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Reserve judgment: Arbitrating energy disputes in Africa

Simon Sloane

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As African states seek to use national laws to protect their natural resources and increase revenue from their development, Fieldfisher dispute resolution partner, Simon Sloane, considers the difficulties facing energy companies seeking to protect their investments while respecting the transformational needs of host states.

Africa’s capacity to benefit equitably from its own natural resources continues to be one of the main challenges facing many of its most energy-abundant jurisdictions.

While blaming this state of affairs on the old “resource curse” myth is simplistic and unhelpful, it remains the case that nations rich in resources tend to be poorer and less developed than those which are not, with many of the benefits of their exploitation going offshore.

Despite the clear moral case for African countries to profit more from their energy and mineral reserves, legally the picture is more complicated.

Much of the cost and risk of extracting these resources tends to be shouldered by foreign investors, who expect to be compensated for their outlays and assume that the terms on which they invested will be protected by local and international laws.

Consequently, any new domestic legislation guaranteeing host countries a “fair” share of the revenues from internationally funded projects is often treated as breaching protections given to foreign investors in bilateral investment treaties (BITs).

There have been numerous incidents of foreign companies successfully bringing arbitrations against African states that have tried to amend investment terms retrospectively, with investors relying on safeguards such as fair and equitable treatment (FET) and non-expropriation rights provided in BITs.

This has led to growing scepticism among African governments of (particularly first and second generation) BITs, as these treaties are often perceived as looking after the interests of foreign investors, to the detriment of states’ needs to transform their economies.

Affirmative action

A handful of African countries, including South Africa and Tanzania, have recently cancelled a number of their BITs – a situation that has created tension between the desire to preserve domestic assets for the national benefit and the need to attract foreign investment to fuel economic growth.

Domestic legislation designed to promote equitable ownership include South Africa’s black economic empowerment initiatives, which compel 26% of shares in mining assets to be distributed to disadvantaged local people.

In Tanzania, new laws including the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act, 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Act, give the government power to renegotiate contracts with investors on terms more favourable to the state.

Although international arbitration is generally a last resort for resources companies when disputes arise, lately there has been a noticeable increase in requests for arbitration in circumstances where African states have sought to implement alternative local laws.

BIT terms and Western-centric legal principles rarely align with traditional African customary laws and there is a growing unwillingness in many African states to accept foreign rulings over key national assets, which can make the enforcement of an international arbitration award against a state politically challenging.

Since relatively few African court decisions are published, it is hard to tell statistically where many countries are in terms of compliance with international arbitration awards, and how many are resisting enforcement.

There have been some very public rejections of international arbitrators’ decisions.

Zimbabwe, for example, has resisted recent efforts to enforce awards made against it in US courts.

Nigerian courts have also refused the local enforcement of a multi-billion dollar London Court of International Arbitration (LCIA)commercial arbitration award against a state-owned entity in favour of foreign investors, notwithstanding that the English courts have upheld the validity of the award (see P&ID Ltd v Federal State of Nigeria).

Yet even in cases where the authority of international arbitrators is accepted, the variety and nature of local laws can cause problems when it comes to implementing awards in African states.

Parallel proceedings

Growing distrust of the international arbitration system among African governments is a considerable problem for foreign investors, especially in the highly litigious energy sector, as there is currently no trusted alternative for resolving disputes.

Historically, arbitration has not been high on the agenda for most African states and relatively few African judges have significant experience of international arbitration.

Efforts are being made to redress this through legal education and there have been moves to establish regional arbitration centres throughout Africa that have the confidence of both states and investors, although these are yet to gain significant traction.

In the meantime, there continue to be serious problems in resolving energy project disputes caused by parallel proceedings, where one party will ignore an arbitration clause in a contract and ask for the matter to be addressed in a local court.

In these situations, partiesend up straddling one or more proceedings on the same issues, with different tribunals and courts regularly reaching different decisions and with the added hurdle of a party facing competing anti-suit or anti-arbitration injunctions.

Such circumstances are common where at least one partner is foreign and relies on an arbitration clause in a contract or its public international law rights under a BIT, while local parties are more naturally inclined to seek decisions from local judges.

Often, the impasse is caused by local judges who are suspicious of the international arbitration process and are not willing to abdicate their powers to a foreign tribunal .

Pre-empting problems

In many cases, the need for arbitration can be avoided by careful and far-sighted approaches to contract negotiation.

Simply including an arbitration clause in a contract will not automatically prevent the parties ending up in messy disputes being contested simultaneously in domestic and international courts.

Energy projects especially will usually involve a complicated series of contracts between international energy companies and one or more domestic counterparts, including government bodies, local investors and contractors.

If a domestic party decides to ignore an arbitration clause and asks a local court to intervene, the foreign party then has to choose whether to seek an injunction and refer the dispute to arbitration, or submit to the local court’s jurisdiction.

In these situations, the international partner is likely to have difficulty locally enforcing any award they obtain, if they proceed with the arbitration.

Alternatively, the international party can opt to engage in the local court process which can expose them to the vagaries of an unfamiliar legal system.

Where there is a suite of contracts containing different arbitration clauses, this leaves the parties open to arguments about which arbitration clause governs which dispute and the possibility of multiple proceedings.

Habitually, there is a lack of attention given by lawyers drafting contracts to what are sometimes mandatory laws to protect natural resources.

Rules obliging infrastructure developers to use local contractors on large projects are also frequently ignored.

This failure to respect local laws can lead to litigation in local courts, especially as communities become more empowered to challenge this practice, over issues which should have been addressed at the drafting stage.

While not wholly avoidable, the risk of becoming embroiled in paralysing disagreements can be minimised by careful drafting and fully thinking through how proceedings will work in particular African jurisdictions.

Intra-African arbitration centres

One of the solutions being implemented to improve the perception of international arbitration in African disputes is the establishment of local arbitration centres.

In 2016 alone, there were more than 70 international arbitration centres operating across Africa,, with varying degrees of credibility, and more have sprung up since.

The Cairo Regional Centre for International Commercial Arbitration, established in 1979, has been notably successful in attracting Arab and north-Saharan arbitrations.

In Nigeria, the Lagos Court of Arbitration is growing in stature, as are the Kigali International Arbitration Centre (KIAC) in Rwanda and the Ghana Arbitration Centre.

The Casablanca International Mediation and Arbitration Centre (CIMAC) in Morocco and the Mauritius International Arbitration Centre (MIAC), which was previously an offshoot of the LCIA, are also actively seeking to play active roles in resolving African disputes.

China’s approach to arbitrating in Africa is also worth paying attention to. The China-Africa Joint Arbitration Centre (CJAC) in Shanghai was specifically set up to deal with infrastructure project disputes, and China is now looking to set up centres with broader mandates in East and West Africa.

The goal of all of these African centres is to regionalise arbitration, so that cases involving precious national assets are dealt with in Africa by African lawyers and arbitrators, with the buy-in of African governments and international investors.

However, until local courts are equipped to play a supportive role in arbitration, it may be hard for these centres to command confidence, especially when there are so many centres competing to hear arbitrations.

Transparency within the local court system also needs to improve, as where there is little or no access to court judgments, the worst assumptions are going to prevail.

International investors need to feel they can trust the integrity of local courts before they can be comfortable with their handling of cases.

The Paris-headquartered International Court of Arbitration (ICA) is pushing to improve the transparency of enforcement, on the grounds that it is important for tribunals and courts to know what other courts are doing, and for the rest of the world to see that key treaties are not being overturned and set aside.

The Organization for the Harmonization of Business Law in Africa (OHADA) is similarly seeking to facilitate a pro-arbitration stance in West Africa.

It is worth noting that suggestions around using institutionally appointed arbitrators, who have the advantage of proven expertise in the area they are arbitrating on, have generally received a cool reception by courts, states and investors.

Stabilisation clauses

The use of stabilisation clauses in contracts as a means for foreign investors to mitigate or manage political risks associated with their project is coming under scrutiny in Africa.

The World Bank and other multi-lateral development organisations favour the deployment of clauses that allow an investor to sue a state if the terms on which they invested change, as a way of increasing investment in Africa and developing economies in general.

But it is becoming increasingly evident that such clauses bind African governments and prevent them from amending local labour and environmental laws or their fiscal regimes, even if such reforms are deemed necessary to transform their societies and enhance domestic economies.

Although many African countries recognise that including stabilisation clauses in a BIT is likely to lead to expensive disputes that state balance sheets can ill afford, the need to attract foreign investment means that most governments are still willing to take the risk.

This is an area that multi-lateral organisations need to review, as it is clear that the current situation does not adequately serve the transformational needs of many African states.

New model treaties

Simultaneously with the growth of local arbitration centres, a raft of regional investment and co-operation agreements have sprung up to foster intra-African state and private investment from home-grown and international sources.

The majority of these agreements contain carve-outs expressly to enable African states to address their transformational needs, including exemptions for disenfranchised communities and the need to protect natural resources, without the fear of incurring liability to foreign investors.

The African Continental Free Trade Agreement (AfCFTA), signed in Kigali in March 2018, is intended to provide a platform for intra-African investment between 27 African Union member states, both at state level and for private investors.

It is also hoped that the AfCFTA will go some way towards dealing with the perception that foreign investors have advantages over local partners under traditional BITs, and with some of the problems of enforcing courts’ decisions on disputes.

The New York Convention

One major benefit of international arbitration is the ease of enforcement in foreign jurisdictions which are signatories to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”).

In sub-Saharan Africa, a region which comprises 46 of Africa’s 54 countries, many but not all jurisdictions have ratified the New York Convention.

The challenge now will be to ensure that the convention is properly implemented and respected by all signatories.

African governments are also closely following developments in Europe around the Investment Court System as an alternative to international arbitration, for resolving investor disputes in EU member states.

Tackling corruption

Non-governmental organisation Transparency International singles out the global oil and gas industry as one of the business sectors at the greatest risk of corruption, with Africa being a particular hot spot.

While there has been ample evidence of corrupt practices in some jurisdictions, observers should be cautious generalising about Africa, as many African countries are highly ranked as places to do business cleanly and legally.

Corruption is one of the issues at the heart of many governments’ dissatisfaction with the international arbitration system, as it smacks of injustice that an investor may be involved in illegal activity, by coercion or by choice, yet still win significant arbitration awards.

There have been a few advances in BITs and model laws that indicate international law is starting to get to grips with the issue.

The Dutch Model BIT published earlier this year allows tribunals to take into account whether there has been corruption when making an award – a development that has been largely welcomed and is likely to be replicated in other BITs around the world.

The Nigeria-Morocco BIT (the Reciprocal Investment Promotion and Investment Agreement) signed in late 2016, which contains a comprehensive anti-corruption provision, is also seen as one of the most progressive new formats of BIT.

The future of African energy disputes

Anyone considering making investments in Africa needs to be aware that there are a number of regional treaties to be complied with in order to benefit from investment protections.

There continue to be unresolved questions around enforcement mechanisms and what protections are enforceable through arbitration, especially as countries pull out of BITs.

For users or would-be users of the arbitration system, there are some difficult choices to be made for those who find themselves in the midst of several parallel proceedings.

While disputants may be convinced that they are legally right that arbitration is the way to resolve an issue, parties need to be very certain that there is some kind of enforcement option available to justify the time and expense involved.

Otherwise, disputes can turn into difficult procedural battles between arbitrators and local court proceedings, leading to spiralling costs and project delays, ultimately forcing parties to abandon the case.

Simon Sloane is a dispute resolution partner at European law firm, Fieldfisher. He is a leading expert in international arbitration and ADR with over 25 years' experience of advising construction, energy and insurance clients. For more information on our international arbitration expertise, please visit the relevant pages of the Fieldfisher website. https://www.fieldfisher.com/

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International Law

A bird’s eye view of Asia: A continental landscape of minorities in peril

Dr. James M. Dorsey

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Many in Asia look at the Middle East with a mixture of expectation of stable energy supplies, hope for economic opportunity and concern about a potential fallout of the region’s multiple violent conflicts that are often cloaked in ethnic, religious and sectarian terms.

Yet, a host of Asian nations led by men and women, who redefine identity as concepts of exclusionary civilization, ethnicity, and religious primacy rather than inclusive pluralism and multiculturalism, risk sowing the seeds of radicalization rooted in the despair of population groups that are increasingly persecuted, disenfranchised and marginalized.

Leaders like China’s Xi Jingping, India’s Narendra Modi, and Myanmar’s Win Myint and Aung San Suu Kyi, alongside nationalist and supremacist religious figures ignore the fact that crisis in the Middle East is rooted in autocratic and authoritarian survival strategies that rely on debilitating manipulation of national identity on the basis of sectarianism, ethnicity and faith-based nationalism.

A bird’s eye view of Asia produces a picture of a continental landscape strewn with minorities on the defensive whose positioning as full-fledged members of society with equal rights and opportunities is either being eroded or severely curtailed.

It also highlights a pattern of responses by governments and regional associations that opt for a focus on pre-emptive security, kicking the can down the road and/or silent acquiescence rather than addressing a wound head-on that can only fester, making cures ever more difficult.

To be sure, multiple Asian states, including Malaysia, Indonesia, Thailand, the Philippines, Pakistan, Bangladesh and India have at various times opened their doors to refugees.

Similarly, the Association of Southeast Asian Nations’ (ASEAN) disaster management unit has focused on facilitating and streamlining repatriation of Rohingya refugees in Bangladesh.

But a leaked report by the unit, AHA Centre, in advance of last June’s ASEAN summit was criticized for evading a discussion on creating an environment in which Rohingya would be willing to return.

The criticism went to the core of the problem: Civilizationalist policies, including cultural genocide, isolating communities from the outside world, and discrimination will at best produce simmering anger, frustration and despair and at worst mass migration, militancy and/or political violence.

A Uyghur member of the Communist Party for 30 years who did not practice his religion, Ainiwa Niyazi, would seem to be the picture-perfect model of a Chinese citizen hailing from the north-western province of Xinjiang.

Yet, Mr Niyazi was targeted in April of last year for re-education, one of at least a million Turkic Muslims interned in detention facilities where they are forced to internalize Xi Jinping thought and repudiate religious norms and practices in what constitutes the most frontal assault on a faith in recent history.

If past efforts, including an attempt to turn Kurds into Turks by banning use of Kurdish as a language that sparked a still ongoing low level insurgency, is anything to go by, China’s ability to achieve a similar goal with greater brutality is questionable.

“Most Uyghur young men my age are psychologically damaged. When I was in elementary school surrounded by other Uyghurs, I was very outgoing and active. Now I feel like I have been broken… Quality of life is now about feeling safe,” said Alim, a young Uyghur, describing to Adam Hunerven, a writer who focuses on the Uyghurs, arrests of his friends and people trekking south to evade the repression in Xinjiang cities.

Travelling in the region in 2014, an era in which China was cracking down on Uyghurs but that predated the institutionalization of the re-education camps, Mr. Hunerven saw that “the trauma people experienced in the rural Uyghur homeland was acute. It followed them into the city, hung over their heads and affected the comportment of their bodies. It made people tentative, looking over their shoulders, keeping their heads down. It made them tremble and cry.”

There is little reason to assume that anything has since changed for the better. On the contrary, not only has the crackdown intensified, fear and uncertainty has spread to those lucky enough to live beyond the borders of China. Increasingly, they risk being targeted by the long arm of the Chinese state that has pressured their host countries to repatriate them.

Born and raised in a Rohingya refugee camp in Bangladesh, Rahima Akter, one of the few women to get an education among the hundreds of thousands who fled what the United Nations described as ethnic cleansing in Myanmar, saw her dreams and potential as a role model smashed when she was this month expelled from university after recounting her story publicly.

Ms. Akter gained admission to Cox’s Bazar International University (CBIU) on the strength of graduating from a Bangladeshi high school, a feat she could only achieve by sneaking past the camp’s checkpoints, hiding her Rohingya identity, speaking only Bengali, dressing like a Bangladeshi, and bribing Bangladeshi public school officials for a placement.

Ms Akter was determined to escape the dire warnings of UNICEF, the United Nations’ children agency, that Rohingya refugee children risked becoming “a lost generation.”

Ms. Akter’s case is not an isolated incident but part of a refugee policy in an environment of mounting anti-refugee sentiment that threatens to deprive Rohingya refugees who refuse to return to Myanmar unless they are guaranteed full citizenship of any prospects.

In a move that is likely to deepen a widespread sense of abandonment and despair, Bangladeshi authorities, citing security reasons, this month ordered the shutting down of mobile services and a halt to the sale of SIM cards in Rohingya refugee camps and restricted Internet access. The measures significantly add to the isolation of a population that is barred from travelling outside the camps.

Not without reason, Bangladeshi foreign minister Abul Kalam Abdul Momen, has blamed the international community for not putting enough pressure on Myanmar to take the Rohingyas back.

The UN “should go to Myanmar, especially to Rakhine state, to create conditions that could help these refugees to go back to their country. The UN is not doing the job that we expect them to do,” Mr. Abdul Momen said.

The harsh measures are unlikely to quell increased violence in the camps and continuous attempts by refugees to flee in search of better pastures.

Suspected Rohingya gunmen last month killed a youth wing official of Bangladesh’s ruling Awami League party. Two refugees were killed in a subsequent shootout with police.

The plight of the Uyghurs and the Rohingya repeats itself in countries like India with its stepped up number of mob killings that particularly target Muslims, threatened stripping of citizenship of close to two million people in the state of Assam, and unilateral cancellation of self-rule in Kashmir.

Shiite Muslims bear the brunt of violent sectarian attacks in Afghanistan and Pakistan. In Malaysia, Shiites, who are a miniscule minority, face continued religious discrimination.

The Islamic Religious Department in Selangor, Malaysia’s richest state, this week issued a sermon that amounts to a mandatory guideline for sermons in mosques warning against “the spread of Shia deviant teachings in this nation… The Muslim ummah (community of the faithful) must become the eyes and the ears for the religious authorities when stumbling upon activities that are suspicious, disguising under the pretext of Islam,” the sermon said.

Malaysia, one state where discriminatory policies are unlikely to spark turmoil and political violence, may be the exception that confirms the rule.

Ethnic and religious supremacism in major Asian states threatens to create breeding grounds for violence and extremism. The absence of effective attempts to lessen victims’ suffering by ensuring that they can rebuild their lives and safeguard their identities in a safe and secure environment, allows wounds to fester.

Permitting Ms. Akter, the Rohingya university student, to pursue her dream, would have been a low-cost, low risk way of offering Rohingya youth an alternative prospect and at the very least a reason to look for constructive ways of reversing what is a future with little hope.

Bangladeshi efforts to cut off opportunities in the hope that Rohingya will opt for repatriation have so far backfired. And repatriation under circumstances that do not safeguard their rights is little else than kicking the can down the road.

Said human rights advocate Ewelina U. Ochab: “It is easy to turn a blind eye when the atrocities do not happen under our nose. However, we cannot forget that religious persecution anywhere in the world is a security threat to everyone, everywhere.”

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Chinese ‘Darning’ in South China Sea and International Apathy

Prof. Pankaj Jha

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India has asked for the renewal of the contract with regard to exploration rights in Block 128 which is located in Vietnamese Exclusive Economic Zone(EEZ). The contract for exploration had expiredin June 2019. This effort to renew the contract is meant to give a signal to China that India would not succumb to Chinese bullying tactics and is a legitimate stakeholder in South China Sea/East Sea. China has threatened the joint exploration initiatives of Russia, India and Vietnam near Vanguard Bank. Chinese undertook assertive posture by deploying its advanced coastguard ships and even latest bombers. Chinese strategy in the months of July and August was to bring about a media fatigue in reporting so that major tensions or even ships cruising close to each other can be passed off as routine affair.

Many strategic commentators have stated that Chinese have been using the ‘salami slicing’ tactics in South China Sea/ East Sea but it is more of a darning in which the Chinese have been pinching the corners of South China Sea/ East Sea to create a Chinese strategic space through a critical grid. The expansion of Chinese activities in those areas which are not contested is meant to first get the resource profile of the region under the garb of research activity and also thwart any economic activity in adjoining areas of the contested waters. The biggest challenge is that the geographic coordinates of the nine-dash line is not clear, and the international response has only been a strong rhetorical statements. It is only when India has been intimidated and the US has started freedom of navigation sail that some responses are seen from the two countries. It needs to be noted that when a UN Security Council member(China) tries to undermine international regulations, and respect for international peace and stability in those contested waters then it is appropriate to raise the voice at the P-5 high table.

Among the international responses on the tensions near the Vanguard Bank,International Association of Democratic Lawyers (IADL) which supports international law under the Economic and Social Council of the United Nations (ECOSOC) criticized Chinese assertive aggression.Criticizing Chinese ships bullying in waters ofThi Tu island and Luconia Shoals, it released a statement stating that Chinese survey activities undertaken by Haiyang Dizhi 8 in continental shelf of Vietnam was complete disregard for Vietnamese sovereignty of the waters under UNCLOS 1982. IADL further urged the claimant states to sign and ratify the Code of Conduct (COC) and bring a compliance mechanism. European nations- UK, Germany and France also took strong position on the subject and deplored Chinese activities near Vanguard Bank and highlighted that tensions in the South China Sea “could lead to insecurity and instability in the region”. The latent tensions between US and China overflowed during the Indian Ocean Conference 2019 recently held (September 3-4) in Maldives where Harry Harris,US Ambassador to South Korea remarked, “China’s diplomacy seeks to force ASEAN members to define codes of conduct in the region dictated by Beijing and conforming to Chinese standards. You can see intimidation in China’s militarization and defiance of international law”. He added while responding to questions, “That the military bases that China has created…(with) literally a great wall of sand in the middle of the South China Sea are all illegal”.China’s Ambassador of Ocean Affairs Wei Hongtian attending the conference rebutted and said, “China has indisputable sovereignty over the Nansha Islands (Spratly Islands) in the South China Sea and adjacent waters…,” clearly justifying the bullying tactics adopted by his country. 

Looking into international response on the subject is more of a routine affair with India oft repeated stance that it supports freedom of navigation and freedom to explore and undertake commercial activities within EEZ of nations. If one analyses the Chinese annoying tactics then one can observe that it has intimidated countries across region starting with Malaysia, Philippines, Vietnam (the three claimants to South China Sea) and Japan (East China Sea) clearly defining the perimeter of the nine dash line. As China has built structures and even placed anti-aircraft and anti-ship missiles, and few fighter aircrafts, it wants to keep them in active mode through sorties and regular patrols outside the claimed zone. One can use the metaphor the ‘cow tongue is now salivating’. China has been trying hard to somewhat subjugate Vietnamese claims and this can be seen in the context of land borders also. In the India-China border there are non-demarcated pockets, Chinese soldiers regularly visit the contentious territories and express their claim through leaving certain signs. In the maritime domains, the same strategy is being adopted where recurrent visits and patrols would help them define new areas of control. The fishermen militia has been doing their task of forewarning and also collecting data with regard to passing ships and patrols. The fishermen militia of China is equipped with cameras and other equipment to collect as much information possible and report back to the party headquarters. More recently,there have been reports that China has deployed its highly sophisticated surveillance ships in Andaman waters, clearly marking its intent in checking India’s naval preparedness and the utility of the tri services command in Andaman and Nicobar Islands.

The international response to deteriorating situation in South China Sea has been discussed when Indian defence Minister Rajnath Singh visited Japan and also Indian Ambassador to Vietnam had a detailed discussion with the Vietnamese communist party leadership. The recent provocations in the oil block explored by ONGC, India might force India to deploy itscoast guard ships and also station one of the advanced corvettescloser to the Vietnamese EEZ. As alreadywith the situation getting out of hand, India would like to deploy its P-8I PoseidonMaritimeSurveillanceaircraft to protect its assets. Countries such asUK, Germany, France and Japan have alsoraisedconcernsrelated to the Chineseaggressive moves in the region and the recently conducted US –ASEAN exercisesbetween Gulf of Thailand and South China Sea would reinforce US presence in these waters. The problem with Chineseapproach it that it is extending itself far too wide without thinking about a serious backlash. In a hypotheticalsituation in case Vietnam allows stationing of the US ships around Vietnameseislands then Chinese hegemony would be seriously jeopardized. Also,Vietnam have kept the window open for negotiations and also bringing about peace in the waters as recurrent tensions and dangerousmaneuvers would be detrimental to the long term interest of all fishing communities. Chinahas also made it clearduring the recent visit of PhilippinesPresidentDuterte that the July 11,2016 ruling does not hold any meaning to the communist country. The option of joint exploration proposed by China is only meant to buy time and space so that the increasing rig deployment and operating costs would make smaller nations to wrench out making way for complete control of China even in those areas which are non-disputed and lie in EEZ of other countries.

The challenge is to makeChina accountable for itsactions and make it understand that the prickly attitude would mean that it would be antagonizing too many neighbours at the same time. India hasalready been annoyed because of China’s stance on abrogation of Article 370 and 35A in Kashmir and division of Jammu and Kashmir, and Ladakh as two Union territories, leading the informal discussion in the UN Security Council. PM Modi has been hesitant to start the informal dialogue with President Xi given the recent stance adopted by China on Kashmir issue. The complex equation which is emerging in South China Sea along with recurrent tensions would mean that China would emerge as the trouble maker with no respect for international law and maritime sovereign boundaries. The bullying by China will have identical effect across the region. The problem is what are the options for the international community when major oil companies have been asked not to venture in South China Sea and China is defining its new strategic courtyard. The exercises with US and group sail might become a recurrent feature and also tensions are going to rise. The challenge would be to reduce militarization of the contested waters given the fact that China is known for not respecting agreements and international laws. 

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Can the International Court of Justice answer Pakistan’s knock on its door?

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Authors: Shatakhi Kaul and Aaditya Vikram Sharma*

Pakistan’s Foreign Minister Mr. Shah Mehmood Qureshi has said that the country will approach the International Court of Justice against India’s recent actions in Jammu and Kashmir.Is this rhetoric or is there any substance in his comments?

On 5 August 2019, India revoked the special status given to Jammu and Kashmir under Article 370 of the Constitution of India. Pakistan’s Prime Minister, Mr. Imran Khan stated that he would take up this issue in all international forums. Significantly, on 16 August 2019, the dispute was heard by the United Nations Security Council (SC) for the first time since 1971, however no statement was issued by the SC. The Pakistani PM also stated that his country is considering how to approach the International Court of Justice (ICJ). On 20 August 2019, the Foreign Minister of Pakistan, Mr. Shah Mehmood Qureshi categorically stated that the country will approach the ICJ. The question which arises is whether the ICJ is a sustainable avenue for the Kashmir dispute?

The International Court of Justice

The ICJ is an international court which was established by the United Nations Charter in June 1945. Countries which join the United Nations (UN) automatically become parties to the ICJ. Located in the Peace Palace at the Hague, the court settles contentious disputes in accordance with international law. It also gives advisory opinions on legal questions referred to it by authorized UN organs and specialized agencies. To take up any case, the court first needs to establish its jurisdiction. As stated above, it has two types of jurisdictions— contentious and advisory.

Contentious Jurisdiction

Let’s first talk about contentious cases. If Pakistan wishes to file a claim against India at the ICJ, it would be under this jurisdiction. As per Article 34 of the Statute of the ICJ, only States can be parties to cases. Further, there will be no jurisdiction without the consent of the State concerned. So, if Pakistan files a case in the ICJ against India regarding Kashmir, the court will be able to go ahead with the case only if India gives consent to it. This consent is deemed to be given under Article 36 of the Statute of the ICJ, which deals with the compulsory jurisdiction of the court. However, Article 36 (2) allows countries to give declarations, which alters the general jurisdiction of the world court concerning them. These declarations are looked into by the court when a case is filed by one State against another. In case of a dispute regarding the ICJ’s jurisdiction, the matter is resolved by the court’s decision under Article 36 (6).

India’s declaration specifies that the ICJ’s jurisdiction does not extend to any matters dealing with any nation which is or was a member of the Commonwealth of Nations. Pakistan is a commonwealth nation. In 1999,Pakistan approached the ICJ after India shot down a Pakistani Breguet Atlantic maritime patrol aircraft over the Rann of Kutch. The court refused to entertain the case on the basis of India’s commonwealth declaration.

Further, both India and Pakistan have declared that no dispute shall be taken up by the ICJ in case a treaty mechanism exists. The Shimla Agreement, 1971 and the Lahore Declaration, 1999 form part of such an arrangement. But, there is another option for Pakistan. If an international treaty allows nations to approach the ICJ, then the doors are open to its intervention. For instance, in the Jadhav Case (India v. Pakistan), the ICJ deemed that it had jurisdiction through Article 1 of the Optional Protocol to the Vienna Convention on Consular Relations which had been ratified by both the countries.

Pakistan has said that it will approach the ICJ against the alleged human rights violations in Jammu and Kashmir. So, here, it would be apt to consider International Human Rights treaties. In a recent article, Judge James Crawford (currently a sitting judge at the ICJ) and Amelia Keane (formerly an Associate Legal Officer at ICJ) stated that only five Human Rights treaties allow access to the ICJ. India has ratified four of them- the Convention on the Prevention and Punishment of the Crime of Genocide, the Convention on the Political Rights of Women, the International Convention on the Elimination of All Forms of Racial Discrimination, and the Convention on the Elimination of All Forms of Discrimination Against Women. None of them apply to the situation at hand. The most relevant international human rights treaty, the International Covenant on Civil and Political Rights, 1966,does not open the door to approach the ICJ. In other words, a contentious jurisdiction for this issue will be very difficult (if not impossible), to establish for Pakistan.

Advisory Jurisdiction

Article 96 of the UN Charter allows either the General Assembly or the Security Council or any organ/specialized agency of the UN to approach the ICJ and request an advisory opinion. The opinion of the court is not binding but carries great weight. In such cases, the consent of States is not necessary. Further, the ICJ is willing to rule on questions which have both legal and political elements. This is what happened in the Advisory Opinion concerning the Legality of the Threat or Use of Nuclear Weapons. In that case, the ICJ ruled that the question put to it was a legal one, as it had to adjudge the case on the basis of relevant principles and rules of international law. The presence of the political aspect was irrelevant until the legal element existed.

The same happened recently when the ICJ rendered its Advisory Opinion in the Chagos Archipelago case. The Chagos islands historically formed part of the British Colony of Mauritius. In 1965, three years before Mauritius became independent, the British detached it from the colony and made it part of British Indian Ocean Territory (BIOT).  When Mauritius gained independence in 1968, the archipelago was denied to it. Mauritius tried to file a contentious case against Great Britain, but the ICJ lacked jurisdiction. However, the General Assembly (GA) was able to refer the question to the ICJ. In its opinion, the court deemed that the UK should end its control of the island as rapidly as possible.

So could an advisory case with reference to Kashmir end up at the ICJ? Maybe. In the Chagos Island case, the ICJ specifically noted that it had taken up the Chagos dispute because the GA had not asked it to determine a territorial question (para 86). The Kashmir dispute is fundamentally a territorial dispute. However, the human rights angle could still be explored by the court. Nevertheless, advisory cases can only end up with the ICJ if nations agree to do so. It is not clear if Pakistan would be able to wrangle up enough diplomatic muscle to bring majority nations on board in the UN for referring the dispute to the ICJ. In the SC meeting on the 16th of August, an isolated China rendered the sole support to Pakistan. It was a closed doors meeting and no statement was issued.

Closing

It seems Pakistan’s aim is not to get a decision from the world court, but rather to get the Kashmiri issue internationalised. Prima facie, ICJ has no jurisdiction in the matter. Its advisory jurisdiction cannot be compelled either. So will the ICJ open the door to Pakistan? It doesn’t seem likely.

*Aaditya Vikram Sharma is an Assistant Professor at Vivekananda Institute of Professional Studies, Delhi. Both authors are writing in their personal capacity.

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