Judicial Approaches Towards Countermeasures in ‘Background’ Disputes

Countermeasures have been recognized in Articles 22 and 49–54 of the Articles on Responsibility of States for Internationally Wrongful Acts (ARSIWA) as a legitimate (subject to certain strict conditions) unilateral act of self-help, undertaken by an injured state against another state that has committed an internationally wrongful act. The specific feature of countermeasures is that, in itself, a resort to them in other circumstances would be a breach of international obligations. However, to the extent that the ARSIWA rules reflect customary international law, invoking countermeasures before an international court or tribunal as justification of otherwise wrongful conduct should be a harbinger of a successful defence of such conduct, regardless of the forum and the area of international law involved. Yet practice does not reflect this expectation. This chapter analyses selected case law in three jurisdictions: WTO dispute settlement, international investment arbitration and the ICJ, where countermeasures in ‘background’ disputes were invoked in proceedings but (save in a couple of cases) the respective judicial authority did not deem it necessary to defer to the respondent’s arguments on countermeasures. A prime example is the Mexico—Soft Drinks dispute, which was adjudicated in the WTO and in several investment arbitrations, the latter even resulting in conflicting findings on the applicability of countermeasures in international investment law. This chapter aims to assess the selected judicial practice with respect to recognizing countermeasures as a defence to otherwise internationally wrongful conduct, with an attempt to answer the question of why courts and tribunals are reluctant to consider such defence in a particular forum. Could it be that the fragmentation of international law and the high specialization of particular regimes (‘governed by special rules of international law’ within the meaning of Article 55 ARSIWA) have eroded the significance of countermeasures as a defence? Is there any room for such defence, or are we perhaps witnessing the demise of countermeasures as an institution of international law? This will be analysed in light of recent calls by some authors that resort to countermeasures should be recognized, as a rule, at least in the WTO and investment arbitration.