I. INTRODUCTION: LAWFARE OVER THE WESTERN SAHARA
The situation in the Western Sahara remains one of the main outstanding disputes stemming from the colonial era.Footnote 1 While the region was added to the United Nation's list of non-self-governing territories in 1963, the lion's share of the Western Sahara has been under the control of Morocco ever since the mid-1970s (following Spain's withdrawal). An armed conflict between the Polisario FrontFootnote 2 and the Kingdom of Morocco raged on until 1991, when the two parties agreed to a ceasefire that was to enable the organization of a UN-supervised referendum on self-determination (which, after 30 years, remains to be organized). Since 2006, the political status of Western Sahara has been the subject of a negotiating process authorized by the UN Security Council under the auspices of the UN Secretary-General.Footnote 3 While the ceasefire has by and large been observed, in recent years, the Polisario Front and the so-called Saharawi Arab Democratic Republic (SADR)Footnote 4 have shifted their strategy from warfare to ‘lawfare’.Footnote 5
In particular, the dispute has resulted in a number of high-profile procedures before the EU Courts. First, the Polisario Front lodged an action for annulment against a Council Decision of 2012 on the conclusion of an EU–Morocco Association Agreement inasmuch as it applied to the Western Sahara. In a nutshell, the General Court held that the Polisario Front was directly and individually concerned so that the action was admissible.Footnote 6 As to the merits, the Court accepted that EU institutions ‘enjoy a wide discretion as regards whether it is appropriate to conclude an agreement with a non-member State which will be applied on a disputed territory’.Footnote 7 At the same time, having regard inter alia to the 2002 Legal Opinion by UN Legal Counsel Hans CorellFootnote 8 (to which we shall return below), the Court held that the Council failed to satisfy itself ‘that there was no evidence of an exploitation of the natural resources of the territory of Western Sahara under Moroccan control likely to be to the detriment of its inhabitants and to infringe their fundamental rights’.Footnote 9 For this reason, the Council Decision was partially annulled insofar as it approved the application of the Association Agreement to the Western Sahara. Upon appeal, however, the Court of Justice of the EU (CJEU) arrived at a completely opposite result and ultimately set aside the judgment of the General Court. The Court relied in particular on three overlapping, yet autonomous, rules of international law, namely, (1) the customary principle of self-determination,Footnote 10 (2) the customary rule codified in Article 29 of the Vienna Convention on the Law of Treaties (VCLT), which provides that, unless a different intention appears from the treaty or is otherwise established, that treaty is binding upon each party in respect of its entire ‘territory’,Footnote 11 and; (3) the principle of the relative effect of treaties (Article 34 VCLT).Footnote 12 On the basis of the foregoing rules, the CJEU found that the Association Agreement could not apply to the Western Sahara. The other side of the coin was that the Polisario Front lacked the required standing to seek annulment of the contested Decision.Footnote 13
Second, Western Sahara UK, a UK-based voluntary organization, initiated two separate procedures before the High Court of Justice for England and Wales pertaining to the application of the Fisheries Partnership Agreement concluded between the EU and Morocco and the concomitant 2013 Protocol. The procedures resulted in a request for a preliminary ruling on the validity of the underlying EU instruments adopting the treaties. Following its prior reasoning, the CJEU concluded that neither the Fisheries Partnership Agreement nor the 2013 Protocol were applicable to the waters adjacent to the territory of the Western Sahara. According to the Court, any agreement between the EU and Morocco extending to the Western Sahara would be contrary to the principle of self-determination and the principle of the relative effect of treaties.Footnote 14
A separate action for annulment targeting the 2013 Fisheries Protocol was declared inadmissible by the General Court on similar grounds on 19 July 2018.Footnote 15 Two further applications for annulment lodged by the Polisario Front remain currently pending before the General Court.Footnote 16
Whereas the recent procedures before the CJEU have attracted considerable academic attention (and criticism),Footnote 17 also inviting excursions into the CJEU's earlier case law in Brita and Anastasiou,Footnote 18 other court procedures initiated by the Sahrawi Arab Democratic Republic or the Polisario Front have largely remained below the radar. In particular, in two separate procedures, the SADR and/or the Polisario Front have sought to attach cargos of phosphate that had been mined in the Moroccan-controlled part of the Western Sahara, sold to third companies, and shipped overseas. Importantly, phosphate (used primarily to produce fertilizer) is the main export product of the Western Sahara.Footnote 19 Against this background, the court procedures constitute part of a broader campaign by the Polisario Front and the SADR to deter companies from purchasing, transporting or trading phosphate mined in the Western Sahara (a campaign that has not been without result), so as to raise pressure on the Moroccan authorities to meet their demands.
One attempt to attach the 55,000-tonne phosphate shipment aboard the M/N Ultra Innovation and destined for Canada proved unsuccessful. On 5 June 2017, the Primer Tribunal Marítimo de Panamá dismissed the SADR's complaint of unjust enrichment.Footnote 20 The Court held that it lacked jurisdiction because the plaintiff (SADR) could not demonstrate that the cargo belonged to it. The Court stressed that the SADR's claims essentially required it to rule on a political/diplomatic dispute concerning the extraction of materials from a territory that two nations claim belong to them and which was foreign to the defendants.Footnote 21 Whether the cargo was extracted from one state or another and whether it was extracted lawfully, however, were questions which fell beyond the competence of the maritime courts.
A similar claim before the South African Courts met with greater success. In the Cherry Blossom proceedings, the SADR and the Polisario Front sought to attach a 55,000-tonne cargo sold by the Moroccan State-owned phosphate company OCP (the world's largest phosphate producer) and its subsidiary Phosboucraa to the New Zealand-based farmers’ cooperative Balance Agri-Nutrients. As of 1 May 2017, the cargo was detained aboard the NM Cherry Blossom in South Africa's Port Elizabeth. In its Order of 15 June 2017Footnote 22—issued a mere ten days after the abovementioned Panamanian Court Order—the High Court found that the SADR and the Polisario Front had a plausible claim to ownership of the cargo and agreed that the claim could proceed to trial on the merits. In particular, referring to applicable international law, chiefly the right of self-determination and the principle of permanent sovereignty over natural resources, as well as the ICJ's 1975 Western Sahara OpinionFootnote 23 and the 2002 UN Legal Opinion of Hans Corell, the Court held that it was prima facie established that sovereignty over the cargo was vested in the people of Western Sahara. At the same time, the Court also observed that it was disputed between the parties whether the exploitation of the phosphate was compatible with the UN framework as laid down in the 2002 UN Legal Opinion.Footnote 24 At the same time, the Court dismissed the procedural defences of OCP and Phosboucraa. First, the Court held that Morocco was not directly or indirectly impleaded, so that State immunity rules did not come into play. Second, as it remained allegedly unclear at the interlocutory stage what precise issue the trial court would be called upon to adjudicate, the Court decided to formally postpone the question as to the possible implications of the Act of State doctrine to the merits stage.
Following the Order of 15 June 2017, OCP and Phosboucraa halted their further participation in the proceedings. Eventually, on 23 February 2018,Footnote 25 following a 299-day detention of the cargo, the High Court issued an Order granting the SADR's claims. The (two-page) Order is remarkable for its brevity: not a word on the Act of State doctrine, nor on the (in)compatibility of phosphate exploitation in the Western Sahara with the UN framework. Instead, the High Court identifies the SADR as the owner of the cargo. In turn, ‘[o]wnership in the phosphate was never lawfully vested in [OCP and Phosboucraa], and they were, and are, not entitled to sell the phosphate to [Ballance Agri-Nutrients Ltd.]’. In the wake of the February Order, the High Court set up an auction to sell the cargo. After no buyer came forward, the cargo was reportedly purchased for a symbolic dollar (USD 1) by the operator of the NM Cherry Blossom, who—eager to free the vessel—agreed to cover the auctioneer's costs and ultimately returned the cargo to the OCP Group.Footnote 26
II. STATE IMMUNITY: ‘INDIRECT IMPLEADING’ AS A FATA MORGANA?
Unsurprisingly, the outcome of the Cherry Blossom procedure was heralded as a major victory by the SADR and the Polisario Front. The importance and unique nature of the case is hard to ignore. One would indeed be hard pressed to find another example of a State, a people, or an entity claiming statehood, using the domestic courts of a third State to assert proprietary rights over natural resources under the control of yet another State—the present author in any case is not aware of any example where such attempt was successful. Whether the ruling of the High Court is legally convincing, however, is a different matter altogether.
This short comment does not seek to pronounce on the legality of phosphate mining operations in the Western Sahara under international law (whether tested against the UN frameworkFootnote 27 or against international humanitarian lawFootnote 28). Instead, we will focus on the two defences raised in the Cherry Blossom proceedings (State immunity and act of State) and present a critique of the High Court's treatment of them.
As to State immunity, the High Court in its Order of 15 June 2017 acknowledged that such immunity is triggered, not only when proceedings are instituted against a foreign State, but also where it is impleaded indirectly, as was also previously recognized by South Africa's Supreme Court of Appeal.Footnote 29 Absent further South African authority on the concept of ‘indirect impleading’, the High Court turned to customary international law for guidance, drawing in particular from the recent Belhaj judgment of the UK Supreme Court.Footnote 30
On the one hand, the High Court accepted that international law regards a claim against a State's property as being tantamount to a claim against the State for purposes of the law of State immunity.Footnote 31 It found, however, that OCP and Phosboucraa were incorporated legal entities wholly separate from the State of Morocco and that Morocco itself did not have a proprietary interest in the matter.Footnote 32
On the other hand, having regard to the language of Article 6(2)(b) of the UN Convention on State Immunity (UNCSI, not in force),Footnote 33 the Court appeared to accept that indirect impleading may equally occur where proceedings in effect seek to affect not the property, but rather the ‘interest or activities’, of a foreign State. At the same time, citing extensively from the opinions of Lord Sumption and Lord Mance in Belhaj, the High Court held that the reference to ‘interests or activities’ in Article 6(2)(b) UNCSI ought to be construed restrictively. Specifically, it was insufficient that proceedings affected another State's ‘political or moral interests’.Footnote 34 What was required was instead a ‘specifically legal effect’—which the Court eventually found to be missing. In essence, considering that Morocco was ‘not a party to the proceedings’ and was ‘accordingly not bound by’ the outcome, the Court concluded that ‘[a] finding by a domestic forum that OCP's and Phosboucraa's exploitation of minerals in Western Sahara does not comply with the UN framework and is illegal … can have no effect upon the legal rights of Morocco’.Footnote 35
Upon closer scrutiny, the reasoning of the High Court fails to convince.Footnote 36 In particular, it is difficult to escape the feeling that, although the Court pays lip-service to Article 6(2)(b) UNCSI, its actual application of it all but renders moot the concept of ‘indirect impleading’.
It is true that the inclusion of Article 6(2)(b) UNCSI was primarily inspired by ‘actions involving seizure or attachment of public properties or properties belonging to a foreign State or in its possession or control’,Footnote 37 in particular by actions in rem or in admiralty against State-owned or State-operated vessels.Footnote 38 On the other hand, in line with the effet utile principle, the additional reference to proceedings affecting the ‘rights’, ‘interests’ or ‘activities’ of a foreign State, strongly suggests that these terms carry autonomous meaning and stretch the concept of ‘indirect impleading’ beyond proceedings involving goods over which a foreign State holds a (direct) proprietary title.Footnote 39
Admittedly, the ILC preparatory works reveal that the language of draft Article 6(2)(b) was changed inter alia to avoid ‘too loose a relationship between the proceeding and the consequences to which it gave rise for the State in question’.Footnote 40 Legal doctrine similarly agrees that the notion of ‘indirect impleading’ ‘cannot encompass all actions however ancillary or incidental their relation to a State’.Footnote 41 Grant, for instance, emphasizes that Article 6(2)(b) UNCSI presupposes ‘a specifically legal effect’, ‘as distinguished from a social, economic, or political effect’.Footnote 42 In a similar vein, Fox and Webb assert that the notion of ‘interests’ in the provision should be ‘limited to a claim for which there is some legal foundation and not merely to some political or moral concern of the State in the proceedings’.Footnote 43
Still, the High Court's bold assertion that Morocco's legal interests were not affected in the present case appears difficult to sustain. A number of observations can be made in this respect.
First, the High Court relied heavily on the Belhaj case, where the UK Supreme Court ultimately found that claims holding UK authorities liable for complicity in various torts including unlawful detention and torture—allegedly committed by officials of third States in various overseas jurisdictions post 9/11, did not indirectly implead those third States themselves, since a finding of UK liability ‘would in no way constrict the exercise’Footnote 44 by the foreign States concerned of their legal rights. The perceived parallel with the Cherry Blossom case, however, seems a far stretch. Clearly, Belhaj had nothing to do with States’ interests in, and/or control over, property, which the concept of ‘indirect impleading’ is traditionally associated with. In the Cherry Blossom, the very essence of the dispute ultimately related to the exercise of sovereign authority over territory, as well as the exercise of jurisdiction over assets (specifically natural resources) under the control of a foreign State. Curiously, the Cherry Blossom Order recognizes as much, by asserting, for instance, that ‘[t]he essence of the case for the SADR and the Polisario Front is that the phosphate … is part of the national resources of Western Sahara and belongs to its people’ (read: as opposed to Morocco).Footnote 45 To paraphrase Lord Sumption, the action of the SADR and the Polisario Front ostensibly sought ‘to assert a proprietary right in assets under the control of a state’ (viz. the phosphate mine(s) in the part of the Western Sahara under Moroccan control), which necessarily constitutes ‘a mode of impleading that State’.Footnote 46
One might also consider drawing a parallel to Buttes Gas,Footnote 47 where the UK House of Lords examined a claim for damages for slander lodged by Buttes Gas. The immediate cause for this claim were public accusations by Dr Hammer that Buttes Gas had used improper methods and colluded with the Ruler of Sharjah to backdate a decree extending the territorial waters of Abu Musa to 12 nautical miles from the island's coast so as to secure the rights to the exploitation of an offshore oil deposit—rights which allegedly belonged to Occidental Oil Company. Here too, Lord Wilberforce held that the relevant sovereigns were not impleaded directly or indirectlyFootnote 48—albeit that no further explanations were given. Importantly, however, Occidental did not seek to assert rights or control over the oil-bearing deposit and itself insisted that a decision upon the title to the location was not necessary for the conspiracy claimFootnote 49—these features again distinguish the case from the Cherry Blossom case.
If parallels with prior cases that were deemed not to indirectly implead a foreign State fail to convince, support for the view that the Cherry Blossom proceedings did indirectly implead Morocco can be derived from an analogy to the case law of the ICJ pertaining to the Monetary Gold principle, according to which the Court cannot exercise (contentious) jurisdiction where a dispute affects the legal interests of a third State that did not consent to jurisdiction and where those interests ‘form the very subject-matter of the decision’.Footnote 50 In particular, the Cherry Blossom case reveals a striking resemblance to the East Timor case, where the ICJ held that it could not rule on Portugal's claim that Australia had infringed the right to self-determination of the people of East Timor by concluding a treaty with Indonesia pertaining to the joint exploitation of the resources of the ‘Timor Gap’.Footnote 51 In accordance with the Monetary Gold principle, the Court found that Indonesia's rights and obligations ‘would … constitute the very subject-matter’ of the judgment. Since Indonesia had not consented, no jurisdiction could be exercised by the Court. The parallels with the Cherry Blossom case are striking. As in East Timor, the ‘very subject-matter’ of the case related to the legality under international law of the conduct of a State that was not directly named as a party to the proceedings and that had not consented to those proceedings. As in the latter case, more specifically, the key question was whether the (non-consenting) State's presence in a non-self-governing territory and its activities in that territory were compatible with the right of self-determination of the people concerned and with that people's right of permanent sovereignty over the territory's natural resources. In East Timor, the very subject-matter was whether Indonesia, which exercised control over East Timor even if it was not the ‘administering Power’ by UN standards, could lawfully conclude an agreement pertaining to the exploitation of natural resources in its continental shelf, having regard to East Timor's right of self-determination and permanent sovereignty over natural resources. In Cherry Blossom, the very subject-matter of the case was whether Morocco, which has control over (most of) the Western Sahara even if it is not formally the ‘administering Power’ in the sense of the UN Charter, could lawfully grant a concession agreement pertaining to the exploitation of a phosphate mine in the Western Sahara, having regard to the right of self-determination of its people and this people's right of permanent sovereignty over the territory's natural resources.
In sum, if the legal interests of Indonesia were affected by, and at the heart of, the East Timor proceedings, then surely the same must mutatis mutandis be true for the legal interests of Morocco in the Cherry Blossom case …?
Critics might object that the Monetary Gold principle relates to the exercise of international jurisdiction, an issue that is distinct from questions of State immunity before domestic courts—a point also underscored in the Cherry Blossom Order.Footnote 52 True as this may be, the parallel between the concept of State immunity as a corollary of the sovereign equality of States and the Monetary Gold principle is hard to ignore.Footnote 53 According to Jennings, the two are ‘the obverse and reverse of the same coin’.Footnote 54 In a similar vein, Crawford regards the Monetary Gold principle as ‘the nearest direct analogue in international law to the rule of State immunity’.Footnote 55 The link between the two concepts was also recognized implicitly by Lord Mance in Belhaj.Footnote 56 While Lord Mance eventually refused to apply the Monetary Gold principle, this was because he found the facts in Belhaj to be fundamentally different from the East Timor case, which was a case about ‘the right to administer’ a non-self-governing territory and ‘an issue about territorial title’.Footnote 57 Yet, since this was precisely ‘the very subject-matter’ of the Cherry Blossom case, one could argue a contrario that the analogy should have led the High Court to conclude that the claims of the SADR and the Polisario Front did indirectly implead the Kingdom of Morocco.
It is moreover submitted that the underlying State conduct possessed a sovereign character. In particular, case law and legal doctrine affirm that the regulation by a State of the exploitation of natural resources in the territory under its control is quintessentially a matter of sovereign authorityFootnote 58—the same is true, more generally, for acts of expropriation (even beyond the State's own territory).Footnote 59 It follows that, inasmuch as Morocco was indirectly impleaded, its immunity from jurisdiction should normally have prevented the case from proceeding to the merits.
A final objection could be that the mining and subsequent sale of the phosphate by OCP broke the chain of causation between Morocco's own conduct and the exercise of sovereign authority, implying that the defendants in the Cherry Blossom case were not themselves exercising sovereign authority, but were instead engaging in commercial activities, which are not as such covered by State immunity. Such was indeed the reasoning employed by the UK House of Lords in Kuwait Airways (No. 1).Footnote 60 In particular, the House of Lords agreed that the taking of aircraft and their removal from Kuwait during the Iraqi invasion of Kuwait constituted an exercise of governmental power by the state of Iraq and that, in so doing, Iraqi Airways Company (IAC) was acting in the exercise of sovereign authority. Yet, the majority held that IAC's subsequent retention and use of the aircraft as its own did not qualify as sovereign acts and were accordingly no longer covered by State immunity.Footnote 61
While it is hard to contest that the operation of commercial aircraft or the sale and transport of phosphate does not of itself possess a sovereign character, the idea that one can simply separate the latter acts from the underlying State conduct, the international legality of which is ultimately at stake, so as to set aside immunity rules, is problematic. Interestingly, Kuwait Airways (No. 1)—which preceded the adoption of the UNCSI—contains no reference whatsoever to the notion of indirect impleading. It is also worth noting that two judges dissented,Footnote 62 arguing that State immunity should apply (a position previously subscribed to by the Court of AppealFootnote 63). Furthermore, some case law arrives at the exact opposite conclusion as compared to Kuwait Airways (No. 1). In Société v Sempac,Footnote 64 for instance, the French Court of Cassation granted immunity to an Algerian company to which had been transferred two French companies that had been nationalized, without compensation, by the Algerian authorities. The Court found that the Algerian company had come into possession of the undertakings by virtue of a sovereign act of the Algerian State, so that the action of the French companies was in reality directed against the Algerian State itself. It must be recalled in this context that the very essence of the notion of ‘indirect impleading’ is precisely to prevent claimants from circumventing a State's immunity from jurisdiction ‘by instituting proceedings which, although implicating the State by affecting its property or other interests, did not name the State as respondent’.Footnote 65 Contrary to what the High Court appears to suggest, the fact that the State of Morocco was not itself a party to the proceedings and would accordingly not be bound by the resulting judgment is indeed insufficient to conclude to the non-applicability of State immunity. This is all the more true inasmuch as the case is related, not to a (one-off) act of expropriation of a foreign company, but challenges the very exercise of administrative control by a State over the exploitation of natural resources.
In conclusion, it is difficult to see what remains of the concept of ‘indirect impleading’ under the approach of the High Court. One might ultimately argue that the interpretation of that concept is not all that relevant since domestic courts are still required to consider the act of State doctrine (as Kuwait Airways and Buttes Gas, for instance, illustrate (see below)). That argument, however, is hardly convincing. First, while the act of State doctrine is also inspired, at least in part, by the principle of sovereign equality, it is fundamentally different from immunity law in that it is essentially a municipal law rule, rather than one rooted in customary international law. As the High Court observed, there is ‘no public international law principle which obliges a domestic court to refrain to adjudicate a matter involving a foreign act of state’.Footnote 66 The act of State doctrine is applied in countries such as the UK and South Africa. It is, however, unknown to many other (especially civil law) jurisdictions—albeit that partial analogues exist in the ‘local procedural patois’Footnote 67 of most jurisdictions, eg, in the form of the forum non conveniens doctrine, or the principle that the exercise of jurisdiction is subject to a rule of reason or considerations of proportionality, and albeit that echoes of such limitations can also be found in international case law.Footnote 68 On a different note, even in States that apply the act of State doctrine, the modalities may differ strongly. Importantly, while the prevalent position is that State immunity (as a procedural bar) operates irrespective of the gravity of the alleged breach and/or its peremptory character,Footnote 69 the act of State doctrine is oftentimes subject to a ‘public policy’ exception that would exceptionally permit domestic courts to examine a foreign act of State in case of grave breaches of international law (see further below). Accordingly, it potentially matters a great deal whether a dispute is approached through the angle of the State immunity framework or that of the act of State doctrine.
Our next section turns to the application of the act of State doctrine to the Cherry Blossom proceedings.
III. THE ACT OF STATE DOCTRINE – SCOPE OF APPLICATION
In its Order of 15 June 2017, the High Court confirms the application in South African law of the act of State doctrine, as ‘a municipal law rule which derives from common law principles as developed in Anglo-American courts’ and ‘founded upon the principle of mutual respect of equality of sovereign states, the principle of comity’.Footnote 70 The Court goes on to recall prior South African case law asserting that the judicial branch should ‘not ventur[e] into areas where it would be in a judicial no-man's land’,Footnote 71 and that courts should ‘act with restraint when dealing with allegations of unlawful conduct ascribed to sovereign states’.Footnote 72
In the remainder of the Order, however, the Court finds that ‘it is not entirely clear precisely what the act of a foreign state is that OCP and Phosboucraa rely upon which may render the matter non-justiciable’.Footnote 73 The Court continues as follows:
OCP and Phosboucraa contend for title upon the basis that Moroccan law applies in the territory and that their mining operations are lawful in accordance with that law. That may perhaps be the necessary issue to determine. Equally, the question of compliance with the UN framework regulating the exploitation of mineral resources in a non-self-governing territory … may prove the central issue for adjudication. Whether that is so will depend upon the full proper ventilation of the issues on the pleadings in the vindicatory action. If indeed the latter issue is the central dispute to be determined, then it is difficult to conceive on what basis it could be contended that the dispute is non-justiciable before this court.
In the end, the Court concludes that the question need not be decided at the interlocutory stage of the proceedings and that ‘there is no reason of high policy’ to hold otherwise.Footnote 74 Accordingly, the issue is postponed to the merits stage for determination.
As will be further explained below, the Court's reasoning appears internally contradictory, and, more importantly, at odds with the understanding of the ‘act of State’ doctrine in the case law of common law jurisdictions (particularly with UK case law, which has served as inspiration for South African courts). Even more disturbing than the flawed reasoning in the interlocutory Order is the complete absence of any discussion of the act of State doctrine in the Order of 23 February 2018—after OCP and Phosboucraa withdrew from the case—, where the High Court held that the Cherry Blossom’s phosphate cargo belonged to the SADR.
Upon closer scrutiny, while one could debate whether the case lent itself to the application of the ‘municipal act of State’ doctrine,Footnote 75 the Cherry Blossom proceedings appear to be a straightforward illustration of a case falling under the ‘international act of State’ strand (sometimes referred to in more general terms as the ‘non-justiciability’ doctrine), according to which domestic courts will not adjudicate upon the acts of foreign states—even beyond their own territory—that are done on the plane of international law.Footnote 76 This is so for a number of reasons.
First, and as already observed,Footnote 77 the South African courts were clearly called to rule upon the validity or lawfulness of the sovereign conduct of a foreign State (Morocco)—as opposed to mere commercial transactions or other acts of a private law characterFootnote 78 (recall that the qualification of conduct as an exercise of sovereign powers is not dependent on its intrinsic legality and is not as such limited to conduct within the State's own boundaries).
Second, as in Buttes Gas Footnote 79 and in Belhaj,Footnote 80 the question of the validity or legality of the sovereign conduct of the foreign State—ie, Morocco's exercise of control over the Western Sahara, and its concomitant measures pertaining to the exploitation of natural resources within that territory—was not merely an ‘incidental’ matter.Footnote 81 Rather, as the High Court acknowledges in passing in its Order of 15 June 2017, Morocco's exercise of control was in fact ‘at the heart of the dispute’.Footnote 82
Third, the application of the ‘international act of State’ doctrine is not subject to any territorial limitations—contrary to what may be the case for other strands of the act of State doctrine.Footnote 83 The implication is that the particular status of the Western Sahara does not impede the application of the former doctrine, on account of the allegedly extraterritorial nature of Morocco's conduct at stake.
Fourth, the validity or lawfulness of Morocco's conduct was challenged, not on the basis of a rule or rules of domestic law (whether South African or Moroccan), but rather on the basis of public international law. In particular, the applicants’ claims related to (1) questions of title over territory; (2) the right of self-determination of the people of the Western Sahara, and (3) the principle of permanent sovereignty over natural resources under international law—all questions that squarely fall within the realm of public international law. As to the latter principle, the claims seemingly required the South African courts to pronounce on the legal relevance and application of the 2002 UN Legal opinion.Footnote 84 The Legal Opinion was drafted in 2002 by then UN Legal Counsel Hans Corell at the request of the UN Security Council. Building upon ICJ case law and—admittedly limited—State practice, the opinion finds that activities pertaining to the exploration and exploitation of mineral resources in non-self-governing territories are not automatically contrary to international law, as long as they are conducted ‘for the benefit for the peoples of those Territories, on their behalf or in consultation with their representatives’.Footnote 85 The interlocutory order of the High Court discusses the content of the opinion at length, while also noting the parties’ contrasting views on the opinion's application to phosphate mining in the Western Sahara.Footnote 86 Curiously, the final Order of February 2018 does not contain the slightest trace of this discussion.
Fifth and last, it is evident that the underlying dispute belongs to the realm of ‘high politics’. As a reminder, the status of the Western Sahara and its people's right of self-determination has long been, and continues to be, on the agenda of the United Nations (see also further below), and negotiations continue between the main protagonists under the auspices of the UN Secretary-General. Interestingly, the General Court of the EU previously observed that ‘the definitive international status of [the Western Sahara] has not yet been determined and must be determined in UN-led negotiations between the Kingdom of Morocco and, specifically, the Front Polisario’.Footnote 87 In the case concerning the M/N Ultra Innovation, the Maritime Court of Panama found it had no jurisdiction to rule on a political/diplomatic dispute concerning the extraction of materials from a territory claimed by two nations.Footnote 88 Paradoxically, in the interlocutory order in the Cherry Blossom case, the High Court acknowledged that the case touched upon matters ‘that concern the international community at the highest levels’, while nonetheless concluding there was ‘no reason of high policy’ to apply the act of State doctrine.Footnote 89 The better view, it seems, would have been to acknowledge that the claimants called upon the South African courts to pronounce on issues that are—to paraphrase Lord Neuberger in Belhaj—‘only really appropriate for diplomatic or similar channels’,Footnote 90 and possibly for (consent-based) judicial determination at the international level.
In all, it seems difficult to escape the conclusion that the Cherry Blossom proceedings should have triggered the ‘international act of State’ doctrine, as it has been developed in Buttes Gas and subsequent case law, and as adopted in South African case law. The more relevant question—ultimately ignored by the High Court—would accordingly be whether there was nonetheless cause to set aside the latter doctrine for public policy reasons. This is the question—admittedly hypothetical, but nonetheless of significant legal interest—we will now turn to.
IV. THE PUBLIC POLICY EXCEPTION
In the words of Lord Nicholls of Birkenhead, ‘the “non-justiciable” principle [does not] mean that the judiciary must shut their eyes’ to a breach of ‘an established principle of international law …’.Footnote 91 Several precedents indeed illustrate that the act of State doctrine is at times set aside on ‘public policy’ grounds. Well-known examples include, the aforementioned Belhaj caseFootnote 92 and its Australian counterpart Habib v Commonwealth Footnote 93—both involving in particular allegations of torture by foreign officials—as well as Oppenheimer v Cattermole, where the UK House of Lords refused to recognize a Nazi decree-law depriving Jews resident outside Germany of their German nationality and confiscating their property.Footnote 94 Another illustration is the Kuwait Airways (No. 5) case,Footnote 95 where the House of Lords applied the public policy exception to a decree-law of the Iraqi government (Resolution 369) extinguishing the existence of Kuwait as an independent State and expropriating its assets, including in particular aircraft belonging to Kuwait Airways Corporation which were then located in Iraq.
An argument could be made that the Chery Blossom proceedings also lent themselves to the application of the public policy exception, since (like Belhaj, for instance), the case involved alleged breaches of a fundamental human right, in particular of the right of self-determination of the people of the Western Sahara, as well as the concomitant right of permanent sovereignty over natural resources. It is recalled that the right of self-determination is part and parcel of customary international law, and is moreover a right erga omnes and one of the essential principles of international law.Footnote 96 It has also been considered to be a norm of jus cogens, for example, by the International Law Commission.Footnote 97
Upon closer scrutiny, however, several elements militate against the application of the ‘public policy’ exception in the Cherry Blossom scenario. As a preliminary remark, the peremptory character of the alleged breach does not automatically entail that the exception applies.Footnote 98 Indeed, some of the ‘core examples of issues upon which domestic courts should refrain from adjudicating’ precisely involve ‘core examples of jus cogens’, such as the prohibition on the use of armed force.Footnote 99 More fundamentally, precedents make clear that the public policy exception must be construed narrowly, as applying only in respect of breaches of ‘established principle[s] of international law’, ‘when the breach is plain and, indeed, acknowledged’, and where ‘[t]he standard being applied by the court is clear and manageable, and the outcome not in doubt’.Footnote 100 By contrast, ‘where there is any room for doubt, judicial restraint must be exercised’.Footnote 101
It is worth contrasting in this context the unique features of the Kuwait Airways (No.5) case —also emphasized in Belhaj Footnote 102—with the Cherry Blossom case. First, much emphasis was placed in Kuwait Airways (No. 5) on the existence of several binding UN Security Council (UNSC) resolutions expressly condemning the Iraqi invasion of Kuwait; condemning the seizure by Iraq of public and private property in Kuwait and holding Iraq accountable therefore, and; regarding both the annexation of Kuwait as well as Iraqi acts contrary to UNSC resolutions to be ‘null and void’.Footnote 103 By contrast, in respect of the Western Sahara, the UN Security Council never expressly condemned Morocco's presence in, and exercise of control over, the Western Sahara, or explicitly labelled it as a breach of international law.Footnote 104 Instead, it has authorized an ongoing negotiating process under the auspices of the UN Secretary-General and has repeatedly called upon the parties to negotiate in good faith ‘with a view to achieving a just, lasting, and mutually acceptable political solution, which will provide for the self-determination of the people of the Western Sahara’.Footnote 105 Similar resolutions, also ‘welcom[ing] the commitment of the parties’ to negotiate, have been adopted in recent years by the UN General Assembly.Footnote 106
Second, while the Kuwait Airways case found its origins in the invasion of one sovereign State by another, in flagrant contravention of the UN Charter, and giving rise to ‘almost universal condemnation’Footnote 107 of Iraq's behaviour, the picture of the Western Sahara dispute is less straightforward. Indeed, the Western Sahara is regarded by the UN as a non-self-governing territory (which is de facto administered by Morocco), rather than a State. While some (currently 45) UN Members (including both Panama and South Africa) have recognized the SADR as a State, most have not, and differences of opinion remain as to the Western Sahara's definitive status, and whether such status should ultimately take the form of an independent sovereign State.Footnote 108 Furthermore, while some seemingly regard Morocco's economic activities in the Western Sahara as illegal by nature,Footnote 109 it must be emphasized that this is not the position set forth in the 2002 UN Legal Opinion. Indeed, as mentioned above, the 2002 Opinion concludes that mineral resource exploitation in the Western Sahara is compatible with international law as long as it is ‘conducted for the benefit of the peoples of these territories, on their behalf, or in consultation with their representatives’.Footnote 110 The same position is copied in several legal opinions produced at the EU level.Footnote 111 Interestingly, the 2002 Opinion also acknowledges that ‘the exact legal scope and implications’ of the principle of permanent sovereignty over natural resources ‘are still debatable’Footnote 112—a finding that sits uneasily with the above-mentioned case law pertaining to the application of the public policy exception (eg, in the context of the prohibition against torture).Footnote 113 More recently, explaining why the Opinion did not address the legality or illegality of specific contracts, former UN Legal Counsel Hans Corell stated thatFootnote 114
A deeper examination of this question would have raised a host of issues that would have been completely unmanageable for the Office of Legal Affairs. … To engage in such an activity would probably have raised more legal questions than answers.
In conclusion, without taking a stance on the application of the UN framework to contemporary mining operations in the Western Sahara, the Cherry Blossom case differs, for instance, from Kuwait Airways, in that there was no ‘plain and, indeed, acknowledged’ breach of a fundamental norm of international law not leaving ‘any room for doubt’, as would be required for purposes of applying the public policy exception. Quite the contrary, the better view is that the Cherry Blossom proceedings raised ‘a host of issues that [are] completely unmanageable’ for a domestic court in a third State and that put the domestic judge in a ‘judicial no man's land’ (to use the wording of Lord Wilberforce). In conclusion, it is suggested, first, that the ‘international act of State’ should have been deemed applicable in the present case, and, second, that the act of State doctrine should not have been set aside on account of an alleged public policy exception.
V. CONCLUDING OBSERVATIONS
Some may greet the Cherry Blossom Order as an important victory which increases pressure on the Moroccan authorities to meet the demands of the SADR and the Polisario Front and settle the long-standing dispute over the Western Sahara. Others may object that a ‘lawfare’ strategy that threatens to grind to a halt the export of phosphate—and possibly other goods, such as fish—from the Western Sahara is unlikely to benefit the people of the Western Sahara, given its impact on the region's economy. Whatever one makes of this, the present author submits that the High Court's ruling is legally flawed and sets a worrisome precedent.
First, while the case raises important questions as to the outer bounds of the application of State immunity rules, the Court's reasoning that Morocco was not indirectly impleaded in the case since its legal interests were allegedly not impacted is unconvincing, especially when comparing the case to the ICJ's East Timor judgment. In particular, one cannot help but feel that the Court all but renders moot the notion of ‘indirect impleading’. Second, even if one were to agree with the Court that the proceedings did not trigger the rules on State immunity, the High Court's treatment of the act of State doctrine is puzzling. Although the Cherry Blossom procedure would appear a straightforward illustration of the ‘international act of State’ or the non-justiciability doctrine, the High Court instead chose to ignore the latter doctrine and venture into a ‘judicial no man's land’.
Against the background of the above analysis, it is moreover worth pausing an instant at the possible ramifications if other domestic courts were to follow the precedent set, allowing the SADR and/or the Polisario Front to confiscate phosphate shipments mined in, or fish caught in the waters off, the Western Sahara—irrespective of the identity and interests of the seller and purchaser of the cargo. One could imagine the precedent also being copied elsewhere, not only in respect of goods coming from other non-self-governing territories (including the Falklands and French Polynesia?),Footnote 115 but also in respect of a variety of other theatres where a State is de facto in control of certain territory, but where its title over the territory concerned is contested. Reference can be made to (alleged) cases of unlawful occupation and/or annexation, but also to a far broader range of territorial disputes (eg, border disputes between neighbouring countries) as well as maritime disputes. From Tibet to Crimea, to the South China Sea, etc: potential examples are rife.
In spite of the fact that international law does not at present contain any requirement that States prohibit the import of goods originating in non-self-governing, occupied, or otherwise disputed territories,Footnote 116 the Cherry Blossom case suggests that States and non-State groups may seize domestic courts in import or transit countries, on the basis of the right of self-determination and the principle of permanent sovereignty over natural resources, with a view to securing ownerships of goods exported by companies operating in the former territories and sold to purchasers/customers in third countries.
Clearly, such approach creates a slippery slope potentially bringing a broad range of political, highly sensitive international (and possibly inter-State) disputes before the domestic courts of third States—disputes that are normally appropriate only for diplomatic negotiations or for consensual judicial dispute settlement at the international level. Such approach is hard to reconcile with the principle of sovereign equality which informs both the customary law of State immunity and the (essentially domestic) act of State doctrine. It also creates considerable legal uncertainty for private parties selling or purchasing goods from disputed maritime or territorial areas.Footnote 117 Yet, one of the reasons for the development of the rules on State immunity and the act of State doctrine is precisely to avoid such uncertainty, and to avoid ‘render[ing] uncertain titles in foreign commerce’, whereby ‘one buying expropriated goods would not know if he could safely import them into [a third] country’.Footnote 118
Surely, States can and must take into account international law in their dealings with non-self-governing, occupied, and other disputed territories. The obligation not to recognize situations that breach peremptory norms,Footnote 119 may, for example, prohibit States from entering into treaties that would imply a legal recognition of annexation.Footnote 120 Exceptionally, private companies commercial activities in, for instance, occupied territories may also create a risk of individual criminal responsibility, or a risk of civil liability if they contribute to human rights violations.Footnote 121 States may also decide to simply ban the import of goods originating in a certain area, whether as a form of reprisal or as a ‘countermeasure’.Footnote 122 It is, however, one thing for the Council of the EU to ban the import of goods originating in Crimea.Footnote 123 It is quite another for domestic courts to confiscate imported goods stemming from a non-self-governing, occupied, or otherwise disputed territory, and to assert the ownership of one party to the underlying dispute on the basis of principles of international law. Such approach is indeed at odds with the current regime of State immunityFootnote 124 as well as with the principle that domestic courts ought to exercise restraint ‘in cases having a foreign element’. In the end, as Lady Fox warned some 15 years ago in connection with the Kuwait Airways case:Footnote 125
It may be an ultimate goal for national courts to exercise jurisdiction and apply judicial standards to the determination of such international disputes but, in the present divided state of the world, to do so is idealistic, premature, inevitably partisan, and runs the risk of the generation of more, rather than less, abuse of legal process.
