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UNIVERSITY OF BOTSWANA LAW JOURNAL
VOLUME 17 DECEMBER 2013
ARTICLES
Nationality as an essential ingredient of diplomatic protection:
Article 9 of the International Law Commission
Draft Articles considered............................................................................3
Amos O. Enabulele and Anthony Osaro Ewere
Who is a tribesman? An examination of the continued utility of
Section 3 of Botswana’s Administration of Estates Act...........................23
E Macharia-Mokobi
Balancing contending interests: A focus on tax harmonisation and
associated policy issues ............................................................................37
Aniyie I. Azuka
NOTES
Electoral democracy in Africa: A critique of jealousy
Mbizvo Mawarire v Robert Gabriel Mugabe N.O. and
4 Others CCZ 1/13....................................................................................55
Gift Manyatera and Chengetai Hamadziripi
The abolition of the doctrine of immutability in the
matrimonial property regime in Botswana ...............................................65
Tebogo Jobeta and Obonye Jonas
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UNIVERSITY OF BOTSWANA LAW JOURNAL

VOLUME 17 DECEMBER 2013

ARTICLES

Nationality as an essential ingredient of diplomatic protection: Article 9 of the International Law Commission Draft Articles considered ............................................................................ Amos O. Enabulele and Anthony Osaro Ewere

Who is a tribesman? An examination of the continued utility of Section 3 of Botswana’s Administration of Estates Act........................... E Macharia-Mokobi

Balancing contending interests: A focus on tax harmonisation and associated policy issues ............................................................................ Aniyie I. Azuka

NOTES

Electoral democracy in Africa: A critique of jealousy Mbizvo Mawarire v Robert Gabriel Mugabe N.O. and 4 Others CCZ 1/13.................................................................................... Gift Manyatera and Chengetai Hamadziripi

The abolition of the doctrine of immutability in the matrimonial property regime in Botswana ............................................... Tebogo Jobeta and Obonye Jonas

4 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

exception sought to be accommodated in the ILC Draft. This is in view of the strenuous reliance placed on the case in the Commentaries that accompanied the Draft article 9. The following discussion is divided into nine parts; each part discusses an aspect of the subject that is relevant to this discussion.

2. WHAT IS DIPLOMATIC PROTECTION?

‘Diplomatic protection is premised on a fiction: injury to an individual is treated as if it constituted injury to the individual’s national state, entitling the national state to espouse the claim’.^2 In practice, every State has a duty to treat an alien within its territory with the standard accepted under international law

  • defined in terms of the violations of the minimum standard of treatment of aliens, including, inter alia , internationally guaranteed human rights. 3 Where a State fails in this duty, the failure triggers the right of the alien’s State of nationality to exercise protection over the alien by arbitration, judicial settlement, by negotiation or by other means. For:

“It is an elementary principle of international law that a State is entitled to protect its subjects, when injured by acts contrary to international law committed by another State, from whom they have been unable to obtain satisfaction through the ordinary channels.” 4

A State that exercises this protection is said to have exercised its right of diplomatic protection.

3. WHO CAN EXERCISE DIPLOMATIC

PROTECTION?

In the current state of international law, only States have the faculty to exercise diplomatic protection. This protection is exercised on the basis of nationality of claims, 5 and follows the firmly established rule of customary international law that no State can exercise diplomatic protection except the State is connected by a single factor – nationality – with the individual or corporation on whose behalf the right is being exercised. As explained by Judge Read, ‘[n]ationality and diplomatic protection are closely inter-related. The general

2 Annemarieke Vermeer-Künzli, ‘As If: The Legal Fiction in Diplomatic Protection’ 18(1) EJIL 37, 37 (2007) 3 Ahmadou Sadio Diallo (Republic of Guinea v Democratic Republic of the Congo), Preliminary Objections , ICJ Rep 2007, 582, 599, para 39. 4 Mavrommatis Palestine Concession case (Greece v United Kingdom) PCIJ, Series A, No. 2 (1924) p. 12. 5 As the writers shall show later, however, there is an indication of principle in the decision of the ICJ in the Reparation for Injuries Suffered in the Service of the United Nations towards international organisations possessing the faculty to exercise the right to protect its staff by making international claims.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 5

rule of international law is that nationality gives rise to a right of diplomatic protection’. 6 The juridical basis of diplomatic protection lies in the fictional translocation of a wrong done by a foreign State to an individual as a wrong done to the individual’s State of nationality. As a result, ‘by taking up the claim of one of its subjects ... a State is in reality asserting its own rights’. 7 And from the moment a State adopts the case of its national, the dispute enters the domain of international law to become a dispute between two States.^8 Once it enters the domain of international law, the State of nationality, rather than the individual, is the sole claimant. 9 To quote Judge Read again:

“by admitting the alien, the State, by its voluntary act, brings into being a series of legal relationships with the State of which he is a national. As a result of the admission of an alien, whether as a permanent settler or as a visitor, a whole series of legal relationships come into being. There are two States concerned, to which I shall refer as the receiving State and the protecting State. The receiving State becomes subject to a series of legal duties vis-à-vis the protecting State, particularly the duty of reasonable and fair treatment. It acquires rights vis-à-vis the protecting State and the individual, particularly the rights incident to local allegiance and the right of deportation to the protecting State. At the same time the protecting State acquires correlative rights and obligations vis-à-vis the receiving State, particularly a diminution of its rights as against the individual resulting from the local allegiance, the right to assert diplomatic protection and the obligation to receive the individual on deportation ...”^10

This rule, which was for a long time was applied only to individuals, is now frequently applied to corporations, as instances of the device of transnational corporations have become a model of international economic activities. Accordingly, as it is with the protection of individuals, nationality is a core element in the international law of diplomatic protection of corporations. In simple terms, a State desirous of exercising the right of

6 Dissenting in Nottebohm ( Liechtenstein v Guatemala) (Second Phase) ICJ Rep 1955, 4, 46. 7 Mavrommatis Concession, ibid ; Panevezys-Saldutiskis Railway case, Judgment of February 28, 1939, Series A/B, No. 76, p. 17. This has been consistently followed by the ICJ as well. See Barcelona Traction, note 1, p 44 para 78. 8 See Mavrommatis Palestine Concession case (Greece v United Kingdom) PCIJ, Series A , No. 2 (1924) p.

9 Ibid. 10 Dissenting in Nottebohm (Second Phase) note 6, p. 46-47.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 7

One thread that must run through the definition of nationality of corporations under municipal laws is that nationality arises only from the fact of incorporation. There is yet no established practice of States or of courts, both municipal and international, in which nationality of claims in relation to corporation was recognised in disregard of the basic rule that incorporation alone confers nationality. Importantly, from this rule of municipal law, the ICJ has said it cannot retract. Accordingly, in Nottembohm , the ICJ affirmed that it is for Liechtenstein, ‘as it is for every sovereign State, to settle by its own legislation the rules relating to the acquisition of its nationality, and to confer that nationality by naturalization granted by its own organs in accordance with that legislation.’^18 The court explained that ‘nationality has its most immediate; its most far-reaching; and, for most people, its only effects within the legal system of the State conferring it. Nationality serves, above all, to determine that the person upon whom it is conferred, enjoys the rights and is bound by the obligations which the law of the State in question grants to, or imposes on its nationals’. 19 Having briefly stated the traditional view, the writers shall now seek to determine the extent to which article 9 of the ILC Draft Articles on Diplomatic Protection conforms to this well-established approach discussed above.

5. NATIONALITY OF CLAIMS OF CORPORATION

As stated in the preceding section, in the field of diplomatic protection, international law does not have its own rules for ascribing nationality; it relies on the rule of municipal law of the State conferring nationality in any particular instance. In doing this, however, international courts are mindful of the diversity of rules that may exists in different States with the consequence that the laws of one State may be not opposable to those of another on the question of nationality. In consequence, the court addresses itself to the concept of genuine connection between a State seeking to exercise diplomatic protection and the individual on whose behalf a case is sought to be espoused. The court uses this concept to resolve any doubt that may be cast on the right of a State of nationality to exercise protection in any particular case in which only a tenuous connection exist between the claimant State and the individual. Accordingly:

“A State cannot claim that the rules it has thus laid down are entitled to recognition by another State unless it has acted in conformity with this general aim of making the legal bond of nationality accord

18 Nottembolm, note 6, p. 20. 19 Nottembolm, ibid, p. 20.

8 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

with the individual’s genuine connection with the State which assumes the defence of its citizens by means of protection as against other States.” 20

In rationalising this position, the court explained:

“nationality is a legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties. It may be said to constitute the juridical expression of the fact that the individual upon whom it is conferred, either directly by the law or as the result of an act of the authorities, is in fact more closely connected with the population of the State conferring nationality than with that of any other State. Conferred by a State, it only entitles that State to exercise protection vis-à-vis another State, if it constitutes a translation into juridical terms of the individual's connection with the State which has made him its national.”^21

With regard to corporations, nationality is still the defining factor when considering a case of diplomatic protection. In allocating nationality to corporations, international law recognises the rule of general application under the municipal law of various nations that corporations limited by shares are a body corporate; they possess a separate legal personality from their shareholders. 22 This view was affirmed by the ICJ in Ahmadou Sadio Diallo , when it stated that ‘... international law has repeatedly acknowledged the principle of domestic law that a company has a legal personality distinct from that of its shareholders’.^23 Being a juridical person, one of the legal attributes corporations enjoy is the nationality of the State of their birth, and this is the State wherein they were incorporated. According to the ICJ:

“In allocating corporate entities to States for purposes of diplomatic protection, international law is based, but only to a limited extent, on an analogy with the rules governing the nationality of individuals. The traditional rule attributes the right of diplomatic protection of a corporate entity to the State under the laws of which it is incorporated and in whose territory it has its registered office.” 24

20 Nottembolm, ibid, p. 23. 21 Ibid , p. 23. 22 Salomon v Salomon & Company Ltd, [1897] AC, 22. 23 (Republic of Guinea v Democratic Republic of the Congo), Merits , ICJ Rep 2010, 639, 689, para 155. 24 Barcelona Traction, note 1, p. 42, para 70.

10 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

the laws of Nigeria. The implication of this necessarily complements the point already made above is that it is only the State in which a company was registered, in the absence of an agreement to the contrary, that has capacity to exercise protection over a wrong done to the company. The implication would be that the State of nationality of a parent company lacks the capacity to exercise protection in respect of a wrong done to a subsidiary of the company which was registered as a separate personality under the law of a different State to that in which the parent company was registered. This is irrespective of how varied the nationality of its shareholders may be, and how tenuous its connection with the state of incorporation may be. The ILC Draft articles materially defers from this view.

6. ARTICLE 9 OF THE ILC DRAFT ARTICLES

Article 9 of the International Law Commission Draft Articles on Diplomatic Protection (ILC Draft Articles), 2006, 28 provides:

“For the purposes of the diplomatic protection of a corporation, the State of nationality means the State under whose law the corporation was incorporated. However, when the corporation is controlled by nationals of another State or States and has no substantial business activities in the State of incorporation, and the seat of management and the financial control of the corporation are both located in another State, that State shall be regarded as the State of nationality.”

In the Commentary on this article, it was emphasised that the Draft article 9 provides is intended to establish that the State in which a corporation is incorporated is the State of nationality and thus the State entitled to exercise diplomatic protection respecting wrongs done to the corporation. It was further explained, by way of an exception to the general rule, that when the circumstances indicate that the corporation has a closer connection with another State – a State in which the seat of management and financial control are situated – that State shall be regarded as the State of nationality and thus be entitled to exercise diplomatic protection.^29 The Commentary further identified three conditions that must be cumulatively fulfilled before a State other than the State of incorporation of a corporation can be held to be its State of nationality for the purpose of diplomatic protection. These are: (a) the

28 The text was adopted by the ILO at its fifty-eight session (2006) and submitted to the General Assembly of the United Nations as part of the Commission’s Report. See Yearbook of the ILO, 2006, Vol. II Part II 29 Article 5 of the commentaries on Draft article 9.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 11

corporation must be controlled by nationals of another State; (b) the corporation must have no substantial business activities in the State of incorporation; and (c) both the seat of management and the financial control of the corporation must be located in another State.^30 In view of the reasoning of the court in the Barcelona Traction ,^31 that the grant of the right of diplomatic protection to the States of nationality of shareholders might result in multiplicity of actions which could lead to an atmosphere of confusion and insecurity in international economic relations, 32 it was stressed that the:

“Draft article 9 does not allow such multiple actions. The State of nationality with the right to exercise diplomatic protection is either the State of incorporation or, if the required conditions are met, the State of the seat of management and financial control of the corporation. If the seat of management and the place of financial control are located in different States, the State of incorporation remains the State entitled to exercise diplomatic protection.”^33

It is here observed that neither in the Draft Article 9 nor in its Commentaries was the exception sought to be introduced in the second limb of the Draft Article properly accounted for in view of the age-long practice of both national courts and international courts that nationality of corporations alone was the relevant consideration. To buttress this observation, the writers shall now discuss the Draft Article in relation to the existing customary international law as applied in the Barcelona Traction, with a view to determining whether the case which was strenuously relied upon in the Commentary points to an indication of the principle sought to be codified in the Draft Articles. In order to make their points as clearly as possible, the writers shall divide this Draft articles into two separate parts and discussed accordingly.

7. THE STATE OF INCORPORATION OF A

CORPORATION IS ITS STATE OF NATIONALITY

As regards this part, there is no controversy, in that it reflects the accepted customary international law position that the State of nationality of a corporation is the corporations State of incorporation; and that, except prescribed by agreement, it is this State that has the right to exercise diplomatic protection on its behalf.

30 Ibid. 31 Note 1. 32 Note 28, p. 111. 33 Ibid , para 6 of the Commentary.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 13

Barcelona Traction was incorporated and in whose territory it had its registered office. In order to sustain the claim, Belgium had argued that although the measures complained of were taken with respect to, and caused direct damage to the Barcelona Traction company, they constituted unlawful acts vis-à-vis Belgium because the measures also indirectly caused damage to the Belgian shareholders of the company. 35 Belgium further argued that shareholders of Belgian nationality suffered damage in consequence of unlawful acts of the Spanish authorities and, in particular, that the Barcelona Traction shares, though they did not cease to exist, were emptied of all real economic content. It was accordingly contended on behalf of Belgium that the shareholders of the company had an independent right of redress, notwithstanding the fact that the acts complained of were directed against the company as such.^36 It was thus necessary for the court to determine, inter alia : (a) whether Belgium, being the State of nationality of the shareholders was entitled to exercise the right of diplomatic protection over wrongs done to the company, when as in the circumstances of the case, Canada (the company’s State of nationality) had failed to act. This was in view of the rule of customary international law that allows only the State of nationality of the company to exercise the right of protection. In simple terms, therefore, the court had to establish whether a right of Belgium had been violated on account of the damage suffered by its nationals, as shareholders in a company which had the nationality of another State. In its decision, the court made it clear that the decisive factor was whether Belgium had a recognised international law right for which diplomatic protection may be exercised. 37 The court held that Belgium had no such right. It based its reasoning on the separate personality of companies from their shareholders, while also acknowledging that despite this concept of separate corporate personality, a wrong done to the company frequently causes prejudice to its shareholders. The court thus predicated its view on the very incidence of corporate personality under municipal law. The core element in the decision was the affirmation of the view that there is no rule of international law which expressly confers a right of diplomatic protection on shareholders' States of nationality, 38 as it refused to attach any decisiveness to the fact that the shareholders of the corporation were principally from Belgium. In Ahmadou Sadio Diallo , 39 Guinea had sought to exercise diplomatic protection respecting the conduct of DRC towards Mr Diallo, a

35 Ibid, p. 36, para 46. 36 Ibid, p. 36, para 48. 37 Ibid p. 33, para 36. 38 Ibid , p. 37, para 51. 39 Note 23.

14 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

Guinean national and two companies owed by him but incorporated in the DRC. In its judgment on preliminary objections, the ICJ held that the application was admissible insofar as it sought to vindicate Diallo's rights as an individual and Diallo's ‘direct rights’ as a shareholder in the two companies, but inadmissible in respect of the rights of the two companies which had DRC nationality. This was irrespective of the argument proffered by Guinea that the Barcelona Traction case contained an indication to an exception to the general rule, when the State responsible for the legal wrong is the State of nationality of the company. The court dismissed this proposition on the ground that state practice and decisions of international courts and tribunals did not ‘reveal – at least at the present time – an exception in customary international law allowing for protection by substitution’. 40 The writers cannot but wonder why there are so many otherwise authoritative but inaccurate analyses of Barcelona Traction. The inaccurate legal proposition put forward by Guinea above was also used by Colin Warbrick. According to him:

“In the Barcelona Traction Case, the International Court of Justice denied the existence under customary international law of an inherent right for the national State of shareholders in a foreign company to exercise diplomatic protection. However, the majority of the Court accepted the existence of a right to protect shareholders in the two cases described in Rules V and VI (when the company is defunct, and where the State in which the company is incorporated, although theoretically the legal protector of the company, itself causes injury to the company).”^41

The writers observe that Warbrick misread the context of the dictum in Barcelona Traction, while seeking to use it as justification for the very opposite view to that contemplated by the court. For the avoidance of doubt, the view of the court is as set out below:

“… further or different links are at times said to be required in order that a right of diplomatic protection should exist. Indeed, it has been the practice of some States to give a company incorporated under their law diplomatic protection solely when it has its seat (siège social) or management or centre of control in their territory, or when a majority or a substantial proportion of the shares has been owned by nationals of the State concerned. Only then, it has been held, does there exist between the corporation and the State in question a

40 Ibid, p. 614, para 86; p. 616 para 94; particularly at p. 615 para 89. 41 Colin Warbrick ‘Protection of National Abroad’ 37(4) ICLQ 1002, 1007 (1988).

16 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

Income Tax Act of the United Kingdom, which affected the appellant’s income and other interests in the company, it became fundamental to determine whether M.D. Company was a person resident or domiciled out of the United Kingdom within the contemplation of the Income Tax Act of 1936. It was suggested on behalf of the appellant that, by the law of England, a body corporate has no domicile. The revenue Commissioners determined that notwithstanding the fact that directors’ meetings and some businesses were transferred to London and that the company might also be resident in London, it was still resident in Guernsey where it was registered. The company was, therefore, not subject to income tax. 44 The Commissioners decided that the company was not subject to the income tax regime of the United Kingdom solely on the basis of its being incorporated in Guernsey. This was irrespective of the fact that the company had substantially functioned in the United Kingdom in the year under review. This decision was upheld on appeal to the King’s Bench Division of the High Court of Justice. 45 In upholding the decision Macnaghten, J the following pungent connection:

“… by analogy with a natural person, the attributes of residence, domicil and nationality can be given, and are, I think, given by the law of England to a body corporate. It is not disputed that a company formed under the Companies Act, has British nationality, though, unlike a natural person, it cannot change its nationality.” 46

A more cogent example is provided by Janson v Driefontein Consolidated Mines Ltd.^47 It is not necessary for the full facts of the case to be stated except to emphasise that the case was between a company incorporated under the laws of South African Republic (the respondent) and a company registered in the United Kingdom (the appellant). Also that the respondent company had its registered office in South Africa as well as an office in London and that a majority of its shareholders were nationals of the United Kingdom. When the dispute between the companies eventually got to the House of Lords, here are what some of the judges had to say about the relevance of incorporation to the nationality of a corporation. This was how Lord Macnaghten expressed the rule:

“My Lords, I assume that the corporation, which was the plaintiff in the action and is now the respondent here, was to all intents and

44 Ibid, p. 82-83. 45 Ibid, p. 84. 46 Ibid, p. 84. 47 [1902] AC 484.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 17

purposes in the position of a natural-born subject of the late South African Republic. I do not think it can be entitled to any exceptional favour or to any peculiar indulgence by reason of the fact, if it be a fact that the bulk of its shareholders were of European nationality. If all its members had been subjects of the British Crown, the corporation itself would have been nonetheless a foreign corporation and nonetheless in regard to this country an alien.”^48

More importantly, Lord Brampton was not prepared to grant any role to the nationality of a corporation’s shareholders in determining the nationality of the corporation, as he was of the firm view that the nationality of a corporation is governed by incorporation. In Lord Brampton’s considered view:

“The plaintiff is a company incorporated under the laws of the South African Republic ... The majority of its shareholders are subjects of the United Kingdom. The company has an office and a committee of management in England ... The company clearly must be treated as a subject of the Republic, notwithstanding the nationality of its shareholders.” 49

The same reasoning was followed by Lord Lindley, who was of the view that:

“For all purposes material for the determination of the present appeal, the company must be regarded as a company resident and carrying on business in the Transvaal [South African Republic], although not exclusively there. It was subject to the laws of that country ... If it becomes material to attribute nationality to the company it would, in my opinion, be correct to say that the company was a Transvaal company and a subject of the Transvaal Government, although almost all its shareholders were foreigners resident elsewhere and subjects of other countries.” 50

Although these cases do not represent evidence of the generality of States so as to fall into the description of general principles of law recognised by civilised nations under article 38(1)(c) of the Statute of the ICJ, they are sufficient for the purpose of this paper to showing that national courts do hold strictly to the incidence of incorporation as the determinant of nationality. This is particularly so as there is no evidence that a contrary approach exists

48 Ibid , p. 497. 49 Ibid, p. 501. 50 Ibid, p. 505.

ARTICLE 9 OF THE INTERNATIONAL LAW COMMISSION DRAFT ARTICLES 19

dual nationality and in which the State seeking to exercise protection has a tenuous connection with the subject in relation to the State against which protection was sought to be exercised. Relying on precedents from international arbitrators and courts of third States, the court observed that in cases of this nature, preference is given to ‘the real and effective nationality, that which accorded with the facts, that based on stronger factual ties between the person concerned and one of the States whose nationality is involved’. The court further stated that some of the factors to be considered in resolving a case of this nature are: (a) the habitua1 residence of the individual concerned; (b) the individual’s centre of interests; (c) his family ties, (d) his participation in public life; (e) attachment shown by him for a given country and inculcated in his children.^54 The court found that Nottebohm had spent most of his active social and economic life in Guatemala as against the very tenuous relationship he had with Liechtenstein, aside the fact of naturalisation. The court based this finding on the evidence that Nottebohm had no settled abode, no prolonged residence in Liechtenstein at the time of his application for naturalisation. The court also found that no intention of settling there was shown at that time or realised in the ensuing weeks, months or years, but that on the contrary, he returned to Guatemala very shortly after his naturalisation and showed every intention of remaining there. Based on these findings, the court held that the claim was inadmissible, as Guatemala is under no obligation to recognise a nationality granted in such circumstances. Liechtenstein was consequently not entitled to extend its protection to Nottebohm vis-à-vis Guatemala. If the ratio of this case was conducive to be applied to corporations, the ILC Draft Article 9 would have seamlessly flowed from such a principle which would allow the proximate link criterion to extend the right of protection to a State in which, in the language of the ILC Draft Article 9, the corporation has its ‘seat of management and the financial control’. However, the Nottebohm case is sharply distinguishable from a case involving a corporation, on the ground of the restriction upon the nationality of corporations – the fact that corporations are artificial beings and are thereby, unlike Nottebohm, incapable of dual nationality. It is the fact of dual nationality that results in the application of the proximate link factor with a view to determining the State with which the subject has the most effective connection. Absent dual nationality, the protected person remains under the protection of the State of nationality he is found to belong, irrespective of the insufficiency of proximity he has with the State. Perhaps, to put matters beyond doubt, the ICJ had affirmed, in addition to its decision that the proximate link criterion cannot be applied to corporations, that the close and permanent connection established between a

54 Ibid , p. 22.

20 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2013

corporation and its State of incorporation is in no way weakened by the fact that the company engaged, from the very outset, in commercial activities outside its State of incorporation, as that may well be the declared object of the company. 55 It is also conducive to quickly dismiss the argument that the ICJ endorses diplomatic protection of corporations by substitution when the State of nationality is itself responsible for the wrong done to the company. This, as pointed out above, is an incorrect view of Barcelona Traction. Indeed, the ICJ made some terse references to a situation of this nature but the court made it abundantly clear in Ahmadou Sadio Diallo^56 that the protection of companies by substitution was yet unavailable under customary international law. This is even so as the ICJ took cognisance of the use of treaties to modify the strict customary law position by allowing States other than States of nationality to protect corporations. The court specifically noted the existence of Treaties of Friendship, Commerce and Navigation between the two countries directly granting to their nationals, corporations and associations certain rights in relation to their participation in incorporations and associations having the nationality of the other State.^57 Nevertheless, the court, and rightly too, could not draw any generally accepted rule of customary international law from such treaties which are generally bilateral in nature. Indeed as has become commonplace, protection by substitution is generally allowed in investment treaties but that arrangement has not altered the customary law position. As rightly noted by Kate Parlett:

“The court's unwillingness to accept that these developments have modified the rules of diplomatic protection must be correct and does much to dispel the fallacy that mixed arbitration in this context is a morphed form of delegated diplomatic protection.”^58

10. CONCLUSION

In a nutshell, despite the various issues addressed by the above authorities, it is obvious that the common denominator as it relates to the nationality of corporations is that they are vested with independent legal identity under the laws of their State of incorporation. Therefore, like every other citizen of that State, corporations are entitled to the rights of citizens and are under obligations to obey all relevant laws of the State. Besides, irrespective of the

55 Barcelona Traction , note 1, p. 42, para 71. 56 Note 23. 57 Ibid, p. 614, para 87. 58 Kate Parlett, ‘Role of Diplomatic Protection in the Protection of Foreign Investments’ 66(3) Cambridge Law Journal, 533, 535 (2007).