NATIONAL SOVEREIGNTY AND THE WORLD COURT:
The Case of the Anglo-Iranian Oil Dispute

By Majid Tehranian
University of Hawaii at Manoa
Toda Institute for Global Peace and Policy Research
Conference on the "Fifty Years of the International Court of Justice"
University of Denver, April 18-19, 1997

National sovereignty in international law is a double-edged principle. It can be employed to defend the rights of the weak or strengthen the privileges of the strong. The Anglo-Iranian oil dispute of 1951-53 poignantly demonstrates the point. So have a number of other cases before the World Court. As a semi-colonial country struggling to assert its rights of sovereignty over its natural resources, in 1951, Iran nationalized its British-owned oil industry. When on behalf of the Anglo-Iranian Oil Company (AIOC), the British government brought a suit against Iran before the World Court, it invoked national sovereignty as a principle in order to protect the interests of a British company. Iran also invoked national sovereignty in refusing to recognize the jurisdiction of the court in a dispute between a private company and a sovereign state that it viewed should be settled by Iranian courts. The Court ruled in favor of Iran, but the ambiguity of the principle of national sovereignty continues to be a source of conflict in an interdependent world in which the rights of national sovereignty often clash with the global interests in peace, security, human rights, and environment.

Background

For the better part of the last two centuries, Iran has suffered under the conditions of a semi-colonial state struggling to assert its independence vis-a-vis the Great Powers, including Britain, Russia, and the United States. Following World War II, during which Iran's neutrality was violated by joint American-British-Soviet occupation, a nationalist movement set out to assert the country's independence. In return for the promise of an oil concession, the Iranian government managed to seduce the Soviet to withdraw their troops from its northern provinces where they supported two Soviet-style republics in Azarbaijan and Kurdistan. Following the Soviet withdrawal, however, a nationalist movement turned down a bill in the Majlis to offer the Soviet Union its promised oil concession. The same movement, then, went on to nationalize oil resources throughout the country, including AIOC which had been operating in the South for more about fifty years.

Prior to the nationalization, prolonged negotiations between Iran and AIOC had led to a Supplemental Agreement, signed on July 17, 1949 between N. A. Gass of AIOC and Abbasaquli Gulsha¢iyan, the Iranian Minister of Finance. When submitted to the Majlis for ratification, this Agreement ran into strong political opposition from a minority of nationalist deputies known as the National Front Group. Iranian objections centered on three fundamental issues. First was the political circumstances under which the Angle-Iranian Oil Agreement of 1933 and the Supplemental Agreement of 1949 had been reached. Both circumstances pointed to undue British political pressures. The Minister in charge of signing the former agreement, Hassan, Taqizadeh, suggested years later that "I must confess that I had no part whatsoever in this matter, except that my signature is appended to that instrument and whether it is my signature or someone else¢s it would not have made an iota of difference in what actually happened." (Ramazani, 1975:184). Second, the duration of the original 1901 D¢Arcy Concession had been unduly extended to 1993. Third and most significantly, the amount of royalties and taxes paid by AIOC fell considerably below the fifty-fifty division of profits practiced by the American companies in Venezuela and Middle Eastern producing countries. Since these payments were in the form of income taxes, the American companies could write them off against their income tax liability to the U.S. government.

In the face of mounting opposition, the government of General Ali Razamara had to withdraw the Supplemental Agreement while the new Majlis set up an Oil Commission, headed by Dr. Mohammad Mosaddeq, to review the Iranian options. The idea of nationalization had been, however, already planted by the National Front deputies in the previous session of the Majlis. Given the British insensitivity to the mounting nationalistic demands, the Iranian government's ineptness in its negotiations with the British, and nationalist hopes for American support in the struggle against the British, the idea soon assumed the proportions of an irresistible national movement. Following the assassination of Prime Minister Razamara by Khalil Tahmasibi, a Fada_iyan Islam follower, the idea also assumed further inviolability. the principle of nationalization was thus approved by both Majlis and the Senate in March 1951. A nine-article implementing law was unanimously approved later in April by both houses. As the foremost proponent of nationalization, Dr. Mosaddeq was then recommended to the Shah for appointment as Prime Minister.

Iran¢s foreign policy for the next two and a half years of Dr. Mosaddeq¢s premiership was caught between the Cold War and a volatile domestic situation, dominated by the ultimately unsuccessful nationalization efforts and the power struggles of the nationalist, communist, and monarchical forces. The nationalist forces led by Dr. Mosaddeq and Ayatollah Abol-Qassem Kashani represented a second stratum of the Iranian elite-- a National Front alliance of the Bazaar, the Ulama, and the liberal intelligentsia. The generally presented a challenge to the authority of the first stratum of Iranian elite consisting of the monarchy, landlords, and tribal chiefs largely supported by the Western powers. The former group hoped for the realization of Iranian independence through the nationalization of the oil industry, diminished British and Soviet influence, and an enlistment of the United States power, prestige and cooperation in the pursuit of its foreign policy objectives. The communists as represented by the underground but increasingly powerful Tudeh Party were pro-Soviet, willing to cooperate with Mosaddeq in his struggles against the British but critical of his friendly attitude towards the United States. In the face of irresistible popular demands for nationalization, the monarchists found initially little choice but to accept the nationalization law but became increasingly alarmed at Dr. Mosaddeq¢s intransigence and the mounting Communist threat in the country. This group that was well represented in the Army, the bureaucracy, and both houses of the parliament, managed at the end, with the cooperation of the United States, to unseat Dr. Mosaddeq (Cottam, 1964; Roosevelt, 1979). The Iranian power structure was at this time still dominated by an oligarchy of landlords and tribal chiefs; so was the parliament that included also a small minority of merchants, lawyers, teachers, and journalists (Shajii, 1965-66).

The defeat of nationalization was an economic reality before it also became, with the overthrow of Dr. Mosaddeq, a political fact of life. The British, in cooperation with the major American oil companies, had managed to replace Iranian oil with Arab oil while boycotting the nationalized oil from consumer markets. A few feeble attempts by small Italian and Japanese companies to bypass that boycott had been discouraged by the costs of legal suits brought against them by the Anglo-Iranian. Some American independent oil companies, notably Cities Service and Phillips, which tried to market Iranian oil had been effectively dissuaded by offers of special contracts from the American majors (Walden, 1962). Efforts to recruit trained technicians in the Western countries for the operation of Iran¢s nationalized oil installations and contracts for the sale of Iranian petroleum crude and products in the United States (such as the one offered by Lee Factors, Inc., and Consolidated Brokerage of Denver) had been withdrawn under pressures from the U.S. Department of State (Walden, 1962:22-23).

Nevertheless, long-run economic prospects for the success of nationalization were not as bleak as these facts might suggest. Iranian technicians had managed to keep part of the installations in successful operation to satisfy the domestic demand for petroleum products and what foreign demand there was for crude. Foreign technicians could be recruited from "neutral" countries to run as large an operation as the demand for Iranian oil justified. Entry into the consumer markets required a gradual acquisition of integrated facilities from tankers to refineries and distribution outlets. An interceptive campaign similar to that against Iranian entry into the markets had failed thirty years earlier in the face of Soviet resources and resourcefulness (Frankel, 1962: 7-8). In 1951, oil prices had not yet been subject to the erosion which started in the late fifties. With the price discounts of 50% Iranians were offering to importers -- and particularly to the smaller importing countries -- in a period of rapidly rising demand, it should have been possible to integrate forward to contract, or if need be to create, the facilities required. In this connection, for instance, The New York Times reported that _the foreign oil companies that dominate the Japanese petroleum markets are watching the Idemitsu case with grave concern. Oil experts are of the opinion that cheap Iranian petroleum purchases will enable the Idemitsu Company to market gasoline and other products as much as 30 per cent below current price levels (Walden, 1962:40). W. Alton Jones, president of the Cities Service Oil Company, one of the top twelve U.S. oil companies, but not then an overseas operator, had a similar prediction to make in the heat of the crisis after a visit to Iran in the August of 1952:

"If the situation was allowed to drag on --he refused, however, to say how long -- some group of American interest should find it worth their while to import the oil, whatever the risks involved. he would not state whether his own company might be prepared to buy Persian oil, but did emphasize that he would not stand any threats and was not prepared to lose any sleep over the possibility of legal action on the part of the Anglo-Iranian Oil Company." (Lunding, 1952)

Indeed, towards the end of Dr. Mosaddeq's career, the blockade on Iranian oil was beginning to show signs of weakness. On 20 January, 1953, the Miriellar, a tanker for the same Italian oil company, the Societa Unita Petrolifera, Oriente (SUPRO), which had tried unsuccessfully to break the blockade in June, was trying again. On February 14, it docked in Venice, and, although its cargo was immediately impounded, Italian courts ruled later that the Iranian oil did not belong to the AIOC and was legally salable. On March 111, the Miriella began to unload its oil in preparation for a return to Abadan, and Iranian government declared that it would sell oil to SUPOR at one-half the world market price for six months (Lunding, 1954a). Moreover, the shortage of tankers which had kept charter rates high in 1952 was ending with the conclusion of the Korean War. Tanker rates, which constituted the main bottleneck, were dropping to a point where it would be worthwhile for independent oil companies to risk legal action by the AIOC (Lunding, 1953b).

The tragedy of Dr. Mosaddeq lay in that he had appeared perhaps a little too early on the international scene and lasted perhaps a little too briefly to succeed. Later on in the decade, both the United States and the Soviet Union were inclined to be far more tolerant of his type of non-aligned nationalism. President Nasser of Egypt not only got away with the nationalization of the Suez Canal, he went farther than Dr. Mosaddeq in establishing ties with the Soviet bloc. Entry into the international oil markets was also made easier by the declining monopoly position of the international majors and the increasing presence of independent national and private oil companies able and willing to compete with the majors. Iran obviously could not have hoped to recapture her markets immediately and fully, but she would have been able to move in that direction. Nonetheless, she would have still had to pay a heavy price for the privilege of nationalization. Oil exports, although picking up in 1953, had amounted to a total of only 120,000 tons, worth $1.86 million, for the whole period from July 1951 to August 1953, compared with oil exports in 1950 (the last full year before nationalization) of 31.75 million tons, worth more than $400 million, of which about $44 million were paid to the Iranian government (Mikdashi, 1966:155).

Successful nationalization in Iran would have been, however, unacceptable to the major international oil companies for the example that it could set for the other producing countries. Self-preservation dictated solidarity in the face of Dr. Mosaddeq's challenge, but if he had succeeded to break through the blockade, the American majors would have probably accepted his terms lest their competitors would. The last two of the Anglo-American proposals to Dr. Mosaddeq did, in fact, involve the formation of an international consortium of the seven majors for the production and marketing of Iranian oil. The only stumbling block to a solution seemed to be the problem of compensation to the Anglo-Iranian. Ant any rate, Dr. Mosaddeq's government folded up before the laws of economic gravity had a chance to make themselves felt. The realities of power--both domestic and international-- had pushed him into a corner from which he could exercise little flexibility and imagination in his oil policy.

The overthrow of Dr. Mosaddeq in the military coup d' tat of August 19, 1953, opened the door to the possibility of settling the oil dispute on terms acceptable to the majors (Roosevelt, 1979). But there were still some serious obstacles to overcome. The opposition to Mosaddeq had been formed around the person of the Shah, in support of the institution of monarchy and against the Prime Minister¢s increasing powers, and not against nationalization. In fact, Dr. Mosaddeq's trump card was nationalization all along, and he had received nearly unanimous support at every turn in the oil dispute. The fact that the stoppage of oil revenues had brought the government close to a financial collapse did not mean that nationalization had lost its popularity as a symbolic act of defiance against the British. It was true, as an economic survey of mid-1953 reported, that:

"The dollar was selling on the black-market in Tehran for rls. 132 although the official exchange was 32.5. Bank Melli (the national bank) was without money for legitimate transactions. The confidence of the people of Iran in their government and banking system was at a low point. Rial notes had disappeared in such numbers, because hoarding was widespread, that the Bank could not cash government salary checks. Import and export trade was at a standstill, and even government factories were idle part of the time for want of spare parts that had to be purchased abroad. Government employees had not been paid for several weeks in Tehran and for several months in the provinces" (Baldwin, 1967:54).

But the popular desire to keep the British out was so strong that the new government had to pay lip service to the principle of nationalization and to insist on a form of settlement that camouflaged the reality of another old-style concession.

On the other hand, the major American oil companies proved to be reluctant to participate in a settlement. American policy objectives throughout the Anglo-Iranian dispute had been threefold; in order of their probable priority, to prevent a Communist take-over in Iran, to maintain the essential framework of the concessionary system, and to help in a speedy and amicable settlement of the oil dispute. In pursuit of these often contradictory objectives, the United States had assumed the role of an "honest broker" at first, intent on finding a settlement which although it would satisfy the Iranians, would not jeopardize American or British commercial interests. As the dispute dragged on fears of the possibility of a Communist take-over in Iran overshadowed the American desire to support the basis of the United States oil concessions and, for a time, it seemed that the United States Government might abandon the interest of the majors in order to make a deal between Mosaddeq and the independent American oil companies possible on his terms. But British insistence on firmness against Mosaddeq and threats of possible repercussions on Anglo-American relations of an exclusively American deal swung the pendulum and persuaded the State Department to turn to a policy of active intervention against Mosaddeq. This policy shift coincided with the emergence of an active anti-Communist opposition to Mosaddeq under the leadership of General Fazlullah Zahedi, who had also called for an early settlement of the oil dispute. By allying itself with General Zahedi and the Shah, the United States achieved its first two policy objectives of preventing a Communist takeover and securing the basis of the Middle Eastern oil concessions. Following the coup, it was necessary to move as rapidly as possible towards the achievement of the third objective. The new regime could not last very long without the resumption of the oil revenues (Cottam, 1964; Harkness, 1954; Roosevelt, 1979).

A speedy settlement of the oil dispute was therefore considered a political imperative for the United States. Anthony Eden reports that in September of 1953 the British Foreign Office was receiving reports that the State Department was discussing the formation of an all-American company to buy out the AIOC. The American majors apparently were not interested. Moreover, the British were insisting on a resumption of diplomatic relations with Iran as a precondition for any agreement on the oil dispute (Eden, 1960:237, 239). The Iranians were not, however, enthusiastic. After Secretary of State Dulles indicated on November 3 that the United States supported the British point of view on this question, the Iranians yielded. With the arrival of their Charge d'Affaires on December 231, the British returned to the Iranian scene with considerably less power and influence than they had enjoyed before nationalization. A major shift of power had taken place in the intervening years; the United States was now the dominant Great Power in Iran. This had been in part accomplished by the Iranian antipathy of a century and a half to British domination, the ineptitude of the British in understanding and dealing with Iranian nationalism, the reality of a bipolar world in which Iran occupied a strategic position on the periphery of Russia, and a temporary withdrawal by the Soviet Union (Paarlberg, 1978).

Nevertheless, the obstacles to an oil settlement were numerous; 1) the Iranians still insisted on the principle of nationalization, and refused to accept AIOC back, 2) the issue of compensation was still very difficult to negotiate, 3) Iranian oil had been substantially replaced and its reintegration into the market required a major rearrangement of the supply patterns calling for the cooperation of all the majors, and 4) for reasons of their own, the five American majors were reluctant to join in a consortium. Already under prosecution of alleged cartel activities, the American majors were not eager to participate in a consortium which would leave them open to further prosecution. Furthermore, they feared entering into an agreement which may set a precedent for revision of existing oil concessions (Fanning, 1954:297). Last but not least, postwar fears of oil shortage had by then given way to the realization of an increasing excess producing capacity in the industry which the addition of Iranian oil would have only aggravated.

It took some concessions from the U.S. government to persuade the majors to join in. Acting at the direction of the National Security Council, the Department of Justice granted the five U.S. majors immunity from antitrust prosecution resulting from their participation in the Iranian oil consortium (Engler, 1961,:207). To speed the development and marketing of Iranian oil, some favorable American tax provisions were granted to the participating companies to improve the profitability of Iranian oil. To appease the American independents on what seemed to be a government sponsorship of cartel activities by the majors, the latter had to agree to sell, on the same terms they received, a 1 percent share each of the total consortium to such independent American oil companies as might wish to buy in (Meyer, 1955;65). The United States government had assigned a role to the majors in the solution of the Iranian oil problem that was determined in part by the economic realities of the market. As Secretary of State Dulles pointed out, "It was necessary that any companies interested in participating in the marketing of Iranian oil would have...the facilities for taking and marking large quantities of Iranian oil in the international market..."(Walden, 1962:234). Only five overseas majors among American oil companies had this market power. The British in general and AIOC in particular were not too happy in renouncing a part of their holding of Iranian oil to their American competitors, but they had to act soon if they did not want the initiative to be taken away from them. In December of 1953, Sir William Fraser, Chairman of AIOC, extended an invitation to the seven other majors to meet in London with AIOC to discuss possible participation in an international consortium for the exploitation of Iranian oil. From mid-February to the end of March 1954, the companies met in London to discuss the terms they would offer to the Iranian government. Shares in the consortium were divided mainly among the eight majors, while a group of American independents organized in Iricon Agency, Ltd., receive 5% of the total, in the following arrangement (Issawi & Yeganeh, 1962:178):

	British Petroleum Co., Ltd. (formerly AIOC)	40%
	Royal Dutch-Shell Group	14%
	Compagnie Francaise des Petroles	6%
	Gulf Oil Corp	7%
	Socony-Vacuum Oil Co. (presently Mobil)	7%
	Standard Oil Co. of California	7%
	Standard Oil Col. of New Jersey	7%
	Texaco, Inc.	5%
	Richfield Oil Corp	1.250%
	Signal Oil and Gas Co	0.833%
	American Independent Oil Co	0.833%
	Getty Oil Co	0.417%
	San Jacinto Petroleum Corp	0.417%
	Standard Oil Co. of Ohio	0.417%
	The Atlantic Refining Co	0.417%
	Tidewater Oil Co	0.417%

A "Memorandum of Understanding" was drawn up on March 20, 1954, incorporating these terms, and on April 10, a negotiating team representing the Consortium arrived in Tehran. Negotiations dragged on over the issues of operation of the Abadan refinery and the price discount was to be given to the Consortium by the NIOC (Shwadran, 1965:183). By the last week in July, however, substantial agreement had been reached, and on August 31, the agreement was initialed by Howard Page of Jersey Standard and Ali Amini, the Iranian Minister of Finance and chief negotiator. The United States government signified its approval of the agreement by granting Iran another $10 million in aid (Elwell-Sutton, 1955:325).

Despite some opposition in the reconstituted Majlis and over a month of delay in the parliamentary discussions, the agreement passed by a vote of 113 to 5, with 10 abstentions, in the Majlis and 41 to 4, with 4 abstentions, in the Senate. On November 1, Iranian oil began to flow again in commercial quantities to world markets.

Although it recognized nationalization, the Consortium Agreement differed hardly at all in its terms form the concession agreements which were in force in the other Middle East producing countries. It gave the participating oil companies full rights to exclusive use and complete management of the oil industry for essentially the same period of time and on the same financial terms as the former AIOC concessions. Its fundamental features may be summarized as follows:

(1) The management of the Iranian oil industry in the Consortium¢s concession area was entrusted to two operating companies, the first covering exploration and production, the second responsible for the refining operations. Both companies were incorporated in the Netherlands and wholly owned by the Consortium, while the Consortium itself was incorporated as a British concern known as the Iranian Oil Participants, Ltd. Although two of the seven members on the Board of Directors of each of the operating companies were nominated by the National Iranian Oil Company (NIOC), all the activities were to be conducted "on behalf of Iran and NIOC," the agreement made it clear that "Operating Companies shall determine and have full and effective management and control of all their operations"(Walden, 1962:51).

(2) As for compensation to AIOC, which now formally changed its name to the British Petroleum Company, the agreement provided for payment of more than $600 million from its partners in the Consortium as well as about $70 million from Iran as indemnity for certain facilities. The issue of compensation payments for loss of future profits, which had been an important obstacle to an agreement with Dr. Mosaddeq¢s government, was largely settled by these payments as well as by the fact that the British had gained a controlling voice in the Consortium.

(3) The profit-sharing arrangements under the agreement were so designed as to be practically identical with those of the other major concessions elsewhere in the Middle East. The agreement stipulated that each Consortium partner would set up in Tehran a trading company which would receive its share of oil at cost and sell it for export to its parent company at the Persian Gulf posted prices. The profits of these companies were made subject to an income tax of no more than 50% minus a royalty of 12.5% credited against the companies¢ income tax liability. Iran could request to receive its royalty payments in the form of crude oil in order to use it for domestic consumption or to auction it on the open markets as a means of testing the validity of the Persian Gulf posted prices (Middle East Journal, 1954:446). This profit-sharing arrangement substantially amounts to the so-called 50-50 formula, first introduced into the Middle East by Aramco in Saudi Arabia. Since the American companies receive income tax credit for any taxes they pay abroad, they found it convenient to make the offer to the host governments in exchange for political good will. As a British firm, the Anglo-Iranian was not in the same position, but when it did make a similar offer to Iran in February of 1951, it was too late. Thus, the Consortium agreement completed the revision of all major concessions in the Middle East to a 50-50 profit-sharing arrangement.

(4) As for the level of production, an issue of considerable interest to the Iranians in view of the loss of their leading position among the Middle Eastern producing countries, it was agreed that in the first year of the Consortium "would produce for export a minimum of 17.5 million cubic meters of oil (100 million barrels); in the second, 27.5 million cubic meters (173 million barrels); in the third, 35 million cubic meters (220 million barrels); making a three-year total of 80 million cubic meters or 500 million barrels: (Middle East Journal, 1954:446). Following these annual increments, the agreement vaguely stipulated, the Consortium would increase Iranian production to reflect the trend of supply and demand for Middle East crude oil. The rate of growth of production thus became a subsequent source of conflict between the Consortium and Iran.

(5) All non-producing functions (industrial training, health, housing, roads, etc.) were relegated to NIOC. The national oil company was also permitted to operate the Naft-i-Shah filed and the Kernamshah refinery as well as the distribution facilities throughout the country for the purposes of internal marketing of petroleum products. Since AIOC had been a target of considerable Iranian criticism for its performance in the fields of labor and community relations and was also an exposed symbol of British domination in Iran, these arrangements served the purpose of shielding the Consortium from direct nationalist charges. NIOC thus gained considerable first-hand experience in the management of the domestic industry, which it used later in its international activities.

(6) The duration of the agreement was set at 25 years with renewal privileges of 15 years for the Consortium. This gave the Consortium a concession one year longer than the 1933 AIOC concession which was to expire by 1993.

The Role of the World Court

The role that the World Court played in this complex drama is of considerable significance. The Court dealt with the question of its jurisdiction on the basis of the following three issues (Syatauw, 1969, p.69):

1. "Did the Iranian declaration under Art. 36 (2) of the Statute limit the Court's jurisdiction to disputes arising after the ratification of that declaration?

2. Was the U. K., by virtue of the most-favored-nation clause, entitled to invoke treaties concluded by Iran with a third party for the purpose of establishing the Court's jurisdiction?

3. Did the settlement of a dispute between the U. K. and Iran, reached through the mediation of the Council of the League of Nations in 1933, result in an agreement which could be regarded as a treaty or convention within the meaning of this expression as used in the Iranian declaration?"

The Court ruling on these questions may be summarized as follows: First, the Court observed that its jurisdiction depended on the will of the parties. In the case of Iran, the Court had jurisdiction only in respect of a dispute relating to the application of a treaty or convention accepted by Iran. Since Iranian law had expressly covered the treaties accepted after the ratification of the declaration, the Court answered the question of Issue No. 1 in the affirmative.

Second, Britain had argued that the operation of the most-favored-nation clause contained in her treaties with Iran of 1857 and 1903 obliged the Iranian government to treat the Anglo-Iranian Oil Co. in accordance with the principles and practices of international law. The Court rejected this argument because a third-party oil concession, independent and isolated from the basic treaty, could not produce any rights enjoyed by the third party.

Third, Britain argued that the 1933 oil concessionary agreement had a double character: being at the same time a concessionary contract and a treaty between the two states. The Court rejected this argument because it regarded Britain not a party to the contract, the purpose which was to regulate the relations between Iran and the Company.

Conclusion

Under the prevailing Cold War conditions of intense rivalries between the Sino-Soviet and Western blocs, in which Iran was playing a pivotal role, the Court took a courageous stand by ruling out its own jurisdiction in a suit that would have significantly limited the national sovereignty of smaller states in nationalizing foreign companies operating within their borders. However, this ruling leaves the operations of transnational corporations substantially outside of the rule of international law. Disputes between a state and a company have to be largely dealt with in national courts. The recent arbitration rules of the World Trade Organization come close to bringing trade disputes under the discipline of an international legal regime. However, such arbitration is still confined to the WTO member-states and not companies. If interpreted as an effort to bring the TNCs under the rule of international law, the proposal by the Commission on Global Governance (1996) for the establishment of a UN Economic Security Council might remedy the present situation. To extend the rule of international law to global entities that are currently beyond the reach of sovereign states is a challenge that needs to be addressed by international jurists.

REFERENCES

Commission on Global Governance. Our Global Neighborhood. Oxford: Oxford University Press, 1995.

Syatauw, J. J. G. Decisions of the International Court of Justice: A Digest. Leyden: A. W. Sijthoff, 1969.

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