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Home Archive for category "International Law and Domestic Law" (Page 9)

Argentina’s Sovereign Debt Default Cases: Some Recent Developments in a Continuing Saga

Published on November 9, 2012        Author: 

More than ten years have passed since Argentina defaulted on its external debt obligations in December 2001. However, the repercussions of the Argentine financial crisis continue to contribute to the development of international law. This brief note provides a short overview of the most recent decisions of different domestic courts arising out of this Argentinian saga: NML Ltd et al. v the Republic Argentina before the US Court of Appeals decided on 26th October 2012 (see reporting here, here, here and here), and the decision of the Ghanaian Commercial Court of 2nd October 2012 (see Opinio Juris, BBC, Al Jazeera,  and elsewhere: here, and here), while reference will be made to the NML v Argentina case, before the UK Supreme Court which was decided on 6th July 2011 (see reporting here and here).

These three cases pronounced on inter-related, but distinct, legal issues (enforcement of foreign awards, state immunity, and non-discriminatory treatment of bondholders) arising out of the Argentine decision to default on its external debt. In combination, they have far-reaching legal implications. It is noteworthy that different courts from around the globe repeatedly ruled in favour of bondholders and against Argentina. Although Argentina in and out of court has invoked political arguments, such as the implications of the court’s approach to the Eurozone crisis resolution efforts (in NML v Argentina before the US Court of Appeals) and the nature of the claimants as ‘vulture funds’ (see here reacting to the Ghanaian Commercial Court ruling; see also Lord Phillips and Lord Collins in NML v Argentina  [2011] UKSC 31, paragraphs 1 and 104-107 respectively), domestic courts consistently prioritise a more legal or stricto sensu approach and promote the Rule of Law in international economic and financial relations.

Background and US Proceedings

After the default in 2001, Argentina made exchange offers to holders of bonds, which were governed by the Fiscal Agency Agreement (FAA). Read the rest of this entry…

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After a Brief Hiatus, Kenya Once Again Has Universal Jurisdiction Over Pirates

Published on October 24, 2012        Author: 

 Jon Bellish is a Project Officer at the Oceans Beyond Piracy project just outside Denver, Colorado, though the views expressed are solely those of the author. You can follow him on Twitter.

On October 18, the Kenyan Court of Appeal in Nairobi handed down a pivotal decision in In re Mohamud Mohammed Hashi, et al. It held that Kenya has jurisdiction to try piracy suspects whose alleged acts occurred beyond the country’s territorial waters. Due to Kenya’s central role in the emerging global network of piracy prosecutions, the Court’s ruling in Hashi will have positive implications both within and outside of Kenya.

The Court of Appeal decision overturns a ruling from the High Court of Mombasa, which concluded that, “[Kenyan] Courts can only deal with offences or criminal incidents that take place within the territorial jurisdiction of Kenya.” For an excellent analysis of the lower court’s decision, I would point readers to this post on Communis Hostis Omnium.

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The Julian Assange Affair: May the UK Terminate the Diplomatic Status of Ecuador’s Embassy? UPDATED

Published on August 17, 2012        Author: 

Ecuador has announced that it is granting asylum to Julian Assange, the Wikileaks founder, who has taken refuge in the Ecuardor’s embassy in London. Assange sought refuge in the Embassy after the UK Supreme Court ruled a few weeks ago that he may be extradited to Sweden where he is wanted for trial on allegation of committing sexual offences. In this dispute there are some points in the UK’s favour. It is fairly clear that Assange is not covered by Refugee Convention and is therefore not entitled to asylum as a matter of international law. That Convention does not apply to persons in respect of which there are serious reasons to believe they have committed a serious non-political crime (Art. 1(F)(ii)). Furthermore, as Matthew Happold pointed out in a previous post, general international law does not provide for diplomatic asylum. Thus, States are not required to grant safe passage out of their territory to those who seek asylum in diplomatic premises within their territory (unless there is a specific treaty which provides for such an obligation, which there is not in this case).

However, the UK also faces a number of legal difficulties. The main challenge it faces is that international law (in the form of Art. 22 of the Vienna Convention on Diplomatic Relations) provides that the premises of a diplomatic mission are inviolable and agents of a State may not enter them to perform law enforcement (or other) functions without the consent of the head of the diplomatic mission. So UK agents may not enter into the Ecuadorian Embassy to arrest Assange. The question raised is whether this inviolability is absolute and whether there are any ways in which the UK could get hold of Assange, without violating international law. In particular, may the UK unilaterally terminate the diplomatic status of Ecuador’s embassy by withdrawing its consent for that building to be regarded as diplomatic premises? If the UK did withdraw that consent, would the building then cease to be inviolable such that UK agents could go in to it?

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Review of Expert Determinations of the International Swaps and Derivatives Association by Domestic Courts

Published on May 2, 2012        Author: 

A central policy concern since the onset of the Greek debt crisis in 2010 has been whether sovereign debt restructurings trigger credit default swaps (CDS). CDS are insurance-like financial products whereby a protection seller agrees to pay the protection buyer in case of a credit event on a reference entity (in this case Greece) in return for a premium over a defined period of time. The legal framework for CDS transactions is largely standardized. More than 90 percent of CDS transactions are based on the ISDA Master Agreement. As a mechanism for creditors to hedge against the default of a debtor, CDS are financial instruments to redistribute risk (or, according to their defenders, to shift risk onto those entities willing and capable of better bearing such risks). Over the last two decades, CDS on sovereign debtors became increasingly common.

Greece’s debt restructuring in February/March 2012 was the first to be implemented under the umbrella of a large number of CDS (more than 2.5 billion Euros in net terms).  During the implementation phase of the Greek restructuring in March 2012, several interested market participants raised the question whether the Greek restructuring triggered an obligation for the sellers of CDS on Greece to pay. The Determinations Committee (DC) of the International Swaps and Derivatives Association (ISDA) for Europe, Middle East and Africa, the body established by ISDA and given decision-making power under the ISDA documentation to rule on credit events,  found that a restructuring credit event was triggered on March  9 2012.  The parties to CDS have agreed by contract that a credit event occurs only if the competent DC has said so.

As the Greek restructuring in February/March 2012 demonstrated, the consequences of such expert determinations by DCs can be momentous in financial terms not only for the parties to CDS transactions themselves, but also for the broader public and for taxpayers. A case in point is the Austrian bank KA Finanz, the bad bank split off from Kommunalkredit, the comparatively small Austrian lender to municipalities previously owned by Dexia that the Austrian government nationalized at the height of the global financial crisis. KA Finanz had taken over about 500 million Euros of CDS on Greece from Kommunalkredit. As a result of the payouts following the March 9 decision, the Austrian government had to inject another 1 billion Euros into the bank in order to stave off its collapse.

DCs recruit their members from among financial institutions and investment managers, which will often have positions on either side of CDS transactions. In view of their composition and the considerable practical importance of their decisions, concern has arisen that DC members may be tempted to “vote their own book” – i.e. to reach credit determinations in part based on whether the firm is on the buying or selling side of CDS for a particular reference entity.  For instance, two members of the Steering Committee of the Institute of International Finance  which negotiated the restructuring of Greek debt on behalf of private creditors of Greece, are voting members of the DC for Europe (BNP Paribas and Deutsche Bank). They were net sellers of CDS protection on Greece, meaning that both institutions had to pay out to protection buyers when the credit event occured. Given these concerns about independence of DCs and the right to a fair trial in civil matters under Article 6 of the European Convention, it is an open question whether competent domestic courts could in effect review decisions and potentially overturn decisions of DCs. Read the rest of this entry…

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Kiobel: Universal Civil Jurisdiction under international Law

Published on April 26, 2012        Author: 

 Barrie Sander has law degrees from Cambridge and Leiden, and from September 2012 will be a PhD candidate in International Law at the Graduate Institute of International and Development Studies in Geneva.

In an earlier post, I considered the question of corporate liability under international law in light of the case of Kiobel v Royal Dutch Petroleum (“Kiobel”), which is currently before the US Supreme Court.  Kiobel, a case brought under the Alien Tort Statute (“ATS”), concerns claims that various Shell entities (“the respondents”) planned, conspired and facilitated extrajudicial executions, torture and crimes against humanity by Nigeria in the Niger Delta between 1992 and 1995.

It had been thought that the question of whether corporations may be sued under the ATS would be the central issue before the Supreme Court in Kiobel. However, during oral argument the Justices became preoccupied with the wider issue of the extraterritorial nature of the ATS. In particular, they focussed on the question  whether US federal courts may rely on the ATS to exercise jurisdiction over human rights abuses which have no connection to the US, i.e. abuses committed by non-US entities against non-US victims on non-US territory.  In short, is universal civil jurisdiction permissible under the ATS?  Such was the focus of the Justices on the extraterritorial reach of the ATS that on 5 March 2012, only one week after hearing oral arguments, the Supreme Court ordered briefing and re-argument on:

“[w]hether and under what circumstances the Alien Tort Statute, 28 U.S.C. §1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

Prior to this order, almost all briefing on this issue had been submitted by the respondents and their supporters, who have argued that broad assertions of universal civil jurisdiction by US federal courts may violate international law. In this post I consider some of the counter-arguments that the petitioners and their supporters may seek to raise in response. I suggest that though reliance on the Lotus principle, which would require a rule prohibiting an exercise of jurisdiction (rather than one permitting jurisdiction) may initially seem attractive, that approach is likely to fail. The strongest point that may be put in support of universal civil jurisdiction is that the existence of universal criminal jurisdiction contemplates a degree of civil jurisdiction as well. Read the rest of this entry…

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UK Secret Overseas Torture Policy Leaked

Published on August 5, 2011        Author: 

Yesterday the Guardian published a top secret policy in place for the UK intelligence service since 2002 in several versions, dealing with their obtaining intelligence from detainees in the custody of foreign services who may be subject to mistreatment. The document is entitled ‘Agency Policy on Liason with Overseas Security and Intelligence Services in Relation to Detainees Who May Be Subject to Mistreatment,’ and is available with a few redactions here. The policy is sure to be prove controversial; as readers are aware, an inquiry is underway in the UK regarding complicity of UK services in overseas torture, while a judicial review case has recently been brought before the High Court (see Dapo’s recent post). The policy has been replacedy a more anodyne and public version in 2010 by the new coalition government.

Note that there is at least one more prior policy that is yet to be disclosed, which covered circumstances in which UK agents were ‘directly involved’ in the questioning of a detainee in the custody of a foreign intelligence service (see para. 2 of this policy). That other document may prove to be at least as interesting.

One may find a number of things morally objectionable upon reading the policy – and it’s precisely these parts of the document that caught the eyes of the press, e.g. the explicit reference to negative publicity for the UK as a factor in a balancing exercise in deciding whether or not to give permission for UK agents to provide information to the overseas agency even when there is a risk of mistreatment. But what I found striking about the old policy was how legalistic it was, i.e. how legal advice was used to put limits (or not) on UK participation in overseas interrogation. The new 2010 policy is very different – it seemingly quite deliberately omits any substantial legal discussion.

What is even more striking is how the policy concludes that human rights law as such does not apply to the issues at hand, although it then proceeds to import some human rights standards in the rules it sets out. Crucially, as Dapo pointed out in his earlier post and as I mentioned in a post from a couple of years ago, the key question here is the extraterritorial application of human rights treaties. Do, say, detainees in Pakistani custody questioned by a Pakistani intelligence officer who are being fed questions or information by UK agents have rights vis-a-vis the UK under the human rights treaties to which it is a party, or is it only Pakistan which has obligations in this situation?

In para. 21, the policy answers that question in the negative:

Under section 6 of the Human Rights Act 1998 it is unlawful for a public authority to commit torture , or to inflict inhuman or degrading treatment, as this would be incompatible with a Convention right [Article 3 ECHR]. However, in order for the Act to apply to a detainee held overseas, the UK would need to have “effective control” of the area in which the detainee is located, as the primary jurisdiction of the Act is territorial. The Act is therefore unlikely to apply in situations covered by this policy.

 

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UK Supreme Court Decides R (Smith) v SSD

Published on June 30, 2010        Author: 

Today the UK Supreme Court decided R (Smith) v Secretary of State for Defence [2010] UKSC 29 (press summary), yet another fascinating addition to the unfolding saga on the extraterritorial application of human rights treaties.

The plaintiff was the mother of a UK soldier stationed in Iraq who died there from a severe heatstroke. She demanded an inquiry into her son’s death that would be compliant with Article 2 ECHR, that would be able to expose what in her view were systemic faults in the UK’s provision of equipment and facilities to its soldiers in Iraq which ultimately led to her son’s death. In other words, the case is a mirror-image of Al-Skeini, which also dealt with Art. 2 procedural obligations in Iraq, but that time with respect to inquiries into the deaths of Iraqi nationals at the hands of UK troops. As the readers are aware, the Grand Chamber of the European Court held hearings in Al-Skeini just a few weeks ago (see my old post for more background).

With regard to extraterritoriality, the issue before the Supreme Court in Smith was this: does a UK soldier in Iraq enjoy the protection of the ECHR while stationed in an area not under the UK’s effective control? Incidentally, on the facts of the case, Private Smith actually died on a UK military base. Per the UK government’s concession in Al-Skeini, the House of Lords’ quite dubious analogy between a military prison or base and an embassy, and the European Court’s recent admissibility decision in Al-Saadoon, that fact alone would have brought Private Smith within the UK’s jurisdiction. Readers will recall that in Al-Saadoon the European Court brought the spatial model of Art. 1 jurisdiction as state effective overall control of a geographical area to its extreme, but saying that a military prison or base qualified as an ‘area’ susceptible to such jurisdiction and control.

In other words, under the spatial model Private Smith would have been within the UK’s jurisdiction, and therefore entitled to protection under Art. 2 ECHR. However, issue was raised in the lower courts as to whether he would have been within the UK’s jurisdiction even if he did NOT die on the base, but in essentially the same circumstances. Like the lower courts, therefore, the Supreme Court was now faced with a set of questions in a quasi-advisory posture – something that several judges openly lamented. The Court nonetheless decided to rule on the matter, because it is one of great practical relevance of UK military operations abroad; Private Smith is obviously not the only UK soldier to have died in Iraq or Afghanistan, and many soldiers lost their lives outside areas under UK effective control.

The lower courts applied to Private Smith a variant of the personal model of Art. 1 jurisdiction, as state authority and control over individuals, finding that he indeed fell within the scope of Art. 1. In their view, simply by virtue of being a part of the UK military, Private Smith was within the UK’s authority and control, and accordingly within its jurisdiction.

Today the Supreme Court disagreed. By a majority of 6 to 3 (Lady Hale and Lords Mance and Kerr dissenting), the justices found that mere membership in the armed forces was insufficient to establish a jurisdictional link for the purposes of Art. 1 ECHR.

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The UK Supreme Court Quashes Domestic Measures Implementing UN Sanctions

Published on February 23, 2010        Author: 

Last year, I posted on this blog analyses of domestic cases touching upon UN sanctions, in particular with respect to the 1267 sanctions regime (concerning Al Qaeda and Taliban individuals). My comments on the Abdelrazik case (in the Canadian Federal Courts) can be found here (and in expanded version in the Journal of International Criminal Justice here) and on the Hay case (in the English courts) here. The current post, briefly, draws the attention of our readers to the recent decision of the UK Supreme Court in A, K, M, Q & G v HM Treasury and in Hay v HM Treasury. A more extensive consideration of the Supreme Court’s decision will follow—watch this space.

I. Partial Confirmation of Hay

In its decision, HM Treasury v Mohammed Jabar Ahmed and ors (FC); HM Treasury v Mohammed al-Ghabra (FC); R (on the application of Hani El Sayed Sabaei Youssef) v HM Treasury [2010] UKSC 2, the UK Supreme Court largely confirms the High Court’s approach in Hay, and quashes in part the UK’s ‘Al Qaida Order’ (‘AQO’) because it removes the right of access to an effective remedy (see paras 81-82). The AQO is the implementing measure adopted by the UK Executive to give effect to 1267 sanctions. It is subject to the UN Act 1946, which the Court found not to allow the Executive to remove individual rights. The Court also reverses the decision of the Court of Appeal in A, K, M, Q & G, quashing in part the ‘Terrorism Order’, adopted to implement the 1373 regime. The Law Lords clearly distinguished between the two sanctions regimes, one imposing ‘strict’ obligations, and the other allowing for a margin of appreciation (see paras 64, 148, 196 seq and cf the CFI in OMPI at paras 100-102). What is particularly important in the Supreme Court’s decision is that most of the Law Lords fully accept that the domestic implementing measure of the 1267 regime, the AQO, is strictly conditioned by the relevant Security Council Resolutions. The Court clearly finds that subjecting implementation measures to parliamentary scrutiny could lead to the UK breaching its international obligations under the Charter if the implementing measure was defeated in Parliament (paras 47-49). Lord Brown, dissenting, implies that the Court, in quashing the AQO, would force the UK to flagrantly violate the UN Charter (para 204).

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How and Why International Law Matters – Lessons from the UK’s Iraq Inquiry

Published on January 31, 2010        Author: 

Much of the debate in the UK regarding the Iraq war has centred on the legality of the use of force. There was much public debate on the issue in the lead up to the war in 2003 and sustained interest in it since. The appearance before the UK inquiry, this past week, of Tony Blair and of the main UK government legal advisers involved in considering the legal position has revived this debate (see Marko’s posts here and here). What last week’s proceedings have also demonstrated is that international law played a significant role in the internal deliberations of the UK government and had a role in shaping policy. In short international law mattered! In this post, I do not intend to discuss the substance of whether the legal position ultimately taken by the UK Attorney General was correct. Many (Marko included) have demonstrated the flaws in it. What I wish to consider are the ways in which international law mattered in policy formation and why did it matter to the relevant policy makers in the UK.

The first evidence to support to the claim that international law mattered in the process is that there was much discussion within government of whether the use of force would be legal or not and discussion of the conditions under which the use of force would be legal. Much of the relevant internal documents can now be found on the Inquiry’s website by scrolling to the bottom of the page for 26 January. As would be expected, the legal advisers at the Foreign Office (FCO) and the Attorney General devoted much time and paper to advising on the legality of the war. However, what is perhaps more important here is the relevant policy makers also devoted much time and attention to the question of legality of the conflict. The then Foreign Secretary, Jack Straw, debated this question both with his own legal advisers and with the Attorney General. Marko has discussed some of this correspondence  between Jack Straw and Michael Wood (the FCO Legal Adviser) in his earlier post. Readers can view the correspondence and record of meetings between Straw and the Attorney General, Lord Goldsmith here and here. Perhaps more important is the discussion of the legal question by the Prime Minister. In his own evidence before the Iraq Inquiry, Tony Blair spent quite some time dealing with the legal question.

Of course, the fact that the legal issue was discussed does not by itself indicate that the legality of the war under international law was regarded as important by policy makers. However, what is significant is not just that the matter was discussed but that senior policy makers engaged with it seriously. As it happens the two political figures in the UK that had primary responsibility for shaping the Iraq policy in 2002 were lawyers – Tony Blair and Jack Straw. Perhaps this made it easier and more natural for them to engage with the law. Jack Straw in a letter of 6 Feb. 2003 spent 6 pages on the interpretation and significance of Res. 1441. In all probability he drafted this letter himself since we know that his legal advisers took a different from the view expressed in this letter.  Not only did senior policy makers engage with international law seriously, they regarded it as a matter of importance. In his appearance before the Inquiry, Tony Blair stated that: 

 There was then the legal question, which was very important, because Peter [Lord Goldsmith] had drawn my attention to that. [p. 99 Transcript of Blair Evidence]

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The Relationship between National Law and International Law in the Report of the Georgia Fact-Finding Mission: A Rejoinder

Published on January 23, 2010        Author: 

Editor’s Note: This post is a continuation of a discussion engendered by a previous post by André de Hoogh. Readers will benefit from reading that previous post and the comments made in response to it. The previous post is available here

Earlier this month, I posted some thoughts on the aspects of the Report of the Georgia Fact-Finding Mission dealing with the relationship between international law and national law. That post generated some interesting questions and comments from Dapo Akande, John Dehn and Tobias Thienel. Somewhat belatedly, I am taking the opportunity to respond and to make some observations on some of the issues raised by that discussion.

First of all, Dapo, I would answer that I both reject the justification of rescuing nationals as an exercise of the right of self-defence, and the application of the suggested justification to that effect to the facts of the situation. Population as an essential ingredient of statehood cannot be taken to refer to the population (or citizens) of a State wherever located, but only to the population resident or present on the territory of a State (article 1 of the Montevideo Convention refers to a permanent population). Additionally, I have my doubts as to whether a self-standing justification to rescue nationals exists under customary international law.

Secondly, John, your reference to an international obligation that would relate solely to a matter of internal governance, and the possibility for a State to invoke its own foundational constitutional requirements, does not clarify why an appeal to that State’s constitutional law would be required at all. If the matter refers to an area within the domestic jurisdiction of States, there will be no need for a State to invoke its constitutional law since all it needs to do is to invoke the absence of any rule of international law regulating the topic. Where an international obligation does exist, whether under a treaty or a rule of customary international law, a State is barred from invoking its internal law including its constitution. Read the rest of this entry…

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