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The taking of foreign property under international law: a new legal perspective?*

Published online by Cambridge University Press:  07 July 2009

Wil D. Verwey  and
Nico J. Schrijver
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Extract

Few subjects are as controversial in international law today as the taking of foreign property. Many of the developing countries assembled within the framework of the semi-official Group of 77 (G. 77) claim that many of the principles and rules pertaining to the protection of foreign property traditionally adhered to by Western developed countries have lost their legal significance; in particular, as a result of legal developments induced by relevant UN resolutions. The question is, to what extent this claim is correct; to what extent the traditional rules have indeed been replaced by new ones, and what the contents of these new rules might be. The present study tries to answer this question, and sets out to review and analyze: first, the main doctrines of traditional customary law concerning the taking of foreign property (Part 2); secondly, the relevant UN resolutions relative to this subject (Part 3); and thirdly, state practice as it manifests itself in the form of one multilateral and 195 bilateral investment protection treaties concluded up to 1983, both between developed and developing countries and amongst developing countries inter se. (Part 4). On the basis of this review and analysis conclusions are drawn in Part 5.

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Articles
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Netherlands Yearbook of International Law , Volume 15 , December 1984 , pp. 3 - 96
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Copyright © T.M.C. Asser Press 1984

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References

1. Cf., US Dept. of State Report on Nationalization, Expropriation, and Other Takings of US and Certain Foreign Property Since 1960, XI ILM (1972) pp. 84–118. Between 1960 and mid-1974 alone, 875 cases of “nationalization” took place in 62 countries; UN Doc. A/9716, Annex I, para. 2 and n. b. With respect to the Western hemisphere, Rogers notes: “Investment disputes have been at the very heart of our official relations with the other nations of the Americas for half a century”; Rogers, W.D., “Of missionaries, fanatics, and lawyers: some thoughts on investment disputes in the Americas”, 72 AJIL (1978) p. 1.CrossRefGoogle Scholar

2. As for the political and legal relevance of the concept of “developing countries” see Verwey, W.D., ‘The principle of preferential treatment for developing countries’, in UN Doc. UNITAR/DS/5 (15 August 1982) pp. 24–35.Google Scholar

3. A list of these treaties is provided as an Annex to the present study.

3a. For a list of members of the G. 77 see XIX UN Chronicle (Oct. 1982) p. 35. For a list of G. 77 members participating in UNCTAD activities see W.D. Verwey, op.cit., in UN Doc. UNITAR/DS/5 (1982) Annex I, pp. 161–164.

4. GA Res. 3201(S-VI) para. 4(e); GA Res. 3281 (XXIX) para. 2.2(c).

5. Schwarzenberger and Brown consider it “advisable to limit the term expropriation to lawful forms of (such) interference. Thus, expropriation in international law signifies lawful forms of interference with foreign property rights”; Schwarzenberger, G. and Brown, E.D., A manual of international law (1976) p. 17Google Scholar. In a similar sense, Suy prefers to use the term “confiscation” for an illegal taking of property; Suy, E., Leerboek van het volkenrecht [Manual of international law] (1972) I, pp. 123–124.Google Scholar

6. Starke observes that “the term expropriation appears … to be the generic term, and to include ‘nationalization’, i.e. the taking of property by a State with a view to its continued exploitation by that State in lieu of the exploitation by private enterprise”; Starke, J.G., Introduction to international law (1977) p. 325Google Scholar, n. 2. Similarly, Domke holds that a distinction between the two concepts makes little practical and legal sense; Domke, M., “Foreign nationalizations; some aspects of contemporary international law”, 55 AJIL (1961) p. 588Google Scholar. From a legal point of view, Wortley concurs in this opinion; Wortley, B.A., Expropriation in public international law (1959) p. 36.Google Scholar

7. The term “nationalization”, which in the opinion of some authors has “no place in the language of international law”, often is “popularly employed to describe the process whereby certain industries or means of production, distribution or exhange are, in pursuance of social or economic policies, concentrated in public hands”, O'Connell, D.P., International law (1970) p. 769Google Scholar. Cf., in a similar sense, Black's Law Dictionary (1968) p. 1176; Brownlie, I., Principles of public international law (1979) p. 532Google Scholar; B.A. Wortley, op.cit., (1959) pp. 35–37; Kronfol, Z.A., Protection of foreign investment (1972) p. 20Google Scholar. In 1952, the IDI defined nationalization as le transfer à l'Etat, par mesure législative et dans un intérêt public, de biens ou droits privés d'une certain catégorie, en vue de leur exploitation ou controle par l'Etat, ou d'une nouvelle destination qui leur serait donné par celui-ci; Annuaire (1952) p. 283Google Scholar. See further on this question the comparative analysis made by K. Wellens in his doctoral thesis on the Charter of Economic Rights and Duties of States (CERDS), Handvest van economische rechten en plichten van staten, Res. 3281 (XXIX) (1977) pp. 33 et seq.Google Scholar

8. Amerasinghe, for instance, concludes that the term nationalization “has become sufficiently distinguished from other kinds of expropriation in kind, so much so that the sources have produced special rules in regard to it. These are to be differentiated from the rules relating to other cases of expropriation”; Amerasinghe, C.F., State responsibility for injuries to aliens (1967) p. 129Google Scholar. Cf., in a similar sense, Foighel, I., Nationalization and compensation (1964) pp. 35–37Google Scholar. It probably is the fear that large-scale expropriations could be withdrawn from the control of international law by justifying them under the banner of “nationalization” – understood as a necessary factor in the process of socio-economic transformation; a claim supported, in particular, by socialist countries (cf., Z.A. Kronfol, op.cit. (1972) p. 21 – which should explain the opposition of many Western authors to such distinctions as that between “expropriation” and “nationalization”. Thus, Schwarzenberger writes: “It is difficult to see why the mere scale of expropriation measures, as compared with individual acts of expropriation, or the rise of new ideologies should by themselves exempt such policies of nationalization from the operation of the governing rules of international customary law”; G. Schwarzenberger, op.cit., (1976) p. 8.

9. Quoted in Lillich, R.B., The valuation of nationalized property in international law (1972) p. 3, n. 1.Google Scholar

10. Other public foreign investments are protected by different rules of international law, notably rules concerning immunity. This thesis is supported also by socialist countries and non-socialist developing countries; cf., Doman, N.R., “New developments in the field of nationalization”, 3 NYUJIL & Pol. (1970) pp. 306 et seq.Google Scholar

11. As early as 1928, the PCIJ found in the German Interests in Polish Upper Silesia case (Series A, No. 17) that “even though a State may not purport to interfere with rights to property, it may, by its actions, render those rights so useless that it will be deemed to have expropriated them”. Cf., also, Christie, G.H., “What constitutes a taking of property under international law?”, 38 BYIL (1962) p. 311Google Scholar; and Domke, who observes: “Interventions are often the forerunner of a formal and retroactive nationalization. An outright transfer of title may no longer constitute the foremost type of ‘taking’ property in the technique of modern nationalization”, M. Domke, op.cit., (1961) p. 589.

12. These provisions are: the first Hickenlooper Amendment (to the Foreign Assistance Act, 1961) and the second Hickenlooper or Sabbatino Amendment (to the Foreign Assistance Act, 1964); the Gonzalez Amendment (to the IDA, IADB, and ADB Acts, 1972 and 1975); and Section 502 (b.4) of the Trade Act, 1974. They provide, respectively, for the (possibility of) suspension of bilateral aid; opposition to lending by international financial institutions; and suspension of eligibility to trade preferences under the American version of the GSP (Generalized System of Preferences, as agreed upon within the framework of UNCTAD and GATT). It should be noted that the Foreign Assistance Act of 1973 removed the automatic sanction element from previous legislation; even though – or, rather, because – “Hickenlooper” had only once been applied (in 1963 against Sri Lanka, then Ceylon), which was not considered as increasing its credibility. For legislative sources see Lillich, R.B., “Requiem for Hickenlooper”, 69 AJIL (1975) p. 97CrossRefGoogle Scholar; Gantz, D.A., “The Marcona settlement: new forms of negotiation and compensation for nationalized property”, 71 AJIL (1977) p. 479CrossRefGoogle Scholar; Vagts, D.F., “Coercion and foreign investment rearrangements”, 71 AJIL (1977) p. 20Google Scholar; W.P. Rogers, op.cit., (1978) p. 2.

13. An anachronistic phrase, which still is maintained in Art. 38 (1.c) of the Statute of the ICJ, and in Art. 7(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms. Significantly, the phrase has been replaced in the UN International Covenants on Human Rights of 1966 by “the general principles of law recognized by the community of nations”. Cf., on this development the pioneer study by Röling, B.V.A., International law in an expanded world (1960) pp. 50–51.Google Scholar

14. See B.V.A. Röling, op.cit., (1960) pp. 26–27.

15. Schwarzenberger, G., “The standard of civilization in international law”, 8 Curr. Leg. Probl. (1955) p. 220Google Scholar. Cf., also, Higgins, R., Conflict of interests; international law in a divided world (1965) p. 39Google Scholar. On the general significance of the term “civilized nations” in traditional international law see further B.V.A. Röling, op.cit., (1960); Anand, R.P., New states and international law (1972)Google Scholar; Verwey, W.D., Economic development, peace, and international law (1972).Google Scholar

16. Jiménez de Aréchaga, E., “State responsibility for the nationalization of foreign-owned property”, 11 NYUJIL & Pol. (1978) p. 180Google Scholar. Cf., also, Francioni, F., “Compensation for nationalization of foreign property: the borderland between law and equity” 24 ICLQ (1975) p. 259.CrossRefGoogle Scholar

17. During the nineteenth century, most Asian and African states were forced to sign capitulation treaties, which declared Europeans and their property immune from local authority and jurisdiction. In the course of time, these provisions on restricted exercise of territorial sovereignty by local authorities became permanent and irrevocable, and eventually “deprived the territorial sovereign of an important international function, that of protecting the life and property of nationals of other States on his territory”; Alexandrowicz, C.H., “The Afro-Asian world and the law of nations (historical aspects)”, 123 Hague Recueil (1968) p. 150.Google Scholar

18. This is a particular aspect of the doctrine of “acquired rights”: the thesis that the violation of contractual guarantees against dispossession explicitly given in a treaty or concession (notably in the form of “stabilization clauses”) implies a violation of the maxim pacta sunt servanda. It is important to note, however, that even this aspect of the “acquired rights” doctrine is rejected by authors from the Third World as being incompatible with the overriding principle of state sovereignty (see nn. 91 and 104 infra); a thesis hotly contested by Western authors, and firmly rejected in jurisprudence. Thus, in the award on the Government of Saudi Arabia v. Aramco case it was held that “nothing can prevent a State, in the exercise of its sovereignty, from binding itself irrevocably by the provisions of a concession and from granting to the concessionaire irretractable rights. Such rights have the character of acquired rights …” (27 ILR 117 (1963) p. 168); and in the Texaco/California Asiatic Oil v. Libyan Arab. Rep. case the sole arbitrator concluded that “a State cannot invoke its sovereignty to disregard commitments freely undertaken through the exercise of this same sovereignty and cannot, through measures belonging to its internal order, make null and void the rights of the contracting party which has performed its various obligations under the contract” (XVII ILM (1978) p. 24; cf. also, idem at p. 31). In this respect one may have to make a distinction between rights acquired directly under international law and those acquired under the municipal legal order of the host state; see Sik, Ko Swan, “The concept of acquired rights in international law”, XXIV NILR (1977) pp. 126 et seq.Google Scholar

19. To these requirements we come back infra.

20. K. Wellens, op.cit., (1977) p. 40. Also from an equity or balance-of-interests point of view, this conclusion could hardly be contested in a “North-South” perspective. For, although “the rule is clearly established that a State is bound to respect the property of aliens”, as Oppenheim/Lauterpacht observe, “this rule is qualified”, since “modification must be recognized in cases in which fundamental changes in the political system and economic structure of the State or far-reaching social reforms entail interference, on a large scale, with private property”; Oppenheim, L. (ed. Lauterpacht, H.), International Law I (1955) p. 352Google Scholar. Cf., also, E. Jiménez de Aréchaga, op.cit., (1978) p. 179; C.F. Amerasinghe, op.cit. (1967) p. 132; White, G., Nationalization of foreign property (1961) pp. 4, 35Google Scholar; Fouilloux, G., La nationalisation et le droit international public (1962) p. 178.Google Scholar

21. Z.A. Kronfol, op.cit. (1972) p. 22. See also Bishop, M., International law cases and materials (1953) p. 485Google Scholar; Carreau, D., Juillard, P. and Flory, Th., Droit international economique (1980) p. 544.Google Scholar

22. On the meaning and impact of these principles see Part 3 infra.

23. L. Oppenheim (ed. H. Lauterpacht), op.cit., I (1955) p. 350.

24. Przetacnik, F., “Responsibility of state for nationalization”, Rev. de Sc. Dipl. et Pol. (1973) p. 164 (emphasis added).Google Scholar

25. See Neville, M.K., “The present status of compensation by foreign states for the taking of alien-owned property”, 13 Vanderbilt J. Trans.L. (1980) pp. 51 et seq.Google Scholar

26. US Dept. of State Statement on Foreign Investment and Nationalization of 30 december 1975, XV ILM (1976) p. 186 (emphasis added).

27. E. Suy, op.cit., (1972) p. 125 (translated from Dutch by the authors). Often the meaning of this requirement is described in much simpler terms, like “the property must be amenable to the jurisdiction of the expropriating State”, D.P. O'Connell, op.cit., (1970) p. 776; or “the manner of an expropriation may not be … lacking in just procedures”, R. Higgins, op.cit., (1965) p. 56.

28. Quoted by Fawcett, J.E.S., International economic conflicts: prevention and resolution (1977) p. 60.Google Scholar

29. In its decision of 22 January 1973, the Supreme Court of Hamburg objected to the fact that “legal channels have been closed to the parties concerned”, XII ILM (1973) p. 275Google Scholar; and cf., the comment by Seidl–Hohenveldern, I., “Chilean copper nationalization cases before German courts”, 69 AJIL (1975) pp. 110, 115CrossRefGoogle Scholar. The US Government likewise protested against the fact that Chile's nationalization law “by passes established Chilean judicial appeals procedures, including access to the Supreme Court”, [XI ILM (1972) pp. 91–92]Google Scholar, and rejected the retroactive excess profits concept, “which was not obligatory under the expropriation legislation adopted by Chilean Congress”, [X ILM (1971) p. 1307.]Google Scholar Cf., also, the Special Copper Tribunal Decision on the Question of Excess Profits of Nationalized Copper Companies in Chile, XI ILM (1972) p. 1054.

30. OECD, Draft Convention on the Protection of Foreign Property, 1962, II ILM (1962) pp. 241 et seq.; idem, 1967, VII ILM (1967) pp. 117 et seq. Art. Ill (i). As regards bilateral investment protection treaties see Part 4 section 3.4 infra.

31. Even as prominent an advocate of the “international standard” as Schwarzenberger obviously does not consider the “due process of law” requirement a proper condition for a lawful taking, when he writes: “so long as an expropriation takes place for public purposes and is accompanied by full or adequate, prompt and effective compensation, it is legal”; G. Schwarzenberger, op.cit., (1976) p. 41. Cf., also, idem, Foreign investment and international law (1969) p. 4; K. Wellens, op.cit., (1977) p. 93; and idem, “Enkele problemen in verband met de uitoefening van het recht op nationalisatie” [Some problems concerning the implementation of the right to nationalization], XIII Rev. belge (1977) p. 57.Google Scholar

32. This rule precludes diplomatic protection as well as the competence of an international judiciary, until the plaintiff has exhausted the domestic judicial system in the state which he accuses of having illegally injured him; unless there is a prima facie case of procedural or material “denial of justice”. Cf., Strupp, K. and Schlochauer, H.J., Wörterbuch des Völkerrechts (1961) pp. 383–384Google Scholar; Doehring, K. in Bernhardt, R. (ed.), Encyclopedia of public international law (1981) pp. 136–140.Google Scholar

33. See the Netherlands Note of 18 December 1959 Regarding Nationalization of Dutchowned enterprises, 54 AJIL (1960) pp. 485–487, 489. The discriminatory nature of this taking was emphasized, instead of concealed, by the Indonesian authorities: the very name of the Act in question (No. 86) was: “On the Nationalization of Dutch-owned Enterprises”; and it was made clear in the “Explanation of Ordinance” (No. 2 of 1959) that “the kernel of these provisions is to make a distinction between the position of Dutch nationals and that of other nationals”, in accordance with the policy aimed “to liquidate colonial economic power, in this case the Dutch colonial economy”. Decree No. 485 of 17 September 1959 laid down the principle, indeed, that “in case of the nationalization of vital enterprises partly owned by aliens not being Netherlands nationals, compensation will be paid for the portion of the capital originally owned by non-Netherlands nationals”; idem, p. 487. In this light, both the District and Superior Courts of Amsterdam considered the Indonesian measures as violative of international law; comp. the Senembah Comp. v. Republic of Indonesia cases of 1958 (District Court, NJ (1959) p. 219), and of 1959 (Superior Court, NJ (1959) pp. 856–857). In contrast, the anti-colonial aspect of the matter induced the Bremen Court of Appeals in the Indonesian Tobacco case of 1960 to give a hotly contested verdict in which discrimination between the “former colonial master” and other foreigners was considered acceptable; text in 54 AJIL (1960) p. 315. For a critical comment see M. Domke, op.cit., (1961) pp. 585 et seq., 601. It should be recognized with Domke that, at the time of its promulgation and its (insufficiently argued) recognition by the Bremen Court, the Indonesian “anti-colonial discrimination doctrine”, as we might call it, constituted a legal novum. Yet, it should be added that it soon acquired a title from the international community, i.e., soon was “legitimized” – which is not the same as “legalized” (on this theory see W.D. Verwey, The United Nations and the least developed countries: an exploration in the grey zones of international law, to be published by the Polish Academy of Sciences in the Liber Amicorum Judge Manfred Lachs) – by the adoption in 1962 of GA Res. 1803 (XVII), the Declaration on Permanent Sovereignty over Natural Resources, which proclaims (or affirms) rules pertaining to the taking of property, but makes an exception for “property acquired before the accession to complete sovereignty of countries formerly under colonial rule”; see further Part 3 infra.

34. Nationalization Law No. 851 of 6 July 1960 authorized “the nationalization, through expropriation, of the properties or concerns belonging to natural or juridical persons nationals of the United States of America or the concerns in which said persons have a majority interest or participation”; text in 55 AJIL (1961) p. 823. On this basis, the US Government rejected the law as being “in its essence discriminatory, arbitrary and confiscatory”, 43 Dept. State Bull. (1960) p. 171Google Scholar. The claim that discrimination between foreigners is “contrary to the standards of international law” was supported by the US District Court of New York in its decision of 31 March 1961 on the Banco Nacional de Cuba v. Sabbatino case; text in 55 AJIL (1961) p. 745Google Scholar. Cf. also, Sutton, G., “American claims against Cuba”, 3 Int. Lawyer (1969) pp. 741 et seq.Google Scholar; M. Domke, op.cit., (1961) pp. 602–603; Garreau de Loubresse, C., “De quelques elements de la législation de la République de Cuba en matiére d'intervention et de nationalisation”, Rev. int. dr. comp. (1961) pp. 773 et seq.Google Scholar

35. XIII ILM (1974) pp. 769, 771; 53 ILR (1979) pp. 317, 337. Cf., also, Rieger, D.F., “Public policy and negating discriminatory expropriations in municipal courts”, Cornell ILJ (1974) pp. 171 et seq.Google Scholar

36. It should be observed in this connection that the taking of only certain foreign property in a sector of the economy which is completely in the hands of foreigners of that nationality is not violative of the non-discrimination requirement (unless bad faith, in the sense that it was the authorities' intention to injure a certain state, can be proven). Cf., Behrens, P., “Rechtsfragen im Chilenischen Kupferstreit”, 37 Rabels Z (1973) p. 481Google Scholar; Petersmann, E.U., “Die Nationalisierung der Chilenischen Kupferindustrie als Problem des internationalen Wirtschaftsrechts”, 3 Wirtschaftsrecht (1973) pp. 284, 292Google Scholar. It should further be observed here that the exclusive taking of certain foreign property in an economic sector in which foreigners of other nationalities are also active is not ιpso facto violative of the nondiscrimination requirement; for it may be difficult to establish the discriminatory nature of taking measures when they may constitute part of a gradual “nationalization” process; as the sole arbitrator in the Texaco case observed: “While it seems that such measures were of such a (discriminatory) nature at the time when they were imposed, in fact analogous measures were taken in respect of other companies, in successive stages, which is evidence that the measures taken against plaintiffs were part of what may have been regarded as a policy of nationalization”; XVII ILM (1978) p. 25 (emphasis added).

37. This claim has been supported on various instances by jurisprudence. Thus, in the Oscar Chinn case (1934) the PCIJ found: “The form of discrimination which is forbidden is … discrimination based on nationality and involving different treatment by reason of their nationality as between persons belonging to different national groups (Series A/B No. 63 p. 87). See also the German Settlers case (1923, Series B No. 6 pp. 23–24), the Polish Upper Silesia case (1926, Series A No. 7 p. 33), and the Serbian Loans case (1929, Series A nos. 20/21 p. 44). Similarly, the arbitral awards in the BP Exploration (Libya Ltd) v. Libya case (53 ILR(1979) p. 297), and the Liamco v. Libya case (XX ILM (1981) p. 1). Likewise, the Superior Court of Hamburg held in its Decision Denying Third Party Attachment of Copper Sold by the Chilean Copper Corporation (22 January 1973): “A nationalization which is directed specifically against foreigners is to be considered, however, discriminatory and thus an act which is not to be approved in accordance with the principles of public policy”; text in XII ILM (1973) p. 27. Cf., also, Rohner, J.A., “Nationalization”, Harvard ILJ (1973) p. 386Google Scholar; and M. Domke (op.cit., (1961) p. 603), who observes that this claim is even supported “in legal writings from communist countries”. The Civil Court of Rome, on the other hand, held in the Anglo-Iranian Oil Company v. SUPOR case of 1954 that discrimination between nationals and foreigners is not illegal when the measures are intended to serve an overriding public purpose and not to injure foreigners; 22 ILR (1955) p. 40. Cf. also, G. White, n. 47 infra, p. 132.

38. Speekenbrink, C.A.H.M., Private foreign investment in the development process (1979) pp. 94–95Google Scholar; E. Wehser, op.cit., (1974), p. 119; K. Wellens, op.cit., Rev. belge (1977) pp. 57 et seq.

39. This apparent, but not real, exception to the requirement of non-discriminatory treatment was, correctly and successfully, emphasized by the ACP states during their negotiations with EEC on the investment paragraph in the Second Lomé Convention; see their statement of 11 October 1979, Europe, Agence Internationale d'Information pour la Presse (12 October 1979) p. 6.

40. Bossuyt, M., L'interdiction de la discrimination dans le droit international de droits de l'homme (1976) p. 111.Google Scholar

41. K. Wellens, op.cit., (1977) pp. 74 et seq., 78 (translated from Dutch by the authors).

42. McDougal et al. argue that an international minimum standard could be derived from the universal recognition of human rights; McDougal, M.S., Laswell, H.D. and Chen, L., “The protection of aliens from discrimination and world public order: responsibility of states conjoined with human rights”, 70 AJIL (1976) pp. 432 et seq.CrossRefGoogle Scholar

43. If all provisions of the Universal Declaration had become part of customary international law, it would still be questionable whether Art. 17 would entitle everyone to own property under all circumstances; for Art. 29(2) provides for the following qualification: “In the exercise of this rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society” (emphasis added).

44. On this topic see Verwey, W.D.The principle of preferential treatment for developing countries,. UN Doc. UNITAR/DS/5 (15 August 1982) pp. 6–183Google Scholar; and idem, The establishment of a new international economic order and the realization of the right to development and welfare; a legal survey, UN Doc. HR/Geneva/1980/BP. 3 (GE. 80–122295) pp. 36–67. This study was reproduced in XXI IJIL (1981) pp. 1–78.

45. R. Higgins, op.cit., (1965) p. 56 (emphasis added).

46. The “public purpose” requirement was recognized by the PCIJ in 1926 in the German Interests in Polish Upper Silesia case (Series A No. 7 pp. 21–22), and in 1928 in the Chorzow Factory case (Series A No. 17 pp. 46–48).

47. Cf., the verdict of the Bremen Court of Appeals in the Indonesian Tobacco case (n. 33 supra), and see Domke, M., “Indonesian nationalization measures before foreign courts”, 54 AJIL (1960) pp. 305 et seqCrossRefGoogle Scholar. Cf., also, the arbitral award in the Shufeldt's Claim case (1930); UNRIAA II p. 1095. See also I. Foighel, op.cit., (1964) p. 54; White, G., Nationalization of foreign property (1961) pp. 145 et seq.Google Scholar; P.J. O'Keefe, n. 50 infra, p. 281; Delupis, I., Finance and protection of foreign investments in developing countries (1973) pp. 71 et seq.Google Scholar

48. Cf., e.g., I. Foighel, op.cit., (1964) p. 54; Z.A. Kronfol, op.cit., (1972) p. 26; E. Wehser, op.cit., (1974) p. 119.

49. Thus, the US District Court of New York held in its verdict of 31 March 1961 on the Banco Nacional de Cuba v. Sabbatino case that “the taking of the (American) property was not justified by Cuba on the ground that the state required the property for some legitimate purpose or that transfer of ownership of the property was necessary for the security, defense or social good of the state. The taking … was totally unconnected with the subsequent use of the property being nationalized. This fact alone is sufficient to render the taking violative of international law”; text in 55 AJIL (1961) p. 744. The prohibition of taking for private profit was emphasized in the award on the Walter Fletcher Smith case (1929), where it was held: “The expropriating proceedings were not, in good faith, for the purpose of public utility … the properties seized were turned over immediately to the defendant company … ostensibly for public purposes, but, in fact, to be used by the defendant for purposes of amusement and private profit, without any reference to public utility”; UNRIAA II pp. 917–918. See also the award in the Norwegian ships case (1921); UNRIAA I pp. 232 et seq.

50. O'Keefe, P.J., “The United Nations and permanent sovereignty over natural resources”, 8 JWTL (1974) p. 259Google Scholar. Cf. also, K. Wellens, op.cit., Rev. belge (1977) pp. 51 et seq.

51. Such a reference was made in the Preamble to Act No. 86 of 31 Deeember 1958; text in 6 NILR (1959) p. 291. Cf., also, the Netherlands Note of 18 December 1959; text in 54 AJIL (1960) p. 487. In a statement of 17 August 1959 on the implementation of Act No. 86, the President of Indonesia spoke of “the taking over of (certain) Dutch enterprises in the context of the struggle for the liberation of West Irian”, and warned that “if, in the question of West Irian, the Dutch remain subborn, if, in the question of our national claim, they remain headstrong, then all the Dutch capital, including that in mixed enterprises, will bring its story to a close on Indonesian soil; quoted in 54 AJIL (1960) p. 486 (emphasis added). Cf., also, H. Rolin in a Note in 6 NYIL (1959) p. 265.

52. Quoted by R. Higgins, op.cit., (1965) pp. 62–63. In a similar sense, the Peruvian Government in 1975 explained that its Decree Law No. 21228 on the nationalization of the Marcona (ore) Company “had been a deliberate choice for nationalization to serve as a political example of the regime's continued dedication to revolutionary ideals”; D.A. Gantz, op. cit., (1977) p. 476.

53. UN Doc. A/C.2/SR. 704 (8 December 1960) p. 13.

54. XIII ILM (1974) p. 769.

55. On this complicated question, which can not be dealt with here, see K. Wellens, op.cit., (1977) pp. 85 et seq., where he concludes that in state practice, jurisprudence, and the majority of doctrine the payment of compensation is considered as a condition of legality Cf., also, idem, op.cit., Revue belge (1977) pp. 64–65.

55a. The rules were confused somewhat in the award on the Lena Goldfields case of 1930, where it was held that the plaintiff was entitled to compensation “for the value of the benefits of which it had been wrongfully deprived. On ordinary legal principles this constitutes a right of action for damages, but the Court prefers to base its award on the principle of ‘unjust enrichment’, although, in its opinion, the money result is the same”; 5 AD (1929–1930) p. 3.

56. PCIJ in 1928 in the Factory at Chorzow case; Ser. A. No. 17 p. 47. Cf., also, the same Court in 1925 in the Mavrommatis Jerusalem Concessions case (Series A no. 5 p. 51); the ICJ in 1962 in the Temple of Preah-Vihear case (ICJ Rep. 6 pp. 36–37); and the arbitral awards in the BP, Texaco, and Liamco v. Libya cases of 1973, 1977 and 1977 (in resp. 53 ILR (1979), pp. 297 et seq.; XVII ILM (1978), pp. 1). et seq.; XX ILM (1981), pp. 1 et seq.

57. The “prompt, adequate and effective” formula was recognized by the PCIJ in e.g., the Spanish Zone of Morocco case (1925), the German Interests in Polish Upper Silesia case (1926), and the Factory at Chorzow case (1928); as well as in a large number of arbitral awards. Cf., Akehurst, M., A Modern introduction to international law (sec. ed. 1971) p. 116Google Scholar, n. 3 (in later editions, he mentions less sources).

58. This claim was supported in 1921 by recognition of the necessity of “immediate” compensation in the Norwegian Ships case; 1 Int. Arb. Awards (1922) p. 307. Kronfol writes: “In order to be prompt, compensation must be paid either before the taking or within a short period there after. Payment may be further delayed (only) if an appropriate rate of interest is determined, so that the claimant will not suffer any additional loss through delay“; Z.A. Kronfol, op.cit., (1972), p. 110, where he subsequently agrees with the present authors that the maintenance of such a rigid formula is not in accordance with actual state practice. Maintaining the demand in such a rigid form, indeed, would be bound to be without effect (and its legal value to suffer, accordingly, from non-ususxs): in the case of “Lump sum” settlements, for instance, a comprehensive study of 139 agreements concluded during the period 1946–1971, for instance, revealed that the average period elapsing between the act of taking and the conclusion of a settlement agreement was about 15 years; see Lillich, and Weston, , International claims: their settlement by lump sum agreements (1975) pp. 210 et seqGoogle Scholar. Cf., also, M. Domke, op.cit., (1961) pp. 604–606.

59. 22 USC para. 2370 (e.1) (1970) and Suppl. V (1975).

60. Cf., CF. Amerasinghe, op.cit., (1967) p. 162; K. Wellens, op.cit., Rev. belge (1977) p. 72; Z.A. Kronfol, op.cit, (1972) pp. 28, 110.

61. UN Doc. A/CN.4/119 (1959) p. 59. In this connection, Schwarzenberger observes that “in equity, prompt compensation does not necessarily mean immediate compensation. It means compensation after a reasonable interval of discussions on all the relevant aspects of the expropriation”; G. Schwarzenberger, op.cit., (1969) p. 11.

62. See the US Government's protests in resp. 29 Dept. State Bull. (1953) p. 359; and 43 Dept. State Bull. (1960) p. 171.

63. I. Foighel, op.cit., (1964) p. 257. Domke, on the other hand, maintains tha the “ad hoc arrangements” on installment payments agreed to by some capital exporting states, “cannot alter principles as fundamental as the requirement of prompt compensation”; M. Domke, op.cit., (1961) p. 606.

64. Art. III (iii). For sources see n. 30 supra.

65. See Part 4 infra. It should be added that state practice justifies the thesis that in many cases the phrase “without delay” was or is now meant to be interpreted, by reference to the standard of “reasonableness and equity”, as “without undue delay”.

66. This is the phrase used in the Hickenlooper Amendment, see n. 59 supra.

67. Wooldrigde, F. and Sharma, V., “The expropriation of the property of the Ugandan Asians”, XIII IJIL (1974) p. 66Google Scholar. In contrast, on the occasion of the taking by Peru of the American Grace Corporation in 1968, non-transferable Peruvian bonds were made transferable by amendment of the relevant law; cf., Huerta, J.E., “Peruvian nationalization and the Peruvian-American compensation agreements”, 71 AJIL (1977) pp. 10Google Scholar et seq., 17. See also VIII ILM (1969) pp. 279 et seq.

68. Z.A. Kronfol, op.cit., (1972) pp. 116–117.

69. K. Wellens, op.cit., (1977) n. 120.

70. See Notes and Comments to Article III of the OECD Draft, VII ILM (1968) p. 128. Cf., also, M. Domke, op.cit., (1961) p. 608. Similarly, G. White, op.cit., (1961) p. 240; E. Suy, op.cit, (1972) p. 127.

71. This is the wording used in the Hickenlooper Amendment, see n. 59 supra, Schwarzenberger's view is that “the difference between ‘full’ and ‘adequate’ compensation is merely one between synonyms”; G. Schwarzenberger, op.cit., (1969) p. 10.

72. XV ILM (1976) p. 186. Cf. also, US Dept. of State Press Release No. 283 of 23 July 1963 (58 AJIL (1964) pp. 168–169); and US Dept. of State Statement on “Hot” Libyan Oil of 7 May 1974 (XIII ILM (1974) p. 774).

73. Whiteman, M., 8 Digest of international law (1967) p. 1143Google Scholar. In similar terms, G. Schwarzenberger, op.cit., (1969) p. 11. For a recent application of the “going concern” criterion – and rejection of the “net book value” criterion – see the arbitral award in the Aminoil v. Kuwait case; XXI ILM (1982) pp. 976 et seq. An important example of Third World agreement on application of the net book value, incidentally, was provided by the announcement by OPEC member states in June 1971 that they would gradually “nationalize” up to 51 per cent of total interests in their oil industries and would compensate foreign owners thereof on the basis of net book value calculations; Sampson, P.A., The seven sisters (1976) pp. 277, 282.Google Scholar

74. Factory at Chorzow case, PCIJ (1928) Series A No. 17 p. 47.

75. Cf., Katzarov, K., Theory of nationalized property (1964) pp. 354–355Google Scholar; F. Francioni, op.cit., (1975) p. 282; K. Wellens, op.cit., Rev. belge (1977) pp. 76 et seq., 87. It needs no comment that this kind of view is enthusiastically supported by authors from the Third World.

76. But see Seidl-Hohenveldern, I., Internationales Konfiskations- und Enteignungsrecht (1952) pp. 164, 186Google Scholar; M. Domke, op.cit., (1961) p. 607; G. Schwarzenberger, op.cit., (1969) pp. 11, 17. The demand for full market value compensation remains more widely supported when an illegal taking is at stake. This also holds for the element of lucrum cessans; cf., Z.A. Kronfol, op.cit., (1972) p. 95, and G. White, op.cit., (1961) p. 150. Lucrum cessans should be taken into account, in particular, when the taking of property affects concessions, in which (normally) the value of activa is low in comparison to the costs of exploratory and exploitatory investments, with the result that the damage caused by the taking consists primarily in the loss of possibility to make future profit; comp. the award in the Sapphire International Petroleum Ltd. v. National Iranian Oil Company case of 1963, 35 ILR (1967) pp. 186 et seq., and see I. Delupis, op.cit., (1973) pp. 79 et seq.

77. K. Wellens, op.cit. (1977) p. 101; and cf., text at n. 21 supra.

78. As for the Chilean case see Chile's Decree No. 92 Concerning Excess Profits of Copper Companies of 28 September 1971 (XIV ILM (1975) pp. 983 et seq.), which contains a rectified version of the translation produced in X ILM (1971) pp. 1235 et seq. As for the Libyan case see Law No. 42 of 11 June 1973, XIII ILM (1974) pp. 58–59, and cf., the accompanying statement by the Libyan Prime Minister in Carreau, D. et al. , in “Chronique de droit international économique”, XIX AFDI (1973) p. 782Google Scholar. As for the Kuwaity case see the Award in the matter of an arbitration between Kuwait and the American Independent Oil Company (Aminoil), where the Tribunal concluded: “The total due must consist of the sum of the profits received by the Company in excess of what would have constituted a reasonable rate of return, after taking account of its operating conditions, such a rate of return having always been the basis of its position and legitimate expectations at this time”; XXI ILM (1982) p. 1017.Google Scholar

79. Decision No. 529, the Comptroller General's Decision on Compensation; X ILM (1971) p. 1240. For the US Government's reaction see the US Secretary of State's Statement on Chilean Nationalizations of 13 October 1971; X ILM (1971) p. 1307. Cf. also, Lillich, R.B., “The recent Chilean experience and future prospects”, Denver JIL & Pol. (1972) p. 143Google Scholar; E.U. Petersmann, op.cit. (1973) p. 291; Seidl-Hohenveldern, I., “Chilean copper nationalizations before German courts”, 69 AJIL (1975) pp. 112, 115CrossRefGoogle Scholar; Sornarajah, M., “Compensation for expropriation: the emergence of new standards”, 13 JWTL (1979) pp. 123–126.Google Scholar

80. A notorious example involving non-American interests is provided by the compensation/services contracts agreement of 1969 on the occasion of the taking of Union Minière du Haut Katanga by the Rep. of Congo in 1967; cf., Smith, D.N. and Wells, L.T., “Mineral agreements in developing countries: structures and substance”, 69 AJIL (1975) p. 582.CrossRefGoogle Scholar

81. As for the Venezuelan case see W.D. Rogers, op.cit., (1978) pp. 7 et seq.; as for the Peruvian (Marcona) case see Gantz, op.cit., (1977) pp. 474 et seq. On the various possibilities of entering into service and other co-operation contracts cf., Asante, K.B., “Restructuring transnational mineral agreements”, 73 AJIL (1979) pp. 335 et seq., 360 et seq.CrossRefGoogle Scholar

82. Cf., Schwarzenberger, G., “The standard of civilization in international law”, VIII Curr. Leg. Probl. (1955) p. 220.Google Scholar

83. See n. 15 supra.

84. Lissitzyn, O.J., “International law in a divided world”, Int. Conc. No. 542 (1963) p. 58.Google Scholar

85. The principle of “acquired rights” in a traditional sense was recognized by the PCIJ, e.g., in 1923 in the German Settlers case (Series B. No. 6 p. 36); and in 1926 in the German Interests in Polish Upper Silesia case (Series A No. 7 p. 22). The same holds for a number of important arbitral awards, e.g., in the Lighthouses case of 1956 (23 ILR p. 122) and the Arabian-American Oil Comp. v. Saudi Arabia case of 1958 (27 ILR p. 101).

86. Ph. Jessup, C., A modern Law of nations (1948) p. 96.Google Scholar

87. Castaneda, J., The underdeveloped nations and the development of international law, XV Int. Org. (1961) p. 39.Google Scholar

88. Cf., Falk, R.A., “The new states and international legal order”, 118 Hague Recueil (1966) p. 41Google Scholar, where he observes: “These new nations are being asked to accord respect to a system of law used in prior decades to legalize the colonial structure of authority that held their societies in protective custody. It is natural that the hostility of the new states toward colonialism spills over to influence their attitude toward international law”.

89. Anand, R.P., New states and international law (1972) p. 59.Google Scholar

90. Idem p. 59.

91. Touscoz, J., “La nationalisation des sociétés pétrolières françaisas en Algérie et le droit international”, 8 Rev. belge (1972) p. 497.Google Scholar

92. Calvo, C., “Le droit international théorique et practique” (5th ed., 1896) I par. 205 p. 350Google Scholar; III par. 1280 p. 142; VI par. 256 p. 230.

93. W.D. Rogers, op.cit., (1978) p. 3.

94. Strupp, K.-Schlochauer, H.J., Wörterbuch des Völkerrechts (1961) pp. 398–399.Google Scholar

95. Constitution of the Rep. of Peru (1939, as amended latest in 1964) Art. 17; text in Peaslee, A.J., Constitutions of nations (1970) IV p. 1108Google Scholar. Cf., also, e.g. the Constitutions of Mexico, Art. 27 (Idem, IV pp. 900–901); and of Venezuela, Art. 45 (idem, IV p. 1209).

96. American Treaty on Pacific Settlement (Pact of Bogotá, 1948) Art. 7; 30 UNTS p. 55. The USA made a reservation to this provision. Cf., also, e.g., the Convention on Rights and Duties of States (Montevideo Convention, 1933) Art. 9 of which provides: “The jurisdiction of States within the limits of national territory applies to all the inhabitants. Nationals and foreigners are under the same protection of the law and the national authorities and the foreigners may not claim rights other or more extensive than those of nationals”; text in 70 AJIL (1976) p. 445. Cf., also, the Andean Foreign Investment Code (1971), Arts. 50 and 51 of which provide: “Member countries shall not grant to foreign investors any treatment more favourable than that granted to national investors” (50). “In no instrument relating to investments or to the transfer of technology shall there be clauses that remove possible conflicts or controversies from the national jurisdiction and competence of the recipient country or allow the subrogation by States to the rights and actions of their national investors” (51); XI ILM (1972) pp. 126 et seq.

97. K. Strupp-H.J. Schlochauer, n. 94 supra, p. 399; Dawson, F.G. and Head, I.L., International law, national tribunals and the rights of aliens (1971) pp. 174–175.Google Scholar

98. This has been affirmed by the PCIJ in 1924 in the Mavrommatis Palestine Concessions case (Series A No. 2 p. 12), where the Court observed: “It is an elementary principle of international law that a State is entitled to protect its subjects when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channels”. The basic assumption underlying the doctrine of diplomatic protection as a right of states is de Vattel's much quoted credo that “an injury to a citizen is an injury to the state”; cf. Brownlie, I., Principles of international law (1979) p. 518.Google Scholar

99. 575 UNTS p. 159; ICSID stands for the International Center on the Settlement of Investment Disputes.

100. Art. 27(1) of the Convention reads: “No Contracting State shall give diplomatic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to arbitration under this Convention, unless such other Contracting State shall have failed to abide by and comply with the award rendered in such dispute”.

101. Doc. 39, Press Release No. 57 of 9 September 1975;quoted by W.D. Rogers, op.cit., (1978) p. 4. Cf., also, p. 56 at n. 206 infra.

102. K. Wellens, op.cit., (1977) pp. 67–68.

103. Orrego-Vicuna, F., “Some international law problems posed by the nationalization of the copper industry by Chile”, 67 AJIL (1973) pp. 718–719.Google Scholar

104. E. Jiménez de Aréchaga, op.cit., (1978) p. 182. The thesis that a government could not commit the state to abstain from the taking of foreign property, such a proposition being incompatible with the principle of state sovereignty over its economic affairs, is a recurrent theme among Third World authors. Cf., also, e.g., M. Sornarajah, op.cit., (1979) p. 122.

105. E. Jiménez de Aréchaga, op.cit., (1978) p. 183; M. Sornarajah, op.cit., (1979) pp. 113, 119. As for (Western opposition to) excess profits and other elements considered as legitimately deductable amounts by Third World authorities, see Muller, M.H., “Compensation for nationalization: a North-South dialogue”, 19 Col. J. Transn. L (1981) pp. 35 et seq.Google Scholar

106. Eventually, Mexico agreed to the payment of compensation, but maintained its claim that it was not under a legal obligation to do so; cf., B.A. Wortley, op.cit., (1959) pp. 120 et seq. As for the Cuban case, see the text at nn. 34 and 53 supra. If it is applied consistently, even the Calvo doctrine's prescription of equal treatment of foreigners and nationals could not be interpreted as evidence of an implicit recognition of the applicability of international law. Indeed, such a prescription now seems to be abolished; Cf., p. 48 infra.

107. I. Brownlie, op.cit., (1979) p. 524.

108. An important step on this road was the adoption, in 1961, by the Asian-African Legal Consultative Committee – with Japan as sole dissident – of a Declaration of Principles concerning Admission and Treatment of Aliens, which recognizes the national standard and claims that payment of compensation is subject only to “local laws, regulations, and orders”; I. Delupis, op.cit., (1973) p. 87.

109. It is against the background of the development towards more flexibility which increasingly marks the interpretation of the “international standard” that this effort is deplored as being unnecessary and provocative by many Western observers. Cf., Lillich, R.B., “The diplomatic protection of nationals abroad: an elementary principle of international law”, 69 AJIL (1975) p. 361.CrossRefGoogle Scholar

110. The resolutions in question are: GA Res. 523 (VI), 626 (VII), 824 (IX), 837 (IX), 1314 (XIII), 1515 (XV), 1803 (XVII), 2158 (XXI), 2386 (XXIII), 2542 (XXV), 2626 (XXV), 2692 (XXV), 3016 (XXVII), 3041 (XXVII), 3171 (XXVIII), 3175 (XXVIII), 3185 (XXVIII), 3201 (S-VI), 3202 (S-VI) and 3281 (XXIX).

110a. P. Peters et al., n. 300 infra, p. 23.

111. See the Declaration on the Granting of Independence to Colonial Countries and Peoples, GA Res. 1514 (XV) para. 2. The characterization of self-determination as a right was prepared by a series of previous resolutions following the track of GA Res. 421 D (V); and was promoted, in particular, by the Bandung Conference of Non-aligned Countries held in 1955.

112. This view was expressed by Afro-Asian states already during the 8th session of the UN Commission on Human Rights; cf., Banerjee, S.K., “The concept of permanent sovereignty over natural resources – an analysis”, 8 IJIL (1968) p. 518Google Scholar. Cf., also, Asamoah, O.Y., The legal significance of the declarations of the General Assembly of the United Nations (1966) p. 83.Google Scholar

113. As for states see e.g., GA Res. 2625 (XXV) 3rd principle para. 4; 3281 (XXIX) Art. 1. As for nations/countries see e.g., GA Res. 1314 (XIII); 1803 (XVII) para. 2; 3201 (S-VI) para. 4(d); TDB Res. 88 (XII) para. 1. As for peoples see e.g., GA Res. 1314 (XIII); 1514 (XV) para. 2; 2625 (XXV) 5th principle; 3201 (S-VI) para. 4(a); 3281 (XXIX) Ch. I principle (g).

114. Annexed to GA Res. 2200 (XXI).

115. GA Res. 626 (VII).

116. GA Res. 523 (VI), 1803 (XVII); UNCTAD I, General and Special Principles to Govern International Trade Relations and Trade Policies Conducive to Development, Gen. Principle 3; UNCTAD Res. 46 (III); TDB Res. 88 (XII).

117. International Covenant on Economic, Social and Cultural Rights, Art. 25; International Covenant on Civil and Political Rights, Art. 47.

118. In 1955, during the debates in the Third Committee on what subsequently was to become Art. 1 of the Human Rights Covenants, the delegates of the UK and the USA declared that they could accept the concept of self-determination only as a political principle. Similarly, in 1962, during the debates on Res. 1803 (XVII), the delegate of Japan held that the principle of self-determination was not yet sufficiently accepted as part of international law. Cf., S.K. Banerjee, op.cit., (1968) pp. 523, 535; Gess, Karol N., “Permanent sovereignty over natural resources”, 13 ICLQ (1964) pp. 410–411.CrossRefGoogle Scholar

119. An example in question is provided by the history of Articles 1 and 25 (resp. 47) of the Human Rights Covenants. Since the compromise formula of Art. 1 arrived at already in 1955 could no longer satisfy the G. 77 at the time when the texts were finalized in 1966 – by then the Western Group had become fully satisfied with it – an amendment was adopted by the Third Committee which eventually found its way into the Covenants as Art. 25, respectively 47. The provision reads: “Nothing in the present Covenant (i.e. including Art. 1) shall be interpreted as impairing the inherent right of peoples to enjoy and utilize fully and freely their natural wealth and resources”. It met with 4 resp. 2 dissenting votes, and 20 resp. 17 abstentions; see Yearbook of the United Nations (1966) pp. 411, 415Google Scholar. Another illuminating example, occuring in a different context but resulting from the same kind of fear, is the opposition on Western side against the insertion of a reference to the right to self-determination of peoples into the International Convention Against the Taking of Hostages, adopted in 1979. In this case, there was concern that an unconditional re-affirmation of this right, even in the preambula, might be used for exempting certain national liberation movements from the prohibition of hostage-taking as embodied in the Convention; cf., Verwey, W.D., “The International Hostages Convention and national liberation movements”, 75 AJIL (1981) pp. 69 et seq.CrossRefGoogle Scholar

120. GA Res. 523 (VI) preamb. para. 1.

121. GA Res. 34/46 para. 8. This Resolution was adopted by a vote of 136 against 1, with 7 abstentions. Previously, the UN Commission on Human Rights had adopted the same provision in its Res. 4 (XXXIII) of 1977, as well as 4 and 5 (XXXV) of 1979. In this Commission, only one delegate (Australia) expressed doubt as to the existence of such a right or principle. This is not the place to discuss the merits of the question whether a “right” to development exists, technically legally speaking, as a real “right” or a mere “principle”. See on this question de Vey Mestdagh, K., “The right to development”, XXVIII NILR (1981) pp. 30 et seq.CrossRefGoogle Scholar

122. UN Doc. A/PV 2230th meeting (1974) p. 15.

123. Cf., e.g., GA Res. 1803 (XVII) preamb. para. 10; 2158 (XXI); 2386 (XXIII), 2542 (XXIV); 2692 (XXV); 3171 (XXVIII).

124. Schrijver, N.J., “Permanente soevereiniteit over natuurlijke hulpbronnen: naast rechtenook plichten?” [Permanent sovereignty over natural resources: duties as well as rights?]; XXXIV Int. Spectator (1980) p. 501.Google Scholar

125. Notably, the Declaration on PS; the Declaration on the Establishment of a NIEO; and the CERDS (GA Res. 1803 (XVII); 3201 (S-VI); and 3281 (XXIX) resp.). Combaceau holds that the Declaration on PS does not really recognize the right to PS, since confirmation there of was merely expressed in its preamble; Combaceau, J., La crise de l'energie au regard de droit international, colloque sur la crise de l'energie et le droit international, Société Française de Droit International (1975) p. 22Google Scholar. The present authors cannot share this view: When a given resolution, like 1803, describes in its operative part the conditions for the implementation of a right (para. 1) which as such is recognized in the preamble in unequivocal terms, and adds that violation of the said right is contrary to the principles of the UN Charter (para. 7), it seems a little far-fetched to deny that the right in question is recognized in that resolution. In the particular case of the Declaration on PS, moreover, Karol Gess concludes from the records: “Both in terms of the tenor of the preamble itself, and in terms of its interpretation in debate, there is ample support for the view that the instrument adopted by the General Assembly in fulfilment of its terms of reference is the resolution as a whole”; K.N. Gess, op.cit., (1964) p. 406, and see n. 204 infra.

126. GA Res. 837 (IX).

127. See nn. 137, 138, 139 infra. At this place it may already be observed that the Assembly has never defined these concepts. It may be assumed that the term “state” should be understood in its legal sense, by reference to the trinity “people, territory, government”, but it is not clear what “nation” and “people” means; notably, whether “nation” (and “country”) should be understood as to refer to a political concept and “people” to an ethnic concept. In view of the fact that in the course of the Sixties the term “people”, as it occurs in GA resolutions, was obviously endowed with a political connotation – the term being reserved for peoples “under colonial domination, alien occupation, and apartheid (see infra) – it must be assumed that both “nations” and “peoples” in GA terminology are political concepts (which begs the question as to the difference between them). Be this as it may, we are obviously confronted here with another example of consistently inaccurate drafting – or again a “deliberate ambiguity”? – in view of which the present authors have taken the liberty to confine themselves to the obvious extremes: “states” and “peoples”. Thus, when reference is made hereinafter to “states and peoples”, “nations” are implied. To the notion of “peoples” and the possibility of peoples having “sovereign” rights, we come back infra.

128. Although reference to the principle of PS was deleted, the unconditional context in which peoples' right “freely (to) dispose of their natural resources” was formulated induced 12 member states to vote against, and 13 others to abstain on this paragraph (which was adopted with 33 affirmative votes); Yearbook of the United Nations (1955) p. 157.Google Scholar

129. See e.g., the delegates of France and Japan; the former stating that, although the principle of PS was founded on international law, it did not as yet constitute part thereof. UN Doc. A/C.2/SR. 857 p. 3 (France); ECOSOC 32nd sess., 1178th meeting, p. 172 (Japan). Later, during discussions in the Committee on Natural Resources, however, Japan did recognize the principle of PS; UN Doc. E/5663 (1975) p. 30.

130. In this Committee no agreement was possible, notably, on the question whether PS was a constituent element of the principle of sovereign equality; according to K. Wellens, op.cit., (1977) pp. 16–17 Ch. II. It is, indeed, worth noting that the principle of PS does not appear under the principle of sovereign equality in the Declaration on Principles of International Law, GA Res. 2625 (XXV).

130a. Cf., nn. 156, 162 infra.

131. Cf., e.g., GA Res. 523(VI), 626 (VII), 3185 (XXVIII); and UNCTAD I, General Principle 3 (see n. 116 supra), UNCTAD Res. 46 (III), and TDB Res. 88 (XII).

132. Cf., e.g., GA Res. 1314 (XIII) and 1803 (XVII). In this connection it has also been observed that, as far as inter-state relations are concerned, the association of PS with economic self-determination arises from the consideration that “such (economic) dependence may infringe the principle of sovereign equality”; O.Y. Asamoah, op.cit., (1966) p. 83.

133. See TDB Res. 88 (XII) and n. 123 supra.

134. Reproduced in XI ILM (1972) pp. 1474–1475.

135. Cf., S.K. Banerjee, op.cit, (1968) p. 524.

136. On the concept of “peoples” and its relationship with that of “sovereignty” see infra.

137. GA Res. 626 (VII), 1803 (XVII), 2158 (XXI), 3171 (XXVIII), 3185 (XXVIII), 3201 (S-VI), 3281 (XXIX); and TDB Res. 88 (XII).

138. GA Res. 837 (IX), 1314 (XIII), 1803 (XVII); and TDB Res. 88 (XII). In one case, the “undeveloped countries” are particularly mentioned as subjects of this right; GA Res. 523 (VI).

139. GA Res. 626 (VII), 837 (IX), 1314 (XIII), 1803 (XVII).

140. GA Res. 1514 (XV) para. 1.

141. This is the most important original meaning of the term “permanent”. Other original and subsequent connotations of this term are discussed infra.

142. GA Res. 3201 (S-VI) para. 4(f). Cf. also, GA Res. 3175 (XXVIII) paras. 3 and 4, 3281 (XXIX) Art. 16.

143. GA Res. 2625 (XXV) 5th principle para. 6.

144. GA Res. 1514 (XV) preamb. para. 11.

145. Quoted in K.N. Gess, op.cit., (1964) p. 444. This intervention was made in 1962 during the debates on GA Res. 1803 (XVII).

146. UN Doc. A/Conf. 80/31 (1978). Similar provisions are found in the Vienna Convention on Succession of States in Respect of State Property, Archives and Debts of 7 April 1983, Articles 15 (4), 28 (7), 30 (4), 31 (4), 38 (2); XXII ILM (1983) pp. 306 et seq.

147. K. Wellens, op.cit., (1977) p. 32 (translated from Dutch by the authors).

148. In particular, occupied Arab peoples and territories, and the people and territory of Namibia; comp. resp. GA Res. 3005 (XXVII), 3175 (XXVIII), 3336 (XXIX), 3516 (XXX), 31/68, 32/161, 34/136; and GA Res. 3295 (XXIX), 32/9, 33/182.

149. Thus, while the NIEO Declaration (GA Res. 3201 (S-VI) reaffirms the right to PS of states (para. 4.e), it entitles peoples “merely” to self-determination (para. 4.a) and to restitution and compensation for resources depleted by others prior to their becoming fully independent (para. 4.f). Similarly, while GA Res. 3171 (XXVIII) reaffirms the inalienable right of states to PS (para. 1), it merely “supports the efforts of … peoples … to regain effective control over their natural resources” (para. 2; emphasis added). Again, a Resolution adopted in 1977 by the Committee on Natural Resources (its draft number is E/C.7/L.68/Rev. 1) reaffirms “the inalienable rights of peoples and permanent sovereignty of states over their natural resources” (emphasis added; UN Doc. E/6004 (1977) p. 5).

150. K.N. Gess, op.cit., (1964) p. 415.

151. K. Wellens, op.cit. (1977) p. 28 (emphasis added; translated from Dutch by the authors).

152. GA Res. 3171 (XXVIII) para. 3; 3201 (S-VI) para. 4(e); Lima Declaration and Plan of Action on Industrial Development and Co-operation, adopted by the Second Conference of UNIDO, para. 32 (UN Doc. ID/B/155/Add. 1(1975) p. 7).

153. TDB Res. 88 (XII).

154. In other cases also the state is mentioned as the subject entitled, but the principle of PS as the legal foundation of the right to take foreign property can only indirectly be derived from the wider context of the provision in question. This holds, notably, for para. 4 of GA Res. 1803 (XVII) and para. 2.2(c) of the CERDS.

155. See Part 2 supra.

156. Representatively, the delegate of France observed during the debates in 1962: “No one contested the sovereign right of States to use their natural resources as they saw fit; nor did anyone contest … the right of a State to nationalize undertakings in important sectors of its economy”; UN Doc. A/C.2/SR.842 p. 272. Cf., in similar terms the delegates of the USA, GA Off. Rec. 1193rd meeting, A/PV. 1193 (1962) pp. 1124–1125; Ireland, A/C.2/SR. 848 p. 314. Cf., also, van Emde Boas, who writes: “No delegation contested that sovereignty over natural resources entails the right of the state to reserve or take over, for purposes of general welfare, the exploitation of natural resources”; van Emde Boas, M.J., “De Verklaring van de Verenigde Nations inzake permanente soevereiniteit over natuurlijke hulpbronnen” [The Declaration of the UN on permanent sovereignty over natural resources], XVII Int. Spectator (1963) p. 508Google Scholar (translated from Dutch by the authors). It is not the right to take foreign property as such, but the modalities of its exercise, which is the subject of legal dispute. Thus, when in 1952 the delegate of Uruguay proposed to insert “the right of sovereign countries to nationalize and freely exploit their natural resources” into Res. 626 (VII), his proposal was defeated by Western countries not because they did not recognize this right, but in view of its unconditional formulation and the accompanying lack of reference to the obligations arising out of international law; see UN Doc. A/C.2/L. 165 and Corr. 1–3, as well as Yearbook of the United Nations (1952) p. 387.Google Scholar

157. Cf., e.g., for (a) GA Res. 523 (VI), 626 (VII); for (b) 3016 (XXVII), 3171 (XXVIII); for (c) Lima Declaration (n. 152 supra) para. 32; for (d) GA Res. 837 (IX), 1803 (XVII); for (e) 3201 (S-VI) para. 4(f); for (f) 3201 (S-VI) para. 4(e), ECOSOC Res. 1956 (LIX) of 1975; for (g) GA Res. 3281 (XXIX). It should be observed here that the distinction between “natural wealth and resources” (d) and “all wealth and natural resources” (g) implies that in the latter case also non-natural (e.g., artificial, cultural) wealth is covered; N. Schrijver, op.cit., (1980) p. 506.

158. UN Doc. A/AC.97/5 Rev. 2 (1962).

158a. GA Res. 1803 (XVII), in its title and in oper. paras. 2 and 5.

158b. Idem oper. paras. 1, 3, 6, 7, 8.

158c. GA Res. 3201 (S–VI), para. 4(e).

158d. GA Res. 3202 (S-VI), para. VHI(a).

159. Cf., de Waart, P.J.I.M., “Permanent sovereignty over natural resources as a cornerstone for international rights and duties”, XXIV NILR (1977) pp. 312–313.Google Scholar

160. 19 Encyclopedia Americana (1982`) p. 792.Google Scholar

161. Zimmermann, E.W., World resources (1933), reprinted 1951) p. 15Google Scholar. Similarly, one can only presume that today “natural wealth” may include sunny beaches, flora and wildlife, natural harbours, etc.

162. The correctness of this interpretation of the Western position is well suggested by a statement made by the delegate of Canada on the occasion of the adoption of the NIEO Declaration, when he said: “Our discussion of paragraph 4(e) on permanent sovereignty and nationalization revealed general agreement on the fundamental principle that each State enjoys permanent sovereignty over natural resources and all economic activities within its territory. The problem we were unable to resolve relates to identifying those legal principles which are to apply when a State, in the exercise of its permanent sovereignty, adopts measures of nationalization. My delegation considers that a State's right to undertake nationalization must be exercised in accordance with the general rules of international law and practice governing such an act”; UN Doc. A/PV 2229th meeting (1974) pp. 11–12 (emphasis added). Comp. in similar terms e.g. the delegates of Italy and Greece (A/PV 2230th meeting, pp. 3, 9). See further section 3.2 infra.

163. Such a proposal, submitted by Uruguay in connection with GA Res. 626 (VII), was fervently opposed in view of the largescale “nationalizations” of oil and tin mining interests by respectively Iran and Bolivia, which had just taken place. At that time (1952), a number of Third World delegations still concurred in the view that the phrase was unnecessary and might be counter-productive from a foreign investment flow point of view. See UN Doc. A/C.2/L. 165 and Corr./l-3; A/C.2/L.165 Rev. 1; A/C.2/L. 143 (all of 1952); and cf., Kellogg, E.H., The 7th General Assembly ‘nationalization’ resolution: a case study in UN economic affairsGoogle Scholar, pamphlet No. 3, The Woodrow Wilson Foundation (1955).

164. E.g. GA Res. 1803 (XVII), 3171 (XXVIII); TDB Res. 88 (XII).

165. GA Res. 1803 (XVII).

166. GA Res. 3281 (XXIX).

167. GA Res. 3201 (S-VI).

168. UN Doc. E/C.10/AC.2/8 (1978) p. 12 para. 52.

169. Cf. Hyde, J.N., “Permanent sovereignty over natural wealth and resources”, 50 AJIL (1956) p. 854CrossRefGoogle Scholar. For a later example, occurring during the debates on Art. 2.2(c) of the CERDS, see the explanation of vote by the delegate of Canada; GA Prov. Rec, 2315th meeting (1974) para. 57.

170. UN Doc. A/C.2/SR. 853 (1962) p. 350.

171. Cf., the statement by the US Government, nn. 26, 7 2 supra, where it is said that acceptance by US nationals of less than minimum standard treatment does not entail acceptance by the US Government; which under all circumstances “reserves its right to maintain international claims for what it regards adequate compensation under international law”.

172. With respect to the demand that international law ultimately also governs the relations between private investor and host country, a Mexican diplomat has said that the result of acceptance of such a proposition “would be to place States on an equal legal and political footing with foreign corporations, and that would mean that these corporations would receive nothing more or less than the treatment which could be reserved solely for States”; GA Prov. Rec, 2315th meeting (1974) para. 75. Cf., further pp. 42–43 infra.

173. It should be noted that the place of the comma preceeding the words “and international law” is essential: it precludes the otherwise possible interpretation that the applicability of international law would depend on its compatibility with what the host government regards as “international economic co-operation”.

174. This was achieved by means of an amendment jointly submitted by, on the one hand, the USA and, on the other, Brazil and Peru. The original proposal of the Human Rights Commission (adopted by a vote of 10 against 6) did not refer to international law at underall. See UN Doc. E/2256 – E/CN.4/669 and annexes, pp. 44, 46; Yearbook of the United Nations (1954) p. 211Google Scholar; idem (1955) p. 157.

175. The text reads: “Nothing in the present Covenant shall be interpreted as impairing the inherent right of all peoples to enjoy fully and freely their natural wealth and resources”.

176. F. Orrega-Vicuna, op.cit., (1973) p. 723.

177. P.J. O‘Keefe, op.cit., (1974) p. 260.

178. Idem p. 265.

179. See UN Doc. A/C.2/L.670; A/C.2/SR.858 p. 389. Subsequently, a similar amendment, according to which the e would be a right to nationalize “without let or hindrance”, was defeated in the Plenary by a vote of 34 in favour, 48 against, and 21 abstentions. It is important to note that among the dissenting votes one finds 16 and among the abstainees 21 from the G. 77; UN Doc. A/L. 414, and GA Off. Rec, 1194th meeting (1962) p. 113.

180. GA Res. 837 (IX). A similar phrase was subsequently inserted into Res. 1314 (XIII), 1515 (XV), and 1803 (XVII).

181. GA Res. 626 (VII) para. 2, adopted by a vote of 36 in favour, 4 against, and 20 abstentions; cf., also.GA Res. 2692 (XXV) para. 6, adopted by a vote of 100 in favour, 6 against, and 3 abstentions.

182. UN Doc. A/C.2/SR.851 p. 332.

183. UN Doc. A/C.2/L.868/Rev. 2 and Rev. 3. Western objections against the original Algerian proposal (A/C.2/L.691) concerned its reference to invalidity of certain acquired rights. “In a spirit of compromise” the delegate of Algeria was willing to accept the more moderate version of the USA/UK amendment. Preambular paragraph 5 was adopted by a vote of 85 in favour, 1 against, and 6 abstentions.

184. On this occasion, several dissenting states indicated, however, that they agreed that compensation should be paid; cf., I. Foighel, op.cit., (1964) p. 103.

185. O.Y. Asamoah, op.cit., (1966) p. 92.

186. See Yearbook of the United Nations (1966) pp. 329 et seqGoogle Scholar. Instead, a Mexican amendment was adopted, according to which the Assembly: “Confirms that the exploitation of natural resources in each country shall always be conducted in accordance with its national laws and regulations” (emphasis added).

187. Text in XI ILM (1972) pp. 1474–1475. Wellens correctly observes that the words chosen in para. 2 for the purpose of referring to the Declaration on PS “without prejudice to what is set forth in General Assembly Resolution 1803 (XVII)”, are not as meaningless as the mere “recalling GA Res. 1803” in Resolutions 3016 (XXVII) and 3171 (XXVIII); K. Wellens, op.cit., (1977) pp. 91–92.

187a. Elian, G., “The principle of sovereignty over natural resources” (1979) pp. 103–104Google Scholar; P.J.I.M. de Waart, op.cit., (1977) p. 311.

188. See the proposal submitted, in the name of the member states of EEC, by the FRG; UN Doc. A/AC.166/SR.6 pp. 9–10. It was received by the delegate of Peru in a manner which would hardly have better indicated the irreconcilability of the positions taken at that time: “It implies that the sovereign right of States is subordinate to international law”); Idem p. 10. Cf., also the statements by the delegates of the USA, France, Japan, and the UK; reproduced in XIII ILM (1974) pp. 746, 755, 759, and 764 respectively.

189. Cf., e.g., the delegate of Canada (GA Prov. Rec, 2315th meeting (1974) para. 56; and A/C.2/SR.1649 p. 446); Australia (A/C.2/SR.1650 p. 450); UK (Idem p. 454).

190. Thus, the delegate of Jordan said that “a reasonable balance should be maintained between the overriding consideration of sovereignty and the national independence of States, particularly the developing States, on the one hand, and the pragmatic consideration of encouragement of foreign investment on the other”; GA Prov. Rec, 2316th meeting, para. 12 (emphasis added).

191. UN Doc. A/C.2/L. 1404.

192. UN Doc. A/C.2/SR.1648 p. 438.

193. Apart from the fact that the unanimous vote by itself provides sufficient evidence of the lack of any such connection – the proposal of the Western Group to reiterate the principle of fulfilment of international obligations in good faith in Art. 2 was rejected categorically by the G. 77 – there is the additional consideration that only the “provisions” of the CERDS “are interrelated and that each provision should be construed in the context of the other provisions” (Art. 33.2). Even if the “fundamentals”, which precede the Resolution's Articles, belonged to the “provisions” of the CERDS, the G. 77 could still deny that the question of taking of foreign property, in the manner in which it is dealt with in Art. 2, gives rise to any international obligation.

194. Lima Declaration, n. 152 supra, para. 32.

195. UN Doc. A/C.2/SR.1638 p. 383.

196. The words “by or between” imply that also contracts between private investors and host governments should always be observed “in good faith”; possible municipal legislation to the contrary notwithstanding. This would imply recognition of a certain juridical status of private foreign investors under international law – a conclusion supported by the fact that the countries from Eastern Europe abstained on this paragraph for this very reason; cf.,Mughraby, M.A., Permanent sovereignty over oil resources (1966) p. 36Google Scholar. A number of Third World countries denied the correctness of such a conclusion, however; cf., Schwebel, S.M., “The story of the UN's Declaration on permanent sovereignty over natural resources”, ABAJ (1963) p. 467.Google Scholar

197. S.K. Banerjee, op.cit., (1968) p. 518.

198. UN Doc. A/C.2/SR.834 p. 231.

199. UN Doc. A/C.2/L.669.

200. UN Doc. A/C.2/L.686.

201. See UN Doc. A/C.2/SR.859 p. 397; SR.858 pp. 387, 390. The sub-amendment of Lebanon and Syria was rejected by a vote of 33 in favour, 47 against, and 11 abstentions. The revised USA/UK amendment was adopted by a vote of 53 in favour, 22 against, and 15 abstentions.

202. See n. 196 supra. It has been observed already that there was virtual consensus that this conclusion does not apply to “colonial” agreements; see n. 183 supra.

203. As the delegate of Nigeria put it; UN Doc. A/C.2/SR.845 p. 294.

204. K.N. Gess, op.cit., (1964) p. 406; and her reference to statements in this sense by e.g., Brazil, Chile, and the Philippines, on the one hand, and of Japan, the UK and the USA on the other (Idem p. 406, n. 6).

205. See n. 180 supra.

206. See the text at nn. 173–175 supra.

207. GA Res. 626 (VII). Cf., also, 545 (VI) and 824 (IX).

208. Reference to PS as an “inalienable right” of states (and sometimes of peoples) is made in GA Res. 2158 (XXI), 3171 (XXVIII), and 3281 (XXIX).

209. Cf., S.K. Banerjee, op.cit., (1968) p. 520.

210. A third aspect, the right to be compensated for the depletion of natural resources, has already been dealt with. A fourth (extremely questionable) aspect, concerning “peoples” in particular, might be that the phrase “in no case may a people be deprived of its means of subsistence” could be taken to sustain the thesis that peoples have a right to ignore investment agreements concluded, in a corrupt manner and/or in defiance of national economic interests, by their own governments; as suggested by Umozurike, U.O., “Nationalization of foreign-owned property and economic self-determination”, East African Law Journal (1970) p. 86.Google Scholar

211. The practical impact of this phrase may be re-enforced by the control the UN plans to exercise over the implementation of the principle of PS; GA Res. 2692 (XXV) inviting member states “to inform the Committee on Natural Resources, through the Secretary-General, on the progress achieved to safeguard the exercise of permanent sovereignty over their natural resources” (para. 6).

212. On that occasion, the delegate of the USA declared himself satisfied, since the deletion of an explicit reference to PS and insertion of a reference to international obligations made clear “that international law is intended to include international agreements and also that there was no intention to authorize impairment of legal and property rights”; quoted by J.N. Hyde, op.cit., (1956) p. 860.

213. There is nothing in the records to sustain the thesis that Western countries have been concerned about this.

214. See section 3.1 supra.

215. E.g., the delegates of Argentina and Peru; UN Doc. A/C.2/SR.859 p. 397, A/C.2/SR. 845 p. 259.

216. E.g., the delegates of Chile and Malaya; UN Doc. A/C.2/SR.834 p. 231, A/C.2/SR. 845 p. 295.

217. K.N. Gess, op.cit., (1964) p. 424.

218. Brehme, G., Souveränität der jungen Nationalstaaten über Naturreichtümer. Die ständige Souveränität über die natürliche Reichtümer und Hilfsquellen. Völkerrechtliche Probleme des Kampfes der jungen Nationalstaaten urn ökonomische Unabhängigkeit (1967) p. 133.Google Scholar

219. In view of the course of the negotiations the present authors do not believe, however, that such an interpretation could stand under objective analysis.

220. Cf., the relevant section of the 14-Power amendment (UN Doc. A/C.2/L.1404); and the explanation of vote siiven by Canada (GA Prov. Rec, 2315th meeting, para. 56; A/C.2/ SR.1649 p. 446).

221. Cf., the report of J. Castaneda in his capacity as chairman of the Working Group, where it is observed: “Some jurists and countries maintained, of course, that the ‘minimum-standard’ concept existed in international law and that an alien could receive more favourable treatment than the nationals of a country. Naturally that was rejected by the developing countries, which invoked the principle of sovereign equality embodied in the Charter of the UN as being incompatible with preferential treatment for aliens”; UN Doc. A/C.2/SR.1638 p. 384. This discussion induced Mexico to propose an amendment which eventually was inserted as the last sentence of paragraph 2(a) of Article 2: “No State shall be compelled to grant preferential treatment to foreign investment”; A/C.2/L. 1386 Corr. 6.

222. K.N. Gess, op.cit., (1964) pp. 420–421, where she adds: “the fact that the simple correction called for” –by the USA; UN Doc. A/AC.97/L.9 – “was thwarted merely throws an interesting light on the emotional climate generated by the topic of permanent sovereignty over natural resources”.

223. Cf., the relevant 14-Power amendment, UN Doc. A/C.2/L.1404; and see Yearbook of the United Nations (1974) p. 388.Google Scholar

224. A similar phrase is used in the first preambular paragraph of Res. 523 (VI).

225. E.g., GA Res. 626 (VII) stipulates that states may exercise their right freely to use and exploit their natural resources “wherever deemed desirable by them for their own progress and economic development”. Other resolutions place the exercise of PS within the framework of specific development programmes; like GA Res. 2626 (XXV) and 2386 (XXIII) do with respect to UN Development Decades.

225a. Cf., N.J. Schrijver, op.cit. (1980) p. 509 et seq.

226. As it occurs (sometimes in somewhat different wording) in e.g., GA Res. 837 (IX), 1314 (XIII), 1514 (XV), and Art. 1 of the Human Rights Covenants. In these case of the NIEO Declaration (3201 (S-VI)), which merely repeats the phrase, first formulated in GA Res. 3171 (XXVIII) para. 3, that PS may be exercised “in order to safeguard these resources” (para. 4.e), it is not clear who should stand to benefit: the international community or the taking state (although it must be assumed from the context and the course of the debates that it is the latter).

227. The delegate of India belongs to those who still recognized that there (always) was a duty to pay fair compensation; GA Off. Rec, Plenary Meetings (1952–1953) p. 489. Foighel observes, however, that although “in practice they (the Third World countries) could not conceive of the nationalization of foreign property without compensation”, in 1952 already “the majority of States, especially the Latin-American, the Arabic and the Asiatic States and the Soviet Union and the States belonging to the Soviet bloc rejected the traditional rule that foreigners have a claim to compensation for actions against property, irrespective of what the provisions of the municipal law may be on the liability to pay compensation”; I. Foighel, op.cit., U964) pp. 98, 103.

228. Cf., J.N. Hyde, op.cit., (1956) p. 858.

229. The second paragraph of the sixth Soviet amendment, according to which “the question of compensation for the owner shall in such cases be decided in accordance with the national law of the country taking these measures in the exercise of its sovereignty” (UN Doc. A/C.2/L.670), was rejected by a vote of 28 in favour, 39 against, and 21 abstentions.

230. UN Doc. A/C.2/SR.834 p. 230.

231. Notably Ghana (UN Doc. A/C.2/SR. 840); and Afghanistan (A, C.2/SR. 834 p. 228).

232. Cf., India (Un Doc. A/C.2/SR.835) and Liberia; the delegate of the latter country significantly observing that he could not accept the ideas of Afghanistan “because it implied that there might be some hesitancy in paying compensation to foreign interest in the event of nationalization, which was foreign both to the spirit and the intent of the original draft” (A/C.2/SR.845 p. 294).

233. UN Doc. A/AC.97/L.2.

234. UN Doc. A/C.2/SR.850 p. 7; S.K. Banerjee, op.cit., (1968) p. 530.

235. See n. 116 supra.

236. They were only prepared to agree to the insertion into para. 2 of the phrase “without prejudice to what is set forth in GA Res. 1803 (XVII)”. Cf., n. 187 supra.

236a. Report of the Ad Hoc Committee of the Sixth Special Session, UN Doc. A/9556 (1974) para. 14.

237. UN Doc. A/C.2/L.1386 (emphasis added).

238. UN Doc. A/C.2/L.1404 (emphasis added).

239. UN Doc. A/C.2/L.1386/Corr. 6 (emphasis added).

240. See GA Prov. Rec, 2315th meeting, para. 73–75. This statement very well reflects the relative value of Castaneda's conclusion that a substantial majority of the members of the G. 77 recognizes that a duty to pay compensation exists (Castaneda, J., “La Charte des droits et devoirs économiques des Etats. Note sur son processus d'élaboration”, AFDI (1974) p. 51)Google Scholar; for, this recognition is allegedly based upon principles of domestic, not international law. Cf., p. 24 supra.

241. UN Doc. A/C.2/SR.1649 p. 448.

242. UN Doc. A/C.2/SR.835 p. 234; A/C.2/L.668 (USA).

243. FRG, in the name of the Nine (EEC); Un Doc. A/AC.166/Sr.6 p. 10.

244. UN Doc. A/C.2/SR.1638 p. 384 (Castaneda in his capacity as chairman of the Working Group, with respect to the Group B countries in general); A/C.2/SR.1650 p. 453 (The Netherlands). Cf. in a similar sense, UN Doc. E/5663 (1975) p. 29 (Australia).

245. As observed by Castaneda; idem p. 384 para. 8.

246. See Part 2 supra.

247. GA Prov. Rec, 2315th meeting, para. 57 (emphasis added).

248. GA Res. 3171 (XXVIII). Cf., also, TDB Res. 88 (XII), which was endorsed by GA Res. 3041 (XXVII) para. 16.

249. UN Doc. A/C.2/L.668; A/C.2/SR.835 p. 234; A/C.2/SR.850 p. 7.

250. UN Doc. A/C.2/SR.864 p. 4.

251. UN Doc. A/C.2/SR.835.

252. UN Doc. A/C.2/SR.853.

253. K.N. Gess, op.cit., (1964) p. 428.

254. As regards the doctrine last mentioned, it may be observed that Bolivia, Indonesia, and Romania belong to the countries which have already claimed that the payment of compensation should depend on the profits derived from the operation of the taken property; cf., K. Wellens, op.cit., Ch.II para. F, n. 110.

255. UN Doc. A/C.2/L.654 (emphasis added).

256. UN Doc. A/C.2/SR.834 p. 229 (UK); A/C.2/L.668 (USA).

257. UN Doc. A/C.2/L.686/Rev. 2, (emphasis added).

258. Cf., e.g., Madagascar (Un Doc. A/C.2/SR.846 p. 298); Tanzania (A/C.2/SR.852 p. 341); and Jordan, Morocco and Thailand (A/C.2/SR.856 p. 374, A/C.2/L.699).

259. UN Doc. A/C.2/SR.859, p. 397.

260. UN Doc. A/C.2/L.1404.

261. UN Doc. A/C.2/L.1386/Corr. 6.

262. GA Prov. Rec, 2315th meeting, para. 73.

263. Cf., e.g., Indonesia (UN Doc. A/C.2/SR.1644 p. 422); Kuwait (A/C.2/SR.1642 p. 411); Singapore (A/C.2/SR.1650 p. 454).

264. UN Doc. A/C.2/L.686/Rev. 3.

265. UN Doc. A/C.2/L.697, submitted by Lebanon and Syria.

266. It was adopted by a vote of 52 against 28, with 13 abstentions; UN Doc. A/C.2/SR.859 p. 389.

267. UN Doc. A/C.2/L.1404.

268. Some G. 77 delegations made it clear, however, that this text should be interpreted in a flexible manner; leaving it up to each taking state to decide if it wished to submit a dispute with a foreign investor to international settlement procedures; cf., e.g., Indonesia (UN Doc. A/C.2/SR.1644 p. 422), Singapore (A/C.2/SR.1650 p. 454).

269. GA Res. 3171 (XXVIII) para. 3. See also GA Res. 2625 (XXV) 3rd principle para. 2, 3016 (XXVII) para. 3, 3185 (XXVIII) para. 5, 3201 (S-VI) para. 4(e), and the Lima Declaration of 1975 (n. 152 supra) para. 32, 95. Among these resolutions, 3171 and 3185 even go further by stigmatizing continued coercion as a possible threat to peace (thereby opening the door towards intervention by the UN Security Council on the basis of Chapter VII of the UN Charter).

270. See n. 12 supra.

271. UN Doc. A/C.2/L.1404.

272. Cf., Sinclair, I., “The Vienna Convention on the Law of Treaties” (1973) p. 68.Google Scholar

273. UK/Belize (1982).

274. Sweden/Sri Lanka (1982).

275. Japan/Sir Lanka (1982).

276. USA/Egypt (1982).

277. Sweden/Sri Lanka (1982).

278. In order to prevent misunderstandings, it is essential to note that we are not concerned here with treaty provisions dealing with the settlement of disputes arising over the interpretation or application of the treaty between the Contracting Parties; in the case of which international law applies ipso facto – unless the parties have agreed otherwise, as they sometimes do (for instance, by permitting an arbitral tribunal, upon agreement between the parties, to decide ex aequo et bono; or, as in the case of the multilateral Inter-Arab Investment Protection Treaty, to base its award on the principles of Islamic Law). Here we are only concerned with the law applicable to the taking of certain property which has given rise to a legal dispute between one CP, the host country, and a foreign investor/national of the other CP.

279. Sweden/Sri Lanka (1982).

280. Period (a) Switzerland/Senegal; period (b) Belgium-Lux./Indonesia, Belgium-Lux./Korea, Sweden/Ivory Coast, Sweden/Madagascar, Sweden/Senegal, Switzerland/Tanzania; period (c) Belgium-Lux./Cameroun, Belgium-Lux./Malaysia, Belgium-Lux/Romania, France/El Salvador, France/Jordan, Sweden/China, Sweden/Sri Lanka.

281. Period (b) Belgium-Lux./Indonesia, Belgium-Lux./Korea; period (c) Belgium-Lux./Egypt.

282. All of them are category I treaties.

283. The exceptions are France/Tunisia (72), and Egypt/Sudan (77).

284. See section 3.7 infra.

285. UK/Iran (59), UK/Thailand (78), (emphasis added).

286. UK/Korea (76), and FRG/Papua New Guinea (80) respectively.

287. For instance, Japan/Egypt (77) entitles Egypt to grant more favourable than MFN treatment to companies in which a majority of the capital is held by one or more members of the Arab League.

288. These treaties are UK/Belize, UK/Cameroon, UK/Costa Rica, and UK/Yemen, Arab. Rep,, all concluded in 1982.

289. Cf., the Vienna Convention on the Law of Treaties, Art. 31 para. 4; and the comment by Oppenheim/Lauterpacht, recognizing the general principle of treaty interpretation that “if two meanings of a provision are admissible according to the text of a treaty, such meaning is to prevail as the party proposing the stipulation knew at the time to be the meaning preferred by the party accepting it”; and that “if the meaning of a provision is ambiguous, and one of the contracting parties, at a time before a case arises for the application of the provision, makes known what meaning it attributes to it, the other party or parties cannot, when a case for its application does occur, insist upon a different meaning unless it has previously protested and proposed the necessary steps to secure an authentic interpretation of the ambiguous provision” (op.cit., (1955) pp. 954–955).

290. The general provision in question in these treaties reads: “(1) Neither Contracting Party shall in its territory subject investments or returns of nationals or companies of the other Contracting Party to treatment less favourable then that which it accords to investments or returns of its own nationals or companies or to investments or returns of nationals or companies of any third State. (2) Neither Contracting Party shall in its territory subject nationals or companies of the other Contracting Party, as regards their management, use, enjoyment or disposal of their investments, to treatment less favourable than that which it accords to its own nationals or companies or to nationals or companies of any third State”. As observed before, the example of the UK treaties strongly suggests that the “national or MFN” formula should be interpreted as leaving the option with the beneficiary investor; i.e., the best of national and MFN treatment.

291. A number of treaties explicitly refers to a “public purpose related to internal needs”.

292. France/Tunisia (72), Egypt/Sudan (77).

293. Netherlands/Morocco (71), France/Morocco (75), Greece/Egypt (75), Sweden/Egypt (78).

294. These phrases are used in Netherlands/Kenya (70), Switzerland/Uganda (71), Switzerland/Zaïre (72); Sweden/China (82); and Belgium-Lux./Indonesia (70) respectively.

295. UK/Philippines (80), UK/Thailand (78), US/Rep, of China (46); the treaty last mentioned adding that this period shall not exceed three years.

296. E.g. FRG/Kenya (64), FRG/Tanzania (65).

297. Cf., e.g., UK/Belize (82), which provides that investments shall not be taken except “against just and equitable compensation. Such compensation shall amount to the fair market value of the investment expropriated before the expropriation or impending expropriation became public knowledge, shall include interest at the rate prescribed by law until the day of payment, shall be made without undue delay, be effectively realisable and be freely transferable”.

298. Convention on the Settlement of Investment Disputes between States and Nationals of other States, adopted and opened for signature in Washington on March 1965 (and entered into force on 14 October 1966).

299. The treaties incorporating a reference to ICSID have been marked with an asterisk in the Annex to the present study.

300. These conclusions are in line with those of a previous, more limited, study submitted to the Montreal Conference of the ILA in 1982 by Peters, Schrijver and de Waart. Their analysis covered a sample of 50 bilateral investment protection treaties concluded or ratified during the Seventies; involving 28 developing countries, which were considered to represent “a fair cross section of the Group of 77, both politically and geographically”, and included “countries with a typically restrictive approach to foreign investments, such as Iraq, Syria and Tanzania, as well as those typically open to foreign investments such as Egypt, South Korea, Singapore and Sri Lanka”, plus two European countries (Romania and Yugoslavia). They concluded that the results of their comparison of pre-1974 and post-1974 treaties “constitutes powerful evidence of growing state practice – certainly not yet universal, but nevertheless indicative of a trend – on acceptability of foreign investments under conditions of traditional international law and subject to international arbitration, a development which clearly goes counter to the trend indicated by NIEO and CERDS as usually interpreted”; Peters, P., Schrijver, N.J., and de Waart, P.J.I.M., “Permanent sovereignty, foreign investment and state practice”Google Scholar, Report for the ILA Committee on Legal Aspects of a New International Economic Order (1982) p. 27. It should be observed that Chowdhury has contested the relevance of their sample and the correctness of their conclusions. On the basis of sometimes highly debatable arguments – including, in particular, a questionable interpretation of Art. 2.2.C of the CERDS (see n. 321 infra) – he surprisingly concludes: “No significant trends from some of the recent bilateral treaties have yet emerged which can be said to run counter to the letter and spirit of the Charter (CERDS)”; Chowdhury, S.R., “Permanent sovereignty over natural resources”, paper submitted to a seminar covened by the ILA and the Centre for Research on the New International Economic Order (Oxford, April 1982) p. 95.Google Scholar

301. Cf., e.g., Bin, Cheng, “United Nations resolution on outer space: ‘instant’ international customary law”, 5 IJIL (1965) pp. 35 et seq.Google Scholar; O.Y. Asamoah, op.cit., (1966) pp. 46 et seq.; Sohn, L.B., “The development of the Charter of the United Nations”, in Bos, M. (ed.), “The present state of international law and other essays written in honour of the centenary celebration of the ILA, 1873–1973” (1973) pp. 52 et seq.Google Scholar; Dupuy, R.J., “Declaratory law and programmatory law: from revolutionary custom to ‘soft law’ ”, in Akkerman, R.J., et al. (eds.), “Declarations on principles; a quest for universal peace” (1977) pp. 247 et seq.Google Scholar

302. Cf., e.g., Abi-Saab, G., “The development of international law by the United Nations”, 24 Rev. Egyptienne (1968) pp. 98 et seq.Google Scholar; Anand, R.P., New states and international law (1972) pp. 78 et seq.Google Scholar; Castaneda, J., “The underdeveloped nations and the development of international law”, XV Int. Org. (1961) pp. 47 et seq.Google Scholar; Claude, I., The changing United Nations (1976) pp. 58 et seq.Google Scholar; Falk, R.A., “On the quasi-legislative competence of the General Assembly”, 60 AJIL (1966) pp. 783 et seq.CrossRefGoogle Scholar; Idem“The South-West Africa cases: an appraisal”, 29 Int. Org. (1967) p. 23Google Scholar; Gross, L., “Sources of international law”, in Anand, R.P. (ed.), Asian states and international law (1972) pp. 204 et seq.Google Scholar; Higgins, R., “The development of international law through the political organs of the United Nations”, Proc. ASIL (1965) p. 121.Google Scholar

303. Cf., e.g., India, UN Doc. A/AC. 105/C.2/SR.17 (1963) p. 10; The Netherlands, A/1338/Add. 1; USA, A/AC.105/C.2/SR.20 (1963) pp. 10–11.

304. This thesis has been defended by Bin Cheng, op.cit., (1965) p. 36; O.Y. Asamoah, op.cit., (1966) pp. 46 et seq.; Hjertonsson, K., The new law of the sea; influence of Latin American states on recent developments of the Law of the sea (1973) pp. 121 et seq.Google Scholar

305. The applicability of this principle of Anglo-Saxon legal origin in international law is generally recognized. Cf., R. Higgins, op.cit., (1965) p. 122; Bleicher, S.A., “The legal significance of re-citation of General Assembly resolutions”, 63 AJIL (1969) p. 451.CrossRefGoogle Scholar

306. For some considerations regarding a proper analysis of resolutions pertaining to the estalishment of a NIEO in general, cf., Verwey, W.D., “The establishment of a new international economic order and the realisation of the right to development and welfare – a legal survey”, 21 IJIL (1981) pp. 26 et seq.Google Scholar; Idem, “The United Nations and the Least Developed Countries: an exploration in the grey zones of international law” (1983), to be published under the auspices of the Polish Academy of Sciences in Liber Amicorum Judge Manfred Lachs.

307. The word “Declaration” suggests (or, in most cases, pretends) that the resolution in question reformulates, in a “declaratory” manner, principles or rules recognized as part of existing customary international law. In addition, in the view of the UN Legal Office, a Declaration “is a solemn instrument resorted to only in very rare cases relating to matters of major and lasting importance where maximum compliance is expected”; a view which certainly also applies to a “Charter” (like the CERDS). See the Memo by the Legal Office on “Use of the terms ‘Declaration’ and ‘Recommendation’”, UN Doc. E/CN.4/L.610 (2 April 1962).

308. XVII ILM (1978) pp. 29–31; XXI ILM (1982) pp. 1021–1022.

309. Kapteyn, P.J.G., “De nieuwe internationale economische orde” [The new international economic order], Announcements of the Netherlands Association of International Law, No. 75 (1977) p. 15.Google Scholar

310. Cf., e.g., USA (UN Doc. A/PV. 2229th meeting (1974) para. 81); FRG, in the name of the Nine (Idem para. 106); Canada (Idem para. 139); Belgium-Luxemburg (Idem para. 156); France (Idem, para. 181); Australia (Idem para. 206); Spain (A/PV. 2230th meeting (1974) para. 15); Italy (Idem para. 26); Japan (Idem para. 41); Australia (Idem para. 95); Greece (idem para. 118); Denmark (idem para. 128); UK (A/PV. 2231st meeting (1974) paras. 30, 35).

311. UN Doc. A/PV. 2229th meeting (1974) para. 79.

312. See n. 308 supra.

313. XVII ILM (1978) p. 30. The arbitral tribunal in the Aminoil case was more prudent on this point, leaving the question open.

314. E. Suy in an address on “A new international law for a new world order” at the Uppsala seminar (13 June 1981).

315. E. Suy, “The meaning of consensus in multilateral diplomacy”, in R.J. Akkerman et al. (eds.), op.cit., (1977) pp. 259 et seq.

316. RJ. Dupuy, op.cit., (1977) p. 247.

317. Some would even go further and hold, in view of the abstractness and the absence of definitions in this Resolution, that PS constitue, du moins pour l'instant, non un règle du droit international, mais une doctrine; Fisher, G., “La souveraineté sur les ressources naturelles”, AFDI (1962) p. 518.Google Scholar

318. GA Res. 2626 (XXV) para. 50.

319. Having found no directives for a proper interpretation of the term “appropriate”, the tribunal went as far as to stipulate that compensation must be calculated by means of an equiry into all the circumstances relevant to the particular concrete case, including “a basis such as to warrant the upkeep of a flow of investments in the future”, XXI ILM (1982) p. 1033.Google Scholar

320. Cf., M. Sornarajah, op.cit., (1979) p. 129.

321. In 1977, when the total of ratifications was much lower, the arbitrator in the Texaco case already recognized the number of then prevailing ratifications as part of the evidence against the thesis that the resolutions of 1973 and 1974 reflect opinio juris; n. 308 supra, p. 31. In this connection, Chowdhury's observation that “the trend in dispute settlement mechanism in bilateral treaties is fully consistent whth the provisions of Article 2(2)(c) of the Charter, viz.: prior exhaustion of local remedies in the first instance (unless excluded or restricted)” throws a too positive light on what actually happened. His addition that “this jurisdiction is not exclusive if by the application of free choice of means some international means of settlement (e.g. arbitration) has been agreed upon …” does not really matter: a comparison with the corresponding phrase in GA Res. 1803 (XVII) as well as a compilation of statements made with respect to Art. 2.2(c) by G. 77 representatives reveal quite clearly that the intention of the sponsors of the CERDS was to confine dispute settlement competence to the national courts of the host state and to leave room for international judicial procedures only in a very exceptional case. Chowdhury seems not always to have been too thorough in his analysis or at least not too accurate in his presentation of the contents of the CERDS. He also submits, for instance, that “Article 2(2)(c) contemplates that the exercise of the right to nationalize shall [sic] be accompanied by a duty to pay appropriate compensation. Nationalization without appropriate compensation amounts to confiscation, which is not contemplated by the Charter”. Also this statement is in contradiction with both the text (which conspicuously usus the word “should” instead of Res. 1803's “shall”) and the unequivocal statements on this point of many G. 77 representatives. Cf., S.R. Chowdhury, op.cit., (1982) pp. 88, 92.

322. With respect to investors' acquired rights derived from legislation of the host country, the Secretariat of the Asian-African Legal Consultative Committee in a recent document states: “It is, however, well recognized that there can be no fetter on the right of a state to amend such legislative provisions through their [sic] own constitutional procedures. A provision contained in a contract or assurance given against nationalization, even though creating some kind of a moral obligation, is not legally binding on the government and much less on any successor government”; see AALCC, “Promotion, encouragement and protection of investments”, study prepared for the 22nd session (Colombo, May 1981) p. 10Google Scholar

323. Cf., K. Wellens, op.cit., (1977) p. 5, where he disagrees correctly with W. Niederer.

324. Texaco case, n. 308 supra, p. 30.

325. N. 322 supra, p. 9. Also Bring concludes that “in the United Nations the developing states have shown that there exists a consensus among themselves as regards the question of compensation for nationalized property. This consensus, as expressed for example in the Charter of Economic Rights and Duties of States, clearly implies acceptance of the principle of national treatment”. To the extent, however, that this statement is correct – we have seen that the CERDS, like the NIEO Declaration, also implies a remarkable deviation from the national standard – this does not necessarily imply, according to Bring, that “this consensus amounts to an opinio juris in the sense that the principle embraced is regarded as part of existing law, or as a necessary part of future law”; Bring, O.E., “The impact of developing states on international customary law concerning protection of foreign property”, 24 Scandinavian Studies in Law (1980) p. 127.Google Scholar

326. S.R. Chowdury, op.cit., (1982) p. 95.

327. N. 322 supra, p. 9.

328. Dolzer, R., “New foundations of the law of expropriation of alien property”, 75 AJIL (1981) pp. 566–567.CrossRefGoogle Scholar

329. O.E. Bring, op.cit., (1980) p. 124.

330. G. Schwarzenberger, op.cit., (1969) p. 8–9.

331. Idem p. 190.

332. As the claim was referred to by P. Peters et al., op.cit., (1982) p. 25.

333. S.R. Chowdhury, op.cit., (1982) p. 87.

334. O.E. Bring, op.cit., (1980) p. 128.

335. P. Peters et al., op.cit., (1982) p. 36.

336. The non-discriminatory treatment by Peru of the American Grace Corp., for instance, and the consent of Peru to enter into bilateral negotiations with the US Government could be (and have been) interpreted as being contrary to Peru's opinio juris, bu necessary in order to prevent possible application of the Hickenlooper amendment; cf., Huerta, J.E., “Peruvian nationalization and the Peruvian-American compensation agreements” 10 NYJIL (1977) pp. 18–19Google Scholar, and IX ILM (1970) p. 1225.

337. P. Peters, et al., op.cit., (1982) p. 25.

338. A situation incorrectly presumed to exist by R.W. Bentham in his Comment to the ILA Committee on Legal Aspects of a NIEO, Montreal Conference (1982) p. 8.

339. The others are low-income Third World countries (Afghanistan, Egypt, India, Pakistan Sri Lanka, Sudan), 4 middle-income Third World countries (Gabon, Iran, Rep. of Korea, Singapore) and 2 middle-income European countries (Romania and Yugoslavia) all of whom are capital importing.

340. P. Peters et al., op.cit., (1982) p. 26.

341. While Chowdhury considered the treaty sample studied by Peters et al., as “unrepresentative”, he did not make a similar comment on the study undertaken by O.E. Bring; whose conclusions were in line with those drawn by Chowdhury, but based upon a sample which is less representative than that of Peters, et al. (Bring, for instance, did not include treaties concluded amongst developing countries inter se).

342. See (text at) nn. 338 and 339 supra.

343. N. 322 supra, pp. 9–10 (the linguistic defects appear in the original text).

344. R.W. Bentham, op.cit., (1982) p. 12.

345. We have seen in Part 3 of the present study that it is not correct to suggest, as Bring and Chowdhury do, that “the” (i.e. all) developing countries would share the views expressed in the CERDS. Many of them never expressed their views. In view of the strong group discipline which marks the G. 77 in negotiations with the developed countries, moreover, it is important to recall that on this occasion several developing countries expressed their regret over the absence of any reference to international law (a view expressed apparently not only for practical reasons); a fact correctly observed by the arbitrator in the Texaco case (XVII ILM (1978) p. 30).

346. O.E. Bring, op.cit., (1980) p. 128.

347. The same opinion has been expressed by e.g., VerLoren van Themaat, P., Rechtsgrondslagen van een NIEO [Legal foundations of a NIEO] (1979) p. 280Google Scholar; Fawcett, J.E.S., International economic conflicts: prevention and resolution (1977) p. 66Google Scholar; P. Peters et al., op.cit., (1982) p. 27.

348. International Covenant on Economic, Social and Cultural Rights, Art. 25; International Covenant on Civil and Political Rights, Art. 47; Vienna Convention on Succession of States in Respect of Treaties, Art. 13; Vienna Convention on Succession of States in Respect of State Property, Archives and Debts, Arts. 15(4), 28(7), 30(4), 31(4), 38(2). See Part 3 section 1 and n. 146 supra.

349. Cf., e.g., Rigaux, F., Droit public et droit privé dans les relations internationales (1977) p. 284Google Scholar; Touscoz, J., “La nationalisation des sociétés pétrolières françaises en Algérie et le droit international”, VIII Rev. belge (1972) p. 496Google Scholar. More confusing is the position of Chowdhury, who writes, on the one hand, that “the right of permanent sovereignty, emanating as it does from the right of self-determination, has the same status of jus cogens in contemporary law” and adds, consequently, that with respect to taking of foreign property “the general rules of state responsibility in respect of unlawful acts do not apply”; but contradicts himself by submitting, on the other hand, that “international responsibility is attracted in appropriate cases for nationalization without appropriate compensation”, and “stabilization clauses … run counter to the fundamental concept of permanent sovereignty. However, cancellation of a contract in breach of such a clause has legal consequences and will give a special right to compensation” (S.R. Chowdhury, op.cit., (1982) pp. 91, 92, 94): If PS really belongs to jus cogens, there can be no legal consequences of the violation of a (null and void, i.e. legally non-existing) stabilization clause. I. Brownlie, incidentally, has incorrectly been taken by many to consider PS as a principle of jus cogens; cf., n. 6 at p. 513 of the third edition of his “Principles of public international law” (1979).

350. Notably Algeria (in a dispute with France in 1971; cf., J. Touscoz, op.cit, (1972) p. 496); Libya in 1977 in the Texaco case (XVII ILM (1978) p. 26); and Kuwait in 1982 in the Aminoil case (XXI ILM (1982) p. 1021). Touscoz' assertion, however, that France also would have admitted that PS constitutes jus cogens is unfounded: a statement in which the right to nationalize as such is recognized but its exercise is limited to the extent that certain conditions of legality must be observed (arising in this case from bilateral treaties between France and Algeria) implies exactly the opposite view, i.e., that France does not recognize this proposition.

351. Cf., Bossuyt, M.J., “De houding van de ontwikkelingslanden tegenover het jus cogens en het International Gerechtshof” [The attitude of the developing countries with respect to jus cogens and the ICJ], XXVI Int. Spectator (1972) p. 1814.Google Scholar

352. See the arbitral awards in the Texaco case (XVII ILM (1978) pp. 24, 31); the Aramco case (27 ILR 117 (1963) p. 168); and the Agip v. Popular Rep. of Congo case (XXI ILM (1982) pp. 735).

353. Texaco case, XVII ILM (1978) p. 26.

354. P. Peters et al., op.cit., (1982) p. 11.

355. Reinhard, H., Rechtsgleichheit und Selbstbestrimmungsrecht der Völker in wirtschaftlicher Hinsicht (1980) p. 256.Google Scholar

356. XXI ILM (1982) p. 1021.

357. Idem p. 1033.

358. Idem p. 1022.

359. UN Doc. A/C.2/SR.842 (1962) p. 271.

360. See n. 322 supra, p. 9.

361. “Common Crises North-South: Co-operation for World Recovery” (1983) p. 155Google Scholar. See also, Idem p. 83.

+. Treaties embodying a reference to ICSID (International Center for the Settlement of Investment Disputes; established by the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature on 18 March 1965 and entered into force on 14 October 1966).