State Responsibility

Every breach of international obligation by international subject entails its international

responsibility.

The law of state responsibility is the most fully developed branch of international
responsibility. The law of state responsibility enunciates the consequences of a breach
by a state of an international obligation and regulates the permissible responses to such
breaches.

A state is responsible if

- If it fails to honour a treaty

- If it violates the territorial sovereignty of another state
- If it damages the territory or property of another state
- If it uses armed forces against another state
- If it injures the diplomatic representatives of another state
- If it mistreats the nationals of another states

The law of state responsibility traditionally considered as rules of customary

international law. The contemporary development of this area of international law been
greatly influenced by the works of the International Law Commission on study of
state responsibility in 1949.

The General Assembly (GA) take note on the works of the commission and adopted on
a resolution based on Articles on Responsibility of States for Internationally
Wrongful Acts 2001. (ARSIWA)
The Elements of State Responsibility

Art 1 of ARSIWA provides that “every internationally wrongful act of a state entails the
international responsibility of that state”.

Art 2 of ARSIWA provides that there is an internationally wrongful act of a state when
conduct consisting of an action or omission

● Is attributable to the state under international law

● Constitutes a breach of an international obligation of the state.

Specifies the two constituent elements of an internationally wrongful act

● Attribution of conduct to the state

● Breach of an international obligation by the state.

An example of an omission of a state can be observed through case: -

Corfu Channel Case 1949

The ICJ found that it is sufficient basis to held Albanian responsible, for it knew or must
have known of the presence of the mines in its territorial waters yet did nothing to warn
third states of their presence.

United States Diplomatic and Consular Staff in Tehran Case 1980

The court found that Iran was responsible of breach of international obligation for its
inaction of its authorities which failed to take appropriate steps to protect the embassy
and its staff.

There are three requirements of State Responsibility

- Attribution
- Breach
- Absence of any valid defence or justification (circumstances precluding wrongful
act).
Attribution Of Conduct to The State
Conduct of State Organs (Art 4)

Since the state is an abstract entity, states can act only by and through their organs. A
state organ is considered as acting for the state and its conduct is attributable to the
state for which the state is responsible under international law.
A state organ covers all the individual or collective entities which make up the
organisation of the state and act on its behalf. According to well established rule of
international law, the conduct of any organ of a state must be regarded as an act of the
state, this rule is of a customary character.

Three main Organs of State

Executive Organ –
Southern Pacific Properties (Middle East) Ltd v Arab Republic of Egypt 1993
The plaintiff entered into a contract with Egyptian government to develop a land for
tourism in Egypt. After an intense oppose from the public, the government of Egypt
withdraw the permission given to the plaintiff to develop the land for tourism.
It was held that the act in question were the acts of Egyptian authorities, including the
highest executive authority of the government. The state is responsible for unlawful acts
of state organs.
The Rainbow Warrior Incident 1987
A Greenpeace vessel as it was leaving to protest against French nuclear tests in
Pacific, it was blown up in Auckland Harbour by French government secret service
agents.
The French government admitted its responsibility, New Zealand sought and received
apology and compensation for the violation of its territorial sovereignty.

Judicial Organ –
Can be the cause of responsibility of a state mainly in the context of denial of justice. In
respect of the application of treaties, if the courts decline to give effect to the treaty or
the unable to do so because the necessary change in the international law has not been
made, their judgment involve the state in breach of treaty.
Legislative Organ –
The state bears full international responsibility for such legislative acts of parliament as
are contrary to international law and as have been incorporated as part of its national
law.

Superior and Subordinate Organ

Art 4 does not make any distinction between the acts of superior and subordinate
officials.

Organ of the central government or of a territorial unit of the state.

In the Pallat Case 1929
- It is reaffirmed that the principle of the international responsibility of a federal
state for all the acts of its separate states which give raise to claims by foreign
states.

In an official Capacity
The state will be responsible for the conduct of a person or entity which has the status
of a state organ, if that person or entity acts in an official capacity.
Mallen case (the Mexico consul been attacked by American Police Officer).

Persons or entities exercising elements of governmental authority (Art 5)

The article refers to the situation in some countries where the law of the state empowers
certain public corporation and even in special cases private companies to exercise,
elements of governmental authority.
Responsibility for Ultra Vires Act (Art 7)
“the conduct of an organ of a state or of a person or entity empowered to exercise
elements of the governmental authority shall be considered an act of the state under
international law, if the organ, person or entity acts in that capacity, even if it exceeds its
authority or contravenes or quarantine.
Claire Claim 1929
The tribunal held that, for the ultra vires acts of officials to be attributable to the state,
“they should have acted at least apparently, as authorised officials of organs, or that in
acting they should have used powers or measures appropriate to their official
character”.
Mexico was responsible in view of the fact that the two officers acted in their capacity of
officers and used the means placed at their disposal by virtue of that capacity.

Youmans Claim 1926

The commission stated that the participation of the soldiers in the murder could not be
regarded as acts of soldiers committed their private capacity when it was clear that at
the time of the commission of these acts the men were on duty under the immediate
supervision and in the presence of a commanding officer. Mexico held responsible.

Conduct Of Persons Directed/Controlled by a State. (Art 8)

“The conduct of a person/group of persons shall be considered an act of a state under
international law if the person or group of persons is in fact acting on the instruction of
or under the direction/control of that state in carrying out the conduct”.
A conduct may be attributable to the state when there is a specific factual relationship
between the person or entity engaging in the conduct and the state.
Art 8 handles two such circumstances
- Involves private person acting on the instructions of the state in carrying out the
wrongful act
- Deals with a more general situation where private person act under the state’s
direction or control.
More complex issues arise in determining whether conduct was carried out under the
direction or control of a state. Such conduct will be attributable to the state only if it
directed or controlled the specific operation and the conduct complained of was an
integral part of that operation. (Effective Control Test)
Nicaragua Case 1986
The question was whether the conduct of the contras, an insurrection movement
against the Nicaragua Government was attributable to the US so as to hold the US
responsible for breaches of international humanitarian law committed by the contras.
This question was examined by the court by the notion of effective control.
“it would in principle have to be proved that the state had effective control of the military
and paramilitary operations in the course of which the alleged violations are committed”
And there is no clear evidence that US has effective control over the Contras although
US supported heavily the Contras.

Tadic Case
In this case the International Criminal Tribunal of former Yugoslavia (ICTY) adopted a
more flexible ‘overall control’.
This test was formulated by ICTY in an effort to qualify the relationship between the
Federal Republic of Yugoslavia and Bosnian Serb armed forces. \
The legal question was whether this armed force could in fact be linked to the Federal
Republic of Yugoslavia due to the high level of control the latter exercised over the
group, thus making the conflict international and granting the civilians under its control
the status as protected persons.
The legal issue and factual situations in Tadic case is different from Nicaragua case.
That why the International Law Commission in its commentary on Art 8 emphasises that
“such conduct will be attributable to the state only if it directed or controlled the ‘specific
operation’ and the conduct complained of was an integral part of that operation. This
shows that it obviously adopted the effective control test rather than overall control test.
This were affirmed in the Genocide Convention by held that the overall control test was
not appropriate for states responsibility and that the test under the customary
international law was that reflected in Art 8.
Conduct acknowledged and adopted by a state as its own
This article provides for the attribution to a state of conduct that was not or may not
have been attributable to it at the time of commission, but which is subsequently
acknowledged and adopted by the state as its own.
Acknowledgement and adoption must be distinguished from mere support or
endorsement.

The United States Diplomatic and Consular Staff in Tehran case 1980
The court divided the events into two phases: -
First – the attack was carried out by militants who in no way could be regarded as
agents or organs of the Iranian State.
Therefore, the militants conduct in mounting the attack and seizing the inmates as
hostages could not be imputable to the state on that basis.
Nevertheless, held responsible for failed to protect embassy and the diplomats as
required by international law.
Second – Started after completion of the occupation of the embassy. The Iranian
Government was legally bound to bring to an end the unlawful occupation and pay
reparation. Instead, it approved and endorsed the occupation and even issued a
decree.
The decree expressly declare that the embassy and the hostages would remain as they
were until the US had hand over the former Shah for trial.
Court held – the approval given to the acts of the militants and the decision to
perpetuate them translated continuing occupation of the embassy and detention of the
hostages into acts of that state.
The militants had now become agents of the Iranian State for whose acts the state itself
was internationally responsible
This is the prime example of subsequent adoption by a state of a particular conduct.
Conduct of Private Person or Entities – not attributable to the state.
Conducts which are not from state organs or not exercising elements of governmental
authority or not acting as agents of the state is not attributable to the state.
- Violence against foreigners
- Destruction of foreign properties by
● private individuals/insurgents

● secessionist

● terrorist

● rioters

● militants

As a general rule is not attributable to the state.

State will only be responsible for its own omission or inaction

The states only will be held responsible for the action of individuals only if its own
conduct by omission may be proved that is, there is failure to act in conformity with
international legal standards
The state is responsible for the conduct (omission, inaction, failure) of its own organs
(police, security forces, courts)
There are two forms of omission is attributable to state responsibility.

● Failure to exercise due diligence

● Denial of Justice

Failure to exercise due diligence

There is extensive and consistent state practice and arbitral decisions supporting the
duty of a state to exercise due diligence to protect foreign nationals and property.
Asian Agricultural Products Ltd v Sri Lanka 1990
British company brought an international action against Sri Lanka and claimed
compensation for the destruction of its Sri Lankan farm.
Tribunal found that the farm was in an area that was heavily under the control of Tamil
tigers and that the farm management had offered to dismiss farm staff thought by the
government to assist them.
Neglecting this offer, the government launched vast counter insurgency attack and killed
farm workers and destroyed the farm. The tribunal held the government is responsible
because it violated the due diligence obligation.

Denial of Justice
The State is responsible under international law if it fails to punish responsible
individuals or to provide the injured foreign national with the opportunity of obtaining
compensation from the wrongdoers in the local courts.
Janes Claim 1926
Jane, an American citizen were murdered by a well-known person in the Mexican
community at a mine in Mexico. There is evidence that a local magistrate been informed
of the murder right after it took place.
However even after eight years, the murderer had not been apprehended and punished
by the Mexican authorities.
The commission found that Mexico is responsible for the denial of justice and awarded
damages accordingly.

Breach of International Obligation

Art 12 provides “there is a breach of an international obligation by a state when an act
of that state is not in conformity with what is required of it by that obligation regardless
of its origin or character.
Rainbow Warrior Case – “any violation by any state of any international obligation of
whatever origin, gives rise to state responsibility and consequently to the duty of
reparation.
International obligation may be established by

● Customary rule

● Treaty

● Judgement of international tribunal

Intemporal Law
Art 13 – “an act of a state does not constitute a breach of an international obligation
unless the state is bound by the obligation in question at the time the act occurs”.
Island of Palmas case – “Art 13 provides protection against the retrospective application
of international law in matters of state responsibility”.

Invocation of the Responsibilities of a state.

Invocation means taking measures of a formal character, for example, the raising of a
claim against another state or the commencement of proceeding before an international
court or tribunal.

Invocation of responsibility by an injured state

Art 42 – a state is entitled as an injured state to invoke the responsibility of another

state if the obligation breached is owed to the state individually or a group of states or
the international community as a whole, and the breach affects that state.

Injured state – the state whose individual right has been infringed by the internationally
wrongful act or which has otherwise been particularly affected by that act.

Injured state is entitled to resort to all means of redress, such as can raise a claim
against the responsible state, commence proceedings before an international tribunal or
take countermeasures.

The invocation of responsibility by other states, the concept of obligation

erga omnes

Erga Omnes – towards all

Erga omnes obligation concerned with the enforeceability of norms of international law,
the violation of which is deemed to be an offence not only against the state directly
affected by the breach, but also against all members of the international community.
Art 48(1) any state other than an injured state is entitled to invoke the responsibility of
another state if the the obligation breached is owed to the international community as a
whole.

Barcelona Traction Light and Power Co case 1970

“An essential distinction should be drawn between the obligations of a stae towards the
international community as a whole and those arising vis a vis another state in the field
of diplomatic protection.

Such obligation derives in contemporary international law on the principles and rules
concerning basic rights of the human person including protection from slavery and racial
discrimination”.

The court in this case referred by way of example to outlawing of acts of aggression and
of genocide and protection from slavery and racial discremination as obligation erga
omnes.

East Timor case – the court added the rights of self determination of people to the list.

Invocation of responsibility under Art 48 give rise to a more limited range of

rights as compaed to those of injured state under article 42. Art 48 mainly
focussed on the cessation of the internationally wrongful act and assurance
and guarantees of non repitation.

The second type of claim that can be made by any state agaisnt the
responisble state is a claim for the performance of the obligation of
reparation in the interest of the injured state or of the beneficaries of the
obligation breached.
The Law of Diplomatic Protection
An initial distinction has to be drawn between

- The responsibility arisingn in the context of direct state to state wrongdoing

- The responsibility arising in the context of diplomatic protection (injury to foreign
nationals or their property)

Direct state to state –

The only issue in this direct state to state cases is whether conduct attributable to a
state is a breach of international law and caused legal harm to another state. If so
responsibility is prima facie engaged.

Diplomatic Protection –

The question of admissibility of injury to foreign nationals or their property can be raised
before international tribunals.

Elettronica Sicula SpA (ELSI) case 1989

Where ther US sought to base its action on breach of a bilateral treaty the international
court stated that its claim was in the nature of diplomatic protection of a national and
was thus subject to such requirements as the exhaustion of local remedies.

The national of a state has the right under the international law to extend diplomatic
protection over its nationals or corporation present in a foreign country. (right of
diplomatic of nationals abroad)

Mavrommatis Palestine Concessions case 1921

“it is true that the dispute was at first between a private person and a state,
subsequently, the Greek government took up the case. The dispute entered into the
domain of internationals law and became dispute between two states.”

The world court established the principle of right of diplomatic protection of nationals
abroad
“it is elementary principle of international law that a state is entitled to protect its
subjects, when injured by acts contrary to international law committed by another state,
from whom they have been unable to obtain satisfaction through the ordinary channels”.

By taking up the case of one of its subjects an by resorting to diplomatic action/judicial

proceedings on his behalf.

In reality a state is asserting its own rights to ensure that the person, its subject is
respected for the rules of international law.

Ahmadou Sadio Diallo case 2007 –

The ICJ observed that the scope ratone materiae of diplomatic protection originally
limited to alleged violations of the minimum standard of treatment of aliens has
subsequently widened to include inter alia internationally guaranteed human rights.

The International Law Commisions adopted the Draft Articles on

Diplomatic Protection in 2006

Art 1 provides for the purpose of the draft articles

“diplomatic protectin consists of the invocation by a state through diplomatic action

orother means of peaceful settlement of the responsibility of another state for an injury
caused by an internationally wrongful act of that state to a natural or legal person that is
a national of the former state with a view to the implementation of such responsibility.”

Diplomatic protection includes in a broader sense, consular, action, negotiation,

mediation, judicial, and arbitral proceedings, reprisals, retorsion, severance of
diplomatic relations, and economic pressures.

Such diplomatic protection is not a right of the national concerned but a right of the state
whihch it may or may not choose to exercise – Interhandel case 1959.
Admissibility of claims

Article 44 of the Articles of State Responsibilities, two requirements need to be statisfied

before a case is admissible to an international court or tribunal

● Nationality of claims

● Exhausation of local remedies

Nationality of claims

A claim against another sate will fail unless it can be proved that the injured individual is
a national of the claimant state. It is well established in customary international law.

Panevezys- saldutiskis case 1939

“In the absence of a special agreement, it is the bond of nationality between the state
and the individual wich alone confers upon the state the right of diplomatic protection
and it is part of the function of diplomatic protection that the right to take up a claim and
to ensure respect for the rules of international law must be envisaged.”

Nationality of Natural Legal persons (individuals)

A state can extend its protection to a natural person only when that person is its
national. Nationality is a term used to denote the legal connection between an idividual
and a state.

Nottebohm case 1955

- Nottebohm is a German, went to Guatemala where he resided and conducted his

business and life untill 9423. 1939 visited and applied naturalisation from
Liechtenstein and went back to Guatemala.
- Guatemala expelled and seized the property of Nottebohm. Liechtenstein
instituted proceedings against Guatemela.
- Guatemela argues that Liechtenstein cold not extend diplomatic protection to
Nottebohm.
 - ICJ obeserved that according to state practice, nationality was a legal bond
between the person and the state granting nationallity and the recognition that
the person was more closely connected with Guatemala state than with
Liechtenstein. Therefore, Liechtenstein was not entitled to extend its protection to
Nottebohm and its claim wasinadmissible.
- In this case the world court appears to refer to close connection or genuine link
between that individual and the state for the right of diplomatic protection
- This case been subject to criticism, The International Law Commision in its Draft
Articles on Diplomatic Protection 2006 did not require establishment of a genuine
link as a requirement of nationality. And argues that the Nottebohm case should
be limited to its facts alone.

Article 4 in respect of the Draft Articles in provided

“for the purposes of the diplomatic protection of a natural person, a state of nationality
means a state whos nationality that person has acquired in accordance with the law of
tehat state by birth, descent, naturalisation, succession of states or in any other manner,
not inconsistent with international law”.

The ILC (International Law Commission) emphasis on the continuous nationality of

the natural person and according to Art 5 the nationality must exist at the date of the
injury and should continue until at least the date of the official presentation fo the claim.
In case of dual or multiple nationality

The ILC makes a distinction between

- Dual or multiple nationality and claim against a third state

- Dual or multiple nationality and claim against a state of nationality

Dual or multiple nationality and claim against a third state

- Any state which he is a national may exercise diplomatic protection in respect of

that national against a third state and there appears no need to establish a
genuine link between the state of nationality and the dual or multiple national.
(ILC Draft Art on Diplomatic Protection 2006 – Art 6(1)

Dual or multiple nationality and claim against a state of nationality

- The rule appears to be that the state with which the natural person has the more
effective or dominant connection has the right to exercise diplomatic protection.

Merge Claim 1955 (Concialiation Commission Italy – US)

The principle of effective in the sense of dominant, nationality, has both been accepted
by the Hague Convention and by the ICJ and the Nottebohm decision

In order to establish the prevalence of the united states nationality in individual cases,
habitual residence can be one of the criteria of evaluation but not the only one. The
conduct of the individual in his economi, social, political, civic and family life as well as
the closer and more effective bond with one of the two states must also be considered.

In its opinion, the Concialiation Commission held that the principle of effective
nationality and the concept of dominant nationality were simply two sides of the same
coin.

In this regard, Art 7 of the International Law Commission Draft Articles on Diplomatice
Protection 2006 provides that: -

“A state of nationality may not exercise diplomatic protection in respect of a person

against a state of which that person is also a national unless the nationality of the
former state is predominant, both at the date of injury and the date of the official
presentation of the claim”.

The ILC in Art 7 used the term predominant to describe the required link because it
conveys the element of relativity and indicates that the individual has stronger ties with
one state rather than another.

A tribunal considering this question is required to balance the strengths of competing

nationalities and the essence of this exercise is more accurately captured by the term
predominant when applied to nationality than either effective or dominant.
Nationality of Artificial legal Persons (corporations)

Barcelona Traction, Light and Power Co case 1970

- The company established in Canada under Canadian law to develop electricity

supplies in Spain
- 1948 Spanish court declared it as bankrupt and other stepts to further injur the
company were taken by Spanish authorities.
- Canada intervened on behalf of the company but later withdrew.
- Belgium brought this claim in respect of the injury to its nationals who were
shareholders. (88% of the company shares owned by Belgian nationals)
- Spain objected that the injury was to the company not to the shareholders. Thus,
Belgium has no right to bring the claim

The court rejected Belgian claim on the ground that it did not have a legal interest in the
matter. Although shareholders may suffer the wrong done to the company. It is only the
rights of the latter that have been infringed and thus entitle it to institute action.

If the direct rights of the shareholders were affected, such as, regards to dividens, then
they would have an independent right of action. Otherwise only if the company legally
cease to exist. (the concept and structure of limited liability of a company – so long the
company exist the shareholders has no right to the corporate assests)

The court also denied the existence under customary international law of an inherent
right for the national state of shareholders in a foreign company to exercise diplomatic
protection.

However, the majority of the courts through cases (beside Barcelona Traction case)
agree and accepted on existence of a right to protect shareholders in the two cases

- When the company is no longer in legal existence

- Where the state in which the company is incorporated, although theoractically the
legal protector of the company, it self causes injury to the company.
In respect of determining the state of nationality of a corporation

Art 9 of the International Law Commission Draft Article on Diplomatic Protection

2006

“For the purpose of the diplomatic protection of a corporation, the state of nationality
means the state under whose law the corporation was incorporated. However, when the
corporation is controlled by nationals of another state or states and has no substantial
business activities in the state of incorporation and the seat of management and the
financial control of the corporation are both located in another state, that state shall be
regarded as the state of nationality”.

In respect whether the national state of the shareholder can extend diplomatic
protection.

Art 11 of the International Law Commission Draft Article on Diplomatic Protection

2006

A state of nationality of shareholders in a corporation shall not be entitled to exercise

diplomatic protection in respect of such shareholders in the case of an injury to the
corporation unless:

- The corporation has ceased to exist according to the law of the state of
incorporation for a reason unrelated to the injury
- The corporation had at the date of injury and incorporation in that state was
required by it as precondition for doing business there.
Exhausation of Local Remedies

It is an established rule of customary international law that an injured natural or legal

person must exhaust remedies in that state which committed the internationally
wrongful act, before its national state can bring an international claim on its behalf.

Meaning of Local Remedies

Art 14 of the International Law Commission Draft Article on Diplomatic Protection 2006.
– legal remedies which are open to an injured person before the judicial or
administrative courts or bodies, wheter ordinary or special, of the state alleged to be
responsible for causing the injury.

General Rule

Ambatielos arbitration 1956

- Ambatielos (Greek) a ship owner, contracted with British to buy some ships later
claim against the British for breach of contract
- During the trial in English High Court, the claimant failed to call a material witness
and lost the claim. Appeal in COA, dismissed on the same ground.
- Greece subsequently made a claim on his behalf, the commission of arbitration
held that the Ambatielos failed to exhaust local remedies because he had failed
to call a vital witness subsequently failed to appeal in local courts to the apex
level (HOL).

Exception to the Local Remedies Rule – Art 44(b) “only those local remedies that are
available and effective have to be exhausted”.
Obvious Futility Test – if local remedies are obviously futile.

Finnish Ship Owners arbitration 1934 –

Finnish ship owners claimed lost ships used by British during war, submitted the case to
the Admiralty Arbitration Board in United Kingdom, the board found there is no need to
be pay compensation to Finland as the Ships were requisitioned by Rusia who has
sovereignty over Finland at that time.

Finnland did not appeal and brought the matter before the International Arbitration
Tribunal. The UK objected on the basis, the local remedies is not exhausted. The
Tribunal rejected the objection and held that the failure of Finnland to appeal to COA not
mean that it had not exhausted local remedies, for reasons that such appeal could not
have reversed the board’s findings of fact, the appeal only could consider question of
law. (Futile)

Lack of Independent Judiciary – Local remedies do not need to be exhausted

when it is clear from the outset that the local courts will not provide redress for the
injured individual.

Robert E Brown Case 1923

The Tribunal held that the local remedies rule did not apply because it found that all
three branches of the Government of the South African Republic Conspired to ruin the
claimant’s enterprise. The judiciary of the state in state of submission and to be brought
in line to determined policy of the Executive.

Other Exceptions

- Does not have adequate system of judicial protection

- No availabel remedies which should have been pursues
- If available remedies are in practice shown to be ineffective in relation to the
matter
- If appeal to higher municipal authority would have no effect
Burden of Proof

It is for the state claiming that local remedies have not been exhausted to demonstrate
that such remedies exist and if they are shown to exist it is for the opposing party to
show that they were exhausted or were inadequate.

Waiver of Local Remedies Rule (treaty)

Parties to a treaty can therein agree that the local remedies rule shall not apply to claim
based on alleged breaches of that treaty.

Defences.
State practice and international decisions as codified in the international law
commission’s articles on state responsibility provide for six main such circumstances,
each of which can be a shield against an otherwise well founded claim for breach of an
international obligation
i) Consent
ii) Self defence
iii) Countermeasures
iv) Force majeure
v) Distress
vi) Necessity

Consent (Art 20)

“Valid consent by a state to the commission of a given act by another state precludes
the wrongfulness of that act in relation to the former state to the extent that the act
remains within the limits of that consent”.
Consent to carry out activities that would otherwise be prohibited by international law
renders those activities lawful.
In order to preclude wrongfulness, consent must be valid. The person given the consent
must be authorised to do so and the consent must be freely given.
Self defence (Art 21)
“the wrongfulness of an act of a state is precluded if that act constitutes a lawful
measure of self defence in conformity with the Charter of the United Nations”.
Art 51 of the Charter preserves a state’s inherent right to self defence in the face of
armed attack.

Countermeasures (Art 22)

Countermeasures taken by a state in response to an internationally wrongful act of
another state are not wrongful acts, but are recognised as valid means of self help as
long as certain conditions are respected. – Gabcikovo Nagymaros Project Case 1997.

Force majeure (Art 23(1))

The occurrence of an irresistible force or of an unforeseeable event, beyond the control
of the state, making immaterially impossible in the circumstances to perform the
obligation.
Rainbow Case 1990 – the test for applying the doctrine of force majeure was one of
absolute and material impossibility, whereas a circumstance rendering performance of
the obligation more difficult or burdensome did not constitute such a circumstance
precluding wrongfulness.
Libyan Arab Foreign Investment Co v Republic of Burundi – the arbitral tribunal rejected
a plea of force majeure because the alleged impossibility not the result of an irresistible
force or unforeseen external event beyond the control of Burundi, in fact the
impossibility is the result of a unilateral decision of that state.

Distress (Art 24(1))

Situation where “the author of the otherwise wrongful act has no other reasonable way,
in a situation of distress, of saving the author’s life or the lives of other persons
entrusted to the author’s care”.
Necessity (Art 25(1))
As the condition where an otherwise unlawful act is performed and such act
- Is the only means for the state to safeguard an essential interest against a grave
and imminent peril
- Does not seriously impair an essential interest of the state or states towards
which the obligation exists or of the international community as a whole.
The International Law Commission on the nature of the plea of necessity 2001
“The plea of necessary is exceptional in a number of respects, it arises where there is
an irreconcilable conflict, between an essential interest on the one hand and a
obligation of a state invoking necessity on the other.
These special features mean that necessity will only rarely available to excuse non
performance of an obligation and that it is subject to strict limitations to safeguard
against possible abuse”

Torrey Canyon 1967 - a Liberian Oil Tanker were aground on the British high seas. To
prevent further damage to the British and French coast and the pollution of the marine
environment the British bombed the Oil Tanker.
Invoked the doctrine of necessity as a defence, no state protested.

Gabcikovo Nagymaros Project Case 1989 – Hungary declared it had suspended the
treaty obligation towards Slovakia due to a state of ecological necessity, Slovakia
protested.
The court rejected Hungary’s claim of necessity, stated that state of necessity can only
be accepted on an exceptional basis, the peril invoked by Hungary were not sufficiently
established as imminent.
Also stated that Hungary has the means to responding to these perceived perils other
than the suspension and abandonment of works with which it had been entrusted.

Defences must not conflict with Jus Cogens

It is important to take note that none of the above circumstances precluding
wrongfulness can be relied on if to do so would conflict with a peremptory norm of
general international law (jus cogens).
Legal Consequences of an internationally wrongful act
REPARATION (restitution & compensation)

The state responsible for the internationally wrongful act is under an obligation to cease
that act, if it continuing and to offer appropriate assurance and guarantees of non-
repetition if circumstances require. (Art 28)
The responsible state is under an obligation to make full reparation for the injury caused
by the internationally wrongful act (Art 31)

Factory at Chorzow case (1928) – specified the content of the obligation of reparation
“Reparation must as far as possible, wipe out all the consequences of the illegal act and
re establish the situation which would, in all probability, have existed if that act had not
been committed.
Restitution in kind or if this is not possible, payment of a sum corresponding to the value
which a restitution in kind would bear, the award, if need be, of damage for loss
sustained – such are the principles which should serve to determine the amount of
compensation due for an act contrary to international law”.

Forms of Reparation
Art 31 – “full reparation for the injury caused by the internationally wrongful act shall
take the from of restitution compensation and satisfaction, either slightly or in
combination”.
Factory at Chorzow case 1928
The court considered two forms of reparation: restitution and compensation. In certain
cases, satisfaction may be necessary as an additional form of reparation. Therefore,
wiping out all the consequences of the wrongful act may require some or all forms of
reparation to be provided.
Restitution (Art 35) – to re establish the situation which existed before the wrongful
was committed, provided and to the extent that restitution
- Is not materially impossible
- Does not involve a burden out of all proportion to the benefit deriving from
restitution instead of compensation.
Art 35 adopts a narrower definition of restitution that consists in re establishing the
‘status quo ante’, the situation that existed before the wrongful act occurred.
Restitution in this narrow sense may of course have to be completed by compensation
in order to ensure full reparation for the damage caused. (ILC Commentary 2001)
Restitution may take the form of material restoration (return of territory, person or
property) or the reversal of some juridical act
Material restitution = restitution in kind

Compensation – the most commonly sought in international practice.

I’m Alone case 1935 – the commissioners recommended US pays US 25 000 as a
material amend in respect the wrong of sinking the I’m Alone.

Satisfaction (Art 37) – may consist in an acknowledgement of the breach an

expression of regret a formal apology or other appropriate modality.
Satisfaction is a further remedy which is particularly appropriate in cases where there is
moral or non-material damage.
The Treatment of Foreign Nationals
A state has no general obligation to admit foreigners or foreign companies toits territory.
However, once foreign nationals or companies are present in its territory, the state is
under an international obligation not to ill treat them.

National Treatment or International minimum standard.

Whether or not a state is internationally responsible for the way its treats foreign
nationals depend on the standard or treatment which international law obliges that the
state to adopt.
It is only if the state is falls below this standard that it becomes internationally
responsible.
There are two contrary views in this respect:

● National treatment

● International minimum standard

National treatment –
View that foreign nationals cannot claim higher standards available in their countries
and that the state is not responsible if it accords foreign nationals a standard of
treatment which is not less that its own nationals.
Even though that standard may be much lower compared to international standard. It is
developed by the Latin American countries as way of preventing interference in their
affairs by more powerful states.
Now its favoured by developing states for similar reasons and it allows them to design
their own economic and social system.
The national standard would, allow the state to impose severe criminal penalties on
foreigners if its own nationals were subject to the same penalties (whipping, death rope)
International Minimum Standard.
Every state must treat foreign nationals within its territory by reference to a minimum
international standard, irrespective of how national law allows that state to treat its own
nationals. Developed world championed this doctrine, supported by many tribunals and
claim commissions.

Neer Claim 1926 –

“propriety of government acts should be put to the test of international standards, the
treatment of an alien, in order to constitute an international delinquency, should amount
to an outrage, to bad faith, to wilful neglect of duty or to an insufficiency of governmental
action so far short of international standards that every reasonable and impartial man
would readily recognise its insufficiency.

What is the correct standard to be followed?

There is no consensus of standard of obligatory under customary international law.
However, with globalisation, more and more countries are ready to support the
international minimum standard. Further, great majority of arbitration awards are in
support of the international minimum standard (Neer Claim).

Examples of International minimum Standard

● Duty not to harm

– the state and its organs have the legal obligation to refrain from harming foreign
nationals

● Not to mistreat in lawful custody

– In Roberts Claim the claim commission found that although Robert had been
lawfully detained accordingly to local Mexican criminal law, his treatment in prison
and the length of detention were unreasonable and below the ordinary standards of
civilisation.

● Denial of Justice
 – Harvard Research Draft provides “a state is responsible if an injury to an alien
results a denial of justice”.
Denial of justice occurs when there is a denial, unwarranted delay or obstruction of
access to courts, gross deficiency in the administration of judicial or remedial
process, failure to provide those guarantees which are generally considered
indispensable to the proper administration of justice.
An error of national court which does not produce manifest injustice is not a denial of
justice.
Foreign nationals are entitled to full access to the courts and to a basic standard of
fair treatment

Chattin Claim 1927 – Mexico, held responsible for absence of proper

investigation, undue delay of proceedings and international severity of punishment.

Expropriation of Foreign Property

“A taking of foreign property or investments by the host state”.
Expropriation without compensation regarded as unlawful, the taking is sometimes
described as confiscation.
Expropriation of one or more major national resources as part of general programme of
social or economic reform is generally referred to as nationalization.
Expropriation could take different form, it could be direct where an investment is directly
expropriated through formal transfer of title or outright physical seizure.
Expropriation or deprivation of property could also occur through interference by a state
in the use of that property or with the enjoyment of the benefits even where the property
is not seized and the legal title to the property is not affected.
The measures taken by the state have a similar effect to expropriation
- Indirect
- Creeping
- De facto
- Measures tantamount to expropriation.

Indirect, creeping, de facto expropriation, can take many forms

 - Forced sales or property
- Exercising management control over the investment
- Administrative decisions (cancel licenses and permits that necessary for the
foreign business)
- Exorbitant taxation

Starrett Housing Corp v Iran 1983

An American company entered contract with Iranian Development Bank to develop an
housing land project.
The project was proceeding on schedule until the harassment of revolution of Iran
occurred in 1979, force most of the American in Iran were withdraw from Iran. And
various government interventions
- Force the company to forgo their contractual due payments
- Freezing the companies bank account
- Announce decree to appoint a temporary manager to govern the company
All this cause the project to fall behind, and suffer losses.
The company sought compensation for the expropriation of their property rights in the
project and in the company. The tribunal held that, measures by the Iranian government
are amount to expropriation
“It is recognised by international law that measure taken by a state can interfere with
property rights to such an extent that these rights are rendered so useless that they
must be deemed to have been expropriated, even though the state does not purport to
have expropriated them and the legal title to the property formally remains with the
original owner”.

However, it is an accepted principle of international law that a state is not liable for
economic injury which is a consequence of bona fide regulation within the accepted
police power of a state.

Economic measures considered as bona fides are

- Non confiscatory taxation
- Exchange control regulation
- Currency revaluation

Legal requirements of Lawful expropriation

Opposing views of capitalist developed states, the socialist state and developing state.
Develop state maintained that expropriation was only legitimate if it complied with an
international minimum standard set by international law, the developing stats denied
this.

GA. R 1803 – Resolution on Permanent Sovereignty over Natural Resources 1962

The two requirements of a lawful expropriation

- Public purpose
- Compensation
The resolution requires appropriate compensation in accordance with the rules in force
in the state taking such measures and in accordance with the international law.
GA. R 3281 – Charter of Economic Rights and Duties of States 1974
The resolution acknowledged that appropriate compensation should be pain, but what is
appropriate is to be determined by the law of the expropriation state, does not mention
about public purpose. This GA. R favours the developing state.

It is difficult to determine the requirement for a lawful expropriation, the proposed

requirements are
- Public purpose
- Non discrimination
- Compensation

Public purpose – resolution 1803 does not mention about public purpose but arbitral
decisions have supported this approach to be declared as lawful expropriation.
- Amoco Case
- Aminoil Case
- BP Case

Non-Discrimination – it was one of the grounds on which the arbitrators found the
expropriation to be unlawful in BP, Liamco, Aramco, and Amoco cases.
Compensation – Both developed and developing countries agreed on compensation is
an essential requirement of lawful expropriation.
They disagree on the extend and the form of compensation.
Hull Formula – adequate, effective and prompt compensation regarded by those states
as the international minimum standard for compensation.
The 1974 Charter – generally taken to present the views of the developing states, takes
a very different approach on compensation from that in the Hull formula.
Compensation is to be determined by the law of the expropriating state and therefore
compensation is likely to be low.
Tribunals generally follows the rule in 1962 GA. R 1803 – appropriate compensation in
accordance with the rules in force in the state taking such measures and in accordance
with the international law. Which is regarded as reflecting on customary international
law.
There also appears to have flexibility in the interpretation of what is meant by
appropriate compensation.
In Amoco case – the compensation for a lawful expropriation should be just, which
meant the value of the expropriated property as a going concern.

Reparation for an unlawful expropriation – the remedy is restitutio in integrum

(restitution in kind) or if impossible its monetary equivalent restitution will seldom be
possible where an enterprise is expropriated.

Countermeasures
The ILC defined, countermeasures as non-forcible measures taken by an injured state
in response to a breach of international law in order to secure the end of the breach and
if necessary, reparation.
Countermeasures may only be taken in response to an international wrongful act and
only against the State in response to an international wrongful act and only against the
state responsible for that act.
Countermeasures are not punishment. According ILC countermeasures limited to the
temporary non performance of one or some of the international obligation of the injured
state owed to the responsible state.
The primary examples of countermeasures

● The suspension or temporary non performance of a treaty obligation,

 ● The suspension of a trade agreement

● The freezing of the assets of a state

Air Service Arbitration

The tribunal found that the US retaliatory measures were permissible, which were not
disproportionate to the violative action taken by France.
“if a situation arises, which in one state’s view, results in the violation of an international
obligation by another state, the first state is entitled, within the limits set by general rules
of international law pertaining to the use of armed force, to affirm its rights through
countermeasures”.
There are limitations in taking countermeasures that accepted in the practise of states
and international decisions to prevent abusing the use of countermeasures.

- Countermeasures must be directed at the wrongdoer state only and with the
objective of compelling it to cease the wrongful act or to make reparation for it.
- Shall not involve the use of armed force
- Shall not violate basic obligation under the international law (humanitarian law/jus
cogens)
- Shall not affect any disputes settlement procedure between two parties and
inviolability of diplomatic agents.
- Principle of proportionality must be complied with. (must be commensurate with
the injury suffered.

Procedural condition to resort to countermeasures

● An injured state is required to call on the responsible state to comply with its
obligations
● injured state need notify the responsible state that it intends to take
countermeasures and to offer to negotiate with that state.
If the responsible state have ceased the internationally wrongful act and the dispute
state has ceased the internationally wrongful act and the dispute settlement procedures
before a competent court or tribunal, countermeasures may not bee taken, if taken need
to suspended it.