|I. ||Substantive International Law - First Part|
|8. ||VIOLATIONS OF INTERNATIONAL LAW AND RESPONSIBILITY OF STATES|
|8.3. ||Treaty Violations|
Elettronica Sicula S.p.A. (ELSI)
Judgment of 20 July 1989
I.C.J. Reports 1989, p. 15
[p. 51] The question still remains, therefore, whether the
requisition was or was not a violation of Article III, paragraph 2 1. This
question arises irrespective of the position in municipal law. Compliance with
municipal law and compliance with the provisions of a treaty are different
questions. What is a breach of treaty may be lawful in the municipal law and
what is unlawful in the municipal law may be wholly innocent of violation of a
treaty provision. Even had the Prefect held the requisition to be entirely
justified in Italian law, this would not exclude the possibility that it was a
violation of the FCN Treaty.
[pp. 76-77] Arbitrariness is not so much something opposed to a rule
of law, as something opposed to the rule of law. This idea was expressed by the
Court in the Asylum case, when it spoke of "arbitrary action"
being "substituted for the rule of law" (Asylum, Judgment, l.C.J.
Reports 1950, p. 284). It is a wilful disregard of due process of law, an
act which shocks, or at least surprises, a sense of juridical propriety. Nothing
in the decision of the Prefect, or in the judgment of the Court of Appeal of
Palermo, conveys any indication that the requisition order of the Mayor was to
be regarded in that light.
The United States argument is not of course based solely on the findings of
the Prefect or of the local courts. United States counsel felt able to describe
the requisition generally as being an "unreasonable or capricious exercise
of authority". Yet one must remember the situation in Palermo at the moment
of the requisition, with the threatened sudden unemployment of some 800 workers
at one factory. It cannot be said to have been unreasonable or merely capricious
for the Mayor to seek to use the powers conferred on him by the law in an
attempt to do something about a difficult and distressing situation. Moreover,
if one looks at the requisition order itself, one finds an instrument which in
its terms recites not only the reasons for its being made but also the
provisions of the law on which it is based: one finds that, although later
annulled by the Prefect because "the intended purpose of the requisition
could not in practice be achieved by the order itself" (paragraph 125
above), it was nonetheless within the competence of the Mayor of Palermo,
according to the very provisions of the law cited in it; one finds the Court of
Appeal of Palermo, which did not differ from the conclusion that the requisition
was intra vires, ruling that it was unlawful as falling into the
recognized category of administrative law of acts of "eccesso di potere".
Furthermore, here was an act belonging to a category of public acts from which
appeal on juridical grounds was provided in law (and indeed in the event used,
not without success). Thus, the Mayor's order was consciously made in the
context of an operating system of law and of appropriate remedies of appeal, and
treated as such by the superior administrative authority and the local courts.
These are not at all the marks of an "arbitrary" act.
The Chamber does not, therefore, see in the requisition a measure which
could reasonably be said to earn the qualification "arbitrary", as it
is employed in Article I of the Supplementary Agreement. Accordingly, there was
no violation of that Article.
Article III paragraph 2 FCN Treaty reads as follows:
"The nationals, corporations and associations of either High
Contracting Party shall be permitted, in conformity with the applicable laws and
regulations within the territories of the other High Contracting Party, to
organize, control and manage corporations and associations of such other High
Contracting Party for engaging in commercial, manufacturing, processing, mining,
educational, philanthropic, religious and scientific activities. Corporations
and associations, controlled by nationals, corporations and associations of
either High Contracting Party and created or organized under the applicable laws
and regulations within the territories of the other High Contracting Party,
shall be permitted to engage in the afore-mentioned activities therein, in
conformity with the applicable laws and regulations, upon terms no less
favorable than those now or hereafter accorded to corporations and associations
of such other High Contracting Party controlled by its own nationals,
corporations and associations."