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The Protection of Shareholders' Interests in the Light of the Barcelona Traction Case

Published online by Cambridge University Press:  28 March 2017

F. A. Mann
F. A. Mann*
Affiliation:
University of Bonn;Solicitor in London
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Extract

Professor Briggs’ summary of the decision of the International Court of Justice in the Case Concerning the Barcelona Traction, Light and Power Company Limited fairly recapitulates the principal reasons which led the Court to deny “the existence of any general rule of international law or of any special circumstances or considerations of equity which confer a right of diplomatic protection of national shareholders in a foreign company where the acts complained of were directed by authorities of a third state against the company rather than against any legal rights of the shareholders as such.”

Type
Research Article
Information
American Journal of International Law , Volume 67 , Issue 2 , April 1973 , pp. 259 - 274
Copyright
Copyright © American Society of International Law 1973

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References

1 65 AJIL 327 (1971).

2 [1970] ICJ Rep. 3.

3 [1964] ICJ Rep. 6, at 42.

4 Ibid. 46.

5 Id.

6 It is possible that the criticism of Secretary of State William P. Rogers to which Professor Briggs refers (supra note 1, at 331, 332) and which he describes as “ill-considered” was directed to the remarkable fact stated in the text rather than to the alleged delay for which the Court bore no responsibility.

7 Phoc. Amer. Soc. of Int. Law 65 AJIL (No. 4) 340–58 (1971). Significantly, Professor Lowenfeld (66 AJIL 803 (1972)) referring to Barcelona Traction, speaks of the “refusal of the International Court of Justice to get drawn into the issue” which, in the context, can only be intended to mean the act of state doctrine or confiscation. Is it possible that the learned author failed to realize that Barcelona Traction had nothing to do with either issue but was a case of bankruptcy and its effects?

8 National Trust Co. v. Ebro, 30 D.L.R. 326 (1954), quoted without disapproval by Dicey & Morris, Conflict of Laws, 481, 485, 496 (8th ed. 1967).

9 Separate Opinion, para. 71. See also Judge Ammoun at 320.

10 The translation is taken from the speech of Professor Uria (Oral Hearings 69/31 at 28 of the English text).

11 At 144 of the English or 614 of the French version of Vol. II of the Annexes to the Rejoinder.

12 At 146 of the English and 616 of the French version. Italics supplied.

13 This is an obvious misprint for “organs of the bankruptcy.” The French version makes this clear.

14 Verbatim Record 69/31 (June 3, 1969), at 27 (or 38 of the French version).

15 Verbatim Record 69/37 (June 11, 1969), at 72.

16 Verbatim Record 69/40 (June 16, 1969), at 17,19 (27,29 of the French version).

17 Part II, Chapter IV, para. 67, at 36 of the English text, 490 of the French text.

18 Ibid. 81 of the English or 527 of the French text.

19 Thus para. 27 (at 292 of the English or 274 of the French version) is headed: “According to Spanish Law, the Effects of the Adjudication in Bankruptcy of Barcelona Traction Extended to the Bankrupt Company and to its Assets, Wherever Those Assets Were.” A little later para. 29 states: “As far as Spanish courts are concerned, a bankrupt remains incapable wherever he may be and his acts of management and administration are null and void wherever they may have been carried out, and the dispossession of his property, which is the consequence of such an incapacity, also takes place wherever this property may be located.”

20 Verbatim Record 69/17 (May 8, 1969), at 14–16. And see the statement at 18, one among many made by numerous Counsel: “The bankruptcy order left Barcelona Traction without a cent outside Spain.”

21 Already at this point the Court might have asked whether vis-à-vis Spain this situation could fairly be said to subsist after February 12, 1948.

22 Paras. 42–54.

23 Paras. 65–68.

24 Paras. 69–84.

25 Paras. 85–91.

26 Paras. 92–102.

27 Para. 64.

28 The Court does not specify the conflicting interpretations and it is indeed difficult to identify them. There may have been differences in regard to immaterial details, but, broadly and in essence, there was no, nor could there be any, conflict since the facts were beyond dispute.

29 Para. 65.

30 See para. 17 of the judgment.

31 See, for instance, Verbatim Report 69/19 (May 12, 1969), at 15 et. seq., 60 et seq.

32 Verbatim Report 09/53 (July 7, 1969), at 65–67.

33 Verbatim Report 69/54 (July 8, 1969), at 2 and see the following pages.

34 Para. 66.

35 Para. 69.

36 Para. 71.

37 Para. 83.

38 Para. 71; for some further relevant facts see Judge Jessup at 191 passim.

39 It is submitted that this test was in fact reaffirmed by the Court. In para. 70, it is true, the Court expresses the somewhat obscurely formulated opinion “that there can be no analogy with the issues raised or the decision given” in Nottebohm’s case. The intention must have been to state that the facts in Barcelona Traction were such that the Nottebohm test was satisfied or, in other words, there was no room for raising the issues or reaching a decision similar to that in the earlier case. Had this not been the intention then there would have been no logical basis for para. 71 which lists the facts establishing “a close and permanent connection” with Canada, or for paras. 72–76 which prove that “the Canadian nationality of the Company had received general recognition.”

40 Judgment at 53, 54.

41 See Judge Jessup at 177.

42 For references, see Oppenheim (-Lauterpacht) 349 (8th ed. 1955); O’Connell, 2 International Law 1066 (2nd ed. 1970); or Dahm, 3 Völkerrecht 169 et seq. (1961).

43 Para. 86.

44 Para. 89.

45 Ibid.

46 See section 1 of the Belgian Submissions, judgment at 17.

47 This figure appears from para. 18 of the judgment The Belgian allegations appear from the Submissions at 22, 24, 25, 26, 29 of the judgment.

48 Para. 92.

49 For a few of the reasons why that holding was illegal, see Judge Sir Gerald Fitzmaurice’s Separate Opnion, paras. 67–72.

50 See in particular, Van Panhuys, H. F., the Role of Nationality in International Law 33, 165 et seq. (1959)Google Scholar. See also Makarov, , Allgemeine Lehren des Staatsangehörigkeitsrechts 12, 13, 17 (2nd ed. 1962)Google Scholar.