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Can Foreign States be Declared Bankrupt? The Case of Zaire*

Published online by Cambridge University Press:  21 May 2009

G.W. Maas Geesteranus
G.W. Maas Geesteranus
Affiliation:
Panel member of the Asser College Europe, The Hague/Zagreb; Member of the Permanent Court of Arbitration; former Legal Adviser, Ministry of Foreign Affairs, The Hague.
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Extract

‘Error is the mark of the higher organisms’. This statement struck me again when, composing myself to the honourable and pleasant task of preparing a contribution to the Liber Amicorum for my learned friend Bert Voskuil, I reconsidered ‘the Case of Zaire’, a case which raised the question whether and to what extent a judicial error was committed by the Dutch court that declared a foreign State bankrupt. If the judgment has to be considered an error of law, that court certainly qualified as a ‘higher organism’.

Let us first look at the facts of the case.

Type
Research Article
Information
Netherlands International Law Review , Volume 39 , Special Issue S1: Law and Reality , October 1992 , pp. 215 - 226
Copyright
Copyright © T.M.C. Asser Press 1991

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References

1. The statement is from the pen of the English mathematician and philosopher A.N. Whitehead (1861–1947). It runs in full: ‘In fact, error is the mark of the higher organisms, and is the schoolmaster by whose agency is upward evolution.’

2. Scbultsz, J.C., ‘Une affaire récente: la faillite du Zaire devant les tribunaux néerlandais’, in L'immunité d exécution de I'Etat étranger (Cahiers du CEDIN No. 4, Paris 1990), p. 83 et seq.Google Scholar

3. van Hof, J.J. et al. , ‘De faillietverklaring van Zaire’ [The Adjudication in Bankruptcy of Zaire], NJB (1988) pp. 636–637.Google Scholar

4. Bamhoorn, L.A.N.M., ILA, Report of the Sixty-Third Conference (Warsaw 1988) p. 988.Google Scholar

5. Partially reproduced in NIPR 1988 no. 406. See infra n. 6.

6. NJ 1989 no. 602. English translation of the essential portions of both judgments, District Court 10 February 1988 and Court of Appeal 18 February 1988, and a summary of the main facts are given in 20 NYIL. (1989) p. 296 et seq.

7. NIPR 1988 no. 407.

8. Miller, B.H., ‘Sovereign Bankruptcy: Examining the United States Bankruptcy System as a Forum for Sovereign Debtors’, Law & Pol'y Int'1 Bus. (1991) p. 107Google Scholar et seq. After the completion of the present article, my attention has been drawn to Raffer's recent plea far drawing up rules of international law on the subject of ‘international bankruptcy’, see, Raffer, K. ‘Internationalizing US Chapter 9 Insolvency: Economic Problems in Need of Legal Conceptualization’Google Scholar, in Chowdhury, S.R. et al. , eds., The Right to Development in International Law (1992) p. 397 et seq.Google Scholar

9. RvdW 1990 no. 162; NJ 1991 no. 162, with a note by J.C. Schultsz. Also partially reproduced in NIPR 1991 no. 199.

10. Ibid.

11. See, inter alia, Belinfante, W.G., ‘Het Europese verdrag inzake de immumteit van Staten’ [The European Convention on State Immunity], Mededelingen van de Nederlandse Vereniging voor Internationaal Recht, No. 68 (1973)Google Scholar; Voskuil, C.C.A., ‘The International Law of State Immunity, as reflected in the Dutch Civil Law of Execution’, 10 NYIL (1979) p. 245 et seq., at p. 255.CrossRefGoogle Scholar

12. Trb. 1973 no. 43; Trb. 1985 no. 38; ETS No. 74.

13. UN GAOR, 46th Sess., Suppl. No. 10 (Doc. A/46/10).

14. See Higgins, R., ‘Execution of State Property: United Kingdom Practice’, 10 NYIL (1979) p. 35.CrossRefGoogle Scholar

15. See Bouchez, L.J., ‘The Nature and Scope of State Immunity from Jurisdiction and Execution’, 10 NYIL (1979) p. 3.CrossRefGoogle Scholar

16. But see Bouchez, , loc. cit. n. 15, p. 18 et seq.Google Scholar

17. ILA, Report of the Sixtieth Conference (Montreal 1982) pp. 329 and 335Google Scholar, paras. 19 and 41. The same view is held by the Procurator-General in the Supreme Court, in the case Oltmans v. Republic of Suriname, as appears from para. 3.9 of his application; see supra, n. 9. But see Voskuil, , loc. cit. n. 11, pp. 280–281Google Scholar; he too draws a distinction between the two forms of immunity, but along another line of reasoning.

18. Here I quote from the text as prepared by the ILC's Special Rapporteur, Motoo Ogisoo and adopted as recently as June 1991; ILC Report 1991, see supra, n 13. The line of reasoning nonetheless pre-dates this: practically the same text had been used previously on the proposal of the farmer special Rapporteur Sompong Sucharitkul, in the commentary provisionally adopted by the ILC on the then draft Article 21; ILC Yearbook 1986, vol. II. (Part Two), p. 17.

19. 16 October 1973, NJ 1974 no. 361, annotated by P. Zonderland and H.F. van Panhuys. English translation of the essential portions in 5 NYIL (1974) p. 290 et seq.

20. There remains the possibility that the District Court, in the case of Zaire, did actually search for such a ‘rule with exceptions’. The reference to ‘goods, whose nature or intention affects the Republic's public service’ in the Court's consideration quoted above would seem to point to this. If so, the District Court ought to have proceeded on the lines of seizure and execution with regard to specific objects, and not on the lines of bankruptcy.

21. ‘Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations’, General Assembly Resolution 2625 (XXV) of 24 October 1970.

22. The Court of Appeal may have also had this principle in mind when it referred to an ‘infringement of the independence of the sending State’, supra, para. 1.