International Law in Brief

International Law In Brief

Developments in international law, prepared by the
Editorial Staff of International Legal Materials
The American Society of International Law
May 9, 2002

JUDICIAL AND SIMILAR PROCEEDINGS

REPORTS AND OTHER DOCUMENTS

BRIEFLY NOTED

JUDICIAL AND RELATED DOCUMENTS

International Centre for Settlement of Investment Disputes (ICSID): Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2 (March 15, 2002)

An ICSID Tribunal rejected for lack of material jurisdiction a claim that Mihaly International Corporation ("Mihaly"), a U.S. company, submitted under the 1991 Treaty between the United States of America and Sri Lanka concerning Encouragement and Reciprocal Protection of Investment. Mihaly argued that three documents concluded with Sri Lanka (i.e., the 1993 Letter of Intent, the 1993 Letter of Agreement, and 1994 Letter of Extension) demonstrated Sri Lanka's "agreement or authorization or awareness, if not acquiescence and approval" for Mihaly to invest in a building, ownership and operation ("BOT") of a power station in Sri Lanka.

The Tribunal noted that there was never any BOT contract entered into between Mihaly and Sri Lanka for the power station, stressing that Sri Lanka took "great care" to point out that none of the documents relied upon by Mihaly created such a contractual obligation. The Tribunal held that, under those circumstances, Mihaly's expenditures did not qualify as an investment for the purposes of Article 25(1) of the ICSID Convention, which restricts the ICSID jurisdiction only to disputes "arising directly out of an investment." The Tribunal accepted that, in other circumstances, such expenditures might "perhaps be described as an investment." The Tribunal held, however, that in the absence of Sri Lanka's express consent to the implementation of the BOT project, Mihaly's expenditures represented a "pre-investment and development" expenses. The Tribunal concluded that the latter could be observed as an "undoubted feature of modern day commercial activity" where huge sums of money might need to be extended in the process of preparing the stage for a final contract.

Click here for the text of the award and click here for the text of the concurring opinion.

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United States (U.S.) Court of Appeals for the Second Circuit: Kruman v. Christie's International PLC, No. 01-7309 (March 13, 2002)

The U.S. Court of Appeals for the Second Circuit ("Second Circuit") held that the U.S. antitrust laws were applicable to the conduct directed at foreign markets. Christie's International PLC and Sotheby's Holdings, Inc., the two largest auction houses in the world, were alleged to have entered into an agreement to fix the prices they charged their clients for their services as auctioneers. In the first instance, the district court dismissed the case for lack of subject matter jurisdiction, holding that the Foreign Trade Antitrust Improvements Act of 1982 ("FTAIA") permitted suit only where "the conduct complained of had 'direct, substantial and reasonably foreseeable effects' in the United States ...." The district court also dismissed the Plaintiffs' argument that there is a customary international law rule proscribing price fixing.

The Second Circuit underlined that the effect and not the location of the conduct determined whether the antitrust laws applied, and noted that the Supreme Court had reaffirmed that the Sherman Act applied to foreign conduct that was meant to produce and "did in fact produce some substantial effect in the United States." The Second Circuit also noted that the FTAIA was intended to exempt from Sherman Act export transactions that did not injure the U.S. economy. The Second Circuit stressed, however, that the existence of a Sherman Act violation did not depend on whether anyone had actually suffered an injury. The Second Circuit held that the defendants' agreement to fix prices would qualify as a "conduct" that violated the Sherman Act regardless of whether they had charged the plaintiffs high prices or whether the plaintiffs had suffered injury. The Second Circuit therefore concluded that the FTAIA did not shield the defendants' conduct from scrutiny under the Sherman Act, and remanded the case to the district court to examine this issue in the first instance.

Click here for the text of the decision.

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United States (U.S.) District Court for the Central District of California: Coalition of Clergy, et al. v. Bush, et al. (Order Dismissing Petition for Writ of Habeas Corpus and First Amended Petition for Writ of Habeas Corpus), Case No. CV 02-570 (February 2002)

The U.S. District Court for the Central District of California ("district court") dismissed petition for writ of habeas corpus filed by the "Coalition of Clergy, Lawyers, and Professors" on behalf of the detainees kept at the U.S. Naval Air Base in Guantanamo, Cuba. The petition, inter alia, alleged that Guantanamo detainees were in custody in violation of the U.S. Constitution "or the laws or treaties of the United States," as well as in violation of certain rights under the Geneva Convention, "such as 'prohibition of [sic] transferring persons taken prisoner in [sic] war from the country of their capture'." (Emphasis in original.) As a relief, the Petitioners sought, inter alia, a "writ or order" directing Respondents to show the "true" cause for the detention of Guantanamo detainees, and to produce them at a hearing before the district court.

The district court found that the Petitioners lacked standing because there was no evidence proving that they sought, or obtained, authorization to file the petition on behalf of Guantanamo detainees. Alternatively, the district court held that even if the Petitioners had standing, the petition would have to be dismissed because none of the Respondents, which were considered to be custodians responsible for the detainees, was within the district court's territorial jurisdiction. The district court noted that some of the Respondents were within the jurisdiction of the U.S. District Court for the District of Columbia, but held that the transfer of the case to that court, or any federal court, was precluded by the lack of jurisdiction over the "parties and claims asserted in [the] petition."

The district court addressed the lack of jurisdiction over the detainees noting that it was "well established that certain constitutional protections available to persons inside the United States are unavailable to aliens outside of [the U.S.] geographic borders." The district court also noted that there was no legal or judicial precedent that would entitle Guantanamo detainees ? who were foreign enemy combatants that had been captured abroad and never "stepped foot on American soil" ? to pursue a writ of habeas corpus in an American civilian court. The district court opined that to allow otherwise would be unprecedented, and thus unwise, as well as against "sound practical reasons, such as legitimate security concerns." Additionally, the district court dismissed the Petitioners' alternative argument that the detainees were under the jurisdiction of the U.S. courts because Guantanamo Naval Base was under the U.S. sovereignty, holding that the 1903 Agreement for the Lease to the United States of Lands in Cuba for Coaling and Naval Stations specifically left the sovereignty over Guantanamo with Cuba.

Click here for the text of the dismissal.

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World Trade Organization (WTO) Appellate Body Report: United States ? Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R (February 15, 2002)

The WTO Appellate Body partially reversed, and partially upheld and modified, the panel report that found the United States decision to impose a definitive safeguard measure on imports of circular welded carbon quality line pipe ("line pipe") to be inconsistent with certain provisions of the 1994 General Agreement on Tariffs and Trade and the Agreement on Safeguards.

The line pipe measure was imposed by the Presidential Proclamation on February 18, 2000, following an investigation and remedy recommendation by the United States International Trade Commission. The measure comprised of annual duty increases on line pipe imports above 9,000 short tons from all countries, including the WTO Member States, but excluding imports from Canada and Mexico. Pursuant to the rules contained in the WTO dispute settlement mechanism, Korea requested consultations regarding the line pipe measure with the United States on June 13, 2000. The panel was formed after the parties had failed to resolve the dispute through consultations, and its subsequent report was appealed by both the United States and Korea.

The Appellate Body recalled that safeguard measures were "extraordinary remedies to be taken only in emergency situations," and which might be imposed on the "fair trade" of other WTO Members provided that certain conditions had be met. The Appellate Body reversed, inter alia, the panel's finding that Article 2.1 of the Agreement on Safeguards required that a discrete finding of either "serious injury" or of "threat of serious injury" must be made as a necessary prerequisite for establishing a right to apply a safeguard measure. The Appellate Body held that although Article 2.1 established a distinction between "serious injury" and "threat of serious injury," the right to apply a safeguard measure would be established if any or both of these conditions were fulfilled.

The Appellate Body reversed the panel's finding that Korea had failed to establish a prima facie case of the absence of parallelism in the line pipe measure. The Appellate Body held that the United States violated the Agreement on Safeguards by not providing a "reasoned and adequate explanation" for exclusion of line pipe imports from Canada and Mexico from the scope of application of the safeguard measure, while it had considered the same imports in the course of its analysis of whether the total line pipe imports triggered the application of the safeguard measure.

Click here for the text of the report.

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REPORTS AND OTHER DOCUMENTS

United Nations (U.N.) Security Council: Resolution 1405 (On the Situation in the Middle East, Including the Palestine Question), S/RES/1405 (April 19, 2002)

The U.N. Security Council expressed its concern over the dire humanitarian situation of the Palestinian civilian population, and especially over the reports from the Jenin refugee camp about "an unknown number of deaths and destruction." The Security Council emphasized the urgency of access of medical and humanitarian organizations to the Palestinian civilians. The Security Council also stressed the need for all concerned to ensure the safety of civilians, and to "respect the universally accepted norms of international law." The Security Council welcomed the Secretary-General's initiative to develop "accurate information" regarding recent events in the Jenin refugee camp by the means of a fact-finding team.*

* On May 2, 2002, it was reported that the Secretary-General informed the Security Council of his intention to disband the fact-finding team, following the Israel?s Security Cabinet decision that the clarification process would not begin as long as certain terms had not been met.

Click here for the text of the resolution.

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United Nations (U.N.) Security Council: Resolution 1408 (On the Situation in Liberia), S/RES/1408 (May 6, 2002)

The U.N. Security Council determined that the Government of Liberia's active support to armed rebel groups in the region, in particular to the former Revolutionary United Front, constituted a threat to international peace and security in the region. Acting under Chapter VII of the U.N. Charter, the Security Council decided that the Government of Liberia had not complied fully with the demands in paragraphs 2(a)-(d) of the Resolution 1343 (2001). The Security Council requested the Government of Liberia to establish an effective, transparent and internationally verifiable Certificate of Origin regime for Liberian rough diamonds. Additionally, the Security Council demanded from all States in the region to, inter alia, cease military support for armed groups in neighboring countries, and refrain from any actions that might further destabilize situation on the borders between Guinea, Liberia and Sierra Leone.

Click here for the text of the resolution.

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United States (U.S.): Letter to the Secretary-General of the United Nations Regarding the Rome Statute of the International Criminal Court (April 27, 2002)

Mr. John R. Bolton, the U.S. Undersecretary of State for Arms Control and International Security, sent the following letter to Mr. Kofi Annan, the Secretary-General of the United Nations:

"Dear Mr. Secretary-General:

This is to inform you, in connection with the Rome Statute of the International Criminal Court adopted on July 17, 1998, that the United States does not intend to become a party to the treaty. Accordingly, the United States has no legal obligations arising from its signature on December 31, 2000. The United States requests that its intention not to become a party, as expressed in this letter, be reflected in the depositary's status lists relating to this treaty.

Sincerely,

/s/

John R. Bolton"

Document was obtained in print format from the U.S. Department of State.

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BRIEFLY NOTED

On May 3, 2002, Benin and Niger jointly submitted a boundary dispute to the International Court of Justice. The dispute relates to the boundary delimitation in the sector of river Niger, including its islands, and river Mekrou. For more information, click here to access the related press release. ­

The American Society of International Law is seeking to fill the position of Director of Research and Outreach, which will be vacated in Autumn 2002. The Director of Research and Outreach is a member of the ASIL's senior staff and reports to the Society's Executive Director. Review of applications will begin on June 1, 2002. For more detailed information, please click here.

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International Law In Brief (ILIB) - Copyright 2002 - The American Society of International Law (ASIL)
Editors: Branislav A. Maric, Scott Smith