Double Interim Relief Denial in Argentina-Uruguay Pulp Mill Dispute before the World Court
On January 23, 2007, the International Court of Justice (ICJ) rejected Uruguay's request for "provisional measures" against Argentina "a form of injunctive relief"aimed at putting an immediate end to blockades of bridges and roads connecting Argentina and Uruguay by Argentine citizens protesting the construction of a disputed pulp mill project on the Uruguayan side of the border. The project is the subject of the Pulp Mills Case (Argentina v. Uruguay) pending before the Court under which the request for provisional measures was made.[1] On July 13, 2006, the ICJ denied Argentina's request for interim relief aimed at halting the Uruguayan pulp mill project altogether.[2] In rejecting the issuance of provisional measures on both occasions, the ICJ found that there was no showing of an urgent necessity to prevent irreparable prejudice to the rights at issue.
Background
The dispute between Uruguay and Argentina arose from the construction of a paper mill project on the banks of the River Uruguay, the natural border between the two countries. The $1.5 billion project is currently under construction near Fray Bentos, Uruguay, within 25 kilometers of a popular tourist resort on the Argentine side of the river. The project represents the largest foreign investment in Uruguay's history, is considered a key source for local employment in Uruguay, and is expected to boost Uruguay's gross domestic product by more than two percent. The project sponsor of the pulp mill is Oy Metsa Botnia (Botnia), a Finnish company and one of Europe's largest pulp producers.
In its May 4, 2006 complaint (Application) instituting proceedings before the ICJ, Argentina claimed that Uruguay, by unilaterally authorizing the construction of the paper mills, violated the 1975 Statute of the River Uruguay (1975 Statute), a treaty between Argentina and Uruguay establishing "the joint machinery necessary for the optimum and rational utilization of the River Uruguay." Under the 1975 Statute, disputes between the parties are to be heard by the ICJ. Argentina asked the ICJ to adjudge and declare that Uruguay must cease its wrongful conduct and further seeks compensation for the injury resulting from Uruguay's alleged failure to comply fully with the prior notification and consultation provisions of the 1975 Statute.
The International Finance Corporation (IFC), the World Bank's private-sector lending institution, and the Multilateral Investment Guaranty Agency (MIGA), another World Bank affiliate, conducted 18 months of due diligence on the project and concluded that the Botnia plant is consistent with their environmental policies and procedures. The IFC and MIGA voted to approve a financing and guaranty package for the plant on November 21, 2006-one day after the commencement of the bridge blockade that triggered Uruguay's request for provisional measures in this case.
The 2006 Order
Argentina's Application to the ICJ was accompanied by a request for the indication of "provisional measures." Provisional measures permit the ICJ to preserve the rights of the parties pending final decision on the merits of a case, and require a showing that such measures are necessary to prevent irreparable prejudice to the rights in dispute. Evidence of urgency also is required. Here, Argentina sought an Order that, pending the Court's final judgment, Uruguay suspend immediately all authorizations for the construction of the paper mill project, take all necessary measures to suspend all construction work, and cooperate with Argentina to protect and preserve the aquatic environment of the River Uruguay.
In the June 2006 hearings on the request for provisional measures, Argentina maintained that under the 1975 Statute a project may proceed only if agreed to by both parties or that, lacking such agreement, the project should not proceed until the ICJ has ruled on the dispute. Argentina also objected to the location of the pulp mills. In its defense, Uruguay invoked its sovereign right to sustainable economic development on its territory and emphasized that the mills would adopt the safest and most-up-to-date technology (that would meet European Union standards). Uruguay further claimed that it had complied in good faith with the notification provisions of the 1975 Statute and that the foreign ministers of the two countries agreed in March 2004 that the project could go forward subject to joint monitoring.
On July 13, 2006, the ICJ issued an Order rejecting, by a vote of 14 to one, Argentina's request for provisional measures. While finding that it had prima facie jurisdiction to deal with Argentina's request, the ICJ concluded that, based on the "the circumstances as they now present themselves to the Court," the construction and the commissioning of the mills did not represent an "imminent threat of irreparable damage to the aquatic environment of the River Uruguay," or an imminent threat of pollution.[3] However, the Court noted that the pulp mills were not yet operational, that by proceeding with the work Uruguay "necessarily bears all risks relating to any finding on the merits that the Court might later make," and that the construction of the mills at the current site cannot be deemed to create a fait accompli i.e., such action cannot improve Uruguay's legal position vis-Ã -vis Argentina.[4]
The ICJ stated that, should it find at some later stage that Uruguay failed to adhere to the provisions of the 1975 Statute, any such violations would be capable of being remedied by the Court at the merits stage of the proceedings.[5] The Court also noted that its decision leaves unaffected the right of Argentina to submit a future request for the indication of provisional measures based on new facts.[6] In the non-binding part of its Order (main text), the ICJ encouraged "both Parties to refrain from any actions which might render more difficult the resolution of" their dispute.[7]
The 2007 Order
On November 29, 2006, nine days after Argentine citizens completely blockaded the Fray Bentos bridge over the River Uruguay, Uruguay filed a request with the ICJ seeking an Order that, pending the Court's final judgment, Argentina "shall take all reasonable and appropriate steps at its disposal to prevent or end the interruption of transit between Uruguay and Argentina, including the blockading of bridges and roads between the two States." The Fray Bentos bridge forms a major artery for Uruguayan exports to Argentina and for tourist traffic into Uruguay (the South American summer tourist season starts in December). Uruguay also complained of other roadblocks by Argentine civic groups.
During the December 2006 hearings on Uruguay's request for provisional measures, Uruguay maintained that its right to proceed with construction and authorization of the Botnia plant was at serious risk of irreparable prejudice as a result of Argentina's alleged failure to end the blockades of international bridges.[8] According to Uruguay, the blockades were aimed at compelling it to halt construction of the Botnia plant and to prevent the plant from ever coming into operation, the same goal Argentina is pursuing in its case against Uruguay. Argentina flatly denied having encouraged the roadblocks and pointed out that they had had no effect on the construction of the Botnia mill or on tourism or trade between the two countries.
On January 23, 2007, the ICJ issued an Order rejecting, by 14 votes to one, Uruguay's request for provisional measures. The ICJ concluded that Uruguay had failed to demonstrate an urgent necessity to prevent irreparable harm to the rights claimed by it in the case before the Court, specifically, the right to proceed with construction and operation of the Botnia plant in conformity with the provisions of the 1975 Statute and the right to have the current dispute resolved by the ICJ under that Statute. While the ICJ noted it had jurisdiction to address Uruguay's request, the Court stated that it was not persuaded, based on the "the circumstances, as they now present themselves to the Court," that the Argentine "roadblocks [of which Uruguay complained] risk prejudicing irreparably the rights which Uruguay claims in the present case from the 1975 Statute as such."[9] There was insufficient evidence that the construction works were affected at all by the roadblock protests and there was no showing of an "imminent" risk of prejudice. In the Court's view, "notwithstanding the blockades, the construction of the Botnia plant progressed significantly since the summer of 2006 with two further authorizations being granted."[10]
In the absence of evidence of an imminent risk of irreparable prejudice to the rights of Uruguay in the dispute caused by the Argentine blockades themselves, the Court declined Uruguay's further request to order Argentina to abstain from any measure that might aggravate or make more difficult the settlement of the dispute, or that might prejudice the rights of Uruguay in the dispute.[11] The ICJ did, however, reiterate its call to both countries "to refrain from any actions which might render more difficult the resolution of" their dispute.[12] The ICJ finally noted that its decision leaves unaffected the right of Uruguay to submit any future request for the indication of provisional measures based on new facts.
What's Next?
Following the 2006 Order of the ICJ, there is no current impediment for Uruguay to proceed to permit the construction and eventual operation of the Botnia plant, although Uruguay will be proceeding at its own risk. In its 2007 Order ICJ merely noted that "the construction of the Botnia plant progressed significantly since the summer of 2006" and that "the construction of the plant is thus continuing."[13]
Pursuant to a procedural Order issued on July 13, 2006, Argentina was to file its initial pleading (Memorial) on the merits of the case"i.e., its principal claims against Uruguay"by January 15, 2007. Uruguay's response, or "Counter-Memorial," is due on July 20, 2007.
If Uruguay wishes to challenge the ICJ's jurisdiction or the admissibility of Argentina's Application of May 4, 2006, it must do so by April 15, 2007.[14] Such a move would suspend the main proceedings and lead to a separate phase dedicated to the issues of jurisdiction and/or admissibility and ending in a formal judgment regarding those issues. Uruguay may also file counterclaims against Argentina. A decision on the merits of the case might not be issued for a number of years. Meanwhile, the parties have asked King Juan Carlos I of Spain to help facilitate dialogue between them. The 2007 Order expressly notes "Uruguay's strong preference that this matter be resolved diplomatically and amicably by the two Parties."[15]
If the case proceeds and the ICJ accepts Argentina's claims in whole or in part, it could either issue a declaratory judgment confirming Uruguay's breach of the 1975 Statute of the River Uruguay or indicate specific remedies, including compensation. While there are no cases between sovereign States where the ICJ has, in the past, ordered the dismantling or discontinuance of industrial projects by way of final remedy, the ICJ has explicitly reserved its right to impose such a remedy. While the ICJ enjoys wide discretion in imposing remedies, it is unlikely to impose a remedy that is materially impossible or which involves a burden out of all proportion to the injury to be remedied. It also is unlikely that an extreme remedy embodied in an ICJ judgment would be enforced in practice, unless the prevailing State were to succeed in convincing the United Nations Security Council (including the five Permanent Members holding veto power) to impose mandatory sanctions to enforce the ICJ's judgment'something which the Council has never done in the past.[16]
Pieter H.F. Bekker, Ph.D., a member of the ASIL Executive Council, is a Partner in the International Dispute Resolution Practice Group at McDermott, Will & Emery LLP in New York City (pbekker@mwe.com). He also is an Adjunct Professor at Fordham University School of Law. A former staff lawyer in the ICJ Registry, he has written two books (Commentaries on World Court Decisions (1987-1996) (1998) and World Court Decisions at the Turn of the Millennium (1997-2001) (2002), both with Martinus Nijhoff Publishers) and numerous articles and notes on the ICJ. He also has appeared as counsel in ICJ cases. The views expressed herein are solely those of the author.
Footnotes
[1] The case is styled Case concerning Pulp Mills on the River Uruguay (Argentina v. Uruguay).
[2] The text of the July 13, 2006 Order (the 2006 Order) and of the January 23, 2007 (the 2007 Order), together with other official documents mentioned in this Insight, is available from the ICJ's website, <http://www.icj-cij.org>. The text of the 2006 Order is reproduced in 45 ILM 1025 (2006). In each case, the judge ad hoc appointed especially for the case by each party was the sole judge voting against the Order denying the request of the party having appointed him. Under the ICJ Statute, States parties to an ICJ case that have no judge of their nationality sitting on the regular bench are entitled to appoint a judge ad hoc of their choosing. Both Argentina and Uruguay have exercised this right.
[3] See 2006 Order, Paras. 74-75.
[4] Id., Para. 78.
[5] Id., Para. 70.
[6] See ICJ Rules of Court, Art. 75(3). The standards for such a fresh request are the same as those applicable to the initial request, provided that the new request is not an exact copy of the request previously made and rejected. The ICJ has never had to determine the validity of a fresh request in a situation where it had rejected a previous request by the same party.
[7] Id., Para. 82.
[8] A three-member ad hoc arbitral tribunal convened, at Uruguay's request, under the auspices of the Treaty of Asunción establishing the Southern Common Market (better known as "Mercosur") unanimously condemned Argentina in connection with earlier blockading actions in a decision dated September 6, 2006. See <http://www.sice.oas.org/dispute/mercosur/Laudo060906_s.pdf> (Spanish text).
[9] 2007 Order, Para. 41.
[10] Id., Para. 40.
[11] Id., Para. 50.
[12] Id., Para. 53. Strictly speaking, this call is non-binding as it does not appear in the operative paragraph of the Order. The Order itself does not impose any obligation on either party.
[13] Id., Para. 40. Elsewhere in the 2007 Order, the ICJ found that "any right Uruguay may have to continue the construction and to begin the commissioning of the Botnia plant in conformity with the provisions of the 1975 Statute, pending a final decision by the Court, effectively constitutes a claimed right in the present case, which may in principle be protected by the indication of provisional measures." Id., Para. 29 (emphasis added).
[14] See Art. 79(1), ICJ Rules of Court. The Court's decision in the 2006 and 2007 Orders on the parties' provisional measures requests "in no way prejudges the question of the jurisdiction of the Court to deal with the merits of the case or any questions relating to the admissibility of the Application, or relating to the merits themselves." 2006 Order, Para. 85; 2007 Order, Para. 54.
[15] 2007 Order, Para. 14.
[16] See Art. 94(2), United Nations Charter.