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Published online by Cambridge University Press: 09 March 2016
The 1960’s have been designated by the General Assembly as “United Nations Development Decade.” The main economic objective for the decade is the creation of conditions in which the national incomes of the developing countries will increase by 5 per cent yearly by 1970, and will continue to increase at the same rate thereafter. The means by which this objective is being pursued are many; among others are national planning, technical training and capital assistance, by both multilateral and bilateral agencies. Successful as these public sector assistance schemes have been, however, it is now recognized that an increasingly large share of responsibility must be borne by the private sector of the economies of the developed nations by means of overseas investment and international trade.
1 U.N. Doc. E/3613; The United Nations Development Decade — Proposals for Action, foreword by U Thant, at vi.
2 In his book The Underprivileged Nations (Eng. ed., Boston, Beacon Press, 1963), Pierre Moussa states at pp. 103–04: “There are two advantages in using private investments from abroad. Quantitatively, it makes for a higher total volume of investment, supposing the nation’s public effort and public assistance received from abroad to be at a given level. Qualitatively, when capital from abroad is invested directly it is usually accompanied by human assets which put the material equipment to its best use. For whilst there is nothing absurd in the idea of publicly run industries, in the West it is private industry which provides a reservoir of men of the calibre to manage an industrial undertaking.”
3 “Reason tells them today that isolation is impossible in a world so unified in travel and communication that it is physically little more than a space ship carrying the human race through infinity”: U.N. Doc. E/4071, The United Nations Development Decade at Mid-Point; An Appraisal by the Secretary-General. The same metaphor was employed by Ward, Barbara: “In the last few decades, mankind has been overcome by the most fateful change in its entire history. Modern science and technology have created so close a network of communication, transport, economic interdependence — and potential nuclear destruction — that planet earth, on its journey through infinity, has acquired the intimacy, the fellowship, and the vulnerability of a spaceship”: Spaceship Earth vii (New York, Columbia University Press, 1966).Google Scholar
4 In response to a survey questionnaire on what investors expected, the Dour-din Institute received the following replies: anonymity – 4%, interest – 33%, liquidity – 24%, security – 59%. See Moussa, op. cit. supra note 2, at 119.
5 A recent study of the economic importance of tourism revealed that “between 1950 and 1963 national incomes throughout the world grew by an annual average of 6 per cent while world tourist receipts increased by 12 per cent”: David Davis, H., “Investing in Tourism”, IV Finance and Development 1, 8 (Quarterly Publication of The International Monetary Fund).Google Scholar
6 U.N. Doc. E/CONF. 46/141, Vol. 1, at 10.
7 (1965) IV C.I.I.A. Report on Canadian External Relations, 11.
8 “Populorum Progressio”, dated March 28, 1967, para. 87 (New York Times, March 29, 1967, at 25, col. 6).
9 Because the term “international” suggests the relations of nations and not of the individuals and corporations of which a state is comprised, a number of writers have suggested the use of the word “transnational”: see, for example, Jessup, Philip C., Transnational Law (New Haven, Yale University Press, 1956)Google Scholar and his examination of the usage of that adjective at p. 2.
10 Export Credits Insurance Act, R.S.C. 1952, c. 105, and amendments thereto.
11 Sec. 620(e) of The Foreign Assistance Act, 76 Stat. 255, 22 U.S.C.A. 2370. For a discussion of the 1962 “Hickenlooper Amendment” to the United States Foreign Assistance Act, see Lillich, Richard B., The Protection of Foreign Investment 117–46 (Syracuse, Syracuse University Press, 1965).Google Scholar
12 (1965) 5 Int’l Legal Materials 636.
13 (1964) 4 Int’l Legal Materials 532.
14 See, for example, Beardwood, Alice, Alien Merchants in England, 1350 to 1377; Their Legal and Economic Position (Cambridge, Mass., The Mediaeval Academy, 1931).Google Scholar
15 Kinnane, C. H., Anglo-American Law 191 (Indianapolis, Bobbs Merrill, 2nd ed. 1952).Google Scholar
16 For a discussion of the legal aspects of the “Alien Question,” see Head, Ivan L., “The Stranger in our Midst,” (1964) 2 Canadian Yearbook of International Law 107, 113-25.Google Scholar
17 5 B.D.I.L. 303.
18 Duplex et reciprocum ligamen. See Calvin’s Case, (1608) 2 St. Tr. 559.
19 (1929) 23 Am. J. Int’l L., Special Supp., 133.
20 Res. 799 (VIII), Dec. 7, 1953. U.N. Doc. A/2630, at 52.
21 (1961) 55 Am. J. Int’l L. 545, 548. See also Borchard, Edwin M., The Diplomatic Protection of Citizens Abroad (New York, 1915)Google Scholar; Eagleton, Clyde, The Responsibility of States in International Law (New York, N.Y.U. Press, 1928)Google Scholar; Dunn, Frederick S., The Protection of Nationals (Baltimore, The Johns Hopkins Press, 1932)Google Scholar; Freeman, Alwyn V., The International Responsibility of States for Denial of Justice (London, Longman’s, Green & Co., 1938).Google Scholar
23 O’Connell, D. P., International Law, Vol. II, 1019 (London, Stevens, 1965)Google Scholar, and see the authorities there cited.
23 International Conciliation, No. 345, at 529–30.
24 112 Parl. Deb. (3rd ser.) 387 (1850).
25 Further evidence of the difference of opinion concerning “national treatment” may be found in the discussion of the effect of the “Calvo Clause” (in which a foreign national agrees, in consideration of the grant to him of a concession, to relinquish his right to seek the protective intervention of his own government in the event of any future dispute) in the decision of the General Claims Commission in the North American Dredging Co. Case (United States v. Mexico) 4 U.N.R.I.A.A. 26.
26 2 U.N.R.I.A.A. 615.
27 Ibid., 645.
28 Banco Nacional de Cuba v. Sabbatino, (1964) 376 U.S. 398, 422–33.
29 “A state is not required to make reparation on a claim presented on behalf of an alien injured by conduct wrongful under international law and attri-butable to that state, if the alien has not exhausted the remedies made available by the state…”: Restatement, 2d, Foreign Relations Law of the United States, s 206 (1).
“The defendant State has the right to demand that full advantage shall have been taken of all local remedies before the matters in dispute are taken up on the international level by the State of which the persons alleged to have been injured are nationals”: Ambatielos Claim (Greece v. United Kingdom), [1956] I.L.R. 306, 334; 12 U.N.R.I.A.A. 83, 119.
30 Brierly, J. L., The Law of Nations 281 (Oxford, 6th ed. Waldock, 1963).Google Scholar
31 [1939] P.C.I.J. ser. A/B, No. 76, at 47.
32 See, for example, Fawcett, J. E. S., “The Exhaustion of Local Remedies: Substance or Procedure?”, (1954) 31 Brit. Y.B. Int’l L. 452 Google Scholar. Professors Sohn and Baxter stated in the introduction to their draft Convention: “The exhaustion of local remedies is considered by the draft to be a matter of procedure or of jurisdiction rather than of substance; it follows in this respect the Panevezys — Saldutiskis Railway Case”: supra note 21 at 546. It can be argued as well that an injury occasioned to an alien without state complicity is purely a municipal wrong until such time as a denial of justice is displayed through the exhaustion — without relief — of local remedies, whereas an injury occasioned through a direct involvement of the state is international from the outset and requires only the exhaustion of local remedies in order to elevate it from the jurisdiction of the municipal courts to that of an international court. In the first instance the substantive theory prevails; in the second, the procedural theory.
33 Op. cit. supra note 22, at 1139.
34 Interhandel Case (Switzerland v. U.S.A.), [1959] I.C.J. Rep. 6, 27. And see the remarks of Judge Cordova in his separate opinion, at p. 46: “A State may not even exercise its diplomatic protection, and much less resort to any kind of international procedure of redress unless its subject has previously exhausted the legal remedies offered him by the State of whose action he complains.”
35 Op. cit. supra note 22, at 1024.
36 Ambatielos Claim (Greece v. United Kingdom), [1956] I.L.R. 306, 336; 12 U.N.R.I.A.A. 83, 120. And see Lipstein, Kurt, “The Ambatielos Case Last Phase,” (1957) 6 Int’l and Comp. L.Q. 643 Google Scholar; Amerasinghe, C. F., “The Exhaustion of Procedural Remedies in the Same Court,” (1963) 12 Int’l and Comp. L.Q. 1285 Google Scholar; Bagge, Algot, “Intervention on the Ground of Damage Caused to Nationals, with Particular Reference to Exhaustion of Local Remedies and the Rights of Shareholders,” (1958) 34 Brit. Y.B. Int’l L. :62.Google Scholar
37 But not for extra-legal remedies or remedies as of grace: Finnish Ships Arbitration (Finland v. United Kingdom), 3 U.N.R.I.A.A. 1479, and see Fachiri, A. P., “The Local Remedies Rule in the Light of the Finnish Ships Arbitration,” (1936) 17 Brit. Y.B. Int’l L. 19.Google Scholar
38 Electricity Co. of Sofia and Bulgaria, [1939] P.C.I.J. ser. A/B, No. 77.
39 Norwegian Loans Case (France v. Norway), [1957] I.C.J. Rep. 9, per the separate opinion of Judge Lauterpacht at p. 39.
40 “… the Court must attach decisive importance to the fact that the laws of the United States make available to interested persons who consider that they have been deprived of their rights by measures taken in pursuance of the Trading with the Enemy Act, remedies for the defence of their rights against the Executive”: Interhandel Case, supra note 34, at 27.
41 [1956] I.L.R. 306; 12 U.N.R.I.A.A. 83.
42 12 U.N.R.I.A.A. 83, 125
43 [1956] I.L.R. 306, 338; 12 U.N.R.I.A.A. 83, 121.
44 Meron, Theodor, “The Incidence of the Rule of Exhaustion of Local Remedies,” (1959) 35 Brit. Y.B. Int’l L. 83, 96.Google Scholar
45 As in the Ambatielos Claim, supra note 41, or in the Norwegian Loans Case, supra note 39.
46 An Israeli airliner was shot down as it penetrated Bulgarian airspace on a flight from Vienna, Austria, to Lod, Israel: Aerial Incident of July 37, 1955 (Israel v. Bulgaria), I.C.J. Pleadings, 408 (1957). For a full discussion of the “link” aspect of the exhaustion of local remedies rule, see Meron, supra note 44.
47 See, for example, Phosphates in Morocco (Preliminary Objections), [1938] P.C.I.J. ser. A/B, No. 74.
48 In a separate opinion, Judge Azevedo stated in the Reparations for Injuries Case, [1949] I.C.J. Rep. 174, 195: “In the case of officials or experts appointed directly by the Organization, regardless of nationality, the Organization will have a priority and may make a claim without having to put forward a denial of justice, or even to show that domestic remedies have been exhausted.”
49 3 U.N.R.I.A.A. 1479, 1503.
50 [1939] P.C.I.J. ser. A/B, No. 76, at 19.
51 Supra note 41, at 334–35.
52 For further discussions of the application of the rule, see Borchard, Edwin M., “The Local Remedy Rule,” (1934) 28 Am. J. Int’l L. 729 Google Scholar; Briggs, H. W., “The Local Remedies Rule,” (1956) 50 Am. J. Int’l L. 921 Google Scholar; and two papers, “The Effectiveness of the Local Remedies Rule Today” by Lillich, Richard B. and “Increasing the Use of Local Remedies” by Mummery, David R., in (1964) Am. Soc. Int’l L., Proceedings, 101 and 107Google Scholar. In the Interhandel Case, the International Court of Justice said that “the grounds on which the rule of the exhaustion of local remedies is based are the same, whether in the case of an international court, arbitral tribunal, or conciliation commission”: supra note 34, at 29.
53 Supra note 39, at 39.
54 For a discussion of these instances, see Rosenne, Shabtai, The Law and Practice of the International Court, Vol. 1, at 460 (Leyden, Sijthoff, 1965)Google Scholar. A discussion of the techniques employed by the two Courts in this respect may also be found in Shihata, Ibrahim F. I., The Power of the International Court to Determine its Own Jurisdiction 243–53 (The Hague, Nijhoff, 1965).Google Scholar
55 For a detailed analysis of the functioning of these commissions, see Lillich, Richard B., “International Claims: A Comparative Study of United Kingdom and United States Practice,” (1964) 17 Current Legal Problems 157 Google Scholar; and Lillich, , International Claims: Their Adjudication by National Commissions (Syracuse, Syracuse University Press, 1962)Google Scholar. For a procedural study, see Lillich, , “The Procedure of Claims,” in Head, Ivan L. (ed.), This “Fire-Proof House” 101 (New York, Oceana, 1967).Google Scholar
56 See Wang, Erik B., “Nationality of Claims and Diplomatic Intervention,” (1965) 43 Can. Bar Rev. 136.Google Scholar
57 Popularly referred to as the Hickenlooper amendment, supra note 11.
58 See Falk, Richard A., The Role of Domestic Courts in the International Legal Order (Syracuse, Syracuse University Press, 1964).Google Scholar
59 Participating are Frank G. Dawson, Esq., of the New York Bar, as Research Director, and Professor Peter E. Herzog of the Syracuse University College of Law and the writer, as Research Fellows.
60 Supra note 19, at 173.
61 Hackworth, V, Digest of International Law 529.Google Scholar
63 See supra note 13. The I.R.B.D. Convention is discussed by Schwebel, Stephen M. and Wetter, J. Gillis in “Arbitration and the Exhaustion of Local Remedies,” (1966) 60 Am. J. Int’l L. 484 CrossRefGoogle Scholar. See also the Final Act and Convention of the United Nations Conference on International Commercial Arbitration, U.N. Doc. E/CONF. a6/8/Rev. 1 and U.N. Doc. E/CONF. 26/9/Rev. 1.
63 Even for foreign-based military forces this technique is now disappearing in favour of recognition of local jurisdiction in many instances, as illustrated in the provisions contained in the various “Status of Forces” agreements. And see Freeman, Ahvyn V., “Responsibility of States for Unlawful Acts of their Armed Forces,” (1955) 88 Recueil des Cours, Vol. II, at 267.Google Scholar
64 Preamble to the Charter of the United Nations.
