …

• Barcelona Traction has lost all its assets in Spain, and was placed in receivership in Canada….

Barcelona Traction caseBarcelona Traction case [Cont.] [Cont.]

• It cannot, however, be contended that the corporate entity of the company has ceased to exist.… It has not become incapable in law of defending its own rights and the interests of the shareholders. Only in the event of the legal demise of the company are the shareholders deprived of the possibility of a remedy available through the company; …that an independent right of action for them and their government could arise.

Barcelona Traction caseBarcelona Traction case [Cont.] [Cont.]

• The traditional rule attributes the right of diplomatic protection of a corporate entity to the state under the laws of which it is incorporated and in whose territory it has its registered office.

• In the present case, it is not disputed that the company was incorporated in Canada and has its registered office in that country.

• Accordingly, the Court rejects the Belgian Government’s claim…

9.8.2.2 Exhaustion of local remedies9.8.2.2 Exhaustion of local remedies

• It is an established rule of customary international law that an injured individual (or company) must have exhausted any available and effective local remedy in the responsible State before an international claim can be brought on his behalf. [See Art. 44 (b)].

Ambatielos ArbitrationAmbatielos ArbitrationGreece v UK (1956) 12 RIAA 83 Greece v UK (1956) 12 RIAA 83

- Ambatielos, a Greek ship-owner, contracted to buy some ships from the British Government and later accused the British government of breaking the contract.

- In the litigation before the English HC, Ambatielos failed to call an important witness and lost; his appeal was dismissed by the CA.

- Greece made a claim on his behalf before an international arbitral tribunal.

- Held: Ambatielos failed to exhaust local remedies ( he had failed to appeal from the CA to the H L).

Robert E. BrownRobert E. Brown case case(US v UK), (1923) 6 RIAA 120, at 129(US v UK), (1923) 6 RIAA 120, at 129

• The Tribunal held that the local remedies rule did not apply because it found that “All three branches of the Government of the South African Republic conspired to ruin the claimant’s enterprise…. The judiciary, at first recalcitrant, was at length reduced to submission and brought into line with a determined policy of the Executive.”

Finnish Ship-owners ArbitrationFinnish Ship-owners ArbitrationFinland v UK, (1934) 3 RIAA 1479Finland v UK, (1934) 3 RIAA 1479

• During the World War I, 13 ships belonging to Finnish ship-owners were used by the UK Government, of which 4 were lost.

• The ship-owners claimed damages before the Admiralty Arbitration Board in the UK. The Board decided: the ships were requisitioned by Russia and not, as required by the British legislation, by the UK, and that accordingly no compensation was payable.

• No appeal. The matter was later brought by Finland before an international arbitration tribunal.

Finnish Ship OwnersFinnish Ship Owners [Cont.][Cont.]

The UK objected on the ground that the Finnish ship-owners had not exhausted local remedies in the UK. The arbitrator rejected this objection.

Award of the Arbitrator• The local remedies rule does not apply where

there is no effective remedy. This is the case where a recourse is obviously futile. …

• The appealable points of law obviously would have been insufficient to reverse the decision of the Arbitration Board.