Public International Law Key Insights: State-to-State Disputes

April 19, 2024

Armenia v. Azerbaijan: on April 19, 2024, the public hearings on preliminary objections raised by Azerbaijan in the case concerning the application of the International Convention on the Elimination of All Forms of Racial Discrimination ("CERD") concluded. Azerbaijan requested the International Court of Justice ("ICJ")to (i) issue a judgment dismissing Armenia's application entirely and (ii) declare lack of jurisdiction ratione materiae regarding Armenia's claims concerning alleged violations by Azerbaijan. Armenia, in response, requested the rejection of both preliminary objections raised by Azerbaijan.

The case stems from a long-standing dispute between Armenia and Azerbaijan over the Nagorno-Karabakh region, characterized by decades of conflict. In September 2020, violence erupted in the region, accompanied by reports of alleged human rights abuses and alleged violations of international humanitarian law. On September 16, 2021, Armenia filed an application with the ICJ, alleging violations of the CERD" by Azerbaijan.

Considering the consent of the parties, the subject matter falling within the ICJ's jurisdictional scope, and the procedures outlined in the CERD including the extensive negotiations and diplomatic efforts undertaken by both Armenia and Azerbaijan since December 2020, it appears highly probable that the ICJ will assert jurisdiction over the current dispute concerning the CERD. The ICJ's ruling on jurisdiction in the Armenia-Azerbaijan case will carry significant implications beyond legal proceedings. It could potentially set a precedent for addressing ethnic discrimination disputes under international law.

However, lasting peace requires diplomatic efforts beyond legal adjudication – Armenian Prime Minister Nikol Pashinyan expressed his readiness to withdraw lawsuits against Azerbaijan and to sign a peace treaty, acknowledging that this step could be considered logical; as far as it contributes to peace. Nevertheless, it is not yet clear if any peace treaty will be signed and if so, what impact it will have on Armenia's pursuit of its legal actions.

May 10, 2024

On May 10, 2024, South Africa made its fourth request to the International Court of Justice ("ICJ") for provisional measures to protect Rafah's population from Israeli military actions. This recent development is part of a broader legal engagement that began on December 29, 2023, when South Africa filed an Application instituting proceedings against Israel concerning alleged violations by Israel of its obligations under the Convention on the Prevention and Punishment of the Crime of Genocide ("Genocide Convention") in relation to Palestinians in the Gaza Strip.

On January 26, 2024, the ICJ ordered Israel to take all measures within its power to prevent the commission of acts of genocide and to ensure that its military does not commit such acts. The ICJ also ordered Israel to take all measures within its power to prevent and punish incitement to genocide, and to enable the provision of urgently needed basic services and humanitarian assistance to Palestinians in the Gaza Strip. South Africa made three previous requests for additional measures, which were rejected or partially granted.

The recent fourth request indicates that the situation in Rafah remains tense and that South Africa is committed to pursuing legal action against Israel to protect the Palestinian population. The ICJ's previous orders for provisional measures have not been fully effective in preventing Israeli military actions in the Gaza Strip, and South Africa is seeking additional measures to protect the population of Rafah.

May 21, 2024

The International Tribunal for the Law of the Sea ("ITLOS" or "Tribunal") rendered a unanimous 153-page Advisory Opinion on climate change and international law ("Advisory Opinion"), a summary of which is here.

The Advisory Opinion arose from a request of the Commission of Small Island States on Climate Change and International Law ("Commission") on the following two-part question:

"What are the specific obligations of State Parties to the United Nations Convention on the Law of the Sea ("UNCLOS") including under Part XII:

(a) to prevent, reduce and control pollution of the marine environment in relation to the deleterious effects that result or are likely to result from climate change, including through ocean warming and sea level rise, and ocean acidification, which are caused by anthropogenic greenhouse gas emissions into the atmosphere?

(b) to protect and preserve the marine environment in relation to climate change impacts, including ocean warming and sea level rise, and ocean acidification?"

In its Advisory Opinion (which applies to all 168 State Parties), the Tribunal unanimously decided that it had jurisdiction to give the advisory opinion (determining that all necessary prerequisites had been met) and to exercise its discretion to respond to the Commission’s request (concluding that the Commission’s questions were clear and specific enough, the evidence was sufficient and the questions important enough to merit an advisory opinion).

On the substance, the Tribunal considered that anthropogenic GHG emissions constituted marine pollution under the definition in the Convention and then traversed the specific obligations of State Parties to prevent reduce and control marine pollution, particularly under Articles 192 and 194 of the Convention. The Tribunal concluded State Parties were required:

1) to take all necessary measures to prevent, reduce and control marine pollution from climate change and to endeavor to harmonize their policies in this regard; and

2) to mitigate the effects of climate change and ocean acidification on all forms of marine life.

The Advisory Opinion is a call to action. The Tribunal describes both obligations as obligations of due diligence and states the standard of diligence is stringent. The Tribunal did not dictate any particular action.

December 19, 2024

The WTO Panel circulated its report in Turkey - Additional Duties on Certain Products from the United States (DS561). The dispute concerned the customs duties imposed by Turkey against US goods in retaliation to the latter's Section 232 tariffs, which were applied on imports of aluminium and steel.

One of the core issues in the dispute was the nature of the US tariffs. In principle, the WTO prohibits increases of customs tariffs above certain levels (the "bound rates") or their application against specific states (the "Most-Favoured Nation" or "MFN principle"). One of the exceptions allows WTO Members to retaliate against safeguard measures covered by the WTO Agreement on Safeguards ("Safeguards Agreement").

Turkey argued that the Section 232 tariffs pursue the objective of supporting the US industry, which is specific to a safeguard measure. In addition, it took the position that the design and the mechanism of the tariffs makes them safeguard measures covered by the Safeguards Agreement.

The US, on the contrary, argued that the tariffs are imposed under the national security exception (Article XXI of the GATT 1994) on the grounds of excessive aluminium and steel imports and are therefore not covered by the Safeguards Agreement. It contended that the steel and aluminium imports were threatening the financial viability of the US industry and its ability to quickly shift production to the defence and critical infrastructure.

The Panel upheld the US' arguments. It ruled that the US measures were "expected to operate to address the threat to national security", were not subject to the Safeguards Agreement and could not be retaliated against. The Panel also concluded that the duties imposed by Turkey were in excess of its bound rates and breached the MFN principle.

On January 26, 2024, Turkey appealed the Panel report. Given the current non-functional status of the WTO Appellate Body, the proceedings are currently on hold.

February 20, 2024

The WTO Panel circulated its report in the dispute regarding the implementation by the US of the Panel's findings the US – Ripe Olives from Spain (DS577).

The original Panel report was adopted by the WTO Dispute Settlement Body ("DSB") on December 20, 2021 and concerned the countervailing measures imposed by the US against allegedly subsidized import of olives from Spain. In the original dispute, the EU challenged the US approach, which mandated the investigating authority ("USDOC") to pass to downstream manufacturers the entire benefit of subsidies provided to the raw agricultural input producers, disregarding the arm's length nature of transactions between the two.

In July 2023, the EU initiated a proceeding under Article 21.5 of the Dispute Settlement Understanding ("DSU"), aimed at assessing compliance of the US with the DSB's recommendations. The EU recalled that according to the DSB recommendations, the US pass-through approach to calculation of the amount of subsidies is inconsistent with its WTO obligations. The EU contended that the US failed to address this issue by, e.g., amending the relevant legal acts. Instead, in a review of the countervailing measures, the US applied the same approach in the same manner.

The US argued that it re-evaluated its approach to calculation of subsidies and such re-evaluation will result in a consistent change of practice. In the US opinion, this makes the approach compliant with the DSB recommendations without the need to amend legislation.

The Panel noted that compliance with the DSB recommendations may take place by re-evaluating rules and does not necessarily require revision of legislation. The Panel disagreed, however, with the US arguments, stating that in absence of legislative amendments, the US law still mandates USDOC to attribute the entire amount of subsidies to downstream manufacturers.

The Panel's report was adopted by the DSB on March 19, 2024 and is subject to implementation by the US.

March 5, 2024

The WTO Panel circulated its report in DS600 EU and Certain Member States — Palm Oil (Malaysia). The Panel Report deals with the EU's renewable energy target, the criteria for determining the high Indirect Land-use Change ("ILUC")-risk feedstock, and the sustainability and GHG emission savings criteria as based on the Renewable Energy Directive ("RED"). In a relatively exceptional development, the Panel delivered a split (2-1) opinion, with a dissenting opinion by one of the panelists.

On substance, the majority rejected most of Malaysia's claims under the WTO Agreement on Technical Barriers to Trade ("TBT Agreement"). However, on some points the Panel did agree with Malaysia in particular where it found that the EU administered the high ILUC-risk cap and phase-out inconsistently with Article 2.1 of the TBT Agreement. It also considered that the high ILUC-risk cap and phase-out was inconsistent with the non-discrimination principle because it accorded less favourable treatment to palm oil-based biofuel from Malaysia than that accorded to like products of EU and other third-country origin.

The Panel did not go as far as finding that the measure as such (i.e., the substance of the measure) was inherently discriminatory or protectionist. In this regard, the dissenting panelist went further than the majority since the "weighing of the evidence leads [him] to the conclusions that Malaysia has substantiated its assertion that there is an element of protectionism behind the decision to single out palm oil-based biofuel, and that the different treatment of soybean and palm oil is arbitrary from the perspective of limiting the risk of ILUC-related GHG emissions associated with crop-based biofuels."

The Panel report was adopted by the DSB on April 26, 2024 and is subject to implementation by the EU.

March 26, 2024

The WTO Panel circulated its report in the dispute regarding anti-dumping and countervailing duties imposed by Australia on wind towers, stainless steel sinks and railway wheels from China (Australia — AD/CVD on Certain Products (China), DS603). The measures challenged by China were based on interim and expiry reviews conducted by Australia.

On procedure, China contended that the Panel should examine the potential violations in both the original investigations and the reviews, even if the original measures have been already replaced by the revised ones. The Panel explained that it was within its discretion to decide whether to review the expired measures. In the present case, the Panel considered it reasonable to focus on the most recent reviews.

On substance, China challenged the approach to calculation of the dumping margin, which allowed Australia to replace the original cost of production in China with the surrogate costs. Such methodology is used in anti-dumping cases when original costs are unreliable or unavailable and often results in uplifted dumping margin. In the case at hand, its application was based on the assumption of significant distortions in the Chinese steel market. The Panel considered the cost adjustment unjustified, explaining that it cannot be based on a mere assumption. The question before the investigating authority shall be whether the exporter's records reasonably reflect the costs, not whether the costs themselves are justified.

The Panel stated that in calculating the surrogate costs, Australia failed to explain why such costs represent undistorted costs in China. It also explained that that the further calculations based on the adjusted costs, such as its use of uplifted costs for calculation of the dumping margin for non-cooperating producers or for the ordinary-course-of-trade test, were similarly flawed.

The Panel's report was adopted by the DSB on April 26, 2024 and is subject to implementation by Australia.