Page 128 - Law of Peace, Volume ,

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responsibility is invoked is the national State of the company. Whatever 103. Accordingly, THE COURT rejects the Belgian Government's
the validity of this theory may be, it is certainly not applicable to the pres- claim by ffiteen votes to one, twelve votes of the majority being based
ent case, since Spain is not the national State of Barcelona Traction. on the reasons set out in the present Judgment.
93. On the other hand, the Court considers that, in the field of diplo- 8
matic protection as in all other fields of international law, it is necewuy [Declarations, separate opinions and dissenting opinion omitted.]
that the law be applied reasonably. It has been suggested that if in a
given case it is not possible to apply the general rule that the right of dip- On the basis of this opinion, it now appears certain that
lomatic protection of a company belongs to its national State, considera- only the state of incorporation may represent a corporate
tions of equity might call for the possibility of protection of the entity on the international level.
shareholders in question by their own national State. This hypothesis 7-9.Substantive Bases for International Claims. a. At-
does not correspond to the circumstances of the present case. tribution of Conduct to the State. Having examined the
94. In view, however, of the discretionary nature of diplomatic pro-
tection, considerations of equity cannot require more than the possibility manner in which a state may espouse a claim of one of its
for some protector State to intervene, whether it be the national State of citizens, attention must now be focused on those acts
the company, by virtue of the general rule mentioned above, or, in a which have generally been viewed as substantive bases for
secondary capacity, the national State of the shareholders who claim pro- international claims. Stated concisely, what acts attributa-
tection. In this connection, account should also be taken of the practical ble to a state are wrongful under international law when
effects of deducing from considerations of equity any broader right of
protection for the national State of the shareholders. It must fmt of all they result in injuries to aliens?
be observed that it would be difficult on an equitable basis to make dis- RESTATEMENT, SECOND, FOREIGN RELATIONS LAW
tinctions according to any quantitative test: it would seem that the owner OF THE UNITED STATES (1965)
of 1 per cent, and the owner of 90 per cent. of the share-capital should 8 165. When Conduct Causing Injury to Men is Wrongful under In-
have the same possibility of enjoying the benefit of diplomatic protec- ternational Law
tion. The protector State may, of course, be disinclined to take up the (1) Conduct attributable to a state and causing iqjury to an alien is
case of the single small shareholder, but it could scarcely be denied the
right to do so in the name of equitable considerations. In that field, pro- wrongful under intemational law if it
(a) departs from the international standard of justice, or
tection by the national State of the shareholders canhardly be graduated (b) constitutes a violation of an international agreement.
according to the absolute or relative size of the shareholding involved. (2) The international standard ofjustice spedled in Subsection (1) is
95. The Belgian Government, it is true, has also contended that as
high a proportion as 88 per cent. of the shares in Barcelona Traction the standard required for the treatment of aliens by
(a) the applicable principles of international law as established by
belonged to natural or juristic persons of Belgian nationality, and it has international custom, judicial and arbitral decisions, and other recog-
used this as an argument for the purpose not only of determining the nized sources or, in the absence of such applicable principles,
amount of the damages which it claims, but also of establishing its right (b) analagous principles of justice generally recognized by states
of action on behalf of the Belgian shareholders. Nevertheless, this does that have reasonably developed legal systems. ...
not alter the Belgian Government's position, as expounded in the
course of the proceedings, which implies, in the last analysis, that it In order to identify the substantive bases for international
might be sufficient for one single share to belong to a national of a given claims, it is necessary to analyze-c violations of the
State for the latter to be entitled to exercise its diplomatic protection.
96. The Court considers that the adoption of the theory of diplomatic international standard of justice. 29
protection of shareholders as such, by opening the door to competing b. Wrongful Conduct by State Agents Attributed to the
diplomatic claims, could create an atmosphere of confusion and in- State. In the William T. Way Claim (United States v.
security in international economic relations. The danger would be all the
greater inasmuch as the shares of companies whose activity is interna- Mexico), 30 a U.S.citizen, while beii arrested, was shot
tional are widely scattered and frequently change hands. It might and killed by Mexican arresting officers. The warrant for
perhaps be claimed that, if the right of protection belonging to the na- Way's arrest, void on its face under Mexican law for
tional States of the shareholders were considered as only secondary to failure to state a charge, had been issued by a local Alcalde
that of the national State of the company, there would be less danger of who had been motivated by personal grievances.
difficulties of the kind contemplated. However, the Court must state Moreover, the arresting officers had been supplied with
that the essence-oh secondary right is that it only comes into existence
at the time when the original right ceases to exist. As the right of protec- arms, and the warrant had directed them "to use such
tion vested in the national State of the company cannot be regarded as means as may be suitable" to seize the accused. In ren-
extinguished because it is not exercised, it is not possible to accept the dering its decision on behalf of the claim for monetary
proposition that in case of its non-exercise the national States of the damages brought by the U.S. on behalf of relatives of
shareholders have a right of protection secondary to that of the national Way, the Claims Commission stated:
State of the company. Furthermore, study of factual situations in which
this theory might possibly be applied gives rise to the following 0bSe~a-
tions. 29. Treaties often refer to the obligation of either party to accord
888 such treatment to the other's nationals as is required by international
100. In the present case,it is clear from what has been said above law. See, e.g., Treaty of Friendship, Commerce and Navigation between
that Barceiona Traction was never reduced to a position of impotence the United States and Italy, Feb. 2, 1948, Art.V. 63 Stat. 2225; Treaty
such that it could not have approached its national State, Canada, to ask of Friendship, Commerce and Navigation with the Federal Republic of
for its diplomatic protection, and that, as far as appeared to the Court, Germany, Oct. 29, 1954, Art. 111, T.I.A.S. No. 3593, 273 U.N.T.S.;
there was nothing to prevent Canada from continuing to grant its diplo- Treaty of Friendship, Commerce and Navigation with Pakistan, Nov.
matic protection to Barcelona Traction if it had considered that it should 12,1959, ~rt.rn, 12 U.S.T. 110,404 U.N.T.S. 259.
do so. 30. Wiam T. Way Claim (United States v. Mexico), United States
1'01. For the above reasons, the Court is not of the opinion that, in and Mexico General Claims Commission, [1928-291 Opinion of Com-
the particular circumstances of the present case, jus standi is conferred missioners 94,4 U.N.R.I.A.A. 391 [hereinafter cited as William T. Way
on the Belgian Government by considerations of equity. Claim].