Developments in international law, prepared by
the Editorial Staff of International Legal Materials
The American Society of International Law February 6, 2004
Central
American Free Trade Agreement (CAFTA) (Draft Text):(January
28, 2004)
The Governments of Costa Rica,
El Salvador, Guatemala, Honduras, Nicaragua and the United
States recently concluded the Central American Free Trade
Agreement (CAFTA). The draft text is subject to legal
review for accuracy, clarity and consistency.
The agreement eliminates several
trade barriers, among them, the United States' existing
quantitative restrictions it maintains under the WTO Agreement
on Textiles and Clothing from Costa Rica, El Salvador
and Guatemala. In terms of services, the agreement provides,
inter alia, that Central America will allow U.S.-based
firms to supply cross-border insurance and financial services.
The agreement allows for new access to government procurement
contracts, granting U.S. suppliers non-discriminatory
rights to bid on contracts from Central American government
agencies.
CAFTA's investment chapter
limits the scope of investments covered by providing that
"the provisions of this Chapter do not bind any Party
in relation to any act or fact that took place or any
situation that ceased to exist before the date of entry
into force of this Agreement."(Article 10.1(3)).
Using the same language of the Chile and Singapore FTA
Agreements, it attempts to limit and clarify the minimum
standard of treatment of investment, by emphasizing the
customary international law minimum standard and noting
that “full protection and security” do not
require treatment in addition to or beyond that which
is required by that standard, nor do they create additional
substantive rights.
In terms of the Most Favored
Nation provision, the draft text goes beyond the texts
of the Chile and Sinagpore FTAs by attempting to limit
the potential scope of the interpretation of the ICSID
Maffezini
case (40 ILM 1129 (2001)) (Decision on Jurisdiction).
The draft text specifically makes reference to this case
in the following footnotes:
1 The Parties
agree that the following footnote is to be included in
the negotiating history as a reflection of the Parties’
shared understanding of the Most-Favored-Nation Treatment
Article and the Maffezini case. This footnote would be
deleted in the final text of the Agreement. The Parties
note the recent decision of the arbitral tribunal in Maffezini
(Arg.) v. Kingdom of Spain, which found an unusually broad
most-favored-nation clause in an Argentina-Spain agreement
to encompass international dispute resolution procedures.
See Decision on Jurisdiction ¶¶ 38-64 (Jan. 25, 2000),
reprinted in 16 ICSID Rev. – F.I.L.J. 212 (2002).
By contrast, the Most-Favored-Nation Treatment Article
of this Agreement is expressly limited in its scope to
matters “with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or
other disposition of investments.” The Parties share
the understanding and intent that this clause does not
encompass international dispute resolution mechanisms
such as those contained in Section C of this Chapter,
and therefore could not reasonably lead to a conclusion
similar to that of the Maffezini case.
2 The Parties
agree that the following footnote is to be included in
the negotiating history as a reflection of the Parties’
shared understanding regarding the interpretation of the
most-favored-nation and national treatment obligations.
This footnote would be deleted in the final text of the
Agreement.
Treaty
Between the United States of America and Japan on Mutual
Legal Assistance in Criminal Matters (August 5, 2003)
The Treaty Between the United
States of America and Japan on Mutual Legal Assistance
in Criminal Matters ("the Treaty") sets forth
a non-exhaustive list of the major types of mutual assistance
for criminal matters, such as taking testimony, examining
persons and transferring persons into custody for testimony.
The Treaty extends to assistance provided not only in
connection with the investigation, prosecution and prevention
of criminal offenses, but also in certain related proceedings,
such as administrative investigation related to securities
fraud.
Article 3 of the Treaty sets
forth the circumstances under which a requested State
may deny assistance in criminal matters under the Treaty.
According to this article, a request may be denied if
it is related to a political offense, if the execution
of a request would impair security or other essential
interests, if a request does not conform to the requirements
of the Treaty, or if the conduct would not constitute
a criminal offense under the laws of the requested Party
and the execution of the request requires a court warrant
or other compulsory measures under the laws of the requested
Party. Before denying assistance under Article 3(1) the
requested Party is under an obligation to consult with
the requesting Party in regard to the conditions of assistance
that may be given. If the requested Party denies assistance,
it must provide reasons for the denial. Under Article
5(5), if the requested Party determines that execution
of a request for assistance in a criminal matter would
interfere with an ongoing criminal investigation, it may
postpone execution of the request or make the execution
of the request subject to conditions deemed necessary
following consultations with the requesting Party.
International Criminal Tribunal for Rwanda (“ICTR”):
The Prosecutor v. Jean de Dieu Kamuhanda Case No.
ICTR-95-54A-T (January 22, 2004)
The Trial Chamber II of the
International Criminal Tribunal for Rwanda sentenced Mr.
Kamuhanda to imprisonment for the remainder of his life.
Mr. Kamuhanda was found guilty on 2 counts: genocide (count
2) and extermination as a crime against humanity (count
5).
Mr. Kamuhanda was born on
March 3, 1953 in Gikomero commune, Kigali-Rural préfecture,
Rwanda. He held the office of Ministry of Higher Education
and Scientific Research in the Interim Government from
late May until mid-July 1994. Mr. Kamuhanda was arrested
on November 26, 1999 in France and was transferred from
France to the seat of the Tribunal in Arusha on March
7, 2000.
The indictment charged Mr.
Kamuhanda with 9 counts comprising genocide, crimes against
humanity and serious violations of Article 3 Common to
the Geneva Conventions and Additional Protocol II. The
crimes were committed between January 1, 1994 and December
31, 1994 in Rwanda where the Tutsi, the Hutu and the Twa
were identified as racial or ethnic groups. The indictment
alleges that Mr. Kamuhanda organized, ordered and participated
in the massacres perpetrated against the Tutsi population
and moderate Hutu. The indictment further asserted that
the accused personally led attacks of soldiers against
Tutsi refugees in Kigali-Rural préfecture in April 1994.
According to the indictment, he personally distributed
firearms, grenades, and machetes to civilian militia in
Kigali-Rural for the purpose of “killing all the
Tutsi and fighting the RPF (Rwandese Patriotic Front)”.
The defense argued, inter
alia, that Mr. Kamuhanda was not connected in any
way to the massacres at Gikomero Parish. However Mr. Kamuhanda
admitted that there were systematic attacks directed throughout
Rwanda against the civilian population with the objective
of extermination of the Tutsi. The defense also
argued that the prosecution witnesses bore false testimony
against Mr. Kamuhanda. The defense attacked the credibility
of most prosecution witnesses. The defense further asserted
that it was physically impossible for Mr. Kamuhanda to
participate in the acts or to be at the places alleged
in the indictment during the period from April 6, 1994
until April 13, 1994, because the travel routes were not
passable due to the fighting.
The Chamber found that Mr.
Kamuhanda was a respected man, influential, and considered
to be intellectual. The Chamber found that he instigated
and led an attack to kill people who had taken shelter
in a place universally recognized to be a sanctuary, the
Compound of the Gikomero Parish Church. As a result of
this attack many people were massacred. The Chamber found
that the high position Mr. Kamuhanda held as a civil servant
could be considered as an aggravating factor. The Chamber
also found that Mr. Kamuhanda distributed weapons to members
of the Interhamve, the youth-wing of National Revolutionary
Movement for Development (“MRND”) in the attacks
in Gikomero and that he himself participated in the crimes
against the Tutsi population at Gikomero on April 12,
1994.
The Chamber found that Mr.
Kamuhanda was in a position of authority over the attackers,
for purposes of his responsibility under Article 6(1)
of the Statute for ordering the attack at the Gikomero
Parish Compound. Further, the Chamber noted that the concept
of a group enjoys no generally or internationally accepted
definition, rather each group must be assessed in the
light of a particular political, social, historical and
cultural context. Accordingly, “for purposes of
applying the Genocide Convention, membership of a group
is, in essence, a subjective rather than an objective
concept where the victim is perceived by the perpetrator
of genocide as belonging to a group slated for destruction.”
Having considered all the
evidence and arguments, the Chamber found Mr. Kamuhanda
guilty on 2 counts. Further the Chamber dismissed two
of the counts: complicity in genocide (count 3), and murder
as a crime against humanity (count 4). Mr. Kamuhanda was
found not guilty on the following four counts: rape as
a crime against humanity (count 6), other inhumane acts
as a crime against humanity (count 7), outrage on personal
dignity as serious violations of Article 3 common to the
Geneva Conventions and of Additional Protocol II (count
9), and killing and violence as serious violations of
Article 3 common to the Geneva Conventions and of Additional
Protocol II. The Chamber entered a Judgment of Acquittal
in respect of count 1 of the Indictment: conspiracy to
commit genocide. Judge Maqutu appends his separate and
concurring opinion on the verdict and sentence.
North American
Free Trade Agreement (NAFTA) Arbitral Tribunal: Methanex
Corporation v. United States (Tribunal Adopts the
Free Trade Commission's Non-Disputing Party Participation
Procedures) (December 30, 2003)
The Tribunal adopted the procedures
set out in part B of the NAFTA
Free Trade Commission's statement concerning submissions
from non-disputing parties. In line with the understanding
of the disputing parties, the Tribunal will communicate
with the existing amici and also arrange for a
notice to be published promptly to the same effect.
The Free Trade Commission’s
Statement provides that "No provision of the North
American Free Trade Agreement (“NAFTA”) limits
a Tribunal’s discretion to accept written submissions
from a person or entity that is not a disputing party
(a “non-disputing party”)" and further
“that nothing in this statement […] prejudices
the rights of NAFTA Parties under Article 1128 of the
NAFTA."
Part B of the Commission's
Statement provides that any non-disputing party that is
a person of one of the NAFTA parties, or has a "significant
presence" in the territory of a NAFTA Party may seek
leave from the Tribunal to file a submission regarding
the NAFTA dispute. The applicant must provide information,
inter alia, as to its legal status if it is a company,
NGO, etc., and its affiliation with any disputing party.
It must identify any government, person or organization
that has provided the applicant with financial assistance
in preparing the submission, and it must specify the interest
it has in the arbitration. In regard to the Tribunal's
decision as to whether to grant leave to file a non-disputing
party submission, the Free Trade Commission stated that
NAFTA Chapter Eleven Tribunals are to consider the extent
to which: (a) the non-disputing party submission would
assist the Tribunal in the determination of a factual
or legal issue related to the arbitration by bringing
a perspective, particular knowledge or insight that is
different from that of the disputing parties; (b) the
non-disputing party submission would address matters within
the scope of the dispute; (c) the non-disputing party
has a significant interest in the arbitration; and (d)
there is a public interest in the subject-matter of the
arbitration.
Click here for the Press Release
from the Tribunal.
Click here
for the NAFTA Free Trade Commission Statement of October
7, 2003.
International
Centre for Settlement of Investment Disputes (ICSID):
Autopista Concesionada de Venezuela, C.A. v. Bolivarian
Republic of Venezuela Case No. ARB/00/5 (September
23, 2003)
The ICSID arbitral Tribunal
(“the Tribunal”) held that the Bolivarian
Republic of Venezuela (“Venezuela”) breached
Clauses 22, 23, 31, 32 and 64 of a concession agreement.
The Tribunal also held that Autopista Concesionada de
Venezuela, C.A. (“Aucoven”) was entitled to
terminate the concession agreement on the ground of Venezuela’s
breaches.
The arbitration was brought
under the ICSID arbitration clause contained in a concession
agreement with Venezuela for the construction and maintenance
of two major highways linking Caracas to La Guaira.
The claimant is a company
incorporated under the laws of Venezuela and owned by
ICATECH Corporation, a United States company. On January
24, 1996 ICA and Baninsa consortium incorporated the Autopista
Concesionada de Venezuela, Acoven C.A., a Venezuelan corporation,
to serve as concessionaire. On December 23, 1996 the claimant
entered into the concession agreement with Venezuela.
Venezuela objected to the
Tribunal’s jurisdiction. Venezuela pointed out that
Aucoven was in fact controlled by ICA Holding, a company
incorporated under the laws of Mexico, and therefore Aucoven
could not initiate an ICSID arbitration proceeding, since
Mexico was not a Contracting State of the ICSID Convention.
Venezuela claimed that the transfer of 75% of Aucoven’s
shares from ICA Holging to ICATECH did not diminish ICA
Holding’s control over Aucoven’s operations
in Venezuela. Venezuela further argued that Mexican officials
sent written communications and held meetings with Venezuelan
officials. According to Venezuela, this kind of diplomatic
protection is a breach of Article 27 of the ICSID Convention.
Venezuela asserts that Mexican diplomatic efforts confirm
ICA Holding’s direct interest in Aucoven. Venezuela
further stated that even if the parties had agreed to
treat Aucoven as a United States national for jurisdictional
purposes, the pervasive control by Mexican nationals over,
and involvement in the affairs of Aucoven should lead
the Tribunal to decline jurisdiction. On September 27,
2001 the Tribunal upheld jurisdiction on the basis that
the criteria chosen by the parties to define foreign control
were reasonable. The Tribunal held that “an Arbitral
Tribunal may not adopt a more restrictive definition of
foreign control, unless the parties have exercised their
discretion in a way inconsistent with the purpose of the
Convention.”
According to the concession
agreement, Aucoven was obligated to design, construct,
operate, exploit, conserve, and maintain the highway system.
The claimant was further obligated to build other works
related to the highway system and to operate and maintain
the highway system for a period of 30 years. Venezuela’s
obligations under the concession agreement were mainly
related to the financing of the investments required under
the concession agreement.
Aucoven claimed that Venezuela
failed to perform its obligations under the concession
agreement by, inter alia, failing to raise the
tolls, to issue the guarantee, to pay the minimum
guaranteed income, and to pay Aucoven for additional and
excess works. Aucoven further alleged that Venezuela’s
failure to perform its obligations could not be excused
by force majeure, and that it was entitled to unilaterally
terminate the concession agreement.
Venezuela claimed, inter
alia, that Aucovan’s unilateral termination
was not valid or effective under the concession agreement
and under Venezuelan law. Venezuela claimed that Aucoven
did not suffer any loss of future profits and further
that Aucoven’s lost profits claim failed due to
the fact that there were independent legal obstacles excluding
Venezuela’s liability.
The Tribunal noted that the
contractual force majeure defined in Clause 41(2)
expressly refers to the circumstances that impede the
concessionaire to perform. Further the Tribunal noted
that consequences of force majeure are not governed
by contract, but must be assessed according to the applicable
law. In the Tribunal’s opinion there was no reason
to depart from the impossibility standard applicable under
Venezuelan administrative law. Concerning the failure
to issue the guarantee and the risk of illegality, the
Tribunal stated that Venezuela assumed the risk of illegality
of the issuance of any guarantees. The Tribunal concluded
that Venezuela breached its obligation to issue the guarantee
according to Clause 22 of the Concession Agreement.
Having considered all the
evidence and arguments, the Tribunal found that Venezuela
had to pay to Aucoven compensation for damages. Further
the Tribunal held that each party shall bear the
expenses incurred by it in connection with the arbitration.
Members of the Arbitral Tribunal
were: Prof. Gabrielle Kaufmann-Kohler (President), Prof.
Karl-Heinz Böckstiegel, Dr. Bernardo Cremades
Spain's
Arbitration Act of 2003: Ley 60/2003 (December 26, 2003)
The new Spanish
Arbitration Act ("the Act") was officially published
in the Boletín Oficial del Estado on December 23,
2003. The Act will come into force on March 26, 2004,
and applies to any arbitration where the designated place
of arbitration is Spain. The Act is designed to provide
a uniform legal scheme for domestic and international
arbitration, and although based on the UNCITRAL Model
Law on International Commercial Arbitration, presents
significant changes to this Model Law.
Unlike the UNCITRAL Model
Law which provides that "This Law shall not affect
any other law of this State by virtue of which certain
disputes may not be submitted to arbitration or may be
submitted to arbitration only according to provisions
other than those of this Law (Article I(5))" The
Spanish Arbitration Act aims to prevent a State from invoking
its domestic law in order to require that the dispute
be resolved in its domestic administrative courts: "Where
the arbitration is international and one of the parties
is a State or a company, organisation or enterprise controlled
by a State, that party shall not be able to invoke the
prerogatives of its own law in order to avoid obligations
arising from the arbitration agreement."(Article
2(2))
In addition
the Spanish Arbitration Act provides for electronic or
online arbitration, and accepts as valid electronic arbitration
agreements, (Art. 9.3) electronic communications and modifications
(Art. 5.a); and, even more importantly, electronic awards
and their notification to the parties by electronic means
(Art. 37.3).
Document (translated into English) provided to the
ILM Office.
Trilateral Trade Discussion: Brazil-India-
South Africa (January 28, 2004)
President Luiz Inacio Lula da Silva has called for Brazil,
India and South Africa to agree on a trilateral trade
pact as part of a new bloc among developing countries
to compete with developed economies. A Brazilian
team of trade experts led by the country's foreign minister
will visit India in March to work out a preliminary plan
to explore such an agreement with South Africa.
International
Criminal Court (ICC): Investigation into the Lord's Resistance
Army rebel group, Uganda (January 29, 2004)
The Prosecutor of the ICC
has determined that there is a sufficient basis to start
planning for the first investigation of the ICC into the
activities of the Lord's Resistance Rebel group in Uganda
for war crimes and crimes against humanity.
World Intellectual
Property Organization (“WIPO”): Patent Cooperation
Treaty (“PCT”) Reform (January 1, 2004) As
of January 1, 2004 the reforms to the Patent Cooperation
Treaty simplifying the complex procedure of obtaining
patent protection in several countries entered into force.
The reform process of the PCT, adopted in 1970 in Washington
D.C., amended in 1979 and modified in 1984 and 2001, launched
under the auspices of WIPO in mid-2001, sought to improve
the efficiency of the PCT and to facilitate the ability
of inventors and applicants to obtain patents worldwide
in more than 120 countries by submitting a single “international”
application. The reforms include a simplified designation
procedure and fee structure, new enhanced search and examination
system, reduced duplication of work in processing of PCT
applications and centralized availability to third parties
of international preliminary examination reports through
a request to WIPO.
