Chapter 3

Dispute Settlement

i.              Definitions

1.      Conciliation

(From Latin conciliare: “to call or bring together.”) The process by which an impartial third party makes an independent investigation and suggests a solution to a dispute.

 

2.      Optional Clause jurisdiction

A unilateral grant of jurisdiction by a state to the ICJ that allows the Court to resolve disputes involving that state.

 

3.      Self-judging reservation

A reservation that allows a state to exclude from the jurisdiction of the ICJ any dispute that it determines is a domestic matter.

 

4.      Arbitration

(From Latin arbitrari: “to give a decision.”) The process by which parties to a dispute submit their differences to the binding judgment of an impartial third person or group selected by mutual consent.

 

5.      In rem jurisdiction

The power of a court to determine the ownership rights of persons as to property located within the forum state.

 

6.      Act of state doctrine

Doctrine that the act of a government within the boundaries of its own territory is not subject to judicial scrutiny in a foreign municipal court. A municipal court will decline to hear a dispute based on such acts if to do so would interfere with the conduct of the forum state’s foreign policy.

 

7.      Forum non conveniens

(From Latin: “inconvenient forum.”) Doctrine that a Municipal court will decline to hear a dispute when it can be better or more conveniently heard in a foreign court.

 

ii.              True or False

1. Diplomacy is the process of reconciling the parties to a disagreement by negotiation, mediation, or inquiry.   

Answer: True

2. Inquiries are a popular way to resolve disputes between states, with many thousands of international inquiries having been made in the last 50 years.

Answer: False

3. The investigation by the staff of the International Civil Aviation Organization into the downing by the Soviet Union of a Korean Airlines jet in 1983 is an example of an inquiry.

Answer: False

 

4. A decision of the International Court of Justice has no binding force except between. the parties and only in respect of the particular case.  

Answer: True

5. If a party refuses to comply with a judgment of the International Court of Justice, the other party may have recourse to the Security Council which can then decide upon measures to give effect to the judgment. 

Answer: True

6. Panelists who serve on a WTO dispute settlement panel serve as representatives of their member states.

Answer: False

7. Compliance with panel and Appellate Body reports adopted by the WTO’s Dispute Settlement Body is left to the parties involved.  That is, an injured party may take whatever action its deems appropriate to retaliate against a non-complying party.

Answer: False

8.  Under international law, the jurisdiction of a municipal court to try an international dispute is essentially unlimited.

Answer: False

9. All disputes as to whether or not an International Center for the Settlement of Investment Disputes (ICSID) arbitration tribunal has jurisdiction to hear a matter are determined by the Secretary-General of ICSID.  

Answer: False

10. In most international tribunals (such as the International Court of Justice), a state may only sponsor a complaint on behalf of its own nationals.

 Answer: True

11. A municipal court has in personam jurisdiction when an individual or juridical person is physically present within the forum state.

 Answer: True

12. Sovereign or state immunity is a doctrine that says that domestic courts must decline to hear cases against foreign sovereigns out of deference to their roles as sovereigns. 

Answer: True

13. According to the doctrine of restrictive sovereign or state immunity a state is immune and cannot be brought before a foreign court when it is involved in activities iure gestionis.  

Answer: False

14. It is up to the plaintiff to prove that a state defendant is not entitled to claim sovereign or state immunity. 

 Answer: False

15. According to the forum non conveniens doctrine, a court may refuse to exercise its power to hear a case when it is either inconvenient or unfair to do so. 

Answer: True

 

 

iii.              Multiple Choice

1.  Which of the following is not an example of how negotiations are conducted?

a)        Through debates at an international organization.

b)        Through normal diplomatic channels.

c)        Through summit meetings.

d)        Through the establishment of mixed or joint commissions.

Answer:a

2.  When a mediator provides a channel of communication (and nothing more) between the parties to a dispute, he is:

a)        arbitrating.

b)        attempting a conciliation.

c)        providing his good offices.

d)        using diplomatic tact.

Answer: c

3.  Before a mediation can take place:

a)        both parties to a dispute must consent to the mediation.

b)        the mediator must be acceptable to both parties.

c)        there must be a dispute.

d)        All of the above.    

  Answer: d

4.  International disputes between states are most commonly heard by which of the following tribunals?

a)        Arbitration tribunals.

b)        International tribunals.

c)        Municipal courts.

d)        Both a. and b. above.

Answer: d

5.  Before a state that is not a party to the International Court of Justice’s “statute” may adhere to that statute,

a)        it must agree to help cover the Court’s expenses.

b)        it must agree to respect the Court’s decisions.

c)        it must become a member of the United Nations.

d)        Both a. and b. above.

Answer: d

6.  The International Court of Justice may hear a dispute and hand down a decision:

a)        in cases between states.

b)        upon the request of the UN or upon the request of a Specialized Agency of the United Nations.

c)        in cases between companies

d)        Both a. and b. above.

Answer: d

7.  A municipal court has jurisdiction to hear a criminal dispute if the crime was committed within its own state’s territory.  This is known as the:

a)        Nationality nexus.

b)        Protective nexus.

c)        Territoriality nexus.

d)        Universality nexus.

Answer: c

8.  An International Center for the Settlement of Investment Disputes (ICSID) arbitration tribunal has jurisdiction to do which of the following?

a)        Give an advisory opinion.

b)        Hear a collusive action.

c)        Hear a legal dispute arising out of an investment.

d)        Both a. and b. above.      

Answer: c

9.  Mr. A, a citizen of State A, hijacks an airplane belonging to State B.  While the aircraft is in the air flying over State C, Mr. A shoots and kills Mr. D, a national of State D.  The plane then lands in State E and Mr. A is arrested and charged with Mr. D’s murder in State E.  State E may assume jurisdiction in this criminal case based on which of the following international law nexuses?

a)        Nationality nexus.

b)        Protective nexus.

c)        Territoriality nexus.

d)        Universality nexus.                                     

 Answer:d

10. Mr. Z is a national of both State A and State B.  State A wishes to sponsor a case on behalf of Mr. Z against State B in an international tribunal (such as the International Court of Justice), claiming that Mr. Z’s master nationality is that of State A.  To show this, State A:

a)        may demonstrate that most of Mr. Z’s economic, social, political, civic, and family life is centered in State A.

b)        may point to Mr. Z’s long-time residence in State A.

c)        must prove that Mr. Z has a closer and more effective bond with State A.

d)        All of the above.

Answer: d

11. In determining whether a transaction is commercial for the purpose of applying the doctrine of restrictive sovereign immunity, one should consider:

a)        the designation the parties placed on the transaction.

b)        the nature of the transaction.

c)        the purpose to which the goods involved in the transaction will be put.

d)        whether the state that is a party to the transaction is the plaintiff or the defendant.

Answer: b

12. The justifications given by municipal courts for sometimes applying foreign law in determining a case include:

a)        comity.

b)        fairness.

c)        simplicity.

d)        Both. a. and b. above.

Answer: d

13. Mr. A from State A and Mr. B from State B have agreed that if any disputes should arise in their business deal that the law of State C should apply.  A dispute does arise and the parties ask a court in State D to decide the matter.  Which of the following should the court do?

a)        Apply the law of State A if it is more like the law of State D than the law of State B.

b)        Apply the law of State B if it has the most significant relationship with the transaction between Mr. A and Mr. B.

c)        Apply the law of State C because the parties agreed that it should apply.

d)        Apply the law of State D since the court is obviously most familiar with the law of its own state.

Answer: c

14. When a municipal court uses the governmental interest test in determining a choice of law and two states other than the forum state have legitimate interests, the court may:

a)        dismiss the case if the state in which the court is located can use the doctrine of forum non conveniens.

b)        apply whichever law it feels is the sounder.

c)        apply the law that is most like that of the forum state.

d)        Any of the above.

Answer: d

15. When applying the most significant relationship test to determine the governing law, a municipal court will consider:

a)        which state’s law best promotes the needs of the international system.

b)        which state’s law will be furthered the most by applying it to the case at hand.

c)        which state’s law will best promote the underlying policies of the legal subject matter area involved.

d)        All of the above.

Answer: d

 

iv.              Short answers

1. What are the different means for diplomatically settling a dispute?  Which is the most effective?

Answer: Diplomacy is A form of international dispute settlement that attempts to reconcile parties to a disagreement by use of negotiation, mediation, or inquiry.

-Negotiation is the process of reaching an agreement through discussion between two parties to a dispute. Negotiation is the most important tool in the process of dispute settlement.Negotiations between states are most commonly conducted on an ad hoc basis(special case), but sometimes the procedure is more formal.

-Mediation involves the use of a third party who transmits and interprets the proposals of the principal parties and sometimes advances independent proposals.The process of mediation can start with a request from one or more of the parties, but not infrequently, an outsider offers to serve as a mediator.

In such cases, the Negotiation is more effective that states negotiate through normal diplomatic channels, through the use of competent authorities, through the establishment of mixed or joint commissions, or even through summit meetings.

2. What is the difference between the doctrine of sovereign immunity and the act of state doctrine?

Answer: -Sovereign states are immune from the jurisdiction of foreign courts:

(1) when they engage in activities anywhere in the world that are unique to sovereigns and

(2)  when they act officially within their own territory.

 The first condition comes under the rubric of sovereign or state immunity, the second under the title of act of state.

Sovereign immunity: Rule that a foreign state is immune from all types of suits.

-The act of state doctrine is a rule that restrains municipal courts in some countries from exercising jurisdiction over foreign states. This rule is most developed in the United States, where it is based on the U.S. constitutional requirement of separation of powers.

v.              Case

1. Jane, a saleswoman and a resident of State A, while traveling in State B for the purpose of calling on clients, was injured in a head-on collision between her car and a car driven by Imogene, a tourist and a resident of State C.  Jane sues Imogene to recover for the loss of her car and her injuries in your court in State C.  Jane argues that the law of State B should apply.  State B law allows a court to award punitive damages in addition to compensatory damages.  Imogene argues that the law of State C should apply.  State C law only provides for compensatory damages.  You have agreed to decide this dispute and to write an opinion explaining your decision.

How should the court make this decision?

Answer: