yearbook of the international law commission 1973 volume ii

A/CN.4/SER.A/1973/Add.l

YEARBOOKOF THE

INTERNATIONALLAW COMMISSION

1973Volume II

Documents of the twenty-fifth sessionincluding the report of the Commission

to the General Assembly

U N I T E D N A T I O N S

YEARBOOKOF THE

INTERNATIONALLAW COMMISSION

1973Volume II

Documents of the twenty-fifth sessionincluding the report of the Commission

to the General Assembly

UNITED NATIONS

New York, 1975

NOTE

Symbols of United Nations documents are composed of capital letters combinedwith figures. Mention of such a symbol indicates a reference to a United Nationsdocument.

The word Yearbook followed by suspension points and the year (e.g.Yearbook... 1970) indicates a reference to the Yearbook of the International LawCommission.

A/CN.4/SER. A/1973/Add. 1

UNITED NATIONS PUBLICATION

Sales No. E.74.V.5

Price: SU.S. 10.00

(or equivalent in other currencies)

CONTENTS

Page

Filling of casual vacancies in the Commission (agenda item 1)

Document A/CN.4/268: note by the Secretariat 1

Succession of States in respect of matters other than treaties (agenda item 3)

Document AICN.4I267: Sixth report on succession of States in respect of matters otherthan treaties, by Mr. Mohammed Bedjaoui, Special Rapporteur—draft articles withcommentaries on succession to public property 3

Question of treaties concluded between States and international organizations or betweentwo or more international organizations (agenda item 4)

Document A/CN.4/271: Second report on the question of treaties concluded betweenStates and international organizations or between two or more international organ-izations, by Mr. Paul Reuter, Special Rapporteur 75

Priority to be given to the topic of non-navigational uses of international watercourses(para. 5 of section I of General Assembly resolutions 2780 (XXVI) and 2926 (XXVII))(agenda item 5 (b))

Document A/CN.4/270: Supplementary report on the legal problems relating to the non-navigational uses of international watercourses requested by the General Assemblyin resolution 2669 (XXV)—Advance report submitted by the Secretary-Generalpursuant to General Assembly resolution 2926 (XXVII) 95

Most-favoured-nation clause (agenda item 6)

Document A/CN.4/266: Fourth report on the most-favoured-nation clause, by Mr. EndreUstor, Special Rapporteur—draft articles (articles 6-8) with commentaries (continued) 97

Document A/CN.4/269: Decisions of national courts relating to the most-favoured-nationclause digest prepared by the Secretariat 117

Co-operation with other bodies (agenda item 8)

Document A/CN.4/272: Report on the fourteenth session of the Asian-African LegalConsultative Committee, by Mr. Abdul Hakim Tabibi, Observer for the Commission 155

Report of the Commission to the General Assembly

Document A/9010/Rev.1: Report of the International Law Commission on the work of its

twenty-fifth session (7 May-13 July 1973) 161

Check list of documents referred to in this volume 237

Check list of documents of the twenty-fifth session not reproduced in this volume 239

FILLING OF CASUAL VACANCIESIN THE COMMISSION

[Agenda item 1]

DOCUMENT A/CN.4/268

Note by the Secretariat

[Original text: English][29 March 1973]

1. Following the death on 14 March 1973 of Mr. Gonzalo Alcivar and theelection on 30 October 1972 of Mr. Nagendra Singh, Mr. Jose Maria Ruda andSir Humphrey Waldock as judges of the International Court of Justice, four seatshave become vacant on the International Law Commission.

2. In this case, article 11 of the Commission's Statute is applicable. It prescribes:

In the case of a casual vacancy, the Commission itself shall fill the vacancy having dueregard to the provisions contained in articles 2 and 8 of this Statute.

Article 2 reads:

1. The Commission shall consist of twenty-five members who shall be persons ofrecognized competence in international law.

2. No two members of the Commission shall be nations of the same State.

3. In case of dual nationality a candidate shall be deemed to be a national of the Statein which he ordinarily exercises civil and political rights.

Article 8 reads:

At the election the electors shall bear in mind that the persons to be elected to theCommission should individually possess the qualifications required and that in the Com-mission as a whole representation of the main forms of civilization and of the principallegal systems of the world should be assured.

3. The term of office of the members to be elected by the Commission willexpire at the end of 1976.

SUCCESSION OF STATESIN RESPECT OF MATTERS OTHER THAN TREATIES

[Agenda item 3]

DOCUMENT A/CN.4/267

Sixth report on succession of States in respect of matters other than treaties,by Mr. Mohammed Bedjaoui, Special Rapporteur

Draft articles with commentaries on succession to public property

[Original text: French][20 May 1973]

CONTENTSPage

Abbreviations 9

Explanatory note: italics in quotations 9

Paragraphs

Part One. Preliminary provisions relating to succession of States in respect of matters other than treaties . . 1-2 9

Article 1. Scope of the present articles 9

Article 2. Cases of succession of States covered by the present articles 9

Article 3. Use of terms 9

Paragraphs

Part Two. Draft articles on succession to public property 3-4 9

I. PRELIMINARY PROVISIONS

Article 4. Sphere of application of the present article 9Article 5. Definition and determination of public property 9

II. GENERAL PROVISIONS

Article 6. Transfer of public property as it exists 10

Article 7. Date of transfer of public property 10

Article 8. General treatment of public property according to ownership 10

III. PROVISIONS COMMON TO ALL TYPES OF SUCCESSION OF STATES

Article 9. General principle of the transfer of all State property 10

Article 10. Rights in respect of the authority to grant concessions 10

Article 11. Succession to public debt-claims 10

IV. PROVISIONS RELATING TO EACH TYPE OF SUCCESSION OF STATES

Section 1. Partial transfer of territory

Article 12. Currency and the privilege of issue 10

Article 13. Treasury and public funds 10

Article 14. Archives and public libraries 10

Article 15. Property situated outside the transferred territory 10

3

Yearbook of the International Law Commission, 1973, vol. II

CONTENTS (continued)

PageSection 2. Newly independent States


Article 17. Public funds and Treasury 11


Article 19. Property situated outside the territory of the newly independent States 11

Section 3. Uniting of States and dissolution of unions




Article 23. Property situated outside the territory of the union 11

Section 4. Disappearance of a State through partition or absorption




Article 27. Property situated outside the absorbed or partitioned territory 11

Section 5. Secession or separation of one or more parts of one or more States




Article 31. Property situated outside the detached territory 12

V. PROVISIONS RELATING TO PUBLIC ESTABLISHMENTS

Article 32. Definition of public establishments 12

Article 33. Public establishments of the transferred territory 12

Article 34. Property of the State in public establishments 12

Article 35. Case of two or more successor States 12

VI. PROVISIONS CONCERNING TERRITORIAL AUTHORITIES

Article 36. Definition of territorial authorities 12

Article 37. Public property proper to territorial authorities 12

Article 38. Property of the State in territorial authorities 12

Article 39. Divided territorial authorities 12

VII. PROPERTY OF FOUNDATIONS

Article 40. Property of foundations 12

Part Three. Commentaries and observations on the preliminary provisions on succession of States in respectof matters other than treaties

Article 1. Scope of the present articles 13

Commentary 13

Article 2. Cases of succession of States covered by the present articles 13

Commentary 14

Article 3. Use of terms 15

Commentary 15

A. Definition of succession of States 15B. Definition of the terms "predecessor State" and "successor State" 15

C. Other terms used 15

Succession of States in respect of matters other than treaties


Paragraphs Page

Part Four. Draft articles on succession to public property, with commentaries 5-51 16

INTRODUCTION 5-15 16

I. PRELIMINARY PROVISIONS 17

Article 4. Sphere of application of the present articles 17Commentary 17

Article 5. Definition and determination of public property 17Commentary 17

A. Public property 17

B. Rights and interests 19C. Unliquidated claims and rights 19

Paragraphs

II. GENERAL PROVISIONS 16-19 19

Article 6. Transfer of public property as it exists 19Commentary 19

Article 7. Date of transfer of public property 19

Commentary 19

Article 8. General treatment of public property according to ownership 20Commentary 20

III. PROVISIONS COMMON TO ALL TYPES OF SUCCESSION OF STATES 22

Article 9. General principle of the transfer of all State property 22Commentary 22

Article 10. Rights in respect of the authority to grant concessions 24Commentary 24

A. Definition of a "concession" 24

1. A concession is an act of the public authorities 25

2. A concession is an act granting permission to manage a public service or exploit a natural resource 26

3. The concessionaire is a private person or enterprise or sometimes even a State 26

B. "Rights in respect of the authority to grant concessions" and their legal nature 26C. Obligations in respect of concessions, a question to be left pending 27

Article 11. Succession to public debt-claims 28

Commentary 28

A. Introduction 28

B. Patrimonial rights "defined by law" 29

C. Observations on article 11 29

Paragraphs

IV. Provisions relating to each type of succession of States 20-51 29

Introduction: Types considered 20-51 29

A. Succession without the creation or disappearance of a State (case of partial transfer ofterritory) 31-32 31

B. Succession by creation of a State not entailing the disappearance of the predecessor State(case of newly independent States) 33-38 31

C. Succession by creation of a State and disappearance of the predecessor State or States (casesof uniting of States, dissolution of unions, merger and creation of "composite" States) . . . 39-43 32

D. Succession without the creation of a State but entailing the disappearance of the predecessor 44-48 33

E. Special case of separation of part of a State (secession) 49-51 33

Yearbook of the International Law Commission, 1973, vol. II


Page

Section!. Partial transfer of territory 34


Commentary 34

A. Introduction 34

B. The privilege of issue 35

C. Currency 35

D. Case of partial transfers of territory to various pre-existing successor States 35

Article 13. Treasury and public funds 36

Commentary 36

A. Public funds 36

1. State public funds 36

2. Funds proper to the transferred territory 36

B. Treasury 37

Article 14. Archives and public libraries 37Commentary 37

A. Definition of items affected by the transfer 38

B. The principle of the transfer of archives to the successor State 38

1. Archives of every kind 382. Archives as an instrument of evidence 383. Archives as an instrument of administration 38

C. The archives-territory link 39

D. Archives situated outside the territory 39

1. Archives which have been removed 40

2. Archives established outside the territory 41

E. Problem of the "ownership" of archives 42

F. Special obligations of the successor State 42

G. Time-limits for handing over the archives 42

H. Transfer and return free of cost 42

Article 15. Property situated outside the transferred territory 43

Commentary 43

A. Introduction 43

B. Property proper to the transferred territory which is situated outside that territory 44

1. Property proper to the territory which is situated in the predecessor State 44

Non-transferability of ownership of property of this kind 44

Modification of the legal regime governing property of this kind 44

2. Property proper to the transferred territory which is situated in a third State 44

C. Property of the predecessor State which is situated outside the territory retained by that State . . . 44

Section 2. Newly independent States 45


Commentary 45

Article 17. Public funds and Treasury 47Commentary 47

A. Public funds 47

1. Funds proper to the territory 47

2. State funds 47

B. Treasury 47



Page


Commentary 48

A. The archives-territory link 48

B. Archives situated outside the territory that has become independent 48

1. Archives which have been removed 48

2. Archives established outside the territory 49

C. Special obligations of the newly independent States 49

Article 19. Property situated outsuie the territory of the newly independent State 49

Commentary 50

A. Property proper to the territory that has become independent 50

1. Property which is situated in the former metropolitan country 50

2. Property which is situated in a third State 51

B. Property belonging to the predecessor State which is situated in a third State 52

Section 3. Uniting of States and dissolution of unions 52


Commentary 52


Commentary 52


Commentary 53

Article 23. Property situated outside the territory of the union 54

Commentary 54

Section 4. Disappearance of a State through partition or absorption 54


Commentary 54

Article 25. Public funds and Treasury 55Commentary 55


Commentaries and observations 55

Article 27. Property situated outside the absorbed or partitioned territory 55

Commentary 55

Section 5. Secession or separation of one or more parts of one or more States 57


Commentary 57


Commentary 57


Commentary 57

Article 31. Property situated outside the detached territory 58

Commentary 58

Yearbook of the International Law Commission, 1973, vol.


Page

V. PROVISIONS RELATING TO PUBLIC ESTABLISHMENTS 59

Article 32. Definition of public establishments 59

Commentary 59

A. The public establishment administers a public service 59

B. The public establishment may engage in an economic activity 60

C. The establishment of public utility or general interest 60

D. The public or public utility character 60

1. Link with the population 60

2. Link with the economy of the territory 60

E. Criteria for a definition 60

1. Arbitral award concerning the interpretation of article 260 of the Treaty of Versailles 60

2. Decision of the United Nations Tribunal in Libya 61

3. Decision of the P.C.IJ. in a case relating to a Hungarian public university establishment . . . . 61

F. Determination by treaty 61

Article 33. Public establishments of the transferred territory 61

Commentary 62

Article 34. Property of the State in public establishments 62Commentary 62

A. Automatic and complete succession 63

B. Succession limited to the property of public establishments situated in the territory 64

C. Succession on condition of purchase 64

D. Temporary use of property by the predecessor State 65

Article 35. Case of two or more successor States 65

Commentary 66

VI. Provisions concerning territorial authorities 66

Article 36. Definition of territorial authorities 66

Commentary 66

Article 37. Public property proper to territorial authorities 67Commentary 67

Article 38. Property of the State in territorial authorities 68Commentary 68

Article 39. Divided territorial authorities 68

Commentary 68

VII. PROPERTY OF FOUNDATIONS 69

Article 40. Property of foundations 69

Commentary 69

A. Patrimonial situation unchanged 69

B. Exceptions to the principle 71

C. Property of the State in foundations 72

D. The property of the Moslem Institute and of the Mosque in Paris 72


ABBREVIATIONS

I.C.J.I.C.J. ReportsP.C.I.J.P.C.I.J., Series A/B

International Court of JusticeI.C.J., Reports of Judgments, Advisory Opinions and OrdersPermanent Court of International JusticeP.C.I.J., Judgments, Orders and Advisory Opinions

EXPLANATORY NOTE: ITALICS IN QUOTATIONS

An asterisk inserted in a quotation indicates that, in the passage immediately preceding theasterisk, the italics have been supplied by the Special Rapporteur.

Part One

Preliminary provisions relating to succession ofStates in respect of matters other than treaties

1. The following provisions relate to the whole field of"succession of States in respect of matters other thantreaties" and should consequently precede considerationof succession of States in respect of public property. Theyare, of necessity, fragmentary and will be supplementedas the International Law Commission progresses in itswork in the various fields under consideration.

2. For the time being, these preliminary provisionscomprise the following articles:

Part Two

Draft articleson succession to public property

3. In his third,1 fourth a and fifth 3 reports, the SpecialRapporteur prepared a set of draft articles, with com-mentaries and observations, on succession of States inrespect of public property.

4. Having reconsidered his draft and deemed it neces-sary to take into account the work of the InternationalLaw Commission in the field of succession of States inrespect of treaties, he submits below the following draftarticles:

Article 1. Scope of the present articles

The present articles apply to the effects of succession of States inrespect of matters other than treaties.

Article 2. Cases of succession of Statescovered by the present articles

The present articles apply only to the effects of a succession ofStates occurring in conformity with international law and, in particular,the principles of international law embodied in the Charter of theUnited Nations.

Article 3. Use of terms

For the purposes of the present articles:

(a) "Succession of States" means the replacement of one sovereigntyby another with regard to its practical effects on the rights and obli-gations of each for the territory affected by the change of sovereignty;

(b) "Predecessor States" means the State which has been replacedby another State on the occurrence of a succession of States;

(c) "Successor State" means the State which has replaced anotherState on the occurrence of a succession of States.


Article 4. Sphere of application of the present articles

The present articles relate to the effects of succession of States inrespect of public property.

Article 5. Definition and determinationof public property

For the purposes of the present articles, "public property" meansall property, rights and interests which, on the date of the change ofsovereignty and in accordance with the law of the predecessor State,were not under private ownership in the territory affected by thechange of sovereignty or which are necessary for the exercise ofsovereignty by the successor State in the said territory.

1 Yearbook... 1970, vol. II, p. 131, document A/CN.4/226.2 Yearbook ... 1971, vol. II (Part One), p. 157, document A/CN.4/

247 and Add.l.3 Yearbook... 1972, vol. II, p. 61, document A/CN.4/259.

10 Yearbook of the International Law Commission, 1973, vol. II


Article 6. Transfer of public property as it exists

1. The predecessor State may transfer a territory only on theconditions upon which that State itself possesses it.

2. In accordance with the provisions of the present articles, publicproperty shall be transferred to the successor State as it exists andwith its legal status.

Article 7. Date of transfer of public property

Save where sovereignty has been restored and is deemed to beretroactive to the date of its termination or where the date of transferis, by treaty or otherwise, made dependent upon the fulfilment of asuspensive condition or simply upon the lapse of a fixed period oftime, the date of transfer of public property shall be the date on whichthe change of sovereignty

(a) occurs dejure through the ratification of devolution agreements,or

(b) is effectively carried out in cases where no agreement exists orreference is made in an agreement to the said effective date.

Article 8. General treatment of public propertyaccording to ownership

AH other conditions established by the present articles being fulfilled.

(a) Public or private property of the predecessor State shall passwithin the patrimony of the successor State;

(6) Public pioperty of authorities or bodies other than States shallpass within the juridical order of the successor State;

(c) Property of the territory affected by the change of sovereigntyshall pass within the juridical order of the successor State.

III. PROVISIONS COMMON TO ALL TYPESOF SUCCESSION OF STATES

Article 9. General principleof the transfer of all State property

Property necessary for the exercise of sovereignty over the territoryaffected by the succession of States shall devolve, automatically andwithout compensation, to the successor State.

Article 10. Rights in respect of the authorityto grant concessions

1. For the purposes of the present article, the term "concession"means the act whereby the State confers, in the territory within itsnational jurisdiction, on a private enterprise, a person in private lawor another State, the management of a public service or the exploi-tation of a natural resource.

2. Irrespective of the type of succession of States, the successorState shall replace the predecessor State in its rights of ownership ofall public property covered by a concession in the territory affected bythe change of sovereignty.

3. The existence of devolution agreements regulating the treatmentto be accorded to concessions shall not affect the right of eminentdomain of the State over public property and natural resources of itsterritory.

Article 11. Succession to public debt-claims

1. Irrespective of the type of succession of States, public debt-claims which are proper to the territory affected by the change ofsovereignty shall remain in the patrimony of that territory.

2. The successor State shall, when the territorial change is effected,become the beneficiary of the public debts of all kinds receivable bythe predecessor State by virtue of the exercise of its sovereignty orof its activity in the territory concerned.

IV. PROVISIONS RELATING TO EACH TYPEOF SUCCESSION OF STATES

SECTION 1. PARTIAL TRANSFER OF TERRITORY

Article 12. Currency and the privilege of issue

1. The privilege of issue shall belong to the successor State through-out the transferred territory.

2. Currency, gold and foreign exchange reserves, and, in general,monetary tokens of all kinds circulating or stored in the territory shallpass to the successor State.

3. The assets of the central institution of issue in the predecessorState, including those allocated for the backing of issues for theterritory transferred, shall be apportioned in proportion to the volumeof cunency circulating or held in the territory in question.

Article 13. Public funds and Treasury

1. Public funds, liquid or invested, belonging to the predecessorState and situated in the transferred territory, shall pass into thepatrimony of the successor State.

2. Irrespective of where they are situated, public funds, liquid orinvested, which are proper to the transferred territory shall continueto be allocated and to belong to the transferred territory.

3. Upon closure of the public accounts relating to Treasury oper-ations in the transferred territory, the successor State shall receivethe assets of the Treasury and shall assume responsibility for costsrelating thereto and for budgetary and Treasury deficits. It shall alsoassume the liabilities on such terms and in accordance with such rulesas apply to succession to the public debt.

Article 14. Archives and public libraries

1. Archives and public documents of every kind relating directly orbelonging to the transferred territory, and public libraries of thatterritory shall, irrespective of where they are situated, follow thetransferred territory.

2. The successor State shall not refuse to hand over copies of suchitems to the predecessor State or to any third State concerned, uponthe request and at the expense of the latter State, save where theyaffect the security or sovereignty of the successor State.

Article 15. Property situated outsidethe transferred territory

1. Subject to the application of the rules relating to recognition,public property proper to the transferred territory which is situatedoutside that territory shall pass within the juridical order of thesuccessor State.

2. The ownership of property belonging to the predecessor Statewhich is situated in a third State shall devolve to the successor Statein the proportion indicated by the contribution of the transferredterritory to the creation of such property.

SECTION 2. NEWLY INDEPENDENT STATES


1. The privilege of issue shall belong to the new sovereignty through-out the newly independent territory.

Succession of States in respect of matters other than treaties 11

2. Currency, gold and foreign exchange reserves, and, in general,monetary tokens of all kinds which are proper to the territory con-cerned shall pass to the successor State.

3. In consideration of the foregoing, the successor State shallassume responsibility for the exchange of the former monetaryinstruments, with all the legal consequences which the substitutionof currency entails.


1. Public funds, liquid or invested, which are proper to the territorythat has become independent shall remain the property of that ter-ritory, irrespective of where they are situated.

2. Public funds of the predecessor State, liquid or invested, whichare situated in the territory that has become independent shall passinto the patrimony of that territory.

3. The rights of the Treasury of the territory that has becomeindependent shall not be affected by the change of sovereignty, vis-a-vis the predecessor State or otherwise.

4. The obligations of the Treasury of the territory that has becomeindependent shall be assumed by that territory on such terms and inaccordance with such rules as apply to succession to the public debt.


1. Archives and public documents of every kind relating directly orbelonging to the territory that has become independent, and publiclibraries of that territory, shall, irrespective of where they are situated,be transferred to the newly independent State.

2. The newly independent State shall not refuse to hand over copiesof such items to the predecessor State or to any third State concerned,upon the request and at the expense of the latter State, save wherethey affect the security or sovereignty of the newly independent State.

Article 19. Property situated outsidethe territory of the newly independent State

1. Public property proper to the territory that has become indepen-dent which is situated outside that territory shall remain its propertyupon its accession to independence.

2. Public property belonging to the predecessor State which issituated in a third State shall be apportioned between the predecessorState and the newly independent State proportionately to the latter'scontribution to the creation of such property.

SECTION 3. UNITING OF STATES AND DISSOLUTION OF UNIONS


1. The privilege of issue shall belong to the successor State through-out the territory of the union or of each State in the event of dissolutionof the union.

2. In the event of dissolution of the union, the assets of the jointinstitution of issue shall be shared pro parte between the successorStates, which in consideration of the foregoing shall assume responsi-bility for the obligations relating to the substitution of new currenciesfor the former currency.


1. The union shall receive as its patrimony the public funds andTreasuries of each of its constituent States except where the degree oftheir integration in the union or treaty provisions allow each State toretain all or part of such property.

2. In the event of dissolution of the union, the public funds andTreasury of the union shall be apportioned equitably between itsconstituent States.


1. Except where otherwise specified in treaty provisions aimed atthe establishment of a collection of common central archives, archivesand public documents of every kind belonging to a State which uniteswith one or more other States, and its public libraries, shall remainits property.

2. In the event of dissolution, the central archives of the union andits libraries shall be placed in the charge of the successor State towhich they relate most closely or apportioned between the successorStates in accordance with any other criteria of equity.

Article 23. Property situated outsidethe territory of the union

1. Property situated outside the territory of the union and belongingto the constituent States shall, unless otherwise stipulated by treaty,become the property of the union.

2. Property of the union situated outside its territory shall, in theevent of dissolution, be apportioned equitably between the successorStates.

SECTION 4. DISAPPEARANCE OF A STATE

THROUGH PARTITION OR ABSORPTION


1. The privilege of issue shall belong to the successor State in theterritory absorbed or the portion of territory allocated to it in thepartition.

2. The successor State or States shall take over the assets of theinstitution of issue and shall assume its liabilities in proportion to thevolume of currency in circulation or held in the territory in question.


1. The successor State shall receive the public funds and theTreasury belonging to the absorbed State in their entirety, irrespectiveof where the assets in question are situated. It shall assume responsi-bility for the obligations relating thereto so far as the rules applyingto succession to the public debt permit.

2. In the event of partition of a State among two or more pre-existing States, each of them shall succeed to a portion, which shallbe determined by treaty, of the public funds and the Treasury.


1. Ownership of archives and public documents of every kind, andpublic libraries, belonging to the absorbed State shall be transferredto the successor State, irrespective of where such property is situated.

2. Archives and public documents of every kind, and public li-braries, belonging to the State partitioned among two or more othersshall be apportioned between the successor States with particularregard to the link existing between such property and the territorytransferred to each State.

Article 27. Property situated outsidethe absorbed or partitioned territory

1. Subject to the application of the rules relating to recognition,ownership of all public property of the State that has disappearedwhich is situated outside its territory shall devolve to the successorState.

2. In the event of total dismemberment of a State in favour of twoor more other pre-existing States, property situated outside the Statethat has disappeared shall be shared equitably among the successorStates.

12 Yearbook of the International Law Commission, 1973, vol.

SECTION 5. SECESSION OR SEPARATION OF ONE OR MORE PARTS

OF ONE OR MORE STATES


1. The privilege of issue shall belong to the successor State through-out the detached territory or territories.

2. Currency, gold and foreign exchange reserves, and, in general,monetary tokens of all kinds which are proper to the detached Stateshall pass to the successor State.

3. In consideration of the foregoing, the successor State shallassume responsibility for the exchange of the former monetaryinstruments, with all the legal consequences which this substitution ofcurrency entails.


1. Irrespective of their geographical location, public funds andTreasury which are proper to the detached territory shall not beaffected by the change of sovereignty.

2. The State fortune—its public funds and Treasury assets—shallbe apportioned between the predecessor State and the successor State,due regard being had to the criteria of viability of each of the States.


1. Archives and public documents of every kind relating directly orbelonging to a territory which has become detached in order to form aseparate State, and public libraries of that State, shall, irrespective ofwhere they are situated, be transferred to that State.

2. The successor State shall not refuse to hand over copies of suchitems to the predecessor State or to any third State concerned, at theirrequest and at their expense, save where they affect the security orsovereignty of the successor State.

Article 31. Property situated outsidethe detached territory

1. Where a State comes into being as a result of the detachment of apart of the territory of one or more States, the ownership of publicproperty belonging to the said constituent territory or territorieswhich is situated outside their frontiers shall not be affected by suchchange or changes of sovereingty.

2. Public property belonging to the predecessor State which issituated hi a third State shall become the property of the successorState in proportion to the contribution of the detached territory tothe creation of such property.

V. PROVISIONS RELATINGTO PUBLIC ESTABLISHMENTS

Article 32. Definition of public establishments

For the purposes of the present articles, "public establishments"means those bodies or enterprises which engage hi an economicactivity or provide a public service and which are of a public or publicutility character.

Article 33. Public establishments of the transferred territory

Public establishments which belong entirely to the transferredterritory shall not be affected by the mere fact of the change ofsovereignty.

Article 34. Property of the State in public establishments

The successor State shall be automatically and fully subrogated tothe patrimonial rights which the predecessor State possesses in publicestablishments situated in the transferred territory.

Article 35. Case of two or more successor States

Where there are two or more successor States, the patrimonialrights of the predecessor State in public establishments situated in thetransferred territories shall be apportioned between the successorStates in accordance with the criteria of geographical location,origin of the property and the viability of the said establishments, andsubject, where necessary, to equalization payments and offset.

VI. PROVISIONS CONCERNINGTERRITORIAL AUTHORITIES

Article 36. Definition of territorial authorities

Version A

For the purposes of the present articles, "territorial authority"means any administrative division of the territory of a State.

Version B

For the purposes of the present articles, "territorial authority"means any administrative division of the territory of a State which ischaracterized by its own territory, population and administrativeauthority but does not possess international legal personality.

Article 37. Public propertyproper to territorial authorities

Version A

The change of sovereignty shall leave intact the ownership of thepatrimonial property, rights and interests proper to territorial auth-orities.

Version B

The change of sovereignty shall leave intact the ownership of thepatrimonial property, rights and interests proper to territorial auth-orities, which shall be incorporated, hi the same manner as the saidauthorities themselves, in the juridical order of the successor State.

Article 38. Property of the Statein territorial authorities

1. The share of the predecessor State in the property, rights andinterests of a territorial authority shall be transferred ipsojure to thesuccessor State.

2. Where there are two or more successor States, the said shareshall be apportioned between them, with due regard to the viability ofthe territorial authority, to the geographical location and origin of theproperty, and subject, where necessary, to equalization payments andoffset.

Article 39. Divided territorial authorities

Where the change of sovereignty has the effect of dividing a ter-ritorial authority into two or more parts attached to two or moresuccessor States, the patromonial property, rights and interests of theterritorial authority shall be apportioned equitably between the saidparts, due regard being had to the viability of the latter, to the geo-graphical location and origin of the property, and subject, where necess-ary, to equalization payments and offset.


Article 40. Property of foundations

1. So far as the public policy of the successor State permits, thelegal status of the property of religious, charitable or cultural foun-dations shall not be affected by the change of sovereignty.


2. Where the predecessor State possessed a share in the patrimonyof a foundation, that share shall be transferred to the successor State;where there are two or more successor States, it shall be apportionedequitably between them.

Part Three

Commentaries on the preliminary provisionson succession of States in respect of matters

other than treaties


The present articles apply to the effects of succession ofStates in respect of matters other than treaties.

COMMENTARY

(1) This article, which corresponds to the one adoptedby the Commission in the draft on succession of Statesin respect of treaties,4 makes it possible to define thescope of the subject along the lines laid down in the firstreport by the Special Rapporteur 5 and in accordancewith the instructions given to him by the Commission atits twentieth session.6

(2) It will be remembered that the Commission, at theSpecial Rapporteur's request, changed the title of histopic, which was originally entitled "Succession of Statesin respect of rights and duties resulting from sourcesother than treaties".

In paragraphs 19 to 21 of his first report, the SpecialRapporteur had stated that the original title might makethe subject impracticable because the word "treaty"was used in different ways, referring to a subject matterof the law of succession in the topic assigned to SirHumphrey Waldock, and to an instrument of that lawin the topic assigned to the second Special Rapporteur.

(3) The Commission agreed to take the same approachto both topics and consequently defined the topic assignedto the Special Rapporteur as "Succession in respect ofmatters other than treaties".

(4) This topic encompasses the succession of States inrespect of public property, public debts, legislation,nationality, personal status, acquired rights, and so on.These subjects will be covered by the provisions of thepresent articles and future articles, based on Statepractice whether expressed in treaties or not, and oninternal and international judicial practice.

The succession of States in respect of these subjectsmay have been regulated by treaties concluded betweenthe predecessor State and the successor State, such

agreements being regarded here as a means or instrumentof the law of succession, although they may already havebeen considered as a subject matter of the law of suc-cession in the topic considered by the Commission on thebasis of the reports prepared by Sir Humphrey Waldock.

In other words, just as in the work relating to the latterreports the problem of "succession to treaties by treaties"has not been neglected, so in this report the question of"succession by treaties to public property, public debtsand so on" will be encountered. The "devolution agree-ments" and any other relevant treaties regulating cases ofsuccession of States in respect of these subjects willtherefore be studied from the point of view of theirmaterial content and not from the point of view of theirformal and instrumental framework.

(5) The problem of the validity of these instruments willbe studied not from the standpoint of principle (this hasalready been done in the work on the law of succession ofStates in respect of treaties), but from the standpoint ofits practical impact on public property, public debts andso on.

(6) With regard to territorial regimes, dealt with inarticles 29 and 30 of the draft articles on succession ofStates in respect of treaties, the Special Rapporteur notedwith interest the reaction of certain members of the SixthCommittee at the twenty-seventh session of the GeneralAssembly:

Certain representatives, who supported articles 29 and 30,doubted whether the Commission had solved the doctrinal issueinvolved. Should the rules in these articles be formulated in termsof the boundary or territorial regime resulting from the dispositiveeffects of a treaty or should they relate to succession in respect ofthe treaty itself ? Articles 29 and 30 would seem to have been draftedfrom the standpoint that the question was not the continuance inforce of a treaty but that of the obligations and rights which devolvedupon a successor State,* but it could rightly be asked how, in legaltheory, the rights and obligations of parties emanating from acertain treaty could be separated from the international instrumentwhich had created those rights and obligations.

The view was expressed that if the provisions were drafted interms of the "regime", more than in terms of the "treaty", it wouldperhaps be more appropriate to include them in the future draft onthe part of the topic relating to succession of States in respect ofmatters other than treaties.7

The Special Rapporteur will in due course take accountof these suggestions, which reinforce the view he expressedin his first report when defining the scope of the subjecthe was to study.


The present articles apply only to the effects of a suc-cession of States occurring in conformity with internationallaw and, in particular, the principles of international lawembodied in the Charter of the United Nations.

4 For the text of the draft articles on succession of States inrespect of treaties, see Yearbook... 1972, vol. II, p. 230, documentA/8710/Rev.l, chap. II, sect. C.

6 Yearbook... 1968, vol. II, p. 94, document A/CN.4/204.6 Ibid., pp. 216 et seq., document A/7209/Rev.l, paras. 45 et seq.

' Official Records of the General Assembly, Twenty-seventhSession, Annexes, agenda item 85, document A/8892, paras. 106and 107.

14 Yearbook of the International Law Commission, 1973, vol. K

COMMENTARY

(1) In his fourth report the Special Rapporteur suggesteda draft article 1, accompanied by commentaries andworded as follows:

1. Territorial changes which occur by force or through a violationof international law or of the Charter of the United Nations shall bewithout legal effect.

2. The State which commits an act of conquest or annexation shallnot be deemed to be a successor State and, in particular, shall notacquire possession of the property of the predecessor State.8

(2) The particularly heavy agenda at its twenty-thirdsession made it impossible for the Commission to studythe work of the various Special Rapporteurs, except forthat of Mr. Abdullah EI-Erian, which was accordedpriority at the request of the General Assembly. TheSpecial Rapporteur was, however, able to benefit at thatsession by a number of suggestions made by the officersof the Commission, to whom he is particularly grateful.The following year, he therefore submitted in his fifthreport a reformulation of article 1, reading as follows:

The conditions for succession of States shall include respect forgeneral international law and the provisions of the United NationsCharter concerning the territorial integrity of States and the rightof peoples to self-determination.9

(3) In his commentaries on this article, the SpecialRapporteur stated that irrespective of the stage at whichthe Commission might wish, for reasons of convenience,to take up in one way or another the problem dealt within that article, he felt that a provision of the type suggestedwould inevitably have to be included, since it representeda "problem preliminary to all or any succession".10

The subsequent work of the Commission on successionof States in respect of treaties has confirmed the SpecialRapporteur in his opinion. Sir Humphrey Waldock putforward at the twenty-fourth session a draft article J 1

embodying more or less the same ideas, for which twodifferent versions were proposed, the first being based onarticle 73 of the Vienna Convention on the Law ofTreaties.12

(4) The Special Rapporteur, abandoning the idea ofsubmitting his own formulation, suggests that the Com-mission should eliminate the need for further discussionof the same problem by adopting forthwith, as a pre-liminary provision on succession of States in respect ofmatters other than treaties, the same provision which itput into final form at its twenty-fourth session as article 6of the draft on succession in respect of treaties. Thisarticle reads as follows:

The present articles apply only to the effects of a succession ofStates occurring in conformity with international law and, in particular,

8 Yearbook...l971, vol. II (Part One), p. 162, documentA/CN.4/247 and Add.l.

9 Yearbook..A972, vol. II, p. 66, document A/CN.4/259, para. 28.10 Ibid., para. 25. See also paras. 26 and 27.11 Ibid., p. 60, document A/CN.4/L.184.12 For the text of the Convention, see Official Records of the

United Nations Conference on the Law of Treaties, Documentsof the Conference (United Nations publication, Sales No. E.70.V.5),p. 289.

the principles of international law embodied in the Charter of theUnited Nations.

(5) The Special Rapporteur feels it would be a pity ifthe Commission were to forego adopting such an articlefor the subject-matter dealt with in this report merelybecause it has already been included in the draft articleson succession in respect of treaties.

Firstly, as the Commission itself points out in itscommentary to article 6, in certain situations it is notenough to rely on the general presumption that thearticles prepared by the Commission are to apply only tofacts occurring and situations established in conformitywith international law.

Thus, in its draft articles on the law of treaties the Commissionincluded, among others, specific provisions on treaties procured bycoercion and treaties which conflict with the norms of jus cogens aswell as certain reservations in regard to the specific subjects ofState responsibility, outbreak of hostilities and cases of aggression.13

(6) Secondly, contrary to the views expressed by some ofits members, the Commission wisely preferred not toconfine itself to discussing the need for such a provisiononly in the case of transfers of territory occurring inconformity with international law, considering quiterightly that "to specify the element of conformity withinternational law with reference to one category ofsuccession of States might give rise to misunderstandingsas to the position regarding that element in other cat-egories of succession of States".14 It is precisely theconcern to avoid such misunderstandings with regard tosuccession in respect of matters other than treaties thatmakes it necessary to reproduce that article here. Itwould therefore seem particularly inappropriate to treateach of the two sets of draft articles differently.

(7) Thirdly, it has become more essential than ever toreproduce this article, for its provisions are not auto-matically applicable to succession in respect of mattersother than treaties simply because it was included in thedraft articles on succession in respect of treaties. Indeed,precisely the contrary could be argued, i.e. that omittingthe article from one draft while including it in the otherwould necessarily mean that it was inapplicable to theformer.

Furthermore, the draft articles on succession in respectof treaties, in both their form and their scope, may havean autonomous legal existence and a destiny differentfrom that of the articles on succession in respect ofmatters other than treaties.

Finally, even if both drafts were to serve eventually asa basis for the conclusion of conventions on those sub-jects—as would be desirable (and as the Sixth Committeehas already decided for the first set of articles accordingto its report15)—it would be all the more advisable toinclude the same provision in the second report the sameprovision as has been included in the first, and preciselybecause it has been included in the first. The Commission

13 Yearbook...l972, vol. II, p. 236, document A/8710, Rev.l,chap. II, sect. C, para. 1 of the commentary to article 6.

14 Ibid., para. 2 of the commentary.16 Official Records of the General Assembly, Twenty-seventh

Session, Annexes, agenda item 85, document A/8892, para. 50.


is, in any case, technically accustomed to such a practice.Furthermore, there are many cases in which a givenprovision has been reproduced word for word, whennecessary, in a number of different conventions.16

(8) It should be noted, too, that the inclusion of article 2in the present draft is not based on theoretical consider-ations alone. There is a substantial corpus of relevantpractice and judicial decision, relating in particular tosuccession to public property, which the Special Rap-porteur mentioned in his fourth report.17



(«) "Succession of States" means the replacement ofone sovereignty by another with regard to its practicaleffects on the rights and obligations of each for the ter-ritory affected by the change of sovereignty;

(b) "Predecessor State" means the State which has beenreplaced by another State on the occurrence of a suc-cession of States;

(c) "Successor State" means the State which hasreplaced another State on the occurrence of a successionof States.

COMMENTARY

A. Definition of succession of States

(1) It will be recalled that the concept of "succession ofStates" which emerged from the work of the InternationalLaw Commission reads as follows:

. . . the expression "succession of States" is used throughout thearticles to denote simply a change in the responsibility for theinternational relations of a territory, thus leaving aside from thedefinition all questions of the rights and obligations as a legal incidentof that change*.16

(2) The Special Rapporteur is well aware thatA natural enough tendency also manifests itself both among

writers and in State practice to use the word "succession" as aconvenient term to describe any assumption by a State of rights orobligations previously applicable with respect to territory whichhas passed under its sovereignty without any nice consideration of

18 For example, the International Covenant on Civil and PoliticalRights and the International Covenant on Economic, Social andCultural Rights (General Assembly resolution 2200 (XXI) of16 December 1966) each contain an identical provision concerningthe right of peoples to dispose of their natural resources.

17 Yearbook.,1971, vol. II (Part One), pp. 163 et seq., documentA/CN.4/247 and Add.l, commentary to article 1, especially paras. 11(litigation between Haile Selassie and a cable and wireless company),12 (case of the Franco-Ethiopian railway), 14 (restoration of Poland),17 et seq. See also Yearbook...l970, vol. II, pp. 140-141, documentA/CN.4/226, paras. 30-32 of the commentary to article 8, andpassim.

18 Yearbook...l972, vol. II, p. 226, document A/8710/Rev.l,para. 30. The Commission had previously decided not to adopta general definition of succession, for at that stage of its workit considered that that seemed to be "a theoretical or academicmatter which should be avoided" being "of an abstract nature andof doubtful utility" {Yearbook...1968, vol. II, p. 217, documentA/7209/Rev.l, para. 48).

whether this is truly succession by operation of law or merely avoluntary arrangement of the States concerned.18

(3) The Special Rapporteur feels it would not have beenimpossible to work out a single definition of successionof States that would have been valid both for SirHumphrey Waldock's draft and for his own. This viewwas shared by some members of the Commission.20 Inany case, the definition on which the Commission basedits articles on succession of States in respect of treaties isinapplicable to the present draft. It is the "legal inci-dents" of the change of sovereignty, excluded from thefirst definition, which must necessarily be taken intoconsideration in the Special Rapporteur's draft.

(4) In turning from succession in respect of treaties tosuccession in respect of matters other than treaties, onepasses from the fact of the simple replacement of oneState by another in the responsibility for the internationalrelations of a territory to the problem of the concretecontent of the rights and obligations transferred as aresult of that fact to the successor State in the variousfields relating to public property, public debts, the statusof the inhabitants and so forth. But in so doing, one mustnot completely lose sight of the original fact of thereplacement of sovereignty which occasioned the transferor exercise of given rights and obligations. This is thevery thing which complicates the problems relating tosuccession of States.

(5) It is necessary—especially when the succession ofStates has not been regulated by treaty—to see whatbasic rules can be found to define the rights and obligationsof each State concerned. Consequently, succession ofStates seems to be more than the replacement of oneState by another in the responsibility for the internationalrelations of a territory. That is why the Special Rapporteursuggests tentatively that succession of States should betaken to mean "the replacement of one sovereignty byanother with regard to its practical effects on the rightsand obligations of each for the territory affected by thechange of sovereignty".

B. Definition of the terms "predecessor State"and "successor State"

(6) Here the Special Rapporteur has confined himself toreproducing the definitions adopted by the Commissionon the suggestion of Sir Humphrey Waldock. He feelsthat they are acceptable in the context of his own draftand would spare the Commission further debate onthese terms.

C. Other terms used

(7) Clearly, the present draft article 3 is incomplete ifnot embryonic and should include definitions of manymore of the terms used. For the time being, the SpecialRapporteur intends to leave this article in its present

18 Yearbook...l972, vol. II, p. 226, document A/8710/Rev.l,para. 28, and first report by Sir Humphrey Waldock (Yearbook...1968, vol. II, p. 91, document A/CN.4/202, para. 3 of thecommentary to article 1).

20 See, for example, the statement by Mr. Ushakov (.Yearbook...1972, vol. I, p. 33, 1156th meeting, para. 14.


form and to complete it as the Commission proceedswith its work.

It will probably become necessary to regroup inarticle 3 the definitions of public establishments (at presentthe subject of article 32), territorial authorities (the subjectof article 36) and perhaps public property itself (article 5),as well as the concept of concession (article 10, para-graph 1). In the interest of clarity, the Special Rapporteurwill retain this somewhat fragmented approach, and willmake the necessary rearrangements at a later stage ofthe Commission's work.

Part Four

Draft articles on successionto public property, with commentaries

INTRODUCTION

5. In taking up the topic of succession of States topublic property in his third and fourth reports, the SpecialRapporteur did not base his approach on theory, butsimply tried to state some pragmatic rules drawn fromthe practice of States. He therefore deliberately refrainedfrom going into the preliminary question whether thetransfer of public property is in fact part of the intern-ational law of State succession.

6. It might well be argued that since State successionconsists of the replacement of one sovereignty over aterritory by another, this means that the previous sover-eignty automatically loses its material support and thatthe rights of the predecessor State to public propertytherefore pass ipso jure to the successor State. The rightto public property would thus be seen as an effect of thecoming into existence, or of the existence, of a newsubject of international law in the territory concerned,and not as a consequence of State succession per se.

7. Viewed in this light, the theory of State successionwould not apply to the right and obligations of theState in relation to public property. Once internationallaw recognizes the validity of the juridical order, thiswould entail for the successor State a right to all State-owned public property. More precisely, internationallaw would simply recognize the validity of the new juridicalorder of the State expressed by and through the municipallegislation under which the automatic transfer of theright to public property takes place.

8. This approach reduces sovereignty to something thatwould be inconceivable without a set of operationaland material attributes such as, for example, the publicproperty which the States uses to meet certain essentialneeds of the inhabitants of its territory. However, thisapproach is open to one rather serious objection. If thesuccessor State automatically acquires public propertyby the mere fact of its own sovereignty and its own power,how does it come about that property situated outsidethe territory affected by the change, i.e., outside thesuccessor State's sphere of territorial jurisdiction, mayfall within its patrimony ?

9. The Special Rapporteur has accordingly abstainedfrom any purely theoretical study of this problem andof other problems which may arise from State successionto public property, and has confined himself to preparingdraft articles in terms as specific as possible. Throughouthis work he has tried to keep in mind a concern whichmay be expressed in the form of three questions: (1) Whatis public property'! (Problems of defining and determiningsuch property); (2) What is transferable public property?(Is it all public property, or property of public authorities,or State property alone ? Is it all State property or onlythe property appertaining to sovereignty?); (3) Is theownership of the property transferred (this is a questionof succession to property stricto sensu) or is the propertymerely placed under the control of the new juridicalorder (this brings in succession to legislation a well) ?

10. The draft articles proposed by the Special Rapporteurin his earlier work to cover succession to public propertywere based on a uniform approach. They were thereforedesigned to be applied indiscriminately to all types ofState succession.

11. In the present study the Special Rapporteur feelsobliged to take into account the new element introducedby the adoption in first reading by the InternationalLaw Commission of the draft articles on succession ofStates in respect of treaties, based on the reports of SirHumphrey Waldock, and the consideration of that draftby the Sixth Committee of the United Nations GeneralAssembly.

12. In order to make the work of the InternationalLaw Commission easier, the Special Rapporteur thereforeplans to follow the method and approach used in preparingthe rules concerning succession in respect of treaties,so far as that is compatible with the special features ofhis subject-matter. This approach clearly has advantages,for it will save the Commission time and make it possibleto standardize the matter examined, through a more orless parallel approach. Thus, for example, some articles,which have already been adopted by the Commissionand approved by the Sixth Committee, could, as appro-priate, be included in the present draft. Similarly, despiteits inadequacies, the classification of types of successionon which the Commission based its work could be usedin this draft, since the Special Rapporteur is preparedto cast his articles in the mould with which the Interna-tional Law Commission and the Sixth Committee arealready familiar. He therefore intends to review hisdraft, taking an analytical approach.

13. However, this method clearly has its limits. First,the very concept of "succession" must be re-evaluatedin the light of the meaning it must have in the area ofresearch assigned to the Special Rapporteur. Moreover,although the close relationship established betweentreaty law and the law of State succession in respectof treaties proved to be very fruitful, this approach isnaturally inapplicable in the case of the law of successionof States in respect of matters other than treaties.

14. On the other hand, as already indicated in all hisprevious reports, the Special Rapporteur feels that theprinciples of the Charter of the United Nations (and


in particular those relating to the right of peoples toself-determination and the right of peoples to disposefreely of their natural resources) must be fully expressedin the present draft, in the same way that those prin-ciples—or at least the principle of self-determina-tion—were felicitously embodied in the articles on Statesuccession in respect of treaties. In the case of successionto public property in particular, the right to self-determi-nation (which in that case takes the form of the elementaryprinciple of the viability of a new State), prompts theformulation of rules calling for the automatic transferto the successor State of the property necessary for theexercise of sovereignty over the territory concerned.

15. The Special Rapporteur proposes the followingprovisional work plan:

Parti: Preliminary provisions

Part II: General provisions

Part III: Provisions common to all types of suc-cession of States

Part IV: Provisions relating to each type of suc-cession of States(1) Partial transfer of territory(2) Newly independent States(3) Uniting of States and dissolution ofunions(4) Disappearance of a State throughpartition or absorption(5) Secession or separation of one or moreparts of one or more States

Part V: Provisions relating to public establishments

Part VI: Provisions concerning territorial authorities

Part VII: Property of foundations

Part VIII: Miscellaneous provisions


Article 4. Sphere of application of the present articles

The present articles relate to the effects of succession ofStates in respect of public property.

COMMENTARY

(1) There is little to be said about this draft article.It is not only useful, but so simple that comments arevirtually unnecessary. The basic purpose of the articleis to define the scope of the present articles: first, theydeal with succession of States and not with successionof Governments or succession in international organiza-tions, and second, they deal with public property and notother "subject-matters of the law of succession", suchas public debts, legislation, the status of the inhabitants,acquired rights and so on, or with treaties, which havealready been studied in another draft.(2) This public property is not defined in the presentarticle. It will be defined in the following article. However,

the Special Rapporteur has not specified in the presentarticle to which authority, State, territorial authorityor public establishment this public property must belong.Consequently, the article does not refer only to publicproperty belonging to the State but to all public property.The justification for this position taken by the SpecialRapporteur will be found in article 5.

Article 5. Definition and determinationof public property

For the purposes of the present articles, "publicproperty" means all property, rights and interests which,on the date of the change of sovereignty and in accordancewith the law of the predecessor State, were not under privateownership in the territory affected by the change of sov-ereignty, or which are necessary for the exercise of sov-ereignty by the successor State in the said territory.

COMMENTARY

A. Public property

(1) In this third report, the Special Rapporteur proposeda draft article 1 in two versions, providing both a definitionand methods for determining public property. Suchproperty was referred to as being property which is ofa "public" character because it belongs to the State, aterritorial authority or a public establishment or Corpora-tion. The long commentary by the Special Rapporteur 21

stressed the fact: (a) that a purely internationalist ap-proach to the notion of public property is impracticablesince there is in international law no autonomous criterionfor determining what constitutes public property; (b) thatthe determination of what constitutes public propertyby treaty or by international judicial decisions has itslimits and does not resolve all problems; and (c) thatwhatever the circumstances, recourse to municipallaw seems inevitable for such determination, the essentialquestion being which legislation—that of the predecessorState, that of the successor State or that of the territoryaffected by the change of sovereignty—should be appliedfor that purpose.

(2) Since the Special Rapporteur found practice andjudicial decisions somewhat contradictory,22 he proposedthat the determination of what constitutes public propertyshould be made by reference to the municipal law whichgoverned the territory concerned "save in the event ofserious conflict with the public policy of the successorState". He gave the reasons for this in paragraphs9-13 of the commentary on article 1 (third report).However, as soon as the municipal law of the predecessor

21 Yearbook...1970, vol. II, pp. 134-143, document A/CN.4/226,part two.

32 Cf. particularly the case of the British Protestant missionhospitals in Madagascar (ibid., p. 137, para. 18), the case of"habons" or "waqf" property in Algeria (ibid., p. 138, paia. 19),the case of the Central Rhodope forests (ibid., p. 139, paras. 21-23),the case of the Italian enti pubblici in Libya (ibid., paras. 24-25),the case of the property of the Order of Saint Maurice and St Lazaruson the Little Saint Bernard Pass (ibid., para. 26), the Peter PazmanyUniversity case (ibid., p. 140, paras. 27-30), the Chorz6w factorycase (ibid., pp. 141-142, paras. 31-35 and 36-42), the case of Germansettlers in Upper Silesia (ibid. pp. 142-143, paras. 43-45) and so on


State or of the territory affected by the change of sove-reignty has performed its function of determining whatconstitutes public property, it of course gives way to thejuridical order of the successor State. Once the propertyhas been characterized for the purposes of transfer, thelatter State reassumes its sovereign power to change thelegal status of the property devolving to it, if it so desires.

By wording the draft article in this way, the SpecialRapporteur left the question open for discussion bysuggesting tentatively a solution that would make itpossible to apply the legislation of the successor Staterather than that of the predecessor State if the contrarycourse entailed a risk of serious conflict with publicpolicy.

(3) Consequently, the Special Rapporteur proposed thetwo following alternative formulations:

Version A

For the purposes of these articles, "public property" means allproperty, whether tangible or intangible, and rights and intereststherein, belonging to the State, a territorial authority thereof or apublic body.

Save in the event of serious conflict with the public policy of thesuccessor State, the determination of what constitutes public propertyshall be made by reference to the municipal law which governedthe territory affected by the change of sovereignty.

Version B

For the purposes of these articles, "public property" means allproperty, rights and interests which, on the date of the change ofsovereignty and in accordance with the law of the predecessorState, were not under private ownership in the territory ceded bythat State.

(4) Pursuing his examination of this definition in hisfourth report, in connexion with articles 5 and 5 bis,the Special Rapporteur explained that the suggestedformulation was intended solely to define "public prop-erty", whether it belonged to the State, a territorialauthority or a public enterprise. Another problem wasto determine whether all the public property coveredby the definition was transferable to the successor State.Indeed, that was precisely the problem to be settled inthe draft articles which followed. Thus the definitionand determination of public property was to open theway to drawing a distinction between the effective transferof State property and merely placing public propertyunder the sway of the juridical order of the successorState. 23

(5) In his fifth report, 24 the Special Rapporteur sugges-ted that the Commission should retain only the variant5 bis, since despite the wide sphere of application ofarticle 5, the proposed definition did not cover all formsof public property. The Special Rapporteur feared thatarticle 5 did not cover certain categories of propertywhich were indisputably public, such as those connected

with the concept of "socialist property". Thus, forexample, property of a worker-managed enterprise couldnot be covered by the proposed article 5 because itinherently belonged neither to the State, nor to a "terri-torial authority" or "public body" thereof.

(6) As recalled above,85 the problem of the law to beused as point of reference for the purpose of determiningwhat constitutes public property had been the subjectof lengthy commentaries, which indicated that examin-ation of the many precedents showed clearly that the lawof the predecessor State is not always taken into consider-ation. The successor State itself has often defined, inexercise of its sovereign powers, the public propertywhich it considers should be included in its patrimony.Accordingly, the reference to the law of the predecessorState proposed in the fourth report (article 5 bis), whichis not consistent in every respect with the very diversifiedpractice in this sphere, needed to be modified in orderto conform more closely to reality.

(7) The Special Rapporteur therefore proposed a newformulation, which has been reproduced at the beginningof the present commentary, article 5 bis having becomearticle 5 in the present numbering. This text, whileallowing some scope for the application of the municipallaw of the successor State in the determination of publicproperty, omits the inherently ambiguous and dangerousreference to the "public policy" of the successor State,contained in paragraph 2 of the first version of draftarticle 5 (fourth report).

(8) As the Special Rapporteur noted in his fourthreport,26 international lawyers have rarely concernedthemselves with the definition of public property. Theyhad occasion to do so when an attempt was made inarticle 56 of the Regulations annexed to the HagueConvention of 18 December 1907 respecting the Lawsand Customs of War on Land to provide for a systemof protection of "The property of municipalities, thatof institutions dedicated to religion, charity and education,the arts and sciences, even when State property".27-28

Similarly, the Special Rapporteur noted the existenceof an internationalist approach to the definition anddetermination of public property within the ReparationCommission established by the peace treaties of 1919.29

23 See the commentaries and the examples cited in the fourthreport (Yearbook...l971, vol. II (Part One), pp. 174-175, documentA/CN.4/247 and Add . l , paras. 1-5 of the commentary to article 5).

24 Yearbook...l972, vol. II, p. 66, document A/CN.4/259,para. 30.

25 See paras. 1 and 2 above.26 Yearbook...l971, vol. II , (Part One), p . 175, document

A/CN.4/247 and Add.l , Part Two, para. 6 of the commentaryto article 5.

27 J. B. Scott, The Hague Conventions and Declarations of 1899and 1907 (New York, Oxford University Press, 1915), pp . 125-126.

28 Max Huber (" La propri&e publique en cas de guerre surterre " ) , Revue generate de droit international public (Paris), vol. X X(1913), p . 680), sought to determine the legal status of the property" of local administrative organs occupying an intermediate placebetween municipalities and the central State administration ",of "State establishments and foundations", and of "separatepatrimonies, distinct from the general patrimony of the State",but the criteria he defined are not rigorous, and neither are thecategories set out above.

29 Yearbook...l971, vol. II (Part One), pp. 175-176, documentA/CN.4/247 and Add . l , Part Two, paras. 8-12 of the commentaryto article 5.


B. Rights and interests

(9) The proposed definition of public property refersto rights and interests. Although the notion of rights—real, patrimonial, pecuniary—is well known to thelaw, that of interests is more intangible. So far as theSpecial Rapporteur is aware, there is no definition of"interests" as precise as that which could be givenof "rights", the former term probably having a politicalrather than a legal connotation.

The Dictionnaire de la terminologie du droit internationaldefines "interest" as a term denoting that which materiallyor morally concerns a natural or juridical person, thematerial or moral advantage presented for such personby an act or an abstention from an act, by the maintenanceof or alteration in a situation.30

(10) The Special Rapporteur has nevertheless used thisterm, despite its imprecision, in the definition he hasproposed for public property. His sole reason, whichhe recognizes as insufficient, is that the term is used ina very large number of diplomatic agreements and texts.To take only one example, the Treaty of Versailles of28 June 1919 includes a special section (part X, section IV)entitled "Property, rights and interests *" 31

C. Unliqiddated claims and rights

(11) A special aspect of the problem of determiningwhat constitutes transferable public property is presentedby the question of unliquidated claims and rights.Some theorists take the view that such claims can hardlybe considered as "public property" capable of transferto the successor State.32 Their argument is that suchclaims are vested in the predecessor State, for whosebenefit they were established, and that, in the absence ofa continuing legal relationship between the author ofthe damage suffered and the predecessor State—arelationship that would not survive the change of sover-eignty—the successor State cannot become creditor.

There is admittedly no legal link between the prede-cessor State and its successor, nor any direct linkbetween the new sovereign and the third party responsiblefor the damage. But in this matter, which properlybelongs to the sphere of international responsibilityrather than to that of State succession, there is a substitu-tion of relationships. The damage suffered, if real, is notindeterminate; it has left some trace, or at least, if itis considered fair that there should be compensation,it has affected the exercise of sovereignty in one wayor another or resulted in a more or less serious disturbanceof some juridical, economic or social order attachedto the territory transferred. Furthermore, the recognition

3 0 Dictionnaire de la terminologie du droit international, ed.Jules Basdevant (Paris, Sirey, 1960), p. 342.

31 G. F. de Martens, ed. Nouveau Recueil general de traites(Leipzig, Weicher, 1923), 3rd series, t. XI, p. 323. For English text,see British and Foreign State Papers, 1919, vol. 112 (London,H. M. Stationery Office, 1922), p. 146.

33 Ch. Rousseau, Cours de droit international public — Lestransformations territoriales des Etats et leurs consequences juridiques(Paris, Les cours de droit, 1964-1965), pp. 142-143.

or non-recognition of a right, which has been legallyestablished but not yet liquidated, should not dependon the moment or period at which it is claimed. If theclaim had been settled before the change of sovereignty,its products, either in its original form or re-used, wouldhave in some way enriched the territory. This problemis of some practical importance, since it also affectsoutstanding debt-claims, particularly in respect of taxes.33


Article 6. Transfer of public property as it exists

1. The predecessor State may transfer a territory onlyon the conditions upon which that State itself possesses it.

2. In accordance with the provisions of the presentarticles, public property shall be transferred to the suc-cessor State as it exists and with its legal status.

COMMENTARY

(1) The Special Rapporteur merely draws attention tocommentary to article 2 in his fourth report. In the firstversion of article 2, in the fourth report, the two paragraphsproposed for article 6 above were separated by anotherparagraph which has been deleted—not without hesita-tion—from the present version.

(2) Furthermore, paragraph 2 of article 6 as proposedabove has been modified slightly as compared with thefirst version given in the former article 2. The transfer-ability of property as it exists and with its legal statusis no longer accompanied by the restriction that thattransfer must be compatible with the municipal lawof the successor State.

Article 7. Date of transfer of public property

Save where sovereignty has been restored and is deemedto be retroactive to the date of its termination or where thedate of transfer is, by treaty or otherwise, made dependentupon the fulfilment of a suspensive condition or simplyupon the lapse of a flxed period of time, the date of transferof public property shall be the date on which the change ofsovereignty

(a) Occurs dejure through the ratification of devolutionagreements, or

(b) Effectively carried out in cases where no agreementexists or reference is made in an agreement to thesaid effective date.

COMMENTARY

(1) With the exception of a few negligible draftingchanges, the wording of article 7 above is the same asthat of article 3 in the fourth report, and the SpecialRapporteur therefore draws attention to his commentaryon that article.

(2) It will be recalled that in the draft articles on successionof States in respect of treaties the Commission defined

33 See below paras. 6 and 7 of the commentary to article 11.


the term "date of the succession of States" 34 in the follow-ing way:"date of the succession of States" means the date upon which thesuccessor State replaced the predecessor State in the responsibilityfor the international relations of the territory to which the succes-sion of States relates. 36

This definition itself is influenced by the definition ofsuccession of States, which is considered to be the repla-cement of one State by another in the responsibility forthe international relations of a territory.

16. At this point a provision could be inserted dealingwith limitations imposed by treaty on the principle ofthe general and gratuitous transfer of public property.In his fourth report, the Special Rapporteur includeda draft article 4 worded as follows:

Subject to the application of general international law and of thelaw of treaties for the purposes of the interpretation or even theinvalidation of an agreement regulating a case of State succession,any limitation imposed by treaty on the principle, hereinafterenunciated, of the general and gratuitous transfer of public propertyshall be interpreted strictly.35

17. The Special Rapporteur feels he must refrain, forthe time being, from submitting a special provision ofthis type.

18. Similarly, he still hesitates to submit to theCommission an article concerning the fate of publicproperty in cases where on the one hand a former treaty,containing all or part of the provisions relating topublic property, was considered not binding on thesuccessor State by the application of the articles onthe succession of States in respect of treaties and onthe other, where a devolution agreement concerningpublic property was considered invalid by applicationof the general rules of the law of treaties.

19. The Special Rapporteur considers it quite obviousthat the obligations imposed on the predecessor Stateby international law and codified in the present articlesare independent of the existence or validity of treaties.This is not to say that the States concerned cannot regulatethe problem of the transfer of public property by treaty.But if the treaties or devolution agreements concerningthat subject were considered inapplicable or invalid,it would be the "general law" of succession of Statesin matters other than treaties, as codified in the presentarticles, which would be applied. If, for example, thepredecessor State had previously concluded a treatywhich had the effect of increasing its patrimony in theterritory subsequently affected by the succession ofStates, it cannot invoke the possible non-applicabilityof that treaty to the successor State to evade the obligationto transfer that property. Treaty law which is invalidor null and void must clearly give way to the "generallaw" of mandatory and gratuitous transfer.

34 Used in draft articles 7 a n d 8, 10-15, 18 and 19, 21-23 and 25.35 Art icle 2, pa ragraph 1 (e).

Article 8. General treatment of public propertyaccording to ownership

All other conditions established by the present articlebeing fulfilled,

(a) Public or private property of the predecessor Stateshall pass within the patrimony of the successor State;

(b) Public property of authorities or bodies other thanStates shall pass within the juridical order of the successorState;

(c) Property of the territory affected by the change ofsovereignty shall pass within the juridical order of thesuccessor State.

COMMENTARY

(1) The Special Rapporteur feels that the questionsthat may arise in connexion with article 8, which aresituated at the confluence of the law relating to successionto public property, the law relating to succession tolegislation and the municipal law of the successor State,are of fundamental importance. He has therefore sub-mitted article 8 in an attempt to shed some light onthese complicated questions, which are raised by thesuccession of States and can be noted in connexionwith each rule. This article does not represent in itselfa basic rule, which could be said to be directly applicable.It is not designed to indicate specifically which publicproperty should be transferred to the successor State,for to that end, as indicated in the preamble to the article,"all other conditions established by the present articles[must be] fulfilled".

(2) Of course, not all the public and private propertyof the predecessor State passes within the patrimonyof the successor State. Other conditions, set out through-out the present draft, must be fulfilled. The SpecialRapporteur's aim in article 8 is simply to draw a cleardistinction of principle between the problem of thetramferability of public property in full ownership to thesuccessor State, and that of the patrimonial status quowhen the change of sovereignty does not affect theownership of public property but alters its "legal status".Even so, the latter term is not appropriate if it seemsto allude to the successor State's power—which is notat issue here—to maintain or modify, like any otherState, the legislation applicable to the property whoseownership has not been affected by the change ofsovereignty. What is at issue here is the fact that withoutany change in ownership or even any amendment to thelaw, the public property concerned passes within thesphere of competence of another sovereign on theoccasion of the succession of States. This is what theSpecial Rapporteur wished to make clear by referringto another internal order, the juridical order of thesuccessor State.

(3) Basically, there are only three categories of property,namely, those referred to in the three paragraphs ofarticle 8, i.e. the public or private property of the State,the property belonging to territorial authorities or bodiesother than States and lastly property belonging to theterritory affected by the change of sovereignty itself.


Property in the first category must change owner andpass within the patrimony of the successor State,provided all other necessary conditions are fulfilled.This is not the case for the two other categories of pro-perty, which continue to belong to the territorial authority,the public body or the transferred territory. However,that property falls within the legal jurisdiction of thesuccessor State, or in other words, is governed henceforthby a new juridical order. Draft article 8 is designedsolely to make that point clear.

(4) In his fifth report,36 the Special Rapporteur revertedto the problem of the transferability of public propertybelonging to the State, excluding other categories ofpublic property. The latter property might seem tohave nothing to do with the succession of States strictosensu, but it cannot be left out completely, firstly becausethe property which does not pass within the patrimonyof the successor State does at least pass within its sphereof competence, and secondly because the transfer doesnot always occur between public bodies and their counter-parts, but brings into play treaty or other proceduresand rules which usually involve the predecessor Stateand the successor State.

(5) Writers rarely give any attention to property properto the territory affected by the change of sovereignty.The amount of such property is, however, considerable.There is no territory which does not possess propertyof its own.

In the colonies, the situation was not always clearand this property was often governed by a host of parallelor overlapping legal regimes.

In legal systems which recognize the concept of thepublic and private domain of the State, the situationis not always simple. In former French Indo-China,for example, there were no less than eight differentkinds of domain: (a) and (b) a "colonial" domain composedof the two domains, public and private, of the FrenchState in Indo-China; (c) and (d) a "general" domaincomprising the two domains, public and private, of theformer Federation of the States of Indo-China; (e) and(/) "local domains" belonging to each protectorate orcolony in the Federation (Tonkin, Annam, Cochin China,Cambodia, Laos) with distinctions between the publicand private domain; (g) and (/J) public and private do-mains belonging to the provincial, local and municipal auth-orities of each protectorate or colony in the Federation.37

36 Yearbook...l972, vol. I I , p . 66, document A/CN.4/259,paras . 34 and 35.

37 The situation was (and probably still is) quite complicatedin the former Belgian Congo. F o r example, the precise legalcharacterization of the property of the Special Committee forKatanga raised very difficult problems (see J.-P. Paulus, Droitpublic du Congo beige (Universite libre de Bruxelles, Institut deSociologie Solvay, Etudes coloniales, N o . 6, 1959, pp . 120 et seq.).T h e Treaty of 9 January 1895 between the "Independent State ofthe Congo" and the Belgian State had ceded to Belgium, underthe terms of article 2,

"all the immovable and movable assets of the IndependentState, and in particular (1) the ownership of all lands belongingto its public or private domain. . . (2) shares and founder's shares...(3) all buildings, constructions, installations, plantations andproperties whatsoever established or acquired by the Govern-ment... , movable property of every kind and livestock..., its

(6) The reason why writers have neglected this problemof property proper to the territory is, perhaps, thatthey did not believe such property should be affectedby the change of sovereignty.

However, while it seems obvious that this propertyshould not devolve to the successor State38 and thatit remains the property of the territory ceded, it is equallyclear that this does not amount to maintenance of thestatus quo ante. The property does not continue to begoverned by the former law or to be subject to theformer sovereignty. This, of course, is part of the broaderproblem of succession of States in respect of legislation.However, the point must be made here that publicproperty owned by the ceded territory in its own rightscontinues to belong to it but follows the political andjudicial destiny of the territory, which passes underanother sovereignty. Such property will continue to beowned by the territory but will be governed by thelegislation of the successor State. In other words, thepublic property belonging to the territory is not affectedby the change of sovereignty so far as ownership isconcerned, but it passes within the juridical order ofthe successor State.

(7) A resolution of the Institute of International Lawlaid down the same principle, stating that local corporatebodies retained the right of ownership over their propertyafter territorial changes: "The territorial changes leaveintact those patrimonial rights which were duly acquiredbefore the change took place." The resolution stated"These rules also apply to the patrimonial rights of munici-palities or other corporate bodies belonging to the Statewhich is affected by the territorial change*" 39

(8) This plain fact is worth recalling and recording in arule of the kind suggested by the Special Rapporteur.Although it is so obvious as to be unremarkable in thecase of property situated in the territory itself, it becomesmost important when a decision has to be taken on thefate of property proper to the territory which is situatedoutside its geographical boundaries. That specific prob-lem will be dealt with in some of the articles suggestedbelow, in the context of the clear rule expressed here.

ships and boats together with their equipment and its militaryarms equipment, (4) the ivory, rubber and other African productswhich arc at present the property of the Independent State andthe stores and other merchandise belonging to it".G. F . de Martens, ed. Nouveau Recueil general de traites

(Gottingen, Librairie Dieterich, 1896), 2nd series, t. XXI, p. 693).Public property was later divided into categories. Land, for example,formed one category—"State lands", which were in turn dividedinto land in the public domain, land in the private domain, landfor which concessions had been granted and vacant land (Paulus,op. cit., pp. 15 et seq.). However, there was never any generallyaccepted demarcation between the patrimony of the colony andthat of the metropolitan country (ibid., pp. 26 et seq.).

38 Except in the case of the total disapearance of the predecessorState—in other words, when there is, ex hypothesi, no propertyof the territory itself distinct from the property of the State whichhas disappeared. The ceded territory is coextensive with the formerterritory.

39 Paragraphs 3 and 4 of resolution II of the Institute of Inter-national Law adopted at its forty-fifth sessipn, held at Siennafrom 17 to 26 April 1952 (Annuaire de I'Institut de droit international,1952, II (Basel), pp. 475-476).


(9) This problem often arises, either because the territorypossesses property of its own which may normally besituated outside its geographical boundaries or becausesuch property comes to be situated outside its newboundaries as a result of partition of the territory, cessionof part of the territory, frontier adjustments, and so forth.

The Franco-Italian Conciliation Commission estab-lished under the Treaty of Peace with Italy of 10 February1947 had to deal with a problem of this kind.40 In thiscase the Commission, bound by the very clear wordingof paragraph 1 of annex XIV to the Treaty,41 which ithad to interpret, went further than is suggested here andrecognized the devolution to the successor State, in fullownership, of the property proper to the ceded territory.This property does not merely come within the juridicalorder of the successor State.

(10) The agent of the Italian Government had arguedthat:

When paragraph 1 states that the successor State shall receive,without payment, State and para-statal property (including theproperty of local agencies) within territory ceded, it is not—at leastin the case of the property of local agencies—referring to successionof the State to the ownership of such property but to the property'sincorporation into the juridical order of the successor State.42

(11) The Commission rejected that viewpoint, sincethe main argument of the Italian Government conflicts with thevery clear wording of paragraph 1: it is the successor State that shallreceive, without payment, not only the State property but also thepara-statal property, including biens communaux, within the ter-ritories ceded. It is the municipal legislation of the successor Statethat must determine the fate (final destination and juridical regime)of the property thus transferred, in the new State context into whichthe property has passed following the cession of the territory.43- **

III. PROVISIONS COMMON TO ALL TYPESOF SUCCESSION OF STATES

Article 9. General principleof the transfer of all State property

Property necessary for the exercise of sovereignty overthe territory affected by the succession of States shalldevolve, automatically and without compensation, to thesuccessor State.

10 Franco-Ital ian Conciliation Commission, "Dispute concerningthe apport ionment of the property of local authorities whoseterritory was divided by the frontier established under article 2of the Treaty of Peace: decisions Nos . 145 and 163, renderedon 20 January and 9 October 1953 respectively", (United Nations,Reports of International Arbitral Awards, vol. XII I (United Nat ionspublication, Sales N o . 64.V.3), pp . 501-549.

41 United Nat ions, Treaty Series, vol. 49, p . 225.42 United Nat ions , Reports of International Arbitral Awards,

vol. XIII, (op. cit.), pp . 512-513. Annex XIV, paragraph 1, statedthat "The Successor State shall receive, without payment, ItalianState and para-statal property within territory ceded...", (ibid.,p . 503).

43 Ibid., pp . 514-515.44 With regard to "property proper" to the territory, see also

fifth report (Yearbook... 1972), vol. II , p . 67, document A/CN.4/259,paras. 42-45.

COMMENTARY

(1) The Special Rapporteur embodied the generalprinciple of the transfer of all State property in an articleentitled "Property appertaining to sovereignty", whichwas worded as follows in the third and fourth reports:

1. Property appertaining to sovereignty over the territory shalldevolve, automatically and without compensation, to the successorState.45

(2) The Special Rapporteur noted in his third report 46

that it was difficult to find a satisfactory expression todescribe property of a public character, which, beinglinked to the imperium of the predecessor State over theterritory, can obviously not remain the property of thatState after the change of sovereignty, or, in other words,'after the termination of that imperium. Much, if not all,of this property is referred to in some bodies of legislationas property in the "public domain". This expression isunknown in many legal systems, however, and its lackof universality makes it unsuitable for use in the draftarticle.

(3) The distinction between public domain and privatedomain is unsatisfactory, not only because it does notexist in all legal systems, but also because it does notcover public property in a uniform and identical mannerfrom country to country. Consequently, the mind maywell balk at deciding, for instance, that all property inthe public domain devolves automatically and withoutcompensation to the successor, even though the kind ofproperty included in that domain and what constitutes itcan vary to a very great degree. Even more disconcertingwould be an approach whereby the predecessor State,in the view of some writers, would retain its privatedomain and, in the view of others, would cede it to itssuccessor only against compensation. There does notexist a uniform criterion for dividing property into publicdomain and private domain. This would mean setting uprules which would not be identically applied in practiceand whose scope would vary from country to country.

(4) The Special Rapporteur's suggestion that the notionof public domain and private domain should be replacedby the notion of "property appertaining to sovereignty"was not, perhaps, much of an improvement and mightbe open to the same criticisms. This suggestion did notspare us the still difficult task of seeking a definition ofsuch property. Yet, however difficult such a definitionmay be, it was nevertheless easier to express internationallythan a definition which would try to encompass notionsthat vary and are not accepted by everyone, such aspublic domain and private domain.

It may be said that property appertaining to sove-reignty over the territory represents the patrimonialaspect of the expression of the domestic sovereignty of theState. It is true that this expression may differ from onepolitical system to another, but it has the characteristicof covering everything that the State, in accordance

45 Yearbook...l970, vol. II, p. 143, document A/CN.4/226,part two, article 2; and Yearbook...l971, vol. II (Part One), p. 177,document A/CN.4/247 and Add.l, Part Two, article 6.

4S Yearbook...l970, vol. II, pp. 143-114, document A/CN.4/226,paras. 2-6 of the commentary to article 2.


with its own guiding philosophy, regards as a "strategic"activity which cannot be entrusted to a private person.

In order to carry on this activity, the State becomesowner of movable and immovable property. It is thisproperty, which the State uses to manifest and exerciseits sovereignty or to perform the general obligationsinvolved in the exercise of its sovereignty (e.g., nationaldefence, security, the promotion of public health andeducation, and national development), that may be regar-ded as property appertaining to sovereignty over theterritory.

(5) How is one to determine more precisely what con-stitutes this property?

It will include first, of all "public" property—in otherwords, property which is denned according to threecriteria: the public character which it possesses by reasonof its being governed by public law; the fact that it isnot owned by a private person and therefore belongs tothe State, and the fact that it is for the use, or at theservice, of all the population.

In addition, however, it includes property which, inaccordance with the legislation of the predecessor State,helps to fulfil the general interest and through which thepublic power expresses its sovereignty over the territory.It can, and assuredly will, happen that what constitutessuch property varies from State to State and from onepolitical system to another. That is inevitable. OneState may feel that it is not expressing its sovereigntyand is not fully possessed of all its attributes of publicpower unless it manages directly and exclusively a givensector of activity, or even all sector of activity. AnotherState, by contrast, confines its activity to very limitedsectors. It may regard certain roads, certain airfields,even some arms factories, as being capable of privateownership. It is the very limited range of property towhich it confines its activities that will have to be regardedas property appertaining to its sovereignty. It is, in short,all the property which follows the juridical destiny of theterritory and which accordingly is transferable alongwith it, unlike property that is not closely linked to theterritory in question.

The French Minister for war wrote in 1876; *'

. . . the right and duty to ensure the functioning of public services,to order, for example, major roadworks, waterworks or fortifi-cations, and ownership of or eminent domain over such workswhich are an appurtenance of the public domain—this entireaggregate of duties and rights is, in the final analysis, an attributeof sovereignty. This inseparable attribute of sovereignty moveswith the sovereignty itself* . . .

(6) It was in order to take account of the fact that neitherthe writers nor judicial decisions have exhausted discussionon the question whether property in the private domainof the State is transferable ipso jure on the same groundsas property in its public domain that the Special Rapporteur

sought to avoid this distinction, which is, indeed, un-known to some national systems of law.48

(7) In his third report, the Special Rapporteur dealtat length with international practice relating to thedevolution of public property appertaining to sove-reignty over the territory.49 This practice sanctions theprinciple that territory shall devolve automatically andwithout compensation, whatever the type of succession.The writers unanimously consider that the principle ofthe transfer of such property is mandatory, even if someof them, basing their views on the distinction betweenthe "public domain" and the "private domain" of theState, make the transfer of property in the second cate-gory dependent on the payment of an indemnity to thepredecessor State. The rule of general devolution goesback to the period when the patrimonial conception ofthe State prevailed in juridical systems where the patri-monial rights of the State were regarded as appurtenancesof the territory.

(8) In his fourth report, the Special Rapporteur addedsome further commentaries on this principle of thetransfer of property appertaining to sovereignty, thatis, property allocated by the State to a public serviceor public utility, these two terms being interpreted in abroad sense.50

There may perhaps be other property which, althoughnot appertaining to sovereignty, belongs to the publicdomain and as such should also normally be transferredwithout compensation. If that proves to be the case, thematter could be dealt with in the context of other draftarticles.

(9) Reverting to the question in his fifth report, S1 theSpecial Rapporteur expressed concern lest in its presentform the draft article under condideration might posea problem because of the ambiguity of the term "pro-perty appertaining to sovereignty". Contrary to theintention of the Special Rapporteur, that formulationmight give the impression that the sovereignty of thesuccessor State would in some way be a continuationof that of the predecessor State, an interpretation whichwould have very important consequences for public debtsand liabilities in general, for the validity of treaties,acquired rights and so forth. The Special Rapporteurhas expressed his views on these matters elsewhere.52 To

47 In a memorial in support of an appeal to the Conseil d'Etat(France, Conseil d'Etat, 28 April 1876, Ministre de la guerrev. Hallet et Cie., Recueil des arrets du Conseil d'Etat (Paris, Marchal,Billard, 1876), 2nd series, vol. 46, p. 398, foot-note).

4 8 The report of the Sixth Committee to the twenty-sixth sessionof the General Assembly {Official Records of the General Assembly,Twenty-sixth Session, Annexes, agenda item 88, document A/8537)states in paragraph 136 that some representatives, "recalling theprinciple nemo plus juris transferre potest quam ipse habet", expresseddisagreement "with the attempt made by the Special Rappor teurto divide State property into the private domain and the publicdomain". An error must have occurred, for it is clear, on the con-trary, that the Special Rappor teur made every effort to avoidthis distinction, which is not universal.

49 Yearbook...l970, vol. II , pp . 144 et seq., document A/CN.4/226,part two, paras. 7-23 of the commentary to article 2.

50 Yearbook...l971, vol. I I (Part One), pp . 177 et seq., documentA/CN.4/247 and A d d . l , commentary to article 6.

61 Yearbook...l972, vol. I I , p . 66, document A/CN.4/259,para. 37 et seq.

62 Yearbook...l970, vol. I I , pp . 77-78, document A/CN.4/216/Rev. l , paras. 29-24.


this problem is added another very real one, namelythat no hard and fast criterion exists for the determinationof "property appertaining to sovereignty".

(10) The Special Rapporteur therefore proposes thatreference should be made to the property "necessaryfor the exercise" of sovereignty rather than to propertyappertaining to sovereignty. The article would thus read:

Property necessary for the exercise of sovereignty over the territoryshall devolve, automatically and without compensation, to the successorState.

Such a formulation no doubt leaves unsolved theproblem of (a) what property is necessary for the exerciseof sovereignty and (b) what authority has the power todetermine such property. There is no precise answer tosuch questions in contemporary international law.Inevitably, recourse must be had to internal public lawinasmuch as it would be difficult to avoid in all cases andat all times applying the public law of the successorState. Indeed, it was for that reason that the proposedarticle has been drafted in neutral language. There is noindication as to which State, the predecessor or thesuccessor, will be used as a point of reference for thedetermination of the "property necessary for the exerciseof sovereignty" over the territory.

(11) It could be argued that the juridical order of thepredecessor State should automatically be used to deter-mine the property necessary for the exercise of sovereignty.If the successor State were to have a broader conceptof the exercise of sovereignty, which required that propertyformerly regarded as unnecessary or non-determinantfor this purpose should pass within its patrimony, logicwould at least appear to require that the predecessorState should not be made to pay the price for the estab-lishment of a different political or ideological regime or adifferent institutional model. The successor State shouldpay that price in order to express its Weltanschauung—itsown "world view"—and to assume ownership, in thisinstance with the payment of compensation or otherwise,of property other than that which was used for theexercise or the expression of the sovereignty of thepredecessor State over the transferred territory.

(12) The concept of "property necessary for the exerciseof sovereignty", as defined here, is somewhat similarto that sanctioned by international judicial decision,which concerns the transfer of property belonging tolocal authorities "necessary for the viability" of the localterritorial authority concerned. For example, in a disputeconcerning the apportionment of the property of localauthorities whose territory had been divided by a newdelimitation of the frontier between France and Italy,the Franco-Italian Conciliation Commission set up underthe Peace Treaty with Italy of 10 February 1947, notedthat:

. . . the Treaty of Peace did not reflect any distinctions... betweenthe public domain and the private domain * that might exist in thelegislation of Italy or the State to which the territory is ceded.However, the nature of the property and the economic use to whichit is put have a certain effect on the apportionment*

The apportionment must first of all be just and equitable. How-ever, the Treaty of Peace does not confine itself to this reference tojustice and equity, but provides a more specific criterion for a whole

category of municipal property * and for what is generally the mostimportant category.

The question may be left open whether the . . . [Treaty] providesfor two types of agreement..., one kind apportioning the propertyof the public authorities concerned, the other ensuring "the main-tenance of the municipal services essential to the inhabitants" * . . .But, even if that were so, the criterion of the maintenance of themunicipal services necessary to the inhabitants should a fortiori playa decisive role * when these services—as will usually be the case—are provided by property belonging to the municipality which mustbe apportioned. The apportionment should be carried out accordingto a principle of utility* since in this case that principle must haveseemed to the drafters of the Treaty the most compatible withjustice and equity.53

Article 10. Rights in respect of the authorityto grant concessions

1. For the purposes of the present article, the term"concession" means the act whereby the State confers, inthe territory within its national jurisdiction, on a privateenterprise, a person in private law or another State, themanagement of a public service or the exploitation of anatural resource.

2. Irrespective of the type of succession of States, thesuccessor State shall replace the predecessor State in itsrights of ownership of all public property covered by aconcession in the territory affected by the change ofsovereignty.

3. The existence of devolution agreements regulatingthe treatment to be accorded to concessions shall not affectthe right of eminent domain of the State over publicproperty and natural resources in its territory.

COMMENTARY

A. Definition of a "concession"

(1) The definition suggested above will probably beincluded in due course in article 3, which defines theterms used. In the meantine, certain simple componentsof the definition are set out below.

(2) The term "concession" can be interpreted in differentways.

(a) From the standpoint of the beneficiary, it can meanpermission to manage a public service or the right towork mineral or mining deposits;

(b) From the standpoint of the conceding State, it canmean an act by which the public authorities grant to aprivate enterprise or a person in private law the rightto undertake work of a public nature and to exploitnatural resources or manage a public service.

No attempt will be made in the present article to dealwith the complex of problems the successor State faceswith regard to concessions granted by its predecessor.One aspect of these problems, which will not be dwelton here, was taken up by the Special Rapporteur in his

53 United Nations, Reports of International Arbitral Awards,vol. XIII (op. cit.), p. 519.


second report, "Economic and financial acquired rightsand State succession".64

In particular, the term "concession" will not be usedhere in the first sense, as defined above, that is, from thestandpoint of the beneficiary of the concession. It is thefate of the rights of the conceding State in cases of Statesuccession which will be analysed in the present articles,which, it should be remembered, relate to public property.Although it is true that, as the jurists Lyon-Caen andRenault have stated, the characteristic feature of a con-cession is the "juxtaposition of a contract and an actof sovereignty",65 for the time being we shall not considerin this study the contractual aspect of the concession,which raises various problems relating to acquired rights.We shall deal solely with the act of sovereignty or, inother words, the rights of the conceding power and thetreatment accorded to them in the case of territorialchanges.

1. A concession is an act of the public authorities

(3) In the arbitral award of 3 September 1924 renderedin the German reparations case,56 arbitrator Beichmannrecalled in the following words the definition of theterm "concession" given by the Reparations Commission:

The Reparations Commission stated, in its letter of 7 January1921, that it had "serious reasons for considering that the word'concession' should be understood as encompassing all rights andprivileges of an economic nature granted by the Government orthe public authorities pursuant to special legislative or administrativemeasures taken by virtue of the sovereign executive powers vestedin the competent authorities, irrespective of whether that right hasbeen exercised and irrespective of whether its exercise constitutesan enterprise of public utility".57

Later, arbitrator Beichmann stated:The Reparations Commission, in a letter dated 27 April 1921,

stated "the Commission interprets the word 'concession' as meaninga 'right' to operate an agricultural, mining, industrial or commercialenterprise or in a general sense as a right of an economic naturegranted by the executive authority by a special legislative measureor by decree, by virtue of a power which is in principle discretionaryand which consequently does not derive from the simple operationof the general law." 58

(4) In its final conclusions, the Reparations Commissionrequested arbitrator Beichmann to:

State that, according to the law:

(a) The term any "concession", as used in Article 260, meansthe working of the concession as well as the title or subjective rightto the concession;

61 Yearbook...1969, vol. II, p. 69, document A/CN.4/216/Rev.l.55 Cited by D. Bardonnet, La succession d'Etats a Madagascar

(succession aux droits conventionnels et aux droits patrimoniaux)(Paris, Librairie generate de droit et de jurisprudence, 1970),(Bibliotheque de droit international, t. LVII), p. 210, foot-note 241in fine.

66 Case of German reparations under article 260 of the Treatyof"Versailles, Arbitral award concerning the interpretation of article 260of the Treaty of Versailles (arbitrator F. W. N. Beichmann), publi-cation de la Commission des reparations, annex 2145 a, (Paris, 1924)and United Nations, Reports of International Arbitral Awards,vol. I, (United Nations publication, Sales No. 1948.V.2), pp. 429-528.

« Ibid., p. 469.58 Ibid.

(6) The use of this term cannot be limited to concessions grantedfor the operation of a public utility undertaking;

(c) It does not necessarily entail the granting to the concessionaireof privileges appertaining to the public power;

(d) The granting of a concession does not necessarily dependupon the executive power acting in a discretionary manner;

(e) For a concession in the sense in which that term is used inArticle 260 to exist, it suffices that the State or one of its authoritieshas granted a right to a beneficiary in connexion with mattersrelating to the public or private domain of the State or its eminentdomain;

( / ) Any act by which a third party obtains from the publicauthoiities the right:

To use permanently oi temporarily part of the public or privatedomain belonging to the State or its administrative districts;

To undertake public works for the purposes of a public serviceor a public utility undertaking;

To begin and continue working property of any kind that theState has withdrawn from the regime of free competition or freeappropriation and for the attribution of which it has reserved foritself a right of control and decision in the form of the grantingof concessions;

shall constitute a concession in the sense in which the term is usedin Article 260.

"Consequently to declare that the granting of the right to workthe following, and the working thereof itself constitute concessionsin the sense in which that term is used in Article 260:

"(a) Coal mines, iron mines or other minerals or petroleumdeposits in China, Bulgaria and Turkey;

"(b) Coal mines, iron mines or other minerals in the territoriesceded by Germany, and in the German colonies placed undermandate;

"(c) Coal mines, iron mines and other minerals in Austria,Hungary, and the territories ceded by Austria and Hungary, andthe petroleum deposits ceded before the promulgation of theAct of 11 May 1884, under the regime established by the Actof 1854;

"(d) Common salt mines and deposits, potassium salts asmentioned in the Hungarian Act VII of 1911 and the deposits ofmineral oils and gases as mentioned in the Hungarian Act VIOf 1911;

"(e) Coal mines, iron mines or other minerals in the crownlands, in Russia, and salt mines within the country itself." 59

(5) The arbitrator decided that

if the term "concession" is to be correctly u s e d , . . . the r i g h t . . . towork the mine or deposit must have been granted to the beneficiaryby an act of the public authority . . . . That act must be a special actreferring to a specific beneficiary. An act, which for example, giantsto the owners of the surface in general the right to all or some ofthe mineral wealth beneath their soil does not constitute a concession.On the other hand, the act need not necessarily be an act of theexecutive branch . . . . There is nothing to prevent it being an act ofthe legislature, provided it is of the special nature indicated above.That is merely a question of constitutional law which should notbe accorded any importance in determining the meaning of theterm "concession".60

59 Ibid., p. 470.60 Ibid., pp. 473-474.

26 Yearbook of the International Law Commission, 1973, vol. fi

2. A concession is an act granting permission to managea public service or exploit a natural resource

(6) The activities relating to management, exploitationor implementation in the domain of the State entrustedto a person in private law by the public authoritiesare usually temporary, or more precisely of limitedduration, even when the concession instrument providesthat they are to continue for a long period of time.Furthermore, such activities are usually distinguishedby the fact that they exclude all property rights over thesoil or subsoil of State territory.

Hence, the Beichmann award mentioned above statesthat "an act which, for example, grants to the ownersof the surface in general the right to all or some of themineral wealth beneath their soil does not constitute aconcession".

(7) Resolution 530 (VI) of 29 January 1952, in whichthe General Assembly of the United Nations adopted"Economic and financial provisions relating to Eritrea",contains an article X denning a concession, which readsas follows:

Article X1. In this article:(a) "concession" means a grant by the former Italian admin-

istration or by the Administering Power or by a municipal authorityof the enjoyment in Eritrea of specific rights and assets in exchangefor specific obligations undertaken by the concessionaire with regardto the use and improvement of such assets, such grant being madein accordance with the laws, regulations and rules in force inEritrea at the time of such grant."

3. The concessionaire is a private person or enterpriseor sometimes even a State

(8) In a concession, the recipient and beneficiary of theact of the public power is generally a person in privatelaw. But there are cases involving treaty rights enjoyedby certain States in the territory of one or more otherStates, that is, cases involving concessions of which aState is the beneficiary. According to a study by theUnited Nations Secretariat,61 these cases involve mainlytransit rights, mining rights, in connexion with the con-struction of international pipelines and water rights.

(9) Transit rights, which are granted under bilateralagreements following territorial changes, enable Statesto use their road or rail routes despite the fact that theycross territories which have become foreign territoryas a result of boundary changes.62

A number of countries, mainly land-locked countriesand countries which cannot, for reasons of climate

61 The Status of Permanent Sovereignty over Natural Wealthand Resources (Study by the Secretariat) [referred to hereafteras " the Secretariat study"] //. Report of the Commission on PermanentSovereignty over Natural Resources (United Nat ions publication,Sales N o . 62.V.6).

62 The Secretariat study gives many relevant examples: Czecho-slovak and Polish railway lines which pass over short stretchesof the other State's territory; the line between Aleppo (Syria)and Mosul ( I raq); the line between Niirala and Parikkala (Finland),which runs over some 85 miles of USSR terri tory; special arrange-ments relating to Greek and Turkish transit traffic on the railwayline between Istanbul and Svilengrad (Bulgaria) and so on.

or topography, make use of their own sea coasts orharbour facilities, enjoy general transit rights whichconstitute "an essential factor of sovereignty over naturalresources if that sovereignty is interpreted to includethe right freely to dispose of those resources or theirderivative products".63 For example, the treaties andconventions concerning the dissolution of the Swedish-Norwegian Union in 1905 include a Convention RegardingTransit Traffic,61 which provides for the transportationof iron ore from northern Sweden to the Norwegianport of Narvik by the Lapland Railway. Similarly,Belgium and Northern Rhodesia respectively enjoyedtransit rights through Angola and Mozambique for theexportation of copper ore from Katanga and Rhodesia.65

(10) Furthermore, States have often concluded agree-ments concerning mining rights granted by one in theterritory of the other for the working of frontier deposits.As to international pipelines, there are many bilateralagreements for economic co-operation or defence pur-poses permitting one State to construct or operate suchfacilities in the territory of the other. Water resourcescommon to two or more States are often the subjectof inter-State arrangements covering the exploitationof such resources.

(11) Lastly, States may enjoy, in the territory of one ormore other States, treaty rights laid down in multilateralagreements such as those establishing the EuropeanCommunities, which involve acceptance by States of"restrictions of their sovereignty over certain naturalresources in return for the possibility of realizing certaincommon ends and securing certain common benefits." 66

B. "Rights in respect of the authorityto grant concessions" and their legal nature

(12) The Special Rapporteur feels it is quite inappropriateto consider the successor State as "subrogated" to therights of the predecessor State, or as "succeeding" to thelatter with, regard to its rights in respect of the authorityto grant concessions. Similary, it would be erroneousto consider those rights as being "transferred" to thesuccessor State. The phenomenon under considerationcannot be correctly described as subrogation, successionor transfer. All these legal concepts have the drawbackof implying that the successor State exercises the actualrights of the predecessor State through subrogation,succession or transfer.

The Special Rapporteur believes, on the contrary, thatthe successor State exercises its own rights as a newconceding authority, which replaces the former concedingauthority. The successor State acquires, by virtue of its

65 Secretariat study, p . 76, para. 72.64 G. F . de Martens, ed., Nouveau Recueit general des traites

(Leipzig, Dieterich, 1907), 2nd series, vol. XXXIV, pp . 708-710." Convention of 21 July 1927 between Belgium and Portugal,

regarding the Katanga traffic through the Port of Lobito and theBenguela Railway (League of Nat ions, Treaty Series, vol. LXXI ,p . 445). As is well known, Zambia is at present facing a criticalproblem as regards transit rights for its copper. The Secretariatstudy analyses other cases concerning other countries (see pp . 77-78,paras. 78-88).

66 See the Secretariat study, pp . 80-87, paras. 111-167.


sovereignty, the title of owner of the soil and subsoilof the transferred territory.

(13) In one of his reports, the Secretary-General of theUnited Nations has stated:

Sovereignty over natural resources is inherent in the quality ofstatehood and is part and parcel of territorial sovereignty *—that is,"the power of a State to exercise supreme authority over all personsand things within its territory".67- 68

The Special Rapporteur considers that this conceptionof sovereignty is irreproachable and is bound to excludeany idea of subrogation, succession or transfer in theexercise of rights in respect of the authority to grantconcessions. This problem is not made clearer by theformulation of treaty provisions, especially in devolutionagreements.69 It is clear, however, that contractingparties are concerned less with legal propriety thanwith adapting their respective rights and obligationsto their own convenience.

(14) It might be objected that if the successor Statepossesses rights in respect of the authority to grantconcessions not as a successor but as a State, thoserights should fall outside the scope of a study of Statesuccession. That is largely true and it seems a priorithat the problem of concession should be excluded fromthe topic of State succession. Except for cases wherethe concession is granted to a State, the sovereign actauthorizing the occupation and working of the publicdomain falls exclusively within the internal juridicalorder of the State.

In the Special Rapporteur's opinion, the question ofrights in respect of the authority to grant concessionsis not relevant to the study of succession of States inrespect of legislation. The fact that the successor State"receives" the internal juridical order of its predecessorshould not automatically imply that the concessionaryregime is thereby renewed. More precisely, that fact isneither necessary nor sufficient, it is simply irrelevant.For as soon as the successor State is considered to beexercising its own rights in respect of the authority togrant concessions when it "takes over" existing concessions,the renewal or rejection of the legislation of the prede-cessor State clearly has no effect on the problem. Thefact that concessions granted previously are taken intoconsideration is the result, not of the renewal of themunicipal law of the predecessor State, but of the exerciseof the rights of the new granting authority, in otherwords, the expression of the will of a new State.

67 He re the Secretary-General is quot ing L . Oppenheim,International Law: A Treatise. 8th ed. [Lauterpacht] (London ,L o n g m a n s , Green , 1955), vol. I , p . 286.

68 A/8058, pa ra . 1.69 Pa rag raph 2 of the preamble to the "Declara t ion of Principles

on Co-operation for the Development of the Wealth of the SaharanSubsoil" signed on 19 March 1962, states that "Algeria shall inheritthe rights, prerogatives and obligations of France as a publicpower granting concessions in the Sahara, for the application ofthe mining and petroleum legislation..." (Journal officiel de laRepublique francaise, Lois et Decrets (Paris), 20 March 1962,94th Year, No. 67, p. 3026.)

C. Obligations in respect of concessions,a question to be left pending

(15) In fact, in the context of the present articles, which,it should be remembered, concern public property, theSpecial Rapporteur cannot take up the problem of con-cessions in all their aspects (some of which relate to thesuccession of States in respect of legislation, while othersconcern the questions of acquired rights and internationalresponsibility). The concession contract gives rise notonly to rights but also to obligations, and at a subsequentstage it will be necessary to specify the way in whichsuccession of States influences the fate of those obligations.However, the Special Rapporteur is not concerned withthis matter for the time being, and has singled out theaspect of the concession question relating to the rights(and not the obligations) of the conceding authority,which in his view automatically belong to the successorState as essential attributes of its sovereignty.

The article which the Special Rapporteur proposesfor consideration by the Commission could have noother purpose, since it is concerned with public property.It simply recognizes the rights of the successor Statewithout indicating, for the time being, how and to whatend they should be exercised (maintenance or terminationof the concession).

(16) It would be another thing entirely to specify thetreatment which should be meted out to the concessionas such, for to shift thus from the problem of the rightsof the conceding authority to the obligations of the latter,would be to pass from the domain of public property,which is the subject of the present study, to that of con-tracts or concessions stricto sensu, and to that of acquiredrights, which the Special Rapporteur will take up at asubsequent stage of his work. That is why he does notintend to study at the present stage the substantivequestions relating to concessions, that is, making themaintenance of concessions dependent upon proof thatthey benefit the ceded territory, termination of "odious"concessions, termination of concessions granted malafide and the question of royalties.70

(17) The Special Rapporteur considers, however, thatthe approach which has made it possible to define therights of the conceding authority as not deriving fromsubrogation, succession or transfer will subsequentlyprovide a basis for resolving the problem of obligations.

If the concession is the expression of a sovereign actof the public power, that is a voluntary commitment toan individual or a State which is the beneficiary of theconcession, the International Law Commission knowshow to approach this commitment or, in other words,this consent to be bound. No matter how a concessionmay differ in nature from a treaty (and they do notdiffer at all when the concession is granted in a treaty),it would be advisable to envisage applying to concessions,mutatis mutandis, the same rules adopted for treatiesin the draft articles on succession of States in respectof treaties.

70 However, Charles Rousseau, in particular, studies all thesequestions in the context of succession to public property. Cf.Rousseau, op. cit., pp. 190-237.


Article 11. Succession to public debt-claims

1. Irrespective of the type of succession of States, publicdebt-claims which are proper to the territory affected bythe change of sovereignty shall remain in the patrimony ofthat territory.

2. The successor State shall, when the territorial changeis effected, become the beneficiary of the public debts ofall kinds receivable by the predecessor State by virtue ofthe exercise of its sovereignty or its activity in the territoryconcerned.

COMMENTARY

(1) Article 11 concerns one aspect of the question ofintangible property and rights. Some general reflectionson this category of property will be followed by commen-taries relating specifically to article 11.

A. Introduction

(2) Article 11 and the following articles to some extentrepresent the lex specialis as opposed to the lex generalislaid down in article 9 above.

Bluntschli at one time proclaimed the rule that "theproperty * of States which have ceased to exist passes,actively or passively, to the successors of such States".71

In another rule he dealt with the question of "publictreasuries", which he apportioned among several suc-cessors in proportion to population because "it is necessaryto go back to the fundamental element of the State, i.e.man, in order to find an equitable and reasonablesolution".72 The writer used the term "property" in thebroad sense which was given to it at the time and whichcovered "private property belonging to the Treasury, forexample, some industries, some land, and cash".73

(3) Today, the Treasury, public funds, the currency,State bank deposits, gold reserves of the institution ofissue, public debt-claims, tax revenue, State resources,and so on are for the most part property appertaining tosovereignty over the territory and its inhabitants, con-stituting financial means by which or in respect of whichthis sovereignty is expressed. The legal character of theright to coin money or the privilege of issue, the right tolevy taxes, the power of the public authority to takecoercive measures to recover debts to the Treasury,Customs duties or public debt-claims is such that itwould be inconceivable for the predecessor State to retainthese rights and powers.74

71 J. K. Bluntschli, Le droit international codifie, 5th ed. revisedand augmented, translation into French by M. C. Lardy, 2nd ed.(Paris, Alcan, 1895), p. 85 (rule 54).

72 Ibid., p . 87 (rule 58), commenta ry t o rule 58.73 Ibid., p . 85, commenta ry t o rule 54.74 A letter dated 5 September 1952, from Mr. D. L. Busk, British

Ambassador to Ethiopia, to the Ehiopian Minister for ForeignAffairs, specified that "transfer of power in Eritrea to the ImperialEthiopian Government and to the Eritrean Government shalltake place on a 'going concern' basis, that is to say, the existingBritish Administration will collect all revenue and pay all expensesof administration (including third-party claims...) up to 15 Sep-tember, 1952". (Exchange of notes constituting an agreementbetween the Government of the United Kingdom of Great Britainand Northern Ireland and the Government of Ethiopia regarding

(4) This does not necessarily mean that all such patri-monial rights or property belong to what is known insome systems of law as the "public domain" of the State,or that they alone belong to it. Such intangible rights asdebt-claims or income from a commercial activity of theState may come under the "private domain" in countrieswhere this concept exists or, to put it differently, underthe jus gestionis as opposed to the jus imperii, whichcharacterizes other State activities directly connectedwith the exercise of sovereignty.75

Taking this as his starting point, Professor Guggenheimwrites, in particular, that

. . . State revenue... is considered in most countries to belongto the private domain and as such, to be governed by the civil law.The disposal of State revenue is a matter which must * be settled byagreement between the ceding State and the ccssionary State.76

In point of fact, State revenue is governed by publiclaw to an increasing extent in most States. The existenceof treaty provisions, which are, moreover, extremely rare(see article 256 of the Treaty of Versailles), is hardlysufficient to warrant the conclusion that an obligationexists to determine the disposal of State revenue by agree-ment. The purpose of this comment is mainly to empha-size, as will be done again later, that a customary ruleregarding succession to revenue from taxation exists inthe very frequent cases where the matter is not settled byagreement.

(5) According to Professor Guggenheim, an agreementwould be particularly useful

where the predecessor State is not incorporated into the successorState and therefore continues to exis t . . . . If the State is dismem-bered, its revenue becomes part of the property to be covered bythe settlement. At the cime of apportionment, items are usuallyallocated to the State in which they are situated but are neverthe-less charged aginst its share. Where a State ceases to exist andthere is only one successor State, the latter acquires not only theState revenue in the territory of its predecessor but also its revenuein third countries.77

But where a State has ceased.to exist, there is generallyno agreement on the devolution of revenue, and wherethere is more than one successor State, the agreement, ifany, is concluded among these States.

The writer himself limits the scope of his rule byconfining its application to taxes: "Immovable * propertynevertheless passes to the successor S t a t e . . . if thelatter accepts the charges encumbering that property." 78

In the opinion of the Special Rapporteur, there is animperative obligation to devolve all public property

financial arrangements on the establishment of the Federat ion ofEritrea with Ethiopia, Addis Ababa , 5 and 6 September 1952(United Nat ions, Treaty Series, vol. 149, p . 58).

Although the term "going concern" may be reminiscent of businessprocedures, it is none the less expressive, indicating that the territoryhas to be transferred with all its financial machinery, as it previouslyexisted (taxes, Customs, currency, Treasury) and operating normally.

7 5 See inter alia P . Guggenheim: Traite de droit internationalpublic, 1st ed. (Geneva, Georg, 1953), pp. 467-468, no te 2.

76 Ibid., pp . 468-469.77 Ibid., p . 469.7 8 Ibid., p . 468, note 2.


appertaining to sovereignty, more especially resources,debt-claims and public funds.79

B. Patrimonial rights "defined by law"

(6) The question here is whether all tangible rights, bothacquired or potential, pass to the successor State. Anumber of decisions by national courts, particularly bythe Polish courts after the First World War, can be citedwhich interpret succession to public property and to allrights acquired or to be acquired in the broadest andfullest sense.80

Succession to "rights" and particularly to "interests", aterm which, as we have seen, is very vague, implies thatit is open to the cessionary State to assert future claimsand rights still to be acquired. There are even examples ofprovisions going beyond succession to rights still to beacquired or to interests. Article 1 of the Conventionbetween the United States and Denmark of 4 August 1916concerning the cession of the Danish West Indies callsfor the cession to the United States of "all territory,dominion and sovereignty, possessed, asserted ox claimed *by Denmark." 81

Another example is article 1 of the Treaty of Paris(1861) whereby His Most Serene Highness the Prince ofMonaco renounced

in perpetuity, on his own behalf and on behalf of his successors,in favour of His Majesty the Emperor of France, all direct orindirect * rights over the communes of Menton and Roquebrune,irrespective of the origin and nature * of his rights thereto.82

(7) Some decisions go so far as to recognize the right ofthe successor State to demand payments to be made to athird party. In 1866 the Prussian State had concluded an

79 D . Bardonnet, op. cit., pp . 573-574, considers that there is"a presumption of succession to public property in general,

whether part of the public or private domain, whether immovableor movable. . . Exceptions to the principle of total transfer must beexpressly provided for in the treaties and must be strictlyinterpreted."In a work by one of the authors who has attempted to codify

international law (J. Intcrnoscia: New code of international law1st ed. (New York, The International Code Company, 1910,p. 54) we find a rule 310, reading as follows: "A State that inheritsmust assume the charge of... (3) the money and property of the fisc(I'argent et les biens du fisc; il denaro e la proprieta del fisco)",and a rule 313 which states: "The money, forests, lands and, ingeneral, all movable and immovable property of the treasuryof the extinct State becomes its property." (The reference here isto "loss of the whole territory".)

8 0 See, for example, Supreme Court of Poland, Polish StateTreasury v. Skibniewska (1928), in A. D. McNair and H. Lauter-pacht , eds., Annual Digest of Public International Law Cases,1927-1928 (London, 1931), Case N o . 48, pp . 73-74, which interpretsarticle 208 of the Treaty of Saint-Germain-en-Laye (providingfor the transfer of all "property and possessions" to the successorsof Austr ia-Hungary) as including all claims as well.

81 English text in Supplement to the American Journal of Inter-national Law (New York , 1917), vol. I I , p . 55 ; French text in Revuegenerate de droit international public (Paris, 1917), t. XXIV, p . 454.With regard to property "claimed" by Denmark , the predecessorState, see the commentary to draft article 2, paragraph 2 (propertyin irregular possession), in the fourth report (Yearbook... 1971,vol. II (Part One), pp . 168-169, document A/CN.4/247 and A d d . l ,Part Two, paras. 9-12 of the commentary to article 2).

82 G . F . de Martens, ed., Nouveau Recueil general de traites(Gottingen, Dieterich, 1869), vol. XVII , part II , p . 56.

agreement with a city, subsequently ceded to Poland,under which the city was required to contribute towardsthe upkeep of a secondary school. The Supreme Courtof Poland found that the successor State had acquiredthe rights which the Prussian State derived from theagreement of 1866 even if this were a right to demandpayments to be made to a third party, the school having aseparate legal personality.83

C. Observations on article 11

(8) In the opinion of the Special Rapporteur, the rule setout in this article is applicable to all types of succession ofStates. That is why he has placed this article in the partrelating to common provisions. Consequently, he merelydraws attention to the commentary in his fourth report.84

IV. PROVISIONS RELATING TO EACH TYPEOF SUCCESSION OF STATES

INTRODUCTION: TYPES CONSIDERED

20. As recalled earlier, 85 the Special Rapporteur, inhis third, fourth and fifth reports, submitted articlesdrafted on the basis of a uniform approach, designed tocover all possible types of succession. He does not knowwhether he succeeded in that task, but he is well aware ofits complexity and of the risks involved.

21. It is likewise in order to facilitate the Commission'sinitial consideration of this subject that the SpecialRapporteur is reverting to the analytical method, at therisk of undertaking a repetitive and fragmentary taskand hence of drawing up a tedious catalogue, only todiscover in the final analysis that a number of problemsare solved in the same way, irrespective of the type ofsuccession involved. There will always be time, however,to rearrange some of the articles at a later stage of theCommission's work.

22. There remains the problem of the number of casesof succession to be studied for that purpose. Here again,to facilitate the Commission's consideration of the draft,the Special Rapporteur intends to adopt, by and large,the distinctions suggested by Sir Humphrey Waldock andapproved by the Commission in connexion with its studyof the draft articles on succession of States in respect oftreaties. As is well known, it was relatively easy (andultimately more profitable) to base that study on the lawof treaties, which is already more developed. It wasdefinitely advantageous to approach the succession ofStates in respect of treaties through "channels" whichwere already familiar. A priori, one might expect it to beequally advantageous to link the current draft, whichhas not been codified, to another draft which has. Thatapproach, however, clearly has its limitations.

83 Supreme Court of Poland, Case of the Polish State Treasuryv. City of Gniezno (1930), in H. Lauterpacht, ed., Annual Digest...1929-1930 (London, 1930), Case No. 31, p. 54 (quoted in Yearbook...1963, vol. II, p. 133, document A/CN.4/157, para. 336), and othersimilar cases.

81 Yearbook...1971, vol. II (Part One), pp. 185 et sea., documentA/CN.4/247 and Add.l, commentary to article 9.

86 See paras. 10-12 above.

30 Yearbook of the International Law Commission, 1973, vol. JQ

23. In any event, we shall study the cases of successionas defined in connexion with succession of States in respectof treaties, namely "(a) transfers of territory; (/>) newlyindependent States; (c) the uniting of States, the dis-solution of a State and the separation of part of a State".88

Basically, these are the categories which will be studied,even if the nature of the material dealt with leads theSpecial Rapporteur to define these types of succession ina slightly different way.

24. The difficulty of selecting the right approachobviously derives from the dreadful complexity charac-teristic of the material relating to succession of States.It must be admitted that it also results from the fact thatthe same case of State succession can be defined in severaldifferent ways: the end of the Habsburg dynasty at theend of the First World War is simultaneously the extinctionof a State (viewed from the angle of the disappearance ofthe Austro-Hungarian Empire), the dismemberment of aState (viewed from the same angle), the dissolution of aState or a separation of States (Austria and Hungary),and the emergence of new States (the parts of the territoryof the Empire other than Hungary and Austria whichbecame States or regained the status of States, such asCzechoslovakia and Poland). This extinction of theAustro-Hungarian Empire can also be regarded as theoccasion for the restoration or resurrection of a State(Poland), or as a partition among existing States and newStates (the latter being of two kinds, resuscitated Statesand territories which became States).

25. Although there are only too many options availablewhen classifying a case of this type, there are other cases,which, on the contrary, cannot possibly be classified in asatisfactory way. The types of succession singled out bythe Commission leave no scope for a historical consider-ation of cases of colonization. Similarly, another case ofsuccession of States, which is likewise not an isolated one,will serve to demonstrate the limitations of the optionsavailable, despite the Commission's genuine effort tocover all cases. This is the handing over of the FrenchEstablishments in India to the Indian Union in 1954.This was not a partial transfer of territory from oneState to another. Such an operation would imply thatthe territory was detached from one State and attached toanother. However, the United Nations Declaration onPrinciples of International Law concerning FriendlyRelations and Co-operation among States in accordancewith the Charter of the United Nations (General Assemblyresolution 2625 (XXV), annex), specifies that the territoryof an entity which is still dependent has a status separateand distinct from the territory of the colonial Power. Itcannot be argued that the Declaration is not applicableto the case because it was adopted after the events of1954.s' Furthermore, this case does not concern a newlyindependent State, since the Establishments in questiondid not constitute a State. Similarly, one can obviously

not refer to this event as a uniting of States or the dissol-ution of a union, since that would imply that the FrenchEstablishments in India had previously been States.Since they had not been States, they cannot be said tohave been completely absorbed by another State, namelyIndia. Lastly, this case cannot be classified as secessionby the separation of part of the territory of a State, sinceit does not involve the detachment of territory or thecreation of a new State.

26. Our task is complicated by a certain inconsistencyin the definition of phenomena when they are approachedfor this purpose not from one angle (for example, fromthe angle of the predecessor State or that of the successorState), but from two angles indiscriminately and with atendency to shift from one to the other without priorwarning or limitation. It is doubtless this fact whichprompted our former colleague, Professor Herbert Briggs,to say in 1963 that no two jurists described a case ofsuccession in the same terms.

27. Which classification of the various types of Statesuccession should we adopt?88

88 Yearbook...l972, vol. II, p. 229, document A/8710/Rev.l,para. 45.

87 Moreover, the Special Rapporteur believes, if he is notmistaken, that the French Establishments in India were notconsidered as forming part of "French territory" stricto sensu,even in French law.

88 Some examples of the classifications adopted by variouswriters are given below: Bluntschli {Le droit international codifie,translated from German by Mr. C. Lardy, 2nd ed. (Paris, Guillau-min, 1874), pp. 76-84) considers four types: (a) the disappearanceof States; (b) the cession of territory; (e) annexations and (d) thereplacement of one State by others. The Dictionnaire de la termino-logie du droit international (Paris Sirey, 1960, p. 587) defines"succession of States" by referring to four types of succession:(a) complete incorporation; (6) partial annexation; (c) partitionand (d) creation of a new State. A. Bonde (Traite eUmentaire dedroit international public (Paris, Dalloz, 1926), pp. 114-128) considers(a) the transformation of the territorial composition of Statesthrough dismemberment or annexation and (b) the disappearanceof States through dispersion, destruction of their territory, annexa-tion to another State or incorporation. P. Fiore (// diritto interna-zionale codificato e la sua sanzione giuridica, 5th ed,, enl. (Turin,Unione tipograffico-Editrice torinese, 1915), pp. 151 et seal) considers(a) separation from an established State; (b) restoration; (c) theState formed by the uniting of several other States; (d) completeannexation and (e) partial cession of territory. A. S. de Bustamantey Sirven {Droit international public, French translation by Paul Goule,1934-1939, (Paris, Sirey, vol. Ill, 1936), pp. 273-342) draws adistinction between "cases in which the affected State survives"(through (a) independence; (b) dismemberment and (c) partialannexation) and "succession proper, entailing the disappearanceand extinction of the State", (through (a) absorption by anotherState, (b) disintegration or partition and (c) merger and union).F. Despagnet (Cows de droit international public, 3rd ed. (Paris,Larose et Tenin, 1905), pp. 98-118) draws a distinction betweenthe extinction of States and cases involving changes in States,i.e. complete or partial annexation and the formation of a newState by separation. L. Cavare {Le droit international public positif,3rd. ed. (Paris, Pedone, 1967), vol. I, pp. 367-416) uses the followingclassification: (a) new States formed by detachment from anotherState; (b) changes in the territorial composition of the State asa result of enlargement or diminution (cession, annexation);(c) changes in the international legal constitution or internationalform of the State (diminution) of its personality when it becomesa member of a federation, a union of States or a real union, orbecomes a protected State, and expansion of its personality in casesinvolving secession from a federation or confederation, theacquisition of unitary form by a federal State, and the disappearanceof a protectorate). Charles G. Fenwick {International Law, 3rd ed.(New York, Appleton-Century-Crofts, 1948) draws a distinctionbetween universal succession (absorption by annexation, absorptionby incorporation into a federal union and division of one Stateinto a number of separate States) and partial succession (partialannexation, independence of a State which was previously aprotectorate or a member of a confederation). Max S0rensen

Succession of States in respect of matters othet than treaties 31

28. An attempt to clarify the matter would certainly bewelcome. Hans Kelsen rightly tried to reduce the wholeproblem of classifying the succession of States 89 to theacquisition of a territory by the successor State and theloss of that territory by the predecessor State. Thisphenomenon of "acquisition-loss" may or may not beaccompanied by the creation of a State or the disap-pearance of the predecessor State. In other words,according to Kelsen it involves:

1. The acquisition of a territory, i.e. a territory becomes theterritory of a given State, either by being added to the territory of anexisting State which thus becomes larger, or by becoming theterritory of a State which did not previously exist and thus comesinto being; and

2. The loss of a territory, i.e. a territory ceases to be part of theterritory of a given State, either because the territorial domain ofthe latter has been reduced or, in cases involving the loss of all theterritory of the State, because the latter has completely disap-peared.90

In view of the foregoing, he formulates the following classification:

1. Part of the territory of one State becomes part of the territoryof another State,

2. Or becomes a new State,3, The whole territory of one State becomes part of another State,4. Or is partitioned among several existing States,5, Or becomes the territories of several new States,6, Or becomes the territory of one new State.91

29. By following as closely as possible the classificationadopted by the Commission, one could probably envisage,

{Manual of Public International Law, London, MacMillan, 1968)employs the following classification: (a) total absorption by completeannexation; (b) the disintegration of a State; (c) secession throughrebellion; (d) cession of... territory and (e) the formation of federa-tions or unions of States. D. P. O'Connell (International Law,2nd ed. (Stevens, London, 1970), vol. I, p . 365) considers thatterritory can be transferred from one State to another in at leastfive ways (cession, annexation, emancipation or independence,union, federation). In these five cases one sovereignty replacesanother, either wholly (complete annexation) or only partially.Oppenheim (International Law: A Treatise, 7th ed. [Lauterpacht],London, Longmans, Green, 1948), vol. I) draws a distinctionbetween (a) universal succession (absorption, dismemberment) and(6) partial succession (independence, cession of territory, establish-ment of a federal State, accession of a protectorate to full sovereignty).K. Strupp "Les regies generates du droit de la paix", Recueil descours... 1934-1 (Paris, Sirey, 1934), pp. 255-595) distinguishesbetween: (a) secession-independence; (b) complete annexation;(c) entrance of a State into a federal union or its absorption intoanother State and (d) dismemberment, in which a whole series ofStates are established on the territory of another, which hasdisappeared as a result of revolutionary or other action (p. 473).He reduces all these phenomena to two categories, i.e. (a) completeextinction of a State and (b) partial changes (p. 474). Accioly(Traite de droit international public, French translation byPaul Goule (Paris, Sirey, 1940), vol. 1, pp. 190-200) uses thefollowing classification; (a) absorption or annexation of all orpart of the territory of a State; (b) division or dismembermentof a State; (c) complete or partial extinction of a State (p. 191).He then goes on to consider the effects of each case, and classifiesthem as follows: (a) complete annexation; (b) merger; (c) partialannexation and (d) separation or dismemberment.

8 8 Obviously, this problem does not concern cases of successionof Governments.

9 0 H. Kelsen: "Theorie generate du droit international public —Problemes choisis", Recueil des cours..., 1932-IV (Paris, Sirey, 1933),vol. 42, p . 315.

9 1 Ibid., pp. 315-316.

at least in the realm of pure logic, a double classificationof cases of State succession according to whether a newState was created and whether the predecessor Statedisappeared. Each of these main categories would thuscontain two subcategories, as follows:

(a) Succession without the creation or disappearance of a State(case of partial transfer of territory);

(b) Succession by creation of a State not entailing the disap-pearance of the predecessor State (case of newly-independentState);

(c) Succession by creation of a State and disappearance of thepredecessor State or States (cases of uniting of States, dissolutionof unions, merger, and creation of "composite" States);

(d) Succession without the creation of a State but entailing thedisappearance of the predecessor (absorption, extinction, completeintegration and partition among several States);

(e) Lastly, the special case of separation of part of a State (se-cession).

30. We shall now study each of these types separately.

A. Succession without the creation or disappearanceof a State (case of partial transfer of territory)

31. The Commission considered "transfer of territory"in the draft on succession in respect of treaties. Thisinvolves cases of partial secession or annexation, therectification of boundaries, the attachment of territory,and generally speaking the cases defined by the Com-mission as those "when territory under the sovereigntyor administration of a State becomes part of anotherState" (article 10 of the Commission's draft). Thecommentary on that article states that the latter covers

cases where territory not itself a State undergoes a change ofsovereignty and the successor State is an already existing State.The article thus concerns cases which do not involve a union ofStates or merger of one State in another, and equally do not in-volve the emergence of a newly-independent State.92

32. The Special Rapporteur therefore finds it convenientto use this definition and the commentaries thereon,except that he prefers to describe the transfer of territory"as "partial" in order to distinguish it from cases involvinga complete transfer of territory, which implies the dis-appearance of the predecessor State. Here, on the contrary,we are concerned exclusively with the partial transferof territory, i.e. succession without the creation ordisappearance of a State.

B. Succession by creation of a State not entailingthe disappearance of the predecessor State (case ofnewly-independent States)

33. This type of succession was likewise singled outby the Commission; it involves the cases of so-called"accession to independence" or "decolonization". Infact, succession by the creation of a State not entailingthe disappearance of the predecessor State covers abroader range of cases than those just mentioned,including secession, or separation through the detachment

92 Yearbook...l972, vol. II, p. 249, document A/8710/Rev.l,chap. II, C, para. 1 of the commentary to article 10.


of part of the territory of the State, whether unitaryor not, and its emergence as a separate State.93

34. However, in order to follow as closely as possiblethe pattern laid down in the work already done by theCommission, and also in order to highlight the casesinvolving decolonization and to evaluate, in accordancewith the repeated requests of the General Assembly,their contribution to the theory of State succession, theSpecial Rapporteur will consider under this headingonly the cases of "newly-independent States", a termwhich he will continue to use.94

Consequently, he will use the definitions adopted inthis connexion by the Commission in its draft on succes-sion in respect of treaties. The term "newly-independentStates" will have two meanings.

35. First, according to article 2, paragraph 1 (/) (entitled"Use of terms") of the Commission's draft, it "meansa State the territory of which immediately before the dateof the succession of States was a dependent territoryfor the international relations of which the predecessorState was responsible".

Similarly, it can also be used in the sense in whichit is employed in the commentary on the same sub-paragraph of article 2, which states that " the definitionincludes any case of emergence to independence of aformer dependent territory whatever its particular typemay be" (colonies, trust territories, mandates, protecto-rates and so on).95

36. The Special Rapporteur fears, however, that hecannot subscribe to that part of the commentary whichstates that the expression "newly-independent State"signifies a State which has arisen from a succession ofStates* in a territory...". The argument that the newlyindependent State arises from a succession is not flawlessfrom the legal point of view. It is precisely the oppositewhich is correct—that is, the problems of successionarise from the creation of a newly-independent State.

37. Secondly, in accordance with article 25 of theCommission's draft on succession in respect of treaties,the definition also covers the case of a newly-independent

83 This was also the view taken by Sir H u m p h r e y Waldockin his thi rd repor t (Yearbook...1970, vol. I I , p . 27, documentA/CN.4 /224 a n d A d d . l , para . 9) when h e defined the t e rm "newState" by referring to " a succession where a terri tory which previouslyformed par t of a n existing State has become a n independent S ta te" .

84 There is, of course, another reason for drawing a distinctionbetween accession to independence and secession. The case ofBelgium, which seceded from the Netherlands in 1830, shouldnot be treated in the same way as the liberation of a colony. TheDeclaration on Principles of International Law concerning FriendlyRelations and Co-operation among States already cited (see para. 25above) indicates that the sovereignty of the metropolitan Statedoes not extend to colonial territories (Cf. Yearbook...1971, vol. II(Part One), p. 166, document A/CN.4/247 and Add.l, Part Two,paras 20 and 31 of the Commentary to article 1, and in particularnote 33, which states that owing to the "otherness" of the colonialterritory, "a proclaimed independence can no longer be analysedin terms of the secession or partial cession of a territory, sinceboth of these presuppose a territorial oneness of the colony andthe metropolitan country, and there is no longer any legal basisfor this".

95 Yearbook... 1972, vol. II, p. 231, document A/8710/Rev. 1,chap. II, C, para. 6 of the commentary to article 2.

State "formed from two or more territories, not alreadyStates when the succession occurred".96

38. The Commission seems to have considered in thiscontext cases involving decolonization. However, thecreation of a State without the disappearance of thepredecessor State, which we are considering here, shouldnaturally include, for example, the creation of Polandat the end of the First World War, from territoriesdetached from Russia, Austria-Hungary and Germany.That, too, is a case involving the creation of a Statewhich has, according to the aforementioned definitionadopted by the Commission, been "formed from twoor more territories, not already States when the successionoccurred". The approach adopted by the Commissionreduces the problem to cases of decolonization alone,and furthermore covers only the formation of a newState from territories which were themselves under thesovereignty of a single predecessor State, the formermetropolitan country. The case of Poland shows thatthese territories may have been detached from severalpredecessor States. Following the Commission in thisrespect also, the Special Rapporteur will set this categoryaside for the time being and will merely touch uponit lightly.

C. Succession by creation of a State and disappearanceof the predecessor State or States (cases of unitingof States, dissolution of unions, merger and creationof "composite" States)

39. This is the third category adopted in 1972 by theCommission in its draft articles on succession in respectof treaties. Here two or more successor States emergefrom one predecessor State through the dissolution ofa union, or, in vice versa, two or more predecessor Statesbecome a single successor State through the unitingof States.

40. For the purposes of these articles, the SpecialRapporteur will take for granted the definition of theuniting of States, which according to article 26 of the1972 draft covers the "uniting of two or more Statesin one State". The commentary on that article statesthat it "deals with a succession of States arising fromthe uniting in one State of two or more States, whichhad separate international personalities at the date ofthe succession",97 which "involves therefore the dis-appearance of two or more sovereign States and, throughtheir uniting, the creation of a new State".98

41. Similarly, the Special Rapporteur will retain thedefinition given in article 27 of the same draft, according

66 This occurred, for example, in the case of the United ArabEmirates, the federations of Nigeria, Malaysia, Ghana , Somaliaand Rhodesia-Nyasaland. See article 25 of the Commission'sdraft, and paragraph 1 of the commentary to that article {ibid.,p . 282).

The case of Ethiopia, which was annexed by Italy and liberatedafter the Second World War , is basically a case of decolonization.It is, however, difficult to consider Ethiopia as a "newly independentState", unless this term is considered applicable to a State whichhas regained its independence.

87 Ibid., p . 286, para . 1 of the commentary to article 26.88 Ibid., para. 2 of the commentary to article 26.


to which dissolution occurs "when a State is dissolvedand parts of its territory become individual States" "or "where parts of its territory become separate inde-pendent States and the original State ceases to exist".100

42. There is, however, one point which needs clarifica-tion : in this definition the Commission seems to be referr-ing literally to the dissolution of a State and not to thedisappearance of a union, thus running the risk of reducingthe problem under consideration to that of the completedismemberment of a unitary State which splits up andis replaced by new States established in each part of itsterritory. But the examples studied at length in thecommentary indicate clearly that the article refers in factto the dissolution of unions.101 Moreover, "the Commissionrecognized that almost all the precedents of a disintegra-tion of a State resulting in its extinction have concernedthe dissolution of a so-called union of States".102

43. As to the composite State, which according to theInternational Law Association is "formed out of several,previously separate States or territories*",103 is it clearerto draw a distinction between the State composed oftwo or more previously separate territories, whichbelongs in the category of newly-independent Statesexamined under B above,104 and the State formed outof two or more previously separate States, which belongsin the category of uniting of States, which is the subjectof this section.

D. Succession without the creation of a Statebut entailing the disappearance of the predecessor

44. This category covers the case in which the prede-cessor State disappears, to the benefit of a pre-existingsuccessor State (complete absorption, or extinction orintegration) or of two or more pre-existing States (parti-tion of one State among two or more others).105

45. The difference between this category and thoseexamined under C above is obvious. The case in whichthe State disappears completely through dismembermentand attachment of each of its parts to pre-existing Statesmust be carefully distinguished from that in which

99 Ibid., p . 292.100 Ibid., para. 1 of the commentary to article 27.101 Dissolution of Great Colombia, formed earlier by the uniting

of New Grenada, Venezuela and Quito (Ecuador), dissolutionof the union of Norway and Sweden in 1905, disappearance ofthe Austro-Hungarian Empire in 1918, dissolution of the unionof Denmark and Iceland in 1944, dissolution of the United ArabRepublic, the Mali Federation and so on.

102 Yearbook...l972, vol. II , p . 295, document A/8710/Rev.l,chap. II , C, para. 12 of the commentary to article 27.

103 International Law Association, Report of the fifty-thirdConference, Buenos Aires, 1968 (London, 1969), p . 600 (InterimReport of the Committee on the Succession of New States to theTreaties and Certain Other Obligations of their Predecessors),foot-note 2.

104 See paras. 33 et seq. above.106 Of course, this category can be enlarged or complicated by

including cases involving the disappearance of the predecessorState as a result of its partition—in the strict sense of the term—among pre-existing States, or among two or more territories ofthe same State which have become States, or among pre-existingStates and new States.

it disappears to the benefit of a new State, by mergeror uniting, or to the benefit of two or more new States,by the establishment of such States in the various partsof its territory.

46. The Special Rapporteur for his part considers thecases envisaged in this hypothesis as being basicallyinvalid in the light of contemporary international law,which prohibits the annexation, the partition or theabsorption of a State by one or more others, even thoughcases of this sort do occur in practice, particularly inthe course of armed conflicts.

47. The Commission will remember that in his fourthreport the Special Rapporteur had already proposeda draft article 1 under which

Territorial changes which occur by force or through a violationof international law or of the Charter of the United Nations shall bewithout legal effect,

and

The State which commits an act of conquest or annexation shallnot be deemed to be a successor State .. ,106

In the present report, he has recalled these commentsby submitting a draft article 2 relating to the needto consider only cases of succession of States "occurringin conformity with international law and, in particular,the principles of international law embodied in the Charterof the United Nations".

48. It will be for the Commission to decide whetherthis type of "succession without the creation of a Statebut entailing the disappearance of the predecessor",which the Special Rapporteur has included here solelywith a view to complete coverage of the four types ofsuccession logically conceivable, is to be finally retained.

E. Special case of separation of partof a State (secession)

49. In order to conform as closely as possible to theprevious decisions and general approach of the Commis-sion, the Special Rapporteur will deal separately withthe case of separation of part of a State (secession).The Commission dealt separately with this case, for itdid not want to confuse it with that of newly-independentStates10"1 and therefore made it the subject of a specialarticle (article 28) in the 1972 draft.

50. The Special Rapporteur will adopt the approachapproved by the Commission in defining "separation ofpart of a State" or "secession": draft article 28 statesthat this occurs "if part of the territory of a State separatesfrom it and becomes an individual State". The commentaryon article 28 states that it is concerned "with the casewhere a part of the territory of a State separates from itand becomes itself an independent State, but the Statefrom which it has sprung, the predecessor State, continues

106 Yearbook...I971, vol. II (Part One), p . 162, documentA/CN.4/247 and Add . l .

107 See paras. 33 and 34 above.

34 Yearbook of the International Law Commission, 1973, vol. n

its existence unchanged except for its diminishedterritory".108

51. The classification used for the present study, whichis given below, will therefore be based as closely aspossible on that approved by the Commission. It coversthe following categories:

(a) Partial transfers of territory;(b) Newly independent States;(c) The uniting of States and the dissolution of unions[These three categories were retained by the Com-mission] ;

(d) Disappearance of a State benefiting one or morepre-existing States;

[Category which the Special Rapporteur hopes will beabandoned by the Commission as being no longer inconformity with international law];

(e) Separation of part of a State (or of various partsof different States);

[Category dealt with separately by the Commission ina special article].

SECTION 1. PARTIAL TRANSFER OF TERRITORY


1. The privilege of issue shall belong to the successorState throughout the transferred territory.

2. Currency, gold and foreign exchange reserves, and,in general, monetary tokens of all kinds circulating orstored in the territory shall pass to the successor State.

3. The assets of the central institution of issue in thepredecessor State, including those allocated for the backingof issues for the transferred territory, shall be apportionedin proportion to the volume of currency circulating or heldin the territory in question.

COMMENTARY

A. Introduction

(1) In all cases of succession of States, the problem ofthe currency can be reduced to that of redefining orequitably liquidating the juridical-financial relationsbetween the holders of paper currency, successor Statesand predecessor States. State interventionism has longposed this problem in terms of the relations between thepredecessor State and the successor State, but has notthereby eliminated the great technical complexitiesinvolved, with which, in the Special Rapporteur's opinion,

108 Yearbook...l972, vol. II, p. 296, document A/8710/Rev.l,chap. II, C, paragraph 1 of the commentary to article 28. (Secessionof Belgium, which separated from the Netherlands in 1830), ofCuba, (which separated from Spain in 1898), of Panama, whichseparated from Colombia in 1903; of Finland, which separatedfrom Russia after the First World War; creation of Czechoslovakiaand Poland from the remains of the Austro-Hungarian Empire;secession of the Irish Free State in 1922; "partition" of Pakistanin 1947 (the Anglo-Indian agreements considered India as theexisting State and Pakistan as the new State); secession of Bangla-desh (which separated from Pakistan in 1972) and so on.

the Commission need not concern itself in any detail.Even when considered in complete isolation from itsfinancial aspects and strictly within the context of Statesuccession, this question gives rise to problems in so faras it relates both to succession to public property andsuccession to public debts.

(2) Instruments of payment generally consist of threekinds of monetary tokens: first, the metal currency inthe strict sense, made up of the small coinage in circula-tion, second the bullion or gold reserves providing thebacking, and thirdly, the paper money or fiduciarycurrency, whose issue is generally entrusted to a Statebanking institution. The first two categories of monetarytoken pose the problem of a change of sovereignty interms of succession to public property, while the third,poses the problem in terms of succession to public debts.Paper money, generally guaranteed by a gold backing,theoretically constitutes a debt owed by the institutionof issue to the bearer of the fiduciary currency.

(3) The successor State may very well conserve theformer currency. Its discretionary power can be expressedequally well by exercising its privilege of issue or by notexercising it. It may content itself with symbolic formalmodifications (over-stamping, surcharges, new images)or with a change in the name of the former unit ofcurrency, which is left in circulation. On the other hand,it may introduce a new currency in the transferredterritory: this is usually the currency of the successorState itself in the case of a partial transfer of territory,or a new currency in cases involving the creation of asuccessor State. When the new currency is introduced,the successor State indicates the rate of exchange betweenthat currency and the old currency.

(4) In order to illustrate the "public debt" aspect of thecurrency question, Max Huber once wrote:

Since State bank-notes as a whole constitute a debt, the regularrules concerning the transfer of obligations are applicable. Thebank-notes shall represent a claim against the same debtor, whoretains all the backing. The situation with respect to bank-notes isthe same as that of any holder of private paper payable to thebearer.109

Hence, it is not illogical to conclude that in so far asthe new successor State replaces the former State in thetransferred territory, taking over the obligations derivingfrom the circulation or holding of paper currency in theterritory concerned, it is entitled to claim a correspondingportion of the assets and of the backing in gold or foreignexchange which guaranteed the fiduciary currency.

It should be noted that in the older types of successionmetal currency was the main source of concern, whilelittle attention was paid to the question of bank-notes,which were considered merely as commercial paper whichwould be liquidated without any intervention by thenew sovereign.

109 M. Huber, Die Staatensukzession: Volkerrechtliche undStaatsrechtliche Praxis im XIX. Jahrhundert (Leipzig, Dunker undUmblot, 1898), p. 108.


B. The privilege of issue

(5) Paragraph 1 of the proposed article does not call forlengthy comment, since it is obvious that the privilege ofissue, which is an attribute of public authority, canbelong only to the new sovereign in the transferredterritory.

(6) As drafted, the paragraph does not mean that theprivilege of issue is the subject of a succession or a transfer.The predecessor State loses its privilege of issue in thetransferred territory and the successor State exercises itsown privilege of issue, which it derives from its sover-eignty. Just as the successor does not derive its sover-eignty from the predecessor,110 so also it does notreceive from the predecessor an attribute of sover-eignty such as the privilege of issue. The paragraphsimply states that the privilege of issue "belongs" to thenew sovereign throughout the territory affected by thechange. It is not inherited.

(7) As in the case of any right, however, a distinctionmust be drawn between the possession and the exerciseof this privilege. The fact that the successor State may bytreaty allow others to exercise or continue to exercisethis privilege is evidence that it is in full possession of theprivilege, inasmuch as it has the power thus to dispose ofit. Article 3 of the Convention between the UnitedStates of America and Denmark providing for the cessionof the Danish West Indies reads as follows:

It is especially agreed, however, that:

(4) The United States will maintain . . .Qf) Concession of June 20th, 1904, for the establishment of a

Danish West-Indian bank of issue. This bank has for a period of30 years acquired the monopoly to issue bank-notes in the DanishWest-India islands against the payment to the Danish Treasury of atax amounting to ten per cent of its annual profits.111

The United States was, of course, subrogated to Denmark,the ceding State, with regard to collection of the 10 percent tax. However, practices of this kind, which werenever very widespread, are dying out, and the successorState itself is exercising its power to coin money andissue notes.

(8) The successor's sovereign exercise of the privilege ofissue has sometimes been limited by treaty. When Genoawas ceded to the King of Sardinia in 1814, it was decidedthat "the gold and silver currency of the ancient Stateof Genoa", as they then existed, would be accepted bythe public treasury concurrently with the currency ofPiedmont.112 Article 77 of the treaty of peace withTurkey, signed at Sevres on 10 August 1920,11S provided,in connexion with the cession of Smyrna to Greece, for

the maintenance of the Turkish currency for five years.The treaty was, however, never brought into force.

(9) Yugoslavia exercised its privilege of issue in zone Bof the Territory of Trieste by introducing first, in Novem-ber 1945, a special currency, the "Yugolira", and laterthe Yugoslav national currency, the dinar.

C. Currency

(10) When Transjordan became Jordan, it succeeded toa share of the surplus of the Palestine Currency Board,estimated at £1 million, but had to pay an equivalentamount to the United Kingdom for other reasons.114

(11) The French Government withdrew its monetarytokens from the French Establishments in India butagreed to pay compensation. Article XXIII of theFranco-Indian Agreement of 21 October 1954 115 stated:"The Government of France shall reimburse to theGovernment of India within a period of one year fromthe date of the de facto transfer the equivalent value atpar in £ sterling or in Indian rupees of the currencywithdrawn from circulation from the Establishmentsafter the de facto transfer."

D. Case of partial transfers of territoryto various pre-existing successor States

(12) This case involves a number of successor States,as a result of the transfer of several territories. Thepredecessor State may continue to exist, surrenderingonly part of its territory to be divided between two ormore States.

By virtue of its own sovereignty, each successor Statepossesses its privilege of issue, of which it may dispose atits discretion; no special difficulty arises here. Thequestion which concerns us is how the successors dividethe gold holdings, foreign exchange reserves, money incirculation, and so forth. The disposal of this publicproperty is generally governed by an apportionmentagreement. It does not seem possible to enunciate arule for apportionment that would take into accountall the factors involved (the size of the territory's popu-lation, the comparative wealth of the territory, its pastcontribution to the formation of the central reserves, thepercentage of paper money in circulation in the territory,etc.).

(13) It must be borne in mind in this connexion that thetransfer of this paper money to the new sovereign mainlyrepresents succession to a debt, whereas the transfer ofthe bullion reserves represent a succession to publicproperty. Thus the successor State usually tries to with-draw the old notes from circulation, both because they

110 See Yearbook..J969, vol. II, p. 77, document A/CN.4/216/Rev.l, para. 29.

111 For reference, see note 81 above.112 Protocol of the Congress of Vienna, draft articles annexed

to the Protocol of the meeting of 12 December 1814, in G. F. de Mar-tens, ed. Nouveau Recueil general de traites (Gottingen, Dieterich,1887), vol. II, p. 8.

113 de Martens, ed., Nouveau Recueil general de traites (Leipzig,Weicher, 1924), 3rd series, vol. XII, p. 681.

114 See the Agreement of 1 May 1951 between the United King-dom and Jordan for the settlement of financial matters outstandingas a result of the termination of the mandate for Palestine (UnitedNations, Treaty Series, vol. 117, p. 19).

115 English text in India, Foreign Policy of India: Texts ofDocuments, 1947-64 (New Delhi, Lok Sabha (secretariat), 1966),p. 212. French text in France, Ministry of Foreign Affairs, Recueildes traites et accords de la France, annee 1962 (Paris, 1962), p. 535and Journal officiel de I 'Indefrancaise (Pondicherry), 22 October 1954,No. 105, p. 567.


represent a debt and because this operation provides anopportunity to manifest its new sovereign power of issue.

With the disappearance of the old Tsarist empire afterthe First World War, some of its territories passed toEstonia, Latvia, Lithuania and Poland.116 Under thepeace treaties concluded, the new Soviet regime becamefully responsible for the debt represented by the papermoney issued by the Russian State Bank in these fourcountries.117 The provisions of some of these instrumentsindicated that Russia released the States concerned fromthe relevant portion of the debt, as if this was a derogationby treaty from a principle of automatic succession to thatdebt. Other provisions even gave the reason for sucha derogation, namely the devastation suffered by thosecountries during the war.118

(14) At the same time and in these same treaties part ofthe bullion reserves of the Russian State Bank wastransferred to each of these States. The ground given inthe case of Poland is of some interest: the 30 million goldroubles paid by Russia under this head corresponded tothe "active participation" of the Polish territory in theeconomic life of the former Russian Empire.

Article 13. Treasury and public funds

1. Public funds, liquid or invested, belonging to thepredecessor State and situated in the transferred territoryshall pass into the patrimony of the successor State.

2. Irrespective of where they are situated, public funds,liquid or invested, which are proper to the transferredterritory shall continue to be allocated and to belong tothe transferred territory.

3. Upon closure of the public accounts relating toTreasury operations in the transferred territory, thesuccessor State shall receive the assets of the Treasuryand shall assume responsibility for costs relating theretoand for budgetary and Treasury deficits. It shall alsoassume the liabilities on such terms and in accordance withsuch rules as apply to succession to the public debt.

COMMENTARY

A. Public funds

(1) A distinction should be drawn between public fundsbelonging to the predecessor State and public fundswhich are proper to the transferred territory.

1. State public funds

(2) State public funds in the transferred territory mustbe understood to mean cash, stocks and shares which,

118 No reference is made here to the cases of Finland, whichalready enjoyed monetary autonomy under the former Russianregime, Bessarabia, which was incorporated by the great Powersinto Romania, or Turkey.

117 See the following treaties: with Estonia of 2 February 1920,article 12; with Latvia of 11 August 1920, article 16; with Lithuaniaof 12 July 1920, article 12; and with Poland of 18 March 1921,article 19 (League of Nations, Treaty Series, vol. XI, p. 51; vol. II,p. 212; vol. Ill, p. 122 and vol. VI, p. 123).

118 See B. Nolde, "La monnaie en droit international public",Recueil des cours,..1929-II (Paris, Hachette, 1930), vol. 27, p. 295.

although they form part of the over-all assets of theState, are situated in the territory or have a relationshipto it by virtue of the State's sovereignty over or activityin that region. The principle of total transfer of all theassets of the predecessor State requires that these fundsshould pass to the successor State.

State public funds may be liquid or invested; theyinclude stocks and shares of all kinds. Thus, the acquisi-tion of "all property and possessions" of the GermanStates in the territories ceded to Poland included also,according to the Supreme Court of Poland, the transferto the successor of a share in the capital of an associ-ation.119

(3) Slovakia succeeded to Czechoslovakia's holdingsunder an agreement with the Third Reich dated 13 April1940. All the funds of public establishments, "whetheror not possessing juridical personality",120 becameSlovak, automatically and without payment, providedthat they were situated in the territory of Slovakia.Hungary, under the agreement of 21 May 1940 withthe Reich, succeeded ipso jure to the property of estab-lishments "controlled" by Czechoslovakia in the territorytaken over by Hungary.

(4) As part of the "transfer without payment of the rightof ownership over State property", the USSR receivedpublic funds situated in the Sub-Carpathian Ukraine,which, within the boundaries specifed in the Treaty ofSaint-Germain-en-Laye of 10 September 1919, was cededby Czechoslovakia in accordance with the Treaty of29 June 1945.

(5) The Free Territory of Trieste succeeded to all Italy'smovable assets, including public funds, under the 1947Treaty of Peace.121

2. Funds proper to the transferred territory

(6) Public funds "proper" to the transferred territoryinclude, first of all, the funds belonging to the territoryas a separate administrative and financial authority.These funds never belonged to the predecessor Stateat any time when it was still exercising its jurisdictionover the territory; still less can they belong to it after itloses sovereignty over the territory.

(7) The utilization and ownership of funds proper to thetransferred territory clearly cannot be affected by thechange of sovereignty. The successor State undoubtedlyhas the power to terminate the application of the financialor other legislation of the predecessor State in the trans-ferred territory and to replace it by its own regulations orany other regulations it may wish to draw up especially

119 Digest by the United Nations Secretariat of the decision ofthe Supreme Court of Poland in Polish State Treasury v. DeutscheMittelstandskasse (1929) {Yearbook...l963, vol. II, p. 133, documentA/CN.4/157, para. 337).

i=o "Betriebe, Anstalten und Fonds, nut oder ohne eigene Rechts-personlichkeit*", in the words of the Agreement of 13 April 1940between Slovakia and the Reich, quoted by I. Paenson, "Lesconsequences financieres de la succession des Etats (1932-1953),(Paris, Domat-Montchrestien, 1954), p. 104.

121 Treaty of Peace with Italy of 10 February 1947, annex X(United Nations, Treaty Series, vol. 49, p. 209).


for that territory. But any changes in the status of thispublic property would be the result of an act by thesuccessor State acting in its capacity as a sovereign State,and would not be justified by the succession of Statesitself. This rule would seem to apply whatever the legalstatus or geographical location of this property, providedthat the latter is proper to the transferred territory. Theproperty may be situated in the territory itself, in theterritory of the predecessor State or in that of a thirdState.

B. Treasury

(8) The public accounts are usually closed as at the dateof transfer, and the transfer takes place ipso facto.Transfer of the Treasury is always difficult, however,because of the complexity of Treasury operations. Theassets, composed of public funds, stocks and securities,budgetary revenues, miscellaneous Treasury income andthe movable and immovable installations used by Treasurydepartments, should normally be transferred to thesuccessor State. In return, the latter assumes the liabilities,comprising miscellaneous and administrative costs of theTreasury, the public debt proper and any deficits.

(9) The successor State also assumes, in respect of thetransferred territory, any sums that may be due to thepredecessor State if it has a debt-claim against the localTreasury or has granted it advances. However, allthese matters must be studied in connexion with thepublic debt; the means of liquidating this debt willbe considered by the International Law Commissionat a later stage. The costs which pass to the successorState, consist, in particular, of the departmental expensesof the Treasury. Budgetary and Treasury deficits must becarefully distinguished from the liabilities represented bythe public debt. The latter is represented by variousdebt-claims against the Treasury by individuals or bodiescorporate. The budgetary or administrative deficit is notnecessarily of the same nature or the same origin.

(10) The Special Rapporteur has suggested a draft articlewhich would oblige the successor State to assume responsi-bility for costs incumbent on the Treasury which is beingtransferred by the predecessor State. It should be noted,however, that there have been cases where responsibi-lity for such costs remained with the ceding State. Forexample, article XII of the Treaty of Peace concludedat Bucharest on 7 May 1918 between the Central Powersand Romania122 stipulates that the State property(Staatsvermogen) of the ceded Romanian territories shallpass to the acquiring States free and clear of any compen-sation or costs. Many more examples of this kind couldeasily be found.


1. Archives and public documents of every kind relatingdirectly or belonging to the transferred territory, and publiclibraries of that territory, shall, irrespective of where theyare situated, follow the transferred territory.

2. The successor State shall not refuse to hand overcopies of such items to the predecessor State or to any thirdState concerned, upon the request and at the expense of thelatter State, save where they affect the security or sover-eignty of the successor State.

COMMENTARY

(1) The Special Rapporteur has nothing to add to thecomment given in his third report.123

A. Definition of items affected by the transfer

(2) Draft article 14 refers to "archives and public docu-ments of every kind".

There does not exist—at least in French—any genericterm capable of covering the great wealth of written,photographic or graphic material which the expressionused is intended to suggest. It must be understood as acomprehensive expression referring to the ownership,type, character, category and nature of the items, andthe article as finally formulated will have to be ac-companied by a detailed commentary to provide thenecessary explanations.

(3) The phase "archives and... documents" is used herein the broadest sense, due regard being had to diplomaticpractice, which is extremely consistent.

It is understood that the words "of every kind" referin the first place to the ownership of the archives; it isimmaterial whether they are the property of the State,of an intermediate authority or of a local public body, theessential point being that they consist of public documents.Whatever public law corporations and administrativedivisions exist in a State, their archives are what is meant.

The expression "of every kind" also refers to the typeof archives, whether diplomatic, political or administra-tive, military, civil or ecclesiastical, historical or geogra-phical, legislative or regulative, judicial, financial orother.

The character of the items, whether public or secret,is likewise immaterial.

The question of the nature or category of the archivesrelates not only to the fact that they may consist ofwritten material, whether in manuscript or in print,or of photographs, graphic material, and so forth, orthat they may be originals or copies, but also to thesubstance of which they are made, such as paper, parch-ment, fabric, leather, etc.

Lastly, the expression used is intended to cover allvarieties of documents. It seemed to the Special Rappor-teur unnecessary and pointless to enumerate all thesevarieties in a list which would necessarily be incompleteand would certainly be tedious. Examples of the wordingsused in diplomatic instruments are "archives, registers,plans, title-deeds and documents of every kind";124

122 G. F . de Martens , ed., Nouveau Recueil general de traites,(Leipzig, Weicher, 1921), 3rd series, vol. X, p . 856.

123 Yearbook... 1970, vol. I I , p . 152, document A/CN.4/226,part two, paras . 1-6 of the commentary to article 7.

124 This expression appears in several clauses of the Treaty ofVersailles of 28 June 1919; par t III, sect. I, article 38, concerningGermany and Belgium; sect. V, article 52, concerning Germanyand France in respect of Alsace-Lorraine, British and ForeignState Papers, 1919, vol. 112 (op. cit.), pp . 29-30 and 42).


"archives, documents and registers concerning the civil,military and judicial administration of the ceded terri-tories";125 "all title-deeds, plans, cadastral and otherregisters and papers";186 "any government archives,records, papers or documents which relate to the cessionor the rights and property of the inhabitants of the islandsceded";127 "all archives having a general historic interest"as opposed to "archives which are of interest to the localadministration";128 "all documents exclusively referringto the sovereignty relinquished or ceded... the officialarchives and records, executive as well as judicial";129

documents, deeds and archives... registers of births,marriages and deaths, land registers, cadastral docu-ments..." 130 and so forth.

B. The principle of the transfer of archivesto the successor State

(4) The principle of the transfer of archives to the suc-cessor State seems to be unquestioned. This is demons-trated by diplomatic practice.

1. Archives of every kind

(5) Archives of every kind are generally handed over to thesuccessor State immediately or within a very short time-limit. The Franco-German Treaty of 1871 providing fortransfer required the French Government to hand overto the German Government the archives relating to theceded territories.131 The Additional Agreement to thatTreaty imposed on the two States the obligation to returnto each other all the title-deeds, registers, and so forth,for municipalities on either side bounded by the newfrontier line between the two countries.132 After theFirst World War, the territories ceded in 1871 havingchanged hands again, the archives were dealt with in thesame way and the Treaty of Versailles required theGerman Government to hand over without delay to theFrench Government the items relating to those terri-

125 Article 3 of the Treaty of Peace between the G e r m a n Empireand France , signed at Frankfurt on 10 May 1871 (G . F . de Martens ,ed., Nouveau Recueil general de traites (Gott ingen, Dieterich, 1874),vol. XIX, p . 689).

126 Article 8 of the Addit ional Agreement to the Treaty of Peace,signed at Frankfur t on 11 December 1871 {ibid., (1875), vol. X X ,p . 854).

127 Article 1, para . 3 of the Convention between the UnitedStates of America and Denmark providing for the Cession ofthe Danish West Indies [for reference, see note 81 above].

128 Article VI of the Treaty of cession of the territory of theFree T o w n of Chandernagore , between India and France , signedat Paris on 2 February 1951 (United Nat ions , Treaty Series, vol. 203,p p . 158 and 160.

129 Article VIII of the Treaty of Peace between Spain and theUnited States of America, signed at Paris on 10 December 1898(W. M . Malloy, comp. , Treaties, Conventions, International Acts,Protocols and Agreements between the United States of Americaand other Powers, 1776-1909 (Washington, D .C . , U.S. GovernmentPrinting Office, 1910), vol. I I , p . 1693).

130 Article 8 of the Front ier Treaty between the Nether landsand the Federal Republic of Germany, signed at The Hague on8 April 1960 (United Nat ions , Treaty Series, vol. 508, p . 154).

131 Article 3 of the Treaty of Peace signed at Frankfurt on10 May 1871 (see note 125 above).

132 Article 8 of the Additional Agreement signed on 11 December1871 (see note 126 above).

tories.133 Under the terms of an identically wordedprovision of the same Treaty, the German Governmentcontracted the same obligation towards Belgium.134

2. Archives as an instrument of evidence

(6) In old treaties, archives were handed over to thesuccessor State primarily as instruments of evidenceand as titles to property.

The writings of past years seem to retain the impressof this concern for "evidence". "Archives", wrote Fau-chille, "and titles to the property acquired by the annexingState *, which form... part of the public domain, mustalso be handed over to it".136 The Convention wherebythe islands constituting the Danish West Indies were soldto the United States by Danemark in 1916 provided asfollows: "In this cession shall also be included anygovernment archives, records, papers or documentswhich relate to the cession or the rights and property *of the inhabitants of the islands ceded...".136 When Spain,by the Treaty of Paris of 10 December 1898, ceded tothe United States the property in the public domain ofCuba, Puerto Rico, the island of Guam and the Phi-lippine archipelago, it was stated that the cession included"all documents exclusively referring to the sovereigntyrelinquished or ceded... and such rights * as the Crownof Spain and its authorities possess in respect of theofficial archives...".137

However, the treaties in question do not seem to haveimplied by this that the ceding State had a right to retainother categories of archives.

3. Archives as an instrument of administration

(7) The simple idea has prevailed that, when territoryis transferred, concern for handing over as viable aterritory as possible should induce the predecessor Stateto relinquish to the successor all such instruments as willenable breakdowns in administration to be kept to aminimum and help to ensure that the territory is properlyand easily governable. Hence the custom of leavingto the territory all the written, graphic and photographicmaterial needed for the continuance of the proper adminis-trative functioning of the territory.

(8) One effect of this "practice" which is encounteredin some treaties of annexation, especially in Europe, wasthat in a few rare cases the predecessor State considereditself entitled to hand over only archives of an adminis-trative character 138 and to retain those which had a

133 Treaty of Versailles of 28 June 1919, part III, sect. V : Alsace-Lorra ine , article 52 (see note 124 above).

131 Ibid., par t III, sect. I , article 38.135 p Fauchille, Traite de droit international public, 8th edition

of the Manuel de droit international public de H . Bonfils (Paris,Rousseau, 1922), vol. 1, p . 360. para . 219.

136 Aritcle 1, paragraph 3 , of the Convention of 4 August 1916(see note 81 above).

137 Article VIII of the Treaty of 10 December 1898 (see note 129above).

138 This expression was understood in the broadest sense:taxation documents of all kinds, cadastral and public propertyregisters, administrative documents , registers of births, marriagesand deaths, land registers, judicial and penitentiary archives, e tc .


historical interest. However, such instances seem to beisolated ones.

There have been many examples of transfers of archivesincluding historical documents. In some cases, indeed,only this latter category is referred to, not because itmay at one time have been excluded from such transfersbut simply because the tribulations of international lifehad not yet drawn attention to it. For instance, France,as the successor State in Savoy and Nice, was able notonly to obtain from the Sardinian Government thehistorical archives which were in the ceded territoriesat the time but also, a century later, to obtain from Italy 139

the historical archives at Turin.140 Similary, Yugoslaviaand Czechoslovakia obtained from Hungary, by theTreaty of Peace of 1947, all historical archives whichhad come into being under the Hungarian monarchybetween 1848 and 1919 in those territories. Under thesame Treaty, Yugoslavia was also to receive from Hun-gary the archives concerning Illyria, which dated fromthe eighteenth century.141 It is easy to find many moreexamples relating to this point.

Thus, it seems reasonable to lay down as a generalrule for all types of succession the principle of the transferof archives of every kind to the successor State.

However, the draft article makes another specificationwhich requires commentary. It refers to archives "relat-ing. .. or belonging to the territory".

C. The archives-territory link

(9) The suggested text enunciates the principle of thehanding over to the successor State of archives "relatingdirectly or belonging to the territory". It should be madeclear what is meant by these words.

Obviously, the successor State cannot claim simplyany archives, but only those which belong to the terri-tory. This must be appraised from two standpoints.

(10) First, there are archives which were acquired beforethe change of sovereignty by or on behalf of the territory,against payment of free of cost, and with funds of theterritory or otherwise. From this first standpoint, sucharchives "belong" to the territory and must follow itsdestiny in the change of sovereignty. In order to do so,it is not necessary that the archives should relate to theterritory, since it is quite conceivable that the territorymay have acquired, free of cost or against payment,historical, cultural or other documents concerning otherparts of the world.

(11) Secondly, the organic link between the territory andthe archives relating to it must be taken into account.However, a difficulty arises when the strength of thislink has to be appraised by category of archives. Writersagree that, where the documents in question "relate tothe predecessor State as such and refer only incidentallyto the ceded territory", they "remain the property of the

ceding State, [but] it is generally accepted that copieswill be supplied to the annexing State at its request".142

The "archives-territory" link was specifically taken intoaccount in the Rome Agreement of 23 December 1950between Yugoslavia and Italy concerning archives.143

Attention may be drawn at this point to the decisionof the Franco-Italian Conciliation Commission in whichthe Commission held that archives and historical docu-ments, even if they belonged to a municipality whoseterritory was divided by the new frontier drawn up inthe Treaty of Peace with Italy, must be assigned in theirentirety to France whenever they related to the territoryceded.144

(12) After the Franco-German war of 1870, the archivesof Alsace-Lorraine were handed over to the new Germanauthority in the territory. However, the problem of thearchives of the Strasbourg educational district and ofits schools was amicably settled by means of a specialconvention. In this case, however, the criterion of the"archives-territory" link was applied only in the case ofdocuments considered to be "of secondary interest tothe German Government".145

(13) Another problem which is touched on by the draftarticles as submitted and which has caused some difficultiesconcerns archives which, for one reason or another,are situated outside the territory affected by the changeof sovereignty.

D. Archives situated outside the territory

(14) The text suggested by the Special Rapporteur isof a general nature. According to the wording submittedfor discussion, the successor State has the right to claimits archives, wherever they may be situated. In fact, theformulation of such a rule seems to follow inevitably

130 This seems especially significant, in that Italy was itselfthe successor to the Sardinian Government .

140 See para . 21 below.141 Article 11 of the Treaty of Peace with Hungary (United

Nat ions , Treaty Series, vol. 4 1 , p . 178).

142 Ch. Rousseau, op, cit., p . 136. See also D . P. O 'Connel l ,State Succession in Municipal Law and International Law (Cambridge,University Press, 1967), vol. I , Internal Relations, pp . 232-233.

143 Article 6 of the Agreement (United Na t ions , Treaty Series,vol. 171, p . 291) provides that Archives which are indivisible orof c o m m o n interest to bo th parties "shall be assigned to tha t Par tywhich, in the Commission 's judgement , is m o r e interested in thepossession of the documents in question, according to the extentof the territory or the number of persons, institutions or companiesto which these documents relate,,f In this case, the other Par ty shallreceive a copy of such documents , which shall be handed over t oit by the Par ty holding the original".

111 Decision N o . 163 rendered on 9 October 1953 (United Na t ions ,Reports of International Arbitral Awards, vol. XIII, (op. cit.),pp . 503-549). This decision includes the following passage:"Communa l property which shall be so appor t ioned pursuantto paragraph 18 [of annex XIV to the Treaty of Peace with Italy]should be deemed not to include, all relevant archives and documentsof an administrative character o r historical va lue ' ; such archivesand documents , even if they belong to a municipality whose territoryis divided by a frontier established under the terms of the Treaty,pass to what is termed the successor State if they concern the territoryceded or relate to property transferred (annex XIV, para . 1); ifthese conditions are no t fulfilled, they are not liable either to transferunder paragraph 1 o r t o appor t ionment under paragraph 18,but remain the property of the Italian municipality. What is decisive,in the case of property in a special category of this kind, is the notionallink with other property or with a territory"^ {ibid., pp. 516-517).

145 Convention of 26 April 1872 signed at Strasbourg, (G.F. de Martens, ed., Nouveau Recueil general de traites (Gottingen,Dieterich, 1875), vol. XX, p. 875).

Yearbook of the Internationa] Law Commission, 1973, vol. II

from a consideration of practice, some examples ofwhich will be given below.

A distinction may be drawn between two cases: thatof archives removed from the territory concerned, andthat of archives established outside the territory butrelating directly to it. (There is a third case which will notbe considered in this study, namely that of documentsbelonging or relating to the territory which are situatedoutside the geographical boundaries of both the pre-decessor State and the successor State.)

1. Archives which have been removed

(15) Current practice seems to acknowlegde that archiveswhich have been removed by the predecessor State,either immediately before the transfer of sovereignty oreven at a much earlier period, should be returned to thesuccessor State.

There is a striking similarity in the wording of the instru-ments which terminated the wars of 1870 and 1914.Article 3 of the Treaty of Peace between France andGermany signed at Frankfurt on 10 May 1871 providedas follows: "If any of these items [archives, documents,registers, etc.] have been removed, they will be restoredby the French Government on the demand of the GermanGovernment".146 This statement of the principle thatarchives which have been removed must be returned waslater incorporated, in the same wording, in article 52 ofthe Treaty of Versailles, the only difference being thatin that treaty it was Germany that was compelled toobey the law of which it had heartily approved when itwas the victor.147

(16) Similar considerations prevailed in the relationsbetween Italy and Yugoslavia. Italy was to restore tothe latter administrative archives relating to the terri-tories ceded to Yugoslavia under the treaties signed inRapallo on 12 November 1920 and in Rome on 27 January1924 which had been removed by Italy between 4 No-vember 1918 and 2 March 3924 as the result of theItalian occupation, and also deeds, documents, registersand the like belonging to those territories which hadbeen removed by the Italian Armistice Mission operatingin Vienna after the First World War.148 The agreementbetween Italy and Yugoslavia of 23 December 1950 iseven more specific: article 1 provides for the delivery toYugoslavia of all archives "which are in the possession,or which will come into the possession * of the ItalianState, of local authorities, of public institutions andpublicly-owned companies and associations" and addsthat "should the material referred to not be in Italy, *the Italian Government shall endeavour to recover anddeliver it to the Yugoslav Government".149

(17) However, some French writers of an earlier eraseemed for a time to accept a contrary rule. Referring to

partial annexation, which in those days was the mostcommon type of State succession, owing to the frequentchanges in the political map of Europe, Despagnetwrote: "The dismembered State retains... archives relat-ing to the ceded territory which are preserved in a reposi-tory situated outside that territory".150 Fauchille did notgo so far as to support this contrary rule, but impliedthat distinctions could be drawn: if the archives areoutside the territory affected by the change of sovereignty,exactly which of them must the dismembered State giveup ? As Fauchille put it: "Should it hand over only thosedocuments that will provide the annexing Power witha means of administering the region, or should it alsohand over documents of a purely historical nature?"151

(18) The fact is that these writers hesitated to supportthe generally accepted rule, and even went so far as toformulate a contrary rule, because they accorded excessiveweight to a court decision which was not only an isolatedinstance but bore the stamp of the political circumstancesof the time. This was a judgement rendered by the Courtof Nancy on 16 May 1896, after Germany had annexedAlsace-Lorraine, ruling that "the French State, whichprior to 1871 had an imprescriptible and inalienableright of ownership over all these archives, was in no waydivested of that right by the change of nationality imposedon * a part of its territory".152 It should be noted thatthe main purpose in this case was not to deny Germany(which was not a party to the proceedings) a right to thearchives belonging to the territories under its controlat that time, but to deprive an individual of publicarchives which were improperly in his possession.153 Hencethe scope of this isolated decision, which appeared toleave to France the right to claim from individuals archiveswhich should or which might fall to Germany, seemsto be somewhat limited.

(19) The Special Rapporteur has nevertheless mentionedthis isolated school of thought because it seemed toprevail, at least for some time and in some cases, inFrench diplomatic practice. If we are to give credenceto one interpretation of the texts at least, this practiceseems to indicate that only administrative archivesshould be returned to the territory affected by the changeof sovereignty, while historical documents relating tothat territory which are situated outside or are removedfrom it remain the property of the predecessor State.For example, the Treaty of Zurich of 10 November 1859between France and Austria provided that archivescontaining titles to property and documents concerningadministration and civil justice relating to the territoryceded by Austria to the Emperor of the French "whichmay be in the archives of the Austrian Empire", includingthose at Vienna, should be handed over to the commis-

146 See note 125 above.147 See note 124 above.14 8 Article 12 of the Treaty of Peace with Italy of 10 February 1947

(United Nations, Treaty Series, vol. 49, p. 134). (For the RapalloTreaty, see League of Nations, Treaty Series, vol. XVIII, p . 387;for the Rome Treaty, ibid., vol. XXIV, p . 31.)

148 United Nations, Treaty Series, vol. 171, p . 293.

150 F . Despagnet, op. tit., p. 114, para. 99.151 P. Fauchille, op. cit., p . 360, para. 219.152 Judgement of the Court of Nancy of 16 May 1896, Dufresne

v. the State (M. Dalloz et al, Recueil periodique (Paris, Bureaude jurisprudence generate, 1896), part 1, pp. 411-412.

15S The decision concerned 16 cartons of archives which aprivate individual had deposited with the archivist of Meurthe-et-Moseile. They related both to the ceded territories and to territorieswhich remained French, and this provided a ground for the Court 'sdecision.


si oners of the new Government of Lombardy.154 If thereis justification for interpreting in a very strict and narrowway the expressions used, which apparently refer onlyto items relating to current administration, it may beconcluded that the historical part of the imperial archivesat Vienna relating to the ceded territories was not affec-ted.155

Article 2 of the Treaty of the same date between Franceand Sardinia 156 refers to the aforementioned provisionsof the Treaty of Zurich, while article 15 of the Treatyconcluded between Austria, France and Sardinia on thesame date reproduces them word for word.157

Similarly, a Convention between France and Sardinia,signed on 23 August 1860 pursuant to the Treaty ofTurin of 24 March 1860 confirming the cession of Savoyand the County of Nice to France by Sardinia, includesan article 10 which is cast in the same mould as thearticles cited above when it states:

Any archives containing titles to property and any admin-istrative, religious and civil justice documents relating to Savoyand the administrative district of Nice which may be in thepossession of the Sardinian Government shall be handed over tothe French Government.158

(20) Here again, the Special Rapporteur is somewhathesitant to conclude that these texts contradict the exist-ence of a rule permitting the successor State to claim allarchives, including historical archives, relating to theterritory affected by the change of sovereignty whichare situated outside that territory. Would it, after all,be very rash to interpret the words titles to property inthe formula "titles to property, administrative, religiousand judicial documents", which is used in all these treaties,as alluding to historical documents (and not onlyadministrative documents) that prove the ownership ofthe territory ? The fact is that in those days, in the Europeof old, the territory itself was the property of the sover-eign, so that all titles tracing the history of the regionconcerned and providing evidence regarding its ownership,were claimed by the successor.159 If this view is correct,the texts mentioned above, no matter how isolated, do

151 Article 15 of the Treaty of Peace between France and Austria,signed at Zurich on 10 November 1859 (France, Archives diplo-matiques, Recueil de diplomatic et d'histoire (Paris, Amyot, 1861),vol. I, p . 10; M. de Clercq, Recueil des traites de la France (Paris,Durand et Pedone-Lauriel, 1880), vol. VII (1856-1859), p . 647).

155 p o r t n j s viewpoint, see G. May, "La saisie des archivesdu departement de la Meurthe pendant la guerre de 1870-1871",Revue generate de droit international public (Paris), vol. XVIII,1911, p . 35; and Le traite de Francfort (Paris, Berger-Levrault, 1909),p . 269, note 2.

168 Article 2 of the Treaty between France and Sardinia concern-ing the cession of Lombardy, signed at Zurich on 10 November 1859(France, Archives diplomatiques (op. cit.), p . 16; and M. de Clercq,op. cit., p . 652).

157 Article 15 of the Treaty between Austria, France and Sardinia,signed at Zurich on 10 November 1859 (France, Archives diplo-matiques (op. cit.), pp. 22-23; and M. de Clercq, op. cit., pp. 661-662).

158 M. de Clercq, op. cit., vol. VIII (1860-1863), p. 83; G. F .de Martens, ed., Nouveau Recueil general de traites (Gottingen,Dieterich, 1869), vol. XVII, part II , p . 25.

168 As the Special Rapporteur noted above, historical documentswere often claimed by the successor State as instruments of evidence(see para. 6).

not contradict the rule concerning the general transferof archives, including historical archives, situated outsidethe territory concerned. If the titles to property meantonly titles to public property, they would be covered bythe words "administrative and judicial documents".Such an interpretation would seem to be supported bythe fact that these treaties usually include a clause whichappears to create an exception to the transfer of allhistorical documents, in that private documents relatingto the reigning house, such as marriage contracts, wills,family mementoes, and so forth, are excluded from thetransfer.160

(21) What really clinches the argument, however, is the factthat these few cases which occurred in French practice weredeprived of all significance when France, some 90 yearslater, claimed and actually obtained the remainder ofthe Sardinian archives, both historical and administrative,relating to the cession of Savoy and the administrativedistrict of Nice, which were preserved in the Turinrepository. The agreements of 1860 relating to thatcession were supplemented by the provisions of theTreaty of Peace with Italy of 10 February 1947, article 7of which provided that the Italian Government shouldhand over to the French Government "all archives,historical and administrative, prior to 1860, which concern *the territory ceded to France under the Treaty of March 241860, and the Convention of August 23, I860".161

(22) Consequently, there seems to be ample justificationfor accepting as a rule which adequately reflects Statepractice the fact that the successor State should receiveall the archives, historical or other, relating to the terri-tory affected by the change of sovereignty, even if thosearchives have been removed or are situated outside thatterritory.

2. Archives established outside the territory

(23) This section concerns archives consisting of itemsand documents which relate to the territory affected bythe change of sovereignty but which were establishedand have always been kept outside the territory. Manytreaties include this category among the archives whichmust revert to the successor State.

As noted above,162 France was able to obtain, throughthe Treaty of Peace with Italy of 10 February 1947,archives relating to Savoy and Nice established by theCity of Turin.

Under the agreement signed at Craiova on 7 September1940 concerning the cession of Southern Dobruja byRomania to Bulgaria, the latter obtained not only the

160 Article 10 of the Convention of 23 August 1860 betweenFrance and Sardinia (see note 158 above) provided that Francewas to return to the Sardinian Government "titles and documentsrelating to the royal family", which implies that France had alreadytaken possession of them together with the other historical archives.This clause relating to private papers, which is based on the dictatesof courtesy, is also included, for example, in the Treaty of 28 August1736 between France and Austria concerning the cession of Lorraine,article 16 of which left to the Duke of Lorraine family papers suchas "marriage contracts, wills and other papers".

161 United Nations, Treaty Series, vol. 49, p . 132.162 See para. 21 above.


archives situated in the ceded territory but also certifiedtrue copies of the documents at Bucharest relating to theregion which had become Bulgarian.

(24) What if the archives relating to the territory affectedby the change of sovereignty are situated neither withinthe territory itself nor in the predecessor State ?

Article 1 of the Agreement of 23 December 1950between Italy and Yugoslavia provided that "should thematerial referred to not be in Italy, the Italian Govern-ment shall endeavour * to recover and deliver it to theYugoslav Government".163 In other words, to use termsdear to experts in French civil law, the former is a rigorousobligation concerning the result, while the latter is asimple obligation concerning the means.

E. Problem or the "ownership" of archives

(25) The Special Rapporteur has been careful to specifyin the suggested article that the archives "follow thetransferred territory". In this way, he sought to avoidhaving to take a stand regarding the ownership of thearchives. The article merely states that the archivescannot remain in the patrimony of the predecessorState. They "follow the territory", that is, they maybecome the property of the successor State or of thetransferred territory, depending on circumstances andthe nature of the archives (archives proper to the terri-tory or archives relating to but situated outside the terri-tory). The question will be settled at the discretion ofthe successor State, the essential point being that theseitems cannot remain in the patrimony of the predecessorState.

F. Special obligations of the successor State

(26) The proposed draft article puts the successor Stateunder an essential obligation which is the natural counter-part of the obligation of the predecessor State to transferall archives to the successor. Changes of sovereigntyover a territory are often accompanied by populationmovements (establishment of new frontier lines whichdivide the inhabitants on the basis of a right of choice,annexations leaving the population a choice of national-ity, etc.). Clearly, the population in question cannot begoverned without, at least, administrative archives.For that reason the second paragraph of the draft articleprovides that the successor State shall not refuse to handover to the predecessor State, upon its request, copiesof any archives which it may need. Of course, this mustbe done at the expense of the requesting State.

It seemed useful to extend this possibility even to thirdStates, since such States may have nationals returningfrom the territory affected by the change of sovereignty,where they may have constituted a relatively large minor-ity.

(27) Clearly, however, the successor State is only obligedto hand over copies of administrative documents andother documents used for current administration.Furthermore, the handing over of these documents mustnot jeopardize the security or sovereignty of the

successor State. For example, if the predecessor Stateclaims the purely technical file for a military base it hasconstructed in the territory or the judicial record of oneof its nationals who has left the ceded territory, thesuccessor State can refuse to hand over copies of either.Such cases involve elements of discretion and expediencyof which the successor State, like any other State, maynot be deprived.

(28) The successor State is sometimes obliged, by treaty,to preserve carefully certain archives which may be ofinterest to the predecessor State in the future.

The Agreement of 21 October 1954 between Franceand India concerning the French Establishments inIndia 164 is interesting, because it specifies the periodof time for which the archives are to be preserved,and states that copies of the archives shall be handed overto the predecessor State whenever they exist.

In some cases, the successor State has handed over copiesor microfilms not only of administrative archives butalso of historical documents and papers.

G. Time-limits for handing over the archives

(29) The Special Rapporteur considered it unnecessaryto suggest the fixing of a time-limit for the transfer orreturn of archives to the successor State, althoughdiplomatic practice often sanctions the existence ofspecific provisions along those lines.165

Furthermore, in most countries public archives arenot only inalienable but may also be claimed at anytime because they are imprescriptible. The SpecialRapporteur has cited various cases in this commentary.

H. Transfer and return free of cost

(30) The Special Rapporteur felt that there would be nopoint in spelling out something which goes withoutsaying, namely that archives must be handed over to the

183 See foot-note 143 above.

161 For reference, see note 115 above. Article 10 concludes asfollows:

"The records of the French Courts shall be preserved in theirentirety during a period of twenty years and communicationof their contents shall be given to the duly accredited represent-atives of the French Government whenever they apply for suchcommunications."Article 11 reads:

"The records of the Registrars' offices shall be preserved andcopies or extracts of the proceedings shall be issued to the partiesor authorities concerned upon request.

"The third copies of each of the Registrars' offices books ofevery commune shall be handed over to the French representativeon the date of the de facto transfer.

"For the year 1954, the records of the Registrars' offices whichconcern the Ministere de la France d'outre-mer (Service de l'Etatcivil et cles Archives) shall be forwarded to that departmentat the end of the year.

"The personal judicial records of the Courts' Registries shallbe preserved and copies or extracts of these records shall beissued to the French authorities upon their application."166 The time-limits vary, according to the agreement in question,

from 3 to 18 months. It has also been stipulated that arrangementsshould be made by agreement for the handing over of archives"so far as is possible, within a period of six months^ following theentry into force of this Treaty." (Article 8 the Frontier Treaty of8 April 1960 between the Netherlands and the Federal Republicof Germany) (see note 130 above).


successor State free of cost and free of any tax or duty.The problem has already been settled in principle indraft article 9, which states that property necessary forthe exercise of sovereignty over the territory shall devolveautomatically and without compensation. This propertyincludes archives. Furthermore, this usage is firmlyestablished in practice.

The Special Rapporteur has nevertheless included theprinciple of transfer free of cost implicitly and a contrarioin the draft under consideration, which provides thatcopies of archives shall be made at the expense of therequesting State.

Article 15. Property situated outsidethe transferred territory

1. Subject to the application of the rules relating torecognition, public property proper to the transferredterritory which is situated outside that territory shall passwithin the juridical order of the successor State.

2. The ownership of property belonging to the prede-cessor State which is situated in a third State shall devolveto the successor State in the proportion indicated by thecontribution of the transferred territory to the creation ofsuch property.

COMMENTARY

A. Introduction

(1) Professor O'Connell writes:It would seem that in the case of partial succession, property of

the predecessor State not actually located in the territory does notchange its ownership. It has not come within the sovereign juris-diction of the successor State, and the latter can claim only so muchof it as it can seize or as is ceded to it. In the case of total succession,however, the predecessor loses its competence to own property.Such of its assets, therefore, as are situated in foreign countriesmust either become property of the successor State or cease to haveany owner. There is no reason to adopt the latter alternative. Asuccessor State in the case of total succession acquires all the rightsof its predecessor that appertain to sovereign jurisdiction. Suchjurisdiction embraces the capacity to possess assets located inforeign countries. It is reasonable to conclude, therefore, that theclaims of the successor State to be the owner of the assets of itspredecessor located in other States must be recognized by theStates concerned.166

He also cites a number of writers who admit successionto property abroad in cases of total succession.167

(2) Professor Rousseau likewise takes the view that "itis generally agreed that property abroad of a State whichis dismembered or which ceases to exist should also betransferred to the successor S t a t e s . . . . There is littledifference of opinion among writers on this point".168

Like O'Connell, however, he cites Professor Hall, who,along with a very few other writers, maintains that in thecase of land situated outside the territory the successorState has at the most a right to its value.169 An obligation

to sell would be imposed on it, since the right of actualpossession might prove more or less impracticable forsome reason arising out of the fact that the property isnow in foreign territory.

(3) In the case of a partial transfer of territory, the pointis not—at least in the view of the Special Rapporteur—what becomes of "public property of the predecessorState which is not situated in the ceded territory."Obviously—subject to a reservation which will be dis-cussed below—such property remains under the owner-ship of that State and cannot be transferred to thesuccessor. What is at issue is the exact opposite, namely,the fate of public property of the ceded territory situatedoutside the boundaries of the territory, and in particularin the territory of the predecessor State.

(4) In the case of partial succession, however, writers donot always consider—or do not consider clearly—whathappens to property of the ceded territory which issituated either in the now foreign territory of the pre-decessor State or in the territory of a third State. Rousseau,for instance, does not consider this at all because he isonly dealing with the case of total succession or, in otherwords, of "a State which is dismembered or which ceasesto exist".170

(5) As has been noted previously,171 the territory trans-ferred may have, and is necessarily the owner of, propertyof its own distinct from that the ownership of which wasin the hands of the predecessor State when the territorywas an integral part of that State, and such property ofthe ceded territory may, for one reason or another,172 besituated outside its own geographical area, either in theterritory remaining to the predecessor State or in a thirdState. These are the two cases which will have to beconsidered separately in discussing the problem ofproperty of the territory itself situated abroad.

(6) There remains the property concerning which areservation was expressed.173 This is property situatedabroad which belonged to the predecessor State beforethe change of sovereignty. The problem is whether thesuccessor State would be entitled to claim a share of suchproperty with the argument that the territory now addedto it may have contributed to the creation of the propertyin question when that territory was an integral part of thepredecessor State. This is another case that has to beconsidered separately. It is covered by paragraph 2 of theproposed article.

Let us consider each of these cases:

1 6 6 D . P . O'Connell, State Succession... (op. cit.), vol. I, p . 207.167 Ibid., foot-note 2.1 6 8 Ch. Rousseau, op. cit., p . 143.1 8 9 W. E. Hall, A Treatise on International Law, 8th ed. (Oxford,

Clarendon Press, 1924), p . 115.

1 7 0 In a paragraph headed "Exposition of the problem",Ch. Rousseau excludes even more clearly from the matters he isconsidering the problem of property of the ceded territory situatedin the predecessor State: "It is equally important to know wherethe property affected by the transfer is situated—whether it is inthe territory transferred or in the territory of any third State"(Ch. Rousseau, op. cit., pp. 122-123).

1 7 1 See Yearbook...l970, vol. II , pp. 150-151, document A/CN.4/226, paras. 28 and 29 of the commentary to article 2.

1 7 3 Ibid., para. 32 of the commentary.173 See para. 3 above.


B. Property proper to the transferred territorywhich is situated outside that territory

(7) The Special Rapporteur previously noted the lack ofattention generally given by writers to public propertyproper to the transferred territory.1'4 The reason whythey appear to have neglected this problem, despite itsimportance, is, perhaps, that they tacitly believed suchproperty should not be affected by the fact of transfer ofthe territory. While continuing to belong to the latter,the public property in question follows its political andjuridical destiny.

(8) A resolution of the Institute of International Lawlaid down the same principle, stating that local corporatebodies retained the right of ownership over their propertyafter territorial changes: "The territorial changes leaveintact those patrimonial rights which were duly acquiredbefore the change took place." The resolution specified"These rules also apply to the patrimonial rights of munici-palities or other corporate bodies belonging to the Statewhich is affected by the territorial change *.175

This plain fact is worth recalling and recording in arule of the kind suggested by the Special Rapporteur; for,although it is so obvious as to be unremarkable in thecase of property situated in the territory itself, it becomesmost important when a decision has to be taken on thefate of property of the territory itself which is situatedoutside its geographical boundaries.

(9) Clarity demands that a distinction should be madebetween cases where such property is situated in thepredecessor State and cases where it is in a third State.

1, Property proper to the territory which is situated in thepredecessor State

(10) This is a clear case: it concerns property belongingas of right to the territory appended to a pre-existingState but situated in the rest of the territory retained bythe predecessor State. In this case, one can discern twoprinciples, namely, the principle of non-transferability ofownership of property of this kind and the principle ofmodification of the legal regime governing it.

Non-transferability of ownership of property of this kind

(11) The occurrence of State succession does not transferthe right of ownership of property of this kind. Theproperty remains within the patrimony of the cededterritory. It cannot suddenly, merely because of thesuccession, become the property of the predecessor State,even if it is situated in the territory remaining to thatState after curtailment. Since the predecessor State didnot own this property before succession, it cannot, as aresult of the succession, create new rights for itself. Nordoes property of this kind pass to the successor State

"* See Yearbook...l970, vol. II, pp. 150-151, document A/CN.4/226, paras. 28 et seq. of the commentary to article 2, and pp. 156et seq., paras. 21 et seq. of the commentary to article 7.

176 Paragraphs 3 and 4 of resolution II of the Institute of Inter-national Law adopted at its forty-fifth session, held at Siena from17 to 26 April J952 {Annuaire de I'Institut de droit international,1952, II (Basle), vol. 44, pp. 475-476).

merely because of the succession. There appears to beno valid reason for stripping the ceded territory of itsown property.

Modification of the legal regime governing property ofthis kind

(12) If property of this kind should never pass to thepredecessor State—and it generally does not pass to thesuccessor State except as otherwise provided—it canonly remain the property of the ceded territory. Althoughthe right of ownership is thus non-transferable, there is achange in the rules governing the exercise and enjoymentof this right. The change is twofold:

Firstly, the predecessor State, in which the property issituated, will now treat it as foreign public property, withall that this implies as regards restrictive or protectivelegislation. This right of ownership, which is otherwiseunchanged as regards the entity in which it is vested, isthus exercised in a new setting and it is the laws, if any,relating to foreign property that will now be applied toit by the predecessor State.

Secondly, the ceded territory has passed within a newjuridical order, that of the successor State. As a result,property which belongs to that territory and whichnaturally follows the destiny of its owner can only beplaced under the protection of this new juridical order.While it is true that the successor State is not given theownership of this property, it nevertheless becomes thesubject of international law responsible for the property.As the property belongs to a territory which belongs tothat State, it falls within its juridical order. For example,it is the successor State that will ensure the internationalprotection of the property against the predecessor Statein which it is situated or against any third State.

It is this idea which, in a tentative and probably notentirely suitable formulation, the Special Rapporteur hastried to express in the suggested rule stating that "publicproperty proper to the transferred territory which issituated outside that territory shall pass within thejuridical order of the successor State *"'.

2. Property proper to the transferred territory which issituated in a third State

(13) Property of this kind unquestionably passes underthe protection of the juridical order of the successor State.

C. Property of the predecessor State which is situatedoutside the territory retained by that State

(14) Property of the predecessor State falls into fourcategories, according to where it is situated:

(a) Being owned by the predecessor State, it may be inthe part of the territory retained by that State, in whichcase it of course remains, in all circumstances, under itssole ownership;

(b) It may be situated in the part of the territory cededto the successor State. In this case, the principle of thetransfer of State property situated in the territory affectedby the change of sovereignty, which has already been


discussed, is fully applicable and the property concernedis acquired by the successor State;

(c) There remain the two cases in which the propertyof the predecessor State is either in the territory of thesuccessor State or in that of a third State. It would certainlyappear at first sight that only the status quo would befair and acceptable. However, there may have beeninstances where claims have been advanced by thesuccessor State.(15) It is with these cases in mind that the SpecialRapporteur has suggested, not without considerablemisgivings, a paragraph 2 under which public propertyof the predecessor State, in so far as it is situated outsidethe transferred territory and outside the territory of thepredecessor State, will be divided between the successorand the predecessor on the basis of the past contributionof the transferred territory to the creation of suchproperty. The Commission will say whether it is bothcorrect and useful to establish a provision of the kindsuggested.

SECTION 2. NEWLY INDEPENDENT STATES


1. The privilege of issue shall belong to the new sovereignthroughout the newly independent territory.

2. Currency, gold and foreign exchange reserves, and,in general, monetary tokens of all kinds which are properto the territory concerned shall pass to the successor State.

3. In consideration of the foregoing, the successor Stateshall assume responsibility for the exchange of the formermonetary instruments, with all the legal consequenceswhich this substitution of currency entails.

COMMENTARY

(1) The comments that were made earlier 176 on thesubject of the privilege of issue, as an attribute of sover-eignty, naturally apply also in the case of accession toindependence. There have been cases where agreementsbetween the former metropolitan country and the ex-colony allowed the predecessor State to continue tem-porarily to exercise the privilege of issue in the territorywhich had become independent.

It is nevertheless a firm principle that the privilege ofissue belongs to the successor State, the existence of suchagreements being a manifestation of the power of freedisposal which the newly independent State has in thisfield pending transfer.

(2) The agreements concluded by the French-speakingAfrican States and France are instructive in this con-nexion. The newly independent State is recognized assole possessor of the privilege of issue, which it never-theless entrusts to a French or Community body.Article 1 of the quadripartite Agreement on monetaryco-operation between France and the States of EquatorialAfrica reads as follows:

The French Republic recognizes that the accession to internationalsovereignty * of the States of Equatorial Africa confers on them theright to introduce a national currency and to establish their own bankof issue *.

Once the possession of the right has thus been recog-nized, the exercise of it is temporarily left to a Communitybody supervised by the French Republic. Article 2 of theAgreement is accordingly worded as follows:

The States of Equatorial Africa confirm their adherence to theMonetary Union of which they are members within the franc area.The franc CFA issued by the Banque centrale des Etats d'Afriqueequatoriale . . . shall remain the lawful currency being legal tenderthroughout their territories.177

(3) Under this Franco-African system, monetary policywas in principle decided multilaterally within a franc areacomprising, in addition to the Banque de France, fourbanks of issue closely linked to the French Treasury.The West African Monetary Union (UMOA), composedof the Ivory Coast, Senegal, Upper Volta, Niger, Dahomeyand Togo,178 has a common currency, the franc CFA(Communaute financiere africaine), issued by the BanqueCentrale des Etats de l'Afrique de l'Ouest (BCEAO),whose head office is in Paris. The Banque Centrale desEtats de l'Afrique equatoriale et du Cameroun, whichfollowing the recent agreements concluded at Brazzavillein December 1972 and at Fort-Lamy in February 1973has become the Banque d'Etat de l'Afrique centrale(BEAC), comprises Cameroon, the People's Republicof the Congo, Gabon, Chad and the Central AfricanRepublic and also has its head office in Paris. Mali andthe Malagasy Republic each have their own banks ofissue.

(4) The peculiarity of these four banks (which issue a francCFA that has no "international personality" and has anabsolutely fixed rate of exchange with the French franc),

11V111

176 See above, paras . 5 et seq. of the commentary to article 12. issue.

177 Agreement on Co-operat ion in Economic and FinancialMatters between the French Republic and the Central AfricanRepublic, the Republic of the Congo and the Republic of Chad(France, Journal officiel de la Republique francaise, Lois et decrets(Paris), 24 November 1960,92nd year, No. 273, p . 10461, and Decreeof publication No. 60-1230, ibid., p. 10459).

The agreement on Co-operation in Monetary, Economic andFinancial Matters between the French Republic and the MalagasyRepublic {ibid., 20 July 1960, No. 167, p. 6612) includes an article 1recognising Madagascar's right to introduce its own nationalcurrency and to establish its own national bank of issue, and anarticle 2 entrusting the function of issuing currency to a Malagasypublic establishment and creating a currency linked to the Frenchfranc.

See also other agreements entered into by France on monetary,economic and financial matters, including in particular the Treatyof 24 April 1961 with the Ivory Coast {ibid., 6 February 1962,94th year, No. 30, p. 1261), especially article 19; the Agreementsof 22 June 1960 with the Federation of Mali (ibid., 20 July I960(op. cit.), p. 6629); the "Bamako" Agreement of 9 March 1962with Mali, after the dissolution of the Federation of Mali (Ibid.,10 July 1964, 96th year, No. 160, p. 6131); the Agreements of24 April 1961 with Niger (ibid., 6 February 1962 (op. cit.), p. 1292;the Agreement of 13 November 1960 with Cameroon (ibid..9 August 1961, 93rd year, No. 186, p. 7429); the Agreements of17 August 1960 with Gabon (ibid., 24 November 1960 (op. cit.),p. 10481); the Agreement of 10 July 1963 with Togo (ibid.,10 June 1964,96th year, No. 134, p. 5000); the Treaty of 19 June 1961with Mauritania (ibid., 6 February 1962 (op. cit.), p. 1324).

178 Mauritania, which was the seventh member, withdrew asfrom the end of December 1972 and established its own bank of


is that each of them has an "operations account" opened inits name with the French Treasury in Paris. This accountis credited with all earnings by the French-speakingAfrican State or group of States from their trade withother countries and debited with the amounts of theirexpenditure abroad.

In return, the French Treasury gives these four banks ofissue its guarantee—in principle unlimited—by under-taking to supply them with francs and foreign exchangeto balance their operations accounts.179

(5) The fact that these monetary agreements are at presentbeing revised testifies both to their eminently evolutivecharacter and to the newly independent State's right offree disposal with respect to its privilege of issue, theexercise of which it can at any time reclaim and thepossession of which, indeed, it never legally lost.

(6) When the independence of the various Latin Americancolonies was proclaimed at the beginning of the nineteenthcentury, the Spanish currency was generally not with-drawn. The various republics confined themselves tosubstituting the seal, arms or inscriptions of the newState for the image and name of His Most CatholicMajesty on the coins in circulation,180 or to giving someother name to the Spanish peso without changing itsvalue or the structure of the currency.181

(7) In the proceedings of the Hague Round-Table Con-ference, there was one instance of a restriction on theexercise of the privilege of issue. The new IndonesianRepublic was required, as long as it had liabilities towardsthe Netherlands, to consult the Netherlands beforeestablishing a new institution of issue and a new currency.However, this restriction did not last for long.

(8) Ethiopia and Libya apparently did not succeed tothe monetary reserves, judging by the more clearlyestablished fact that they did not succeed to the obliga-tions derived from the issue of Italian currency. However,both countries made use of their right of issue to carryout monetary reforms when they became independent.

(9) In pursuance of the decisions taken at the Conferenceon Indochina held at Pau from 30 June to 27 November1950, a bank for Indochina was to begin operationson 1 January 1952 with authority to issue piastre notes,

178 It is no secret, however, that many African States requestedrevision of these monetary agreements because they consideredthe guarantee offered by the French Treasury to be illusory. Intheir view, the French Treasury operates less like a generous guardianthan like a prudent banker who gives an unlimited guaranteeonly to a customer having a credit balance. In other words, theguarantee would not operate. It is a fact that the agreements whichwere concluded lay down very strict rules to guard against imbalancesbetween receipts and expenditure in the operations accounts thatwere opened with the French Treasury. It is a further fact thatthose accounts are in surplus, thus draining off to France the Africanresources amassed by the local banks.

180 In Chile the new inscriptions on the Spanish peso in 1817were: "Liberty, Union and Strength" and "Independent Chile";in Argentina: "Union and Liberty" and "Provinces of Rio de laPlata". In Peru and Mexico the new emblem, arms or seal werestamped on the coins.

181 "Boliviano", "bolivar" and "sucre" were the new namesgiven to the Spanish peso in Bolivia, Venezuela and Ecuador,respectively.

which would be individualized for each of the threeAssociated States of Indochina but would circulate aslegal tender throughout those States.

(10) Paragraph 2 of the proposed article covers theproblems of monetary tokens "proper" to the territorytransferred.

This paragraph, like paragraph 1 of the article underdiscussion, may be regarded as simply a descriptiveprovision having nothing, strictly speaking, to do withState succession. Many dependent territories had theirown institution of issue and their own currency. Theprivilege of issue in the territory was exercised by aprivate bank, a government body of the metropolitaincountry or a public body of the territory. So far as assetsare concerned, the monetary tokens in circulation mayhave been a mixture of the issues of two or more institu-tions of the kinds mentioned above. Paragraph 2 of theproposed article simply makes it clear that whateverportion of those monetary tokens was owned by theterritory that is being transferred should normally revertto it, without there being any problem of State succession,or, if one prefers, should pass under the control of thesuccessor State.

(11) In the case of India, various agreements were conclu-ded between the United Kingdom and its two formerDominions and also between the two Dominions. Thefirst point to be noted is that India had an entirelyseparate monetary system before the colonial Powerwithdrew and the country was partitioned. The onlyproblem which would arise in the normal course ofevents was the apportionment of reserves and currencybetween India and Pakistan. As soon after 30 September1948 as practicable, the Reserve Bank of India was totransfer to Pakistan assets equal to the volume of moneyactually in circulation at that time in the latter State.Before that date, Indian rupee notes issued by the ReserveBank of India would still be legal tender in Pakistan.The apportionment of the cash balances of the ReserveBank of India, which amounted to about 400 croresof rupees, was determined by the agreements of December1947 between India and Pakistan 182 and by the Pakistan(Monetary System and Reserve Bank) Order, 1947.Pakistan received 75 crores of rupees and also obtainedpart of the Bank's sterling assets. The ratio of the notecirculation in Pakistan and in India to the total volumeof money in circulation had been taken into accountfor the purpose of this apportionment. Pakistan's actualshare came to 17.5 per cent.

(12) India succeeded to the sterling assets of the ReserveBank of India, estimated at £ 1,160 millions.183 However,these assets could not be utilized freely, but only progressive-ly. A sum of £65 m illion was credited to a free account andthe remainder—i.e., the greater part of the assets—wasplaced in a blocked account. Certain sums had to betransferred to the United Kingdom by India as working

182 See Keesing's Contemporary Archives, 1946-1948, vol. VI,24-31 January, p. 9066.

183 United Kingdom, Financial Agreement between the Govern-ment of the United Kingdom and the Government of India, Cmnd. 7195(London, H. M. Stationery Office, 14 August 1947).


balances and were credited to an account opened by theBank of England in the name of Pakistan. The conditionsgoverning the operation of that account were specifiedin 1948 and 1949 in various agreements concluded by theUnited Kingdom with India and Pakistan.184


1. Public funds, liquid or invested, which are proper tothe territory that has become independent shall remain theproperty of that territory, irrespective of where they aresituated.

2. Public funds of the predecessor State, liquid orinvested, which are situated in the territory that has becomeindependent shall pass into the patrimony of that territory.

3. The rights of the Treasury of the territory that hasbecome independent shall not be affected by the change ofsovereignty, vis-a-vis the predecessor State or otherwise.

4. The obligations of the Treasury of the territory thathas become independent shall be assumed by that territoryon such terms and in accordance with such rules as applyto succession to the public debt.

COMMENTARY

A. Public funds

1. Funds proper to the territory

(1) Paragraph 1 does not appear to raise any complicatedquestion, at least so far as the statement of the principleis concerned, although the actual application of theprinciple may indeed pose problems, especially when itcomes to a practical definition of "public funds which areproper to the territory".

(2) As a corporation under internal public law, the terri-tory will usually have had, prior to independence, asystem of public finances consisting of machinery, institu-tions and a Treasury distinct from those of the colonialPower. Public funds which accordingly belonged to theterritory prior to independence, being the product ofduties, taxes and fees of all kinds, debt-claims and thelike, connected with activities in the territory, can onlyremain among the financial assets of the territory onceit has become independent. Logically, their status cannotbe affected in any way by the fact of their being in theterritory itself or in the territory of the predecessor Stateor of any other third State, since it is well establishedthat they belonged to the territory that has becomeindependent.

2. State funds

(3) State funds which belong to the colonial Power butare in the territory should, whether liquid or invested,pass into the patrimony of the successor State pursuantto the general principle of the transfer of public propertyof the State.

(4) It appears, however, that the public funds of theBritish Mandatory Government in Palestine were with-drawn by the United Kingdom. Yet this example doesnot invalidate the general principle inasmuch as a Mandatewhich was conceived as an international public serviceassumed by a State on behalf of the international commu-nity, in no way deprives the Mandatory Power of theauthority to withdraw its own property when suchproperty is clearly separable and detachable from thatof the mandated country.

B. Treasury

(5) Treasury relations are very complicated. Reducedto simple terms, they comprise two aspects. In the firstplace, there is no reason why the rights of the Treasury ofthe territory that has become independent should,paradoxically, cease to exist simply because of theterritory's accession to independence. In the secondplace, the obligations, whether or not corresponding,previously incurred by the Treasury of the territory toprivate persons or to the predecessor State or any otherState are assumed, in the absence of special treatyprovisions, on such terms and in accordance with suchrules as apply to succession to the public debt. It does notseem possible to say more than this on the subject withoutrunning the risk of foundering on the technical complexityof these problems.

(6) On termination of the French Mandate, Syria andLebanon succeeded jointly to the "common interests"assets, including "common interests" Treasury funds andthe profits derived by the two States from various conces-sions. The two countries succeeded to the assets of theBanque de Syrie et du Liban. However, most of theseassets were blocked and were released only progressivelyover a period extending to 1958.185

(7) In the case of the advances which the United Kingdomhad made in the past towards Burma's budgetary deficits,the United Kingdom waived repayment of £15 millionand allowed Burma a period of 20 years to repay theremainder, free of interest, starting on 1 April 1952.The former colonial Power also waived repayment ofthe costs it had incurred for the civil administration ofBurma after 1945 during the period of reconstruction.186


1. Archives and public documents of every kind relatingdirectly or belonging to the territory that has become inde-pendent, and public libraries of that territory, shall,irrespective of where they are situated, be transferred tothe newly independent State.

184 For details, see I. Paenson, op. cit., passim and in particularpp. 65-66 and 84.

186 For Syria, see the Convention on Winding-up Operations,the Convention on Settlement of Debt-claims and the PaymentsAgreement, all three dated 7 February 1949 (France, Journalofficiel de la Republique frangaise, Lois et decrets, Paris, 10 March1950, 82nd year, No. 60, pp. 2697-2700); For Lebanon, see theFranco-Lebanese monetary and financial agreement of 24 January1948 (ibid., 14 and 15 March 1949, 81st year, No. 64, pp. 2651-2654;also in United Nations, Treaty Series, vol. 173, p. 99).

186 The United Kingdom also reimbursed Burma for the costof supplies to the British Army incurred by that territory duringthe 1942 campaign and for certain costs relating to demobilization.


2. The newly independent State shall not refuse to handover copies of such items to the predecessor State or to anythird State concerned, upon the request and at the expenseof the latter State, save where they affect the security orsovereignty of the newly independent State.

COMMENTARY

(1) The Special Rapporteur will not revert to the questionof the importance of archives 187 or to the definition of theitems affected by the transfer. These are archives andpublic documents of every kind,18S i.e. items irrespectiveof (a) their ownership (by the State, by an intermediateauthority, by a public body, etc.), (b) their type (diplo-matic, political, administrative, military, economic,judicial, historical, geographical, legislative, regulative,ecclesiastical, etc.), (c) their character (public or secretarchives), (d) their nature (manuscript or printed, graphicmaterial or photographs), (e) their substance (paper,parchment, fabric, leather, etc.), ( / ) their variety (plans,registers, scrolls, title-deeds, documents, etc.). It is alsoknown that the term "archives of every kind" coversitems which are instruments of evidence as well as thosewhich are instruments of administration.189

(2) Article 33 of the Agreement of 21 October 1954between France and India,190 concerning the FrenchEstablishments in India, states that

The French Government shall keep in their custody the recordshaving an historical interest, they shall leave in the hands of theIndian Government the records required for the administration ofthe territory.

Although this case of decolonization does not comewithin the scope of the present study on "newly inde-pendent States", the Special Rapporteur has thought fitto refer to it in order to draw attention to the fact thatthe rare example of this kind limiting the transfer ofarchives to a particular category of archives express thefreedom of States on the Treaty plane but in no wayreflect a rule or custom,191 inasmuch as nothing candispense the predecessor State from the obligation ofhanding over all archives which have a link with theterritory.

A. The archives-territory link

(3) Obviously, the successor State cannot claim simplyany archives but only those "belonging to the territory".192

The Special Rapporteur refers readers to a previouscommentary 193 for an elucidation of this expression.This fact of the archives belonging to the territory must

187 See Yearbook...1970, vol. II, p . 152, document A/CN.4/226,part two, paras. 1-6 of the commentary to article 7.

1 8 8 See above, para. 2 et seq., of the commentary to article 14.1 8 9 Ibid., para. 6 et seq., of the commentary.1 9 0 For reference, see note 115.1 9 1 See Yearbook...l970, vol. II , document A/CN.4/226, part two,

paras. 13-15 of the commentary to article 7.1 9 2 Article I, paragraph 2 (a) of General Assembly resolution 388

(V) entitled "Economic and financial provisions relating to Libya",stipulates that "the relevant archives and documents of an admin-istrative character or technical value concerning Libya or relatingto property* the transfer of which is provided for by the presentresolution" shall be transferred immediately.

1 9 3 See above, paras. 9-12 of the commentary to article 14.

be appraised from two standpoints. First, there arearchives acquired by or on behalf of the territory and,secondly, there are items concerning the territory becauseof the organic link wich attaches them to it.

B. Archives situated outside the territorythat has become independent

1. Archives which have been removed

(4) There seems to be ample justification for acceptingas a rule the fact that the successor State should receiveall the archives, historical or other, relating to theterritory affected by the change of sovereignty, even ifthose archives have been removed by the predecessorState. The application of such a principle would con-siderably help new States to acquire greater mastery oftheir internal and external problems. A better knowledgeof these problems can be gained only through the pos-session of retired or current archives, which should beleft with or returned to the States concerned. For obviousreasons, however, the former colonial Power cannot beexpected to agree to hand over all archives, especiallythose linked to its imperium over the territory concerned.Many considerations relating to politics and expediencyprevent such Powers from leaving to the new sovereignrevealing documents on colonial administration. Forthat reason, the principle of the transfer of such archives—which the former metropolitan country is careful toremove before independence—is rarely applied inpractice.

At this point a distinction must be drawn between thevarious categories of archives which the former metro-politan country is tempted to evacuate before the termin-ation of its sovereignty. A distinction should be madebetween (a) historical archives proper, which antedatethe beginning of colonization of the territory, (Jb) archivesof the colonial period, relating to the imperium anddominium of the metropolitan country and to its colonialpolicy generally in the territory, and (c) purely admin-istrative and technical archives relating to the currentadministration of the territory.

(5) The information collected by the Special Rapporteur,which although voluminous is not sufficiently completeto permit the formation of a definitive judgement, seemsto show that the problem of returning the archivesremoved by the former metropolitan country to the newindependent State has not yet been solved satisfactorily.It may even be said that, no matter how sound and well-founded the principle of the transfer of archives may be,it would be unreasonable to expect the immediate returnof all the archives referred to under {b) above. Indeed,in the interest of good relations between the predecessorState and the successor State, it may be unrealistic andundesirable for the new independent State to claim themand to start a dispute over them which is bound to bedifficult.

(6) However, in the case of the archives mentionedunder (a) above, which may have been removed by theformer metropolitan country, the principle of transfershould be firmly and immediately applied. These archives


antedate colonization, they are the product of the landand spring from its soil; they are bound up with the landwhere they came into existence and they contain itshistory and its cultural heritage.

(7) Similarly, the removal of administrative documentsof all kinds mentioned under (c) above, which may haveoccurred in some cases, is bound to be a source ofconsiderable inconvenience, confusion and maladmin-istration for the young independent State, which alreadyfaces considerable difficulties owing to its inexperienceand lack of trained personnel. Except in the rare caseswhere independence resulted from a sharp and suddenrupture of the links between the metropolitan countryand the territory, which, compounded by misunder-standings or rancour, led to the malicious destruction orremoval of administrative documents, the removal ofthese archives, which are instruments of administration,has reflected primarily the metropolitan country's desireto retain documents and titles which might concern theminority composed of its own nationals. However,reproduction techniques are now so highly developed thatit would be unreasonable and unjustified to retain suchadministrative or technical archives, as this would entaildepriving a majority in order to meet the needs of aminority, which could, moreover, be satisfied in anotherway.

(8) Generally speaking, it is to be hoped that the for-mulation of the rule of transfer will lead to better relationsbetween States and open the way for appropriate co-operation in the field of archives. This would enable thenew sovereignty to recover the items which express itshistory, its traditions, its heritage and its national geniusand provide it with a means of improving the daily lifeof its inhabitants, and would also enable the formersovereignty to ease its own difficulties, intangible andmaterial, which inevitably accompany its withdrawalfrom the territory.

(9) Professor Rousseau, discussing a case of decoloniz-ation, writes:

The problem is posed at present in the relations between Franceand Cambodia, but so far no final settlement seems to have beenreached. The logical solution would be the return of all itemsconcerning the history of Cambodia during the period in whichFrance assumed international responsibility for its affairs (1863-1953).194

In the case of Algeria, historical archives concerningthe pre-colonial period, which had been carefully cata-logued by the colonial administration, were removed bythe latter immediately before independence.195 Thenegotiations between the two Governments have so farresulted in the return of some of the documents from theTurkish collection and microfilms of part of the Spanishcollection.156

2. Archives established outside the territory

(10) The Special Rapporteur has not found any specificinformation concerning this field and this type of suc-cession. However, the problem of the ownership of theIndia Office library furnishes an example of an "un-resolved" case. It will be recalled that in 1801 the BritishEast India Company established a library which nowcontains about 280,000 volumes and some 20,000 un-published manuscripts, constituting the finest treasury ofHinduism in the world. In 1858 this library was trans-ferred to the India Office in Whitehall. After the partitionin 1948, the Commonwealth Relations Office assumedresponsibility for the library. On 16 May 1955 the twosuccessor States, India and Pakistan, asked the UnitedKingdom Government to allow them to divide thelibrary on the basis of the percentages (82.5 per cent forIndia, 17.5 per cent for Pakistan) used in 1947 for decidingall assets between the two Dominions.

The problem would assuredly be quite difficult to solve,since the Government of India Act of 1935 allocated thecontents of the Library to the Crown. Since the Common-wealth Relations Office could not find a solution, thecase was referred in June 1961 to arbitration by threeCommonwealth jurists, who were members of theJudicial Committee of the Privy Council.

C. Special obligationsof the newly independent State

(11) The draft article puts the successor State under anessential obligation which is the natural counterpart ofthe obligation of the predecessor State to transfer allarchives to the successor. Decolonization has sometimesbeen accompanied by repatriation to the former metro-politan country of populations which cannot be governedwithout archives. For that reason paragraph 2 of thearticle provides that the successor State shall not refuseto hand over to the predecessor State, upon its request,copies of any archives which it may need.

In some cases, the newly independent State has handedover copies or microfilms not only of administrativearchives but also of historical documents and papers.197

Article 19. Property situated outsidethe territory of the newly independent State

1. Public property proper to the territory that has becomeindependent which is situated outside that territory shallremain its property upon its accession to independence.

2. Public property belonging to the predecessor Statewhich is situated in a third State shall be apportionedbetween the predecessor State and the newly independentState proportionately to the latter's contribution to thecreation of such property.

194 Ch. Rousseau, op. cit., p. 136.193 These archives are commonly known as the Arab collection,

the Turkish collection and the Spanish collection.188 Exchange of notes between Algeria and France, which took

place at Algiers on 23 December 1966.

197 After France had restored to Algeria certain items from the"Turkish collection", which forms part of the historical archivesremoved immediately before independence (see para. 9 and note 195above), Algeria offered France microfilms of some documentsfrom that collection following their return. It had previously allowedall the registers of births, marriages and deaths held by Algerianrecord offices to be microfilmed.


COMMENTARY

A. Property proper to the territorythat has become independent

(1) The territory acceding to independence may leave,particularly in the former metropolitan country, propertybought with its own funds. It may also own propertyin other countries. State succession cannot have theparadoxical effect of conferring on the predecessor Statea right of ownership which it did not possess over suchproperty prior to the territory's independence. The factthat the property in question is situated outside the newlyindependent territory cannot, on its own, constitutegrounds for making an exception to that obvious principle.Ownership of such property cannot depend on geo-graphical location.

(2) However, unlike the case of the partial transfer of aterritory from one State to another pre-existing State,which was examined above, in the case of decolonizationthe transferred territory and the territory of the successorState are geographically coextensive, so that the propertyof one is also the property of the other. In this type ofsuccession, the successor State itself enjoys the owner-ship of this property and does not simply receive theproperty into the new juridical order it has created.

(3) The usual distinction should be drawn betweenproperty of the territory which is situated in the formermetropolitan country and property which is situated inthe territory of a third State.

1. Property which is situated in the former metropolitancountry

(4) The occurrence of State succession does not transferthe right of ownership of public property of this kind andthe successor State—in other words, the formerlydependent territory—retains ownership of such property.

Diplomatic practice, however, is not consistent andthe Special Rapporteur found it difficult to characterize.While the principle of the transfer of such property to thenewly independent State is not called in question, it oftenproves difficult to put into practice because the formermetropolitan country disputes not the principle but thefact of the right of ownership, because the territory whichhas seceded finds it difficult to know exactly how muchproperty, and of what kind, it could rightfully claim, orbecause of other political or non-political considerations.For example, various colonial offices of an administrativeor industrial and commercial nature, rest and recreationfacilities for officials of the colonial territory and theirfamilies, administrative premises or residences may havebeen constructed or purchased in the metropolitancountry by the detached territory, using its own funds orthose of public agencies under its jurisdiction (e.g.,family allowance or social security funds).

(5) The former colony of the Congo had in its patrimonya portfolio of Belgian shares situated in Belgium whichin 1959, according to Professor D. P. O'Connell, were

valued at $750 million. The independent Congo does notappear to have recovered all these shares.198

On the eve of independence, during the Belgian-Congolese Conference at Brussels in May 1960, theCongolese negotiators had requested that the liquidassets, securities and property rights of the SpecialCommittee for Katanga and of the Union miniere shouldbe divided in proportion to the assets of the Congo andits provinces, on the one hand, and of private interests,on the other hand, so that the new State could succeedto the sizable portfolio of stocks and shares situatedoutside its territory. Numerous complications ensued,in the course of which the Belgian Government, withoutthe knowledge of the prospective Congolese Government,pronounced the premature dissolution of the SpecialCommittee for Katanga so that its assets could be sharedout and the capital of the Union miniere could be reap-portioned. This was all designed to ensure that the Congono longer had a majority holding in these entities.199

This first dissolution of the Special Committee, whichwas the principal shareholder in the Union and in whichthe State held a two thirds majority while the rest belongedto the Compagnie du Katanga, was decided on 24 June1960 under an agreement signed by the representativesof the Belgian Congo and of the Compagnie du Ka-tanga.200 The agreement was approved by Decree ofthe King of the Belgians on 27 June I960.201

As a reaction against this first dissolution by the Belgianauthorities, the constitutional authorities of the inde-pendent Congo pronounced a second dissolution of theSpecial Committee by Decree of 29 November 1964.

(6) Eventually, the Belgian-Congolese agreements of6 February 1965 202 put an end to these unilateral measuresby both parties. These agreements are partly concernedwith the assets situated in Belgium—in other words,public property situated outside the territory involvedin the change of sovereignty. In exchange for the cessionto the Congo of the net assets administered by the SpecialCommittee in that territory, the Congolese party recogni-zed the devolution to the Compagnie du Katanga ofthe net assets situated in Belgium. Various compensationsand mutual retrocessions took place in order to unravelthe tangled skein of respective rights. On 8 February 1965,in an official ceremony at Brussels, Mr. Tshombe" acceptedthe first part of the portfolio of the Congo on behalf ofhis Government.

This was not, however, the end of the affair. AfterGeneral Mobutu had taken office, and after variousupheavals, the Union miniere du Haut-Katanga wasnationalized on 23 December 1966 because it had refusedto transfer its headquarters from Brussels to Kinshasa,believing that the transfer would have the effect of placingunder Congolese jurisdiction all the assets of the company

1 9 8 D . P. O'Connell, State Succession (op. cit.), vol. I, p . 228.1 9 9 For an account of all these problems, see R. Kovar, "La

'congolisation' de l 'Union minifere du Haut-Katanga", Annuairefrancais de droit international, 1967 (Paris) vol. XIII , pp. 742-781.

2 0 0 Moniteur congolais, 19 September 1960, No . 38, p . 2053.2 0 1 Ibid.202 United Nations, Treaty Series, vol. 540, p . 227.


situated outside the Congo. A compromise was finallyreached on 15 February 1967.

(7) On the occasion of the disannexation of Ethiopia,203

articles 37 and 75 of the Treaty of Peace of 10 February1947 204 required Italy to restore objects of historicalvalue to Ethiopia, and the Agreement of 5 March 1956 205

between the two countries contained various annexeslisting the objects concerned. Annex C allowed the returnto Ethiopia of the large Aksum obelisk, which Italywas obliged to dismount and remove from a square inRome and transport to Naples at its expense for shipmentto Ethiopia.

(8) Some treaty provisions are restrictive, authorizingsuccession to public property only if it is situated in theterritory, and not if it is located elsewhere.

This was so, for example, in the case of the resolutionsof the United Nations General Assembly on economicand financial provisions relating to Libya and Eritrea.806

In fact, however, such provisions do not conflict withthe suggested rule, because they cover a different situationfrom the one with which we are concerned here. Theyinvolve public property of the ceding State—for example,the property of Italy in Libya or in Eritrea—whereaswhat is under discussion here is the exact opposite,namely, property of (formerly Italian) Libya or Eritreathemselves which is outside their geographical boundaries.

(9) There now remains to be discussed the case ofproperty of the newly independent territory itself whichis in a third State.

2. Property which is situated in a third State

(10) The case in itself does not give rise to any specificproblems. The territory that has become independentretains full ownership over public property it possessesin a third country (for example, buildings or premisessituated in a neighbouring country or territory or, morefrequently, the continuation of a railway line). Sometimesthe problems are stated partly in terms of successionof governments. The case of Algerian funds depositedin Switzerland during the liberation war is a good exampleof this.

(11) From 1954 to 1962, the Algerian National Libera-tion Front (NLF) had collected funds to cover the costof the armed struggle in Algeria. On 19 September 1958,a Provisional Government of the Algerian Republic(GPRA) was established at Cairo; it was recognizedde facto or dejure by some 30 countries.207 The NationalLiberation Front, which was the only liberation partyduring the war and also the only governing party after

203 The Special Rapporteur realizes that the case should notreally be considered under "Newly independent States". (Seeabove, the second paragraph of note 96.)

201 For reference, see note 148 above.205 United Nations, Treaty Series, vol. 267, p. 189.208 United Nations General Assembly resolutions 338 (V) of

15 December 1950 and 530 (VI) of 29 January 1952.207 See M. Bedjaoui, La rivolution algerienne et le droit (Brussels,

International Association of Democratic Lawyers, 1961), p. 91and passim.

independence, stated in its statutes, adopted in 1959,that its resources did not belong to it as a movementbut were "national property" in law and in fact (article 39,paragraph 2). At the end of the war, the unexpendedbalance of the funds intended for use in the struggleamounted to some 80 million Swiss francs; these fundswere in various bank accounts in the Middle East in thename of the GPRA and in Europe in the name of theNLF. In 1962, all these funds were deposited togetherin a Swiss bank, in the name of Mr. Mohammed Khider,General Secretary of the NLF, acting in his officialcapacity.

Political differences arose between the Algeriangovernmental authorities and Mr. Khider, who wasremoved from office as General Secretary of the singleparty in power but refused to hand over the remainingfunds which were in his possession at Geneva.

(12) To this day, various civil as well as criminal proceed-ings, including sequestration of the bank account, havestill not enabled the Algerian State and the NLF torecover these sums. The problem was not really dealtwith from the standpoint of succession of States orGovernments; it involved criminal matters, because thebank with which the funds were deposited had impro-perly allowed Mr. Khider to withdraw them quickly,although he had just been dismissed from office and nolonger had authority to administer the funds. Consequen-tly, the funds were fraudulently transferred to a destinationand for a purpose still unknown to this day.

If this case is considered, from the civil viewpoint,as a problem of succession of governments, it has obvioussimilarities with the case of the Irish funds consideredlater.208 The Algerian liberation movement and itsProvisional Government of the day left property to whichindependent Algeria should normally succeed throughits single ruling party and its new Government. Fromthe outset, this property had the status of "nationalproperty", according to the statues of the NLF.

(13) On 16 July 1964, the Algerian authorities, represen-ted by the leader of the NLF and the Head of the Govern-ment, brought a suit before the Swiss courts, which,however, were induced by the defence to evaluate thelegitimacy of the NLF, although they were judicial bodiesand, moreover, foreign ones. This was because the defend-ant had stated that he would hand over the funds onlyto the "legitimate" NLF. Which NLF ? According to thedefendant, the one that would emerge from a newnational Congress of the party. A Congress had in factbeen held, but the defendant had not considered it"legitimate". There is no doubt that, from the strictlyjuridical point of view, this notion of legitimacy shouldhave been ruled out of the proceedings. The funds had,from the outset, been "Algerian national property",and upon the attainment of independence should certainlyhave been returned to the Algerian public authorities,the party and the Government.

It is all the more necessary to bring this case—whichhas its own special characteristics, although in somerespects it resembles the case of the Irish funds—to a

See below, paras. 1 and 2 of the commentary to article 31.


logical conclusion because Mr. Khider died at Madridon 4 January 1967, and if the funds are not assigned tothe Algerian authorities, to whom they belong, they maybecome "ownerless property".

B. Property belonging to the predecessor Statewhich is situated in a third State

(14) In the draft article under consideration, the SpecialRapporteur had suggested a paragraph 2 whereby prop-erty which is situated in a third country and to thecreation of which the formely dependent territorycontributed would be apportioned between the predeces-sor State and the successor State.

(15) One writer notes that "countries coming into exist-ence through decolonization do not seem to have claimedany part of the subscriptions of the States which wereresponsible for their international relations" 20!) including,in particular, their representation in international orregional financial institutions. But the fact that thesenewly independent countries—and particularly thosewhich were deemed in law to form an integral part of thecolonial Power—did not think of claiming some of theseassets, or were unable to do so, cannot logically be usedto cast any doubt on the validity of the principle that hasbeen enunciated in paragraph 2 of the draft article underconsideration.

(16) This seems to be confirmed by the fact that participa-tion in various intergovernmental bodies of a technicalnature is open to dependent territories and that problemsof the type described above may arise in this area. Nodoubt such questions will be examined by the Commissionwhen it undertakes the study of succession of Statesand international organizations.

SECTION 3. UNITING OF STATESAND DISSOLUTION OF UNIONS


1. The privilege of issue shall belong to the successorState throughout the territory of the union or of eachState in the event of dissolution of the union.

2. In the event of dissolution of the union, the assets ofthe joint institution of issue shall be shared pro partebetween the successor States, which in consideration ofthe foregoing shall assume responsibility for the obligationsrelating to the substitution of new currencies for the formercurrency.

COMMENTARY

The possession and exercise of the privilege of issueare generally regulated in the instruments establishingthe union of States. The privilege of issue is granted to thesuccessor State, that is to say the union. In the event ofdissolution of the union, each State possesses its privi-lege of issue, but the practical aspects of resolving the

problems are extremely complex. The peace treaties ofSaint-Germain-en-Laye and Trianon which sanctionedthe dismemberment of the Austro-Hungarian monarchyhad to take account of the wish of the successor States toexercise their privilege of issue, and to cease acceptingthe Austro-Hungarian paper money that the Bank of theAustro-Hungarian Empire had continued to issue for ashort period. This bank was liquidated, and for themost part the successor States overstamped the old papermoney during an initial period as outward evidence oftheir power to issue currency.210


1. The union shall receive as its patrimony the publicfunds and Treasuries of each of its constituent States exceptwhere the degree of their integration in the union or treatyprovisions allows each State to retain all or part of suchproperty.

2. In the event of dissolution of the union, the publicfunds and Treasury of the union shall be apportionedequitably between its constituent States.

COMMENTARY

(1) Generally both international treaty instruments andinstruments of internal law (such as a referendum)define and effect the uniting of States, stating the degreeof integration. It is on the basis of these various expressionsof will that the financial system of the union, and inparticular the treatment of the public funds and Treasuriesof each predecessor State, is established.

Since no precise information on this point is providedin unification agreements that have been concluded, theSpecial Rapporteur felt he should suggest in paragraph 1of the article under consideration a simple and logicalrule for complete succession of the union to its constituentStates.

(2) Paragraph 2 of the article, dealing with cases ofdissolution of the union, simply states a rule of equitableapportionment of the joint public funds and Treasurybetween the successor States.

208 L. Focsaneanu, "Les banques Internationales intergouverne-mentales", Annuaire francais de droit international, 1963 (Paris),vol. IX, p. 133.

210 For the details, somewhat complicated, of the measurestaken in respect of currency, see the two long articles 189 of theTreaty of Trianon and 206 of the Treaty of Saint-Germain-en-Layein British and Foreign State Papers, 1920, vol. 113 (op. cit.),pp. 561-564 and ibid., 1919, vol. 112 (op. cit.), pp. 410-412.Article 206 of the Treaty of Saint-Germain and article 189 of theTreaty of Trianon resolved the problem as follows: (a) "Each oneof the States to which territory of the former Austro-Hungarianmonarchy is transferred and each one of the States arising fromthe dismemberment of that monarchy, including Austria andHungary" were given two months to ovetstamp the currency notesissued in their respective territories by the former Austro-Hungarianinstitution, (b) The same States were given 12 months to replacethe overstamped notes with their own currency or with a newcurrency under conditions to be determined by them, (c) Thesesame States were either to overstamp the currency notes whichthey had already withdrawn from circulation or to hold them atthe disposal of the Reparation Commission. These very longarticles contain other provisions and set up a very complex systemfor liquidating the Austro-Hungarian Bank. (See Mones del Pujol,"La solution d'un grand probleme monetaire; la liquidation dela Banque d'emission de l'ancienne monarchie austro-hongroise",Revue des sciences politiques (Paris), vol. XLVI, April-June 1923,pp. 161-195.)


International practice has sanctioned this formula ofliquidation in accordance with the principles of equity.The Special Rapporteur has accordingly not deemed itnecessary to complicate the text of the article with apainstaking description of the criteria of equity in aquestion which is extremely technical and which he isfar from being competent to judge. While he believesthat the principle of equity should and must be fullyapplied, he also believes that any apportionment, if it isto be equitable, must take into account a great manyfactual data which vary from country to country andsituation to situation and which defy codification. Inother words, equity means everything and means nothing,and it is as well to leave its exact content to be spelledout in individual agreements.

(3) The dissolution of the short-lived Federation of Maliwas regulated, so far as public funds and debt-claimsare concerned, by a Senegalese-Malian Resolution No. 11,which allowed each State to take over assets accordingto their geographical location. The proportion in whichmovable assets were divided between the two Stateswas set (as in the case of immovable assets) at 62 per centfor Senegal and 38 per cent for Mali. The State whichreceived a larger portion of assets than was due to itwas subject to an equalization payment, charged againstits share in the Reserve Fund.211


1. Except where otherwise specified in treaty provisionsaimed at the establishment of a collection of commoncentral archives, archives and public documents of everykind belonging to a State which unites with one or moreother States and its public libraries, shall remain itsproperty.

2. In the event of dissolution, the central archives of theunion and its libraries shall be placed in the charge of thesuccessor State to which they relate most closely orapportioned between the successor States in accordancewith any other criteria of equity.

COMMENTARY

(1) The Special Rapporteur will not revert to the import-ance or to the definition of archives and public docu-ments.212 It will merely be recalled that "archives"should be understood in the broadest sense of the term,as it is used in diplomatic instruments relating to suchcases of dissolution of unions, and accordingly covering"archives, registers, plans, title-deeds and documents ofevery kind".213

(2) Article 22 is at the same time similar to and differentfrom the preceding article. As in article 21, treaty stipu-

211 See J.-Cl. Gaut ron , "Sur quelques aspects de la successiond'Etats au Senegal", Annuaire francais de droit international, 1962(Paris), vol. VIII, 1963, p. 861.

212 See above, commentary to article 14.213 Treaty of Saint-Germain-en-Laye, article 93, on Austria

{British and Foreign State Papers, 1919, vol. 112 (op. cit.), p . 361)and Treaty of Trianon, article 77 on Hungary (ibid., 1920, vol. 113(op. cit.), p. 518).

lations are allowed to regulate the fate of the archives ofStates in a union. On the other hand, where there are notreaty provisions the suggested article 22 allows thepredecessor State to dispose of its archives, whereasarticle 21 allowed the union, namely the successor State,freely to dispose of public funds and treasuries.

(3) This distinction obviously had to be made. If thearchives of the predecessor State are historical in charac-ter, they are of interest to it alone and of relatively littleconcern to the union (unless it is decided by treaty forreasons of prestige or other reasons to transfer them tothe seat of the union or to declare them to be its property).Any change of status or application, particularly atransfer to the union of other categories of archives neededfor the direct administration of each State, would be notonly unnecessary for the union but highly prejudicial forthe administration of the States forming it.

It is a different matter for public funds and treasuries,the transfer of which to the union must be presumed,unless there are treaty provisions to the contrary, sincethere is no question that they must be the subject and thenecessary instruments of a unified policy within theunion.

(4) Paragraph 2 of the article refers to the case of dis-solution. Each of the successor States receives the archivesand public documents of every kind belonging or ratherrelating to its territory, on condition that it hands overcopies of them to the other successor States, upon therequest and at the expense of the latter. The centralarchives of the union are apportioned between the suc-cessors if they are divisible or placed in the charge of thesuccessor State they concern most directly if they areindivisible, on condition that in both cases the beneficiarywill make or authorize copies for the other States upontheir request and at their expense.

(5) In general, it is the link between the archives and theterritory which is the determining factor.

For example, following the dissolution in 1944 of theUnion between Denmark and Iceland, the High Court ofJustice of Denmark ruled, in a decision of 17 November1966,a14 that some 1,600 priceless parchments andmanuscripts containing old Icelandic legends should berestored to Iceland. It should be noted that these parch-ments were not public archives, since they did not reallyconcern the history of the Icelandic public authoritiesand administration, and were not the property of Icelandsince they had been put into a collection constituted inDenmark by an Icelander who was Professor of Historyat the University of Copenhagen. He had saved them fromdestruction in Iceland, where they were said to have beenused on occasion to block up holes in the doors andwindows in the houses of Icelandic fishermen. Theseparchments, whose value has been estimated by expertsat 600 million Swiss francs, had been bequeathed inperpetuity by their owner to a university foundation inDenmark.

214 Revue generate de droit international public (Paris), 3rd series,vol. XXXVIII, No. 2 (April-June 1967), p. 401.


(6) The Special Rapporteur is obliged to his colleague inthe International Law Commission, Professor Tammes,for providing information concerning these archives.

Among the 1,600 fragments and sheets which constitutethe so-called Magnusson collection was a two-volumemanuscript (the Flatey Book) written in the fourteenthcentury by two monks on the Island of Flatey, an integralpart of Iceland, which traces the history of the kingdomsof Norway.

The agreement reached ended a long and bitter contro-versy between the Danes and the Icelanders, who bothfelt strongly about this collection which is of the greatestcultural and historical value to them. On 21 April 1971the Danish authorities returned the Flatey Book andother documents; over the next 25 years the entirecollection of documents will join the collection ofIcelandic manuscripts at the Reykjavik Institute.

At the time of the official handing-over ceremony,when the first documents left the Royal Library atCopenhagen, the Library flew the flag at half-mast.215

Article 23. Property situated outside theterritory of the union

1. Property situated outside the territory of the unionand belonging to the constituent States shall, unless other-wise stipulated by treaty, become the property of the union.

2. Property of the union situated outside its territoryshall, in the event of dissolution, be apportioned equitablybetween the successor States.

COMMENTARY

(1) The Special Rapporteur admits that he had consider-able doubts about suggesting in paragraph 1 of article 23a rule assigning all property of the constituent States tothe union, when such property is situated abroad. Perhapsthe general structure of the draft articles as a wholewould suggest that a rule to the contrary should beinserted here, allowing the constituent States to retainownership of their property situated abroad. The SpecialRapporteur leaves the question open for discussion.

(2) The rule set out in paragraph 2 of this article seemssounder. In the event of a dissolution, the property ownedby the union abroad can only be shared "equitably"among the successor States. There again, the SpecialRapporteur has not tried to seek rigid criteria governingequitable apportionment, since questions of that kind arebound to be conditioned by circumstances.

(3) A marginal case will be mentioned here purely as areminder. It is difficult to place in the typology of suc-cession and, moreover, it concerns an unsuccessfulattempt to dissolve a union. This is the McRae case,which arose in connexion with the American War ofSecession.

After the failure of the secession of the Southern statesof the United States, the Federal Government claimed

from a Southern agent who had settled in England fundswhich he had deposited there on the instructions of thesecessionist authorities. The agent in question refused tohand over these funds to the Federal Government,arguing that he himself had various claims against theerstwhile Southern government.

(4) The judgement rendered by the Court of Equity ofEngland in 1869 recalled the principle that the property ofan insurrectionary government must, if that governmentis defeated, revert to the legal government as the successor.Since, however, the successor State could not have morerights than the entity in which the rights were formallyvested, the counter-claim of the agent McRae must beallowed and the amount of his claims, if they were justified,must be deducted from the funds claimed.

The judgement of the Court therefore confirmed theprinciple of the transfer to the successor State of publicproperty situated abroad; it stated that it is:

the clear public universal law that any government which de factosucceeds to any other government, whether by revolution orrestoration, conquest or reconquest, succeeds to all the publicproperty ... and to all rights in respect of the public property ofthe displaced powerj-.216

(5) According to some writers, this is a case of successionof States and not of succession of governments, since theSouthern Confederate Government, which represented anumber of states, had been recognized, at least as abelligerent, by various foreign States because it hadexercised an effective administration for a lengthy periodof time over a clearly defined territory.

SECTION 4. DISAPPEARANCE OF A STATETHROUGH PARTITION OR ABSORPTION


1. The privilege of issue shall belong to the successorState in the territory absorbed or the portion of territoryallocated to it in the partition.

2. The successor State or States shall take over theassets of the institution of issue and shall assume its liab-ilities in proportion to the volume of currency in circulationor held in the territory in question.

COMMENTARY

(1) The observations formulated in the precedingarticles 21'7 regarding the fate of the privilege of issue,which is an attribute of sovereignty, are obviously alsovalid in cases where a State ceases to exist as a result ofpartition or absorption, with the slight difference, due tothe radical nature of the situation concerned, that theprivilege of issue can naturally in any event be exercisedonly by the successor State by reason of the completedisappearance of the predecessor State.

215 A . E. Pederson "Scandinavian sagas sail back to Iceland",International Herald Tribune, 23 April 1971, p . 16.

216 D . P . O'Connell, State Succession... (op. cit.), p. 208.217 See above, paras. 5-7 of the commentary to article 12;

paras. 1 and 3 of the commentary to article 16; and the commentaryto article 20.


(2) At the time of the Anschluss of Austria, Nazi Germanycaused the National Bank of Austria to be absorbedentirely by the Reichsbank. It did likewise in the case ofthe invasion of the Sudetenland and the disappearance ofCzechoslovakia. It had originally been agreed betweenPrague and Berlin that the Bank of Czechoslovakia wouldhand over to Germany about one sixth of its bullionreserve—390 million crowns, or just over 12 tons of gold.However, the German invasion and the dismembermentof Czechoslovakia upset these original arrangements,although the German armies did not find in Prague allthe gold coveted by Berlin. However, those were cases offorced and unlawful territorial transfers.


1. The successor State shall receive the public funds andthe Treasury belonging to the absorbed State in theirentirety, irrespective of where the assets in question aresituated. It shall assume responsibility for the obligationsrelating thereto in so far as the rules applying to successionto the public debt permit.

2. In the event of partition of a State among two or morepre-existing States, each of them shall succeed to a portion,which shall be determined by treaty, of the public fundsand the Treasury.

COMMENTARY

(1) Paragraph 1 of article 25 is perfectly logical. Sincethe absorbed State no longer exists, its public funds andTreasury in their entirety can only pass to the State whichbenefited from its extinction. After the Anschluss of1938—to take an example of forced disappearance of aState—all Austria's assets, of whatever kind, passed tothe Third Reich.

Furthermore, the paragraph could only refer to therules concerning succession in respect of the public debtfor guidance on problems connected with obligationsinvolved in succession to public funds and the Treasury.

(2) In the event that the predecessor State is totally dis-membered, with each of its parts being joined to variouspre-existing States, the rule suggested in paragraph 2 ofthis article very prudently refers to agreements concludedamong the successor States involved in the partition.All that can be said is that each State succeeds to aportion of the public funds and Treasury of the formerState.


1. Ownership of archives and public documents of everykind, and public libraries, belonging to the absorbed Stateshall be transferred to the successor State, irrespective ofwhere such property is situated.

2. Archives and public documents of every kind, andpublic libraries, belonging to the State partitioned amongtwo or more others shall be apportioned between thesuccessor States with particular regard to the link existingbetween such property and the territory transferred to eachState.

COMMENTARY

(1) Paragraph 1 of article 26, states a simple rule. Theextinction of the absorbed State leaves the successorState full freedom to increase its patrimony by theaddition of all public property, including archives anddocuments, irrespective of where such property issituated. In annexing Ethiopia in 1936, or Albania in1939, Italy had succeeded to all the public property ofthese two countries.

(2) The problem of time-limits for handing over archivesdoes not arise in the same way as in other types of suc-cession; since the predecessor State no longer exists, itremains only for the successor State to take possession ofthe archives, except for those which are situated in a thirdState. Similarly, the question of the non-compensatorynature of the transfer is no longer relevant because of thedisappearance of the predecessor State.

(3) Draft article 26, paragraph 2, covers the case of aState's extinction because of its partition among two ormore others. In that event, the archives must normally beapportioned with due regard to the link existing betweenthem and the part of territory received by each State.Paragraph 2 is conceived in the same spirit as its counter-parts in the two preceding articles.

Article 27. Property situated outsidethe absorbed or partitioned territory

1. Subject to the application of the rules relating torecognition, ownership of all public property of the Statethat has disappeared which is situated outside its territoryshall devolve to the successor State.

2. In the event of total dismemberment of a State infavour of two or more other pre-existing States, propertysituated outside the State that has disappeared shall beshared equitably among the successor States.

COMMENTARY

(1) Writers take the view that the absorbed or partitionedState no longer has the legal capacity to own propertyand that its property abroad would become ownerless ifit were not transferred to the successor State. Conse-quently, some writers feel that there would be no reasonfor refusing to assign such property to the successorState.

(2) This reasoning is not wholly satisfactory. Abandon-ment of the property is not the reason for the right tosucceed; at the most, it is the occasion for it. After all,ownerless property may be appropriated by anyone, andnot necessarily by the successor. Indeed, if abandonmentwere the only consideration, it might seem more natural,or at least more expedient, to assign the property to thethird State in whose territory it is situated.

In fact, State succession sets off a process of transfersof rights which must definitely be effected in favour of thesuccessor State, and not at all in favour of the predecessorState or the third State.


(3) Judicial decisions sometimes seem not to have followedthe rule of devolution to the successor State of all thepatrimony of the State that has disappeared, because aproblem of recognition arose.

The foreign State in whose territory the propertyclaimed by the successor State is situated usually allowsthe claim only if it has recognized the successor Statedejure. This can be seen from a judgement of the Court ofAppeal of England 21S After the annexation of Ethiopiaby Italy in 1936, Emperor Haile Selassie claimed from acable and wireless company sums which it owed to him.The company pleaded in defence that the debt owed tothe Emperor in his sovereign capacity had passed intothe patrimony of the Italian State which had succeededthe sovereign, who had been divested of all publicproperty.

(4) In the Chancery Division, where the case had beentried, the main issue had been the effect of the UnitedKingdom's de facto recognition, on 21 December 1936,of Italy's annexation of Ethiopia, of which the Emperorwas still recognized by the United Kingdom to be thede jure sovereign. The trial court had ruled, in a decisionof 27 July 1938, that the de facto recognition of the an-nexation was not sufficient to effect the transfer to Italyof the property situated in England, and the case wastaken to the Court of Appeal. However, on 16 November1938, before the appeal was considered on its merits, theUnited Kingdom finally recognized the King of Italy asthe de jure Emperor of Ethiopia. The Court of Appealruled, in its judgements of 6 December 1938, that theright to sue had itself become vested in the successorState since the de facto recognition of 21 December 1936and that the title to the property situated in England hadaccordingly passed to the new sovereign. The principleof succession to public property situated abroad was thussanctioned even in the case of de facto recognition.

(5) Emperor Haile Selassie was equally unsuccessful inthe French courts on another occasion. In his sovereigncapacity, he was the holder of 8,000 shares of the Franco-Ethiopian Djibouti-Addis Ababa Railway Company,registered in the name of the Ethiopian Government; hewanted to convert the shares into bearer securities and tocash the coupons which had matured. The Italian Govern-ment lodged an objection with the Company's headoffice in Paris, requesting that the Emperor should beprohibited from selling, transferring or ceding thesecurities, which it claimed should revert to the successorState. The juge des referes of the Tribunal de la Seine, towhom the displaced sovereign applied for an order barringthe objection of the Italian Government, declared thathe had no jurisdiction in the case of an act of sovereigntyby Italy.219 The practical effect of this decision was toleave the Italian Government in ownership of the securi-

218 Cour t of Appeal of England, judgement of 6 December 1938,Emperor Haile Selassie v. Cable and Wireless, Ltd. (H. Lauterpacht ,Annual Digest and Reports of Public International Law Cases,1938-1940 (London, But terworth, 1942), case N o . 37, pp . 94-101).

219 O n e of the reasons given in the decision was :"The Juge des referes cannot pass judgement on the validity

of the objections without resolving, at least implicitly, the disputeregarding the ownership of the securities, which is an extremelyweighty mat te r involving principles of public international law

ties, which reverted to it despite an appeal by the EmperorHaile Selassie. The original decision was confirmed onappeal 22° and, although the ruling again dealt solelywith the question of jurisdiction, the result was to leavethe successor State the ownership of public property ofthe predecessor State situated abroad. Thus, the twodecisions had the indirect effect of sanctioning theprinciple of the transfer of public property.

(6) However, in all these situations of total dismember-ment, absorption, incorporation and partition, the mainproblem—over and above questions of recognition—undoubtedly remains that of situations not in conformity"with international law and, in particular, the principles ofinternational law embodied in the Charter of the UnitedNations".221

(7) The position taken by certain Powers in the case of theannexation of Ethiopia may be compared to that takenby them in the matter of the incorporation of the BalticStates in the USSR.222 That incorporation was notrecognized by some countries, including the UnitedKingdom and the United States, which refused to acceptthe Soviet Socialist Republics as the successors to thoseStates in the case of property situated abroad. TheWestern countries which did not recognize the incor-poration continued for a number of years to accept thecredentials of the former representatives of those States,whom they recognized as possessing the right of owner-ship, or at least of management, over property situatedoutside the frontiers of the Baltic Republics. For a longtime, premises of legations and consulates, and Balticships, 2a3 were not recognized as being the property ofthe successors. The situation was normalized later.

Professor Guggenheim reports the decision of theSwiss Federal Council of 15 November 1946 224

and of private law that are manifestly outside his jurisdiction"(Tribunal civil de la Seine, ordonnance de refere of the Presidentof the Tribunal , dated 2 November 1937, Gazette du Palais16 December 1937; commentary in Ch . Rousseau, "Le conflititalo-ethiopien, Revue generate de droit international public (Paris),3rd series, vol. XI I , N o . 1 (Jan.-Feb. 1938), pp. 98-99; andibid., 3rd series, vol. XII I , N o . 4 (July-Aug. 1939), pp . 445-447).230 Appeals Cour t of Paris, Haile Selassie v. Italian State,

1 February 1939; Gazette des tribanaux, 18 March 1939; Gazettedu Palais, 11 April 1939; Revue generate de droit international public(Paris), 3rd series, vol. XVII I , N o . 1947), p . 248. In addit ion toits own statement of reasons, the Cour t repeated word for wordthe statement of reasons given by the juge des referes (quoted inpreceding foot-note).

221 See article 2 above.222 See, in particular, K. Marek , Identity and Continuity of States

in Public International Law (Geneva, Droz , 1954), pp . 369-416;M. Flory, Le statut international des gouvernements refugies et le casde la France libre, 1939-1945 (Paris, Pedone, 1952), pp . 202-205and passim, and their bibliographies.

223 Eleven ships flying the flag of the Baltic nat ions remainedin United States ports for a long t ime as "refugees". See H . W. Briggs,"Non-recognit ion in the Cour t s : the Ships of the Baltic Republics",American Journal of International Law (Washington, D.C. ) , vol. 37,N o . 4 (October 1943), pp . 585-596. The United Kingdom hadrequisitioned 34 Baltic ships during the Second World War , butentered into negotiations on the subject with the USSR, which itfinally recognized as the owner of the ships.

224 Switzerland, Rapport du Conseil federal a I 'Assemblee federatesur sa gestion en 1946, No. 5231, 1 April 1947, p. 119.


placing under the trusteeship of the Confederation the publicproperty of the Baltic States, as well as the archives of theirformer diplomatic missions in Switzerland, those missions havingceased to be recognized as from 1 January 1941.22E

(8) In drafting paragraph 2 of the article under con-sideration, the Special Rapporteur took into considerationsituations such as arose following the various partitionsof Poland among several neighbouring States. He willsupply later some specific information regarding thedevolution of public property situated outside theterritory of partitioned Poland.

SECTION 5. SECESSION OR SEPARATIONOF ONE OR MORE PARTS OF ONE OR MORE STATES


1. The privilege of issue shall belong to the successorState throughout the detached territory or territories.

2. Currency, gold and foreign exchange reserves, and,in general, monetary tokens of all kinds which are properto the detached State shall pass to the successor State.

3. In consideration of the foregoing, the successor Stateshall assume responsibility for the exchange of the formermonetary instruments, with all the legal consequenceswhich this substitution of currency entails.

COMMENTARY

(1) Article 28 is similar to article 16, which deals withcurrency and the privilege of issue in the case of theemergence of a "newly-independent State". That shouldnot be surprising, as cases of secession or separation havebeen treated separately from cases of decolonization forpurely methodological reasons.228 Accordingly, for thesake of convenience the Special Rapporteur refers thereader to his commentary on article 16, at least as regardsconsiderations of a general nature, which apply equallyto that article and to article 28.

(2) When Czechoslovakia was established after the FirstWorld War as a result of the detachment of severalterritories of the former Austro-Hungarian empire, thecurrency of Czechoslovakia was created in 1919 simplyby overprinting the Austrian notes in circulation in theterritory of the new Republic and reducing their valueby 50 per cent.

(3) The Polish State, reconstituted after the First WorldWar from territories recovered from Germany, Austria,Hungary and Russia, introduced the zfoty, a new nationalcurrency, without initially prohibiting the circulation ofthe currencies formerly in use. Accordingly, for a timefour different currencies were in circulation simultaneouslyin Poland. Subsequently, various legislative measuresrequired the exchange of German marks, Russian roubles

225 P. Guggenheim, op. cit., p . 466, note 1.226 See paras. 33 and 34 above. These are methodological reasons

at least in the case of succession to public property. They couldprove more complex in the case of succession to public debts.

and Austro-Hungarian crowns 227 or declared that thosecurrencies had lost their value as legal tender.228


1. Irrespective of their geographical location, publicfunds and Treasury which are proper to the detachedterritory shall not be affected by the change of sovereignty.

2. The State fortune—its public funds and Treasuryassets—shall be apportioned between the predecessorState and the successor State, due regard being had to thecriteria of viability of each of the States.

COMMENTARY

(1) Paragraph 1 of article 29 states a rule which isfollowed in nearly all cases of State succession. There isno apparent reason why the public property of thedetached territory, in particular its assets, its Treasuryand its own funds, should not remain its property.Paragraph 2, on the other hand, deals with the fortune.The part of the territory transferred may be fairly sub-stantial and there is no reason why the remaining territoryalone should retain the public funds and the Treasury intheir entirety. It therefore seemed appropriate to providefor this property to be apportioned between the pre-decessor State and the secessionist State. That is also whythe Special Rapporteur considered that the viability ofeach of the States must be the basic criterion.

(2) The most recent case of secession is that of Bangla-desh. However, it has not yet been possible to obtainmuch information regarding the practice followed in thiscase.


1. Archives and public documents of every kind relatingdirectly or belonging to a territory which has becomedetached in order to form a separate State, and publiclibraries of that State, shall, irrespective of where they aresituated, be transferred to the latter State.

2. The successor State shall not refuse to hand overcopies of such items to the predecessor State or to anythird State concerned, upon the request and at the expenseof the latter State, save where they affect the security orsovereignty of the successor State.

COMMENTARY

(1) This article is identical with articles 14 and 18suggested above to cover cases of partial transfer ofterritory and emergence of a newly independent State,respectively. Accordingly, the Special Rapporteur refersthe reader to the commentaries on these articles, as thesituation in all these cases is basically the same, at leastin so far as concerns archives and public libraries.

(2) The territories which were detached from the Austro-Hungarian empire to form new States—such as Czecho-

227 See, in particular, the Act of 9 M a y 1919.228 See, in particular, the Act of 29 April 1920.


Slovakia—after the First World War arranged for thearchives concerning them to be handed over to them.829

Yugoslavia and Czechoslovakia subsequently obtainedfrom Hungary, after the Second World War, by theTreaty of Peace of 1947, all historical archives which hadcome into being under the Austro-Hungarian monarchybetween 1848 and 1919 in those territories. Under thesame Treaty, Yugoslavia was also to receive fromHungary the archives concerning Illyria, which datedfrom the eighteenth century.230

(3) Article 11, paragraph 1, of the same Treaty specificallystates that the detached territory which had formed aState, such as Czechoslovakia, was entitled to the objects"constituting [its] cultural heritage . . . which originated inthose territories *"; thus, the article was based on thelink existing between the archives and the territory, whichexplains the expression "archives relating directly to aterritory" suggested by the Special Rapporteur in thedraft article under consideration.

(4) In the same case, moreover, paragraph 2 of the samearticle rightly stipulates that Czechoslovakia would notbe entitled to archives or objects "acquired by purchase,gift or legacy and original works of Hungarians", whichimplies a contrario that objects acquired by the Czecho-slovak territory should revert to it. That explains theexpression "archives belonging to a territory" which theSpecial Rapporteur has used in his draft. This propertywas in fact returned to Czechoslovakia.231

(5) The aforementioned article 11 of the Treaty of Peacewith Hungary of 10 February 1947 is one of the mostspecific with regard to time-limits for the handing overof archives: it establishes a veritable time-table withina maximum time-limit of 18 months.

Article 31. Property situated outsidethe detached territory

1. Where a State comes into being as a result of thedetachment of a part of the territory of one or more States,the ownership of public property belonging to the saidconstituent territory or territories which is situated outsidetheir frontiers shall not be affected by such change orchanges of sovereignty.

2. Public property belonging to the predecessor Statewhich is situated in a third State shall become the propertyof the successor State in proportion to the contributionof the detached territory to the creation of such property.

COMMENTARY

(1) Article 31, paragraph 1, states a rule which does notappear to give rise to any doubts, although the courts

left room for some uncertainty in a case known as thecase of Irish funds deposited in the United States ofAmerica.2sa

Irish revolutionary agents of the Sinn Fein movementhad deposited in the United States funds collected by arepublican political organization, the Dail Eireann, whichhad been established at the end of the First World Warwith the aim of forcibly overthrowing the British auth-orities in Ireland and proclaiming the independence ofthe country. During the Irish uprising of 1920-1921,these movements brought forth a revolutionary republicande facto Government, headed by Eamon De Valera.

When a Government of the "Irish Free State" wasconstituted by the Treaty of 6 December 1921, betweenGreat Britain and Ireland, this new authority claimedthe funds from the United States, as the successor of theinsurrectionary de facto Government.

An Irish court upheld this claim, ruling that the Govern-ment of the Irish Free State was "absolutely entitled toall the property and assets of the [de facto] RevolutionaryGovernment upon which as a foundation it had beenestablished".233

(2) However, an American court dismissed the claim.The two judgements to this effect rendered by the SupremeCourt of New York (New York County)234 statedthat, although the case involved a problem of successionof State or government, the Court considered that theIrish Free State was the successor of the British Stateand that consequently the Government of the FreeState was not the successor of the "insurrectionary govern-ment", which was only a political organization and nota government recognized as such by the British authoritiesor by any foreign State.

The Supreme Court of New York therefore held thatonly Great Britain could be entitled to claim the funds.Although the case does not concern a succession ofStates, it is interesting to note that it could be deducedfrom the reasons stated by the Court that, if the fundshad been paid over to Great Britain, the Irish Free Statewould in turn have been able to claim them from GreatBritain as the successor State of that country.

(3) The reader will recall the McRae case mentionedearlier,835 which, although it related to the dissolutionof unions, can also be considered from the standpoint

22» Article 93 of the Treaty of Saint-Germain-en-Laye (Britishand Foreign State Papers, 1919, vol. 112 (op. cit.), p . 361) andarticle 77 of the Treaty of Tr ianon (ibid., 1922, vol. 113, (op. cit.),p . 518).

2 3 0 Article 11 of the Treaty of Peace with Hungary of 10 February1947 (United Nat ions , Treaty Series, vol. 4 1 , p . 178).

2 3 1 The same provisions were applied in the case of Yugoslaviain article 12 of the Treaty of 10 February 1947 already referredto (see note 148 above).

232 See E. D . Dickson, "The case of the Irish Republic 's funds",American Journal of International Law (Washington ( D . G ) , vol. 21 ,N o . 4 (October 1927), pp . 747-753; J. W. Garner , " A question ofState succession", ibid., p p . 753-757; D . P . O'Connell , StateSuccession... (op. cit.), pp . 208-209; C. K . Uren, "The successionof the Irish Free State" , Michigan Law Review (Ann Arbor , Mich.) ,vol. XXVII I (1929-1930), 1930, p . 149; Ch. Rousseau, Cours dedroit international public—Les transformations territoriales...(op. cit.), pp . 145-146.

233 Supreme Cour t of the Irish Free State, Fogar ty and othersv. O 'Donoghue and others 17 December 1925. See A. D . McNa i rand H . Lauterpacht , Annual Digest of Public International LawCases, 1925-1926 (London, Longmans , Green, 1929), case N o . 76,p p . 98-100.

23t Supreme Cour t of New York (New York County) , IrishFree State v. Guaran ty Safe Deposi t Company . Ibid., case N o . 77,pp . 100-102.

235 See above, paras . 3 and 5 of the commentary to article 23 .

Succession of States in respect of matters other than'treaties 59

of secession. It was, however, an attempt at separationwhich failed.

(4) The diplomatic practice followed by Poland when itwas reconstituted as a State upon recovering territoriesfrom Russia, Austria-Hungary and Germany was, asis known, to claim ownership, both within its boundariesand abroad, of property which had belonged to theterritories which it recovered.

(5) Paragraph 2 of the article would apply to cases ofproperty belonging to the predecessor State or Statespart or parts of whose territory had been detached toform the new State. Where the constituent territory orterritories contributed to the constitution of propertysituated in a third State, they are entitled to claim theirshare of that property, which would be determined onthe basis of their contribution.

(6) However, this rule apparently has not always beenfollowed in diplomatic practice. In considering the caseof the dismemberment of the territories of the Habsburgdynasty, there is observable, inter alia a type of secession,in that Czechoslovakia, for example, was formed fromcertain territories which were detached from the Empire.

(7) An arbitral award was in fact delivered at Czechoslo-vakia's request in a case involving the cession of vesselsand tugs for navigation on the Danube.m

In the course of the proceedings, Czechoslovakia hadsubmitted a claim to ownership of a part of the propertyof certain shipping companies which had belonged to theHungarian monarchy and to the Austrian Empire orreceived a subvention from them, on the ground thatthese interests were bought with money obtained fromall the countries forming parts of the former AustrianEmpire and of the former Hungarian Monarchy, andthat such countries contributed thereto in proportion tothe taxes paid by them, and therefore, were to the sameproportionate extent the owners of the property.237

(8) The position of Austria and Hungary was that, inthe first place, the property was not public property, whichalone could pass to the successor States, and, in thesecond place, even admitting that it did have such statusbecause of the varying degree of financial participationby the public authorities, "the Treaties themselves do notgive Czechoslovakia the right to State property exceptto such property situated in Czechoslovakia *".238

The arbitrator did not settle the question, on the groundthat the treaty clauses did not give him jurisdiction totake cognizance of it. There is no contradiction betweenthis decision and the principle of succession to public

288 Case of the cession of vessels and tugs for navigation onthe Danube , Allied Powers (Greece, Romania , Serb-Croat-SloveneKingdom, Czechoslovakia) v. Germany, Austria, Hungary andBulgaria (Decision: Par is : 2 August 1921, Arbi t rator : WalkerD . Hines (USA)). (See United Nations, Reports of InternationalArbitral Awards, vol. I (United Nations publication, Sales N o . 1948.V.2), pp . 97-212.)

237 Ibid., p . 120.238 Ibid., pp. 120-121. The reference was to article 208 of the

Treaty of Saint-Germain-en-Laye {British and Foreign State Papers,1919, vol. 112 (op. cit.), pp . 412-414), and article 91 of the Treatyof Trianon {ibid., 1922, vol. 113 (op. cit.), pp . 564-565).

property situated abroad. It is obviously within thediscretion of States to conclude treaties making exceptionsto a principle.

V. PROVISIONS RELATINGTO PUBLIC ESTABLISHMENTS

Article 32. Definition of public establishments

For the purposes of the present articles, "public estab-lishments" means those bodies or enterprises which engagein an economic activity or provide a public service andwhich are of a public or public utility character.

COMMENTARY

(1) As the domestic legislation of many States is relativelyvague in its definition of "public establishments" orequivalent bodies, it would seem preferable to definesuch institutions less by their designation in domesticlegislative texts than by the objective nature of theirfunctions.

Public establishments exist in almost all sectors ofhuman activity: educational sector (universities, colleges,secondary schools, research institutions, museums,theatres, libraries); social sector (hospitals, socialwelfare and assistance agencies); financial sector (institu-tions of issue, banks, savings banks, Treasuries);communications sector (railways, port establishments,airports); etc.239

The activities of these bodies vary in scope accordingto the country. However, they all have the characteristiceither of providing or assuring a public service or ofengaging in a public activity within the framework ofthe national economy.

A. The public establishment administers a public service

(2) The public establishment, which is set up to administera public service, is for that purpose provided with astatute determining its structure and mode of operation.Its creation, like its abolition, is closely bound up withthat of the public service in question. The establishment'spatrimony is made up of property which may belongto the State in whole or in part; in the latter case, theremainder of the property belongs to various territorialauthorities (municipalities, departements, districts, arron-dissements, etc.) or to the public establishment itself. Thepublic establishment is in fact a body corporate. Itspublic character derives from the fact that it provides a

238 Like French administrative law, German law makes a distinc-tion between public establishment ("offentliche Anstalt") and publicenterprise ("offentliche Unternehmung"). Anglo-Saxon law hardlyseems to make any distinction between "public corporation","enterprise", "undertaking" and "public undertaking" or "publicutility undertaking". Spain has "institutos publicos", Italy has"enti pubblici" and "imprese pubbliche", Latin America has"autarquias" and Portugal has "estabelecimentos publicos" or"fiscalias". See W. Friedmann, The Public Corporation: A Compar-ative Symposium (University of Toronto School of Law, ComparativeLaw Series, vol. 1, London, Stevens, 1954).

60 Yearbook of the International Law Commission, 1973, vol. It

public service to a particular population or a segmentof that population.

B. The public establishment may engagein an economic activity

(3) The public establishment of an industrial or commer-cial character, which takes a variety of forms and appella-tions according to its origins and purpose, generallyhas a different legal regime from that of the first typeof public establishment. It enjoys a greater measure ofindependence in relation to the Government than doesthe first type, basing its organization and administrationon private law procedures. The establishment's patrimonyis made up of property which may belong to the State,to local authorities, to the establishment itself and onoccasion, in the case of mixed companies, to privateindividuals. In any event, the public establishment inquestion clearly has a public character in these cases too.

C. The establishment of public utility or general interest

(4) An establishment in this particular category does notadminister a public service but engages in an activitywhich is sufficiently important for the population to beregarded as being "of general interest" or "of publicutility". A public establishment in this category, whichis set up by private initiative, may be of two kinds: itmay engage in activities substantially similar to thoseof a public service where the latter does not hold acomplete monopoly on activities of that type; it mayprovide a special service to a group where the Govern-ment feels that it is unnecessary to set up a public serviceto cater for the needs of such a small group, although itintervenes to recognize the public utility character of theestablishment which caters for such needs.

(5) The Government extends help or assistance to theprivate public utility establishment in a variety of forms(subsidies, preferential customs or tax treatment, specialpricing system, monopoly status, public authority privi-leges such a expropriation or the levying of taxes). Inreturn for such assistance, the Government is accordedsupervisory authority over the establishment.

D. The public or public utility character

(6) Despite the variety of the legal regimes to which theyare subject, the three categories of establishment mentionedabove have one feature in common: their public or publicutility character. The existence of this characteristic canbe determined by the link the establishment and the terri-tory—in other words, according to the relationshipbetween the body and the population and to the linkbetween the establishment and the economy of theterritory.

1. Link with the population

(7) The establishment is intended to meet public needs ina particular sector. In the case relating to the interpreta-tion of article 260 of the Treaty of Versailles submittedto arbitrator Beichmann, the Reparation Commissiontook the view that the link between the establishment

and the population was of paramount importance forthe purpose of attributing to an undertaking the characterof a public utility. Such an undertaking should " . . . servethe great majority of consumers * in a fairly sizableexpanse of territory" 24° and "satisfy an essential needof a community by collective means of distribution"* 241 or,again, provide "in a fairly extensive territorial area, inorder to satisfy a collective need* a service consideredto be of general utility in all modern civilized communi-ties".242

Arbitrator Beichmann also emphasized this link byconcluding that public establishments "express the ideaof a special utility for the general public and sometimesalso of direct use by the public".243

2. Link with the economy of the territory

(8) By its activities, the establishment may "supplyindustrial and commercial undertakings scattered through-out the territory and furnish them with raw materials".244

(9) The dual link with the economy and the populationof the territory highlights the importance in the establish-ment or undertaking of the objective element constitutedby their public utility character in general and convenientlyrelegates to a secondary position the excessive variety ofcriteria for a definition which may be derived from themunicipal law of each State. Arbitrator Beichmann didin fact draw attention to a number of differences 245 inthe designation of the body in question between onemunicipal juridical order and another.246

E. Criteria for a definition

(10) For these reasons, a tendency can be observed forinternational judicial decisions to reject criteria for adefinition which are derived from municipal law in theevent of a change of sovereignty affecting a territory.Three examples of this approach may be cited.

1. Arbitral award concerning the interpretation ofarticle 260 of the Treaty of Versailles

(11) In this case, the parties to the Treaty of Versaillesheld conflicting views concerning the true meaning ofthe expression "public utility undertaking" used inarticle 260 of the Treaty, each of the parties attempting

240 Case of German reparat ions: Arbitral award concerningthe interpretation of article 260 of the Treaty of Versailles [arbitratorF . W . N . Beichmann], publication de la Commission des reparat ions ,annex 2145a (Paris, 1924), and United Nat ions , Reports of Inter-national Arbitral Awards, vol. I fop. cit.), p . 455.

241 Ibid., p . 456.242 Ibid., p . 455. The Commission added that "utilization by the

public is an important element^" in a definition (ibid., p . 462).213 Ibid., p . 468.244 Ibid., p . 455.245 Ibid., p . 460 and foot-note.24 6 Even where the body is recognized as having a public character,

its real na ture is often the subject of learned disputes between juristsof various schools of thought within a particular juridical order(public establishment, public undertaking, public establishmentof an industrial or commercial nature , public service, public body,public utility undertaking, etc.).


to win acceptance for the more or less broad interpreta-tion, given to these terms in its own administrative law.After analysing the various arguments advanced, Arbi-trator Beichmann expressed the view that the expressions"entreprise d'utilite publique" and "public utility under-taking" contained in the article applicable to the calcu-lation of German reperations "could not be regarded ashaving been taken from English or French legal vocabularyor as being related to any expression used in theadministrative law of either country".*247 He also tookthe view that the expression "public utility undertaking"could not necessarily be linked to the concept of "devo-lution of public authority or [to] other criteria of ajuridical nature such as those contained in the definitionin the German Government's conclusions".248

(12) After rejecting all interpretations of the disputedexpression contained in municipal law, the arbitratorconcluded by expressing the opinion that its meaning,and hence its definition, should accord with the meaningwhich it had in everyday language.

2. Decision of the United Nations Tribunal in Libya

(13) The Tribunal, which was set up by United NationsGeneral Assembly resolution 388 (V) of 15 December1950, had to decide, in connexion with the transfer toLibya of property belonging to the Italian State, whethera number of institutions formerly governed by Italianlaw could be deemed to be "public establishments"within the meaning of article 1 of annex XIV to the PeaceTreaty of 10 February 1947. The agent of the ItalianGovernment had contended that the Tribunal's decisionsmust relate to the character of an "ente pubblico" in thestrict sense of the term and in conformity with the meaningof that term in Italian legislation.

(14) The Tribunal rejected this view, stating that it was"not bound by Italian legislation and case law.* The Tri-bunal will therefore consider this question by freelyappraising the various factors in each individual case".249

In the opinion of the Tribunal, the parties "purposelychose a term with a general meaning, broader than theterm 'ente pubblico'' in Italian law".250

3. Decision of the P.C.I. J. in a case relating to a Hungarianpublic university establishment251

(15) It will be recalled that, in the case of propertybelonging to the Peter Pazmany University of Budapestand situated in territory ceded by Hungary to Czechoslo-vakia, the Permanent Court of International Justice

247 United Nat ions , Reports of International Arbitral Awards,vol. I (op. cit.), p . 467.

248 Ibid.248 "Case of the institutions, companies and associations

mentioned in article 5 of the agreement concluded o n 28 June 1951between the United Kingdom and Italian Governments concerningthe disposal of certain Italian property in Libya", decision of27 June 1955 (United Nat ions , Reports of International ArbitralAwards, vol. XI I (United Nat ions publication, Sales N o . 63.V.3),p . 390).

260 Ibid.261 See Yearbook...l970, vol. I I , p . 140, document A/CN.4/226,

par t two, paras . 27-30 of the commentary to article 1.

decided that it "has [had] no need to rely upon this interpret-ation of Hungarian law.* It is content to observe thatthe distinction between public and private property, inthe sense of the Czechoslovak Government's argument,is neither recognized nor applied by the Treaty ofTrianon".252

(16) Thus, international judicial tribunals do not regardthemselves as bound by municipal law; the status of aparticular public establishment should be appraisedon the basis of its various individual features or the wishexpressed by the contracting parties.

F. Determination by treaty

(17) Doubtless because the definition or "public estab-lishments or bodies" is a difficult question, the predecessorState and the successor State sometimes prefer to listsuch establishments or bodies in treaty form in thedevolution agreements which they conclude. This pro-cedure is followed frequently in the case of all types ofsuccession but has become common practice in casesof decolonization.

In particular, France concluded with the French-speaking African States many agreements regulating thefuture status of "French public bodies" and certain "Frenchadministrative entities" situated in those countries.However, no attempt should be made to find in thesetreaty provisions elements for a strict definition of publicestablishments or for determining their property or thelegal nature of their rights over such property, or reasonsof principle justifying the maintenance of such estab-lishments within the patrimony of the predecessor State."The concept of the French public body", writesMr. Daniel Bardonnet, "is quite unspecific from thelegal standpoint. It seldom involves . . . more than theexistence of body corporate status and financial inde-pendence. In practice, it is merely a convenient tag tocover a rather motley assortment of public and semi-public bodies and bodies of public interest. . . ",253

Article 33. Public establishmentsof the transferred territory

Public establishments which belong entirely to thetransferred territory shall not be affected by the mere factof the change of sovereignty.

252 Judgement of 15 December 1933, "Appeal from a judgementof the Hungaro-Czechoslovak Mixed Arbitral Tribunal (ThePeter Pazmany University v. the State of Czechoslovakia)", P.C.I.J.,Series A/B, No. 61, pp. 236-237.

263 D. Bardonnet, op. cit., p. 601. After an unusually detailedanalysis, the writer expressed the opinion, inter alia, that "the listof French public bodies, as contained in the (Franco-Malagasy)liquidation statement of 18 April 1961 should be reviewed. It isirregular for the list to include joint-stock companies belongingto Madagascar itself, such as the Soctete d'Energie de Madagascar...or the Society des petroles de Madagascar. Similarly, the managerof the Compagnie francaise pour le developpement des fibrestextiles went so far as to request that the company's name shouldbe removed from the list, since in his view that establishmentwas purely private in character" {ibid., p. 602, foot-note 146).


COMMENTARY

(1) The legal status of public bodies or corporationsor of public enterprises and establishments which areproper to the territory affected by the change of sover-eignty cannot be affected by the succession of States assuch. Irrespective of the type of succession, the patrimonyof the territory retains the status which it had prior tothe change.

(2) The situation is clear for the cases of (a) partialtransfer of territory, (b) a newly independent Stateand (c) secession or separation of part of the territory ofa State. In the event of (d), the uniting of States, the ruleseems to be as fully applicable as in the other cases:the public establishments of each of the uniting Stateswill remain the property of those States, save wheretreaty provisions state the contrary. In the event ofdissolution of the union, if each State constituting theunion owned public establishments in its territory, it isevident that, a fortiori, it cannot be divested of ownershipof such establishments when the union is dissolved.

The only remaining possibility is the absorption of aState or its partition among several others: this is a casein which the totality of the transferred territory is coex-tensive with that of the predecessor State. In other words,"public establishments which belong entirely to thetransferred territory", that is to say, bodies owned bythe territory itself, are in this case nothing but estab-lishments belonging to the absorbed or partitioned State,and we must therefore refer to the case considered inarticle 34, relating to State property in public establish-ments.

(3) There is no lack of examples for each type of suc-cession; however, to avoid making unduly long commentaries on an article which is self-evident in any case, weshall confine ourselves here to considering the case of de-colonization alone, and, within decolonization, to thesole case of North Africa.

(4) For example, the French-Moroccan protocol con-cerning the distribution of public services betweenMorocco and France, signed at Rabat on 11 February1956, specified clearly, even in its title, that during theprotectorate the French Residence generate had possessedin Morocco only "management powers" over certainpublic establishments, the Moroccan ownership of whichwas thus recognized. Radio-Maroc, the State PrintingOffice and the educational services were consequentlytaken over once more by the Sherifian Government.In this connexion the French Secretary of State forTunisian and Moroccan Affairs subsequently informeda member of the French Parliament who inquired aboutthe restoration of the educational services that "All ofthose services have always been Sherifian at the adminis-trative and budgetary levels".254 Later he added that"In Morocco the buildings and equipment of Radio-Maroc, paid for from the Moroccan budget, have always

belonged to the Sherifian State"255 but that the same wasnot true of "the installations" of Radio-Tunis.

(5) In fact, the French-Tunisian Agreement concerningBroadcasting of 29 August 1956 provided that beginningon 31 March 1957, "all of the land, buildings, premisesand installations belong to Radiodiffusion francaise inTunisia shall be transferred with full rights of ownershipto the Tunisian State through the latter's purchasingthem within the framework of property negotiationsbetween the two countries". The Agreement wouldenable the Tunisian Government to carry on for itselfas from 31 March 1957 "the management, operationand equipping of Radiotele'vision tunisienne".

(6) Public establishments which were the property ofAlgeria were retained by the latter on its accession toindependence.

The Declaration of Principles concerning Economicand Financial Co-operation, dated 19 March 1962,256

stated in article 18 that "Algeria shall assume the obli-gations and enjoy the rights * contracted on behalf ofitself or of Algerian * public establishments by thecompetent French authorities. But Algeria provisionallyleft to France the use of certain services for the needs oftechnical and cultural co-operation between the twocountries, as happened also between France and theother countries of the Maghreb or the African andMalagasy States.257

Article 34. Property of the Statein public establishments

The successor State shall be automatically and fullysubrogatedl to the patrimonial rights which the predecessorState possesses in public establishments situated in thetransferred territory.

COMMENTARY

(1) The rule suggested above is simple, clear and logical,but it must be admitted—that it has been applied onlyintermittently. The Special Rapporteur ventures, however,to submit it to the Commission, leaving the latter tojudge whether the uncertainty of the use of the rule inpractice appears to have the effect of annulling it or ofrequiring that it be amended. A study of State practiceprovides us with equally numerous examples of (a) auto-matic and complete succession of the successor State to

254 Reply by the Secretary of State for Tunisian and MoroccanAffairs to a written question from Mr. Michel Debre, No. 6663(France, Journal officiel de la Republique frangaise, Debats parle-mentaires: Conseilde la Republique (Paris), 20 June 1956, year 1956,No. 37 C. R., p. 1191).

265 Reply by the Secretary of State, Office of the Prime Minister,to an oral question from Mr. Michel Debre' (ibid,, 16 January 1957,year 1957, No. 1 C. R., p. 7).

256 United Nations, Treaty Series, vol. 507, p. 65.267 Article 2 of the Declaration of Principles concerning Cultural

Co-operation stated in this connexion that "France will retain ta certain number of educational establishments in Algeria" (ibid.,p. 77). In pursuance of that article, the French-Algerian Protocolof 7 September 1962 concerning the Distribution of EducationalEstablishments provided for "a provisional distribution" of thoseestablishments and included an annex entitled "List of establishmentsretained^ by France". Under another protocol, of 11 June 1963,France was to "retain" certain Algerian establishments, whileAlgeria was to "temporarily entrust the management of certainestablishments" to a Joint Scientific Research Council (article 1of the Protocol).


the property of the State in public establishments,(b) automatic but limited succession to the property ofestablishments situated in the territory affected by thechange of sovereignty, (c) succession on condition ofpurchase, and (d) temporary retention of such propertyby the predecessor State.

(2) It would seem, however, that this indicates, not thatthe principle of succession is set aside, but merely thatits practical application is subject to certain restrictionsin treaties. Even when two States decide to deviate fromthe principle, such action is also a way of recognizingits existence: the High Contracting Parties "agree toreplace the property settlement based on the nature of theappurtenances * by a global settlement based on equityand satisfying their respective needs".258

A. Automatic and complete succession

(3) In 1871, Germany took over the rights and propertybelonging to France in respect of the part of the railwaynetwork of the Compagnie de VEst situated in Alsace-Lorraine.259 Bismarck had in fact decided, after theconclusion of the Treaty of Peace of Frankfurt dated10 May 1871,260 to retain the lines in Alsace-Lorraineas property of the State. Since France protested againstthat decision, Germany consented to pay compensation,but the completely fictitious nature of the latter leadsto the conclusion that this was a concealed case of auto-matic and complete succession. Furthermore, it was thecompany and not France that had been compensated.France had repurchased its rights from the companyin order to give them to Germany.

(4) The Treaty of Frankfurt contained in fact threeadditional articles, two of which related to the problemof the lines of the Compagnie de l'Est. The GermanEmpire required France to repurchase the concessionsgranted to the company in Alsace-Lorraine, and wasrequired in exchange to pay France a lump sum whichit merely deducted from the war reparations that ithad exacted from France (325 million out of 5,000 milliongold francs).

(5) When France regained Alsace-Lorraine from Germanyafter the First World War, there was an automatic andcomplete succession, considered to be restitution exclusiveof any compensation. France regained not only therailway network in the East, but also all the rolling-stockafter its representative had declared at the Peace Confe-rence that the question was

purely a question relating to a territorial cession and in no way aquestion of compensation. France reclaims the rolling-stock

268 Article 31 of the Franco-Malagasy agreement of 27 June 1960concerning economic and financial co-operation (approved inMadagascar by an Act of 5 July 1960 and in France by an Actof 18 July 1960). (See France, Journal officiel de la Ripubliquefrancaise, Lois et decrets (Paris), 20 July 1960, 92nd year, No. 167,p. 6615.)

269 This case of partial transfer of territory does not appearto have involved the situation considered in article 10 relatingsolely to rights in respect of the authority to grant concessions.

260 For reference, see above note 125.

belonging to the network in Alsace-Lorraine as an accessory ofthe soil of Alsace-Lorraine, a kind of rolling public domain belongingto the soil by virtue of a kind of right of succession *.261> 262

(6) Under the Treaty of Peace with Italy of 10 February1947 (annex X, para. 1), "the Free Territory of Trieste[received], without payment, Italian State and para-statal property * within the Free Territory".263 Thefollowing were considered as State or para-statal property:"movable and immovable property of the Italian State,of local authorities and of public institutions and publiclyowned companies and associations, as well as movableand immovable property formerly belonging to theFascist Party or its auxiliary organizations".264

(7) The Treaty of Peace between the USSR and Finlanddated 12 March 1940, which provided for reciprocalterritorial cessions between those two countries, includedan annexed protocol under which various kinds of pro-perty of economic and military importance (includingmanufacturing enterprises, telegraph and electric powerstations, aerodromes and warehouses), were required tobe handed over intact by each party to the other.265

(8) After its restoration in 1918, Poland expected toregain all the Russian, German and Austro-Hungarianproperty situated in the territories in which it had beenre-established. This is a case which goes beyond autom-atic succession without payment to the property ofthe State in public enterprises or enterprises of public

261 Peace Conference (1919-1920), Recueil des actes de la Confe-rence de la paix (Paris, Imprimerie Nationale, 1922), part IV(Commissions of the Conference), B (General questions), (5)Commission for the International Regime for Ports, Waterwaysand Railways, meeting of 21 March 1919, extracts from the recordsNo. 14, p. 122.

262 « ^ / r Annitage Smith (British Empire): ... The peacepreliminaries would stipulate that Germany's public domainshould be ceded without payment. The allies would then considerwhether the value of that domain should be deducted from thecompensation to be made to the cessionary States.

"Mr. Sergent (France) :... If the cessionary State allowed thevalue of-this domain to be deducted from its claim against Germany,its claim will be diminished. In the case of Alsace-Lorraine, sinceGermany had seized^ French public property without compensation tin 1871, the proposed method would mean that France was madeto pay for State property which had been taken from it by force.

"Mr. Montague (British Empire) Suggested specifying that theGerman public domain would be transferred without paymentto the cessionary State and that the Allies would decide later howallowance should be made for this.

"Mr. Sergent (France) said that France could not pay the Alliesfor something it received without payment from Germany." {Ibid.,(6) Financial Commission, First Sub-Commission, meeting of21 March 1919, extract from the records, No. 4, pp. 130-131.

See also the reasons given for the judgement by the FrenchCourt of Cassation in Compagnie des chemins de fer d'Alsace etde Lorraine v. Ducreux (Cour de Cassation franchise, Chambrecivile, judgement of 11 July 1928 (Dalloz, Recueil hebdomadairede jurisprudence, annee 1928 (Paris, Dalloz), p. 512)).

263 Treaty of Peace with Italy signed at Paris on 10 February 1947(United Nations, Treaty Series, vol. 48, p. 209).

264 Ibid. See also annex XIV ("Economic and Financial Provisionsrelating to Ceded Territories") {ibid., p. 225), where provisionsidentical to those relating to the Territory of Trieste are set forthfor States successors of Italy in other territories.

265 British and Foreign State Papers 1940-1942, vol. 144 (London,H.M. Stationery office, 1952), p. 383. See also I. Paenson, op. tit.,p. 105.


utility, since Poland expected to recover even privateproperty.266

(9) The Treaty of Peace signed at Bucharest on 7 May1918 between the Central Powers and Romania,267

stipulates in article 12 that all State property (Staats-vermogen) of the ceded Romanian territories shall passto the successor States free and clear of any compensationor costs.

(10) Under United Nations General Assembly resolu-tion 388 (V) of 15 December 1950 concerning the econ-omic and financial provisions relating to Libya, thatcountry was to receive, "without payment, the movableand immovable property located in Libya owned by theItalian State, either in its own name or in the name ofthe Italian administration of Libya". Article 1, para-graph 2, of that resolution provided for the transfer,immediately and without payment, of the public propertyof the State ("demanio pubblico"), the inalienableproperty of the State ("patrimonio indisponibile"), aswell as the property of the Fascist organizations. Para-graph 3 of the same article provided, in addition, that

the following shall be transferred on conditions to be establishedby special agreement between Italy and Libya: (a) the alienableproperty (patrimonio disponibile) of the State in Libya and theproperty in Libya belonging to the autonomous agencies (aziendeautonome) of the State ;* (b) the rights of the State in the capitaland the property of institutions, companies and associations of apublic character located in Libya *.

It is known that the United Nations Tribunal had tosettle this problem of the transfer of public propertyto the successor State, particularly State property inorganizations of a public or semi-public character.

(11) By and large the same provisions were applied in thecase of Eritrea which, under General Assembly resolution530 (VI), succeeded, automatically and without payment,to the property of the "demanio pubblico", the "patri-monio disponibile" and "indisponibile", of the FascistParty and its organizations, and the following "aziendeautonome": the railway of Eritrea ("Ferrovie delPEritrea"),the "Azienda Speciale Approvigionamenti", "the AziendaMiniere Africa Orientale" (AMAO), and the "AziendaAutonoma Strade Statali" (AASS), as well as to the"rights of the Italian State in the form of shares andsimilar rights in the capital of institutions, companies andassociations of a public character *"268 (which have theirhead offices in Eritrea).

(12) Algeria was to succeed to the property of the FrenchState in the public bodies in Algeria: "Public establish-

266 See third report (Yearbook...l970, vol. II, p. 131, documentA/CN.4/226), and the abundant decisions of the Polish SupremeCourt. According to a judgement of that Court (Co-operativefarmers in Tarnow v. Polish Treasury, 1923), the Polish State hadtaken over the Austrian State Railways by taking over supremepower in the territory in question, that is, by an act of public law(see Yearbook...l963, vol. II, p. 143, document A/CN.4/157,para. 434).

267 De Martens, ed., Nouveau Recueilgeneralde traites (Leipzig,Weicher, 1921), 3rd Series, vol. X, p. 856.

268 General Assembly resolution 530 (VI) of 29 January 1952,"Economic and financial provisions relating to Eritrea", article I.This resolution is much more detailed than resolution 388 (V)relating to Libya.

ments of the [French] State or companies belonging tothe [French] State and responsible for the administrationof Algerian public services, will be transferred toAlgeria."269 In fact, the application of the principle hasgiven rise to various difficulties.270

B. Succession limited to the property of public establish-ments situated in the territory

(13) The examples cited above concerning automaticsuccession, without payment, to all the property of theState that might be included in the patrimony of publicestablishments, or their equivalent, include some instancesin which the succession has been expressly limited to thecase where such property is situated in the territoryaffected by the change of sovereignty.

(14) Thus, neither Libya nor Eritrea were able to succeedto the property of the Italian State in public establishmentswhen such property was situated—or the operationsrelating to it were carried on—outside Eritrea or Libya.

As stated in General Assembly resolution 388 (V),

where the operations of such institutions, companies and associ-ations extend to Italy or to countries other than Libya, Libyashall receive only those rights of the Italian State or the Italianadministration which appertain to the operations in Libya *. Incases where the Italian State or the Italian administration ofLibya exercised only managerial control over such institutions,companies and associations, Libya shall have no claim to anyrights in those institutions, companies or associations.271

(15) Similar or parallel provisions are found in devolutionagreements. Article 19, of the Declaration of Principlesconcerning Economic and Financial Co-operation be-tween Algeria and France provides that the transfer ofpublic establishments of the French State "will coverthe assets applied in Algeria * to the management ofthese public services".

C. Succession on condition of purchase

(16) When the French Establishments in India were takenover by the Indian Union, it was decided that "the FrenchGovernment will place a power station at the disposal

269 Article 19 of the "Declaration of Principles concerningEconomic and Financial Co-operation" (for reference, see abovenote 256), of 19 March 1962. The fact that this article, even thoughit refers to a future agreement, makes no reference to whetherthis transfer was to be made against payment, should be interpretedas excluding any compensation or repurchase.

270 See G. Fouilloux, "La succession des Etats de l'Afriquedu Nord aux biens publics francais", Annuaire de l'Afrique duNord, 1966 (Paris), vol. V, 1967, pp. 51-79. Following the occupationon 18 October 1962 by the French Army of the administrativedistrict of Rocher Noir, constructed on land acquired by a publicestablishment, the CEDA (Caisse d'equipement et de deyeloppementde l'Algerie)), the Algerian side replied by stepping up its take-overof various public establishments, including Radio Algiers. Thetransfer to Algeria of the patrimonial aspects of the various publicbodies took place progressively, following long, complex negotiationsand often on condition of purchase or against compensation.

271 Article I, para. 4, of resolution 388 (V). This paragraphwas reproduced in full in article I, paragraph 2 ( / ) of resolution 530(VI) quoted earlier in the case of Eritrea.


of the Government of India. The conditions of the purchaseshall be examined by the competent authorities."272

(17) When France withdrew from Lebanon, the latterpurchased from the former, on a lump-sum basis, pro-perty of the French State in public establishments inLebanon, such as the telephone system, the Beirutbroadcasting station and the flying control radio stationsand meteorological stations.273

(18) The protocol of 24 September 1962 concerningtechnical co-operation between France and Algeria inthe field of public works, transport and tourism 274

provides for the transfer of State property forming partof the patrimony of various public establishments. Inparticular, article 1 of the protocol provides that, "Asfrom 1 July 1962, Algeria shall supersede France inrespect of the rights and obligations attaching to thegeneral property of the railway system" while Franceundertakes to "transfer" to Algeria the shares it held inthe Societe nationale des chemins de fer algeriens(SNCFA). That was effected against payment, as inthe case of other public bodies, such as Electricity et Gazd'Algerie (EGA), Air-Algerie, and Caisse d'equipementet de developpement de l'Algerie (CEDA), the propertyof which was to be transferred to the equivalent newAlgerian body, the Caisse algerienne de developpement(CAD), etc.275

(19) It would appear that the few examples mentionedbriefly above should not be used as the basis for theformulation of rules, since that was not their purpose.Despite their relatively frequent occurrence, these examplesare the product of varying circumstances of time andplace, and this makes it hazardous to attempt to formulateany rule based on them.

It might in addition be pointed out that the transferagainst payment was justified at times by the fact that,in the context of co-operation, the successor State andthe predecessor State each undertook an evaluation ofthe property which it abandoned to the other. Reciprocalcessions had to be calculated for the purposes of compen-sation.

It should also be noted that, at least as far as decolo-nization is concerned, the purchase is sometimes moretheoretical than real. "Payment for the succession toproperty", writes Mr. Gerard Fouilloux,

272 Article XXI I of the Franco-Indian Agreement of 21 October1954 (for reference, see above, note 115). The compensat ion forthe purchase of this power station was fixed by a joint commissionat 21.65 lakhs.

273 Agreement between France and Lebanon concerning monetaryand financial relations between the two countries, signed at Parison 24 January 1948 (United Nat ions , Treaty Series, vol. 173, p . 99),article 8, paras. 3, 4 and 5.

274 Algeria, Journal officiel de la Republique algerienne, Ordon-nances (Algiers), 24 September 1962, First year, N o . 19, p . 311 ;and France , Journal officiel de la Republique francaise, Lois etdecrets (Paris), 6 October 1962, 94th year, N o . 236, p . 9660.

275 Fo r the purchase of property of the Bank of Algeria, aninstitution of issue, see also Yearbook...1971, vol. I I (Part One),p . 182, document A/CN.4/247 and A d d . l , part two, third sub-paragraph of para . 14 of the commentary to article 7.

is of illusory value, either because the new State does not possessthe necessary financial means, or, above all, because it tends togive rise to a dispute that is not conducive to co-operation *.276

Such a dispute is a clear indication of the argumentagainst the merits of a possible rule stating that transfersmust be made against payment.

Finally, it is worth while pointing out that the paymentof compensation or lump sums stipulated by variousagreements relating to territorial cessions in Europe inthe eighteenth and nineteenth centuries was sometimesintended, according to one writer,277 to replace "in away the system which would impose on the acquiringState the obligation to assume responsibility for part ofthe public debt relating to those territories".

D. Temporary use of property by the predecessor State

(20) It has happened that a predecessor State has beenauthorized to retain temporarily the use of public property,particularly for the purpose of establishing or adminis-tering services to implement a policy of technical orcultural co-operation with the successor State. Obviosuly,the fact that such property remains temporarily at thedisposal of the predecessor State cannot constitute groundsfor formulating a rule contrary to that suggested by theSpecial Rapporteur. It is mainly in the context of culturalco-operation that a number of public educational,research and cultural establishments have thus beenretained provisionally by the predecessor State with theexpress agreement of the successor State. Furthermore,the very existence of such an agreement clearly provesthat the successor State has a right to succeed to suchproperty, without which it would have no capacity toassign the property referred to in the agreement.

(21) On the basis of these commentaries, it would seempossible to accept the rule suggested by the SpecialRapporteur in draft article 34. It should be applicablewithout difficulty in the cases of partial transfer of terri-tory, the newly independent State, and the separationor secession of territory. It is clearly not in doubt in thecase of the disappearance of the predecessor State byabsorption or partition. In that case, the rule appliesby reason of the sheer impossibility of leaving a patrimonyto a State that no longer exists. There remain the casesof the uniting of States and the dissolution of a union ofStates. For the purposes of the latter case it mightappear necessary or useful for the Commission to effectsome slight change or introduce some special provision inthe proposed article. It may in fact be considered normalfor a predecessor State to retain the property that itpossesses in a public establishment in the case of auniting of States. There again, however, it is all a questionof the nature and degree of integration of the States inthe union, and hence of treaty provisions.

Article 35. Case of two or more successor States

Where there are two or more successor States, thepatrimonial rights of the predecessor State in public

276 G. Fouil loux, loc. cit., p . 78.277 J. T. N. Dimitriu, Le regime des biens d'Etat dans les traites

(thesis) (Paris, Les presses modernes, 1927), p. 38.


establishments situated in the transferred territories shallbe apportioned between the successor States in accordancewith the criteria of geographical location, origin of theproperty and the viability of the said establishments, andsubject, where necessary, to equalization payments andoffset.

COMMENTARY

(1) When Algeria became independent, there arose theproblem of disposal of the property of the Mediterranean-Niger Railway, in which several countries were involved.In a Franco-Algerian Protocol it was decided provisionallyat that time that "subject to the changes affecting thepublic domain as a consequence of the transfer of sover-eignty, the Mediterranean-Niger Railway shall continueto be operated as a French public establishment* until31 December 1962".278 Subsequently this establishmentwas dissolved.

(2) It would seem inadvisable to go further than theprovisions of article 35 in defining the way in which thepatrimonial rights which the predecessor State possessesin public establishments should be apportioned betweentwo or more successor States. The proposed criteria forapportionment are such as to cover every eventuality.However, contrary to the possible implications of thecase of the Mediterranean-Niger Railway, it is not forthe predecessor State to apportion the State propertybetween the various successor States. As Max Huberwrites in a book already quoted, 279 under public law,as opposed to civil law, the successor itself gives effectto the succession by taking possession of the propertyinvolved. It is for the successor States to settle the questionamong themselves.280

(3) The future of public establishments and bodies cangive rise to insuperable problems when there are two ormore successor States if the criteria referred to above andthe interests of each party are not carefully taken intoaccount. The apportionment of property may well deprivethe establishment of what is fundamental to its existence,and must therefore also take into account the criterionof viability of the establishment.

(4) As an appendix to these commentaries, it mightperhaps be appropriate to consider, in this context, thecase of two or more third States, which is obviouslydifferent from the case of two or more successor States,dealt with here. The former occurs when, particularlyin the case of decolonization, the predecessor State hasset up a public establishment which is common to two

278 Article 10 of the Protocol of 24 September 1962 (for referencesee above note 274).

279 See above note 109.280 With reference to the apportionment of railway networks

in Central Europe and their administrative and technical reorganiz-ation, see the case of the Barcs-Pakrac Railway (United Nations,Reports of International Arbitral Awards, vol. I l l (United Nationspublication, Sales No. 1949.V.2), p. 1569), the case of the Sopron-Koszeg Railway {ibid., vol. II, United Nations publication, SalesNo. 1949.V.I), p. 961; and Revue generale de droit internationalpublic (Paris), 3rd series, vol. IV, 1930, pp. 324-334), and the caseof the Zeltweg-Wolfsberg and Unterdrauburg-Woellan railways(United Nations, Reports of International Arbitral Awards, vol. I l l(op. cit.), p . 1795.

or more neighbouring countries, but with the headquartersand most of the patrimony or activity situated in theterritory which has become independent. A case in pointis the Djibouti-Addis Ababa Railway. The patrimony ofthe colonial Power in the public establishment must bethe subject of a plan for apportionment which takesinto account the size of the share in the establishment heldby each State. The problem can be solved only throughtreaty provisions stating that the successor State shallgrant to third States compensation in proportion to theirshare, or, better still, providing for economic co-operationbetween all the States involved.

VI. PROVISIONS CONCERNINGTERRITORIAL AUTHORITIES

Article 36. Definition of territorial authorities

Version A:

For the purposes of the present articles, "territorialauthority" means any administrative division of the ter-ritory of a State.

Version B:

For the purposes of the present articles, "territorialauthority" means any administrative division of theterritory of a State which is characterized by its ownterritory, population and administrative authority but doesnot possess international legal personality.

COMMENTARY

(1) The Special Rapporteur suggests two differentversions for the definition of territorial authorities, onebeing an extension of the other. The first version merelydefines them as simple administrative divisions. The secondprovides a somewhat negative definition: anything whichis not a State, although it has a territory, a populationand authority, can only be a territorial authority.

(2) International law does not provide a definition of asubject of municipal law. Territorial authorities, munici-palities, districts, cantons, arrondissements, provinces,regions and even federated States—have legal personality,but only in the internal juridical order of a unitary orfederal State. They are not subjects of international law.

(3) The Special Rapporteur could have referred to themunicipal law of a State in order to define territorialauthorities. However, even if such a definition existedand it was possible and desirable to give a rule of municipallaw the force of a rule of international law, such a solutionwould be unsatisfactory because the nature and roleof territorial authorities and the law governing them varyconsiderably from one State to another.

(4) International lawyers have approached the problemof defining "property of municipalities", and thereforeindirectly that of defining municipalities, in the contextof the law of war, and particularly of the Hague Conven-tions of 1907. They have considered the question of thetreatment of municipal property in the case of foreign


military occupation. However, they differ in their inter-pretation of the meaning to be attributed to the term"property of municipalities".281 Some feel that, under theHague Convention, the same regime was to be applied tothe property of municipalities and that of the State.282

Others considered that the distinction between the propertyof municipalities and State property is not realistic andproposed criteria for determining the patrimony of theState.283 Max Huber, faced with the difficulty of denningthe patrimony of the State and that of what he calls"independent establishments", proposes two criteria:one of form concerning the legal personality of theholder of the patrimony, and the other of substancecovering the purpose for which the patrimony is to beused. If there is any doubt, according to the author,the existence of a legal personality separate from theState must be acknowledged provided that the followingthree elements are present:

(a) A body legally independent of the administrative organs ofthe State;

(b) The capacity to possess rights and property;(c) A different purpose [from that of the State].284

(5) Other writers believe that the regime applicable underthe Hague Convention to "the property of munici-palities"—which allows such property to be assimilatedto private property for the purposes of protection—alsoapplies to the property of all other territorial authorities,the deciding factor being that the property concernedmeets purely local needs.285

These different interpretations, formed in the contextof the law of war, do not allow for a precise definitionof territorial authorities. Consequently, the SpecialRapporteur would prefer one or the other of the twoversions he proposes.

Article 37. Public propertyproper to territorial authorities

Version A

The change of sovereignty shall leave intact the owner-ship of the patrimonial property, rights and interestsproper to territorial authorities.

Version B

The change of sovereignty shall leave intact the ownership of patrimonial property, rights and interests proper toterritorial authorities, which shall be incorporated, in thesame manner as the said authorities themselves, in thejuridical order of the successor State.

3 8 1 See O. Debbasch, L'Occupation militaire — Pouvoirsreconnus aux forces armies hors de leur territoire national (Paris,Librairie g6n£rale de droit et de jurisprudence, 1962), pp. 29-30.

282 W. M. Franklin, "Municipal property under belligerentoccupation", American Journal of International Law (Washington,D.C.), vol. 38, No . 3, July 1944, pp. 304 et seq.

2 8 3 M. Huber, "La proprie'te publique...", Revue generate...(loc. cit.), pp. 680 et seq.

2 8 4 Ibid., p. 682.2 8 5 A. Rolin, Le droit moderne de guerre (Brussels, Dewit, 1920),

vol. I, pp. 540 et seq.

COMMENTARY

(1) In draft article 8 relating to the "General treatmentof public property according to ownership", the SpecialRapporteur has inserted a subparagraph (b) reading thus:"Public property of authorities or bodies other thanStates shall pass within the juridical order of the successorState".

His commentaries on this article, to which he nowrefers the reader, allow him to be brief here.

(2) It will be recalled that a resolution adopted by theInstitute of International Law in 1952, at its Siena session,stated that local corporate bodies retained the right ofownership over their property after territorial changes.286

It is also known that the regime of public propertybelonging to local authorities themselves was the subject,in particular, of a decision by the Franco-Italian Concilia-tion Commission on 9 October 1953.287 The Commissionhad to adjudicate upon the fate of property of the frontiermunicipalities whose areas had been divided by thenew frontier established by the Treaty of Peace withItaly of 10 February 1947.

(3) The agent of the French Government considered thatthe para-statal property transferred to the successorState under paragraph 1, sub-paragraph 2 of annex XIV tothe Treaty included the property of local authorities.In the view of Italy, on the contrary, the paragraphreferred not to a real transfer of property but to theproperty's incorporation in the juridical order of thesuccessor State.

The Commission for its part stated thatapportionment cannot, as a rule, change the nature of existingrights; it is, however understood that those rights will henceforth,if necessary, be exercised in the context of the French municipaljuridical order instead of in the context of the Italian municipaljuridical order, and vice versa. The property which belonged toItalian municipalities themselves shall normally, if it is allotted tothem at the time of the apportionment, be allocated to them infull ownership, even if henceforth the property is situated inFrench territory; similarly, property in Italian territory allottedto municipalities which were formerly Italian and are now Frenchmust remain in the ownership of those municipalities, if it belongedto the municipality itself before the entry into force of the Treatyof Peace.388

(4) However, the Commission based its views on theclear wording of the treaty when it decided that

it is the successor State that shall receive, without payment, notonly the State property but also the para-statal property, includingmunicipal property, within the territories ceded. It is the municipallegislation of the successor State that must determine the fate(final destination and juridical regime) of the property thustransferred, in the new State context into which the property haspassed following the cession of the territory.28*

(5) It is true that this is a treaty provision, which stipu-lates unequivocally that the ownership of the property

2 8 6 See above, para. 7 of the commentary to article 8.287 See above, note 40.2 8 8 United Nations, Reports of International Arbitral Awards,

vol. XIII (United Nations publication, Sales No. 64.V.3),pp. 520-521.

2 8 9 Ibid... pp. 514-515.


of municipalities shall be transferred to the successorState. But the normal solution can only be that in thecase of the transfer of territory the territorial authoritiesretain the right of ownership over their own property,If the successor State subsequently modifies the substanceof that right, it will do so by an act of public power as asovereign State, not as a successor State. That situationfalls outside the scope of the succession of States.

On the other hand, however, succession to the propertyof local authorities raises the problem of succession tolegislation, which will be studied by the InternationalLaw Commission at a later stage. Such property hence-forth is incorporated in a juridical order different fromthe order to which it formerly belonged. Its juridicalregime may therefore remain the same or on the contraryevolve according to the conditions governing the transitionfrom the legislation of the predecessor State to that of thesuccessor State.

(6) One writer has observed thatthe treaties between the Reich and the Protectorate of Bohemia-Moravia, Slovakia and Hungary, all stipulated that the propertyof local authorities, in so far as the territory of the latter was notdivided under the territorial cessions granted by Czechoslovakia,was to remain intact.290

However, despite the exception presented by the divisionof property of local authorities between Romania andBulgaria,291 treaty practice also shows that the right ofownership of territorial authorities is left intact.

Article 38. Property of the Statein territorial authorities

1. The share of the predecessor State in the property,rights and interests of a territorial authority shall betransferred ipso jure to the successor State.

2. Where there are two or more successor States, thesaid share shall be apportioned between them, with dueregard to the viability of the territorial authority, to thegeographical location and origin of the property, andsubject, where necessary, to equalization payments andoffset.

COMMENTARY

(1) Article 38 corresponds to article 34, which concernsproperty of the State in public establishments. In otherwords, it puts forward an identical solution to basicallysimilar concerns. The property owned by the predecessorState in a territorial authority or in an enterprise of theauthority has the same fate as other public propertywhich constitutes the patrimony of the State and musttherefore be transferred to the successor State.

2 9 0 I. Paenson, op. cit., p . 111. Convention of 4 October 1941between the Third Reich and the Protectorate of Bohemia-Moravia(Reichsgesetzblatt, Teil II, Berlin, 24 April 1942, No. 13, p . 195);Agreement of 13 April 1940 between the Third Reich and Slovakia(ibid., 20 August 1941, No. 34, p. 305); Agreement of 21 May 1940between the Third Reich and Hungary (ibid., 6 June 1941, No. 23,p. 199).

2 9 1 Romania ceded property of local authorities to Bulgariaon the same basis as State property, in the Treaty of Craiova of7 September 1940.

It would seem that this rule is valid for all types ofsuccession of States except the uniting of States. In thelatter case, the normal procedure would appear to bethe maintenance of the status quo, unless a contrarydecision is taken by agreement. The Commission mustdecide whether it should deal with this case separatelyor redraft the article in order to take it into account.

(2) If there are two or more successor States, the propertyof the predecessor State in the patrimony of territorialauthorities will be apportioned justly and equitablyamong the successor States. The criteria for apportionment(viability, geographical location, origin of the property,equalization payments and offset) will be defined ingreater detail during the consideration of article 39,which covers the problem of territorial authorities dividedfollowing transfers of territory.

Article 39. Divided territorial authorities

Where the change of sovereignty has the effect ofdividing a territorial authority into two or more partsattached to two or more successor States, the patrimonialproperty, rights and interests of the territorial authorityshall be apportioned equitably between the said parts, dueregard being had to the viability of the latter, to the geo-graphical location and origin of the property, and subject,where necessary, to equalization payments and offset.

COMMENTARY

(1) The Franco-Italian Conciliation Commission basedits decision of 9 October 1953 (which has already 292 beenmentioned on paragraph 18, of annex XIV to the Treatyof Peace with Italy, which provided that the propertyof municipalities whose areas were divided should be"equitably apportioned" among those municipalities.293

This case concerns the apportionment of municipalproperty between a predecessor State and a successorState, not among several successor States. However,the solutions remain the same and the suggested article 39could just as well apply to the case of a change of sover-eignty which would have the effect of dividing a territorialauthority into two or more parts, one part being retainedin the predecessor State, if it still exists, and the otherpart or parts being attached to one more successorStates.

(2) The Conciliation Commission stated that the ap-portionment of such property must be carried out withinthe context of each former municipality. On the basis ofthe text of the Treaty of Peace of 1947, it formulatedcertain principles. Paragraph 18, of annex XIV to theTreaty of Peace provided for apportionment by agreementbetween the successor States. That apportionment mustbe just and equitable. Moreover, it must ensure themaintenance of the municipal services necessary to theinhabitants. It must therefore be carried out according toa principle of utility. The Commission stressed that theinterest of the population must be the governing factor

2 9 2 See above note 40.2 9 3 United Nations, Treaty Series, vol. 49, p. 229.


in the apportionment of the property belonging to thedivided municipalities. The Commission was, of course,alluding to the population of the dismembered municipality,not the population of the municipality whose area hasbeen expended by the annexation.

(3) The Commission gave a definition of the "municipalservices necessary to the inhabitants" referred to inannex XIV, paragraph 18: " . . . a set of facilities whichby their use, their nature or their location, exert a decisiveinfluence on local life *". Moreover, in this case of modifi-cation of the frontier " . . . the essential characteristic ofa public service in this instance is the link between possessionby the municipality of the property in question and thefulfilment, by means of such possession, of the economic,social or family needs of the inhabitants*; the type of useis irrelevant; the degree of directness of the link in questionis also irrelevant.".294

(4) On the basis of this decision by the Franco-ItalianConciliation Commission it can therefore be concludedthat the apportionment of the property of territorialauthorities whose areas are divided must:

(a) Be carried out in a spirit of justice and equity;(b) Take account of the economic, geographical,

social and demographic conditions of those territorialauthorities, as well as of the nature and location of theproperty;

(c) Safeguard the interest of the public service in thewidest sense;

(d) If necessary, include compensation in kind orcash, assessed according to the needs of the population.However, in the present case, the Commission did notdeem it necessary to establish an apportionment account.

(5) The principle of taking account of conditions ofviability was also applied at the time of the division ofthe canton of Basle into two half cantons, pursuantto a decision by the Federal Diet in 1833. The arbitraltribunal presided over by Professor Keller assessed theadministrative and fiscal wealth of the State and ap-portioned it between the two half cantons with dueregard to population density.285

(6) Similarly, examples of conventions which alwaysprovide for a just and equitable apportionment of theproperty of territorial authorities whoses areas havebeen divided are to be found in the book by Paensonalready mentioned.


Article 40. Property of foundations

1. So far as the public policy of the successor Statepermits, the legal status of the property of religious,charitable or cultural foundations shall not be affected bythe change of sovereignty.

2. Where the predecessor State possessed a share inthe patrimony of a foundation, that share shall be trans-ferred to the successor State, or where there are two ormore successor States, apportioned equitably between them.

COMMENTARY

(1) The property of religious, charitable, cultural orscientific foundations has been the subject of specialprovisions in many agreements relating to State succession,as well as of a relatively large number of judicial decisions.Certain principles can therefore be derived from interna-tional practice and from judicial practice.

The article suggested above raises three aspects of thequestion of foundations: (i) respect for private founda-tions which in principle retain their property without anychange; (ii) possible involvement of the concept ofpublic policy, which may lead the successor State toinfringe upon respect for the status quo; and (iii) transferto the successor State or States of the property owned bythe predecessor State in the patrimony of a foundation.

A. Patrimonial situation unchanged

(2) The Austro-Bavarian Convention of 3 June 1814,296

the Treaty of 20 May 1815 between the King of Sardinia,Austria, England, Russia, Prussia and France,297 theTreaty of 18 May 1815 between Prussia and Saxony,298

and the Act of the Congress of Vienna a99 provided thatthe foundations or communities, corporations and relig-ious or public educational establishments in the provincesand districts ceded should retain their property as wellas the income they possessed in accordance with the actof foundation or with acquisitions legally made by them.

Article XV of the Additional Treaty relating to Cracow,signed at Vienna on 21 April-3 May 1815 by Austria,Prussia and Russia read:

The Cracow Academy is confirmed in its privileges and in theownership of the buildings and the library appertaining to it, aswell as of the amounts it owns in land or in mortgaged capital.300

It would be possible to cite in this manner a multitudeof diplomatic texts of the same type, showing thatterritorial changes have had no effect on the situationwith regard to the patrimony of foundations.

(3) Property known as "dedicated" in Moslem law,301

which is withheld from trade and from the process ofinheritance, and thus becomes inalienable and impre-scriptible on religious grounds, is assigned by its owners

294 United Nations, Reports of International Arbitral Awards,vol. XIII (op. cit.), p . 520.

2 9 5 P. Guggenheim, op. cit., p . 467.

2 9 5 Article IX of the Convention signed at Paris on 3 June 1814between Austria and Bavaria.G.F. de Martens, ed., Nouveau Recueilgeneral de traites (Gottingen, Dieterich, 1887), vol. II (1814-1815)(reprint), p . 18.

297 Annex to article VII and annex to article IV of the Treatyof 20 May 1815 (ibid., p. 298).

2 9 8 Article XVI of the Treaty of 18 May 1815 (ibid., p . 272).2 9 9 Article XXI of the Act of the Congress of Vienna of 9 June

1815 (ibid., p. 379).3 0 0 Ibid., p . 256.3 0 1 The property known as "haboi/s" or "waqf" (or the Arabic

plural of this word, "awqa~f", transcribed into French in variousforms, in particular as "vakoiif" in a number of diplomatic texts).See Yearbook...1970, vol. II , p . 138, document A/CN.4/226,

(Continued on next page.)


to a religious, social assistance, charitable or otherwork or purpose of public utility.

Under article XII of the Treaty of Constantinoplebetween Turkey and Bulgaria the problem of suchproperty was settled by maintaining the status quo:

The Mustesna, Mulhaka, Idjaretein, Moukataa and Idjarei-vahide vakoufs as well as vakouf tithes in the ceded territories, asspecified under current Ottoman law, shall be respected *.

They shall be managed by duly authorized persons.The regimes to which they are subject may be modified only if

fair prior compensation is paid.The rights of the religious and benevolent establishments of the

Ottoman Empire to vakouf income in the ceded territories, derivedfrom idjarei-vahide, moukataa, miscellaneous titles and the equiv-alent value of vakouf and other tithes, on vakoufs whether built ornot, shall be respected *.302

(4) When France annexed Nice and Savoy, article 7 ofthe Franco-Sardinian Convention of 23 August I860,303

in principle settled the problem of the property of churchesand religious congregations by maintaining the statusquo. However, difficulties arose, especially after thepassage of the French Act of 9 December 1905 separatingchurch and State. Even after the adoption of this Act,however, France retained the system of scholarshipsand cartelli. The church scholarships were provided forpoor schoolchildren, and French legislation agreed tocontinue payment of them.304 The French Governmentalso continued to pay ecclesiastical stipends, in particularthe cartelli, which were a perpetual annuity paid regularlyby the Sardinian Government to ministers of religion,despite the affirmation of the Act of Separation of 1905that "the Republic. . . shall not give financial supportto any religion".305

(5) Similarly, we read in the Convention between theUnited States and Denmark providing for the cessionof the Danish West Indies that "The congregationsbelonging to the Danish national Church shall retainthe undisturbed use of the churches which are now used

(Foot-note 301 continued)

part two, commentary to article 1 and notes 22 and 23. This typeof property was discussed a great deal following the various dis-memberments of the Ottoman Empire, the mandates and Capitula-tions in the Middle East, and the colonization or establishmentof protectorates in North Africa with regard to France or Italy.

302 G. F . de Martens, ed. Nouveau Recueil general de traites(Leipzig, Weicher, 1915), 3rd series, vol. VIII, p. 78. Article VIIIof annex 2 to the same treaty gives more details on the managementof such property by the Moslem community, on cemeteries andmosques and on expropriation procedures in cases of overridingnecessity and in the event of demolition. See also article XII ofthe Greco-Turkish Convention signed on 1-14 November 1913,which respects the vakouf property of certain "tekkes, mosques,madrasahs, schools, hospitals, and other religious or benevolentinstitutions", but applies various restrictions {ibid., pp. 97-98).

303 G. F . de Martens, ed., Nouveau Recueil general de traites(Gottingen, Dieterich, 1869), vol. XVII, part II, p. 22.

304 Cf. Ch. Rousseau (op. cit., p. 169), who quotes the concordantrulings of the Court of Cassation (22 July 1914) and the Councilof State (France, Conseil d'Etat, 19 July 1916, "Bourse des pauvresecoliers d'Annecy", Recueil des arrets du Conseil d'Etat (Paris,1916), p. 188).

305 France, Bulletin des bis de la Republique francaise (Paris,1905)1 Xl l th series* vol. 71, No. 2663, p. 1697. See also Ch. Rousseau,op. cit., p . 169.

by them, together with the personages appertainingthereunto and other appurtenances, including the fundsallotted to the churches."306

(6) The Franco-Indian Agreement of 21 October 1954concerning the transfer of the French Establishmentsin India to the Indian Union 307 affords another example.Article IX of the Agreement reads :

Properties pertaining to worship or in use for cultural purposesshall be in the ownership of the missions or of the institutionsentrusted by the French regulations at present in force with themanagement of those properties.

The Government of India agree to recognise as legal corporatebodies, with all due rights attached to such a qualification, the"Conseils de fabrique" and the administration boards of theMissions.

Article 32 of the same Agreement adds. . . Properties which are at present in the possession of the

religious authorities shall be retained by them and the Govern-ment of India agree, whenever necessary, to convey the titles tothem.

(7) The Treaty of Peace with Italy of 10 February 1947, forits part, provided that property belonging to Italianreligious bodies or private charitable institutions wouldbe exempt from any confiscation measures.308

(8) In the case Bolshanin et al. v. Zlobin et ah, the DistrictCourt of Alaska ruled in favour of the maintenance of theproperty rights of religious foundations. Members of theRussian Church at Sitka, Alaska, claimed ownership ofthe church buildings and lands by virtue of the 1867Treaty by which Russia ceded Alaska to the UnitedStates. Article II of this treaty provided that "the churcheswhich have been built in the ceded territory by the RussianGovernment, shall remain the property of such membersof the Greek Oriental Church resident in the territory,as may choose to worship therein". The defendants,the priest and the Metropolitan of the Greco-RussianChurch in America referred to a patent granted them bythe United States Government in 1914. The Courtjudged that private titles granted by a former sovereignwere not affected by the change in sovereignty that hadtaken place.309

(9) In the Peter Pazmany University case, adjudicatedby the P.C.I.J., the same principles of respect for theproperty of foundations were applied.310 Article 250 ofthe Treaty of Trianon followed the same direction,providing that " . . . the property, rights and interestsof Hungarian nationals or companies controlled by them

308 End of article 2 of the Convention of 4 August 1916 (forreference, see above, note 81).

307 For reference, see above, note 115.308 Article 79, paragraph 6 (b) of the Treaty.306 Case of Bolshanin et al. v. Zlobin et al., United States District

Court of Alaska, 27 May 1948 (American Journal of InternationalLaw, 1948 (Washington, D.C.), vol. 42, No. 3 (July 1948), p. 735,quoted in Yearbook...l963, vol. II, p. 124, document A/CN.4/157,paras. 255-257.

310 Judgement of 15 December 1933, "Appeal from a judgementof the Hungaro-Czechoslovak Mixed Arbitral Tribunal (ThePeter P&zmany University v. the State of Czechoslovakia), inP.C.I.J., Series A/B, No. 61, pp. 208-262. See Yearbook...l970,vol. II, p. 140, document A/CN.4/226, part two, paras. 27-30 ofthe commentary to article 1.


situated in territories which formed part of the formerAustro-Hungarian Monarchy shall not be subject toretention or liquidation . . . ".311

The Hungaro-Czechoslovak Mixed Arbitral Tribunal,in a judgement rendered on 3 February 1933, had statedthat under the terms of article 250, quoted above, theCzechoslovak State should restore certain immovableproperty to the Peter Pazmany University at Budapest.Czechoslovakia appealed unsuccessfully to the P.C.I.J.,which confirmed the first judgement.

The property in question had been donated to theUniversity in 1775 by Queen Maria-Theresa so that itmight "own, have and hold it as a perpetual endowmentand foundation".312 The donation was confirmed whenthe University was transferred to Buda and then to Pestin 1804, and was converted into a title of ownership.Another piece of land, the subject of the litigation, hadbeen purchased by the University in 1914. In 1918,Czechoslovak troops invaded northern Hungary, andthe University property situated in Slovakia was seizedby the Czechoslovak State. It was placed under theadministration of the Central Commission for theProperty of the Roman Catholic Church in Slovakia.The University then appealed to the Hungaro-Czechoslo-vak Mixed Arbitral Tribunal for restoration of its prop-erty. The Tribunal, confirmed in its judgement by the Per-manent Court of International Justice, upheld theUniversity's claim.313

(10) A case adjudicated by the Paris Appeals Court,concerning the "Waqf Abou Mediene" foundation,relates to the problem of what should become of theproperty of religious foundations. The Court ruled that

the commitment entered into by the French State with an Israelilawyer to protect a Moslem private foundation established forMoslem pilgrims from the Maghreb was contracted neither inthe name of Algeria nor in the name of an Algerian publicestablishment, and is therefore not transferred to the AlgerianState by article 18 of the Franco-Algerian Declaration of Principlesconcerning Economic and Financial Co-operation of 19 March1962.311

311 British and Foreign State Papers, 1920, vol. 113 (op. cit.),p. 607.

312 P.C.I.J., Series A/B, N o . 61 , p . 223.313 Czechoslovakia had unsuccessfully invoked the provisions

of the sixth paragraph of article 249 of the Treaty of Trianon,whereby "Legacies, donat ions and funds given or established inthe former Kingdom of Hungary for the benefit of nationals ofthat Kingdom shall be placed by Hungary , so far as the funds inquestion are in her territory, a t the disposal of the Allied orAssociated Power of which the persons in question are now, o rbecome, under the provisions of the present Treaty.. . nat ionals"(British and Foreign State Papers, 1920, vol. 113 (op. cit.), p . 607).Czechoslovakia also unsuccessfully invoked before the Cour t theParis Protocol of 26 April 1930 (G. F . de Martens , ed., NouveauRecueil general de traites (Leipzig, Buske, 1934), 3rd Series,vol. X X I X , p . 356), which specified that "Each of the two contractingStates shall retain the legacies, donat ions and foundations of everykind existing in its terri tory". The Cour t could not have decidedotherwise, since the Protocol stated that it should " in no wayaffect the case which has been brought by the University of Buda-pest before the Hungaro-Czechoslovak Mixed Arbitral Tr ibunal" .

314 Paris Appeals Court , Judgement of 19 February 1968,Journal du droit international (Paris), 95th year, N o . 2, April-June 1968, p . 336.

The Court based its reasoning on the fact that, on theone hand, the foundation concerned was not Algerianbut multinational, and on the other hand that what wasinvolved was not a public establishment reverting toAlgeria but a non-transferable private fund.

B. Exceptions to the principle

(11) The final decision of the Special Commission of theGerman Empire dated 25 February 1803, concerning thesettlement of compensation established under the peaceof Lundville provided, in paragraphs 35 and 37, that theproperty of certain chapters, abbeys and convents shouldbe placed "at the free and complete disposal of the territorialprinces concerned * for expenses connected with worship,instruction and other facilities for the public use andalso to ease their finances . . . " and that "the propertyand income belonging to hospitals, church councils,universities, colleges and other religious foundations.. .shall be placed at the disposal of the rulers concerned *".316

But this is almost certainly explained by the survival,here and there, of mediaeval or feudal law which providedfor the free disposal of ecclesiastical property in Europe.

(12) The problem of the property belonging to thechurches of Savoy after the annexation of this formerlySardinian province by France in 1860 was dealt within a decision by the Conseil d'Etat in which this highadministrative court of France rejected the principleof non-retroactivity of the law and made the churchesof Savoy subject to the same juridical regime as the otherchurches of France.316 These churches belonged to themunicipalities, which thus acquired the churches ofSavoy and their appurtenances which, according toSardinian law, belonged to the church councils andparochial benefices and normally could be transferredto the municipalities only by expropriation for publicpurposes.317 Subsequently the "ecclesiastical corporations"(chapters, canonries, establishments for public worship,lay chaplaincies and hospital institutions) were eitherabolished or prevented from enjoying the property statusthey had had prior to the annexation of Savoy.318

(13) But the most celebrated case was the case of thehospitals of the English-speaking Protestant missionsin Madagascar.319 The case known as the Soavinandrianahospital case raised the question of general appropriation

315 G. F . de Martens , ed., Recueil desprincipaux traites, 2nd ed.,revised and augmented (Gott ingen, Dieterich, 1831), vol. VII ,p . 499.

316 Decision of the Conseil d'Etat dated 24 December 1896(France, Journal officiel de la Republique francaise, 29 January 1897).

317 See F . Grivaz, "La question des eglises de Savoie et la thdoriedes droits acquis, Revue generate de droit international public (Paris),vol. IV (1897), pp. 645-680. See also Louis Trotabas , Le droit publicdans I'annexation et le respect des droits acquis (thesis), Paris,1921, p p . 87-147.

318 See Ch. Rousseau, op. cit., p . 168 and references to theopinions and judgements of the Conseil d'Etat.

319 See Yearbook...l970, vol. I I , pp . 137-138, document A /CN.4 /226, par t two, paragraph 18 of the commentary to article 1. T h ebibliographical references given should be supplemented by theaddition of D . Bardonnet 's well documented work, published laterand entitled La succession d'Etats a Madagascar... (op. cit.),passim, and particularly pp . 178-205.


of religious edifices by the successor State. The hospitalhad been built by British missionaries on the basis of adeed of concession by Queen Ranavalo, who was entitledto retain ownership of the entire property on the dateof cessation of the hospital's activities. When the Frenchprotectorate was replaced by annexation in 1896, theconcession was terminated by General Gallieni, whorequisitioned the hospital. The British Law Officers ofthe Crown gave two opinions, on 22 March 1897 and2 February 1898, criticizing the French position, whichremained unchanged. The two Parliaments, the twoGovernments and the English and Franco-Malagasycourts hotly debated the issue, which culminated in theaward of a very meagre amount of compensation to thedispossessed missions.

(14) The status of the "habous property" and the propertyof various religious foundations in Algeria was notrespected by the successor State in 1830.320 Similarproperty was treated in the same way when Libya wasannexed by Italy. The Libyan religious foundationsrecovered their property in 1950 and the buildings usedin connexion with non-Moslem public worship weretransferred by Italy to the respective religious communities.

(15) Similarly, the various treaties of cession of OttomanEmpire territory, particularly to Bulgaria and Greecein the nineteenth or early twentieth century did notalway respect the nature of the habous property orawqdf as understood by the municipal law of the cedingState.321 Thus the Protocol between Greece and Turkeysigned at the Conference held in London on 16 June1830 322 abolished the awqdf without compensation inthe territories occupied by the Greek army and transferredto Greece the property of the State and Moslem founda-tions in the other territories which were to pass to Greece.Only the privately-owned awqdf were respected.323

C. Property of the State in foundations

(16) There are semi-public foundations of which theState owns a share of the capital. These are usuallycultural or scientific foundations or schools and institutes.According to paragraph 2 of article 40, the share of thepredecessor State is transferred to the successor State orStates. There have been cases, however, in which thepredecessor State kept a share of the property of thesefoundations. For example when Indo-China becameindependent, the property belonging to the Ecole fran-caise d'ExtrSme-Orient became inalienable commonproperty of the three associated States and France. The

320 See Yearbook...l970, vol. I I , p. 138, document A/CN.4/226,part two, paragraph 19 of the commentary to article 1.

321 See M. Costes, Des cessions de terrltoires envisagees dans leurprincipe et dans leurs effets relatifs au changement de souveraineteet de nationalite (thesis) (Paris, Riviere, 1914), pp. 77-91.

322 British and Foreign State Papers, 1830-1831 (London,Ridgway, 1830), vol. 18, p . 600.

323 See also the Greek-Turkish Convention of 2 July 1881concerning the final demarcation of the frontiers between the twocountries (G. F . de Martens, ed., Nouveau Recueil general detraites (Gottingen, Dieterich, 1883), 2nd series, vol. VIII, p. 2)which left the successor State free to determine, in accordancewith its laws and the requirements of public policy, the regulationsgoverning the few remaining awqdf, the others having been abolished.

same was true of the property belonging to the PasteurInstitute in Indo-China.

(17) Mention may be made in passing—although thishas nothing to do with property of the State in foun-dations—of two cases where the predecessor State keptthe assets of such foundations either temporarily orpermanently. The violent conditions in which Israel wasestablished led the United Kingdom, which was themandatory Power in Palestine, to take such measures.Consequently, the Rockefeller Endowment Found,intended for the Archaeological Museum of Palestine,remained in the possession of the United KingdomGovernment pending a decision by the Foreign Office.324

An agreement between Jordan and the United Kingdomalso allowed half of the assets of a foundation to beunblocked for the benefit of Jordan after several years.325

Article 7 of this Agreement provided thatThe Government of the United Kingdom shall, within the terms

of the bequest of the late Sir Ellis Khadoorie, make available tothe Government of Jordan one-half of the balance of that bequest,which balance amounts to £86,237, and one-half of the accruedinterest on the said balance, to be used for the purposes of theKhadoorie Agricultural School in Jordan.328

D. The property of the Moslem Instituteand of the Mosque in Paris

(18) As a sequel to these developments, it may be usefulto provide some information concerning the case of thefoundation known as the "Society of the Habous andHoly Places of Islam", which was established at Algiersbefore Algeria became independent and had built andadministered a Moslem Institute and Mosque in Paris.This is a case of property belonging to a religious foun-dation and situated outside the territory affected by thechange of sovereignty.

(19) The "Society of the Habous and Holy Places ofIslam" was established at Algiers on 16 February 1917 bya deed deposited with the hanifite cadi of Algiers. TheSociety, whose headquarters were situated in the GreatMosque at Algiers, had decided to purchase two buildingsat Mecca and Medina for the benefit of needy Northand West African pilgrims.

On 24 December 1921 the Society was converted intoan association under French law subject to the FrenchAct of 1901 on associations, and registered as such withthe Prefecture of Algiers. The Society then decided tobuild and establish a Mosque and a Moslem Institutein Paris and, for that purpose, received a sum of500,000 francs from the French Government, a grantfrom the Municipal Council of Paris for the purchase

324 Cf. I. Paenson, op. cit., p . 74.325 Agreement between the Government of the United Kingdom

of Great Britain and Northern Irland and the Govemement of theHashemite Kingdom of Jordan for the settlement of financialmatters outstanding as a result of the termination of the mandatefor Palestine, signed at Amman on 1 M a y 1951 (United Nations,Treaty Series, vol. 117, p . 19).

326 According to an agreement of 13 March 1950 between theUnited Kingdom and Israel, the other half of the Khadooriebequest was handed over to Israel.


of land and, from Algeria, Morocco, Tunisia and otherAfrican countries annual subsidies of which that fromAlgeria was by far the most regularly paid.

(20) After the establishment of the Mosque and theMoslem Institute, an Algerian was always appointedby the Administrative Board of the Society to representit in Paris, and to be in charge of the administration ofthe two Parisian institutions. But during the Algerianwar, Mr. Guy Mollet, the Prime Minister, replaced theAdministrative Board of the Society and, by a decree of18 May 1957, appointed an Algerian—in the purelyethnic sense of the word—as director of the Mosque andthe Institute. On 16 January 1958, this director had theSociety's statutes revised, thus annulling the constituentact of the foundation and, two weeks before the cease-fire in Algeria, had the Society's headquarters transferredfrom Algiers to Paris on 2 March 1962.

(21) On 13 February 1963 the Administrative Tribunal ofParis, on the grounds of irregularity, annulled Mr. GuyMollet's decision concerning the appointment of thedirector of the Mosque and the Institute. The Conseild'Etat, by a decision dated 8 November 1963,327 confirmedthe unlawful nature of the Prime Minister's action.However the director continued to head the two religiousinstitutions, availing himself of a decision allegedlyadopted by a "general meeting" of the Society after he hadamended the Society's statutes.

327 France, Conseil d'Etat, Recueil des decisions du Conseild'Etat (Paris), November-December 1963, para. 378.

(22) Immediately after Algeria acquired independence,the French Government, to which the matter had beenreferred by the Algerian authorities, informed thoseauthorities that, in its opinion, the Society could nolonger claim to have a legal existence and that its property,having escheated, should be subject to jus soli. The Alge-rian Government, on the other hand, contended that theSociety still existed at Algiers and that its rights in respectof the Mosque and the Institute had not been extinguished.

The French Government then proposed, in 1963, thatthe property of the Society, which in its opinion wasdefunct, should be handed over to a new association tobe established at Algiers with Moroccan and Tunisianparticipation.

(23) Subsequently the Seine Court of First Instance, bya decision handed down on 24 May 1967, ruled that(a) the Society was a foreign one and that, according toarticle 21 of the 1901 Act on associations, its headquarterswere still at Algiers, and (b) that the Society had notacquired, from the Algerian Government, the capacityto be a party to legal proceedings.

(24) Consultations are still in progress between theFrench Government on the one hand, and the Algerian,Tunisian and Moroccan Governments on the other hand,with a view to settling the matter definitively by relievingthe present director of his duties, since he was appointedunder a decree considered to be irregular, and handingover the property of the two Parisian institutions to theMaghrebian authorities.

QUESTION OF TREATIES CONCLUDED BETWEEN STATES AND INTERNATIONALORGANIZATIONS OR BETWEEN TWO OR MORE

INTERNATIONAL ORGANIZATIONS

[Agenda item 4]

DOCUMENT A/CN.4/271

Second report on the question of treaties concluded between States and international organizationsor between two or more international organizations, by Mr. Paul Reuter, Special Rapporteur

[Original text: French][15 May 1972]

CONTENTSPage

Abbreviations 76

Paragraphs

INTRODUCTION 1-6 76

PART ONE. QUESTIONS OF METHOD 7-21 77

A. Preparation of a set of draft articles as the final objective 8 77

B. Adherence to the framework of the 1969 Vienna Convention on the Law of Treaties . . . . 9-12 77

C. Scope of the first questionnaire addressed to international organizations 13-15 78

D. The difficulty of principle 16-21 78

PART TWO. SOME PROBLEMS OF SUBSTANCE 22-107 79

A. Part I (Introduction) of the 1969 Convention and the concept of "party" 23-33 79

B. Part II (Conclusion and entry into force of treaties) of the 1969 Convention 34-77 81

1. Form of agreements 35-37 81

2. Capacity of international organizations to conclude treaties 38-52 81

3. Representation 53-77 83

(a) Determination and proof of capacity to represent an international organization at anystage in the conclusion of a treaty 56-64 84

(6) Agreements concluded by subsidiary organs 65-68 85(c) Participation of an international organization in a treaty on behalf of a territory it

represents 69-77 86

C. Part III (Observance, application and interpretation of treaties) of the 1969 Convention . . . 78-107 88

1. Agreements concluded with a view to applying other agreements 79-82 88

2. "Internal agreements" with respect to an international organization 83-88 88

3. Effects of agreements with respect to third parties 89-107 89

(a) Is the international organization a third party in relation to certain treaties betweenStates? 92-98 90

(b) Are States members of an international organization third parties in relation to agree-ments concluded by that organization ? 99-107 91

ANNEX. QUESTIONNAIRE PREPARED BY THE SPECIAL RAPPORTEUR 93

75


ABBREVIATIONS

EEC European Economic CommunityFAO Food and Agriculture Organization of the United NationsIAEA International Atomic Energy AgencyIBRD International Bank for Reconstruction and DevelopmentI.C.J. International Court of JusticeI.C.J. Pleadings I.C.J., Pleadings, Oral Arguments, DocumentsI.C.J. Reports I.C.J., Reports of Judgments, Advisory Opinions and OrdersIDA International Development AssociationIFC International Finance CorporationILO International Labour OrganisationIMCO Inter-Governmental Maritime Consultative OrganizationITU International Telecommunication UnionUNESCO United Nations Educational, Scientific and Cultural OrganizationWHO World Health OrganizationWIPO World Intellectual Property OrganizationWMO World Meteorological Organization

Introduction

1. In a first report1 dated 3 April 1972, the SpecialRapporteur described to the Commission how the subjecthad developed historically, and he then attempted tooutline certain approaches which, in his view, should beadopted from the outset. He also raised a number ofquestions on which he wished to know the Commission'sfeelings.

Owing to the Commission's very heavy agenda andthe priorities it was obliged to observe, the first reportwas not considered at its twenty-fifth session (2 May-7 July 1972).

2. This second report is designed to supplement thepreceding one, to make it easier to consider by summingup its essential features, and particularly to incorporatenew elements2—primarily, the substantial informationreceived in the meantime from international organiz-ations.

It will be recalled that at its twenty-third session theCommission, when appointing a Special Rapporteur,stated specifically that the documents to be prepared forthe proposed study were to include "an account of therelevant practice of the United Nations and the principalinternational organizations",3 the latter being defined

1 Yearbook... 1972, vol. II, p. 171, document A/CN.4/258.2 Among the various publications on this subject, particular

mention must be made of the provisional report by R. J. Dupuy,L'application des regies de droit international general des traitesaux accords conclus par les organisations internationales (Geneva,Imprimerie de la Tribune de Geneve, 1972), submitted to theInstitute of International Law.

3 Yearbook... 1971, vol. II (Part One), p. 348, documentA/8410/Rev.l, para. 118 (6).

"for the time being" and "for the purposes of the presenttopic" as "those which were invited to send observers tothe Vienna Conference on the Law of Treaties".4

3. In pursuance of this decision, the Special Rapporteurprepared a questionnaire which the Secretary-Generaladdressed to the organizations concerned, stating in hiscovering letter that, as the consultation was merely of apreliminary nature, the replies would for the moment becommunicated only to the Special Rapporteur. TheSecretary-General added: "Once the outline of the accountrequested by the Commission has been more clearlydefined, your organization will again be consulted andgiven an opportunity of presenting a final reply, whichwill be published in the account itself".

4. The organizations consulted submitted replies ofvarying length, depending on the extent of the responsewhich the questions elicited in the light of each organiz-ation's own experience and particular concerns; but alltheir communications are of the greatest interest. Any-one who knows how much work the secretariats ofinternational organizations are required to undertakewill appreciate the true value of the effort they have made,and the Special Rapporteur wishes to express his grati-tude for the invaluable assistance they have given him.These replies will have to be studied carefully andconsidered at length but, even before they help to leadthe work of the Special Rapporteur to its conclusion,they can already be used to illustrate certain generalconsiderations which must be submitted to the Com-mission.

4 Yearbook... 1970, vol. II, p. 310, document A/8010/Rev.l,para. 89.

Question of treaties concluded between States and International Organizations 77

5. The Special Rapporteur will in this connexion abideby the terms and undertakings entered into with respectto the organizations—that is to say, the replies will notfor the time being be published; only the questionnaireto which the organizations have replied will be annexedto this report. The substance of the replies will bepresented only in general terms, without reference to theposition adopted by individual organizations, except incases where the representatives of an organization havemade its position known in circumstances unconnectedwith the circulation of this questionnaire.

6. To simplify the Commission's work, the SpecialRapporteur will refer again—briefly but, he hopes, moreprecisely and categorically—to some of the approachesproposed in his first report, and he will dwell at somelength on the new information received as a result of theco-operation of international secretariats. The followingobservations will deal first with questions of method,which still appear to be of exceptional importance in thisparticular case, and secondly with some of the mostimportant questions of substance.

Part One

Questions of method

7. The task which now seems to be incumbent on theSpecial Rapporteur can be presented under four headings.

A. PREPARATION OF A SET OF DRAFT ARTICLESAS THE FINAL OBJECTIVE

8. The final objective which the Special Rapporteur issetting himself for his work is the preparation of a set ofdraft articles, since it seems that this method, which isnow followed by all special rapporteurs, is the only onewhich in itself incorporates the exactitude and theprecision which should characterize all the Commission'swork; it is indeed essential, unless one rules out thepossibility that the work of the Special Rapporteur isultimately to be reflected in the form of a formal con-vention. This last remark would be superfluous, were itnot at the same time essential to reserve entirely thequestion of the final legal form to be given to the work,on account of a certain difficulty which is inherent in thesubject. The difficulty resides in the fact that the inter-national organizations concerned will in some way oranother have to be associated with the undertaking,particularly in order to bring it to its conclusion, and theparticipation of international organizations in the con-clusion of a convention on treaties of this kind raisesthe very problems of substance which such a conventionwould be designed to solve, since the participation ofinternational organizations in a general multilateralconvention gives rise to certain objections. Possiblesolutions other than a general convention are a declar-ation by the General Assembly, or resort to machinerysimilar to that evolved for the 1947 Convention on thePrivileges and Immunities of the Specialized Agencies;5

we shall return to some of these points later.

B. ADHERENCE TO THE FRAMEWORK OF THE 1969 VIENNACONVENTION ON THE LAW OF TREATIES

9. In the work of the Sub-Committee which precededthe appointment of a Special Rapporteur,6 it was agreedthat the objective to be attained was to extend or, failingthat, to adapt the articles of the Vienna Convention onthe Law of Treaties 7 to the agreements of internationalorganizations, while adhering faithfully to the spirit,forms and structure of that Convention. This approachhas one important negative effect: in principle, mattersor questions which, in regard to treaties between States,the 1969 Convention deliberately left aside must not beincluded. Hence, in particular, it would seem necessary—apart from making one or two observations—to leaveaside both the definition and the regime of unwrittenagreements.8

10. However, this position of principle has many otherbasic consequences. For instance, in regard to the scopeof the draft articles to be prepared, it would be necessaryat least at the outset to use a definition of "internationalorganization" identical to that given in the 1969 Con-vention, since that Convention already contains certainrules concerning international organizations.0 Assumingfor a moment that a set of draft articles on the agree-ments of international organizations was based on a morelimited definition of the organizations to which itsprovisions related, the result would be a three-fold legalregime applicable to the agreements of organizations—•the regime of the 1969 Convention, the regime of thedraft articles and the regime deriving from custom andgeneral principles of law. That would defeat all the pur-poses of codification, by introducing complications anduncertainties into the existing situation.

11. Another consequence of abiding by the frameworkof the Convention—a consequence to which furtherreference will be made later, but which is importantenough to be mentioned more than once—is that theprovisions of the future draft articles would necessarilybe very general. If, in regard to international organiz-ations, one starts with the very wide and even indeter-minate definition which appears in the 1969 Convention,it follows that the proposed rules must be applicable toall international organizations and they are thereforebound to be very general.

12. Finally, the Special Rapporteur will have to go intogreater detail and consider the articles of the 1969 Con-vention one by one in order to determine which articlescan be applied without adaptation to the agreements ofinternational organizations, and to propose the necessaryamendments to the other articles.

6 See Yearbook... 1972, vol. II, pp. 187 and 192 et seq., documentA/CN.4/258, paras. 52 and 68 et seq.

6 Yearbook ... 1971, vol. II (Part One), pp. 347-348, documentA/8410/Rev.l, chap. IV, annex.

7 For the text of the Convention, see Official Records of theUnited Nations Conference on the Law of Treaties, Documents ofthe Conference (United Nations publication, Sales No. E.7O.V.5),p. 289. The Convention will be referred to hereafter as "the 1969Convention".

8 See para. 37 below.9 Yearbook . . . 1972, pp. 181, 186-187 and 191 et seq., document

A/CN.4/258, paras. 36, 51 and 65 et seq.


C. SCOPE OF THE FIRST QUESTIONNAIREADDRESSED TO INTERNATIONAL ORGANIZATIONS

13. This last remark helps to illustrate the scope of thequestionnaire which was addressed to internationalorganizations on the understanding referred to above.

14. This very close adherence to the text and frameworkof the 1969 Convention is based on the idea that there isnot any single problem which is both important andlends itself to a general solution common to all inter-national organizations and, at the same time, lies outsidethe scope of the provisions of the 1969 Convention. Thisidea may be correct, but it needs to be verified by counter-proof. It is in fact essential to place oneself outside thecarefully elaborated framework of the Convention, andtry to discover whether any important point lendingitself to codification has been left aside.

15. It was with this in mind that a number of questions,deliberately limited to a few carefully chosen points, wereaddressed to international organizations. As the SpecialRapporteur conceived them, they were designed merelyto ascertain opinions, and nothing more. Nothing couldbe further from his intentions than that they should bethought to represent an attempt to extend the scope ofcodification, or that it should be imagined that draftarticles on the subjects referred to in the questions are tobe submitted immediately. The Special Rapporteur hadno such far-reaching ambitions on that score; he washoping above all to obtain confirmation of certain viewsand to determine more exactly the limits of his under-taking. By the end of this report it will be clear that manyquestions are not yet ripe for codification, either becausethe practice has not yet been established or because theproblems concerned have not yet been encountered inpractice, or even because the solutions for which theycall are too varied to lend themselves to codification;it is this last point that we shall now consider.

D. THE DIFFICULTY OF PRINCIPLE

16. As has been stated previously,10 the internationalorganizations followed with some concern the discussionsleading to the 1969 Convention, since the texts adoptedseemed to touch upon the activities of internationalorganizations in regard to agreements—both agreementsconcluded by organizations and agreements concludedwithin them or under their auspices. Although the scopeof the Convention was finally somewhat limited in thisrespect, and guarantees were provided for internationalorganizations, it is understandable that misgivings ofthis kind should still be felt concerning the preparationof a draft which deals specifically with agreementsconcluded by international organizations. The organiz-ations consulted at the request of the Special Rapporteurreplied very willingly to the questionnaire addressed tothem, and they are all the more deserving of gratitude inthat some of the questions related, almost indiscreetly, topractices or positions on which they had not yet adopteda definite line of conduct.

17. The Special Rapporteur has always been awarethat, apart from particular aspects affecting a specificissue, the preparation of draft articles on the agreementsof international organizations raises a basic question ofprinciple. Hitherto, international organizations, actingprincipally through their secretariats and in most caseswith no general texts or precedents to use as a basis,have—slowly and unobtrusively, by the development ofpractice alone—built up a corpus of solutions adjustedto the individual needs and character of each organiz-ation. The codification now envisaged may affect thisspontaneous process by introducing into the regime of theagreements of international organizations two newfeatures: stability and generality.

18. It was explained at length in the first report u thatalthough the 1969 Convention was applicable to theconstituent, treaties of an international organization andto treaties adopted within an international organization,it was so applicable "without prejudice to any relevantrules of the organization" (article 5), and that some doubthad arisen as to whether the relevant rules of an organiz-ation could also include practice at a stage when practicecould not yet be considered as constituting a rule of law.What is certain in any case is that codification, if it is toretain its essential meaning, must have a stabilizing effect,at least for a certain time, on the development of practiceand the origin of custom. Codification would be in-comprehensible if it were completely deprived of anylegal effect.

19. But codification also has a generalizing and stan-dardizing effect. Each organization, instead of establishingan individual regime for its own use, will be subject to ageneral rule formulating an average solution applicableto all organizations. Hence there is a fear that the auton-omy hitherto enjoyed by each organization may be lost.Occasionally, even, it is thought and even written thatthe existence of a law common to all organizations—a"law of international organizations"—would be difficultto imagine and even impossible to achieve.

It was pointed out earlier 12 that the very basis of thisposition is the existence of a law peculiar to each organiz-ation—a law which is itself only the expression of thedifferences existing in the regime of each organizationand especially in its functions. At the same time anindication was given of the general lines on which a placemight be found for considerations of this kind withoutradically undermining the principle of codification inregard to the agreements of international organizations.But the point is of such paramount importance that it isnecessary to refer to it again.

20. A comparison between the position of States andthat of international organizations will perhaps help toindicate more clearly what can reasonably be accepted inthis matter. Each State has considerable freedom tosettle the problems of its own constitution and to provideitself with the internal rules most suited to its needs.Nevertheless, in its relations with other States and inparticular in regard to the regime of international treaties,

1 0 Ibid., pp. 184-185 and 186-187, paras. 46 and 51.

11 Ibid., pp. 186-187, para. 51.12 Ibid., p. 197, paras. 86 et seq.


it is essential and universally accepted that there shouldbe some rules of international law which are the same forall States. The same should be true of internationalorganizations. Each international organization has ofcourse a law of its own, which is founded on a constituentcharter and on all the law deriving therefrom; but it isinconceivable that the relations of international organiz-ations with each other or with third States should besubject to the law peculiar to any one of them.13 Suchrelations must be governed by general rules forming partof general international law. There is of course a funda-mental difference from the position regarding States; ingeneral international law, States are on a footing ofsovereign equality with regard to one another; from thestandpoint of international law they have the samestructure and assume the same functions, and the onlydifferences are quantitative. On the other hand, eachorganization is different from all the others, since it isindividually defined by functions which vary widely fromone organization to another. This difference between thestatus of the State in international law and the status ofeach organization may well prevent the formulation ofcertain general rules which would disregard the differencesthat distinguish one international organization fromanother; but the fact remains that in their relations witheach other and with third States international organiz-ations are called upon to follow common general rulesand it is essential that they should do so.

21. If this is really the correct approach to the problemof agreements concluded by international organizations,it must be admitted that there should be no majorobstacles to the establishment of a body of rules governingagreements by international organizations, provided thatcertain precautions are taken. One such precaution is toeliminate any formalism or unnecessary details from theformulation of rules, in order to avoid, as far as possible,excessive rigidity; the other precaution is to refrain fromestablishing common rules on questions that should beregulated, in the case of each organization, according toits own characteristics. If these basic ideas are accepted,there is no reason for thinking that the provisions of the1969 Convention are not in general valid for the agree-ments of international organizations.

Part Two

Some problems of substance

22. Part II of this report will deal with certain problemsconcerning the law of treaties on which—in the light of thereplies given by the international organizations to the

13 The question of agreements concluded by an organizationwith its own members is not considered here since it is conceivablethat, because of their close relationship to the constituent charter,these agreements might be subject to the internal law of the organiz-ation, which could thus be independent of public international law.But this hypothesis relates in fact only to political systems in theprocess of integration. To questions A.3 (Agreements having aninternal character) and A.5 (Agreements concluded with a viewto applying other agreements), the organizations consulted offeredreplies which were interesting from other points of view but whichshowed that they do not at present envisage the general subjectionof certain agreements to the "internal" law of the organization.

questionnaire addressed to them, and also of the reflectionsof the Special Rapporteur—it is now possible to presentsome elements additional to those given in the first reporton most of the points to be discussed.

We shall deal with the various topics in roughly thesame order as they are dealt with in the 1969 Convention,though we shall of course be dwelling only on a fewcharacteristic points which have been selected on accountof their value as examples or their importance. The topicswill be grouped under the titles of the first three parts ofthe Vienna Convention, namely: Introduction; Con-clusion and entry into force of treaties; Observance,application and interpretation of treaties. No referencewill be made to points concerning parts IV to VIII of theConvention, on which no questions were addressed tointernational organizations.

A. PART I (INTRODUCTION) OF THE 1969 CONVENTIONAND THE CONCEPT OF "PARTY"

23. The general provisions of the 1969 Conventioncontain some provisions which the Special Rapporteur—offering a tentative opinion before he has heard the viewsof the Commission—believes it would be better not tochange. Also, there will be no further reference to pointsalready made, such as the desirability of considering onlywritten agreements, in the case of the agreements oforganizations just as in the case of the agreements ofStates, or the need to keep the same definition of inter-national organizations. On the other hand, it would beuseful to deal at some length with a difficult and importantpoint concerning the definition of "party" to a treaty.

24. Article 2, paragraph 1 (g) of the 1969 Conventiondefines the term "party" as follows: "'party' means aState which has consented to be bound by the treaty andfor which the treaty is in force". It is evident both fromthe context and from the work of the International LawCommission, that this definition was drafted to distinguishthe term "party" from the term "contracting State", whichis defined as "a State which has consented to be bound bythe treaty, whether or not the treaty has entered intoforce" (article 2, paragraph 1 (/)). It seems that the questionwas never raised as to whether a State might be in aposition which was neither that of a "party" nor that of a"third State"—that is to say that although the Statewould be bound by the substantive rules of the treaty,it would not participate in the administration of thetreaty, and particularly not in its revision. The 1969 Con-vention makes provision for machinery collateral to atreaty, whereby a third State can accept certain rights andobligations, but this machinery is an agreement completelydistinct from the original treaty and disposes quite freelyof certain rights and obligations. It seems therefore that,from the standpoint of the Vienna Convention, there isnot, properly speaking, any intermediate position betweenthat of "party" and that of "third State" with regard to atreaty.

25. The question concerning the position of an organiz-ation with regard to a multilateral treaty might be solvedalong the same lines. It may, however, be wonderedwhether the case of an organization having extensive


rights and obligations without being a party to a treatybetween States may not be very common, and may there-fore need to be considered afresh.

26. Accordingly, each organization consulted was askedin intentionally general terms to state whether, withregard to multilateral treaties between States, it was inthe position of "a party to these treaties", "an associate"or "a person bound to respect these treaties" (ques-tion A.6).

In general, the replies on this topic have been mostinformative and show that there are a number of differentsituations which have been regulated in different ways.A distinction may perhaps be made between two groupsof situations described by the international organizations.

27. (A) In the first group, States members of an organ-ization—and sometimes also non-members—conclude aconvention to which the organization is not a party butunder the terms of which it acquires new rights andobligations. This situation is extremely common in thecase of all organizations. Can we say that it does notrequire any special consideration and can be explainedwhere necessary in terms of a tacit collateral agreementbetween States parties to the convention and the organiz-ation ? Or should it be regarded as a special situationwhich occurs so often that it requires special codification ?

28. The problem14 will be discussed again later,15 sinceit raises the question of the effects of treaties with respectto third parties. It needs to be studied in greater detailnot only from the standpoint of law but also in order todetermine whether, in the case of the agreements of inter-national organizations, a special category should beestablished for organizations which are not parties to anagreement but are closely associated with its implemen-tation.

29. (B) The second group includes agreements whichare binding on international organizations in all theirsubstantive provisions but do not confer on the organiz-ation the powers normally enjoyed by parties to a treatyin regard to the administration or revision of the con-vention or participation, with the right to vote, in theorgans established by the convention. Apart from certainprovisions in commodity agreements, the most recentexamples are the agreements which have made it possiblefor international organizations to participate in certaininternational conventions concerning outer space; butthere are earlier examples, particularly with regard tothe position of the United Nations in ITU.

30. Two special cases were referred to in two specificquestions, one addressed to the United Nations and theother to the specialized agencies. They relate respectivelyto the position of the United Nations with regard to theConvention of 13 February 1946 on the Privileges andImmunities of the United Nations,16 and the position ofthe specialized agencies with regard to the Convention of

21 November 1947 on the Privileges and Immunitiesof the Specialized Agencies.17

31. With regard to the Convention of 13 February 1946it is enough merely to mention that the position constantlymaintained by the Secretary-General since the AdvisoryOpinion on reparation for injuries suffered in the serviceof the United Nations 18 is that the United Nations is aparty to that Convention. The arguments on which thisposition is founded have been stated frequently in theUnited Nations 19 and may be summarized by sayingthat the Organization and the Secretariat claim the rightto watch over the observance of that Convention and, ifnecessary, to ensure that it is complied with by all States.The Special Rapporteur does not seek to question theeffects of the status of the United Nations as a "party",or the grounds for affirming the principle itself, which hascertain advantages; 20 however, one may ask whether theUnited Nations technically has the position of a party inrespect of all the problems which may arise in connexionwith the life of the Convention and particularly itsrevision.

32. The same question may be asked in the case of theConvention of 21 November 1947 on the Privileges andImmunities of the Specialized Agencies, whose originalmachinery is well known; there are sound arguments forconsidering the organizations as parties to that Con-vention, 21 and almost all the specialized agencies whichhave accepted its machinery in regard to themselves haveconsidered themselves as parties to it. However, one ofthem stated that in its view the organizations were notparties, but had a legal interest in the Convention thatmight be described as sui generis; another takes the viewthat the status of party is acquired, but inclines to thebelief that this is a sui generis status. Another takes thefollowing position, which is of such interest that it mustbe quoted in its entirety:

As to the juridical standing of the specialized agencies under theConvention of 1947, a distinction might be made between being a"party" (a term which the Convention employs only with regard toStates) and participation in another sense, i.e., having rights andobligations derived from the provisions of the Convention. Thespecialized agencies are clearly participants in this wider sense, aspointed out in the legal opinion of the Office of Legal Affairs of theUnited Nations of 10 July 1964 which concluded:

"Accordingly, each specialized agency enjoys the same degreeof legal interest in the terms and operation of the Convention asdoes a State party thereto, irrespective of the question whether

11 See Yearbook ... 1972, vol. II, p . 193, document A/CN.4/258,para. 73.

15 See below paras. 89 et seq.16 United Nations Treaty Series, vol. 1, p. 15.

17 Ibid., vol. 33, p. 261. IAEA is covered not by the Conventionof 21 November 1947 but by a special agreement in the case ofwhich the problem under discussion does not arise; in this case itis the organization itself which has reserved to itself the right torevise the agreement (see Yearbook ... 1972, vol. II, p. 194, foot-note 181).

18 I.C.J. Reports 1949, p. 185.19 See the statement by the Legal Counsel at the 1016th meeting

of the Sixth Committee on 6 December 1967 {Official Records of theGeneral Assembly, Twenty-second Session, Annexes, agenda item 98,document A/C.6/385).

20 In particular, it eliminates the theoretical anomaly whichexisted originally, whereby the Convention could enter into forceas a result of ratification by a single State (P. Reuter, Introduction audroit des trait is (Paris, Colin, 1972), p. 42, para. 69.

21 See Yearbook... 1972, vol. II, p. 194, foot-note 181.


or not each agency may be described as a 'party' to the Conven-tion in the strict legal sense." 22

33. These positions show that there is in fact a problemof vocabulary and of substance. To solve it, we shall laterhave to refer again to the machinery of the Vienna Con-vention concerning the effects of treaties with respect tothird parties. 23 It is sufficient for the time being to have,as it were, established the outer contours of the problem.

B. PART II (CONCLUSION AND ENTRY INTO FORCE OFTREATIES) OF THE 1969 CONVENTION

34. There are several points which call for discussion.In the case of some of them, all that can be done is torecall what the Special Rapporteur has stated previously;in the case of others, it will be possible to take a betterinformed and therefore a firmer position than in the firstreport. These various points will be grouped underthree headings: the form of agreements, the capacity oforganizations, and representation.

1. Form of agreements

35. There is nothing to add to what has been said onthis point in the first report, which can be summarizedin two propositions:

(a) Most of the objections and reservations made byinternational organizations to the extension of the 1969Convention to the agreements of international organiz-ations related to the conditions as to which form thedraft articles prepared by the Commission were rightlyor wrongly believed to establish for the normal conclusionof international treaties.24

(b) The adoption by the Conference on the Law ofTreaties of the amendment which became the existingarticle 11 of the 1969 Convention eliminated any rigidityin the conclusion of written agreements.25

36. The logical consequence of these two propositionsis very simple: the major obstacles which stood in theway of the extension of the 1969 Convention to theagreements of international organizations have now dis-appeared. The principle of pure consensualism on whichthe Convention is based cannot have an adverse effecton the practice and development of international organiz-ations. It also justifies the assumption that all the conse-quences of that principle, which are the subject of theConvention as a whole, apply to international organiz-ations.28

37. There is nothing to add to this clear-cut conclusion.However, in order to emphasize the liberty given toparties by article 11 of the 1969 Convention, we shallmake one final comment which relates to some especiallysignificant examples. Neither the 1969 Convention nor

22 United Nat ions, Juridical Yearbook, 1964, p . 267, para. 5.23 See below, paras . 89 et seq.24 See Yearbook... 1972, vol. II, pp . 186-197 and 195-196,

paras . 51, 52 and 80.25 Ibid., pp. 188 and 195-196, paras. 55 et seq and para. 80.26 Ibid. See parlicularly para. 81 concerning the regime of nullity,

rules of interpretation, etc.

the work of the International Law Commission containsa very precise definition of a treaty concluded in writing;though this expression excluded purely oral agreementsand—even more so, tacit agreements—it was not clearwhether the expression applied only on condition thatthe written agreement consisted of an instrument speciallydrafted for the purpose, or whether it was enough merelyfor the text to be expressed in writing. In the latter case,an agreement resulting incidentally from ordinarycorrespondence may be regarded as a written agreement,as may an agreement based on the record of a meetingaccepted by two parties that have made oral statementswhich are reproduced in the record and from which anagreement results. Before the adoption of article 11, itwas still possible to hesitate between the two solutionsbut now it seems that the question has been settled byadopting the wider solution, since this article states thatthe consent of a State to be bound by a treaty may beexpressed by " . . . any other means if so agreed". It isquite clear that this means may be agreed in ways otherthan in writing,27 and these two forms of agreementwhich are very common in the practice of internationalorganizations—namely, agreement by exchange of cor-respondence and agreement in the form of the proces-verbal of a meeting accepted by the parties concerned—come within the category of written agreements as itseems to be conceived by the 1969 Convention.

2. Capacity of international organizationsto conclude treaties

38. Article 6 of the 1969 Convention on the Law ofTreaties states that: "Every State possesses capacity toconclude treaties". Does not this provision call for acorresponding provision concerning international organ-izations ? Before replying to this question, it must benoted that a provision of this kind would, in the case ofinternational organizations, respond to a somewhatdifferent need. Article 6 is what remains of a much moreambitious article 28 to which we shall refer later; thoughits meaning has been the subject of discussion, it isprobably designed to ensure—with protectorates of thecolonial type in mind—that a State cannot forego onceand for all this capacity which is inherent in statehood.In the case of international organizations, on the otherhand, what is required is a rule which would be applicablein cases where the constituent charter is silent on thematter. The view has often been taken that the capacityto conclude agreements belongs naturally to internationalorganizations and is for them an inherent capacity. Sucha view may be supported by certain precedents of theInternational Court of Justice which introduced conceptssuch as functional competence and implicit powers. Suchconcepts are based on the observation that an internationalorganization is by nature intended to participate in inter-national relations and that such participation is difficultto imagine if the possibility of concluding agreements isruled out.

27 P. Reuter, op. cit., p . 41 , para. 67.28 See Yearbook... 1972, vol. I I , pp . 178-180, document

A/CN.4/258, paras. 25 and 28 et seq.


39. If the Commission inclines towards a solution ofthis kind it might well take as a basis certain formulationssuch as that suggested by Professor Rene" Jean Dupuy inhis report:

Article 4. Unless the constituent instrument provides otherwise,every international organization has the capacity to concludeagreements in the exercise of its functions and for the achievementof its objectives.29

40. However, although the Special Rapporteur isattracted by formulations of this kind, he would preferrather to propose to the Commission a more radicalsolution, namely, not to have any article on the capacityof international organizations at all. There are, he believes,some considerations of principle, and also some practicalconsiderations, to justify this solution.

41. The basic consideration of principle relates to thevery simple fact that the capacity of an internationalorganization derives from its own statutes, from the lawpeculiar to the organization, and not from a rule of generalinternational law. It may of course be argued that there isno rule of general international law which prohibitsStates from establishing any kind of international organ-ization which they want to establish, or from giving theorganization the capacity to conclude treaties; and onemay be tempted to conclude from this that there is ininternational law a permissive rule concerning the capacityof international organizations. But this permissive ruleis nothing other than the rule pacta simt servanda, and arecognition of the fact that States enjoy a wide freedomin the conclusion of treaties. It should be noted that theexistence of the organization with respect to third Stateswill depend on its recognition by them and is thus alsoderived from the rule pacta stint servanda. 30

42. Against this, may be cited the famous precedent ofthe International Court of Justice, which in the AdvisoryOpinion on reparation for injuries suffered in the serviceof the United Nations referred to an "objective" person-ality of the United Nations 31 which could bring claimsagainst third States. But the United Nations (and perhapsother organizations of the same family) constitute aspecial case because of their universality, and in any caseconsiderations which apply to them cannot be extendedto every organization of every kind. Internationalpractice in this matter is too well-known to need furthercomment.

43. Moreover the fundamental point we have juststressed does not relate to the theoretical existence andsignificance of the international "personality" of organi-zations: it is a fact that there are organizations and thatthey conclude treaties between themselves and withStates. The fundamental point is that no organizationhas a capacity identical with that of any other, and thatthe capacity of each organization depends on the foundingStates and subsequently on the member States. On thislast principle, agreement is unanimous; it can scarcely

"9 Op. tit., p. 101 (translation from French by the Secretariat).30 Yearbook... 1972, vol. II, p. 179, document A/CN.4/258

para. 26, and foot-note 69.81 I.C.J. Reports 1949, p. 185.

be denied that there is a wide variety of possible solutionsand that States have complete freedom in the matter.

44. Thus, though a rule stating that, in the absence ofany express provision in its constituent charter, an organi-zation enjoys full capacity to conclude the internationalagreements necessary for the exercise of its functions andthe achievement of its objectives may be satisfactory andtrue in the majority of known cases, it might be opento criticism on the grounds of its universality and excessiverigidity. In the case of certain international organizationswhose constituent treaty contains no provision concerningcapacity to conclude international agreements, it mightwell be that the intention of States, as crystallized bycontinuing practice, was that the organization shouldnot have the capacity to conclude international agreementsor should have only a limited capacity; and, even incases where there is a provision ruling out the capacityto conclude agreements, it is conceivable that a practicemight develop permitting the conclusion of certainagreements on administrative matters. However, onewould not go so far as to say that it is practice alonewhich decides the question of the capacity of internationalorganizations, although in fact this is usually the case.This is a problem which may, in the case of internationalorganizations, be described as constitutional; it dependson individual solutions and not on a rule common to allorganizations, and there may be some very rigid constitu-ent charters that do not recognize this creative power ofpractice.

45. These are not the only considerations to be advancedon this topic. It might be thought that one possibleobjective, instead of stating a general rule defining thefundamental principle of the capacity of internationalorganizations, would be to define a minimum capacitypossessed by all international organizations, though someof them would have a more extensive capacity than thisminimum. However, before attempting to decide whatthis minimum capacity might be, it is essential to considercarefully the far-reaching implications of such a solution;it would imply re-defining the concept of "internationalorganization" for the purposes of the future draft articles,since the draft could not prevent the term "internationalorganization" from being used in practice to designateentities not possessing this minimum capacity, and a newdefinition would be needed to exclude these entities fromthe application of the draft articles. The result would bea departure from the initial position defined above—namely, the maintenance of the definition of internationalorganizations as given in the 1969 Convention.

46. Even with this fairly limited degree of rigidity, therule envisaged still presents some disadvantages. Theremay at present exist an entity which the member Stateshave described as an international organization, thoughit has not hitherto concluded any agreement, its constitu-ent instruments make no reference to any capacity toconclude such agreements and the member States do notax present envisage any development likely to confer onit even a limited international capacity. If a text referringto a minimum capacity for international organizations wasat present in force, it would be necessary to concludetherefrom that for the purposes of that text the entity


in question was not an international organization; andthis consequence would do nothing to encourage a possibledevelopment whereby States might gradually come torecognize that this entity had a capacity to concludeinternational agreements.

47. Lastly, the question arises as to the matters to whichthis minimum capacity would apply. As previouslystated,32 the vast majority of agreements concludedby international organizations relate to administrativequestions and operational activities. These two terms maybe fairly clear in an academic context, but would seemto need some further clarification if they were to be usedin a convention for defining the limits of capacity. Forexample, the question of the immunities of an organizationof its officials and of the representatives of membersStates is an administrative question, but it also has somepurely fundamental aspects and might equally well bedescribed as political; in any event it is noteworthy thatin certain cases member States reserve to themselves theconclusion of agreements on immunities and privileges.33

This is only one example of the problems that wouldhave to be faced if there were a feeling in favour ofestablishing a definition of the minimum capacity ofinternational organizations.

48. These are the considerations of principle whichlead the Special Rapporteur not to recommend to theCommission the insertion of an article or series of articlesconcerning the capacity of international organizations,although he must admit that he has arrived at this decisionafter much hesitation and he is prepared in his work tofollow any guidance which the Commission may wishto give him.

49. However, certain considerations other than thoseof principle have reinforced the opinion expressed above;these are practical considerations based on the Com-mission's previous experience. The Commission examinedthe problem of the capacity of international organizationsin its work on the codification of the law of treaties, inparticular at the time when the Special Rapporteur,Sir Humphrey Waldock, was proposing that treatiesbetween States and the agreements of internationalorganizations should be considered simultaneously. Thefirst report34 contains a lengthy review of the Com-mission's discussions on the subject. It appears from thisthat the Commission remained divided on this question,and finally preferred not to include in its draft anyprovisions relating to the capacity of internationalorganizations. However, if it were thought to be desirableto adopt a formulation expressing the opinions ofSir Humphrey Waldock in their final stage, it may be

32 See Yearbook ... 1972, vol. I I , p . 174, document A/CN.4/258,paras. 8 et seq.

33 In some cases agreements between member States exist sideby side with agreements concluded by the organization with memberor non-member States, particularly with the host State. The main-tenance of this rivalry of competence between the organizationon the one hand and member States on the other is evidence ofthe great uncertainty which exists in practice with regard to thecapacity of international organizations.

34 Yearbook ... 1972, vol. II , pp . 178-182, document A/CN.4 /258, paras . 25-36.

recalled that the Commission considered the followingformulation:

In the case of international organizations, the capacity to concludetreaties depends on the instrument by which the organization con-cerned was constituted.36

Again, if one wished to use the formulations devised laterin other contexts and finally adopted in the 1969 Con-vention, the following wording might be suggested:36

In the case of international organizations, the capacity to concludetreaties depends on any relevant rule of the organization.

50. It is obvious that a general rule of this kind merelyexpressed the idea that the capacity of each organizationis determined individually by the terms of its own statutes;and this is tantamount to admitting that, with regard tothe capacity of international organizations, there is nogeneral rule. Such a provision might be discussed by theCommission at the appropriate time, but the SpecialRapporteur has doubts as regards its usefulness.

51. Still more interesting than the rather negativeresults obtained by the Commission in its earlier work-—asdescribed above—are the positions adopted on thesubject by several Governments. The history of interna-tional organizations (including those of a pre-federalcharacter) shows that Governments are extremely sensitivein regard to any intervention by international organizationsin their foreign affairs, and have often questioned thelegitimacy of such interventions even when they are ofa minor nature, since experience teaches them that itis intervention in foreign affairs that leads to the develop-ment of federative processes in unions of States. Alsoevery international organization may in certain circums-tances appear as a technical machinery designed toimpose the views of the majority of the States controllingit, and for that reason States are often suspicious of anyprocess which extends the powers of that mechanism.In short, the development of the right of internationalorganizations to conclude international agreements hasspecific political aspects; and in the circumstances it maybe felt that it is not advisable to propose a generalformulation, which in some cases would represent adefinite retrograde step from what is already possible(or even accepted), and in others might impede a develop-ment which is quite possible in the near future.

52. In brief, a justifiable concern for the constitution ofinternational organizations—still fragile, and stillunexplicit on so many points—seems to call for a certaincaution in the formulation of general rules. This attitudedoes not imply any pessimistic view of the future of theinternational organizations but, on the contrary, a basicconfidence in their natural and spontaneous developmentwhich must be encouraged—and hence, in the first place,respected.

3. Representation

53. In reality, the very term "representation" coversa series of problems which differ widely from one another

35 Yearbook... 1962, vol. I, p . 193, 658th meeting, para. 87.36 See Yearbook ... 1972, vol. I I , p . 181, document A/CN.4/258,

para. 35.

84 Yearbook of the International Law Commission, 1973, vo). II

although there are certain links—practical, perhaps,rather than theoretical—between them. The complicationarises from the fact that it is necessary to ask "Who isrepresenting whom ?". This question is usually a singleone, relating to the representation of a clearly definedlegal entity (a given State or a given international or-ganization) by a natural person empowered to undertakeobligations on its behalf, but it may perhaps sometimesbe a double question, relating also to the identificationof the entity which is in fact assuming the obligation.This was the case, for instance, in the so-called protectoratesystems where it was sometimes uncertain whether theprotecting State was negotiating on its own behalf or onthat of the protected State, or on behalf of both.

54. In the case of relations between States, existinglaw does not favour systems of representation in whichone State can be represented by another State; suchsystems, it is said, encourage processes contrary to thesovereign equality of States. Even in cases where thequestion arises in the context of a developing federalism,it has sometimes given rise to the complaint that it intro-duces an undesirable lack of clarity into internationalrelations. In any case the International Law Commission,followed in this matter by the United Nations Conferenceon the Law of Treaties, did not deal with this problem.37

On the other hand, the Commission did draft a longarticle, confirmed in the 1969 Convention, concerningthe representation of States in the conclusion of treaties(article 7 of the Convention (Full powers)).

55. In the case of international organizations, thedetermination and proof of capacity to represent aninternational organization at any stage in the conclusionof a treaty is a problem that arises at least in principle.38

A question (A.2) on this subject was included in thequestionnaire addressed to international organizations.But since, as stated above, the 1969 Convention hadnothing to say on the problems of "representation" whichrelate to the identification of the entity bound by a treaty,it did seem useful to sound out opinions on two problemsconcerning the question as to who in the case of theorganization is really bound by an agreement. Twofurther questions were therefore asked in the same context,one on agreements concluded by subsidiary organs (A.4)and one on the participation of an organization in atreaty on behalf of a territory it represents (A.I). On these

37 This reluctance to do so may be compared with the positiontaken by the International Law Commission on the question of therepresentation of more than one State by a single person, in itsdraft articles on the representation of States in their relations withinternational organizations (Yearbook. .. 1971, vol. I I (PartOne), pp. 311-312, document A/8410/Rev. l , chap. I I , D , para. 3 ofthe commentary to article 42).

38 In the report by R. J. Dupuy to the Institute of InternationalLaw, the question is examined in all its aspects (op. cit., pp . 64 et seq.\and on the subject of powers an article 7, as follows, is proposed:"The person who represents the international organization orexpresses its consent to be bound by the agreement shall furnish theother party with proof of his powers, if the latter so requests."(Op. cit., p . 102) (Translation by the Secretariat.)

The conditions on which this authorization is issued are establishedby each international organization. An act relating to the conclusionof an agreement performed by a person who cannot produce proofof his powers has n o legal effect, unless it is subsequently confirmedby the international organization.

three points, the Special Rapporteur would like to makea few brief comments based on the replies received.

(a) Determination and proof of capacity to represent aninternational organization at any stage in the conclusionof a treaty

56. This problem is, in fact, two-fold since it is necessaryto know, first, which organ is competent to decide thatan act relating to the conclusion of an agreement shouldbe performed and, next, who is the natural personempowered to represent the organization in the perfor-mance of the act. The two problems may be reduced toone in the simplest cases, for instance when an act isstatutorily the responsibility of the highest official of theinternational secretariat and when this official performsthe act himself. But the situation is much more compli-cated in certain fairly common cases.

57. In some cases, competence to perform a specificact is statutorily shared between several organs, or certainorgans may request another organ of the organization, oreven an ad hoc organ, to act in their place; does thisconstitute a "delegation of authority", or representationanalogous to a "mandate" ? Replies vary widely from oneorganization to another. The various solutions acceptedhave often been described and classifield, and fall withinthe scope of the comparative law of international or-ganizations. The information thus collected may in certaincases suggest some ideas for solving a problem of con-stitutional law concerning a given organization; butalthough the suggestion has sometimes been made, itseemed to the Special Rapporteur that such problemsrelated to what might be described, as the constitutionallaw of international organizations. In that capacity, theydo not lend themselves to a general solution, even as ameans of filling existing lacunae in the constituentcharters.

58. Theoretically, and if the same considerations appliedto organizations as to States, it should be easy to identifythe natural persons empowered to express, in respect tothird parties, the organization's will in regard to theperformance of one of the acts relating to the conclusionof an agreement. As in the case of States, it would besufficient to decide which persons have a power ofcertification similar to that of the Head of State or theMinister for Foreign Affairs in the case of a State, whichpersons are, by reason of their functions, not required tofurnish proof of their powers, and how the documentscertifying the legal capacity of other persons to representthe organization are to be drawn up.

59. Then, as in the case of States, there would be a clearseparation—and this is a point of great practical im-portance—between the problems and procedures which,in accordance with the organization's own constitution,relate to the formulation of its decision in regard to aspecific act, and the problems and procedures relating tothe communication of that decision to the other partiesto a convention. But, in the case of organizations, theproblem may arise in different terms, because organiz-ations have no agents specializing in external relationsgrouped together under the authority of a senior official


who is himself a specialist and is in turn subordinate to asupreme head, who, like a Head of State, has generalpowers of representation. Not only are there radicaldifferences between the general structures of the inter-national organizations themselves; this absence ofspecialized representatives means that there is also adifference between the case of organizations and the caseof the State.

60. The most direct consequence of this situation mightbe that the entity concluding an agreement with aninternational organization should, in theory, ask for amuch more extensive proof of the involvement of all theorgans competent to assume a commitment on behalf ofthe organization, and should then require the naturalperson finally expressing the will of the organization tofurnish proof that he is duly authorized to perform theacts he is proposing to perform. In other words, thedistinction between the "internal" and the "international"phases of the conclusion of agreements could not, in thepresent state of international relations, be as clear-cutas it is in the case of States.

61. However, it appears from the information given byinternational organizations that in practice the difficultiesare not as serious as might be feared. In the first place,by force of circumstances, the most senior official ofinternational secretariats enjoys a privileged situation;the permanence of his position, the weight of the inter-national responsibilities he bears and his relative inde-pendence combine to give him a privileged situation inexternal relations; in all organizations he seems in fact toacquire a power of certification which is accepted as suchby the partners of the organization, and by reason of hisrank no certification is required for his own acts. Thoughin certain organizations the situation of the head of thesecretariat may be extended to include some officials of arank approaching or similar to his, and though in someother organizations there are specifically executive organswhich act in a comparable manner, the basic fact remainsthe same. There is a tendency in each organization tocreate a privileged situation in external relations and inthe procedure for concluding agreements, particularlywith regard to the certification of the will of the organiz-ation to perform one of the acts relating to the conclusionof an agreement.

62. Secondly, all the organizations stressed the practicalimportance of the correspondence exchanged prior to theconclusion of an agreement. In fact, all the stages—constitutional stages, internal stages, authorizations,delegations of authority, and approvals—are mentionedand described in this correspondence; and in additioncopies of the documents and records of the discussionsconcerning them are generally included in this exchangeof correspondence. The partner of an organization isthus informed regularly, and often from day to day, ofthe development of a situation affecting any stage in theconclusion of an agreement. The final certification relatingto the natural person authorized to perform the act—ifhe is not one of the senior officials or high-rankingrepresentatives for whom by reason of their functions nocertification is required—will generally be conveyed in aletter from these senior officials or high-ranking represen-

tatives designating the official who is authorized to expressthe will of the organization.

63. Thus, the situation as it seems to emerge from theinformation received may be summed up, rather sur-prisingly perhaps but nevertheless accurately, by sayingthat it is not radically different from that of relationsbetween States. As in the case of States, the internalprocedure of each organization remains the affair of eachorganization, but the partner to the agreements of theorganization is generally informed of it by administrativecorrespondence. The organizations determine by theirpractice the high-ranking officials or representatives whohave a doubly privileged position in the conclusion ofagreements, in the sense that their own acts require nocertification and that they themselves authenticate theacts of others. Though there are no "powers" in theformal sense of the term, the production of administrativecorrespondence is generally accepted instead.

64. If the foregoing analysis is correct, it is obviouslypermissible to consider the possibility and desirability ofdrafting texts which would correspond to article 7 of the1969 Convention, on full powers. Is it necessary to statethe principle that each partner in an agreement maydemand proof of the capacity of an official to assume acommitment on behalf of the organization ? Is thisaffirmation necessary ? Is it in fact true, when the partnerin the agreement is a member of the organization, andmust in that capacity must be able to verify directly thevalidity of all expressions of consent and all forms ofrepresentation ? 39 Is it necessary to refer in precise termsto the existence of high-ranking officials or representativeswho, in principle, have a privileged power of represen-tation ? These are a few of the questions which may beraised at the present stage, even if they are not solved.

(b) Agreements concluded by subsidiary organs

65. As a result of the decentralization of the activities ofthe international organizations, the need to seek extra-budgetary means of finance, and the involvement inincreasingly specialized technical sectors, the internationalorganizations and especially the United Nations havebeen obliged to multiply the organs—based entirely on aunilateral act of the organization, entrusted with a widerange of different functions, and sometimes enjoyingextensive powers—which are generally known as "sub-sidiary organs". Some of these organs conclude inter-national agreements. Are these agreements binding on thesubsidiary organ or on the organization to which theybelong, or on both ? The question is not purely theoreticaland may have very important implications, particularlyfrom the financial standpoint.

66. The organizations consulted deserve great credit forreplying to the relevant question (A.4), since—in thecase of some of them at least—the matter has clearly notyet been decided. What is most surprising in the varietyof replies received is that not all organizations adopt the

39 It will have to be considered later whether this comment hasany implications with regard to the adaptation of the provisions ofthe 1969 Convention, concerning the constitutionality of agreements(article 46).


solution of subsidiary organ; some resort to it in certaincases only. For the majority of organizations the problemdoes not yet seem to have had any practical aspects at all.Though some organizations have specifically providedfor the possibility of giving subsidiary organs a capacity toconclude international agreements, that capacity has notyet apparently been exercised. Two organizations defi-nitely consider agreements concluded by the subsidiaryorgan as agreements of the international organizationitself. Another organization states that, although as ageneral rule an act of the subsidiary organ is binding onthe organization itself, registration practice reveals someuncertainty in the designation of the party to the agree-ment; moreover, under the actual terms of the agreement,the organization may be bound by it only in part.

67. Two conclusions seem to emerge at present fromthe information received. First, there is no hard-and-fastconcept concerning the legal status of the subsidiaryorgan; practice seems to be still developing. Also, thereis nothing to indicate that there should be a set of ruleson the subject, common to all international organiz-ations. Lastly, the question is part of the law peculiar toeach international organization.40 On reflexion, there isnothing surprising in this: the freedom to establishorgans and to confer upon them varying degrees ofdecentralization is an important feature of the consti-tutional law of each organization. The question ofsubsidiary organs, seen in this light, does not lend itself tocodification applicable to all international organizations—not even to codification confined to the special topic ofthe agreements of international organizations.

68. Secondly, there is in practice some uncertaintyregarding the identification of the party to an agreementconcluded by a subsidiary organ. Is it possible andnecessary to try to remedy this situation by a generalrule ? An affirmative answer would be based on the ideathat the party to an international agreement must alwaysbe clearly designated and, if it is not so designated, it isbest to adopt the solution which offers the greatestsecurity to the other parties to the agreement. This wouldbe tantamount to stating as a general rule that theorganization itself is in principle party to the agreement,but that the contrary solution is possible in certain caseswhich should be studied and defined. This solution seemstechnically possible but the Special Rapporteur cannotdecide, in the light of information available to him,whether it is useful and expedient.

(c) Participation of an international organization in atreaty on behalf of a territory it represents

69. Some constituent charters and certain internationaltreaties state, in terms which vary considerably from onecase to another, that an organization can participate in atreaty on behalf of a territory it represents. The questionarises whether this situation is sufficiently important and

clearly defined for the Special Rapporteur to study itand submit proposals on it.

70. The replies given by the organizations consulted aregenerally of a negative character, either because they donot have the capacity necessary for this purpose or becausethe capacity has been provided for in certain conventionsbut has never been exercised. The Special Rapporteurwould have been reduced to abandoning the subjectaltogether if the Secretary-General of the United Nationshad not carried out a very extensive and remarkablepiece of research on it, which would appear worthy ofimmediate publication and would serve as a basis forconsidering the problem in detail. The Special Rapporteurcannot claim to cover immediately, in a few observations,all aspects of the information he has thus received; butthere are, it seems, some general comments he can submitto the Commission forthwith.

71. The cases in which an international organizationmay, with respect to a treaty, be exercising a certainparticipation in this treaty on behalf of a territory inregard to which it performs certain functions are inprinciple fairly numerous. Such a situation might havearisen under Article 81 of the Charter in connexion withthe Trusteeship System; but this possibility has hithertohad no practical application, not even in the case of themeasures taken in 1947 with regard to the Italian coloniesor solutions considered at about the same time withregard to Jerusalem and the Holy Places.

72. Similarly, in a relatively large number of treaties(which are either the constituent charters of internationalorganizations or open multilateral treaties), there areprovisions covering the case in which the United Nationsis the Administering Authority of a Trust Territory orany other territory, or the more general case of anyauthority responsible for the administration of a territoryor for its international relations. Among the mostimportant instances, may be mentioned the constituentinstruments of WMO 41 (articles 3 and 34), IMCO 43

(articles 9, 58 and 59), ITU 43 (articles 1 and 21), FAO 44

(article II), WHO 45 (article 8), UNESCO 4G (article II,amended 11 July 1951), and the ILO47 (article 35,amended 9 October 1946), as well as the followingconventions: the Convention on Road Traffic of19 September 1949 48 (article 27), the Protocol on RoadSigns and Signals of 19 September 1949 4 9 (article 56),the International Convention for the Safety of Life atSea of 17 June 1960 50 (article XIII), the InternationalConvention of 12 May 1954 for the Prevention of Pol-lution of the Sea by Oil (article XVIII, amended 11 April

10 In a short study published some years ago, the Special Rappor-teur may perhaps have fostered certain illusions on this score(P. Reuter: "Les organes subsidiaires des organisations interna-tionales", in Hommage d'une generation de juristes an PresidentBasdevant (Paris, Pedone, 1960), pp . 415 et seq.).

41 United Nat ions , Treaty Series, vol. 77, p . 143.42 Ibid., vol. 289, p . 48.43 United Nat ions, Juridical Yearbook, 1965 (United Nat ions

publication, Sales N o . E.67.V.3), p . 173.44 F A O , Basic Texts, vols. I . and II (1970 edition), 1970, p . 3.45 United Nat ions , Treaty Series, vol. 4, p . 185.46 Ibid., vol. 575, p . 260.47 Ibid., vol. 15, p . 135.48 Ibid., vol. 125, p . 22.49 Ibid., vol. 182, p . 228.60 Ibid., vol. 536, p. 27.


1962 51), the Convention of 9 April 1965 on Facilitationof International Maritime Traffic 52 (article XIII), theInternational Convention of 5 April 1966 on LoadLines BS (article 32), the International Convention of29 November 1969 Relating to Intervention on the HighSeas in Cases of Oil Pollution Casualties 54 (article XIII),and the International Convention of 29 November1969 on Civil Liability for Oil Pollution Damage 55

(article XVII).

73. The provisions relating to such participation havenot so far been applied in the case of an internationalorganization, so that there is no precedent relating tothem. It should also be pointed out that they are veryvaried. In cases involving participation in the constituentcharter of an international organization, the effects ofthe participation of the territory generally entail lesserrights than those enjoyed by members. Moreover, whereopen multilateral conventions are concerned, there arecases in which the United Nations would seem to partici-pate as a "party" on behalf of the territory in question;on the other hand, there are cases in which provision ismade only for an "extension" of the convention to theterritory administered by the organization, or even"application" of the convention to the territory con-cerned. This makes it necessary to consider a number ofdifficult problems. Assuming that it is really the organiz-ation which becomes a "party" to the treaty, it acquiresthat status only on behalf of a territory, and this is aprocedure for representation; but what precisely are itsconditions and effects ? When it is not expressly providedthat the organization or the territory become "parties"to the treaty, but there is rather an "extension" or"application" of the treaty, it may be asked whether thatis one of the situations which were briefly examined atthe beginning of this report.56

74. The question of agreements concluded by anorganization on behalf of a territory may, however, alsobe raised in a more specific context in connexion withWest New Guinea (West Irian) and Namibia.

75. The administration of West New Guinea (WestIrian) by the United Nations from 1 October 1962 to1 May 1963, on the basis of an agreement concluded on15 August 1962 between Indonesia and the Netherlandsand of General Assembly resolution 1752 (XVII) of21 September 1962, has interesting features as regardsthe practice relating to agreements concluded by inter-national organizations, although no agreement wasconcluded on behalf of the territory during this briefperiod. In the few agreements which it concluded withIndonesia and the Netherlands for the performance ofthe basic agreement 57 and in a formal agreement with

61 Ibid., vol. 600, p . 346.62 Ibid., vol. 591, p . 265.63 Ibid., vol. 640, p . 133.54 United Nations, Juridical Yearbook, 1969 (United Nations

publication, Sales N o . E.71.V.4), p . 166.55 Ibid., p . 174.68 Paras. 25 et seq.57 The agreement actually took the form of understandings

concluded by an exchange of notes on a trilateral basis (UnitedNations, Treaty Series, vol. 437, p . 304).

Pakistan concerning the United Nations Security Forcein West New Guinea (West Irian), 58 the United Nationsadopted the position that it did not "represent" theterritory in the strict sense of that term.

76. The taking over of the administration of SouthWest Africa by the United Nations through the agencyof a subsidiary organ of the General Assembly—theUnited Nations Council for South West Africa—andthe United Nations Commissioner for South West Africa,the confirmation of the personality of the territory bygiving it the new name "Namibia", and the extension ofthe responsibilities of the United Nations Council forNamibia were to lead to the broadest possible develop-ment, for the benefit of Namibia, of a certain form ofinternational personality represented by the organsestablished for that purpose within the United Nationsitself. This has raised the question of the internationalagreements concluded by the authorities responsible forrepresenting Namibia in the United Nations. The sixagreements concluded so far concern the issue of traveldocuments by the United Nations Council for Namibia.But the General Assembly resolutions which affirm thefully representative character of the Council ask it toperform a treaty-making function in very general terms.As regards form, the existing agreements were concludedin the name of the Council for Namibia;59 it wouldtherefore seem that the conclusion of these agreementsconforms to the procedure adopted for many agreementsconcluded by subsidiary organs,60 and it is not yetpossible to establish the extent to which they are concludedby the United Nations as such. They are not drawn upin the form of agreements concluded by the UnitedNations on behalf of a territory, but rather as agreementsdirectly committing the territory. In any event, it is notpossible to draw very precise conclusions from thisprecedent and it will be necessary to await furtherdevelopments before presenting a final analysis—andespecially before proposing any generalization.

77. Thus the studies undertaken by the United NationsSecretariat show, in conclusion, that this is a matterwhich has very varied aspects and that it has been thesubject of recent developments, especially within theframework of the United Nations. But specific applicationsare few in number and practice is little developed. Henceit does not seem possible, for the moment, to devotespecific provisions to this case. Its examination, however,has been far from useless. As in the case of subsidiaryorgans in general, it reveals some uncertainty. When anorganization assumes international responsibilities withrespect to a territory, it is almost inevitable that it shouldhave specialized organs and even some local admin-istration. Where there is an agreement, it is important toclarify the respective positions of the organization andthe territory, and to specify whether or not the organiz-ation has the status of a "party" to the agreement, on itsown account or on behalf of the territory. As the realproblem is to identify the parties to an agreement, it

58 United Nations, Treaty Series, vol. 503, p. 25.50 Cf. documents A/AC.131/20, A/AC.131/24, A/AC. 131/25,

A/AC. 131/26 and A/AC. 131/29.00 See above paras. 65 et seq.


might be imagined that the aim is to establish a residuaryrule on this point, under which, in the absence of specificprovisions, an organization is presumed to be party toan agreement on behalf of the territory. For the timebeing, however, it does not seem certain that it would beadvisable to propose provisions of this kind.61

C. PART III (OBSERVANCE, APPLICATION AND INTERPRET-ATION OF TREATIES) OF THE 1969 CONVENTION

78. Two questions put to organizations in the question-naire have already been raised 62 in connexion with theconclusion of treaties; they also have certain consequenceswith regard to the rules embodied in part III of the 1969Convention. We shall examine them again briefly; theyrelate to agreements concluded with a view to applyingother agreements (question A.5) and the characterizationas "internal" of certain rules binding organizations(question A.3). We shall then take up the fundamentalprinciples relating to the situation of third parties inregard to agreements concerning international organiz-ations ; this difficult question will have to be examined atgreater length.

1. Agreements concluded with a viewto applying other agreements

79. In many cases, an international treaty constitutesan act of execution of another treaty, whether the basictreaty is concluded between the same parties or betweendifferent parties. The main consequence of such a situationis clearly stated in article 30, paragraph 2, of the 1969Convention, which reads:

When a treaty specifies that it is subject to, or that it is not to beconsidered as incompatible with, an earlier or later treaty, theprovisions of that other treaty prevail.

80. The replies received on this subject show that theimportance of the question varies from one organizationto another: some organizations seem to be unaware of it,while others acknowledge that it often arises. The latterorganizations cite as an example agreements concluded

61 If it were possible to reason by analogy with what happenedunder the international mandates system of the League of Nat ions,the conclusion would be reached that it is easy for an internationalorganization to establish flexible and evolutive systems. F o r although,in the case of B and C mandates , the mandatory confined itselfeither to extending the effect of the treaties it had concluded to themandated territories, or to concluding, albeit in its own name,treaties relating to those territories, the situation was quite differentwhere A mandates were concerned. In the latter case, certain treatiesdirectly designated the mandated territory as a "par ty" , so that itpossessed a certain international personality, although, as Lissitzynobserves, " the ultimate responsibility for their foreign relationsremained with the mandator ies" (O. J. Lissitzyn, "Territorialentities in the law of treaties", Recueil des cours de I'Academie dedroit international de La Haye, 1968-IH (Leyden, Sijthoff, 1970),vol. 125, pp . 54 et seq.) same writer admits that such "territoriesassume, should the occasion arise, a responsibility of their ownwhich does not exclude that of the mandatory. Such solutions couldbe applied to the case of agreements concluded by a territory or onbehalf of a territory under United Nat ions administration, or even,more generally, to the problem of subsidiary organs. What is tobe hoped is that for every agreement the solution adopted will beas clear as possible.

62 See above note 13.

for the application of a headquarters agreement andagreements concluded in application of a basic agreementconcerning assistance. All these organizations deducedlegal consequences from the "derivative" nature of anagreement: in general the "derivative" agreement can beconcluded by officials of a lower rank than those whoconcluded the basic agreement and, in principle, thederivative agreement is subordinate to the main agree-ment as regards its interpretation and legal regime.Although the first consequence follows from the consti-tutional law of the organization itself, this is not true ofthe second, which constitutes an interesting applicationof the above-mentioned article 30, paragraph 2, of the1969 Convention.63

81. We shall add a final consideration which relates tothe registration of agreements (or their classification andrecording). The questionnaire asked what criteria hadbeen applied for the registration of agreement concludedby the organization (question A.8). Although registrationconstitutes only a secondary formality in the conclusionof treaties, it is well known that this formality sometimesbrings to light some of the most characteristic features oftreaties.64 The organizations' replies once again confirmwhat was already well known from the practice, 65

namely, that agreements of minor importance, of shortduration or subject to frequent changes are not registered.Agreements whose purpose is the application of anotheragreement are frequently treated in this way.

82. Despite certain very interesting features, agreementswhich constitute an act of execution of another agree-ment do not for the moment, in the opinion of the SpecialRapporteur, call for separate general provisions.

2. "Internal agreements" with respectto an international organization

83. Cases might conceivably arise where certain inter-national agreements, instead of being governed solely bygeneral international law are subject to the law peculiarto an organization. These agreements would include, inparticular, but not exclusively, agreements concludedbetween different organs of an organization, and agree-ments concluded between an organization and memberStates. The effects of such subjection to the law of theorganization may vary in extent according to the contentand development of the law peculiar to each organization.

63 One organizat ion rightly drew attention to the particularsignificance of the following case: State A places funds at thedisposal of an organization to be used for the benefit of third StatesB, C, D , etc., though it reserves certain rights relating to the conclu-sion and execution of the agreements which the organization willconclude with States B, C, and D . It may be said that the agreementsbetween the organization and the beneficiaries B, C, and D areagreements applying the agreement between State A and the organi-zation. This is a complex legal situation in which two agreementsconcluded at different times can perform the same function as atrilateral agreement {Yearbook... 1972, vol. I I , pp . 190-191,document A/CN.4/258, paras. 61-63) but have an original legalcharacter.

64 F o r observations on the conclusion of treaties by subsidiaryorgans, see para. 66 above.

85 United Nat ions, Repertory of United Nations Practice,vol. V, Articles 92-111 of the Charter (United Nat ions publication,Sales N o . 1955.V.2 (Vol. V)), pp . 307-309, Article 102, paras. 29-31.


In the simplest cases, the agreements would be subjectto the constituent treaty of the organization. In morecomplex cases, the subjection could be extended toinstruments other than constituent treaties, and theagreements could be subject to precise rules governingtheir conditions of application and their rank in the legalsystem of the organization.

84. There is nothing revolutionary in raising this prob-lem. When the 1969 Convention specified, in article 5,that it applied to the constituent instrument of an inter-national organization and to any treaty adopted withinan international organization "without prejudice to anyrelevant rules of the organization", it recognized thefundamental principle which, at the same time, affirmsthe existence of a law peculiar to each organization andrecognizes, with respect to treaties, its precedence overthe general rules of the law of treaties. As we have alreadysaid, but must repeat, what is true of treaties betweenStates "adopted within an international organization"should be even more true of agreements concluded"within" an international organization to which eitherthe international organization itself or some of its organsare parties.

85. As already indicated, the question asked on thissubject did not arouse great interest among the organiz-ations consulted. There are several reasons for this. Firstof all, the organizations have hardly any agreementsconcluded between their organs; agreements betweensubsidiary organs of the same organization do exist, butthis situation does not seem to have caused any problems.Moreover, the relevant rules of each organization areperhaps not so rich in substance as to constitute a specialregime for international agreements which might beassumed to come under those rules.

86. That does not mean, however, that to transfer therules of the 1969 Convention does not introduce theproblem just mentioned. We shall give here only oneexample relating to articles 27 and 46.66 There is obviouslyno a priori reason for not applying the rules set out inthese articles in the case of international organizations.Their transfer does, however, create some difficulties.

87. First of all, a question of terminology arises. Canone speak of the "internal law" of an internationalorganization ? Not only would the corresponding Englishterm "municipal law" have to be changed, but it is opento question whether it would be found acceptable to call

66 These provisions read as follows:"Article 27. Internal law and observance of treaties

"A party may not invoke the provisions of its internal lawas justification for its failure to perform a treaty. This rule iswithout prejudice to article 46."

"Article 46. Provisions of internal lawregarding competence to conclude treaties

"1. A State may not invoke the fact that its consent to bebound by a treaty has been expressed in violation of a provisionof its internal law regarding competence to conclude treatiesas invalidating its consent unless that violation was manifestand concerned a rule of its internal law of fundamental importance.

"2. A violation is manifest if it would be objectively evidentto any State conducting itself in the matter in accordance withnormal practice and in good faith."

the "relevant rules" of an organization "internal law".67

It could, indeed, be maintained that such rules are specialinternational law rather than internal law.

88. It may also be wondered whether the rule patientlydrawn up and established by article 46 is valid in all casesfor international organizations. It finally achieves adelicate balance between the rights and interests of thirdStates acting in good faith and those of the party whichmay demand, up to a certain point, compliance with thestatute which determines how its will to be bound mustbe legally formed. But, if this rule can be transferred asit stands, to apply to an agreement between two inter-national organizations or an agreement between anorganization and a third State, does the same hold goodfor an agreement between an organization and one of itsmembers? °8 The fact is that, as we shall have occasionto say later, the member State is not a third party inrelation to the organization. Not only must it be supposedto know the constitution of the organization in its entirety,but it has the duty to know it. One must go further;through its representatives in the organization, themember State contributes to the formation of the will ofthe organization. To maintain for its own advantage anagreement irregularly concluded by the organizationwould not be justified for reasons of security; such anagreement should therefore be void unless the othermembers of the organization bear as much responsibilityas the State party to the agreement for the breach of theorganization's law. Is it possible to reason on these lines ?There is some merit in the foregoing analysis, but it isnot entirely convincing in the last resort, because itleaves the organization's own existence out of accountand reduces the problem to the situation of its membersin relation to one another. It therefore seems that article 46of the 1969 Convention should be modified slightly, if atall.

3. The effects of agreementswith respect to third parties

89. The 1969 Convention provided a rigorous solutionof the problems relating to the position of third Stateswith respect to treaties, though it tried to avoid takingany dogmatic position. The rules laid down in the Con-vention on this subject did not take the agreements ofinternational organizations into consideration; but it ispossible to go further and say that, even in the case oftreaties between States, those rules did not consider theparticular situation in which an international organiz-ation might be place when it was not a party to suchtreaties, but was directly interested in them. It is thereforenecessary to examine here not only the problems peculiarto the agreements of international organizations, but alsothose relating to certain treaties between States whichclosely concern the position of an international organiz-ation.

90. Reference has already been made to the link betweenthese two categories of agreement. They appear to be

67 In its work the Commission has occasionally used this term,but without specifying its scope {Yearbook ... 1972, vol. II , p . 181,document A/CN.4/258, para. 33, foot-note 85).

68 See above, para. 64, note 39.


quite distinct: on the one hand, there are the agreementsto which only States are parties and to which the 1969Convention applies; on the other, there are the agree-ments to which one or more international organizationsare parties and which are the subject of the present report.The distinction holds good so long as one does notquestion a very simple postulate, i.e., that a State or anorganization either is or is not a party to a treaty, andthat there is no other alternative. On the other hand, assoon as this postulate is questioned, the distinctionbetween treaties to which only States are parties and thoseto which one or more international organizations areparties may no longer be sufficient to cover all the facts.

91. It has already been said 69 that the problem ofdetermining the exact position of an internationalorganization with respect to a treaty between States arisesin many cases. This question must be re-examined in thelight of the specific provisions of the 1969 Convention;in particular, it must be established whether thoseprovisions are not open to objection when comparedwith international practice, if it is attempted to extendthem to the case of international organizations. This willbe the subject of a first investigation. The problem willthen be examined in relation to agreements to whichinternational organizations are unquestionably parties.The question then arises whether the provisions of the1969 Convention, while remaining generally valid, donot require complementing as regards the effects of suchagreements on States members of the organizationsconcerned. This will be the subject of a second investi-gation.

(a) Is the international organization a third party inrelation to certain treaties between States ?

92. We must begin by stating the problem in relation toa special treaty which, in principle, is unique for eachorganization. Is the organization a third party in relationto its constituent charter? It does not appear to be aparty to that instrument; moreover, the organizationdoes not in principle come into existence until after itscharter has entered into force. To say that it is a thirdparty does not seem readily acceptable either, since theorganization derives rights and obligations from itsconstituent charter, but to say that these rights andobligations are attributed to it because it has acceptedthem seems hardly satisfactory, since it is in fact from theconstituent charter that the organization derives itsexistence—before it can ask itself any question theorganization must first exist, that is to say, it must referto its constituent charter. In the opinion of the SpecialRapporteur, therefore, no organization can be said to bein the position of a third party in relation to its constituentcharter.

93. The same applies to a treaty amending the constituentcharter. It may even be pointed out that very frequentlythe organization participates, through its organs, in therevision of its constituent charter. Thus it exercises, atleast in part, one of the most specific prerogatives of the"parties" to a treaty: the right to administer the treaty

and to participate in determining its future substance.70

But it may perhaps be said that these comments are soobvious they go without saying, and that they have neverbeen challenged or caused any difficulty. Thus the 1969Convention, which followed general principles and couldnot deal with special cases, would not call for any sup-plementary provision on this point.

94. The question becomes more difficult in the caseof treaties to which a certain number of States membersof the organization, but not all, are parties, usually,with a few States which are not members of the or-ganizations, and when, in addition, the treaty assigns tothe organization or one of its organs new functionsand hence rights and obligations. That is a very frequentcase: it enables the organization to develop in a rationalway, avoiding the onerous solution of setting up a separateorganization for each treaty.71 But here it must be acceptedthat initially the organization is manifestly a third partyin relation to the treaty; the relationship of the organizationto the treaty could to thus normally come within thescope of rules based on articles 34 to 38 of the 1969Convention. To examine the merits of such a solution,it is necessary to refer to the very essence of the regimeestablished by the Convention, to describe briefly thepractice of organizations and, finally, to draw the con-clusions which follow.

95. Where the purpose of a treaty is to confer rightsand obligations on a third party, in this case the organ-ization or one of its organs, the strictest regime appliesand in principle (article 35) the organization must ex-pressly accept its obligations in writing. The exact interpret-ation of such a rule in the case of an organization isdebatable, but it excludes any tacit or implicit acceptance.Once the situation of the organization is thus establishedin relation to the treaty, the question arises whether itcan be unilaterally modified by the parties to the originaltreaty. The 1969 Convention deals with this question inarticle 37; it naturally allows the parties to the originaltreaty and the third State, or in this case the organization,to settle the question as they see fit; but in addition,article 37 establishes presumptions for the case in whichthe will of those concerned is not established. Where anobligation has arisen for the third State, it is presumedthat its consent is necessary if the obligation is to berevoked or modified. Conversely, in the case of rightsit is presumed that the consent of the third State is notrequired.

96. In their replies to the questionnaire, the organizationsconsulted reported abundant practice which is sufficient toshow that this is an important point. Some of the repliesmerely noted that the organization is obliged to complywith such treaties in so far as they do not conflict with itsconstituent charter; others pointed out that some con-ventions have created rights for certain organizationswithout those organizations having expressly given theirconsent (for instance, article 6 ter of the Convention of

69 Paras. 23 et seq.

70 Consequently, organizations which are not the depositariesof their original constituent charter claim, and generally obtain,deposit of the acts revising those charters.

71 See Yearbook. .. 1972, vol. II, pp. 189-190, documentA/CN.4/258, paras. 58-60.


Paris for the Protection of Industrial Property as revisedat Lisbon in 1958 72), which is, moreover, in conformitywith article 36 of the 1969 Convention. But the dominantfeeling, though not elaborated by writers, is certainlythat the consent of the organization is necessary, thoughit can be given in the most diverse forms. As one or-ganization observed, the actual principle of the need forconsent need not be questioned: this view is confirmedby the 1947 Convention on the Privileges and Immunitiesof the Specialized Agencies, which is an importantprecedent. Many other examples are given in the replies;they establish the formal character of the acceptanceby the organization of certain functions provided for inmultilateral or bilateral treaties between States.73 It isalso possible, however, to give numerous examples ofimplicit acceptance; this is recognized, for example, inthe case of treaties whose text is adopted within one of theprincipal organs of the organization.74 Similarly, it maybe considered that when an organization urges States tobecome parties to a convention, that implies that theorganization, for its part, accepts the functions andobligations assigned to it by the convention.75 Finally,there are innumerable examples in which acceptance of afunction such as that of depositary is effected simply byperforming the function when the time comes.

97. It can therefore be said that in all these cases theconsent of the organization is always required, but thatit is not subject to any condition as to form. On theother hand, there is nothing in the practice to suggest

72 WIPO, Manual of Industrial Property Conventions, FirstVolume (Geneva, n.d.) , section F 1.

73 For instance, the resolution of 30 September 1968 of theGeneral Conference of IAEA (IAEA, General Conference, TwelfthRegular Session, 24-30 September 1968, Resolutions and otherdechions (GC (XII)/Resolutions (1968) (Vienna, 1969), p. 7.)authorizing that organization to assume the role envisaged in theTreaty on the Non-Proliferation of Nuclear Weapons (GeneralAssembly resolution 2373 (XXII), annex); the signature of IBRD tocertain agreements (Articles of Agreement of IFC (United Nations,Treatv Series, vol. 264, p. 117) and of IDA (ibid., vol. 439, p. 249);the Indus Waters Treaty 1960 (ibid., vol. 419, p. 215); the 1965Convention on the settlement of investment disputes between Statesand nationals of other States (ibid., vol. 575, p. 259); in the case ofthe 1969 Convention, the General Assembly expressly approved(resolution 2534 (XXIV) of 8 December 1969), paragraph 7 of theannex to the Convention after the representative of the Secretary-General had explained to the Conference that such approval wasnecessary (see Official Records of the United Nations Conferenceon the Law of Treaties, Second Session, Summary records of theplenary meetings and of the meetings of the Committee of the Whole(United Nat ions publication, Sales N o . E.70.V.6), pp . 149-150,26th plenary meeting, paras. 71-72). F o r the Convention of21 February 1971 on Psychotropic Substances (United Nat ionspublication, Sales N o . E.73.XI.3), the Economic and Social Council,by its resolution 1576 (L), of 20 May 1971, formally accepted thefunctions assigned to it by that Convention.

74 F o r example, the International Convention on the Eliminationof All Forms of Racial Discrimination adopted by the GeneralAssembly by resolution 2106A (XX) of 21 December 1965; theInternational Covenant on Economic, Social and Cultural Rights,and the International Covenant on Civil and Political Rightsadopted by the General Assembly by resolution 2200A (XXI) of16 December 1966.

7!i Economic and Social Council resolution 833B (XXXII) of3 August 1961 and General Assembly resolution 1774 (XVII) of7 December 1962, relating to the Single Convention on NarcoticDrugs of 30 March 1961 (United Nat ions, Treaty Series, vol. 520,p . 204).

that an organization can oppose the abolition of functionsentrusted to it; if such functions are to be modified, it isnormal for the organization to be consulted and itsconsent required. These procedures thus depart consider-ably from the provisions of the 1969 Convention, andthis is easy to understand. A State has sovereign powerof which the law of treaties must take account; an or-ganization, on the contrary, is entirely concerned withthe service to be rendered to the human communitieswhich may appeal to it. It is therefore natural that nocondition as to form should be attached to the consentof the organization, and that it should not be able toinvoke any "subjective right" to retain a function whichall the States that instituted that function have decidedto abolish. On the other hand, consent to accept newfunctions is always necessary, for several reasons. Firstof all, the organization must be able to verify that itis legally competent under its constituent charter toperform the functions to be assigned to it, and that ithas the material means to perform them. Secondly, thegroup of States bound by the constituent charter ispractically never identical with the group of States partiesto a convention extending the powers of the or-ganization; 76 if this difference is not to lead to distortions,it is necessary to take certain precautions, particularly infinancial matters. In practice, the cost of executing theconvention is so distributed that States which are notmembers of the organization, but are parties to theconvention, bear their part; this individualization of thefinancial burden of the convention also makes it possible,though the practice is not uniform, to exempt frompayment States which are members of the organization,but not parties to the convention.

98. Subject to further study of the problem later, theSpecial Rapporteur therefore concludes that this is afrequent and important case for which solution identicalwith those of the 1969 Convention would not be adequate;the text of that Convention would therefore need fairlyextensive adaptation.

(b) Are States members of an international organizationthird parties in relation to the agreements concluded bythat organization ?

99. Before answering this question, the form of whichhas deliberately been made rather provocative, we shouldconsider its practical scope. In the case of a treaty con-cluded by an international organization and providingonly for rights for its member States, for instance aheadquarters agreement, the principle laid down by the1969 Convention in article 36 could be applied withoutgreat disadvantage: member States could normallyinvoke such rights since their consent would be presumed;the organization, with the agreement of the State withwhich it had contracted, could amend or abrogate theagreement without the specific consent of the memberStates (article 37, paragraph 2 of the 1969 Convention),but that situation would not present any great dis-

76 If the groups of States were identical, could it be considered,at least in certain cases, that the problem was simplified and theconsent of the organization rendered unnecessary, at least formally ?The answer is debatable.


avantages, since it is obvious that the member Statesare represented in the organization and collectivitydetermine its will; in other words, the member Stateswould not have to consent individually in a mannerwhich might be described as external, to the modificationof their rights under the Convention, but they wouldin fact consent collectively through the organizationitself, by its internal procedures. Thus the case of theheadquarters agreement seems relatively simple, as certainorganizations have pointed out.

100. The difficulties begin when obligations are createdfor the States members of an organization by an agreementconcluded by that organization. The problem is all themore serious because there are very few agreementswhich create only rights for the States members of anorganization without providing, in one way another, forsome obligation, and because, as has already been said,where there is a mixture of rights and obligations it isthe strictest rules which should in principle prevail."

101. On the basis of purely formal reasoning, does itnot follow from a rule similar to that of the 1969 Con-vention that, failing express consent, the agreements ofinternational organizations will have no legal effect on themember States without their explicit consent ? Is not sucha solution in conflict with practical requirements and evenwith the necessities of the proper functioning of inter-national organizations ? If these two questions areanswered affirmatively, one is tempted to propose a ruledifferent from that deriving from the 1969 Convention.78

102. It is difficult to draw from the practice a conclusionwhich cannot be contested. At the very least, beforereferring to a few date, it is necessary to make a distinctionwhich seems to follow from the general principles of thelaw of treaties. Before determining what might be thecontent of the obligation of a member State, it is, indeed,necessary to determine with respect to whom the obligationof the member State would exist. For it may be imaginedthat the obligations assumed by the organization underan agreement with a State A are directly binding on themember States with respect to State A; in that case, theagreement would have a direct effect on the members ofthe organization. It may also be imagined that, in accord-ance with the most classical rules, an agreement betweenthe organization and State A as such would have no effecton the member States, but that they would have anobligation to respect, or even to execute, such an agreementby virtue of the rules of the constituent charter of the or-ganization, though they would have that obligationonly with respect to the organization itself, not with respectto State A.

103. These two situations are legally very different. Inthe first, the organization negotiates both on its own

behalf and on that of the member States; legally, itrepresents the member States in all agreements. In thesecond situation, the organization commits only itself,but in its relations with its own members it has statutorilya strong position which enables it to fulfil its undertakingsunder the best possible conditions. It will also be notedthat the legal personality of the organization is establishedmore strongly and independently in this latter case:for State A deals only with the organization, which issolely responsible for executing the treaty. The abovedistinction may perhaps help to clarify the practice.

104. The practice contains some indications which atfirst sight seem favourable to a classical analysis and torespect for the principle of the relativity of treaties,even with regard to the members of an internationalorganization in relation to an agreement concluded by theorganization. In principle, to deal with an internationalorganization is not the same thing as to deal with itsmembers: one need only refer to all the agreementsconcluded by international organizations on questions offinance and development: it is clear that only the or-ganization and not its member States as such have thestatus of "parties" to these agreements.'9 What proves thereality of this situation is that State A, which concludesan agreement with an organization, can demand, andin fact sometimes does demand, that the States membersof the organization, or some of them, shall intervene as"parties" to the agreement, either by undertaking toguarantee the obligations of the organization or bycommitting themselves "for matters within their com-petence".80

105. The practice also shows that within eachorganization there prevails a general principle accordingto which member States co-operate in all the measuresdecided on by the organization, and assist it in the ac-complishment of its task and the attainment of its purposes.To establish the general content of such an obligationit is necessary to refer to all the relevant rules of the or-ganization, that is to say, first of all to its constituentcharter, but also to duly established practices. Sometimesthese obligations are expressed in very general terms 81

sometimes they are more precise and occasionally theytake account of particular agreements concluded by theorganization.82 But it is clear that in every internationalorganization the member States commit themselves withrespect to the organization by general obligations to

" This is true, at least, of the forms of consent required; theSpecial Rappor teur recognizes that where the rules concerningrevocation or modification are concerned the problem is lesssimple, but this is not the place to discuss it.

78 This certainly appears to follow from the provisional reportof Mr . R. J. Dupuy which proposes the following formula: "Anagreement lawfully concluded by an international organization islegally binding on all its members ." (op. cit., p . 108.) (Translationby the Secretariat.)

79 Excepting, of course, the case in which some member Statesintervene expressly as parties and the case—which need not beconsidered here—in which an organization being terminated examinesthe question of succession to its obligations.

80 The European Economic Communi ty has had extensiverecourse to mixed agreements in which, on the Community side,the Community as such and each of its member States appearas "part ies".

81 F o r the United Nat ions , see Article 1, paragraph 4, Article 36and Article 73 d of the Char te i .

82 The Treaty establishing the European Economic Community(United Nat ions, Treaty Series, vol. 298, p . 11) contains wordingwhich has often been commented on by writers and referred to injudicial decisions, in particular article 228, paragraph 2, whichprovides that the agreements of the Community "shall be bindingon the institutions of the Community and on Member States"(P. Pescatore, "Les relations exterieures des Communautes e u r o -


co-operate and that, even in the absence of any expressreference, that obligation imposes duties on them withrespect to the agreements of the organization: the passiveobligation to respect those agreements and not to hindertheir execution and the active obligation to facilitate theexecution of the agreements within the limits of theirgeneral undertakings. In no case does it seem possiblefor a member State to ignore agreements regularly con-cluded by an organization.

106. From the foregoing, it seem possible to draw afew conclusions:

(a) Nothing in the practice precludes the idea thatan organization concluding an agreement with a thirdState (or with another organization) wishes to create adirect obligation for one or more or all of its memberStates with respect to its co-contractor. In that case amechanism similar to that of article 35 and 37 of the 1969Convention may be imagined. It would then appearnormal not only that the consent of the member Statesshould be required, but that it should be express and inwriting, and that these direct relations with a partnerof the organization should not be capable of beingmodified or revoked without their consent, since obli-gations of the member States are involved.83 But it appearsthat this possibility has so far remained theoretical; ifthe partners of the organization wish to enter into othercommitments, it is in their interests that the memberStates should become "parties", alongside the or-ganization.

(b) The agreements concluded by the organizationcannot be ignored by the member States in their relationswith the organization. These agreements create obli-gations which are more or less limited, depending on theorganization, the subject of the agreements and how theytouch on the competence of the member States. Theycreate at least a general obligation of conduct involvingthe duty of every member State to respect the undertakingsof the organization and co-operate with it. In this senseit might be said, though not entirely correctly, that themember States, though not "parties" to the agreementsof the organization, are not third parties with respect tothem.

107. These are the observations which the SpecialRapporteur submits to the International Law Com-mission, on an entirely provisional basis, regarding theproblem of the effect of treaties on third parties in thecase of international organizations.

peennes", Recueil des cours de V Academie de droit international deLa Haye, 1961-11, vol. 103 (Leyden, Sijthoff, 1962), pp. 133 et seq.)and article 5 which reads: "Member States shall take all generalor particular measures which are appropriate for ensuring thecarrying out of the obligations arising out of this Treaty or resultingfrom the acts of the institutions of the Community. They shallfacilitate the achievement of the Community's aims.

They shall abstain from any measures likely to jeopardize theattainment of the objectives of this Treaty".

83 It may also be imagined that this express written consent isgiven, not with regard to a particular agreement, but en bloc for amore or less extensive variety of agreements, in the constituentcharter of the organization. In that case the precise position of themembers with respect to agreements of this kind concluded bythe organization would have to be defined according to the preciseprovisions of the constituent charter.

ANNEX

Questionnaire prepared by the Special Rapporteur

A. QUESTIONS INTENDED FOR ALL THE INTERNATIONAL ORGANIZ-

ATIONS TO WHICH THE QUESTIONNAIRE HAS BEEN ADDRESSED

1. Possibilities that may be open to an international organization,by virtue of treaties concluded under the auspices of your organiz-ation, of participating in an agreement on behalf of a territoryit represents

This question was raised by the United States of America in itswritten statement submitted to the International Court of Justicein connexion with the advisory opinion on Namibia in 1971.a

In addition, two Conventions sponsored by IMCO—the Inter-national Convention relating to Intervention on the High Seas inCases of Oil Pollution Casualties (article XIII) and the InternationalConvention on Civil Liability for Oil Pollution Damage(article XVII)—both published in the Juridical Yearbook""—alsocontain some interesting provisions on this point.

2. Recourse in the conclusion of agreements to "powers", to otherdocuments proving the capacity to represent or to documentsestablishing a delegation

This is an important practical question. It should be broadenedto include the problem of "delegations" of one organ to anotherand to a subsidiary organ.

3. Distinction between internal agreements having an internalcharacter as regards the organization and those which have anexternal character. Is this distinction recognized? Is anythingknown about the problems it covers ?

Internal agreements would include all the agreements betweenprincipal organs or between subsidiary organs. It is not so sure thatagreements between the organization and a member State wouldalso be internal agreements, even if the State signs in its capacityas a State member.

4. The organization's practice with regard to agreements concludedby its subsidiary organs: are these agreements of the organizationor not ?

5. Does the organization know of any agreement it has concludedwith a view to applying other international agreements or treaties ?Does the fact that these agreements are governed by the instru-ments they are intended to execute have legal consequences(power to conclude the agreements, legal status) ?

6. With regard to multilateral treaties between States, is the organiz-ation in the position of "a party to these treaties", "an associate",or "a person bound to respect these treaties" ?

7. Are there any actual cases in which the position of the Statesmembers of an organization in connexion with an agreementconcluded by the organization—an agreement to which thoseStates are not parties stricto sensu—has been questioned? Inother words, do you know of any cases where an agreementconcluded by an organization has had certain consequences forthe member States of the organization which are not partiesstricto sensu to the agreement ?

a I.C.J. Pleadings, Legal Consequences for States of the ContinuedPresence of South Africa in Namibia (South West Africa) notwith-standing Security Council Resolution 276 (1970), vol. I, pp. 884-887.

h United Nations, Juridical Yearbook, 1969 (United Nationspublication, Sales No. E.71.V.4), pp. 169 and 180 respectively.


8. What criteria have been applied by the organization for theregistration of the agreements to which it is a party ?

B. QUESTION INTENDED ONLY FOR THE UNITED NATIONS

Exact position of the United Nations with regard to the 1946 Con-vention on the Privileges and Immunities of the United Nations

I have several references to statements by representatives of theSecretary-General on this point; I do not wish to have an officialstatement on the subject, but only the most up-to-date referencesto positions already taken.

C. QUESTION INTENDED ONLY FOR THE SPECIALIZED AGENCIESAND IAEA

Statements setting out: (1) the position of the specialized agencieswith regard to the Convention of 1947 on the Privileges and Im-munities of the Specialized Agencies; (2) the position of IAEAwith regard to the Convention on the Privileges and Immunititiesof IAEA

What I want to know is whether the agencies consider themselvesto be parties to these agreements and if any specific legal problemsin connexion with them have been discussed.

PRIORITY TO BE GIVEN TO THE TOPIC OF THE LAW OF THE NON-NAVIGATIONALUSES OF INTERNATIONAL WATERCOURSES (PARA. 5 OF SECTION I OF GENERAL

ASSEMBLY RESOLUTIONS 2780 (XXVI) AND 2926 (XXVTI))

[Agenda item 5 (b)]

DOCUMENT A/CN.4/270

Supplementary report on the legal problems relating to the non-navigational uses of international watercoursesrequested by the General Assembly in resolution 2669 (XXV)

Advance report submitted by the Secretary-Generalpursuant to General Assembly resolution 2926 (XXVII)

CONTENTS

[Original: text English][11 April 1973]

Paragraphs Page

Introduction 1-2 95

A. Plan of the supplementary report 3 95

B. Information received for inclusion in the supplementary report 4-5 95

C. Progress of work on the various parts of the supplementary report 6-12 96

Introduction

1. By resolution 2669 (XXV) of 8 December 1970,entitled "Progressive development and codification ofthe rules of international law relating to internationalwatercourses", the General Assembly requested theSecretary-General

to continue the study initiated by the General Assembly inresolution 1401 (XIV) in order to prepare a supplementary reporton the legal problems relating to the utilization and use of inter-national watercourses, taking into account the recent applicationin State practice and international adjudication of the law ofinternational watercourses and also intergovernmental and non-governmental studies on this matter.

2. By resolution 2926 (XXVII) of 28 November 1972,the General Assembly requested the Secretary-General

to submit, as soon as possible, the study on the legal problemsrelating to the non-navigational uses of international watercoursesrequested by the General Assembly in resolution 2669 (XXV) of8 December 1970, and to present to the International Law Com-mission at its twenty-fifth session an advance report on such study.

Pursuant to this resolution, the Secretary-General submitsthe present report.

A. Plan of the supplementary report

3. It should be recalled that the Secretary-General'sreport on "Legal problems relating to the utilization and

use of international rivers", prepared pursuant to GeneralAssembly resolution 1401 (XIV) of 21 November 1959,was issued as a mimeographed document1 in 1963. Asrequested by that resolution, the report contained:(a) information provided by Member States regardingtheir laws and legislation in force on the matter; (b) asummary of existing bilateral and multilateral treaties;(c) a summary of decisions of international tribunals,including arbitral awards; and (d) a survey of studiesmade or being made by non-governmental organizationsconcerned with international law. The supplementaryreport, which is now in process of preparation pursuantto General Assembly resolution 2669 (XXV), is intendedto include the same categories of information as theinitial report, together with relevant studies made byintergovernmental organizations.

B. Information received for inclusion in the supplementaryreport

4. In the report on the work of its twenty-third session,the International Law Commission recorded its under-standing that in preparing the "supplementary report" the

1 A/5409. To be printed in Yearbook ... 1974, vol. II (PartTwo). An important part of the material summarized in thatdocument was published in a volume in the United NationsLegislative Series entitled Legislative texts and treaty provisionsconcerning the utilization of international rivers for other purposesthan navigation (United Nations publication, Sales No. 63.V.4).

95


Secretary-General "will certainly invite Governments ofMember States to provide him with additional materialsregarding legislative texts and treaty provisions, as wellas any other relevant information which may be usefulas evidence of their practice".2 On 22 November 1971, theSecretary-General addressed a circular note to Govern-ments of Member States requesting them to send him, notlater than 1 October 1972, the additional materialsand information referred to in the understanding of theInternational Law Commission quoted above. In thereport on the work of its twenty-fourth session, theCommission observed "that the problem of pollutionof international waterways was of both substantialurgency and complexity. Accordingly, it requested theSecretariat to continue compiling the material relatingto the topic with specific reference to the problems ofthe pollution of international watercourses".3 On22 September 1972, the Secretary-General addressed acircular note to Governments of Member States by whichafter having referred to his first note mentioned above,requested them to send him, not later than 1 July 1973,the relevant materials and information, with specificreference to the question of the pollution of the interna-tional watercourses as indicated in the observation of theInternational Law Commission quoted above. On27 December 1972, a similar circular letter was also sentto intergovernmental organizations.

5. Up to 15 April 1973, information had been receivedfrom nine Member States. Of these, eight had sent thetexts of the relevant treaties to which they were parties;only one Member State had sent information regarding itsnational legislation in force on the matter. In addition,three international organizations had transmitted materialsconcerning their work on the subject.

C. Progress of work on the various partsof the supplementary report

6. The supplementary report is being prepared on thebasis of the information provided by Member States andintergovernmental organizations as well as on the basisof the relevant research work undertaken by the Secre-tariat.

2 Yearbook... 1971, vol. II (Part One), p. 350, documentA/8410/Rcv.l, para. 121.

3 Yearbook ... 1972, vol. II, p. 324, document A/8710/Rev.l,para. 77.

7. As in the initial report, the part of the supplementaryreport relating to national legislation is expected toinclude information concerning a very limited number ofMember States. So far, as already indicated.4 only oneMember State has made available national legislativetexts to be reproduced in this part.

8. A sizable number of relevant bilateral and multilateraltreaties have been collected. Of these, nearly 60 treatieshave been summarized and made ready for inclusionin the supplementary report. The summary of the othertreaties is now being prepared.

9. As yet, no decisions of international tribunals, otherthan those included in the initial report, have been found.The supplementary report might, therefore, appearwithout containing any information of this nature.

10. As regards that part of the supplementary reportconcerning the studies made or being made by intergovern-mental organizations, the work being done within, orunder the auspices of, the United Nations has beenexamined. Specifically, the relevant resolutions and reportsof the Economic and Social Council and the activitiesof the Water Resources Development Centre of theDepartment of Economic and Social Affairs of theSecretariat have been considered for inclusion in thesupplementary report. However, the relevant work doneby the regional economic commissions, by specializedagencies and by the International Atomic Energy Agency,as well as by other intergovernmental organizations, willbe examined on the basis of information received in replyto the circular letters of the Secretary-General alreadyreferred to.5 In addition, the preparatory work for theUnited Nations Conference on the Human Environmentheld at Stockholm in 1972, as well as the relevant resol-utions of that Conference, will be considered.

11. The part of the supplementary report concerningstudies made or being made by non-governmental or-ganizations concerned with international law will includethe available relevant work done by the Institute ofInternational Law, the Inter-American Bar Associationand the International Law Association.

12. In conclusion, the preparation of the supplementaryreport is expected to be completed before the opening ofthe twenty-sixth session of the International Law Com-mission.

4 See para. 5 above.B See para. 4 above.

MOST-FAVOURED NATION CLAUSE

[Agenda item 6]

DOCUMENT A/CN.4/266

Fourth report on the most-faroured-nation clause, by Mr. Endre Ustor, Special Rapporteur

Draft articles with commentaries (continued) *

[Original text: English][ 7March 1973]

CONTENTS

Page

Abbreviations 97

Article 6. Presumption of unconditional character of the clause 98

Commentary 98

Article 7. The ejusdem generis rule 102

Commentary 102

Article 8. Acquired rights of the beneficiary State 108

Commentary 108

ANNEX. Resolution adopted on 10 September 1969 by the Institute of International Law at itsEdinburgh session (4-13 September 1969) 116

ABBREVIATIONS

GATT General Agreement on Tariffs and Trade

I.C. J. International Courts of Justice

I.C.J. Pleadings I.C.J., Pleadings, Oral Arguments, Documents

I.C.J. Reports I.C.J., Reports of Judgments, Advisory Opinions and Orders

UNCTAD United Nations Conference on Trade and Development

* For draft articles 1-5, see the third report.

97


Article 6. Presumption of unconditional characterof the clause

Except when in appropriate cases most-favoured-nationtreatment is accorded under the condition of materialreciprocity, the most-favoured-nation clause is uncon-ditional, i.e., the granting State is obliged to accord andthe beneficiary State is entitled to receive most-favoured-nation treatment irrespective of whether the favoursaccorded by the granting State to any third State areaccorded gratuitously or against compensation.

COMMENTARY

(1) Different scholars have shown great skill in classifyingthe diverse types of the clause. For the present purposes itseems enough to retain three basic types: the conditionalclause; the unconditional clause; and the clause condi-tional upon material reciprocity, which is a variety ofthe first.

(a) The unconditional and the conditional form

(2) With regard to the notion and history of the "con-ditional" most-favoured-nation clause, the reader isreferred first to the relevant passages in the workingpaper on the most-favoured-nation clause in the law oftreaties prepared by the Special Rapporteur,1 and in hisfirst2 and second 3 reports. The views of the League ofNations Economic Committee are reproduced in anannex to the first report.* The paragraphs which followprovide further explanation.

(3) The difference between the unconditional clause andthe conditional form of the clause as it appeared inUnited States practice until 1923 was well explained bythe Department of State in 1940:

. . . Under the most-favoured-nation clause in a bilateral treaty oragreement concerning commerce, each of the parties undertakes toextend to the goods of the country of the other party treatment noless favorable than the treatment which it accords to like goodsoriginating in any third country. The unconditional form of themost-favored-nation clause provides that any advantage, favor,privilege, or immunity which one of the parties may accord to thegoods of any third country shall be extended immediately and un-conditionally to the like goods originating in the country of theother party. In this form only does the clause provide for completeand continuous nondiscriminatory treatment. Under the conditionalform of the clause, neither party is obligated to extend immediatelyand unconditionally to the like products of the other party theadvantages which it may accord to products of third countries inreturn for reciprocal concessions; it is obligated to extend suchadvantages only if and when the other party grants concessions"equivalent" to the concessions made by such third countries.. .6

1 Yearbook... 1968, vol. II, p. 167, document A/CN.4/L.127,paras. 9-10.

2 Yearbook... 1969, vol. II, pp. 161-162 and 171, documentA/CN.4/213, paras. 25-27 and 84.

3 Yearbook... 1970, vol. II, p. 208, document A/CN.4/228and Add.l, paras. 51-53.

4 Yearbook... 1969, vol. II, p. 175, document A/CN.4/213,annex I.

5 United States of America, Department of State, Bulletin No. 58of 3 August 1940, quoted in M. Whiteman, Digest of InternationalLaw, vol. 14 (Washington, D.C., U.S. Government Printing Office,1970), p. 751.

(4) Urging the Senate to approve the change in the policyof the United States in matters of trade, Secretary ofState Hughes wrote in 1924:

. . . It was the interest and fundamental aim of this country tosecure equality of treatment but the conditional most-favored-nation clause was not in fact productive of equality of treatmentand could not guarantee it. It merely promised an opportunity tobargain for such treatment. Moreover, the ascertaining of whatmight constitute equivalent compensation in the application of theconditional most-favored-nation principle was found to be difficultor impracticable. Reciprocal commercial arrangements were buttemporary makeshifts; they caused constant negotiation and createduncertainty. Under present conditions, the expanding foreigncommerce of the United States needs a guarantee of equality oftreatment which cannot be furnished by the conditional form of themost-favored-nation clause.

While we were persevering in the following of the policy ofconditional most-favored-nation treatment, the leading commercialcountries of Europe, and in fact most of the countries of the world,adopted and pursued the policy of unconditional most-favored-nation treatment: Each concession which one country made toanother became generalized in favor of all countries to which thecountry making the concession was obligated by treaty to extendmost-favored-nation treatment... As we seek pledges from otherforeign countries that they will refrain from practicing discrimination,we must be ready to give such pledges, and history has shown thatthese pledges can be made adequate only in terms of unconditionalmost-favored-nation treatment.6

(5) Stated simply, the conditional clause served thepurposes of the United States so long as it was a netimporter and its primary aim was to protect a growingindustrial system. When the position of the UnitedStates in the world economy changed after the FirstWorld War, the conditional clause was inadequate. Theessential condition for a successful penetration of inter-national markets, that is, the elimination of discriminationagainst American products, could only be achievedthrough the unconditional clause.7

(6) Not only did the commercial policy of the UnitedStates and the relevant treaty practice change from theuse of conditional clauses to that of unconditional ones,a shift in the interpretation of the remaining conditionalclauses also took place. At the time of the conclusion ofthe Treaty of Friendship, Commerce and ConsularRights of 8 December 1923 between the United Statesand Germany, the American position was stated bySecretary of State Hughes as follows:

There is one apparent misapprehension which I should like toremove. It may be argued that by the most-favored-nation clausesin the pending treaty with Germany we would automatically extendprivileges given to Germany to other Powers without obtaining theadvantages which the treaty with Germany gives to us. This is amistake. We give to Germany explicitly the unconditional most-fav-ored-nation treatment which she gives to us. We do not give uncon-ditional most-favored-nation treatment to other Powers unless theyare willing to make with us the same treaty, in substance, that

6 G. H. Hackworth, Digest of International Law, vol. V (Washing-ton, D.C., U.S. Government Printing Office, 1943), p. 273.

7 R. C. Snyder, The Most-Favored-Nation Clause: An Analysiswith Particular Reference to Recent Treaty Practice and Tariffs(New York, King's Crown Press, Columbia University, 1948),p. 243; and E. T. Usenko, chapter on commercial treaties in StateInstitute of Law of the Soviet Academy of Sciences [F.I.Kozhevnikovet al. eds.], Kiirs mezhdunarodnogo prava, vol. IV (Moscow, Nauka,1968), p. 251.

Most-favoured-nation clause 99

Germany has made. Most-favored-nation treatment would be givento other Powers only by virtue of our treaties with them, and thesetreaties, so far as we have them, do not embrace unconditional most-favoured-nation treatment. We cannot make treaties with all thePowers at the same moment, but if the Senate approves the treatywhich we have made with Germany we shall endeavor to negotiatesimilar treaties with other Powers and such other Powers will notobtain unconditional most-favored-nation treatment unless theyconclude with us treaties similar to the one with Germany.8

(7) Ten years later, however, Secretary of State Hull tookthe less rigid position that the according of a benefit toa country pursuant to an unconditional most-favoured-nation clause constitutes according it freely within theterms of a conditional most-favoured-nation clause, withthe result that the benefit should be accorded immediatelyand without compensation pursuant to the conditionalclause. Consistent with this interpretation, when in 1946 theUnited States sought waivers from most-favoured-nationclauses in existing treaties, for tariff preferences to beaccorded on the basis of reciprocity to most Philippineproducts following Philippine independence, such waiverswere sought from countries with which the United Stateshad treaties containing such clauses which were con-ditional as well as from those the treaties with whichcontained clauses which were unconditional.9

(8) The use of the conditional clause, as practised until1923 by the United States, completely disappeared fromthe international scene. The reasons for this are statedby Virally as follows:

. . . the elimination of automatism from the most-favoured-nationclause, ostensibly better to ensure reciprocity, fails to achieve itsaim and renders the clause itself completely useless. That fact,together with the trend towards trade expansion which currentlycharacterizes the trade policy of all States, explains why the con-ditional clause has generally been abandoned in recent treatypractice.10

(9) Because of its general abandonment the conditionalform of the clause is now of historical significance only.All available sources agree that this form of the clausehas definitely fallen into disuse.11

(b) The clause and reciprocity

(10) When speaking of reciprocity in relation to the most-favoured-nation clause we have to keep in mind thatnormally most-favoured-nation clauses are granted on areciprocal basis, i.e., both parties to a bilateral treatyor all parties to a multilateral treaty accord each othermost-favoured-nation treatment in a defined sphere ofrelations. This formal reciprocity is a normal feature ofthe unconditional most-favoured-nation clause—one

8 M. Whiteman, op. cit., p. 754.9 Ibid., p. 753.10 M. Virally, "Le principe de reciprocity en droit international

contemporain", Recueil des cours de VAcademie de droit interna-tional de La Haye, 1967-111 (Leyden, Sijthoff, 1969), vol. 122, p. 74.

11 R. C. Snyder, op. cit., p. 56. See also G. Jaenicke, "Meist-begiinstigungsklausel" in K. Strupp, Worterbuch des Volkerrechts,2nd ed. [Schlochauer], Vpl. II (Berlin, de Gruyter, 1961), p. 498;P. Level, "Clause de la nation la plus favorisee", in EncyclopedieDalloz—Droit international (Paris, Dalloz, 1968), vol. I, p. 333,para. 5; E. Sauvignon, La clause de la nation la plus favorisee (Gre-noble, Presses Universitaires de Grenoble, 1972), p. 23.

could say it is its essential ingredient. Unilateral most-favoured-nation clauses occur only exceptionally at thepresent time.12 Unilateral most-favoured-nation clauses,coupled with formal reciprocity, were included in thePeace Treaties which the Allied and Associated Powersconcluded in 1947 with Bulgaria 13 (article 29); Hungary 14

(article33);Romania 15(article31);Finland16(article 30);and Italy 17 (article 82). The same clause was included inthe State Treaty for the re-establishment of an independentand democratic Austria (article 29).18 By the merestipulation of formal reciprocity a unilateral clause doesnot become bilateral (as seen by the Rapporteur of theInstitute of International Law19). This can be illustratedby the following quotation from article 33 of the Hun-garian Peace Treaty.

. . . the Hungarian Government shall... grant the followingtreatment to each of the United Nations which, in fact, reciprocallygrants similar treatment in like matters to Hungary:

(a) In all that concerns duties and charges o n . . . the UnitedNations shall be granted unconditional most-favoured-nationtreatment;.. .20

The meaning of this clause is clear: although the UnitedNations' right to claim most-favoured-nation treatmentwas subject to the offering of reciprocity it still was aunilateral right; the provision did not entitle Hungaryto demand most-favoured-nation treatment.

(c) The clause combined with material reciprocity (recipro-cite trait pour trait)

(11) While the American form of the conditional clausecan now be deemed to have virtually disappeared, themost-favoured-nation clause, coupled with the conditionof material reciprocity still exists. It is to be noted,however, that the application of this form of the clauseis restricted to certain fields, such as consular immunitiesand functions, matters of private international law andthose matters customarily dealt with by establishmenttreaties.

(12) It was indicated by Mr. Richard Kearney, at thetwentieth session of the International Law Commission,21

that the shift in the policy of the United States fromconditional to unconditional most-favoured-nation treat-ment with regard to commercial matters in the early1920s had not been accompanied by a shift in relationto consular rights and privileges, with respect to whichthe use of the conditional clause continued. This situationis illustrated by the following excerpt from a letter dated

12 See Yearbook ... 1972, vol. II, p. 164, document A/CN.4/257and Add.l , para. 7 of the commentary to articles 2 and 3.

13 United Nations, Treaty Series, vol. 41, p. 21.14 Ibid., p. 135.16 Ibid., vol. 42, p . 3.16 Ibid., vol. 48, p . 203.17 Ibid., vol. 49, p. 3.18 Ibid., vol. 217, p. 223.18 P. Pescatore, "La clause de la nation la plus favorisee dans les

conventions multilate>ales", Annuaire de Vlnstitut de droit interna-tional, 1969 (Basle), vol. 53, t. 1, p. 204, foot-note 3.

20 United Nations, Treaty Series, vol. 41, p. 204.21 Yearbook... 1968, vol. I, p. 186, 976th meeting, para. 8.


20 January 1967 from the Department of State to theSenate Foreign Relations Committee in regard to aprovision in the Consular Convention with the USSR,22

then before the Committee, relating to immunity incriminal cases for consular officers:

The United States has thirty-five agreements presently in forcewith other states requiring this country to afford most-favored-nation treatment to consular officers and, occasionally, to consularemployees of those States. A list of these thirty-five States is givenas an enclosure to this letter. Based upon a recent survey, twenty-seven of those States have consular establishments in the UnitedStates, and include approximately 577 entitled consular personnel.A list of these States is also given as an enclosure to this letter. Thecriminal immunity provision contained in article 19 of the US-USSR consular convention would be applicable to those personnelshould the sending State concerned agree to give reciprocal treatmentto American consular officers and employees assigned there. OurEmbassies in those twenty-seven States were requested to give theirassessment as to whether most-favoured-nation treatment wouldactually be sought on a reciprocal basis. The replies indicated thatat most eleven States would probably request such treatment, andthat approximately 290 of their foreign consular officers andemployees in the United States would be affected.23

The provision of the Consular Convention of 1 June 1964with the USSR, under consideration was article 19,paragraph 2, which reads as follows:

Consular officers and employees of the consular establishmentwho are nationals of the sending state shall enjoy immunity fromthe criminal jurisdiction of the receiving state.24

(13) No detailed research could be made as to the35 agreements mentioned in the quoted letter, to themost-favoured-nation clauses of those treaties, or to thephraseology involved. It can be safely assumed, however,that most if not all of them are conditional only upon thegranting of material reciprocity (either expressly stipulatedor construed in this sense). This kind of conditional clauseis clearly different from the traditional American formof the conditional clause ("freely", "if the concession wasfreely m a d e . . . " etc.) and its survival is not limited totreaties concluded by the United States 2 5 or to consulartreaties. Examples such as the Hungarian-TurkishConvention regarding conditions of residence of20 December 1926,26 (article 3), and the Finland-TurkeyConvention of commerce and navigation of 2 June 1926,27

(articles 2 and 10 (in section I on conditions of residenceand business)) are given by Suzanne Basdevant in anarticle on the most-favoured-nation clause.28

(14) A more recent instance of such a provision is thefirst paragraph of article 3 of the Convention on conditionsof residence and navigation between the Kingdom of

22 United Nat ions, Treaty Series, vol. 655, p . 213.23 M. Whiteman, op. cit., pp . 752-753. (Italics supplied by the

Special Rapporteur . )24 United Nations, Treaty Series, vol. 655, p . 233.25 Yearbook. .. 1969, vol. I I , pp . 166-167, document A/CN.4 /

213, paras. 56-58.26 League of Nat ions, Treaty Series, vol. LXXII , p . 245.27 Ibid., vol. LXX, p . 329.28 S. Basdevant, "Clause de la nation la plus favorisee" in

A. G. de Lapradelle and J.-P. Niboyet, Repertoire de droit interna-tional (Paris, Sirey, 1929), vol. I l l , p . 480.

Sweden and the French Republic signed at Paris on16 February 1954:29

Subject to the effective application of reciprocity, the nationals ofeach of the High Contracting Parties residing in the territory of theother Contracting Party shall have the right, in the territory of theother Contracting Party, under the same conditions as nationals ofthe most-favoured-nation, to engage in any commerce or industry,as well as in any trade or profession, that is not reserved fornationals.30

(15) Another recent example can be found in the ConsularConvention between the Polish People's Republic andthe Federal People's Republic of Yugoslavia, signedat Belgrade on 17 November 1958,31 article 46 of whichreads as follows:

Each Contracting Party undertakes to accord the other Con-tracting Party most-favoured-nation treatment in all mattersrelating to the privileges, immunities, rights and functions of consulsand consular staff. However, neither Contracting Party may invokethe most-favoured-nation clause for the purpose of requestingprivileges, immunities and rights other or more extensive than thosewhich it itself accords to the consuls and consular staff of the otherContracting Party.33

(16) The clause conditional upon material reciprocitycan be considered a simplified form of the traditionalconditional clause.33

According to Alice Piot:This system seems clearer and more practical than the preceding

one: it does not refer to the counterpart provided by the favouredState, but seeks to establish perfect symmetry between the benefitsprovided by the granting State and by the State benefiting by theclause. In other words, it seeks to establish material reciprocity.This implies a measure of symmetry between the two legislations.As Niboyet says, "this diplomatic reciprocity thus has an inter-national head, but two national feet. It is a triptych"

From the purely logical point of view, this is quite satisfyingintellectually, but not very satisfactory in practice. Quite apart fromthe difficulties which the interpretation of reciprocity always entails,this system has the disadvantage of reducing the benefits, if any,of the most-favoured-nation clause, without eliminating the resultingdisadvantages for the granting State. Of course, the beneficiaryState cannot bring the clause into operation without offering thevery advantages which it claims, but the unilateral nature of thatstep will almost always mean that the reciprocal benefits, althoughtheoretically equivalent, will be very different in practice:.. .M

(17) Clearly the drafters of most-favoured-nation clausescombined with the condition of reciprocity do not aimat treatment of their compatriots in foreign lands equalwith that of the nationals of other countries. (Equalitywith competitors is of paramount importance in mattersof trade and particularly as regards customs duties.)What the y are interested in is a different kind of equality:equal treatment granted by the contracting States to

29 Uni ted N a t i o n s , Treaty Series, vol . 228, p . 137.30 /bid., p . 141.31 Ibid., vol. 432, p . 267.32 Ibid., p . 332.33 Yearbook ... 1969, vol. I I , p p . 166-167, document A /CN.4 /213 ,

pa ra . 58.34 A . Pioi., " L a clause de la na t ion la plus favorisee", Revue

critique de droit international prive (Paris), vol. 45 (January-March1956), N o . 1, pp . 9-10 ( t ranslat ion from French) .


each other's nationals. Hence the view of Level: " . . . Themost-favoured-nation clause combined with the conditionof reciprocity does not seem to be conducive to the unifi-cation and simplification of international relations, afact which deprives the clause of the few merits formerlyattributed to it." 35

(d) Doctrine

(18) In the last century and in the first decades of thepresent one, international doctrine and practice wasdivided on the interpretation of a most-favoured-nationclause which does not explicitly state whether it isconditional or unconditional.36 The division was due tothe then constant practice of the United States accordingto which even if the character of the clause was notspelled out explicitly it was construed as conditional.37

The American position can be traced as far back as 1817when it was stated by Secretary of State Adams:

The eighth article of the treaty of cession [the Louisiana Purchaseof 30 April 1803] stipulates that the ships of France shall be treatedupon the footing of the most-favored-nations in the ports of theceded territory; but it does not say, and can not be understood tomean, that France should enjoy as a free gift that which is concededto other nations for a full equivalent.38

(19) The British and continental position at that timewas that concessions granted for consideration couldproperly be claimed under a most-favoured-nation clause.According to that view:

. . . The basis of the American theory is to be found in the Anglo-Saxon system of contracts and the requirement that advantagesmust be reciprocal for the formation of a contract (consideration).However, this application of the theory is not justified here, for thenation which has acquired equal treatment has paid in advance forthe third-party rights which it may thus acquire, since it has grantedto the other contracting party the same equal treatment and theright to receive the advantages of third part ies . . . The search for"equivalents" designed to pay for the third-party right by conven-tional means imposed on the contracting parties is tantamount tostating that the most-favoured-nation clause in itself has absolutelyno effect. Lastly, from the customs point of view the Americansystem leads to a preferential system based on favours granted tosome nations and refused to others, for States which have amendedtheir tariffs no longer have any equivalents to offer.39

(20) The Institute of International Law in its 1936resolution entitled "The effects of the most-favoured-nation clause in matters of commerce and navigation"expressed the view that:

The most-favourcd-nation clause is unconditional, unless thereare express provisions to the contrary.

Consequently, in matters of commerce and navigation, the clauseconfers upon the nationals, goods and ships of the contracting

35 P. Level, op. cit., p . 338, para. 37 (translation from French).36 S. Basdevant, loc. cit., p . 479, para. 73.37 See C. C. Hyde, "Concerning the interpretation of treaties",

American Journal of International Law (Washington, D.C.), vol. 3,No. 1 (January, 1909), p . 57.

38 Ibid., note 16. See also S. Basdevant, loc. cit., p . 479, para. 75and Yearbook . . . 1969, vol. II , p . 162, document A/CN.4/213,para. 27.

39 S. Basdevant, loc. cit., pp. 479-480, para. 77, quoting, interalia, P . L. E. Pradier-Fodere, Traite de droit international publiceuropeen et americain, suivant les progres de la science et de la pra-tique contemporaines (Paris, Durand et Pedone-Lauriel, 1888),vol. IV, p. 394.

countries, as a matter of right and without compensation, theregime enjoyed by any third country.4 0

Other sources state this rule in general terms not restrictedto the fields of commerce:

If there is any doubt, the most-favoured-nation clause should beconsidered unconditional.11

Since it is liable to limit the application of the clause, the conditioncannot be implied.42

The clause is, in principle, unconditional... Although the highcontracting parties have the option of stating that the clause isconditional, its conditional nature is not presumed and is thus notan essential feature of the clause . . .43

. . . If it is not expressly stated that the clause is conditional, it isagreed. . . that it shall be considered unconditional.44

In the commercial treaty practice of the Soviet Unionand other socialist countries the most-favoured-nationclause is always applied in its unconditional and gratuitousform. This is expressly provided for in many treaties buteven without express provision to this effect most-favoured-nation clauses are understood to grant m.f.n.treatment unconditionally and without compensation.This follows from the fact that the treaties in questiondo not contain any reservation concerning compensationor countervalue.45

In principle, m.f.n. clauses ought to be interpreted uncon-ditionally . . . "those clauses have the same meaning whether thatword [unconditionally] be inserted or not".46

The same writer adds:This rule of interpretation must, however, be qualified by the

exception that it cannot be applied against a country which, as amatter of common knowledge, has adopted the conditional typeof m.f.n. clause as part and parcel of its national treaty policy.47

On that matter a more balanced view was taken beforethe International Court of Justice by the representativeof the United States in the Case concerning the Rightsof Nationals of the United States of America in Morocco(1952) :

40 Yearbook... 1969, vol. II, pp. 180-181, document A/CN.4/213, annex II.

41 P. Guggenheim, Traite de droit international public, 2nd ed.,rev. and augmented (Geneva, Georg, 1967), vol. I, p . 211.

42 P. Level, op. cit., p. 333, para. 5, citing the North AtlanticCoast Fisheries Case of 7 September 1910 before the PermanentCourt of Arbitration (see United Nations, Reports of InternationalArbitral Awards, vol. XI (United Nations publication, Sales No. 61.V.4), p . 167), and J. Basdevant, "L'affaire des pecheries des cdtesseptentrionales de l'Atlantique", Revue generate de droit internationalpublic (Paris) vol. XIX (1912), pp. 538 et seq.

43 P. Level, op. cit., p . 338, para. 35.44 D . Vignes, "La clause de la nation la plus favorisee et sa pra-

tique contemporaine", Recueil des cours de VAcademie de droitinternational de La Haye, 1970-11 (Leyden, Sijthoff, 1971), vol. 130,p. 219, who quotes in support of this view also D . P. O'Connell,International Law (London, Stevens, 1965), vol. I, p . 268 andJ. Dehaussy, Juris-classeur de droit international, Fasc. 12-B,Sources du droit international—Les traites (Effets: Situation desEtats tiers et de leurs ressortissants (Paris, Editions techniques,1959), vol. 5, p . 7, para. 15.

45 See State Institute of Law of the Soviet Academy of Sciences,Kurs .. . (op. cit.), p. 251.

46 G. Schwarzenberger, International Law and Order (London,Stevens, 1971), p . 137, quoting British and Foreign State Papers,1885-1886, vol. 77 (London, Ridgway, 1893), p . 796.

47 Ibid.


The United States is entirely in agreement that the meaning of theclause should be determined by reference to the intent of the partiesat the time. The only difference that we have with our distinguishedopponents is that they would construe the clause as conditional byreferring only to the practice of the United States in interpretingother treaties signed under other circumstances, and not by what theUnited States and Morocco intended when they signed the treatieswhich are in issue before this Court.48

The following excerpt from a Memorandum of theCounselor for the Department of State (Moore) of8 October 1913 is also of relevance:

It is proper to advert to the fact that the so-called most-favored-nation clause does not bear an invariable form. In two instancesduring the past twenty-five years the United States has been obligedto yield its interpretation when confronted with documentary proofthat the most-favored-nation clauses then in question were, duringthe negotiation of the particular treaties, expressly understood andagreed to have the wider effect claimed by the other contractingparties.46

(21) The rule proposed in article 6 does not state simplythat unless otherwise agreed a most-favoured-nationclause is unconditional. The drafting wishes to giveexpression to the fact that because of the completedisappearance of the traditional conditional clause (theAmerican form) only two forms of the clause exist: theunconditional clause and the clause conditional uponmaterial reciprocity. The rule states that in case of doubtthe presumption militates for the unconditionality of theclause. Indeed one could spell out explicitly that inmatters of trade and particularly in those of customsduties and the like, the clause is always unconditional;whereas in matters of private international law, im-munities and the like the condition of reciprocity maybe stipulated but in the absence of such stipulation theclause is unconditional in such cases as well. The Com-mission may choose to employ this kind of the draftingof the rule. The expression "appropriate cases" in thearticle is meant to refer to cases of private internationallaw, cautio iudicatum solvi, consular immunities, etc.

(22) The question arises whether the presumption worksalso in cases where the internal law of a country prescribesfor certain matters reciprocity as a rule. Thus article 11of the French Civil Code provides as follows:

An alien shall enjoy in France the same civil rights as those whichare now or shall in the future be granted to French nationals bytreaties of the nation of which the alien in question is a national.60

On the basis of this and upon a varying practice inFrench courts Guggenheim concludes:

. . . If a rule of internal law makes the application of the clausedependent on the granting of reciprocity, the clause is consideredto have been granted conditionally.61

Other sources, like the 1936 Resolution of the Instituteof International Law (paragraph 2) 52 and particularlySauvignon 53 hold the view that a provision of internallaw cannot prevail over treaty obligations of a State.This view is shared.

(23) The conditions of reciprocity in a most-favoured-nation clause can give rise to serious questions of inter-pretation mainly if the relevant rules of the interestedcountries differ substantially from each other.54 Thisinherent difficulty, however, does not alter the validityof the rule.

Article 7. The ejusdem generis rule

Under a most-favoured-nation clause the beneficiaryState cannot claim any other rights than those relating tothe subject-matter of the clause and falling within thescope of the clause.

COMMENTARY

(1) The ejusdem generis rule is generally recognized andaffirmed by the jurisprudence of international tribunalsand national courts and by diplomatic practice. Theessence of the rule is explained by McNair in the followinggraphic way:

Suppose that a most-favoured-nation clause in a commercial treatybetween State A and State B entitled State A to claim from State Bthe treatment which State B gives to any other State, that would notentitle State A to claim from State B the extradition of an allegedcriminal on the ground that State B has agreed to extradite allegedcriminals of the same kind to State C, or voluntarily does so. Thereason, which seems to rest on the common intention of the parties,is that the clause can only operate in regard to the subject-matterwhich the two States had in mind when they inserted the clausein their treaty.65

Although the meaning of the rule is clear, its applicationis not always simple. From the abundant practice thefollowing selection of cases may illustrate the difficultiesand solutions.

(2) In the Anglo-Iranian Oil Company Case (1952), theInternational Court of Justice stated:

The United Kingdom also put forward, in a quite different form,an argument concerning the most-favoured-nation clause. IfDenmark , it is argued, can bring before the Cour t questions as tothe application of her 1934 Treaty with Iran, and if the UnitedKingdom cannot bring before the Court questions as to the appli-cation of the same Treaty to the benefit of which she is entitled underthe most-favoured-nation clause, then the United Kingdom wouldnot be in the position of the most favoured nat ion. The Cour t needsonly observe tha t the most-favoured-nation clause in the Treatiesof 1857 and 1903 between I ran and the United Kingdom has norelation whatever to jurisdictional matters between the two Govern-ments. If Denmark is entitled under Article 36, paragraph 2, of theStatute, to bring before the Cour t any dispute as to the application

4 8 Rejoinder of 26 July 1952 (I.C.J. Pleadings, Morocco Case(France v. U.S.A.), vol. I I , p . 318. F o r a fuller reference, seeYearbook... 1970, vol. I I , p . 208, document A/CN.4/228 andA d d . l , para . 52.

19 G . Hackwor th , op. cit., p . 279.5 0 Code civil (Paris, Dalloz, 1972-1973), p . 13.51 P . Guggenheim, op. cit., pp . 211-212.

63 Yearbook... 1969, vol. I I , p . 181, document A/CN.4/213,annex I I .

53 E . Sauvignon, op. cit., p . 25.54 H . Batiffol, Droit international prive, 4th ed. (Paris, Librairie

generate de droit et de jurisprudence, 1967), pp . 213-214, N o . 188.6 5 A. D . McNair , The Law of Treaties (Oxford, Clarendon

Press, 1961), p . 287.


of its Treaty with Iran, it is because that Treaty is subsequent to theratification of the Iranian Declaration. This cannot give rise to anyquestion relating to most-favoured-nation treatment.58

(3) The conclusions reached as to the operation of therule in the Ambatielos Case 57 were referred to in theSpecial Rapporteur's second report.58 A somewhatfuller quotation of the relevant part of the award of6 March 1956 of the Commission of Arbitration seemsto be in place here.

With respect to the interpretation of article X (most-favoured-nation clause) of the Anglo-Greek Treaty ofCommerce and Navigation of 1886, the ArbitrationCommission stated:

The Commission does not deem it necessary to express a view onthe general question as to whether the most-favoured-nation clausecan never have the effect of assuring to its beneficiaries treatment inaccordance with the general rules of international law, because inthe present case the effect of the clause is expressly limited to "anyprivilege, favour o r immunity which either Contracting Party hasactually granted or may hereafter grant to the subjects or citizensof any other State", which would obviously no t be the case if thesole object of those provisions were to guarantee to them treatmentin accordance with the general rules of international law.

On the other hand, the Commission holds that the most-favoured-nation clause can only attract matters belonging to the same categoryof subject as that to which the clause itself relates.

The Commission is, however, of opinion that in the present casethe application of this rule can lead to conclusions different fromthose pu t forward by the United Kingdom Government.

In the Treaty of 1886 the field of application of the most-favoured-nation clause is defined as including "all matters relating to commerceand navigation". It would seem that this expression has not, initself, a strictly defined meaning. The variety of provisions containedin Treaties of commerce and navigation proves that , in practice,the meaning given to it is fairly flexible. F o r example, it should benoted that most of these Treaties contain provisions concerning theadministration of justice. Tha t is the case, in particular, in theTreaty of 1886 itself, Article XV, paragraph 3, of which guaranteesto the subjects of the two Contracting Parties "free access to theCourts of Justice for the prosecution and defence of their rights".Tha t is also the case as regards the other Treaties referred to by theGreek Government in connexion with the application of the most-favoured-nation clause.

I t is true that " the administration of justice", when viewed inisolation, is a subject-matter other than "commerce and navigation",but this is no t necessarily so when it is viewed in connection withthe protection of the rights of traders. Protection of the rights oftraders naturally finds a place among the matters dealt with byTreaties of commerce and navigation.

Therefore it cannot be said that the administration of justice, in sofar as it is concerned with the protection of these rights, mustnecessarily be excluded from the field of application of the most-favoured-nation clause, when the latter includes "all matters relatingto commerce and navigation". The question can only be determined

66 Anglo-Iranian Oil Co. Case (Jurisdiction), Judgment of July22nd 1952 (I.C.J. Reports 1952, p . 93). For the facts and otheraspects of the case, see Yearbook . .. 1970, vol. I I , pp . 202-205,document A/CN.4/228 and A d d . l , paras. 10-30.

67 The Ambatielos Case (merits: obligation to arbitrate), Judg-ment of 19 May 1953 {I.C.J. Reports 1953, p . 10).

68 Yearbook ... 1970, vol. II , pp . 209-211, document A/CN.4/228and A d d . l , paras. 66-73.

in accordance with the intention of the Contracting Parties asdeduced from a reasonable interpretation of the Treaty.6 9

In summing up its views with respect to the interpret-ation of article X of the Treaty of 1886, the Commissionstated that it was of opinion:

(1) that the Treaty concluded on 1st August, 1911, by the UnitedKingdom with Bolivia cannot have the effect of incorporating inthe Anglo-Greek Treaty of 1886 the "principles of internationallaw", by the application of the most-favoured-nation clause;

(2) that the effects of the most-favoured-nation clause containedin Article X of the said Treaty of 1886 can be extended to thesystem of the administration of justice in so far as concerns theprotection by the courts of the rights of persons engaged in tradeand navigation;

(3) that none of the provisions concerning the administration ofjustice which are contained in the Treaties relied upon by the GreekGovernment can be interpreted as assuring to the beneficiaries ofthe most-favoured-nation clause a system of "justice", "right" and"equity" different from that for which the municipal law of theState concerned provides;

(4) that the object of these provisions corresponds with that ofArticle XV of the Anglo-Greek Treaty of 1886, and that the onlyquestion which arises is, accordingly, whether they include moreextensive "privileges", "favours" and "immunities" than thoseresulting from the said Article XV;

(5) that it follows from the decision summarised in (3) above thatArticle X of the Treaty does not give to its beneficiaries any remedybased on "unjust enrichment" different from that for which themunicipal law of the State provides.

. . . the Commission is of opinion that "free access to the Courts",which is vouchsafed to Greek nationals in the United Kingdom byArticle XV of the Treaty of 1886, includes the right to use the Courtsfully and to avail themselves of any procedural remedies or guaranteesprovided by the law of the land in order that justice may be admin-istered on a footing of equality with nationals of the country.

The Commission is therefore of opinion that the provisionscontained in other Treaties relied upon by the Greek Governmentdo not provide for any "privileges, favours or immunities" moreextensive than those resulting from the said Article XV, and thataccordingly the most-favoured-nation clause contained in Article Xhas no bearing on the present dispute . . .00

(4) Decisions of national courts also testify to thegeneral recognition of the ejusdem generis rule.

In an early French case (1913), the French Court ofCassation had to decide whether certain proceduralrequirements for bringing suit as provided in a French-Swiss Convention on jurisdiction and execution ofjudgement applied also to German nationals as a resultof a most-favoured-nation clause in a Franco-GermanCommercial Treaty signed at Frankfurt on 10 May 1871."The Franco-German Treaty guaranteed most-favoured-nation treatment in their commercial relations includingthe 'admission and treatment of subjects of the twonations'." The decision of the Court was based in parton the following propositions: that "these provisionspertain exclusively to the commercial relations betweenFrance and Germany, considered from the viewpoint ofthe rights under international law, but they do not

59 United Nations, Reports of International Arbitral Awards,vol. XII (United Nations, publication, Sales No. 63.V.3), pp. 106-107. (Italics supplied by the Special Rapporteur.)

6 0 Ibid., pp. 109-110.


concern, either expressly or implicitly, the rights undercivil law, particularly, the rules governing jurisdictionand procedure that are applicable to any disputes thatdevelop in commercial relations between the subjects ofthe two States"; and that further: "The most-favoured-nation clause may be invoked only if the subject of thetreaty stipulating it is the same as that of the particularlyfavourable treaty the benefit of which is claimed."61

(5) In Lloyds Bank v. De Ricqles and De Gaillard beforethe Commercial Tribunal of the Seine, Lloyds Bank,which as the plaintiff had been ordered to give securityfor costs (cautio judicatum solvi) invoked article I of anAnglo-French Convention of 28 February 1882.62 ThatConvention intended—according to its Preamble—"toregulate the commercial and maritime relations betweenthe two countries, as well as the status of their subjects",and article I provided, with an exception not relevanthere, that:

. . . each of the High Contracting Parties engages to give theother immediately and unconditionally the benefit of every favour,immunity or privilege in matters of commerce or industry whichhave been or may be conceded by one of the High ContractingParties to any third nation whatsoever, whether within or beyondEurope.63

On the basis of that article Lloyds Bank claimed thebenefit of the provisions of a Franco-Swiss Treaty of15 June 1889, which gave Swiss nationals the right tosue in France without being required to give security forcosts. The court rejected this claim, holding that a partyto a convention of a general character such as the Anglo-French Convention regulating the commercial andmaritime relations of the two countries could not claimunder the most-favoured-nation treatment clause thebenefits of a special Convention such as the Franco-Swiss Convention, which dealt with one particularsubject, namely freedom from the obligation to givesecurity for costs.64

(6) The comparison between these two French judge-ments on the one hand and the award of the Commissionof Arbitration for the Ambatielos Case on the otherreveals that while the ejusdem generis rule is recognizedby all, there is a large difference between the liberalconstruction of the Arbitration Commission and thestrict interpretation of the French courts. This leads tothe question whether in the process of codification ofthe ejusdem generis rule there should not be an effort

61 M. Whiteman, op. cit., pp . 755-756, quoting the decision ofthe French Cour t of Cassation, 22 December 1913, in the case ofBraunkohlen Briket Verkaufsverein Gesellschaft c. Goffart, is qualites.The decision is also quoted by P. Level, op. cit., p . 338, para. 38,and H . BatifFol, op. cit., p . 216, N o . 189.

62 British and Foreign State Papers, 1881-1882, vol. 73 (London,Ridgway, 1889), p . 22.

83 Ibid., pp . 23-24.64 H . Lauterpacht , ed., Annual Digest of Public International

Law Cases 1929-30 (London) , vol. 5 (1935), Case N o . 252, p. 404;Journal du droit international (Paris), 58th year (1931), p . 1018,digested by A. D . McNair , op. cit., p . 287. Other cases beforeFrench courts based on the ejusdem generis rule are cited by A.-Ch.Kiss, "La convention europeenne d'etablissement ct la clause de lanat ion la plus favorisee", Annuaire francais de droit international,1957 (Paris), vol. I l l , p . 478; cases before American courts byG. H . Hackworth , op. cit., pp . 292-293.

made to propose a more detailed regulation, particularlywith regard to the relation between a fairly general clause(e.g. in all matters of commerce and navigation) and aparticular claim (e.g. administration of justice or cautiojudicatum solvi). The question is provisionally answeredin the negative by proposing the general rule and leavingthe details to treaty interpretation. Drafters of a most-favoured-nation clause are always confronted with thedilemma of either drafting the clause in too generalterms, risking thereby the loss of its effectiveness througha rigid interpretation of the ejusdem generis rule ordrafting it too explicitly, enumerating its specific domains,in which case the risk consists in the possible incomplete-ness of the enumeration.

(7) The ejusdem generis rule is observed also in theextra-judicial practice of States as shown by the caseconcerning the Commercial Agreement of 25 May 1935between the United States of America and Sweden.65

Article I provided as follows:Sweden and the United States of America will grant each other

unconditional and unrestricted most-favoured-nation treatment inall matters concerning the Customs duties and subsidiary chargesof every kind and in the method of levying duties, and, further, inall matters concerning the rules, formalities and charges imposedin connection with the clearing of goods through the Customs, andwith respect to all laws or regulations affecting the sale or use ofimported goods within the country.66

A request was submitted in 1949 to the Departmentof State that it inform the New York State LiquorAuthority that a liquor licence to sell imported Swedishbeer in New York should be issued to a certain firm ofimporters. The Office of the Legal Adviser, Department ofState, interpreted the treaty provisions as follows:

Since the most-favored-nation provision in the Reciprocal TradeAgreement between the United States and Sweden signed in 1935 isdesigned only to prevent discrimination between imports from andexports to Sweden as compared with imports from and exports toother countries, I regret that this Department would be unable tosend to the New York Liquor Authority a letter such as you suggestto the effect that the Agreement accords to Swedish nationals thesame treatment as is accorded to the nationals of other countries.

All of the countries listed in the enclosure to your letter (countries,nationals of which are held by the New York State Liquor Authorityto be entitled to liquor licences) have treaties with the United Stateswhich grant either national or most-favored-nation rights as toengaging in trade to nationals of those countries. Thus existence ofthe trade agreements to which you refer in addition to these treaties,is irrelevant.. ,67

(8) In the following examples the question of the appli-cation of the rule arose under extraordinary circum-stances. In the case of Nyugat-Swiss Corporation SocieteAnonyme Maritime et Commerciale v. State (Kingdomof the Netherlands) the facts were as follows:

On 13 April 1941, the steamship Nyugat was sailingoutside territorial waters of the former Dutch East Indies.She sailed under the Hungarian flag. The Netherlandsdestroyer Kortenaer stopped her, searched her and took

65 League of Nat ions , Treaty Series, vol. CLXI , p . 109.66 Ibid, p . 111.67 Legal Adviser Fisher, Depar tment of State, 3 November 1949,

MS. Depar tment of State, quoted by M . Whiteman, op. cit., p . 760.


her into Surabaya, where she was sunk in 1942. Theplaintiffs claimed that the action taken with regard tothe Nyugat was illegal. The vessel was Swiss property.She had formerly belonged to a Hungarian company,but the Swiss corporation became the ship's owner in1941, when it already held all shares in the Hungariancompany. The Hungarian flag was a neutral flag. Defendantrelied upon the fact that on 9 April 1941, diplomaticrelations between the Netherlands and Hungary weresevered, that on 11 April 1941, Hungary, as an ally ofGermany, attacked Yugoslavia and that consequentlyon the basis of certain relevant Dutch decrees the captureof the ship was legal. Plaintiffs contended that thesedecrees were in conflict with the Treaty of Friendship,Establishment and Commerce, concluded with Switzerlandat Berne on 19 August 1875 6 8 and with the Treaty ofCommerce, concluded with Hungary on 9 December1924.69 and notably the most-favoured-nation clausecontained in these treaties. Plaintiffs referred to theTreaty of Friendship, Navigation and Commerce signedon 1 May 1829, with the Republic of Colombia, providingthat "if at any time unfortunately a rupture of the ties offriendship should take place" the subjects of the oneparty residing in the territory of the other party "willenjoy the privilege of residing there and of continuingtheir business . . . as long as they behave peacefully anddo not violate the laws; their property. . . will not besubject to seizure and attachment." 7 0 The Court held:

The invoking of this provision fails, since it is unacceptable that arupture of friendly relations, as understood in the year 1829, can beassimilated to a severance of diplomatic relations as it occurredduring the Second World War; in the present case the determinationof the flag was also based upon the assumption by Hungary of anattitude contrary to the interests of the Kingdom by collaboratingin the German attack against Yugoslavia. This case surely does notfit in the provisions of the 1829 Treaty. From the preceding itfollows that shipowners are wrong in their opinion that the Courtshould not apply the Decrees as being contrary to internationalprovisions.71

(9) The Italian-Swiss Permanent Conciliation Com-mission, provided for in the Treaty of Conciliation andJudicial Settlement between Italy and Switzerlandconcluded in 1924,72 was seized of a dispute between thetwo parties concerning the application to Swiss nationalsof a certain Italian special capital levy duty.

The Swiss Government contended that this special levyshould not apply to the property of Swiss nationals.Their contention was based on the most-favoured-nationclause in article 5 of the Italian-Swiss Establishment andConsular Convention of 22 July 1868, which, it wasargued, operated to oblige Italy to exempt from thespecial levy those Swiss nationals who belonged to thesame categories as the nationals of the United Nations

6 8 Netherlands, Staatsblad van het Koninkrijk der Nederlanden,No. 137, 1878, Decree of 19 September 1878.

89 Ibid., No. 36, 1926, Decree of 3 March 1926.70 British and Foreign State Papers, 1829-1830 (London, Ridgway,

1832), p. 902.71 Judgement of 6 March 1959 by the Supreme Court of the

Netherlands (Nederlandse Jurisprudentie 1962, No. 2, pp. 18-19)(original text: Dutch).

72 League of Na t ions , Treaty Series, vol. X X X I I I , p . 9 1 .

who were exempt from the levy by virtue of article 78,paragraph 6, of the 1947 Treaty of Peace with Italy.73

The relevant part of the text of article V of the 1868treaty is as follows:

In time of peace as in time of war, there may not, in any circum-stances, be imposed or exacted on the property of a national of oneof the two States in the territory of the other, taxes, dues, contri-butions or charges, other than or heavier than shall be imposed orexacted on the same property if it belonged to a national of theState or to a national of the most favoured nation. It is furtheragreed that there will not be collected or demanded from a nationalof one of the two States who is in the territory of the other, any taxwhatsoever, other than or heavier than those which may be imposedor levied on a national of the State or of the most favoured nation.74

The Italian Government maintained that this most-favoured-nation clause which, it is to be noted containsalso a national treatment pledge, could not be invokedin this way. They based their argument on the commonintention of the Parties at the time of the conclusion ofthe Establishment Convention of 1868, alleging that theycontemplated the regulation of normal peaceful relationsand did not intend the most-favoured-nation clause toapply to circumstances of war and the peace treatiesthat followed. It was also submitted that a peace treatyfell into a special category and resembled an imposedsettlement rather than a contractual agreement.

The Commission held, on 9 October 1956, that theSwiss claim must be rejected. Excerpts from its opinionare as follows:

. . . From the fact that the conditions of the Peace Treaty wereimposed on Italy, and from the fact that the determination of theconditions was not made the object of free negotiations betweenthe Parties to the Treaty, it has been deduced [by the Italian Party]that the exemption of the nationals of the Allied Powers rests uponmere unilateral decisions of these Powers. Therefore, it has beenalleged on the Italian side, the non-contractual advantage whicharose for these nationals should be considered as outside the scopeof the most-favoured-nation clause. The Commission does not sharethis opinion. Although it may have been motivated by compulsion,the will of the defeated State nevertheless enters into a Treaty ofPeace, into each and every one of the clauses which it contains. Ifit were not so, then the very character of a treaty would have to bedenied to any Treaty of Peace bringing to an end a victorious war.

In order to extend the operation of the most-favoured-nationclause to the provisions of article 78, paragraph 6, of the ParisPeace Treaty of February 10, 1947, the absolute form of Article 5of the Establishment Convention of July 22, 1868, has been reliedupon: [by the Swiss Party] "in time of peace as in time of war, theremay not, in any circumstances...". It is recognized that the firstformula ("in time of peace as in time of war") has a purely temporalmeaning. The second ("in any circumstances") cannot itself attributean extravagant function to the clause and one which would be incontradiction to its well known role in international life, which is therole of ensuring equality of treatment to the nationals of differentStates in normal legal relations. Now, the extension claimed hereon the basis of the most-favoured-nation clause would have theeffect of extending the exceptional inequality provided for byArticle 78 of the Treaty of February 10, 1947.

73 F o r reference, see above , no te 17.74 Quoted in E . Lauterpacht , ed., International Law Reports

(1958-1) (London) , vol. 25 (1963), p p . 316-317.


. . . The relations which gave rise to the Treaty of February 10,1947, between Italy and the Allied Powers were the relations ofbelligerency and post-belligerency, of conqueror and conquered,and which alone could serve to justify the exemption from thespecial tax on capital contained in Article 78, paragraph 6, of thisPeace Treaty. The absence of similar relations between Italy andSwitzerland excludes the operation of the most-favoured-nationclause for the benefit of the latter.

It is equally of little relevance that the clause of Article 5 of theItalian-Swiss Establishment Convention of 1868 is aimed at sub-stantially the same taxes and, duties as those from which Article 78,paragraph 6, of the Peace Treaty of February 10,1947, has providedexemption in favour of nationals of the Allied Nations. Similaridentity would indeed allow Switzerland to invoke the benefit of theclause if the exemption from similar fiscal dues granted by Italy forthe benefit of nationals of third States tended to favour economicrelations of the same kind as those which exist between Switzerlandand Italy.76

The Commission which had "endeavoured to arriveat an equitable settlement of the dispute", while rejectingthe Swiss claim based on the most-favoured-nationclause, found that Switzerland was entitled to nationaltreatment under the terms of the clause of the 1868Treaty, quoted above, In this way, it seems that theclaimant Swiss Government has very nearly reached itsoriginal goal; although the Swiss corporations were notexempted completely from the special levy in question,they gained treatment equal to that enjoyed by theItalian corporations bearing a tax varying from 2 per centto 4 per cent, instead of being assimilated to other foreigncorporations subjected to a levy on a maximum rate of15 per cent of the total amount of their capital investedin Italy. It was against this background that Switzerlandaccepted the proposal of the Conciliation Commissionand agreed to the settlement of the dispute. It is to benoted also that according to the treaty on the basis ofwhich the Conciliation Commission proceeded

The task of the Permanent Conciliation Commission shall be tofurther the settlement of disputes by an impartial and conscientiousexamination of the facts and by formulating proposals with a viewto settling the case.78

and

. . . The Commission's report shall not be in the nature of anarbitral award, as regards either the statement of facts or the legalconsiderations."

(10) According to McNair, "some authority exists" forthe view that rights and privileges obtained in the courseof a territorial and political arrangement or a peacetreaty "cannot be claimed under a most-favoured-nationclause." "The reason", he believes, "presumably is thatsuch concessions are not commercial, while most-favoured-nation clauses are usually concerned with tradeand commerce."78 He quotes an opinion of a law officer

75 Italy, Ministry of Foreign Affairs, Atti Relativi alia Vertenzaper rApplicazione ai Cittadini Svizerri dell'Imposta StraordinariaItaliana sul Patrimonio (Rome, 1960), quoted in E. Lauterpacht, ed.International Law Reports, vol. 25 (pp. cit.), pp . 313 et seq.

76 Treaty of Conciliation and Judicial Settlement between Italyand Switzerland, signed at R o m e on 20 September 1924, article 5.(League of Nat ions, Treaty Series, vol. XXXII I , p . 93.)

77 Ibid., article 12, p . 97.78 A . D . McNair , op. cit., p . 302.

given in 1851. This denied to Portugal and Portuguesesubjects the right "to dry on the coast of Newfoundlandthe Codfish caught by them on the Banks adjoiningthereto". The claim was based on a most-favoured-nationclause in a treaty of 1842 between Great Britain andPortugal designed to secure the same privileges as weregranted by Britain to France and to the United States ofAmerica by the Treaties of 1783. Those Treaties formedpart of a general arrangement made at the terminationof a war. The law officer stated:

. . . I am of opinion that the Stipulation of the 4th Article of theTreaty of 1842 cannot justly be considered as applicable to thepermission which he [the Portuguese Charge d'Affaires] claims onbehalf of Portuguese Subjects.

I consider that these privileges were conceded to France and theUnited States of America as part of a Territorial and PoliticalArrangement extorted from Great Britain at the termination of aWar which had been successfully carried on against her by thoseNations.79

(11) There is no writer who would deny the validity ofthe ejusdem generis rule which derives from the verynature of the most-favoured-nation clause. It is generallyadmitted that a clause conferring most-favoured-nationrights in respect of a certain matter, or class of matter,can only attract the rights conferred by other treaties(or unilateral acts) in regard to the same matter or classof matter.80

(12) The effect of the most-favoured-nation process is,by means of the provisions of one treaty, to attract thoseof another. Unless this process is strictly confined tocases where there is a substantial identity between thesubject-matter of the two sets of clauses concerned, theresult in a number of cases may be to impose upon thegranting State obligations it never contemplated.81 Thusthe rule follows clearly from the principle of sovereigntyand independence of States. They cannot be regarded asbeing bound beyond the obligations they have expresslyundertaken.

(13) Recently a quite novel theory has been developedby a distinguished judge of the Court of Justice of theEuropean Communities, Mr. Pierre Pescatore, in thecourse of his studies undertaken for the Institute ofInternational Law. His reasoning runs as follows:

The ejusdem generis rule was originally developed to express therequirement that the subjects of the advantages to be granted underthe clause should be identical or at least similar. The rule is expressedin this way in the provisions of the General Agreement on Tariffsand Trade, article I of which provides that tariff reductions shallbe granted to "the like product".

But this requirement does not stop there. The similitude must alsoexist with regard to the nature of the measure whose extension isclaimed in application of the clause and even with regard to thelegal context of that measure, in other words, framework withinwhich it occurs.

Hence, as we have explained above, a State cannot, by virtue ofthe clause—whose purpose is to ensure the most favourable treat-ment granted to aliens—claim the benefit of the treatment granted

79 Ibid., p . 303 (italics supplied by the Special Rapporteur).80 See Yearbook . . . 1970, vol. II , p . 210, document A/CN.4/228

and Add . l , para. 68.81 Ibid., p . 211, document A/CN.4/228 and Add. l , para. 72.


to nationals. As we have already said, the national treatment clauseis essentially different in scope from the most-favoured-nationclause; it is thus not ejusdem generis in relation to the latter and itsbenefits cannot therefore be acquired through the m.f.n.c.

As for the "legal context", reference was made in paragraph 133of the provisional report to an example drawn from arbitral practice[this is the case dealt with by the Swiss-Italian Conciliation Com-mission] which shows that the most-favoured-nation clause insertedin an establishment treaty cannot ensure the enjoyment of advantagesgranted under a treaty of a quite different kind, namely a peacetreaty. What is involved here is not the intrinsic nature of the clause,but rather the legal context: the benefit of the clause cannot be widerin scope than the subject of the treaty in which it is inserted. Now,to confine ourselves to the example mentioned, the purpose of apeace treaty is very different from that of an establishment treaty.The argument has been transposed to the question of the effect ofthe m.f.n.c, embodied in a commercial treaty, with regard toadvantages granted within the context of an economic integrationsystem. In the Rapporteur's view, there is no common measurebetween a treaty designed simply to facilitate international tradeand the much more ambitious and fundamental objective of atreaty designed to bring about economic integration in the form of afree-trade area, a customs union or an economic union. It has thusbeen concluded that the "commercial" m.f.n.c. has no effect withregard to advantages granted within the framework of an integrationsystem.

The primordial importance of the ejusdem generis rule for boththe State granting the m.f.n.c. and for the beneficiary States thusbecomes clear. It is in fact this rule which indicates to the formerthe extent of its commitments and to the latter the limits of the claimsthey may legitimately submit.

To sum up, we may say that the clause has no effect unless threeconditions are met with regard to the advantage claimed under it:

The subject must be identical or at least similar;

The nature of the standard of reference envisaged under theclause and of the advantage granted must be the same; andlastly

The legal context of the clause and the framework withinwhich the advantage is claimed must be the same.

A more detailed statement of the ejusdem generis rule will probablymake it possible to define the scope of the clause more exactly andthus settle a number of differences of opinion which have arisenconcerning its effect.82

(14) The Special Rapporteur is unable to subscribe tothis view. It is sustained neither by theory nor by practice.It is built upon one single precedent (the Swiss-Italiancase, to which the Special Rapporteur adds thePortuguese-English case) and it constitutes an unduegeneralization from two isolated instances. The con-clusions of the Conciliation Commission and those ofPescatore are rightly criticized by Sauvignon in thefollowing way:

The drawback of the reasoning of the Commission and theRapporteur of the Institute of International Law is that it has theresult of transforming an unconditional clause into a conditionalclause: the clause will not become operative unless the most favour-able treatment is of a certain kind, and the relationship between thegranting State and the third State and the granting State and thebeneficiary State are identical or equivalent, which may, moreover,be very difficult to determine.88

The same writer concludes that:

. . . in the case considered by the Commission the legal solutionseems to lie in the reference to a custom eliminating conventions of apolitical nature from the field of application of the clause.84

This conclusion is, however not sustained by anythingbut a reference to the Portuguese-English case and to theremark of McNair, quoted above.85 Two cases obviouslydo not prove the existence of a binding custom. Still,what are the conclusions which could be drawn fromthese cases ? If we accept the rule stated in article 5 thatthe source of the rights of the beneficiary (and of thecorresponding obligations of the granting State) is thetreaty containing the clause then it is there that we haveto search for a solution to the Italian-Swiss case. Theclause contains the promise of the granting State toaccord to the beneficiary State the same treatment itaccords (of its free will, of course) to any other State. Itpromises not to discriminate as between States to thedetriment of the beneficiary of the clause. The Swissclaim, however, aimed at the extension of the most-favoured-nation promise to treatment which the grantingState was obliged to accord on the basis of a PeaceTreaty which, in the words of the law officer of 1851, wasextorted by other States. The Italian party referred in itscontentions to the fact that the Peace Treaty was imposedon Italy. The Conciliation Commission rejected thisargument. "Although it may have been motivated bycompulsion",86 the Commission stated, the Peace Treatyis a treaty concluded also on the will of the defendantState (jamenetsi coactus voluit, attamen voluit). It isperfectly true that the 1947 Peace Treaty is a bindingtreaty—with an element of compulsion in it. Thatelement is not enough to invalidate the Treaty, but it isthe factor which prevents the favours it grants to theAllies from being granted to Switzerland. The most-favoured-nation pledge promised Switzerland equality oftreatment in the field of application of the clause whereverthe granting State was free to distribute its favours onits own consideration of policy among its State partners.The members of the Conciliation Commission found,however—on the basis of equity—that the pledge shouldnot extend to favours accorded under the said specialcircumstances where the grant of Italy was based upon atreaty—a treaty tinged with an element of compulsion.The Italian-Swiss Permanent Conciliation Commission'sruling, if it were not an isolated case supported by onesingle other instance, could perhaps permit the inferencethat a most-favoured-nation clause ordinarily does notattract advantages stipulated in a peace treaty. To makethe generalization, however, that for the operation of amost-favoured-nation clause not only the subject-matterbut also the relation between the granting State and thebeneficiary, and the granting State and the third State,must be similar or identical, is not, it is submitted, anapprofondissement of the ejusdem generis rule, but astretching of it beyond acceptable limits.

82 P . Pescatore, he. cit., pp . 207-209.83 E. Sauvignon, op. cit., pp . 73-74.

84 Ibid.86 See above, para. 10 of this commentary.8e E. Lauterpacht, ed., International Law Reports, vol. 25

(op. cit.), p. 317.


(15) The essence of the rule is that the beneficiary of amost-favoured-nation clause cannot claim from thegranting State advantages of a kind other than thatstipulated in the clause. Bluntly, if the most-favoured-nation clause promises most-favoured-nation treatmentsolely for fish, such treatment cannot be claimed underthe same clause for meat.87 The granting State cannotevade its obligations, unless an express reservation soprovides, on the ground that the relations between itselfand the third country are friendlier or "not similar" tothose existing between it and the beneficiary (as in thedictum of the Swiss-Italian Conciliation Commission).It is only the subject matter of the clause which mustbelong to the same category, the idem genus, and not therelation between the granting State and the third Stateon the one hand and the relation between the grantingState and the beneficiary State on the other. It is also notproper to say that the treaty including the clause must beof the same category (ejusdem generis) as that of thebenefits which are claimed under the clause.88 To holdotherwise would seriously diminish the value of a most-favoured-nation clause.

(16) The question of the effect of most-favoured-nationclauses on advantages accorded by multilateral treaties{inter alia "treaties of integration") and on advantagesgranted as "national treatment", topics touched inMr. Pescatore's quoted passage 89 will be discussed later.

Article 8. Acquired rightsof the beneficiary State

An agreement between the granting State and one ormore third States confining certain benefits to their mutualrelations does not affect the rights of the beneficiary Stateagainst the granting State under a most-favoured-nationclause unless the beneficiary State expressly consents tothe restriction of its right in writing.

COMMENTARY

(1) If State A grants most-favoured-nation treatmentto State B (and, in case of a multilateral treaty, also toStates Bl, B2, B3 . . . Bx), it is obliged to extend toState B (Bl, B2, B3 . . . Bx) all favours it accords to anyother State: to State C in a bilateral agreement (or toStates Cl, C2, C3 . . . Cx) in a multilateral agreement).

87 I n connexion with the problem of "l ike p roduc t s" , see therelevant passage in the excerpts from the conclusions of the EconomicCommi t t ee of the League of Na t ions in regard to the most-favoured-nation clause annexed to the Special Rapporteur's first report(Yearbook ... 1969, vol. II, p. 178, document A/CN.4/213, annex 1);and articles I, II and XIII of the General Agreement on Tariffs andTrade (United Nations, Treaty Series, vol. 55, pp. 196-200, 204-208and 234-238; ibid., vol. 62, pp. 82-86 and 90; ibid., vol. 138, p. 336).Notable efforts are being made to facilitate the identification andcomparison of products by setting up uniform standards for thepurpose—these efforts include the Brussels Convention of15 December 1950 establishing a Customs Co-operation Council(ibid., vol. 157, p. 129) and the Convention on the Nomenclaturefor the Classification of Goods in Customs Tariffs of 15 December1950 (ibid., vol. 347, p. 127).

88 D. Vignes, op. cit., p. 282.89 See above, para. 13 of this commentary.

Should States A and C (Cl, C2, C3 . . . Cx) agree toaccord each other special benefits but withhold the samefrom others, such agreement cannot affect the right ofB (Bl, B2, B3...Bx) to claim from A the favoursgranted to C (Cl, C2, C3 . . . Cx).

(2) The rule clearly follows from the general rule regard-ing third States of the Vienna Convention on the Lawof Treaties 90 (articles 34-35) and also from the nature ofthe most-favoured-nation clause itself. The statement ofthe rule is, however, warranted by the fact that there exista number of agreements aiming more or less clearly at aresult of the kind referred to in the article, notwith-standing the doubts about the effect of such agreementsupon the right of third States, beneficiaries of a most-favoured-nation clause. Such agreements can take theform of treaty provisions {"clauses reservees" in French)or they may purportedly be implied in certain multi-lateral treaties.

(3) The rule proposed in the article applies to most-favoured-nation clauses irrespective of whether theybelong to the unconditional type or take the form of aclause conditional upon material reciprocity.91 The rulewas formulated in paragraph 2 of the resolution adoptedby the Institute of International Law at its fortieth session,in 1936, as follows:

This regime of unconditional equality [established by the operationof an unconditional most-favoured-nation clause] cannot be affectedby the contrary provisions of . . . conventions establishing relationswith third States.92

(a) Tlie "clause reservee"

(4) In the League of Nations Economic Committee therewas a discussion of the question, originally raised at theDiplomatic Conference held at Geneva to draw up anInternational Convention on the Abolition of Importand Export Prohibitions and Restrictions, whether Statesnot parties to the proposed Convention could, by virtueof bilateral agreements based on the most-favoured-nation clause, claim the benefit of any advantagesmutually conceded by the signatories of the InternationalConvention. At the Conference

it was soon realized, however, that this questioncould not be answered in the Convention, which couldnot affect the contents of bilateral agreements basedon the most-favoured-nation clause.

In the Economic Committee, a proposal was made toadopt a provision designed to restrict the stipulations ofthe Convention to the contracting parties.93

(5) The first paragraph of article 6 of the InternationalConvention for the Unification of Certain Rules Relating

9 0 Official Records of the United Nations Conference on the Lawof Treaties, Documents of the Conference (United Nat ions publi-cation, Sales N o . E.70.V.5), p . 289.

8 1 See above, article 6 and commentary.82 Yearbook... 1969, vol. I I , p . 181, document A/CN.4/213,

annex II .93 Ibid., pp . 179-180, document A/CN.4/213, annex I, under the

heading "Relations between bilateral agreements based on themost-favoured-nation clause and economic plurilateral conventions".


to the Immunity of State-owned Vessels, signed atBrussels on 10 April 1926 reads as follows:

The provisions of this Convention shall be applied in eachcontracting State, with the reservation that its benefits may not beextended to non-contracting States and their nationals, and thatits application may be conditioned on reciprocity.94

The following remark is made concerning this provisionby Vignes:

Such a provision has the disadvantage of failing to release con-tracting States from their obligations under previous clauses, ofhaving the status of res inter alios acta for the other States whichare parties to those clauses and thus placing the States whichsubscribe to it in the position of being potential violators of theclause.96

The reference in the clause to reciprocity does notcounteract its inherent weakness, because unconditionalobligations cannot be transformed into conditional oneswithout the consent of the respective beneficiaries.

(6) A somewhat milder version of the clause has beeninserted in the International Convention for the Uni-fication of Certain Rules relating to Maritime Liens andMortgages signed at Brussels also on 10 April 1926.96

Article 14 of the Convention reads as follows:The provisions of this convention shall be applied in each con-

tracting state in cases in which the vessel to which the claim relatesbelongs to a contracting state, as well a< in any other cases providedfor by the national laws.

Nevertheless the principle formulated in the preceding paragraphdoes not affect the right of the contracting States not to apply theprovisions of this convention in favor of the nationals of a non-contracting state.

(7) Article 98, paragraph 4 of the Havana Charter of24 March 1948, which was signed with the intention ofestablishing an International Trade Organization, readsas follows:

Nothing in this Charter shall be interpreted to require a Memberto accord to non-Member countries treatment as favourable asthat which it accords to Member countries under the provisions ofthe Charter, and failure to accord such treatment shall not beregarded as inconsistent with the terms or the spirit of the Charter.97

The nature of this provision, which is not a "clausereservee" in the strictest sense of the expression, and itscriticism by the representative of the Soviet Union inthe Economic and Social Council, were discussed in theSpecial Rapporteur's second report.98 The provision wasnot included in the General Agreement on Tariffs andTrade.

(8) The drafters of the Treaty Instituting the EuropeanCoal and Steel Community " did not adopt a "clausereservee"; they did include, however, an important

91 League of Nations, Treaty Series, vol. CLXXVI, p . 209.95 D . Vignes, op. cit., p. 291.96 League of Nations, Treaty Series, vol. CXX, p. 209.97 United Nations Conference on Trade and Employment (Havana,

Cuba, November 1947-March 1948), Final Act and Related Docu-ments (United Nations publication, Sales No . 1948.II.D.4), p. 51.

98 Yearbook... 1970, vol. II , p . 230, document A/CN.4/228and Add. l , paras. 183 et seq.

99 United Nations, Treaty Series, vol. 261, p . 140.

provision in the "Convention containing the transitionalprovisions" signed at Paris on 18 April 1951:

EXCEPTION TO THE MOST-FAVOURED-NATION CLAUSE

Section 20

With regard to those countries benefiting from the most-favoured-nation clause through the application of Article 1 of the GeneralAgreement on Tariffs and Trade, the member States shall takejoint action towards the Contracting Parties to the above-mentionedAgreement in order to exempt the provisions of the present Treatyfrom the application of the article in question. If necessary, a specialsession of the Contracting Parties to the G.A.T.T. shall be requestedfor this purpose.

As concerns those countries which, while not parties to theGeneral Agreement on Tariffs and Trade, nevertheless benefit fromthe most-favorcd-nation clause by virtue of bilateral agreements ineffect, negotiations shall be undertaken upon the signature of theTreaty. In the absence of consent on the part of the interestedcountries, such commitments shall be modified or denounced inaccordance with the terms thereof.

Should a country refuse its consent to the member States or toany one of them, the other member States agree to lend effectiveassistance, which may even extend to denunciation by all of themember States of the agreements concluded with the country inquestion.100

While the provision in the third paragraph can justlybe criticized from the economic or political point of viewas too "radical" or "threatening",101 from the strictlylegal point of view it clearly demonstrates that the com-mitment of the granting State under a most-favoured-nation clause cannot be terminated or modified by meansother than those offered by the law of treaties.

(9) The treaty establishing the European EconomicCommunity signed at Rome on 25 March 1957 containsthe following provision:

Article 234

The rights and obligations resulting from conventions concludedprior to the entry into force of this Treaty between one or moreMember States, on the one hand, and one or more third countries,on the other hand, shall not be affected by the provisions of thisTreaty.

In so far as such conventions are not compatible with this Treaty,the Member State or States concerned shall take all appropriatesteps to eliminate any incompatibility found to exist. MemberStates shall, if necessary, assist each other in order to achieve thispurpose and shall, -where appropriate, adopt a common attitude.

Member States shall, in the application of the conventionsreferred to in the first paragraph, take due account of the fact thatthe advantages granted under this Treaty by each Member Stateform an integral part of the establishment of the Community andare therefore inseparably linked with the creation of commoninstitutions, the conferring of competences upon such institutionsand the granting of the same advantages by all other MemberStates.102

Paragraphs 1 and 2 voice the same ideas as thoseincluded in section 20 of the Convention containing thetransitional provisions to the treaty instituting the Euro-pean Coal and Steel Community quoted above. Para-graph 3 is closer to a "clause re"servee" but it avoids

100 Ibid., pp. 299 and 301.101 A.-Ch. Kiss, op. cit., p . 485.102 United Nations, Treaty Series, vol. 298, p . 91.


affecting directly the rights of outsider States. Vignescalls the provision of paragraph 3 "an explanatory andincitant provision.103

This "incitant element" is viewed more seriously bythe Soviet international law textbook according to which

the somewhat obscure formulation of Art. 234 cannot conceal itsmeaning which lies in obliging every party to the Treaty to denythird countries the extension, in accordance with previouslyconcluded agreements, of the same privileges as are enjoyed bymembers of the bloc.101

The approach of a French writer, Thiebaud Flory, isdifferent:

How can the Member States of EEC reconcile the commitmentsresulting for them from the signing of the Treaty of Rome with theobligations which they had assumed previously by signing multi-lateral agreements such as GATT ? Under article 234 of the Treatyof Rome, the principle of fidelity to prior commitments shouldpredominate. By submitting the Treaty of Rome for considerationby GATT and exhibiting a conciliatory attitude towards the con-tracting parties, the Six have respected that principle.106

The two views quoted last, however contradictory atfirst sight, are not irreconcilable. The first sees in theprovision its "incitant" element, the second appreciatesthat in article 234, taken as a whole, the contractingparties implicitly recognize the validity of their previouspledges.

(10) The European Convention on Establishment signedat Paris on 13 December 1955 does not contain any"clause reservee" either. According to Vignes:

. . . when [this] Convention was drawn up . . . [the drafters firstthought] of inserting an express provision excluding non-signatoriesof the Convention from its benefits, but that idea was discardedbecause such a provision would have been res inter alios acta. Thedrafters then confined themselves to inserting in the preamble ofthe Convention a declaratory sentence stating (and seeking toconvince non-Member States of the fact) that the advantages to begranted to each other by the signatories of the Convention wereconceded solely by virtue of the closeness of their association.

However, it appears that even the signatories of the Conventionwere not convinced of the merits of their method and that certaindelays in ratifying the Convention were due to a desire to ensurethat third States would not claim its benefits.104

The text of the Preamble, which is relevant in thisconnexion, reads as follows:

The Governments signatory hereto, being Members of theCouncil of Europe,

Considering that the aim of the Council of Europe is to safe-guard and to realise the ideals and principles which are the commonheritage of its Members and to facilitate their economic and socialprogress;

Recognising the special character of the links between the membercountries of the Council of Europe as affirmed in conventions andagreements already concluded within the framework of theC o u n c i l . . . ;

103 D . Vignes, op. cit., p . 293.104 State Institute of Law of the Soviet Academy of Sciences,

Kurs ... (op. cit.), p . 269.105 T Flory, Le GATT, droit international et commerce mondial

(Paris, Librairie generate de droit et de jurisprudence, 1968), p. 124.108 D . Vignes, op. cit., pp. 283-284; see also A. Ch. Kiss, op. cit.,

pp. 478-484.

Being convinced that, by the conclusion of a regional convention,the establishment of common rules for the treatment accorded tonationals of each Member State in the territory of the others mayfurther the achievement of greater unity;

Affirming that the rights and privileges which they grant to eachothers' nationals are conceded solely by virtue of the close associationuniting the member countries of the Council of Europe by means ofits Statute;

Noting that the general plan of the Convention fits into theframework of the organisation of the Council of Europe,

Have agreed as fo l lows : . . .107

(11) An inverted clause reservee, i.e. a clause expresslyallowing the granting of the benefits of the multilateraltreaty to outsiders can be found in article III of theAgreement of 15 July 1949 for facilitating the internationalcirculation of visual and auditory materials of an edu-cational, scientific, and cultural character:

4. Nothing in this Agreement shall require any contractingState to deny the treatment provided for in this article to like materialof an educational, scientific, or cultural character originating in anyState not a party to this Agreement in any case in which the denialof such treatment would be contrary to an international obligationor to the commercial policy of such contracting State.108

(12) The Convention on Transit Trade of Land-LockedStates of 8 July 1965 contains the following provision(article 10) on the relation to the most-favoured-nationclause:

1. The Contracting States agree that the facilities and specialrights accorded by this Convention to land-locked States in view oftheir special geographical position are excluded from the operationof the most-favoured-nation clause. A land-locked State which isnot a Party to this Convention may claim the facilities and specialrights accorded to land-locked States under this Convention onlyon the basis of the most-favoured-nation clause of a treaty betweenthat land-locked State and the Contracting State granting suchfacilities and special rights.

2. If a Contracting State grants to a land-locked State facilities orspecial rights greater than those provided for in this Convention,such facilities or special rights may be limited to that land-lockedState, except in so far as the witholding of such greater facilities orspecial rights from any other land-locked State contravenes themost-favoured-nation provision of a treaty between such otherland-locked State and the Contracting State granting such facilitiesor special rights.109

The preamble of the 1965 Convention reaffirmsprinciple VII relating to transit trade of land-lockedcountries adopted by the United Nations Conference onTrade and Development:

The facilities and special rights accorded to land-locked countriesin view of their special geographical position are excluded from theoperation of the most-favoured-nation clause.110

This principle stems from a proposal for an article onexclusion of the application of the most-favoured-nation clause included in a set of draft articles on accessto the sea of land-locked countries submitted by Czecho-

107 United Nations, Treaty Series, vol. 529, pp. 142 and 144.108 Ibid., vol. 197, p. 6.109 Ibid., vol. 597, p. 42.110 Ibid., p. 46.


Slovakia to the Preliminary Conference of Land-lockedStates in February 1958. The proposal was explained asfollows:

The fundamental right of a land-locked State to free access to thesea, derived from the principle of the freedom of the high seas,constitutes a special right of such a State, based on its naturalgeographical position. It is natural that this fundamental rightbelonging only to a land-locked State cannot be claimed, in view ofits nature, by any third State by virtue of the most-favourcd-nationclause. The exclusion from the effects of the most-favoured-nationclause of agreements concluded between land-locked States andcountries of transit on the conditions of transit is fully warranted bythe fact that such agreements are derived precisely from the saidfundamental right.111

It was this principle VII on which the drafters of theConvention relied and article 10 is seemingly nothingelse but the translation of the principle into practicalmeasures. Hence the question of the validity of article 10vis-a-vis States not parties to the Convention turns onthe nature of the "principle" on which it relies. Is it aprinciple derived from existing positive law or a principlederived from a conceptual postulate ? Does the consensusexpressed in UNCTAD suffice to establish the principleas customary law or is the principle no more than aninchoate rule of law, "a 'stage' in the progressive develop-ment and codification of the principles of internationallaw", which needs to be made concrete in the practice ofindividual States before it can acquire the character of afully fledged rule of international law ? m

(13) There is no authority expressly denying the ruleproposed in article 8.

. . . The validity of the "clause reservee" is difficult to assess.Since the "clause reservee" is res inter alios acta as far as the bene-ficiary State entitled to claim most-favoured-nation treatment isconcerned, it is hard to see how that clause, to which the State inquestion has not acceded, can reduce the scope of the commitmentsassumed towards it by the granting State.113

The same writer tries to distinguish between twosituations:

. . . If the treaty granting the privileged advantages and makingthem the subject of a "clause reservee" predates the conventionaccording most-favoured-nation treatment, it could be argued,taking into account the publicity necessarily given to treaties, thatthe beneficiary State could not have been unaware of the commit-ments entered into by the granting State and the "clause reservee"relating to those commitments. In such circumstances, the bene-ficiary State may be regarded as implicitly acceding to the "clauserdservee". However, in the case of a "clause reservee" laid down

111 Official Records of the United Nations Conference on the Lawof the Sea, vol. VII, Fifth Committee (Question of Free Access to theSea of Land-locked Countries) (United Nations publication, SalesNo. 58.V.4, vol. VII), p. 77, document A/CONF.13/C.5/L.1,annex 6, commentary to article 8. See also the report of the WorkingParty to the Fifth Committee (ibid., p. 84, document A/CONF.13/C.5/L.16, para. 13).

112 See M. Virally, "Le role des 'principes' dans le developpementdu droit international" and S. Bastid, "Observations sur une'etape' dans le developpement progressif et la codification desprincipes du droit international", in Faculte de droit de l'Universitede Geneve and Institut universitaire de hautes etudes intcrnationales,Geneve, Recueil d'itudes de droit international: en hommage aPaul Guggenheim (Geneva, Imprimerie dc la Tribune de Geneve,1968), pp. 531 and 132 (original text: French).

113 p Level, op. cit., p. 336, para. 20 (original text: French).

after the most-favoured-nation clauses, the granting State, whichhas not attached to the latter clauses any accompanying provisionlimiting their scope, cannot, a posteriori, avoid their applicationby virtue of a commitment entered into with the favoured State towhich the granting State has not been a party . . .114

This distinction, however, seems unwarranted and theargumentation in favour of the effect of the clausereservee stipulated previously to the most-favoured-nation clause is not sustained by any rule of the law oftreaties. The author quoted himself abandons this ideawhen he concludes as follows:

. . . We know the solution . . . given by the International Court ofJustice [in the Anglo-Iranian Oil Co. case]. The legal basis for mosl-favoured-nation treatment lies in the treaty which provides for suchtreatment, and the advantages accorded to the third State apply tothe beneficiary State only by reference. Consequently, the "clausereserved" cannot be invoked against the State which is a beneficiaryof the most-favoured-nation clause, since the rights of that State donot derive from the treaty containing the "clause reservee . . .116

(b) Multilateral treaties

(14) It seems to follow from the foregoing that a clausereservee, i.e. a treaty stipulation whereby a granting Stateand one or more "third States" expressly exclude theoperation of a most-favoured-nation clause, does notaffect the treaty rights of the State beneficiary of thatclause. Hence, treaty relations between the granting Stateand third States without an express stipulation in thesense mentioned can even less affect the rights of thebeneficiary State. Still there is a certain amount ofcontroversy concerning the question whether, in adefined sphere of relations between States, certain typesof agreement should be excepted from the operation ofthe most-favoured-nation clause. Here we come to thetopic of "Plurilateral treaties", and the reader is referredto the Special Rapporteur's first report, an annex towhich gives a brief summary of a digested report preparedby the League of Nations Secretariat in 1933.116 Thematter was briefly raised in the course of the Com-mission's deliberations 117 and therefore the presentationof a somehwat more detailed background material wouldseems to be appropriate in order to elucidate the question.Without dealing with the antecedents,118 it will berecalled that the question of plurilateral agreementsplayed a prominent role in the 1933 World Monetaryand Economic Conference. A Preparatory Commissionof Experts prepared for the Conference a draft annotatedagenda, the relevant section of which reads as follows:

A suggestion which has been strongly pressed in various quartersis that States should admit an exception to the most-favourcd-nation clause whereby advantages derived from plurilateral agree-ments should be limited to the contracting States and to such States

114 Ibid., para. 21 (original text: French).115 Ibid.116 Yearbook ... 1969, vol. II, pp. 179-180, document A/CN.4/

213, annex I, section on relations between bilateral agreementsbased on the most-favoured-nation clause and economic plurilateralconventions.

117 See Yearbook ... 1968, vol. I, p. 186, 976th meeting, para. 11.118 See J. Viner, The Customs Union Issue (Studies in the adminis-

tration of international law and organization, No. 10; New York,Carnegie Endowment for International Peace, 1950), pp. 22 et seq.


as may voluntarily grant equivalent advantages. This proposal(which has already been adopted in certain bilateral treaties) shouldcertainly be most carefully studied. It has been argued, in support ofthis proposal, that, in the absence of an exception of this kind, theconclusion of collective conventions would encounter insuperabledifficulties, since the application of the clause would, in suchcircumstances, place a premium on abstention. On the other hand,it has to be borne in mind that the circumstances of various countriesdiffer considerably, so that in many cases they could not adhere toa plurilateral agreement when they are unaware of the concretecases to which its provisions might later be applied and of thepossible consequences which its application might involve for them-selves. Moreover, there would be a danger of provoking the forma-tion of mutually opposed groups of countries, thus aggravating thevery evils which it is sought to mitigate. Finally, it has beenemphasized that care must be taken to avoid prejudicing the rightsof third parties.

In any case, these exceptions must be subject to the conditionsthat agreements of this kind be open to the adhesion of all interestedStates and that their aim should be in harmony with the generalinterest. Amongst the conditions that might be considered for thispurpose, mention may be made of a proviso that these agreementsshall have been concluded under the auspices of the League ofNations or of organisations dependent on the League. Further,these agreements must not involve new hindrances to internationaltrade vis-a-vis countries having most-favourcd-nation rights.Finally, "collective agreements" can only be regarded as such whenthey comply with certain conditions to be determined, as to thenumber of the participating States.

The Conference should endeavour to find a solution for thewhole of this question which will reconcile the interests of all.119

(15) In the era preceding the 1933 Conference, proposalsfor reaching agreement as to preferred status for collectivearrangements came from Europe and were intended insome form or another to cope with American competitionin foreign trade on the European market.120 Suchproposals met with strong opposition from the UnitedStates. The situation changed somewhat at the 1933Conference, where the United States Secretary of StateMr. Cordell Hull, outlined the conditions under whichthe United States would be willing to accept the exceptionof multilateral arrangements from most-favoured-nationcommitments.

The provision proposed by Mr. Hull for adoption bythe Conference read as follows:

The participating Governments urge the general acceptance ofthe principle that the rule of equality shall not require the generalis-ation to non-participants of the reduction of tariff rates or importrestrictions made in conformity with plurilateral agreements thatgive reasonable promise of bringing about such general economicstrengthening of the trade area involved as to prove of benefit tothe nations generally; provided such agreements:

"(a) Include a trade area of substantial size;

"(b) Call for reductions that are made by uniform percentagesof all tariff rates or by some other formula of equally broadapplicability;

"(c) Are open to the accession of all countries;

"(d) Give the benefit of the reductions to all countries which infact make the concessions stipulated and;

"fe) When the countries party to the plurilateral agreement donot, during the term of the plurilateral treaty, materially increasetrade barriers against imports from countries outside of suchagreement." m

The London Conference, however, " . . . was not onlyfated to be an addition to the already long list of abortiveinternational economic conferences but, as the result ofPresident Roosevelt's famous message blasting thecurrency stabilization proposals before the Conference,it was destined to collapse without even the standardamount of pretense that it had succeeded in accomplishinganything of consequence." 122 Later in 1933, at theSeventh International Conference of American States,held at Montevideo, Secretary Hull submitted andobtained the adoption in principle of a draft agreementhaving much in common with the proposal he had sub-mitted to the London Conference.

(16) The United States proposal led to the opening forsignature on 15 July 1934 of an Agreement concerningnon-application of the most-favoured-nation clause tocertain multilateral economic conventions.123 The sub-stantive provisions of the Agreement provide:

Article I

The High Contracting Parties, with respect to their relations withone another, will not, except as provided in Article II hereof,invoke the obligations of the most-favored-nation clause for thepurpose of obtaining from Parties to multilateral conventions ofthe type hereinafter stated, the advantages or benefits enjoyed bythe Parties thereto.

The multilateral economic conventions contemplated in thisArticle are those which are of general applicability, which include atrade area of substantial size, which have as their objective theliberalization and promotion of international trade or other inter-national economic intercourse, and which are open to adoption byall countries.

Article II

Notwithstanding the stipulation of Article I, any High Con-tracting Party may demand, from a State with which it maintains atreaty containing the most-favored-nation clause, the fulfillment ofthat clause insofar as such High Contracting Party accords in factto such State the benefits which it claims.

Notwithstanding the statement of Secretary Hullquoted in the Commission,124 this Agreement can hardlybe interpreted otherwise than as an expression of theview that a most-favoured pledge, unless otherwiseprovided, extends the benefits granted under a multi-lateral agreement. (It seems that the position taken by theUnited States at the time is similarly interpreted by

119 League of Nat ions , Monetary and Economic Conference,Draft Annotated Agenda Submitted by the Preparatory Commissionof Experts, document C.48.M.18.1933.II [Conf.M.E.I] . (Ser.L.o .N.P . 1933. I I . Spec. 1).

130 See details in 3. Viner, op. cit., pp . 22 et seq.

121 League of Nat ions , Monetary and Economic Conference,Reports Approved by the Conference on July 27th, 1933, and Resolu-tions Adopted bv the Bureau and the Executive Committee, documentC.435.M.220.1933.II [Conf. M.E.22(1)], p . 43 .

122 J . Viner, op. cit., p . 36.123 Agreement between the United States of America, Economic

Union of Belgium and Luxembourg, Colombia, Cuba , Greece,Guatemala , Nicaragua and P a n a m a to refrain from invoking theObligations of the Most-favoured-nation clause for the purpose ofobtaining the Advantages o r Benefits established by CertainEconomic Multilateral Conventions (League of Nat ions , TreatySeries, vol. CLXV, p . 9).

121 F o r reference, see foot-note 117.


Whiteman.125) The intention of the Agreement obviouslywas to create by common consent a conventional and ifpossible widely accepted, exception to the general rule.The experiment failed because only three States (and nottwo as indicated in the first report126) became parties tothe Agreement: Cuba, Greece and the United States.Little significance can be attributed to the fact that whensigning the Agreement, ad referendum, the BelgianAmbassador took the attitude that it did not constitute anew rule but merely stated that which was already inter-national law.127 What the Belgian Ambassador consideredsettled law in 1935 was put forward by the BelgianPremier in 1938 as a proposal. M. van Zeeland in hisreport submitted upon the request of the British andFrench Governments recommended that

Exceptions to M.F.N. to be admitted in order to allow theformation of group agreements aimed at lowering tariff barriers,provided these are open to the accession of other States.138

The idea that the most-favoured-nation clause shouldnot attract benefits resulting from provisions of multi-lateral trade conventions open for all States found itsway into the resolution adopted by the Institute ofInternational Law at its fortieth session (Brussels, 1936).129

(17) In the field of theory it was a Japanese writer whoproposed that a distinction be made in the field ofinternational trade and customs tariffs between "collectivetreaties of special interest" and "collective treaties ofgeneral interest".130 Most-favoured-nation clauses em-bodied in bilateral treaties would attract the benefitsstipulated in the former but would not give the right toadvantages promised in treaties of the latter types because,the argument went, these treaties being open to all Statestheir advantages can be easily acquired by accession. Inthis way acceding States assume also the obligationsimposed by the treaty and put themselves in a positionof equality with the other parties to it, whereas throughthe operation of a most-favoured-nation clause theywould claim only the advantages of the multilateraltreaty without submitting to its obligations.131

Ito's theory received scathing criticism from E. Allix.Referring to the argument based on the openness of themultilateral treaties in question he wrote:

Two answers may be made to this: the first is that, if the clause isunconditional, it will be turned into a conditional clause since thecountry acceding to the treaty will have to assume the obligationsof that treaty in order to acquire its advantages. To maintain thatany other solution would be immoral would be to question the veryconcept of the unconditional clause, since it invariably has theeffect of conferring advantages without corresponding obligations.

125 Op. cit., p. 765.126 Yearbook ... 1969, vol. II, p. 175, document A/CN.4/213,

para. 105.127 G. H. Hackworth, op cit., p. 293.128 League of Nations, Commercial Policy in the Interwar

Period: International Proposals and National Policies (Ser. L.o.N.P.1942. II. A.6), p. 84.

129 See para. 7 of the resolution {Yearbook .. . 1969, vol. II,pp. 180-181, document A/CN.4/213, annex II).

130 N . Ito, La clause de la nation la plus favorisee (Paris, LesEditions Internationales, 1930).

131 Similarly: G. Scelle, Precis de droit des gens: Principes etsystematique (Paris, Sirey, 1934), vol. II, p. 390.

Moreover, how can the criticism levelled at the unconditionalclause in connexion with plurilateral treaties be reconciled with theEconomic Committee's recommendation that the unconditionalformula should always be used ? Furthermore, the fact that thecommitment entered into becomes burdensome at a particularpoint in time is insufficient grounds for arrogating the right tomodify it.

In any event, what is an open treaty ? Mr. Ito himself mentionsthe case of a treaty to which all States wishing to do so couldtheoretically become parties but whose terms are such that, inpractice, they could only be fulfilled by the original signatories.

Furthermore, even if those terms can be fulfilled, they are farfrom being unimportant. A State acceding to the treaty at a sub-sequent stage would have to accept them without having been ableto discuss them. Such a State may find the obligations imposed onit in return for advantages to which it would in fact be entitledwithout counterpart if the clause was unconditional more burden-some than do other countries. It may also have special reasons fornot acceding to the treaty. Affiliation to a group, even one of apurely economic character, invariably has political repercussionswhich may preclude such affiliation.

To call upon the country to which the clause has been accorded toaccede to an agreement which it may find unacceptable is ratherlike someone telling his creditor: "I have promised to pay you amillion, but I am absolved from having to do so because you arefree to marry Miss X, whose dowry will provide you with thatamount."

The fact that, in such a case, all the benefits of the clause wouldbe withdrawn from the country to which an undertaking has beenmade also emerges clearly from the fact that it would be placed onexactly the same footing as countries which had not obtained thepromise of most-favoured-national treatment and which are in justas good a position as that country to accede to the open treaty.

We are thus led to conclude that the most-favoured-nation clauseis indeed an obstacle to the negotiation of plurilateral treaties andthat that obstacle can be removed only by an express reservationin the instrument embodying the clause or by the amicable agree-ment of the States beneficiaries of the clause.132

The views of Allix have received support from Rousseau,who writes:

. . . whatever the arguments in favour of the opportuneness ofexcluding [from the advantages of a collective treaty] the Stateparty to the bilateral treaty, such exclusion is difficult to reconcilewith the most-favoured-nation clause and clearly contradicts theguarantees of equality previously given to the State which is thebeneficiary of that clause. While the ostensible purpose of suchaction would be to thwart the selfish designs of a State wishing toobtain tariff advantages cheaply, would it not be even more im-moral to deny a co-contractor the application of a clause whosebenefits it had previously been promised.133

Rousseau shares the conclusions of Allix:

It must be recognized that, from the point of view of legaltechnique, the latter solution [an express reservation or the amicableagreement of the States beneficiaries of the clause] was morecorrect, since it shows greater concern to respect the concordanceof the wills of States, which is the only sound basis for positivelaw.. ,131

132 E. Allix, "Les aspects juridiques de la clause de la nation laplus favorisee", Revue politique et parlementaire (Paris), vol. 148,July-September 1931, pp. 231-232. (Italics supplied by the SpecialRapporteur.)

183 Ch. Rousseau, Principes generaux du droit international public(Paris, Pedone, 1944), vol. I, p. 777.

134 Ibid., p. 778.


(18) Practice also showed that the problem of conflictbetween plurilateral arrangements and most-favoured-nation obligations cannot be solved on the line of Ito'stheory. Under the Convention, negotiated at Ouchy butsigned at Geneva, on 18 July 1932, by Belgium, Luxem-bourg, and the Netherlands, the parties agreed, interalia, that there should be no increases in existing dutiesor application of new duties on imports from each other;that existing duties on imports from each other shouldbe reduced by 10 per cent per annum until the totalreduction reached 50 per cent; that there should be nonew barriers other than import duties on imports fromeach other; and that there should be open entry to theconvention on the part of other countries and extensionof its benefits to non-entering countries if they in factcarried out its terms. Belgium and the Netherlands,however, both had commercial treaties containing themost-favoured-nation clause with the United Kingdomand other countries, and the Ouchy Convention providedthat it should not come into effect until such countrieshad waived their rights. Great Britain refused to waiveits rights, the Ottawa Conference held in the same yearpassed a resolution declaring that regional agreementscould not be allowed to override most-favoured-nationobligations and the United States made no reply to therequest for a waiver. The Convention, in consequence,lapsed without ever coming into operation.135 The HagueConvention of 28 May 1937 was signed by the OuchyConvention countries plus Norway, Sweden, Denmarkand Finland. The Hague Convention provided forspecified "bindings" of tariff rates, and for removals ofspecified existing quantitative restrictions on importsfrom participating countries and undertakings not tointroduce new ones on commodities not already subjectto them. All non-participating States were declaredeligible to adhere to the Convention in conformity withterms to be negotiated between them and the countriesalready parties thereto. The Hague Convention cameinto actual operation, but the Netherlands declined torenew it at the end of its first year of operation, and theother parties to it thereupon allowed it to lapse. Againthe cause of the failure was that other countries, especiallythe United Kingdom, insisted on the most-favoured-nation right.136

(c) GATT and non-member States

(19) The General Agreement on Tariffs and Trade doesnot include a provision on the lines of article 98, para-graph 4 of the Havana Charter.137 The corner-stone ofthe General Agreement is an unconditional most-favoured-nation clause. The agreement is open to ac-cession by all States, at least this is how certain authors 138

interpret the text of article XXXIII, which reads asfollows:

A government not party to this Agreement... may accede tothis Agreement... on terms to be agreed between such governmentand the CONTRACTING PARTIES. Decisions of the CONTRACTING

PARTIES under this paragraph shall be taken by a two-thirdsmajority.139

What is the position of third States, not members ofGATT ? Can they claim under bilateral most-favoured-nation clauses GATT treatment from members ? There isno reason for a negative answer to this question. Thatsome treaties do expressly except GATT favours fromthe operation of the clause does not contradict butrather supports this view.140

The Working Group on organizational and functionalquestions of GATT considered in 1955 the question ofthe extension by contracting parties to non-contractingparties of the benefits of the Agreement by means ofbilateral agreements. It was pointed out in the discussionthat non-contracting parties frequently received all thebenefits of the Agreement without having to undertakeits corresponding obligations. Despite some dissatisfactionwith this situation, the majority consensus was that theattitude which the contracting party wished to adoptin this respect was a matter for each contracting party todecide.141 According to the Soviet textbook of inter-national law, Austria, after its accession to the GATT,did not immediately extend GATT rates of customsduties to the Soviet Union notwithstanding the most-favoured-nation treaty in force between the twocountries. The extension of such rates took place onlyupon the express demand of the USSR. Other WesternEuropean countries having most-favoured-nation treatieswith the Soviet Union extended GATT benefits to Sovietproducts automatically.142

(20) In C. Tennant, Sons and Co., of New York v. Dill143

before the District Court for the Southern District ofNew York the claimants invoked a trade agreementbetween the United States and Paraguay providing formost-favoured-nation treatment as to duties and customsformalities.144 They were seeking to obtain on the groundof the clause the benefits of the "en route" exception toquota restrictions which is provided for in GATT(article XIII, paragraph 3 (b).)145 This exception allowsgoods en route at the time of the proclamation of quotarestrictions to enter the country applying the restrictions.Paraguay was not a party to GATT, and the plaintiffsrelied on the grant of most-favoured-nation treatment inthe bilateral agreement. The Court, in 1957, rejected theclaim but only on the ground that the "most-favoured-nation" clause contained in article I of the Paraguayantrade agreement, drafted with clarity and particularityextended to customs duties and other matters, but did

135 J. Viner, op. tit., p p . 30-31.136 Ibid.137 See above, para . 7.138 E. Sauvignon, op. cit., p . 266.

130 United Nat ions , Treaty Series, vol. 62, p . 34.140 E. Sauvignon, op. tit., p . 267.141 G A T T document L/327, quoted in K . Hyder (Hasan) ,

Equality of Treatment and Trade Discrimination in international Law(The Hague, Nijhoff, 1968), p . 78, foot-note 2. See also Yearbook . . .1970, vol. I I , p . 230, document A/CN.4/228 and A d d . l , para . 187.

142 State Institute of Law of the Soviet Academy of Sciences,Kurs ... (op. cit.), p . 270.

143 158 F . Supp. 63, 67-68 (S .D.N.Y. 1957), quoted in M . White-m a n , op. cit., pp . 760-762.

144 Agreement of 12 September 1946, relating to reciprocal t rade(United Nat ions , Treaty Series, vol. 125, p . 179).

145 Ibid, vol. 55, p . 238.


not contain language from which its applicability toimport restrictions involving the fixing of quotas couldbe implied:

It seems clear, therefore, that the "most-favored-nation" clausecontained in the Trade Agreement with Paraguay is not sufficientlybroad to entitle Paraguay, and, hence, the plaintiff, to the benefits ofthe en route provision of GATT.146

Thus the judgement implicitly acknowledged that thebenefits of GATT (if ejusdem generis) can be claimedunder a bilateral clause.

(d) Other open multilateral agreementsand States not parties

(21) Before the United States became a party to theAgreement on the importation of educational, scientificand cultural materials of 22 November 1950 (FlorenceAgreement),147 it claimed, under most-favoured-nationclauses, for United States products the same treatmentas was accorded by a party to the Agreement to the'products of another party. Thus, on 12 June 1963, theDepartment of State instructed the United States Em-bassy at Rome:

In view of the disadvantageous competitive position in whichU.S. exports of scientific equipment have been put by the ItalianGovernment's action, it is suggested that the Embassy take thematter up informally with the proper Italian authorities. Theobjective of such discussions should be to obtain duty-free treatmentof such equipment if imported from the United States for sale toapproved institutions. In its approach to the Italian Government,the Embassy might point out that article XIV-1 of our FCN Treatywith Italy 148 and article 1:1 of GATT 149 provide for unconditionalmost-favored-nation treatment of U.S. products. Although suchtreatment is subject to specified exceptions, the Florence Agreementdoes not appear to fall within any of these exceptions. If Italy accordsduty-free treatment under certain circumstances to scientific equip-ment of any other country, then it must accord the same treatmentto imports of U.S. scientific equipment.160

In connexion with its presentation to Congress ofproposed implementation legislation of the United Statesfor this Agreement, the Executive prepared an affirmativereply to the question whether a country not a party tothe Agreement would "be entitled under the most-favoured-nation clause to the duty-free treatment ac-corded by a party to the Agreement to another suchparty", and it was explained that "the United Statesconsiders that legally a country not a party to the agree-ment would be entitled to such treatment pursuant to anunconditional most-favoured-nation clause with a partythereto", although it was recognized that some partiesto the agreement might give a negative answer to thequestion.151

In a discussion on 21 October 1957, at a Meeting ofGovernmental Experts on the Agreement on the Import-

146 See M. Whiteman, op. cit., pp . 761-762.147 United Nations, Treaty Series, vol. 131, p . 25.148 Article XIV, para. 1 of the Treaty of Friendship, Commerce

and Navigation signed at Rome on 2 February 1948 (ibid., vol. 79,pp. 190 and 192).

149 Ibid., vol. 55, p . 196 and vol. 138, p. 336.150 See M. Whiteman, op. cit., pp. 766-767.151 Ibid., p . 767.

ation of Educational, Scientific and Cultural Materials(held at Geneva, 21-29 October 1957), the following wasreported regarding a statement by the French represen-tative :

Mr. R.OISIN (France) recalled that the provisions of paragraph 1of Article I were applicable only to materials mentioned in An-nexes A, B, C, D and E of the Agreement which were the productsof another Contracting State. France, however, granted duty-freeentry for such materials, irrespective of the country of origin orexportation, for it considered that, by virtue of the unconditional"most-favoured-nation" clause included in the trade agreementswhich it had concluded with most countries, and having regard tothe obligations mentioned in Article IV, subparagraph (a), of theAgreement, no distinction as to country of origin or exportationshould be made with regard to the materials concerned. The FrenchGovernment wished to know whether such an interpretation wasaccepted by the other Contracting States.162

Article IV (a) of the Florence Agreement, referred toabove, states that the parties "undertake that they willas far as possible.. . continue their common efforts topromote by every means the free circulation" of thematerials to which the agreement relates, "and abolish orreduce any restrictions to that free circulation which arenot referred to in this Agreement".153

(e) Closed multilateral treaties

(22) The material presented in the foregoing seems toprove sufficiently that the rule proposed in article 8,being concordant with the general law of treaties, isvalid, and an agreement—express or implied—betweenthe granting State and any third State cannot divest thebeneficiary State of rights to which it is entitled underthe clause. The study carried out in this domain wasbased mostly if not exclusively upon practice and doctrinein relation to so-called open multilateral treaties con-cluded in the field of international trade. With regard totreaties of this kind, there were some arguments adducedbased upon the misunderstanding of the nature of theunconditional most-favoured-nation clause, and referencewas made to a certain practice purporting to establishan exception to the operation of the most-favoured-nation clause. After a careful examination of practiceand doctrine, however, " i t . . . [was] not possible todiscern in . . . [the practice of States] any constant anduniform usage, accepted as l aw. . ." 154 which wouldwarrant the proposal of a rule excepting open-endedmultilateral treaties, i.e. the favours resulting from suchtreaties, from the operation of most-favoured-nationclauses. The arguments for excepting the favours ofcertain multilateral commercial treaties from the oper-ation of the clause were based upon the openness of suchtreaties, i.e. on the faculty of the beneficiary State toaccede to such treaties and share in its benefits as aparticipant. The examination and rejection of this argu-ment leads a fortiori to the result that any derogationfrom the operation of a most-favoured-nation clause in

158 UNESCO/MC/34/SR.I-II, p. 9, as quoted by M. Whiteman,op. cit., p. 768.

153 United Nations, Tretaty Series, vol. 131, p. 30,151 Colombian-Peruvian asylum case, Judgement of November

20th, 1950, I.C.J. Reports 1950, p. 277.


respect of treaties not open to accession is out of thequestion. Still this topic needs further study owing mainlyto the fact that the question of the exception from theoperation of the clause of favours granted within certaintypes of closed economic groupings of States is raisedfrom time to time and different theories are advanced topromote the recognition of such exceptions. Suffice it torefer here briefly to paragraph 7 of the 1936 resolution ofthe Institute of International Law 1 5 5 and to the resolutionadopted at Edinburgh on 10 September 1969.156 As tothe 1936 resolution it has been rightly pointed out byVignes that it goes much further than originally con-templated by Nolde, the Rapporteur, and that theexception of regional arrangements ("mutual and exclusiveagreements between States, implying the organization ofregional or continental economic regimes") was adoptedby only 19 votes to 14.157 Vignes, while believing that theresolution had a "progressive character", writes:

The merits of such exceptions may be questioned. They areformulated in very broad terms and do not appear to have beenrecognized in subsequent practice, at least not universally.168

Reference is made also to the text of the 1969 resolutionof the Institute. Without touching upon the most im-portant matter dealt with in paragraph 2 (a) it can besafely stated that the importance of its paragraph 2 (b)is limited, first, because it is restricted to most-favoured-nations clauses in multilateral conventions on inter-national trade and, second, "because there is no indi-cation that the exception is a matter of right".159 Thatprovision's purpose does not seem to be so much theestablishment of a general legal principle as the layingdown of a guideline for such unsolved problems as thecompatibility of the Treaty of Rome establishing theEuropean Economic Community 1 6 0 with the rules ofthe General Agreement on Tariffs and Trade. Thecontemplated further study will obviously need to extendto controversial issues such as the "famous problem ofthe customs union and free trade a r e a . . . a problemwhich is very complicated and always of currentinterest" 1 6 1 and it will also have to examine the relationof the proposed rule of article 8 to the conventional andcustomary exceptions to the most-favoured-nationsclause.

155 See Yearbook... 1969, vol. II , p . 181, document A/CN.4/213,annex II , and P. Pescatore, loc. cit., pp . 1-159.

166 See annex below.167 Anmiaire de Vlnstitut de droit international 1936, vol. 39

(Paris), t. II , p . 83.158 D . Vignes, op. cit., p . 270.159 Ibid., p . 280.160 United Nations, Treaty Series, vol. 298, p. 11.161 M. Virally, "Le principe de reciprocity . . ." (loc. cit.), p. 76.

A N N E X

Resolution adopted on 10 September 1969 by the Institute ofInternational Law at its Edinburgh session (4-13 September 1969) a

II. T H E MOST FAVOURED NATION CLAUSEIN MULTILATERAL CONVENTIONS

(Fourth Commission)

The Institute of International Law,

Having in mind the Resolution passed at its 40th Session (1936)on "the Effects of the Most Favoured Nation Clause in Matters ofTrade and Navigation", especially as regards the unconditionalnature of the clause, the automaticity and extent of its effects, aswell as the observation of the principle of good faith in the appli-cation thereof,

Considering the need to review the problems of application andinterpretation of the clause as a result of the profound changes ininternational relations which have been caused, since then, by theintroduction of multilateral and institutional methods in the fieldof economic relations, both at world and regional level, and takinginto account the various economic systems of States, together withthe requirements of an economic policy in support of developingcountries,

Having examined the thorough report by Mr. Pierre Pescatore.Rapporteur of the Fourth Commission, on the Most FavouredNation Clause in Multilateral Conventions, and the comments ofthe Members of that Commission,

Recognizing the greater efficiency of the clause through theincorporation of the most favoured nation treatment in multilateralinstitutional systems,

Taking into consideration that the investigation of the subjectmatter, if it were to lead to exhaustive conclusions, would requirethe Institute to take up a position on various problems which arestill controversial and widely open to discussion and which, to besolved, mainly require political decisions:

1. Takes note of the Report and of its conclusions in thankingthe Rapporteur and the Members of the Commission for theircontribution to the study of the problem considered;

2. Emphasizes in particular, as regards the most favoured nationclause in multilateral conventions on international trade, thefollowing points contained in the Report:

(a) Preferential treatment in favour of developing countries bymeans of a general system of preferences based on objective criteriashould not be hampered by the clause.

(b) States to which the clause is applied should not be able toinvoke it in order to claim a treatment identical with that whichStates participating in an integrated regional system concede toone another.

(c) Derogations from the clause should be linked with appropriateinstitutional and procedural guarantees such as those provided bymultilateral systems.

a Anmiaire de Vlnstitut de droit international, 1969, vol. 53 (Basle),t. II, pp. 378-379.


DOCUMENT A/CN.4/269

Decisions of national courts relating to the most-favoured-nation clause

Digest prepared by the Secretariat

[Original text: English/French/Spanish][29 March 1973]

CONTENTSPage

Abbreviations 117

Introduction 117

I. The most-favoured-nation clause in matters relating to trade and customs 118

II. The most-favoured-nation clause in matters relating to treatment of aliens, including inherit-ance rights, taxation and cautio judicatum solvi 127

III. The most-favoured-nation clause in consular matters 149

ABBREVIATIONS

GATT General Agreement on Tariffs and TradeEEC European Economic CommunityIMF International Monetary FundTSUS Tariff Schedule of the United StatesU.S.C. United States CodeU.S.C.A. United States Code Annotated

Introduction

1. The present document, prepared by the Secretariat,contains a "Digest of decisions of national courts relatingto the most-favoured-nation clause". As indicated in thereport on its twenty-third session, the International LawCommission requested the Secretariat "to prepare onthe basis of the collections of law reports available to itand of the information to be requested from Govern-ments, a ' Digest of decisions of national courts relatingto most-favoured-nation clauses'".1 Accordingly, theSecretary-General, by a circular note dated 28 December1971, invited the Governments of Member States to

transmit to him, by 31 July 1972, materials and infor-mation concerning national courts' decisions relating tothe most-favoured-nation clause. At the time of thepreparation of the present digest, the Secretariat hadreceived information from the Governments of Finland,France, Greece and the Netherlands.2

1 Yearbook... 1971, vol. II (Part One), p. 347, documentA/8410/Rev.l, para. 113.

2 In reply to the Secretary-General's circular note mentionedabove:

Argentina stated the following:"Only indirectly and incidentally, our highest court, in ruling

on the merits of an extraordinary appeal lodged against a decisionby the High Court of Santa Fe which denied a claim based on theclauses of an international treaty, confirmed the impugned decisionin a judgement of 9 December 1919, signed by Mr. Bermejo,Mr. Gonzalez del Solar, Mr. Palacio and Mr. Figueroa Alcorta

(Continued on p. 118.)


2. The present digest is based on the informationreceived from the Governments of the above-mentionedMember States. It also reproduces decisions and otherrelevant information found in various legal publicationsavailable, most particularly the International Law Reports

(Foot-note 2 continued)y Mendez, and ruled . . . 'that neither the appelant's invocationof the powers conferred upon consuls under the treaties concludedwith the United Kingdom in 1825 (article 13) and with theKingdom of Prussia and the States of the German CustomsUnion in 1857 (article 9), which he claims extend to consuls ofthe Kingdom of Italy by virtue of the most-favoured-nationclause inserted in the agreements concluded with that Kingdom,nor precedent—if any—would affect the settlement of the pointat issue under federal law. In the first place, since these wereconcessions granted subject to reciprocity, it would have beennecessary to show that the Italian Government granted, or wasprepared to grant, those same concessions to consuls of Argen-tina . . . ' " (Argentina, Fallos de la Corte Suprema de Justicia :con relation de sus respectivas causas, vol. 130, p. 328). [Trans-lation from Spanish.]

Australia made the following observations:"There are no decisions of Australian courts relating to the

most-favoured-nation clause. The reason is that in Australia itis only the national legislation implementing a treaty and not atreaty itself, which can be relied upon in the national courts.Although where required by a treaty the principle incorporatedin the most-favoured-nation clause has been followed in relevantlegislation such as the 'Customs Tariff', there is no legislationspecifically providing that an individual has a general right tomost-favoured-nation treatment as such."Iran, referring to the most-favoured-nation clause, said that:

"although this clause has been inserted in certain of our treatiesof establishment and trade treaties, it should be noted that itsscope is extremely restricted in practice, for the following reasons:

"(1) Iranian courts apply the national la wof aliens in mattersrelating to their civil status;

"(2) The conditions attaching to the residence, establishmentand work of foreigners, and to their immovable property, are—subject to reciprocity—identical for all aliens;

"(3) In trade matters, Iranian customs regulations are based ona single customs tariff and make no provision for any preferentialregime."Italy said that

"The absence of any specific ruling by Italian courts in thismatters implies that the insertion of the most-favoured-nationclause in bilateral or multilateral international instrumentsentails rights and obligations which must necessarily be attributedto the States as such and as a contracting party to the internationalinstrument, that is, as a subject of international law. Accordingly,any dispute regarding the application or non-application of themost-favoured-nation clause acquires the character of an inter-national dispute and, since it is the State that plays the active orpassive role in the dispute as a subject of international law, asettlement of any such dispute must be arrived at through referralof the dispute to an arbitral organ or to an institutionally precon-stituted international court."

United Kingdom of Great Britain and Northern Ireland observed that"In the United Kingdom, in accordance with its constitutional

practice, treaties concluded by the United Kingdom are notself-executing and do not form part of the law of the land. Beforethey come into force any necessary legislation is enacted to giveeffect to them. In many fields traditionally covered by m.f.n.clauses, the legislation of the United Kingdom makes no distinctionby reference to nationality, and, accordingly, no specific legislationto give effect to the obligations under a m.f.n. clause is required.In these circumstances there is no occasion for the scope andoperation of the m.f.n. clauses to come in issue before the courtsof the United Kingdom. For this reason the Government of theUnited Kingdom are not in a position to transmit any materialand information other than the explanation given in this Noteconcerning the decisions of the courts relating to m.f.n. clauses."

and its predecessors.3 The decisions have been arrangedaccording to subject-matter, as indicated in the headingsof the various sections of the digest; within each section,they have been presented in chronological order.

I. The most-favoured-nation clausein matters relating to trade and customs

Thomas W. Bartram v. William H. RobertsonUnited States Supreme Court, 23 May 1887United States of America: Reports, vol. 122,* pp. 116tt seq.

3. The plaintiffs were merchants doing business inNew York, and in March and April 1882, they madefour importations of brown and unrefined sugars, theproduce and manufacture of the Island of St. Croix,a part of the dominions of the Kingdom of Denmark.The goods were regularly entered at the custom houseof New York, the plaintiffs claiming that they should beadmitted free of duty under the Treaty with Denmarkof 26 April 1826, because like articles, the produce andmanufacture of the Hawaiian Islands, were, under theTreaty of 30 January 1875 between the United Statesand the Hawaiian Islands, admitted free of duty. Thedefendant, however, who was the collector of the portof New York, treated the goods as dutiable articles,and, against the claim of the plaintiffs, exacted dutiesupon them which they paid to the collector under protestin order to obtain possession of their goods. They thenbrought the present action against the collector torecover the amount thus paid. The action was commencedin a court of the State of New York, and, on the motionof the defendant, was transferred to the Circuit Courtof the United States. The defendant demurred to thecomplaint, on the ground, among others, that it did notstate facts sufficient to constitute a cause of actionagainst him. The Circuit Court sustained the demurrer,and ordered judgment for the defendant; and the plain-tiffs brought the case for review. The Supreme Court,which affirmed the judgement, said:

The duties for which this action was brought were exacted underthe Act of the 14th of July, 1870, as amended on the 22d of Decemberof that year . . . The Act is of general application, making no excep-tions in favor of Denmark or of any other nation. It provides thatthe articles specified, without reference to the country from whichthey come, shall pay the duties prescribed. It was enacted severalyears after the Treaty with Denmark was made.

That the Act of Congress as amended, authorized and required theduties imposed upon the goods in question, if not controlled by thetreaty with Denmark, after the ratification of the treaty with theHawaiian Islands, there can be no question. And it did not lie with

3 Annual Digest of Public International Law Cases (London),J. Fischer Williams and H. Lauterpacht, eds., vols. 1 and 2 (coveringthe years 1919-1924), A. D. McNair and H. Lauterpacht, eds..vols. 3 and 4 (years 1925-1928), H. Lauterpacht, ed., vols. 5-7(years 1929-1934); Annual Digest and Reports of Public InternationalLaw Cases, H. Lauterpacht, ed., vols. 8-16 (years 1935-1949)(both publications referred to hereafter as Annual Digest); Inter-national Law Reports, H. Lauterpacht, ed., vols. 17-23 (years 1950-1956), H. and E. Lauterpacht, eds., vol. 24 (year 1957); E. Lauter-pacht, ed., vol. 25 (1958-1), vol. 26 (1958-11) and vols. 27 et seq.

1 United States Reports, vol. 122, Cases adjudged in the SupremeCourt at October Term, 1886 (New York, Banks Law Publishing,1921). Volumes in this series are referred to hereafter in this documentas U.S. Reports.


the officers of customs to refuse to follow its directions because ofthe stipulations of the treaty with Denmark. Those stipulations,even if conceded to be self-executing by the way of a proviso orexception to the general law imposing the duties, do not coverconcessions like those made to the Hawaiian Islands for a valuableconsideration. They were pledges of the two contracting parties, theUnited States and the King of Denmark, to each other, that, in theimposition of duties upon goods imported into one of the countrieswhich were the produce or manufacture of the other, there shouldbe no discrimination against them in favor of goods of like characterimported from any other country. They imposed an obligationupon both countries to avoid hostile legislation in that respect.But they were not intended to interfere with special arrangementswith other countries founded upon a concession of special privileges.The stipulations were mutual, for reciprocal advantages. "Nohigher or other duties" were to be imposed by either upon the goodsspecified; but if any particular favor should be granted by either toother countries in respect to commerce or navigation, the concessionwas to become common to the other party upon like consideration;that is, it was to be enjoyed freely if the concession were condi-tional.

The treaty with the Hawaiian Islands makes no provision forthe imposition of any duties on goods, the produce or manufactureof that country, imported into the United States. It stipulates forthe exemption from duty of certain goods thus imported, in consider-ation of and as an equivalent for certain reciprocal concessions onthe part of the Hawaiian Islands to the United States. There is insuch exemption no violation of the stipulations in the treaty withDenmark, and if the exemption is deemed a "particular favor"in respect of commerce and navigation, within the first article ofthat treaty, it can only be claimed by Denmark upon like compen-sation to the United States. It does not appear that Denmark hasever objected to the imposition of duties upon goods from herdominions imported into the United States, because of the exemptionfrom duty of similar goods imported from the Hawaiian Islands,such exemption being in consideration of reciprocal concessions,which she has never proposed to make.

Our conclusion is that the treaty with Denmark does not bindthe United States to extend to that country, without compensation,privileges which they have conceded to the Hawaiian Islands inexchange for valuable concessions. On the contrary, the treatyprovides that like compensation shall be given for such specialfavors. When such compensation is made it will be time to considerwhether sugar from her dominions shall be admitted free from duty.

James F. Whitney et al. v. William H. Robertson (Collec-tor of the Port of New York)

United States of America Supreme Court, 9 January 1888U.S. Reports, vol. 124, pp. 190 et seq.

4. The plaintiffs were merchants doing business inNew York; and in August 1882, they imported a largequantity of "centrifugal and molasses sugars", the pro-duce and manufacture of the Island of San Domingo.These goods were similar in kind to sugars produced inthe Hawaiian Islands, which were admitted free of dutyunder the Treaty of 30 January 1875 with the King ofthose Islands, and the Act of Congress, passed to carrythe Treaty into effect. They were duly entered at thecustom house at New York, the plaintiffs claiming thatby the Treaty of 8 February 1867 with the Republic ofSan Domingo the goods should be admitted, free of duty,as similar articles, the produce and manufacture of theHawaiian Islands. The defendant, the collector, refusedto allow this claim, treated the goods as dutiable articlesunder the Acts of Congress, and exacted duties on them.The plaintiffs appealed from the collector's decision to

the Secretary of the Treasury, by whom the appeal wasdenied. They then paid under protest the duties exacted,and brought this action to recover the amount. TheSupreme Court said:

The treaty with the king of the Hawaiian Islands provides forthe importation into the United States, free of duty, of variousarticles, the produce and manufacture of those Islands, in consider-ation, among other things, of like exemption from duty, on theimportation into that country, of sundry specified articles whicharc the produce and manufacture of the United States . . . Thelanguage of the first two articles of the Treaty which recite thereciprocal engagements of the two countries, declares that they aremade in consideration of the rights and privileges and as an equivalenttherefore, which one concedes to the other.

The plaintiffs rely for a like exemption of the sugars importedby them from San Domingo upon the 9th article of the Treaty withthe Dominican Republic, which is as follows: "No higher or otherduty shall be imposed on the importation into the United Statesof any article the growth, produce or manufacture of the DominicanRepublic, or of her fisheries; and no higher or other duty shall beimposed on the importation into the Dominican Republic of anyarticle the growth, produce or manufacture of the United States,or their fisheries, than are or shall be payable on the like articlesthe growth, produce or manufacture of any other foreign country,or its fisheries."

. . . The 9th article of the treaty with that Republic . . . is substan-tially like the 4th article in the treaty with the king of Denmark . . .It is a pledge of the contracting parties that there shall be no dis-criminating legislation against the importation of articles whichare the growth, produce or manufacture of their respective countries,in favor of articles of like character, imported from any other country.It has no greater extent. It was never designed to prevent specialconcessions, upon sufficient considerations, touching the importationof specific articles into the country of the other. It would require theclearest language to justify a conclusion that our Governmentintended to preclude itself from such engagement with other countries,which might in the future be of the highest importance to its interests.

. . . The act of Congress under which the duties were collectedauthorized their exaction. It is of general application, making noexception in favor of goods of any country. It was passed after thetreaty with the Dominican Republic; and if there be any conflictbetween the stipulations of the treaty and the requirements of thelaw, the latter must control. A treaty is primarily a contract betweentwo or more independent nations . . . For the infraction of itsprovisions a remedy must be sought by the injured party throughreclamations upon the other. When the stipulations are not selfexecuting they can only be enforced pursuant to legislation to carrythem into effect, and such legislation is as much subject to modifi-cation and repeal by Congress as legislation upon any other subject.If the Treaty contains stipulations which are self executing, thatis, require no legislation to make them operative, to that extentthey have the force and effect of a legislative enactment. Congressmay modify such provisions, so far as they bind the United States,or supersede them altogether. By the Constitution a treaty is placedon the same footing, and made of like obligation, with an Act oflegislation. Both are declared by that instrument to be the supremelaw of the land, and no superior efficacy is given to either over theother. When the two relate to the same subject, the courts willalways endeavor to construe them so as to give effect to both, ifthat can be done without violating the language of either, but ifthe two are inconsistent, the one last in date will control the other,provided always the stipulation of the treaty on the subject is self-executing. If the country with which the treaty is made is dissatisfiedwith the action of the legislative department, it may present itscomplaint to the executive head of the government, and take such


other measures as it may deem essential for the protection of itsinterests. The courts can afford no redress.

the countervailing duty shall be assessed. For the foregoing reasons,the protest is overruled.

. . . It follows, therefore, that when a law is clear in its provisions,its validity cannot be assailed before the courts for want of conform-ity to stipulations of a previous Treaty not already executed. Theduty of the courts is to construe and give effect to the latest expressionof the sovereign will. "So far as a treaty made by the United Stateswith any foreign nation can be the subject of judicial cognizance inthe courts of this country, it is subject to such acts as Congress maypass for its enforcement, modification, or repeal.

Consequently the judgement was affirmed.

Douglas Fairbanks v. United StatesUnited States of America: Customs Court, Third Division,

29 October 1929U.S. Treasury Decisions,6 pp. 371 et seq., T.D. 43643.

5. The subject of this protest was an automobileimported from England and assessed for duty at 33^3per centum ad valorem under paragraph 369 of theTariff Act of 1922.6 The plaintiff contended that theassessment of this countervailing duty on an automobilefrom Great Britain was in violation of the so-called"favored nation clause" in the 1815 treaty between theUnited States and Great Britain,7 for the reason thatautomobiles from other countries were admitted at alower rate of duty. From this plaintiff argued that thismerchandise should not be assessed with a rate of dutyin excess of the lowest rate imposed upon similar mer-chandise imported into the United States from anycountry. The Court said:

In our view there is no violation shown of the "most-favored-nation clause", for the reason that there is no discrimination in ourlaw in that it treats all nations alike. The United States imposesthe same rate of duty on automobiles from a particular countrylevies on automobiles imported from the United States. This iswithin the spirit of the article quoted above. It is within the powerof the exporting country to fix the rate at which such merchandiseshall enter the United States. There is mutuality of retaliation aswell as reciprocity. The law of the United States makes no exceptionsfor or against Great Britain. Each country fixes the rate at which

5 United States of America, Treasury Decisions under Customsand other Law, vol. 56, July-December 1929 (Washington, D.C.,U.S. Government Printing Office, 1930).

6 Paragraph 369, § 1, of the Tariff Act of 1922, reads as follows:"Automobiles, automobile bodies, automobiles chassis, motor

cycles, and parts of the foregoing, not including tires, all of theforegoing whether finished or unfinished, 25 per centum advalorem: If any country, dependency, province, or other sub-division of government imposes a duty on any article specifiedin this paragraph, when imported from the United States, inexcess of the duty herein provided, there shall be imposed uponsuch article, when imported directly or indirectly from suchcountry, dependency, province, or other subdivision of govern-ment, a duty equal to that imposed by such country, dependency,province, or other subdivision of government on such articleimported from the United States, but in no case shall such dutyexceed 50 per centum ad valorem."7 Convention to Regulate the Commerce between the United

States and the Territories of His Britannic Majesty, dated 3 July 1815.The relevant article (article II), reads in its pertinent part as follows:

"No higher or other Duties shall be imposed on the importationinto The United States of any articles, the growth, produce, ormanufacture of his Britannic Majesty's Territories in Europe,.. .than are or shall be payable on the like articles being the growth,produce, or manufacture of any other Foreign Country;..."

United States v. Domestic Fuel Corporation et al.United States of America: Court of Customs and Patent

Appeals, 2 April 1934Federal Reporter, Second Series, vol. 71 (2d),8 pp. 424

et seq.Annual Digest 1933—1934, Case No. 199.

6. This case involved the interpretation of the most-favoured-nation clause in treaties between the UnitedStates and Great Britain of 3 July 1815 and the UnitedStates and Germany of 14 October 1925. The RevenueAct of 1932 made coal subject to tariff "unless treatyprovisions of the United States otherwise provide", andsubject to the exception of coal imported from countrieswhose balance of trade in coal was favourable to theUnited States during the preceding calendar year. In 1931such a favourable balance existed with Mexico andCanada, and in 1932 the duty was lifted on coal fromthose countries. The plaintiffs, importing corporations,paid duties under protest on shipments of coal fromGreat Britain and from Germany, and sued to recover,claiming that the Revenue Act of 1932 had not repealedor modified the "most-favoured-nation" treaties but hadspecifically recognized them in the section "unless treatyprovisions... otherwise provide", and that the exemptionsof Canadian and Mexican shipments entitled the plain-tiffs to free importation. The United States CustomsCourt upheld this contention, and the United Statesappealed.

7. The Court held that the judgement must be affirmed.The treatment accorded the importations from Mexicoand Canada and those from Germany and Great Britainresulted solely from a trade condition which was past intime when the instant Revenue Act became law. It wasimpossible for any one of the nations involved to altera fact or condition of that nature. Since a tax on coalclearly could not be levied under the law in imports fromCanada and Mexico, the according of different treatmentto imports from other countries, based upon a conditionincapable of being altered, was discriminatory in a legalsense as well as in fact. Accordingly, the duty assess-ments here complained of were in conflict with therespective treaty provisions involved. The Court said:

The treaty with Great Britain belongs to that class of treatieswhich are called "conditional most-favored-nation treaties", whilethat with Germany is unconditional.

The latter recites: "Any advantage of whatsoever kind which eitherHigh Contracting Party may extend to any article, the growth,produce, or manufacture of any other foreign country shall simul-taneously and unconditionally, without request and without com-pensation, be extended to the like article the growth, produce ormanufacture of the other High Contracting Party." Article 7.

The treaty with Great Britain contains no such "unconditionally"or "without request and without compensation" provisions, and

8 United States of America, Federal Reporter, Second Series,Cases argued and determined in the United States Circuit Courts ofAppeals, United States Courts of Appeals, United States Court ofCustoms and Patent Appeals, vol. 71 (2d), July-September 1934(St. Paul Minn., West Publishing, 1934). Volumes in this series arereferred to hereafter as Federal Reporter, Second Series.

Most-favourcd-nation clause 121

it is insisted on behalf of appellant that, even if it be found that thecoal imported from Germany is entitled to free entry, the coal fromGreat Britain is not.

In other words, it is insisted that, although the treaty with Germanymay be self-executing, the treaty with Great Britain is an executorycontract which requires affirmative legislation by Congress to renderit effective.

It would thus seem that the trial court associated the BritishTreaty of 1815 with the German Treaty of 1925, and held the formereffective in these cases by reason of the latter being held effective.

While we agree with the general conclusion reached by the trialcourt, we do not place our decision as to the importation fromWales upon the ground adopted by that tribunal, but take theview that each case may be properly determined without referenceto the other.

It is our opinion that the Revenue Act of 1932 intended to, anddid, take cognizance of the most-favored nation clauses of alltreaties to which the United States were then a party.

The British treaty carries the clear provision: "No higher or otherduties shall be imposed on the importation... of any articles[from Great Britain into the United States and vice versa].. . thanare or shall be payable on the like articles . . . of any other foreigncountry. . . . " Article 2.

The treaty and the statute are laws pari materia and must beconstrued together. Such being the situation, so far as the caseshere before us are concerned, we fail to perceive any necessity forconsidering questions growing out of distinctions between treaties,self-executing in their provisions, and treaties which are not self-executing. As we view the matter, since, in 1932, coal was legallyimported into the United States from Canada and Mexico duty free,the law, as contained in the statute and the British treaty, entitledthe coal imported in that year from the United Kingdom of GreatBritain and Ireland to free entry, without any reference to thetreaty with Germany.

NOTE In the case George E. Warren Corporation v. UnitedStates decided by the United States Court of Customs and PatentAppeals on 12 June 1934 (see Federal Reporter, Second Series,vol. 71, p. 434), the plaintiff corporation, joined with the plaintiffin the above case here separately protested against the assessmentand collection of duties on certain importations of coal fromRussia in 1932, claiming that although the balance of trade incoal in 1931 was favourable to Russia, and although no treatywhatsoever existed between the two countries at that time, therecognition of treaty provisions in the statute and the existenceof "most-favoured-nation" clauses in treaties with other countries,and the admission of coal free of duty under the balance-of-tradeprovision, extended freedom from payment of duty to importsof coal from any country. The Court affirmed a judgement of theUnited States Customs Court overruling the protest: " . . . Ifa nation with which no most-favored-nation treaty exists mustbe permitted to have access to a country's markets upon the sameterms as a country with which there does exist such a treaty,because of that treaty, what necessity exists for separate anddistinct commercial treaties between nations ? Most-favoured-nation treaties are always reciprocal in character, whether theybe executory or self-executing. We have none with Russia. Russiamay lay whatsoever condition her government may choose tolay upon importations of coal from the United States. Becausewe have contracts whereby we agree not do discriminate in dutiesupon the goods of one country, the consideration being that thatcountry accords us the same treatment, are we in any wise legallybound to extend the terms of that treaty to a country which isin no wise bound to reciprocate ? We think the answer obviouslymust be in the negative . . . "

When Congress in section 601 of the Revenue Act of 1932 saidthat the taxes therein provided should be levied, "unless treatyprovisions of the United States otherwise provide," we think theintention was merely to recognize and maintain such contractsas existed between the United States and other nations, and thatthe phrase has no application to importations from countries withwhich no treaties exist that do "otherwise provide". Surely onlythose who are parties to a contract are entitled to the benefitsof it, only they are bound by it, and they are bound only to eachother.

If nations not parties to a treaty are to obtain its favors andbenefits in the same manner as those which are parties, we apprehendmuch confusion will arise in the realm of international commerceand law.

Let us suppose, for the purpose of illustration, that one of thenations with which the United States has a most-favored-nationtreaty by reason of which, under our decision in the DomesticFuel Corp. Case, supra, coal is entitled to free entry, should, forsome reason, elect to abrogate or modify that treaty and imposeduties discriminating against the products of the United States.Could it logically be maintained that we would continue bound toadmit their coal duty free ? We are unable to conceive our govern-ment as being so bound. But such would be the inevitable result ifthe principle here contended for by appellant should be adoptedand applied.

We had no treaty with Russia in 1932 which provided "otherwise"than that a tax might be levied upon coal imported therefrom, andRussia was not, by any contract with the United States, in thecategory of most-favored nations. We owed no legal obligation toRussia and Russia none to us respecting the duties or taxes whichshould be levied upon products exchanged in commerce betweenthe two countries.

There is nothing in the legislative history of the involved statutesubstantially all of which history is recited in our opinion in theDomestic Fuel Corp. Case, supra, which leads us to conclude thatCongress intended that there should be any constructions of theact other than that here given it.

The Yulu CaseBush et al. v. United StatesUnited States of America: Circuit Court of Appeals,

Fifth Circuit, 16 June 1934Federal Reporter, Second Series, vol. 71 (2d),pp. 635

et seq.

8. The Honduran motorboat Yulu was discovered bythe coast guard on 28 October 1932, outside the three-mile zone but within twelve miles of the shore of theUnited States, within the limits of the New Orleanscustoms district. She was ordered to heave to, butchanged her course and attempted to escape by proceed-ing away from the coast. She was pursued and capturedwithin the twelve-mile limit. Her master declined toproduce a manifest and none was found on board aftera search. She was seized and taken to Mobile, Alabama,and there turned over to the collector of customs. Later,libels were filed against the vessel and cargo in the Dis-trict Court for the Southern District of Alabama. Theowners of the vessel and cargo filed motions to dismissthe libels on various grounds, all to the effect that thecourt was without jurisdiction. The motions to dismisswere overruled and a decree was entered forfeiting thevessel and cargo, under the provisions of sections 584and 585 of the Customs Act of 17 June 1930.


9. On appeal, it was contended, inter alia, that theRepublic of Honduras had entered into a treaty with theUnited States on 7 December 1927, which containedthe most-favoured-nation clause; that by reason of saidclause citizens of Honduras were entitled to rely upon theprovisions of the treaty of 22 May 1924, between GreatBritain and the United States. The Court of Appealssaid:

An examination of other treaties between the United States andthe countries that had negotiated treaties similar to the Britishtreaty of 1924 discloses that they contain the most favored nationclause. Apparently it never occurred to any one that those countrieswould be entitled to the benefits of the British treaty because ofthat clause. This is tantamount to executive interpretation.

It is clear that the provisions of the Honduran treaty abovequoted were intended to apply to legitimate trade and note to warranta violation of the customs laws of the United States because of themost favored nation clause. The Yulu was not entitled to the benefitof the provisions of the British-American treaty of May 22, 1924.

Minerva Automobiles Inc. v. United StatesUnited States of America: Court of Customs and Patent

Appeals, 7 February 1938Federal Reporter, Second Series, vol. 96 (2d), pp. 836

et seq.Annual Digest 1938-1940, Case No. 196.

10. This was an appeal from the judgement of theUnited States Customs Court, which had overruled theprotest of the appellant against the assessment by theCollector of Customs at the Port of Los Angeles ofcountervailing duty under paragraph 369 § 1 of the TariffAct of 1922,9 amounting to 960 Belgian francs per100 kilos upon an automobile imported from Belgium.Appellant claimed that the automobile should have beenassessed with the normal duties under the aforesaidparagraph in view of the most-favoured-nation clausecontained in the Treaty of 29 June 1875 between Belgiumand the United States.10 The judgement was affirmed.The Court said:

Appellant has not attempted to prove the amount of customsduties which are imposed upon American automobiles by Belgiumor by Germany, but states that Germany charges more than 25 percentum ad valorem duty thereon and cites a Treasury Decision tothat effect. It, of course, is obvious that if appellant's contentionsare sound, it is immaterial what rates of duty are charged by Belgiumand Germany.

Appellant freely admits that if its contentions in the instant caseare correct, every nation having a treaty containing a most-favored-

9 See note 6 above.10 The first two paragraphs of article XII of this Treaty read as

follows:"In all that relates to duties of Customs and navigation, the

two high contracting parties promise, reciprocally, not to grantany favor, privilege, or immunity to any other State whichshall not instantly become common to the citizens and subjectsof both parties respectively; gratuitously, if the concession orfavor to such other State is gratuitous, and on allowing the samecompensation, or its equivalent, if the concession is conditional.

"Neither of the contracting parties shall lay upon goods pro-ceeding from the soil or the industry of the other party, whichmay be imported into its ports, any other or higher duties ofimportation or re-exportation than are laid upon the importationor re-exportation of similar goods coming from any other foreigncountry."

nation clause of any character is entitled to have its automobilesexempted from the countervailing duty provided for in the paragraphin dispute. It points out that after the German treaty was entered into,the Reciprocal Trade Agreement Act was incorporated into theTariff Act of 1930 as section 350 thereof,... and states:

" . . . Therefore, to effectuate its policy of expanding foreigntrade without disrupting treaty relations, and to avoid disputeand discrimination, Congress expressly extended all favorsgranted any one nation, to all other nations."

It is a matter of common knowledge that practically every nationof the world with whom we have commercial relations has a most-favored-nation treaty.

The trial court took the view that since Belgium had a conditionalmost-favored-nation treaty, it was not entitled to claim the sametariff treatment for automobiles as was extended to Germany whichhad an unconditional most-favored-nation treaty, and cited anumber of decisions as bearing on this phase of the case. None ofthese decisions involved the question presented here, since the tarifftreatment extended Germany or extended to any nation having atreaty relationship comparable to that of Germany was not involvedtherein.

Here, as there, it is unthinkable that Congress had such a resultas is contended for by appellant in contemplation when it enactedthe countervailing duty provisions of said paragraph 369. It knewwhen it enacted the paragraph of the existence of the numerousmost-favored-nation treaties and it must have known that if they werepermitted to affect the paragraph its enactment would have been auseless and purposeless thing to do. We must not attribute toCongress the intention of performing such a futile and purposelessact.

It is, therefore, our conclusion that the trial court correctly heldin substance, that it was the intent of Congress that the countervailingduty provision under paragraph 369 should supersede the saidBelgian treaty in respect to the countervailing duty on automobiles.It is our judgment that no other holding can logically be reachedwithout in effect finding that the paragraph of the tariff act incontroversy is a nullity. This we must decline to do.

John T. Bill Co. Inc. et al. v. United StatesUnited States of America: Court of Customs and Patent

Appeals, 29 May 1939Federal Reporter, Second Series, vol. 104 (2d), pp. 67

et seq.Annual Digest 1938-1940, Case No. 197.

11. This was an appeal from the judgement of theUnited States Customs Court; there were involved twoprotests of importers (the cases having been consolidatedfor trial) by which they sought to recover such duties aswere assessed as countervailing duties upon merchandisedescribed as bicycle parts imported from Germany in1931 and 1934. The merchandise was classified underparagraph 371 of the Tariff Act of 1930.11 The import-

11 Paragraph 371 of the 1390 Tariff Act reads as follows:"Bicycles, and parts thereof, not including tires, 30 per centum

ad valorem: said if any country, dependency, province, or othersubdivision of government imposes a duty on any article specifiedin this paragraph, when imported from the United States, inexcess of the duty herein provided, there shall be imposed uponsuch article, when imported either directly or indirectly from suchcountry, dependency, province, or other subdivision of govern-ment, a duty equal to that imposed by such country, dependency,province, or other subdivision of government on such articleimported from the United States, but in no case shall such dutyexceed 50 per centum ad valorem." {Federal Reporter, SecondSeries, vol. 104 (2d), p. 68.)


ations were assessed with duty at 50 per centum advalorem. Paragraph 371 provided a normal duty rate of30 per centum ad valorem. The duties resulting from thatrate were not in question, it being claimed in bothprotests that the assessments should be at that rate.The protests were predicated upon the Treaty of Friend-ship, Commerce and Consular Rights of 14 October 1925between the United States and Germany, particularlyupon article VII.12

12. The appellants stated that the action of the collectorin exacting a duty of 50 per centum ad valorem was inviolation of the unconditional grant of most-favoured-nation treatment accorded Germany in the above treatyin view of the fact that bicycle parts of worked iron werethen admissible from other countries at a lower rate ofduty. The entire contention rested upon the unconditionalcharacter of the treaty, it, in effect, being conceded that,upon the authority of a long line of decisions, by boththe executive and judicial branches of the Government,the most-favoured-nation doctrine would not apply inthis case were the treaty of the conditional type, such,for example, as was the treaty with Belgium involved inanother case.13 The judgement was reversed. The Courtsaid:

That article VII of the treaty was in full force at the time of therespective importations here involved is not in question and variousTreasury Decisions are cited which show that at those times mer-chandise of the kind involved was admissible from other foreigncountries at a duty rate of only 30 per centum ad valorem.

12 Article VII reads as follows:"Each of the High Contracting Parties binds itself uncon-

ditionally to impose no higher or other duties or conditions andno prohibition on the importation of any article, the growth,produce or manufacture, of the territories of the other than areor shall be imposed on the importation of any like article, thegrowth, produce or manufacture of any other foreign country.

"Each of the High Contracting Parties also binds itself uncon-ditionally to impose no higher or other charges or other restrictionsor prohibitions on goods exported to the territories of the otherHigh Contracting Party than are imposed on good exported toany other foreign country.

"Any advantage of whatsoever kind which either High Con-tracting Party may extend to any article, the growth, produce,or manufacture of any other foreign country shall simultaneouslyand unconditionally without request and without compensation,be extended to the like article the growth, produce or manufactureof the other High Contracting Party.

"With respect to the amount and collection of duties onimports and exports of every kind, each of the two High Con-tracting Parties binds itself to give to the nationals, vessels andgoods of the other the advantage of every favor, privilege orimmunity which it shall have accorded to the nationals, vesselsand goods of a third State, and regardless of whether such favoredState shall have been accorded such treatment gratuitously or inreturn for reciprocal compensatory treatment. Every such favor,privilege or immunity which shall hereafter be granted the nationals,vessels or goods of a third State shall simultaneously and uncon-ditionally, without request and without compensation, be extendedto the other High Contracting Party, for the benefit of itself, itsnationals and vessels." (United States of America, The Statutesat Large of the United States of America from December, 1925,to March, 1927 (vol. XLIV, Part 3 (Washington, D.C., U.S.Government Printing Office, 1927), p. 2137). (References to thispublication in the text of the present document are given in theabbreviated form, "Stat." preceded by the number of the volumeand followed by the page number, e.g. "44 Stat. 2137.)13 See para. 10 above.

From the language of the treaty,... it seems clear to us that thelevy of duties at the rate of 50 per centum ad valorem while similarmerchandise was being admitted, or was subject to admission, fromother countries at the" rate of 30 per centum ad valorem, was incontravention of the treaty's provisions.

. . . Paragraph 371 of that act, 42 Stat. 885, was in the preciselanguage of paragraph 371 of the 1930 a c t . . . We think it wasclearly understood that the intent and effect of the treaty was tomodify such provisions of the tariff act in relation to importationsfrom Germany, and Germany was not required to give compensationtherefor in her own laws beyond assuring that merchandise importedfrom the United States should be treated in the same manner as likemerchandise imported from other countries.

The treaty was reciprocal and it was self-executing, requiring nolegislation other than its own enactment, so far as any matter hereinvolved was concerned. There is no claim that the rate of dutywhich Germany was then assessing upon bicycle parts imported fromthe United States was any higher than the rate imposed upon thoseparts when imported from other countries, and the fact that suchrate was higher than the basic rate imposed by the United States isnot of legal moment.

There remains to be considered the contention made by counselfor the Government that the most-favoured-nation clause of thetreaty with Germany was superseded by the Tariff Act of 1930,specifically (as to the merchandise here involved) by paragraph 371...of the act. As has been indicated, the insistence is that our decisionhere should be controlled by our decision in the Minerva Auto-mobiles, Inc., case . . .

We do not agree with this view. The cases are clearly distinguish-able. In that case it was held that the conditional most-favoured-nation clause of the Belgian Treaty of 1875, had been superseded,as to the merchandise there involved, by paragraph 369 of theTariff Act of 1922. So far as we are able to ascertain, there was noprovision of law such as paragraph 369 in effect at the time of theratification of the Belgian Treaty, hence that treaty did not have theeffect of repealing or superseding any prior act of Congress.

When the German Treaty was ratified paragraph 371 of the TariffAct of 1922 was in effect and the treaty, in our view, superseded itso far as importations from Germany were concerned, but theparagraph remained in effect as to importations from countrieswith which we had no commercial treaties or had only treaties ofthe conditional type. In order that those countries might have thebenefit of the normal rate it was necessary that they should com-pensate by giving to importations from the United States a similarrate. The agreement between the United States and Germany wasthat each should receive the benefit of the lowest rate granted by itto any third country, "simultaneously and unconditionally, withoutrequest and without compensation"... It was not required that inorder to make applicable the rate of 30 per centum ad valorem onbicycle parts imported from Germany that country should give thatrate to importations from the United States. It was only requiredthat Germany admit importations from the United States at thelowest rate granted upon importations from any other country.

Such was the situation when the Tariff Act of 1930 was enacted.That act did not repeal paragraph 371 of the 1922 Act , . . . butcontinued it. The general repealing clause in the Act of 1930 ranonly to "All Acts and parts of Acts inconsistent with the provisionsof this Act, [chapter]". Sec. 651, Tariff Act of 1930 . . . Thereremained ample room for the application of paragraph 371 toimportations from many countries other than Germany. At thetime of the enactment of the 1930 tariff act the German Treaty wasthe only one of its type which had been ratified and embodied in thestatutes at large, and we find no history connected with the passageof the tariff act which indicates any intention on the part of Congressto abrogate or supersede that treaty. It is well established, of course,that where a treaty and an act of Congress are in conflict, the latestin date must prevail...


Obviously the treaty with Germany marked the adoption of anew policy on the part of the United States. The history of the periodis replete with statements to that effect, and , . . . it was contemplatedthat such new policy would be followed in the negotiation ofadditional treaties with other countries. We feel justified in conclud-ing that these facts and the expressed intent must have been in themind of Congress at the time of the enactment of the Tariff Actof 1930, and that had the Congress intended to alter such policyit would have been expressed in the act.

That the repeal of statutes by implication is not favored is familiarlaw, and the courts uniformly have intimated an even strongerdisposition to apply the rule in cases where treaties are involved . . .

. . . , we are of the opinion that paragraph 371 of the Tariff Act of1930,... did not repeal or supersede the unconditional most-favored-nation provisions of the treaty with Germany with respectto the merchandise involved, and, since we are of the opinion thatthe assessment of the duties here complained of was contrary tosuch provisions, we disagree with the conclusion reached by theThird Division.

Application of the Trade Agreement between Finland andthe United Kingdom of Great Britain and NorthernIreland

Finland, Supreme Court of Administration, 12 March 194314

13. The duties imposed on certain goods in the tradeagreement between Finland and the United Kingdomwere to be applied also to goods imported from Germanyin accordance with the most-favoured-nation clausebetween Finland and Germany. The court decidedthat after the United Kingdom had declared war onFinland, the most-favoured-nation clause was no longerapplicable to Germany, and, consequently, the dutiesimposed on goods imported from Germany should betreated autonomously and not according to the tradeagreement between Finland and the United Kingdom.

Colonial Molasses Co , Inc. v. United StatesUnited States of America, Customs Court, Third Division,

22 January 1957Federal Supplement, vol. 152,1& pp. 242 et seq.International Law Reports, 1957, p. 670

14. This was a proceeding on protest against the failureof the Collector of Customs to apply to 50 cans of bees'honey, imported into the United States from Cuba,the 20 per cent preferential reduction in customs dutyprovided under the Convention of Commercial Recipro-city between the United States and Cuba, signed atHavana on 11 December 1902. The Collector hadassessed duty at the rate stipulated in the Tariff Actof 1930, as modified by GATT, signed at Geneva on30 October 1947.16 By an exclusive Agreement supple-mentary to the General Agreement on Tariffs and Trade,signed on the same day, the United States and Cuba

14 Information received from the Government of Finland. Nofurther information regarding this case is available.

15 United States of America, Federal Supplement, Cases Arguedand Determined in the United States District Courts, United StatesCustoms Courts, vol. 152 (St. Paul, Minn., West Publishing Co.,1957). Volumes in this series are referred to hereafter as FederalSupplement.

16 For the text of the GATT, see United Nations, Treaty Series,vol. 55, p. 194.

had agreed to make inoperative the Treaty of 1902 andthe Trade Agreement of 1934 for the period that theUnited States and Cuba were both contracting partiesto the GATT. The Agreement of 1947 eliminated thepreferential reduction of 20 per cent, provided for underthe Treaty of 1902 and under the Trade Agreement of1934 and provided for the flat rate agreed under theGATT. The plaintiff contended that the duty on bees'honey had been increased by the suspension or renderinginoperative of the Treaty of 1902, and that this increasein duty had not been authorized by the Congress.

15. The Customs Court held that judgement must berendered for the United States. Under 350 (b) of theTrade Agreements Act (48 Stat. 944, as amended,19 U.S.C. 1351 (Z>)), the President of the United Stateswas not precluded from modifying any pre-existingpreferential customs treatment of any article, providedthat duties in force in 1945 were not thereby increasedor decreased by more than 50 per cent. Even if thesuspended Treaty of 1902 were taken into account,the duty on the imported honey was within the 50 percent adjustment. The Court said:

The rate on honey imported from Cuba, established January1, 1945, was 0.012 cents per pound, except as it might be reducedby a most-favored nation rate. There is no evidence that it had beenreduced. The President proceeded, in exercise of authority conferredon him by Congress, to change the existing duty on bees' honey,product of Cuba, by eliminating the general preferential reductionof 20 per centum through the mechanism of continuing the inoper-ative status of the 1902 Cuban treaty and proclaiming that statusas well as a new rate of 0.01 cent per pound under the GeneralAgreement on Tariffs and Trade, supra. Even if the cited languageof section 350 (b) means (and this is far from clear) that the Presi-dential authority to raise or lower duty on Cuban imports musttake into account, as the basis for increase or decrease, the tempora-rily suspended treaty of 1902, the duty on honey imported from Cubais, nevertheless, within the permitted 50 per centum adjustment...

C. Tennant, Sons and Co. of New York v. Robert W. DillUnited States of America: District Court, Southern

District of New York, 16 December 1957Federal Supplement, vol. 158, p. 63International Law Reports, 1957, p. 677

16. The plaintiff, an importer of Paraguayan tung oil,sought a preliminary injunction restraining the defendantfrom denying the entry into the United States ofcertain tung oil owned by it. On 2 September 1957,662,540 pounds of tung oil, of a value of approximately$150,000, were shipped to the plaintiff from Asuncion,Paraguay, followed by a further shipment of 485,012pounds on 12 September. On 9 September 1957, thePresident of the United States, pursuant to the Agri-cultural Adjustment Act, issued a Proclamation imposinga quota of 96,452 pounds on imports of tung oil priorto 1 October 1957, and of not more than 131,566 poundsper month from October 1957 to January 1958. Noreference was made to tung oil en route to the UnitedStates. On 7 October, the plaintiff attempted to obtainentry of his first shipment, but the defendant Collectorof Customs permitted the entry of only 131,460 poundsbeing the entire quota for the month of October 1957.The second shipment was similarly rejected. The plaintiff


maintained that under the most-favoured-nation clauseof the Agreement between the United States of Americaand Paraguay relating to reciprocal trade 17 signed atAsuncion on 12 September 1946, it was entitled to thebenefit of the provision of subparagraph 3 (b) ofArticle XIII of the GATT concluded at Geneva on30 October 1947, exempting goods en route at the timeof the establishment of import restrictions from theeffect of such quotas. Paraguay was not a party to thelatter Agreement.

17. The Court held that the motion for a preliminaryinjunction must be denied. An agreement providing formost-favoured-nation treatment as to duties and customsformalities does not require such treatment as to importrestrictions and quotas. The "en route" clause of GATTaccordingly had no application to trade relationshipsbetween Paraguay (which was not a party to the GATT)and the United States. In any event, the provisions ofthe Agricultural Adjustment Act would prevail overan inconsistent stipulation in an international agreement.The Court said:

Paraguay was not a signatory to GATT . . .. Nevertheless, theplaintiff contends that by reason of the "most-favorcd-nation" clausecontained in Article I of the Paraguayan Trade Agreement, Paraguayis a beneficiary of the en route clause in GATT and that, therefore,the quota restriction here at issue does not apply to plaintiff'sen route tung oil. This contention, in my opinion, lacks merit.Article I, subdivision 1, of the Trade Agreement with Paraguay ineffect requires the signatories to grant each other unconditionaland unrestricted "most-favored-nation" treatment in all mattersconcerning:

1. Customs duties and subsidiary charges of every kind;

2. The method of levying such duties and charges;

3. The rules, formalities and charges imposed in connectionwith clearing goods through customs;

4. All laws or regulations affecting the sale, taxation, distributionor use of imported goods within the country. Subdivision 2 of

17 United Nations, Treaty Series, vol. 125, p. 179. Article I ofthe agreement provides:

" 1. The United States of America and the Republic of Paraguaywill grant each other unconditional and unrestricted most-favored nation treatment in all matters concerning customsduties and subsidiary charges of every kind and in the methodof levying such duties and charges, and, further, in all mattersconcerning the rules, formalities and charges imposed in connec-tion with the clearing of goods through the customs, and withrespect to all laws or regulations affecting the sale, taxation,distribution or use of imported goods within the country.

"2. Accordingly, articles the growth, produce or manufactureof either country imported into the other shall in no case besubject, in regard to the matters referred to above, to any duties,taxes or charges other or higher, or to any rules or formalitiesother or more burdensome, than those to which the like articlesthe growth, produce or manufacture of any third country areor may hereafter be subject." {Ibid p. 180.)Article III, paragraph 1 of that Agreement provides:

"1 . No prohibition or restriction of any kind shall be imposedby the Government of the United States of America or theGovernment of the Republic of Paraguay on the importation,sale, distribution or use of any article the growth, produce ormanufacture of the other country, or on the exportation of anyarticle destined for the territory of the other country, unless theimportation, sale, distribution or use of the like article the growth,produce or manufacture of all third countries or the exportationof the like article to all third countries respectively, is similarlyprohibited or restricted." (Jbid., p. 182.)

Article I in substance requires that each of the signatories beaccorded treatment equal to that accorded any third country withrespect to "duties, taxes or charges" or any rules or formalities.

The subjects covered by subdivisions 1 and 2 of Article I aredescribed with clarity and particularity. The phrase "importrestriction" and the word "quota" nowhere appear. Furthermore,those subdivisions do not, in my opinion, contain languagefrom which their applicability to import restrictions involvingthe fixing of quotas can be implied.

It is interesting to note that Article I of the Trade Agreementwith Paraguay is considerably more explicit and restrictive thanare certain other parts of the Trade Agreement. For example,Article III, subdivision 1 of the Agreement employs the language"no prohibition or restriction of any kind" and in Article XII,subdivision 1 the all-inclusive terms "concession" and "customstreatment" are used.

It seems clear, therefore, that the "most-favored-nation" clausecontained in the Trade Agreement with Paraguay is not sufficientlybroad to entitle Paraguay and, hence, the plaintiff, to the benefitsof the en route provision of GATT.

The Presidential Proclamation of September 9, 1957, whileit does not expressly mention en route goods, nevertheless,declares "That for the period commencing September 9, 1957,and ending October 31, 1958, the total quantity of tung oil enteredshall not exceed 26,000,000 pounds". (Emphasis supplied.)Since no exception was made as to en route tung oil, the pre-sumption is that none was intended. This is particularly true inthe case at bar where a contrary interpretation would seriouslyimpair the effectiveness of the Proclamation by flooding theAmerican market with large quantities of imported tung oil.

Energetic Worsted Corp. v. United StatesUnited States of America: Customs Court, Third Division,

21 October 1963Federal Supplement, vol. 224, p. 606International Law Reports, vol. 34, p. 217

18. The United States collector of customs leviedcountervailing duties on the wool tops exported fromUruguay to the United States on the ground that themultiple exchange rate system in effect in Uruguayamounted to a subsidy for exports and conferred abounty of grant on wool tops requiring the impositionof a countervailing duty pursuant to Section 303 ofthe Tariff Act of 1930. This was a proceeding on protestagainst the decision of the collector of customs. Theplaintiff contended that the assessment of countervailingduties violated the "most-favoured-nation" clause in aTreaty of 21 July 1942 between the United States andUruguay, because countervailing duties were not imposedupon wool tops exported from Argentina to the UnitedStates, although a multiple exchange rate system wasin effect in that country.

19. The Court held that the protest must be overruledand judgement entered for the defendant. The multipleexchange rate system in effect in Uruguay at the timeof the exportation conferred such a bounty on wool topsas to require the imposition of countervailing dutiespursuant to Section 303 of the Tariff Act. The impositionof countervailing duties did not violate the "most-favoured-nation" clause. The Court said:

126 Yearbook of the International Law Commission, 1973, vol. U

Plaintiff also claims that the levying of countervailing duties inthe instant case was a violation of the most-favoured-nation clauseof the Trade Agreement with Uruguay, since no countervailingduty was imposed on wool tops from Argentina. First, the recorddoes not establish that Argentina's exchange system resulted in abounty on wool tops. Second, as stated in defendant's brief:

"Since the application of the countervailing duty statute isdependent upon a determination whether in any given countrya grant or bounty has been paid or bestowed directly or indirectly,upon the manufacture, production, or export of any article ormerchandise, and since the situation in any given country isunique, any comparisons with action taken or not taken by theUnited States Government with regard to the imports from anyother countries are not relevant."

The General Agreement on Tariffs and Trade, . . . under whichthe regular duties on the present wool tops were assessed, providesthat countervailing duties may be imposed if not in excess of theestimated bounty or subsidy determined to have been granted,directly or indirectly, on the product. Furthermore, it has been heldthat the imposition of countervailing duties does not violate themost-favoured-nation clause.

United States v. Star Industries, Inc.United States of America, Court of Customs and Patent

Appeals, 22 June 1972International Legal Materials, Current Documents, vol. XI,

No. 5,18 p. 1093

20. This was an appeal from the decision and judgementof the United States Customs Court, sustaining a protestby Star Industries against the amount of duty assessedon brandy imported from Spain. The brandy had beenclassified under item 945.16, TSUS ($5 per gal.) accordingto the Presidential Proclamation No. 3564 which broughtitem 945.16 into existence.19 The Customs Court ruledthat it should have been classified under item 168.20($1.25 per gal.) and that the Presidential Proclamationwas invalid and void. The Court of Customs and PatentAppeals found that the President did not exceed theauthority granted him under section 252 (c) of theTrade Expansion Act of 1962 (19 U.S.C. 1882 (c)) inissuing Proclamation No. 3564. That proclamation wastherefore valid and the judgement of the CustomsCourt was reversed.

18 Washington, D.C., September 1972.19 "The events surrounding Proclamation No. 3564 are referred

to in international trade circles as 'the chicken war'. Briefly, itappears that during the late fifties and early sixties,United Statespoultry producers had found a rapidly burgeoning market forfrozen poultry in Germany. In 1962, however, the German importfees on poultry were replaced by import fees promulgated by theEuropean Economic Community (EEC). The EEC import fees wereabout three times as high as the German fees they replaced, whichadversely affected further importation of U.S. poultry into Germany.The action taken by the President in issuing Proclamation No. 3564was in the nature of the compensatory withdrawal of previouslyproclaimed tariff concessions. The higher rates were calculated toincrease the duty on EEC goods in an amount which would approxi-mately balance the higher EEC import fees.

"Although Spain in not a member of the EEC, the brandy wascharged the item 945.16 rate because that rate was instituted on amost-favored-nation basis. The products included under Proc-lamation No. 3564 were apparently chosen to be those importedalmost exclusively from the member nations of the EEC." {Inter-national Legal Materials (op. cit)., pp. 1095-1096.)

21. The statutes specifically relied on for authorityin Proclamation N o . 3564 read as follows:

Trade Expansion Act of 1962, Section 252 (c) (19 U.S.C. 1882 (c)):

(c) Whenever a foreign country or instrumentality, the productsof which receive benefits of trade agreement concessions made by theUnited States, maintains unreasonable import restrictions whicheither directly or indirectly substantially burden United States com-merce, the President, may, to the extent that such action is consistentwith the purposes of section 1801 of this title, and having due regardfor the international obligations of the United States.

(1) suspend, withdraw, or prevent the application of benefitsof trade agreement concessions to products of such country orinstrumentality, or

(2) refrain from proclaiming benefits of trade agreement conces-sions to carry out a trade agreement with such country or instrumen-tality.

22. The Court said:With regard to the reliance stated in Proclamation No. 3564 on

Article XXVIII (3) of the GATT, the Customs Court stated:

"As we read paragraph 3 of Article XXVIII of GATT it doesnot require suspension of trade agreement concessions on a mostfavored nation basis. In fact, favored nation treatment is noteven mentioned or implied in paragraph 3. Under paragraph 3a country having a principal supplying interest or a substantialinterest is permitted to withdraw substantially equivalent conces-sions initially negotiated with the applicant contracting party. Weconstrue this language merely to authorize reciprocal action onthe part of contracting parties to GATT with respect to modifi-cation of tariff concessions, following a break down in negotiationsand unilateral withdrawal of concessions by a contracting party."

The last two sentences of the above quote, though correct, arenot pertinent to the question of whether unilateral withdrawal ofconcessions under Article XXVIII (3) must be made on a most-favored-nation basis. We are therefore left with the court's obser-vation that that Article does not specifically mention most-favored-nation treatment, and its conclusions that such treatment is notimplied or otherwise required by that Article.

Appellant contends that Article XXVIII (3) must be read withinthe context of the entire agreement and points to Article I of theGATT, which provides in pertinent part:

"Article I. General Most-Favoured-Nation Treatment

"1 . With respect to customs duties and charges of any kindimposed on or in connection with importation or exportation . . . ,any advantage, favour, privilege or immunity granted by anycontracting party to any product originating in or destined forany other country shall be accorded immediately and uncon-ditionally to the like product originating in or destined for theterritories of all other contracting parties."

Appellant also argues that:

"The very nature of Article XXVIII requires that actionstaken under it be on a most favored nation basis. Such concessionscannot be withdrawn only as to a particular party. If withdrawn,the result is that they are also withdrawn as to all parties, i.e.,those who obtained the concessions on a most favored nationbasis. Any arrangement whereby the particular concessions arecontinued as to all such other parties, but not the parties withwhich they were originally negotiated, is clearly not contemplatedby Article XXVIII. In this case, Spanish brandy benefited fromthe original concession made to France, a member of the EEC,and there is little reason to continue the concession once it hasbeen terminated as to the original contracting party."

Turning to the language of Article XXVIII (3), adverse effects ona plurality of countries from a unilateral withdrawal of concessionswere clearly contemplated in this provision. A compensating mech-


anism is therein provided for three classes of countries which wouldbe adversely affected by a unilateral withdrawal of a concessionon a particular commodity, i.e., the country with which the conces-sion was originally negotiated, a country having a principal supplyinginterest in the commodity, and a country having a substantialinterest in the commodity Article XXVIII (3) is therefore atleast not inconsistent with the most-favored-nation principle....

Reading Article XXVIII (3) in context with the rest of the G ATT,it is clear that conformity with the most-favored-nation principleis required under that Article. One of the primary purposes of theG ATT, recited in its preamble, was the "elimination of discriminatorytreatment in international commerce". To this end, the most-favored-nation principle was embodied in Article I, quoted supra,and in numerous other GATT Articles. The principle has beendescribed as the heart of the GATT. The GATT does contain someexceptions to the principle, but they are few in number and, whenthey do appear in the instrument, they are clearly spelled out. Thereis nothing in Article XXVIII (3) which would indicate that thatArticle was intended to be an exception to the principle.

Moreover, the "negotiative" history of the Article clearly estab-lishes that the negotiators intended to have the most-favored-nationprinciple govern actions under it. One of the major changes made inthe early drafting of the Article was the substitution of the phrase"withdraw the concession" for the phrase "suspend the applicationto the trade of the contracting party taking such action of substan-tially equivalent concessions", the intent being to change the effectof the Article from a discriminatory action to a non-discriminatoryone . . . . Thus should there be any doubt that non-discriminatory(most-favored-nation) action was required by Article XXVIII (3),the negotiative history of the Article would settle that doubt.Nielsen v. Johnson, 279 U.S., 47, 52, 49 S. Ct. 223, 73 L. Ed. 607(1929) and cases cited; W. Bishop, International Law, 171-172(2d ed. 1962).

The question remains whether 19 U.S.C. 1882 (c) allows thePresident to take other than selective or discriminatory action,even when he determines that nondiscriminatory action is requiredby our international obligations. The Customs Court referredto 19 U.S.C. 1881, which provides:

"§ 1881. Most-favored-nation principle.

"Except as otherwise provided in this subchapter, in section 1351of this title, or in section 401 (a) of the Tariff Classification Actof 1962, any duty or other import restriction or duty-free treatmentproclaimed in carrying out any trade agreement under thissubchapter or section 1351 of this title shall apply to productsof all foreign countries, whether imported directly or indirectly."

The court considered that section 1881, when read together withthe language in section 1882 (c) specifying action to be taken withrespect to "products of such country or instrumentality" or "a tradeagreement with such country or instrumentality", created anexception to the most-favored-nation principle in 1882 (c) pro-ceedings. Thus the court did not specifically rule on the provisionsof section 1882 (c) which limit the action the President may take"to the extent that such action is consistent with the purposes ofsection 1801 of this title and having due regard for the internationalobligations of the United States . . . . "

The purposes referred to are listed in 19 U.S.C. 1801 as follows:

"(1) to stimulate the economic growth of the United States andmaintain and enlarge foreign markets for the products of UnitedStates agriculture, industry, mining, and commerce;

"(2) to strengthen economic relations with foreign countriesthrough the development of open and nondiscriminatory tradingin the free world; and

"(3) to prevent Communist economic penetration. [Emphasisadded.]"

Thus the use of section 1882 (c) on a nondiscriminatory or mosl-favored-nation basis would not be inconsistent with the purposesreferred to in that section.

With regard to the apparent conflict between our internationalobligations under the GATT and the statements in section 1882 (c)that action is to be taken against the country or instrumentalitywhich maintains the unreasonable import restrictions, we find thefollowing excerpt from the legislative history of the section mostenlightening:

"Subsections (a) and (b) of section 252 of the bill togetherauthorize action against burdensome foreign import restrictions.They do not, however, authorize action against foreign importrestrictions which, though they may be legally justifiable, imposea substantial burden upon U.S. commerce. The amendmentprovides that whenever a country which has received benefitsunder a trade agreement with the United States maintains un-reasonable import restrictions which burden U.S. commerceeither directly or indirectly, the President may withdraw existingtrade agreement benefits or refrain from proclaiming any nego-tiated trade agreement concessions on such products. Under thissubsection the President may act only to the extent consistentwith the purposes of the act and in exercising this authority hemust take into consideration the international obligations ofthe United States. Thus, the amendment would not authorizeany indiscriminate breach of international obligations of theUnited States such as our most favored nation treaties with regardto the products of other countries... . [Emphasis added.]"The amendment referred to is the Senate amendment to H.R.

11970 which added subsection (c) to section 252 of the TradeExpansion Act of 1962 (19 U.S.C. 1882).

Appellee relies on other legislative history which indicates anintent to provide the President with strong measures to combatforeign trade discrimination. We are of the opinion that the interpret-ation of section 1882 (c) embodied in Proclamation No. 3564 fullycomplies with that intent. Under that interpretation, section 1882 (c)provides for the denial of most-favored-nation treatment where thePresident decides upon that course "having due regard for theinternational obligations of the United States."... The proclamationindicates in the present case that the President did not choose thatcourse because it would have been inconsistent with our internationalobligations. However, the measures taken under the proclamationwere sharply focused on the instrumentality which was maintainingthe unreasonable import restrictions - the EEC. Thus the legislativeintent to take strong measures against those who maintain unreason-able import restrictions was upheld, and at the same time we didnot breach our international obligations.

II. The most-favoured-nation clause in matters relatingto treatment of aliens, including inheritance rights,taxation and cautio judkatum solvi

Sullivan et al. v. KiddUnited States of America: Supreme Court, 3 January 1921

U.S. Reports, vol. 254, p. 433Annual Digest, 1919-1922, Case No. 252

23. A British subject residing in Canada claimed asdevisee a share in the proceeds of Kansas land. Reliancewas placed upon the Treaty of 2 March 1899 betweenGreat Britain and the United States, governing theinheritance of real property within the territories ofeach of the contracting parties by citizens or subjectsof the other, and providing for the sale of such propertyand withdrawal of the proceeds. Citizens or subjectsof each of the contracting parties were assured most-favoured-nation treatment in all that concerned the rightof disposing "of every kind of property". As to theDominion of Canada no notice of accession had been


given. The British Government had interpreted theTreaty as giving British subjects wherever resident theright to inherit property in the United States. Accordingto this interpretation, notice of accession as to Canadawas necessary only to give effect to the Treaty as toCanadian lands. The United States Government, onthe other hand, had interpreted the Treaty as requiringnotice as to Canada in order to bring within its operationeither property in Canada or British subjects residingtherein. The lower Court held the Treaty applicable.On appeal, it was held that the judgement must bereversed. Regarding the most-favoured-nation clause,the Court said:

That clause has been held in the practice of this country to beone not extending rights acquired by treaties containing it becauseof reciprocal benefits expressly conferred in conventions with othernations in exchange for rights or privileges given to this Govern-ment.

Security for Costs (Treaty of Versailles) CaseGermany: Upper District Court, Frankfurt-on-the-Main,

11 December 1922Juristische Wochenschrift,20 1923, p. 191Annual Digest, 1919-1922, Case No. 255

24. This was an appeal by a French plaintiff againstan order to deposit security for costs in an action broughtby him against a German subject. Section 110 of theGerman Code of Civil Procedure laid down that aliensappearing as plaintiffs before German courts must at thedefendant's request deposit a security for costs. Thisprovision did not apply to aliens whose own State didnot demand security for costs from Germans appearingas plaintiffs. A convention concluded at The Hagueon 14 November 1896 between a number of States,including Germany and France, exempted the subjectsof the contracting parties from the duty to depositsecurity for costs. This convention was not includedin the number of those which, according to article 287of the Treaty of Versailles, were to be regarded as revivedbetween the Allied Powers and Germany. In article 291 (1)of that Treaty Germany undertook

to secure to the Allied and Associated Powers, and to the officialsand nationals of the said Powers, the enjoyment of all the rightsand advantages of any kind which she may have granted toAustria, Hungary, Bulgaria or Turkey, or to the officials andnationals of these States by Treaties, conventions or arrangementsconcluded before August 1, 1914, so long as those treaties,conventions or arrangements remain in force.

The second paragraph of that article provided that:"The Allied and Associated Powers reserve the right toaccept or not the enjoyment of these rights andadvantages." There existed between Germany andBulgaria a treaty providing for the exemption, on thebasis of reciprocity, from the duty to deposit securityfor costs. In a note communicated to Germany inApril 1921, the French Government informed theGerman Government that it wished to avail itself ofthe relevant provisions of the Treaty between Germanyand Bulgaria. The plaintiff did not prove that in FranceGerman nationals were exempt from depositing securityfor costs in actions brought against French nationals.

25. The Upper District Court held that the appealmust be dismissed. Article 291 of the Treaty of Versaillesdid not oblige Germany to grant to French nationalswider privileges than those granted to the subjectsof the former Central Power. The Treaty with Bulgariawas based on reciprocity. As France did not grantsuch reciprocal treatment, its nationals were not entitledto an exemption from the duty to deposit security forcosts.

Dobrin v. Mallory S.S. Co. et al.United States of America: District Court, Eastern District

of New York, 2 April 1924Federal Reporter, vol. 298,21 p. 389

26. Thomas Waldron, plaintiff's intestate, was killedon 30 November 1921, while working as a longshoremanon board the steamship Agwidale, which at the time wasdischarging cargo at a pier in the port of Seattle, stateof Washington. At the time of this death, Thomas Waldrondid not leave either a wife, child, or children, but lefta father and mother, alleged to be dependent upon saidThomas Waldron for support, and both of whom, atthe time of the decedent's death and at the time of theappointment of plaintiff as administrator, resided inIreland and not in the United States. The plaintiffclaimed that recovery might be had for the benefitof the parents of the decedent, who were residents ofGreat Britain, because there was in effect at the timeof decedent's death a treaty between the United Statesand Great Britain which contained the "most-favoured-nation" clause, and a treaty of 25 February 1913, havingbeen subsequently made between the United Statesand Italy, under which Italians could recover, the sameright should be accorded to subjects of Great Britain.The Court disagreed with the plaintiff's contention andsaid:

The most favored nation clause, article 5 of the Convention . . . ,relied on by the plaintiff herein, reads as follows:

"In all that concerns the right of disposing of every kind ofproperty, real or personal, citizens or subjects of each of the highcontracting parties shall in the dominions of the other enjoy therights which are or may be accorded to the citizens or subjectsof the most favored nation."

It is therefore clear that the "most favored nation" clause inthat treaty is limited to all that confers the right of disposing ofevery kind of property real and personal and does not refer to anyright to recover for the death of a relative.

In 1908 there was a statute in the state of Pennsylvania similar tothe said statute in the state of Washington, and an Italian waskilled through negligence, leaving dependent relatives resident inItaly. The court held that under the treaty then existing they couldnot recover.

Subsequent thereto a supplemental treaty was negotiated betweenthis country and Italy in 1913,. . . which contained the followingprovisions:

"The citizens' or subjects of each of the high contractingparties shall receive in the states and territories of the other themost constant security and protection for their persons and pro-perty and for their rights, including that form of protection

20 Berlin.

21 United States of America, Federal Reporter, vol. 298 (St. Paul,Minn., West Publishing, 1924).


granted by any state or national law which establishes a civilresponsibility for injuries or for death caused by negligence orfault and gives to relatives or heirs of the injured party a rightof action, which right shall not be restricted on account of thenationality of said relatives or heirs, and shall enjoy in thisrespect the same rights and privileges as are or shall be grantedto nationals provided that they submit themselves to the conditionsimposed on the latter."

This supplemental treaty with Italy did not, under the "mostfavored nation" clause of the treaty of Great Britain with thiscountry, extend to British subjects the rights conferred by saidsupplemental treaty on Italian subjects, because, as we have herein-before shown, this clause in the treaty was limited by its very wordsto the right of disposing of every kind of property, real and personal,and did not include any right that might be given by statute torecover in case of the death of a relative, and therefore the statuteof the state of Washington is not limited or modified by the treatyexisting between this country and Great Britain, and the actionshould be dismissed.

Zaklady Griotte Lud. Wantoch (Prosecutor) v. Gernerand O. Henigsberg (defendants)

Poland: Supreme Court, Third Division, 1 April 1925Orzecznictwo Sadow Polkich, VI, No. 465Annual Digest, 1925-1926, Case No. 293.

27. The prosecutors, a Czechoslovak company, hadregistered trade-marks in Austria in 1912 and in Czechos-lovakia in 1922, but had omitted to register the trade-marks in Poland. It now prosecuted the two defendantsfor infringement of trade-marks. The court at Stanisla-wow discharged the defendants. The prosecuting firmappealed to the Supreme Court, which held: Under theParis Convention of 20 May 1883, citizens of the contract-ing States enjoyed protection for their trade-marks onlyon condition of registering them in the State concerned.The provisions of the Treaty of St. Germain-en-Laye(Art. 274) could have no application to the present case,which arose before that Tretay entered into force inPoland. The position of Czechosovak citizens on Polishterritory could therefore, in this respect, be judged onlyby the municipal law in force in Poland and by the ParisConvention of 1883. Since Polish law did not protectthe trade-marks of Polish citizens before registration ofsuch trade-marks, it was not to be presumed to offerprotection to foreigners before such registration. Itassured to foreigners in this respect only the same pro-tection as to Polish citizens and even the possible grant-ing of the benefits of the most-favoured-nation clausecould not be interpreted as affording to foreigners moreextensive rights than those enjoyed by Polish citizens.

Betsou v. VolzenlogelFrance: Civil Tribunal of the Seine, 23 December 1927Court of Appeal of Paris (First Chamber), 24 December

1928Clunet,22 vol. 55 (1928), p. 999; ibid., vol. 56 (1929),

p. 1269Annual Digest, 1927-1928, Case No. 313

28. The brothers Betsou, Greek subjects, in 1917 leasedcertain premises in Paris for commercial use. The lease

expired in 1926. The lessors refused to renew the lease,whereupon the plaintiffs claimed 200,000 francs asdamages for eviction. Their claim was based on theprovisions of the Law of 30 June 1926, which grantedcertain privileges to those engaged in business activities.In support of their claim to the privileges of this Lawin spite of their foreign nationality, they cited the Franco-Greek Convention of 8 September 1926, and throughthe operation of the most-favoured-nation clause, theFranco-Danish Convention of 9 February 1910, Denmarkbeing in this regard the most-favoured nation. Article 19of the Law of 1926 provided that aliens should be entitledto its privileges only subject to reciprocity.

29. The Civil Tribunal of the Seine held for the plain-tiffs and said that through the operation of the most-favoured-nation clause, Greek subjects in France enjoyedthe same privileges in commerce and industry as Danishsubjects. The Franco-Danish Convention stipulated thatin the exercise of their commercial activities Danesenjoyed all the privileges granted to French nationals bysubsequent legislation. The Law of 30 June 1926 un-doubtedly confers privileges upon those engaged incommerce. Although the terms of article 19 of theConvention required reciprocity in legislation as anabsolute and imperative rule, and although there was nolegislation on commercial property in Denmark, theFrench law should be interpreted in accordance withthe Franco-Danish Convention. Danish subjects couldnot be deprived of their rights and privileges by sub-sequent French legislation. "A convention betweennations, as a contract between private persons, is areciprocal engagement which should be observed byboth parties so long as the treaty is not denounced orreplaced by a new treaty which restricts the effects of theoriginal contract."

30. The Court of Appeal of Paris, reversing the decisionof the Tribunal of the Seine, said that the brothersBetsou could not claim a right to the renewal of theirlease. The law of 1926 clearly showed that it construedthe right of commercial property as un droit civil strictosensu, that is to say, as a right subject to the provisionof article II of the Civil Code which made the enjoymentof rights by foreigners dependent upon the reciprocaltreatment of French subjects abroad. In the Franco-Danish Treaty it had been carefully stated that thenationals of the two States would only enjoy the rightsand privileges stipulated in so far as those rights andprivileges were compatible with the existing legislationof the two States, and Danish legislation did not recog-nize the rights of foreigners to hold commercial propertyin Denmark.

Trossy v. DumortierBelgium: Brussels Civil Court (Chamber of Rent Restric-

tion Appeals), 31 May 1928Belgique judiciaire, 1929,*3 columns 60-61; Clunet, vol. 56

(1929), p. 203Annual Digest, 1927-1928, Case No. 312

31. The special legislation of Belgium regulating theduration of tenancies rendered nationals of countries

22 Journal du droit international (Paris). Referred to hereafteras Clunet.

23 La Belgique judiciaire: Gazette des tribunaux beiges et etrangers(Brussels), 87th year No. 2 (15 January 1929).


which were either neutral or allied to Belgium during theFirst World War eligible to share in its benefits, on con-dition of reciprocal treatment. The claimant complainedthat the privilege of the legal extension of her tenancyhad been denied her because of her French nationalityand of the lack of reciprocal treatment of Belgiannationals in France. The Court held for the claimant.Pursuant to the Franco-Belgian Convention of 6 October1927, the nationals of each of the High ContractingParties "shall enjoy the territory of each other most-favoured-nation treatment in all questions of residenceand establishment, as also in the carrying on of trade,industry and the professions" (article 1). This privilegewas extended to cover the possession, acquisition andleasing of real or personal property (article 2). TheTreaty concluded between Belgium and Italy on 11December 1882 provided (article 3) that the nationalsof each of the High Contracting Parties should enjoywithin each other's territory full civil rights on an equalfooting.

It follows, then, that by virtue of the most-favoured-nation clause,French nationals in Belgium are completely assimilate to Belgiannationals for the purposes of their civil rights, and consequentlyshare in the legislation regulating rents. It is immaterial whetherthese treaties precede or succeed the legislation in question....

The Franco-Belgian Treaty of 6 October, 1927, was concluded bythe Belgian Government in the hope of securing of its nationalsin France the benefit of all legislation affecting tenancies and com-mercial property, in order that the nationals of each country shouldbe treated on an equal footing . . . .

The claimant, as a French national, is therefore entitled to claima legal extension of her tenancy of the premises by virtue of theTreaty of 6 October, 1927.

Valorisation in Germany CaseGermany: Reichsgericht (Supreme Court of the German

Reich), 6 June 1928Annual Digest, 1927-1928, Case No. 230

32. The appellant, an Italian subject, was the assigneeof a Swiss bank, which, in January 1920, deposited withthe defendant, a German bank, two million papermarks for a period of three months, renewable for furtherperiods of three months. The deposit was renewed untilAugust 1923 when it became worthless. According tosection 66 of the German Valorisation Law, these monieswere not subject to valorisation. It was contended onbehalf of the appellant that section 66 could not beapplied to an alien as, according to international law,which by virtue of article 4 of the Constitution formedpart of German law, it was impossible to deny thebenefits of valorisation to an alien. It was also contendedthat that article was contrary to the German-ItalianTreaty of Commerce of 31 October 1925, which pro-vided that the subjects of the contracting parties shall,when in the territory of the other contracting party,have full liberty to acquire and own property to theextent to which such right is enjoyed by the subjects ofany other State. This Article, it was argued, constituteda most-favoured-nation clause, and the appellant claimedthe benefit of the Treaty of Commerce between theUnited States and Germany of 1925, which laid downthat the subjects of the contracting parties should enjoy

the protection of the rules of international law, and thatthey shall not be deprived of their property without dueprocess of law and adequate compensation.

33. The appeal was rejected. The Court said that therewas no rule of international law which gave to aliensthe right to demand repayment of their loans in gold.Section 66 could not therefore be regarded as contraryto international law. The most-favoured-nation clausewas not relevant in that case. Section 66 could not beregarded as constituting expropriation. The plaintiff hadrenewed the deposit from time to time, and he had tobear the consequences of the ensuing depreciation. Hecould not complain if the law, in section 66, refused tohim certain advantages which it conferred upon creditorsin other cases.

Hawaiian Trust Co. v. SmithUnited States of America: Supreme Court of the Territory

of Hawaii, 18 December 1929Annual Digest, 1929-1930, Case No. 251

34. A Canadian citizen died in Hawaii leaving a willwhich gave both real and personal property in Hawaiito non-resident British citizens. The inheritance taxstatute of Hawaii prescribed a higher rate of taxation onproperty passing to aliens, non-residents than on prop-erty passing to residents or citizens. It was contendedthat under the Treaty of 2 March 1899 between GreatBritain and the United States, the inheritance could notbe taxed at a rate higher than that imposed on propertypassing to residents citizens.24 The provisions of thisTreaty had been made applicable to Hawaii. Article Vof the Treaty of 25 November 1850 between Switzerlandand the United States of America contained the follow-ing provision:

The citizens of each one of the contracting parties shall have powerto dispose of their personal property within the jurisdiction of theother, by sale, testament, donation, or in any other manner; andtheir heirs, whether by testament or ab intestato, or their successors,being citizens of the other party, shall succeed to the said property,or inherit it, and they may take possession thereof, either by them-selves of by others acting for them; they may dispose of the sameas they may think proper, paying no other charges than those towhich the inhabitants of the country wherein the said property issituated shall be liable to pay in a similar case. Similar treatieswere in force between the United States and Italy, Brazil and Spainrespectively.

35. The Court held that the inheritance could not betaxed at a rate higher than that imposed on propertyto resident citizens. Since the statute imposed a highertax on property passing to non-resident citizens, as wellas on property passing to non-resident aliens, there wasno denial of equal protection within the meaning ofconstitutional guarantees. Nor was there a discriminationagainst British citizens contrary to the Treaty. TheCourt said:

24 Article V of the Treaty of 2 March 1899 reads as follows:"In all that concerns the right of disposing of every kind of

property, real or personal, citizens or subjects of each of theHigh Contracting Parties shall in dominions of the other enjoythe rights which are or may be accorded to the citizens or subjectsof the most-favoured-nation."


We are unable to conclude that when non-resident Americancitizens are taxed at a certain rate it was intended by the treaty tostipulate that non-resident British citizens should be taxed at alower rate. The expression "in like cases" found in both Article Iand Article II [of the Treaty of 2 March 1899 between Great Britainand the United States] refers to cases that are alike in all their cir-cumstances and not simply in some of them. It refers undoubtedly...to similarity of circumstances with reference to degrees of relation-ship and with reference to the amounts of principal to be taxed, butit refers also to the facts of residence and non-residence when thosefacts are made by the statute a reason or basis for classification anddiscrimination . . . . The language of the most favoured nationclause was certainly intended to have some meaning and someapplication . . . Looking solely to Article II of the treaty withGreat Britain and to Article I, if that applies to real estate in allcases, the provision is merely as above held that a British citizennon-resident in Hawaii shall not be taxed more than an Americancitizen non-resident in Hawaii is taxed . . .

Comptoir Tchecoslovaque and Liebken v. New CallaoGold Mining Co.

France: Commercial Tribunal of the Seine, 4 March 1930Annual Digest, 1929-1930, Case No. 234

36. The defendant, an English company, claimed to beexempt from the rule requiring security for costs (cautiojudicatum sohi) from a plaintiff domiciled abroad. Bythe Anglo-French Commercial Treaty of 28 February1882 British subjects in France were accorded most-favoured-nation treatment. "Interpretative declarations"by the Minister for Foreign Affairs, published in theJournal officiel in July and August 1929, explained thatthe most-favoured-nation clause gave British subjectsthe right to avail themselves of French treaties whichassimilated the status of foreigners to that of Frenchnationals. The Court held that the interpretative declar-ations must be read with and as part of the text of theTreaty, and were binding on the courts. Accordingly,British subjects could avail themselves of the Franco-Swiss Convention of 15 June 1869, which permittedSwiss subjects to sue in France without being requiredto give security for costs.

Lloyds Banks v. de Ricqles and de GaillardFrance: Commercial Tribunal of the Seine, 4 November

1930Clunet, vol. 58 (1931), p. 1018; Sirey, 1931 a s Part II,

p. 97Annual Digest, 1929-1930, Case No. 252

37. Lloyds Bank, on bringing an action against thedefendants, had been called upon to furnish securityfor costs, being a foreign company. The Bank invokedarticle 1 of the Anglo-French Convention of 28 February1882 which gave to the subjects of each contractingparty most-favoured-nation treatment in the territoryof the other. For this purpose, the Bank relied on theprovisions of the Franco-Swiss Treaty of 15 June 1869,which gave Swiss subjects the right to sue in Francewithout being required to give security for costs. TheTribunal held that this contention must be rejected. Itsaid:

25 Recueil general des his et des arrets fonde par J.-B. Sirey, 1931(Paris). Referred to hereafter as Sirey.

Whereas the most-favoured-nation clause does not exempt thenationals of contracting states from furnishing security for costswhere the treaty containing this clause has a particular purpose anddoes not regulate all the [civil rights of the respective nationalsof those States];

Whereas there is no doubt that the Anglo-French Convention of28 February 1882, on which Lloyds Bank Limited relies, is a con-vention with a particular purpose in that it is directed solely to theregulation of commercial and maritime relations between the twocountries;

Whereas the plaintiff cannot cite any diplomatic treaty concludedbetween Great Britain and France which expressly provides forexemption from the provision of security for costs, or which isdirected either to questions of procedure or to civil rights as a wholeand embodies the most-favoured-nation clause in that context;

Whereas Lloyds Bank Limited would further rely, to no purpose,on an interpretation of the Anglo-French Convention of 28 February1882 given in letters exchanged during May 1929 between the Am-bassador of Great Britain in Paris and the Minister for ForeignAffairs and between the Minister and the Garde des sceaux, pub-lished in the Journal officiel of 20 July and 13 August 1929;

Whereas, in fact, the interpretation in question merely showsthat the most-favoured-nation clause in the said Convention of28 February 1882 must extend to the laws governing relationsbetween lessors and lessees in England and France;

Whereas, therefore, this interpretation is limited to a particularpoint of law which is entirely irrelevant to the question of securityfor costs and it cannot therefore be inferred that it also exemptsBritish subjects who bring suit in France from the provision of suchsecurity;

Whereas, furthermore, the interpretation described above presumesthe existence of reciprocity;

Whereas, furthermore, under the terms of article 11 of the CivilCode, an alien enjoys in France the same civil rights as are grantedto French nationals by treaties of the State of which the alien is anational;

Whereas it has been established that French plaintiffs beforeEnglish courts arc not exempt from furnishing security for costsin respect of cases which they submit for their judgement;

Whereas, in consequence, British subjects have no claim to theenjoyment of a corresponding exemption before French courts,the application for security for costs must be upheld;"

Lukich v. The Department of Labor and IndustriesUnited States of America: Supreme Court of Washington,

Department One, 22 January 1934Annual Digest, 1933-1934, Case No. 200

38. This was an appeal from the judgement of aninferior Court declaring void an order of the Departmentof Labor and Industries of the State of Washington on theground that it was in conflict with the "most-favoured-nation" clause of a Convention of Commerce andNavigation between the United States of America andSerbia of 27 December 1882. The respondent, a citizenand resident of Yugoslavia, claimed full workmen'scompensation for the death of her husband in an indus-trial accident in the State of Washington. The appellant,pursuant to a law of the State, had allowed only 50per cent of normal compensation where the beneficiarywas an alien not resident in the United States. The law(Rem. Rev. Stat. § 7684) provided that, "except asotherwise provided by treaty", a non-resident alien wasentitled to only 50 per cent of the normal compensation.


The respondent relied on later treaties concluded by theUnited States with other States under the terms ofwhich the full benefit without diminution would bereceived by nationals of those States occupying theposition of the respondent.

39. The Court held that the judgement appealed frommust be reversed. The "most-favoured-nation" clause inthe instant Treaty of Commerce and Navigation was"limited to such matters as are the subject matter of theparticular treaty in which the clause is contained", andits scope was not enlarged by clauses contained in treatiesof friendship, commerce and consular rights betweenthe United States and other nations which allowed theright of complete compensation. The Court said:

Considering this clause in connection with the immediate contextand the entire treaty now under consideration, we are clearly of theopinion that the treaty refers only to matters of navigation andcommerce, trade and industry, and that the favored-nation clausecannot be held to bring into the field of operations, and entitlerespondent to the benefit of, treaties of a general nature with othernations which manifestly concern matters not within the purviewof the high contracting parties in making the treaty under whichrespondent claims... The treaty manifestly refers to "commerceand navigation". Its scope is limited to matters in connection there-with. True, the word "industry" is used, but in the context it clearlyappears that this word was employed in connection with commerceand not with labor. Under these circumstances, the "most-favored-nation" provision of the treaty, while drawing within its purviewall matters contained in latter treaties germane to the matter ofcommerce and navigation, does not render Rem. Rev. Stat. § 7684,inapplicable to respondent's claim under the workmen's compen-sation act.

D'Oldenbourg v. SerebriakoffFrance: Court of Appeal of Paris, 8 June 1935Gazette des tribunaux, 21-23 July 1935Recueil general... 1935,26 part III, p. 85Annual Digest, 1935-1937, Case No. 221.

40. Alexander Serebriakoff, a Russian subject, broughtan action against d'Oldenbourg, also a Russian subject,alleging the nullity of a will under which she was abeneficiary. D'Oldenbourg applied for security for costs.This was refused by a judgement of the Civil Tribunalof the Seine of 12 November 1931, on the ground thatboth parties were of Russian nationality. On 4 May 1932d'Oldenbourg became a French subject by naturalization.She then obtained an ex parte decision from the Courtof Appeal of Paris ordering Serebriakoff to furnish100,000 francs security. Against this ex parte decisionSerebriakoff appealed, claiming: (1) that d'Oldenbourgwas not entitled to security for costs seeing that whenthe proceedings started she was a Russian subject; (2)that he was exempt from furnishing security by the termsof the Franco-Russian Agreement of 11 January 1934.The Court held that the appeal must be dismissed. TheCourt said:

Whereas it is of little consequence that, at the time when she wassummoned and when she made the application, d'Oldenbourg wasof foreign nationality;

Whereas, in principle, a writ of summons establishes the subject ofthe action, and in particular the merits, but does not establish thestatus of the parties; and whereas, having become a French citizen inthe course of the appeal proceedings, d'Oldenbourg is entitledimmediately to invoke the prerogatives or remedies vested in that>tatus, and consequently to apply for security for costs in the caseat issue;

Whereas the Decree of 23 January 1934 ordering the provisionalapplication of the Trade Agreement concluded on 11 January 1934between France and the USSR . . . is not applicable in the currentcase; and Alexander Serebriakoff is not entitled to claim the benefitof that Agreement; and, while the Agreement does provide, on thebasis of reciprocity, free and unrestricted access by Russian subjectsto French courts, the privilege thus granted to such subjects islimited strictly to merchants and industrialists; and this conclusionresults inevitably from both the Agreement as a whole and fromthe separate consideration of each of its provisions; and the Agree-ment in question is entitled "Trade Agreement"; and the variousarticles of which it is composed confirm that description, and itsarticle 9, on which Serebriakoff specifically relies, in determiningthe beneficiaries of the provisions in question, begins with the words:"Save in so far as may be otherwise provided subsequently, Frenchmerchants and manufacturers, being natural or legal persons underFrench law, shall be not less favourably treated . . . than nationalsof the most-favoured-nation . . . " .

Societe Poulin v. Utilities Improvements Co.

France: Court of Appeal at Amiens, 4 November 1937Gazette du Palais,27 17 December 1937, part INouvelle Revue du droit international prive,i& 4th year,

vol. IV (1937), pp. 761-763Annual Digest, 1935-1937, Case No. 220

41. The Tribunal Civil at Compiegne had rejected theclaim of the appellant, the French Company Poulin thatthe British Utilities Improvements Co., the originalplaintiffs, should be ordered to furnish security for costsin accordance with the relevant article 16 of the CivilCode and 166 of the Code of Civil Procedure. Both thesearticles laid down that the provisions contained thereinmay be modified by treaties between France and othernations. Article 11 of the French Civil Code providesthat aliens shall enjoy in France the same civil rights asare enjoyed by Frenchmen in the country of the alienin question. The Court held that the appeal must beallowed. The Court said:

Whereas it is established that United Kingdom legislation doesnot exempt either French nationals, or indeed in certain casesBritish citizens, from furnishing security for cots; and whereasthe application of article 11 of the Civil Code cannot have the effectof extending the benefit of such exemption to British citizens bring-ing actions in France;

Whereas it is universally recognized that the provisions of ar-ticle 16 of the Civil Code and article 166 of the Code of Civil Pro-cedure may be modified by the clauses of treaties concluded betweenFrance and foreign States; whereas, however, in order for the expressprovisions of the law to be set aside, it is necessary that an agree-ment concluded between the States concerned should so decideexpressly and in unequivocal language;

26 Recueil general piriodique et critique des decisions, conventionset his relatives au droit international public et prive: annee 1935(Paris).

27 Paris .28 Paris.


Whereas relations between France and Great Britain are governedby the Convention of 28 February 1882, which reserved to nationalsof each of the High Contracting Parties the favours, immunities orprivileges which might be conceded by them to nationals of a thirdPower with regard to certain aspects of commerce, industry andshipping; and whereas, in an exchange of letters of 21 and 25 May1929 between the Ambassador of Great Britain and the FrenchMinister for Foreign Affairs, whose provisions, having beenapproved by decree, must be considered as incorporated in theConvention, it was stated that under the most-favoured-nationclause, which is the basis of the said Convention, British citizensmay, subject to reciprocity, be assimilated to French citizens inrespect of the legislation concerning leases both for dwellings andfor commercial or industrial premises;

Whereas it is true that the aforementioned letters base the decisionrelating specifically to leases, which is their sole concern, on twobroader principles which they also state, namely, that the Anglo-French Convention of 28 February 1882 is not restricted to com-mercial and maritime matters but also covers establishment, andthat the most-favoured-nation clause, which is the basis of thatConvention, gives British subjects the right to claim the benefit ofFrench treaties providing for the assimilation of aliens to nationals;

Whereas, however, the clause providing for the assimilation ofaliens to nationals, which is held to be equivalent to the most-favoured-nation clause, is not considered, in the practice of thecourts or even in legislation, as automatically extending to alienswho benefit from it in France the totality of private rights strktosensu; and whereas the act of 30 June 1926, which requires recipro-city of legislation concerning aliens, is interpreted in practice asexcluding from its benefits foreign lessees, who may invoke onlythe most-favoured-nation clause;

Whereas the Convention of 28 February 1882, and the letterswhich extended its application, contain an express provision con-cerning reciprocity; and whereas it is improbable that the HighContracting Parties would have intended, without clearly statingtheir purpose, to impugn the principle set forth in article 11 of theCivil Code by a tacit reference to a category of rights in respect ofwhich reciprocity is impossible;

Whereas, if the instruments mentioned above exempted Britishsubjects from furnishing security for costs in all types of proceed-ings, it would be difficult to understand why a subsequent Conven-tion of 18 January 1934 should have provided for such exemptiononly in the case of actions for registration and exequatur;

Whereas, consequently, the existence of a diplomatic agreementwhich would limit the application of the rules of French law withregard to security for costs cannot be presumed from the generalbut imprecise terms of the letters of 21 and 25 May 1929;

Magnani v. Hartnett

United States of America: Supreme Court of New York,Special Term, Albany County, Supreme Court ofNew York, Appellate Division; 14 December 1938and 11 July 1939

New York Supplement, Second Series, vol. 8, p. 448;vol. 14, p. 107

Annual Digest, 1938-1940, Case No. 123

42. This was a motion for an order directing theCommissioner of Motor Vehicles of the State of NewYork to revoke a chauffeur's licence issued to oneMatthews, a British subject, in accordance with Section20 Vehicle and Traffic Law, which provided that chauf-feurs' licences shall not be issued to aliens, except those

who have made declaration of intention to becomecitizens of the United States. The motion was attackedon the ground that the New York statute was uncons-titutional as being in violation of the Treaty of 3 July 1815between the United States and Great Britain providingfor "a reciprocal liberty of commerce". The SupremeCourt (Special Term) held that the motion must begranted. On appeal, the Supreme Court, AppellateDivision held that the order must be reversed. TheCourt said:

In view of the unqualified prohibition of the statute in questionagainst alien chauffeurs it is quite obvious that it conflicts with theterms of the Treaties of 1794 and 1815 between the United Statesand Great Britain and is therefore unconstitutional and void . . .The language used in the 1794 treaty that "settlers and traders . . .shall continue to enjoy, unmolested, all their property of everykind" is not to receive a narrow construction. The protection intend-ed to be afforded by the quoted words comprehends vastly morethan property ownership. It ensures to a subject of Great Britainthe right to engage in commerce, trade, business, or labor on thesame terms as our own citizens. The promise contained in thecovenant to enjoy property rights carries with it, by necessaryimplication, the right to every incident essential to the full enjoymentof such property. The enjoyment of such benefits surely is not res-tricted, as contended by petitioner, to limited areas, namely, withinthe jurisdiction of posts as that term is used in the treaty. Thiscontention finds no support in the terms of the treaty. It will benoted that Article II which secures the right in question refers to"posts and places within the boundary lines assigned by the treatyof peace to the United States", and then again in speaking of Britishsubjects refers to all those who "reside within the said boundarylines".

The provisions of the Treaty of 1794 are very full and compre-hensive, and were intended to cover not only the conditions andproblems which existed at the time of its signing but also to meetcircumstances and contingencies which were to arise in the future.

It is equally clear that the provisions of the Treaty of 1794 wereintended to embrace all the ordinary occupations and trades.

43. Passing to article I of the Treaty of 1815 whichprovided that "Generally the merchants and traders ofeach nation, respectively, shall enjoy the most completeprotection and security for their commerce", the Courtsaid:

Here again the word "commerce" should be given the broadestmeaning consistent with the purposes and aims sought to be attainedby the treaty. The rules of interpretation invoked in construing thelanguage of the Treaty of 1794 apply with like effect to the provisionsin the later treaty. The broader meaning of the term "commerce"embraces the gainful occupation of driving a motor vehicle for hire.This is particularly true where one intends to operate his motorvehicle under circumstances requiring a licence as a chauffeur.

Under the "most favored nation" doctrine which prevails in ourrelations with Great Britain, these treaties and the nationals there-under are entitled to as free a scope in commercial activity as thenations of China, Japan, and Germany, under later and moreexclusive treaties. The effect of the order is to deny to the subjectsof Great Britain the same freedom in commercial activities whichwe accord to the nationals of China, Japan and Germany. No suchdistinction should be made and none is warranted by the languageof the respective treaties.

The treaties with Great Britain are the supreme law of the landand supersede all local laws inconsistent with their terms . . .


Lesec v. LuykfasseelBelgium: Court of Appeal of Brussels, 1 May 1940

Pasicrisie Beige, 1941, ™ part II, p. 62.Annual Digest, 1919-1942 (Supplementary volume), Case

No. 4

44. A Belgian law of 24 July 1939 prohibited, inter alia,the levying of execution against persons who had beencalled to the colours in accordance with the specialprovision of article 53 of the Law concerning the Militia.According to article 3 of the Law of 24 July 1939, thebenefit of its provisions was to be enjoyed by Belgiancitizens only. The appellant, a French subject, who hadbeen called up for military service by the French Army,was adjudged bankrupt by a judgement of the Tribunalde Commerce of Brussels, dated 7 October 1939. Hecontended that he was entitled to the benefit of theFranco-Belgian Treaty on Residence concluded on 6October 1927, which granted most-favoured-nationtreatment to the national of one party when residingin the territory of the other. The Court held that theappeal must be rejected. The appellant was not entitledto the benefits of the Law of 24 July 1939. The Court said:

This Article 53 [of the law concerning the Militia], like all otherrules of the law concerning the Militia (Royal Decree of February 15,1937) applies only to Belgian citizens. Consequently a Frenchnational cannot invoke the benefit of Article 3 of the Law of July 24,1939. However, the appellant alleges thas this law applies to himin virtue of the Convention concerning Residence concluded bet-ween Belgium and France on October 6, 1927. Article I of thisConvention provides that the nationals of each of the contractingparties shall enjoy in the territory of the other contracting partythe benefit of most-favoured-nation treatment in respect of residenceand establishment as well as in respect of the exercise of commerce,industry or professional activities. The judgement of the court offirst instance . . . admits that Switzerland enjoys the most favourabletreatment and that on June 4, 1887, a Treaty of Establishment wasconcluded between Belgium and Switzerland which provided thatSwiss citizens in Belgium shall enjoy the same rights as Belgians asregards their person and their property. The respondent and thecourt of first instance point out with full justification that theConvention concerning Residence of October 6, 1927, should havebeen approved by both Chambers, but that this was not done.However, Article 68 (2) of the Constitution provides that treatieswhich may affect Belgian nationals individually are only operativeif the assent of both Chambers has been obtained . . .

The Convention concerning Residence of October 6, 1927, incombination with the Swiss-Belgian Treaty concerning Residenceof June 1, 1887, grants in Belgium the same treatment to Belgianand French subjects as regards their sojourn, establishment, exerciseof commerce, industry and professional activities. This concessionin virtue of which French nationals obtain rights which they didnot enjoy before, imposes upon Belgians a wide field of correspond-ing obligations. . . . as a result of this treaty French nationals aregranted the benefit of every measure which may, in the future, beconceded to Belgians in Belgium . . . It follows that the Treaty ofOctober 6, 1927, in consequence of which the exercise and theenjoyment of the rights of Belgian citizens can be modified, requiredthe approval of the two Chambers. This approval was not obtained,neither in the form of a previous delegation nor in the form ofratification... Finally, even if it should have to be admitted thatthe Convention of 1927 applies, either on the ground that it did notrequire the approval of the two Chambers or on the ground that

the Chambers have ratified it implicitly, it would not follow thatthe appellant can invoke the benefit of Article 3 of the Law ofJuly 24, 1939, . . . this provision only grants relief to Belgians whohave been called to the colours . . .

Cie. Internationale des Wagons-Lits v. Societe des HotelsReunis

France: Court of Appeal of Paris, 29 October 1940Gazette du Palais, 7 November 1940Annual Digest, 1919-1942 (Supplementary volume), Case

No. 131

45. Article 2 of the Franco-Belgian Convention of6 October 1927 provided as follows:

The nationals of each of the Contracting Parties shall enjoy, inthe territory of the other, most-favoured-nation treatment in allmatters concerning the possession, occupation and letting of allproperty movable or immovable.

By the terms of the Exchange of Letters which took placefrom 16 to 24 April 1934 the two Governments gave thisprovision an extensive interpretation, from which itresulted that Belgian subjects in France could invokeunrestrictedly the benefit of various French laws of1926-1930 and 1933, concerning letting of houses andbusiness or industrial premises. At the outbreak ofhostilities the French Government promulgated a decreedated 26 September 1939, concerning the reduction ofrents. By article 25 of this Decree, the only foreignersallowed to claim the benefit of this law were the subjectsof protected countries or of territories under Frenchmandate, foreigners serving in French or Allied militaryformations, their issue or their spouses.

46. On the basis of this Law the Belgian Compagnieinternationale des wagons-lits et des grands expresseurope"ens, which occupied premises in Paris belongingto the French Societe des hotels reunis, claimed a re-duction of its annual rent. By a judgement of 16 January1940, the President of the Tribunal Civil de la Seinedismissed the claim, holding that the 1939 Decree didnot apply to the Compagnie internationale des wagons-lits. The Company appealed. The Court held that thejudgement of the Court below must be confirmed:

The Contracting Parties of the Franco-Belgian Agreement of 1927and the interpretative Conventions... of 1934 having neitherforeseen nor provided against a state of war, it is clear that theydid not intend to include among the concessions to Belgian subjectsthe benefits of exceptional measures which the needs of defencepermit a nation at war to reserve solely to its own nationals or to acertain category of foreigners restrictively enumerated.

Application of the Treaty of Commerce between Finlandand Sweden

Finland: Supreme Court of Administration, 24 March1943 30

47. The Finnish-Swedish Commerce Treaty providedthat neither Party should impose duties or other revenuesother than those imposed on its own nationals on thenationals of the other Party. A licence for establishing

29 Pasicrisie beige: Recueil general de la jurisprudence des courset tribimaux en Belgique—annee 1941.



a firm in Finland was granted to a Swedish national by aProvincial Board, which fixed a stamp duty on thelicence. The amount exceeding the stamp duty to becollected from a Finnish national in a similar case wasordered by the Court to be returned to the Swedishnational on the basis of the most-favoured-nation clausecontained in the Finnish-Swedish Commerce Treaty.

In re the Turkish Inspector of StudentsSwitzerland: Zurich Tax Appeals Commission, 12 Sep-

tember 1945

Annual Digest, 1946, Case No. 80

48. A Turkish national, employed by his Governmentas inspector of Turkish students in Switzerland andissued with an official passport, contested his liability totaxation in the Canton of Zurich. Upon his furtherappeal the Court held that the appeal must fail. The factthat the appellant had a diplomatic passport could notalter the circumstance that in Switzerland he was aprivate person. The appellant is unable to rely upon anyconvention for the avoidance of double taxation. Forno such convention has been concluded between Swit-zerland and Turkey. The Double Taxation Treaty of15 July 1931 between Switzerland and Germany couldapply to the appellant—who possessed neither Swiss norGerman nationality—only if there were therein a specialstipulation excluding double taxation of persons inhis position; the most-favoured-nation clause in article I(2) and article 7 of the Treaty of Friendship and Com-merce between Switzerland and Turkey of 13 December1930 excluded the invocation of the Treaty betweenSwitzerland and Germany or any other double taxationtreaty. For double taxation agreements apply solelybetween the parties thereto for the reason that theirexclusive aim the delimitation of the jurisdiction of suchStates in the matter of taxation inter se.

National Provincial Bank v. Dollfus

France: Court of Appeal of Paris, 9 July 1947Sirey, 1948, part II, p. 49Annual Digest, 1947, Case No. 79

49. Dollfus, the respondent, had brought an actionagainst the National Provincial Bank on a contractconcluded in Britain. The Bank pleaded to the jurisdictionof the Court. The Tribunal de Commerce de la Seineheld that it had jurisdiction by virtue of article 14 of theCivil Code, which provided that "aliens who are notresident in France may be summoned before FrenchCourts for obligations contracted abroad towards aFrench national". The National Provincial Bank ap-pealed. It was contended on its behalf that article 14did not apply to British subjects, as these enjoyed most-favoured-nation treatment in France. The Court heldthat the appeal must be allowed. With regard to the firstground of appeal, the Court held that the most-favoured-nation clause applied only to the subject-matter of thetreaty in which it was contained, and that the Franco-British Convention of 1882 did not apply to matters ofjurisdiction and procedure. The Court said:

The Anglo-French Treaty of June 28, 1882, provides that Britishnationals shall enjoy most-favoured-nation treatment in France.The National Provincial Bank invokes that Convention togetherwith the Franco-Belgian Treaty of July 8, 1899. The latter providesthat French subjects in Belgium and Belgian subjects in Franceshall in civil and commercial matters be governed by the same rulesof jurisdiction as nationals. The appellant endeavours to provethat Article 14 of the Civil Code does not apply to British subjectsas a result of these two Conventions; and that the Tribunal deCommerce de la Seine has no jurisdiction in the case. But a most-favoured-nation clause can only be invoked if the subject matterof the treaty containing it is identical with that of the particularlyfavourable treaty the benefit of which is claimed. In the Franco-British Convention of 1882 the most-favoured-nation clause is notmade applicable in any general manner, but only in regard to thespecial matters enumerated therein. That enumeration neitherexpressly nor impliedly includes matters of jurisdiction and pro-cedure. It is true that on May 21 and 29, 1929, further Franco-British agreements were concluded upon which the National Pro-vincial Bank relies. But these new agreements, like the Decree ofJune 16, 1933, as interpreted by the report to the President of theRepublic which accompanied that text, aimed solely at givingBritish subjects in France and French subjects in Great Britain thebenefit of the laws on leases. Their effect was strictly limited to thatobject. As the Franco-British Convention of 1882 did not deal withquestions or jurisdiction and procedure, it cannot permit a Britishsubject, by the application of a most-favoured-nation clause, toclaim the benefit of a Treaty between France and a third countryrelating to these matters.

Verbrigghe v. Bellest

France, Court of Cassation (Chambre Sociale), 11 Julv1947

Dalloz hebdomadaire,31 1947, "Jurisprudence", p. 396Annual Digest, 1947, Case No. 76

50. This was an appeal against a decision of the Com-mission Paritaire d'Arrondissement de Louviers of 19July 1946, which had held that the benefits of the Ordi-nance on farm-leases did not apply in the case of theappellant, a Belgian subject, lessee of a farm in France,who had asked for a renewal of the lease under the termsof that Ordinance. The Commission Paritaire held thataccording to the Ordinance its benefits could only beinvoked by aliens whose children had acquired Frenchnationality. The appellant contended that he was entitledto the benefits of the Ordinance in virtue of article 2 ofthe Franco-Belgian Convention concerning Conditionsof Residence of 6 October 1927, as supplemented by aninterpretative agreement of 16 and 24 April 1934, basedupon an exchange of diplomatic notes. Article 2 of theConvention provided:

The nationals of each of the Contracting Parties shall enjoy most-favoured-nation treatment in the territory of the other as regardsthe possession, acquisition, occupation and leasing of any movableor immovable property.

The Belgian note of 11 April 1934 stated:

Belgian subjects may invoke in France, like French nationalsthemselves, the benefit of all provisions which apply to owners ortenants in respect of both residential buildings and buildings des-tined for commercial, industrial or professional uses.

31 Recueil Dalloz de doctrine, de jurisprudence et de legislation(Paris), year 1947. Referred to hereafter as Dalloz hebdomadaire.


The appellant also invoked the Law of 28 May 1943on the application to aliens of the laws on leases, whichassimilated aliens who were protected by a diplomaticconvention to Frenchmen in that matter, all restrictiveprovisions contained in legislation relating to leasesnotwithstanding. The Court held that the judgement ofthe lower Court must be quashed. The Court said:

Article 61 of the Ordinance of October 17, 1945, as amended bythe law of April 13, 1946, which refuses the benefits of that Ordin-ance to cultivators of foreign nationality if they do not fulfil certainconditions, does not affect aliens who can invoke an internationalConvention exempting them from these conditions. This is done,in relation to farm-leases, by the Franco-Belgian Convention ofOctober 6,1927, as interpreted by the agreement of April 16 and 24,1934, which provided that the nationals of each of the contractingparties should enjoy most-favoured-nation treatment in the territoryof the other, particularly with regard to the leasing of all movableor immovable property, and that Belgian subjects could invoke inFrance the benefit of all provisions relating to leases like Frenchnationals themselves. That position was, moreover, confirmed bythe law of May 28, 1943.

Mandel v. VatanFrance: Tribunal Civil de la Seine, 28 July 1948Gazette du Palais, 1948 (2e sent.), p. 162Annual Digest, 1948, Case No. 1

51. This was an action by one Mandel, a Polish citizen,for the ejectment of the defendant, a French national,from a flat. Mandel had been granted possession ofthe flat by a decision of the same Court of 17 April 1946,in pursuance of an Ordinance of 14 November 1944,which provided that tenants who had been compelledto leave their place of residence as a result of the warshould be entitled to recover possession of it. It was nowcontended on behalf of the defendant that a law of 7 May1946 laid down that aliens should not be entitled to ejectFrench nationals from flats of which they had beengranted possession by judicial decree until they hadfound an adequate place of residence for them. Onbehalf of the plaintiff it was contended that the Franco-Polish Treaty of 1937 entitled him to recover possession,as it granted him most-favoured-nation treatment in thematter of owning and occupying property. The Courtheld that the defendant must be ejected. A municipallaw must be so interpreted as not to conflict with aninternational Convention. The Court said:

A treaty which has been regularly ratified and published is superiorin authority to municipal l aw . . . The Law of May 7, 1946, whichprovides that aliens are not entitled to eject French nationals fromfiats of which they have been granted possession by judicial decreeuntil they have found an adequate place of residence for them,must, accordingly, be considered to exempt from its provisionsaliens who are by treaty exempted from the conditions containedin these provisions. Such is the import of the Franco-Polish Con-vention of May 22, 1937, promulgated by decree of May 31, 1937.Admittedly the contracting parties could not foresee the circumst-ances which gave rise to the Ordinance of November 14, 1944, andthe Law of May 7, 1946. But the Treaty provides that the nationalsof either country shall enjoy in the territory of the other most-favoured-nation treatment in the matter of owning, acquiring andoccupying movable or immovable property... Polish nationalsmust, accordingly, by virtue of the most-favoured-nation clause,enjoy the benefit of such rights. The right of "owning" and "occupy-

ing" property necessarily includes that of recovering possession ofa place of residence from which one has been unlawfully ejected.

Lovera v. RinaldiFrance: Court of Cassation (Plenary Session of all

Divisions), 22 June 1949Dalloz hebdomadaire, 1951, "Jurisprudence'"', p. 770Annual Digest, 1949, Case No. 130

52. The appellant, an Italian national, had, on 23November 1946, submitted a request for the renewal ofhis lease, in reliance on an Ordinance of 17 October 1945.The Court below rejected his request on the ground thatarticle 61 of that Ordinance, as amended by a Law of13 April 1946, excluded aliens from the benefits of itsprovisions. It was now contended on behalf of theappellant that the Franco-Italian Convention of 3 June1930 provided that Italian nationals should enjoy inFrance the same treatment as French nationals, or atleast as the most-favoured aliens. The Court held thatthe appeal must be dismissed. The Franco-Italian Treatylapsed on the outbreak of war between the two countries.The Court said:

Article 61 of the Ordinance of October 17, 1945, does not applyto the case of an alien who can invoke an international Conventionexempting him from its restrictive conditions. However, it is necess-ary that such a Convention should actually be in force. Reciprocalobligations concerning matters of private law assumed in respectof relations in time of peace lapse on the outbreak of war. Thestate of war between Italy and France was incompatible with themaintenance of the obligations which the Convention of 1930imposed on the latter with regard to the establishment of Italiannationals on French territory. The armistice suspending hostilitiesdid not end the state of war. At the date when the appellant putforward his request the Treaty had not again been put into effect.

In re X and Mrs. XFrance: Conseil d'Etat, 3 February 1950Revue critique,32 vol. 40 (1951), p. 635International Law Reports, 1950, Case No. 99

53. French legislation of 1944 and 1945 provided forthe confiscation of profits derived from commercialrelations with the enemy. The petitioners, who wereSwiss nationals, contended that they were not subjectto this legislation, on the ground that they were nationalsof a neutral State and that under a Franco-Swiss Treatyof 1882 they were entitled to "most-favoured-nation"treatment, and thus, by application of a Franco-Spanishand a Franco-British Treaty, to exemption from all warlevies. The contentions of the petitioners were rejected.The Conseil d'Etat said:

Whereas the petitioners contend that, by virtue of the treatyconcluded on 23 February 1882 between France and Switzerlandconcerning the establishment of French nationals in Switzerlandand Swiss nationals in France, article 6 of which provides that:"Any favour which one of the Contracting Parties has granted, ormay grant in future, in whatever form, to another Power, in respectof the establishment of citizens and the exercise of industrial occu-pations shall be applicable in like manner and at the same time to

32 Revue critique de droit international prive (Paris). Referredto hereafter as Revue critique.


the other Party, without it being necessary to conclude a specialagreement to that effect", the exemption provided for the benefit ofSpanish nationals in article 4, paragraph 2, of the Franco-SpanishConsular Convention of 7 Junuary 1862, and for the benefit ofBritish subjects in article 11 of the Anglo-French Conventionof 28 February 1882 in respect of "contributions of war , . . . andother contributions leviable under exceptional circumstances",should be granted to Swiss nationals established in France: Con-sidering that the grounds invoked in that plea would necessitatethe interpretation of the aforementioned international Conventions,a matter on which it is not for the Conseil d'Etat to rule; and that,in the absence of any special agreement between the Governmentsconcerned, the Minister for Foreign Affairs is alone competentin France to determine the meaning and scope of the provisionsin question; and that the interpretation given in the communicationdated 6 November 1947 from the Minister for Foreign Affairs tothe Minister for Finance provides that Swiss nationals cannotavail themselves of the provisions of the said article 6 of the treatyconcerning establishment of 23 February 1882 to claim the exemp-tion provided in favour of Spanish and British nationals andthat, therefore, Mr. and Mrs. X are not justified in invokingthose grounds to contend that the provisions of the Ordinanceof 18 October 1944 and subsequent amendments thereto do notapply to t h e m . . . .

Jones-Dujardin v. Toitmant and Haussy

France: Tribunal Civil of Arras, 2 February 1951

Dalloz hebdomadaire, 1951, "Jurisprudence", p. 360

International Law Reports, 1951, Case No. 135

54. A French Law of 1 September 1948 gave tenantssecurity of tenure. It provided, however, that in certaincircumstances, such as personal need, the owner ofpremises could evict a tenant. The plaintiffs, Britishnationals, were the owners of a house of which thesecond defendant was the tenant. They sought to obtainan order for eviction on the ground that they needed thehouse for their personal use. It was contended on behalfof the defendant that French nationals only were entitledto the exceptional right of evicting a tenant. The Courtheld that the plaintiffs were entitled to recover possessionof the house owned by them. The Court said:

The Anglo-French Convention concerning commercial and mari-time relations, of 28 February 1882, contains a most-favoured-nation clause. An Agreement promulgated by Decree dated 16 June1933, extended the scope of that Convention to leases;... It is notnecessary, in order to enable a British subject to rely on the provisionsof the Law on leases of 1 September 1948 and in particular article 19of that Law, which give special rights to French nationals, thatEnglish law should contain analogous provisions, since the Consti-tution of 1946 affirms the supremacy of treaties over municipal laweven if that law is later in date than the treaty.

Asia Trading Co., Limited v. Bihimex

Netherlands: District Court of Amsterdam, 17 October1951

Netherlandse Jurispridentie [Netherlands Juridical De-cisions] 1952,33 No. 336, pp. 676-677.

International Law Reports, 1951, Case No. 134

55. The Asia Trading Company, of Djakarta, broughtan action in the District Court of Amsterdam against

33 Zwolle, IV.V. Uitgeversmaatschappij W. E. J. Tjeenk Willink.

the firm of Biltimex, of Amsterdam. The defendantapplied for an order that the plaintiff, being a foreigncompany, should deposit cautio judicatum solvi. Theplaintiffs opposed the application.

The Court held that the order for the cautio must berefused. This followed from Article 24, paragraphs 1and 2 of the Netherlands-Indonesian Union Statuteagreed upon on 2 November 1949, which promised thesubjects of each partner to the Union treatment on afooting of substantial equality with the other's ownsubjects, and in any case most-favoured nation treatment.The latter provision guaranteed to Indonesians exemp-tion from the cautio judicatum solvi, because the Nether-lands had previously exempted other foreigners andforeign countries from the cautio under the HagueConvention on Procedure in Civil Cases of 17 July 1905.

Hex v. Hans Beckmann

Norway, Supreme Court, 6 May 1954

International Law Reports, 1954, p. 307

56. The accused had accepted employment as a whaleron board a Dutch whaling ship, which took part in theDutch whaling expedition during the season 1952/53.He was prosecuted for having violated the WhalingLaw of 16 June, 1939, forbidding Norwegian citizens,Norwegian companies and persons domiciled in Norwayto participate in any way in whaling expeditions under aforeign flag. The accused contended that the Law was incontravention of international law and, in particular,of treaties concluded with the Netherlands. Paragraph 5(a) of the Whaling Law provided as follows:

It is forbidden for Norwegian companies, citizens or domiciledpersons directly or indirectly to participate in or co-operate infurthering whaling with floating factories under an alien flag.

The King or whom he authorizes thereto may except from thisprovision foreigners or foreign companies which engaged in whalingin the last antartic whaling season before September 3, 1939, or aforeign whaling factory which before that date was being used forwhaling.

57. His appeal was dismissed. The Court said that itcould not.

hold that the legal situation under article 5 (a) of the Whaling Lawof 16 June 1939 with the supplementary Law of 24 May 1946,contravenes treaties entered into by Norway or principles whichNorway has undertaken in international commitments to respect.This is so as regards treaties entered into both before and afterthe enactment of the Statutes of 1939 and 1946. In particular,the Treaty of Commerce and Navigation entered into with theNetherlands on 20 May 1912 is not incompatible with Norway'sright to introduce a regulation such as that contained in article 5 (a)of the Whaling Law. Neither article 1 of the Treaty which securesreciprocal most-favoured-nation treatment to the respectivecitizens, nor article 3 which guarantees "national treatment" inthe other country, purports to cover such situations as are regulatedby article 5 of the Whaling Law. The defence has particularlystressed that the dispensation in the second paragraph ofarticle 5 (a) is a discrimination against the Netherlands in violationof the most-favoured-nation clause in the Treaty of 1912. Thisargument is without foundation. The provision in question isgeneral in character and puts all countries which did not engagein whaling before 3 September 1939, on the same footing.


Therefore,there is no basis for such a restrictive interpretation of article 5 (a)of the Statute as has here been suggested.

Fiscal Exemption Case in Greece

Greece: Conseil d'Etat. 1954

Revue hellenique de droit international,34 vol. 8 (1955),p. SOI

International Law Reports, 1954, p. 305

58. The Convention concerning Establishment andJudicial Protection concluded between Greece andSwitzerland on 1 December 1927 provides in article 9that

in no case shall the nationals of either of the Contracting Partiesbe subjected on the territory of the other Contracting Party tocharges, customs duties, taxes, dues or contributions of anynature different from or higher than those which are or will beimposed on subjects of the most-favoured-nation.

Article 11, which relates to commercial, industrial,agricultural and financial companies, duly constitutedaccording to the laws of one of the Contracting Partiesand having their siege on its territory, provides that thesaid companies

shall enjoy, in every respect, the benefits accorded by the most-favoured-nation clause to similar companies, and, in particular,they shall not be subjected to any fiscal contribution or charge,of whatever kind and however called, different from or higherthan those which are or will be levied on companies of the most-favoured nation.

The appellants in this case, a Swiss Company whose headoffice was situated in Geneva, claimed exemption fromincome tax, invoking in support of that claim the Anglo-Greek Convention of 1936 for the Reciprocal Exemptionfrom Income Tax on Certain Profits or Gains Arisingfrom an Agency. Under that Convention, the profits orgains arising in Greece to a person resident, or to a bodycorporate whose business is managed and controlled inthe United Kingdom, were exempted from income taxunless they arose from the sale of goods from a stock inGreece or accrued through a branch or management inGreece or through an agency in Greece where the agenthad a general authority to negotiate and concludecontracts. The appellants contended that they had noestablishments of that kind in Greece, seeing that theirrepresentative there did not have the power to enter intocontracts in his own name and for his own account; inconsequence, the conditions required by the Anglo-Greek Convention being fulfilled, the appellant oughtto be exempted from income tax.

59. It was held that the appellant was entitled to fiscalexemption, irrespective of reciprocity. It was said:

Whereas the original jurisdiction, interpreting the Conventionbetween Greece and Switzerland, recognized that the exemptionfrom income tax of Swiss enterprises in Greece was conditional uponthe institution of a corresponding exemption in Switzerland (eitherdirectly, or indirectly through the most-favoured-nation clause, bythe exemption of the enterprises of any third country) in respectof Greek enterprises operating in Switzerland through an agent,

34 Athens.

just as the exemption of British enterprises in Greece is conditionalupon the exemption in Great Britain of Greek enterprises operatingthere. Recognizing that no such exemption exists in Switzerland,proof to that effect having been produced, it categorically rejectedthe corresponding plea of the appeal, having therefore consideredthat the appellant's contention regarding the limited powers of itsrepresentative was irrelevant and should not be examined.

Whereas, in economic treaties in particular, the purpose of themost-favoured-nation clause is to avoid the danger that the subjectsof Contracting States might possibly be placed in an unfavourableposition compared with subjects of other States in the context ofinternational economic competition. Through the operation ofthat clause, each of the two contracting States grants to the otherthe favours which it has already granted to a third State andundertakes to grant it any favour which it may grant to a thirdState in future, for the duration of the treaty. Provided that there isno stipulation to the contrary in the agreement, such latter favoursaccrue ipsojure to the beneficiary of the clause, which does not haveto furnish any additional compensation, even where the concessionsgranted to the third State are not unilateral but are subject toreciprocity. When interpreted in that sense, the clause achieves thepurposes for which it was designed, namely, assimilation in eachof the two States, in respect of the matters to which the clausesrelates, of the subjects or enterprises of the other State to the subjectsor enterprises of a third and favoured country.

Whereas, in the current case, the most-favoured-nation clauseembodied in the Convention between Greece and Switzerland issimply stated without restriction or onerous conditions, and assuch confers upon Swiss enterprises operating in Greece the rightto fiscal exemption under the conditions under which the sameexemption is granted to British enterprises, even if Greek enterprisesdo not enjoy in Switzerland the favour which they enjoy in GreatBritain. Consequently, the impugned decision, having made theexemption of the appellant conditional upon the existence inSwitzerland, as compensation, of a similar regime in favour ofGreek enterprises established there, interpreted the Conventionbetween Greece and Switzerland erroneously and should for thatreason be set aside, in accordance with the second and justifiedplea of the present appeal, and the case should be referred backto the original jurisdiction for consideration of the question whetherthe appellant is eligible to benefit under the Convention betweenGreece and Switzerland, and of the soundness of the contentionin the appeal that the establishment of the appellant in Greeceis not of a kind which under the provisions of the said Convention,precludes fiscal exemption.

Crausaz John case

France: Cour d'appel de Paris, 18 March 1955

Clunet, vol. 82 (1955), p. 669

60. The accused pleaded articles 1 and 3 of the Treatyof establishment of 23 February 1882 whereas Frenchnationals in Switzerland and Swiss nationals in Francemay freely carry on a trade like nationals—and article 6of the same treaty containing, as regards establishment,the most-favoured-nation clause and consequently theFranco-Saarlander Convention of 3 March 1950. In itsjudgement the Court said:

Considering that, although the courts are competent to interpretthe clauses of international agreements concerning private lawrelationships between the parties to proceeding, they are not com-petent, where there is uncertainty, to determine the sense and thescope of such of those clauses which concern public law, the executivepower alone being competent to interpret such clauses.

Considering that the Franco-Swiss Treaty of 23 February 1882establishes the principle of equal treatment, in each of the two


countries concerned, of nationals of the other country, subject toan express obligation for those nationals to comply with the lawsand by-laws; and that this latter clause unquestionably relates topublic law.

Considering that the Legislative Decree of 12 November 1938,together with the Decree of 2 February 1939 and the other textscited in the indictment, are laws and by-laws applicable to alienin the exercise of their profession in French territory and that itis for the French Government to determine whether such texts areapplicable to Swiss nationals enjoying the benefits of the Conventionof 23 February 1882;

Considering, furthemore, that the Treaty of 23 February 1882 isbased on the concept of reciprocity of the favours accorded tonationals of either country and that the matter to be determined iswhether French nationals established in Switzerland are in effectsubject to laws and by-laws in the conduct of their industrial orcommercial activities;

Considering, finally, that the question whether article 6 of theFranco-Swiss Treaty of 26 February 1882 has the effect of obligingthe French authorities automatically to accord Swiss nationalsresident in France the benefits of the provisions in article 8 of theFranco-Saarlander Convention of 3 March 1950, which exemptscitizens of the Saar from certain obligations imposed by the Ordi-nance of 2 November 1945 on aliens in the exercise of variousprofessional activities, is also a matter relating to public law; onthose grounds . . . suspends judgement.

Lloyds Register of Shipping v. Bammeville

France, Tribunal Civil de la Seine, 22 March 1958

Gazette du Palais, 1958, part I, "Jurisprudence", p. 316

International Law Reports 1958-H, p. 599

61. Upon the expiration of a lease of business premisesa tenant was entitled, in accordance with the FrenchDecree of 30 September 1953, to call upon the landlordto renew his lease, or, alternatively, to pay compensationin the event of such renewal being refused. LloydsRegister of Shipping, the plaintiffs herein, who in thepresent action claimed compensation, failing the renewalof their lease, contended that the Law of 28 May 1943,to which article 38 of the Decree referred, provided thatthe benefit of security of tenure, or alternatively theright to payment of compensation, was available tocitizens of countries which granted similar rights toFrench citizens and that the United Kingdom was sucha country because the Anglo-French Treaty of Commerceand Navigation, 1882, contained a most-favoured-nationclause which had been made applicable to the law oflandlord and tenant by a Supplementary Agreement of21 and 26 May 1929.

62. The Court held that the plaintiffs were entitled, byvirtue of the Treaty and the Supplementary Agreement,to claim the benefits of the Decree of 30 September 1953,and were accordingly entitled to compensation. In thepart of its judgement concerning the most-favoured-nation clause, the Court said:

The plaintiffs are assignees of a lease of premises situate at 26 rueCambon, Paris, and owned by the defendants. It was stated in thedeed of assignment of the lease, to which the owners were alsoparties, that Lloyds Register was engaged in the registration ofshipping.

This lease, which expired on April 1, 1955, was tacitly extended,and on June 13, 1955, the plaintiffs asked for its renewal. The

defendants refused to renew the lease, on the ground that the prem-ises in question were only subsidiary premises as far as the tenantswere concerned, and not essential for the conduct of the plaintiffs'business. They further contended that the plaintiffs were an EnglishCompany [and as such] not entitled to claim the benefit of the lawrelating to business premises . . .

On April 7, 1956, the defendants asked for the action to bedismissed on the ground that the plaintiffs were a foreign Company...

So far as concerns the defendant's contention regarding thenationality of the plaintiff Company, this court is of opinion thatby virtue of article 38 of the Decree of September 30, 1953, theprovisions thereof do not apply to foreign traders. On the otherhand, the Law of May 28, 1943, to which article 38 of the Decreerefers, expressly execpts the case of nationals of countries whichgrant to French citizens the benefits of similar legislation, as wellas the case of foreign nationals who are exempt from this requirementof reciprocity by virtue of an international agreement. This appliesto British subjects. The Anglo-French Treaty of Commerce andNavigation of February 28, 1882, contains a most-favoured-nationclause, and the interpretative Agreement of May 21 and 26, 1929,applies this clause in the matter of leases. It follows that in thesecircumstances the plaintiffs are entitled to claim the benefit of theprovisions of the Decree of September 30, 1953.

Cornell case

France: Court of Cassation, July 2, 1958

Gazette du Palais, 1958, part II, p. 217

International Law Reports, "Jurisprudence", 1958-11, p. 490

63. The appellant, an Italian citizen, was convictedunder article 1 of the Decree of 12 November 1938 forhaving failed as an alien, to obtain a trader's permit.He maintained that he was not required to be in possessionof a trader's permit because by virtue of the most-favoured-nation clause contained in the Franco-ItalianAgreement of 17 May 1946 he was entitled to rely on theFranco-Spanish Treaty of 7 January 1862, which gaveSpanish citizens the right to carry on trade in France.The Public Prosecutor contended that the Franco-Spanish Treaty did not exempt Spanish citizens from therequirement of obtaining a trader's permit, and that aletter of the French Minister for Foreign Affairs dated15 April 1957 which stated that foreign nationals entitledto rely on treaties conferring the right to trade in Francewere not exempt from the requirement of obtainingtrader's permits, was binding on the courts. The appealwas dismissed. The Court said:

The judgement under appeal, in view of the letter of the Ministerfor Foreign Affairs dated April 15, 1957, finds that the exercise ofthe right to trade in France which is granted to foreign nationals byinternational agreements does not exempt foreign nationals fromthe need to satisfy the necessary—as well as sufficient—requirement,namely, to be in possession of a traders permit, and that this appliesin particular to Italian nationals by virtue of the Franco-ItalianAgreement of May 17, 1946.

The judgement under appeal thus arrived at a correct decision,without violating any of the provisions referred to in the notice ofappeal.

Notwithstanding that international agreements can only beinterpreted by the Contracting Parties, the interpretation thereof,as far as France is concerned, is within the competence of the FrenchGovernment, which alone is entitled to lay down the meaning and

140 Yearbook of the International Law Commission, 1973, vol. H

scope of a diplomatic document. The Franco-Italian Agreementof May 17, 1946, provides that Italian nationals are entitled to thebenefit of the most-favoured-nation clause, and the Treaty ofJanuary 7, 1862, between France and Spain, on which the appellantrelies and which applies to Italian nationals with regard to theexercise of trading activities must, according to the interpretationgiven by the Minister for Foreign Affairs, be understood as follows:Although the provisions which are applicable to foreign nationalsmust not, if they are not to violate the provisions of the internationalagreements, result in restricting the enjoyment of the rights whichthe Treaty confers on Spanish nationals, the duty imposed upon aSpanish trader to be in possession of a special trader's permit doesnot affect the enjoyment of those rights but only the conditionsof their exercise. To be in possession of a trader's permit is thereforea necessary as well as sufficient condition, which must be satisfiedwhere a foreign national is to be entitled to rights which are grantedto French nationals.

In re Wieboldt's Estate

United States of America: Supreme Court of Wisconsin,5 November 1958

International Law Reports, 1958-11, p. 592

64. The deceased, a resident of Wisconsin, left theresidue of his estate to Theodor Heuss, President of theFederal Republic of Germany. According to the will,this was a gift intended to be used for charitable purposes.The County Court held the bequest to be exempt fromWisconsin inheritance tax. The State appealed. It wasmaintained by counsel for the German Consul General,representing President Heuss, that the legacy was exemptfrom taxation under the national treatment and most-favoured-nation clauses of the Treaty of Friendship,Commerce, and Consular Rights between the UnitedStates and Germany, signed at Washington on 8 De-cember 1923 and the Treaty of Friendship, Commerce,and Navigation between the United States and Germany,signed at Washington on 29 October 1954. The SupremeCourt of Wisconsin reversed the judgement of the CountyCourt and the case was sent back for further proceedings.The most-favoured-nation clause respecting the "nationalsand merchandise" of each Party applied only to com-mercial goods and transactions and did not affectlegacies. Even if the provisions of the Treaty of Friend-ship, Commerce and Navigation between the UnitedStates and Japan, signed at Tokyo on 2 April 1953were to be invoked through the most-favoured-nationclause, the most that could be secured through thatTreaty would be national treatment, which would not,under the law of Wisconsin, exempt the legacy fromtaxation. The provisions of the 1954 Treaty regardingnational treatment and most-favoured-nation treatment,similarly, did not provide any exemption from taxationfor this legacy. Consequently, the legacy was subjectto taxation under the law of Wisconsin. Concerning theTreaty with Germany of 8 December 1923, the Courtsaid:

This Treaty was reinstated, as applicable to the present FederalRepublic of Germany, by Treaty signed June 3, 1953 and effectiveOctober 22, 1954, prior to the testator's death.

The county court based its decision in part on Article IV of the1923 Treaty of which the pertinent provision relating to dispositionof personal property was as follows:

"Nationals of either High Contracting Party may have fullpower to dispose of either personal property of every kind withinthe territories of the other, by testament, donation, or otherwise,and their heirs, legatees and donees, of whatsoever nationality,whether resident or non-resident, shall succeed to such personalproperty, and may take possession thereof, either by themselvesor by others acting for them, and retain or dispose of the same attheir pleasure subject to the payment of such duties or chargesonly as the nationals of the High Contracting Party within whoseterritories such property may be or belong shall be liable to payin like cases. (Italics supplied)".

That provision does not support the claim of exemption . . . .

It is next contended that other provisions of the 1923 Treatyentitled Germany nationals to national treatment and to uncon-ditional most-favoured-nation treatment with respect to inheritancetax exemption; and that since the Treaty was in effect when testatordied on July 1, 1955 it entitled respondent to the benefit of the taxexemption provisions of the Treaty with Japan signed April 2, 1958.

Article I of the 1923 Treaty gave permission to the nationals ofeach Party to enter, travel and reside in the territories of the other, todo various specified things . . . .

. . . these provisions merely give German nationals the right tocarry on specified activities in this country, not including receiptand use of bequests, and while here to be free from taxes other orhigher than those exacted of our nationals.

Article VII of the 1923 Treaty guaranteed most-favoured-nationtreatment with respect to navigation and to imports and exportsand duties thereon. Article VIII was as follows;

"The nationals and merchandise of each High ContractingParty within the territories of the other shall receive the sametreatment as nationals and merchandise of the country withregard to internal taxes, transit duties, charges in respect towarehousing and other facilities and the amount of drawbacks andbounties."

Manifestly those provisions relate only to commercial goodsand transactions and are not sufficient to establish the claimedexemption from inheritance tax.

Respondent contends that certain statement of Secretary of Statein recommending the 1923 Treaty to the President and Senatedisclosed a purpose to give a broad reciprocity which should beextended to such matters as inheritance taxes. A reading of thosedocuments show, however, that the Secretary was concerned withpromoting of international trade. Thus he considered the adoptionof the unconditional favoured nation policy as "the simpler way tomaintain our tariff policy" and thereby to extend our trade abroad,and he referred to "the interest of the trade of the United States incompeting with the trade of other countries" . . . .

65. With regard to the question whether the Treatywith Japan of 2 April 1953 established reciprocity withrespect to exemption from inheritance taxes, the Courtsaid:

Nothing of the kind appears in the Japanese Treaty . . . .

Paragraph 1 in turn provides that nationals of either Party residingor engaged in gainful or philanthropic activities within the territoryof the other Party shall not be subject to the payment of taxes on"income, capital, transactions, activities or any other object...within the territories of such other Party, more burdensome thanthose borne by nationals and companies of such other Party". [Italicsnot in original treaty.]

If this applies to inheritance taxes at all, it appears to mean onlythat the United States shall aim to apply in general the principlethat Japanese nationals not resident nor engaged in business shall


not be subject to payment of inheritance taxes "more burdensomethan those borne by nationals" of the United States. Doubtless anyrestriction thereby placed upon the United States operates uponthe state of Wisconsin.

Assuming for present purposes that by virtue of the Treaty withGermany Dr. Heuss is entitled to as favorable treatment withrespect to inheritance taxation as a national of Japan, and disre-garding the precatory tone of the words "it shall be the aim . . . toapply in general", we may conclude that at most the bequest tohim is exempt by virtue of the Treaties only if it would be exemptwere he a resident of Wisconsin and directed by the will to use themoney in Wisconsin.

Even if such were the case, however, the bequest would not beexempt. Sec. 72.04(1) of the law would apply. That subsectionexempts transfers to individuals residing in this state only where theytake "as trustees, in trust exclusively for . . . charitable . . . purposesin this s t a t e" . . . .

66. Concerning the Treaty with Germany of 29 October1954, the Court said:

Article III provides that nationals of one Party shall be free frommolestation and shaJI receive protection and security in the territoriesof the other Party, and shall be accorded no less favourable treatment"for the protection and security of their persons and their rights"than is accorded nationals of the other Party or of any other country.We cannot construe this Article to include tax exemption.

Article XXV defines "national treatment" and "most-favoured-nation treatment" as used elsewhere in the Treaty.

Article XI relates to taxation. The first four sections are identicalin all material respects with the provisions of Article XI of theJapanese Treaty. . . They are insufficient to establish the right tothe exemption claimed in the present case . . . .

By section 5 of Article XI, each Party to the Treaty reserves theright to "Apply special provisions in allowing, to nonresidents,exemptions of a personal nature in connection with income andinheritances taxes." It is unnecessary to decide what that means,for clearly it does not establish mandatory reciprocity.

It may be observed in conclusion that even if the Treaty in effecton the date of testator's death were to be construed as establishinga rule of reciprocity under which Wisconsin would have to exempta bequest to a German national and resident if Germany wouldexempt a comparable bequest in the reverse situation, respondent'scase for exemption would still be very doubtful. While it appearsthat the Federal Republic of Germany would not tax a transferfrom a testator residing in that country to a person residing in theUnited States made under the condition that it must be used solelyfor charitable purposes, the statement of the German Secretary ofthe Treasury which appears in the record is careful to add "if suchuse is assured". Presumably this means that there must be someassurance enforceable by legal process, that the money will be usedfor the purpose specified by the testator. Therefore the assumedreciprocity would extend only to a case where the charitable use,on which the Wisconsin resident's bequest to a resident of Germanyis conditioned, can be enforced in Germany by some legal means.

The trial court found and it appears to be conceded, that the trustdevice is not available in Germany. The record is barren of anyshowing that any other judicial or administrative process wouldbe available to control the disbursement of the funds by the recipientin that country. We are not prepared to take judicial notice of theGerman laws. In pointing out this feature of the case we do notmean to suggest any doubt that the eminent legatee will properlyuse the bequest for the specified purpose. We have every confidencethat he, and if the occasion arises his successor in office, will disbursethe funds with the most scrupulous fidelity to the wishes of the

testator. Where, however, tax exemption is conditioned on legalassurance that restrictions will be complied with, moral certaintyalone is not enough.

Heaton v. Delco Appliance Division, General Motors Corp.

United States of America: Supreme Court of New York,Appellate Division, Third Department, 2 December1958

International Law Reports, 1958-11, p. 482

67. This was an appeal by a British subject from adecision of the Workmen's Compensation Board whichdirected the payment to him, as an alien, of only one halfof the commuted amount of the compensation to whicha citizen of the United States would be entitled.35 Theappellant maintained that he was entitled to the samerights as a citizen of the United States under article Xof the Treaty of Amity, Commerce, and Navigationbetween the United States and Great Britain (the JayTreaty), signed in London on 19 November 1794, andarticles II and V of the Convention between the UnitedStates and Great Britain relating to the Tenure andDisposition of Real and Personal Property, signed atWashington on 2 March 1899. The Court, which affirmedthe decision of the Workmen's Compensation Board,said:

Considering the terms, conditions and circumstances underwhich Article X became part of the Treaty of 1794 and giving toit the most favorable interpretation, it was never intended by thecontracting parties to include our present day form of compensationbetween employer and employee or anything vaguely similar to itthat might have been in effect at the time of the treaty. Its purposewas, by a Treaty of Amity, Commerce and Navigation, to terminatethe differences without respect to the merits; to produce mutualsatisfaction and understanding; to regulate the commerce andnavigation so as to render the same reciprocal to the benefit andsatisfaction of both nations. Article X referred to the debts ofindividuals of both nations and their protection in the event of awar or national differences. It (Article X) was primarily to preventin the future such unlawful confiscations practiced following theRevolutionary War. The Article was directed to the rights of theindividual as such and ineffective to abrogate Section 17 of theWorkmen's Compensation Law of the State of New York.

We likewise conclude that Articles II and V of the Conventionof 1899 is of no help or solace to the claimant. The wording ofArticle II is clear that it was intended for the purpose of disposingof personal property by testament, donation or otherwise and itcannot inferentially under any favorable interpretaion be construedto have application to the present facts.

There is no language in the Treaty which can be construed tomake claim for death or injuries arising out of the relationship ofemployer and employee. The right to recover without alleging

35 Section 17 of the Workmen's Compensation Law reads inpart as follows:

"Compensation under this chapter to aliens . . . about to becomenonresidents of the United States . . . shall be the same amountas provided for residents, except that dependents in any foreigncountry shall be limited to surviving wife and child or children . . .and except that the board, may at its option, or upon the appli-cation of the insurance carrier, shall, commute as of the dateof death all compensation to be paid to such aliens, by payingor causing to be paid to them one-half of the commuted amountof such compensation as determined by the board. In the caseof a resident alien about to become nonresident the future pay-ments of compensation shall be computed as of the date of non-residence." {International Law Reports, 1958-II, p. 484.)


negligence or fault is given solely and exclusively by the statute ofwhich Section 17 is a part. Even though social legislation such asthis is subject to liberal interpretation, it cannot be so interpretedas to abrogate the wording and intent of the statute.

. . . as to the Treaty of 1794 and the Convention of 1899 there isnothing in the language, taking into consideration the time, cir-cumstances and conditions when they were written and also thepresent day circumstances, that can overcome or abrogate Section 17of the Workmen's Compensation Law of the State of New York.

It has been necessary to document by way of amendment ourown Constitution through the years and many new and moderntreaties have been executed by this Government and other nations.Section 17, referred to herein, has been described as a harsh statutewhich finds very little justification in any principle of fairness.However, the fortuitous circumstances here cannot be overcome byjudicial interpretation. Our duty is done when we enforce the lawas written by the legislative branch of the Government.

Mclane v. N. V. Koninklijke Vleeswarenfabriek B. LinthorstEn Zonen

Netherlands: Court of Appeal of the Hague, 4 February

1959

Nederlandse Jurisprudentie 1960, No. 339

International Law Reports, vol. 28, p. 494

68. The appellant, a United States citizen domiciled inBelgium, owed an acknowledged debt to the respondent.When in the Netherlands, he was imprisoned for his debtunder an order given by the President of the DistrictCourt of Zutphen. The appellant sought to be releasedby the President of the District Court of The Hague, buthis appeal failed. He appealed further to the Court ofAppeal of The Hague, relying, inter alia, on two treatyprovisions by virtue of which, he argued, he should beset free. The first of these was article 24 of the Conventionrelating to Civil Procedure of 17 July 1905.36 The appel-lant argued that the benefit of this article should accrueto nationals of non-signatory States domiciled in theterritory of one of the Contracting Parties as well as tothe nationals of such Parties. The second provision onwhich the appellant relied was article III, section I, of theNetherlands-United States Treaty of Friendship, Com-merce and Navigation of 27 March 1956.37 The appellantsubmitted that he was entitled to benefit from article 24

38 Article 24 reads (as translated from the official French text):"Civil imprisonment, whether as a means of enforcement or

as a simple preventive measure, may not, in civil or commercialproceedings, be imposed on aliens who are nationals of one ofthe contracting States in cases where it would not be imposed onnationals of the country. A circumstance which may be invokedby a national domiciled within the country to secure the endingof civil imprisonment must produce the same effect for the benefitof a national of a contracting State, even if that circumstancearises outside the country".37 This provision reads:

"Nationals of either Party within the territories of the otherParty shall be free from molestations of every kind, and shallreceive the most constant protection and security. They shall beaccorded in like circumstances treatment no less favourablethan that accorded nationals of such other Party for the protectionand security of their persons and their rights. The treatmentaccorded in this respect shall in no case be less favourable thanthat accorded nationals of any third country or that required byinternational Jaw."

of the Hague Convention on Civil Procedure throughthe operation of this most-favoured-nation clause. TheCourt, which held that the appeal must be dismissed,said:

Since the appellant is a citizen of the United States of America andthe United States did not accede to the Convention, it is not opento him to rely upon the protection of Article 24 of that Convention,despite his being domiciled in Belgium, a country that did accede . . .The appellant deems his imprisonment to be illegal on accountof its being contrary to Article III, section I, of the Netherlands-United States Treaty of Friendship, Commerce and Navigation,which was ratified by the (Netherlands) Act of 5 December 1957 . . .This provision, assuming it is binding upon everyone, does notprevent a citizen of the United States from being imprisoned inthis country under Article 768 of the Code of Civil Procedure.Civil imprisonment, indeed, does not run counter to the protectionof rights which the Kingdom of the Netherlands under the Treatyowes to citizens of the United States. Moreover, from Article V ofthe Treaty, as from Article 5 of the annexed protocol of signature,it becomes clear that the Treaty is of limited purport only as faras civil procedure is concerned: civil imprisonment is not referredto, still less precluded. A more liberal interpretation of Article III,section I, as sought by the appellant and under which in this countrya citizen of the United States would enjoy the protection of Article 24of the Convention on Civil Procedure without the United Stateshaving acceded to it, is therefore, unacceptable to the Court.

The Nyugat—Swiss Corporation Societe Anonyme Mari-time et Commerciale v. Kingdom of the Netherlands

Netherlands: Supreme Court, 6 March 1959

Nederlandse Jurisprudentie 1956, No. 141, p. 305; ibid.,1962, No. 2, p. 13.

69. On 13 April 1941, the steamship Nyugat was sailingoutside territorial waters of the former Dutch EastIndies. She sailed under the Hungarian flag. The Nether-lands destroyer Kortenaer stopped her, searched her andtook her into Surabaya, where she was sunk in 1942. Theplaintiffs claimed that the Supreme Court should give adeclaratory judgement to the effect that the Nyugat hadbeen unlawfully stopped, searched, captured, divertedfrom her course, taken into Surabaya and put into use,and that they were entitled to claim compensation forany damage arising from these acts and the loss of theNyugat. They referred to the Tretaty of Friendship,Establishment and Commerce, concluded with Switzer-land at Berne on 19 August 1875 and the Treaty ofCommerce, concluded with Hungary on 9 December 1924.The Supreme Court upheld its first decision and dismissedthe plaintiff's claim. The Supreme Court said:

Shipowners see a direct conflict with the Treaty of Friendship,Establishment and Commerce, concluded with Switzerland atBerne on August 19, 1875, and with the Treaty of Commerce,concluded with Hungary on December 9, 1924. The SupremeCourt said in its first judgment that treaties of this nature dealwith completely different matters. Against this opinion shipownersadvance the argument that application of the regime of the Decreesto the nationals of certain States would amount to discriminationagainst these nationals which would be incompatible with the most-favoured-nation clause * contained in these treaties. In the viewof this Court this discrimination originates in measures that arenot contested by a most-favoured-nation clause. On the occasionof the speeches shipowners further alleged that the most-favoured-

Italics added by Secretariat.


nation clause could undoubtedly be invoked in the present case,since the present situation had been dealt with in certain treatiesof commerce. As an example they quoted the Treaty of May 1,1829,with the Republic of Colombia, providing that "if at any timeunfortunately a rupture of the ties of friendship should take place",the subjects of the one party residing in the territory of the otherparty "will enjoy the privilege of residing there and of continuingtheir business as long as they behave peacefully and do not violatethe laws; their property will not be subject to seizure and attach-ment." The invoking of this provisions fails, since it is unacceptablethat a rupture of friendly relations, as understood in the year 1829,can be assimilated to a severance of diplomatic relations as itoccurred during the second world war; in the present case thedetermination of the flag was also based upon the assumption byHungary of an attitude contrary to the interests of the Kingdomby collaborating in the German attack against Yugoslavia. Thiscase surely does not fit in the provisions of the 1829 treaty. Fromthe preceding it follows that shipowners are wrong in their opinionthat the Court should not apply the Decrees as being contrary tointernational provisions.

Guiseppe et al. v. Cozzani et al.

United States of America: Supreme Court of Mississippi,22 February 1960


70. This was a suit in equity seeking recognition of thealleged rights of the complainants, as tenants in commonwith the defendants, of property passing under the willof Frank Toney, who had left the balance of his estate tohis wife for life and then to his nephews and nieces andsister. Toney's wife died in 1933. The complainants, allof whom were residents of Italy, alleged that they werenephews and nieces or descendants of nephews and niecesof Toney, and descendants of his sister. The defendantsalleged that, under the law of Mississippi, aliens wereprecluded from holding land. The Chancery Court gavejudgement for the defendants, and the complainantsappealed.

71. The Court held that the judgement of the Courtbelow must be reversed and the case remanded. Thestatutory prohibition against the ownership of land byaliens was inconsistent with the Treaty of Commerceand Navigation of 1871 between the United States andItaly, which included a most-favoured-nation clausesecuring to Italian nationals the right to inherit and holdproperty which was recognized by the Treaty of 1782between the United States and the Netherlands. In theevent of a conflict between a statute of a state of theUnited States and a treaty, the latter prevailed. TheCourt said:

There are two pertinent treaties involved in this case: (1) "Treatybetween the United States of America and the Kingdom of Italy,Commerce and Navigation", dated February 26, 1871 ThatTreaty in Article 22 thereof reads as follows: "As for the case ofreal estate, the citizens and subjects of the two contracting partiesshall be treated on the footing of the most-favored-nation". . . .In this connection there should be considered the Treaty of 1782between the United States and the Kingdom of the Netherlands . . . .(2) The "Treaty of friendship, commerce and navigation betweenthe United States of America and the Italian Republic" datedFebruary 2, 1948, provides among other things that: "Property ofnationals . . . of either High Contracting Party shall not be taken . . .without due process of law". Article 5, paragraph 2. . . . See alsoparagraph 2 of Article 7 of the said Treaty in which it is provided

in substance that a non-resident alien shall be allowed a term ofthree years in which to sell or otherwise dispose of property, and thatthis term is to be reasonably prolonged if circumstances render itnecessary . . . Assuming that the Treaty in question was not intendedto have a retroactive effect, then the three-year provision for sellingor otherwise disposing of the property of a non-resident alien wouldhave no effect on the instant case since the rights of the complainants,if any, accrued as owners of vested remainder estates on the deathof Frank Toney in 1906, and their rights to possession of the pro-perty accrued at the death of Emma Toney in 1933 . . .

Kolovrat et al. v. Oregon

United States of America: Supreme Court, 1 May 1961

International Law Reports, vol. 32, p. 203, U.S. Reports,vol. 366, p. 187

72. Two Oregon residents died intestate in 1953,leaving personal property there and no heirs except certainresidents and nationals of Yugoslavia, who would haveinherited the property but for the provisions of OregonRevised Statutes, (Section III.070 (1963)38). The stateof Oregon claimed the right to decedent's property asescheated property and contended that the Yugoslavheirs were ineligible to inherit. The heirs contended thattheir rights to inherit were secured by article 11 of theTreaty between the United States and Serbia of 14October 1881 which was recognized to be in force betweenthe United States and Yugoslavia. The Circuit Courtentered orders denying the State's petitions for escheatand determining the rights of the alien heirs to take theirdistributive shares in the estate. It held that UnitedStates citizens had the right to receive payments fromestates of persons dying in Yugoslavia, and that conse-quently the challenged condition in the statute was met.

73. On appeal, the Supreme Court of Oregon decidedthat the decrees of the Lower Court must be reversed.The Supreme Court of the United States held that theJudgement of the Supreme Court of Oregon must bereversed and the cause remanded for further proceedings.Under the Treaty of 1881, with its most-favoured-nation

38 The Oregon Revised Statutes, Section III.070 (1963) provides:"(1) The right of an alien not residing within the United States

or its territories to take either real or personal property or theproceeds thereof in this state by succession or testamentarydisposition, upon the same terms and conditions as inhabitantsand citizens of the United States, is dependent in each case:

"(a) Upon the existence of a reciprocal right upon the part ofcitizens of the United States to take real and personal propertyand the proceeds thereof upon the same terms and conditionsas inhabitants and citizens of the country of which such alien isan inhabitant or citizen;

"(6) Upon the rights of citizens of the United States to receiveby payment to them within the United States or its territoriesmoney originating from the estates of persons dying within suchforeign country; and

"(c) Upon proof that such foreign heirs, distributees, deviseesor legatees may receive the benefit, use or control of money orproperty from estates of persons dying in this state withoutconfiscation, in whole or in part, by the Governments of suchforeign countries.

"(2) The burden is upon such nonresident alien to establishthe fact of existence of the reciprocal rights set forth in sub-section (1) of this section.

"(3) If such reciprocal rights are not found to exist and ifno heir, devisee or legatee other than such alien is found eligibleto take such property, the property shall be disposed of as eschea-ted property."


clause, non-resident heirs had the same right to inherit asthey would have had if they were United States citizensliving in Oregon. The assent of the United States to theArticles of Agreement of IMF, with which the Yugoslavexchange controls were consistent, prevented a Statefrom deciding that such controls could be the basis fordefeating rights conferred by the Treaty of 1881. TheCourt said:

The very restrictive meaning given the Treaty by the OregonSupreme Court is based chiefly on its interpretation of this language:"In all that concerns the right of acquiring, possessing or disposingof every kind of property . . . citizens of the United States in Serbiaand Serbian subjects in the United States, shall enjoy the rightswhich the respective laws grant . . . in each of these States to thesubjects of the most favoured nation." This, the State SupremeCourt held, means that the Treaty confers a right upon a UnitedStates citizen to acquire or inherit property in Serbia only if he is"in Serbia" and upon a Yugoslavian citizen to acquire property inthe United States only if he is "in the United States". The StateCourt's conclusion, therefore, was that the Yugoslavian complai-nants, not being residents of the United States, had no right underthe Treaty to inherit from their relatives who died leaving propertyin Oregon. This is one plausible meaning of the quoted language,but it could just as plausibly mean that "in Serbia" all citizens ofthe United States shall enjoy inheritance rights and "in the UnitedStates" all Serbian subjects shall enjoy inheritance rights, and thisinterpretation would not restrict almost to the vanishing point theAmerican and Yugoslavian nationals who would be benefited bythe clause. We cannot accept the State Court's more restrictiveinterpretation when we view the Treaty in the light of its entirelanguage and history. This Court has many times set its face againsttreaty interpretations that unduly restrict rights a treaty is adoptedto protect.

The 1881 Treaty clearly declares its basic purpose to bring about"reciprocally full and entire liberty of commerce and navigation"between the two signatory nations so that their citizens "shall be atliberty to establish themselves freely in each other's territory".Their citizens are also to be free to receive, hold and dispose ofproperty by trading, donation, marriage, inheritance or any othermanner "under the same conditions as the subjects of the mostfavoured nation". Thus, both paragraphs of Art. II of the Treatywhich have pertinence here contain a "most favoured nation"clause with regard to "acquiring, possessing or disposing of everykind of property". This clause means that each signatory grants tothe other the broadest rights and privileges which it accords to anyother nation in other treaties it has made or will make. In thisconnexion we are pointed to a Treaty of this country made withArgentina before the 1881 Treaty with Serbia, and Treaties of Yugo-slavia with Poland and Czechoslovakia, all of which unambigu-ously provide for the broadest kind of reciprocal rights of inheritancefor nationals of the signatories which would precisely protect theright of these Yugoslavian claimants to inherit property of theirAmerican relatives . . .

We hold that under the 1881 Treaty, with its "most favourednation" clause, these Yugoslavian claimants have the same right toinherit their relatives' personal property as they would if they wereAmerican citizens living in Oregon; but, because of the groundsgiven for the Oregon Supreme Court's holding, we shall brieflyconsider whether this treaty right has in any way been abrogated orimpaired by the monetary foreign exchange laws of Yugoslavia.

Oregon law, its Supreme Court held, forbids inheritance of Oregonproperty by an alien living in a foreign country unless there clearlyexists "as a matter of law and unqualified and enforceable right"for an American to receive payment in the United States of theproceeds of an inheritance of property in that foreign country.The State Court held that the Yugoslavian foreign exchange lawsin effect in 1953 left so much discretion in Yugoslavian authoritiesthat it was possible for them to issue exchange regulations which

might impair payment of legacies or inheritances abroad and forthis reason Americans did not have the kind of "unqualified andenforceable right" to receive Yugoslavian inheritance funds in theUnited States which would justify permitting Yugoslavians suchas petitioners to receive inheritances of Oregon property underOregon law. Petitioners and the United States urge that no suchdoubt or uncertainty is created by the Yugoslavian law, but contendthat even so this Oregon state policy must give way to superveningUnited States-Yugoslavian arrangements. We agree with peti-tioners' latter contention.

The International Monetary Fund (Bretton Woods) Agree-ment . . . to which Yugoslavia and the United States are signatories,comprehensively obligates participating countries to maintain onlysuch monetary controls as are consistent with the terms of thatAgreement. The Agreement's broad purpose, as shown by Art. IV,para. 4, is:

"to promote exchange stability, to maintain orderly exchangearrangements with other members, and to avoid competitiveexchange alterations." 39

Article VI, para. 3, forbids any participating country from exercis-ing controls over international capital movements "in a mannerwhich will restrict payments for current transactions or which willunduly delay transfers of funds in settlement of commitments . . . " 40

Article 8 of the Yugoslavian laws regulating payment transactionswith other countries expressly recognizes the authority of "the pro-visions of agreements with foreign countries which are concernedwith payments". In addition to all of this, an Agreement of 1948between (the United States) and Yugoslavia obligated Yugoslavia,in the words of the Senate Report on the Agreement,

"to continue to grant most-favoured-nation treatment toAmericans in ownership and acquisition of assets in Yugosla-v i a . . . [and] Yugoslavia is required, by Article 10, to authorizepersons in Yugoslavia to pay debts to United States nationals,firms, or agencies, and, so far as feasible, to permit dollar transfersfor such purpose."

These treaties and agreements show that this Nation has adoptedprogrammes deemed desirable in bringing about, so far as can bedone, stability and uniformity in the difficult field of world monetarycontrols and exchange. These arrangements have not purported toachieve a sufficiently rigid valuation of moneys to guarantee thatforeign exchange payments will at all times, at all places and underall circumstances be based on a "definitely ascertainable" valuationmeasured by the diverse currencies of the world. Doubtless theseagreements may fall short of that goal. But our National Govern-ment's power has been exercised so far as deemed desirable andfeasible toward that end, and the power to make policy with regardto such matters is a national one from the compulsion of bothnecessity and our Constitution. After the proper governmentalagencies have selected the policy of foreign exchange for the countryas a whole, Oregon of course cannot refuse to give foreign nationalstheir treaty rights, because of fear that valid international agree-ments might possibly not work completely to the satisfaction ofstate authorities. Our National Government's assent to theseinternational agreements, coupled with its continuing adherence tothe 1881 Treaty, precludes any State from deciding that Yugoslavianlaws meeting the standards of those agreements can be the basisfor defeating rights conferred by the 1881 Treaty.

Semon v. RoncalloFrance, Cow d'appel de Paris, 6 July 1961Clunet, vol. 89 (1962), p. 420

74. It follows from the Franco-Colombian Establish-ment Convention of 16 March 1955 that the nationals

39 I M F , Articles of Agreement of the International MonetaryFund (Washington, D.C.), p . 7, article IV, section 4 (a).

40 Ibid., p . 17, article VI, section 3.


of both States enjoy most-favoured-nation treatment inthe exercise of civil rights, and in particular the right toacquire and possess movable and immovable property.It also follows that there is assimilation to nationals inrespect of the leasing of residential accommodation.The Court of Appeal of Paris inferred from this that aColombian could exercise the right to a premium underart. 19 of the Act of 1 September 1948 without beingdefeated by the objection that he did not reside in France.In fact, "no provision of the enactment above mentionedimposes on Colombian nationals the obligation to residein France in order to exercise their rights".

Doulgeris v. BambacusUnited States of America: Supreme Court of Appeals of

Virginia, 31 August 1962International Law Reports, vol. 33, p. 408

75. In a proceeding by an administrator to determinethe distributees of a decedent's estate, the plaintiff, aGreek national, contended that she was the sister byadoption of the deceased having adopted under the lawof Greece as the daughter of the decedent's father. Thelower Court found that the policy of the adoption lawsof Greece was contrary to the public policy of Virginia,and that the plaintiff was therefore not entitled to thestatus of adopted sister of the decedent and the rightunder Virginia laws to share in his estate as such. Theplaintiff contended, inter alia, that the finding of thelower Court failed to recognize and give effect to theTreaty of Friendship, Commerce, and Navigation withGreece of 3 August 1951.

76. On appeal, the decree of the lower Court wasaffirmed. The Court stated that such refusal to recognizethe plaintiff's status as adopted sister did not contravenethe terms of a most-favoured-nation clause in the treaty.

There is no substance to the appellant's claim that the refusal ofthe lower Court to give her the status of an adopted child withinthe meaning of our statutes violates the rights guaranteed to herunder the existing Treaty between the United States of Americaand the Kingdom of Greece . . . The decree does not deny the rightof inheritance to the appellant under the laws of Virginia. Whatit denies to her is the right to inherit by virtue of her status as analleged adoptive relative of the decedent—a status which has beenfixed in a proceeding the purpose and object of which are contraryto the public policy of this State. In refusing to recognize a statusthus fixed, the courts of Virginia treat alike the proceedings of allother States and foreign countries. We refuse to recognize theproceedings of any State or foreign country which offend our publicpolicy... What the appellant asks here is that we afford to herbetter treatment than we afford to the citizens of other states ornations, that we recognize her status as an adoptive relative of thedecedent although it had been fixed in a proceeding whose purposeand object are repugnant to our laws. The Treaty upon which sherelies guarantees to the nationals of Greece no such preferredright.

In re: Sciama and SoussanFrance: Tribunal correctionnel de la Seine, 27 November

1962Clunet, vol. 90 (1963), No. l,p. 762-763

11. The Franco-Italian Convention of 23 August 1951provides that the nationals of both countries shall enjoy

most-favoured-nation treatment in the exercise of trade.In this case the Tribunal correctionnel de la Seine said:

Whereas Sciama, being of Italian nationality, may legitimatelyclaim the benefit of article 2 of the Treaty of Establishment of23 August 1951 between France and Italy, which provides: "Thenationals of each of the High Contracting Parties shall enjoy inthe territory of the other party most-favoured-nation treatmentwith regard to . . . the practice of trade . . . " , and whereas, conse-quently, he is entitled to rely on the provisions of article 1 of theConvention concluded on 7 January 1862 between France andSpain, which provides that: "The subjects of both countries maytravel and reside in the respective territories on the same footing asnationals . . . practise both wholesale and retail trade operations . . . "

Christian Dior v. JacksonFrance: Tribunal de grande instance de la Seine, 17

January 1963Clunet, vol. 90 (1963), No. l,p. 1068

78. A husband was requested to pay for clothes whichhis wife had ordered from a fashion designer. Domiciledin Switzerland, and of British nationality, he raised theobjection of incompetence against the action broughtby the French fashion designer as plaintiff. He maintainedin the first place that the latter was not entitled to relyon article 14 of the Civil Code relating to the obligationscontracted by a foreigner in France towards a Frenchcitizen on the ground that he expressly denied havingcontracted personally with the plaintiff company. Hefurther relied on the Franco-British Convention of 28February 1882, and, without disregarding the fact thatthis Convention, on commercial and maritime relations"was not of general effect and did not allow Britishsubjects to rely on the most-favoured-nation clause",he maintained that the exchange of letters of interpret-ation of 21 and 25 May 1929 had extended the scopeof application of the Convention to establishment, sothat the most-favoured-nation clause would entitleBritish subjects to rely on treaties stipulating the assimi-lation of foreigners to nationals, and thereby on thebenefit of Conventions on procedure excluding theapplication of articles 14 and 15, thus obliging the Frenchplaintiff to sue the foreign subject before the court of hisplace of domicile. The Tribunal pointed out that theexchange of letters referred to granted most-favoured-nation treatment to British subjects in the matter ofleases only and applied solely to British subjects settledin France. The Tribunal said:

Whereas the most-favoured-nation clause, which is entirelyappropriate in the context of an economic regime, is much lessrelevant to matters of procedure and should not be applicable toprocedure unless the terms of the treaty declare in sufficientlyexplicit terms that it is so applicable;

Whereas the agreements of 1929 had a specific object; andwhereas they are the consequence of the restrictive effect attributedto the basic Convention of 1882, whereby British subjects havealways been held liable for the deposit of security for costs and asineligible to benefit from the provisions of the Act on Leases of1 April 1926;

Whereas the purpose of the agreements of 1929 is thus madeclear; and whereas their sole purpose is to ensure for British subjectsand, reciprocally, for aliens of French nationality in the UnitedKingdom, the benefit of the Act on Leases;


Whereas, in fact, in the body of the letter of 21 May 1929, fromthe Ambassador of Great Britain in Paris addressed to the FrenchMinister for Foreign Affairs, it is stated that negotiations wereconducted between the High Contracting Parties with regard to thelegislation on leases and not on the occasion of its enactment;

Whereas, furthermore, the Decree of 16 June 1935 specifies thatit relates to commercial and maritime relations within the sphereof application of the Act on Leases;

Whereas, moreover, according to the commentary which precedesthat Decree, the letters of 21 and 25 May 1929 recognize that themost-favoured-nation clause embodied in the Convention of 1882assures to nationals of both countries the benefit of legislation onleases;

Whereas the specific nature of this purpose would preclude theextension of the agreements to another purpose, the principle of therestrictive interpretation of the diplomatic agreements in questionbeing established;

Whereas, moreover, J., a British national domiciled in Switzer-land, may not rely on a treaty of establishment which grants thebenefit of the most-favoured-nation clause only to British nationalsestablished in France and therefore entitled to carry on a remuner-ative activity there on a permanent basis;

Societe technique de limonaderie v. EHas Ilya

France: Cour de cassation, 8 March 1963

Bulletin des arrets.. .4 1 (1963), IV, No. 234, p. 190

79. Under the terms of the Act of 28 May 1943, theordinary or exceptional laws concerning leases are appli-cable to aliens who are nationals of countries whichhave concluded with France diplomatic agreementsproviding, directly or indirectly, for the assimilation ofaliens to nationals in respect of civil rights. It was there-fore with good reason that, in the application of suchlegislative provisions and of the Franco-Egyptian Treatyof Montreux of 8 May 1937, rendered enforceable by theDecree of 17 March 1939, a court of appeal granted theright to recover possession to a landlord who was anEgyptian national. The Court said:

Whereas the appeal is grounded in a complaint that the impugneddecision by the Court of Appeal of Dakar allowed a landlord ofEgyptian nationality to exercise the right to recover possessionprescribed in article 21 of the Decree of 30 June 1952, even thoughthat right is reserved to landlords of French nationality, on theground that the diplomatic agreements existing between Franceand Egypt entitled Egyptian nationals to the rights accruing fromthe legislation on leases, although neither the agreement concludedbetween France and Egypt nor the most-favoured-nation clausewere directed to the legislation on leases and could not entitle, aforeign national to exceptional rights which the authors of thoseagreements could not have taken into consideration;

Whereas, however, under the terms of the Act of 28 May 1943,the ordinary or exceptional laws concerning leases are applicableto aliens who are nationals of countries which have concluded withFrance diplomatic agreements providing, directly or indirectly, forthe assimilation of aliens to nationals in respect of civil rights;

Whereas the Franco-Egyptian Treaty of Montreux, concludedon 8 May 1937 and approved by the French Parliament on 4 Janu-ary 1939, was promulgated by the Decree of 17 March publishedin the Journal officiel of 29 March 1939, and whereas the Decreeof 17 March reproduces and renders enforceable the provisions oftwo letters exchanged on 8 May 1937 between the heads of theFrench and Egyptian delegations, which provided that:

"nationals of each of the two countries shall exercise in the nationalterritory, in conformity with national laws and regulations, theright to acquire all kinds of movable and immovable property,whether by purchase, exchange, gift, succession, devise or in anyother manner, and freely to dispose thereof... in the exercise of therights defined above, they shall moreover enjoy most-favoured-nation treatment"; and whereas it follows therefrom that the Courtof Appeal of Dakar had good reason to confirm the notice to quitserved on 27 February 1956 and to grant the right to recover posses-sion prescribed in article 21 of the Decree of 30 June 1952 to EliasIlya, a landlord of Egyptian nationality, pursuant to both the pro-visions of the law and the diplomatic agreements specified above;and whereas there are thus no grounds for the appeal;

For these reasons:Rejects the appeal lodged against the decision issued on 22 Feb-

ruary 1957 by the Court of Appeal of Dakar.

Consul General of Yugoslavia at Pittsburgh v. Pennsylvania

United States of America: Supreme Court, 6 January 1964

U.S. Reports, vol. 375, p. 395


80. Belemecich died intestate in Pennsylvania. His heirswere residents of Yugoslavia. The estate was ordered bythe Orphan's Court to be held by the Department ofRevenue of Pennsylvania. The Consul General ofYugoslavia appeared at the hearing in the Orphan'sCourt. He contended that the beneficiaries would havefull control of the property distributed. He also arguedthat the matter was governed by article II of the Treatyof Commerce with Serbia of 2 October 1881. Therefore,the Court could not invoke state law to prevent the heirsfrom receiving their inheritance. On appeal, the SupremeCourt of Pennsylvania, in affirming the decision of theOrphan's Court, said:

. . . The appellant argues also that the order of the Court belowoffends against the Treaty of 1887 between the United States andSerbia (the predecessor sovereign nation of the Republic of Yugo-slavia). The point is not well taken. That Treaty provides brieflythat there shall be reciprocal rights of inheritance between the citi-zens of the two nations. Under the decision in this case, there is nodenying to the citizens of Yugoslavia the right of inheritance throughAmerican relatives. The Act of the Legislature, upon which theCourt based its adjudication, is intended, not to breach the sanctityof the treaty mentioned but to guarantee that its provisions areupheld so that the beneficiaries will actually and not only techni-cally or figuratively receive the amounts due them . . . Nor doesthe case of Kolovrat et al. v. Oregon [42] cited by the appellant, helphis position. The Oregon statute involved in that litigation was aconfiscatory one. The one before us is merely custodial...

81. The Supreme Court of the United States held percuriam that the decision of the Supreme Court ofPennsylvania must be reversed.

Corbett v. Stergios

United States of America: Supreme Court of Iowa,11 February 1964


82. Nicolas Stergios, a Greek immigrant resident inIowa, made a will leaving most of his property to his

41 Bulletin des arrets de la Cour de cassation en matiere civile(Paris). Referred to hereafter as Bulletin des arrets... 42 See paras. 72-73 above.


wife and the balance to a niece. After executing the will,he adopted through Greek officials and under Greekprocedures a Greek child, Constantine Neonakis, wholived in Greece. Stergios died in 1958, several monthsafter the adoption, leaving an estate consisting principallyof real estate. His will was proved. The estate was closedand the property was distributed in accordance with thewill. In February 1961, Corbett was appointed guardianof the property of Neonakis. He brought an action toreopen the estate and to recover two thirds of the estatefrom the widow, contending that Neonakis was the heirof Stergios with a right to inherit because the will wasmade before the adoption. Corbett argued that thechild's right to inherit was secured by article IX, section 2,of the Treaty of Friendship, Commerce and Navigationbetween the United States and Greece of 3 August 1951.The widow contended that the Treaty did not secure theright of Neonakis to inherit and that under State lawNeonakis was not eligible to inherit because it had notbeen shown that Greece gave reciprocal rights to UnitedStates citizens as required under Iowa Code 567.8 (1962).The Trial Court dismissed the petition of the guardianto reopen the estate. On appeal, the Supreme Court ofIowa affirmed this decision. Petitioner had failed toprove the reciprocity required under Iowa law andtherefore Neonakis could not inherit. The Treaty did notby its terms displace State law relating to inheritancerights, either through its national treatment or most-favoured-nation clauses.

In connexion with the most-favoured-nation clause,the Supreme Court of Iowa said:

Under brief point 3 appellant contends his ward is entitled tosome type of benefits by reason of the most-favoured-nation clausein the Treaty. A peculiar situation pertains to the Treaty as to most-favoured-nation treatment.

The Treaty with Greece provides for most-favoured-nationstreatment in regard to only certain subjects in the Treaty. Amongthe 26 articles of the Treaty providing for most-favoured-nationstreatment are only articles II, VI, VII, XII, XVII, XIX and XXIand XXIV.

There is no such most-favoured-nations provision in article IXof the Friendship Treaty with Greece. This is the article whichplaintiff-appellant attempts to apply in seeking relief from theCourt. The other articles specifically spell out when the most-favoured-nations provision is to apply. Since article IX containsno such provision, we can only assume that Congress did not intendto apply the most-favoured-nations provision to this article.

The German Treaty in article XI specifically refers to the most-favoured-nations treatment in disposing of property. This U> differ-ent [from] the Greek Treaty which does not mention such treatment.

Since the Treaties were enacted at approximately the same time,we can only assume that Congress intended that as far as the GreekTreaty is concerned the most-favoured-nations treatment wouldnot apply to article IX.

We have here a different situation [from] the case of Santo-vincenzo v. Egan, 284 U.S. 30 [ " ] . . . cited in plaintiff-appellant'sbrief. There the Treaty specifically contained a most-favoured-nations treaty provision with regard to the subject under consider-ation. This is different [from] the Greek Treaty as far as article IXis concerned. It would be wrong to apply the most-favoured-nations treaty clause to the pertinent article of the Greek Treaty

when it contained no such provision. This would give it an appli-cation broader than intended.

NOTE: On appeal, the Supreme Court of the UnitedStates reversed the judgement of the Supreme Court ofIowa. The Court said:

In light of our construction of the Treaty of Friendship, Commerceand Navigation between the United States and the Kingdom ofGreece, a construction confirmed by representations of the signa-tories whose views were not available to the Supreme Court ofIowa, the judgement is reversed. {Corbett v. Stergios, 381 U.S. 124)

Yacoub v. Jean Francis partnersFrance: Cour de cassation, 24 June 1965Bulletin des a r re t s . . . , 1965, III, No. 398, p. 365

83. Having regard to the principle ejusdem generis, theDecree of 25 April 1935 extending to Syrian and Lebanesenationals the benefit of the most-favoured-nation clause,not having been rendered applicable in Guadeloupe,cannot be relied upon by a Lebanese merchant installedin that Territory to claim the renewal of his commerciallease. The Court said:

Whereas the effect of the impugned confirmative decision (Basse-Terre, 2 February 1959) was that Yacoub, a Lebanese national,having received notice on 26 March 1956 to quit the commercialpremises situated at Pointe-a-Pitre (Guadeloupe) which had beenleased to him by the Jean Francis partners, was held to have noright to renewal of his lease by reason of his nationality, pursuantto article 38 of the Decree of 30 September 1953;

Whereas an appeal against that decision has been filed statingthat it denied a Lebanese national the right to renew his commerciallease on the ground that the most-favoured-nation clause envisagedby the Decree of 25 April 1935 issued in favour of Syrian and Leba-nese nationals was limited strictly to certain specific matters,notably the actual practice of trade, even though, on the one hand,in protecting the establishment, residence and practice of trade bysuch nationals, the Government, according to the contentions ofthe appeal, necessarily intended to protect the instrument by whichcommercial operations are carried on, namely, the business itself,and on the other hand, by directing the provisions also to possessionand occupation of all movable and immovable property, the authorsof the said Decree intended to extend its scope to the commercialpremises, and the right to lease, to which the right of renewalrelates;

Whereas, however, having regard to the principle ejusdemgeneris, the Decree of 25 April 1935, which was not rendered appli-cable in Guadeloupe, could not be invoked by Yacoub to claimthe renewal of his lease; and whereas therefore the appeal is notjustified;

For these reasons:

Rejects the appeal against the decision given on 2 February 1959by the Court of Appeal of Basse-Terre.

Application of the Treaty of Commerce and Navigationbetween Finland and Denmark

Finland: Supreme Court of Administration, 19 October1966 44

84. The Commerce and Navigation Treaty betweenFinland and Denmark provided that neither Partyshould impose other of higher revenues than those

48 See para. 92 below.



imposed on its nationals on the nationals of the otherParty. A stamp duty had been fixed on the deed as aDanish national sold a piece of real estate in Finland.The amount exceeding the stamp duty to be collectedfrom a Finnish national in a similar case was orderedby the Court to be returned to the Danish national onthe basis of the most-favoured-nation clause containedin the Commerce and Navigation Treaty.

Madelrieu v. Link

France: Cour de cassation, 15 June, 1967Bulletin des arr6ts..., 1967, IV, No. 480, p. 40

85. As a result of the Act of 28 May 1943, nationals offoreign countries may be accorded in France the benefitsof ordinary and exceptional laws relating to farmingleases where the countries of which they are nationalsgrant to French nationals the benefits of correspondinglegislation, or where such legislative reciprocity has beenwaived under a diplomatic agreement concluded betweentheir countries of origin and France. This does notapply in the case of the Franco-Yugoslav Conventionof 30 January 1929, which grants to nationals of eachof the contracting parties the option to possess or rentmovable or immovable property in the territory of theother party only on the same conditions as those pres-scribed in the legislation of that country in respect ofnationals of any third State and without their beingassimilated to nationals. The court said:

Whereas, in invalidating the notice to quit given on 20 February1962, to take effect in September 1965, by Madelrieu, the landlord,to Linic Stanko, a tenant-farmer of Yugoslav nationality, the courtof appeal ruled that the notice to quit was not in conformity withthe regulations concerning tenant farming (statut du fermage),although those regulations were applicable to the case, despite theforeign nationality of the tenant-farmer, since article 4 of theConsular Convention of 30 January 1929 between France andYugoslavia embodies, for the benefit of Yugoslav nationals, aprovision equivalent to the most-favoured-nation clause;

Whereas, in giving a judgement to that effect even though article 4of the Franco-Yugoslav Convention of 30 January 1929 grants tonationals of each of the high contracting parties the option to possessor rent movable or immovable property in the territory of the otherparty only on the same conditions as those prescribed in the legis-lation of that country in respect of nationals of any third State andwithout their being assimilated to nationals, the Court of Appealfailed to give a legal basis for its judgement;

For these reasons:

Quashes and annuls the decision given between the parties by theCourt of Appeal at Bastia on 2 July 1964.

Application of the Treaty of Commerce and Navigationbetween Finland and the United Kingdom

Finland: Supreme Court of Administration, 21 January1969 45

86. The Commerce and Navigation Treaty betweenFinland and the United Kingdom of Great Britain andNorthern Ireland provided that neither Party should

impose taxes or revenues other than those imposed on itsown nationals on the nationals of the other Party. Astamp duty had been fixed on the deed of gift, in respectof a piece of real estate bestowed on a British nationalin Finland. The amount exceeding the stamp duty to becollected from a Finnish national in a similar case wasordered by the Court to be returned to the British nationalon the basis of the most-favoured-nation clause containedin the Commerce and Navigation Treaty.

Taxation Office v. Fulgor (Greek Electricity Company)

Greece: Council of State, Decision of 28 May 1969 46

87. This decision concerned the application to a Swisscompany operating in Greece of the provisions of theConvention between the Government of the UnitedKingdom of Great Britain and Northern Ireland and theGovernment of the Kingdom of Greece for the avoidanceof double taxation and the prevention of fiscal evasionwith respect to taxes on income signed at Athens on25 June 1953. The Swiss company claimed the applicationof that Convention pursuant to the most-favoured-nationclause included in the agreement ratified by law 3610/1928on installation and legal protection concluded betweenGreece and Switzerland. The Greek Council of Statesaid:

Whereas, as it was considered by this Court . . . from the rulingsof articles 9 and 11, para, two, of this latter treaty, it becomesevident that the tax privileges provided by any one of the contract-ing parties to the subjects and firms of t h e . . . third country areextended to the subjects and firms of the other contracting partyde jure and with no . . . barter provided by the third country . . .This rightful extension of tax privileges without any barter. . .[concerning] the subjects of Greece and Switzerland, takes placein any case . . . [regardless of] whether these privileges are providedto the third nation pursuant to home legislation of Greece orSwitzerland or pursuant to [a] multiple to home legislation of Greeceor Switzerland or pursuant to [a] multiple or bipartite internationaltreaty with the third country a n d . . . [regardless] of the purposefor which they were offered; the more so if this is related to theavoidance of double taxation, since the rulings of above clausesof the Treaty between Greece and Switzerland fail to make anydistinction in this respect. Consequently, the application of therulings of the foregoing Treaty between Greece and Great Britainregarding the income of the Swiss company earned in Greece byvirtue of which tax privileges were decreed, was not excluded by thefact that these are included in [the] treaty for the avoidance of doubletaxation, nor did it depend on the fact . . . whether Greek subjectsor Greek firms enjoy in Switzerland similar tax privileges as inGreat Britain... Consequently the grounds supported in contra-diction in the petition under consideration should be dismissed asbeing groundless.

Taillens v. Geinoz

France: Cour de cassation, 9 November 1970

Bulletin des arrets..., 1970, III, No. 568, p. 413

88. The effect of the provisions of the Franco-SwissConvention of 23 February 1882, which were recognizedin the diplomatic notes dated 11 and 26 July 1929 ap-proved by the Decree of 16 June 1933, as equivalent tothose providing for the assimilation to French nationals


46 The English text of this decision was furnished by the Govern-ment of Greece.


of nationals of the most-favoured nation, is that Swissnationals may claim in France the benefit of legislationrelating to farming leases. The court said:

Whereas the appeal claims that the impugned decision grantedthe right of pre-emption to Geinoz, a Swiss national, even thoughthis right is expressly reserved to farmers of French nationalityand farmers of foreign nationality whose children have acquired orclaim French nationality, which was not the case in these proceed-ings, and even though the Franco-Swiss Convention of 1882, whichis based on the principle of reciprocity of rights, cannot be appliedin this case since Swiss legislation does not provide for the right ofpre-emption;

Whereas, however, article 869 of the Rural Code, which deniesto foreign nationals farming rural lands the benefit of the regula-tions concerning tenant farming unless they satisfy certain conditions,is of necessity without prejudice to their invocation of the provisionsof the Act of 28 May 1943 concerning the application to aliens oflegislation relating to leases of premises and farming leases; andwhereas the Franco-Swiss Convention of Establishment of 23 Fe-bruary 1882 provides, in article 1, that French nationals shall bereceived and treated in respect of their properties on the samefooting and in the same way as the citizens of Cantons are or maybe in the future, and, in article 2, that Swiss nationals shall enjoythe same rights and benefits as are accorded under article 1 toFrench nationals in Switzerland, and, in article 6, that any favourwhich one of the parties has granted, or may grant in future, inwhatever form, to another Power in respect of the establishment ofcitizens and the exercise of industrial occupations shall be applicablein like manner and at the same time to the other Party, without itbeing necessary to conclude a special agreement to that effect; andwhereas these latter clauses, which were recognized in the diplo-matic notes dated 11 and 26 July 1929, approved by the Decree of16 June 1933, as equivalent to those providing for the assimilationto French nationals of nationals of the most-favoured-nation, itfollows that Swiss citizens may claim in France the benefit of thelaws relating to farming leases;

Whereas the substitution of these grounds, to the extent that thisis necessary, for those challenged in the appeal vindicates the originaljudgement; and whereas the first plea should be rejected;

For these reasons :

Rejects the appeal against the decision rendered, on 4 December1967, by the Court of Appeal of Lyons.

III. The most-favoured-nation clause in consular matters

In re: Logiorato's EstateUnited States of America: State of New York, New York

County Surrogate's Court, February 1901New York Supplement, vol. 69, p. 507

89. The decedent was at the time of his death a residentof New York state. He died intestate. He was a citizenand subject of the Kingdom of Italy, and all of his nextof kin were residents of Italy. He left no next of kinresiding in the State of New York, and it was allegedin the petition that there were no creditors. The petitionerwas the Consul-General of the Kingdom of Italy. Thepublic administrator, though duly cited, made default.The petitioner asserted a right to administration withoutgiving any security, and in preference to the publicadministrator, and based his claim on the facts as totreaty provisions in the consular treaty of 1878 between

the United States and Italy. The letters of administrationwere granted. The Court said:

Conceding that, under the "most favored nation" clause in theprovision of the treaty with Italy relating to the rights, prerogatives,immunities, and privileges of consuls general, the stipulationcontained in the treaty of July 27,1853 with the Argentine republic, [47]becomes a part of the treaty with Italy, I do not find in that stipula-tion any justification for the conclusion sought. A right to intervene"conformably with the laws" of the state of New York is somethingdifferent from a right to set aside the laws of the state, and takefrom a person who, by those laws, is the officer entrusted with theadministration of estates of persons domiciled here, and who leaveno next of kin within the jurisdiction, the right and duty of admi-nistering their assets. And, when the laws of the state required anadministrator to give a bond to be measured by the value of assets,nothing in the treaty provision grants to the consul an immunityfrom this requirement to be obtained merely by asserting, in subst-ance, that he has no knowledge of the existence of any debts . . .Therefore, the petitioner may have letters on giving the usualsecurity, but that this is done pursuant to our local law, and becausethe public administrator has refused to act.

Sahatore L. Rocca v. ThompsonUnited States of America: Supreme Court, 19 February

1912U.S. Reports, vol. 223, p. 317

90. Giuseppe Ghio, a subject of the Kingdom of Italy,died intestate on 27 April 1908, in California, leaving apersonal estate. His widow and heirs at law, being minorchildren, resided in Italy. Plaintiff in error, SalvatoreL. Rocca, was the Consul-General of the Kingdom ofItaly for California. Upon the death of Ghio, Consul-General Rocca made application to the superior court ofCalifornia for letters of administration upon Ghio'sestate. The defendant in error, Thompson, as publicadministrator made application for administration uponthe same estate under the laws of California. The superiorcourt held that the public administrator was entitled toadminister the estate. The same view was taken in thesupreme court of California. From the latter decision awrit of error was granted, which brought the case to theSupreme Court. The Consul-General based his claim toadminister the estate upon certain provisions of thetreaty of 8 May 1878, between Italy and the UnitedStates.48 While article XVI only required notice to theItalian consul or consular agent of the death of an Italiancitizen in the United States, article XVII gave to consulsand similar officers of the Italian nation the rights, pre-rogatives, immunities, and privileges which were or mayhave been hereafter granted to an officer of the same

47 Art . IX of the treaty between the United States of Americaand Argentina reads:

"If any citizen of either of the 2 contracting parties shall diewithout will or testament in any of the territories of the other, theconsul-general or consul of the nation to which the deceasedbelonged, or the representative of such consul-general orconsul in his absence, shall have the right to intervene in thepossession, administration and judicial liquidation of the estateof the deceased, conformably with the laws of the country, forthe benefit of the creditors and legal heirs."48 Articles XVI and XVII read as follows:

"Article XVI. In case of the death of a citizen of the UnitedStates in Italy, or of an Ital ian citizen in the United States, whohas no known heir , or testamentary executor designated by him,

(Continued on p. 150.)


grade of the most-favoured nation. It was the contentionof the plaintiff in error that this favoured-nation clausein the Italian treaty gave him the right to administerestates of Italian citizens dying in the United States ofAmerica, because of the privilege conferred upon consulsof the Argentine Republic by the treaty of 27 July 1853between that country and the United States.49 TheSupreme Court, which affirmed the judgement of theSupreme Court of California, said:

In this country the right to administer property left by a foreignerwithin the jurisdiction of a state is primarily committed to state law.It seems to be so regulated in the state of California, by giving theadministration of such property to the public administrator. Thereis, of course, no Federal law of probate or of the administrationof estates, and, assuming for this purpose that it is within the powerof the national government to provide by treaty for the admin-istration of property of foreigners dying within the jurisdiction ofthe states, and to commit such administration to the consularofficers of the nations to which the deceased owed allegiance, wewill proceed to examine the treaties in question with a view todetermining whether such a right has been given in the presentinstance.

This determination depends, primarily, upon the constructionof paragraph 9 of the Argentine treaty of 1853, giving to the consularofficers of the respective countries, as to citizens dying intestate,the right "to intervene in the possession, administration, and judicialliquidation of the estate of the deceased, conformably with the lawsof the country, for the benefit of the creditors and legal heirs".It will be observed that, whether in the possession, the administrationof the judicial liquidation of the estate, the sole right conferred isthat of intervention, and that conformably with the laws of thecountry. Does this mean the right to administer the property ofsuch decedent, and to supersede the local laws as to the admin-istration of such estate ? The right to intervene at once suggeststhe privilege to enter into a proceeding already begun, rather thanthe right to take and administer the property.

Emphasis is laid upon the right under the Argentine treaty tointervene in possession, as well as administration and judicialliquidation; but this term can only have reference to the universallyrecognized right of a consul to temporarily possess the estate ofcitizens of his nation for the purpose of protecting and conservingthe rights of those interested before it comes under the jurisdictionof the laws of the country for its administration. The right tointervene in administration and judicial liquidation is for the samegeneral purpose, and presupposes an administration or judicialliquidation instituted otherwise than by the consul, who is authorizedto intervene.

So, looking at the terms of the treaty, we cannot perceive anintention to give the original administration of an estate to the consulgeneral, to the exclusion of one authorized by local law to administerthe estate.

But it is urged that treaties are to be liberally construed. Likeother contracts, they are to be read in the light of the conditions and

(Foot-note 48 continued.)the competent local authorities shall give notice of the fact tothe consuls or consular agents of the nation to which the deceasedbelongs, to the end that information may be at once transmittedto the parties interested.

"Article XVII. The respective consuls general, consuls, viceconsuls, and consular agents, as likewise the consular chancellors,secretaries, clerks or attaches, shall enjoy in both countries, allthe rights, prerogatives, immunities, and privileges which areor may hereafter be granted to the officers of the same grade of themost-favored nation."49 The reference is to article IX of the Treaty, the text of which

is reproduced in note 47 above.

circumstances existing at the time they were entered into, with aview to effecting the objects and purposes of the states therebycontracting.

It is further to be observed that treaties are the subject of carefulconsideration before they are entered into, and are drawn by personscompetent to express their meaning, and to choose apt words inwhich to embody the purposes of the high contracting parties. Hadit been the intention to commit the administration of estates ofcitizens of one country, dying in another, exclusively to the consulof the foreign nation, it would have been very easy to have declaredthat purpose in unmistakable terms. For instance, where that wasthe purpose, as in the treaty made with Peru in 1887, it was declaredin article 33.

And in the convention between the United States and Sweden,proclaimed 20 March 1911.

The Argentine treaty was made in 1853, and the Italian treatyin 1878. In 1894, correspondence between . . . the Italian Ambassadora n d . . . Secretary of State, shows that the Italian Ambassadorproposed that Italian consuls in the United States be authorized,as were the American consuls in Italy, to settle the estates of deceasedcountrymen. It was the view of the Department of State of the UnitedStates, then expressed, that, as the administration of estates in theUnited States was under the control of the respective states, theproposed international agreement should not be made. The ActingSecretary of State adverted to the practical difficulties of givingsuch administration to consular officers, often remotely locatedfrom the place where the estate was situated.

It is contended that the right secured to a foreign consul to appointan executor under this act of 1865 is evidence of the fact that theArgentine Republic is carrying out the treaty in the sense contendedfor by the plaintiff in error; but in this law certainly no right ofadministration is given to the consul of a foreign country. It istrue, he may appoint an executor, which appointment it is providedis to be at once communicated to the testamentary judge.

Our conclusion, then, is that, if it should be conceded for thispurpose that the most-favored-nation clause in the Italian treatycarries the provisions of the Argentine treaty to the consuls of theItalian government in the respect contended for (a question un-necessary to decide in this case), yet there was no purpose in theArgentine treaty to take away from the states the right of local admin-istration provided by their laws, upon the estates of deceased citizensof a foreign country, and to commit the same to the consuls of suchforeign nation, to the exclusion of those entitled to administer asprovided by the local laws of the state within which such foreignerresides and leaves property at the time of decease.

Loewengard v. Procitreur of the Republic and Bonvier( Sequestrator )

France: Court of Appeal of Lyon (First Chamber),13 October 1921

Clunet, vol. 49 (1922), p. 391

Annual Digest 1919-1922, Case No. 273

91. Lcewengard, a German national, had been Germanconsul since 1907 at Lyon, where he was engaged inbusiness and owned considerable real property. He leftFrance definitively on 2 August 1914. His property wasthen sequestered. In 1921, when his property was aboutto be liquidated, he brought an action against theProcureur of the Republic and the Sequestrator asking


for a declaration that as he was a consul, his personalproperty could not be liquidated, and consequently foran order discharging the sequestration. On 8 June 1921,the Tribunal Civil de Lyon declined jurisdiction. Onappeal, Lcewengard declared that in accordance with theterms of certain diplomatic agreements the consuls of anumber of States enjoyed diplomatic immunities inFrance subject to the condition of reciprocity; he citedin his favour the most-favoured-nation clause includedin the Treaty of Frankfurt. The Court held that theappeal must be dismissed and said:

Whereas it is true that under the terms of diplomatic agreementsthe consuls of a number of States enjoy certain immunities in France,subject to the condition of reciprocity; and whereas Loewengardclaims that these immunities are applicable to him because, by theTreaty of Frankfurt, in 1871, the German Empire obtained most-favoured-nation treatment for its nationals; it is, however, sufficientto note, without undertaking a detailed review of the question,that the Treaty of Frankfurt lapsed on the day that war was declared,that its place has now been taken by the Treaty of Versailles andthat the French Government has not issued any declaration regulat-ing immunities to be granted to German consuls by reviving thelapsed pre-war regime;

Magno Santovincenzo v. James F. Egan

United States of America: Supreme Court, 23 November1931

U.S. Reports, vol. 284, p. 30

92. Antonio Comincio, a native of Italy, died intestatein New York City in 1925, when letters of administrationwere issued to the respondent as Public Administrator bythe Surrogates' Court of New York County. Upon thejudicial settlement of the administrator's account, theappellant, the Consul-General of Italy at New York,presented the claim that the decedent at the time of hisdeath was a subject of the king of Italy and had left noheirs or next of kin, and that, under article XVII of theConsular Convention of 8 May 1878 between the UnitedStates and Italy 5 0 the petitioner was entitled to receivethe net assets of the estate for distribution to the King-dom of Italy. The Attorney General of New York con-tested the claim. The Surrogates' Court, finding that thedomicile of the decedent was in New York City, decreedthat the balance of the estate, amounting to $914.64,after payment of debts and the sums allowed as com-missions and as expenses of administration, be paid into

60 Article XVII reads:"The respective Consuls General, Consuls, Vice-Consuls and

Consular Agents, as likewise the Consular Chancellors, Secretaries,Clerks or Attaches, shall enjoy in both countries, all the rights,prerogatives, immunities and privileges which are or may hereafterbe granted to the officers of the same grade, of the most-favoured-nation."

Pursuant to this agreement, the Italian Consul-General soughtthe application of article VI of the Treaty of 1856 between theUnited States and Persia which reads:

"In case of a citizen or subject of either of the ContractingParties dying within the territories of the other, his effects shallbe delivered up integrally to the family or partners in business ofthe deceased; and in case he has no relations or partners, hiseffects in either country shall be delivered up to the consul oragent of the nation of which the deceased was a subject or citizen,so that he may dispose of them in accordance with the laws ofhis country."

the treasury of New York City for the use and benefitof the unknown kin of the decedent. The decree was af-firmed by the Appellate Division of the Supreme Courtof the State, and both the Appellate Division and theCourt of Appeals of the State denied leave to appeal tothe latter court. The decedent was never naturalized,and at the time of his death was an Italian subject. TheSupreme Court said:

The provision of article VI of the Treaty with Persia does notcontain the qualifying words "conformably with the laws of thecountry" (where the death occurred) as in the case of the Treatybetween the United States and the Argentine Confederation of[27 July] 1853 (art. IX); or the phrase "so far as the laws of eachcountry will permit" as in the Consular Convention between theUnited States and Sweden of [1 June] 1910 (art. XVI). The omissionfrom article VI of the Treaty with Persia of a clause of this sort, sofrequently found in treaties of this class, must be regarded as delib-erate. In the circumstances shown, it is plain that effect must begiven to the requirement that the property of the decedent "shallbe delivered up to the consul or agent of the nation of which thedeceased was a subject or citizen, so that he may dispose of themin accordance with the laws of his country", unless a differentrule is to apply simply because the decedent was domicilied in theUnited States.

The language of the provision suggests no such distinction and,if it is to be maintained, it must be the result of construction basedupon the supposed intention of the parties to establish an exceptionof which their words give no hint. In order to determine whethersuch a construction is admissible, regard should be had to thepurpose of the Treaty and to the context of the provision in question.The Treaty belongs to a class of commercial treaties the chiefpurpose of which is to promote intercourse, which is facilitatedby residence. Those citizens or subjects of one party who are per-mitted under the Treaty to reside in the territory of the other partyare to enjoy, while they are such residents, certain stipulated rightsand privileges. Whether there is domiciliary intent, or domicile isacquired in fact, is not made the test of the enjoyment of these rightsand privileges. The words "citizens" and "subjects" are used inseveral articles of the Treaty with Persia and in no instance are theyqualified by a distinction between residence and domicile...

• • •It would be wholly inadmissible to conclude that it was the

intention that citizens of the United States, making their residencein Persia under this Treaty, would be denied the benefit of article IIIin case they acquired a domicile in Persia. The provision contem-plated residence, nothing is said to indicate that domicile is excluded,and the clear import of the provision is that, so long as they retainedtheir status as citizens of the United States, they would be entitledto the guaranty of article III. The same would be true of Persianspermitted to reside here under the Treaty.

Again, the provisions of article V of the Treaty were of specialimportance, as they provided for extraterritorial jurisdiction ofthe United States in relation to the adjudication of disputes. Itwould thwart the major purpose of the Treaty to exclude from theimportant protection of these provisions citizens of the UnitedStates who might be domiciled in Persia. The test of the applicationof every paragraph of article V with respect both to citizens of theUnited States and to Persian subjects, clearly appears to be thatof nationality, irrespective of the acquisition of a domicile as dis-tinguished from residence.

We find no warrant for a more restricted interpretation of thewords "a citizen or subject of either of the contracting parties"in article VI than that which must be given to the similar descriptionof persons throughout the other articles of the Treaty. The sameintention which made nationality, without limitation with respectto domicile, the criterion in the other provisions, dominates thisprovision. The provision of article VI is reciprocal. The property


of a Persian subject dying within the United States, leaving no kin,is to be dealt with in the same manner as the property of a citizen ofthe United States dying in Persia in similar circumstances.

Our conclusion is that, by virtue of the most-favoured-nationclause of article XVII of the Consular Convention between theUnited States and Italy of 1878, the Italian Consul General wasentitled in the instant case, being that of the death of an Italiannational in this country prior to the termination of the Treatybetween the United States and Persia of 1856, to the benefit ofarticle VI of that Treaty, and that the net assets of the decedentshould be delivered to him accordingly.

Consequently, the decree was reversed and the causeremanded for further proceedings.

Racca v. Bourjac

France: Cour de cassation (Chambre civile, Sectionsociale), 12 October 1960

Revue critique... vol. 41 (1961), p. 532


93. On 7 March 1957 Bourjac gave Racca, his tenantfarmer, who was an Italian national, notice that he wouldbe dismissed from 8 September 1957. The validity of thisdismissal was confirmed on reference to the Tribunalparitaire des baux ruraux and on appeal, on the groundthat Racca was not entitled to the benefit of the Franco-Italian Convention on Establishment of 23 August 1951because when the first instance court gave its judgementthe decree had not yet been published in the Journalofficiel. Racca appealed to the Court of Cassation,claiming that the Agreement had retroactive effect sothat the most-favoured-nation clause benefited Italiansto the extent that nationals of other countries alreadybenefited, by virtue of other diplomatic treaties, fromthe status of tenant-farmer.

94. The Court held that the Franco-Italian Conventiongave the benefit of the most-favoured-nation clause toItalians only for the future. In addition, it did not becomeenforceable in France until it had been published in theJournal officiel on 18 December 1957, i.e., after 8 Sep-tember, the date on which Racca was dismissed. TheCourt said:

Whereas the impugned confirmative judgement validated thenotice of dismissal given by Bourjac on 7 March 1957 to his tenant-farmer Racca, an Italian national, which was to take effect on8 September 1957; and whereas the appeal maintains that theTribunal paritaire denied Racca the benefit of the Franco-ItalianConvention promulgated by the Decree of 9 December 1957 onthe ground that the Decree had not been published in the Journalofficiel when the first instance judgement was given, even thoughthe Franco-Italian Convention granted to nationals of the twocontracting parties the benefit of the most-favoured-nation clause,and that the Convention necessarily had retroactive effect inasmuchas, on the date of the promulgation of the Decree, nationals of othercountries already benefited, by virtue of other diplomatic agree-ments, from the regulations concerning tenant farming, Italiannationals being automatically assimilated to nationals of othercountries, and the Decree of 18 December 1957 being applicablethenceforth to all current proceedings;—Whereas, however, theFranco-Italian Convention gave the benefit of the most-favoured-nation clause to Italian only for the future and whereas it became

enforceable in France only upon the publication in the Journalofficiel of 18 December 1957 of the Decree of 9 December 1957,in other words, after 8 September 1957, the date on which thecontested notice of dismissal was to take effect; and whereas,since it gave to Italian tenant-farmers the right to rely on the regu-lations concerning tenant farming, it had no retroactive effect;and therefore there were no grounds for its application in respectof the impugned judgement;.

In re Carizzo 's EstateUnited States of America: The New York Surrogate's

Court, 23 January 1961New York Supplement, Second Series, vol. 211, p. 475


95. The Consul-General of the Italian Republic inNew York petitioned for an order directing payment tohim in his representative capacity of a fund depositedfor the benefit of Carmine Castellano, an incompetentItalian national residing in Italy. The fund was Castel-lano's distributive share of a decedent's estate. TheConsul contended that the Consular Convention of28 May 1878 between the United States of Americaand the Kingdom of Italy, revived by a notificationof 6 February 1948, by the United States Governmentpursuant to the Treaty of Peace with Italy of 10 February1947, constituted the Consul as attorney in fact of hisabsent national. Article IX of the Consular Conventionprovides in pertinent part:

Consuls General, Consuls, Vice-Consuls and Consular Agentsmay have recourse to the authorities of the respective countrieswithin their district, whether federal or local, judicial or executive . . .in order to defend the rights and interests of their countrymen . . .

96. The Consul also contended that the "most-favoured-nation" clause in article VII of the Treaty of Friendship,Commerce and Navigation of 2 February 1948 with Italyand in article XVII of the Consular Convention gave himsuch powers, since the consuls of other nations had thispower.

97. The Court held that the application must be granted.The Consul-General had authority to receive funds of adecedents's estate deposited on behalf of an incompetentItalian national without any special mandate. The Courtsaid:

Prior to World War II the courts of this State consistentlyheld that under international law as well as the Consular Conventionof May 28, 1878, between the United States of America and thethen Kingdom of Italy, an Italian Consul was authorized to maintaina proceeding in any court of competent jurisdiction and to demandpayment of a distributive share of a nonresident national froma decedent's estate administered in our courts . . . .

Following the end of World War II the United States of Americaand other Allied Powers entered into a Treaty of Peace with Italywhich was signed February 10, 1947, and went into forceSeptember 15, 1947. That Treaty provides that each Power wouldnotify Italy within a period of six months from its coming intoeffect, of the previously existing bilateral treaties with Italy whichany such Power desired to revive, and to enumerate and registerthem with the Secretariat of the United Nations, and that all suchtreaties not so enumerated were to be regarded as abrogated. OnFebruary 6, 1948, the Department of State in accordance withsaid provisions notified the Italian Government that the United

Most-favoured-nation clause 1S3

States desired to keep in force certain bilateral treaties and other which the Italian Consul General is entitled to exercise such rightsinternational agreements with Italy, among them being the Consular and privileges as are granted to other most favored foreign nations.Convention of May 28, 1878. It was thereby revived and continued A r e v i e w o f t h e a p p l i c a b l e authorities leads to the conclusionin force (see also Treaty of Friendship, Commerce and Navigation t h a t petitioner's authority extends to this proceeding on behalfsigned February 2, 1948, in force July 26, 1949). o f a n i n c o r n p e t e n t nonresident national, as well as on behalf of a

The Treaties and Consular Conventions between the United competent or infant nonresident national, without any specialStates and Italy contain a "most-favored-nation" clause, under mandate from any of them . . . .

CO-OPERATION WITH OTHER BODIES

[Agenda item 8]

DOCUMENT A/CN.4/272

Report on the fourteenth session of the Asian-African Legal Consultative Committee,by Mr. Abdul Hakim Tabibi, Observer for the Commission

1. In accordance with the decision taken by the Inter-national Law Commission at its twenty-fourth session,1

I was asked by the Chairman of the Commission, Mr.Richard D. Kearney, to attend as an Observer for theCommission at the fourteenth session of the Asian-African Legal Consultative Committee.

2. The Committee met for its fourteenth regular sessionat New Delhi, India, from 10 to 18 January 1973. Themost important question discussed among the membersand observers was the law of the sea, in preparation forthe forthcoming United Nations Conference on theLaw of the Sea. Other subjects considered at the sessionwere: protection and inviolability of diplomatic agentsand other persons entitled to special protection underinternational law, organization of advisory services inForeign Offices, law relating to international rivers andinternational sale of goods.

3. The following member States of the Committee wererepresented: Egypt, Ghana, India, Indonesia, Iran, Iraq,Japan, Jordan, Kenya, Kuwait, Malaysia, Nigeria, Nepal,Philippines, Sierra Leone, Sri Lanka and Thailand. Threecountries, namely Burma, Pakistan and Syria, were notrepresented. Two associate members, Mauritius and theRepublic of Korea, were represented. Twelve Asian-African States sent observers and nineteen observerswere sent by countries outside Asia and Africa. Observersrepresenting such international organizations as theInternational Law Commission, the Arab League, theUnited Nations Commission on International Trade Lawand the International Institute for the Unification ofPrivate Law also participated in the meeting.

4. The proceedings were conducted in English, which isthe working language of the Committee, but facilities forsimultaneous interpretation were provided for French-speaking delegates and observers.

5. H.E. Dr. Nagendra Singh of the Indian delegationwas elected President of the session. H.E. Hon. Mr.L. A. M. Brewah, Attorney General and Minister for

1 Yearbook... 1972, vol. II, p. 325, document A/8710/Rev.l,para. 88.

[Original text: English][29 June 1973]

Justice of Sierra Leone, was elected as Vice-President.The session was inaugurated by H.E. Sardar SwaranSingh, the Minister for External Affairs of the Govern-ment of India.

6. My statement on behalf of the Commission, in linewith the views of Mr. Kearney, is attached as an annex.

7. The Committee decided to hold its fifteenth sessionin Tokyo in January 1974, and invited the InternationalLaw Commission to send an observer to that session,pursuant to the standing invitation already extended tothe Commission.

8. In concluding, I take this opportunity to express mywarmest thanks to the Secretariat of the Asian-AfricanLegal Consultative Committee and particularly to itsable Secretary-General, Mr. B. Sen, for the warm recep-tion given to me personally and for the warm expressionsmade during the session by the members of the Committeeon the achievements of the International Law Com-mission.

Statement by H.E. Dr. Abdul Hakim Tabibi, Observer for theInternational Law Commission, at the Fourteenth Session of theAsian-African Legal Consultative Committee

ANNEX

1. It is a source of great pleasure for me to represent the Inter-national Law Commission before this august body in a great coun-try, to which I am proud to serve as Ambassador and in a citywith which we have great historical attachments and under aChairman, who himself till a few weeks ago was my colleague inthe Commission and now is an elected Judge of the World Court.

2. I am also happy to represent the International Law Commis-sion at the time when India is celebrating its twenty-fifth JubileeAnniversary, this month; by a coincidence the General Assemblythis year will observe the twenty-fifth anniversary of the Interna-tional Law Commission as well.

3. I believe that it is a good tradition that the International LawCommission and the Asian-African Legal Consultative Committeeare in close contact with each other by sending observers to eachother's session every year following the same noble task of develop-ment of international law for the betterment of mankind.

155


4. Every year the President or a member of the Commissioncomes before you to report about the progress of its work and in thesame manner the Commission receives the Chairman or the Secre-tary-General of your Committee in Geneva to explain the resultof the achievements of this important committee, whose membersbelong to two important continents of the world and whose impacton the codification and development of international law is feltstrongly in all international conferences.

5. The new look Which this Committee has given to the develop-ment of international law has been admitted by all, including theInternational Law Commission. The study of your effort which wasmade in the field of the law of treaties by your Committee wasinstrumental in the success of the United Nations Conference onthe Law of Treaties at Vienna and I am sure that the discussionsat this session and the preparatory work which has been accompli-shed so far by your Committee in the field of the law of the sea aswell as diplomatic protection will be another milestone for thesuccess of the forthcoming Law of the Sea Conference as well asthe next General Assembly, which will conclude an internationalarrangement for diplomatic protection.

6. As an Asian jurist interested in the progress of internationallaw, I have followed with close attention the work of your Committeeand its impact on the progressive development of international lawand codification in various judicial organs of the United Nations.I have every hope that the close contacts and co-operation whichexist happily between this Committee and the Commission willserve the further progress of international law, in order to governin a more positive manner the behaviour of nations and create peaceand brotherhood among nations.

7. Before introducing, the report of the International Law Com-mission on the work of its twenty-fourth session, I would like tosay in this twenty-fifth anniversary year, as I did when I representedthe Commission during the Committee's tenth session in Karachi,a few words about the achievements of the International LawCommission. Among the various achievements of the Commission,we can cite only those works which are now universally acceptedor are near to universal acceptance, such as the four Conventionson the Law of the Sea, to which in the last few days you have beenreferring in relation to the item on the law of the sea, the Conventionon the Reduction of Statelessness, the Model Rules on ArbitralProcedure, the Conventions on Diplomatic and Consular Relations,the Convention on the Law of Treaties, and finally the Conventionon Special Missions and draft articles on the representation of Statesin their relations with international organisations. In addition tothese works, on the basis of decisions of the General Assembly,other important topics were also dealt with by the Commission;such as the draft Declaration on Rights and Duties of States; Waysand Means for Making the Evidence of Customary InternationalLaw More Readily Available; Principles of International law recog-nised in the Charter of the Niirnberg Tribunal and in the Judgmentof the Tribunal; international criminal jurisdiction; reservations tothe Convention on the Prevention and Punishment of the Crime ofGenocide; the question of defining agression; and finally the draftCode of Offences against the Peace and Security of mankind. Thisis a clear balance sheet in favour of the Commission, in whose workin the last twenty-five years more than sixty elected jurists fromforty-three countries have participated, and many of its membersincluding three members of the present Commission one of themour President have been elected as Judges of the International Courtof Justice; perhaps now one-half of the Court Judges are formermembers of the Commission.

8. It was with this background that the International Law Com-mission met in Geneva from 2 May to 7 July of 1972 and discussedvarious topics.

9. The agenda that faced the International Law Commission atthe first meeting of the twenty-fourth session on 2 May 1972 was aformidable one. The twenty-third session in 1971, despite an exten-sion to fourteen weeks in place of the usual ten, was able to com-

plete work on the draft articles on the topic "Relations of Stateswith international organizations" only by concentrating on thatsubject to the substantial exclusion of other topics.

10. As a consequence the Commission had not made any realprogress on the other active subjects before it, which includedState succession in respect of treaties and in respect of matters otherthan treaties, as divided between two Special Rapporteurs, Stateresponsibility, the most-favoured-nation clause, and treaty law ofinternational organisations. In addition, the Commission hadbefore it another piece of unfinished business, the review of itslong-term programme of work in the light of the wide-ranging andthoughtful "Survey of International Law" which had been preparedin 1971 by the United Nations Secretariat at the Commission'srequest.

11. Despite this formidable array of unfinished endeavours, theCommission in its 1971 report advised the General Assembly that,if requested to do so, it would, during the course of its 1972 session,prepare a set of draft articles to provide greater protection to diplo-matic agents and other persons entitled to special protection underinternational law against such crimes as murder, kidnapping, andgrievous assaults.

12. The question of the protection and inviolability of diplomaticagents and other persons entitled to special protection under inter-national law was also added to the pending list of active topics.The list was completed by the question of what priority the Com-mission should give to the law of the non-navigational uses of inter-national watercourses, a subject which had been referred to it in1971 by General Assembly Resolution 2780 (XXVI), and a subjectof interest to this Committee.

13. The Special Rapporteurs on the two aspects of State suc-cession, for State responsibility and for the most-favoured-nationclause all had draft articles waiting for discussion by the Commis-sion, and there was also a preliminary paper on treaties and inter-national organisations for consideration. In addition Mr. Kearney,this year's Chairman of the Commission, had prepared a set ofdraft articles on the protection of diplomatic agents and other spe-cially protected persons, which he had circulated to members priorto the session.

14. Two special circumstances, however, permitted almostimmediate agreement on the program of work. The possibility haddeveloped that the Special Rapporteur on succession of States inrespect of treaties might not be with the Commission at futuresessions. This meant that every effort had to be made to completethe first reading of the draft articles on this subject. Otherwise, theextensive preparatory work and discussions that had gone on duringthe past five years might well go down the drain.

15. The second circumstance was that some members of theCommission had offered to deal with the protection of diplomatsduring its 1972 session. It is true that in making its proposal in the1971 report, the Commission had anticipated the problem, andsome discussion had taken place regarding the establishment of asmall working group to produce the set of draft articles.

16. The general debate on protection of diplomats revealed agreater variance of views on the subject. First, there was someobjection to the narrowness of the topic, coupled with a proposalthat terrorist activities in general be taken up. Other objectionswere directed to the proposed method of work on the ground thatthe need for urgent action was not sufficient to justify abandonmentof the Commission's time-tested practice of appointing a SpeicialRapporteur who would be able to make a thorough-going investiga-tion of the subject. These objections were expressed principally bymembers who were concerned with upholding the theory of "politicalcrimes" and the principle of territorial asylum.

17. Some members raised doubts regarding the utility of produc-ing draft articles. In view of the manifold obstacles to curbingterrorist activities, they thought it unlikely that the incidence ofviolent crimes directed against diplomatic agents as such could be

Co-operation with other bodies 157

substantially reduced through the medium of an international agree-ment.

18. A majority of members favoured an effort by the Commissionto produce during the twenty-fourth session a set of draft articleslimited to persons entitled to special protection under internationallaw and recognised that a working group afforded the only feasiblemeans to achieve this result.

19. As a result the Working Group produced a set of twelvedraft articles on the prevention and punishment of crimes againstdiplomatic agents and other internationally protected persons.These articles were reviewed at Commission meetings from 20 to27 June 1972. Discussion centered largely upon the fact that thearticles did not preserve the principle of territorial asylum for offencesprescribed under the articles.

20. A number of members argued strongly that when these pres-cribed offences constituted "political crimes" a right of asylumshould be maintained. A majority of the Commission, however,adhered to the position that the nature of these offences was suchthat they could not and should not be considered "political crimes".

21. On the basis of the discussion, the Working Group made anumber of revisions in the draft articles. After further debate, therevised articles were adopted for submission to the General Assemblyand to Governments for comment." In outlining the considerationsthat led to the adoption of the articles the Commission pointedout that:

. . . attacks against diplomatic agents and other persons entitledto special protection under international law not only gravelydisrupt the very mechanism designed to effectuate internationalco-operation for the safeguarding of peace, the strengthening ofinternational security and the promotion of the general welfareof nations but also prevent the carrying out and fulfilment of thepurposes and principles of the Charter of the United Nations.

The Commission then went on to state:Specifically, the draft seeks to ensure that safe-havens will no

longer be available to a person as to whom there are grounds tobelieve that he has committed serious offences against interna-tionally protected persons."

These internationally protected persons have been broadly dennedin article 1 of the draft articles. A head of State or a head of govern-ment and companying family members are included whenever theyare in a foreign State. The Commission makes clear in its comment-ary that "whenever" includes all types of foreign visits whether"official, unofficial or private". The Commission considered thatthis broad requirement for protection was called for under custom-ary international law but that the law had not yet reached the pointof requiring similar protection for all persons of cabinet rank, eventhough the law was moving in that direction.

22. In defining other "internationally protected persons", theCommission considered whether to be specific by referring to cate-gories of persons accorded inviolability or protection by variousinternational instruments, such as articles 29 or 37 of the ViennaConvention on Diplomatic Relations and article 40 of the ViennaConvention on Consular Relations, or to adopt a general formula.The decision was in favour of a general formula as affording thebroadest coverage.

23. In article 2 the basic acts prescribed are likewise set forth inbroad language and in two broad categories: (a) a violent attackupon the person or liberty of an internationally-protected personand (b) a violent attack upon his official premises or private accom-modation that is likely to endanger his person or liberty. Article 2requires each State Party to make "the intentional commission,regardless of motive . . . " of such attacks " . . . a crime under its

internal law, whether the commission of the crime occurs withinor outside of its territory."

24. Possibly the most important feature of article 2 is the require-ment that the offences described be made crimes punishable underthe law of a each State Party regardless of where the crime iscommitted,

25. Article 6 requires that a State Party which has found an allegedoffender in its territory shall, if it does not extradite him, submit,without exception whatsoever and without undue delay, the caseto its competent authorities for the purpose of prosecution, throughproceedings in accordance with the laws of that State.

26. Article 7 contains a serious of provisions intended to simplifythe requirements for extradition among States party in respect ofcrimes covered by the draft articles.

27. Articles 6 and 7 are quite similar to the provisions adoptedin the Hague and Montreal Conventions to combat aerial hijackingand other offences against the safety of civil aviation.

28. The draft articles call for a series of notifications beginningin article 4 with a "wanted fugitive" notification to all States Partiesif the State in which an article 2 crime has been committed believesan alleged offender has fled its jurisdiction, followed by the notifica-tion that the fugitive has been found under article 5, and completedin article 11 by a requirement that the State party in which proceed-ings against an alleged offender are carried out shall advise theSecretary-General of the United Nations as to the results of theproceedings for transmission to the other States parties.

29. Also scattered through the articles are a series of provisionsto safeguard the rights of the "alleged offender", article 1 of whichis the definition of the term, requiring "grounds to believe that hehas committed "one or more of.. ." the article 2 crimes. Underarticle 5 an alleged offender is entitled upon apprehension to com-municate immediately with the nearest appropriate representativeof his State of nationality and to be visited by a representative ofthat State. Article 8 is concerned solely with this problem andrequires that the alleged offender " . . . be guaranteed fair treatmentat all stages of the proceedings"...

30. The set of draft articles concludes with alternative choicesof machinery to settle disputes arising out of the application orinterpretation of the articles. These draft articles were consideredby the General Assembly at its twenty-seventh session and it wasdecided that a convention on the line of the International LawCommission draft should be concluded during the twenty-eighthsession of the General Assembly.

31. The greater portion of the Commission's twenty-fourth ses-sion was devoted to the 31 articles on succession of States in respectof treaties." So, the Commission considered and finalized the finalwork of Sir Humphrey Waldock during the last session because ofhis candidature to the International Court of Justice and we couldsay that Sir Humphrey, by submitting his last scholarly contributionas Rapporteur after the work on the law of treaties, has indeed servedthe community of nations as a true scholar and a great jurist. I saythis and I bow to him; although my own personal view as an Asianjurist does not coincide with his on some articles of the draft andmy views are in the records of the Commission as well as the GeneralAssembly.

32. Article 1 on scope provides that the articles "apply to theeffects of succession of States in respect of treaties between States".This formulation has a restriction additional to the assertion of theVienna Convention on the Law of Treaties * that it "applies totreaties between States" thus excluding subjects of international

• See Yearbook... 1972, vol. II, pp. 312 et seq., documentA/8710/Rev.l, chap. Ill, sect. B.

o Ibid., p. 312, document A/8710/Rev.l, paras. 67 and 68.

« Ibid., pp. 230 et seq., document A/8710/Rev.l, chap. Ill, C.* Article 1. For all references to the Vienna Convention on the

Law of Treaties, see Official Records of the United Nations Con-ference on the Law of Treaties, First and Second Sessions, Documentsof the Conference (United Nations publication, Sales No. E.70.V.5),pp. 289 et seq.


law other than States. Article 1 of the articles on succession notonly excludes succession of subjects of international law other thanStates, but also excludes succession of governments.

33. Article 2 states the meanings of terms, some of which, suchas "ratification", "acceptance" and "approval", "reservation","contracting State", and "party" have identical definitions in theVienna Convention.

34. Article 7, the first rule dealing with problems arising specifi-cally in a succession context, declares that a devolution agreementcannot of itself transfer treaty rights and obligations to the successorState and that the draft articles govern the consequences of a suc-cession of States with regard to treaty rights and obligations. Thearticle could be regarded as a specific application of article 34 of theVienna Convention.

35. Article 8 deals with a situation similar to Article 7, the caseof a successor State that makes a unilateral declaration that it pro-poses to continue the predecessor State's treaties in force. Thesame rule as in article 7 is laid down for this situation.

36. Article 10 on transfer of territory, constituting the whole ofpart II, states one of the principles in the field of succession that isuniversally accepted. Where territory is transferred from one Stateto another the successor State's treaties begin to apply and the pre-decessor State's treaties cease to apply upon the date of the suc-cession, a principle generally characterized as "the moving treatyfrontiers rule".

37. The series of articles on newly-independent States begins bylaying down in article 11 which, at first glance, appears to be abroadly formulated expression ot the "clean slate rule" to the effectthat "subject to the provisions of the present articles..." such aState "is not bound to maintain in force, or to become a party to,any treaty by reason only of the fact tha t . . . " the treaty appliedto its territory prior to independence. In its introduction to thedraft articles, however, the Commission has made clear that "theso-called clean slate principle . . . is very far from normally bringingabout a total rupture in the treaty relations of a territory whichemerges as a newly independent State." •

38. A series of articles on multilateral treaties (articles 12 through18) specifies a variety of legal consequences that survive the fact ofa succession. Article 12 lays down the basic principle that the newly-independent State has the right to become a party to a multilateralconvention applying in its territory prior to the succession by anotification of succession.

39. The general rule regarding succession to bilateral treaties inarticle 19 is substantially different from that formulated for multi-lateral treaties. It is only this treaty area, which is from the colonialtimes and sometimes contrary to self-determination of the peopleof Asia, Africa and Latin America which requires careful consider-ation by this Committee. While the legal nexus remains an essential,it here applies, for obvious reasons, only to treaties in force in thesuccessor's territory at the date of succession. There is no option.It is necessary that both sides expressly agree to keep the treaty inforce. However, the possibility is held out that " . . . by reason oftheir conduct they are to be considered as having so agreed".

40. The extent to which newly-independent States, upon attain-ing their independence, issued declarations maintaining all or partof the treaties previously applicable to their territories in effect ona provisional basis, usually subject to a requirement or reciprocityand until the expiration of a stated time period, and the complexityof the consequences of their declarations, led the Commission todecide that separate articles were needed to deal with provisionalapplication.

41. The final rule specifically dealing with newly-independentStates takes up the complications that arise when the State, as wastrue of Nigeria or Malaysia, is composed of two or more territories

• Yearbook... 1972, vol. II, p. 227, document A/8710/Rev.l,para. 37.

that had differing treaty regimes before independence. Article 25requires that any treaty continued in force under articles 12 to 21should be applicable to the entire territory of the new State, unlessrestricted to its original area of applicability by the party or partieswhose agreement is required or because the broader applicationwould be incompatible with the treaty's object or purpose or, inpermutation of the doctrine of rebus sic stantibus, combining theterritories radically changes the conditions for executing the treaty.

42. Article 26 deals with the uniting of existing States into oneState, a new topic which is more complicated than the combiningof territories. The commentary goes into the question of what theact of uniting means and points out that the essential end-productis a State and consequently that such partial or "hybrid" unions asthe European Economic Community or Benelux do not meet therequirement. While anticipating the possibility of a substantialnumber of such unifications in the future, the Commission foundthe 1958 union of Egypt and Syria and that of Tanganyika andZanzibar in 1964 as the major modern examples.

43. The reverse of the coin is found in article 27 on dissolutionof States. Treaties in force in the original State remain in effect ineach State emerging from the dissolution unless the treaty originallyapplied only to a particular part of the territory of the predecessorState. If that specific territory has become a State, then the treatyapplies only in that State. The same qualifications are made as arelaid down in articles 25 and 26.

44. Article 28 deals with two distinct problems and might wellhave been two separate articles. The first problem is a general one:What is the treaty position of a State a part of the territory of whichhas become a separate State? Paragraph 1 of the article providesthat treaties in force prior to the separation continue to apply in thediminished territory unless the parties agree otherwise or if thetreaty was intended to apply only to the lost territory or the loss ofterritory gives rise to a radical transformation of the treaty rightsand obligations. The formulation raises no problem. Paragraph 2,however, deals with the successor State and provides that it shouldbe treated as a newly independent State, so that the rules of articles 12to 21 will be applied. This formulation raises questions, particularlyas modern state practice is limited to the separation of Singaporefrom Malaysia and the Irish Free State from the United Kingdom.

45. Part V deals with boundary regimes or other regimes estab-lished by a treaty. Article 29 lays down the simple and direct require-ment that:

"A succession of states shall not as such affect:"(a) A boundary established by a treaty; or"(b) Obligations and rights established by a treaty and relating

to the regime of a boundary."

46. In its commentary the Commission discusses at length thequestion whether the rule should be framed in terms of successionto the treaty or to the boundary settlement as it exists in itself,consequent upon the operation of the treaty provisions. Article 62of the Vienna Convention bars use of the rebus sic stantibus prin-ciple as "a ground for terminating or withdrawing from a treaty . . .if the treaty establishes a boundary . . . " The Commission consideredthat this formulation was not a barrier to a broader concept in thecase of succession, because what is involved is not a challenge tothe continuing validity of a treaty b u t . . . "the obligations andrights which devolve upon a successor State". The article was con-sequently formulated upon the understanding that the successorState succeeded to the boundary itself and to the regime of thatboundary, which would include "ancillary provisions . . . intendedto form a continuing part of the boundary regime . . . "

47. Article 30 applies the basic rule of article 29 to other territorialregimes established by treaty. It is a considerably more complicatedarticle, however, as such territorial regimes may give rise to rightsfor the successor States and obligations on the part of another State,or obligations for the successor State and rights for another State.

Co-operation with other bodies 159

48. Both articles 29 and 30 are limited strictly to the effects of asuccession of States and have no bearing upon whether a boundaryor territorial regime is subject to attack upon other legal grounds,particularly the right of self-determination or the rule of rebus sicstantibus. My own views on these two articles differ from the viewsof the Special Rapporteur and the same will be found in the recordsof the Commission and the General Assembly.

49. The set of articles concludes with a provision that they donot prejudge any questions regarding military occupation, inter-national responsibility of States, or hostilities between States.

50. One additional action of the Commission should be men-tioned. The subject of uses of international watercourses was referredto the Commission by the General Assembly at its twenty-sixthsession. In view of the complexity and urgency of the problemsinvolved in the pollution of such watercourses, the Commissionrequested the Secretariat to concentrate on preparing studies inthis field.

51. In addition, the Commission held a memorial lecture inmemory of one of its eldest members, Gilberto Amado, who passedaway two years ago, and invited one of the Judges of the Interna-tional Court of Justice, Judge Eduardo Jimenez de Arechaga, aformer member of the International Law Commission, to delivera lecture which will be printed and sent to the Secretariat of theCommittee very soon.

52. The International Law Seminar, as usual, was also held inGeneva with participation of young jurists from all parts of theworld, and provided an opportunity for an exchange of viewsbetween members of the Commission and young jurists. The Com-mission was indeed happy to receive Mr. B. Sen as representativeof the Committee and to hear his scholarly report. The Commissionis looking forward to receiving your representative once more atits next session in Geneva, to benefit from his observations andreport.

REPORT OF THE COMMISSION TO THE GENERAL ASSEMBLY

DOCUMENT A/9010/REV.1

REPORT OF THE INTERNATIONAL LAW COMMISSIONON THE WORK OF ITS TWENTY-FIFTH SESSION, 7 MAY-13 JULY 1973

CONTENTSPage

Abbreviations 162

Chapter Paragraphs

I. ORGANIZATION OF THE SESSION 1-11 163

A. Membership and attendance 2-5 163

B. Officers 6 163

C. Drafting Committee 7 163

D. Secretariat 8 164

E. Agenda 9-10 164

F. Letter from the Chairman of the International Law Commission to the President of theEconomic and Social Council 11 164

II. STATE RESPONSIBILITY 12-58 165

A. Introduction 12-57 165

1. Historical review of the work of the Commission 12-35 165

2. General remarks concerning the draft articles 36-57 169(a) Form of the draft 36 169(6) Scope of the draft 37-42 169(c) Structure of the draft 43-51 170(d) Method followed in the preparation of the draft 52-57 172

B. Draft articles on State responsibility 58 173Chapter I. General principles (articles 1-4) 173Chapter II. The "act of the State" according to international law (articles 5-6) 188

III. SUCCESSION OF STATES IN RESPECT OF MATTERS OTHER THAN TREATIES 59-92 198


1. Historical review of the Commission's work 60-79 198(a) Division of the question of succession into three separate topics 60-61 198(6) Adoption by the Commission in 1972 of provisional draft articles on succession of

States in respect of treaties 62 198(c) Preliminary work on succession of States in respect of matters other than treaties . 63-77 199(d) Preparation of draft articles by the Commission at its twenty-fifth session . . . . 78-79 201

2. General remarks concerning the draft articles 80-91 201(a) Form of the draft 81 201(6) The expression "matters other than treaties" 82-84 201(c) Scheme of the draft and research to be undertaken 85-90 202(<f) Provisional nature of the provisions adopted at the twenty-fifth session 91 202

B. Draft articles on succession of States in respect of matters other than treaties 92 202Introduction (articles 1-3) 203Part I — Succession to State property (Section I—articles 4-8) 205

161


Paragraphs Page

IV. THE MOST-FAVOURED-NATION CLAUSE 93-123 209


1. Summary of the Commission's proceedings 93-111 209

2. Scope of the draft articles 112-115 2113. The most-favoured-nation clause and the principle of non-discrimination 116-119 212

4. The most-favoured-nation clause and the different levels of economic development . . 120-122 212

B. Draft articles on the most-favoured-nation clause (articles 1-7) 123 213

V. QUESTION OF TREATIES CONCLUDED BETWEEN STATES AND INTERNATIONAL ORGANIZATIONS ORBETWEEN TWO OR MORE INTERNATIONAL ORGANIZATIONS 124-133 223

VI. REVIEW OF THE COMMISSION'S PROGRAMME OF WORK 134-176 225

A. Summary of the Commission's proceedings prior to the present session 136-150 225

1. Review of the Commission's long-term programme of work 136-143 225

2. Priority to be given to the topic of the law of the non-navigational uses of internationalwatercourses 144-150 226

B. The work of the Commission during its first twenty-five sessions 151-169 227

C. Consideration of the item by the Commission at its present session 170-176 230

VII. OTHER DECISIONS AND CONCLUSIONS OF THE COMMISSION 177-217 231

A. Succession of States in respect of treaties 177 231

B. Organization of future work 178 231

C. Co-operation with other bodies 179-206 231

1. Asian-African Legal Consultative Committee 179-188 231

2. European Committee on Legal Co-operation 189-198 232

3. Inter-American Juridical Committee 199-206 233

D. Date and place of the twenty-sixth session 207 234

E. Representation at the twenty-eighth session of the General Assembly 208 234

F. Commemoration of the twenty-fifth anniversary of the opening of the Commission's first

session 209 234

G. Gilberto Amado Memorial Lecture 210-211 235

H. International Law Seminar 212-217 235

ABBREVIATIONS

GATT General Agreement on Tariffs and Trade

ICJ International Court of Justice

ILO International Labour Organisation

OAS Organization of American States

PCIJ Permanent Court of International Justice

UNCITRAL United Nations Commission on International Trade Law

UNCTAD United Nations Conference on Trade and Development

UNITAR United Nations Institute for Training and Research

Report of the Commission to the General Assembly 163

Chapter I

ORGANIZATION OF THE SESSION

1. The International Law Commission, established inpursuance of General Assembly resolution 174 (II) of21 November 1947, in accordance with its Statute annexedthereto, as subsequently amended, held its twenty-fifth ses-sion at the United Nations Office at Geneva from 7 Mayto 13 July 1973. The work of the Commission during thissession is described in the present report. Chapter II ofthe report, on State responsibility contains a descriptionof the Commission's work on that topic, together withsix draft articles and commentaries thereon, as pro-visionally adopted by the Commission. Chapter III, onsuccession of States in respect of matters other thantreaties, contains a description of the Commission's workon that topic, together with eight draft articles and com-mentaries thereon, as provisionally adopted by theCommission. Chapter IV, on the most-favoured-nationclause, contains a description of the Commission's workon that topic together with seven draft articles and com-mentaries thereon, as provisionally adopted by theCommission. Chapter V is devoted to the question oftreaties concluded between States and internationalorganizations or between two or more international organ-izations. Chapter VI deals with the review of the Com-mission's long-term programme of work, including thequestion of the priority to be given to the topic of the lawof the non-navigational uses of international watercourses.Chapter VII is concerned with the organization of theCommission's future work and a number of administra-tive and other questions.

A. Membership and attendance

2. The Commission consists of the following members:Mr. Roberto AGO (Italy);Mr. Milan BARTOS (Yugoslavia);Mr. Mohammed BEDJAOUI (Algeria);Mr. Suat BILGE (Turkey);Mr. Juan Jose CALLE y CALLE (Peru);Mr. Jorge CASTANEDA (Mexico);Mr. Abdullah EL-ERIAN (Egypt);Mr. Taslim O. ELIAS (Nigeria);Mr. Edvard HAMBRO (Norway);Mr. Richard D. KEARNEY (United States of America);Mr. Alfredo MARTINEZ MORENO (El Salvador);Mr. C. W. PINTO (Sri Lanka);Mr. R. Q. QUENTIN-BAXTER (New Zealand);Mr. Alfred RAMANGASOAVINA (Madagascar);Mr. Paul REUTER (France);Mr. Zenon ROSSIDES (Cyprus);Mr. Jose" SETTE CAMARA (Brazil);Mr. Abdul Hakim TABIBI (Afghanistan);Mr. Arnold J. P. TAMMES (Netherlands);Mr. Doudou THIAM (Senegal);Mr. Senjin TSURUOKA (Japan);

Mr. N. A. USHAKOV (Union of Soviet Socialist Re-publics);

Mr. Endre USTOR (Hungary);Sir Francis VALLAT (United Kingdom of Great Britain

and Northern Ireland);Mr. Mustafa Kamil YASSEEN (Iraq).

3. At its 1200th meeting, held on 7 May 1973, theCommission paid tribute to the memory of Mr. GonzaloAldvar, who had served as a member of the Commissionsince 1970.

4. On 15 May 1973, the Commission elected Mr. JuanJose Calle y Calle (Peru), Mr. Alfredo Martinez Moreno(El Salvador), Mr C. W. Pinto (Sri Lanka) and Sir FrancisVallat (United Kingdom of Great Britain and NorthernIreland) to fill the vacancies caused by the death ofMr. Gonzalo Alcivar and by the resignations ofMr. Nagendra Singh, Mr. Jose Maria Ruda and Sir Hum-phrey Waldock on their election to the InternationalCourt of Justice.

5. With the exception of Mr. Rossides, all membersattended meetings of the twenty-fifth session of theCommission.

B. Officers

6. At its 1200th meeting, held on 7 May 1973, theCommission elected the following officers:

Chairman: Mr. Jorge CastanedaFirst Vice-Chairman: Mr. Mustafa Kamil YasseenSecond Vice-Chairman: Mr. Milan BartosRapporteur: Mr Arnold J. P. Tammes

The Bureau availed itself of the services of two informalworking groups, one dealing with the comments on thereport of the Ad Hoc Working Group of Experts of theCommission on Human Rights concerning the questionof apartheid from the point of view of internationalcriminal law, transmitted by the Economic and SocialCouncil (see below, section F of the present chapter), andthe other dealing with the commemoration of the twenty-fifth anniversary of the International Law Commission.

C. Drafting Committee

7. At its 1207th and 1210th meetings held on 16 and21 May 1973 respectively, the Commission appointed aDrafting Committee composed as follows:

Chairman: Mr. Mustafa Kamil Yasseen;

Members: Mr. Roberto Ago, Mr. Taslim O. Elias,Mr. Richard D. Kearney, Mr. Alfredo Martinez Moreno,Mr. C. W. Pinto, Mr. Paul Reuter, Mr. Senjin Tsuruoka,Mr. Nikolai Ushakov, and Sir Francis Vallat.


Mr Mohammed Bedjaoui took part in the Committee'swork on State succession in respect of matters other thantreaties in his capacity as Special Rapporteur for thattopic. Mr. Endre Ustor took part in the Committee'swork on the most-favoured-nation clause in his capacityas Special Rapporteur for that topic. Mr. Arnold J. P.Tammes also took part in the Committee's work in hiscapacity as Rapporteur of the Commission.

D. Secretariat

8. Mr. Constantin A. Stavropoulos, Legal Counsel,attended the 1244th meeting, held on 9 July 1973, andrepresented the Secretary-General on that occasion.Mr. Yuri M. Rybakov, Director of the CodificationDivision of the Office of Legal Affairs, represented theSecretary-General at the other meetings of the session,and acted as Secretary to the Commission. Mr NicolasTeslenko and Mr. Santiago Torres-Bernardez acted asDeputy Secretaries to the Commission and Mr. EduardoValencia-Ospina and Mr. Larry Johnson served asAssistant Secretaries.

E. Agenda

9. The Commission adopted an agenda for the twenty-fifth session, consisting of the following items:

1. Filling of casual vacancies in the Commission (article 11 ofthe Statute).

2. State responsibility.3. Succession of States in respect of matters other than treaties.4. Question of treaties concluded between States and interna-

tional organizations or between two or more internationalorganizations.

5. (a) Review of the Commission's long-term programme ofwork: "Survey of International Law" prepared by theSecretary-General (A/CN.4/245); *

(6) Priority to be given to the topic of the law of the non-navigational uses of international watercourses (para. 5of section I of General Assembly resolutions 2780 (XXVI)and 2926 (XXVII)).

6. Most-favoured-nation clause.7. Organization of future work.8. Co-operation with other bodies.9. Date and place of the twenty-sixth session.

10. Other business.

10. In the course of the session, the Commission held50 public meetings (1200th to 1249th meetings) and oneprivate meeting (on 15 May 1973). In addition, theDrafting Committee held 10 meetings. The Commissionconsidered all the items on its agenda.

F. Letter from the Chairman of the International LawCommission to the President of the Economic andSocial Council

11. At its 1818th meeting, on 2 June 1972, the Economicand Social Council, having considered the report of theCommission on Human Rights, endorsed the request of

that Commission and decided inter alia to transmit to theInternational Law Commission for its comments thereport of the Ad Hoc Working Group of Experts con-cerning the question of apartheid from the point of viewof international penal law.2 The Chairman of the Inter-national Law Commission replied to the foregoingrequest by a letter, dated 13 July 1973, addressed to thePresident of the Economic and Social Council. The textof the letter, approved by the Commission, was asfollows:

At its present session, held at Geneva from 7 May to 13 July 1973,the International Law Commission was formally seized of thedecision taken by the Economic and Social Council at its 1818thmeeting on 2 June 1972 to transmit to the Commission, for itscomments, the report of the Ad Hoc Working Group of Expertsof the Commission on Human Rights concerning the question ofapartheid from the point of view of international criminal law,submitted under resolution 8 (XXVI) of that Commission.

The International Law Commission shares the concern of theUnited Nations regarding the serious consequences of the policy ofapartheid. Although this policy and its implementation are a matterfalling primarily within the competence of other expert organs ofthe United Nations, the Commission has followed with greatinterest and continuous attention the various efforts being made inthis sphere by such organs.

With reference, in particular, to the study of the Ad Hoc WorkingGroup of Experts, the Commission will limit itself, as it has beenrequested to do and as is only appropriate in view of the workaccomplished by so highly qualified a group of experts, to makingsome observations of a general character. Besides, the Commissionwishes to indicate that it would not have enough time at its disposalto consider in depth such an elaborate study and, furthermore, thatsuch a task would not easily fall within either the rules that determineits statutory competence or those which govern its methods of work.

In connexion with the conclusion of the Ad Hoc Working Groupconcerning the relationship between international criminal law andpublic international law in general, the Commission deems itappropriate to recall the fact that various meanings have beenattributed to the expression "international criminal law" in practiceand in doctrine. The Commission has in several instances of itspast work concerned itself with questions such as the formulationof the principles of international law recognized in the Charter ofthe Nurnberg Tribunal and in the Judgement of the Tribunal, theelaboration of the draft code of offences against the peace andsecurity of mankind, and the submission of conclusions regardingthe desirability and possibility of establishing an internationalcriminal jurisdiction.

The Commission remains aware of the possible relevance thatthe work of the Ad Hoc Working Group concerning the policy ofapartheid may have to the development of rules of internationallaw in the context of State responsibility, a topic the study of whichis being carried out at present by the Commission.

The Commission notes with deep interest the recommendationof the Ad Hoc Working Group to the effect that inhuman actsresulting from apartheid should be made subject to sanctions bymeans of an international convention.

The Commission warmly supports all efforts by organs of theUnited Nations to bring about wider participation in humanitarianconventions and a stricter observance of their provisions and of therules of customary international law applicable in the matter.

(Signed Jorge CASTASEDAChairman of the

International Law Commission

1 Yearbook . . . 1971, vol. II (Part Two), p. 1.2 See Official Records of the Economic and Social Council,

Fifty-second Session, Supplement No. 1 (E/5183 and Corr.l), p. 23.


Chapter II

STATE RESPONSIBILITY

A. Introduction

1. HISTORICAL REVIEW OF THE WORK OF THE COMMISSION

12. At its first session, in 1949, the International LawCommission included the question of State responsibilityin the list of fourteen topics of international law selectedfor codification. In 1955, following the adoption by theGeneral Assembly of resolution 799 (VIII), dated7 December 1953, the Commission appointed Mr. F. V.Garcia Amador Special Rapporteur for the topic. Between1956 and 1961, Mr. Garcia Amador submitted to theCommission six successive reports on State responsibility.Being occupied throughout those years with the codifica-tion of other branches of international law, such asarbitral procedure and diplomatic and consular inter-course and immunities, the Commission was not able toundertake the codification of the topic of State respon-sibility, although from time to time, particularly in 1956,1957, 1959 and 1960, it held some general exchanges ofviews on the question.3

13. In 1960 the question of the codification of Stateresponsibility was raised in the Sixth Committee of theGeneral Assembly for the first time since 1953. It wasconsidered in 1961 and 1962 by the Sixth Committee andby the International Law Commission in the context ofthe programme of future work in the field of the codifica-tion and progressive development of international law.The discussion brought out differences of opinion regardingthe approach to the subject, in particular as to whetherthe Commission should begin by codifying the rulesgoverning State responsibility as a general and separatetopic, or whether it should take up certain particulartopics of the law of nations, such as the status of aliens,and at the same time, within this context, should set outto codify the rules whose violation entailed internationalresponsibility, as well as the rules of responsibility in theproper sense of the term. Finally it was agreed, both inthe General Assembly and in the International LawCommission, that it was a question not merely of con-tinuing work already begun but of taking up the subjectagain ex novo, that State reponsibility should be includedamong the priority topics, and that measures should betaken to speed up work on its codification. As Mr. GarciaAmador was no longer a member, the Commission agreedin 1962 that it would be necessary to carry out some pre-paratory work before a special rapporteur was appointed,and it entrusted this task to a Sub-Committee on StateResponsibility often members.4

14. At its session in January 1963, the Sub-Committeeon State Responsibility 5 decided unanimously to recom-mend that, with a view to the codification of the topic,the Commission should give priority to the definition ofthe general rules governing the international responsibilityof the State. It was also agreed, first, that there would beno question of neglecting the experience and materialgathered on certain particular aspects of the topic,especially that of responsibility for injuries to the personor property of aliens; and, secondly, that careful attentionshould be paid to the possible repercussions which newdevelopments in international law might have had onState responsibility. Having reached this general conclu-sion, the Sub-Committee discussed in detail an outlineprogramme of work submitted by its Chairman, Mr. Ago,and decided to give the Commission some indications asto the main points to be taken into consideration inconnexion with the general aspects of the internationalresponsibility of the State, so as to guide the work of thespecial rapporteur to be appointed by the Commission.The indications or recommendations of the Sub-Com-mittee related particularly to the definition, origin andforms of the international responsibility of the State.

15. The work of the Sub-Committee on State Responsi-bility was reviewed by the Commission at its 686th meet-ing, during its fifteenth session (1963), on the basis of thereport submitted by the Chairman of the Sub-Committee,Mr. Roberto Ago.6 All the members of the Commissionwho took part in the discussion agreed with the generalconclusions formulated by the Sub-Committee. Themembers of the Commission also approved the pro-gramme of work proposed by the Sub-Committee, withoutprejudice to their position on the substance of the ques-tion listed in the programme. In this connexion, it waspointed out that the list of questions was intended merelyto assist the Special Rapporteur in his substantive studyof the various aspects of the formulation of the generalrules governing the international responsibility of States.

16. After having unanimously approved the report ofthe Sub-Committee, the Commission at the same sessionappointed Mr. Roberto Ago as Special Rapporteur forthe topic of State responsibility. It was also agreed that

3 For a detailed history of the question up to 1969, see Year-book . . . 1969, vol. II, p. 229-233, document A/7610/Rev.l, chap. IV.

4 Mr. Ago (Chairman), Mr. Briggs, Mr. Gros, Mr. Jimenez deArdchaga, Mr. Lachs, Mr. de Luna, Mr. Paredes, Mr. Tunkin,Mr. Tsuruoka and Mr. Yasseen.

5 The Sub-Committee had before it memoranda prepared byMr. Jimenez de Arechaga (ILC (XIV) SC.l/WP.l), by Mr. Paredes(ILC (XIV) SC.1/WP.2 and Add.l, A/CN.4/SC.1/WP.7), byMr. Gros (A/CN.4/SC.1/WP.3), by Mr. Tsuruoka (A/CN.4/SC.1/WP.4), by Mr. Yasseen (A/CN.4/SC.1/WP.5) and by Mr. Ago(A/CN.4/SC.1/WP.6).

8 The report was reproduced as an annex to the report of theCommission on the work of its fifteenth session Yearbook ... 1963,vol. II, pp. 227-228, document A/5509, annex I). The summaryrecords of the second to the fifth meetings of the Sub-Committeeand the memoranda submitted by its members were reproducedin the Yearbook... 1963, vol. II, pp. 228-259, as appendicesI and II to annex I mentioned above.


the Secretariat should prepare a number of workingpapers on the topic.7

17. In 1964 the Secretariat prepared and circulated, inaccordance with the Commission's request, a workingpaper containing a summary of the discussions in variousUnited Nations organs and the resulting decisions,8 anda digest of the decisions of international tribunals relatingto State responsibility.9 A supplement to each of thesetwo documents, bringing them up to date, was publishedby the Secretariat in 1969.10

18. Owing to the fact that the term of office of themembers of the Commission was to expire at the end of1966, and that it was desirable to complete, by that date,the study of the topics which were already at an advancedstage, the Commission decided to devote its sixteenth,seventeenth and eighteenth sessions to the completion ofits work on the law of treaties and special missions, andnot to begin its consideration of the substance of thequestion of State responsibility until it had completed itsstudy of those other topics.11

19. In 1967, at its nineteenth session, the Commission hadbefore it a note on State responsibility submitted byMr. Roberto Ago, Special Rapporteur. Since the mem-bership of the Commission had been altered as a resultof the election in the General Assembly in 1966, theSpecial Rapporteur expressed the wish that the Com-mission, as newly constituted, would confirm the instruc-tions given to him in 1963. The Commission confirmedthese instructions and noted with satisfaction thatMr. Ago was to submit a substantive report on the topicat its twenty-first session.12

20. In 1969, at the twenty-first session of the Commission,Mr. Roberto Ago, Special Rapporteur, submitted hisfirst report on the international responsibility of States.13

The report contained a review of previous work on thecodification of the topic and reproduced, as annexes, themost important texts prepared in the course of earliercodification work, both individual and collective, officialand unofficial.14

21. As the Special Rapporteur explained when presentingit at the 1011th meeting of the Commission;15 his report

7 Yearbook ...chap. IV, sect. A.

8 Yearbook ...s Ibid., pp. 13210 Yearbook..

and ibid., pp. 101-11 Yearbook..12 Yearbook..

and Rev.l/Corr.l,13 Yearbook..

and Add.l.

1963, vol. II, pp. 223-224, document A/5509,

1964, vol. II, pp. 125-132, document A/CN.4/165.:-171, document A/CN.4/169.. 1969, vol. II, pp. 114-124, document A/CN.4/209113, document A/CN.4/208.1964, vol. II, p. 226, document A/5809, para. 36.1967, vol. II, p. 368, document A/6709/Rev.lpara. 42.1969, vol. II, pp. 125-156, document A/CN.4/217

14 These texts were as follows: (1) Project on "diplomaticprotection", prepared by the American Institute of InternationalLaw in 1925 (Yearbook . . . 1956, vol. II, p. 227, document A/CN.4/96, annex 7); (2) Draft code of international law, adopted by theJapanese branch of the International Law Association and theKokusaiho Gakkwai (International Law Association of Japan)in 1926 (Yearbook... 1969, vol. II, p. 141, document A/CN.4/217and Add.l, annex ID; (3) Draft on "international responsibilityof States for injuries on their territory to the person or propertyof foreigners", prepared by the Institute of International Law(1927) (Yearbook . . . 1956, vol. II, pp. 227-229, document A/CN.4/96, annex 8); (4) resolution on the rule of the exhaustion of local

was intended to provide the Commission with a con-spectus of what had been done so far, by studying whichit could derive the maximum benefit for its future work,and at the same time avoid committing the errors whichin the past had stood in the way of codification of thisimportant branch of international law.22. In this context the Special Rapporteur was particu-larly concerned to illustrate some of the serious difficultiesencountered when approaching the topic of international

remedies", adopted by the Institute of International Law in 1956(Yearbook... 1969, vol. II, p. 142, document A/CN.4/217 andAdd.l, annex IV); (5) Resolution on "the national character of aninternational claim presented by a State for injury suffered by anindividual", adopted by the Institute of International Law in 1965(Ibid., p. 142, document A/CN.4/217 and Add.l, annex V); (6) Draftconvention on "responsibility of States for damage done in theirterritory to the person or property of foreigners", prepared by theHarvard Law School (1929) (Yearbook . .. 1956, vol. II, pp. 229-230,document A/CN.4/96, annex 9); (7) Draft convention on the inter-national responsibility of States for injuries to aliens, prepared bythe Harvard Law School, 1961 (Yearbook . . . 1969, vol. II, pp. 142-149, document A/CN.4/217 and Add.l, annex VII); (8) Draftconvention on the responsibility of States for injuries caused intheir territories to the person or property of aliens, prepared by theDeutsche Gesellschaft fur Volkerrecht (German InternationalLaw Association) in 1930 (ibid, pp. 149-351, document A/CN.4/217and Add.l, annex VIII); (9) Draft treaty concerning the responsibilityof a State for internationally illegal acts, prepared by ProfessorStrupp in 1927 (ibid, pp. 151-152, document A/CN.4/217 and Add.l,annex IX); (10) Draft convention on the responsibility of Statesfor international wrongful acts, prepared by Professor Roth in1932 (ibid., p. 152, document A/CN.4/217 and Add.l, annex X);(11) Recommendation concerning "claims and diplomatic inter-vention", adopted at the First International American Conference(Washington, 1889-1890) (Yearbook... 1956, vol. II, p. 226,document A/CN.4/96, annex 4); (12) Convention relative ro therights of aliens, signed at the Second International Conference ofAmerican States (Mexico City, 1902) (ibid., annex 5); (13) Resolutionon "International responsibility of the State", adopted at the SeventhInternational Conference of American States (Montevideo, 1933)(ibid., annex 6); (14) Principles of international Law that governthe responsibility of the State in the opinion of Latin Americancountries, prepared by the Inter-American Juridical Committeein 1962 (Yearbook... 1969, vol. II, p. 153, document A/CN.4/217and Add.l, annex XIV); (15) Principles of international law thatgovern the responsibility of the State in the opinion of the UnitedStates of America, prepared by the Inter-American JuridicalCommittee in 1965 (ibid., pp. 153-154, annex XV); (16) Conclusionsof the report of the Sub-Committee on State Responsibility, annexedto Questionnaire No. 4 adopted by the League of Nation Committeeof Experts for the Progressive Codification of International Law(Geneva, 1926) (Yearbook ... 1956, vol. II, pp. 222-223, documentA/CN.4/96, annex 1): (17) Bases of discussion drawn up in 1929by the Preparatory Committee of the Conference for the Codificationof International Law (The Hague, 1930) arranged in the orderthat the Committee considered would be most convenient fordiscussion at the Conference (ibid., pp. 223-225, document A/CN.4/96, annex 2); (18) Text of articles adopted in first reading by theThird Committee of the Conference for the Codification of Inter-national Law (The Hague, 1930) (ibid., annex 3); (19) Bases ofdiscussion drawn up in 1956 by Mr. F. V. Garcia Amador, SpecialRapporteur of the International Law Commission on State res-ponsibility (ibid., pp. 219-221, document A/CN.4/96, para. 241);(20) Drafts on international responsibility of the State for injuriescaused in its territory to the person or property of aliens, preparedin 1957 (Yearbook . . . 1957, vol. II, pp. 128-129, document A/CN.4/106, annex), in 1958 (Yearbook ... 1958, vol. II, pp. 71-73, documentA/CN.4/111, annex) and in 1961 (Yearbook ... 1961, pp. 46-49,document A/CN.4/134 and Add.l,) by Mr. Garcia Amador,Special Rapporteur of the International Law Commission on Stateresponsibility; (21) part IV of Restatement of the law, by theAmerican Law Institute (1965) (Yearbook... 1971, vol. II (PartOne), p. 193, document A/CN.4/217/Add.2).

15 Yearbook ... 1969, vol. I, pp. 104-106, paras. 2-19.


responsibility, and to bring out the reasons for thosedifficulties as they emerge from an examination of thevarious earlier attempts at codification under the auspicesof official bodies, including the League of Nations and theUnited Nations itself. In concluding his analysis, theSpecial Rapporteur reviewed the ideas which had guidedthe International Law Commission since the time when,having been forced to recognize that its previous effortshad led nowhere, it decided to take up the study of thetopic of responsibility again, but from a fresh viewpoint;in particular, he summarized the plan adopted by theSub-Committee on State Responsibility set up in 1962,and confirmed by the Commission itself at its fifteenth(1963) and nineteenth (1967) sessions, on the strength ofwhich the Commission had decided to try to give a fresh'impetus to the work of codification and reach somepositive results, in pursuance of the recommendationsof the General Assembly in resolutions 1765 (XVII),1902 (XVIII), 2045 (XX), 2167 (XXI), 2272 (XXII) and2400 (XXIII).

23. The Commission discussed the Special Rapporteur'sfirst report in detail at its 1011th to 1013th and 1036thmeetings.16 The debate revealed a considerable identity ofviews in the Commission as to the most appropriate wayof continuing the work on State responsibility and as tothe criteria that should govern the preparation of thedifferent parts of the draft articles which the Commissionproposed to undertake. The Commission's conclusionsin that regard were subsequently set out in its report onthe work of its twenty-first session.17

24. The conclusions reached by the Commission atits twenty-first session were favourably received at thetwenty-fourth session of the General Assembly.18 Theover-all plan for the study of the topic, the successivestage for the execution of the plan and the criteria for thedifferent parts of the draft, as laid down by the Commis-sion, met with the general approval of the Sixth Committee.In the light of the Committee's report, the GeneralAssembly, in resolution 2501 (XXIV) of 12 November1969, in which it referred to its resolution 2400 (XXU1),recommended that the Commission should continueits work on State responsibility.

25. On the basis of the directives laid down by theInternational Law Commission and the recommendationsof the General Assembly, the Special Rapporteur beganto consider, in succession, the many and diverse questionsraised by the topic as a whole. He submitted to theCommission, at its twenty-second session, in 1970, asecond report on State responsibility, entitled "Theorigin of international responsibility".19 The introductionto the report contained a detailed plan of work for thefirst phase of the study of the topic, in which attentionis to be focused on the subjective and objective conditions

for the existence of an internationally wrongful act. Theintroduction was followed by a first chapter dealingwith a number of general fundamental principles gov-erning the topic as a whole. The Special Rapporteurpresented his second report at the 1074th and 1075thmeetings of the Commission.20 At the same time, hesubmitted a questionnaire listing a number of points onwhich he wished to know the views of members of theCommission for the purposes of the continuation ofhis work.21

26. Because of the limited time at its disposal, theCommission was unable at its twenty-second sessionto do more than discuss the Special Rapporteur's reportin a general manner by way of a first broad review, andpostponed more detailed consideration of specific pointstill a later session. The discussion took place at the1075th, 1076th, 1079th, and 1080th meetings. At the1081st meeting, the Special Rapporteur replied to thequestions raised during the discussion and summarizedthe main conclusions to be drawn from the Commission'sbroad review.22 The Commission's conclusions, whichconcerned questions of method as well as points ofsubstance and problems of terminology, are summarized,in its report on the work of its twenty-second session.23

27. At the close of its discussion on the second report,the Commission invited the Special Rapporteur tocontinue his study of the topic and the preparation ofdraft articles. It was agreed that his third report shoulddeal primarily with the part that had been examinedprovisionally at the twenty-second session, revised in thelight of the discussion, and the broad conclusions towhich it had led. That third report and those to followit would contain a detailed analysis of the various con-ditions which must be met for a State to be regarded ashaving committed an internationally wrongful act andas having thereby incurred international responsibility.

28. At the twenty-fifth session of the General Assembly,the Sixth Committee found that the conclusions reachedby the Commission at its 1970 session were generallyacceptable.24 In resolution 2634 (XXV) of 12 November1970, the General Assembly recommended that the Com-mission should continue its work on State responsibility,taking into account the views and considerations referredto in its resolutions 1765 (XVII), 1902 (XVIII) and 2400(XXIII).

29. At the twenty-third session of the Commission, in1971, the Special Rapporteur submitted his third report,entitled "The internationally wrongful act of the State,source of international responsibility".25 This reportbegan with an introduction setting out the variousconclusions reached by the Commission following its

16 Ibid., pp. 104-117 and 239-242.17 Yearbook... 1969, vol. II, p. 233, document A/7610/Rev.l,

chap. IV, paras. 80-84).18 Official Records of the General Assembly, Twenty-first Session,

Sixth Committee, 1103rd-1111th and 1119th meetings; and ibid.,Annexes, agenda items 86 and 94 (b), document A/7746, paras. 86-89,

10 Yearbook... 1970, vol. II, p. 177, document A/CN.4/233.

20 Ibid., vol. I, pp. 175-178 and 181-187. *£ 921 Ibid., pp. 175-176.22 Ibid., pp . 181-192 and 209-222.23 Yearbook... 1970, vol. I I , pp . 307-309, document A/8010/

Rev . l , paras. 70-83.24 Official Records of the General Assembly, Twenty-fifth Session,

Annexes, agenda item 84, document A/8147, paras . 98-107.25 Yearbook... 1971, vol. I I (Part One), p . 199, document

A/CN.4/246 and Add. 1-3.


consideration of the second report. The introduction wasfollowed by a first chapter ("General principles"),divided into four sections (articles 1-4). In this chapter theSpecial Rapporteur reproduced the material includedin chapter I of his second report, revised and supplementedin the light of the discussion in the Commission at itstwenty-second session, namely: the principle that anyinternationally wrongful act of the State involves theState's international responsibility; the conditions forthe existence of an internationally wrongful act; thesubjects which might commit internationally wrongfulacts; and the irrelevance of municipal law to the charac-terization of an act as internationally wrongful. Thereport ended with sections 1 to 6 (articles 5 to 9) ofchapter II of the draft ("The 'act of the State' accordingto international law"); in all, this chapter is to includeten sections dealing with the conditions for the attributionto the State, as a subject of international law, of an actwhich might constitute a source of international responsi-bility. Sections 1 to 6, included in the third report, presentsome considerations on the subject matter of the chapterand on questions concerning the attribution to theState of the acts of its organs; the irrelevance of theposition of an organ in the distribution of powers andin the internal hierarchy of the State; the attribution tothe State of acts of organs of public institutions separatefrom the State; the attribution to the State of acts ofprivate persons in fact performing public functions orin fact acting on behalf of the State; and the attributionto the State of the acts of organs placed at its disposalby another State or by an international organization.

30. Consideration of the conditions for attributingto the State, as a subject of international law, an actwhich might constitute a source of international re-sponsibility was continued and completed in the fourthreport26 by the Special Rapporteur, which was submittedin 1972 at the Commission's twenty-fourth session. Thisreport contains sections 7 to 10 (articles 10 to 13) ofchapter II of the draft ("The 'act of the State' accordingto international law"). These sections deal with problemsrelating to the attribution to the State of acts or omis-sions of organs acting outside their competence or incontravention of the rules of municipal law concerningtheir activity; and with problems which arise in the samecontext with regard to the conduct of private individualsacting in that capacity, the conduct of organs of anothersubject of international law, and the conduct of organsof an insurrectional movement whose structures havesubsequently become, in whole or in part, the structuresof a State.

31. Being occupied with the preparation of draft articleson the representation of States in their relations withinternational organizations, on the succession of Statesin respect of treaties and on the prevention and pun-ishment of crimes against diplomatic agents and otherinternationally protected persons, the Commission wasunable, for lack of time, to consider the topic of Stateresponsibility either at its twenty-third session (1971) orat its twenty-fourth session (1972). The Commission

included in its reports on those sessions, however, abrief statement of the position with regard to the work onState responsibility, in order to inform the GeneralAssembly of the progress made in the study of the topicas a result of the third and fourth reports submitted bythe Special Rapporteur.27

32. At the General Assembly's twenty-sixth session(1971), it was considered in the Sixth Committee that theSpecial Rapporteur's third report to the InternationalLaw Commission was a valuable contribution likely tofacilitate the latter's work and speed up the preparationof draft articles on the subject.28 In its resolution 2780(XXVI) of 3 December 1971, the General Assemblyrecommended that the Commission should continueits work on State responsibility, taking into account theview and considerations referred to in its resolutions1765 (XVII), 1902 (XVIII) and 2400 (XXIII), with a viewto making in 1972 substantial progress in the preparationof draft articles on the topic.

33. At the General Assembly's twenty-seventh session,in 1972, a number of representatives in the Sixth Com-mittee said that the International Law Commissionshould give the highest priority to the study of Stateresponsibility.29 In its resolution 2926 (XXVII) of 28November 1972, the General Assembly recommended thatthe Commission should continue its work on State respon-sibility, taking into account the resolutions mentionedin its resolution 2780 (XXVI), with a view to the prep-aration of a first set of draft articles on the topic.

34. At its twenty-fifth session, the Commission continuedits study of State responsibility and began the preparationof a set of draft articles on the subject, in accordancewith the General Assembly's recommendations. At its1202nd to 1213th and 1215th meetings it consideredchapter I, and also chapter II, sections 1 to 3 of thethird report by the Special Rapporteur, and referred tothe Drafting Committee the articles contained in thesesections. At its 1225th and 1226th meetings it consideredthe report of the Drafting Committee with the draftarticles proposed by that Committee and adopted articles1 to 6 of the draft on first reading.

35. These articles and the commentaries thereto, asadopted by the Commission, are reproduced in the presentchapter 30 for the information of the General Assembly.The Commission wishes to draw attention to the factthat these articles are only the first provisions of thedraft on State responsibility which it is preparing, thebasic structure of which is outlined below.31 With theadoption of articles 1 to 4, the first reading of chapter I("General principles") of the draft is now completed.With regard to chapter II ("The act of the State accordingto international law"), articles 5 and 6, which are included

2e Yearbook... 1972, vol. II, document A/CN.4 /264 andA d d . l .

27 (Yearbook ... 1971, vol . I I (Par t One) , pp . 344-346, documentA/8410 /Rev . l , chap . I l l , sect. C ) ; Yearbook... 1972, vol. I I ,p . 323, documen t A/8710/Rev . I , chap . IV, sect. B .

28 Official Records of the General Assembly, Twenty-sixth Session,Annexes, agenda i tem 88, document A/8537, paras . 137 a n d 138.

89 Ibid., Twenty-seventh Session, Annexes, agenda i tem 85,document A/8892, pa ra . 195.

30 See section B below.31 See paras . 43-51.


in the present report, will be followed by others completingthe provisions concerning the conditions for the attri-bution to the State, as a subject of international law, ofan act which may constitute a source of internationalresponsibility. Since in his third and fourth reports, theSpecial Rapporteur has covered the whole of chapter II,32

the Commission now has all the elements necessary tocomplete the study of this chapter.

2. GENERAL REMARKS CONCERNING THE DRAFTARTICLES 3 3

(a) Form of the draft

36. The final form to be given to the codification ofState responsibility is obviously a question which willhave to be settled later, when the Commission hascompleted the draft. The Commission, in accordancewith the provisions of its statute, will then formulate therecommendation it considers appropriate. Without pre-judging this recommendation, the Commission hasdecided to give to its study on State responsibility theform of a set of draft articles, as expressly recommendedby the General Assembly in resolutions 2780 (XXVI)and 2926 (XXVII). The Commission, too, feels that thepreparation of a set of draft articles is the most effectivemethod of discerning and developing rules of internationallaw concerning State responsibility. The articles nowbeing prepared are drafted in a form which will permittheir being used as a basis for concluding a convention,if that is eventually decided.

(b) Scope of the draft

37. As with other topics it has undertaken to codifyin the past, the Commission intends to limit its study ofinternational responsibility, for the time being, to Stateresponsibility. It does not underrate the importance ofstudying questions relating to the responsibility of subjectsof international law other than States. The overriding needfor clarity in the examination of the topic and the organicnature of the draft, however, clearly make it necessary todefer consideration of these other questions.

38. The draft articles under consideration relate to theresponsibility of States for internationally wrongful acts.The Commission fully recognizes the importance, notonly of questions relating to responsibility for inter-nationally wrongful acts, but also of those concerningliability for possible injurious consequences arising outof the performance of certain lawful activities; especiallythose which because of their nature give rise to certainrisks. The Commission takes the view, however, thatquestions in this latter category should not be dealtwith jointly with those in the former category. Owing

32 See paras . 29-30 above.33 The general considerations which follow are based largely

on the conclusions reached and decisions taken by the Commissionin 1963, during its consideration of the report of the Sub-Committeeon State Responsibility, and in 1969 and 1970, during its consider-ation of the first and second reports by Mr. Ago, Special Rappor teur .They constitute the framework for the present work on the pre-parat ion of a set of draft articles on State responsibility.

to the entirely different basis of the so-called responsibilityfor risk and the different nature of the rules governingit, as well as its content and the forms it may assume, ajoint examination of the two subjects could only makeboth of them more difficult to grasp. Being obliged toaccept the possible risks arising from the exercise of anactivity which is itself lawful, and being obliged to facethe consequences—which are not necessarily limited tocompensation—of the breach of a legal obligation, aretwo different matters. It is only because of the relativepoverty of legal language that the same term is habituallyused to designate both. In the light of these considerationsand in order to avoid any misunderstanding, the Com-mission wishes to emphasize that the expression "Stateresponsibility" which appears in the title of the draftarticles is to be understood as meaning solely "responsi-bility of States for internationally wrongful acts".

39. The limitation of the present draft articles to theresponsibility of States for internationally wrongful actsshould not, of course, prevent the Commission fromundertaking, at the appropriate time, a study of that otherform of responsibility, which is the protection againstthe hazards associated with certain activities that are notprohibited by international law. What the Commissionshould not do is to deal in one and the same draft withtwo matters which, though possessing certain commonfeatures and characteristics, are quite distinct. If it isthought desirable—and views to this effect have alreadybeen expressed in the past both in the International LawCommission and in the Sixth Committee of the GeneralAssembly—the International Law Commission canundertake the study of the so-called responsibility forrisk after its study on responsibility for wrongful actshas been completed, or it can do so simultaneously butseparately. It is for reasons of this kind that the Com-mission considered that it was particularly necessary toadopt, for the definition of the principle stated in article 1of the present draft, a formulation which, while indicatingthat the internationally wrongful act is a source ofinternational responsibility, does not lend itself to aninterpretation which might automatically exclude theexistence of another possible source of "responsibility".

40. International responsibility bears some very differentaspects from the other topics of which the Commissionhas hitherto undertaken the codification. In its previousdrafts, the Commission has generally concentrated ondefining the rules of international law which, in one oranother sector of inter-State relations, impose specificobligations on States, and may, in a certain sense, betermed "primary". In dealing with the topic of responsi-bility, on the other hand, the Commission is undertakingto define other rules, which, in contradistinction to thosementioned above, may be described as "secondary"inasmuch as they are concerned with determining thelegal consequences of failure to fulfil obligations estab-lished by the "primary" rules. In preparing the presentdraft, therefore, the Commission intends to concentrateon determining the rules which govern responsibility,maintaining a strict distinction between this task andthat of defining the rules which impose on States obli-gations the violation of which may be a source of responsi-bility. This strict distinction seemed to the Commission


to be essential if the topic of international responsibilitywas to be placed in its proper perspective and viewedas a whole.

41. In order to be able to assess the gravity of an inter-nationally wrongful act and determine the consequencesattributable to that act, it is doubtless necessary toconsider the different categories of obligations of Statesunder international law and to establish a distinctionbetween those obligations according to their importanceto the international community (particularly in regardto the maintenance of peace). This is a matter which willbe referred to at the appropriate time. But it must not beallowed to obscure the essential fact that it is one thingto define a rule and the obligation it imposes, and anotherto determine whether there has been a breach of thatobligation and what should be the consequences of thebreach. Only the second aspect comes within the sphereof responsibility proper; to encourage any confusion onthis point would be to raise an obstacle which mightonce again frustrate any hope of successful codification.That is clear from past experience.

42. In the present draft articles, the Commission isproposing to codify the rules governing the responsibilityof States for internationally wrongful acts in general, andnot only in regard to certain particular sectors such asresponsibility for acts causing injury to the person orproperty of aliens. The international responsibility of theState is a situation which results not just from the breachof certain specific international obligations, but from thebreach of any international obligation, whether establishedby the rules governing one particular matter or by thosegoverning another matter. The draft articles accordinglydeal with the general rules of the international responsi-bility of the State for internationally wrongful acts, thatis to say, the rules which govern all the new legal relation-ships which may follow from an internationally wrongfulact of a State, regardless of the particular sector to whichthe rule violated by the act may belong.

(c) Structure of the draft

43. In broad outline, and subject to any decisions whichthe Commission may take later, the structure of theproposed draft articles corresponds to the plan forstudying the international responsibility of States adoptedby the Commission at earlier sessions on the basis of theproposals of the Special Rapporteur. The preparationof the draft will therefore comprise two distinct mainphases. Speaking generally, the first will deal with theorigin of international responsibility, and the secondwith the content of the responsibility. More precisely,the first will determine on the basis of what facts andin what circumstances there exists on the part of a Statean internationally wrongful act which, as such, is thesource of international responsibility. The second willdetermine the consequences attached by internationallaw to an internationally wrongful act in the variouscases, in order to derive therefrom a definition of thecontent, form and degree of the international responsi-bility. Once these two essential tasks have been accom-plished, the Commission may possibly decide whethera third should be added, namely, to consider certain

problems concerning what has been termed the "imple-mentation" ("mise en ceuvre") of the internationalresponsibility of the State, and questions concerning thesettlement of disputes arising out of the application of therules relating to responsibility.44. Within this general framework, the first task beforepreparing a set of draft articles to cover the question ofthe responsibility of the State for internationally wrongfulacts—a task with an apparently limited objective butsingularly delicate because of the many possible implica-tions—is to formulate the basic general principles. Oncethese principles have been established, the next step willbe to deal with all the questions relating to the subjectiveelement of the internationally wrongful act, that is to say,questions concerning the possibility of attributing par-ticular conduct (act or omission) to the State as subjectof international law, and hence of considering thisconduct as an act of the State in international law.It will then be necessary to solve the problems whicharise in regard to the objective element of the inter-nationally wrongful act, in other words, to establish inwhat circumstances the conduct attributed to the Statemust be considered as constituting a breach of an inter-national legal obligation. In this way it will be possibleto bring together the conditions for an act of the Stateto be characterized as an internationally wrongful actgiving rise, as such, to State responsibility at the inter-State level. This will be followed by a consideration ofthe questions which arise in regard to the various cir-cumstances whose existence may possibly exclude anywrongfulness of the conduct attributed to the State.It will then be possible to pass on to the second phaseof the work, that relating to the content, forms anddegrees of international responsibility.

45. In the light of the foregoing considerations, chapter Iof the draft articles is devoted to "general principles".It contains, first, a definition of the fundamental principleattaching responsibility to every internationally wrongfulact of the State (article 1). Next, it states the principle,closely linked to the first, that every State is capable ofbeing considered, according to international law, as havingcommitted an internationally wrongful act involving itsinternational responsibility (article 2). This is followedlogically by the principle which states the two elements,subjective and objective, for the existence of a wrongfulact of the State according to international law (article 3).The chapter ends with the definition of a fourth generalprinciple—namely, the principle of the irrelevance of themunicipal law of a State to the characterization of anact by that State as internationally wrongful (article 4).The text of these provisions was adopted provisionallyduring the present session. The Commission has thuscompleted, on first reading, the determination of thebasic general principles of the draft and their formulation(for the text of the articles and the commentaries thereto,see section B of the present chapter).

46. Chapter II of the draft ("The 'act of the State'according to internationa law") is devoted to the sub-jective element of the internationally wrongful act and,therefore, to the determination of the conditions in whicha particular act must be considered as an "act of theState" according to international law. After an intro-


ductory commentary containing preliminary considerationsdesigned to take into account certain theoretical diffi-culties and to assert in any case the autonomy of inter-national law in this matter, the chapter will contain aseries of rules in the form of articles. These rules willdeal, first, with the question of establishing what personsmay be the authors of conduct which may be consideredas an act of the State according to international law. Firstwill come the principal category, State organs—those socharacterized according to the internal law of the State.The Commission will then examine whether otherconduct whose authors come within certain specificcategories but do not, strictly speaking, belong to aState organ, may also be considered as an act of theState according to international law. Secondly, it will benecessary to decide within this general context whetherconduct falling under all these different categories, incertain particular conditions should or should not beattributed to the State according to international law.Thirdly, the analysis will conclude on a negative noteby stating the rules which indicate the categories ofconduct for which attribution to the State is excluded,while examining what may be the international situationof the State in relation to such conduct.

47. During the present session, the Commission con-sidered the introduction to chapter II and the first twoarticles of the chapter, which thus relate only to a part(acts of organs of the State) of the first group of questionsmentioned. The first article of the chapter (article 5)defines the rule which, in this sphere, constitutes thestarting point—the rule that an act or omission may betaken into consideration for the purposes of attributionto the State as an internationally wrongful act if it hasbeen committed by an organ of the State, that is to say,by an organ possessing that status according to theinternal legal order of the State and acting in that capacityin the case in question. As a corollary to this rule, thesecond article of the chapter (article 6) states that forpurposes of attribution, it is immaterial whether theorgan in question is part of any of the main branchesof the State structure, whether its functions concerninternational relations or are of a purely internal charac-ter, or whether it holds a superior or subordinate positionin the organization of the State (for the text of thesetwo articles and the commentaries thereto, as also forthe introductory commentary, see section B of thischapter).

48. The Commission will continue its study of thosequestions which come within the framework of chapter IIof the draft on the basis of the relevant sections, whichit has not yet considered, of the Special Rapporteur'sthird and fourth reports, and will resume from the pointwhere it left off at the present session, which means thatit will begin by examining first chapter II, section 4,which appears in the Special Rapporteur's third report.This section deals with the question whether or not it ispossible to take into account, for the purposes of attribu-tion to the State as a subject of international law, theconduct of organs not of the State itself but of separatepublic institutions—autonomous national public institu-tions or local public authorities (States members of afederal State, cantons, regions, departments, municipal-

ities, autonomous administrations of certain territoriesor of dependent territories, and so on). Section 5 dealswith the possibility of considering as attributable to theState—again with a view to establishing its internationalresponsibility—the acts of individuals or groups which,although not formally having the status of organs, havein fact acted in that capacity (de facto organs, Stateauxiliaries, private individuals who occasionally performpublic functions, and so on). Lastly, section 6 discussesthe question of the possibility of attributing to a Statethe act or omission of an organ placed at the disposalof that State by another State or by an internationalorganization.49. In chapter II, section 7, contained in his fourthreport, the Special Rapporteur passes on to the secondgroup of questions which arise in the context of chapter 11of the draft. This section deal essentially with the highlycontroversial question of the attribution to the Stateof the conduct of an organ which has exceeded itsauthority or acted contrary either to specific instructionsor to the general requirements of the exercise of itsactivity. An effort is also made to clarify the situationwhich may arise when a person has continued to act asan organ when, in fact, even if not formally, he has lostthat status.50. The third group of questions in chapter II of thedraft is also dealt with by the Special Rapporteur in hisfourth report. In principle, for the purposes of Stateresponsibility, section 8 excludes the possibility ofattributing to the State, under international law, theconduct of private individuals who have acted as such,and it then examines the circumstances in which theexistence of an internationally wrongful act by the Statecan nevertheless be contemplated in connexion withcertain conduct of private individuals. Section 9 considerswhether it is possible to attribute to the State acts oromissions of subjects of international law (States, inter-national organizations, insurrectional movements possess-ing international personality) acting in its territory, orwhether these acts or omissions should be attributedonly to the other subject of international law in question.In the same context, the Special Rapporteur deals insection 10 (article 13) with the specific question of theretroactive attribution to a State of the acts of organsof a successful insurrectional movement.

51. At this point, the examination of the requirementsfor the characterization of specific conduct as an "actof the State" may be considered completed. It will thenbe necessary to consider, in another chapter of the draftdevoted to "breach of obligation" in international law,the various aspects of what has been called the objectiveelement of the internationally wrongful act, the breachof an international obligation. These questions will bethe subject of further reports by the Special Rapporteur.It will first be necessary to examine whether the sourceof the international legal obligation (customary, treatyor other) has any implication when it comes to deter-mining whether the breach is an internationally wrongfulact. Next will be considered the problems relating to thedetermination of distinct categories of breaches of inter-national obligations. An essential question which willarise at this point is whether in these days it is necesary


to recognize the existence of a distinction based on theimportance to the international community of the obli-gation involved, and accordingly whether contemporaryinternational law should acknowledge a distinct and moreserious category of internationally wrongful acts, whichmight perhaps be described as international crimes.Another question which will arise in this same contextwill be that of the distinction to be made between thebreach of an obligation requiring specific conduct onthe part of the State, and the breach of an obligationrequiring only that it ensure that a particular event doesnot occur (wrongful acts of conduct and wrongful actsof event). An effort will be made later to deal withthe different characteristics of the breach of obligationaccording as the obligation involved is one of thosewhich specifically require a certain act or omission oris one those which require generally that a certainresult shall be ensured, without specifying the means bywhich the result is to be obtained. Another matter whichwill be examined in this context is the force of therule that local remedies must be exhausted before thebreach of certain obligations relating to the treatmentof aliens can be established. Next will be examined thedifferent questions relating to the determination oftempus commissi delicti, both in relation to the requirementthat the obligation whose breach is complained of shallhave been in force at the time the conduct resulting inthe breach took place, and in relation to cases wherethe act of the States takes the form of a continuing situa-tion or the sum of a series of distinct and successiveacts of conduct. Once these points have been settled (andthe above list is not intended to be either exhaustive orindicative of a final order of priority), there will stillremain some special problems to consider: for example,the possibility of attributing an internationally wrongfulact simultaneously to more than one State in respect ofone and the same situation, and the possibility of makinga State responsible, in certain circumstances, for an actcommitted by another State. After that, detailed con-sideration of various circumstances excluding wrong-fulness—-force majeure or act of God, consent of theinjured State, legitimate application of a sanction, self-defence, state of emergency, and so on, as well as possiblemitigating circumstances, will bring to an end the firstphase of the study of State responsibility for inter-nationally wrongful acts. The next step will be to moveon to the second phase, concerning the content, form anddegree of international responsibility.

(d) Method followed in the preparation of the draft

52. The members of the Commission signified theiragreement with the method followed by the SpecialRapporteur in the preparation of his reports, and anumber of representatives in the Sixth Committee of theGeneral Assembly also signified it expressly. The SpecialRapporteur therefore proposes to continue to followthe same method. This method consists in prefacing eachdraft article by a full explanation of the reasoning behinda particular formulation, and the practical and theoreticaldata on which the supporting arguments are based. TheSpecial Rapporteur will continue to indicate the variousquestions which arise in connexion with each of the points

successively considered, and will note the differences ofopinion which have appeared regarding them and theways in which they have in practice been settled ininternational life.

53. The Commission and the Special Rapporteur thusdisplay their preference for an essentially inductivemethod, rather than for deduction from theoreticalpremises, at least whenever considerations of Statepractice and judicial decisions make it possible to followsuch a method for determining the content of the rulesrelating to State responsibility. It must, however, bepointed out once more that the precedents offered bypractice and by judicial decisions are not equally dis-tributed over the different questions, being abundant onsome and relatively scarce on others. It is also necessaryto take due account of a very large number of opinionsof writers. The topic of international responsibility,particularly in some of its aspects, is one of those onwhich a great deal has been written, and these opinionsof writers have inevitably had their effect on judicialdecisions, so that a knowledge of them can be an essentialtool for the interpretation of specific decisions. Moreover,in order to be able to define in clear and simple terms theproblems to be solved, it is sometimes essential to clearthe ground of certain controversies and artificiallyintroduced complications which have become embeddedin doctrinal polemics. At the same time, it is importantto take full account of the various trends, especially themost modern, in order to be able to identify and har-monize the approaches adopted in the different legalsystems, and to pick out from these trends those whichenjoy the support of the majority of writers as comparedwith those which merely represent individual views.

54. In order to simplify matters for the General As-sembly and in view of the method followed by the SpecialRapporteur, the Commission proposes to refer in thecommentaries to the articles not only to diplomaticpractice and international judicial precedents but also tothe opinions of writers. So as not to overburden itsreports to the General Assembly, however, it intendsas far as possible to confine these references to the mostimportant cases and statements of position relatingspecifically to the points in question.

55. The Commission agreed that the topic of inter-national responsibility was one of those where theprogressive development of international law could beparticularly important, especially—as the Special Rap-porteur has shown—with regard both to the distinctionbetween different categories of breaches of internationalobligations and to the content and degree of responsibility.The Commission wishes expressly to state, however,that in its view the relative importance of progressivedevelopment and of the codification of accepted principlescannot result from a pre-established plan. It must emergein concrete terms from the pragmatic solutions adoptedon the various points.

56. The Commission felt that it would be better topostpone until later any decision concerning the desir-ability of prefacing the draft with a definitions articleor with an article indicating what matters would beexcluded from its scope. When solutions to the different


problems have reached a more advanced stage, it willbe easier to see whether or not such preliminary clausesare needed in the general economy of the draft. It isessential to avoid definitions or initial formulationswhich might prejudge solutions to be adopted later.The first part of the draft will be based on a generalnotion of responsibility, that term being taken to meanthe set of new legal relationships to which an inter-nationally wrongful act by a State may give rise in thevarious cases. Later it will be for the Commission tosay whether, for example, such relationships may ariseonly between the State concerned and the State whoseown rights have suffered injury, or also between the Stateconcerned and other subjects of international law, orpossibly even with the international community as awhole. For the time being the Commission will confineitself to explaining, in the commentaries to the articles,the meaning of expressions used, whenever that is necess-ary for an understanding of the provision in question.That has been done, for instance, in the commentary toarticle 1 with regard to the expression "internationallywrongful act", and in the commentary to article 3 withregard to the use of the verb "to attribute".

57. Lastly, the Commission wishes to point out that,while the determination of so-called "primary" rules ofinternational law often involves drafting a great manyvery long articles, responsibility on the other handinvolves relatively few rules which can often be formulatedvery concisely. But it does not follow from conciseformulation that the subject-matter is simple. On thecontrary, every point raises a host of complex questions,all of which must be considered, since they affect theformulation to be adopted. It should come as no surprise,therefore, to find articles relatively few in number andsometimes consisting of only a few lines, followed byextensive commentaries.

B. Draft articles on State responsibility

58. Articles 1 to 6 and the commentaries thereto, asadopted by the Commission at the twenty-fifth sessionon the proposal on the Special Rapporteur, are repro-duced below for the information of the General As-sembly.

CHAPTER I

GENERAL PRINCIPLES

CommentaryChapter I of the draft, which comprises four articles

(articles 1-4) is devoted to certain principles of law whichapply to the draft as a whole and provides the basis onwhich subsequent chapters will be constructed. Afterconsidering several suggestions, the Commission decidedto give this chapter the heading "General principles".The expression "general principles" is used in this contextas meaning rules of the most general character applyingto the draft articles as whole. Other expressions, suchas "fundamental rules" or "basic principles" appear inother chapters of the draft articles as meaning rules ofa less general character but still of fundamental impor-tance. The Commission deemed it unnecessary to addthe words "of State responsibility" after the expression

"general principles". The title of the draft articles showsthat the reference can only be to State responsibility.

Article 1. Responsibility of a State for itsinternationally wrongful acts

Every internationally wrongful act of a State entailsthe international responsibility of that State.

Commentary

(1) The principle that any conduct of a State whichinternational law characterizes as a wrongful act entailsthe responsibility of that State in international law isone of the principles most strongly upheld by Statepractice and judicial decisions and most deeply rootedin the doctrine of international law.

(2) The Permanent Court of International Justice appliedthis principle on 17 August 1923 in its judgment, No. 1,in the S.S. "Wimbledon" case,34 and in its judgmentsin the Case concerning the factory at Chorzow.35 In 1938,in its judgment in the Phosphates in Morocco case, thePermanent Court held that when a State was guilty ofan internationally wrongful act against another Stateinternational responsibility was established "immediatelyas between the two States".36 The International Courtof Justice, too, applied the principle in its judgmentin the Corfu Channel case,37 in its Advisory Opinion of11 April 1949 on Reparation for Injuries Suffered in theService of the United Nations38 and in its AdvisoryOpinion of 18 July 1950 on the Interpretation of peacetreaties with Bulgaria, Hungary and Romania (SecondPhase), in which it stated that "refusal to fulfil a treatyobligation involves international responsibility".89 Arbi-tral awards have repeatedly affirmed the principle setforth in the present article. We need only recall theawards rendered in 1901 concerning Claims of Italiansubjects resident in Peru (Reclamations des sujets italiensresidant au Perou)40 in 1931 in the Dickson Car WheelCompany case 41 by the Mexico-United States GeneralClaims Commission set up under the Convention of8 September 1923, and in the International FisheriesCompany case;42 in 1925 by Max Huber in the British

34 Case of the S.S. Wimbledon, P.C.I.J., Series A, N o . l , p . 15.36 Case concerning the factory at Chorzow (Jurisdiction), Judg-

ment N o . 8 of 26 July 1927, P.C.I.J. , Series A, No.9 , p . 21 and idem.(Merits), Judgment N o . 13 of 13 September 1927, P.C.I.J. , SeriesA, N o . 17, p . 29.

36 Phosphates in Morocco case (Preliminary Objections) 14 June1938, P.C.I.J. , Series A/B, N o . 74, p . 28.

37 Corfu Channel case (Merits), Judgment of 9 April 1949,I.C.J. Reports, 1949, p . 23.

33 I.C.J. Reports 1949, p . 184.89 I.C.J. Reports 1950, p . 228.40 Seven of these awards reiterate that "a universally recognized

principle of international law states that the State is responsible forthe violations of the law of nations committed by its a g e n t s . . . "(United Nat ions, Reports of International Arbitral Awards, vol. XV(United Nat ions publication, Sales N o . 66.V.3), pp . 399, 401, 404,407, 408, 409 and 411). (Translation by the United Nat ions Secre-tariat.)

41 Ibid., vol. IV (United Nat ions publication, Sales N o . 1951.V.1),p . 678.

42 Ibid., p . 701.


claims in the Spanish zone of Morocco case (Reclamationsbritanniques dans la zone espagnole du Maroc);43 and in1953 in the Armstrong Cork Company case44 by the Italian-United States Conciliation Commission set up underarticle 83 of the Treaty of Peace of 10 February 1947.

(3) With regard to State practice, the opinion of Statesis most significantly expressed by the positions adoptedby Governments in connexion with the attempt by theLeague of Nations during the period 1924-1930 tocodify the topic of State responsibility, limited to thecase of damage to the person or property of aliens.Belief in the existence of the general rule that responsi-bility attaches to any internationally wrongful act by aState was clearly expressed in Point II of the request forinformation addressed to Governments by the PreparatoryCommittee for the 1930 Hague Conference for the Codi-fication of International Law.45 The same opinion isdiscernible both from the replies of Governments 48 andfrom the positions taken by representatives at the Con-ference.47 At the end of the discussion, the Third Com-mittee of the Conference unanimously approved article 1,which laid down that

International responsibility is incurred by a State if there is anyfailure on the part of its organs to carry out the internationalobligations of the State which causes damage to the person orproperty of a foreigner on the territory of the State.48

(4) Despite the diversity of the arguments they putforward to justify this fundamental principle,49 all the

43 According to the arbitrator, it is an indisputable principlethat "responsibility is the necessary corollary of rights. All inter-national rights entail international responsibil i ty. . ." (ibid., vol. I I ,(United Nations publication, Sales No . 1949.V.I), p . 641). (Transla-tion by the United Nations Secretariat.)

44 According to the Conciliation Commission, no State "mayescape the responsibility arising out of the exercise of an illicitaction from the viewpoint of the general principles of internationallaw" (United Nations, Reports of International Arbitral Awards,vol. XIV (United Nations publication, Sales No . 65.V.4), p . 163).

45 League of Nations, Conference for the Codification of Inter-national Law, Bases of Discussion for the Conference drawn up bythe Preparatory Committee, vol. I l l : Responsibility of States forDamage caused in their Territory to the Person or Property ofForeigners (document C.75.M.69.1929.V), p . 20.

46 Ibid., p . 24; and Supplement to Volume HI (document 75 (a).M.69 (a). 1929.V), pp. 2 and 6.

47 League of Na t ions , Acts of the Conference for the Codificationof International Law, vol. IV, Minutes of the Third Committee(document C.351 (c). M.145 (c). 1930.V), p p . 18 et seq.

18 Yearbook... 1956, vol. I I , p . 225, document A/CN.4 /96 , annex 3.49 Some writers claim to have found this justification in the

actual existence of an internat ional legal order and in the legalna tu re of the obligations it imposes on its subjects (sec D . Anzilot t i ,Teoria generate della responsabilitd dello Stato nel diritto internazio-nale (Florence, Lumachi, 1902), reprinted in Scritti di diritto inter-nazionale pubblico (Padua, CEDAM, 1956), vol. 1, pp. 25 and 62;P. Schoen, "Die volkerrechtliche Haftung der Staaten aus unerlaub-ten Handlungen", Zeitschrift fiXr Volkerrecht (Breslau, 1917),Supplement 2 to vol. X, p. 16; K. Strupp, "Das volkerrechtlicheDelikt", Handbuch des Volkerrechts (Stuttgart, Kohlhamtner, 1920),vol. Ill, part one, pp. 4 et seq.). Others prefers to think that, in theinternational order, State responsibility derives from the factthat States mutually recognize each other as sovereign. The ruleestablishing responsibility would then be the necessary corollaryto the principle of the equality of States (see for example, Ch. deVisscher, "La responsabilite des Etats", Bibliotheca Visseriana(Leyden, Brill, 1924), vol. II, p. 90; C. Eagleton, The Responsibilityof States in International Law (New York, New York UniversityPress, 1928), pp. 5-6.

writers recognize that any internationally wrongful actof a State entails the international responsibility of thatState, in other words, that it gives rise, as far as thatState is concerned, to new international legal relationscharacterized by subjective legal situations distinct fromthose which existed before the act took place. The factthat the legal relations between States established as aresult of an internationally wrongful act are new relationshas been pointed out both by jurists whose writings arenow legal classics,50 and by authors of more recentworks.51

(5) The Commission is fully aware that, notwith-standing the unanimous recognition of the generalprinciple which, under the name of international responsi-bility, links the emergence of new legal relations withthe commission by a State of an internationally wrong-ful act, there are serious differences of opinion over thedefinition of the legal relationships created by an inter-nationally wrongful act and the legal situations resultingfrom these relationships. One approach which may beregarded as traditional in international law writings—it is supported by Anzilotti, Ch. de Visscher, Eagle-ton, and Strupp, among others—describes the legalrelations deriving from an internationally wrongful actin one single form: that of a binding bilateral relation-ship established between the offending State and theinjured State, in which the obligation of the formerState to make reparation—in the broad sense of theterm, of course—is set against the subjective right ofthe latter State to require the reparation. This viewdoes not admit of the possibility of a sanction in theproper sense of the term—i.e. having a punitive pur-pose—which the injured State itself, or possibly athird party, would have the faculty to impose uponthe offending State. Another view, whose most illustrioussupporters are Kelsen and Guggenheim, leads to aposition almost diametrically opposed to that justdescribed. It, too, upholds, though in an entirely differentway, the idea of a single legal relationship arising fromthe wrongful act and thus falling within the conceptof responsibility. Starting from the idea that the legalorder is a coercive order, this view sees the author-ization accorded to the injured State to apply coercionto the offending State by way of sanction precisely asthe sole legal consequence flowing directly from thewrongful act. Accordingly, general international lawwould not regard the wrongful act as creating anybinding relationship between the offending State andthe injured State. The obligation to make reparationwould be nothing more than a subsidiary duty which inmunicipal law the law itself, and in international lawan agreement, interposes between the wrongful act and

50 D . Anzilotti, Corso di diritto internazionale, 4th ed. (Padua,C E D A M , 1955), vol. I, p . 385.

51 W. Wengler, Volkerrecht (Berlin, Springer, 1964), vol. I,p . 499; G. I. Tunkin, Teoria mezhdunarodnogo prava (Moscow,Mezhduranovnie otoshenia, 1970), p . 470; E. Jimenez de Arechaga,"International Responsibility", Manual of Public International Law,Sarensen ed. (London, Macmillan, 1968), p . 533; see also Instituteof the State and of Law of the USSR Academy of Sciences, Kursmezhdunarodnogo prava, F . I. Kozhevnikov et a/., eds. (Moscow,Nauka, 1969), vol. V, Osnovnye instituty y otrasli sovremennogomezhdunarodnogo prava, p. 426.


the application of coercion. Lastly, there is a thirdview, upheld by, among others, Lauterpacht, Eusta-thiades, Verdross, Ago, and the Soviet authors of theKurs mezhdunarodnogo prava, according to which theconsequences of an internationally wrongful act cannotbe limited simply either to "reparation" or to a "sanc-tion". In international law, as in any system of law,the wrongful act may, according to that view, giverise, not to just one type of legal relationship, but totwo types of relationship, each characterized by adifferent legal situation of the subject involved. Theselegal consequences amount, according to the case,either to giving the subject of international law whoserights have been infringed by the wrongful act the rightto claim reparation—again in the broad sense of theterm—from the author of the act, or to giving thatsame subject, or possibly a third subject, the facultyto impose a sanction on the subject which has engagedin wrongful conduct. The term "sanction" is used hereto describe a measure which, although not necessarilyinvolving the use of force, is characterized—at leastin part—by the fact that its purpose is to inflict punish-ment. That is not the same purpose as coercion tosecure the fulfilment of the obligation, or the restorationof the right infringed, or reparation, or compensation.

(6) The Commission noted that the opinions of writersalso differ on another point with regard to the definitionof the new legal relations which arise from an inter-nationally wrongful act of a State; this is the questionwhat subjects are involved in these relations. Accordingto one view, which may be regarded as the traditionalview, an internationally wrongful act committed by aState against another State gives rise to new legal relationsbetween those two States exclusively. In other words,only the injured State may enforce the responsibilityof the State which has committed the wrongful act.Some internationalists, on the other hand, hold todaythat in addition to these relations others may be createdin certain cases either between the offending State andan international organization or between the offendingState and other States.52

(7) Lastly, the Commission did not fail to note thatthe unanimity found in State practice, in judicial decisionsand in the international legal literature as regards theexistence of the principle that any internationally wrong-ful act of a State involves, in internatonal law, theresponsibility of that State, relates only to the normalsituation produced as the result of a wrongful act. Forthe accepted view expressed in many scientific works,as well as in a number of international decisions andstatements of position by Governments, is that there

52 In connexion with this last point, attention must be drawnto the growing tendency of a group of writers to single out, withinthe general category of internationally wrongful acts, certain kindsof acts which are so grave and so injurious, not only to one Statebut to all States, that a State committing them ought to be auto-matically held responsible to all States. It is tempting to relatethis view to the recent affirmation of the International Court ofJustice, in its Judgment of 5 February 1970 in the case concerningthe Barcelona Traction, Light and Power Company, Limited, thatthere are certain international obligations of States which areobligations erga omnes, that is to say, obligations to the internationalcommunity as a whole (I.C.J. Reports 1970, p. 32).

are exceptional cases in which this responsibility devolves,not upon the State which committed the wrongfulact, but on another State. These cases—in which thereference is usually to indirect responsibility or responsi-bility for the act of another—occur particularly whenthe State is placed in a position, in relation to anotherState, in which it controls the actions and limits thefreedom of that State.

(8) The differences of opinion mentioned in para-graphs (5) to (7) of the commentary to this article,and the questions to which they relate, will certainlyhave to be considered and settled at the appropriatetime. But, in the Commission's view, there is no needto take a position on them in defining the general basicrule of the draft. On the contrary, the Commissionbelieves that the definition of that rule should be ascomprehensive as possible; it should state a principlewhich is capable of attracting unanimous assent andis, above all, really a basic principle, that is to say,is capable of encompassing in itself all the variouspossible cases. In formulating this principle, therefore,it would be wrong to distinguish between variouscategories of wrongful acts and the effects of theirdifferent character on the new relationships which areestablished as a result of those acts; it would be equallywrong to list possible exceptions of which the principlemight admit in marginal situations. Other articles ofthe draft will deal with these questions. They have beenmentioned in this commentary only in order to assurethe reader that the Commission had them quite clearlyin mind when it chose the wording for article 1 of thedraft. For what that article must carefully avoid is,precisely, prejudging in any way the solution to problemswhich will arise later.

(9) First, therefore the Commission took the viewthat the basic rule should not be encumbered withany theoretical "justification" of the existence of thefundamental principle. Its existence is fully proved byan examination of the facts of international life; thereis no need to seek confirmation by deduction fromother principles, such as the "legal" character of theinternational order or the sovereign equality of States.

(10) Secondly, the Commission rejected any idea ofmentioning, in article 1, either the various forms whichinternational State responsibility may take, or thesubjects which may be involved in the attribution ofresponsibility. But it must be clear that, by using theterm "international responsibility" in article 1, theCommission intended to cover every kind of new rela-tions which may arise, in international law, from theinternationally wrongful act of a state, whether suchrelations are limited to the offending State and thedirectly injured State or extend also to other subjectsof international law, and whether they are centred onthe duty of the guilty State to restore the injured Statein its rights and repair the damage caused, or whetherthey also give the injured State itself or other subjectsof international law the right to impose on the offendingState a sanction admitted by international law. Inother words, the formulation adopted for article 1must be broad enough to cater for all the necessary


developments in the chapter which is to be devotedto the consent and forms of international responsibility.(11) Thirdly, it is clear that the Commission refersin article 1 to the normal situation, which is that theoffending State incurs international responsibility. Mostmembers of the Commission recognized that there maybe special cases in which international responsibilitydevolves upon a State other than the State to whichthe act characterized as internationally wrongful isattributed. These cases, too, will be covered later inthe draft. But in view of their exceptional character,the Commission did not consider that they should betaken into account in formulating the general rule onresponsibility for wrongful acts, since that might detractfrom the basic force of the general principle stated atthe outset.

(12) Fourthly, the Commission felt unable to acceptthe idea of some writers that the rule that any inter-nationally wrongful act of a State involves the inter-national responsibility of that State should allow ofan exception in the case where the wrongful act wascommitted in any of the following circumstances: forcemajenre or act of God, consent of the injured State,legitimate exercise of a sanction, self-defence or emerg-ency. If any of those circumstances were present in aparticular case, that would preclude the internationalresponsibility of the State which had committed thewrongful act. As stated in the introduction to thischapter of the report, the Commission intends to takethese circumstances, and their consequences in differentsituations, specifically into consideration in the chapterto follow that dealing with breach of obligation.58

For the time being, in the Commission's view, it isonly necessary to say that the true effect of the presenceof such circumstances is not, at least in the normalcase, to preclude responsibility that would otherwiseresult from an act wrongful in itself, but rather to pre-clude the characterization of the conduct of the Statein one of those circumstances as wrongful. There istherefore no reason to provide for an exception to therule laid down in this article.

(13) Lastly, the Commission endeavoured to find aformula which would not prejudge the existence of liab-ility for "lawful" acts. It is true that the Commission,as stated in the introduction to this chapter of the report,decided to confine the draft to responsibility arisingfrom wrongful acts;54 but it is no less true that itrecognized that there are cases in which States mayincur "internationally responsibility"—if that is the rightterm—for the harmful consequences of certain activitieswhich are not, at least for the moment, prohibited byinternational law. The growing number of activitieswhich create hazards lends special emphasis to theimportance of this form of "responsibility". The Com-mission accordingly agreed that it was important notto reverse the order of the wording adopted for thearticle. Formulations such as "International responsi-bility results from any internationally wrongful act bya State" or "International responsibility exists whenever

63 See para. 51 above.64 See para. 38 above.

there is an internationally wrongful act by the State"could, in fact, be interpreted to mean that internationalresponsibility results exclusively from a wrongful act.

(14) As for the terminology used in article 1, first,the Commission considered the French term "fait inter-nationalement illicite" to be preferable to "delit" orother similar expressions, which can sometimes take ona special meaning in certain systems of internal law.For the same reason, it decided not to use, in English,such words as "delict", "delinquency" and "tort"; orin Spanish the word "delito". Next, the French term"fait intemationalement illicite" appeared more correctthan "acte intemationalement illicite", primarily for thereason that wrongfulness often results from inaction,and that is hardly indicated by the term "acte" which,etymologically, suggests the idea of action. In addition,particularly from the point of view of legal theory,"fait" would seem to be the obvious choice, becausethe term "acte" should technically be reserved in lawto designate a manifestation of will intended to producethe legal consequences determined by that will, andthat is certainly not the case with wrongful behaviour.For the same reason, the term "hecho internacionalmenteilicito" was adopted in the Spanish text. In the Englishtext, however, it was decided to maintain the expression"internationally wrongful act", since the French word"fait" has no true equivalent in English legal terminologyand the English term "act" does not have the samemeaning as its couterpart in the legal terminology ofLatin countries. Similarly, the adjective "wrongful" wasconsidered preferable to the adjective "illicit". Finally,the term "internationally wrongful act" was preferredto "international wrongful act" from a formal pointof view, even though the two expressions mean sub-stantially the same thing. For the sake of uniformity,the terms "fait illicite international" and "hecho ilicitointemacional" in the French and Spanish texts respectivelywere rejected in favour of "fait intemationalement illi-cite" and "hecho internacionalmente ilicito".

Article 2. Possibility that every State may beheld to have committed an internationally

wrongful act

Every State is subject to the possibility of being held tohave committed an internationally wrongful act entailingits international responsibility.

Commentary

(1) The purpose of article 1 of this draft is to establishthat any State which commits an act characterized asinternationally wrongful incurs international responsi-bility. The purpose of article 2 is to supplement theprovision in the preceding article by stating further thatany State whatever which engages in certain conductwill find that conduct characterized as an "internationallywrongful act" if it meets the conditions required forsuch characterization. In other words, this provision isintended to ensure that a State shall not escape itsinternational responsibility by claiming that the rulesaccording to which conduct must be considered inter-


nationally wrongful if committed by any State do notapply to it.

(2) The concept referred to in article 2 correspondsin a way to that often termed in internal law "delictualcapacity" or "capacity to commit wrongful acts". Inmany national legal systems, there are subjects whichdo not have this "capacity"—minors, for example. Inother words, there are subjects which the legal orderdoes not regard as having committed a "wrongful"act and which it therefore does not hold responsible,even when their conduct exhibits the features normallyrequired for it to be characterized as wrongful, andthus even though the same conduct, if engaged in byanother subject (an adult, for example), would havebeen regarded as an act entailing that subject's responsi-bility. There is no provision, however, for similar situa-tions in international law. In particular, there is nopossible parallel between the status of a newly constitutedState in international law and that of a minor or ingeneral of any person not possessing delictual capacityin internal law. States establish themselves as equalmembers of the international community as soon asthey achieve an independent and sovereign existence.If it is the prerogative of sovereignty to be able to assertits rights, the counterpart of that prerogative is the dutyto discharge its obligations. The principle that no Statewhich by its conduct has committed a breach of aninternational obligation can escape the consequence,namely, to be regarded as having committed an inter-nationally wrongful act which entails its responsibility,is the corollary of the principle of the sovereign equalityof States.

(3) State practice and international judicial decisionsleave no doubt about the existence of this principle,even though it has not generally been expressly statedin international awards or diplomatic correspondence.It can be said that writers on international law alsoare explicity or implicity in agreement on this point.55

(4) The principle having been established, the questionarose whether there should or should not be anyexceptions to it. While it was recognized that no Statecan claim that the rules under which its conduct couldbe characterized as internationally wrongful are in nocase applicable to itself, it was suggested that theremight nevertheless be special situations in which aState could in fact, as an exception, escape the applicationof those rules.

66 The idea of "capacity to commit internationally wrongfulacts" has been elaborated principally in German and Italian legalthinking (see, respectively, I. von Munch, Das volkerrechtlicheDelikt in der modernen Entv/ickhmg der Volkerreehtsgemeinschaft(Frankfurt am Main, Keppler, 1963), pp. 130-131; and R. Ago,"Le delit international", Recueil des cours de I'Academie de droitinternational de La Have, 1939-111 (Paris, Sirey, 1947), t. 68, pp. 453et seq.). Among lawyers representing other legal systems, seeL. Oppenheim, International Law: A Treatise, 8th ed. (H. Lauter-pacht ed.) (London, Longmans Green, 1955), vol. I, pp. 339-340;A. Ross, A Textbook of International Law (London, LongmansGreen, 1947), pp. 259-260; B. Cheng, General Principles of Law asApplied by International Courts and Tribunals (London, Stevens,1953), pp. 181-182. These writers are agreed in expressly statingthat all States have "delictual capacity".

(5) The first special situation considered was that ofStates members of a federal union, where such Stateshave retained, within limits, a measure of internationalpersonality.66 It was with reference to such cases thatthe question was raised whether they should perhapsbe recognized as constituting an exception to the prin-ciple formulated in article 2. It was argued that inter-national practice seemed to indicate that even when itwas the member State which, within the limits of itsinternational personality, had assumed an obligationtowards another State, it was still the federal State andnot the member State which bore the responsibility fora breach of that obligation by the member State. Withoutwishing to take a position at the present stage on thevalidity of this argument, the Commission noted that,even if it proved to be well-founded, the breach of aninternational obligation committed by the memberState possessing international personality would stillconstitute an internationally wrongful act by that memberState. There would thus be no exception to the principlethat every State is subject to the possibility of beingheld to have committed an internationally wrongfulact.

(6) Another special situation considered was thatwhere, on the territory of a given State, one or moreother subjects of international law act in place of thatState. The one or more other subjects of internationallaw may sometimes, to a greater or lesser extent, entrustto elements of their own organization certain activitiesnormally carried out by organs of the territorial State.The organs of the territorial State which normally ful-fil certain international obligations of the State are nolonger present or at all events are prevented fromcarrying out some of their duties.57 In other words,the territorial State is shorn of a part of its organization,a part which had previously provided the physicalmeans of fulfilling certain international obligations aswell as of violating them. Here the Commission agreedthat if in such circumstances the organs of the foreignState which had replaced those of the territorial Staterender themselves guilty of an act or omission in breachof an obligation of the territorial State, that act oromission could conceivably constitute an internationallywrongful act of the foreign State, but could not constitutea wrongful act of the territorial State. The Commission

66 If the States members of a federal union have no internationalpersonality, the question considered here obviously cannot arise.No t being subjects of international law, these "States" manifestlycannot be regarded as the authors of internationally wrongful acts.The only problem to be resolved in this case is that of attributingto the federal State, as an act of that State, the conduct of organsof the member State; this problem will be dealt with in chapter I Iof the present draft.

67 This situation may occur when there is a legal relationship ofdependence, such as a protectorate; but it may also occur in othercases, particularly a military occupation. The situation that ariseswhen the organization of the "suzerain" State or the occupyingState replaces the organization of the dependent or occupied Statein certain sectors should not be confused with that which mayoccur when the organs of the dependent State remain in existenceand retain their fonctions, but act only under the control of thesuzerain State. In such a case, as has been pointed out , the resultmay be that one State is responsible for the internationally wrongfulact of another State.


pointed out that, even in this case, there was no reallimitation of the principle stated in article 2. If therewas no internationally wrongful act of the territorialState, it was because, under the rules for determiningwhat is an act of the State, the conduct in questioncould not be attributed to the territorial State.

(7) The Commission also recognized that the existenceof circumstances which might exclude wrongfulness,already mentioned in the commentary to article 1, didnot affect the principle stated in article 2 and couldnot be deemed to constitute an exception to that prin-ciple. When a State engages in certain conduct in cir-cumstances such as self-defence, force majeure, or thelegitimate application of a sanction, its conduct doesnot constitute an internationally wrongful act because,in those circumstances, the State is not required tocomply -with the international obligation which it wouldnormally have to respect, so that there cannot be abreach of that obligation. Consequently, one of theessential conditions for the existence of an internationallywrongful act is absent. This case certainly cannot beclaimed as an exception to the rule that no State canescape the possibility of having its conduct charac-terized as internationally wrongful if—and this is thepoint—its conduct meets all the conditions. Still lesscould be possible existence of circumstances whichwould have the effect, not of precluding any wrong-fulness of the act of the State but of diminishing theresponsibility of the State,58 be put forward as anexception to this rule. When, in any particular case,such circumstances arise, the existence of an inter-nationally wrongful act by the State is not an issue.It is the consequences attaching to the act that maybe affected by such circumstances, and that is whythis question will be dealt with when the extent ofresponsibility comes to be considered.

(8) Consequently, the members of the Commissionconcluded not only that the principle laid down inarticle 2 is unchallenged, but that there is in realityno exception to it. Since the principle may be describedas "obvious" and one that "goes without saying", doubtswere expressed as to the need to include in the conventiona rule stating such a principle. It was suggested thatit was sufficient that the principle should be explainedin specialized works on international law. The opinionthat prevailed, however, was that it was not soundpractice in codification to refrain from stating a prin-ciple simply because it was "too obvious". It is notuncommon for a State to deny the existence of an"obvious" rule, or while recognizing its existence, toaffirm that this "obvious" rule admits of exceptionswhich make it inapplicable to that State. The Commissionaccordingly considered that it was better to include therule in the draft, even if it did not seem absolutelyindispensable, than to leave any possible doubt as tothe applicability to all States without exception of ruleswhereby an act of a State is characterized as internation-

ally wrongful and as such entailing the internationalresponsibility of that State.

(9) With regard to the choice of wording to expressthe principle in question, some members of the Com-mission argued that the purpose of the article wasessentially to prevent a State, by invoking a particularsubjective condition, from claiming to escape its inter-national responsibility. They therefore considered itdesirable to emphasize that, in international law, thereis no subjective condition which could justify a claimof this kind, and also that in international law, allStates are equal as regards the possibility of their inter-national responsibility. They proposed a formula ex-pressing the idea that every State is responsible forits internationally wrongful acts. Most members of theCommission, however, were of the opinion that sucha formula would not provide an effective safeguardagainst the possibility of a State attempting to ecapeits international responsibility by invoking a particularsubjective condition. A State could always contendthat the existence of such a condition ruled out thepossibility of characterizing its conduct as internationallywrongful, and consequently of holding it responsibleunder articles 1 and 2. Furthermore, the suggestedformula would in reality merely repeat in another formthe principle already laid down in article 1 that anyinternationally wrongful conduct of a State, whateverState it may be, entails the international responsibilityof the State. What the principle to be laid down inarticle 2 must indicate is that whatever State it is whichhas acted in a particular way, the conduct of the Statewill be characterized as an internationally wrongful actif it meets the conditions laid down for such charac-terization in these articles. It is the combined effectof this principle and of the principle stated in article 1that precludes the possibility of any State escapingits international responsibility by invoking an allegedspecial subjective condition. Thus, agreement was reachedin the Commission on a formula which expresses theequality of States in respect both of the possibility ofbeing considered as having committed an internationallywrongful act and of the possibility of being held respon-sible for it.

(10) Still on the subject of terminology, the Com-mission considered it preferable not to use the expression"capacity to commit wrongful acts", although that isthe expression generally used by writers to express theunderlying notion in article 2. If the term "capacity"were used, there would be a temptation to draw ananalogy between the principle that in international lawevery State has the capacity to commit wrongful actsand the rule in article 6 of the Vienna Convention onthe Law of Treaties, which provides that "Every Statepossesses capacity to conclude treaties".89 But capacityto conclude treaties and capacity to commit inter-nationally wrongful acts are two entirely separatenotions. Capacity to conclude treaties, which is the

58 Such circumstances might be present, for example, in thecase of a State which has just become independent or which hasbeen ravaged by war or civil war or has suffered grave naturaldisasters, etc.

50 For all references to the Vienna Convention, see OfficialRecords of the United Nations Conference on the Law of Treaties,Documents of the Conference (United Nations publication, SalesNo. E.7O.V.5), pp. 289 et seq.


international equivalent of capacity to contract, is themost prominent aspect of a subjective legal situationwhich, to continue using municipal law terminology,may be defined as the State's "capacity to act" in inter-national law, i.e. the legal power possessed by the Stateto perform "legal acts" and to produce legal effects bymanifesting its will. On the other hand, what is calledthe "capacity to commit wrongful acts" or "delictualcapacity" obviously does not denote any legal power.Tt would be absurd that the legal order should endowits subjects with capacity to conduct themselves in amanner contrary to its own obligations. Hence "capacityto commit wrongful acts" or "delictual capacity" is nota sub-category of the "capacity to act". What is meantwhen this term is used is, that a subject of internationallaw may well engage in conduct contrary to a legalobligation incumbent on it, and thereby fulfil the requisiteconditions for being held to have committed a wrongfulact. Furthermore, if article 2 were worded so as tospecify that "every State possesses the capacity to commitinternationally wrongful acts", it might be thoughtthat international law authorizes its subjects to contravenethe legal order established by it. For similar reasonsit was also considered preferable not to say, in French,'''Tout Etat est susceptible de commetire un fait inter-nationalement illicite", in order to avoid the permissivecolouring which the English translation would have ifit stated that "Every State may commit internationallywrongful acts". The wording adopted seemed to theCommission to be the best way of avoiding any mis-interpretation.

(11) In drafting article 2, the Commission was carefulto adopt a formula which does not prejudge the possi-bility that subjects other than States may be held tohave committed an internationally wrongful act. Thepresent draft is concerned only with the internationalresponsibility of States. In this context there is no needto determine whether an internationally wrongful actmay be committed only by States or whether it maybe committed by other subjects of international lawalso. To avoid any misunderstanding on this point, theCommission preferred not to use for article 2 a titlesuch as "Subjects of international law capable of beingheld to have committed an internationally wrongfulact". This might have given a false impression thatthe intention in article 2 was to affirm that States aloneare liable to commit such acts.

Article 3. Elements of an internationallywrongful act of a State

There is an internationally wrongful act of a State when:

(a) Conduct consisting of an action or omission isattributable to the State under international law; and

(b) That conduct constitutes a breach of an internationalobligation of the State.

Commentary

(1) Article 1 states the basic general principle thatevery internationally wrongful act of a State entails its

international responsibility, while article 2 states theprinciple that every State is subject to the possibility ofbeing held to have committed an internationally wrong-ful act entailing its responsibility. Article 3 supplementsthese two principles by laying down the conditionsrequired to establish the existence of an internationallywrongful act of the State, i.e. the constituent elementsof an internationally wrongful act. For that purpose,the following two elements, both of which must bepresent, are traditionally distinguished: (a) an element,generally called a subjective element, consisting of con-duct that must be capable of being attributed not tothe human being or group of human beings whichactually engaged in it, but to the State as a subjectof international law; and (b) an element, generallycalled an objective element, which indicates that theState to which the conduct in question is attributedhas failed, by that conduct, to fulfil an internationalobligation of the State.

(2) Disregarding questions of terminology and moregenerally of the degree of precision of the expressionssometimes used, there is no doubt that the two elementsmentioned above are clearly discernible in, for example,the passage in its judgement in the Phosphates in Moroccocase in which the Permanent Court of InternationalJustice explicity links the creation of internationalresponsibility with the existence of an "act being attribu-table to the State and described as contrary to the treatyright[s] of another State".60 They are also to be foundin the decision in the Dickson Car Wheel Company case,given in July 1931 by the Mexico-United States GeneralClaims Commission established by the Convention of8 September 1923, where the condition required for aState to incur international responsibility is stated tobe the fact". . . that an unlawful international act beimputed to it, that is, that there exist a violation of aduty imposed by an international juridical standard".**With regard to State practice, attention may be drawnto the terms in which the Austrian Government repliedto Point II of the request for information addressedto Governments by the Preparatory Committee of the1930 Conference: "There can be no question of a State'sinternational responsibility unless it can be provedthat the State has violated one of the international obli-gations incumbent upon States under internationallaw."62

(3) In the literature of international law, the factsthat certain conduct is attributable to a State as a subjectof international law and that such conduct constitutesa breach of an international obligation of that Stateare together generally considered to be the essentialelements for recognition of the existence of a wrongfulact giving rise to international responsibility. Amongthe older formulations, that of Anzilotti remains a

60 Phosphates in Morocco case (Preliminary Objections), 14 June1938 (P.C.I.J., Series A/B, No . 74, p. 28). (Italics supplied by theCommission.)

61 United Nations, Reports of International Arbitral Awards,vol. IV (pp. tit.), p. 678. (Italics supplied by the Commission.)

93 League of Nations, Bases of Discussion... (pp. cit.), p. 21.(Italics supplied by the Commission.)


classic; 63 among the more recent, those by Sereni,64

Levin,85 Amerasinghe,66 Jimenez de Arechaga 67 andthat given in the "Restatement of the Law" by theAmerican Law Institute 68 are the clearest. Generallyspeaking, it may be said that most writers are sub-stantially in agreement on this point, irrespective oftheir nationality or period.69 The are reservationsexpressed by some writers concerning the necessity orutility of what has been called the subjective elementof the internationally wrongful act are sometimesprompted by the idea, isolated and clearly invalidatedby judicial decisions and practice, that the State wouldnever answer for "its own" acts but only for the actsof individuals, whether having the status of organsor private persons.70 In other cases, for the sake ofbeing logically consistent with the premises adopted,some writers have felt bound to deny the existenceof a normative operation whereby an action which isin fact performed by an individual is attached to acollective entity. Thus, for example, there are writerswho maintain that, since the only conceivable "legalimputation" is that which consists in attributing thelegal effects of an act to a given entity, the attributionof the act as such to the said entity cannot be anythingother than a factual or psychological imputation.71

There are still other writers who believe that the needto replace the idea of legal imputation by that of recog-nition of a link of factual causality must of necessityarise from the "real" character of collective entities,and of the State first and foremost.72 More often,

63 Responsibility arises from the wrongful violation of theright of another and generates the obligation to make reparationin so far as it is linked, i.e. attributable, to an acting subject."(Teorla... (op. cit.), vol. II, p. 83). (Translation by the UnitedNations Secretariat.)

84 Diritto internazionale (Milan, Giuffre, 1962), vol. HI, p. 1505.•5 Otvetstvennost gosudarstv v sovremennom mezhunarodnom

prava (Moscow, Mezhduna rodnye o tnoshenya , 1966), p . 51 .66 State Responsibility for Injuries to Aliens (Oxford, Clarendon

Press, 1967), p . 37.61 International Responsibility... (op. cit.), p . 534.88 Amer ican Law Insti tute, Restatement of the Law, Second,

Foreign Relations Law of the United States (St. Paul , Minn . , Ameri-can Law Inst i tute Publishers, 1965), p. 497.

69 See, a m o n g o ther writers, C h . de Visscher, op. cit., p p . 90 -91 ;A. V. F r e e m a n , The International Responsibility of States forDenial of Justice (London , L o n g m a n s Green , 1938), p . 2 2 ; R . Ago ,"Le delit in ternat ional" , Recueil des cours... (op. cit.), p p . 441et seq. and 450 et seq.; J. G a r d e Casti l lo, "El acto ilicito interna-cional" , Revista espaiiola de derecho internacional (Madr id , ConsejoSuper ior de Investigaciones Cientificas, 1950), vol. I l l , N o . 1,p . 124; Ch . Rousseau , Droit international public (Paris, Sirey, 1953),p . 3 6 1 ; P. Guggenheim, Traite de droit international public (Geneva,Georg , 1954), vol . I I , p p . 1-2,4-5; B . Cheng , op. «V.,p. 170; P . Router ," L a responsabil i te Internat ionale" , Droit international public(cours) (Paris , Les Nouvelles Insti tutes, 1955-1956), p p . 52 et seq.,82 et seq.; G. Schwarzenberger , A . Manual of Internationa! Law,4th ed. ( L o n d o n , Stevens, 1960), vol . 1, p . 163; G . T&iekides,"Responsabi l i te in ternat ionale" , Repertoire de droit international(Paris , Dal loz , 1969), vol. I I , p p . 783 et seq.

70 A . Soldat i , La responsabilite des Etats dans le droit international(Paris , Librair ie de jur i sprudence ancienne et moderne , 1934),p p . 75 et seq.

71 G . Arangio-Ruiz , Gil enti soggetti delVordinamento interna-zionale (Mi lan , Giuffre, 1951), vol . I , p p . 128 et seq., 337 et seq.

72 R . Quadr i , Diritto internazionale pubblico, 5 th ed. (Naples ,Liguori , 1968), p p . 587-588.

however, the reservations expressed are simply thereflection of the uneasiness caused by the habitual usein this context of the terms "imputability" and"imputation", which only lead to confusion, and whichthe Commission, as mentioned below73 decided toreject and replace by others less likely to give rise tomisunderstanding.74

(4) As regards the subjective element, and more par-ticularly the determination of conduct susceptible ofbeing considered as State conduct, what can be saidgenerally is that it can be either active (action) or passive(omission). It can even be said that cases in whichthe international responsibility of a State has beeninvoked on the basis of an omission are perhaps morenumerous than those based on an action by a State,and whenever an international tribunal has found awrongful omission to be a source of international responsi-bility, it has done so in terms just as unequivocal asthose used in a case of active conduct.75 Similarly,those States which replied to point V of the requestfor information submitted to them by the PreparatoryCommittee for the 1930 Conference for the Codificationof International Law expressly or implicitly recognizedthe principle that the responsibility of the State can beentailed by the omissions as well as by the actions ofofficials,76 and this principle is confirmed in the articlesadopted by the Conference on first reading.77 Finally,it can be said that the principle has been accepted withoutquestion by writers 78 and explicitly or implicitly adoptedin all the private codification drafts.

(5) Secondly, it is important to bring out the factthat in stipulating that for some particular conductto be liable to be characterized as an internationallywrongful act, it must first and foremost be conductattributable to the State, the sole purpose is to indicatethat it must be possible for the action or omission in

73 See para. (15) below.74 V. N . Elynychev, "Problema vmenenia v mezhdunarodnom

prave", Pravovedenie (Leningrad), 1970, N o . 5, pp . 83 et seq.75 The international responsibility of the State for an inter-

nationally wrongful omission was explicitly affirmed by the Inter-national Court of Justice in its judgment of 9 April 1949 in theCorfu Channel case (Merits) (I.C.J. Reports, 1949, pp. 22-23). Seealso the arbitral award of 10 July 1924 in the Affaire relative aVacquisition de la nationality polonaise (United Nations, Reportsof International Arbitral Awards, vol. I (United Nat ions publi-cation, Sales N o . 1948.V.2) p . 425).

76 League of Nations, Bases for Discussion ... (op. cit.), pp . 70et seq., and Supplement to Volume HI (op. cit.), pp . 2-3, 12 et seq.

77 See Yearbook. . . 1956, vol . I I , p p . 225-226, documentA/CN.4 /96 , annex 3, articles 6, 7 and 8.

78 F o r studies concerning the specific character in internat ionallaw of the offence of omission, see R. Ago , "Illecito commissivo eillecito omissivo del dir i t to in ternazionale" , Diritto internazionale(Milan , Is t i tuto per gli Studi di politica internazionale, 1938).p p . 9 et seq.; P . A. Zannas , La responsabilite internationale desEtats pour les actes de negligence (Mont reux , Gangu in et Laubscher ,1952); G. Perrin, "L'agression contre la legation de Roumanie aBerne et le fortdement de la responsabilite internationale dans lesdebits d'omission", Revue generate de droit international public(Paris), 3rd serie, vol. XXVIII, No.3 (1957), pp. 410 et seq.; D. Levy,"La responsabilitd pour omission et la responsabilite pour risqueen droit international", ibid. t. XXXII, No. 4 (1961), pp. 744 et seq.


question to be considered in international law as an"act of the State". The State is a real organized entity,but to recognize this "reality" is not to deny the elemen-tary truth that the State as such is not capable ofphysical action. In the last analysis, therefore, conductregarded as an "act of the State" can only be somephysical action or omission by a human being or groupof human beings.79 Hence the necessity of establishingwhen and how an "act of the State" can be discernedin a given action or omission. In other words, it is aquestion of determining by whom and in what circum-stances these actions or omissions must have beenperformed for them to be attribuable to the State.This is what the articles in chapter II of the draft setout to do.

(6) It should first of all be made plain, however, thatthe attribution of conduct to the State cannot be basedon simple recognition of a link of factual causality(causalite naturelle). It is sometimes—but not always-possible to speak of factual causality in reference tothe relationship between particular conduct and theresult of that conduct, but not in reference to therelationship between the person of the State and theaction or omission attributed to it. There are no activi-ties of the State that can be called "its own" from thepoint of view of factual causality (causalite naturelle),either in internal law or in international law. By thevery nature of the State, the attribution of conductto the State is of necessity a normative operation.80 Itmust also be emphasized that the State to which par-ticular conduct is attributed is the State seen as a per-son, as a subject of law, and not the State seen as alegal order or system of norms.81 It should be addedthat in speaking of attribution to the State as a subjectof law, what is of course meant is as a subject of inter-national law, not as a subject of internal law.82 Lastly,it must be made clear that the attribution of conductto a State for the purpose of establishing the possibleexistence of an internationally wrongful act by thatState can take place only in accordance with inter-national law. The operation of attaching an action or

79 "States can act only by and through their agents and repre-sentatives." (Case of Certain questions relating to settlers of Germanorigin in the territory ceded by Germany to Poland, Advisory opinionNo. 6, P.C.I.J., Series B, No. 6, p. 22.)

80 See D. Anzilotti, Corso... (op. cit.\ p. 222; J. G. Starke,"Imputability in International Delinquencies", The British YearBook of International Law, 1938 (London), vol. 19, p. 105; W.Wengler, op. cit., vol. I, p. 39; C. Th. Eustathiades, "Les sujetsdu droit international et la responsabilite internationale—Nou-velles tendances", Recueil des cours... 1953-111, vol. 84 (Leyden,Sijthoff, 1955), p. 422.

81 At one point, the identification of the legal person with a legalorder led writers such as H. Kelsen, "Ober Staatsunrecht", Zeit-schrift fiir das privat und offentliches Recht der Gegenwart (Vienna,Holder , 1914), Bd. 40, p . 114; and W. Burckardt , Die volkerrechtlicheHaflung der Staaten (Berne, Haupt , 1924), pp . 10 et seq., to concludethat a wrongful act cannot be attributed to the legal person, whichis the expression of the unity of the special legal order that con-stitutes that person. F o r a criticism of the normative theory inrelation to the identification of the State and its legal order, seeV. N . Elynychev, op. cit., pp . 85 et seq.

82 F o r a recent reaffirmation of this aspect, see Institute of theState and Law of the Academy of Sciences of the Soviet Union,op. cit., p. 426.

omission to a subject of international law in order todraw conclusions therefrom in the sphere of internationallegal relations cannot be performed in any other frame-work than that of international law itself.83 It is thusan entirely separate operation from attribution of thesame conduct to the State as a subject of internal law,and on the basis of internal law, without prejudice toany possible consideration by international law, for itsown purposes, of the situation in internal law. Theconcrete difficulties sometimes met with in this con-nexion are frequently due to an insufficiently cleargrasp of these different aspects.

(7) The second condition laid down for the existenceof an internationally wrongful act of the State is thatthe conduct attributable to the State should constitutea breach by the State of an international obligation ofthe State. This is what is called the objective element ofthe internationally wrongful act, the specific elementwhich distinguishes it from the other acts of the Stateto which international law attaches legal consequences.The contrast between the State's actual conduct andthe conduct which juridically it ought to have observedconstitutes the very essence of the wrongfulness.

(8) It is widely acknowledged in judicial decisions,practice and authoritative literature that the objectiveelement which characterizes an internationally wrongfulact is the breach of an international obligation of theState. In its judgement of 26 July 1927 on jurisdictionin the Case concerning the Factory at Chorzow,8i thePermanent Court of International Justice used the words"breach of an engagement". It employed the sameexpression in its judgement of 13 September 1928 onthe merits of the case.85 The International Court ofJustice referred explicitly to the Permanent Court'swords in its advisory opinion of 11 April 1949 onReparation for Injuries Suffered in the Service of theUnited Nations.6* In its advisory opinion of 18 July 1950on the Interpretation of the Peace Treaties with Bulgaria,Hungary and Romania (Second Phase) the Court heldthat "refusal to fulfil a treaty obligation" involvedinternational responsibility.87 In arbitration decisions,the classic definition is the one referred to above, givenby the Mexico-United States General Claims Commission

83 See J. G . Starke, loc. cit., p p . 106-107; T . Perassi, Lezioni didiritto internazionale, 4 th Ed. (Rome , F o r o I ta l iano, 1939, p . 116;R. Ago, "Le delit international" (he. cit.), pp. 461-462; K.Furgler , Grundprobleme der volkerrechtlichen Verantwortlichkeit derStaaten unter hesonderer Beriicksichtigung der Haager Kodifikation-konferenz, sowie der Praxis der Vereiniqten Staaten und der Schweiz(Zurich, Polygraphischer Verlag, 1948), p p . 19-20; P. Reuter ,"La responsabil i te in ternat ionale" (loc. cit.), p . 87 ; J. P . Queneu-dec, La responsabilite internationale de VEtat pour les fantes person-miles de ses agents (Paris , Librair ie generate de droi t et de jur ispru-dence, 1966), p . 119. I t was again his par t icular concept ion of theState and legal persons in general tha t led Kelsen t o main ta in tha tthe quest ion whether an act performed by an individual is o r is notan act of State must be settled on the basis of nat ional law ( H .Kelsen, Principles of International Law (New York , Rinehar t , 1952),p . 117).

84 P.C.IJ. Series A, N o . 9, p . 21 .86 P.C.IJ. Series A, N o . 17, p. 29.86 I.C.J. Reports 1949, p . 184.87 I.C.J. Reports 1950, p . 228.


in its decision in the Dickson Car Wheel Company case.88

In State practice, the terms "non-execution of inter-national obligations", "acts incompatible with inter-national obligations", "breach of an internationalobligation" and "breach of an engagement" are commonlyused to denote the very essence of an internationallywrongful act, source of responsibility. These expressionsrecur frequently in the replies by Governments, par-ticularly on point III, to the request for informationaddressed to them by the Preparatory Committee forthe 1930 Conference.89 Moreover, the article 1 unani-mously adopted on first reading by the Third Committeeof the Conference contains these words: "any failure . . .to carry out the international obligations of the State".90

The same consistency of terminology is to be foundin the literature and private draft codifications of Stateresponsibility.

(9) It should be noted that in international law theidea of breach of an obligation can be regarded as theexact equivalent of the idea of infringement of thesubjective rights of others. The Permanent Court ofInternational Justice, which normally uses the expression"violation of an international obligation", spoke of anact " . . . contrary to the treaty right of another State"in its judgement of 14 June 1938 in the Phosphates inMorocco case.91 The correlation between legal obligationon the one hand and subjective right on the other admitsof no exception; unlike the situation in municipal law,there are no obligations on a subject which are notmatched by an international subjective right of anothersubject or subjects, or even, for those who share theview referred to in the commentary to article 1, of thetotality of other subjects of international law.

(10) It is sometimes asked whether there should notbe an exception to the principle that what is charac-teristic of an internationally wrongful act is that itconsists in a breach by the State of an internationalobligation of the State. The question is prompted bythe idea that, in certain cases, the abusive exercise ofa right could constitute internationally wrongful conductthereby entailing international responsibility. The Com-mission is of the opinion that the answer to this ques-tion has no direct bearing on the determination of theelements of an internationally wrongful act. It is aquestion of substance which concerns the existence ornon-existence of a "primary" rule of internationallaw—a rule whose effects is to limit the exercise bythe State of its rights, or, as some writers would putit, its capacities, and to prohibit their abusive exercise.If it is agreed that a limitation and a prohibition ofthis kind are accepted by international law in force,then the abusive exercise of a right by a State will

88 See paragraph 2 of the commentary. See also the decisiongiven on 10 July 1924 in the Affaire relative a Vacquisition de lanationalite polonaise (United Nations, Reports of InternationalArbitral Awards, vol. I {pp. cit.), p. 425).

88 League of Nations, Bases of Discussion ... (op. cit.), vol. Ill ,pp. 25 et seq., 30 et seq., and 33 et seq.; Supplement to Volume HI(pp. cit.), pp. 2, 6 et seq.

90 Yearbook... 1956, vol. II, p. 225, document A/CN.4/96,annex 3.

91 P.C.I.J. Series A/B, No. 74, p. 28.

necessarily constitute a breach of the obligation not toexceed certain limits in exercising that right, and notto exercise it with the sole intention of harming othersor encroaching on their competence. If the existence ofan internationally wrongful act were to be recognizedin such a case, the constitutive element would still bethe breach of an obligation and not the exercise of aright. Accordingly, in defining in principle the conditionsfor the existence of an internationally wrongful act, itwas considered that the reference to breach of an inter-national obligation would also cover the case wherethe obligation in question was specifically an obligationnot to exercise certain of the State's own rights in anabusive or unreasonable manner. It should be added,however, that in taking this view the Commission didnot definitely exclude the possibility that it might haveto deal with the question of abuse of right in connexionwith other provisions of the present draft. Again, itmay in due course decide to deal separately with thecodification of this particular matter, which concernsthe framing of certain "primary" rules rather than therules governing responsibility.(11) Having thus concluded that there was no exceptionto the principle that two conditions must be met forthe existence of an internationally wrongful act—con-duct attributable to the State under international lawand the breach by that conduct of an internationalobligation incumbent upon the State—the Commissionconsidered whether those two necessary conditions werealso sufficient. The first problem considered in thisconnexion was whether there should not sometimesalso be a third condition for the existence of an inter-nationally wrongful act—the occurrence of a certainexternal event as a result of the State's conduct.92 Incertain cases—for example, failure by the State's legis-lative organs to pass a law which the State, by treaty,has specifically undertaken to enact, or refusal by acoastal State to permit innocent passage through itsterritorial waters in peacetime to ships of anotherState—the conduct as such is itself sufficient to constitutea breach of an international obligation incumbentupon the State. That is what may be called an inter-nationally wrongful act of conduct alone. There arehowever, other cases in which the situation is different.For a State to be said to have failed in its duty to pro-tect the premises of a foreign embassy against injuriousacts of third parties, it is not sufficient to show that theState was negligent in not providing adequate policeprotection; some injurious event must also have takenplace as a result of that negligence, such as damage byhostile demonstrators or an attack on the embassypremises by private individuals. In a case of that kind,and in general in cases where the purpose of the inter-national obligation is precisely to prevent the occurrenceof certain injurious events, negligent conduct of theorgans of the State does not become an actual breachof the international obligation unless the conduct itselfis combined with a supplementary element, an externalevent, one of those events which the State should specifi-cally have endeavoured to prevent. The Commission

92 See on this question, R. Ago, "Le delit international..."(toe. eft.)', pp. 447 et seq., p. 500.


does not think, however, that this distinction directlyaffects the formulation of the rule stating the conditionsfor the existence of an internationally wrongful act.Even if, in some cases, it has to be concluded that thereis no internationally wrongful act so long as a par-ticular external event has not occurred, that does notimply that the two conditions for the existence of aninternationally wrongful act—conduct attributable to theState, and breach by that conduct of an internationalobligation—are no longer sufficient by themselves. Ifthere is no internationally wrongful act so long as theevent has not occurred, the reason is that until thenthe State's conduct has not resulted in the breach ofan international obligation. It is really the objectiveelement of the internationally wrongful act that ismissing. In other words, the occurrence of an externalevent is a condition for the breach of an internationalobligation, and not a new element which has to becombined with the breach for there to be a wrongfulact. The Commission will be able to consider the dis-tinction made above between two different types ofinternationally wrongful acts when it takes up thevarious questions arising with regard to the breach ofan international obligation.(12) The second problem considered by the Com-mission in this connexion was whether before concludingthat an internationally wrongful act existed, it wasnot also necessary to establish the presence, in theparticular case under consideration, of a third constitu-ent element, namely, damage, caused as a result of theState's conduct, to the detriment of the subject whosesubjective right has been impaired. Some writers are ofthis opinion,93 even if the way they commonly use theword "damage" does not necessarily indicate that theyare referring to the same phenomenon or the sameaspect. Even setting aside the opinions of those whoby "damage" mean something else, or at all eventssomething different from an injury caused by one Stateto another State at the international level,94 it should

93 See, for example, A. V. Freeman, op. cit., p. 22; A. Ross,op. cit., pp. 242 and 255; K. Furgler, op. cit., p. 16; P. Guggenheim,op. cit., vol. II, p. 1; E. Jimenez de Arechaga, op. cit., p. 534.

91 Some writers who maintain that there must be damage forthere to be an internationally wrongful act are really thinking moreof the occurence of the external event which, as just noted, mustsometimes accompany the actual conduct of the State for thatconduct to result in a breach of an international obligation. Theoccurence of such an event, however, is only characteristic of aparticular category of internationally wrongful acts, and where it isrequired, it does not represent a "third" constituent element of theinternationally wrongful act; it is only a condition for the existenceof the objective element of the violation. Other writers, when theyrefer to "damage", often have in mind not an injury caused toa State at the international level, but rather an injury caused to anindividual at the municipal level. This is clearly so, for example,in the case of C. F. Amerasinghe, op. cit., p. 55. The importanceaccorded to the element of damage is thus a consequence of thefact that only cases of State responsibility for injuries to individualaliens have been considered, and that consideration of the rulesrelating to responsibility has been combined with that of the sub-stantive rules relating to the treatment of aliens. Injury to individuals,which is precisely what the rule concerning the treatment of aliensis designed to prevent, has nothing in common with damage atthe strictly international level, which some consider must occurin addition to the breach of the obligation for an internationallywrongful act to exist. Such damage can only be damage sufferedby a State.

be noted that the word "damage" is sometimes usedby international lawyers to refer specifically to damageto economic or patrimonial interests. Where suchdamage has occurred, it may indeed be a decisive factorin determining the consequences of a wrongful act.As such, it will be considered in the part of the draftdevoted to the forms and extent of reparation. But itseems clear that, in this sense, "damage" is not anessential condition for the existence of an internationallywrongful act, not an individual constituent element ofthat concept. More often it is maintained that "damage"should be understood to mean not just damage toeconomic interests but also to moral interests. It is infact in this sense that the term is generally used whenit is said that it constitutes an essential element of theinternationally wrongful act.95 The expression "moraldamage", moreover, is not free from ambiguity, either.It may refer specifically to the injury constituted by aslight to the honour or dignity of a State. But eventhe combination of "moral" damage as thus understood,and strictly "economic" damage is obviously not enoughto introduce an element which must be present forthere to be an internationally wrongful act, and whatthe Commission is trying to do in article 3 is preciselyto determine the constituent elements without whichthere can in no case be an internationally wrongfulact. International law today lays more and more obli-gations on the State with regard to the treatment ofits own subjects. For examples we need only turn tothe conventions on human rights or the majority of theinternational labour conventions. If one of these inter-national obligations is violated, the breach thus committeddoes not normally cause any economic injury to theother States parties to the convention, or even anyslight to their honour or dignity. Yet it manifestlyconstitutes an internationally wrongful act, so that ifwe maintain at all costs that "damage" is an elementin any internationally wrongful act, we are forced tothe conclusion that any breach of an internationalobligation towards another State involves some kindof "injury" to that other State. But this is tantamountto saying that the "damage" which is inherent in anyinternationally wrongful act is the damage which is atthe same time inherent in any breach of an internationalobligation.96 Reference to the breach of an internationalobligation thus seemed to the Commission fully sufficientto cover that aspect as well, without the addition ofanything further.97 The Commission was thus able toconclude that the two elements respectively describedas the "subjective" element and the "objective" elementare the only necessary components of any internationally

95 Thus, for example, E. Jimenez de Arechaga, after referring todamage as a condition for international responsibility, adds that"in inter-State relations the concept of damage does not , however,have an essential material or patrimonial character" (op. cit., p . 534).

96 D . Anzilotti, Corso... (pp. cit.), p . 425, brings out the factthat damage is often equated in international law with the breachof an obligation.

97 To refer to "damage" as a constituent element of the inter-nationally wrongful act separate from the breach of an obligationcould even be dangerous, because it might give the impression thatin the Commission's opinion, where there was breach of an inter-national obligation without "damage", there was no wrongfulact and no responsibility.


wrongful act. Other elements may be present in anyparticular case, or even in most cases, but are notindispensable.(13) With regard to the wording of the rule, the Com-mission adopted a formula which, though it may seema little schematic, at least establishes clearly the relation-ship between the questions dealt with in article 3 andthose dealt with in subsequent chapters of the draft.Sub-paragraph (a)—which states that conduct attributableto the State under international law is necessary forthere to be an internationally wrongful act—correspondsto chapter II of the draft (on the "act of the State"),which establishes what kinds of conduct are attributableto the State under international law. Sub-paragraph (b)—which states that such conduct must constitute abreach of an international obligation—corresponds tochapter III (which will deal with the "internationalbreach of obligation"), which will indicate what con-ditions must be met for conduct to constitute such abreach and what different cases of breach of obligationare covered. As regards the order in which these twoelements appear, it seemed more logical to mention thesubjective element before the objective element, becauseit is necessary to determine whether State conductexists before it can be determined whether or not itconstitutes a breach of an international obligation. Inthe introductory phrase, the words "of a state" afterthe words "internationally wrongful act" follow fromwhat was said in the introduction to this chapter ofthe report,98 namely, that the draft is not concernedwith the international responsibility of subjects ofinternational law other than States.

(14) In sub-paragraph (a), the Commission chose theterm "attribution" to denote the operation of attachinga given action or omission to a State. This term seemedpreferable to others frequently used in internationalpractice and judicial decisions, such as "imputation",although writers continually stress the fact that whenthe terms "imputability" or "imputation" are used inrelation to the international responsibility of States,they do not have the same meanings as, for example,in internal criminal law, where "imputability" sometimesindicates an agent's state of mind, ability to understandand to will as the basis of responsibility, or in criminalprocedure, where "imputation" may mean the chargingof a subject of internal law by a judicial authority. Atall events the term "attribution" is more likely to pre-vent misinterpretations. In addition—and again inorder to avoid any false analogy between the notionreferred to here and that of a subsequent operationcorresponding in some measure to a charge by a judicialorgan in internal law, the Commission preferred to say"conduct... is attributable to the State under inter-national law" rather than "conduct... is attributed tothe State under international law".

(15) The Commission considered it more appropriateto refer in sub-paragraph (b) of the article to "breachof an international obligation" rather than "breach ofa rule" or of a '''norm of international law". "Breachof an obligation" is not only the expression commonly

98 See para. 37 above.

used in judicial decisions and State practice, it is alsothe most accurate. A rule is the objective expressionof the law; an obligation is a subjective legal phenom-enon and it is by reference to that phenomenon thatthe conduct of a subject of international law is judged,whether it is in compliance with the obligation or whetherit is in breach of it. Furthermore, an obligation thebreach of which is a constituent element of an inter-nationally wrongful act does not necessarily and in allcases flow from a rule, in the true sense of the term.It may very well have been created and imposed upona subject by a particular legal instrument or by a decisionof a judicial or arbitral tribunal. The term "obligation"was chosen by the Commission in preference to othersthat may be considered synonymous in internationallaw, such as, for example, "duty" or "engagement",because it is the term most commonly used in inter-national judicial decisions and practice and in theliterature. Finally, in the French version, the term"violation" was preferred to other similar terms, suchas "manquement", "transgression" or "non-execution",in particular because this term is used in Article 36,paragraph 2 (c), of the Statute of the InternationalCourt of Justice. For the same reason, the term "breach"is used in the English version and the term "violacion"in the Spanish.

Article 4. Characterization of an act of a State asinternationally wrongful

An act of a State may only be characterized as inter-nationally wrongful by international law. Such charac-terization cannot be affected by the characterization of thesame act as lawful by internal law.

Commentary

(1) This article states in explicit form a principlewhich is already implicit in article 3, namely, the principlethat the characterization of a given act as internationallywrongful is independent of any conclusion as to whetherthat act conforms or not to the provisions of the internallaw of the State which committed it. The first sentenceof the article implies, first, that an act of a State cannotbe characterized as internationally wrongful unless itconstitutes a breach of an international obligation,even if it violates a provision of the State's internallaw. Secondly, it follows from the same sentence thatan act of a State must be characterized as internationallywrongful as soon as it constitutes a breach of an inter-national obligation, even if the act does not contraveneany of the obligations imposed by the State's internallaw and even in the extreme case in which, under thatlaw, the State was actually bound to adopt such conduct.The second sentence brings out very clearly the mostimportant aspect of the principle stated in the firstsentence, namely, that a State cannot, by pleadingthat its conduct conforms to the provisions of its internallaw, escape the characterization of that conduct aswrongful by international law if it constitutes a breachof an obligation imposed by international law. Further-more, the combination of the rule laid down in article 1,that every internationally wrongful act of a State entails


the responsibility of that State, with the rule laid downin article 4 involves the conclusion that the internationalresponsibility of the State ensuing from a particularact arises irrespective of whether that act conformsor not to the provisions of the internal law of the Stateconcerned.

(2) The first conclusion to be drawn from article 4,namely, that there is no internationally wrongful actso long as there is no breach by a State of an inter-national obligation but merely a failure on its part tofulfil an obligation imposed by its own legal system,needs no lengthy proof. It is expressly affirmed in inter-national judicial decisions and practice and in theliterature."

(3) The clearest judicial decision on the subject is tobe found in the Advisory Opinion of the PermanentCourt of International Justice of 4 February 1932 inthe case concerning the Treatment of Polish Nationalsand other persons of Polish origin or speech in the DanzigTerritory.100 The Court denied the Polish Governmentsthe right to submit to organs of the League of Nationsquestions concerning the application to Polish nationalsof certain provisions of the constitution of the FreeCity of Danzig, on the ground that:. . . according to generally accepted principles, a State cannot rely,as against another State, on the provisions of the latter's Consti-tution, but only on international l aw . . .

The application of the Danzig Constitution may however resultin the violation of an international obligation incumbent on Danzigtowards Poland, whether under treaty stipulations or under generalinternational law.... However, in cases of such a nature, it is not theConstitution and other laws as such, but the international obligationthat gives rise to the responsibility of the Free City.

(4) In practice, States which considered themselveswrongfully accused of international responsibility forwhat was in fact nothing more than failure to observea provision of internal law have successfully resistedthe charge by relying on the above principle. The requestfor information submitted to States by the PreparatoryCommittee for the 1930 Codification Conference at theHague drew a distinction between the internationalresponsibility of the State flowing from the breach ofan international obligation, and the purely internalresponsibility flowing from the breach of an obligationestablished by the constitution or laws of that State.The Governments which replied to the request forinformation were in agreement on that point.101 At theHague Conference, article 1 of the draft Convention

8 8 This principle is also set out very clearly in Part IV of Restate-ment of the Law by the American Institute (para. 167) {Yearbook . . .1971, vol. II (Part One), pp. 193-194, document A/CN.4/217/Add.2).

1 0 0 P.C.I.J., Series A/B, No. 44, pp. 24-25. In this connexion,see also the opinion expressed by the Permanent Court in its judge-ment of 7 September 1927 in the Lotus Case (P.C.I.J., Series A,No. 10, p. 24).

1 0 1 League of Nations, Bases of Discussion (op. cit.), pp. 16 et seq.and Supplement to Volume 111, pp. 2 et seq. The principle in questionwas clearly set out in the reply of the German Government:

"International responsibility—the sole form of responsibilityunder consideration—can only become involved when a ruleof international law has been broken . . . when a law is infringedto the detriment of a foreigner, there can never be any questionof a request put forward under international law by a foreignState." (League of Nations, Bases of Discussion, op. cit., p. 16).

on State responsibility, which was approved unanimouslyon first reading, implicitly confirmed the sameconclusion.102

(5) In the Commission's opinion, the essential import-ance of the principle relating to this aspect of the relation-ship between international law and internal law comesout particularly in the converse proposition to thatstated in the above paragraphs: the fact that someparticular conduct conforms to the provisions of internallaw, or even is expressly prescribed by those provisions,in no way precludes its being characterized as inter-nationally wrongful if it constitutes a breach of anobligation established by international law. As has beenclearly stated, "the principle that a State cannot pleadthe provisions (or deficiencies) of . . . its constitution as aground for the non-observance of its internationalobligations... is indeed one of the great principles ofinternational law, informing the whole system and apply-ing to every branch of it".103 Judicial decisions, Statepractice and the works of writers on international lawleave not the slightest doubt on that subject.

(6) It has been said that the Permanent Court ofInternational Justice "affirmed this rule and elaboratedit into one of the cornerstones of its jurisprudence".104

The Court expressly recognized the principle in itsfirst judgement, that of 17 August 1923, in the case ofthe S.S "Wimbledo?!"105 and subsequently reaffirmed iton several occasions. Among its most explicit formulationsare the following:

. . . it is a generally accepted principle of international law that inthe relations between Powers who are contracting Parties to atreaty, the provisions of municipal law cannot prevail over thoseof the t r e a t y ; 1 0 6

. . . it is certain that France cannot rely on her own legislation tolimit the scope of her international obl iga t ions ; 1 0 7

. . . a State cannot adduce as against another State its own Consti-tution with a view to evading obligations incumbent upon it underinternational law or treaties in force.1 0 8

102 League of Nations, Acts of the Conference {op. cit.),p. 31.103 Sir Gerald Fitzmaurice, "The general principles of inter-

national law considered from the standpoint of the rule of law",Recueil des cours ... 1957-11, vol. 92 (Leyden, Sijthoff, 1958), p. 85.

104 G. Schwarzenberger, International Law, 3rd. cd. (London,Stevens, 1957), vol. I, p . 69.

106 The Court rejected the argument of the German Governmentthat the passage of the ship through the Kiel canal would haveconstituted a violation of the German neutrality orders, observingthat :

" . . . a neutrality order, issued by an individual State, could notprevail over the provisions of the Treaty of P e a c e . . . ." . . . under Article 380 of the Treaty of Versailles, it was her[Germany's] definite duty to allow it [the passage of the Wimbledonthrough the Kiel Canal]. She could not advance her neutralityorders against the obligations which she had accepted under thisArticle" (P.C.I.J., Series A, No . 1, pp. 29-30).106 Case of the Greco-Bulgarian "Communities", Advisory

Opinion of 31 July 1930 (P.C.I.J., Series B, No . 17, p . 32).107 Case of the Free Zones of Upper Savoy and the District ofGex

(second phase), Order of 6 December 1930 (P.C.I.J., Series A,N o . 24) p . 12, and idem, Judgement of 7 June 1932 (P.C.I.J., SeriesA/B, No . 46), p . 167.

108 Treatment of Polish Nationals and Other Persons of PolishOrigin or Speech in the Danzig Territory, Advisory Opinion of4 February 1932 {P.C.I.J., Series A/B, No . 44, p. 24).


The same principle, viewed from a different angle,is also affirmed in the Advisory Opinions of 21 February1925 on the Exchange of Greek and Turkish Popu-lations 109 and 3 March 1928 on the Jurisdiction of theCourts of Danzig.11 °

(7) The existence of a principle of international lawthat a State cannot escape its international obligationsby pleading its internal law is confirmed by an exam-ination of the decisions of the International Courtof Justice. Even though the decisions of this Courtmay not provide affirmations of this principle asexplicit as those to be found in the decisions of thePermanent Court, it is nevertheless true that the principlein question was recognized expressly in the AdvisoryOpinion concerning Reparation for injuries suffered inthe service of the United Nations i n and implicity inseveral other judgements. It is interesting to note thatseveral judges of the Court have seen fit to state explicitly,in their separate or dissenting opinions from these samejudgements, the principle which the majority of membersof the Court had implied.112

(8) Arbitral awards are no less categorical in thisrespect. As early as the period between the First andSecond World Wars, there were many on these lines.Among the most important were the arbitral awardof 1922 concerning the Norwegian Shipowners' Claims,113

the award rendered by the arbitrator Taft in 1923 inthe Aguilar-Amory and the Royal Bank of Canada Claims[Tinoco Case] (Great Britain v. Costa Rica),114 andthe award rendered in 1930 in the Shufeldt Claim byan Arbitral Tribunal established by the United Statesand Guatemala. The last-mentioned award states that:

. . . it is a settled principle of international law that a sovereigncannot be permitted to set up one of his own municipal laws as

109 P.C.I.J., Series B, No. 10, p. 20.110 P.C.I.J., Series B, No. 15, pp. 26-27: In the same connexion

we may recall the observations by Lord Finlay on the AdvisoryOpinion of 15 September 1923 on the Question Concerning theAcquisition of Polish Nationality (P.C.I.J., Series B, No. 7, p. 26).These observations are particularly interesting because they referto a case in which the actual absence of provisions of municipallaw is shown not to be an excuse for the non-fulfilment of inter-national obligations.

111 I.C.J. Reports 1949, p. 180.112 In this context, reference should be made to the Judgement of

18 December 1951 in the Fisheries Case (I.C.J. Reports 1951, p. 132),with the individual opinion of Judge Alvarez (ibid., p. 152) andthe dissenting opinion of Judge McNair (ibid., p . 181); the Judgementof 18 November 1953 in the Nottebohm Case (Preliminary Objec-tions) (I.C.J. Reports 1953, p. 123), with the declaration of JudgeKlaestad (ibid., p. 125); and above all the Judgement of 28 November1958 in the Case concerning the Application of the Convention of1902 Governing the Guardianship of Infants (I.C.J. Reports 1958,p. 67), with the separate opinions of Judge Badawi (ibid., p. 74),judge Lauterpacht (ibid., p. 83) and Judge Spender (ibid., especiallypp. 125-126 and 128-129), and the dissenting opinions of JudgeWiniarski (ibid., pp. 137 and 138) and Judge Cordova (ibid., p. 140).

113 Award rendered on 13 October 1922 by the Arbitral Tribunalestablished under the agreement of 30 June 1921 between Norwayand the United States of America (United Nations, Reports ofInternational Arbitral Awards, vol. I (op. cit.), p . 331).

114 Award of 18 October 1923, rendered by the Arbitral Tribunalestablished under the Convention of 12 January 1922 (ibid., p. 386).

a bar to a claim by a sovereign for a wrong done to the latter'ssubject.116

With regard to more recent years, mention must bemade of the decisions of the Italian-United StatesConciliation Commission, established under article 83of the 1947 Treaty of Peace,116 and particularly thedecision in the Wollemborg Case, rendered on 24 Sep-tember 1956. The Commission stated:. . . one thing is certain: the Italian Government cannot avail itself,before an international court, of its domestic law to avoid fulfillingan accepted international obligation. Judicial decisions of the Perma-nent Court of International Justice are all identical on this point.117

(9) The principle that a State cannot invoke its internallaw to show that it has not violated an internationalobligation has been affirmed no less frequently in Statepractice than in international judicial decisions. It issufficient to recall in this context the positions takenby States with regard to the disputes discussed in theLeague of Nations or submitted to the PermanentCourt or the International Court of Justice, as well asthe work on the codification of international law under-taken under the auspices of the League of Nationsand the United Nations. In the aforementioned disputes,the plaintiff States firmly supported the principle thatconformity to internal law did not exclude internationalresponsibility. Moreover, it should be noted that thedefendant States, too, generally agreed with that view.Examples of this kind are the attitude adopted by Danzigand Poland in the dispute concerning the Jurisdictionof the Courts of Danzig,11* by Hungary and Romaniain the dispute concerning the Expropriation by theRomanian Government of the immovable property ofHungarian op taut s,119 by Switzerland in the disputeconcerning Reparation for damage suffered by Swisscitizens as a result of events during the war,120 by Switzer-land and France in the Case of the Free Zones of UpperSavoy and the District of Gex,121 by Yugoslavia in the

115 Award of 24 July 1930 rendered by the Tribunal establishedby the Agreement of 2 November 1929 (ibid., vol. II (op. cit.),p. 1098).

114 United Nations, Treaty Series, vol. 49, p. 126.117 United Nations, Reports of International Arbitral Awards,

vol. XIV (op. cit.), p. 289. See also in the same connexion thedecision in the Flegenheimer Case of 20 September 1958, renderedby the same Commission (ibid., especially p. 360).

118 During the dicussion in the Permanent Court of InternationalJustice, Mr. Gidel, representing the Danzig Government, stated:

"It is a universally accepted principle that the provisions ordeficiencies of municipal law cannot be invoked by a State toavoid fulfilling international obligations or to evade the responsi-bilities flowing from the non-fulfilment of those obligations"[Translation from French] (P.C.I.J., Scries C, No. 14-1, p. 44).

Mr. Limborg, representing the Polish Government, replied:"My adversary, the eminent Professor, is quite right: generally

speaking, a State can never plead in an international court thatits laws are defective." [Translation from French] (Ibid., p. 59).119 League of Nations, Official Journal, 4th year, No. 7 (July

1923), p. 729; ibid., No. 8 (August 1923), pp. 886-887 and 895; ibid.,9th year, No. 4 (April 1928), pp. 562-563 and 570.

120 Ibid., 15th year, No. 11 (November 1934), pp. 1438,1486 and1494-1495. The other parties to the dispute did not question thesoundness of the position taken by Switzerland in that connexion.

121 P.C.I.J., Series C, No. 19, vol. I, pp. 210-211 and 344; ibid.,vol. Ill, p. 1222; ibid., vol. IV, pp. 1636-1637 and 1912-1913.


Case of Losinger et Cie, S.A.,182 by Italy and Francein the Phosphates in Morocco case 123 and, lastly, byLiechtenstein in the Nottebohm Case.1**

(10) The same identity of view was apparent in thework undertaken under the auspices of the Leagueof Nations on the codification of the topic of Stateresponsibility, and in the subsequent work undertakenunder the auspices of the United Nations on the codi-fication of the rights and duties of States and the lawof treaties. In point I of the request for informationsent to States by the Preparatory Committee for the1930 Conference on State Responsibility, a distinctionwas drawn between the responsibility incumbent on aState under international law and the responsibilitywhich might be incumbent on it under its municipallaw, and it was stated:

In particular, a State cannot escape its responsibility under inter-national law, if such responsibility exists, by appealing to theprovisions of its municipal law.

In their replies, States agreed expressly or implicitlywith this principle.125 During the debate at the Con-ference, States expressed general approval of the ideaembodied in point I and the only matters for discussionwere, first the advisability of inserting in the conventiona rule expressing that idea and then the choice of themost appropriate wording.126 At the close of the debate,the Third Committee of the Conference adopted onfirst reading the following article (article 5):

A State cannot avoid international responsibility by invokingthe state of its municipal law.127

(11) The International Law Commission of the UnitedNations, at its first session, in 1949, adopted a draftdeclaration on rights and duties of States. Article 13of the draft, the contents of which were approved byall the members of the Commission, reads as follows:

Every State has the duty to carry out in good faith its obligationsarising from treaties and other sources of international law, and itmay no t invoke provisions in its constitution or its laws as anexcuse for failure t o perform its duty . 1 2 8

122 P.C.I.J., Series C, N o . 78, p . 181.123 P.C.I.J., Series C, N o . 84, pp . 70, 455, 712, 826; and N o . 85,

p . 1172.124 Nottebohm Case (Liechtenstein v. Guatemala) , I.C.J.,

Pleadings, vol. I, pp . 180-182; and vol. I I , pp . 27-28.125 League of Nat ions , Bases of Discussion (op. cit.), vol. I l l ,

pp . 16 et seq.126 League of Nat ions , Acts of the C o n f e r e n c e . . . , vol. IV

(op. cit.), pp . 120 et seq.127 Yearbook.. . 1956, vol. I I , p . 225, document A/CN.4 /96 ,

annex 3.128 See Official Records of the General Assembly, Fourth Session,

Supplement No. 10 (A/925), pp. 8-9. For the debate in the Commis-sion, see Yearbook . . . 1949, pp. 105-106 (14th meeting, paras. 1-16);147-148 (20th meeting, paras. 78-80) and 171 (24th meeting, paras. 4-8). The text of the article adopted by the Commission reproduces,without substantive modifications, article 12 of the draft declarationon rights and duties of States submitted to the General Assemblyby the Government of Panama (A/285) and used by the Commissionas a basis for discussion. The soundness of the principle set out inthose articles was stressed by several Governments in their commentson the Panamanian draft (Preparatory study concerning a draftDeclaration on the Rights and Duties of States (memorandum pre-pared by the Secretary-General of the United Nations) (United

(12) At the first session of the United Nations Con-ference on the Law of Treaties, held at Vienna in 1968.the delegation of Pakistan proposed in the Committeeof the Whole that a clause specifying that no partyto a treaty might invoke the provisions of its internallaw to justify the non-observance of a treaty shouldbe inserted in the draft Convention. That proposalwas adopted on first reading by 55 votes to none, with30 abstentions, and referred to the Drafting Committee.129

On second reading, the Committee of the Whole ap-proved without a formal vote the text submitted by theDrafting Committee.130 In 1969, at its second session,the Conference adopted by 72 votes to 2, with 24 ab-stentions, the text proposed by the Committee of theWhole, which became article 27 of the Vienna Conventionon the Law of Treaties, and reads as follows:

A party may not invoke the provisions of its internal law asjustification for its failure to perform a treaty. This rule is withoutprejudice to article 46.m

(13) The principle thus sanctioned by internationaljudicial decisions and State practice is, further, expresslyconfirmed by writers belonging to different legal sys-tems.132 It is also included in most of the draft codi-

Nations publication, Sales No. 1949.V.4), pp. 82, 86-87), on thedraft of the International Law Commission (Official Records of theGeneral Assembly, Sixth Session, Annexes, agenda item 48, documentsA/1338 and Add.l and A/1850) and in the debate in the GeneralAssembly on the Commission's report (ibid., Fourth Session, SixthCommittee, 168th-173rd and 175th-183rd meetings, and ibid.,Plenary Meetings, 270th meeting).

129 The States which spoke in favour of the principle in the debateincluded the Byelorussian Soviet Socialist Republic, Chile, France,Israel, Italy, Turkey, the USSR, the United Kingdom and theUnited States of America. The United States delegation indicatedthat in its view the principle would be more appropriately placedin a convention on State responsibility (Official Records of theUnited Nations Conference on the Law of Treaties, First Session—Summary records of the plenary meetings and of the meetings ofthe Committee of the Whole (United Nat ions publication, SalesN o . E.68.V.7), pp . 150 et seq., 28th meeting of the Commit tee ofthe Whole, paras . 49-70 and 29th meeting.

130 The text was approved at the 72nd meeting of the Commit teeof the Whole (ibid., pp. 427-428, 72nd meeting of the Commit teeof the Whole, paras . 29-48).

131 Ibid., Second Session, Summary records of the plenary meetingsand of the Committee of the Whole (United Nat ions publication,Sales N o . E.70.V.6), pp. 53-54, 13th meeting, paras . 30-40. Therepresentative of Venezuela declared that article 27 was simply arepetition of article 46, paragraph 1 of which provides t ha t : " AState may no t invoke the fact that its consent to be bound by atreaty has been expressed in violation of a provision of its internallaw regarding competence to conclude treaties as invalidating itsconsent unless that violation was manifest and concerned a ruleof its internal law of fundamental importance." The representativeof I ran considered that article 27 contradicted article 46.

132 See, besides the course by Sir Gerald Fi tzmaurice cited above(see foot-note 103), C. Eagleton, op. cit., pp . 63 et seq.; A. Verdross,Volkerrecht, 5th ed. (Vienna, Springer, 1964), p . 114; H . W. Briggs,The Law of Nations, 2nd ed. (London, Stevens, 1953), pp . 62-63;E. Vitta, La responsabilita internazionale dello Stato per atti legislativi(Milan, Giuffre, 1953), pp . 29 et seq.; M. Sorensen, "Principes dedroit international publ ic" , Recueil des cours . .. 1960-111 (Leyden,Sijthoff, 1961), vol. 101, pp . 110-111; I . Brownlie, Principles ofPublic International Law (Oxford, Clarendon Press, 1966), pp . 32-33;L. Cavare, Le droit international public positif, 3rd ed., brought upto date by J.-P. Queneudec (Paris, Pedone, 1967), vol. I, p p . 177et seq.; and Insti tute of the State and of Law of t he Academy ofSciences of the Soviet Union, op. cit., p . 428.

188 Yearbook of the International Law Commission, 1973, vol. 11

fications of State responsibility prepared by individualsor private institutions.183

(14) There is no exception to the principle that it isonly by reference to an international legal obligationbinding a State that an act of that State can be charac-terized as internationally wrongful. The rule that thecharacterization given by international law cannot beaffected by the characterization of the same act ininternal law makes no exception for cases where rulesof international law require the State to conform tothe provisions of internal law, for instance by applyingto aliens the same treatment as to nationals. It is truethat in such a case once the State has applied the pro-visions of internal law, there can be no internationallywrongful act; but even then, it is not the fact of keepingconduct in conformity with internal law that precludesits international wrongfulness, but the fact that conductwhich thus conforms to internal law constitutes, bythe very fact of its conformity, the performance of theinternational obligation. Conversely, if a State has, byits act or omission, contravened provisions of internallaw, there will be an internationally wrongful act inasmuchas the violation of internal law constitutes at the sametime a breach of the international legal obligation.

(15) As regards the wording of the rule, the SpecialRapporteur had proposed: "The municipal law of aState cannot be invoked to prevent an act of that Statefrom being characterized as wrongful in internationallaw". A formulation of that kind, which is to be foundin much the same terms in most draft codes on Stateresponsibility, including article 5 of the draft adoptedon first reading at The Hague Conference of 1930 andarticle 27 of the Vienna Convention on the Law ofTreaties, has the merit of making the true purpose ofthe rule immediately and clearly apparent, namely, thatStates cannot use their municipal law as a means ofescaping international responsibility. However, the ma-jority of the Commission took the view that such aformulation sounded too much like a rule of procedureand would be inappropriate for a statement of principledesigned to appear in chapter I of the draft. Moreover,in the opinion of some members, the proposed wordingwas open to misunderstanding. They referred to casesin which the international responsibility of the Stateconsists essentially in the requirement that its conductshall be consistent with that required by municipallaw. It was observed that in such cases it would notbe incorrect to say that "municipal law can be invoked"to show that there has been no internationally wrongfulact. Other members pointed out that, even in such casesas those, it was not municipal law as such which wasinvoked but the international law which referred tomunicipal law. Moreover, the purpose of the article

was to take account of cases in which there would bea contradiction between the provisions of municipallaw and the requirements of international law. In anyevent the Commission, in its concern to avoid anypossible doubt, preferred to use a formulation whichon the one hand, like those adopted for the three pre-vious articles, avoids all resemblance to a rule of pro-cedure and, on the other, refrains from mentioning thepossibility or impossibility of "invoking municipallaw".

(16) The question was raised in the Commission whetherthe article ought to refer just to the case where anact must be characterized as internationally wrongfulbecause it is found to be such by international law eventhough lawful under internal law, or whether it oughtalso to mention the case where an act is lawful underinternational law even though a violation of internallaw. The first sentence of article 4 covers both aspectsof the principle. The second sentence stresses the aspectwhich the Commission considers the more important,namely, the need to prevent the State from attemptingto use its internal law as a device for escaping its inter-national responsibility.

(17) With regard to terminology, for the French ver-sion the Commission preferred the expression "droitinterne" to such other expressions as "legislation interne"and "hi interne", first because it balances the expression"droit international" used in the same article, and secondlybecause it covers, without any possible doubt, all validprovisions of the internal legal order, whether writtenor unwritten, constitutional or legislative rules, admin-istrative decrees, judicial decisions, etc.134 For the Englishversion, the term "internal law" was preferred to "munici-pal law", first because the latter is sometimes used ina narrower sense, and secondly because the ViennaConvention on the Law of Treaties speaks of "internallaw".

CHAPTER II

THE "ACT OF THE STATE" ACCORDINGTO INTERNATIONAL LAW

Commentary

(1) The purpose of article 3 of chapter I of these draftarticles, dealing with general principles, is to formulatethe two essential conditions for the existence of aninternationally wrongful act, the first being the presenceof conduct consisting of an action or omission attributableto the State under international law, and the second,the fact that such conduct constitutes a breach of aninternational obligation. The possibility of attributinga given conduct to the State, or, in other words, of

133 Cf. article 5 of the draft code prepared by the Japanese branchof the International Law Association and the Kokusaiho Gakkwai;article I, second paragraph of the draft prepared by the Instituteof International Law at Lausanne in 1927; article 2 of the draftprepared by the Harward Law School in 1929 and article 2, para-graph 2 of the draft prepared in 1961; article 7 of the draft preparedby the Deutsche Gesellschaft fur Volkerrecht in 1930; article 4,third paragraph of the draft prepared by Strupp in 1927; and article 4of the draft prepared by Roth in 1932. (See foot-note 14 above.)

134 The Third Committee of the 1930 Codification Conferencepreferred for the French text the expression "droit interne" to theexpression "disposition de sa loi interne" used by the PreparatoryCommittee in the Bases of Discussion. Similarly, at the UnitedNations Conference on the Law of Treaties, the Drafting Committeegenerally preferred to speak of "internal law" ("droit interne","derecho interno") rather than "constitution" ("constitution","constitucion") or "laws" ("legislation", "leyes").


considering the conduct as "an act of the State", hasbeen advanced as the subjective element of the inter-nationally wrongful act. The next step is to determinewhen, in what circumstances and in what conditionssuch an attribution can be made, in other words, todetermine what "conduct" is regarded by internationallaw as an "act of the State" for the purpose of establishingthe possible existence of an internationally wrongfulact.(2) The operation that consists of "attributing", forthis purpose, an act to the State as a subject of inter-national law is clearly one which is based on criteriadetermined by international law and not on the mererecognition of a link of factual causality (cansalitenatureUe). Though itself a normative operation, "attri-bution" does not imply any juridical characterizationof the act to be attributed, and it must be clearly dis-tinguished from the subsequent operation, which consistsof ascertaining whether that act is wrongful. It is solelyconcerned with establishing when there is an act ofthe State, when it is the State which must be consideredto have acted.

(3) Since the State can act physically only throughactions or omissions by human beings or human collec-tivities, the problems posed by this fundamental notionof the "act of the State" which have to be resolvedin the present chapter have a common denominator.The basic task is to establish when, according to inter-national law, it is the State which must be regardedas acting: what actions or omissions can in principlebe considered as conduct of the State, and in whatcircumstances, such conduct must have been engagedin, if it is to be actually attributable to the State as asubject of international law. In that connexion, it mustfirst of all be pointed out that, in theory, there is nothingto prevent international law from attaching to theState the conduct of human beings or collectivitieswhose link with the State might even have no relationto its organization; for example, any actions or omissionstaking place in its territory could be considered actsof the State. In practice, however, we find that what is,as a general rule, attributed to the State at the inter-national level are the acts of members of its "organ-ization", in other words, the acts of its "organs" or"agents". This is the basic principle. The purpose ofthe present chapter of the draft will, in fact, be to defineand complete this principle, to determine its scope andlimitations and the derogations to which it is subject.

(4) From this point of view, once the basic rule hasbeen laid down which attributes to the State the actsof its organs, the question arises whether the activitiesof certain categories of organs should be excludedfrom the "acts of the State". Another point to beconsidered is whether or not, in addition to the con-duct of organs which form part of the State machinery,it is appropriate to attribute to the State, at the inter-national level, the conduct of organs of public institutionsother than the State itself, or of persons who, thoughnot "organs" in the proper sense of the term, engagein what are in fact public activities, or of organs ofanother subject of international law placed at the dis-posal of the State in question. Attention will then be

given to the question whether or not it is appropriateto regard as "acts of the State" the conduct of organsor, more generally, of persons whose activities are inprinciple attributed to the State, when such conductis adopted in circumstances which cast doubt on thelegitimacy of that attribution. This question arises, forexample, where an organ exceeds its competence oracts contrary to the requirements of internal law con-cerning its activities. We next have to consider thetreatment to be accorded to the conduct of privateindividuals acting solely in that capacity, and the basison which the conduct of State organs in connexionwith acts by private individuals may be regarded as asource of responsibility. Lastly, consideration will begiven to the case of the conduct of organs of othersubjects of international law acting in the territory ofthe State and to problems relating to the retroactiveattribution to a State of acts of a victorious insurrectionarymovement.

(5) The first point to be stressed in connexion withthe problems to be dealt with in this chapter is the needto avoid identifying too closely the situations referredto here with others that are basically different despitecertain common general features. International lawtakes the machinery or "organization" of the Stateinto consideration for purposes which greatly exceedthose of the attribution to the State of an internationallywrongful act. All activities of the State, including acti-vities which consist of performing "acts" properly socalled, i.e. producing manifestations of will with aview to attaining legal consequences, raise the problemof the attribution to the State of certain conduct.Attaching to the State a manifestation of will whichis valid, for example, in order to establish its partici-pation in a treaty is, however, in no way identifiablewith the operation which consists of attributing to theState particular conduct for the purpose of imputingto it an internationally wrongful act entailing inter-national responsibility. It would be wrong to adoptthe same criteria in these two cases and to proposean identical solution based on a general and commondefinition of "act of the State". In the context of theresponsibility of States for internationally wrongful acts,the "act of the State" has its own specific characterand must be defined according to particular criteria.The title of this chapter must therefore be understoodin relation to the object and scope of the draft articlesas a whole.

(6) If the substance of the problem is to be under-stood and appropriate rules formulated, it is also desir-able to avoid a double confusion which is at the rootof the difficulties encountered by writers. In the firstplace, a clear distinction must be drawn between theoperation of attributing to the State, for any particularpurposes, the conduct adopted in certain circumstancesby its "organs", i.e. by those which belong to its "organ-ization", and the operation which consists of actuallyestablishing that "organization", i.e. determining whatare the individual and collective "organs" which, takenas a whole, make up the State machinery. In the secondplace, the necessary distinction must be drawn betweenthe attribution of an act to the State as a subject of

190 Yearbook of the Internationa] Law Commission, 1973, vol. II

international law and to the State as a subject of internallaw. Failure to take this double distinction sufficientlyinto account explains why some of the best-knowntrends in legal literature have led to an impasse.135

(7) The "organization" of the State does not and cannotmean anything but the organization which the Stateautonomously gives itself. It follows that the "organs"of the State can only be those which the State considersas such within its own legal system and whose actionit regulates for its own purposes. This regulation, whichcan be established only by the State, is obviously aprerequisite for the operation of attributing to the Statethe conduct of a member of its "organization". It isnot by attributing to the State a certain action oromission that one gives the authors of that action oromission the status of organs of the State. The attri-bution can be made because they have that status,because they have the legal capacity to act on behalfof the State. In other words, the status of organ possessedby the author of the conduct being examined is thepremise or condition, and not the effect, of treatingthat conduct as an "act of the State".

(8) This statement is even more valid when a certainconduct is attributed to the State as a subject of inter-national law and not as a subject of internal law. Theformation and regulation of the organization of theState are not governed by the international order. Theorganization of the State is not created but presupposedby international law.136 In other words, the fact offorming part of the organization of the State is regardedin international law merely as a premise. That doesnot in any way mean that in international law it isnot sometimes necessary to interpret or apply internallaw; it is nevertheless true that international law merelypresupposes the organization which the State has adoptedwithin its internal legal order and regards it simply asa condition on which it bases some of its findings.137

(9) Three main conclusions emerge from what hasbeen said above. The first concerns the meaning whichshould be given to the statement that, in internationallaw, the conduct of the "organs" of the State subjectof that law is attributed to the State in order to imposeresponsibility upon it, if appropriate. This propositionsimply means that, in international law, the conductof those who have the status of "organs" in the internallegal order, and solely in that order, is in principleconsidered as an "act of the State" and is attributed

135 Fo r a detailed analysis of these trends, the solutions proposedand the difficulties they raise, see the preliminary considerations inchapter II of the Special Rapporteur ' s third report ( Y e a r b o o k . . .1971, vol. I I (Part One), p . 233, document A/CN.4/246 and Add. 1-3).

136 See, for example, M. Marinoni, La responsabilita degli Statiper gli atti dei loro rappresentanti secondo il diritto internazionale(Rome, Athenaeum, 1913), pp . 117-118; R. Ago, "Le delit inter-nat ional" , Recueil des cours .,. (Joe. cit.), pp . 464-465; G. Sperduti,Lezioni di diritto internazionale (Milan, Giuffre, 1958), p. 109;J.-P. Queneudec, op. cit., pp . 29-30.

137 One must not be misled by the use of the term "referral"("renvoj") which is sometimes employed to describe this pheno-menon. The structures of the State are not "received" into theinternational legal system and do not acquire the character of legalstructures in it, even if international law takes them into consi-deration for its own purposes.

to the State.138 It does not in any way mean that theirstatus becomes an "international" status by virtue ofsuch attribution.

(10) The second conclusion is that international lawremains free when it takes into consideration the situationexisting in the internal legal order. The attribution ofan act to a State in international law is wholly independentof the attribution of that act in national law.139 Thetreatment of certain acts as "act of the State" in inter-national law may be based on criteria which are bothwider and more limited than the corresponding treat-ment in internal law. In international practice, forexample, the conduct of organs of public institutionsother than the State and the conduct engaged in byorgans of the State in excess of their competence istreated as an act of the State subject of internationallaw. But the independence of international law in attribu-ting an act to a State does not in any way mean thatinternational law intends to introduce into the Statemachinery "organs" which the State itself has notdesignated as such in its own legal system.

(11) The third and last conclusion flows automaticallyfrom the acknowledged freedom international lawpossesses with regard to the determination of the con-ditions in which it considers some particular conductas an "act of the State" at the international level. Thisdetermination has to be made solely on the basis ofan examination of what actually happens in the life ofinternational society, independently of the positionsadopted at the national level and the theoretical examplesdrawn from national experience, on which so manyjurists have focused their attention.

(12) The Commission has thus set itself the task ofdetermining what conduct international law actuallyattributes to the State, basing itself primarily on thefindings which result from an examination of Statepractice and the decisions of international tribunals. Itis this method by which the Commission will mainlybe guided in drawing up the provisions of chapter IIof this draft. The solutions derived from practice andjudicial decisions will be supplemented, where necessary,by elements of progressive development. As indicatedin the introduction to this chapter,140 the Commissionhas only been able to consider and adopt the first two

138 F rom this point of view the situation remains the same in theexceptional cases in which international law limits the freedom of theState to establish its organization. In such cases, the limitativeinternational rule does not itself in any way establish the machineryof the State or part of that machinery. It merely imposes on theState an obligation which the State respects in choosing to adoptone type of organization rather than another. The organs establishedin conformity with such an international obligation are not organs ofinternational law.

139 T j l e distinction between the two attributions and their inde-pendence of one another is stressed by many writers. See for example,J. G. Starke, he. cit., p . 110; A. Ross, op. cit., p . 251 ; T. Meron,"International Responsibility of States for Unauthorized Acts oftheir Officials", The British Year Book of International Law, 1957,vol. 33, (London, 1958), p . 88; P. Reuter, La responsabilite inter-nationale... {op. cit.), p . 87; C. F . Amerasinghe, "Imputabilityin the Law of State Responsibility for injuries to Aliens", Revueegyptienne de droit international (Cairo), vol. 22,1966, pp. 96 and 104.



articles of chapter II, i.e. articles 5 and 6 of the draft,at the twenty-fifth session. It intends to complete theadoption of the articles in the chapter after consideringthe relevant proposals by the Special Rapporteur inhis third and fourth reports.

Article 5. Attribution to the Stateof the conduct of its organs

For the purposes of the present articles, conduct of anyState organ having that status under the internal law ofthat State shall be considered as an act of the State con-cerned under international law, provided that organ wasacting in that capacity in the case in question.

Commentary

(1) Observation of what actually happens in inter-national life makes it possible to say at the outset thatthe acts of "organs" of the State, that is, of all theindividual or collective entities which have the statusof organs of the State under its internal law, are, asa general rule at least, considered as "acts of the State";that is to say, they are attributed to the State in inter-national law for the purpose of being characterized,where appropriate, as internationally wrongful acts.Article 5 propounds the rule which flows from thatstatement.

(2) This rule is clearly a fundamental one, a point ofdeparture; it is not absolute and, above all, not exclusive.It should not lead automatically to far-fetched conclusions.There is no a priori implication that all acts of the "organs"of the State should be automatically considered as"acts of the State" under international law. Moreespecially, there is no implication that, when one attri-butes to a State, as a subject of international law, theconduct of what are considered its "organs" accordingto its internal legal order, one exhausts the list of typesof conduct to which international responsibility mayattach. Taken a stage further, an analysis of the factscan and indeed does show that certain acts of individualor collective entities which do not have the status of"organs" of the State may likewise be attributed to theState in international law and thus become a sourceof responsibility to be borne by that State.

(3) The principle that the State is responsible forbreaches of obligations committed by its own organshas long been unequivocally recognized in internationaljudicial decisions. In most cases, the principle has simplybeen presupposed and taken for granted. In addition,however, to the very numerous cases in which theprinciple has been reaffirmed implicitly, there are othersin which it has been expressed in clear and explicitterms. In the Moses case, for example, decided on14 April 1871 by the Mexico-United States MixedClaims Commission set up under the Convention of4 July 1868, the umpire Lieber made the followingstatement: "An officer or person in authority representspro tanto his government, which in an internationalsense is the aggregate of all officers and men in

authority".141 An even clearer assertion is to be foundin seven arbitral awards made at Lima on 30 September1901 in the Affaire des reclamations des sujets it aliensresidant an Perou, concerning the damage suffered byItalian subjects during the Peruvian civil war of 1894-1895. Each of these awards reiterates that: " . . . a uni-versally recognized principle of international law statesthat the State is responsible for the violations of thelaw of nations committed by its agents" [translationfrom French].142 The principle of attributing to theState, for the purposes of international responsibility,the acts of its "organs", "leaders" and "agents" is alsoconfirmed in several other arbitral awards.143

(4) In State practice, we should note the positionsadopted in connexion with specific disputes, and alsothe replies by Governments to points III, IV and Vof the request for information addressed to them bythe Preparatory Committee for the 1930 Conference.144

These replies unanimously convey, explicitly or implicitly,the juridical conviction that the actions or omissionsof organs of the State which give rise to a failure tofulfil an international obligation must be attributed tothe State and be characterized as internationally wrong-ful acts of the State. The Third Committee of the Con-ference adopted in first reading, by the unanimousvote of the States represented, an article 1 which providesthat international responsibility shall be incurred by aState as a consequence of "any failure on the part ofits organs to carry out the international obligations ofthe State . . .".145

(5) All the draft codes on international responsibilityprepared by public institutions or learned societiesformulate in similar terms the principle that the conductof the organs of the State is attached to the State for the

141 J. B. Moore, History and Digest of the International Arbi-trations to which the United States has been a Party (Washington,D.C., U.S. Government Printing Office, 1898), vol. Ill, p. 3129.

1 4 2 See Uni t ed N a t i o n s , Reports of International Arbitral Awards,vol. XV (pp. cit.), p . 399 (Chiessa claim); p . 401 ;(Sessarego claim);p . 404 (Sanguinetti c laim); p . 407 (Vercelli claim); p . 408 (Queiroloclaim); p . 409 (Roggero claim); p . 411 (Miglia claim).

113 F o r example, in the award made on 8 May 1902 by thearbitral tr ibunal established by the Protocol of 19 December 1901between the United States of America and El Salvador in connexionwith the claim of the Salvador Commercial Company (ibid., p . 477);in the undated decision of the Italy-Venezuela Mixed ClaimsCommission constituted under the Protocols of 13 February and7 May 1903 in the Sambiaggio case (ibid., vol. X (United Nat ionspublication, Sales N o . 60.V.4), p . 512; in the undated award of theNetherlands-Venezuela Mixed Claims Commission constitutedunder the Protocol of 28 February 1903 in the / . N. Henriquez case(ibid., pp . 714-715); and in the award rendered on 9 May 1934 bythe arbi t ra tor Algot Bagge in the Finnish Shipowners Case (GreatBritain v. Finland) (ibid., vol. I l l (United Nat ions publication,Sales N o . 1949.V.2), p . 1501).

144 League of Nat ions , Bases of Discussion .. ., vol. I l l (op. cit.),pp . 25 et seq., 41 et seq.; 52 et seq.; Supplement to Volume III(op. cit.), p p . 2-3, 6 et seq. The three points of the request forinformation refer respectively to acts of the legislative organ, actsrelating to the operat ion of the tribunals and acts of the executiveorgan.

145 Yearbook... 1956, vol. II , p . 225, document A/CN.4/96,annex 3.


purpose of determining international responsibility.146

The draft codes prepared by individual jurists containclauses couched in similar terms.147

(6) Finally, the attribution to the State of the acts ofits organs for the purpose of determining its inter-national responsibility is accepted by writers on inter-national law, who are practically unanimous on thispoint,148 despite the differences of opinion which separatethem on the issue whether all the actions or omissionsof the "organs" of the State, and they alone, may ormay not be attributed to it as "acts of the State".

(7) In this connexion, however, a fundamental distinc-tion must always be borne in mind. The element oftruth which exists in the identification of the organwith the State should not make us forget that the organsof the State are ultimately composed of human beingswho are still capable of acting on their own account.It is therefore necessary to ascertain in each specificcase whether, on that occasion, they have acted asorgans of the State, under cover of that status, or asprivate individuals. The practical difficulties which maysometimes arise in this connexion in no way detractfrom the clarity of the distinction from the standpointof principles.

(8) This conclusion, together with the corollary which inprinciple precludes attribution to the State, as acts which

146 See for example, article 1 of the draft prepared by the Japanesebranch of the International Law Association and the KokusaihoGakkwai ; article I of the resolution adopted in 1927 by the Instituteof International Law; article 7 (a) and (b) of the draft prepared in1929 by the Harward Law School; article 15 of the draft preparedin 1961 by the Harward Law School; article 1 of the draft preparedin 1930 by the Deutsche Gesellschaft fur Vblkerrecht; article V ofthe principles of International Law that Govern the Responsibilityof the State in the Opinion of the Latin American Countries,prepared in 1962 by the Inter-American Juridical Commit tee;article II , I I I and IV of the Principles of International Law thatGovern the Responsibility of the States in the Opinion of the UnitedStates of America, prepared in 1965 by the Inter-American JuridicalCommittee; and para. 169 of the Restatement of the Law of theAmerican Law Institute. (See foot-note 14 above.)

147 See, for example, article 1 of the draft prepared by Struppin 1927 and article 1 of the draft prepared by Roth in 1932. See alsoN o . II of the Bases of Discussion prepared in 1965 by Mr. GarciaAmador , Special Rapporteur of the International Law Commission,as well as chapter II of his preliminary draft of 1957 and article 12of his revised preliminary draft of 1961. (See foot-note 14 above.)

148 F o r example, E. M. Borchard, The Diplomatic Protection ofCitizens Abroad, or the Law of International Claims (New York,Banks Law Publishing, 1928), p . 189; K. Strupp, "Das Volker-rechtliche Delikt", (he. dt.), pp. 35 et seq.; A. Decenciere-Ferrandiere, La responsabilite des Etats a raison des dommagessubis par des etrangers (Paris, Rousseau, 1925), pp. 64 et seq.;C. Eagleton, op. dt., p. 44; H. Kelsen, "Unrecht und Unrechtsfolgein Volkerrecht", Zeitschrift fiir Offentliches Recht (Vienna), vol. XII,fasc. X, October, 1932; p. 504 et seq. (in the case of this writer,however, special aspects of his ideas should be treated with reserve);J. G. Starke, loc. cit., p. 106; L. Oppenheim, op. cit., pp. 340 et seq.;B. Cheng, op. cit., pp. 192 et seq.; H. Accioly, "Principes generauxde la responsabilite internationale d'apres la doctrine et la juris-prudence", Recueil des cours... 1959-1, vol. 96 (Leyden, Sijthoff,I960), p. 371; A. Ulloa, Derecho intemacional piiblico, 4th ed.(Madrid, Ediciones Iberoamericanas, 1957, vol. II, p. 256; I. vonMunch, op. cit., p. 170; C. F. Amerasinghe, "Imputability..."(loc. cit.), p. 95; D. Levin, Otvetsvenost gosusarstv... (op. cit.),pp. 69 et seq.; E. Jimenez de Arechaga, op. cit., p. 544; Instituteof the State and Law of the Academy of Sciences of the SovietUnion, op. cit., p. 426; V. N. Elynychcv, "Problema vnenenia..."(loc. cit.), p. 87.

may give rise to responsibility, of actions or omissionscommitted in a purely private capacity by the humanbeings who compose its organs, is unanimously recognizedin international practice and in international judicialdecisions. It will therefore suffice to recall here just afew cases of that recognition. For instance, Governmentstook a very clear position on the point at the 1930Codification Conference. Point V, No. 2 [d), of the requestfor information submitted by the Preparatory Committeeof the Conference concerned the question whether theState becomes responsible for "acts or omissions ofofficials unconnected with their official duties". All theGovernments which dealt with that point in their repliesconsidered that the State was not responsible in sucha case.149 This criterion was subsequently accepted bythe State representatives at the Conference and wasimplicitly incorporated in the text of article 8 of thedraft adopted in first reading by the Third Committeeof the Conference.150

(9) The same idea has been explicity expressed onmore than one occasion in arbitral awards and decisionsof international and national claims commissions. Oneof the decisions most frequently quoted is that con-cerning the Bensleys case, handed down on 20 February1850 by the Commission established under the Act ofCongress of the United States of America on 3 March1849. The following reason was given for the rejectionof the claim for reparation submitted for the detentionof a young United States boy in the house of a Mexicangovernor: "The detention of the boy appears to havebeen a wanton trespass committed by the governor,under no colour of official proceedings, and withoutany connexion with his official duties." 151 The French-Mexican Claims Commission established under theConvention of 25 September 1924, in its decision of7 June 1929 concerning the Caire case, stated that theonly case in which the State was not responsible was that"in which the act had no connexion with the officialfunction and was, in fact, merely the act of a privateindividual" [translation from French].152 In many othercases the criterion to which we are referring is not statedso explicitly, but nonetheless appears to have beenimplicity accepted. This is so, for example, in the Putnamcase,153 and the Morton case,154 decided by the UnitedStates of America/Mexico General Claims Commissionestablished by the Convention of 8 September 1923.Generally speaking the various draft codes, whetherpublic or private in origin, set forth the principle ofattribution to the State, as a subject of international law,of the acts of its organs, but take care to exclude conductadopted in a purely private capacity from that attribution.

148 League of Nations, Bases of Discussion ..., vol. I l l (op. cit.),pp . 82 et seq. and Supplement to Volume HI (op. cit.), pp. 3, 17.

160 Yearbook... 1956, vol. I I , p . 226, document A/CN.4/96,annex 3.

161 See J. B. Moore , History and Digest... (op. cit.), vol. HI ,p . 3018. See also the decision in the Case of the Castelains, handeddown by the France-United States Mixed Commission establishedunder the convention of 15 January 1880 (ibid., pp. 2999-3000).

162 United Nations, Reports of International Arbitral Awards,vol. V (United Nations publication, Sales No . 1952.V.3), p . 531.

163 Ibid., vol. IV (op. cit.), pp. 151 et seq.164 Ibid., pp. 428 et seq.


Some of these drafts even make this exclusion the subjectof a separate provision.155 In the case of theoreticalworks, almost all writers mention the need for such anexclusion, and some of them even lay particular stresson it.156

(10) The questions raised by actions or omissions onthe part of persons acting in a private capacity who atthe same time have the status of "organs" of the Statewill be considered in their various aspects in the moregeneral context of the discussion of the conduct of privateindividuals which appears in a later part of this chapterof the draft articles. At that point, it will be necessaryto see whether or not purely private conduct can, incertain circumstances, be attributed to the State for thepurpose of the draft articles on the international responsi-bility of States. At this initial stage, our only concernneed be to ensure that the demarcation line which wehave drawn is indicated with the necessary clarity. Itmust be pointed out forthwith, however, that the caseof purely private conduct should not be confused withthe quite different case of an organ functioning as suchbut acting ultra vires, or, more generally, in breach of therules governing its operation. In this latter case, whichwill also be discussed in this chapter, the organ is never-theless acting in the name of the State. This distinctionhas been clearly drawn in international arbitral decisions,for example, in the award in the Mallen case, renderedon 27 April 1927 by the United States of America/MexicoGeneral Claims Commission. In that decision, twoseparate events were successively taken into consideration:firstly, the action of an official acting in a private capacity,and secondly, another action committed by the sameofficial acting in his official capacity, although in anabusive way.157 In other cases, the distinction was lesseasy to apply and the tribunals concerned had to makea close examination of the facts before they could ruleon the nature of the act.138 It should be noted, however,

166 This is so in the case of the draft prepared by the KokusaihoGakkwai (article 2, second paragraph) and of the draft prepared bythe Deutsche Gesellschaft filr Volkerrecht (article 1, para. 4, secondsentence. (See foot-note 14).

166 See, for example, C. Eagleton, Responsibility of States ...(op. cit.), pp. 58-59; B. Cheng, op. cit., pp. 197 et seq.;F. V. GarciaAmador. Second report on State responsibility ( Yearbook . . . 1957,vol. II, pp. 109-110, document A/CN.4/106); G. Schwarzenberger,International Law (op. cit.), pp. 615 et seq.; D . P. O'Connell,International Law (London, Stevens, 1965), vol. II, p. 1045; J.-P. Qu6-neudec, La responsabilite Internationale de VEtat... (pp. cit.), pp. 82et seq.

157 United Nations Reports of International Arbitral Awards,vol. IV (op. cit.), pp. 173 et seq.

158 For example, in the Corrie case, which was decided on5 March 1929 by the United States of America/Mexico GeneralClaims Commission, and in the Gordon case, settled on 8 October1930 by the same Commission (ibid., pp. 416-417 and pp. 586et seq.). One sphere in which the application of the distinction wehave mentioned has sometimes given rise to difficulties is that oflooting and destruction committed by soldiers who were not actingunder the command of officers. In the case concerning D. Earnshawand other (the Zafro Case), settled on 30 November 1925 by aGreat Britain-United States arbitral tribunal (ibid., vol. VI (UnitedNations publication, Sales No. 1955.V.3) pp. 163 et seq.), the actionof the men concerned was regarded as a private act. The decisionsin other cases are less definite. On this point, see A. V. Freeman,"Responsibility of States for Unlawful Acts of their Armed Forces",Recueil des cours..., 1955-11, vol. 88 (Leyden, SijtofF, 1956), pp. 325et seq.

that the principle of the distinction has never beenquestioned.

(11) Having regard to the foregoing considerations,article 5 provides that:

For the purposes of the present articles, conduct for any Stateorgan having that status under the internal law of that State shallbe considered as an act of the State concerned under internationallaw, provided that organ was acting in that capacity in the casein question.

By adopting this formula, the Commission has leftthe door open for the subsequent establishment of otherrules, resulting from further observations, which will bethe subject of other articles of chapter II of the draftand will serve to extend or, where appropriate, restrictthe rule stated in article 5. The purpose of the openingproviso ("For the purposes of the present articles") is tospecify that article 5 concerns the attribution to theState of the conduct of its organs, not in general butsolely in the context of the responsibility of States forinternationally wrongful acts.

(12) The wording "conduct of any State organ havingthat status . . . " was preferred to other wording, suchas "the conduct of a person or group of persons who . . .possess the status of organs of the State", in order toavoid entering into theoretical problems concerning thedefinition of the notion of an organ itself. The Commis-sion did not consider it necessary to add the words"an action or omission" after the word "conduct", sincethe latter is already defined as an action or omission inarticle 3 (a) of the draft. In order to make it clear thatthe status of organ must have existed at the time of theconduct in question, the concluding verb ("was acting")has been placed in the past tense.

(13) Finally, without prejudice to the different meaningswhich the term "organ" may have, particularly in theinternal public law of different legal systems, it wasagreed that the article should employ only the term"organ" and not the two terms "organ" and "agent".The term "agent" would seem to denote, especially inEnglish, a person acting on behalf of the State ratherthan a person having the actual status of an organ.Actions or omissions on the part of persons of this kindwill be dealt with in another article of this chapter.

Article 6. Irrelevance of the position of the organin the organization of the State

The conduct of an organ of the State shall be consideredas an act of that State under international law, whetherthat organ belongs to the constituent, legislative, executive,judicial or other power, whether its functions are of aninternational or an internal character and whether it holds asuperior or a subordinate position in the organization ofthe State.

Commentary

(1) It was pointed out that the rule laid down in article 5concerning the attribution to the State of the conduct ofits organs was only an initial rule which would have tobe supplemented by other rules. The purpose of thepresent article is to make it clear that the position of an


organ of the State in the organization of that State doesnot enter into consideration for the purpose of attributingthe organ's conduct to the State—that is to say, ofconsidering such conduct as an "act of the State" underinternational law. In other words, the purpose of article 6is to indicate the scope of the expression "any Stateorgan" as used in article 5.

(2) In the Commission's opinion there are three separatequestions to be considered in relation to the problemsraised by this article. The first is whether only the conductof a State organ responsible for "external" relations canconstitute a wrongful act of the State under internationallaw or whether the conduct of an organ performing"internal" functions may also enter into considerationfor this purpose. The second is whether it is only theconduct of a "governmental" or "executive" organ of theState which can give rise to an internationally wrongfulact, or whether in fact no distinction should be madein this respect between an act or omission of such anorgan and an act or omission of a constituent, legislative,judicial or other body, whatever it may be. The third iswhether a distinction should or should not be made forthese purposes between the conduct of a "superior" andthat of a "subordinate" organ.

(3) With regard to the first question, it is an obsoletetheory that only an act or omission of an organ respon-sible for conducting the external relations of the Statecan constitute an internationally wrongful act of theState. On that theory, the State would be called upon toanswer only "indirectly" for the conduct of organsperforming internal functions, such as administrativeofficials or judges, just as it is for the actions of privateindividuals; it would be responsible only if one of itsorgans responsible for external relations had endorsedthe act or omission of the organ responsible for internalfunctions. This theory obviously resulted from confusionbetween the consideration of certain conduct as an inter-nationally wrongful act and the attribution to the Stateof a manifestation of will capable of constituting a validinternational legal act or establishing participation insuch an act. International judicial decisions and practiceshow that there is no justification for the theory. Indeed,for a long time now writers have mentioned it only inorder to reject it.159

(4) The second question may seem at first sight rathermore complex. The study of possible cases of inter-nationally wrongful acts on the part of particular organshas often been taken up separately in connexion withone or other of the main traditional branches of govern-ment: the legislature (or constituent power),160 the

159 For example Ch. de Visscher, "La responsabilite des Etats",Biblioteca Visseriana {op. cit.), p. 94, P. Reuter, "La responsabiliteinternationale" (be. cit.), pp. 86-87; I. von Munch, op. cit.,p. 170; J.-P. Queneudec, op. cit., pp. 41 et seq.

loo Various writers have devoted monographs or articles tointernational responsibility resulting from the acts of legislativeorgans. For example O. Hoijer, "La responsabilite internationaledes Etats en matiere d'actes legislatifs", Revue de droit international(Paris), 3rd year, vol. IV, 1929, pp. 577 et seq.; M. Sibert, "Contri-bution a I'etude des reparations pour les dommages causes auxetrangers en consequence d'une legislation contraire au droit desgens", Revue generate de droit international public (Paris), 3rdseries, vol. XV, vol. I, 1941-1945, pp. 5 et seq.; A. S. Bilge, La respon-

executive 181 and the judiciary.162 This procedure hasmade it possible to go thoroughly into certain questions,but has also certainly given rise to difficulties which havenot real bearing on the topic considered here, for mostsuch questions go far beyond the limits of the problemswhich arise in the context of chapter II of this draft.They often amount merely to asking whether the conductof a given organ does or does not objectively constitutea breach of an international obligation, rather thanwhether it should or should not be attributed to the Stateas a subject of international law. Sometimes they gobeyond the bounds of international wrong and responsi-bility. Moreover the Commission found that the divisionof powers was by no means so clear-cut in practice as itmight seem in theory and, in particular, that it wasunderstood very differently in the various legal andpolitical systems.

(5) For nearly a century there has not been a singleinternational judicial or arbitral decision which hasstated, or even implicitly accepted, the principle ofnon-responsibility of the State for the acts of its legislativeor judicial organs. On the contrary, the opposite principlehas been expressly confirmed in a number of decisionsand implicitly recognized in many others. Thus, in theaward of 8 May 1902 in the Salvador Commercial Companycase, the United States of America/El Salvador arbitra-tion tribunal, established under the Protocol of 19 De-cember 1901 endorsed the opinion that:

. . . a State is responsible for the acts of its rulers, whether theybelong to the legislative, executive or judicial department of theGovernment, so far as the acts are done in their official capacity.163

The Permanent Court of International Justice, in itsJudgement No. 7 of 25 May 1926 in the Case concerning

sabilite internationale des Etats et son application en matie're d'acteslegislatifs (Istanbul, Tsitouris, 1950); E. Vitta, "Responsabilita . . . "(loc. cit.), Similarly some general works contain a separate, detailedanalysis of the acts or omissions of the organs of the different"powers", and, especially, of legislative organs.

161 Questions relating to the responsibility of the State for theacts of administrative organs have been examined in detail bysuch writers as K. Strupp, "Das volkerrechtliche Delikt" (loc. cit.),pp. 85 et seq.; K. Furgler, op. cit., pp. 28 et seq.; and I. von Munch,op. cit., pp. 195 et seq. On the specific question of responsibilityfor the acts of armed forces, see A. V. Freeman, "Responsibilityof States . . . " (loc. cit.), pp. 267 et seq.

162 Among writers who have dealt with the international responsi-bility of States for the acts or omissions of their judicial organs,mention may be made of O. Hoijer, "Responsabilite internationaledes Etats en matiere d'actes judiciaires", Revue de droit international(Paris), 4th year, vol. V, 1930, pp. 115 et seq.; C. Th. Eustathiades,La responsabilite internationale de I'Etat pour les actes des organesJudiciaires et le probleme dit deni de Justice en droit international(Paris, Pedone, 1936); G. Pau, "Responsabilita internazionale delloStato per atti di giurisdizione", in Istituto di scienze giuridicheeconomiche e politiche della Universita di Cagliari, Studi economico-giuridici, vol. XXXIII (1949-1950) (Rome, Pinnar6, 1950), pp. 197et seq. There is also an abundant legal literature on the specificconcept of denial of Justice. In this context mention should bemade in particular of O. Rabasa, Responsabilidad internationaldel Estado con referenda especial a la responsabilidad por denegacionde justicia (Mexico, Imprenta de la Secretaria de Relaciones Exte-riores, 1933), and A. V. Freeman, International Responsibility ofStates for Denial of Justice (op. cit.).

163 United Nations, Reports of International Arbitral Awards,vol. XV (op. cit.), p. 477.


certain German interests in Polish Upper Silesia (Merits),affirmed the principle that:

From the standpoint of international law and of the Court whichis its organ, municipal l aws . . . express the will and constitute theactivities of States, in the same manner as do legal decisions oradministrative measures.184

More recently, the Franco-Italian Conciliation Com-mission, set up under article 83 of the Treaty of Peace of10 February 1947, expressed the following opinion in itsdecision of 7 December 1955 in the dispute concerning theinterpretation of article 79 of the Treaty of Peace:

Although in some arbitral awards of the XlXth century the opinionis expressed that the independence of the courts, in accordancewith the principle of the separation of powers generally rec-ognized . . . , excludes the international responsibility of the Statefor acts of the judiciary contrary to law, this theory now seems tobe universally and rightly rejected

by writers and by international judicial decisions.165

The possibility of attributing to the State acts com-mitted by its legislative 1 6 6 or judicial167 organs hasbeen accepted in a great many international awards.

(6) With regard to State practice, the Commissionfound no evidence that the thesis ,of the impossibilityof invoking international responsibility for acts oflegislative or judicial organs had ever been advanced,at least not for the last few decades. On the other handit noted that the possibility of invoking internationalresponsibility for such acts had been directly or indirectlyrecognized on many occasions.168 Countries which have

164 P.C.I.J., Series A, N o . 7, p . 19. See also the award of 23 July1927 made in the Chattin case by the United States/Mexico GeneralClaims Commission set up under the Convention of 8 September1923 (United Nations, Reports of International Arbitral Awards,vol. IV {op. cit.), p . 286).

165 United Nations, Reports of International Arbitral Awards,vol. XII I (United Nations publication, Sales No . 64.V.3), p . 438.

166 See, for example, the judgements and advisory opinionsrendered by the Permanent Court of International Justice in the casesconcerning settlers of German origin in the territory ceded by Germanyto Poland{P.C.I.J., Series B, N o . 6,1923, particularly pp. 35 et seq.)\the Treatment of Polish nationals in the Danzig Territory (idem,Series A/B, No . 44, 1932, particularly pp. 24-25, and Phosphatesin Morocco (idem, Series A/B, No . 74, 1938, particularly pp. 25-26);and those rendered by the International Court of Justice in theCase concerning the rights of nationals of the United States of Americain Morocco (I.C.J. Reports 1952, pp. 176 et seq.), the Case of themonetary gold removed from Rome in 1943 (ibid., 1954, pp. 19 et seq.,and particularly p. 32), and the Case concerning the application ofthe Convention of 1902 on the Guardianship of Infants (ibid., 1958,pp . 55 et seq.),

167 See for example the judgements and advisory opinions ofthe Permanent Court of International Justice in the Lotus case(P.C.I.J., Series A, No . 10, 1927, p . 24), the case concerning Thejurisdiction of the Courts of Danzig (idem, Series B, N o . 15, 1928,p. 24) and the Phosphates in Morocco case (idem., Series A/B,No . 74, 1938, particularly p . 28); and the judgement of the Inter-national Court of Justice in the Ambatielos case (I.C.J. Reports 1953,pp . 10 et seq., and particularly pp. 21 et seq.). Mention may also bemade of the decisions by the Arbitrator between Great Britain andSpain (1925) in the Case of British property in Spanish Morocco(United Nations, Reports of Internationql Arbitral Awards, vol. II(op. cit.), pp. 615 et seq., and particularly p. 646).

168 Fo r example, with regard to the acts of legislative organs,reference may be made to the opinions expressed respectively in anote dated 28 February 1913 from the British Ambassador atWashington addressed to the United States Secretary of State

been parties to disputes, either as claimants or as respon-dents, have always explicitly or implicitly acknowledgedthe possibility of attributing to the State an internationallywrongful act due to the conduct of a legislative or judicialorgan, just as much as one due to the conduct of anexecutive or administrative organ.169 The most conclusiveevidence of the opinion of States on this point is to befound in the opinions they expressed on the occasion ofthe 1930 Codification Conference. The request forinformation submitted to Governments by the PreparatoryCommittee contained questions concerning "Acts of thelegislative organ" (point III), "Acts relating to theoperation of the tribunals" (point IV) and "Acts of theexecutive organ" (point V). Governments replied in theaffirmative to each of the questions asked on the abovethree points.170 Equally concordant opinions wereexpressed later by the representatives who took part inthe discussions in the Third Committee of the 1930Conference.171 Three of the ten articles adopted onfirst reading by the Committee at the end of the dis-cussions established the responsibility of the State ensuingfrom an act or omission of its legislative (article 6),executive (article 7) or judicial (article 9) organs in-compatible with its international obligations.172

(7) With regard to the doctrine, apart from differencesof approach to the question which sometimes lead tocomplications, the writers agree that the conduct of anyState organ, whatever branch of the State "power" it maybelong to, can be considered as an "act of the State"for the purposes of characterization as an internationallywrongful act.173 Codification drafts, both official andprivate, follow the same basic principles. They differonly in the wording of the formulations proposed.

(A. D. McNair, The Law of Treaties (Oxford, Clarendon Press,1961), p. 548) and in a note by the Legal Department of the Quaid'Orsay dated 23 January 1937 (A.-Ch. Kiss, Repertoire de lapratique francaise en matiere de droit international public (Paris,C.N.R.S., 1965), vol. I l l , p. 526). With regard to the acts of judicialorgans, reference may be made to the report sent on 26 February1887 by Secretary of State Bayard to the President of the UnitedStates of America (J. B. Moore, A Digest of International Law,vol. VI (Washington, U.S. Government Printing Office, 1906),p . 667).

169 See for example Ch. de Visscher's case for Poland when anadvisory opinion was requested from the Permanent Court ofInternational Justice concerning The treatment of Polish nationals andother persons of Polish origin or speech in the Danzig territory(P.C.I.J., Series C, No . 56, p . 246).

170 League of Nations, Bases of Discussion, vol. I l l (op. cit.),pp. 25 et seq., 41 et seq. and 52 et seq.; and Supplement to Volume III(op. cit.), pp. 2-3 and 6 et seq.

171 See League of Nations, Acts of the Conference ..., vol. IV(op. cit.), pp. 32 et seq., 59 et seq., 103 et seq. and 152 et seq.

172 See Yearbook... 1956, vol. I I , pp. 225 and 226, documentA/CN.4/96, annex 3.

173 In addition to the writers mentioned above in foot-notes 160,161 and 162, this view has been expressed by, for example,C. Eagleton, The Responsibility of States... (op. cit.), pp . 59 etseq.; H . Accioly, Principes generaux de la responsabilite' interna-t i o n a l e . . . (he. cit.), pp. 371 et seq.; Colombo, "Responsabilidaddel Estado por los actos de los poderes Iegislativo, ejecutivo yjudicial", Revista de ciencias juridicas y sociales (Santa Fe, 1954),pp. 5 et seq.; C. F . Amerasinghe, " I m p u t a b i l i t y . . . " (loc. cit.),pp . 63 et seq.; E. Jimenez de Arechaga, International Responsibility(op. cit.), pp . 544 et seq.; and Institute of the State and Law ofthe Academy of Sciences of the Soviet Union, op. cit., pp. 427-428.


(8) In the Commission's view, therefore, there is noneed to appeal to ideas of progressive development ofinternational law in order to reach the conclusion thatacts or omissions of any State organ—whether of theconstituent or legislative power, the executive or thejudiciary—can be attributed to the State as inter-nationally wrongful acts. No one now supports the oldtheories that legislative organs were an exception becauseof the "sovereignty" of Parliament, or judicial organsbecause of the principles of the independence of thejudiciary or the authority of res judicata. Cases in whichStates resorted to arguments based on principles of thatkind, and found arbitral tribunals willing to accept them,belong to the distant past.174 Today the opinion that therespective positions of the different branches of govern-ment are important only in constitutional law and of noconsequence whatsoever in international law, whichregards the State as a single entity, is firmly rooted ininternational judicial decisions, the practice of Statesand the literature of international law.

(9) It remains to consider the last of the three questionsmentioned at the beginning of the commentary to thepresent article, whether a further distinction, based on thesuperior or subordinate rank of the organ in the Statehierarchy, should be made between State organs inorder to determine those organs, an act or omission ofwhich may be attibuted to the State as an internationallywrongful act of the State. The view that the acts oromissions of "subordinate" ("subsidiary" or "minor")organs can be attributed to the State as a possible sourceof international responsibility, just as well as the actsor omissions of higher organs, is now generally accepted.But this has not always been so.

(10) One school of thought,175 which in its day foundfavour with certain legal writers in the United Statesand has continued to attract some support,176 holdsthat in international law only the conduct of "superior"organs is attributable to the State. It maintains that theState cannot be held responsible for an act by a "sub-ordinate" organ except in cases where it appears thatthe conduct of that organ has been explicitly or implicitlyendorsed by superior organs; in fact, that the State isresponsible only for the acts of its superior organs.177

(11) This thesis, however, encountered some reserva-tions and even firm opposition in the legal literature of

174 The theory of the independence of the judiciary was advancedby Portugal t o avoid recognizing its international responsibilityin the Croft (1856) and Yuille, Shortridge and Co. (1861) cases(see A. de Lapradelle and N . Politis, Recueil des arbitrages inter-nationaux (Paris, Pedone, 1923), vol. II , pp . 22 et seq., 101 et seq.,and 103).

175 The principal spokesman for this school of thought wasE. M . Borchard, Diplomatic Protection ... (op. cit.), pp . 189 et seq.

176 See in particular C. Fenwick, International Law, 3rd ed.(New York , Appleton-Century-Crofts, 1948), pp . 280 et seq. Seealso G. Von Glahn, Law among Nations: An Introduction to PublicInternational Law, 2nd ed. (London, MacMil lan , 1970), p . 227.

177 This opinion is reflected in article 7 (b) of the draft conventionprepared by the Harward Law School under Borchard 's personalsupervision in 1929 for the Hague Codification Conference (seeHarward Law School, Research in International Law (Cambridge,Mass . , 1929), pp . 157 et seq. and 165 et seq.).

the time.178 In particular, it seems to have escaped thenotice of its advocates that the point relied on in specificcases to prove that the conduct of a particular organcould not be attributed to the State was not the "sub-ordinate" or "subsidiary" character of the organ but thefact that the organ had acted with a complete disregardfor the law and the limits of its own even apparentauthority.379 The thesis seems to have originated from aconfusion with the requirement of exhaustion of localremedies and its effect on responsibility. The essence ofthe "local redress rule" is that a breach of an inter-national obligation cannot, at least as a general rule,be deemed to have finally taken place so long as a singleone of the organs capable of fulfilling the obligations hasnot yet taken any steps in the matter. Now it is obviousthat such a situation will occur more frequently when theorgan which acted first is of inferior rank. Nevertheless,the legal position does not change because of a mereincrease in probability. Whether it is an act or an omissionof a higher organ, if remedies are available against itsinjurious conduct, the responsibility of the State will notnormally be involved until those remedies have beenexhausted.180

(12) The Commission recognized, however, that on thisquestion diplomatic practice and arbitral awards between1850 and 1914 were far from clear and unanimous.Some support for the view that the conduct of minorState organs cannot be attributed to the State derivesfrom the fact that the legal system in the United Statesof America, unlike—for—the example systems of con-tinental Europe, often provides in the case of injuriousacts by government officials, especially minor officials,for the possibility of personal recourse against the indi-vidual/organ, but not against the government as such.Hence diplomatic notes from the United States Govern-ment,181 or arbitral awards in disputes to which it was

178 For the clearest and best-documented opposition, seeC. Eagleton, Responsibility of States... (op. cit.), pp. 45 et seq.See also K. Strupp, Das volkerrechtliche Delikt (op. cit.), pp. 37-38(note 5); C. C. Hyde, International Law chiefly as Interpreted andApplied in the United States, 2nd ed. rev. (Boston, Little, Brown,1951), vol. 2, pp. 935-936; F. S. Dunn, The Protection of Nationals :a Study in the Application of International Law (London, OxfordUniversity Press, 1932), pp. 125 et seq.

179 For example, in a letter dated 14 August 1900 from Mr. Adee,the United States Secretary of State, addressed to Baron de Fava,the Italian Ambassador at Washington (J. B. Moore, A Digest...(op. cit.), p. 743), it is stated that the misconduct of petty officialsand agents had been committed outside the range not only oftheir real but even of their apparent authority.

1 8 0 It should also be noted that the idea of excluding the conductof minor organs from "act of State" certainly stems from a basicmisunderstanding due to the practice of stating the problem,not—as would be correct—in terms of attribution of such acts oromissions to the State, but directly in terms of responsibility.The conduct of any organ is attributable to the State as a subjectof international law, even in the case where such conduct is notsufficient in itself to generate international responsibility but mustbe accompanied by the conduct of other organs before their combinedconduct can be regarded as an internationally wrongful act and giverise to responsibility.

1 8 1 See, for example, the position taken by Cushing, Attorney-General of the United States, on a claim made against the UnitedStates Government for the loss of a vessel through the negligenceof a pilot at San Francisco (J. B. Moore, A Digest... (op. cit.),pp. 740-741).


a party,182 have sometimes pointed out that such personalrecourse was available to the plaintiff, and that he shouldnot apply to the State. An attitude of this kind could beinterpreted as indicating a failure to exhaust local rem-edies, but it could also be interpreted as expressingthe opinion that the acts of inferior organs could not beregarded as acts capable of being attributed to the State.That helps to explain the differences of opinion some-times noted in this connexion in the diplomatic corre-spondence exchanged before the First World Warbetween the United States Government and Governmentsof European countries.183

(13) Despite these uncertainties and the reasons forthem, there can be no doubt that pre-First World Wararbitral awards and diplomatic practice provide manyexamples of recognition of the principle of the attribu-tability to the State as a subject of international law ofthe acts and omissions of subordinate organs, and thatapplies also to decisions in disputes involving countriesof the American continent.184 At all events, the uncer-tainty which may have existed earlier seems to havedisappeared between the end of the First World War and1930. The prevailing view among Governments wasclearly expressed first during the preparatory work, andthen during the actual proceedings, of the 1930 Codi-fication Conference. In the light of the replies receivedfrom Governments, the Preparatory Committee, in thebases of discussion which it prepared for the Conference,did not allow for any difference of treatment betweenhigher organs and subordinate organs. At the Conferenceitself, the question of organs of lower rank was consideredonly sporadically during the discussion,185 and no traceof it remained in the conclusions.

(14) International judicial practice over the last fewdecades does not seem to furnish any examples of dissent-ing opinions. The attribution to the State of the conductof its subordinate organs was clearly affirmed after theFirst World War by a series of claims commissions,

182 See for example the position taken by the United Statesmember of the United States/Mexico Mixed Commission establishedunder the Convention of 4 July 1968 in the Leichardt case (J. B.Moore, History and Digest... (op. cit.), vol. I l l , p. 3134).

183 The position of the Governments of European countriesamounted to regarding the acts and omissions of the State'ssubordinate organs as emanating from the State for the purposesof generating its international responsibility. An expression ofthis view can be found, for example, in the instructions sent on8 March 1882 by Mancini, then Italian Minister for Foreign Affairs,to the Italian Minister to Peru (Societa Italiana per 1'OrganizzazioneInternazionale—Consiglio Nazionale delle Ricerche, La prassiitaliana di diritto internazionale (Dobbs Ferry, N.Y., Oceana, 1970),1st series (1861-1887), vol. II, p . 862).

184 See for example the decision rendered by the Netherlands-Venezuela Mixed Commission established under the Protocolof 28 February 1903 in the Maal case (United Nations, Reports ofInternational Arbitral Awards, vol. X (op. cit.), p . 132). See also theMoses case referred to in paragraph (3) of the commentary toarticle 5.

185 The Mexican delegate proposed an amendment to basis ofdiscussion No. 12 (which later became article 8) to provide thatin the case of acts or omissions by subordinate officials, the Statewould not incur any international responsibility if it disavowedthe act and punished the guilty official. No State supported theMexican delegate's amendment and he withdrew it (League ofNations, Acts of the Conference... {op. cit.), pp. 82 et seq.).

such as the Mexico/United States of America GeneralClaims Commission established under the Conventionof 8 September 1923,186 and the United States ofAmerica/Panama General Claims Commission estab-lished under the agreement of 28 July 1926.187 Afterthe Second World War the Italian/United States ofAmerica, Franco-Italian and Anglo-Italian ConciliationCommissions established under article 83 of the Treatyof Peace of 10 February 1947 often had to consider theconduct of minor organs of the State, such as admin-istrators of enemy property, mayors and police officials,and always agreed to treat the acts of such persons asacts attributable to the State.188 As regards the mostrecent legal literature it can be said that, with one ortwo exceptions, international lawyers trained in the mostwidely different systems of law all support the viewthat the conduct of even minor organs can be regardedas an act of the State.189 It should also be noted thatnone of the codification drafts, official or private—withthe exception of the 1929 Harvard Draft already men-tioned—makes any distinction between higher and sub-ordinate organs. The same applies to the new 1961Harvard Draft and to the Restatement of the Law bythe American Law Institute.

(15) The Commission can therefore conclude, withregard to the third question, that there is no place todayfor the idea, which once found favour, of making adistinction between organs of the State according totheir rank. There is no reason to consider only theconduct of higher officials as conduct of the State forpurposes of international responsibility. Such a restriction,as we have seen, is almost unanimously rejected. Evenif that were not so, such a view would have to be opposedfrom the standpoint of the progressive development ofinternational law. To accept such a distinction would beto introduce a serious element of uncertainty into inter-national relations.

(16) In conclusion, the Commission unanimously re-cognized that, for the purposes of the present draft,there was no justification for any distinction betweendifferent categories of State organs. The unity of theState requires that the acts or omissions of all its organs,individual or collective, should be regarded as acts oromissions of the State at the international level, i.e. as"acts of the State" capable of entailing its international

186 See in particular the awards rendered by the Commission inthe Roper case (United Nations, Reports of International ArbitralAwards, vol. IV {op. cit.), p . 145 et seq.), the Massey case (ibid.,p . 155 et seq.) and the Way case (ibid., p . 400).

187 Baldwin case (ibid., vol. VI (United Nations publication,Sales No. 1955.V.3), p . 328 et seq.).

188 See for example, inter alia, the Currie case (1954), (ibid.,vol. XIV (op. cit.), p . 24), the Differend concernant Vinterpretationde I'article 79 du Traite de Paix avec I'ltalie (1955) (ibid., vol. XIII(op. cit.), pp. 431-432) and the Differend Dame Mosse (1953) (ibid.,pp. 492 et seq.).

189 See for example A. V. Freeman, "Responsibility of S t a t e s . . . "(loc. cit.), pp. 284 et seq.; B. Cheng, op. cit., pp. 195-196; P . Reuter,"La responsabilite Internationale" (op cit.), p . 92; T. Meron," R e s p o n s a b i l i t y . . . " (he. cit.), pp. 97-98; H. Accioly "Principesgeneraux de la r e s p o n s a b i l i t e . . . " (loc. cit.), pp. 392-393; I. vonMunch, op. cit., pp. 202-203; J.-P. Qudneudec, op. cit., pp. 55 etseq.; C. F . Amerasinghe, " Impu tab i l i t y . . . " (loc. cit.), p . 106;and Institute of the State and Law of the Academy of Sciencesof the Soviet Union, op. cit., p. 427.


responsibility. It would, moreover, be absurd to supposethat there was a category of organs specially designatedfor the commission of internationally wrongful acts.Any organ of the State, if it is materially able to engagein conduct that conflicts with an international obligationof the State, may be the source of an internationallywrongful act of the State. Of course there are organswhich, by the nature of their duties, will in practice havemore opportunities than others in this respect, but thediversity of international obligations does not permitany a priori distinction between organs which cancommit internationally wrongful acts and those whichcannot.

(17) It might have been thought that the rule laiddown in article 5 already made it sufficiently clear thatthe position of an organ in the organization of the Stateis irrelevant for the purpose of attributing conduct of

the organ to the State. The Commission, however, feelsit necessary to include an express provision on that pointin the draft. It must be sure that certain views heldin the past and mentioned in this commentary will notbe put forward again in the future, whether supportedby the same old arguments or by new ones. Article 6provides a safeguard against such an eventuality andat the same time reflects purely and simply the presentstate of international law in the matter. With regard tothe formulation of the rule to be laid down, the Com-mission considered that the substance of the rule wouldbe most clearly expressed by a single consolidatedformula. The text it adopted for article 6 is thereforebased on this criterion. The Commission wishes toemphasize that the enumeration of the "powers" in thetext of the article is not exhaustive; indeed, this shouldbe clear from the words "or other" after the words"constituent, legislative, executive, judicial".

Chapter III

SUCCESSION OF STATES IN RESPECT OF MATTERS OTHER THAN TREATIES

A. Introduction

59. The introduction to this chapter briefly reviewspast work on the question of succession of States inrespect of matters other than treaties, and examinessome general questions relating to the draft articles whichthe Commission began to prepare at its twenty-fifthsession.

1. HISTORICAL REVIEW OF THE COMMISSION'S WORK

(a) Division of the question of successioninto three separate topics

60. As mentioned in the Commission's report on itstwenty-fourth Session 190 the Commission, at its nine-teenth session, in 1967, made new arrangements 191 fordealing with the topic "Succession of States and Govern-ments", which was among the topics it had selected forcodification in 1949,192 and decided to divide the topicamong more than one special rapporteur, the basis forthe division being the three main "headings" of thebroad outline of the subject laid down in the reportsubmitted in 1963 by its Sub-Committee on Successionof States and Governments.193 Those three headingswere as follows:

180 Yearbook... 1972, vol. II , pp. 223 et seq., document A/8710/Rev. l , paras. 14 et seq.).

191 For a detailed account of the historical background of thetopics as a whole, see Yearbook.. . 1968, vol. II , pp . 213 et seq.,document A/7209/Rev.l, paras. 29-42) and Yearbook... 1969,vol. II , pp . 222 et seq., document A/7610/Rev.l, paras. 20-34).

182 Yearbook... 1949, p . 281), document A/925, para. 16).183 Yearbook ... 1963, vol. II, p . 260, document A/5509, annex II.

(a) Succession in respect of treaties;(b) Succession in respect of rights and duties resulting

from sources other than treaties; and(c) Succession in respect of membership of inter-

national organizations.

61. In 1967, the Commission also appointed SirHumphrey Waldock Special Rapporteur for successionin respect of treaties and Mr. Mohammed BedjaouiSpecial Rapporteur for succession in respect of rightsand duties resulting from sources other than treaties.It decided to leave aside, for the time being, the thirdheading, namely succession in respect of membershipof international organizations.194

(b) Adoption by the Commission in 1972 of provisionaldraft articles on succession of States in respect oftreaties62. Between 1968 and 1972, Sir Humphrey Waldock

submitted to the Commission five reports on successionof States in respect of treaties.193 In 1972, at its twenty-fourth session, the Commission adopted, in the light ofthose reports, a set of 31 provisional draft articles onthe topic,198 which were transmitted in the same yearto Governments of Member States for their comments,in accordance with articles 16 and 21 of the Commission'sStatute.197

194 Yearbook ... 1967, vol. II, p. 368, document A/6709/Rev.l,paras. 38-41.

135 Yearbook... 1972, vol. II, p . 224, document A/8710/Rev.l,paras. 17-21.

196 Ibid., p. 230, chap. II, section C.197 Ibid., p. 225, para. 23.


(c) Preliminary work on succession of States in respectof matters other than treaties

63. To facilitate the study of the question of succession,the Secretariat has, since 1962, prepared and distributedseveral documents and publications 198 in accordance withthe Commission's requests. Most of these documents andpublications deal exclusively with succession in respectof treaties, while others concern succession in respect ofmembership of international organizations. Some, how-ever, are more general in nature and include informationon the practice relating to succession of States in respectof matters other than treaties. The publications concernedare: (a) a study entitled "Digest of the decisions of inter-national tribunals relating to State succession" 199 anda supplement thereto; 200 (b) a study entitled "Digest ofdecisions of national courts relating to succession ofStates and Governments"; 201 and (c) a volume in theUnited Nations Legislative Series entitled Materials onsuccession of States,202 containing the informationsupplied by Governments of Member States in reply tothe Secretary-General's request. A supplement to thatvolume was circulated as a document203 at the twenty-fourth session of the Commission.

64. Following his appointment as Special Rapporteur,2 04

Mr. Bedjaoui submitted to the Commission in 1968 afirst report on succession of States in respect of rightsand duties resulting from sources other than treaties.205

In it, he considered inter alia the scope of the subjectwhich had been entrusted to him and, accordingly, theappropriate title for the subject, as well as variousaspects into which it could be divided. Following thediscussion of that report, the Commission in the sameyear, at its twentieth session, took several decisions,one of which concerned the scope and title of the topicand another the priority to be given to one particularaspect of succession of States.

(i) Scope and title of the topic

65. Endorsing the recommendations contained in thefirst report by the Special Rapporteur, Mr. Bedjaoui,the Commission considered that the criterion for delimi-tation of the topic entrusted to him and the topic ofsuccession in respect of treaties should be "the subject-matter of succession". It decided, in accordance withthe Special Rapporteur's suggestion, to delete from thetitle of the topic all reference to sources in order to avoidany ambiguity regarding the delimitation of the topicentrusted to the Special Rapporteur. The Commissionaccordingly changed the title of the topic and replacedthe original title "Succession in respect of rights andduties resulting from sources other than treaties" by the

title "Succession in respect of matters other thantreaties".206

66. This decision was confirmed by the General As-sembly in paragraph 4 (b) of its resolution 2634 (XXV),which recommended that the Commission should con-tinue its work with a view to making "progress in theconsideration of succession of States in respect of mattersother than treaties".207 The absence of any reference to"succession of Governments" in that recommendationby the General Assembly reflects the decision taken bythe Commission at its twentieth session to give priorityto State succession and to consider succession of Govern-ments, for the time being, "only to the extent necessaryto supplement the study on State succession".208

(ii) Priority given to succession of States in economic andfinancial matters

67. As mentioned above, the first report by Mr. Bedjaouireviewed the various particular aspects of the topic ofsuccession of States in respect of matters other thantreaties. The report of the Commission on the work ofits twentieth session notes in this connexion that, duringthe debate,some members of the Commission referred to certain particularaspects of the topic (public property; public debts; territorialproblems; legal regime of the predecessor State; status of theinhabitants; acquired rights) and made a few preliminary commentson them.

It adds that, in view of the breadth and complexityof the topic,the members of the Commission were in favour of giving priorityto one or two aspects for immediate study, on the understandingthat this did not in any way imply that all the other questionscoming under the same heading would not be considered later.209

The report also notes that the predominant view ofmembers of the Commission was that the economicaspects of succession should be considered first. Itstates:At the outset, it was suggested that the problems of public propertyand public debts should be considered first. But, since that aspectappeared too limited, it was proposed that it should be combinedwith the question of natural resources so as to cover problems ofsuccession in respect of the different economic resources (interestsand rights) including the associated questions of concession rightsand government contracts (acquired rights). The Commissionaccordingly decided to entitle that aspect of the topic "Succession ofStates in economic and financial matters" and instructed the SpecialRapporteur to prepare a report on it for the next [twenty-first]session.210

68. The second report by Mr. Bedjaoui,211 submittedat the twenty-first session of the Commission, wasentitled "Economic and financial acquired rights and

1 9 8 Ibid., para. 24.1 9 9 Yearbook... 1962, vol. I I , p . 131, document A/CN.4/151.2 0 0 Yearbook .. . 1970, vol. II , p . 170, document A/CN.4/232.2 0 1 Yearbook... 1963, vol. I I , p . 95, document A/CN.4/157.2 0 2 United Nations publication, Sales No . E/F.68 V.5.2 0 3 A/CN.4/263.2 0 1 See para. 61 above.2 0 5 Yearbook... 1968, vol. I I , p . 94, document A/CN.4/204.

2 0 6 Ibid., p . 216, document A/7209/Rev.l , para. 46.207 See para. 70 below.2 0 8 Yearbook . . . 1963, vol. II , p. 224, document A/5509, para. 57.2 0 9 Yearbook... 1968, vol. I I , pp. 220 and 221, document

A/7209/Rev.l , paras. 73 and 78.2 1 0 Ibid., p. 221, para. 79.211 Yearbook . . . 1969. vol. II , p. 69, document A/CN.4/216/

Rev. l .


State succession". The report of the Commission onthe work of that session notes that during the discussionon the subject most of the members were of the opinionthat the topic of acquired rights was extremely contro-versial and that its study, at a premature stage, couldonly delay the Commission's work on the topic as awhole. They considered that "an empirical methodshould be adopted for the codification of succession ineconomic and financial matters, preferably commencingwith a study of public property and public debts". 212

The report notes that the Commission "requested theSpecial Rapporteur to prepare another report containingdraft articles on succession of States in respect of economicand financial matters". It further records that "theCommission took note of the Special Rapporteur'sintention to devote his next report to public propertyand public debts".a is

(iii) Reports by the Special Rapporteur on succession ofStates to public property

69. Between 1970 and 1972, Mr. Bedjaoui submittedthree reports to the Commission—his third report214

in 1970, fourth 215 in 1971 and fifth 21° in 1972. Eachof these reports dealt with succession of States to publicproperty and contained draft articles on the subject.Being occupied with other tasks, the Commission wasunable to consider any of these reports during its twenty-second (1970), twenty-third (1971) or twenty-fourth (1972)sessions. It did, however, include a summary of thethird and fourth reports in its report on the work of itstwenty-third session 217 and an outline of the fifth reportin its report on the work of its twenty-fourth session.218

70. At the twenty-fifth (1970), twenty-sixth (1971) andtwenty-seventh sessions of the General Assembly, duringthe Sixth Committee's consideration of the reports ofthe International Law Commission, several representa-tives expressed the wish that progress should be madewith the study on succession of States in respect ofmatters other than treaties.219 On 12 November 1970,the General Assembly adopted resolution 2634 (XXV),in paragraph 4 (b) of which it recommended that theCommission should continue

its work on succession of States, taking into account the views andconsiderations referred to in General Assembly resolutions 1765

212 Ibid., p . 228, document A/7610/Rev.l , para. 61 .213 Ibid., pp. 228-229, para. 62.214 Yearbook... 1970, vol. I I , p . 131, document A/CN.4/226.215 Yearbook.. .1971, vol. II (Part One), p . 157, document

A/CN.4/247 and A d d . l .216 Yearbook ... 1972, vol. I I , document A/CN.4/259.217 Yearbook ... 1971, vol. II (Part One), pp. 314-344, document

A/8410/Rev.l , paras. 77-98.218 Yearbook... 1972, vol. I I , p . 323, document A/8710/

Rev. l , para . 71 .219 Official Records of the General Assembly, Twenty-fifth Session,

Annexes, agenda item 84, document A/8147, para 72; ibid., Twenty-sixth Session, Annexes, agenda item 88, document A/8537, para. 135;ibid., Twenty-seventh Session, Annexes, agenda item 85, documentA/8892, para . 194.

(XVII) 2 2° of 20 November 1962 and 1902 (XVIII) 221 of 18 Novem-ber 1963, with a view t o . . . making progress in the considerationof succession of States in respect of matters other than treaties.

On 3 December 1971, in paragraph 4 (a) of part Iof its resolution 2780 (XXVI), the General Assemblyagain recommended that the Commission should make"progress in the consideration of succession of States inrespect of matters other than treaties". Lastly, on 28 No-vember 1972, in paragraph 3 (c) of part I of its resolu-tion 2926 (XXVII), the General Assembly recommendedthat the Commission should "continue its work onsuccession of States in respect of matters other thantreaties, taking into account the views and considerationsreferred to in the relevant resolutions of the GeneralAssembly".

71. In 1973, for the present session of the Commission,Mr. Bedjaoui submitted a sixth report (A/CN.4/267)222

dealing, like his three previous reports, with successionof States to public property. The sixth report revisesand supplements the draft articles submitted earlierin the light, inter alia, of the provisional draft onsuccession of States in respect of treaties adopted bythe Commission in 1972.223 The results of this recastingare submitted by the Special Rapporteur in two seriesof draft articles, the articles in the second series beingnumbered in sequence after those in the first.

72. The first series of draft articles concerns questionsbearing on the topic entrusted to the Special Rapporteuras a whole and is entitled "Preliminary provisionsrelating to succession of States in respect of mattersother than treaties". It contains articles 1, 2 and 3.These articles define the scope of the draft articles,the cases of succession covered by them and the meaningof certain terms, including "succession of States".

73. The second series of draft articles is concernedexclusively with succession of States to public propertyand is entitled "Draft articles on succession to publicproperty". It contains articles 4 to 40, arranged inseven parts.

74. Parts one and two, containing articles 4 to 8,deal with general questions bearing on the whole topic

220 The General Assembly was referring in particular to para. 3 (c)of resolution 1765 (XVII), in which the Assembly recommendsthat the Commission should;

"Continue its work on the succession of States and Govern-ments, taking into account the view expressed at the seventeenthsession of the General Assembly and the report of the Sub-Committee on the Succession of States and Governments [seeparagraph 60 above], with appropriate reference to the viewsof States which have achieved independence since the SecondWorld War ; " .221 The General Assembly was referring, inter alia, to operative

paragraph 4 (c) of resolution 1902 (XVIII), in which the Assemblyrecommends that the Commission should:

"(c) Continue its work on the succession of States and Govern-ments, taking into account the views expressed at the eighteenthsession of the General Assembly, the report of the Sub-Committeeon the Succession of States and Governments [see paragraph 60above] and the comments which may be submitted by Govern-ments, with appropriate reference to the views of States whichhave achieved independence since the Second World War," .222 See p . 3 above.223 See para. 62 above.


of succession of States to public property, such as thesphere of application of the articles in the second series,the definition and determination of public property,the transfer of public property as it exists, the date ofits transfer and the general treatment of public propertyaccording to ownership.

75. Part three, consisting of articles 9 to 11, sets forththe provisions common to all types of succession ofStates—the general principle of the transfer of Stateproperty, rights in respect of the authority to grantconcessions, and succession to public debt-claims.

76. Part four, consisting of articles 12 to 31, sets forththe provisions peculiar to each type of succession ofStates. These provisions deal, for each type considered,with questions relating to currency and the privilege ofissue, the treasury and public funds, archives and publiclibraries, and property situated outside the transferredterritory. The Special Rapporteur has been guided, inpart four, by the typology adopted by the Commissionin its provisional draft articles on succession of Statesin respect of treaties.224 The specific characteristics ofhis subject led him, however, to formulate this typologyin a slightly different manner.

77. Part five (articles 32 to 35), part six (articles 36to 39) and part seven (article 40) comprise special pro-visions concerning public establishments, territorialanthorities and property of foundations.

(d) Preparation of draft articlesby the Commission at its twenty-fifth session

78. At its twenty-fifth session, the Commission continuedits consideration of succession of States in respect ofmatters other than treaties and began the preparationof draft articles on the topic in the light of Mr. Bedjaoui'ssixth report. At its 1219th to 1229th meetings, it con-sidered draft articles 1 to 7 contained in the sixth report,and also the commentaries to these articles. At its1231st and 1232nd meetings, it considered the newarticle 9 (A/CN.4/L.197) a25 submitted by the SpecialRapporteur to replace articles 8 and 9 of his sixth report.All these texts were referred to the Drafting Committee,and at its 1230th, 1231st, 1239th and 1240th meetingsthe Commission, on the basis of the Committee's report,adopted on first reading the text of articles 1 to 8 whichis reproduced below,226 for the information of theGeneral Assembly.

79. The Commission wishes to draw attention to thefact that the articles reproduced in this chapter areonly the first provisions of the draft which it proposesto prepare, a general outline of which is given below.227

It also wishes to emphasize the provisional natureof the text of these articles; this will be explained later.228

224 Ibid.225 See Yearbook ... 1973, vol. I, p . 152,1231st meeting, para. 68.226 See section B of the present chapter.227 See paras . 85-89.228 See para . 91 below.

2. GENERAL REMARKS CONCERNING THE DRAFT ARTICLES

80. At this initial stage in the preparation of the draftarticles on succession of States in respect of mattersother than treaties, the Commission will confine itselfto a brief consideration of four general questions, thefirst three of which relate to the draft as a whole, whilethe last relates to the provisions adopted during thepresent session.

(a) Form of the draft

81. As in the case of the codification of other topics 229

by the Commission, the form to be given to the codi-fication of succession of States in respect of mattersother than treaties cannot be determined until its studyof this subject has been completed. The Commission,in accordance with its Statute, will then formulatethe recommendations it considers appropriate. Withoutprejudging those recommendations, it has alreadydecided to set out its study in the form of draft articles,since it believes that this is the best method of discerningor developing the rules of international law in the matter.The draft is being prepared in a form which wouldpermit its use as a basis for a convention, if it weredecided that a convention should be concluded.

(b) The expression "matters other than treaties"

82. The expression "matters other than treaties" didnot appear in the titles of the three topics into whichthe question of succession was divided in 1967, namely,{a) succession in respect of treaties; (b) succession inrespect of rights and duties resulting from sourcesother than treaties, and (c) succession in respect ofmembership of international organizations.230 In 1968,in a report submitted at the twentieth session of theCommission, the Special Rapporteur for the secondtopic pointed out that, if the title of that topic (successionin respect of rights and duties resulting from sourcesother than treaties) were compared with the title of thefirst topic (succession in respect of treaties), it wouldbe found that the word "treaty" was considered, in thetwo titles, from two different points of view. In thefirst case the treaty was regarded as a subject-matterof the law of succession and in the second as a sourceof succession. The Special Rapporteur pointed outthat, apart from the lack of homogeneity, this divisionof the question had the drawback of excluding fromthe second topic all matters which were the subjectof treaty provisions. He noted that in many cases Statesuccession was accompanied by the conclusion of atreaty regulating inter alia certain aspects of the succession,which were thereby excluded from the second topic asentitled in 1967. Since these aspects did not come underthe first topic either, the Commission would have beenobliged, if this title had been retained, to leave a sub-stantial part of the subject-matter aside in its study onState succession.231

229 F o r example, see para . 36 above.230 See para . 60 above.231 Yearbook ... 1968, vol. I I , pp . 96-97, document A/CN.4/204,

paras . 18-21.


83. Consequently, the Special Rapporteur proposedtaking the subject-matter of succession as the criterionfor the second topic, and entitling it: "Succession inrespect of matters other than treaties".232 This proposalwas adopted by the Commission, which stated in itsreport on the work of the twentieth session that:

All the members of the Commission who participated in thedebate agreed that the criterion for demarcation between this topicand that concerning succession in respect of treaties was "thesubject matter of succession", i.e., the content of succession andnot its modalities. In order to avoid all ambiguity, it was decided,in accordance with the Special Rapporteur's suggestion, to deletefrom the title of the topic ail reference to "sources", since anysuch reference might imply that it was intended to divide up thetopic by distinguishing between conventional and non-conventionalsuccession.233

84. Until the study has been completed, the Com-mission will not be able to indicate precisely what"matters other than treaties" are included in the topic.

(c) Scheme of the draftand research to be undertaken

85. At its twentieth session, the Commission con-sidered that, in view of the magnitude and complexityof the topic, it would be well to begin by studying oneor two particular aspects, and it gave priority to economicand financial matters. At the same time it specifiedthat "this did not in any way imply that all the otherquestions coming under the same heading would notbe considered later".234 Accordingly, at its twenty-fifthsession, the Commission expressed the intention, sub-ject to any later decision, to include in the draft articlesas many "matters other than treaties" as possible.

86. At the present stage of its work, the Commissionintends to divide the draft into an introduction and anumber of parts. The introduction will contain thoseprovisions which apply to the draft as a whole, andeach part will contain those which apply exclusivelyto one category of specific matters.

87. At the present session, the Commission provisionallyadopted three articles for inclusion in the introductionand five articles for part I, entitled "Succession to Stateproperty".236 Mr. Bedjaoui's sixth report, on the basisof which these provisions were prepared, contains aseries of draft articles relating to public property ingeneral.236 It states that public property may be dividedinto the following three categories: property of theState; property of territorial authorities other thanStates or of public enterprises or public bodies; andproperty of the territory affected by the State succession.Wishing to consider these problems one by one, theCommission decided, after full discussion and on the

232 F o r the General Assembly's insertion of the words "ofStates" after the word "Succession" in the title of the topic, seepara . 66 above.

233 Yearbook... 1968, vol. I I , p p . 216 and 217, documentA/7209/Rev. l , para . 46.

231 See para . 67 above.235 See below, section B of the present chapter.236 See above, paras . 73-77.

proposal of the Special Rapporteur, to begin its studywith State property, to which part I of the draft articlesis devoted.

88. The Commission intends to include in section 1of part I those provisions which are common to allState property, whatever its nature and whatever thetype of succession envisaged. The other sections will bedevoted to specific types of succession or to particulartypes of State property.

89. After completing its study of State property, theCommission proposes to consider the other two categoriesof public property listed by the Special Rapporteur.Subject to any decisions it may take later, the Com-mission intends after that to move on to the study ofpublic debts. It will also decide in what order the othermatters included in the topic are to be considered.

90. To facilitate the execution of the programme ofwork described above, the Commission requested theSecretariat, in consultation with the Special Rapporteur,to compile documentation on international practice inregard to succession of States in respect of mattersother than treaties. This documentation would consistessentially of the relevant provisions of treaties andwould also reflect the state of international and nationaljurisprudence and, as far as possible, the practice ofGovernments and international organizations. It wouldcover a representative selection of cases of State suc-cession, primarily cases which have occurred since theSecond World War but without entirely neglectingearlier cases, and would be compiled with a view tothe publication by the Secretariat of a series of studiesof which the first would be devoted to succession ofStates to public debts. The Commission invited theSecretariat to request Governments and internationalorganizations to furnish all relevant information.

(d) Provisional nature of the provisions adoptedat the twenty-fifth session

91. The Commission deems it necessary, for the in-formation of the General Assembly, to place at thebeginning of its draft articles a series of general pro-visions defining in particular the meaning of the ex-pressions "succession of States" 237 and "Stateproperty".238 However, the final content of provisionsof this nature will depend to a considerable extent onthe results reached by the Commission in its furtherwork. The Commission therefore intends, during thefirst reading of the draft, to reconsider the text of thearticles adopted provisionally at the present session,with a view to making any amendments which may befound necessary.

B. Draft articles on succession of States in respectof matters other than treaties

92. The text of articles 1 to 8 and the commentariesthereto, adopted by the Commission at the twenty-fifth session on the proposal of the Special Rapporteur,

237 See sect. B , article 3 (a) below.238 Ibid., article 5.


are reproduced below for the information of the GeneralAssembly.

INTRODUCTION

Commentary

As the Commission has pointed out above,239 theintroduction to the draft articles contains provisionswhich relate, not to one particular aspect of successionof States in respect of matters other than treaties, butto the topic as a whole. At present it comprises articles 1,2 and 3.


The present articles apply to the effects of successionof States in respect of matters other than treaties.

Commentary

(1) This article corresponds to article 1 of the draftarticles on succession of States in respect of treaties,adopted by the Commission at its twenty-fourth session.24 °Its purpose is to limit the scope of the present draftarticles in two important respects.

(2) First, article 1 reflects the decision by the GeneralAssembly that the topic under consideration should beentitled: "Succession of States in respect of mattersother than treaties".241 In incorporating this wordingin article 1, the Commission intended to exclude fromthe field of application of the present draft articlesthe succession of Governments and the succession ofsubjects of international law other than States, anexclusion which also results from article 3 (a). TheCommission also intended to limit the field of applicationof the draft articles to "matters other than treaties".It has already considered the meaning of this term inthe introduction to the present chapter.212 It consideredthat it would be premature at the present stage of itswork to give a complete enumeration of the matterswhich will be covered by the draft when it is completed.

(3) Secondly, article 1 limits the field of applicationof the draft articles to the effects of succession of Statesin respect of matters other than treaties. Article 3 (a),specifies that " ' Succession of States' means the replace-ment of one State by another in the responsibility forthe international relations of territory". In using theterm "effects" in article 1, the Commission wished toindicate that it intends to draft provisions concerningnot the replacement itself but its legal effects, i.e., therights and obligations deriving from it.


The present articles apply only to the effects of a suc-cession of States occurring in conformity with internationallaw and, in particular, the principles of international lawembodied in the Charter of the United Nations.

Commentary

(1) This provision reproduces the terms of article 6of the draft articles on succession of States in respectof treaties.

(2) As it stated in the report on its twenty-fourthsession, the Commission, in preparing draft articlesfor the codification of general international law, normallyassumes that these articles are to apply to facts occurringor situations established in conformity with internationallaw. Accordingly, it does not as a rule state that theirapplication is so limited. Thus, when the Commission,at its twenty-fourth session, was preparing its draftarticles on succession of States in respect of treaties,several members considered that it was unnecessary tospecify in the draft that its provisions would applyonly to the effects of a succession of States occurringin conformity with international law.243

(3) Other members, however, pointed out that whenmatters not in conformity with international law calledfor specific treatment, the Commission had expressly sonoted. They cited as examples the provisions of thedraft on the law of treaties concerning treaties procuredby coercion, treaties which conflict with norms of juscogens, and various situations which might imply abreach of an international obligation. Accordingly, thosemembers were of the opinion that, in regard particularlyto transfers of territory, it should be expressly stipulatedthat only transfers occurring in conformity with inter-national law would fall within the concept of "suc-cession of States" for the purpose of the draft articlesbeing prepared. The Commission adopted that view.However, the Commission's report notes that

Since to specify the element of conformity with international lawwith reference to one category of succession of States might giverise to misunderstandings as to the position regarding that elementin other categories of succession of States, the Commission decidedto include amongst the general articles a provision safeguardingthe question of the lawfulness of the succession of States dealtwith in the present articles. Accordingly article 6 provides that thepresent articles relate only to the effects of a succession of Statesoccurring in conformity with international law.244

(4) At the twenty-fifth session the Commission decidedto include, in the introduction to the draft articles onsuccession of States in respect of matters other thantreaties, a provision identical with that of article 6of the draft articles on succession of States in respectof treaties. It took the view that there was now an

239 See para. 86 above.240 Sec para . 62 above.241 See paras. 65 and 66 above.242 See paras . 82-84 above.

213 Yearbook... 1972, vol. I I , p . 236, document A/8710/Rev. l ,chap. II , section C, paras . 1 and 2 of the commentary to article 6.

244 Ibid., para . 2 of the commentary to article 6.


important argument to be added to those which hadbeen put forward at the twenty-fourth session in favourof article 6: the absence from the draft articles on suc-cession of States in respect of matters other than treaties,of the provisions contained in article 6 of the draftarticles on succession of States in respect of treatiesmight give rise to doubts as to the applicability to thepresent draft of the general presumption that the textsprepared by the Commission relate to facts occurringor situations established in conformity with internationallaw.



(a) "succession of States" means the replacement ofone State by another in the responsibility for the inter-national relations of territory;

(b) "predecessor State" means the State which hasbeen replaced by another State on the occurrence of asuccession of States;

(c) "successor State" means the State which hasreplaced another State on the occurrence of a successionof States;

(d) "date of the succession of States" means the dateupon which the successor State replaced the predecessorState in the responsibility for the international relationsof the territory to which the succession of States relates.

Commentary

(1) This article reproduces the first words and sub-paragraphs (b), (c), (d) and (e) of article 2, paragraph 1,of the draft articles on succession of States in respectof treaties. As the title and the words in question indicate,the purpose of article 3 is simply to specify the sensein which the terms referred to are used in the presentdraft articles. For the time being the Commission hasincluded in article 3 only the terms appearing in theprovisions adopted at the twenty-fifth session. It intendsto add to it as further provisions are adopted. It willalso consider the possibility of including in article 3a second paragraph on the lines of article 2, paragraph 2,of the draft articles on succession of States in respectof treaties.

(2) Sub-paragraph (a) of article 3 reproduces thedefinition of the term "succession of States" containedin article 2, paragraph 1 (b), of the draft articles onsuccession of States in respect of treaties.

(3) The report of the Commission on the work of itstwenty-fourth session specified in the commentary toarticle 2 that the definition of succession of States givenin that article referred exclusively to the fact of thereplacement of one State by another "in the responsi-bility for the international relations of territory", leavingaside any connotation of inheritance of rights or obli-gations on the occurrence of that event. It went on tosay that the rights and obligations deriving from a

succession of States were those specifically providedfor in the draft articles on succession of States in respectof treaties. It further noted that the Commission hadconsidered that the expression "in the responsibilityfor the international relations of territory" was preferableto other expressions such as "in the sovereignty inrespect of territory" or "in the treaty-making competencein respect of territory", because it was a formulacommonly used in State practice and more appropriateto cover in a neutral manner any specific case, inde-pendently of the particular status of the territory inquestion (national territory, trusteeship, mandate, pro-tectorate, dependent territory, etc.). The report specifiedthat the word "responsibility" should be read in con-junction with the words "for the international relationsof territory" and was not intended to convey any notionof "State responsibility", a topic being studied separatelyby the Commission.245

(4) At the twenty-fifth session, the Commission decidedto include provisionally, in the draft articles in pre-paration, the definition of "succession of States" con-tained in the draft articles on succession of States inrespect of treaties. It considered that as far as possibleit was desirable that, where there were two separatesets of draft articles referring to one and the samephenomenon, they should give identical definitions ofit. Furthermore, article 1 supplements the definitionof "succession of States" by specifying that the draftarticles apply, not to the replacement of one State byanother in the responsibility for the international relationsof territory, but to the effects of that replacement. Atthe same time the Commission wishes to emphasizethat its decision is provisional246 and that it intendsto reconsider the definition of "succession of States"when it has completed its first reading of the presentdraft.

(5) Several members expressed reservations regardingthe Commission's decision to retain provisionally inthe present draft the definition of "succession of States"adopted at the twenty-fourth session for the draft onsuccession of States in respect of treaties. They con-sidered that it was already clear that this definitionwas too narrow to cover all aspects of succession ofStates in respect of matters other than treaties. It wasalso maintained that the expression "in the responsibilityfor the international relations of the territory" was notappropriate in the present draft and might give rise tomisunderstandings.

(6) Sub-paragraphs (b), (c) and (d) of article 3 reproducethe terms of sub-paragraphs (c), (d) and (e) of article 2,paragraph 1, of the draft articles on succession of Statesin respect of treaties. The meaning which they attributeto the terms "predecessor State", "successor State"and "date of the succession of States" derives, in eachcase, from the meaning given to the term "successionof States" in sub-paragraph (a), and would not seemto call for any comment.

245 Ibid., p . 231, paras. 3 and 4 of the commentary to article 2.246 See para. 91 above.


PART I

SUCCESSION TO STATE PROPERTY

Commentary

As stated above,247 the Commission decided to con-sider separately the three categories of public propertyenvisaged by the Special Rapporteur and to begin itsstudy with property in the first category, namely, Stateproperty. Part I of these draft articles is therefore con-cerned with State property.

SECTION 1. GENERAL PROVISIONS

Article 4. Scope of the articles in the present Part

The articles in the present Part apply to the effects ofsuccession of States in respect of State property.

Commentary

The purpose of this provision is simply to make itclear that the articles in Part I deal with only one categoryof public property, namely, State property. It shouldbe read in the light of article 1, which states that "Thepresent articles apply to the effects of succession ofStates in respect of matters other than treaties". Stateproperty constitutes, for the purposes of article 4 andPart I in general, a special category of the "mattersother than treaties" referred to in article 1.

Article 5. State property

For the purposes of the articles in the present Part,"State property" means property, rights and interestswhich, on the date of the succession of States, were,according to the internal law of the predecessor State,owned by that State.

Commentary

(1) The purpose of article 5 is not to settle what isto become of the State property of the predecessorState, but merely to establish a criterion for determiningsuch property.

(2) There are in practice quite a number of examplesof treaty provisions which determine, in connexionwith a succession of States, the State property of thepredecessor State, sometimes in detail. They includearticle 10 of the Treaty of Utrecht of 11 April 1713; 248

article II of the Treaty of 30 April 1803 between France

and the United States, for the sale of Louisiana; 249

article 2 of the Treaty of 9 January 1895, by whichKing Leopold ceded the Congo to the Belgian State; 26°article II of the Treaty of Peace of Shimonoseki of17 April 1895 between China and Japan,251 and article Iof the Convention of Retrocession of 8 November 1895between the same States; 262 article VIII of the Treatyof Peace of 10 December 1898 between Spain and theUnited States of America; 263 and the annexes to theTreaty of 16 August 1960 concerning the establishmentof the Republic of Cyprus.254

(3) An exact specification of the property to be trans-ferred by the predecessor State to the successor Statein two particular cases of succession of States is alsoto be found in two resolutions adopted by the GeneralAssembly in pursuance of the provisions of the Treatyof Peace with Italy of 10 February 1947.255 The firstof these, resolution 388 (V), was adopted on 15 December1950, with the title "Economic and financial provisionsrelating to Libya". The second, resolution 530 (VI),was adopted on 29 January 1952, with the title "Economicand financial provisions relating to Eritrea".

(4) No generally applicable criteria, however, can bededuced from the treaty provisions mentioned above,the content of which varied according to the circumstancesof the case, or from the two General Assembly reso-lutions, which were adopted in pursuance of a treatyand related exclusively to special situations. Moreover,as the Franco-Italian Conciliation Commission statedin an award of 26 September 1964, "customary inter-national law has not established any autonomouscriterion for determining what constitutes Stateproperty".256

(5) Up to the moment when the succession of Statestakes place, it is the internal law of the predecessorState which governs that State's property and determinesits status as State property. The successor State receivesit as it is into its own juridical order. As a sovereignState, it is free, within the limits of general internationallaw, to change its status, but any decision it takes inthat connexion is necessarily subsequent to the suc-cession of States and derives from its competence asa State and not from its capacity as the successor State.Such a decision is outside the scope of State succession.

(6) The Commission notes, however, that there areseveral cases in diplomatic practice where the successorState has not taken the internal law of the predecessor

247 See pa i a . 87 above.248 F . Israel, ed., Major Peace Treaties of Modern History,

1648-1967 (New York, Chelsea House publishers in associationwith McGraw-Hill Book Co., 1967), vol. I, pp. 207-208. Frenchtext in M. de Clercq, Recueil des Traites de la France (Paris, Durandet Pedone-Lauriel, 1880), vol. I (1713-1802), pp. 5-6.

249 G. F . de Martens, ed., Recueil desprincipaux traites (Gottin-gen, Librairie Dietrich, 1831), vol. VII, p. 709.

250 G. F . de Martens, ed., Nouveau recueil general de traites(Gottingen, Librairie Dietrich, 1896), 2nd series, vol. XXI, p. 693.

251 British and Foreign State Papers, vol. 86 (London, H.M.Stationery Office, 1900), p. 800.

262 Ibid., p . 1195.263 G. F. de Martens, ed., Nouveau recueil general de traites

(Leipzig, Librairie Dietrich, 1905), 2nd Series, vol. XXXII, p . 76.254 United Nations, Treaty Series, vol. 382, p. 8.265 Ibid., vol. 49, p. 3.256 Award in "Dispute regarding property belonging to the

Order of St. Maurice and St. Lazarus", Annuaire francais de droitinternational, XI, 1965 (Paris), p. 323.


State into consideration in characterizing State property.Some decisions by international courts have done thesame in relation to the property in dispute.

(7) For example, in it judgement of 15 December 1933in the Peter Pdzmdny University case, the PermanentCourt of International Justice took the view that ithad "no need to rely upon" 257 the interpretation ofthe law of the predecessor State in order to decidewhether the property in dispute was public property.It is true that the matter was governed by various pro-visions of the Treaty of Trianon,258 which limited theCourt's freedom of judgement. In another case, in whichItaly was the predecessor State, the United NationsTribunal in Libya ruled on 27 June 1955 that in decidingwhether an institution was public or private, the Tribunalwas not bound by Italian law and judicial decisions.289

Here again, the matter was governed by special pro-visions—in this case, those of resolution 388 (V) alreadymentioned2S0 which limited the Court's freedom ofjudgement.

(8) In view of the judicial decisions cited in the pre-vious paragraph and the practice already referred to,261

the Commission intends to reconsider the rule statedin article 5 in the light of the provisions it adoptsduring the first reading of the draft, in order to determinewhether any exceptions should be made to it.

(9) The opening words of article 5 emphasize thatthe rule it states applies only to the provisions of Part Iof the present draft and that, as usual in such cases,the Commission did not in any way intend to putforward a general definition.

(10) The Commission wishes to stress that the ex-pression "property, rights and interests" in article 5refers only to rights and interests of a legal nature.This expression is to be found in many treaty provisions,such as article 297 of the Treaty of Versailles,262 article 249of the Treaty of Saint-Germain-en-Laye 263 article 177of the Treaty of Neuilly-sur-Seine,264 article 232 of theTreaty of Trianon 26S and article 79 of the Treaty ofPeace with Italy.266 Although the expression is frequentlyused, it has no equivalent in some legal systems. TheCommission therefore proposes to try, during the firstreading of these draft articles, to find another expression

257 P.C.I.J., Series A/B No. 61, p. 236.258 E. Parkes, J. E. Field and R. C. Thompson, eds., British and

Foreign State Papers, 1920, vol. 113 (London, H.M. StationeryOffice, 1923), p . 486.

268 United Nations, Reports of International Arbitral Awards,vol. XII (United Nations publication, Sales No. 63.V.3), p. 390.

260 See above, para. 3.261 See above para. 6.262 E. Parkes, J. E. Field and R. C. Thompson, eds., British and


2a3 Ibid., p . 434.264 Ibid., p . 839.265 E. Parkes, J. E. Field and R. C. Thompson, eds., British and


286 United Nations, Treaty Series, vol. 49, p. 163.

for the whole of a State's tangible and intangible pro-perty which would be more generally understood.

(11) In article 5, the expression "internal law of thepredecessor State" refers to rules of the legal order ofthe predecessor State which are applicable to Stateproperty. For States whose legislation is not unified,these rules include, in particular, those which determinethe specific law of the predecessor State—national,federal, metropolitan or territorial—that applies to eachpiece of its State property.

(12) While accepting the text of article 5 provisionally,some members pointed out that the expression "Stateproperty" was used at the beginning of the text withoutqualification. That, and, also the title of the article,seem to indicate an intention on the part of the Com-mission to formulate a general criterion for determiningState property, applicable to the property of all Stateswithout distinction. The concluding phrase of the article,however, showed that the article concerned only theproperty of a particular State, namely, the predecessorState. Those members considered that it would havebeen better to amend that phrase so as to preservethe general character of the criterion, even if it meantspecifying in every provision of the draft relating toState property which particular State it was whoseproperty was referred to.

Article 6. Rights of the successor State toState property passing to it

A succession of States entails the extinction of therights of the predecessor State and the arising of the rightsof the successor State to such of the State property aspasses to the successor State in accordance with theprovisions of the present articles.

Commentary

(1) Article 6 makes it clear that a succession of Stateshas a dual juridical effect on the respective rights ofthe predecessor State and the successor State as regardsState property passing from the former to the latter.It entails, on the one hand, the extinction of the rightsof the predecessor State to the property in questionand, on the other hand and simultaneously, the arisingof the rights of the successor State to that property.As indicated by the clause "such of the State propertyas passes to the successor State in accordance withthe provisions of the present articles", the purpose ofarticle 6 is not to determine what State property passesto the successor State. The Commission consideredthat it was unable at the present stage of its work toestablish a general criterion in this respect and it intendsto formulate, at a future session, a series of specialcriteria for each type of succession. It is to the pro-visions in which those special criteria will be set outthat article 6 refers in the above-mentioned clause.

(2) Article 6 gives expression in a single provision toa consistent practice, and reflects the endeavour totranslate, by a variety of formulae, the rule that a sue-


cession of States entails the extinction of the rights ofthe predecessor State and the arising of those of thesuccessor State to State property passing to the successorState. The terminology used for this purpose has variedaccording to time and place. One of the first notionsfound in peace treaties is that of the renunciation bythe predecessor State of all rights over the ceded terri-tories, including those relating to State property. Thisnotion already appears in the Treaty of the Pyreneesof 1659,267 and found expression again in 1923 in theTreaty of Lausanne 268 and in 1951 in the Treaty ofPeace with Japan.269 The Treaty of Versailles expressesa similar idea concerning State property in a clausewhich stipulates that "Powers to which German territoryis ceded shall acquire all property and possessionssituated therein belonging to the German Empire orto the German States".270 A similar clause is foundin the Treaties of Saint-Germain-en-Laye,271 Neuilly-sur-Seine 272 and Trianon.273 The notion of cession isalso frequently used in several treaties.274 Despite thevariety of formulae, the large majority of treaties relatingto transfers of territory contain a consistent rule, namely,that of the extinction and simultaneous arising of rightsto State property.

(3) For article 6, the Commission adopted the notionof the "passing" of State property, rather than of the"transfer" of such property, because it considered thatthe notion of transfer was inconsistent with the juridicalnature of the effects of a succession of States on therights of the two States in question to State property.On the one hand, a transfer often presupposes an actof will on the part of the transferor. As indicated bythe word "entails" in the text of article 6, however,the extinction of the rights of the predecessor Stateand the arising of the rights of the successor State takeplace as of right. On the other hand, a transfer impliesa certain continuity, whereas a simultaneous extinctionand arising imply a break in continuity. The Com-mission nevertheless wishes to make two comments onthis latter point.

267 Article XLI. (English text in F . Israel, ed., op. cit., vol. I,p . 51, in French Text in J. du Mont, Corp wriversel diplomatiquedu droit des gens, contenant tin recueil des traites d'alliance, de paix,de treve... (Amsterdam, Brunei, 1728), vol. VI, part II, p .264.

268 See in particular articles 15, 16 and 17 (League of Nations,Treaty Series, vol. XXVIII, p . 23).

269 Article 2 (United Nations, Treaty Series, vol. 136, pp. 48and 50).

270 Article 256 (E. Parkes, J. E. Field and R. C. Thompson,eds., British and Foreign State Papers, 1919, vol. 112 (London, H.M.Stationery Office, 1922), p . 125.

271 Article 208 (ibid., pp . 412-414).272 Article 142 (ibid., vol. 112, pp. 821-822).273 Article 191 (ibid., 1921, vol. 113, pp. 564-565).274 See, for example, article 1 of the Convention of 4 August 1916

between the United States of America and Denmark concerningthe cession of the Danish West Indies (English text in Supplementto the American Journal of International Law (New York, AmericanSociety of International Law, Oxford University Press, 1971),vol. II , p . 54; French text in Revue generate de droit internationalpublic, 1971 (Paris, 1971), t. XXIV, p . 54) and article V of theTreaty of 2 February 1951 concerning the cession to India of theFree Town of Chandernagore (United Nations, Treaty Series,vol. 203, p . 158).

(4) In the first place, the successor State may createa certain element of continuity by maintaining pro-visionally in force the rules of the law of the predecessorState relating to the regime of State property. Suchrules are certainly no longer applied on behalf of thepredecessor State, but rather on behalf of the successorState, which has received them into its own law by adecision taken in its capacity as a sovereign State.Although, however, at the moment of succession, it isanother juridical order that is in question, the materialcontent of the rules remains the same. Consequently,in the case envisaged, the effect of the succession ofStates is essentially to change the entitlement to therights to the State property.

(5) In the second place, the legal passing of the Stateproperty of the predecessor State to the successor Stateis often, in practice, followed by a material transferof such property between the said States, accompaniedby the drawing-up of inventories, certificates of deliveryand other documents.

(6) As regards the actual text of article 6, some memberscriticized the word "passes" in the expression "such ofthe State property as passes to the successor State".They maintained that since this article gave expressionto the principle of the extinction of the rights of thepredecessor State to State property, it could not be aquestion of the passing of such property, but ratherof its acquisition by the successor State. Other membersclaimed that an essential element was lacking in article 6because it did not specify at what moment the extinctionof the rights of the predecessor State to State propertyand the arising of the rights of the successor State tookplace. As in the case of the other provisions adoptedat the present session, the Commission intends to takeinto consideration all the comments of members onthe text of article 6 when it reconsiders it during thefirst reading of the draft.275

Article 7. Date of the passing of State property

Unless otherwise agreed or decided, the date of thepassing of State property is that of the succession of States.

Commentary

(1) Article 7 contains a residuary provision specifyingthat the date of the passing of State property is thatof the succession of States. It should be read togetherwith article 3 (d), which states that " 'date of the suc-cession of States' means the date upon which the suc-cessor State replaced the predecessor State in theresponsibility for the international relations of theterritory to which the succession of States relates".

(2) The residuary character of the provision in article 7is brought out by the subsidiary clause with whichthe article begins: "Unless otherwise agreed or decided".It follows from that clause that the date of the passingof State property may be fixed either by agreement orby a decision.



(3) In fact, it sometimes occurs in practice that theStates concerned agree to choose a date for the passingof State property other than that of the succession oStates. It is that situation which is referred to by theterm "agreed" in the above-mentioned opening clause.Some members of the Commission suggested that thewords "between the predecessor State and the successorState" should be added. Others, however, opposed thatsuggestion on the grounds that for State property situatedin the territory of a third State the date of passingmight be laid down by a tripartite agreement concludedbetween the predecessor State, the successor State andthe third State. At the present stage of its work, anduntil it has considered the question in greater detail,the Commission preferred not to limit the scope of theinitial provision of article 7.

(4) There have also been cases where an internationalcourt has ruled on the question what was the date ofthe passing of certain State property from the predecessorState to the successor State.276 The Commission thereforeadded the words "or decided" after the word "agreed"at the beginning of article 7. However, the Commissiondid not intend to specify from whom a decision mightcome.

(5) Several members expressed the view that not onlyarticle 7 but most of the other articles of the draft wereresiduary, and that the draft should include a generalprovision to that effect. In their opinion, such a pro-vision would make the opening clause of article 7 un-necessary.

(6) As for the main provision of article 7, which iscontained in the second clause of the article, it wasstated during the discussion in the Commission thatthe date of the passing of State property varied fromone type of succession to another and could not bemade the subject of a general provision. Moreover, itwas argued, article 7 as it stood merely gave a definitionof the date of the passing of State property and imposedno obligation on the States concerned. The right placefor such a text, if the Commission decided that it shouldbe retained, was in article 3, on use of terms.

Article 8. Passing of State propertywithout compensation

Without prejudice to the rights of third parties, thepassing of State property from the predecessor State tothe successor State in accordance with the provisions ofthe present articles shall take place without compensationunless otherwise agreed or decided.

Commentary

(1) Article 8 comprises a main provision and twosubsidiary clauses. The main provision lays down therule that the passing of State property from the pre-decessor State to the successor State in accordancewith the provisions of the present articles shall takeplace without compensation. It constitutes a necessarycomplement to article 6, but, like that article—and forthe same reasons 2 " it is not intended to determinewhat State property passes to the successor State.

(2) With some exceptions,278 practice confirms therule set forth in the main provision of article 8. Inmany treaties concerning the transfer of territories,acceptance of this rule is implied by the fact that noobligation is imposed on the successor State to paycompensation for the cession by the predecessor Stateof public property, including State property. Othertreaties state the rule expressly, stipulating that suchcession shall be without compensation. These treatiescontain phrases such as "without compensation",279

"in full Right",280 "without payment" ("sans paie-ment" 281 or "gratuitement").282

(3) However, several members were not sure whetherthe Commission might not subsequently have to allowcertain exceptions to the rule that State property passeswithout compensation in order to take into accountthe particular circumstances of each case of State suc-cession and especially the nature of the State property

276 See, for example, the Judgement No. 7 handed down on25 May 1926 by the Permanent Court of International Justice inthe Case concerning certain German interests in Polish Upper Silesia(P.C.I.J., Series A, No . 7), and its Advisory Opinion of 10 September1923 on certain questions relating to settlers of German originin the territory ceded by Germany to Poland (ibid., Series B, N o . 6,pp. 6-43).

277 See above, para. 1 of the commentary to article 6.278 These exceptions are to be found, inter alia, in four of the

peace treaties concluded after the First World War (see article 256of the Treaty of Versailles (British and Foreign State Papers, 1919,vol. 112, p . 125 (op. cit.)); article 208 of the Treaty of Saint-Ger-main-en-Laye (ibid., p . 413; article 142 of the Treaty of Neuilly-sur-Seine (ibid., vol. 112); and article 191 of the Treaty of Trianon(ibid., 1920, vol. 113, (op. cit.), p . 494). Under the terms of thesetreaties, the value of the State property ceded by the predecessorStates to the successor States was deducted from the amount ofthe reparations due by the former to the latter. It should, however,be noted that in the case of some State property, the treaties inquestion provided for transfer without any quid pro quo. Thus,article 56 of the Treaty of Versailles (ibid., 1919, vol. 112, p . 43)specified that "France shall enter into possession of all propertyand estate within the territories referred to in Article 51, whichbelong to the German Empire or German States [i.e. in Alsace-Lorraine], without any payment or credit on this account to anyof the States ceding the territories".

279 Article III, para. 4 of the Agreement between the UnitedStates of America and Japan concerning the Amami Islands, signedat Tokyo on 24 December 1953 (United Nations, Treaty Series,vol. 222, p . 195).

280 Article 10 of the Treaty of Utrecht of 11 April 1713 concerningthe cession of the Bay ans Straits of Hudson by France to GreatBritain (F. Israel, op. cit., p . 207; French text in M. de Clercq,Recueil des traites de la France (Paris, A. Durand and Pedone-Lauriel, 1880), vol. I, p . 5).

281 Annex X, para. 1, and Annex XIV, para. 1, of the Treatyof Peace with Italy (United Nations, Treaty Series, vol. 49, pp. 209and 225); and United Nations General Assembly resolutions 388 (V)of 15 December 1950, entitled "Economic and financial provisionsrelating to Libya" (article 1, para. 1), and 530 (VI) of 29 Junuary1972, entitled "Economic and financial provisions relating toEritrea" (article 1, para. 1).

282 Article 60 of the Treaty of Lausanne (League of Nations,Treaty Series, vol. XXVIII, p . 53).


in question or the type of succession envisaged. Othermembers even expressed doubts as to the possibilityof framing a general rule on the subject.

(4) The first subsidiary clause of article 8 reservesthe rights of third parties, a question which the Com-mission proposes to study at a later stage.

(5) The second subsidiary clause of article 8 reads:

"unless otherwise agreed or decided". Its purpose is toprovide expressly for the possibility of derogating fromthe rule in this article. It is identical with the clausein article 7 on which the Commission has alreadycommented.283

283 See above, paras. 2-5 of the commentary to article 7.

Chapter IV

THE MOST-FAVOURED-NATION CLAUSE

A. Introduction

1. SUMMARY OF THE COMMISSION'S PROCEEDINGS

93. At its sixteenth session, in 1964, the Commissionconsidered a proposal by one of its members, Mr. Jimenezde Arechaga, that it should include in its draft on thelaw of treaties a provision on the so-called "most-favoured-nation clause". The suggested provision wasintended formally to reserve the clause from the operationof the articles dealing with the problem of the effectof treaties on third states.284 In support of the proposalit was urged that the broad and general terms in whichthe articles relating to third States had been provisionallyadopted by the Commission might blur the distinctionbetween provisions in favour of third States and theoperation of the most-favoured-nation clause, a matterthat might be of particular importance in connexionwith the article dealing with the revocation or amendmentof provisions regarding obligations or rights of Statesnot parties to treaties. The Commission, however,while recognizing the importance of not prejudicing theoperation of most-favoured-nation clauses, did notconsider that these clauses were in any way touchedby the articles in question and for that reason decidedthat there was no need to include a saving clause of thekind proposed. In regard to most-favoured-nationclauses in general, the Commission did not think itadvisable to deal with them in the codification of thegeneral law of treaties, although it felt that they mightat some future time appropriately form the subjectof a special study.285 The Commission maintained thisposition at its eighteenth session.286

94. At its nineteenth session, in 1967, the Commissionnoted that several representative in the Sixth Committeeat the twenty-first session of the General Assemblyhad urged that it should deal with the most-favoured-nation clause as an aspect of the general law of treaties.

In view of the interest expressed in the matter and ofthe fact that clarification of its legal aspects might beof assistance to UNCITRAL the Commission decidedto place on its programme the topic of "most-favoured-nation clauses in the law of treaties" and appointedMr. Endre Ustor as Special Rapporteur on that topic.287

95. At the Commission's twentieth session, in 1968.the Special Rapporteur submitted a working papergiving an account of the preparatory work undertakenby him on the topic and outlining the possible contentsof a report to be presented at a later stage.288 The SpecialRapporteur also submitted a questionnaire listingpoints on which he specifically asked the members ofthe Commission to express their opinion. The Com-mission, while recognizing the fundamental importanceof the role of the most-favoured-nation clause in thedomain of international trade, instructed the SpecialRapporteur not to confine his studies to that area butto explore the major fields of application of the clause.The Commission considered that it should focus onthe legal character of the clause and the legal conditionsgoverning its application and that it should clarify thescope and effect of the clause as a legal institution inthe context of all aspects of its practical application.It wished to base its studies on the broadest possiblefoundations without, however, entering into fields out-side its functions. In the light of these considerations,the Commission instructed the Special Rapporteur toconsult, through the Secretariat, all organizations andinterested agencies which might have particular experiencein the application of the most-favoured-nation clause.

96. The Commission decided at the same session toshorten the title of the topic to, simply, "The most-favoured-nation clause".289

97. By resolution 2400 (XXIII), of 11 December 1968,the General Assembly recommended that the Commission,inter alia, continue its study of the most-favoured-nation

284 Yearbook... 1964, vol. I, p . 184, 752nd meeting, para 2.285 Yearbook ... 1964, vol. II , p . 176, document A/5809, para. 21.286 Yearbook ... 1966, vol. II, p . 177, document A/6309/Rev.l,

part II , para. 32.

287 Yearbook... 1967, vol. II , p . 369, document A/6709/Rev.l,para. 48.

288 Yearbook... 1968, vol. II, p. 165, document A/CN.4/L.127.289 Yearbook ... 1968, vol. I, p . 250, 987th meeting, paras. 7-12.


clause. Subsequently, the General Assembly made thesame recommendation in its resolutions 2501 (XXIV),of 12 November 1969, 2634 (XXV), of 12 November 1970,2780 (XXVI), of 3 December 1971, and 2926 (XXVII),of 28 November 1972.

98. At the twenty-first session of the Commission in1969, the Special Raporteur submitted his first report 290

containing a history of the most-favoured-nation clauseup to the time of the Second World War, with par-ticular emphasis on the work on the clause undertakenin the League of Nations or under its aegis. The Com-mission considered the report and, accepting the sug-gestion of the Special Rapporteur, instructed him toprepare next a study based mainly on the replies fromorganizations and interested agencies consulted by theSecretary-General and having regard also to three casesdealt with by the International Court of Justice relevantto the clause.291

99. Following the instructions of the Commission, theSpecial Rapporteur submitted his second report29a atthe twenty-second session of the Commission in 1970.In part I of this report, he attempted an analytical surveyof the views held by the parties and the judges on thenature and function of the clause in the three cases dealtwith by the International Court of Justice pertaining tothe clause: the Anglo-Iranian Oil Company Case (Juris-diction) [1952],293 the Case concerning the rights ofnationals of the United States of America in Morocco(Judgment) [1952] 294 and the Ambatielos Case (merits:obligation to arbitrate) [1953].295 He also dealt with theAward handed down on 6 March 1956 by the Commissionof Arbitration established by the Agreement of 24 Feb-ruary 1955 between the Governments of Greece and theUnited Kingdom for the arbitration of the Ambatielosclaim.296

100. In part II of his second report, he set out in asystematic manner the replies of international organiza-tions and interested agencies to the circular letter of theSecratery-General dated 23 January 1969. In this letterthe organizations concerned were requested to submit,for transmittal to the Special Rapporteur, all the infor-mation derived from their experience which might assisthim and the Commission in the work of codification andprogressive development of the rules of international lawconcerning the most-favoured-nation clause. They wereparticularly requested to draw attention tc any relevantbilateral or multilateral treaty, statement, practice orfact and to give their views as to the existing rules whichcould be discerned in respect of the clause. A number ofinternational organizations gave a detailed answer tothe circular letter and those answers served as a basis

290 Yearbook . . . 1969, vol. II , p . 157, document A/CN.4/213.291 Yearbook... 1969, vol. II , p . 234, document A/7610/Rev.l,

para. 89.292 Yearbook... 1970, vol. II , p . 199, document A/CN.4/228

and Add . l .293 I.C.J. Reports 1952, p . 93.294 Ibid., p . 176.295 I.C.J. Reports 1953, p . 10.296 United Nations, Reports of International Arbitral Awards,

vol. XII {op. cit.% p. 91.

for part II of the Special Rapporteur's second report.207

101. Owing to lack of time, the Commission was unableto consider the topic at its twenty-second (1970) andtwenty-third (1971) sessions.

102. At its twenty-third session, however, the Commis-sion, on the suggestion of the Special Rapporteur,requested the Secretariat to prepare, on the basis of thecollections of law reports available to it and of theinformation to be requested from Governments, a "Digestof decisions of national courts relating to most-favoured-nation clauses".898

103. At the twenty-fourth session of the Commission,in 1972, the Special Rapporteur submitted his thirdreport,299 containing a set of five draft articles on themost-favoured-nation clause, with commentaries. Thearticles defined the terms used in the draft, in particularthe terms "most-favoured-nation clause" and "most-favoured-nation treatment". The commentary pointedout that the undertaking to accord most-favoured-nationtreatment was the constitutive element of any most-favoured-nation clause. The report recalled that Stateshave no general right to most-favoured-nation treatment,which can be claimed only on the basis of a legal obliga-tion. It pointed out that the right of the beneficiaryState to claim the advantages accorded by the grantingState to a third State arises from a most-favoured-nationclause. In other words, the legal bond between thegranting State and the beneficiary State originates in thetreaty containing such a clause and not in the collateraltreaty concluded between the granting State and thethird State.

104. Being fully occupied with the completion of draftarticles on succession of States in respect of treaties anddraft articles on the prevention and punishment ofcrimes against diplomatic agents and other internationallyprotected persons, the Commission was unable toexamine the topic at its twenty-fourth session (1972).

105. At that session, however, at the suggestion of theSpecial Rapporteur, the Commission requested theSecretariat to prepare a study on the most-favoured-nation clauses included in the treaties published in theUnited Nations Treaty Series, which would survey thefields of application of the clauses in question, examinetheir relation to national treatment clauses, the exceptionsprovided for in treaties, and the practice concerningsuccession of States in respect of most-favoured-nationclauses.300

106. At the present session, the Special Rapporteursubmitted his fourth report (A/CN.4/266)301 containingthree more draft articles, with commentaries, dealingwith the presumption of unconditional character of theclause, the ejusdem generis rule and the acquired rightsof the beneficiary State.

297 Yearbook... 1971, vol. II (Part One), p . 347, documentA/8410/Rev.l , para. 111.

298 Ibid., para. 113.299 Yearbook ... 1972, vol. II, document A/CN.4/257 and Add . l .81)0 Yearbook... 1972, vol. II , pp . 323-324, document A/8710/

Rev. l , paras. 74-75.301 See p . 97 above.


107. The Commission considered the Special Rappor-teur's third report at its 1214th to 1218th meetings andreferred draft articles 2, 3, 4 and 5 contained thereinto the Drafting Committee. At its 1238th meeting, theCommission considered the reports of the Drafting Com-mittee and adopted on first reading articles 1 to 7.108. The text of the draft articles and the commentariesthereon as adopted by the Commission are reproducedin the present report for the information of the GeneralAssembly.302 In doing so, the Commission wishes todraw the attention of the General Assembly to the factthat the adoption of the seven draft articles constitutesonly the initial stage of its work in the preparation ofdraft articles on the topic. Thus the Commission, ashas been its usual practice, adopted an article on theuse of terms only on a provisional basis. The final decisionon such an article could not, in the Commission's view,be taken until the substantive articles contained in afull set of draft articles had been considered by theCommission.

109. In its future consideration of the topic, it is theCommission's intention to consider, inter alia, the threedraft articles contained in the Special Rapporteur'sfourth report submitted at the present session. Thereport states that, unless most-favoured-nation treatmentis accorded under the conditions of material reciprocity,it is presumed that the granting State is obliged to accord,and the beneficiary State is entitled to receive, most-favoured-nation treatment irrespective of whether thefavours accorded by the granting State to any thirdState are accorded gratuitously or against compensation.It states the rule that the beneficiary State cannot claimunder a most-favoured-nation clause any rights otherthan those relating to the subject-matter of the clauseand falling within its scope. Finally, the report statesthat the rights of the beneficiary State under a most-favoured-nation clause are not affected by an agreementbetween the granting State and one or more third Statesconfining certain benefits to their mutual relations,without the written consent of the beneficiary State.

110. The Rapporteur of the Commission suggested atthe present session that the Special Rapporteur indicateto the Commission those problems with which he pro-posed to deal in future draft articles.303 The SpecialRapporteur accordingly indicated that it was his intentionto deal, in future draft articles, with such problems asthe contingent character of the most-favoured-nationclause and the question of the beginning and terminationof the operation of the clause. The interaction betweenthe operation of most-favoured-nation clauses andnational treatment clauses would be considered, particu-larly the attraction by most-favoured-nation clauses ofbenefits obtained under national treatment clauses. Inaddition, future draft articles would deal with the questionof exceptions to the operation of the clause. Besides theexceptions provided by customs unions, free trade areas,frontier traffic, etc. he drew particular attention to thequestion of excepting from the operation of the clausepreferences granted to developing States by developed

States. He intended to examine the question whether andto what extent the beneficiary State has a right to beinformed of the advantages or benefits accorded by thegranting State to a third State, which relate to the most-favoured-nation clause in force between the grantingState and the beneficiary State. Finally, he indicated thatthe question of the succession of States in respect ofmost-favoured-nation clauses might be dealt with in thefuture.111. At the present session, the Secretariat distributeda document entitled "Digest of decisions of nationalcourts relating to the most-favoured-nation clause"(A/CN.4/269),304 prepared in accordance with the Com-mission's request.305 The Secretariat has also been re-quested to prepare a study on the most-favoured-nationclauses included in the treaties published in the UnitedNations Treaty Series.30*

2. SCOPE OF THE DRAFT ARTICLES

112. As already noted, the idea that the Commissionshould undertake a study of the most-favoured-nationclause arose in the course of its work on the law oftreaties.307 The Commission felt that although the clause,conceived as a treaty provision, fell entirely under thegeneral law of treaties, it would be desirable to make aspecial study of it. While it recognized that there was aparticular interest in taking up this study because of theattention devoted to the clause as a device frequentlyused in economic fields, it understood its task as being todeal with the clause as an aspect of the law of treaties.308

When it first discussed the question on the basis of thepreparatory work of the Special Rapporteur in 1968,the Commission decided to concentrate on the legalcharacter of the clause and the legal conditions of itsapplication in order that the scope and effect of the clauseas a legal institution might be clarified.309

113. The Commission maintains the position which ittook in 1968 and points out that the fact that the originaltitle of the topic was changed from "most-favoured-nation clauses in the law of treaties" to "the most-favoured-nation clause" does not indicate any change inits intention to deal with the clause as a legal institutionand to explore the rules of law pertaining to the clause.The Commission's approach remains the same: whilerecognizing the fundamental importance of the role ofthe most-favoured-nation clause in the domain of inter-national trade, it does not wish to confine its study tothe operation of the clause in this field but to extendthe Study to the operation of the clause in as manyfields as possible.114. On the other hand, while it is not the Commission'sintention to deal with matters not included in its func-tions, it wishes to take into consideration all moderndevelopments which may have a bearing upon the

802 See below, section B of the present chapter.303 Yearbook... 1973, vol. I, p. 80, 1217th meeting, para. 76.

304 Seep . 117 above.305 See para. 102 above.306 See para. 105 above.807 See para. 93 above.308 See para. 94 above.308 See para. 95 above.


codification or progressive development of rules per-taining to the operation of the clause. In this connexion,the Commission wishes to devote special attention to thequestion of the manner in which the need of developingcountries for preferences in the form of exceptions tothe most-favoured-nation clause in the field of inter-national trade, can be given expression in legal rules.310

115. The Commission also limited the scope of thepresent draft articles by the introduction of articles 1and 3; the reasons for this are given in the commentariesto those articles.

3. THE MOST-FAVOURED-NATION CLAUSE AND

THE PRINCIPLE OF NON-DISCRIMINATION

116. The Commission considered the relationship andinteraction between the most-favoured-nation clause andthe principle of non-discrimination. It discussed par-ticularly the question whether the principle of non-discrimination did not imply the generalization of most-favoured-nation treatment.

117. The Commission recognized several years ago thatthe rule of non-discrimination "is a general rule whichfollows from the equality of States"311 and that non-discrimination is "a general rule inherent in the sovereignequality of States".312 The General Assembly, byresolution 2625 (XXV) of 24 October 1970, approvedthe Declaration on Principles of International Lawconcerning Friendly Relations and Co-operation amongStates in accordance with the Charter of the UnitedNations, which States, inter alia:

States shall conduct their international relations in the economic,social, cultural, technical and trade fields in accordance with theprinciples of sovereign equality....

118. The most-favoured-nation clause, in the Com-mission's view, may be considered as a technique ormeans for promoting the equality of States or non-discrimination. The International Court of Justice hasstated that the intention of the clause is "to establish andmaintain at all times fundamental equality withoutdiscrimination among all of the countries concerned".313

119. The Commission observed, however, that the closerelationship between the most-favoured-nation clauseand the general principle of non-discrimination shouldnot blur the differences between the two notions. Thosedifferences are illustrated by the relevant articles in theVienna Conventions on Diplomatic Relations 314 and onConsular Relations.315 Both Conventions contain anarticle reading, in part, as follows:

310 See paras. 120 et seq. below.311 Yearbook ... 1958, vol. I I , p . 105, document A/3859, chap. I l l ,

section II, para . 1 of the commentary to article 44 of the draftarticles on diplomatic intercourse and immunities.

312 Yearbook ... 1961, vol. II , p . 128, document A/4843, chap. II ,sect. IV, para. 1 of the commentary to article 70 of the draft articleson consular relations.

313 Case concerning Rights of Nationals of the United Slates ofAmerica in Morocco (Judgment) (I.C.J. Reports 1952, p . 192).

314 United Nations, Treaty Series, vol. 500, p . 95.315 Ibid., vol. 596, p. 261.

1. In the application of the provisions of the present Conventionthe receiving State shall not discriminate as between States.

2. However, discrimination shall not be regarded as taking place:

(b) where by custom or agreement States extend to each othermore favourable treatment than is required by the provisions of thepresent Convention.3 1 0

These provisions reflect the obvious rule that, whileStates are bound by the duty arising from the principleof non-discrimination, they are nevertheless free to grantspecial favours to other States on the ground of somespecial relationship of a geographic, economic, politicalor other nature. In other words, the principle of non-discrimination may be considered as a general rule whichcan always be invoked by any State. But a State cannotnormally invoke the principle against another Statewhich has extended particularly favourable treatment toa third State, provided that the State concerned haditself received the general non-discriminatory treatmenton a par with other States. The claim to be assimilatedto a State put in a favoured position can only be raisedon the basis of an explicit commitment of the Stategranting the favours in the form of a conventionalstipulation, namely, a most-favoured-nation clause.

4. T H E MOST-FAVOURED-NATION CLAUSE AND

THE DIFFERENT LEVELS OF ECONOMIC DEVELOPMENT

120. The Commission, though at an early stage of itswork, took cognizance of the problem which the applica-tion of the most-favoured-nation clause creates in thefield of international trade when a striking inequalityexists between the development of the States concerned.It recalled the report on "International trade and themost-favoured-nation clause" prepared by the secretariatof UNCTAD (the UNCTAD memorandum) whichstates, inter alia:

To apply the most-favoured-nation clause to all countries regard-less of their level of development would satisfy the conditions offormal equality, but would in fact involve implicit discriminationagainst the weaker members of the international community. This isnot to reject on a permanent basis the most-favoured-nation clause.. . . The recognition of the trade and development needs of develop-ing countries requires that for a certain period of time, the most-favoured-nation clause will not apply to certain types of interna-tional trade relations.317

121. It also recalled General Principle Eight of annexA.I.I, of the recommendations adopted by UNCTADat its first session, which states, inter alia:

316 Article 47 of the Vienna Convention on Diplomatic Relationsand article 72 of the Vienna Convention on Consular Relations.

317 See Yearbook ... 1970, vol. I I , p . 231, document A/CN.4/288and Add . l , para. 188. One member of the Commission has recalledthe Aristotelian definition of equality:

"There will be the same equality between the shares as betweenthe persons, since the ratio between the shares will be equal tothe ratio between the persons; for if the persons are not equal,they will not have equal shares; it is when equals possess or areallotted unequal shares, or persons not equal equal shares, thatquarrels and complaints arise." 3

3 See Aristotle, Nicomachean Ethics, V; Hi, 6. (Yearbook . . . S968, vol I,p. 186, 967th meeting, para. 6.)


International trade should be conducted to mutual advantage onthe basis of the most-favoured-nation treatment and should befree from measures detrimental to the trading interests of othercountries. However, developed countries should grant concessionsto all developing countries and extend to developing countries allconcessions they grant to one another and should not, in grantingthese or other concessions, require any concessions in return fromdeveloping countries. New preferential concessions, both tariff andnon tariff, should be made to developing countries as a wholeand such preferences should not be extended to developed countries.Developing countries need not extend to developed countriespreferential treatment in operation amongst them.318

122. In recalling the question of the operation of themost-favoured-nation clause in trade relations betweenStates at different levels of economic development, theCommission was aware that it could not enter intofields outside its functions and was not in a position todeal with economic matters and suggest rules for theorganization of international trade. Nevertheless, itrecognized that the operation of the clause in the sphereof international trade with particular reference to thedeveloping countries posed serious problems, some ofwhich related to the Commission's work on the topic.As indicated by the Special Rapporteur,310 the Com-mission intends to examine, in future draft articles, thequestion of exceptions to the operation of the clause; itrecognizes the importance of the question and intends torevert to it in the course of its future work.

B. Draft articles on the most-favoured-nation clause

123. The text of articles 1 to 7 and the commentariesthereto, adopted by the Commission at the present sessionon the proposal of the Speical Rapporteur, is reproducedbelow for the information of the General Assembly.


The present articles apply to most-favoured-nationclauses contained in treaties between States.

Commentary

(1) This article corresponds to article 1 of the ViennaConvention on the Law of Treaties; its purpose is todefine the scope of the present articles.(2) It gives effect to the Commission's decision thatthe scope of the present articles should be restricted tomost-favoured-nation clauses contained in treaties con-cluded between States. It therefore emphasizes that theprovisions which follow are designed for applicationonly to most-favoured-nation clauses contained intreaties between States. This restriction also finds expres-sion in article 2 {a), which gives the term "treaty" thesame meaning as in the Vienna Convention on the Lawof Treaties, a meaning which specifically limits the termto "an international agreement concluded betweenStates".

318 See Proceedings of the United Nations Conference on Tradeand Development, vol. I, Final Act and Report (United Nationspublication, Sales No . 64.II.B.11), p. 20.


(3) It follows from the use of the term "treaty" andfrom the meaning given to it in article 2 (a), that article 1restricts the scope of the articles to most-favoured-nationclauses contained in international agreements betweenStates in written form.

(4) Consequently, the present articles have not beendrafted so as to apply to clauses contained in oral agree-ments between States and in international agreementsconcluded between States and other subjects of inter-national law. At the same time, the Commission re-cognized that the principles which the articles containmay also be applicable in some measure to internationalagreements falling outside the scope of the present articles.Accordingly, in article 3 it has made a general reservationon this point analogous to that in article 3 of the ViennaConvention on the Law of Treaties.

(5) The Commission adopted article 1 provisionallywith a view to reverting to it if, in the course of theelaboration of the articles, some enlargement of thescope of the draft should seem desirable.



(a) "treaty" means an international agreement con-cluded between States in written form and governed byinternational law, whether embodied in a single instrumentor in two or more related instruments and whatever itsparticular designation;

(b) "granting State" means a State which grants most-favoured-nation treatment;

(c) "beneficiary State" means a State which has beengranted most-favoured-nation treatment;

(</) "third State" means any State other than thegranting State or the beneficiary State.

Commentary

(1) Following the example of many of its previousdrafts, the Commission has specified in article 2 themeaning of the expressions most frequently used in thedraft.

(2) As the introductory words of the article indicate,the definitions contained therein are limited to the draftarticles. They only state the meanings in which theexpressions listed in the article should be understood forthe purposes of the draft articles.

(3) Paragraph (a) reproduces the definition of the term"treaty" given in article 2, paragraph 1 (a), of the ViennaConvention on the Law of Treaties. It results from thegeneral conclusions reached by the Commission con-cerning the scope of the present draft articles and itsrelationship with the Vienna Convention.320 Conse-quently, the term "treaty" is used throughout the presentdraft articles, as in the Vienna Convention, as a general

320 See paras. 112-115 above.


term covering all forms of international agreementconcluded between States in written form and governedby international law, whether embodied in a singleinstrument or in two or more related instruments andwhatever its particular designation.

(4) Paragraphs (b) and (c) define the terms "grantingState" and "beneficiary State". These expressions denotethe States parties to a treaty which contains a "most-favoured-nation" clause, parties which are promisors andpromisees, respectively, of the most-favoured-nation treat-ment. The verb "grant" has been used to convey themeaning not only of an actual according or enjoymentof the treatment but also the creation of the legal obliga-tion and corresponding right to that treatment. A Stateparty to a treaty including a most-favoured-nation clausemay be a granting State and a beneficiary State at thesame time if, by the same clause, it grants to anotherState most-favoured-nation treatment and is granted bythat State the same treatment.

(5) Paragraph (d), in defining the term "third State",departs from the meaning assigned to that term by ar-ticle 2, paragraph 1 (fi), of the Vienna Convention on theLaw of Treaties. According to that sub-paragraph, "thirdState" means a State not a party to the treaty. In caseswhere a most-favoured-nation clause is contained in abilateral treaty, that definition could have been applicable.However, most-favoured-nation clauses can be, andindeed are, included in multilateral treaties. In suchclauses, the parties undertake to accord each other thetreatment granted by them to any third State. In suchcases, the third State is not necessarily outside the boundsof the treaty: it may also be one of the parties to themultilateral treaty in question. It is for this reason thatarticle 2 defines the term "third State" as meaning "anyState other than the granting State or the beneficiaryState".

(6) Article 2 has been adopted by the Commissionprovisionally. The Commission may possibly includedefinitions of other terms in the article if, in the courseof the adoption of further articles on the most-favoured-nation clause, it deems that to be necessary. The finaltext of the article will be established after the formulationof all the articles that will constitute the draft.

Article 3. Clauses not within the scopeof the present articles

The fact that the present articles do not apply (1) to aclause on most-favoured-nation treatment contained in aninternational agreement between States not in writtenform, or (2) to a clause contained in an internationalagreement by which a State undertakes to accord to asubject of international law other than a State treatmentnot less favourable than that accorded to any subject ofinternational law, or (3) to a clause contained in an inter-national agreement by which a subject of international lawother than a State undertakes to accord most-favoured-nation treatment to a State, shall not affect:

(a) The legal effect of any such clause;

(ft) The application to such a clause of any of the rulesset forth in the present articles to which it would be subjectunder international law independently of the articles;

(c) The application of the provisions of the presentarticles to the relations of States as between themselvesunder clauses by which States undertake to accord most-favoured-nation treatment to other States, when suchclauses are contained in international agreements inwritten form to which other subjects of international laware also parties.

Commentary

(1) This article is drafted on the pattern of article 3 ofthe Vienna Convention on the Law of Treaties. Its firstpurpose is to prevent any misconception which mightresult from the express limitation of the scope of thedraft articles to clauses contained in treaties concludedbetween States and in written form.

(2) Article 3 recognizes that the present articles do notapply to the clauses enumerated therein, under (1), (2)and (3). However, it preserves the legal effect of suchclauses and the possibility of the application to suchclauses of any of the rules set forth in the present articlesto which they would be subject under international lawindependently of the articles.

(3) Article 3 follows in this respect the system of theVienna Convention which, in its article 3, preserved thelegal force of certain agreements and the possibility ofthe application to them of certain rules of the ViennaConvention. Article 3 does not refer to exactly the sametypes of international agreements as does the ViennaConvention. Article 3 refers (1) to clauses on most-favoured-nation treatment contained in internationalagreements between States not in written form, (2) toclauses contained in international agreements by whichStates undertake to accord to a subject of internationallaw other than a State treatment not less favourablethan that accorded to any subject of international law,and (3) to clauses contained in international agreementsby which subjects of international law other than Statesundertake to accord most-favoured-nation treatment toStates. It does not, however, refer to clauses in inter-national agreements by which subjects of internationallaw other than States undertake to accord to each othertreatment not less favourable than that accorded by themto other such subjects of international law. The reasonfor the omission of a reference to such clauses is thatthe Commission is not aware of such clauses havingarisen in practice, though hypothetically it is not im-possible.

(4) The reservation in paragraph (c) is based on theprovision contained in article 3, paragraph (c), of theVienna Convention. It safeguards the application of therules set forth in the draft articles to the relations ofStates as between themselves under clauses by whichStates undertake to accord most-favoured-nation treat-ment to other States when such clauses are contained ininternational agreements in written form to which othersubjects of international law are also parties. The reser-vation in paragraph (c)—in contradistinction to theparallel paragraph (c) of article 3 of the Vienna Con-


vention—refers to clauses contained in internationalagreements in written form. The provisions of the presentarticles will obviously not be applicable to clauses con-tained in international agreement concluded by Statesand other subjects of international law not in writtenform. This is, however, such a hypothetical case that theCommission has not found it necessary to provide forit in the articles.

Article 4. Most-favoured-nation clause

"Most-favoured-nation clause" means a treaty pro-vision whereby a State undertakes to accord most-favoured-nation treatment to another State in an agreed sphere ofrelations.

Commentary

(1) Articles 4 and 5 contain definitions which could havefound their place in article 2 on the use of terms. Becauseof the importance of the terms "most-favoured-nationclause" and "most-favoured-nation treatment", which arethe cornerstones of these articles, the Commissiondecided to keep these articles separate from the articleon the use of terms.

(2) As to the expressions "most-favoured-nation clause"and "most-favoured-nation treatment", it was pointedout in the course of the discussion in the Commissionthat they are not legally precise. They refer to a "nation"instead of a State and to "most-favoured" nation althoughthe "most-favoured" third State in question may indeedbe less favoured than the beneficiary State.321 Neverthe-less, the Commission has retained these expressions.There are other expressions in international law, likethe very term international law itself, which could becriticized on grounds of precision, but which havingbeen sanctioned by practice remain in constant use.

(3) The use of the word "clause" was also discussed.In the course of the discussion it was pointed out thatthere are cases where a whole treaty consists of nothingelse but a more or less detailed stipulation of most-favoured-nation pledges. It is the understanding of theCommission that the word "clause" covers both singleprovisions of treaties or other agreements and suchstipulations, sometimes lengthy, which make up a wholetreaty. From the point of view of the present articles, itis irrelevant whether a most-favoured-nation clause isshort and concise or long and detailed, or whether itamounts to the whole content of a treaty or not.

(4) The articles apply to clauses of treaties in the senseof the word "treaty" as defined in article 2 of the ViennaConvention on the Law of Treaties and in article 2 ofthe present draft. This definition does not affect theprovision contained in article 3, paragraph (c), accordingto which the present articles are also applicable to theclauses described in that paragraph.

(5) Article 4 explains the contents of the clause as atreaty provision whereby a State undertakes to accord

most-favoured-nation treatment to another State. In thesimplest form of the clause, one State, the grantingState, makes this undertaking and the other State, thebeneficiary State, accepts it. This constitutes a unilateralclause which is today a rather exceptional phenomenon.Most-favoured-nation pledges are usually undertakenby the States parties to a treaty in a synallagmatic way,i.e., reciprocally.

(6) Unilateral most-favoured-nation clauses were foundin capitulatory regimes and have largely disappearedwith them. They were also provided, for a shorter period,in favour of the victorious powers in the Peace Treatieswhich concluded the World Wars. (These clauses werejustified by the fact that the war terminated the commer-cial treaties between the contesting parties and thevictorious powers wanted to be treated by the vanquished—even before the conclusion of a new commercialtreaty—at least on an equal footing with the allies ofthe latter.) The usual practice today is for States partiesto a treaty to extend to each other most-favoured-nationtreatment. There are, however, exceptional situations inwhich in the nature of things only one of the contractingparties is in the position to offer most-favoured-nationtreatment in a certain sphere of relations, possiblyagainst a different type of compensation. Such unilateralclauses occur, for example, in treaties by which most-favoured-nation treatment is accorded to the ships ofa land-locked State in the ports and harbours of thegranting maritime State. The land-locked State not beingin a position to reciprocate in kind, the clause remainsunilateral. The same treaty may of course provide foranother type of compensation against the granting ofmost-favoured-nation treatment. There are other excep-tional situations: the States associated with the EuropeanEconomic Community have extended to the Community—against special preferences—unilateral most-favourednation treatment of imports and exports in certain agree-ments on association and commerce.322

(7) In the usual case, both States parties to a treaty,or in the case of a multilateral treaty all States parties,extend to each other most-favoured-nation treatment,becoming thereby granting and benficiary States at thesame time. The expressions "granting" and "benficiary"then become somewhat articificial. These expressions werefound useful, however, in the examination of the situa-tions which may arise from reciprocal pledges.

(8) Although most-favoured-nation treatment is usuallygranted by States parties to a treaty reciprocally, thisreciprocity is in the simplest and unconditional form ofthe most-favoured-nation clause only a formal reciprocity.There is no guarantee that States granting each othermost-favoured-nation treatment will receive materiallyequal advantages. (The questions connected with theconditional clauses will be considered by the Commission

321 See para. 4 of the commentary to article 5.

322 Convention of Yaounde (article 11), Agreements of Arusha(article 8), of Rabat (article 4, para. 1) and of Tunis (article 4,para. 1). Cited in D. Vignes, "La clause de la nation la plus favoriseeet sa pratique contemporaine" (Recueil des cours de VAcademie dedroit international de La Haye, 1970-11, vol. 130 (Sijthoff, Leyden,1971), p. 324). See also the pledge of Cyprus, quoted in para. 14below.


later, on the basis of the relevant article presented by theSpecial Rapporteur in his fourth report (A/CN.4/266).)323

The grant of most-favoured-nation treatment is notnecessarily a great advantage to the beneficiary State.It may be no advantage at all if the granting State doesnot extend any favours to third States in the domaincovered by the clause. All that the most-favoured-nationclause promises is that the contracting party concernedwill treat the other party as well as it treats any thirdcountry, which may be very badly. It has been rightlysaid in this connexion that, in the absence of any under-takings to third States, the clause remains but an emptyshell.

(9) The drafting of a clause is usually done in a positiveform, i.e. the parties promise each other most-favourabletreatment. An example of this is the most-favoured-nation clause of article I, paragraph 1, of the GeneralAgreement on Tariffs and Trade.324 The clause may beformulated in a negative way when the pledge is for theleast unfavourable treatment. An example of the latterformula is article 4 of the Treaty of Trade and Navigationbetween the Czechoslovak Republic and the GermanDemocratic Republic of 25 November 1959:

. . . natural and manufactured products imported from the territoryof one Contracting Party . . . shall not be liable to any duties, taxes orsimilar charges other or higher, or to regulations other or formalitiesmore burdensome, than those imposed on similar natural andmanufactured products of any third State.325

(10) Article 4 is intended to cover most-favoured-nation clauses in bilateral as well as multilateral treaties.Traditionally, most-favoured-nation clauses appear inbilateral treaties. With the increase of multilateralismin international relations, such clauses have found theirway into multilateral treaties. The most notable examplesof the latter are the clauses of the General Agreementon Tariffs and Trade of 30 October 1947, and that ofthe Treaty Establishing a Free Trade Area and Institutingthe Latin American Free-Trade Association, signed atMontevideo on 18 February 1960. The most importantmost-favoured-nation clause in the General Agreement(article 1, paragraph 1) reads as follows:

With respect to customs duties and charges of any kind imposedon or in connexion with importation or exportation or imposed onthe international transfer of payments for imports or exports, andwith respect to the method of levying such duties and charges,and with respect to all rules and formalities in connexion withimportation and exportation, and with respect to all matters referredto in paragraphs 2 and 4 of Article III [i.e., matters of internaltaxation and quantitative and other regulations], any advantage,favour, privilege or immunity granted by any contracting party toany product originating in or destined for any other country shallbe accorded immediately and unconditionally to the like productoriginating in or destined for the territories of all other contractingparties.326

The most-favoured-nation clause of the MontevideoTreaty reads as follows:

Article 18

Any advantage, benefit, franchise, immunity or privilege appliedby a Contracting Party in respect of a product originating in orintended for consignment to any other country shall be immediatelyand unconditionally extended to the similar product originatingin or intended for consignment to the territory of the other Contract-ing Parties.337

Unless multilateral treaties containing a most-favoured-nation clause stipulate otherwise, the relations createdby such clauses are essentially bilateral, i.e., every partyto the treaty may demand from any other party toaccord it equal treatment to that accorded to any thirdState, irrespective of whether that third State is a partyto the treaty or not. Under the GATT system (underarticle II of the Agreement), each contracting party isobliged to apply its duty reductions to all other parties.The General Agreement goes beyond the most-favoured-nation principle in this respect. Each member grantinga concession is directly bound to grant the same concessionto all other members in their own right; this is notthe same thing as obliging all other members to relyon continued agreement between the party grantingthe concession and the party that negotiated it.328 Thus,the operation of the GATT clause differs in this respectfrom that of the usual bilateral most-favoured-nationclause.

(11) Article 4 expresses the idea that a most-favoured-nation pledge is an international, i.e., inter-State, under-taking. The beneficiary of this undertaking is the benefici-ary State and only through the latter State do the per-sons in a particular relationship with that State, usuallyits nationals, enjoy the treatment stipulated by thegranting State.329

(12) It follows from the definition of the most-favoured-nation clause, as given in article 4, that the undertakingto accord most-favoured-nation treatment is the consti-tutive element of a most-favoured-nation clause. Conse-quently, clauses which do not contain this elementwill fall outside the scope of the present articles evenif they aim at an effect similar to that of a most-favoured-nation clause. A case in point is article XVII, paragraph 2,of GATT where "fair and equitable treatment" isdemanded from the contracting parties with respect toimports of products for immediate governmental use.330

Other examples are article XIII, paragraph 1, of theGeneral Agreement, which requires that the admin-istration of quantitative restrictions shall be non-dis-

323 See p . 97 above.324 See para. 10 below.326 United Nations, Treaty Series, vol. 374, p . 116.326 Ibid., vol. 55, pp. 196 and 198; and ibid., vol. 138, p . 336.

The texts of the relevant G A T T articles are referred to in Year-book ... 1970, vol. II, pp. 217-236, document A/CN.4/228 andAdd . l , part II , sect. B.

327 United Nations, Multilateral Economic Co-operation inLatin America, vol. I, Text and documents (United Nations publi-cation, Sales N o . 62.II.G.3), p . 59 (quoted in Yearbook . . . 1970,vol. I I , p . 222, document A/CN.4/228 and Add . l , para. 149).

328 H . C. Hawkins, Commercial Treaties and Agreements:Principles and Practice (New York, Rinehart , 1951), p . 226.

329 See para. 2 of the commentary to article 5.330 See United Nations, Treaty Series, vol. 55, p . 252, quoted in

Yearbook ... 1970, vol. II , p. 224, document A/CN.4/228 andAdd . l , para. 162.


criminatory,331 and article 23 of the Montevideo Treaty.332

While a most-favoured-nation clause insures the bene-ficiary against discrimination, a clause promising non-discrimination will not necessarily yield the same advan-tages as a most-favoured-nation clause. Cases in pointare article 47 of the Vienna Convention on DiplomaticRelations and article 72 of the Vienna Convention onConsular Relations.333 These clauses, while assuring theStates parties to the Conventions of non-discriminationby other parties to the treaty, do not give any rightto most-favoured-nation treatment.

(13) Whether a given treaty provision falls within thepurview of a most-favoured-nation clause is a matterof interpretation. Most-favoured-nation clauses can bedrafted in the most diverse ways and that is why aneminent authority on the matter stated: "although itis customary to speak of the most-favoured-nationclause, there are many forms of the clause, so thatany attempt to generalize upon the meaning and effectof such clauses must be made, and accepted, with cau-tion".334 Expressed in other words: "Speaking strictly,there is no such thing as the most-favoured-nationclause: every treaty requires independent examination",335

and further: "there are innumerable most-favoured-nation clauses, but there is only one m[ost]-f[avoured]-n[ation] [treatment] standard".336 These considerationswere taken into account when the form of the definitionof the clause was chosen. In that form stress is laidupon most-favoured-nation treatment, the essence ofthe definition being that any treaty stipulation accordingmost-favoured-nation treatment is a most-favoured-nation clause.

(14) Article 4 states that the grant of most-favoured-nation treatment to another State by a most-favoured-nation clause shall be in "an agreed sphere of relations".Most-favoured-nation clauses have been customarilycategorized as "general" or "special" clauses. A "general"clause means a clause which promises most-favoured-nation treatment in all relations between the partiesconcerned, whereas a "special" one refers to relationsin certain limited fields. Although States are free toagree to grant each other most-favoured-nation treat-ment in all fields which are suceptible to such agreements,this is rather an exception today. A recent case in pointis a stipulation in the treaty concerning the establishmentof the Republic of Cyprus signed at Nicosia on 16 August1960, which is rather a pactum de contrahendo concerningfuture agreements on most-favoured-nation grants:"The Republic of Cyprus shall, by the agreement onappropriate terms, accord most-favoured-nation treat-

381 See United Nat ions , Treaty Series, vol. 55, p . 234, quoted inYearbook ... 1970, vol. I I , p p . 223-224, document A/CN.4/228 andA d d . l , para . 160.

332 Uni ted Nat ions , Multilateral Economic Co-operation inLatin America, vol. I (pp. cit.), p . 60, quoted in Yearbook ... 1970,vol. II, p . 224, document A/CN.4/228 and A d d . l , para . 161.

333 See para. 119 above.334 A . D . McNair , The Law of Treaties (Oxford, Clarendon

Press, 1961), p . 273.336 D . Anzilotti and A. D . McNair , quoted in Schwarzenberger,

International Law and Order (London, Stevens, 1961), p . 138.336 Ibid., p . 159.

ment to the United Kingdom, Greece and Turkey inconnexion with all agreements whatever their nature".337

(15) The usual type of a "general clause", however,does not embrace all relations between the respectivecountries, it refers to all relations in certain fields. Thus,for example, "in all matters relating to trade, navigationand all other economic relations . . .".33S Most-favoured-nation clauses may be less broad but still general, the"general clause" of article I, paragraph 1 of GATTbeing a well-known example.339

(16) The fields in which most-favoured-nation clausesare used are extremely varied. A tentative classificationof the fields in question, which does not claim to beexhaustive, can be given as follows:

(a) International regulation of trade and payments(exports, imports, customs tariffs);

(b) Transport in general and treatment of foreignmeans of transport (in particular, ships, airplanes, trains,motor vehicles, etc.)

(c) Establishment of foreign physical and juridicalpersons, their personal rights and obligations;

(d) Establishment of diplomatic, consular and othermissions, their privileges and immunities and treatmentin general;

(e) Intellectual property (rights in industrial property,literary and artistic rights);

(/) Administration of justice, access to courts andto administrative tribunals in all degrees of jurisdiction,recognition and execution of foreign judgements, cautiojudicatum solvi, etc.

The study to be undertaken by the Secretariat340 willsurvey the most-favoured-nation clauses included in thetreaties published in the United Nations Treaty Seriesand will examine the fields to which these clauses arcapplicable. A most-favoured-nation clause can apply toone or more of the fields enumerated above. The im-portant point is that the clause always applies to adetermined sphere of relations agreed upon by theparties to the treaty concerned.

(17) The ejusdem generis rule, according to which noother rights can be claimed under a most-favoured-nation clause than those relating to the subject-matterof the clause and falling within the scope of the clause,will be dealt with later in connexion with article 7,which is contained in the Special Rapporteur's fourthreport.

337 Uni ted Nat ions , Treaty Series, vol. 382, p . 144 (Annex F ,Part II) . This provision has been embodied in the Consti tution ofCyprus as article 170 (see A. Peaslee, Constitutions of Nations(The Hague, Nijhoff, 1968), vol. I l l , p . 201).

338 Treaty of Trade and Navigation between the CzechoslovakRepublic and the German Democrat ic Republic (article 2) (UnitedNat ions , Treaty Series, vol. 374, p . 114).

339 Quoted above in para.10 of this commentary.340 See above, para . 105 of the present report .


Article 5. Most-favoured-nation treatment

Most-favoured-nation treatment means treatment bythe granting State of the beneficiary State or of personsor things in a determined relationship with that State, notless favourable than treatment by the granting State of athird State or of persons or things in the same relationshipwith a third State.

Commentary

(1) While article 4 defines "most-favoured-nationclause" by "most-favoured-nation treatment", article 5explains the meaning of the latter term. In the courseof the discussion in the Commission, attention wasdrawn to the fact that in some languages most-favoured-nation treatment is expressed as most favourable treat-ment, as in the Russian term: "rezhim naibolshegoblagopriatsvovaniycT. The Commission wishes to retainin English, French, Russian and Spanish, the customaryforms of expression: "most-favoured-«cr?WH treatment";"traitement de la nation la plus favorisee"; "rezhimnaibolec blagopriatzvenoi natzii"; and "trato de la nationmas favorecida".

(2) While the commitment to grant most-favoured-nation treatment is undertaken by one State vis-a-visanother, the treatment promised thereby is one givenin most cases to persons and things and only in a minorityof cases to States themselves (e.g. in cases promisingmost-favoured-nation treatment to embassies or con-sulates 341). By what methods and under what circum-stances the person concerned (or the things for thatmatter) will come to enjoy the treatment depends onthe intention of the parties to the treaty in questionand on the internal law of the beneficiary State. TheHigh Commissioner of Danzig, in his decision of 8 April1927 regarding the jurisdiction of Danzig courts inactions brought by railway officials against the RailwayAdministration, explained the relationship between atreaty and the application of its provisions to individualsas follows:

It is a rule of law generally recognized in doctrine and in practicethat international treaties do not confer direct rights on individuals,but merely on the governments concerned. Very often a governmentis obliged, under a treaty, to accord certain benefits or rights toindividuals, but in this case the individuals do not themselvesautomatically acquire these rights. The government has to introducecertain provisions into its internal legislation in order to carryout the obligations into which it has entered with another govern-ment. Should it be necessary to insist on the carrying out or appli-cation of this obligation, the only Party to the case who can legallytake action is the other government. That government moreoverwould not institute proceedings in civil courts but would takediplomatic action or apply to the competent organs of internationaljustice.

The case in question is not comparable to that of an undertakingon behalf of a third Party... which figures in certain civil codes,precisely because international treaties are not civil contracts underwhich governments assume obligations at private law on behalf ofthe persons concerned. To give an example: "the most-favoured-

nation" clause in a treaty of commerce does not entitle an individualto refuse to pay customs duties on the ground that in his opinionthey are too high to be compatible with the clause; he can only basehis action on the internal customs legislation which should bedrafted in conformity with the clauses of the treaty of commerce.342

Although the Court reversed the decision of the HighCommissioner in the case in question, referring to theintention of the parties and the special characteristicsof the case, the situation in countries where treatiesare not self-executing is primarily the one described bythe High Commissioner of Danzig. This is the casewith regard to treaties in general, and most-favoured-nation clauses in particular, in the United Kingdomand Australia (see the statements quoted in the "Digestof decisions of national courts relating to the most-favoured-nation clause" prepared by the Secretariat(A/CN.4/269) 343). The situation is similar in the FederalRepublic of Germany where the courts have explicitlyrefused in several instances to recognize a directapplication of article III of GATT (on national treat-ment on internal taxation and regulation) on the groundthat this commitment binds the States parties to theAgreement alone and individuals may therefore deriveno rights from this provision.344 In the United States,however, self-execution is the rule for treaties embodyingmost-favoured-nation clauses for the following reasons:

. . . Unconditional most-favoured-nation clauses . . . [provide] forUnited States private interests the benefit in a particular country ofthe best economic opportunity given by that country to any aliengoods or alien capital, whether arising before or after the treatywith the United States has come into effect. But trade and establish-ment treaties, including the most-favored-nation clauses in them,must run both ways, for states will not enter into such arrangementson any other basis. This means that the United States must beable at any given moment to show that the goods and capital ofthe other party may claim unconditional most-favored-nationtreatment in this country. It would be difficult for the United Statesto be able to give the required reciprocity, considering the fact thatunconditional most-favoured-nation clauses are open-ended (i.e.they promise the best treatment given in any other treaty, regardlessof whether the other treaty is later or earlier in time) if in eachinstance implementing legislation by the Congress had to be obtainedto extend the benefit of a treaty with a third country to the countryclaiming most-favoured-nation rights. Self-execution is the onlyfeasible answer to the problem... ,34B

(3) Article 5 states that the persons or things whosetreatment is in question have to be in a "determinedrelationship" with the beneficiary State and that theirtreatment is contingent upon the treatment extendedby the granting State to persons or things which arein the "same relationship" with a third State. A"determined relationship" in this context means thatthe relationship between the States concerned and thepersons and things concerned is determined by the

341 See article 3, para. 1 of the United Kingdom-NorwayConsular Convention of 1951 according to which "Either HighContracting Party may establish and maintain consulates in theterritories of the other at any place where any third State possessesa c o n s u l a t e . . . " (United Nations, Treaty Series, vol. 326, p . 214).

342 Jurisdiction of the Courts of Danzig Case {P.C.I.J., Series B,No. 15, p . 31).

343 S e e p . 117above.344 See G. Bebr, "Directly Applicable Provisions of Community

Law: the Development of a Community Concept", Internationaland Comparative Law Quarterly (London), vol. 19, April 1970,p . 257.

345 Restatement of the Law, Second, Foreign Relations Law ofthe United States (St. Paul, Minn., American Law Institute Pub-lishers, 1965), para. 154, Reporters ' Note 3.


clause, i.e., by the treaty. The clause embodied in thetreaty between the granting and the beneficiary Statehas to determine the persons or things to whom andto which the most-favoured-nation treatment is appli-cable and this determination has to include, obviously,the link between the beneficiary State and the personsand things concerned. The most frequent such relation-ship is nationality or citizenship of persons, place ofregistry of vessels, State of origin of products, etc.Under article 5, the beneficiary State can claim most-favoured-nation treatment in respect of its nationals,ships, products, etc., only to the extent that the grantingState confers the same benefits upon the nationals,ships, products, etc., of a third State. The beneficiaryState is normally not entitled to claim for its residentsthe benefits which the granting State extends to thenationals of the third State. Although residence createsalso a certain relationship between a person and aState, this is not the same relationship as that of thelink of nationality. These two relationships are notinterchangeable. This example explains the meaning ofthe expression "same relationship" as used in article 5.The expression "same relationship", however, has to beused with caution because, to continue the example,the relationship between State A and its nationals isnot necessarily the "same" as the relationship betweenState B and its nationals. Nationality laws of Statesare so diverse that the sum total of the rights and obli-gations arising from one State's nationality laws mightbe quite different from that arising from another State'snationality laws. The meaning of the word "same" inthis context could perhaps be better expressed by theexpressions "the same type of" or "the same kind of".The Commission came, however, to the conclusionthat the wording of article 5 was clear enough andthat an over-burdening of the text would not be desirable.

(4) Article 5 describes the treatment to which thebeneficiary State is entitled as "not less favourable"than the treatment accorded by the granting State toa third State. The Commission considered whether itshould not use the adjective "equal" to denote therelationship between the terms of the treatment enjoyedby a third State and those promised by the grantingState to the beneficiary State. Arguments adduced infavour of the use of the word "equal" were based onthe fact that the notion of "equality of treatment" isparticulalry closely attached to the operation of themost-favoured-nation clause. It has been argued thatthe clause represents and is the instrument of the prin-ciple of equality of treatment and that the clause isa means to an end: the application of the rule of equalityof treatment in international relations. The argumentsput forward against the use of the adjective "equal"admitted that "equal" was not as rigid as "identical"and not as vague as "similar" and was therefore moreappropriate than those expressions. However, althougha most-favoured-nation pledge does not oblige thegranting State to accord to the beneficiary State treat-ment more favourable than that extended to the thirdState, it does not exclude the possibility that the grantingState might accord to the beneficiary State additionaladvantages beyond those conceded to the most-favoured

third State. In other words, while most-favoured-nationtreatment excludes preferential treatment of thirdStates by the granting State, it is fully compatible withpreferential treatment of the beneficiary State by thegranting State. Consequently, the treatment accordedto the beneficiary State and that accorded to the thirdState are not necessarily "equal". This argument wascountered with the obvious truth that if the grantingState accords preferential treatment to the beneficiaryState, i.e., treatment beyond that granted to the thirdState, which it need not do on the strength of the clause,such treatment will be accorded independently of theoperation of the clause. Ultimately, the Commissionaccepted the term "not less favourable" because itbelieved this to be the expression commonly used inmost-favoured-nation clauses.

(5) Most-favoured-nation clauses may define exactlythe conditions for the operation of the clause, namely,the kind of treatment accorded by the granting Stateto a third State which will give rise to the actual claimof the beneficiary State to similar, the same, equal oridentical treatment. If, as is the usual case, the clauseitself does not provide otherwise, the clause comesinto operation, i.e., a claim can be raised under theclause, if the third State (or persons or things in thesame relationship with the third State as the personsor things mentioned in the clause are with the beneficiaryState) has actually been granted the favours whichconstitute the treatment. It is not necessary for thebeginning of the operation of the clause that the treat-ment actually granted to the third State, with respectto itself or the persons and things concerned, be basedon a former treaty or agreement. The mere fact offavourable treatment is enough to set in motion theoperation of the clause. However, the fact of favourabletreatment may consist also in the conclusion or existenceof an agreement between the granting State and thethird State by which the latter is entitled to certainbenefits. The beneficiary State, on the strength of theclause, may also demand the same benefits as wereextended by the agreement in question to the thirdState. The mere fact that the third State has not availeditself of the benefits which are patently due to it underthe agreement concluded with the granting State cannotabsolve the granting State from its obligation underthe clause. The beginning and the termination of theoperation of the clause will be dealt with in a separatearticle to be formulated later by the Special Rapporteur.

(6) According to article 5, "treatment" is that whichis accorded by a State to other States (e.g., with respectto their embassies or consulates) or to persons or tothings. The Commission considered whether it shouldnot also include in the enumeration "activities". Indeed,activities such as the exercise of certain trades andprofessions, entry into port of ships, etc., can also besubjects of most-favoured-nation treatment.346 After a

3it An understanding was reached between Bolivia and Germanyin 1936 to the effect that the operation of the most-favoured-nationclause included in article V of the Treaty of Friendship betweenthe two countries should also cover marriages celebrated by consuls(see Reichgesetzblatt, 1936, II, p. 216, quoted in L. Raape, Inter-nationales Privatrecht (Berlin, Vahlen, 1961, p. 20).


brief discussion, however, it decided not to refer toactivities in the article because activities are ultimatelyrelated to persons and things, so that an express referencewas deemed not to be indispensable.

(7) Article 5 brings in the notion of third State. Theterm "third State" appears also in the Vienna Conventionon the Law of Treaties and the reasons for not usingthe expression "third State" in the present articles inthe same manner as in the Vienna Convention havebeen set out in connexion with article 2, paragraph (rf).347

In earlier history there was a practice whereby the Statesparties to the clause explicitly named the third Stateenjoying the treatment which might be claimed by thebeneficiary State. Thus, the Treaty of 17 August 1417concluded between Henry V of England and the Dukeof Burgundy and Count of Flanders, specified thatthe masters of the ships of the contracting parties shouldenjoy in their respective ports the same favours as the"Francois, Hollandois, ZeUandois, et Escohois".SiS

(8) Similarly, in the Anglo-Spanish Treaty of Com-merce of 1886, Spain accorded to England most-favoured-nation treatment in all matters of commerce, navigation,consular rights and privileges under the same termsand with the same advantages as were accorded toFrance and Germany by virtue of the Treaties of6 February 1882 and 12 July 1883.349 This way ofdrafting does not necessarily produce a "most-favoured"nation clause, because the States mentioned in theclause as tertium comparationis are not necessarilythose most favoured by the granting State. In the in-stances quoted and in most similar cases, they were the"most favoured" and it was precisely because of theirfavoured position that they were selected and explicitlyindicated in the clauses in question. In modern practice,most-favoured-nation clauses are usually drafted insuch a way that they refer as tertium comparationis to"any State".

(9) What often happens is rather an indication orenumeration of determined third States which, underthe operation of the most-favoured-nation clause, willremain in an exceptional position, i.e., the treatmentgranted to them will not be attracted by the operationof the clause. Members of the Commission pointed outin this connexion that special solidarities existing betweenmembers of various groups of States within the inter-national community may induce States to except ex-plicitly from their most-favoured-nation obligations thetreatment granted to a certain group of States withwhich they feel more closely connected. The establish-ment of customs unions, free trade areas and othergroupings may also result in conventional exceptionsto most-favoured-nation pledges. Several members drewattention to the preferences to be granted in the fieldof international trade to developing countries in order

347 See commentary to article 2, para. (5).348 G. Schwarzenberger, "The Most-Favoured-Nation Standard

in British State Practice", The British Year Book of InternationalLaw, 1945 (London), vol. 22, p . 97.

349 Cited in B. Nolde, "Droi t et technique des traites de com-merce", Recueil des cours de I'Academie de droit international deLa Haye, 1924-11 (Paris, Hachette, 1925), vol. 3, p. 413.

that the treatment given to them by developed countriesshould comply with the requirement of justice andshould assist them in the acceleration of their develop-ment. It was pointed out that to apply the most-favoured-nation clause in the field of international trade to allcountries regardless of their level of development wouldsatisfy the conditions of formal equality but wouldin fact involve explicit discrimination against the weakermembers of the international community. The Com-mission instructed the Special Rapporteur, when hecame to the question of exceptions to the most-favoured-nation clause, to deal with it in a sufficiently detailedmanner and take into account not only resolutions ofUNCTAD (such as resolutions 21 (II) of 26 March 1968and 62 (III) of 19 May 1972),330 and resolutions of theGeneral Assembly (such as resolution 2626 (XXV) of24 October 1970 on an International DevelopmentStrategy for the Second United Nations DevelopmentDecade, and 3036 (XXVII) of 19 December 1972 onspecial measures in favour of the least developed amongthe developing countries), but also the arrangementsconcerning the establishment of generalized, non-discriminatory, non-reciprocal preferential treatment toexports of developing countries drawn up in UNCTADas well as in the framework of GATT, and any othermaterial found relevant.

Article 6. Legal basis of most-favoured-nationtreatment

Nothing in the present articles shall imply that a Stateis entitled to be accorded most-favoured-nation treatmentby another State otherwise than on the ground of a legalobligation.

Commentary

(1) Article 6 states in negative form the obvious rulethat no State is entitled to most-favoured-nation treat-ment by another State unless that State has a legalobligation to accord such treatment. This rule followsfrom the principle of the sovereignty of States and theirliberty of action. This liberty includes the right of Statesto grant special favours to some States and not to bebound by customary law to extend the same favoursto others. This right is not impaired by the generalduty of non-discrimination. The general duty not todiscriminate between States is not breached by treatinganother State, its nationals, ships, products, etc., in aparticularly advantageous way. Other States do nothave the right to challenge such behaviour and to demandfor themselves, for their nationals, ships, products, etc.,the same treatment as that granted by the State concernedto a particularly favoured State. Such a claim can right-fully be made only if its proved that the State in ques-tion has a legal obligation to extend to the claimingState the same treatment as that conferred upon the

360 Proceedings of the United Nations Conference on Trade andDevelopment, Second Session, vol. I and Corr.l and 3, and Add.1-2,Report and Annexes (United Nations publications, Sales No. E.68.II.D.14), p. 38; and ibid., Third Session, vol. I, Report and Annexes(United Nations publication, Sales No. E.73.II.D.4), p. 68.


particularly favoured State or on its nationals, ships,products, etc.

(2) In practice, such a legal obligation cannot normallybe proved other than by means of a most-favoured-nation clause, i.e., a conventional undertaking by thegranting State to this effect. Indeed, legal literature ispractically unanimous that, while there is no most-favoured-nation clause without a promise of most-favoured-nation treatment (such a promise being theconstitutive element of the former). States have noright to claim most-favoured-nation treatment withoutbeing entitled to it by a most-favoured-nation clause.351

(3) The question whether States can claim most-favoured-nation treatment from each other as a rightwas discussed in the Economic Committee of the Leagueof Nations but only with respect to customs tariffs.The Economic Committee did not reach any agreementin the matter beyond declaring that ". . . the grant ofmost-favoured-nation treatment ought to be the nor-mal . . .".35a Although the grant of most-favoured-nationtreatment is frequent in commercial treaties, there is noevidence that it has developed into a rule of customaryinternational law. Hence it is widely held that onlytreaties are the foundation of most-favoured-nationtreatment.353

(4) The Commission briefly discussed the questionwhether or not it should adopt a simple rule statingthat most-favoured-nation treatment cannot be claimedexcept on the basis of a most-favoured-nation clause,i.e., under a provision of a treaty (as defined in article 2,paragraph (a)), promising most-favoured-nation treat-ment. It found that, although a rigid statement to thiseffect would to a large extent satisfy all practical pur-poses, it nevertheless would not be in complete con-formity with the legal situation as it exists and wouldnot cover possible future development. While most-favoured-nation clauses, i.e., treaty provisions, constitutein most cases the basis for a claim to most-favoured-nation treatment, it is not impossible even at presentthat such claims might be based on oral agreements.Among other possible sources of such claims, membersof the Commission mentioned binding resolutions ofinternational organizations and legally binding unilateral

361 See, inter alia, E. Usenko, "Formy regulirovania sotsialisti-cheskogo mezhdunarodnogo razdelenia truda" [Forms of theregulation of the Socialist International Division of Labour],Mezhdunarodnye otnoshenia [International relations] (Moscow,1965), p. 238 (German edition, Sozialistische Internationale Arbeits-teilimg und Hire rechtliche Regelung (Berlin, Staatsverlag der Deut-schen Demokratischen Republik), 1966, p. 200); D. Vignes, "Laclause de la nation la plus favorisee . . . , Recueil des cows...(Joe. cit.), p. 224; E. Sauvignon, La clause de la nation la plusfavorisee (Grenoble, Presses universitaires de Grenoble, 1972),p. 7; K. Hasan, Equality of treatment and Trade Discrimination inInternational Law (The Hague, Nijhoff, 1968), p. 33.

362 League of Nations, "Recommendations of the EconomicCommittee relating to Tariff Policy and the Most-Favoured-NationClause" (document E.805.1933.II.B.1), quoted in Yearbook .. . 1969,vol. II, p. 175, document A/CN.4/213, annex I.

353 Cf. G. Schwarzenberger, "The principles and standards ofinternational economic law", Recueil des cours de I'Academie dedroit international de La Haye, 1966-1 (Leyden, Sijthoff, 1967),vol. 117, p. 74.

acts, and as a potential source, a possible evolutionof regional customary law to this effect. The Com-mission therefore decided to adopt the rule in moregeneral terms, that a State is not entitled to most-favoured-nation treatment by another State unless thereexists a legal obligation of the latter to extend suchtreatment.

(5) The Commission further concluded that a rulestating directly that most-favoured-nation treatmentcannot be claimed unless there exists a legal obligationto accord it would fall outside the scope of the articleson the most-favoured-nation clause. The purpose ofsuch articles can only be to state the rules of the operationand application of such a clause if it exists. It is notfor these articles to state the conditions under whichStates can claim most-favoured-nation treatment fromeach other. It is for these reasons that the Commission,while not wishing to omit the rule from the articlesbecause of its theoretical and practical importance,decided to state it in negative form as a general savingclause.

(6) The proper place for this saving clause will bedecided by the Commission after the adoption of allthe articles constituting the final draft, and at thattime an endeavour will be made to find a more appro-priate title which will express the fact that the articleis a saving clause.

(7) The question whether or not a State would violateits international obligations if it granted most-favoured-nation treatment to most of its partners in a certainfield but refused to make similar agreements with otherswas briefly discussed. The Commission took the viewthat, while such behaviour could be considered by theStates not granted most-favoured-nation treatment as anunfriendly act, the present articles could not establisha legal title to such claims which might perhaps bebased on a general rule of non-discrimination. Theanswer to this question is thus clearly beyond the scopeof the present articles.

Article 7. The source and scope ofmost-favoured-nation treatment

The right of the beneficiary State to obtain from thegranting State treatment extended by the latter to a thirdState or to persons or things in a determined relationshipwith a third State arises from the most-favoured-nationclause in force between the granting State and the beneficiaryState.

The treatment to which the beneficiary State is entitledunder that clause is determined by the treatment extendedby the granting State to the third State or to persons orthings in the determined relationship with the latter State.

Commentary

(1) This article sets out the basic structure of theoperation of the most-favoured-nation clause. It statesthat the right of the beneficiary State to receive fromthe granting State most-favoured-nation treatment is


anchored in the most-favoured-nation clause, in otherwords, that the clause is the exclusive source of thebeneficiary State's rights. It also states that the treatment,i.e., the extent of benefits to which the beneficiary Statemay lay claim for itself or for persons or things in adetermined relationship with it, depends upon the treat-ment extended by the granting State to a third State orto persons or tilings in the same relationship with athird State. The rule is important and its validity isnot dependent on whether the treatment accorded bythe granting State to a third State, or to persons orthings in a determined relationship with the latter, isbased upon a treaty, other agreement, unilateral, legisla-tive, or other act, or mere practice.

(2) When two treaties exist, one between the grantingand the beneficiary State containing the most-favoured-nation clause and the other between the granting Stateand a third State entitling the latter to certain favours,the question arises as to which one is the basic treaty.That question was thoroughly discussed in the Anglo-Iranian Oil Company case before the InternationalCourt of Justice. It was contended before the Courtthat:. . . A most-favoured-nation clause is in essence by itself a clausewithout content; it is a contingent clause. If the country grantingmost-favoured-nation treatment has no treaty relations at all withany third State, the most-favoured-nation clause remains withoutcontent. It acquires its content only when the grantor State entersinto relations with a third State, and its content increases wheneverfresh favours are granted to third States 3B1

Against this argument it was maintained that the most-favoured-nation clause:. . . involves a commitment whose object is real. True, it is not deter-mined and is liable to vary in extent according to the treaties con-cluded later, but that is enough to make it determinable. Thus therole of later treaties is not to give rise to new obligations towardsthe State beneficiary of the clause but to alter the scope of the formerobligation. The latter nevertheless remains the root of the law, thesource of the law, the origin of the law, on which the United King-dom Government is relying in this case. [Translation from French.] S6B

The majority of the Court held that:The treaty containing the most-favoured-nation clause is the basictreaty It is this treaty which establishes the juridical link betweenthe United Kingdom [the beneficiary State] and a third-party treatyand confers upon that State the rights enjoyed by the third party.A third-party treaty, independent of and isolated from the basictreaty, cannot produce any legal effect as between the UnitedKingdom [the beneficiary State] and Iran [the granting State]: itis res inter alios acta.si6

The decision of the Court contributed, to a great extent,to the clarification of legal theory. Before the Court'sdecision there was no lack of legal writers who pre-sented the operation of the most-favoured-nation clause(or more precisely that of the third-party treaty) as anexception to the rule pacta tertiis nee nocent nee prosunt;i.e., that treaties only produce effects as between the

contracting parties.357 Legal theory seems now unani-mous in endorsing the findings of the majority of theCourt.358

(3) The solution adopted by the Court is in accordancewith the rules of the law of treaties relating to the effectof treaties on States not parties to a particular treaty.The view that the third-party treaty (the treaty by whichthe granting State accords favours to a third State)is the origin of the rights of the beneficiary State (aState not party to the third-party treaty) runs counterto the rule embodied in article 36, paragraph 1, of theVienna Convention on the Law of Treaties. As explainedin the commentary of the Commission to the 1966 draft(wluch, with insignificant drafting changes, has becomearticle 36 of the Convention):

Paragraph 1 lays down that a right may arise for a State froma provision of a treaty to which it is not a party under two conditions.First, the parties must intend the provision to accord the righteither to the particular State in question, or to a group of Statesto which it belongs, or to States generally. The intention to accordthe right is of cardinal importance, since it is only when the partieshave such an intention that a legal right, as distinct from a merebenefit, may arise from the provision... ,359

It seems evident that the parties to a third party treatydo not have such an intention. They may be awarethat their agreement can have an indirect effect throughthe operation of the most-favoured-nation clause (tothe advantage of the State beneficiary of the clause),but any such indirect effect is unintentional. It followsthat the right of the beneficiary State to a certain advan-tageous treatment does not derive from the treatyconcluded between the granting State and the thirdState and that the provision of article 36 of the ViennaConvention is not applicable to that treaty.

(4) The United Nations Conference on the Law ofTreaties upheld this view. At the fourteenth plenarymeeting, held on 7 May 1969, the President of theConference stated that article 32, paragraph 1 (of the1966 draft of the International Law Commission),"did not affect the interests of States under the most-favoured-nation system".360

(5) By the adoption of article 7, the Commissionmaintained its previous position. Article 7 reflects theview that the basic act (acte regie) is the agreement

354 I.CJ. Pleadings, Anglo-Iranian Oil Co. Case (United King-dom v. Iran) (1952), p. 533.

355 Ibid., p. 616.356 Anglo-Iranian Oil Company Case (Jurisdiction), Judgement

of 22 July 1952 {I.CJ. Reports 1952, p. 109).

357 See e.g., P. Fauchille, Traite de droit international (Paris,Rousseau, 1926), vol. I, 3rd part, p. 359; and L. Oppenheim, Inter-national Law : A Treatise, 8th ed. [Lauterpacht] (London, Longmans,Green, 1955), vol. I, para. 522. See, however, the contrary views ofH. Accioly, Traite de droit international public (Paris, RecueilSirey, 1941), vol. II, p. 479; and M. Sibert, Traite de droit internatio-nal public (Paris, Dalloz, 1951), vol. II, p. 255.

358 G. Schwarzenberger, International Law as Applied by Inter-national Courts and Tribunal, 3rd ed. (London, Stevens, 1957),p. 243; P. Guggenheim, Traite de droit international public (Geneva,Georg, 1967), vol. I, pp. 208-209; and E. Sauvignon, op. cit., p. 78.

368 Yearbook ... 1966, vol. II, p. 229, document A/6309/Rev.l,part II, para. 7 of the commentary to article 32 of the draft articleson the law of treaties) (italics in the third sentence added).

360 Official Records of the United Nations Conference on theLaw of Treaties, Second Session, Summary records of the plenarymeetings and of the meetings of the Committee of the Whole (UnitedNations publication, Sales No. E.70.V.6), p. 63, fourteenth plenarymeeting, para. 36.


between the granting State and the beneficiary State.Under this agreement, i.e., under the most-favoured-nation clause, the beneficiary State will benefit from thefavours granted by the granting State to the third Statebut only because this is the common wish of the grantingState and the beneficiary State. The agreement betweenthe granting State and a third State creating obligationsin their mutual relations does not create obligations inthe relations between the granting State and the bene-ficiary State. This is nothing more than an act creatinga condition (acte condition).

(6) The relationship between the treaty containing themost-favoured-nation clause and the subsequent, thirdparty treaty was characterized by Fitzmaurice as follows:

If the later treaty can be compared to the hands of a clock thatpoint to the particular hour, it is the earlier treaty which constitutesthe mechanism that moves the hands round.361

(7) If there is no treaty or other agreement betweenthe granting State and the third State, the rule statedin the article is even more evident. The root of theright of the beneficiary State is obviously the treatycontaining the most-favoured-nation clause. The extent

381 Sir Gerald Fitzmaurice, "The Law and Procedure of theInternational Court of Justice, 1951-4: Points of Substantive Law,Part II", The British Year Book of International Law, 1955-56(London, 1957), vol. 32, p. 88.

of the favours to which the beneficiary of that clausemay lay claim will be determined by the actual favoursextended by the granting State to the third State.

(8) The parties stipulating the most-favoured-nationclause, the granting State and the beneficairy State, can,however, restrict in the treaty itself the extent of thefavours which can be claimed by the beneficiary State.For example, this restriction can consist of the impositionof a condition, a matter which will be dealt with bythe Commission when it comes to consider the so-called conditional most-favoured-nation clauses in con-nexion with the relevant article contained in the SpecialRapporteur's fourth report. If the clause contains arestriction, the beneficiary State cannot claim anyfavours beyond the limits set by the clause, even ifthis extent does not reach the level of the favours accordedby the granting State to the third State. In other words,the treatment granted to the third State by the grantingState is applicable only within the framework set bythe clause. This is the reason for the wording of thesecond sentence of article 7 which expressly states thatthe treatment to which the beneficiary State or thepersons or things being in a determined relationshipwith it are entitled under the most-favoured-nation clause,is determined by the treatment extended by the grantingState to the third State or to persons or things in thedetermined relationship with the latter State.

Chapter V

QUESTION OF TREATIES CONCLUDED BETWEEN STATES AND INTERNATIONAL ORGANIZATIONSOR BETWEEN TWO OR MORE INTERNATIONAL ORGANIZATIONS

124. At its twenty-third session, in 1971, the Com-mission confirmed the request it had addressed to theSecretary-General at its twenty-second session that heprepare a number of documents on the subject for theuse of members of the Commission,362 it being under-stood that he would, in consultation with the SpecialRapporteur, Mr. Paul Reuter, phase and select thestudies required for the preparation of those documents,which would include, in addition to as full as biblio-graphy as possible, an account of the relevant practiceof the United Nations and the principal internationalorganizations.363

125. In pursuance of the decision referred to in theprevious paragraph, the Special Rapporteur, throughthe Secretary-General, addressed a questionnaire to theprincipal international organizations for the purpose ofobtaining information on their practice in the matter.Pending the receipt of the replies of the organizations,he submitted to the Commission at its twenty-fourth

362 Yearbook . . . 1970, vol. II, p. 310, document A/8010/Rev.l,para. 89.

383 Yearbook... 1971, vol. II (Part One), p. 348, documentA/8410/Rev.l, para. 119 (b).

session a first report 364 which was also communicatedto the organizations concerned. That report contains asurvey of the development of the subject, based on thediscussions in the Commission during its considerationof the question of the law of treaties from 1950 to 1966and in the United Nations Conference on the Law ofTreaties, held at Vienna in 1968 and 1969. In the lightof that survey, the report makes a preliminary examinationof several essential problems such as the form in whichinternational organizations express their consent to bebound by a treaty, their capacity to conclude treaties,the question of representation, the effect of treatiesconcluded by international organizations, and theprecise meaning of the reservation concerning "anyrelevant rules of the organization" which appears inarticle 5 of the Vienna Convention on the Law ofTreaties.365

126. At the present session, the Special Rapporteursubmitted a second report (A/CN.4/271) 366 designed tosupplement the preceding one by taking account of new

864 Yearbook... 1972, vol. II, p. 171, document A/CN.4/258.365 Ibid., p . 324, document A/8710/Rev.l, para. 76.366 See p. 75 above.


elements—primarily the substantial information receivedfrom international organizations. The report deals firstwith questions of method under the following fourheadings: the preparation of a set of draft articles asthe final objective; adherence to the framework of theVienna Convention on the Law of Treaties; the scopeof the first questionnaire addressed to internationalorganizations; and the difficulty of principle, linkedwith the question to what extent the codification envis-aged, by introducing two new features—stability andgenerality—into the regime of the agreements of inter-national organizations, might affect the spontaneouselaboration by international organizations of a corpusof solutions adapted to the individual needs and characterof each of them. The report goes on to consider someproblems of substance relating to the law of treaties,presented by reference to the various parts of the ViennaConvention under the following headings: Part I ofthe Vienna Convention entitled "Introduction" and theconcept of "party"; Part 11 of the Vienna Conventionentitled "Conclusion and entry into force of treaties":the form of agreements, the capacity of internationalorganizations to conclude treaties, representation, thelast question consisting of the following three points:the determination and proof of capacity to representan international organization in any stage of the con-clusion of a treaty; agreements concluded by subsidiaryorgans, and participation of an international organizationin a treaty on behalf of a territory it represents; Part IIIof the Vienna Convention, entitled "Observance,application and interpretation of treaties": agreementsconcluded with a view to applying other agreements,"internal agreements" with respect to an internationalorganization, and the effects of agreements with respectto third parties—this last question seen from a dualstandpoint: is the international organization a thirdparty in relation to certain treaties between States?and are States members of an international organizationthird parties in relation to agreements concluded bythat organization?

127. The Commission considered the first and secondreports submitted by Mr. Paul Reuter, Special Rap-porteur, at its 1238th and 1241st to 1243rd meetings.

128. The Commission approved the general lines ofthe method followed hitherto by the Special Rapporteur,particularly in regard to the collection of informationfrom international organizations, and agreed that theenquiry from that source should be continued untilthe Commission's next session. Some members of theCommission expressed the wish that the informationobtained should be circulated as soon as possible andthat the organizations should in due course be associatedmore directly with the Commission's work on thistopic.

129. The Commission confirmed the instructions pre-viously given to the Special Rapporteur regarding thecharacter and general outline of a set of draft articleson the subject.

130. Although, generally speaking, the essential aimmust be to adapt and transpose the provisions of the

Vienna Convention, various shades are discernible inthe opinions expressed on this subject. Some membersfeel that the Special Rapporteur should enjoy a certainliberty in regard to the provisions of the Vienna Con-vention, others feel that the framework of the Conventionshould be fairly stricly adhered to.

131. With regard to the subject of the report, it wasagreed unanimously that the draft should start from adefinition of "international organization" identical withthe one given in the Vienna Convention. It was generallyaccepted that the subject of the report should be theagreements of international organizations and that thereshould be no encroachement on questions governed bythe law peculiar to each organization. In many cases, nosolution sufficiently precise or general to provide a basisfor rules common to all organizations has been foundfor certain problems; this would seem to be the case,for example, with problems relating to agreementsconcluded by subsidiary organs, to the representationof certain territories by international organizations, andto most aspects of the representation of internationalorganizations in the conclusion of treaties. On certainquestions, widely differing views were expressed. Forexample, on the question of the capacity of internationalorganizations to conclude international agreements, somemembers of the Commission consider that this capacityis inherent in an international organization, others thatit does not come within the subject of the report, whileothers, though anxious that the draft should include oneor more provisions on the matter, consider that thequestion is governed essentially by the law peculiar toeach organization. The Special Rapporteur indicated thathe would try to prepare one or more draft articles onthe subject of capacity.

132. A fairly substantial exchange of views was alsoheld on the fundamental and difficult problem of theeffects of certain treaties between States with respect toan organization which is not a party to them, and itsconverse, the effects of an agreement to which an organiza-tion is a party with respect to the States members ofthe organization concerned. This problem involves thequestion of the effects of treaties and agreements withrespect to third parties. To what extent are the principleslaid down in the Vienna Convention adequate for solvingthis problem? To what extent is it enough merely tointroduce an element of flexibility into some of the ruleslaid down in this Convention, particularly those regardingformalities in articles 35 and 37? Several different sugges-tions were made, but the Commission as a whole requestedthe Special Rapporteur to undertake a detailed study ofthis problem.

133. In conclusion, the Commission approved thegeneral lines of the reports which had been submittedto it and decided to continue, for the time being by thesame methods as last year, the collection of informationfrom international organizations, with special emphasison certain particular points. It requested the SpecialRapporteur to continue his work and to begin thepreparation of a set of draft articles on the basis of thereports and the comments made during the discussion.


Chapter VI

REVIEW OF THE COMMISSION'S PROGRAMME OF WORK

134. As already mentioned,367 the Commission adoptedas item 5 of its agenda for the twenty-fifth session thefollowing item:

5. (a) Review of the Commission's long-term programme ofwork: "Survey of International Law" prepared by theSecretary-General (A/CN.4/245);

(6) Priority to be given to the topic of the law of the non-navigational uses of international watercourses (para. 5 ofsection I of General Assembly resolutions 2780 (XXVI)and 2926 (XXVII)).

135. The present chapter contains a summary of theCommission's proceedings at earlier sessions withrespect to each of the two aspects of the item, togetherwith a summary of the Commission's discussion on theitem at the present session, preceded by a commentaryon the Commission's work during its first twenty-fivesessions.

A. Summary of the Commission's proceedings priorto the present session

1. REVIEW OF THE COMMISSION'S LONG-TERMPROGRAMME OF WORK

136. At its nineteenth session, held in 1967, the Inter-national Law Commission, having in mind that thefollowing year it was due to hold its twentieth session,considered that that would be an appropriate time fora general review of the topics which had been suggestedfor codification and progressive development, of therelation between its work and that of other UnitedNations organs engaged in development of the law, andof its procedures and methods of work under its Statute.It therefore unanimously decided to place on the pro-visional agenda for its twentieth session an item on reviewof the Commission's programme and methods of work.368

137. At its twentieth session, held in 1968, the Com-mission had before it two working papers prepared bythe Secretariat on the Commission's programme andmethods of work, which it decided to include as anannex to its report to the General Assembly on the workof the session.369 The Commission discussed the itemboth at public and private meetings and reached anumber of conclusions and decisions thereon.370 Interalia, it agreed that it should give attention to its long-term programme of work and for that purpose decidedto ask the Secretary-General to prepare a new survey

of the whole field of international law on the lines of thememorandum entitled Survey of international law inrelation to the work of codification of the InternationalLaw Commission371 submitted at the Commission'sfirst session in 1949. On the basis of such a new survey,the Commission could then draw up a list of topics thatwere ripe for codification, taking into account GeneralAssembly recommendations and the international com-munity's current needs, and discarding those topics onthe 1949 list which were no longer suitable for treat-ment.372

138. At its twenty-first session, held in 1969, the Com-mission confirmed its intention of bringing up to dateits long-term programme of work by again surveyingthe topics suitable for codification in the whole field ofinternational law, in accordance with article 18 of itsStatute. With a view to facilitating this task, the Com-mission asked the Secretary-General to submit a pre-paratory working paper.373

139. Pursuant to this request, the Secretariat submitted,at the twenty-second session of the Commission, heldin 1970, a preparatory working paper concerning thereview of the Commission's programme of work.374

Confirming again its intention of bringing up to dateits long-term programme of work, the Commissionasked the Secretary-General to submit at its twenty-thirdsession a new working paper as a basis for the Com-mission's selection of a list of topics which might beincluded in its long-term programme of work.375

140. At its twenty-third session in 1971, the Commissionhad before it a working paper entitled "Survey of Inter-

367 See chap. I , para . 9 above.368 Yearbook... 1967, vol. I I , p . 369, document A/6709/Rev.l

and Rev . l /Cor r . l , para . 49.3 8 1 Yearbook ... 1968, vol. I I , p ^ ̂ ( ^ d o c u m e n t A/720?/Rev,l ,

annex.370 Ibid., pp. 223-224, paras. 95-101.

871 United Nations publication, Sales No . 1948.V.1(1).372 Ibid., p . 57, para. 99. Chapter I I , para. 16 of the report of

the Commission on the work of its first session ( Yearbook ... 1949,p . 281, document A/925), contains the following list of topicsselected by the Commission for codification:

1. Recognition of States and Governments;2. Succession of States and Governments;3. Jurisdictional immunities of States and their property;4. Jurisdiction with regard to crimes committed outside national

territory;5. Regime of the high seas;6. Regime of territorial waters;7. Nationality, including statelessness;8. Treatment of aliens;9. Right of asylum;

10. Law of treaties;11. Diplomatic intercourse and immunities;12. Consular intercourse and immunities;13. State responsibility;14. Arbitral procedure.373 Yearbook... 1969, vol. II , p . 235, document A/7610/Rev.l ,

para .91.374 Yearbook... 1970, vol. I I , p . 247, document A/CN.4/230.376 Yearbook ... 1970, vol. I I , p . 309, document A/8010/Rev.l ,

para. 87.


national Law",376 prepared by the Secretary-General inresponse to the Commission's request referred to in thepreceding paragraph. The "Survey" was introduced inthe Commission by Mr. Constantin A. Stavropoulos,Legal Counsel of the United Nations, on behalf of theSecretary-General.

141. The Commission held a preliminary discussion onthe review of its long-term programme of work, duringwhich several members made general observations on the"Survey" as well as detailed comments on particularpoints or subjects referred to in it. Being conscious ofthe need for further reflection on a question whichmight influence the codification and progressive develop-ment of international law in the years to come, and inview of the fact that members were at the end of theirterm of office, the Commission concluded that the de-finitive task of reviewing its long-term programme ofwork should be left to the Commission in its new compo-sition. With these considerations in mind, the Com-mission decided, inter alia, (a) to place on the provisionalagenda of its twenty-fourth session an item entitled"Review of the Commission's long-term programme ofwork: 'Survey of International Law' prepared by theSecretary-General (A/CN.4/245)", and (b) to invitemembers of the Commission to submit written statementson the review of the Commission's long-term programmeof work to be circulated at the beginning of the twenty-fourth session of the Commission.3"

142. At its twenty-fourth session, held in 1972, theCommission had before it the observations submittedby some members on the Commission's long-termprogramme of work. In view of the great difficulties ofcompleting, in the course of a ten-week session, thetwo sets of draft articles on other topics which it actuallyprepared, the Commission did not, however, considerthe item at that session.

143. The General Assembly, by resolutions 2272 (XXII)of 1 December 1967, 2400 (XXIII) of 11 December 1968,2501 (XXIV) of 12 November 1969, 2634 (XXV) of12 November 1970,2780 (XXVI), section I, of 3 December1971 and 2926 (XXVII), section I, of 28 November 1972,endorsed the decisions of the Commission regarding thereview of its long-term programme of work.

376 The "Survey" contains a preface, an introduction and seven-teen chapters, subdivided in some cases into sections. The chaptersare entitled: I. The position of States in international law; II . Thelaw relating to international peace and security; I I I . The lawrelating to economic development; IV. State responsibility; V. Suc-cession of States and Governments; VI. Diplomatic and consularlaw; VII. The law of treaties; VIII . Unilateral acts; IX. The lawrelating to international watercourses; X . The law of the sea;XL The law of the air ; XII. The law of outer space; XIII . The lawrelating to the environment; XIV. The law relating to internationalorganizations; XV. International law relating to individuals;XVI. The law relating to armed conflicts; XVII. Internationalcriminal law. (See Yearbook... 1971, vol. II (Part Two) docu-ment A/CN.4/245.)

377 Yearbook... 1971, vol. I I (Part One), p . 351, docu-ment A/8410/Rev.l , paras. 127 and 128.

2. PRIORITY TO BE GIVEN TO THE TOPIC OF THE LAWOF THE NON-NAVIGATIONAL USES OF INTERNATIONALWATERCOURSES

144. In paragraph 1 of resolution 2669 (XXV) of8 December 1970, the General Assembly recommendedthat the International Law Commission should as afirst step, take up the study of the law of the non-navi-gational uses of international watercourses with a viewto its progressive development and codification and, inthe light of its scheduled programme of work, shouldconsider the practicability of taking the necessary actionas soon as the Commission deemed it appropriate.

145. In the light of the General Assembly's recom-mendation quoted in the preceding paragraph, theCommission, at its twenty-third session, held in 1971,decided to include a question entitled "Non-navigationaluses of international watercourses" in its general pro-gramme of work without prejudging the priority to begiven to its study. It would be for the Commission in itsnew composition to decide what priority the topic shouldbe given and what other action should be taken, bearingin mind the current programme of work of the Com-mission as well as its revised long-term programme.378

146. The Commission agreed that for undertaking thesubstantive study of the rules of international law relatingto non-navigational uses of international watercourseswith a view to their progressive development and codi-fication on a world-wide basis, all relevant materials onState practice should be compiled and analysed. TheCommission noted that a considerable amount of suchmaterial had already been published in the Secretary-General's report on "Legal problems relating to theutilization and use of international rivers"379 preparedpursuant to General Assembly resolution 1401 (XIV)of 21 November 1959, as well as in the United NationsLegislative Series.380 On the other hand, paragraph 2of General Assembly resolution 2669 (XXV) requestedthe Secretary-General to continue the study initiated inaccordance with General Assembly resolution 1401 (XIV)in order to prepare a "supplementary report" on thelegal problems relating to the question, "taking intoaccount the recent application in State practice andinternational adjudication of the law of internationalwatercourses and also intergovernmental and non-governmental studies of this matter".381

147. In paragraph 5, section I, of resolution 2780(XXVI) of 3 December 1971, the General Assemblyrecommended that "the International Law Commission,in the light of its scheduled programme of work, decideupon the priority to be given to the topic of the law ofthe non-navigational uses of international watercourses".

148. At its twenty-fourth session, held in 1972, theCommission indicated its intention to take up the fore-

378 Ibid., p . 350, para. 120.379 A/5409 (to be printed in Yearbook... 1974, vol. I I (Part Two)).380 United Nations, Legislative Texts and Treaty Provisions

Concerning the Utilization of International Rivers for Other Purposesthan Navigation (United Nations publication, Sales N o . 63.V.4).

381 Yearbook... 1971, vol. I I , p . 350, document A/8410/Rev.l ,para . 121.


going recommendation of the General Assembly when itcame to discuss its long-term programme of work. Atthat session, the Commission reached the conclusionthat the problem of pollution of international waterwayswas one of both substantial urgency and complexity andaccordingly requested the Secretariat to continue compil-ing the material relating to the topic with special referenceto the problems of the pollution of international water-courses.SS2

149. In paragraph 5, section I, of resolution 2926(XXV11) of 28 November 1972, the General Assemblynoted the Commission's intention, in the discussion ofits long-term programme of work, to decide upon thepriority to be given to the topic. Also by the same reso-lution (paragraph 6 of section I) the General Assemblyrequested the Secretary-General to submit, as soon aspossible, the study on the legal problems relating to thenon-navigational uses of international watercoursesrequested by the Assembly in resolution 2669 (XXV),and to present an advance report on the study to theInternational Law Commission at its twenty-fifth session.

150. Pursuant to the foregoing decision of the GeneralAssembly, the Secretary-General submitted to the Com-mission, at its present session, an advance report(A/CN.4/270) 38S on the progress of work in the pre-paration of the supplementary report requested by theAssembly.

B. The work of the Commission duringits first twenty-five sessions

151. On the occasion of its tenth session, in 1958, theInternational Law Commission included in its report tothe General Assembly on the work of that session abrief review of the work accomplished during the firstten years of its existence.384 That review had a bearingon the planning and possible speeding up of the work ofthe Commission, a matter that was then under discussion.The question of the methods of work of the Commissionis one that merits continuous attention; nevertheless, inview of the fact that now, at the close of a quarter of acentury, a far greater volume of codification of inter-national law is available than existed at the end of thefirst decade, it is appropriate to look back, and ahead,from a somewhat wider angle. This can be done bothconcisely and comprehensively, since the General As-sembly has in recent years had access to three documentswhich give a fairly complete picture of the Commission'swork and achievements. Two of those documents havealready been referred to; they are the working papersprepared by the Secretariat on the review of the Com-mission's programme and methods of work,385 andthe "Survey of International Law" prepared by the

Secretary-General.386 The third document is a revisededition of the booklet entitled The Work of the Inter-national Law Commission, issued by the Office of PublicInformation of the United Nations.887

152. When the International Law Commission held itsfirst session, in 1949, it had before it the first Survey ofInternational Law submitted by the Secretary-General asa guide to the Commission in its initial task underarticle 18 of its Statute.388 As provided for in that article,the Secretariat's memorandum surveyed "the wholefield of international law with a view to selecting topicsfor codification". The document covered the whole ofinternational law, as it then existed, in such a systematicmanner that no topic for future work could possibly beoverlooked. It was inspired by a confident optimismthat reflected the codification ideals of an earlier period,rather than the practical difficulties experienced underthe League of Nations. Thus it stated,

if it is realized... that the eventual codification of the entirety ofinternational law must properly be regarded as the ultimate objectof the International Law Commission—then the question of selectionof topics no longer presents an insoluble or perplexing problem.If we bear that in mind, then the question of selection of topicsis no longer one of haphazard and, possibly, arbitrary choice, butone of fitting the work of the Commission at any particular timeinto the orbit of a comprehensive plan.389

153. It may be pointed out in this connexion that, ina way, the Commission inherited at its birth certainideas and experience with respect to the codification ofinternational law which in part went far back into thenineteenth century and even beyond. From the FrenchRevolution up to the period before the First World War,philosophers and jurists in different parts of the worldhad attempted to embrace the entirety of the law ofnations in codes of increasing complexity, from the veryconcise draft, still worth reading, which the Abbe Gregoiresubmitted to the French Convention, to elaborateprojects comprising thousands of articles.

154. The Commission, on the other hand, in accordancewith its Statute, had to take a more pragmatic approachand to select particular topics, a process for which thesurvey of the whole field of international law was thelogical means. With respect to the question of establishinga general plan of codification, the report of the Com-mission covering the work of its first session stated:

The Commission discussed the question whether a general planof codification, embracing the entirety of international law, shouldbe drawn up. Those who favoured this course had in view thepreparation at the outset of a plan of a complete code of publicinternational law, into the framework of which topics would beinserted as they were codified. The sense of the Commission wasthat, while the codification of the whole of international law wasthe ultimate objective, it was desirable for the present to beginwork on the codification of a few of the topics, rather than to

38a Yearbook ... 1972, vol. II , p . 324, document A/8710/Rev.l,para. 77.

383 See p. 95 above.384 Yearbook... 1958, vol. II, pp. 109-110, document A/3859,

paras. 68-69.385 See para. 137 above.

38C See para. 140 above.387 United Nations publication, Sales No. E.72.I.17.388 Survey of International Law in relation to the Work of Codifi-

cation of the International Law Commission (United Nations publi-cation, Sales No. 48.V. 1(1)).

389 Ibid., para. 19.


discuss a general systematic plan which might be left to laterelaboration.3*0

This initial statement marked the transfer from ultimateobjectives to what were later to be called "the currentneeds of the international community".

155. In this spirit the Commission, at its first session,reviewed 25 topics which represented most of the concretematters on which the development of international lawhad focused until that moment. It dropped certaintopics of a generic nature, such as "subjects of inter-national law" and "sources of international law". It alsodropped the "laws of war", a subject which only cameback to the Commission, at any rate in certain of itsaspects, when the formulation of the Niirnberg Principlesand some related questions were referred to the Com-mission by the General Assembly in resolution 177 (II)of 21 November 1947. Ever since, the Commission haskept within the limits of the international law of peaceand made its drafts strictly applicable to peaceful con-ditions only.

156. Looking back, in the perspective of time, fromthe twenty-fifth to the first session, what may seemstriking is not so much the fact that the Commissionrenounced the codification of the whole of internationallaw, but the degree to which an approximation to thatultimate aim has taken place under the original long-term programme. Most of the fourteen topics selectedat the time have materialized, or will do in due course,into final drafts, including all the great chapters thatwere inherited from traditional international law. Thelaw of treaties, the law of the sea, State succession,nationality, State responsibility, diplomatic and consularintercourse have been dealt with or are being studied.Perhaps the one single subject found on the 1949 listwhich was always considered to be a major one and onwhich the Commission did only initial work is the"treatment of aliens". That subject was studied on thebasis of the first reports submitted on State responsi-bility but it was decided later not to proceed, in sucha context, with the development of any substantive rulesthe breach of which would entail State responsibility.

157. Nevertheless, the fact that a considerable part ofthe original programme could be realized, or is wellunder way, is somewhat overshadowed by importantevents which occurred after the Commission started itswork, and which led to an increasing law-making activity.

158. A most far-reaching development, whose fullimpact on the work of the Commission could only befelt in the course of time, was the advent of the decoloni-zation process. In the space of a few years, that processmultiplied the number of sovereign States, therebygiving to an increasing part of mankind the opportunityto make its own contribution to the codification andprogressive development of international law. As faras the Commission was concerned, the process madeitself felt particularly in the field of State succession,where adaptations were made to meet the specific needsof new States.

159. Decolonization also had vast consequences forlaw-making activities outside the Commission. The newchapter of international law relating to economic develop-ment and economic and technical assistance draws itsessential significance from those economic and socialinequalities which only became fully manifest in theprocess of decolonization. The new law of economicdevelopment appeals to a very old and inherent conceptof all law, namely, the concept of justice calling forequality of treatment of equals and, if need be, inequalityof treatment of unequals in such a manner that justicemay emerge in the final result. As the Secretary-Generalof the United Nations expressed it in a recent note,when defining "equity" as the main objective of collectiveeconomic security, "equal treatment is equitable onlyamong equals".391 In the sphere of the Commission'sactivities, the study of the most-favoured-nation clause,recently undertaken by the Commission, is perhaps theone most immediately related to these ideas, even thoughfrom a technical point of view that subject is a specializedpart of the law of treaties.

160. A law-making activity which had remained fromthe beginning outside the domain of the Commissionemerged in the field of human rights. This was notentirely unexpected since the seed of this new inter-national law was already planted in the Charter of theUnited Nations, and the Commission on Human Rightswas established well before the International Law Com-mission. On the very day of its establishment theCommission was directed by the General Assembly, ashas already been mentioned,892 to formulate the prin-ciples of international law recognized in the Charter ofthe Niirnberg Tribunal and in the judgement of theTribunal. Within the purview of the same subject-matter,the Commission was also directed by the GeneralAssembly to study the question of international criminaljurisdiction and to prepare a draft code of offencesagainst the peace and security of mankind. As most ofthe other early studies and drafts that were assigned tothe Commission by the General Assembly, such as thedraft declaration on rights and duties of States and thequestion of defining aggression, the draft code of offences,completed in 1951 and modified at later sessions,393 hasmore or less receded into the background of the Com-mission's achievements, but read again in the light ofthe subsequent evolution of international relations, itmight well provide a framework for re-thinking thewhole subject-matter of individual offences of inter-national concern.

161. Another phenomenon which manifested itself ona scale unknown to pre-war international law andwhich constituted an important contribution to theelaboration of international texts of a legal nature, wasthe institutionalization of the international communitythrough an increasing number of international organiza-tions, each with its own legal system and methods. This

390 Yearbook... 1949, p . 290, document A/925, para. 14.

391 E/5263, section 3, second paragraph.392 See para. 155 above.393 Yearbook ... 1951, vol. II, p. 134, document A/1858, para. 59.

See also General Assembly resolution 1186 (XII) of 11 December1957.


development was brought before the Commission as anaspect of the law of treaties, pursuant to a resolutionof the United Nations Conference on the Law of Treatiesrecommending the study of agreements concluded byinternational organizations.39* The work being under-taken in this area will provide an opportunity to examine,apart from the much discussed relationship betweeninternational law and national law systems, the inter-action of international law systems as represented bygeneral international law on the one hand and organiza-tional systems on the other. Previously the rapid pro-gression of the institutionalization of the internationalcommunity has led the Commission to review the legalrelations between States and international organizationsas laid down, at the time the Commission was established,in conventions on privileges and immunities and head-quarters agreements within the framework of the UnitedNations system.

162. The technological revolution was the last externalevent whose international legal consequences were notforeseen in the long-term programme of work of theCommission. Certain law-making activities followingfrom technological innovations, particularly with regardto the law of the sea, outer space and the human environ-ment, have taken place outside the Commission. Thereis one significant exception, however; the fact thatexploitation of the continental shelf suddenly camewithin the range of practical possibility induced theCommission to add a draft on that subject to the othersit had prepared on the law of the sea. There are indicationsthat old legal concepts now being further developed inthe fields just mentioned will eventually have to beexamined in a new light, either in the context of theCommission's current work, or as separate topics.

163. Compared to the wide possibilities that seemedto be within reach in the late 1940s, a different situationpresents itself at the opening of a new era in the Com-mission's existence. The new trends in the developmentof international law which manifested themselves at anearly date have in the meantime generated a mass ofauthoritative statements of a legal nature. There is noreason to assume that this process will slow down inthe years to come, nor that the present specializationin law-making functions will diminish. The formulationof aims and principles of economic development is afield of continuous study; the interdependence of thecomponent parts of the international community isreflected in the continuous growth of internationalinstitutions, each with its own practice contributing tointernational law. The position of the individual in theinternational legal system remains an inexhaustiblesource of legal study. The aspect of human duties andresponsibilities under international law is due to becomemore prominent the more it becomes a fact of inter-national concern that private persons, individual as wellas corporate, in certain parts of the world are able tocontrol an increasing amount of physical and economic

804 Official Records of the United Nations Conference on theLaw of Treaties, Documents of the Conference (United Nationspublication, Sales No. E.70.V.5), p. 285, document A/CONF.39/26,annex, resolution relating to article 1 of the Vienna Conventionon the Law of Treaties.

power. The rapid development of science and technologyin such fields as nuclear energy, the conquest of outerspace and the exploitation of the sea-bed, makes anyprediction very difficult. But it may be predicted withsome confidence that in the aftermath of such events asthe United Nations Conference on the Human Environ-ment held at Stockholm in 1972 and the future conferenceson the law of the sea there will be a series of new rules,and a development of old rules, on such matters asresponsibility, co-operation and protection.

164. The Charter of the United Nations has been astabilizing and consolidating factor. Its formulationswere wide enough to be adapted by practice and judicialdecision to needs that could not be foreseen in everydetail at the time of their drafting. Actually, specialorgans were established to provide an authoritativeinterpretation of parts of the Charter, such as the SpecialCommittee on the Definition of Aggression, whichrelieved the International Law Commission of one ofthe tasks assigned to it earlier. Of particular importancewas the work of the Special Committee which draftedthe Declaration on Principles of International Lawconcerning Friendly Relations and Co-operation amongStates, adopted by the General Assembly by resolution2625 (XXV) of 24 October 1970, which is essentiallyan extensive interpretation of principles laid down inChapter I of the Charter. The Commission in its dis-cussions has often referred to that important Declarationwhich was adopted solemnly and unanimously. Themore nearly the goal of universal membership in theworld Organization is attained, the more the Charter,enriched by the practice of its application, will providethe framework into which, having regard to Article 103,the creation of all international law has to fit.

165. Among the different bodies that work or haveworked within the United Nations system on the defini-tion of the principles of international law, the Inter-national Law Commission has very distinctive features.As a permanent organ the Commission has in its life-timegarnered a rich experience. Thanks to the CodificationDivision of the Office of Legal Affairs of the UnitedNations Secretariat, it has at its disposal for any newundertaking a full scientific documentation. In thesuccessive phases of the preparation of a draft, it profitsfrom an exchange of views through government commentsand annual debates in the Sixth Committee of the GeneralAssembly. It maintains consultative and co-operativerelations with organizations belonging to the UnitedNations family and with regional bodies engaged in legalwork similar to its own.

166. One advantage of machinery such as the Com-mission is the continuous interaction, throughout thedevelopment of a codification draft, between professionalexpertise and governmental responsibility, between inde-pendent vision and the realities of international life.This element, so often absent from earlier attempts atcodification, has proved to be the condition which offersthe best prospects for the success of the codificationconference to which a draft is finally submitted, and ofthe entry into force of any convention that eventuallyresults. One obvious disadvantage is that such a safe


and solid method is also time-consuming; in effect thepreparation by special rapporteurs of their reports, thetime allowed for government comments, the considerationof those comments in the course of a second reading ofa draft, and the fact that the General Assembly, likethe Commission itself, is not a continuously functioningbody, entails a process that often takes years. Whateverimprovements it may be possible to make in the methodsof work of the Commission, it is clear that there is aninbuilt periodicity at work that places certain limits onthe Commission's ability to respond promptly to urgentrequests.

167. Taking into account these inherent limitations,there are no statutory restraints on the future tasks of theCommission, subject to the decision of the GeneralAssembly. As was already stated in the first Survey ofInternational Law: "the task of the Commission indeciding upon its plan of work is simplified by thedeliberate elasticity of its Statute".395 The distinction inthe Statute between progressive development of inter-national law and its codification has proved in practicenot to require different methodological approaches.Where a distinction has appeared is rather betweenmodes of progressive development. There are the entirelynew areas, undiscovered by pre-war international law,of which several examples have been given in the pre-ceding paragraphs. Besides subjects in regard to which,as denned in the Statute "the law has not yet been suffi-ciently developed in the practice of States",396 there areareas where such practice does exist but is insufficientlyexplored, as has become clear in connexion with thestudy of the law of succession. Finally, it may be recalledthat the Commission has from time to time proposedcertain specific innovations, independently of the moreor less progressive nature of the context in which theinnovations appeared.

168. With regard to the nature of the future tasks ofthe Commission, it is planned to proceed to the fullcompletion of the structural projects that are already onits programme, that is to say, State responsibility andsuccession of States. The more comprehensive their scopeappears to be, the more a certain overlap and inter-relation will make themselves felt, as has been alreadyshown on the borderline between the law of treaties andthe law of succession, and between the latter and thelaw of responsibility. Sometimes it appears necessary,when a subject becomes too extensive, to split off anautonomous part so that in that way a topic of codifica-tion generates new topics, but the original connexionwill remain as a link in the structural coherence ofinternational law. It is not sufficient to consider thesystematic unity of international law as mainly a theore-tical question; actually this was not the purpose of thefirst Survey. The unity and the interconnexion of allinternational law may well be seen as a practical con-tribution to its stability and credibility. The Commissionis well equipped to watch over that particular aspect ofcodification.

169. With regard to the instruments of codification,it is to be expected that in the years ahead the codificationconvention will continue to be considered as the mosteffective means of carrying on the work of codification.Its preciseness, its binding character, the fact that it hasgone through the negotiating stage of collective diplomacyat an international conference, the publication and widedissemination of the conventions, all these are assetsthat will not lightly be abandoned. In the interests of theeffectiveness of the codification process, the Commissionwould consider it desirable for the conventions adoptedat codification conferences to receive as soon as possiblethe formal consent (ratification or accession) of States.

C. Consideration of the item by the Commissionat its present session

170. At its present session, the Commission consideredthe item on the review of the Commission's long-term programme of work at its 1233rd to 1237th meetings.

171. It was noted that, in accordance with previousdecisions of the Commission, endorsed by the GeneralAssembly, the Commission will, for some years, haveample work to do to complete consideration of thefive topics upon which it is at present actively engaged,397

namely:1. Succession of States in respect of treaties;2. State responsibility;3. Succession of States in respect of matters other

than treaties;4. The most-favoured-nation clause;5. The question of treaties concluded between States

and international organizations or between two ormore international organizations.

172. It was also noted that, in addition to the topicslisted in the preceding paragraph, other topics remainin the Commission's long-term programme of work asconstituted by the list originally adopted in 1949 398 andthe topics later added to it pursuant to recommendationsof the General Assembly.

173. In the course of consideration of the long-termprogramme of work, apart from the topic of the lawof the non-navigational uses of international water-courses,399 among the topics repeatedly mentioned werethe jurisdictional immunities of foreign States and oftheir organs, agencies and property; unilateral acts;treatment of aliens; and liability for possible injuriousconsequences arising out of the performance of certainlawful activities. Frequent reference was also made tothe law relating to the environment and the law relatingto economic development. Other topics on which oneor more members thought that the Commission mightenvisage undertaking work included extradition, the law

895 Survey of International Law... (pp. cit.), para. 20.a96 Article 15.

397 An account of the consideration by the Commission, at itstwenty-fifth session, of the last four of those topics appears inchapters II to V above.

308 See foot-note 372 above.390 See para. 175 below.


relating to international organizations, succession ofGovernments, peaceful settlement of disputes, recognitionof States and Governments, and the right of asylum.

174. The Commission decided that it would give furtherconsideration to the foregoing proposals or suggestionsin the course of future sessions.

175. The Commission, pursuant to General Assemblyresolution 2780 (XXVI) of 3 December 1971, gave specialattention to the question of the priority to be given tothe topic of the law of the non-navigational uses ofinternational watercourses. In the discussions regardingthis topic, most members supported the view that itwas desirable to proceed promptly with the considerationof that topic. A number emphasized the urgency oftaking up the legal aspects of the problem of pollution ofinternational watercourses and proposed that this shouldbe the first problem to be studied. The Commission alsotook into account the fact that the supplementary reporton international watercourses 400 would be submitted

to members by the Secretariat in the near future. Itaccordingly considered that a formal decision on thecommencement of work on the topic should be takenafter members had had an opportunity to review thereport.

176. In connexion with the discussion regarding theCommission's future programme of work, reference wasmade by several members to the need to improve thecurrent methods of work with a view to meeting therequirements of such a programme. The Commissionalso reiterated the recommendation it had made at itstwentieth session, held in 1968, regarding the pressingneed to increase the staff of the Codification Division ofthe Office of Legal Affairs 401 so as to enable it to giveto the Commission and to its special rapporteurs all theassistance required by the increasing demands of itswork, especially in the area of research projects andstudies.

100 See paras. 149-150 above.401 Yearbook ... 1968, vol. II, p. 223, document A/7209/Rev.l,

para. 98 (c).

Chapter VII

OTHER DECISIONS AND CONCLUSIONS OF THE COMMISSION

A. Succession of States in respect of treaties

177. As the former Special Rapporteur for this topic,Sir Humphrey Waldock, resigned from membership ofthe Commission upon being elected to the InternationalCourt of Justice during the twenty-seventh session ofthe General Assembly, the Commission decided toappoint Sir Francis Vallat as the new Special Rapporteurfor the topic of succession of States in respect of treaties.

bility, with a view to the preparation of a first set ofdraft articles on that topic as repeatedly requested bythe General Assembly. In order to accomplish satis-factorily its intended programme, bearing in mind thecomplexity of the topics, the large number of draftarticles involved and the need to achieve rapid progressin the study of State responsibility, members of theCommission deemed it indispensable to request a fourteen-week session for 1974.

B. Organization of future work

178. At its twenty-sixth session the Commission intendsto concentrate on two of the topics in its current pro-gramme of work, namely, succession of States in respectof treaties and State responsibility. This is withoutprejudice to the possibility, time permitting, of givingsome time to the consideration of the remaining topicsin its current programme of work, namely: successionof States in respect of matters other than treaties, themost-favoured-nation clause, and the question of treatiesconcluded between States and international organizationsor between two or more international organizations.The Commission's intention is, in accordance withthe practice as regards its provisional drafts, to completeat the next session the second reading of the wholeof the draft articles on the topic of succession of Statesin respect of treaties. The Commission intends also tomake substantial progress in the study of State responsi-

C. Co-operation with other bodies

1. ASIAN-AFRICAN LEGAL CONSULTATIVE COMMITTEE

179. Mr. Abdul Hakim Tabibi submitted a report(A/CN.4/272) 402 on the fourteenth session of the Asian-African Legal Consultative Committee held at NewDelhi, India, from 10 to 18 January 1973, which hehad attended as an observer for the Commission.

180. The Asian-African Legal Consultative Committeewas represented at the twenty-fifth session of the Com-mission by its Secretary-General, Mr. B. Sen, whoaddressed the Commission at its 1235th meeting.

181. Mr. Sen noted the close ties and co-operationwhich existed between the Commission and the Com-mittee which he represented. He conveyed to the Com-

102 Seep. 155 above.


mission the admiration which the Asian-Africancommunity felt for the Commission's work, togetherwith the hope that its recommendations would be evenmore widely followed in the future.

182. He also remarked that at its fourteenth sessionthe Committee had had the satisfaction of welcoming40 delegations of observers from States in the Americasand Europe. He emphasized that the Committee hadextended its assistance during the past three years tonon-member States in Asia and Africa, many of whichparticipated in its sessions and other meetings throughobservers and regularly received the Committee's docu-mentation. Although the Committee worked mainlyin English, its more important documents were nowbeing translated into French, and simultaneous English-French interpretation was provided at all meetings. Thesecretariat of the Committee had arranged for theissue of a publication on the constitutions of AfricanStates, which gave a brief account of constitutionaldevelopments in those countries. The Committee hopedthereby to arouse greater interest in African affairsand to focus attention on the process of constitutionaldevelopment on that continent.

183. Turning to the topic of the law of the sea, towhich the Committee had focused much of its attentionat its fourteenth session, Mr. Sen said that extensivedocumentation had been prepared, abundant materialhad been collected, and an analysis had been madeof the proposals before the United Nations Committeeon the Peaceful Uses of the Sea-Bed and the OceanFloor beyond the Limits of National Jurisdiction inorder to help the Governments of Asian and AfricanStates to prepare for the 1974 conference on the lawof the sea. Of particular interest was the work of theCommittee's Special Study Group on LandlockedStates which had put forward tentative draft proposalson some matters affecting such States.

184. In addition to the topic of the law of the sea,Mr. Sen informed the Commission that the Committeehad held a useful exchange of views on the organizationof legal advisory services in Foreign Offices—a subjectof great interest to developing coutries in the region.The Committee had decided to organize, at the appro-priate stage, a meeting of Foreign Office legal advisersto exchange views and information.

185. Mr. Sen noted the contributions made by theCommittee's sub-committees. One sub-committee haddealt with the question of the use of waters of inter-national rivers for agricultural purposes while anothersub-committee had considered the question of prescrip-tion in international sales.

186. Other topics on the agenda of the Committee'sfourteenth session and which related to the work ofthe Commission included State succession, State responsi-bility and the question of the protection and inviolabilityof diplomatic agents and other persons entitled tospecial protection under international law. In addition,the Committee's agenda included the question of pollu-tion of international rivers.

187. Finally, Mr. Sen expressed great interest in theCommission's discussion of its long-term programmeof work and said he could assure the Commissionthat, whatever its final decisions on that subject, itswork would always command the same degree of res-pect as had the draft articles produced by the Commissionon various topics.

188. The Commission was informed that the fifteenthsession of the Committee, to which it had a standinginvitation to send an observer, would be held at Tokyo,Japan, in January 1974. The Commission requested itsChairman, Mr. Jorge Castafieda, to attend the sessionor, if he was unable to do so, to appoint another memberof the Commission for the purpose.

2. EUROPEAN COMMITTEE ON LEGAL CO-OPERATION

189. Mr. Richard D. Kearney attended the seventeenthsession of the European Committee on Legal Co-oper-ation held at Strasbourg, France, in November 1972,as an observer for the Commission and made a statementbefore the Committee.

190. The European Committee on Legal Co-operationwas represented at the twenty-fifth session of the Com-mission by Mr. H. Golsong, Director of Legal Affairsof the Council of Europe, who addressed the Commissionat its 1236th meeting.

191. Mr. Golsong said that the Commission's relationswith the European Committee on Legal Co-operation,the Asian-African Legal Consultative Committee andthe Inter-American Juridical Committee, as well as therelations between the last-named three bodies, were veryimportant to the synchronized development of inter-national law.

192. Turning to aspects of the Committee's activitieswhich had a bearing on the Commission's long-termprogramme of work as it might be deduced from the"Survey of International Law" prepared by the Secretary-General of the United Nations,403 Mr. Golsong firstmentioned the fulfilment in good faith of the obligationsof international law assumed by States. With regardto the relations between those obligations and obligationscreated by municipal law, he brought to the attentionof the Commission a recently adopted decision of theEuropean Court of Human Rights concerning theapplication of article 50 of the Convention for theProtection of Human Rights and Fundamental Free-doms.404 That article provided that, if an internationalcourt found that an international obligation towards aprivate person had been violated, it might subsequentlygrant just satisfaction if internal law alone could noteliminate the consequences of the breach of an inter-national obligation. The judgement of the EuropeanCourt had a number of interesting aspects, particularlywith regard to the implicit power of an international

403 Yearbook... 1971, vol. II (Part Two), p. 1, document A/CN.4/245.

404 United Nations, Treaty Series, vol. 213, p. 221.


court to construe its own judgements and to the conceptof good faith.

193. As regards the jurisdictional immunities of States,Mr. Golsong stated that the European Conventionrecently concluded on the subject would probably enterinto force in 1974. Although its application was limitedgeographically, the Convention had the merit of bridgingthe gap between the different conceptions held in common-law countries and the countries of the European continentwith regard to the jurisdictional immunities of States.

194. With regard to extra-territorial questions involvedin the exercise of jurisdiction by States, Mr. Golsongindicated that the Committee he represented was en-deavouring to bring national systems of criminal lawinto line, by expanding the competence of courts incertain States members of the Council of Europe todeal with acts committed abroad.

195. On the question of State responsibility, Mr. Gol-song noted that the European Committee on LegalCo-operation was particularly interested in that ques-tion because it had been obliged on several occasionsto take up that problem without being able to defineits position.

196. Mr. Golsong informed the Commission in detailof the activities of the Council of Europe concerningthe protection of international watercourses againstpollution. He stated that a draft European conventionhad been drawn up on the subject, which concernedboth the law of international watercourses and the lawrelating to the environment. He explained that thattext had been intended to settle a number of problems,the first of which was that of the balance to be struckbetween uniform rules for all the future contractingparties—the seventeen States members of the Councilof Europe—and the particular obligations to be laiddown for the riparian States of a particular watercourse.The second was the settlement of disputes regardingthe interpretation or application of the future convention,of co-operation agreements and of any instrumentsdrawn up pursuant to such agreements. The third wasthat of balancing the charges to be borne by the con-tracting parties. The last problem was that of the relation-ship between the pollution of fresh water and the telluricpollution of coastal waters.

197. On the question of treaties concluded betweenStates and international organizations or between twoor more international organizations, he said that theCommittee was looking for ways to speed up proceduresfor the ratification of multilateral conventions and toreduce the number of reservations. In addition, anexchange of views on the techniques of internationalcodification was to be held shortly, with a view togeneral application of the rules laid down.

198. The Commission was informed that the eighteenthsession of the Committee, to which it had a standinginvitation to send an observer, would be held at a timeand place to be notified later. The Commission requestedits Chairman, Mr. Jorge Castaneda, to attend the sessionor, if he was unable to do so, to appoint another memberof the Commission for the purpose.

3. INTER-AMERICAN JURIDICAL COMMITTEE

199. Mr. Richard D. Kearney attended the last sessionof the Inter-American Juridical Committee, held at Riode Janeiro, Brazil, in January and February 1973, asobserver for the Commission and made a statementbefore the Committee.

200. The Inter-American Juridical Committee wasrepresented at the twenty-fifth session of the Commissionby Mr. E. Vargas Carrefio, who addressed the Com-mission at its 1227th and 1228th meetings.

201. He said he first wished to congratulate the Com-mission on the important contribution which it hadbeen making to the codification and progressive devel-opment of international law. The Committee which herepresented attached great importance to its collaborationwith the Commission. It was impossible to formulateregional principles and rules of law without takinginto account the rules and principles which were ofuniversal application. The interdependence of Statesbrought about by the multiplication of internationalrelations had facilitated the universalization of inter-national law. He expressed the view that, althoughthere should not be any conflict between general inter-national law and regional legal systems on the samesubject-matter, the latter might nevertheless have theirown legal institutions, such as the right of diplomaticasylum, in Latin America, or other questions whichwere not settled by general international law. On theother hand, in its work of codifying and progressivelydeveloping international law, the Commission shouldtake account of the practices and doctrinal formulationsof the various regions and legal systems of the world,especially when those practices and formulations camefrom inter-State judirical bodies.

202. Mr. Vargas Carrefio went on to say that, followingthe revision of the Charter of OAS, the Committeehad become one of the central organs of that organ-ization. It was now carrying out its work mainly bymeans of resolutions and draft conventions, which iteither prepared on its own initiative or at the requestof the main organs of OAS, namely, the General Assemblyand the Meeting of Consultation of Ministers for ForeignAffairs.

203. Turning to the work of the Committee at itslast session, he said that the Committee had adopteda resolution concerning the law of the sea which at-tempted to reconcile contradictory positions in aneffort to produce a document representing the pointsof agreement of the Latin American countries. Heexplained that the debates had centred on the legalcharacter to be ascribed to that area of the sea extending200 miles from the coast line. Some had favoured fullsovereignty of the coastal State over a distance of200 nautical miles, while others favoured a territorialsea of a breadth of not more than twelve miles, witha second zone, termed "patrimonial sea" or "economiczone", extending up to 200 miles. With regard to thesecond zone, questions arose regarding the necessity torespect the freedoms of navigation and overflight, andfreedom to lay submarine cables and pipelines. The


Committee's resolution reflected the various opinionsbrought out in the debates. In addition, the resolutionindicated that there existed three areas of the sea-bedand ocean floor, a fact which implied a modificationof the international law of the sea. In the first area,up to a distance of 200 miles, the coastal State exercisedsovereignty and jurisdiction over the sea-bed and sub-soil of the sea. The second area, beyond the 200-milelimit and up to the edge of the continental slope, waslegally termed the "continental shelf"; in it, the coastalState exercised sovereignty for purposes of explorationand exploitation of natural resources. Lastly, beyondthose two areas, which were subject to State jurisdiction,the sea-bed and ocean floor and the resources thereofconstituted the "common heritage of mankind", asacknowledged by General Assembly resolution2749 (XXV) of 17 December 1970.

204. Regarding another subject on which the Com-mittee had focused much of its attention at its lastsession, Mr. Vargas Carreno stated that the Committeehad approved a draft inter-American convention onextradition. He explained that the draft convention,inter alia, specified the obligation of each contractingState to extradite, to another contracting State whichmade the request, any persons charged, prosecuted orsentenced by the judicial authorities of the requestingState. It was necessary that the alleged offence shouldhave been committed in the territory of the requestingState; if it had been committed elsewhere, the requestingState must have had, at the time, jurisdiction underits own laws to try a person for such an offence com-mitted abroad. For the purposes of determining whatoffences were extraditable, the draft offered contractingStates to the future convention the choice between twocriteria. The first was the penalty legally applicablefor the alleged offence, irrespective of the denominationof the offence and of the existence or non-existence ofextenuating or aggravating circumstances. Only offencespunishable at the time of their commission by imprison-ment for a minimum of one year under the law of boththe requesting and the requested State, would constituteextraditable offences. The second criterion consisted oflists of offences which each contracting State mightattach as an annex to the future convention at the timeof signature or ratification. Under the draft, therewould be no extradition in the following cases: first,where the person concerned had already served a sentenceequivalent to the prescribed penalty or had been pardoned,amnestied, acquitted, or discharged in respect of thealleged offence; secondly, where the statutory time-limit for prosecution or for the execution of the penaltyunder the laws of either the requesting State or therequested State had expired before extradition; thirdly,where the person concerned was due to be tried by aspecial court in the requesting State; fourthly, where,under the laws of the requested State, the alleged offencewas classed as a political offence or was connectedwith such an offence. Mr. Vargas Carreno pointed outthat the last exception mentioned was particularlyimportant because it embodied a well-established LatinAmerican practice according to which a State calledupon to decide whether to extradite or grant asylum

was competent to rule unilaterally on whether thealleged offence constituted a political or an ordinaryoffence. The draft specified, however, that none of itsprovisions should preclude extradition for the crime ofgenocide or any other offence which was extraditableunder a treaty in force between the requesting and therequested States. The final clauses of the draft specifiedthat the future convention should be open for signaturenot only by States members of OAS but also by anyother State which so requested. It was possible that theforthcoming Assembly of OAS would convene a special-ized conference of plenipotentiaries to examine the draftconvention.

205. Finally, he wished to draw attention to the factthat the Inter-American Juridical Committee's agendafor its forthcoming sessions contained a number ofitems that were closely connected with topics underconsideration by the Commission or listed in its pro-gramme of work. That was an additional reason forthe keen interest with which he and the other membersof the Committee followed the Commission's work.In the near future the Committee would be examiningthe questions of the immunity of the State from juris-diction and of the nationalization of foreign propertyand international law.

206. The Commission was informed that the nextsession of the Committee, to which it had a standinginvitation to send an observer, would be held at a timeand place to be notified later. The Commission requestedits Chairman, Mr. Jorge Castaneda, to attend the sessionor, if he was unable to do so, to appoint another memberof the Commission for the purpose.

D. Date and place of the twenty-sixth session

207. The Commission decided to hold its next sessionat the United Nations Office at Geneva starting on6 May 1974.

E. Representation at the twenty-eighth sessionof the General Assembly

208. The Commission decided that it should be repre-sented at the twenty-eighth session of the GeneralAssembly by its Chairman, Mr. Jorge Castaneda. Itdecided that Mr. Castaneda should also represent theCommission at the observance of the twenty-fifth anni-versary of the International Law Commission by theGeneral Assembly to be held during its twenty-eighthsession in accordance with resolution 2927 (XXVII) of28 November 1972.

F. Commemoration of the twenty-fifth anniversaryof the opening of the Commission's first session

209. The Commission decided to commemorate at itsnext session, in 1974, the twenty-fifth anniversary of theopening of its first session.


G. Gilberto Amado Memorial Lecture

210. In accordance with a decision taken by the Com-mission at its twenty-third session40S and thanks toanother generous grant by the Brazilian Government,the second Gilberto Amado Memorial Lecture wasgiven at the Palais des Nations on 11 July 1973. Thelecture was delivered by Professor Constantin Eusta-thiades, a former member of the Commission, whospoke on "Unratified Codification Conventions". It wasattended by members of the Commission, the LegalCounsel of the United Nations, the Secretary and mem-bers of the secretariat of the Commission, the Directorof the International Law Seminar and distinguishedjurists. The lecture was followed by a dinner. The Com-mission expressed the opinion that it was desirable toprint the above-mentioned lecture, at least in Englishand French, with a view to bringing it to the attentionof the largest possible number of specialists in the fieldof international law.

211. The Commission expressed its gratitude to theBrazilian Government for its renewed gesture, whichhad made the second Gilberto Amado Memorial Lecturepossible, and hoped that that Government would findit possible to renew its financial assistance so as to makepossible the continuation of the series of lectures asa tribute to the memory of this illustrious Brazilianjurist who had been for so many years a member ofthe International Law Commission. The Commissionasked Mr. Sette Camara to convey its views to theBrazilian Government.

H. International Law Seminar

212. Pursuant to General Assembly resolution2926 (XXVII) of 28 November 1972, the United NationsOffice at Geneva organized during the Commission'stwenty-fifth session a ninth session of the InternationalLaw Seminar intended for advanced students of thatdiscipline and young officials of government departments,mainly Ministries of Foreign Affairs, whose functionshabitually include consideration of questions of inter-national law.

213. Between 21 May and 8 June 1973 the Seminarheld twelve meetings devoted to lectures followed bydiscussion; the last meeting was set aside for the evalua-tion of the Seminar by the participants.

214. Twenty-two students from 21 different countries, participated in the Seminar; they also attended meetingsof the Commission during that period, had access tothe facilities of the Palais des Nations Library and hadthe opportunity to attend a film show given by theUnited Nations Information Service.

215. Seven members of the Commission generouslygave their services as lecturers. The lectures dealt withvarious subjects, some connected with the past, present

406 Yearbook... 1971, vol. II (Part One), pp. 354-355, docu-ment A/8410/Rev.l, paras. 164-169.

and future work of the Commission, namely, specialmissions (Mr. Bartos), the most-favoured-nation clause(Mr. Ustor) and the future work of the Commission(Mr. Kearney). Two lectures were given on the Inter-national Court of Justice: one dealing with the Courtand judicial review (Mr. Elias) the other with the problemof intervention in the proceedings of the Court (Mr. Ham-bro). One lecture dealt with the question of new trendsin the law of the sea (Mr. Castaneda), another withthe General Assembly agenda item on the need toconsider suggestions regarding the review of the UnitedNations Charter (Mr. Yasseen), while one lecture wasdevoted to the pacific settlement of disputes in Africa(Mr. Bedjaoui).

216. In addition, the Legal Adviser of the InternationalLabour Office (Mr. Wolf), spoke on the subject of theILO and the International Labour Conventions, whilethe Director of the Department of Principles and Lawof the International Committee of the Red Cross (Mr. Pil-loud) spoke on the international humanitarian lawapplicable in armed conflicts. The last-named lecturewas held in connexion with General Assembly reso-lution 3032 (XXVII) of 18 December 1972 calling forthe study and teaching of principles of respect for inter-national humanitarian rules applicable in armed con-flicts. Ambassador J. Humbert, the High Commissionerof the diplomatic conference on the reaffirmation anddevelopment of international humanitarian law applicablein armed conflicts, to be held in Geneva early in 1974,was present. Mr. Raton, Director of the Seminar, gavean introductory talk on the International LawCommission.

217. The Seminar was held without cost to the UnitedNations, which did not contribute to the travel or livingexpenses of the participants. As at previous sessions,the Governments of Demnark, the Federal Republic ofGermany, Finland, Israel, the Netherlands, Norwayand Sweden made fellowships available to participantsfrom developing countries. Twelve candidates wereawarded such fellowships. Two holders of UNITARscholarships were also admitted to the Seminar, and inaddition one candidate received a combined fellowshipfrom the seminar and UNITAR. The award of fellow-ships is making it possible to achieve a much bettergeographical distribution of participants and to bringfrom distant countries deserving candidates who wouldotherwise be prevented from attending the sessionsolely by lack of funds. It is therefore to be hoped thatthe above-mentioned Governments will continue to begenerous and even that, if possible, one or two additionalfellowships will be granted to offset the reduced realvalue of fellowships following changes made in theparities of certain currencies since 1971. It is especiallygratifying to note that several of the above-mentionedGovernments have taken this situation into accountand accordingly increased or promised to increase theamount of the fellowships. It should be noted that thenames of those to be awarded fellowships are madeknown to the donor Governments and that the recipientsare likewise informed of the source of their fellowships.

CHECK LIST OF DOCUMENTS REFERRED TO IN THIS VOLUME

NOTE. This list includes all United Nations documents identified in the textby their symbols for which no detailed reference is given in a foot-note.

Document

A/285

A/5409

A/8058

A/AC.131/20

Title

A/AC.131/24

A/AC.131/25

A/AC. 131/26

A/AC.131/29

A/CN.4/263

A/CN.4/SC.1/WP.3

A/CN.4/SC.1/WP.4

A/CN.4/SC.1/WP.5

A/CN.4/SC.1/WP.6

Panama: Draft Declaration on the rights and duties of States

Legal problems relating to the utilization and use of international rivers:report of the Secretary-General [summary of legislative texts and treatyprovisions]

Permanent sovereignty over natural resources—The exercise of permanentsovereignty over natural resources and the use of foreign capital and tech-nology for their exploitation: report of the Secretary-General

United Nations Council for Namibia: report on the Council's mission toAfrica (1970)

Idem.—Question of travel documents: Letter dated 24 July 1970 from theActing United Nations Commissioner for Namibia addressed to the Ministerfor Foreign Affairs of Ethiopia and cable dated 29 March 1971 from theMinister of State, Ministry of Foreign Affairs of Ethiopia addressed to theActing United Nations Commissioner for Namibia

Idem.—Letter dated 20 May 1971 from the Minister for Foreign Affairs ofKenya addressed to the Acting United Nations Commissioner for Namibia

Idem.—Agreement between Nigeria and the United Nations Council forNamibia on the right of return to Nigeria of certain Namibians

Idem.—Agreement between the United Republic of Tanzania and the UnitedNations Council for Namibia concerning the issuance by the Council oftravel and identity documents to Namibians (terms of the agreement, signedat Dar-es-Salaam on 5 December 1972; Letter dated 11 December 1972from the Permanent Representative of the United Republic of Tanzania tothe United Nations addressed to the Acting United Nations Commissionerfor Namibia; Letter dated 11 December 1972 from the Acting United Na-tions Commissioner for Namibia to the Permanent Representative of Tan-zania to the United Nations)

Supplement, prepared by the Secretariat, to Materials on succession of States(United Nations publication, Sales No. E/F.68.V.5)

State responsibility: working paper prepared by Mr. Andre Gros

Idem.—Working document prepared by Mr. Senjin Tsuruoka

Idem.—Working Paper prepared by Mr. Mustafa Kamil Yasseen

Idem.—Working paper prepared by Mr. Roberto Ago

237

Observations and references

Mimeographed.

Idem. For the full text of thelegislative texts and treatyprovisions, see United Na-tions publication, SalesNo. 63.V.4.

Mimeographed.

Idem. Chapter II, relating totravel documents, is repro-duced in Official Records o)the General Assembly, Twen-ty-fifth Session, SupplementNo. 24 (A/8024), paras. 46-66.

Mimeographed.

Idem.

Mimeographed.

Idem.

Idem.

Yearbook ... 1963, vol. II,p. 246, document A/5509,annex I, appendix II.

Ibid., p. 247.

Ibid., p. 250.

Ibid., p. 251.


Document

A/CN.4/SC.1/WP.7

E/5263

Title Observations and references

Idem.—The social nature of personal responsibilities—working paper prepared Ibid., p. 256.by Mr. Angel Modesto Paredes

Collective economic security: preliminary consideration of the concept, itsscope and potential practical consequences—note by the Secretary-General

ILC (XIV)/SC.l/WP.l State responsibility: The duty to compensate for the nationalization of foreignproperty—working paper submitted by Mr. E. Jim6nez de Arechaga

Mimeographed.

Yearbook ... 1963, vol. II,p. 237, document A/5509,annex I, appendix II.

ILC(XIV)/SC.1/WP.2 Idem.—An approach to State responsibility—working paper submitted by Ibid., p. 244.and Add.l Mr. Angel Modesto Paredes

CHECK LIST OF DOCUMENTS OF THE TWENTY-FIFTH SESSIONNOT REPRODUCED IN THIS VOLUME

Document

A/CN.4/265

A/CN.4/268/Add.land Add.l/Corr.land Add.2

A/CN.4/L.193

A/CN.4/L.194

A/CN.4/L. 195 andAdd. 1-3

A/CN.4/L.196andAdd.l

A/CN.4/L.197

A/CN.4/L.198 andAdd.1-7

A/CN.4/L.199 andAdd.l

A/CN.4/L.200 andAdd.l

A/CN.4/L.201,A/CN.4/L.202

A/CN.4/L.203

A/CN.4/L.204

A/CN.4/ SR.1200-1249

Title

Provisional agenda

Observations and references

Mimeographed. For the agendaas adopted, see p. 164 above(A/9010/Rev.l, para. 9).

Filling of casual vacancies: addendum to the note by the Secretariat—list of Mimeographed,candidates

Request from the Economic and Social Council for the International Law Com- Idem.mission's comments on the report of the Ad hoc Working Group of Expertsof the Commission on Human Rights concerning the question of Apartheidfrom the point of view of international penal law

Draft articles on State responsibility: titles of the draft and of chapters I and II,titles and texts of articles 1-6 adopted by the Drafting Committee

Draft report of the International Law Commission on the work of its twenty-fifth session (chap. Ill)

Draft articles on succession of States in respect of matters other than treaties:titles of the draft articles, the introduction, part I and section 1, and articles1-8 adopted by the Drafting Committee

Idem.—new wording of article 9 submitted by the Special Rapporteur

Texts reproduced in the sum-mary records of the 1225thand 1226th meetings (vol. I).

Idem. For the final text, see A/9010/Rev.l (p. 161 above).

Texts reproduced in the sum-mary records of the 1230th,1231st, 1239th and 1240thmeetings (vol. I).

Idem., 1231st meeting (vol. I).

Draft report of the International Law Commission on the work of its twenty- Mimeographed. For the finalfifth session (Chap. I, II and IV-VI) text, see A/9010/Rev.l (p. 161

above).

The most-favoured-nation clause: title of the draft articles, titles and texts of Texts reproduced in the sum-articles 1 to 7 adopted by the Drafting Committee mary record of the 1238th

meeting (vol. I).

Draft report of the International Law Commission on the work of its twenty- Mimeographed. For the finalfifth session (chap. VII) text, see A/9010/Rev.l (p. 161

above).

Provisional summary records of the 1200th to 1249th meetings of the Interna- Mimeographed. For the finaltional Law Commission text, see vol. I.

239

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