William H. Taft, Arbitrator
In January 1917, the Government of Costa Rica, under President Alfredo Gonzalez, was overthrown by Federico Tenneco. Tenneco’s government concluded certain contracts with British Corporations.
Tenneco retired and left the country. After Tenneco’s retirement the old constitution was restored and a Law of Nullities was passed annulling the contracts concluded during the Tenneco regime. Great Britain made claims on the basis of the injuries done to its nationals caused by the annulments. There were two preliminary questions: 1.
What was the status of the Tinoco regime in international law. 2. Was Great Britain estopped from pursuing its claims because it never recognized the Tinoco government either de jure or de facto.
Taft ...
But it is urged that many leading Powers refused to recognize the Tinoco government. ... Undoubtedly, recognition by other Powers is an important evidential factor in establishing proof of the existence of a government in the society of nations.
The non-recognition by other nations of a government claiming to be a national personality, is usually appropriate evidence that it has not attained the independence and control entitling it by international law to be classed as such. But when recognition of a government is by such nations determined by inquiry, not into its de facto sovereignty and complete governmental control, but into its illegitimacy or irregularity of origin, their non-recognition loses something of evidential weight... [it] cannot outweigh the evidence disclosed by this record before me as to the de facto character of Tinoco’s government....
Second. It is ... argued on behalf of Costa Rica that the Tinoco government cannot be considered a de facto government, because it was not established and maintained in accord with the constitution of Costa Rica of 1871. To hold that a government... does not become a de facto government unless it conforms to a previous constitution would be to hold that within the rules of international law a revolution contrary to the fundamental law of the existing government
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cannot establish a new government. This cannot be, and is not,true....
Third. It is further objected by Costa Rica that Great Britain by her failure to recognize the Tinoco government is estopped now to urge claims of her subjects dependent upon the acts and
contracts of the Tinoco government Here the executive of Great Britain takes the position that the Tinoco government which it did not recognize, was nevertheless a de facto government that could create rights in British subjects which it now seeks to protect. Non- recognition may have aided the succeeding government to come into power; but subsequent presentation of claims based on the de facto existence of the previous government ... does not work an injury to the succeeding government in the nature of a fraud or breach of good faith.
UPRIGHT v. MERCURY BUSINESS MACHINES CO.
Supreme Court of New York, Appellate Division, First Department, 1961.
13 A.D.2d 36,213 N.Y.S.2d 417
BREITEL, JUSTICE PRESIDING. Plaintiff, an individual, sues as the assignee of a trade acceptance drawn on and accepted by defendant in payment for business typewriters sold and delivered to it by a foreign corporation. The trade acceptance is in the amount of $27 307.45 and was assigned to plaintiff after dishonor by defendant.
Involved on this appeal is only the legal sufficiency of the first affirmative defense. It alleges that the foreign corporation is the creature of the East German Government, a government not recognized by the United States. It alleges, moreover, that such corporation is an enterprise controlled by and that it is an arm and instrument of such government.
On motion addressed to its sufficiency Special Term sustained the defense. For the reasons that follow the defense should have been stricken as legally insufficient....
A foreign government, although not recognized by the political arm of the United States Government, may nevertheless have de facto existence which is juridically cognizable. The acts of such a de facto government may affect private rights and obligations arising either as a result of activity in, or with persons or corporations within, the
territory controlled by such de facto government. This is traditional law. (Russian Reinsurance Co. v. Stoddard, 240 N.Y.
149, 147 N.E. 703; M. Salimoff & Co. v. Standard Oil Co., 262 N.Y. 220,186 N.E. 679, 89 ALJi. 345)
Consequences of Recognition or Non-recognition.
In a world of growing interdependence, recognition or nonrecognition of government can have very serious consequences. A government, once recognized, gains increased prestige and stability. The doors of funding agencies are opened, loans are facilitated, access to foreign courts and immunity from suit are gained.
Military and financial assistance also come within reach. The absence of formal recognition, on the other hand, bars an entity from all these benefits or, at least, access to them may be suspended.
Recognition of a government, however, like recognition of a state involves a highly political judgment. The United States, for instance, refused for many years to recognize the government of the People’s Republic of China or of North Korea not because it was not obvious that these governments had effective control of their territory but because the United States did not wish these governments to benefit from the legal effects of recognition.
Does admission of a government to the United Nations mean recognition by all members? No. The recognition is only to the extent of the activities of the organization.
While recognition of a state is not the same as recognition of government, the two often go together in the case of new states. However, within established states, governments come and go with no effect on recognition of the state. It should be noted, moreover, that recognition of government does not mean approval of the recognized government’s methods. Nor do diplomatic relations connote approval; they are intended merely to secure a convenience.
An illustration of the political nature of recognition may be found in United States history. In the 19th century, Daniel Webster said that nations have the discretion to govern themselves and to choose which agency to represent them. In 1792, after the French Revolution, Jefferson said that the US would deal with any government effectively in power.
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In subsequent years, however, the US required more than just effective control by the incoming government. Woodrow Wilson said that the US should not deal with governments set up in violation of their constitution. After the Communists took over in China in 1949, Truman said that the US would not deal with a government imposed by a foreign power. When Chinese troops entered the Korean war, Dulles said that the policy of the United States was to recognize de facto governments when (1) they control government, (2) are not confronted with active resistance in the country, and (3) are willing to live up to international obligations.
When is recognition terminated? The answer is fairly simple: recognition of a regime is terminated when another regime is recognized. For as long as a state continues to meet the qualifications of statehood, its status as a state cannot be
“derecognized.” When the United States recognized the government of China in 1979, it derecognized the government of Taiwan, but continued with commercial, cultural, and other non-governmental relationships.
Succession of States.
Succession or Continuity
States do not last forever. The issue of state succession can arise in different circumstances. Existing sovereignties can disappear under different circumstances.
New political sovereigns may arise as the result of decolonization, dismemberment of an existing state, secession, annexation and merger. In each of these cases an existing sovereignty disappears either in whole or in part and a new one arises thus giving rise to questions of succession to rights and obligations.
The international law and practice of states on this subject have been confused. Some on one extreme suggest that the new state succeeds to no rights or obligations of the predecessor state but begins with a tabula rasa. Others on another extreme hold that the successor state assumes all the obligations and enjoys all the rights of the predecessor. Others hold that succession has varying effects on state rights and duties.
The issue of continuity is also particularly problematic. When a new state arises, what is its relation to the predecessor state? Is it completely distinct from the predecessor state or is it a continuation of the
predecessor state? There are cases when there are no problems. For instance, the present India is a continuation of the former British India while Pakistan is a completely new state. But there are also very problematic situations. Take for instance the Soviet Union and the Yugoslavia.
After the USSR was dissolved, Russia claimed to be a continuation of the USSR and therefore entitled to membership not only in the UN but also in the Security Council. Russia’s claim was supported by the Decision of the Council of Heads of State of the Commonwealth of the Independent States on December 21, 1991. But the Baltic states of Estonia, Latvia and Lithuania, which had been annexed by the Soviet Union in 1940, declared their independence. The European Community adopted a resolution welcoming the restoration of the sovereignty of the Baltic states in 1991. So did the United States.
The problem of Yugoslavia, however, is more complicated. The mother state was the Socialist Federal Republic of Yugoslavia. Over a period of several months, this state collapsed and the component republics declared independence. Majorities in Bosnia and Herzegovina voted for independence in a referendum and this was recognized by the Arbitration Commission of Yugoslavia. The European Community recognized Slovenia, Croatia and Bosnia and these were admitted to the United Nations. Serbia and Montenegro, however, formed a new state called the Federal Republic of Yugoslavia and maintained that they were the continuation of the former mother state. This claim was opposed by the other republics and by the international community. In 1992, the Security Council even declared that “the state formerly known as the Socialist Federal Republic of Yugoslavia has ceased to exist.”
In November 2000, Yugoslavia applied for membership in the UN thereby abandoning its claim to continuity of SFRY.
Succession of States
The issues on succession can be succession to territory, to treaties, to property and contracts. The rules may be summarized thus:5
When a state succeeds another state with respect to particular territory, the capacities, rights and duties of the predecessor
’The summary given here is taken from THIRD RESTATEMENT OF FOREIGN RELATIONS LAW.
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state with respect to that territory terminate and are assumed by the successor state.
As to state property, subject to agreement between predecessor and successor states, title passes as follows:
(a) where part of the territory of a state becomes territory of another state, property of the predecessor state located in that territory passes to the successor state;
(b) where a state is absorbed by another state, property of the absorbed state, wherever located, passes to the absorbing state;
(c) where part of a state becomes a separate state, property of the predecessor state located in the territory of the new state passes to the new state.
With respect to public debts, subject again to agreement between the states concerned, responsibility for the public debt of the predecessor, and rights and obligations under its contracts, remain with the predecessor state, except as follows:
(a) where part of the territory of a state becomes territory of another state, local public debt, and the rights and obligations of the predecessor state under contracts relating to that territory, are transferred to the successor state;
(b) where a state is absorbed by another state, the public debt, and rights and obligations under contracts of the absorbed state, past to the absorbing state;
(c) where part of a state becomes a separate state, local public debt, and rights and obligations of the predecessor state under contracts relating to the territory of the new state, pass to the new state.
With respect to treaties (already touched on in the Chapter on Treaties), the Vienna Convention is followed. The rules are:
(1) When part of the territory of a state becomes territory of another state, the international agreements of the predecessor state cease to have effect in respect of the territory and the international agreements of the successor state come into force there. This reflects the “moving treaty rule” or “moving boundaries rule.” If X has a treaty with Y, and part of Y is transferred to Z, X may seek relief from treaty obligation under “rebus sic stantibus.’’
(2) When a state is absorbed by another state, the inter-national agreements of the absorbed state are terminated and the
international agreements of the absorbing state become applicable to the territory of the absorbed state. Third states may appeal to rebus sic stantibus.
(3) When a part of a state becomes a new state, the new state does not succeed to the international agreements to which the predecessor state was party, unless, expressly or by implication, it accepts such agreements and the other party or parties thereto agree or acquiesce. This applies the “clean slate theory.”
(4) Pre-existing boundary and other territorial agreements continue to be binding notwithstanding. This is the uti possidetis rule.
The consequences of the re-unification of West and East Germany were governed by the German Unification Treaty of 1990. The special case of Hongkong’s return to China in 1997 were governed by the 1984 Sino-British Joint Declaration on the Question of Hongkong.
Fundamental Rights of States.
Independence
Independence is the capacity of a state to provide for its own well-being and development free from the domination of other states, providing it does not impair or violate their legitimate rights. As a right, independence means the right to exercise within its portion of the globe, to the exclusion of others, the functions of a state.6 But restrictions upon a state’s liberty arising either from customary law or from treaties do not deprive a state of independence.
Flowing from independence are certain other rights such as jurisdiction over its territory and permanent population, the right to self defense and the right of legation. Independence also involves the duty not to interfere in the internal affairs of other states.
Equality
Equality obviously does not mean equality in political or economic power.
Rather, it means equality of legal rights irrespective of the size or power of the state. Within the General Assembly, the doctrine
6Island of Las Palmas Arbitration [ 1928].
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means one state, one vote. The UN Charter, Article 2, provides that “the Organization is based on the principle of the sovereign equality of all its Members.” Hence, each has one vote in the General Assembly and every state may aspire for the offices in the various organs of the UN.
Peaceful co-existence
This right has been developing over the past twenty years. The theory was elaborated in 1954 as the Five Principles of Co-existence by India and China and includes mutual respect for each other’s territorial integrity and sovereignty, mutual non-aggression, non interference in each other’s affairs and the principle of equality. This has also been expressed in other documents such as the 1970 Declaration on Principles of International Law Friendly Relations and Cooperation Among States.
Some Incomplete Subjects.
Protectorates. Protectorates are largely of historical importance. They are dependent states which have control over their internal affairs but whose external affairs are controlled by another state. They were sometimes referred to as autonomous states, vassal states, semisovereign or dependent states
Federal state. This is a union of previously autonomous entities. Various arrangements are possible. One arrangement may involve placing full authority in a central organ while another arrangement might lodge authority in the individual entities to the detriment of the central organ. The central organ will have personality in international law; but the extent of international personality of the component entities can be a problem.
Mandated and Trust Territories. Mandated territories were territories placed by the League of Nations under one or other of the victorious allies of World War I.
The mandate system was replaced by the trusteeship system after World War II under the Trusteeship Council. For instance, the Carolines, Marianas and Marshall Islands were placed under the trusteeship of the United States. These have been in the process of evolution and self-determination since 1986.
Taiwan. Taiwan seems to be a non-state territory which de jure is part of China. But it is too affluent and strategically located to be over
looked by international actors. It is interesting that when Taiwan sought accession to the GATT treaty it did not do so as a state but as part of a “customs territory.”
The Sovereign Order of Malta. There was a time when the order had sovereignty over Malta. This has since been lost. But the Italian Court of Cassation in 1935 recognized its international personality. Currently, it has diplomatic relations with over forty states.
The Holy See and Vatican City. In 1929, the Lateran Treaty was signed with Italy which recognized the state of the Vatican City and “the sovereignty of the Holy See in the field of international relations as an attribute that pertains to the very nature of the Holy See, in conformity with its traditions and the demands of its mission in the world.” It has no permanent population.
Chapter 6