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The Role of the Economic Agencies in the Enforcement of International Judgments and Awards: A Functional Approach

Published online by Cambridge University Press:  22 May 2009

William M. Reisman
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Enforcement of international decisions and awards has not enjoyed universal recognition as a problem. Judgment-enforcement, it has been contended, is separable from the general question of sanctions; since submission to adjudication and arbitration in international law is voluntary, it is argued, a state will not submit a particular dispute to third-party settlement unless it has already reconciled itself to the possibility of losing the case. By logical reduction this argument must conclude that there have been no cases of noncompliance. Other writers assure compliance by pointing to the “moral force” of a decision. Given the decentralized structure of the international arena, the “horizontal” allocation of control, and the fact that international affairs hover so perilously close to crisis level, it is tempting to accept the nonexistence of an enforcement problem and thus to sidestep the necessity for formulating enforcement strategies. The wisdom of this course of action is questionable: “Leaving things well enough alone” may, arguably, not make them worse, but it will also not make them better. Organized international decision processes (which include adjudication and arbitration as well as a host of less institutionalized decision processes) counteract relative international anarchy. The efficacy of these decision processes depends upon compliance with or enforcement of their decisions.

Type
1965 Prize Award Essay
Information
International Organization , Volume 19 , Issue 4 , Fall 1965 , pp. 929 - 947
Copyright
Copyright © The IO Foundation 1965

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References

1 See Schwarzenberger, Georg, International Law (London: Stevens & Sons Limited, 1945), pp. 432Google Scholar.

2 So broad an assertion has not been made although it could be deduced from Schwarzenberger's view, cited in the preceding footnote. Nevertheless, there have been innumerable cases of noncompliance in which the impugning party asserted the nullity or legal “inexistence” (De Lapradelle) of the award. Thus, under United States doctrine, The Chamizal Case (Mexico v. United States) was not a case of noncompliance. The complementarity of the doctrines of res judicata (the finality of a judgment) and nullity (the vitiation of a judgment by certain defects) parallels that of the fundamental doctrines of pacta sunt servanda (agreements should be kept) and clausula rebus sic stantibus (so long as things continue as they were at the time of agreement). Here, as in the wider area covered by the pacta rule, the point is not that there is no such thing as a null award but that the concept is susceptible to abuse as long as voluntary compliance must fill the role of a viable enforcement system.

3 See, for example, Root, Elihu, “The Sanction of International Law,” Proceedings of the American Society of International Law, 04 1908 (Vol. 2), pp. 14, 16–17Google Scholar; Taft's concept of a “conscience of nations” in Proceedings of the American Society of International Law, 04 1911 (Vol. 5), pp. 340, 341Google Scholar; and Judge Hutcheson's “just opinion” in the Ryan Claim in Hackworth, Green H., Digest of International Law (Washington, D.C: U.S. Government Printing Office, 1940), Vol. 1, pp. 14–15Google Scholar. See also Professor Gormley's recent statement, “The moral quality of the verdict, based on the compelling moral force of international law, is in fact the major sanction possessed by international law.” ( Gormley, W. Paul, “The Status of the Awards of International Tribunals: Possible Avoidance Versus Legal Enforcement,” Howard Law Journal, Winter 1964 [Vol. 10, No. 1], p. 40Google Scholar.) Also see ibid., p. 59.

4 Falk, Richard A., The Role of Domestic Courts in the International Legal Order (Syracuse, N.Y: Syracuse University Press, 1964), p. 21 ffGoogle Scholar.

5 According to Stuyt, A. M., Survey of International Arbitrations 1794–1938 (The Hague: Martinus Nijhoff, 1939)CrossRefGoogle Scholar, almost fifteen percent of the arbitrations noted were not complied with. The number would be higher if settlements for less than the amount of the award were included. Hambro, Edvard I., L'Exécution des Sentences Internationales (Paris: Librairie du Recueil Sirey, 1936Google Scholar) reviews twenty cases in which compliance was not evident. Schachter, Oscar, “The Enforcement of International Judicial and Arbitral Decisions,” The American Journal of International Law, autumn 1960 (Vol. 54, No. 1), p. 2CrossRefGoogle Scholar, following Fontaine, H. La, “Histoire Sommaire et Chronologique des Arbitrages Internationaux,” Revue de Droit International et de Législation Comparée, 1902 (Vol. 4), pp. 349, 558, 622Google Scholar, and Lapradelle, A. De, “De l'exécution des décisions de la justice internationale,” Revue de Droit International, 1934 (Vol. 14), p. 225Google Scholar, sets the number of impugned awards considerably lower. It may be that the test of unqualified repudiation of an award improves the compliance record. A test which might give a more accurate picture of the impact of a defective enforcement system would be the ratio between voluntary total compliance and instances of settlement for less than the full award. The fact that a judgment or award is just a new point from which to bargain is, in itself, indicative of a defective enforcement system.

6 See Roche, John P. and Gordon, Milton M., “Can Morality Be Legislated,” The New York Times Magazine, 05 22, 1955, p. 10Google Scholar, reprinted in Carl A. Auerbach and others, The Legal Process: An Introduction to Decision-Making by Judicial, Legislative, Executive and Administrative Agencies (San Francisco: Chandler Publishing Co., 1961), pp. 311–317. See also Lasswell, Harold D. and Kaplan, Abraham, Power and Society: A Framework, for Political Inquiry (New Haven, Conn: Yale University Press, 1950), pp. 140–141Google Scholar.

7 Sloan, F. Blaine, “Enforcement of Arbitral Awards in International Agencies,” The Arbitration Journal, Fall 1948 (Vol. 3, No. 3, new series), p. 135Google Scholar.

8 The Corfu Channel Case (Assessment of the Amount of Compensation Due From the People's Republic of Albania to the United Kingdom of Great Britain and Northern Ireland), Judgment of December 15th, 1949: l.C.l. Reports 1949, pp. 244–265; and The Chamizal Case (Mexico v. United States), Reports of International Arbitral Awards, Vol. 11, p. 309.

9 Sloan, F. Blaine, “Comparative International and Municipal Law Sanctions,” Nebraska Law Review, 11 1947 (Vol. 27, No. 1), p. 7Google Scholar.

10 Cohen, Morris R., Law and the Social Order: Essays in Legal Philosophy (New York: Harcourt, Brace and Co., 1933)) p. 126Google Scholar.

11 Thus the following dictum and the outcome of the Northern Cameroons Case: “The Court must discharge the duty to which it has already called attention—the duty to safeguard the judicial function.” (Case Concerning the Northern Cameroons [Cameroon v. United Kingdom], Preliminary Objections, Judgment of 2 December 1963: I.C.J. Reports 1963, p. 38.) See also, Lauterpacht, Hersh, The Development of International Law by the International Court (London: Stevens & Sons Limited, 1958), p. 39Google Scholar.

12 Jenks, C. Wilfred, The Prospects of International Adjudication (London: Stevens & Sons Limited, 1964), p. 667Google Scholar.

13 Case of the Monetary Gold Removed from Rome in 1943 (Preliminary Question), Judgment of June 15th, 1954: I.C.J. Reports 1954, pp. 19–36; and Anglo-Iranian Oil Co. Case (Preliminary Objection), Judgment of July 22nd, 1952: I.C.J. Reports 1952, pp. 93–115.

14 Asylum Case (Colombia/Peru), Judgment of November 20th, 1950: I.C.J. Reports 1950, pp. 266–289; and Haya de la Torre Case (Colombia/Peru), Judgment of June 13th, 1951: I.C.J. Reports 1951, pp. 71–84.

15 Northeastern Boundary Dispute (United States v. Great Britain) in Moore, John Bassett, History and Digest of the International Arbitrations to Which the United States Has Been a Party (Washington, D.C: U.S. Government Printing Office, 1898), Vol. 1, pp. 65, 133Google Scholar.

16 Nottebohm Case (Second Phase), Judgment of April 6th, 1955: I.C.J. Reports 1955, pp. 4–27.

17 “The law tends to become… a ‘self-fulfilling prophecy.’” (Roche and Gordon in Auerbach and others, p. 314.)

18 A Cuban proposal at San Francisco would have made the Security Council an international enforcing agent ( Documents of the United Nations Conference on International Organization, San Francisco, 1945 [New York: United Nations Information Organization, 1945], Vol. 13, p. 507)Google Scholar. For reasons which are beyond the scope of this article, the proposed duty to enforce was reduced to a discretionary power. Under Article 94 (2) of the UN Charter, the Council “may, if it deems necessary, make recommendations or decide upon measures to be taken to give effect to the judgment.” The phase immediately after the indication of interim measures in the Anglo-Iranian Oil Co. Case is the only instance in which Article 94 (2) was invoked, and it throws no light on the implementation of this Article. In the future, one may anticipate that the veto power will vitiate the Council's enforcement role in almost all cases; perhaps the pending South West Africa Cases (Ethiopia v. South Africa; Liberia v. South Africa) will prove to be an exception. The possibility of an enforcement role for the General Assembly, exercising its “secondary responsibility” for keeping the peace, under the Uniting for Peace Resolution (General Assembly Resolution 377 [V], November 3, 1950) should not be ruled out. The current South West Africa Cases might reach the Assembly should the United States and the United Kingdom pursue their 1964 policy in the Council. Even assuming that Article 94 (2) or the Uniting for Peace Resolution were operative and were applied, the Security Council would still probably not be the enforcer but would delegate the enforcement to particular nation-states. See in this regard the caducous Articles 45–47 of the Charter.

19 A listing of potential international enforcers would require an exhaustive phase analysis of all the participants of the world social process from international organizations through states and on through a variety of nonofficial participants such as trade associations, pressure groups, etc. Especial attention would have to be paid to the aggregate base values at the disposal of these participants as well as to the base values of the noncomplying target state and the strategies which could be employed in whatever arena of enforcement were chosen.

20 On dédoublement fonctionnel, see fn. 23 below. The locus classicus on the necessity for a new approach to international sanctioning is Brierly, James L., “Sanctions in International Law” in The Basis of Obligation in International Law and Other Papers of the Late James Leslie Brierly, ed. Lauterpacht, Hersh and Waldock, C. H. M. (Oxford: Clarendon Press, 1958), p. 212Google Scholar. See also, Brierly, James L., “Sanctions,” Transactions of the Grotius Society, 1931 (London: Sweet and Maxwell, 1932), Vol. 17, p. 67Google Scholar, and compare with the more detailed statement of McDougal, Myres S., “The Impact of International Law upon National Law: A Policy-Oriented Perspective,” South Dakota Law Review, Spring 1959 (Vol. 4), pp. 25, 50–51Google Scholar.

21 See, for example, Articles 94 (2) and 48 (1) and (2) of the UN Charter; see also, Article 57 of the UN Charter and Article 5 (1) and (2) of the Agreement Between the United Nations and the International Civil Aviation Organization ( United Nations Treaty Series [hereinafter cited as UNTS], 1947 [Vol. 8, Treaty No. 11:45] [hereinafter cited as ICAO Agreement], pp. 324, 328)Google Scholar. For a discussion of the effect of the agreements with the specialized agencies, see the text below.

22 For the purposes of this article, the aims of both sanctioning and enforcement are identical: “the purpose of supporting the primary norms of a public order system.…” ( Lasswell, Harold D. and Arens, Richard, In Defense of Public Order: The Emerging Field of Sanction Law [New York: Columbia University Press, 1961], p. 14Google Scholar.)

23 The term was coined by Georges Scelle; see, e.g., Scelle, Georges, “Le Phénomène juridique du dédoublement fonctionnel” in Schätzel, Walter and Schlochauer, Hans-Jürgen (ed.), Rechtsfragen der Internationalen Organisation: Festschrift für Hans Wehberg (Frankfurt am Main: V. Klostermann, 1956), p. 324Google Scholar. A similar description of the functional dual role may be found in Kelsen, Hans, Principles of International Law (New York: Rinehart, 1952), pp. 21, 25Google Scholar.

24 See, for example, Friedmann, Wolfgang, The Changing Structure of International Law (New York: Columbia University Press, 1964), p. 148Google Scholar. It may be noted that Friedmann's fear of an unrestricted dédoublement fonctionnel is apparently based on the assumption that all dual-function acts taken by officials are automatically lawful. This idea can be gained from Scelle's description, but it is not necessarily so. “Self-help” is lawful, yet few would maintain that all acts which a party characterizes as self-help are lawful. The same analysis may be applied to dédoublement fonctionnel; account must be taken of both authority and control. For a careful analysis of this problem, see Gross, Leo, “States as Organs of International Law and the Problems of Auto-Interpretation” in Lipsky, George H. (ed.), Law and Politics in the World Community; Essays on Hans Kelsen's Pure Theory and Related Problems in International Law (Berkeley: University of California Press, 1953), p. 59Google Scholar.

25 The Inter-American Development Bank is not a specialized agency of the UN nor does it have links, at least formally, with the Organization of American States (OAS). Nevertheless, within the frame of this article, it does figure as an enforcer of the class of the IMF and the International Bank.

26 See Articles 5(5) and 15 of the Articles of Agreement of the International Monetary Fund (UNTS, 1947 [Vol. 2, Treaty No. 1:20(a)] [hereinafter cited as Fund Agreement], pp. 40, 56, 94–96); Articles 6 and 9 of the Articles of Agreement of the International Bank for Reconstruction and Development (UNTS, 1947 [Vol. 2, Treaty No. I:20(b)] [hereinafter cited as IBRD Agreement], pp. 135, 172, 186); and Articles 9 and 13 of the Agreement Establishing the Inter-American Development Bank (UNTS, 1961 [Vol. 389, Treaty No. 1:5593] [hereinafter cited as IDB Agreement], pp. 70, 120, 134).

27 Alexandrowicz, C. H., World Economic Agencies: Law and Practice (New York: Frederick A. Praeger, 1952), p. 187, fn. 39Google Scholar.

28 Article 87 of the Convention of the International Civil Aviation Organization (Chicago Convention) (UNTS, 1948 [Vol. 15, Treaty No. H:102], pp. 296, 354).

29 See, for example, Gorgé, Camille, Une Nouvelle Sanction du Droit International—Le Projet Busch (Lausanne: Payot, 1926), p. 45 ff.Google Scholar; and see Jenks, C. Wilfred, “Some Legal Aspects of the Financing of International Institutions,” Transactions of the Grotius Society, 1942 (London: Sweet and Maxwell, 1943), Vol. 28, p. 115Google Scholar.

30 Article 2 (1), IBRD Agreement, p. 136.

31 Article 1, IBRD Agreement, pp. 134–135.

32 Article 4 (10), IBRD Agreement, p. 158.

33 Article 1, IDB Agreement, pp. 72–73.

34 Article 1, Fund Agreement, pp. 40–41.

35 Article 2 (2), (3), and (5), IBRD Agreement, pp. 136–138.

36 IBRD Agreement, p. 142; and see Jenks, , Transactions of the Grotius Society, Vol. 28, p. 115Google Scholar, for an argument in favor of judgment liens and an analysis of immunity from a policy standpoint.

37 Article 2 (2–4), IDB Agreement, p. 42.

38 Article 3, Fund Agreement, p. 42.

39 Most of the bonds are held by private investors (Alexandrowicz, p. 204).

40 Article 9 (3) and (4), Fund Agreement, p. 74.

41 Article 7 (4), IBRD Agreement, p. 180.

42 Article 11 (3) and (4), IDB Agreement, pp. 76–78. Article 11 (4) introduces a new term in regard to immunity and it constitutes an innovation in customary international law: “Property and assets of the Bank… shall be considered public international property and shall be immune…”

43 For an analysis of the rationale and a survey of practice of international organizational immunities, see Jenks, C. Wilfred, International Immunities (London: Stevens & Sons Limited, 1961)Google Scholar.

44 Article 5 (2) and (3), IBRD Agreement, pp. 160–162.

45 Article 6 (2), IBRD Agreement, p. 172.

46 Article 9 (a) and (b), IBRD Agreement, p. 186.

47 For a survey of agencies enjoying the privilege of requesting advisory opinions and the special problems involved, see Rosenne, Shabtai, The International Court of Justice: An Essay in Political and Legal Theory (Leyden: A. W. Sythoff, 1957), pp. 449–452Google Scholar.

48 Article 9 (c), IBRD Agreement, p. 186. In the Inter-American Development Bank die umpire is appointed by the Secretary-General of the OAS, according to Article 13 (2) of die IDB Agreement. Of the three organizations under examination, it appears that only the Inter-American Bank has yet had an arbitration; an appointment scheme different from diat envisaged in die Agreement was fashioned.

49 The responses of the personnel of the economic agencies interviewed will be summarized briefly as the statement or opinion of “the Agency.” Arguably, this could be justified by an institutional theory which identifies the ultimate actors as elite and subelite decision makers. If one overlooks this, it is felt that this approach is justified by the content of the responses. With the exception of the Inter-American Bank, the responses were based on a restrictive construction of the relevant constitutive agreement, with priority given to that agreement in case of a conflict with the UN Charter or the special agreements.

50 For the parallel provisions in the World Bank Agreement, see Article 6 (4) (d), IBRD Agreement, p. 176.

51 Report of the Preparatory Commission of the United Nations, Chapter III, section 5(19), in Commentary on the Report of the Preparatory Commission of the United Nations With Text of the Report as presented to the General Assembly, London, 10th January 1946 (Cmd. 6734) (London: His Majesty's Stationery Office, 1946), p. 63Google Scholar.

52 ICAO Agreement, pp. 324, 330. For a comparison of the International Bank and Fund special agreements with that of ILO, with special emphasis on priority of treaty obligations, see Aufricht, Hans, “Supersession of Treaties in International Law,” Cornell Law Quarterly, Summer 1952 (Vol. 37, No. 2), p. 691Google Scholar.

53 Article 6 (1), Agreement Between the United Nations and the International Monetary Fund (UNTS, 1948 [Vol. 16, Treaty No. II:108], pp. 328, 332).

54 But see Aufricht, , Cornell Law Quarterly, Vol. 37, No. 2, pp. 693–694Google Scholar, who equates the obligations of the different agencies if “recommendations” as opposed to “decisions” are made.

55 Thus, the Collective Measures Committee reported that under their special agreements, the Fund and the Bank “retain[ed] the right of final decisions for themselves, even though their member nations would be bound by such decisions.” (UN Document A/1891, p. 19.)

56 See UN Document A/449 for a summary of the debates and the positions of the three groups within the Joint Committee. The record of the debates may be found in General Assembly Official Records… Joint Committee of the Second and Third Committees (2nd session), pp. 17–33. See also Sharp, Walter R., “The Specialized Agencies and the United Nations: Progress Report I,” International Organization, 09 1947 (Vol. 1, No. 3), pp. 460, 467CrossRefGoogle Scholar; and Sharp, Walter R., “The Specialized Agencies and the United Nations: Progress Report II,” International Organization, 06 1948 (Vol. 2, No. 2), pp. 247, 248CrossRefGoogle Scholar.

57 See in this regard, Article 17, Fund Agreement, p. 98.

58 Article 6 (1) of the Agreement refers to Articles 41 and 42 of the Charter, from whose operation Article 94 may, under certain circumstances, be separated. Nevertheless, it is most likely that enforcement applications to the Security Council will be based on both Article 39 and Article 94. This was done in a somewhat confused fashion in the United Kingdom's application to die Security Council after the indication of interim measures in the Anglo-Iranian Oil Co. Case. See Security Council Official Records (6th Year), Supplement for October, November, and December 1951, pp. 1–2.

59 Within the confines of this article it is impossible to develop a comprehensive, systematic approach to enforcement by the economic agencies. The reader is directed to an exciting and exploratory literature which has been written on this subject. One model which might be especially applicable to the agencies' role is that of Singer, J. David, “Inter-Nation Influence: A Formal Model,” The American Political Science Review, 06 1963 (Vol. 57, No. 2), p. 420CrossRefGoogle Scholar, though Professor Singer does not, I believe, give adequate weight to the impact of authority on state behavior.

60 In the Monetary Gold Case the United Kingdom, in collaboration with the United States and France, attempted to “attach” approximately 2,500 kilograms of Albanian monetary gold, which was in the possession of the allies, in satisfaction of the Corfu Channel judgment, which Albania had repudiated. Drafting errors in the Washington Statement and restrictive interpretation by the International Court frustrated the plan.

61 The Fund's continuing and pervasive concern with waiving immunity appears to have conditioned almost all of its answers. Yet none of the examples presented thus far involved waiving immunity in the ordinary meaning of the term.