Friday 22 March 2013

Oleynikov Judgment on State Immunity

It is my pleasure to introduce a guest post by Dr Rosanne van Alebeek, a fellow human rights expert. She is an assistant professor and senior researcher at the University of Amsterdam and has particular expertise on the subject of immunities and human rights. I am therefore very grateful that she has been willing to write a comment on the recent case of Oleynikov v. Russia, a case which also features North Korea:

In its recently issued judgment in Oleynikov v. Russia (14 March 2013) the European Court of Human Rights confirms the by now well-established principle that the grant of immunity to foreign states or foreign state officials in excess of the requirements of public international law violates the right of access to court enshrined in Article 6(1) ECHR. The judgment does not break new ground, but in view of the by now considerable body of Strasbourg case law in this field, it provides occasion for broader reflection on some of its possibly problematic elements.

The context

The relevant line of jurisprudence dates back to 2001, when the Court ruled for the first time that the grant of immunity by a national court in accordance with generally recognised rules of public international law constitutes an ‘inherent’ limitation on the right of access to court under Article 6(1) ECHR that does not, ‘in principle’, disproportionately restrict that right (Al-Adsani v. UK, para 56; McElhinney v. Ireland; Fogarty v. UK, 21 November 2001). The Court justified its position under reference to Article 31.3(c) VCLT, arguing that the Convention ‘cannot be interpreted in a vacuum’ and ‘should so far as possible be interpreted in harmony with other rules of international law of which it forms part, including those relating to the grant of State immunity’ (Al-Adsani, para 55). In the years to follow the Court dismissed all immunity-related complaints on the ground that the disputed grant of immunity in fact conformed to a rule of public international law and was hence a proportionate restriction in compliance with Article 6 (Kalogeropoulou v. Greece and Germany, 12 December 2002; Manoilescu and Dobrescu v. Roumania and Russia, 3 March 2005; Treska v. Albania and Italy, 29 June 2006; Sedelmayer v. Germany, 10 November 2009). It was not until 2010 that the Court redeemed the implicit promise that grants of immunity in excess of the requirements of international law would be held to violate Article 6. In Cudak v. Lithuania the Court found that the Lithuanian courts had failed ‘to preserve a reasonable relationship of proportionality’ and ‘impaired the very essence of the applicant's right of access to a court’ by the grant of immunity to Poland in a labour dispute where international did allow the exercise of jurisdiction (para. 74. See later also Guadagnino v. Italy and France, 18 January 2011; Sabeh El Leil v. France, 29 June 2011. In Wallishauser v. Austria, 17 July 2012, the same reasoning was applied to the rules on the service of process instituting a proceeding against a State).

The case

In view of the fact that Russian courts occasionally still apply the absolute rule of state immunity, it was a matter of time before the Court would find against Russia under the reasoning developed in Cudak. Even though the 2002 Code of Commercial Procedure provides that before the commercial courts the restrictive state immunity rule applies, the absolute state immunity rule is still codified in the 2002 Code of Civil Procedure (paras. 15-20). And while the Constitutional Court has condemned a ‘formalistic application’ of that legislation (paras. 21-24), adherence to the absolute approach not uncommon. The case at hand concerned a dispute over a failure by North Korea to repay a debt to the applicant, Mr. Oleynikov. On appeal, the Khabarovsk Regional Court ruled that ‘lodging a claim in a court of the Russian Federation against a foreign State … [is] allowed only upon the consent of the competent agencies of the State in question, unless otherwise provided by an international treaty of the Russian Federation or by a federal law’ and in the absence of the consent of North Korea it dismissed the applicant’s claim (para. 14).

The European Court started by reiterating the principles developed in previous cases. In particular, it considers that ‘the International Law Commission’s 1991 Draft Articles [on Jurisdictional Immunities of States and Their Property], as now enshrined in the 2004 Convention [on Jurisdictional Immunities of States and Their Property], apply under customary international law, even if the State in question has not ratified that convention, provided it has not opposed it either’, and notes that Russia has not opposed the adoption of the Convention and has in fact signed it in 2006 (para. 66). What is more, the Court noted, Russia appears to have accepted restrictive immunity as a principle of customary international law, even prior to that (para. 67) and the provisions of the International Law Commission’s 1991 Draft Articles and the 2004 Convention are consequently held to ‘apply to the respondent State, under customary international law’(para 68).

The Court had little difficulty to find in favour of the applicant now that the Russian courts had dismissed the applicant’s claim without any examination, applying the absolute state immunity rule: ‘The domestic courts did not undertake any analysis of the nature of the transaction underlying the claim’ and ‘thus made no effort to establish whether the claim related to acts of [North Korea] performed in the exercise of its sovereign authority or as a party to a transaction of a private law nature’ (para 70) and therefore ‘the Russian courts failed to preserve a reasonable relationship of proportionality’ and ‘thus impaired the very essence of the applicant’s right of access to court’ (para 72.). The Court was unanimous in its finding of a violation of Article 6(1).

A commentary

While the words ‘in principle’ (‘measures taken by a High Contracting Party which reflect generally recognised rules of public international law on State immunity cannot in principle be regarded as imposing a disproportionate restriction on the right of access to a court’) do leave room for striking a different balance in exceptional circumstances, it seems fair to say that the principle launched by the Court in 2001 entails an automatic prevalence of public international law immunity rules over the right of access to court under the Convention. This commentary does not seek to further analyse this particular element of the jurisprudence introduced above. Criticism may certainly be raised in this respect – but the point has already been taken up in abundant academic commentary and needs no repeating here. Instead, I would like to briefly reflect on a different aspect of the Court’s case law on the relation between immunity rules and Article 6 ECHR, namely the Court’s approach to the identification of customary immunity rules.

Admittedly, the Oleynikov case is not the most insightful example of the possible problematic nature of the Court’s approach to this matter. Now that the Russian courts had taken an absolute approach to state immunity, the Court merely had to prove that in fact the restrictive approach reigns in customary international law, and that Russia had not persistently objected to the formation of that rule – which is in fact rather uncontroversial. It is therefore good to briefly look at the Court’s reasoning in the cases Cudak, Sabeh el Leil, and Guadagnino, where the Court was faced with the much more complex task of identifying the rule of customary state immunity in respect of labour disputes. In Cudak the Court found that the rule codified in Article 11 of the (still to enter into force) 2004 UN Convention on State Immunity applied to Lithuania under customary international law, in any case now that it had not expressly objected to the wording of Article 11. It reasoned as follows: ‘The report appended to the 1991 Draft Articles stated that the rules formulated in Article 11 appeared to be consistent with the emerging trend in the legislative and treaty practice of a growing number of States … This must also hold true for the 2004 Convention. Furthermore, it is a well-established principle of international law that, even if a State has not ratified a treaty, it may be bound by one of its provisions in so far as that provision reflects customary international law, either “codifying” it or forming a new customary rule…. Moreover, there were no particular objections by States to the wording of Article 11 of the International Law Commission's Draft Articles, at least not by the respondent State. As to the 2004 Convention, Lithuania has admittedly not ratified it but did not vote against its adoption either. Consequently, it is possible to affirm that Article 11 of the International Law Commission's 1991 Draft Articles, on which the 2004 Convention was based, applies to the respondent State under customary international law. The Court must take this into consideration in examining whether the right of access to a court, within the meaning of Article 6 § 1, was respected.’ (Cudak, paras. 66, 67). In Sabeh el Leil, the Grand Chamber even moved to declare the entire 2004 Convention to reflect customary international law. Now that France had not opposed the Convention, but had in fact signed it and was in the process of ratifying it, ‘it is possible to affirm that the provisions of the 2004 Convention apply to the respondent State, under customary international law’(Sabeh el Leil, para. 58).

Apart from the problematic wording in Cudak (States are not bound by the provisions of a codification treaty, but by the underlying customary international law rule, as is better reflected in the reasoning in paras. 66 and 68 of the Oleynikov Judgment), the casualness with which the Court identifies custom is striking. Custom is generally considered to follow from a consistent State practice accompanied by a sense of legal obligation, opinio juris. Where the ICJ in Germany v. Italy (3 February 2012) engaged in a comprehensive analysis of all available (national court) practice, the ECtHR relies completely on the ILC Commentary. More problematic even is the fact that this Commentary provides very little proof of the traditional constitutive elements of customary international law: an ‘emerging trend in the practice of a growing number of states’ is a far cry from ‘consistent state practice’. In fact, Article 11 of the 2004 Convention was one of the most controversial articles on the Convention, since state practice in respect of state immunity in labour disputes is not consistent. In this respect, the critical attitude of the Advocate-General of the ECJ in his Opinion in respect of the preliminary ruling in the German case Mahamdia v. Algeria (Opinion delivered 24 May 2012) is noteworthy. The AG noted that in the field of labour disputes ‘national approaches [to state immunity] are very varied and national courts sometimes give preference to the nature of the functions performed, sometimes the purpose of those functions and sometimes the nature of the contract. In some cases these criteria have to be satisfied cumulatively for immunity to be waived. Furthermore, the issue of immunity may be seen differently depending on whether the dispute concerns recruitment, dismissal or the actual performance of functions. These national differences are so pronounced that any codification at international level is very difficult and may even cast doubt on the actual existence of a rule of customary international law in this regard which is any more than an undeniable tendency.’ (paras. 23-24) The AG expressly criticises the position of the ECtHR that article 11 of the Convention reflects custom, arguing that ‘[t]he national differences … suggest a more nuanced view.’(para. 26). According to the ECJ a State does not enjoy immunity in labour disputes ‘where it concludes contracts of employment with persons who do not perform functions which fall within the exercise of public powers’ (19 July 2012, para. 49) – a formulation of the rule that is different from that found in Article 11.

As said, the Oleynikov case did not similarly require the Court to take a position on a highly controversial question of immunity law since the restrictive nature of the customary rule of state immunity is undisputed. However, the reference of the Court to the failure of the Russian courts to take the ‘nature’ of the underlying transaction into account, is interesting in view of the fact that Article 2.2 of the Convention provides that ‘[i]n determining whether a contract or transaction is a “commercial transaction” … reference should be made primarily to the nature of the contract or transaction, but its purpose should also be taken into account if the parties to the contract or transaction have so agreed, or if, in the practice of the State of the forum, that purpose is relevant to determining the non-commercial character of the contract or transaction.’ The provision is a hard-fought compromise, that tries to accommodate the position of amongst others Russia, that it should be possible to have regard to the purpose of a transaction when determining whether it qualifies as a commercial transaction. If the entire Convention reflects custom, more nuanced language is arguably required to describe the obligations of the Russian courts.

Another noteworthy recurring element in the Court’s reasoning in the cases at hand is the emphasis on the attitude of the respondent State towards the 2004 UN Convention. It remains unclear how exactly this attitude affects the reasoning of the Court. It seems the Court hints at excluding the possible applicability of the persistent objector doctrine, but the reliance on the attitude towards the Convention seems inappropriate in this respect. First of all, states can only evade obligations under a new rule of customary international if they consistently oppose it throughout the formative period, while the Court itself locates the customary international law status of the various rules in the Convention before 1991. Moreover, opposition to the Convention may have a number of reasons and does not qualify as a blanket objection to the various rules found in it in the absence of explicit language to that effect.

In sum, these cases give rise to a variety of highly complex questions of general public international law. By rendering the scope of international immunity law the decisive criterion for the assessment of a State’s compliance with the right of access to court, the ECtHR has become a de facto court of appeal on highly controversial immunity issues. The Oleynikov case, and especially Cudak, Sabeh el Leil and Guadagnino warrant critical reflection on the question whether it is up to that task.