Published online by Cambridge University Press: 22 November 2010
The article revisits the Barcelona Traction judgment of the International Court of Justice, rendered forty years ago. It evaluates the lasting influence of the Court's pronouncements on the nationality of corporations and on obligations erga omnes, and uses the case to illustrate the Court's role as an influential agent of legal development. In this respect, it identifies a number of factors that can help to explain under which circumstances judicial pronouncements are likely to shape the law.
1 Case Concerning the Barcelona Traction, Light and Power Co. Ltd (New Application: 1962) (Belgium v. Spain) (Second Phase),  ICJ Rep. 3 (hereafter Barcelona Traction).
2 For a summary of the case history see ibid., at 6, paras. 1–3; S. Wittich, ‘Barcelona Traction Case’, in R. Wolfrum (ed.), Max Planck Encyclopedia of Public International Law (2007), paras. 4–5.
3 See the estimates put forward by M. Ragazzi, The Concept of International Obligations Erga Omnes (1997), 10, at n. 44; and J. Sette-Camara, ‘Behind the World Bench’, in International Law – Liber Amicorum Eduardo Jiménez de Aréchaga (1994), 1069, at 1071.
4 See, e.g., D. Guggenheim, ‘Le droit et le titre en matière d'actions et l'affaire de la Barcelona Traction’, (1971) 67 Schweizerische Juristen-Zeitung 71; Wengler, W., ‘Die Aktivlegitimation zum völkerrechtlichen Schutz von Vermögensanlagen juristischer Personen im Ausland’, (1970) 34 Neue Juristische Wochenschrift 1473Google Scholar. See also J. Brook's long feature essay ‘Annals of Finance: Privateer’, an eminently readable account of the Barcelona Traction's history and a gripping account of the life of Juan March, the Spanish entrepreneur profiting from the hostile takeover (New Yorker, 21 May 1979, 42, and 28 May 1979, 42).
5 H. Lauterpacht, The Development of International Law by the International Court (1958), 21. Of course, one can always claim that each application of law, each judgment, is also ‘either a step forward or a step backward in the development of the law’, as does Lachs, M., ‘Some Reflections on the Contribution of the International Court of Justice to the Development of International Law’, (1983) 10 Syracuse Journal of International Law and Commerce 239, at 241Google Scholar. How to determine whether the step is a big or a small one, and what counts as ‘forward’ and ‘backward’, remains a singularly difficult endeavour; see A. Pellet, ‘Article 38’, in A. Zimmermann et al. (eds.), The Statute of the International Court of Justice – A Commentary (2006), 677, at 789 (mn. 316 in fine).
6 The subsequent considerations focus on the Court's contentious jurisdiction. Whether the Court has greater leeway to develop international law through its advisory function is a separate matter, addressed, e.g., by Lachs, supra note 5, at 246–62; and J. A. Frowein and K. Oellers-Frahm, ‘Article 65’, in Zimmermann et al., supra note 5, 1420 (mn. 316).
7 See, e.g., Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion),  ICJ Rep. 226 (hereafter Nuclear Weapons), at 237, para. 18; Interpretation of Peace Treaties (Second Phase),  ICJ Rep. 221, at 244 (Judge Read, Dissenting Opinion); C. G. Weeramantry, ‘The Function of the International Court of Justice in the Development of International Law’, (1997) 10 LJIL 309, at 311.
8 The most prominent example in point is Art. 3(2) of the WTO Dispute Settlement Understanding, pursuant to which ‘[r]ecommendations and rulings of the [WTO Dispute Settlement Body] cannot add to or diminish the rights and obligations provided in the covered agreements’. Within the context of international criminal law, the reliance on ‘elements of crime’ (agreed between states, and intended to ‘assist the Court in the interpretation and application’ of the law (Art. 9)) presents a variant on the same theme.
9 Continental Shelf (Tunisia/Libyan Arab Jamahiriya) (Merits),  ICJ Rep. 143, at 152 (Judge Gros, Dissenting Opinion).
10 ICJ Statute, Art. 59.
13 Lauterpacht, supra note 5, at 9–20; M. Mendelson, ‘The International Court of Justice and the Sources of International Law’, in V. Lowe and M. Fitzmaurice (eds.), Fifty Years of the International Court of Justice – Essays in Honour of Sir Robert Jennings (1996), 63, at 81; R. Bernhardt, ‘Article 59’, in Zimmermann et al., supra note 5, 1231, at 1244 (mn. 46).
16 Obvious examples include the question of reservations to treaties (see Vienna Convention on the Law of Treaties (VCLT), Arts. 19–20) or questions dealt with in Articles on the Responsibility of States for Internationally Wrongful Acts (2001) UN Doc. A/56/10 (ASR), such as that of attribution of conduct of individuals to states (Art. 8) and proportionality as a limit to countermeasures (Art. 51).
17 GA Res. 171 (II) of 1947. See also GA Res. 3232 (XXIX) of 1974.
19 Aegean Sea Continental Shelf (Greece v. Turkey) (Jurisdiction),  ICJ Rep. 3, at 16–17, para. 39, with respect to the Court's potential pronouncement as to the status of a multilateral treaty.
20 See, e.g., the dissenting opinion of Judge Álvarez in Competence of the General Assembly (Advisory Opinion),  ICJ Rep. 4, at 13. See generally on Judge Álvarez's position on the lawmaking power of the International Court K. Zobel, ‘Judge Alejandro Álvarez at the International Court of Justice (1946–1955): His Theory of a “New International Law” and Judicial Lawmaking’, (2006) 19 LJIL 1017–40.
24 R. Jennings and A. Watts (eds.), Oppenheim's International Law, vol. 1 (1992), 41; Boyle and Chinkin, supra note 12, at 268.
25 For details on the techniques used by international courts to influence the law see Lauterpacht, supra note 5, at 156–7; Ch. de Visscher, Theory and Reality in Public International Law, trans. P. E. Corbett (1968), 393–403; and, in more detail, Weeramantry, supra note 7, at 313–20. According to the latter (at 320) the compounding of decisions applying general rules to specific facts unavoidably leads to further elaboration and development of the law, even if only on a ‘micro scale’. Cf. H. Kelsen, Reine Rechtslehre (1960), 242 ff., who speaks of the ‘constitutive character of judicial decisions’ in general.
26 De Visscher, supra note 25, at 391. For considerations on the ‘limits of lawmaking’ see also D. Terris, C. Romano, and L. Swigart, The International Judge: An Introduction to the Men and Women Who Decide the World's Cases (2007), 127–30.
27 This is the most generous calculation, based on the number of cases inscribed on the Court's General List (146 as at May 2010), including those quickly dropped. For full details see http://www.icj-cij.org/docket/index.php?p1=3&p2=2. It should be noted that even Charles de Visscher, who otherwise stressed the importance of judicial law-making, remarked that ‘[d]oubtless long years must still pass and many more judgments be rendered before the Court's decisions can be synthesized in a systematic body of principles or rules’ (supra note 25, at 403). See further Boyle and Chinkin, supra note 12, at 269.
29 The reversal, in Art. 1 of the 1952 Brussels Collision Convention and Art. 11 of the 1958 High Seas Convention, of the Lotus ruling on the exercise of national criminal jurisdiction over persons responsible for collisions on the high seas may be the most prominent example in point. For brief comment see A. von Bogdandy and M. Rau, ‘Lotus, The’, in Wolfrum, supra note 2, at para. 20.
30 Cf. Lauterpacht, supra note 5, at 5: international tribunals as ‘agencies for the development of international law’.
32 In addition to the ‘rules of thumb’ addressed in the text, it is worth mentioning that some commentators (e.g. G. Schwarzenberger, International Law as Applied by International Courts and Tribunals, vol. 1 (1957), 31) place emphasis on the margin by which a decision has been reached: hence a pronouncement that has gained the unanimous or near-unanimous support of the bench is said to be more influential than one that divided the Court.
34 See, e.g., R. Y. Jennings, ‘The Judiciary, National and International, and the Development of International Law’, (1996) 45 ICLQ 1, at 6 ff.; M. Shahabuddeen, Precedent in the World Court (1996), 152–64; L. Condorelli, ‘L'autorité de la décision des juridictions internationales permanentes’, in La juridiction internationale permanente. Colloque de Lyon (1987), 277, at 308.
35 C. F. Amerasinghe, State Responsibility for Injuries to Aliens (1967), 33.
37 Shahabuddeen, supra note 34, at 233 (citing Lord Devlin, ‘The Study of the Law’, (1938) 54 LQR 186).
39 See Certain German Interests in Polish Upper Silesia  PCIJ Ser A No 7 at 19: ‘from the standpoint of International Law . . . municipal laws are merely facts . . . which constitute the activities of States, in the same manner as do legal decisions or administrative measures’.
45 For a near-exhaustive discussion of the academic debate see S. Beyer, Der diplomatische Schutz der Aktionäre im Völkerrecht (1977), 48 ff.
46 A point stressed by de Visscher, Ch., ‘La notion de référence (renvoi) au droit interne dans la protection diplomatique des actionnaires’, (1971) 7 Revue belge de droit international 1Google Scholar; and Caflisch, L. C., ‘The Protection of Corporate Investments Abroad in the Light of the Barcelona Traction Case’, (1971) 31 Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 162, at 172Google Scholar.
47 See, e.g., R. B. Lillich, ‘The Rigidity of Barcelona’, (1971) 65 AJIL 522, esp. at 525; Higgins, R., ‘Aspects of the Case Concerning the Barcelona Traction Light and Power Company, Ltd.’, (1971) 11 Virginia Journal of International Law 327, at 331Google Scholar.
48 See notably F. A. Mann, ‘The Protection of Shareholders’ Interests in the Light of the Barcelona Traction Case’, (1973) 67 AJIL 259.
49 Wittich, supra note 2, at para. 19. See also para. 3 of the ILC's commentary to Art. 9 of its Draft Articles on Diplomatic Protection adopted in 2006 (in UN Doc. A/61/10), where it is observed that ‘[t]he Court in Barcelona Traction was not, however, satisfied with incorporation as the sole criterion for the exercise of diplomatic protection.’
50 See Nottebohm (Liechtenstein v. Guatemala) (Second Phase),  ICJ Rep. 4, at 23.
52 In this respect see, e.g., the Claims Settlement Declaration establishing the Iran–US Claims Tribunal, (1981) 20 ILM 230, Art. VII(1), pursuant to which claims of legal persons are permitted only ‘if collectively, natural persons who are citizens of such country [i.e. Iran or the United States] hold, directly or indirectly, an interest in such corporation or entity equivalent to fifty per cent or more of its capital stock’.
53 See the practice discussed in Lee, L. J., ‘Barcelona Traction in the 21st Century: Revisiting Its Customary and Policy Underpinnings 35 Years Later’, (2006) 42 Stanford Journal of International Law 237Google Scholar, at 252–3 and Appendix 1.
54 For comment on this point see notably I. A. Laird, ‘A Community of Destiny: The Barcelona Traction Case and the Development of Shareholder Rights to Bring Investment Claims’, in T. Weiler (ed.), International Investment Law and Arbitration: Leading Cases from the ICSID, NAFTA, Bilateral Treaties and Customary International Law (2005), 77; C. Schreuer, ‘Shareholder Protection in International Investment Law’, in P.-M. Dupuy et al. (eds.), Völkerrecht als Wertordnung – Common Values in International Law: Festschrift für Christian Tomuschat (2006), 601; Paparinskis, M., ‘Barcelona Traction: A Friend of Investment Protection Law’, (2008) 8 Baltic Yearbook of International Law 105Google Scholar.
55 For pertinent criticism see Z. Douglas, The International Law of Investment Claims (2009), 398 ff.
56 Ahmadou Sadio Diallo (Republic of Guinea v. DRC) (Preliminary Objections),  ICJ Rep., at para. 88.
57 F. Orrego Vicuña, International Dispute Settlement in an Evolving Global Society – Constitutionalization, Accessibility, Privatization (2004), 42.
58 See, e.g., para. 3 of the ILC's commentary to Art. 55 ASR (in UN Doc. A/56/10).
59 Parlett, K., ‘Role of Diplomatic Protection in the Protection of Foreign Investments’, (2007) 66 Cambridge Law Journal 533, at 535CrossRefGoogle Scholar. For more on this point see Knight, S. J. and O'Brien, A. J., ‘Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo): Clarifying the Scope of Diplomatic Protection of Corporate and Shareholder Rights’, (2008) 9 Melbourne Journal of International Law 151, at s.IV.D.Google Scholar; and cf. Paparinskis, M, ‘Investment Arbitration and the Law of Countermeasures’, (2008) 79 British Year Book of International Law 264, at 281–97CrossRefGoogle Scholar.
61 Elettronica Sicula S.p.A. (ELSI),  ICJ Rep. 15, especially at 79–80, para. 132. For comment see A. V. Lowe, ‘Shareholders’ Rights to Control and Manage: From Barcelona Traction to ELSI’, in N. Ando et al. (eds.), Liber amicorum Judge Shigeru Oda, vol. 1 (2002), 269; F. A. Mann, ‘Foreign Investment in the International Court of Justice: The ELSI Case’, (1992) 86 AJIL 92. In the Diallo case (on which more below), the Court itself has stated that the ELSI ruling should be read as a special rule based on the applicable friendship, commerce, and navigation (FCN) treaty.
62 Fourth Report on Diplomatic Protection, UN Doc. A/CN.4/530, at para. 3.
63 Para. 6 of the commentary to draft art. 9 (in UN Doc. A/61/10).
64 Para. 1 of the commentary to draft art. 11 (in UN Doc. A/61/10) (emphasis in original).
65 See notably draft art. 9, which provides that if ‘a company had no substantial business activities in the State of incorporation, and if the seat of management and the financial control of a State are both located in another State’, that other state should be entitled to exercise diplomatic protection.
66 Diallo, supra note 56, at paras. 60–67, particularly 61 and 64. Significantly, both parties relied heavily on Barcelona Traction in their arguments: see the Court's summary in paras. 51 ff. of the judgment.
69 A detailed treatment can be found, for example, in the following works: A. de Hoogh, Obligations Erga Omnes and International Crimes (1996); C. J. Tams, Enforcing Obligations Erga Omnes in International Law (2005, 2010); S. Villalpando, L'émergence de la communauté internationale dans la responsabilité des Etats (2005); L.-A. Sicilianos, Les réactions décentralisées á l'illicité: des contre-mesures á la légitime défense (1990); P. Picone, Comunità internazionale e obblighi ‘erga omnes’ (2006); as well as in the contributions to C. Tomuschat and J.-M. Thouvenin (eds.), The Fundamental Rules of the International Legal Order – Jus Cogens and Obligations Erga Omnes (2006). The clearest summary is J. A. Frowein, ‘Obligations Erga Omnes’, in Wolfrum, supra note 2. Ragazzi's monograph, supra note 3, contains much information on specific examples of obligations erga omnes, but curiously neglects the concept's enforcement aspect.
70 See, e.g., A. D. McNair, ‘Treaties producing effects “erga omnes”’, in Scritti di diritto internazionale in Onore di Tomaso Perassi, vol. 2 (1957), 21; and see Tams, supra note 69, at 103–6, for comment and further references.
71 See the House of Lords’ landmark decision in the ‘Fleet Street Casuals’ case: R. v. Inland Revenue Commissioners ex parte Federation of Self-Employed and Small Businesses Ltd,  AC 617, at 644.E (Lord Diplock).
73 South West Africa (Liberia v. South Africa) (Ethiopia v. South Africa) (Second Phase) (Merits),  ICJ Rep. 6.
74 J. Crawford, ‘Preface’, in Tams, supra note 69, at xiii. For a comprehensive assessment of the case and its aftermath see J. Dugard, The South West Africa/Namibia Dispute – Documents and Scholarly Writings on the Controversy between South Africa and the United Nations (1973).
75 Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276 (1970) (Advisory Opinion),  ICJ Rep. 16.
77 H. Thirlway, ‘The Law and Procedure of the International Court of Justice 1960–1989’, (1989) 60 British Year Book of International Law 1, at 100.
78 A. Rubin, ‘Comment’, in J. Delbrück (ed.), The Future of International Law Enforcement: New Scenarios – New Law? (1993), 171, at 172.
79  ICJ Rep. 253 and 457.
80  ICJ Rep. 90.
81 Questions relating to the Obligation to Prosecute or Extradite (Belgium v. Senegal) (Provisional Measures), Order of 28 May 2009, available at www.icj-cij.org.
85 For a detailed analysis see Dawidowicz, M., ‘Public Law Enforcement without Public Law Safeguards? Analysis of State Practice on Third-Party Countermeasures and Their Relationship to the UN Security Council’, (2006) 77 British Year Book of International Law 333CrossRefGoogle Scholar; and Tams, supra note 69, at 198–251.
86 For comment on the terminological problems raised by Art. 54 see L. A. Sicilianos, ‘The Classification of Obligations and the Multilateral Dimension of the Relations of International Responsibility’, (2002) 13 EJIL 1127, at 1139–44.
88 Tams, supra note 69, at 249–51; J.A. Frowein, ‘Reactions by not Directly Affected States to Breaches of Public International Law’, (1994) 248 RCADI 345, at 417 ff.
89 The most radical extension of the erga omnes concept can be found in Judge Cançado Trindade's separate opinion appended to the Court's interim order in the Belgium v. Senegal case (supra note 81, at paras. 68–73). In the judge's view, the erga omnes concept, ‘heralding the advent of the international legal order of our times, committed to the prevalence of superior common values’ (para. 71), required a wide-ranging reinterpretation of traditional international law; notably it implied the granting of interim protection under more lenient conditions, and the horizontal application of human rights law. For brief comment see Tams, supra note 69, 312 ff. (new epilogue to the paperback edition).
91 See, e.g., Gabcikovo Nagymaros,  ICJ Rep. 7, at 117–18 (Judge Weeramantry, Dissenting Opinion); R. Lefeber, ‘Editorial: Cum Grano Salis’, (1998) 11 LJIL 1, at 6–7; C. J. Tams, ‘Waiver, Acquiescence and Extinctive Prescription’, in J. Crawford, A. Pellet, and S. Olleson (eds.), The Law of International Responsibility (2010), para. 14.
92 Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory (Advisory Opinion),  ICJ Rep. 136, at 200, para. 159. This may have been better explained as a consequence of the serious breach of an obligation imposed by a peremptory norm in the sense of ASR, Art. 41. For comment see S. Talmon, ‘The Duty Not to “Recognize as Lawful” a Situation Created by the Illegal Use of Force or Other Serious Breaches of a Jus Cogens Obligation: An Obligation without Real Substance?’, in Tomuschat and Thouvenin, supra note 69, at 99–125.
94 See Judge Higgins's pertinent observation in her separate opinion in the Wall opinion (supra note 90, at 216, para. 37 (Judge Higgins, Separate Opinion): ‘The Court's celebrated dictum in Barcelona Traction, Light and Power Company, Limited, Second Phase (Judgment, I.C.J. Reports 1970, p. 32, para. 33) is frequently invoked for more than it can bear.’
96 The Court determined the existence of a gap quite clearly when it stated that ‘international law had not established its own rules’ on the matter under consideration: see supra note 40.
102 In contrast, the experience of the case confirms the third ‘rule of thumb’ – namely that unanimous or near-unanimous pronouncements by the Court would be more likely to influence the law. See supra note 32 for reference.
105 Sunbolf v. Alford, (1838) 3 M. and W. 218, at 252.
106 S. McCaffrey, ‘Lex Lata or the Continuum of State Responsibility’, in J. H. H. Weiler, A. Cassese, and M. Spinedi (eds.), International Crimes of States: A Critical Analysis of the ILC's Draft Article 19 of State Responsibility (1989), 242, at 243.
107 For further attempts to dismiss the erga omnes dictum as irrelevant because of its obiter status see F. A. Mann, ‘The Doctrine of Jus Cogens in International Law’, in Ehmke et al. (eds.), Festschrift Scheuner (1973), 399, at 418 (a dictum ‘that was unnecessary to the decision and which convey[s] the impression of having been studiously planted into the text or artificially dragged into the arena’); and similarly J. Charney, ‘Comment’, in Delbrück, supra note 78, 158 at 159.
108 It seems to be treated as such by many commentators who are prepared to accept the relevance of the erga omnes dictum, but maintain the distinction between ratio and obiter; see, e.g., Shahabuddeen, supra note 34, at 159; O. Schachter, International Law in Theory and Practice (1991), 344 (‘Although this comment . . . was pure obiter dictum, it has been widely influential’).
109  PCIJ, Ser. A, No. 17, at 47. In the circumstances of the case, Germany had only demanded compensation; see C. Gray, Remedies in International Law (1987), 96.
110  PCIJ, Ser. A/B, No. 46, at 147. This was to serve as the basis for VCLT, Art. 36; see the ILC's commentary on draft article 32, (1966) 2 Yearbook of the International Law Commission 228, para. 4.
111  PCIJ, Ser. A, No. 10, at 18. In fact, the Lotus presumption is often criticized as (among other things) having been unnecessary; see notably Lauterpacht, supra note 5, at 361.
117 V. Lowe, International Law (2007), 99.