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lomatic protection of the state of his nationality and to ac- He waived his right to conduct himself as if no competent authorities
cept nondiscriminatory national treatment as his sole basis existed in Mexico; as if he were engaged in fulfulling a contract in an in-
' of right. Contractually, this is an anticipatory waiver of ferior country subject to a system of capitulations; and as if the only real
remedies available to him in the fulfillment, construction, and enforce-
claims. The former foreign minister of Argentina who
ment of this contract were international remedies. All these he waived
gave his name in the latter part of the nineteenth century and had a right to waive. (b) He did not waive any right which he
to the "Calvo Doctrine," which these waiver clauses seek possessed as an American citizen as to any matter not connected with
to implement, grounded the doctrine fvmly on a negation the fuIfdlment, execution, or enforcement of this contract as such. (c)
of any right of diplomatic protection inhering in states of He did not waive his undoubted right as an American citizen to apply to
nationality and on a denial of the existence of an interna- his Govemment for protection against the violation of international law
(internationally illegal acts) whether growing out of this contract or out
tional minimum standard of justice. Inevitably, "Calvo of other situations. (d) He did not and could not affect the right of his
Clauses" raise these questions: Govemment to extend to him its protection in general or to extend to
(1) May the private party bind or bar the state of his him its protection against breaches of international law. 8s
nationality? c. Restatement, Second, though somewhat restrictive
(2) If the promisor, again the private party, breaches in its approach, does appear to grant a greater degree of
his promise and seeks the representation of his govern- validity to the Calvo clause. Section 202 provides:
ment, what happens as to: (1) Ifan alien, as a condition of engaging in economic activity in the
(a) The investor vis-a-vis the state to which he territory of a state, agrees with the state that he is to be treated as if he
gave his promise, and were a national in respect to such activity, and that his only remedy for
(b) Any independent right of actions that the state injury in this respect is that available under the law of the state, such
of nationality otherwise might have had? The questions agreement, commonly called a "Calvo Clause," relieves the state of
responsibility for injury to the economic interests of the alien in respect
posed do not have clear and satisfactory answers in either to such activity, if (a) the alien is in fact treated as favorably as if he were
doctrinal writings or in international arbitrations. There a national, (b) the violation of an international agreement under the rule
have been no International Court of Justice decisions on stated in 8 165 (1) (b), and (c) the law of the state affords the alien a
these matters. Analytically, these questions raise the issue bona fide remedy for such injury that satisfies the requirements of
whether a nationalization claim is an injury to the state of .procedural justice stated in 88 180-182.
(2) A Calvo Clause does not relieve a state of responsibility for injury
espousal, (that is, an expression of a fundamental concept to an alien except as stated in Subsection (1).
of customary international law), or whether it is merely a
doctrine of logical convenience (i.e., a means by which to d. Thus, though the Calvo clause has not been as
circumvent the lack of individuals' rights in this particular widely accepted as its proponents would like, both arbitral
area of the international legal system). decision and state practice seem to negate the view that
b. Current practice. Capital exporting states other than the clause is a complete nullity in international claims law
the U.S. seem to have been only rarely troubled by Calvo and practice. Moreover, there is some evidence that, in
clauses. To date, this device for subjecting the foreign in- U.S. diplomatic practice, the presence of a Calvo clause is
,vestor to greater host state control has not spread a factor in determining either espousal itself, or the degree
throughout the developing nations of the world. In diplo- and intensity with which the normal diplomatic protection
matic correspondence, the U.S. has rejected the notion hction of the Department of State is discharged. 86
that its international cause of action can be compromised 7-21. Justification for Otherwise Unlawful Conduct. a.
by an agreement between a foreign state and a U.S. The Restatement position.
citizen. Often cited in support of this view is the leading RESTATEMENT, SECOND, FOREIGN RELATIONS LAW
decision in this area, North American Dredging. 84 In ren- OF THE UNITED STATES (1965)
dering its opinion in this case, the Commission hearing Circumstances may justify conduct causing damage to an alien that
would otherwise be wrongful under international law. The rules stated
the dispute stated:
in this Chapter, 58 197-201, are not exceptions to the general rule of
Reading this article [Article 18 contained a Calvo clause] as a whole, it responsibility of a state for conduct departing from the international
is evident that its purpose was to bid the claimant to be governed by standard of justice as indicated in Q 165, but specify situations in which
the laws of Mexico and to use the remedies existing under such certain types of conduct do not depart from the standard. . . . mhe rules
laws. . . .But this provision did not, and could not, deprive the claimant in this Chapter do not constitute justification for conduct that discrimi-
of his American citizenship and all that that implies. It did not take from nates against an alien or constitutes a violation of an international agree-
him his undoubted right to apply to his own Govemment for protection ment. . . .
if his resort to the Mexican tribunals or other authorities available to him 8 197. Police Power and Law Enforcement
resulted in a denial or delay of justice as that term is used in interna- (1) Conduct attributable to a state and causing damage to an alien
tional law. In such:&case the claimant's complaint would be not that his does not depart from the international standard of justice indicated in
contract was violatkd but that he had been denied justice. The basis of 8 165 if it is reasonably necessary for
his appeal would be not a construction of his contract, save perchance in (a) the maintenance of public order, safety, or health, or
an incidental way, but rather an internationally illegal act. (b) the enforcement of any law of the state (including any revenue
What, therefore, are the rights which claimant waived and those
which he did not waive in subscribing to article 18 of the contract? (a) 85. Id. at 26.
86. For a thorough and well-reasoned analysis of the Calvo clause,
u.North American Dredging Co. Case (United States v. Mexico), see Graham, The Calvo Clause: Its Current Status as a Contractual Re-
United States and Mexico General Claims Arbitration 21 (1926). nunciation of Diplomatic Protection, 6 Tex.Int7 L. Forum 289 (1974).