INJURY TO ALIENS

INTRODUCTION
Many forms of State responsibility are exhibited throughout this book. State
responsibility is a vast component of International Law, which appears throughout
the various chapters of any textbook on this subject. As discussed in §2.5, for
example, there have been numerous attempts to achieve consensus on articulating
this facet of International Law—mostly without success. This section covers State
responsibility for injury to aliens, a matter that dovetails with analyses of the indi-
vidual and corporation under International Law. A State may be held accountable
for the acts of its agents, harming aliens in a way that treats them differently from
its own citizens.

Early commentators had practical reasons for focusing on this category of

State responsibility. Many nationals of one State—who have lived, traveled, or
worked in another State—have endured abuse and discrimination throughout
recorded history. As noted by a leading study: "Since ancient times foreigners have
been regarded with suspicion, if not fear, either due to their non-conforming
religious and social customs, their assumed inferiority, or because they were
considered potential spies and agents of other nations. The Romans refused aliens
the benefits of the jus civile [civil law], thirteenth-century England limited their
recourse to the ordinary courts of justice [rather than all courts], and imperial Spain
denied them trading rights in the New World."1

The development of the law of State responsibility for injury to aliens began
approximately two centuries ago. One of the foremost commentators of the time,
Emerich de Vattel, wrote in his influential book The Law of Nations: "Whoever ill-
1
E. Dawson & I. Head, “National Tribunals and the Rights of Aliens,” in 10 International Law, p. XI (Charlottesville:
Univ. Press of Va., 1971
treats a [foreign] citizen injures the State, which must protect the citizen." 2 His
articulation was adopted by many international tribunals and commentators as the
rationale for recognizing State responsibility for injury to aliens. Avoiding the
escalation of this facet of discrimination became the linchpin in restatements of the
law of State responsibility.

This branch of State responsibility relied on the internal tort law applied by
many States. Tort law governs civil wrongs by an individual for unreasonable
conduct that harms another individual. If someone takes the property of another
without justification, that person is liable under the internal tort law of many
nations. Writers and jurists believed that a State should be similarly liable when its
unreasonable acts or omissions harmed aliens. Such protection was necessary
because national law typically insulated the State from the claims of its own
citizens. When State X nationalized the property of a foreign citizen without
compensation, that citizens home State Y could thus assert a case against State X
because of its responsibility for discriminating against an alien.

CODIFICATION ATTEMPTS
The law of State responsibility for injury to aliens is not codified in a
comprehensive multilateral treaty. One reason is that there are divergent views on
the precise content of State responsibility. The International Law textbook used at
Russia's Moscow State University urges that "codification is now an urgent task.
Members of the League of Nations sought to codify those norms of international
law dealing with the responsibility of States for damage to the person or property
of foreigners (which efforts served the interests of imperialist States)."3

2
E. de Vattel II, The Law of Nations 136 (New York: Oceana, 1964) (translation of original 1758 edition).
3
G. Tunkin, International Law 224 (Moscow: Progress Publishers, 1982) (1986 trans.).
 Several attempts have been made to codify the law of State responsibility for
injuries to foreign individuals and corporations. The first was the 1929 draft
Convention on Responsibility of States for Damage Done on Their Territory to the
Person or Property of Foreigners. It was compiled and produced under the auspices
of the Harvard Law School's Research in International Law Project during the
period between the two world wars. Another campaign to codify this branch of
State responsibility began in 1953 when members of the UN General Assembly
decided that "it is desirable for the maintenance of peaceful relations between
States that the principles of international law governing State responsibility be
codified." This UN resolution resulted in the drafting of several reports on various
facets of State responsibility. Those reports did not, however, generate a written
multilateral agreement.4

One of the most extensive presentations of the law of State responsibility

toward aliens was published in 1961: the Draft Convention on the International Re-
sponsibility of States for Injury to Aliens. The authors were Harvard University
Professors Louis Sohn and Marvin Baxter. Their work exemplifies the Western
view that underdeveloped nations have a significant interest in importing foreign
investment and technological assistance and can profit by the just treatment of
foreign corporations and employees. The Sohn-Baxter perspective is that both
developed and lesser-developed nations should encourage the fair and
nondiscriminatory treatment of their citizens while abroad. This draft treaty does
not incorporate the views of all commentators. It is an alternative, however, to the
so-called Third World New International Economic Order (described below)
whereby a State may treat aliens differently than its own citizens.5
4
1929 draft: "'Responsibility of States," 23 Amer.f. Int'l L., Special Supp. 131 (1929). 1953 attempt: Gen. Ass. Res.
799 (VIII), Dec. 7, 1953, contained in G.A.O.R. (8th Session) Supp. (No. 17) at 52, UN Doc. A/2630.
5
The draft convention is reprinted in L. Sohn & M. Baxter, "Responsibility of States for Injuries to the Economic
Interests of Aliens," 55 Amer.J. Int'l L. 545,548 (1961).These draft principles were approved by the American
 Current UN efforts to codify State responsibility have not yet produced final
draft articles on this particular feature of Sate responsibility. The recent 1998 draft
is admittedly silent because "one should not find in the state responsibility draft
articles a discussion of the law governing, for example, expropriation of the
property of foreign nationals."42 As it continues to develop, this project will
hopefully contain draft treaty articles that may serve as a generally acceptable basis
for greater international cooperation on this problem, which predates medieval law.

CATEGORIES OF INJURY
What specific State conduct triggers responsibility for injury to aliens?
Although classification is no simple task, the customary violations may be listed as
follows: (1) non-wealth injuries; (2) denial of justice, including what some writers
characterize as separate subcategories of (a) wrongful arrest and detention and (b)
lack of due diligence; (3) confiscation of property; and (4) deprivation of
livelihood.

Monwealth Injuries This form of State responsibility evolved from the

unreasonable acts or omissions of State agents that caused death or physical injury
to foreign citizens. A 1983 report by the Panel on the Law of State Responsibility
of the American Society of International Law defined nonwealth injury as "an
injury inflicted by a State upon an alien either (1) directly through some act or
omission causing physical or other personal injury to or the death of an alien, or (2)
indirectly through some failure to act, including the failure under certain
circumstances to prevent injury inflicted by another party, the failure to provide the

Society of International Law's Panel on the Law of State Responsibility in 1980.

injured alien with an effective remedy, or the failure to pursue, prosecute, and
punish the responsible party."6

This category of harm is distinguished from the other types of State

responsibility by its physical attributes. A nonwealth injury can have economic
consequences, but the harm is not directed at the victim's pocketbook. In October
1965, for example, Indonesian army forces conducted a campaign directed at
Chinese nationals in Indonesia. Chinese citizens were beaten, arrested without
cause, and some were murdered. Furthermore, Indonesia's army issued permits
allowing civilians to demonstrate for the purpose of persecuting Chinese nationals.
The Chinese government sought and received assurances from Indonesia's central
government that this violence would end. Had the Indonesian government refused
the Chinese demands, then it would have incurred further responsibility for
physical nonwealth injuries to Chinese nationals.

Denial of Justice: Discrimination Against Aliens

A State's discriminatory application of its domestic laws to an alien is
described as a "denial of justice." This is a somewhat "procedural" form of injury,
rather than a physical harm. The standard procedures that apply to the benefit of a
local citizen are withheld from an alien.

There is no uniform definition of this form of injury. National and

international tribunals have nevertheless found a denial of justice in countless
cases. There are some limitations, however. In Latin American States, a denial of
justice can occur only when the State has completely refused access to its courts or

6
Quote from D. Kaye,"Introductory Note" to 1998 draft, contained in 37 Int'l Legal Mat'ls 440 (1998). See S.
Rosenne, The International Law Commission's Draft Articles on State Responsibility: Part 1, Articles 1-35
(Dordrecht, Neth.: Martinus Nij-hoff, 1991) (italics added); and M. Spinedi & B. Simma (Eds.), United Nations
Codification of State Responsibility (New York: Oceana, 1987)
its courts will not take the necessary steps to render a decision. The regional
perspective is that there can never be a denial of justice based on the quality or
unsatisfactory nature of the procedures used by the tribunal when it is deciding an
alien's claim. If there is some access to some tribunal that will ultimately decide the
particular matter, then a foreign citizen cannot complain about the quality of justice
even though different procedures apply in his or her own home state.7

Most nations adopt a broader interpretation of the term denial ofjustice. A

State can be responsible for injuring an alien when its tribunals do not provide
adequate time or legal representation to prepare a defense. This must occur in a
way that provides less protection than that afforded to the offending State's own
citizens. If local citizens are allowed to seek legal assistance, then it would be a
denial of justice to withhold that right just because the prisoner is a foreign citizen.

International Minimum Standard Another subcategory of denial of justice is

the unreasonable arrest and detention of an alien. Incarceration is thereby unlawful
when it discriminates against aliens and unreasonably departs from generally
accepted procedure. An arresting State would be liable if it failed to give a reason
for the arrest or detention of an alien defendant or if trial were delayed for an
unreasonable amount of time after arrest.

Can a State incur liability for a denial of justice when it treats foreign
citizens in the same way it treats its own citizens? A variation on the denial of
justice theme arises when a State treats a foreign citizen in a substandard way and
then defends its actions on the basis of equal treatment of all individuals in the
same circumstances. This problem triggers the daunting question of whether there

7
G.Yates, "State Responsibility for Nonwealth Injuries to Aliens in the Postwar Era," in R. Lillich (Reporter),
International Law of State Responsibility for Injuries to Aliens 213, 214 (Charlottesville: Univ. Press ofVa., 1983).
is an international minimum standard (IMS) below which no State may fall in its
treatment of all individuals, including its own citizens. The comparatively poor
treatment of individuals is not discriminatory, as long as there is no discrimination
against aliens. Both foreign and local citizens are subjected to the same type of
treatment. If an IMS does exist, however, then that State would not be able to use
equality of treatment to justify its falling below the IMS regarding the treatment of
both foreign and local citizens.

The historical maturation of such a standard has been retarded by economic

and political differences between Western States and those in lesser-developed
regions of the world. What is probably the most definitive (and equally broad)
statement defining the international minimum standard was made by US Secretary
of State Elihu Root in 1910:

Each country is bound to give to the nationals of another country in its

territory the benefit of the same laws, the same administration, the same protection,
and the same redress for injury which it gives to its own citizens, and neither more
nor less: provided the protection which the country gives to its own citizens
conforms to the established standard of civilization.

There is [however] a standard of justice very simple, very fundamental, and

of such general acceptance by all civilized countries as to form a part of the
international law of the world. The . . . system of law and administration shall
conform to this general standard. If any country's system of law and administration
does not conform to that standard, although the people of the country may be
content to live under it, no other country can be compelled to accept it as
furnishing a satisfactory measure of treatment of its citizens.8

There have been some UN-driven codification attempts. They generally

protect human rights in the prisoners context. However, as is typical of broadly
worded statements of principle with which no State would disagree, they prohibit
torture and inhumane conditions without defining those terms. In 1955, the First
UN Congress on the Prevention of Crime and the Treatment of Offenders sought to
promote a general consensus about generally accepted treatment of prisoners and
management of penal institutions. This congress promulgated the Standard
Minimum Rules for the Treatment of Prisoners, which was approved by the Eco-
nomic and Social Council in 1957 (Resolution 663). Although it expressly denied
any intent to draft a model system of penal institutions, its work is still regarded as
one of the seminal statements regarding international standards for the treatment of
prisoners. Its basic principle is that "[t]here shall be no discrimination on grounds
of race, colour, sex, language, religion, political or other opinion, national or social
origin, property, birth or other status." UN General Assembly Resolution 43/173
(1988) then promulgated the Body of Principles for the Protection of All Persons
Under and Form of Detention or Imprisonment. Principle 1 provides that all people
"shall be treated in a humane manner and with respect for the inherent dignity of
the human person." Principle 6 adds that no one "shall be subjected to torture or
cruel, inhuman or degrading treatment or punishment."9
An international minimum standard has been uniformly asserted in the
following circumstances: The complaining State asserts that the responsible State

8
Case examples: The classic articulation is available in O. Lis-sitzyn, "The Meaning of the Term'Denial of Justice'in
International Law," 30 Amer.f. Int'l L. 632 (1936). Latin American perspective: I. Puente, "The Concept of'Denial of
Justice'in Latin America," 43 Mich. L. Rev. 383 (1944).
9
E. Root, "The Basis of Protection to Citizens Residing Abroad," 4 Proceedings of the American Society of
International Law 20-21 (Wash.,DC:Amer. Soc. Int'l Law, 1910).
departed from generally accepted standards of justice for the latter's treatment of
all individuals, both foreign and domestic. The responding State typically counters
its actions by relying on the "national treatment" standard set forth in the 1933
Montevideo Inter-American Convention on Rights and Duties of States (ratified
mostly by Latin American nations). A foreign citizen is thereby entitled to no
better treatment than the local citizens of the responding State. Equal treatment of
local and foreign nationals precludes any international liability for injury to an
alien.

There is no clear consensus about the existence or scope of the IMS, partially
because of the comparative economic positions of the nations usually involved in
these controversies. The respective positions are handily illustrated in the
following case, one of the few enlightening cases that have applied the IMS.

Roberts v. United Mexican States

U NITED S TATES V. M EXICO G ENERAL C LAIMS C OMMISSION , 1926 4
Rep. Int'l Arb. Awards 11 (1974)

[Author's Note: Harry Roberts was a US citizen charged by Mexico with

"assaulting a house. "When he and several armed American companions gathered
outside a house in Mexico, the owner summoned the Mexican police. After an
exchange of small-weapons fire, the police arrested Roberts.

The Mexican constitution provided that prisoners had to be brought to trial

within twelve months of their arrest. Roberts was in a Mexican jail for nineteen
months with no hearing. His conditions of incarceration were typiadfor Mexican
prisons but less tolerable than such conditions in other countries such as the
United States.
 After his release, Roberts obtained US assistance for presenting this case
against Mexico. The respective countries had established international arbitration
maclunery (the General Claims Commission) to handle such disputes.Tke United
State* therein argued that Mexico was responsible for a denial of justice to this US
citizen, who was incarcerated in unenviable quarters in Mexico. The relevant
portion of the commission's decision appears below.]

TRIBUNAL'S OPINION. This claim is presented by the United States of America in

behalf of Harry Roberts, an American citizen who, it is alleged . . . was arbitrarily
and iDegally arrested by Mexican authorities, who held him prisoner for a long
time in contravention of Mexican law and subjected him to cruel and inhumane
treatment throughout the entire period of confinement....

It is alleged that there were undue delays in the prosecution of the trial of the
accused which was not instituted within one year from the time of his arrest, as
required by the Constitution of Mexico. These delays were brought to the notice of
the Government of Mexico, but no corrective measures were taken. During the
entire period of imprisonment, he was subject to rude and cruel treatment from
which he suffered great physical pain and mental anguish... .

The Commission is not called upon to reach a conclusion whether Roberts

committed the crime with which he was charged. The determination of that ques-
tion rested with the Mexican judiciary, and it is distinct from the question whether
the Mexican authorities had just cause to arrest Roberts and to bring him to trial.
Aliens of course are obliged to submit to proceedings properly instituted against
them in conformity with local [national] laws... .
 In order to pass upon the complaint [alleging abuse of the international
minimum standard of treatment] with reference to an excessive period of
imprisonment, it is necessary to consider whether the proceedings instituted against
Roberts whilehe was incarcerated exceeded reasonable limits within which an alien
charged with crime may be held in custody pending the investigation of the charge
against him. Clearly there is no definite standard prescribed by international law by
which such limits may be fixed. Doubtless an examination of local laws fixing a
minimum length of time within which a person charged warn crime may be held
without being brought to trial may be useful in determining whether detention has
been unreasonable in a given case. The Mexican Constitution provides . . . that . . .
a person accused of crime "must be judged within four months if he is accused of a
crime the maximum penalty for which may not exceed two years' imprisonment,
and within one year if the maximum penalty is greater." From the judicial records
presented by the Mexican Agent it clearly appears that there was a failure of
compliance with this constitutional provision, since the proceedings were instituted
on May 17, 1922, and that Roberts had not been brought to trial on December 16,
1923, the date when he was released.

There is evidence in the record that Roberts constancy requested the

American Consul at Tampico to take steps to expedite the trial. Several
communications were addressed by American diplomatic and consular officers in
Mexico to Mexican authorities with a view to hastening the trial. It was the duty of
the Mexican judge under . . . the Mexican Constitution to appoint counsel to act for
Roberts from the time of the institution of the proceedings against him. The
Commission is of the opinion that preliminary proceedings could have been
completed before the lapse of a year after the arrest of Roberts. . . .
 With respect to this point of unreasonably long detention without trial, the
Mexican Agency contended that Roberts was undoubtedly guilty of the crime for
which he was arrested; that therefore had he been tried he would have been
sentenced to serve a term of imprisonment of more than nineteen months; and that,
since, under Mexican law, the period of nineteen months would have been taken
into account in fixing his sentence of imprisonment, it cannot properly be
considered that he was illegally detained for an unreasonable period of time. The
Commission must reject this contention, since the Commission is not called upon
to pass upon the guilt or innocence of Roberts but to determine whether the
detention of the accused was of such an unreasonable duration as to warrant an
award of indemnity under the principles of international law. Having in mind
particularly that Roberts was held for . . . [nineteen] months without trial in contra-
vention of Mexican law [allowing only a twelve-month period to elapse without
trial], the Commission holds that an indemnity is due on the ground of
unreasonably long detention.

With respect to the charge of ill-treatment of Roberts, it appears from

evidence submitted by the American Agency that the jail in which he was kept was
a room thirty-five feet long and twenty feet wide with stone walls, earthen floor,
straw roof, a single window, a single door and no sanitary accommodations, all the
prisoners depositing their excrement in a barrel kept in a corner of the room; that
thirty or forty men were at tunes thrown together in this single room; that the
prisoners were given no facilities to clean themselves; that the room contained no
furniture except that which the prisoners were able to obtain by their own means;
that they were afforded no opportunity to take physical exercise; and that the food
given them was scarce, unclean and of the coarsest kind. The Mexican Agency did
not present evidence disproving that such conditions existed in the jail. It was
stated by the Agency that Roberts was accorded the same treatment as that given to
all other persons, and with respect to the food Roberts received, it was observed in
the answer that he was given "the food that was believed necessary, and within the
[economic] means of the municipality." . . .

But such equality is not the ultimate test of the propriety of the acts of
authorities in the light of international law. That test is, broadly speaking, whether
aliens are treated in accordance with ordinary [minimum] standards of civilization.
We do not hesitate to say that the treatment of Roberts was such as to warrant an
indemnity on the ground of cruel and inhumane imprisonment. . . .

As has been stated, the Commission holds that damages may be assessed on
two of the grounds asserted in the American memorial [stating the claim], namely,
(1) excessively long imprisonment—with which the Mexican Government is
clearly chargeable for a period of seven months, and (2) cruel and inhumane
treatment suffered by Roberts in jail during nineteen months. After careful
consideration of the facts of the case and of similar cases decided by international
tribunals, the Commission is of the opinion that a total sum of $8,000.00 [in 1926
dollars] is a proper indemnity to be paid in satisfaction of this claim.

Lack of Due Diligence A State may incur responsibility under International

Law, although the principal actor is not an agent of the State. A State's failure to
exercise due diligence to protect a foreign citizen is wrongful if the unpunished act
of a private individual is a crime under the laws of that State (or generally recog-
nized as criminal conduct elsewhere in the principal legal systems of the world).
Responsibility then arises under International Law if that State fails to apprehend
or control the individual who has committed the crime against the foreign citizen.
 Examples of such responsibility include the 1979 storming of the US
embassy in Iran by Iranian citizens. Iran's leader denied that his government had
arranged for them to storm the embassy and take US citizens hostage because they
were foreign citizens from a disfavored nation. Iran nevertheless incurred State
responsibility for failing to take any action to stop the crowds from stampeding the
persons and property of these foreign citizens (§7.4). A more common example of
such State responsibility is the indifference of lower-echelon officials in
circumstances where a local citizen would be given prompt assistance. States are
expected to control such officials when they act, or fail to act, in a way that would
protect a local citizen and thus unreasonably discriminates against an alien who
does not receive like treatment.

Confiscation of Property : A nation possesses the inherent sovereign right to

nationalize property belonging to foreigners (and local citizens). There are limita-
tions, however. One prohibits the taking of property, referred to as confiscation or
expropriation, in a way that discriminates against aliens. There is a significant
conflict between traditional Western expectations and contemporary non-Western
models about whether International Law or host State law should apply.

Right to Nationalize : The State possesses such power over people and things
within its borders (absent some treaty commitment not to nationalize foreign
property). As succinctly stated by a contemporary Chinese scholar:

Public international law regards nationalization as [a] lawful exercise of

state power. This is because each state, being possessed of sovereignty, naturally
has the right within its own territory to prescribe whatever economic and social
system it chooses to establish. Speaking more concretely, each state has the exclu-
sive right to regulate . . . conditions of acquisition, loss, and contents of ownership.
Consequently, when one approaches this question from the standpoint of the
principle of state sovereignty, one must recognize that states enjoy the right to
adopt nationalization measures. Nationalization belongs to matters of national
jurisdiction and therefore . . . neither the United Nations nor other states have a
right to intervene [when another country nationalizes the property of its citizens].10

One should distinguish the following scenarios when analyzing State

responsibility in expropriation cases:

♦ State X takes property that belongs to citizens of State X and to foreign citizens.
All affected individuals may have claims under the law of State X for compensa-
tion. Such rights arise only under the national laws of State X.
♦ State X takes property belonging to a foreign individual or corporation. As long
as there is appropriate compensation for the taking unrelated to the citizenship of
the owner, State X does not incur any international responsibility. This is not
considered an "injury to aliens" for the purpose of analyzing State responsibility
under International Law.
♦ State X takes the property of a foreign citizen—but X either pays no
compensation or what the alien claims to be inadequate compensation. This
involves the law of State responsibility for injuring aliens because it alleges a
confiscatory taking of property. The claim must, of course, be proven.
♦ State X specifically targets the property of all foreigners in X. It does not take
property belonging to its own citizens who occupy a like economic position. This
is the clearest example of State responsibility for injuring aliens.

10
All details are conveniently provided in N. Rodley, "The Treatment of Prisoners Under International Law," Annex
3 (1955 Minimum Rules) at 413 and Annex 4 (1988 Resolution) at 428 (2nd ed.) (Oxford, Eng.: Oxford Univ. Press,
1999).
Confiscation Limitation : If a State's taking of the property of a foreign citizen
amounts to confiscation, then there may be State responsibility in International
Law. Under the traditional Western view, a nationalization must be undertaken for
a public purpose. It must also be accompanied by "prompt, adequate, and
effective" repayment for the property taken by the government.11

There is no public purpose when the government takes property that merely
adds to the personal holdings of a dictator. Further, providing some compensation
does not mean that the compensation is adequate. A nationalization violates the
Western-derived formula if the terms of the compensation are less favorable than
those provided to citizens of the host State or the amount of compensation is below
the property's fair market value.

The standard for determining fair market value is subject to a great deal of
controversy. Some States do not feel compelled to use any such standard. Concepts
such as fair market value, replacement cost, and book value are rather indefinite
terms when applied by experienced accountants, let alone officials or mediators
from different legal or social systems.

In a case with major immense political undertones, Fidel Castro orchestrated

the revolutionary takeover of Cuba in 1959. The United States subsequently
imposed a quota on the amount of Cuban sugar importable into the United States.
Castro characterized this singular US sugar quota as an act of "aggression, [done]
for political purposes." The Cuban government then nationalized the sugar
interests of US individuals and corporations but not Cuban-owned sugar interests.
Cuba was willing to pay for the nationalized sugar interests in its own government

11
Li Hao-p'ei, Nationalization and International Law, in 1 People's China and International Law:A Documentary
Study 719 (Princeton: Princeton Univ. Press, 1974)
bonds—payable twenty years later at a rate of interest well below that of similar
bonds. This type of compensation was legal under the laws of Cuba. The US
Department of State viewed it as inadequate, however, referring to it as "manifestly
in violation of those principles of international law which have long been accepted
by the free countries of the West. It is in its essence discriminatory, arbitrary and
confiscatory." Payment in long-term bonds at a comparatively low rate of interest
was neither prompt nor adequate. The State Department claimed that Cuba's
purpose was discriminatory because Cuba took the US property as a political
response to the US import quota imposed on Cuban sugar.12

Non-Western Models Many lesser-developed countries (LDCs) have adopted an

alternative yardstick for measuring the appropriate degree of compensation in such
cases. Their position is that the more-developed countries (MDCs), whose
corporations operate within their borders, unfairly profit from long-term economic
relationships. Foreign multinational corporations have thus been characterized as
extracting enormous profits for distant shareholders while returning little to the
local citizens. Thus, some LDCs do not perceive uncompensated nationalizations
of foreign property as necessarily being confiscatory takings in violation of
International Law.

One supporting argument is that the MDCs have effectively deprived the
LDCs of their national sovereignty over natural resources through unacceptable
business arrangements that have historically taken unfair advantage of the LDCs.
Huge profits, they argue, have been expatriated to the private shareholders of the
MDC multinational corporations. Instead, more of these profits should be injected
into the sagging economies of the world's LDCs. An uncompensated
12
This formulation appears in the diplomatic notes exchanged between Mexico and the United States in 1938. See
§1.3 of this text (General Principles), and 2 Restatement (Third) of the Law of the Foreign Relations Law of the
United States §712 (St. Paul, MN:ALI Publishers, 1987) (contains extensive commentary and examples)
nationalization returns only a fraction of what has been improperly taken from the
LDC through one-sided business arrangements. This, scenario has thus diluted
national sovereignty over disappearing natural resources with no tangible benefits
for the LDCs.

Many LDCs decided to respond to the above Western-derived compensation

requirements via their premise as stated in the UN General Assembly Resolution of
1962 on Permanent Sovereignty over Natural Resources. Its objective was to
machinate a paradigm in customary international practice because it evolved while
the LDCs were still colonial territories of the MDCs. A fresh standard for
determining compensation for expropriations had to be determined under the
national law of the host State where the taking occurs. This would be more
representative than measuring compensation via the historical practice that evolved
in an era predating the existence of the vast majority of current members of the
international community. The resulting Resolution therefore provides as follows:
"[T]he owner shall be paid appropriate compensation, in accordance with the rules
in force in the State taking such measures . . . [and] the national jurisdiction of the
State taking such measures shall be exhausted. However, upon agreement by
sovereign States . . . settlement of the dispute shall be made through arbitration or
international adjudication...”13

The tension is between two competing policies in this East—West or North

—South dialogue. One is the primacy of a State's territorial jurisdiction over
people and things within its territory. The opposing policy is the historical
protection afforded to aliens by the external influence of International Law. The
claimed applicability of both policies then spawns the dilemma that pits them
13
Facts and quotes appear in Banco Nacional de Cuba v. Sabbatino, 376 US 398,84 S.Ct. 923,11 L. Ed. 2d 804
(1964).
against each other. The University of Minnesota's Professor Gerhard von Glahn
describes what is clearly the Western perception of the proper balance between
these twin goals:

Each state is the sole judge of the extent to which aliens enjoy civil
privileges within its jurisdiction. But beyond those permissive grants, each alien, as
a human being, may be said to be endowed with certain rights, both as to person
and to property, that are his by virtue of his being. It is primarily in connection
with those basic rights that a responsibility by the host state arises. It is in this
sphere that claims originate and . . . may be advanced against the host state by the
government to which the alien owes allegiance.14

The essential feature of this counter to the Western formulation is that

national law rather than International Law should govern theses MDC-LDC
disputes. Foreign shareholders of the effected MDC corporation would be limited
to the local remedies of the nationalizing State (if any).The LDC would neither be
accused of violating International Law nor have to engage in international
adjudication absent its express consent. This is one of the basic tenets of the New
International Economic Order (NIEO) promulgated in 1974 by many non-aligned
nations. It will be addressed later in this textbook (§13.4) in the broader context of
international economic relations. Currently, with respect to this section's analysis
of State responsibility for injury to aliens, Pace University (New York) Professor
S. Prakash Sinha provides this summary:

They challenge some of the rules of international law as not consistent with
their view of the new order and they point to the need for international law to
reflect a consensus of the entire world community, including theirs, and promote
14
UN Gen. Ass. Res. 1803(XVII), reproduced in 2 Int'l Legal Mat'ls 223 (1963)
the widest sharing of values. They criticise the system of international law as being
a product of relations among imperialist States and of relations of an imperial
character between imperialist States and colonial peoples. . . . Moved by the desire
to cut inherited burdens, to free themselves from foreign control of their
economies, and to obtain capital needed for their programmes of economic
reconstruction, the newly independent States have resorted to expropriation of
foreign interests. In their opinion, the validity of such expropriation is not a matter
of international law.15

On the other hand, the widespread application this approach could foster
economic suicide. Adoption would frustrate the free flow of capital to a State
whose leader suddenly nationalized foreign property without paying compensation.
Other corporate structures would fear similar treatment by State X. The resulting
lack of investment would retard its economic growth.

Neither the Western position (prompt, adequate, effective compensation) nor

the Third World position (host State law determines compensation on case-by-case
basis) has been adopted in any multilateral treaty. This tension has retarded
universal applicability of some major treaties with components that seek to
redistribute global wealth. The UN Law of the Sea Treaty, for example, became
effective in 1994, but it contains several equitable redistribution provisions to
which MDCs have either objected or tendered reservations (§6.3).

The Latin American variation to the LDC perception of Western economic

hegemony is the Calvo clause. It evolved from the tenet that no government should
have to accept financial responsibility for civil insurrection that results in the

15
G. von Glahn, Law Among Nations: An Introduction to Public International Law 190 (7th ed. Boston: AUyn &
Bacon, 1996).
mistreatment of foreign citizens at the hands of insurgents rather than the
defending government. The relevant adaptation of this concept is that a State may
impose conditions on foreign individuals and corporations who wish to do business
within that State's borders. It may thus require as a condition of doing business
there that foreigners be treated on equal footing with local citizens. A foreign
company doing business in a so-called Calvo clause country must thereby
relinquish its right, arising under International Law, to seek the diplomatic
assistance of its home State when there has been a nationalization. As exemplified
by Article 27.1 of the Mexican constitution, foreigners must agree to "consider
themselves as [Mexican] nationals in respect to such property, and bind themselves
not to invoke the protection of their governments.. . ."This constitutional clause
thereby waives the right to claim the assistance of a foreign government when the
Mexican government has decided to nationalize foreign property.

Iran-United States Claims Tribunal : One entity that could develop a wider
degree of consensus on international expropriation norms is the Iran-United States
Claims Tribunal. The Iranian revolution that led to the ICJ's hostages case (§7.4)
and the treaty that freed them in 1980 presented a rich opportunity for unifying the
respective compensation rules.

In this instance, host State takings were outspokenly anti-American. They

were done with utter disregard for any international norms.The Iranian government
nationalized, or otherwise controlled, virtually all foreign property in all
conceivable industries. The governmental objective was to exorcize the "US
demon" in Iran. The United States responded by freezing Iranian assets in the
United States. As part of the treaty agreement that led to the release of the US
hostages after 444 days in captivity, the United States made these Iranian assets
available to this tribunal for the purpose of satisfying claims against Iran.

This tribunal (§9.6) is unlikely to break new ground, however. Its mandate,
agreed to by negotiators for the United States and Iran, is to decide all cases "on
the basis of respect for law, applying such . . . rules and principles of commercial
and international law as the Tribunal determines to be applicable... 16 The Tribunal
has had the unenviable task of interpreting this governing law term, but only in
several of the nearly 500 cases it decided during its first ten years of existence.
Most claimants avoided raising the issue of determining the precise international
norms, perceiving the potential legal task as unproductively expensive because of
the attendant ambiguity and complexity. As stated by a practicing lawyer who is
one of the leading commentators on this issue, "In only a few cases has the issue
been addressed, and in some of these, the awards suggest it was used more as a
justification for achieving a result predetermined to be fair or equitable by the
arbitrators than as a set of rules to be followed in reaching a reasoned decision
based in law."17

Until a widely accepted treaty accomplishes a greater degree of international

consensus, the debate about the appropriate compensation paradigm will continue
to polarize the developed and developing States in this category of State
responsibility for injury to aliens.

16
S. Sinha, "Perspective of the Newly Independent States on the Binding Quality of International Law," in F. Snyder
& S. Sathirathai, Third World Attitudes Toward International Law: An Introduction 23, 29 (Dordrecht, Neth.:
Martinus Nijhoff, 1987).
17
"Undertakings of the Government of the United States of America and the Government of the Islamic Republic
of Iran with Respect to the Declaration of the Government of the Democratic and Popular Republic of Algeria, Art.
V," reproduced in 20 Int'l Legal Mat'ls 229, 232 (1981)
 Deprivation of Livelihood Another category of State responsibility for injury
to aliens is the unreasonable deprivation of a foreign citizen's ability to enjoy a
livelihood. The withdrawal of his or her ability to continue practicing a certain
occupation is an unacceptable deprivation if done for a discriminatory purpose.

The US Supreme Court case of Asakura v. City of Seattle is a useful

illustration (§8.1). Under a treaty between Japan and the United States, the
citizens of both countries were entitled to enjoy equal employment rights with the
citizens of each country. The city of Seattle subsequently passed a pawnbroker
ordinance providing that "no such license shall be granted unless the applicant be a
citizen of the United States." The Court determined that this ordinance "makes it
impossible for aliens to carry on the business. It need not be considered whether
the State, if it sees fit, may forbid and destroy business generally. Such a law
would apply equally to aliens and citizens... ."The ordinance improperly dis-
criminated against aliens in violation of the treaty that specifically provided for
equal treatment of Japanese citizens working in the United States. If the court had
ruled against the plaintiff Japanese pawnbroker who. challenged the ordinance,
then the United States would have incurred State responsibility for depriving
foreign citizens of a livelihood during peacetime.18

♦ SUMMARY
1. The historical perspective was that the individual had no status (legal capacity)
in International Law. Thus, an individual claimant could not pursue remedies
for State breaches of International Law on the international level. In certain
cases such as piracy, however, an individual defendant could be punished under
the law of nations because of the "universal" nature of the crime committed.
18
J.Westberg, International Transactions and Claims Involving Government Parties: Case Law of the Iran—United
States Claims Tribunal 66 (Wash., DC: Int'l L. Inst., 1991).
2. The policies of the Nazi regime, whereby the State totally disregarded the
dignity of the individual, led to a post—World War II revival of the status of
the individual as a potential defendant who was capable of violating
International Law and of being punished by an international tribunal.
3. The State has the discretion to pursue a remedy on behalf of its citizens,
typically via diplomacy, when another State violates their rights. This discretion
does not obligate the individual's State to prosecute such claims, however. The
harmed individual would then be limited to any remedies available under the
national law of the offending State.
4. More recently, individuals and corporations have the legal capacity to pursue
direct remedies against States, including their home States, when the latter is a
party to a treaty that yields an individual right of petition to an international
tribunal.
5. Nationality may be acquired in three ways: (a) by birth in a country that applies
the soil rule of/us soli; (b) by being born of parents, anywhere in the world,
when the parents' home country applies the jus sanguinis blood rule; and (c) by
naturalization, whereby the applicant attains a new nationality that differs from
his or her previous nationality.
6. Nationality is normally a matter of national law. States do not have to recognize
one another's decisions that confer nationality, however. Many international
decision makers examine the extent of an individual's ties with the claimed
country of nationality.
7. One who possesses nationality in two or more countries is a dual national and
may thus be subjected to conflicting obligations including double taxation and
military service.
8. Statelessness is the condition whereby an individual has no nationality in any
country. Such individuals do not have a home country that could otherwise
provide international protection. Post—World War II treaties have attempted to
ameliorate the plight of stateless persons who are affected by the lack of State
protection because they have no nationality documents.
9. A refugee may or may not be stateless. The 1951 Refugee Convention (pre-
1951 refugees) and its companion 1967 Protocol (covering subsequent
refugees) provide international protection for individuals who would be
persecuted on return to their home State. There is some disagreement about the
degree to which this treaty is applicable outside the territory or territorial waters
of States that have ratified this treaty.
10.Like individuals, corporations possess nationality that thereby entitles them to
State protection. Although most or all of the shareholders might be located in
one State, only the State of incorporation generally has the international
capacity to represent a corporation in international proceedings.
11.The State of incorporation has the discretion to represent its corporations in
international proceedings. This right is not an obligation. The State's decision
not to represent a corporation thus requires an injured corporation to seek
remedies (if any) under national law.
12.State responsibility for injuring aliens arose out of concerns for foreign citizens
who have been treated differently than local citizens. The various methods of
discrimination include: (a) nonwealth injuries; (b) denial of justice, including
what some commentators characterize as the subcategories of wrongful arrest
and detention and lack of due diligence; (c) confiscation of property; and (d)
deprivation of livelihood.
13.The Western view emphasizes the primacy of customary international practice
to govern a State's seizure of property belonging to an alien. This traditional
view requires prompt, adequate, and effective compensation for any
expropriation. The perspective of lesser-developed States is that their national
law should govern. Then compensation would not necessarily be required,
instead depending on the circumstances of the particular case as determined by
the host nation.
14.A regional application of the lesser-developed nations' response to the
traditional compensation requirements is the Latin American Calvo clause. Its
application means that a foreign enterprise waives its right to diplomatic
protection from its home State, even when its directors or shareholders believe
that there has been a discriminatoty taking of corporate property. Foreign
corporations are effectively characterized as local citizens to avoid the potential
application of any international norms regarding State responsibility for injuring
aliens.
PROBLEMS
Problem 4.A (end of §4.1) Two Libyan military intelligence officers were
apparently responsible for blowing up Pan Am Flight 103 over Lockerbie,
Scotland, in 1988. All 70 passengers, from various countries of the world
including England and the United States, died violent deaths. UN Security Council
Resolution 731 of 1992 demanded the trial of these two suspects in the West. The
Arab League negotiated with Libya's leader to turn over the suspects for trial
outside of Libya. England and the United States sought the extradition of these
individuals from Libya for trial. Libya's leader (Colonel Mu'ammar Gadhafi)
refused all of these demands and requests. (A 1998 arrangement to try them in the
Netherlands, as if the court there were sitting in Scot- land—where the plane
exploded—finally resolved this segment of a seemingly never-ending controversy.)

Assuming that these two Libyan intelligence agents were not yet brought to
trial from Libya, who could seek remedies for the death of the passengers on Pan
Am Flight 103? Against whom? Where?

Problem 4.B (after Nottebohm case §4.2) In June 1989, the best-known
dissident in the People's Republic of China entered the US embassy in Beijing to
seek diplomatic asylum. Fang Lizhi, a prominent astrophysicist and human rights
advocate, remained there until June 1990—refusing treatment for a heart ailment
for fear of arrest. China's agreement to allow him to leave the US Embassy
(without being arrested) for a new home in Great Britain signaled a thawing of
Sino—US relations. The Chinese Government acceded to US pressure to allow
this dissident to leave China, possibly because of its desire to retain favorable
trading status with the United States.
 Assume instead that Fang Lizhi is still residing in the US embassy in
Beijing. His request for asylum has not yet been resolved. No diplomatic
arrangements have been made regarding his safe passage out of the PRC.

He therein declares his intent to "defect" to either the United States or Great
Britain now that his immediate family is assembled with him in the US embassy.
They are ready to leave on short notice to any country that will take the family.
The US ambassador initially says that "the granting of asylum at this critical time
might jeopardize the US negotiations with China over human rights issues." After
conferring with the US Secretary of State, and the British Foreign Minister, the
parties decide that Fang Lizhi should apply for British citizenship. He has never
been in Great Britain. The British government is apparently willing to waive all
citizenship requirements, including a waiting period of three years (as in
Nottebohm). After one week, Great Britain issues Fang Lizhi a British passport,
which is delivered to him in the US embassy in Beijing.

Assume further that (contrary to the actual facts in this case) the Chinese
government protests, accusing the United States and Great Britain of meddling in
Chinese affairs. The PRC is not willing to allow safe passage so that Fang Lizhi
can leave China. The Chinese government's Minister of Foreign Affairs advises all
concerned that this dissident, engaging in anti-State conduct, will be arrested the
moment that he departs from the embassy. In the eyes of the PRC, he remains a
Chinese citizen and a traitor.

What is Fang Lizhi's nationality? Must China recognize the British

citizenship conferred on this dissident?
Problem 4.C (end of §4.2, after Sale v. Haitian Centers Council case) As Justice
Blackmun stated regarding Jewish refugees during and after World War II, "The
tragic consequences of the world's indifference at that time are well known." One
example might be the following incident. Even before US entry into World War II,
the fate of Jewish citizens and other minorities of Nazi Germany was well known
—see M. Gilbert, Auschwitz and the Allies (New York: Holt, Rinehart & Winston,
1981). US families were willing and qualified to sponsor many of Nazi Germany's
Jewish children. In 1939, however, the US Congress defeated proposed legislation
that would have rescued some 20,000 such children from Nazi Germany. The
government's rationale was that this rescue would have exceeded the US
immigration quota from Germany. See "A Brief History of Immigration to the
United States," in T. Aleinkoff & D. Martin, Immigration Process and Policy 52
(St. Paul, MN:West, 1985), which described this event as "what may be the crudest
single action in US immigration history."

Beginning in 1994, daily newspaper accounts reported savage machete

killings in Rwanda's civil war. Some 1 million Rwandans fled into Zaire (later
renamed Democratic Republic of the Congo) and neighboring African nations.
Assume that an organization like the Haitian Council is trying to save 20,000
Rwandan orphans who are about to be expelled from Zaire. No one else is willing
to take them. These children come from the "wrong" tribe. The successful rebel
tribe leaders in Rwanda vow that such children will have no place in Rwanda's
future if they return.

The US ambassador to Zaire is approached by the Save the Rwandan

Children organization. Its representative presents a plan whereby willing and
qualified US citizens will take the Rwandan refugees from Zaire to the United
States. A part of this plan is an application to the United States for asylum for these
children, who are being discriminated against on the basis of "membership in a
particular social group" (the wrong tribe, whose leaders fought the successful
rebels) under Article 33.1 of the Refugee Convention. After consultation with the
US Department of State, the US embassy officer declines on the basis that the
United States "does not have the capacity to become the haven for the world's
refugees." The US refusal in Zaire means that those children will be returned to
Rwanda for likely extermination.