International Law in Brief

International Law In Brief

September 23-29, 2000
Developments in international law, prepared by the
Attorney-Editors of International Legal Materials
The American Society of International Law

Note from the Editors

The International Law In Brief will not be published Friday, October 6, 2000, but will return the following week.

 

Judicial and Other Decisions

ICSID (Additional Facility): Waste Management, Inc. v. United Mexican States, Case No. ARB(AF)/98/2 (June 2, 2000)

Waste Management, Inc. sought before an ICSID Additional Facility Arbitral Tribunal ("Tribunal") damages for an alleged breach of North American Free Trade Agreement ("NAFTA") obligations on the part of Mexican state-owned entities. Sect. 1. Mexico challenged the Tribunal's jurisdiction under NAFTA Article 1121 for the Claimant's alleged failure to properly waive the right to initiate or continue related proceedings in other fora. Sects. 4, 6. Mexico alleged inter alia the existence of ongoing, related proceedings in Mexican fora, and that the Claimant thereby sought duplicate relief. Sect. 6.

The Tribunal found that a waiver per se is a unilateral act, in that its extinguishing effect is: 1) occasioned solely by the underlying intent; and 2) effective from the time of submitting a request for arbitration. Sects. 18-19. The Tribunal noted that NAFTA Article 1121 "calls for a show of intent" and a "certain type of conduct" on the part of the Claimant in regard to the waiver. Sect. 24.

The Tribunal found that the Claimant had undertaken proceedings after the date at which the Claimant requested arbitration, without intent to abandon them. Sects. 25, 27. The Tribunal also found that the separate proceedings were based on the same grounds as those for which the Claimant had sought arbitration. Sect. 27. The Tribunal concluded that the waiver applied to such proceedings, (id.), and that the Claimant was "perfectly aware" that such was the case. Sect. 28.

The Tribunal determined that the Claimant had issued a statement of intent different from that required by a NAFTA Article 1121 waiver. Sects. 29-30. The Tribunal on this basis held the Claimant's waiver invalid, and allowed Mexico's claims. Sect. 31(2).

The Tribunal found that it lacked jurisdiction, and ordered the Claimant to pay the costs of the proceedings, (Sect. IV), but did not award legal costs to Mexico, finding no recklessness or bad faith on the Claimant's part. Sect. 31(2).

In dissent, Arbitrator Highet criticized the Tribunal's failure to acknowledge a distinction between jurisdictional requirements and procedural rules tending to delay proceedings, and concluded that the Tribunal had "heaved the baby, enthusiastically, out with the bath-water." Highet dissent, paras. 61-63. Arbitrator Highet asserted that the "harsh consequence" of undoing the entire NAFTA claim could "hardly be presumed" to have been the intention of the NAFTA Parties when executing the NAFTA Treaty. Highet dissent, para. 63. PH

Archived in PDF format at http://www.worldbank.org/icsid/cases/awards.htm

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U.S. District Court for the Northern District of California: In Re World War II Era Japanese Forced Labor Litigation, Master File No. MDL-1347, Order No. 4 (September 21, 2000)

A group of former American World War II prisoners of war ("Plaintiffs") forced to perform slave labor for a number of Japanese companies ("Defendants") filed separate actions seeking damages. The actions were consolidated for pretrial proceedings before the U.S. District Court for the Northern District of California ("Court"). The Court rejected the Plaintiffs' request that the proceedings be remanded to state court, concluding instead that the actions implicated the federal common law of foreign relations so as to give rise to federal jurisdiction.

The Court adopted the statement of the U.S. Government, as amicus curiae, that the actions had the "potential to unsettle half a century of diplomacy." The Court held that the Plaintiffs' claims were barred by the 1951 Treaty of Peace with Japan ("Treaty") to which the U.S. and 47 other Allied powers are Parties. The Court noted that Article 14(b) of the Treaty waives all reparations and other claims by the Allies and their nationals "arising out of any actions taken by Japan and its nationals in the course of" the war's prosecution.

The Court rejected the Plaintiffs' argument that prisoner-of-war claims had not been waived because they were not expressly identified in the Treaty. The Court instead found that such a contention would "inject hidden meaning into straightforward text."

The Court concluded that the official record of the Treaty negotiations established that a "fundamental goal" of the Treaty was to settle the reparations issue "once and for all." The Court rejected the Plaintiffs' argument that settlements subsequent to the Treaty and on more favorable terms than those of the Treaty revived the Plaintiff's claims. The Court determined that under Treaty Article 26: 1) the Plaintiffs did not a have the right to seek a more advantageous settlement; and 2) that such a right lay exclusively with the U.S. as a Party to the Treaty. The Court further found that it is a "well settled principle" that a government may lawfully exercise its sovereign authority to settle the claims of its nationals against foreign countries.

The Court granted the Defendants' motion to dismiss and entered a judgment on the pleadings in their favor. The Court noted, however, that its order did not address pending motions to dismiss in cases brought by plaintiffs who were not members of U.S. or Allied armed forces. BM

Archived in PDF format at http://www.cand.uscourts.gov

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WTO Appellate Body Report: United States -- Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R (August 28, 2000)

Japan and the European Communities ("EC") each successfully claimed before World Trade Organization ("WTO") Panels that the 1916 U.S. Anti-Dumping Act ("Act") violated inter alia the 1994 General Agreement on Tariffs and Trade ("GATT") and the Agreement on Implementation of Article VI of the GATT ("Anti-Dumping Agreement."). Paras. 1-6. All three parties thereafter appealed the Panels' findings. Para. 7.

The U.S. for its part contended inter alia that the Panels had lacked jurisdiction over challenges to the Act "as such" without an accompanying U.S. imposition of a definitive anti-dumping duty, provisional measure, or price undertaking. Paras. 9-10.

The Appellate Body upheld the Panel's finding of jurisdiction over claims pertaining to the Act "as such." Para. 83. The WTO Appellate Body found that GATT and WTO case law "firmly establishes" that dispute settlement proceedings may be brought on the basis of an alleged inconsistency between the Member's obligations and the Member's legislation "as such." Para. 75. The Appellate Body also concluded that the U.S. had failed to establish a basis for rationally distinguishing anti-dumping legislation so as to remove it from the ambit of such a "generally-accepted practice." Id.

The Appellate Body upheld the Panels' finding that the Act's civil and criminal anti-dumping penalties constituted "specific action against dumping" in violation of the GATT and Anti-Dumping Agreement, which limit anti-dumping responses to the imposition of definitive anti-dumping duties, provisional measures, and price undertakings. Paras. 130, 133, 137-38.

The Appellate Body upheld the Panels' findings and conclusions, and recommended that the Dispute Settlement Body request the U.S. to bring the Act into conformity with U.S. obligations under the GATT and Anti-Dumping Agreement. Paras. 155-56. PH

http://www.wto.org/english/tratop_e/dispu_e/162abr_e.pdf

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Briefly Noted

The ASIL has issued a new Insight by Friedrich Soltau, entitled The Right to Participate in the Debates of the Security Council, and available at http://www.asil.org/insigh52.htm To subscribe to Insights, visit http://www.asil.org/insights.htm

 

 

International Law In Brief - Copyright 2000 - The American Society of International Law
Editors:  Peter C. Hansen, Esq., Branislav A. Maric
Intern:  Marianne Schulze