magnify
Home Articles posted by Diane Desierto

The Quandaries of Data Analysis and Methodologies in Rule of Law, Development, and Human Rights Assessments: New Challenges for UN Special Rapporteurs

Published on July 20, 2018        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

If Professor Hans Rosling’s famous last opus, Factfulness (April 2018)is to be believed (as well as Bill Gates’ effusive review here), we all tend to have grimmer views of the state of economic development in the world than actually borne out by reality – especially on issues of global health and poverty.  Referring to the “developed world” and the “developing world” is a meaningless and unhelpful binary that glosses over significant welfare, health, life expectancy, education, and human capabilities differences between and among the hugely diverse “middle income countries” (e.g. the World Bank divides them into “lower middle-income economies – those with a GNI per capita between $1,006 and $3,955;  and upper middle-income economies –  those with a GNI per capita between $3,956 and $12,235 (2018)). Even the World Bank stopped using the distinction between “developing” and “developed” countries starting with its 2016 World Development Indicators, ultimately concurring with the view that the “developing country” and “developed country” distinction was not useful and too broad for targeting international development programs for partner countries, especially when assessing progress in all 17 of the Sustainable Development Goals (SDGs). The United Nations does not have a formal definition of “developed countries” versus “developing countries”, instead insisting that its classifications in UN methodology are “for statistical convenience and does not express a judgement about the stage reached by a particular country or area in the development process”.  However, these categories are widely used in the UN system anyway, including in the UN’s 2017 Sustainable Development Goals Report as well as in the datasets used for the 2018 SDG16 Data Initiative Global Report (on the goal of achieving peaceful, just, and inclusive societies). If the distinction between “developing country” and “developed country” is operationally meaningless for formulating and evaluating development programming, shouldn’t international lawyers and scholars also take note of the imprecision of this category when putting forward their observations and assessments of the state of rule of law, economic development, poverty, and human rights in the world?  (Note:  I do plead guilty to having, in previous works, alluded to the same classifications.)

Professor Rosling’s opus came to mind recently after the debate spurred from recent sharp criticisms issued by US Ambassador Nikki Haley and by experts from the Heritage Foundation, against UN Special Rapporteur for Extreme Poverty and Human Rights and NYU Law Professor Philip Alston, who had issued several statements (see here, here, and here) and his full 4 May 2018 report on the state of poverty within the United States (finding, among others, that 40 million people across the United States live in poverty, while 18.5 million live in extreme poverty, and an additional 5 million in conditions of absolute poverty; or alternatively put, “1 in 8 Americans now live in poverty, with half of this population living in extreme poverty, according to U.S. government estimates.”).  While Ambassador Haley alleged that the report “categorically misstated the progress the United States has made in addressing poverty and purposely used misleading facts and figures in its biased reporting”, the Heritage Foundation challenged the income-based poverty measures used by Professor Alston and charged that “these “official” income figures exclude substantial off-the-books earnings among low-income households and omit roughly 95 percent of the $1.1 trillion U.S. taxpayers provide in means-tested cash, food, housing, and medical benefits for low-income persons each year.”  Professor Alston has criticized the United States’ withdrawal from the UN Human Rights Council, and charged that the Trump Administration was exacerbating poverty for millions of Americans.  The Special Rapporteur has not yet responded to the challenges against the data sources used, and the quantitative and qualitative methodologies used for this fact-finding mission and its conclusions.

When I examined the index of currently publicly available Reports of the Special Rapporteur for Extreme Poverty and Human Rights, it was somewhat surprising that there was no separate initial report on the quantitative or qualitative methodologies adopted for the country assessments on the state of extreme poverty and human rights (although each country assessment thus far discusses observations from anecdotal evidence, official statistics from government sources, and other sources).  Considering the very difficult remit of Professor Alston – who as Rapporteur is an unpaid expert and admittedly not an official of the United Nations – I wondered why it did not appear from the reports that the UN’s considerable resources on SDG monitoring and assessment (especially SDG1 on eradicating poverty), as well as on economic vulnerability and risk monitoring, had been deployed and allocated to assist in the Special Rapporteur’s challenging fact-finding mandate.  Note that Professor Alston has himself championed interdisciplinarity and cross-verification in human rights fact-finding and yet, the UN remains unable to reasonably coordinate its resources, data, and interdisciplinary expertise before it dispatches its unpaid experts for overwhelmingly difficult fact-finding missions as “Special Rapporteurs”. Read the rest of this entry…

 

Visions of the ‘Right to Democratic Governance’ under International Law: The Complexities of the Philippines under Duterte

Published on May 24, 2018        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

Is international law any closer to defining the content of a “right to democratic governance”? International human rights law instruments do not prescribe a form of governance, but they do explicitly refer to consistency with the needs of a “democratic society” when they admit limitations or restrictions to certain rights and freedoms.  Thus, the Universal Declaration of Human Rights refers to limitations to rights and freedoms determined by law and which meet “the just requirements of morality, public order and the general welfare in a democratic society.” (UDHR, Article 29(2). The International Covenant on Civil and Political Rights (ICCPR) enumerates specific civil and political rights and freedoms, but only refers to the needs of a “democratic society” when it speaks of permissible restrictions on press and public participation in court hearings [ICCPR Article 14(1)], restrictions to the right to peaceable assembly [ICCPR Article 21], and restrictions to the right to freedom of association [ICCPR Article 22(2)].  The general limitations clause in Article 4 of the International Covenant on Economic, Social, and Cultural Rights (ICESCR) refers to “such limitations as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society.”  The United Nations paints a broad brush on democracy as the enabling environment for the realization of human rights:

“Democracy, based on the rule of law, is ultimately a means to achieve international peace and security, economic and social progress and development, and respect for human rights – the three pillars of the United Nations mission as set forth in the Charter of the UN. Democratic principles are woven throughout the normative fabric of the United Nations….The UN has long advocated a concept of democracy that is holistic: encompassing the procedural and the substantive; formal institutions and informal processes; majorities and minorities; men and women; governments and civil society; the political and the economic; at the national and the local levels. It has been recognized as well that, while these norms and standards are both universal and essential to democracy, there is no one model: General Assembly resolution 62/7 posits that “while democracies share common features, there is no single model of democracy” and that “democracy does not belong to any country or region”. Indeed, the ideal of democracy is rooted in philosophies and traditions from many parts of the world. The Organization has never sought to export or promote any particular national or regional model of democracy.” (UN Guidance Note of the Secretary-General on Democracy, at p. 2).

There is no shortage of international legal scholarship examining different facets of “democracy”, whether as a separate right of individuals or peoples under international human rights law, or as an emerging norm of governance under international law.  Thomas Franck wrote in 1992 about the “emerging right to democratic governance” under international law, anchored on the notions of “democratic entitlement” and a “separate and equal status in the community of nations” – all traceable to the fundamental human right to self-determination.  In the same year, Gregory Fox also published a landmark article with the Yale Journal of International Law, this time on the specific right to political participation in international law, based on the ICCPR, the European Convention on Human Rights, the American Convention on Human Rights, and the African Charter on Human and Peoples’ Rights. A year later, James Crawford argued that a “pro-democratic” shift was taking place in international law, in a much-cited article in the British Yearbook of International Law.  Susan Marks later developed the concept of an emerging international law norm of “democratic governance” in her landmark book The Riddle of All Constitutions:  International Law, Democracy, and the Critique of Ideology (OUP, 2003). Jean D’Aspremont’s 2011 EJIL Article observed that certain global events – such as the rise of non-democratic regimes – could be “cutting short the consolidation of the principle of democratic legitimacy under international law.”  But even among these scholars (and many others, see here, here, here, and here), there is no hard consensus on the elements of the “right to democratic governance”. After Stanford’s Larry Diamond originated the idea of the “global democratic recession” some years ago, the Economist’s Intelligence Unit (EIU) developed its “Democracy Index” which measures the state of democratic freedoms in countries around the world according to five categories: 1) electoral process and pluralism; 2) civil liberties; 3) the functioning of government; 4) political participation; and 5) political culture.  

The Philippines presents an interesting case study on today’s many scholarly contestations over the “right to democratic governance” under international law (see among others Susan Marks’ 2011 EJIL article here, Ignacio del Moral’s ESIL essay, Johannes Fahner’s 2017  positivist argument for the existence of the right to democracy here).  As of 2017, the Philippines is ranked 51st among the world’s democracies in the 2017 Democracy Index as a “flawed democracy”, expressly finding that “the indefinite declaration of martial law in the southern state of Mindanao in the Philippines, and the rule of country’s strongman leader, Rodrigo Duterte, adversely affected the quality of democracy in the Philippines.  Mr. Duterte has led the way among the many Asian countries that are infringing democratic values.” (2017 Democracy Index, at p. 28). While the Philippines ranks in the highest percentiles when it comes to the electoral process and pluralism category, it ranked very dismally in the categories of the functioning of government and political culture, and only in moderate percentiles in the categories of political participation and civil liberties.  It is a jurisdiction that is unique for having repeatedly and consistently transformed the UDHR into a legally binding and directly actionable set of rights under Philippine law (see landmark Philippine Supreme Court decisions here, here, here, here, here, among others), and yet it finds itself today seriously contesting visions of “democratic governance” between Mr. Duterte’s asserted “rule of law” and the myriad of civil and political liberties issues raised by local critics (see for example here, here, and here), as well as abroad (such as the 2018 US State Department Country Report on Human Rights in the Philippines, the 2017 Report of the Working Group on the Universal Periodic Review for the Philippines, the 2018 chapter on the Philippines in Human Rights Watch’s World Report, among others).  The irony is, both the Philippine government and its critics claim to act according to a “right to democratic governance”, even if both parties may have different visions of what democratic governance is.

Read the rest of this entry…

 

Protean ‘National Security’ in Global Trade Wars, Investment Walls, and Regulatory Controls: Can ‘National Security’ Ever Be Unreviewable in International Economic Law?

Published on April 2, 2018        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

National security seems to be the protean norm du jour in international economic law these days.  On 23 March 2018, the United States’ Trump Administration imposed a 25% tariff against around US$60 billion of imports from China, 15 days after the United States imposed tariffs on imports of steel and aluminum (25% on steel imports, and 10% on aluminum imports) from around the world.  US President Trump accused China of “economic aggression”, and is leaving the door open for negotiations with all States to force them to take measures to eliminate the United States’ “$800 billion trade deficit with the world”.  Chinese President (for life) Xi Jinping’s administration subsequently announced preliminary retaliatory tariffs against over $3 Billion in American products such as apples, steel, and pork, even as US Treasury Secretary Steve Mnuchin stated that the tariff wars are part of the United States’ negotiation strategy with China. (Both sides are reported to be quietly negotiating, even amid the climate of mutually announced tariffs. China has started making concessions, such as relaxing its foreign investment rules and expanding imports of US semiconductors.)  Even as World Trade Organization (WTO) Director General Roberto Azevedo cautioned against the impact of such a trade war on the global economy, the WTO did not deny that under GATT Article XXI(b)(iii) (Security Exceptions), the United States could take “any action which it considers necessary for the protection of its essential security interests…taken in time of war or other emergency in international relations.”  President Trump’s two presidential proclamations declaring tariffs against aluminum imports and steel imports heavily refer to the impairment of the United States’ national security interests as the basis for imposing tariffs.  The United States provisionally exempted NAFTA partners Canada and Mexico from the steel and aluminum tariffs, using the bludgeoning effect of threatened tariffs in the pending NAFTA renegotiations.  Last weekend, South Korea acceded to the United States’ demands to revise their KORUS Free Trade Agreement, which US President Trump is now tying to the outcome of its forthcoming summit with Kim Jong Un of North Korea. Trade is now more deliberately leveraged as a national security issue.

Significantly, no State in the international community seriously challenges that the security exception in GATT Article XXI is a self-judged matter that takes a governmental measure out of the ambit of WTO law. (Qatar’s pending complaint against the United Arab Emirates (UAE) at the World Trade Organization – previously featured here – seeks review of any Member’s assertion of national security under GATT Article XXI, but it appears other Members such as the United States have taken the opposing view that “national security issues are political and not appropriate for the WTO dispute system.”)  Even the European Union, which threatened tariffs against the United States if it was not exempted from the US tariffs on steel and aluminum (it eventually got the exemption for all EU Members), did not challenge the factual basis behind the United States’ use of the national security justification in its presidential proclamations on tariffs against steel and aluminum imports.  The United States had invoked, as its factual basis for invoking national security, the supposed “weakening of (its) internal economy, leaving the United States almost totally reliant on foreign producers…that is essential for key military and commercial systems”.  Considering that President Trump had just boasted about the tremendous strength and independence of the United States economy at the World Economic Forum in January 2018, it was baffling that the United States made this seeming volte face to invoke GATT Article XXI.  The Trump administration has also invoked the President’s self-judged discretion to decide when national security is impaired in the case of foreign investment into the United States, most recently to block Singaporean company Broadcom’s US$117 billion takeover of Qualcomm, thereby increasing the number of blocked proposed acquisitions of United States businesses (by countries such as Germany, China, and Singapore) on national security grounds. 

And yet, it is not only the United States that has resorted to national security reasons in the past year for retaliatory trade measures, investment restrictions, and other international economic measures.  The European Commission anchors its new proposal to tax digital business activities; the forthcoming implementation of the General Data Protection Regulation (GDPR) (ensuring data privacy and protection rules applicable to all companies processing data of EU nationals, whether located in the EU or elsewhere); as well as the recently opened investigation of the massive data leak from Facebook and Cambridge Analytica, ultimately on the Commission’s many concerns about EU Members’ regional, national, and economic security.  China has set up its own national security review of foreign investments into China, mirrored by Australia’s recently strengthened national security review of foreign investments (China-sourced or otherwise) into critical infrastructure.  India and Sri Lanka have also raised national security concerns over China’s One Belt, One Road (OBOR) program.  Nigeria demurred from joining the recently-launched 44-member African Continental Free Trade Area, citing economic and security implications of the agreement.

Such muscular and frequent assertions of ‘national security’ as justifications for international economic measures does bring to the forefront the timeless debate on whether international courts and tribunals can review a State’s assertion of ‘national security’.  In this post, I maintain my key argument in 2012 that modern international law still does not subscribe to the classical view of ‘national security’ as a Schmittian exception – e.g. one that takes a measure justified by national security outside of the purview of any law – but instead continues to regulate the safety-valve functions of national security or national emergency clauses as exceptions, to the point that the mere assertion of national security cannot completely take out an economic measure from the purview of international economic regulations either.  Whether a State invokes ‘national security’ to impose or threaten measures for bargaining leverage in negotiations or to force reductions of trade deficits; or to impose new economic regulations, review, or restrictions against foreign businesses – the current framework of international law and international economic law has at least developed to the point that there will be some review of a State’s asserted national security justification, even if it is only for international tribunals to preliminarily decide whether they have jurisdiction over the disputes before them.  I refer to dispute settlement under the WTO, foreign investment arbitral tribunals, international investment court proposals such as China’s investment court for OBOR projects and the EU’s multilateral investment court, as well as traditional court adjudication under the International Court of Justice.

Read the rest of this entry…

 

Environmental Damages, Environmental Reparations, and the Right to a Healthy Environment: The ICJ Compensation Judgment in Costa Rica v. Nicaragua and the IACtHR Advisory Opinion on Marine Protection for the Greater Caribbean

Published on February 14, 2018        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

On 2 February 2018, the International Court of Justice issued a landmark judgment on compensation for environmental damages in Certain Activities Carried Out By Nicaragua in the Border Area (Costa Rica v. Nicaragua), Compensation Owed by the Republic of Nicaragua to the Republic of Costa RicaThe ICJ’s decision was followed shortly thereafter on 9 February 2018 by a significant Advisory Opinion of the Inter-American Court of Human Rights (IACtHR), declaring the fundamental importance of the right to a healthy environment to human existence and States’ corollary obligations to protect human rights through marine environmental protection in the Greater Caribbean region (summary report of the Advisory Opinion in English found here, while the full text of Colombia’s request for advisory opinion on this question can be found here). The 2 February 2018 ICJ Compensation Judgment follows its 16 December 2015 Judgment declaring Nicaragua liable for activities in Costa Rican territory, such as the excavation of three caños and establishment of military presence in said territory (see my previous comments on evidentiary approaches in this 2015 Merits Judgment here.)

While both the 2 February 2018 ICJ judgment on compensation and the 9 February 2018 IACtHR Advisory Opinion signify the central importance of international environmental norms to international human rights law, the methodological approaches taken by the World Court and the regional human rights court for Latin America reveal some sharp differences between these tribunals.  In adjudging compensation for environmental damages caused by Nicaragua to Costa Rica, the ICJ took a rather ‘incrementalist’ approach to quantification and empirical proof for every head of damage asserted – a methodologically ambiguous and context-sensitive approach which is not easily replicable for future environmental cases, given the complex nature of environmental damages in any given dispute.  The ICJ did not adopt Costa Rica’s theory of an “ecosystem approach” to damage assessment, and neither did it adopt Nicaragua’s position that “replacement costs” be used to estimate environmental damages.  Unlike the IACtHR Advisory Opinion’s broad acceptance of States’ continuing individual obligations towards preventing transboundary harm that could ensue from infrastructure projects in the Greater Caribbean, the ICJ Judgment carefully reduced Costa Rica’s claim of compensation by delineating between Nicaragua’s compensatory duties as part of environmental reparations, and Costa Rica’s own environmental mitigation duties in the presence of foreseeable environmental damage.  These recent developments suggest that, while it is recognized that all States share responsibilities towards environmental protection especially under the precautionary principle, the precise allocation of environmental reparations owed through compensation will not always lie strictly on the side of the State that is the environmental tortfeasor, at least where the ICJ is concerned.

The following subsections summarize the 2 February 2018 ICJ Judgment reasoning on compensation, the 9 February 2018 IACtHR Advisory Opinion, and conclude with some comments on methodologies used for damages assessment and environmental reparations, especially in the thorny form of lump-sum upfront compensation for environmental damage impacting present and future generations.

Read the rest of this entry…

 

Remaking the World towards ‘Fair and Reciprocal Trade’? The Case for (More) Interdisciplinarity in International Economic Law

Published on November 17, 2017        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

Geopolitical changes were on full display last week at multiple economic summits in Asia, where red carpet pageantry converged with the dramatic publicity of States brokering new deals at the regional meetings for the Asia-Pacific Economic Cooperation (APEC) in Viet Nam, the Association of Southeast Asian Nations (ASEAN) Heads of State Summit and the 12th East Asia Summit (EAS) in the Philippines, the side meetings of the China-led 16-country bloc drafting the Regional Comprehensive Economic Partnership (RCEP), the Japan-led Trans-Pacific Partnership-11 (recently renamed into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership), with considerable focus on United States President Donald Trump’s 12 day tour in Asia for these meetings as well as for bilateral trade talks with Japan, South Korea, and the Philippines.  In Viet Nam, US President Trump suddenly renamed the Asia-Pacific into the “Indo-Pacific”, a deliberate policy strategy to define Asia beyond China’s growing hegemony into a sphere of alliances built with India, Japan, and other Southeast Asian countries.  

The Asia economic summits conveyed the implicit assumption that international trade and investment treaties had to be revised or rewritten towards “fair trade”, even if there were differing understandings of what that fairness meant.  US President Trump’s address at APEC demanded “fair and reciprocal trade” as part of his ‘America First’ policy, blaming trade agreements for serious US trade deficits with China and other countries. Canadian Prime Minister Justin Trudeau delayed agreeing to renew the TPP partnership under the aegis of the CPTPP, pushing for Canadian interests in ensuring strict environmental and labour standards in the agreement, and succeeding in suspending the problematic provisions in the intellectual property chapter which the US had originated in the TPP draft.  Newly-minted New Zealand Prime Minister Jacinta Ardern claimed victory with the suspension of investor-State dispute settlement clauses from the CPTPP, in favour of compulsory domestic court adjudication for any investment disputes.  In contrast, China took up the cudgels for globalisation and the established institutions and processes of the multilateral system, with Chinese President Xi Jinping firmly declaring at APEC that “economic globalisation is an irreversible historical trend…in pursuing economic globalisation, we should make it more open and inclusive, more balanced, more equitable and beneficial to all.”

The recent pronouncements by world leaders should be of considerable interest to international lawyers, given the heightened political and economic expectations placed on international economic agreements (trade and investment treaties), and what social outcomes they should (or should not) produce beyond the traditionally narrow objectives of liberalising foreign market access.  The international economic system is moving towards a multi-speed configuration of States oscillating between competing economic ideologies (e.g. resurgent new forms of “mercantilist protectionism”, revised ‘mainstream’ neoclassical economics, ‘new’ behavioural economics, among others); changing philosophies of government (e.g. the revival of authoritarianism and ‘illiberal’ democracies, leaning away from liberal democracies); evolving theories on the regulation of property, competition, and information given rapidly-developing technologies (e.g. artificial intelligence and the explosion of automation in supply chains, the domestic and transnational social impacts of the digital ‘sharing’ economy, climate change-driven restructuring to consumption patterns and production processes); and expanding understandings of domestic and transnational challenges to global public goods (e.g. environment, health, peace and security, among others).  Accordingly, there is an even greater burden for international lawyers (especially those that assist or advise States drawing up their respective visions for a new global economic architecture), to clarify and be transparent about how the political, economic, and social ends sought will be effectively met through the current and future mechanisms of international economic law and its institutions for governance and coordination.  Beyond the fog of press publicity, are we candidly and accurately communicating to the politicians the actual limits of international economic treaties, along with their potentials?  

In this post, I argue that international lawyers – especially international economic lawyers tasked with drafting, revising, critiquing, and building the new bilateral, regional, and global constellation of economic treaties – increasingly have to deepen interdisciplinarity, and not just in the sense persuasively observed by Tom Ginsburg and Gregory Shaffer as the “empirical turn in international legal scholarship” (106 American Journal of International Law (2012), pp. 1-46. Perhaps more fundamentally, international lawyers need even more interdisciplinarity, because we are at present hard-pressed to approximate, if not achieve, an idea of “fairness” in the international economic system’s treaties and institutions (no matter how contested that sense of “fairness” is, to begin with).  If we accept that the “fairness of international law” is legitimately our concern as international lawyers and scholars (as Thomas Franck famously argued), we should be more open to readily engaging the interdisciplinary assumptions marshalled in the reform and remaking of international economic treaties and institutions today.  

While we may not of course be the experts in these other disciplines, and we should, indeed, preserve the “relative autonomy” of international law (as Jan Klabbers cautions), some sharpening of our interdisciplinary sensibilities can nevertheless be useful in helping us to test the “good faith” nature of any postulation or assertion on the desired weight, form, content, and structure of our international economic treaties and institutions.  I use three examples of unstated assumptions in the debate over international economic treaties today that illustrate where interdisciplinarity is sorely lacking: 1) that international economic treaties can somehow erase trade deficits and permanently prevent trade imbalances; 2) that international economic treaties can anticipate and provide the most appropriate and suitable dispute resolution mechanism for the particular States parties to these treaties – for the entire life of these treaties – which is problematic with the growing depiction of a supposed ‘binary’ choice between investor-State dispute settlement mechanisms (ISDS) and local court adjudication (and/or political risk insurance); and 3) that international economic treaties can be designed to fully create desired social, environmental, labor, health, education, and all public interest outcomes.  I posit that while interdisciplinarity may show us that international economic treaties could be a correlative, if not possibly one of the causal, factors for desired outcomes, and that we can probably design them with sensitivity and vigilance towards controlling the negative externalities they cause and encouraging positive distributive consequences, the international economic treaty-writing (and rewriting) exercise is complex. We cannot – as politicians do – simplistically oversell or lionise these treaties as somehow the definitive “one size-fits all” solution to remake the world towards “fair and reciprocal trade”.

Read the rest of this entry…

 

Reopening Proceedings for Reparations and Abuse of Process at the International Court of Justice

Published on August 16, 2017        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

On 28 July 2017, Nicaragua made the rather surprising announcement that it would revive its claim for US$17 billion in compensation against the United States. To recall, in its 1986 Merits Judgment in Nicaragua v. United States, the International Court of Justice declared that the United States was “under an obligation to make reparation to the Republic of Nicaragua for all injury caused to Nicaragua” arising from “breaches of obligations under customary international law” [Dispositif, para. 292(13)] and for “breaches of the Treaty of Friendship, Commerce and Navigation between the parties…on 21 January 1956” [Dispositif, para. 292 (14)]. The Court further decided that “the form and amount of reparation, failing agreement between the Parties, will be settled by the Court, and reserves for this purpose the subsequent procedure in the case”. [Dispositif, para. 292(15)]. After the Court issued an Order fixing time limits for the filing of pleadings on the matter and form of reparation, Nicaragua thereafter informed the Court in 1991 that it did not wish to continue the proceedings. One would have thought that Nicaragua’s discontinuance of the proceedings somehow ensured the finality of the Court’s Judgment on the Merits and left the matter of reparations to political negotiations between the parties. However, as Nicaragua’s recently stated position appears to suggest, there is no time limit for reviving a judicial determination of the form and amount of reparations claims, even if it does not appear that Nicaragua took any steps to pursue its compensation claim against the United States for over thirty years.  The Court’s recent practice likewise appears to lend support to the view that reparations claims can feasibly reopen ICJ proceedings at any point in time, if the Court does not itself fix a time limit to determine when parties’ negotiations on reparations have failed. In its Order of 1 July 2015, the Court in Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda), the Court observed that since the parties therein had been unable to reach a political settlement since its Judgment of 19 December 2005, it would reopen proceedings as requested by the Democratic Republic of Congo.

Read the rest of this entry…

 

Rising Legal Costs Claimed by States in Investor-State Arbitrations: The Test of ‘Reasonableness’ in Philip Morris v. Australia

Published on July 12, 2017        Author: 
Twitter
Facebook
Google+
LinkedIn
Follow by Email

The Final Award Regarding Costs in Philip Morris v. Australia recently became public this July 2017 (although dated as of 8 March 2017), in (somewhat surprisingly) redacted form, signed by arbitrators Professor Karl Heinz-Bockstiegel (President), Professor Gabrielle Kaufmann-Kohler (Co-Arbitrator) and Professor Donald Mc Rae (Co-Arbitrator). Reasons were not given for the redaction of virtually all monetary amounts from the Final Award Regarding Costs, and the actual numerical figure of costs awarded to Australia was likewise redacted.  The Financial Times reported, however, that legal costs and fees that Australia claimed against Philip Morris will likely run to AUD $50 Million, or approximately USD $37 Million. For sure, according to the redacted Final Award, the figure that Australia claimed as legal costs and fees incurred defending against Philip Morris is much higher than the maximum legal fees and costs that have been claimed by the United States (USD $3 Million) and Canada (USD $4.5 Million) (Final Award Regarding Costs, para. 74.).

Assuming that the reported USD$37 Million/AUD$50 Million claim of Australia for legal costs and fees is correct, these would amount to almost 1% of Philip Morris’ USD $4.2 Billion claim against Australia, quite in contrast to around 1/10 of 1% of legal fees that Russia was ordered to pay (around USD$60 Million in legal fees) in the famous US$50 Billion Yukos arbitration.  Clearly, the alleged Australian US$37 Million claim for legal fees and costs against Philip Morris would be a staggering outlier against a trend observed in the last five years of ICSID arbitrations, where: “a study of ICSID arbitrations concluded between FY2011 and FY2015 reveals that costs incurred, on average, by claimants were US$5,619,261.74, and US$4,954,461.27 by respondents.”  This post examines the Philip Morris v. Australia tribunal’s reasoning on legal costs and fees to identify variables and considerations deemed relevant by the tribunal in reaching its conclusion awarding full costs to Australia (with the caveat that the exact figures of the costs are redacted from the Final Award).  After all, rising legal costs and fees should be a concern for largely self-regulated international lawyers, whose duties of professionalism include “avoiding unnecessary expense or delay” (The Hague Principles on Ethical Standards for Counsel Appearing before International Courts and Tribunals, Principle 2.3).   Read the rest of this entry…

 
Comments Off on Rising Legal Costs Claimed by States in Investor-State Arbitrations: The Test of ‘Reasonableness’ in Philip Morris v. Australia