Dispute Settlement Report_pil

7/29/2019 Dispute Settlement Report_pil

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Panpacific University North Philippines

COLLEGE OF LAW

3/25/2013LAW 226 - Public International Law


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COLLEGE OF LAW


What is a

dispute?


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a dispute exists when oneState claims that another Stashould behave in a certainmanner and that claim isrejected by the latter. (KELSE


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A dispute is a contest of somespecificity,

the resolution of which has some

practical effect on the relationsbetween the parties.(MALONE)


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Dispute isa disagreement on a point oflaw or fact,

a conflict of legal views or ofinterests between two persons.


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An international dispute, in otherwords, is an actual disagreementbetween states regarding the

conduct to be taken by one of thefor the protection or vindication othe interests of the other.


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JURISPRUDENCE

The Maurommatis PalestineConcessions, Greece vs. Great

Britain,

August 30, 1924, PCIJ , Ser. B., No

3, 1924


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Would a suit brought by aState in behalf of one of itsnationals against another

State constitute aninternational legal disputebetween the two States?


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This question was answeredin the affirmative by thePermanent Court of

International Justice in theMavrommatis PalestineConcessions Case


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In the said case, Greece isasserting its own rights byclaiming from the Government o

Great Britain an indemnity on theground that M. Mavrommatis, onof its subjects,


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has been treated by the Palestinor British authorities in a manneincompatible with certain

international obligations whichthey were bound to observe.


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In the case of Mavrommatisconcessions, it is true that thedispute was at first between a

private person and a Statei.e.,between M. Mavrommatis andGreat Britain.


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Subsequently, the GreekGovernment took up the case.The dispute then entered upon

new phase; it entered thedomain of International Law, abecame a dispute between twoStates.


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The Permanent Courtof International

Justice ruled that,


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Once a State has taken up acase on behalf of one of itssubjects before an internation

tribunal, in the eyes of the lattthe State is sole claimant.


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The fact that Great Britain andGreece are the opposing Partiesto the dispute arising out of the

Mavrommatis concessions issufficient to make it a disputebetween two States.


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Where the disagreement hasnot yet ripened into a full-blown conflict or the issues

have not yet been sufficientlyformulated and defined, thereis what is known as asituation.

Nota bene:


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therefore, situation is,the initial stage of a

dispute.


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A dispute is LEGAL ifit involves justiciable rightsbased on law or fact

susceptible of adjudication bya judicial or arbitral tribunal.


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An example isa conflict on theinterpretation of a treaty

or the ascertainment of theboundaries of adjacent

states.


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A dispute is POLITICAL if itcannot be decided by legalprocesses on the basis of the

substantive rules ofinternational law.

Why?


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Because the differences ofthe parties spring fromanimosities in their mutual

attitudes rather than froman antagonism of legalrights.


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On the claim of thePhilippines on the Spratleys.

1. Is there a dispute or only a

situation?2. Is it legal or political?


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How can a

dispute besettled?


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Disputes are required to be

settled, conformably to one ofthe basic principles of theUnited Nations, by peaceful

means in such manner thatinternational peace and securityand justice, are notendangered.

P ifi U i it N th Phili i


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COLLEGE OF LAW


What is the role of theUnited Nations in the

settlement ofinternational

disputes?

P ifi U i it N th Phili i


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COLLEGE OF LAW


United Nations CharterArticle 1 (1)

Article 2 (3)

Article 33 (1)answered the question!

Panpacific Uni ersit North Philippines


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To maintain international peace andsecurity, and to that end: to takeeffective collective measures for th

prevention and removal of threats tthe peace, and for the suppression acts of aggression or other breache

of the peace,

Article 1 (1)



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and to bring about by peacefulmeans, and in conformity with theprinciples of justice and internation

law, adjustment or settlement ofinternational disputes or situationswhich might lead to a breach of the

peace;

Article 1 (1)



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All Members shall settle theirinternational disputes bypeaceful means in such a

manner that international peaceand security, and justice, arenot endangered.

Article 2 (3)



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The parties to any dispute, t

continuance of which is liketo endanger the maintenanc

of international peace andsecurity, shall, first of all, se

a solution by

Article 33 (1)



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negotiation, enquiry, mediation,

conciliation, arbitration, judicialsettlement, resort to regionalagencies or arrangements, orother peaceful means of their owchoice. (will be discussed later)

Article 33 (1)



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May a member of theUnited Nations bringa dispute to the

attention of theGeneral Assembly?



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U.N. Charter, Art. 35 [1]

Any member of the UnitedNations may bring any dispute,or any situation of the nature

referred to in Article 34, to theattention of Security Council orof General Assembly .



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a pac c U e s ty o t pp es

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U.N. Charter, Art. 34

The Security Council may investigate adispute, or any situation which might leto international friction or give rise to adispute, in order to determine whether

continuance of the dispute or situation likely to endanger the maintenance ofinternational peace and security.



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p y pp

COLLEGE OF LAW


But, what happened to Thinvasion of Iraq by thecombined forces of the

United States, Britain andAustralia ?



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p y pp

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The invasion provoked world-wide protest le

by France, Russia and China, all members othe Big Five. They contended that the attack

was done without authorization from the

Security Council which wanted to give the UN

inspection team more time to look for theweapons of mass destruction that US Presid

George W. Bush insisted the Iraqi governme

was concealing.



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COLLEGE OF LAW


Unable to get UN permission, the United Sta

nevertheless began bombarding Iraq, invokinan earlier inconclusive resolution of the Secu

Council adopted after the terrorist attacks in

country on September 11, 2002. The consen

in legal quarters dismissed such resolution aheld that the United States needed another

resolution categorically calling for armed

sanction against Iraq.



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The Iraqi crisis has raised questions

about the effectiveness of the SecurCouncil in maintaining international

peace and security and the practical

value of the rule requiring theunanimity of the Big Five in deciding

non-procedural questions.



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COLLEGE OF LAW


The threatened veto by France of the

US proposal for the immediateinvasion of Iraq caused the United

States to go it alone and may have

demonstrated the impotence of thUnited Nations in enforcing thepurposes and principles defined i

its Charter.



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May a state which is notmember of the UnitedNations bring a dispute tothe attention of the SecurityCouncil or of the GeneralAssembly?



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A non-member state may bring to the

attention of the Security Council or theGeneral Assembly any dispute providedthat:

1. It is a party to the dispute; and2. It accepts in advance, for the purpos

of the dispute, the obligations ofpacific settlement provided in theCharter.


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What are the powers ofthe General Assemblywith respect to the

dispute that are broughtto its attention?


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The General Assembly withrespect to the disputes that ithears are limited to establishingfact-finding missions andmaking recommendations,


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but although the actions of the

General Assembly may havesignificant political influences,state are under no legal

obligation to cooperate with thefact-finding missions or to followrecommendations.


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What are the powers ofthe Security Councilwith respect to the

disputes that arebrought to its attention?


COLLEGE OF LAW


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Under Art. 34, the Security Council

may investigate any dispute inorder to determine whether thecontinuance of the dispute or

situation is likely to endanger themaintenance of international peaceand security and if so,


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under Art. 37, its shall decide

whether to take appropriateaction or to recommend suchterms of settlement as it mayconsider appropriate.


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NON JUDICIALMETHODS


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A. NEGOTIATION,

(generally the first step) thediscussion undertaken by theparties themselves of their

respective claims andcounterclaims with a view totheir just and orderly adjustment


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COLLEGE OF LAW


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B. INQUIRY - is an

investigation of the points inquestion, on the theory thattheir elucidation will contributeto the solution of thedifferences between theparties.


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The U.N. is empowered to call the

parties concerned to explain theirposition on a dispute and mayattempt to narrow their differences,

reconcile their opposing views and ifnecessary recommend a just and faisolution.


COLLEGE OF LAW


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In the Dogger Bank Case, Russian

vessels fired in a fog on theEnglish fishing fleet off DoggerBank during the Russo-Japanese

War and caused the death of twofishermen, injuries to others andconsiderable destruction of

property.


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Russia maintained that the firing wasdue to the approach of Japanesetorpedo boats, and a commission ofinquiry was created to verify this claimThe finding was that there were notorpedo boats present at the time ofthe incident and, as a result, Russiaagreed to pay 65,000 to Great Britai


COLLEGE OF LAW


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The US and Chile in 1992-93 set up

an Enquiry Commission todetermine the amount of damagesto be paid to the US by Chile for

allegedly killing two persons inWashington by Chilean intelligencofficers and the dispute was settle


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C. GOOD OFFICES - is method by

which a third party attempts tobring the disputing statestogether in order to enable themto discuss the issues incontention and arrive at anagreement.


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This is usually employed when

the parties are no longer onspeaking terms, that is, when thehave severed diplomatic relations

or have actually commencedhostilities.


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This is referred to as quiet diplomacy

since the process often involvesentrusting the dispute to personalitieswith special qualification on whom bo

parties agree. This might involve, forexample, heads of State or theSecretary-General of the UnitedNations, or their designees


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The Russo-Japanese War, for

example, was terminated through thegood offices of President TheodoreRoosevelt of the United States who

succeeded in bringing the partiestogether to the conference table forthe conclusion of a negotiatedpeace.


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D. MEDIATION like good offices,

mediation is an adjunct ofnegotiation, but with the mediatoras an active participant, authorized,

and even expected, to advance hisown proposals and to interpret, aswell as to transmit, each partys

proposals to each other.


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The third party does not merely

provide the opportunity for theantagonists to negotiate but alsoactively participates in their

discussions in order to reconciletheir conflicting claims and appeasetheir feelings of resentment.


COLLEGE OF LAW


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In 1978, U.S. President Jimmy Carter

mediated between Egypt and Israel aachieved the Camp David AgreemenMarch 1979. Under the AgreementEgypt recognized diplomatically Israand in return Israel withdrew its troofrom Sinai Peninsula, occupied byIsrael in the 1967 war


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E. CONCILIATION a method

that combines the characteristicsof both enquiry and mediation.While mediation is ordinarily

carried out by one person,conciliation is usually conductedby an organization


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(ASEAN or NATO) or by a group of

States

(Malaysia, Bangladesh and Pakistan

were given the task by OIC to brokerpeace between Iran and Iraq warduring the 80s)


COLLEGE OF LAW


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QUASI-JUDICIALMETHODS/

ARBITRATION


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ARBITRATION - is the solution

of a dispute by an impartial thiparty, usually a tribunal createby the parties themselves unda charter known as thecompromise,


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which will provide for, among

others, the composition of thebody and the manner of theselection of its members, its

rules of proceedings andsometimes even the law to be

applied by it,


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and the issues of fact or law to be

resolved. Unlike in conciliation, theproceedings are essentially judicialand the awards is, by previousagreement, binding on the parties tothe dispute.


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This method is similar tojudicial

settlement not only in the nature ofthe proceedings and the bindingcharacter of the decisions but also inthe fact that the disputes submittedfor adjudication are legal rather thanpolitical.


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They differ inthe followingpoints:


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1. The judicial tribunal is,

generally speaking, a pre-existing and permanent bodywhereas the arbitral tribunal in

an ad hoc body created andfilled by the parties to thedispute themselves.


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2. Jurisdiction in judicial

settlement is usuallycompulsory whereassubmission to arbitration is

voluntary.


COLLEGE OF LAW

Th l li d b th t ib


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3. The law applied by the tribuna

in judicial settlement isindependent of the will of theparties but may be limited by

them in arbitrationproceedings.


COLLEGE OF LAW

judicial settlement arbitrationTRIBUNAL


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pre-existing and

permanent body

created and filled by

parties to the disputhemselves

JURISDICTION

compulsory Voluntary submiss

LAW APPLICABLE

independent of the will of

the parties

may be limited by t

parties


COLLEGE OF LAW


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ADVANTAGES ofarbitration as a methoof settlement ofdisputes


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1. It is more conclusive than the

other forms of non-judicialdispute settlement because thdecisions of the arbitral panels

are binding upon the parties;


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Th di i i i


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2. The disputing parties retain

greater control in the arbitratioprocess because they appointthe arbitrators;


COLLEGE OF LAW

Th ti d i t th


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3. The parties may designate the

procedures and the laws to beapplied;

4. Arbitration is less formal and

less contentious thanadjudication; and


COLLEGE OF LAW

B th th bit ti di


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5. Both the arbitration proceedin

and decisions can be keptconfidential, a great advantagein dispute regarding sensitive

matters.


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DISADVANTAGES ofarbitration as a methoof settlement ofdisputes


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If th ti d t


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1. If the parties do not

specify procedures,arbitration may be very

cumbersome and time-consuming process;


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A bit ti l d t


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2. Arbitration panels do not

have authority of courts conduct discovery or

subpoena witnesses; an


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Th ti th l


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3. The parties themselves

pay for the entire cost ofthe arbitration.


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V lid d f t


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Valid defenses tothe enforcement of

an arbitral award


COLLEGE OF LAW

As a rule arbitral awards are binding


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As a rule, arbitral awards are bindingon the parties. However, Article V ofthe United Nations Conventions of thRecognition and Enforcement ofForeign Arbitral Awards (The New YoConvention), adopted in June 10, 195provides the following defenses to thenforcement of an arbitral award:


COLLEGE OF LAW

The parties to the


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a) The parties to the

agreement were, under tlaw applicable to them,

under some incapacity;


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b) The agreement is not valid


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b) The agreement is not valid

under the law agreed upon parties, or, failing anyindication thereon, under th

law of the country where theaward was made;


COLLEGE OF LAW

) The party against whom the


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c) The party against whom the

award is invoked was not giveproper notice of theappointment of the arbitrator o

of the arbitration proceedings was otherwise unable to presethis case;

Panpacific University North PhilippinesCOLLEGE OF LAW

d) The award deals with a


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d) The award deals with a

difference not contemplated byor not falling within the terms othe submission to arbitration, o

it contains decisions on matterbeyond the scope of thesubmission to arbitration;


e) The composition of the arbitral


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e) The composition of the arbitral

authority or the arbitralprocedure, was not inaccordance with the agreemen

of the parties;


f) The award has not yet become


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f) The award has not yet become

binding on the parties, or hasbeen set aside or suspended ba competent authority of the

country in which that award wamade;


g) The subject matter of the


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g) The subject matter of the

difference is not capable ofsettlement by arbitration underthe law of that country in which

the award was made;


h) The enforcement of the award


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h) The enforcement of the award

would be contrary to the publicpolicy of that country.


Let us walk you through a


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Let us walk you through a

case where the Philippineswas involved.


Case:


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Fraport v. PhilippinesYear the case was initiated:

2003

Year the award was rendered:2007


Country involved:


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y

Philippines

Home country of the investor:

Germany


Parties to the dispute:


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p

Fraport AG Frankfurt AirportServices Worldwide v. Republic o

the Philippines (ICSID Case No.ARB/03/25)


Type of investment:


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yp

Construction of NAIA terminal 3

Nature of dispute / claim:

Claim arising out of annulment oContract


Legal instrument:


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g

Agreement between the FederalRepublic of Germany and theRepublic of the Philippines for th

Promotion and the ReciprocalProtection of Investments


Rules / Venues:


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International Center for Settlemeof Investment Dispute (ICSID)Amount sought by investor:

approx US$ 450 million


Amount awarded / status of dispute:


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Tribunal lacks jurisdictionArbitrators:

L. Yves Fortier (Chair); Canadia

Bernardo M. Cremades; SpanisW. Michael Reisman, U.S.


Decisions rendered:


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Award issued on 16 August 200

Status:

Awarded in favor of the state(Philippines)


On 17 September 2003, the Claimant


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filed its request for arbitration with tInternational Centre for Settlement oInvestment Disputes against theRespondent for the resolution of

divergencies having arisen amongstthe parties to this arbitration.


The Request was submitted in accordan


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with the ICSID arbitration provisions

contained in the Treaty, in particularparagraph 2 of Article 9 of the BIT entitle"Settlement of Disputes between a

Contracting State and an Investor ofanother Contracting State":


"If such divergencies cannot be


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g

settled according to the provisionof paragraph (1) of this Articlewithin six months from the date o

request for settlement, the investconcerned may submit the disputo:


[] (b) the International Centre fo


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[ ] ( )

the Settlement of InvestmentDisputes through conciliation orarbitration."


For the reasons set forth herein


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and pursuant to Rules 41(5) and47(1)(i) and (j) of the ArbitrationRules and Article 61(2) of the

Convention, a majority of theArbitral Tribunal decides:


1. To accept the objection to the


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jurisdiction of the InternationaCentre for Settlement ofInvestment Disputes raised by

the Republic of the Philippines


2. To declare that the Centre doe


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not have jurisdiction to hear thdispute and that this ArbitralTribunal is not competent to

resolve it;


3. To dismiss the claim of Frapor


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AG Frankfurt Airport ServicesWorldwide; and


4. To order that each party shall bear f ll it l l t d th t th


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full its own legal costs and that the

payment of the fees and expenses the members of the Arbitral Tribunaand of the administrative fees for th

use of the Centre shall be paid inequal share by each party.


An investor that contravenes the


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law of the Host State of theinvestment must expect to sufferthe consequences prescribed by

law.


The principle of legality in


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investment arbitration, like theprinciples ofpacta sunt servandaand good faith, applies equally to

both Parties.


Indeed, the very purpose of


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investment arbitration is todetermine the legality of theconduct of the Host State and the

investor under the applicable law


JUDICIAL METHODS/


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JUDICIAL METHODS/

THE INTERNATIONALCOURTS


Judicial settlement is a decision ba Court In the U N system the


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a Court. In the U.N. system, theInternational Court of Justice is aintegral part of the U.N. and theCourt, with seat at The Hague (theNetherlands), decides inter-statesdisputes.


States MUST AGREE


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States MUST AGREErefer to the Court for decision.


JURISDICTION of


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JURISDICTION ofthe International

Court of Justice


The jurisdiction of the Courtcomprises all case which the


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comprises all case which theparties refer to it and all mattersspecially provided for in the

Charter of the United Nations or itreaties and conventions in force(ICJ Statute, Art.36[1])


LIMITATIONS on the


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jurisdiction of theInternational Court of

Justice(ICJ).


1. Only states may be parties in


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contentious cases before theCourt (ICJ Statute, Art. 34); an

2. The consent of the states is

needed for the court to acquirejurisdiction (Id., Art. 36)


Art. 36


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The court is competent to entertaa dispute only if the statesconcerned have accepted its

jurisdiction in one or more of thefollowing ways:


1. By the conclusion between theof a special agreement


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of a special agreement(compromise) to submit thedispute to the Court


2. By virtue of a jurisdiction clause,i e typically when they are partie


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i.e., typically, when they are partie

to a treaty containing a provisionwhereby in the event of adisagreement over its interpretati

or application, one of them mayrefer the dispute to the Court;


3. Through the reciprocal effect ofdeclarations made by them under


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declarations made by them under

the Statute whereby each hasaccepted the jurisdiction of theCourt as compulsory in the event

a dispute with another State havimade a similar declaration.


Other


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International

Court of Justice


1. European Court of Justice (EC


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the Supreme Court of theEuropean

Union


COLLEGE OF LAW

Functions :

a) to examine the legality of Community


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acts and to ensure that Community lawis interpreted and applied uniformly.

b) resolves disputes between Communityinstitutions or between those

institutions and the Member States (oreven between Member Statesthemselves).


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2. BENELUX Court of


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JusticeBelgium,

Netherlands and

Luxembourg


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Function:

1. promote the uniform


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p

interpretation of common legalrules for which it has becomecompetent (e.g., concerning

trademarks, penalties, motorvehicle insurance, movement ofpersons, and protection of birds).


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3. EFTA Court of


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3 Cou t oJustice


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the Court of the EFTA States parties

to the European Area Agreement


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to the European Area Agreement

(EEA), disputes between the

contracting Parties, between the

EFTA Surveillance Authority andcontracting Parties,


COLLEGE OF LAW

and between the EFTA Surveillance

Authority and the addressee of a


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Authority and the addressee of a

decision of the authority or a person

directly and individually concerned

such a decision.


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4. EUROPEAN


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COURT OFHUMAN RIGHTS


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also known as the Strasbourg Court was

established in November 1998 pursuant to the en


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into force of Protocol No. 11 to the EuropeanConvention for the Protection of Human Rights

(1950) establishing a single court sitting fulltime a

replacing the European Commission of Human

Rights (1954) and the European Court of HumanRights (1959). It has its seat in Strasbourg, Franc


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The Courts primary function is to

ensure compliance by the High


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ensure compliance by the High

Contracting Parties with their

commitments arising from the

European Convention for theProtection of Human Rights.


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The Court hears and decides

complaints of human rights violation


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complaints of human rights violation

allegedly committed by States

Parties, and brought to the Court

either by other States Parties or byindividuals subject to the jurisdiction

of a State Party.


COLLEGE OF LAW


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ThankYou!!!

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