Specific features of the settlement of disputes among states within international economic organizations. Legal means of peaceful settlement of disputes

Author:Andrei Costin Grimberg
Position:PhD, Lawyer, Bucharest Bar
Pages:24-38
SUMMARY

The study is focused on a very important and sensitive matter - the one which concerns the disputes among states. The research begins with the definition of the international dispute in order to indicate the framework of the analysis and indicates the main characteristics of it. The study continues with a presentation of The Principle of Peaceful Resolution of International Disputes and points some specific features of the settlement of disputes among states arising within international economic organizations.

 
CONTENT
24 ANDREI COSTIN GRIMBERG
SPECIFIC FEATURES OF THE SETTLEMENT OF DISPUTES
AMONG STATES WITHIN INTERNATIONAL ECONOMIC
ORGANIZATIONS. LEGAL MEANS OF PEACEFUL
SETTLEMENT OF DISPUTES
Andrei Costin GRIMBERG
PhD, Lawyer, Bucharest Bar
Abstract:
The study is focused on a very important and sensitive matter – the one which concerns the
disputes among states. The research begins with the definition of the international dispute in order to
indicate the framework of the analysis and indicates the main characteristics of it. The study
continues with a presentation of The Principle of Peaceful Resolution of International Disputes and
points some specific features of the settlement of disputes among states arising within international
economic organizations.
Key words: disputes among states; peaceful resolution; international disputes; international
economic organizations.
1. Definition of Dispute
One particularly important issue in the analysis of international dispute
settlement is the very definition of the term “international dispute”.1
Among states, different political, legal, economic, military and other
misunderstandings and differences appear, but only some of them may, under
specified conditions, turn into conflicts.
An international dispute arises among states whenever in their relations to one
another certain opposing claims, interests and rights have crystallized with respect
to certain concrete issues.
In its broad meaning, the term “dispute” refers to complaints, litigations,
disagreements or conflicts between two subjects of international law. International
disputes may be legal or a political disputes:
a) legal disputes are the disputes where opposing legal claims arise among
states, dealing with interpretation of a treaty, a matter of international law, the
existence or not of an alleged violation of an international obligation, as well as
E-mail: avocatgrimberg@yahoo.com.
1 Société Française pour le Droit International, La reorganization mondiale des echanges (problemes
juridiques), Colloque de Nice, Paris: Ed. Pedone, 1996, p. 146-147.
Law Review vol. II, issue 2, Jul
y
-December 2015, p. 24-38
Specific features of the settlement of disputes among states… 25
with the establishment of the nature or extent of the damages due in case of
violation of international obligations
b) political disputes are the disputes where the parties' conflicting claims
cannot be legally formulated.
The object of an economic dispute is not defined identically by all the statutes
of the international economic organizations. Many texts define as the object of
disputes both the interpretation and the application of the statutes or other
instruments, while others, either one or the other.
It is worth pointing out also the fact that economic differences may arise not
only within international economic organizations, but also in connection with
activities carried out by organizations which are not necessarily economy-oriented.
It is the case, for example, of disputes arising in international air transport industry
governed by ICAO or in the course of the activities developed by the International
Atomic Energy Agency.
The existence of a dispute presupposes a certain degree of communication
between the parties.2 The matter must have been taken up with the other party,
which must have apposed the claimant’s position if only indirectly. Practice
demonstrates that the threshold required in terms of communication between
parties for the existence of a dispute to arise between the parties is fairly low. In
certain situations a dispute may exist even in the absence of active opposition by
one party to the claim of the other party.
It should be specified here that, if a party in a dispute acknowledges the other
party’s position, the mere admission of liability cannot be a valid defense in legal
proceedings and will not deprive the court of its jurisdiction. Under these
circumstances, the absence of an over disagreement between parties will not
negate the existence of the dispute as such. The failure of one party to respond to
the demands of the other party will not exclude the existence of a dispute. Silence
of a party in the face of legal arguments and claims for reparation by the other
party cannot be taken as expressing agreement and hence the absence of the
dispute.
Even where the existence of a dispute is admitted, its legal nature can still be
contested. Sometimes even the nature of the dispute as such was challenged by
arguing that the court lacked jurisdiction. The legal nature of disputes is sometimes
described in terms of factual situations and the consequences engendered by them
(e.g. use of force or expropriation). But fact patterns alone do not determine the
legal or non-legal character of a dispute.3 Rather, it is the type of claim that is
2 G. Hafner, The Physiognomy of Disputes and the Appropriate Means to Resolve Them, in United
Nations (ed.), “International Law as a Language for International Relations. Proceedings of the United
Nations Congress on Public International Law 559 (1995)”, p. 123; G. Hafner, Some Legal Aspects of
International Disputes, The Journal of International Law and Diplomacy 65 (2005), p. 104.
3 Maffezini v. Spain, Decision on Jurisdiction of 25 January 2000, 40 ILM 1129, paras. 93, 94 (2001);
Tokios Tokels v. Ukraine, Decision on Jurisdiction of 29 April 2004, paras. 106, 107; Lucchetti v. Peru, Award
26 ANDREI COSTIN GRIMBERG
put forward and the prescription that is invoked that decides whether a dispute is
legal or not.
Thus, it is largely the task of the claimant to present the dispute in legal terms.
The International Court of Justice looked unfavorably upon the argument that
disputes before it were of a political rather than legal nature and hence outside its
jurisdiction. It has stated repeatedly, both in contentious proceedings and in
proceedings leading to advisory opinions, that it will not abdicate its function
merely because a case before it has political implications.
In order to amount to a dispute that is capable of judicial settlement, the
disagreement between parties should have some practical relevance to their
relationship (the existence of a actual material damage is not a prerequisite) and
must not be purely theoretical. The international court does not have the exclusive
task to clarify legal questions in abstracto, but the dispute must relate to clearly
identified issues between the parties.
Usually, arguments attempting to deny the legal nature of the dispute and,
hence, the jurisdiction of the court, are hardly ever successful. Therefore, an
objection to jurisdiction based on denial of a dispute between the parties is not a
promising strategy.
2. The Principle of Peaceful Resolution of International Disputes
As a result of amplification of interstate relations, the development of the
international law has required the determination of some principles4 to govern
their international conduct. These sets of basic rule are used both in the ordering
and in the development and application of legal norms at international level. The
importance of these principles has increased in the contemporary era, and today
they constitute the guarantee of the free and independent existence of the states. 5
Any branch of law contains general principles as a result of the abstracting of
the fundamental elements of the legal norms which are part of it.
The rule – valid for the international law – has to be separated however from
the tendency to investigate international law as a field in itself, isolated from the
dynamic and contradictory reality of the international life.
of 7 February 2005, para. 48; Impregilo v. Pakistan, Decision on Jurisdiction of 22 April 2005, pa ras. 302, 303;
AES v. Argentina, Decision on Jurisdiction of 26 April 2005, para. 43; El Paso Energy Intl. Co. v. Argentina,
Decision on Jurisdiction of 27 April 2006, para. 61; Suez, Sociedad General de Aguas de Barcelona S.A., and
InterAguas Servicios Integrales del Agua S.A. v. A rgentina, Decision on Jurisdiction of 16 May 2006, para. 29;
M.C.I. v. Ecuador, Award of 31 July 2007, at para. 63.
4 E.U. Petersman, International Trade Law and the WTO Dispute Settlement System, Boston: Kluwer,
1996, pp. 121-139.
5 G. Apollis, Le règlement de l’affaire du Rainbow Warrior, Revue Générale du Droit International
Public, vol. 91, 1987, pp. 9-43.
Specific features of the settlement of disputes among states… 27
In international law,6 the principle has essentially a regulatory content. As
regards the nature of the principles of international law there have been many
controversies.7
Principles have been often challenged in terms of their own identity. In this
regard, it was considered that, when examined more closely, principles are either
customary rules of international law or conventional rules which are found, in
particular, in the Charter of the United Nations, or policy principles that are not
genuine principles of law but are a political doctrine.
As such, the principle – which has always ideological character – does not
innovate, but synthesizes a whole patrimony of legal solutions - accepted and
implemented over time, possibly serving as a prerequisite for a deductive
reasoning and allowing the formulation of new rules.
Examination usually deals not with the fundamental principles of
international law, but with “the general principles of law.” Some authors8 consider
that the “general principles of international law” are part of the general principles
of law, which cannot be mistaken for conventional rules or for customary rules.
Although principles show a high degree of generality and permanence, they
do not have an immutable content, but evolve with the dynamics of the
international relations and of the values they enshrine. Along its historical
development, the system of principles evolves in time to reflect these changes. The
rules in question make up a coherent system governing the whole matter of
inter-state relationships governed by the rules of law.
Principles – owing to the international values forming “their ontological core”–
reflect the dynamics of international relations9 while at the same time influencing it
by setting benchmarks for the conduct of states inter se.
The main functions10 of the principles of international law can be summarized
as follows:
a) constructive (stimulating) function – helps to develop, interpret and apply
the rules of international law;
b) evaluation (value) function – which serves to evaluate international
“matters” or rules;
c) orientation function – determines the reference background for the
unilateral, bilateral or multilateral actions of the states;
d) case law function, as a last resort in assessing some concrete provisions or in
examining matters that are not covered by provisions of the positive law.
6 H.G. Schermers, International Institutional Law, Vol. I, Liège: Sythoff, 1972, pp. 223-227.
7 J.G. Starke, Introduction to International Law, London: Butterworths, 1989, pp. 439-440.
8 D. Carreau, Droit international public, Paris: Dalloz, 1988, pp. 167-183.
9 D. Carreau, P. Juillard, Droit international economique, Paris: Librairie Générale de Droit et de
Jurisprudence, 1998, pp. 67-81.
10 N. Voiculescu, Drept şi instituii sociale internaionale, Bucureşti: Editura Pan-Publishing House,
1997, p. 27.
28 ANDREI COSTIN GRIMBERG
The system establishes connections for the mutual determination and influence
among the fundamental principles and the principles governing specific areas of
the international relations, such as, for example, those governing economic
relations.
The more abstract a principle, the more dependent its application on the
integration of that principle with other less abstract and less general principles and
with specific rules. Per a contrario, the less abstract a principle, the easier it will be
to apply it without resorting to regulatory elements.
In practice, there is an important connection between the system of principles
and the system of rules of international law, which is clearly reflected in the case of
institutions of international law – as the result of the merge between principles and
rules (see, for example, the less favoured nation status – as an expression of the
principle of non-discrimination).
Another key issue dealing with the principles of international law in general is
the possibility that a given principle – though not a fundamental one – could
nevertheless be common to several branches of the international law.11
The rule of seeking peaceful means of settlement of international disputes has
sprang from the international law, as a consequence of interdiction to threaten by
force and to use force in inter-state relations, since war was ruled out as a means of
settling international disputes.
The history of the relations among states has revealed instances of recourse to
peaceful means to settle conflicts, even since ancient times, and in the Middle Ages
states used to frequently resort to mediation, arbitration and conciliation
However, given that international law did not prohibit war, and as long as the
use of force was permitted, peaceful settlement could only manifest itself as a
subsidiary and sporadic means of resolution.
Prohibition of the war of aggression and the prohibition of force and threat of
force in inter-state relations were determinant factors in the recognition and
acceptance of the principle of peaceful settlement of international disputes.
Thus, while states have used since ancient times some sort of peaceful means
to resolve their disputes, before World War II there had been no principle or rule of
international law enshrined, obliging them to resolve disputes only by peaceful
means.
The principle of peaceful settlement of international disputes12 was enshrined
as a fundamental principle of international law only after World War II, in the
11 For example, the principles of reciprocity and non-discrimination are common at least to
international economic law, diplomatic law and air transport law. This is explained by the fact that the
branches of international law are not isolated and cannot operate or exist separately, beca use they are
governed by fundamental principles. On the other hand, some of the solutions adopted in a “newer”
branch may be inspired by the rules or principles found in another branch.
12 B. Yarbrough, R. Yarbrough, The World Economy: Trade and Finance, New York: The Dryden
Press, 1994, p. 463.
Specific features of the settlement of disputes among states… 29
Charter of the United Nations (hereinafter refereed to as The Charter), where
article 2 (3) says that “All Members shall settle their international disputes by
peaceful means in such a manner that international peace and security, and justice,
are not endangered”.
Chapter VI of the Charter regulates the means of peaceful settlement of
disputes, by providing (in art. 33) the obligation of the parties to any dispute
whose, the continuance of which is likely to endanger the maintenance of
international peace and security, to first of all seek a solution “by negotiation,
enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional
agencies or arrangements, or other peaceful means of their own choice.”. Articles
from 34 to 38 of the Charter lay down the powers of the General Assembly and of
the Security Council and procedures for bringing disputes to the attention of these
bodies.
Enshrined in the Charter, the principle was subsequently reaffirmed in many
international instruments – bilateral and multilateral treaties, statutes of
international organizations (universal and regional) final declarations or acts of
international organizations (among which an important place Final Act13 of the
CSCE) – with substantial clarifications and further developments made by the 1982
Declaration on the Peaceful Settlement of International Disputes, adopted as a
result of the initiative of Romania.
The year 1970 was a turning point for the enshrining of the principle of
peaceful settlement, following the adoption by the UN General Assembly of the
Declaration on Principles of International Law concerning Friendly Relations and
Cooperation among States in accordance with the Charter of the United Nations.
Speaking about “the principle that States shall settle their international disputes by
peaceful means in such a manner that international peace and security and justice
13 The organization has its roots in the 1973 Conference on Security and Cooperation in Europe
(CSCE). Negotiations had been mooted about a European security grouping since the 1950, but the
Cold War prevented any substantial progress until November 1972 at Helsinki. The recommendations
of the talks, in the form of “The Blue Book” gave the practical foundations for a three-stage conference
called the “Helsinki process”. The CSCE opened in Helsinki on 3 July 1973 with representatives from
35 states. Stage I only took five days to agree to follow the Blue Book. Stage II was the main working
phase and was conducted in Geneva from 18 September 1973 until 21 July 1975. The result of Stage II
was the Helsinki Final Act, which was signed by the 35 participating states during Stage III, which
took place at Helsinki from 30 July until 1 August 1975. The concepts of improving relations and
implementing the Helsinki Final Act were developed over a series of follow-up meetings held in
Belgrade (4 October 1977 - 8 March 1978), Madrid (11 November 1980 - 9 September 1983), and
Vienna (4 November 1986 - 19 January 1989). The collapse of the Iron Curtain required a change of
role for the CSCE. The Charter of Paris for a New Europe, signed on 21 November 1990 marked the
beginning of this change. On 1 January 1995, the CSCE was renamed to OSCE. On 19 November 1999,
in Istanbul, OSCE ended a two-day summit by calling for a political settlement in Chechnya and
adopting a Charter for European Security. After a group of thirteen Democratic United Nations
senators petitioned Secretary of State Colin Powell to have foreign election monitors oversee the 2004
presidential elections in the United States, President George W. Bush invited the OSCE to do so.
30 ANDREI COSTIN GRIMBERG
are not endangered”, the Declaration establishes that international disputes should
be resolved on the basis of sovereign equality of the States and in accordance with
the principle of free choice of means and that the recourse to or acceptance of a
settlement procedure freely agreed to by States with regard to existing or future
disputes to which they are parties should not be regarded as incompatible with
sovereign equality.
Another relevant provision in this line is that contained in the Charter of
Economic Rights and Duties of States,14 which, in Chapter I stipulates that
economic as well as political and other relations among States shall be governed,
inter alia, by the principle of peaceful settlement of international disputes.
There are many provisions on peaceful settlement of disputes contained in
bilateral or multilateral agreements. There are also general treaties that provide for
a specific type of dispute settlement, as for example the General Agreement on
Tariffs and Trade – GATT - and the Convention on the settlement of investment
disputes, adopted by BIRD in 196515.
An important step in the affirmation and the gradual evolution of the principle
of peaceful settlement of international disputes was the adoption on 15 November
1982 by the UN General Assembly of the Declaration on Peaceful Settlement of
International Disputes, with the issue still remaining in UN’s attention, in their
effort to improve the rules, mechanisms and the procedures of peaceful settlement
of disputes.
The 1982 Declaration – adopted on a proposal of Romania16 – expressly
provides, inter alia, the obligation of States that are party to a dispute to continue
to observe in their mutual relations their obligations under the fundamental
principles observe in their mutual relations their obligations under the
fundamental principles of international law concerning the sovereignty,
independence and territorial integrity of States, as well as other generally
recognized principles and rules, fact that highlights once again the organic and
permanent link between compliance with the principle of peaceful settlement and
with the other fundamental principles.
The Declaration calls upon States “to act in good faith […] with a view to
avoiding disputes among themselves” and “to live together in peace with one
another as good neighbours”, thus expanding the scope of the principle by adding
it a prevention dimension.
14 S. Page, M. Davenport, World Trade Reform, London: Overseas Development Institute, 1994,
p. 112.
15 J. Bacchus, Woulda, Coulda, Shoulda The Consolations of WTO Dispute Settlement; Address to the
International Bar Association, Geneva, 20 March 2003, accessed on 21.05.2012,
http://www.worldtradelaw.net/articles/bacchusconsolation.pdf.
16 Trade Policy Review (GATT): Romania - Specimen, 1992.
Specific features of the settlement of disputes among states… 31
Specialized literature17 defines as the main features of the principle of peaceful
settlement of disputes its binding nature for all states and its universality,18 with
the concrete ways of dispute settlement having a flexible nature, expressed by the
fact that, under this binding principle, the states, as sovereign entities with equal
rights, have the freedom to choose any means of peaceful settlement of their
disputes. Thus, the obligation relates only to the peaceful means, while the choice
of the actual means of settlement rests with the parties to the dispute, which may
resort to that means that reflects most closely their interests, or may substitute one
means with another that is considered to be most suitable to the actual state
of facts.
Peaceful settlement of international disputes largely depends on the good faith
of the states in dispute and their will to resort conciliation and mutual
compromise. In the absence of such will, antagonisms that underlie the dispute
remain irreconcilable.
The content of the principle of peaceful settlement is given by the universal
and permanent obligation to resort exclusively to peaceful settlement of all
international disputes and by the right of free choice of settlement means.
This general obligation is linked, in the text of the 1982 Declaration, to the duty
of states to avoid disputes among them, to live in peace and to strive for the
adoption of effective measures to strengthen international peace and security19.
The general obligation of peaceful settlement “materializes in practice in the
form of obligations of a more or less general nature and specific obligations
incumbent upon States (and, in particular, to states parties to the dispute) either
through the entire duration of the settlement procedure – including the judgment
on the merits – or in certain stages of the process, with the fulfillment of such
obligations being aimed at effective and full implementation of the principle of
peaceful settlement in international life.20
In turn, the right of free choice materializes in some of the rights of the states,
dealing on how to use settlement means so as to increase their efficiency.”
Peaceful settlement of international disputes is an ongoing process under
international law, in which States participate as sovereign entities with equal
rights.
States are required to use only peaceful means for resolving disputes among
them and their failure to do so by one such means attracting their obligation to
17 Al. Bolintineanu, A. Nstase, Drept internaional contemporan, Bucharest: Ed. Official Journal,
1995, pp. 34-40.
18 Meaning that they apply to any dispute, whatever its nature and stage.
19 Daniel-Mihail Şandru, Dreptul comerului internaional, Bucharest: Editura Universitar, 2012,
p. 43.
20 Peter Behrens, Alternative Methods of Dispute Settlement in International Economic Relations in
Ernst-Ulrich Petersmann and Gunther Jaenicke, “Adjudication of International Trade Dispute in
International and National Economic Law”, Fribourg U.P., 1992, p. 113.
32 ANDREI COSTIN GRIMBERG
seek a peaceful settlement through other means and to refrain from taking any
action that is likely to aggravate the dispute.
The free acceptance by the parties of the settlement means is crucial for the
resolution of the dispute, because the parties need to see settlement as a result of
their own will, regardless of the possible involvement of a third party.
In a sense, the free acceptance of the result is a test of the effectiveness of the
settlement per se. It is the guarantee that the parties can adjust their positions to the
settlement terms and conditions and is a proof of commitment to abide by the
solution chosen. Such a free acceptance is also the reflection of the spirit of
cooperation and of the willingness of the parties to act in concert, which is vital for
eliminating the causes of future conflict.
3. Specific features of the settlement of disputes among states arising within
international economic organizations
Dispute settlement mechanisms are usually provided for in the constitutive
documents of the international economic organizations.21 These mechanisms are
extremely diverse and sometimes very complex. They may vary according to
several factors, such as the nature of the dispute (disputes within the organization
among some Member States or among one or more Member States and the
organization itself) or the nature of the action brought in court (related to a matter
of interpretation of a text of law or a claim for damages).
Each organization has its own procedures for resolving any disputes that
might arise. The number of members may have an influence on the structure of the
organization and therefore on the settlement procedure22.
Thus, a global organization cannot achieve the same degree of cohesion as a
small organization where the interests of the members are more specific and more
unitary.
The nature of the settlement procedures and mechanisms reflects the specific
and the objectives of the organization, the fundamental options regarding the
structure of the organization, as well as certain political considerations.
The settlement of a dispute normally consists of several successive steps and
involves, in various stages, different bodies and very diverse and original
mechanisms.23
Dispute settlement is regarded as part of the current business of the
organization, which results in “internalization” of the settlement procedures. This
serves the interest of the organization to resolve itself the disputes that arising
internally.
21 Chad P. Bown, On the Economic Success of GATT/WTO Dispute Settlement, in “The Review of
Economics and Statistics”, vol. 86, nr. 3, pp. 811-823.
22 D. Carreau, P. Juillard, Droit international economique, Paris: Librairie Générale de Droit et de
Jurisprudence, 1998, pp. 67-81.
23 Claude E. Barfield, Dispute Settlement System in Need of Change in “Intereconomics – Review of
European Economic Policy”, vol. 37, nr. 3, 2002, pp. 131-134.
Specific features of the settlement of disputes among states… 33
On the other hand, multilateralisation of the dispute is contingent for the
procedures chosen, which should also consider the states that are indirectly
interested, in addition to the interests of the organization as such. Thus, in
international economic organizations the existence of a subjective interest is no
longer a prerequisite for the “notification of the court”.
The organization, by its nature and functions, is the most capable body to place
the dispute in the overall background of economic interests and the solution
deemed as the most appropriate to serve such interests: and the solution will often
consist of a compromise between a particular interest and the general interest of
the organization.
As shown in the specialized literature, settling disputes in international
economic organizations is not based on “legalistic” vision.24 Dispute settlement is
not concerned with knowing “who what has violated”, but rather with warranting
the ongoing spirit of cooperation of participants who have temporarily deviated
from observing the economic rules: “reluctant parties will be applied a
psychological pressure at first, followed by an economic one, before reaching the
actual sanctions that can include from withdrawal of economic benefits (financial
aid, for example), controlled sanctioning, suspension, to exclusion from the
organization.”
The main purpose of dispute settlement is not so much to determine liability,
damage (and impose compensation), but rather to establish the existence of present
or imminent negative effects and to restore functional balance of the interests
involved, without impairing the overall balance of the interests of the member
states to the agreement or harming the very existence of the organization.
Traditional dispute settlement procedures were characterized by procedural
elements that were time consuming and were therefore inadequate to resolve
issues dealing with the functioning of the international economic organizations
which, by their nature, required a quick settlement.25
These models also resorted to a much too formalistic approach both in terms of
procedure and in terms of examination of the rights and obligations of the states
involved, with legal considerations having preponderance over the practical ones.
The remedies offered by them were too rigid for the needs arising from the
articles of association of these organizations, operating by the win/lose paradigm
and ending up with a judgment in favor of or against the parties to the dispute.
This paradigm is replaced by a common approach to such issues not only by
the conflicting parties, but also by the body called upon to settle the dispute and by
the organization as a whole.
24 M.L. Busch, E. Reinhardt, Testing International Trade Law: Empirical Studies of GATT/WTO
Dispute Settlement in Daniel M. Kennedy, James D. Southwick (eds.), “The Political Economy of
International Trade Law: Essays in Honor of Robert Hudec”, NY and Cambridge: Cambridge
University Press, 2002, p. 32.
25 A. Nstase, Drept internaional economic: Soluionarea diferendelor în cadrul organizaiilor economice
internaionale, Vol. II, Bucureşti: Regia Autonom Monitorul Oficial, 1996, p. 78.
34 ANDREI COSTIN GRIMBERG
Considering that judicial proceedings are formal and inappropriate, there has
been an attempt to merge legal elements with political elements in settling
disputes.
Thus, without being completely neglected, the settlement by judicial
proceedings or by arbitration typically occurs as an alternative means, used mainly
by the court of appeal.
This way, the settlement procedures have become very diverse and original for
each organization,26 which are therefore very difficult to classify. The purpose
pursued is not always to ensure the enforcement the law as such, but to seek
means of restoring harmony within the organization.
This explains the importance gained by non-judicial settlement procedures,
given that the referral of the dispute to court proceedings would mean to burden
the dispute by political considerations and to hinder its settlement.27
The legal dimension of the dispute fades away and the conflict of interest
becomes crucial for seeking compromise and ensuring effective functioning of the
organization.
There is, on the other hand, a reluctance to trusting fully the capacity of the
“judicial bodies” to decide in disputes which are primarily of an economic nature.
On the other hand, assigning the dispute settlement duty to the political bodies
of the organization generates certain difficulties28, which are countered by
“jurisdictionalization” of their activity, manifested, on the one hand, in the
important role played by investigation and conciliation commissions (often
composed of lawyers), which advise the executive bodies, and by the remedies
made available to States in relation to decisions taken within the organization.
Non-judicial procedures within organizations are also intended to settle
differences before they become disputes.29 Thus, the control exerted within some
organizations in the form of annual reports provided by States and discussed by
their bodies help the States to comply with their obligations and at the same time
to tackle possible conflicts and avoid them.
The forum chosen for settlement of disputes is the organization itself, acting by
its general “governing” bodies or by specific bodies within the organization.
The most important feature is the merging between judicial and administrative
functions. Settlement function is performed mainly by the governing bodies.
The procedure is a combination of judicial and administrative elements, with
remedies having the same mixed character. We may say that this approach has
26 D. Popescu, The United Nations and Regional Organizations as Instruments of Conciliation, in RRSJ,
1975, pp. 233-256.
27 N. Sut, Comer internaional şi politici comerciale contemporane, Bucureşti: Ed. All, 1995,
p. 122-126.
28 Ch. Rousseau, Droit International Public, Paris: Dalloz, 1973, p. 233-235.
29 D. Popescu, Tr. Chebeleu, Soluionarea paşnic a diferendelor internaionale, Bucureşti: Editura
Academiei, 1983 , pp. 49-55.
Specific features of the settlement of disputes among states… 35
itself a mixed nature (political, economic, legal) and not an administrative/legal
one, because we cannot speak of a separation of powers within international
organizations.
In fact, this is yet another reason why we cannot acknowledge the existence of
a “legal” function (in the classical tradition of the legislative/executive/judicial
triad), but rather of a prevention and pacific settlement function, encompassing
political, economic and legal dimensions, even if the “arsenal” of the basic
procedures comes form the public international law.
Disputes are settled by two main categories of bodies.30
The first category is that of the bodies within the organization, whose normal
role is not to resolve differences, and which add this secondary role to their main
executive or deliberative one. The second category is that of the specialized
jurisdictional (arbitration or judicial) bodies.
In some international economic organizations, settlement of disputes is
entrusted either to a small management body – executive board or board of
directors – or to the general assembly, in various ways.
Some organizations provide for the simple intervention of a deliberative body,
which is entitled with final settlement of the dispute, while other organization
arrange that the executive body may intervene in the first stage of settlement, with
the second instance being in some cases the deliberative assembly of the
organization or, sometimes, a specialized arbitral or judicial body.
Granting jurisdiction to settle disputes to the representative bodies of an
organization gives a large choice of settlement procedures: from a procedure that is
placed somewhere between conciliation and arbitration (EFTA, GATT) to a quasi
judicial procedure,31 to those applicable to other administrative decisions. In all
these cases, a special role is played by consultations, which are integrated in a
natural way to jurisdictional proceedings, without the need of a special provision.
The representative body is able to consider not only the rights of the parties to
the dispute, but also the more general interests of the organization and to reach a
compromise through multilateral consultations.
Another advantage of the settlement of disputes by the representative bodies
of the organization is that, while in traditional models conflicting parties are
entitled only to a formal contact with the settlement body, in the new approach the
parties participate in all the stages of the proceedings, including in the
deliberations preceding the final decision.32
Moreover, factual circumstances are always considered, whether or not they
are formally relied on, and the concept of “the burden of proof” has a limited
impact on the settlement procedure. Participation of these bodies in dispute
30 C.A.Colliard, Le reglèment des differends dans les organizations intergouvernementales de caractère
non politique, in “Melanges Basdevant”, Paris: Pedone, 1960, pp. 152-182.
31 ICAO Regulation on Dispute Settlement, 16 April 1957, Doc. 7782 C/898.
32 N.I. Ionescu, Organizaii şi instituii internaionale, Bucureşti: Ed. Sylvis, 2000, pp. 78-90.
36 ANDREI COSTIN GRIMBERG
settlement is one of the most original features of the settlement of disputes by
international economic organizations.
This type of settlement of disputes departs to some extent from the
“neutrality” required by the impartial administration of law, but this is rather a
potential and a theoretical inconvenient than a real one.
In addition to the non-specialized (plenary or restricted) bodies from within
international economic organizations, there are also some specialized – judicial or
non-judicial bodies (the latter having an advisory role for the plenary or restricted
managing bodies of the organization). In almost all international economic
organizations, alongside the plenary or restricted bodies in charge with settlement
of disputes, there are specialized bodies, more or less institutionalized, which play
a very important role in the settlement proceedings.
These specialized bodies (committees) are composed of independent experts
chosen on the basis of their professional merits. But committee members are
usually appointed by the organization's plenary or restricted managing bodies,
and their main role is to try to reconcile the parties and, at the same time, to
provide a reasoned report to the decision body, containing proposals for resolving
the dispute. The opinions of these specialized bodies are a preliminary step in the
settlement procedure.33
If the parties fail to reach an agreement in the consultation and, possibly, in the
conciliation phase, the matter is referred back to the plenary or restricted body,
which has to decide, based on the report prepared by the specialized body (panel
etc.) – a report which is not mandatory – whether to make recommendations
(basically non-binding) or apply penalties.
The means of settlement and the bodies involved may also be examined in
relation to the type of economic organization concerned.34
For example, if we deal with an organization that is strictly oriented on
economic cooperation, where the constitutive acts of the organization are not
directly applicable in national legal order of the member states, disputes are settled
by a supple procedure, based mostly on negotiations, consultations, counseling
and, possibly, arbitration.
In such situations, consideration is given also to commercial disputes among
legal entities belonging to the member states and arising in connection with
enforcement of the documents of the organization, disputes which are settled by
specific foreign trade arbitration proceedings.
In the case of economic integration organizations,35 where constitutive
documents are directly applicable and the integrator purpose varies from a free
trade area to a common market or an economic union, the dispute settlement
mechanism envisages not only the mutual agreement procedure conducted with
33 G. Moca, Dreptul organizaiilor internaionale, Bucureşti: Ed. Era, 2000, p. 43.
34 T.P. Stewart, The World Trade Organization: the Multilateral Trade Framework for the 21st Century
and US Implementing Legislation, Washington DC: American Bar Association, 1996, p. 88-90.
G. Chivu, M. Niciu, Organizaii internaionale guvernamentale, Cluj: Ed. Argonaut, 1998, p. 67.
Specific features of the settlement of disputes among states… 37
the participation of the plenary or restricted body, but especially the judicial
procedure conducted before a special body - court of law or arbitral tribunal.
The tendency to turn the settlement of disputes into exclusively an internal
procedure of the international economic organizations is backed up also by the
powers often granted to such organizations to self-interpret their own constitutive
acts.36
By operating within their internal framework, these bodies are not by their
composition, roles and procedures judicial bodies, but yet they have the power to
settle finally interpretation disputes, thus accomplishing a function that otherwise,
by its traditional nature, judicial in essence. Disputes regarding the interpretation
of articles of incorporation or regulations adopted by the organization may occur
within or among its bodies, between the organization and its members or its
officers or among its members and its officers inter se.37
4. Conclusion
Application of rules always implies interpretation. As such, member states and
the organizational bodies to which most of the rules are applicable have the power
to interpret their rights and obligations. As long as their interpretations remain
unchallenged, organization members will continue to interpret their obligations in
the way they think they should be interpreted and organizational bodies will
continue to exercise their powers the way they think they are entitled to exercise
them.
Yet sometimes, the interpretation is nevertheless challenged, thus generating a
dispute.
In practice however many questions of interpretation are, in fact, disputes over
the interpretation of a rule by the one applying it. For this reason, it is difficult to
separate a matter of interpretation from an actual dispute which is often rooted in
matters dealing with interpretation.
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