ReSPONSIBILITY
The Articles on State Responsibility address countermeasures in Article 22, as circumstances precluding wrongfulness of a breach of primary rules, before setting out the conditions for valid countermeasures in Articles 49–54.
12. See for example, The Restatement (Third) of Foreign Relations Law of the United States § 711 Comment (q), § 905 Comment (b) and Reporter’s note 2 (The Restatement (Third)).
Article 22 provides as follows:
The wrongfulness of an act of a State not in conformity with an international obligation towards another State is precluded if and to the extent that the act constitutes a countermeasure taken against the latter State in accordance with chapter II of Part Three.13
In a nutshell, countermeasures may only be adopted in response to an internationally wrongful act. An injured state must first call on the responsible state to make reparation for the injury,14 and the countermeasure must be proportionate.15 In addition, certain obligations may not be the object of countermeasures (the obligation to refrain from the threat or use of force under the UN Charter,16 peremptory norms of general international law,17 obligations for the protection of fundamental human rights,18 and obligations of a humanitarian character prohibiting reprisals).19
Article 49(1) of the Articles on State Responsibility provides that an injured state may only take countermeasures against a state that is responsible for an internationally wrongful act.20 The ILC Commentary to Article 22 of the Articles on State Responsibility [hereinafter ILC Commentary] explains:
As a response to internationally wrongful conduct of another State, countermeasures may be justified only in relation to that State. [ … ] An act directed against a third State would not fit this definition and could not be justified as a countermeasure. On the other hand, indirect or consequential effects of countermeasures on third parties, which do not involve an independent breach of any obligation to those third parties, will not take a countermeasure outside the scope of article 22.21
Similarly, the ILC Commentary to Article 49 states that “[t] his does not mean that counter- measures may not incidentally affect the position of third States or indeed other third par- ties. [ … ] If they have no individual rights in the matter they cannot complain.”22 The extent to which these principles apply to the obligations under investment treaties is not entirely clear.
There are two principal arguments why the principles may not directly apply.
First, the Articles on State Responsibility deal with obligations owed between states, and do not purport to deal with the obligations of states to non-state entities. The only explicit refer- ence to individuals and non-state actors is in Article 33(2),23 which provides that Part II of the
13. Articles on State Responsibility (n 1) art 22.
14. ibid art 52(1)(a).
15. ibid art 51.
16. ibid art 50(1)(a).
17. ibid art 50(1)(d).
18. ibid art 50(1)(b).
19. ibid art 50(1)(c).
20. ibid art 49(1).
21. ibid Commentary to art 22 [4] in ILC Report (emphasis added).
22. ibid Commentary to art 49(1) [5] in ILC Report (emphasis added).
23. Edith Brown Weiss, ‘Invoking state responsibility in the twenty-first century’ (2002) 96 American Journal of International Law 798, 815.
Articles “is without prejudice to any right, arising from the international responsibility of a State, which may accrue directly to any person or entity other than a State.”24
Thus, the applicability of the Articles on State Responsibility as a whole may depend on whether the obligations under investment treaties are characterized as obligations owed to the other state parties (or as obligations owed to investors only). As I argue below, even if investment treaty obligations are seen as obligations owed to investors, this does not mean they are not also inter-state obligations. Accordingly, the Articles on State Responsibility, including the limits described in the ILC Commentary on Article 22 and Article 49 cited above, would seem to apply.
The second argument against the applicability of the Articles on State Responsibility to investment treaties relies on Article 55 of the Articles on State Responsibility, which provides that the Articles will not apply “where and to the extent that the conditions for the existence of an internationally wrongful act or the content or implementation of the international respon- sibility of a State are governed by special rules of international law [lex specialis].”25 Zachary Douglas has suggested that the lex specialis reservation in Article 55 might have the effect of rendering the provisions on countermeasures in Part I of the Articles on State Responsibility inapplicable to preclude the wrongfulness of a breach of obligations under investment treaties.26
In relation to countermeasures and investment treaties, this argument is not persuasive. The notion that the lex specialis nature of investment treaties renders the doctrine of countermea- sures inapplicable presumes that investment treaties and the Articles on State Responsibility address the same subject matter,27 and there is an actual inconsistency or a discernible inten- tion to exclude the other rules.28 Since investment treaties are typically silent on the possibility of countermeasures being taken in relation to their subject matter,29 there is usually no such express intention. Moreover, an intention to this effect should not be easily implied—as the International Court of Justice stated in its advisory opinion in the Namibia30 case:
The silence of a treaty as to the existence of [ … ] a right [here, the state’s right of termination of the treaty for breach] cannot be interpreted as implying the exclusion of a right which has its source outside the treaty, in general international law, and is dependent on the occurrence of circumstances which are not normally envisaged when the treaty is concluded.31
24. The Commentary to Article 33(2) specifically refers to rights owed under human rights and investment treaties. See Articles on State Responsibility (n 1) Commentary to art 33(2).
25. ibid art 55.
26. Zachary Douglas, ‘The content of international responsibility’ in James Crawford, Alain Pellet and Simon Olleson (eds), The Law of State Responsibility (Oxford University Press 2010) 820, citing UPS v Canada (Award on Merits, 24 May 2007) UNCITRAL (where it was held that the rules on attribution in Article 4 of the ILC’s Articles on State Responsibility were not applicable to the issue of whether the actions of Canada Post (a state enterprise) could be attributed to Canada).
27. Joost Pauwelyn, Conflict of Norms in Public International Law (Cambridge University Press 2003) 364–366, 389.
28. See Articles on State Responsibility (n 1) Commentary to art 55 [4] (‘For the lex specialis to apply it is not enough that the same subject matter is dealt with by two provisions; there must be some actual inconsistency between them, or else a discernible intention that one provision is to exclude another. Thus the question is essentially one of interpretation.’).
29. Bruno Simma and Dirk Pulkowski, ‘Of planets and the universe: Self-contained regimes in international law’ (2006) 17 European Journal of International Law 483, 505.
30. Legal Consequences for States of the Continued Presence of South Africa in Namibia (South-West Africa) (Notwithstanding Security Council Resolution 276 (1970)) (Advisory Opinion) [1971] ICJ Reports 16 (Namibia Case).
31. ibid [47].
The better argument is that countermeasures are not implicitly excluded by investment treaties as lex specialis. It is worth noting that this has been the consensus among the investor-state tribunals that have considered the countermeasures defense.32
The commentary to Article 49(1) cited above discusses not only the position of “third States”
(which appears to be a reference to states that are neither the state taking the countermeasure nor the state that committed the prior internationally wrongful act),33 but also that of “other third parties.” The disputing parties and investor-state tribunals in ADM, Corn Products, and Cargill appear to have interpreted the ILC Commentary as implying that the position of third parties is the same as that of third states.34 Consequently, the debate over countermeasures in investment law has focused on the question of whether the substantive investment protection obligations are owed directly to investors, and the flip side of this issue, that is, whether inves- tors have substantive rights under investment treaties.