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Bilateral Investment Treaties and Civil Strife: The AAPL/Sri Lanka Arbitration

Published online by Cambridge University Press:  21 May 2009

Stephen C. Vasciannie
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Extract

The publication of the arbitral award in the Asian Agricultural Products Ltd. (AAPL) v. Republic of Sri Lanka case serves as a forceful reminder that long after individual confrontations in the Sri Lankan civil war are removed from the headlines, the personal, legal and financial consequences of mat country's tragedy shall continue to bedevil the society. In this case, AAPL, formerly a foreign investor in Sri Lanka, claimed damages against the Government for destruction of property arising out of military operations undertaken by official security forces. The Tribunal, by a majority, found in favour of the claimant, but did so only after a fairly lengthy review both of canons of treaty interpretation in international law and of principles of State responsibility for actions undertaken during civil unrest More specifically, because the proceedings were instituted under the United Kingdom/Sri Lanka Bilateral Investment Treaty of 1980, the primary focus of the Tribunal's attention concerned the applicability of particular provisions of mat treaty to circumstances of military and paramilitary activity; at the same time, the military background to the case also prompted the Tribunal to give broad consideration to the standard of diligence owed by government forces to foreign investors under general international law.

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Netherlands International Law Review , Volume 39 , Issue 3 , December 1992 , pp. 332 - 354
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Copyright © T.M.C. Asser Press 1992

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References

1. In the Matter of Arbitration Between Asian Agricultural Products Limited (AAPL) v. Republic of Sri Lanka, Case No. ARB/87/3,30 ILM (1991) p. 580.Google Scholar

2. The majority comprised Dr. Ahmed Sadek El-Kosheri and Professor Berthold Goldman. Dr. S.K.B. Asante delivered a dissenting opinion.

3. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Sri Lanka for the Promotion and Protection of Investments, February 13, 1980 (sometimes hereinafter referred to as ‘the UK/Sri Lanka Bilateral Investment Treaty’ or as ‘the Treaty’). For the text, see ICSID, Investment Laws of the World (ILW): Investment Promotion and Protection Treaties (1980) p. 1.Google Scholar

4. Convention on the Settlement of Investment Disputes between States and Nationals of Other States (March 18,1965), 575 UNTS 159.

5. Writing as of July 24,1989, Peters noted that approximately 320 bilateral treaties, among 105 States, were concluded within the last three decades; of these, 133 treaties, involving 75 States, were concluded within the last decade: P. Peters, ‘The Transnational Corporations Code of Conduct and Bilateral Investment Treaties’ (Report to the United Nations Symposium on me Outstanding Issues in the United Nations Code of Conduct on Transnational Corporations, Peace Palace, The Hague, September 15–16, 1989). As of December 1990, the UK had entered into 35 bilateral investment treaties with developing countries or countries in Eastern and Central Europe: list issued by the Commercial Management and Exports Department of the Foreign and Commonwealth Office of the UK Government, reprinted in Marston, G., ed., ‘United Kingdom Materials in International Law 1990’, 61 BYIL (1990) p. 463 at p. 597;Google Scholar as of December 1991, the USA had signed 16 such treaties: US Policy on Foreign Investment, Statement Released by the White House, Office of the Press Secretary, Washington DC, quoted in US Department of State, Bureau of Public Affairs, Dispatch, Vol 3, No. l. p. 1 (01 6, 1992).Google Scholar

6. From the growing literature, see generally, Mann, F.A., ‘British Treaties for die Promotion and Protection of Investment’, 52 BYIL (1982) p. 241;Google ScholarBergman, M., ‘Bilateral Investment Protection Treaties’, NYUJ Int L & Pol. (1983) p. 1;Google ScholarDenza, E. and Brooks, S., ‘Investment Protection Treaties: United Kingdom Experience’, 36 ICLQ (1987) p. 908;CrossRefGoogle ScholarSalacuse, J., ‘BIT by BIT: The Growth of Bilateral Investment Treaties and Their Impact on Foreign Investment m Developing Countries’, 24 Int. L. (1990) p. 655;Google ScholarAkinsanya, A., ‘International Protection of Direct Foreign Investments in the Third World’, 36 ICLQ (1987) p. 58;CrossRefGoogle ScholarSomarajan, M., ‘State Responsibility and Bilateral Investment Treaties’, 20 J. World Trade L. (1986) p. 79;Google ScholarGudgeon, K. Scott, ‘United States Bilateral Investment Treaties: Comments on the Origin, Purposes and General Treatment Standards’, 4 Int. Tax & Bus. L. (1986) p. 105;Google ScholarSachs, W., ‘The “New” US Bilateral Investment Treaties’, 2 Int Tax & Bus. L. (1984) p. 192;Google ScholarRobin, P. McKinstry, ‘The BIT Won't Bite: The American Bilateral Investment Treaty Program’, 33 Am. UL Rev. (1984) p. 931;Google ScholarVandevelde, K., ‘The Bilateral Investment Treaty Program of the United States’, 21 Cornell HJ (1988) p. 201;Google ScholarKunzer, K., ‘Developing a Model Bilateral Investment Treaty’, 15 L & Pol'y in Jut Bus. (1983) p. 273;Google Scholar United Nations Centre on Transnational Corporations (UNCTC), Bilateral Investment Treaties (1988).

7. In its Memorial, dated April 13.1988, the claimant indicated that AAPL had a 50% interest in die Serendib Farm; this figure was lowered to 48.2 % in the claimant's conclusions before the Tribunal on April 19,1989: Case No. ARB/87/3,30 ILM (1991) p. 580 at paras. 90–91.Google Scholar

8. Ibid., para 85.

9. Ibid., especially at paras. 9, 28 and 79–80.

10. Ibid., especially at paras. 8, 34 and 82–83.

11. Ibid., para. 85.

12. Ibid.

13. Ibid.

14. See further infra section 3.2.3.2.

15. Art 8(1) reads as follows: ‘Each Contracting Party hereby consents to submit to die International Centre for the Settlement of Investment Disputes far settlement by conciliation or arbitration under [the ICSID Convention] any legal disputes arising between that Contracting Party and national or company of the other Contracting Party concerning any investment of die latter in the territory of the former.’

16. Case No. ARB/87/3,30 ELM (1991) p. 580 at paras. 18–24.Google Scholar

17. Ibid., paras. 7 and 9.

18. Ibid., para. 20. See also die Dissenting Opinion of Asante, ibid., p. 631.

19. Dissenting Opinion of Asante, ibid., pp. 631–632.

20. Of course, the approach taken by the majority should not be confused with the well-established doctrine of forum prorogatum under which the ICJ and its predecessor court, have occasionally exercised jurisdictionincontentiouscases. In essence, where forum prorogatum applies, the Court has found jurisdiction with respect to a party which, through its conduct, has indicated consent to the Court's jurisdiction. In the AAPL case, the conduct of the parties was directed not to jurisdiction but to choice of law issues. On forum prorogatum generally, see Corfu Channel Case (Preliminary Objection) (UK v. Albania), ICJ Rep. (1948) p. 15 at pp. 27–28;Google ScholarMavrommatis Jerusalem Concessions (Merits) (Greece v. UK), PCIJ Ser. A (1925) No. 5, pp. 27–28;Google ScholarRights of Minorities in Polish Upper Silesia case, ibid., (1928) No. 12, pp. 24–25; Chorzow Factory Case (Indemnity) (Merits) (Germany v. Poland), ibid., (1928) No. 17, p. 37; Rosenne, Shabtai, The Law and Practice of the International Court, 2nd edn. (1985) pp. 283–284, 322, 344–363.Google Scholar

21. To quote from the majority judgement:

‘[T]he prior choice-of-law referred to in the first part of Article 42 of the ICSID Convention could hardly be envisaged in the context of an arbitration case directly instituted in implementation of an international obligation undertaken between two States in favour of their respective nationals investing within the territory of the other Contracting State.’ (Ibid., para. 19).

By its generality, this pronouncement suggests that the majority might expect its approach to be applicable in future cases in which ICSID tribunals derive their jurisdiction from the consent provision in a bilateral investment treaty. For the reasons canvassed in the text, this approach should be eschewed.

22. For purposes of treaty interpretation, Art 31(1) of the Vienna Convention on the Law of Treaties mandates reliance on the ordinary meaning to be given to the terms of a treaty in their context and in the light of the object and purpose of the treaty. There is evidence that the ‘plain meaning’ approach to treaty interpretation is also required by customary international law: see, e.g., Report of the International Law Commission to the General Assembly on the Work of its Eighteenth Session, 2 ILC Yearbook (1966) pp. 217–223;Google ScholarCompetence of the General Assembly for the Admission of a State to the United Nations, Advisory Opinion, ICJ Rep. (1950) p. 4 at p. 8.Google Scholar

23. This is sometimes done in the face of developing country resistance based on notions of national sovereignty and the Calvo doctrine: see generally, Calvo, C., Le Droit International Thiorique et Practique (1896);Google ScholarShea, D.R., The Calvo Clause (1955);Google ScholarBarcelona Traction, Light and Power Company (Belgium v. Spain), Separate Opinion of Judge Ammoun, ICJ Rep. (1970) p. 3 at pp. 291–295;Google ScholarSchrijver, N.J., ‘The Calvo Doctrine and the Draft United Nations Code of Conduct on Transnational Corporations’ (Report to the UN Symposium on the Outstanding Issues in the United Nations Code of Conduct on Transnational Corporations, Peace Palace, The Hague, September 15–16, 1989).Google Scholar The desire to insulate foreign investors from certain aspects of local law constitutes one of die main motivating forces for developed country support for recent bilateral investment treaties: see, e.g., Statement issued by die Press Office of the Foreign and Commonwealth Office of the UK Government, reprinted in Marston, , loc. cit. n. 5, at p. 620;Google ScholarSalacuse, , loc. cit. n. 6, p. 655 at p. 659.Google Scholar Choice of law clauses which invoke international law are also a fairly regular feature in natural resource agreements between developing country governments and transnational corporations: for an interesting example, in which the governing law is stated to be ‘the law of Ghana and such rules of International Law as may be applicable’, see the Amended Master Agreement for the Valco River Project in Ghana (cited by Brown, R., ‘Contract Stability in International Petroleum Operations’, The CTC Reporter (Spring 1990) No. 29, p. 56 at p. 59.Google Scholar

24. A general discussion concerning such rules falls beyond the scope of this article; from the voluminous literature on State responsibility, see, for instance, ‘Draft Articles on State Responsibility (Part 1)’ (Provisionally adopted by the ILC at its 1642nd Meeting on 25 July 1980), 2 ILC Yearbook (1980) p. 30;Google ScholarAmerasinghe, C.F., State Responsibility for Injury to Aliens (1967);Google ScholarBrownlie, J., System of the Law of Nations: State Responsibility, Part I (1983);Google ScholarEagleton, C., The Responsibility of States in International Law (1928);Google ScholarAmador, F.V. García, Sohn, L.B. and Baxter, R.R., Recent Codification of the Law of State Responsibility for Injury to Aliens (1974);Google Scholarde Aréchaga, E. Jiménez, ‘International Responsibility’, in Sørensen, M., ed., Manual of Public International Law (1968);Google ScholarLillich, R.B., ed., The International Law of State Responsibility for Injuries to Aliens (1983);Google ScholarMeron, T., ‘International Responsibility of States for the Unauthorized Acts of their Officials’, 33 BYIL (1957) p. 85;Google Scholar for a substantial bibliography, see UN Secretariat, State Responsibility for Internationally Wrongful Acts (Part I), Principal Works cited in the Reports of Mr. Ago (Doc. A/CN.4/318/ADD.8), reprinted in 2 ILC Yearbook (1980) p. 71.Google Scholar

25. Case No. ARB/87/3,30 ILM (1991) p. 580, especially at paras. 7(i), 9 and 26.Google Scholar

26. Ibid., paras. 7(ii), 9,27 and 28.

27. Ibid., paras. 7(iii) and 9.

28. From the numerous instances, see, e.g., Art 3(1), Agreement between the Government of the Kingdom of Denmark and the Government of the Republic of Korea concerning the Encouragement and the Reciprocal Protection of Investments (June 2,1988), ICSID, ILW: Investment Promotion and Protection Treaties (1988) p. 9;Google Scholar Art 3(1), Agreement between the Government of the Kingdom of the Netherlands and the Government of the People's Republic of Bulgaria on Mutual Encouragement and Protection of Investments (March 8, 1988), ibid. (1988-a) p. 1; Art 3(2), Agreement between the Kingdom of Norway and the Government of Malaysia regarding the Mutual Protection of Investments (November 6,1984), ibid. (1984-d) p. 7; Art 4, Agreement between St Vincent and the Grenadines and the Federal Republic of Germany concerning the Encouragement and Reciprocal Protection of Investments (March 25, 1986), ibid. (1986-b) p. 3; Art 4, Accord entre le Gouvernement de la République Française et le Gouvernement de la République Populaire du Bangladesh sur l'Encouragement et la Protection Réciproques des Investissement (‘a' une protection et d'une sécurité pleines et entières’) (September 10,1985), ibid. (1985-a) p. 19. The language of ‘full protection and security’ is also to be found in the overwhelming majority of bilateral investment treaties ratified by the United Kingdom and Sri Lanka, respectively: see, e.g., Art 2(2), Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Co-operative Republic of Guyana for the Promotion and Reciprocal Protection of Investments (October 27,1989), ibid. (1989) p. 47; Art 2(2), Agreement between the Government of Great Britain and Northern Ireland and the Union of Soviet Socialist Republics for the Promotion and Reciprocal Protection of Investments (April 6,1989), ibid. p. 33; Agreement between the United Kingdom of Great Britain and Northern Ireland and the Government of the Tunisian Republic for the Promotion and Reciprocal Protection of Investments (March 14, 1989), ibid. (1989) p. 11; Art 3(2), Agreement between the Government of the Democratic Socialist Republic of Sri Lanka and the Government of the Kingdom of Norway for the Promotion and Protection of Investments (June 13,1985), ibid. (1985-a) p. 1; Art 4(1), Agreement between the Kingdom of the Netherlands and the Democratic Republic of Sri Lanka for the Promotion of Investments (April 26,1984), Ibid. (1984-a)p. 1.

29. For a reference to this argument in the judgement of the majority, see Case No. ARB/87/3, 30 JLM (1991) p. 580 at para. 26(A).Google Scholar

30. See also ibid., para. 26(B) and (C).

31. For similar reasoning in the municipal law context, see Lord Diplock's judgement in the English House of Lards' decision, Amin Rasheed Shipping Corp. v. Kuwait Insurance Co., which reads in relevant part:

‘[C]ontracts are incapable of existing in a legal vacuum. They are mere pieces of paper devoid of all legal effect unless they were made by reference to some system of private law which defines the obligations assumed by the parties to the contract by the use of particular forms of words and prescribes the remedies enforceable in a court of justice for failure to perform any of these obligations.’ ([1983] All ER 884).

32. Cf., US practice, under which bilateral investment treaties usually contain a more direct nexus with international law; for instance, the US treaties with Morocco and Turkey each indicate that foreign investments ‘shall enjoy full protection and security, in a manner consistent with international law’: Art II(3), Treaty between the United States of America and the Kingdom of Morocco concerning the Encouragement and Reciprocal Protection of Investments (July 22,1985), ICSID, ILW: Investment Promotion and Protection Treaties (1985) p. 39;Google Scholar Art II(3), Treaty between the United States of America and the Republic of Turkey concerning the Reciprocal Encouragement and Protection of Investments (December 3,1985), ibid. p. 53. Others, such as the US treaties with Bangladesh and Grenada, respectively, expressly incorporate both national and international law standards: Art II(3), Treaty between the United States of America and the People's Republic of Bangladesh concerning the Reciprocal Encouragement and Protection of Investment (March 12,1986), ibid. (1986) p. 21; Art II(3), Treaty between the United States of America and Grenada concerning the Reciprocal Encouragement and Protection of Investment (May 2,1986), ibid. (1986-a) p. 7.

33. In general the recurrence of a particular provision in the bilateral treaties of different States may suggest a desire on the part of the States concerned to derogate from the pre-existing law. At the same time, however, States may sanction the incorporation of particular provisions into their bilateral treaties precisely because they believe such provisions are required by the prevailing law. On the knotty problem of determining opinio juris in these circumstances, see, for instance, Baxter, R.R., ‘Treaties and Custom’, 129 RCADI (1970-I) pp.27, 80–91;Google Scholar see also The Lotus case, PCIJ, Ser. A (1927) No. 10, p. 27Google Scholar and ibid., Ser. C. No. 13, Vol. ii, p. 78 (Pleadings of the French Republic); Case of the Mavrommatis Palestine Concessions Jurisdiction (Greece v. Turkey) (1924), ibid., Ser. A, No. 2, p. 35; Kopelmanas, L., ‘Custom as a Means of the Creation of International Law’, 18 BYJL (1937) p. 136;Google ScholarLauterpacht, H., The Development of International Law by the International Court (1958) pp. 377–380.Google Scholar

34. For traditional statements of Western support for the ‘international minimum standard’ of State responsibility, see, e.g., American Law Institute, Restatement of the Law (Second), Foreign Relations Law of the United States (1965) pt. IV, pp. 499, 501,Google Scholar quoted in Whiteman, M.M, Digest of International Law (1963–1973) Vol. 8, p. 697;Google Scholar UK response to the Panamanian Draft Declaration of Rights and Duties of States submitted to the UN General Assembly in 1947, quoted ibid., p. 699. The American Law Institute's Restatement of the Law (Third) retains the concept of the international minimum standard for human rights and certain personal and economic rights: Foreign Relations Law of the United States(1987)Sections 711 and 712 (and notes thereto). While there may be some fluidity in the position of the developing countries, the majority view among these countries probably still favours the notion that, de lege lata, responsibility arises only upon failure by the State to ensure 71‘ national treatment’ for foreigners: see, e.g., Charter of Economic Rights and Duties of States, GA Res. 3281 (XXIX), 12 December 1974, Art 2(2), 14 ILM (1975) p. 251; Declaration on the Establishment of a New International Economic Order, GA Res. 3201 (S-IV), 1 May 1974, para. 4, 13 ILM (1974) p. 715; Barcelona Traction, Light and Power Company Limited (Belgium v. Spain), Separate Opinion of Judge Padilla Nervo, ICJ Rep. (1970) p. 3 at pp. 253–254.Google Scholar In the prolonged UN negotiations concerning a Code of Conduct on Transnational Corporations, the question of what constitutes the prevailing standard of treatment for foreigners under the general law has remained the source of considerable disagreement between developed market economies, on the one hand, and developing countries and the former centrally planned economies of Eastern and Central Europe, on the other: UNCTC, The United Nations Code of Conduct on Transnational Corporations (1986) (UNCTC Current Studies, Series A, No. 4). For the argument that the large number of bilateral investment treaties may provide evidence supporting Western perceptions of customary international law in this area, see Mann, , loc. cit. n. 6, at pp. 249–250;Google ScholarDolzer, R., ‘New Foundations of the Law of Expropriation of Alien Property’, 75 AJIL (1981) p. 553 at pp. 565–566.CrossRefGoogle ScholarSee also Peters, P., Schrijver, N.J. and de Waart, P.J.I.M., ‘Foreign Investment and State Practice’, in Hossain, K. and Chowdhury, S.R., eds., Permanent Sovereignty over Natural Resources in International Law: Principle and Practice (1984) LC 84–16076–2507;Google ScholarVoss, J., ‘The Protection and Promotion of European Private Investment in Developing Countries — An Approach Towards a Concept for a European Policy on Foreign Investment’, 18 CMLR (1981) p. 363 at pp. 369–374;Google Scholar cf., Amerasinghe, C.F., ‘Issues of Compensation for die Taking of Alien Property in the Light of Recent Cases and Practice’, 41 ICLQ (1992) p. 22 at p. 30;CrossRefGoogle ScholarSornarajah, , loc. cit. n. 6, p. 79 at pp. 80–81.Google Scholar

35. See, e.g., Denza, and Brooks, , loc. cit. n. 6, p. 908 at pp. 909–912;Google ScholarGudgeon, , loc. cit. n. 6, p. 105 at pp. 110–112.Google Scholar

36. Dissenting Opinion of Asante, , 30 ILM (1991) p. 580 at p. 639.Google Scholar In supporting this contention, Asante noted that the official commentary on Art 1 of the OECD Draft Commentary on the Protection of Foreign Property (2 ILM (1963) p. 241)Google Scholar unequivocally stated that the phrase ‘fair and equitable treatment’, as traditionally used in bilateral agreements indicates ‘the minimun international standard which forms part of customary international law’ (ibid., p. 244). There is no evidence that any OECD States formally opposed this interpretation, but as the OECD Draft Convention never actually entered into force, the official commentary may carry only United persuasive force. The idea that ‘fair and equitable treatment’ encapsulates the international minimum standard also received support, in 1979, from the Swiss Foreign Office:

‘On se réfère ainsi au principe classique du droit des gens selon lequel les Êtats doivent mettre les érangers se trouvant sur leur territoire et leur biens au bénéfice du “standard minimum” international c'est-à-dire leur accorder un minimum de droits personnels, procéduraux et économiques.’ (ASDI (1980) p. 178; quoted by Mann, , loc. cit. n. 6 at p. 244).Google Scholar

Recently, the UNCTC has also suggested that the international minimum standard is one of the ‘firm ingredients’ of fair and equitable treatment: UNCTC, op. cit n. 6, p. 42. Mann takes a different view, arguing that ‘fair and equitable treatment’ is to be understood and applied independently of any standard which is defined by other words (such as the ‘minimum standard’). He does not suggest however, that ‘fair and equitable treatment’ amounts to strict liability: ibid.

37. UN RIAA, Vol. X, p. 499.Google Scholar

38. Case No. ARB/87/3,30 ILM (1991) p. 580 at para. 48.Google Scholar

39. In Sambiaggio, Umpire Ralston found that, in their trilateral relations, Venezuela and Italy had not agreed that Venezuela would be liable to Italian nationals for damages resulting from acts of revolutionaries operating in Venezuelan territory. Art 4 of a treaty between both States, dated June 19,1861, had stipulated that citizens of each State should enjoy in the territory of the other ‘the fullest measure of protection and security of person and property, and [should] have in this respect the same rights and privileges accorded to nationals…’ Contrary to the impression engendered in the AAPL judgement, neither the protagonists in Sambiaggio nor Umpire Ralston expressly devoted attention to the proposition that ‘the fullest protection and security' is synonymous with strict liability or a guarantee of protection in all circumstances’. Nevertheless, given that Umpire Ralston denied the Italian claim for compensation for losses suffered, notwithstanding me standard of protection specified in Article 4, there is reason to conclude that Sambiaggio is inconsistent with the strict liability theory.

40. ICJ Rep. (1989) p. 15.Google Scholar

41. For the text of Art V(l), see ibid., p. 63.

42. This analysis is at variance with the position taken by the Tribunal as a whole. In particular, the majority, with Arbitrator Asante's concurrence, suggested that the expression ‘most constant protection and security’ represents ‘stronger wording’ than ‘full protection and security’ (30 ILM (1991) p. 580 at pp. 599 and 638)Google Scholar. However, as the Tribunal gave no reason for departing from the plain meaning of the expression, its position here seems somewhat tenuous.

43. Supra, section 3.2.1.

44. For the Court's discussion, see especially ICJ Rep. (1989) p. 15 at pp. 63–67.Google Scholar On the facts, the Court found that there was no violation of Art V(l). It stated unequivocally, however, that ‘the full protection and security required by international law’ means, in short, that the protection and security provided ‘must conform to the minimum international standard’: ibid., p. 66.

45. Case No. ARB/87/3, 30 ILM (1991) p. 580 at para. 27.Google Scholar

46. See, e.g., Art 4(1), Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People's Republic of China concerning the Promotion and Reciprocal Protection of Investments (May 15, 1986), ICSID, ILW: Investment Promotion and Protection Treaties (1986-a) p. 21;Google Scholar Art 4(1), Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Bolivia for the Promotion and Protection of Investments (May 24,1988), ibid., p. 11.

47. The text of Art. 4(2) reads:

‘Without prejudice to paragraph (1) of this Article, nationals and companies of one Contracting Party who in any of the situations referred to in that paragraph [viz., war, armed conflict, revolution, insurrection or riot] suffer losses in the territory of the other Contracting Party resulting from (a) requisitioning of their property by its forces or authorities, or (b) destruction of their property by its forces or authorities which was not caused in combat action or was not required by the necessity of the situation, shall be accorded restitution or adequate compensation. Resulting payments shall be freely transferable.’

48. Case No. ARB/87/3,30 ELM (1991) p. 580 at paras. 59 and 60.Google Scholar

49. Ibid., paras. 61–64.

50. Ibid., para. 61.

51. In this regard, reference could possibly have been made to municipal law cases which seek to distinguish ‘combat’ from other forms of activity. With respect to the USA, see, for instance, US v. Marks, CA Hawaii, 187 F. 2d 724, 727, 728 (1951); Jefferson v. US, DC Md., 74 F. Supp. 209, 211 (1947); Skeels v. US, DC La., 72 F. Supp. 372, 374 (1947); Johnson v. US, CA Wash., 170 F. 2d 767, 769, 770 (1948).

52. [1946] 2 All ER 241.

53. Case ARB/87/3,30 ILM (1991) p. 580 at p. 640.Google Scholar In Adams v. Naylor, a child, playing in the area of a minefield prepared by military authorities during the Second World War, was killed when he accidentally triggered a mine. The case before the House of Lards turned entirely an whether the child's death (and the serious injury to a companion) resulted from combat activities. The House of Lords held unanimously that, at the time of the explosion, the mine was being used for combat ac-tivities.

54. Art 38(l)(d), Statute of the ICJ.

55. Supra, section 2.

56. All cited by Cheng, Bin, General Principles of Law as Applied by International Courts and Tribunals (1953) pp. 305–306.Google Scholar

57. Case ARB/87/3,30 ILM (1991) p. 580 at p. 617.Google Scholar

58. For authoritative discussions, see, for instance, Prosser, W.L., ‘Res Ipsa Loquitur in California’, 37 Cal. LR (1949) p. 183;Google ScholarGriffith, L.E. and Griffith, B.E., ‘The Doctrine of Res Ipsa Loquitur — Old Solutions for New Problems’, 48 Miss. LJ (1977) p. 259;Google ScholarLewis, T. Ellis, ‘A Ramble with Res Ipsa Loquitur’, 11 Cambridge LJ (1951) p. 74;Google ScholarO'Connell, D.P., ‘Res Ipsa Loquitur: The Australian Experience’, 14 Cambridge LJ (1954) p. 118;Google ScholarAtivan, P.S., ‘Res Ipsa Loquitur in England and Australia’, 35 Mod. L Rev. (1972) p. 337.Google Scholar

59. ICJ Rep. (1949) p. 4.Google Scholar

60. Ibid., p. 18.

61. Case No. ARB87/3,30 ILM (1991) p. 580, especially at paras. 85 and 89.Google Scholar

62. Ibid., at paras. 65–70.

63. On this point, see also the Dissenting Opinion of Asante, ibid., p. 644.

64. The structure of the majority judgement itself acknowledges mis distinction, for the majority first analyzes issues of liability before proceeding to the question of compensation. Of course, one could argue that, since the establishment of liability is the sine qua non for the exercise of the right to receive compensation, the draftsperson responsible for Art 4(1) assumed that mfn treatment with respect to compensation would implicitly encompass mfn treatment as to issues of liability. This may or may not be the case; the point is that, by its silence on such considerations, the majority judgement unjustifiably leaves the question open to debate.

65. Case No. ARB/87/3,30 ILM (1991) p. 580 at para. 50.Google Scholar

66. Ibid., paras. 67,69 and 70.

67. This principle of interpretation is encapsulated in the Grotian maxim, ‘Generalia specialibus nan derogant’ (De iure belli ac pacis. Lib. II, Cap., XXIX). See also Harazti, G., Some Fundamental Problems of the Law of Treaties (1973);Google ScholarCompetence of the General Assembly for the Admission of a State to the United Nations, ICJ Rep. (1948) p. 57 at p. 64;Google ScholarCase Concerning the Payment of Various Serbian Loans Issued in France, PCIJ Ser. A (1929) No. 20, p. 30;Google ScholarAmbatielos Case (Greece v. UK), Dissenting Opinion of Judge Hsu Mo, ICJ Rep. (1952) p. 28 at pp. 87–88;Google Scholaribid., Dissenting Opinion of Klaestad, Judge, p. 82;Google Scholaribid., Dissenting Opinion of McNair, Judge, p. 44;Google ScholarAkehurst, M., ‘The Hieracny of Sources of International Law’, 47 BYTJL (1974–1975) p. 273.Google Scholar

68. Case No. ARB/87/3,30 ILM (1991) p. 580 at pp. 635–637.Google Scholar

69. Brownlie, I., Principles of Public International Law, 3rd edn. (1979) and op. cit n. 24, Chap. XX.Google Scholar

70. Case No. ARB/87/3,30 JLM (1991) p. 580, especially at paras. 76 and 77.Google Scholar

71. Ibid., pp. 646–649.

72. McNair, A.D., International Law Opinions (1956) Vol II p. 245.Google Scholar

73. Case No. ARB/87/3,30 ILM (1991) p. 580 at para. 85.Google Scholar

74. IWA, p.652.

75. Ibid., especially para. 85.

76. For a general discussion, see Strauss, M.,‘Causation as an Element of State Responsibility’, 16 L. & Pol'y in Int. Bus. (1984) p. 893.Google Scholar

77. 30 ILM (1991) p. 577;Google Scholar see also the note by Asiedu-Akrofi, D. in 86 AJIL (1992) p. 371.Google Scholar