December 13 - 31, 1999 Developments in international law, prepared by the Attorney-Editors of International Legal Materials The American Society of International Law
This year-end issue marks the departure of ILM
Interim Editor David A. Levy, who is leaving the American
Society of International Law to accept a position with
UNCITRAL, the United Nations Commission on International
Trade Law. Mr. Levy, along with Elizabeth Fabrizio,
co-founded and developed International Law In Brief.
In future, questions or feedback concerning the Brief
should be directed to Peter C. Hansen, ILM Editor,
at phansen@asil.org
Judicial
and Other Decisions
ICJ: Case Concerning Kasikili/Sedudu
Island (Botswana/Namibia) (December 13, 1999)
Botswana and Namibia submitted to the ICJ ("Court")
their competing claims to a 1.5 square-mile island in
the middle of the Chobe River adjacent to Namibia's
northeastern Caprivi Strip. The Court stated that
it had to determine: 1) the boundary between Botswana
and Namibia around the island; and 2) the legal status
of the island. Para. 17. The Court, on the bases
of the Anglo-German Treaty of July 1, 1890 ("Treaty")
and the rules and principles of international law, awarded
the island to Botswana on a vote of 11 to 4. Paras.
100-02, 104. The Court also held unanimously that
in both channels each countries' nationals, and vessels
flying the flag of either Botswana or Namibia, shall
be accorded equal national treatment. Paras. 103-04.
Although neither Botswana nor Namibia is a party to
the Vienna Convention on the Law of Treaties ("Convention"),
the Court applied Article 31 of the Convention in interpreting
the Treaty, which established colonial sphere-of-influence
boundaries in the area. Para. 18. Article 31 requires
good-faith interpretation of a treaty, with ordinary
meaning to be given to its terms in their context and
in light of the treaty's object and purpose.
The Court first concluded that the terms "centre of
the main channel" and "Thalweg des Hauplaufes",
found respectively in the English and German versions
of the Treaty, were considered synonymous by the English
and Germans, and while used variously by the current
parties had not been made an issue. Para. 89.
After reviewing various methods for determining the
"main channel" proposed by the parties, as well as historical
surveys, the Court concluded that the northern channel
around the island, being deeper and wider in non-flood
periods over its known history, and also being better
for navigation, is the "main channel." Paras. 32, 38,
40-41. The Court noted that this finding was supported
by surveys conducted by the parties and others. Para.
42, 80.
The Court then set itself to determine the legal status
of the island by first reviewing the extent to which
the object and purpose of the Treaty could clarify the
meaning to be given to its terms. After examining
the lengthy history of the dispute, the Court concluded
that since 1890 no interpretive agreement had been reached
by any of the parties regarding the legal status of
the island under the Treaty. Paras. 5, 62-63, 68-69,
79.
The Court also decided that the long-standing, unopposed
presence of Masubia tribespeople from Namibia's Caprivi
Strip (north of the island) does not constitute subsequent
practice regarding the island's legal status under the
Treaty. Para. 75. The Court noted that establishing
such practice would require that the tribespeople's
occupation be linked to the Caprivi authorities' belief
that the boundary followed the southern channel, and
also that the authorities to the south were fully aware
of and accepted this as a confirmation of the treaty
boundary. Para. 74.
The Court determined itself to be unable to draw conclusions
from the many maps proffered by the parties, on the
ground that none officially reflected the intentions
of the parties to the 1890 Treaty, or any express or
tacit agreement between them or their successors regarding
the validity of the boundaries depicted. Para. 87.
The Court entertained Namibia's arguments in favor of
acquisitive prescription, largely on the basis of the
Masubia tribespeople's use of the island, but rejected
them on the ground that the requisite conditions cited
by Namibia itself were not satisfied in this case. Paras.
97-99.
Three judges filed declarations. Judge Ranjeva
noted that the Court had concluded only in respect to
the specific facts of the case that the Masubia's use
of the island did not constitute possession 'a titre
du souverain (i.e. exercising public power
in the name of the authorities). Judge Koroma
stated that the decision served the purpose of contributing
to peace and stability, for which the Court is entitled
to lay down terms. Judge Koroma also noted that
the Court had applied the principle of uti possidetis
juris recognized by African states as having boundaries
follow those inherited at independence. Judge
Higgins cautioned that emphasis should be given to determining
the intention of the parties to the 1890 Treaty, rather
than decide in abstracto the meaning today of
"main channel" by "mechanistic appreciation of relevant
indicia."
Two judges filed separate opinions. Judge Koojimans
stated that Namibia's prescription arguments should
have been declared inadmissible, and that under the
Special Agreement by which the parties referred the
case to the Court the Court is precluded from applying
the rules and principles of international law independently
of the Treaty. Judge Oda stated that the Court
appeared to rely excessively on the Vienna Convention,
and also noted that the compromis was unclear
and improperly drafted, as the parties had apparently
moved from viewing the island's legal status as dependent
on the boundary under the Treaty, to seeing legal status
as a separate issue under the rules and principles of
international law.
Four judges filed dissenting opinions. Judge
Fleischauer asserted that the southern channel should
be considered the "main channel" by virtue of the Chobe
Ridge to the south, which is visible even at flood-stage.
Vice-President Weeramantry expressed doubt that scientific
evidence could determine the "main channel" as envisaged
by the 1890 Treaty at that time. Also, given the
fact that tourist traffic flows overwhelmingly in the
southern channel, Vice-President Weeramantry concluded
that the southern channel was the main one, that the
island should therefore belong to Namibia, and that
a bilateral joint regime should be established to administer
river use and environmental protection. Judge Rezek
determined that certain principles of river frontiers,
most especially the equality of access to watercourse
resources, as well as analysis of the 1890 Treaty's
object and goal, lead to the southern channel being
the main one.
Judge Rezek also discounted the Court's "'a titre
du souverain " analysis of the Masubia's occupation
on the ground that it would require consideration of
the time and place, and stated that the Masubia, as
private persons alone occupying the island, are perfect
examples of pacific occupation who deserve the protection
of law. Judge Parra-Aranguren asserted that the only
relevant period to consider was that before the British
occupation of the German Caprivi in World War I, and
concluded that: 1) the southern channel is the "main
channel"; and 2) that the island should form part of
Namibia, on the ground that the Masubia were the only
occupiers of the island, and their chiefs are acknowledged
by Botswana as having been "in a certain sense" agents
of the colonial administration during the relevant period.
PH http://www.icj-cij.org/icjwww/idocket/ibona/ibonaJudgments/ibona_ijudgment_toc.htm
U.S. District Court - DC Circuit:
Flatow v. Islamic Republic of Iran, No. 97-396 (Dec.
20, 1999)
Flatow was awarded a $225 million default judgment
against Iran arising out of the wrongful death of his
daughter in Gaza at the hands of a Palestinian group
funded exclusively by Iran. Flatow sought to execute
judgment against real estate belonging to Iran in Washington,
D.C., including the former Iranian embassy, and two
bank accounts -- the first consisting of excess rental
fees and interest generated by the properties, and the
second, which originally contained Iranian diplomatic
and consular accounts, containing funds generated by
the properties, but used for maintenance and upkeep.
Iran opposed the leasing of the properties by the US
Department of State. The District Court held that
the real property and the accounts were immune from
execution of Flatow's judgment under the Foreign Sovereign
Immunities Act.
Regarding the real property, the court rejected the
applicability of the "commercial activity" exception
to sovereign immunity, noting that to withdraw sovereign
immunity from a foreign state as a consequence of the
actions of non-agent third parties would expand the
commercial activity exception beyond the narrow scope
intended by Congress. Furthermore, the court noted
that the actions of the US government in taking over
the properties of a foreign state and maintaining them
for that state, pursuant to the Foreign Missions Act,
is an "inherently sovereign act", and therefore immune
from the enforcement of a judgment.
Similarly, the court characterized the building maintenance
funds in the second account as arising out of the protective
measures taken by the sovereign actions of the United
States pursuant to the Foreign Missions Act, and consequently
immune from judgment. Also, as the account originally
contained Iranian diplomatic and consular funds, it
was subject to both the International Emergency Economic
Powers Act and the Iranian Assets Control Regulations.
The court held that the rental proceeds in the first
account constituted US, rather than Iranian property,
and are subject to the sovereign immunity of the United
States. The court reasoned that if the property
had not been leased, the US government would have needed
to fund maintenance and repair costs out of the US treasury,
and that to deem the income to be Iranian when the Iranian
government opposed the leases would be to grant the
Iranian government a windfall.
The court expressed regret that "Flatow's original
judgment against Iran has come to epitomize the phrase
'Pyrrhic victory' [but that] unless or until Congress
decides to enact a law that authorizes the attachments
[Flatow] seeks, this Court lacks the proper means to
assist him with such endeavors." DL
Download in Adobe pdf format http://www.dcd.uscourts.gov/97-396c.pdf
Hong Kong Court of Final Appeal:
Hong Kong SAR v. Ng Kung Siu, FACC No. 4 of 1999 (December
15, 1999)
Ng Kung Siu and Lee Kin Yun took part in a protest
held in Hong Kong concerning the state of democracy
in the People's Republic of China ("PRC"). Ng
and Lee carried two flags -- a PRC flag and a Hong Kong
SAR flag -- which had been defaced and the word "Shame"
had been written upon both flags. Ng and Lee were
arrested and convicted of violating provisions of the
PRC National Flag Ordinance and the Hong Kong Regional
Flag Ordinance. On appeal, Ng and Lee asserted
that both laws violated the freedom of speech guaranteed
by both the Hong Kong Basic Law and Article 19 of the
International Covenant on Civil and Political Rights
("ICCPR"). The Court of Appeal allowed the appeals and
quashed the convictions.
The Court of Final Appeal reversed, holding that while
"freedom of expression is a fundamental freedom in a
democratic society," the restriction on expression was
narrowly limited, and was "necessary" to preserve the
legitimate "societal" and "community" interests in protecting
the national and regional flags. The Court reasoned
that the incorporation of the term "public order (ordre
public)" in the freedom of expression exception
of ICCPR Article 19(3) was broader than the common-law
concept of law and order, and is contextual -- "a function
of time, place and circumstances." The Court noted that
in determining whether the flag desecration laws were
necessary, consideration should be given to the views
of the legislature that found such laws appropriate.
"Hong Kong is at the early stage of the new order following
resumption of the exercise of sovereignty by the People's
Republic of China. The implementation of the principle
of "one country, two systems" is a matter of fundamental
importance, as is the reinforcement of national unity
and territorial integrity. Protection of the national
flag and the regional flag from desecration, having
regard to their unique symbolism, will play an important
part in the attainment of these goals. In these
circumstances, there are strong grounds for concluding
that the criminalisation of flag desecration is a justifiable
restriction on the guaranteed right of the freedom of
expression." DL http://www.info.gov.hk/jud/guide2cs/html/cfa/judmt/facc_4_99.htm
WTO Panel Report: United States
- Sections 301-310 of the Trade Act of 1974, WT/DS152/R
(December 22, 1999)
The European Communities brought a claim against the
United States before a WTO Dispute Settlement Panel,
alleging that Section 304 of the Trade Act of 1974 ("Section
304") is inconsistent with US obligations under Article
23 of the Dispute Settlement Understanding ("DSU"),
in that the US Trade Representative may make a determination
regarding another State's trade actions within a time
frame which is shorter than the time period provided
under to the WTO's DSU process. The Panel found
that the statutory language of Section 304 constituted
a prima facie violation, but held that the interpretation
contained in the US Statement of Administrative Action
("SAA") accompanying the legislation implementing the
Uruguay Round agreements authoritatively provides
that in relation to WTO Members, the US will base determinations
of impairment of US trade rights on adopted WTO Panel
or Appellate Body findings.
The Panel held that the SAA and statements made to
the Panel made Section 304 consistent with the WTO in
practice.
"The aggregate effect of the SAA and the US statements
made to us is to provide the guarantees, both direct
to other Members and indirect to the market place, that
Article 23 is intended to secure. Through the
SAA and the US statements, as we have construed them,
it is now clear that under Section 304, taking account
of the different elements that compose it, the USTR
is precluded from making a determination of inconsistency
contrary to Article 23.2(a). As a matter of international
law, the effect of the US undertakings is to anticipate,
or discharge, any would-be State responsibility that
could have arisen had the national law under consideration
in this case consisted of nothing more than the statutory
language. It of course follows that should the
US repudiate or remove in any way these undertakings,
the US would incur State responsibility since its law
would be rendered inconsistent with the obligations
under Article 23." Para. 7.126 DL
Download in Adobe pdf format http://www.wto.org/wto/dispute/wtds152r.pdf
Russian Federation: Federal Law
on Foreign Investment in the Russian Federation, N 160-FZ
(July 9, 1999)
The Foreign Investment Law guarantees foreign investors
the right to invest and to collect income and profit
from such investments, and provides the terms of business
activities for foreign investors in the Russian Federation
("RF"). (Other laws regulate investments in banks,
insurance companies, and non-profits.) Art. 1.
The Law provides for equal treatment for foreign and
domestic investors, subject to restrictions on foreign
investment enacted for the purposes of protecting public
order, private interests, or the security of the Russian
Federation. Art. 4(1), (2). Nevertheless, foreign
investors can be granted privileges, pursuant to laws
to be enacted, for the benefit of the social and economic
development of the Russian Federation. Id.
The Law guarantees legal protection and privileges to
foreign investors or companies established in the Russian
Federation with at least ten percent foreign capital,
although their subsidiaries or dependent companies are
not entitled to such rights. Art. 4(4), (5).
The Law guarantees foreign investors full and unconditional
legal protection of their activities in the Russian
Federation, including the right to receive damages resulting
from an illegal action of the government, and also provides
compensation in the event of nationalization of property
of the foreign investor or of a company with foreign
investment. Arts. 5, 8. Unless otherwise required
in the public interest, the Law provides for regulatory
stabilization for foreign investments during a seven-year
recoupment period, which the government can extend in
exceptional cases such as priority investment projects
involving manufacturing, transportation or the creation
of high dollar infrastructure with recoupment periods
longer than seven years. Art. 9. The regulatory
stabilization does not extend to changes in: 1) customs
fees on commodities directed toward the protection of
the economic interests of the Russian Federation; 2)
excise and value-added taxes on goods produced in the
Russian Federation; and 3) obligatory payments to the
Pension Fund. Id. Additionally, the Law
provides that the local authorities can grant benefits,
guarantees, or financial support to foreign investors,
while priority foreign investors receive customs benefits.
Art. 16.
Disputes arising from foreign investments will be settled
in accordance with international treaties and domestic
legislation in a court, an arbitration court, or in
international arbitration. Art. 10. Furthermore,
foreign investors have the right to reinvest or repatriate
profits or other foreign currency legally arising from
their investment activities, after paying all taxes
and related charges. Art. 11. The Law allows foreign
investors to purchase shares of stock and other securities
from both Russian companies and the Government, and
to bid in the process of privatization of former state
property. Arts. 13-14.
Finally, the Law sets forth the rules for the establishment
and liquidation of companies with foreign investment
or a branch of a foreign company in the Russian Federation,
and provides for the appointment of a federal executive
agency to be responsible for co-ordination of foreign
direct investment. Arts. 20-21, 24. BM
Note: The Law supersedes the 1991 Law of the
R.S.F.S.R. on the Foreign Investments in the R.S.F.S.R.,
published at 30 I.L.M. 913 (1991). The English
translation of the new Law originates from the U.S.
Chamber of Commerce in Moscow, and was obtained with
the help of the Moscow office of LeBoeuf, Lamb, Greene
& MacRae, L.L.P.
The Office of the US Trade Representative
has announced that the WTO General Council has
approved the terms of Jordan's accession
to the World Trade Organization. Archived at http://www.usia.gov/products/washfile/econ.shtml
International Law In Brief - Copyright 2000 - The American
Society of International Law Editors: Peter C. Hansen, Esq., David A.
Levy, Esq. Interns: Matthew Casebolt, Branislav Maric,
Adv.
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