Chapter 4: International Perspectives

Sources of International Law:

- Rules that have been generally accepted by the international community
- International treaties, conventions, etc.
- Sources of international law found in Article 38 of the Statute of International Court of Justice

United States and International Law

- US Constitution grants most of the power over international relations to fed gov
1. Commerce Clause specifically grants Congress the power to “regulate commerce with foreign
nations”
2. Article II section 2 grants the president “the power, by and with the advice and consent of the
Senate to make treaties, provide ⅔ of the senators present concur”
3. Supremacy Clause accords treaties the status of “law of the land”
a. The Supreme Court underscored this view in Missouri v Holland holding that a treaty
takes precedence over a conflicting state law.

The Paquete Habana; The Lola (1900) : an early glimpse into the US perspective on the incorporation
of principles of international law into broader development of American law

The issue was whether the capture and condemnation of 2 Spanish-owned fishing vessels during the
Spanish-American War were lawful under international law.
- The Supreme Court unanimously ruled that the capture and condemnation were not lawful and
ordered the vessels to be returned to their owners.
- The decision emphasized the importance of adhering to international law
- Respecting private property rights
- And the absence of clear justification for the confiscation of the vessels in this case,

International Systems
Comparative Law
- Comparative Law Examines the similarities and differences between national legal systems
- International law governs relationships between or among nations (public international law) or
governs the conduct of certain actors in the international business environment (private
international) like taxation and contracts.
- comparative law is the study of the legal systems of different nations

Civil Law Systems

- Found their origins in Roman law and were strongly influenced by the French and German civil
code
- Civil codes were the collected legal principles of those nations
- Have a positive view of the protection of private property, individual rights, and freedom
of contract
- Civil law generally included areas of private law, typically encompassing tort, property, and
contract law.
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- Legislatures play a central role as they are responsible for creating the law.
- Courts interpret the law but do not create new laws, unlike in common-law systems.

Common Law
- Case law, precedents are binding
- Main source of the law: case law more than legislation

Civil Law:
- A codified (systematic) set of laws
- Judicial precedents are not binding
- Statutes and other subsidiary legislations are the main sources
- Main source of law: constitution

Socialist Law Systems

- Subset of civil law

- Socialist law is characterized by the state's control over factors of production like land, labor,
capital, and entrepreneurial ability, which differs from the property ownership, individual rights,
and governmental limits found in broader civil law or common law societies.
- Finds underpinnings in the political and economic philosophy of socialism
- The economic system in which the factors of production (land, labor, capital,
entrepreneurial ability) are owned or tightly controlled by the state.
- The unique position of China in dealing with the integration of the common law system from
Hong Kong into its civil law system, which still retains aspects of socialist law. Reflects the
complexity of adapting different legal systems in a changing political and economic landscape.

Islamic Law Systems

- Also known as Sharia, which is based on the Quran, the Sunna (teachings of the Prophet
Mohammed), Islamic scholars’ writings, and the consensus within the Muslim legal community
- Sharia is a significant law sours in the Middle East, North Africa, and parts of Southern
Asia
- Religious figures under this system hold considerable sway in legal and social matters
- A major challenge faced with this is the conservative perspective that the law, as interpreted by
scholars in the 10th century, does not require further interpretation or adaptation, despite changes
in commerce and society since then
- Can complicate the integration of Sharia with contemporary commercial needs
- Significantly affects business structures and financial transactions, such as the prohibition
of interest in loan agreements

Principles of International Law Impacting on the Commercial Environment

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Sovereign Immunity

- Traditionally allows states to avoid being sued in the courts of foreign nations out of respect for
their sovereignty.
- In 1976, the US made a significant adjustment to this doctrine with the passage of the Foreign
Sovereign Immunities Act (FSIA)
- Limited the absolute nature of sovereign immunity.
- According to FSIA, foreign govs could now be sued for actions taken as part of
commercial activities, thus narrowing the scope of their immunity in the US legal
context.
The case of schooner exchange is noted as an important historical reference that provided insight into the
application of sovereign immunity principles by the U.S. Supreme Court during its early years.

The Schooner Exchange V M’Faddoon, et al 1812- Sovereign immunity

Began when two Maryland citizens took legal action to reclaim a vessel that had been seized under the
authority of Napoleon, the French emperor, and were initially denied.
Escalated through the US legal system, resulting in the circuit ordering the vessel to be returned to
Maryland citizens.

Overview of the case details that the vessel, seized by the French emperor, sailed into an American port,
leading the original owners to file a libel action to reclaim it.
- District court originally denied the claim due to lack of jurisdiction, but on appeal, the appellate
court reversed this decision

The Supreme court found that the vessel was a national armed vessel in the service of france.
- Court recognized that since the US was at peace with France and had allowed the vessel into its
ports as a friendly power, it was implied the vessel was exempt from US jurisdiction and thus
enjoyed sovereign immunity.

The supreme court reversed the decision of the circuit court and affirmed the district courts order, which
had dismissed the libel, upholding the principle of sovereign immunity for the foreign vessel

Act of State Doctrine

Asserts that a nation’s sovereignty allows it to act within its own borders without interference from
foreign courts.
- Principle holds that the courts of one country cannot question the validity or propriety of another
government's actions within its own territory.
Particularly relevant in cases involving the seizure of property by a state through expropriation,
confiscation, or nationalization, whether or not compensation is provided.
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Kirkpatrick examples of state doctrine and how its applied in contemporary legal situations

W.S. Kirkpatrick & Co. Inc., Et Al- 1990

Revolves around a lawsuit initiated by the respondent, an unsuccessful bidder for a Nigerian contract,
against the petitioners, who were awarded the contract.
- Respondent alleged that the contract was obtained through bribery.
- The district court originally dismissed the action based on the act of state doctrine, but this
decision was later reversed by the court of appeals for the third circuit.

Overview explains that the petitioners sought a construction contract in Nigeria and paid bribes to entities
associated with a Nigerian citizen to secure the contract. When the respondent learned about the bribe,
they brought the issue to the attention of both the Nigerian and US governments, leading to charges
against the petitioners, who then pleaded guilty.

When respondent filed a civil action seeking damages under the Racketeer Influenced and Corrupt
Organizations Act and other statutes, the petitioner moved to dismiss the complaint, invoking the act-of-
state doctrine. The motion was initially granted, but upon appeal, the appellate court held that the act-of-
state doctrine did not apply because the case did not involve the validity of any actions by a foreign
sovereign.

Outcome: Supreme court affirmed the appellate court’s decision that the act of state doctrine did not
apply to the case because it did not concern the validity of a foreign sovereign act, hence allowing the
civil action to proceed.

International Economic and Political Organizations

Intergovernmental Organizations (IGOs)

- Sponsored by two or more nation-states and are dedicated to coordinating activities of mutual
interest.
- These organizations are becoming key for states to collaborate on complex international issues
- United nations is cited as the most well-known and significant example of an IGO

Nongovernmental Organizations (NGOs)

- Can be non profit such as the international red cross, amnesty international
- Serve private national groups and engage in international relations
- Are also for profits NGOs like multinational enterprises (MNEs) or multinational corporations
(MNCs) operating in multiple countries
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United Nations
- Intergovernmental organization that maintains international peace and security
- Established in 1945 and is considered to be an initiative of President Franklin Roosevelt.
- Charter of the United Nations was agreed upon by its founding member states and outlines the
organization's main objectives:
- Maintaining international peace and security, Fostering economic and social cooperation,
and promoting human rights.
- Treats all member states as sovereign and equal members within the organization.

Main organs of the UN include the General Assembly, the Security Council, the Secretariat, the
international Court of justice, the trusteeship council, and the economic and social council (ECOSOC)

General Assembly

A quasi-legislative body (has powers and functions resembling those of a legislative body like congress,
but it is not a true legislature in the strict sense of the term) consisting of representatives from all member
states. As the main deliberative organ of the UN, its roles include:
- Making recommendations for international cooperation to maintain peace and security, including
disarmament and arms regulation
- Discussing questions related to international peace and security, and making recommendations
unless the issue is currently being debated by the Security council
- Etc.

Secretary-General

- Referred to as the”chief administrative officer” of the UN and has various functions assigned by
the Security Council, general assembly, economic and social council, and other UN organs.
- The UN charter grants the secretary-general the authority to alert the security council about any
issues that may jeopardize international peace and security
- Additionally, it embodies the moral authority of the UN

Security Council

- Made up of 15 member states, including five permanent members with veto power: the US,
France, UK, Russia and china.
- Primary responsibilities are maintaining international peace and security. Functions include:
- Maintaining international peace and security in line with the UNs principles
- Investigating disputes or situations that may lead to international friction
- Recommending methods for dispute resolution or terms of settlement
- Creating plans to establish systems for regulating armaments
- Etc.
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Secretariat

- The administrative arm of the UN. The Secretary General, elected by the General Assembly, is
the leader of the Secretariat
- Duties carried out by the secretariat include:
- Administering peacekeeping operations and mediating international disputes
- Surveying economic and social trends and problems
- Preparing studies on human rights and sustainable development
- Inform the worlds communications media about the work of the UN
- Interpreting speeches and translate documents into the organizations official languages

International Court of Justice

- Established in 1945 as the primary judicial branch of the UN located in The Hague, Netherlands
- ICJs role is to adjudicate (make a formal judgment or decision regarding a problem or disputed
matter) disputes between states according to international law; individuals cannot be parties to
cases before the ICJ
- Also provided advisory opinions on legal questions referred to it by authorized
international organs and specialized agencies of the UN
- The only entities that can request advisory opinions are the five main organs if
the UN and 16 specialized agencies within the UN system

International Monetary Fund

- The IMF is an organization with 189 member countries focused on global monetary cooperation,
financial stability, and economic growth. Its main function are:
- Provide platform for discussing monetary issues
- Support balanced international trade and economic expansion
- Ensure stable exchange rates and discourage competitive devaluation
- Facilitate a multilateral payment system
- Offer temporary financial support to countries with payment imbalances
- The IMF conducts economic surveillance, offers financial aid to countries with balance of
payments issues, and provides technical assistance to develop economic and financial policies

World Bank

- Often known as the International Bank for Reconstruction and Development (IBRD) and the
international Development Association (IDA), is part of the world bank group, which includes
five institutions
- Supports economic development in member countries by providing financial resources for
development projects
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- As of july 2016, the World Bank's membership includes 189 UN member states, and it has
financed 11,690 projects since 1947.

World Trade Organization

- WTO, founded in 1995 based in Geneva, Switzerland

- A global entity managing trade rules between nations. Has 162 members and provides a structure
for trade agreements and negotiations, settles disputes, reviews trade policies, and assists with
trade issues, especially in developing countries.
- WTO also cooperates with other international organizations and has a detailed dispute resolution
process. Succeeded the General Agreement on tariffs and trade (GATT) and addresses a wide
range of trade related issues.
Ethical Considerations

Bhopal

- Bhopal disaster: suggests researching the bhopal gas tragedy to understand why union carbide
preferred the case to be tried in India and why the Indian government wanted it to be heard in the
US. It raises a question about which party had a stronger ethical argument.

Final Payment

- Describes a contractual dispute where the Indonesian government contracted Kelly Corporation
from Jersey to supply building materials for an airport in Jakarta and failed to make the final
payment of 1.8 million
- When the Kelly corporation sued for the owed amount, Indonesia invoked the doctrine of
sovereign immunity as a defense. The text poses questions about the appropriateness of
dismissing the lawsuit based on sovereign immunity and when a country can invoke this doctrine.

Questions:
1. The establishment of the WTO has led to controversy and concern across the world. What are the
broader implications for the development of global trading systems under the WTO?
2. Describe the sources of international law
3. The US constitution grants most of the power for the conduct of international relations to the
federal government. What are the specific areas of constitutional authority that address the issue?
4. What is the significance of the doctrine of sovereign immunity?
5. What is the impact of the Foreign Sovereign Immunities Act on the doctrine of sovereign
immunity?
6. What is the difference between NGOs and IGO?
7. What is the source of the authority of the United Nations? Discuss.
8. Explain the Act of State Doctrine and the ruling in the Kirkpatrick case.
9. What is the significance and purpose of the World Bank?
10. How did the Court deal with the issue of sovereign immunity Schooner Exchange?
11. What did the court rule in the Paquete Habana case?
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12. Does membership in international political and economic organizations compromise the
sovereignty of the United States?