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Summary international business law 15/20!: PP + course notes
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International business lawSamenvatting
15/20
,Inhoud
1. General framework
1.1 Sources and players
1.1.1 General
A. International law versus international sources
Distinction:
o Rules of international origin
o Rules of international public law (ius gentium)
o International public law distinguished from:
- (national) public law (constitutional, administrative, criminal, tax, ...)
- private law including « international private law »
B. The international legal order (ius gentium)
Classic view: international legal order as legal order between states and/or international
organisations / dualism
Nuance 1:
o private organisations as players; access of private parties to international
organisations (incl. courts)
Nuance 2:
o direct effect of rules of international law in the internal (national) legal order (if
accepted by national constitutional law)
C. Sources of international public law
(Formal) sources of international public law (ius gentium):
o Treaties
o Customary law, general principles of law
o Decisions of international organisations
o Soft law
D. Treaties
parties: bilateral, multilateral
domain: commerce, war & peace, diplomatic relations, foreigners ...
legal form: traité-convention (mutual obligations) / traité-loi (introducing legal rules).
Some important types:
o * FNC (friendship navigation commerce); free trade zone or economic union,
customs, GATT and other WTO treaties ...
o * founding international organisations
o * investment treaties, state loans
o * judicial cooperation (e.g. extradition, evidence)
o * « demarcation » e.g. double taxation avoidance treaties; jurisdiction and
enforcement; conflict of law rules
o * unification of law; minimum standards (esp. human rights)
Unification of law
o Domain:
either limited to transnational relationships (international sales, international
transport, ...)
1
, or also applicable to domestic ones (e.g. bills of exchange)
o Sometimes different versions (creating confusion)
o How to interpret:
General rules in the 1969 Vienna Convention on the Law of Treaties*
In many conventions a clause demanding autonomous interpretation (eg art.
7 CISG, see Ch. 4)
usually no institution with the authority to give a uniform interpretation
exceptions: Benelux Court, Court of Justice EU, OHADA Common Court
(Abidjan), Caribbean Court of Justice (Caricom), etc.
exchange of information (Lugano Treaty, CLOUT and CISG Digest, …)
o Discussed more in detail in Ch. 4 (Sales). Tension between:
o need for common interpretation methods and common interpretation
Taking into account the national environment in which the rule has to
function / be applied.
* 116 ratifications; not signed by i.a. France, India; not ratified by i.a.
USA
Effects/sanctions
o Effects in the international legal order:
international liability of states
international jurisdiction, i.a.:
International Court of Justice (established by the UN Charter; jurisdiction in principle only based on
consent)
Permanent Court of Arbitration (established by the Hague Convention for the Pacific Settlement of
International Disputes 1899/1907, 119 members)
o Possible sanctions:
determined by treaty provisions (e.g. antidumping measures)
customary law: prohibition of boycott (unless an obligation to boycott is
imposed) (in practice business parties may be caught between conflicting
policies imposing boycott c.q. prohibiting to take part in it)
(rarely) binding dispute settlement, eg DSU in WTO
o Effects in the domestic / national legal order, before the domestic courts (so-called
« direct effect » or justiciability). Conditions determined by national
constitutional law, usually the following:
- either implemented or directly applicable by virtue of another rule (adde:
doctrine of (vertical) « direct effect » of EU-Directives)
- content of the rule must be sufficiently precise and unconditional to be
applied without further measures of implementation (self-executing) (NB.
This is a question which also arises within a legal order, whether a rule is self-
executing or not)
Examples: many rules in EU-Treaties habe direct effect in legal order
of the MS; idem obligations from the OHADA Treaty.
Not: GATT (C-149/96, Portugal v. Council; C-377/02 Van Parys)
Not: EU/UK TCA (art. Comprov 16)
E. International customary law
Conditions
o objective element: (widespread) general practice
o opinio iuris: accepted as law
Often disputed ! (see e.g. Chapter Investment law)
2
, Sometimes extended to « general principles of law » as a new kind of natural
law
Importance
o limited in the field of international economic law
o more important in other fields (rights & immunities of states; war & peace; human
rights (aspects of), …)
F. Decisions of international organisations
Sometimes binding:
o - Decisions concerning the internal operation of an IO
o - Binding force provided by treaty (see supra on the conditions of direct effect)
o - e.g. resolutions under Ch. VII UN Charter (Security council). According to art. 103
UN Charter priority over any other rule (thus even ECHR).
o e.g. decisions of EU institutions within their competence (as to direct effect,
instruments differ – regulations, directives, decisions, ...)
o see also WTO law
If not binding: = soft law
G. Soft law
Types:
o non-binding decisions of International Organisations
o non-binding treaties (gentleman’s agreements)
o codes of conduct; recommendations; ‘principles’
o Still softer: legislative guides, …
o The ILC (international law commission – expert group of the UN) has prepared many
drafts (treaties, articles, principles) – some have been enacted as treaties
(Possible) effects:
o not legally binding; but used for interpretation of binding instruments; political
consequences; moral effects; commercial pressure; de lege ferenda (model for future
rules), chosen as rules by the parties
H. The national legal order
National law includes international public law (and other international sources) as far as
« received » (conditions for reception and possible « direct effect » are determined by
national constitutional law)
National public law and private law may have sources of international origin (eg human
rights, uniform laws, ...)
Application of foreign national law in transnational relationships ?
Distinction between public law and private law < next slides
Effects of national foreign public law
o Public law includes: administrative law, tax law, criminal law, competition law and
other economic public law (e.g. import & export regulation, valuta exchange
regulation; supervision of financial institutions and markets, expropriation, ...)
o Starting point: each country applies only its own public law according to its own
criteria of applicability
o application is usually territorial, sometimes extraterritorial (e.g. taxes, competition,
…). In how far accepted by international law ?
o demarcation by treaties (e.g. double tax avoiding treaties; criminal jurisdiction, etc.)
3
, o Exceptions (states applying foreign public law): cooperation treaties in matters of
public law, e.g. assistance in enforcing criminal sanctions, collecting taxes,
extradition, …
I. The national international private law
Private law = property, contract (incl. labour), tort, restitution, company law, trust, intellectual
property, ….
o (NB. Types of rules: mainly ‘property rules’, ‘liability rules’, ‘governance rules’)
Application of private law in transnational relationships is determined by rules of « IPL ».
Basically 2 types of rules of IPL:
o conflict rules (national or uniform)
o substantive rules of IPL (mostly uniform rules) (often applied only after the conflict
rule)
See topic 2.
J. States
States as rulemakers
o State as legislator / rulemaker (government):
direct (national sources of national law)
creating international sources: concluding treaties, etc.
ratifying and implementing international sources (incl. uniform law)
founding of, and taking part in international organisations
o State as contracting party to conventions of international public law engaging itself in
obligations (e.g. commodity agreements, bilateral or multilateral trade
agreements, ...)
States as tradepartners
o Purpose: contracts to obtain or sell goods an services for use by the government of
by its citizens
o Methods: directly as contracting partner or through state companies or mixed
enterprises / joint venture (many gradations)
o Regulation of the international trade (see WTO law, e.g. public procurement opened
to foreign business)
o State as contracting party: corruption risk; international rules to fight corruption esp.
on the active side. I.a. UNCAC (UN Convention against corruption, in force 2005)
(since 2017 also Japan ratified), next slide
o State as contracting party: determine the applicable law(s)
o UNCAC (UN Convention against corruption, in force 2005)
Anti-Corruption Policy:
4
, UNCAC (UN Convention against corruption, in force 2005)
Ch. 2: preventive measures (i.a. anti-corruption bodies, recruitment
principles, codes of conduct for public officials, appropriate system of public
procurement, money-laundering prevention,
Ch. 3: criminalization (bribery of officials, diversion of property by public
official, trading in influence, abuse of functions, bribery in private sector,
laundering of proceeds of crime, obstruction of justice, etc.)
Ch. 3: law enforcement: prosecution; freezing seizure and confiscation,
compensation for damage, protection of witnesses etc., overcoming bank
secrecy, ...)
Ch. 4 international cooperation (extradition, legal assistance, etc.)
Ch. 5 Asset recovery; .....
o Companies are expected to take their responsibility when doing business with
partners that may engage in corrupt behaviour:
There is a OECD Convention on Combating Bribery of Foreign Public Officials
in International Business
Allowing small facilitation payments and payments allowed by the written
law of the country of the official
Prohibiting off-the-book accounts for business (art. 8)
Monitoring and ppeer reveiw system (art. 12)
2 Council of Europe Conventions (Civil Law, Criminal Law)
Other regional conventions (Inter American; African Union)
Anti-corruption provisions in FTA’s (e.g. CETA: no access to investment
tribunals if investment made i.a. through corruption)
Post-Cotonou Agreement 2021 (not ratified yet), art. 71
The ICC (international chamber of commerce) has a code of “Rules on
Combating Corruption” and proposes a model anti-corruption clause to be
inserted in contracts
The ISO has adopted
o Application of the UNCAC:
In the EU:
i.a. the EU Transparency Directive and Accounting Directive impose
disclosure of payments to authorities;
2003 Framework Decision on Combating corruption in the private sector, +
1997 Convention on the fight against corruption involving officials of the EC
or officials of MS of the EU, both to be replaced by a (Draft May 2023)
Directive on combating corruption
in the US:
Foreign Corrupt Practices Act (FCPA) (with a resource Guide issued by the US
Dept. Of Justice) with extensive extraterritorial effects; has led to huge
“deals” (Odebrecht S.A. paid 3,5 billion USD …).
in the UK:
UK Bribery Act (UKBA) with extensive extraterritorial effects (e.g. Glencore
case)
o Anti-Corruption Policy:
o Sector-specific initiatives, e.g. EITI (Extractive Industries Transparency Initiative) for
oil, gas and mineral resources;
5
, 31 countries are ‘compliant’ with the EITI Standard 2011, 18 more have
promised to comply
Assessment of compliance with 2016 standard
New 2019 standard
States as strategic actors: geoeconomics
o Economic instruments - such as investment abroad, export finance, and inversely
screening and possibly restricting foreign investment, restricting outward flow of data
-, are used for strategic reasons, such as access to resources, technological
advantage, national security in a wide sense ….
o Pure market and profit considerations (partially) set aside in favor if such strategic
interests
Sovereignty
o Starting point of the international public law:
sovereignty also regarding the economic order;
equality of rights under international law, also in relation to (participation in)
international trade
o Many international treaties provide benefits for « developing countries » (further
benefits for LLDC’s, least developed countries)
o Disputed « right » to development and « duty » of solidarity (soft law ?)
o Infra: immunities
1.1.2 State Immunities
Immunity of jurisdiction
o Immunity from jurisdiction for foreign states before national courts
Starting point: immunity, unless waived
Many restrictions (national law, treaties), see next slide.
Main sources:
In Europe: European Convention (CoE) on State Immunities Basel 1972 (only
8 ratifications, incl. Belgium, NL, D, UK)
In the UK : British State Immunities Act (SIA) 1976/1978
In the US: FSIA (Foreign Sovereign Immunities Act 1976, am. 2008, now 28 US
Code ch. 97)
Attempt at harmonisation: UN Convention on Jurisdictional immunities of
states and their property 2004 (not in force yet, 23 ratifications, but 30
required). But cited by the ECtHR (23 March 2010, Kudak/Lithuania (labour
case) and 29 June 2011 Sabeh El Leil) as customary law and recognised as
customary law in eg Belgian case law)
o Immunity from jurisdiction for foreign states
In general not contrary to art. 6 ECHR if there is no immunity before their
own domestic courts (see ECtHR in McElhinney 21 Nov 2011, in Fogarty, in
Al-Adsani, in Jones/UK 2 June 2014) (courts of canon law within the Roman-
catholic church also considered as domestic courts) or if there is another
reasonable way to protect one’s interests, which is normally the case if there
is an arbitration clause (Belgian cass. 27 Sep 2018 i.c. NATO)
Jurisdictional immunity also covers foreign torts (ICJ 3 feb 2012 Germany v.
Italy on acts committed by German soldiers in Italy in WW II: no jurisdiction
of Italian courts*), unless the tort is unrelated to the political order (Cass. 11
6
, June 1903) (comp. Art. 12 UN Convention: no immunity for personal injury or
damage to property by author acting in a foreign country)
Immunity covers also the « Holy See » (as a sovereign) (ECtHR 12 Oct 2021,
J.C./Belgium)
* But the Italian Constitutional Court refuses to abide and gives absolute
priority to jurisdictional protection over state immunity: Corte Costituzionale
238/2014.
o Main exceptions
In the USA - FSIA: with exceptions in § 1605 ff, mainly: claims based upon
commercial activity in the US, tort committed in the US, expropriation
elsewhere in violation of international law*, terrorism (§ 1605 B added in
2016)
* Does not cover alleged expropriation of one’s own nationals (SC 3 feb 2021
in Philipp / Germany, « Welfenschatz »)
UN Convention has exceptions for i.a. Commercial contracts (art. 10), Labour
contracts (but not for members of diplomatic missions, etc..) (art. 11), IP
rights art. 14) etc.
Overall Result: distinguish acta iure imperii / acta iure gestionis (doctrine
originally developed by Italian and Belgian courts, already Belgian Cass. 11
June 1903; also accepted by the ECJ in C-641/18, LG / Rina): not every ’act of
state’ is immune.
o Separate immunity for diplomatic missions (Vienna Diplomacy Convention art. 22 and
25 + general principle ne impediatur legatio). See critical however ECtHR 2010, Cudak
v. Lithuania (immunity Polish embassy personnel)
o Waiver, i.e. acceptance of jurisdiction, mostly not before domestic courts of foreign
state, but only for:
international courts
arbitration , see Ch. 8 and 12.
Form & Effect of waiver: art. 7 UN Convention
Enforcement immunity
o Immunity from enforcement for foreign states
o Starting point: immunity
o Waiver of immunity of jurisdiction is not yet a waiver of immunity of enforcement
against state property
Result: immunity for assets used by the public service (s. eg art. 55 New York
Arbitration Convention)
Immunity also prohibits imposing an astreinte (Cass.B. 27 June 2022?
Eswatini)
Cass.B. set immunity of international organisations aside in 3 cases because
of lack of effective remedy (art. 13 ECHR). Idem Cass.Fr.
Argentina debt cases, see next slides
Sovereign debt
o When issuing sovereign debt, often waiver of jurisdictional immunity; sometimes
counterbalanced by collective action clauses
o Enforcement remains complex
o In the Argentina debt cases, a US Court allowed post-judgment discovery of Argentinian assets in the US
held by third parties (banks). Compare the ‘alter ego’ doctrine assimilating certain entities to the state
7
, itself (eg possibly a central bank) (e.g. French Courts 2021 considering the Société Nationale des Pétroles
du Congo an alter ego of the State in one of the Commisimpex procedures).
o Belgian Court of Cass. (22 Nov. 2012) did not set aside immunity of the Argentinian embassy accounts;
idem French Court of Cass. 28 Sep 2011 (but reasoning changed in a more recent case Cass. 13 May
2015 Commisimpex/Congo and then changed again in Cass.(F) 10 Jan 2018, Commisimpex following a
new statute requiring a ‘specific’ waiver)
o States are not subject to insolvency proceedings. But there may be a need for
Sovereign debt restructuring processes (see UN Resolution 15 Sep 2015). A first step
is the G20 Common Framework for Debt Treatment (2020)
1.1.3 International organisations
Universal organisations (in principle open for all states)
o GATT, now WTO (1994), with a General Council and separate Councils for GATT, GATS,
TRIPS and a Dispute Settlement Body
o UNO, with General Assembly, Security council, EcoSoc
o Uncitral (international trade law): treaties and model laws
o Unctad (trade & development): granting developing countries access to the world
economy
o ILO: labour standards
o Unidroit: create uniform law (mostly private law)
o Hague conference: unification of IPL
Restricted organisations, i.a. OECD, OPEC, G10+>G20 (with Basel Committee) etc.
Free trade organisations
Types: free trade zone / customs union / common market / monetary union
Examples:
o EU
o EFTA, EEA, EU/UK TCA (provisionally in force Jan 1, 2021)
o USMCA (ex-NAFTA), CAFTA (Central America), Mercosur, Caricom
o ASEAN / SAARC (SAFTA);RCEP (Asean, China + 4 other)
o CETA (Canada – EU, provisionally in force*), Canada-UK TCA (provisionally in force)
o COMESA (East & Southern Africa), …
1.1.4 Players
K. NGO’s
Private organisations: not subjects of international public law, but governed by national law
(although sometimes involved in the activities of I.O.’s)
Some influential NGO’s relevant for international business law:
o ICC: for standard contracts and uniform rules; Court of arbitration (organising arbitral
tribunals)
o International Accounting Standards Board (IASB), setting the IFRS (International
Financial Reporting Standards)
o - World economic forum Davos
o Comité maritime international: maritime transport conventions
o Institut de droit international: tries to « codify » international public law, …..
o ICANN = California corporation (internet corporation for assigned names and
numbers), with a Governmental advisory committee (111 countries)
o SSO’s = Standard Setting Organisations (or SDO, Standard Development
Organisations), creating technical standards; see Ch. 7
8
, Questions on « lobbying » of the legislators by private players (NGO’s or Business) led to an
OECD recommendation on Principles for Transparency and Integrity in Lobbying (2010, under
revision)
L. Business
Legal forms: depends on national law
o natural persons / different forms of legal personality / unincorporated organisations
o groups consisting of multiple legal persons (treated as a whole for some rules:
compeititon, taxto some extent liability)
Rights and obligations of business:
o Will mostly be determined by the applicable national law (see Ch. 2 for the
determination of the applicable law)
o sometimes directly protected by international law, see esp. Investment protection in
Ch. 8.
o Sometimes able to create their own rules and make them nearly self-executing. Next
slide
o International soft law: UN Human Rights Council Guiding Principles on Business and
Human Rights 2011
Subject to insolvency proceedings (see Ch. 11)
a. Business as rule makers
Business ars rule-makers (making private law rules)
o within a single relationship, business designs contractual rules on the basis of
freedom of contract
o business customs as source of private law (but different conceptions of customs and
usages in different legal systems; see also Ch. 4 and 5); standard contracts sometimes
governing whole industry (e.g. ISDA, Liverpool Cotton Association, etc.)
o Further reaching influence: ‘private governance’ in supply chains, not merely
regulating rights and obligations but organising ‘governance’ of the supply chain, in
addition to imposing stanards (eg sustainable development standards)
o Another development in a digitalised economy is the influence of algorithms creating
decisions, either precontractually (determining price, other conditions, etc… in an
automated way) or for the enforcement of a contract (”smart contracts”, often using
blockchain technology)
o See e.g. certain private payments systems in Ch. 9
States try to get grip over supply chains, either by regulating behaviour directly or by
introducing « governance » rules (e.g. obliging to negotiate collectively with stakeholders)
b. Obligations
Business organisations have many general obligations, incl.
o prohibition of unfair commercial practices (some of them are discussed in Ch. 4 /5); rules on advertising
and marketing (see also ICC Code of Advertising and Marketing Communication) (dumping is also an
unfiar practice, see WTO law)
o prohibition of agreements and practices restricting competition
o prohibition of corruption; in some countries even an obligation to prevent bribery (UK Bribery Act art. 7)
o obligation of financial information (accounts, …)
o obligation of non-financial information (big enterprises): EU Directive 2013/34 (as amended Dir
2014/95)
o related transparency obligations eg in UK duty for big companies to report on payment practices (since
2017)
9
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