© koninklijke brill nv, leiden, 2014 | doi 10.1163/9789004270589_005

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1 United Nations Convention on the Law of the Sea, 1982 (entered into force November 16, 1994), 1833 United Nations Treaty Series 396 [hereinafter UNCLOS].

Law of the Sea

Provisional Measures in ARA Libertad On the Margins of Jurisdictional Discourse

Nuwan PeirisAttorney General’s Department, Colombo, Sri Lanka

Introduction

The ARA Libertad, the recent case of provisional measures from the International Tribunal for the Law of the Sea (ITLOS, or the “Tribunal”), reflects the problem of attempting to accommodate a dispute involving the detention of a warship in a port within the jurisdictional parameters of the United Nations Convention on the Law of the Sea (UNCLOS).1 The Tribunal, as a pro-visional measure, ordered the release of the Argentine warship ARA Libertad, which was held in detention by a Ghanaian court. The arrest of this warship was made in pursuance of an action instituted by NML Ltd., which owns Argentina’s defaulted sovereign bonds.

This case reflects, in general, how when the Tribunal overcomes a jurisdic-tional objection, it still faces the challenge of determining the extent and scope of remedial measures within the provisions of UNCLOS. The Tribunal, in the main, had to consider the applicability of UNCLOS to internal waters and whether a general rule on a warship’s immunities was incorporated within Article 32. Both of these issues created perceivable difficulties at the begin-ning, during the hearing, and at the stage of granting relief. Hence, this article attempts to give an account of this case of provisional measures and examines how the Tribunal approached these issues.

Factual Matrix

The series of sovereign bonds had been issued by Argentina from February to July 2000. The Fiscal Agency Agreement (FAA) between Argentina and the Bankers Trust Company had a New York law as the applicable proper law.

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2 See International Tribunal on the Law of the Sea (ITLOS), The “ARA Libertad” Case (Argentina v. Ghana), Separate Opinion of Judge Lucky, para. 5, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20_Ord_15.12.2012_SepOp_Lucky_E_orig-no _gutter.pdf>.

3 See, ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Request for Provisional Measures submitted by Argentina, November 14, 2012, para. 3, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20-Request_for_official_website.pdf>.

4 See the response of Ghana, ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Written Statement of the Republic of Ghana, November 28, 2012, para. 4, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/WRITTEN_STATEMENT_OF _THE_REPUBLIC_OF_GHANA_-_28_NOVEMBER_2012__2_.pdf>.

5 See request for provisional measures by Argentina, n. 3 above, para. 11.6 See Ghana’s response, n. 4 above, paras. 6–7.7 Request for Provisional Measures, n. 3 above.

The FAA also contained a sovereign immunity waiver clause, whereby from Clause 22 of the FAA, Argentina waived and agreed not to plead any immunity in respect of these proceedings. Argentina declared a moratorium in December 2001 on all its sovereign debts.

NML Ltd., a company registered in the Cayman Islands and an affiliate of a New York-based hedge fund entity, Elliott Management, purchased Argentine sovereign bonds between June 2001 and 2003 at nearly half of the discounted face value on the principal value of US$172,153,000 and was in a relentless chase to enforce on Argentine property. The company obtained a summary judgment on the bonds from a Federal Court in New York for a value of US$284,184,632.30, including interest. NML Ltd. thereafter obtained a sum-mary judgment in the United Kingdom from the final appellate court, the Supreme Court. NML Ltd. tried the same judicial process before a Ghanaian court, which led to the arrest of ARA Libertad.

The facts of this case in the main were undisputed.2 ARA Libertad was an Argentine frigate warship for naval cadet training,3 which arrived in the Ghanaian port of Tema on October 1, 2012. On its arrival she was ceremoni-ously welcomed by the Government of Ghana. But on the next day it was detained and the crew was arrested through an interlocutory injunction issued by the Ghanaian High Court4 pursuant to an enforcement application filed by NML Ltd. on the unsettled value of the bonds.

Argentina entered an appearance in Court to protest and sought to set the order aside on the grounds of warship immunity.5 The Court refused. Argentina filed an appeal in the Court of Appeal where an outcome would have been reached by the end of January 2013. However, before the outcome, Argentina made a request for provisional measures to ITLOS on October 29, 2012,6 and filed a request for provisional measures to ITLOS on November 14, 2012.7

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8 Id., para. 24.9 Id., para. 60.10 Id., para. 11.11 Id., paras. 19 and 24.12 Id., para. 16.

As far as the forum for dispute settlement is concerned, Argentina had accepted ITLOS’ jurisdiction by way of a declaration under Article 287. But Ghana did not make any declaration under Article 287, meaning the case could be heard on its merits by an arbitral tribunal constituted under Annex VII. Argentina requested provisional measures under Article 290(5) from ITLOS for the release of the vessel pending the constitution of the arbitral tribunal.

Submissions of the Parties

As the applicant, Argentina contended that the ship was a warship within the definition of Article 29 of UNCLOS and is entitled to the undisputed right to immunity given to a warship under Article 32. Further, Argentina also invoked Articles 18(1)(b), 87(1)(a) and 90 of UNCLOS as a basis for its claim and argued that it provided prima facie jurisdiction to the arbitral tribunal under Annex VII, which in turn empowered ITLOS to grant provisional measures under arti-cle 290(5) until the said arbitral tribunal was constituted.8 Article 18(1) defines “passage” for the purposes of innocent passage in territorial seas where the ARA Libertad is now prevented from sailing. Articles 87 and 90 relate to the freedom of the high seas and the right to navigation, which the ARA Libertad is now denied due to its detainment in the port of Tema. In addition, Argentina submitted that provisional measures are necessary and appropriate for the rea-son that a real and imminent risk of irreparable prejudice to its rights existed given the continued detention that imperiled the safety of the warship and its crew.9 Argentina sought the unconditional release of the ship through ITLOS and to ensure that the ship is resupplied to that effect.

In response, Ghana never expressly denied the immunity accorded to a war-ship but contended that such a rule exists under general international law and not under UNCLOS. In any event, ITLOS has no jurisdiction over internal waters where the incident took place, thus Ghana questioned the basis of prima facie jurisdiction.10 Ghana also denied any irreparable harm or urgency.11 Interestingly, Ghana also argued that the sovereign immunity waiver clause in the Argentine bond in favor of NML Ltd. prevented Argentina from claiming sovereign immunity as a defense.12

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The Legal Issues Involved under UNCLOS

A “warship” is defined in Article 29 of UNCLOS, and Article 95 gives warships complete immunity on the high seas. This position is reflected in Article 236 on marine pollution, which exempts warships from its application. In general, the provisions portray the unhindered status of a warship under UNCLOS given its special character and reflect the view that only the flag state should have juris-diction over warships. However, this unimpeded status of a warship reduces when the warship is in territorial waters. In territorial waters, Article 31 states that if a warship fails to comply with the coastal state’s regulations concerning passage, it could be asked to leave. The flag state of the warship is liable for the damages caused (Article 31). The present case centers on Article 32 regarding the immunities of warships and other government ships operated for non-commercial purposes, as noted above and stated below:

With such exceptions as are contained in subsection A and in articles 30 and 31, nothing in this Convention affects the immunities of warships and other government ships operated for non-commercial purposes.

In general, this case focuses on two fundamentally important issues of law. First, can UNCLOS apply to a warship when it is in internal waters or in a port? This question was raised on the basis that UNCLOS does not apply to exclusive sovereign areas like land, internal waters, or even ports. Second, to what extent does Article 32 deal with a warship’s immunities? This question was raised to determine whether a general rule on immunities of a warship is incorporated in Article 32, or whether it merely refers to the existence of such a general rule in general or customary international law. This raises subsequent questions. If the existence of such a general rule is found in general or customary interna-tional law, do we need to understand it as a matter that falls outside UNCLOS? Whatever the resulting interpretation of Article 32, can it nevertheless be applied when the ship enters a port or internal waters since Article 32 appears under “Innocent Passage in the Territorial Sea”?

In addition to the two above-mentioned issues, from a dispute resolution point of view, the Tribunal was faced with the challenge of developing judi-cially manageable standards for cases under Articles 290(5) and 290(1). As far as Article 290(1) deals with the provisional measures simpliciter, while Article 290(5) deals with the provisional measures granted by the Tribunal until the Annex VII arbitral tribunal is constituted.

ARA Libertad is the first instance where an UNCLOS judicial forum has intervened in a private in rem arrest dispute. After ARA Libertad, one might

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13 See ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Order dated December 15, 2012, paras. 94, 97 and 98, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20_Order_15.12.2012.corr.pdf>.

14 Id., para. 99.

begin to question the state’s overall liability on the arrest process. In this case, the fact that ITLOS dismissed the defense of the state’s inability to interfere with the judicial case suggests that the litigation hubs that are used as arrest hot spots to enforce arrestors’ claims should be mindful of their international responsibilities. There are more than a few judicial hubs in the world where in rem admiralty arrests take place to enforce liabilities arising from a ship. Generally, in admiralty arrest hubs, the judiciary is very responsive to such claims and effectively enforces against ships by way of writ of arrests on the basis of statements of claims filed by the arrestors. Effectively, such claims are private disputes and there may be a variety of shipping claims.

It is not too remote a possibility for the flag state to take up the cause involv-ing its ship under Part XV against the arresting state for needlessly arresting the ship and thereby claiming damages from the arresting state. From the arrest-ing state’s perspective, it is merely a private dispute between the ship and the arrestor. But can the arresting forum be held liable if the matter is taken up by the flag state? There is also the necessity to prove the existence of a legal dis-pute as one between states, that is, the flag state and the arresting state. In an in rem matter under private law, the arresting forum has no concern with the private commercial disputes of its subjects, but after the ARA Libertad, state responsibility may arise on the arresting state’s judicial acts, provided that the arresting forum is unable to justify reasonable grounds for arrest, be it under private law or public law.

The Order for Provisional Measures

The Tribunal unanimously ordered the unconditional release of the frigate ARA Libertad along with its commander and crew. The order further allowed the ship to be resupplied to leave the port. The Tribunal was of the opinion that the ship is a military ship.13 The ship was faced with a grave and urgent situa-tion where force was used on her to move to another berth without the com-mander’s authorization.14

Interestingly, the order addressed Articles 32 and 29 by stating that the defi-nition of a warship in Article 29 appearing under “Territorial Sea and Contiguous Zone” seems to apply to all maritime spaces and should therefore

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15 Id., para. 64.16 Id., para. 63.17 Id., para. 65.18 Id., paras. 66 and 67.19 Id., para. 61.20 Id., paras. 69 and 72.21 Id., para. 100.22 See ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Declaration of Judge Paik, para.

1, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20_Ord_15.12.2012_SepOp_Paik_E_orig-no_gutter.pdf>.

be the same for Article 32.15 However, the order did not contain any reasons as to how the definition of a warship under Article 29 applies to all maritime spaces, how it includes internal waters, or how Article 29 can be equated to Article 32. But the Tribunal noted that Article 32 contains the provision “noth-ing in this Convention affects the immunities of warships,”16 which gives weight to the argument that the clause does not intend to confine itself to a specific geographical zone.

In any event, the Tribunal observed that “a difference of opinion” on the applicability of article 32 was sufficient to create a dispute17 to afford prima facie jurisdiction of the Annex VII arbitral Tribunal.18 On the contrary, the order noted that Articles 18(1)(b), 87 and 90 of UNCLOS did not provide a basis for a prima facie jurisdiction of the Annex VII arbitral tribunal.19 Further, ITLOS also observed that Ghana did not dispute the immunity for warships accorded by general international law.

The Tribunal took the position that the obligation to exchange views under Article 283 was satisfied, considering the effort that Argentina took to resolve the dispute by negotiation.20 The Tribunal also came to the conclusion that the urgency of the situation required the preservation of parties’ rights to grant prescriptive measures.21 Notably, the Tribunal did not engage in a discussion on the difference between Articles 290(1) and 290(5).

Judge Paik appended a declaration on the requirement of urgency and irreparability, stating that the main order should have been much clearer on these aspects, while emphasizing that there is a low threshold test to establish prima facie jurisdiction.22 Judge Paik’s opinion seemed to bring the distinction between Articles 290(1) and 290(5) into his opinion, although it too failed to demarcate the exact differences between the two provisions and establish judicially manageable standards for each of them. Judge Lucky appended a separate opinion advocating a pragmatic approach on when the Convention is silent, where Article 32 should be deemed to include internal waters for the reason that it does not explicitly exclude the immunity of warships in internal

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23 See Separate Opinion of Judge Lucky, n. 2 above.24 See ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Joint Separate Opinion of Judge

Wolfrum and Judge Cot, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20_Ord_15.12.2012_SepOp_Wolfrum-Cot_orig-no_gutter.pdf>.

25 See ITLOS, The “ARA Libertad” Case (Argentina v. Ghana), Separate Opinion of Judge Rao, available online: <http://www.itlos.org/fileadmin/itlos/documents/cases/case_no.20/C20_Ord_15_12_2012_SepOp_Ch_Rao_E_.pdf>.

26 See Opinion of Judges Wolfrum and Cot, n. 24 above, paras. 1 and 2.27 Id., para. 11.

waters, and that it must also be interpreted in harmony with other rules of international law that assure warship immunity.23

Judges Wolfrum and Cot also filed a joint separate opinion24 and justified the grant of relief on the basis of the issue of estoppel. However, where Judge Rao25 questioned whether it can be a rational basis to construct prima facie jurisdiction, he was of the view that waiver or estoppel may become relevant at the stage of merits.

Further, the opinions of Judges Rao, Wolfrum, Cot, and Lucky took the view that the state cannot take shelter behind a judicial decision as an excuse for not implementing its international legal obligations. The respective opinions cited Article 4 of the International Law Commission Draft Articles on State Responsibility and took the view that acts of the Ghana judiciary should not become an excuse.

Separate Opinion of Judges Wolfrum and Cot

Judges Wolfrum and Cot filed a joint separate opinion, which in effect strongly criticizes the main order, and it is worth examining their opinion in detail. The judges state in the opinion that they “cannot join in a significant part of the reasoning” in the order, especially on the issue of whether Article 290(5) deter-mines prima facie jurisdiction in the light of Article 288.26 The separate opin-ion’s reasoning was divided broadly under three headings: the object and purpose of the provisional measures, prima facie jurisdiction under Annex VII of the arbitral tribunal, and estoppel.

On the issue of prima facie jurisdiction, the separate opinion identified three steps: first, “to establish which threshold has to be applied” in determin-ing the arbitral tribunal’s prima facie jurisdiction; second, the existence of a legal dispute; and finally, “whether the Applicant in its discourse with the Respondent has presented facts and law” that permitted the Tribunal to con-struct prima facie jurisdiction of the arbitral tribunal.27

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28 Id., para. 13.29 Id., para. 13, quoting ICJ, Interim Protection, Order of 17 August 1972, ICJ Reports 1972, p. 12

at p. 16, para. 17.30 Id., para. 13, citing, Application of the Convention on the Prevention and Punishment of the

Crime of Genocide, Provisional Measures, Order of April 8, 1993, ICJ Reports 1993, pp. 11–12, para. 14.

31 Id., para. 13, citing, New Zealand v. France Case, ICJ Reports 1995, p. 288.32 Id., para. 13, citing Order of 15 October 2008 on Application of the International Convention

on the Elimination of All Forms of Racial Discrimination (Georgia v. Russian Federation), ICJ Reports 2008.

33 Id., para. 16.34 Id., para. 22.35 Id., para. 23.36 Id., para. 24.37 Id., paras. 26–34.

In dealing with the threshold level to be applied to determine the arbitral tribunal’s prima facie jurisdiction, the Tribunal relied on the International Court of Justice jurisprudence dealing with provisional measures like Icelandic Fisheries Jurisdiction28 to emphasize that an instrument invoked by a party to confer jurisdiction must “[appear], prima facie, to afford a possible basis on which the jurisdiction of the Court might be founded”29 and should be within the ratione personae and ratione materiae.30 The opinion also stressed, in paragraph 13, cit-ing New Zealand v. France31 and Georgia v. Russian Federation,32 that there should be a link between the claim on the merits and the interim measures. In this regard, the opinion also highlighted a case-by-case approach to Article 290(1) and (5) based on the requirement of urgency and on the facts available to the Tribunal at that “moment” when the case is presented.33

In determining the scope of the existence of a dispute, the opinion identified two disputes at the outset, namely, the private dispute between NML Ltd. and Argentina, and the other between Argentina and Ghana, and stated that the Tribunal is interested only in the latter. In the latter dispute, Ghana denied the existence of a legal dispute on the basis that, first, UNCLOS did not apply to inter-nal waters, and second, there was no provision on the immunity of warships in UNCLOS.34 The opinion agreed in principle35 with the first argument that despite the various provisions in UNCLOS, like Articles 8, 10, 28, 211, and 218, there is no comprehensive regime governing internal waters.36 The opinion dealt in detail with the legislative history of various instruments, their deliberation processes, and conferences in concluding that there is no regime for internal waters.37

In view of the second argument on the lack of an applicable provision to internal waters on warship immunity, the separate opinion, inter alia, disagreed

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38 Id., paras. 38 and 39.39 Id., para. 42.40 Id., para. 45.41 Id., para. 46.42 Id., para. 51.43 Id., para. 47.44 Id., para. 43.45 Id., paras. 62 and 68.46 See opinion of Judge Rao, n. 25 above.

with the majority view on the interpretation of Article 32.38 The opinion took the position that Article 32 applies to the territorial sea and it has no applica-tion to internal waters. The learned judges took the view that Article 32 does not create a rule under UNCLOS on warship immunity, but instead addresses the limitations and exceptions to immunity compared to Article 95.39 The opinion further stated its disagreement with the main order that Article 32 creates a “general clause governing the immunity of warships in all ocean spaces” and stated that the application of Article 32 should be confined to territorial seas and innocent passage,40 which is also consistent with the legislative history.41

The opinion took the view that in territorial waters, Article 32 does incorporate the relevant customary international law on warship immunity into UNCLOS, hence Article 32 cannot be the basis to decide on the prima facie jurisdiction of the arbitral tribunal under Annex VII.42 The opinion, nevertheless, took the view that this does not prevent states from asserting warship immunity in internal waters,43 where the basis is in customary international law and not UNCLOS.44

Thirdly, the opinion relied on procedural estoppel45 to explain that Ghana is prevented from opposing the instant proceedings given their undertaking in welcoming the ship as a military ship. The opinion used procedural estoppel as a basis to grant provisional measures. It is questionable, as Judge Rao points out, to view procedural estoppel as a substantive legal basis either to construct prima facie jurisdiction46 or to establish a legal norm on immunity for war-ships in internal waters.

Internal Waters, Port Reception Facilities and “Purely” Internal Waters

The opinion of Judges Wolfrum and Cot observed the scattered nature of the provisions pertaining to internal waters and port state responsibilities in the following way:

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47 See Opinion of Judges Wolfrum and Cot, n. 24 above, para. 24.48 Id.49 Id., para. 25.50 Id., para. 23.

But even a cursory assessment of these provisions clearly indicates their limited scope. They only deal with the status of internal waters, equating that area with the land territory, the access thereto, their delimitation vis-à-vis the territorial sea, the rights of coastal States exercising their juris-diction vis-à-vis vessels having left internal waters and the rights of coastal States to prevent the entry of vessels into their internal waters. However, all these provisions taken together do not constitute a comprehensive legal regime comparable to the one on the territorial sea (see the different approach taken in the Order). In particular, an equivalent to article 21 of the Convention describing the laws and regulations of the coastal State relating to innocent passage in the territorial sea is missing.47

At the climax of reasoning the opinion went on to observe:

The principle governing internal waters is the sovereignty of the coastal State concerned. This is clearly expressed in article 2, paragraph 1, of the Convention,48…As a consequence thereof limitations of the coastal States’ sovereignty over internal waters cannot be assumed.49

This reasoning is somewhat questionable as Article 2(1) deals with the issue of sovereignty in internal waters and it does not deal with the overall applicability of UNCLOS. The Tribunal’s narrow focus on sovereignty in internal waters in Article 2(1) and its attempt to thereby determine the entire application of UNCLOS through this focus seems rather imprudent. Besides, the application of UNCLOS to internal waters cannot be curtailed simply because UNCLOS equates internal waters to land territory.

It is equally unconvincing when the opinion relied on a general principle of law like procedural estoppel to grant relief notwithstanding the warship was still berthing in the port and all that it said on internal waters, as detailed above. Further, the opinion self-destructs by its own admission when it stated that the opinion agrees in principle with the respondents’ argument that UNCLOS does not apply to internal waters,50 but granted relief coming to a diametrically opposite conclusion.

After the ARA Libertad, it is questionable whether the pre-UNCLOS approach of treating internal waters and port facilities as the same thing

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should evolve any further. It is perhaps necessary to distinguish between the sweeping over-generalization of treating internal waters in a composite sense. Internal waters, ports, river ports, waterways, and transit passages that are part of ocean navigation cannot and should not be treated as all being part of inter-nal waters when they are characteristically different from one another. The first step should be to distinguish between internal waters and a port reception facil-ity. Internal waters are quite different from a port reception facility in that the latter is an establishment that interacts with sea-going vessels. Internal waters, in general, may include waters that are “purely” internal like rivers and reser-voirs, as well as internal waters that are part of ocean navigation. It is the latter, namely, the internal waters that are part of ocean navigation, which are con-tended before an UNCLOS judicial forum. It is in this context that the scope of the applicability of UNCLOS should be determined. An UNCLOS judicial forum is not averse to assuming jurisdiction over internal waters that are part of ocean navigation. In this context, the application of UNCLOS to internal waters and port reception facilities makes sense when “purely” internal waters are excluded.

River ports presently play a major role in ocean traffic. For instance, the river port of Hamburg, Germany, is located more than 100 km from the mouth of the River Elbe in the North Sea. A vessel needs to navigate German internal waters on the River Elbe to call on the port of Hamburg. UNCLOS contains an array of provisions on port state jurisdiction, and it cannot be asserted that the application of such provisions will be prevented when the port is located many kilometers up the river. The UNCLOS provisions on port state jurisdiction may apply while the ship is on the river and navigating to a port located far inside the country. If the contrary argument is upheld, then are we to include a port and exclude the river on which the vessel transits to the port? Such a dissected approach to applying the UNCLOS provisions on port state jurisdiction would hardly be logical.

Conclusion

In general, the wordings of the Order reflect the tentative and uncertain nature of the legal findings for the possible concern that the arbitral tribunal may rule it differently. Yet the Tribunal ordered the outright release of the warship where the relief is similar to restitio intergram from a final tribunal on merits that would have affirmed the final rights. In this regard, the Tribunal did not even see fit to release the vessel on a financial undertaking. These observations are particularly critical where greater comity should have been observed under Article 290(5) to the arbitration tribunal that is to be established.

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