DEBATE ON JURISDICTIONAL IMMUNITIES OF STATES AND THEIR PROPERTY BEGINS IN SIXTH COMMITTEE

Press Release
GA/L/3121

DEBATE ON JURISDICTIONAL IMMUNITIES OF STATES AND THEIR PROPERTY BEGINS IN SIXTH COMMITTEE

United Kingdom Proposes Drafting Model Law Rather Than Codifying Rules

The Sixth Committee (Legal) this afternoon began consideration of the International Law Commission's work on the question of jurisdictional immunities of States and their property, as described in the Commission's annual report.

The Commission's discussions were based on the conclusions of a Sixth Committee working group established last year to update the Commission's 1991 version of draft articles on jurisdictional immunities and deal with outstanding substantive issues. The working group had looked at recent developments of State practice and legislation, as well as comments submitted by States. The Commission made suggestions for dealing with such problems as the potential dual capacity of constituent units to exercise governmental authority on behalf of the State or on their own behalf, and the definition of criteria for determining the commercial character of a contract or transaction.

The representative of the United Kingdom recommended that the Commission's proposals be transformed into a model law, which would not be binding on any State and would leave room for practice to develop. Noting that the subject of State immunity had occupied both the Commission and the Committee over many years, he said the rules must be viewed in the context of a rapidly changing real world of international transactions. He advised against an attempted codification of State immunity law that did not correspond to modern conditions of international trade or failed to cover adequately all the issues that were likely to arise.

Statements were also made by the representatives of Mexico, Argentina, Netherlands and Japan.

The Chairman of the International Law Commission, Zdzislaw Galicki, introduced the relevant chapter of the Commission’s report.

The Commission will continue its consideration of the question at 10 a.m. tomorrow, 28 October.

Committee Work Programme

The Sixth Committee (Legal) met this afternoon to conclude its debate on nationality issues and take up another topic in the report of the International Law Commission, relating to jurisdictional immunities of States and their property.

On that question, the report of the Commission’s most recent session (document A/54/10) includes the suggestions it adopted on the recommendation of its working group. They cover the concept of State for the purpose of immunity; criteria for determining the commercial character of a contract or transaction; the concept of a State enterprise or other entity in relation to commercial transactions; contracts of employment; and measures of constraint against State property.

The working group considered outstanding substantive issues related to the draft articles on jurisdictional immunities adopted by the Commission in 1991. It was mandated to take into account recent developments of State practice and legislation and any other relevant factors arising since the adoption of the draft articles, as well as comments submitted by States.

Statements

ZDZISLAW GALICKI, Chairman of the International Law Commission, introduced the Commission’s work on jurisdictional immunities of States and their property. The relevant sections of its report contained a succinct summary of the developments which had taken place since 1991, he said.

He noted that an advance copy of the working group’s report had been transmitted to Member States in late August.

He summarized the suggestions of the Commission regarding each of the five issues identified by the working group. The provision on the concept of State, which was the subject of controversy between federal States and non-federal States, concerned particularly the problem resulting from the potential dual capacity of constituent units to exercise governmental authority on behalf of the State or act on their own behalf, according to the constitutional distribution of public power between the State and its constituent units. The Commission had made several suggestions on the matter.

He said the issue of criteria for determining the commercial character of a contract or transaction arose only if the parties had not agreed on the application of a specific criterion, and the applicable legislation did not require otherwise.

Regarding measures of constraint against State property, he said the Commission felt that a distinction should be drawn between pre-judgement and post- judgement measures to help sort out the inherent difficulties. With regard to pre-judgement measures, it had envisaged a number of possible cases and offered suggestions. Those included situations in which the State had expressly consented either ad hoc or in advance; measures involving property designated to satisfy the claim and measures involving the property of an agency enjoying a separate legal personality.

As regards post-judgement measures, the Commission thought those should be possible where the State had expressly consented either ad hoc or in advance; and envisaged measures being taken with respect to property designated to satisfy the claim. The Commission had proposed possible alternatives that could be followed.

BERNARDO SEPULVEDA (Mexico) praised the progress on the draft articles on nationality and encouraged the Commission to take up its other issues with the same dynamic spirit. He expressed regret at the decision not to take up the matter of legal persons in relation to succession of States. Although it was a less pressing issue, it would have been beneficial to offer guidelines to the international community. He hoped the Commission would resume consideration of that issue in due course.

Although the issue of nationality was generally within the purview of domestic legislation, one could not deny the role of international law in that field, he said. The right of persons to a nationality and the responsibility to avoid statelessness constituted clear limits to the discretion of States. Despite the inherent difficulties of the subject, the Commission had offered a balanced text that covered the rights of States as well as their responsibilities under international law.

Adopting the draft articles in the form of a declaration would adequately address the needs of States, he said. The draft articles offered criteria for exercise of the right to nationality. Article 3 contained a fundamental norm, namely that the text applied only to successions that occurred in accordance with international law. Unlawful acts were null and void and could not have to any legal effect. In cases of occupation or unlawful annexation, the situation existing prior to the commission of the unlawful act would remain in force. He agreed with the substance of article 5, on presumption of nationality, but said it could have been clearer. Habitual residence was an extremely useful criterion for determining nationality but other complementary criteria should also be taken into account. Respect for the wishes of affected individuals about their nationality was another valuable element in the text. Furthermore, the draft articles provided the necessary flexibility for dealing with the various kinds of succession.

Turning to jurisdictional immunities, he said the suggestions of the working group served as a good basis for resolving the substantive issues. It was appropriate to include within a definition of the State the constituent units of a federal State. Nevertheless, the language used could be confusing with respect to political subdivisions. On criteria for determining what was a commercial transaction, he said the nature of the act should be the defining element. Mexico was willing to consider ways to resolve the matter that took account of the need for legal certainty.

ORLANDO REBAGLIATI (Argentina) said the basic question before the working group was the existence of immunities for the political entities that make up States. He reiterated his country’s view that the concepts of a constituent unit of a federal State and its political subdivisions were not clearly differentiated and in fact overlapped. He suggested other wording that would specify, “constituent units or other political subdivisions empowered to act in exercise of governmental authority”.

Defining the commercial character of an action by a State was difficult, he said. However, drawing a distinction between the criteria on “nature or purpose” was less difficult in practice than in theory. He agreed with the decision not to include a reference to nature or purpose.

On immunity from implementation, he said there should be regulation of those cases in which the interests of the State might be subject to measures of constraint as a result of judicial actions against it. It was of no use to establish cases where jurisdictional immunity could not be involved, if one did not provide some possibility for carrying out a judgement. Moreover, a distinction should be drawn between pre- and post-judgement measures.

HANS LAMMERS (Netherlands) said that sincere effort should be undertaken to harmonize as much as possible the rules on State immunity. However, the right of private parties to adequate legal protection in their transactions with foreign States should not be unduly jeopardized.

The Netherlands had taken note of the Commission’s commentary that its draft article 2 did not cover criminal proceedings. That should be explicitly made clear in the provision dealing with the scope of the draft articles. It also wondered whether, and to what extent, the draft articles would apply in civil claims presented in connection with criminal proceedings.

The Netherlands basically agreed with the definition of the concept of “State” for the purposes of immunity as formulated by the working group. It had also taken note of the proposal made by the working group to abstain from defining any criteria for the determination of commercial transactions.

On the question of redress for injury or damage sustained in the territory of the forum State, it had taken note of the Commission’s commentary that the provision did not apply to situations involving armed conflict. It was an extremely important limitation that should be made explicit in the draft articles.

The Netherlands was basically satisfied with the present article concerning ships owned or operated by a State but believed that it should be expanded to cover aircraft. It also saw no reason why operation of an arbitration agreement should be limited to disputes relating to commercial transactions.

FRANKLIN BERMAN (United Kingdom) characterized the draft on nationality in relation to the succession of States as "a textbook exercise" in the efficient operation of the Commission, that is, a clear-cut topic that corresponded to a real and practical need, identified as such in partnership between the Commission and the Sixth Committee and completed on a brisk timetable. Nothing that the document and its commentaries consisted of a "modest 75 pages", he describes it as "good value for money, which even the most hardened cost accountant would have to admit, and achieved with a nice sense of momentum very apt to capture and then maintain the interest of government's". He welcomed the recommendation that the draft be adopted as a declaration. However, he added, it might be better to indicate more plainly in the text exactly what the Assembly considered itself to be doing when it adopted the draft articles.

He questioned a lack of internal connection between article 6, on domestic legislation, and subsequent portions of the draft. It was not clear what was required. It was perhaps not a fundamental point, but proper clarification might ensure that the text held together from a legal standpoint. He expressed appreciation that the Commission had been able to avoid an excessive emphasis on decolonization, which had marred its earlier work on State succession.

He said the subject of State immunity had occupied both the Commission and the Committee over many years. "What one needs to do is stand back a bit, survey in one's mind all of the reasons why agreement has proved so stubbornly elusive and ask oneself honestly the question whether, in light of that history, the agreement that could not be reached then can be reached now, and if so on what basis." Although it would be desirable to reach agreement, the rules governing State immunity operated as part of a very real world of international transactions, a world which was changing very fast. Because the institutions of State immunity were tied up with the development of a modern system of trade and commerce, there would be no future in an attempted codification of State immunity law that did not correspond to modern conditions of international trade or failed to cover adequately all the issues that were likely to arise.

If it were not possible to satisfy those conditions, the Committee must recognize that limitation in a spirit of sober realism. The Commission should not be asked to continue to work towards an undefined or unachievable goal. Pointing out a need to register and preserve the valuable work already achieved by the Commission as well as to respond to the need of governments to modernize domestic legislation, he recommended that the Commission's work be transformed into a model law. It would not be binding on any State and would therefore leave room for practice to develop. And it would provide a template against which States could modernize their law.

NOBUKATSU KANEHARA (Japan) said it was regrettable that only three days had been allocated for discussion of the issue of State immunity. The subject was a difficult one and no meaningful progress could be made in the discussions without sufficient time. If the draft articles were not sent back to the Commission for further work, at least one week should be allocated to its consideration next year.

He said that in view of the widely different and even polarized State practices, it would be wise to acknowledge that international law was still being developed. It would be constructive to tell which State practice was illegal or inappropriate because it was too radical or too conservative. The development of international law on the subject should not be frozen.

“Commercial character” should be the determining factor in the granting of immunity to foreign States on issues relating to contracts or transactions of a commercial, industrial, trading or professional nature. On measures of constraint, he said, greater prudence was necessary to secure the enforcement of judgements. The foreign State should be encouraged to comply voluntarily with the judgement of the court of the forum State.

On the concept of State enterprise in relation to commercial transactions, he said denial of their immunity should not mean a denial of the immunity of the State. There were cases in which States could not be given immunity, such as when the State enterprise engaged in a commercial transaction as an authorized agent of the State, and the State in turn acted as a guarantor of a liability of the State enterprise. The clarification made by the working group in that regard should be taken into account.

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