The International Court of Justice observed in the Fisheries Jurisdiction Cases that Article 62 ‘may in many respects be considered as a codification of existing customary law’ .
For the doctrine to be fulfilled there needs to be a fundamental change of the circumstances existing when the treaty was formed, and the change must not have been foreseen by the parties . The existence of those circumstances must have ‘constituted an essential basis of the consent of the parties to be bound by the treaty’ and the change of circumstances must have radically transformed ‘the extent of obligations still to be performed under the treaty’.
Despite Maxine Moritz, the Agnostican Prime Minister, suggesting that there has been a ‘fundamental change of science underlying the treaty’ Reverentia would disagree with this on four grounds:
a. The change must have been fundamental
The ICJ has, in previous cases, shown a reluctance to invoke fundamental change of circumstances. The court has feared there would be a risk of States trying to rely on the principle despite there being ‘[no] essential change of circumstances, but [a] change in the State’s policy or attitude towards the treaty’ . For example, in the Free Zones case, the PCIJ did not regard the changes in the case as sufficiently fundamental or affecting ‘the whole body of circumstances’ . The State of Reverentia would submit that this is precisely what has happened in this case. There is nothing to suggest that the discovery of Marthite’s heightened medicinal benefits are fundamental, and certainly cannot be said to be changes in ‘the whole body of circumstances’. The reason for this is that even with the knowledge of Marthite’s ability to cure previously incurable diseases, it does not limit the ability to fulfil the obligations under the Marthite Convention.
b. The change must have been unforeseen
For Agnostica to claim that there had been a fundamental change of circumstances they must prove to the court that such a change was unforeseen . As Marthite was a widely used resource in Agnostica and Reverentia, ‘known to possess mildly restorative properties’ , Reverentia would submit it was foreseeable that global pharmaceutical companies would find out about its medicinal benefits. Agnostica cannot plead ignorance to the fact that a resource with remedial properties has potential to have a broader application on a global scale as a result of scientific advancements.
Agnostica may claim that if they had foreseen the global opportunity then they would have taken advantage of it, thus avoiding the Marthite Convention altogether. They may argue that this is especially true considering their focus on exporting the ‘abundant natural resources’ (i.e. the Marthite) prior to signing the Treaty. However, Reverentia submits that this is a weak argument and should not lead the court to conclude that the change was unforeseen.
The reason Agnostica did not export globally is not because they had not foreseen the demand, but because they simply did not have the ability to do so. Firstly, trade is difficult in Agnostica. The country is landlocked, and therefore has no ports; Reverentia borders Agnostica to the east; and the mountainous Tuklu Range borders Agnostica on all other sides. As a result, trade would be very difficult without the help of Reverentia. Secondly, in 2011, when Agnostica leased out the Marthite operations to Baxter, they proved to be incapable of producing and exporting Marthite on a level similar to the level that the Reverentian Marthite Trust (‘RMT’) had. These two factors combined would have likely led Agnostica to conclude that their best bet at making money from the Marthite would be to export the Marthite to Reverentia who could sell it on their behalf.
c. The effect of the change must be to radically transform the scope of obligations still to be performed under the treaty.
Although Reverentia would agree that there have been some circumstantial changes, there has been no radical transformation to the extent of the obligations to be performed. Although the discovery has led to increased profits for Reverentia, it is the ICJ’s role to ‘enforce contracts or treaties even if they become burdensome’ for the other party. Therefore, the burden felt by Agnostica, in not being able to capitalise on Reverentia’s increased profits, cannot constitute a radical transformation of obligations to still be performed.
d. The doctrine has a limited scope
The court should also consider that the doctrine has a limited scope and the rigorous standards that tribunals have applied to the principle cannot be over-emphasised. This is most notably seen in the Gab’?kovo-Nagymaros Project case where the ICJ concluded that ‘the negative and conditional wording of article 62’ indicates, ‘the plea of fundamental change of circumstances should be applied only in exceptional cases’.
In the Gabcikovo-Nagymaros case Hungary claimed that there had been a fundamental change of circumstances as a result of scientific advancements and knowledge in our understanding of the environment. However, the ICJ held that fundamental change of circumstances could not be claimed as a result of the development of scientific knowledge. This has significant relevance to the present case. Agnostica are trying to claim that there has been a fundamental change of circumstances due to scientific advancements and knowledge in our understanding of medicine. Relying on the Gabcikovo-Nagymaros case the court should reject this argument.
2) Reverentia never committed a material breach of the treaty so cannot terminate the treaty on those grounds
Article 60(3) of the VCLT outlines what constitutes material breach of a bilateral treaty. It states that a material breach consists in a ‘violation of a provision essential to the accomplishment of the object or purpose of the treaty’. The International Court of Justice stated, in the Namibia Opinion, that this rule ‘may in many respects be considered as a codification of existing customary law on the subject’ .
Agnostica may allege that Reverentia’s sale of Marthite outside Reverentia and East Agnostica constitutes a material breach of Article 4 of the Marthite Convention. For the court to declare this alleged violation a material breach it must be found that it is ‘essential to the accomplishment of the object and purpose’ of the Marthite Convention. The object and purpose of the Marthite Convention includes maintaining the relationship of the two nations and ensuring ‘Marthite is without significant commercial value outside its traditional use’ .
a. The Marthite is still being used for its traditional purpose
Reverentia submits that RMT’s sale of the Marthite outside the permitted resale value, under the treaty, does not constitute a material breach as the object and purpose of the treaty can still be fulfilled as required by Article 60(3)(b) of the VCLT.
The sale of Marthite abroad will not constitute a material breach as long as it is ‘without significant commercial value outside its traditional use’. Reverentia submits that the meaning of ‘traditional use’, used within the Marthite Convention, is that Marthite has been traditionally used for medicinal purposes. So despite Reverentia selling Marthite to global pharmaceutical companies, resulting in a significant increase of the commercial value of the Marthite, it is not being used outside its ‘traditional use’ (i.e. a medicinal use).
Even if the court does not see the strength in the above argument, Reverentia submits that the RMT reached the 25% threshold of excess demand contained in the Marthite Convention. This, therefore, permitted them to sell the Marthite to the global pharmaceutical companies without breaching article 4 of the Marthite Convention.
RMT, prior to the discovery of Marthite’s effectiveness in treating a range of previously untreatable disorders, had not met this 25% threshold. The supply of Marthite produced by RMT was met by an equal demand from traditional practitioners. However, following the discovery, RMT received considerable interest from major pharmaceutical companies wishing to purchase the Marthite. In response to this interest, RMT simply increased the supply of Marthite so they could meet the global demand, whilst ensuring traditional practitioners got all the Marthite they desired.
By increasing the supply of Marthite to meet global demand RMT fall within the exception of article 4(d) of the Marthite Convention permitting them to sell outside Reverentia and Agnostica. Reverentia submits that the 25% of Marthite being sold to Reverentia and Agnostica satisfies the demand coming from these two States, as the ‘supply of Marthite is more than adequate to satisfy local demand’. Although there were ‘serious concerns among traditional users that shortages and price increases were inevitable’, there is never any factual shortage of Marthite or price increases for traditional users. Therefore, the additional 75% of Marthite being sold to global pharmaceutical companies far exceeding the 25% threshold in article 4(d).
In fact, the supply of Marthite now being produced, beyond the demand coming from Agnostica and Reverentia, was so large that RMT fell within the exception that enabled them to sell Marthite without restriction. To fall within this exception the Marthite mined must exceed 125% of demand from traditional practitioners. Clearly, if one quarter of Marthite is being sold to traditional practitioners, and they are satisfied by the demand, the additional 75% supply of Marthite being sold globally is exceeding the 125% threshold. As a result, as RMT highlighted, ‘the Treaty imposed no restrictions on what RMT was permitted to do with excess Marthite.
b. The sale of Marthite abroad does not undermine the relationship between the two nations
Despite Maxine Mortiz’s objection to the global sale of Marthite, her views do not represent the views of the nation as a whole. Reverentia submits, ‘the supply of Marthite is more than adequate to satisfy local demand’ , including traditional practitioners, and, therefore, does not infringe on the object and purpose of the treaty. So this could not constitute a material breach.
Although there are short-term concerns of RMT selling Marthite globally, these concerns are felt by both the Reverentia and Agnostica State. Furthermore, the concerns are not based upon fact. Reverentia will be able to continue to match the demand from traditional practitioners, and, until Agnostica can prove otherwise, there has been no material breach as there has been no factual undermining of the relationship of the nations.
Lastly, if Reverentia was, in fact, undermining the relationship through the global sale of Marthite, then it is probable that Reverentia would have experienced protests similar to that following Gohandas Sugdy’s imprisonment and subsequent suicide. Arguments that the people were being denied ‘the fruits of [their] own labour, the product of [their] own lands, and the lifeblood of [their] ancient traditions’ would have been directed towards Reverentia as a result of undermining the relationship and preventing traditional practitioners having easy access to Marthite as they have done for many years.
3) Agnostica does not successfully terminate the Marthite Convention
a. As there is no provision for the termination or suspension of the Marthite Convention, it may only be terminated or suspended by the consent of both parties to the treaty. Consent of both parties never occurs.
Treaties can be terminated or suspended by the consent of both parties in a bilateral treaty where there is no provision allowing for the provision or suspension of the treaty . Although Maxine Moritz contacted Reverentia proposing to terminate the treaty, Reverentia did not consent to any ‘mutually binding settlement’ . There is, after all, no right to denounce a treaty unilaterally. CASE? AUTHORITY?
i. Reverentia’s refusal to consent to the termination or suspension of the treaty is not a sufficient ground to terminate the Marthite Convention, because there are procedural requirements that must be followed, when not all parties consent, under Article 65.
Article 65 to 67 of the Law of Treaties provides the procedural requirements for terminating or withdrawing from a treaty. The judgment of the Gabcikovo-Nagymaros case stated that articles 65 to 67 ‘generally reflect customary international law’. Furthermore, in the Advisory Opinion on the Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt, where the Law of Treaties did not apply, the Court stated:
‘Precisely what periods of time may be involved in the observance of the duties to consult and negotiate, and what periods of notice of termination should be given, are matters which necessarily vary according to the requirements of the particular case. In principle, therefore, it is for the parties in each case to determine the length of those periods by consultation and negotiation in good faith’ (CASE?)
Agnostica did not pursue the procedural requirements of Article 65 of the Law of Treaties and Article 33 of the United Nations Charter (‘UN Charter’), therefore failing to legally terminate the Marthite Convention. Under Article 65(3) of the Law of Treaties, if the party that was alleged to have breached the treaty refuses to consent to terminate a treaty then the parties must look to article 33 of the UN Charter to seek a resolution. Article 33 of the UN Charter says that disputing parties must ‘seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice’.
Article 66 states that if no solution has been reached using the methods prescribed in Article 33 of the UN Charter after twelve months from Reverentia’s object of a settlement, it is then possible to apply to the ICJ for a decision. Although twelve months did pass from the dispute arising before going to the ICJ for a decision, the parties never pursued any of the procedural requirements.
As a result, the lack of compliance with article 65 of the Law of Treaties suggests that Agnostica are still bound by the Marthite Convention, as they did not legally terminate it.
Agnostica breached that convention
1) Introduction of the Marthite Control Act (‘MCA’) and unilateral denouncing of the treaty constitutes a material breach of the Marthite Convention
For there to be a material breach, in accordance with Article 60 of the Law of Treaties outlined above, Agnostica must have ‘violated a provision essential to the accomplishment to the object and purpose of the treaty’. Agnostica breached the object and purpose of the treaty, through the passage of the MCA, in that it failed to ‘recognise the significance of the mineral Marthite to the traditions of medical of Reverentians’ . The MCA, banning the sale or transfer of Marthite into Reverentia , is a clear violation of Article 6 of the Marthite Convention, which provides that there should be no ‘custom duties or other barriers to the free movement of Marthite from Agnostica into Reverentia’. As a result, this entitles Reverentia to ‘invoke breach as a ground for terminating the treaty or suspending its operation in whole or in part’, if it wishes to do so.
Furthermore, Agnostica has breached the Marthite Convention by purporting to terminate it without a right to do so. Without a valid ground for termination of the treaty, as required under article 42 of the Law of Treaties, Agnostica cannot legally withdraw from the Marthite Convention. Their unilateral denouncing of the Convention therefore amounts to a material breach.
2) Agnostica has not performed its obligations in good faith
Parties to a treaty must perform obligations and duties under a treaty in good faith and this forms part of customary international law . The VCLT 1966 commentaries also highlighted that the pacta sunt servanda principle is a ‘fundamental principle’. The court should recognise that Agnostica’s blatant illegal termination of the treaty, and subsequent enactment of the MCA, demonstrates they are not performing their obligations under the Marthite Convention in good faith. If the Court finds that Agnostica has not performed its obligations in good faith then the treaty can be terminated, denunciated or withdrawn, as stated under article 42 of the Law of Treaties.
WHY DIDN’T THEY ACT IN GOOD FAITH
3) Agnostica’s breach of the Marthite Convention makes it voidable
As a result of Agnostica’s breach the Marthite Convention is voidable. If Reverentia resultantly wishes to terminate the treaty they may do so and Agnostica will be under an obligation to make full reparation, both material and moral, for the injury.