The indispensable party doctrine resurfaces in Nicaragua v Germany

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In this post, Professor Alexander Orakhelashvili addresses the invocation of the Monetary Gold doctrine in the ongoing litigation of Nicaragua v Germany before the International Court of Justice

Photo of Dr Alexander Orakhelashvili

Professor Alexander Orakhelashvili

Background of the argument

In an earlier post a couple of years ago I addressed pleadings in Guyana v Venezuela that touched upon the indispensable party doctrine. In that case, the Court did not end up directly addressing this matter because it could dispose this issue based on a more case-specific factor that the 1965 Treaty provided. Also, there are not many precedents of the indispensable party doctrine being involved or upheld at the provisional measures stage at which the issues of admissibility of claims are not addressed in as detailed manner as they are addressed at the preliminary objections stage. Thus, acting on the indispensable party doctrine at the interim measures stage could involve a holding that Nicaragua’s claims are prima facie or manifestly inadmissible. Yet it is not clear to what extent the Court would, at this stage, have to go into the content of the indispensable party doctrine: whether it would have to examine the relevant evidence in detail or limit itself to general statements that could come across as sensible to some and perfunctory or superficial to others.

Germany’s distortions

As for the specific content of the indispensable party doctrine, Nicaragua (p.39) deals with this matter somewhat tersely, but correctly emphases the cardinal feature of Monetary Gold that parties to proceedings wanted to receive a share of Albania’s gold deposited in Rome. The claim the Court faced was thus an in rem claim that would have required not merely some form of pronouncement on Albania’s legal interests (similar to what was possible to happen in East Timor), but the actual seizure of Albania’s property.

Germany (p.24) refers to “the Monetary Gold line of jurisprudence”. However, there is no such “line”, because the relevant cases involve diverse factual conditions of the “indispensable party” and the original Monetary Gold rationale has not been replicated in any subsequent cases. After Monetary Gold, the Court declined to adjudicate only in one case (East Timor) and all other major tribunals, such as ITLOS, ECtHR and ICC have refused to decline jurisdiction on the basis of this doctrine (see for detail here and here).

Furthermore, Germany (page 29, para. 19) engages in a clear distortion of the Court’s passage in Monetary Gold that “The Court is not merely called upon to say whether the gold should be delivered to Italy or to the United Kingdom. It is requested to determine first certain legal questions upon the solution of which depends the delivery of the gold”. However, those “certain legal issues” were the ones whose consideration would lead to Albania’s gold being seized and Albania being conclusively deprived of its legal rights and property and be unable to legally challenge that outcome. That much is also obvious given that Germany (p.30, para.21) likewise distorts another finding from Monetary Gold, given that it omits the reference to the underlying rationale stated by the Court (pp.32-33), to the effect that “it [was] necessary to determine whether Albania has committed any international wrong against Italy, and whether she is under an obligation to pay compensation to her; and, if so, to determine also the amount of compensation.” The Court stated that “Italy believes that she possesses a right against AIbania for the redress of an international wrong which, according to Italy, Albania has committed against her”. Nothing of the kind is required in the present case. The Court did say in Monetary Gold that “only two States, Italy and Albania, [were] directly interested” in determination of those issues. That was because Italy was seeking an indemnification from Albania and a determination that Albania’s legislation had breached international law. Nicaragua is not seeking anything like that from or with regard to Israel. This case is about anything but Israel’s wrongful conduct towards Nicaragua. Therefore, it is hardly true that Israel and Nicaragua are in the same position as Italy and Albania were in Monetary Gold.

While in Guyana v Venezuela the Court did not address the indispensable party doctrine on its head, at paras 62-63 of that Judgment it cited extracts from both Monetary Gold and East Timor to emphasise the connection between that doctrine and the principle of consent. Some may see in this an indication that the Court backs the wider East Timor version of the doctrine and as far as one can see, Germany is certainly among them. Germany argues that “Nicaragua seeks radically to undermine the most fundamental principles concerning consent to jurisdiction” and that both Monetary Gold and East Timor do “no more than reflect the basic rule on the essential need for consent” (pp.25-26). Germany goes on to say that “It is obviously wrong to say that there is no need for such an approach given Article 59 of the Statute”, because “[s]uch a finding would be treated around the world as a generally applicable and objective assessment of actual or likely wrongful conduct by Israel”. That was the risk to which New Zealand and the UK were exposed in Nauru v Australia, yet the Court was not deterred from adjudicating on that case. What matters is whether Israel would face a binding judgment that determines or disposes or its legal rights, and it certainly would not face any of that. Germany says that Israel will not be able to challenge the Court’s Order in the present case, but it would not need to do that, because the Order would not do nothing impose or determine Israel’s legal obligations or rights. Nor would Germany end up conclusively depriving Israel any of its international legal rights that it could invoke against Germany.

The Statute, not the context

The rationale underlying Monetary Gold is not a product of the Court’s free assessment of the underlying context of international affairs, but a deduction from the requirements under the Court’s Statute. The key issue is whether the criterion of “very subject-matter” of the Court’s decision (which is not the same as reasoning and discussion leading to it, and is certainly more than simply “affecting” a State’s legal interests, to use the Court’s own terminology, through a possible incidental pronouncement at most) includes not only determination of a State’s rights with the binding force, but also allusions or implications that the Court’s judgment may contain. The Court was at pains to emphasise in Monetary Gold (p.33) that it was being asked to render a binding judgment relating to Albania as a third party, and that would not be able to issue such binding judgment on disposing Albania’s property that amounted to “the vital issue to be settled”, without its consent. This factor was not replicated in East Timor where the original scope of the indispensable party doctrine was distorted and disfigured. Indonesia did not face the risk that the Court’s decision would dispose of its rights, or “rule” on them as the Court said in East Timor (para.35).

Germany’s suggestions notwithstanding, Monetary Gold and East Timor are not about the same thing. The Court’s Statute protects its States-parties from judgments determining, without their consent, their legal rights with binding force, not from any innuendo or inconvenience. It remains to be seen whether in this case the Court will maintain the close connection between the indispensable party doctrine and the concrete determination of legal rights of a State, or if it will choose to endorse the wider or over-extended (East Timor) version of the doctrine whose application will require, from the Court itself, some essentially political case-specific determinations as to when States are likely to face unwanted innuendo or inconvenience. Of course, language could always be manipulated by speaking of the “very subject-matter” of a court decision and in effect referring to political or other inconvenience (and East Timor witnessed precisely that much). Neither in East Timor, nor in the present case has the Court been shown that third party rights or interests amount to “the vital issue to be settled”. We have to wait and see whether the Court will endorse the over-extended version of the  indispensable party doctrine, and thereby also choose to be the only of the major international tribunals that adheres to that over-extended version.

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