2.01  International tribunals are empowered to decide whether a state has breached certain obligations under international law. For example, tribunals established under investment treaties have jurisdiction to determine if there has been a breach of obligations in the treaty, such as the obligation to provide certain foreign investors fair and equitable treatment. The European Court of Human Rights (ECtHR) decides if the challenged actions of European countries are consistent with the obligations in the European Convention on Human Rights (ECHR). The International Court of Justice (ICJ) has broad powers to determine breaches of obligations in treaties as well as those arising under customary international law and general principles of law.

2.02  But all international obligations enter into force at a particular time. Generally, treaty obligations are created by the entry into force of the treaty and, while under customary international law and general principles of law the time of the entry into force of obligations is less precise, there is still a period when, for example, custom is insufficiently developed to have generated an obligation.

2.03  What are tribunals’ powers over acts before the entry into force of the obligation that is alleged to be breached?

(p. 6) 2.04  Some states have expressly addressed this issue when conferring jurisdiction on a tribunal. For example, some states limited the ECtHR to addressing ‘violations’ occurring after the ECHR entered into force.¹ However, such declarations are rare. This is perhaps because tribunals have broadly agreed that general principles of law, and possibly customary international law, prevent them from finding a breach of an obligation through an act before the obligation entered into force.

2.05  Section B of this chapter introduces the general principle of law, and possibly rule of customary international law, that a state act cannot breach an international obligation unless the state is bound by that obligation at the time of the act, before section C explains the sub-rule applying to acts before the obligation enters into force. Section D examines the ability of states to override this sub-rule.

2.06  In the sixth century, Corpus Juris Civilis, the body of civil law issued by Emperor Justinian, stated:

Whenever an investigation is made into an offense, it is accepted that the accused should suffer, not the punishment which his status allows at the time when sentence is passed on him but that which he would have undergone if he had been sentenced at the time he committed the offense.²

2.07  Fourteen centuries later, the International Law Commission reported that ‘the principle that an individual cannot be held criminally liable for an act which was not prohibited at the time when he committed it (nullum crimen sine lege praevia) is a general rule of all legal systems’. It went on to note that: ‘[i]‌n matters of civil liability the principle in question is less often expressly stated, but there is no doubt that here too it is the general rule’.³

(p. 7) 2.08  The principle that an accused is judged by the law in force when the act was committed is now codified in almost every major human rights treaty⁴ and in Article 13 of the International Law Commission’s Articles on State Responsibility for Internationally Wrongful Acts, which says that: ‘[a]‌n act of a State does not constitute a breach of an international obligation unless the State is bound by the obligation in question at the time the act occurs’.⁵

2.09  This rule can be divided into two sub-rules—an obligation can be breached neither by an act before it entered into force, nor by an act after it is no longer in force.

2.10  The second sub-rule has seldom been applied by tribunals, perhaps because states seem to discard fewer international obligations than they acquire. A rare example is the nineteenth-century decision of the United States–Great Britain Mixed Commission in the Lawrence case.

2.11  To understand the decision in Lawrence, it is helpful first to review the earlier decision of the Commission in the case of the Enterprize.

2.12  The ship Enterprize sailed from the US state of Virginia in February 1835 heading for the state of South Carolina. It was blown off course and stopped to gather more provisions in the British colony of Bermuda, where local officers boarded the ship and freed its cargo of slaves. The disgruntled owners convinced the US to pursue a claim against Great Britain for breach of the international law obligation not to interfere with property. Umpire Bates agreed with the Americans, holding that: ‘[a]‌t the time of the transaction on which this claim is founded, slavery … [was not] contrary to the law of nations, and the Enterprize was as much entitled to protection as though her cargo consisted of any other description of property’.⁶

(p. 8) 2.13  Thirteen years after the Enterprize’s slaves were freed in Bermuda, another ship, the Lawrence, sailed from Havana towards Cabenda in Africa with a small cargo of goods such as rum. It started to leak and stopped at Freetown in the British colony of Sierra Leone. Local officials confiscated the ship after concluding that the ship’s small cargo and the construction of its hold meant that it was picking up slaves. The US again sought compensation from Great Britain but this time Umpire Bates rejected the claim, evidently influenced by the change in international law since the slaves of the Enterprize were confiscated:

2.14  Thus, the umpire concluded that at the time of the confiscation of the Lawrence the British could not have breached an international law obligation not to interfere with property because that obligation as it applied to property used in the slave trade had expired.

2.15  The Lawrence case is a rare example of a tribunal finding that an act did not breach an obligation because the obligation was no longer in force. There is also little commentary on the issue but the Special Rapporteur to the ILC project on the Law of Treaties, Sir Humphrey Waldock, did state that: ‘[a]‌ fact or matter which occurs or arises after the termination of a treaty is not brought within its provisions merely because it is a recurrence or continuation of a fact or matter which occurred or arose during the period of the treaty and was then governed by its provisions’.⁸ He also noted that: ‘a treaty is not to be considered as having any effects with regard to facts or matters occurring or arising after its termination, unless a contrary intention is expressed in the treaty or is clearly to be implied from its terms’.⁹

2.16  The intention to apply treaty obligations beyond the date of the treaty’s termination, to which Sir Humphrey referred, is expressed in several investment treaties. They contain provisions, sometimes referred to as ‘survival’ or ‘grandfathering’ clauses,¹⁰ stating that the treaties’ obligations remain in force for a number of years for those investments existing at the time of the treaty’s (p. 9) ‘termination’.¹¹ Such a provision was considered by the Eastern Sugar v Czech Republic tribunal, which held that the respondent could breach obligations in the Czech Republic–Netherlands investment treaty after its ‘termination’ because the treaty stated that the obligations would remain in force for fifteen years for investments existing at that date.¹²

2.17  While a tribunal cannot find a breach of an obligation through an act after its expiry, unless directed otherwise, this does not mean that after this date the tribunal cannot find a breach through an act before. This was confirmed by the Rainbow Warrior decision.

2.18  The Rainbow Warrior was the Greenpeace ship that planned to disrupt France’s 1985 test of a nuclear bomb in the Pacific Ocean. While the ship was in Auckland before sailing to Moruroa Atoll, where the test would take place, agents of the French foreign intelligence services detonated mines they had attached to its hull. After the ship sank and a Dutch photographer drowned, New Zealand arrested and jailed two of the French agents responsible. The governments then signed an agreement under which the two agents were moved to a French military base on a Pacific island where they were to spend three years under detention. When France returned the agents home early, New Zealand alleged a breach of the agreement but France responded that, by the time the claim was considered by an arbitration tribunal, the agreement between the countries had expired. The tribunal accepted this argument but held that this expiry did not affect France’s responsibility for not returning the agents to the island to finish their three-year detention while the agreement was still in force.¹³ The tribunal drew (p. 10) from Article 70(1) of the Vienna Convention on the Law of Treaties, which states that:

2.19  This principle is also expressed in the commentary to Article 13 of the International Law Commission’s Articles on State Responsibility for Internationally Wrongful Acts, which states that: ‘once responsibility has accrued as a result of an internationally wrongful act, it is not affected by the subsequent termination of the obligation, whether as a result of the termination of the treaty which has been breached or of a change in international law’.¹⁵

2.20  While the sub-rule in Article 13 of the Articles on State Responsibility that a state cannot breach an obligation through an act after the obligation has expired, discussed above, has not been widely considered, several tribunals and commentators have addressed the converse situation, ie the application of Article 13 and the rule it embodies to acts before the entry into force of the obligation, as explained in the following section.

2.21  The rule that a tribunal cannot find a breach of an obligation through an act before an obligation’s entry into force, commonly known as the ‘rule against retroactivity’ or the ‘retroactivity principle’, is independently grounded in domestic law, including the French Declaration of the Rights of Man and Citizen of 1789, which stated that: ‘no one may be punished except by virtue of a law passed and promulgated prior to the crime and applied in due legal form’.¹⁶ By 1892, Lord Justice Lindley had recognized it as a ‘fundamental rule of English law that no statute should be construed so as to have a retrospective operation unless its language is such as plainly to require such a (p. 11) construction’.¹⁷ The principle is now broadly recognized as a general principle of law and possibly also a rule of customary international law.¹⁸

2.22  The application to treaties of the rule that a tribunal cannot find a breach of an obligation through an act undertaken before the obligation entered into force, unless directed otherwise, is captured by Article 28 of the Vienna Convention on the Law of Treaties, which states:

2.23  The International Law Commission summarized the purposes behind the rule against retroactivity captured in Article 28 as follows:

2.24  The rule against retroactivity has been endorsed by many international tribunals,²¹ including the World Trade Organization Appellate Body,²² the (p. 12) Inter-American Court of Human Rights,²³ the Iran-US Claims Tribunal,²⁴ the Appellate Division of the East African Court of Justice,²⁵ and investment treaty tribunals.²⁶ Tribunals have generally held that the rule prevented them from taking jurisdiction over acts before the obligation entered into force²⁷ but some have indicated that the rule defined the temporal scope of the obligation so that a claim that challenges an act before the obligation entered into force is inadmissible.²⁸

2.25  Several tribunals have applied the rule against retroactivity to decline jurisdiction or otherwise reject claims alleging a breach of an obligation through an act before the obligation came into force. For example, the ECtHR and the European Commission of Human Rights have repeatedly held that they could not hear applications against Germany concerning the actions of the Nazi regime during the Second World War. In one such instance the Commission said:

2.26  More recently, the rule against retroactivity was applied by several investment treaty tribunals, including that in Pey Casado, which found that Chile could not breach the 1994 Chile–Spain bilateral investment treaty through the alleged expropriation of shares in a company immediately following General Augusto Pinochet’s 1973 coup d’état.³⁰ Similarly, the Tradex Hellas tribunal had no jurisdiction to hear Tradex Hellas’ claim that Albania expropriated its investment in breach of the Albania–Greece treaty because the challenged act occurred before the treaty came into force.³¹ Also, in Mondev, the rule against retroactivity was applied to find that the alleged interference with a Boston development that occurred before the NAFTA entered into force could not breach the treaty.³²

2.27  Despite the broad acceptance and frequent application of the rule against retroactivity, there are occasions when it may have been overlooked. Without mentioning the rule, several tribunals have found a breach of an obligation through an act that occurred before the obligation entered into force. The tribunal that heard the Maffezini dispute found that Spain breached its investment treaty with Argentina, which came into force on 28 September 1992, by transferring funds from the claimant’s bank account without his permission seven months earlier.³³ The Middle East Cement tribunal found a breach of the Egypt–Greece investment treaty through a decree prohibiting the import of cement that was issued four years before the treaty entered into (p. 14) force.³⁴ The African Commission on Human and Peoples’ Rights decided that a 1992 Ethiopian proclamation breached its obligation in the African Charter on Human and Peoples’ Rights that entered into force six years later.³⁵ In another case the African Commission acknowledged the rule against retroactivity³⁶ but then appeared to ignore it when finding a breach of the Charter through court decisions before the Charter entered into force for Mauritania on 21 October 1986.³⁷

2.28  It has been suggested that the rule against retroactivity was also overlooked by the ICJ in the dispute between Bosnia-Herzegovina and Yugoslavia over the application of the Convention on the Prevention and Punishment of the Crime of Genocide. Bosnia-Herzegovina alleged that Yugoslavia breached the Convention through its actions beginning in April 1992.³⁸ Yugoslavia responded that the ICJ had no jurisdiction since the Convention only entered into force between the two countries on 29 December 1992—several months after the challenged measures. The Court dismissed the objection, stating that: ‘[i]‌n this regard, the Court will confine itself to the observation that the Genocide Convention … does not contain any clause the object or effect of which is to limit in such manner the scope of its jurisdiction ratione temporis …’.³⁹ Judge Kreća dissented from this conclusion because he considered it ignored the rule against retroactivity.⁴⁰

(p. 15) 2.29  In their article on this decision, Adrian Chua and Rohan Hardcastle note that, ‘[o]‌n its face’, the majority decision overlooks the rule.⁴¹ However, they argue that the face of the decision is misleading⁴² because the Genocide Convention is not the only source of Yugoslavia’s obligation to prevent genocide—before the Convention entered into force Yugoslavia was obliged under customary international law to prevent genocide.⁴³ Thus, according to Chua and Hardcastle, the issue before the ICJ was not the retroactive application of the obligations in the Genocide Convention so much as the retroactive application of the dispute settlement provision,⁴⁴ an issue addressed in Chapter 3 below.

2.30  Article 28 of the Vienna Convention on the Law of Treaties, discussed above, states that ‘[u]‌nless a different intention appears from the treaty or is otherwise established’, the treaty will not bind a party in relation to acts that occur before it comes into force. In its commentary to the article, the International Law Commission reinforced that: ‘[t]here is nothing to prevent the parties from giving a treaty, or some of its provisions, retroactive effects if they think fit’.⁴⁵ Therefore, there is no doubting the validity of, for example, Belgium’s Double Taxation Agreement with France, which was signed on 10 March 1964, and which expressly applies to income earned from 1960.⁴⁶

(p. 16) 2.31  There has been more doubt over other treaties, in which the intention to apply their obligations retroactively was not so clear and was resolved by an international tribunal. In the Chamizal Tract case, a tribunal considered the 1884 treaty that fixed the boundary between the United States of America and Mexico as the Rio Grande River. Mexico alleged that the treaty was not retroactive and, therefore, did not affect its claim to the Chamizal Tract, an area of 600 acres that had many years before been on the southern side of the Rio Grande (but, following the river’s change of course over time, was now to the north) and which Mexico claimed belonged to it according to the prior 1848 and 1853 treaties that delineated the boundary. The tribunal rejected this argument, concluding that the 1884 agreement was intended to clarify the previous treaties.⁴⁷

2.32  In Mavrommatis the Permanent Court of International Justice (PCIJ) famously found that Protocol XII of the 1924 Treaty of Lausanne was retroactive.

2.33  The Treaty of Lausanne carved up the lands of the former Ottoman Empire, transferred to Palestine property that had belonged to Greece, and, in Protocol XII, required Great Britain, as the sovereign power in Palestine, to recognize certain concessions that had previously been granted. Mr Mavrommatis was a Greek national who argued that he obtained concessions from officials of the former Ottoman Empire to supply services to the cities of Jerusalem and Jaffa. Greece claimed before the PCIJ that Great Britain breached its obligations in the 1924 Treaty of Lausanne by refusing to recognize the concessions.

2.34  Great Britain responded that the Court had no jurisdiction because the alleged breach occurred three years before the entry into force of Protocol XII. The Permanent Court rejected this argument because, it found, the obligation in Protocol XII was retroactive:

2.35  This passage was relied on by the majority of the tribunal in Hrvatska v Slovenia to conclude that a 2001 treaty between Croatia and Slovenia regarding a nuclear power plant⁴⁹ was also retroactive.⁵⁰ The majority accepted the claim by the national electric company of Croatia that Slovenia breached the agreement by failing to provide electricity before the agreement entered into force.

2.36  The World Trade Organization Appellate Body in EC—Aircraft may have found that Article 5 of the Subsidies and Countervailing Duty Measures Agreement is retroactive. That article states that: ‘[n]‌o Member should cause, through the use of any subsidy … adverse effects to the interests of other Members …’. The United States of America alleged that the European Community had breached this article by subsidizing Airbus and the European Community responded that the allegation was ‘outside the temporal scope of the proceedings’ because the alleged subsidies were given in part before the agreement entered into force on 1 January 1995.⁵¹

2.37  The panel⁵² and the Appellate Body⁵³ disagreed because, even though the subsidies may have been given before 1995, the adverse effects from those subsidies could have occurred after and the obligation in Article 5 is not to ‘cause … adverse effects’. If a World Trade Organization member can breach Article 5 by failing to prevent adverse effects which are an inevitable and unavoidable result of a subsidy issued before the article entered into force then it is arguable that the article is effectively retroactive.

2.38  The cases above are instances of tribunals finding that a treaty did express an intention that its obligations would be retroactive, but there are also instances of tribunals finding the opposite.⁵⁴ In Société Générale v Dominican Republic(p. 18) the claimant alleged that the rule against retroactivity was overridden by articles in the investment treaty between the Dominican Republic and France, which state that the treaty applies to assets invested ‘before or after the entry into force of this Agreement’ and which granted the tribunal jurisdiction over ‘any dispute relating to investments’. The tribunal held that these provisions did not clearly subject actions taken before the treaty entered into force to the obligations in that treaty: ‘if the intention had been to allow for retroactivity one would expect that it would require a clear and unequivocal expression of intention to that effect, which is not found in the Treaty or elsewhere’.⁵⁵ The finding is consistent with several previous decisions of investment treaty tribunals⁵⁶ and the subsequent decision in Paushok v Mongolia.⁵⁷

2.39  Tribunals have universally agreed that general principles of law impose a ‘rule against retroactivity’, which prevents them from finding a breach of an obligation through an act before the obligation entered into force, unless they have been directed otherwise. Although the occasional decision has been inconsistent with this rule, this seems to have been accidental rather than arising from a conscious rejection of the rule.

2.40  The book now builds on this base to address in the next chapter a controversial application of the ‘rule against retroactivity’—the application of the rule to acts after the entry into force of the obligation allegedly breached but before the acceptance of the tribunal’s jurisdiction. Another controversial application of the rule—to disputes, rather than acts, that arose before acceptance of the tribunal’s jurisdiction—is addressed in Chapter 8.