A Discussion on
Procedural Justice under the Regime of The United Nations Compensation
Commission (UNCC)
Erasmus
University Rotterdam
Faculty of Law
2000.12
The United Nations
Compensation Commission (UNCC) is a subsidiary organ of the United Nations
Security Council. It was established by the Council in 1991 to process claims and
pay compensation for losses resulting from Iraq's invasion and occupation of
Kuwait. Compensation is payable to successful claimants from a special fund
that receives a percentage of the proceeds from sales of Iraqi oil.1 The Security Council established Iraq's
legal responsibility for such losses in its resolution 687 of 3 April 1991:
“Iraq...is
liable under international law for any direct loss, damage, including
environmental damage and the depletion of natural resources, or injury to
foreign Governments, nationals and corporations, as a result of Iraq's unlawful
invasion and occupation of Kuwait.”2
In its framework, the
Security Council, as the creator, supervises the UNCC of which the main organ
is its Governing Council. The Governing Council is headed by the Secretariat
and composed of the representatives of member states of Security Council and
has overall responsibility in deciding policy matters and making final and
binding decisions on the amounts of compensation. Appointed by the Governing
Council, the Commissioners work in panels to make recommendation on the amounts
of compensation. To service the Commission there is also a Secretariat headed
by an Executive Secretary which consists not only of lawyers but also of
computer experts, statisticians, and accountants.
Although claims
commissions are not new to international law,3
scholars heralded the establishment of the Commission by the United Nations as
“unique” and “unprecedented.”4 Indeed,
the UNCC is the first claims commission of its kind established by the Security
Council. Nevertheless, actually since the birth of the Commission, its nature
has been under severe controversy. Namely, it is supposed to be a political
organ but by looking into the general procedures it has been following and the
substantive rules applied in the process, it is virtually to some extent
working as a quasi-judicial body. Just as Carlos
Alzamora, the Executive Secretary of the UNCC established in 1991, ever
addressed in an international forum,
“…the Commission is fundamentally political and administrative in
nature, but that it does not entirely dispense with elements of judicial
settlement, …”.5
Personally I am a
supporter of such a point of view: From
an institutional viewpoint, the UNCC is curious creation assuming the form of a
hybrid between an administrative claims procedure and an international tribunal.
It incorporates a system of independent commissioners, with a task reminiscent
of that of arbitrators or judges, with a political superstructure, the Governing
Council. This body will make the final decisions based on recommendations. But
the political composition of the Governing Council can impede the work of the
Panels, in that the Governing Council may easily become an arena for the
political ambitions of individual Governing Council member states. In extreme,
the awards of the UNCC would be more based on the interests and policies of the
state members of the Council, and not on principles of international law. This,
to my mind, leaves the door open for serious criticism of the procedure.
But things might be
much worse than you imagined when we pierce its veil and look into what is
really going on under this hybrid system. This article is just standing on this
side to highlight some of the defects and difficulties with the institutional
model chosen and focus on a discussion on the procedural justice in the UNCC,
whereby particular attention is devoted to those practical and serious problems
which the UNCC procedure gives rise to and which Iraq faces in the preparation
of its legal defense.
Let’s
first take a look at Iraq’s position in the claims procedure before the UNCC.
There is no doubt that Iraq is the proper respondent in all the cases submitted
to the UNCC; but, surprisingly, Iraq is not a party to the proceedings. Iraq
has been granted a ‘right to a fair hearing’ neither in the Security Council
Resolutions establishing the UNCC, nor in the UNCC Procedural Rules.6 Nonetheless, the Secretary General ‘s
Report preceding the establishment of the Commission points out that:
“Given
the nature of the Commission, it is all the more important that some element of
due process be built into the procedure. It will be the function of the
commissioners to provide this element.”7
As
was already established, the panels comprising independent commissioners
perform the core judicial tasks by reviewing the claims, but the panels cannot
render binding judgments. Apparently, the Commission was not even intended to
be fully disconnected from political considerations. Precisely this political
control over the adjudicative process waters down the contribution of the
Commissioners and makes such due process undertakings hollow.
It
is true that Iraq has been allowed to present its views at the beginning of
each Governing Council Session and submit written comments under Article 16 of
the Procedural Rules. However, this does not amount to “due process” with the
requirement of audi alteram partem (the
right of each party to be heard), since in the context of Article 16 Iraq
will not be given the identity of the claimants, nor any other particular
forms, such as legal beliefs submitted by the claimants. All this makes it
difficult for Iraq to prepare its defense. And it also makes us to estimate
what impact these “comments” might have and what issues they address, since
these comments are kept confidential under the Procedural Rules. Thus, such
limited opportunities which are afforded to Iraq to make comments are not
considered as application of the rights that any defendant in any civilized
country has, but, cynically speaking, they are conceived as some kind of acts
of grace granted by the Holy Office of a modern Inquisition to the sinner
before he is sent to the stake.
In
reality, the situation in the UNCC proceedings in even worse. Iraq’s right to
be heard is not just violated, it has simply not been foreseen. The basic
concept on which this system is built assumes that there is no need for Iraq to
be heard. And some people commenting on the system even dared to say: “Iraq has
no discernible legal interest to defend”. In other words, when Iraq’s counsels
complain there is no due process in the UNCC, those who have devised this
system would reply: there is no need for due process.
You
may think this an exaggeration; but by looking into some eye-catching flaws of
the procedure before the UNCC, and the liberties that it takes with the rights
normally granted to a defendant, you will easily come to a conclusion that: Iraq has no standing as defendant before the
UNCC.
A. Deprivation of Iraq’s Right to Be
Informed of and Have Access to the Claims Raised against It
The
abuses started with the violations of the right to be informed of the charges
and claims brought against the defendant. One of the issues with which the
Commission is confronted is the question: should Iraq get the claims files? You
may be shocked such a question should even be asked. The answer seems obvious:
of course, in any court or arbitration proceedings, the defendant should get
the files. But in the UNCC system, the answer is far from apparent; indeed
Iraq’s access to the claims is seriously restricted and in many claims
altogether denied.
First
of all, Iraq is not informed of the claims when they are made. Many claims have
been awarded without Iraq ever having seen them. The only information to Iraq
that the Rules foresee are the Article 16 Reports as mentioned above. But these
reports are far from sufficient for a serious investigation of the claim; they
certainly do not allow a considered defense against them.
Even
worse, Article 36 of the Rules provides that, in these “unusually large or
complex cases”, a Panel may “request further written submissions and invite
individuals, corporations or other entities, Government or international
organizations to present their views in oral proceedings”. But confusingly, the
UNCC Governing Council, when making these rules, has sought the views of
everybody in the world but just has not wasted any though on Iraq as the State
most concerned with these proceedings. If Panels should invite the views of
Iraq under this provision, the Rules grant to it no standing other than that of
any outsider who might be called to add his grain of wisdom to that of that of
the Panel. Compared to such rules, the Holy Inquisition is a model of due
process.
B. Infringement of Iraq’s Right to
Comment and Present Defense
The
second fundamental procedural right which is seriously violated, after the
right to be informed, is the right of defendant to comment on the opponent’s
case and to argue its own case. It is inherent in the adversarial procedure
dear to the Common law; it is also inherent in the “principe du contradictoir”
which rules the French family of laws on civil procedure both before State
courts and in arbitration. It would thus appear to be a principle of general
application in any procedure which meets a minimum standard of law. Some people
would characterize the procedure before the UNCC as “administrative, but this
does not change anything in this respect. Due process and also, to variable
degrees, the right to be heard are fundamental principles recognized not only
in judicial or arbitral proceedings but, as far as the writer knows, also in
administrative proceedings in all civilized countries.
The
denial to the defendant of any real right to present its case is obvious in
proceedings where the Rules provide for merely one opportunity of “commenting”,
not on the claims themselves but only explanations which the Secretariat (and
not even the Panels concerned) has extracted from them and made available in
its “Reports and Views on Claims” under Article 16. Here, too, some timid
alleviation of the fundamental injustice in the Rules has been provided by the
Panels in “unusually large or complex cases”. But these exceptions apply only
in these cases and not in other cases for which hundreds of millions of dollars
have been awarded for claims which Iraq never saw and on which it had no proper
opportunity to comment.
C. A third Category of
Procedural Violations:
The Use of Evidence Undisclosed to Iraq
Apart from the shocking violations of the due process,
there are also others: as a third category of procedural violations, there are
the rules relating to evidence, in particular the right to produce evidence,
the right to inspect evidence and the right to comment on it. In all these
areas there are violations of due process of law. The WBC claim8 is a
particularly striking example.
In this case, accounting evidence was not brought
before the Panel but remained in Kuwait.
It was a claim by the Kuwait Oil Company (KOC) and the accounting
records were kept in Kuwait. The Panel did not have any access to them
directly, not did Iraq. In order to provide at least a semblance of scrutiny,
the Panel organised an inspection. But the Panel did not require the production
of the records nor did it go to Kuwait to inspect them there, instead, it
delegated its task to a so-called “Verification Team” which included only one
member of the Panel and two members of the Secretariat and an outside
consultant. The Team did its job obviously in the presence of the claimant,
that is to say the KOC. However, the inspection was conducted in the absence of
any representative of the Defendant, a fact not really surprising, after all
that it known about the UNCC procedure. More surprisingly, the report9 of the Verification Team had not been
given to Iraq. Therefore, Iraq did not have a possibility even of commenting on
this indirect and secondary evidence on which the Panel relied when finding
that the claims were substantiated.
This shows the extent to which normal and indeed
elementary rules of evidence, and the processing of evidence, are deliberately
ignored or violated in this strange procedure. Just for this reason, we can’t
help suspecting that, whatever, such a panel “recommendation” and the decision
of the Governing Council based on it would be considered null and void as an
award or a judgement under any system of law recognising the concept of due
process. Enforcement would be indisputably denied, for instance, under the New
York Convention of 1958 on the Recognition and Enforcement of Arbitral Awards.10
D. Obscurity of
Decision-making Process
In addition, let’s take a look at the decision making
in the UNCC, a diffused and obscure process. As mentioned in preceding context,
the findings of Panels of Commissioners are not awards or decisions but
“recommendations” which are neither final nor binding in respect of the
parties. The final and binding decisions are made by the Governing Council.
According to Article 40 of the Provisional Rules, the Governing Council “may
review the amounts recommended, increase or reduce them”. There is no indication as to basis on
which such a review will be made, nor who will be heard in the review
procedure. No right for comment, either on the recommendation of the panels or
on a proposal for modifying it, is afforded to Iraq.
Actually this is not the end of the list at all. There
are quite a few other procedural defects within the UNCC system such as the
financial imbalance: Iraq is prevented from using its own funds for its defence
against richly-endowed claimants and the UNCC; the lack of consent and
acquiescence by Iraq11; the
lack of transparency and objectivity in the procedure12; violation of the right to present
counterclaims and to make set-offs13;
etc.
After
having looked into the various flaws argued in preceding section, we can now
easily find that the UNCC system does raise some quite fundamental issues
concerning the international legal order. It raises questions concerning the
type of legal order which the international community wish to have governing
international relations. But of
course, such issues, which arise here, cannot be canvassed in the narrow limits
available here. On a personal level, here the writer would just like to comment
a few words on the matter of procedural justice in international proceedings of
whatever type of legal order.
First of all, the
procedure itself has its essential importance in legal sense. Together with
substantive laws, procedural laws also construct an indispensable branch of any
legal body in the world. Therefore, like substantive laws, it's also a mandate
and obligation to obey and uphold procedural justice in any legal proceedings.
To demonstrate this, a typical example should come to Simpson Case, a
world-known criminal case, in which Simpson was nearly 100% held guilty but finally
he was set free Innocently just due to a little mistake made by an investigator
who forgot to put on a glove to one of his hands when collecting some blood
remains for evidence at the murdering site. In this case, seems it can hardly
satisfy most people's morality to let a real murder escape from the punishment
of the law. Nevertheless, the procedural justice was meanwhile perfectly
upheld, which in some sense is much more valuable and meaningful than to throw
a so-called bad-egg into jail and which at the same time has got to win
people's commitment to the laws and legal system of the nation. Certainly, the
procedural justice shall be also embodied and upheld at international level.
This will become quite apparent and necessary by going over those various flaws
argued above in the UNCC procedure as well as by looking at some international
conventions in the respect, for example, the UNCITRAL Arbitral Rules, 1976.14
Moreover, there are
also a few comments on the rules of procedure: it is a fundamental principle
that defendant has right to be heard. The principle applies in civil, criminal
or administrative proceedings no matter how serious his alleged wrongdoings. We
stand for this principle domestically in each of the legal orders in which we
practice; and we stand for this as a principle in the international community.
It is part of the legal profession to ensure that those who are accused, or
those who are confronted with a claim, have the right to defend themselves.
Violation of this principle, in all
civilized legal orders, vitiates the procedure and leads to the nullity of
the decision rendered. It is well known that, internationally, awards made in
proceedings in which the defendant party has not been given a proper
opportunity to defend its case will not be recognized and enforced.15 Therefore, a puzzle naturally comes up
here to us: why should the findings of the UNCC Panels which so grossly
violated the Defendant State’s right to be heard, be recognized anywhere and
give any effect?
We may get ourselves
better convinced of the problems that exist with regard to the substantive
rules applied by the UNCC by looking at the following points.
Iraq, by accepting the
Security Council Resolution 687 (1991), recognized that it “is liable under international law for
any direct loss, damage, including environmental damage and the depletion of
natural resources, or injury to foreign Governments, nationals and
corporations, as a result of Iraq's unlawful invasion and occupation of Kuwait”.
First of all, it must be emphasized that
the passage speaks of the liability “under international law”; this is a very
important qualification. Thus, what needs to be decided in execution of this
Resolution is the scope of liability provided by international law in case of
an unlawful invasion; it must be decided for which acts liability must be
admitted and what type of damage must be considered. Does international law
provide for a certain type of responsibility for certain types of damage: for
instance war operations. Then the question should be considered whether a
distinction must be made between damage caused by Iraq (for which the latter is
responsible) and other damages, e.g. damage caused by the Allies. Under the
rules as they are actually applied by the UNCC, for instance in the WBC
decision, no matter who has caused any damage in any relationship with the war,
Iraq pays, disregarding even the question whether Allied war operations were
necessary, justified or otherwise.
Another point that
must be stressed in the context of this Resolution and its acceptance by Iraq
is the confirmation of the principle of consent. 16 By requiring Iraq’s acceptance of the
Resolution, the Security Council has recognized that a sovereign State can be
bound only its consent. This implied that any modifications and interpretations
of Resolution 687 and the procedures foreseen there are subject to Iraq’s
consent, unless they are part of international law otherwise binding on Iraq.
This principle has actually been grossly violated. By taking a glance at Article 31 of the Provisional Rules for Claims:
“In considering the claims, commissioners will apply Security Council Resolution 687(1991) and other relevant Security Council Resolutions, the criteria established by the Governing Council for particular categories of claims, and any pertinent Decisions of the Governing Council. In addition, where necessary, Commissioners shall apply other relevant rules of international law.”
we will find the rules of international law which were supposed to be primarily applied here just a supplement to a system of substantive rules and procedural mechanisms created by the Security Council and the UNCC Governing Council which have no basis in international law and have not been accepted by Iraq. These self-made substantive rules, as mentioned above, are then imposed on the Panels which must give effect to them as “applicable law”. Thus, the Security Council and the Governing Council have assumed law-making functions which they do not possess; and the Panels have considered themselves bound to follow these rules without serious investigation into whether they can express international law as it actually exists. Furthermore, such a question may be raised at the same time: is international law overridden here?
To wind up, the UNCC system is fundamentally flawed: it is a system created by a political body without the consent of the State concerned. It determines the responsibility of a sovereign State by reference to rules fixed by this political body in the absence of the debtor State; it applies these rules in a procedure in which the State has no proper standing and is deprived of its natural rights of defense; and it makes decisions in an obscure process where the responsibilities of respective organs are indistinguishably confused. All of these flaws argued in the context together contribute to figuring out such a conclusion of this discussion: the procedural justice has been seriously undermined under the UNCC system. Even so, however, the writer would not like to come up with any opinions about the future and reparations of such a defected regime - it is really another complex issue which needs a lot of further discussions and which cannot be still covered by the scope of this article.
Finally I am
interested in mentioning the enclosing sentence of “Reflections on the UN
Compensation Commission”17, one
of the prominent articles written by Carlos
Alzamora, the Executive Secretary of the UNCC established in 1991:
“…the aim (of the establishment of the UNCC) is not to inflict
punishment, and still less to take revenge, but strictly to render justice
and nothing but justice.”
So the question comes
up again: Does there really exist any justice? This time the answer can be
positive -----Yes, the victor’s justice!
1 This percentage shall not exceed 30% of
the annual value of Iraqi exports of petroleum and its derivatives.
2 Para.16 of the Resolution 687, UN
Doc.S/RES/687(1991)
3 See
David J. Bederman, “The UNCC and Tradition of International Claims Settlement”,
27 N.Y.U.J. INT”L L. & POL. 1 (1994)
4 See
Carlos Alzamora, Executive Secretary of the UNCC, “Reflections on the
UNCC”, Arbitration International
Vol. 9, Number 3 (1993), Page 353
5 The
address was delivered to a meeting of the Euro-Arab forum for Arbitration and
Business Law in Paris on 18 June 1993.
6 See Procedural Rules, Supra note 12;
Security Council Resolution 687, supra note 2; Security council Resolution 692,
supra note 4; and Report of the Secretary-General, supra note 3.
7 Secretary General’s Report, supra note
3, para. 20.
8 On December 18, 1996, the
UNCC’s Governing Council approved the recommendations made a panel of
commissioners and awarded the Kuwait Oil Company (KOC) $ 610, 048, 547 for its
claim against Iraq based on the costs KOC incurred fighting the massive oil
well fires left burning in Kuwait after the country’s liberation. The claim,
was then officially reported by its UNCC claim title as the Well Blowout
Control Claim” (WBC Claim).
9 The report was also compiled
in the absence of Iraq representative. Refer to, Robert C. O’Brien, The Challenge of Verifying Corporate and
Government Claims at the UNCC, Cornell International Law Journal, Vol. 31,
1998, Page, 17
10 See Article 5, Para. 1
11 See Iraq’s Request to the Governing
Council of the UNCC, Geneva, 27 July 1996, Page 32
12 See Iraq’s Request to the Governing
Council of the UNCC, Geneva, 27 July 1996, Page 66
13 See Iraq’s Request to the Governing
Council of the UNCC, Geneva, 27 July 1996, Page 64
14 For instance, Art 15(1)
provides the principle of equality of the parties in international proceedings,
to which Article 43 of the UNCC Provisional Rules for Claims also makes
reference. See also Iraq’s Request to the Governing Council of the UNCC,
Geneva, 27 July 1996, Page 20-21
15 Refer to Article 5, Para. 1, the New
York Convention of 1958 on the Recognition and Enforcement of
Arbitral Awards
16 See Iraq’s Request to the Governing
Council of the UNCC, Geneva, 27 July 1996, Page 32
17 See Arbitration International, Vol. 9 Number
3. 1993, Page 358