the diplomatic channel - papers in the SSRN

OUP UNCORRECTED PROOF – REVISES, 06/04/2010, MPS

Chapter 75

T H E D I P L O M AT I C C H A N N E L michael waibel

1 The character and conduct of negotiations (a) Characteristics of negotiations (b) The advantages and disadvantages of negotiations (c) The role of international law in negotiations 2 When States negotiate (a) Duties to negotiate (b) The relationship of negotiations to other means of dispute resolution 3 The link between negotiations and State responsibility (a) Negotiating compensation (b) The effect of negotiations on State responsibility 3 Conclusion Further reading

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Only a small subset of international disputes ever reaches international courts and tribunals. Despite the growing prominence of judicial and arbitral proceedings, adjudication is just the tip of the iceberg. Diplomacy still reigns supreme in settling international disputes, especially when confidentiality and flexibility are important. To this day, negotiations remain the predominant tool for managing and settling international disputes.¹ Indeed this is probably more the case than ever, especially with the rise of international organizations and multilateral co-operation. The post-World War II period has been called ‘an age of negotiations’.² Disputes associated with the most difficult issues of the day, ranging from war and peace, to nuclear disarmament, economic dislocations, and global warming, are by and large addressed by negotiation, rather than adjudication. ¹ JG Collier & AV Lowe, The settlement of disputes in international law: institutions and procedures (Oxford, OUP, 1999), 20; Mavrommatis Palestine Concessions, 1924, PCIJ Reports, Series A, No 2, p 4, 11–15 (negotiation as the chief method by which States settle disputes and define the subject-matter of claims); JG Merrills, International Dispute Settlement (4th edn, Cambridge, CUP, 2005), 2 (‘the principal means of handling all international disputes . . . negotiation is employed more frequently than all the other methods put together’); United Nations Handbook on the Peaceful Settlement of Disputes (New York, United Nations, 1992), 10; MN Shaw, International law (6th edn, Cambridge, CUP, 2008), 918. ² IW Zartman & MR Berman, The practical negotiator (New Haven, Yale University Press, 1982), 3; SMG Koopmans, Diplomatic dispute settlement: the use of inter-state conciliation (The Hague, TMC Asser, 2008), 22 (‘the diplomatic method par excellence’); I Brownlie, ‘Why do States Take Disputes to the International Court?’, in N Ando and others (eds), Liber Amicorum Judge Shigeru Oda (Leiden, Brill, 2002), 829; JW Salacuse, The Global Negotiator: Making, Managing and Mending Deals Around the World in the Twenty-First Century (New York, Palgrave Macmillan, 2003).

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Part V The Implementation of International Responsibility

What explains the prevalence of negotiations in international relations? Beyond the natural advantages of negotiation that this Chapter explores, a chief reason for its popularity is the absence of compulsory dispute settlement procedures in international law and broad immunity that states enjoy for their sovereign acts. The lack of a general method or forum for enforcing obligations under international law increases their attractiveness of negotiations in relative terms. Given the importance of negotiations in international relations, the dearth of literature on the subject is surprising.³ The International Court in the North Sea Continental Shelf Case highlighted the ‘fundamental character’ and universal acceptance of ‘the direct and friendly settlement of . . . disputes between parties’.⁴ States select the dispute settlement procedure based on the strength of their legal, policy, and negotiating position, and according to which will yield the best result for them. In many cases, negotiations turn out to be the preferred method. Collier and Lowe emphasize this point: ‘recourse to legal processes for the adjustment of conflicts and settlement of disputes is optional . . . Law is chosen as the framework within which to resolve disputes when it is advantageous to use that framework’.⁵ The Chapter proceeds as follows. Section 1 explains the use and characteristics of negotiations as a tool to manage and settle disputes in international affairs. Section 2 explores what happens when States negotiate, with a focus on potential duties to negotiate and the relationship of negotiations to other dispute settlement procedures. Section 3 sets out the link and effects of negotiated settlements with state responsibility claims. Section 4 concludes.

1 The character and conduct of negotiations Negotiation is the most important function and chief tool of peaceful diplomacy.⁶ The terms negotiation and diplomacy are sometimes even used synonymously.⁷ The starting point for most negotiations is a concrete disagreement on law, fact or policy concerning rights or interests.⁸ Negotiation may be defined as ‘a process in which divergent values are combined into an agreed decision’,⁹ whereas diplomacy is an ‘essentially political activity’ whose ‘chief purpose is to enable states to secure the objectives of their foreign policies ³ SMG Koopmans, Diplomatic Dispute Settlement: The Use of Inter-State Conciliation (The Hague, TMC Asser, 2008), 22 attributes this to the fact that ‘international negotiations can cover everything’, and cites the General Assembly’s unsuccessful attempt to draw up general guidelines for negotiation, GA Res 55/101 (1999) (with further references in note 69). ⁴ North Sea Continental Shelf, ICJ Reports 1969, p 3, 48–49 (para (88) (the delimitation of the continental shelf between neighbouring States must be effected by agreement with reference to equitable principles); Cf also Free Zones of Upper Savoy and the District of Gex, PCIJ Reports, Series A, No 22, p 4, 13 (‘Whereas the judicial settlement of international disputes . . . is simply an alternative to the direct and friendly settlement of such disputes between the Parties; as consequently it is for the Court to facilitate, as far as is compatible with its Statute, such direct and friendly settlement.’). ⁵ JG Collier & AV Lowe, The Settlement of Disputes in International Law: Institutions and Procedures (Oxford, OUP, 1999), 3. ⁶ G Berridge, Diplomacy: Theory and Practice (3rd edn, New York, Palgrave Macmillan, 2005), 27. Before the 20th century, gunboat diplomacy was notorious: note the contradiction in terms. ⁷ Revised General Act for the Pacific Settlement of Disputes, adopted by the UNGA on 28 April 1949, 71 UNTS 101; 1948 Charter of the Organization of American States, 119 UNTS 3, entered into force December 13, 1951 (‘through the usual diplomatic channels’). ⁸ Mavrommatis Palestine Concessions, 1924, PCIJ Reports, Series A, No 2, p 4, 11–15. ⁹ IW Zartman & MR Berman, The Practical Negotiator (New Haven, Yale University Press, 1982), 1; see also K Hakapää, ‘Negotiation’, in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law

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The Diplomatic Channel

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without resort to force, propaganda, or law ’.¹⁰ Negotiations thus defined refer to the process by which States combine divergent values into agreed decisions. In many disputes, negotiations are the only means to settle disputes that the parties employ. But negotiations play an important role in other methods of dispute settlement as well.¹¹ Such negotiations may lead to a negotiated agreement that forms the basis for another form of dispute settlement. Negotiations here help focus the points of concrete disagreement to render them justiciable in adjudication or conciliation. They set the terms for inquiries, lead to the conclusion of a compromissory clause for judicial settlement or arbitration, establish the modalities for the execution of a decision, or precede diplomatic protection. The term consultation, also known as preventive negotiation, refers to a subset of negotiations, namely those negotiations before a dispute has even arisen.¹² The most wellknown, mandatory consultation procedure in modern international law is the WTO Dispute Settlement Understanding. Article 3(3) of the DSU provides that on request parties ‘shall enter into consultations in good faith within a period of no more than 30 days after the date of the receipt of the request’. According to article 3(7), if such consultations fail, the establishment of a panel may be requested. With consultations, the parties to a potential disputes adjust their policy and accommodate the other party’s interests in advance, before any harm has even occurred. Early warning procedures can greatly reduce diplomatic frictions. Policies are modified at decision-making stage, which is typically less costly than modifications after implementation has started. For instance, this approach is widely used in anti-trust matters and underpins a policy of co-operation between regulators in cross-border cases.

(a) Characteristics of negotiations Negotiations come in many different forms. They may involve sizeable delegations meeting with strict diplomatic protocol, an informal meal, a hallway conversation or a joint commission. A modern example is the High-Level Technical Group established by Argentina and Uruguay to settle their dispute on pulp mills.¹³ Negotiations do not require a table.¹⁴ They can take place in almost any setting, even without direct lines of communication between the parties. Other negotiations are conducted in international organizations or at large conferences under public scrutiny. The advantage of such negotiations is that third

(Oxford University Press, online edn, 2008), para 1 (‘discussions at different levels of authority with a view to achieving a common understanding or agreement’ to develop international law or settle disputes). ¹⁰ Emphasis added. G Berridge, Diplomacy: Theory and Practice (3rd edn, New York, Palgrave Macmillan, 2005), 1 (recalling that Edmund Burke applied the label diplomacy to what was previously called ‘negotiation’, or ‘négociation continuelle’ by Cardinal Richelieu). ¹¹ SMG Koopmans, Diplomatic Dispute Settlement: The Use of Inter-State Conciliation (The Hague, TMC Asser, 2008), 24. ¹² JG Merrills, International Dispute Settlement (4th edn, Cambridge, CUP, 2005), 3; United Nations Handbook on the Peaceful Settlement of Disputes (New York, United Nations, 1992), 10; Convention on succession of States in Respect of Treaties, art 41; 1983 Convention on the Succession of State Property, Archives and Debts, 8 April 1983, not yet entered into force, 22 ILM 306 (1983), art 42 both provide for ‘a process of consultation and negotiation’; art XI of the 1959 Antarctic Treaty, 402 UNTS 71, entered into force June 23, 1961; art 283 UNCLOS, 10 December 1982, 1833 UNTS 3 (exchange of views as a form of consultation). ¹³ ICJ Press Release 2006/17, 4 May 2006. ¹⁴ K Hakapää, ‘Negotiation’, in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (online edn, Oxford University Press, 2008), para 2.

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parties may help the disputing parties to settle their dispute. In such cases, the boundary with other methods of dispute settlement becomes blurred. Third parties can, for instance, merely mediate or open up a channel of communications where none existed before. Mediation and negotiation are often combined into a single process, especially in the context of peace negotiations.¹⁵ An interesting example of such a hybrid mechanism is the Israel-Lebanon Monitoring Group, a novel form of negotiation-cum-mediation. The Group was established in 1996 to monitor the implementation of four understandings on appropriate behaviour in the low-intensity armed conflict in Southern Lebanon. According to paragraph 3.E. of the Group’s Protocol on the Working Rules, the five parties— Lebanon, Syria, Israel, United States, and France—negotiate reports for non-compliance with the four undertakings. These may be adopted by unanimity, or if no consensus is reached, referred to the Foreign Ministers for follow-up.¹⁶ The actors in international negotiations vary. Foreign ministries are often heavily involved. But so are technical experts from various governmental departments. Negotiators often come from different levels or parts of government. Lower-level civil servants may reach a draft or framework agreement, before such draft is sent to their political superiors for approval. If departments are unable to reach agreement, the dispute may be referred to the heads of government or heads of State to overcome the impasse, for instance at a summit meeting. Negotiations at summits have a number of advantages and drawbacks. Leaders may gain political capital by reaching agreements that their bureaucracies failed to resolve, even if in reality civil servants worked out many details in advance. As Merrills rightly notes, ‘summit diplomacy is usually the culmination of a great deal of conventional negotiation’.¹⁷ Good personal relations between leaders may give rise to out-of-the-box solutions and thereby help overcome deadlock. Conversely, their high visibility may create exaggerated expectations.¹⁸ Game theory offers much insight on international negotiations.¹⁹ Negotiations require at least some overlapping of interests between the parties, for otherwise there is nothing to negotiate about.²⁰ This overlapping creates what the negotiation literature calls a Zone of Possible Agreement (ZOPA). How much value parties attach to the start and successful conclusion of negotiations is shaped by their respective Best Alternative to a Negotiated Agreement (BATNA) and the Worst Alternative to a Negotiated Agreement (WATNA). States are typically repeat players in international negotiations, and therefore concerned about their reputation as negotiators and their perceived trustworthiness. They rarely play one-shot games, but are concerned about the effect of any negotiation for their future ability to negotiate to achieve their interests. For instance, the terms and conditions for ¹⁵ C Bell, On the Law of Peace: Peace Agreements and the Lex Pacificatoria (Oxford, OUP, 2008), 176. ¹⁶ A Waldman, Arbitrating Armed Conflict: Decisions of the Israel-Lebanon Monitoring Group (Huntington, Juris, 2003); G Blum, Islands of Agreement: Managing Enduring Armed Rivalries (Cambridge, Harvard University Press, 2007), 190–241. For the text of the Understanding see Mideast Accord: Restricting the Violence in Lebanon, NY Times, Apr 27, 1996, A8. ¹⁷ JG Merrills, International Dispute Settlement (4th edn, Cambridge, CUP, 2005), 10. ¹⁸ H Nicolson, The Evolution of Diplomatic Method (London, Constable, 1954), 89, offers a deeply sceptical view of summitry: ‘diplomacy by loud-speaker . . . do[es] much to diminish the utility of professional diplomatists and, in that they entail much publicity, many rumours, and wide speculation,—in that they tempt politicians to achieve quick, spectacular and often fictitious results,—they tend to promote rather than allay suspicion, and to create those very states of uncertainty which it is the purpose of good diplomatic method to prevent.’ See also AL Davérède, ‘Negotiations, Secret’, in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (online edn, Oxford University Press, 2008). ¹⁹ Cf the classic TC Schelling, The Strategy of Conflict (Cambridge, Harvard University Press, 1960), 21. ²⁰ FC Iklé, How Nations Negotiate (New York, Harper & Row, 1964), 2.

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accepting or rejecting an agreement in any given negotiation affect the government’s future bargaining strength.²¹ They may also set a disadvantageous precedent. Negotiations may be either zero sum or non-zero sum. With zero sum games, one side wins, the other loses. These negotiations distribute a fixed sum. The better the bargain for one party, the less the other party receives. In non-zero sum games, the efficiency aspect dominates. Cooperation through negotiation here lies in the joint interest of the parties, since they may implement mutually profitable adjustments. The parties may manage to convert a given negotiation from a zero sum game to a mutually beneficial game. One way of achieving this shift is by focusing on value creation. The negotiators can distribute this surplus among the parties.²² Various negotiation techniques may help to reach a settlement. Two separate disputes may be bundled together, or one dispute split into smaller piece. The slicing and dicing facilitates package deals acceptable to both sides (issue linkages). Negotiations on one important aspect may be brought to a conclusion, while leaving other sensitive issues open. Negotiations between Spain and the United Kingdom on Gibraltar focus on cooperation on a range of technical areas, leaving the question of sovereignty aside. To prevent any perception of unfairness, the less-favoured party may be given control over the agenda and the place of negotiations. There are several stages to the typical international negotiation.²³ In the first stage—the so-called pre-negotiations—the parties agreeing on the need to negotiate. A major threshold is crossed when all the parties accept that a negotiated settlement is a better way forward. Preconditions may stand in the way. For instance, Syria’s established policy was not to negotiate with Israel on Lebanon until the return of the Golan Heights. In some cases, a government may not be prepared to negotiate with governments of a certain ideological slant.²⁴ In the second phase, when the negotiation process is typically the most fragile, the parties agree on the agenda, which often incorporates implicit deals. Parties sometimes agree on broad principles for settlement, such as the ‘land for peace’ formula or one ‘one country, two systems’.²⁵ They also set the procedure for negotiations, in particular the format, venue, level and composition of delegations as well as the timing. A record of hostility or reluctance to compromise with the other side will often insulate the negotiator from the charge of not defending the national interest. The actual negotiations are the third stage. A good example was the early negotiations on European integration. The details stage consists of resolving any disagreement within the broad negotiating terms agreed to earlier. The parties need to agree on common language, as a particular term may advantage one side. This exercise is often time-consuming

²¹ Ibid, 76. ²² RH Mnookin, SR Peppet, & AS Tulumello, Beyond Winning: Negotiating to Create Value in Deals and Disputes (Cambridge, Belknap Press, 2000), 1–43. ²³ See G Berridge, Diplomacy: Theory and Practice (3rd edn, New York, Palgrave Macmillan, 2005), 29–87, for a concise general overview of negotiations (diplomacy), and its stages. ²⁴ H Kissinger, Diplomacy (New York, Simon & Schuster, 1994), 756 contrasts the US and British attitude to negotiations with communist countries. ‘In its entire history, Great Britain had not often had the luxury of confining negotiations to friendly or ideologically compatible countries . . . Great Britain negotiated with ideological adversaries as a matter of course regarding practical arrangements relating to coexistence’. The wisdom of negotiating was almost universally accepted. The US, however, ‘wanted to change the Soviet system rather than negotiate with it’. ²⁵ IW Zartman & MR Berman, The Practical Negotiator (New Haven, Yale University Press, 1982), 109–114.

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and requires the participation of specialists. Step-by-step negotiations may offer a useful way forward when there is a lot of mistrust or many contentious or far-reaching points that require discussion.

(b) The advantages and disadvantages of negotiations The revealed preference for negotiation in international dispute settlement points to a number of distinct advantages of this method of resolving disputes. First, the diplomatic channel is the most flexible method. For any given dispute, negotiations may be adapted to the parties’ preferences, needs, and desired outcomes. Negotiations can thus be tailored to the dispute in question, the specific issues that arise in its resolution and the likely solutions. As a result of such individualization, negotiations are typically more efficient than any other methods of dispute settlement. A solution may be reached more quickly, and under the conditions and guidelines set by the parties alone. These factors increase the legitimacy and trust of the parties in the process. A second major advantage of negotiations is that the parties they retain complete control, unlike when referring a dispute to an international court or arbitral tribunal. The loss of control involved in adjudication explains why States devote so much attention to the threshold of moving from negotiation to adjudication. With negotiations, States do not run the risk of an adverse outcome from an impartial body. To the contrary, they can end the negotiations at any time, provided they bear the consequences of such termination. In negotiations, third party involvement is extremely limited, or indeed often non-existent. Diplomacy has become gradually more public over the course of the 20th century, a development with significant implications for the conduct of negotiations. The increasing openness of the negotiating process presents its own challenges. Negotiators need to pay greater head to public concerns. Domestic political considerations often constrain the negotiator’s room for manoeuvre.²⁶ When domestic pressures not to give any ground are strong an impasse may result. In these circumstances, the submission to an international court or tribunal may offer a way out. When the government commits to resolving a dispute through an impartial tribunal, advances the best legal arguments it can muster and still loses the case, then domestic constituencies may more readily accept the need for changing course. Some features of negotiations offer advantages in some scenarios, but not in other disputes. Negotiators typically like to follow well-trodden paths. This inherent conservatism gives much weight to precedents derived from past negotiations. A party that wishes to change the status quo in a substantial way may thus bear a heavy burden of persuasion, especially when negotiations take a previously negotiated text as a starting point. Relying on precedents often saves considerable amount of time and is easier to ‘sell’ at home. Constructive ambiguity can help overcome impasse, but also simply postpone the fundamental source of the dispute to a later time. Negotiations may encounter a range of problems, even before they have started. In boundary disputes, the party in possession of a disputed territory has a much stronger negotiating position, and may not see a need to negotiate. Gibraltar may offer a good example. The parties may fail to agree on the agenda for negotiations. Such disagreements

²⁶ Cf RD Putnam, ‘Diplomacy and Domestic Politics: The Logic of Two-Level Games’ (1988) 42 International Organization 427.

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often reflect deeper substantive disagreements. The terms of agreement will frequently reflect not the merits of each party’s case, but their relative power. A party with a weaker negotiation position may thus refuse to negotiate. Failed negotiations may give rise to bitterness, and complicate further dispute resolution.²⁷ Successful negotiations often occur in the following circumstances: a set of common interests among the parties, prior identification of possible solutions, however distant; both parties suffer large costs without negotiations; broad domestic support for negotiations; and considerable scope for issue linkages and trade-offs between the parties.²⁸ Such linkages may of course not be acknowledged in the final agreement, especially if such acknowledgment would inconvenience one party. This could be the case, for instance, when that party insisted in the past that it would refuse such linkage. Most diplomatic settlements of disputes come about in a piecemeal fashion. Agreed parts serve as elements of an overall agreement, and thereby facilitate negotiation. Parties reciprocate concessions or return favours as a sign of negotiating in good faith. Dealing with emotions, at a personal and agency level, is also essential.²⁹ Emotions often become involved in international negotiations. If not successfully managed, they do more harm than good, in particular when they sow distrust. Trust is of cardinal importance for fruitful negotiations.

(c) The role of international law in negotiations The flip side of negotiation’s innate flexibility is that international law may play only a subordinate role. This explains why this Chapter has thus far focused largely on non-legal aspects. The importance of international law in diplomacy is disputed. One school posits that international law plays only second fiddle, helpful perhaps as a common language or for public appearance.³⁰ In this view, the role of the international lawyer in negotiations consists mainly in providing his client with legal arguments that bolster the legitimacy of claims or to garner third-party support for one’s own positions in the international community. A lawyer may also be tasked with preventing that a specific legal argument becomes a boomerang in the future. But in essence, the role of law of is tightly circumscribed. A second school believes that that international law plays a much more central role in inter-State negotiations.³¹ The first reason is that legitimacy and lawful authority are key components of political power.³² The second is that the law provides a backstop to negotiations, independent of its dispositive character. The parties may thus depart from any legal

²⁷ LN Rangarjan, The Limitation of Conflict: A Theory of Bargaining and Negotiation (London, 1985), 283. ²⁸ C Bell, On the Law of Peace: Peace Agreements and the Lex Pacificatoria (Oxford, OUP, 2008), 56–60. ²⁹ IW Zartman & MR Berman, The Practical Negotiator (New Haven, Yale University Press, 1982), 27. ³⁰ W Levi, Law and Politics in the International Society (Beverly Hills, Sage Publications, 1976), 187 (‘References to law are virtually absent in papers of statesmen responsible for the shaping of foreign policy . . . International law occurs as an afterthought, when for a number of reasons the formulation of policy decisions in legal language appears desirable before its public appearance.’); G Blum, Islands of Agreement: Managing Enduring Armed Rivalries (Cambridge, Harvard University Press, 2007), 43–44 (‘rules [of international law] are seldom useful in resolving disputes’, while acknowledging its ‘potentially powerful presence’ as ‘a basis for mutual dealings, in feeding divergent positions with a common formal language to borrow from and build on’). ³¹ R Sabel, ‘The Role of International Law in Negotiations Between States’ (2009) Justice 35; C Bell, On the Law of Peace: Peace Agreements and the Lex Pacificatoria (Oxford, OUP, 2008), 298 (‘international norms forms the common language through which the [negotiation] process is conducted, even though different parties find the implications of that language to be different.’) ³² R Fisher, Points of Choice (Oxford, OUP, 1978), 12.

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rules that bind them. But negotiations still occur in the shadow of law. Nevertheless, even in this view, law is only one determinant of the outcome of the negotiations. Other factors, such as commercial relations, negotiation skill and issue linkages all come into play. Parties to negotiations often wish to prevent that any concessions or statement offered in the context of confidential negotiations affect the outcome in a subsequent adjudication. One way of achieving this goal is found in article 5 of the Special Agreement between the United States and Canada in the Gulf of Maine case: Neither party shall introduce into evidence or argument, or publicly disclose in any manner, the nature or contents of proposals directed to maritime boundaries settlement, or responses, thereto, in the course of negotiations or discussions between the parties undertaken in 1969.³³

The absence of such a provision is likely to temper the parties’ willingness to offer concessions in the preceding negotiations.

2 When States negotiate (a) Duties to negotiate Article 2(4) of the UN Charter obliges States to ‘settle their international disputes by peaceful means in such a manner that international peace and security, and justice, are not endangered’. This provision is not limited to the class of disputes that threaten international peace and security. All international disputes are covered. Unlike article 33, article 2(4) refers to justice as well. These differences result from the central role which the Charter vests in the Security Council in settling international disputes. According to article 33(2), the Security Council may call upon parties to settle their disputes by such means. As a general rule, States retain the discretion of which dispute settlement method to use. The UN Charter bars only the use of force. Article 33 of the UN Charter specifies a range of peaceful methods to settle those international disputes whose continuance threatens international peace and security: negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies, or any other peaceful method of their choice. There is no order of priority in these means.³⁴ The choice among the various methods of peacefully settling disputes is up to the disputing States. The General Assembly has the power to recommend a means of settling a dispute. Section II, paragraph 3(a) of the Manila Declaration on the Peaceful Settlement of Disputes provides that the General Assembly may: discuss any situation, regardless of origin, which it deems likely to impair the general welfare or friendly relations among nations and, subject to Article 12 of the Charter [the Security Council exercising its functions under the Charter], recommend measures for its peaceful settlement.

The General Assembly most frequently recommends negotiations as means of settling disputes.³⁵

³³ Delimitation of the Maritime Boundary in the Gulf of Maine Area (Canada/United States of America), ICJ Reports 1984, p 246. ³⁴ K Hakapää, ‘Negotiation’, in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (online edn, Oxford University Press, 2008), para 25 (‘no preference’). ³⁵ United Nations Handbook on the Peaceful Settlement of Disputes (New York, United Nations, 1992), 12.

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The guiding principle is thus the parties’ freedom of choice with respect to the choice of dispute settlement procedure, in line with foundational principle of consent in international law. Generally speaking, the parties may also decide not to negotiate, though this statement might require some qualification in light of the ICJ’s case law. In the North Sea Continental Shelf and the Fisheries Jurisdiction cases, the ICJ came close to enunciating a general obligation to negotiate in good faith. The source of the obligation to negotiate might derive from general international law, rather than from specific treaty obligations undertaken by the parties.³⁶ Notwithstanding the general rule, duties to negotiate are founds in treaties, often coupled with reference to good faith.³⁷ States are then required to negotiate towards concluding an agreement.³⁸ In these circumstances, failure to live up to the duty to negotiate engages the State’s responsibility, including the potential use of countermeasures by the injured State. Such failure can also consist in the unjustified breaking off of negotiations or the systematic disregard for agreed procedures.³⁹ Provided a State has assumed a treaty obligation to negotiate in good faith, active conduct of the negotiations with some readiness for compromise is required. In the North Sea Continental Shelf case the Court stated: The parties are under an obligation to enter into negotiations with a view to arriving at an agreement, and not merely to go through a formal process of negotiation or a sort of prior condition for the automatic application of a certain method of delimitation in the absence of agreement; they are under an obligation so to conduct themselves that the negotiations are meaningful, which will not be the case when either them insists upon its own position without contemplating any modification of it.⁴⁰

In the Fisheries Jurisdiction case, the ICJ similarly exhorted parties to ‘conduct their negotiations on the basis that each must in good faith pay reasonable regard to the legal right of the other’.⁴¹ ³⁶ North Sea Continental Shelf, Judgment ICJ Reports 1969, p 3, 48 (para 86) (the obligation to negotiate under the Special Agreement ‘merely constitutes a special application of a principle which underlies all international relations, and which is moreover recognized in art 33 of the Charter of the United Nations’); Fisheries Jurisdiction (United Kingdom v Iceland), Merits, Judgment, ICJ Reports 1974, p 3, 32 (para 74) (‘It is implicit in the concept of preferential rights that negotiations are required in order to define or delimit the extent of those rights . . . the obligation to negotiate thus flows from the very nature of the respective rights of the Parties’); United Nations Handbook on the Peaceful Settlement of Disputes (New York, United Nations, 1992), 12; JG Collier and AV Lowe, The Settlement of Disputes in International Law: Institutions and Procedures (Oxford, OUP, 1999), 22. ³⁷ Eg art IX of the Canada-Poland BIT provides that disputes shall ‘to the extent possible, be settled amicably between both parties concerned [the host state and the investor]’; C Schreuer, ‘Travelling the BIT Route: Of Waiting Periods, Umbrella Clauses and Forks in the Road’ (2004) 5(2) Journal of World Investment and Trade 231 has other examples taken from the investment arbitration context. Obligations to negotiate are also often in bilateral agreements for avoiding jurisdictional conflicts in antitrust matters. ³⁸ Railway Traffic between Lithuania and Poland, 1931, PCIJ Reports, Series A/B, No 42, p 4, 116: (‘not only to enter into negotiations but also to pursue them as far as possible with a view to concluding agreements’, although they are not obliged actually to reach agreement); Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, ICJ Reports 1996, p 226, 264 (para 99) (exceptionally, the court held that art VI of the Treaty on Non-Proliferation is ‘an obligation to achieve a particular result—nuclear disarmament in all its aspects—by adopting a particular course of conduct, namely the pursuit of negotiations on the matter in good faith’). ³⁹ Lac Lanoux (France v Spain) (1957) 24 ILR 101, 127. Cf also art 41 of the 1978 Vienna Convention on Succession of States in Respect of Treaties, 23 August 1978, 1946 UNTS 3. ⁴⁰ North Sea Continental Shelf, Judgment ICJ Reports 1969, p 3, 47 (para 85(a)). ⁴¹ Fisheries Jurisdiction (United Kingdom v Iceland), Merits, Judgment, ICJ Reports 1974, p 3, 33, (para 78).

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(b) The relationship of negotiations to other means of dispute resolution A dispute may be referred to adjudication even in the absence of any prior diplomatic contact.⁴² However, it will rarely be sound policy to bring international claims without any prior attempt to settle the dispute through negotiations. As a general rule, international law does not require the exhaustion of diplomatic remedies before using another dispute settlement procedure.⁴³ Some treaties, however, require negotiations before bringing an international claim,⁴⁴ or condition the admissibility of a claim on the failure of negotiations.⁴⁵ But negotiations do not generally preclude other methods of dispute settlement.⁴⁶ In the Diplomatic Staff in Tehran case, one instrument gave the ICJ jurisdiction over disputes ‘not satisfactorily adjusted by diplomacy’.⁴⁷ The Court found that Iran’s refusal to negotiate could not affect its jurisdiction. Dilatory tactics to delay legal proceedings by one State are no bar to the exercise of jurisdiction. More difficult questions arise when negotiations have taken place, but failed. A good way of avoiding this problem is to include a specific time-limit for negotiations in the jurisdictional clause. When negotiations run parallel to other methods of dispute settlement, is the judge bound to defer to the negotiator?⁴⁸ The answer is no. Ongoing negotiations do not affect the competence of the tribunal. In the Aegean Sea Continental Shelf case, the Court rejected the notion that adjudication and negotiation may not proceed in parallel.⁴⁹ The Genocide case likewise was heard while the parties simultaneously attempted to reach a settlement by negotiation, mediation and conciliation. The referral to the Court was just one element in a broad dispute resolution strategy that concurrently used other levers for possible

⁴² Application for Revision and Interpretation of the Judgment of 24 February 1982 in the Case Concerning the Continental Shelf (Tunisia/Libyan Arab Jamahiriya), Judgment, ICJ Reports 1985, p 192 (‘the manifestation of the existence of dispute in a specific manner, as for instance by diplomatic negotiations, is not required’, though perhaps desirable in many cases). United States Diplomatic Staff in Tehran. ⁴³ Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v Nigeria), Preliminary Objections, ICJ Reports 1998, p 275, 302–303 (para 56); United Nations Handbook on the Peaceful Settlement of Disputes (New York, United Nations, 1992), 11. ⁴⁴ UNCLOS, art 283; NATO Agreement, 4 April 1949, art 3, 34 UNTS 243. ⁴⁵ Revised General Act for the Settlement of Disputes 1949; South West Africa, Preliminary Objections, ICJ Reports 1962, p 319 (objection that no proof adduced that the dispute incapable of being settled by negotiation). The PCIJ elaborated on the concept of failed negotiations in Mavrommatis (negotiations fail ‘if finally a point is reached at which one of the Parties definitely declares himself unable, or refuses, to give way, and there can therefore be no doubt that the dispute cannot be settled by diplomatic negotiation’. Mavrommatis Palestine Concessions, 1924, PCIJ Reports, Series A, No 2, p 4, 13. See also South West Africa, Preliminary Objections, ICJ Reports 1962, p 319, 346. ⁴⁶ JG Collier & AV Lowe, The Settlement of Disputes in International Law: Institutions and Procedures (Oxford, OUP, 1999), 20–21; Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v United States), Jurisdiction and Admissibility, ICJ Reports 1984, p 392, 440; Aegean Sea Continental Shelf, ICJ Reports 1978, p 3, 12 (para 29) (ongoing negotiations no impediment to the exercise of the court’s jurisdiction: ‘The jurisprudence of the court provides various examples of cases in which negotiations and recourse to judicial settlement have been pursued pari passu . . . the fact that negotiations are being actively pursued during the present proceedings is not, legally, any obstacle to the exercise by the Court of its judicial function’). ⁴⁷ United States Diplomatic and Consular Staff in Tehran (United States of America v Iran), ICJ Reports 1980, p 3. The same formulation is also found in a number of bilateral investment treaties, such as art 13, Agreement between Japan and the Democratic Socialist Republic of Sri Lanka, 1 March 1982; cf also art XXI of the Friendship, Commerce and Navigation Treaty between Iran and the United States, at issue in Oil Platforms (Islamic Republic of Iran v United States of America), ICJ Reports 2003, p 161. ⁴⁸ JG Merrills, International Dispute Settlement (4th edn, Cambridge, CUP, 2005), 21–22. ⁴⁹ Aegean Sea Continental Shelf, ICJ Reports 1978, p 3, 12 (para 29) (‘the fact that negotiations are being actively pursued during the present proceedings is not, legally, any obstacle to the exercise by the Court of its judicial function’).

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resolution. Further support for the view that simultaneous recourse to dispute settlement methods is possible is provided by a number of contentious cases that were discontinued after the parties reached a settlement while the Court considered the dispute.⁵⁰ From a policy perspective, the simultaneous pursuit of various methods of dispute settlement maximizes the chances of peaceful settlement and is therefore desirable.

3 The link between negotiations and State responsibility (a) Negotiating compensation States often negotiate compensation or some other performance due for an internationally wrongful act (article 36 ARSIWA).⁵¹ The ILC Commentaries cite instances when compensation has been negotiated after wrongful attacks on ships or aircraft causing damage, injury or loss of life,⁵² damage or injury to personnel on diplomatic premises, and for environmental damage. Such settlements rarely admit State responsibility, and are frequently on an ex gratia or without prejudice basis.⁵³ An undertaking to compensate assumed in diplomatic negotiations may, but need not reflect an underlying internationally wrongful act. States may assume responsibility by agreement for an injury or loss even in the absence of any international legal obligation, when the perceived gains of assuming responsibility outweigh the costs associated with a refusal. Nevertheless, the possibility of the injured State successfully invoking State responsibility in a binding dispute settlement procedure is an important factor in this calculus. Lump sum settlements provide a means to settle a large number of claims by individuals or corporations, sometimes only with token payments. The settlement agreement provides for payment of a global sum by the injuring State, and sometimes sets out a process, eligibility requirements and standards for distribution to individual claimants.⁵⁴ The amount available for distribution to those injured may differ substantially from their damage. Particularly well-known examples of lump-sum agreements are the Holocaust settlements with Germany and Austria.⁵⁵ Many agreements negotiated between States do not take binding form. States use a range of means to record the results of negotiations, such as administrative agreements, press communiqués, joint statements or executive agreements.⁵⁶ There are several advantages of these types of agreements: they may be concluded by those whose treaty making

⁵⁰ Trial of Pakistani Prisoners of War (Pakistan v India), ICJ Reports 1973, p 347, referred to in Aegean Sea Continental Shelf, ICJ Reports 1978, p 3, 12 (para 29). ⁵¹ See also Commentary to art 36. ⁵² Aerial Incident of 3 July 1988 (Islamic Republic of Iran v. United States of America), Order of 22 February 1996, ICJ Reports 1996, p 6 (case discontinued following settlement of dispute arising out of the destruction of an Iranian aircraft with 290 passengers and crew). ⁵³ Commentary to art 36, para 12 (citing the US-China agreement for an ex gratia payment of US$4.5 million to families of the deceased and injury in the US bombing of the Chinese Embassy in Belgrade). ⁵⁴ RB Lillich and BH Weston, International Claims: Their Settlement by Lump Sum Agreements (Charlottesville, University of Virginia Press, 1975); Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China concerning the Settlement of Mutual Historical Property Claims, 5 June 1987, 1656 UNTS 77. ⁵⁵ For details on the negotiations, see the fascinating account by S Eizenstat, Imperfect justice: looted assets, slave labor, and the unfinished business of World War II (New York, 2003). ⁵⁶ J Klabbers, The Concept of Treaty in International Law (The Hague, Kluwer Law International, 1996), 100, goes so far calling ‘international agency law’ a third legal order. Cf Baxter’s ‘vast sub-structure of intergovernmental paper’, RR Baxter, ‘International Law in “Her Infinite Variety” ’ (1980) 29 ICLQ 549.

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power may be in doubt; they can be concluded more quickly; at the domestic level, no ratification is necessary, and hence a meeting of the minds between the two executives suffices.

(b) The effect of negotiations on State responsibility A valid settlement of the dispute with prejudice (‘a full and final settlement’) precludes any further claims for reparation.⁵⁷ In return for any consideration received under the settlement, the injured State waives its right to any further claims against the responsible State. The scope of the waiver may vary. For example, it could be limited to the damage suffered by the government, leaving the possibility of claims by private individuals open. Such waiver needs to be clear and unequivocal.⁵⁸ Negotiations may prevent lapse. An international claim may lapse by a combination of passage of time and the conduct of the injured State. According to article 45 ARSIWA, State responsibility may no longer be invoked if the injured State, ‘by reason of its conduct, validly acquiesced in the lapse of the claim’. An application may become inadmissible by passage of time.⁵⁹ There is no precise time limit for lapse.⁶⁰ Bilateral negotiations on the claims concerned are sufficient to put the respondent State on notice of eventual legal proceedings.⁶¹ As a general rule, therefore, negotiations prevent lapse of the claim. Before resorting to countermeasures, States are under an obligation to negotiate. In practice, extensive negotiations typically precede the adoption of countermeasures.⁶² According to article 52(b) ARSIWA, any injured State shall inform the injuring State of its decision to take countermeasures and offer negotiations, except when urgent countermeasures are necessary to preserve its rights under paragraph (c). These two procedural conditions constrain countermeasures, a form of self-help.⁶³ Countermeasures must cease once the parties have referred the dispute to a court or tribunal with authority to decide with binding effect (article 52(3)(b)). Conversely, countermeasures may lawfully be adopted while negotiations continue, provided the injured State has complied with the two procedural safeguards above, though their imposition will rarely create a positive atmosphere for negotiations.

3 Conclusion Negotiations are omnipresent in international relations. As this chapter explained, States negotiate to settle disputes on almost any conceivable subject, in many different settings and forms. They negotiate about detentions of their nationals, the safety of nuclear power plants, reductions in carbon emissions, and impairment of foreign investment. Even concepts that are not used to describe as negotiations may fall under that heading. In the early days of international law, treaties resembled a ‘negotiation process’ that

⁵⁷ Commentary to art 45, para 1; see also above C Tams, Chapter 72. ⁵⁸ Commentary to art 45, para 3; Certain Phosphate Lands in Nauru (Nauru v Australia), Preliminary Objections, ICJ Reports 1992, p 240 (Nauru did not implicitly waive its rehabilitation claim, as negotiations ‘did not at any time effect a clear and unequivocal waiver’). ⁵⁹ Ibid, 253 (in the circumstances, application admissible). ⁶⁰ Commentary to art 45, para 9. ⁶¹ Certain Phosphate Lands in Nauru (Nauru v Australia), Preliminary Objections, ICJ Reports 1992, p 240, 250 (para 20). ⁶² Commentary to art 52, para 4. ⁶³ Ibid, para 1.

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encouraged adherence to the undertaking more than as a positive legal commitment.⁶⁴ Self-determination may be thought of as the right of marginalized minorities to negotiate with their governments.⁶⁵ For all the advantages of negotiations, in some cases judicial settlement or arbitration may offer better chances for just outcomes that stand the test of time. In the political reality of unequal power that characterizes the international community of states, political and economic levers may favour larger States in negotiations. Alas, the advice given by Elihu Root to James Brown Scott, his legal advisor at the State Department, is not always heeded in the practice of States: ‘We must always be careful, and especially so in our relations with the smaller states, that we never propose a settlement which we would not be willing to accept if the situation were reversed.’⁶⁶ Hans Blix best captures the essence of this downside of negotiations: ‘Nowhere is the juridical principle of equality of states better respected than in an international tribunal.’⁶⁷ No general answer may be given to the question when negotiations are desirable for the parties to a dispute. Much depends on the circumstances of each dispute. Factors to consider include the relative bargaining strength of the parties, the issue in question, the strength of the respective legal positions, domestic political pressures, and the future relations between the contesting parties. As the parties retain complete control over the process, compliance with voluntary undertakings assumed in negotiations is generally high. Whenever negotiations are successfully used, they are probably the most effective and least costly way of settling international disputes.

Further reading G Berridge, Diplomacy: Theory and Practice (3rd edn, New York, Palgrave Macmillan, 2005) JG Collier and AV Lowe, The Settlement of Disputes in International Law: Institutions and Procedures (Oxford, OUP, 1999) K Hakapää, ‘Negotiation’, in R Wolfrum (ed), Max Planck Encyclopedia of Public International Law (online edn, Oxford University Press, 2008) FC Iklé, How Nations Negotiate (New York, Harper & Row, 1964) SMG Koopmans, Diplomatic Dispute Settlement: The Use of Inter-State Conciliation (The Hague, TMC Asser, 2008) JW Salacuse, The Global Negotiator: Making, Managing and Mending Deals Around the World in the Twenty-First Century (New York, Palgrave Macmillan, 2003)

⁶⁴ C Bell, On the Law of Peace: Peace Agreements and the Lex Pacificatoria (Oxford, OUP, 2008), 89, (quoting Pruchta with reference to American Indian agreements from 1778 to 1905). ⁶⁵ Ibid, 38. ⁶⁶ (1937) 31 ASIL Proceedings 8. ⁶⁷ H Blix, The Principle of the Peaceful Settlement of Disputes, in MK Nawaz (ed), The Legal Principles Governing Friendly Relations and Co-operation Among States in the Spirit of the United Nations Charter (Leiden, AW Sithoff, 1966), 60.

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