Question 2: Subjects/International-

Municipal  
Seventy states sign a multilateral Treaty creating the International Banana
Consortium (the IBC), whose purpose is to promote the interests of Caribbean
banana growers around the world. The Treaty allows the IBC the power to bind
member states to its pricing arrangements and to penalise individual banana
growers that breach IBC regulations. Any state may become a member of the
IBC.

The lost people of Atlantis arise from the sea and build a floating raft of
seaweed 500 square kilometres in size. They declare that they have established
the Floating State of Atlantis. After planting banana trees on its territory, the
Floating State of Atlantis applies for membership in the IBC.

Around the same time, the IBC issues a $20,000 fine against a banana growing
partnership made up of two companies, Sweet and Very Sweet, for exporting
undersize fruit. Sweet is incorporated and has its head office in the State of
Domino; Domino is a party to the Treaty but has not yet incorporated it into its
domestic law (which is similar to the UK). Very Sweet is incorporated and has
its head office in the State of Poker; Poker is not a party to the Treaty. Both
Sweet and Very Sweet challenge the legality of the IBC fine in their respective
domestic courts.

Advise the IBC regarding the likely outcome of the lawsuits launched by Sweet
and Very Sweet. Also advise it as to whether it may accept the membership
application of the Floating State of Atlantis.

1. Statehood Status of Atlantis

The lost people of Atlantis can only join the IBC if they are a state: "Any state
may become a member of the IBC." Thus, the first question is whether this new
Floating State of Atlantis is really a state.

Some of you said that only states could be parties to treaties in general. This is
incorrect. The 1969 Vienna Convention only applies to treaties between
states(Art. 2(1)(a)), but non-state entities are perfectly free to enter into treaty
arrangements—they simply will not be covered under the Vienna Convention
(Art. 3).

1.1. Montevideo Test

The test for statehood under international law is set out in the Montevideo
Convention on Rights and Duties of States (1933), which has now come to be
accepted as stating the customary law in the area. It says:

"The State as a person of international law should possess the following

qualifications:

(a) a permanent population;

(b) a defined territory;

(c) government; and

(d) capacity to enter into relations with other states."

1.1.1 Permanent Population

We have no evidence regarding the size or permanence of the people of

Atlantis. Since they arose from the sea we may speculate that they are water
dwelling creatures and therefore might spend much of their time away from the
floating raft. Populations as small as 10,000 have been acceptable (Nauru).

1.1.2 Defined Territory

The ‘territory’ of Atlantis is 500 square kilometres in size. This is larger than
many existing states, e.g.:

 Andorra (450 sq. km),

 Barbados (430 sq. km)
 Liechtenstein (160 sq. km),
 Monaco (1.9 sq. km), and
 San Marino (60 sq. km).

It is also ‘defined’ in the sense of having ascertainable borders. If you step off
the raft, you will know where the end of the territory is!
Finally, the people of Atlantis would seem to have physical control over the
territory, as no other claimants seem to want it.

However, there are two significant problems arising here:

 Firstly, territory usually refers to land territory (i.e., the term being
derived from ‘terra’). There is no land in Atlantis.
 Secondly, Atlantis floats and to this extent is constantly on the move.
Countries up to now have always stayed in more or less the same place
and this might cause difficulties—i.e., if it drifts into another state’s
territorial sea.

1.1.3. [Effective] Government

Again, we have no real information here. The evidence may allow us to

speculate that there is some form of government (which declares the existence
of the state, organises the people to plant banana trees, and seeks to join the
IBC). There is no evidence that it is ineffective.

1.1.4 Capacity

We do not know whether the government of Atlantis has been able to enter into
international relations with other subjects of international law. Since the test of
"capacity" also raises questions of independence, we might note that there is no
evidence that the people of Atlantis:

 require the use of foreign troops to maintain order (Aaland Islands

Case),
 have given up their "sole right of decision" in all matters or alienated
their independence to another state (Austro-German Customs Union
Case).

And, of course, joining an organisation like the IBC, although restricting a

state’s powers, does not diminish its independence because the arrangement is
by means of international law and with the state’s consent (see, e.g., Austro-
German Customs Union Case).

Some of you pointed out that joining the IBC would be evidence of capacity.
But this is circular—you can’t join the IBC until you are a state...

1.2. Recognition
"Capacity" also raises the question of recognition. To be capable of entering
into international relations other states must accept your ability to do so, and
this is usually done through recognition. We have no evidence that Atlantis has
been recognised by any state.

Notice that if the declaratory view of recognition is taken Atlantis first has to
fulfil the Montevideo criteria. But if the constitutive view is chosen and all of
the IBC states parties recognise it, then Atlantis will be a state with respect to
them and can be admitted into the IBC. If only some of them recognise it we
face difficult questions as to whether it is really a state and whether it can be a
member of the IBC (especially as against those that did not recognise it)...

1.3. ‘State for Purposes of IBC’

An interesting question, arising in part from UN practice, is whether the term
"state" in the fact pattern means "state as established under the rules of
international law" or merely "state for the purposes of this treaty". There
are many states that are Members of the United Nations that raise eyebrows
when you try to fit them under the Montevideo requirements. This has led
some to suggest that the term "state" as used in the UN Charter does not
mean "state under international law."

Applying this to our fact pattern, does Atlantis really have to be a state to be a
functional member of the IBC? Probably not. In which case, the IBC might
be willing to admit it as a "state for the purposes of our IBC Treaty." This
would make sense because as we know there are many different things at the
international level that may have international personality (i.e., have rights
and duties under international law), that are not full-fledged states.

Answer: it would be difficult, although not impossible, to consider Atlantis as

a state under international law. It could be considered one for the limited
membership purposes of the IBC, depending upon that body’s interpretation
of its treaty as well as its general requirements. 

2. Challenges to Legality of ICB Fine (Status of

International Law in Municipal Law)
2.1. Treaty-Based Creature

Since the IBC owes its existence to a treaty, its powers are determined by that
treaty. The Treaty allows it to penalise individual banana growers that
breach IBC regulations, and therefore the fines against Sweet and Very
Sweet would seem to be valid.

Notice that since companies are not directly accountable to international law,
the way this likely would work would be for the IBC to fine a delinquent
company in a country where it had assets, and that country’s courts would
enforce the judgement.

Apart from the treaty, however, the IBC has no existence and unless it has
been around for a very long time (not indicated by the fact pattern), it is
unlikely to have any customary law powers. The fact that only 70 states are
parties to the treaty also may indicate a less than universal acceptance of its
rules. Thus, the IBC would not have a customary law right to fine banana
growers

So the challenges by Sweet and Very Sweet to the IBC fine must be within
their domestic law systems and will revolve around the constitutional
provisions of each state and its relation to international law.

2.2. Effect in Domino—Party to Treaty—UK law—Not incorporated

(Sweet)

The State of Domino is a party to the treaty and is thereby bound by it at the
international level. If the treaty has a provision allowing other states to bring
claims for breaches, then Domino will be liable for any unlawful behaviour
attributable to itself.

However the effect of the treaty in domestic law (which is where the legal
challenge is being made), is hindered by the fact that the Treaty has not been
incorporated into the domestic law of Domino.

Since Domino has a constitution like the UK, the rules regarding
unincorporated treaties apply. These are:

 unincorporated treaties are not part of the domestic law of the UK (Ex
Parte Brind),
 they can be referred to for interpretive purposes by a domestic court in
order to interpret domestic law if that law is unclear (since the UK is
presumed not to violate its international obligations—Salomon v.
Commissioners of Customs and Excise),
  they should not be referred to if the domestic law is clear and the
domestic law must be enforced even in the event of conflict (Salomon
v. Commissioners of Customs and Excise, Ex Parte Brind),
 unincorporated treaties cannot restrict a discretionary power (Ex Parte
Brind)

Answer: As a result, the key rule is the first one. This would mean that unless
there is some legal provision in Domino that would allow the IBC to fine
Sweet (i.e., permissive or enforcement law), then the IBC will not be able to
do so (as against assets of Sweet in Domino).

2.3. Effect in Poker—Not Party to Treaty—Constitution? (Very

Sweet)

Answer: Since Poker is not a party to the treaty it will not be binding upon it.
Unless there is a domestic law that somehow gives the IBC the power to
enforce its fines within Poker, it will not be able to do so within the
jurisdiction of Poker (i.e., against Very Sweet assets in Poker).

The answer remains the same regardless of the constitutional format of

Poker. As mentioned above, it is unlikely that the IBC would have existence
or powers by means of customary international law, and therefore the effect
of customary law upon domestic law does not come into play.