The arbitration panel established to hear the dispute concluded that Mexico’s measures were in breach of its Chapter 11 obligations to afford a certain degree of protection to the investors (and investments) of the NAFTA parties and awarded damages to both the parent and subsidiary company in the amount of US$77,329,240. This arbitration award incorporated compensation for both “down-stream” and “up-stream” losses. The former includes the value of direct sale loss and associated costs suffered by CdM and is not contentious. The latter, however, represents the cost of lost sales to CdM of products manufactured by Cargill in its plant in the United States and was the subject of a recent case decided by the Ontario Court of Appeal (OCA).

Since the parties to the NAFTA dispute selected Toronto as the “place of arbitration,” Ontario courts were vested with the authority to review the panel’s award under the International Commercial Arbitration Act, RSO 1990, c 1.9, which adopted the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). In Mexico v Cargill, 2011 ONCA 622, the OCA affirmed the lower court’s dismissal of Mexico’s challenge to the jurisdiction of the panel to award up-stream damages.

In order to reach this conclusion, the OCA was tasked with identifying and framing the proper standard of review to be applied by domestic courts in reviewing the decisions of international arbitration panels. More specifically, the Court articulated when, and on what basis, an arbitration award is subject to being set aside by a domestic court on the ground that it lacks jurisdiction.

The Panel’s Decision – A disjuncture between NAFTA objectives and implementation?

In justifying the award for up-stream losses, the panel acknowledged that Chapter 11 applies only to “measures relating to investments that are in the territory of the State Party enacting the measures.” It also confronted a finding by the tribunal in Archer Daniels Midland v The United Mexican States that it lacked jurisdiction to award compensation for lost profits the claimants “would have produced in the United States and exported to Mexico ‘but for’ the Tax, as these losses were not suffered in their capacity as investors in Mexico.”

The panel in Cargill found that the business model of the claimant (i.e. manufacturing HFCS in the United States, importing into Mexico through a border facility in Texas, and distributing in Mexico through CdM’s distribution centre in Tula) was sufficiently integrated so as to constitute a cohesive, indivisible investment for the purposes of Chapter 11. Since CdM’s selling of HFCS to the soft drink industry in Mexico was contingent on its being imported from the parent company in the US, the two operations “were so associated… as to be compensable under the NAFTA.”

Unsurprisingly, the panel’s “integrated” approach to the characterization of investment may have wide-ranging implications for governments seeking to ascertain the potential costs of implementing NAFTA inconsistent regulatory measures. It is difficult to tell exactly where the line of “association” between parent companies and their subsidiaries will be drawn given the intertwined and interdependent nature of their economic affairs.

The logical corollary of an “integrated” definition of investment is a corresponding consolidation of various economic roles into a single, broad conception of “investor.” In reaching its conclusion, the panel dismissed Mexico’s argument that the losses suffered by Cargill in the US were those suffered in the company’s capacity as producer and exporter and not as an investor in CdM, its Mexican investment.

The most interesting aspect of the decision—and perhaps the most troubling—is the way in which the panel distinguished the seemingly unequivocal (although not binding) findings of the panel in Archer Daniels. The Cargill panel found that up-stream losses were justified since CdM was not a producer of HFCS and thus depended on the HFCS sold to it by the parent company, unlike the investors in Archer Daniels whose investment took the form of a more extensive, joint venture production operation in Mexico.

If the oft-cited goals of attracting foreign direct investment are to increase jobs, technology and expertise transfer, and to capture more of the value-added production chain in host states, then why would more incentives be created for companies to produce and process within their home state and simply distribute to host countries? The panel’s understanding of how to implement NAFTA Chapter 11, in other words, is not consonant with the treaty’s underlying policy objectives. Or, at the very least, the treaty’s public justification.

The OCA’s Decision – The (in)correct framing of the reasonableness standard and an (un)reasonable application of the correctness standard?

Although the OCA distanced itself from importing domestic administrative law concepts into judicial review of international investment arbitration, it still found that correctness was the appropriate standard to review jurisdictional issues. What is unclear, however, is why the Court seemed to frame the correctness standard as being a lower one than reasonableness by suggesting, at para 51:

Any time the court reviews on the reasonableness standard, it undertakes an in-depth analysis of the reasoning and decision of the tribunal in order to decide whether the result is a reasonable one… Once a court enters into a reasonableness review, it is effectively considering the merits of the tribunal’s decision and deciding whether that decision is acceptable because it is reasonable, not because it was made within the jurisdiction of the tribunal.

However, adopting a reasonableness standard for the question of jurisdiction would simply require the court to ask: “was it reasonable for the tribunal to conclude that it had the authority to enter into this line of inquiry?” and not to conduct any substantive review of the merits of the case.

Nevertheless, having adopted a correctness standard, the Court was required to determine whether or not the tribunal correctly interpreted (and acted within) its jurisdiction. Article 34(1)(a)(iii) of the Model Law allows a Superior Court judge to set aside a decision of an international arbitral tribunal where “the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission.”

Thus a tribunal’s jurisdiction is circumscribed by the scope of the parties’ submission, defined by the Court as consisting of: (1) the agreement of the parties; (2) the words of the relevant Articles from Chapter 11, and where relevant, from other chapters of NAFTA; and (3) any interpretation of those words subsequently agreed to by the NAFTA signatory parties.

In applying the standard, the Court found that the tribunal’s award of up-stream damages stemmed from its interpretation of damages arising from an investment and thus was within the scope of the submission and the NAFTA provisions.  The Court gave two examples of scenarios where a tribunal would fail to meet this correctness standard: if it made a finding in relation to an investment in Brazil (i.e. a non-party to NAFTA) or in relation to a period of time which was not contemplated by the parties to the arbitration. The court’s posture, in other words, is a highly deferential one.

Both Canada and the United States appeared as intervenors in the appeal and supported Mexico’s position that the only compensable damages are those suffered in the territory of the Party where the investment is located and not losses suffered by the investor in its home business operation. A proper application of the correctness standard on the issue of jurisdiction would presumably give adequate consideration and weight to the statements of the parties to NAFTA as to the proper interpretation of the treaty (i.e. the third component of the scope of “submission” identified by the Court). The Court, however, simply found that these statements do not constitute “a clear, well-understood, agreed common position.” What would constitute a clearer common position, however, was not explained.

Overall, while the task of “navigat[ing] the tension between the discouragement of courts to intervene on the one hand, and on the other, the court’s statutory mandate to review for jurisdictional excess” is no doubt a complicated, politically sensitive one, the need to calibrate a sufficiently precise, conceptually sound standard for judicial review of international arbitration remains an outstanding project after Cargill.

In a decision released November 25, the SCC in Németh v. Canada (Justice), 2010 SCC 56 (“Németh”), unanimously allowed the appeal. (The same ruling took effect with respect to Németh‘s twin decision, Gavrila v. Canada (Justice), 2010 SCC 57, in which Romania requested the extradition of Tiberiu Gavrila after his conviction for forging visas.) The decision did not come with blanket immunity, however. In a case that beheld a battle between Canada’s various international obligations, the SCC ruled that individuals with refugee status do not necessarily escape extradition. However, the Minister’s decision regarding the Némeths was unreasonable because he had applied the wrong legal test and incorrectly placed the burden on the Némeths to show a continuing risk of persecution.

The Omnipotent’s Dilemma

In 2001, Jószef and Jószefne Németh and their children arrived in Canada seeking refugee protection. They alleged a fear of persecution in their homeland of Hungary because of their Roma ethnic origin. In three incidents between 1997 and 2001, Mr. Németh (and once with his wife) had been attacked by Hungarian citizens for his Gypsy heritage. The Minister of Citizenship and Immigration granted the Németh family refugee status.

In 2003, Hungary issued an international arrest warrant for the Némeths for selling a right of lease in Budapest that they did not actually possess. The Minister sought and was granted an order from the Superior Court of Quebec that confirmed the Némeths’ committal as a Canadian offence of fraud under s. 380(1) of the Criminal Code. He then ordered their surrender.

The Némeths and the interveners argued that Canada’s Extradition Act (the “EA“) ought not to apply to refugees so as to avoid a conflict between the EA and the Immigration and Refugee Protection Act (the “IRPA“). The potential conflict concerned the international “principle of non-refoulement” rooted in Article 33 of the UN Convention Relating to the Status of Refugees (the “Refugee Convention“) and re-articulated in s. 115(1) of the IRPA. In Németh, the Court described non-refoulement as a principle that

prohibits the direct or indirect removal of refugees to a territory where they run a risk of being subjected to human rights violations. The object of the principle is the prevention of human rights violations and it is prospective in scope.

The Minister argued that any tension between extradition and non-refoulement was already addressed by the EA in sections I will soon discuss. On this issue the SCC agreed with the Minister.

Harmony: A traditional way of looking at our legislation

First, Justice Cromwell, writing for the Court, accepted that the protection against refoulement in Article 33 of the Refugee Convention included protection against extradition. The article states:

Article 33. – Prohibition of expulsion or return (“refoulement”)

1. No Contracting State shall expel or return (“refouler”) a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.

However, the corresponding provision in the IRPA only specified general “removal.” Section 115(1) reads:

115. (1) A protected person or a person who is recognized as a Convention refugee by another country to which the person may be returned shall not be removed from Canada to a country where they would be at risk of persecution for reasons of race, religion, nationality, membership in a particular social group or political opinion or at risk of torture or cruel and unusual treatment or punishment.

Justice Cromwell decided that the term, “removal,” referred to “removal orders” in the IRPA and therefore had a specialized meaning within that Act that did not include removal by extradition.

Rather, the Court held that ss. 44(1)(a) and (b) of the EA specified the grounds on which the Minister must refuse to surrender a person sought. Section 44(1)(b) in particular reads:

44. (1) The Minister shall refuse to make a surrender order if the Minister is satisfied that

….

(b) the request for extradition is made for the purpose of prosecuting or punishing the person by reason of their race, religion, nationality, ethnic origin, language, colour, political opinion, sex, sexual orientation, age, mental or physical disability or status or that the person’s position may be prejudiced for any of those reasons.

In a detailed analysis of international treaties, Justice Cromwell concluded that s. 44(1)(b) and its inclusive protection of human rights were what gave effect to Canada’s international non-refoulement obligations where the extradition of a refugee was requested. The provision’s drafting was, according to the Court, inspired by the European Convention on Extradition and the UN’s Model Treaty on Extradition, which were both considerably influenced by the Refugee Convention. Therefore, the extradition of refugees was already considered in Canada’s EA and there was no conflict between the EA and the IRPA.

No, Minister

With the Némeths’ extradition looming menacingly near, Justice Cromwell then decided that the Minister’s decision in this case was still unreasonable because he had applied the wrong legal principles. The Court concluded that:

1. The Minister did not grant sufficient consideration to the Némeths’ status as refugees, particularly under the “prejudiced position” branch of s. 44(1)(b) (which the Court determined to be distinct from “prosecution by reason of ethnic origin” in the first part of the provision).
2. The Minister erred in requiring the Némeths to prove, on a balance of probabilities, that persecution would occur should they be returned to Hungary. Both the IRPA and the Refugee Convention pointed to a burden of establishing only a risk of persecution.
3. The Minister wrongly imposed the burden of proof on the Némeths. As they had already been granted refugee status, it would be unfair for them to be compelled to show – six years later – that they still required refugee protection. Rather, the burden of proving that refugee status ought to be terminated should have fallen on the state.

In the end, Justice Cromwell allowed the appeal and remitted the matter back to the Minister for reconsideration.

A Fine Balance

After eighty pages, Justice Cromwell and the SCC had delivered a carefully reasoned judgment that meticulously sought out Canada’s position in a labyrinth of international obligations. On one hand, Canada was bound to the protection of refugees by international treaties such as the Refugee Convention and Canada’s own commitment to human rights and the security of the person – note the Canadian Charter of Rights and Freedoms. On the other hand, Canada also had a responsibility to international extradition agreements between states, including the Model Treaty on Extradition, facilitated by Canada’s domestic EA.

The SCC’s final stance – both giving some and taking some – may have been predictable, but in my opinion, it also represented a reasonable balance of Canada’s international responsibilities. Extradition can be a serious impairment of individual autonomy and, as is clearly expressed in s. 44(1) of the EA, surrender should be refused for certain reasons including oppression and discrimination. It would seem equally unfair, however, to refuse the surrender of an individual facing criminal charges merely based on refugee status, particularly if circumstances in the home country had changed and a risk of persecution no longer existed. The Court may have been overreaching in asserting that the principle of non-refoulement was encapsulated in s. 44(1)(b) – and in the “prejudiced position” part of the provision in particular.  However, I think the drafting of the section was sufficiently ambiguous to come to broader inferences, which is what the Court did here in reaching a reasonable and balanced conclusion.

Article 33 of the Refugee Convention may prohibit the refoulement of a refugee in “any manner whatsoever,” but I would agree with Justice Cromwell that refugee status is temporal. If a risk of persecution no longer persists, it may well be that an individual is no longer considered a refugee. This idea is bolstered by ss. 108 and 109 of the IRPA, which allow the Minister of Citizenship and Immigration to apply for an order to cease refugee protection. The fact that the Minister must be the party to initiate the application likewise indicates that the government ought to bear the burden of proving that refugee status should be terminated. This too was the Court’s conclusion and one of the reasons for deciding that the Minister’s decision was unreasonable.

Although there were no sweeping victories in this ruling, the SCC rendered a closely reasoned decision that will set a much clearer precedent for future extradition cases. I might also add that it is very welcome to see Justice Cromwell finally baring some of his own colours and delivering a strong judgment for the Court. We have much to look forward to as next year’s docket comes around. Happy Holidays!

In contrast, the Canadian government was successful in fighting off a Chapter 11 claim by the United States chemical manufacture Chemtura Corporation. The company contended that Canada’s ban on the use of the chemical lindane as a pesticide damaged its related investments.

The decision of the NAFTA tribunal in Chemtura v. Canada, Award of the Arbitral Tribunal (Aug 2, 2010) [Chemtura] is notable for demonstrating that foreign corporations may be held to a relatively high burden when attempting to demonstrate a contravention of Chapter 11. And even though Canada triumphed in this instance, significant resources were expended to protect a government decision taken for a public purpose.

Background and Facts

Lindane was first introduced into Canada in the late 1930′s. Since then, it has been designated as a possible carcinogen, an environmental contaminant, and identified as the cause of various additional negative health consequences in humans and animals, including death. The chemical has been banned or had its use restricted in numerous countries. For instance, Japan banned lindane in 1971, Germany in 1988, and New Zealand, Austria, Brazil and Norway have done the same. However, Canada has merely restricted it use. For example, while it is no longer permitted to be used in pesticides in this country, it is still an active ingredient in shampoos used to treat head lice.

Chemtura manufactured a lindane-based pesticide used to treat canola seeds. By the time Canada was considering banning lindane the US had already prohibited its use. As a result, two Canadian national canola industry groups grew concerned with the sale of lindane treated canola products to the US. Voluntary measures were put in place, in collaboration with Canada’s Pest Management Regulatory Agency (“PRMA”) (the federal regulator of pest control products), to phase out the use of lindane for canola seed treatment in Canada.

Every manufacturer affected by the measure in Canada agreed to this voluntary phase out except Chemtura. In 2001, a lindane review was completed and the PRMA decided that regulatory action banning its use on canola seeds was necessary. Chemtura attacked the ban in various forums by challenging the decision process utilized by the PRMA. Unsuccessful, the company sought arbitration before a NAFTA tribunal.

The Seeds of a NAFTA Dispute

NAFTA arbitrations are guided by the United Nations Commission on International Trade Law (“UNCITRAL”) arbitration rules. Tribunal members are temporarily appointed on agreement by the parties to the dispute. Relevant international law and NAFTA are relied upon by the tribunal in making its determinations and the tribunal is not bound by precedent set by it and other international dispute resolution bodies.

Chemtura alleged that Canada violated numerous NAFTA provisions when it banned lindane for use as a pesticide. I will briefly outline the most significant allegations for the purposes of this article and later will focus on the expropriation claim under article 1110.

First, pursuant to articles 1105 (minimum standard of treatment), 1103 (most favoured nation) and 1110 (expropriation), the company claimed compensation for the losses attributed to the ban. Per article 1105, Chemtura contented that it did not receive, as the provisions states, “treatment in accordance with international law, including fair and equitable treatment and full protection and security.” As well, pursuant to article 1103, the company alleged that it received less favourable treatment than similar investors.

The chemical manufacturer demanded approximately $79 million in damages and costs associated with the arbitration—expert and legal fees, and related taxes and interest. In short, the NAFTA tribunal found that the lengthy regulatory process and related decision were acceptable; and considering the worldwide treatment of Lindane, Canada was well within reason to ban its use as a pesticide.

The tribunal’s decision regarding articles 1105 and 1103 was reasonable. The review process conducted by the PRMA was thorough, fact intensive, and inclusive of Chemtura’s concerns. The decision to ban lindane was neither hasty nor arbitrary and was based on widely accepted data recognizing lindane as the dangerous chemical it is.

The Tribunal Denies Chemtura’s Expropriation Claim under Article 1110

In addition to the dubious assertion that Canada’s decision to ban lindane was not in accordance with due process of law, Chemtura argued that its related investments were indirectly expropriated contrary to article 1110(1). The provision states:

No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment (“expropriation”), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law…; and

(d) on payment of compensation…

A three step test must be employed to evaluate an expropriation claim. The tribunal must determine:

(i) whether there is an investment capable of being expropriated, (ii) whether that investment has in fact been expropriated, and (iii) whether the conditions set in Article 1110(1)(a)-(d) have been satisfied…”

Furthermore, according to the NAFTA tribunal decision in Pope v. Talbot, Decision and Order By the Arbitral Tribunal (Mar 11, 2002) [Pope], an indirect expropriation must involve the “substantial deprivation” of an investment. (In Pope A US based operator of softwood lumber mills in British Columbia claimed that the implementation of the Softwood Lumber Agreement between the US and Canada violated Chapter 11.)

In this case, Chemtura argued that the ban on lindane represented an indirect expropriation of its related investment. The tribunal agreed on this point, stating that the dispute did involve an “investment capable of being expropriated.” According to article 1139, an investment is defined in part as an “enterprise…” The tribunal and both parties agreed that the enterprise was not solely the lindane product, but Chemtura as a whole, including related elements such as “goodwill, customers or market share…”

To fall within the scope of expropriation, Chemtura had to be substantially deprived of the investment. According to the tribunal, the “substantial deprivation test” is a fact-based assessment unique to the individual circumstances at hand.  Factors such as the share of business represented by the investment are taken into consideration, as well as the degree of control over the operations, and which party exhibited control.

In this case, the lindane business was only a small part of Chemtura’s operations. In addition, its yearly sales based on its additional business lines grew during the period the ban was instituted. Finally, the Canadian government did not interfere into the business of Chemtura other than to institute the ban. Thus, Canada did not control Chemtura to the point of expropriation. According to the tribunal “the evidence shows that the measures did not amount to a substantial deprivation of the Claimant’s investment.”

In the end, the tribunal ruled that an expropriation did not take place. This seems just, as the contrary decision would have seen the Canadian government having to provide compensation to a private company over an action that was non-discriminatory, for a public purpose, and in accordance with due process of law.

Questions Regarding the Definition of Enterprise

I’m inclined to agree with the tribunal’s determination, for the most part. Based on the facts presented, the actions taken by the Canadian government, and the applicable law, the test of expropriation was clearly not met. Most significantly, Canada did not take control of the Chemtura enterprise, thereby failing to meet one element of the “substantial deprivation” test.

I only take issue with the meaning of “enterprise.” As mentioned, per article 1139, an “investment” is defined in part as an “enterprise…” The eventual definition agreed upon by both parties was that the Chemtura Corporation as a whole was the “enterprise” or “investment” allegedly expropriated.

However, in previous tribunal decisions the definition of “investment” has been given a much greater scope. For instance, in Feldman v. Mexico, Final Award (Dec 16, 2002), the NAFTA tribunal defined an investment as “almost every type of financial interest, direct or indirect…” Furthermore, according to article 1139 of NAFTA, an investment is also defined, in part, as:

(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory…

(i) contracts involving the presence of an investor’s property in the territory of the Party…

(ii) contracts where remuneration depends substantially on the production, revenues or profits of an enterprise;

It is not immediately clear how the lindane product line could not fall somewhere within the above definition. However, the control element of the “substantial deprivation” test would not have been met even if the tribunal accepted a broader definition.

Ultimately, if the definition of an “enterprise” remains as narrow before future tribunals not bound by precedent, this is likely a plus for NAFTA opponents, as it would presumably be more difficult to establish expropriation where only a fraction of a corporation’s business interests have been affected.

Conclusion

In this case, a corporation was able to challenge a Canadian regulatory decision before a tribunal comprised of foreign nationals, merely because their investment was negatively impacted. The NAFTA tribunal in Chemtura included Prof. Gabrielle Kaufman-Kohler, a practicing lawyer and law professor at the University of Geneva; Charles N. Brower, an American Judge of international disputes; and Prof. James R. Crawford of the University of Cambridge in the UK.

Even though Canada was successful, a significant amount of resources had to be expended to defend against the claim. In the end, the total costs associated with the arbitration, (including a $4000 per day fee for each tribunal member) amounted to almost $9 million US, with Canada’s outlay at just under $6 million.

Chemtura was ordered to cover the entire cost of the arbitration, however it was found responsible for only one-half of Canada’s associated legal costs not related to the direct operation of the tribunal. Ultimately, the Canadian taxpayer spent $3 million to defend a challenge to a decision with a significant public purpose taken by a democratically elected government.

Also, Newfoundland announced that it would seek leave to appeal from the SCC of a related decision by the Quebec Superior Court (AbitibiBowater Inc. (Arrangement relatif à), 2010 QCCS 1261), affirmed by the Quebec Court of Appeal (Newfoundland v. AbitibiBowater Inc., 2010 QCCA 965), that Newfoundland’s environmental protection orders compelling Abitibi to clean up certain expropriated sites were claims subject to bankruptcy protection claims procedures. (TheCourt.ca reviewed the Quebec decisions here.)

This article will focus on the NAFTA claim and outcome.

Background and Facts

Abitibi was a failing company as a result of the worldwide drop in demand for newsprint resulting from the proliferation of internet based news sources. A US incorporated pulp and paper manufacturer, it operated throughout the province of Newfoundland for over a century. In 2008, the company announced that its last operating mill, located in Grand Falls-Windsor, would close in 2009. This marked the end of its active operations in the province.

However, Abitibi still retained numerous property rights, assets, and undertakings within Newfoundland amounting to well over $300 million. This included interests in hydroelectric facilities, surface rights, and paper mills, many purchased either from the province or third parties for proper consideration.

Less than two weeks after the final closure was announced the province rushed through the Abitibi-Consolidated Rights and Assets Act, S.N.L. 2008, c. A-1.01 (“Abitibi Act”), which expropriated the majority of the company’s provincial assets. In part, this canceled water and hydroelectric contracts and agreements between the province and Abitibi, ongoing legal proceedings Abitibi had against the province, and blocked Abitibi’s access to Newfoundland’s courts. In response, the company filed a Notice of Arbitration and Statement of Claim (pdf link) under NAFTA Chapter 11 seeking redress for the expropriation in the amount of $500 million.

(An overview of facts of the related NAFTA dispute was outlined by TheCourt.ca in a previous post. They were repeated here.)

Newfoundland Violated NAFTA Chapter 11

The controversial Chapter 11 of NAFTA provides foreign corporations which are parties to the NAFTA agreement with the right to make a claim against the state if actions taken by the government negatively affect a company’s investments. According to Abitibi:

damages…resulted out of the measures undertaken by Canada, through the actions of its constituent political subdivision the provincial Government of Newfoundland and Labrador…Canada is internationally responsible for these measures, which are a breach of its obligations under Section A of the Chapter Eleven of NAFTA…

The claim by Abitibi alleged that Articles 1110, 1105, 1102 and 1103 of NAFTA were breached. A cursory review of the applicable law and related facts demonstrates that, from a legal perspective, Newfoundland was clearly in the wrong.

Pursuant to Article 1110(1) of NAFTA, Canada is prohibited from expropriating the Canadian investments of a US company without a valid reason. The provision states:

No Party may directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment (“expropriation”), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law…; and

(d) on payment of compensation…

The expropriation was clearly discriminatory, Abitibi argued. Other companies that faced financial difficulties in the province had not been subjected to similar treatment. Furthermore, Abitibi contended, the Act was rushed through the legislature and the company was not given the opportunity to respond “in accordance with due process of law…”

In fact, according to the NAFTA claim, the company received a letter on a Friday demanding that it surrender “to the Province its entitlement to [Newfoundland's] natural resources…” by midday of the following Monday. Abitibi responded on Monday with a request to discuss the issue. On Tuesday, the province passed the Abitibi Act, the assets were expropriated, and compensation was not provided.

According to Article 1105, Canada must “accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security…” Obviously, this was not the case. Finally, Articles 1102 and 1103 compel Canada to treat foreign investors in the same manner as their domestic counterparts. As discussed, this did not happen.

Conclusion

The only possible argument that Canada could have made was that the expropriation was done for a public purpose pursuant to Article 1110, outlined above. For example, the Abitibi Act was put into force following the decision of the company to close the mill in the city of Grand Falls. Later, Premier Williams provided the laid-off workers with severance payments. This could be interpreted as an indication of his desire to compensate workers and that the expropriation of assets was done to accommodate this. However unlikely, a successful public purpose argument would only satisfy one requirement of Article 1110(1). Ultimately, compensation was not provided, the expropriation was conducted in a discriminatory manner, and not in accordance with due process of law.

It is important to note that the question presented to the ICJ solicited its assessment on the declaration’s accordance with international law and not its “legal consequences.” In other words, the ICJ did not consider whether Kosovo could now assume statehood under international law but instead whether it made the declaration of independence in accordance with international law.

A Brief History of the Relationship between Kosovo and the UN

In June of 1999, the UN Security Council (SC) passed Resolution 1244, On the Situation Relating Kosovo, S RES 1244, UN SCOR, 1999, in an attempt to begin to resolve the humanitarian crisis related to the armed conflict in Kosovo. The resolution provided for a civilian and security presence in Kosovo with the goal of developing democratic self-governing institutions. It also included a call for the Federal Republic of Yugoslavia (now Serbia) to withdraw its forces and for the Kosovo Liberation Army (KLA) to demilitarize. In addition, a constitutional framework was instituted under which the UN and Kosovo shared legislative and governing authority.

From 2005 to 2007, during which the UN conducted a thorough review of the situation, and following unsuccessful negotiations with Serbia and Kosovo, it was concluded that the “only viable option for Kosovo is independence…” Following that, elections were held for the Assembly of Kosovo (the national governing body) and municipalities. The Assembly met in an official capacity for the first time in January of 2008. On February 17, 2008, it adopted a declaration of independence. In part, it stated:

We, the democratically-elected leaders of our people, hereby declare Kosovo to be an independent and sovereign state. This declaration reflects the will of our people and it is in full accordance with the recommendations of [the] UN…

Serbia claimed that the declaration was legally ineffective and represented a “unilateral secession of a part” of its territory. The National Assembly of Serbia declared it null and void.

A request for an advisory opinion on the declaration of independence was submitted by the General Assembly of the UN. The ICJ accepted written and oral submissions by 35 member states (including Iran, the United Kingdom, the United States and Slovakia) regarding their opinion on the issue.

The ICJ Rules in Favour of Jurisdiction

The first issue considered by the ICJ was whether it had the jurisdiction to provide the advisory opinion. Article 65, paragraph 1 of the Statute of the International Court of Justice states:

The Court may give an advisory opinion on any legal question at the request of whatever body may be authorized by or in accordance with the Charter of the United Nations to make such a request…

To find that it possessed the jurisdiction to provide an advisory opinion, the ICJ had to satisfy the criteria set out in Application for Review of Judgement No. 273 of the United Nations Administrative Tribunal, Advisory Opinion, [1982] I.C.J. Rep. 333 (pdf). Accordingly, if the advisory opinion was requested by an organ of the UN and regarded a legal question “arising within the scope of the activities of the requesting organ” it was within the jurisdiction of the ICJ. (The UN has six principle organs including, among others, the SC and the ICJ).

It was argued by detractors that pursuant to Article 12, paragraph 1 of the Charter of the United Nations, Can. T.S. 1945 No. 7. (“UN Charter”), the General Assembly “shall not make any recommendation with regard…” to “any dispute or situation” currently under consideration by the SC. Thus, since the SC had been the primary UN organ handling the Kosovo conflict, a related advisory opinion was beyond the scope of the ICJ. The ICJ quickly and reasonably disposed of this counter-argument by noting that an advisory opinion is not a “recommendation.”

Concerning the competence of the organ to make the request, the ICJ referred to Article 96 of the UN Charter which authorizes the General Assembly to make requests for advisory opinions. Moreover, Article 10 refers to the scope of the matters to come before the General Assembly, which include the circumstances at issue in the present case, and Article 11 states that the General Assembly has the competence to consider “any questions relating to the maintenance of international peace and security brought before it by a Member of the United Nations…”

Finally, the ICJ ruled that questioning whether a declaration is in accordance with international law is clearly legal in scope. It was countered that a declaration of independence is a political act governed by domestic law and that the ICJ only dealt with issues of international law. This argument was rejected by the ICJ. While the declaration possessed both legal and political aspects, one did not deprive it of the other. Of course, if accepted, the proceedings would have stopped at this stage and the issue of Kosovo’s independence would have implicitly become a domestic matter.

According to the ICJ, “the Court has a discretionary power to decline to give an advisory opinion even if the conditions of jurisdiction are met…” Only “compelling reasons” would require that the court decline to provide an advisory opinion. This determination does not care about the “motives behind the request”, whether the “opinion might lead to adverse political consequences”, or that the request came from the General Assembly despite the SC’s lengthy involvement with the Kosovo issue. On the last point, the ICJ stated:

the fact that a matter falls within the primary responsibility of the Security Council for situations which may affect the maintenance of international peace and security and that the Council has been exercising its powers in that respect does not preclude the General Assembly from discussing that situation or, within the limits set by Article 12, making recommendations with regard thereto.

Excluding the General Assembly from discussing or making recommendations on matters being considered by the SC, and thereby requiring the ICJ to deny the request for an advisory opinion, may have had the effect of further concentrating power in the SC. The veto power available to members of the SC already furnishes them with substantial authority relative to the remaining states. To hold that matters already under consideration by the SC could not be discussed by the General Assembly would further distort the imbalance.

In the end, The ICJ reasonably rejected the argument that there were compelling reasons not to provide an advisory opinion. Kosovo has been under UN auspices for a decade or more. It would be illogical that the UN central judicial organ could not provide an advisory opinion on the very situation the UN cultivated through its intervention in the conflict.

The Unilateral Declaration of Independence is in Accordance with International Law

Freed of concerns surrounding jurisdiction and discretion, the ICJ then considered whether the declaration was in accordance with international law but not whether Kosovo had achieved statehood under international law. The ICJ noted the difference by referring to the SCC decision in Reference by the Governor-General concerning Certain Questions relating to the Secession of Quebec from Canada, [1998] 2 S.C.R. 217, where the question, in part, asked if international law provided the right for Quebec to secede from Canada unilaterally, and accordingly, whether Quebec had “a right to self-determination under international law” so that it could secede unilaterally.

According to the ICJ, the international law of self-determination developed in the second half of the twentieth century created “a right to independence for the peoples of non-self-governing territories and peoples subject to alien subjugation, domination and exploitation…” It cannot reasonably be argued that the citizens of Quebec have been subjugated, dominated or exploited. This was the crucial difference.

Several member states argued that the principle of territorial integrity set out in Article 2, paragraph 4 of the UN Charter protected the territorial integrity of Serbia. The relevant Article states:

All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State, or in any other manner inconsistent with the Purposes of the United Nations.

But, as noted by the ICJ, this article explicitly applies to relations between “States.” Kosovo is not a state. Because Kosovo had been subjugated, dominated and exploited its right to self-determination was evident. Therefore, the declaration of independence was ruled to be in accordance with international law.

Finally, in a dissenting opinion by Judge Koroma (pdf), it was argued, in part, that the declaration is contrary to international law and the agreed upon constitutional framework provided under Resolution 1244, and also a violation of the principles of territorial integrity and state sovereignty. Yet, it is curious as to why Judge Koroma did not reference the unique circumstances of the Kosovo situation in terms of the armed conflict. His arguments may stand without this consideration. But, as the majority ruled, it is in those special circumstances that international law supports the right to self-determination.

Recently, Justices Shi Jiuyong of China and Thomas Buergenthal of the United States announced their resignations from the International Court of Justice (“ICJ”), both before fulfilling the nine-year terms they were elected to. As a result, two special elections for their replacements will be held in June and September of this year respectively.

The ICJ, at times referred to as the World Court, is the central judicial branch of the United Nations. Its purpose is to handle the disputes of member states and advise UN bodies. For instance, Australia recently announced that it will challenge Japan’s whaling practices before the ICJ.

The ICJ is composed of 15 Justices who serve terms of nine years. If a judge resigns before that period has ended, the position is filled through a special election. The replacement judges will fulfill the remainder of the retiring judge’s terms.

The Statute of the International Court of Justice (“Statute”) provides the framework under which the ICJ functions. It is comprised of 70 Articles, dealing with, for example, organization (Articles 2 to 33) and procedure (Articles 39 to 64). Article 2 states:

The Court shall be composed of a body of independent judges, elected regardless of their nationality from among persons of high moral character, who possess the qualifications required in their respective countries for appointment to the highest judicial offices, or are jurisconsults of recognized competence in international law.

Article 3 holds that only one nominee per state can be elected to the ICJ. Nominees are normally submitted by the national groups of the Permanent Court of Arbitration, an international dispute resolution body. A consolidated list of nominees is then submitted to the General Assembly and Security Council for election by a majority of all members.

Traditionally, nominees from the permanent members of the Security Council have been guaranteed election. Both China and the US are permanent members therefore it is likely that a nominee from those two countries will be elected to replace the retiring Chinese and American judges.

Presently, the ICJ is an all-male judicial body. In fact, there has only been one permanent female judge. This could change as the US has nominated Joan E. Donoghue to serve the remainder of the term of retiring Judge Thomas Buergenthal. Donoghue is currently the US State Department’s Principal Deputy Legal Adviser. In this role she advises Secretary of State Hillary Clinton in matters dealing with international law. She taught law at the University of California-Berkeley, Georgetown, and the George Washington School of Law. She earned her law degree from Berkeley.

China’s nominee is Xue Hanqin, Chinese Ambassador to the Association of Southeast Asian Nations (ASEAN), Legal Counsel to the Ministry of Foreign Affairs and Member of International Law Commission. Hanqin has an LL.M and J.S.D. from Columbia. She has served as the Chinese Ambassador to the Netherlands and in various legal roles throughout the Chinese Ministry of Foreign Affairs. She has taught law at Wuhan University School of Law and Beijing University.

The nomination of two women is a welcome addition to a presently all-male institution.

Elena Kagan and Judicial Activism

Earlier, TheCourt.ca commented on a replacement for retiring United States Supreme Court Justice John Paul Stevens. As readers may be aware, the President chose US Solicitor General Elena Kagan, and with confirmation hearings scheduled to begin Monday, a brief update on her nomination is warranted.

In recent weeks, the media has reported on documents related to Kagan’s tenure under former President Bill Clinton, served in part as Associate White House counsel. In response, Republicans on the Senate judiciary committee are threatening to boycott the hearings unless they are given time to review the documents. They are also requesting access to 1600 documents not released for reasons of confidentially. As well, the Sunlight Foundation, an organization dedicated to government transparency and accountability, has provided access to Kagan’s emails from her White House days.

Failed Supreme Court nominee Robert Bork has argued that Kagan is not qualified to be a Supreme Court Justice. According to reports, Kagan’s admiration for former Israeli Justice Aharon Barak is seen by Bork as indicative of her activist philosophy.

The typical refrain from the Republicans is that a Democratic nominee will inevitably engage in judicial activism once on the bench. In other words, they will interpret and apply the law with regard to their own personal and public policy views. Conservative judges, however, will supposedly demonstrate judicial restraint.

Judicial activism was measured in a study by Paul Gewirtz and Chad Golder and summarized in an op-ed in the New York Times. According to the authors of the study, judicial activism can be measured by counting the numbers of times a USSC judge has voted to strike down a congressional law. Overall, Gewirtz and Golder came to the conclusion that the more “liberal” justices were the least activist:

We found that justices vary widely in their inclination to strike down Congressional laws. Justice Clarence Thomas, appointed by President George H. W. Bush, was the most inclined, voting to invalidate 65.63 percent of those laws; Justice Stephen Breyer, appointed by President Bill Clinton, was the least, voting to invalidate 28.13 percent. The tally for all the justices appears below.

Thomas 65.63 %

Kennedy 64.06 %

Scalia 56.25 %

Rehnquist 46.88 %

O’Connor 46.77 %

Souter 42.19 %

Stevens 39.34 %

Ginsburg 39.06 %

Breyer 28.13 %

One conclusion our data suggests is that those justices often considered more “liberal” – Justices Breyer, Ruth Bader Ginsburg, David Souter and John Paul Stevens – vote least frequently to overturn Congressional statutes, while those often labeled “conservative” vote more frequently to do so. At least by this measure (others are possible, of course), the latter group is the most activist.

The first posting from our three Summer Editors begins on Wednesday, May 5. We begin the summer schedule with the following posting by Editor-in-Chief Professor Craig Scott.)

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On April 27, 2010, House of Commons Speaker Peter Milliken handed down his ruling on whether the Government had breached Parliamentary privilege by failure to comply with the House of Commons’ December 10, 2009, Order that the Government must produce uncensored copies of documents in a list of categories. (See Ruling on the Questions of Privilege Raised on March 18, 2010, by the Member For Scarborough—Rouge River (Mr. Lee), the Member for St. John’s East (Mr. Harris), and the Member for Saint-Jean (Mr. Bachand) Concerning the Order of the House of December 10, 2009, Respecting the Production of Afghan Detainee Documents.)  The House was, and is, seeking documents relevant to Canada’s policy and practice of transferring detainees to Afghanistan authorities and to concerns of Canadian involvement in incidents or even a pattern of torture notably by Afghanistan’s National Directorate of Security.

Today, May 3, 2010, Canadian Lawyer Online is publishing in parallel with the present posting my opinion piece entitled “Parliamentary Privilege After Milliken: What process should emerge from the Speaker’s Ruling?”  Readers may wish to read that piece first before turning to the below Open Letter sent to Members of Parliament Michael Ignatieff, Bob Rae and Ujjal Dosanjh on May 2.

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The Honourable Michael Ignatieff, MP,

The Honourable Robert K. Rae, MP

The Honourable Ujjal Dosanjh, MP

May 2, 2010

Dear Mr. Ignatieff, Mr. Rae, Mr. Dosanjh,

I am writing to Mr. Ignatieff in his capacity as Leader of the Official Opposition and to Mr. Rae and Mr. Dosanjh as the members of the Special Committee on the Canadian Mission in Afghanistan who have taken the lead for the Liberal Party. I am writing to you with my unsolicited view on matters involving the House process that is being negotiated with the Government after Speaker Milliken’s ruling. I hope you will indulge me this opinion, given that Mr. Rae and Mr. Dosanjh will know I have been following the work of the Special Committee – and the issues at stake – very closely. This letter is an open letter and may be posted on www.TheCourt.ca on May 3 or on May 4.

I believe the NDP and the Bloc Québécois are correct (a) not to be willing to re-purpose Mr Iacobucci from his current role acting for the Government, and also (b) to insist there can be no filter on production of documents seen by the designated MPs (what information can then be made public is a separate issue/stage). I would like to address these conjoined questions, followed by a note on the nature of the time that will be needed for designated MPs to examine documents produced under the House of Commons Order of December 10, 2009. Finally, I note a separate comment I have written, to be published tomorrow, May 3, 2010, by Canadian Lawyer online (www.canadianlawyermag.com) to which I refer you for two other process points, one relating to the Canada Evidence Act and one relating to information flows to relevant police services.

By way of preface, it is relevant to establish – and emphasize – Mr. Iacobucci’s present status. You will know that the Government wishes to keep referring to Mr Iacobucci as “Justice Iacobucci.” This is an honorific that, by custom, can be used in relation to a retired judge, and I have used it myself in relation to Mr. Iacobucci (who has earned it no less than any other former Supreme Court justice). But the heavy-handed emphasis on this form of address – see Ministers’ answers to questions in Question Period of March 15 for a flavour [appended] – has clearly been done to create the impression of stature and third-party neutrality. Indeed, it would not be too much of a stretch to suppose the Government wishes to plant in the mind of the average Canadian that the Government appointed an acting judge, as opposed to having hired a lawyer who once was a judge. As well, even as the Government designates him as “Independent Adviser” (in his Terms of Reference), he is presently acting in some sort of capacity as a confidential adviser that will probably turn out to be a solicitor-client relationship with the Government.

Indeed, we are entitled to assume that Mr. Iacobucci and the Government view him as having been hired to give legal advice. Part of the problem is that, to my knowledge, the Government has not been up-front about whether they consider themselves to have hired a lawyer qua lawyer, but, when push comes to shove, that is almost certainly the capacity in which Mr. Iacobucci will turn out to have agreed to act. I am assisted in this supposition by the failure of both Ministers Nicholson and Baird to specify Mr. Iacobucci was not hired qua lawyer in answers to questions by both Mr. Rae and Mr. Dosanjh in the House on March 15, 2010. On that occasion, both of you referenced what you assumed was Mr. Iacobucci’s role as a lawyer in your questions. Mr. Dosanjh referred to the Government having “hired …yet another lawyer” and expressed concern that Mr. Iacobucci “will not be able to release his report to the public if the government claims solicitor-client privilege.” Mr. Rae said in the same session, “There is a difference between starting a public inquiry and simply finding a new lawyer who does not have the power to do the necessary work.” That both questioners assumed Mr. Iacobucci was acting as lawyer is clear as day; neither Minister having corrected this impression, I conclude that it must be the case. By the way, it may well be that the Government has since confirmed that Mr. Iacobucci is acting as the Government’s lawyer in his capacity as “Independent Adviser” but I have not been able to confirm this from a search of Hansard or the news reports.

In my opinion, the House does not now have time, within the deadline given by Speaker Milliken, to sort out the complexities of what it means, from a practical and/or legal-professional perspective, for Mr. Iacobucci to simply move over from the Government as his “client” (you will recognize that this was Speaker Milliken’s own very pointed choice of word in his ruling) to being some sort of adviser (lawyer?) to the House. For example, there may be things he has been told or heard from Government officials or Government lawyers that could constrain what he can say or do if he moves over from advising the Government – unless the Government waives solicitor-client confidentiality entirely. Just a couple examples may suffice. If the Government considers certain sets of documents (by subject-matter or by type of document) to not fall within the list of document categories of the House’s Order of December 10, 2010 – a list that Minister Baird said, on March 15, would be the basis for Mr. Iacobucci receiving all documents he wishes to see – and has told this to Mr. Iacobucci in response to a query from Mr. Iacobucci, is this confidential information from a solicitor-client perspective? Or, if, again despite what was said in the House, the Government actually declined to give a specific document or set of documents to Mr. Iacobucci, or is in some sort of to-and-fro with him over whether a document is relevant, will he be able to tell the House of the document’s existence? Or, if Mr. Iacobucci generated a series of queries of the Government in an effort to make sure he was getting all the documents he felt entitled to receive, are those queries – and their results – confidential?

In light of such examples, do the Opposition parties really want to spend time arguing with the Government that they must waive any confidentiality in Mr. Iacobucci’s previous relationship with the Government? Have no doubt that such waiver is an absolute must. Also, there are Law Society of Upper Canada Rules of Professional Conduct that indicate that a lawyer cannot switch sides in the same matter without the consent of the former client. Will the Government take the view that their “Independent Adviser”, who is also their lawyer, will also be the House’s lawyer whatever label the House gives to his advisory role? One must assume this will be their likely interpretation, and so, at minimum, you would need also to get the Government’s explicit (not just implicit) consent to allow him to act for the House. Perhaps the Government will act with an uncharacteristic attitude of accommodation and provide both the confidentiality waiver and the new-client consent without a tussle, but the game (of securing Mr. Iacobucci’s services) is certainly not worth the candle if the government hems and haws on this.

Quite apart from the foregoing, Mr Duceppe was correct to note that Mr. Iacobucci voluntarily accepted to serve a cloaked process that was clearly, indeed palpably, designed by the Government to sidestep the Order of the House of December 10, 2009, and more generally to keep Parliament and the public out of the picture as much as possible. There are issues related to the appearance of independence in the eyes of the public that Mr. Duceppe may have been getting at, and which need to be taken seriously.

However, in my view, especially if the House process is going to rely on a single adviser or give one adviser a paramount role, I believe the House would benefit much more from the advice of legal professionals – not to mention one or more non-lawyer experts in security matters (e.g. former head of CSIS Reid Morden) – who both have no current connection to the Government and are, as well, knowledgeable about (indeed, ‘wise to’) the tendency of the Government at large, the military and the intelligence services to employ arguments that cast an exceptionally wide net over information.

Such a tendency is very much a problem with respect to the criterion of “international relations” as one of the three criteria for treating information as sensitive and thus secret. This term, found in Mr. Iacobucci’s Terms of Reference and taken from the Canada Evidence Act, is simultaneously extremely broad and undefined, such that one’s executive-leaning perspectives could well become important in giving content to that criterion if it is kept as a criterion within the House process. It is enough that “national security” and “national defence” – the two other criteria in both the Canada Evidence Act and the Iacobucci Terms of Reference – can be argued by the Government to be very broad indeed, and that the Government will be able to call upon a phalanx of seasoned and oft-pugnacious in-house Government lawyers to argue against release of information to the public. In such a context, the House needs to be fully empowered with an advisory team who one really should be looking to be counter-weights to what the Government will throw at MPs.

If, once the House’s own advice is taken care of, a third-party actor is needed to mediate or arbitrate on what can be released for public view, note that there are well-situated sitting judges who may well be asked to assist the process. Justice O’Connor of the Ontario Court of Appeal (and of the Arar Commission of Inquiry) comes to mind immediately. The Arar Commission was a very different process from the Internal Inquiry regarding Mr. Almalki (and others) that was run by Mr. Iacobucci. The Arar Commission was one in which the public interest in transparency was central to the role Justice O’Connor had to play – a context much closer to the upcoming House process, I would suggest, than the behind-closed-doors baselines of the Almalki Internal Inquiry presided over by Mr. Iacobucci. I would add that Justice O’Connor gained immense experience tussling with the Government over a wide range of information-related issues versus the much more limited difference of opinion Mr Iacobucci had over several pages of observations in the Almalki Inquiry context.

There is another sitting judge who is highly respected (at least, outside Government and, I suspect, by most Government lawyers as well) for how he handles national security law cases. Judge Richard Mosley of the Federal Court has the reputation of being a truly neutral and even-handed judge. He seems to have an independent cast of mind and, in security-related cases before him, does not accept uncritically what the Government and intelligence services argue. For example, he seems to be demanding when presented by the Government with arguments based on the “mosaic theory.” On that ‘theory’, as you will know, even an innocuous piece of information can be argued (indeed, argued more or less on the basis of ‘trust us, we know’) to be sensitive information on the basis that, if it is added to other innocuous pieces of information that may also get into the public domain, a mosaic emerges that, in the hands of adversaries, may harm Canada’s national security. Whatever the extent of the validity of the mosaic theory, it is easy to imagine the abuse of the theory and the corresponding need for a seasoned response to its invocation.

If there is one theme to the above, it is this: it is important that the decision-making process of MPs – once the documents are seen by designated MPs – leans as much as possible towards transparency rather than replicating the instincts of this Government (and, to be fair to this Government, by times previous Liberal Governments as well) to keep almost everything possible from the public.

I have worn out my welcome by now, I am sure, but please allow me to comment on one further matter. Commentators seem to be repeating, somewhat unreflectively, the notion that, since thousands of pages are potentially at issue, sorting through them could take ages – and this then gets linked to some parties’ concerns not to lose MPs to a process of sitting in a room sifting through documents. With respect, this notion seems to be based implicitly on the false assumption that all these documents will need to be gone over with a fine-tooth comb, as if each and every one stands an equal chance of needing to be redacted. However, this would not seem to be the case, because designated MPs’ task will naturally be to look for material relevant to the concerns that have been raised for the last many months. This involves concentrated skim-reading, not close reading of everything nor redaction. When potentially relevant documents are noticed, they can be pulled for a closer read and then for discussions and likely debate on possible redaction. Even then, redaction will only be necessary at the stage at which the question is the release of documents to the public versus, for example, an in camera session of the Special Committee.

If, on the other hand, the concern is that MPs on the Special Committee wish to be able to debate and publicly comment on what may turn up in the documents, without fear of inadvertently giving away anything that is truly sensitive information (because they will have seen the non-redacted version prior to the creation of the redacted public version), then there is no choice but for redaction decisions to be made by some House process other than the Special Committee before getting to the Special Committee. But it would be a grave error to think that this pre-Special Committee process would not itself need to have MPs as part of it. MPs must indeed be part of it, and, as outlined above, they need to be familiar enough with the detainee transfer issue to be able to efficiently find the most relevant documents (in the skim-reading process I noted above). Yet, again, even this redaction process should not be anywhere near as time-consuming as many seem to be assuming because this is not a situation of every single document needing to be excised of sensitive information before it gets to the Special Committee. Vast numbers of documents with sensitive information may fall within the broad categories of documents indicated in the December 10 House Order but be of no interest, or of no immediate interest, to the Special Committee, and therefore redaction does not come into the picture for these documents and is therefore not part of the time equation.

Thank you for considering these views. I wish you, your colleagues in the other Opposition parties, and the Government well in the negotiations this week.

Yours sincerely,

Craig Scott, Professor of Law,

Director, Nathanson Centre on Transnational Human Rights, Crime and Security,

Osgoode Hall Law School,

4700 Keele St, Toronto, Ontario, M3J 1P3, Canada

APPENDIX – Extracts from March 15, 2010, Hansard

Afghanistan

Hon. Bob Rae (Toronto Centre, Lib.):

Mr. Speaker, last week the Prime Minister of Canada said in the House that Justice Iacobucci would conduct a thorough inquiry into the issue of Afghan detainees. At the end of the week, we learned that Justice Iacobucci does not even have the power to subpoena new documents.

Why did the government not do what the Prime Minister promised last week?

[English]

Hon. John Baird (Minister of Transport, Infrastructure and Communities, CPC):

Mr. Speaker, here is what the Prime Minister did say in this place last week. He said that he had requested Justice Frank Iacobucci to undertake an independent, comprehensive and proper review of all the redacted documents related to Taliban prisoners. Justice Iacobucci will look at all the relevant documents going back not just with respect to this government but even to the previous government.

He will report on the proposed redactions, how they genuinely relate to information that would be injurious to Canada’s national security, national defence or international interests. We should have confidence in a man of this gentleman’s esteem.

[Translation]

Hon. Bob Rae (Toronto Centre, Lib.):

Mr. Speaker, we have the utmost confidence in Justice Iacobucci; that is not the question. It is not him that we have a problem with, it is the government. There is a difference between starting a public inquiry and simply finding a new lawyer who does not have the power to do the necessary work.

I have a very simple question: why not have a public inquiry to finally get to the bottom of things?

[English]

Hon. John Baird (Minister of Transport, Infrastructure and Communities, CPC):

Let me be very clear, Mr. Speaker. Justice Iacobucci will have access to all relevant documents. He will be able to review them. He will be able to undertake his activities in an independent fashion. He will be able to do it comprehensively. He will have the ability to review all of the documents and report back not just to Canadians but to this House.

We should trust Justice Iacobucci and let him do his work.

Hon. Bob Rae (Toronto Centre, Lib.):

Mr. Speaker, we trust Mr. Iacobucci. We do not trust the government. That is the difference, and there is a big difference.

Mr. Iacobucci does not have the power to subpoena the documents. The test of relevance is a test that the government itself will apply. It is not Mr. Iacobucci who determines what relevance is.

Again, I ask the minister, why not have a public inquiry and give Mr. Justice Iacobucci the powers that he so richly deserves to do the job that Canadians want him to do? That is the question.

Hon. John Baird (Minister of Transport, Infrastructure and Communities, CPC):

Mr. Speaker, we have said Justice Iacobucci will be able to look at all relevant documents. How does one find relevant documents? Exactly from the motion the Liberal leader put forward. He can also look at all documents related to this issue.

Also, he will not need to subpoena documents because the government has been incredibly clear that we will provide him with all of the relevant documents. Let Justice Iacobucci conduct his review, let him report back to Parliament, let him report back to Canadians who have confidence in a man of this character.

Hon. Ujjal Dosanjh (Vancouver South, Lib.):

Mr. Speaker, instead of being asked to conduct a full public inquiry, a respected jurist has been hired as yet another lawyer by the government. He will only see what the government gives him. He will report to the government. He will not be able to release his report to the public if the government claims solicitor-client privilege.

If the government really wanted answers, it would give Mr. Iacobucci the mandate to conduct a full public inquiry, or are there horrible secrets that the government is trying to hide?

Hon. Rob Nicholson (Minister of Justice and Attorney General of Canada, CPC):

Mr. Speaker, that is completely untrue. As we have indicated and as was indicated in the terms of reference, Mr. Justice Iacobucci will have access to all relevant documents. He will complete a proper review and he will report those general findings to the public. This should have the support of the hon. member.

Hon. Ujjal Dosanjh (Vancouver South, Lib.):

Mr. Speaker, according to the terms of reference, the government will decide what is relevant and give it to Mr. Iacobucci. He will not have the power to subpoena other documents or the authority to release his opinion publicly. He will not be able to reveal the whole story to Canadians and there is no end date for his work to be completed. We are right back where we started.

Why will Mr. Iacobucci not “conduct a thorough inquiry”, as the Prime Minister said last week? What damning secrets is the government trying to hide?

Hon. Rob Nicholson (Minister of Justice and Attorney General of Canada, CPC):

Mr. Speaker, we are providing all the documents that are of interest to the members of the House, and we are going beyond that. We are going back to 2001, which was the beginning of our involvement in Afghanistan.

Mr. Justice Iacobucci will have complete authorization to have a look at those. Again, he will report those general findings back to the House.

Though the affair has occasioned much protest in Spain, commentators elsewhere, such as Professor Eric Posner and the American Enterprise Institute’s Marc Thiessen, find little to oppose in Garzon’s “comeuppance”. Posner, for instance, strikes a particularly vindicated tone in the Wall Street Journal, writing that “this trial marks the end of a failed experiment in international justice” and “should be a warning to those who place their faith in the [International Criminal Court] to right the world’s wrongs.” I would argue that Garzon’s indictment only serves to highlight the cognitive dissonance in the argument as a whole. Universal jurisdiction, particularly its national exercise as complement to the ICC, hardly needs to be abandoned simply because a single “super-judge” has been accused of overreach. Nor does the idea need to be written off on the grounds that, without a recognized universal authority, the current political order requires that a presumptively benevolent American guarantor/hegemon be exempt from principles that its own post-WWII governments largely established, and from which universal jurisdiction’s norms are derived. In this case, the peculiar circumstances surrounding Garzon’s indictment make a mush of one of universal jurisdiction’s more plausible criticisms. The criticism holds that judges like Garzon, assumed to be armed only with judicial abstraction and lacking knowledge about local sensitivies and nuances, may undermine the efforts, in the aftermath of severe civil convulsion, towards reconciliation of historical divisions in the states whose leaders they presume to judge.

Spain provides a good illustration of the sort of polity for whom legal “reconciliation” seems to have accomplished little. Enacted upon Franco’s death and the restoration of the constitutional monarchy, Spain’s 1977 Amnesty Law provided that all crimes committed by either side during the Civil War, and which were characterized by “political intention”, were immune to prosecution. For the period between 1939 and 1975, the amnesty applied broadly, though only to the remaining side. Thus, Garzon’s charges (brought by a trio of rightist Spanish organizations that includes Franco’s nominal corporate heir, Falange Espanola) stem from his inquiries, abandoned in 2008, into “the killings of 114,000 people at the hands of Franco’s supporters during the 1936-39 civil war and the dictatorship that followed”, as well as contemplating the “exhumation of at least 19 mass graves.” The judge’s defenders distinguish between “political” crimes committed by the state and and those that constitute crimes against humanity; in Garzon’s words, “any amnesty law that seeks to whitewash a crime against humanity is invalid in law.” Garzon’s opponents uphold the amnesty law’s validity, and the illegality of what they maintain is his retroactive application of Spanish universal jurisdiction law.

It does not appear that recent Spanish governments, not to mention the country’s remarkably politicized judiciary, have paid the amnesty any more than lip service. In 2007, Jose Luis Zapatero’s Socialist government enacted its Law of Historical Memory, which “provided for state help to families wanting to open the mass graves to recover and identify the victims, promised the removal of fascist statuary and symbols from public places, and outlawed political rallies at the [Franco-built] Valley of the Fallen, which had become the focus of modern fascist activities.” The law appropriately promised only “moral redress” to Franco’s victims, “explicitly condemned Franco’s dictatorship…and nullified all Franco-era criminal law and punishments on the grounds that ‘they were defective in form and substance.’”

Responding in part to Garzon’s 1998 attempt to have General Pinochet extradited from the UK, Henry Kissinger cautioned in 2001 that magistrates wielding universal jurisdiction tend to “substitute [their] own judgment for the reconciliation procedures of even incontestably democratic societies where alleged violations of human rights may have occurred.” Whatever its (debatable) pertinence to Chile’s example, though, Kissinger’s criticism thins in light of post-Civil War Spain. Given the remarkable continuities among Spain’s political antagonists, and the sheer sweep of its 1977 Amnesty Law, one could justifiably say that Kissinger’s objections are as ungrounded and insensible to local difference as are his targeted magistrates. Relative to, say, South Africa’s Truth and Reconciliation Commission, upon whose warm, particularist memory the critics of universal jurisdiction seem to rely, the guarantees of amnesty in Spain’s “reconciliation procedures” are instrumental, less to do with candid political self-examination than expediency and universal immunity for the state and its agents.

How, then, should Spain’s 1977 amnesty be regarded, both legally and in terms of national reconciliation? Kissinger says, “The decision of post-Franco Spain to avoid wholesale criminal trials for the human rights violations of the recent past was designed explicitly to foster a process of national reconciliation that undoubtedly contributed much to the present vigor of Spanish democracy.” The notion of healthy democratic “vigor” seems exceedingly strange in context of Garzon’s indictment, as well as its source in a vestigial fascist party’s objection to the exhumation of seven decades’-old mass graves. Discussing the Chilean junta’s own amnesty (which it granted to itself in 1978), Professor William Burke-White writes that blanket amnesties are perforce illegitimate. Characteristically, they are disconnected from the wounded body politic in both purpose and effect, “effectively erasing a decade or more of abuse, repression and violations with the stroke of a pen”. Worse, according to Burke-White, such amnesties typically fail to provide victims with any means of civil or (non-criminal) investigative redress, which is surely prerequisite to the sort of “organic” political reconciliation that Garzon’s critics claim to be defending. Granted, Spain’s post-Franco amnesty is distinguishable from the Chilean example Burke-White condemns, not least because the amnesty enjoyed broad support from both left and right at the time the law was passed. As well, even recent Spanish commentators such as leftist historian Andreu Mayayo can write, in response to those “who argue Spain needs a kind of Nuremberg Trial to set things to right,” that post-Nuremberg de-nazification was marked by “timidity”, and that it is reasonable to ask “what a realistic alternative to the 1977 legislation would have been.”

But the real question is not so much what Spain should have done instead of enacting its blanket amnesty so much as it is what it should do now. Perhaps Spain should not be busying itself erasing all physical remnants of Franco’s regime. But Baltasar Garzon’s abortive investigations into Franco-era crimes and mass graves, though they may have contravened the letter of the 1977 amnesty and are the occasion of a good deal of schadenfreude (though not yet much in the way of useful criticism of universal jurisdiction), were notable for their sobriety and balance. That is, Garzon’s investigations displayed the sort of sobriety and balance that Garzon’s critics maintain is both intrinsic to a nation’s reconciliation with a violent past, as well as inimical to juridical “zealots” that claim to exercise universal jurisdiction.

Slahi affirms the recent line of jurisprudence (culminating in Canada (Prime Minister) v. Khadr, 2010 SCC 3) concerning the applicability of section 7’s right to life, liberty, and security of person to Canadians detained at Guantanamo Bay. Of course, “Canadian” may be a misnomer in Mr. Slahi’s case: he is a landed immigrant, which the Federal Court of Appeal ruled disqualifies him from the benefit of Charter protections overseas.

The plain language of section 7 extends its protection to “everyone”, not just citizens.  Such a broad classification would initially seem to include persons of the claimant’s status.  However, as Justice L’Heureux-Dubé rather sardonically observed in R. v. Cook, [1998] 2 S.C.R. 597, “I am not convinced that passage of the Charter necessarily gave rights to everyone in the world, of every nationality, wherever they may be, even if certain rights contain the word ‘everyone’.”

“Everyone” has been previously found to include non-Canadians claiming Charter protections abroad where circumstances establish a nexus with Canada. During his detention at Guantanamo Bay, Mr. Slahi was interviewed by representatives from the RCMP and Canadian Security Intelligence Service about matters relevant to his pending habeas corpus petition. Records from this interview were subsequently forwarded to U.S. authorities. Further, Mr. Slahi resided in Montreal between November 1999 and January 2000, after having been granted landed immigrant status. The question before the court was whether the Canadian government’s participation in Mr. Slahi’s interrogation and/or his residency status sufficiently connected the claimant with Canada such that his section 7 rights were engaged.

Mr. Slahi’s nationality at public international law was a central issue. Nationality — the essential link between an individual and the state – is legally founded in domestic law which controls its acquisition and loss. It forms the basis of a state’s jurisdiction over persons, both human and juridical, beyond its territory. Canadian “nationals” include both citizens and non-citizens that are entitled to rights and benefits implicit in the conferral of nationality, including Charter protection in certain extraterritorial contexts. Nationality is acquired by birth or by naturalization; this latter occurs when an alien receives Canadian nationality upon an application made by him.

Recalling that Mr. Slahi was born in Mauritania but resided in Canada for a few months upon being granted landed immigrant status, Justice Evans of the Federal Court of Appeal agreed with the lower court’s determination that granting such status does not amount to conferring nationality such as would trigger Charter rights or ground an attempt by Canada to seek jurisdiction over the claimant’s person. As Mr. Slahi is not physically present in Canada, subject to a criminal trial currently pending in Canada, or (yet) a Canadian citizen, his circumstances were not found to establish a nexus with the state that merited an extraterritorial extension of section 7’s reach. The fact the claimant was interviewed by Canadian officials was found irrelevant to the inquiry, as the court was not prepared to extend the Charter’s applicability beyond that which had already been decided in previous cases.

Mr. Slahi has filed a claim for seventeen grounds of relief with the United States District Court for the District of Columbia stemming from an alleged denial of due process and incidents of torture and cruel or inhuman treatment during his detention at Guantanamo Bay. I am instinctively (and perhaps idealistically) loathe to deny even the possibility of Charter protection to any person with a connection to Canada, especially someone alleging that he was the victim of such misconduct. I also understand, however, that the reach of domestic law is necessarily delimited by principles of sovereignty and judicial comity and cannot practically extend to all persons with a mere incidental link to the state.

It must be noted, however, that there is a paucity of evidence on the issue of whether the Canadian state officials who interviewed Mr. Slahi were at all complicit in the impugned process at Guantanamo Bay. If such complicity could be proven, the claimant should be deemed subject to state jurisdiction: those officials’ actions would create a nexus with Canadian government sufficient to engage the Charter. Additionally, the Canadian government may be held liable for damages originating from its officials and resulting in injustice under the international law of state responsibility for injury to aliens.

In this case, the Federal Courts were reticent to even speculate on the possibility that Canada was affiliated with the abuses alleged by Mr. Slahi. The absence of corroborating evidence likely informed their conclusion that the claimant was subject to the jurisdiction of the United States, not Canada, while he was detained at Guantanamo. Accordingly, the American legal process — with its own attendant legislated rights and protections for detainees – is the most appropriate avenue for potential redress for the wrongs allegedly suffered by persons in Mr. Slahi’s situation. While this prospect may be of little consolation to the claimant, it seems (in my view) a necessary alternative given that international law, Canada’s constitutional framework, and broader geopolitical realities do not support his position.

It is highly appropriate that Lord Hope quotes the following statement of Lord Bingham in the opening to the decision:

[W]e are entitled to be proud that even in that extreme national emergency there was one voice—eloquent and courageous—which asserted older, nobler, more enduring values: the right of the individual against the state; the duty to govern in accordance with law; the role of the courts as guarantor of legality and individual right; the priceless gift, subject only to constraints by law established, of individual freedom (at para.6, citing The Case of Liversidge v. Anderson : The Rule of Law Amid the Clash of Arms (2009) 43 The Int’l Lawyer 33 at 38).

Lord Hope goes on to recognize the unquestionable and fundamental duty of the judiciary: “Even in the face of the threat of international terrorism, the safety of the people is not the supreme law. We must be just as careful to guard against unrestrained encroachments on personal liberty” (at para.6).

Ironically, the SCC’s decision in Khadr (2010 SCC 3) was released the same week as this decision. It may be unfair to compare and contrast the two decisions in a technical-legal sense: the UKSC decision is essentially about the legal overreaching of the executive without Parliamentary oversight. Nonetheless, the politically symbolic significance cannot be overstated. Where the SCC backed down, the UKSC stepped up. Finding a clear human rights violation by the Canadian Government, the SCC decided to remain silent on any remedial order. The UKSC, on the other hand, quashed an executive order and went on to not even allow the executive the benefit of time through a suspended declaration. In terms of similarities, like Khadr, the UK case also involved foreign affairs (arguably moreso because it involved the UK Government’s obligations, not discretionary policies, as a Member-State of the United Nations).

Background

The UN Framework to Fight Transnational Terrorism Finance

In the late-1990s, the United Nations took a series of steps in response to the rising threat of terrorism (and to actual terrorism, such as the 1998 coordinated US Embassy bombings at Dar-es-Salaam, Tanzania and Nairobi, Kenya; the 2000 bombing of the U.S.S. Cole; and the foiled Y2K bomb plots). Chief among these was a concerted effort to thwart the transnational flow of the financing that backed terrorism. In 1999, the UN General Assembly adopted the International Convention for the Suppression of the Financing of Terrorism requiring each State Party to create criminal offences prohibiting terrorism financing (GA Res.54/109 (1999), art.4).

During the same period, the UN Security Council adopted a series of resolutions obliging all UN Member-States to adopt measures to “[f]reeze without delay the funds and other financial assets or economic resources of” people and groups associated with Al-Qaida, the Taliban, and Usama Bin Laden, as well as other suspected terrorist individuals and organizations listed under the “Consolidated List” (starting with SC Res.1267(1999) and continuing with resolutions 1333(2000), 1390(2002), 1455(2003), 1526(2004), 1617(2005), 1735(2006), 1822(2008) and 1904(2009)).

Member-State Responses

In response to the Convention and the Security Council resolutions (and perhaps more importantly, in the wake of the 9/11 attacks), all UN Member-States adopted varying measures and submitted reports to the Security Council’s “Al-Qaida and Taliban Sanctions Committee.” Canada, for example, introduced amendments to the Canada Criminal Code and the Proceeds of Crime (Money Laundering) Act through the Anti-Terrorism Act (2001, c. 41) to introduce criminal sanctions for various terrorism finance offences. Canada also created the United Nations Al-Qaida and Taliban Regulations (SOR/99-444) and the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism for a legal mechanism to freeze accounts and assets of suspected terrorists or terrorism financiers.

UK Terrorism Acts and Orders

The United Kingdom adopted the Terrorism Act 2000, the Anti-terrorism, Crime and Security Act 2001 and the Counter-Terrorism Act 2008, among others, to fulfil its obligations under the International Convention for the Suppression of the Financing of Terrorism. To facilitate financing freezes, the UK established the Terrorism (United Nations Measures) Order 2001 (SI 2001/3365 as am. by SI 2006/2657 and SI 2009/1747) (the Terrorism Order) and the Al-Qa’ida and Taliban (United Nations Measures) Order 2002 (SI 2002/111 as am. by SI 2006/2952) (the AQT Order).

The two Orders in Council gave Her Majesty’s Treasury (“HMT”) the ability to “designate” a person under the Order and to restrict all others from “dealing with” the designated person (catching “every conceivable kind of transaction in respect of funds and economic resources” (at para.26)). The Terrorism Order and the AQT Order created a rigorous and relentless regime of financial freezes that affected all aspects of a designated person’s life, restricting even the financial dealings of his or her family members (e.g. a freeze on social security benefits to the spouse of a designated person).

The Facts

In unrelated communications during 2005-2007, HMT informed the appellants Hani El Sayed Sabaei Youssef; Mohammed al-Ghabra; and Mohammed Jabar Ahmed, Mohammed Azmir Khan and Michael Marteen (formerly known as Mohammed Tunveer Ahmed) that they had been declared “designated persons” under the Terrorism Order.

Ahmed, Khan, and Marteen had never been charged or detained for any terrorism-related offences. HMT informed them that it had “reasonable suspicion” that they were, or “may be,” facilitating acts of terrorism based on evidence obtained from an Al-Qa’ida operative. Both Youssef and al-Ghabra were deemed designated persons by the HMT because they were listed on the Consolidated List of the UNSC Al-Qaida and Taliban Sanctions Committee. Al-Ghabra had links with previously convicted UK terrorists and had been under MI5 survellance for some time. Youssef was an Egyptian lawyer with sympathetic views towards Islamists. He had been arrested on terrorism charges in 1998 but the charges had been dropped and he had been released shortly thereafter. (See [2010] UKSC 2 at paras.32-36; “The five alleged terrorists,” Telegraph.co.uk (27 Jan 2010)).

Judicial History

Ahmed, Khan, Marteen, and al-Ghabra commenced judicial review proceedings in the UK Administrative Court to have the directions against them set aside. The judge at first instance quashed both Orders in Council, holding them to be ultra vires ([2008] EWHC 869 (Admin)). The Court of Appeal allowed the HMT’s appeal in part: instead of holding the entire Orders ultra vires, the Court of Appeal quashed the directions issued against the four individuals ([2008] 3 All ER 361). In Youssef’s case, the court at first instance also found the Orders to be ultra vires but declined to quash the Orders ([2009] EWHC 1677(Admin)). Youssef appealed directly to the House of Lords and the two cases were heard together at the UK Supreme Court.

UKSC Reasoning

The seven UK Supreme Court Lords delivered five separate judgments in the case with Lord Hope delivering the lead judgment. In terms of the result, the seven judges were unanimous that the Terrorism Order was ultra vires in its entirety and held by a majority of six-to-one that article 3(1)(b) of the AQT Order was ultra vires.

From the very beginning of his decision, Lord Hope took a severe stance towards the laws in question, variously describing the measures as “drastic,” “oppressive,” and “draconian.” He noted the grave violations of human rights that these measures entail, e.g., severe limits on access to basic necessities and effectively restricting the freedom of movement of designated persons and making them “prisoners of the state.”

The primary legislation from which the HMT derives its authority is s.1(1) of the United Nations Act 1946, which reads:

If … [the UN] Security Council … [calls upon the] United Kingdom to apply any measures … , His Majesty may by Order in Council make such provision as appears to Him necessary or expedient … , including … provision for the apprehension, trial and punishment of persons offending against the Order.

Lord Hope noted that the section leaves the question of whether a provision is “necessary or expedient” to the executive (at para.43) but retorted that “[i]f the rule of law is to mean anything, decisions as to what is necessary or expedient in this context cannot be left to the uncontrolled judgment of the executive” (at para.45). Where Parliament confers a general power or authority, such authority cannot be used contrary to the basic principles of law or in a manner that adversely affects the legal rights of citizens unless this is expressly stated in the conferring statute.

Tracing the legislative history of the 1946 Act, he concluded that Parliament did not intend to give “unlimited” discretion to the executive through s.1(1), especially where it was being used for coercive measures against citizens. Necessity and expediency require that any Order made under s.1(1) can only be legitimate where it does not interfere with fundamental human rights. Further, the Order has to remain in strict proximity to the UN Security Council resolution which requires the measure and cannot have greater impact “than is necessary and unavoidable to give effect” to the resolution.

The Terrorism Order relied on a “reasonable suspicion” test to determine whether an individual could be designated under it. Lord Hope found this mechanism to go beyond the purview of UNSC res.1373(2001). The UNSCR 1373(2001) refers to individuals “who commit, or attempt to commit, terrorist acts” and does not go far enough in allowing restrictions on individuals based on reasonable suspicion. Thus the Court found that the Terrorism Order was ultra vires the executive and that such a measure could not be taken without proper Parliamentary scrutiny.

The AQT Order, on the other hand, does not rely on a reasonable suspicion test to designate individuals under it. This was the crux of the dissent of Lord Brown, who found that the Order “faithfully implements” the UNSCRs and ought to be upheld in its entirety. The issue in the AQT Order was its reliance, through art.3(1)(b), on the UN Consolidated List procedure, which does not provide for an appeal or judicial review procedure. Having no means to challenge the decision to be listed as terrorists and no access to a hearing before an impartial and independent judge meant that art.3(1)(b) must be quashed.

Administrative Law, not Human Rights

Besides quashing the particular Orders, the Court also expanded its reasoning to clarify that the decision would apply to other similar Orders had they been before the Court as well. The fundamental point of the UKSC decision is the principle of legality that “fundamental rights may not be overridden by [a statute conferring administrative or executive powers through] general words” (at para.76).

It is important to stress that the UKSC decision is couched in administrative law. It is clear from the decision that, despite the grave violations of human rights, it notes that the UKSC would uphold the same law if it is implemented through primary legislation. (Of course, the Terrorism Acts provide for greater opportunities for human rights violations.) Although Lord Brown dissented on one point, his reliance on Lord Hoffman’s statement (what Lord Brown dubbed “the Simms principle”) fully articulates the UKSC’s position:

Parliamentary sovereignty means that Parliament can, if it chooses, legislate contrary to fundamental principles of human rights… . But the principle of legality means that Parliament must squarely confront what it is doing and accept the political cost. Fundamental rights cannot be overridden by general or ambiguous words. This is because there is too great a risk that the full implications of their unqualified meaning may have passed unnoticed in the democratic process. In the absence of express language or necessary implication to the contrary, the courts therefore presume that even the most general words were intended to be subject to the basic rights of the individual (at para. 193, citing R. v. Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 at 131).