ICJ jurisdiction in disputes between multinational corporations and states

¶ … Regulation

Ecks Company is a firm with most of its workers and shareholders as well as operating in State Y despite being incorporated and headquartered in State X. One of the small branches of this company decided to hire an industrial spy, Mr. Seven in order to gather secrets from a large business rival in State Z in 1980. Mr. Seven was successful in his work since he supplied the small branch of Ecks Company with information regarding the competitor's most vital industrial secrets for over a year. The small branch then passed on the information to Ecks Company including information about State Z's national defense. When the industrial spy was caught red handed in 1981, he was convicted of espionage and agreed to testify against the company and branch manager in order to get a reduced sentence. This was followed by a series of events including prosecution of the company by State Z and a lawsuit between the states at the International Court of Justice (ICJ). As State X alleges that the firm was denied justice, State Z is likely to raise several objections to the jurisdiction of ICJ.

Jurisdiction of International Court of Justice

For a long period, universal jurisdiction has had a stable history despite some turbulent and dramatic periods. Throughout the years, the principle of universal jurisdiction has played a stable, modest, and beneficial role in issues regarding extra-territorial scope of state law applied by state courts (Steiner, 2004, p.199). Notably, universal jurisdiction has seemingly been unproblematic because of its narrow scope and application in a non-threatening. However, the dramatic and turbulent times in its recent history have been brought by intense political debate and divisive scholarly arguments. Currently, the principle of universal jurisdiction entails a wide range of issues including criminal investigations and prosecutions for involvement in grave international crimes stipulated in state law.

The International Court of Justice was established on the premise of the principle of universal jurisdiction to help deal with extra-territorial scope of state law. In its contemporary form, the International Court of Justice acts as the principal judicial organ of the United Nations. This court has general jurisdiction over disputes between nations, especially members of the United Nations, which is virtually every nation across the globe (Posner & de Figueiredo, 2004). As it's currently constituted, the International Court of Justice has jurisdiction over three kinds of cases i.e. special agreement cases in which parties agree to submit their dispute to the court, cases endorsed by a treaty as long as future issues will be determined by the court, and disputes between states that are voluntarily subject to the court.

Since commencing its operations in 1946, the International Court of Justice has determined dozens of cases or disputes. Actually, the court has considerable political and scholarly significance since most of its judgments have helped resolve real international issues or disputes. While states have in many instances failed to adhere to ICJ's judgments or acknowledge its jurisdiction, it's still a powerful symbol of the likelihood of an international legal system. The court's supporters have argued that it plays a major role in promoting the legitimacy of the international legal system through resolving disputes or issues in a principled way. However, its critics postulate that the court's rulings are usually politically motivated since mainly politicians and diplomats seem to lose their cases.

Reflection of Ideology in the Court's Rulings

One of the possible objections to the jurisdiction of the International Court of Justice is whether the rulings by its judges reflect ideology or whether it would reflect disinterested utilization of the traditions of legal reasoning (Posner & de Figueiredo, 2005, p.600). Judges decisions and voting patterns has been an issue of considerable interest for legal academies, especially in relation to the jurisdiction of the International Court of Justice. Many legal academics have argued that ICJ is a court that is similar to domestic courts in the United States and other nations across the globe. Given this consideration, judicial voting is a major issue surrounding the court's jurisdictions based on the premise on whether the rulings reflect ideology or national interests in which legal reasoning is applied in a conventional manner.

In most cases, judges at the court are increasingly likely to be influenced by other legal considerations and national interests like the appropriate interpretation of a treaty. Proper legal outcome is not common in cases at the International Court of Justice because judges make other legal considerations. Therefore, if the case is allowed to continue at the court, a judge from State X is more likely to vote in favor of State X whereas a judge from State Z is more likely to vote for State Z. This implies that the jurisdiction of the International Court of Justice is challenged on the premise of reflection of ideology or national interests by its judges.

Lack of Suitable Nationality

According to the Statute of the International Court of Justice, states are entitled to sponsor claims of their nationals against other states. This requirement is not only done to help ensure diplomatic protection but also establish so that only States can be parties before ICJ, especially for contentious jurisdiction (United Nations Conference on Trade and Development, 2003). Nationality is an important issue in the scenario of Ecks Company because it involves contentious jurisdiction.

In this case, State Z is likely to object the jurisdiction of the International Court of Justice in determining the case on the premise of lack of suitable nationality. While ICJ's statutes permit states of a dual national to sponsor a lawsuit on behalf of their national, there must be an authentic link between the national and sponsoring state. Without an authentic link, there is lack of suitable nationality, which hinders the jurisdiction of the ICJ. State Z is likely to argue that while Ecks has a formal link to State X through being incorporated, there is no authentic link because it's headquartered in State Y where its operating plant and most of its employees and shareholders are located. In essence, given that most of the company's operations are in another state other than State X, there is no genuine link. Therefore, State X cannot file a lawsuit at the International Court of Justice on the argument that Ecks Company is its national.

Failure of Exhaust All Probable Local Remedies

Based on the statute of the International Court of Justice, the exhaustion of all probable local remedies is important to an extent that it exceeds a procedural requirement. This implies that when a dispute arises, all probable local remedies should be explored before the issue is brought before the court. This is an important requirement because without exhaustion of all probable local remedies, no remedies for legal injury can be feasible at the international level (United Nations Conference on Trade and Development, 2003). However, for foreign nationals to exhaust local remedies, the remedies should be available, easily accessible, effective, and not simply illusory or notional.

In Eck Company case, State Z is likely to object the jurisdiction of the International Court of Justice on the premise that the firm did not exhaust all probable local remedies. In addition to failing to hire a lawyer to represent it in the initial court, Ecks did not appeal the court's ruling to State Z's appellate courts. The failure to appeal implies that the company failed to exhaust all probable local remedies despite lack of justification for not doing so.

Laches

One of the general principles of law and interpretation of international law is the interpretative process, which includes the doctrine of laches. Interpreters in a legal process arrive at conclusions relating to general principles of law through induction or deduction (Bianchi, Peat & Windsor, 2015, p.96). In addition to exhaustion of local remedies, the doctrine of laches is sometimes used in the interpretative process to confirm the existence of the general principle of law including international law.

Through interpretative process, the doctrine of laches is likely to be utilized as an objection to the jurisdiction of the International Court of Justice in the case involving Ecks Company. Based on this doctrine, State Z is likely to argue that State X waited for more than 10 years to sponsor the lawsuit, which is a long period of time. Given that this time period is extraordinarily long and has no justification, the International Court of Justice has no jurisdiction in determining the lawsuit before it.

Involvement in Espionage

The other objection likely to be used by State Z with regards to ICJ's jurisdiction is Ecks' involvement in espionage. According to facts of the case, the small branch office of Ecks Company in State Z hired an industrial spy to gather secrets about a large competitor that included information related to the state's national defense. The entire company was involved in this process since the small branch passed on the information to the headquarters. The company's involvement in espionage was illegal since it's an illegitimate business practice. Therefore, Ecks Company had dirty hands for its involvement in illegitimate business practices that could even threaten the security of State Z. Ecks Company had no legitimate claim that it was denied justice because its practices brought denial of justice.

In conclusion, the scenario involving Ecks Company is an example of an issue involving the jurisdiction of International Court of Justice. After the series of events that culminated in disallowing Ecks from establishing a new branch in State Z, State X filed a lawsuit on behalf of Ecks at ICJ. However, the lawsuit is likely to experience objections from State Z relating to ICJ's jurisdiction on the issue. Some of the probable objections include lack of suitable nationality, laches, involvement in espionage, and failure to exhaust local remedies.