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
June 10, 2004


TREATIES, AGREEMENTS AND RELATED DOCUMENTS

JUDICIAL AND SIMILAR PROCEEDINGS

DECLARATIONS, RESOLUTIONS AND OTHER DOCUMENTS

TREATIES, AGREEMENTS AND RELATED DOCUMENTS

U.S.-Australia Free Trade Agreement (FTA) (Final Text) (May 18, 2004)

The United States signed the final text of the U.S.-Australia FTA on May 18, 2004. The U.S.-Australia FTA sets forth a free trade zone and affirms the parties? existing rights under the WTO and other existing agreements. The agreement sets forth, inter alia, provisions on goods (including pharmaceuticals), agriculture, investment, government procurement, services, intellectual property rights, electronic commerce and dispute resolution.

Article 3(1) of Chapter 3 (Agriculture) provides:

?The Parties shall work together to reach an agreement on agriculture in the WTO that substantially improves market access for agricultural goods, reduces, with a view to phasing out, all forms of agricultural export subsidies, develops disciplines that eliminate restrictions on a person?s right to export, and substantially reduces trade-distorting domestic support.?         

Annex 2-C - Pharmaceuticals of Chapter 2 (National Treatment and Market access for Goods) calls for greater transparency and cooperation between healthcare authorities. Paragraph three of Annex 2-C provides for the establishment of a Medicines Working Group composed of federal government officials whose objective shall be ?to promote discussion and mutual understanding of issues relating to this Annex (except those issues covered in paragraph 4), including the importance of pharmaceutical research and development to continued improvement of healthcare outcomes.?

Chapter 15 provides commitments on government procurement. (Australia has no WTO government procurement commitments.) Article 15.1 (Scope and Coverage), paragraph 4(a) states:

?The Parties acknowledge and reaffirm the commitments made in the Memorandum of Agreement between the Government of Australia and the Government of the United States Concerning Reciprocal Defense Procurement, dated April 19, 1995 (the ?MOA?) and acknowledge that the MOA, and any extension thereof applies to certain defense procurements that are outside the scope of this Chapter.?

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JUDICIAL AND RELATED DOCUMENTS

International Centre for Settlement of Investment Disputes (ICSID) (Award): Generation Ukraine, Inc. v. Ukraine (ICSID CASE No. ARB/00/9)(September 16, 2003)

The Tribunal dismissed all of the investor's claims, finding no breach of the Ukraine-U.S. Bilateral Investment Treaty.

The Claimant, a U.S. corporation, sought damages in excess of USD 9.4 billion, for alleged harm to its  investment in commercial property in Kyiv, Ukraine, namely the "Parkview Office Building Project." The Claimant contended that it was encouraged by the Ukrainian Government in late 1992 to invest in Ukraine; that it established a local investment company in February 1993 (Heneratsiya Ltd.); and that, after obtaining approval of the project, it found itself blocked by interference from local administrative authorities over the course of the next six years. Such interference included, inter alia, the Kyiv City State Administration's "failure to produce revised land lease agreements with valid site drawings." The Claimant argued that this among a series of acts of interference was tantamount to expropriation and therefore prohibited by the Ukraine-U.S. Bilateral Investment Treaty ("BIT"), giving rise to a remedy by means of ICSID arbitration.

The Tribunal decided to join issues of jurisdiction and admissibility to the merits. The Tribunal found that in terms of jurisdiction ratione temporis, it only had jurisdiction over investment disputes that came into existence after the BIT entered into force, notwithstanding the fact that the BIT applies to investments existing prior to its entry into force.

Although the Tribunal accepted that the Claimant's shareholding interest in Heneratsiya prima facie constituted an investment within Article I(I)(a)(ii) of the BIT which includes "shares of stock or other interests in a company," it found that Generation Ukraine's ownership rights in Heneratsiya were not affected by the conduct which gave rise to its complaint. Also the Tribunal found that in regard to the alleged failure of Kyiv authorities to provide revised land lease agreements, "such omission did not have the express intention of depriving the Claimant of the legal basis of [his] right to proceed to construction."  It further concluded that the conduct of the Kyiv City State Administration "does not come close to creating a persistent or irreparable obstacle to the Claimant's use, enjoyment or disposal of its investment." It therefore found no instances of indirect expropriation under the BIT.

The Tribunal further noted that it "does not exercise the function of an administrative review body to ensure that municipal agencies perform their tasks diligently, conscientiously or efficiently. That function is within the proper domain of domestic courts and tribunals that are cognisant of the minutiae of the applicable regulatory regime."

Members of the Tribunal

Dr. Eugen Salpius

Dr. Jürgen Voss

Mr. Jan Paulsson, President

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United States (U.S.) Court of Appeals for the Eleventh Circuit: Furnes v. Reeves (No. 03-12826 District Court No. 02-02998-CV-TWT-1) (March 10, 2004)

The U.S. Court of Appeals for the Eleventh Circuit ("the Court of Appeals" or the "Eleventh Circuit") concluded that a child was wrongfully removed or retained from Norway by the defendant in violation of the plaintiff?s rights of custody under the Hague Convention on the Civil Aspects of International Child Abduction (?the Hague Convention.?). Adopting a de novo standard of review, the Eleventh Circuit overruled the District Court?s decision which denied the plaintiff?s petition for the return of his child to Norway. At issue was whether the plaintiff?s rights to his child under Norwegian law were the type of rights that entitled him to the return of his child under the express terms of the Hague Convention.

The plaintiff, Furnes is a citizen and resident of Norway, and the defendant, Reeves is a citizen and resident of the United States. Furnes filed a petition under the International Child Abduction Remedies Act, 42 U.S.C. §§ 11601-11611 (1998) (?ICARA?), seeking the return of his daughter to Norway from Georgia in the United States where she now resides with her mother, Reeves. The child was born in Norway in 1996 and lived there until 2001, when her mother visited the United States and later refused to bring her child back to Norway.

On August 25, 1999, the Bergen City Court in Norway entered an order granting Furnes custody of his daughter. Pursuant to a settlement agreement regarding custody (?the Agreement?), the parties were to maintain ?joint parental responsibility? for their child under Norwegian law; the child would live with her mother; and her father would have access to the child on certain days and at certain times. The agreement provided for ?joint parental responsibility,? a term which has a designated meaning under Norwegian law and, importantly, means more than access rights. Furnes?s ICARA petition alleged that Reeves wrongfully removed Jessica from Norway in violation of Furnes?s joint custody rights and sought her return pursuant to Article 12 of the Hague Convention.

Under § 30 of Norway?s Act No. 7 of 8 April 1981 relating to Children and Parents (the ?Children Act?), a parent with joint ?parental responsibility? has the right (albeit a shared right) ?to make decisions for the child in personal matters.? However, § 35b of the Children Act narrows the meaning of ?joint parental authority? in the case where the child lives with only one parent. Section 35(b) of the Children Act states that the parent with whom the child resides has decision-making authority ?concerning important aspects of the child?s care,? but not all aspects of the child?s care. In addition, § 43 of the Children Act provides: ?If the parents have joint parental responsibility, both of them must consent to the child moving abroad.? The Eleventh Circuit reasoned that Furnes?s joint parental responsibility effectively gave him the right, generally referred to as a ne exeat right, to determine whether the child can live outside of Norway with her mother. (The District Court had concluded that, at the time of removal, Furnes was exercising mere access rights coupled with a ne exeat right under Norweigan law ? not actual custody rights.)

The Eleventh Circuit reiterated that the stated purpose of he Hague Convention was ?to protect children internationally from the harmful effects of their wrongful removal or retention and to establish procedures to ensure their prompt return to the State of habitual residence as well as to secure rights of access.?

The dispute in this case centered on whether Furnes?s rights under Norwegian law, either individually or together, were ?rights of custody? as defined under the Hague Convention. Article 5(a) of the Hague Convention defines ?rights of custody? to include ?rights relating to the care of the person of the child and, in particular, the right to determine the child?s place of residence.?

The Court determined that § 30 of the Norwegian law could very well give Furnes a ?right of custody? as defined under the Hague Convention. However, the Court chose to rely more heavily on the fact that Furnes?s ne exeat right, under § 43 of the Norwegian Children Act, granted Furnes the substantive right (albeit a joint right) to determine whether the child lives in Norway, and thus the right to determine the child?s place of residence. The Court decided that the ne exeat right amounted to ?the right to determine the child?s place of residence? under Article 5 of the Hague Convention. To this end, it stated: ?Given that the goal of the Hague Convention is to deter international abduction, we readily interpret the ne exeat right as including the right to determine the child?s place of residence because the ne exeat right provides a parent with decision-making authority regarding the child?s international relocation.? In addition, the Court ruled that the fact that Furnes does not share in one aspect of that right (i.e., the right to determine Jessica?s place of residence within Norway) does not affect his right to determine her place of residence outside Norway. Furthermore, the Court concluded that the ne exeat right was, itself, a right of custody under the Hague Convention.

Significantly, the Eleventh Circuit referred to a number of international cases to aid its treaty interpretation. It stated that courts in the United Kingdom, Australia, South Africa, and Israel have all adopted a broad view of ?rights of custody? and ordered return under the Hague Convention where a child is removed in violation of a ne exeat right. However, the Eleventh Circuit noted that its decision did diverge from those of the Second, Fourth, and Ninth Circuits, stating: ?The seminal United States Circuit Court case on the issue is Croll v. Croll, 229 F. 3d 133 (2d Cir. 2000). The Fourth and Ninth Circuits essentially adopted the Croll majority?s reasoning, as did the District Court in this case.?

Disagreeing with the majority analysis in Croll, the Eleventh Circuit concluded: (1) A ?ne exeat? right is not a mere limitation; (2) a ?ne exeat? right can be exercised without wrongful removal; and (3) the Croll majority?s fears that the aims of the Hague Convention would be thwarted were at best unique to the particular facts of that particular case. Furthermore, the Eleventh Circuit highlighted how Article 13(b) of the Hague Convention provides that a court is not bound to return the order of a child where his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.? 

Having determined that Furnes had ?rights of custody,? under the Hague Convention, the Court then examined whether these rights were ?actually exercised, either jointly or alone, or would have so been but for the removal or retention? under Article 3(b) of the Hague Convention. The Court concluded, inter alia, that Furnes would have exercised his custody rights under the ne exeat clause in § 43 of the Children Act but for his daughter?s unlawful removal.

The Eleventh Circuit reversed the District Court?s denial of Furnes?s ICARA petition and remanded the case with instructions.

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International Criminal Tribunal for the Former Yugoslavia (ICTY) Indictment: Prosecutor v. Norac (May 20, 2004)

Pursuant to her authority under Article 18 of the Statute of the International Criminal Tribunal for the Former Yugoslavia (?Statute of the Tribunal?), the prosecutor for the ICTY charged Mr. Mirko Norac with ?crimes against humanity and violations of the laws or customs of war.?

On September 1991, Mirko Norac, who was born in Croatia, was appointed Commander of the 118th Brigade of the Croation army or the Hrvatska Vojska (?the HV.?) He later became Commander of the Ninth Guards Motorized Brigade at the time of the Croatian military operation in the Medak pocket. During this operation he was appointed Commander of a combat group formed for the purposes of conducting the operation.

The Croatian attack on the Medak Pocket commenced on September 9, 1993. According to the Prosecutor, after approximately two days of fighting by the Croatian forces, including the Ninth Guards Brigade of which Mr. Norac had command,?the Medak Pocket became uninhabitable. The villages of the Pocket were completely destroyed, thereby depriving the Serbian population of their homes and livelihood.?

The indictment charged Mr. Norac pursuant to Article 7(1) and Article 7(3) of the Statute of the Tribunal. Article 7(1) governs individual criminal responsibility and includes ?planning, instigating, ordering, or otherwise aiding and abetting in the planning, preparation or execution of any acts or omissions set forth in the Indictment.? The indictment charged that Mr. Norac, ?by virtue of his high-ranking position as a Colonel in the HV and Commander of the Ninth Guards Motorized Brigade of the HV and Sector 1, from September 9 to 17, 1993, played a central role in developing, planning, ordering and/or executing the Medak Pocket operation, during which serious violations of International humanitarian law and Crimes Against Humanity were committed.?

Article 7(3) of the Statute of the Tribunal states that ?A superior is criminally responsible for the acts of his subordinates, if the superior knew or had reason to know, that his subordinates were about to commit such acts, or had done so, and the superior failed to take necessary and reasonable measures to prevent such acts, or to punish the perpetrators thereof.? The indictment charged that Mr. Norac ?by virtue of his high-ranking position as a Colonel in the HV and Commander of the Ninth Guards Motorized Brigade of the HV and Sector 1, had the power, authority and responsibility to prevent or punish serious violations of international humanitarian law committed during the Medak Pocket operation.?

Mr. Norac was charged on five counts under Article 7 (1) and (3) of the Statute of the Tribunal. Pursuant to Article 5, he was charged with ?persecutions? on political, racial and religious grounds, as well as the crime of ?murder?. Pursuant to Article 3, he was further charged with ?murder?, ?plunder of property?, ?wanton destruction of cities towns and villages? and finally ?violation of the laws or customs of war.?

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United States (U.S.) Supreme Court: Olympic Airways v. Husain, individually, and as personal representative for the Estate of Hanson, deceased, et al.  No. 02-1348 (February 24, 2004)

The Supreme Court upheld the decision of the Ninth Circuit Court of Appeals (?the Ninth Circuit?) in a wrongful death suit, holding an aircraft carrier liable for a passenger?s death because of a failure to act under the Convention for the Unification of Certain Rules Relating to International Carriage by Air (?Warsaw Convention?).

While Rubina Husain (Respondent) and her husband, Dr. Hanson, were traveling overseas, Mrs. Husain requested that Olympic Airways (Petitioner) provide seats away from the smoking section because Dr. Hanson had asthma and was sensitive to second-hand smoke. After boarding, they discovered that their seats were three rows in front of the smoking section. A flight attendant refused respondent?s three requests to move Dr. Hanson, and erroneously stated on the respondent?s third request that the plane was full. As the smoking noticeably increased, Dr. Hanson walked towards the front of the plane to get fresher air. He then received medical assistance, but died.                 

Article 17 of the Warsaw Convention imposes liability on an air carrier for a passenger?s death or bodily injury caused by an ?accident? that occurred in connection with an international flight. Applying the Supreme Court?s seminal decision in Air France v. Saks, 470 U.S. 392 (1985) the Court explained that the term ?accident? in the Warsaw Convention refers to an ?unexpected or unusual event or happening that is external to the passenger,? and not to ?the passenger?s own internal reaction to the usual, normal and expected operation of the aircraft.? The question, then, in this case was whether the ?accident? condition precedent to air carrier liability under Article 17 of the Warsaw Convention could be satisfied. The Court noted that the Warsaw Convention, unfortunately, does not define the term ?accident.? However, quoting from the Saks decision, the Court characterized the term ?accident? as ?encompassing something more than unintentional conduct.? In addition, for the purposes of the ?accident? inquiry, the Court in Saks stated that a plaintiff need only be able to prove that ?some link in the chain was an unusual or unexpected event external to the passenger? and that an accident can take the form of inaction. 

In this case, the Court focused its attention on whether the air carrier?s unusual and unexpected refusal to assist its passenger could constitute a link in a chain of causation with the result that the passenger?s pre-existing medical condition was aggravated by exposure to a normal condition in the aircraft cabin. The Court felt that the petitioner?s focus on the ambient cigarette smoke was misplaced because, although the ambient cigarette smoke may have been normal during the flight, it neglects the reality that there are often ?multiple interrelated factual events that combine to cause any given injury.? According to the Court, the Saks decision recognized that ?any one of these factual events of happenings may be a link in the chain of causes and ? so long as it is unusual and unexpected ? could constitute an ?accident? under Article 17.? Further, the Court stated that ?the flight attendant?s refusal on three separate occasions to move Dr. Hanson was also a ?factual event,? ? and that the District Court correctly found this to be a link in the chain of causes that led to Dr. Hanson?s death.                   

To confirm their interpretation, the Court referred to other provisions of the Warsaw Convention, namely, Article 22 and 25, to suggest that there is often no distinction between action and inaction on the ultimate issue of liability. It stated that Article 25 provides that Article 22's liability cap does not apply in the event of ?wilful misconduct or ... such default on [the carrier?s] part as ... is considered to be wilful misconduct. Thus, Articles 17 and 25 should be read together and tend to show that inaction can give rise to liability. In addition, Article 20(1) makes clear that the ?due care? defense is unavailable when the air carrier has taken ?all necessary steps to avoid damage.?  

For these reasons, the Court concluded that an air carrier?s inaction can be the basis of liability. Affirming the judgment of the Court of Appeals, the Court held that the airline?s conduct constituted an ?accident? under Article 17 of the Warsaw Convention.

Justice Scalia delivered a dissenting opinion, in which Justice O?Connor partly joined. Justice Scalia disagreed with the District Court?s analysis that Article 17 makes no distinction between action and inaction. Furthermore, he observed that if the issue of action-inaction was irrelevant anyway, he said the Court should not have labored to discuss it. He outlined that, within the past year, courts in both England and Australia have rendered decisions squarely at odds with the holding in this case. Justice Scalia referred to both the English case of Deep Vein Thrombosis and Air Travel Group Litigation, [2003] EWCA Civ. 1005 and the Australian case of Qantas Ltd. V. Povey, [2003] VSCA, which held that inaction itself can never properly be described as an accident. He regretted that the United States Supreme Court had now placed itself in conflict with other states by deciding whether inaction could constitute an action when this case actually involved action. He argued: ?Whether inaction can constitute an accident under the Warsaw Convention is a significant issue on which international consensus is important; whether Hussain recover for her husband?s death in this one case is not. As they stand, however, the core holdings of this case and Deep Vein Thrombosis ? their rationales decidendi ? are not only not ?not inconsistent?; they are completely opposite.? 

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DECLARATIONS, RESOLUTIONS AND OTHER DOCUMENTS

United Nations (U.N.) Security Council: Resolution 1546 (The Situation between Iraq and Kuwait) (2004) (June 8, 2004)

The Security Council noted that it "look[ed] forward to the end of the occupation and the assumption of full responsibility and authority by a fully sovereign and independent Interim Government of Iraq by 30 June 2004" and "affirm[ed] that the United Nations should play a leading role in assisting the Iraqi people and government in the formation of institutions for representative government." Acting under Chapter VII of the Charter of the United Nations, the Security Council endorsed the formation of a sovereign Interim Government of Iraq as presented on June 1, 2004, which will have responsibility for governing Iraq by June 30, 2004, "while refraining from taking any actions affecting Iraq's destiny beyond the limited interim period until an elected Transitional Government of Iraq assumes office..."

The Security Council Resolution provides that democratic elections are to be held to form a Transitional National Assembly by December 31, 2004 if possible, or by the latest, January 31, 2005. This Transitional National Assembly will have responsibility for forming a Transitional Government of Iraq and for drafting a permanent constitution for Iraq. The Security Council invited the Government of Iraq to consider convening an international meeting to support the transition to democracy.

The Security Council noted that the presence of the multinational force in Iraq is "at the request of the incoming Interim Government of Iraq" and therefore reaffirmed the authorization for the multinational force under unified command established pursuant to Resolution 1511 (2003).

In regard to the dissolution of the Coalition Provisional Authority, the Security Council noted that the Interim Government of Iraq and its successors will assume the rights and obligations under the Oil-for-Food Program in addition to authority over prior contracts.

The Security Council decided that the provisions of paragraph 22 of Security Council Resolution 1483 (2003) shall continue to apply, with the exception that privileges and immunities provided in that paragraph shall not apply with respect to any final judgment arising out of a contractual obligation entered into by Iraq after June 30, 2004. Paragraph 22 of Resolution 1483 provides that "petroleum, petroleum products, and natural gas originating in Iraq shall be immune, until title passes to the initial purchaser from legal proceedings against them and not be subject to any form of attachment, garnishment, or execution, and that all States shall take any steps that may be necessary under their respective domestic legal systems to assure this protection, and that proceeds and obligations arising from sales thereof, as well as the Development Fund for Iraq, shall enjoy privileges and immunities equivalent to those enjoyed by the United Nations except that the abovementioned privileges and immunities will not apply with respect to any legal proceeding in which recourse to such proceeds or obligations is necessary to satisfy liability for damages assessed in connection with an ecological accident..."

The Security Council noted the letters annexed to the Resolution by Dr. Ayad Allawi, Prime Minister of the Republic of Iraq, and the U.S. Secretary of State Colin Powell. In particular it noted the intention set out in the annexed letter by Secretary of State Colin Powell "to create a distinct entity under unified command of the multinational force with a dedicated mission to provide security for the United Nations presence in Iraq..." In his letter to the President of the Security Council, Dr. Ayad Allawi states that "[u]ntil we are able to provide security for ourselves, including the defence of Iraq's land, sea and air space, we ask for the support of the Security Council and the international community in this endeavour."

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United Nations (U.N.) Security Council: Resolution 1545 (The Situation in Burundi), S/RES/1545 (May 21, 2004)

The Security Council reaffirmed its strong commitment to the respect of the sovereignty, independence, territorial integrity and unity of Burundi. It also reaffirmed its full support for the process of the Arusha Peace and Reconciliation Agreement for Burundi (?the Arusha Agreement?), signed at Arusha on August 28, 2000, which called on all the Burundian parties to fully honor their commitments. The Security Council encouraged the transitional institutions of Burundi to enact without delay the laws and regulations required for the organization of the electoral process under the Arusha agreement so that this process can take place before the expiration of the transitional period of October 31, 2004.

The Security Council further condemned all acts of violence, as well as human rights and international humanitarian law violations, and was particularly concerned by the increasing incidents of rapes, including mass rapes.

Acting under Chapter VII of the UN Charter, the Security Council decided to authorize, for an initial period of six months as from June 1, 2004, with the intention to renew it for further periods, the deployment of a peacekeeping mission in Burundi entitled United Nations Operation in Burundi (?ONUB.?) The ONUB received its mandate from paragraphs five and six of this resolution. The ONUB will seek to support and help implement the efforts undertaken by the Burundians to restore lasting peace and bring about reconciliation, as provided under the Arusha Agreement. The ONUB will also provide the transitional Government and authorities with assistance to carry out their tasks.                      

The Security Council also expressed its deep concern over the illicit flow of arms provided to armed groups and movements and urged international financial institutions and the donor community to contribute to the long term economic development of Burundi.

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