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In 1946, the world witnessed the first-ever prosecutions of a state’s leaders for planning and executing a war of aggression. The idea of holding individuals accountable for the illegal use of force—the “supreme international crime”—was considered but ultimately rejected in the wake of the First World War. A few decades later, however, following the even more destructive Second World War, the victorious powers succeeded in coming together in a court of law at Nuremberg to prosecute the leaders of Nazi Germany for waging an aggressive war against other states. Ben Ferencz, a Nuremberg prosecutor has spent the past seven decades tirelessly working to ensure that the prevention and prosecution of aggressive war-making remain on the international agenda.

Now, with Ben Ferencz’s work in mind, and writing as the international community prepares to decide whether to activate the ICC jurisdiction over the crime of aggression, the authors in this symposium take stock both of what has been accomplished and of what remains to be done. Building on discussions in 2015 at the Harris Institute, this symposium reflects on broader issues of accountability for the illegal use of force under international law, with the goal of influencing broader scholarly efforts that continue to shape the debate on the scope, nature, and future of the criminalization of the illegal use of force.

SYMPOSIUM CONTRIBUTIONS 

Friday, April 21, 2017 from noon-7:15PM 

(Please see below for locations)

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On April 21, 2017, ILJ will host its annual Spring Symposium, this year on the impact of major current events on international organization and cooperation. Our keynote speaker is Harold Koh, former Legal Adviser at the State Department, followed by three panels on the South China Sea Arbitration Ruling, Cross-Border Cybersecurity Threats, and Brexit and the E.U. 

This ILJ Spring Symposium will bring together some of the foremost experts and practitioners in their respective fields, including the lawyers who represented the Philippines in the South China Sea arbitration, government leaders in cybersecurity enforcement, and major voices in security debates. 

We will have a reception with the speakers at Temple Bar in Cambridge, MA after the Spring Symposium. We hope you’ll be able to join us. Drink tickets and appetizers provided. 

by Tim Meyer*

Monica Hakimi’s The Work of International Law could not arrive at a more important time. In pointing out that international law exists to facilitate conflict as much as to promote cooperation, she insightfully diagnoses conflict aversion as a malady that often afflicts international lawyers. As Hakimi argues, much conceives of international law’s goal as the mitigation of conflict. To the contrary, Hakimi convincingly asserts that cooperation and conflict go together. Yet in February 2017, the central question teed up by Hakimi’s article is how we distinguish conflict that is consistent with the viability of the international legal system from conflict that represents a threat to it.

The Work of International Law opens by describing the “cooperation thesis” – the notion that international law is designed to curb conflicts and promote a shared agenda. The cooperation thesis, in Hakimi’s view, has both positive and normative aspects. Both, Hakimi argues, are incorrect. As a descriptive matter, international law often does not mitigate conflict; it facilitates it in the same way that the rules of chess facilitate conflict between two players. A more legal analogy might be to property rights or other kinds of legal entitlements. In theory, clear entitlements should reduce the scope for conflict. In practice, however, entitlements often promote conflict, either because they are not clear enough or because of behavioral biases. As Hakimi points out, international agreements and customary international law are indeterminate most of the time. They thus provide states with some sense of their own rights and with the means to clarify and expand those rights. Moreover, as in litigation, if two opposing sides are both optimistic about their own chances for success – a common psychological bias – reaching a negotiated resolution becomes more difficult. Just as litigation is a form of conflict that provides a resolution to a dispute that could not be peacefully settled, so too is conflict under international law a means to promote the long-term settlement of disputes.

Hakimi’s point might be understood in slightly different terms: conflict is a form of bargaining. Clausewitz perhaps most famously captured this notion when he said that “war is the continuation of politics by other means.” Thomas Schelling formalized this idea of armed conflict as a form of bargaining in the 1960s, and a robust literature in international relations continues to think about armed conflicts as one means through which states seek to allocate resources and power. Underlying this literature is the notion that conflict is a means of signaling determination to the other side and imposing costs to deter or end a conflict. In the legal context of foreign affairs law, Edward Corwin famously described the Constitution as “an invitation to struggle for the privilege of directing American foreign policy.” Hakimi is right to note that international law – with its vague obligations, fragmented institutions (including the lack of robust judicial review), and, in the case of customary international law, unclear rules regarding its creation – invites much the same kind of struggle.

Viewed in this light, it should hardly be a surprise that international law promotes and facilitates conflict. Without conflict of some kind, differing views on legal rights are hard to work out. Hakimi is thus also right to critique the normative cooperation thesis, the view that international law should mitigate conflict, as a framework for evaluating international law. States are both subject and authors of international law. That means that in choosing whether to cooperate, states must evaluate their actions both in terms of compliance with existing law and in terms of their lawmaking effects. A failure to comply with the law does not necessarily indicate a lack of commitment to international law generally. Rather, it may indicate a commitment to changing the law and the terms on which cooperation occurs. Perhaps the most famous example of lawmaking through noncompliance is the expansion of the territorial sea to twelve miles, a shift in customary law brought about in part by widespread violation of the traditional three-mile limit. A slightly different example would be U.S. unilateral action in response to what it perceived as unlawful conduct under GATT 1947. States agreed to create the WTO Dispute Settlement Body – arguably the most successful interstate tribunal – in part to rein in U.S. unilateralism. Isabel Hull’s magnificent book, A Scrap of Paper: The Breaking and Making of International Law During the Great War, describes in great detail how the laws of war were challenged and ultimately changed in response to state action leading up to and during World War I.

However, to say that conflict can be consistent with international law’s purposes invites the question of how one can tell whether a particular conflict is consistent with international law’s purposes. After all, some conflicts surely are challenges to the larger system of international law, rather than efforts to work within it. And some conflicts surely do make us worse off than we were ex ante. How are we to discern efforts to renegotiate the system’s rules from efforts to tear down the system? Less apocalyptically, how can we tell whether conflict will make the international system better or worse?

Part of the challenge, of course, lies in our lack of perspective in judging our own historical moment. What seems like folly today may seem like wisdom with the passage of time, and vice versa. Michael Reisman once wrote that “international lawyers frequently respond to the appearance of a discrepancy between existing and emerging legal arrangements by heatedly rejecting the new with a fury of virtuous unanimity against the evil whose name is Change.” Hakimi’s article serves as a reminder that change, and the conflicts that bring it about, should not be feared merely because they are new.

The more serious part of the problem, though, is that we are in the midst of a contest over the values that underlie the international legal system. In recent years international agreements and debates in international legal thought have tended to focus on technocratic metrics, like compliance, that at least in principle are capable of measurement. This trend is particularly clear in two aspects of trade law. First, agreements on regulatory harmonization, such the WTO’s Agreement on Sanitary and Phytosanitary Measures or the regulatory harmonization chapter of the Trans Pacific Partnership, push states to use technical information such as the best available science or cost-benefit analysis to design their domestic regulatory programs. Second, debates about trade more broadly have tended to emphasize that liberalized trade creates enormous gains. Trade’s defenders have thus expressed befuddlement over voters’ decisions to pull Britain out of the EU or elect Donald Trump President on a platform of renegotiating or rolling back trade deals.

In part, these appeals to technocracy are aimed at promoting cooperation and encouraging a shared agenda – exactly what the cooperation thesis envisions. If legal and policy disputes can be resolved by measuring whether GMOs cause adverse health effects or trade creates wealth, then seemingly intractable problems might be solved. Yet as recent events have shown, technocracy is limited in its ability to defuse conflicts over core values. British voters outside of London (and Scotland) and American voters off the coasts appear willing to sacrifice the gains from trade (which are of course very real) if it might mean a more equitable distribution of the gains from trade, or if it might restore a lost sense of control over their communities. Technocratic arguments that these voters are wrong – that rolling back trade or restricting immigration will not bring jobs back or create stronger or safer communities – fail to persuade because many voters are not interested in what is measurable. They want a legal regime that they perceive as in step with their values.

It is here that I part ways, at least tentatively, with Hakimi. She writes in conclusion that the cooperation thesis’s flaw is “in assuming that [conflict and cooperation] are antithetical—that one detracts from and must be reduced in order to achieve the other. In fact, international law promotes them both. It helps the participants find and work toward areas of agreement, even as it helps them crystallize and sharpen their differences.” I think this is true much of the time, especially when the core values underlying a legal regime are not contested. But value-driven conflicts can expose the limits of international law’s ability to productively channel conflict. Appeals to technocracy attempt to paper over these fissures, but I worry that – by pretending that conflicts can be resolved without addressing underlying difference in core values – appeals to technocracy actually exacerbate conflicts.

Put differently, I do not think the cooperation thesis is just a pathology of international legal scholarship or thought. I think an aversion to value-driven conflicts is built into much of international law itself. In the end, my prescription is the same as Hakimi’s. International law needs to become more comfortable with value conflicts. The long-term viability of, for example, the trade regime may well depend on its ability to accommodate greater dissent from liberalized trade’s central premises. Conflict can certainly spur those changes. But conflict can also break the tool – international law – for future use.

* Tim Meyer is a Professor of Law and Enterprise Scholar at Vanderbilt University Law School.

by Monica Hakimi*

Thanks to the Harvard International Law Journal for hosting a symposium on my Article and to the four respondents for their thoughtful contributions. In the Article, I distill and then criticize a prominent view about the role of international law in the global order. The view—what I call the “cooperation thesis”—is that international law serves to foster a particular kind of cooperation, specifically to help the participants achieve their common aims and curb their disputes. Lawyers who subscribe to this view of course appreciate that international law is, like all law, often contentious in operation. But they posit that, unless such conflict is overcome, it detracts from cooperation and evinces the limits of international law. That view is wrong. It incorrectly assumes that cooperation and conflict are antithetical—that they pull in opposite directions, such that international law fosters one by curtailing the other. In fact, international law fosters both simultaneously. Even as it helps the participants achieve their shared goals and reconcile their differences, it also helps them have and sharpen their disputes. The two kinds of interactions are not antithetical but interdependent. I will not use this Reply to rehash that argument. I will simply address the main criticisms and questions that the respondents raised.

A. Does My Argument Go Too Far?

            Of the four respondents, Professor Bodansky seems the most critical of my piece. He contends that the cooperation thesis is not specious, as I claim it to be; “it is, at worst, incomplete.” According to Bodansky, the thesis is partly true because global actors sometimes use international law to promote their shared objectives and resolve their disputes. He offers the example the Montreal Protocol on Substances that Deplete the Ozone Layer. Bodansky says that the Protocol “establishes a cooperative regime to promote states’ common interest in preserving the stratospheric ozone layer.” He acknowledges that this regime “might be understood as enabling conflict, by using ambiguous terms that permit differing interpretations and by authorizing parties to use trade measures against non-participating states.” But he argues that characterizing the Protocol as conflict-enabling would be “misleading” because the Protocol clearly fosters cooperation.

Bodansky’s criticisms are misdirected. I do not deny that global actors sometimes use international law for the ends that the cooperation thesis envisions—to advance their common agendas or move past their differences. The thesis is wrong because it presupposes that conflict is an obstacle to those ends and, therefore, a problem that international law must overcome. To the extent that Bodansky claims that international lawyers do not adhere to that view, I disagree. Statements like the following are routine:

• “[A] dispute itself implies disagreement and non-cooperation” and must be addressed to avoid “the danger of an impasse in dispute settlement.”[1]
• “The international legal system . . . tends to evolve norms that reduce friction and controversies among states and to foster systemic equilibrium by prescribing how controversies may be avoided, mitigated, or resolved.”[2]
• “International law represents a system of norms and processes for resolving competing claims,” and, in turn, promotes peace and the respect for generally accepted, basic rights.[3]
• “The purpose of international law, conventionally viewed, is to reduce interstate conflict and facilitate interstate cooperation. . . .”[4]

These statements reflect the cooperation thesis. They suggest that international law does or must curtail conflict in order to foster cooperation.

The cooperation thesis is evident even in Bodansky’s own response to my Article. He begins by framing my inquiry in terms of whether “the function of international law [is] to promote cooperation or conflict” (emphasis added). Notice his use of the disjunctive. He then repeatedly depicts conflict as oppositional to cooperation. He says, for example, that “litigation is associated with conflict. . . . But transactional law, in contrast, is interest-based and generally promotes cooperation” (emphasis added). His invocation of the Montreal Protocol is illustrative. He claims that characterizing the Protocol as conflict-enabling is misleading because the Protocol promotes cooperation. What’s actually misleading is his insistence that the Protocol promotes cooperation but not conflict. It promotes both. The contract analogy simply drives home the point. Even when a contract helps the parties reach a mutually beneficial goal, it creates new grounds and reasons for them to disagree. It entitles them to fight over its application and to contest behavior that now constitutes a breach.

This brings me to Bodansky’s normative claim. He asserts that, although an instrument like the Montreal Protocol “can sometimes lead to litigation, . . . that is not their object. Litigation is a sign of failure rather than success.” I’m not sure exactly what he means by an instrument’s “object.” If he means that the parties to the Protocol intended not to foster conflict but to achieve a particular result—to preserve the stratospheric ozone layer—then he is probably correct. But the functions that a legal instrument serves are not always the ones that it was originally intended to serve. Though the Montreal Protocol helps the parties work together to preserve the stratospheric ozone layer, it also helps them disagree about various facets of that project.

Two propositions follow. First, even if we assess the success of international law as Bodansky does—in terms of whether it advances a shared agenda—disputes about that agenda would not betray its failure. As I explain in the Article, and as Bodansky concedes, conflict is often an ingredient for, rather than an impediment to, achieving a common objective. This can be so even if the conflict is protracted or lacks real substantive resolution. It means that litigation is not necessarily “a sign of failure.” Second, Bodansky’s metric for assessing success is myopic. When international law does not help the participants reach a specific goal or reconcile their differences, it might (successfully) do other things. If nothing else, international law might help these actors disagree, which can itself be valuable.

B. Does My Argument Not Go Far Enough?

Whereas Professor Bodansky argues that I overstate international law’s role in enabling conflict, Professors d’Aspremont and Krisch suggest that I do not press that claim hard enough. D’Aspremont criticizes my Article on two grounds. First, he says that I did not adequately acknowledge that “the relationship between international law and conflict is not one of facilitation but of mutual constitution.” His point is that international law both constitutes and is constituted by the conflicts in which it is invoked. I made a similar point in my Article, though I used different language. I argued that cooperation and conflict are synergistic—by which I meant that each depends on and helps generate the other.

Second, d’Aspremont argues that, “in positing a symbiosis between conflict and cooperation, [I] uphold[] the dichotomy between two idealized and objectivized situations, namely conflict and cooperation, and vindicate[] the possibility that the latter replace the former.” That was not my intention. In arguing that conflict and cooperation are symbiotic, I aimed to show that the two go hand-in-hand; one does not evince or lead to the absence of the other. Indeed, I used the World Trade Organization and the jus ad bellum to make precisely this point: although international law curbs some trade or forcible conflicts, it facilitates and even fuels others. In addition, I underscored that these conflicts themselves reflect a kind of cooperation, though not the kind that the cooperation thesis prizes. In order for adversaries to engage in an intelligible conflict, they need to be able to communicate their positions and make sense of each other’s moves. Having a cooperative base—common ground rules with which to convey their discontent and structure their interactions—enables their dispute. Again, conflict and cooperation are not inherently dichotomous. They are intertwined.

Krisch’s main criticism of my Article is more normative. He suggests that international law has been implicated in much deeper, more pernicious ways than I admit. In his view, my effort to portray international law “in a positive light” and to defend it from “unwarranted normative charges . . . constrains [me] from developing the full potential of [my] conflictual account.” Krisch is correct that I do not examine the full range of conflicts that international law invites or all of their potentially destructive effects. But my normative agenda was not to portray international law as, on the whole, justifiable. It was to underscore that the two most common attacks on international law—that it is ineffective or illegitimate to the extent that it does not curb conflict—rest on the cooperation thesis and are conceptually flawed. These attacks must be refined to reflect the fact that conflict does not necessarily betray a failure of cooperation or a deficiency in international law. Conflict is instead part of the project of international law.

C. Next Steps

Professor Meyer seems the most sympathetic to my descriptive and normative claims. He focuses on an important follow-up question: “how one can tell whether a particular conflict is consistent with international law’s purposes.” Meyer rightly notes that “some conflicts surely are challenges to the larger system of international law, rather than efforts to work within it. And some conflicts surely make us worse off than we were ex ante.” He hypothesizes that international law might be least adept at productively channeling value conflicts. In his view, “an aversion to value-driven conflicts” and the associated “[a]ppeals to technocracy” are “built into much of international law” and risk exacerbating inevitable conflicts. Meyer’s descriptive account might or might not be accurate. But he and I agree that international law “needs to become more comfortable with value conflicts.” I explore this theme in greater depth in a separate article, “Constructing an International Community,” which is forthcoming in the American Journal of International Law.

* Monica Hakimi is a Professor of Law at the University of Michigan Law School.

[1] Anne Peters, International Dispute Settlement: A Network of Cooperational Duties, 14 Eur. J. Int’l L. 1, 9–11 (2003) (emphasis added).

[2] Anthony D’Amato, Groundwork for International Law, 108 Am. J. Int’l L. 650, 652 (2014).

[3] Steven R. Ratner, The Thin Justice of International Law: A Moral reckoning of the Law of Nations 1 (2015); see also id. at 2, 73 – 76.

[4] Gregory C. Shaffer & Mark A. Pollack, Hard Versus Soft Law in International Security, 52 B.C. L. Rev. 1147, 1152 (2011).

by Nico Krisch*

Monica Hakimi’s intriguing new piece, The Work of International Law, presents a timely challenge for schematic accounts of international law currently spreading through scholarship. Pushing international law’s intimate relationship with conflict into the foreground, Hakimi calls into question the widespread focus on cooperation as the main goal and yardstick of the international legal order. Hakimi aims especially at recent rational-choice-inspired accounts of international law in the United States, but her account also encompasses more European-style approaches that see international law as an alternative to conflict, as a tool for helping states to work together rather than clash. At times her article paints cooperative views of international law too broadly, but overall its charge is correct: an excessive focus on cooperation is likely to make us misunderstand the way international law works, and misconstrue our standards for evaluating it normatively.

Hakimi urges us to recognize that international law not only seeks to defuse conflict, but also enables it, in particular by creating the playing field on which international disputes can be staged and by producing normative positions that actors can mobilize in their favor. On this account, states will often only become aware of a potential conflict, and will initiate conflicts, because of the way legal positions are framed. Cooperation and conflict then often appear as symbiotic and no longer as antithetical. This dynamic has repercussions for our view of international law: in Hakimi’s words, “[c]onflict is part of the project of international law”.

Hakimi’s diagnosis is largely convincing: think, for example, of the way in which territorial sovereignty raises the stakes of borders and invites conflict over their location. Yet Hakimi’s approach is incomplete because it unearths only a small part of international law’s tight link with conflict. The conflicts the piece highlights appear as rather benign: conflicts over the meaning of legal norms, as in WTO law; or conflicts that are instrumental for pursuing positively valued goals like cooperation or peace, as with Security Council action in the Iran nuclear conflict or military action licensed under the ius ad bellum. But hasn’t international law been implicated in conflicts in a much deeper, and likely more pernicious, way? Has it not given cover, over centuries, for the appropriation of large parts of the earth by European powers? Does it not allow, as in the interpretation of the non-intervention norm, for all kinds of economic coercion by wealthy states? Does it not maintain a neoliberal trade and investment regime even as more and more countries see it as an imposition? And has it not licensed a nuclear arms race between the superpowers?

The conflicts arising from these issues do not figure in the article, and their omission is not accidental. A key reason for the omission is that Hakimi seeks to give not merely an account of what international law does, but also an account that is defensible, one that lets international law appear in a positive light, one that suggests what international should do. As a result, Hakimi highlights international law’s role in fostering conflicts with a rather positive connotation. But a convincing picture of international law need not be normatively justifiable. Many parts of the actual “work of international law” might be eminently unjustifiable, or at least appear so from the vantage point of some participants. Hakimi’s intention of rescuing international law from unwarranted normative charges—typically grounded in its limited ability to bring about compliance and cooperation—constrains her from developing the full potential of her conflictual account.

Hakimi also hides the depth of international law’s conflictual character because she employs a somewhat agentic depiction of international law. In a way that is not uncommon in legal scholarship, international law is seen to have “goals” and “a project,” and this rhetoric nudges us towards identifying benign goals and projects—especially if we see ourselves as participants in the practice of international law. If, in contrast, we depict international law as an institution, as a site in which actors struggle for their different goals and projects, and which produces effects in the world, we are bound to be more open to the potentially negative and often unintended effects this institution might have. Actors may be shaped by international law, but they also approach it instrumentally—and typically not simply to achieve “cooperation” but also, or primarily, to enshrine their own views and values, hoping to use international law to shift international politics as far as possible towards their own substantive goals. In such a picture, conflict is not merely an occasional effect, but it sits at the center of the international legal edifice: law is a reflection of conflict as well as a continuation of it, sometimes through balancing different positions, sometimes through privileging certain of them in institutionalized forms of domination.

Conflict is thus ubiquitous in international law, just as it is in domestic law. In fact, domestic law is often seen as a vehicle of conflict, even of violence. Robert Cover’s essay, Violence and the Word is a famous example. In the international realm, different literatures pursue similar themes; critical approaches of various kinds have contributed especially important insights into the ways in which social and political conflict is enacted through (and often hidden behind) legal institutions. Likewise, we might borrow from international relations scholars of different leanings—from realist to Marxist to Foucauldian—to better understand the way law and institutions are implicated in international conflict.

But of course, these approaches have mostly analytical and critical aims, and this is not only, or not even primarily, what Hakimi is after. As suggested above, she seeks to develop an account of international law that embraces conflict normatively. Even though she does not frame it explicitly in this way, she appears to be motivated by the question: When would it be legitimate for international law to foster or allow for conflict, and what kind of conflict would that be? The result of such an inquiry is a different metric of assessment for international law—one in which conflict, or a failure of cooperation, does not directly lead to a negative score.

Hakimi takes the first steps in this inquiry, and she persuasively shows that there is much to be gained from pursuing it. Law can be highly valuable when it provides a space of contestation, exhibits existing disagreements, or empowers weak actors to initiate struggle. Construing an evaluative yardstick for this, however, is a huge task, one that would require both deep empirical analysis and normative theorizing. “The Work International Law Should Do” would include conflict as well as cooperation and other goals. But in what combination, and for which contexts, remains an open question, with widely varying answers depending on one’s origin, perspective and values.

* Nico Krisch is a Professor of International Law at the Graduate Institute of International and Development Studies, Geneva.

by Jean d’Aspremont^*

It is encouraging to finally read a piece that seriously debunks the narrative of the failure of international law and all the presuppositions that underpin it. And it is even more exciting to find such a repudiation being articulated in one of those top-tier scholarly journals where the idea of a failure of international law is so often invoked to justify reform or intervention.

In The Work of International Law, Monica Hakimi captures some of the key presuppositions that nourish the narrative of international law’s failure with the descriptive notion of the “cooperation thesis.” In her article, the cooperation thesis refers to the shared assumption that, in a chaotic and decentralized international arena, international law is meant to help global actors curb their disputes as well as promote their shared goals. Said differently, Hakimi uses the cooperation thesis to describe the common belief of international lawyers that international law deters, defuses and resolves conflicts while also advancing common aims. In Hakimi’s view, the cooperation thesis is not only the manifestation of some core presuppositions of 21^st century international lawyers, but also functions as an evaluative tool whereby international lawyers continuously measure the performance of international law. The cooperation thesis enables international lawyers to portray existing and persisting conflicts as pathological cases of international law’s failure. As a result, the cooperation thesis (and the presuppositions it rests on) allows international lawyers to pinpoint some deficiencies of international law, thereby justifying their own reformist enterprises or interventions. After spelling out these scholarly ailments, Hakimi embarks on a repudiation of the presuppositions that form the cooperation thesis. She does so by navigating through an impressive sample of doctrinal and theoretical scholarly works, demonstrating an admirable mastery of contemporary debates about international law. Her charge draws on the idea that international law itself enables conflicts, which explains why existing and persisting conflicts do not necessarily reveal any failure or deficiency of international law. She concludes that conflict is simply part of how international law works and why global actors engage with it.

The argument is compelling. As far as the main claim is concerned, there is very little I would disagree with. I personally welcome this charge against the dominant ethos whereby international law is uncritically presented as both the antidote to conflicts and as a cooperation-enhancing pill. I have always believed that there are better ways to articulate (and vent) the dominant cosmopolitan spirit of international lawyers^[1] than through liberal constructions that relegate disruption and antagonism to the periphery.^[2] Yet—and this is where my criticism lies—I find that the courage and erudition of Hakimi could have been pushed further. I contend here that her compelling critique stops prematurely. What is more, because she falls short of bringing her charge to completion, it may be that she ends up rehabilitating the very attitude that she seeks to debunk.

My criticism about the incompleteness of Hakimi’s argument and its possible contradictions develops in two ways. First, I start with Hakimi’s claim that conflict is part of how international law works. In her view, international law “facilitates” and “enables” conflict while also providing a share vocabulary to disagree and “define, understand, and have a dispute.” She similarly stresses that international law provides the requisite ground rules for conflict and allows them to communicate their discontent. Whilst I find such contention incontestable, I think that the relationship between international law and conflict is not fully appreciated. In my view, Hakimi’s claim fails to recognize that international law and conflict are mutually constitutive. On the one hand, international law constitutes the social reality where it is meant to intervene^[3] and thus the categories of how international lawyers and global actors experience and see the world.^[4] This social reality constituted by international law is itself conflictual.^[5] International law is constitutive of the very conflict in which it is invoked and meant to intervene.^[6] It is no coincidence that those conflicts known to experts invoking international law are, to give but a few examples, between states over borders and exclusive economic zones, or with non-state entities about access to government or effective control over a territory, or with individuals whose rights have not been sufficiently complied with. On the other hand, the conflicts constituted by international law—and the antagonisms they epitomize—are constitutive of the argumentative practice of international law. Short of antagonism, international legal claims and discourses would have no raison d’être. If we take pains to articulate international legal arguments, it is because we seek to universalize our own interests when they seem compromised by competing interests. ^[7] It could even be said that the making of any legal claim presupposes antagonism and conflict without which there would be no need to seek refuge in the universality of international law. Hakimi’s claim falls short of acknowledging that the relationship between international law and conflict is not one of facilitation but mutual constitution.

Second, and most importantly, my criticism of Hakimi’s treatment of the cooperation thesis builds on what I perceive as being a contradiction which is itself the result of her charge being not pushed far enough as was explained above. Indeed, she claims that conflicts facilitated and enabled by international law may be beneficial and conducive to cooperation. She writes that “an intense or prolonged conflict is often an ingredient for such cooperation” and adds that enabling conflict is part of the project of suppressing it, concluding that conflict and cooperation are symbiotic and interdependent. The problem with her position is not that the causality between conflict and cooperation is undemonstrated. The problem is primarily that in positing a symbiosis between conflict and cooperation, she upholds the dichotomy between two idealized and objectivized situations, namely those of conflict and cooperation, and vindicates the possibility that the latter replace the former. I wonder whether this claim about the symbiosis between conflict and cooperation ends up doing exactly what the paper seeks to repudiate, i.e. embracing the presumption that part of international law’s project is to suppress conflict. The impression that the paper ultimately salvaged the ideal of a suppression of conflict by international law is reinforced by the celebration, at the end of the paper, of a new “research agenda” that allows international lawyers to study when “conflict help(s) stabilize the global order and reduce the risk of devastating war.” The line between this new “research agenda” and the necessity to suppress conflict found in the cooperation thesis seems very thin. All-in-all, the reader is left with the feeling that the paper eventually upholds the liberal foundations of the cooperation thesis by negating the constitutive power of conflict and vindicating the need to suppress it. It is my impression that, had Hakimi pushed her claim further, she would not have run the risk of rehabilitating one of the presuppositions at the heart of the cooperation thesis.

Notwithstanding my regret that the claim elegantly articulated by Hakimi is not pushed further at the risk of creating contradictions, the paper demonstrates a great command of doctrinal and theoretical debates about international law and usefully challenges discourses about the failure of international law. Yet, I am left with one ultimate and lingering question. After all, if we are not able to fully dispose of the cooperation thesis and of some of its presuppositions, as is unintentionally shown by the article, it is maybe because the suppression of conflict by international law belongs to these myths that nourish and perpetuate what we do and want to continue to do. In other words, it may be that the idea of a suppression of conflict by international law remains a necessary justificatory paradigm which allows international lawyers, on the entire spectrum of approaches, to legitimate their projects, critiques, reforms, and interventions as much as their modes of legal reasoning. Be they liberal reformers identifying insufficiencies within international law to justify their reforms or interventions, or be they critics in need of tautologies and contradictions to justify their post-structuralist skepticism, international lawyers may be condemned to keep these myths^[8] alive,^[9] whether or not they actually believe in them. What if the cooperation thesis was simply one of these foundational myths?

^∗ Jean d’Aspremont is a Professor of Public International Law, University of Manchester, Professor of International Legal Theory, University of Amsterdam, and Director of the Manchester International Law Centre (MILC).

^[1] See Sahib Singh, The Potential of International Law: Fragmentation and Ethics, 24 Leiden J. Int’l L. 23, 43 (2011) (“International law was animated by a cosmopolitan universalism, but international lawyers forgot the spirituality of this venture when universalism was demonstrated as an impossibility.”).

^[2] On such an understanding of liberalism, see Chantal Mouffe, The Return of the Political 121 (1993).

^[3] As far as the definitional power of international law is concerned, see Philip Allott, The Idealist’s Dilemma: Re-Imagining International Society (June 9, 2014), http://www.ejiltalk.org/the-idealists-dilemma-re-imagining-international-society/ (“The whole of the law is a vast work of fiction, a masterpiece of the human imagination, creating its own entirely artificial reality. Lawyers—even practising lawyers—are creative writers, re-inventing the story of the law every day.”). See also Philip Allott, Language, Method and the Nature of International Law, 45 Brit. Y.B. Int’l L. 79, 118 (1971); James R. Crawford, International Law As Discipline and Profession, 106 ASIL Proceedings 471, 486 (2012) (“We are collectively part of the makers of that world”); Jack M. Balkin, The Proliferation of Legal Truth, 26 Harv. J.L. & Pub. Pol’y 101, 103 (2003) (“Law has power over people’s imaginations and how they think about what is happening in social life.”).

^[4] See generally David Kennedy, International Legal Structures (1987). See also Balkin, supra note 3, at 104 (“It is a form of cultural software that shapes the way we think about and apprehend the world.”).

^[5] Paul W. Kahn, The Cultural Study of Law: Reconstructing Legal Scholarship 30 (1999) (“We must accept the proposition that there is nothing natural about the legal order, that it is a constructed social world that could be constructed differently.”).

^[6] The ability of law to define the very conflict it intervenes in has been recognized as one of the most critical forms of power. See Pierre Bourdieu, The Force of Law: Toward a Sociology of the Juridical Field, 38 Hastings L.J. 805, 838 (1987) (“Law is the quintessential form of symbolic power of naming that creates the things names.”). See also id. at 837 (“What is at stake in this struggle is monopoly of power to impose a universally recognized principle of knowledge of the social world . . . .”). On the idea that Bourdieu and Foucault allowed us to better understand how lawyering is connected to knowledge production, see Nikolas M. Rajkovic, Rules, Lawyering, and the Politics of Legality: Critical Sociology and International Law’s Rule, 27 Leiden J. of Int’l L. 331, 335 (2014). This idea is now widely accepted in (international) legal scholarship. See Martti Koskenniemi, The Politics of International Law: 20 Years Later, 20 Eur. J. of Int’l L. 7, 11 (2009); Balkin, supra note 3, at 113 (“Law is most powerful when we see the world through its eyes, when its understanding becomes part of our understanding, and when its truth becomes part of our truth.”). See also S. Marks, International Judicial Activism and the Commodity-Form Theory of International Law, 18 Eur. J. of Int’l L. 199, 202 (2007).

^[7] On the universalizing effect of legal claims, see Bourdieu, supra note 6, at 844; Martti Koskenniemi, Hegemonic Regimes, in Regime Interaction in International Law: Facing Fragmentation 305, 311 (Margaret A. Young ed., 2012). Compare with Balkin, supra note 3, at 108 (“What law does, and can do, is proliferate ideas, concepts, institutions and forms of social imagination, which can attach themselves to, reorganize, and even displace existing forms of social understanding, social practice, and social reality.”). Such universality is elusive. See Martti Koskenniemi, The Mystery of Legal Obligation, 3 Int’l Theory 319, 324 (2011) (“Law’s power and attraction lie in its offering what appears a universal point of view, its ability to raise mere opinions onto a status of what is (universally) right. And yet this universal standpoint constantly eludes us. Rules show themselves as mere interpretations, principles are challenged by equally powerful counter principles, etc.”).

^[8] On the myth of Westphalia, see generally Andreas Osiander, Sovereignty, International Relations, and the Westphalian Myth, 55 Int’l Organization 251 (2001); Pärtel Piirimäe, The Westphalian Myth and the Idea of External Sovereignty, in Sovereignty in Fragments: The Past, Present and Future of a Contested Concept 64 (Hent Kalmo & Quentin Skinner, eds., 2010); Benno Teschke, The Myth of 1648: Class, Geopolitics, and the Making of Modern International Relations (2009). More generally, see David Kennedy, International Law and the Nineteenth Century: History of an Illusion, 17 Quinnipiac L. Rev. 99, 121 (1997); Martti. Koskenniemi, The Gentle Civilizer of Nations: The Rise and Fall of International Law 1870-1960 95, 143 (2001).

^[9] See generally Jean d’Aspremont, International Law as a Belief System (forthcoming 2017).

the work of international law

Professor Monica Hakimi

University of Michigan Law School

[PDF]

by Daniel Bodansky*

Is the function of international law to promote cooperation or conflict? That is the question posed by Monica Hakimi’s provocative article, “The Work of International Law.” Hakimi claims that most international lawyers subscribe, whether explicitly or implicitly, to what she dubs “the cooperation thesis” – namely, that international law serves to “curtail conflict” (p. 3) and advance states’ “shared agendas” (p. 1), and that its success in doing so is the appropriate “metric” for evaluating international law (pp. 6, 19). Hakimi argues strongly against this view. The cooperation thesis, she maintains, is “specious” (p. 6), “unfounded” (p. 62), and, if not “altogether wrong”, then at least “seriously flawed” (p. 1). She claims, instead, that conflict is a “pervasive” feature of international law (p. 47), that focusing on international law’s role in enabling and facilitating conflict “explains the legal practice much better than the cooperation thesis does” (p. 36), that “intractable conflict” is not an impediment to international law’s mission” (p. 25), and that, in facilitating conflict, international law plays a positive role. In short, she argues that conflict is part of the “project” or “work” of international law (pp. 8, 42, 64), not an indication of failure.

Despite these bold claims, what Hakimi actually establishes in her article is more modest. She shows that, in some instances: (a) international law enables conflict, and (b) conflict can serve useful functions. To the extent that anyone subscribes to an absolutist version of the cooperation thesis, then these points serve as useful correctives. They illustrate that international law works in diverse and complicated ways, and that legal conflict is not always bad. But they do not demonstrate that the cooperation thesis is “specious” or “unfounded.” Actors do use international law to promote cooperation, as Hakimi herself recognizes, and “[s]ome conflicts are plainly deleterious and best avoided” (p. 45). So the cooperation thesis is not untrue; it is, at worst, incomplete. In describing the cooperative role of international law, it gives insufficient emphasis to the ways in which international law enables conflict.

Hakimi may be right that international lawyers tend to emphasize international law’s cooperative rather than its conflictual role, but, if so, they are unusual. For most people, law is much more associated with conflict than cooperation. The words “lawyer” and “lawsuit” do not usually evoke an image of singing Kumbaya around the campfire. More likely they bring to mind Dickens’ epic case, Jarndyce and Jarndyce – which “droned” on so long and “became so complicated that no man alive knew what it meant,” and which ended only after the lawyers’ fees had exhausted all of the resources of the estate. Danny DeVito cogently summed up the popular image of lawyers in the movie, Other People’s Money: “[Lawyers are] like nuclear weapons. They have theirs, so I have mine. Once you use them, they fuck everything up.”

Of course, Dickens’ and DeVito’s views are caricatures of the legal system. In domestic law, litigation is associated with conflict. Actors litigate in order to vindicate their rights; the process is zero sum and hence conflictual. “Law helps create [people’s] grievances and galvanize them to fight for their cause,” as Hakimi notes (p. 40). But transactional law, in contrast, is interest-based and generally promotes cooperation. “Getting to yes” requires an outcome that produces mutual gains.

To the extent that international lawyers emphasize the cooperative rather than the conflictual role of international law, one reason may be that much of international law is transactional. It involves negotiating agreements that require the consent of states and hence must leave everyone better off. A good example is the Montreal Protocol on Substances that Deplete the Ozone Layer, often described as the most successful international environmental agreement to date, which establishes a cooperative regime to promote states’ common interest in preserving the stratospheric ozone layer.

The logic of Hakimi’s argument suggests that even an agreement like the Montreal Protocol might be understood as enabling conflict, by using ambiguous terms that permit differing interpretations and by authorizing parties to use trade measures against non-participating states. But characterizing the Montreal Protocol in this way would be a little like saying that the work of business contracts is to promote conflict. Yes, contracts can sometimes lead to litigation, but that is not their object. Litigation is a sign of failure rather than success. Similarly, tort law gives “actors reasons to fight” (p. 59). But it would be misleading, at best, to describe the work of tort law as enabling conflict, rather than remedying private wrongs.

Although Hakimi rightly notes that international law in some cases enables or legitimizes conflict, this also does not mean that “law is essential to conflict” (p. 39), unless we take a very limited view of what constitutes “conflict.” The Visigoths did not need a shared legal framework with the Romans in order to sack Rome, nor did the Russian bombing of Aleppo presuppose a common legal framework with the Syrian rebels. Hakimi cites chess in support of her argument that conflict requires common ground rules (p. 37). As she says, “having … ground rules helps global actors disagree” (p. 39). But chess represents a very benign form of conflict. Of course, the game of chess is defined by a set of rules, and conflict within that game depends on these rules. Similarly, argumentation (legal or otherwise) requires shared understandings that make communication and disagreement possible. But not all conflicts take place within a rule-governed framework like a game of chess or a courtroom; not all are discursive. Boxing may depend on a set of agreed rules, but a barroom brawl does not. Nor does ending a chess game by shooting one’s opponent – or settling an international dispute by invading the other country. Legal rules enable and are integral to legal conflict, but not necessarily to conflict more generally.

Seemingly, the most radical of Hakimi’s claims is her normative argument that international law’s role in enabling or facilitating conflict is positive. Again, however, Hakimi’s argument, on closer examination, is less radical than it might appear at first glance. She does not espouse the Nietzschean view that conflict is good in itself. Rather, she shows that conflict can sometimes be a useful means to achieve other ends. It can “be a critical step in the process of reaching a deal” (p. 42); it can “release tensions that would otherwise express themselves in more destructive ways” (p. 44); and it can allow global actors to “disagree in relatively productive ways” (p. 47). Conflict is not necessarily a pathology. It is “often an instrument of the kind of cooperation that the cooperation thesis envisions” (p. 63).

This is an important point, but I do not think it will be news to supporters of the cooperation thesis. Enforcement, after all, often engenders conflict; but no one would say that, if a regime provides for enforcement, this means that it is not aimed at achieving shared objectives – that Chapter VII of the UN Charter undercuts the cooperation thesis. The fact that civil rights movements have engendered conflict – even war – does not mean that the “work” of civil rights is to enable or facilitate conflict, rather than to promote justice. Hakimi attempts to distinguish her position from the familiar view that “if international law at times fosters conflict, its true mission” is cooperation (p. 41), and that “the work of international law is to get us there as harmoniously as possible (p. 42). But here the difference between her view and that of the cooperation thesis seems one of nuance and tone, rather than of substance.

In stressing the positive roles of conflict, Hakimi shines the spotlight on an often underplayed aspect of international law. Conflict may not be “integral” to cooperation, as she claims (p 8); cooperation in delivering the mail internationally, for example, does not depend on conflict. But neither is it antithetical to cooperation (p. 36). Hakimi’s article in praise of conflict provides a useful corrective to the tendency among some international lawyers to see conflict as perverse. It reminds us that promoting common ends may not be simply a matter of joining together to cooperate.

* Daniel Bodansky is a Foundation Professor of Law at Sandra Day O’Connor College of Law, Arizona State University.

This 2017 Summer Online Symposium is a discussion of Professor Monica Hakimi’s latest paper, The Work of International Law, which was recently published in the Harvard International Law Journal.  Dan Bodansky, Jean D’Aspremont, Nico Krisch, and Tim Meyer wrote responses to Professor Hakimi’s article, links to which can be found below.  Adding to the fruitful commentaries provided by the four academics, Professor Hakimi wrote a reply to the responses.

Main Article

Monica Hakimi, The Work of International Law

Responses

Dan Bodansky

Jean D’Aspremont

Nico Krisch

Tim Meyer

Reply

Monica Hakimi

[PDF]

By Giovanna Gismondi*

On July 2016, a Partial Award dismissed the Renco Group Inc. v. The Republic of Peru case. The Award indicated, however, that a new arbitration claim could be pursued against the State. In view of this, this essay analyzes the US investor’s legal contentions presented in the 2014 Memorial of Liability. The examination of this case considers the environmental and health effects of the investment in order to give proper weight to the arbitration claim. Due to weak environmental references to the 2006 US-Peru Trade Promotion Agreement (PTPA), this paper emphasizes the importance of striking a fair balance between the protection afforded to foreign investments and the state’s ability to protect health and the environment. This case represents the first investor-State arbitration dispute lodged pursuant to the PTPA.

On 15 July 2016, a UNCITRAL Tribunal (the Tribunal) released a partial Award dismissing the case concerning the Renco Group Inc. v. The Republic of Peru.[1] The claim was submitted pursuant to the U.S.-Peru Trade Promotion Agreement (PTPA) signed in 2006.[2] The dispute concerns the operation of a metallurgical complex located in the Andean town of La Oroya, in central Peru. The complex, built in 1921 by a third private party, had, over the course of several decades, become outdated and was identified as the main source of air, soil, and water contamination. Sulfur dioxide (SO2) and lead are among the main sources of contamination generated by the complex.[3] Studies carried out in La Oroya highlighted the toxicity and hazardousness of lead, which mostly affected children (as shown by high levels of lead in their blood).[4] The problem was exacerbated by severe malnutrition among children, which increased the risk that children’s bodies would absorb more pollutants from the environment.[5] Sulfur Dioxide, additionally, damaged the respiratory and circulatory systems, increasing mortality especially when found in high concentrations, as it was in La Oroya.[6]

This led Peru to seek an investor willing to purchase and modernize the plant to meet Peru’s environmental goals. This was no easy task, as most investors are very hesitant to purchase a complex with such potential for environmental liability. Environmental disputes can indeed result in a tangle of litigation.[7] Despite these challenges, Doe Run Peru (DRP), a Peruvian subsidiary of New York-based Renco Group Inc. (Renco), purchased the complex from Centromin, a Peruvian State-run company, in 1997 for 247 million dollars (USD).[8] In addition to the purchase agreement, DRP agreed to carry out nine modernization projects at a cost of USD 129 million.[9] Problems arose during the execution of projects by DRP, which led the investor to trigger international arbitration against Peru.

Chapter 10 of the PTPA recognizes a foreign investor’s right to initiate arbitration proceedings against the host state for an alleged breach of rights as recognized by the PTPA, along with provisions contained in either an Investment Agreement and/or Authorization.[10] This treaty, like most investment treaties, contains few environmental references. The PTPA makes reference to environmental protection as an objective of the treaty in the Preamble.[11] In practical terms, however, arbitral tribunals do not rely on the preamble to influence interpretation of the treaty’s text.[12] And even though the PTPA states that the dispute shall be decided “in accordance with this Agreement and applicable rules of international law;”[13] the practice of most tribunals is to rely on the treaty’s plain language without importing “legal elements from other treaties.”[14] Furthermore, investment treaties state the rights of foreign investors in such broad terms that tribunals are left with discretion to determine their actual content as they examine the factual basis of a given case.[15] This has led to inconsistent interpretations in international investment law.[16] Note that international investment tribunals do not enforce the host state’s environmental or health laws. Nor can the state lodge counter claims against a foreign investor.

However, the PTPA leaves room for states to achieve environmental policy goals, notwithstanding limitations. Art. 10.11 provides that:

Nothing in this Chapter shall be construed to
prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.[17]

The above provision allows the state to adopt and enforce measures that take the environment into account as long as such measures are consistent with protections afforded to investors and their investments under the PTPA. Obviously, this requirement could be used to weaken the state’s power to increase environmental protections without breaching investment protections. The Renco submission depicts a case concerning enforcement measures adopted by Peru in the mist of an environmental crisis, allegedly in breach of investment standards. The claim, however, was stunted on jurisdictional grounds.

I. Analysis of the 2006 Partial Award on Jurisdiction

The Award dismissed Renco’s claim on jurisdictional grounds due to its failure to submit a valid waiver. According to art. 10.18.2 (b) of the PTPA, the foreign investor must submit a waiver together with a Notice of Arbitration (or request for arbitration) to the Respondent State. The Tribunal reiterated that by means of a written waiver, the foreign investor waives the right to pursue legal proceeding in local courts, and any other forum for the settlement of disputes concerning the alleged violation(s).[18] The case records show Renco introduced a declaration to the waiver provision reserving the right to bring the matter to another forum “for a resolution on the merits” if the present claim were to be dismissed or declared inadmissible.[19] The Tribunal concluded that such declarations are contrary to the object and purpose of the waiver provision, which was designed to avoid parallel or subsequent procedures.[20] Consequently, the claim was dismissed. The Tribunal further stated that Renco could commence a new arbitration with a ‘clean’ waiver.[21] However, submitting a new claim might trigger other jurisdictional problems.[22] It is also important to consider that the PTPA became effective on 1st February 2009 and is prospectively applicable from that date. Therefore, some of Renco’s complaints, which may date back to 1997, fall outside the Tribunal’s jurisdiction. There remain, however, disputes that are within the temporal scope of the Tribunal, such as alleged unlawful expropriation claims and breach of the right to Fair and Equitable Treatment (FET).

II. Renco’s Main Contentions as per the 2014 Memorial of Liability

This paper now turns to the issue of expropriation as presented by Renco in the 2014 Memorial of Liability.[23] A short introduction to Renco’s investment is helpful to understand the dispute. In 1997, DRP purchased the complex from Centromin, and as a result, an investment contract referred to as a Stock Transfer Agreement (STA) was signed.[24] In an effort to promote environmental sustainability, the Government adopted a program called the Environmental Remediation and Management Program (PAMA) in the early 1990s.[25] Based on PAMA, modernization plans are prepared by the investor with the subsequent approval of the Ministry of Energy and Mines (MEM). The PAMA plan lays out the modernization activities and investments to be carried out by companies. In order to achieve PAMA goals, Peru adopted Maximum Permissible Levels (MPLs) of pollution in 1996.[26]

MPLs measure the source of contamination, e.g., concentration of pollutants in stack gas emissions or discharges. All companies were given 10 years to gradually bring down emissions and waste discharges to meet these standards while still operating their facilities. At the time DRP purchased the complex, PAMA and MPLs were in force.

While the STA briefly mentions PAMA, the actual schedule of activities and the investor’s financial obligations, the PAMA plans, were regulated by separate decrees. The complex’s PAMA plans were prepared by Centromin and approved by the MEM in 1996.[27] When DRP began modernization work it found that Centromin had ‘severely’ undervalued certain modernization projects while omitting others, resulting in a much higher modernization cost for DRP than they had agreed to at the time of purchase.[28] DRP argues that, since more investment and time was necessary to fully modernize the plant, an extension beyond the 10-year term was needed. The MEM responded with a less than three-year extension ending September 2009. As a condition of the extension, the 2001 Air Quality Standards (ECA) were made mandatory for DRP.[29] The ECA creates maximum levels of concentrations that air—as a whole—shall not exceed in order to prevent risk to human health. Application of the ECA was foreseeable under Peruvian laws and Renco does not challenge its application.[30] Admittedly, however, the ECA further increased investment cost. DRP considers the less than three-year extension as grossly unfair and arbitrary.[31]

When the 2009 deadline passed without DRP completing its work, Congress granted a second extension by way of an exception.[32] Congress also gave MEM the power to attach conditions.[33] As a result, the MEM mandated a trust that would channel 100% of DRP’s revenues into an account controlled by the MEM.[34] DRP contended that establishing such a burdensome trust would make it impossible to obtain any credit by restricting cash flow.[35] The trust was ultimately reduced to 20%, but Renco states that DRP was left without sufficient time to obtain the necessary funds before the deadline.[36] After verifying DRP’s inability to obtain financing, the MEM cancelled the company’s operating license. Shortly after, the company was forced into bankruptcy in the mist of financial hardship. Under Peruvian laws, creditors are able to initiate bankruptcy against the debtor in hopes of repayment. By this time, DRP’s total investment on PAMA projects had reached USD 300 million.[37]

It is in this context that the MEM claimed a USD 163 million (plus USD 87 million to allow completion of the last project) credit against DRP. DRP argued that, according to Peruvian laws, only administrative sanctions apply for the unfinished project.[38] After exhausting the appeal process, MEM’s right to the credit was upheld by local courts. Thus, the MEM became DRP’s major creditor with the ability to determine the fate of the company in bankruptcy proceedings. The creditors then agreed to sell the complex. Consequently, after making an overall USD 300 million investment in PAMA projects, in addition to paying USD 247 million to the Government at the time of purchase, DRP lost ownership of the metallurgical complex in the bankruptcy proceedings. Renco argues that, as a result, Peru deprived Renco of the ‘whole’ of its investment, amounting to an unlawful expropriation in breach of the PTPA art. 10.7.[39]

III. Assessment of Liability

The question of unlawful expropriation begins with the issue of inadequate extensions beyond the initial 10-year term, which Renco claims were arbitrary and in breach of FET standard. In 2005, at the time of the request for extension, alarming levels of air lead contamination generated by the complex were reported to be affecting the population. The US Center for Disease Control and Prevention (CDC), upon request of the USAID PERU Mission, released a report indicating that:

The presence of lead in soil, dust, water resources, and ambient air probably will continue to keep [blood lead levels] elevated in people in and around La Oroya. Ongoing discussions delay the protection young children need.[40]

The CDC recommended that “air lead emissions [be reduced], both stack and fugitive, to levels that protect children.”[41] The same observation applied to exposure from historic soil contamination.[42]

By the time this report was issued, DRP operated the complex for eight years without showing sufficient progress towards modernization. In 2005, another delegation, this time from the University of Missouri’s School of Public Health, found that a number of soil contaminants, including mercury, cadmium and arsenic, were released by the plant, affecting a larger area including the Mantaro Valley.[43] This team presented, for the first time, studies on the impact of this combination of pollutants on human health.[44] These findings were not new. The Ministry of Health Directorate of Environmental Health (DIGESA) reported that the health administration was aware of elevated blood lead levels resulting from the air pollution crisis as early as 1999.[45] Health problems in La Oroya have been corroborated by exhaustive independent studies concerning emissions fluctuations during the time DRP ran the complex. One study shows that air quality deteriorated drastically from 1997 to 2000, as compared with the first year of the PAMA from 1995 to 1996.[46] Therefore, DRP’s application for extension did not sufficiently prove that the company could implement effective measures to prevent further health injuries, but for less than three years.[47]

Moreover, the lack of progress towards the modernization projects is corroborated by the substantial delays in investment commitments.[48] Each delay exacerbated the contamination problem, becoming a major source of social unrest in the area.[49] The most significant delay was the modernization work on lead, cooper, and zinc plants, which had not even begun.[50] The modernization of these three plants consisted of turning the plants into sulfuric-acid plants, which would produce much lower levels of pollution than the plants produced before modernization. These plants generated the largest revenue, as well as the main source of pollution from the entire complex, making this final project the most expensive and important PAMA project. The MEM responded with a less than three-year extension—ending in September 2009—exclusively for the completion of these three plants, which represented over 60% of the total modernization budget.[51] The MEM reiterated that the length of the extension was ultimately necessary to avoid further health injury.[52] This decision was, arguably, not arbitrary.

Government data confirms that substantial progress towards modernization was made from 2007 to 2009.[53] However, the extended deadline passed without DRP completely modernizing the copper plant that would have drastically reduced sulfur dioxide (SO2) emissions. High levels of SO2 emissions, likely due to the partly outdated copper plant, continued to be reported.[54] A second extension was then granted with the caveat that a trust be established to ensure that future revenues would be channeled into modernization projects; undoubtedly, due to La Oroya’s critical environmental situation. DRP, however, could not get the necessary funding within the deadline set by Congress to restart this project.[55] Thus, DRP’s license was cancelled.

Therefore, in light of Centromin’s PAMA omissions in calculating the modernization costs, DRP was granted two extensions beyond the 2007 deadline to allow the company to meet environmental standards. Having received one effective extension, and a second financially frustrated extension, DRP did not complete the PAMA.

The failure to complete the last project resulted in a credit claim against DRP during the bankruptcy process. Renco argued that Peruvian laws do not support the existence of any credit in favor of the MEM, but the application of administrative fines and, eventually, closure of the plant in the case of non-compliance with the PAMA.[56] Local courts held that, based on the Peruvian Civil Code, DRP is obligated to fulfill its modernization projects under the PAMA.[57] Therefore, DRP owes the amount necessary for completion. However, neither the STA nor the laws implementing the PAMA explicitly state that the Civil Code would apply and generate a credit. Under the Peruvian legal system, nevertheless, the Code applies in situations where there is, for example, a breach of an obligation with economic content, as in the present case.[58] That said, it must be noted that the highest court dealing with this issue, La Corte Superior de Justicia de Lima, was split (3-2), reflecting the lack of clarity on whether fines or a credit would be generated in the case of a failure to fulfill the PAMA obligations.[59] Certainly, this aspect could raise an issue under the FET clause of the PTPA. Further, the interpretation of national laws concerning the legal character of the PAMA, and whether the PAMA is a legal obligation or merely an expression of environmental goals, will be an important element to consider when examining expropriation.

Another important aspect to the expropriation question is the proportionality of the measure.[60] That is to say, whether the aim of the measure—completion of the partially modernized copper plant— was proportional to its effect—deprivation of property. Restructuring would have been one option for avoiding a taking , DRP presented restructuring plans in 2011 and 2012 that would have allowed the firm to pay back creditors while simultaneously operating the complex. However, the Committee of Creditors rejected these plans since they all provided for operation of the partially modernized copper plant.[61] This was the most profitable, and most polluting (in terms of SO2) plant . As can be seen above, the question of expropriation is not as simple as asking whether property was taken. It implicates competing concerns about protecting foreign investments and environmental protection. Moreover, as the metallurgical complex guarantees the survival of Peru’s mining industry, closure of this facility is not an option for the Government.

In addition to the above litigation, DRP’s investment also led to environmental tort claims in the United States. According to Renco, these actions raise issues under the PTPA’s FET standard. The investor indicates that between 2007 and 2013, close to a thousand residents, all children in La Oroya, or who were minors at the time of exposure, filed civil lawsuits against Renco, Doe Run Resources Corporation (DRRC), and other companies and officers associated with Renco for injuries caused by poisonous emissions.[62] All claims were filed in St. Louis, Missouri, where DRRC has its principal business.[63] Attempts to dismiss these claims were pursued by Renco on forum non conveniens grounds but, as of this writings, these lawsuits are still pending.[64] By the same token, unsuccessful attempts were made by Renco to stay the St. Louis claims pending international arbitration. The St. Louis courts have stated that the children bring negligence, conspiracy, and strict liability claims, and, as such, this issue is not “referable to arbitration.”[65] This means that the St. Louis lawsuits do not create overlapping proceedings with the international litigation, in the view of local courts.

These actions raise disputes between Renco, Peru, Centromin, and DRP about environmental liability. Provisions contained in the STA create an interpretation problem about liability for environmental damage between DRP and Centromin. A Guaranty Agreement was also signed by Peru and DRP, by which Peru guaranteed the assurances assumed by Centromin in the STA. Based on these agreements, DRP seeks compensation for damages since “the Renco Consortium has spent many millions of dollars defending [these] lawsuits.”[66] Peru’s broad liability approach in the STA—with limited exceptions—made sense, according to Renco, because Centromin and its predecessor operated the site for seventy-five years “without investing in necessary technological upgrades,” which caused significant environmental damage.[67] This option also made it possible for DRP to operate the facility without fear of being liable for environmental contamination. According to DRP, these considerations influenced Renco’s decision to invest in Peru. Meanwhile, Peru remains reluctant to make any payments for the St. Louis claims. Consequently, the Claimant contends that Peru breached the foreign investor’s legitimate expectations of PTPA art. 10.5, as Renco would never have invested in Peru had it known that it would ultimately be responsible for environmental damage in La Oroya. Likewise, the STA and the Guaranty Agreement are claimed to be in breach.

However, neither Peru nor DRP are defendants in the St. Louis claims, which were brought specifically against Renco. The STA exclusively regulates contractual relations between Centromin and DRP, and was adopted to protect DRP, the subsidiary, and not Renco, the US parent company, from third party environmental claims, and then only on specified grounds.[68] Since the St. Louis lawsuits do not target DRP, Peru’s refusal to defend the St. Louis lawsuits may not violate Renco’s legitimate expectations. In this sense, Peru’s position may not be regarded as being in breach of the PTPA. Further, the STA—an investment contract signed between two companies—may not satisfy the definition of “Investment Agreement” under the PTPA’s umbrella clause (art. 10.16).[69]

Conclusion

The PTPA is limited in its explicit incorporation of environmental standards. This presents significant obstacles for the state in enforcing environmental policies without breaching investment protections. Should the Renco arbitration claim move forward, understanding the environmental and health crisis in La Oroya will be crucial in affording appropriate weight and understanding to the international claim. In this broader context, analysis of this case requires engaging in a debate concerning the international protections afforded to foreign investment and the state’s ability to protect human health and the environment.

Moreover, the Renco case illustrates the close connection between environmental degradation and the right to health. The alleged victims of this environmental contamination continue to seek justice and have targeted Peru before national[70] and international bodies due to the Government’s failure to regulate pollution in the time during which DRP operated the plant.[71] The need to strike an appropriate balance between the promotion of foreign investment and protection of the environment and health continues to be a challenge for states, especially in the global south.

* Giovanna Gismondi is an S.J.D. candidate at Georgetown University. She also obtained an LL.M. from Georgetown University; Titulo Profesionalde Abogado at Universidad de Lima; and is a Lecturer at the University of Oklahoma, USA. The views expressed in this article are the author’s own opinion and do not reflect in any way those of the institutions to which she is affiliated. EMAIL: geg33@georgetown.edu.

[1] The Renco Group Inc. v. The Republic of Peru, ICSID Case No. UNCT/13/1, Partial Award on Jurisdiction, (Jul. 15, 2016) [hereinafter Partial Award].

[2] United States-Peru Trade Promotion Agreement Implementation Act, 19 USC § 3805 (2007) [hereinafter PTPA].

[3] See Ministerio de Salud—Direccion General de Salud Digesta: Direccion Ejecutiva de Ecologia y Proteccion del Ambiente—DEEPA, Inventario de Emisiones Cuenca Atmosferica de La ciudad de La Oroya, 44 (Nov. 2005) http://www.digesa.sld.pe/DEPA/inventario_aire/fuentes_fijas/Informe%20Inventario%20Integrado%20Oroya%20-%20Huancayo.pdf [hereinafter 2005 Inventory of Emissions for the Oroya Basin].

[4] See Doe Run Peru, Estudios de Niveles de Plomo en la Sangre de la Poblacion en La Oroya 2000-2001, § 1.3 http://www.bvsde.paho.org/bvsea/e/fulltext/estudio/estudio.pdf  [hereinafter 2001 Studies of Blood Lead Levels in the Population of La Oroya].

[5] Id. at 14.

[6] See e.g., Reid v. Doe Run Resources Corp., 2008 WL 3538410 (Mo. Cir. Aug. 7, 2008).

[7] The litigation between Chevron/Texaco and Ecuador stands as an example of overlapping and extended litigation seeking liability of the former US operator, Texaco, due to environmental degradation in the Amazon. These lawsuits ultimately led to an international arbitration claim under the US-Ecuador investment agreement. For more information concerning Chevron’s contentions see Chevron Corporation and Texaco Petroleum Corporation v. The Republic of Ecuador, UNCITRAL, PCA Case No. 2009-23, Claimant’s Memorial on the merits (2010) http://www.italaw.com/sites/default/files/case-documents/ita0164.pdf .

[8] See The Contract of Stock Transfer Between Empresa Minera del Centro del Peru S.A. (Centromin) and Doe Run Peru S.R. LTDA (DRP), Clause 2 and Art. 3.2 (1997) http://www.secinfo.com/dVut2.7yH1.j.htm#1stPage [hereinafter ‘Stock Transfer Agreement’, STA or Investment Contract].

[9] The STA did not reference the modernization projects, referred to as PAMA (Programa de Adecuacion y Manejo Ambiental). It only referred to the extent that the PAMA projects related to environmental liability resulting from operation of the complex.

[10] See PTPA art. 10.16.1.a.

[11] See id. at Preamble. (States resolve to “IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation, promote sustainable development, and strengthen their cooperation on environmental matters.”).

[12] Christina L. Beharry & Melinda E. Kuritzky, Going Green: Managing the Environment Through International Investment Arbitration, 30 Am. U. Int’l L. Rev. 391 (2015).

[13] PTPA, supra note 2, art. 10.22.1.

[14] Grand River Enterprises Six Nations, Ltd., et al. (Can.) v. United States of America, (UNCITRAL) ¶ 71 (Jan. 12, 2011).

[15] See, e.g., Neer (U.S.) v. Mexico, 4 R.I.A.A. 60 (U.S.-Mex. Claims Comm’n 1926) (requiring a high threshold of wrongfulness such as “outrage, to bad faith, to willful neglect of duty to find the state in violation of the Fair and Equitable Treatment ‘FET’ standard”); but see William Ralph Clayton et al. (U.S.) v. Government of Canada, (UNCITRAL), PCA Case No. 2009-04, Award on Jurisdiction and Liability, ¶¶ 442–444, 588  (Mar. 17, 2015) (requiring a high threshold of seriousness, without requiring that state action be shocking or outrageous).

[16] Suzanne A. Spears, The Quest for Policy Space in a New Generation of International Investment Agreements, 13 J. Int’l Econ. L. 1040 (2010).

[17] PTPA, supra note 2, art. 10.11.

[18] See Partial Award, supra note 1, ¶ 95.

[19] Id. ¶ 58.

[20] Id. ¶  87.

[21] Id. ¶ 184.

[22] Of the potential jurisdictional problems, additional waiver issues may arise. Records indicate that DRP and Renco each submitted a waiver together with the Notice of Arbitration. With the international claim already underway, DRP challenged the taking of property in local courts, creating “parallel proceedings.” The Notice of Arbitration was subsequently amended to remove DRP, thus making Renco the only Claimant. The issue is whether two valid waivers—one for the parent company and the other for its subsidiary—are still required.  The PTPA allows for either (1) Renco to bring suit as the sole party, or (2) for Renco to bring suit on behalf of DRP. These two options create a conflict of interpretation, leading Peru to argue that DRP, as the injured party, must bring suit, therefore barring the suit completely because of parallel proceedings in local court.

[23] The Renco Group Inc. v. The Republic of Peru, ICSID Case No. UNCT/13/1, Claimant’s Memorial on Liability (Feb.- 20, 2014) [hereinafter Memorial on Liability].

[24] See ‘Stock Transfer Agreement’, STA or Investment Contract, supra note 8.

[25] See generally The World Bank, Wealth and Sustainability: The Environmental and Social Dimensions of the Mining Sector in Peru, at 64 (2005) (providing a comprehensive background on the evolution of environmental regulation in mining in Peru, including the establishment of the Program for Environmental Remediation and Management-PAMA), available at http://siteresources.worldbank.org/INTPERUINSPANISH/Resources/AAA_Environment_and_Mining_in_Peru.pdf.

[26] The legal notion of Maximum Permissible Levels (MPL) was introduced for the first time in 1993 with the adoption of the Reglamento para la Protección Ambiental en la Actividad Minero-Metalúrgica; Supreme Decree Nº 016-93-EM of May 1, 1993 (Regulation of Environmental Protection for Mining Activities), Art. 1.

[27] See Memorial on Liability, supra note 23, ¶ 10.

[28] Id. ¶ 115.

[29] Id. ¶ 154.

[30] Resolucion Ministerial No. 315-96-EM-VMM (July 1996) (stating that the provisional Environmental Air Quality standards (ECA, Spanish acronym) would apply until replaced by national air quality standards).

[31] See Memorial on Liability, supra note 23, ¶ 309.

[32] Ley No. 29410 [Legislation of Peru, Act No. 29410] (Sep. 25, 2009), art. 1 (Congress justified the extension after finding that decontamination of La Oroya through modernization of the plant was a “public need.”).

[33] Id. at art. 3.

[34] See Memorial on Liability, supra note 23, ¶ 184.

[35] Id. ¶ 15.

[36] Id. ¶ 189.

[37] Id. ¶ 323.

[38] Id. ¶ 192.

[39] Id. ¶ 390.

[40] Development of an Integrated Intervention Plan to Reduce Exposure to Lead and Other Contaminants in the Mining Center of La Oroya, Perú. (Centers for Disease Control and Prevention, National Center for Environmental Health/Agency for Toxic Substances and Disease Registry Division of Emergency and Environmental Health Services (CDC/NCEH/DEEH/EHSB). (CDC/NCEH/DEEH/EHSM, Atlanta, GA), May 2005, at 33.

[41] Id. at 35.

[42] Id.

[43] See Fabiana Li, Unearthing Conflict: Corporate Mining, Activism, and Expertise in Peru  53-55 (Duke University Press 2012).

[44] Id.

[45] See Estudio de Plomo en la Sangre en una Poblacion Seleccionada de la Oroya (Ministry of Health, General Directorate of Health (DIGESA)). (DIGESA, Peru), Nov. 1999 (hereinafter 1999 DIGESA Report).; See also Consejo Nacional del Ambiente-CONAM, Gesta Zonal del Aire de La Oroya, “Plan de Acción para la Mejora de la Calidad del Aire en la Cuenca Atmosférica de La Oroya”, (hereinafter 2006 Action Plan) pp. 16-18; 42-43. This report presents tables prepared by the General Directorate of Environmental Health (DIGESA) showing blood lead levels in affected communities in La Oroya in 1999 and 2005.

[46] See Anna K. Cederstav, and Alberto Barandiaran, La Oroya Cannot Wait, Interamerican Association for Environmental Defense (AIDA) and Peruvian Society of Environmental Law (SPDA). (AIDA & SPDA, CA), Sept. 2002, at 51.

[47] See Resolucion Ministerial N. 257-2006-MEM/DM (Considerando para. 13; Conclusiones) (May 2006).

[48] See Universidad ESAN, Evaluación de la Solicitud de Prorroga Excepcional de Plazos Para el Cumplimiento de Proyectos Medioambientales Específicos,  presentado por la empresa DOE RUN  PERU SRL. ESAN. Lima, Febrero 2006, at 27 (stating that DRP’s pending PAMA investment was worth USD 121.2 million at the time DRP applied for the first extension in 2004–2005), available athttp://intranet2.minem.gob.pe/web/archivos/dgaam/estudios/oroya/Finalv1.pdf.

[49] See Martin Scurrah, Jeannet Lingan and Rosa Pizarro, Case Study, Job and Health in Peru, in Globalizing Social Justice: The Role of Non-Govenrment Organizations in Bringing About Social Change, at 175–176 (Jeffrey Atkinson and Martin J. Scurrah eds. New York : Palgrave Macmillan, 2009) (recalling that mining workers, trade unions, and the local government allied with DRP in supporting the extensions; and were against residents, who feared that another would increase health problems).

[50] See generally Ministerio de Energia y Minas (MEM), Informe N. 0118-2006-MEM Mayo 2006. [hereinafter MEM 2006 Report on DRP’s Request for Extension], available at http://www.aida-americas.org/sites/default/files/refDocuments/MEM%20PAMA%20Approval%20May%2020061.pdf.

[51] Id. Annex I and II.

[52] See Li, supra note 44.

[53] Organismo Supervisor de la Inversion en Energia y Mineria (OSINERGMIN), ‘Supervision al Complejo Metalurgico La Oroya – DOE RUN PERU. Avances al 31 de Diciembre de 2009’, at 12 (2009).

[54] See Ministerio de Salud (MINSA), Direccion General de Salud (DIGESA), —Oficina de Ecologia y Proteccion del Medio Ambiente:

       Evaluacion de la Calidad del aire en la Ciudad de la Oroya – Junin (Octubre de 2006) (hereinafter 2006 DIGESA REPORT), CONCLUSIONES (noting that the town of La Oroya Antigua had 5 times the amount of lead and Sulfur Dioxide permitted under the ECA standards).

       Monitoreo de Calidad del aire la Oroya  (Mayo 2007) (hereinafter 2007 DIGESA REPORT), CONCLUSIONES (showing improvement in air quality, but also finding that lead and Sulfur Dioxide exceeded the average permissible national standard on some days).

       Evaluacion de la Calidad del Aire en la Ciudad de la Oroya – Junin  (Marzo – Abril 2008)  (hereinafter 2008 DIGESA REPORT) (finding that lead and Sulfur Dioxide exceeded the maximum permissible limits), available at http://www.digesa.minsa.gob.pe/.

[55] Memorial of Liability, supra note 23, at 334.

[56] Id. at 192.

[57] See Corte Superior de Justicia de Lima. Octava Sala Especializada en lo Contencioso Administrativo con Sub Especialidad en Temas de Mercado. Sentencia. Expediente N.368-2012 (Ref. Sala 184-2013) DECISION (October 18^th, 2012), available at https://www.pj.gob.pe/wps/wcm/connect/8775f2804513e75c9f369f279eb5db9a/D_Exp_368_2012_120814.pdf?MOD=AJPERES&CACHEID=8775f2804513e75c9f369f279eb5db9a.

[58] Codigo Civil Peruano (1984) arts. 1150-51.

[59] See Li, supra note 44. See also Corte Superior de Justicia de Lima, supra note 57, Dissenting Opinion of Judge TORRES GAMARRA and HASEMBAK ARMAS (stating that the MEM does not have the legal authority to invoke the Civil Code in this case, and that environmental laws explicitly provide for a system of fines).

[60] See, e.g., Occidental Petroleum Corp. v. Ecuador, ICSID Case No. ARB/06/11, Award, (Oct. 5, 2012), ¶¶ 404–05 (finding that the state’s reaction, the termination of a contract worth many millions of dollars, was disproportional to the wrongdoing).

[61] Memorial on Liability, supra note 23, ¶ 201.

[62] Id. ¶ 275.

[63] See e.g., Reid v. Doe Run Resources Corp., supra note 6, Petition for Damages – Personal Injury.

[64] Reid v. Doe Run Resources Corp., 74 F. Supp. 3d 1015 (E.D. Mo. 2015).

[65] See A.O.A.  v. Doe Run Resources Corp., 4:11CV44 CDP, 2011 WL 6091724 (E.D. Mo. Dec. 7, 2011) (denying a motion to stay the St. Louis proceedings pending international arbitration based on the fact that injury for environmental damage caused by the complex is not referable to arbitration). This decision was upheld on appeal. See Reid v. Doe Run Resources Corp., 701 F.3d 840 (8th Cir. 2012).

[66] Memorial on Liability, supra note 23, ¶ 90.

[67] Id. ¶ 75.

[68] See STA, supra note 8, art. 5.3 (providing grounds of liability for damages and claims by third parties for acts attributable to DRP such as those resulting from DRP’s PAMA project failure).

[69] See PTPA, supra note 2, art. 10.16 (defining an Investment Agreement as an “agreement between a national authority of a Party and a covered investment or an investor of another Party […]”).

[70] Sentencia del Tribunal Constitucional, EXP. N.º 2002-2006-PC/TC. LIMA. PABLO MIGUEL. FABIÁN MARTÍNEZ Y OTROS. 12 Mayo 2006. (finding the Ministry of Health responsible for not adopting measures necessary to protect the health of people in La Oroya and ordering the adoption of urgent health care measures).

[71] See Inter-American Commission of Human Rights. ADMISSIBILITY, COMMUNITY OF LA OROYA. PERU. REPORT No. 76/09. PETITION 1473-06. Aug. 5, 2009. This case is currently pending. http://www.cidh.oas.org/annualrep/2009eng/Peru1473.06eng.htm.

Articles:

The Work of International Law
By: Monica Hakimi

Of Handcuffs and Signals: Investment Treaties and Capital Flows to Developing Countries
By: Jeswald W. Salacuse

The Abyei Arbitration and the Rule of Law
By: Gary B. Born and Adam Raviv

Grave Crimes and Weak Evidence: A Fact-finding Evolution in International Criminal Law
By: Nancy Amoury Combs

Note:

Regulating the Visible Hands: Development of Rules on State-Owned Enterprises in Trade Agreements
By: Minwoo Kim

[PDF]

By Nadia Dridi*

The purpose of this article is to present an overview of the changes in Vietnam’s legal framework with regard to the enforcement of foreign arbitral awards and to emphasize the most urgent issues Vietnam needs to amend or to legislate on.

I. Introduction

Arbitration is a relatively new sphere of the Vietnamese legal system. International arbitration was first incorporated into Vietnam’s positive law in 1995 with the Ordinance on Recognition and Enforcement of Foreign Arbitration Awards dated 14 September 1995. This Ordinance was adopted in response to the ratification of the New York Convention on 12 September 1995.[1] Thereafter, the Ordinance on Commercial Arbitration was issued on 25 February 2003, only to be abrogated by Law No. 54 of 17 June 2010 on Commercial Arbitration, which took effect on 1 January 2011.[2] Divided into eighty-one articles, Law No. 54 regulates national and international arbitration and constitutes a consolidated and a relatively complete corpus for the recourse to arbitration and the enforcement of its awards.

In a bid to set up a clearer legal framework for the enforcement of foreign arbitral awards, the Vietnamese legislature issued in 2014 a Resolution[3] providing guidance on the interpretation of some provisions of the Law on Commercial Arbitration. Another notable effort along these lines was the replacement of the Civil Procedure Code (CPC) 2004[4] by Civil Procedure Code 2015,[5] which came into force on 1 July 2016 and sought to clarify certain provisions of the earlier CPC, as discussed below.

Although Vietnam has made great progress and has shown genuine efforts of alignment with international laws and standards, further efforts are needed to improve the enforceability of foreign awards. This article explores some of the challenges facing Vietnamese enforcement of arbitral awards.

II. The Weak Enforcement of Foreign Awards

The last few years have witnessed great development of the arbitration legal framework in Vietnam, particularly regarding the enforcement of foreign awards. A foreign arbitration award[6] is defined as “an award rendered by foreign arbitration either inside or outside the territory of Vietnam.”[7] Only final arbitral awards that were not set aside by the foreign country’s Court of the seat of arbitration are subject to enforcement in Vietnam.[8] The enforcement of such awards must be recognized and approved by the People’s Court of Vietnam.[9] However, practice has shown that Vietnamese courts are reluctant to enforce arbitration awards.

A. An Overview of the Enforcement of Foreign Awards

A significant disparity persists between the Vietnamese courts’ enforcement of domestic awards and foreign awards. Indeed, Nguyen The Duc Tam and Nguyen Thi Thuy Linh reported in their article disturbing statistics communicated by the Supreme People’s Court.[10] It appears that between 2005 and 2014, fifty-two requests were submitted for recognition and enforcement of foreign arbitral awards. However, the Court accepted only twenty-eight requests, or just over half of those that were submitted.
This issue has also been raised by the Investment and Trade Working Group in a report[11] presented by Mr. Fred Burke[12] in 2015. The report highlighted the alarmingly weak enforcement of international arbitration awards in Vietnam. It also cited the broad provisions of the CPC as one of the main reasons for such weak enforcement. Indeed, Article 439, previously Article 370 in the 2004 CPC, sets out the grounds on which a court shall not recognize or enforce a foreign arbitral award, including inconsistency with the “basic principles of law of the Socialist Republic of Vietnam.”[13]

B. The Broad Interpretation of the Courts

Since no further legislative guidance has been given regarding the interpretation of this provision, inconsistency with basic Vietnamese legal principles has become “one of the bases Vietnamese courts most commonly cite as the reason for declining to recognize a foreign arbitration award,”[14] and, a fortiori, for declining to enforce such an award. The main problem resides in the court’s interpretation of what constitutes the basic principles of Vietnamese law. The courts have complete discretion in determining what can be considered to be against the basic principles of Vietnamese law; such discretion leads to a broad array of outcomes. For instance, in the case Energo-Novus v. Vinatex, the Supreme People’s Court refused to recognize a foreign award on the basis that the Russian arbitration tribunal, by refusing to admit a notarized document submitted by the Vietnamese party, violated a Vietnamese governmental decree.[15] In another case, the Vietnamese courts also considered the failure of the foreign party to register for a foreign contractor permit for construction, in accordance with the requirements of a Vietnamese ministerial circular, to constitute a violation of the basic principles of Vietnamese law.[16]

In most recent cases, the Vietnamese courts gave an even broader definition of the basic principles of Vietnamese law, which lead to a re-examination of the merits of the awards. Indeed, the courts cited provisions of the primary legislation,[17] and sometimes even of the secondary legislation,[18] for declining to enforce a foreign award. Such refusal was based on a revisitation of the merits and their compliance with the Civil Code, the Commercial Law and sometimes even procedural rules of Vietnamese Courts.[19] For example, in Toepfer v. Sao Mai, the Court considered that the failure of the foreign party to mitigate its loss represented a violation of “the basic principles of Vietnamese law”[20] as it was considered a violation of the provisions of the Civil Code.[21]

C. The Re-Examination of the Merits

The analysis of the merits of foreign arbitral awards by Vietnamese courts can be considered, to a certain extent, a violation of the principle of ne bis in idem.[22] Indeed, the International Covenant on Civil and Political Rights provides that no one should be tried twice for the same offence of which he has been either convicted or acquitted.[23]

By recognizing the competence of arbitral institutions, whether national[24] or international,[25] as judicial institutions, Vietnamese tribunals have transferred their judicial competence to duly-established arbitrations. This transfer of competence is supported by language in the Resolution stating that Vietnamese courts shall not examine disputes that fall under an arbitration agreement.[26] Moreover, the legislature strengthened this prohibition by imposing on the Court the responsibility of verifying that parties to a dispute have not entered into an arbitration agreement before considering the dispute.[27]

Consequently, re-opening a trial on a case that has already been resolved by arbitration would mean re-examining the same case within the same jurisdiction. Thus, it would be legitimate to conclude that the court is incompetent to judge such cases. By re-examining the merits of a case that has already been decided by arbitrators, the court is violating the international principle of ne bis in idem.

A revisitation of the merits of a case, combined with other noted misapplications of the Law in Vietnam, generates uncertainty around the enforcement of foreign arbitral awards and contributes to unpredictability in Vietnamese courts. Such unpredictability can only result in driving away investors.

III. The New Guidance on Awards Enforcement

To provide further guidance and clarify the interpretation of the basic principles of Vietnamese law, the Supreme People’s Court issued a Resolution in 2014 requiring Courts to take a more restrictive approach towards awards enforcement.[28]

A. The Definition of “Basic Principles”

The Resolution defines the basic principles of Vietnamese law as ” basic principles on conducts, of which effects are most overriding in respect of the development and implementation of Vietnamese Law.”[29] It also adds the condition that the violation of these principles shall not only represent an inconsistency of the Tribunal with the said provisions in making the award but also a violation of “the interests of the government, (and/or) the legitimate rights and interests of third party or parties.”[30]

This Resolution marks a great effort to correct the interpretation of Vietnamese Courts to prevent Courts from failing to enforce an award on the ground of a violation of “the basic principles of Vietnamese Law.” Nevertheless, this improvement is not yet enough to ensure the consistent enforcement of foreign awards in Vietnam. Even though the definition of the basic principles has been made clearer, it remains vague enough to allow an important number of refusals of enforcement or recognition of foreign awards.

B. The Notion of “Public Policy”

Instead of issuing a new resolution that would further clarify the definition of “basic principles of Vietnamese law,” it seems more appropriate to supplant such notion with the commonly understood notion of “public policy.” In such a case, and in the words of Justice Cardozo, the non-enforcement of an award would require such award to “violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.”[31] Such an approach would considerably limit the cases of non-enforcement of foreign awards since the violation would have to be substantial enough to threaten the “public policy.”

In fact, Article 439 of the CPC represents a bifurcation vis-a-vis the international consensus. Article 439 came as a transposition of Article V of the New York Convention with some alterations, one of which being the reference to basic principles of Vietnamese law as a ground for non-enforcement of foreign awards. Indeed, most other parties to the New York Convention only consider manifest incompatibility with public policy when reviewing the merits of the awards.[32] Consequently, the insertion of the notion of “public policy” would not only guarantee a more effective enforcement, but would also align the Vietnamese legislation with international laws.

III. The Reform Brought by the New CPC

The reform effort did not stop there. The Vietnamese legislature, aware of the foreign award enforcement issue, promulgated a new Civil Procedure Code that came into effect on 1 July 2016 and amended the 2004 CPC.

A. An Effort of Clarification

This new code brings many changes to solve the particular difficulties of foreign awards enforcement in Vietnam. First, the Code modifies its earlier repartition by dedicating a part to the procedure for recognition and enforcement of foreign awards. It also aligns its provisions with the New York Convention through a few modifications. For instance, it adds a terminological clarification by replacing the term “arbitral decision” with “arbitral award.”[33] The 2004 CPC made no distinction between those two terms, using the terms interchangeably, while the Law on Commercial Arbitration draws a clear distinction. Indeed, Article 3 of this Law defines the arbitral decision as a decision of the arbitration tribunal during the dispute resolution process, when an arbitration awards is defined as a decision of the arbitration tribunal resolving the entire dispute and terminating the arbitration process. This adjustment aligns the Code’s definition not only with the Law on Commercial Arbitration but also with international law.

B. The Silence of the Provisions

The new CPC also corrects the absence of a clear time limitation for application for the enforcement of foreign arbitral awards. Since the old code remained silent on this matter, the Court applied the time bar for general civil cases of one year.[34] The new Code solved this problem by determining a clear limitation of three years starting from the date the foreign arbitral award takes effect.[35] This effort must be appreciated since it reveals the legislature’s intent to ensure access to the enforcement right by granting it a longer time period than for ordinary law.

The old Code was also silent regarding the determination and the provision of foreign law, thus leaving it to the entire discretion of the Court. This new Code addressed this matter by providing that the civil party who chose a foreign law to be applied has the obligation to provide its contents.[36] It also addresses of the protocol of how to apply such contents when the parties fail to determine the applicable law.[37] Another notable omission of the old Code concerns the burden of proof. By default, in the absence of provisions, it was placed against the award creditor,[38] which was in total contradiction with the New York Convention.[39] It is henceforth placed against the award debtor.[40]

One of the primary reasons for the weak enforcement of foreign awards in Vietnam is the insufficient regulation that allowed too much room for the Courts’ interpretation. Addressing these issues and legislating on them with clarity lessens the risks of non-enforcement.

C. A Matter of Time

The new code makes the two-step procedure, in the absence of provisions in the old CPC only applicable for parties to an international treaty of which provisions expressly require to first submit the application to the Ministry of Justice. In this procedure, the application is first to be submitted to the Minister of Justice in Step 1 and then to the competent court in Step 2. In the absence of such provisions, creditors can submit their applications directly to the competent Court. Such simplification of the procedure ensures the celerity of the resolution.

The alarming record of non-enforcement cases was also due to the fact that the High Court gave final decisions on recognition or non-recognition of foreign arbitral awards without any higher level of review. The new code allows a reconsideration of the decision by the Supreme People’s Court under a cassation or reopening procedure.[41] Such amendment can only be appreciated but a few additional changes are needed. Granting for the possibility of an appeal is a protection that will improve the chances of arbitral award enforcements. Nevertheless, the cassation or re-opening procedures in Vietnam suspend the enforcement of judgments. Such suspension nullifies one of the main benefits of the recourse to arbitration, namely the celerity of the procedure. The use of arbitration is, most of the time, driven by the fact that it leads to a speedier resolution than a proceeding in Court. The possibility of appealing the recognition or non-recognition decision is a double-edged sword since both of the parties can initiate the appeal. In that case, if the creditor finally obtains the recognition of the award, the debtor’s appeal will extend the procedure. Such consequence can also be a motive for dilatory procedure tactics. More concretely, the debtor can be tempted to protest against the judgment only in order to delay the final recognition decision and thus the enforcement of the arbitral award. The remedy to this issue would be that the appeal of a recognition or a non-recognition award has no suspensive effect, and that dilatory procedures are strictly sanctioned.

D. The Application System

Also of note is the adversarial system of the applications.[42] Their consideration can only be conducted with the presence of both parties or their lawful representatives. Without conducting a retrial, the Court examines the documents but also listens to the opinions of the creditor and the debtor. This also has a dilatory effect with a risk, in practice, of creating an ersatz of a retrial. In order to comply with the New York Convention, numerous country members have opted to an enforcement application upon a simple request to the Court. Since Vietnam has shown great efforts of alignment with international laws, such amendment would be written in the continuity of the improvement and compliance work of the Vietnamese legislature.

* Nadia Dridi holds a Bachelor of Laws from Université Jean Monnet de Saint-Etienne, in France, after also studying at Université Libre de Tunis, in Tunisia. She has a Master’s degree in International Business Law from Université Paris II Panthéon-Assas, a Master’s degree in International Comparative Law from the Royal University of Law and Economics of Phnom Penh (Cambodia) and is currently enrolled in an LLM program in Advanced International Business Litigation at Université Paris-Est (UPEC), in Paris, France.

[1] Ordinance on Recognition and Enforcement of Foreign Arbitral Awards in Vietnam, No. 42-L/CTN (Sept. 14, 1995); see also Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), Jun. 10, 1958, 21 UST 2517.

[2] Luật Trọng tài thương mại [Law on Commercial Arbitration], No: 54-2010-QH12 (June 17, 2010).

[3] Hướng dẫn thi hành một số quy định Luật Trọng tài thương mại [Resolution Guiding the Implementation of Certain Provisions of Law on Commercial Arbitration], No. 01/2014/NQ-HDTP (Mar. 20, 2014).

[4] Bộ Luật Tố Tụng Dân Sự [Civil Procedure Code], No. 24/2004/QH11 (June 15, 2004).

[5] Bộ Luật Tố Tụng Dân Sự [Civil Procedure Code], No. 92/2015/QH13 (Nov. 25 2015).

[6] A “foreign arbitration award” (i.e., a determination on the merits, analogous to a verdict in a court of law) is to be distinguished from an “arbitration decision” (i.e., a determination on the substance of the dispute during the course of the arbitration) which was used in lieu of the term “arbitral award” in the CPC 2004.

[7] Law on Commercial Arbitration, supra note 2 at Art. 3(12).

[8] Civil Procedure Code, supra note 5 at Art. 424 (former Art. 343).

[9] Id. at Art. 425 (former Art. 344).

[10] See Nguyen The Duc Tam and Nguyen Thi Thuy Linh, “Vietnam Case Update: Recognition and Enforcement of Foreign Arbitral Awards (Realogy Group LLC v. Minh Viet Investment JSC)” International Arbitration Asia (Apr. 1, 2016), available at  http://www.internationalarbitrationasia.com/vietnam_recognition_and_enforcement_of_foreign_arbitral_awards

[11] The yearly report of the Investment and Trade Working Group, Vietnam Business Forum, Fred Burke, 2015. Mr. Fred Burke is the co-chairman of the Investment and Trade Working Group and the Managing Partner of Baker McKenzie (HCMC).

[12] Mr. Fred Burke is Managing Partner of Baker McKenzie in Vietnam.

[13] Civil Procedure Code, supra note 5 at Art. 439(8).

[14] The 2015 report of the Investment and Trade Working Group, Vietnam Business Forum, Fred Burke, p.1, 2015.

[15] Energo-Novus Co (Russia) v Vietnam Textile Corporation (Vinatext), Case No. 58, Decision of the Appellate Court of the Supreme People’s Court of Vietnam in Hanoi (May 16, 2000).

[16] Tyco Services Singapore Pte Ltd v. Leighton Contractors (VN) Ltd, Decision No. 02/PTDS, Decision of the Appellate Court of the Supreme People’s Court in Vietnam in Ho Chi Minh City (Jan. 21, 2003).

[17] These include Acts of Parliament or statutes.

[18] This is also called delegated legislation, and consists of the granting of law-making powers to a branch of the government. It is used to add information or make changes to an existing Act of Parliament.

[19] See, e.g., Toepfer v. Sao Mai, Decision of the Appellate Court of the Supreme People’s Court in Vietnam in Hanoi (2011).

[20] Id.

[21] Civil Procedure Code, supra note 5 at Art. 362.

[22] Nebis in idem is a legal principle equivalent to double jeopardy. It signifies that no legal action can be instituted twice for the same cause of action.

[23] International Covenant on Civil and Political Rights (ICCPR), Dec. 16, 1996, S. Treaty Doc. No. 95-20, 6 I.L.M. 368 (1967), 999 U.N.T.S. 171, Art 14(7).

[24] Law on Commercial Arbitration, supra note 2.

[25] See, e.g., New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S. 38 (1959). Vietnam also holds investment bilateral treaties (BIT) with 62 countries to this effect.

[26] Resolution, supra note 3, at Art. 2.

[27] Id.

[28] Resolution No 01/2014/NQ-HDTP Guiding the Implementation of Certain Provisions of Law On Commercial Arbitration, dated 20 March 2014.

[29] Id. at Art 14(2)(dd).

[30] Id.

[31] Loucks v. Stand. Oil Co. of New York, 120 N.E. 198, 200 (N.Y. 1918).

[32] See, e.g., Code de Procédure Civile, [Code of Civil Procedure] [Fr.], at Art. 1514; see also Thalès Air Defence BV v. GIE Euromissile, Cour d’Appel [CA] Paris, 1e ch., sec. C, Nov. 18, 2004, No. 02-19606 (Fr.); A v. R (Arbitration: Enforcement), [2009] 3HKLRD 389; Karaha Bodas Co., LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), 500 F.3d 111 (2d Cir. 2007); Hebei Imp. & Exp. Corp. v Polytek Eng’g Co. Ltd., 2 HKC FAR 111 (2009); Case no. 2207/09.6TBSTB.E1.S1, Supremo Tribunal de Justiça (Port.) (Jan. 20, 2011); Case no. 5961/09.1TVLSB.L1.S1, Supremo Tribunal de Justiça (Mar. 10, 2011).

[33] The New York Convention explicitly mentions the term “arbitral award” and specifies in Article I.2 that “The term “arbitral awards” shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.” New York Convention, supra note 1 at Art. I.2.

[34] Cargill v. Dong Quanfg, Decision No 01/2014/QDST-KDTM of the People’s Court of Long An Province (2014); see also Decision No. 08/2015/QDST-KDTM of the Appellate Court of the Supreme People’s Court in Ho Chi Minh City (2015) (upholding Cargill v. Dong Quanfe).

[35] Civil Procedure Code, supra note 5 at Art. 451.

[36] Civil Procedure Code, supra note 5 at Art. 481-1.

[37] Id.

[38] In the absence of provisions in the old Code of Civil Procedure.

[39] New York Convention, supra note 1 at Art V.1.

[40] Civil Procedure Code, supra note 5 at Art. 459(1).

[41] Id. at 462(6).

[42] Id. at Art. 458.

[PDF]

By Daniel Rietiker*

I. Introduction

Success has become rare in the sensitive field of nuclear arms control. But what happened on 7 July 2017 at the United Nations in New York deserves to be remembered and analyzed because the adoption of a Treaty on the Prohibition of Nuclear Weapons constitutes the end of a nearly 20-year period of stagnation on nuclear arms control. After biological (1972) and chemical weapons (1993), the last category of weapon of mass destruction (WMD) will be banned. However, there is considerable disagreement on the practical impact of the treaty for nuclear arms control, disarmament, and international security. This article contributes to the ongoing debate.

II. The Humanitarian Nature and the Origins of the Treaty

From the author’s point of view, the new treaty is deeply inspired by humanitarian ideals and the conviction that the use of nuclear weapons has disastrous consequences for human beings and the environment. The humanitarian motivation of the treaty derives, inter alia, from the detailed preamble that reflects its object and purpose. To give only one example, preambular paragraph 2 reads as follows:

“The States Parties to this Treaty (…) deeply concerned about the catastrophic humanitarian consequences that would result from any use of nuclear weapons, and recognizing the consequent need to completely eliminate such weapons, which remains the only way to guarantee that nuclear weapons are never used again under any circumstances.”[1]

The new treaty is the third example of a series of universal “humanitarian” arms control instruments aiming at prohibiting entire categories of weapons, following the 1997 Ottawa Convention on anti-personnel mines (also known as the Mine Ban Treaty) and the 2008 Convention on Cluster Munitions (CCM), or Oslo Convention. After conferences on the humanitarian impact of nuclear weapons held in Oslo, Nayarit, and Vienna, two open-ended working groups (OEWG) were held in 2013 and 2016 to develop proposals to activate multilateral nuclear disarmament negotiations. Because of the latter working group, the United Nations General Assembly (UNGA) adopted, on 27 October 2016, a resolution calling on States to launch negotiations on a treaty banning nuclear weapons in 2017. Those negotiations took place in New York from 27 to 31 March and from 15 June to 7 July 2017.

In general, the structure and many clauses of the new treaty resemble much of its two predecessors. This is the case, for example, regarding the clause on victim assistance and environmental remediation, which will be discussed further below. Moreover, the involvement of civil society as well as victims of the use and testing of nuclear weapons in the preparatory phase and the negotiations towards the treaty are factors that had already led to the successful adoption of the Ottawa and Oslo Conventions.[2] Whereas the conclusion of the latter treaties has been favored by humanitarian motivations, in particular the numerous innocent victims, including children and women, caused by anti-personnel mines and clusters munitions until very long after the end of the actual combat actions,[3] it were in particular the moving testimonies of “hibakusha” — survivors of Hiroshima and Nagasaki — which helped civil society to push forward their goal of the prohibition of nuclear weapons based on humanitarian considerations.[4] And similarly to the movement against anti-personnel mines which was awarded the Peace Nobel Prize following the adoption of the Ottawa Convention in 1997,[5] the tireless efforts of the international coalition in favor of the adoption of the new treaty (International Campaign to Abolish Nuclear Weapons, ICAN) has been recognized with the same award in 2017.[6]

Needless to say, however, that the treaty is not yet legally binding with the adoption by 122 States that voted in its favor on July 7, 2017. From 20 September 2017 on,[7] it was open for signature to all States. On the same day, the treaty was signed by 53 States and already ratified by 3 States (Guyana, Holy See and Thailand).[8] It is expected that many States will express their support for the new treaty in the following months and years.[9] The treaty will formally enter into force 90 days after the 50th instrument of ratification, acceptance, approval, or accession has been deposited.[10] It is only with the entry into force that the obligations and rights flowing from the treaty will be legally binding upon States and—to a certain extent—upon individuals, particularly through criminalization imposed by the treaty.[11] It is hard to tell when this number will be reached, but it is likely that the numerous States that have supported the treaty will soon ratify it.

III. Potential Contribution of the New Treaty on Nuclear Arms Control

The new treaty is supposed to have an impact in two main ways. First, it will establish a norm prohibiting nuclear weapons and, second, it is expected to be the point of departure towards a world free of nuclear weapons. In addition, an innovative clause on victims’ assistance and environmental remediation has been included. These aspects of the treaty will be addressed in the present article. They are followed by some observations on the relationship of the new treaty with existing instruments.

A. Prohibition of Nuclear Weapons

Regarding the prohibition of nuclear weapons, Article 1 of the new treaty imposes a set of prohibitions with a view of eliminating the entire category of these weapons.[12] From our point of view, the most important is the ban on use. Surprisingly, the use of nuclear weapons has not explicitly been prohibited before, contrary to other, less destructive weapons. It is noteworthy to stress that, in accordance with Article 1, the signatory States agree “never under any circumstances” to engage in the activities prohibited.[13] In other words, those acts are forbidden not only vis-à-vis other signatory States, but also with respect to non-party States and even non-State actors, such as rebel groups or terrorists. Noteworthy is also letter (g) of Article 1 which prohibits a State allowing any stationing, installation or deployment of any nuclear weapons or other nuclear explosive devices in its territory or at any place under its jurisdiction or control.[14] This clause prohibits, for instance, NATO members to host their allies’ nuclear weapons on their territory.

Article 1 further prohibits threats to use nuclear weapons. Considered together with the ban on possession, this prohibition raises the question whether deterrence-based nuclear policies are prohibited by the new treaty. The negotiations held in New York did not reach a final conclusion on this point but it is undisputed that it was one of the main goals of civil society and States working towards the adoption of the new treaty to delegitimize decades-old policies relying on nuclear weapons.[15]

The entry into force of the Treaty is expected to be a truly unique moment in the history of nuclear weapons control because it will be the first time that a universal prohibition of nuclear weapons will be in place and legally binding. But what is probably even more relevant is the fact that a successful treaty might not only bind the ratifying States, but also third-party States by virtue of customary international law because of the “fundamentally norm-creating character” of the treaty.[16] Customary law is another source of international law—not less important than treaties—and is defined as “evidence of a general practice accepted as law.”[17] In other words, ratifications by States leading to a (quasi) universal treaty might, as relevant State practice, express a customary rule that also binds States that did not ratify the instrument.

According to the International Court of Justice (ICJ), the “States whose interests are specially affected”[18] must participate in the practice to create such a norm. From our point of view, it would be too easy to argue that the particularly interested States are necessarily the States possessing nuclear weapons. On the contrary, it may be argued that States not possessing nuclear weapons have a particular interest in creating the rule because their populations have been facing the risk and threat of nuclear weapons for decades to date.[19] In addition, it is also interesting to mention that the draft conclusions provisionally adopted by the drafting committee of the International Law Commission (ILA) concerning the identification of customary international law do not refer to the requirement of “States whose interests are specifically affected,”[20] contrary to what had initially been proposed by the Special Rapporteur, Michael Wood.[21]

The nuclear-armed States have also not only been completely absent from the negotiations, but certain among them, namely the US, UK and France, even issued a statement on the very day of the adoption of the treaty including the following paragraph:

“France, the United Kingdom and the United States have not taken part in the negotiation of the treaty on the prohibition of nuclear weapons. We do not intend to sign, ratify or ever become party to it. Therefore, there will be no change in the legal obligations on our countries with respect to nuclear weapons. For example, we would not accept any claim that this treaty reflects or in any way contributes to the development of customary international law.”[22]

It can be suggested that this statement aims at preventing the establishment of a customary rule as so-called “persistent objector.” According to this rule, a State which persistently objects to a rule of customary international law during the formative stages of that rule will not be bound by it when it comes into existence.[23] This rule is not undisputed.[24] The ICJ has admitted the concept of persistent objector only rarely, regarding universal customary law in the Anglo-Norwegian Fisheries case.[25] In this case, the question was whether the Norwegian system of delimiting the baselines of its territorial sea was contrary to international law. The Court concluded that, on the basis of the lack of a sufficient general and uniform practice, there was no rule prohibiting the drawing of straight baselines exceeding 10 miles in length across the mouth of bays, as argued by the United Kingdom. Without explicitly referring to the notion of “persistent objector,” the ICJ went on to hold that even if this 10-mile rule “had acquired the authority of a general rule of international law,” it would “appear to be inapplicable as against Norway inasmuch as she has always opposed any attempt to apply it to the Norwegian coast.”[26]

In light of this jurisprudence, it is important to stress that a persistent objector cannot hinder a customary norm to be established, but only avoid the application of the norm on its behalf. Moreover, if the rule to be created concerns a peremptory norm of international law (jus cogens),[27] it is applicable to all States and no State can pretend to be a persistent objector. It is argued here that the use of nuclear weapons can affect such norms and breach fundamental human rights that cannot be derogated from even in situation of emergency, such as the right to life, the prohibition of inhuman and degrading treatment or the prohibition of genocide.[28] The legal effect of the joint statement issued by the USA, UK and France is therefore limited.[29]

B. Nuclear Disarmament

A ban treaty was always considered only a first step towards the end goal of a world free of nuclear weapons.[30] Therefore, it is necessary to allow and encourage States possessing nuclear weapons to join the treaty, as reflected in Article 4, entitled “Towards the total elimination of nuclear weapons.”[31]

According to paragraph 1 of Article 4, a State Party that, after 7 July 2017, owned, possessed or controlled nuclear weapons or other nuclear explosive devices but eliminated its nuclear-weapon program and relevant facilities, prior to the treaty’s entry into force, shall cooperate with the international authority in charge of verifying the irreversible elimination of its nuclear-weapon program, with a view of concluding a safeguard agreement with the International Atomic Energy Agency (IAEA).[32] According to paragraph 2, a State Party that owns, possesses or controls nuclear weapons when it becomes Party to the treaty shall immediately remove them from operational status and destroy them as soon as possible, but not later than a deadline to be determined by the first meeting of States Parties as described in Article 8, in accordance with a legally binding, time-bound plan for the verified and irreversible elimination of its nuclear-weapon program and related facilities.[33] Such a plan has to be submitted to the States Parties or the mentioned international authority. The State must also conclude a safeguards agreement with the IAEA.[34] Finally, paragraph 4 addresses States that have nuclear weapons in their territory that are owned, possessed or controlled by another State.[35] Such States must ensure the prompt removal of those weapons.

In light of the statement made jointly by the USA, UK and France, mentioned above, it is not likely that nuclear-weapon states (NWS) will, in the near future, accept such a clause, which they did not agree upon or negotiate. Even though a signatory State is free to ratify treaties as an expression of its sovereignty,[36] the situation of nuclear disarmament, characterized by stagnation and unfulfilled promises for decades, is somehow special. Thus, the question of whether this joint statement, considering the total absence of States possessing nuclear weapons in the negotiations, runs counter to their duty to negotiate “in good faith” nuclear disarmament under Article VI of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), appears almost natural and would deserve being analyzed more in detail. In any event, and insofar as the new treaty can be considered a measure with a view to implementing Article VI NPT, civil society and States Parties to the new treaty that are also Parties to the NPT are expected to make use of the new treaty within the future NPT Review Conferences and their Preparatory Committees.

C. Victims Assistance and Environmental Remediation

The new treaty contains an unexpected clause on victim assistance and environmental remediation. This provision confirms the humanitarian nature and the victim-centered approach of the new treaty and must be read considering the preambular paragraphs.

Under Article 6 §§ 1 and 2, States are obliged to provide to individuals under their jurisdiction who are affected by the use or testing of nuclear weapons age- and gender-sensitive assistance and to provide adequate steps towards environmental remediation.[37] Several remarks should be noted about the clause on victim assistance and environmental remediation. First, considering the obvious differences between nuclear weapons and cluster munitions, in particular regarding the nature of the weapons and their impact on enemy combatants and civil populations, it might appear surprising that paragraph 1 on victim assistance has been taken almost unchanged from the Oslo Convention.[38] Second, the language of the clause is not limited to future use and testing, but it also covers past use and testing. Third, the primary responsibility for victim assistance and environmental remediation lies with the State on whose territory the use and testing has taken place. This fact is regrettable since many States affected by testing of nuclear weapons might not in a position to fulfill their obligations under Article 6 §§ 1 and 2. The Marshall Islands, for instance, which had been the theater of hundreds of nuclear tests, are hardly capable of providing adequate assistance to their victims and guaranteeing environmental remediation.

Nevertheless, paragraph 3 of Article 6 recalls that the obligations of any other State under international law or bilateral agreements shall remain unaffected.[39] It tempers somewhat the burden imposed primarily on the territorial States. In other words, and to mention just one example, the new treaty would be without prejudice to the reparation that the USA owes to the Marshall Islands based on the “Compact of Free Association” Agreement between the USA and the Marshall Islands concluded in 1983,[40] and in particular its subsidiary Section 177 Agreement establishing a $150 million Nuclear Fund as “a means to address past, present and future consequences of the Nuclear Testing Program.” [41]

The burden imposed on the territorial States is furthermore tempered by Article 7 on international cooperation and assistance. Paragraph 6 of Article 7 recalls that a State Party that has used or tested nuclear weapons shall have a responsibility to provide adequate assistance to affected States Parties, for the purpose of victim assistance and environmental remediation “without affecting any other duty or obligation that it may have under international law.”[42] In other words, a State Party to the new treaty that has used or tested nuclear weapons on the territory of a foreign State remains responsible under international law, in particular regarding the responsibility of States for internationally wrongful acts or for violations of international humanitarian law, human rights law, or environmental law.

D. Relationship with Other Agreements

Article 18 aims to harmonize the new treaty with existing instruments:

“The implementation of this treaty shall not prejudice obligations undertaken by States Parties with regard to existing international agreements, to which they are party, where those obligations are consistent with the treaty.”[43]

This clause gives priority to the new treaty over existing instruments in case of a conflict. For this reason, and considering the NPT as the cornerstone in the nuclear field, certain delegations were opposed to this clause and thus had difficulties to vote in favor of the treaty altogether.[44] The solution nevertheless seems compatible with general international law, in particular the principle of “lex posterior derogat legi anteriori” enshrined in the VCLT according to which a later treaty in principle prevails over an earlier one.[45]

Potential conflicts might arise, in particular, with the NPT and the Comprehensive Nuclear-Test-Ban Treaty (CTBT).[46] For example, whereas the Treaty on the Prohibition of Nuclear Weapons broadly prohibits “test[ing]” nuclear weapons[47] without further defining this expression, the CTBT prohibits “any nuclear weapon test explosion or any other nuclear explosion.”[48] It may be argued that tests not involving an explosion, such as sub-critical tests and computer-simulated tests, would a priori fall undRietiker_ILJ59er the new treaty but not under the CTBT. It might therefore have been worth defining the most important expressions, as it was the case in earlier treaties.[49]

IV. Conclusions

The interpretation and implementation of the nuclear ban treaty is likely to lead to some problems due to the lack of definitions and its coexistence with other treaties. It is obvious and justified that a straightforward treaty and a quick success were, considering the decades of stagnation in nuclear disarmament, more important than a treaty with full legal coherence and accuracy.

Our assessment is nevertheless positive: first, the treaty on prohibition of nuclear weapons has a norm-building nature; second, the treaty creates new momentum for disarmament and is likely to put more pressure on NWS and their allies; and third, the very open and participatory process leading to the treaty is also a victory for democracy and equality among States.

After anti-personnel mines and cluster munitions regimes, it is a welcoming fact that nuclear arms control has also taken a human-centered approach, replacing the security considerations of certain privileged States, even though the practical relevance and implementation of victim assistance and environmental remediation will largely depend on the good faith of all State Parties.

* Daniel Rietiker holds a PhD from the University of Lausanne and a Master’s in International Relations from the Geneva Graduate Institute of International and Development Studies. He teaches international and human rights law at the University of Lausanne and Suffolk University Law School (Boston MA). In 2014, he conducted research at Harvard Law School that he published in Humanization of Arms Control: Paving the Way for a World Free of Nuclear Weapons (2017).

[1] Treaty on the Prohibition of Nuclear Weapons, 7 July 2017 (not yet in force).

[2] See, for the preparatory history of the Ottawa and Oslo Conventions, Daniel Rietiker, Humanization of Arms Control, Paving the Way to a World Free of Nuclear Weapons, 20–27 (2017) and of the new treaty, id. at 259–267, and for a comparison, id. at 283–284.

[3] Id. at p. 33.

[4] See, in this regard, Treaty on the Prohibition of Nuclear Weapons, supra note 1, at preambular paragraph 6: “The States Parties to this Treaty (…) mindful of the unacceptable suffering of and harm caused to the victims of the use of nuclear weapons (hibakusha), as well as of those affected by the testing of nuclear weapons.”

[5] All Nobel Peace Prizes, NobelPrize.org, available at https://www.nobelprize.org/nobel_prizes/peace/laureates/ (last visited Dec. 7, 2017).

[6] Nobel Peace Prize 2017, International Campaign to Abolish Nuclear Weapons, http://www.icanw.org/action/nobel-peace-prize-2017-2/ (last visited Dec. 7, 2017).

[7] Treaty on the Prohibition of Nuclear Weapons, at Art. 13, adopted Jul. 7, 2017, U.N. Doc. A/CONF.229/2017/8, available at http://undocs.org/A/CONF.229/2017/8.

[8] Signature/ratification status of the Treaty on the Prohibition of Nuclear Weapons, International Campaign to Abolish Nuclear Weapons, http://www.icanw.org/status-of-the-treaty-on-the-prohibition-of-nuclear-weapons/ (last visited Dec. 7, 2017).

[9] Even though the signature by States does not bring the treaty into force, it is the moment where the treaty starts to have certain legal effects; in particular, States that have signed are not supposed to run counter the object and purpose of the treaty. Vienna Convention on the Law of Treaties (VCLT), Art. 18, adopted May 23, 1969, 1155 U.N.T.S. 331.

[10] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 14, 15(1).

[11] Id. at Art. 5(2).

[12] See generally John Burroughs, Key Issues in Negotiations for a Nuclear Weapons Prohibition Treaty, 47 ARMS CONTROL TODAY (2017), at 6–13, available at https://www.armscontrol.org/act/2017-06/features/key-issues-negotiations-nuclear-weapons-prohibition-treaty.

[13] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 1.

[14] Id.

[15] See Chairman Ambassador Whyte’s declaration made during a press conference after the treaty’s adoption: “It is true that there was an important discussion about the inclusion of the issue of threat of use. So, it was finally agreed by the conference that Article 1 should include a prohibition to use or to threaten to use nuclear weapons, in the understanding that the threat of use lies at the heart of deterrence and the current security paradigms that the world started after 1945 when the bomb, the nuclear power, was created,” available at https://www.youtube.com/watch?v=lwTEx1jixSE, (time stamp 15:02 onwards).

[16] See North Sea Continental Shelf Cases (Germany v. Denmark; Germany v. Netherlands), Judgment, 1969 I.C.J. Rep. 3 (Feb. 20, 1969), § 72; see also Asylum Case (Colombia v. Peru), Judgment, 1950 I.C.J. Rep. 6, at 277–78 (Nov. 20, 1950).

[17] Statute of the International Court of Justice, at Art. 38, ¶ 1.

[18] North Sea Continental Shelf Cases, supra note 16, at § 74.

[19] See in this sense the dissenting opinion of Judge Shahabuddeen in the 1996 Advisory Opinion of the ICJ on the Legality of the Threat or Use of Nuclear Weapons: “Where what is in issue is the lawfulness of the use of a weapon which could annihilate mankind and so destroy all States, the test of which States are specially affected turns not on the ownership of the weapon, but on the consequences of its use. From this point of view, all states are equally affected, for, like the people who inhabit them, they all have an equal right to exist” (ICJ Reports 1996, p. 226, at ¶ 414). See also Maya Brehm, Whose Security is it Anyway? Towards a Treaty Prohibition of Nuclear Weapons, EUR. J. INT’L L. BLOG (May 31, 2016), available at
https://www.ejiltalk.org/whose-security-is-it-anyway-towards-a-treaty-prohibition-of-nuclear-weapons/.

[20] See Int’l Law Comm’n Rep. on the Work of its Sixty-Eighth Session, U.N. Doc. A/CN.4/L.872, at Draft Conclusion 8[9] (2016).

[21] See Int’l Law Comm’n Rep. on the Work of its Sixty-Sixth Session, U.N. Doc. A/CN.4/672, at §§ 54-59 (2014).

[22] Joint Press Statement from the Permanent Representatives to the United Nations of the United States, United Kingdom, and France Following the Adoption of a Treaty Banning Nuclear Weapons, United States Mission to the United Nations (July 7, 2017), available at https://usun.state.gov/remarks/7892.

[23] Olufemi Elias, Persistent Objector, Max Planck Encyclopedia of Public International Law, at 1, available at http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e1455?prd=EPIL.

[24] Id.

[25] Anglo-Norwegian Fisheries Case (UK v. Norway), Judgment, 1951 I.C.J. Rep. 3, at 131 (Dec. 18, 1951).

[26] Id.

[27] See VCLT, supra note 9, at Art. 53, 64.

[28] See generally Rietiker, supra note 2, at 173–95.

[29] In a statement made a few days before the opening for signature of the new treaty (September 20, 2017), the Ministry of Foreign Affairs of the Russian Federation, another nuclear-weapon state (NWS), declared that it would not sign the treaty stressing that it would be contrary to its national interests; see statement (in Russian) in Kommersant (Sept. 12, 2017), available at https://www.kommersant.ru/doc/3409219.

[30] See, e.g., 2016 Open-ended Working Group (OEWG), § 35, available at
https://documents-dds-ny.un.org/doc/UNDOC/GEN/N16/276/39/PDF/N1627639.pdf?OpenElement.

[31] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 4.

[32] Id. at Art. 4(1).

[33] Id. at Art. 4(2).

[34] Id. at Art. 4(3).

[35] Id. at Art. 4(4).

[36] See VCLT, supra note 9, at Art. 34.

[37] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Arts. 6(1), 6(2).

[38] Convention on Cluster Munitions (CCM), at Art. 5, adopted May 30, 2008, CCM/77.

[39] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 6(3).

[40] The Compact of Free Association, US-Marsh. Is., June 25, 1983, 99 Stat. 1770 (1986). The agreement was amended on April 30, 2003, but Section 177 and its subsidiary agreement remained unchanged.

[41] Agreement between the Government of the United States and the Government of the Marshall Islands for the Implementation of Section 177 of the Compact of Free Association pmbl.

[42] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 7(6).

[43] Id. at Art. 18. This clause is inspired the Arms Trade Treaty (ATT), at Art. 26, adopted Apr. 2, 2013, A/CONF.217/2013/L.3.

[44] One example of such a delegation is Switzerland.

[45] See VCLT, supra note 9, at Arts. 30(3), 30(4).

[46] Comprehensive Nuclear-Test-Ban Treaty (CTBT), adopted Sep. 17, 1996, U.N. Doc. A/50/1027.

[47] Treaty on the Prohibition of Nuclear Weapons, supra note 1, at Art. 1(1)(a).

[48] CTBT, supra note 46, at Art. 1(1).

[49] According to a first assessment by Stuart Maslen, there is no necessary conflict between the new treaty and the NPT (Stuart Maslen, The Relationship of the 2017 Treaty on the Prohibition of Nuclear Weapons with other Agreements: Ambiguity, Complementarity, or Conflict?, EUR. J. INT’L L. BLOG (2017)).

[PDF]

By Arpan Banerjee*

I. Introduction

Thirty-three years after its withdrawal from the Organization for African Unity, the predecessor of the African Union (AU), Morocco was readmitted as a member state of the pan-African regional body on January 30th, 2017. At the 28th AU Summit held in Addis Ababa, 39 members of the AU voted in favor of Moroccan entry, thereby making it the AU’s 55th member. Moroccan entry into the AU, however, has met resistance from certain major AU members, particularly Algeria and South Africa, due to Morocco’s involvement in the existing dispute in Western Sahara.[1] In this context, this piece seeks to analyze the impact of Moroccan entry to the AU on the dispute regarding the statehood of the Sahrawi Arab Democratic Republic (SADR), the contested territory in Western Sahara. It explores the key question of whether admission to the AU, which includes the SADR as a member, amounts to recognition of the SADR as a state and creates obligations on Morocco under international law.

Before discussing the impact of Moroccan entry to the AU on its obligations to SADR and its statehood, a short factual primer may be useful. Since the de-colonization of Western Sahara with the Spanish withdrawal in 1975, Morocco has claimed territorial sovereignty and been involved in an armed conflict with the Polisario Front, a political organization formed in furtherance of Western Sahara’s independence movement against colonial Spain. Upon the request of the United Nations (UN) General Assembly in 1974, the ICJ exercised its advisory jurisdiction to evaluate the Moroccan claim over Western Sahara and the self-determination of the Sahrawi people. Despite the ICJ concluding in favor of a referendum supporting self-determination, Morocco initiated a citizens’ march across the border into Western Sahara followed by the consolidation of armed forces in the territory. In the Madrid Accords of November 1975, Spain ceded administrative authority of Western Sahara to Morocco and Mauritania, in response to which the Polisario Front declared Western Sahara to be an independent state known as the Sahrawi Arab Democratic Republic (SADR). The armed conflict that followed finally ended only in 1992, when the UN brokered a ceasefire and created a Settlement Plan towards a referendum. While the referendum and several other elements of the plan are yet to be implemented, the ceasefire has been respected until this date.

II. Exploring Doctrines of Statehood in International Law

The primary point of contention in the Morocco–Western Sahara conflict is the statehood of the SADR and its recognition under international law. Eighty-four states across the world initially recognized the SADR as a state.[2] While several states subsequently withdrew or froze their recognition, such withdrawals are in violation of international law for those states that are party to the Montevideo Convention of 1933, which states that “recognition is unconditional and irrevocable.”[3] While the UN has classified Western Sahara as a Non-Self-Governing Territory under Chapter XI of the UN Charter,[4] it has been well established and acknowledged by the UN itself that it is not the appropriate authority to recognize states under international law.[5] Further, the doctrinal debate on state recognition in international law is itself inconclusive and provides two divergent theoretical positions. The declarative theory of state recognition interprets statehood as a ‘fact’ without regard to recognition by other states. This position is best embodied in the Montevideo Convention. As per the declarative theory, an entity that fulfils certain factual criteria has a claim to statehood, and subsequent recognition by the international community is merely an acknowledgement of an already existing fact. Therefore, under this normative framework, Moroccan admission to the AU has little effect on the statehood of SADR, which would instead be determined by the Montevideo qualifications: a permanent population, a defined territory, government, and a capacity to enter into relations with other states.[6]

The constitutive theory, on the other hand, maintains that it is the recognition by other states that creates a new state and endows it with legal personality. New states are established in the international community as subjects of international law by the will and consent of other pre-existing states. In this light, one may be tempted to interpret Moroccan entry into the AU as implicit recognition of the SADR. However, this approach is perhaps flawed for several reasons. First, recognition is not normally inferred from the fact that both parties are members of a multilateral treaty such as the UN Charter or the African Union Constitutive Act. Practice reveals that many member-states of the UN are not recognized by other member-states. For example, while Israel and several Arab countries were UN member-states, this did not defeat Arab non-recognition of Israel.[7] Second, there is nothing to specifically suggest that the African Union Constitutive Act supports this doctrine of recognition of states. In the absence of any particular direction provided by the AU under its Constitutive Act, applying the doctrine of implied recognition would perhaps be incorrect. Recognition is predominantly viewed as a key political instrument in the hands of states, and hence the scope of implied recognition must be interpreted narrowly in the context of surrounding circumstances that illustrate an intention to extend recognition.[8] In this context, Morocco’s explicit denial of SADR recognition—despite entry into the AU[9]—is sufficient to elucidate the concerns of applying the theory of implied recognition, as Morocco has displayed a clear intent of non-recognition. Due to these inconsistencies, the theories of state recognition in international law are insufficient for providing any conclusion on the impact of Moroccan entry to the AU on the statehood of the SADR.

III. International Obligations Notwithstanding State Recognition

While international law fails to provide us with a conclusive determination of SADR statehood, this does not mean that Moroccan entry to the AU does not alter the normative status quo. It is true that Moroccan entry does not result in state recognition. However, as the 55th Member of the AU, Morocco has obligations under the African Union Constitutive Act that it owes to each and every member of the multilateral agreement. In other words, after admission to the AU, all obligations under the Constitutive Act are applicable in relations between the new member (Morocco) and each of the existing members (including the SADR), independent of their mutual recognition as states in international law. Thus, at a normative level we see the creation of obligations between Morocco and SADR, as mutual members to the AU, where previously no such obligation existed. It is important to remember that Morocco cannot validly deny its legal obligations to one particular member-state of a multilateral agreement in the absence of specific reservations to the Constitutive Act. Neither can Morocco selectively decide for itself which obligations enumerated in the Act it is bound to discharge, and which it may ignore. Accession to the AU therefore means that Morocco is hereinafter bound by all of the AU principles in its relations with each of the AU members, without prejudice to state recognition.

What is the substantive content of these obligations and principles that are now binding upon Morocco? The answer to this question highlights the true impact of Moroccan entry to the AU. Article 4 of the Constitutive Act enshrines several principles, including sovereign equality, respect for borders of members of the Union, peaceful settlement of conflict amongst members, prohibition of the use or threat of use of force, non-interference in internal affairs, and respect for democratic principles and human rights.[10] Morocco has repeatedly ignored UN resolutions in favor of self-determination and referendum in Western Sahara,[11] and has occupied the territory with clear disregard for democratic principles. Morocco’s relationship with Western Sahara is a classic case of modern day colonialism. Western Sahara holds some of the largest phosphate reserves in the world, provides access to rich fishing waters, and contains vast offshore oil and gas resources. Systematic exploitation of these resources has been the underlying reason behind the Moroccan occupation, which thrives off of their export. In December 2016, the European Court of Justice held that EU–Morocco trade agreements did not extend to resources taken from the SADR.[12] While such efforts are welcome in the broader context of the dispute, they do not impose substantive obligations on Morocco and its exploitation of SADR resources. However, now having joined the AU, Morocco is severely constrained at a normative level, as its economic exploitation, military presence, and refusal to accept a referendum in the SADR all breach its new obligations under the Constitutive Act.

IV. Conclusions

While Moroccan entry to the AU may not reflect recognition of the SADR in light of the inconclusive doctrinal position of international law on state recognition, it imposes a framework of legal obligations under the Constitutive Act that prohibits much of Morocco’s present activities in Western Sahara. In this manner, Moroccan entry to the AU significantly alters the normative status quo in the Western Sahara, and has important legal consequences on the regional conflict.

* Arpan Banerjee is a BA(Hons.) LL.B. candidate enrolled in his 3rd year at NALSAR University of Law, India. His interests include Public International Law and International Criminal Law. He may be reached via LinkedIn at https://www.linkedin.com/in/arpan-banerjee-212970128/.

[1] Ed Crop, Chad’s foreign minister secures top post at African Union, Reuters (Jan. 30, 2017), available at http://in.reuters.com/article/africa-summit/chads-foreign-minister-secures-top-post-at-african-union-idINKBN15E0UD.

[2] SADR Recognitions, University of Santiago de Compostela, available at http://www.usc.es/en/institutos/ceso/RASD_Reconocimientos.html (last visited, Jul. 18, 2017).

[3] Montevideo Convention on the Rights and Duties of States, Art. 6, Dec. 26, 1933, 49 Stat. 3097, 165 L.N.T.S. 19.

[4] Report of the Committee on Information from Non-Self-Governing Territories, U.N. General Assembly on its Eighteenth Session, U.N. G.A.O.R. Supplement No. 14 (A/5514); U.N. Charter, Arts. 73–74.

[5] See U.N. Secretary-General, Letter dated 8th Mar. 1950 from the Secretary-General to the President of the Security Council transmitting a memorandum on the legal aspects of the problem of representation in the U.N., U.N. Doc. S/1466 (Mar. 19, 1950).

[6] Montevideo Convention, supra note 3, at Art. 1.

[7] See Malcolm N. Shaw, International Law 464 (6th ed. 2008).

[8] See id.

[9] See Youssef Igrouane, Morocco Will not Recognize Self-Proclaimed SADR Despite Return to AU, Morocco World News (Feb. 15, 2017), available at https://www.moroccoworldnews.com/2017/02/208366/morocco-will-not-recognize-self-proclaimed-sadr-despite-return-to-au/.

[10] Constitutive Act of the African Union, Art. 4, May 26, 2001, OAU Doc. CAB/LEG/23.15.

[11] G.A. Res. A/Res./34/37, Question of Western Sahara (Nov. 21, 1979).

[12] See Dominic Dudley, European Court Dismisses Morocco’s Claim to Western Sahara, Throwing EU Trade Deal into Doubt, Forbes (Dec. 21, 2016), available at https://www.forbes.com/sites/dominicdudley/2016/12/21/european-court-dismisses-moroccos-claim-to-western-sahara-throwing-eu-trade-deal-into-doubt/#355642e54493.

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By Hayley Evans*

I. Territorial Scope of the European Convention on Human Rights

The scope of Article 1 of the European Convention on Human Rights (“ECHR”) has been contested almost since the issuance of the article itself, due in large part to its ambiguous use of the word “jurisdiction.” Article 1 extends the “rights and freedoms”[1] defined in Section 1 of the ECHR to “everyone within the . . . jurisdiction” of the state parties to the Convention. But what exactly constitutes a Contracting State’s jurisdiction vis-à-vis Article 1? One possible response is that the Contracting States’ general duty to secure the rights and freedoms defined in Section 1 of the Convention—including, inter alia, the right to life, the prohibition of torture, the prohibition of slavery and forced labor, and the right to liberty and security—is cabined by spatial notions of territoriality. Another possible response is that the importance of protecting those fundamental human rights requires a broader conception of “jurisdiction,” whereby the European Court of Human Rights (“ECtHR”) could hold a state responsible for its link to the use of force resulting in death, no matter if that use of force itself is the only jurisdictional link.

The friction between merely territorial conceptions of jurisdiction and more extensive, extraterritorial conceptions came to the fore in the early twenty-first century, as a result of the Iraq War. During and after the war, several families of victims killed in the war brought suit against various state parties for contravention of the ECHR under the latter conception of “jurisdiction.”[2] In the recent decade or so, European case law has gradually expanded the scope of “jurisdiction” extraterritorially, until the Court of Appeal of England and Wales unanimously reversed that trend in Al-Saadoon & Ors v. Secretary of State for Defence.

The Al-Saadoon case is the result of a number of civil law claims arising from British military involvement in Iraq between 2003 and 2009. These claims involved allegations of human right violations, including ill-treatment, unlawful detention, and even unlawful killing of Iraqi civilians by British soldiers. In Al-Saadoon, Lord Justice Lloyd Jones of the Court of Appeal affirmed much of Justice Leggatt’s below opinion,[3] save for one exception: that Al-Skeini and Others v. United Kingdom had extended extraterritorial jurisdiction of ECHR Article 1 to uses of force, notwithstanding where that force is exercised.[4] In so stating, Lord Justice Lloyd Jones narrowed Justice Leggatt’s interpretation of Al-Skeini, limiting the notion of extraterritorial jurisdiction to what Al-Skeini initially described it to be: a personal jurisdiction exception to the primarily territorial application of Article 1.[5] Lord Justice Lloyd Jones further stated that if the principle of extraterritorial jurisdiction advanced in Al-Skeini were meant to extend to the state’s extraterritorial use of lethal force alone, without requiring a greater degree of power and control, the ECtHR itself could so hold.[6]

The Court of Appeal of England and Wales ultimately made the correct choice in cabining the U.K. High Court’s broad extraterritorial application of the ECHR. This note will argue that the Court of Appeal was correct in its approach for three reasons, the first two of which are substantive, and the third of which is procedural. First, the Court of Appeal’s approach to extraterritorial jurisdiction comports the most with the approach taken by Bankovic and Others v. Belgium and Others, previous case law, and the travaux préparatoires of the ECHR. Second, the Court of Appeal’s approach allows for a more predictable and less politicized application of extraterritorial jurisdiction, as it eliminates the possibility that the U.K. will extend its extraterritorial jurisdiction in ways incommensurate with the ECtHR’s extension of such jurisdiction. Third, even if the U.K. High Court’s approach is the more egalitarian of the two, it is not the Senior Courts of England and Wales’ place to extend the principles of the current ECtHR jurisprudence in such a manner.

II. Background for Al-Saadoon & Ors v. Secretary of State for Defence

The first highly important case to the determination of Article 1 jurisdiction is Bankovic and Others v. Belgium and Others, decided in December of 2001. Here, the ECtHR determined that the ECHR did not apply to a NATO bombing of a Federal Republic of Yugoslavia radio-television building during the Kosovo crisis of April 1999,[7] as there was no jurisdictional link between the bombing victims and the Contracting States.[8] In so holding, the ECtHR determined that jurisdiction for the purposes of the ECHR is largely territorial,[9] and that the Convention operates in an “essentially regional context and notably in the legal space (espace juridique) of the Contracting States.”[10] This determination stemmed not only from the ordinary meaning of “jurisdiction,”[11] but also from the travaux préparatoires and State practice in applying the Convention.[12] The Court further concluded that, as applied to the facts of the case, with no “jurisdictional link” between the victims of extraterritorial acts and the respondent States, there is no jurisdiction vis-à-vis Article 1 of the ECHR.[13] In order for the ECHR to have any exceptional extraterritorial application, the bases of jurisdiction must be determined on a case-by-case basis[14] “when the respondent State, through the effective control of the relevant territory and its inhabitants abroad as a consequence of military occupation or through the consent, invitation or acquiescence of the Government of that territory, exercises all or some of the public powers normally to be exercised by that Government.”[15] Bankovic thus set forth a two-pronged exception to the primarily territorial jurisdiction of the ECHR: a Contracting State has extraterritorial jurisdiction where it has both (a) effective control of a territory and (b) exercises all or some of the public powers normally exercised by that territory’s government.

Several ECtHR cases after Bankovic slowly expanded the Court’s construction of the ECHR’s jurisdictional reach, extending the regional scope of the ECHR and the primarily spatial Bankovic model to cover instances where State agents exercised authority over third parties extraterritorially.[16] This broadening of the extraterritorial exception meant that “a State may . . . be held accountable for violation of the Convention rights and freedoms of persons who are in the territory of another State but who are found to be under the former State’s control through its agents operating—whether lawfully or unlawfully—in the latter State.”[17] However, in no case did the Court explicitly abandon Bankovic’s territorial model.[18]

The latest influential ECtHR decision regarding extraterritorial jurisdiction came in 2011, in the case of Al-Skeini and Others v. United Kingdom. In contrast to the decision of the U.K. House of Lords in Al-Skeini, the ECtHR found that all six applicants—Iraqis who were killed by U.K. troops—fell within the U.K.’s ECHR jurisdiction.[19] In so doing, the ECtHR affirmed Bankovic’s primarily spatial model, with the exception of “effective control,” but also further expanded the “State agent authority” variation on a model of personal jurisdiction. This model dictates that a Contracting State has jurisdiction “when someone was within the control and authority of agents of the Contracting State, even outside the espace juridique of the Council of Europe, and whether or not the host State consented to the exercise of control and authority on his soil.”[20] This “State agent authority” model is a factual test, “to be determined with regard to the circumstances of the particular act or omission of the State agents.”[21] In the sense that Al-Skeini applies a limited version of the “State agent authority” model of jurisdiction that Bankovic never endorsed, the ECtHR rejects in Al-Skeini the idea that Convention rights and freedoms constitute an indivisible package that cannot be “divided and tailored.”[22] Through enabling Article 1 of the ECHR to apply—in other words, imposing ECHR jurisdiction—whenever a Contracting State exercises control and authority over an individual through an agent, but not extending the application of other Convention rights through this same agent-based inquiry, Al-Skeini allows Convention Rights to be “divided and tailored” on a fact-specific basis.

After the Al-Skeini decision was issued, the U.K. implemented a version of the “State agent authority” model of extraterritorial jurisdiction,[23] and the ECtHR further solidified the principles set out in Al-Skeini.[24]

III. Comparison of U.K. High Court of Justice and Court of Appeal Approaches to the Exceptional Nature of Extraterritorial Jurisdiction

Al-Saadoon & Ors v. Secretary of State for Defence, [2016] EWCA Civ 811, is a case with facts analogous to many of those previously discussed: family members of victims allegedly abused by British forces during the Iraq War brought public law claims under the ECHR. Originally heard in the U.K. High Court of Justice in October of 2014 and decided in March of 2015 by Justice Leggatt, the case was later appealed to the U.K. Court of Appeal and decided by Lord Justice Lloyd Jones in September of 2016.

A. Relationship to Al-Skeini

In Al-Saadoon, both the U.K. High Court and the Court of Appeal attempted to preserve the Bankovic default spatial model of jurisdiction,[25] and to parse out the vague limitation on the principle of “State agent authority” as articulated in Al-Skeini.[26] While the U.K. High Court determined that the effect of Al-Skeini was to extend Article 1 extraterritorial jurisdiction in such a way that “whenever and wherever a state which is a contracting party to the Convention uses physical force it must do so in a way that does not violate Convention rights,”[27] the Court of Appeal cabined the exception to territorial jurisdiction in interpreting the ECtHR’s intent in Al-Skeini to “require that there be an element of control of the individual prior to the use of lethal force.”[28] In other words, while the U.K. High Court found that jurisdiction could be extended to situations where physical power and control was exercised over a non-detainee through the use of physical force alone,[29] the U.K. Court of Appeal limited jurisdiction for the purposes of Article 1 to instances where there exists “a greater degree of power and control than that represented by the use of lethal force . . . alone.”[30]

Acknowledging that his Court of Appeal holding would require U.K. courts to weigh different types and degrees of power and control to determine which conduct falls under Article 1’s ambit and which does not, Lord Justice Lloyd Jones considered that balancing exercise an unavoidable consequence of Al-Skeini.[31]

B. Practical Effects on the U.K. in Adopting Each Approach

If the Court of Appeal were to have adopted the U.K. High Court’s approach in Al-Saadoon, three undesirable effects would have occurred. First, the extensive reach of extraterritorial jurisdiction could impinge on military operations in the field,[32] making more activities of armed forces subject to the ECHR. Even Justice Leggatt of the U.K. High Court admits that “there are strong reasons of policy for seeking to interpret the territorial scope of the Convention in a way which limits the extent to which it impinges on military operations in the field, particularly where actual fighting is involved.”[33] Second, adopting this approach to extraterritorial jurisdiction would mean that Bankovic had been wrongly decided, as the NATO bombing that was determined to be outside the jurisdictional scope of the ECHR would need to be reinterpreted to give rise to ECHR jurisdiction, albeit extraterritorial.[34] Overruling Bankovic would even further complicate the inquiry into the extraterritorial application of the ECHR. Finally, adopting the U.K. High Court’s approach to extraterritorial jurisdiction would result in the undesirable effect of inducing a floodgate of litigation to the courts, whereby “anyone adversely affected by an act imputable to a Contracting State, wherever in the world that act may have been committed or its consequences felt, is thereby brought within the jurisdiction of that State for the purposes of [A]rticle 1 of the Convention.”[35]

Conversely, the approach the Court of Appeal adopted in Al-Saadoon is more desirable for three reasons. First, the Court of Appeal’s approach is consistent with case law and the travaux préparatoires of the ECHR itself. Through its approach, the Court of Appeal is acting in accordance with a long line of precedent, ranging from Bankovic to Hassan v. The United Kingdom.[36] The Court of Appeal is also acting in accordance with the original intent of the ECHR: that the notion of jurisdiction be essentially territorial.[37]

Second, the Court of Appeal’s approach eliminates any concerns based on the security dilemmas potentially created by the U.K. extending its own extraterritorial jurisdiction in ways incommensurate with the extension of such principles by the ECtHR. In keeping itself in line with Article 1’s ambit as interpreted by the ECtHR itself, the U.K. will remain consistent with the requirements of other Contracting States vis-à-vis extraterritorial jurisdiction. Thus, the U.K. need not be concerned about the possibility that other Contracting States might not decide to extend Al-Skeini principles of extraterritorial jurisdiction as far as the U.K. High Court had attempted to extend them—to situations where the only jurisdictional link was the use of lethal force. In addition, U.K. military forces need not limit their activity in the field in ways that other Contracting States are not required. With the U.K. Court of Appeal’s approach, Article 1 extraterritorial jurisdiction is more stable and predictable, due to the requirement of a greater jurisdictional link between the U.K. and the relevant territory and its inhabitants abroad than the use of physical force alone.[38]

Third, the Court of Appeal’s approach is not irreversible; if the ECtHR would like to extend extraterritorial jurisdiction to the breadth advocated by Justice Leggatt in the U.K. High Court, it is able to do so.[39] In addition, it does not make sense that an ex post analysis of the scope of jurisdiction should err on the side of over-inclusivity, unless that analysis is conducted by the ECtHR itself. Thus, the ECtHR can expand the exceptional nature of extraterritorial jurisdiction for all Contracting States if it so chooses, but the U.K. courts should not construe Article 1 “as reaching any further than the existing Strasbourg jurisprudence clearly shows it to reach.”[40]

IV. Conclusion

Ultimately, it is still controversial as to whether the ECHR applies to the use of force against Iraqi civilians who were not in the custody of British forces. Although it had been predicted that Al-Saadoon might head first to the U.K. Supreme Court and then to the ECtHR itself,[41] the case has still not been appealed. However, the reasons enumerated above suggest that the U.K. Court of Appeal’s limited-scope approach to the extraterritorial jurisdiction of ECHR Article 1 is superior to the approach taken by the U.K. High Court.

Although it could be argued that the U.K. should extend the jurisdictional principle first iterated in Al-Skeini in a way that first and foremost comports with the idea of the universality of human rights—an approach endorsed by the U.K. High Court—drawing the jurisdictional line that far from ECtHR precedent simply comes at too high a cost. If the U.K. were to adopt the approach endorsed by Justice Leggatt, it would limit its military activities in the field in ways that other Contracting States do not, creating an unnecessary security dilemma. Instead, with the approach endorsed by Lord Justice Lloyd Jones, the jurisdictional line extends just far enough, maintaining the spirit of the “effective control” test initially endorsed by both Bankovic and Al-Skeini, and still holding accountable a large number of extraterritorial violators of human rights.

* Hayley Evans is a J.D. Candidate at Harvard Law School, 2019.

[1] European Convention on Human Rights, art. 1, Nov. 4, 1950, EUR. TS. Nos. 5, 213 U.N.T.S. 221 [hereinafter ECHR].

[2] See, e.g., Bankovic and Others v. Belgium and Others, Appl No 52207/99 (ECtHR, 12 December 2001) [hereinafter Bankovic]; Issa and Others v. Turkey, Appl No 31821/96 (ECtHR, 16 November 2004) [hereinafter Issa v. Turkey]; Al-Skeini and Others v. United Kingdom, App No 55721/07 (ECtHR, 7 July 2011) [hereinafter Al-Skeini]; Al-Jedda v. United Kingdom, Appl No. 27021/08 (ECtHR, 7 July 2011) [hereinafter Al-Jedda].

[3] See, e.g. Al-Saadoon & Ors v. Secretary of State for Defence, [2016] EWCA Civ 811 [hereinafter Al-Saadoon] at para. 26–28 (reaffirming that a state’s jurisdictional competency under Article 1 is primarily territorial).

[4] Id. at par. 69.

[5] See Al-Skeini, supra note 2 at para. 74.

[6] See Al-Saadoon, supra note 3 at para. 69.

[7] The ECtHR did not actually adjudicate Bankovic, supra note 2, on the merits; rather, it dismissed Bankovic for lack of jurisdiction under the ECHR.

[8] See Bankovic, supra note 2 at para. 82.

[9] See id. at para. 61.

[10] Id. at para. 80.

[11] Id. at para. 61.

[12] Id. at para. 63.

[13] See id. at para. 82.

[14] See id. at para. 61.

[15] Id. at para. 71.

[16] See Issa v. Turkey, supra note 2 at para. 71.

[17] Id. at para. 71.

[18] Cedric Ryngaert, Clarifying the Extraterritorial Application of the European Convention on Human Rights, 28 Merkourious Utrecht J. of Int’l & Eur. Law 57, 58 (2012).

[19] Al-Skeini, supra note 2 at para. 149.

[20] Id. at para. 79.

[21] Id. at para. 129.

[22] Id. at para. 137. Compare Bankovic, supra note 2 at para. 75.

[23] See Smith and others v. The Ministry of Defence, [2013] UKSC 41.

[24] See, e.g., Hassan v. The United Kingdom, Appl 29750/09 (ECtHR, 16 September 2014) [hereinafter Hassan]; Jaloud v. The Netherlands, Appl 47708/08 (ECtHR, 20 November 2014).

[25] Cf. Al-Saadoon, supra note 3 at paras. 19, 54.

[26] See Marko Milanovic, English Court of Appeal Decides Al-Saadoon Case on the ECHR’s Application Extraterritorially and in Armed Conflict, EJIL: Talk (Sept. 14, 2016), https://www.ejiltalk.org/english-court-of-appeal-decides-al-saadoon-case-on-the-echrs-application-extraterritorially-and-in-armed-conflict/.

[27] See Al-Saadoon, supra note 2 at para. 69.

[28] Id.

[29] See Al-Saadoon & Ors. v. Secretary of State for Defence, [2015] EWHC 715 (Admin) at para. 95 (“I find it impossible to say that shooting someone dead does not involve the exercise of physical power and control over that person.”).

[30] See Al-Saadoon, supra note 3 at para. 69.

[31] Id. at para. 71.

[32] Id. at para. 73.

[33] Al-Saadoon & Ors. v. Secretary of State for Defence, supra note 29 at para. 106.

[34] See id. at para. 94.

[35] See id. at para. 104 (citing Bankovic, supra note 2 at para.75).

[36] See supra note 24.

[37] See Al-Saadoon, supra note 3 at para. 13 (explaining that the expert intragovernmental committee to the European Convention on Human Rights had replaced a reference to “all persons residing within their territories” with a reference to persons “within their jurisdiction.”

[38] Cf. Al-Saadoon, supra note 3 at para. 23.

[39] See Al-Saadoon, supra note 3 at para. 70.

[40] Id.

[41] Clarifying the Extraterritorial Application of the European Convention on Human Rights, supra note 18.

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By Christian L. Neufeldt*

I. Introduction

The power to tax is one the highest privileges of sovereignty. Therefore, one might ask how the World Trade Organization (WTO), a supranational body, far from relying on a solidarity like in the EU or even the US, might dare to rule on direct taxes. Yet, membership in the WTO is voluntary. Today’s globalized world grants more wealth to all states and their citizens than any other period in human history.[1] The foundation of this freedom, wealth, and of those opportunities is efficient world-wide trade. If a WTO member state abuses its power to levy direct taxes in order to put obstacles in the way of trade, the WTO has not only the right, but the duty to level the playing field between its members.

A. Motivation

Efficient world-wide trade in a globalized world requires that all economic actors are subject to the same rules and merits the least obstacles possible. The WTO is the most important multilateral organization regulating international trade.[2] Its objective is to “provide[…] a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all.”[3] Its main goals, namely raising global living-standards by promoting the exchange of goods, services, and capital, are the same as those of international taxation.[4] Therefore, the WTO treaties contain different regulations regarding indirect taxation. Direct taxation, on the other hand, is officially only regulated by the Agreement on Subsidies and Countervailing Measures (SCM Agreement). Yet, one might argue that direct taxes have an impact on trade that is similar to the obstacles the WTO’s main treaties are meant to reduce. The motivation of this study is to inquire whether the WTO is authorized to rule on direct taxation and, if so, if this is desirable from an economic point of view.

B. Research Question

The question as to whether direct taxes should be exempt from WTO rules is twofold. First, direct taxes are only within the WTO’s jurisdiction if they are part of the WTO treaties. If the principles of international law do not allow an interpretation of the WTO treaties which gives the WTO jurisdiction over direct tax matters, economic considerations cannot give it jurisdiction in this area. However, if the WTO cannot achieve its goals without at least partial control over direct taxation, direct taxes cannot reasonably be entirely exempt from WTO rules. Still, a special jurisdiction granted by the secondary treaties would leave the question of whether the WTO has broader general jurisdiction in the field of direct taxation derived through its main treaties.

Second, if the treaties do permit the WTO to rule on direct taxes from the legal perspective, the question arises whether this should be recommended from an economic point of view. The WTO promotes trade between its members. If the impact of direct taxes is restricted to the members’ national economies, international trade would not benefit from their inclusion under WTO rules. Moreover, if it is more reasonable to let other supranational bodies preside over questions of direct taxation, the WTO might be wise to abstain from doing so.

C. Delimitation

In this study, I am going to presume the legitimacy of the WTO and its positive impact on world economics. While the WTO has been criticized since its establishment,[5] arguing its legitimacy per se would go beyond the range of this paper. Furthermore, if the WTO does not have a positive impact on world economics, its rules would have to be revised in their entirety. Answers to questions of whether those revised rules should regulate direct taxation could only be speculative. Thus, in this study I will assume that the WTO has a positive impact on world economics.

As shown above, this study focuses on direct taxes and their interference with WTO rules. Therefore, I will not discuss the interference between WTO rules and indirect taxes. Furthermore, other supranational regulations, e.g. directives and regulations of the European Union (EU), are relevant to this study only insofar as they might regulate direct tax measures instead of the WTO. Finally, while tax treaties are an important part of the reality of modern tax planning, they are not in the focus of this study.

The official languages of the WTO are English, French, and Spanish.[6] In this study, I exclusively rely on the English version of the WTO treaties.

D. Methodology

To determine whether direct taxes should be exempt from WTO rules, I will determine (1) whether they can be included at all, (2) how they may interfere with each other, and (3) whether giving the WTO the means to regulate them is economically desirable.

First, I will focus on the question of whether and to what extent the WTO treaties allow the WTO to regulate direct tax laws. I will start with the wording of the WTO treaties and how they are interpreted by legal scholars. Then, I will show that the WTO and its member states recognize the WTO’s jurisdiction on direct taxation in settlements before the Dispute Settlement Body (DSB).

Second, I will show how WTO rules and direct tax laws can interfere and how they have interfered in the past. I will point out the different ways such interference can occur, as well as discuss the most important settlements before the DSB regarding direct taxation.

Third, I will focus on the economic implications of my research question. Hereby, I will start by investigating whether inclusion of direct taxation into WTO regulations would have a positive impact on the WTO’s goals from an economic point of view. I will do so by referencing scholarly opinions as well as arguments brought forth during settlements before the DSB. I will also engage with scholarly opinions on whether the WTO is the best supranational body to rule on this topic.

Finally, I will make a conclusion on whether these arguments warrant the WTO to regulate direct taxes or whether direct taxation should be totally exempted from WTO rules.

II. Benchmark

In theory, WTO rules should not interfere with direct taxation. The WTO’s main objectives are to promote trade between its members, to administer and monitor the application of its rules, and to function as a dispute settlement platform.[7] The WTO treaties, mainly the General Agreement on Tariffs and Trade (GATT), the Agreement on Trade-Related Investment Measures (TRIMS) the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the General Agreement on Trade in Services (GATS), give the WTO a means to these ends.[8] Direct taxes give the levying states the means to promote their own goals. Nowadays, these include not only the protection of their citizens from domestic and international violence, but also general and public welfare and other similar goals. Furthermore, unlike indirect taxes, direct taxes are not directly levied on goods and services, with which the WTO is directly concerned.

Direct taxes might have a prohibitive effect on intrastate activities that lawmakers see as undesirable. However, the taxes’ effects are limited to activities undertaken inside a state’s borders or by that state’s citizens. Thus, the levying of intrastate direct taxes and the WTO’s rules regarding interstate commerce should not interfere.

Additionally, the right to levy taxes is among the highest privileges of government and a symbol of sovereignty. Thus, the right to rule on direct taxes should remain exclusively with the states and should be totally exempted from WTO rules.

Finally, decentralization tends to increase efficiency.[9] Therefore, even if direct taxes are regulated on a supranational level, this should be done as locally as possible rather than by the WTO on a global level.

III. Legal background

A. Principles

At the foundation of the WTO are the principles of non-discrimination, predictability and stability.[10] The cornerstones of the non-discrimination principle are the Most Favored Nation (MFN) treatment principle and the National Treatment (NT) principle.[11] The MFN treatment principle of GATT Article I, GATS Article II, and TRIPS Article 4 require a member state of the WTO to grant all other member states the same concessions.[12] While there is no general MFN principle in international taxation, the MFN principle applies where tax treaties effectively create a diversion for international capital flows.[13]

The NT principle of GATT Articles III, GATS Article XVII, and TRIPS Article 3 prevent WTO members from treating nationals of other member states worse than their own nationals.[14] Thus, just like the MFN principle prohibits international taxation to discriminate between the cash-flow from different WTO member states, the NT principle prevents member states from discriminating between their citizens and other members’ citizens by means of internal taxation.[15]

B. General Agreement on Tariffs and Trade

The GATT is not merely one of the main WTO treaties.[16] It even predates the WTO and constitutes the foundation on which the WTO was built.[17] Initially, direct taxes were not considered to be regulated by the GATT.[18] This was in accordance with the signatory states’ intention to limit the GATT application to indirect taxes.[19] Yet, direct taxes can have a severe impact on international trade. Thus, the applicability of the GATT on direct taxes has been highly controversial.[20]

The language of the treaties alone is insufficient to interpret them. Like other international treaties, the WTO treaties are interpreted according to the principles laid down in Arts. 31–32 of the Vienna Convention on the Law of Treaties.[21] Therefore, the WTO treaties must in general be interpreted by looking first at their text to evaluate what the signing parties meant to say.[22] Hereby, the interpreter has to avoid looking beyond the language of the tests itself and considering the “object and purpose” of the treaties.[23] Rather, he has to analyze the “expressed intent,” that is, he must read the treaty as a third country interested in joining would interpret it without further consultation with the signatory states.[24] Yet, when this is insufficient to provide an answer, for example because the treaty does not address the issue, the object and context of the treaty are used in addition to its text.[25] Originally, this lead to a rather restrictive interpretation. Since direct taxes do not apply directly to goods, they were initially excluded from the range of Articles I, III GATT according to a more textualist approach.[26] In contrast, the modern interpretation of the GATT includes direct taxes into the range of Article III (and subsequently Article I).[27] This interpretation is based on GATT Article III para. 2, which prohibits the member states from applying higher taxes or other internal charges on imported products than on “like” internal products. This interpretation of Article III would suggest that the signatory states had taxes in mind when drafting the GATT. That they could envision the extent to which indirect, and direct, taxes could influence the trade between member states, is less certain.[28] It seems likely that the member states did not want to exclude direct taxes from the GATT, but rather that they merely did not think of them as being important to the WTO’s goals. Additionally, the WTO’s power to rule on disputes concerning direct taxation is accepted as part of the GATT at least since the decision on the dispute between the European Community (EC) and the USA regarding the USA’s Foreign Sales Corporation (FSC) Scheme.[29] This decision was highly controversial between the EC and the USA. Yet, the USA appealed only the decision, not the DSB’s broader jurisdiction on direct tax matters. Thereby, it acknowledged the DSB’s jurisdiction over direct tax matters. The DSB can only have jurisdiction in this field if it is within the scope of the WTO’s power. Initial doubts notwithstanding, the GATT now does give the WTO the power to rule on direct tax questions.

C. Agreement on Subsidies and Countervailing Measures

The SCM Agreement on the other hand sets limits on how WTO member states may subsidize products and how member states may counteract subsidies by other members.[30] The SCM Agreement acknowledges direct taxes in footnote 59 and gives several examples in Annex I. Thus, this Agreement gives the WTO the legal power to rule on direct tax matters.[31]

D. General Agreement on Trade in Services

The GATT and SCM Agreement, as well as most other WTO treaties exclusively deal with goods. To fill the resulting gap and regulate the trade of services, the WTO members signed the GATS. In contrast to the other WTO treaties, the GATS excludes direct taxes in several cases from its scope in Article XIV.[32] These exemptions, however, imply that direction taxes are otherwise included.[33] Additionally, the MFN and NT principle are of paramount importance in the GATS because they acknowledge not only the origin of the service, but also of the supplier.[34] Even if the NT is according to GATS Article XXII not applicable to disputes regarding treaties meant to avoid double taxation, it still generally applies to services under the GATS.[35] Therefore, the GATS excludes certain direct tax measures from WTO rules, yet in general allows the WTO to rule on them.

E. Conclusion

From the legal point of view, direct taxes may be included in WTO rules. At its origin, the member states did not intend the GATT or the WTO to rule on direct taxes. Yet, over time the WTO members accepted the WTO’s jurisdiction on this matter. They showed this not only by acknowledging the WTO’s jurisdiction on direct tax matters, but also by explicitly mentioning direct taxes in the SCM Agreement. Furthermore, the very foundation of the WTO treaties is the non-discrimination principle. As shown above, direct tax measures can lead to legal discrimination. Thus, from the strictly legal point of view, the prevention of discrimination speaks for the inclusion of direct taxation into WTO rules. The GATS excludes certain areas of direct taxation from WTO jurisdiction, but generally allows the WTO to rule on direct tax matters to advance its goals of efficient world-wide trade. Finally, within the scope of the SCM Agreement, the member states explicitly gave the WTO the legal power to rule on direct taxes.

IV. Interferences

As shown above, the range governed by WTO rules has continuously expanded. This led to more possible interferences between these rules and direct taxation laws inter alia. Some of these interferences have already led to disputes before the DSB. However, the DSB did not come to a decision in all of these cases, and some possible interferences have not yet been brought before the DSB.

A. Promotion of Exports

Direct taxes can interfere with the NT principle by aiding exports. The disputes between the US and the EC regarding the FSC and Extraterritorial Income (ETI) schemes are considered to have the furthest-reaching implications.[36] Initially, the US exempted the income generated by sale and lease of “export property” from taxation if significant parts of the transaction happened outside of the United States.[37] The legal basis was the “Deficit Reduction Act”, which set the rules for FSCs. “Export property” comprised products that an FSC held for sale or lease, that were produced in the US by a company other than the FSC, that were intended to be used or re-sold outside of the US, and that did not consist of more than 50% “foreign content”.[38] In combination with specific pricing rules regarding FSCs, the exemptions lead to a tax reduction of 15–30%.[39] The US perceived this tax advantage to be necessary for two reasons. First, unlike the European “territorial” system, under the American “world-wide” system, the residents’ world-wide income is taxed.[40] Second, unlike the EC, the US did not and does not levy a value-added tax (VAT) on imports.[41] From the US’s point of view, the rules regarding FSCs were only meant to exclude (some) foreign economic activities and to compensate for these disadvantages.[42] The WTO agreed that the US does not have to tax world-wide income. Yet, doing so in general, while excluding some economic activity, effectively creates a subsidy for that activity.[43] Therefore, the FSC rules constituted prohibited export subsidies. Subsequently, the US enacted the “FSC Repeal and Extraterritorial Income Exclusion Act of 2000” (ETI Act). However, the WTO found the ETI Act to be also in violation of its rules. Its reasoning relied on four main rules. First, the ETI Act still constituted a specific exception from the US’s tax system and thus a subsidy. Second, those exceptions were “dependent or contingent upon export” according to Article 3.1 (a) of the SCM Agreement. Third, the scope of the ETI Act was too broad to merely prevent double-taxation. Fourth, the limitation of imported parts to 50% discriminated against foreign goods.[44] Consequently, the US repealed the ETI Act by enacting the “American Jobs Creation Act of 2004”.[45]

Seemingly in retaliation, the US requested consultation with Belgium,[46] the Netherlands,[47] Greece,[48] Ireland,[49] and France[50] concerning certain income tax measure by these countries. No dispute panel was established, however, and the parties did not notify the WTO that they came to a solution.

Another example of the promotion of exports may be seen in China’s tax laws regarding foreign-invested enterprises (FIE). FIEs in China get a 50% tax reduction if they export at least 70% of their production, and a 100% reduction for the amount of profits they re-invest in export-oriented activity for at least five years.[51] This can in praxi be seen as having the same effects export subsidies have in a tax system with a non-discriminatory corporate income tax.[52]

B. Prevention of Imports

Nonetheless, direct tax laws may also have a prohibitive impact on imports which counters the aims of the NT principle. A direct way to reduce imports and support local production is the Korean rumor that the purchase of a foreign-produced car leads to a tax audit.[53] The tax laws do not even have to actually be in force if the rumor of their existence is enough to further their goals. On the one hand, such a rumor does not increase the sales price of imported cars. On the other hand, it does raise the price from the buyer’s point of view. If the buyer thinks that buying an imported car might or even necessarily will lead to a tax audit, he will take the costs related to the audit into consideration when buying such a car. Furthermore, the threat of a tax audit may even prevent buyers from purchasing foreign cars at all. Supporting such a rumor therefore reduces imports.

Another example of a way in which direct tax laws may negatively impact imports, which is more similar to tariffs, is the Malaysian treatment of insurance companies. Several countries, including member states of the EU, grant income tax relief for pension plans and life insurance supplied by domestic companies.[54] The Malaysian treatment differs from the European policy in that Malaysian “reliefs” only apply to annuities purchased from domestic companies if they are domestically owned.[55] Conversely, European countries grant these measures of relief to any domestic companies. Both approaches do not legally apply import duties to pension plans and life insurance policies. However, the Malaysian approach has a similar effect and does effectively discriminate between companies on the basis of their ownership.

Both measures, supporting the rumor of an impending tax audit, as well as the different treatment of FIEs, interfere with the NT.

C. Support of Domestic Production

Furthermore, direct taxes may be used to further domestic production more directly. In the fields of “agriculture, manufacturing and various services”[56] and for certain activities, e.g. research & development, this is long-standing practice.[57]

An example for the support of domestic production by direct tax laws is the Chinese rules regarding appliances. If these products are made domestically, 40% of the corresponding investment can be deducted from corporate income taxes.[58] This effectively reduces the costs of domestically produced appliances. If a domestic and a foreign-produced appliance have the same nominal price, a Chinese company would have to pay the full price for the foreign-produced appliance, while the effective price for the Chinese one would be only 60% of the nominal price. Hence, to be able to compete on the Chinese market, a foreign company would have to be able to either produce appliances of the same quality 40% cheaper or produce 40% more durable appliances for the same price. Moreover, the tax deductibility might incentivize debt-based purchases of domestically-made machinery and equipment beyond the company’s actual needs. This also would only benefit Chinese manufacturers. Foreign-based companies could not profit from these investments but would have to encounter the reduced demand later when the additional appliances are needed. Thus, foreign manufacturers are severely disadvantaged compared to Chinese ones.

V. Economic Reasoning

Economically, the WTO needs to be able to rule on direct taxes to achieve its goals of providing for efficient trade world-wide; moreover, the WTO is the only supranational body able and willing to achieve these goals.

As shown above, direct tax measures are in praxi capable of interfering with the WTO’s goal of attaining a level playing field and ensuring the MFN and NT principles, just like those measures the WTO treaties aim to prevent. While legally there is a difference between promoting exports through subsidies or through tax incentives, from an economic point of view both measures have similar effects. The support an activity receives from further income because of subsidies is de facto the same as that from lower expenditure due to tax incentives. Yet, if production for export purposes receives governmental support, the affected companies have an economic advantage over their competitors in the destination countries, as well as those from third countries wherein the government does not support production in such a way. Thus, to ensure equal rules for all economic actors, the WTO needs to be able to rule on direct taxes in this regard.

Additionally, international trade is similarly distorted, whether a WTO member prevents imports through tariffs or by collecting higher taxes from FIEs. Tariffs have a distorting effect on cross-border trade.[59] Imposing higher taxes on foreign companies’ products has the same effect as tariffs, and thus doing so similarly distorts the playing field.[60]

The Chinese support for domestic manufacturers shows that income taxes may have a high impact on the competitiveness of manufacturers. If part of the investment for machinery can be deducted only if the machinery was made domestically, foreign manufacturers can compete only in exceptional cases. In the Chinese example, foreign producers had to be 40% more efficient, and thus had to offer 40% lower prices, just to be on par with Chinese producers. Such a tax incentive is not only incompatible with a common set of rules for domestic and foreign companies and therefore with the NT principle.

Double taxation does not necessarily involve laws even recognizing cross-border trade. Rather, it can be the result of tax rules aimed exclusively at domestic economic actions. Yet, as shown above, these policies may have a prohibiting effect on cross-border investments. Tax holidays, on the other hand, attract foreign investment. Both effectively lead to a different treatment between the countries’ own residents and those of other states. For all of these abovementioned reasons, the WTO could not effectively advance its goals while lacking jurisdiction over direct taxation.

Having said that, one might argue that the WTO would not be the right body to rule on direct taxes. It might be more economically sound to leave the regulation of direct taxes to other supranational bodies. For example, the EU recognizes the subsidy-like nature of certain direct tax measures, as well.[61] Yet, its goals are to promote the European market, not world-wide trade. Where EU member states’ interests collide with world-wide trade, the former prevails. For example, the EU supports companies in its member states by state aids and subsidies.[62] While the exact impact of these measures on businesses is disputed,[63] they enhance the economic capabilities of EU companies, possibly to the detriment of overall world trade. Christina Davis even says the EU was “notorious for delaying tactics” and showing a “pattern of non-cooperation” regarding WTO rules and the ensuing disputes.[64]

Similarly, the North American Free Trade Agreement (NAFTA) also acknowledges subsidies and has its own dispute settlement mechanism.[65] However, the US, Canada, and Mexico signed NAFTA to promote trade between them, not to promote world-wide trade per se. While other supranational bodies might rule on direct taxes as well, only the WTO intends to do so for world-wide trade instead of the well-being of a closed group. Therefore, the WTO cannot rely on them to rule on direct taxes, but must be able to do so itself.

VI. Conclusion

The WTO’s objective is to provide a level playing field for international trade. This cannot be archived if the member states discriminate between their own and foreign nationals or between foreign nationals depending on their states of residence. Tariffs, subsidies, and equally direct tax measures might lead to discrimination. When the GATT was originally signed, this fact was not obvious to its signatories. Yet, over time it has become abundantly clear. Therefore, the WTO members accepted the WTO’s jurisdiction on direct taxes. They made this clear not only by accepting the DSB’s decisions regarding direct taxes, but even by acknowledging direct taxes in the SCM Agreement. The legal perspective not only allows their inclusion into WTO rules, but even promotes it.

From the economic point of view, the WTO cannot reach its goals without ruling on direct taxes. Direct taxes can interfere with cross-border trade in a way similar to tariffs. They also can have a subsidy-like effect. Furthermore, other supranational bodies intending to promote trade between their member states might even actively support companies therein. For example, while the proposed common consolidated corporate tax base (CCCTB) in the EU is meant to ease the regulatory burden for all companies doing business in the EU,[66] some benefits will apply only to companies that are resident in EU Member States.[67] The WTO is the only supranational body that promotes world-wide trade instead of supporting the economies of certain countries. Thus, the economic point of view demands the inclusion of direct taxes into WTO rules.

The WTO’s member states and their people profit highly from their WTO membership and the corresponding increase in trade on sectors covered by the WTO treaties.[68] Not being able to levy taxes to put obstacles in the way of world-wide trade and thereby gain an advantage over other members does not limit their sovereignty. That states abide to the treaties they signed as long as they are party to them, the principle of pacta sunt servanda, enables them to act reliably not only within their borders, but with each other, as well. If international treaties were not binding to signatory states, they would lose their meaning. Only reliability and adherence to treaties signed allows states to coordinate on an international level. As long as a state is party to a treaty, it has to execute it in good faith.[69] Having said that, WTO member states always are free to leave. While an exit from the WTO is a complicated process with severe consequences that strips the exiting state from WTO benefits, it is possible.[70] Membership in the WTO is voluntary. During the termination process, states still have to abide to treaties they are party to, yet thereafter they are released from any obligations of the treaty.[71] The ability to participate in bodies such as the WTO is an aspect of sovereignty itself. Therefore, the member states’ obligation to comply with WTO rules as long as they are bound by the WTO treaties is not a limitation, but an expression of their sovereignty.

Holistically, the WTO cannot reach its goals, or even promote them in a meaningful way, without being able to set rules regarding certain direct tax measures. Direct taxes should not be totally exempted from WTO rules.

* Christian L.J.O.J. Neufeldt https://orcid.org/0000-0001-5788-8803 is a candidate for the ALM in the field of Government at Harvard University Extension School where he received a Graduate Certificate in Legal Studies in 2018. He is a 2016 graduate of the Georg-August University’s School of Law in Göttingen, Germany. In 2017, he obtained an LL.M. in international business tax law from Tilburg Law School in Tilburg, The Netherlands. He may be reached via LinkedIn at https://www.linkedin.com/in/christian-lars-neufeldt-1ba544112.

[1] Andreas Bergh & Therese Nilsson, Is Globalization Reducing Absolute Poverty?, 64 World Dev. at 42 (2014); Angus Deaton, Great Escape: Health, Wealth, and the Origins of Inequality 23-58 (2013).

[2] Antonio Grimaldo Monroy, The Relevance of WTO Law for International Tax Law, in The Relevance of WTO Law for Tax Matters 19, 19 (Judith Herdin-Winter & Ines Hofbauer eds., 2006).

[3] What is the WTO?, WTO (last visited July 8, 2017), https://www.wto.org/english/thewto_e/whatis_e/wto_dg_stat_e.htm.

[4] Michael Daly, The WTO and Direct Taxation 16 (2005).

[5] Michael Fahkri, Reconstruing the WTO Legitimacy Debates, 2 Notre Dame J. of Int’t & Comp. L. 64, 64-100 (2011).

[6] WTO, supra note 3.

[7] Id.

[8] Michael Daly, Fiscal Affairs Dep’t, IMF, Is the WTO a World Tax Organization? A Primer on WTO Rules for Tax Policymakers 12 (2016).

[9] Decentralization: A Sampling of Definitions 16-17, 26-28 (UN Dev. Programme & Gov’t of Germany, Working Paper), http://web.undp.org/evaluation/documents/decentralization_working_report.PDF.

[10] Daly, Primer, supra note 8.

[11] Id. at 13; Thomas Ecker & Franz Koppensteiner, Anwendbarkeit der WTO-Abkommen auf direkte und indirekte Steuern [Applicability of the WTO Treaties to Direct and Indirect Taxation], 3 Steuer und Wirtschaft Int’l Tax and Bus. Rev. 142, 142 (2009).

[12] Monroy, supra note 2, at 25.

[13] Daly, Direct Taxation, supra note 4, at 18.

[14] Monroy, supra note 2, at 25.

[15] Daly, Direct Taxation, supra note 4, at 19.

[16] Michael Daly, Is the WTO a World Tax Organization? A Primer on WTO Rules for Tax Policymakers, 5 (Fiscal Affairs Dep’t, IMF, 2016), https://www.imf.org/external/pubs/ft/tnm/2016/tnm1602.pdf.

[17] Id. at 5.

[18] Stefen Fahlis, The Applicability of Art. I and III GATT to Direct Taxes, in The Relevance of WTO Law for Tax Matters, supra note 2 at 37, 40 (Judith Herdin-Winter & Ines Hofbauer-Steffel eds., 2006).

[19] Thomas Ecker & Franz Koppensteiner, Anwendbarkeit der WTO-Abkommen auf direkte und indirekte Steuern [Applicability of the WTO Treaties to Direct and Indirect Taxation], No 3 Steuer und Wirtschaft Int’l Tax and Bus. Rev., supra note 11 at 142, 143 (2009); Michael J. Graetz, International Aspects of Fundamental Tax Restructuring: Practice or Principle, 51 Univ. of Miami Tax L. Rev. 1093, 1097 (1997).

[20] Michael Daly, The WTO and Direct Taxation (Discussion Paper No 9), 9 (WTO, 2005), https://www.wto.org/english/res_e/booksp_e/discussion_papers9_e.pdf; Stefen Fahlis, The Applicability of Art. I and III GATT to Direct Taxes, in The Relevance of WTO Law for Tax Matters, supra note 18 at 37, 40-41 (Judith Herdin-Winter & Ines Hofbauer-Steffel eds., 2006).

[21] Michael Lennard, The GATT 1994 and Direct Taxes: Some National Treatment and Related Issues, in WTO and Direct Taxation 73, 76 (Judith Herdin-Winter & Ines Hofbauer-Steffel eds., 2005).

[22] Id. at 76–77.

[23] Id.

[24] Id. at 77.

[25] Id. at 76.

[26] Servass van Thiel, General Report, in WTO and Direct Taxation, supra note 21 at 13, 19 (Michael Lang, Judith Herdin, Ines Hofbauer eds., 2005).

[27] Thomas Ecker & Franz Koppensteiner, Anwendbarkeit der WTO-Abkommen auf direkte und indirekte Steuern [Applicability of the WTO Treaties to Direct and Indirect Taxation], No 3 Steuer und Wirtschaft Int’l Tax & Bus. Rev., supra note 11 at 142, 143 (2009).

[28] Thomas Ecker & Franz Koppensteiner, Anwendbarkeit der WTO-Abkommen auf direkte und indirekte Steuern [Applicability of the WTO Treaties to Direct and Indirect Taxation], No 3 Steuer und Wirtschaft Int’l Tax & Bus. Rev., supra note 11 at 142, 143 (2009).

[29] Michael Daly, Is the WTO a World Tax Organization? A Primer on WTO Rules for Tax Policymakers, 2 (Fiscal Affairs Dep’t, IMF, 2016), https://www.imf.org/external/pubs/ft/tnm/2016/tnm1602.pdf.

[30] Art. 3-4 SCM Agreement.

[31] Michael Daly, Some Taxing Issues for the World Trade Organization, Vol. 48, No.4 Canadian Tax J./ Revue Fiscale Canadienne 1053, 1059 (2000);Thomas Ecker & Franz Koppensteiner, Anwendbarkeit der WTO-Abkommen auf direkte und indirekte Steuern [Applicability of the WTO Treaties to Direct and Indirect Taxation], No 3 Steuer und Wirtschaft Int’l Tax & Bus. Rev., supra note 11 at 142, 146-147 (2009).

[32] Michael Daly, Is the WTO a World Tax Organization? A Primer on WTO Rules for Tax Policymakers, 27 (Fiscal Affairs Dep’t, IMF, 2016), https://www.imf.org/external/pubs/ft/tnm/2016/tnm1602.pdf.

[33] Appellate Body Report, United States – Tax Treatment for “Foreign Sales Corporations,”¶119, WTO Doc. WT/DS108/AB/RW (adopted Feb. 13, 2006). See Panel Report, United States – Tax Treatment for “Foreign Sales Corporations,” WTO Doc. WT/DS108/R (adopted Jan. 29, 2002).

[34] Daly, Primer, supra note 8, at 27.

[35] Id. at 27–28.

[36] Yariv Brauner, International Trade and Tax Agreements May Be Coordinated, But Not Reconciled, 25 Va. Tax Rev. 250, 295 (2005); DALY, PRIMER, supra note 8, at 9.

[37] Johann Wagner, Direkte Steuern und Welthandselrecht: Das Verbot Ertragsteuerlicher Exportsubventionen im Recht der WTO [Direct Taxes and World Trade Law: The Prohibition of Corporate Tax Related Export Subsidies in WTO Rules] 77 (2006).

[38] 26 U.S.C.S § 927(a) – Repealed.

[39] Daly, Primer, supra note 8, at 35, n.86; Wagner, supra note 37, at 78.

[40] Daly, Primer, supra note 8, at 36.

[41] Id.

[42] Wagner, supra note 37, at 81.

[43] Id. at 81–93.

[44] Daly, Primer, supra note 8, at 37.

[45] 108 P.L. 357.

[46] Request for Consultations by the United States, Belgium – Certain Income Tax Measures Constituting Subsidies, WTO Doc.  WT/DS127/1 (May 5, 1998).

[47] Request for Consultations by the United States, Netherlands – Certain Income Tax Measures Constituting Subsidies, WTO Doc. WT/DS128/1 (May 5, 1998).

[48] Request for Consultations by the United States, Greece – Certain Income Tax Measures Constituting Subsidies, WTO Doc. WT/DS129/1 (May 5, 1998).

[49] Request for Consultations by the United States, Ireland – Certain Income Tax Measures Constituting Subsidies, WTO Doc. WT/DS130/1 (May 5, 1998).

[50] Request for Consultations by the United States, France – Certain Income Tax Measures Constituting Subsidies, WTO Doc. WT/DS131/1 (May 5, 1998).

[51] Daly, Direct Taxation, supra note 4, at 13.

[52] Id.

[53] Id. at 13, n. 37.

[54] Id. at 13.

[55] Id.

[56] Id. at 14.

[57] Junxue Jia & Guangrong Ma, Do R&D Tax Incentives Work? Firm-Level Evidence from China, 46 China Econ. Rev. at 50, 50-51 (2017); Boris Lokshin & Pierre Mohnen, Do R&D Tax Incentives Lead to Higher Wages for R&D Workers? Evidence from the Netherlands, 42 Res. Pol’y at 823, 823 (2013).

[58] Daly, Direct Taxation, supra note 4, at 14.

[59] Przemyslaw Kowalski, Impact of Changes in Tariffs on Developing Countries’ Government Revenue, 18 OECD Working Paper Series, May 2006, at 109, 110.

[60] Luosha Du, Ann Harrison & Gary Jefferson, FDI Spillovers and Industrial Policy: The Role of Tariffs and Tax Holidays, 64 World Dev. at 366 (2014); see also Kenji Fujiwara, Tax Principles and Tariff-Tax Reforms, 71 Finanzarchiv/Pub. Fin. Analysis 360 (2015).

[61] John Temple Lang, EU State Aid Rules – The Need for Substantial Reform, European State Aid Quarterly no. 3, 2014, at 440, 446-447.

[62] Romualdas Ginevičius & Šarūnas Bruzgė, Evaluation of the Effect of State Subsidies on Business, Bus, Management and Educ., no 1, 2013, at 50, 51.

[63] Id. at 50–76.

[64] Christina L. Davis, A Conflict of Institutions? The EU and WTO/GATT Dispute Adjudication 2, https://www.princeton.edu/~cldavis/files/euwto.pdf (last visited February 18, 2018).

[65] Stephen Joseph Powell & Ludmila Mendonca Ribeiro, Managing the Rule of Law in the Americas: An Empirical Portrait of the Effects of 15 Years of WTO, MERCOSUL, and NAFTA Dispute Resolution on Civil Society in Latin America, 42 U. Miami Inter-American L. Rev. no. 2, 2011, at 197, 218-220.

[66] Commission, Proposal for a Common Consolidated Corporate Tax Base, COM(2016) 683 final, Consideration 1.

[67] Christian L.J.O.J. Neufeldt, The Influence of Brexit on CCTB/CCCTB and British Companies, 2017, http://arno.uvt.nl/show.cgi?fid=143916, at 35.

[68] Myeong Hwan Kim, Does the WTO Promote Trade? Further Evidence, 19 (3) J. Int’l Trade & Econ. Dev. at 421 (2010).

[69] Art. 26 of the Vienna Convention on the Law of Treaties.

[70] Brian Hindley, New Institutions for Transatlantic Trade?, 75 INT’L AFF. at 45, 49 (1999).

[71] Art. 70 of the Vienna Convention on the Law of Treaties.

This 2018 Online Discussion concerns Professor Kevin Jon Heller’s latest paper “What is an International Crime? (A Revisionist History),” to be published in the Harvard International Law Journal Vol 58.2. Alejandro Chehtman, Astrid Reisinger Coracini, and Mia Swart provide responses to Professor Heller’s article, links to which can be found below. Adding to the engaging commentaries provided by the three academics, Professor Heller gives a reply to the responses.

Main Article

Kevin Jon Heller, What is an International Crime? (A Revisionist History)

Responses

Alejandro Chehtman

Astrid Reisinger Coracini

Mia Swart

Reply

Kevin Jon Heller

[PDF]

By Chenglin Liu*

Abstract

This article explores two unique aspects of the Chinese Tort Liability Law (TLL):[1] (1) Article 24 holds that a party not at fault shall share the loss with the victim in non-strict liability cases under undefined circumstances, and (2) the government often shields a party at fault from liability in mass tort cases by disregarding the TLL entirely. These two aspects may seem contradictory; however, they are both based on the same principle of socialized liability, which is first articulated in this article.

Scholars often claim that Article 24 embodies the principle of equitable liability. This article challenges such claims and asserts that Article 24 is, in fact, inequitable because it allows a party not at fault to be held liable.  Article 24 defies the traditional notion that liability should not only be based on fault, but also proportional to fault. Thus, it failed to provide a clear standard of care that individuals and entities can follow to avoid liability.

This article argues that the principle of socialized liability is helpful in discerning the essence of Article 24 and other related provisions in the TLL. The new principle explains why Chinese lawmakers and courts are willing to deviate from fault-based liability, the bedrock of Western tort law. Through the lens of socialized liability, this article analyzes leading tort cases that have invoked Article 24 and related provisions, as well as several incidents where the government has deliberately disregarded the TLL. This analysis reveals that the socialized liability principle aligns well with the broader goals the Chinese government intends to achieve, in particular, maintenance of social stability and promotion of state economic interests. Either imposing liability on a party not at fault, or shielding an at-fault party from liability serves the same purpose—maintaining social stability, which is at core of the socialized liability principle.

I. Introduction

On December 26, 2009, the Standing Committee of the National People’s Congress (NPC) enacted the Tort Liability Law (TLL), the first comprehensive tort code in the history of the People’s Republic of China (the PRC). It took effect on July 1, 2010.[2] The TLL is composed of ninety-two articles in twelve chapters.[3] Consistent with codes in other areas of law, the first few chapters of the TLL lay out general principles.[4] The remaining chapters focus on specific liabilities for injuries caused by defective products, automobile accidents, medical malpractice, environmental pollution, domesticated animals, abnormally dangerous activities, and invasion of personal property.[5]

The TLL claims to protect individuals’ civil rights and interests, punish and prevent tortious conduct, and maintain social harmony and stability.[6] It offers a wide range of protection for individual rights, such as the rights to life, health, name, reputation, honor, self-image, privacy, marital autonomy, guardianship, ownership, security, copyright, patent, trademark, discovery, equities, and succession.[7] Chinese academia often views tort law as a private law, which supposedly recognizes the individual autonomy of the parties more than any other area of law.[8] In fact, however, the TLL is deeply characterized by socialism and is used as a tool to maintain social stability, which is the overwhelming goal of the state.[9] It is impossible for the TLL to remain independent and free from political influence.[10]

This article explores two unique aspects of the Chinese Tort Liability Law (TLL): (1) Article 24 holds that a party not at fault shall share the loss with the victim in non-strict liability cases under undefined circumstances, and (2) the government often shields a party at fault from liability in mass tort cases by disregarding the TLL entirely. These two aspects may seem contradictory; however, they are both based on the same principle of socialized liability, which is first articulated in this article.

Scholars often claim that Article 24 embodies the principle of equitable liability. This article challenges such claims and asserts that Article 24 is, in fact, inequitable because it allows a party not at fault to be held liable. Article 24 defies the traditional notion that liability should not only be based on fault, but also proportional to fault. Thus, it failed to provide a clear standard of care that individuals and entities can follow to avoid liability.

This article argues that the principle of socialized liability is helpful in discerning the essence of Article 24 and other related provisions in the TLL. The new principle explains why Chinese lawmakers and courts are willing to deviate from fault-based liability, the bedrock of Western tort law. Through the lens of socialized liability, this article analyzes leading tort cases that have invoked Article 24 and related provisions, as well as several incidents where the government has deliberately disregarded the TLL. This analysis reveals that the socialized liability principle aligns well with the broader goals the Chinese government intends to achieve, in particular, maintenance of social stability and promotion of state economic interests. Either imposing liability on a party not at fault, or shielding an at-fault party from liability serves the same purpose—maintaining social stability, which is at core of the socialized liability principle.

II. From Equitable Liability to Socialized Liability

A. Equitable Liability (公平原则)

Scholars claim that the principle of equitable liability originated from some earlier versions of provisions of German and Soviet civil law.[11] In 1900, a draft amendment of the German Civil Code provided that the court could require an actor who was not at fault to compensate the victim based on circumstances.[12] Scholars immediately reacted with disapproval, claiming that the proposed provision was so vague that it was intolerable.[13] As a result, the provision was not included in the revised German law.[14]

According to Article 406 of the Soviet Union Civil Code of 1922, if an actor was not liable for the victim’s harm, the court could still order the actor to compensate the victim based on wealth situations of the two parties.[15] This provision was hardly applied in the practice, even to Soviet jurists, who criticized Article 406 for creating legal uncertainty.[16] With the development of the socialist welfare system, which substantially diminished the wealth gap among the people, the equitable liability provision became obsolete in Soviet law in 1964.[17]

In 1986, China enacted the first outline of the civil law entitled The General Principles of Civil Law (the GPCL), which borrowed heavily from both German and Soviet law.[18] Article 132 of the GPCL provides, “if none of the parties are at fault in causing damage, they may share civil liability according to the actual circumstances.”[19] This provision served as the basis of Article 24 of the TLL.[20]

B. Socialized Liability (责任社会化)

By invoking equitable liability, Chinese courts grant relief to victims even though the defendant is not at fault in non-strict liability cases. This arcane aspect of the Chinese tort law puzzles foreign scholars who are accustomed to tort cases where fault is almost a prerequisite for remedy.[21] Instead of using the term “equitable liability,” this article refers it as “socialized liability.” The latter term is more accurate and helpful in discerning the essence of Article 24 and other related articles in the TLL.

The principle of socialized liability holds that tort liability should be imposed or limited as necessary to ensure social stability or confidence in the Communist Party of China (the Party). In practice, the principle allows Chinese courts to hold a party who is not at fault liable for a victim’s injuries. In addition, it also allows courts to deny claims against a party who is at fault in mass tort cases.

As a unique legal concept of recent origin, socialized liability has no well-defined boundaries, and it lacks certainty and predictability. Consequently, individuals and property owners do not know how to avoid liability. Despite its ambiguity, socialized liability remains an essential legal basis for Chinese courts to allocate losses among parties. Specifically, socialized liability serves two main social goals, which may at times overlap or conflict with each other:

First, socialized liability protects the state’s economic interests. Since the economic reforms in the early 1980s, China has transitioned from a Soviet-style planned economy to a so-called market economy with Chinese characteristics.[22] The transition, however, is incomplete as China is still a command economy, in which the state controls most of the vital industrial sectors, such as transportation, telecommunication, energy, banking, and health care.[23] These state-owned enterprises or entities (SOEs) enjoy preferential treatment in laws compared to consumers and private competitors. The SOEs not only play a major role in shaping the law, but they can also impose pressure on courts in cases of industrial accidents. The government often instructs courts to interpret the law favorably to SOEs, or to simply deny claims against SOEs or other enterprises with strong government backing.[24]

Second, socialized liability serves the Party’s goal of maintaining stability and control.[25] Since the founding of the PRC, the Party has firmly held onto its power through a combination of military might, political coercion, ideological pressure, and constraining political enemies.[26] The Party initially predicated its legitimacy on its leadership and sacrifice in gaining China’s independence from Western imperialists. After Mao’s generation in the late 1970s, however, the revolutionary narrative was less persuasive, particularly among the young, many of whom were better educated and extensively exposed to Western ideas.[27] Consequently, the Party developed a new narrative arguing that it deserves to govern the country because it will continue to ensure economic prosperity and social stability.[28]

Although the new narrative appeals to wide audiences, China’s pursuit of economic prosperity has produced very uneven results.[29] The rapidly increasing gap between the rich and poor has contributed to social instability. Social unrest poses a serious challenge to the Party, which seems unable to eliminate the prosperity gap.[30] In the absence of democratic discourse, the Party faces enormous difficulties in detecting elements of dissatisfaction.[31] Therefore, the Party has become oversensitive about public protests. As Professor Wei Zhang observed, “Unlike the democracies where the median voter’s opinion tends to prevail, the authoritarian government in China cares more about ‘the vocal extremists who are most likely to take to the street.’”[32] Therefore, a top priority for the Party is to respond to high-profile controversies or natural disasters. In doing so, the Party attempts to demonstrate its genuine concern for its citizens and to solidify its public support in order to enhance its legitimacy.[33]

The TLL is one of the tools the Party uses to solve thorny social issues and prevent disgruntled victims from taking their grievances to social media or even the streets. Viewed against this background, a fault-based tort principle appears burdensome and difficult to manipulate to the Party’s liking. In addition, inquiries into fault can expose the problems of mismanagement and corruption, attracting unnecessary attention and further arousing public resentment.[34]

Socialized liability, however, is flexible and adaptive. A court can quickly compensate victims without assigning fault. In some cases, the government and the Party have relied on the principle of socialized liability to force victims to accept low compensation and promise not to pursue further legal actions. Ironically, an inquiry into fault in mass tort cases, as the Party sees it, could lead to instability. Thus, socialized liability will remain as an indispensable principle in the TLL precisely because it is so ambiguous and can be easily manipulated to reach whatever legal result the Party favors.

III. Cases Based on Article 24 of the TLL

Article 24 of the TLL provides, “if neither the victim nor the actor is at fault for the harm to the victim, the two parties may share the victim’s loss according to the circumstances.”[35] From the wording of the Article, it is unclear when and how courts should invoke it. The words, such as “may,” “share,” and “circumstances” can cause confusion among judges, lawyers, and academics. Since there is no official interpretation from the Supreme People’s Court, lower courts often take a broad approach in applying Article 24, rather than methodically breaking down the elements in a traditional way of applying a statute.[36] In 2010，the Research Institute of the TLL at the Supreme People’s Court, led by the then Vice President Xi Xiaoming, published a book entitled, The Understanding and Application of the TLL.[37] Even though it is not legally binding, the book is regarded as a reliable source for understanding Chinese tort law. In this book, Xi explained the following key terms of Article 24:[38]

“Loss” and “Liability” According to Xi, Article 24 does not serve as a basis for assessing whether the defendant is at fault. The condition for the Article to apply is that either party is at fault. Thus, if a court requires the defendant to be responsible for the victim’s loss, it does not necessarily mean he or she was actually at fault.[39] Xi cautioned the courts to not treat Article 24 as requiring strict liability.[40]

“May” and “share” Xi stated that sharing the victim’s loss should not be mandatory for the defendant.[41] However, he failed to clarify whether the defendant has a choice not to share the loss. As the subsequent cases show, no court has followed Xi’s advice.

“According to circumstances” Xi stated that because Article 24 is not a fault based provision, the sole basis for allocating the loss between the defendant and plaintiff is the parties’ respective wealth.[42] This provision “complies with the virtues, such as equity, justice, honesty, friendship and sympathy, which are broadly recognized and accepted by the public and conducive to building a harmonious society.”[43] In short, the “circumstance” in this Article means “[the parties’ respective] income, expenditure and responsibility to the family and society.”[44]

Xi further stated that if the victim’s financial state has deteriorated seriously due to the injuries, court should require a well-to-do defendant to bear the entire loss.[45] If the harm is insignificant, the court should hold the plaintiff responsible for his or her own loss.[46] If the plaintiff is wealthier than the defendant, the plaintiff should bear all the loss. If the defendant has insurance, he or she should bear more of the loss.[47]

Even though Xi stated that Article 24 can only be used in limited cases,[48] courts have increasingly used the Article as a legal basis for deciding regular tort cases.[49] In 2011, there were only two cases based on Article 24, but in 2016, the number of cases based on Article 24 exceeded 700.[50] In total, courts have applied the Article more than 2,000 times in all the cases that the Supreme People’s Court has collected since 2011.[51] After an extensive review of recent litigation, this article has selected the following cases to demonstrate how courts have applied the socialized liability principle. Some cases are more analytical than others, but the results are the same: courts have regularly held that parties not at fault must share losses with victims.

A. Ou Zuming v. Hydraulic Power (HP)

HP is a hydraulic power station that maintains several river locks. In July 2011, HP[52] notified the local maritime department that it would release river locks for routine maintenance and asked the department to warn all passing vessels of the high level of water in the river. By taking such measures, HP complied with state regulations regarding river lock releases. The record showed that HP followed the regulation carefully by releasing the locks gradually and sounding horns to ensure that passing vessels had ample time to make the adjustment for the water rise. Mr. Ou Zuming, however, suffered severe property damage to his flat-bottomed boat loaded with cargo during the lock release. Subsequently, Ou Zuming sued HP, claiming that HP was negligent in releasing the water locks or, in the alternative, should be held strictly liable for his loss.[53]

The court first denied Ou Zuming’s strict liability claim based on Article 132 of the GPCL. The court reasoned that the river lock release was not one of the enumerated activities considered abnormally dangerous according to the GPCL.[54] Ou Zuming’s property was located two kilometers away from the river locks and there was a large inlet, which reduced the impact of the water rise. Consequently, Ou Zuming had an opportunity to react to the release and protect his property. Therefore, HP was not strictly liable for Ou Zuming’s loss. On the claim for negligence, the court reasoned that HP took all the necessary measures to comply with the state regulation. Thus, HP was not negligent in releasing the river locks. It seemed that the court was ready to rule in favor of HP, but, in the end, it upheld the lower court’s decision requiring HP to pay RMB 200,000 ($30,000) to cover Ou Zuming’s property loss based on Article 24 of TLL.[55]

B. Hu v. Chen

On June 27, 2016, Chen Yunhai (Chen) hired Wu Daozhong (Wu) to refurbish the ceiling of Chen’s apartment.[56] The next day, Chen found Wu lying on the floor unconscious. Chen immediately called an ambulance to take Wu to the hospital, where he was diagnosed as possibly having suffered from a stroke. Chen paid RMB 1,800 ($266) for Wu’s medical expenses. Wu subsequently checked into other hospitals for treatment before he died on December 5, 2016. Wu’s widow sued Chen to recover damages for part of the medical expenses, life support costs, funeral costs, and emotional distress in the amount of RMB 269,718.40 ($39,929). The trial court reasoned that the employment relationship between Chen and Wu had no connection with Wu’s illness and his death and that Chen took necessary measures to provide assistance for Wu’s rescue. Therefore, Chen was not at fault and was not liable for Wu’s illness and death. Based on Article 24 of the TLL, however, the Court held that Chen must share a portion of Wu’s loss. It ordered Chen to pay RMB 15,000 ($2,220) in addition to the RMB 1,800 ($266) payment that Chen had already made for Wu’s medical bills.[57]

Wu’s widow appealed the trial court decision, claiming that it erroneously applied Article 24 and Chen should share a large portion of the loss. The appellate court affirmed the trial court’s decision. In its reasoning, the appellate court provided some guidance on the application of Article 24, which was rare for a court to do. The court emphasized that the basic principle of tort law is liability based on fault in non-strict-liability cases. Article 24 does not require parties not at fault to share liability, but only to share the loss under certain circumstances. “Sharing loss” here does not mean that the two parties split the loss equally. The court further interpreted the phrase “under the circumstances,” in the sense that by invoking Article 24, courts should consider the following factors in deciding about the amount of loss that the party not at fault should share:[58]

(1) The manner with which defendant acted [even if he or she was not at fault];
(2) The circumstance under which the defendant acted;
(3) The amount of loss to the plaintiff;
(4) The benefit that defendant received from the plaintiff;
(5) The disparity in wealth between the defendant and plaintiff.[59]

In this case, the appellate court found that the amount the trial court required Chen to share was reasonable and denied the plaintiff’s claim for additional payment.

C. The Application of Socialized Liability in Ou Zuming and Hu

The Ou Zuming case and the Hu case were factually different and tried in different courts, one in the most remote region and the other in Beijing. Nevertheless, the ultimate outcomes in both cases were the same: the wealthier defendants were ordered to pay for damages to the desperate plaintiffs. Based on the socialized liability principle, the courts in both cases obligated the defendants to share some of their wealth with the plaintiffs, even though neither defendant was at fault.

In Ou Zuming, the wealth gap and potential for social discontent was apparent to the court. HP was a subsidiary of Chongqing Longzhu Power Group, a government-affiliated company with a registered capital of close to RMB 300 million ($45 million). Compared with HP, Mr. Ou Zuming’s business was negligible. The $30,000 payment was only a tiny fraction of HP’s wealth but vital for Mr. Ou Zuming to salvage his shattered business and keep his workers employed. If the court had applied the principle of fault-based liability and denied Mr. Ou Zuming’s claim, Mr. Ou Zuming and his fellow workers probably would have protested the HP and the government. By applying the socialized liability principle, however, the court avoided the potential for social unrest.

Similarly, in Hu, the court was fully aware of the wealth gap between the two parties, which was reflected in the judgment. In 2016, the property values in Beijing increased by nearly 30% annually.[60] An average two-bedroom apartment (80 square meters, or 860 square feet) in Beijing was worth more than RMB 4,000,000 ($600,000).[61] It was obvious to the court that Chen’s wealth was far greater than that of Hu. As a migrant worker from Anhui Province, Hu could only sell his hard labor in order to survive in Beijing. Without adequate health insurance and pension benefits, Hu’s illness would quickly exhaust his life savings and lead to bankruptcy. If uncompensated, Hu’s family members could have petition the government for assistance. By invoking Article 24 in Hu, the court relieved pressure on the government.

IV. Article 87 and Falling Object Cases

While the rapid urbanization movement has improved living standards in China, it has also created a unique legal problem: injury to a person by an object that falls from a multi-unit residential building. Who is liable for the harm? Article 87 of the TLL, often referred to as the “falling objects provision,” offers a clear answer: all occupants of the building, except those who can exculpate themselves, are liable for the injury.

A. Luo v. Lao

On November 7, 2005,[62] while Mr. Luo Jiezhi was eating dinner outside an apartment building owned by Lao Xiquan (the Owner), a steel bar fell from above and hit Luo’s right wrist, causing severe injuries.[63] At the time of the incident, the Owner had a metal structure to dry meat on the top of the building. Luo sued the Owner to recover medical and other expenses.[64] The court physician certified that Luo suffered an 8th degree disability, which made him unable to work. The court relied on Article 126 of the GPCL, which states that “if a building or any other installation or an object placed or hung on a structure collapses, detaches, or drops and causes damage to others, its owner or manager shall bear civil liability, unless he can prove he is not at fault.”[65] The court held for Luo, the plaintiff, because the Owner failed to produce proper evidence that he was not at fault.[66]

In practice, it is not enough for an owner to prove that he exercised reasonable care under Article 126 of the GPCL. He has to prove that it was a third party, the plaintiff, or a natural force that caused the plaintiff’s injury.[67] Under the equitable liability principle in the TLL, if neither the owner nor the plaintiff was at fault, the owner should still share the plaintiff’s loss to the best of his ability.[68] The payment is “not absolutely mandatory in nature.”[69] The share that the owner should pay depends on his financial situation. The better the financial situation of the owner, the more he would have to pay for the cost of the plaintiff’s injuries.[70]

B. Wen v. Owner

On May 11, 2000, Mr. Hao was chatting with his neighbor outside a residential building, in which twenty-two families lived.[71] An ashtray suddenly fell from the building and fractured Hao’s skull. Hao became mentally disabled and lost his ability to speak. Unable to find out who threw the ashtray, Hao sued the twenty-two families in the building. Except for two families that proved that they were not in the building, the remaining twenty families failed to prove that they did not throw the ashtray. Therefore, the court held that the twenty families were responsible for equal shares of Hao’s injuries.[72]

C. Article 87 and Socialized Liability

Under Article 87, socialized liability is imposed because there is no well-developed social safety net for injured victims to seek recovery. If a court followed traditional fault-based principles, a victim injured by a falling object would likely be left without a remedy because the costs to find the true tortfeasor and hold him liable would be prohibitively high.

Article 87, which enjoys support from both the public and the academia, has changed urban living in various ways. Some homeowner management companies install security cameras to catch wrongdoers, while others require occupants to contribute to a designated fund, which covers the costs for injuries caused by falling objects. Article 87 also makes neighbors to be vigilant about suspicious acts in the community. In addition, the Article spreads the loss of accidents in multi-unit dwellings by increasing the costs of living in them.

V. Posthumous Defamation

One of the unique aspects of the Chinese tort law on emotional distress is that it allows close relatives of the deceased to sue for emotional damages when a tortfeasor damages the reputation or invades the privacy of the deceased. Even though there is no statutory basis for this type of lawsuit, the Supreme People’s Court issued an interpretation that recognizes the right of a posthumous reputation of a deceased person:

Close relatives of the dead can sue for emotional damages against a tortfeasor who
(1) infringed upon the dead’s name, likeness, reputation, or honor by insulting, libeling, disparaging, vilifying, or by other means contrary to public interests or morality; or
(2) illegally disclosed or used the privacy of the dead or infringed upon the privacy by other means contrary to public interests or morality.[73]

A. Chen v. Wu

In 1999, Wu Si published a book, Mao’s Peasant—Chen Yonggui, which was serialized in the Beijing Youth Daily.[74] Chen, who passed away in 1986, held the office of Vice Premier of the State Council (the central cabinet of the Chinese government) from 1975 to 1980, even though he was illiterate. Rising from a peasant in a remote village in the Shanxi Province to a member of the Politburo of the Party, Chen owed his sudden fame primarily to Mao’s disastrous policy choices during the peak of the Cultural Revolution.[75] In the book, Wu portrayed Chen’s early life, especially his role during the Japanese occupation from 1937 to 1945. Relying on published articles, including an article by Chen’s elder son, and other official archives, Wu claimed that Chen was a member of the “peace maintenance group,” a puppet government established by the Japanese to manage affairs in the occupied areas.[76] In that position, Chen was responsible for collecting grains and vital information for the Japanese army. After World War II, Chen was arrested and humiliated for his role in aiding the Japanese occupiers. In his application for Party membership after the war, Chen acknowledged his past involvement in the “peace maintenance group” and sought the Party’s forgiveness. All these files regarding Chen’s history were well kept in the Party’s archives. Wu cited the files together with other historical records, memoirs, and interviews in his book to support his claim.[77]

In 2002, Chen Yonggui’s wife, and other close relatives sued Wu for defaming the late Vice Premier through Wu’s disclosure of Chen’s treasonous past, and also for degrading Chen’s status as a prominent state official and as a member of the respected party elite. The relatives requested the court to order Wu and the publisher to issue a public apology to Chen’s family. In addition, the relatives claimed that they suffered emotional distress because of Wu’s book and sought RMB 100,000 ($14,000) for emotional damages.[78]

In defense, Wu and the publisher provided a detailed list of publications, archives, personal memoirs, and interviews, claiming that the author did not fabricate the facts with intent to defame Chen. In fact, there was an article written by Chen’s elder son, which detailed Chen’s role in the “peace maintenance group.”[79] Wu claimed that he accurately depicted Chen’s early life based on his extensive research and interviews. While the court did not dispute that the author had no intent to smear Chen, it held that Wu cited unauthoritative sources because neither the Party nor the government validated personal memoirs. Furthermore, the author had failed to verify the authoritativeness and authenticity of the sources that he cited in the book. The court’s reasoning instantly drew criticism from the academia. Professor He Bing commented:

The judge here probably wanted to say that authors must rely on authoritative materials in analyzing historical events. The problem is, however, what are authoritative materials? Who will decide what kinds of materials are authoritative? Should the judge have the power to decide what materials that an author must use in his academic research? This judgement is questionable because it suppresses academic freedom. Should authors be legally liable for their mistakes in the research? If the answer is yes, it will have a chilling effect on academic research.[80]

Despite strong criticism, the appellate court affirmed the trial court’s decision that Wu and the publisher must issue an official public apology in the Beijing Youth Daily and pay RMB 20,000 ($2,960) for emotional damages.

Unlike previous cases, the court in Chen v. Wu did not apply the socialized liability principle to bridge the wealth gap between the two parties. As a prolific writer, Wu did not face financial hardship in paying the damages. Instead, the court applied the socialized liability principle to prohibit Wu from questioning the official narrative of the Party’s history. Through this case, the court essentially warned liberal intellectuals that any attempt to shed a different light on the Party’s legacy, even with credible evidence, would lead to a prosecution for defamation, a serious offense punishable by fines, forced apology, or even imprisonment.[81] The logic is simple: the Party’s historical accounts, however embellished, serve as the foundation for its legitimacy to govern the country. Questioning the Party’s past leads the public to lose faith in the Party and thus threatens social stability. In Chen v. Wu, the versatile aspect of socialized liability principle became the basis for the court to manipulate the defamation law to safeguard the Party’s unblemished image.

VI. The Complications of Socialized Liability

The principle of socialized liability plays a unique role in the Chinese legal system. If a court adjudicates tort cases exclusively on a fault basis, some victims will be remediless because not all defendants are at fault. By leaving a victim empty-handed, however, a court runs the risks of creating serious social problems. A victim, who has lost his or her earning capacity due to injuries, often ends up being both financially insolvent and emotionally distraught. In the absence of a well-maintained social safety net, uncompensated victims sometimes end up petitioning the government for the rest of their lives because they have no other options. Victims urge the government to award them with a sense of justice and welfare.

For a Chinese court, compensating victims is more important than determining whether the defendants are at fault. As one Chinese scholar observed, the principle of equitable liability is a “Robin Hood” style social redistribution, by which the court compels the rich defendant to pay the poor victim regardless of fault.[82] The principle, which is deeply rooted in socialism, has gone far beyond the realm of traditional tort law.[83] In this sense, the Chinese government uses the tort law to achieve multiple goals, including providing social benefits to victims and equalizing the wealth between the rich and poor. However, the socialized liability principle is not a panacea for legal disputes in China, especially when the defendant is the government.

A. The Case of Ji Zhongxing

Ji, like millions of migrants, left his village and went searching for a new life in the coastal cities.[84] Upon his friend’s advice, Ji bought a motorbike and began to offer rides for money, competing for customers with licensed taxi drivers. During a crackdown on illegal taxis in 2005, a group of police officers caught Ji, and he was severely beaten. When Ji woke up in the hospital, he realized that he was permanently paralyzed. Ji brought an administrative lawsuit against the officers and local government seeking compensation of RMB 334,782.49 ($48,658.12).[85] He also sued the officers in a tort suit, claiming RMB 338,266.99 ($49,134.34) in damages.[86] The local court, which is an integral part of the government, dismissed both of Ji’s lawsuits for lack of evidence.[87] Without compensation, Ji quickly exhausted his savings by paying his medical bills. His brother brought him back to the village, where his father and other relatives took care of him.

Losing faith in the justice system, Ji petitioned the local government, which denied any wrongdoing.[88] Ji went on to petition the central government in Beijing, which sent the case back to the local government. Under internal pressure, the police department finally offered Ji RMB 100,000 ($14,503), but it stated clearly that the payment was for humanitarian assistance only and was not intended as an admission of guilt.[89] The police department asked Ji to sign a document, which Ji did not fully understand. In fact, the document he signed waived any further claim against the department. After spending nearly all of the payment to settle overdue medical bills, Ji remained destitute.[90] The police department rejected Ji’s subsequent petitions by claiming that his acceptance of the payment legally barred him from pursuing any further claims. Ji was furious that the police department had tricked him into accepting the settlement offer without a chance to seek independent counsel. From then on, Ji was determined to protest the injustice at the Beijing International Airport.[91]

On July 21, 2013, Ji detonated a homemade bomb while he was sitting in his wheelchair in the front lobby of the Beijing International Airport.[92] Except for Ji, no one was hurt because he loudly warned travelers about the bomb and he did not throw it into the crowd.[93] The explosion caused severe injuries to Ji’s left hand, which was subsequently amputated.[94] During the trial, Ji’s lawyer argued that he did not intend to hurt anyone and used the airport lobby to protest the wrongs that the local government had done to him.

Despite finding no intent, the court convicted Ji of the crimes of endangering public safety and engaging in an act of terrorism and sentenced him to prison for six years.[95] To the government’s surprise, Ji won public sympathy.[96] If the local court had applied the socialized liability principle in the first place and required the police to compensate Ji, he would not have taken the extreme measures of protesting the injustice.[97]

In cases such as Ji’s, the court often finds itself in a quandary: ruling in favor of the victim will jeopardize the judge’s opportunity for reappointment or promotion, but ruling for the government will leave the uncompensated victim with no choice but to resort to informal and sometimes extreme measures, resulting in public disturbance. Ji’s case demonstrates that the application of the socialized liability principle can be complicated when the government is a defendant.[98]

VII. Mass Torts, Socialized Liability, and Disutility of the Tort Law

The primary purpose of the socialized liability principle is to maintain social stability. The application of the principle can take various forms. In dealing with negligence disputes among a small number of parties, courts use the principle to bypass fault-based analyses and directly order a rich defendant to pay for a poor plaintiff’s injuries. In doing so, courts prevent disgruntled plaintiffs from threatening social stability.

In mass tort cases, the government circumvents the entire legal proceeding by invoking the socialized liability principle. This dramatic application of the principle enables the government to prevent a large group of tort victims from filing a class action, which is deemed to be a serious threat to the foundation of the authoritarian regime. Top leaders of a local government may face demotion or even criminal investigation if a class action or public protest erupts under their watch. Thus, socialized liability has transformed mass tort from a legal issue into a sensitive political issue that courts are ill-equipped to resolve.

To suppress any form of class actions and public protests in mass tort cases, the government usually takes the following measures: first, the government instructs courts to dismiss mass tort claims. When courts cease to apply the law, the TLL becomes a set of empty promises. Chinese courts are an integral part of the government, which controls the courts’ funding and appointments.[99] Instead of being an independent branch, courts submit to the top leaders of the government. For example, the government of Guangxi Province issued a notice directing courts not to take 13 kinds of cases, all of which involved sensitive issues, including mass torts.[100] Even though Chinese scholars criticized the notice for encroaching upon judicial independence,[101] the government has continued to instruct courts, through internal directives, not to take cases that it deems sensitive.[102] Furthermore, the government prohibits lawyers from representing mass tort plaintiffs. Lawyers who violate the government instruction will face disciplinary sanctions, disbarment, detention, or even imprisonment.[103]

Second, the government forces the mass tort victims to accept low compensation and sign a promise not to pursue further litigation. In doing so, the government avoids judicial proceedings and minimizes the social impact of mass tort litigation, protects industry, and preserves social stability. Thus, the socialized liability principle applies in mass tort cases through an extra-judicial process firmly controlled by the government. The socialized liability principle in mass torts cases also denotes that it is both a socialist virtue and absolute obligation for mass torts victims to willingly accept government-set compensation, refrain from coordinating with other victims to protest inadequate settlement, and make personal sacrifices for the common good—a stable society.

A key reason that the government restricts courts from taking mass tort cases is its concern that open litigation could expose corrupt practices and other crimes committed by government officials.[104] In mass tort cases, the tortious parties are usually SOEs or enterprises with strong government backing. Any negative information about the defendant could taint the government’s image and cause the public to lose faith in the government.[105] Another reason could be that the government has little confidence in judicial resolution of mass tort cases.[106] An unfavorable judgement, for instance, would cause victims to petition the central government in Beijing.[107] Because the local leaders are not elected, but are appointed by the government at the higher level, they are accountable only to the higher government.[108] Maintaining social stability is the most important job for local leaders. Victims’ petitions or protests would show that the local leaders have failed to do their jobs.[109] Therefore, the government would rather handle mass tort cases by itself than having the courts resolving the issues.

Even without government instructions, judges are reluctant to take sensitive cases.[110] They have the same concern that dissatisfied victims would take to the streets demanding adequate compensation, costing them their political career. Furthermore, the government evaluates judges annually based on a set of criteria, including whether parties accept their judgements and whether a higher court frequently overturns their judgements.[111] Unlike adjudicating simple civil cases, judges in mass tort cases run a higher risk of provoking protests, which diminishes judges’ opportunity for reappointment and promotion.[112]

Courts also avoid sensitive cases to increase the rate of resolution (the ratio of resolved cases to admitted cases) and thereby creating the impression that the courts are efficient. A higher rate of resolution can also serve as a basis for judges to receive a sizable year-end bonus.[113] It would take courts more time and resources to handle mass tort cases than regular cases, and there is no certainty that courts could resolve them to the government’s satisfaction.[114] Thus, it is in the best interest of a court to deny mass tort cases. In addition, court fees are based on a percentage of the amount in dispute. Even though the law requires courts to submit all court fees to the state treasury, courts still have various ways to reserve a portion of filing fees for their own use.[115] Therefore, courts have no financial incentive to take mass tort cases.[116]

In refusing mass tort cases, courts can exploit multiple loopholes in the civil procedure law. Upon receiving a complaint, courts can remain silent without giving an official rejection order,[117] and essentially refuse to hear the case. In addition, courts sometimes even refuse to issue receipts for evidence presented to the court,[118] despite the requirement that they do so.[119] This may be due to the fear that the plaintiffs will use the receipts as evidence to hold the court accountable. Perhaps due to these vagaries, studies have shown that less than one percent of all environmental cases in China are resolved through the court systems.[120]

Such practice would not be necessarily illegal as the procedure law provides the courts with broad discretion to deny claims. According to Articles 119 and 123 of the Civil Procedure Law of China, courts should accept a case when the plaintiff alleges “specific claims, facts, and reasons.”[121] Many courts have interpreted this as requiring plaintiffs to produce substantial evidence of a claim before the court decides whether to accept the case for review.[122] Thus, plaintiffs must produce persuasive evidence of their claim to convince the court to hear the case.[123] Some courts have even required that plaintiffs demonstrate a causal link in the evidence before they will accept a case.[124] The following event demonstrates how the local government relied on the socialized liability principle to sidestep the court system and forced the victims to accept inadequate compensations.

A. Students Killed in the Sichuan Earth Quake

On May 12, 2008, a 7.9 magnitude earthquake in Sichuan Province caused 68,712 deaths, with an estimated 18,000 missing, most of whom were presumed dead.[125] In some areas, only school buildings suffered total damage while other buildings survived, which led the public to suspect shoddy construction and corruption.[126] Since the earthquake occurred in the afternoon during regular school session, students did not have a chance to escape the buildings. In a high school in Juyuan, for example, more than 270 students died.[127] The Beichuan Middle School building, moreover, was reduced to rubble in just 5 seconds.[128] According to a report released by the Sichuan Education Bureau, the earthquake destroyed 7,000 school classrooms, killing between 5,000[129] to 10,000 school children.[130] Approximately one in seven among the dead was a school child. It remains unknown how many school children were severely injured or disabled. As a result of the one-child policy at the time,[131] most of the school children who died or were injured were the only child in their family, which exacerbated the pain and suffering of their parents.[132]

The shoddy construction was plainly evident as untrained eyes could find irregularities. Parents and rescuers reported that the steel rods found in the broken concrete slabs were no thicker than a ball point-pen.[133] The twisted steel rods from the debris were so weak that an artist straightened them with his bare hands.[134] Experts from the United States and China agreed that the buildings could have withstood the earthquake if proper steel and concrete materials had been used during their construction.[135] The China Daily, a government newspaper, stated, “We cannot afford not to raise uneasy questions about the structural quality of school buildings.”[136]

Tort litigation would have shed light on whether the earthquake, the construction defects, or a combination of the two, caused the collapse of the school buildings. The construction firms would have had ample opportunity to defend themselves if they could show they exercised reasonable care in selecting construction materials and complying with the building code. If the construction defects indeed were the cause of the destruction of the school buildings, the parents would justifiably hold the negligent builders liable and put the public on notice of the builder’s tortious conduct to prevent future harm. If litigation uncovered illegal acts, such as corruption, concerned parties including the builders would have been subject to criminal prosecution. Tort lawsuits would have provided an opportunity for both parties to seek justice.

It seems that tort litigation is complementary to the government’s efforts to resolve disputes and maintain social stability. The parents, however, did not even have a chance to protest near the court house. An armed anti-riot police squad forcefully dispersed a protest organized by about 100 parents, who held their deceased children’s pictures in front of the court building.[137] In a separate incident in 2009, the police detained an eight-year-old boy along with his father overnight in prison in order to locate the boy’s uncle who had plan to petition the government for the death of his two son in the earthquake.[138]

Despite pledging to investigate the collapsed buildings, the local government ended the investigation hastily by concluding that the earthquake was the sole cause of the collapse of the school buildings.[139] The government may have feared that a thorough investigation would have unearthed corruption or other illegal acts, causing even more public resentment and ultimately threatening social stability. To prevent any further investigation, the government cordoned off[140] and “bulldozed the remains of many schools” only a month after the earthquake.[141] Subsequently, the central government issued a report attributing the deaths and injuries of school children to shoddy construction, but it did not serve as a legal basis for parents to sue because the restrictions on civil litigation were still in place.

By circumventing the court proceedings, the government forced the parents to accept a comprehensive package, which paid $8,800 for the death of a child and $5,600 per parent for a pension.[142] The pension payment was intended to replace the benefits that the parents would have received after retirement if their children lived to adulthood.[143] The parents were initially not willing to accept the payment because it was too low. Once the parents accepted the compensation, they had to sign a contract promising not to protest against the government about the schools that collapsed. Instead of admitting responsibility for mismanagement, the contract portrayed the payment as a social benefit that the government granted to the parents. To receive the “benefit,” the parent had to agree, “From now on, under the leadership of the party and the government, we will obey the law and maintain social order……We vow resolutely not to take part in any activity that disturbs post-earthquake reconstruction.”[144]

VIII. Conclusion

Through the lens of the socialized liability principle, the analysis of leading case sheds light on the various unique features of the TLL. Socialized liability allows Chinese courts to hold a party who is not at fault liable for victim’s injuries. Conversely, it also permits courts to deny claims against a party who is at fault in mass tort cases in the name of maintaining social stability. Despite its elusiveness, socialized liability serves a vital purpose as it ensures that the injured victim will receive compensation in non-class action litigation regardless of whether the defendants are at fault in traditional negligence terms. Otherwise, the government fears that uncompensated victims may resort to undesirable dispute-resolution channels, such as openly petitioning the government, protesting in front of government buildings, posting embarrassing exposés online, or venting anger through acts that threaten public safety, all of which could undermine social stability.[145]

In cases of mass torts, however, the government fears that victims suffering similar injuries could form an influential group and collectively fight in court against tortious SOEs as well as private companies possibly backed by the government for corrective reasons. Inquiries into fault could expose problems of mismanagement and corruption, attracting unnecessary attention and arousing public resentment. The advent of social media, albeit tightly censored in China, makes it difficult for the government to block information. The strategy for the government, therefore, is preemptively to prevent victims from congregating online or on the streets by compelling them to accept government-determined compensation, although grossly inadequate in monetary terms, and to promise not to pursue further litigation. The government then directs courts not to take their claims, bars lawyers from litigating mass tort cases, and invokes criminal laws to punish disgruntled agitators. The government takes all these measures in the name of maintaining social stability, the cornerstone of the dubious legal concept of socialized liability.

Scholars often refer to Article 24 as an example of equitable liability, which is clearly a misnomer as it is certainly inequitable to hold a party not at fault liable in cases where there is no justification for imposing strict liability. Yet, scholars are correct that there is a “benefit” created by compelling a non-fault party to pay or by shielding a party who is at fault from litigation. But they have missed the crucial question of where the “benefit” goes. The analysis based on socialized liability principle reveals that the “benefit” goes to the state, which fails to provide a social safety net. In this sense, courts have become a tool for the government to redistribute wealth, compensate the victims, and maintain social stability. The concerns about social stability and state interests take precedence over any analysis of fault in non-strict liability cases. Even though socialized liability defies the traditional notion of justice, it remains a pragmatic tool in the TLL precisely because of its flexible, adaptive, and ambiguous nature.

* Chenglin Liu is a Professor of Law, St. Mary’s University School of Law. “I am grateful to my colleagues Vincent Johnson, John Teeter, Bonita Roberts, and Bernie Kray for their valuable comments. I would like to express my gratitude to Yang Chenggeng, Gao Qi, Wang Yongxia, Guo Dong and other Chinese law professors for their insights, encouragement and friendship. They helped me with finding Chinese tort law cases and commentaries, without which this article would not have been possible. Also, an anonymous commentator provided his or her critical feedback on the first draft of the article, for which I am grateful. I would also like to thank Katie Neidig, Cali Franks, and Daniella Alvarado for their excellent assistance.”

[1] Zhonghua Renmin Gongheguo Qinquan Ze Ren FA (中华人民共和国侵权责任法) [Tort Liability Law of the People’s Republic of China] (promulgated by the Standing Comm. Nat’l People’s Cong., Sept. 26, 2009, effective July 1, 2010), http://www.gov.cn/flfg/2009-12/26/content_1497435.htm.

[2] Id.

[3] Id.

[4] Id. From Chapter I to Chapter IV, the TLL covers General Provisions, Constituting Liability and Methods of Assuming Liability, Circumstances to Waive Liability and Mitigate Liability and Special Provision on Tortfeasors.

[5] See id. at Chapter V to Chapter XI.

[6] TLL, supra note 1, at Art. 1.

[7] Id. at Art. 2.

[8] See generally Yang Gengde (阳庚德), Sifa Chengfa Lun (私法惩罚论) [On The Punitive Nature of Private Law], 21 (6) PEKING U. L. J. (中外法学) 835, 835 (2009). (arguing that it is not settled whether tort law, as a private law, should punish tortfeasors)  Li Xia (李霞), Gaokong Paowu Zhiren Sunhai de Falv Jiuji (高空抛物致人损害的法律救济) [The legal remedies for injuries caused by falling objects], J. Shandong U. (Soc. Sci. Ed,) (山东大学学报) 113, 116 (2011)  (arguing that Article 87 of the TLL should be based on the principle of private law); Sun Zhengwei (孙政伟)， Lun Sifa Shang de Chengfa （论私法上的惩罚）[The penalties based on private law], 140 (5) J. Zhejiang Gongshang U. (浙江工商大学学报) 53, 54 (2016) (arguing the German jurisprudence on the dichotomy of private and public law has deeply influenced the study of Chinese civil law); Zhang Jiayong (张家勇)，Lun Tongyi Taopai Ren Dui Taopai Jidongche Zhaoshi de Peichang Zeren–Yi Gongsi Fa de Guanxi Wei Shijiao (论同意套牌人对套牌机动车肇事的赔偿责任—以公私法的关系为视角) [The liabilities for a driver who fraudulently uses a license plate and causes injuries to others—from a perspective of private and public law] 203 (12) JiNan J. (Phi. & Soc. Sci. Ed.) (暨南学报), 101, 108 (2015) (deeming tort law as a private law); Wu Yuanyuan (吴元元), Falv Fu’ai Zhuyi yu Qinquanfa zhi Shi (法律父爱主义与侵权法之失) [Legal paternalism and the failure of tort law], 70 (3) J. East China U. POL. Sci. & L. (华东政法大学学报)133, 133 (2010) (stating that tort law belongs in the category of private law); Bai Jiang (白江), Woguo Ying Kuoda Chengfa Xing Peichang zai Qinquanfa Zhong de Shiyong Fanwei (我国应扩大惩罚赔偿在侵权法中的适用范围) [China should expand the scope of their application of punitive damages in tort cases], 9 (3) Tsinghua U. L. J. 111, 118 (清华法学) (2015) (arguing that a tortious act violates private law).

[9] Shen Huiwen (申惠文), Woguo 《 Qinquan Zeren Fa 》 Sunhai Buchang Tiaokuan De Jieshi Lun (我国《侵权责任法》损害补偿条款的解释论) [Comments On The Interpretation Of The Compensation Provisions In The TLL] 91, J. of SW. U. of Pol. Sci. & L.(西南政法大学学报) (2014) (arguing the TLL is the product of the socialist jurisprudence), http://article.chinalawinfo.com/ArticleFullText.aspx?ArticleId=91118; Yuan Wenquan and Yang Tianhong (袁文全 杨天红)，Jiangou Da Guimo Qinquan Zonghe Yingdui Tixi de Biyao Xing Ji Jiben Shexiang—Jiyu Qinquan Zeren Fa de Lifa Mudi建构大规模侵权综合应对体系的必要性及基本设想—基于《侵权责任法》的立法目的 [The necessity of constructing a comprehensive responsive system for dealing with mass torts—A study of the legislative purpose of the TLL], 12 J. S.W. U. Nationalities (L. Sci. Ed.) (西南民族大学学报)，93，95（2014）(arguing that mass torts could seriously damage public trust in the government making it necessary to establish a system to provide adequate compensation for tort victims, who could become a potential force to cause social unrest if they are left uncompensated); Yuan Wenquan and Yang Tianhong (袁文全 杨天红)， Zhengfu Jiuji Da Guimo Qinquan de Falv Kaoliang政府救济大规模侵权的法律考量 [The legal consequences of remedies provided by the government in mass torts], 200 (3) J. Soc. Sci. (社会科学辑刊) 90, 90-92 (2012) (arguing the lack of adequate compensation for tort victims threatens social stability);  Wu Liangjun (吴俍君)， Da Guimo Qinquan Sunhai Duoyuan Jiuji Jizhi de Jiangou大规模侵权损害多元化救济机制的建构 [A multi-faceted approach to providing remedies in mass tort cases], 26 (6) J. Sichuan U. Sci. & Eng. (Soc. Sci. Ed.)（四川科技大学学报, 66, 68-70 (2011) (arguing that providing adequate remedies for victims in mass tort cases is conducive to maintaining social stability); Wang Liming (王利明), Jianli he Wanshan Duoyuan Hua de Shouhai Ren Jiuji Jizhi 建立和完善多元化的受害人救济机制 [Establishing and improving a well maintained and multifaceted system to provide tort victims with legal remedies]，4 J. Chinese L. (中国法学) 146, 150 (2009) (claiming the lack of remedies for tort victims would cause social unrest).

[10] The above-cited articles invariably argue the necessity for the government to establish funds for tort victims to maintain social stability. While the government plays a crucial role in providing tort compensation, it frequently directs courts to dismiss torts case brought by individual tort victims, especially, in mass tort cases. See also Section 7 of the article.

[11] See Cao Xianfeng (曹险峰)， Lun Gongping Zeren De Shiyong —— Yidui 《 Qinquan Zeren Fa 》 Di 24 Tiao De Jieshi Lun Yandu Wei Zhongxin， (论公平责任的适用——以对《侵权责任法》第24条的解释论研读为中心) [The Application of Article 24 of the TLL and the Equitable Liability Principle], J. N.W. U. Pol. Sci. & L. (Legal Sci.), (西北政法大学学报) 104, 105, (2012).

[12] Chen Benhan (陈本寒), Chen Ying (陈英), Gongping Zeren Guize Yuanze De Zai Tantao—Jianping Woguo 《 Qinquan Zeren Fa 》 Di 24 Tiao Lijie Yu Shiyong, (公平责任归责原则的再探讨—兼评我国《侵权责任法》第 24 条的理解与适用) [Comments on Understanding and Applying Article 24 of the TLL], 172 L. REV. (法学评论), 136, 140 (2012).

[13] Id.

[14] Id.

[15] See Cao, supra note 11.

[16] Id.

[17] Id.

[18] Percy R. Luney Jr., Traditions and Foreign Influences: Systems of Law in China and Japan, 52 Law & Contemp. Probs. 129, 140 (1989) (“The German-style Soviet Code’s influence is readily apparent in the General Principles’ ‘socialist’ provisions.”).

[19] Zhonghua Renmin Gonghe Guo Minfa Tongze (中华人民共和国民法通则) [The General Principles of Civil Law (GPCL)] (promulgated by the Nat’l People’s Cong. April 12, 1986, effective Jan. 1, 1987) (Lawinfochina).

[20] Chen Ke (陈科), Gongping Zeren Yiban Tiaokuan de Sifa Shiyong—Yi 100 fen Qinquan An’li Panjueshu Wei Fenxi Yangben (公平责任一般条款的司法适用—以100份侵权案件判决书为分析样本) [The study of  the equity principle in the judicial practices by examining 100 torts cases], 1 J. Application of L. (法律适用) 11, 11 (2015). (stating that Article 24 of the TLL is derived from Article 132 of GPCL)

[21] Dan B. Dobbs, Paul T. Hayden, and Ellen M. Bublick, Hornbook on Torts (2^nd ed.), 4 (2016). (“In the great majority of cases today, tort liability is grounded in the conclusion that the wrongdoer was at fault in a legally cognizable way.”).

[22] See generally, Justin Yifu Li, Lessons of China’s Transition from a Planned Economy to a Market Economy, The Distinguished WSPIZ and TIGER Lecture at Kozminski School of Management, Warsaw, Poland, Dec. 17, 2004, https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1996/11/cj16n2-3.pdf.

[23] Scott Cendrowski, China’s Global 500 Companies Are Bigger Than Ever—And Mostly State-Owned, Fortune (Jul. 22, 2015), http://fortune.com/2015/07/22/china-global-500-government-owned.

[24] See Part 7 of this Article.

[25] See Susan Trevaskes et al. ed., The Politics of Law and Stability in China, 1 (2014).

[26] Xin Ren, Tradition of the Law and Law of the Tradition, 47–64 (1997).

[27] See Roger V. Des Forges, Ning Luo, Yen-bo Wu, Chinese Democracy and the Crisis of 1989: Chinese and American Reflections, 109 (1993). By China’s official estimates, the number of Chinese students who study abroad each year is between 700,000 and 800,000. See, Luo Wangshu, More Chinese Set to Study Overseas, China Daily, Mar. 8, 2017, http://www.chinadaily.com.cn/china/2017twosession/2017-03/08/content_28470916.htm.

[28] See Jinghan Zeng, The Chinese Communist Party’s Capacity to Rule: Ideology, Legitimacy and Cohesion, § 1.2 (2015).

[29] See Ian Talley, China Is One Of The Most Unequal Countries In The World, IMF Paper Says, Wall. St. J. (Mar. 26, 2015), https://blogs.wsj.com/economics/2015/03/26/china-is-one-of-most-unequal-countries-in-the-world-imf-paper-says/.

[30] See Ansuya Harijani, China Wealth Gap May Be Far Worse Than Official Estimates, CNBC (Apr. 29, 2014),  https://www.cnbc.com/2014/04/29/china-wealth-gap-may-be-far-worse-than-official-estimates.html.

[31] See Wei Zhang, Understanding the Law of Torts in China: A Political Economy Perspective, 11 U. Penn. Asian L. Rev. 171, 194 (2016).

[32] Id.

[33] Kjeld Erik Brødsgaard (ed.), Chinese Politics as Fragmented Authoritarianism: Earthquakes, Energy and Environment, 89 (2016).

[34] Gu Weixia, Responsive Justice in China During Transitional Times: Revisiting the Juggling Path Between Adjudicatory and Mediatory Justice, 14 Wash. U. Glob. Stud. L. Rev. 49, 54 (2015) (stating that the government required judges to resolve cases tht would cause social unrest through mediation). See also, Lawyers Warned to Shun Milk Suits, South China Morning Post,  Sept. 23, 2008, http://www.scmp.com/article/653669/lawyers-warned-shun-milk-suits (stating that the government prohibited lawyers from representing victims in mass torts cases); Jun Xie and Lijuan Sun, Access to Collective Litigation in China: A Tough Work, 3 J. Pol. & L. 45, 48 (2010), http://www.ccsenet.org/journal/index.php/jpl/article/view/5277.

[35] TLL, supra note 1, at Art. 24.

[36] During the writing of this article, the author has reviewed hundreds of cases that applied Article 24 of the TLL from the Supreme People’s Court database, which is available at wenshu.court.gov.cn. From the reviewed cases, it is extremely difficult to find the reasoning from courts, especially lower courts, why and when Article 24 is applicable.  The following are typical examples where courts found that defendants were not at fault, but ordered them to share plaintiffs’ losses.

1. In China, it is a custom for the groom to carry the bride to their decorated bedroom, a ritual that symbolizes a harmonious and happy life. In such as a process, Luo Wenjun slipped and fell on a wet floor while he was carrying his bride Qiu Yingxia. As a result, Qiu flew out of Luo’s arms and hit a pole, receiving severe injuries. Qiu sued Luo for medical expenses and living costs. Although the court found Luo free from fault, it ordered him to pay Qiu RMB 1,045 ($150) based on Article 24 of the TLL. The court did not explain why Article 24 was applicable in this case. Qiu Yingxia Yu Luo Wenjun Jiankang Quan Jiufen Yishen Minshi Panjue Shu岳映霞与罗文军健康权纠纷一审民事判决书 (The Court Order in the Civil Case of Qiu Yingxia v. Luo Wenjun), (甘肃省秦安县人民法院) (Gansu Province Qin’an County People’s Ct., Mar. 24, 2014) <wenshu.court.gov.cn.>;
2. In this case, a student slipped and fell on his way from the school’s cafeteria to the dormitory, causing him to lose four front teeth. The student filed a lawsuit against the school for negligence. Even though the court found that the school was not negligent, it ordered that the school pay the plaintiff RMB 14,148 ($ 2,200) for the implantation of his teeth. The court cited Article 24 of the TLL without explaining why and how it applied in this case. Li Yang Yu Pingdu Shi Dijiu Zhongxue Yishen Minshi Panjue Shu李扬与平度市第九中学一审民事判决书 (The Court Order in the Civil Case of Li Yang v. Pingdu No. 9 Middle School), (山东省平度市人民法院) (Shandong Province Pingdu County People’s Ct., June 20, 2013) <wenshu.court.gov.cn.>;
3. In this case, a student broke his hands in a physical education class while he attempted to pass a pommel horse under the teacher’s supervision. The court agreed with the school that the pommel horse routine for basic gymnastic education was a state-required course that all students must learn and pass the test. However, based on Article 24 of the TLL, the court required the school to share 40% of the student’s loss. Again, the court did not elaborate why the article was applicable. Wei shijie Yu Shanghai Shi Liaoyang Zhongxue Jiaoyu Jigou Zeren Jiufen Yishen Minshi Panjue Shu魏仕杰与上海市辽阳中学教育机构责任纠纷一审民事判决书 The Court Order in the Civil Case of Wei Shijie v. Shanghai Liaoyang Education Bureau (上海市杨浦区人民法院) (Shanghai Yangpu District People’s Ct., April 20, 2015) <wenshu.court.gov.cn.>;
4. As guests, the plaintiff and defendant attended a party to celebrate the completion of a new house. According to the local custom, guests participated in a game to hunt for steam-buns. During the game, the defendant accidently fell and landed on the plaintiff’s right foot, causing injuries. The court found that the defendant was not at fault, but it still ordered him to pay RMB 1,300 ($200) for the plaintiff’s medical expenses. In addition, the court ordered the defendant to share one half of the court filing fees, RMB 400 ($60). The court only cited Article 24 of the TLL, but did to offer any explanation why the provision was relevant to the case. Zhou Bifeng Yu Fang Taiyuan Shengming Quan, Jiankang Quan, Shenti Quan Jiufen Yishen Minshi Panjue Shu 周碧凤与方泰源生命、健康权、身体权纠纷一审民事判决书The Court Order in a Civil Case of Zhou Bifeng v. Fang Taiyuan Regarding Rights of Life, Health and Boby (浙江省建德市人民法院) (Zhejiang Province Jiande People’s Ct., Dec. 5, 2014) <wenshu.court.gov.cn.>;
5. Wu voluntarily helped Lu to fix a waterpipe without expecting to receive payment. Wu suspended his work because he did not feel well. Several hours later, Wu died of heart failure. Wu’s relatives sued Lu for damages. Even though the court did not find fault with Lu, it held that Article 24 was applicable and required Lu to share 10% of Wu’s medical and funeral expenses. Unlike other cases, the court provided two lines in the judgement reasoning that its holding was to promote the spirit of voluntariness and mutual assistance. In fact, such a ruling is counterproductive, because people would refuse voluntary help for fear of legal liability. Xiong Danying, Wu Maosheng Yu Lu Xiaofeng Yiwu Banggong Ren Shouhai Zeren Jiufen Yishen Minshi Panjue Shu熊单英、吴茂盛与鲁小凤义务帮工人受害责任纠纷一审民事判决书 (The Court Order in the Civil Case of Xiong Danying, Wu Maosheng v. Lu Xiaoyi in a dispute involving death in the course voluntary work (湖北省武汉市武昌区人民法院) (Hubei Province Wuhan City Wuchang District People’s Ct., Dec. 1, 2015) <wenshu.court.gov.cn.>.

[37] Xi Xiaoming (奚晓明), Zhonghua Renmin Gongheguo Qinquan Ze Ren Fa Tiaowen Lijie Yu Shiyong (《中华人民共和国侵权责任法》条文理解与适用) [The Understanding and Application of the TLL], (2010).

[38] See id. at 181–187.

[39] See id. at 182.

[40] Id.

[41] Id. at 185.

[42] Id.

[43] Id. 

[44] Id.

[45] Id. at 186.

[46] Id.

[47] Id.

[48] Id. at 184.

[49] The numbers are based on a search on July 21, 2017 on the Supreme People’s Court’s website, www.wenshu.court.gov.cn with the searcher terms: 《中华人民共和国侵权责任法》第二十四条. The search result is available at https://goo.gl/8GV62k (See the left side of the webpage).

[50] Id.

[51] Id. (See the upright corner of the web page.)

[52] The summary of this case (Ou Zuming v. Hydraulic Power) is based on three reports:

1. Ou Zuming Yu Chongqing Hangfa Jiafu Dianli Kaifa Youxian Gongsi Caichan Sunhai Peichang jiu Fen Shensu, Shenqing Zaishen Minshi Caijueshu (欧祖明与重庆航发嘉涪电力开发有限公司财产损害赔偿纠纷申诉，申请再审民事裁决书) [The Court Order of the Property Disputes between Ou Zuming and Chongqing Hangfa Jiafu Hydraulic Power Co.] <shttp://wenshu.court.gov.cn/ (The link is no long active. A print copy of this report is on file with the author)> (Chongqing High. People’s Ct. Aug. 22, 2016) (China).  {See attachment 5 Ouyang}
2. Ou Zuming Yu Chongqing Hangfa Jiafu Dianli Kaifa Youxian Gongsi Caichan Sunhai Peichang Jiufen Er Shen Minshi Pan Jue Shu (欧祖明与重庆航发嘉涪电力开发有限公司财产损害赔偿纠纷二审民事判决书) (The Court Order of the Property Disputes Between Ou Zuming and Chongqing Hangfa Hydraulic Power Co.) < shttp://wenshu.court.gov.cn/ > (Chongqing No.1 Intermediate People’s Ct. Sept. 28, 2015) (China).
3. Ou Zuming Yu Chongqing Longzhu Dianli Gufen Youxian Gongsi An’Ju Shuili Fadianchang, Chongqing Longzhu Dianli Gufen Youxian Gongsi Caichan Sunhai Peichang Jiufen Zaishen Shencha Minshi Caiding Shu (欧祖明与重庆龙珠电力股份有限公司安居水力发电厂,重庆龙珠电力股份有限公司财产损害赔偿纠纷再审审查民事裁定书) [The Court Order of the Property Disputes between Ou Zuming and Chongqing Longzhu Hydraulic Power Co.] <shttp://wenshu.court.gov.cn> (Chongqing High. People’s Ct. Jan. 17, 2014) (China).

[53] Id. (2) Ou Zuming argued that releasing water from the river lock was an ultrahazardous activity for which the defendant should be strictly liable. The court disagreed.

[54] GPCL, at Art. 123.

[55] See supra note 52 at (1).

[56] Hu Honglan Deng Shangsu Chen Haiyun Tigong Laowu Zhe Shouhai Jiufen Yi’an (胡宏兰等上诉陈海云提供劳务者受害责任纠纷一案), [The Appellate Court Order of the Disputes between Hu Honglan and Chen Haiyun Regarding Personal Injuries] <shttp://wenshu.court.gov.cn>  (Beijing No.1 Interm. People’s Ct. Sept. 26, 2016) (China).

[57] Id.

[58] Id.

[59] Id.

[60] See China’s Property Boom Continues as Prices Rise at Record Rate, Fortune, (Oct. 20, 2016), http://fortune.com/2016/10/21/china-property-prices-market/.

[61] See Beijing Fangjia Zoushi (北京房价走势) [The trend of property values in Beijing], http://bj.cityhouse.cn/market/.

[62] Qinquan Anjian Zhidao Anli Pingzhu (侵权案件指导案例评注) [Guiding Cases on Tort Law with Commentaries], 284 (Xi Xiaoming (奚晓明) & Luo Dongchuan (罗东川) eds., 2009).

[63] Id.

[64] Id.

[65] Minfa Tongze (民法通则) [The General Principles of Civil Law] (promulgated by the Nat’l People’s Cong., Apr. 12, 1986, effective Jan. 1, 1987), art. 126 (Lawinfochina).

[66] Xi, supra note 62, at 284.

[67] Id.

[68] Id. at 285.

[69] Id.

[70] Id.

[71] Yao Bin (姚彬) & Li Feng (李丰), Gaokong Paowu Zhiren Sunhai Falü Zeren Zhi Wojian—Qinquan Zeren Fa Di 87 Tiao De Pingxi (高空抛物致人损害法律责任之我见—侵权责任法第87条的评析) [Comments On Article 87 of the Tort Liability Law For Legal Liabilities Involving Injuries by Falling Objects], Douban Net (July 15, 2014),  https://www.douban.com/note/373103770/.

[72] Gao Hongwei (高宏伟) & Yu Hao (虞浩), Chongqing “Yanhuigang Shangren” An De Fali Pingxi—Cong Jingjixue Shijiao Xunzhao Yige Zuiyou Jie (重庆 “烟灰缸伤人” 案的法理评析—从经济学视角寻找一个最优解) [A Legal Analysis of The “Falling Ashtray” Case in Chongqing—Finding an Optimal Solution From an Economic Perspective], Douban Net (June 17, 2011), http://article.chinalawinfo.com/ArticleHtml/Article_37071.shtml.

[73] Zuigao Renmin Fayuan Guanyu Queding Minshi Qinquan Jingshen Peichang Zeren Ruogan Wenti De Jieshi (最高人民法院关于确定民事侵权精神赔偿责任若干问题的解释) [The Supreme People’s Court’s Interpretation On Certain Issues Regarding the Determination of Civil Liability for Compensation for Emotional Damages] (promulgated by the Adjudication Comm. of the Sup. People’s Ct., Mar. 8, 2001, effective Mar. 10, 2001), art. 3,  http://www.circ.gov.cn/web/site0/tab3189/info51740.htm (China).

[74] Xu Jilin (许纪霖), Guanyu Wusi Baisu, Chen Mingliang Su Wu Si An (关于吴思败诉, 陈明亮诉吴思案) [On Wu’s Loss in Chen Mingliang v. Wu Si], Caixin (财新) (Aug. 11, 2014), http://xujilin.blog.caixin.com/archives/75261.

[75] Id.

[76] Id.

[77] Id.

[78] Id.

[79] Id.

[80] Id.

[81] Phnom Penh & Yangon, How Powerful People Use Criminal-Defamation Laws to Silence Their Critics, The Economist (July 13, 2017), https://www.economist.com/news/international/21724993-some-countries-insulting-politicians-can-lead-jail-how-powerful-people-use.

[82] Id.

[83] Gao Liuzhi (高留志)，Qiquan Fa Di 24 Tiao De Lilun Caozong Yu Huanyuan《侵权责任法》第24条的理论操纵及其还原 [The Applications of Article 24 of the TLL] (2013), http://article.chinalawinfo.com/ArticleHtml/Article_79449.shtml.

[84] Ji Zhongxing: Baozha An Beihou De “Si Xun Huan” 冀中星：爆炸案背后的 “死循环” [The Vicious Cycle Because the Beijing International Airport Bombing], Sohu.com (July 24, 2013), http://news.sohu.com/20130724/n382450349.shtml.

[85] Id.

[86] Id.

[87] Id.

[88] Id.

[89] Id.

[90] Id.

[91] Id.

[92] Gui Tiantian (桂田田), Zhang Jingwen(张静雯), Muji Zhe Cheng Ji Zhongxing Zhadan Zai Qi Shouzhong Baozha Bingwei Rengchu Shou Du Jichang Fasheng Baozha (目击者称冀中星炸弹在其手中爆炸 并未扔出首都机场发生爆炸) [Witness Reported That the Bomb Exploded In Ji’s Hand. He Did Not Throw It), Beijing Youth Daily (北京青年报) (July 21, 2013), http://news.qq.com/a/20130721/001464.htm.

[93] Id.

[94] Yi Ren (伊人), Shoudu Jichang Baozha An Shandong Fangmin Bei Yisong Shencha Qisu (首都机场爆炸案山东访民被移送审查起诉) [The Suspect In the Beijing International Airport Bombing Extradited To Shandong For Trial), BBC.Com (Aug. 12, 2013), http://www.bbc.com/zhongwen/simp/china/2013/08/130812_airport_blast_charged.

[95] Shoudu Jichang Baozha An Dangshiren Ji Zhongxing Huo Yinian Jianxing (首都机场爆炸案当事人冀中星获一年减刑) [Ji Zhongxing, Who Caused An Explosion In The Beijing International Airport, Received One Year Reduction From His Six-Year Imprisonment], Sina.com (Dec. 23, 2016), http://news.sina.com.cn/c/nd/2016-12-23/doc-ifxyxvcr7332175.shtml.

[96] See id. One commentator posted, “Who give you [the police] the power to beat [Mr. Ji] and cause him disabled? If this type of injustice continues, your family will be treated the same way one day.” “The one who beat [Mr. Ji] should bear the responsibility.” Other commentators posted, “[Mr. Ji] should be punished, but why have the ones who beat him not been brought to justice?” “Being disabled, how could he live his life?” http://comment5.news.sina.com.cn/comment/skin/default.html?channel=gn&newsid=comos-fxyxvcr7332175&group=0.

[97] Qian Bei (钱蓓)，Baoli Shijian Heyi Zhici (暴力事件何以至此？) [What caused violent events?], 9 Shanghai People’s Congress (上海人大), 51(2013) (claiming that an official from Mr. Ji’s home town stated that the violent protest would not have happened, if the Dongguan government promptly investigated the police’s misconduct and compensated Mr. Ji); Wei Wenbiao (魏文彪)， Zuihao de Shehui Zhengce Ji Zuihao de Xingshi Zhengce (最好的社会政策即最好的刑事政策) [The best social policy is the best crime prevention policy], 4 Dem. & Sci, (民主与科学) 77 (2013) (claiming the government should improve social safety nets to prevent crimes)；Zhu Li (朱 力), Jiduan Shijian Buneng Guijiu Yu MinyuanShangsheng (极端事件不能归咎于民怨上升) (extreme events cannot all be attributed to public angst), 24 People’s Forum （人民论坛） 4 (2013), http://paper.people.com.cn/rmlt/html/2013-08/20/content_1288072.htm (arguing that the lack of social safety nets is the root-cause for the extreme violent events); Guo Lei (郭磊, Liqi Conghe er Lai（戾气从何而来） [Where does the angst come from?] 34 Xin Chan Jing (新产经), 64 (2013) (finding that when the government disproportionally emphasizes social stability, it often takes extreme measures to prevent people from voicing grievances, depriving socially vulnerable groups of opportunity to express their legitimate demands, elevating the social pressure to dangerous levels).

[98] See Ji Zhongxing: Baozha An Beihou De “Si Xun Huan” (冀中星：爆炸案背后的 “死循环”) [The Vicious Cycle Behind the Beijing International Airport Bombing], Sohu.com (July 24, 2013), http://news.sohu.com/20130724/n382450349.shtml.

[99] Chenglin Liu, Escaping Liability Via Forum Non Conveniens: ConocoPhillips’s Oil Spill in China, 17 U. Pa. J.L. & Soc. Change 137, 167 (2014).

[100] Luo Changping (罗昌平), Guangxi Fayuan Bushouli 1 3 Lei Anjian Shexian Guibi Fengxian Zhuanjia Weiji (广西法院不受理13类案件 涉嫌规避风险转嫁危机) [Guangxi Court Denied 13 Types of Cases Fueling the Suspicion of Diverting Crisis], People’s Net (Aug. 12, 2004), http://www.people.com.cn/GB/guandian/35560/2705126.html.

[101] Qian Wei (钱炜), Guangxi Fayuan Bushouli 1 3 Lei Anjian Shenggaoyuan Cheng You Guoqing Jueding(广西法院不受理13类案件 省高院称由国情决定) [Guangxi High Court Defended That Denying 13 Types of Cases Was Due To China’s Special Situation], China.com (Aug. 24, 2004), http://www.china.com.cn/chinese/difang/643257.htm.

[102] Chen Tao (陈涛)，Yifa Kangzheng Zhong de “Fayuan Bu Shouli” Xianxiang Yianjiu (依法抗争中的 “法院不受理”现象研究) [On the Phenomenon of “the Court Dismisses the Case” in Rightful Resistance], 1 J.E. China U. Sci. & Tech. （华东理工大学学报）1, 2–5, (2015).

[103] Chris Buckley, People’s Daily Details Allegations Against Lawyers Detained in China, N. Y. Times (July 13, 2015), https://sinosphere.blogs.nytimes.com/2015/07/13/peoples-daily-details-allegations-against-detained-lawyers/.

[104] See Zhou Qiang, Zuigao Renmin Fayuan Guanyu Shenhua Sifa Gongke, Chujin Sifa Gongzheng Qingkuang de Baogao (最高人民法院关于深化司法公开、促进司法公正情况的报告) [The Supreme People’s Court’s Report On Promoting Open Trials And Safeguarding Justice], Xinhua Net (Nov. 11, 2016), http://news.xinhuanet.com/legal/2016-11/09/c_1119880228.htm, (Mr. Zhou Qian, the President of the Supreme People’s Court conceded that judges deny cases for fear of expose problems).

[105] See Chenglin Liu, Chenglin, Profits Above The Law: China’s Melamine Tainted Milk Incident (2009), 79 Miss. L. J. 371 (2009).

[106] Zhang Weiping (张卫平), Qisu Nan: Yige Zhongguo Wenti de Sisuo (起诉难：一个中国问题的思索) [Difficult to sue: some thoughts on a typical Chinese problem], 6 J. Chinese L. (法学研究) 65 (2009).

[107] See generally, Carl Minzner, Xinfang: Alternative to Formal Chinese Legal Institutions, 42 Stan. J. Int’l. L. 103 (2006).

[108] Chenglin Liu, The Obstacles of Outsourcing Imported Food Safety to China, 43 Cornell Int’l L.J. 249, 291 (2010).

[109] See Yongshun Cai, State and Agents in China: Disciplining Government Officials 86 (2014) (“The occurrence of large scale destructive action or incidents with severe consequences means that local officials have failed to maintain social stability. Responsible officials, including local leaders, are likely to be disciplined for the failure.”).

[110] See Yuwen Li, Administrative Litigation Systems in Greater China and Europe 34 (2016).

[111] Liu Zuoxiang (刘作翔), Faguan Yeji Kaohe Mianlin de Liangnan Kunjing (法官业绩考核面临的两难境地) [The dilemma in the evaluation of judges], People’s Court Daily (人民法院报) (Sept. 18, 2015), http://article.chinalawinfo.com/ArticleFullText.aspx?ArticleId=92319.

[112] Carl F. Minzner, China’s Turn Against Law, 59 Am. J. Comp. L. 956, 937 (2011).

[113] Bufen Fayuan Wei Zhuiqiu Nianzhong Jieanlü Niandi Xianzhi Lian (部分法院为追求年终结案率年底限制立案) [Some courts denied cases at year end to increase case resolution rate], Nanfang Weekend (Dec. 16, 2011), http://news.sina.com.cn/c/sd/2011-12-16/181423645606.shtml.

[114] Zhang, supra note 109, at 74.

[115] Id.

[116] Id.

[117] Ling Li, Corruption in China’s Courts, in Judicial Independence in China: Lessons for Global Rule of Law Promotion 196, 213 (Randall Peerenboom ed., 2010).

[118] Id.

[119] See 最高人民法院关于适用《中华人民共和国民事诉讼法》的解释 Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (Promulgated by the Supreme People’s Ct., Jan. 30, 2015, effective, Feb. 4, 2015.), Art. 263 and Art. 265,  http://www.court.gov.cn/fabu-xiangqing-13241.html.

[120] Wang Shu (王姝), Zhongguo Jinnianlai Huanjing Qunti Shijian Pinfa Nianjun Zengsu Da 29% (中国近年来环境群体性事件频发年均增速达 29%) [Social Unrest Related to Environmental Pollution Increased by 29% Annually], Xin Jing Bao (新京报), Oct. 27, 2012, http://news.sohu.com/20121027/n355822896.shtml.

[121] Zhonghua Renmin Gonghe Guo Minshi Susong Fa (中华人民共和国民事诉讼法) [Civil Procedure Law of the People’s Republic of China] (promulgated by the Nat’l People’s Cong., April 9, 1991, effective April 9, 1991, amended June 27, 2017, effective (the amended provisions) July. 1, 2017). 2017 Standing Comm. Nat’l People’s Cong. Gaz. arts. 119, 123.

[122] See Adam Moser & Tseming Yang, Environmental Tort Litigation in China, 41 Envtl. L. Rep. 10895, 10897 (2010).

[123] See Yang Xiaomei (杨晓梅), Huanjin Minshi Susong Li’an Xianzhuang he Yuanyin (环境民事诉讼立案现状和原因) [The Status Quo and Reasons of the Environmental Civil Litigation Filing], 11 Fazhi Jingwei (法制经纬)[ Bells and Whistles at Legal System] Vol. 408, 2008 at 15.

[124] See Moser & Yang, supra note 125, at 10897.

[125] 68,712 Dead From May 12 Earthquake in Sichuan, Xinhua News (May 7, 2009), http://www.china.org.cn/china/news/2009-05/07/content_17736234.htm.

[126] Police Break Up Protest By Parents of China Earthquake Victims, Guardian (June 3, 2008), https://www.theguardian.com/world/2008/jun/03/chinaearthquake.china; See also, China Anger over “Shoddy Schools,” BBC (May 15, 2008), http://news.bbc.co.uk/2/hi/asia-pacific/7400524.stm.

[127] Police Break Up Protest by Parents of China Earthquake Victims, Guardian (June 3, 2008), https://www.theguardian.com/world/2008/jun/03/chinaearthquake.china.

[128] Shi Yu (石玉)， Mianyang Changwei Fushizhang: Jiang Jianding Beichuan Zhongxue Jiaoxue Lou Zhiliang (绵阳常委副市长：将鉴定北川中学教学楼质量) [Mianyang Deputy Executive Mayor Promised To Investigate The Construction Quality of the Beichuan Middle School Building] ，Diyi Caijing Ribao (第一财经日报) (May 26,2008), http://news.sohu.com/20080526/n257075030.shtml.

[129] By the Official Account of the Chinese Government, 5,000 Students Died Or Remain Missing in the Earthquake. Sichuan Earthquake Killed More Than 5,000 Pupils, Says China, Guardian (May 9, 2009), https://www.theguardian.com/world/2009/may/07/china-quake-pupils-death-toll.

[130] Edward Wong, China Presses Hush Money on Grieving Parents, N. Y. Times (July 24, 2008), http://www.nytimes.com/2008/07/24/world/asia/24quake.html?mcubz=0.

[131] In 1979, the Chinese government instituted the notorious one-child policy, which remained in place until 2016. See, Mara Hvistendahl, Analysis Of China’s One-Child Policy Sparks Uproar, Sci. Mag., Oct. 18, 2017, http://www.sciencemag.org/news/2017/10/analysis-china-s-one-child-policy-sparks-uproar.

[132] Upon the grieving families’ desperate plea, the local authority granted legal permission to the affected parents to have another child. See, Andrew Jacobs, One-child policy lifted for Quake Victims’ Parents, N.Y.Times, May 27, 2008, http://www.nytimes.com/2008/05/27/world/asia/27child.html (“To lose a child is to lose everything for Chinese parents. A child is their only hope.”).

[133] Police in China Break Up Protests Of Grieving Parents, Winston Salem J., (June 6, 2008), https://goo.gl/8GV62k.

[134] Ai Weiwei’s RA Show to House Weighty Remnants from Sichuan Earthquake, Guardian (June 15, 2015), https://goo.gl/8GV62k.

[135] Zheng Yinguang (张映光) et al.，Xuexiao Daota Yuanyu Jianzhu Zhiliang Guocha (学校倒塌缘于建筑质量过差) [Schools Collapsed Because of Poor Construction Quality], Caijing (财经) (June 3, 2008), http://www.caijing.com.cn/2008-06-03/100067212.html.

[136] Geoffrey York, Why China’s buildings crumbled, Globe and Mail, May 15, 2008, https://www.theglobeandmail.com/news/world/why-chinas-buildings-crumbled/article672477/.

[137] Police Break Up Protest by Parents of China Earthquake Victims, Guardian (June 3, 2008), https://www.theguardian.com/world/2008/jun/03/chinaearthquake.china.

[138] David Eimer, Relatives of Sichuan Earthquake Victims Imprisoned, Telegraph (May 4, 2009), at https://goo.gl/Nw3VNZ.

[139] Wong, supra note 134.

[140] Cara Ana, Amid Protests, China Ends Access to Collapsed Schools, Boston.com (June 5, 2008), http://archive.boston.com/news/world/asia/articles/2008/06/05/amid_protests_china_ends_access_to_collapsed_schools/?page=full.

[141] Wong, supra note 134.

[142] Id.

[143] According to Chinese culture and law, children are responsible for taking care of their aging parents.

[144] Wong, supra note 134.

[145] The Party and the government attaches great importance to maintaining social stability, which overrides any other interests including the exercise of the constitutionally protected rights. On Feb. 7, 2017, the Supreme People’s Court of PRC issued the Notice on the Implementation of the Protection of Judicial Personals, Guanyu Yinfa 《 Renmin Fayuan Luoshi 〈 Baohu Sifa Renyuan Yifa Lüxing Fading Zhize Guiding 〉 De Shishi Banfa 》 De Tongzhi (关于印发《人民法院落实〈保护司法人员依法履行法定职责规定〉的实施办法》的通知) (Article 11 of the Notice prohibits protests in the adjacent area of the court buildings in the forms of siting out, blocking access, distributing leaflets, shouting slogans, and displaying banners. Punishments for violation of the notice range from administrative actions to criminal penalty.) http://www.chinacourt.org/law/detail/2017/02/id/149109.shtml.

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