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Economic Development and Sovereign Immunity

Published online by Cambridge University Press:  27 February 2017

Georges R. Delaume
Georges R. Delaume*
Affiliation:
International Centre for Settlement of Investment Disputes (ICSID)
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Extract

Both the rules of sovereign immunity and the law of economic development are undergoing a noteworthy evolution. Both have inspired an abundant literature. Yet, for the most part, the literature in point approaches each subject individually and makes no attempt to consider whether the rules obtaining in one discipline might affect those of the other.

Type
Research Article
Information
American Journal of International Law , Volume 79 , Issue 2 , April 1985 , pp. 319 - 346
Copyright
Copyright © American Society of International Law 1985

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References

1 Saudi Arabia v. Arabian American Oil Co. [ARAMCO], Aug. 23, 1958, 27 ILR 117, 155 (1963); Texaco Overseas Petroleum Co./California Asiatic Oil Co. v. Government of the Libyan Arab Republic, Jan. 19, 1977, 17 ILM 3 (1978), 53 ILR 389 (1979), para. 13 [hereinafter cited as TOPCO award].

See Delaume, G., Transnational Contracts, ch. XIV, para. 14.04 (1975-)Google Scholar.

2 In particular, the General Assembly resolutions concerning Permanent Sovereignty over Natural Resources, No. 1803 (XVII), 17 UN GAOR Supp. (No. 17) at 15, UN Doc. A/5217 (1962); the Establishment of a New International Economic Order, No. 3201 (S-VI), 28 UN GAOR Supp. (No. 1) at 3, UN Doc. A/9559 (1974); and the Charter of Economic Rights and Duties of States, No. 3281 (XXIX), 29 UN GAOR Supp. (No. 31) at 50, UN Doc. A/9631 (1974).

3 See International Ass’n of Machinists & Aerospace Workers v. Organization of Petroleum Exporting Countries, 477 F.Supp. 553 (CD. Cal. 1979).

4 Sapphire International Petroleum Ltd. v. National Iranian Oil Co., Mar. 15, 1963, 35 ILR 136 (1967); BP Exploration Co. (Libya) Ltd. v. Government of the Libyan Arab Republic, Oct. 10, 1973, 53 ILR 297 (1979). See also the awards referred to in note 5 infra.

5 See, e.g., the TOPCO award, supra note 1; Libyan American Oil Co. v. Government of the Libyan Arab Republic, Apr. 12, 1977, at 99-113, 20 ILM 1, 55-58 (1981) [hereinafter cited as LIAMCO award]; Kuwait and the American Independent Oil Co., Mar. 24, 1982, 21 ILM 976, para. 90(2) (1982); Framatome v. Atomic Energy Organization of Iran, Apr. 30, 1982, 111 Journal Du Droit International [JDI] 58 (1984) (published in English translation without the names of the parties in 6 Y.B. Com. Arb. 94 (1983)).

See also, e.g., White, , Expropriation of the Libyan Oil Concessions—Two Conflicting International Arbitrations 30 Int’l & Comp. L.Q. 1 (1981)Google Scholar; Weston, , The Charter of Economic Rights and Duties of States and the Deprivation of Foreign-Owned Wealth 75 AJIL 437 (1981)CrossRefGoogle Scholar; von Mehren & Kourides, International Arbitration between States and Foreign Private Parties: The Libyan Nationalization Cases, id. at 476; Oppetit, , Arbitrage et contrats d’Etat: L’Arbitrage Framatome et autres c. Atomic Energy Organization of Iran 111 JDI 37 (1984)Google Scholar; Lalive, , Contrats entre Etats ou entreprises étatiques et personnes privées—Développements recents 181 Recueil Des Cours 13 (1983 III)Google Scholar.

6 The ICSID Secretariat has compiled a collection of Investment Laws of the World and another covering Investment Treaties, both in loose-leaf form; they are published by Oceana Publications, Dobbs Ferry, New York.

Bilateral investment treaties differ in this respect from commercial treaties, such as those regarding the status of Soviet Trade Delegations or FCN treaties. See G. Delaume, note 1 supra, chs. XI, para. 11.02 and XII, para. 12.06.

7 See notes 97-103 infra. For the ICSID Convention, see 17 UST 1270, TIAS No. 6090, 575 UNTS 159.

8 1972 ETS 74, reproduced in G. Delaume, note 1 supra, App. 1, Booklet D, Arts. 4-14.

9 State Immunity Act 1978, ch. 33, reprinted in 17 ILM 1123 (1978), and in G. DELAUME, note 1 supra, App. 1, Booklet D. See §§2-12. Section 3(3) defines “commercial” transactions as follows:

In this section “commercial transaction” means—

  • (a)

    (a) any contract for the supply of goods or services;

  • (b)

    (b) any loan or other transaction for the provision of finance and any guarantee or indemnity in respect of any such transaction or of any other financial obligation; and

  • (c)

    (c) any other transaction or activity (whether of a commercial, industrial, financial, professional or other similar character) into which a State enters or in which it engages otherwise than in the exercise of sovereign authority. . . .

Note also that under section 3(1), the nonimmunity exception applies not only to commercial transactions (§3(1)(a)), but also to contractual obligations, “whether a commercial transaction or not,” to be performed in the United Kingdom (§3(l)(b)). This last provision is patterned after Article 4 of the European Convention.

10 28 U.S.C. §§1330, 1602-1611 (1982), reproduced in G. Delaume, supra note 1, App. 1, Booklet D, § 1603(d) and (e).

11 Act to Provide for State Immunity in Canadian Courts 1982, ch. 95, reproduced in 21 ILM 798 (1982), and in G. Delaume, supra note 1, App. 1, Booklet D, sec. 5.

12 Such as those concerning the type of persons who can claim immunity or the type of transactions that should be characterized as “commercial” or “sovereign” acts.

13 European Convention on State Immunity, supra note 8, Art. 27(2); SIA, supra note 9, §14(2). See also, as to countries whose law is not codified, G. Delaume, note 1 supra, chs. XI, para. 11.02 and XII, para. 12.02.

14 See, however, the Eurodif case, discussed in the text accompanying notes 52-57 infra, which might imply that, at least in France, the courts would not consider that direct state intervention should be characterized differently from that of autonomous agencies.

15 See note 4 supra.

16 G. Delaume, note 1 supra, ch. VIII, para. 8.08.

17 Judgment of Nov. 28, 1968, Court of Appeal, The Hague, 9 ILM 152 (1970).

18 Para. 23 of the judgment, id. at 160.

19 Judgment of Apr. 12, 1983, Bundesverfassungsgericht, 22 ILM 1279 (1983).

20 Judgment of May 11, 1981, Court of Appeals, Frankfurt, , 1981 Neue Juristische Wochenschrift 2650, summarized in 77 AJIL 159 (1983)Google Scholar.

21 The Court said:

Credit balances in accounts with banks in the forum state and earmarked for transfer to an account of this state with its central bank to meet the budget of a foreign state do not reach their decisive purpose according to the intention of the foreign state until the credit balances reach the power of disposal of the central bank. With the instruction to transfer the credit balance to the central bank, at best indirect sovereign purposes are pursued. From an international law aspect, the forum state would not have to classify the credit balances as serving sovereign purposes even though after their receipt in the account of the foreign state at its central bank they were used for purposes that can be classified as sovereign. The practice of the states in the field of immunity law does not indicate that such a classification is required under international law at the time decisive here.

22 ILM at 1305.

22 Id. at 1304.

23 Judgment of Nov. 29, 1972, Trib. gr. inst., Paris, 100 JDI 227 (1973), 12 ILM 182 (1973).

24 A similar result emerged from the attempts by the Libyan American Oil Co. to enforce the LIAMCO award in various countries, including France. See note 5 supra. In France, the award was granted recognition, but the court vacated the attachments of Libyan assets, including those of Libyan instrumentalities or agencies. At the same time, the court appointed a committee of three independent persons to ascertain whether the attached assets were used for commercial or sovereign activities. See Procureur de la République v. Société LIAMCO, Judgment of Mar. 5, 1979, Trib. gr. inst., Paris, 106 JDI 857 (1979). See Rambaud, , Les Suites d’un différend pétrolier: L’Affaire LIAMCO devant le juge français 1979 Annuaire Français de droit International 820 CrossRefGoogle Scholar.

The French proceeding (like those in Sweden and in the United States) was discontinued following an amicable settlement between LIAMCO and Libya. See also notes 79-83 infra.

25 See note 13 supra. Delaume, , The State Immunity Act of the United Kingdom, 73 AJIL 185, 188, and 194 (1979)Google Scholar. Note also that the view has been advanced that “even a mining concession agreement, though not a contract within the category of contracts mentioned in (b), would be a commercial transaction, because it would be ‘any other transaction . . . into which a State enters’.” Mann, , The State Immunity Act 1978 50 Brit. Y.B. Int’l L. 43, 52 (1979)Google Scholar. If this view is correct, it might mean that a state itself, as distinguished from a “separate entity,” might not enjoy immunity in regard to disputes with foreign concessionaires.

26 477 F.Supp. 553 (CD. Cal. 1979), affd on other grounds, 649 F.2d 1354 (9th Cir. 1981), cert, denied, 454 U.S. 1163 (1982).

27 477 F.Supp. at 567 (referring to UN General Assembly Resolutions Nos. 1803, 3821, 3201, 3171, 3016 and 2158).

28 Id. at 568.

29

We need not look beyond our own borders for examples of a government taking a determinative role in the marketing of its wealth and natural resources. Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), involved an antitrust challenge to a California state program which controlled the marketing of raisins grown in the state, so as to restrict competition among the growers, and maintain prices. According to the defendants in that case (California officials), the activity was for the benefit and protection of the public welfare. The Court, in reversing the grant of injunctive relief to plaintiff, held that the program was “an act of government,” Id. at 352, 63 S.Ct. 307. . . .

Id.

30 Similar activity has been carried on by other States and the Federal Government in this country. The discovery of the East Texas Oil Field in the early 1930’s led to distressing conditions in the crude oil industry. This new oil became a drug on the market and was being sold for as little as 10 cents a barrel in Texas, at a time when the price throughout the country had soared to more than $3.00 a barrel. The State of Texas and other States, had, in order to prevent waste, and to conserve their natural resources, passed certain statutes and imposed restrictions requiring proration, and limiting the quantities that could be taken from the wells in various fields. The Federal Connally Hot Oil Act, 49 Stat. 30, 15 U.S.C. §715, et seq., was enacted by the Congress to enforce the state statutes, by prohibiting the shipment in interstate commerce of crude oil produced in violation of state laws and regulations. United States v. Brumfield, 85 F.Supp. 696, 699 (W.D.La. 1949). Thus, certain States in the United States have restricted production of crude oil in order to maintain and stabilize prices and, thereafter, the Federal Government not only acquiesced in this activity, but made the States’ acts effective by the assistance of Federal law enforcement.

31 Id. at 568-69.

32 530 F.Supp. 351 (S.D.N.Y. 1981).

33 Id. at 372.

34 543 F.Supp. 561 (S.D. Tex. 1982), 21 ILM 318 (1982).

35 Id. at 565. Compare Carey v. National Oil Corp., 592 F.2d 673 (2d Cir. 1979), in regard to the National Oil Corp. of Libya, considered as a foreign state.

36 543 F.Supp. at 566.

37 This interpretation finds additional support in the words of the Court:

Pemex had not entered into a contract with anyone for the oil and gas produced from the IXTOC I well, nor had it contracted with a United States business to drill the well. In fact, Pemex was attempting to determine if deposits of oil and gas were Ideated offshore under Campeche Bay.

38 Especially the Corporation del Cobre case, note 23 supra. No decision on the subject has yet been rendered in the United Kingdom following the entry into force of the SIA. In his analysis of the SIA, Mann intimates that the courts in the United Kingdom might follow the path opened by continental courts:

[T]he British National Oil Corporation as at present constituted certainly exercises far-reaching authority over oil. But can it be suggested that its authority is sovereign? Even if something in the nature of governmental authority were sufficient, this is vested in the Minister of Energy. It would seem, therefore, that it can only be in rare circumstances that a separate entity will be entitled to immunity.

Mann, supra note 25, at 61.

39 “Judgment of Jan. 17, 1973, Cass. civ. Ire, 63 Revue Critique de Droit International Privé 125 (1974).

The District Court of Frankfurt had no hesitation in holding that the activities in Germany of the Spanish Tourist Bureau were acts of a private nature. See X v. Spanish Government Tourist Bureau, Judgment of June 30, 1977, in Materials on Jurisdictional Immunities of States and their Property, UN Doc. ST/LEG/SER.B/20, at 294 (1982).

40 481 F.Supp. 1056 (E.D.N.Y. 1979).

41 The court acknowledged that “[o]bviously the negligent operation of a hotel in Moscow causing the death of a United States resident has effects on the United States; here it leaves aggrieved relatives in this country.” Id. at 1062. However, the court held that “[ijndirect injurious consequences within this country of an out-of-state act are not sufficient contacts to satisfy the ‘direct effect’ requirement of section 1605(a)(2).” Id.

Referring to Upton v. Empire of Iran, 459 F.Supp. 264 (D.D.C. 1978), which involved an action for wrongful death and personal injury due to the collapse of the roof of an airline terminal in Tehran, Iran, the court said;

Despite all this legislative history and statutory and case law, the concept of “direct effect” remains elusive. But, when traced through the more restrictive view applied to relevant long-arm provisions of the District of Columbia, Virginia, Maryland and the Uniform Act, it is reasonable to hold that section 1605(a)(2) of title 28, adopted as part of the Immunities Act, was designed to restrict the exercise of the potential jurisdictional power of American courts to tortious activities outside this country which have a “substantial” impact in the United States.

481 F.Supp. at 1065.

42 See text and notes 45-47.

43 Sugarman v. Aeromexico, 626 F.2d 270 (3d Cir. 1980). See also Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371 (5th Cir. 1980). In that case, the plaintiff had purchased passage on the Dominican national airline for a package tour from Miami to the Dominican Republic. He had been denied access to the Republic by immigration officials and compelled to leave the country, first for Puerto Rico and second for Haiti, where no further transportation was provided and he had to make his own arrangements to return to Miami. In an action for damages for breach of contract, the airline pleaded immunity. The airline admitted that the sales of tickets and “tourist cards” (permitting entry to the Republic) carried on in the United States constituted commercial acts. It argued, however, that the claim arose not from this commercial activity, but from the acts of Dominican immigration officials, in which the airline was compelled by those authorities to participate. In that regard, the airline acted merely as an arm or agent of the Dominican Government and, as such, was allegedly entitled to the same immunity from any liability arising from that governmental function as would inure to the Government itself. The court did not agree. It held that, under the law of Florida, a common carrier is required to exercise the highest duty of care, foresight, prudence and diligence toward its passengers and that such duty included warning the passenger that he might be prevented by immigration officials from entering his country of destination. Under the circumstances, the court allowed the action to proceed.

Other “airline cases” are primarily concerned with the question whether actions against foreign states and their agencies should be tried with or without a jury. See, e.g., Icenogle v. Olympic Airways, 18 ILM 963 (1979) (D.D.C. 1979); Herman v. El AI Israel Airlines, 502 F.Supp. 277 (S.D.N.Y. 1980).

44 See note 6 supra.

45 549 F.Supp. 1094 (S.D.N.Y. 1982). Originally, the action had been brought not only against the defendants, but also against the Republic of Ireland, in the District Court for the District of Columbia. The court dismissed the action against the Republic and ordered transfer of the case to the District Court for the Southern District of New York. See Gibbons v. Republic of Ireland, 532 F.Supp. 668 (D.D.C. 1982).

46 See the subsection of this section, “Joint Ventures,” infra.

47 549 F.Supp. at 1110-11. In this connection, the court also referred to Gilson v. Republic of Ireland, 682 F.2d 1022 (D.C. Cir. 1982). Gilson, too, involved an action against not only the Republic of Ireland, but also IDA, GE and other Irish defendants, some of whom were accused of usurpation of patent rights and equipment owned by the plaintiff. The action against the Republic was dismissed. In regard to the claim against GE, the court said:

[T]he complaint alleges an unbroken chain of events beginning when plaintiff contracted with defendant GE in the United States, with the participation of defendant IDA’s New York office, and involving the active collusion of all defendants to entice plaintiff to leave the United States for Ireland. Does this sequence of events yield an action within the exceptions enumerated in section 1605 to section 1604’s general rule of immunity?

We believe that, if all this happened in the way plaintiff alleges, it does. In particular, we think the case would fall within clause 2 of section 1605(a)(2), that we would have before us an action based “upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere. . . .” The “act performed in the United States” is the enticement, the “commercial activity of the foreign state elsewhere” is the quartz crystal business in which plaintiff and defendants were involved.

Id. at 1027.

48 The court said:

Every obligation undertaken by GE in the Joint Venture Agreement contemplated activity in which, by nature, a private party could engage; viewed as a whole, the Joint Venture Agreement was, by nature, precisely the sort of activity that an individual might customarily carry on for profit. Given the “nature-of-the-act test” for commerciality that has been codified in the FSIA, it is of no relevance to the Court’s analysis that GE did not enter into the Joint Venture Agreement with the purpose of achieving pecuniary gain. Rather, the controlling factor is that the Joint Venture Agreement is by nature a transaction that could just as easily have been entered into by a private party and could just as easily have been undertaken for a pecuniary rather than a public purpose.

549 F.Supp. at 1110.

49 Id. at 1119.

50 693 F.2d 1094 (D.C. Cir. 1982), cert, denied, 104 S.Ct. 71 (1984).

51 Delaume, , ICSID Arbitration and the Courts 77 AJIL 784 (1983)CrossRefGoogle Scholar; Note, , Jurisdiction, Sovereign Immunity 24 VA. J. Int’l L. 217 (1983)Google Scholar.

52 Judgment of Mar. 14, 1984, Cass, civ., 1984 Juris-Classeur périodique [JCP] II 20,205, 23 ILM 1062 (1984).

53 23 ILM at 1069.

54 See, e.g., the EEC Guides on drawing up (1) Contracts for Large Industrial Works, (2) International Contracts on Industrial Co-operation and (3) International Contracts between Parties Associated for the Purpose of Executing a Specific Project. The Guides are reproduced in G. Delaume, supra note 1, App. IV, Booklet D.

55 SIA, supra note 9, §13(4).

56 Canadian SIA, supra note 11, §11(1)(b).

57 See the German NIOC case, supra note 19, 22 ILM at 1304.

58 Such is the case in regard to loans made by most domestic public lending agencies and by the European International Bank.

59 Such is the case with the World Bank and the Inter-American, Asian and African Development Banks.

60 Section 10.04(k) of the General Conditions reads as follows:

If within thirty days after counterparts of the award shall be delivered to the parties the award shall not be complied with any party may enter judgment upon, or institute a proceeding to enforce, the award in any court of competent jurisdiction against any other party, may enforce such judgment by execution or may pursue any other appropriate remedy against such other party for the enforcement of the award and the provisions of the Loan Agreement or the Guarantee Agreement. Notwithstanding the foregoing, this Section shall not authorize any entry of judgment or enforcement of the award against any party that is a member of the Bank except as such procedure may be available otherwise than by reason of the provisions of this Section.

Reprinted in G. Delaume, note 1 supra, App. IV, Booklet B, at 7 (1981).

61 See note 9 supra. The European Convention on State Immunity is not as specific as the SIA, but there is reason to believe that loans would fall within the scope of “contracts” referred to in Article 4 of the Convention.

62 See G. Delaume, note 1 supra, ch. XI, para. 11.06.

63 Allied Bank Int’l v. Banco Credito Agricola de Cartago, 566 F.Supp. 1440 (S.D.N.Y. 1983), aff’d, 733 F.2d 23 (2d Cir. 1984); Jackson v. People’s Republic of China, 550 F.Supp. 869 (N.D. Ala. 1982), 22 ILM 75 (1983), set aside 23 ILM 402 (1984), dismissed, 596 F.Supp. 386 (1984). The latter decision is summarized infra at p. 456 and will be reprinted in ILM.

64 The same approach is favored by Article 4 of the European Convention on State Immunity.

65 Société Bauer-Marchal v. Ministre des Finances de Turquie, Judgment of Feb. 10, 1965, Cour d’appel, Rouen, 92 JDI 655 (1965). See also, in the same case, Judgment of Dec. 19, Cass. civ. Ire, 1962 JCP II 12, 489, quashing Judgment of Jan. 20, 1957, Cour d’appel, Paris, 84 JDI 392 (1957).

66 Two decisions of the Court of Cassation are inconclusive in the sense that they dealt with issues of assumption of debt pursuant to peace treaties (Faure et al. v. Etat Italien, Judgment of Oct. 5, 1965, Cass, civ., 1966 JCP II 14,831) and succession to debt between Belgium and the (then) colony of the Congo (Montefiore v. Association Nationale des Porteurs de Valeurs Mobilières, Judgment of Nov. 21, 1961, Cass, civ., 1962 JCP II 12,521).

67 Mahieu, Brasseur et al. v. République Hellénique, Judgment of May 24, 1933, Cour de Bruxelles, ch. Ire, 62 JDI 1034 (1935).

68 Hellenische Republik v. Obergericht Zürich, Judgment of Mar. 28, 1930, Bundesgericht, 56 Entscheidungen des Schweizerischen Bundesgerichts, Amtliche Sammlung [BG I] 237 (1930); Royaume de Grèce v. Banque Julius Bär et Cie., Judgment of June 6, 1956, Bundesgericht, 82 BG I 75 (1956), 23 ILR 195 (1956); Etat Yougoslave v. S.A. Sogerfin, Judgment of Oct. 7, 1938, Bundesgericht, 61 La Semaine Judiciaire 327 (1939).

69 Judgments of Mar. 28, 1930, and June 6, 1956, note 68 supra. See also Lalive, , Swiss Law and Practice in relation to Measures of Execution against the Property of a Foreign State 10 Neth. Y.B. Int’l L. 153 (1979)CrossRefGoogle Scholar.

70 There are, of course, substantive differences between economic development loans and commercial loans. Institutions that specialize in economic development lending assume risks that private lenders cannot afford and have particularly close relationships with their respective borrowers regarding such matters as the allocation of the loan proceeds, the carrying out of the project involved and the manner in which the borrower manages its operation.

71 Consorzio agrario della Tripolitania v. Federazione italiana consorzi agrari e Cassa di risparmio della Libia, Judgment of Dec. 5, 1966, Corte cass. (en banc), 3 Rivista de Diritto Internazionale Privato e Processuale 602 (1967), reprinted in G. Delaume, note 1 supra, App. III, Booklet D, at 39 (1984).

72 As translated in G. Delaume, note 1 supra, App. III, Booklet D, at 43.

73 Corporacion Venezolana de Fomento v. Vintero Sales Corp., 477 F.Supp. 615 (S.D.N.Y. 1979), is not conclusive in this respect. The corporation is an entity wholly owned by the Venezuelan Government, which gives it financial backing in the form of guarantees, whose purpose is to finance projects designed to stimulate Venezuelan economic development. In this case, the corporation sought a declaratory judgment as to the validity of guarantees given by it regarding two loan agreements between a Swiss lender and a Venezuelan borrower. The lender asserted that the loans were in default and counterclaimed for the award of principal and interest. It was found that the corporation’s allegations of fraud had not been proven and that the lender was entitled to recover against the corporation, as guarantor of the loans. The corporation appealed and raised objections to the jurisdiction of the federal courts. (712 F.2d 33 (2d Cir. 1979)). On remand, jurisdiction was upheld on the ground that the corporation had waived its immunity by not raising it as a defense to the counterclaims.

74 Delaume, , The ICSID and the Banker Int’l Fin. L. Rev., October 1983, at 9 Google Scholar.

75 For examples of this type of provision, see G. DELAUME, note 1 supra, ch. XI, paras. 11.06 and 11.07.

76 The adaptability of the Convention to new investment trends is apparent not only from the ICSID clauses in the archives of ICSID, but also from the nature of disputes effectively submitted to ICSID conciliation/arbitration.

As examples of disputes concerning traditional types of investment, one might mention disputes arising out of agreement’s relating to (1) the exploitation of natural resources, such as bauxite mining (Alcoa /Kaiser/ Reynolds v. Jamaica), oil exploitation and exploration (AGIP v. Congo, Tesoro v. Trinidad and Tobago), and forestry exploitation (LETCO v. Liberia); (2) industrial investments regarding the production of fibers for exports (Gardella v. Ivory Coast), the manufacture of plastic bottles for domestic consumption (Benvenuti & Bonfant v. Congo), liquefaction of natural gas (Guadalupe v. Nigeria), and the production of aluminum (Alusuisse v. Iceland); (3) tourism development in the form of the construction of hotels (Holiday Inns v. Morocco; AMCO Asia v. Indonesia); and (4) urban development in the form of housing construction (SOABI v. Senegal).

Disputes relating to modern types of investment include those concerning the construction of a chemical plant on a turnkey basis, coupled with a management contract providing technical assistance for the operation of the plant (Klöckner v. Cameroun); a management contract for the conversion of vessels into fishing vessels and the training of crews (Atlantic Triton v. Guinea); and technical and licensing agreements for the manufacture of weapons (Colt Industries v. Korea). In the same category, one might also mention a dispute, which is the only one brought by a state against an investor, relating to the breach of a contract for the construction of a maternity ward (Gabon v. Serete).

77 See ICSID Model Clauses, sec. 2, para. 7. Delaume, , ICSID Clauses: Some Drafting Problems News From ICSID, Summer 1984, No. 2, at 18-19 Google Scholar.

78 See note 5 supra.

79 Procureur de la République v. Société LIAM(X), Judgment of Mar. 5, 1979, Trib. gr. inst., Paris, 106 JDI 857 (1979). See also note 24 supra.

80 Libyan Am. Oil Co. v. Socialist People’s Libyan Arab Janiahiriya, 482 F.Supp. 1175 (D.D.C. 1980), vacated, 684 F.2d 1032 (D.C. Cir. 1981). See also the U.S. Government’s brief in 20 ILM 161 (1981).

81 See cases cited in notes 68 and 69 supra.

81 Socialist Libyan Arab Popular Jamahiriya v. Libyan American Oil Co., Judgment of June 19, 1980, Bundesgericht, 20 ILM 151 (1981).

83 Libyan American Oil Co. v. Socialist People’s Arab Republic of Libya, Judgment of June 18, 1980, Svea Court of Appeal (Stockholm), 20 ILM 893 (1981). Appeal was taken to the Swedish Supreme Court, but the dispute was settled before the Court could hear the case.

84 Code Civil, Art. 14 (Fr.). See Société Nationale des Transports Routiers v. Compagnie Algérienne de Transports et d’Affrètement, Judgment of Mar. 23, 1977, Cour d’appel, Paris (unpub.), summarized in G. Delaume, note 1 supra, ch. VIII, para. 8.02, aff’d, Judgment of Mar. 19, 1979, Cass. civ. com., summarized in 1980 Annuaire Français de Droit International 858.

85 Dutch Code of Civil Procedure, Art. 126(3). For the N.V. Cabolent case, see note 17 supra.

86 German Code of Civil Procedure, Art. 23. See Nonresident Petitioner v. Central Bank of Nigeria, Judgment of Dec. 2, 1975, District Court, Frankfurt, 16 ILM 501 (1977).

87 G. Delaume, note 1 supra, ch. VIII, paras. 8.07-8.10.

88 This remark must be limited to “exclusive,” as opposed to “alternative,” choices of forum. In the event that the parties, or one of them, elect to provide for the jurisdiction of a particular forum, but give themselves the option of bringing action in other forums (as most transnational lenders do), the certainty sought to be achieved in regard to immunity rules by the choice of an exclusive forum would naturally disappear.

89 G. Delaume, note 1 supra, ch. X.

90 A draft U.S.-UK treaty on the subject has remained a draft and is unlikely to become a reality. See id., ch. IX, para. 9.14.

91 Id., chs. IX and X. Note also that section 31 of the Civil Jurisdiction and Judgments Act 1982, ch. 27, provides specifically that a foreign judgment against a state may be recognized and enforced in the United Kingdom only if:

  • (a)

    (a) it would be so recognized and enforced if it had not been given against a State; and

  • (b)

    (b) that court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978.

The Act is reprinted in id., App. I, Booklet C, at 19 (1984) and in 22 ILM 123 (1983).

92 These agreements include the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 UNTS 3, 21 UST 2517, TIAS No. 6997, and the ICSID Convention, supra note 7. The United States has not yet ratified the Inter- American Convention on International Commercial Arbitration of 1975, 14 ILM 336 (1975), which is in force among several Latin American countries.

93 Delaume, , State Contracts and Transnational Arbitration 75 AJIL 784, 786-88 (1981)Google Scholar.

94 Id. at 788-90.

95 Id. at 815-16.

96 Delaume, note 51 supra, at 791.

97 Convention, supra note 7, Art. 54(1).

98 Id., Art. 54(2). For a concrete example, see S.A.R.L. Benvenutti [should read Benvenuti] & Bonfant v. Gouvernement de la République du Congo, Judgment of June 26, 1981, Cour d’appel, Paris, 108 JDI 843 (1981), and (in English translation) 20 ILM 878 (1981).

99 See notes 76 and 77 supra.

100 Convention, supra note 7, Art. 55.

101 Issues of immunity should be viewed in the context of the Convention as a whole. Thus, a contracting state that is party to an ICSID award has the obligation to comply with the award (Convention, Art. 53(1)), and if that state has revoked its immunity to thwart enforcement of an award, it will be exposed to various sanctions, which are expressly provided for in the Convention (Arts. 27(1) and 64). See G. Delaume, note 1 supra, ch. XV, para. 15.29.

102 Most disputes submitted to ICSID have been amicably settled or discontinued. At the time of writing, four awards on the merits have been rendered. Only the Benvenuti v. Congo award (see note 98 supra) has been the object of recognition proceedings. These were followed by Congo’s compliance with the award. See NEWS FROM ICSID, Winter 1984, No. 1 , a t 2.

103 Such was the case in regard to the BP, TOPCO and LIAMCO awards. See von Mehren & Kourides, note 5 supra; and Lalive, note 5 supra.

104 For illustrations, see G. Delaume, note 1 supra, chs. XI, para. 11.06-11.07 and XII, para. 12.05.

105 See, e.g., Libra Bank Ltd. v. Banco Nacional de Costa Rica, 676 F.2d 47 (2d Cir. 1982). But see Banque Compafina v. Banco de Guatemala, 583 F.Supp. 320 (S.D.N.Y. 1984). Compare Sperry Int’l Trade Inc. v. Government of Israel, 532 F.Supp. 901 (S.D.N.Y. 1982), aff’d, 670 F.2d 8 (2d Cir. 1982), 20 ILM 1066 (1982).

106 See, e.g., Allied Bank Int’l v. Banco Credito Agricola de Cartago, 566 F.Supp. 1440 (S.D.N.Y. 1983).

107 See, e.g., the Exploration Agreement of Apr. 14, 1983, between Liberia and Amoco Liberia Exploration Co. (Petroleum Legis., South and Central Africa, Supp. No. 76), Art. XXI(H):

The Republic of Liberia hereby irrevocably waives any claim to immunity in regard to any proceedings to enforce any arbitral award rendered by a tribunal constituted pursuant to this Contract, including, without limitation, immunity from service of process, immunity from jurisdiction of any court, and immunity of such of its property as is of a commercial nature from execution.

For other illustrations, see G. Delaume, note 1 supra, ch. XV, para. 15.29. See also ICSID Model Clauses, clauses XVI and XIX, Doc. ICSID/5/Rev. 1 (July 7, 1981).

108 For example, in regard to torts (see the SEDCO case, note 34 supra; the Harris case, note 40 supra), antitrust (see the International Ass’n of Machinists case, note 26 supra), employment discrimination (see the Rios case, note 32 supra), and nationalization (see the Corporation del Cobre case, note 23 supra). See also Kahale, , Characterizing Nationalization for the Purposes of the Foreign Sovereign Immunities Act and the Act of State Doctrine 6 Fordham Int’l L.J. 391 (1983)Google Scholar.

109 See notes 75 and 104-106 supra.

110 See notes 76-77 and 107 supra.

111 See cases cited in notes 17, 19, 39, 45, 50, 52 and 73 supra.

112 See notes 26-38 supra.

113 Id.

114 See, e.g., Osakwe, , A Soviet Perspective on Foreign Sovereign Immunity: Law and Practice 23 Va. J. Int’l L. 13 (1982)Google Scholar; People’s Republic of China, Aide Memoire of the Ministry of Foreign Affairs, Feb. 3, 1983, reprinted in 22 ILM 81 (1983); Sgro, , China’s Stance on Sovereign Immunity: A Critical Perspective of Jackson v. People’s Republic of China 22 Colum. J. Transnat’l L. 101 (1983)Google Scholar.

115 McCaffrey, , The Thirty-fifth Session of the International Law Commission 78 AJIL 457 (1984)CrossRefGoogle Scholar. See also Draft Articles for a Convention on State Immunity, prepared by the International Law Association, 22 ILM 287 (1983); and the Inter-American Draft Convention on Jurisdictional Immunity of States, prepared by the Organization of American States, 22 ILM 292 (1983).