Islj 2009 3-4 - TMC Asser Instituut

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applied by arbitrators considering these concession agreements used to be dear: municipal law governs breaches of contract between alien investors and a host government. 223 There was, of course, no question of “international personality” for the private enterprise party to the agreement. Recently, however, a series of important international arbitrations have held that although concession agreements lack the “wholly international” character of traditional state-to-state contracts, they are “basically international.” 224 Because of the nature of the contract - and not because of the status of the non-state party - “[p]arliamentary supremacy and State sovereignty” of the host are held to have ceased to be the “decisive criteria.” 225 In 1958, Swiss arbitrators in the case of Saudi Arabia v. Arabian American Oil Co. 226 upheld the use of freezing clauses 227 in concession agreements. The panel stated that “[n]othing can prevent a State, in the exercise of its sovereignty, from binding itself irrevocably by the provisions of a concession and from granting to the concessionaire irretractable rights.” 228 In a subsequent case, the arbitrator found it “natural” that investors be protected from legislative changes which would alter the character of the contract. 229 The arbitrator noted that such protection could not be guaranteed by the “outright application” of national law, since such law could be unilaterally changed by the state. 230 Indeed, the inclusion of freezing clauses came to be seen as a key factor in removing the agreement from municipal law. 231 In Revere Copper & Brass, Inc. v. Overseas Private Investment Corp., 232 a sole French arbitrator was able to cite sufficient arbitral precedent to call it an “international law rule” that “a government is bound by its contracts with foreign parties notwithstanding the power of [its] legislature under municipal law to alter the contract.” 233 He joined previous panels 234 in finding that a governmental contract should be “internationalized” and that the public international law principles, such as pacta sunt servanda, applied. 235 The logic of these decisions seems to suggest that a similar result would be reached if the privileges and guaranties contained in a bilateral IOC-Greece agreement were ever brought to arbitration. The notion of internationalization seems to embody Brierly’s suggestion for non-treaty international agreements and would allow the IOC to create international obligations with Greece even though the IOC might lack the status and capacity normally required for international contracts. For several reasons, however, the IOC could not rely on these precedents alone to produce a similar result in case of a breach by Greece. First, certain characteristics of these agreements other than the presence of freezing clauses were significant to the findings of’ ‘internationalization.” Some of these would not be present in a bilateral agreement between Greece and the IOC. The most significant of these characteristics is the purely economic nature of the concessions; all were well supported by consideration given by the concessionaires. The contracts were intimately associated with the host states’ economic and social development aspirations and were a part of the very public process of North-South cooperation for development. 236 Although locating the permanent Olympic site in Greece would result in substantial benefits to the Greek economy, the revenues produced by the games would not be shared with Greece 237 and the arrangement could not fairly be characterized as an economic development agreement. 238 Second, the principle of ‘’internationalization’’ in the case of concession agreements is “by no means representative of an international legal consensus.” 239 Recent U.N. Resolutions 240 associated with the “New International Economic Order” that limit the legal protection of foreign investment reflect a contrary view. The international contract doctrine has been called “[a] disregard of State practice, in favor of doctrinal pronouncements and a small number of arbitral awards.” 241 The IOC would be ill-advised to rely on that doctrine to bring its bilateral agreement with Greece under the purview of international law. V. A Suggested Solution: Participation of Third Party Guarantors and Integration of Financing Arrangements If the policy ends of the permanent site proposal are to be realized, the obligations of Greece to respect the autonomy and neutrality of the Olympic site must be binding and enforceable in accordance with their terms and not susceptible to unilateral termination. This can be achieved only by making those obligations binding under international law. 242 Since, however, neither the status of the Olympic organization 243 nor the subject matter 244 of the contract bring the agreement under international law, the necessary conclusion is that no purely bilateral arrangement can give the IOC the same security enjoyed by IGOs under their headquarters agreements. The only alternative is to involve some third party which does possess the capacity to bind Greece under international law. Third parties eau be involved through the mechanism of treaties made for the benefit of third parties. Treaties for the benefit of third parties are recognized under public international law. 245 Article 36 of the Vienna Convention provides that “A right arises for a third State from a provision of a treaty if the parties to the treaty intend the provision to accord that right … to the third State … and the third State assents thereto. Its assent shall be presumed as long as the contrary is not indicated. …” 246 These treaties of guaranty have involved the guaranty of “the possession of specified territory,” “the demilitarization of a piece of territory” or permanent neutrality. 247 Because these treaties have been made for the benefit of a third international legal person, they are not the best precedent for guaranty by treaty of the autonomy and neutrality of the Olympic site. The better precedents are the guaranties made by states with respect to the long-term foreign investments of their nationals. States make these guaranties when, although they have no desire to become directly involved in financing or operating a project in a foreign country, they do have some interest in seeing such investment undertak- 222 Virginia Note, supra note 216. at 862. 223 Revere Copper & Brass, Inc. v. Overseas Private Investment Corp., 56 I.L.R. at 258, 271 (Haight, Wetzel & Bergan, arbs. 1978); Texaco Overseas Petroleum Co. [TOPCO] & California Asiatic Oil Co. v, Libyan Arab Repub!ic, 53 I.L.R. 389, 431-36 (Dupuy, arb, 1977). 224 56 I.L.R. at 271. 225 Id. at 272. See generally Delaume, What is an International Contract?, an American and Gallic Dilemma, 28 Int’l & Comp. L.Q. 258 (1979). 226 27 I.L.R. 117 (1958). 227 “Freezing clauses” or “stabilization clauses” prohibit the host from changing the investor’s rights under the contract by changing or modifying the municipal law of the host country. 53 I.L.R. al 456-57. 228 27 I.L.R. at 168. 229 Sapphire v. Internat’l Petroleum Ltd. v. Nat’l Iranian Oi1 Co., 35 I.L.R. 136, 171 (1967). 230 Id. 231 Id. at 174. See, e.g., 53 I.L,R. al 459-60. 232 56 1.L.R. 258 (Haight, Wetzel & Bergan, arbs. 1978). 233 Id. al 282. But see BP Exploration Go. (Libya) v. Libyan Arab Republic, 53 1.L.R. 297, 327-29 (Lagergren, arb, 1973- 74). 234 See, e.g., 53 I.L.R. at 462; Sapphire Int’l Petroleums Ltd. v. Nat’l Iranian Oil Co., 35 I.L.R. 136, 181 (Cavin, arb. 1963). 235 56 I.L,R. at 279-84. 236 See 53 J.L.R. at 456-57. 237 Indeed, such sharing would undermine the goal of isolating the IOC from the forum State. See text accompanying notes 43-69 supra. 238 Furthermore, concession agreements are limited to a term of \ears and the permanent site contract between the IOC and Greece would probably be open ended and perpetual. See, e.g., Revere Copper & Brass, Inc. v. Overseas Private Investment Corp., 56 1 L.R. 258 (twenty-five year agreement). 239 Virginia Note, supra note 216, at 877. 240See, e.g., Permanent Sovereignty over Natural Resources, GA. Res. 1803, 17 U.N GAOR Supp. (No. 17) 15, UN. Doc. A/5217; Charter of Economic Rights and Duties of States, G.A. Res. 3281, 29 UN. GAOR Supp. (No. 31) 50, U N. Doc. A/963l (1974). The latter provides that “where the question of compensation gives rise to a controversy, it shall be settled under the domestic law of the nationalizing State and by its tribunals, unless otherwise agreed between the parties.’’ Id. chap. 2, art. 2(2)(c). 241 Fatouros, International Law and the Internationalized Contract, 74 Am. J. Int’l L 134, 137 (1980). 242 See text accompanying note 153 supra. 243 See text accompanying notes 157-212 supra. 244 See text accompanying notes 213-41 supra. 245 McNair, The Law of Treaties 239-54 (1961). 246 Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, art, 36, 8 I.L.M. 679 (1969). Article 37(2) provides that, “When a right bas arisen for a third State in conformity with article 36, the right may not be revoked or modified by the parties if it is established that the right was intended not to be revocable or subject to modification without the consent of the third State.” Id. art. 37(2). 247 L. McNair, The Law of Treaties 239 (1961). See generally K. Idman, Le Traité 158 <strong>2009</strong>/3-4 H I S T O RY
en. 248 Typically, two separate contracts are involved. 249 The guarantor state concludes a treaty with the host state in which each state agrees to protect the foreign investments of the other’s nationals, 250 The second contract is between the guarantor state and its nationals, insuring the latter against a variety of host State actions. An example is a U.S. Overseas Private Investment Corporation (OPIC) guaranty contract, which insures nationals against any action by the host state which prevents the enterprise from “exercising effective control over the use or disposition of [a] substantial portion of its property.” 251 The guarantor state thus guarantees the foreign project not only against outright expropriation or nationalization, but against actions which constitute “creeping expropriation” and against any breach of the concession agreement between the enterprise and the host state. 252 Both the guaranty contract between the enterprise and the guarantor and the concession agreement between the enterprise and the host state are governed by municipal law, but the guaranty treaty between the guarantor and host state clearly creates obligations under international law. 253 A. Basic Plan for Third-Party State Guaranties of the Permanent Olympic Site Drawing on both the public treaties of guaranty and national practice with regard to investment guaranty agreements, a basic structure for achieving legal protection for the permanent Olympic site is suggested: by the execution of two other agreements. An Agreement Among Guarantors would specify the rights and obligations of the Guarantors as against one another in the event of the repudiation or default of any one Guarantor. Also, the Guarantors and the IOC would conclude a Memorandum of Agreement in which the Guarantors reaffirm their joint and several obligations to invoke the Treaty’s dispute resolution procedures 258 on behalf of the IOC and explicitly recognize that their status as Guarantors gives them no special rights in or control over the site or administration of the games. B. Integration of Financing into the Basic Plan If the games are moved to a permanent site in Olympia, the IOC will require a large amount of capital to construct the necessary facilities. 259 Lenders of the capital for that initial investment will be relying entirely on the revenues produced by the free and unimpeded operation of the games. Furthermore, the lenders, like all major foreign investors, would demand guaranties from the forum state with regard to the free operation of the games as a revenue-producing enterprise. These guaranties would be the same as those the IOC needs to achieve operational autonomy. Thus, the basic plan and the financing arrangements could be integrated by extending the guaranties made by the Guarantors for the benefit of the IOC’s creditors: The essential legal framework for the site would be set forth in the Bilateral Agreement between Greece and the IOC. 254 This agreement would be modeled on the headquarters agreements 255 and would provide the privileges and immunities the IOC needs. 256 As a condition precedent to the IOC’s performance (principally the construction of the Olympic facilities and the conduct of the games at the site), Greece would enter into a Treaty of Guaranty with two or more other states. In this treaty Greece would convenant to abide by the terms of the Bilateral Agreement with the IOC. 257 The IOC would be protected from the influence of the Guarantors Besides allowing the Olympic organization to raise the funds it requires in the private international capital markets, 260 this arrangement strengthens the legal regime for the permanent site. First, it qualitatively increases the real security of the IOC by raising the cost to Greece of abrogation of the Bilateral Agreement by Greece. Participants in the multinational group of Guarantors could include various official creditor and guaranty agencies and perhaps even the World Bank. “The involvement of lenders from a number of countries and official international institutions should minimize the chances of arbitrary or politically motivated action by the host country …” 261 The experience of sponsors and creditors of large foreign de Garantie en Droit International (1913). 248 P. Nevitt, Project Financing 91(1980). The United States has had an investment guaranty program in operation since 1948. Fatouros, supra note 218, at 102. 249 These agreements are in addition to a concession agreement between the investor and the host state. See notes 219-25 and accompanying text supra; note 254 infra. 250 Fatouros, supra note 218, at 104-06. See, e.g., Treaty of Friendship, Commerce & Navigation, Dec. 23, 1957, Federal Republic of Germany-Dominican Republic [1959] Bundesgesetzblatt (II) 1168; Treaty of Friendship, Commerce & Navigation, Feb. 2, 1948, U.S.-Italy, 63 Stat. 2255, T.I.A.S. No. 1965, 79 U.N.T.S. 171. See generally H.C. Hawkins, Commercial Treaties & Agreements; Principles and Practice (1951); R. Wilson, United States Commercial Treaties and International Law (2nd ed. 1960); Walker, Modern Treaties of Friendship, Commerce and Navigation, 42 Minn. L. Rev. 805 (1958); Walker, .Provisions on Companies in U.S. Commercial Treaties, 50 Am. J. Int’l L. 373 (1956). 251 Revere Brass & Copper, Inc. v. Overseas Private Investment Corp., 56 J.L.R. 258, 261-62 (Haight, Wetzel & Bergan, arbs. 1978). See generally OPIC, Investment Insurance Handbook (1980). 252 See Anaconda Co. & Chile Copper Go. v. OPIC, 14 1.L.M. 1210, 1227-28 (Fuld, Sommers & Vagts, arbs. 1975); Revere Brass, 56 I.L.R. 258, 296. See generally Virginia Note, supra note 216, at 884. 253 Fatouros, supra note 218, at 191. 254 In foreign project financing, the concession agreement, or whatever contract is entered into between the sponsors and the host State, sets forth the basic legal framework for the project. Rendell, supra note 219, at 43. 255 See text accompanying notes 114-46 supra. 256 See text accompanying notes 43-69 supra. The IOC should consider negotiating a choice of law clause, similar to that commonly used in concession agreements, providing for application of those principles of Greek law not inconsistent with international law. See. E.g., clause 28 of TOPCO’s 1966 deed of concession with Libya: This concession shall be governed by and interpreted in accordance with the principles of law of Libya common to the principles of international law and in the absence of such common principles then by and in accordance with the general principles of law, including such of those principles as may have been applied by international tribunals. Texaco Overseas Petroleum Co. [TOPCO] & California Asiatic Oil Co, v. Libyan Arab Republic, 53 I.L.R. 389, 442 (Dupuy, arb. 1977). H I S T O RY <strong>2009</strong>/3-4 159
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2009/3-4 EU Sports Policy FIFA Tran
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EDITORIAL 2 ARTICLES The Future EU
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The Future EU Sports Policy: Hollow
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Community a new dimension, such as
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Sports Ministers Conference, The Ha
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and 15) that the provisions of Comm
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The Case against the Applicability
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not fall within the wording “tran
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4 See also in support of this argum
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This is not an unrealistic career p
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cerned, the specificity of sport, a
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compensated for the income it could
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A more basic question is what weigh
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Article 17 (6) For a player over 23
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live sports rights in many other co
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equired coverage of 90% is not met.
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letes in any form, even including a
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Article 95 of the CHL Rules governs
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The RFL may declare that a player w
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ices acquired by the clubs in the r
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competition (thereby enhancing the
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Each country of the Kingdom has all
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2.2.The objectionable NAOC intentio
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Sub Rule 29.5 It reads “The area
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To secure the appreciation of CAS i
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5.3 Recognition by the internationa
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however it will all come to the lev
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ICAS International Council for Arbi
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or serious bodily harm. Such prepar
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cumstances arise, a measure can be
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to the amount of regulations in the
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4.1. The relationship between sport
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5. Conclusion In this article I hav
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ing a player. In order to create an
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9 The ‘reserve clause’ gave clu
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In this research, the focus will be
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sports agent will not bargain at ar
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have a dominant position. Thereafte
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3.5.2. Regulations of the KNVB The
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Siekmann, R.C.R., Parrish, R., Bran
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limit on the number of times a play
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to these regulations. This refers,
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Article 4 of the Act No. 401/1989 p
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any tax evasions. Added to this is
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the machines while, at the same tim
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saw sports betting as an easy way t
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mulated by football clubs, it was a
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tions,” which means that there we
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which includes the state monopoly a
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Page 119 and 120: ting market is the fact that most o
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Page 133: lenging time for the industry. As a
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Page 155 and 156: extraterritoriality nor a division
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Page 159: Thus, International Law, once a law
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