Moderator: Francis McGovern, Duke University School of Law
Speakers: Joan Donoghue, International Court of Justice; Timothy J. Feighery, Foreign Claims Settlement Commission of the United States; and Royce C. Lamberth, United States District Court for the District of Columbia
Introduction by Francis McGovern
Three Parts to Claims between States
1. State A <-> State B
2. Normalization of Relations
3. Settlement of Claims
Complexities: National Legislatures, Claimants, Domestic Courts, Conflicts of Laws, Treaties, Other States, International Courts and Commissions
Question: How did we achieve finality in normalizing relations between States and settlement of claims there-between in light of these complexities?
Answer by Tim Feighery: Three-step process: first, is there a national involved? Second, was there an internationally wrongful act? Third, was there exhaustion of local remedies? References the Diallo case (Guinea v. DRC). Once these three factors are met, then settlement negotiations can begin. Generally, settlement negotiations end in an agreement on a lump sum. After that agreement is reached, the question of how compensation will be paid remains. Because in diplomatic protection cases the claim belongs to the State, and not to the national over whom the State asserts diplomatic protection, the State may disperse the funds as it sees fit. In the US, the Legislature generally establishes claims commissions to handle these matters.
Question: What about the rest of the world?
Answer by Her Excellency Joan Donoghue: In addition to diplomatic protection cases before the ICJ, claimants may seek redress before the regional human rights courts (ECtHR, ACtHPR, IACHR, etc.). Also, if a bilateral investment treaty (BIT) is in place, claimants may seek dispute resolution through arbitral tribunals such as ICSID.
Question: What about other courts?
Answer by Judge Lamberth: Discusses a case involving a claim brought under the Foreign Sovereign Immunities Act against Iran, which engaged in actions that injured a US national. Iran failed to appear before the Court; therefore, the Court had to determine whether to enter a default judgment against Iran. A foreign State is treated as the United States, which means a default judgment may be entered against it. In any event, the Judge heard evidence from a Mossad agent, inter alia, in reaching its decision.
Question: Was there any reluctance on the part of the ICJ in the recent Germany v. Italy case?
Answer by Her Excellency Joan Donoghue: This case will not answer whether the FSIA is in compliance with international law. The nature of the case involved claims of Italian nationals against Germany for injuries resulting from Nazi atrocities during WWII. There was no treaty between Germany and Italy; therefore, the Court had to look to customary international law. The Court went through an extensive analysis of State practice and opinio juris. Italy proffered two arguments vis-a-vis the existence of jurisdiction: first, there was a territorial tort exception in the law of armed conflict which allowed for assertion of jurisdiction in the case; and second, given the nature of the actions precipitating the injuries – i.e. war crimes, crimes against humanity, genocide, etc. – jurisdiction was proper. The Court rejected both arguments and held that jurisdiction was lacking based on customary international law.
Question: What about Iraq’s participation in the United Nations Claims Commission?
Answer by Tim Feighery: Interestingly enough, in the last few weeks, we have seen a number of settlements in the UNCC for claims arising out of the First Gulf War.
Question: What is the best mechanism for the allocation of funds?
Answer by Her Excellency Joan Donoghue: “Best” by whose measure? It depends on the goals and objectives the government has in mind. For the payor State, the State cares very little on how the funds are allocated once a settlement is reached, because the responsibility shifts to the payee State to make such determinations. For the payee State, the State has to determine who falls within the class and who falls without. After making this determination, then the State allocates the funds as it sees fit.
Addition by Judge Lambert: In the US, the Court looks to the US Restatement of Torts to determine how the funds should be distributed (i.e. the nature of the injury, pain and suffering, etc.).
Question: Going back to Iraq, can you talk more about the finality of claims?
Answer by Her Excellency Joan Donoghue: During negotiations, it was essential that the US government agreed to extinguish all claims once the settlement had been reached. Oftentimes, this necessary concession becomes politically problematic when Congress gets involved.
Addition by Judge Lamberth: Under the statute, the President waived all claims – including pending claims – in reaching the settlement. The DC Circuit held that the US government could not do that under the FSIA; the Supreme Court reversed the DC Circuit, holding that the waiver was valid and that all claims had been extinguished. Since this decision, the FSIA has been amended several times, most recently in 2010. Despite these amendments, if there are any claims brought as a result of the Libyan conflict, the Judge believes that, if the President and Congress decide to waive all claims in exchange for a settlement, they likely have the constitutional power to do so.
Question: What about Russia?
Answer by Judge Lamberth: In this case, which involved Nazi-seized art that ended up in the hands of the Soviet (now Russian) government, the Court entered a default judgment against Russia pursuant to the FSIA.
Question: Can you talk about expectations? In particular, when large awards are granted in domestic courts?
Answer by Tim Feighery: Claimants actually have greater expectations in private dispute resolution mechanisms (i.e. international arbitral tribunals) than through their own governments. Those expectations nevertheless exist in State-driven dispute resolution mechanisms, such as in the FCSC, which make it may make it difficult to reach an agreement.
Addition by Judge Lamberth: With that said, as a result of actions taken by the US against Iran, several claimants in His Honor’s court will likely become quite wealthy.
Question 1: The last time the ICJ assessed actual damages was 1949. Since then, the ICJ has asked the parties to reach agreements on damages outside of the Court, which often fail. Do you think this is effective? Doesn’t this just delay the proceedings?
Answer: There are many reasons for the practice you discussed, not the least of which is the peaceful settlement of disputes. As a result, the ICJ has adopted the policy of encouraging the parties to reach a peaceful settlement on their own before the ICJ will award specific damages. In the Diallo case, the parties failed to reach such an agreement. As a result, the ICJ is currently considering the damages issue in that case.