Developments in international law, prepared by
the Editorial Staff of International Legal Materials
The American Society of International Law April 22, 2003
The United States released
the draft text of the U.S.-Chile FTA on April 3, 2003.
The U.S.-Chile FTA sets forth a free trade zone and affirms
the parties' existing rights under the WTO and other existing
agreements. In addition, the draft agreement sets forth,
inter alia, provisions on market access, rules
of origin, telecom, labor, environment, competition, investment
and dispute resolution.
Article 10.4 (Minimum Standard
of Treatment), paragraph (1), of the U.S.-Chile draft
investment chapter provides:
"Each party shall accord
to investments treatment in accordance with customary
international law, including fair and equitable treatment
and full protection and security" and further provides,
"For greater certainty, paragraph 1 prescribes the customary
international law minimum standard of treatment of aliens
as the minimum standard of treatment to be afforded to
covered investments. The concepts of 'fair and equitable
treatment' and 'full protection and security' do not require
additional substantive rights."
The draft text is subject
to legal review for clarity and consistency. Both
the Spanish and English texts of the draft agreement are
considered equally authentic.
Court of Cassation of Belgium: H.S.A et al. v. S.A. et al.,
(Decision related to the indictment of defendant Ariel
Sharon, Amos Yaron and others), No. P. 02.1139. F/1 (February
12, 2003)
Belgium's Court
of Cassation, reversing in part the Court of Appeals
decision of June 2002, held that the presence of the accused
in Belgium was not necessary for the prosecution of grave
violations of international law. The Court held
that jurisdiction could be exercised over Amos Yaron and
others for their alleged involvement in the Shabra and
Shatila massacres, thereby remanding the case to the Court
of Appeals and allowing the investigation and trial to
go forward. The Court held that the principle of
immunity for heads of state under customary international
criminal law prohibited Belgian courts from prosecuting
Israeli Prime Minister Ariel Sharon.
The Court observed that although
Article IV of the Genocide Convention provides that persons
who have committed acts of genocide may be punished regardless
of their official capacity, the Court observed that Article
VI provides that such persons may be prosecuted either
before the courts in the State where the acts were committed
or before an international criminal tribunal. The
Court determined that given the absence of an express
provision for third States such as Belgium to claim jurisdiction,
and given that the exclusion of immunity for such jurisdiction
was not provided by customary international criminal law,
Belgium could not exercise jurisdiction over current heads
of state for acts of genocide, crimes against humanity
or war crimes.
*A new amendment to the legislation
was approved by the upper Chamber of the Belgian parliament
on April 5, 2003.
Click here for the decision (in French).
(Enter 2003-02-12 in the box under "Date d'Arrêt", then
click on "Liste." Click on "Détail" under the first
document, JC032C1_1)
Tribunal
Supremo (Supreme Court) of Spain: Judgment on the Guatemalan
Genocide Case, Judgment No. 327/2003 (February 25,
2003)
Spain's Tribunal Supremo held that
Spanish courts could exercise jurisdiction over the investigation
of acts of torture committed in Guatemala in 1980 by former
Guatemalan officials against Spanish citizens.
The appeal to the Tribunal
Supremo was brought by Nobel Peace Laureate, Rigoberta
Menchú Tum, among other Latin American and Spanish human
rights organizations. At issue was the scope of
jurisdiction under Article 23.4 of Spain's Ley Orgánica
del Poder Judicial (Law on Judicial Power), which provides
that Spanish courts shall have jurisdiction over international
crimes including genocide and terrorism, committed by
Spanish or foreign citizens, outside of Spain.
The original complaint alleged
acts of genocide and torture committed by various Guatemalan
officials from 1962-1996 that claimed victims of both
Guatemalan and Spanish nationality. In particular, the
complaint focused on the 1981 arson of Guatemala's Spanish
Embassy in which four Spanish priests were killed. The
appellants sought annulment of a judgment declining jurisdiction
issued on December 13, 2000 by Spain's highest criminal
court, the Audiencia Nacional. The appellants challenged,
inter alia, the Audiencia Nacional's interpretation
of Article 6 of the 1948
Convention on the Prevention and Repression of the Crimes
of Genocide ("Genocide Convention"). In particular,
the appellants challenged the Audiencia Nacional's application
of a principle of subsidiary jurisdiction, which provides
that extraterritorial jurisdiction should only be exercised
as a default to the exercise of jurisdiction of national
courts in whose territory the acts occurred.
The Tribunal Supremo found
that the Audiencia Nacional's application of the subsidiarity
principle was erroneous, observing that such a principle
was not found in the 1948 Genocide Convention.
The Court limited the scope
of its jurisdiction to acts of genocide in which Spanish
nationals were victims, noting recent decisions by both
German and Belgium courts in support of its conclusion.
The Court observed: "[T]oday there is significant support
in doctrine for the idea that no particular State is in
the position to unilaterally establish order, through
resort to criminal law, against everyone and the entire
world, without their being some point of connection that
renders legitimate the extension of extraterritorial jurisdiction."
International
Centre for Settlement of Investment Disputes (ICSID):
Salini Costrutorri S.p.A and Italstrade S.p.A v. Kingdom
of Morocco(Decision on Jurisdiction), Case
No. ARB/00/4 (July 23, 2001)
The Tribunal declared that
it had jurisdiction over the investors' claims, but limited
its jurisdiction to those breaches of contract that also
gave rise to violations of the Bilateral Investment Treaty
("BIT") between Italy and Morocco.
The facts concern two Italian
companies, Salini Costrutorri S.p.A. and Italstrade S.p.A.
("Salini and Italstrade") that in 1994 entered into a
public procurement agreement for highway construction,
the "CCAP," with the Société Nationale des Autoroutes
du Maroc ("ADM"), a private entity financed by the Moroccan
government. In 1999, Salini and Italstrade sent a memorandum
of claims regarding delays and technical reservations
to ADM and to the Moroccan Minister of Equipment.
ADM rejected their claims, and no reply was received from
the Minister of Equipment.
In May 2000, Salini and Italstrade
requested arbitration pursuant to an ICSID arbitration
clause contained in Article 8 of the Italy-Morocco BIT.
Among several objections to jurisdiction, Morocco argued
that the claims were based on breaches of contract rather
than violations of the BIT. Morocco argued that
Salini and Italstrade waived the possibility of pursuing
claims under the BIT by signing the CCAP agreement that
provided for jurisdiction under Moroccan administrative
law in domestic courts. Morocco also claimed that
ADM's actions could not be attributed to the Moroccan
government. Morocco further alleged that Moroccan law
defined the scope of the investment subject to ICSID arbitration.
Morocco based this argument on Article 1 of the BIT which
provides that "the term 'investment' designates
all categories of assets invested [...]in accordance
with the laws and regulations of theaforementioned
party [Morocco]." (Emphasis in original)
The Tribunal found that Salini
and Italstrade had met the conditions set forth in the
BIT for submitting an arbitration request. The Tribunal
noted that Article 25.1 of the ICSID
Convention "states only one condition: that
the consent be in writing." Regarding Morocco's
waiver-based objection, the Tribunal held that Article
8 paragraph 2(c) of the BIT constituted Morocco's unilateral
engagement towards Italy's investors and found that the
notification of a request for arbitration by Salini and
Italstrade constituted their consent to ICSID jurisdiction.
The Tribunal further held that the consent to ICSID jurisdiction
set forth in the BIT would prevail over administrative
law procedures set forth in the CCAP. In regard
to the question of attribution of ADM's acts to Morocco,
the Tribunal determined that ADM was an entity controlled
and managed by Morocco.
Regarding applicable law
and the definition of investment, the Tribunal concluded
that the phrase "in accordance with the laws and regulations
of the aforementioned party "(emphasis in original),
"seeks to prevent the BIT from protecting investments
that should not be protected, particularly because they
would be illegal," but did notpurport to define
investments according to Moroccan law. The Tribunal
found that investments that were legally valid in Morocco
were defined by Article 8 of the BIT and Article 25 of
the ICSID Convention. The Tribunal, noting Article 1(c)
of the BIT providing for "[...]contractual benefits
having an economic value," along with Article 1(e),
providing for "all other rights of an economic nature
conferred by law or contract [...]," found that the
contract between ADM, Salini and Italstrade constituted
an investment within the meaning of the BIT and the ICSID
Convention. (Emphasis in original)
In conclusion, the Tribunal
held that although there was jurisdiction in respect of
BIT violations in addition to any breach of contract that
binds Morocco directly, jurisdiction did not extend to
mere breaches of contract not involving a Moroccan State
entity.
This document was provided
to the ILM office in print format.
UNCITRAL
Arbitral Tribunal: CME Czech Republic B.V. v. The Czech
Republic, Final Award (March 14, 2003)
The Tribunal issued its final
award on damages and dismissed additional claims brought
by the Czech Republic.
The dispute concerns the
Claimant, CME Czech Republic B.V. ("CME"), a corporation
organized under the laws of the Netherlands, CNTS, a company
incorporated in the Czech Republic in which CME owns a
99% equity interest, CET21, the broadcast license holder
of CNTS, and the Czech Republic, among others. CME claimed
that the Czech Republic's Media Council, as a result of
its interference with CME's exclusive right to use CET21's
broadcasting license, breached the Bilateral Investment
Treaty between the Czech Republic and the Netherlands
("Czech-Dutch BIT"). CME sought relief pursuant
to the Czech-Dutch BIT by means of a request for arbitration
under the UNCITRAL Arbitration Rules, designating
Stockholm as the place of arbitration.
CME commenced the UNCITRAL
arbitration proceedings in February 2000. CME claimed,
inter alia, that the Czech Republic failed to ensure
fair and equitable treatment to CME as an investor of
the Netherlands, that it failed to accord full protection
and security to CME's investment, and that its acts constituted
measures tantamount to expropriation of its investment.
The Tribunal issued a partial award
on liability issues in September 2001, finding that the
Czech Republic, through the Czech Media Council's actions
and omissions, violated the Czech-Dutch BIT. The Tribunal
decided to issue its award on damages separately in a
final award released on March 14, 2003.
Several issues besides damages
were before the Tribunal in its final award, among them
those concerning the applicable law and the relationship
between the UNCITRAL proceedings in Stockholm and two
other related proceedings.
In August 1999, CNTS sued
CET21 in Prague District Court for what it claimed was
an invalid termination of a Service Agreement. The
Prague District Court found the termination invalid, the
Prague Court of Appeals reversed the District Court and
upheld the validity of the termination. CNTS appealed
the decision, and its appeal was still pending at the
time the UNCITRAL arbitration proceedings in which CME
was involved closed in November 2002.
The Czech Republic argued
that the Tribunal was required to suspend the issuance
of its final award until the Czech courts had finally
decided the dispute between CNTS and CET 21, pursuant
to the Tribunal's obligation to apply principles of Czech
law. The Tribunal looked to Article 8(6) of the
BIT which provides: "The Arbitral Tribunal shall decide
on the basis of law..." (emphasis added in original)
The Czech Republic argued that the phrase, "on the basis
of law" gave priority to the application of the law of
the Czech Republic, the host State. The Tribunal disagreed
with the Czech Republic, noting that the Czech-Dutch BIT
did not set forth a requirement for the exhaustion of
local remedies. It observed that if the Respondent's position
were correct, "Arbitration under a bilateral investment
treaty would involve a high risk, always being threatened
by the Damocles sword of annulment on the basis of local
remedies that had been exhausted or domestic law had not
been properly applied." The Tribunal therefore dismissed
the Czech Republic's claim on this matter.
In addition to the previous
proceedings, a U.S. national holding a controlling interest
in CME initiated UNCITRAL arbitration proceedings in London
against the Czech Republic in August 1999 for breach of
the Bilateral Investment Treaty between the United States
and the Czech Republic ("Czech-U.S. BIT"). The London
arbitration dealt with the same substantive issues as
the arbitration case brought by CME in Stockholm under
the Czech-Dutch BIT. The London Tribunal issued a final
award in September 2001 in which it found that the Czech
Republic was in breach of the Czech-U.S. BIT, but nonetheless
rejected the claim on the grounds that it did not bring
sufficient evidence demonstrating that the violation resulted
in an interference with the claimant's property rights.
The Czech Republic argued that the London arbitration
award had res judicata effect on the partial award
issued by this Tribunal in Stockholm, and therefore asked
the Tribunal to reconsider its partial award. The Tribunal
disagreed, noting that the Czech Republic itself refused
to consolidate the London and Stockholm proceedings based
on the argument that it was inappropriate to consolidate
claims by different claimants under separate treaties.
The Tribunal therefore determined that the Czech Republic
had explicitly waived a res judicata defense, and
dismissed its claim regarding the res judicata
effect of the London arbitration.
The Tribunal held that its
partial award was, in accordance with Article 32(2) of
the UNCITRAL Rules, "final and binding." It also noted
that no provision in the BIT or the UNCITRAL Rules provided
any means of appeal or revision of an arbitral award,
unless by virtue of interpretation or correction by petition
before the Swedish Courts within the limits of the 1958 Convention
on the Recognition and Enforcement of Foreign Arbitral
Awards ("The New York Convention") The Tribunal further
observed that it was without the power to reconsider its
partial award. (An application for annulment is currently
pending before the Svea Court in Stockholm, its decision
having been scheduled for May 15, 2003).
In its determination of damages,
the Tribunal observed that "international law requires
that compensation eliminate the consequences of the wrongful
act," and held that compensation would be considered adequate
if based on the fair market value of the asset taken.
The Tribunal concluded that the Czech Republic was required
to pay to CME US$269.814.000, and held that each Party
would bear the costs of the arbitration equally.
The EEBC issued the Observations
in order to explain its upcoming work on demarcating the
common border between Eritrea and Ethiopia, which had
been delimited in April 2002 (see May 22, 2002 ILIB for a summary of the EEBC
Delimitation Decision). The EEBC noted that such
observations were necessary due to the "unusual features"
of the demarcation proceedings that will not include formal
pleadings by the Parties or full oral hearings.
The EEBC affirmed that its
Delimitation decision is final and that the demarcation
"has to be the demarcation on the ground of the boundary
as delimited in the Delimitation Decision, not a variation
of that boundary or the elaboration of some new boundary."
(Emphasis in original.) The EEBC noted that although
it is "inherent" in any boundary delimitation that it
may give rise to anomalies on the ground, any such anomalies
are to be dealt with by an agreement of the Parties.
The EEBC stated that this was required under the Commission's
Demarcation Directions of July 8, 2002, which preclude
it from varying the boundary line on its own initiative.
The EEBC noted, however, that this does not preclude Eritrea
and Ethiopia from agreeing to expand the EEBC's authority.
As to the next steps, the
EEBC noted, inter alia, that its surveyors must
be unhindered in continuing their work on establishing
the locations of the marker pillars, and that contractors
must be allowed to construct the pillars. In addition,
the EEBC emphasized that its personnel must be "fully
safeguarded" in their operations.
North
Atlantic Treaty Organization (NATO): Decision to enhance
support to the International Stabilization Force in Afghanistan
(ISAF) (April 16, 2003)
Pursuant to the request of
Canada, Germany and the Netherlands, countries currently
leading the ISAF, the North Atlantic Council approved
additional NATO support for ISAF's international peacekeeping
mission in Afghanistan. This additional support
will include the creation of headquarters to command and
coordinate the operation, a force commander to be selected
from among the Allied nations providing troops to ISAF,
in addition to the creation of an ISAF coordination cell.
According to NATO spokesman, Yves Brodeur, the enhanced
NATO support is necessary in order to address the considerable
burden of finding new nations to lead the ISAF mission
every six months. The principal objectives of the additional
support are to ensure stability and continuity for ISAF's
peace-keeping mission in Afghanistan.
International Law In Brief (ILIB) - Copyright 2003
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