Abstract
State-to-State financing is normally provided through bilateral loans. Currently, it is widely accepted that bilateral loan agreements do not qualify as an expression of sovereignty as they belong to the domain of commercial transactions. Being commercial in character, they may be commercial in form as well. Consequently, they may both assume the guise of either a proper international agreement or a contract and also be submitted to either international or municipal law.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Where there is a multiplicity of lenders, it becomes necessary to specify whether the financial undertaking is joint or several. In the Agreement between the Governments of the United Kingdom of Great Britain and Northern Ireland, Australia, India, Pakistan and Ceylon, and the Government of the Union of Burma (signed 28 June 1950), the United Kingdom Treaty Series (UKTS) No 41 (1950), the liability of the five Commonwealth lenders was limited to each single contribution and repayment of the principal and payment of the interest were to be made to each Commonwealth government “severally and pari passu in proportion to the sum” provided by that government.
- 2.
See Folz (2000), p. 608.
- 3.
See Mann (1959), p. 35.
- 4.
“It is not impossible that transactions between national persons are, at least partially, governed by those supra-national principles of law which are the tools of public international law, and that transactions between international persons are governed by a national system of law”, Mann (1944), p. 12. Contra, Salmon (1958), pp. 10–12, who insisted on the traditional view, according to which transactions between international subjects can be governed solely by international law.
- 5.
Cf. supra, § 3.3.1.
- 6.
Recent instances of interstate contracts are the Loan Agreement of 5 June 2009 between the Depositors’ and Investors’ Guarantee Fund of Iceland and the Commissioners of Her Majesty’s Treasury, with Iceland as guarantor, and the parallel Loan Agreement of 5 June 2009 between the Depositors’ and Investors’ Guarantee Fund of Iceland and the State of the Netherlands, with Iceland as guarantor; the Intercreditor Agreement of 8 May 2010 between the Euro countries and the parallel Loan Facility Agreement of 8 May 2010 between the Euro countries and Greece; the European Financial Stability Facility (EFSF) was created as a company by the Euro countries and incorporated as a société anonyme under the laws of Luxembourg.
- 7.
See Jennings and Watts (1992), p. 1034.
- 8.
In the latter situation, a useful criterion may be given by the competence of the organ, in the sense that when the object of the agreement falls within the competence of this organ, the act will be a contract and that when it does not fall within and the organ is acting in the name of the State, the act will be an international agreement, Dupuy (1977), p. 852. Nevertheless, this suggestion has not won universal acceptance as it does not provide a firm basis for the distinction between contracts and international agreements but rather acts as a tool to ascertain the validity of the act, Verhoeven (1984), pp. 16–17.
- 9.
The classification is borrowed from Gautier (1993), pp. 228–250.
- 10.
See Jones (1944), p. 119. In the case of the Gulf of Maine, Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada v. United States) [1984] ICJ Rep 246, 307–308, concerning the delimitation of the continental shelf and the fishery zone waters between the United States and Canada, the International Court of Justice resolved that the US official was empowered by his government to use the criterion of the median line but not to commit its government to use this method, Decaux (1984), p. 324.
- 11.
See Fielder (1995).
- 12.
Cf. infra, § 4.2.1.
- 13.
On this point, see Gautier (1993), pp. 239–240.
- 14.
Cf. the interdepartmental agreement of 30 November 1959 between the UK Postmaster-General, the Danish General Director for Posts and Telegraphs, the Icelandic General Directorate of Posts and Telegraphs and a Danish company: the fact that one party to the agreement was a private company and that the differences would be settled by municipal law led to the conclusion that the act was not a treaty, Lauterpacht (1961), pp. 575–576.
- 15.
In practice, it may be difficult to ascertain when an act is attributable to an organ of the State and when to a decentralised organ. The point is well illustrated by the Egyptian General Organization for Tourism and Hotels (EGOTH) case, where the contract between EGOTH and the Southern Pacific Properties for the creation of two tourist settlements in Egypt was “approved, agreed and ratified” by the Egyptian Minister for Tourism. This formula was intended by the Cour d’appel of Paris as a style clause in conformity with Egyptian law, which provided for the supervision of the Minister of Tourism in these matters. Rèpublique Arabe d’Egypte c. Southern Pacific Properties Ltd et Southern Pacific Properties (Middle East) (judgment of 12 July 1984) (1985) 112 JDI 130, 138, with a note by Goldman, and (1984) 23 ILM 1048, 1056, with an introductory note by Gaillard.
- 16.
See Audit (2002), p. 105.
- 17.
- 18.
See Burdeau (1981), p. 113.
- 19.
The US practice comprises “Agency-Level Executive Agreements”, i.e. executive agreements concluded by agencies with parallel bodies of foreign States (agency-to-agency agreements). These agreements differ from “Executive Agreements” (infra, § 4.4.1.2) as the latter are made by the US President, Secretaries of State, or diplomats, while the former are made by officials from those agencies, even though the practice records examples of agreements falling under the competence of the agencies and signed by diplomats that still retain the qualification of agency-level executive agreements. In this case, substance prevails over form. See Kuchenbecker (1979), pp. 17–21.
- 20.
In the arbitration between Italy and Costa Rica, the Permanent Court of Arbitration held that the financial convention between the Italian Mediocredito Centrale and the Costa Rican INCOP was to be considered as an execution agreement of a previous framework cooperation agreement between Italy and Costa Rica, Case Concerning the Loan Agreement between Italy and Costa Rica (1998) XXV RIAA 23, 55, 61. An alternative discrimen may be constituted by the origins of the funds: if they are appropriated directly from the agency, then the agreement should not amount to an international treaty, Myers (1957), pp. 600–601.
- 21.
See Gautier (1993), pp. 296–297.
- 22.
Rudolf (1995), pp. 366–369, and Audit (2002), pp. 154–155. Significantly, the US Constitution forbids federal States to conclude treaties but enables them to enter into agreements and compacts with the prior consent of the Senate (Art I, § 10, cl 3, USCA, Const), although a clear distinction between “treaties” and “compacts” has yet to emerge, Henkin (1996), pp. 151–156.
- 23.
See Petiteville (1995).
- 24.
These agreements cannot qualify as proper international agreements but at most as international administrative agreements, Seerden (1992), even though the contractual qualification can be usefully resorted to.
- 25.
“The consent of a State to be bound by a treaty may be expressed by signature, exchange of instruments constituting a treaty, ratification, acceptance, approval or accession, or by any other means if so agreed”: Art 11 of the Vienna Convention on the Law of Treaties (adopted 23 May 1969) (1969) 8 ILM 679.
- 26.
In this case, without submission to a particular formality, it is impossible to establish when the act is a treaty and when it is a contract, Verhoeven (1984), p. 16.
- 27.
Even assuming that certain matters are reserved to the proper domain of States, such as the definition of boundaries, others are not, like loans, and may be regulated by treaty or by contract, Batiffol (1956), p. 301.
- 28.
On the point, see Gautier (1993), pp. 411–418 and 424–431.
- 29.
Cf. supra, § 3.3.1.
- 30.
- 31.
Agreement between the Government of the United Kingdom and the Export-Import Bank (signed 25 February 1957) (cmnd 104) (1956–1957) XXXI Parliamentary Papers 235, Agreement between the Government of the United Kingdom and the Export-Import Bank (signed 11 February 1965) (cmnd 2610) (1964–1965) XXXII Parliamentary Papers 119, and Agreement between the Government of the United Kingdom and the Export-Import Bank (signed 3 November 1969) (cmnd 1301) (1969–1970) XX Parliamentary Papers 1301. The significant point is that none of these agreements has been published in the UKTS.
- 32.
The Eximbank may act both as agent of the US government or on its own account; from the wording of the agreement, it was unclear in which capacity the Eximbank was acting, Gautier (1993), pp. 417–418.
- 33.
Agreement on a Danish Loan to Jordan (signed 28 June 1966) 574 UNTS 3, Agreement on a Danish Loan to Brazil (signed 8 July 1966) 581 UNTS 95, Agreement on a Danish Loan to Malawi (signed 1 August 1966) 586 UNTS 3, Agreement on a Danish Loan to Iran (signed 28 November 1967) 638 UNTS 217, and Agreement with Malaysia (signed 28 February 1968) 640 UNTS 30.
- 34.
Cf. infra, § 4.3.1.
- 35.
See Mann (1973), p. 254.
- 36.
- 37.
The Permanent Court of International Justice ruled that “[a]ny contract which is not a contract between States in their capacity as subjects of international law is based upon the municipal law of some country”, Case Concerning the Payment of Various Serbian Loans Issued in France (1929) PCIJ Series A No 20, 41.
- 38.
- 39.
“In this respect it seems desirable to establish a distinction between the “law which governs the contract and the legal order from which the binding nature of the contract stems (…)”; in this case “the legal order from which the binding nature of the contract derives is international law itself”, Texaco-Calasiatic v. Lybia (n. 38) 443. Maniruzzaman (2001b), p. 322, highlighted the derivation of this theory from the monistic doctrine of international law.
- 40.
See Weil (1981), pp. 561–562.
- 41.
- 42.
In this regard, Weil (1981), p. 566, has introduced a distinction between “contrat de droit international”, rooted in the international legal order, and “contrat internationalisé”, governed totally or partially by international law. Verhoeven (1984), p. 31, argued in favour of the existence of an intermediate legal order between international law and national law—the transnational law—as an alternative approach to the doctrine of the Grundlegung.
- 43.
Case Concerning the Loan Agreement between Italy and Costa Rica (n. 20) 61–62.
- 44.
See Weil (1981), p. 580.
- 45.
See Maniruzzaman (1999), p. 153.
- 46.
These agreements should be governed by international development law as applicable law, Maniruzzaman (2001a), pp. 44–45.
- 47.
In fact, in most instances there is not a clear characterisation of the agreement or an indication of a governing law. For instance, in the Agreement of 17 April 1979 between Romania and Zambia concerning a credit facility granted by the Balkan country, no governing law provision was inserted, Donegal International v. Zambia [2007] EWHC 197 [65] (comm) [2007] 1 Lloyd’s Rep 397, 411.
- 48.
- 49.
In this case, according to Mann (1959), p. 40, the intention of the parties must be ascertained by the same method employed to ascertain the proper law of a contract, with the further caveat that “[t]he submission of a treaty to a municipal system is, however, so unusual step that it ought not to be inferred from other than the most compelling evidence”; see also van Hecke (1964), pp. 29–30. Triepel (1923), pp. 102–103, had previously expressed the view that the applicability of a domestic law to an international agreement could be determined not only in presence of an expressed indication by the parties but also “par des actes concluants, que ceci ou cela devra être apprécié d’après les règles d’un droit civil determine”.
- 50.
In this respect, the Vienna Convention (n. 25) has acknowledged the result of the Harvard Research Institute that excluded those agreements governed by domestic law from the number of treaties (1935) 27 AJIL suppl 693–697.
- 51.
The point had been vividly emphasised in the 1950s by Mann (1959), pp. 37–38: “[t]hat that branch [of public international law regulating treaties of economic character] is in an early stage of development must be regarded as a challenge to scholars rather than a negation of its existence”.
- 52.
See Reinisch (1995a), p. 53.
- 53.
- 54.
See Mann (1944), p. 23. It is worth emphasising that at conflict-of-laws level there is a clear difference between incorporation and renvoi. In the latter case, the agreement is subject to any variation of the domestic law, while in the former any normative variation does not affect the agreement as the domestic law is crystallised as in force at the conclusion of the agreement. See Collins (2012), pp. 1807–1809.
- 55.
The key point is that this choice must not be evaluated as a conflict-of-laws connecting factor but rather as a substantive indication of a specific domestic law in the framework of an international law agreement; Curti Gialdino (1972), pp. 806–808.
- 56.
Verhoeven (1984), p. 29, held that, notwithstanding the presence of scattered municipal law elements, international agreements remain subject to international law. In fact, the mere reference to domestic law norms does not allow the inference that the whole agreement is subject to a municipal legal system, Delaume (1967), pp. 98–99.
- 57.
See Kronfol (1976), p. 136.
- 58.
This practice is followed in particular by Germany, where the agreements entered into by the Kreditanstalt fur Wiederaufbau (KfW)—the German development agency for financial cooperation—are governed by German law (Bothe and Brink 1986, p. 92; Gündling 1995, p. 427); see, for instance, the relevant provisions in the agreements concerning financial cooperation entered into by Germany with certain developing countries during the first half of the 1980s (1392 UNTS 3-134), under which the loans were to be materially disbursed by the KfW and governed by German law. The financial convention between Mediocredito Centrale and INCOP, concluded in the framework of a cooperation agreement between Italy and Costa Rica, was governed by Italian law, Case Concerning the Loan Agreement between Italy and Costa Rica (n. 20) 62.
- 59.
See Mann (1944), p. 24. Lord McNair (1961), p. 4, note 4, emphasised that “[i]f a State is then capable of binding itself by an agreement with an individual or a corporation within some system of law which is not international law, why can it not do so when contracting with another State if both so wish?” In the same vein, O’Connell (1970), p. 976, held that “[a]greements between States in contemporary society relate more often to commercial matters than to sovereign activity, and to financial transactions than to policy accommodation, and it is clear that many routine contractual matters may be most conveniently regulated according to a reasonably ascertainable system of municipal rules rather than left to the hazards of a very rudimentary and imprecise international law”. See also American Law Institute (1987), Comment d) sub § 301.
- 60.
“Contracts between international persons, particularly States, are, in general, subject to public international law”, Mann (1959), p. 34. “Whether an inter-governmental contract is governed by municipal law or by international law depends upon the form of the agreement and the detail with which the parties in the agreements have specified their own rules for contractual performance. Clearly a commercial agreement in treaty form is governed exclusively by international law: so too, at least presumptively, is an agreement not in treaty form but which sets up a coherent regime of rules for its execution which render it substantially independent of municipal law for the attainment of common goal. International law itself could thus govern a contract which would not ordinarily be described as a treaty, and the fact that international law is ill-adapted to the hazards of commercial activity is irrelevant”, O’Connell (1970), p. 976.
- 61.
See Schmidt (1974), p. 581. The rule of the law of the lender was confirmed in the agreement of 1975 between the Comisariat Français à l’Energie Nucleaire and the Iranian government. In the framework of the Agreed Minute on Cooperation, which was submitted to Iranian law, the Iranian government engaged to grant to the Comisariat a loan of one billion French francs in exchange for the support received by France for the development of its nuclear programme, Park (1991), pp. 1344–1345; cf. also Fouchard (1989).
- 62.
- 63.
As regards the agreements providing for a line of credit between the UK government and the Eximbank (n. 31) (see above), the 1957 and 1965 agreements contained a submission to New York law, while the 1969 agreement failed to indicate any governing law, Mann (1959), p. 241, note 5.
- 64.
This uncertainty is reduced through the insertion of stabilisation clauses in the terms of the contract (cf. infra, § 6.4.6.2).
- 65.
Cf. infra, § 6.4.6.1 and § 7.7.1. English law was selected as governing law in the Loan Agreement between the Depositors’ and Investors’ Guarantee Fund of Iceland and the Commissioners of Her Majesty’s Treasury, with Iceland as guarantor (Art 17.1), and the parallel Loan Agreement between the Depositors’ and Investors’ Guarantee Fund of Iceland and the State of the Netherlands, with Iceland as guarantor (Art 16.1), in the Intercreditor Agreement between the Euro countries (Art 14.1) and the parallel Loan Facility Agreement between the Euro countries (Art 14.1); cf supra, note 6.
- 66.
- 67.
The point was vividly elucidated in the arbitration Liamco (Libyan American Oil Company v. Government of the Libyan Arab Republic (1977) 62 ILR 140, 171), where the sole arbitrator Mahmassani made a specific reference to the “general principles governing the conflict of laws in private international law”. The methodology utilised to identify the rules of this system is based on a comparison between the major conflict-of-laws systems: the arbitrators analyse these systems, determine the common principles, and transpose them into a transnational conflict-of-laws system. However, the principles so far derived are too fragmented to form a coherent set of rules. See Maniruzzaman (1993), pp. 389–392.
- 68.
This approach is based on the assumption that each party would have submitted the agreement to its own national law. As a consequence, the absence of a choice of law is to be understood not as an implied rejection of the national law of the parties but rather as the result of crossed vetoes. From this perspective, it is not unreasonable to apply the common principles of the legal systems of the parties. See Rubino-Sammartano (2001), pp. 446–455.
- 69.
In this case, the tronc commun doctrine could be still applied through the depeçage of those aspects of the contract in relation to which the determination of common principles is workable, Ancel (1990), pp. 69–70.
- 70.
In this regard, it is useful to draw a distinction between direct submission to international law and application of international law as part of a municipal legal system; in the Aminoil arbitration (Government of Kuwait v American Independent Oil Company (1982) 21 ILM 976, 1001) and in the so-called “Pyramids” arbitration (S.P.P. (Middle East) Limited Southern Pacific Properties Ltd v The Arab Republic of Egypt, the Egyptian General Company for Tourism and Hotels (1983) 22 ILM, 1983 752, 768–769), international law was applied as part of Kuwaiti law and Egyptian law.
- 71.
- 72.
Cf. supra, § 4.3.1.
- 73.
The existence of this legal system was perhaps first envisaged by Jessup (1956), p. 2, in whose view the term “transnational law” includes “all law which regulates actions or events that transcend national frontiers”. Schwarzenberger (1957), p. 578, referred to it as “quasi-international law”, where “subjects and objects of international law deal which each other largely inter pares”; Lalive (1964), p. 1008, recognised the progressive emergence of a “new system of law, somewhat half-way between international law stricto sensu and domestic law. This is transnational law”. Along the same lines, Goode held that “[t]he product of this process of harmonization through international instruments and conscious and unconscious parallelism has become known as transnational commercial law, a body of codified and uncodified principles and rules which cross national borders”, McKendrick (2010), p. 20. Cf. also Schmitthoff (1982), p. 19.
- 74.
Cf. infra, § 6.4.6.4.
- 75.
The Convention falls in the field of the codification of customary law conducted under the aegis of the United Nations. See the commentary of the International Law Commission in (1966) II YILC 187. It reflects, at least in part, customary rules, Shaw (2008), p. 903. For comments, see Corten and Klein (2006) and Villiger (2009).
- 76.
Nonetheless, the State is not allowed to invalidate a treaty if, after having become aware of the grounds for its invalidity, it has expressly accepted its validity or if, by its conduct, acquiescence may be presumed (Art 45).
- 77.
In case of absolute invalidity, the treaty is null and void ex tunc, while in the case of relative invalidity, the grounds may be invoked solely by the victim State and may be resolved by acquiescence or consent by the aggrieved party, Cassese (2005), p. 177.
- 78.
Coercion may include every form of constraint against the person of the representative, including a threat to his reputation and a threat against a member of his family, Sinclair (1984), pp. 176–177. Maresca (1971), pp. 605–606, note 3, reports some historical examples of coercion against a representative.
- 79.
The meaning of this norm may be problematic. The reference to the principles of the UN Charter is generally understood as a reference to Art 2(4), which encapsulates the obligation to abstain from threat or use of force (Fisheries Jurisdiction (Federal Republic of Germany v. Iceland), Jurisdiction of the Court [1973] ICJ Rep 49, 59); see Buchheit (1976). During the works of the Vienna Conference, a group of developing countries proposed the inclusion of economic or political pressures in the expression “force”. The proposal was rejected by the majority of the States present at the Conference on the assumption that the meaning of “force” as used in Art 2(4) referred only to physical or armed force and that to enlarge the grounds of invalidity in the law of treaties would have prejudiced the stability of international relations. As a compromise, a mention to economic and political pressure was made in a declaration attached to the Convention (Declaration on the Prohibition of Military, Political or Economic Coercion in the Conclusion of the Law of Treaties (1969) 8 ILM 733); see Napoletano (1977), pp. 518–530. This solution is perfectly coherent with customary law, which does not consider the cessation of economic aid “as a breach of the customary-law principle of non-intervention”, Case Concerning Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. Unites States of America), Merits [1986] ICJ Rep 14, 126. Nevertheless, a broader interpretation of Art 2(4) of the UN Charter would have repercussions for the application of Art 52 of the Vienna Convention, Sinclair (1984), p. 179.
- 80.
A peremptory norm, or jus cogens, is a norm from which derogation is not permitted and that can be modified solely by a norm of international law that has the same character; see Mann (1990) and Kolb (2003). The content of the jus cogens is not well defined, but it encompasses the unlawful use of force, the violation of self-determination, and the infringement of fundamental human rights; cf. YILC (1966) vol II, 248, and Orakhelashvili (2006), pp. 50–66. Cf. infra § 13.3.10.
- 81.
- 82.
See Maresca (1971), p. 632.
- 83.
Under Art 46(2), a violation is manifest when it is objectively evident, i.e. when a simple comparison between the constitutional rules and the behaviour of its organ makes it possible to ascertain the validity of the treaty. This evidence must be inferred from constant practice, so a State—even though it is not obligatory to know all the internal rules of other States—is nevertheless supposed to be familiar with the fundamental rules relating to international relations as materially applied, Affaire de la délimitation de la frontière maritime entre la Guinée Bissau et le Sénégal (1985) XX RIAA 119, 141; in this regard, it is worth emphasising that a limitation of a Head of State’s capacity is not manifest unless properly publicised, Case concerning the Land and Maritime Boundary between Cameroon and Nigeria [2002] ICJ Rep 3, 431. Furthermore, the parameters of good faith prevent invoking invalidity by the State that was conscious of the violation of the constitutional rules by its representative or by the State that was aware of the violation of the constitutional rules of the other State; see Elias (1971), pp. 350–359, and Maresca (1971), pp. 54–57. For an application of the good faith rule in the field of bilateral debt, see Case concerning the Loan Agreement between Italy and Costa Rica (n. 20) 65.
- 84.
Nevertheless, this ground does not apply where the State invoking invalidity had contributed by its conduct to the error and where circumstances were such as to enable the State to notice the error, Case Concerning the Temple of Preah Vihear (Cambodia v. Thailandia), Merits [1962] ICJ Rep 5, 26. See Elias (1971), pp. 362–372.
- 85.
The fraud is not so much a dolus bonus or a dolus incidens but rather a dolus malus, Maresca (1971), p. 638.
- 86.
- 87.
See Wildhaber (1995).
- 88.
See Weinstein (1952).
- 89.
Cf. the Bill of Rights of 1688 (Levying Money) and the Déclaration des droits de l’homme et du Citoyen du 26 août 1789 (Art 14).
- 90.
- 91.
“With regard to foreign concerns, the king is the delegate or representative of his people. (…) What is done by the royal authority, with regard to foreign powers, is the act of the whole nation”, Blackstone (MDCCLXXXIII), Book I, Ch 7, p. 252. In past times, the sovereign used to conclude the treaty personally; nowadays, this function is exercised by the prime minister or the minister for foreign affairs, Higgins (1987), pp. 123–124.
- 92.
- 93.
The task of the Crown is therefore to “induce the Parliament to legislate so as to make the necessary change in the law or to equip the Crown with the necessary power to execute the treaty”, Lord McNair (1961), p. 81.
- 94.
Instances of financial treaties approved by Parliamentary statute were the conventions providing for the guarantee to the Turkish loan (1855), the Greek loan (1898), and Austrian loan (1923), Lord McNair (1961), p. 94 (cf. supra, § 3.4.1). The principle under which all expenditure of the Crown is subject to the approval by the Parliament—“per commune consilium regni”—is to be traced to clauses 12 and 14 of the Magna Carta Libertatum, Stubbs (1913), p. 291. In contemporary times, “the Crown requests money, the Commons grant it, the Lords assent”, Jack (2011), p. 32.
- 95.
See Templeman (1994), pp. 158–159. “[A] constitutional usage and possibly, a binding convention”, De Smith and Brazier (1998), p. 147, the rule has recently received legislative transubstantiation under the Constitutional Reform and Governance Act 2010, in Public General Act 2010 c 25, secs 20–25, for a comment, Barrett (2011).
- 96.
One of the last agreements is the United Kingdom/Jordan Loan Agreement 1987 (1 October 1987) UKTS No 55 (1988).
- 97.
The sums established in the above-mentioned agreement between United Kingdom and Jordan were approved by the Appropriation Act 1987, in Public General Acts 1987 c 17, and were subsequently allocated by the Appropriations Accounts 1987–88, Vol 2: Class II Foreign and Commonwealth Office (1987–1998) VL Parliamentary Papers.
- 98.
- 99.
This principle was enunciated by Rose LJ in the case of R. v. Secretary of State for Foreign Affairs, x parte World Development Movement Ltd [1995] 1 All ER 611, 622–624 (QBD DC). From a procedural standpoint, the locus standi of a group of pressure acting to ameliorate the quality of development aid was affirmed, and from a substantive point of view, under a balance of interests between the necessity to safeguard relationships with the beneficiary and the necessity to assess the affordability of the project, the predominance of the latter was likewise affirmed.
- 100.
USCA, Const, Article VI, cl 2, see Henkin (1996), pp. 198–203.
- 101.
In the Head Money Cases, 5 SCt 247, 254 (1884), Miller J affirmed that “[t]he Constitution gives it [a treaty] no superiority over an act of congress in this respect, which may be repealed or modified by an act of a later date”; see also American Law Institute (1987), § 111(1).
- 102.
See Wright (1944).
- 103.
USCA, Const Art II, sec 2, cl 2; see Hyde (1947), pp. 1387–1390.
- 104.
See Byrd (1960) and Helm-Busch (1995). At least three types of executive agreement can be identified: congressional executive agreements, concluded with the authorisation of Congress; executive agreements pursuant to a treaty, concluded in execution of a framework treaty; and sole executive agreements, concluded by the sole authority of the President (American Law Institute 1987, Comment a) sub § 303); see Jackson (1987), pp. 143–144. This last category of international agreements was resorted to by President Roosevelt in 1905 after the refusal by the Senate to approve a convention with San Domingo regarding the establishment of financial control over the Caribbean country (cf. supra, § 2.2.2): facing opposition by the Senate, the US President, relying upon the implied powers conferred upon him by the Constitution, in 1905 concluded an “interim arrangement”. On this point, see Hollander (1907) and Wynne (1951), pp. 249–250.
- 105.
See Murphy (1975).
- 106.
American Law Institute (1987), Comment b) sub § 302.
- 107.
USCA, Const, Article 1, sec 9, cl 7. Where expenditure is involved, the Constitution prohibits the raising of taxes or the appropriation of money without legislative action by both branches of Congress, Mickey Edwards et al. v James Earl Carter 580 F 2d 1055, 1058–1059 (DCC 1978); see Paust (1996), pp. 60–61. In broad terms, the debt ceiling may be raised solely through an act of Congress, 31 USCA § 3101.
- 108.
Cf. supra, § 2.4.3.
- 109.
The Exchange Stabilization Fund was established in the 1930s—following the Wall Street Crash (1929)—to support the US currency in economic crises (31 USCA § 5302, with the memorandum of President Clinton dated 14 April 1995 as an appendix). ESF loan agreements are considered by the US Treasury as international agreements, Munk (2010), p. 228.
- 110.
The presidential action was triggered by the refusal of the Congress to provide approval for the appropriation of the required funds, Chapman (1996), pp. 166–168.
- 111.
The existence of those powers, confirmed by a number of judgments rendered by the Supreme Court [U.S. v Curtiss-Wright Export Corp, 57 SCt 216 (1936), Youngstown Sheet & Tube Co v Sawyer, 72 SCt 863 (1952) and Dames & Moore v. Regan, 101 SCt 2972 (1981)], is to be traced back to the powers held by the British Crown and subsequently passed to the federal government between the Declaration of Independence (1776) and the enactment of the Constitution (1787) so “that the investment of the federal government with the powers of external sovereignty did not depend upon the affirmative grants of the Constitution”, U.S. v Curtiss-Wright Export Corp 219–220.
- 112.
- 113.
- 114.
Nguyen Quoc Din et al. (2009), p. 171.
- 115.
Nguyen Quoc Din et al. (2009), p. 167.
- 116.
The construction of the provision is ambiguous and relies heavily upon the assumption that the words “ceux qui engagent” refer both to treaties and agreements. Still, it may be surprising that commercial relationships should necessarily be formalised in treaties, while territorial modifications could be encapsulated also in agreements; see Rousseau (1970), p. 105.
- 117.
Dhommeaux (1975), p. 833.
- 118.
The practice is well established. Under the Constitution of 1875, Godechot (1995), p. 331, Jèze (1927, 1929) drew a distinction between treaties that “intèressent les finances”, not requiring a parliamentary authorisation, and treaties that “engagent les finances”, requiring this authorisation. The first category comprises not only agreements for the reduction of the debts owed by France to other countries, e.g. the Agreements Bérenger-Mellon of 29 April 1926 (in Moulton and Pasvolsky 1929, pp. 363–374) and Cailleux-Churchill of 12 July 1926 (cmd 2692 and (1927-I) CXXVI State Papers 246), but also the agreements for the reduction of the debts owed to France, e.g. the Agreements Briand (May 1921) and Herriot (April 1924); see Jèze (1927), p. 95.
- 119.
See the text of the judgment in (1976) 103 JDI 405, with a comment by Ruzié.
- 120.
The subject matter of the case involved restructuring agreements, but the escamotage of the technical agreements may also extend to loan agreements, Favoreu (1977), pp. 111–112.
- 121.
- 122.
Monaco (1949), pp. 212–213, distinguished—along the same lines as the French practice—between treaties engaging public finances and treaties simply interesting them; the former, entailing a certain expense, would require a ratification process, while the latter would be exempted. This latter category would include treaties reducing credits or debts, as well as provisional financial agreements.
- 123.
This is the procedure followed in relation to agreements of commercial, economic, and financial matters, Marchisio (1975), p. 552. Nonetheless, this practice should be lawful solely in connection with financial engagements regarding sums already appropriated in the national budget, Monaco (1968), p. 666.
- 124.
- 125.
Palazzolo (2003), p. 209, highlights how provisional executive financial agreements come to engage public finances without parliamentary control.
- 126.
Contra, Lippolis (1989), pp. 202–205, in whose opinion this practice cannot qualify as a constitutional custom as it does not so much integrate but rather derogates or modifies the Constitution, so contrasting with Art 80; likewise, it does not correspond to a constitutional convention as it does not regulate the behaviour of constitutional organs in fields not entirely covered by constitutional norms, whereas Art 80 contains full regulation of the subject.
- 127.
GU No 49 of 28 February (1987), suppl ord No 1, 5.
- 128.
- 129.
Carillo-Batalla Lucas (1995), pp. 424–428.
- 130.
- 131.
This power can be delegated to the Executive Power solely for issues concerning administration and in cases of public emergency (Art 76). Under the former Constitution, the government, in order not to ask the Congress for consent to every single loan agreement, obtained from it a general delegation for the exercise of the powers in this field; Mairal (1987), pp. 149–152.
- 132.
See the text in Flanz (2004a).
- 133.
See Soares (1994), pp. 191–192.
- 134.
See the text in Flanz (2004b).
- 135.
The President of the Republic may exercise these powers even without a formal declaration of emergency; although the Executive is bound to submit to the Congress a report on the manner in which this power is exercised, this circumvents the requirement of Art 73(VIII). See Vasquez Pando (1988), pp. 177–178.
References
American Law Institute (1987) Restatement (third) of the foreign relations law of the United States. American Law Institute, St Paul
Ancel B (1990) The tronc commun doctrine: logics and experience in international arbitration. J Int’l Arb 7(3):63–72
Audit M (2002) Les Conventions transnationales entre personnes publiques. LGDJ, Paris
Barrett J (2011) The United Kingdom and parliamentary scrutiny of treaties: recent reforms. ICLQ 60:225–245
Batiffol H (1956) Sentence du Président Cassin du 10 June 1955: Affaire des cargaisons déroutées. Rev crit 45:300–304
Bernardini A (1979) Funzione del parlamento italiano nella conclusione di accordi internazionali. C int 577–599
Blackstone (Sir) W (MDCCLXXXIII) Commentaries upon the laws of England (first published 1765–1769). W Strahan and T Cadell, London
Bothe M, Brink J (1986) Public debt restructuring, the case for international economic co-operation. GYIL 29:86–110
Buchheit LC (1976) The use of nonviolent coercion: a study in legality under Article 2(4) of the charter of the United Nations. In: Lillich RB (ed) Economic coercion and the new international economic order. Michie & Co, Charlottesville, pp 41–69
Burdeau G (1981) Les accords conclus entre autorités administratives ou organismes publiques de pays differents. In: Mélanges offerts à Paul Reuter. Paris, Pedone, pp 103–126
Butler WE (2008) Treaty capacity and the Russian state corporation. AJIL 102:310–315
Byrd EM (1960) Treaties and executive agreements in the United States. Martinus Nijhoff, The Hague
Capotorti F (1971) L’extinction et la suspension des traités. Recueil des Cours 134:417–588
Carillo-Batalla Lucas V (1995) Conflicts of laws in international lending transactions – governing law and choice of forum. In: Carreau D, Shaw MN (sous dir de/eds) The external debt (La dette exterieure). Martinus Nijhoff, Dordrecht/Boston/London, pp 409–484
Cassese A (1979) Art 80. In: Branca G (a cura di) Commentario della Costituzione. Zanichelli, Bologna/Roma, pp 150–196
Cassese A (2005) International law, 2nd edn. OUP, Oxford
Chapman KD (1996) Separation of powers and unilateral executive action: the constitutionality of President Clinton’s Mexican loan initiative. Ga J Int’l & Comp L 26:163–185
Collins (Lord of Mapesbury) (gen ed) (2012) Dicey, Morris and Collins on the conflict of laws, vol 2, 15th edn. Sweet & Maxwell/Thomson Reuters, London
Corten O, Klein P (sous dir) (2006) Les Conventions de Vienne sur le droit des Traites. Commentaire article par article, 3 vols. Bruylant, Brussels
Curti Gialdino A (1972) La volontè des parties en droit international privé. Recueil des Cours 137:744–914
de La Rochere JD (1987) France. In: Jacobs FG, Roberts S (eds) The effects of treaties in domestic law. Sweet & Maxwell, London, pp 39–61
De Smith S, Brazier R (1998) Constitutional and administrative law, 8th edn. Penguin, London
Decaux E (1984) L’arrêt de la Chambre de la Cour Internationale de Justice sur l’affaire de la délimitation de la frontière maritime dans le Golfe du Maine. AFDI 30:304–339
Delaume GR (1962) The proper law of loans concluded by international persons: a restatement and a forecast. AJIL 56:63–87
Delaume GR (1967) Legal aspects of international lending and economic development financing. Oceana, Dobbs Ferry
Derains Y (1972) L’applicablité cumulative par l’arbitre des systèmes de conflit des lois interessées au litige. Rev arb 99–121
Dhommeaux J (1975) La conclusion des engagements internationaux en droit français: dix-sept ans de pratique. AFDI 21:815–857
Dicey AV (1959) Introduction to the study of the law of the Constitution (first published 1885), 10th edn. Macmillan, London
Din NQ, Daillier P, Forteau M, Pellet A (2009) Droit international public, 8me éd. LGDJ, Paris
Dupuy P-M (1977) La coopération régionale transfrontalière et le droit international. AFDI 23:837–860
Elias TO (1971) Problems concerning the validity of treaties. Recueil des Cours 134:333–416
Favoreu L (1977) Le Conseil constitutionnel et le droit International. AFDI 23:95–125
Fielder W (1995) Gentlemen’s agreements. In: Bernhardt E (ed) Encyclopedia, vol II. Elsevier, Amsterdam, p 546
Flanz GH (ed) (1999) Constitutions of the countries of the world, vol I. Argentina. Oceana, Dobbs Ferry
Flanz GH (ed) (2003) Constitutions of the countries of the world, vol IX. Italy. Oceana, Dobbs Ferry
Flanz GH (ed) (2004a) Constitutions of the countries of the world, vol III. Brazil. Oceana, Dobbs Ferry
Flanz GH (ed) (2004b) Constitutions of the countries of the world, vol XII. Mexico. Oceana, Dobbs Ferry
Folz H-E (1997) Loans, international. In: Bernhardt E (ed) Encyclopedia, vol III. Elsevier, Amsterdam, p 235
Folz H-E (2000) State debts. In: Bernhardt E (ed) Encyclopedia, vol IV. Elsevier, Amsterdam, p 608
Fouchard (1989) Note à Cour de Cassation 20 mars 1989 et 28 juin 1989. Rev arb 657–667
Fouchard P, Gaillard E, Goldman B (1996) Traité de l’arbitrage commercial international. Litec, Paris
Friedman W (1963) The uses of “General Principles” in the development of international law. AJIL 57:279–299
Gaja G (1987) Italy. In: Jacobs FG, Roberts S (eds) The effects of treaties in domestic law. Sweet & Maxwell, London, pp 87–108
Gautier P (1993) Essai sur la définition des traités entre Etats. Bruylant, Bruxelles
Gianviti F (1989) The International Monetary Fund and external debt. Recueil des Cours 215:205–286
Godechot J (par) (1995) Les Constitutions de la France depuis 1789. GF-Flammarion, Paris
Gündling L (1995) Foreign aid agreements. In: Bernhardt E (ed) Encyclopedia, vol II. Elsevier, Amsterdam, p 425
Helm-Busch F (1995) Executive agreements im US-amerikanischen Verfassungsrecht. Carl Heymans Verlag, Köln/Berlin/Bonn/München
Henkin L (1996) Foreign affairs and the United States Constitution, 2nd edn. Clarendon, Oxford
Higgins R (1987) United Kingdom. In: Jacobs FG, Roberts S (eds) The effects of treaties in domestic law. Sweet & Maxwell, London, pp 123–139
Hollander JH (1907) The convention of 1907 between the United States and the Dominican Republic. AJIL 1:287–296
Hyde CC (1947) International law, vol 2, 2nd edn. Little, Brown and Company, Boston
Jack (Sir) M (ed) (2011) Erskine May’s treatise on the law, privileges, proceedings and usages of parliament, 24 edn. Lexis-Nexis, London
Jackson JH (1987) United States. In: Jacobs FG, Roberts S (eds) The effects of treaties in domestic law. Sweet & Maxwell, London, pp 141–169
Jennings (Sir) R, Watts (Sir) A (gen eds) (1992) Oppenheim’s international law, vol 2, 9th edn. Longman, London/New York
Jessup PC (1956) Transnational law. Yale University Press, New Haven
Jèze G (1927) La ratification par le Parlement des Accords avec l’Angleterre et les Etats-Unis pour le règlement des Dettes interalliées n’est pas nécessaire. Rev dr pub 34:92–97
Jèze G (1929) Pouvoirs de gouvernment en matière de ratification des traités relatifs aux finances publiques. Rev dr pub 36:479–487
Jones JM (1944) International agreements other than “Inter-State Treaties” – modern developments. BYIL 21:111–122
Kelsen H (1949) General theory of law and state. Harvard University Press, Cambridge (Mass)
Kolb R (2003) Théorie du jus cogens international. RBDI 36:5–85
Kronfol Z (1976) The proper law of international loans. JWTL 10:129–144
Kuchenbecker DJ (1979) Agency-level executive agreements: a new era in U.S. treaty practice. Colum J Trans L 18:1–77
Lalive J-F (1964) Contracts between a state or a state agency and a foreign company. ICLQ 13:987–1011
Lalive J-F (1977) Un grand arbitrage pétrolier entre un Gouvernement et deux sociétés privées étrangéres. JDI 104:319–349
Lauterpacht H (1939) Is international law a part of the law of England? Trans Grot Soc’y 25:51–88
Lauterpacht E (1961) Contemporary practice of the United Kingdom in the field of international law. ICLQ 10:575–576
Lippolis V (1989) La costituzione italiana e la formazione dei trattati internazionali. Maggioli, Rimini
Mairal HA (1987) Issues arising from the legal and constitutional validity of the debt under debtor’s own law. In: Sassoon DM, Bradlow DD (eds) Judicial enforcement of international debt obligations. International Law Institute, Washington, pp 147–173
Maniruzzaman AFM (1993) Conflict of laws issues in international arbitration: practice and trends. Arb Int’l 9:371–403
Maniruzzaman AFM (1999) Choice of law and international contracts: some fundamental conflict of laws issues. J Int’l Arb 16(4):141–172
Maniruzzaman AFM (2001a) International development law as applicable law to economic development agreements: a prognostic view. Wis Int’l L J 20:1–56
Maniruzzaman AFM (2001b) State contracts in contemporary international law: monist versus dualist theory. EJIL 12:309–328
Mann FA (1944) The law governing state contracts. BYIL 21:11–33
Mann FA (1959) The proper law of contracts concluded by international persons. BYIL 35:34–57
Mann FA (1973) About the proper law of contracts between states. In: Mann FA (ed) Studies in international law. Clarendon, Oxford, pp 241–255
Mann FA (1990) The doctrine of Jus Cogens in international law. In: Mann FA (ed) Further studies in international law. Clarendon, Oxford, pp 84–102
Marchisio S (1975) Sulla competenza del Governo a stipulare in forma semplificata i trattati internazionali. RDI 533–556
Marchisio S (1989) Gli accordi bilaterali di cooperazione allo sviluppo. Cooperazione giuridica internazionale 19–34
Maresca A (1971) Il diritto dei trattati. Giuffrè, Milano
Mayer P (1982) Le mythe de l’ “ordre juridique de base” (ou Grundlegung). In: Fouchard P, Kahn P, Lyon-Caen A (éd par) Le droit des relations économiques internationales. Etudes offerts à Berthold Goldman. Litec, Paris, pp 199–216
McKendrick E (ed) (2010) Goode on commercial law, 4th edn. Penguin, London
McNair (Lord) (1957) The general principles of law recognized by civilized nations. BYIL 33:1–19
McNair (Lord) (1961) The law of treaties. Clarendon Press, Oxford
Monaco R (1949) I trattati internazionali e la nuova costituzione. Rass dir pub 197–217
Monaco R (1968) La ratifica dei trattati internazionali nel quadro costituzionale. RDI 641–668
Moulton HG, Pasvolsky L (1929) World war debt settlements. Macmillan, New York
Munk R (2010) Exchange stabilization fund loans to sovereign borrowers. L & Contemp Probs 73:215–240
Murphy JF (1975) Treaties and international agreements other than treaties: constitutional allocation of power and responsibility among the President, the House of Representatives, and the Senate. Kansas L Rev 23:221–248
Myers DJ (1957) The names and the scope of the treaties. AJIL 51:574–605
Napoletano G (1977) Violenza e trattati nel diritto internazionale. Giuffrè, Milano
O’Connell DP (1970) International law, vol 2, 2nd edn. Stevens & Sons Ltd, London
Olmstead CJ (1960) Economic development loan agreements. Part I. Calif L Rev 48:424–437
Orakhelashvili A (2006) Peremptory norms in international law. OUP, Oxford
Palazzolo E (2003) Ordinamento costituzionale e formazione dei trattati internazionali. Giuffrè, Milano
Park WW (1991) When the borrower and the banker are at odds: the interaction of judge and arbitrator in trans-border finance. Tulane L Rev 65:1323–1357
Paust JJ (1996) International law as law of the United States. Carolina Academic Press, Durham
Petiteville F (1995) La Coopération decentralisée. Le Collectivités locales dans la coopérations Nord-Sud. L’Harmattan, Paris
Reinisch A (1995a) State responsibility for debts. Böhlau Verlag, Wien/Köln/Weimar
Reinisch A (1995b) Debt restructuring and state responsibility issues. In: Carreau D, Shaw MN (sous dir de/eds) The external debt (La dette exterieure). Martinus Nijhoff, Dordrecht/Boston/London, pp 537–605
Riddell RC (2007) Does foreign aid work? OUP, Oxford
Rousseau C (1970) Droit international public. Tome I. Introduction et sources. Sirey, Paris
Rozakis CL (1976) The concept of Jus Cogens in the law of treaties. North Holland Publishing Company, Amsterdam/New York/Oxford
Rubino-Sammartano M (2001) International arbitration law and practice, 2nd rev edn. Kluwer, The Hague/London/Boston
Ruda JM (1994) The role of the Argentine Congress in the treaty-making process. In: Riesenfeld SA, Abbott FM (eds) Parliamentary participation in the making and operations of treaties. Martinus Nijhoff, Dordrecht/Boston/London, pp 177–185
Rudolf W (1995) Federal states. In: Bernhardt E (ed) Encyclopedia, vol II. Elsevier, Amsterdam, p 363
Salmon J (1958) Le Rôle des Organisations Internationales en matière de Prêts et Emprunts. Stevens & Sons Ltd, Londres
Schmidt L (1974) Legal protection of loans to developing country borrowers. Vand J Trans L 7:575–592
Schmitthoff CM (1982) Nature and evolution of the transnational law of commercial transactions. In: Horn N, Schmitthoff CM (eds) The transnational law of international commercial transactions. Kluwer, Deventer, pp 19–31
Schwarzenberger G (1957) International law, vol 1, 3rd edn. Stevens & Sons Ltd, London
Seerden R (1992) The public international law character of transfrontier agreements between decentralised authorities. LJIL 5:187–213
Seidl-Hohenveldern I (1975) The theory of quasi-international and partly international agreements. RBDI 11:567–570
Shaw MN (2008) International law, 6th edn. CUP, Cambridge
Sinclair I (1984) The Vienna Convention on the law of treaties, 2nd edn. Manchester University Press, Manchester
Soares GFS (1994) The treaty-making process under the 1988 Federal Constitution of Brazil. In: Riesenfeld SA, Abbott FM (eds) Parliamentary participation in the making and operations of treaties. Martinus Nijhoff, Dordrecht/Boston/London, pp 187–204
Stubbs W (ed) (1913) Select charters and other illustrations of English Constitutional history, 9th edn. Clarendon, Oxford
Templeman (Lord) (1994) The treaty-making and the British Parliament. In: Riesenfeld SA, Abbott FM (eds) Parliamentary participation in the making and operations of treaties. Martinus Nijhoff, Dordrecht/Boston/London, pp 153–176
Triepel H (1923) Les rapports entre le droit interne et le droit international. Recueil des Cours 1:73–122
van Hecke G (1964) Problèmes juridiques des emprunts internationaux, 2me éd. Bibliotheca Visseriana XVIII:1–316
Vasquez Pando FA (1988) The Mexican debt crisis in perspective: faulty legal structures and aftershocks. Texas Int’l L J 23:171–231
Verdross A (1964) The status of foreign private interests stemming from economic development agreements with arbitration clauses. In: Selected readings on protection by law of private foreign investment. M Bender & Co, Albany/San Francisco/New York, pp 117–137
Verhoeven J (1978–1979) Droit international des contrats et droit des gens. RBDI 14:209–230
Verhoeven J (1984) Traités ou contrats entre Etats? Sur les conflits des lois en droit des gens. JDI 111:5–36
Villiger ME (2009) Commentary on the 1969 Vienna Convention on the law of treaties. Martinus Nijhoff, Leiden/Boston
Weil P (1981) Droit international et contrats d’Etats. In: Mélanges offerts à Paul Reuter. Pedone, Paris, pp 549–582
Weinstein JL (1952) Exchange of notes. BYIL 29:205–226
Western TG (1838) Commentaries on the constitution and the laws of England. L Houghton and H Butterworth, London
Wildhaber L (1995) Executive agreements. In: Bernhardt E (ed) Encyclopedia, vol II. Elsevier, Amsterdam, p 312
Wright Q (1944) The United States and international agreements. AJIL 38:341–355
Wynne WH (1951) State insolvency and foreign bondholders, vol II: Selected case histories. Yale University Press, New Haven
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Megliani, M. (2015). Bilateral Debt. In: Sovereign Debt. Springer, Cham. https://doi.org/10.1007/978-3-319-08464-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-08464-0_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-08463-3
Online ISBN: 978-3-319-08464-0
eBook Packages: Humanities, Social Sciences and LawLaw and Criminology (R0)