Admissibility

 

 

Admissibility of claims

 

tribunals have differed in the way in which they have differentiated between issues going to admissibility and those going to jurisdiction. Accordingly, users should consult the various entries on jurisdiction.

 

Articles on State Responsibility, Article 44 (Admissibility of claims)

 

Art 44: Admissibility of claims

The responsibility of a State may not be invoked if:

(a) the claim is not brought in accordance with any applicable rule relating to the nationality of claims;

(b) the claim is one to which the rule of exhaustion of local remedies applies and any available and effective local remedy has not been exhausted.

 

Commentary

(1) The present articles are not concerned with questions of the jurisdiction of international courts and tribunals, or in general with the conditions for the admissibility of cases brought before such courts or tribunals. Rather, they define the conditions for establishing the international responsibility of a State and for the invocation of that responsibility by another State or States. Thus, it is not the function of the articles to deal with such questions as the requirement for exhausting other means of peaceful settlement before commencing proceedings, or such doctrines as litispendence or election as they may affect the jurisdiction of one international tribunal vis-à-vis another.[1] By contrast, certain questions which would be classified as questions of admissibility when raised before an international court are of a more fundamental character. They are conditions for invoking the responsibility of a State in the first place. Two such matters are dealt with in article 44: the requirements of nationality of claims and exhaustion of local remedies.

(2)  Subparagraph (a) provides that the responsibility of a State may not be invoked other than in accordance with any applicable rule relating to the nationality of claims. As PCIJ said in the Mavrommatis Palestine Concessions case:

 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.[2]

 Subparagraph (a) does not attempt a detailed elaboration of the nationality of claims rule or of the exceptions to it. Rather, it makes it clear that the nationality of claims rule is not only relevant to questions of jurisdiction or the admissibility of claims before judicial bodies, but is also a general condition for the invocation of responsibility in those cases where it is applicable.[3]

(3)  Subparagraph (b) provides that when the claim is one to which the rule of exhaustion of local remedies applies, the claim is inadmissible if any available and effective local remedy has not been exhausted. The paragraph is formulated in general terms in order to cover any case to which the exhaustion of local remedies rule applies, whether under treaty or general international law, and in spheres not necessarily limited to diplomatic protection.

(4) The local remedies rule was described by a Chamber of the Court in the ELSI case as "an important principle of customary international law".[4] In the context of a claim brought on behalf of a corporation of the claimant State, the Chamber defined the rule succinctly in the following terms:

 for an international claim [sc. on behalf of individual nationals or corporations] to be admissible, it is sufficient if the essence of the claim has been brought before the competent tribunals and pursued as far as permitted by local law and procedures, and without success.[5]

 The Chamber thus treated the exhaustion of local remedies as being distinct, in principle, from "the merits of the case".[6]

(5) Only those local remedies which are "available and effective" have to be exhausted before invoking the responsibility of a State. The mere existence on paper of remedies under the internal law of a State does not impose a requirement to make use of those remedies in every case. In particular, there is no requirement to use a remedy which offers no possibility of redressing the situation, for instance, where it is clear from the outset that the law which the local court would have to apply can lead only to the rejection of any appeal. Beyond this, article 44, subparagraph (b), does not attempt to spell out comprehensively the scope and content of the exhaustion of local remedies rule, leaving this to the applicable rules of international law.[7]

 

 

 

 NAFTA cases

 

Distinguishing between issues of jurisdiction and admissibility

1.        Waste Management v. Mexico I Dissenting Opinion of Keith Highet distinguishes between jurisdiction and admissibility: jurisdiction is the power of the tribunal to hear the case; admissibility is whether the case itself is defective

 Tribunals that consider the relevance of admissibility irrespective of whether they accept a plea of inadmissibility

1.        Mondev v. United States Final Award holds that it has jurisdiction under Articles 1116 and 1122 to the extent (but only to the extent) that the claim concerns allegations of breach of Article 1105(1) by the decisions of the United States courts and to that extent (but only to that extent) the claim is admissible

2.        Feldman v. Mexico Decision on Jurisdiction holds that an ancillary claim is admissible

3.        ADF v. United States Award holds certain ancillary claims to be inadmissible due to claimant's failure to satisfy NAFTA's requirements and to provide supporting evidence

4.        Waste Management v. Mexico II Decision on Mexico's Preliminary Objection concerning the Previous Proceedings discusses claims that fail on (remediable) grounds of inadmissibility such as the failure to exhaust local remedies

5.        Waste Management v. Mexico II Final Award finds on the merits that the claim is admissible (although it fails on other grounds)

 Tribunals that consider that admissibility does not play a role

1.        Methanex v. United States Partial Award finds that Article 21(1) of the UNCITRAL Arbitration Rules grants the tribunal the express power to rule on objections that it has 'no jurisdiction" but confers no separate power to rule on objections to "admissibility"

 

 Findings in specific cases

1.        Feldman v. Mexico Award notes that decision on the issue of exhaustion of local remedies as a condition for claim admissibility primarily depends on the wording and construction of the relevant NAFTA provisions

2.        Waste Management v. Mexico II Decision on Mexico's Preliminary Objection concerning the Previous Proceedings finds that, in general, the dismissal of a claim by an international tribunal on grounds of lack of jurisdiction does not constitute a decision on the merits and does not preclude a later claim before a tribunal which has jurisdiction and the same is true of decisions concerning inadmissibility

3.        Loewen v. United States Final Award holds that the local remedies rule is procedural in character, noting that Article 44 of the ILC Draft Articles on State Responsibility demonstrates that the local remedies rule deals with the admissibility of a claim and not whether the claim arises from a violation or breach of international law

 

 Under other investment treaties

Distinguishing between issues of jurisdiction and admissibility

1.        Micula v. Romania Decision on Jurisdiction and Admissibility finds that an objection to jurisdiction goes to the ability of a tribunal to hear a case while an objection to admissibility aims at the claim itself and presupposes that the tribunal has jurisdiction

2.        Tecmed v. Mexico Award distinguishes between objections to jurisdiction and non-compliance with requirements governing the admissibility of the foreign investor’s claims

3.        Generation Ukraine v. Ukraine Final Award holds that a denial of benefits clause is not a jurisdictional hurdle but a potential filter on the admissibility of claims which can be invoked by the respondent State

4.        BIVAC v. Paraguay Decision on Jurisdiction distinguishes between jurisdiction and admissibility issues in discussing a claim under an umbrella clause

5.        Vivendi v. Argentina II Award finds that the respondent attempted to re-litigate, in the guise of an objection to admissibility, issues of jurisdiction that had been heard and rejected in the determination of its jurisdictional objections

6.        HOCHTIEF v. Argentina Decision on Jurisdiction discusses the distinction between jurisdiction and admissibility: Jurisdiction is an attribute of a tribunal and not of a claim, whereas admissibility is an attribute of a claim but not of a tribunal; a distinction may also be drawn between questions of admissibility and questions of receivability

7.        Abaclat v. Argentina Dissenting Opinion of Georges Abi-Saab notes that admissibility conditions relate to the claim, and whether it is ripe and capable of being examined judicially, as well as to the claimant, and whether he or she is legally empowered to bring the claim to court

8.        Chevron v. Ecuador II Third Interim Award on Jurisdiction and Admissibility notes that the UNCITRAL Arbitration Rules do not contain an equivalent to ICSID Arbitration Rule 41(5) and under the former objections to admissibility are to be treated as issues relating to the merits phase of the proceedings

9.        SGS v. Paraguay Decision on Jurisdiction considers that it would be incongruous to find jurisdiction under the observance of obligations clause and then to dismiss the claim on admissibility grounds

10.     Reinhard Unglaube v. Costa Rica and Marion Unglaube v. Costa Rica Award highlights that objections on the ground of admissibility are different in nature from objections to jurisdiction; the distinction is between whether a tribunal may not properly rule or whether it should not

11.     Ambiente Ufficio v. Argentina Decision on Jurisdiction and Admissibility notes that the distinction between jurisdictional and admissibility issues suggest a different degree of “bindingness,” but that in the tribunal’s view,  if any of these requirements has not been met by claimants, the tribunal would have to dismiss the case irrespective of whether the requirement would qualify as one of jurisdiction or admissibility

12.     Urbaser v. Argentina Decision on Jurisdiction considers that the distinction drawn between jurisdiction and admissibility in Hochtief is an extremely delicate proposition as a matter of comparative law; developing such categories may have theoretical appeal but adds nothing to the interpretation of the provisions on dispute resolution of BITs

13.     Urbaser v. Argentina Decision on Jurisdiction questions the practical utility of the theoretical distinction between jurisdiction and admissibility and is critical of the Abaclat tribunal's analysis of the distinction

 Tribunals that appear to consider that admissibility plays a role in such cases (irrespective of whether they accept a plea of inadmissibility)

1.        SGS v. Philippines Decision of Jurisdiction finds that it is presented with a question of admissibility when a party seeks to rely on a contract as the basis of its BIT claim when the contract itself refers that claim exclusively to another forum

2.        SGS v. Philippines Declaration by Antonio Crivellaro holds that the case is fully admissible under the BIT

3.        SGS v. Philippines Order of the Tribunal on Further Proceedings subsequently notes that the tribunal previously held the claim to be inadmissible pro tem because there was (on any view) an unresolved dispute as to the amount payable under the contract between the parties

4.        Tokios Tokeles v. Ukraine Decision on Jurisdiction majority rejects a series of complaints about the way in which notice of the claim was given, observing that the ICSID Convention does not stipulate the form that written consent must take

5.        CMS Gas Transmission v. Argentina Award on Jurisdiction rejects an objection to admissibility based on the alleged variance between the dispute as originally notified and as submitted to arbitration

6.        Enron v. Argentina Award on Jurisdiction finds that acceptance of an objection to admissibility would normally result in rejection of the claim on the merits

7.        LG&E v. Argentina Decision on Jurisdiction notes that objections have been advanced on grounds of both jurisdiction and admissibility

8.        Sempra v. Argentina Decision on Objections to Jurisdiction cites Enron for the point that a finding of inadmissibility could lead to dismissal of the claim on the merits

9.        Jan de Nul v. Egypt Award considers that the requirement addressed in Article 26 of the ICSID Convention deals with the admissibility of the claims brought before an ICSID tribunal

10.     BG v. Argentina Award discusses the BIT requirement to submit a dispute to local courts as a question of admissibility of claims

11.     Rompetrol v. Romania Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility notes that the applicable ICSID arbitration rule contemplates not merely objections that a dispute is not within the jurisdiction of the Centre, but also any objection that the dispute is ‘for other reasons, not within the competence of the Tribunal’ and this appears to permit objections based on inadmissibility

12.     BIVAC v. Paraguay Decision on Jurisdiction notes that under Article 41(2) of the ICSID Convention the tribunal may decide to deal with any issue of jurisdiction or admissibility as 'a preliminary question' or by joinder to the merits of the dispute

13.     Burlington Resources v. Ecuador Decision on Jurisdiction holds that in ICSID arbitration the inadmissibility of claims has the same consequence as the failure to meet the requirements for jurisdiction under Article 25 of the ICSID Convention or the BIT, such consequence being that the tribunal cannot exercise jurisdiction over the dispute

14.     Alpha Projecktholding v. Ukraine Award adverts Rule 41(3) for the proposition that a tribunal may deal with "a jurisdictional or admissibility objection" as a preliminary question or join it to the merits of the dispute

15.     Société Générale v. Dominican Republic Preliminary Objections to Jurisdiction notes that the tribunal may dismiss a claim at the outset as a question of admissibility if it is abundantly clear that the claimant cannot prove the merits of such claim

16.     Abaclat v. Argentina Decision on Jurisdiction and Admissibility notes that the concept of jurisdiction under the Convention also covers issues which may usually be regarded as issues of "admissibility" (but observes that there are differences of view on this point)

 Tribunals that consider that admissibility does not play a role

1.        CMS Gas Transmission v. Argentina Award on Jurisdiction expresses doubt as to the distinction between admissibility and jurisdiction, which does not appear quite appropriate in the context of ICSID as the Convention deals only with jurisdiction and competence

 Tribunals adverting to the issue without deciding it

2.        Duke Energy v. Ecuador Decision on Jurisdiction finds that in light of its disposition of various objections, it need not and does not decide whether, in appropriate circumstances, as a matter of ICSID law and practice, preliminary objections based on the concept of “admissibility” could be sustained

 Effect of a declaration of inadmissibility

1.        SGS v. Philippines Decision of Jurisdiction observes that normally, a declaration that a claim which is within jurisdiction but inadmissible (e.g., on grounds of failure to exhaust local remedies) will be dismissed, although this will usually be without prejudice to the claimant's right to start new proceedings if the obstacle to admissibility has been removed (e.g., through exhaustion of local remedies); however, international tribunals have a certain flexibility in dealing with questions of competing forums

2.        Enron v. Argentina Award on Jurisdiction notes that acceptance of an objection to admissibility would normally result in rejection of the claim on the merits

3.        Camuzzi v. Argentina I Decision on Objections to Jurisdiction agrees with the Enron tribunal that acceptance of an objection to admissibility would normally result in rejection of the claim on the merits

4.        BIVAC v. Paraguay Decision on Jurisdiction discusses whether it should dismiss a claim as inadmissible or stay the exercise of jurisdiction

5.        Burlington Resources v. Ecuador Decision on Jurisdiction finds that the claimant failed to abide by the conditions for acceptance of the offer of ICSID arbitration contained in the BIT with respect to one of its claims and this claim is therefore inadmissible (and further that the tribunal lacks jurisdiction)

6.        Abaclat v. Argentina Decision on Jurisdiction and Admissibility holds that while a lack of jurisdiction stricto sensu means that the claim cannot at all be brought in front of the body called upon, a lack of admissibility means that the claim was neither fit nor mature for judicial treatment

  Findings in specific cases

1.        CME v. Czech Republic Partial Award rejects argument that claim is not admissible because of parallel treaty proceedings; any overlapping of the results of parallel processes must be dealt with on the level of loss and quantum, but not on the level of breach of treaty

2.        Occidental Exploration v. Ecuador Final Award finds that although a claim of expropriation should normally be considered in the context of the merits, since it is evident there was no expropriation in this case the tribunal will deal with the claim as a question of admissibility

3.        Italy v. Cuba Preliminary Award finds Cuba's claim of tribunal's lack of jurisdiction concerning certain enterprises is a matter of admissibility, not jurisdiction; the tribunal further holds the matters admissible

4.        Fraport v. Philippines Dissenting Opinion of Bernardo M. Cremades holds that in cases of gross illegality there may be reasons for the inadmissibility of a claim and that illegality may have consequences for jurisdiction

5.        Sempra v. Argentina Award finds that the investor's claim is not inadmissible where investment in which the investor is a shareholder enters into new licence agreement

6.        Al-Bahloul v. Tajikistan Final Award finds that a claim for future damages is inadmissble

7.        SAUR v. Argentina Decision on Jurisdiction and Liability finds that whether there is a treaty claim is a question for the merits and not an issue of admissibility