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Federal States in the International Legal Order

Published online by Cambridge University Press:  21 May 2009

Brian R. Opeskin
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Extract

Federalism is a form of governmental organisation whose origins may be traced to antiquity. However, the establishment of the United States as a federation during the late 18th century led to renewed interest in federal government, which has continued undiminished to the present day. As a measure of the significance of federalism, in 1987 it was estimated that some 40 per cent of the world's population lived in States that are formally federal, and that another one-third lived in polities that apply federal arrangements in some way. Amongst these States are Argentina, Australia, Austria, Belgium, Canada, Germany, India,Mexico, the Russian Federation, Switzerland and the United States of America.

Type
Research Article
Information
Netherlands International Law Review , Volume 43 , Issue 3 , December 1996 , pp. 353 - 386
Copyright
Copyright © T.M.C. Asser Press 1996

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Footnotes

*

Faculty of Law, University of Sydney. I wish to thank Henry Burmester, James Crawford, Don Rothwell and Ivan Shearer for helpful comments on a draft of this article. I also wish to thank Marjan Kamstra for her invaluable research assistance, which was funded by the Law Foundation of New South Wales.

References

1. See Elazar, D.J., Exploring Federalism (1987) pp. 117–123Google Scholar, who traces federalism to the Achaean League of ancient Greece and to the Israelite federation of tribes.

2. Elazar, op. cit. n. 1, p. 6.

3. Elazar, D.J., American Federalism: A View from the States (1966) p. 2.Google Scholar

4. James Madison made this point in The Federalist (No. 51) when describing the ‘double security’ afforded by dividing power between two levels of government (federal and state) and between separate branches (legislative, executive and judicial) within each level. See also Galligan, B., A Federal Republic: Australia's Constitutional System of Government (1995) pp. 38–46.Google Scholar

5. The power to enter into treaties may also be shared between the executive and legislative branches of government, through the requirement of parliamentary approval for executive treaty action.

6. In Germany this power can be exercised only with the consent of the federation and in respect of matters within the legislative powers of the Länder: see Art. 32(3) of the German Basic Law; Frowein, J.A. and Hahn, M.I., ‘The Participation of Parliament in the Treaty Process in the Federal Republic of Germany’, in Riesenfeld, S.A. and Abbott, F.M., eds., Parliamentary Participation in the Making and Operation of Treaties: A Comparative Study (1994) p. 61.Google Scholar In Switzerland this power is confined to agreements on public economy, neighbourship and police relations, and must contain nothing repugnant to the rights of other cantons or the confederation: see Art. 9 of the Swiss Constitution; Wildhaber, L., ‘Parliamentary Participation in Treaty-Making: Report on Swiss Law’, in Riesenfeld, and Abbott, Google Scholar, eds., Ibid., p. 131.

7. In Canada this is the result of the much criticised decision in Attorney-General for Canada v. Attorney-General for Ontario [1937]Google Scholar AC 326—the so-called Labour Conventions Case.

8. See Commonwealth v. Tasmania (1983)Google Scholar 158 CLR 1 (hereafter Tasmanian Dam Case). However, since most federal legislative powers may be exercised concurrently by the states, treaties may also be implemented by state legislation where this is appropriate.

9. This is evident, for example, in the continuing role of state legislation in implementing Australia's obligations under the International Convention on the Elimination of All Forms of Racial Discrimination 1966. State legislation was specifically preserved as a result of an amendment to the Racial Discrimination Act 1975 (Cth), which prevented federal legislation in this field from overriding that of the states. See Opeskin, B.R. and Rothwell, D.R., ‘The Impact of Treaties on Australian Federalism’, 27 Case Western Reserve JIL (1995) pp. 17–19.Google Scholar

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11. Wildhaber, loc. cit. n. 6.

12. Attorney-General for Canada v. Attorney-General for Ontario [1937] AC 326, at 347. The rationale for this approach lies in the doctrine of the separation of legislative and executive power.

13. Opeskin, B.R., ‘The Role of Government in the Conduct of Australia's Foreign Affairs', 15 Australian YIL (1994) p. 129.Google Scholar

14. UN Charter 1945, Art. 2(1).

15. See the discussion in sections 3.2, 3.3 and 3.4 infra. Federal resevations, in particular, may leave other States in a position of uncertainty as to the precise nature of the obligations undertaken by federal States, and this itself may give rise to concerns about lack of parity.

16. The argument of parity is weaker where the treaty in question does not regulate the relations between States themselves, but regulates the relationship between a State and its own citizens. This is the situation with human rights conventions, which seek to provide a minimum international standard of human rights observance within each State, rather than provide reciprocal treatment for one State's nationals in the territory of another State.

17. North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark; Federal Republic of Germany v. The Netherlands) ICJ Rep. (1969) p. 3, at paras. 70–73.

18. See section 3.4 below. However, some treaties expressly exclude the possibility of reservations, such as the United Nations Convention on the Law of the Sea, Art. 309.

19. For example, the 1982 United Nations Convention on the Law of the Sea came into force only after 60 States expressed their consent to be bound by it: Art. 308(1).

20. Triggs, G., ‘Australia's Ratification of the International Covenant on Civil and Political Rights: Endorsement or Repudiation?’ 31 ICLQ (1982) p. 278, at p. 284.CrossRefGoogle Scholar

21. Whitlam, G., ‘Australia and the UN Commission on Human Rights’, 45 Australian J Int. Affairs (1991) p. 51CrossRefGoogle Scholar. See also Commonwealth of Australia, House of Representatives, Parliamentary Debates, 18 February 1988, p. 369.Google Scholar

22. The First Optional Protocol to the ICCPR 1966 enables any individual who claims to be a victim of violations of any of the rights set forth in the Covenant to bring a complaint before the Human Rights Committee.

23. Canada acceded on 19 May 1976, although the Covenant was opened for signature on 19 December 1966.

24. See Rayfuse, R., ‘Treaty Practice: The Canadian Perspective’, in Alston, P. and Chaim, M., eds., Treaty-Making and Australia: Globalisation Versus Sovereignty? (1995) p. 253, at p. 258.Google Scholar

25. A similar obligation is expressed in Art. 2(2) of the United Nations Charter 1945.

26. Art. 27 of the Vienna Convention on the Law of Treaties 1969, provides that ‘a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty’. Art. 46 makes an exception where the consent to be bound by the treaty was expressed in violation of a fundamental rule of internal law concerning the competence to conclude treaties. For a discussion of State responsibility, see section 4 infra.

27. Department of Foreign Affairs and Trade, The Conclusion of Treaties and Other International Arrangements. Treaties Section, Department of Foreign Affairs and Trade (1987) pp. 16–17.Google Scholar While conformity with treaty obligations is considered essential, Australia may not necessarily take advantage of the rights available under a treaty until some time after ratification or accession.

28. A relatively recent example is ILO Convention No. 158 Concerning Termination of Employment at the Initiative of the Employer 1982, which was ratified by Australia on 26 February 1993, before the Industrial Relations Reform Act 1993 (Cth) implemented the treaty obligations.

29. For a review of Australian and Canadian practices, see Hocking, B., ‘Managing Foreign Relations in Federal States: Linking Central and Non-Central International Interests’, in Hocking, B., ed., Foreign Relations and Federal States (1993) p. 68, at pp. 79–81.Google Scholar

30. Burmester, H., ‘The Australian States and Participation in the Foreign Policy Process’, 9 Federal LR (1978) p. 257, at pp. 280–281.Google Scholar

31. See ‘Principles and Procedures for Commonwealth-State Consultation on Treaties’, 5 Public LR (1994) p. 291, at p. 292.Google Scholar The 1996 revised Principles make similar provision in this respect. See n. 79 and accompanying text.

32. Burmester, H., ‘Federal Clauses: An Australian Perspective’, 34 ICLQ (1985) p. 522, at pp. 536–537.Google Scholar

33. See section 3.2 infra.

34. B. Hocking, ‘Introduction’, in Hocking, op. cit. n. 29, p. 2.

35. Hocking, op. cit. n. 29, p. 68; Putnam, R.R., ‘Diplomacy and Domestic Politics: the Logic of Two-Level Games’, 42 Int. Organization (1988) p. 427.Google Scholar

36. E.H. Fry, ‘The US States and Foreign Economic Policy: Federalism in the “New Worlder”’, in Hocking, op. cit. n. 29, p. 124.

37. Ravenhill, J., ‘Australia’, in Hans, J.M. and Soldatos, P., eds., Federalism and International Relations: The Role of Subnational Units (1990) p. 76, at p. 99.Google Scholar

38. Goss, W., ‘Advancing the International Interests of the States’, 30 World Rev. (1991) p. 39, at p. 40.Google Scholar

39. Hocking, op. cit. n. 29, p. 6.

40. Reparation for Injuries Suffered in the Service of the United Nations Case, ICJ Rep. (1949) p. 174, at p. 178.Google Scholar

41. O'Connell, DP. and Crawford, J., ‘The Evolution of Australia's International Personality’, in Ryan, K.W., ed., International Law in Australia, 2nd edn. (1984) p. 1.Google Scholar

42. Montevideo Convention on the Rights and Duties of States 1933, Art. 2.

43. For an overview of federal practices see Senate Legal and Constitutional References Committee, Trick or Treaty ? Commonwealth Power to Make and Implement Treaties, The Senate, Canberra, 11 1995, pp. 143–174.Google Scholar

44. Soviet Constitution, Art. 18(a).

45. United States Constitution, Art. 1, s. 10, cl. 3. In practice, many agreements with foreign States have been tolerated under this clause because the constitutional prohibition has been interpreted as applying only to ‘the formation of any combination tending to the increase of the political powers in the states which may encroach upon or interfere with the just supremacy of the United States’. See Fry, E.H., ‘The United States of America’, in Michelmann, J.H. and Soldatos, P., eds., Federalism and International Relations: the Role of Subnational Units (1990) p. 276, at pp. 279–281.Google Scholar

46. In New South Wales v. Commonwealth (1975) 135 CLR 337, at 506 Murphy J. emphatically stated that ‘the states have no international personality, no capacity to negotiate or enter into treaties, no power to exchange or send representatives to other international persons and no right to deal with other countries, through agents or otherwise. Their claims to international personality or to sovereignty are groundless’.

47. International Law Commission, ‘Draft Articles on the Law of Treaties’, 2 YB Int. L.& Com. (1965) p. 160, Art. 5(2).

48. Rosenne, S., The Law of Treaties: A Guide to the Legislative History of the Vienna Convention (1970) p. 80Google Scholar n. 119; Wildhaber, L., Treaty-Making Power and Constitution: An International and Comparative Survey (1971) pp. 265–266.Google Scholar

49. Gotlieb, A.E., Canadian Treaty-Making (1968) p. 32.Google Scholar

50. Dugard, J., Recognition and the United Nations (1987) pp. 54–55.Google Scholar

51. Soviet scholars claim that all the republics of the Soviet Union have international personality, but this claim has been strongly contested by western writers. See Uibopuu, H.-J., ‘International Legal Personality of Union Republics of USSR’, 24 ICLQ (1975) p. 811, at p. 843.Google Scholar

52. Separate international personality also contains its own perils, since the conduct of foreign policy may be complicated by the potential for state and federal authorities to speak with different voices on particular matters.

53. For example, at least in the case of Australia, Canada and the United States, agreements between constituent units and foreign States are generally governed by municipal law rather than international law, or are regarded as purely political agreements: Marzo, L.D., Component Units of Federal States and International Agreements (1980) pp. 144–153.Google Scholar This accords with the statement of the Permanent Court of International Justice in the Serbian Loans Case (1929), PCIJ Series A. Nos. 20–21, that ‘any contract which is not a contract between states in their capacity as subjects of international law is based on the municipal law of some country’.

54. This is reflected in Art. 29 of the Vienna Convention on the Law of Treaties 1969, which provides that ‘Unless a different intention appears from the treaty or is otherwise established, a treaty is binding upon each party in respect of its entire territory’.

55. For a discussion of Australia's external territories, see Burmester, H., ‘Island Outposts of Australia’, in Australian Centre for Maritime Studies, Australia's Offshore Maritime Interests, Occasional Papers in Maritime Affairs, No. 3 (1985) p. 54.Google Scholar

56. McNair, Lord, The Law of Treaties (1961) p. 116.Google Scholar

57. Bernier, I., International Legal Aspects of Federalism (1973) p. 17.Google Scholar

58. Liang, Y.L., ‘Colonial Clauses and Federal Clauses in United Nations Multilateral Instruments’, 45 AJIL (1951) p. 108.CrossRefGoogle Scholar

59. For a description of British practice, see Fawcett, J.E.S., ‘The Treaty Relations of British Overseas Territories’, 26 BYIL (1949) p. 86.Google Scholar

60. Leal, A.H., ‘Federal State Clauses and the Conventions of the Hague Conference on Private International Law’, 8 Dalhousie LJ (1984) p. 257.Google Scholar

61. See n. 7 and accompanying text.

62. For example, the Convention on the Civil Aspects of International Child Abduction 1980 and the Convention on the Law Applicable to Trusts and on their Recognition 1985 are extended only to select Canadian provinces. See ‘Information Concerning the Hague Conventions on Private International Law’, 43 NILR (1996) p. 57.

63. See, e.g., UNIDROIT Convention Providing a Uniform Law on the Form of an International Will 1973, Art. 14; United Nations Convention on Contracts for the International Sale of Goods 1980, Art. 93; Convention on Agency in the International Sale of Goods 1983, Art. 24.

64. Bernier, op. cit. n. 57, p. 172.

65. Rayfuse, loc. cit. n. 24, p. 260.

66. Ziegel, J.S., ‘Treaty Making and Implementing Powers in Canada: The Continuing Dilemma’, in Cheng, B. and Brown, E.D., eds., Contemporary Problems of International Law: Essays in Honour of Georg Schwarzenberger on his Eightieth Birthday (1988) p. 333, at p. 344Google Scholar; Davidson, P.J., ‘Uniformity in International Trade Law: The Constitutional Obstacle’, 11 Dalhousie LJ (1988) p. 677, at p. 679.Google Scholar

67. In particular, Australia's concern was that, on a narrow reading of the federal parliament's power over ‘external affairs’, if there was no obligation to apply the treay throughout Australia, there was no constitutional power to do so. See Leal, loc. cit. n. 60, pp. 274–281. These concerns led to the inclusion of an article in the Convention on the Civil Aspects of International Child Abduction 1980 to the effect that the making of a declaration under Art. 40 (the equivalent of Art. 14 above) shall carry no implication as to the internal distribution of powers within that State.

68. N.D. Campbell, ‘Australian Treaty Practice and Procedure’, in Ryan, op. cit. n. 41, p. 53, at pp. 58–59.

69. Bernier, op. cit. n. 57, p. 172.

70. For a history of federal clauses and the International Labour Organisation, see Looper, R.B., ‘Federal State Clauses in Multilateral Instruments’, 32 BYIL (1955–1956) p. 162, at pp. 164–186.Google Scholar

71. For evidence of Australia's view that it fell within the scope of Art. 405, see: Royal Commission on the Constitution of the Australian Commonwealth, Report of the Royal Commission on the Constitution: Together with Appendixes and Index (1929) p. 185.Google Scholar

72. Art. 19(7), Instrument for the Amendment of the Constitution of the International Labour Organisation 1946. As is appropriate to a constitutional document, Art. 19 is directed towards the procedural steps that an International Labour Organisation member must take to bring a convention before the appropriate authorities for action, whatever the subject matter of the convention. Accordingly, the disparity of obligation between federal and unitary States created by Art. 19(7) is confined to the procedural steps that must be taken in respect of a convention. When a federal State actually ratifies an International Labour Organisation convention, the State is bound by its terms to the same extent as a unitary State. See Burmester, loc. cit. n. 32, p. 527.

73. Looper, loc. cit. n. 70, p. 183.

74. See Tasmanian Dam Case (1983) 158 CLR 1.

75. See, e.g., Convention for the Protection of World Cultural and Natural Heritage 1972, Art. 34; United Nations Refugee Convention [Convention Relating to the Status of Refugees] 1951, Art. 41; United Nations Convention Relating to the Status of Stateless Persons 1954, Art. 37; Convention on the Recognition and Enforcement of Arbitral Awards 1958, Art. 11.

76. See, e.g., Convention on the Recovery Abroad of Maintainence 1956, Art. 11.

77. Burmester, loc. cit. n. 32.

78. Burmester, loc. cit. n. 32, p. 530.

79. ‘Principles and Procedures for Commonwealth-State Consultation on Treaties’. A former version, which is the same as the revised 1996 version in material respects, is reproduced in 5 Public LR (1994) p. 291.

80. Tasmanian Dam Case (1983) 158 CLR 1.

81. Triggs, loc. cit. n. 20, p. 286. Uncertainty might arise because of the subjective evaluation inherent in the clause or because of doubts about the underlying division of responsibilities between state and federal spheres of government.

82. Burmester, loc. cit. n. 32, pp. 536–537.

83. Vienna Convention on the Law of Treaties 1969, Art. 2(l)(d).

84. Edwards, R.W., ‘Reservations to Treaties’, 10 Michigan JIL (1989) p. 362, at p. 363Google Scholar; Lijnzaad, L., Reservations to UN Human Rights Treaties: Ratify and Ruin? (1995) pp. 77–80.Google Scholar

85. Bernier, op. cit. n. 57, p. 183. Bernier claims that federal reservations were first used in multilateral treaty by Canada in 1953 in relation to the United Nations Convention on the Political Rights of Women 1953.

86. Numerous reservations were also made to other provisions of the Convention. See United Nations, Multilateral Treaties Deposited with the Secretary-General: Status as at 31 December 1982, pp. 121–122.Google Scholar

87. The reservation was withdrawn in 1984, possibly in response to the High Court's decision in the Tasmanian Dam Case (1983) 158 CLR1, which put beyond doubt federal Parliament's power to implement treaties in domestic law.

88. Triggs, loc. cit. n. 20, pp. 285–286. The proposal merely required federal authorities to make a favourable recommendation to the authorities of constituent states in respect of those matters that were appropriate for state action.

89. Sørensen, M., ‘Federal States and the International Protection of Human Rights’, 46 AJIL (1952) p. 195, at p. 215Google Scholar; Triggs, loc. cit. n. 20, p. 286; Bernier, op. cit. n. 57, pp. 180–182. This was notwithstanding a request by the United Nations General Assembly to the Commission preparing the Covenant to devise recommendations that would secure the maximum extension of the Covenant to the constituent units of federal States and meet their constitutional problems: UNGA Res. 421(V)C, 4 December 1950.

90. Art. 309.

91. Reservations to the Genocide Convention, ICJ Rep. (1951Google Scholar) 15. See the Convention on the Prevention and Punishment of Crimes Against Internationally Protected Persons, Including Diplomatic Agents 1973.

92. Vienna Convention on the Law of Treaties 1969, An. 19(c).

93. Reservations to the Genocide Convention, ICJ Rep. (1951) 15, at p. 24.

94. Edwards, loc. cit. n. 84, pp. 389-391; Lijnzaad, op. cit. n. 84, p. 40.

95. Under the Vienna Convention on the Law of Treaties 1969, Art. 20(5), a reservation is considered to have been accepted by a State if no objection has been raised within twelve months after the reservation was notified.

96. United Nations, Multilateral Treaties Deposited with the Secretary-General: Status as at 31 December 1982, p. 132.Google Scholar

97. Craig, M.D., ‘The International Covenant on Civil and Political Rights and United States Law: Department of State Proposals for Preserving the Status Quo’, 19 Harvard ILJ (1978) p. 845, at pp. 870–871Google Scholar; Triggs, loc. cit. n. 20, pp. 291–292.

98. Triggs, loc. cit. n. 20, p. 292.

1. United Nations, Multilateral Treaties Deposited with the Secretary-General: Status as at 31 December 1989, p. 135.Google Scholar

100. See, e.g., Convention on the Elimination of All Forms of Discrimination Against Women 1979.

101. When The United States ratified the ICCPR it lodged an ‘understanding’ that the ‘Covenant shall be implemented by the Federal Government to the extent that it exercises legislative and judicial jurisdiction over the matter covered therein, and otherwise by the state and local governments’. For an early draft of the understanding, see Craig, loc. cit. n. 97, p. 868.

102. Edwards, loc. cit. n. 84, p. 380; McRae, D.M., ‘The Legal Effect of Interpretative Declarations’, 49 BYIL (1978) p. 155.Google Scholar

103. Sinclair, I., The Vienna Convention on the Law of Treaties, 2nd edn. (1984) p. 54.Google Scholar

104. Art. 2(l)(d).

105. See, e.g., Anglo-French Continental Shelf Case (United Kingdom v. France), 54 ILR (1979) p. 6Google Scholar, concerning a French declaration to the Geneva Convention of 1958 on the Continental Shelf; and Belilos v. Switzerland (1988) ECHR Series A No. 132, concerning a Swiss ‘interpretative declaration’ to the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950. See also the discussion in Edwards, loc. cit. n. 84, pp. 369–372.

106. 2 ILC Yearbook (1956) p. 110.

107. The International Law Commission had not included Art. 27 in its draft articles on the law of treaties precisely because it thought that the principle belonged to the law of State responsibility. However, Pakistan's proposal to include it in the Convention found general favour among States. See Sinclair, loc. cit. n. 103, p. 84.

108. Details of the incident are discussed in Evatt, H.V., ‘International Responsibility of States in the Case of Riots or Mob Violence’ 9 ALJ (1935) p. 9.Google Scholar

109. Under international law a State does not generally bear international legal responsibility for harm caused by private persons acting in that capacity because such actions cannot be attributed to the State. However, where the State fails to exercise due diligence in protecting foreign nationals from threatened harm, there may be grounds for imputing wrongdoing to the State, even though the harm was caused by private persons. In the present case, the claims of Italy, Greece and Yugoslavia were presumably based on the view that the three days of rioting and looting might have been prevented altogether by a stronger police presence in the town, or at least brought to a speedier end by a swifter response from the authorities.

110. Commonwealth of Australia, House of Representatives, Parliamentary Debates, 31 07 1934, at p. 938.Google Scholar

111. Evatt, loc. cit. n. 108, p. 25.

112. International Law Commission, ‘Commentary on Draft Articles on State Responsibility’, 2 ILC Yearbook (1974) p. 279.Google Scholar

113. Moore, J.B., A Digest of International Law (1906) Vol. 6, pp. 837–849.Google Scholar

114. See, e.g., Pierre Dominique Case (1905) 10 RIAA 156Google Scholar; Pellat Claim (1929) 5 RIAA 534Google Scholar; Heirs of the Due de Guise Case (1951) 13 RIAA 161.Google Scholar

115. (1926) 4 RIAA 110.

116. (1927)4 RIAA 173.

117. The possibility of such claims was said to be recognised in the General Claims Convention between the United States and Mexico 1923. Art. 1 of that Convention states, somewhat unhelpfully, that the Commission may hear ‘all claims for losses or damages originating from acts of officials or others acting for either government’.

118. LN Doc C.75, M.69 (1929/V) p. 243.

119. LN Doc C.75, M.69 (1929/V) p. 175. It is curious that the Australian Government should have adopted a contrary approach so soon afterwards in relation to the Kalgoorl ie riots. The response might be explained by the requirement of international law that a claimant must exhaust all local remedies (including those available through the relevant constituent state) before engaging the international responsibility of a State. See O'Connell and Crawford, loc. cit. n. 41, p. 32.

120. International Law Commission, loc. cit. n. 112, p. 277.

121. International Law Commission, loc. cit. n. 112, pp. 278, and 280–281. In the rare cases where constituent states retain international personality of their own, the breach of an international obi igation incumbent upon the constituent state is attributable to that state and not to the federal State.

122. United Nations Human Rights Commission, No. 688/1992. Nicholas Toonen andAustralia, Doc. CCPR/C/50/D/488/1992 (4 April 1992)Google Scholar. For further analysis of this case, see Opeskin and Rothwell, loc. cit. n. 9, pp. 47–54.

123. The offending laws were ss. 122 and 123 of the Criminal Code Act 1924 (Tas).

124. It is arguable that the Tasmanian legislation is invalid to the extent that it is inconsistent with the defence provided by the federal act, a matter currently being litigated in pending proceedings in the High Court of Australia. See Australian Constitution, s. 109.

125. The attribution to a federal State of the contractual obligations of a constituent state is more controversial. The 1920s Harvard research on State responsibility concluded that a State is not generally responsible for the non-performance of contractual obligations of a political subdivision: see Harvard Research in International Law, ‘Responsibility of States for Damage Done in Their Territory to the Person or Property of Foreigners’, 23 AJIL (1929) (Special Supp.) p. 133, at p. 168.Google Scholar However, divergent State practice exists on the question: see O'Connell, D.P., ’The Evolution of Australia's International Personality’, in O'Connell, D.P., ed., International Law in Australia (1966) p. 31.Google Scholar As a matter of principle, it would seem that where a constituent state of a federation defaults on a contract with another State, no question of State responsibility arises where the agreement is governed by municipal law, as most are. This is because there is no breach of an international obligation for which the federation might be held accountable. However, where a constituent state has international personality and has entered into a treaty in its own right, breach of the treaty will engage the responsibility of that state and not the federation. See Rosenne, S., Breach of Treaty (1985) p. 58.Google Scholar

126. Photo Production Ltd v. Securicor Transport Ltd [1980] AC 827Google Scholar, per Lord Diplock; See Carter, J., Breach of Contract (1984) p. 449.Google Scholar

127. Freedom of contract may, however, be restricted by common law or statutory principles designed to protect contracting parties with weak bargaining power, such as consumers and workers.

128. Parties may attempt to stipulate the consequences of breach by providing in their contract for the payment of a fixed sum of money to the innocent party in the event of default. However, in Anglo-American law the rules relating to penalties and foreiture invalidate exhorbitant clauses on the ground that ‘the law will not let people punish each other’: Robertson v. Driver's Trustees (1881) 8 R 555, at 562.Google Scholar In German and French law the same policy is recognised in the grant of power to the courts to reduce the amount of a disproportionately high penalty: see Treitel, G.H., Remedies for Breach of Contract: A Comparative Account (1988) p. 213.Google Scholar

129. One limitation is that a treaty is void if it conflicts with a principle of jus cogens, namely a peremptory norm of international law from which no derogation is permitted. See Vienna Convention on the Law of Treaties 1969, Art. 53.

130. See Chorzów Factory Case (Indemnity) Case (1928), PCIJ Series A No. 17, pp. 46–48.Google Scholar