international humanitarian law - united...

INTERNATIONAL HUMANITARIAN LAW

PROFESSOR MÓNICA PINTO

International Organizations as Actors in the International Arena

REQUIRED READINGS (printed format)

Case Law

1. Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion,

I.C.J. Reports 1949, p. 174

2. Admission of a State to the United Nations (Charter, Art. 4), Advisory Opinion,


3. Competence of General Assembly Regarding Admission to the United Nations,

Advisory Opinion, I.C.J. Reports 1950, p. 4

4. Difference Relating to Immunity from Legal Process of a Special Rapporteur of

the Commission on Human Rights, Advisory Opinion, I.C.J. Reports 1999, pp.

84-89, paras. 47-67

5. European Commission and Others v. Yassin Abdullah Kadi (Joined cases C-

584/10 P, 494 C-593/10 P and C-595/10 P), Judgment, European Court of

Justice, 18 July 2013

SUGGESTED READINGS (not reproduced)

6. Amerasinghe, C.F., An Introduction to the Institutional Law of International

Organizations, New York, Cambridge University Press, 2005,pp. 1-6

7. Keohane, Robert, "International Institutions: Can Interdependence Work?",

Foreign Policy 1998, Washington D.C, pp. 82-96

International Organizations as Law Makers


Case Law

8. Prosecutor v. Duško Tadic, ICTY Appeals Chamber, 2 October 1995 (Decision

on the Defence Motion for Interlocutory Appeal on Jurisdiction), pp. 1-5 and 9-

18, paras. 1-12 and paras. 26-48

SUGGESTED READINGS (not reproduced)

9. Klabbers, Jan, An Introduction to International Institutional Law, New York,

Cambridge University Press, 2002, pp. 197-212

International Organizations as Accountable Entities


Legal Documents

10. Statute of the Administrative Tribunal of the International Bank for

Reconstruction and Development, International Development Association and

International Finance Corporation, adopted by the Board of Governors on 30

April 1980 and amended on 31 July 2001 and on 18 June 2009

11. Rules of the World Bank Administrative Tribunal, as adopted by the Tribunal on

September 26, 1980 and amended on 1 January 2002

Case Law

12. The Word Bank Administrative Tribunal, Louis de Merode and others v. The

World Bank, Decision of 5 June 1981, Decision No. 1, paras.16-29

International Court of Justice

Reparation for Injuries Suffered in the Service of the United

Nations

Advisory Opinion



Conditions to Admission of a State to Membership in the

United Nations (Charter, Art. 4)

Advisory Opinion



Competence of the General Assembly for the Admission of a

State to the United Nations

Advisory Opinion



Difference Relating to Immunity from Legal Process of a

Special Rapporteur of the Commission on Human Rights

Advisory Opinion

I.C.J. Reports 1999, pp. 84-89, paras. 47-67

European Court of Justice

European Commission and Others v. Yassin Abdullah Kadi Judgment of 18 July 2013 [Grand Chamber]

Joined cases C-584/10 P, C-593/10 P and C-595/10 P

JUD

GM

ENT

OF

THE

CO

UR

T (G

rand

Cha

mbe

r)

18 Ju

ly 2

013

(*)

(App

eal –

Com

mon

For

eign

and

Sec

urity

Pol

icy

(CFS

P) –

Res

trict

ive

mea

sure

s tak

en a

gain

stpe

rson

s and

ent

ities

ass

ocia

ted

with

Usa

ma

bin

Lade

n, th

e A

l-Qae

da n

etw

ork

and

the

Talib

an –

Reg

ulat

ion

(EC

) No

881/

2002

– F

reez

ing

of fu

nds a

nd e

cono

mic

reso

urce

s of a

per

son

incl

uded

in a

list

dra

wn

up b

y a

body

of t

he U

nite

d N

atio

ns –

Lis

ting

of th

at p

erso

n’s n

ame

in A

nnex

I to

Reg

ulat

ion

(EC

) No

881/

2002

– A

ctio

n fo

r ann

ulm

ent –

Fun

dam

enta

l rig

hts –

Rig

hts o

f the

defe

nce

– Pr

inci

ple

of e

ffec

tive

judi

cial

pro

tect

ion

– Pr

inci

ple

of p

ropo

rtion

ality

– R

ight

tore

spec

t for

pro

perty

– O

blig

atio

n to

stat

e re

ason

s)

In Jo

ined

Cas

es C

584/

10 P

, C59

3/10

P a

nd C

595/

10 P

,

THR

EE A

PPEA

LS u

nder

Arti

cle

56 o

f th

e St

atut

e of

the

Cou

rt of

Jus

tice

of t

he E

urop

ean

Uni

on, b

roug

ht o

n 10

Dec

embe

r 201

0,

Eur

opea

n C

omm

issi

on, r

epre

sent

ed i

nitia

lly b

y P.

Het

sch,

S. B

oela

ert,

E. P

aasi

virta

and

M.

Kon

stan

tinid

is,

and

subs

eque

ntly

by

L.

G

usse

tti,

S.

Boe

laer

t, E.

Pa

asiv

irta

and

M.

Kon

stan

tinid

is, a

ctin

g as

Age

nts,

with

an

addr

ess f

or se

rvic

e in

Lux

embo

urg,

Uni

ted

Kin

gdom

of

Gre

at B

rita

in a

nd N

orth

ern

Irel

and,

rep

rese

nted

ini

tially

by

E.Je

nkin

son

and

subs

eque

ntly

by

S. B

ehza

di-S

penc

er, a

ctin

g as

Age

nts,

and

by J

. Wal

lace

QC

, D.

Bea

rd Q

C, a

nd M

. Woo

d, B

arris

ter,

appe

llant

s,

supp

orte

d by

:

Rep

ublic

of B

ulga

ria,

repr

esen

ted

by B

. Zai

mov

, T. I

vano

v an

d E.

Pet

rano

va, a

ctin

g as

Age

nts,

Ital

ian

Rep

ublic

, re

pres

ente

d by

G.

Palm

ieri,

act

ing

as A

gent

, an

d by

M.

Fior

illi,

avvo

cato

dello

Sta

to, w

ith a

n ad

dres

s for

serv

ice

in L

uxem

bour

g,

Gra

nd D

uchy

of L

uxem

bour

g, re

pres

ente

d by

C. S

chilt

z, a

ctin

g as

Age

nt,

Hun

gary

, rep

rese

nted

by

M. F

ehér

, K. S

zíjjá

rtó a

nd K

. Mol

nár,

actin

g as

Age

nts,

Kin

gdom

of t

he N

ethe

rlan

ds, r

epre

sent

ed b

y C

. Wis

sels

and

M. B

ulte

rman

, act

ing

as A

gent

s,

Slov

ak R

epub

lic, r

epre

sent

ed b

y B

. Ric

ziov

á, a

ctin

g as

Age

nt,

Rep

ublic

of F

inla

nd, r

epre

sent

ed b

y H

. Lep

po, a

ctin

g as

Age

nt,

inte

rven

ers i

n th

e ap

peal

s in

Cas

es C

-584

/10

P an

d C

595/

10 P

,

Cou

ncil

of th

e E

urop

ean

Uni

on, r

epre

sent

ed b

y M

. Bis

hop,

E. F

inne

gan

and

R. S

zost

ak, a

ctin

gas

Age

nts,

appe

llant

,

supp

orte

d by

:

Rep

ublic

of B

ulga

ria,

repr

esen

ted

by B

. Zai

mov

, T. I

vano

v an

d E.

Pet

rano

va, a

ctin

g as

Age

nts,

Cze

ch R

epub

lic,

repr

esen

ted

by K

. N

ajm

anov

á, E

. R

uffe

r, M

. Sm

olek

and

D.

Had

rouš

ek,

actin

g as

Age

nts,

Kin

gdom

of D

enm

ark,

repr

esen

ted

by L

. Vol

ck M

adse

n, a

ctin

g as

Age

nt,

Irel

and,

repr

esen

ted

initi

ally

by

D. O

’Hag

an a

nd su

bseq

uent

ly b

y E.

Cre

edon

, act

ing

as A

gent

s,an

d by

N. T

rave

rs B

L an

d P.

Ben

son,

Sol

icito

r, w

ith a

n ad

dres

s for

serv

ice

in L

uxem

bour

g,

Kin

gdom

of S

pain

, rep

rese

nted

by

M. M

uñoz

Pér

ez a

nd N

. Día

z A

bad,

act

ing

as A

gent

s, w

ithan

add

ress

for s

ervi

ce in

Lux

embo

urg,

Ital

ian

Rep

ublic

, re

pres

ente

d by

G.

Palm

ieri,

act

ing

as A

gent

, an

d by

M.

Fior

illi,

avvo

cato

dello

Sta

to, w

ith a

n ad

dres

s for

serv

ice

in L

uxem

bour

g,

Gra

nd D

uchy

of L

uxem

bour

g, re

pres

ente

d by

C. S

chilt

z, a

ctin

g as

Age

nt,

Hun

gary

, rep

rese

nted

by

M. F

ehér

, K. S

zíjjá

rtó a

nd K

. Mol

nár,

actin

g as

Age

nts,

Kin

gdom

of t

he N

ethe

rlan

ds, r

epre

sent

ed b

y C

. Wis

sels

and

M. B

ulte

rman

, act

ing

as A

gent

s,

Rep

ublic

of

Aus

tria

, re

pres

ente

d by

C.

Pese

ndor

fer,

actin

g as

Age

nt,

with

an

addr

ess

for

serv

ice

in L

uxem

bour

g,

Slov

ak R

epub

lic, r

epre

sent

ed b

y B

. Ric

ziov

á, a

ctin

g as

Age

nt,

Rep

ublic

of F

inla

nd, r

epre

sent

ed b

y H

. Lep

po, a

ctin

g as

Age

nt,

inte

rven

ers i

n th

e ap

peal

in C

ase

C59

3/10

P,

the

othe

r par

ties t

o th

e pr

ocee

ding

s bei

ng:

Yas

sin

Abd

ulla

h K

adi,

repr

esen

ted

by D

. Vau

ghan

QC

, V. L

owe

QC

, J. C

raw

ford

SC

, M.

Lest

er a

nd P

. Eec

khou

t, B

arris

ters

, G. M

artin

, Sol

icito

r, an

d by

C. M

urph

y,

appl

ican

t at f

irst i

nsta

nce,

Fren

ch R

epub

lic,

repr

esen

ted

by E

. B

ellia

rd,

G.

de B

ergu

es,

D.

Col

as,

A.

Ada

m a

nd E

.R

anai

voso

n, a

ctin

g as

Age

nts,

inte

rven

er a

t firs

t ins

tanc

e,

THE

CO

UR

T (G

rand

Cha

mbe

r),

com

pose

d of

V. S

kour

is, P

resi

dent

, K. L

enae

rts (R

appo

rteur

), V

ice

Pres

iden

t, M

. Ile

ši, L

. Bay

Lars

en,

T. v

on D

anw

itz a

nd M

. B

erge

r, Pr

esid

ents

of

Cha

mbe

rs,

U.

Lõhm

us,

E. L

evits

, A

.A

raba

djie

v, C

. Toa

der,

J.-J.

Kas

el, M

. Saf

jan

and

D. Š

váby

, Jud

ges,

Adv

ocat

e G

ener

al: Y

. Bot

,

Reg

istra

r: A

. Im

pelli

zzer

i, A

dmin

istra

tor,

havi

ng re

gard

to th

e w

ritte

n pr

oced

ure

and

furth

er to

the

hear

ing

on 1

6 O

ctob

er 2

012,

afte

r hea

ring

the

Opi

nion

of t

he A

dvoc

ate

Gen

eral

at t

he si

tting

on

19 M

arch

201

3,

494

give

s the

follo

win

g

Judg

men

t

1

B

y th

eir a

ppea

ls, t

he E

urop

ean

Com

mis

sion

, the

Cou

ncil

of th

e Eu

rope

an U

nion

and

the

Uni

ted

Kin

gdom

of

Gre

at B

ritai

n an

d N

orth

ern

Irel

and

seek

to

have

set

asi

de t

he j

udgm

ent

of t

heG

ener

al C

ourt

of t

he E

urop

ean

Uni

on o

f 30

Sep

tem

ber

2010

in

Cas

e T

85/0

9 K

adi

vC

omm

issi

on[2

010]

EC

R I

I51

77 (

‘the

judg

men

t und

er a

ppea

l’), b

y w

hich

that

Cou

rt an

nulle

dC

omm

issi

on R

egul

atio

n (E

C) N

o 11

90/2

008

of 2

8 N

ovem

ber 2

008

amen

ding

for t

he 1

01st

tim

eC

ounc

il R

egul

atio

n (E

C)

No

881/

2002

impo

sing

cer

tain

spe

cific

res

trict

ive

mea

sure

s di

rect

edag

ains

t ce

rtain

per

sons

and

ent

ities

ass

ocia

ted

with

Usa

ma

bin

Lade

n, t

he A

l-Qae

da n

etw

ork

and

the

Talib

an (

OJ

2008

L 3

22, p

. 25;

‘th

e co

ntes

ted

regu

latio

n’),

in s

o fa

r as

that

mea

sure

conc

erns

Mr K

adi.

Leg

al c

onte

xt

The

Cha

rter

of t

he U

nite

d N

atio

ns

2

Und

er A

rticl

e 1(

1) a

nd (

3) o

f th

e C

harte

r of

the

Uni

ted

Nat

ions

, sig

ned

at S

an F

ranc

isco

(Uni

ted

Stat

es o

f Am

eric

a) o

n 26

Jun

e 19

45, t

he p

urpo

ses

of th

e U

nite

d N

atio

ns a

re in

ter a

lia to

‘mai

ntai

n in

tern

atio

nal p

eace

and

sec

urity

’ and

to ‘a

chie

ve in

tern

atio

nal c

oope

ratio

n in

sol

ving

inte

rnat

iona

l pr

oble

ms

of a

n ec

onom

ic,

soci

al,

cultu

ral,

or h

uman

itaria

n ch

arac

ter,

and

inpr

omot

ing

and

enco

urag

ing

resp

ect

for

hum

an r

ight

s an

d fo

r fu

ndam

enta

l fr

eedo

ms

for

all

with

out d

istin

ctio

n as

to ra

ce, s

ex, l

angu

age,

or r

elig

ion’

.

3

U

nder

Arti

cle

24(1

) of t

he C

harte

r of t

he U

nite

d N

atio

ns, t

he U

nite

d N

atio

ns S

ecur

ity C

ounc

il(‘

the

Secu

rity

Cou

ncil’

) is

giv

en p

rimar

y re

spon

sibi

lity

for

the

mai

nten

ance

of

inte

rnat

iona

lpe

ace

and

secu

rity.

Arti

cle

24(2

) the

reof

pro

vide

s th

at, i

n di

scha

rgin

g th

ose

dutie

s, th

e Se

curit

yC

ounc

il is

to a

ct in

acc

orda

nce

with

the

purp

oses

and

prin

cipl

es o

f the

Uni

ted

Nat

ions

.

4

Und

er A

rticl

e 25

of

the

Cha

rter

of th

e U

nite

d N

atio

ns, t

he M

embe

rs o

f th

e U

nite

d N

atio

ns[U

N] a

gree

to a

ccep

t and

car

ry o

ut th

e de

cisi

ons o

f the

Sec

urity

Cou

ncil

in a

ccor

danc

e w

ith th

atC

harte

r.

5

C

hapt

er V

II o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

, hea

ded

‘Act

ion

with

resp

ect t

o th

reat

s to

the

peac

e, b

reac

hes

of t

he p

eace

, and

act

s of

agg

ress

ion’

, def

ines

the

act

ion

to b

e ta

ken

in s

uch

case

s. A

rticl

e 39

of

that

Cha

rter,

whi

ch i

ntro

duce

s C

hapt

er V

II,

prov

ides

tha

t th

e Se

curit

yC

ounc

il is

to d

eter

min

e th

e ex

iste

nce

of a

ny s

uch

thre

at, a

ny s

uch

brea

ch o

r any

suc

h ac

t and

isto

mak

e re

com

men

datio

ns, o

r dec

ide

wha

t mea

sure

s are

to b

e ta

ken,

in a

ccor

danc

e w

ith A

rticl

es41

and

42

of th

e C

harte

r, to

mai

ntai

n or

rest

ore

inte

rnat

iona

l pea

ce a

nd s

ecur

ity. U

nder

Arti

cle

41 o

f th

at C

harte

r, th

e Se

curit

y C

ounc

il m

ay d

ecid

e w

hat m

easu

res,

not i

nvol

ving

the

use

ofar

med

forc

e, a

re to

be

empl

oyed

to g

ive

effe

ct to

its d

ecis

ions

and

it m

ay c

all u

pon

the

Mem

bers

of th

e U

nite

d N

atio

ns to

app

ly su

ch m

easu

res.

6

B

y vi

rtue

of A

rticl

e 48

(2) o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

, the

dec

isio

ns o

f the

Sec

urity

Cou

ncil

for

the

mai

nten

ance

of

inte

rnat

iona

l pe

ace

and

secu

rity

are

to b

e ca

rrie

d ou

t by

the

Mem

bers

of t

he U

nite

d N

atio

ns d

irect

ly a

nd th

roug

h th

eir a

ctio

n in

the

appr

opria

te in

tern

atio

nal

agen

cies

of w

hich

they

are

mem

bers

.

7

A

rticl

e 10

3 of

the

Cha

rter o

f the

Uni

ted

Nat

ions

sta

tes

that

in th

e ev

ent o

f a c

onfli

ct b

etw

een

the

oblig

atio

ns o

f th

e M

embe

rs o

f th

e U

nite

d N

atio

ns u

nder

that

Cha

rter

and

thei

r ob

ligat

ions

unde

r any

oth

er in

tern

atio

nal a

gree

men

t, th

eir o

blig

atio

ns u

nder

that

Cha

rter a

re to

pre

vail.

Act

ions

of t

he S

ecur

ity C

ounc

il ag

ains

t int

erna

tiona

l ter

rori

sm a

nd th

e im

plem

enta

tion

of th

ose

actio

ns b

y th

e Eu

rope

an U

nion

8

Sin

ce th

e la

te 1

990s

, and

eve

n m

ore

sinc

e th

e at

tack

s of

11

Sept

embe

r 20

01 in

the

Uni

ted

Stat

es,

the

Secu

rity

Cou

ncil

has

adop

ted

a nu

mbe

r of

res

olut

ions

und

er C

hapt

er V

II o

f th

eC

harte

r of

the

Uni

ted

Nat

ions

in

orde

r to

com

bat

terr

oris

t th

reat

s to

int

erna

tiona

l pe

ace

and

secu

rity.

Ini

tially

dire

cted

sol

ely

agai

nst

the

Talib

an o

f A

fgha

nist

an,

thos

e re

solu

tions

wer

esu

bseq

uent

ly e

xten

ded

to i

nclu

de U

sam

a bi

n La

den,

Al-Q

aeda

and

per

sons

and

ent

ities

asso

ciat

ed w

ith t

hem

. Th

e re

solu

tions

pro

vide

, in

ter

alia

, fo

r th

e fr

eezi

ng o

f as

sets

of

the

orga

nisa

tions

, en

titie

s an

d pe

rson

s id

entif

ied

by t

he c

omm

ittee

est

ablis

hed

by t

he S

ecur

ityC

ounc

il in

acc

orda

nce

with

Res

olut

ion

1267

(19

99)

of 1

5 O

ctob

er 1

999

(‘th

e Sa

nctio

nsC

omm

ittee

’) o

n a

cons

olid

ated

list

(‘th

e Sa

nctio

ns C

omm

ittee

Con

solid

ated

Lis

t’).

9

In

ord

er to

dea

l with

del

istin

g re

ques

ts m

ade

by o

rgan

isat

ions

, ent

ities

or p

erso

ns n

amed

on

that

list,

Secu

rity

Cou

ncil

Res

olut

ion

1730

(20

06)

of 1

9 D

ecem

ber

2006

pro

vide

d fo

r th

ees

tabl

ishm

ent o

f a ‘f

ocal

poi

nt’ w

ithin

the

Secu

rity

Cou

ncil,

resp

onsi

ble

for e

xam

inat

ion

of su

chre

ques

ts. T

hat f

ocal

poi

nt w

as e

stab

lishe

d in

Mar

ch 2

007.

10

Und

er p

arag

raph

5 o

f Se

curit

y C

ounc

il R

esol

utio

n 17

35 (

2006

) of

22

Dec

embe

r 20

06, w

hen

Stat

es p

ropo

se n

ames

of

orga

nisa

tions

, en

titie

s or

per

sons

to

the

Sanc

tions

Com

mitt

ee f

orin

clus

ion

on th

e C

onso

lidat

ed L

ist,

they

mus

t ‘pr

ovid

e a

stat

emen

t of c

ase;

the

stat

emen

t of c

ase

shou

ld p

rovi

de a

s m

uch

deta

il as

pos

sibl

e on

the

basi

s(es

) for

the

listin

g, in

clud

ing:

(i) s

peci

ficin

form

atio

n su

ppor

ting

a de

term

inat

ion

that

the

indi

vidu

al o

r ent

ity m

eets

the

crite

ria a

bove

; (ii)

the

natu

re o

f th

e in

form

atio

n; a

nd (

iii)

supp

ortin

g in

form

atio

n or

doc

umen

ts t

hat

can

bepr

ovid

ed’.

Und

er p

arag

raph

6 o

f tha

t res

olut

ion,

Sta

tes

are

requ

este

d ‘a

t the

tim

e of

sub

mis

sion

,to

iden

tify

thos

e pa

rts o

f the

sta

tem

ent o

f cas

e w

hich

may

be

publ

icly

rele

ased

for t

he p

urpo

ses

of n

otify

ing

the

liste

d [o

n th

e Sa

nctio

ns C

omm

ittee

Con

solid

ated

Lis

t] in

divi

dual

or e

ntity

, and

thos

e pa

rts w

hich

may

be

rele

ased

on

requ

est t

o in

tere

sted

Sta

tes’

.

11

U

nder

par

agra

ph 1

2 of

Sec

urity

Cou

ncil

Res

olut

ion

1822

(200

8) o

f 30

June

200

8, S

tate

s m

ust,

inte

r al

ia,

‘for

eac

h su

ch p

ropo

sal

[of

nam

es t

o th

e Se

curit

y C

ounc

il fo

r in

clus

ion

on t

heC

onso

lidat

ed L

ist]

iden

tify

thos

e pa

rts o

f th

e st

atem

ent o

f ca

se th

at m

ay b

e pu

blic

ly r

elea

sed,

incl

udin

g fo

r us

e by

the

[San

ctio

ns]

Com

mitt

ee f

or d

evel

opm

ent o

f th

e su

mm

ary

desc

ribed

inpa

ragr

aph

13 b

elow

or f

or th

e pu

rpos

e of

not

ifyin

g or

info

rmin

g th

e lis

ted

indi

vidu

al o

r ent

ity,

and

thos

e pa

rts w

hich

may

be

rele

ased

upo

n re

ques

t to

inte

rest

ed S

tate

s.’ P

arag

raph

13

of th

atre

solu

tion

prov

ides

, firs

t, th

at th

e Sa

nctio

ns C

omm

ittee

, whe

n it

adds

a n

ame

to it

s Con

solid

ated

List

, is

to

mak

e ac

cess

ible

on

its w

ebsi

te ‘

a na

rrat

ive

sum

mar

y of

rea

sons

for

lis

ting’

and

,se

cond

ly, t

hat t

hat c

omm

ittee

is to

mak

e ac

cess

ible

on

the

sam

e si

te, ‘

narr

ativ

e su

mm

arie

s of

reas

ons f

or li

stin

g’ n

ames

on

that

list

bef

ore

the

adop

tion

of R

esol

utio

n 18

22/2

008.

12

A

s re

gard

s de

listin

g re

ques

ts, S

ecur

ity C

ounc

il R

esol

utio

n 19

04 (2

009)

of 1

7 D

ecem

ber 2

009

esta

blis

hed

an ‘

Off

ice

of t

he O

mbu

dspe

rson

’, w

hose

tas

k, u

nder

par

agra

ph 2

0 th

ereo

f, is

to

assi

st t

he S

anct

ions

Com

mitt

ee i

n th

e co

nsid

erat

ion

of s

uch

requ

ests

. U

nder

tha

t sa

me

para

grap

h, th

e pe

rson

app

oint

ed to

be

the

Om

buds

pers

on m

ust b

e an

indi

vidu

al o

f hi

gh m

oral

char

acte

r, im

parti

ality

and

inte

grity

with

hig

h qu

alifi

catio

ns a

nd e

xper

ienc

e in

rel

evan

t fie

lds,

incl

udin

g la

w,

hum

an

right

s, co

unte

rter

roris

m,

and

sanc

tions

. Th

e m

anda

te

of

the

Om

buds

pers

on,

as d

escr

ibed

in

Ann

ex I

I to

tha

t re

solu

tion,

cov

ers

a st

age

of g

athe

ring

info

rmat

ion

from

the

Sta

te c

once

rned

and

a s

tage

of

cons

ulta

tion,

in

the

cour

se o

f w

hich

dial

ogue

may

be

enga

ged

with

the

orga

nisa

tion,

ent

ity o

r pe

rson

req

uest

ing

delis

ting

from

the

Sanc

tions

Com

mitt

ee C

onso

lidat

ed L

ist.

Follo

win

g th

ose

two

stag

es, t

he O

mbu

dspe

rson

mus

tdr

aw u

p a

‘com

preh

ensi

ve r

epor

t’ an

d pr

esen

t it t

o th

e Sa

nctio

ns C

omm

ittee

, whi

ch m

ust t

hen

cons

ider

the

del

istin

g re

ques

t, w

ith t

he a

ssis

tanc

e of

the

Om

buds

pers

on,

and

afte

r do

ing

sode

cide

whe

ther

to a

ppro

ve th

at re

ques

t.

13

Sinc

e th

e M

embe

r St

ates

con

side

red,

in a

num

ber

of C

omm

on P

ositi

ons

adop

ted

unde

r th

e

495

Com

mon

For

eign

and

Sec

urity

Pol

icy,

tha

t Eu

rope

an U

nion

act

ion

was

req

uire

d in

ord

er t

oim

plem

ent t

he S

ecur

ity C

ounc

il R

esol

utio

ns o

n co

mba

ting

inte

rnat

iona

l ter

roris

m, t

he C

ounc

ilad

opte

d a

serie

s of

reg

ulat

ions

pro

vidi

ng f

or,

inte

r al

ia,

the

free

zing

of

the

asse

ts o

for

gani

satio

ns, e

ntiti

es a

nd in

divi

dual

s ide

ntifi

ed b

y th

e Sa

nctio

ns C

omm

ittee

.

14

In

par

alle

l with

the

regi

me

desc

ribed

abo

ve, w

hich

is a

imed

sole

ly a

t org

anis

atio

ns, e

ntiti

es a

ndin

divi

dual

s des

igna

ted

by n

ame

by th

e Sa

nctio

ns C

omm

ittee

as b

eing

ass

ocia

ted

with

Usa

ma

bin

Lade

n, th

e A

l-Qae

da n

etw

ork

and

the

Talib

an, t

here

exi

sts a

wid

er re

gim

e of

sanc

tions

pro

vide

dfo

r by

Sec

urity

Cou

ncil

Res

olut

ion

1373

(20

01)

of 2

8 Se

ptem

ber

2001

, w

hich

was

lik

ewis

ead

opte

d in

res

pons

e to

the

terr

oris

t atta

cks

of 1

1 Se

ptem

ber

2001

. Tha

t res

olut

ion,

whi

ch a

lso

prov

ides

for

ass

et-f

reez

ing

mea

sure

s, di

ffer

s fr

om th

e re

solu

tions

men

tione

d ab

ove

in th

at th

eid

entif

icat

ion

of th

e or

gani

satio

ns, e

ntiti

es o

r per

sons

whi

ch it

is in

tend

ed to

cov

er is

left

entir

ely

to th

e di

scre

tion

of th

e St

ates

.

15

At

Euro

pean

Uni

on l

evel

, Res

olut

ion

1373

(20

01)

was

im

plem

ente

d by

Cou

ncil

Com

mon

Posi

tion

2001

/931

/CFS

P of

27

Dec

embe

r 20

01 o

n th

e ap

plic

atio

n of

spe

cific

mea

sure

s to

com

bat t

erro

rism

(OJ

2001

L 3

44, p

. 93)

and

by

Cou

ncil

Reg

ulat

ion

(EC

) No

2580

/200

1 of

27

Dec

embe

r 20

01 o

n sp

ecifi

c re

stric

tive

mea

sure

s di

rect

ed a

gain

st c

erta

in p

erso

ns a

nd e

ntiti

esw

ith a

vie

w to

com

batin

g te

rror

ism

(O

J 20

01 L

344

, p. 7

0, a

nd c

orrig

endu

m, O

J 20

10 L

52,

p.58

). Th

ose

mea

sure

s co

ntai

n a

list,

whi

ch is

regu

larly

revi

ewed

, of o

rgan

isat

ions

, ent

ities

and

pers

ons s

uspe

cted

of b

eing

invo

lved

in te

rror

ist a

ctiv

ities

.

Bac

kgro

und

to th

e pr

ocee

ding

s

The

cas

e w

hich

gav

e ri

se to

the

Kad

i jud

gmen

t

16

On

17 O

ctob

er 2

001

Mr

Kad

i, id

entif

ied

as b

eing

an

indi

vidu

al a

ssoc

iate

d w

ith U

sam

a bi

nLa

den

and

the

Al-Q

aeda

net

wor

k, w

as li

sted

on

the

Sanc

tions

Com

mitt

ee C

onso

lidat

ed L

ist.

17

Mr

Kad

i’s n

ame

was

sub

sequ

ently

add

ed to

the

list i

n A

nnex

I to

Cou

ncil

Reg

ulat

ion

(EC

)N

o 46

7/20

01 o

f 6

Mar

ch 2

001

proh

ibiti

ng t

he e

xpor

t of

cer

tain

goo

ds a

nd s

ervi

ces

toA

fgha

nist

an, s

treng

then

ing

the

fligh

t ban

and

ext

endi

ng th

e fr

eeze

of f

unds

and

oth

er fi

nanc

ial

reso

urce

s in

resp

ect o

f the

Tal

iban

of A

fgha

nist

an, a

nd re

peal

ing

Reg

ulat

ion

No

337/

2000

(OJ

2001

L 6

7, p

. 1),

by C

omm

issi

on R

egul

atio

n (E

C) N

o 20

62/2

001

of 1

9 O

ctob

er 2

001

amen

ding

,fo

r the

third

tim

e, R

egul

atio

n N

o 46

7/20

01 (O

J 20

01 L

277

, p. 2

5). H

e w

as s

ubse

quen

tly li

sted

in A

nnex

I to

Cou

ncil

Reg

ulat

ion

(EC

) No

881/

2002

of 2

7 M

ay 2

002

impo

sing

cer

tain

spe

cific

rest

rictiv

e m

easu

res

dire

cted

aga

inst

cer

tain

per

sons

and

ent

ities

ass

ocia

ted

with

Usa

ma

bin

Lade

n, th

e A

l-Qae

da n

etw

ork

and

the

Talib

an, a

nd re

peal

ing

Reg

ulat

ion

No

467/

2001

(OJ

2002

L 13

9, p

. 9).

18

On

18 D

ecem

ber

2001

Mr

Kad

i br

ough

t be

fore

the

Gen

eral

Cou

rt an

act

ion

seek

ing

the

annu

lmen

t, in

itial

ly,

of R

egul

atio

ns N

o 46

7/20

01 a

nd N

o 20

62/2

001,

the

n of

Reg

ulat

ion

No

881/

2002

, in

so f

ar a

s th

ose

regu

latio

ns c

once

rned

him

. The

gro

unds

for

ann

ulm

ent w

ere,

resp

ectiv

ely,

inf

ringe

men

t of

the

rig

ht t

o be

hea

rd,

the

right

to

resp

ect

for

prop

erty

and

the

prin

cipl

e of

pro

porti

onal

ity, a

nd a

lso

of th

e rig

ht to

eff

ectiv

e ju

dici

al re

view

.

19

B

y ju

dgm

ent o

f 21

Sept

embe

r 200

5 in

Cas

e T

315/

01 K

adi v

Cou

ncil

and

Com

mis

sion

[200

5]EC

R II

3649

, the

Gen

eral

Cou

rt di

smis

sed

that

act

ion.

In e

ssen

ce, t

he G

ener

al C

ourt

held

that

itfo

llow

ed f

rom

the

prin

cipl

es g

over

ning

the

rel

atio

nshi

p be

twee

n th

e in

tern

atio

nal

lega

l or

der

unde

r th

e U

nite

d N

atio

ns a

nd t

he E

urop

ean

Uni

on l

egal

ord

er t

hat

Reg

ulat

ion

No

881/

2002

,be

ing

desi

gned

to im

plem

ent a

Sec

urity

Cou

ncil

reso

lutio

n le

avin

g no

latit

ude

in th

at r

egar

d,co

uld

not b

e th

e su

bjec

t of j

udic

ial r

evie

w o

f its

inte

rnal

law

fuln

ess

and

thus

enj

oyed

imm

unity

from

juris

dict

ion,

exc

ept a

s re

gard

s its

com

patib

ility

with

rul

es f

allin

g w

ithin

the

ambi

t of

jus

coge

ns,

unde

rsto

od a

s a

body

of

rule

s of

pub

lic i

nter

natio

nal

law

bin

ding

on

all

subj

ects

of

inte

rnat

iona

l law

, inc

ludi

ng th

e bo

dies

of t

he U

N, a

nd fr

om w

hich

no

dero

gatio

n is

pos

sibl

e.

20

Acc

ordi

ngly

, th

e G

ener

al C

ourt,

app

lyin

g th

e st

anda

rd o

f un

iver

sal

prot

ectio

n of

the

fund

amen

tal r

ight

s of

the

hum

an p

erso

n co

vere

d by

jus c

ogen

s, ru

led

out,

in th

e gi

ven

case

, any

infr

inge

men

t of t

he ri

ghts

relie

d on

by

Mr K

adi.

As

rega

rds,

in p

artic

ular

, the

righ

t to

effe

ctiv

eju

dici

al r

evie

w,

the

Gen

eral

Cou

rt st

ated

tha

t it

was

not

for

it

to r

evie

w i

ndire

ctly

whe

ther

Secu

rity

Cou

ncil

Res

olut

ions

are

com

patib

le w

ith s

uch

fund

amen

tal r

ight

s as

are

pro

tect

ed b

yth

e Eu

rope

an U

nion

lega

l ord

er, n

or to

ver

ify th

at th

ere

had

been

no

erro

r of a

sses

smen

t of t

hefa

cts a

nd e

vide

nce

relie

d on

by

the

Secu

rity

Cou

ncil

in su

ppor

t of t

he m

easu

res i

t had

take

n, n

or,

agai

n, t

o re

view

ind

irect

ly t

he a

ppro

pria

tene

ss a

nd p

ropo

rtion

ality

of

thos

e m

easu

res.

The

Gen

eral

Cou

rt ad

ded

that

any

suc

h la

cuna

in th

e ju

dici

al p

rote

ctio

n av

aila

ble

to M

r Kad

i is

not

in it

self

cont

rary

to ju

s cog

ens.

21

B

y its

judg

men

t of 3

Sep

tem

ber 2

008

in J

oine

d C

ases

C40

2/05

P a

nd C

415/

05 P

Kad

i and

Al

Bara

kaat

Int

erna

tiona

l Fou

ndat

ion

v C

ounc

il an

d C

omm

issi

on [

2008

] EC

R I

6351

(‘th

e K

adi

judg

men

t’), t

he C

ourt

set

asid

e th

e ju

dgm

ent

of t

he G

ener

al C

ourt

in C

ase

T31

5/01

Kad

i vC

ounc

il an

d C

omm

issi

on a

nd a

nnul

led

Reg

ulat

ion

No

881/

2002

in

so f

ar a

s it

conc

erne

d M

rK

adi.

22

In

ess

ence

, the

Cou

rt he

ld th

at th

e ob

ligat

ions

impo

sed

by a

n in

tern

atio

nal a

gree

men

t can

not

have

the

effe

ct o

f pre

judi

cing

the

cons

titut

iona

l prin

cipl

es o

f the

EC

Tre

aty,

whi

ch in

clud

e th

epr

inci

ple

that

all

Euro

pean

Uni

on a

cts

mus

t res

pect

fund

amen

tal r

ight

s, th

at re

spec

t con

stitu

ting

a co

nditi

on o

f th

eir

law

fuln

ess

whi

ch i

t is

for

the

Cou

rt to

rev

iew

in

the

fram

ewor

k of

the

com

plet

e sy

stem

of

lega

l re

med

ies

esta

blis

hed

by t

hat

treat

y. T

he C

ourt

held

fur

ther

tha

t,no

twith

stan

ding

the

fac

t th

at u

nder

taki

ngs

give

n in

the

UN

con

text

mus

t be

obs

erve

d w

hen

impl

emen

ting

Secu

rity

Cou

ncil

reso

lutio

ns, i

t doe

s no

t fol

low

from

the

prin

cipl

es g

over

ning

the

inte

rnat

iona

l leg

al o

rder

und

er th

e U

nite

d N

atio

ns th

at a

n ac

t ado

pted

by

the

Euro

pean

Uni

onsu

ch a

s R

egul

atio

n N

o 88

1/20

02 th

ereb

y en

joys

imm

unity

fro

m ju

risdi

ctio

n. T

he C

ourt

adde

dth

at th

ere

is n

o ba

sis f

or su

ch im

mun

ity in

the

EC T

reat

y.

23

In

thos

e ci

rcum

stan

ces t

he C

ourt

held

, in

para

grap

hs 3

26 a

nd 3

27 o

f the

Kad

i jud

gmen

t, th

at th

eC

ourts

of

the

Euro

pean

Uni

on m

ust

ensu

re t

he r

evie

w,

in p

rinci

ple

the

full

revi

ew,

of t

hela

wfu

lnes

s of

all

Euro

pean

Uni

on a

cts

in th

e lig

ht o

f fun

dam

enta

l rig

hts,

incl

udin

g w

here

suc

hac

ts a

re d

esig

ned

to i

mpl

emen

t Se

curit

y C

ounc

il re

solu

tions

, an

d th

at t

he G

ener

al C

ourt’

sre

ason

ing

was

con

sequ

ently

viti

ated

by

an e

rror

of l

aw.

24

Rul

ing

on t

he a

ctio

n br

ough

t by

Mr

Kad

i be

fore

the

Gen

eral

Cou

rt, t

he C

ourt

held

, in

para

grap

hs 3

36 to

341

of t

he K

adi j

udgm

ent,

that

the

effe

ctiv

enes

s of j

udic

ial r

evie

w m

eans

that

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

is b

ound

to c

omm

unic

ate

the

grou

nds f

or th

e co

ntes

ted

listin

g de

cisi

on to

the

pers

on c

once

rned

and

to p

rovi

de th

at p

erso

n w

ith th

e op

portu

nity

to b

ehe

ard

in th

at re

gard

. The

Cou

rt st

ated

that

, as

rega

rds

a de

cisi

on th

at a

per

son’

s na

me

shou

ld b

elis

ted

for t

he fi

rst t

ime,

for r

easo

ns c

onne

cted

with

the

effe

ctiv

enes

s of

the

rest

rictiv

e m

easu

res

at is

sue

and

with

the

obje

ctiv

e of

the

regu

latio

n co

ncer

ned,

it w

as n

eces

sary

that

that

dis

clos

ure

and

that

hea

ring

shou

ld o

ccur

not

prio

r to

the

adop

tion

of th

at d

ecis

ion

but w

hen

that

dec

isio

nw

as a

dopt

ed o

r as s

wift

ly a

s pos

sibl

e th

erea

fter.

25

In p

arag

raph

s 34

5 to

349

of

the

Kad

i jud

gmen

t, th

e C

ourt

adde

d th

at, s

ince

the

Cou

ncil

had

neith

er c

omm

unic

ated

to M

r K

adi t

he e

vide

nce

relie

d on

aga

inst

him

to ju

stify

the

rest

rictiv

em

easu

res

impo

sed

on h

im n

or a

ffor

ded

him

the

right

to b

e in

form

ed o

f th

at e

vide

nce

with

in a

reas

onab

le p

erio

d af

ter

thos

e m

easu

res

wer

e en

acte

d, M

r K

adi

had

not

been

in

a po

sitio

nef

fect

ivel

y to

mak

e kn

own

his

poin

t of v

iew

in th

at re

gard

, with

the

cons

eque

nce

that

the

right

sof

def

ence

and

the

right

to e

ffec

tive

judi

cial

revi

ew h

ad b

een

infr

inge

d. T

he C

ourt

also

stat

ed, i

npa

ragr

aph

350

of th

at ju

dgm

ent,

that

that

infr

inge

men

t had

not

bee

n re

med

ied

befo

re th

e C

ourts

of th

e Eu

rope

an U

nion

, giv

en th

at th

e C

ounc

il ha

d no

t add

uced

bef

ore

them

any

suc

h ev

iden

ce.

In p

arag

raph

s 36

9 to

371

of t

hat j

udgm

ent,

the

Cou

rt co

nclu

ded,

on

the

sam

e gr

ound

s, th

at M

r

496

Kad

i’s fu

ndam

enta

l rig

ht to

resp

ect f

or p

rope

rty h

ad b

een

infr

inge

d.

26

Th

e ef

fect

s of

the

annu

lled

regu

latio

n in

so

far a

s it

conc

erne

d M

r Kad

i wer

e m

aint

aine

d fo

r am

axim

um p

erio

d of

thr

ee m

onth

s in

ord

er t

o al

low

the

Cou

ncil

to r

emed

y th

e in

frin

gem

ents

foun

d.

The

res

pons

e of

the

Eur

opea

n U

nion

ins

titut

ions

to

the

Kad

i ju

dgm

ent

and

the

cont

este

dre

gula

tion

27

On

21 O

ctob

er 2

008

the

Cha

irman

of

the

Sanc

tions

Com

mitt

ee c

omm

unic

ated

the

narr

ativ

esu

mm

ary

of r

easo

ns f

or M

r K

adi’s

lis

ting

on t

hat

com

mitt

ee’s

Con

solid

ated

Lis

t to

Fra

nce’

sPe

rman

ent R

epre

sent

ativ

e to

the

UN

, and

aut

horis

ed it

s tra

nsm

issi

on to

Mr K

adi.

28

Th

at su

mm

ary

of re

ason

s is w

orde

d as

follo

ws:

‘The

ind

ivid

ual

Yas

in A

bdul

lah

Ezze

dine

Qad

i …

sat

isfie

s th

e st

anda

rd f

or l

istin

g by

the

[San

ctio

ns C

omm

ittee

] be

caus

e of

his

act

ions

in

(a)

parti

cipa

ting

in t

he f

inan

cing

, pl

anni

ng,

faci

litat

ing,

pre

parin

g, o

r pe

rpet

ratin

g of

act

s or

act

iviti

es b

y, i

n co

njun

ctio

n w

ith, u

nder

the

nam

e of

, on

beha

lf of

, or

in s

uppo

rt of

; (b)

sup

plyi

ng, s

ellin

g, o

r tra

nsfe

rrin

g ar

ms

and

rela

ted

mat

eria

l to;

(c) r

ecru

iting

for;

or (d

) oth

erw

ise

supp

ortin

g ac

ts o

r act

iviti

es o

f; A

l-Qae

da, U

sam

abi

n La

den

or th

e Ta

liban

, or

any

cell,

aff

iliat

e, s

plin

ter

grou

p or

der

ivat

ive

ther

eof

(see

Uni

ted

Nat

ions

Sec

urity

Cou

ncil

Res

olut

ion

1822

(200

8), p

arag

raph

2).

Mr

Qad

i ha

s ac

know

ledg

ed t

hat

he i

s a

foun

ding

tru

stee

and

dire

cted

the

act

ions

of

the

Muw

afaq

Fou

ndat

ion.

The

Muw

afaq

Fou

ndat

ion

hist

oric

ally

ope

rate

d un

der

the

umbr

ella

of

Mak

htab

Al-K

hida

mat

/Al

Kifa

h (Q

E.M

.12.

01),

an o

rgan

isat

ion

foun

ded

by M

r A

bdul

lah

Azz

am a

nd M

r U

sam

a M

uham

med

Aw

ad b

in L

aden

(Q

I.B.8

.01)

, and

the

pre

dece

ssor

to

Al-

Qae

da (Q

E.A

.4.0

1). F

ollo

win

g th

e di

ssol

utio

n of

Mak

htab

Al-K

hida

mat

/Al K

ifah

in e

arly

Jun

e20

01 a

nd it

s ab

sorp

tion

into

Al-Q

aeda

, a n

umbe

r of

NG

Os

form

erly

ass

ocia

ted

with

Mak

htab

Al-K

hida

mat

/Al K

ifah,

incl

udin

g th

e M

uwaf

aq F

ound

atio

n, a

lso

join

ed w

ith A

lQae

da.

In 1

992,

Mr Q

adi h

ired

Mr S

hafiq

Ben

Moh

amed

Ben

Moh

amed

AlA

yadi

(QI.A

.25.

01) t

o he

adth

e Eu

rope

an o

ffic

es o

f th

e M

uwaf

aq F

ound

atio

n. D

urin

g th

e m

id-1

990s

, M

r A

l-Aya

di a

lso

head

ed t

he M

uwaf

aq F

ound

atio

n br

anch

in

Bos

nia

and

Her

zego

vina

. M

r Q

adi

hire

d M

r A

l-A

yadi

on

the

reco

mm

enda

tion

of k

now

n A

l-Qae

da f

inan

cier

Mr

Wa’

el H

amza

Abd

Al-F

atah

Jula

idan

(QI.J

.79.

02),

who

foug

ht w

ith M

r bin

Lad

en in

Afg

hani

stan

in th

e 19

80s.

At t

he ti

me

ofhi

s app

oint

men

t by

Mr Q

adi a

s the

Muw

afaq

Fou

ndat

ion’

s Eur

opea

n di

rect

or, M

r AlA

yadi

was

oper

atin

g un

der a

gree

men

ts w

ith M

r bin

Lad

en. M

r AlA

yadi

was

one

of t

he p

rinci

pal l

eade

rs o

fth

e Tu

nisi

an I

slam

ic F

ront

, w

ent

to A

fgha

nist

an i

n th

e ea

rly 1

990s

to

rece

ive

para

mili

tary

train

ing,

and

then

wen

t to

Suda

n w

ith o

ther

s to

mee

t Mr b

in L

aden

, with

who

m th

ey c

oncl

uded

a fo

rmal

agr

eem

ent r

egar

ding

the

rece

ptio

n an

d tra

inin

g of

Tun

isia

ns. T

hey

late

r m

et w

ith M

rbi

n La

den

a se

cond

tim

e, s

ecur

ing

an a

gree

men

t fo

r bi

n La

den

colla

bora

tors

in

Bos

nia

and

Her

zego

vina

to re

ceiv

e Tu

nisi

an m

ujah

idin

from

Ital

y.

In 1

995,

the

lead

er o

f Al-G

ama’

at A

l-Isl

amiy

a, M

r Tal

ad F

uad

Kas

sem

, sai

d th

at th

e M

uwaf

aqFo

unda

tion

had

prov

ided

logi

stic

al a

nd fi

nanc

ial s

uppo

rt fo

r a m

ujah

idin

bat

talio

n in

Bos

nia

and

Her

zego

vina

. In

the

mid

-199

0s, t

he M

uwaf

aq F

ound

atio

n w

as in

volv

ed in

pro

vidi

ng f

inan

cial

supp

ort

for

terr

oris

t ac

tiviti

es o

f th

e m

ujah

idin

, as

wel

l as

arm

s tra

ffic

king

fro

m A

lban

ia t

oB

osni

a an

d H

erze

govi

na. S

ome

invo

lvem

ent i

n th

e fin

anci

ng o

f the

se a

ctiv

ities

was

pro

vide

d by

Mr b

in L

aden

.

Mr

Qad

i was

als

o a

maj

or s

hare

hold

er in

the

now

clo

sed

Sara

jevo

-bas

ed D

epos

itna

Ban

ka, i

nw

hich

Mr

Al-A

yadi

als

o he

ld a

pos

ition

and

act

ed a

s no

min

ee f

or M

r Q

adi’s

sha

res.

Plan

ning

sess

ions

for

an

atta

ck a

gain

st a

Uni

ted

Stat

es f

acili

ty in

Sau

di A

rabi

a m

ay h

ave

take

n pl

ace

atth

is b

ank.

Mr

Qad

i fu

rther

ow

ned

seve

ral

firm

s in

Alb

ania

whi

ch f

unne

lled

mon

ey t

o ex

trem

ists

or

empl

oyed

ext

rem

ists

in

posi

tions

whe

re t

hey

cont

rolle

d th

e fir

m’s

fun

ds.

Mr

Bin

Lad

enpr

ovid

ed th

e w

orki

ng c

apita

l for

four

or f

ive

of M

r Qad

i’s c

ompa

nies

in A

lban

ia.’

29

Th

at su

mm

ary

of re

ason

s was

als

o pu

blis

hed

on th

e w

ebsi

te o

f the

San

ctio

ns C

omm

ittee

.

30

O

n 22

Oct

ober

200

8 Fr

ance

’s P

erm

anen

t Rep

rese

ntat

ive

to th

e Eu

rope

an U

nion

tran

smitt

ed th

atsu

mm

ary

of r

easo

ns to

the

Com

mis

sion

, whi

ch s

ent i

t to

Mr

Kad

i on

the

sam

e da

y, in

form

ing

him

that

, for

the

reas

ons

set o

ut in

that

sum

mar

y, it

env

isag

ed m

aint

aini

ng h

is li

stin

g in

Ann

ex I

to R

egul

atio

n N

o 88

1/20

02.

The

Com

mis

sion

gav

e M

r K

adi

until

10

Nov

embe

r 20

08 t

oco

mm

ent

on t

hose

rea

sons

and

to

prov

ide

it w

ith a

ny i

nfor

mat

ion

that

he

mig

ht c

onsi

der

rele

vant

bef

ore

it to

ok it

s fin

al d

ecis

ion.

31

O

n 10

Nov

embe

r 200

8 M

r Kad

i sen

t his

com

men

ts to

the

Com

mis

sion

. He

argu

ed, o

n th

e ba

sis

of d

ocum

ents

cer

tifyi

ng t

hat

the

Swis

s, Tu

rkis

h an

d A

lban

ian

auth

oriti

es h

ad d

ecid

ed n

ot t

opu

rsue

cr

imin

al

inve

stig

atio

ns

agai

nst

him

co

ncer

ning

hi

s al

lege

d su

ppor

t of

te

rror

ist

orga

nisa

tions

or

invo

lvem

ent

in f

inan

cial

crim

e, t

hat,

whe

neve

r he

had

bee

n gi

ven

the

oppo

rtuni

ty to

exp

ress

his

poi

nt o

f vie

w o

n th

e ev

iden

ce s

aid

to in

culp

ate

him

, he

had

been

abl

eto

dem

onst

rate

tha

t th

e al

lega

tions

mad

e ag

ains

t hi

m w

ere

unfo

unde

d, a

nd h

e re

ques

ted

the

prod

uctio

n of

the

evi

denc

e in

sup

port

of t

he c

laim

s an

d as

serti

ons

mad

e in

the

sum

mar

y of

reas

ons

rela

ting

to h

is b

eing

lis

ted

on t

he S

anct

ions

Com

mitt

ee C

onso

lidat

ed L

ist

and

the

rele

vant

doc

umen

ts in

the

Com

mis

sion

’s fi

le, a

nd a

sked

that

he

be a

llow

ed to

sub

mit

com

men

tson

that

evi

denc

e. W

hile

dra

win

g at

tent

ion

to th

e va

guen

ess

and

gene

ralit

y of

a n

umbe

r of

the

alle

gatio

ns c

onta

ined

in th

at s

umm

ary

of r

easo

ns, h

e di

sput

ed, w

ith s

uppo

rting

evi

denc

e, th

atan

y of

the

reas

ons r

elie

d on

aga

inst

him

wer

e w

ell f

ound

ed.

32

O

n 28

Nov

embe

r 200

8 th

e C

omm

issi

on a

dopt

ed th

e co

ntes

ted

regu

latio

n.

33

A

ccor

ding

to re

cita

ls 3

to 6

, 8 a

nd 9

of t

he p

ream

ble

to th

at re

gula

tion:

‘(3)

In o

rder

to c

ompl

y w

ith [t

he K

adi j

udgm

ent],

the

Com

mis

sion

has

com

mun

icat

ed th

e …

[sum

mar

y] o

f rea

sons

pro

vide

d by

the

… S

anct

ions

Com

mitt

ee, t

o M

r Kad

i … a

nd g

iven

[him

] th

e op

portu

nity

to c

omm

ent o

n th

ese

grou

nds

in o

rder

to m

ake

[his

] po

int o

f vi

ewkn

own.

(4)

T

he C

omm

issi

on h

as re

ceiv

ed c

omm

ents

by

Mr K

adi …

and

exa

min

ed th

ese

com

men

ts.

(5)

The

list

of

pers

ons,

grou

ps a

nd e

ntiti

es to

who

m th

e fr

eezi

ng o

f fu

nds

and

econ

omic

reso

urce

s sho

uld

appl

y, d

raw

n up

by

the

… S

anct

ions

Com

mitt

ee, i

nclu

des M

r Kad

i …

(6)

A

fter h

avin

g ca

refu

lly c

onsi

dere

d th

e co

mm

ents

rece

ived

from

Mr K

adi i

n a

lette

r dat

ed10

Nov

embe

r 200

8, a

nd g

iven

the

prev

entiv

e na

ture

of t

he fr

eezi

ng o

f fun

ds a

nd e

cono

mic

reso

urce

s, th

e C

omm

issi

on c

onsi

ders

that

the

listin

g of

Mr K

adi i

s ju

stifi

ed fo

r rea

sons

of

his a

ssoc

iatio

n w

ith th

e A

lQai

da n

etw

ork.

… (8)

In

vie

w o

f thi

s, M

r Kad

i … sh

ould

be

adde

d to

Ann

ex I.

(9)

Thi

s R

egul

atio

n sh

ould

app

ly f

rom

30

May

200

2, g

iven

the

pre

vent

ive

natu

re a

ndob

ject

ives

of

the

free

zing

of

fund

s an

d ec

onom

ic r

esou

rces

und

er R

egul

atio

n …

No

881/

2002

and

the

need

to p

rote

ct le

gitim

ate

inte

rest

s of

the

econ

omic

ope

rato

rs, w

hoha

ve b

een

rely

ing

on th

e le

galit

y of

[the

regu

latio

n an

nulle

d by

the

Kad

i jud

gmen

t].’

34

In a

ccor

danc

e w

ith A

rticl

e 1

of th

e co

ntes

ted

regu

latio

n an

d th

e an

nex

ther

eto,

Ann

ex I

to

497

Reg

ulat

ion

No

881/

2002

was

am

ende

d to

that

eff

ect,

inte

r alia

, by

the

addi

tion

of th

e fo

llow

ing

entry

und

er th

e he

adin

g ‘N

atur

al p

erso

ns’:

‘Yas

in A

bdul

lah

Ezze

dine

Qad

i (al

ias

(a) K

adi,

Shay

kh Y

assi

n A

bdul

lah;

(b) K

ahdi

, Yas

in; (

c)Y

asin

Al-Q

adi).

Dat

e of

birt

h: 2

3.2.

1955

. Pl

ace

of b

irth:

Cai

ro,

Egyp

t. N

atio

nalit

y: S

audi

Ara

bian

. Pas

spor

t num

ber:

B 7

5155

0, (b

) E 9

7617

7 (is

sued

on

6.3.

2004

, exp

iring

on

11.1

.200

9).

Oth

er in

form

atio

n: Je

ddah

, Sau

di A

rabi

a.’

35

The

cont

este

d re

gula

tion,

in

acco

rdan

ce w

ith A

rticl

e 2

ther

eof,

ente

red

into

for

ce o

n 3

Dec

embe

r 200

8 an

d is

app

licab

le fr

om 3

0 M

ay 2

002.

36

By

lette

r of

8 D

ecem

ber

2008

, th

e C

omm

issi

on r

eplie

d to

Mr

Kad

i’s c

omm

ents

of

10N

ovem

ber 2

008.

The

pro

cedu

re b

efor

e th

e G

ener

al C

ourt

and

the

judg

men

t und

er a

ppea

l

37

By

appl

icat

ion

lodg

ed a

t the

Reg

istry

of

the

Gen

eral

Cou

rt on

26

Febr

uary

200

9, M

r K

adi

brou

ght

an a

ctio

n fo

r an

nulm

ent

of t

he c

onte

sted

reg

ulat

ion

in s

o fa

r as

it

conc

erns

him

. In

supp

ort o

f hi

s cl

aim

s, he

put

for

war

d fiv

e pl

eas

in la

w. T

he s

econ

d pl

ea a

llege

d br

each

of

the

right

s of

the

defe

nce

and

of th

e rig

ht to

eff

ectiv

e ju

dici

al p

rote

ctio

n, a

nd th

e fif

th p

lea

alle

ged

adi

spro

porti

onat

e re

stric

tion

on th

e rig

ht to

pro

perty

.

38

In th

e ju

dgm

ent u

nder

app

eal,

the

Gen

eral

Cou

rt, r

elyi

ng o

n pa

ragr

aphs

326

and

327

of

the

Kad

ijud

gmen

t, fir

st h

eld,

in p

arag

raph

126

of

the

judg

men

t und

er a

ppea

l, th

at it

s ta

sk w

as to

ensu

re ‘i

n pr

inci

ple

the

full

revi

ew’ o

f the

law

fuln

ess

of th

e co

ntes

ted

regu

latio

n in

the

light

of

the

fund

amen

tal r

ight

s gua

rant

eed

by th

e Eu

rope

an U

nion

. It a

dded

, in

para

grap

hs 1

27 to

129

of

the

judg

men

t un

der

appe

al,

that

, so

lon

g as

the

re-

exam

inat

ion

proc

edur

e op

erat

ed b

y th

eSa

nctio

ns C

omm

ittee

cle

arly

fails

to o

ffer

gua

rant

ees

of e

ffec

tive

judi

cial

pro

tect

ion,

the

revi

ewca

rrie

d ou

t by

the

Cou

rts o

f th

e Eu

rope

an U

nion

of

Uni

on m

easu

res

to f

reez

e fu

nds

can

bere

gard

ed a

s ef

fect

ive

only

if it

con

cern

s, in

dire

ctly

, the

sub

stan

tive

asse

ssm

ents

of t

he S

anct

ions

Com

mitt

ee it

self

and

the

evid

ence

und

erly

ing

them

.

39

Th

e ar

gum

ent o

f the

Com

mis

sion

and

the

Cou

ncil

conc

erni

ng th

e C

ourt

of J

ustic

e’s

failu

re to

com

men

t, in

the

Kad

i jud

gmen

t, on

the

scop

e an

d in

tens

ity o

f suc

h ju

dici

al re

view

was

hel

d, in

para

grap

h 13

1 of

the

judg

men

t und

er a

ppea

l, to

be

clea

rly w

rong

.

40

In th

at r

egar

d, th

e G

ener

al C

ourt

held

in e

ssen

ce, i

n pa

ragr

aphs

132

to 1

35 o

f th

e ju

dgm

ent

unde

r ap

peal

, tha

t it i

s ob

viou

s, pa

rticu

larly

fro

m p

arag

raph

s 32

6, 3

27, 3

36 a

nd 3

42 to

344

of

the

Kad

iju

dgm

ent,

that

it

was

the

int

entio

n of

the

Cou

rt of

Jus

tice

that

jud

icia

l re

view

, in

prin

cipl

e fu

ll re

view

, sho

uld

exte

nd n

ot o

nly

to th

e ap

pare

nt m

erits

of t

he c

onte

sted

mea

sure

but

also

to th

e ev

iden

ce a

nd in

form

atio

n on

whi

ch th

e fin

ding

s mad

e in

that

mea

sure

are

bas

ed.

41

Th

e G

ener

al C

ourt

furth

er s

tate

d, in

par

agra

phs

138

to 1

46 o

f the

judg

men

t und

er a

ppea

l, th

at,

by r

epea

ting

the

esse

nce

of i

ts r

easo

ning

, in

con

nect

ion

with

the

reg

ime

men

tione

d in

para

grap

hs 1

4 an

d 15

of t

his

judg

men

t, in

its

judg

men

t of 1

2 D

ecem

ber 2

006

in C

ase

T22

8/02

Org

anis

atio

n de

s M

odja

hedi

nes

du p

eupl

e d’

Iran

v C

ounc

il[2

006]

EC

R I

I46

65, t

he C

ourt

ofJu

stic

e ap

prov

ed a

nd e

ndor

sed

the

stan

dard

and

inte

nsity

of

judi

cial

rev

iew

det

erm

ined

in th

atju

dgm

ent,

nam

ely

that

the

Cou

rts o

f the

Eur

opea

n U

nion

mus

t rev

iew

the

asse

ssm

ent m

ade

byth

e in

stitu

tion

conc

erne

d of

the

fact

s an

d ci

rcum

stan

ces

relie

d on

in s

uppo

rt of

the

rest

rictiv

em

easu

res a

t iss

ue a

nd d

eter

min

e w

heth

er th

e in

form

atio

n an

d ev

iden

ce o

n w

hich

that

ass

essm

ent

is b

ased

is a

ccur

ate,

relia

ble

and

cons

iste

nt, a

nd su

ch re

view

can

not b

e ba

rred

on

the

grou

nd th

atth

at in

form

atio

n an

d ev

iden

ce is

secr

et o

r con

fiden

tial.

42

A

fter h

avin

g al

so e

mph

asis

ed, i

n pa

ragr

aphs

148

to 1

51 o

f the

judg

men

t und

er a

ppea

l, th

at th

e

effe

ct o

n M

r K

adi’s

rig

hts

of th

e re

stric

tive

mea

sure

s to

whi

ch h

e ha

d be

en s

ubje

ct f

or a

lmos

tte

n ye

ars

was

mar

ked

and

long

-last

ing,

in p

arag

raph

151

of

that

judg

men

t the

Gen

eral

Cou

rtco

nfirm

ed ‘

the

prin

cipl

e of

a f

ull

and

rigor

ous

judi

cial

rev

iew

of

[fre

ezin

g m

easu

res

such

as

thos

e at

issu

e in

this

inst

ance

]’.

43

Ex

amin

ing,

nex

t, th

e se

cond

and

fifth

ple

as in

law

in s

uppo

rt of

ann

ulm

ent,

the

Gen

eral

Cou

rtfo

und,

in p

arag

raph

s 17

1 to

180

of

the

judg

men

t und

er a

ppea

l, th

at th

ere

was

a b

reac

h of

Mr

Kad

i’s ri

ghts

of d

efen

ce, a

fter o

bser

ving

, in

esse

nce,

that

:

–th

ose

right

s ha

d be

en re

spec

ted

only

in a

pur

ely

form

al a

nd s

uper

ficia

l sen

se, s

ince

the

Com

mis

sion

con

side

red

itsel

f st

rictly

bou

nd b

y th

e fin

ding

s of

the

Sanc

tions

Com

mitt

eean

d at

no

time

envi

sage

d ca

lling

them

into

que

stio

n in

the

light

of M

r Kad

i’s c

omm

ents

or

mak

ing

any

real

eff

ort t

o re

fute

the

excu

lpat

ory

evid

ence

add

uced

by

Mr K

adi;

–M

r Kad

i was

refu

sed

acce

ss b

y th

e C

omm

issi

on to

the

evid

ence

aga

inst

him

des

pite

his

expr

ess r

eque

st, w

hils

t no

bala

nce

was

stru

ck b

etw

een

his i

nter

ests

and

the

need

to p

rote

ctth

e co

nfid

entia

lity

of th

e in

form

atio

n in

que

stio

n, a

nd

–th

e fe

w p

iece

s of

inf

orm

atio

n an

d th

e va

gue

alle

gatio

ns i

n th

e su

mm

ary

of r

easo

nsre

latin

g to

the

lis

ting

of M

r K

adi

on t

he S

anct

ions

Com

mitt

ee C

onso

lidat

ed L

ist,

for

exam

ple,

that

Mr K

adi w

as a

shar

ehol

der i

n a

Bos

nian

ban

k in

whi

ch p

lann

ing

sess

ions

for

an a

ttack

on

a U

nite

d St

ates

faci

lity

in S

audi

Ara

bia

‘may

hav

e’ ta

ken

plac

e, w

ere

clea

rlyin

suff

icie

nt to

ena

ble

Mr

Kad

i to

mou

nt a

n ef

fect

ive

chal

leng

e to

the

alle

gatio

ns a

gain

sthi

m.

44

Th

e G

ener

al C

ourt

also

foun

d, in

par

agra

phs

181

to 1

84 o

f the

judg

men

t und

er a

ppea

l, th

at th

epr

inci

ple

of e

ffec

tive

judi

cial

pro

tect

ion

had

been

infr

inge

d on

the

grou

nds,

first

, tha

t sin

ce M

rK

adi w

as a

ffor

ded

no p

rope

r acc

ess

to th

e in

form

atio

n an

d ev

iden

ce u

sed

agai

nst h

im, M

r Kad

iha

d be

en u

nabl

e to

def

end

his r

ight

s with

rega

rd to

that

info

rmat

ion

and

evid

ence

in sa

tisfa

ctor

yco

nditi

ons

befo

re th

e C

ourts

of

the

Euro

pean

Uni

on a

nd, s

econ

dly,

that

that

infr

inge

men

t had

not

been

rem

edie

d in

the

cou

rse

of t

he p

roce

edin

gs b

efor

e th

e G

ener

al C

ourt,

giv

en t

hat

noev

iden

ce o

f th

at k

ind

or a

ny i

ndic

atio

n of

the

evi

denc

e re

lied

on a

gain

st M

r K

adi

had

been

disc

lose

d to

the

Gen

eral

Cou

rt by

the

inst

itutio

ns c

once

rned

.

45

Th

e G

ener

al C

ourt

furth

er h

eld,

in p

arag

raph

s 19

2 to

194

of

the

judg

men

t und

er a

ppea

l, th

atsi

nce

the

cont

este

d re

gula

tion

had

been

ado

pted

with

out M

r K

adi h

avin

g be

en a

ble

to p

ut h

isca

se to

the

com

pete

nt a

utho

ritie

s, no

twith

stan

ding

the

fact

that

the

mea

sure

s fr

eezi

ng h

is a

sset

s,gi

ven

thei

r gen

eral

app

licat

ion

and

dura

tion,

repr

esen

ted

a si

gnifi

cant

rest

rictio

n on

his

righ

t to

prop

erty

, the

impo

sitio

n of

suc

h m

easu

res

cons

titut

ed a

n un

just

ified

rest

rictio

n of

that

righ

t, an

dco

nseq

uent

ly th

at M

r K

adi’s

cla

im th

at th

e in

frin

gem

ent b

y th

at r

egul

atio

n of

his

fun

dam

enta

lrig

ht t

o re

spec

t fo

r pr

oper

ty e

ntai

led

a br

each

of

the

prin

cipl

e of

pro

porti

onal

ity w

as w

ell

foun

ded.

46

Th

e G

ener

al C

ourt

ther

efor

e an

nulle

d th

e co

ntes

ted

regu

latio

n in

so fa

r as i

t con

cern

s Mr K

adi.

Pro

cedu

re b

efor

e th

e C

ourt

and

form

s of o

rder

soug

ht

47

B

y or

der o

f the

Pre

side

nt o

f the

Cou

rt of

9 F

ebru

ary

2011

, Cas

es C

584/

10 P

, C59

3/10

P a

ndC

595/

10 P

wer

e jo

ined

for t

he p

urpo

ses o

f the

writ

ten

and

oral

pro

cedu

res a

nd th

e ju

dgm

ent.

48

B

y or

der o

f the

Pre

side

nt o

f the

Cou

rt of

23

May

201

1, fi

rst,

the

Cze

ch R

epub

lic, t

he K

ingd

omof

Den

mar

k, Ir

elan

d, th

e K

ingd

om o

f Spa

in a

nd th

e R

epub

lic o

f Aus

tria

wer

e gr

ante

d le

ave

toin

terv

ene

in C

ase

C59

3/10

P in

sup

port

of th

e fo

rms

of o

rder

of t

he C

ounc

il, a

nd, s

econ

dly,

the

Rep

ublic

of

Bul

garia

, th

e Ita

lian

Rep

ublic

, th

e G

rand

Duc

hy o

f Lu

xem

bour

g, H

unga

ry,

the

498

Kin

gdom

of

the

Net

herla

nds,

the

Slov

ak R

epub

lic a

nd t

he R

epub

lic o

f Fi

nlan

d w

ere

gran

ted

leav

e to

inte

rven

e in

Cas

es C

584/

10 P

, C59

3/10

P a

nd C

595/

10 P

in s

uppo

rt of

the

form

s of

orde

r of t

he C

omm

issi

on, t

he C

ounc

il an

d th

e U

nite

d K

ingd

om.

49

In

Cas

e C

584/

10 P

, the

Com

mis

sion

cla

ims t

hat t

he C

ourt

shou

ld:

–se

t asi

de th

e ju

dgm

ent u

nder

app

eal i

n its

ent

irety

;

–di

smis

s M

r K

adi’s

app

licat

ion

for

annu

lmen

t of

the

cont

este

d re

gula

tion

in s

o fa

r as

itco

ncer

ns h

im a

s bei

ng u

nfou

nded

, and

–or

der M

r Kad

i to

pay

the

Com

mis

sion

’s c

osts

in th

is a

ppea

l and

in th

e pr

ocee

ding

s bef

ore

the

Gen

eral

Cou

rt.

50

In

Cas

e C

593/

10 P

, the

Cou

ncil

clai

ms t

hat t

he C

ourt

shou

ld:

–se

t asi

de th

e ju

dgm

ent u

nder

app

eal;

–di

smis

s M

r K

adi’s

app

licat

ion

for

annu

lmen

t of

the

cont

este

d re

gula

tion

in s

o fa

r as

itco

ncer

ns h

im a

s bei

ng u

nfou

nded

, and

–or

der

Mr

Kad

i to

pay

the

cost

s in

the

proc

eedi

ngs

at f

irst i

nsta

nce

and

in th

e pr

esen

tap

peal

.

51

In

Cas

e C

595/

10 P

, the

Uni

ted

Kin

gdom

cla

ims t

hat t

he C

ourt

shou

ld:

–se

t asi

de th

e ju

dgm

ent u

nder

app

eal i

n its

ent

irety

;

–di

smis

s M

r K

adi’s

app

licat

ion

for

annu

lmen

t of

the

cont

este

d re

gula

tion

in s

o fa

r as

itco

ncer

ns h

im, a

nd

–or

der M

r Kad

i to

bear

the

Uni

ted

Kin

gdom

’s c

osts

in th

e pr

ocee

ding

s be

fore

the

Cou

rt of

Just

ice.

52

M

r Kad

i con

tend

s in

all t

hree

cas

es th

at th

e C

ourt

shou

ld:

–di

smis

s the

app

eals

;

–up

hold

the

judg

men

t und

er a

ppea

l and

dec

lare

that

it b

ecam

e im

med

iate

ly e

nfor

ceab

le o

nth

e da

te o

f del

iver

y; a

nd

–or

der

the

appe

llant

s to

pay

Mr

Kad

i’s c

osts

in th

e pr

esen

t app

eal,

incl

udin

g al

l cos

tsin

curr

ed in

resp

ondi

ng to

the

obse

rvat

ions

of i

nter

veni

ng M

embe

r Sta

tes.

53

Th

e Fr

ench

Rep

ublic

, int

erve

ner a

t firs

t ins

tanc

e, c

laim

s tha

t in

all t

hree

cas

es th

e C

ourt

shou

ld:

–se

t asi

de th

e ju

dgm

ent u

nder

app

eal,

and

–gi

ve fi

nal j

udgm

ent a

s to

the

subs

tanc

e, in

acc

orda

nce

with

Arti

cle

61 o

f the

Sta

tute

of t

heC

ourt

of J

ustic

e of

the

Euro

pean

Uni

on, a

nd re

ject

the

form

s of

ord

er s

ough

t by

Mr K

adi

at fi

rst i

nsta

nce.

54

Th

e R

epub

lic o

f Bul

garia

, the

Cze

ch R

epub

lic, t

he K

ingd

om o

f Den

mar

k, Ir

elan

d, th

e K

ingd

omof

Spa

in, t

he It

alia

n R

epub

lic, t

he G

rand

Duc

hy o

f Lux

embo

urg,

Hun

gary

, the

Kin

gdom

of t

heN

ethe

rland

s, th

e R

epub

lic o

f A

ustri

a, th

e Sl

ovak

Rep

ublic

and

the

Rep

ublic

of

Finl

and

clai

mth

at t

he j

udgm

ent

unde

r ap

peal

sho

uld

be s

et a

side

and

tha

t M

r K

adi’s

act

ion

for

annu

lmen

t

shou

ld b

e di

smis

sed.

The

req

uest

to r

eope

n th

e or

al p

roce

dure

55

B

y le

tter o

f 9 A

pril

2013

, Mr K

adi r

eque

sted

that

the

Cou

rt re

open

the

oral

pro

cedu

re, c

laim

ing,

in e

ssen

ce, t

hat s

tate

men

ts m

ade

in p

oint

117

of t

he O

pini

on o

f the

Adv

ocat

e G

ener

al in

rela

tion

to th

e is

sue

of re

spec

t for

the

right

s of

the

defe

nce

are

cont

radi

cted

by

the

findi

ngs

of fa

ct m

ade

by th

e G

ener

al C

ourt,

in p

arag

raph

s 17

1 an

d 17

2 of

the

judg

men

t und

er a

ppea

l, w

hich

hav

e no

tbe

en d

ebat

ed b

y th

e pa

rties

in th

e co

urse

of t

hese

app

eals

.

56

In

that

rega

rd, i

t mus

t be

reca

lled

that

, firs

t, th

e C

ourt

may

, of i

ts o

wn

mot

ion,

on

a pr

opos

alfr

om t

he A

dvoc

ate

Gen

eral

, or

at

the

requ

est

of t

he p

artie

s, or

der

the

reop

enin

g of

the

ora

lpr

oced

ure,

in a

ccor

danc

e w

ith A

rticl

e 83

of t

he R

ules

of P

roce

dure

, if i

t con

side

rs th

at it

lack

ssu

ffic

ient

info

rmat

ion

or th

at th

e ca

se s

houl

d be

dec

ided

on

the

basi

s of

an

argu

men

t whi

ch h

asno

t bee

n de

bate

d be

twee

n th

e pa

rties

(see

judg

men

t of 1

1 A

pril

2013

in C

ase

C53

5/11

Nov

artis

Phar

ma,

par

agra

ph 3

0 an

d ca

se-la

w c

ited)

.

57

Se

cond

ly, p

ursu

ant t

o th

e se

cond

par

agra

ph o

f Arti

cle

252

TFEU

, it i

s the

dut

y of

the

Adv

ocat

eG

ener

al, a

ctin

g w

ith c

ompl

ete

impa

rtial

ity a

nd in

depe

nden

ce, t

o m

ake,

in o

pen

cour

t, re

ason

edsu

bmis

sion

s on

cas

es w

hich

, in

acco

rdan

ce w

ith th

e St

atut

e of

the

Cou

rt of

Jus

tice,

requ

ire th

eA

dvoc

ate

Gen

eral

’s i

nvol

vem

ent.

The

Cou

rt is

not

bou

nd e

ither

by

the

Adv

ocat

e G

ener

al’s

Opi

nion

or b

y th

e re

ason

ing

on w

hich

it is

bas

ed (s

ee ju

dgm

ent o

f 22

Nov

embe

r 201

2 in

Cas

eC

89/1

1 P

E.O

N E

nerg

ie v

Com

mis

sion

, par

agra

ph 6

2 an

d ca

se-la

w c

ited)

.

58

In t

he p

rese

nt c

ase,

the

Cou

rt, h

avin

g he

ard

the

Adv

ocat

e G

ener

al,

cons

ider

s th

at i

t ha

ssu

ffic

ient

inf

orm

atio

n to

adj

udic

ate

and

that

the

cas

es n

eed

not

be d

ecid

ed o

n th

e ba

sis

ofar

gum

ents

whi

ch h

ave

not

been

deb

ated

bet

wee

n th

e pa

rties

. Th

ere

is t

here

fore

no

need

to

acce

de to

the

requ

est t

o re

open

the

oral

pro

cedu

re.

The

app

eals

59

Th

e C

omm

issi

on, t

he C

ounc

il an

d th

e U

nite

d K

ingd

om p

ut fo

rwar

d va

rious

gro

unds

in s

uppo

rtof

thei

r res

pect

ive

appe

als.

Ther

e ar

e, in

ess

ence

, thr

ee. T

he fi

rst g

roun

d, ra

ised

by

the

Cou

ncil,

alle

ges

an e

rror

of l

aw in

that

the

cont

este

d re

gula

tion

was

not

reco

gnis

ed a

s ha

ving

imm

unity

from

juris

dict

ion.

The

sec

ond

grou

nd, r

aise

d by

the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

, al

lege

s er

rors

of

law

with

reg

ard

to t

he l

evel

of

inte

nsity

of

judi

cial

rev

iew

dete

rmin

ed i

n th

e ju

dgm

ent

unde

r ap

peal

. Th

e th

ird g

roun

d, a

gain

rai

sed

by t

hose

thr

eeap

pella

nts,

alle

ges

that

the

Gen

eral

Cou

rt er

red

in it

s ex

amin

atio

n of

Mr K

adi’s

ple

as in

resp

ect

of i

nfrin

gem

ent

of h

is r

ight

s of

def

ence

and

his

rig

ht t

o ef

fect

ive

judi

cial

pro

tect

ion,

and

in

resp

ect o

f inf

ringe

men

t of t

he p

rinci

ple

of p

ropo

rtion

ality

.

The

firs

t gro

und

of a

ppea

l: er

ror

of la

w in

that

the

cont

este

d re

gula

tion

was

not

rec

ogni

sed

asha

ving

imm

unity

from

juri

sdic

tion

Arg

umen

ts o

f the

par

ties

60

In r

elat

ion

to th

e fir

st g

roun

d of

app

eal,

the

Cou

ncil,

sup

porte

d by

Ire

land

, the

Kin

gdom

of

Spai

n an

d th

e Ita

lian

Rep

ublic

, com

plai

ns th

at th

e G

ener

al C

ourt

erre

d in

law

, in

parti

cula

r in

para

grap

h 12

6 of

the

jud

gmen

t un

der

appe

al, b

y re

fusi

ng, p

ursu

ant

to t

he K

adij

udgm

ent,

tore

cogn

ise

that

the

cont

este

d re

gula

tion

had

imm

unity

from

juris

dict

ion.

The

Cou

ncil,

sup

porte

dby

Irel

and,

form

ally

requ

ests

the

Cou

rt to

reco

nsid

er th

e pr

inci

ples

set

out

in th

at re

gard

in th

eK

adi j

udgm

ent.

499

61

R

efer

ring

to p

arag

raph

s 11

4 to

120

of

the

judg

men

t und

er a

ppea

l, th

e C

ounc

il, s

uppo

rted

byIr

elan

d an

d th

e Ita

lian

Rep

ublic

, cl

aim

s th

at t

he r

efus

al t

o gr

ant

the

cont

este

d re

gula

tion

imm

unity

from

juris

dict

ion

is c

ontra

ry to

inte

rnat

iona

l law

. Tha

t ref

usal

who

lly ig

nore

s th

e fa

ctth

at it

is th

e Se

curit

y C

ounc

il w

hich

has

prim

ary

resp

onsi

bilit

y fo

r de

term

inin

g th

e m

easu

res

nece

ssar

y fo

r th

e m

aint

enan

ce o

f in

tern

atio

nal p

eace

and

sec

urity

and

igno

res

the

prim

acy

ofob

ligat

ions

und

er th

e U

nite

d N

atio

ns C

harte

r ov

er th

ose

aris

ing

unde

r an

y ot

her

inte

rnat

iona

lag

reem

ent.

It di

sreg

ards

the

obl

igat

ion

to a

ct i

n go

od f

aith

and

the

dut

y to

pro

vide

mut

ual

assi

stan

ce w

hich

mus

t be

res

pect

ed w

hen

impl

emen

ting

Secu

rity

Cou

ncil

mea

sure

s. Th

atap

proa

ch le

ads

the

Euro

pean

Uni

on’s

inst

itutio

ns to

sub

stitu

te th

emse

lves

for

the

inte

rnat

iona

lbo

dies

whi

ch h

ave

the

rele

vant

pow

ers.

It am

ount

s to

revi

ewin

g th

e le

galit

y of

Sec

urity

Cou

ncil

reso

lutio

ns i

n th

e lig

ht o

f Eu

rope

an U

nion

law

. Th

e un

iform

, un

cond

ition

al a

nd i

mm

edia

teap

plic

atio

n of

tho

se r

esol

utio

ns i

s je

opar

dise

d. S

tate

s w

hich

are

mem

bers

bot

h of

the

Uni

ted

Nat

ions

and

of

the

Euro

pean

Uni

on f

ind

them

selv

es i

n an

im

poss

ible

pos

ition

as

rega

rds

mee

ting

thei

r int

erna

tiona

l obl

igat

ions

.

62

The

refu

sal t

o gr

ant t

he c

onte

sted

reg

ulat

ion

imm

unity

fro

m ju

risdi

ctio

n is

als

o co

ntra

ry to

Euro

pean

Uni

on l

aw.

It w

holly

ign

ores

the

fac

t th

at,

unde

r th

at l

aw,

the

Euro

pean

Uni

onin

stitu

tions

are

bou

nd to

com

ply

with

inte

rnat

iona

l law

and

with

the

deci

sion

s of

org

ans

of th

eU

N,

whe

re t

hose

ins

titut

ions

exe

rcis

e, o

n th

e in

tern

atio

nal

stag

e, p

ower

s th

at h

ave

been

trans

ferr

ed to

them

by

the

Mem

ber S

tate

s. It

disr

egar

ds th

e ne

ed to

stri

ke a

bal

ance

bet

wee

n th

em

aint

enan

ce o

f int

erna

tiona

l pea

ce a

nd s

ecur

ity, o

n th

e on

e ha

nd, a

nd th

e pr

otec

tion

of h

uman

right

s and

fund

amen

tal f

reed

oms,

on th

e ot

her.

63

M

r Kad

i con

tend

s tha

t any

cha

lleng

e to

the

posi

tion

that

a E

urop

ean

Uni

on m

easu

re su

ch a

s the

cont

este

d re

gula

tion

does

not

hav

e im

mun

ity fr

om ju

risdi

ctio

n is

con

trary

to th

e pr

inci

ple

of re

sju

dica

ta, g

iven

that

that

cha

lleng

e co

ncer

ns a

que

stio

n of

law

whi

ch w

as s

ettle

d be

twee

n th

esa

me

parti

es b

y th

e K

adij

udgm

ent

follo

win

g co

nsid

erat

ion

of t

he s

ame

argu

men

ts a

s th

ose

rais

ed in

the

pres

ent c

ase.

64

R

efer

ring

to v

ario

us p

assa

ges

in th

at ju

dgm

ent,

Mr K

adi d

ispu

tes,

in a

ny e

vent

, tha

t the

refu

sal

to g

rant

the

cont

este

d re

gula

tion

imm

unity

from

juris

dict

ion

is c

ontra

ry to

inte

rnat

iona

l law

and

to E

urop

ean

Uni

on la

w.

Fin

ding

s of t

he C

ourt

65

In

par

agra

ph 1

26 o

f the

judg

men

t und

er a

ppea

l, th

e G

ener

al C

ourt

held

that

, in

acco

rdan

ce w

ithpa

ragr

aphs

326

and

327

of

the

Kad

ijud

gmen

t, th

e co

ntes

ted

regu

latio

n co

uld

not b

e af

ford

edan

y im

mun

ity f

rom

jur

isdi

ctio

n on

the

gro

und

that

its

obj

ectiv

e is

to

impl

emen

t re

solu

tions

adop

ted

by th

e Se

curit

y C

ounc

il un

der C

hapt

er V

II o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

.

66

Var

ious

fac

tors

, set

out

in p

arag

raph

s 29

1 to

327

of

the

Kad

ijud

gmen

t, w

ere

adva

nced

insu

ppor

t of

the

posi

tion

stat

ed b

y th

e C

ourt

in th

at ju

dgm

ent,

and

ther

e ha

s be

en n

o ch

ange

inth

ose

fact

ors

whi

ch

coul

d ju

stify

re

cons

ider

atio

n of

th

at

posi

tion,

th

ose

fact

ors

bein

g,es

sent

ially

, bou

nd u

p w

ith th

e co

nstit

utio

nal g

uara

ntee

whi

ch is

exe

rcis

ed, i

n a

Uni

on b

ased

on

the

rule

of l

aw (s

ee C

ase

C55

0/09

E a

nd F

[201

0] E

CR

I62

13, p

arag

raph

44,

and

judg

men

t of

26 J

une

2012

in C

ase

C33

5/09

P P

olan

d v

Com

mis

sion

, par

agra

ph 4

8), b

y ju

dici

al r

evie

w o

fth

e la

wfu

lnes

s of

all

Euro

pean

Uni

on m

easu

res,

incl

udin

g th

ose

whi

ch, a

s in

the

pres

ent c

ase,

impl

emen

t an

inte

rnat

iona

l law

mea

sure

, in

the

light

of t

he fu

ndam

enta

l rig

hts g

uara

ntee

d by

the

Euro

pean

Uni

on.

67

That

Eur

opea

n U

nion

mea

sure

s im

plem

entin

g re

stric

tive

mea

sure

s de

cide

d at

int

erna

tiona

lle

vel

enjo

y no

im

mun

ity f

rom

jur

isdi

ctio

n ha

s m

oreo

ver

been

con

firm

ed i

n Jo

ined

Cas

esC

399/

06 P

and

C40

3/06

P H

assa

n an

d Ay

adi v

Cou

ncil

and

Com

mis

sion

[200

9] E

CR

I11

393,

para

grap

hs 6

9 to

75,

and

, m

ore

rece

ntly

, in

the

jud

gmen

t of

16

Nov

embe

r 20

11 i

n C

ase

C54

8/09

P B

ank

Mel

li Ir

an v

Cou

ncil

[201

1] E

CR

I11

381,

whe

re it

is st

ated

, in

para

grap

h 10

5,

with

refe

renc

e to

the

Kad

i jud

gmen

t, th

at, w

ithou

t the

prim

acy

of a

Sec

urity

Cou

ncil

reso

lutio

nat

the

inte

rnat

iona

l lev

el th

ereb

y be

ing

calle

d in

to q

uest

ion,

the

requ

irem

ent t

hat t

he E

urop

ean

Uni

on in

stitu

tions

shou

ld p

ay d

ue re

gard

to th

e in

stitu

tions

of t

he U

nite

d N

atio

ns m

ust n

ot re

sult

in th

ere

bein

g no

revi

ew o

f the

law

fuln

ess

of s

uch

Euro

pean

Uni

on m

easu

res,

in th

e lig

ht o

f the

fund

amen

tal r

ight

s whi

ch a

re a

n in

tegr

al p

art o

f the

gen

eral

prin

cipl

es o

f Eur

opea

n U

nion

law

.

68

It

follo

ws t

hat t

he ju

dgm

ent u

nder

app

eal,

in p

artic

ular

par

agra

ph 1

26 th

ereo

f, is

not

viti

ated

by

any

erro

r of

law

with

reg

ard

to t

he G

ener

al C

ourt’

s re

fusa

l, in

acc

orda

nce

with

the

Kad

iju

dgm

ent,

to a

ffor

d th

e co

ntes

ted

regu

latio

n im

mun

ity fr

om ju

risdi

ctio

n.

69

Th

e fir

st g

roun

d of

app

eal m

ust t

here

fore

be

reje

cted

.

The

sec

ond

and

thir

d gr

ound

s of

app

eal:

resp

ectiv

ely,

err

ors

of l

aw r

elat

ing

to t

he l

evel

of

inte

nsity

of j

udic

ial r

evie

w d

efin

ed in

the

judg

men

t und

er a

ppea

l and

err

ors

com

mitt

ed b

y th

eG

ener

al C

ourt

in th

e ex

amin

atio

n of

the

plea

s for

ann

ulm

ent b

ased

on

infr

inge

men

t of t

he ri

ghts

of th

e de

fenc

e, th

e ri

ght t

o ef

fect

ive

judi

cial

pro

tect

ion

and

the

prin

cipl

e of

pro

port

iona

lity

70

Th

e se

cond

and

third

gro

unds

of a

ppea

l sho

uld

be e

xam

ined

toge

ther

, sin

ce th

e su

bjec

t of b

oth

is, i

n es

senc

e, a

crit

icis

m o

f err

ors

of la

w v

itiat

ing

the

inte

rpre

tatio

n of

the

right

s of

the

defe

nce

and

the

right

to e

ffec

tive

judi

cial

pro

tect

ion

adop

ted

by th

e G

ener

al C

ourt

in th

e ju

dgm

ent u

nder

appe

al.

Arg

umen

ts o

f the

par

ties

71

In r

elat

ion

to th

e se

cond

and

third

gro

unds

of

appe

al, t

he C

omm

issi

on, t

he C

ounc

il an

d th

eU

nite

d K

ingd

om, s

uppo

rted

by th

e R

epub

lic o

f Bul

garia

, the

Cze

ch R

epub

lic, t

he K

ingd

om o

fD

enm

ark,

Irel

and,

the

Kin

gdom

of S

pain

, the

Fre

nch

Rep

ublic

, the

Ital

ian

Rep

ublic

, the

Gra

ndD

uchy

of L

uxem

bour

g, H

unga

ry, t

he K

ingd

om o

f the

Net

herla

nds,

the

Rep

ublic

of A

ustri

a, th

eSl

ovak

Rep

ublic

and

the

Rep

ublic

of

Finl

and,

cla

im, f

irst,

that

the

jud

gmen

t un

der

appe

al i

svi

tiate

d by

an

erro

r of

law

in th

at, c

ontra

ry to

wha

t is

stat

ed in

par

agra

phs

132

to 1

47 o

f th

atju

dgm

ent,

the

Kad

ijud

gmen

t con

tain

s no

indi

catio

n su

ppor

ting

the

Gen

eral

Cou

rt’s

appr

oach

conc

erni

ng th

e le

vel o

f int

ensi

ty o

f jud

icia

l rev

iew

to b

e ap

plie

d to

a E

urop

ean

Uni

on m

easu

resu

ch a

s the

con

test

ed re

gula

tion.

72

In th

e fir

st p

lace

, the

req

uire

men

t, se

t out

in p

arag

raph

326

of

the

Kad

i jud

gmen

t, th

at th

ere

shou

ld b

e ‘r

evie

w, i

n pr

inci

ple

full

revi

ew’,

of th

e la

wfu

lnes

s of

the

cont

este

d re

gula

tion

shou

ldbe

pla

ced

in th

e in

tern

atio

nal c

onte

xt to

the

adop

tion

of th

at m

easu

re, a

s des

crib

ed, i

n pa

rticu

lar,

in p

arag

raph

s 292

to 2

97 o

f tha

t jud

gmen

t.

73

In

the

seco

nd p

lace

, it i

s cl

aim

ed th

at th

e G

ener

al C

ourt

wro

ngly

hel

d, in

par

agra

ph 1

38 o

f the

judg

men

t un

der

appe

al,

that

the

Cou

rt ha

d, i

n th

e K

adi

judg

men

t, en

dors

ed t

he s

tand

ard

ofre

view

det

erm

ined

by

the

Gen

eral

Cou

rt in

its

cas

e-la

w r

elat

ing

to t

he r

egim

e re

ferr

ed t

o in

para

grap

hs 1

4 an

d 15

of t

his

judg

men

t. Th

e fa

ct is

that

the

Kad

i jud

gmen

t con

tain

s no

refe

renc

eto

that

cas

ela

w o

f th

e G

ener

al C

ourt.

Fur

ther

, tha

t arg

umen

t who

lly ig

nore

s th

e fu

ndam

enta

ldi

ffer

ence

s be

twee

n th

at r

egim

e an

d th

e re

gim

e at

issu

e in

the

pres

ent c

ase,

with

reg

ard

to th

edi

scre

tion

of t

he i

nstit

utio

ns o

f th

e Eu

rope

an U

nion

and

the

ir ac

cess

to

the

info

rmat

ion

and

evid

ence

per

tain

ing

to th

e re

stric

tive

mea

sure

s ado

pted

.

74

Se

cond

, the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

, sup

porte

d by

all

the

Mem

ber

Stat

es in

terv

enin

g in

the

appe

als,

clai

m, o

n th

e ba

sis

of a

rgum

ents

take

n fr

om in

tern

atio

nal l

awan

d Eu

rope

an U

nion

law

bro

adly

com

para

ble

to th

ose

set o

ut in

par

agra

phs

61 a

nd 6

2 of

this

judg

men

t, th

at th

e de

finiti

on o

f the

leve

l of i

nten

sity

of j

udic

ial r

evie

w se

t out

in p

arag

raph

s 123

to 1

47 o

f th

e ju

dgm

ent

unde

r ap

peal

is

wro

ng i

n la

w.

They

add

tha

t th

e ex

cess

ivel

yin

terv

entio

nist

app

roac

h fo

llow

ed b

y th

e G

ener

al C

ourt

in th

e ju

dgm

ent u

nder

app

eal c

anno

t be

reco

ncile

d w

ith s

ettle

d ca

se-la

w in

favo

ur o

f res

trict

ed ju

dici

al re

view

, lim

ited

to m

anife

st e

rror

500

of a

sses

smen

t, w

hen

the

mea

sure

s con

cern

ed a

re th

e ou

tcom

e of

cho

ices

resu

lting

from

com

plex

asse

ssm

ents

and

the

exer

cise

of a

wid

e di

scre

tion

exer

cise

d in

pur

suit

of b

road

ly d

efin

ed g

oals

.

75

Third

, the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

cla

im th

at th

e G

ener

al C

ourt

erre

d, in

par

agra

phs

148

to 1

51 o

f the

judg

men

t und

er a

ppea

l, in

sug

gest

ing

that

the

rest

rictiv

em

easu

res

at i

ssue

in

this

cas

e sh

ould

now

be

rega

rded

as

equi

vale

nt t

o a

crim

inal

pen

alty

.Su

ppor

ted

by th

e C

zech

Rep

ublic

, Ire

land

, the

Fre

nch

Rep

ublic

, the

Ital

ian

Rep

ublic

, Hun

gary

and

the

Rep

ublic

of A

ustri

a, th

ey c

laim

that

the

purp

ose

of th

ose

mea

sure

s, w

hich

are

ess

entia

llypr

ecau

tiona

ry, i

s to

ant

icip

ate

and

prev

ent c

urre

nt o

r fu

ture

thre

ats

to in

tern

atio

nal p

eace

and

secu

rity,

and

that

they

can

be

dist

ingu

ishe

d fr

om c

rimin

al p

enal

ties,

whi

ch a

re im

pose

d, fo

r the

irpa

rt, in

resp

ect o

f pun

isha

ble

past

act

s w

hich

hav

e be

en o

bjec

tivel

y es

tabl

ishe

d. M

oreo

ver,

the

mea

sure

s at i

ssue

are

inte

nded

to b

e te

mpo

rary

and

are

acc

ompa

nied

by

dero

gatio

ns.

76

Fo

urth

, the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

cla

im th

at th

e G

ener

al C

ourt’

sin

terp

reta

tion,

in p

arag

raph

s 171

to 1

88 a

nd 1

92 to

194

of t

he ju

dgm

ent u

nder

app

eal,

rela

ting

toth

e re

quire

men

ts, s

tem

min

g fr

om r

espe

ct f

or M

r K

adi’s

fun

dam

enta

l rig

hts,

appl

icab

le t

o th

elis

ting

of M

r Kad

i’s n

ame

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

follo

win

g th

e K

adi j

udgm

ent

is le

gally

err

oneo

us.

77

Su

ppor

ted

by th

e R

epub

lic o

f Bul

garia

, the

Cze

ch R

epub

lic, I

rela

nd, t

he K

ingd

om o

f Spa

in, t

heFr

ench

Rep

ublic

, the

Ital

ian

Rep

ublic

, Hun

gary

, the

Kin

gdom

of t

he N

ethe

rland

s, th

e R

epub

licof

Aus

tria,

the

Slov

ak R

epub

lic a

nd th

e R

epub

lic o

f Fin

land

, the

y cl

aim

that

the

Gen

eral

Cou

rter

red

in h

oldi

ng t

hat

resp

ect

for

thos

e fu

ndam

enta

l rig

hts

requ

ired

the

disc

losu

re o

f th

ein

form

atio

n an

d ev

iden

ce re

lied

on a

gain

st M

r Kad

i.

78

That

inte

rpre

tatio

n by

the

Gen

eral

Cou

rt w

holly

igno

res

the

poss

ibili

ty, s

tate

d in

par

agra

phs

342

to 3

44 o

f th

e K

adi

judg

men

t, th

at t

he r

ight

of

a pa

rty c

once

rned

to

the

disc

losu

re o

fev

iden

ce r

elie

d on

aga

inst

him

mig

ht b

e re

stric

ted

in o

rder

to

ensu

re t

hat

the

disc

losu

re o

fse

nsiti

ve in

form

atio

n ca

nnot

lead

to th

ird p

artie

s bec

omin

g pr

ivy

to th

at in

form

atio

n an

d th

ereb

yev

adin

g m

easu

res

take

n to

com

bat

inte

rnat

iona

l te

rror

ism

. M

oreo

ver,

the

criti

cism

s m

ade

inpa

ragr

aphs

345

to 3

52 o

f th

at ju

dgm

ent r

elat

ed to

the

failu

re to

com

mun

icat

e to

Mr

Kad

i the

reas

ons

for t

he li

stin

g of

his

nam

e in

Ann

ex I

to R

egul

atio

n N

o 88

1/20

02, a

nd n

ot to

the

failu

reto

dis

clos

e in

form

atio

n an

d ev

iden

ce h

eld

by th

e Sa

nctio

ns C

omm

ittee

.

79

Fu

rther

, the

Gen

eral

Cou

rt’s

appr

oach

doe

s no

t tak

e in

to a

ccou

nt th

e m

any

mat

eria

l obs

tacl

esth

at e

xist

to

the

com

mun

icat

ion

of s

uch

info

rmat

ion

and

evid

ence

to

the

Euro

pean

Uni

onin

stitu

tions

, in

parti

cula

r the

fact

that

the

sour

ce o

f tha

t inf

orm

atio

n an

d ev

iden

ce is

a s

tate

men

tof

cas

e se

nt t

o th

e Sa

nctio

ns C

omm

ittee

by

a M

embe

r of

the

UN

, ge

nera

lly s

ubje

ct t

o a

requ

irem

ent o

f con

fiden

tialit

y du

e to

its s

ensi

tivity

.

80

In

the

pres

ent c

ase,

the

sum

mar

y of

reas

ons

prov

ided

by

the

Sanc

tions

Com

mitt

ee w

hich

was

disc

lose

d to

Mr

Kad

i en

able

d hi

m t

o un

ders

tand

why

his

nam

e w

as l

iste

d in

Ann

ex I

to

Reg

ulat

ion

No

881/

2002

. Far

from

bei

ng li

mite

d to

alle

gatio

ns a

gain

st h

im w

hich

wer

e ge

nera

l,un

subs

tant

iate

d, v

ague

and

lac

king

in

deta

il, t

hat

sum

mar

y, c

ontra

ry t

o w

hat

is s

tate

d in

para

grap

hs 1

57 a

nd 1

77 o

f the

judg

men

t und

er a

ppea

l, se

t out

in d

etai

l the

evi

denc

e w

hich

had

led

the

Sanc

tions

Com

mitt

ee to

take

the

view

that

Mr

Kad

i had

per

sona

l and

dire

ct li

nks

with

the

Al-Q

aeda

net

wor

k an

d w

ith U

sam

a bi

n La

den.

81

Fi

fth, t

he C

omm

issi

on c

onte

nds

that

the

Gen

eral

Cou

rt er

red

by fa

iling

, exc

ept a

s re

gard

s th

efin

ding

of

fact

mad

e in

par

agra

ph 6

7 of

the

jud

gmen

t un

der

appe

al, t

o ta

ke i

nto

acco

unt

the

para

llel p

roce

edin

gs b

roug

ht b

y M

r Kad

i bef

ore

cour

ts in

the

Uni

ted

Stat

es in

ord

er to

dis

mis

sM

r Kad

i’s o

bjec

tions

con

cern

ing

the

alle

ged

lack

of e

ffec

tive

judi

cial

pro

tect

ion

and

the

alle

ged

impo

ssib

ility

of o

btai

ning

acc

ess t

o th

e re

leva

nt in

form

atio

n an

d ev

iden

ce.

82

Si

xth,

the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

cla

im th

at th

e an

alys

is c

arrie

d ou

t

by t

he G

ener

al C

ourt,

in

para

grap

hs 1

27 a

nd 1

28 o

f th

e ju

dgm

ent

unde

r ap

peal

, of

the

alte

ratio

ns m

ade

to t

he r

eex

amin

atio

n pr

oced

ures

est

ablis

hed

at U

nite

d N

atio

ns l

evel

is

defe

ctiv

e.

83

Su

ppor

ted

by a

ll th

e M

embe

r St

ates

inte

rven

ing

in th

e ap

peal

s, th

ey c

laim

that

the

ex o

ffici

ope

riodi

c re

exam

inat

ion

proc

edur

e in

trodu

ced

by R

esol

utio

n 18

22 (2

008)

has

con

tribu

ted

to a

nim

prov

emen

t in

the

prot

ectio

n of

fund

amen

tal r

ight

s, as

dem

onst

rate

d by

the

fact

that

the

nam

esof

a g

reat

man

y pe

rson

s an

d en

titie

s ha

ve b

een

rem

oved

fro

m t

he S

anct

ions

Com

mitt

eeC

onso

lidat

ed L

ist.

As

rega

rds

the

Off

ice

of t

he O

mbu

dspe

rson

est

ablis

hed

by R

esol

utio

n19

04 (2

009)

, its

cre

atio

n re

pres

ents

a d

ecis

ive

new

dep

artu

re in

this

are

a by

ena

blin

g th

e pe

rson

conc

erne

d to

arg

ue h

is c

ase

befo

re a

n in

depe

nden

t and

impa

rtial

aut

horit

y, w

hich

has

the

task

of

subm

ittin

g, i

f ap

prop

riate

, to

the

San

ctio

ns C

omm

ittee

rea

sons

sup

porti

ng t

he r

eque

sted

delis

ting.

84

Secu

rity

Cou

ncil

Res

olut

ion

1989

(20

11)

of 1

7 Ju

ne 2

011

conf

irms

the

desi

re c

onst

antly

toim

prov

e th

e pr

oces

s fo

r de

alin

g w

ith r

eque

sts

for

rem

oval

fro

m t

he S

anct

ions

Com

mitt

eeC

onso

lidat

ed L

ist.

In p

artic

ular

, su

ch a

del

istin

g is

no

long

er d

epen

dent

on

the

unan

imou

sco

nsen

t of

the

mem

bers

of

the

Sanc

tions

Com

mitt

ee. I

t be

com

es e

ffec

tive

60 d

ays

afte

r th

atC

omm

ittee

ha

s co

mpl

eted

co

nsid

erat

ion

of

a re

com

men

datio

n to

th

at

effe

ct

and

of

aco

mpr

ehen

sive

rep

ort b

oth

subm

itted

by

the

Om

buds

pers

on, u

nles

s th

ere

is a

con

sens

us to

the

cont

rary

with

in th

e Sa

nctio

ns C

omm

ittee

or t

here

is a

requ

est t

hat t

he fi

le b

e re

ferr

ed b

ack

to th

eSe

curit

y C

ounc

il. I

n th

e ev

ent t

hat t

he O

mbu

dspe

rson

’s r

ecom

men

datio

n is

not

fol

low

ed, t

heob

ligat

ion

on th

e Sa

nctio

ns C

omm

ittee

to s

tate

rea

sons

and

its

duty

of

trans

pare

ncy

have

bee

nex

tend

ed. R

esol

utio

n 19

89 (2

011)

is a

lso

inte

nded

to im

prov

e th

e ac

cess

of t

he O

mbu

dspe

rson

to c

onfid

entia

l inf

orm

atio

n he

ld b

y th

e M

embe

rs o

f the

Uni

ted

Nat

ions

and

the

disc

losu

re o

f the

iden

tity

of th

e St

ates

whi

ch re

ques

ted

the

listin

g.

85

M

r K

adi r

espo

nds,

first

, tha

t the

Gen

eral

Cou

rt co

rrec

tly h

eld,

in th

e ju

dgm

ent u

nder

app

eal,

that

the

Cou

rt ga

ve a

per

fect

ly c

lear

indi

catio

n, in

the

Kad

i jud

gmen

t, of

the

scop

e an

d in

tens

ityof

judi

cial

revi

ew a

pplic

able

in th

is c

ase.

The

Cou

rt ex

plic

itly

stat

ed, i

n th

e K

adi j

udgm

ent,

that

the

revi

ew o

f la

wfu

lnes

s sh

ould

be

a fu

ll re

view

, ex

tend

ing,

sub

ject

onl

y to

con

fiden

tialit

yre

quire

men

ts r

elat

ing

to p

ublic

sec

urity

, to

the

info

rmat

ion

and

evid

ence

rel

ied

on a

gain

st M

rK

adi.

Furth

er,

the

fact

tha

t, un

like

the

regi

me

refe

rred

to

in p

arag

raph

s 14

and

15

of t

his

judg

men

t, th

e re

gim

e at

issu

e in

this

cas

e do

es n

ot in

volv

e, p

rior t

o th

e pr

oced

ure

at E

urop

ean

Uni

on le

vel,

any

proc

edur

e sa

fegu

ardi

ng re

spec

t for

the

right

s of t

he d

efen

ce su

bjec

t to

effe

ctiv

eju

dici

al re

view

is a

n ar

gum

ent w

hich

sup

ports

the

enha

ncem

ent o

f eff

ectiv

e ju

dici

al p

rote

ctio

nat

Eur

opea

n U

nion

lev

el,

as s

tate

d by

the

Gen

eral

Cou

rt in

par

agra

phs

186

and

187

of t

heju

dgm

ent u

nder

app

eal.

86

Se

cond

, Mr K

adi d

oes

not a

ccep

t tha

t the

requ

irem

ent s

tate

d in

the

judg

men

t und

er a

ppea

l in

rela

tion

to th

e le

vel o

f int

ensi

ty o

f jud

icia

l rev

iew

app

licab

le in

this

cas

e is

inco

rrec

t.

87

In

the

first

pla

ce, t

he G

ener

al C

ourt’

s ap

proa

ch d

oes

not d

isre

gard

inte

rnat

iona

l law

. Jud

icia

lre

view

of t

he la

wfu

lnes

s of t

he c

onte

sted

regu

latio

n is

not

equ

ival

ent t

o re

view

of t

he v

alid

ity o

fth

e re

solu

tion

whi

ch t

hat

regu

latio

n im

plem

ents

. Th

at r

evie

w d

oes

not

chal

leng

e ei

ther

the

prim

ary

resp

onsi

bilit

y of

the

Sec

urity

Cou

ncil

in t

he a

rea

conc

erne

d or

the

prim

acy

of t

heC

harte

r of

the

Uni

ted

Nat

ions

ove

r an

y ot

her

inte

rnat

iona

l ag

reem

ent.

Nor

is

such

jud

icia

lre

view

inte

nded

to su

bstit

ute

the

polit

ical

judg

men

t of t

he C

ourts

of t

he E

urop

ean

Uni

on fo

r tha

tof

the

com

pete

nt i

nter

natio

nal

auth

oriti

es.

Its p

urpo

se i

s so

lely

to

ensu

re o

bser

vanc

e of

the

requ

irem

ent t

hat S

ecur

ity C

ounc

il R

esol

utio

ns a

re im

plem

ente

d w

ithin

the

Euro

pean

Uni

on in

am

anne

r com

patib

le w

ith th

e fu

ndam

enta

l prin

cipl

es o

f Eur

opea

n U

nion

law

. Mor

e sp

ecifi

cally

,su

ch r

evie

w c

ontri

bute

s to

ens

urin

g th

at a

bal

ance

is

stru

ck b

etw

een

the

requ

irem

ents

of

inte

rnat

iona

l pea

ce a

nd s

ecur

ity, o

n th

e on

e ha

nd, a

nd th

e pr

otec

tion

of f

unda

men

tal r

ight

s, on

the

othe

r.

501

88

In th

e se

cond

pla

ce, t

he G

ener

al C

ourt’

s ap

proa

ch is

con

sist

ent w

ith E

urop

ean

Uni

on la

w,

whi

ch r

equi

res

resp

ect f

or f

unda

men

tal r

ight

s an

d th

e gu

aran

tee

of in

depe

nden

t and

impa

rtial

judi

cial

revi

ew, i

nclu

ding

revi

ew o

f Eur

opea

n U

nion

mea

sure

s bas

ed o

n in

tern

atio

nal l

aw.

89

Th

ird, a

fter n

otin

g th

at th

e co

nsid

erat

ions

of t

he G

ener

al C

ourt

on th

e na

ture

of t

he re

stric

tive

mea

sure

s at

issu

e ar

e su

pple

men

tary

, Mr

Kad

i non

e th

e le

ss a

rgue

s th

at, i

n hi

s pa

rticu

lar

case

,th

ose

mea

sure

s ca

n no

long

er b

e de

scrib

ed a

s pr

even

tive

and

have

bec

ome

puni

tive,

by

reas

onbo

th o

f the

ir ge

nera

l sco

pe a

nd th

e fa

ct th

at h

e ha

s be

en s

ubje

ct to

them

for a

ver

y lo

ng ti

me,

afa

ctor

whi

ch ju

stifi

es fu

ll an

d rig

orou

s rev

iew

of t

he c

onte

sted

regu

latio

n.

90

Fo

urth

, Mr

Kad

i doe

s no

t acc

ept t

hat t

he r

equi

rem

ents

impo

sed

by th

e G

ener

al C

ourt

for

the

purp

oses

of r

espe

ct fo

r his

fund

amen

tal r

ight

s are

viti

ated

by

an e

rror

of l

aw.

91

Mr

Kad

i con

tend

s, in

this

reg

ard,

that

eff

ectiv

e ju

dici

al r

evie

w is

impo

ssib

le w

hen

ther

e is

aco

mpl

ete

failu

re to

dis

clos

e th

e in

form

atio

n an

d ev

iden

ce h

eld

by th

e bo

dies

of t

he U

N. A

s the

seve

ry b

odie

s ac

cept

, the

nar

rativ

e su

mm

ary

of r

easo

ns p

rovi

ded

by th

e Sa

nctio

ns C

omm

ittee

isno

t des

igne

d to

be

used

as e

vide

nce.

It m

erel

y co

mpr

ises

a u

sefu

l ind

icat

ion

of th

e pa

st a

ctiv

ities

of th

e pe

rson

con

cern

ed a

nd o

f the

exi

sten

ce o

f evi

denc

e kn

own

to m

embe

rs o

f tha

t com

mitt

ee.

92

Th

e fa

ct th

at th

ere

is n

o fo

rmal

pro

cedu

re fo

r the

exc

hang

e of

info

rmat

ion

betw

een

the

Secu

rity

Cou

ncil

and

the

inst

itutio

ns o

f the

Eur

opea

n U

nion

is n

o ba

r to

an e

xcha

nge

of th

e in

form

atio

nne

cess

ary

to e

nsur

ing

the

achi

evem

ent

of t

heir

com

mon

goa

l of

saf

egua

rdin

g fu

ndam

enta

lhu

man

righ

ts w

hen

appl

ying

rest

rictiv

e m

easu

res.

In th

e pr

esen

t cas

e, d

espi

te M

r Kad

i’s e

xpre

ssre

ques

t, th

e C

omm

issi

on h

as n

ot e

ven

atte

mpt

ed t

o ob

tain

dis

clos

ure

by t

he S

anct

ions

Com

mitt

ee o

f a

deta

iled

stat

emen

t of

the

fact

s or

evi

denc

e ju

stify

ing

the

listin

g of

Mr

Kad

i’sna

me

on th

e lis

ts a

t iss

ue.

93

A

s re

gard

s th

e na

rrat

ive

sum

mar

y of

reas

ons

prov

ided

by

the

Sanc

tions

Com

mitt

ee, i

t con

tain

sa

num

ber o

f gen

eral

and

uns

ubst

antia

ted

alle

gatio

ns, w

hich

Mr K

adi h

as n

ot b

een

in a

pos

ition

effe

ctiv

ely

to re

but.

94

Fi

fth, M

r Kad

i con

tend

s th

at th

e le

gal p

roce

edin

gs in

the

Uni

ted

Stat

es a

re o

f no

rele

vanc

e to

this

cas

e, g

iven

that

the

purp

ose

of th

ose

proc

eedi

ngs i

s the

ann

ulm

ent o

f his

list

ing

on th

e lis

t of

the

Off

ice

of F

orei

gn A

sset

s C

ontro

l, of

the

Uni

ted

Stat

es T

reas

ury

Dep

artm

ent,

for

reas

ons

who

lly d

istin

ct f

rom

the

grou

nds

at is

sue

in th

is c

ase.

Tho

se p

roce

edin

gs c

once

rn n

eith

er th

eco

ntes

ted

regu

latio

n no

r th

e Se

curit

y C

ounc

il R

esol

utio

ns w

hich

that

reg

ulat

ion

is d

esig

ned

toim

plem

ent.

95

Sixt

h, M

r K

adi

cont

ends

tha

t, w

hen

the

cont

este

d re

gula

tion

was

ado

pted

, th

e on

ly r

e-ex

amin

atio

n pr

oced

ure

esta

blis

hed

at U

nite

d N

atio

ns l

evel

was

tha

t of

the

Foc

al P

oint

. A

sre

gard

s th

e cr

eatio

n of

the

Off

ice

of t

he O

mbu

dspe

rson

, w

hich

, al

thou

gh p

ost-d

atin

g th

atad

optio

n, w

as t

aken

int

o ac

coun

t by

the

Gen

eral

Cou

rt, t

hat

does

not

off

er a

ny g

uara

ntee

of

judi

cial

pro

tect

ion.

In p

artic

ular

, the

per

son

seek

ing

the

delis

ting

of h

is n

ame

from

the

Sanc

tions

Com

mitt

ee C

onso

lidat

ed L

ist d

oes

not h

ave

avai

labl

e to

him

a d

etai

led

stat

emen

t of t

he re

ason

sfo

r his

bei

ng p

lace

d on

that

list

, nor

the

evid

ence

relie

d on

aga

inst

him

, and

he

does

not

hav

e th

erig

ht to

be

hear

d by

the

Sanc

tions

Com

mitt

ee, t

he b

ody

that

will

exc

lusi

vely

mak

e th

e de

cisi

onon

del

istin

g. M

oreo

ver,

the

Om

buds

pers

on h

as n

o po

wer

to c

ompe

l any

act

ion

by th

e M

embe

rsof

the

UN

or

by t

he S

anct

ions

Com

mitt

ee,

whi

ch e

njoy

s a

disc

retio

n. T

he p

ersi

sten

tsh

ortc

omin

gs o

f th

is p

roce

dure

hav

e be

en e

mph

asis

ed b

y, a

mon

g ot

hers

, th

e O

ffic

e of

the

Om

buds

pers

on it

self

in it

s fir

st r

epor

t of

Janu

ary

2011

, whi

ch d

rew

par

ticul

ar a

ttent

ion

to th

ela

ck o

f ac

cess

to c

lass

ified

or

conf

iden

tial i

nfor

mat

ion

and

the

fact

that

the

appl

ican

t rem

ains

unaw

are

of th

e id

entit

y of

the

Stat

e or

Sta

tes t

hat p

ropo

sed

his i

nclu

sion

in th

at li

st.

96

Th

ose

shor

tcom

ings

wer

e no

t rec

tifie

d by

Res

olut

ion

1989

(201

1). T

he re

com

men

datio

ns o

f the

Off

ice

of th

e O

mbu

dspe

rson

still

do

not h

ave

bind

ing

forc

e. T

he d

eter

min

atio

n of

the

crite

ria fo

r

delis

ting

from

the

San

ctio

ns C

omm

ittee

Con

solid

ated

Lis

t an

d th

e po

wer

to

deci

de t

o de

list

rem

ain

with

in th

e di

scre

tion

of th

e Sa

nctio

ns C

omm

ittee

. Whe

re a

del

istin

g re

com

men

datio

n is

mad

e by

the

Off

ice

of th

e O

mbu

dspe

rson

, any

mem

ber

of th

e Sa

nctio

ns C

omm

ittee

may

ref

erth

e m

atte

r to

the

Sec

urity

Cou

ncil,

the

fiv

e pe

rman

ent

mem

bers

of

whi

ch m

ay e

xerc

ise

thei

rve

to a

ccor

ding

to th

eir d

iscr

etio

n. T

he O

ffic

e of

the

Om

buds

pers

on d

epen

ds, m

oreo

ver,

on th

ew

illin

gnes

s of S

tate

s to

coop

erat

e in

gat

herin

g in

form

atio

n.

Fin

ding

s of t

he C

ourt

–Th

e ex

tent

of t

he ri

ghts

of t

he d

efen

ce a

nd o

f the

righ

t to

effe

ctiv

e ju

dici

al p

rote

ctio

n

97

A

s st

ated

by

the

Gen

eral

Cou

rt in

par

agra

phs

125,

126

and

171

of t

he ju

dgm

ent u

nder

app

eal,

the

Cou

rt he

ld, i

n pa

ragr

aph

326

of th

e K

adi j

udgm

ent,

that

the

Cou

rts o

f the

Eur

opea

n U

nion

mus

t, in

acc

orda

nce

with

the

pow

ers

conf

erre

d on

them

by

the

Trea

ties,

ensu

re th

e re

view

, in

prin

cipl

e th

e fu

ll re

view

, of

the

law

fuln

ess

of a

ll U

nion

act

s in

the

lig

ht o

f th

e fu

ndam

enta

lrig

hts

form

ing

an i

nteg

ral

part

of t

he E

urop

ean

Uni

on l

egal

ord

er,

incl

udin

g re

view

of

such

mea

sure

s as

are

des

igne

d to

giv

e ef

fect

to r

esol

utio

ns a

dopt

ed b

y th

e Se

curit

y C

ounc

il un

der

Cha

pter

VII

of

the

Cha

rter

of th

e U

nite

d N

atio

ns (

see

also

, to

that

eff

ect,

Has

san

and

Ayad

i vC

ounc

il an

d C

omm

issi

on, p

arag

raph

71,

and

Ban

k M

elli

Iran

v C

ounc

il, p

arag

raph

105

). Th

atob

ligat

ion

is e

xpre

ssly

laid

dow

n by

the

seco

nd p

arag

raph

of A

rticl

e 27

5 TF

EU.

98

Th

ose

fund

amen

tal r

ight

s inc

lude

, int

er a

lia, r

espe

ct fo

r the

righ

ts o

f the

def

ence

and

the

right

toef

fect

ive

judi

cial

pro

tect

ion.

99

The

first

of

thos

e rig

hts,

whi

ch is

aff

irmed

in A

rticl

e 41

(2)

of th

e C

harte

r of

Fun

dam

enta

lR

ight

s of

the

Eur

opea

n U

nion

(‘th

e C

harte

r’)

(see

, to

tha

t ef

fect

, C

ase

C27

/09

P Fr

ance

vPe

ople

’s M

ojah

edin

Org

aniz

atio

n of

Ira

n [2

011]

EC

R I

1342

7, p

arag

raph

66)

, in

clud

es t

herig

ht t

o be

hea

rd a

nd t

he r

ight

to

have

acc

ess

to t

he f

ile,

subj

ect

to l

egiti

mat

e in

tere

sts

inm

aint

aini

ng c

onfid

entia

lity.

100

Th

e se

cond

of t

hose

fund

amen

tal r

ight

s, w

hich

is a

ffirm

ed in

Arti

cle

47 o

f the

Cha

rter,

requ

ires

that

the

pers

on c

once

rned

mus

t be

able

to a

scer

tain

the

reas

ons u

pon

whi

ch th

e de

cisi

on ta

ken

inre

latio

n to

him

is

base

d, e

ither

by

read

ing

the

deci

sion

its

elf

or b

y re

ques

ting

and

obta

inin

gdi

sclo

sure

of

thos

e re

ason

s, w

ithou

t pre

judi

ce to

the

pow

er o

f th

e co

urt h

avin

g ju

risdi

ctio

n to

requ

ire th

e au

thor

ity c

once

rned

to d

iscl

ose

that

info

rmat

ion,

so

as to

mak

e it

poss

ible

for h

im to

defe

nd h

is r

ight

s in

the

bes

t po

ssib

le c

ondi

tions

and

to

deci

de,

with

ful

l kn

owle

dge

of t

here

leva

nt fa

cts,

whe

ther

ther

e is

any

poi

nt in

his

app

lyin

g to

the

cour

t hav

ing

juris

dict

ion,

and

inor

der t

o pu

t the

latte

r ful

ly in

a p

ositi

on to

revi

ew th

e la

wfu

lnes

s of t

he d

ecis

ion

in q

uest

ion

(see

judg

men

t of 4

June

201

3 in

Cas

e C

300/

11 Z

Z, p

arag

raph

53

and

case

-law

cite

d).

101

A

rticl

e 52

(1)

of t

he C

harte

r ne

verth

eles

s al

low

s lim

itatio

ns o

n th

e ex

erci

se o

f th

e rig

hts

ensh

rined

in

the

Cha

rter,

subj

ect

to t

he c

ondi

tions

tha

t th

e lim

itatio

n co

ncer

ned

resp

ects

the

esse

nce

of th

e fu

ndam

enta

l rig

ht in

que

stio

n an

d, s

ubje

ct to

the

prin

cipl

e of

pro

porti

onal

ity, t

hat

it is

nec

essa

ry a

nd g

enui

nely

mee

ts o

bjec

tives

of

gene

ral i

nter

est r

ecog

nise

d by

the

Euro

pean

Uni

on (s

ee Z

Z, p

arag

raph

51)

.

102

F

urth

er, t

he q

uest

ion

whe

ther

ther

e is

an

infr

inge

men

t of

the

right

s of

the

defe

nce

and

of th

erig

ht to

eff

ectiv

e ju

dici

al p

rote

ctio

n m

ust b

e ex

amin

ed in

rela

tion

to th

e sp

ecifi

c ci

rcum

stan

ces

of e

ach

parti

cula

r cas

e (s

ee, t

o th

at e

ffec

t, C

ase

C11

0/10

P S

olva

y v

Com

mis

sion

[201

1] E

CR

I10

439,

par

agra

ph 6

3), i

nclu

ding

, the

nat

ure

of th

e ac

t at i

ssue

, the

con

text

of i

ts a

dopt

ion

and

the

lega

l rul

es g

over

ning

the

mat

ter i

n qu

estio

n (s

ee, t

o th

at e

ffec

t, as

rega

rds

com

plia

nce

with

the

duty

to s

tate

reas

ons,

the

judg

men

ts o

f 15

Nov

embe

r 201

2 in

Joi

ned

Cas

es C

539/

10 P

and

C55

0/10

P A

l-Aqs

a v

Cou

ncil

and

Net

herl

ands

v A

l-Aqs

a, p

arag

raph

s 139

and

140

, and

in C

ase

C41

7/11

P C

ounc

il v

Bam

ba, p

arag

raph

53)

.

502

103

I

n th

is c

ase,

it is

nec

essa

ry to

det

erm

ine

whe

ther

, in

the

light

of

the

requ

irem

ents

sta

ted,

inpa

rticu

lar,

in A

rticl

e 3(

1) a

nd (5

) TEU

and

Arti

cle

21(1

) and

(2)(

a) a

nd (c

) TEU

, rel

atin

g to

the

mai

nten

ance

of

inte

rnat

iona

l pe

ace

and

secu

rity

whi

le r

espe

ctin

g in

tern

atio

nal

law

, an

dsp

ecifi

cally

the

prin

cipl

es o

f th

e C

harte

r of

the

Uni

ted

Nat

ions

, the

fac

t tha

t Mr

Kad

i and

the

Cou

rts o

f th

e Eu

rope

an U

nion

did

not

hav

e ac

cess

to th

e in

form

atio

n an

d ev

iden

ce r

elie

d on

agai

nst h

im, t

o w

hich

the

Gen

eral

Cou

rt dr

aws a

ttent

ion,

par

ticul

arly

in p

arag

raph

s 173

, 181

and

182

of th

e ju

dgm

ent u

nder

app

eal,

cons

titut

es a

n in

frin

gem

ent o

f th

e rig

hts

of th

e de

fenc

e an

dth

e rig

ht to

eff

ectiv

e ju

dici

al p

rote

ctio

n.

104

I

n th

at r

egar

d, a

s th

e C

ourt

has

prev

ious

ly s

tate

d, s

peci

fical

ly in

par

agra

ph 2

94 o

f th

e K

adi

judg

men

t, it

mus

t be

emph

asis

ed th

at, i

n ac

cord

ance

with

Arti

cle

24 o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

, the

Sec

urity

Cou

ncil

has

been

inve

sted

by

the

mem

bers

of

the

UN

with

the

prim

ary

resp

onsi

bilit

y fo

r the

mai

nten

ance

of i

nter

natio

nal p

eace

and

sec

urity

. To

that

end

, it i

s th

e ta

skof

the

Secu

rity

Cou

ncil

to d

eter

min

e w

hat c

onst

itute

s a th

reat

to in

tern

atio

nal p

eace

and

secu

rity

and

to ta

ke th

e m

easu

res

nece

ssar

y, b

y m

eans

of t

he a

dopt

ion

of re

solu

tions

und

er C

hapt

er V

IIof

that

Cha

rter,

to m

aint

ain

or r

esto

re in

tern

atio

nal p

eace

and

sec

urity

, in

acco

rdan

ce w

ith th

epu

rpos

es a

nd p

rinci

ples

of t

he U

nite

d N

atio

ns, i

nclu

ding

resp

ect f

or h

uman

righ

ts.

105

In

that

con

text

, as

is a

ppar

ent f

rom

the

reso

lutio

ns, r

efer

red

to in

par

agra

phs

10 a

nd 1

1 of

this

judg

men

t, go

vern

ing

the

regi

me

of re

stric

tive

mea

sure

s su

ch a

s th

ose

at is

sue

in th

is c

ase,

it is

the

task

of t

he S

anct

ions

Com

mitt

ee, o

n th

e pr

opos

al o

f a U

N m

embe

r sup

porte

d by

a ‘s

tate

men

tof

cas

e’ w

hich

sho

uld

prov

ide

‘as

muc

h de

tail

as p

ossi

ble

on th

e ba

sis(

es)

for

the

listin

g’, t

he‘n

atur

e of

the

info

rmat

ion’

and

‘sup

porti

ng in

form

atio

n or

doc

umen

ts th

at c

an b

e pr

ovid

ed’,

tode

sign

ate,

app

lyin

g th

e cr

iteria

laid

dow

n by

the

Secu

rity

Cou

ncil,

the

orga

nisa

tions

, ent

ities

and

indi

vidu

als

who

se f

unds

and

oth

er e

cono

mic

res

ourc

es a

re to

be

froz

en. T

hat d

esig

natio

n, p

utin

to e

ffec

t by

the

listin

g of

the

nam

e of

the

orga

nisa

tion,

ent

ity o

r ind

ivid

ual c

once

rned

on

the

Sanc

tions

Com

mitt

ee C

onso

lidat

ed L

ist w

hich

is m

aint

aine

d at

the

requ

est o

f the

Mem

ber S

tate

sof

the

UN

, is

to b

e ba

sed

on a

‘sum

mar

y of

reas

ons’

whi

ch is

to b

e pr

oduc

ed b

y th

e Sa

nctio

nsC

omm

ittee

in

the

light

of

the

mat

eria

l w

hich

the

Mem

ber

Stat

e pr

opos

ing

the

listin

g ha

sid

entif

ied

as c

apab

le o

f dis

clos

ure,

par

ticul

arly

to th

e pa

rty c

once

rned

, and

whi

ch is

to b

e m

ade

acce

ssib

le o

n its

web

site

.

106

W

hen

the

Euro

pean

Uni

on im

plem

ents

Sec

urity

Cou

ncil

reso

lutio

ns a

dopt

ed u

nder

Cha

pter

VII

of t

he C

harte

r of

the

Uni

ted

Nat

ions

, on

the

bas

is o

f a

Com

mon

Pos

ition

or

a jo

int

actio

nad

opte

d by

the

Mem

ber

Stat

es p

ursu

ant

to t

he p

rovi

sion

s of

the

EU

Tre

aty

rela

ting

to t

heco

mm

on f

orei

gn a

nd s

ecur

ity p

olic

y, t

he c

ompe

tent

Eur

opea

n U

nion

aut

horit

y m

ust

take

due

acco

unt o

f the

term

s an

d ob

ject

ives

of t

he re

solu

tion

conc

erne

d an

d of

the

rele

vant

obl

igat

ions

unde

r tha

t Cha

rter r

elat

ing

to s

uch

impl

emen

tatio

n (s

ee th

e K

adi j

udgm

ent,

para

grap

hs 2

95 a

nd29

6).

107

C

onse

quen

tly, w

here

, und

er th

e re

leva

nt S

ecur

ity C

ounc

il re

solu

tions

, the

San

ctio

ns C

omm

ittee

has

deci

ded

to li

st th

e na

me

of a

n or

gani

satio

n, e

ntity

or i

ndiv

idua

l on

its C

onso

lidat

ed L

ist,

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

mus

t, in

ord

er to

giv

e ef

fect

to th

at d

ecis

ion

on b

ehal

f of

the

Mem

ber S

tate

s, ta

ke th

e de

cisi

on to

list

the

nam

e of

that

org

anis

atio

n, e

ntity

or i

ndiv

idua

l, or

to m

aint

ain

such

list

ing,

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

on

the

basi

s of

the

sum

mar

y of

reas

ons

prov

ided

by

the

Sanc

tions

Com

mitt

ee. O

n th

e ot

her h

and,

ther

e is

no

prov

isio

n in

thos

ere

solu

tions

to th

e ef

fect

that

the

Sanc

tions

Com

mitt

ee is

aut

omat

ical

ly to

mak

e av

aila

ble

to, i

npa

rticu

lar,

the

Euro

pean

Uni

on a

utho

rity

resp

onsi

ble

for t

he a

dopt

ion

by th

e Eu

rope

an U

nion

of

its d

ecis

ion

to li

st o

r mai

ntai

n a

listin

g, a

ny m

ater

ial o

ther

than

that

sum

mar

y of

reas

ons.

108

A

ccor

ding

ly, b

oth

in re

spec

t of a

n in

itial

dec

isio

n to

list

the

nam

e of

an

orga

nisa

tion,

ent

ity o

rin

divi

dual

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

and

, as

in th

e pr

esen

t cas

e, in

res

pect

of

ade

cisi

on to

mai

ntai

n su

ch a

list

ing

orig

inal

ly a

dopt

ed b

efor

e 3

Sept

embe

r 200

8, th

e da

te o

f the

Kad

i ju

dgm

ent,

Arti

cle

7a(1

) an

d (2

) an

d A

rticl

e 7c

(1)

and

(2)

of R

egul

atio

n N

o 88

1/20

02,

inse

rted

by C

ounc

il R

egul

atio

n (E

U) N

o 12

86/2

009

of 2

2 D

ecem

ber 2

009

amen

ding

Reg

ulat

ion

No

881/

2002

(O

J 20

09 L

346

p.

42)

in o

rder

to

amen

d th

e lis

ting

proc

edur

e fo

llow

ing

that

judg

men

t, as

is

expl

aine

d in

rec

ital

4 of

the

pre

ambl

e to

Reg

ulat

ion

No

1286

/200

9, r

efer

excl

usiv

ely

to th

e ‘s

tate

men

t of r

easo

ns’ p

rovi

ded

by th

e Sa

nctio

ns C

omm

ittee

for t

he p

urpo

ses

of th

e ta

king

of s

uch

deci

sion

s.

109

In

the

parti

cula

r cas

e of

Mr K

adi,

it is

app

aren

t fro

m th

e fil

e th

at th

e in

itial

list

ing

of h

is n

ame,

on 1

7 O

ctob

er 2

001

in th

e Sa

nctio

ns C

omm

ittee

Con

solid

ated

Lis

t fol

low

ed a

req

uest

by

the

Uni

ted

Stat

es o

n th

e ba

sis

of th

e ad

optio

n on

12

Oct

ober

200

1 of

a d

ecis

ion

in w

hich

the

Off

ice

of F

orei

gn A

sset

Con

trol i

dent

ified

Mr K

adi a

s a ‘S

peci

ally

Des

igna

ted

Glo

bal T

erro

rist’.

110

A

s is

app

aren

t fr

om r

ecita

l 3

of t

he p

ream

ble

to t

he c

onte

sted

reg

ulat

ion

[Reg

ulat

ion

No

1190

/200

8],

follo

win

g th

e K

adi

judg

men

t th

e C

omm

issi

on,

by m

eans

of

that

reg

ulat

ion,

deci

ded

to m

aint

ain

the

nam

e of

Mr K

adi o

n th

e lis

t in

Ann

ex I

to R

egul

atio

n N

o 81

/200

2 on

the

basi

s of

the

nar

rativ

e su

mm

arie

s of

rea

sons

whi

ch h

ad b

een

trans

mitt

ed b

y th

e Sa

nctio

nsC

omm

ittee

. As

the

Gen

eral

Cou

rt re

cord

ed in

par

agra

ph 9

5 of

the

judg

men

t und

er a

ppea

l, an

das

the

Com

mis

sion

con

firm

ed a

t the

hea

ring

befo

re th

e C

ourt,

the

Com

mis

sion

was

not

, for

that

purp

ose,

put

in p

osse

ssio

n of

evi

denc

e ot

her t

han

such

a su

mm

ary

of re

ason

s.

111

In

pro

ceed

ings

rela

ting

to th

e ad

optio

n of

the

deci

sion

to li

st o

r mai

ntai

n th

e lis

ting

of th

e na

me

of a

n in

divi

dual

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

, res

pect

for t

he ri

ghts

of t

he d

efen

ce a

ndth

e rig

ht to

eff

ectiv

e ju

dici

al p

rote

ctio

n re

quire

s th

at th

e co

mpe

tent

Uni

on a

utho

rity

disc

lose

toth

e in

divi

dual

con

cern

ed th

e ev

iden

ce a

gain

st th

at p

erso

n av

aila

ble

to th

at a

utho

rity

and

relie

don

as

the

basi

s of

its

deci

sion

, tha

t is

to s

ay, a

t the

ver

y le

ast,

the

sum

mar

y of

reas

ons

prov

ided

by th

e Sa

nctio

ns C

omm

ittee

(see

, to

that

eff

ect,

the

Kad

i jud

gmen

t, pa

ragr

aphs

336

and

337

), so

that

that

indi

vidu

al is

in a

pos

ition

to d

efen

d hi

s rig

hts

in th

e be

st p

ossi

ble

cond

ition

s an

d to

deci

de,

with

ful

l kn

owle

dge

of t

he r

elev

ant

fact

s, w

heth

er t

here

is

any

poin

t in

brin

ging

an

actio

n be

fore

the

Cou

rts o

f the

Eur

opea

n U

nion

.

112

W

hen

that

dis

clos

ure

take

s pl

ace,

the

com

pete

nt U

nion

aut

horit

y m

ust

ensu

re t

hat

that

indi

vidu

al i

s pl

aced

in

a po

sitio

n in

whi

ch h

e m

ay e

ffec

tivel

y m

ake

know

n hi

s vi

ews

on t

hegr

ound

s ad

vanc

ed a

gain

st h

im (s

ee, t

o th

at e

ffec

t, C

ase

C32

/95

P C

omm

issi

on v

Lis

rest

al a

ndO

ther

s[1

996]

EC

R I

5373

, par

agra

ph 2

1; C

ase

C46

2/98

P M

edio

curs

o v

Com

mis

sion

[200

0]EC

R I

7183

, par

agra

ph 3

6, a

nd ju

dgm

ent o

f 22

Nov

embe

r 201

2 in

Cas

e C

277/

11 M

., pa

ragr

aph

87 a

nd c

ase-

law

cite

d).

113

A

s re

gard

s a

deci

sion

whe

reby

, as

in th

is c

ase,

the

nam

e of

the

indi

vidu

al c

once

rned

is to

be

mai

ntai

ned

on t

he l

ist

in A

nnex

I t

o R

egul

atio

n N

o 88

1/20

02,

com

plia

nce

with

tha

t du

alpr

oced

ural

obl

igat

ion

mus

t, co

ntra

ry to

the

posi

tion

in r

espe

ct o

f an

initi

al li

stin

g (s

ee, i

n th

atre

gard

, th

e K

adi

judg

men

t, pa

ragr

aphs

336

to

341

and

345

to 3

49,

and

Fran

ce v

Peo

ple’

sM

ojah

edin

Org

aniz

atio

n of

Ira

n, p

arag

raph

61)

, pr

eced

e th

e ad

optio

n of

tha

t de

cisi

on (

see

Fran

ce v

Peo

ple’

s Moj

ahed

in O

rgan

izat

ion

of Ir

an, p

arag

raph

62)

. It i

s no

t dis

pute

d th

at, i

n th

epr

esen

t ca

se,

the

Com

mis

sion

, th

e au

thor

of

the

cont

este

d re

gula

tion,

com

plie

d w

ith t

hat

oblig

atio

n.

114

W

hen

com

men

ts a

re m

ade

by t

he i

ndiv

idua

l co

ncer

ned

on t

he s

umm

ary

of r

easo

ns,

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

is u

nder

an

oblig

atio

n to

exa

min

e, c

aref

ully

and

impa

rtial

ly, w

heth

er th

e al

lege

d re

ason

s ar

e w

ell f

ound

ed, i

n th

e lig

ht o

f th

ose

com

men

ts a

ndan

y ex

culp

ator

y ev

iden

ce p

rovi

ded

with

tho

se c

omm

ents

(se

e, b

y an

alog

y, C

ase

C26

9/90

Tech

nisc

he U

nive

rsitä

t Mün

chen

[199

1] E

CR

I54

69, p

arag

raph

14;

Cas

e C

-525

/04

P Sp

ain

vLe

nzin

g[2

007]

EC

R I

9947

, par

agra

ph 5

8, a

nd M

., pa

ragr

aph

88).

115

In

that

con

text

, it i

s fo

r tha

t aut

horit

y to

ass

ess,

havi

ng re

gard

, int

er a

lia, t

o th

e co

nten

t of a

nysu

ch c

omm

ents

, whe

ther

it is

nec

essa

ry to

see

k th

e as

sist

ance

of t

he S

anct

ions

Com

mitt

ee a

nd,

thro

ugh

that

com

mitt

ee, t

he M

embe

r of

the

UN

whi

ch p

ropo

sed

the

listin

g of

the

ind

ivid

ual

conc

erne

d on

that

com

mitt

ee’s

Con

solid

ated

Lis

t, in

ord

er to

obt

ain,

in th

at s

pirit

of

effe

ctiv

e

503

coop

erat

ion

whi

ch, u

nder

Arti

cle

220(

1) T

FEU

, mus

t gov

ern

rela

tions

bet

wee

n th

e U

nion

and

the

orga

ns o

f th

e U

nite

d N

atio

ns in

the

fight

aga

inst

inte

rnat

iona

l ter

roris

m, t

he d

iscl

osur

e of

info

rmat

ion

or e

vide

nce,

con

fiden

tial

or n

ot, t

o en

able

it

to d

isch

arge

its

dut

y of

car

eful

and

impa

rtial

exa

min

atio

n.

116

L

astly

, with

out g

oing

so

far

as to

req

uire

a d

etai

led

resp

onse

to th

e co

mm

ents

mad

e by

the

indi

vidu

al c

once

rned

(se

e, t

o th

at e

ffec

t, Al

Aqsa

v C

ounc

ilan

d N

ethe

rlan

ds v

Al-A

qsa,

para

grap

h 14

1), t

he o

blig

atio

n to

sta

te r

easo

ns l

aid

dow

n in

Arti

cle

296

TFEU

ent

ails

in

all

circ

umst

ance

s, no

t le

ast

whe

n th

e re

ason

s st

ated

for

the

Eur

opea

n U

nion

mea

sure

rep

rese

ntre

ason

s st

ated

by

an in

tern

atio

nal b

ody,

that

that

sta

tem

ent o

f rea

sons

iden

tifie

s th

e in

divi

dual

,sp

ecifi

c an

d co

ncre

te r

easo

ns w

hy t

he c

ompe

tent

aut

horit

ies

cons

ider

tha

t th

e in

divi

dual

conc

erne

d m

ust

be s

ubje

ct t

o re

stric

tive

mea

sure

s (s

ee, t

o th

at e

ffec

t, Al

-Aqs

a v

Cou

ncil

and

Net

herl

ands

v A

lAqs

a, p

arag

raph

s 140

and

142

, and

Cou

ncil

v Ba

mba

, par

agra

phs 4

9 to

53)

.

117

A

s re

gard

s co

urt p

roce

edin

gs, i

n th

e ev

ent t

hat t

he p

erso

n co

ncer

ned

chal

leng

es th

e la

wfu

lnes

sof

the

deci

sion

to li

st o

r mai

ntai

n th

e lis

ting

of h

is n

ame

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

,th

e re

view

by

the

Cou

rts o

f th

e Eu

rope

an U

nion

mus

t ext

end

to w

heth

er r

ules

as

to p

roce

dure

and

rule

s as

to c

ompe

tenc

e, in

clud

ing

whe

ther

or

not t

he le

gal b

asis

is a

dequ

ate,

are

obs

erve

d(s

ee,

to t

hat

effe

ct,

the

Kad

i ju

dgm

ent,

para

grap

hs 1

21 t

o 23

6; s

ee a

lso,

by

anal

ogy,

the

judg

men

t of 1

3 M

arch

201

2 in

Cas

e C

376/

10 P

Tay

Za

v C

ounc

il, p

arag

raph

s 46

to 7

2).

118

Th

e C

ourts

of

the

Euro

pean

Uni

on m

ust,

furth

er, d

eter

min

e w

heth

er th

e co

mpe

tent

Eur

opea

nU

nion

aut

horit

y ha

s com

plie

d w

ith th

e pr

oced

ural

safe

guar

ds se

t out

in p

arag

raph

s 111

to 1

14 o

fth

is ju

dgm

ent a

nd th

e ob

ligat

ion

to s

tate

reas

ons

laid

dow

n in

Arti

cle

296

TFEU

, as

men

tione

din

par

agra

ph 1

16 o

f th

is j

udgm

ent,

and,

in

parti

cula

r, w

heth

er t

he r

easo

ns r

elie

d on

are

suff

icie

ntly

det

aile

d an

d sp

ecifi

c.

119

Th

e ef

fect

iven

ess

of th

e ju

dici

al re

view

gua

rant

eed

by A

rticl

e 47

of t

he C

harte

r als

o re

quire

sth

at, a

s pa

rt of

the

revi

ew o

f the

law

fuln

ess

of th

e gr

ound

s w

hich

are

the

basi

s of

the

deci

sion

tolis

t or t

o m

aint

ain

the

listin

g of

a g

iven

per

son

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

(the

Kad

iju

dgm

ent,

para

grap

h 33

6), t

he C

ourts

of

the

Euro

pean

Uni

on a

re to

ens

ure

that

that

dec

isio

n,w

hich

aff

ects

that

per

son

indi

vidu

ally

(see

, to

that

eff

ect,

judg

men

t of 2

3 A

pril

2013

in J

oine

dC

ases

C47

8/11

P to

C48

2/11

P G

bagb

o an

d O

ther

s v

Cou

ncil,

par

agra

ph 5

6), i

s ta

ken

on a

suff

icie

ntly

solid

fact

ual b

asis

(see

, to

that

eff

ect,

Al-A

qsa

v C

ounc

il an

d N

ethe

rlan

ds v

Al-A

qsa,

para

grap

h 68

). Th

at e

ntai

ls a

ver

ifica

tion

of th

e fa

ctua

l alle

gatio

ns in

the

sum

mar

y of

rea

sons

unde

rpin

ning

that

dec

isio

n (s

ee to

that

eff

ect,

E an

d F,

par

agra

ph 5

7), w

ith th

e co

nseq

uenc

e th

atju

dici

al r

evie

w c

anno

t be

res

trict

ed t

o an

ass

essm

ent

of t

he c

ogen

cy i

n th

e ab

stra

ct o

f th

ere

ason

s re

lied

on, b

ut m

ust c

once

rn w

heth

er th

ose

reas

ons,

or, a

t the

ver

y le

ast,

one

of th

ose

reas

ons,

deem

ed su

ffic

ient

in it

self

to su

ppor

t tha

t dec

isio

n, is

subs

tant

iate

d.

120

To

that

end

, it i

s for

the

Cou

rts o

f the

Eur

opea

n U

nion

, in

orde

r to

carr

y ou

t tha

t exa

min

atio

n, to

requ

est

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity,

whe

n ne

cess

ary,

to

prod

uce

info

rmat

ion

orev

iden

ce, c

onfid

entia

l or

not,

rele

vant

to s

uch

an e

xam

inat

ion

(see

, by

anal

ogy,

ZZ,

par

agra

ph59

).

121

T

hat i

s be

caus

e it

is th

e ta

sk o

f th

e co

mpe

tent

Eur

opea

n U

nion

aut

horit

y to

est

ablis

h, in

the

even

t of c

halle

nge,

that

the

reas

ons r

elie

d on

aga

inst

the

pers

on c

once

rned

are

wel

l fou

nded

, and

not t

he ta

sk o

f th

at p

erso

n to

add

uce

evid

ence

of

the

nega

tive,

that

thos

e re

ason

s ar

e no

t wel

lfo

unde

d.

122

F

or th

at p

urpo

se, t

here

is n

o re

quire

men

t tha

t tha

t aut

horit

y pr

oduc

e be

fore

the

Cou

rts o

f th

eEu

rope

an U

nion

all

the

info

rmat

ion

and

evid

ence

und

erly

ing

the

reas

ons a

llege

d in

the

sum

mar

ypr

ovid

ed b

y th

e Sa

nctio

ns C

omm

ittee

. It i

s ho

wev

er n

eces

sary

that

the

info

rmat

ion

or e

vide

nce

prod

uced

shou

ld su

ppor

t the

reas

ons r

elie

d on

aga

inst

the

pers

on c

once

rned

.

123

If

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

finds

itse

lf un

able

to c

ompl

y w

ith th

e re

ques

t by

the

Cou

rts o

f the

Eur

opea

n U

nion

, it i

s the

n th

e du

ty o

f tho

se C

ourts

to b

ase

thei

r dec

isio

n so

lely

on

the

mat

eria

l whi

ch h

as b

een

disc

lose

d to

them

, nam

ely,

in th

is c

ase,

the

indi

catio

ns c

onta

ined

inth

e na

rrat

ive

sum

mar

y of

rea

sons

pro

vide

d by

the

Sanc

tions

Com

mitt

ee, t

he o

bser

vatio

ns a

ndex

culp

ator

y ev

iden

ce th

at m

ay h

ave

been

pro

duce

d by

the

pers

on c

once

rned

and

the

resp

onse

of

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

to th

ose

obse

rvat

ions

. If t

hat m

ater

ial i

s in

suff

icie

nt to

allo

w a

find

ing

that

a re

ason

is w

ell f

ound

ed, t

he C

ourts

of t

he E

urop

ean

Uni

on s

hall

disr

egar

dth

at re

ason

as a

pos

sibl

e ba

sis f

or th

e co

ntes

ted

deci

sion

to li

st o

r mai

ntai

n a

listin

g.

124

If

, on

the

othe

r han

d, th

e co

mpe

tent

Eur

opea

n U

nion

aut

horit

y pr

ovid

es re

leva

nt in

form

atio

n or

evid

ence

, the

Cou

rts o

f the

Eur

opea

n U

nion

mus

t the

n de

term

ine

whe

ther

the

fact

s al

lege

d ar

em

ade

out

in t

he l

ight

of

that

inf

orm

atio

n or

evi

denc

e an

d as

sess

the

pro

bativ

e va

lue

of t

hat

info

rmat

ion

or e

vide

nce

in t

he c

ircum

stan

ces

of t

he p

artic

ular

cas

e an

d in

the

lig

ht o

f an

yob

serv

atio

ns su

bmitt

ed in

rela

tion

to th

em b

y, a

mon

g ot

hers

, the

per

son

conc

erne

d.

125

A

dmitt

edly

, ove

rrid

ing

cons

ider

atio

ns to

do

with

the

secu

rity

of th

e Eu

rope

an U

nion

or o

f its

Mem

ber

Stat

es o

r w

ith th

e co

nduc

t of

thei

r in

tern

atio

nal r

elat

ions

may

pre

clud

e th

e di

sclo

sure

of so

me

info

rmat

ion

or so

me

evid

ence

to th

e pe

rson

con

cern

ed. I

n su

ch c

ircum

stan

ces,

it is

non

eth

e le

ss t

he t

ask

of t

he C

ourts

of

the

Euro

pean

Uni

on,

befo

re w

hom

the

sec

recy

or

conf

iden

tialit

y of

that

info

rmat

ion

or e

vide

nce

is n

o va

lid o

bjec

tion,

to a

pply

, in

the

cour

se o

fth

e ju

dici

al r

evie

w t

o be

car

ried

out,

tech

niqu

es w

hich

acc

omm

odat

e, o

n th

e on

e ha

nd,

legi

timat

e se

curit

y co

nsid

erat

ions

abo

ut t

he n

atur

e an

d so

urce

s of

inf

orm

atio

n ta

ken

into

acco

unt i

n th

e ad

optio

n of

the

act c

once

rned

and

, on

the

othe

r, th

e ne

ed su

ffic

ient

ly to

gua

rant

eeto

an

indi

vidu

al r

espe

ct f

or h

is p

roce

dura

l rig

hts,

such

as

the

right

to

be h

eard

and

the

requ

irem

ent f

or a

n ad

vers

aria

l pro

cess

(se

e, to

that

eff

ect,

the

Kad

i jud

gmen

t, pa

ragr

aphs

342

and

344;

see

also

, by

anal

ogy,

ZZ,

par

agra

phs 5

4, 5

7 an

d 59

).

126

To

that

end

, it i

s for

the

Cou

rts o

f the

Eur

opea

n U

nion

, whe

n ca

rryi

ng o

ut a

n ex

amin

atio

n of

all

the

mat

ters

of

fact

or

law

pro

duce

d by

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity,

to d

eter

min

ew

heth

er th

e re

ason

s re

lied

on b

y th

at a

utho

rity

as g

roun

ds to

pre

clud

e th

at d

iscl

osur

e ar

e w

ell

foun

ded

(see

, by

anal

ogy,

ZZ,

par

agra

phs 6

1 an

d 62

).

127

If

the

Cou

rts o

f the

Eur

opea

n U

nion

con

clud

e th

at th

ose

reas

ons

do n

ot p

recl

ude

disc

losu

re, a

tth

e ve

ry l

east

par

tial

disc

losu

re,

of t

he i

nfor

mat

ion

or e

vide

nce

conc

erne

d, i

t sh

all

give

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

the

oppo

rtuni

ty t

o m

ake

such

dis

clos

ure

to t

he p

erso

nco

ncer

ned.

If

that

aut

horit

y do

es n

ot p

erm

it th

e di

sclo

sure

of

that

info

rmat

ion

or e

vide

nce,

inw

hole

or i

n pa

rt, th

e C

ourts

of t

he E

urop

ean

Uni

on s

hall

then

und

erta

ke a

n ex

amin

atio

n of

the

law

fuln

ess o

f the

con

test

ed m

easu

re so

lely

on

the

basi

s of t

he m

ater

ial w

hich

has

bee

n di

sclo

sed

(see

, by

anal

ogy,

ZZ,

par

agra

ph 6

3).

128

O

n th

e ot

her h

and,

if it

turn

s ou

t tha

t the

reas

ons

relie

d on

by

the

com

pete

nt E

urop

ean

Uni

onau

thor

ity d

o in

deed

pre

clud

e th

e di

sclo

sure

to th

e pe

rson

con

cern

ed o

f inf

orm

atio

n or

evi

denc

epr

oduc

ed b

efor

e th

e C

ourts

of

the

Euro

pean

Uni

on,

it is

nec

essa

ry t

o st

rike

an a

ppro

pria

teba

lanc

e be

twee

n th

e re

quire

men

ts a

ttach

ed t

o th

e rig

ht t

o ef

fect

ive

judi

cial

pro

tect

ion,

in

parti

cula

r res

pect

for t

he p

rinci

ple

of a

n ad

vers

aria

l pro

cess

, and

thos

e flo

win

g fr

om th

e se

curit

yof

the

Euro

pean

Uni

on o

r its

Mem

ber S

tate

s or

the

cond

uct o

f the

ir in

tern

atio

nal r

elat

ions

(see

,by

ana

logy

, ZZ,

par

agra

ph 6

4).

129

In

ord

er to

stri

ke s

uch

a ba

lanc

e, it

is le

gitim

ate

to c

onsi

der p

ossi

bilit

ies

such

as

the

disc

losu

reof

a s

umm

ary

outli

ning

the

inf

orm

atio

n’s

cont

ent

or t

hat

of t

he e

vide

nce

in q

uest

ion.

Irre

spec

tive

of w

heth

er su

ch p

ossi

bilit

ies a

re ta

ken,

it is

for t

he C

ourts

of t

he E

urop

ean

Uni

on to

asse

ss w

heth

er a

nd t

o w

hat

the

exte

nt t

he f

ailu

re t

o di

sclo

se c

onfid

entia

l in

form

atio

n or

evid

ence

to th

e pe

rson

con

cern

ed a

nd h

is c

onse

quen

tial i

nabi

lity

to s

ubm

it hi

s ob

serv

atio

ns o

nth

em a

re s

uch

as to

aff

ect t

he p

roba

tive

valu

e of

the

conf

iden

tial e

vide

nce

(see

, by

anal

ogy,

ZZ,

para

grap

h 67

).

504

130

H

avin

g re

gard

to th

e pr

even

tive

natu

re o

f the

rest

rictiv

e m

easu

res

at is

sue,

if, i

n th

e co

urse

of

its r

evie

w o

f th

e la

wfu

lnes

s of

the

cont

este

d de

cisi

on, a

s de

fined

in p

arag

raph

s 11

7 to

129

of

this

jud

gmen

t, th

e C

ourts

of

the

Euro

pean

Uni

on c

onsi

der

that

, at

the

very

lea

st, o

ne o

f th

ere

ason

s m

entio

ned

in th

e su

mm

ary

prov

ided

by

the

Sanc

tions

Com

mitt

ee is

suf

ficie

ntly

det

aile

dan

d sp

ecifi

c, th

at it

is s

ubst

antia

ted

and

that

it c

onst

itute

s in

itse

lf su

ffic

ient

bas

is to

sup

port

that

deci

sion

, the

fact

that

the

sam

e ca

nnot

be

said

of o

ther

such

reas

ons c

anno

t jus

tify

the

annu

lmen

tof

that

dec

isio

n. In

the

abse

nce

of o

ne su

ch re

ason

, the

Cou

rts o

f the

Eur

opea

n U

nion

will

ann

ulth

e co

ntes

ted

deci

sion

.

131

S

uch

a ju

dici

al r

evie

w is

indi

spen

sabl

e to

ens

ure

a fa

ir ba

lanc

e be

twee

n th

e m

aint

enan

ce o

fin

tern

atio

nal p

eace

and

sec

urity

and

the

prot

ectio

n of

the

fund

amen

tal r

ight

s an

d fr

eedo

ms

ofth

e pe

rson

con

cern

ed (s

ee, t

o th

at e

ffec

t, E

and

F, p

arag

raph

57)

, tho

se b

eing

sha

red

valu

es o

fth

e U

N a

nd th

e Eu

rope

an U

nion

.

132

N

otw

ithst

andi

ng th

eir p

reve

ntiv

e na

ture

, the

rest

rictiv

e m

easu

res a

t iss

ue h

ave,

as r

egar

ds th

ose

right

s an

d fr

eedo

ms,

a su

bsta

ntia

l neg

ativ

e im

pact

rela

ted,

firs

t, to

the

serio

us d

isru

ptio

n of

the

wor

king

and

fam

ily li

fe o

f th

e pe

rson

con

cern

ed d

ue to

the

rest

rictio

ns o

n th

e ex

erci

se o

f hi

srig

ht to

pro

perty

whi

ch s

tem

from

thei

r gen

eral

sco

pe c

ombi

ned,

as

in th

is c

ase,

with

the

actu

aldu

ratio

n of

the

ir ap

plic

atio

n, a

nd,

on t

he o

ther

, th

e pu

blic

opp

robr

ium

and

sus

pici

on o

f th

atpe

rson

whi

ch th

ose

mea

sure

s pr

ovok

e (s

ee, t

o th

at e

ffec

t, th

e K

adi j

udgm

ent,

para

grap

hs 3

58,

369

and

375;

Fra

nce

v Pe

ople

’s M

ojah

edin

Org

aniz

atio

n of

Ira

n, p

arag

raph

64;

Al-A

qsa

vC

ounc

il an

d N

ethe

rlan

ds v

Al-A

qsa,

par

agra

ph 1

20,

and

judg

men

t of

28

May

201

3 in

Cas

eC

239/

12 P

Abd

ulra

him

v C

ounc

il an

d C

omm

issi

on, p

arag

raph

70

and

case

-law

cite

d).

133

S

uch

a re

view

is a

ll th

e m

ore

esse

ntia

l sin

ce, d

espi

te th

e im

prov

emen

ts a

dded

, in

parti

cula

raf

ter

the

adop

tion

of t

he c

onte

sted

reg

ulat

ion,

the

pro

cedu

re f

or d

elis

ting

and

ex o

ffici

o re

-ex

amin

atio

n at

UN

leve

l the

y do

not

pro

vide

to th

e pe

rson

who

se n

ame

is li

sted

on

the

Sanc

tions

Com

mitt

ee C

onso

lidat

ed L

ist

and,

sub

sequ

ently

, in

Ann

ex I

to

Reg

ulat

ion

No

881/

2002

, the

guar

ante

e of

eff

ectiv

e ju

dici

al p

rote

ctio

n, a

s th

e Eu

rope

an C

ourt

of H

uman

Rig

hts,

endo

rsin

gth

e as

sess

men

t of

the

Fede

ral S

upre

me

Cou

rt of

Sw

itzer

land

, has

rec

ently

sta

ted

in p

arag

raph

211

of i

ts j

udgm

ent

of 1

2 Se

ptem

ber

2012

, N

ada

v. S

witz

erla

nd (

No

1059

3/08

, no

t ye

tpu

blis

hed

in th

e Re

port

s of J

udgm

ents

and

Dec

isio

ns).

134

Th

e es

senc

e of

eff

ectiv

e ju

dici

al p

rote

ctio

n m

ust b

e th

at it

sho

uld

enab

le th

e pe

rson

con

cern

edto

obt

ain

a de

clar

atio

n fr

om a

cou

rt, b

y m

eans

of

a ju

dgm

ent o

rder

ing

annu

lmen

t whe

reby

the

cont

este

d m

easu

re i

s re

troac

tivel

y er

ased

fro

m t

he l

egal

ord

er a

nd i

s de

emed

nev

er t

o ha

veex

iste

d, th

at th

e lis

ting

of h

is n

ame,

or t

he c

ontin

ued

listin

g of

his

nam

e, o

n th

e lis

t con

cern

edw

as v

itiat

ed b

y ill

egal

ity, t

he re

cogn

ition

of w

hich

may

rees

tabl

ish

the

repu

tatio

n of

that

per

son

or c

onst

itute

for h

im a

form

of r

epar

atio

n fo

r the

non

-mat

eria

l har

m h

e ha

s su

ffer

ed (s

ee, t

o th

atef

fect

, Abd

ulra

him

v C

ounc

il an

d C

omm

issi

on, p

arag

raph

s 67

to 8

4).

–Th

e er

rors

of l

aw a

ffec

ting

the

judg

men

t und

er a

ppea

l

135

I

t fol

low

s fr

om th

e cr

iteria

ana

lyse

d ab

ove

that

, for

the

right

s of

the

defe

nce

and

the

right

toef

fect

ive

judi

cial

pro

tect

ion

to b

e re

spec

ted

first

, the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

mus

t(i)

dis

clos

e to

the

per

son

conc

erne

d th

e su

mm

ary

of r

easo

ns p

rovi

ded

by t

he S

anct

ions

Com

mitt

ee w

hich

is

the

basi

s fo

r lis

ting

or m

aint

aini

ng t

he l

istin

g of

tha

t pe

rson

’s n

ame

inA

nnex

I to

Reg

ulat

ion

No

881/

2002

, (ii)

ena

ble

him

eff

ectiv

ely

to m

ake

know

n hi

s obs

erva

tions

on th

at s

ubje

ct a

nd (i

ii) e

xam

ine,

car

eful

ly a

nd im

parti

ally

, whe

ther

the

reas

ons

alle

ged

are

wel

lfo

unde

d, in

the

light

of t

he o

bser

vatio

ns p

rese

nted

by

that

per

son

and

any

excu

lpat

ory

evid

ence

that

may

be

prod

uced

by

him

.

136

Se

cond

, res

pect

for t

hose

righ

ts im

plie

s th

at, i

n th

e ev

ent o

f a le

gal c

halle

nge,

the

Cou

rts o

f the

Euro

pean

Uni

on a

re to

rev

iew

, in

the

light

of

the

info

rmat

ion

and

evid

ence

whi

ch h

ave

been

disc

lose

d in

ter

alia

whe

ther

the

rea

sons

rel

ied

on i

n th

e su

mm

ary

prov

ided

by

the

Sanc

tions

Com

mitt

ee a

re s

uffic

ient

ly d

etai

led

and

spec

ific

and,

whe

re a

ppro

pria

te, w

heth

er th

e ac

cura

cyof

the

fact

s rel

atin

g to

the

reas

on c

once

rned

has

bee

n es

tabl

ishe

d.

137

O

n th

e ot

her

hand

, th

e fa

ct t

hat

the

com

pete

nt E

urop

ean

Uni

on a

utho

rity

does

not

mak

eac

cess

ible

to

the

pers

on c

once

rned

and

, su

bseq

uent

ly,

to t

he C

ourts

of

the

Euro

pean

Uni

onin

form

atio

n or

evi

denc

e w

hich

is

in t

he s

ole

poss

essi

on o

f th

e Sa

nctio

ns C

omm

ittee

or

the

Mem

ber

of th

e U

N c

once

rned

and

whi

ch r

elat

es to

the

sum

mar

y of

rea

sons

und

erpi

nnin

g th

ede

cisi

on a

t is

sue,

can

not,

as s

uch,

jus

tify

a fin

ding

tha

t th

ose

right

s ha

ve b

een

infr

inge

d.H

owev

er,

in s

uch

a si

tuat

ion,

the

Cou

rts o

f th

e Eu

rope

an U

nion

, w

hich

are

cal

led

upon

to

revi

ew w

heth

er th

e re

ason

s co

ntai

ned

in th

e su

mm

ary

prov

ided

by

the

Sanc

tions

Com

mitt

ee a

rew

ell

foun

ded

in f

act,

taki

ng i

nto

cons

ider

atio

n an

y ob

serv

atio

ns a

nd e

xcul

pato

ry e

vide

nce

prod

uced

by

the

pers

on c

once

rned

and

the

resp

onse

of t

he c

ompe

tent

Eur

opea

n U

nion

aut

horit

yto

tho

se o

bser

vatio

ns,

will

not

hav

e av

aila

ble

to i

t su

pple

men

tary

inf

orm

atio

n or

evi

denc

e.C

onse

quen

tly, i

f it i

s im

poss

ible

for t

he C

ourts

to fi

nd th

at th

ose

reas

ons a

re w

ell f

ound

ed, t

hose

reas

ons c

anno

t be

relie

d on

as t

he b

asis

for t

he c

onte

sted

list

ing

deci

sion

.

138

H

ence

, in

para

grap

hs 1

73, 1

81 to

184

, 188

and

192

to 1

94 o

f the

judg

men

t und

er a

ppea

l, th

eG

ener

al C

ourt

erre

d in

law

by

basi

ng it

s fin

ding

that

the

right

s of

the

defe

nce

and

the

right

toef

fect

ive

judi

cial

pro

tect

ion

and,

con

sequ

ently

, th

e pr

inci

ple

of p

ropo

rtion

ality

had

bee

nin

frin

ged,

on

the

failu

re o

f th

e C

omm

issi

on to

dis

clos

e to

Mr

Kad

i and

to th

e G

ener

al C

ourt

itsel

f th

e in

form

atio

n an

d ev

iden

ce u

nder

lyin

g th

e re

ason

s fo

r m

aint

aini

ng t

he l

istin

g of

Mr

Kad

i’s n

ame

in A

nnex

I to

Reg

ulat

ion

No

881/

2002

, whe

n, a

s is

app

aren

t fro

m p

arag

raph

s 81

and

95 o

f the

judg

men

t und

er a

ppea

l, th

e G

ener

al C

ourt

had

reco

gnis

ed, b

oth

in o

rder

to re

ject

Mr

Kad

i’s a

pplic

atio

n fo

r a

mea

sure

of

orga

nisa

tion

of p

roce

dure

in

orde

r to

sec

ure

that

disc

losu

re a

nd in

the

cour

se o

f th

e he

arin

g, th

at th

e C

omm

issi

on w

as n

ot in

pos

sess

ion

of th

atin

form

atio

n an

d ev

iden

ce.

139

C

ontra

ry to

wha

t is

stat

ed in

par

agra

phs

181,

183

and

184

of

the

judg

men

t und

er a

ppea

l, th

epa

ssag

es in

the

Kad

ijud

gmen

t to

whi

ch th

e G

ener

al C

ourt

refe

rred

in th

ose

para

grap

hs d

o no

tin

dica

te th

at th

e fa

ct th

at th

e pa

rty c

once

rned

and

the

Cou

rts o

f the

Eur

opea

n U

nion

do

not h

ave

acce

ss t

o in

form

atio

n or

evi

denc

e w

hich

the

com

pete

nt U

nion

aut

horit

y do

es n

ot h

ave

in i

tspo

sses

sion

con

stitu

tes,

as s

uch,

an

infr

inge

men

t of

the

rig

hts

of t

he d

efen

ce o

r th

e rig

ht t

oef

fect

ive

judi

cial

pro

tect

ion.

140

F

urth

er,

and

bear

ing

in m

ind

that

the

ass

essm

ent,

by t

he G

ener

al C

ourt,

of

whe

ther

the

stat

emen

t of r

easo

ns is

or i

s no

t suf

ficie

nt is

sub

ject

to re

view

by

the

Cou

rt on

an

appe

al (s

ee, t

oth

at e

ffec

t, C

ounc

ilv

Bam

ba, p

arag

raph

41

and

case

-law

cite

d), t

he G

ener

al C

ourt

erre

d in

law

by b

asin

g, a

s is

app

aren

t fro

m p

arag

raph

s 17

4, 1

77, 1

88 a

nd 1

92 to

194

of t

he ju

dgm

ent u

nder

appe

al, i

ts fi

ndin

g th

at th

ere

had

been

suc

h an

infr

inge

men

t on

the

fact

that

, in

its o

pini

on, t

heal

lega

tions

mad

e in

the

sum

mar

y of

reas

ons

prov

ided

by

the

Sanc

tions

Com

mitt

ee w

ere

vagu

ean

d la

ckin

g in

det

ail,

even

thou

gh s

uch

a ge

nera

l con

clus

ion

cann

ot b

e dr

awn

if ea

ch o

f th

ose

reas

ons i

s exa

min

ed se

para

tely

.

141

A

dmitt

edly

, as

the

Gen

eral

Cou

rt co

rrec

tly r

uled

by

endo

rsin

g, i

n pa

ragr

aph

177

of t

heju

dgm

ent u

nder

app

eal,

the

argu

men

t of M

r Kad

i set

out

in th

e fo

urth

inde

nt o

f par

agra

ph 1

57 o

fth

at j

udgm

ent,

the

last

of

the

reas

ons

stat

ed i

n th

e su

mm

ary

prov

ided

by

the

Sanc

tions

Com

mitt

ee, n

amel

y th

e al

lega

tion

that

Mr K

adi h

ad b

een

the

owne

r in

Alb

ania

of s

ever

al fi

rms

whi

ch f

unne

lled

mon

ey t

o ex

trem

ists

or

empl

oyed

tho

se e

xtre

mis

ts i

n po

sitio

ns w

here

the

yco

ntro

lled

the

fund

s of

thos

e fir

ms,

up to

fiv

e of

whi

ch r

ecei

ved

wor

king

cap

ital f

rom

Usa

ma

bin

Lade

n, i

s in

suff

icie

ntly

det

aile

d an

d sp

ecifi

c gi

ven

that

it

cont

ains

no

indi

catio

n of

the

iden

tity

of th

e fir

ms c

once

rned

, of w

hen

the

alle

ged

cond

uct t

ook

plac

e an

d of

the

iden

tity

of th

e‘e

xtre

mis

ts’ w

ho a

llege

dly

bene

fitte

d fr

om th

at c

ondu

ct.

142

O

n th

e ot

her h

and,

the

sam

e ca

nnot

be

said

of t

he o

ther

reas

ons s

tate

d in

the

sum

mar

y pr

ovid

edby

the

Sanc

tions

Com

mitt

ee.

505

143

T

he f

irst

reas

on,

base

d on

Mr

Kad

i’s a

ckno

wle

dgem

ent

that

he

is a

fou

ndin

g tru

stee

and

dire

cted

the

activ

ities

of t

he M

uwaf

aq F

ound

atio

n, w

hich

alw

ays o

pera

ted

unde

r the

um

brel

la o

fM

akht

ab a

lKhi

dam

at/A

l Kifa

h –

foun

ded

by, a

mon

g ot

hers

, was

Usa

ma

bin

Lade

n, w

hich

was

the

pred

eces

sor

to A

l-Qae

da a

nd w

hich

, fol

low

ing

the

diss

olut

ion

of M

akht

ab a

lKhi

dam

at/A

lK

ifah

in J

une

2001

, was

abs

orbe

d in

to A

lQae

da –

is s

uffic

ient

ly d

etai

led

and

spec

ific,

in th

at it

iden

tifie

s th

e en

tity

conc

erne

d an

d M

r Kad

i’s ro

le in

rela

tion

to it

, tog

ethe

r with

men

tion

of a

nal

lege

d lin

k be

twee

n th

at e

ntity

, on

the

one

hand

, and

Usa

ma

bin

Lade

n an

d A

l-Qae

da, o

n th

eot

her.

144

T

he s

econ

d re

ason

is b

ased

on

the

fact

that

, in

orde

r to

man

age

the

Euro

pean

off

ices

of

the

Muw

afaq

Fou

ndat

ion,

Mr K

adi a

ppoi

nted

, in

1992

, Mr A

l-Aya

di o

n th

e re

com

men

datio

n of

Mr

Jula

idan

, a f

inan

cier

who

had

fou

ght a

long

side

Usa

ma

bin

Lade

n in

Afg

hani

stan

in th

e 19

80s.

Whe

n he

was

app

oint

ed, M

r Al-A

yadi

was

said

to b

e on

e of

the

prin

cipa

l lea

ders

of t

he T

unis

ian

Isla

mic

Fro

nt a

nd to

be

oper

ated

und

er a

gree

men

ts w

ith U

sam

a bi

n La

den.

Mr A

l-Aya

di is

sai

dto

hav

e go

ne to

Afg

hani

stan

, in

the

early

199

0s, t

o re

ceiv

e pa

ram

ilita

ry tr

aini

ng th

ere,

then

, with

othe

r ind

ivid

uals

, to

Suda

n to

con

clud

e th

ere

with

Usa

ma

bin

Lade

n an

agr

eem

ent r

egar

ding

the

rece

ptio

n an

d tra

inin

g of

Tun

isia

ns a

nd, l

ater

, an

agre

emen

t reg

ardi

ng th

e re

cept

ion

of T

unis

ian

muj

ahid

in fr

om It

aly

by U

sam

a bi

n La

den’

s col

labo

rato

rs in

Bos

nia

and

Her

zego

vina

.

145

Th

at s

econ

d re

ason

is s

uffic

ient

ly d

etai

led

and

spec

ific,

in th

at it

con

tain

s th

e ne

cess

ary

deta

ilco

ncer

ning

the

tim

e an

d co

ntex

t of

the

app

oint

men

t in

que

stio

n an

d in

form

atio

n on

the

indi

vidu

als

invo

lved

in

the

alle

gatio

n th

at t

hat

appo

intm

ent

was

con

nect

ed w

ith U

sam

a bi

nLa

den.

146

T

he th

ird r

easo

n, w

hich

is b

ased

on

a st

atem

ent a

llege

dly

mad

e in

199

5 by

Mr

Tala

d Fu

adK

asse

m, t

he le

ader

of t

he A

l-Gam

a’at

al I

slam

iyya

, to

the

effe

ct th

at th

e M

uwaf

aq F

ound

atio

npr

ovid

ed lo

gist

ical

and

fina

ncia

l sup

port

to a

muj

ahid

in b

atta

lion

in B

osni

a an

d H

erze

govi

na, i

sba

sed

on t

he f

act

that

, tha

t Fo

unda

tion

was

sai

d to

be

invo

lved

, in

the

mid

199

0s, a

long

side

Usa

ma

bin

Lade

n, in

pro

vidi

ng fi

nanc

ial s

uppo

rt fo

r ter

roris

t act

iviti

es o

f tho

se m

ujah

idin

and

toha

ve a

ssis

ted

in th

e tra

ffic

king

of a

rms f

rom

Alb

ania

to B

osni

a an

d H

erze

govi

na.

147

Th

at th

ird re

ason

is s

uffic

ient

ly d

etai

led

and

spec

ific,

sin

ce it

iden

tifie

s th

e pe

rson

who

mad

eth

e st

atem

ent

conc

erne

d, t

he f

orm

s of

act

ivity

rep

orte

d, t

he t

ime

whe

n th

ey w

ere

alle

gedl

yca

rrie

d ou

t and

thei

r alle

ged

link

with

the

activ

ities

of U

sam

a bi

n La

den.

148

Th

e fo

urth

reas

on is

bas

ed o

n th

e fa

ct th

at M

r Kad

i was

one

of t

he m

ajor

sha

reho

lder

s in

the

Bos

nian

ban

k D

epos

itna

Ban

ka, n

ow c

lose

d, in

whi

ch M

r AlA

yadi

hel

d a

posi

tion

and

acte

d as

nom

inee

for M

r Kad

i, an

d w

here

pla

nnin

g se

ssio

ns fo

r an

atta

ck a

gain

st a

Uni

ted

Stat

es fa

cilit

yin

Sau

di A

rabi

a m

ight

hav

e ta

ken

plac

e.

149

C

ontra

ry to

wha

t is

stat

ed in

par

agra

ph 1

75 o

f the

judg

men

t und

er a

ppea

l, th

at fo

urth

reas

on is

suff

icie

ntly

det

aile

d an

d sp

ecifi

c, in

that

it id

entif

ies

the

finan

cial

inst

itutio

n th

roug

h w

hich

Mr

Kad

i alle

gedl

y co

ntrib

uted

to te

rror

ist a

ctiv

ities

and

the

natu

re o

f th

e al

lege

d te

rror

ist p

roje

ctco

ncer

ned.

The

circ

umst

ance

tha

t th

e in

dica

tion

that

it

was

in

that

ins

titut

ion

that

pla

nnin

gse

ssio

ns fo

r tha

t alle

ged

proj

ect t

ook

plac

e is

exp

ress

ed a

s a

poss

ibili

ty is

not

inco

mpa

tible

with

the

esse

ntia

l re

quire

men

ts o

f th

e du

ty t

o st

ate

reas

ons,

sinc

e th

e re

ason

s fo

r lis

ting

on a

Euro

pean

Uni

on li

st m

ay b

e ba

sed

on s

uspi

cion

s of

invo

lvem

ent i

n te

rror

ist a

ctiv

ities

, with

out

prej

udic

e to

the

dete

rmin

atio

n of

whe

ther

thos

e su

spic

ions

are

just

ified

.

150

A

lthou

gh it

em

erge

s fr

om p

arag

raph

s 13

8 to

140

and

142

to 1

49 o

f thi

s ju

dgm

ent t

hat e

rror

s of

law

wer

e m

ade

by t

he G

ener

al C

ourt,

it

is n

eces

sary

to

dete

rmin

e w

heth

er,

notw

ithst

andi

ngth

ose

erro

rs, t

he o

pera

tive

part

of th

e ju

dgm

ent u

nder

app

eal c

an b

e se

en to

be

wel

l fou

nded

on

lega

l gro

unds

oth

er th

an th

ose

mai

ntai

ned

by th

e G

ener

al C

ourt,

in w

hich

eve

nt a

n ap

peal

mus

tbe

dis

mis

sed

(see

, to

that

eff

ect,

judg

men

t of

19 A

pril

2012

in C

ase

C22

1/10

P A

rteg

odan

vC

omm

issi

on, p

arag

raph

94

and

case

law

cite

d).

–Th

e un

law

fuln

ess o

f the

con

test

ed re

gula

tion

151

It

mus

t be

obse

rved

, as r

egar

ds th

e fir

st re

ason

relie

d on

in th

e su

mm

ary

of re

ason

s pro

vide

d by

the

Sanc

tions

Com

mitt

ee a

nd r

efer

red

to i

n pa

ragr

aph

143

of t

his

judg

men

t, th

at,

in h

isco

mm

ents

of

10 N

ovem

ber

2008

sub

mitt

ed in

sup

port

of h

is a

ctio

n be

fore

the

Gen

eral

Cou

rt,M

r Kad

i, w

hile

ack

now

ledg

ing

that

he

had

been

a fo

undi

ng tr

uste

e of

the

Muw

afaq

Fou

ndat

ion,

deni

ed th

at it

had

pro

vide

d an

y su

ppor

t to

terr

oris

m a

nd th

at th

ere

was

any

link

bet

wee

n it

and

Mak

htab

alK

hida

mat

/Al

Kifa

h. A

ttach

ing

to t

hose

com

men

ts t

he M

uwaf

aq F

ound

atio

n’s

Con

stitu

tion

and

Dec

lara

tion

of T

rust

, Mr

Kad

i cl

aim

ed t

hat

the

obje

cts

and

purp

ose

of t

hat

foun

datio

n w

ere

excl

usiv

ely

char

itabl

e an

d hu

man

itaria

n, d

irect

ed m

ainl

y to

war

ds p

rovi

ding

relie

f to

peop

le su

ffer

ing

fam

ine

in th

e w

orld

, in

parti

cula

r in

the

Suda

n. W

hile

adm

ittin

g th

at h

ew

as i

nvol

ved

in i

nter

natio

nal

stra

tegi

c de

cisi

ons

of t

he M

uwaf

aq F

ound

atio

n, h

e de

nied

any

invo

lvem

ent i

n th

e da

yto

day

man

agem

ent o

f its

act

iviti

es a

cros

s th

e w

orld

, par

ticul

arly

in th

ere

crui

tmen

t of

loca

l sta

ff. H

e al

so d

ispu

ted

that

the

Muw

afaq

Fou

ndat

ion

join

ed A

l-Qae

da in

June

200

1, s

tatin

g in

par

ticul

ar, a

nd p

rovi

ding

doc

umen

ts in

sup

port

of h

is c

onte

ntio

n, th

at th

efo

unda

tion

had

ceas

ed o

pera

tions

by

1998

at t

he la

test

.

152

I

n its

rep

ly o

f 8

Dec

embe

r 20

08 to

the

com

men

ts o

f M

r K

adi,

also

sub

mitt

ed to

the

Gen

eral

Cou

rt, t

he C

omm

issi

on c

onte

nded

tha

t th

e fa

ct t

hat

som

e or

all

of t

he a

ctiv

ities

of

the

entit

yco

ncer

ned

had

ceas

ed d

id n

ot r

ule

out t

he p

ossi

bilit

y th

at th

at e

ntity

, hav

ing

cont

inuo

us le

gal

pers

onal

ity, h

ad jo

ined

Al-Q

aeda

.

153

I

t is

how

ever

cle

ar t

hat

no i

nfor

mat

ion

or e

vide

nce

has

been

pro

duce

d to

sub

stan

tiate

the

alle

gatio

ns o

f the

Muw

afaq

Fou

ndat

ion’

s in

volv

emen

t in

inte

rnat

iona

l ter

roris

m in

the

form

of

links

with

Mak

htab

alK

hida

mat

/Al K

ifah

and

Al-Q

aeda

. In

such

circ

umst

ance

s, th

e in

dica

tions

of th

e ro

le a

nd d

utie

s of

Mr

Kad

i in

rela

tion

to th

at f

ound

atio

n ar

e no

t suc

h as

to ju

stify

the

adop

tion,

at E

urop

ean

Uni

on le

vel,

of re

stric

tive

mea

sure

s aga

inst

him

.

154

A

s re

gard

s th

e se

cond

rea

son

relie

d on

in th

e su

mm

ary

of r

easo

ns p

rovi

ded

by th

e Sa

nctio

nsC

omm

ittee

and

refe

rred

to in

par

agra

ph 1

44 o

f thi

s ju

dgm

ent,

Mr K

adi,

in h

is c

omm

ents

of 1

0N

ovem

ber 2

008,

whi

le a

ccep

ting

that

he

had

recr

uite

d, in

199

2, o

n th

e re

com

men

datio

n of

Mr

Jula

idan

, Mr A

lAya

di to

hea

d th

e Eu

rope

an o

ffic

es o

f the

Muw

afaq

Fou

ndat

ion,

non

e th

e le

ssas

serte

d th

at th

e so

le a

im o

f tha

t fou

ndat

ion

in E

urop

e w

as to

pro

vide

sup

port

to re

fuge

es fr

omB

osni

a an

d C

roat

ia d

urin

g th

e B

alka

ns c

onfli

ct in

the

1990

s. M

r K

adi s

tate

d th

at M

r Ju

laid

an,

who

, at t

hat t

ime,

was

wor

king

with

him

on

a pr

ojec

t sup

porti

ng v

ocat

iona

l tra

inin

g fo

r ref

ugee

sfr

om C

roat

ia, h

ad re

com

men

ded

Mr A

l-Aya

di to

him

bec

ause

of h

is p

rofe

ssio

nal e

xper

ienc

e in

the

man

agem

ent o

f hum

anita

rian

wor

k an

d be

caus

e of

his

inte

grity

. Mr K

adi a

lso

clai

med

that

,in

199

2, h

e ha

d no

gro

unds

to

susp

ect

that

Mr

Al-A

yadi

and

Mr

Jula

idan

wer

e su

ppor

ting

terr

oris

t act

iviti

es, s

tatin

g th

at, i

n th

e 19

80s,

Usa

ma

bin

Lade

n w

as r

egar

ded

as a

n al

ly o

f th

eW

est a

gain

st th

e So

viet

Uni

on, t

hat o

nly

afte

r 199

6 w

as U

sam

a bi

n La

den

desc

ribed

as

a th

reat

to in

tern

atio

nal s

ecur

ity, a

nd th

at o

nly

in O

ctob

er 2

001

and

Sept

embe

r 200

2 re

spec

tivel

y w

ere

Mr A

lAya

di a

nd M

r Jul

aida

n lis

ted

on th

e Sa

nctio

ns C

omm

ittee

Con

solid

ated

Lis

t. La

stly

, Mr

Kad

i as

serts

tha

t he

had

no

know

ledg

e of

the

Tun

isia

n Is

lam

ic F

ront

and

the

alle

ged

links

betw

een

Mr A

lAya

di a

nd th

at o

rgan

isat

ion.

155

I

n its

rep

ly o

f 8

Dec

embe

r 20

08 to

Mr

Kad

i’s c

omm

ents

, the

Com

mis

sion

ass

erte

d th

at th

ere

crui

tmen

t of M

r Al-A

yadi

by

Mr K

adi o

n th

e re

com

men

datio

n of

Mr J

ulai

dan,

com

bine

d w

ithth

e fa

ct th

at M

r A

l-Aya

di a

nd M

r Ju

laid

an h

ad c

onta

cts

with

Usa

ma

bin

Lade

n, ju

stifi

ed th

eco

nclu

sion

tha

t th

ose

vario

us i

ndiv

idua

ls h

ad a

cted

in

conc

ert

or w

ere

part

of o

ne s

ingl

ene

twor

k. T

he C

omm

issi

on a

dded

that

, in

such

circ

umst

ance

s, it

was

of n

o co

nseq

uenc

e th

at M

rK

adi c

laim

ed to

hav

e be

en u

naw

are

of th

e al

lege

d lin

ks b

etw

een

Mr A

l-Aya

di a

nd th

e Tu

nisi

anIs

lam

ic F

ront

.

156

I

n th

at r

egar

d, w

hile

it is

con

ceiv

able

that

the

mat

eria

l rel

ied

on in

the

sum

mar

y of

rea

sons

prov

ided

by

the

Sanc

tions

Com

mitt

ee a

s reg

ards

the

recr

uitm

ent b

y M

r Kad

i, in

199

2, o

f Mr A

l-

506

Aya

di o

n th

e re

com

men

datio

n of

Mr J

ulai

dan

and

the

alle

ged

invo

lvem

ent o

f Mr A

lAya

di a

ndM

r Jul

aida

n in

terr

oris

t act

iviti

es in

ass

ocia

tion

with

Usa

ma

bin

Lade

n m

ight

hav

e be

en d

eem

edsu

ffic

ient

to ju

stify

the

initi

al in

clus

ion,

in 2

002,

of M

r Kad

i’s n

ame

in th

e lis

t of p

erso

ns in

the

anne

x to

Reg

ulat

ion

No

881/

2002

, it m

ust b

e ob

serv

ed th

at th

at s

ame

mat

eria

l, no

t oth

erw

ise

subs

tant

iate

d, c

anno

t ju

stify

mai

ntai

ning

, af

ter

2008

, th

e lis

ting

of M

r K

adi’s

nam

e in

tha

tre

gula

tion,

as

amen

ded

by t

he c

onte

sted

reg

ulat

ion.

Giv

en h

ow f

ar a

part

in t

ime

thos

e tw

om

easu

res

are,

that

mat

eria

l, w

hich

ref

ers

to 1

992,

is n

o lo

nger

suf

ficie

nt in

itse

lf to

just

ify, i

n20

08, m

aint

aini

ng, a

t Eu

rope

an U

nion

lev

el, t

he n

ame

of M

r K

adi

in t

he l

ist

of p

erso

ns a

nden

titie

s sub

ject

to th

e re

stric

tive

mea

sure

s at i

ssue

.

157

A

s re

gard

s th

e th

ird r

easo

n re

lied

on in

the

sum

mar

y of

rea

sons

pro

vide

d by

the

Sanc

tions

Com

mitt

ee a

nd re

ferr

ed to

in p

arag

raph

146

of t

his

judg

men

t, in

his

com

men

ts o

f 10

Nov

embe

r20

08, M

r Kad

i ass

erte

d th

at h

e ha

d no

kno

wle

dge

of M

r Tal

ad F

uad

Kas

sem

. He

also

stat

ed th

athe

had

nev

er p

rovi

ded

finan

cial

, log

istic

or a

ny o

ther

sup

port

of a

ny k

ind

to th

at in

divi

dual

, to

the

orga

nisa

tion

whi

ch h

e le

d or

to

muj

ahid

in i

n B

osni

a an

d H

erze

govi

na.

Mr

Kad

i al

som

aint

aine

d th

at,

so f

ar a

s he

was

aw

are,

nei

ther

the

Muw

afaq

Fou

ndat

ion

nor

any

of i

tsem

ploy

ees h

ad e

ver p

rovi

ded

any

such

supp

ort o

f tha

t kin

d.

158

I

n its

rep

ly o

f 8

Dec

embe

r 20

08 to

Mr

Kad

i’s c

omm

ents

, the

Com

mis

sion

ass

erte

d th

at th

est

atem

ent o

f Mr T

alad

Fua

d K

asse

m se

rved

as p

artia

l cor

robo

ratio

n of

the

fact

that

Mr K

adi h

adus

ed h

is p

ositi

on f

or p

urpo

ses

othe

r th

an o

rdin

ary

busi

ness

pur

pose

s. Th

e C

omm

issi

on a

dded

that

, in

suc

h ci

rcum

stan

ces,

it w

as i

rrel

evan

t w

heth

er o

r no

t M

r K

adi

knew

Mr

Tala

d Fu

adK

asse

m.

159

H

owev

er, n

o in

form

atio

n or

evi

denc

e ha

s be

en s

ubm

itted

whi

ch m

akes

it p

ossi

ble

to d

eter

min

eth

e ac

cura

cy o

f th

e st

atem

ent a

ttrib

uted

to M

r Ta

lad

Fuad

Kas

sem

in th

e su

mm

ary

of r

easo

nspr

ovid

ed b

y th

e Sa

nctio

ns C

omm

ittee

and

to a

sses

s, ha

ving

reg

ard,

in p

artic

ular

, to

Mr

Kad

i’scl

aim

that

he

had

no k

now

ledg

e of

Mr T

alad

Fua

d K

asse

m, t

he p

roba

tive

valu

e of

that

stat

emen

tin

res

pect

of

the

alle

gatio

ns t

hat

the

Muw

afaq

Fou

ndat

ion

was

pro

vidi

ng s

uppo

rt to

ter

roris

tac

tiviti

es

in

Bos

nia

and

Her

zego

vina

in

as

soci

atio

n w

ith

Usa

ma

bin

Lade

n.

In

such

circ

umst

ance

s, th

e in

dica

tion

rela

ting

to t

he s

tate

men

t of

Mr

Tala

d Fu

ad K

asse

m d

oes

not

cons

titut

e su

ffic

ient

bas

is t

o ju

stify

the

ado

ptio

n, a

t Eu

rope

an U

nion

lev

el,

of r

estri

ctiv

em

easu

res a

gain

st M

r Kad

i.

160

A

s re

gard

s th

e fo

urth

rea

son

relie

d on

in th

e su

mm

ary

of r

easo

ns p

rovi

ded

by th

e Sa

nctio

nsC

omm

ittee

and

refe

rred

to in

par

agra

ph 1

48 o

f thi

s ju

dgm

ent,

in h

is c

omm

ents

of 1

0 N

ovem

ber

2008

, Mr K

adi d

enie

d ev

er h

avin

g pr

ovid

ed fi

nanc

ial s

uppo

rt to

inte

rnat

iona

l ter

roris

m th

roug

hD

epos

itna

Ban

ka o

r th

roug

h an

y ot

her

entit

y. H

e ex

plai

ned

that

he

had

acqu

ired

an in

tere

st in

that

ban

k fo

r ent

irely

com

mer

cial

reas

ons h

avin

g re

gard

to th

e pr

ospe

cts o

f soc

ial a

nd e

cono

mic

reco

nstru

ctio

n in

Bos

nia

afte

r th

e D

ayto

n Pe

ace

Acc

ord

of 1

995,

and

that

he

had,

in o

rder

toco

mpl

y w

ith lo

cal l

aw, a

ppoi

nted

Mr A

l-Aya

di, a

Bos

nian

nat

iona

l, as

his

nom

inee

to h

old

his

shar

es in

that

ban

k. R

elyi

ng o

n re

ports

from

inte

rnat

iona

l firm

s of a

udito

rs re

latin

g to

the

perio

dfr

om 1

999

until

200

2 an

d on

the

repo

rt of

a f

inan

cial

ana

lyst

eng

aged

by

a Sw

iss

mag

istra

teco

verin

g th

e pe

riod

from

199

7 to

200

1, h

e cl

aim

ed t

hat

none

of

thos

e re

ports

sug

gest

tha

tD

epos

itna

Ban

ka w

as i

nvol

ved

in a

ny w

ay i

n th

e fu

ndin

g or

sup

port

of t

erro

rism

. M

r K

adi

disp

uted

that

that

ban

k ha

d be

en c

lose

d, e

xpla

inin

g, a

nd p

rovi

ding

sup

porti

ng d

ocum

ents

, tha

t it

had

mer

ged

with

ano

ther

ban

k in

200

2. F

urth

er, h

e pr

oduc

ed d

ocum

ents

rela

ting

to a

n oc

casi

on,

in 1

999,

whe

n U

nite

d St

ates

aut

horit

ies,

the

man

ager

of

Dep

ositn

a B

anka

and

the

pol

itica

lau

thor

ities

in

Bos

nia

wer

e in

con

tact

to

disc

uss

lega

l is

sues

rel

atin

g to

the

ban

king

sec

tor

inB

osni

a an

d H

erze

govi

na. L

astly

, Mr K

adi c

laim

ed th

at if

the

Saud

i Ara

bian

aut

horit

ies

had

had

grou

nds

to s

uspe

ct th

at a

ny a

ttack

s w

ere

plan

ned,

with

in th

e D

epos

itna

Ban

ka, a

gain

st U

nite

dSt

ates

int

eres

ts i

n Sa

udi

Ara

bia,

the

y w

ould

ine

vita

bly

have

que

stio

ned

him

, as

the

Sau

diA

rabi

an o

wne

r of

tha

t in

stitu

tion.

Acc

ordi

ng t

o M

r K

adi

the

Saud

i A

rabi

an a

utho

ritie

s ha

vene

ver d

one

so.

161

I

n its

rep

ly o

f 8

Dec

embe

r 20

08 to

Mr

Kad

i’s c

omm

ents

, the

Com

mis

sion

ass

erte

d th

at th

ein

dica

tions

that

Dep

ositn

a B

anka

was

use

d fo

r the

pla

nnin

g of

an

atta

ck in

Sau

di A

rabi

a se

rve

aspa

rtial

cor

robo

ratio

n th

at M

r K

adi

had

used

his

pos

ition

for

pur

pose

s ot

her

than

ord

inar

ybu

sine

ss p

urpo

ses.

162

H

owev

er,

sinc

e no

inf

orm

atio

n or

evi

denc

e ha

s be

en p

rodu

ced

to s

uppo

rt th

e cl

aim

tha

tpl

anni

ng s

essi

ons

mig

ht h

ave

take

n pl

ace

in th

e pr

emis

es o

f Dep

ozitn

a B

anka

for t

erro

rist a

cts

in a

ssoc

iatio

n w

ith A

lQae

da o

r Usa

ma

bin

Lade

n, th

e in

dica

tions

rela

ting

to th

e as

soci

atio

n of

Mr

Kad

i w

ith t

hat

bank

are

ins

uffic

ient

to

sust

ain

the

adop

tion,

at

Euro

pean

Uni

on l

evel

, of

rest

rictiv

e m

easu

res a

gain

st h

im.

163

I

t fo

llow

s, fr

om t

he a

naly

sis

set

out

in p

arag

raph

141

and

par

agra

phs

151

to 1

62 o

f th

isju

dgm

ent,

that

non

e of

the

alle

gatio

ns p

rese

nted

aga

inst

Mr

Kad

i in

the

sum

mar

y pr

ovid

ed b

yth

e Sa

nctio

ns C

omm

ittee

are

suc

h as

to

just

ify t

he a

dopt

ion,

at

Euro

pean

Uni

on l

evel

, of

rest

rictiv

e m

easu

res

agai

nst

him

, ei

ther

bec

ause

the

sta

tem

ent

of r

easo

ns i

s in

suff

icie

nt,

orbe

caus

e in

form

atio

n or

evi

denc

e w

hich

mig

ht s

ubst

antia

te th

e re

ason

con

cern

ed, i

n th

e fa

ce o

fde

taile

d re

butta

ls su

bmitt

ed b

y th

e pa

rty c

once

rned

, is l

acki

ng.

164

In

thos

e ci

rcum

stan

ces,

the

erro

rs o

f law

, ide

ntifi

ed in

par

agra

phs 1

38 to

140

and

142

to 1

49 o

fth

is ju

dgm

ent,

whi

ch v

itiat

e th

e ju

dgm

ent u

nder

app

eal a

re n

ot s

uch

as to

aff

ect t

he v

alid

ity o

fth

at ju

dgm

ent,

give

n th

at it

s op

erat

ive

part,

whi

ch a

nnul

s th

e co

ntes

ted

regu

latio

n in

so

far a

s it

conc

erns

Mr K

adi,

is w

ell f

ound

ed o

n th

e le

gal g

roun

ds st

ated

in th

e pr

eced

ing

para

grap

h.

165

C

onse

quen

tly, t

he a

ppea

ls m

ust b

e di

smis

sed.

Cos

ts

166

I

n ac

cord

ance

with

Arti

cle

184(

2) o

f th

e R

ules

of

Proc

edur

e, w

here

the

appe

al is

unf

ound

ed,

the

Cou

rt is

to m

ake

a de

cisi

on a

s to

cos

ts. U

nder

Arti

cle

138(

1) o

f tho

se R

ules

, whi

ch a

pply

toth

e pr

oced

ure

on a

ppea

l by

virtu

e of

Arti

cle

184(

1) o

f tho

se R

ules

, an

unsu

cces

sful

par

ty is

to b

eor

dere

d to

pay

the

cost

s if

they

hav

e be

en a

pplie

d fo

r in

the

succ

essf

ul p

arty

’s p

lead

ings

. Sin

ceth

e ap

pella

nts

have

bee

n un

succ

essf

ul a

nd M

r Kad

i has

app

lied

for c

osts

, the

y m

ust b

e or

dere

dto

pay

the

cost

s. W

here

an

inte

rven

er a

t firs

t ins

tanc

e, w

hich

has

not

itse

lf br

ough

t an

appe

al,

parti

cipa

tes

in th

e pr

ocee

ding

s be

fore

the

Cou

rt, th

e C

ourt

may

, und

er A

rticl

e 18

4(4)

of

thos

eR

ules

, dec

ide

that

it is

to b

ear i

ts o

wn

cost

s. A

rticl

e 14

0(1)

of t

hose

Rul

es p

rovi

des t

hat M

embe

rSt

ates

whi

ch h

ave

inte

rven

ed in

the

proc

eedi

ngs a

re to

bea

r the

ir ow

n co

sts.

167

Si

nce

the

Com

mis

sion

, the

Cou

ncil

and

the

Uni

ted

Kin

gdom

hav

e be

en u

nsuc

cess

ful,

they

mus

tbe

ord

ered

, in

acco

rdan

ce w

ith M

r Kad

i’s p

lead

ings

, to

pay

the

cost

s.

168

Th

e R

epub

lic o

f Bul

garia

, the

Cze

ch R

epub

lic, t

he K

ingd

om o

f Den

mar

k, Ir

elan

d, th

e K

ingd

omof

Spa

in, t

he F

renc

h R

epub

lic, t

he It

alia

n R

epub

lic, t

he G

rand

Duc

hy o

f Lux

embo

urg,

Hun

gary

,th

e K

ingd

om o

f the

Net

herla

nds,

the

Rep

ublic

of A

ustri

a, th

e Sl

ovak

Rep

ublic

and

the

Rep

ublic

of F

inla

nd, a

s int

erve

ners

, are

to b

ear t

heir

own

cost

s.

On

thos

e gr

ound

s, th

e C

ourt

(Gra

nd C

ham

ber)

:

1.D

ism

isse

s the

app

eals

;

2.O

rder

s th

e E

urop

ean

Com

mis

sion

, th

e C

ounc

il of

the

Eur

opea

n U

nion

and

the

Uni

ted

Kin

gdom

of G

reat

Bri

tain

and

Nor

ther

n Ir

elan

d to

pay

the

cost

s;

3.O

rder

s th

e R

epub

lic o

f B

ulga

ria,

the

Cze

ch R

epub

lic, t

he K

ingd

om o

f D

enm

ark,

Irel

and,

the

Kin

gdom

of S

pain

, the

Fre

nch

Rep

ublic

, the

Ital

ian

Rep

ublic

, the

Gra

nd

507

Duc

hy o

f L

uxem

bour

g, H

unga

ry, t

he K

ingd

om o

f th

e N

ethe

rlan

ds, t

he R

epub

lic o

fA

ustr

ia, t

he S

lova

k R

epub

lic a

nd th

e R

epub

lic o

f Fin

land

to b

ear

thei

r ow

n co

sts.

[Sig

natu

res]

* La

ngua

ge o

f the

cas

e: E

nglis

h.

508

International Criminal Tribunal for the former Yugoslavia

Prosecutor v. Duško Tadić a/k/a "Dule"

Decision on the Defence Motion for Interlocutory Appeal on

Jurisdiction of 2 October 1995 [Appeals Chamber]

Case No. IT-94-1-A, paras. 1-12, 26-48

Bef

ore:

Judg

e C

asse

se, P

resi

ding

Ju

dge

Li

Judg

e D

esch

ênes

Ju

dge

Abi

-Saa

b Ju

dge

Sidh

wa

Reg

istr

ar:

Mrs

. Dor

othe

e de

Sam

payo

Gar

rido

-Nijg

h

Dec

isio

n of

: 2

octo

bre

1995

PRO

SEC

UT

OR

v.

DU

SKO

TA

DIC

a/k

/a "

DU

LE

"

____

____

____

____

____

____

____

___

DE

CIS

ION

ON

TH

E D

EFE

NC

E M

OT

ION

FO

R

INT

ER

LO

CU

TO

RY

APP

EA

L O

N J

UR

ISD

ICT

ION

____

____

____

____

____

____

____

___

The

Off

ice

of th

e Pr

osec

utor

:

Mr.

Ric

hard

Gol

dsto

ne, P

rose

cuto

r M

r. G

rant

Nie

man

n M

r. A

lan

Tie

ger

M

r. M

icha

el K

eega

n M

s. B

rend

a H

ollis

Cou

nsel

for

the

Acc

used

:

Mr.

Mic

hail

Wla

dim

irof

f M

r. A

lpho

ns O

rie

Mr.

Mila

n V

ujin

M

r. K

rsta

n Si

mic

I. IN

TR

OD

UC

TIO

N

A. T

he J

udge

men

t Und

er A

ppea

l

1.Th

e A

ppea

ls C

ham

ber o

f the

Inte

rnat

iona

l Trib

unal

for t

he P

rose

cutio

n of

Per

sons

Res

pons

ible

for

Serio

us V

iola

tions

of I

nter

natio

nal H

uman

itaria

n La

w C

omm

itted

in th

e Te

rrito

ry o

f For

mer

Yug

osla

via

sinc

e 19

91 (h

erei

nafte

r "In

tern

atio

nal T

ribun

al")

is se

ized

of a

n ap

peal

lodg

ed b

y A

ppel

lant

the

Def

ence

ag

ains

t a ju

dgem

ent r

ende

red

by th

e Tr

ial C

ham

ber I

I on

10 A

ugus

t 199

5. B

y th

at ju

dgem

ent,

App

ella

nt's

mot

ion

chal

len g

ing

the

juris

dict

ion

of th

e In

tern

atio

nal T

ribun

al w

as d

enie

d.

2.B

efor

e th

e Tr

ial C

ham

ber,

App

ella

nt h

ad la

unch

ed a

thre

e-pr

onge

d at

tack

:

a)ill

egal

foun

datio

n of

the

Inte

rnat

iona

l Trib

unal

;b)

wro

ngfu

l prim

acy

of th

e In

tern

atio

nal T

ribun

al o

ver n

atio

nal c

ourts

;c)

lack

of j

uris

dict

ion

ratio

ne m

ater

iae.

The

judg

emen

t und

er a

ppea

l den

ied

the

relie

f sou

ght b

y A

ppel

lant

; in

its e

ssen

tial p

rovi

sion

s, it

read

s as

follo

ws:

"TH

E TR

IAL

CH

AM

BER

[. .

. ]H

EREB

Y D

ISM

ISSE

S th

e m

otio

n in

sofa

r as i

t rel

ates

to p

rimac

y ju

risdi

ctio

n an

d su

bjec

t-mat

ter j

uris

dict

ion

unde

r Arti

cles

2, 3

and

5 a

nd o

ther

wis

e de

cide

s it t

o be

in

com

pete

nt in

sofa

r as i

t cha

lleng

es th

e es

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

H

EREB

Y D

ENIE

S th

e re

lief s

ough

t by

the

Def

ence

in it

s Mot

ion

on th

e Ju

risdi

ctio

n of

the

Trib

unal

." (D

ecis

ion

on th

e D

efen

ce M

otio

n on

Juris

dict

ion

in th

e Tr

ial C

ham

ber o

f the

In

tern

atio

nal T

ribun

al, 1

0 A

ugus

t 199

5 (C

ase

No.

IT-9

4-1-

T), a

t 33

(her

eina

fter D

ecis

ion

at

Tria

l).)

App

ella

nt n

ow a

llege

s err

or o

f law

on

the

part

of th

e Tr

ial C

ham

ber.

3.A

s can

read

ily b

e se

en fr

om th

e op

erat

ive

part

of th

e ju

dgem

ent,

the

Tria

l Cha

mbe

r too

k a

diff

eren

tap

proa

ch to

the

first

gro

und

of c

onte

stat

ion,

on

whi

ch it

refu

sed

to ru

le, f

rom

the

rout

e it

follo

wed

with

re

spec

t to

the

last

two

grou

nds,

whi

ch it

dis

mis

sed.

Thi

s dis

tinct

ion

ough

t to

be o

bser

ved

and

will

be

refe

rred

to b

elow

. Fr

om th

e de

velo

pmen

t of t

he p

roce

edin

gs, h

owev

er, i

t now

app

ears

that

the

ques

tion

of ju

risdi

ctio

n ha

s ac

quire

d, b

efor

e th

is C

ham

ber,

a tw

o-tie

r dim

ensi

on:

a)th

e ju

risdi

ctio

n of

the

App

eals

Cha

mbe

r to

hear

this

app

eal;

b)th

e ju

risdi

ctio

n of

the

Inte

rnat

iona

l Trib

unal

to h

ear t

his c

ase

on th

e m

erits

.

Bef

ore

anyt

hing

mor

e is

said

on

the

mer

its, c

onsi

dera

tion

mus

t be

give

n to

the

prel

imin

ary

ques

tion:

w

heth

er th

e A

ppea

ls C

ham

ber i

s end

owed

with

the

juris

dict

ion

to h

ear t

his a

ppea

l at a

ll.

B. J

uris

dict

ion

Of T

he A

ppea

ls C

ham

ber

4.A

rticl

e 25

of t

he S

tatu

te o

f the

Inte

rnat

iona

l Trib

unal

(Sta

tute

of t

he In

tern

atio

nal T

ribun

al (o

rigin

ally

publ

ishe

d as

ann

ex to

the

Repo

rt o

f the

Sec

reta

ry-G

ener

al p

ursu

ant t

o pa

ragr

aph

2 of

Sec

urity

Cou

ncil

reso

lutio

n 80

8 (1

993)

(U.N

. Doc

. S/2

5704

) and

ado

pted

pur

suan

t to

Secu

rity

Cou

ncil

reso

lutio

n 82

7 (2

5 M

ay 1

993)

(her

eina

fter S

tatu

te o

f the

Inte

rnat

iona

l Tri

buna

l)) a

dopt

ed b

y th

e U

nite

d N

atio

ns S

ecur

ity

Cou

ncil

open

s up

the

poss

ibili

ty o

f app

ella

te p

roce

edin

gs w

ithin

the

Inte

rnat

iona

l Trib

unal

. Thi

s pr

ovis

ion

stan

ds in

con

form

ity w

ith th

e In

tern

atio

nal C

oven

ant o

n C

ivil

and

Polit

ical

Rig

hts w

hich

insi

sts

upon

a ri

ght o

f app

eal (

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s, 19

Dec

embe

r 196

6, a

rt. 1

4,

para

. 5, G

.A. R

es. 2

200

(XX

I), 2

1 U

.N. G

AO

R, S

upp.

(No.

16)

52,

U.N

. Doc

. A/6

316

(196

6) (h

erei

nafte

r IC

CPR

)).

As t

he P

rose

cuto

r of t

he In

tern

atio

nal T

ribun

al h

as a

ckno

wle

dged

at t

he h

earin

g of

7 a

nd 8

Sep

tem

ber

1995

, the

Sta

tute

is g

ener

al in

nat

ure

and

the

Secu

rity

Cou

ncil

sure

ly e

xpec

ted

that

it w

ould

be

supp

lem

ente

d, w

here

adv

isab

le, b

y th

e ru

les w

hich

the

Judg

es w

ere

man

date

d to

ado

pt, e

spec

ially

for

"Tri

als a

nd A

ppea

ls"

(Art.

15).

The

Judg

es d

id in

deed

ado

pt su

ch ru

les:

Par

t Sev

en o

f the

Rul

es o

f Pr

oced

ure

and

Evid

ence

(Rul

es o

f Pro

cedu

re a

nd E

vide

nce,

107

-08

(ado

pted

on

11 F

ebru

ary

1994

pu

rsua

nt to

Arti

cle

15 o

f the

Sta

tute

of t

he In

tern

atio

nal T

ribun

al, a

s am

ende

d (I

T/32

/Rev

. 5))

(her

eina

fter

Rule

s of P

roce

dure

)).

444

5.H

owev

er, R

ule

73 h

ad a

lread

y pr

ovid

ed fo

r "Pr

elim

inar

y M

otio

ns b

y Ac

cuse

d", i

nclu

ding

five

head

ings

. The

firs

t one

is: "

obje

ctio

ns b

ased

on

lack

of j

uris

dict

ion.

" Rul

e 72

(B) t

hen

prov

ides

:

"The

Tria

l Cha

mbe

r sha

ll di

spos

e of

pre

limin

ary

mot

ions

in li

min

e lit

is a

nd w

ithou

t int

erlo

cuto

ry

appe

al, s

ave

in th

e ca

se o

f dis

mis

sal o

f an

obje

ctio

n ba

sed

on la

ck o

f jur

isdi

ctio

n."

(Rul

es o

f Pr

oced

ure,

Rul

e 72

(B).)

This

is e

asily

und

erst

anda

ble

and

the

Pros

ecut

or p

ut it

cle

arly

in h

is a

rgum

ent:

"I w

ould

subm

it, fi

rstly

, tha

t cle

arly

with

in th

e fo

ur c

orne

rs o

f the

Sta

tute

the

Judg

es m

ust b

e fr

ee

to c

omm

ent,

to su

pple

men

t, to

mak

e ru

les n

ot in

cons

iste

nt a

nd, t

o th

e ex

tent

I m

entio

ned

yest

erda

y,

it w

ould

als

o en

title

the

Judg

es to

que

stio

n th

e St

atut

e an

d to

ass

ure

them

selv

es th

at th

ey c

an d

o ju

stic

e in

the

inte

rnat

iona

l con

text

ope

ratin

g un

der t

he S

tatu

te. T

here

is n

o qu

estio

n ab

out t

hat.

Rul

e 72

goe

s no

furth

er, i

n m

y su

bmis

sion

, tha

n pr

ovid

ing

a us

eful

veh

icle

for a

chie

ving

- re

ally

it

is a

pro

visi

on w

hich

ach

ieve

s jus

tice

beca

use

but f

or it

, one

cou

ld g

o th

roug

h, a

s Mr.

Orie

m

entio

ned

in a

diff

eren

t con

text

, adm

itted

ly, y

este

rday

, one

cou

ld h

ave

the

unfo

rtuna

te p

ositi

on o

f ha

ving

mon

ths o

f tria

l, of

the

Trib

unal

hea

ring

witn

esse

s onl

y to

find

out

at t

he a

ppea

l sta

ge th

at, i

n fa

ct, t

here

shou

ld n

ot h

ave

been

a tr

ial a

t all

beca

use

of so

me

lack

of j

uris

dict

ion

for w

hate

ver

reas

on.

So it

is re

ally

a ru

le o

f fai

rnes

s for

bot

h si

des i

n a

way

, but

par

ticul

arly

in fa

vour

of t

he a

ccus

ed in

or

der t

hat s

omeb

ody

shou

ld n

ot b

e pu

t to

the

terr

ible

inco

nven

ienc

e of

hav

ing

to si

t thr

ough

a tr

ial

whi

ch sh

ould

not

take

pla

ce. S

o, it

is re

ally

like

man

y of

the

rule

s tha

t You

r Hon

ours

and

you

r co

lleag

ues m

ade

with

rega

rd to

rule

s of e

vide

nce

and

proc

edur

e. It

is to

an

exte

nt su

pple

men

ting

the

Stat

ute,

but

that

is w

hat w

as in

tend

ed w

hen

the

Secu

rity

Cou

ncil

gave

to th

e Ju

dges

the

pow

er

to m

ake

rule

s. Th

ey d

id it

kno

win

g th

at th

ere

wer

e sp

aces

in th

e St

atut

e th

at w

ould

nee

d to

be

fille

d by

hav

ing

rule

s of p

roce

dure

and

evi

denc

e.

[. . .

]

So, i

t is r

eally

a ru

le o

f con

veni

ence

and

, if I

may

say

so, a

sens

ible

rule

in th

e in

tere

sts o

f jus

tice,

in

the

inte

rest

s of b

oth

side

s and

in th

e in

tere

sts o

f the

Trib

unal

as a

who

le."

(Tra

nscr

ipt o

f the

H

earin

g of

the

Inte

rlocu

tory

App

eal o

n Ju

risdi

ctio

n, 8

Sep

tem

ber 1

995,

at 4

(her

eina

fter A

ppea

l Tr

ansc

ript).

)

The

ques

tion

has,

how

ever

, bee

n pu

t whe

ther

the

thre

e gr

ound

s rel

ied

upon

by

App

ella

nt re

ally

go

to th

e ju

risdi

ctio

n of

the

Inte

rnat

iona

l Trib

unal

, in

whi

ch c

ase

only

, cou

ld th

ey fo

rm th

e ba

sis o

f an

inte

rlocu

tory

app

eal.

Mor

e sp

ecifi

cally

, can

the

lega

lity

of th

e fo

unda

tion

of th

e In

tern

atio

nal T

ribun

al

and

its p

rimac

y be

use

d as

the

build

ing

bric

ks o

f suc

h an

app

eal?

In h

is B

rief i

n ap

peal

, at p

age

2, th

e Pr

osec

utor

has

arg

ued

in su

ppor

t of a

neg

ativ

e an

swer

, bas

ed o

n th

e di

stin

ctio

n be

twee

n th

e va

lidity

of t

he c

reat

ion

of th

e In

tern

atio

nal T

ribun

al a

nd it

s jur

isdi

ctio

n. T

he

seco

nd a

spec

t alo

ne w

ould

be

appe

alab

le w

hils

t the

lega

lity

and

prim

acy

of th

e In

tern

atio

nal T

ribun

al

coul

d no

t be

chal

leng

ed in

app

eal.

(Res

pons

e to

the

Mot

ion

of th

e D

efen

ce o

n th

e Ju

risdi

ctio

n of

the

Trib

unal

bef

ore

the

Tria

l Cha

mbe

r of t

he In

tern

atio

nal T

ribun

al, 7

July

199

5 (C

ase

No.

IT-9

4-1-

T), a

t 4

(her

eina

fter P

rose

cuto

r Tri

al B

rief

).)

6.Th

is n

arro

w in

terp

reta

tion

of th

e co

ncep

t of j

uris

dict

ion,

whi

ch h

as b

een

advo

cate

d by

the

Pros

ecut

oran

d on

e am

icus

cur

iae,

falls

foul

of a

mod

ern

visi

on o

f the

adm

inis

tratio

n of

just

ice.

Suc

h a

fund

amen

tal

mat

ter a

s the

juris

dict

ion

of th

e In

tern

atio

nal T

ribun

al sh

ould

not

be

kept

for d

ecis

ion

at th

e en

d of

a

pote

ntia

lly le

ngth

y, e

mot

iona

l and

exp

ensi

ve tr

ial.

All

the

grou

nds o

f con

test

atio

n re

lied

upon

by

App

ella

nt re

sult,

in fi

nal a

naly

sis,

in a

n as

sess

men

t of t

he le

gal c

apab

ility

of t

he In

tern

atio

nal T

ribun

al to

try

his

cas

e. W

hat i

s thi

s, if

not i

n th

e en

d a

ques

tion

of ju

risdi

ctio

n? A

nd w

hat b

ody

is le

gally

aut

horiz

ed

to p

ass o

n th

at is

sue,

if n

ot th

e A

ppea

ls C

ham

ber o

f the

Inte

rnat

iona

l Trib

unal

? In

deed

- th

is is

by

no

mea

ns c

oncl

usiv

e, b

ut in

tere

stin

g ne

verth

eles

s: w

ere

not t

hose

que

stio

ns to

be

deal

t with

in li

min

e lit

is,

they

cou

ld o

bvio

usly

be

rais

ed o

n an

app

eal o

n th

e m

erits

. Wou

ld th

e hi

gher

inte

rest

of j

ustic

e be

serv

ed

by a

dec

isio

n in

favo

ur o

f the

acc

used

, afte

r the

latte

r had

und

ergo

ne w

hat w

ould

then

hav

e to

be

bran

ded

as a

n un

war

rant

ed tr

ial.

Afte

r all,

in a

cou

rt of

law

, com

mon

sens

e ou

ght t

o be

hon

oure

d no

t onl

y w

hen

fact

s are

wei

ghed

, but

equ

ally

whe

n la

ws a

re su

rvey

ed a

nd th

e pr

oper

rule

is se

lect

ed. I

n th

e pr

esen

t cas

e,

the

juris

dict

ion

of th

is C

ham

ber t

o he

ar a

nd d

ispo

se o

f App

ella

nt's

inte

rlocu

tory

app

eal i

s ind

ispu

tabl

e.

C. G

roun

ds O

f App

eal

7.Th

e A

ppea

ls C

ham

ber h

as a

ccor

ding

ly h

eard

the

parti

es o

n al

l poi

nts r

aise

d in

the

writ

ten

plea

ding

s. It

has a

lso

read

the

amic

us c

uria

e br

iefs

subm

itted

by

Juri

stes

sans

Fro

ntiè

res a

nd th

e G

over

nmen

t of t

he

Uni

ted

Stat

es o

f Am

eric

a, to

who

m it

exp

ress

es it

s gra

titud

e.

8.A

ppel

lant

has

subm

itted

two

succ

essi

ve B

riefs

in a

ppea

l. Th

e se

cond

Brie

f was

late

but

, in

the

abse

nce

of a

ny o

bjec

tion

by th

e Pr

osec

utor

, the

App

eals

Cha

mbe

r gra

nted

the

exte

nsio

n of

tim

e re

ques

ted

by

App

ella

nt u

nder

Rul

e 11

6.

The

seco

nd B

rief t

ends

ess

entia

lly to

bol

ster

the

argu

men

ts d

evel

oped

by

App

ella

nt in

his

orig

inal

Brie

f. Th

ey a

re o

ffer

ed u

nder

the

follo

win

g he

adin

gs:

a)un

law

ful e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

;b)

unju

stifi

ed p

rimac

y of

the

Inte

rnat

iona

l Trib

unal

ove

r com

pete

nt d

omes

tic c

ourts

;c)

lack

of s

ubje

ct-m

atte

r jur

isdi

ctio

n.

The

App

eals

Cha

mbe

r pro

pose

s to

exam

ine

each

of t

he g

roun

ds o

f app

eal i

n th

e or

der i

n w

hich

they

are

ra

ised

by

App

ella

nt.

II.U

NL

AW

FUL

EST

AB

LIS

HM

EN

T O

F T

HE

INT

ER

NA

TIO

NA

L T

RIB

UN

AL

9.Th

e fir

st g

roun

d of

app

eal a

ttack

s the

val

idity

of t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

.

A. M

eani

ng O

f Jur

isdi

ctio

n

10.I

n di

scus

sing

the

Def

ence

ple

a to

the

juris

dict

ion

of th

e In

tern

atio

nal T

ribun

al o

n gr

ound

s of

inva

lidity

of i

ts e

stab

lishm

ent b

y th

e Se

curit

y C

ounc

il, th

e Tr

ial C

ham

ber d

ecla

red:

"The

re a

re c

lear

ly e

noug

h m

atte

rs o

f jur

isdi

ctio

n w

hich

are

ope

n to

det

erm

inat

ion

by th

e In

tern

atio

nal T

ribun

al, q

uest

ions

of t

ime,

pla

ce a

nd n

atur

e of

an

offe

nce

char

ged.

The

se a

re

prop

erly

des

crib

ed a

s jur

isdi

ctio

nal,

whe

reas

the

valid

ity o

f the

cre

atio

n of

the

Inte

rnat

iona

l Tr

ibun

al is

not

trul

y a

mat

ter o

f jur

isdi

ctio

n bu

t rat

her t

he la

wfu

lnes

s of i

ts c

reat

ion

[. .

.]" (D

ecis

ion

at T

rial,

at p

ara.

4.)

Ther

e is

a p

etiti

o pr

inci

pii u

nder

lyin

g th

is a

ffirm

atio

n an

d it

fails

to e

xpla

in th

e cr

iteria

by

whi

ch it

the

Tria

l Cha

mbe

r dis

qual

ifies

the

plea

of i

nval

idity

of t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

as a

pl

ea to

juris

dict

ion.

Wha

t is m

ore

impo

rtant

, tha

t pro

posi

tion

impl

ies a

nar

row

con

cept

of j

uris

dict

ion

redu

ced

to p

leas

bas

ed o

n th

e lim

its o

f its

scop

e in

tim

e an

d sp

ace

and

as to

per

sons

and

subj

ect-m

atte

r (r

atio

ne te

mpo

ris,

loci

, per

sona

e an

d m

ater

iae)

. But

juris

dict

ion

is n

ot m

erel

y an

am

bit o

r sph

ere

(bet

ter

desc

ribed

in th

is c

ase

as "

com

pete

nce"

); it

is b

asic

ally

- as

is v

isib

le fr

om th

e La

tin o

rigin

of t

he w

ord

445

itsel

f, ju

risd

ictio

- a

lega

l pow

er, h

ence

nec

essa

rily

a le

gitim

ate

pow

er, "

to st

ate

the

law

" (di

re le

dro

it)

with

in th

is a

mbi

t, in

an

auth

orita

tive

and

final

man

ner.

This

is th

e m

eani

ng w

hich

it c

arrie

s in

all l

egal

syst

ems.

Thus

, his

toric

ally

, in

com

mon

law

, the

Ter

mes

de

la le

y pr

ovid

e th

e fo

llow

ing

defin

ition

:

"jur

isdi

ctio

n' is

a d

igni

ty w

hich

a m

an h

ath

by a

pow

er to

do

just

ice

in c

ause

s of c

ompl

aint

mad

e be

fore

him

." (S

troud

's Ju

dici

al D

ictio

nary

, 137

9 (5

th e

d. 1

986)

.)

The

sam

e co

ncep

t is f

ound

eve

n in

cur

rent

dic

tiona

ry d

efin

ition

s:

"[Ju

risdi

ctio

n] is

the

pow

er o

f a c

ourt

to d

ecid

e a

mat

ter i

n co

ntro

vers

y an

d pr

esup

pose

s the

ex

iste

nce

of a

dul

y co

nstit

uted

cou

rt w

ith c

ontro

l ove

r the

subj

ect m

atte

r and

the

parti

es."

Bla

ck's

Law

Dic

tiona

ry, 7

12 (6

th e

d. 1

990)

(citi

ng P

inne

r v. P

inne

r, 33

N.C

. App

. 204

, 234

S.E

.2d

633)

.)

11.A

nar

row

con

cept

of j

uris

dict

ion

may

, per

haps

, be

war

rant

ed in

a n

atio

nal c

onte

xt b

ut n

ot in

inte

rnat

iona

l law

. Int

erna

tiona

l law

, bec

ause

it la

cks a

cen

traliz

ed st

ruct

ure,

doe

s not

pro

vide

for a

n in

tegr

ated

judi

cial

syst

em o

pera

ting

an o

rder

ly d

ivis

ion

of la

bour

am

ong

a nu

mbe

r of t

ribun

als,

whe

re

certa

in a

spec

ts o

r com

pone

nts o

f jur

isdi

ctio

n as

a p

ower

cou

ld b

e ce

ntra

lized

or v

este

d in

one

of t

hem

but

no

t the

oth

ers.

In in

tern

atio

nal l

aw, e

very

trib

unal

is a

self-

cont

aine

d sy

stem

(unl

ess o

ther

wis

e pr

ovid

ed).

This

is in

com

patib

le w

ith a

nar

row

con

cept

of j

uris

dict

ion,

whi

ch p

resu

ppos

es a

cer

tain

div

isio

n of

la

bour

. Of c

ours

e, th

e co

nstit

utiv

e in

stru

men

t of a

n in

tern

atio

nal t

ribun

al c

an li

mit

som

e of

its

juris

dict

iona

l pow

ers,

but o

nly

to th

e ex

tent

to w

hich

such

lim

itatio

n do

es n

ot je

opar

dize

its "

judi

cial

ch

arac

ter"

, as s

hall

be d

iscu

ssed

late

r on.

Suc

h lim

itatio

ns c

anno

t, ho

wev

er, b

e pr

esum

ed a

nd, i

n an

y ca

se, t

hey

cann

ot b

e de

duce

d fr

om th

e co

ncep

t of j

uris

dict

ion

itsel

f.

12.I

n su

m, i

f the

Inte

rnat

iona

l Trib

unal

wer

e no

t val

idly

con

stitu

ted,

it w

ould

lack

the

legi

timat

e po

wer

to d

ecid

e in

tim

e or

spac

e or

ove

r any

per

son

or su

bjec

t-mat

ter.

The

plea

bas

ed o

n th

e in

valid

ity o

f co

nstit

utio

n of

the

Inte

rnat

iona

l Trib

unal

goe

s to

the

very

ess

ence

of j

uris

dict

ion

as a

pow

er to

ex

erci

se th

e ju

dici

al fu

nctio

n w

ithin

any

am

bit.

It is

mor

e ra

dica

l tha

n, in

the

sens

e th

at it

goe

s bey

ond

and

subs

umes

, all

the

othe

r ple

as c

once

rnin

g th

e sc

ope

of ju

risdi

ctio

n. T

his i

ssue

is a

pre

limin

ary

to

and

cond

ition

s all

othe

r asp

ects

of ju

risdi

ctio

n.

26.M

any

argu

men

ts h

ave

been

put

forw

ard

by A

ppel

lant

in su

ppor

t of t

he c

onte

ntio

n th

at th

ees

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

is in

valid

und

er th

e C

harte

r of t

he U

nite

d N

atio

ns o

r tha

t it

was

not

dul

y es

tabl

ishe

d by

law

. Man

y of

thes

e ar

gum

ents

wer

e pr

esen

ted

oral

ly a

nd in

writ

ten

subm

issi

ons b

efor

e th

e Tr

ial C

ham

ber.

App

ella

nt h

as a

sked

this

Cha

mbe

r to

inco

rpor

ate

into

the

argu

men

t bef

ore

the

App

eals

Cha

mbe

r all

the

poin

ts m

ade

at tr

ial.

(See

App

eal T

rans

crip

t, 7

Sept

embe

r 19

95, a

t 7.)

Apa

rt fr

om th

e is

sues

spec

ifica

lly d

ealt

with

bel

ow, t

he A

ppea

ls C

ham

ber i

s con

tent

to a

llow

th

e tre

atm

ent o

f the

se is

sues

by

the

Tria

l Cha

mbe

r to

stan

d.

27.T

he T

rial C

ham

ber s

umm

ariz

ed th

e cl

aim

s of t

he A

ppel

lant

as f

ollo

ws:

"It i

s sai

d th

at, t

o be

dul

y es

tabl

ishe

d by

law

, the

Inte

rnat

iona

l Trib

unal

shou

ld h

ave

been

cre

ated

ei

ther

by

treat

y, th

e co

nsen

sual

act

of n

atio

ns, o

r by

amen

dmen

t of t

he C

harte

r of t

he U

nite

d N

atio

ns, n

ot b

y re

solu

tion

of th

e Se

curit

y C

ounc

il. C

alle

d in

aid

of t

his g

ener

al p

ropo

sitio

n ar

e a

num

ber o

f con

side

ratio

ns: t

hat b

efor

e th

e cr

eatio

n of

the

Inte

rnat

iona

l Trib

unal

in 1

993

it w

as n

ever

en

visa

ged

that

such

an

ad h

oc c

rimin

al tr

ibun

al m

ight

be

set u

p; th

at th

e G

ener

al A

ssem

bly,

who

se

parti

cipa

tion

wou

ld a

t lea

st h

ave

guar

ante

ed fu

ll re

pres

enta

tion

of th

e in

tern

atio

nal c

omm

unity

, was

no

t inv

olve

d in

its c

reat

ion;

that

it w

as n

ever

inte

nded

by

the

Cha

rter t

hat t

he S

ecur

ity C

ounc

il sh

ould

, und

er C

hapt

er V

II, e

stab

lish

a ju

dici

al b

ody,

let a

lone

a c

rimin

al tr

ibun

al; t

hat t

he S

ecur

ity

Cou

ncil

had

been

inco

nsis

tent

in c

reat

ing

this

Trib

unal

whi

le n

ot ta

king

a si

mila

r ste

p in

the

case

of

othe

r are

as o

f con

flict

in w

hich

vio

latio

ns o

f int

erna

tiona

l hum

anita

rian

law

may

hav

e oc

curr

ed;

that

the

esta

blis

hmen

t of t

he In

tern

atio

nal T

ribun

al h

ad n

eith

er p

rom

oted

, nor

was

cap

able

of

prom

otin

g, in

tern

atio

nal p

eace

, as t

he c

urre

nt si

tuat

ion

in th

e fo

rmer

Yug

osla

via

dem

onst

rate

s; th

at

the

Secu

rity

Cou

ncil

coul

d no

t, in

any

eve

nt, c

reat

e cr

imin

al li

abili

ty o

n th

e pa

rt of

indi

vidu

als a

nd

that

this

is w

hat i

ts c

reat

ion

of th

e In

tern

atio

nal T

ribun

al d

id; t

hat t

here

exi

sted

and

exi

sts n

o su

ch

inte

rnat

iona

l em

erge

ncy

as w

ould

just

ify th

e ac

tion

of th

e Se

curit

y C

ounc

il; th

at n

o po

litic

al o

rgan

su

ch a

s the

Sec

urity

Cou

ncil

is c

apab

le o

f est

ablis

hing

an

inde

pend

ent a

nd im

parti

al tr

ibun

al; t

hat

ther

e is

an

inhe

rent

def

ect i

n th

e cr

eatio

n, a

fter t

he e

vent

, of a

d ho

c tri

buna

ls to

try

parti

cula

r typ

es

446

of o

ffen

ces a

nd, f

inal

ly, t

hat t

o gi

ve th

e In

tern

atio

nal T

ribun

al p

rimac

y ov

er n

atio

nal c

ourts

is, i

n an

y ev

ent a

nd in

itse

lf, in

here

ntly

wro

ng."

(Dec

isio

n at

Tria

l, at

par

a. 2

.)

Thes

e ar

gum

ents

rais

e a

serie

s of c

onst

itutio

nal i

ssue

s whi

ch a

ll tu

rn o

n th

e lim

its o

f the

pow

er o

f the

Se

curit

y C

ounc

il un

der C

hapt

er V

II o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

and

det

erm

inin

g w

hat a

ctio

n or

m

easu

res c

an b

e ta

ken

unde

r thi

s Cha

pter

, par

ticul

arly

the

esta

blis

hmen

t of a

n in

tern

atio

nal c

rimin

al

tribu

nal.

Put i

n th

e in

terr

ogat

ive,

they

can

be

form

ulat

ed a

s fol

low

s:

1. w

as th

ere

real

ly a

thre

at to

the

peac

e ju

stify

ing

the

invo

catio

n of

Cha

pter

VII

as a

lega

l bas

is fo

r th

e es

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

?

2. a

ssum

ing

such

a th

reat

exi

sted

, was

the

Secu

rity

Cou

ncil

auth

oriz

ed, w

ith a

vie

w to

rest

orin

g or

m

aint

aini

ng p

eace

, to

take

any

mea

sure

s at i

ts o

wn

disc

retio

n, o

r was

it b

ound

to c

hoos

e am

ong

thos

e ex

pres

sly

prov

ided

for i

n A

rticl

es 4

1 an

d 42

(and

pos

sibl

y A

rticl

e 40

as w

ell)?

3.

in th

e la

tter c

ase,

how

can

the

esta

blis

hmen

t of a

n in

tern

atio

nal c

rimin

al tr

ibun

al b

e ju

stifi

ed, a

s it

does

not

figu

re a

mon

g th

e on

es m

entio

ned

in th

ose

Arti

cles

, and

is o

f a d

iffer

ent n

atur

e?

1. T

he P

ower

Of T

he S

ecur

ity C

ounc

il T

o In

voke

Cha

pter

VII

28. A

rticl

e 39

ope

ns C

hapt

er V

II o

f the

Cha

rter o

f the

Uni

ted

Nat

ions

and

det

erm

ines

the

cond

ition

s of

appl

icat

ion

of th

is C

hapt

er. I

t pro

vide

s:

"The

Sec

urity

Cou

ncil

shal

l det

erm

ine

the

exis

tenc

e of

any

thre

at to

the

peac

e, b

reac

h of

the

peac

e,

or a

ct o

f agg

ress

ion

and

shal

l mak

e re

com

men

datio

ns, o

r dec

ide

wha

t mea

sure

s sha

ll be

take

n in

ac

cord

ance

with

Arti

cles

41

and

42, t

o m

aint

ain

or re

stor

e in

tern

atio

nal p

eace

and

se

curit

y." (

Uni

ted

Nat

ions

Cha

rter,

26 Ju

ne 1

945,

Art.

39.

)

It is

cle

ar fr

om th

is te

xt th

at th

e Se

curit

y C

ounc

il pl

ays a

piv

otal

role

and

exe

rcis

es a

ver

y w

ide

disc

retio

n un

der t

his A

rticl

e. B

ut th

is d

oes n

ot m

ean

that

its p

ower

s are

unl

imite

d. T

he S

ecur

ity C

ounc

il is

an

orga

n of

an

inte

rnat

iona

l org

aniz

atio

n, e

stab

lishe

d by

a tr

eaty

whi

ch se

rves

as a

con

stitu

tiona

l fra

mew

ork

for

that

org

aniz

atio

n. T

he S

ecur

ity C

ounc

il is

thus

subj

ecte

d to

cer

tain

con

stitu

tiona

l lim

itatio

ns, h

owev

er

broa

d its

pow

ers u

nder

the

cons

titut

ion

may

be.

Tho

se p

ower

s can

not,

in a

ny c

ase,

go

beyo

nd th

e lim

its

of th

e ju

risdi

ctio

n of

the

Org

aniz

atio

n at

larg

e, n

ot to

men

tion

othe

r spe

cific

lim

itatio

ns o

r tho

se w

hich

m

ay d

eriv

e fr

om th

e in

tern

al d

ivis

ion

of p

ower

with

in th

e O

rgan

izat

ion.

In a

ny c

ase,

nei

ther

the

text

nor

th

e sp

irit o

f the

Cha

rter c

once

ives

of t

he S

ecur

ity C

ounc

il as

legi

bus s

olut

us (u

nbou

nd b

y la

w).

In p

artic

ular

, Arti

cle

24, a

fter d

ecla

ring,

in p

arag

raph

1, t

hat t

he M

embe

rs o

f the

Uni

ted

Nat

ions

"co

nfer

on

the

Secu

rity

Cou

ncil

prim

ary

resp

onsi

bilit

y fo

r the

mai

nten

ance

of i

nter

natio

nal p

eace

and

secu

rity"

, im

pose

s on

it, in

par

agra

ph 3

, the

obl

igat

ion

to re

port

annu

ally

(or m

ore

freq

uent

ly) t

o th

e G

ener

al

Ass

embl

y, a

nd p

rovi

des,

mor

e im

porta

ntly

, in

para

grap

h 2,

that

:

"In

disc

harg

ing

thes

e du

ties t

he S

ecur

ity C

ounc

il sh

all a

ct in

acc

orda

nce

with

the

Purp

oses

and

Pr

inci

ples

of t

he U

nite

d N

atio

ns. T

he sp

ecifi

c po

wer

s gra

nted

to th

e Se

curit

y C

ounc

il fo

r the

di

scha

rge

of th

ese

dutie

s are

laid

dow

n in

Cha

pter

s VI,

VII

, VII

I, an

d X

II."

(Id.

, Art.

24(

2).)

The

Cha

rter t

hus s

peak

s the

lang

uage

of s

peci

fic p

ower

s, no

t of a

bsol

ute

fiat.

29. W

hat i

s the

ext

ent o

f the

pow

ers o

f the

Sec

urity

Cou

ncil

unde

r Arti

cle

39 a

nd th

e lim

its th

ereo

n, if

an

y?

The

Secu

rity

Cou

ncil

play

s the

cen

tral r

ole

in th

e ap

plic

atio

n of

bot

h pa

rts o

f the

Arti

cle.

It is

the

Secu

rity

Cou

ncil

that

mak

es th

e de

term

inat

ion

that

ther

e ex

ists

one

of t

he si

tuat

ions

just

ifyin

g th

e us

e of

the

"exc

eptio

nal p

ower

s" o

f Cha

pter

VII

. And

it is

als

o th

e Se

curit

y C

ounc

il th

at c

hoos

es th

e re

actio

n to

such

a

situ

atio

n: it

eith

er m

akes

rec

omm

enda

tions

(i.e

., op

ts n

ot to

use

the

exce

ptio

nal p

ower

s but

to c

ontin

ue

to o

pera

te u

nder

Cha

pter

VI)

or d

ecid

es to

use

the

exce

ptio

nal p

ower

s by

orde

ring

mea

sure

s to

be ta

ken

in a

ccor

danc

e w

ith A

rticl

es 4

1 an

d 42

with

a v

iew

to m

aint

aini

ng o

r res

torin

g in

tern

atio

nal p

eace

and

se

curit

y.

The

situ

atio

ns ju

stify

ing

reso

rt to

the

pow

ers p

rovi

ded

for i

n C

hapt

er V

II a

re a

"th

reat

to th

e pe

ace"

, a

"bre

ach

of th

e pe

ace"

or a

n "a

ct o

f agg

ress

ion.

" W

hile

the

"act

of a

ggre

ssio

n" is

mor

e am

enab

le to

a le

gal

dete

rmin

atio

n, th

e "t

hrea

t to

the

peac

e" is

mor

e of

a p

oliti

cal c

once

pt. B

ut th

e de

term

inat

ion

that

ther

e ex

ists

such

a th

reat

is n

ot a

tota

lly u

nfet

tere

d di

scre

tion,

as i

t has

to re

mai

n, a

t the

ver

y le

ast,

with

in th

e lim

its o

f the

Pur

pose

s and

Prin

cipl

es o

f the

Cha

rter.

30. I

t is n

ot n

eces

sary

for t

he p

urpo

ses o

f the

pre

sent

dec

isio

n to

exa

min

e an

y fu

rther

the

ques

tion

of th

e lim

its o

f the

dis

cret

ion

of th

e Se

curit

y C

ounc

il in

det

erm

inin

g th

e ex

iste

nce

of a

"th

reat

to th

e pe

ace"

, for

tw

o re

ason

s.

The

first

is th

at a

n ar

med

con

flict

(or a

serie

s of a

rmed

con

flict

s) h

as b

een

taki

ng p

lace

in th

e te

rrito

ry o

f th

e fo

rmer

Yug

osla

via

sinc

e lo

ng b

efor

e th

e de

cisi

on o

f the

Sec

urity

Cou

ncil

to e

stab

lish

this

In

tern

atio

nal T

ribun

al. I

f it i

s con

side

red

an in

tern

atio

nal a

rmed

con

flict

, the

re is

no

doub

t tha

t it f

alls

w

ithin

the

liter

al se

nse

of th

e w

ords

"br

each

of t

he p

eace

" (be

twee

n th

e pa

rties

or,

at th

e ve

ry le

ast,

wou

ld

be a

as a

"thr

eat t

o th

e pe

ace"

of o

ther

s).

But

eve

n if

it w

ere

cons

ider

ed m

erel

y as

an

"int

erna

l arm

ed c

onfli

ct",

it w

ould

still

con

stitu

te a

"th

reat

to

the

peac

e" a

ccor

ding

to th

e se

ttled

pra

ctic

e of

the

Secu

rity

Cou

ncil

and

the

com

mon

und

erst

andi

ng o

f the

U

nite

d N

atio

ns m

embe

rshi

p in

gen

eral

. Ind

eed,

the

prac

tice

of th

e Se

curit

y C

ounc

il is

rich

with

cas

es o

f ci

vil w

ar o

r int

erna

l stri

fe w

hich

it c

lass

ified

as a

"thr

eat t

o th

e pe

ace"

and

dea

lt w

ith u

nder

Cha

pter

VII

, w

ith th

e en

cour

agem

ent o

r eve

n at

the

behe

st o

f the

Gen

eral

Ass

embl

y, su

ch a

s the

Con

go c

risis

at t

he

begi

nnin

g of

the

1960

s and

, mor

e re

cent

ly, L

iber

ia a

nd S

omal

ia. I

t can

thus

be

said

that

ther

e is

a

com

mon

und

erst

andi

ng, m

anife

sted

by

the

"sub

sequ

ent p

ract

ice"

of t

he m

embe

rshi

p of

the

Uni

ted

Nat

ions

at l

arge

, tha

t the

"th

reat

to th

e pe

ace"

of A

rticl

e 39

may

incl

ude,

as o

ne o

f its

spec

ies,

inte

rnal

ar

med

con

flict

s.

The

seco

nd re

ason

, whi

ch is

mor

e pa

rticu

lar t

o th

e ca

se a

t han

d, is

that

App

ella

nt h

as a

men

ded

his

posi

tion

from

that

con

tain

ed in

the

Brie

f sub

mitt

ed to

the

Tria

l Cha

mbe

r. A

ppel

lant

no

long

er c

onte

sts t

he

Secu

rity

Cou

ncil'

s pow

er to

det

erm

ine

whe

ther

the

situ

atio

n in

the

form

er Y

ugos

lavi

a co

nstit

uted

a th

reat

to

the

peac

e, n

or th

e de

term

inat

ion

itsel

f. H

e fu

rther

ack

now

ledg

es th

at th

e Se

curit

y C

ounc

il "h

as th

e po

wer

to a

ddre

ss to

such

thre

ats [

. . .]

by

appr

opria

te m

easu

res."

[Def

ence

] Brie

f to

Supp

ort t

he N

otic

e of

(I

nter

locu

tory

) App

eal,

25 A

ugus

t 199

5 (C

ase

No.

IT-9

4-1-

AR

72),

at p

ara.

5.4

(her

eina

fter D

efen

ce

Appe

al B

rief

).) B

ut h

e co

ntin

ues t

o co

ntes

t the

lega

lity

and

appr

opria

tene

ss o

f the

mea

sure

s cho

sen

by th

e Se

curit

y C

ounc

il to

that

end

.

2. T

he R

ange

of M

easu

res E

nvis

aged

Und

er C

hapt

er V

II

31. O

nce

the

Secu

rity

Cou

ncil

dete

rmin

es th

at a

par

ticul

ar si

tuat

ion

pose

s a th

reat

to th

e pe

ace

or th

at

ther

e ex

ists

a b

reac

h of

the

peac

e or

an

act o

f agg

ress

ion,

it e

njoy

s a w

ide

mar

gin

of d

iscr

etio

n in

ch

oosi

ng th

e co

urse

of a

ctio

n: a

s not

ed a

bove

(see

par

a. 2

9) it

can

eith

er c

ontin

ue, i

n sp

ite o

f its

de

term

inat

ion,

to a

ct v

ia re

com

men

datio

ns, i

.e.,

as if

it w

ere

still

with

in C

hapt

er V

I ("P

acifi

c Se

ttlem

ent

of D

ispu

tes"

) or i

t can

exe

rcis

e its

exc

eptio

nal p

ower

s und

er C

hapt

er V

II. I

n th

e w

ords

of A

rticl

e 39

, it

wou

ld th

en "

deci

de w

hat m

easu

res s

hall

be ta

ken

in a

ccor

danc

e w

ith A

rticl

es 4

1 an

d 42

, to

mai

ntai

n or

re

stor

e in

tern

atio

nal p

eace

and

secu

rity.

" (U

nite

d N

atio

ns C

harte

r, ar

t. 39

.)

A q

uest

ion

aris

es in

this

resp

ect a

s to

whe

ther

the

choi

ce o

f the

Sec

urity

Cou

ncil

is li

mite

d to

the

447

mea

sure

s pro

vide

d fo

r in

Arti

cles

41

and

42 o

f the

Cha

rter (

as th

e la

ngua

ge o

f Arti

cle

39 su

gges

ts),

or

whe

ther

it h

as e

ven

larg

er d

iscr

etio

n in

the

form

of g

ener

al p

ower

s to

mai

ntai

n an

d re

stor

e in

tern

atio

nal

peac

e an

d se

curit

y un

der C

hapt

er V

II a

t lar

ge. I

n th

e la

tter c

ase,

one

of c

ours

e do

es n

ot h

ave

to lo

cate

ev

ery

mea

sure

dec

ided

by

the

Secu

rity

Cou

ncil

unde

r Cha

pter

VII

with

in th

e co

nfin

es o

f Arti

cles

41

and

42, o

r pos

sibl

y A

rticl

e 40

. In

any

case

, und

er b

oth

inte

rpre

tatio

ns, t

he S

ecur

ity C

ounc

il ha

s a b

road

di

scre

tion

in d

ecid

ing

on th

e co

urse

of a

ctio

n an

d ev

alua

ting

the

appr

opria

tene

ss o

f the

mea

sure

s to

be

take

n. T

he la

ngua

ge o

f Arti

cle

39 is

qui

te c

lear

as t

o th

e ch

anne

lling

of t

he v

ery

broa

d an

d ex

cept

iona

l po

wer

s of t

he S

ecur

ity C

ounc

il un

der C

hapt

er V

II th

roug

h A

rticl

es 4

1 an

d 42

. The

se tw

o A

rticl

es le

ave

to th

e Se

curit

y C

ounc

il su

ch a

wid

e ch

oice

as n

ot to

war

rant

sear

chin

g, o

n fu

nctio

nal o

r oth

er g

roun

ds,

for e

ven

wid

er a

nd m

ore

gene

ral p

ower

s tha

n th

ose

alre

ady

expr

essl

y pr

ovid

ed fo

r in

the

Cha

rter.

Thes

e po

wer

s are

coe

rciv

e vi

s-à-

vis t

he c

ulpr

it St

ate

or e

ntity

. But

they

are

als

o m

anda

tory

vis

-à-v

is th

e ot

her M

embe

r Sta

tes,

who

are

und

er a

n ob

ligat

ion

to c

oope

rate

with

the

Org

aniz

atio

n (A

rticl

e 2,

pa

ragr

aph

5, A

rticl

es 2

5, 4

8) a

nd w

ith o

ne a

noth

er (A

rticl

es 4

9), i

n th

e im

plem

enta

tion

of th

e ac

tion

or

mea

sure

s dec

ided

by

the

Secu

rity

Cou

ncil.

3. T

he E

stab

lishm

ent O

f The

Inte

rnat

iona

l Tri

buna

l As A

Mea

sure

Und

er C

hapt

er V

II

32. A

s with

the

dete

rmin

atio

n of

the

exis

tenc

e of

a th

reat

to th

e pe

ace,

a b

reac

h of

the

peac

e or

an

act o

f ag

gres

sion

, the

Sec

urity

Cou

ncil

has a

ver

y w

ide

mar

gin

of d

iscr

etio

n un

der A

rticl

e 39

to c

hoos

e th

e ap

prop

riate

cou

rse

of a

ctio

n an

d to

eva

luat

e th

e su

itabi

lity

of th

e m

easu

res c

hose

n, a

s wel

l as t

heir

pote

ntia

l con

tribu

tion

to th

e re

stor

atio

n or

mai

nten

ance

of p

eace

. But

her

e ag

ain,

this

dis

cret

ion

is n

ot

unfe

ttere

d; m

oreo

ver,

it is

lim

ited

to th

e m

easu

res p

rovi

ded

for i

n A

rticl

es 4

1 an

d 42

. Ind

eed,

in th

e ca

se

at h

and,

this

last

poi

nt se

rves

as a

bas

is fo

r the

App

ella

nt's

cont

entio

n of

inva

lidity

of t

he e

stab

lishm

ent o

f th

e In

tern

atio

nal T

ribun

al.

In it

s res

olut

ion

827,

the

Secu

rity

Cou

ncil

cons

ider

s tha

t "in

the

parti

cula

r circ

umst

ance

s of t

he fo

rmer

Y

ugos

lavi

a", t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

"w

ould

con

tribu

te to

the

rest

orat

ion

and

mai

nten

ance

of p

eace

" and

indi

cate

s tha

t, in

est

ablis

hing

it, t

he S

ecur

ity C

ounc

il w

as a

ctin

g un

der

Cha

pter

VII

(S.C

. Res

. 827

, U.N

. Doc

. S/R

ES/8

27 (1

993)

). H

owev

er, i

t did

not

spec

ify a

par

ticul

ar

Arti

cle

as a

bas

is fo

r thi

s act

ion.

App

ella

nt h

as a

ttack

ed th

e le

galit

y of

this

dec

isio

n at

diff

eren

t sta

ges b

efor

e th

e Tr

ial C

ham

ber a

s wel

l as

befo

re th

is C

ham

ber o

n at

leas

t thr

ee g

roun

ds:

a) th

at th

e es

tabl

ishm

ent o

f suc

h a

tribu

nal w

as n

ever

con

tem

plat

ed b

y th

e fr

amer

s of t

he C

harte

r as

one

of th

e m

easu

res t

o be

take

n un

der C

hapt

er V

II; a

s witn

esse

d by

the

fact

that

it fi

gure

s now

here

in

the

prov

isio

ns o

f tha

t Cha

pter

, and

mor

e pa

rticu

larly

in A

rticl

es 4

1 an

d 42

whi

ch d

etai

l the

se

mea

sure

s;

b) th

at th

e Se

curit

y C

ounc

il is

con

stitu

tiona

lly o

r inh

eren

tly in

capa

ble

of c

reat

ing

a ju

dici

al o

rgan

, as

it is

con

ceiv

ed in

the

Cha

rter a

s an

exec

utiv

e or

gan,

hen

ce n

ot p

osse

ssed

of j

udic

ial p

ower

s w

hich

can

be

exer

cise

d th

roug

h a

subs

idia

ry o

rgan

;

c) th

at th

e es

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

has

nei

ther

pro

mot

ed, n

or w

as c

apab

le o

f pr

omot

ing,

inte

rnat

iona

l pea

ce, a

s dem

onst

rate

d by

the

curr

ent s

ituat

ion

in th

e fo

rmer

Yug

osla

via.

(a) W

hat A

rtic

le o

f Cha

pter

VII

Ser

ves A

s A B

asis

For

The

Est

ablis

hmen

t Of A

Tri

buna

l?

33. T

he e

stab

lishm

ent o

f an

inte

rnat

iona

l crim

inal

trib

unal

is n

ot e

xpre

ssly

men

tione

d am

ong

the

enfo

rcem

ent m

easu

res p

rovi

ded

for i

n C

hapt

er V

II, a

nd m

ore

parti

cula

rly in

Arti

cles

41

and

42.

Obv

ious

ly, t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

is n

ot a

mea

sure

und

er A

rticl

e 42

, as t

hese

are

m

easu

res o

f a m

ilita

ry n

atur

e, im

plyi

ng th

e us

e of

arm

ed fo

rce.

Nor

can

it b

e co

nsid

ered

a "

prov

isio

nal

mea

sure

" un

der A

rticl

e 40

. The

se m

easu

res,

as th

eir d

enom

inat

ion

indi

cate

s, ar

e in

tend

ed to

act

as a

"h

oldi

ng o

pera

tion"

, pro

duci

ng a

"sta

nd-s

till"

or a

"co

olin

g-of

f" e

ffec

t, "w

ithou

t pre

judi

ce to

the

right

s, cl

aim

s or p

ositi

on o

f the

par

ties c

once

rned

." (U

nite

d N

atio

ns C

harte

r, ar

t. 40

.) Th

ey a

re a

kin

to

emer

genc

y po

lice

actio

n ra

ther

than

to th

e ac

tivity

of a

judi

cial

org

an d

ispe

nsin

g ju

stic

e ac

cord

ing

to la

w.

Mor

eove

r, no

t bei

ng e

nfor

cem

ent a

ctio

n, a

ccor

ding

to th

e la

ngua

ge o

f Arti

cle

40 it

self

("be

fore

mak

ing

the

reco

mm

enda

tions

or d

ecid

ing

upon

the

mea

sure

s pro

vide

d fo

r in

Arti

cle

39")

, suc

h pr

ovis

iona

l m

easu

res a

re su

bjec

t to

the

Cha

rter l

imita

tion

of A

rticl

e 2,

par

agra

ph 7

, and

the

ques

tion

of th

eir

man

dato

ry o

r rec

omm

enda

tory

cha

ract

er is

subj

ect t

o gr

eat c

ontro

vers

y; a

ll of

whi

ch re

nder

s in

appr

opria

te th

e cl

assi

ficat

ion

of th

e In

tern

atio

nal T

ribun

al u

nder

thes

e m

easu

res.

34. P

rim

a fa

cie,

the

Inte

rnat

iona

l Trib

unal

mat

ches

per

fect

ly th

e de

scrip

tion

in A

rticl

e 41

of "

mea

sure

s no

t inv

olvi

ng th

e us

e of

forc

e." A

ppel

lant

, how

ever

, has

arg

ued

befo

re b

oth

the

Tria

l Cha

mbe

r and

this

A

ppea

ls C

ham

ber,

that

:"

...[I

]t is

cle

ar th

at th

e es

tabl

ishm

ent o

f a w

ar c

rimes

trib

unal

was

not

inte

nded

. The

exa

mpl

es

men

tione

d in

this

arti

cle

focu

s upo

n ec

onom

ic a

nd p

oliti

cal m

easu

res a

nd d

o no

t in

any

way

su

gges

t jud

icia

l mea

sure

s." (B

rief t

o Su

ppor

t the

Mot

ion

[of t

he D

efen

ce] o

n th

e Ju

risdi

ctio

n of

the

Trib

unal

bef

ore

the

Tria

l Cha

mbe

r of t

he In

tern

atio

nal T

ribun

al, 2

3 Ju

ne 1

995

(Cas

e N

o. IT

-94-

1-T)

, at p

ara.

3.2

.1 (h

erei

nafte

r Def

ence

Tri

al B

rief

).)

It ha

s als

o be

en a

rgue

d th

at th

e m

easu

res c

onte

mpl

ated

und

er A

rticl

e 41

are

all

mea

sure

s to

be u

nder

take

n by

Mem

ber S

tate

s, w

hich

is n

ot th

e ca

se w

ith th

e es

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

.

35. T

he fi

rst a

rgum

ent d

oes n

ot st

and

by it

s ow

n la

ngua

ge. A

rticl

e 41

read

s as f

ollo

ws:

"

The

Secu

rity

Cou

ncil

may

dec

ide

wha

t mea

sure

s not

invo

lvin

g th

e us

e of

arm

ed fo

rce

are

to b

e em

ploy

ed to

giv

e ef

fect

to it

s dec

isio

ns, a

nd it

may

cal

l upo

n th

e M

embe

rs o

f the

Uni

ted

Nat

ions

to

appl

y su

ch m

easu

res.

Thes

e m

ay in

clud

e co

mpl

ete

or p

artia

l int

erru

ptio

n of

eco

nom

ic re

latio

ns a

nd

of ra

il, se

a, a

ir, p

osta

l, te

legr

aphi

c, ra

dio,

and

oth

er m

eans

of c

omm

unic

atio

n, a

nd th

e se

vera

nce

of

dipl

omat

ic re

latio

ns."

(Uni

ted

Nat

ions

Cha

rter,

art.

41.)

It is

evi

dent

that

the

mea

sure

s set

out

in A

rticl

e 41

are

mer

ely

illus

trativ

e ex

ampl

es w

hich

obv

ious

ly d

o no

t exc

lude

oth

er m

easu

res.

All

the

Arti

cle

requ

ires i

s tha

t the

y do

not

invo

lve

"the

use

of f

orce

." It

is a

ne

gativ

e de

finiti

on.

That

the

exam

ples

do

not s

ugge

st ju

dici

al m

easu

res g

oes s

ome

way

tow

ards

the

othe

r arg

umen

t tha

t the

A

rticl

e do

es n

ot c

onte

mpl

ate

inst

itutio

nal m

easu

res i

mpl

emen

ted

dire

ctly

by

the

Uni

ted

Nat

ions

thro

ugh

one

of it

s org

ans b

ut, a

s the

giv

en e

xam

ples

sugg

est,

only

act

ion

by M

embe

r Sta

tes,

such

as e

cono

mic

sa

nctio

ns (t

houg

h po

ssib

ly c

oord

inat

ed th

roug

h an

org

an o

f the

Org

aniz

atio

n). H

owev

er, a

s men

tione

d ab

ove,

not

hing

in th

e A

rticl

e su

gges

ts th

e lim

itatio

n of

the

mea

sure

s to

thos

e im

plem

ente

d by

Sta

tes.

The

Arti

cle

only

pre

scrib

es w

hat t

hese

mea

sure

s can

not b

e. B

eyon

d th

at it

doe

s not

say

or su

gges

t wha

t the

y ha

ve to

be.

Mor

eove

r, ev

en a

sim

ple

liter

al a

naly

sis o

f the

Arti

cle

show

s tha

t the

firs

t phr

ase

of th

e fir

st se

nten

ce

carr

ies a

ver

y ge

nera

l pre

scrip

tion

whi

ch c

an a

ccom

mod

ate

both

inst

itutio

nal a

nd M

embe

r Sta

te a

ctio

n.

The

seco

nd p

hras

e ca

n be

read

as r

efer

ring

parti

cula

rly to

one

spec

ies o

f thi

s ver

y la

rge

cate

gory

of

mea

sure

s ref

erre

d to

in th

e fir

st p

hras

e, b

ut n

ot n

eces

saril

y th

e on

ly o

ne, n

amel

y, m

easu

res u

nder

take

n di

rect

ly b

y St

ates

. It i

s als

o cl

ear t

hat t

he se

cond

sent

ence

, sta

rting

with

"Th

ese

[mea

sure

s]"

not "

Thos

e [m

easu

res]

", re

fers

to th

e s p

ecie

s men

tione

d in

the

seco

nd p

hras

e ra

ther

than

to th

e "g

enus

" ref

erre

d to

in

448

the

first

phr

ase

of th

is se

nten

ce.

36. L

ogic

ally

, if t

he O

rgan

izat

ion

can

unde

rtake

mea

sure

s whi

ch h

ave

to b

e im

plem

ente

d th

roug

h th

e in

term

edia

ry o

f its

Mem

bers

, it c

an a

forti

ori u

nder

take

mea

sure

s whi

ch it

can

impl

emen

t dire

ctly

via

its

orga

ns, i

f it h

appe

ns to

hav

e th

e re

sour

ces t

o do

so. I

t is o

nly

for w

ant o

f suc

h re

sour

ces t

hat t

he U

nite

d N

atio

ns h

as to

act

thro

ugh

its M

embe

rs. B

ut it

is o

f the

ess

ence

of "

colle

ctiv

e m

easu

res"

that

they

are

co

llect

ivel

y un

derta

ken.

Act

ion

by M

embe

r Sta

tes o

n be

half

of th

e O

rgan

izat

ion

is b

ut a

poo

r sub

stitu

te

faut

e de

mie

ux, o

r a "

seco

nd b

est"

for w

ant o

f the

firs

t. Th

is is

als

o th

e pa

ttern

of A

rticl

e 42

on

mea

sure

s in

volv

ing

the

use

of a

rmed

forc

e.

In su

m, t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

falls

squa

rely

with

in th

e po

wer

s of t

he S

ecur

ity

Cou

ncil

unde

r Arti

cle

41.

(b) C

an T

he S

ecur

ity C

ounc

il E

stab

lish

A S

ubsi

diar

y O

rgan

With

Jud

icia

l Pow

ers?

37. T

he a

rgum

ent t

hat t

he S

ecur

ity C

ounc

il, n

ot b

eing

end

owed

with

judi

cial

pow

ers,

cann

ot e

stab

lish

a su

bsid

iary

org

an p

osse

ssed

of s

uch

pow

ers i

s unt

enab

le: i

t res

ults

from

a fu

ndam

enta

l mis

unde

rsta

ndin

g of

the

cons

titut

iona

l set

-up

of th

e C

harte

r.

Plai

nly,

the

Secu

rity

Cou

ncil

is n

ot a

judi

cial

org

an a

nd is

not

pro

vide

d w

ith ju

dici

al p

ower

s (th

ough

it

may

inci

dent

ally

per

form

cer

tain

qua

si-ju

dici

al a

ctiv

ities

such

as e

ffec

ting

dete

rmin

atio

ns o

r fin

ding

s).

The

prin

cipa

l fun

ctio

n of

the

Secu

rity

Cou

ncil

is th

e m

aint

enan

ce o

f int

erna

tiona

l pea

ce a

nd se

curit

y, in

th

e di

scha

rge

of w

hich

the

Secu

rity

Cou

ncil

exer

cise

s bot

h de

cisi

on-m

akin

g an

d ex

ecut

ive

pow

ers.

38. T

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

by

the

Secu

rity

Cou

ncil

does

not

sign

ify, h

owev

er,

that

the

Secu

rity

Cou

ncil

has d

eleg

ated

to it

som

e of

its o

wn

func

tions

or t

he e

xerc

ise

of so

me

of it

s ow

n po

wer

s. N

or d

oes i

t mea

n, in

reve

rse,

that

the

Secu

rity

Cou

ncil

was

usu

rpin

g fo

r its

elf p

art o

f a ju

dici

al

func

tion

whi

ch d

oes n

ot b

elon

g to

it b

ut to

oth

er o

rgan

s of t

he U

nite

d N

atio

ns a

ccor

ding

to th

e C

harte

r. Th

e Se

curit

y C

ounc

il ha

s res

orte

d to

the

esta

blis

hmen

t of a

judi

cial

org

an in

the

form

of a

n in

tern

atio

nal

crim

inal

trib

unal

as a

n in

stru

men

t for

the

exer

cise

of i

ts o

wn

prin

cipa

l fun

ctio

n of

mai

nten

ance

of p

eace

an

d se

curit

y, i.

e., a

s a m

easu

re c

ontri

butin

g to

the

rest

orat

ion

and

mai

nten

ance

of p

eace

in th

e fo

rmer

Y

ugos

lavi

a.

The

Gen

eral

Ass

embl

y di

d no

t nee

d to

hav

e m

ilita

ry a

nd p

olic

e fu

nctio

ns a

nd p

ower

s in

orde

r to

be a

ble

to e

stab

lish

the

Uni

ted

Nat

ions

Em

erge

ncy

Forc

e in

the

Mid

dle

East

("U

NEF

") in

195

6. N

or d

id th

e G

ener

al A

ssem

bly

have

to b

e a

judi

cial

org

an p

osse

ssed

of j

udic

ial f

unct

ions

and

pow

ers i

n or

der t

o be

ab

le to

est

ablis

h U

NA

T. In

its a

dvis

ory

opin

ion

in th

e Ef

fect

of A

war

ds, t

he In

tern

atio

nal C

ourt

of Ju

stic

e,

in a

ddre

ssin

g pr

actic

ally

the

sam

e ob

ject

ion,

dec

lare

d:

"[T]

he C

harte

r doe

s not

con

fer j

udic

ial f

unct

ions

on

the

Gen

eral

Ass

embl

y [.

. .] B

y es

tabl

ishi

ng

the

Adm

inis

trativ

e Tr

ibun

al, t

he G

ener

al A

ssem

bly

was

not

del

egat

ing

the

perf

orm

ance

of i

ts o

wn

func

tions

: it w

as e

xerc

isin

g a

pow

er w

hich

it h

ad u

nder

the

Cha

rter t

o re

gula

te st

aff

rela

tions

." (E

ffec

t of A

war

ds, a

t 61.

)

(c) W

as T

he E

stab

lishm

ent O

f The

Inte

rnat

iona

l Tri

buna

l An

App

ropr

iate

Mea

sure

?

39. T

he th

ird a

rgum

ent i

s dire

cted

aga

inst

the

disc

retio

nary

pow

er o

f the

Sec

urity

Cou

ncil

in e

valu

atin

g th

e ap

prop

riate

ness

of t

he c

hose

n m

easu

re a

nd it

s eff

ectiv

enes

s in

achi

evin

g its

obj

ectiv

e, th

e re

stor

atio

n of

pea

ce.

Arti

cle

39 le

aves

the

choi

ce o

f mea

ns a

nd th

eir e

valu

atio

n to

the

Secu

rity

Cou

ncil,

whi

ch e

njoy

s wid

e

disc

retio

nary

pow

ers i

n th

is re

gard

; and

it c

ould

not

hav

e be

en o

ther

wis

e, a

s suc

h a

choi

ce in

volv

es

polit

ical

eva

luat

ion

of h

ighl

y co

mpl

ex a

nd d

ynam

ic si

tuat

ions

.

It w

ould

be

a to

tal m

isco

ncep

tion

of w

hat a

re th

e cr

iteria

of l

egal

ity a

nd v

alid

ity in

law

to te

st th

e le

galit

y of

such

mea

sure

s ex

post

fact

o by

thei

r suc

cess

or f

ailu

re to

ach

ieve

thei

r end

s (in

the

pres

ent c

ase,

the

rest

orat

ion

of p

eace

in th

e fo

rmer

Yug

osla

via,

in q

uest

of w

hich

the

esta

blis

hmen

t of t

he In

tern

atio

nal

Trib

unal

is b

ut o

ne o

f man

y m

easu

res a

dopt

ed b

y th

e Se

curit

y C

ounc

il).

40. F

or th

e af

orem

entio

ned

reas

ons,

the

App

eals

Cha

mbe

r con

side

rs th

at th

e In

tern

atio

nal T

ribun

al h

as

been

law

fully

est

ablis

hed

as a

mea

sure

und

er C

hapt

er V

II o

f the

Cha

rter.

4. W

as T

he E

stab

lishm

ent O

f The

Inte

rnat

iona

l Tri

buna

l Con

trar

y T

o T

he G

ener

al P

rinc

iple

W

here

by C

ourt

s Mus

t Be

"Est

ablis

hed

By

Law

"?

41. A

ppel

lant

cha

lleng

es th

e es

tabl

ishm

ent o

f the

Inte

rnat

iona

l Trib

unal

by

cont

endi

ng th

at it

has

not

be

en e

stab

lishe

d by

law

. The

ent

itlem

ent o

f an

indi

vidu

al to

hav

e a

crim

inal

cha

rge

agai

nst h

im

dete

rmin

ed b

y a

tribu

nal w

hich

has

bee

n es

tabl

ishe

d by

law

is p

rovi

ded

in A

rticl

e 14

, par

agra

ph 1

, of t

he

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s. It

prov

ides

: "

In th

e de

term

inat

ion

of a

ny c

rimin

al c

harg

e ag

ains

t him

, or o

f his

righ

ts a

nd o

blig

atio

ns in

a su

it at

la

w, e

very

one

shal

l be

entit

led

to a

fair

and

publ

ic h

earin

g by

a c

ompe

tent

, ind

epen

dent

and

im

parti

al tr

ibun

al e

stab

lishe

d by

law

." (I

CC

PR, a

rt. 1

4, p

ara.

1.)

Sim

ilar p

rovi

sion

s can

be

foun

d in

Arti

cle

6(1)

of t

he E

urop

ean

Con

vent

ion

on H

uman

Rig

hts,

whi

ch

stat

es: "

In th

e de

term

inat

ion

of h

is c

ivil

right

s and

obl

igat

ions

or o

f any

crim

inal

cha

rge

agai

nst h

im,

ever

yone

is e

ntitl

ed to

a fa

ir an

d pu

blic

hea

ring

with

in a

reas

onab

le ti

me

by a

n in

depe

nden

t and

im

parti

al tr

ibun

al e

stab

lishe

d by

law

[. .

.]"(E

urop

ean

Con

vent

ion

for t

he P

rote

ctio

n of

Hum

an

Rig

hts a

nd F

unda

men

tal F

reed

oms,

4 N

ovem

ber 1

950,

art.

6, p

ara.

1, 2

13 U

.N.T

.S. 2

22

(her

eina

fter E

CH

R))

and

in A

rticl

e 8(

1) o

f the

Am

eric

an C

onve

ntio

n on

Hum

an R

ight

s, w

hich

pro

vide

s: "

Ever

y pe

rson

has

the

right

to a

hea

ring,

with

due

gua

rant

ees a

nd w

ithin

a re

ason

able

tim

e, b

y a

com

pete

nt, i

ndep

ende

nt a

nd im

parti

al tr

ibun

al, p

revi

ousl

y es

tabl

ishe

d by

law

." (A

mer

ican

C

onve

ntio

n on

Hum

an R

ight

s, 22

Nov

embe

r 196

9, a

rt. 8

, par

a. 1

, O.A

.S. T

reat

y Se

ries N

o. 3

6, a

t 1,

O.A

.S. O

ff. R

ec. O

EA/S

er. L

/V/II

.23

doc.

rev.

2 (h

erei

nafte

r AC

HR

).)"

App

ella

nt a

rgue

s tha

t the

righ

t to

have

a c

rimin

al c

harg

e de

term

ined

by

a tri

buna

l est

ablis

hed

by la

w is

on

e w

hich

form

s par

t of i

nter

natio

nal l

aw a

s a "

gene

ral p

rinci

ple

of la

w re

cogn

ized

by

civi

lized

nat

ions

",

one

of th

e so

urce

s of i

nter

natio

nal l

aw in

Arti

cle

38 o

f the

Sta

tute

of t

he In

tern

atio

nal C

ourt

of Ju

stic

e. In

su

ppor

t of t

his a

sser

tion,

App

ella

nt e

mph

asis

es th

e fu

ndam

enta

l nat

ure

of th

e "f

air t

rial"

or "

due

proc

ess"

gu

aran

tees

aff

orde

d in

the

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s, th

e Eu

rope

an C

onve

ntio

n on

Hum

an R

ight

s and

the

Am

eric

an C

onve

ntio

n on

Hum

an R

ight

s. A

ppel

lant

ass

erts

that

they

are

m

inim

um re

quire

men

ts in

inte

rnat

iona

l law

for t

he a

dmin

istra

tion

of c

rimin

al ju

stic

e.

42. F

or th

e re

ason

s out

lined

bel

ow, A

ppel

lant

has

not

satis

fied

this

Cha

mbe

r tha

t the

requ

irem

ents

laid

do

wn

in th

ese

thre

e co

nven

tions

mus

t app

ly n

ot o

nly

in th

e co

ntex

t of n

atio

nal l

egal

syst

ems b

ut a

lso

with

re

spec

t to

proc

eedi

ngs c

ondu

cted

bef

ore

an in

tern

atio

nal c

ourt.

Thi

s Cha

mbe

r is,

how

ever

, sat

isfie

d th

at

the

prin

cipl

e th

at a

trib

unal

mus

t be

esta

blis

hed

by la

w, a

s exp

lain

ed b

elow

, is a

gen

eral

prin

cipl

e of

law

449

impo

sing

an

inte

rnat

iona

l obl

igat

ion

whi

ch o

nly

appl

ies t

o th

e ad

min

istra

tion

of c

rimin

al ju

stic

e in

a

mun

icip

al se

tting

. It f

ollo

ws f

rom

this

prin

cipl

e th

at it

is in

cum

bent

on

all S

tate

s to

orga

nize

thei

r sys

tem

of

crim

inal

just

ice

in su

ch a

way

as t

o en

sure

that

all

indi

vidu

als a

re g

uara

ntee

d th

e rig

ht to

hav

e a

crim

inal

cha

rge

dete

rmin

ed b

y a

tribu

nal e

stab

lishe

d by

law

. Thi

s doe

s not

mea

n, h

owev

er, t

hat,

by

cont

rast

, an

inte

rnat

iona

l crim

inal

cou

rt co

uld

be se

t up

at th

e m

ere

whi

m o

f a g

roup

of g

over

nmen

ts.

Such

a c

ourt

ough

t to

be ro

oted

in th

e ru

le o

f law

and

off

er a

ll gu

aran

tees

em

bodi

ed in

the

rele

vant

in

tern

atio

nal i

nstru

men

ts. T

hen

the

cour

t may

be

said

to b

e "e

stab

lishe

d by

law

."

43. I

ndee

d, th

ere

are

thre

e po

ssib

le in

terp

reta

tions

of t

he te

rm "

esta

blis

hed

by la

w."

Firs

t, as

App

ella

nt

argu

es, "

esta

blis

hed

by la

w"

coul

d m

ean

esta

blis

hed

by a

legi

slat

ure.

App

ella

nt c

laim

s tha

t the

In

tern

atio

nal T

ribun

al is

the

prod

uct o

f a "

mer

e ex

ecut

ive

orde

r" a

nd n

ot o

f a "

deci

sion

mak

ing

proc

ess

unde

r dem

ocra

tic c

ontro

l, ne

cess

ary

to c

reat

e a

judi

cial

org

anis

atio

n in

a d

emoc

ratic

soci

ety.

" Th

eref

ore

App

ella

nt m

aint

ains

that

the

Inte

rnat

iona

l Trib

unal

not

bee

n "e

stab

lishe

d by

law

." (D

efen

ce A

ppea

l Brie

f, at

par

a. 5

.4.)

The

case

law

app

lyin

g th

e w

ords

"es

tabl

ishe

d by

law

" in

the

Euro

pean

Con

vent

ion

on H

uman

Rig

hts h

as

favo

ured

this

inte

rpre

tatio

n of

the

expr

essi

on. T

his c

ase

law

bea

rs o

ut th

e vi

ew th

at th

e re

leva

nt p

rovi

sion

is

inte

nded

to e

nsur

e th

at tr

ibun

als i

n a

dem

ocra

tic so

ciet

y m

ust n

ot d

epen

d on

the

disc

retio

n of

the

exec

utiv

e; ra

ther

they

shou

ld b

e re

gula

ted

by la

w e

man

atin

g fr

om P

arlia

men

t. (S

ee Z

and

v. A

ustri

a, A

pp.

No.

736

0/76

, 15

Eur.

Com

m'n

H.R

. Dec

. & R

ep. 7

0, a

t 80

(197

9); P

iers

ack

v. B

elgi

um, A

pp. N

o.

8692

/79,

47

Eur.

Ct.

H.R

. (se

r. B

) at 1

2 (1

981)

; Cro

cian

i, Pa

lmio

tti, T

anas

si a

nd D

'Ovi

dio

v. It

aly,

App

. N

os. 8

603/

79, 8

722/

79, 8

723/

79 &

872

9/79

(joi

ned)

22

Eur.

Com

m'n

H.R

. Dec

. & R

ep. 1

47, a

t 219

(1

981)

.)

Or,

put a

noth

er w

ay, t

he g

uara

ntee

is in

tend

ed to

ens

ure

that

the

adm

inis

tratio

n of

just

ice

is n

ot a

mat

ter

of e

xecu

tive

disc

retio

n, b

ut is

regu

late

d by

law

s mad

e by

the

legi

slat

ure.

It is

cle

ar th

at th

e le

gisl

ativ

e, e

xecu

tive

and

judi

cial

div

isio

n of

pow

ers w

hich

is la

rgel

y fo

llow

ed in

mos

t m

unic

ipal

syst

ems d

oes n

ot a

pply

to th

e in

tern

atio

nal s

ettin

g no

r, m

ore

spec

ifica

lly, t

o th

e se

tting

of a

n in

tern

atio

nal o

rgan

izat

ion

such

as t

he U

nite

d N

atio

ns. A

mon

g th

e pr

inci

pal o

rgan

s of t

he U

nite

d N

atio

ns

the

divi

sion

s bet

wee

n ju

dici

al, e

xecu

tive

and

legi

slat

ive

func

tions

are

not

cle

ar c

ut. R

egar

ding

the

judi

cial

fu

nctio

n, th

e In

tern

atio

nal C

ourt

of Ju

stic

e is

cle

arly

the

"prin

cipa

l jud

icia

l org

an"

(see

Uni

ted

Nat

ions

C

harte

r, ar

t. 92

). Th

ere

is, h

owev

er, n

o le

gisl

atur

e, in

the

tech

nica

l sen

se o

f the

term

, in

the

Uni

ted

Nat

ions

syst

em a

nd, m

ore

gene

rally

, no

Parli

amen

t in

the

wor

ld c

omm

unity

. Tha

t is t

o sa

y, th

ere

exis

ts

no c

orpo

rate

org

an fo

rmal

ly e

mpo

wer

ed to

ena

ct la

ws d

irect

ly b

indi

ng o

n in

tern

atio

nal l

egal

subj

ects

.

It is

cle

arly

impo

ssib

le to

cla

ssify

the

orga

ns o

f the

Uni

ted

Nat

ions

into

the

abov

e-di

scus

sed

divi

sion

s w

hich

exi

st in

the

natio

nal l

aw o

f Sta

tes.

Inde

ed, A

ppel

lant

has

agr

eed

that

the

cons

titut

iona

l stru

ctur

e of

th

e U

nite

d N

atio

ns d

oes n

ot fo

llow

the

divi

sion

of p

ower

s ofte

n fo

und

in n

atio

nal c

onst

itutio

ns.

Con

sequ

ently

the

sepa

ratio

n of

pow

ers e

lem

ent o

f the

requ

irem

ent t

hat a

trib

unal

be

"est

ablis

hed

by la

w"

finds

no

appl

icat

ion

in a

n in

tern

atio

nal l

aw se

tting

. The

afo

rem

entio

ned

prin

cipl

e ca

n on

ly im

pose

an

oblig

atio

n on

Sta

tes c

once

rnin

g th

e fu

nctio

ning

of t

heir

own

natio

nal s

yste

ms.

44. A

seco

nd p

ossi

ble

inte

rpre

tatio

n is

that

the

wor

ds "e

stab

lishe

d by

law

" ref

er to

est

ablis

hmen

t of

inte

rnat

iona

l cou

rts b

y a

body

whi

ch, t

houg

h no

t a P

arlia

men

t, ha

s a li

mite

d po

wer

to ta

ke b

indi

ng

deci

sion

s. In

our

vie

w, o

ne su

ch b

ody

is th

e Se

curit

y C

ounc

il w

hen,

act

ing

unde

r Cha

pter

VII

of t

he

Uni

ted

Nat

ions

Cha

rter,

it m

akes

dec

isio

ns b

indi

ng b

y vi

rtue

of A

rticl

e 25

of t

he C

harte

r.

Acc

ordi

ng to

App

ella

nt, h

owev

er, t

here

mus

t be

som

ethi

ng m

ore

for a

trib

unal

to b

e "e

stab

lishe

d by

law

."

App

ella

nt ta

kes t

he p

ositi

on th

at, g

iven

the

diff

eren

ces b

etw

een

the

Uni

ted

Nat

ions

syst

em a

nd n

atio

nal

divi

sion

of p

ower

s, di

scus

sed

abov

e, th

e co

nclu

sion

mus

t be

that

the

Uni

ted

Nat

ions

syst

em is

not

capa

ble

of c

reat

ing

the

Inte

rnat

iona

l Trib

unal

unl

ess t

here

is a

n am

endm

ent t

o th

e U

nite

d N

atio

ns

Cha

rter.

We

disa

gree

. It d

oes n

ot fo

llow

from

the

fact

that

the

Uni

ted

Nat

ions

has

no

legi

slat

ure

that

the

Secu

rity

Cou

ncil

is n

ot e

mpo

wer

ed to

set u

p th

is In

tern

atio

nal T

ribun

al if

it is

act

ing

purs

uant

to a

n au

thor

ity fo

und

with

in it

s con

stitu

tion,

the

Uni

ted

Nat

ions

Cha

rter.

As s

et o

ut a

bove

(par

as. 2

8-40

) we

are

of th

e vi

ew th

at th

e Se

curit

y C

ounc

il w

as e

ndow

ed w

ith th

e po

wer

to c

reat

e th

is In

tern

atio

nal T

ribun

al a

s a

mea

sure

und

er C

hapt

er V

II in

the

light

of i

ts d

eter

min

atio

n th

at th

ere

exis

ts a

thre

at to

the

peac

e.

In a

dditi

on, t

he e

stab

lishm

ent o

f the

Inte

rnat

iona

l Trib

unal

has

bee

n re

peat

edly

app

rove

d an

d en

dors

ed b

y th

e "r

epre

sent

ativ

e" o

rgan

of t

he U

nite

d N

atio

ns, t

he G

ener

al A

ssem

bly:

this

bod

y no

t onl

y pa

rtici

pate

d in

its s

ettin

g up

, by

elec

ting

the

Judg

es a

nd a

ppro

ving

the

budg

et, b

ut a

lso

expr

esse

d its

satis

fact

ion

with

, an

d en

cour

agem

ent o

f the

act

iviti

es o

f the

Inte

rnat

iona

l Trib

unal

in v

ario

us re

solu

tions

. (Se

e G

.A. R

es.

48/8

8 (2

0 D

ecem

ber 1

993)

and

G.A

. Res

. 48/

143

(20

Dec

embe

r 199

3), G

.A. R

es. 4

9/10

(8 N

ovem

ber

1994

) and

G.A

. Res

. 49/

205

(23

Dec

embe

r 199

4).)

45. T

he th

ird p

ossi

ble

inte

rpre

tatio

n of

the

requ

irem

ent t

hat t

he In

tern

atio

nal T

ribun

al b

e "e

stab

lishe

d by

la

w"

is th

at it

s est

ablis

hmen

t mus

t be

in a

ccor

danc

e w

ith th

e ru

le o

f law

. Thi

s app

ears

to b

e th

e m

ost

sens

ible

and

mos

t lik

ely

mea

ning

of t

he te

rm in

the

cont

ext o

f int

erna

tiona

l law

. For

a tr

ibun

al su

ch a

s th

is o

ne to

be

esta

blis

hed

acco

rdin

g to

the

rule

of l

aw, i

t mus

t be

esta

blis

hed

in a

ccor

danc

e w

ith th

e pr

oper

inte

rnat

iona

l sta

ndar

ds; i

t mus

t pro

vide

all

the

guar

ante

es o

f fai

rnes

s, ju

stic

e an

d ev

en-h

ande

dnes

s, in

full

conf

orm

ity w

ith in

tern

atio

nally

reco

gniz

ed h

uman

righ

ts in

stru

men

ts.

This

inte

rpre

tatio

n of

the

guar

ante

e th

at a

trib

unal

be

"est

ablis

hed

by la

w" i

s bor

ne o

ut b

y an

ana

lysi

s of

the

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s. A

s not

ed b

y th

e Tr

ial C

ham

ber,

at th

e tim

e A

rticl

e 14

of t

he In

tern

atio

nal C

oven

ant o

n C

ivil

and

Polit

ical

Rig

hts w

as b

eing

dra

fted,

it w

as so

ught

, un

succ

essf

ully

, to

amen

d it

to re

quire

that

trib

unal

s sho

uld

be "

pre-

esta

blis

hed"

by

law

and

not

mer

ely

"est

ablis

hed

by la

w"

(Dec

isio

n at

Tria

l, at

par

a. 3

4). T

wo

sim

ilar p

ropo

sals

to th

is e

ffec

t wer

e m

ade

(one

by

the

repr

esen

tativ

e of

Leb

anon

and

one

by

the

repr

esen

tativ

e of

Chi

le);

if ad

opte

d, th

eir e

ffec

t wou

ld

have

bee

n to

pre

vent

all

ad h

oc tr

ibun

als.

In re

spon

se, t

he d

eleg

ate

from

the

Phili

ppin

es n

oted

the

disa

dvan

tage

s of u

sing

the

lang

uage

of "

pre-

esta

blis

hed

by la

w":

"If [

the

Chi

lean

or L

eban

ese

prop

osal

was

app

rove

d], a

cou

ntry

wou

ld n

ever

be

able

to re

orga

nize

its

trib

unal

s. Si

mila

rly it

cou

ld b

e cl

aim

ed th

at th

e N

ürnb

erg

tribu

nal w

as n

ot in

exi

sten

ce a

t the

tim

e th

e w

ar c

rimin

als h

ad c

omm

itted

thei

r crim

es."

(See

E/C

N.4

/SR

109

. Uni

ted

Nat

ions

Ec

onom

ic a

nd S

ocia

l Cou

ncil,

Com

mis

sion

on

Hum

an R

ight

s, 5t

h Se

ss.,

Sum

. Rec

. 8 Ju

ne 1

949,

U

.N. D

oc. 6

.)

As n

oted

by

the

Tria

l Cha

mbe

r in

its D

ecis

ion,

ther

e is

wid

e ag

reem

ent t

hat,

in m

ost r

espe

cts,

the

Inte

rnat

iona

l Mili

tary

Trib

unal

s at N

urem

berg

and

Tok

yo g

ave

the

accu

sed

a fa

ir tri

al in

a p

roce

dura

l se

nse

(Dec

isio

n at

Tria

l, at

par

a. 3

4). T

he im

porta

nt c

onsi

dera

tion

in d

eter

min

ing

whe

ther

a tr

ibun

al h

as

been

"es

tabl

ishe

d by

law

" is n

ot w

heth

er it

was

pre

-est

ablis

hed

or e

stab

lishe

d fo

r a sp

ecifi

c pu

rpos

e or

si

tuat

ion;

wha

t is i

mpo

rtant

is th

at it

be

set u

p by

a c

ompe

tent

org

an in

kee

ping

with

the

rele

vant

lega

l pr

oced

ures

, and

shou

ld th

at it

obs

erve

s the

requ

irem

ents

of p

roce

dura

l fai

rnes

s.

This

con

cern

abo

ut a

d ho

c tri

buna

ls th

at fu

nctio

n in

such

a w

ay a

s not

to a

ffor

d th

e in

divi

dual

bef

ore

them

bas

ic fa

ir tri

al g

uara

ntee

s als

o un

derli

es U

nite

d N

atio

ns H

uman

Rig

hts C

omm

ittee

's in

terp

reta

tion

of th

e ph

rase

"es

tabl

ishe

d by

law

" con

tain

ed in

Arti

cle

14, p

arag

raph

1, o

f the

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s. W

hile

the

Hum

an R

ight

s Com

mitt

ee h

as n

ot d

eter

min

ed th

at "

extra

ordi

nary

" tri

buna

ls o

r "sp

ecia

l" c

ourts

are

inco

mpa

tible

with

the

requ

irem

ent t

hat t

ribun

als b

e es

tabl

ishe

d by

law

, it

has t

aken

the

posi

tion

that

the

prov

isio

n is

inte

nded

to e

nsur

e th

at a

ny c

ourt,

be

it "e

xtra

ordi

nary

" or

not

, sh

ould

gen

uine

ly a

ffor

d th

e ac

cuse

d th

e fu

ll gu

aran

tees

of f

air t

rial s

et o

ut in

Arti

cle

14 o

f the

In

tern

atio

nal C

oven

ant o

n C

ivil

and

Polit

ical

Rig

hts.

(See

Gen

eral

Com

men

t on

Arti

cle

14, H

.R. C

omm

.

450

43rd

Ses

s., S

upp.

No.

40,

at p

ara.

4, U

.N. D

oc. A

/43/

40 (1

988)

, Car

ibon

i v. U

rugu

ay H

.R.C

omm

. 159

/83.

39

th S

ess.

Supp

. No.

40

U.N

. Doc

. A/3

9/40

.) A

sim

ilar a

ppro

ach

has b

een

take

n by

the

Inte

r-A

mer

ican

C

omm

issi

on. (

See,

e.g

., In

ter-

Am

C.H

.R.,

Ann

ual R

epor

t 197

2, O

EA/S

er. P

, AG

/doc

. 305

/73

rev.

1, 1

4 M

arch

197

3, a

t 1; I

nter

-Am

C.H

.R.,

Ann

ual R

epor

t 197

3, O

EA/S

er. P

, AG

/doc

. 409

/174

, 5 M

arch

197

4,

at 2

-4.)

The

prac

tice

of th

e H

uman

Rig

hts C

omm

ittee

with

resp

ect t

o St

ate

repo

rting

obl

igat

ions

indi

cate

s its

tend

ency

to sc

rutin

ise

clos

ely

"spe

cial

" or

"ex

traor

dina

ry"

crim

inal

cou

rts in

ord

er to

asc

erta

in w

heth

er

they

ens

ure

com

plia

nce

with

the

fair

trial

requ

irem

ents

of A

rticl

e 14

.

46. A

n ex

amin

atio

n of

the

Stat

ute

of th

e In

tern

atio

nal T

ribun

al, a

nd o

f the

Rul

es o

f Pro

cedu

re a

nd

Evid

ence

ado

pted

pur

suan

t to

that

Sta

tute

lead

s to

the

conc

lusi

on th

at it

has

bee

n es

tabl

ishe

d in

ac

cord

ance

with

the

rule

of l

aw. T

he fa

ir tri

al g

uara

ntee

s in

Arti

cle

14 o

f the

Inte

rnat

iona

l Cov

enan

t on

Civ

il an

d Po

litic

al R

ight

s hav

e be

en a

dopt

ed a

lmos

t ver

batim

in A

rticl

e 21

of t

he S

tatu

te. O

ther

fair

trial

gu

aran

tees

app

ear i

n th

e St

atut

e an

d th

e R

ules

of P

roce

dure

and

Evi

denc

e. F

or e

xam

ple,

Arti

cle

13,

para

grap

h 1,

of t

he S

tatu

te e

nsur

es th

e hi

gh m

oral

cha

ract

er, i

mpa

rtial

ity, i

nteg

rity

and

com

pete

nce

of th

e Ju

dges

of t

he In

tern

atio

nal T

ribun

al, w

hile

var

ious

oth

er p

rovi

sion

s in

the

Rul

es e

nsur

e eq

ualit

y of

arm

s an

d fa

ir tri

al.

47. I

n co

nclu

sion

, the

App

eals

Cha

mbe

r fin

ds th

at th

e In

tern

atio

nal T

ribun

al h

as b

een

esta

blis

hed

in

acco

rdan

ce w

ith th

e ap

prop

riate

pro

cedu

res u

nder

the

Uni

ted

Nat

ions

Cha

rter a

nd p

rovi

des a

ll th

e ne

cess

ary

safe

guar

ds o

f a fa

ir tri

al. I

t is t

hus "

esta

blis

hed

by la

w."

48. T

he fi

rst g

roun

d of

App

eal:

unla

wfu

l est

ablis

hmen

t of t

he In

tern

atio

nal T

ribun

al, i

s acc

ordi

ngly

di

smis

sed.

III.

UN

JUST

IFIE

D P

RIM

AC

Y O

F T

HE

INT

ER

NA

TIO

NA

L T

RIB

UN

AL

OV

ER

CO

MPE

TE

NT

D

OM

EST

IC C

OU

RT

S

49. T

he se

cond

gro

und

of a

ppea

l atta

cks t

he p

rimac

y of

the

Inte

rnat

iona

l Trib

unal

ove

r nat

iona

l cou

rts.

50. T

his p

rimac

y is

est

ablis

hed

by A

rticl

e 9

of th

e St

atut

e of

the

Inte

rnat

iona

l Trib

unal

, whi

ch p

rovi

des:

"Con

curr

ent j

uris

dict

ion

1. T

he In

tern

atio

nal T

ribun

al a

nd n

atio

nal c

ourts

shal

l hav

e co

ncur

rent

juris

dict

ion

to p

rose

cute

pe

rson

s for

serio

us v

iola

tions

of i

nter

natio

nal h

uman

itaria

n la

w c

omm

itted

in th

e te

rrito

ry o

f the

fo

rmer

Yug

osla

via

sinc

e 1

Janu

ary

1991

.

2. T

he In

tern

atio

nal T

ribu

nal s

hall

have

pri

mac

y ov

er n

atio

nal c

ourt

s. A

t any

stag

e of

the

proc

edur

e, th

e In

tern

atio

nal T

ribun

al m

ay fo

rmal

ly re

ques

t nat

iona

l cou

rts to

def

er to

the

com

pete

nce

of th

e In

tern

atio

nal T

ribun

al in

acc

orda

nce

with

the

pres

ent S

tatu

te a

nd th

e R

ules

of

Proc

edur

e an

d Ev

iden

ce o

f the

Inte

rnat

iona

l Trib

unal

." (E

mph

asis

add

ed.)

App

ella

nt's

subm

issi

on is

mat

eria

l to

the

issu

e, in

asm

uch

as A

ppel

lant

is e

xpec

ted

to st

and

trial

bef

ore

this

Inte

rnat

iona

l Trib

unal

as a

con

sequ

ence

of a

requ

est f

or d

efer

ral w

hich

the

Inte

rnat

iona

l Trib

unal

su

bmitt

ed to

the

Gov

ernm

ent o

f the

Fed

eral

Rep

ublic

of G

erm

any

on 8

Nov

embe

r 199

4 an

d w

hich

this

G

over

nmen

t, as

it w

as b

ound

to d

o, a

gree

d to

hon

our b

y su

rren

derin

g A

ppel

lant

to th

e In

tern

atio

nal

Trib

unal

. (U

nite

d N

atio

ns C

harte

r, ar

t. 25

, 48

& 4

9; S

tatu

te o

f the

Trib

unal

, art.

29.

2(e)

; Rul

es o

f Pr

oced

ure,

Rul

e 10

.)

In re

leva

nt p

art,

App

ella

nt's

mot

ion

alle

ges:

" [T

he In

tern

atio

nal T

ribun

al's]

prim

acy

over

dom

estic

cou

rts

cons

titut

es a

n in

frin

gem

ent u

pon

the

sove

reig

nty

of th

e St

ates

dire

ctly

aff

ecte

d."

([D

efen

ce] M

otio

n on

451

Statute of the Administrative Tribunal of the International

Bank for Reconstruction and Development, International

Development Association and International Finance

Corporation

Adopted by the Board of Governors on 30 April 1980 and

amended on 31 July 2001 and on 18 June 2009

Stat

ute

of th

e Ad

min

istr

ativ

e Tr

ibun

al o

f the

Inte

rnat

iona

l Ban

k fo

r Rec

onst

ruct

ion

and

Dev

elop

men

t, In

tern

atio

nal

Dev

elop

men

t Ass

ocia

tion

and

Inte

rnat

iona

l Fin

ance

C

orpo

ratio

n

as a

dopt

ed b

y th

e B

oard

of G

over

nors

on

30 A

pril

1980

and

am

ende

d

on 3

1 Ju

ly 2

001

and

on 1

8 Ju

ne 2

009

Art

icle

I

1. T

here

is h

ereb

y es

tabl

ishe

d a

Trib

unal

of t

he In

tern

atio

nal B

ank

for R

econ

stru

ctio

n an

d D

evel

opm

ent

(her

eina

fter r

efer

red

to in

divi

dual

ly a

s th

e "B

ank"

), th

e In

tern

atio

nal D

evel

opm

ent A

ssoc

iatio

n an

d th

e In

tern

atio

nal F

inan

ce C

orpo

ratio

n (to

geth

er w

ith th

e B

ank

here

inaf

ter r

efer

red

to c

olle

ctiv

ely

as th

e "B

ank

Gro

up")

to

be

know

n as

the

Wor

ld B

ank

Adm

inis

trativ

e Tr

ibun

al.

2. T

he T

ribun

al is

a ju

dici

al b

ody

that

func

tions

inde

pend

ently

of t

he m

anag

emen

t of t

he B

ank

Gro

up. T

he

inde

pend

ence

of t

he T

ribun

al s

hall

be g

uara

ntee

d an

d re

spec

ted

by th

e B

ank

Gro

up a

t all

times

.

Art

icle

II

1. T

he T

ribun

al s

hall

hear

and

pas

s ju

dgm

ent u

pon

any

appl

icat

ion

by w

hich

a m

embe

r of t

he s

taff

of th

e B

ank

Gro

up a

llege

s no

n-ob

serv

ance

of t

he c

ontra

ct o

f em

ploy

men

t or t

erm

s of

app

oint

men

t of s

uch

staf

f mem

ber.

The

wor

ds "c

ontra

ct o

f em

ploy

men

t" an

d "te

rms

of a

ppoi

ntm

ent"

incl

ude

all p

ertin

ent r

egul

atio

ns a

nd ru

les

in fo

rce

at

the

time

of a

llege

d no

n-ob

serv

ance

incl

udin

g th

e pr

ovis

ions

of t

he S

taff

Ret

irem

ent P

lan.

2. N

o su

ch a

pplic

atio

n sh

all b

e ad

mis

sibl

e, e

xcep

t und

er e

xcep

tiona

l circ

umst

ance

s as

dec

ided

by

the

Trib

unal

, un

less

:

(i) th

e ap

plic

ant h

as e

xhau

sted

all

othe

r rem

edie

s av

aila

ble

with

in th

e Ba

nk G

roup

, exc

ept i

f the

app

lican

t and

the

resp

onde

nt in

stitu

tion

have

agr

eed

to s

ubm

it th

e ap

plic

atio

n di

rect

ly to

the

Trib

unal

; and

(ii) t

he a

pplic

atio

n is

file

d w

ithin

one

hun

dred

and

twen

ty d

ays

afte

r the

late

st o

f the

follo

win

g:

(a) t

he o

ccur

renc

e of

the

even

t giv

ing

rise

to th

e ap

plic

atio

n;

(b) r

ecei

pt o

f not

ice,

afte

r the

app

lican

t has

exh

aust

ed a

ll ot

her r

emed

ies

avai

labl

e w

ithin

the

Ban

k G

roup

, tha

t th

e re

lief a

sked

for o

r rec

omm

ende

d w

ill n

ot b

e gr

ante

d; o

r

(c) r

ecei

pt o

f not

ice

that

the

relie

f ask

ed fo

r or r

ecom

men

ded

will

be

gran

ted,

if s

uch

relie

f sha

ll no

t hav

e be

en

gran

ted

with

in th

irty

days

afte

r rec

eipt

of s

uch

notic

e.

3. F

or th

e pu

rpos

e of

this

sta

tute

:

the

expr

essi

on "m

embe

r of t

he s

taff"

mea

ns a

ny c

urre

nt o

r for

mer

mem

ber o

f the

sta

ff of

the

Ban

k G

roup

, any

pe

rson

who

is e

ntitl

ed to

cla

im u

pon

a rig

ht o

f a m

embe

r of t

he s

taff

as a

per

sona

l rep

rese

ntat

ive

or b

y re

ason

of

the

staf

f mem

ber's

dea

th, a

nd a

ny p

erso

n de

sign

ated

or o

ther

wis

e en

title

d to

rec

eive

a p

aym

ent u

nder

any

pr

ovis

ion

of th

e St

aff R

etire

men

t Pla

n.

Art

icle

III

In th

e ev

ent o

f a d

ispu

te a

s to

whe

ther

the

Trib

unal

has

com

pete

nce,

the

mat

ter s

hall

be s

ettle

d by

the

Trib

unal

.

Art

icle

IV

1. T

he T

ribun

al s

hall

be c

ompo

sed

of s

even

mem

bers

, all

of w

hom

sha

ll be

nat

iona

ls o

f Mem

ber S

tate

s of

the

Ban

k, b

ut n

o tw

o of

who

m s

hall

be n

atio

nals

of t

he s

ame

Stat

e. T

he m

embe

rs o

f the

Trib

unal

sha

ll be

per

sons

of

high

mor

al c

hara

cter

and

mus

t pos

sess

the

qual

ifica

tions

requ

ired

for a

ppoi

ntm

ent t

o hi

gh ju

dici

al o

ffice

or b

e ju

risco

nsul

ts o

f rec

ogni

zed

com

pete

nce

in re

leva

nt fi

elds

suc

h as

em

ploy

men

t rel

atio

ns, i

nter

natio

nal c

ivil

serv

ice

and

inte

rnat

iona

l org

aniz

atio

n ad

min

istra

tion.

Cur

rent

and

form

er s

taff

of th

e B

ank

Gro

up s

hall

not b

e el

igib

le to

se

rve

as m

embe

rs o

f the

Trib

unal

and

mem

bers

may

not

be

empl

oyed

by

the

Ban

k G

roup

follo

win

g th

eir s

ervi

ce

on th

e Tr

ibun

al.

2. T

he m

embe

rs o

f the

Trib

unal

sha

ll be

app

oint

ed b

y th

e E

xecu

tive

Dire

ctor

s of

the

Ban

k fro

m a

list

of

cand

idat

es n

omin

ated

by

the

Pre

side

nt o

f the

Ban

k af

ter a

ppro

pria

te c

onsu

ltatio

n. F

or th

is p

urpo

se, t

he P

resi

dent

sh

all a

ppoi

nt a

n ad

viso

ry c

omm

ittee

com

pose

d of

four

mem

bers

with

rele

vant

exp

erie

nce.

3. T

he m

embe

rs o

f the

Trib

unal

sha

ll be

app

oint

ed fo

r a te

rm o

f fiv

e ye

ars;

they

may

be

reap

poin

ted

for o

ne

addi

tiona

l ter

m o

f fiv

e ye

ars.

How

ever

, of t

he s

even

mem

bers

app

oint

ed in

200

1, th

e te

rms

of th

ree

mem

bers

sh

all e

xpire

at t

he e

nd o

f thr

ee y

ears

. Any

mem

ber w

ho s

hall

have

ser

ved

one

or m

ore

full

term

s of

offi

ce a

s of

O

ctob

er 1

, 200

1 sh

all b

e el

igib

le fo

r rea

ppoi

ntm

ent f

or o

ne a

dditi

onal

term

.

4. A

mem

ber a

ppoi

nted

to re

plac

e a

mem

ber w

hose

term

of o

ffice

has

not

exp

ired

shal

l hol

d of

fice

for t

he

rem

aind

er o

f his

pre

dece

ssor

's te

rm, a

nd m

ay b

e ap

poin

ted

and

reap

poin

ted

in a

ccor

danc

e w

ith th

e pr

ovis

ions

of

para

grap

hs 2

and

3 o

f thi

s A

rticl

e IV

.

5. T

he m

embe

rs o

f the

Trib

unal

sha

ll ho

ld o

ffice

unt

il re

plac

ed.

6. M

embe

rs o

f the

Trib

unal

sha

ll en

joy

the

sam

e im

mun

ities

that

app

ly to

offi

cial

s of

the

Ban

k G

roup

with

resp

ect

to a

cts

perfo

rmed

by

them

in th

e ex

erci

se o

f the

ir fu

nctio

ns.

AR

TIC

LE V

1. A

quo

rum

of f

ive

mem

bers

sha

ll su

ffice

to c

onst

itute

the

Trib

unal

.

2. T

he T

ribun

al m

ay, h

owev

er, a

t any

tim

e fo

rm a

pan

el o

f not

less

than

thre

e of

its

mem

bers

for d

ealin

g w

ith a

pa

rticu

lar c

ase

or g

roup

of c

ases

. Dec

isio

ns o

f suc

h a

pane

l sha

ll be

dee

med

to b

e ta

ken

by th

e Tr

ibun

al.

AR

TIC

LE V

I

1. T

he T

ribun

al s

hall

elec

t a P

resi

dent

and

two

Vic

e-P

resi

dent

s fro

m a

mon

g its

mem

bers

.

2. T

he P

resi

dent

of t

he B

ank

shal

l mak

e th

e ad

min

istra

tive

arra

ngem

ents

nec

essa

ry fo

r the

func

tioni

ng o

f the

Tr

ibun

al, i

nclu

ding

des

igna

ting

an E

xecu

tive

Sec

reta

ry w

ho, i

n th

e di

scha

rge

of d

utie

s, s

hall

be re

spon

sibl

e on

ly

to th

e Tr

ibun

al.

3. T

he e

xpen

ses

of th

e Tr

ibun

al s

hall

be b

orne

by

the

Ban

k G

roup

. The

Trib

unal

sha

ll pr

epar

e an

d m

anag

e its

bu

dget

inde

pend

ently

.

AR

TIC

LE V

II

1. S

ubje

ct to

the

prov

isio

ns o

f the

pre

sent

Sta

tute

, the

Trib

unal

sha

ll es

tabl

ish

its ru

les.

2. T

he ru

les

shal

l inc

lude

pro

visi

ons

conc

erni

ng:

(a) e

lect

ion

of th

e P

resi

dent

and

Vic

e-P

resi

dent

s;

(b) c

onst

itutio

n of

pan

els

envi

sage

d in

Arti

cle

V a

bove

;

(c) p

rese

ntat

ion

of a

pplic

atio

ns a

nd th

e pr

oced

ure

to b

e fo

llow

ed in

resp

ect o

f the

m;

(d) i

nter

vent

ion

by p

erso

ns to

who

m th

e Tr

ibun

al is

ope

n un

der p

arag

raph

3 o

f Arti

cle

II, w

hose

righ

ts m

ay b

e af

fect

ed b

y th

e ju

dgm

ent;

(e) h

earin

g, fo

r pur

pose

s of

info

rmat

ion,

of p

erso

ns to

who

m th

e Tr

ibun

al is

ope

n un

der p

arag

raph

3 o

f Arti

cle

II;

and

(f) o

ther

mat

ters

rela

ting

to th

e fu

nctio

ning

of t

he T

ribun

al.

AR

TIC

LE V

III

1. T

he T

ribun

al s

hall

hold

ses

sion

s at

dat

es to

be

fixed

in a

ccor

danc

e w

ith it

s ru

les.

2. T

he T

ribun

al s

hall

hold

its

sess

ions

at t

he p

rinci

pal o

ffice

of t

he B

ank,

unl

ess

it co

nsid

ers

that

the

effic

ient

co

nduc

t of t

he p

roce

edin

gs u

pon

an a

pplic

atio

n ne

cess

itate

s ho

ldin

g se

ssio

ns e

lsew

here

.

AR

TIC

LE I

X

The

Trib

unal

sha

ll de

cide

in e

ach

case

whe

ther

ora

l pro

ceed

ings

are

war

rant

ed. O

ral p

roce

edin

gs s

hall

be h

eld

in

publ

ic, u

nles

s th

e Tr

ibun

al d

ecid

es th

at e

xcep

tiona

l circ

umst

ance

s re

quire

that

they

be

held

in p

rivat

e.

AR

TIC

LE X

1. T

he T

ribun

al s

hall

take

all

its d

ecis

ions

by

a m

ajor

ity o

f the

mem

bers

pre

sent

.

2. In

the

even

t of a

n eq

ualit

y of

vot

es, t

he P

resi

dent

or t

he m

embe

r who

act

s in

suc

h pl

ace

shal

l hav

e a

cast

ing

vote

.

AR

TIC

LE X

I

1. J

udgm

ents

sha

ll be

fina

l and

with

out a

ppea

l.

2. E

ach

judg

men

t sha

ll st

ate

the

reas

ons

on w

hich

it is

bas

ed. D

isse

ntin

g an

d co

ncur

ring

opin

ions

, as

wel

l as

clar

ifica

tions

, may

be

set o

ut in

the

judg

men

t.

AR

TIC

LE X

II

1. If

the

Trib

unal

find

s th

at th

e ap

plic

atio

n is

wel

l-fou

nded

, it s

hall

orde

r the

resc

issi

on o

f the

dec

isio

n co

ntes

ted

or

the

spec

ific

perfo

rman

ce o

f the

obl

igat

ion

invo

ked

unle

ss th

e Tr

ibun

al fi

nds

that

the

Res

pond

ent i

nstit

utio

n ha

s re

ason

ably

det

erm

ined

that

suc

h re

scis

sion

or s

peci

fic p

erfo

rman

ce w

ould

not

be

prac

ticab

le o

r in

the

inst

itutio

n’s

inte

rest

. In

that

eve

nt, t

he T

ribun

al s

hall,

inst

ead,

ord

er s

uch

inst

itutio

n to

pay

rest

itutio

n in

the

amou

nt th

at is

re

ason

ably

nec

essa

ry to

com

pens

ate

the

appl

ican

t for

the

actu

al d

amag

es s

uffe

red.

2. S

houl

d th

e Tr

ibun

al fi

nd th

at th

e pr

oced

ure

pres

crib

ed in

the

rule

s of

the

resp

onde

nt in

stitu

tion

has

not b

een

obse

rved

, it m

ay, a

t the

requ

est o

f the

Pre

side

nt o

f suc

h re

spon

dent

and

prio

r to

the

dete

rmin

atio

n of

the

mer

its,

orde

r the

cas

e re

man

ded

for i

nstit

utio

n or

cor

rect

ion

of th

e re

quire

d pr

oced

ure.

3. In

all

appl

icab

le c

ases

, com

pens

atio

n fix

ed b

y th

e Tr

ibun

al s

hall

be p

aid

by th

e re

spon

dent

inst

itutio

n.

4. T

he fi

ling

of a

n ap

plic

atio

n sh

all n

ot h

ave

the

effe

ct o

f sus

pend

ing

exec

utio

n of

the

deci

sion

con

test

ed.

AR

TIC

LE X

III

1. A

par

ty to

a c

ase

in w

hich

a ju

dgm

ent h

as b

een

deliv

ered

may

, in

the

even

t of t

he d

isco

very

of a

fact

whi

ch b

y its

nat

ure

mig

ht h

ave

had

a de

cisi

ve in

fluen

ce o

n th

e ju

dgm

ent o

f the

Trib

unal

and

whi

ch a

t the

tim

e th

e ju

dgm

ent

was

del

iver

ed w

as u

nkno

wn

both

to th

e Tr

ibun

al a

nd to

that

par

ty, r

eque

st th

e Tr

ibun

al, w

ithin

a p

erio

d of

six

m

onth

s af

ter t

hat p

arty

acq

uire

d kn

owle

dge

of s

uch

fact

, to

revi

se th

e ju

dgm

ent.

2. T

he re

ques

t sha

ll co

ntai

n th

e in

form

atio

n ne

cess

ary

to s

how

that

the

cond

ition

s la

id d

own

in p

arag

raph

1 o

f th

is A

rticl

e ha

ve b

een

com

plie

d w

ith. I

t sha

ll be

acc

ompa

nied

by

the

orig

inal

or a

cop

y of

all

supp

ortin

g do

cum

ents

.

AR

TIC

LE X

IV

The

orig

inal

cop

y of

eac

h ju

dgm

ent s

hall

be fi

led

in th

e ar

chiv

es o

f the

Ban

k. A

cop

y of

the

judg

men

t sha

ll be

de

liver

ed to

eac

h of

the

parti

es c

once

rned

. Cop

ies

shal

l als

o be

mad

e av

aila

ble

on re

ques

t to

inte

rest

ed p

erso

ns.

AR

TIC

LE X

V

The

Ban

k m

ay m

ake

agre

emen

ts w

ith a

ny o

ther

inte

rnat

iona

l org

aniz

atio

n fo

r the

sub

mis

sion

of a

pplic

atio

ns o

f m

embe

rs o

f the

ir st

aff t

o th

e Tr

ibun

al. E

ach

such

agr

eem

ent s

hall

prov

ide

that

the

orga

niza

tion

conc

erne

d sh

all

be b

ound

by

the

judg

men

ts o

f the

Trib

unal

and

be

resp

onsi

ble

for t

he p

aym

ent o

f any

com

pens

atio

n aw

arde

d by

th

e Tr

ibun

al in

resp

ect o

f a s

taff

mem

ber o

f tha

t org

aniz

atio

n; th

e ag

reem

ent s

hall

also

incl

ude,

inte

r alia

, pr

ovis

ions

con

cern

ing

the

orga

niza

tion'

s pa

rtici

patio

n in

the

adm

inis

trativ

e ar

rang

emen

ts fo

r the

func

tioni

ng o

f the

Tr

ibun

al a

nd c

once

rnin

g its

sha

ring

of th

e ex

pens

es o

f the

Trib

unal

.

AR

TIC

LE X

VI

The

pres

ent S

tatu

te m

ay b

e am

ende

d by

the

Boa

rd o

f Gov

erno

rs o

f the

Ban

k.

AR

TIC

LE X

VII

Not

with

stan

ding

Arti

cle

II, p

arag

raph

2 o

f the

pre

sent

Sta

tute

, the

Trib

unal

sha

ll be

com

pete

nt to

hea

r any

ap

plic

atio

n co

ncer

ning

a c

ause

of c

ompl

aint

whi

ch a

rose

sub

sequ

ent t

o Ja

nuar

y 1,

197

9, p

rovi

ded,

how

ever

, tha

t th

e ap

plic

atio

n is

file

d w

ithin

90

days

afte

r the

ent

ry in

to fo

rce

of th

e pr

esen

t Sta

tute

.

Rules of The World Bank Administrative Tribunal

Adopted by the Tribunal on September 26 1980 and Amended on

1 January 2002

Rul

es o

f The

Wor

ld B

ank

Adm

inis

trat

ive

Trib

unal

as a

dopt

ed b

y th

e Tr

ibun

al o

n S

epte

mbe

r 26,

198

0 an

d am

ende

d on

1 J

anua

ry 2

002

(Sub

-hea

ding

s ar

e fo

r eas

e of

refe

renc

e on

ly, d

o no

t for

m p

art o

f the

rule

s, a

nd d

o no

t con

stitu

te a

n in

terp

reta

tion

ther

eof.)

CH

AP

TER

I:

Org

aniz

atio

n

Rul

e 1:

Ter

m o

f O

ffic

e of

Mem

bers

Sub

ject

to a

ny c

ontra

ry d

ecis

ion

of th

e E

xecu

tive

Dire

ctor

s of

the

Inte

rnat

iona

l Ban

k fo

r Rec

onst

ruct

ion

and

Dev

elop

men

t (he

rein

afte

r ref

erre

d to

indi

vidu

ally

as

the

"Ban

k" a

nd c

olle

ctiv

ely,

toge

ther

with

the

Inte

rnat

iona

l D

evel

opm

ent A

ssoc

iatio

n an

d th

e In

tern

atio

nal F

inan

ce C

orpo

ratio

n, a

s th

e "B

ank

Gro

up")

, the

term

of o

ffice

of

mem

bers

of t

he T

ribun

al s

hall

com

men

ce o

n th

e fir

st d

ay o

f Oct

ober

of t

he y

ear o

f the

ir ap

poin

tmen

t by

the

Exe

cutiv

e D

irect

ors

of th

e B

ank.

Rul

e 2:

Pre

side

nt

and

Vic

e P

resi

den

ts

1.

The

Trib

unal

sha

ll el

ect a

Pre

side

nt a

nd tw

o V

ice

Pre

side

nts

for t

erm

s of

thre

e ye

ars.

The

Pre

side

nt a

nd

Vic

e P

resi

dent

s th

us e

lect

ed s

hall

take

up

thei

r dut

ies

imm

edia

tely

. The

y m

ay b

e re

-ele

cted

. 2.

Th

e re

tirin

g P

resi

dent

and

Vic

e P

resi

dent

s sh

all r

emai

n in

offi

ce u

ntil

thei

r suc

cess

ors

are

elec

ted.

3.

If

the

Pre

side

nt s

houl

d ce

ase

to b

e a

mem

ber o

f the

Trib

unal

or s

houl

d re

sign

the

offic

e of

Pre

side

nt

befo

re th

e ex

pira

tion

of th

e no

rmal

term

, the

Trib

unal

sha

ll el

ect a

suc

cess

or fo

r the

une

xpire

d po

rtion

of

the

term

. In

the

case

of a

vac

ancy

of a

Vic

e P

resi

dent

, the

Pre

side

nt m

ay a

rran

ge fo

r the

ele

ctio

n of

a

succ

esso

r by

corre

spon

denc

e.

4.

The

elec

tions

sha

ll be

by

maj

ority

vot

e.

Ru

le 3

: D

uti

es o

f P

resi

den

t 1.

Th

e P

resi

dent

sha

ll di

rect

the

wor

k of

the

Trib

unal

and

of i

ts S

ecre

taria

t. H

e sh

all r

epre

sent

the

Trib

unal

in

all

adm

inis

trativ

e m

atte

rs a

nd s

hall

pres

ide

at m

eetin

gs o

f the

Trib

unal

. 2.

If

the

Pre

side

nt is

una

ble

to a

ct, o

ne o

f the

Vic

e P

resi

dent

s de

sign

ated

by

the

Pre

side

nt s

hall

act a

s P

resi

dent

. In

the

abse

nce

of a

ny s

uch

desi

gnat

ion

by th

e P

resi

dent

, the

Vic

e P

resi

dent

des

igna

ted

by

the

Trib

unal

sha

ll ac

t as

Pre

side

nt.

3.

No

case

sha

ll be

hea

rd b

y th

e Tr

ibun

al e

xcep

t und

er th

e ch

airm

ansh

ip o

f the

Pre

side

nt o

r one

of t

he

Vic

e P

resi

dent

s.

Ru

le 4

: Ex

ecu

tive

Sec

reta

ry a

nd

Staf

f

In a

dditi

on to

an

Exe

cutiv

e Se

cret

ary,

the

Trib

unal

sha

ll ha

ve o

ther

sta

ff pl

aced

at i

ts d

ispo

sal b

y th

e P

resi

dent

of

the

Ban

k. T

he E

xecu

tive

Sec

reta

ry, i

f una

ble

to a

ct, s

hall

be re

plac

ed b

y an

offi

cial

app

oint

ed b

y th

e P

resi

dent

of

the

Ban

k.

C

HA

PTE

R I

I: S

essi

ons

Rul

e 5:

Ple

nar

y Se

ssio

ns

Plen

ary

Sess

ions

Th

e Tr

ibun

al s

hall

hold

a p

lena

ry s

essi

on o

nce

a ye

ar o

n a

date

fixe

d by

the

Pre

side

nt fo

r the

pur

pose

of h

earin

g ca

ses,

form

ing

pane

ls, e

lect

ing

offic

ers

and

any

othe

r mat

ters

affe

ctin

g th

e ad

min

istra

tion

or o

pera

tion

of th

e Tr

ibun

al. W

hen,

how

ever

, the

re a

re n

o ca

ses

on th

e lis

t ref

erre

d to

in R

ule

14, p

arag

raph

1, w

hich

in th

e op

inio

n of

the

Pre

side

nt w

ould

just

ify th

e ho

ldin

g of

a s

essi

on fo

r the

ir co

nsid

erat

ion,

the

Pre

side

nt m

ay, a

fter c

onsu

lting

the

othe

r mem

bers

of t

he T

ribun

al, d

ecid

e to

pos

tpon

e th

e pl

enar

y se

ssio

n to

a la

ter d

ate.

Spec

ial P

lena

ry S

essi

ons

A

spe

cial

ple

nary

ses

sion

may

be

conv

ened

by

the

Pre

side

nt w

hen,

in h

is o

r her

opi

nion

, the

num

ber o

r urg

ency

of

cas

es re

quire

s su

ch a

ses

sion

or i

t is

nece

ssar

y to

dea

l with

a q

uest

ion

affe

ctin

g th

e op

erat

ion

of th

e Tr

ibun

al.

Not

ices

of S

essi

ons

Not

ice

of th

e co

nven

ing

of a

ple

nary

ses

sion

or a

spe

cial

ple

nary

ses

sion

sha

ll be

giv

en to

the

mem

bers

of t

he

Trib

unal

at l

east

thirt

y da

ys in

adv

ance

of t

he d

ate

of th

e op

enin

g of

suc

h a

sess

ion.

Quo

rum

Fi

ve m

embe

rs o

f the

Trib

unal

sha

ll co

nstit

ute

a qu

orum

for p

lena

ry s

essi

ons.

Rul

e 6:

Pan

els

1.

Whe

n th

e Tr

ibun

al d

ecid

es to

form

a p

anel

pro

vide

d fo

r in

Arti

cle

V, p

arag

raph

2 o

f the

Sta

tute

, it s

hall

dete

rmin

e th

e pa

rticu

lar c

ase

or g

roup

of c

ases

for w

hich

suc

h pa

nel i

s fo

rmed

. 2.

A

pan

el w

hen

form

ed s

hall

incl

ude

the

Pre

side

nt o

r one

of t

he V

ice

Pre

side

nts,

who

, as

the

case

may

be

, sha

ll pr

esid

e ov

er th

at p

anel

. 3.

Th

e pr

esid

ing

mem

ber o

f a p

anel

sha

ll ex

erci

se a

ll th

e fu

nctio

ns o

f the

Pre

side

nt o

f the

Trib

unal

in

rela

tion

to c

ases

bef

ore

that

pan

el, i

nclu

ding

det

erm

inin

g th

e da

tes

of s

essi

ons

of th

e pa

nel.

C

HA

PTE

R I

II:

Pro

ceed

ings

R

ule

7:

App

licat

ion

s

App

licat

ions

1. A

pplic

atio

ns in

stitu

ting

proc

eedi

ngs

shal

l be

subm

itted

to th

e Tr

ibun

al th

roug

h th

e E

xecu

tive

Sec

reta

ry. S

uch

appl

icat

ions

sha

ll be

div

ided

into

four

sec

tions

, whi

ch s

hall

be e

ntitl

ed re

spec

tivel

y:

I. In

form

atio

n co

ncer

ning

the

pers

onal

and

offi

cial

sta

tus

of th

e ap

plic

ant;

II. P

leas

; III

. Exp

lana

tory

sta

tem

ent;

and

IV. A

nnex

es.

2. T

he in

form

atio

n co

ncer

ning

the

pers

onal

and

offi

cial

sta

tus

of th

e ap

plic

ant s

hall

be p

rese

nted

in th

e fo

rm

cont

aine

d in

Ann

ex I

of th

ese

rule

s.

Plea

s

3. T

he p

leas

sha

ll in

dica

te a

ll th

e m

easu

res

and

deci

sion

s w

hich

the

appl

ican

t is

requ

estin

g th

e Tr

ibun

al to

ord

er

or ta

ke. T

hey

shal

l spe

cify

:

(a) a

ny p

relim

inar

y or

pro

visi

onal

mea

sure

s, s

uch

as th

e pr

oduc

tion

of a

dditi

onal

doc

umen

ts o

r the

hea

ring

of

witn

esse

s, w

hich

the

appl

ican

t is

requ

estin

g th

e Tr

ibun

al to

ord

er b

efor

e pr

ocee

ding

to c

onsi

der t

he m

erits

;

(b) t

he d

ecis

ions

whi

ch th

e ap

plic

ant i

s co

ntes

ting

and

who

se re

scis

sion

is re

ques

ted

unde

r Arti

cle

XII,

para

grap

h 1,

of t

he S

tatu

te;

(c) t

he o

blig

atio

ns w

hich

the

appl

ican

t is

invo

king

and

the

spec

ific

perfo

rman

ce o

f whi

ch is

requ

este

d un

der

Arti

cle

XII,

para

grap

h 1,

of t

he S

tatu

te;

(d) t

he a

mou

nt o

f com

pens

atio

n cl

aim

ed b

y th

e ap

plic

ant i

n th

e ev

ent t

hat t

he T

ribun

al fi

nds

that

the

resp

onde

nt

inst

itutio

n ha

s de

term

ined

, in

acco

rdan

ce w

ith A

rticl

e XI

I, pa

ragr

aph

1, o

f the

Sta

tute

, tha

t res

ciss

ion

or s

peci

fic

perfo

rman

ce w

ould

not

be

prac

ticab

le o

r in

the

inst

itutio

n's

inte

rest

;

(e) a

ny o

ther

relie

f whi

ch th

e ap

plic

ant m

ay re

ques

t in

acco

rdan

ce w

ith th

e S

tatu

te; a

nd

(f) th

e am

ount

of c

osts

requ

este

d by

the

appl

ican

t.

Expl

anat

ory

Stat

emen

t

4. T

he e

xpla

nato

ry s

tate

men

t sha

ll se

t out

the

fact

s an

d th

e le

gal g

roun

ds o

n w

hich

the

plea

s ar

e ba

sed.

It s

hall

spec

ify, i

nter

alia

, the

pro

visi

ons

of th

e co

ntra

ct o

f em

ploy

men

t or o

f the

term

s of

app

oint

men

t the

non

-ob

serv

ance

of w

hich

is a

llege

d.

Ann

exes

5. T

he a

nnex

es s

hall

cont

ain

the

text

s of

all

docu

men

ts re

ferre

d to

in th

e fir

st th

ree

sect

ions

of t

he a

pplic

atio

n.

They

sha

ll be

pre

sent

ed b

y th

e ap

plic

ant i

n ac

cord

ance

with

the

follo

win

g ru

les

and

Ann

ex I,

Par

t II,

of th

ese

rule

s:

(a) e

ach

docu

men

t sha

ll be

ann

exed

in th

e or

igin

al o

r, fa

iling

that

, in

the

form

of a

cop

y be

arin

g th

e w

ords

"C

ertif

ied

true

copy

";

(b) d

ocum

ents

sha

ll be

acc

ompa

nied

by

any

nece

ssar

y tra

nsla

tions

; and

doc

umen

ts s

hall

be a

ccom

pani

ed b

y an

y ne

cess

ary

trans

latio

ns; a

nd

(c) u

nles

s pa

rt of

the

docu

men

t is

irrel

evan

t to

the

appl

icat

ion,

eac

h do

cum

ent,

rega

rdle

ss o

f its

nat

ure,

sha

ll be

an

nexe

d in

its

entir

ety.

Cop

ies

6. T

he a

pplic

ant s

hall

prep

are

eigh

t cop

ies

of th

e ap

plic

atio

n in

add

ition

to th

e or

igin

al. E

ach

copy

sha

ll re

prod

uce

all s

ectio

ns o

f the

orig

inal

, inc

ludi

ng th

e an

nexe

s. H

owev

er, t

he E

xecu

tive

Sec

reta

ry m

ay g

rant

the

appl

ican

t per

mis

sion

, upo

n re

ques

t, to

om

it th

e te

xt o

f an

anne

x of

unu

sual

leng

th fr

om a

spe

cifie

d nu

mbe

r of

copi

es o

f the

app

licat

ion.

Aut

hent

icat

ion

7. T

he a

pplic

ant s

hall

sign

the

last

pag

e of

the

orig

inal

app

licat

ion.

In th

e ev

ent o

f the

app

lican

t's in

capa

city

, the

re

quire

d si

gnat

ure

shal

l be

furn

ishe

d by

his

or h

er le

gal r

epre

sent

ativ

e. T

he a

pplic

ant m

ay in

stea

d, b

y m

eans

of a

le

tter t

rans

mitt

ed fo

r tha

t pur

pose

to th

e E

xecu

tive

Sec

reta

ry, a

utho

rize

his

or h

er la

wye

r or t

he s

taff

mem

ber o

r re

tired

sta

ff m

embe

r who

is re

pres

entin

g th

e ap

plic

ant t

o si

gn in

his

or h

er s

tead

.

Filin

g

8. T

he a

pplic

ant s

hall

file

the

duly

sig

ned

orig

inal

and

the

eigh

t cop

ies

of th

e ap

plic

atio

n w

ith th

e E

xecu

tive

Sec

reta

ry. W

here

the

Pre

side

nt o

f the

resp

onde

nt in

stitu

tion

and

the

appl

ican

t hav

e ag

reed

to s

ubm

it th

e ap

plic

atio

n di

rect

ly to

the

Trib

unal

in a

ccor

danc

e w

ith th

e op

tion

give

n to

them

und

er A

rticl

e II,

par

agra

ph 2

(i), o

f th

e S

tatu

te, t

he fi

ling

shal

l tak

e pl

ace

with

in n

inet

y da

ys o

f the

dat

e on

whi

ch th

e P

resi

dent

of t

he re

spon

dent

in

stitu

tion

notif

ies

the

appl

ican

t of a

gree

men

t for

dire

ct s

ubm

issi

on. I

n al

l oth

er c

ases

, the

filin

g sh

all t

ake

plac

e w

ithin

the

time

limits

pre

scrib

ed b

y A

rticl

e II,

par

agra

ph 2

(ii),

of th

e St

atut

e an

d by

Rul

e 24

.

Cor

rect

ions

9. I

f the

form

al re

quire

men

ts o

f thi

s ru

le a

re n

ot fu

lfille

d, th

e E

xecu

tive

Sec

reta

ry m

ay c

all u

pon

the

appl

ican

t to

mak

e th

e ne

cess

ary

corr

ectio

ns in

the

appl

icat

ion

and

the

copi

es th

ereo

f with

in a

per

iod

whi

ch th

e E

xecu

tive

Sec

reta

ry s

hall

pres

crib

e. H

e or

she

sha

ll re

turn

the

nece

ssar

y pa

pers

to th

e ap

plic

ant f

or th

is p

urpo

se. T

he

Exe

cutiv

e S

ecre

tary

may

als

o, w

ith th

e ap

prov

al o

f the

Pre

side

nt, m

ake

the

nece

ssar

y co

rrect

ions

whe

n th

e de

fect

s in

the

appl

icat

ion

do n

ot a

ffect

the

subs

tanc

e.

Tran

smis

sion

10.

Afte

r asc

erta

inin

g th

at th

e fo

rmal

requ

irem

ents

of t

his

rule

hav

e be

en c

ompl

ied

with

, the

Exe

cutiv

e S

ecre

tary

sh

all t

rans

mit

a co

py o

f the

app

licat

ion

to th

e re

spon

dent

.

Res

erva

tion

of A

pplic

atio

n

11.

If it

appe

ars

that

an

appl

icat

ion

is c

lear

ly ir

rece

ivab

le o

r dev

oid

of a

ll m

erit,

the

Pre

side

nt m

ay in

stru

ct th

e E

xecu

tive

Sec

reta

ry to

take

no

furth

er a

ctio

n th

ereo

n un

til th

e ne

xt s

essi

on o

f the

Trib

unal

. The

Trib

unal

sha

ll th

en c

onsi

der t

he a

pplic

atio

n an

d m

ay e

ither

adj

udge

that

it b

e su

mm

arily

dis

mis

sed

as c

lear

ly ir

rece

ivab

le o

r de

void

of a

ll m

erit,

or o

rder

that

it s

houl

d be

pro

ceed

ed w

ith in

the

ordi

nary

way

.

Rul

e 8

Prel

imin

ary

Obj

ectio

ns

1.

Any

obj

ectio

n by

the

resp

onde

nt to

the

juris

dict

ion

of th

e Tr

ibun

al o

r to

the

adm

issi

bilit

y of

the

appl

icat

ion,

or a

ny o

ther

obj

ectio

n fo

r whi

ch a

dec

isio

n is

sou

ght b

efor

e an

y fu

rther

pro

ceed

ings

on

the

mer

its ta

ke p

lace

, sha

ll be

mad

e in

writ

ing

with

in tw

enty

-one

day

s of

the

date

of t

he re

ceip

t by

the

resp

onde

nt o

f the

app

licat

ion.

2.

Th

e pr

elim

inar

y ob

ject

ion

shal

l set

forth

the

fact

s an

d th

e la

w u

pon

whi

ch th

e ob

ject

ion

is b

ased

. 3.

U

pon

rece

ipt b

y th

e E

xecu

tive

Sec

reta

ry o

f a p

relim

inar

y ob

ject

ion,

the

proc

eedi

ngs

on th

e m

erits

sha

ll be

sus

pend

ed a

nd th

e P

resi

dent

of t

he T

ribun

al s

hall

fix th

e tim

e-lim

it w

ithin

whi

ch th

e ap

plic

ant m

ay

pres

ent a

writ

ten

answ

er to

the

obje

ctio

n.

4.

The

Pre

side

nt o

f the

Trib

unal

sha

ll de

cide

whe

ther

and

to w

hat e

xten

t add

ition

al p

lead

ings

may

be

requ

ired

of th

e pa

rties

. 5.

Th

e Tr

ibun

al o

r, w

hen

the

Trib

unal

is n

ot in

ses

sion

, the

Pre

side

nt o

f the

Trib

unal

may

join

the

prel

imin

ary

obje

ctio

n to

the

mer

its if

ther

e ap

pear

s to

be

sign

ifica

nt o

verla

p of

issu

es o

r con

tent

ions

.

Rul

e 9

Ans

wer

1. T

he re

spon

dent

's a

nsw

er s

hall

be s

ubm

itted

to th

e Tr

ibun

al th

roug

h th

e E

xecu

tive

Secr

etar

y. T

he a

nsw

er

shal

l inc

lude

ple

as, a

n ex

plan

ator

y st

atem

ent a

nd a

nnex

es. T

he a

nnex

es s

hall

cont

ain

the

com

plet

e te

xts

of a

ll do

cum

ents

refe

rred

to in

the

othe

r sec

tions

of t

he a

nsw

er n

ot a

nnex

ed to

the

appl

icat

ion.

The

y sh

all b

e pr

esen

ted

in a

ccor

danc

e w

ith th

e ru

les

esta

blis

hed

for t

he a

pplic

atio

n in

Rul

e 7,

par

agra

ph 5

, and

Ann

ex I(

II).

Cop

ies

2. T

he re

spon

dent

sha

ll pr

epar

e ei

ght c

opie

s of

the

answ

er in

add

ition

to th

e or

igin

al. E

ach

copy

sha

ll re

prod

uce

all s

ectio

ns o

f the

orig

inal

, inc

ludi

ng a

nnex

es. H

owev

er, t

he E

xecu

tive

Sec

reta

ry m

ay g

rant

the

resp

onde

nt

perm

issi

on, u

pon

requ

est,

to o

mit

the

text

of a

n an

nex

of u

nusu

al le

ngth

from

a s

peci

fied

num

ber o

f cop

ies

of th

e an

swer

.

Aut

hent

icat

ion

3. T

he re

pres

enta

tive

of th

e re

spon

dent

sha

ll si

gn th

e la

st p

age

of th

e or

igin

al a

nsw

er.

Filin

g

4. W

ithin

six

ty d

ays

of th

e da

te o

n w

hich

the

appl

icat

ion

is tr

ansm

itted

to th

e re

spon

dent

by

the

Exe

cutiv

e S

ecre

tary

, the

resp

onde

nt s

hall

file

the

duly

sig

ned

orig

inal

and

the

eigh

t cop

ies

of th

e an

swer

with

the

Exe

cutiv

e S

ecre

tary

.

Tran

smis

sion

5. A

fter a

scer

tain

ing

that

the

form

al re

quire

men

ts o

f thi

s ru

le h

ave

been

com

plie

d w

ith, t

he E

xecu

tive

Sec

reta

ry

shal

l tra

nsm

it a

copy

of t

he a

nsw

er to

the

appl

ican

t.

Rul

e 10

Rep

ly

1.

The

appl

ican

t may

, with

in fo

rty-fi

ve d

ays

of th

e da

te o

n w

hich

the

answ

er is

tran

smitt

ed to

him

or h

er, f

ile

with

the

Exe

cutiv

e S

ecre

tary

a w

ritte

n re

ply

to th

e an

swer

. 2.

Th

e co

mpl

ete

text

of a

ny d

ocum

ent r

efer

red

to in

the

writ

ten

repl

y sh

all b

e an

nexe

d th

eret

o in

ac

cord

ance

with

the

rule

s es

tabl

ishe

d fo

r the

app

licat

ion

in R

ule

7, p

arag

raph

5, a

nd A

nnex

I(II)

. 3.

Th

e w

ritte

n re

ply

shal

l be

filed

in a

n or

igin

al a

nd e

ight

cop

ies

draw

n up

in a

ccor

danc

e w

ith th

e ru

les

esta

blis

hed

for t

he a

pplic

atio

n in

Rul

e 7,

par

agra

ph 6

. The

orig

inal

sha

ll be

sig

ned

in a

ccor

danc

e w

ith

the

rule

s es

tabl

ishe

d fo

r the

app

licat

ion

in R

ule

7, p

arag

raph

7.

4.

Afte

r asc

erta

inin

g th

at th

e fo

rmal

requ

irem

ents

of t

his

rule

hav

e be

en c

ompl

ied

with

, the

Exe

cutiv

e S

ecre

tary

sha

ll tra

nsm

it a

copy

of t

he w

ritte

n re

ply

to th

e re

spon

dent

.

Rul

e 11

Rej

oind

er

1.

The

resp

onde

nt m

ay, w

ithin

thirt

y da

ys o

f the

dat

e on

whi

ch th

e re

ply

is tr

ansm

itted

to th

e re

spon

dent

, fil

e w

ith th

e E

xecu

tive

Sec

reta

ry a

writ

ten

rejo

inde

r. 2.

Th

e co

mpl

ete

text

of a

ny d

ocum

ent r

efer

red

to in

the

writ

ten

rejo

inde

r sha

ll be

ann

exed

ther

eto

in

acco

rdan

ce w

ith th

e ru

les

esta

blis

hed

for t

he a

pplic

atio

n in

Rul

e 7,

par

agra

ph 5

, and

Ann

ex I(

II).

3.

The

writ

ten

rejo

inde

r sha

ll be

file

d in

an

orig

inal

and

eig

ht c

opie

s dr

awn

up in

acc

orda

nce

with

the

rule

s es

tabl

ishe

d fo

r the

ans

wer

in R

ule

9, p

arag

raph

2. T

he o

rigin

al re

join

der s

hall

be s

igne

d on

the

last

pag

e by

the

repr

esen

tativ

e of

the

resp

onde

nt.

4.

Afte

r asc

erta

inin

g th

at th

e fo

rmal

requ

irem

ents

of t

his

rule

hav

e be

en c

ompl

ied

with

, the

Exe

cutiv

e S

ecre

tary

sha

ll tra

nsm

it a

copy

of t

he w

ritte

n re

join

der t

o th

e ap

plic

ant.

5.

With

out p

reju

dice

to R

ule

12, t

he w

ritte

n pr

ocee

ding

s sh

all b

e cl

osed

afte

r the

rejo

inde

r has

bee

n fil

ed.

Rul

e 12

Add

ition

al S

tate

men

ts a

nd D

ocum

ents

1. I

n ex

cept

iona

l cas

es, t

he P

resi

dent

may

, on

his

or h

er o

wn

initi

ativ

e, o

r at t

he re

ques

t of e

ither

par

ty, c

all u

pon

the

parti

es to

sub

mit

addi

tiona

l writ

ten

stat

emen

ts o

r add

ition

al d

ocum

ents

with

in a

per

iod

whi

ch h

e or

she

sha

ll fix

. The

add

ition

al d

ocum

ents

sha

ll be

furn

ishe

d in

the

orig

inal

or i

n pr

oper

ly a

uthe

ntic

ated

form

. The

writ

ten

stat

emen

ts a

nd a

dditi

onal

doc

umen

ts s

hall

be a

ccom

pani

ed b

y ei

ght c

opie

s. A

ny d

ocum

ent s

hall

be

acco

mpa

nied

by

any

nece

ssar

y tra

nsla

tions

. In

exce

ptio

nal c

ases

, the

Pre

side

nt m

ay, o

n hi

s or

her

ow

n in

itiat

ive,

or

at t

he re

ques

t of e

ither

par

ty, c

all u

pon

the

parti

es to

sub

mit

addi

tiona

l writ

ten

stat

emen

ts o

r add

ition

al

docu

men

ts w

ithin

a p

erio

d w

hich

he

or s

he s

hall

fix. T

he a

dditi

onal

doc

umen

ts s

hall

be fu

rnis

hed

in th

e or

igin

al o

r in

pro

perly

aut

hent

icat

ed fo

rm. T

he w

ritte

n st

atem

ents

and

add

ition

al d

ocum

ents

sha

ll be

acc

ompa

nied

by

eigh

t co

pies

. Any

doc

umen

t sha

ll be

acc

ompa

nied

by

any

nece

ssar

y tra

nsla

tions

.

2. E

ach

writ

ten

stat

emen

t and

add

ition

al d

ocum

ent s

hall

be c

omm

unic

ated

by

the

Exe

cutiv

e S

ecre

tary

, on

rece

ipt,

to th

e ot

her p

artie

s, u

nles

s at

the

requ

est o

f one

of t

he p

artie

s an

d w

ith th

e co

nsen

t of t

he o

ther

par

ties,

th

e Tr

ibun

al d

ecid

es o

ther

wis

e. T

he p

erso

nnel

file

s co

mm

unic

ated

to th

e Tr

ibun

al s

hall

be m

ade

avai

labl

e to

the

appl

ican

t by

the

Exe

cutiv

e S

ecre

tary

in a

ccor

danc

e w

ith in

stru

ctio

ns is

sued

by

the

Trib

unal

.

Obt

aini

ng In

form

atio

n

3. I

n or

der t

o co

mpl

ete

the

docu

men

tatio

n of

the

case

prio

r to

its b

eing

pla

ced

on th

e lis

t, th

e P

resi

dent

may

ob

tain

any

nec

essa

ry in

form

atio

n fro

m a

ny p

arty

, witn

esse

s or

exp

erts

. The

Pre

side

nt m

ay d

esig

nate

a m

embe

r of

the

Trib

unal

or a

ny o

ther

dis

inte

rest

ed p

erso

n to

take

ora

l sta

tem

ents

. Any

suc

h st

atem

ent s

hall

be m

ade

unde

r dec

lara

tion

as p

rovi

ded

to th

e pa

rties

in a

ccor

danc

e w

ith R

ule

18, p

arag

raph

2.

Del

egat

ion

of F

unct

ions

4. T

he P

resi

dent

may

in p

artic

ular

cas

es d

eleg

ate

his

or h

er fu

nctio

ns u

nder

this

rule

to o

ne o

f the

Vic

e P

resi

dent

s.

Rul

es 1

3

Prov

isio

nal R

elie

f

1.

The

filin

g of

an

appl

icat

ion

shal

l not

sus

pend

the

exec

utio

n of

the

deci

sion

con

test

ed. H

owev

er, t

he

appl

ican

t may

sub

mit

to th

e P

resi

dent

of t

he T

ribun

al a

requ

est t

o su

spen

d th

e co

ntes

ted

deci

sion

unt

il th

e Tr

ibun

al re

nder

s its

judg

men

t in

the

case

. 2.

A

requ

est f

or th

e su

spen

sion

of t

he c

onte

sted

dec

isio

n sh

all,

unle

ss it

is m

anife

stly

unf

ound

ed, b

e tra

nsm

itted

to th

e re

spon

dent

for i

ts a

nsw

er w

ithin

a p

erio

d of

tim

e to

be

dete

rmin

ed b

y th

e P

resi

dent

of

the

Trib

unal

. 3.

Th

e Tr

ibun

al o

r, w

hen

the

Trib

unal

is n

ot in

ses

sion

, the

Pre

side

nt o

f the

Trib

unal

may

gra

nt s

uch

a re

ques

t in

a ca

se in

whi

ch th

e ex

ecut

ion

of th

e de

cisi

on is

sho

wn

to b

e hi

ghly

like

ly to

resu

lt in

gra

ve

hard

ship

to th

e ap

plic

ant t

hat c

anno

t oth

erw

ise

be re

dres

sed.

Rul

e 14

List

ing

of C

ase

for D

ecis

ion

1.

Whe

n th

e P

resi

dent

con

side

rs th

e do

cum

enta

tion

of a

cas

e to

be

suffi

cien

tly c

ompl

ete,

he

or s

he s

hall

inst

ruct

the

Exe

cutiv

e Se

cret

ary

to p

lace

the

case

on

the

list a

nd to

tran

smit

the

doss

ier o

f suc

h ca

se to

th

e m

embe

rs d

esig

nate

d to

dec

ide

it. T

he E

xecu

tive

Secr

etar

y sh

all i

nfor

m th

e pa

rties

as

soon

as

the

incl

usio

n of

the

case

in th

e lis

t is

effe

cted

. No

addi

tiona

l sta

tem

ents

or d

ocum

ents

may

be

filed

afte

r the

ca

se h

as b

een

incl

uded

in th

e lis

t. 2.

A

s so

on a

s th

e da

te o

f ope

ning

of t

he s

essi

on o

r pan

el a

t whi

ch a

cas

e ha

s be

en e

nter

ed fo

r dec

idin

g ha

s be

en fi

xed,

the

Exe

cutiv

e S

ecre

tary

sha

ll no

tify

the

parti

es o

f the

dat

e.

3.

Any

app

licat

ion

for t

he a

djou

rnm

ent o

f a c

ase

shal

l be

deci

ded

by th

e P

resi

dent

, or,

whe

n th

e Tr

ibun

al is

in

ses

sion

, by

the

Trib

unal

.

Rul

e 15

Exec

utiv

e Se

cret

ary'

s Fu

nctio

ns

1.

The

Exe

cutiv

e S

ecre

tary

sha

ll be

resp

onsi

ble

for t

rans

mitt

ing

all d

ocum

ents

and

mak

ing

all n

otifi

catio

ns

requ

ired

in c

onne

ctio

n w

ith p

roce

edin

gs b

efor

e th

e Tr

ibun

al.

2.

The

Exe

cutiv

e S

ecre

tary

sha

ll m

ake

for e

ach

case

a d

ossi

er w

hich

sha

ll re

cord

all

actio

ns ta

ken

in

conn

ectio

n w

ith th

e pr

epar

atio

n of

the

case

for t

rial,

the

date

s th

ereo

f, an

d th

e da

tes

on w

hich

any

do

cum

ent o

r not

ifica

tion

form

ing

part

of th

e pr

oced

ure

is re

ceiv

ed in

or d

ispa

tche

d fro

m h

is o

r her

offi

ce.

Rul

e 16

Pres

enta

tion

of C

ase

1.

An

appl

ican

t may

pre

sent

his

or h

er c

ase

befo

re th

e Tr

ibun

al in

per

son,

in e

ither

writ

ten

or o

ral

proc

eedi

ngs

if al

low

ed p

ursu

ant t

o R

ule

17, p

arag

raph

1. S

ubje

ct to

Rul

e 7,

par

agra

ph 7

, the

app

lican

t m

ay d

esig

nate

a s

taff

mem

ber o

r ret

ired

staf

f mem

ber o

f the

Ban

k G

roup

to re

pres

ent h

im o

r her

, or

may

be

repr

esen

ted

by a

law

yer a

utho

rized

to p

ract

ice

in a

ny c

ount

ry w

hich

is a

mem

ber o

f the

Ban

k.

2.

The

resp

onde

nt in

stitu

tion

shal

l be

repr

esen

ted

eith

er b

y on

e of

its

offic

ials

or r

etire

d of

ficia

ls d

esig

nate

d fo

r tha

t pur

pose

or b

y a

law

yer a

utho

rized

to p

ract

ice

in a

ny c

ount

ry w

hich

is a

mem

ber o

f the

re

spon

dent

inst

itutio

n.

Rul

e 17

Ora

l Pro

ceed

ings

1.

Ora

l pro

ceed

ings

sha

ll be

hel

d if

the

Trib

unal

mem

bers

hea

ring

a ca

se s

o de

cide

or i

f eith

er p

arty

so

requ

ests

and

the

Trib

unal

so

agre

es. T

he o

ral p

roce

edin

gs m

ay in

clud

e th

e pr

esen

tatio

n an

d ex

amin

atio

n of

witn

esse

s or

exp

erts

, and

eac

h pa

rty s

hall

have

the

right

of o

ral a

rgum

ent a

nd o

f co

mm

ent o

n th

e ev

iden

ce g

iven

. 2.

In

suf

ficie

nt ti

me

befo

re th

e op

enin

g of

the

oral

pro

ceed

ings

eac

h pa

rty s

hall

info

rm th

e E

xecu

tive

Sec

reta

ry a

nd, t

hrou

gh h

im o

r her

, the

oth

er p

artie

s of

the

nam

es a

nd d

escr

iptio

n of

witn

esse

s an

d ex

perts

who

m h

e or

she

des

ires

to b

e he

ard,

indi

catin

g th

e po

ints

to w

hich

the

evid

ence

is to

refe

r. 3.

Th

e Tr

ibun

al s

hall

deci

de o

n an

y ap

plic

atio

n fo

r the

hea

ring

of w

itnes

ses

or e

xper

ts a

nd s

hall

dete

rmin

e th

e se

quen

ce o

f ora

l pro

ceed

ings

. Whe

re a

ppro

pria

te, t

he T

ribun

al m

ay d

ecid

e th

at w

itnes

ses

shal

l re

ply

in w

ritin

g to

the

ques

tions

of t

he p

artie

s. T

he p

artie

s sh

all,

how

ever

, ret

ain

the

right

to c

omm

ent o

n an

y su

ch w

ritte

n re

ply.

Rul

e 18

Witn

esse

s an

d Ex

pert

s

1.

The

Trib

unal

may

exa

min

e th

e w

itnes

ses

and

expe

rts. T

he p

artie

s, th

eir r

epre

sent

ativ

es o

r law

yers

may

, un

der t

he c

ontro

l of t

he p

resi

ding

mem

ber,

put q

uest

ions

to th

e w

itnes

ses

and

expe

rts.

Rul

e 19

Prod

uctio

n of

Doc

umen

ts a

nd In

quiry

Th

e Tr

ibun

al m

ay a

t any

sta

ge o

f the

pro

ceed

ings

cal

l for

the

prod

uctio

n of

doc

umen

ts o

r of s

uch

othe

r evi

denc

e as

may

be

requ

ired.

It m

ay a

rrang

e fo

r any

mea

sure

s of

inqu

iry a

s m

ay b

e ne

cess

ary.

C

HA

PTE

R I

V:

Rem

and

of a

Cas

e R

ule

20

Rem

and

1.

If, in

the

cour

se o

f the

del

iber

atio

ns, t

he T

ribun

al fi

nds

that

the

case

sho

uld

be re

man

ded

in o

rder

that

th

e re

quire

d pr

oced

ure

may

be

inst

itute

d or

cor

rect

ed u

nder

Arti

cle

XII,

para

grap

h 2,

of t

he S

tatu

te, i

t sh

all n

otify

the

parti

es a

ccor

ding

ly.

2.

The

Trib

unal

sha

ll de

cide

on

the

subs

tanc

e of

the

case

if, o

n th

e ex

piry

of t

he ti

me

limit

of tw

o w

orki

ng

days

reck

oned

from

the

date

of t

he n

otifi

catio

n un

der p

arag

raph

1 a

bove

, no

requ

est f

or a

rem

and

has

been

mad

e by

the

Pre

side

nt o

f the

resp

onde

nt in

stitu

tion.

C

HA

PTE

R V

: In

terv

enti

on

Rul

e 21

Inte

rven

tion

by In

divi

dual

s

1.

Any

per

son

to w

hom

the

Trib

unal

is o

pen

unde

r Arti

cle

II, p

arag

raph

3, a

nd A

rticl

e XV

of t

he S

tatu

te m

ay

appl

y to

inte

rven

e in

a c

ase

at a

ny s

tage

ther

eof o

n th

e gr

ound

that

he

or s

he h

as a

righ

t whi

ch m

ay b

e af

fect

ed b

y th

e ju

dgm

ent t

o be

giv

en b

y th

e Tr

ibun

al. S

uch

pers

on s

hall

for t

hat p

urpo

se d

raw

up

and

file

an a

pplic

atio

n in

the

form

of A

nnex

II fo

r int

erve

ntio

n in

acc

orda

nce

with

the

cond

ition

s la

id d

own

in th

is

rule

. 2.

Th

e ru

les

rega

rdin

g th

e pr

epar

atio

n an

d su

bmis

sion

of a

pplic

atio

ns s

peci

fied

in R

ules

7 th

roug

h 16

ab

ove

shal

l app

ly m

utat

is m

utan

dis

to th

e ap

plic

atio

n fo

r int

erve

ntio

n.

3.

Afte

r asc

erta

inin

g th

at th

e fo

rmal

requ

irem

ents

of t

his

rule

hav

e be

en c

ompl

ied

with

, the

Exe

cutiv

e S

ecre

tary

sha

ll tra

nsm

it a

copy

of t

he a

pplic

atio

n fo

r int

erve

ntio

n to

the

appl

ican

t and

to th

e re

spon

dent

in

stitu

tion.

The

Pre

side

nt s

hall

deci

de w

hich

doc

umen

ts, i

f any

, rel

atin

g to

the

proc

eedi

ngs

are

to b

e tra

nsm

itted

to th

e in

terv

enor

by

the

Exe

cutiv

e S

ecre

tary

. 4.

Th

e Tr

ibun

al s

hall

rule

on

the

adm

issi

bilit

y of

eve

ry a

pplic

atio

n fo

r int

erve

ntio

n su

bmitt

ed u

nder

this

rule

.

Rul

e 22

Inte

rven

tion

by O

rgan

izat

ions

1.

The

Pre

side

nt o

f the

Ban

k, th

e ch

ief e

xecu

tive

offic

er o

f an

inte

rnat

iona

l org

aniz

atio

n to

whi

ch th

e co

mpe

tenc

e of

the

Trib

unal

has

bee

n ex

tend

ed in

acc

orda

nce

with

the

Sta

tute

, or t

he C

hairm

an o

f the

P

ensi

on B

enef

its A

dmin

istra

tion

Com

mitt

ee o

f the

Ban

k, m

ay, o

n gi

ving

pre

viou

s no

tice

to th

e P

resi

dent

of

the

Trib

unal

, int

erve

ne a

t any

sta

ge, i

f suc

h pe

rson

con

side

rs th

at h

is o

r her

resp

ectiv

e ad

min

istra

tion

may

be

affe

cted

by

the

judg

men

t to

be g

iven

by

the

Trib

unal

.

Rul

e 23

Pote

ntia

l Int

erve

nors

1.

Whe

n it

appe

ars

that

a p

erso

n m

ay h

ave

an in

tere

st in

inte

rven

ing

in a

cas

e un

der R

ules

21

or 2

2, th

e P

resi

dent

, or t

he T

ribun

al w

hen

in s

essi

on, m

ay in

stru

ct th

e E

xecu

tive

Sec

reta

ry to

tran

smit

to s

uch

pers

on a

cop

y of

the

appl

icat

ion

subm

itted

in th

e ca

se.

C

HA

PTE

R V

I: A

pplic

atio

ns C

once

rnin

g D

ecis

ions

of

the

Pen

sion

Ben

efit

s A

dmin

istr

atio

n C

omm

itte

e R

ule

24

Pens

ion

Cas

es

Whe

re a

n ap

plic

atio

n is

bro

ught

aga

inst

a d

ecis

ion

of th

e P

ensi

on B

enef

its A

dmin

istra

tion

Com

mitt

ee o

f the

B

ank,

the

time

limits

pre

scrib

ed in

Arti

cle

II of

the

Sta

tute

are

reck

oned

from

the

date

of t

he c

omm

unic

atio

n of

the

cont

este

d de

cisi

on to

the

party

con

cern

ed.

C

HA

PTE

R V

II:

Mis

cella

neo

us P

rovi

sion

s R

ule

25

Pers

ons

Furn

ishi

ng In

form

atio

n

1. T

he T

ribun

al m

ay, f

or p

urpo

ses

of in

form

atio

n, p

erm

it pe

rson

s to

who

m th

e Tr

ibun

al is

ope

n un

der A

rticl

e II,

pa

ragr

aph

3, o

f the

Sta

tute

, whe

neve

r suc

h pe

rson

s m

ay b

e ex

pect

ed to

furn

ish

info

rmat

ion

perti

nent

to th

e ca

se,

to s

ubm

it w

ritte

n or

ora

l obs

erva

tions

as

may

be

appr

opria

te.

Am

icus

Cur

iae

2. T

he T

ribun

al m

ay p

erm

it an

y pe

rson

or e

ntity

with

a s

ubst

antia

l int

eres

t in

the

outc

ome

of a

cas

e to

par

ticip

ate

as a

frie

nd-o

f-the

-cou

rt. It

may

als

o pe

rmit

the

duly

aut

horiz

ed re

pres

enta

tives

of t

he S

taff

Ass

ocia

tion

of a

re

spon

dent

inst

itutio

n so

to p

artic

ipat

e. A

requ

est s

o to

par

ticip

ate

shal

l be

acco

mpa

nied

by

a br

ief a

nd s

hall

be

filed

not

late

r tha

n th

e da

te fi

xed

for t

he fi

ling

of th

e ap

plic

ant’s

repl

y un

der R

ule

10(1

). If

the

Trib

unal

gra

nts

the

requ

est,

the

Exe

cutiv

e S

ecre

tary

sha

ll tra

nsm

it a

copy

of t

he a

ccom

pany

ing

brie

f to

the

parti

es w

ho m

ay

com

men

t the

reon

with

in th

irty

days

of t

he d

ate

on w

hich

the

brie

f is

trans

mitt

ed to

them

.

Rul

e 26

Rep

rese

ntat

ive

Cas

es

1.

Eith

er th

e ap

plic

ant o

r the

resp

onde

nt to

a c

ase

brou

ght b

efor

e th

e Tr

ibun

al m

ay re

ques

t tha

t the

Tr

ibun

al’s

judg

men

t in

the

case

be

appl

ied

to a

ll st

aff m

embe

rs s

imila

rly s

ituat

ed, w

heth

er o

r not

suc

h st

aff m

embe

rs h

ave

mad

e ap

plic

atio

n to

or i

nter

vene

d in

the

proc

eedi

ngs

befo

re th

e Tr

ibun

al. T

he

requ

est m

ust b

e m

ade

by th

e ap

plic

ant n

ot la

ter t

han

the

date

fixe

d fo

r the

filin

g of

the

repl

y, o

r by

the

resp

onde

nt n

ot la

ter t

han

the

date

fixe

d fo

r the

filin

g of

the

rejo

inde

r. 2.

Th

e P

resi

dent

of t

he T

ribun

al m

ay g

rant

the

requ

est u

nder

suc

h co

nditi

ons

as h

e or

she

may

find

ap

prop

riate

in th

e ci

rcum

stan

ces

whe

re it

is s

how

n th

at th

ere

exis

ts a

n id

entif

iabl

e gr

oup

of s

imila

rly

situ

ated

sta

ff w

ho s

hare

a c

omm

on le

gal o

r fac

tual

pos

ition

and

whe

re s

uch

a ru

ling

wou

ld b

est s

erve

ju

dici

al e

ffici

ency

in c

larif

ying

the

right

s or

obl

igat

ions

of t

he s

peci

fied

grou

p.

3.

The

Trib

unal

may

det

erm

ine

in it

s ju

dgm

ent t

he e

xten

t to

whi

ch it

s ju

dgm

ent w

ill a

pply

and

to w

hom

it

may

app

ly w

ithin

the

spec

ified

gro

up.

Rul

e 27

Con

solid

atio

n of

Cas

es o

r Ple

adin

gs

1.

App

lican

ts in

sep

arat

e ca

ses,

or t

he re

spon

dent

, may

requ

est t

he T

ribun

al to

con

solid

ate

the

case

s in

qu

estio

n, o

r any

asp

ect o

f the

ple

adin

gs in

the

case

s. In

dec

idin

g on

the

requ

est,

the

Trib

unal

will

co

nsid

er th

e ex

tent

to w

hich

iden

tical

issu

es o

f law

or f

act a

re p

rese

nted

. 2.

Th

e Tr

ibun

al m

ay o

n its

ow

n in

itiat

ive

orde

r the

con

solid

atio

n of

cas

es, o

r asp

ects

of p

lead

ings

in

sepa

rate

cas

es, w

here

it d

eem

s th

at id

entic

al is

sues

of l

aw o

r fac

t are

pre

sent

ed.

Rul

e 28

Ano

nym

ity

1.

An

appl

ican

t who

wis

hes

that

his

or h

er n

ame

not b

e m

ade

publ

ic m

ay re

ques

t ano

nym

ity a

t the

tim

e w

hen

the

appl

icat

ion

inst

itutin

g pr

ocee

ding

s is

sub

mitt

ed to

the

Trib

unal

and

, in

any

even

t, no

late

r tha

n by

the

date

of t

he fi

ling

of h

is o

r her

writ

ten

repl

y to

the

answ

er.

2.

A re

ques

t for

ano

nym

ity s

hall

be tr

ansm

itted

to th

e re

spon

dent

for c

omm

ent w

ithin

a p

erio

d of

tim

e to

be

dete

rmin

ed b

y th

e P

resi

dent

of t

he T

ribun

al.

3.

The

Pre

side

nt o

f the

Trib

unal

may

gra

nt a

requ

est f

or a

nony

mity

in c

ases

whe

re p

ublic

atio

n of

the

appl

ican

t’s n

ame

is li

kely

to b

e se

rious

ly p

reju

dici

al to

the

appl

ican

t.

Rul

e 29

Cos

ts

1.

An

appl

icat

ion

for c

osts

sho

uld

be s

ubm

itted

not

late

r tha

n se

ven

days

afte

r the

list

ing

of th

e ca

se.

Rul

e 30

Publ

icat

ion

of D

ecis

ions

1.

The

Exe

cutiv

e S

ecre

tary

sha

ll ar

rang

e fo

r the

pub

licat

ion

of th

e de

cisi

ons

of th

e Tr

ibun

al.

Rul

e 31

Mod

ifica

tion

and

Supp

lem

enta

tion

of R

ules

Th

e Tr

ibun

al, o

r, w

hen

the

Trib

unal

is n

ot in

ses

sion

, the

Pre

side

nt a

fter c

onsu

ltatio

n w

here

app

ropr

iate

with

the

mem

bers

of t

he T

ribun

al, m

ay:

i. in

exc

eptio

nal c

ases

mod

ify th

e ap

plic

atio

n of

thes

e ru

les,

incl

udin

g an

y tim

e lim

its th

ereu

nder

; ii.

de

al w

ith a

ny m

atte

r not

exp

ress

ly p

rovi

ded

for i

n th

e pr

esen

t rul

es.

Rul

e 32

Entr

y In

to F

orce

The

pres

ent r

ules

sha

ll ap

ply

to a

ll ap

plic

atio

ns s

ubm

itted

afte

r Jan

uary

1, 2

002

and

may

app

ly to

app

licat

ions

be

fore

that

dat

e if

both

the

appl

ican

t and

the

resp

onde

nt s

o in

form

the

Trib

unal

.

A

NN

EX I

I.

For

m o

f fi

rst

sect

ion

of

appl

icat

ion

dra

wn

up

in a

ccor

dan

ce w

ith

Ru

le 7

Info

rmat

ion

conc

erni

ng th

e pe

rson

al a

nd o

ffici

al s

tatu

s of

the

appl

ican

t:

1.

Nam

e of

resp

onde

nt.

2.

App

lican

t: a.

na

me

and

first

nam

es;

b.

date

and

pla

ce o

f birt

h;

c.

mar

ital s

tatu

s;

d.

natio

nalit

y; a

nd

e.

addr

ess

for p

urpo

ses

of th

e pr

ocee

ding

s.

3.

Nam

e an

d ad

dres

s of

law

yer o

r sta

ff m

embe

r or r

etire

d st

aff m

embe

r rep

rese

ntin

g th

e ap

plic

ant b

efor

e th

e Tr

ibun

al.

4.

Offi

cial

sta

tus

of a

pplic

ant:

a.

orga

niza

tion

of w

hich

the

appl

ican

t was

a s

taff

mem

ber a

t the

tim

e of

the

deci

sion

con

test

ed;

b.

date

of e

mpl

oym

ent;

c.

title

and

leve

l at t

ime

of d

ecis

ion

cont

este

d;

d.

sala

ry o

f app

lican

t at t

he ti

me

of d

ecis

ion

cont

este

d;

e.

type

of a

pplic

ant's

app

oint

men

t; an

d f.

visa

sta

tus,

if a

pplic

able

. 5.

If

the

appl

ican

t was

not

a s

taff

mem

ber a

t the

tim

e of

the

cont

este

d de

cisi

on, s

tate

: a.

th

e na

me,

firs

t nam

es, n

atio

nalit

y an

d of

ficia

l sta

tus

of th

e st

aff m

embe

r who

se ri

ghts

are

relie

d on

; and

b.

th

e re

latio

n of

the

appl

ican

t to

the

said

sta

ff m

embe

r whi

ch e

ntitl

es th

e fo

rmer

to c

ome

befo

re

the

Trib

unal

. 6.

D

ate

of th

e oc

curr

ence

of t

he e

vent

or d

ate

of d

ecis

ion

givi

ng ri

se to

the

appl

icat

ion.

7.

D

ate

of re

ceip

t of n

otic

e (a

fter t

he a

pplic

ant h

as e

xhau

sted

all

othe

r rem

edie

s av

aila

ble

with

in th

e B

ank

Gro

up) t

hat t

he re

lief a

sked

for o

r rec

omm

ende

d w

ill n

ot b

e gr

ante

d.

8.

Dat

e of

rece

ipt o

f not

ice

that

the

relie

f ask

ed fo

r or r

ecom

men

ded

will

be

gran

ted,

if s

uch

relie

f sha

ll no

t ha

ve b

een

gran

ted

with

in th

irty

days

afte

r rec

eipt

of s

uch

notic

e.

9.

Des

crip

tion

of re

med

ies

exha

uste

d w

ithin

the

resp

onde

nt in

stitu

tion.

10

. A

pplic

ants

who

are

filin

g ap

plic

atio

ns a

fter t

hey

have

bee

n se

para

ted

from

the

Ban

k's

empl

oym

ent

shou

ld in

dica

te a

ll em

ploy

men

t, in

clud

ing

self-

empl

oym

ent,

sinc

e th

e da

te o

f sep

arat

ion,

sta

ting

the

natu

re a

nd p

erio

ds o

f suc

h em

ploy

men

t, th

e na

mes

of a

ll em

ploy

ers

and

gros

s pa

ymen

ts re

ceiv

ed in

resp

ect o

f suc

h em

ploy

men

t.

Req

uir

emen

ts r

egar

din

g an

nex

es

1.

Eac

h do

cum

ent s

hall

cons

titut

e a

sepa

rate

ann

ex a

nd s

hall

be n

umbe

red

with

an

Ara

bic

num

eral

. The

w

ord

"AN

NE

X," f

ollo

wed

by

the

num

ber o

f the

doc

umen

t, sh

all a

ppea

r at t

he to

p of

the

first

pag

e;

2.

The

anne

xed

docu

men

ts s

hall

be p

rece

ded

by a

tabl

e of

con

tent

s in

dica

ting

the

num

ber,

title

, nat

ure,

da

te a

nd, w

here

app

ropr

iate

, sym

bol o

f eac

h an

nex;

3.

T

he w

ords

"see

ann

ex,"

follo

wed

by

the

appr

opria

te n

umbe

r, sh

all a

ppea

r in

pare

nthe

ses

afte

r eac

h re

fere

nce

to a

n an

nexe

d do

cum

ent i

n th

e ot

her s

ectio

ns o

f the

app

licat

ion;

and

4.

W

hene

ver p

ossi

ble,

ann

exes

sho

uld

be a

ttach

ed in

chr

onol

ogic

al o

rder

.

A

NN

EX I

I Fo

rm o

f fi

rst

sect

ion

of

appl

icat

ion

for

inte

rven

tion

dra

wn

up

in a

ccor

dan

ce w

ith

Art

icle

7

Info

rmat

ion

conc

erni

ng th

e pe

rson

al a

nd o

ffici

al s

tatu

s of

the

inte

rven

or:

1.

Cas

e in

whi

ch in

terv

entio

n is

sou

ght.

2.

Inte

rven

or:

a.

nam

e an

d fir

st n

ames

; b.

da

te a

nd p

lace

of b

irth;

c.

m

arita

l sta

tus;

d.

na

tiona

lity;

and

e.

ad

dres

s fo

r pur

pose

s of

the

proc

eedi

ngs.

3.

N

ame

and

addr

ess

of la

wye

r or s

taff

mem

ber o

r ret

ired

staf

f mem

ber r

epre

sent

ing

the

inte

rven

or b

efor

e th

e Tr

ibun

al.

4.

Offi

cial

sta

tus

of in

terv

enor

: a.

or

gani

zatio

n of

whi

ch th

e in

terv

enor

is a

sta

ff m

embe

r; b.

da

te o

f em

ploy

men

t; c.

tit

le a

nd le

vel;

d.

sala

ry o

f int

erve

nor a

t the

tim

e of

dec

isio

n co

ntes

ted;

e.

ty

pe o

f int

erve

nor's

app

oint

men

t; an

d f.

visa

sta

tus

of in

terv

enor

, if a

pplic

able

. 5.

If

the

inte

rven

or w

as n

ot a

sta

ff m

embe

r at t

he ti

me

of th

e co

ntes

ted

deci

sion

, sta

te:

a.

the

nam

e, fi

rst n

ames

, nat

iona

lity

and

offic

ial s

tatu

s of

the

staf

f mem

ber w

hose

righ

ts a

re re

lied

on; a

nd

b.

the

title

und

er w

hich

the

inte

rven

or c

laim

s he

or s

he is

ent

itled

to th

e rig

hts

of th

e sa

id s

taff

mem

ber.

6.

Inte

rven

ors

who

are

filin

g ap

plic

atio

ns a

fter t

hey

have

bee

n se

para

ted

from

the

Ban

k's

empl

oym

ent

shou

ld in

dica

te a

ll em

ploy

men

t, in

clud

ing

self-

empl

oym

ent,

sinc

e th

e da

te o

f sep

arat

ion,

sta

ting

the

natu

re a

nd p

erio

ds o

f suc

h em

ploy

men

t, th

e na

mes

of a

ll em

ploy

ers

and

gros

s pa

ymen

ts re

ceiv

ed in

re

spec

t of s

uch

empl

oym

ent.

The World Bank Administrative Tribunal

Louis de Merode and Others v. The World Bank

Decision of 5 June 1981

Decision No. 1

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

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9ED

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B87

7[5/

20/2

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4:49

AM

]

Dec

isio

n N

o. 1

Loui

s de

Mer

ode,

Fran

k La

mso

n-S

crib

ner,

Jr.,

Dav

id G

ene

Ree

se,

Judi

th R

eism

an-T

oof,

Fran

co R

uber

l,N

ina

Sha

piro

,A

pplic

ants

v.

The

Wor

ld B

ank,

Res

pond

ent

The

Wor

ld B

ank

Adm

inis

trativ

e Tr

ibun

al,

Com

pose

d of

E. J

imen

ez d

e A

rech

aga,

Pre

side

nt, T

. O. E

lias,

P. W

eil,

Vic

e P

resi

dent

s, A

.K. A

bul-M

agd,

R.

Gor

man

, N. K

umar

ayya

** J

udge

Kum

aray

ya h

as ta

ken

part

in a

ll th

e de

liber

atio

ns in

this

cas

e. H

e w

aspr

even

ted

for

reas

ons

of h

ealth

from

atte

ndin

g th

e he

arin

g bu

t has

sin

ce h

ad a

n op

portu

nity

of l

iste

ning

to a

tape

reco

rdin

g of

it. a

nd E

. Lau

terp

acht

, Mem

bers

.

1. T

he T

ribun

al is

sei

zed

of a

pplic

atio

ns d

ated

Sep

tem

ber 2

9, 1

980

filed

by

App

lican

ts d

e M

erod

e, L

amso

n-S

crib

ner,

Ree

se, R

eism

an-T

oof,

Rub

erl a

nd S

hapi

ro (h

erei

nafte

r col

lect

ivel

y ca

lled

“the

App

lican

ts”)

. By

aD

ecis

ion

date

d S

epte

mbe

r 26,

198

0 th

e A

pplic

ants

wer

e pe

rmitt

ed to

add

by

Oct

ober

19,

198

0 a

Mem

oran

dum

of L

aw to

thei

r ap

plic

atio

ns a

nd th

e R

espo

nden

t**

For t

he p

urpo

ses

of th

is d

ecis

ion,

the

term

"Wor

ld B

ank"

mea

ns th

e In

tern

atio

nal B

ank

for

Rec

onst

ruct

ion

and

Dev

elop

men

t, th

e In

tern

atio

nal D

evel

opm

ent A

ssoc

iatio

nan

d th

e In

tern

atio

nal F

inan

ce C

orpo

ratio

n. w

as g

iven

unt

il D

ecem

ber 1

0, 1

980

(sub

sequ

ently

ext

ende

d to

Janu

ary

15, 1

981)

to s

ubm

it its

Ans

wer

.

2. T

he A

pplic

ants

sub

mitt

ed th

eir

obse

rvat

ions

on

the

Ans

wer

by

Febr

uary

27,

198

1, a

nd th

e R

espo

nden

t was

allo

wed

to s

ubm

it a

supp

lem

enta

l sta

tem

ent b

y a

deci

sion

of t

he T

ribun

al d

ated

Mar

ch 1

6, 1

981.

The

cas

e w

aslis

ted

on M

arch

16,

198

1 an

d w

as h

eard

on

May

28,

198

1. A

t tha

t hea

ring

coun

sel f

or th

e A

pplic

ants

and

the

Res

pond

ent o

rally

dev

elop

ed c

erta

in p

arts

of t

heir

resp

ectiv

e ca

ses.

I. IN

TRO

DU

CTI

ON

3. T

he T

ribun

al is

pre

sent

ed in

this

, the

firs

t cas

e to

be

deci

ded

by it

, with

the

ques

tion

whe

ther

the

impl

emen

tatio

n in

rela

tion

to th

e A

pplic

ants

of t

he d

ecis

ions

ado

pted

on

May

25,

197

9 by

the

Exe

cutiv

eD

irect

ors

of th

e B

ank

rega

rdin

g ta

x re

imbu

rsem

ent a

nd s

alar

y ad

just

men

t am

ount

s to

non

-obs

erva

nce

by th

eB

ank

of th

e co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

of a

ppoi

ntm

ent o

f the

App

lican

ts. T

he le

gal i

ssue

s in

volv

ed in

this

que

stio

n ar

e ba

sic

and

impo

rtant

. The

y do

not

lend

them

selv

es to

sum

mar

y tre

atm

ent.

4. T

he T

ribun

al is

, by

Arti

cle

II of

its

Sta

tute

, giv

en ju

risdi

ctio

n to

hea

r ap

plic

atio

ns a

llegi

ng n

on-o

bser

vanc

e of

the

cont

ract

of e

mpl

oym

ent o

r ter

ms

of a

ppoi

ntm

ent o

f sta

ff m

embe

rs, a

nd th

is p

hras

e is

sta

ted

to in

clud

e “a

llpe

rtine

nt re

gula

tions

and

rule

s in

forc

e at

the

time

of a

llege

d no

nobs

erva

nce

incl

udin

g th

e pr

ovis

ions

of t

heS

taff

Ret

irem

ent P

lan”

. In

orde

r to

avoi

d co

nsta

nt re

petit

ion

of a

ll th

ese

term

s, th

e Tr

ibun

al w

ill in

this

Jud

gmen

tus

e th

e ph

rase

“con

ditio

ns o

f em

ploy

men

t” to

des

crib

e co

mpe

ndio

usly

the

vario

us e

lem

ents

whi

ch to

geth

erde

term

ine

the

cont

ent o

f the

lega

l rel

atio

nshi

p be

twee

n th

e B

ank

and

a m

embe

r of

its

staf

f.

5. T

he c

ircum

stan

ces

in w

hich

the

pres

ent c

ase

has

com

e be

fore

the

Trib

unal

refle

ct s

ome

of th

e m

any

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

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]

chan

ges

whi

ch th

e ac

tiviti

es a

nd o

pera

tions

of t

he B

ank

have

und

ergo

ne s

ince

its

esta

blis

hmen

t in

1945

–ch

ange

s in

the

purp

oses

of i

ts lo

ans,

in th

e ch

arac

ter o

f the

bor

row

er c

ount

ries,

in th

e m

agni

tude

and

rang

e of

its p

roje

cts,

in it

s so

urce

s of

fina

nce

and,

mos

t rel

evan

t of a

ll, in

the

num

ber o

f per

sonn

el e

ngag

ed in

the

purs

uit o

f the

Ban

k's

obje

ctiv

es. B

y re

ason

of t

he la

st, t

he c

lose

ness

of t

he re

latio

nshi

p be

twee

n th

e B

ank

man

agem

ent a

nd th

e ge

nera

l bod

y of

Ban

k pe

rson

nel w

hich

mar

ked

the

earli

er y

ears

of t

he B

ank

has

unav

oida

bly

been

affe

cted

. In

addi

tion,

ext

erna

l eco

nom

ic c

ondi

tions

hav

e un

ders

tand

ably

giv

en ri

se to

con

cern

on th

e pa

rt o

f the

sta

ff m

embe

rs re

gard

ing

the

mai

nten

ance

of t

he re

al v

alue

of t

heir

rem

uner

atio

n in

the

face

of in

flatio

n an

d of

the

incr

ease

in th

e co

st o

f liv

ing.

At t

he s

ame

time,

som

e of

the

Ban

k's

Mem

bers

hav

e fo

und

occa

sion

to q

uest

ion

som

e el

emen

ts o

f the

Ban

k's

com

pens

atio

n po

licie

s in

com

paris

on w

ith th

ose

appl

ied

toth

eir

own

offic

ials

and

the

empl

oyee

s of

dom

estic

ban

king

and

oth

er s

imila

r ent

erpr

ises

.

6. In

197

7, th

e P

resi

dent

of t

he B

ank

prop

osed

to th

e E

xecu

tive

Dire

ctor

s th

at:

“a J

oint

Ban

k an

d Fu

nd C

omm

ittee

sho

uld

be e

stab

lishe

d to

exa

min

e co

mpe

nsat

ion

issu

es a

nd to

agr

ee o

na

set o

f prin

cipl

es w

hich

wou

ld p

rovi

de a

mor

e st

able

fram

ewor

k fo

r th

e pr

oces

s of

det

erm

inin

gco

mpe

nsat

ion.

”

7. T

he J

oint

Com

mitt

ee o

n S

taff

Com

pens

atio

n Is

sues

(the

Kaf

ka C

omm

ittee

, so

calle

d be

caus

e it

was

cha

ired

by A

lexa

ndre

Kaf

ka, a

n E

xecu

tive

Dire

ctor

of t

he In

tern

atio

nal M

onet

ary

Fund

), co

mpo

sed

of E

xecu

tive

Dire

ctor

s of

the

Wor

ld B

ank

and

the

Inte

rnat

iona

l Mon

etar

y Fu

nd a

nd o

utsi

de e

xper

ts, i

ssue

d its

516

-pag

eR

epor

t in

Janu

ary

1979

con

tain

ing

deta

iled

findi

ngs

as to

sal

arie

s an

d be

nefit

s at

the

Wor

ld B

ank

and

the

Fund

and

mak

ing

reco

mm

enda

tions

for

the

futu

re. A

fter a

llow

ing

a pe

riod

for

com

men

t the

Exe

cutiv

e D

irect

ors

ofbo

th th

e B

ank

and

the

Fund

dec

ided

in M

ay 1

979

to a

dopt

, sub

ject

to s

ome

chan

ges,

man

y of

the

Com

mitt

ee's

reco

mm

enda

tions

.

8. B

y A

dmin

istra

tive

Circ

ular

AC

/23/

79 o

f May

25,

197

9, th

e st

aff o

f the

B

ank

was

info

rmed

that

:

“The

Exe

cutiv

e D

irect

ors

have

com

plet

ed th

eir

cons

ider

atio

n of

the

mai

n po

licy

issu

es s

tem

min

g fro

m th

ere

port

of th

e Jo

int C

omm

ittee

on

Sta

ff C

ompe

nsat

ion

Issu

es. A

mon

g th

e m

ore

impo

rtant

mat

ters

, the

Exe

cutiv

e D

irect

ors

have

agr

eed

that

: ...

.

“... u

nles

s th

e G

over

nmen

ts c

once

rned

agr

ee to

exe

mpt

thei

r na

tiona

ls fr

om ta

xes

or in

com

e de

rived

from

the

Ban

k, th

e pr

esen

t sys

tem

of t

ax re

imbu

rsem

ent w

ill b

e re

plac

ed, e

ffect

ive

Janu

ary

1, 1

980,

by

a sy

stem

base

d on

ave

rage

ded

uctio

ns w

ith a

five

-yea

r tra

nsiti

on p

erio

d an

d ap

prop

riate

saf

egua

rds.

The

det

ails

of

how

this

sys

tem

is to

be

impl

emen

ted

are

yet t

o be

agr

eed.

“The

Exe

cutiv

e D

irect

ors

have

als

o ap

prov

ed a

9.5

% in

crea

se in

net

sal

arie

s ef

fect

ive

Mar

ch 1

, 197

9 ...

This

is in

line

with

ave

rage

real

pay

incr

ease

s of

the

US

priv

ate

sect

or c

ompa

rato

rs o

ver

the

past

yea

r.”

The

met

hods

of i

mpl

emen

ting

the

new

sys

tem

of t

ax re

imbu

rsem

ent w

ere

set o

ut in

Per

sonn

el M

anua

l Circ

ular

1/80

of J

anua

ry 2

1, 1

980.

9. T

hese

dec

isio

ns w

ere

rega

rded

by

mem

bers

of t

he s

taff

as a

ffect

ing

them

in tw

o re

spec

ts. T

he n

ew ta

xre

imbu

rsem

ent s

yste

m w

ould

resu

lt, w

hen

fully

pha

sed

in, i

n a

redu

ctio

n of

23%

in ta

x re

imbu

rsem

ents

toex

istin

g st

aff o

f Uni

ted

Sta

tes

natio

nalit

y. A

s re

gard

s th

e de

cisi

on re

latin

g to

sal

ary

incr

ease

s, s

taff

mem

bers

cons

ider

ed th

at th

is in

volv

ed th

e re

pudi

atio

n by

the

Ban

k of

a d

ecis

ion

take

n in

196

8 to

adj

ust s

alar

ies

auto

mat

ical

ly in

pro

porti

on to

the

incr

ease

in th

e C

onsu

mer

Pric

e In

dex

in th

e W

ashi

ngto

n M

etro

polit

an A

rea

(“C

PI”)

. As

a co

nseq

uenc

e of

this

dec

isio

n th

e ad

just

men

t of 9

.5%

(effe

ctiv

e M

arch

1, 1

979)

and

a s

ubse

quen

tad

just

men

t of 8

.3%

(effe

ctiv

e M

arch

1, 1

980)

wer

e lo

wer

than

the

incr

ease

s in

the

CP

I of 1

1.26

% a

nd 1

1.68

%du

ring

the

two

prec

edin

g 12

-mon

th p

erio

ds re

spec

tivel

y.

10. F

rom

thes

e de

cisi

ons

mor

e th

an 1

,300

Wor

ld B

ank

staf

f mem

bers

app

eale

d to

the

App

eals

Com

mitt

ee o

f

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

the

Ban

k al

legi

ng v

iola

tion

of th

eir

cond

ition

s of

em

ploy

men

t. O

n Ja

nuar

y 8,

198

0, th

e A

ppea

ls C

omm

ittee

deci

ded

that

it h

ad n

o ju

risdi

ctio

n ov

er th

e m

atte

r and

exp

ress

ed re

gret

that

ther

e w

as “n

o fo

rum

in th

e w

orld

inw

hich

suc

h de

cisi

ons

can

be c

halle

nged

, rev

iew

ed, a

nd p

ossi

bly

over

turn

ed if

foun

d ill

egal

.” O

n A

pril

30, 1

980

the

Boa

rd o

f Gov

erno

rs a

dopt

ed th

e S

tatu

te o

f thi

s Tr

ibun

al w

hich

ent

ered

into

forc

e on

Jul

y 1,

198

0. A

rticl

eX

VII

of th

e S

tatu

te p

rovi

des

that

:

“... t

he T

ribun

al s

hall

be c

ompe

tent

to h

ear

any

appl

icat

ion

conc

erni

ng a

cau

se o

f com

plai

nt w

hich

aro

sesu

bseq

uent

to J

anua

ry 1

, 197

9, p

rovi

ded,

how

ever

, tha

t the

app

licat

ion

is fi

led

with

in 9

0 da

ys a

fter

the

entry

into

forc

e of

the

pres

ent S

tatu

te.”

11. O

n S

epte

mbe

r 29,

198

0, th

at is

to s

ay, w

ithin

the

perio

d fix

ed b

y A

rticl

e X

VII,

the

appl

icat

ions

of t

he s

ixna

med

App

lican

ts w

ere

filed

with

the

Trib

unal

. The

se w

ere

iden

tifie

d by

cou

nsel

for

the

App

lican

ts a

s be

ing

“rep

rese

ntat

ive

of th

e br

oad

spec

trum

of B

ank

empl

oyee

s w

ho h

ave

been

fina

ncia

lly h

arm

ed b

y th

ese

two

chan

ges”

. The

Ban

k ha

s ag

reed

that

, if a

nd to

the

exte

nt th

at th

e Tr

ibun

al re

nder

s a

deci

sion

in fa

vor

of a

nA

pplic

ant o

r App

lican

ts in

the

repr

esen

tativ

e ca

ses

on th

e ba

sis

of g

ener

al p

rinci

ples

rath

er th

an o

n th

e ba

sis

ofpa

rticu

lar f

acts

rela

ting

to th

e ap

plic

atio

n of

a g

iven

indi

vidu

al, t

he B

ank

will

trea

t all

staf

f mem

bers

sim

ilarly

situ

ated

in a

ccor

danc

e w

ith th

e Tr

ibun

al's

dec

isio

n, w

heth

er o

r not

suc

h st

aff m

embe

rs h

ave

mad

e ap

plic

atio

nto

or i

nter

vene

d in

the

proc

eedi

ngs

befo

re th

e Tr

ibun

al. A

s a

resu

lt, 8

74 a

pplic

atio

ns h

ave

been

file

d by

sta

ffm

embe

rs w

ho b

elie

ve th

eir

case

s sh

ould

be

disp

osed

of o

n th

e ba

sis

of th

e pa

rticu

lar f

acts

of t

heir

own

indi

vidu

al c

ases

. In

addi

tion,

the

Sec

reta

riat o

f the

Trib

unal

has

rece

ived

8 a

pplic

atio

ns fo

r in

terv

entio

n w

hich

have

bee

n jo

ined

with

the

874

so-c

alle

d “n

on-r

epre

sent

ativ

e” a

pplic

atio

ns.

12. A

ll of

the

six

nam

ed A

pplic

ants

com

plai

n of

the

deci

sion

s of

the

Ban

k re

latin

g to

sal

ary

adju

stm

ents

. The

yco

nten

d th

at, a

s a

resu

lt of

thes

e de

cisi

ons,

thei

r sa

larie

s fo

r th

e ye

ars

1979

and

198

0 w

ere

resp

ectiv

ely

11%

and

29%

low

er th

an th

ey w

ould

hav

e be

en if

the

Ban

k ha

d no

t uni

late

rally

aba

ndon

ed it

s pr

evio

us p

olic

y,es

tabl

ishe

d in

196

8, o

f aut

omat

ical

ly a

djus

ting

sala

ries

on th

e ba

sis

of th

e C

PI.

In a

dditi

on, f

our

of th

e si

xA

pplic

ants

, Lam

son-

Scr

ibne

r, R

eese

, Rei

sman

-Too

f and

Sha

piro

com

plai

n of

sub

stan

tial r

educ

tions

in th

eir

gros

s in

com

e re

sulti

ng fr

om c

hang

es m

ade

by th

e B

ank,

with

effe

ct fr

om J

anua

ry 1

, 198

0, in

the

met

hod

ofca

lcul

atin

g ta

x re

imbu

rsem

ent.

13. T

he A

pplic

ants

ask

the

Trib

unal

:

1. T

o or

der t

he re

scis

sion

of c

erta

in a

dmin

istra

tive

circ

ular

s, n

amel

y, A

dmin

istra

tive

Circ

ular

s 23

/79,

dat

edM

ay 2

5, 1

979,

and

13/

80, d

ated

Mar

ch 1

4, 1

980,

as

rega

rds

sala

ry a

djus

tmen

t, an

d th

e P

erso

nnel

Man

ual

Circ

ular

1/8

0, d

ated

Jan

uary

21,

198

0, a

s re

gard

s ta

x re

imbu

rsem

ent;

2. T

o or

der s

peci

fic p

erfo

rman

ce o

f the

ir co

ntra

ct o

f em

ploy

men

t;

3. T

o or

der t

he B

ank

to p

ay th

em th

e di

ffere

nce

betw

een

thei

r sa

larie

s an

d/or

the

tax

reim

burs

emen

ts w

hich

they

act

ually

rece

ived

on

the

basi

s of

the

abov

e-m

entio

ned

circ

ular

s, a

nd th

e pa

ymen

ts to

whi

ch th

ey c

laim

they

are

ent

itled

in la

w;

4. (a

) To

ord

er th

e pa

ymen

t of i

nter

est a

t the

pre

vaili

ng ra

te o

n th

e di

ffere

nce;

(b)

To o

rder

the

Ban

k to

reim

burs

e al

l the

ir fe

es, c

osts

and

dis

burs

emen

ts in

curr

ed in

the

prep

arat

ion

ofth

is c

ase,

incl

udin

g re

ason

able

atto

rney

's c

osts

.

14. T

he c

ompe

tenc

e of

the

Trib

unal

to p

ass

judg

men

t upo

n th

ese

App

licat

ions

has

not

bee

n co

ntes

ted

by th

eR

espo

nden

t. A

s th

e ap

plic

atio

ns a

llege

non

-obs

erva

nce

of th

e co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

ofap

poin

tmen

t of t

he A

pplic

ants

, the

Trib

unal

dec

ides

that

it is

com

pete

nt to

det

erm

ine

thes

e m

atte

rs.

15. D

oes

the

Wor

ld B

ank

have

the

pow

er –

and

, if s

o, w

ithin

wha

t lim

its –

uni

late

rally

to c

hang

e th

e co

nditi

ons

of e

mpl

oym

ent o

f its

sta

ff? M

ay B

ank

pers

onne

l inv

oke

the

conc

ept o

f acq

uire

d rig

hts

to p

reve

nt th

e ap

plic

atio

nto

them

of c

hang

es u

nila

tera

lly in

trodu

ced

by th

e B

ank?

The

se tw

o qu

estio

ns re

pres

ent t

wo

diffe

rent

form

ulat

ions

of t

he p

rinci

pal l

egal

issu

e in

volv

ed in

the

pres

ent p

roce

edin

gs. T

he T

ribun

al w

ill a

ppro

ach

its ta

sk

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

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]

of re

solv

ing

thes

e qu

estio

ns b

y fir

st id

entif

ying

the

cond

ition

s of

em

ploy

men

t of B

ank

pers

onne

l. It

will

then

exam

ine

the

issu

e of

the

Ban

k's

right

to a

men

d th

ese

term

s. F

inal

ly, t

he T

ribun

al w

ill c

onsi

der t

he s

peci

ficis

sues

rais

ed b

y th

e pr

oble

ms

of ta

x re

imbu

rsem

ent a

nd s

alar

y ad

just

men

t.

II. T

HE

CO

ND

ITIO

NS

OF

EM

PLO

YM

EN

T

16. N

orm

ally

, mem

bers

of t

he s

taff

ente

r the

ser

vice

of t

he B

ank

as a

resu

lt of

an

exch

ange

of a

lette

r of

appo

intm

ent a

nd a

lette

r of

acc

epta

nce.

The

lette

r of

app

oint

men

t con

veys

to th

e pr

ospe

ctiv

e st

aff m

embe

r“th

e fo

rmal

offe

r of

an

appo

intm

ent t

o th

e st

aff o

f the

Ban

k”. I

t set

s ou

t cer

tain

spe

cific

det

ails

of t

heap

poin

tmen

t, su

ch a

s in

itial

ass

ignm

ent,

sala

ry, d

epen

denc

y al

low

ance

s, e

ntry

dat

e, a

nd in

form

atio

n ab

out

bene

fits,

vis

as, e

tc. I

t als

o st

ates

:

“You

r ba

sic

sala

ry a

nd y

our

depe

nden

cy a

llow

ance

s w

ill b

e ne

t of i

ncom

e ta

xes

as p

rese

ntly

or h

erea

fter

prov

ided

in th

e B

y-La

ws

and

Reg

ulat

ions

of t

he B

ank

...

“You

r ap

poin

tmen

t is

subj

ect t

o th

e co

nditi

ons

of e

mpl

oym

ent o

f the

Ban

k as

at p

rese

nt in

effe

ct a

nd a

sth

ey m

ay b

e am

ende

d fro

m ti

me

to ti

me.

”

In h

is le

tter

of a

ccep

tanc

e th

e pr

ospe

ctiv

e em

ploy

ee s

tate

s th

at h

e ac

cept

s ap

poin

tmen

t to

the

staf

f of t

he B

ank

“... u

nder

the

term

s an

d co

nditi

ons

set f

orth

in m

y le

tter

of a

ppoi

ntm

ent a

nd th

e po

licie

s an

d pr

oced

ures

of

the

Ban

k as

they

may

be

in e

ffect

from

tim

e to

tim

e”.

17. E

mpl

oym

ent b

y th

e B

ank

thus

resu

lts fr

om a

n of

fer

follo

wed

by

an a

ccep

tanc

e, th

at is

to s

ay, a

con

tract

,an

d no

t, as

is th

e ca

se w

ith e

mpl

oym

ent i

n th

e ci

vil s

ervi

ce o

f cer

tain

indi

vidu

al c

ount

ries,

as

a re

sult

of a

unila

tera

l act

of n

omin

atio

n by

the

adm

inis

tratio

n.

18. H

owev

er, t

he fa

ct th

at th

e B

ank'

s em

ploy

ees

ente

r its

ser

vice

on

the

basi

s of

an

exch

ange

of l

ette

rs d

oes

not m

ean

that

thes

e co

ntra

ctua

l ins

trum

ents

con

tain

an

exha

ustiv

e st

atem

ent o

f all

rele

vant

righ

ts a

nd d

utie

s.Th

e tw

o si

des

are

agre

ed o

n th

is p

oint

. The

con

tract

may

be

the

sine

qua

non

of t

he re

latio

nshi

ps, b

ut it

rem

ains

no

mor

e th

an o

ne o

f a n

umbe

r of e

lem

ents

whi

ch c

olle

ctiv

ely

esta

blis

h th

e en

sem

ble

of c

ondi

tions

of

empl

oym

ent o

pera

tive

betw

een

the

Ban

k an

d its

sta

ff m

embe

rs. I

n th

e ca

se o

f oth

er o

rgan

izat

ions

one

look

s fo

rth

ese

othe

r ele

men

ts p

rinci

pally

in th

e co

nstit

uent

inst

rum

ent o

f the

org

aniz

atio

n an

d in

its

Sta

ff R

ules

and

Reg

ulat

ions

. As

the

Ban

k ha

s at

pre

sent

no

Sta

ff R

ules

or R

egul

atio

ns o

ne m

ust l

ook

to th

e A

rticl

es o

fA

gree

men

t of t

he B

ank

and

to th

e B

y-La

ws

and,

dep

endi

ng o

n th

eir

cont

ent,

to c

erta

in m

anua

ls, c

ircul

ars,

note

s an

d st

atem

ents

issu

ed b

y th

e m

anag

emen

t of t

he B

ank

as w

ell a

s to

cer

tain

oth

er s

ourc

es w

hich

will

be

exam

ined

pre

sent

ly.

19. A

s re

gard

s th

e A

rticl

es o

f Agr

eem

ent,

Arti

cle

V, S

ectio

n 1

pres

crib

es th

at th

e B

ank

shal

l hav

e, in

add

ition

toa

Boa

rd o

f Gov

erno

rs, t

he E

xecu

tive

Dire

ctor

s an

d a

Pre

side

nt, s

uch

othe

r offi

cers

and

sta

ff to

per

form

suc

hdu

ties

as th

e B

ank

may

det

erm

ine.

Arti

cle

V, S

ectio

n 2

prov

ides

:

“(f)

The

Boa

rd o

f Gov

erno

rs, a

nd th

e E

xecu

tive

Dire

ctor

s to

the

exte

nt a

utho

rized

, may

ado

pt s

uch

rule

san

d re

gula

tions

as

may

be

nece

ssar

y or

app

ropr

iate

to c

ondu

ct th

e bu

sine

ss o

f the

Ban

k.”

Arti

cle

V, S

ectio

n 5

prov

ides

:

“(b)

The

Pre

side

nt s

hall

be c

hief

of t

he o

pera

ting

staf

f of t

he B

ank

and

shal

l con

duct

, und

er th

e di

rect

ion

ofth

e E

xecu

tive

Dire

ctor

s, th

e or

dina

ry b

usin

ess

of th

e B

ank.

Sub

ject

to th

e ge

nera

l con

trol o

f the

Exe

cutiv

eD

irect

ors,

he

shal

l be

resp

onsi

ble

for

the

orga

niza

tion,

app

oint

men

t and

dis

mis

sal o

f the

offi

cers

and

sta

ff.

“(c)

The

Pre

side

nt, o

ffice

rs a

nd s

taff

of th

e B

ank,

in th

e di

scha

rge

of th

eir

offic

es, o

we

thei

r du

ty e

ntire

ly to

the

Ban

k an

d to

no

othe

r aut

horit

y. E

ach

mem

ber

of th

e B

ank

shal

l res

pect

the

inte

rnat

iona

l cha

ract

er o

f

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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]

this

dut

y an

d sh

all r

efra

in fr

om a

ll at

tem

pts

to in

fluen

ce a

ny o

f the

m in

the

disc

harg

e of

thei

r du

ties.

“(d)

In a

ppoi

ntin

g th

e of

ficer

s an

d st

aff t

he P

resi

dent

sha

ll, s

ubje

ct to

the

para

mou

nt im

porta

nce

of s

ecur

ing

the

high

est s

tand

ards

of e

ffici

ency

and

tech

nica

l com

pete

nce,

pay

due

rega

rd to

the

impo

rtanc

e of

recr

uitin

g pe

rson

nel o

n as

wid

e a

geog

raph

ical

bas

is a

s po

ssib

le.”

Arti

cle

VII,

Sec

tion

9(b)

pro

vide

s:

“No

tax

shal

l be

levi

ed o

n or

in re

spec

t of s

alar

ies

and

emol

umen

ts p

aid

by th

e B

ank

to e

xecu

tive

dire

ctor

s,al

tern

ates

, offi

cial

s or

em

ploy

ees

of th

e B

ank

who

are

not

loca

l citi

zens

, loc

al s

ubje

cts,

or o

ther

loca

lna

tiona

ls.”

20. T

he T

ribun

al tu

rns

from

the

cons

titut

iona

l fou

ndat

ion

to th

e ne

xt g

ener

al in

stru

men

t whi

ch c

ontro

ls th

eB

ank'

s po

wer

to a

ct a

s an

em

ploy

er. R

efer

ence

has

alre

ady

been

mad

e to

the

pow

er a

ccor

ded

to th

e B

oard

of

Gov

erno

rs a

nd th

e E

xecu

tive

Dire

ctor

s by

Arti

cle

V, S

ectio

n 2(

f), to

ado

pt ru

les

and

regu

latio

ns n

eces

sary

or

appr

opria

te to

the

cond

uct o

f the

Ban

k's

busi

ness

. Thi

s po

wer

has

bee

n ex

erci

sed

in a

var

iety

of w

ays

of w

hich

the

mos

t for

mal

in c

hara

cter

is th

e B

y-La

ws.

The

mai

n pr

ovis

ion

in th

ese

By-

law

s re

ferr

ing

to s

taff

mem

bers

isth

at in

Sec

tion

14(b

) whi

ch re

late

d, in

the

perio

d pr

ior

to 1

980,

to ta

x re

imbu

rsem

ent.

21. L

ikew

ise,

the

deci

sion

of t

he B

oard

of G

over

nors

to e

stab

lish

this

Trib

unal

intro

duce

d in

to th

e co

nditi

ons

ofem

ploy

men

t of B

ank

staf

f the

righ

t of r

ecou

rse

to th

is T

ribun

al, i

n ac

cord

ance

with

the

cond

ition

s la

id d

own

inth

e S

tatu

te. T

his

right

form

s an

inte

gral

par

t of t

he le

gal r

elat

ions

hip

betw

een

the

Ban

k an

d its

sta

ff m

embe

rs.

22. F

urth

er e

lem

ents

of t

he le

gal r

elat

ions

hip

betw

een

the

Ban

k an

d its

per

sonn

el a

re a

lso

to b

e fo

und

in th

eP

erso

nnel

Man

ual,

the

Fiel

d O

ffice

Man

ual,

vario

us a

dmin

istra

tive

circ

ular

s an

d in

cer

tain

not

es a

nd s

tate

men

tsof

the

man

agem

ent.

How

ever

, it i

s im

porta

nt to

obs

erve

that

not

all

the

prov

isio

ns o

f the

se m

anua

ls, c

ircul

ars,

note

s, a

nd s

tate

men

ts a

re in

clud

ed in

the

cond

ition

s of

em

ploy

men

t. S

ome

of th

em h

ave

the

char

acte

r of

sim

ple

stat

emen

ts o

f cur

rent

pol

icy

or la

y do

wn

certa

in p

ract

ical

or p

urel

y pr

oced

ural

met

hods

of o

pera

tion.

Itis

, the

refo

re, n

eces

sary

to d

ecid

e in

eac

h ca

se w

heth

er th

e pr

ovis

ion

cons

titut

es o

ne o

f the

con

ditio

ns o

fem

ploy

men

t.

23. T

he p

ract

ice

of th

e or

gani

zatio

n m

ay a

lso,

in c

erta

in c

ircum

stan

ces,

bec

ome

part

of t

he c

ondi

tions

of

empl

oym

ent.

Obv

ious

ly, t

he o

rgan

izat

ion

wou

ld b

e di

scou

rage

d fro

m ta

king

mea

sure

s fa

vora

ble

to it

sem

ploy

ees

on a

n ad

hoc

basi

s if

each

tim

e it

did

so it

had

to ta

ke th

e ris

k of

initi

atin

g a

prac

tice

whi

ch m

ight

beco

me

lega

lly b

indi

ng u

pon

it. T

he in

tegr

atio

n of

pra

ctic

e in

to th

e co

nditi

ons

of e

mpl

oym

ent m

ust t

here

fore

be

limite

d to

that

of w

hich

ther

e is

evi

denc

e th

at it

is fo

llow

ed b

y th

e or

gani

zatio

n in

the

conv

ictio

n th

at it

refle

cts

ale

gal o

blig

atio

n, a

s w

as re

cogn

ized

by

the

Inte

rnat

iona

l Cou

rt o

f Jus

tice

in it

s A

dvis

ory

Opi

nion

on

Judg

men

ts o

fth

e A

dmin

istra

tive

Trib

unal

of t

he IL

O (I

CJ

Rep

orts

195

6, p

. 91)

.

24. T

he s

peci

fic c

ircum

stan

ces

of e

ach

case

may

als

o ha

ve s

ome

bear

ing

on th

e le

gal r

elat

ions

hip

betw

een

the

Ban

k an

d an

indi

vidu

al m

embe

r of

the

staf

f, pa

rticu

larly

the

actu

al c

ondi

tions

in w

hich

the

appo

intm

ent h

asbe

en m

ade.

25. A

noth

er s

ourc

e of

the

right

s an

d du

ties

of th

e st

aff o

f the

Ban

k co

nsis

ts o

f cer

tain

gen

eral

prin

cipl

es o

f law

,th

e ap

plic

abili

ty o

f whi

ch h

as in

fact

bee

n ac

know

ledg

ed b

y th

e B

ank

in it

s w

ritte

n an

d or

al p

lead

ings

.

26. T

he p

artie

s ha

ve d

iscu

ssed

the

ques

tion

whe

ther

the

cond

ition

s of

em

ploy

men

t inc

orpo

rate

in a

dditi

on th

erig

hts

and

dutie

s de

fined

in re

latio

n to

oth

er in

tern

atio

nal o

rgan

izat

ions

by

adm

inis

trativ

e tri

buna

ls c

ompa

rabl

eto

this

one

. Or,

to p

ut it

ano

ther

way

, do

ther

e ex

ist r

ules

com

mon

to a

ll in

tern

atio

nal o

rgan

izat

ions

, and

whi

chm

ust,

ther

efor

e, ip

sofa

cto

appl

y in

the

lega

l rel

atio

ns b

etw

een

the

Ban

k an

d its

em

ploy

ees,

in s

uch

a w

ay a

s to

dete

rmin

e th

e rig

hts

and

dutie

s of

the

two

parti

es in

the

pres

ent c

ase?

Is th

ere

a co

mm

on c

orpu

sju

ris s

hare

dby

all

inte

rnat

iona

l offi

cial

s?

27. T

he T

ribun

al, w

hich

is a

n in

tern

atio

nal t

ribun

al, c

onsi

ders

that

its

task

is to

dec

ide

inte

rnal

dis

pute

s be

twee

n

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

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the

Ban

k an

d its

sta

ff w

ithin

the

orga

nize

d le

gal s

yste

m o

f the

Wor

ld B

ank

and

that

it m

ust a

pply

the

inte

rnal

law

of t

he B

ank

as th

e la

w g

over

ning

the

cond

ition

s of

em

ploy

men

t.

28. T

he T

ribun

al d

oes

not o

verlo

ok th

e fa

ct th

at e

ach

inte

rnat

iona

l org

aniz

atio

n ha

s its

ow

n co

nstit

uent

inst

rum

ent;

its o

wn

mem

bers

hip;

its

own

inst

itutio

nal s

truct

ure;

its

own

func

tions

; its

ow

n m

easu

re o

f leg

alpe

rson

ality

; its

ow

n pe

rson

nel p

olic

y; a

nd th

at th

e di

ffere

nce

betw

een

one

orga

niza

tion

and

anot

her a

re s

oob

viou

s th

at th

e no

tion

of a

com

mon

law

of i

nter

natio

nal o

rgan

izat

ion

mus

t be

subj

ect t

o nu

mer

ous

and

som

etim

es s

igni

fican

t qua

lific

atio

ns. B

ut th

e fa

ct th

at th

ese

diffe

renc

es e

xist

doe

s no

t exc

lude

the

poss

ibili

tyth

at s

imila

r con

ditio

ns m

ay a

ffect

the

solu

tion

of c

ompa

rabl

e pr

oble

ms.

Whi

le th

e va

rious

inte

rnat

iona

lad

min

istra

tive

tribu

nals

do

not c

onsi

der t

hem

selv

es b

ound

by

each

oth

er's

dec

isio

ns a

nd h

ave

wor

ked

out a

som

etim

es d

iver

gent

juris

prud

ence

ada

pted

to e

ach

orga

niza

tion,

it is

equ

ally

true

that

on

certa

in p

oint

s th

eso

lutio

ns re

ache

d ar

e no

t sig

nific

antly

diff

eren

t. It

even

hap

pens

that

the

judg

men

ts o

f one

trib

unal

may

refe

r to

the

juris

prud

ence

of a

noth

er. S

ome

of th

ese

judg

men

ts e

ven

go s

o fa

r as

to s

peak

of g

ener

al p

rinci

ples

of

inte

rnat

iona

l civ

il se

rvic

e la

w o

r of a

bod

y of

rule

s ap

plic

able

to th

e in

tern

atio

nal c

ivil

serv

ice.

Whe

ther

thes

esi

mila

r fea

ture

s am

ount

to a

true

cor

pus

juris

is n

ot a

mat

ter o

n w

hich

it is

nec

essa

ry fo

r th

e Tr

ibun

al to

exp

ress

a vi

ew. T

he T

ribun

al is

free

to ta

ke n

ote

of s

olut

ions

wor

ked

out i

n su

ffici

ently

com

para

ble

cond

ition

s by

oth

erad

min

istra

tive

tribu

nals

, par

ticul

arly

thos

e of

the

Uni

ted

Nat

ions

fam

ily. I

n th

is w

ay th

e Tr

ibun

al m

ay ta

keac

coun

t bot

h of

the

dive

rsity

of i

nter

natio

nal o

rgan

izat

ions

and

the

spec

ial c

hara

cter

of t

he B

ank

with

out

negl

ectin

g th

e te

nden

cy to

war

ds a

cer

tain

rapp

roch

emen

t.

29. I

t is

impo

rtant

to e

mph

asiz

e th

at th

e le

gal b

asis

for

the

appl

icat

ion

to e

ach

empl

oyee

of r

ules

out

side

his

own

“con

tract

” st

ricto

sen

su d

oes

not r

est o

n th

ose

term

s of

the

lette

r of

app

oint

men

t and

the

lette

r of

acce

ptan

ce w

hich

pro

vide

that

the

appo

intm

ent i

s “s

ubje

ct to

the

cond

ition

s of

em

ploy

men

t of t

he B

ank”

and

whi

ch m

entio

n sp

ecifi

cally

the

Ban

k's

polic

y in

resp

ect t

o de

pend

ency

allo

wan

ce, b

enef

its, r

etire

men

t,in

sura

nce,

etc

. Tru

e, o

ne m

ight

say

that

, in

acce

ptin

g th

e ap

poin

tmen

t “of

fere

d” b

y th

e B

ank,

the

staf

f mem

ber

at th

e sa

me

time

“acc

epte

d” a

s a

who

le th

e re

leva

nt ru

les

and

polic

ies.

The

app

licab

ility

of t

hese

to th

eem

ploy

ee is

, how

ever

, the

con

sequ

ence

of t

heir

obje

ctiv

e ex

iste

nce

as p

art o

f the

lega

l sys

tem

to w

hich

the

staf

f mem

ber

beco

mes

sub

ject

by

ente

ring

into

a c

ontra

ct w

ith th

e or

gani

zatio

n. T

he d

eter

min

atio

n of

the

law

appl

icab

le b

y th

is T

ribun

al c

anno

t dep

end

on s

ubje

ctiv

e co

nsid

erat

ions

of a

hig

hly

indi

vidu

al c

hara

cter

whi

chw

ould

resu

lt, if

one

wer

e to

ado

pt th

em, i

n th

e ap

plic

atio

n to

sta

ff m

embe

rs o

f diff

eren

t rul

es o

f law

acc

ordi

ng to

the

expe

ctat

ions

of e

ach

one

at th

e m

omen

t he

“acc

epte

d” h

is a

ppoi

ntm

ent.

The

Trib

unal

will

reve

rt to

this

subj

ect l

ater

.

III. T

HE

BA

NK

'S P

OW

ER

OF

AM

EN

DM

EN

T

30. T

he fi

rst c

onse

quen

ce o

f the

fact

that

the

lega

l pos

ition

of B

ank

empl

oyee

s is

in la

rge

part

fixe

d by

obje

ctiv

e ru

les

of a

gen

eral

and

impe

rson

al c

hara

cter

is th

at th

e or

gani

zatio

n m

ust a

pply

thes

e ru

les

to e

ach

mem

ber

of th

e st

aff i

ndiv

idua

lly, a

nd th

at, i

f it f

ails

to o

bser

ve th

em, t

he la

tter

may

turn

to th

is T

ribun

al a

nd s

eek

the

rem

edie

s se

t out

in A

rticl

e X

II of

the

Sta

tute

. In

othe

r wor

ds, b

ecau

se e

very

aut

horit

y is

bou

nd b

y its

ow

nru

les

for

so lo

ng a

s su

ch ru

les

have

not

bee

n am

ende

d or

abr

ogat

ed in

divi

dual

dec

isio

ns m

ust c

onfo

rm to

the

gene

ral r

ules

.

31. A

sec

ond

and

no le

ss im

porta

nt c

onse

quen

ce o

f the

dom

inan

tly o

bjec

tive

natu

re o

f the

lega

l situ

atio

n of

the

staf

f of t

he B

ank

is th

at th

e B

ank

poss

esse

s, in

com

mon

with

oth

er in

tern

atio

nal o

rgan

izat

ions

, an

inhe

rent

pow

er to

cha

nge

– su

bjec

t to

cond

ition

s w

hich

the

Trib

unal

will

exa

min

e la

ter

– th

e ge

nera

l and

impe

rson

alru

les

esta

blis

hing

the

right

s an

d du

ties

of th

e st

aff.

It is

a w

ell-e

stab

lishe

d le

gal p

rinci

ple

that

the

pow

er to

mak

e ru

les

impl

ies

in p

rinci

ple

the

right

to a

men

d th

em. T

his

pow

er fl

ows

from

the

resp

onsi

bilit

ies

of th

eco

mpe

tent

aut

horit

ies

of th

e B

ank.

32. W

hile

the

pow

er o

f the

Ban

k to

cha

nge

the

gene

ral r

ules

def

inin

g th

e rig

hts

and

oblig

atio

ns o

f the

sta

ffca

nnot

be

deni

ed –

and

inde

ed is

not

den

ied

by th

e A

pplic

ants

– th

e qu

estio

n w

heth

er th

e ch

ange

s in

trodu

ced

by th

e B

ank

may

be

appl

ied

to s

taff

mem

bers

em

ploy

ed b

efor

e th

eir

adop

tion

is a

mat

ter o

n w

hich

the

parti

esex

pres

s di

verg

ent v

iew

s.

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

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33. T

he A

pplic

ants

rely

prin

cipa

lly o

n w

hat t

hey

call

the

doct

rine

of a

cqui

red

right

s, u

nder

whi

ch “t

he e

mpl

oyer

orga

niza

tion

may

not

uni

late

rally

mak

e su

bsta

ntia

l adv

erse

cha

nges

in th

e es

sent

ial t

erm

s of

an

empl

oyee

'sap

poin

tmen

t”. T

hey

mai

ntai

n th

at, e

ven

if th

e st

aff m

embe

r ha

s ac

cept

ed in

adv

ance

in h

is c

ontra

ct o

fem

ploy

men

t, w

ithou

t any

rese

rvat

ion

or li

mita

tion,

the

orga

niza

tion'

s po

wer

to a

men

d th

e co

ntra

ct –

whi

ch is

the

case

in th

e le

tters

of a

ppoi

ntm

ent a

nd a

ccep

tanc

e of

the

Ban

k –

this

pow

er c

anno

t go

so fa

r as

to a

utho

rize

the

orga

niza

tion

unila

tera

lly to

pre

judi

ce th

e ac

quire

d rig

hts

of th

e st

aff m

embe

rs. T

he R

espo

nden

t rej

ects

the

App

lican

ts’ c

onte

ntio

n in

rega

rd to

acq

uire

d rig

hts

as u

nrea

sona

ble

and

unre

alis

tic: a

ccep

tanc

e of

suc

h a

theo

ry, t

he R

espo

nden

t arg

ues,

wou

ld p

reve

nt th

e B

ank

from

adj

ustin

g its

per

sonn

el p

olic

ies

to c

hang

ing

circ

umst

ance

s an

d w

ould

pla

ce it

in a

n ad

min

istra

tive

stra

itjac

ket.

Mor

eove

r, a

dds

the

Res

pond

ent,

the

doct

rine

of a

cqui

red

right

s co

uld

not b

e ap

plie

d he

re w

ithou

t dis

rega

rdin

g th

e cl

ear

lang

uage

of t

he A

pplic

ants

' let

ters

of

appo

intm

ent.

34. H

owev

er, o

nce

thes

e st

rong

ly c

ontra

stin

g an

d at

firs

t sig

ht ir

reco

ncila

ble

posi

tions

are

stu

died

at c

lose

rra

nge,

they

app

ear t

o ha

ve b

een

put f

orw

ard

by th

e pa

rties

with

som

e nu

ance

s. T

he A

pplic

ants

qua

lify

thei

rth

eory

of a

cqui

red

right

s by

two

limita

tions

. Firs

t, ac

quire

d rig

hts

stan

d in

the

way

onl

y of

“sub

stan

tial a

dver

sech

ange

s in

the

esse

ntia

l ter

ms

of th

e em

ploy

ee's

app

oint

men

t”. T

his

impl

ies

a co

ntra

rio th

at th

e B

ank

may

mak

e (i)

favo

rabl

e ch

ange

s; (i

i) in

subs

tant

ial c

hang

es; a

nd (i

ii) c

hang

es in

non

esse

ntia

l ter

ms.

Mor

eove

r,A

pplic

ants

adm

it th

at th

ere

may

be

inst

ance

s of

“exi

gent

circ

umst

ance

s” o

r “ov

erw

helm

ing

cont

inge

ncie

s” u

nder

whi

ch th

e ac

quire

d rig

hts

doct

rine

give

s w

ay to

the

Ban

k's

need

to a

ct. T

he R

espo

nden

t, on

the

othe

r han

d,th

ough

den

ying

the

exis

tenc

e of

any

so-

calle

d “d

octri

ne o

f acq

uire

d rig

hts”

as

invo

ked

by th

e A

pplic

ants

,ac

know

ledg

es th

at th

e B

ank

cann

ot a

ct in

an

unfe

ttere

d m

anne

r. Its

pow

er o

f uni

late

ral a

men

dmen

t, in

Res

pond

ent's

ow

n vi

ew a

s el

abor

ated

dur

ing

the

oral

ple

adin

gs, i

s su

bjec

t to

gene

ral p

rinci

ples

of l

aw s

uch

asth

e pr

inci

ple

of n

on-r

etro

activ

ity, t

he p

rinci

ple

of n

ondi

scrim

inat

ion

and

the

prin

cipl

e of

reas

onab

le re

latio

nshi

pbe

twee

n ai

ms

and

mea

ns.

35. T

he T

ribun

al is

of t

he v

iew

that

the

Ban

k ha

s th

e po

wer

uni

late

rally

to c

hang

e co

nditi

ons

of e

mpl

oym

ent o

fth

e st

aff.

At t

he s

ame

time,

sig

nific

ant l

imita

tions

exi

st u

pon

the

exer

cise

of s

uch

pow

er.

36. T

he e

xist

ence

of t

he B

ank'

s po

wer

uni

late

rally

to c

hang

e co

nditi

ons

of e

mpl

oym

ent r

ests

on

its im

plie

dpo

wer

to p

ursu

e fu

lly a

nd e

ffici

ently

the

purp

oses

and

obj

ectiv

es fo

r w

hich

it w

as c

reat

ed. A

s th

e le

gal

rela

tions

hip

betw

een

the

Ban

k an

d its

sta

ff do

es n

ot re

st o

n an

y na

tiona

l leg

al s

yste

m, i

t is

in th

e B

ank'

s ow

nin

tern

al la

w th

at th

e ba

sis

for

the

Ban

k's

pow

er m

ust b

e fo

und.

To

deny

the

exis

tenc

e of

any

pow

er u

nila

tera

llyto

am

end

the

cond

ition

s of

em

ploy

men

t of e

xist

ing

staf

f wou

ld le

ad to

a s

ituat

ion

in w

hich

ther

e ar

e as

man

yru

les

as th

ere

are

empl

oyee

s w

ho e

nter

ed th

e se

rvic

e of

the

Ban

k at

diff

eren

t dat

es. T

his

wou

ld c

reat

eun

just

ifiab

le in

equa

litie

s be

twee

n th

e va

rious

sta

ff m

embe

rs a

nd w

ould

be

cont

rary

to th

e el

emen

tary

requ

irem

ents

of g

ood

adm

inis

tratio

n. T

he e

xist

ence

of o

bjec

tive

rule

s of

a g

ener

al a

nd im

pers

onal

cha

ract

erim

plie

s no

t onl

y th

e po

wer

of t

he o

rgan

izat

ion

to c

hang

e th

ese

rule

s, b

ut a

lso

a po

wer

to d

ecid

e th

at th

e ne

wru

les

shou

ld a

pply

imm

edia

tely

to p

erso

nnel

alre

ady

empl

oyed

.

37. T

he A

pplic

ants

adv

ance

the

idea

that

the

elem

ents

of t

he c

ondi

tions

of e

mpl

oym

ent m

ust r

emai

n at

leas

t as

favo

rabl

e to

the

staf

f mem

ber

durin

g th

e w

hole

per

iod

of h

is e

mpl

oym

ent a

s th

ey w

ere

at th

e da

te o

f the

com

men

cem

ent o

f his

ser

vice

to th

e B

ank.

It is

on

thos

e co

nditi

ons

of e

mpl

oym

ent,

so th

e A

pplic

ants

mai

ntai

n,th

at th

e st

aff m

embe

r pl

aced

his

“rel

ianc

e” a

nd h

is “e

xpec

tatio

ns”;

with

out t

hem

he

wou

ld n

ot h

ave

agre

ed to

beco

me

an e

mpl

oyee

or w

ould

not

sub

sequ

ently

hav

e re

mai

ned

in th

e se

rvic

e of

the

Ban

k.

38. I

n th

e op

inio

n of

the

Trib

unal

the

cond

ition

s of

em

ploy

men

t can

not

be

froze

n at

the

date

the

staf

f mem

ber

join

s th

e B

ank.

It is

rele

vant

to n

ote

that

Arti

cle

II, p

arag

raph

1, o

f the

Sta

tute

, afte

r de

finin

g th

e ju

risdi

ctio

n of

the

Trib

unal

by

refe

renc

e to

“non

-obs

erva

nce

of th

e co

ntra

ct o

f em

ploy

men

t or t

erm

s of

app

oint

men

t”, p

rovi

des:

“The

wor

ds 'c

ontra

ct o

f em

ploy

men

t' an

d 'te

rms

of a

ppoi

ntm

ent'

incl

ude

all p

ertin

ent r

egul

atio

ns a

nd ru

les

info

rce

at th

e tim

e of

alle

ged

non-

obs

erva

nce.

...”

This

pro

visi

on c

lear

ly e

stab

lishe

s th

at th

e co

nditi

ons

of e

mpl

oym

ent f

or w

hich

the

Trib

unal

mus

t ass

ure

resp

ect

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

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are

not t

hose

whi

ch e

xist

ed a

t the

dat

e of

app

oint

men

t of t

he c

laim

ant b

ut th

ose

whi

ch e

xist

at t

he d

ate

of th

eal

lege

d no

n-ob

serv

ance

; it i

mpl

ies,

by

its v

ery

wor

ds, p

ossi

ble

chan

ges

in th

e co

nditi

ons

of e

mpl

oym

ent.

39. T

he s

ame

cons

ider

atio

ns w

hich

und

erlie

the

exis

tenc

e of

a p

ower

of u

nila

tera

l am

endm

ent,

nam

ely,

the

inte

rnal

law

of t

he B

ank

and

its im

plie

d po

wer

s, le

ad th

e Tr

ibun

al to

reje

ct th

e id

ea th

at th

is p

ower

sho

uld

beto

tally

unl

imite

d. S

uch

an id

ea w

ould

run

coun

ter t

o “th

e pa

ram

ount

impo

rtanc

e of

sec

urin

g th

e hi

ghes

tst

anda

rds

of e

ffici

ency

and

of t

echn

ical

com

pete

nce”

(Arti

cle

V, S

ectio

n 5(

d) o

f the

Arti

cles

of A

gree

men

t). N

oon

e w

ould

wis

h to

be

empl

oyed

in a

n or

gani

zatio

n in

whi

ch th

ere

wer

e no

lim

its a

t all

to th

e po

wer

of t

heem

ploy

er.

40. H

ow th

en is

a d

istin

ctio

n to

be

draw

n be

twee

n th

ose

unila

tera

l am

endm

ents

whi

ch a

re p

erm

issi

ble

and

thos

e w

hich

are

not

? Th

e Tr

ibun

al n

otes

, firs

t, th

at s

uch

dist

inct

ion

cann

ot re

st o

n th

e ex

tent

to w

hich

a s

taff

mem

ber

acce

pted

suc

h po

wer

of a

men

dmen

t in

his

lette

r of

app

oint

men

t. E

ven

if no

rese

rvat

ion

of th

e po

wer

of

amen

dmen

t wer

e ex

pres

sly

incl

uded

in th

e le

tters

of a

ppoi

ntm

ent,

such

a p

ower

wou

ld b

e im

plie

d fro

m th

ein

tern

al la

w o

f the

Ban

k. L

ikew

ise,

eve

n in

thos

e ca

ses

whe

re a

pow

er o

f am

endm

ent i

s re

serv

ed in

term

sw

hich

impo

se n

o lim

itatio

n up

on it

s ex

erci

se, t

his

cann

ot b

e co

nstru

ed to

acc

ord

to th

e or

gani

zatio

n an

unre

stric

ted

pow

er o

f am

endm

ent.

The

scop

e of

the

wor

ds a

s us

ed in

the

exch

ange

of l

ette

rs m

ust b

e re

adag

ains

t the

bac

kgro

und

of th

e B

ank'

s in

tern

al la

w, a

nd it

is n

ot o

n th

e st

reng

th a

nd e

xten

t of a

ny in

divi

dual

'sac

cept

ance

that

the

pow

er o

f am

endm

ent a

nd it

s lim

itatio

ns m

ay b

e de

fined

.

41. N

or c

an th

e di

stin

ctio

n be

twee

n w

hat i

s pe

rmis

sibl

e an

d w

hat i

s im

perm

issi

ble

rest

on

the

stat

e of

min

d or

the

inte

ntio

ns o

f sta

ff m

embe

rs a

t the

tim

e of

taki

ng th

eir

empl

oym

ent,

on th

eir

“exp

ecta

tions

” or “

relia

nce”

or

on th

e m

otiv

atin

g fa

ctor

s w

hich

mig

ht h

ave

indu

ced

them

to a

ccep

t or r

emai

n in

em

ploy

men

t with

the

Ban

k.S

ubje

ctiv

e co

nsid

erat

ions

are

at b

est d

iffic

ult t

o id

entif

y an

d th

e di

fficu

lty in

crea

ses

with

tim

e. T

he p

ossi

bilit

yex

ists

that

diff

eren

t con

side

ratio

ns m

ay p

reva

il w

ith d

iffer

ent i

ndiv

idua

ls, t

hus

occa

sion

ing

a di

vers

ity o

fgo

vern

ing

rule

s w

here

uni

form

ity is

nec

essa

ry. M

oreo

ver,

ther

e ar

e at

leas

t tw

o su

bjec

tive

inte

ntio

ns in

any

cont

ract

. The

re is

no

mor

e re

ason

to a

ttach

gre

ater

wei

ght t

o th

e in

tent

ion

of th

e st

aff m

embe

r th

an to

that

of

the

Ban

k, F

urth

erm

ore,

sta

ff m

embe

rs a

re e

ntitl

ed to

the

obse

rvan

ce o

f the

ir co

nditi

ons

of e

mpl

oym

ent a

s th

eym

ay e

xist

from

tim

e to

tim

e, a

nd n

ot o

nly

of th

ose

term

s of

app

oint

men

t whi

ch in

duce

d th

em to

acc

ept s

ervi

cew

ith th

e B

ank

and

on th

e m

aint

enan

ce o

f whi

ch th

ey h

ave

plac

ed th

eir

“exp

ecta

tions

” and

thei

r “r

elia

nce”

. In

ente

ring

the

serv

ice

of th

e B

ank,

the

staf

f mem

ber

expe

cts,

or s

houl

d ex

pect

, tha

t the

se e

lem

ents

may

be

alte

red

in th

e fu

ture

to ta

ke a

ccou

nt o

f cha

ngin

g ci

rcum

stan

ces.

42. T

he T

ribun

al c

onsi

ders

that

in e

xam

inin

g th

e nu

mer

ous

and

varie

d el

emen

ts o

f the

con

ditio

ns o

fem

ploy

men

t, a

maj

or d

istin

ctio

n m

ust b

e dr

awn.

Cer

tain

ele

men

ts a

re fu

ndam

enta

l and

ess

entia

l in

the

bala

nce

of ri

ghts

and

dut

ies

of th

e st

aff m

embe

r; th

ey a

re n

ot o

pen

to a

ny c

hang

e w

ithou

t the

con

sent

of t

hest

aff m

embe

r af

fect

ed. O

ther

s ar

e le

ss fu

ndam

enta

l and

less

ess

entia

l in

this

bal

ance

; the

y m

ay b

e un

ilate

rally

chan

ged

by th

e B

ank

in th

e ex

erci

se o

f its

pow

er, s

ubje

ct to

the

limits

and

con

ditio

ns w

hich

will

be

exam

ined

late

r. In

var

ious

form

s an

d w

ith d

iffer

ing

term

inol

ogy

this

dis

tinct

ion

is fo

und

in th

e Ju

rispr

uden

ce o

f oth

erin

tern

atio

nal a

dmin

istra

tive

tribu

nals

.

43. T

he T

ribun

al re

cogn

izes

that

it is

not

pos

sibl

e to

des

crib

e in

abs

tract

term

s th

e lin

e be

twee

n es

sent

ial a

ndno

n-es

sent

ial e

lem

ents

any

mor

e th

an it

is in

abs

tract

term

s po

ssib

le to

dis

cern

the

line

betw

een

wha

t is

reas

onab

le a

nd u

nrea

sona

ble,

fair

and

unfa

ir, e

quita

ble

and

ineq

uita

ble.

Eac

h di

stin

ctio

n tu

rns

upon

the

circ

umst

ance

s of

the

parti

cula

r cas

e, a

nd u

ltim

atel

y up

on th

e po

ssib

ility

of r

ecou

rse

to im

parti

al d

eter

min

atio

n.H

owev

er, t

his

diffi

culty

has

not

pre

vent

ed d

istin

ctio

ns o

f thi

s ki

nd p

layi

ng a

cen

tral r

ole

in th

e ap

plic

atio

n of

the

law

gen

eral

ly a

nd th

e Tr

ibun

al s

ees

no re

ason

for

reje

ctin

g th

e re

leva

nce

of s

uch

a di

stin

ctio

n in

the

inte

rnal

law

of t

he B

ank.

Som

etim

es it

will

be

the

prin

cipl

e its

elf o

f a c

ondi

tion

of e

mpl

oym

ent w

hich

pos

sess

es a

nes

sent

ial a

nd fu

ndam

enta

l cha

ract

er, w

hile

its

impl

emen

tatio

n w

ill p

osse

ss a

less

fund

amen

tal a

nd le

sses

sent

ial c

hara

cter

. In

othe

r cas

es, o

ne o

r ano

ther

ele

men

t in

the

lega

l sta

tus

of a

sta

ff m

embe

r w

ill b

elon

gen

tirel

y –

both

prin

cipl

e an

d im

plem

enta

tion

– to

one

or a

noth

er o

f the

se c

ateg

orie

s. In

som

e ca

ses

the

dist

inct

ion

will

rest

upo

n a

quan

titat

ive

crite

rion;

in o

ther

s, it

will

rest

on

qual

itativ

e co

nsid

erat

ions

. Som

etim

es it

is th

e in

clus

ion

of a

spe

cific

and

wel

l-def

ined

und

erta

king

in th

e le

tters

of a

ppoi

ntm

ent a

nd a

ccep

tanc

e th

atm

ay e

ndow

suc

h an

und

erta

king

with

the

qual

ity o

f bei

ng e

ssen

tial.

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

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FDF8

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006B

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AM

]

44. I

n de

scrib

ing

the

dist

inct

ion

betw

een

esse

ntia

l and

non

-ess

entia

l ele

men

ts, t

he T

ribun

al p

refe

rs n

ot to

use

such

term

inol

ogy

as “c

ontra

ctua

l rig

hts”

as

oppo

sed

to “s

tatu

tory

righ

ts”.

Som

e of

the

cond

ition

s co

ntai

ned

inth

e “c

ontra

ct,”

that

is, i

n th

e le

tters

of a

ppoi

ntm

ent a

nd a

ccep

tanc

e, m

ay b

e no

n-fu

ndam

enta

l and

non

-es

sent

ial,

whi

le s

ome

of th

e co

nditi

ons

lyin

g ou

tsid

e th

e “c

ontra

ct”,

and

ther

efor

e ca

lled

“sta

tuto

ry”,

may

be

fund

amen

tal a

nd e

ssen

tial.

Like

wis

e, th

e Tr

ibun

al p

refe

rs n

ot to

invo

ke th

e ph

rase

“acq

uire

d rig

hts”

in o

rder

tode

scrib

e es

sent

ial r

ight

s. T

he c

onte

nt o

f thi

s ph

rase

is d

iffic

ult t

o id

entif

y. It

is n

ot b

ecau

se th

ere

is a

n ac

quire

drig

ht th

at th

ere

is n

o po

wer

of u

nila

tera

l am

endm

ent.

It is

rath

er b

ecau

se c

erta

in c

ondi

tions

of e

mpl

oym

ent a

reso

ess

entia

l and

fund

amen

tal a

nd, b

y re

ason

ther

eof,

unch

ange

able

with

out t

he c

onse

nt o

f the

sta

ff m

embe

r,th

at o

ne c

an s

peak

of a

cqui

red

right

s. In

oth

er w

ords

, wha

t one

cal

ls “t

he d

octri

ne o

f acq

uire

d rig

hts”

doe

s no

tco

nstit

ute

the

caus

e or

just

ifica

tion

of th

e un

chan

geab

le c

hara

cter

of c

erta

in c

ondi

tions

of e

mpl

oym

ent.

It is

sim

ply

a ha

ndy

expr

essi

on o

f thi

s un

chan

geab

le c

hara

cter

, of w

hich

the

caus

e an

d th

e ju

stifi

catio

n ar

e to

be

foun

d in

the

fund

amen

tal a

nd e

ssen

tial c

hara

cter

of t

he re

leva

nt c

ondi

tions

of e

mpl

oym

ent.

45. A

s ha

s be

en s

tate

d, w

hile

the

fund

amen

tal a

nd e

ssen

tial e

lem

ents

of t

he c

ondi

tions

of e

mpl

oym

ent m

ayno

t be

amen

ded

unila

tera

lly, t

he n

on-fu

ndam

enta

l and

non

-ess

entia

l ele

men

ts a

re s

ubje

ct to

uni

late

ral

amen

dmen

t. Th

is p

ower

is d

iscr

etio

nary

and

it is

not

for

this

Trib

unal

to s

ubst

itute

its

own

judg

men

t for

that

of

the

com

pete

nt o

rgan

s of

the

Ban

k in

exe

rcis

ing

that

dis

cret

ion.

How

ever

, the

Ban

k's

pow

er to

am

end

non-

esse

ntia

l ter

ms

may

be

exer

cise

d su

bjec

t onl

y to

cer

tain

lim

itatio

ns. D

iscr

etio

nary

pow

er is

not

abs

olut

e po

wer

.

46. F

irst,

no re

troac

tive

effe

ct m

ay b

e gi

ven

to a

ny a

men

dmen

ts a

dopt

ed b

y th

e B

ank.

The

Ban

k ca

nnot

depr

ive

staf

f mem

bers

of a

ccru

ed ri

ghts

for

serv

ices

alre

ady

rend

ered

. Thi

s w

ell-e

stab

lishe

d pr

inci

ple

has

been

appl

ied

in m

any

judg

men

ts o

f oth

er in

tern

atio

nal a

dmin

istra

tive

tribu

nals

.

47. T

he p

rinci

ple

of n

on-r

etro

activ

ity is

not

the

only

lim

itatio

n up

on th

e po

wer

to a

men

d th

e no

n-fu

ndam

enta

lel

emen

ts o

f the

con

ditio

ns o

f em

ploy

men

t. Th

e B

ank

wou

ld a

buse

its

disc

retio

n if

it w

ere

to a

dopt

suc

hch

ange

s fo

r re

ason

s al

ien

to th

e pr

oper

func

tioni

ng o

f the

org

aniz

atio

n an

d to

its

duty

to e

nsur

e th

at it

has

ast

aff p

osse

ssin

g “th

e hi

ghes

t sta

ndar

ds o

f effi

cien

cy a

nd o

f tec

hnic

al c

ompe

tenc

e”. C

hang

es m

ust b

e ba

sed

ona

prop

er c

onsi

dera

tion

of re

leva

nt fa

cts.

The

y m

ust b

e re

ason

ably

rela

ted

to th

e ob

ject

ive

whi

ch th

ey a

rein

tend

ed to

ach

ieve

. The

y m

ust b

e m

ade

in g

ood

faith

and

mus

t not

be

prom

pted

by

impr

oper

mot

ives

. The

ym

ust n

ot d

iscr

imin

ate

in a

n un

just

ifiab

le m

anne

r bet

wee

n in

divi

dual

s or

gro

ups

with

in th

e st

aff.

Am

endm

ents

mus

t be

mad

e in

a re

ason

able

man

ner s

eeki

ng to

avo

id e

xces

sive

and

unn

eces

sary

har

m to

the

staf

f. In

this

resp

ect,

the

care

with

whi

ch a

refo

rm h

as b

een

stud

ied

and

the

cond

ition

s at

tach

ed to

a c

hang

e ar

e to

be

take

n in

to a

ccou

nt b

y th

e Tr

ibun

al.

48. T

he T

ribun

al m

ust s

atis

fy it

self

in e

ach

case

that

the

Ban

k's

pow

er to

cha

nge

the

non-

fund

amen

tal

elem

ents

in th

e co

nditi

ons

of e

mpl

oym

ent o

f its

em

ploy

ees

has

not b

een

exer

cise

d ei

ther

retro

activ

ely

or in

an

arbi

trary

or o

ther

wis

e im

prop

er m

anne

r.

IV. T

AX

RE

IMB

UR

SE

ME

NT

49. I

n th

e lig

ht o

f the

prin

cipl

es a

nd ru

les

of la

w w

hich

hav

e ju

st b

een

stat

ed, t

he T

ribun

al n

ow in

tend

s to

exam

ine

whe

ther

the

intro

duct

ion

in re

latio

n to

the

App

lican

ts L

amso

n-S

crib

ner,

Ree

se, R

eism

an-T

oof a

ndS

hapi

ro, o

f a n

ew s

yste

m o

f tax

reim

burs

emen

t with

affe

ct fr

om J

anua

ry 1

, 198

0 co

nstit

uted

a n

on-o

bser

vanc

eof

thei

r co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

of a

ppoi

ntm

ent.

50. T

he o

rigin

s of

the

syst

em o

f tax

reim

burs

emen

t go

back

to 1

945.

As

alre

ady

poin

ted

out,

Arti

cle

VII,

Sec

tion

9(b)

of t

he A

rticl

es o

f Agr

eem

ent o

f the

Ban

k pr

ovid

es: “

No

tax

shal

l be

levi

ed o

n or

in re

spec

t of s

alar

ies

and

emol

umen

ts p

aid

by th

e B

ank

to E

xecu

tive

Dire

ctor

s, a

ltern

ates

, offi

cial

s or

em

ploy

ees

of th

e B

ank

who

are

not

loca

l citi

zens

, loc

al s

ubje

cts,

or o

ther

loca

l nat

iona

ls.”

At i

ts in

augu

ral m

eetin

g, th

e B

oard

of G

over

nors

ado

pted

on 1

6 M

arch

194

6 a

reso

lutio

n re

com

men

ding

to th

e M

embe

rs o

f the

Ban

k th

at th

ey ta

ke n

eces

sary

act

ion

toex

empt

from

nat

iona

l tax

atio

n sa

larie

s an

d al

low

ance

s pa

id to

the

staf

f of t

he B

ank.

The

reso

lutio

n st

ated

:

“App

ropr

iate

mea

sure

s fo

r th

e el

imin

atio

n or

equ

aliz

atio

n of

the

burd

en o

f nat

iona

l tax

es u

pon

sala

ries

and

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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]

allo

wan

ces

paid

by

(the

Ban

k) a

re in

disp

ensa

ble

to th

e ac

hiev

emen

t of e

quity

am

ong

its m

embe

rs a

ndeq

ualit

y am

ong

its p

erso

nnel

.”

How

ever

, as

the

solu

tion

of re

leva

nt le

gal a

nd o

ther

pro

blem

s to

ach

ieve

this

aim

wou

ld ta

ke ti

me,

the

Boa

rd o

fG

over

nors

, at i

ts fi

rst A

nnua

l Mee

ting

in th

e au

tum

n of

194

6, a

dopt

ed B

y-La

ws

cont

aini

ng th

e fo

llow

ing

prov

isio

n (S

ectio

n 14

(b))

:

“Pen

ding

the

nece

ssar

y ac

tion

bein

g ta

ken

by m

embe

rs to

exe

mpt

from

nat

iona

l tax

atio

n sa

larie

s an

dal

low

ance

s pa

id o

ut o

f the

bud

get o

f the

Ban

k, th

e G

over

nors

and

the

Exe

cutiv

e D

irect

ors,

and

thei

rA

ltern

ates

, the

Pre

side

nt, a

nd th

e st

aff m

embe

rs s

hall

be re

imbu

rsed

by

the

Ban

k fo

r th

e ta

xes

whi

ch th

eyar

e re

quire

d to

pay

on

such

sal

arie

s an

d al

low

ance

s.

“In c

ompu

ting

the

amou

nt o

f tax

adj

ustm

ent t

o be

mad

e w

ith re

spec

t to

any

indi

vidu

al, i

t sha

ll be

pre

sum

edfo

r th

e pu

rpos

es o

f the

com

puta

tion

that

the

inco

me

rece

ived

from

the

bank

is h

is to

tal i

ncom

e. A

ll sa

larie

san

d al

low

ance

s pr

escr

ibed

by

or p

ursu

ant t

o th

is s

ectio

n ar

e st

ated

as

net o

n th

e ab

ove

basi

s.”

51. I

n th

e ea

rly y

ears

of t

he B

ank,

it w

as e

xpec

ted

that

its

Mem

bers

, inc

ludi

ng e

spec

ially

the

Uni

ted

Sta

tes,

wou

ld b

ecom

e P

artie

s to

the

Con

vent

ion

on th

e P

rivile

ges

and

Imm

uniti

es o

f the

Spe

cial

ized

Age

ncie

s w

ithre

spec

t to

the

Ban

k, w

ith th

e ef

fect

that

eac

h su

ch m

embe

r w

ould

hav

e ex

empt

ed it

s ow

n na

tiona

ls fr

omin

com

e ta

xes

on c

ompe

nsat

ion

for

Wor

ld B

ank

empl

oym

ent.

The

Uni

ted

Sta

tes

Gov

ernm

ent a

mon

g ot

hers

did

not a

cced

e to

the

Con

vent

ion,

so

that

all

of th

e m

ore

than

1,5

00 U

nite

d S

tate

s na

tiona

ls e

mpl

oyed

by

the

Ban

k, w

heth

er in

the

Uni

ted

Sta

tes

or e

lsew

here

, hav

e re

mai

ned

subj

ect t

o U

nite

d S

tate

s fe

dera

l, st

ate

and

loca

l inc

ome

taxe

s on

thei

r B

ank

sala

ries

whi

le a

ll ot

her s

taff

mem

bers

(exc

ept f

or a

few

Fre

nch

natio

nals

wor

king

in th

e B

ank'

s P

aris

offi

ce a

nd a

few

Brit

ish

natio

nals

wor

king

in it

s Lo

ndon

offi

ce)

are

entir

ely

exem

ptfro

m n

atio

nal t

axat

ion

of th

eir

Ban

k co

mpe

nsat

ion.

The

Ban

k w

as th

eref

ore

left

with

a s

yste

m u

nder

whi

ch it

has

to re

imbu

rse

all i

ts U

nite

d S

tate

s st

aff f

or th

e ta

xes

whi

ch th

ey a

re re

quire

d to

pay

on

the

Ban

k's

sala

ries

and

allo

wan

ces.

52. W

hile

the

prin

cipl

e of

reim

burs

emen

t of t

he ta

xes

that

Uni

ted

Sta

tes

staf

f mem

bers

"are

requ

ired

to p

ay”

was

eas

y to

sta

te, t

he m

etho

d of

cal

cula

ting

the

amou

nt g

ave

rise

to c

ompl

ex q

uest

ions

. One

of t

he re

ason

s fo

rth

is c

ompl

exity

lies

in th

e U

nite

d S

tate

s ta

x sy

stem

. On

this

sub

ject

the

Res

pond

ent h

as p

rovi

ded

the

Trib

unal

with

the

follo

win

g in

form

atio

n, w

hich

has

not

bee

n co

ntes

ted

by th

e A

pplic

ants

:

“The

fede

ral g

over

nmen

t of t

he U

nite

d S

tate

s im

pose

s in

com

e ta

xes

at ra

tes

whi

ch in

crea

se p

rogr

essi

vely

as th

e am

ount

of t

axab

le in

com

e ris

es. T

he in

crem

ent o

f inc

ome

to w

hich

a g

iven

rate

app

lies

is c

omm

only

refe

rred

to a

s a

‘tax

brac

ket’.

Mos

t sta

tes

of th

e U

nite

d S

tate

s (in

clud

ing

Virg

inia

and

Mar

ylan

d), t

he D

istri

ctof

Col

umbi

a, a

nd, i

n so

me

case

s, c

ount

y or

city

gov

ernm

ents

with

in S

tate

s al

so im

pose

inco

me

taxe

s up

onpe

rson

s su

bjec

t to

thei

r ta

xing

juris

dict

ion.

“The

U.S

. fed

eral

inco

me

tax

syst

em re

quire

s th

at th

e ta

xpay

er re

port

his

gros

s in

com

e to

the

U.S

. Int

erna

lR

even

ue S

ervi

ce a

t lea

st a

nnua

lly. F

rom

gro

ss in

com

e, th

e ta

xpay

er m

ay m

ake

certa

in d

educ

tions

(for

exam

ple,

60%

of c

erta

in c

apita

l gai

ns, u

nrei

mbu

rsed

trav

el e

xpen

ses

incu

rred

as

an e

mpl

oyee

, and

cer

tain

mov

ing

expe

nses

) to

reac

h ‘a

djus

ted

gros

s in

com

e’. F

rom

adj

uste

d gr

oss

inco

me,

he

may

mak

e ad

ditio

nal

dedu

ctio

ns fo

r pe

rson

al e

xem

ptio

ns (a

spe

cific

dol

lar

amou

nt fo

r ea

ch ta

xpay

er a

nd e

ach

of th

e ta

xpay

er's

depe

nden

ts),

for

the

zero

bra

cket

am

ount

and

for

item

ized

ded

uctio

ns in

sofa

r as

thei

r to

tal a

mou

nt e

xcee

dsth

e ze

ro b

rack

et a

mou

nt. T

he z

ero

brac

ket a

mou

nt is

a fl

at d

olla

r am

ount

ded

uctib

le fr

om a

djus

ted

gros

sin

com

e on

eac

h ta

xpay

er's

fede

ral i

ncom

e ta

x re

turn

.

“The

re a

re n

umer

ous

item

ized

ded

uctio

ns p

rovi

ded

for.

The

y in

clud

e, a

mon

g ot

hers

, the

dol

lar

amou

nt p

aid

durin

g th

e ta

xabl

e ye

ar fo

r in

tere

st, s

tate

and

loca

l inc

ome

taxe

s, re

al e

stat

e ta

xes,

cha

ritab

le c

ontri

butio

ns,

and

certa

in m

edic

al e

xpen

ses.

The

resu

lt of

sub

tract

ing

dedu

ctio

ns fo

r pe

rson

al e

xem

ptio

ns, t

he z

ero

brac

ket a

mou

nt, a

nd it

emiz

ed d

educ

tions

in e

xces

s of

the

zero

bra

cket

am

ount

from

adj

uste

d gr

oss

inco

me

is ‘t

axab

le in

com

e’.

“Fro

m th

e tim

e th

e B

ank

was

org

aniz

ed u

ntil

1977

, how

ever

, the

U.S

. Int

erna

l Rev

enue

Cod

e di

d no

tco

ntai

n pr

ovis

ion

for

a ze

ro b

rack

et a

mou

nt, b

ut ra

ther

it p

rovi

ded

for

a ‘s

tand

ard

dedu

ctio

n’. T

he ta

xpay

er

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

was

allo

wed

to d

educ

t fro

m h

is a

djus

ted

gros

s in

com

e th

e gr

eate

r of h

is to

tal i

tem

ized

ded

uctio

ns o

r the

stan

dard

ded

uctio

n, b

ut n

ot b

oth.

The

sta

ndar

d de

duct

ion

durin

g m

ost o

f thi

s tim

e w

as th

e le

sser

of a

flat

dolla

r am

ount

or o

f a s

peci

fied

perc

enta

ge o

f adj

uste

d gr

oss

inco

me.

”

Thus

, whe

n to

day

one

uses

the

term

“sta

ndar

d de

duct

ion”

, it i

s no

long

er, a

s it

was

from

194

6 to

197

7, a

“sta

ndar

d de

duct

ion”

stri

cto

sens

u (th

at is

the

less

er o

f a fl

at d

olla

r am

ount

or o

f a s

peci

fied

perc

enta

ge o

fad

just

ed g

ross

inco

me)

, but

, mor

e ex

actly

, a z

ero

brac

ket a

mou

nt. T

he te

rm “s

tand

ard

dedu

ctio

n”, i

n co

ntra

stw

ith “i

tem

ized

ded

uctio

ns”,

cont

inue

s to

be

used

for

reas

ons

of c

onve

nien

ce.

53. I

n th

is c

onte

xt, t

wo

basi

c pr

oble

ms

had

to b

e re

solv

ed in

the

form

ulat

ion

of a

ny s

yste

m o

f tax

reim

burs

emen

t.

54. T

he fi

rst p

robl

em w

as th

at o

f det

erm

inin

g w

heth

er o

utsi

de in

com

e sh

ould

be

take

n in

to a

ccou

nt a

nd, i

f so,

by w

hat m

etho

d. A

s th

e K

afka

Rep

ort n

oted

, sin

ce th

e U

nite

d S

tate

s ta

x sy

stem

is p

rogr

essi

ve, i

t mak

es a

diffe

renc

e to

the

amou

nt to

be

reim

burs

ed if

out

side

inco

me

is re

gard

ed a

s to

p or

bot

tom

inco

me,

or i

f it i

sgi

ven

equa

l wei

ght w

ith o

rgan

izat

ion

inco

me.

As

has

been

see

n, th

e B

y-La

ws

adop

ted

the

prin

cipl

e th

at “i

tsh

all b

e pr

esum

ed fo

r th

e pu

rpos

es o

f the

com

puta

tion

that

the

inco

me

rece

ived

from

the

Ban

k is

his

(the

empl

oyee

's)

tota

l inc

ome”

. Spe

cial

pro

blem

s w

ere

to a

rise,

how

ever

, reg

ardi

ng th

e ef

fect

of a

spo

use'

s in

com

e.

55. T

he s

econ

d pr

oble

m re

late

d to

ded

uctio

ns. I

t has

bee

n ex

plai

ned

in th

e fo

llow

ing

term

s in

the

mem

oran

dum

of th

e G

ener

al C

ouns

el a

nd o

f the

Tre

asur

er, d

ated

Dec

embe

r 5, 1

946:

“The

taxp

ayer

may

, at h

is o

ptio

n, in

mak

ing

his

tax

retu

rn ta

ke a

s de

duct

ions

the

actu

al a

mou

nts

of h

isex

pend

iture

s fo

r th

e al

low

able

item

s [in

tere

st, r

eal e

stat

e ta

xes,

cha

ritab

le g

ifts,

etc

.], in

whi

ch c

ase

he m

ust

be p

repa

red

to ju

stify

the

dedu

ctio

ns ta

ken,

or h

e m

ay ta

ke w

hat a

re c

alle

d st

anda

rd d

educ

tions

, tha

t is,

alu

mp

sum

whi

ch c

over

s al

l suc

h de

duct

ions

and

whi

ch h

e do

es n

ot h

ave

to ju

stify

.... O

bvio

usly

as

amon

gin

divi

dual

em

ploy

ees

of th

e B

ank

ther

e w

ill b

e a

grea

t div

ersi

ty a

s to

whe

ther

they

take

the

stan

dard

dedu

ctio

ns o

r act

ual d

educ

tions

, and

, in

the

latte

r ca

se, a

s to

the

kind

s an

d am

ount

s of

the

dedu

ctio

nsw

hich

are

take

n. If

the

Ban

k sh

ould

und

erta

ke to

com

pute

the

amou

nt o

f ded

uctio

ns ta

ken

by th

e pa

rticu

lar

empl

oyee

in c

ompu

ting

his

inco

me

tax,

that

wou

ld m

ean

that

the

Ban

k w

ould

hav

e to

mak

e an

inqu

iry in

toea

ch e

mpl

oyee

's ta

x re

turn

. Fur

ther

mor

e, in

the

case

of e

mpl

oyee

s ha

ving

inco

me

othe

r tha

n th

eir

sala

ries

from

the

Ban

k, it

wou

ld m

ean

that

the

Ban

k w

ould

hav

e to

det

erm

ine

how

the

dedu

ctio

ns s

houl

d be

allo

cate

d be

twee

n th

e em

ploy

ee's

sal

ary

and

his

othe

r inc

ome,

bec

ause

in m

any

case

s it

wou

ld b

e hi

ghly

ineq

uita

ble

to a

lloca

te a

ll su

ch d

educ

tions

to th

e em

ploy

ee's

sal

ary.

The

am

ount

of a

ccou

ntin

g an

din

vest

igat

ing

wor

k in

volv

ed w

ould

be

cons

ider

able

, not

to m

entio

n th

e an

noya

nce

to e

mpl

oyee

s of

suc

h a

scru

tiny

of th

eir

pers

onal

affa

irs.”

56. T

he T

ribun

al d

oes

not c

onsi

der i

t nec

essa

ry to

exa

min

e th

e pr

oble

m o

f the

trea

tmen

t of o

utsi

de in

com

e as

only

the

prob

lem

rela

ting

to d

educ

tions

aris

es in

the

pres

ent c

ase.

57. O

ther

inte

rnat

iona

l org

aniz

atio

ns w

ere

also

affe

cted

by

the

prob

lem

. Tha

t is

why

a “S

teer

ing

Com

mitt

ee o

nTa

x P

robl

ems

of In

tern

atio

nal O

rgan

izat

ions

Res

pect

ing

Met

hods

of T

ax R

eim

burs

emen

t by

Inte

rnat

iona

lO

rgan

izat

ions

” w

as e

stab

lishe

d. In

a R

epor

t iss

ued

in O

ctob

er 1

946,

the

Com

mitt

ee s

poke

of “

the

prob

lem

san

d is

sues

resp

ectin

g va

rious

met

hods

of t

ax re

imbu

rsem

ent o

f em

ploy

ees

by in

tern

atio

nal o

rgan

izat

ions

”, an

din

dica

ted

that

“the

cur

rent

reim

burs

emen

t sys

tem

s ad

opte

d by

inte

rnat

iona

l org

aniz

atio

ns n

eed

not b

e un

iform

as to

the

treat

men

t of e

xem

ptio

ns a

nd d

educ

tions

”. Th

e R

epor

t of t

he T

echn

ical

Sub

-Com

mitt

ee a

nnex

ed to

the

Rep

ort o

f the

Ste

erin

g C

omm

ittee

em

phas

ized

that

“Non

e of

the

tax

reim

burs

emen

t met

hods

ana

lyze

d w

ould

achi

eve

com

plet

e eq

ualit

y be

twee

n na

tiona

ls o

f diff

eren

t cou

ntrie

s ...

. Onl

y su

bsta

ntia

l equ

ality

of s

alar

ies

afte

rta

xes

is p

ract

ical

”. Th

e S

ub-C

omm

ittee

add

ed th

at th

e m

etho

d to

be

adop

ted

shou

ld s

atis

fy e

qual

ly th

eco

nditi

ons

of “s

impl

icity

in th

e ad

min

istra

tion

of ta

x re

imbu

rsem

ent a

nd u

nder

stan

dabi

lity

by th

e em

ploy

ees”

.Th

e S

ub-C

omm

ittee

pro

ceed

ed to

a d

etai

led

com

paris

on o

f the

“adv

anta

ges

and

disa

dvan

tage

s of

thre

e pl

ans

for

tax

reim

burs

emen

t by

inte

rnat

iona

l org

aniz

atio

ns” a

nd p

ropo

sed

one

whi

ch “o

n ba

lanc

e, m

eets

the

requ

irem

ents

set

forth

abo

ve”.

It ad

ded

that

“the

Com

mitt

ee is

stro

ngly

of t

he o

pini

on...

. tha

t a s

yste

m o

f

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

stan

dard

ded

uctio

ns w

ill p

rove

nec

essa

ry u

nder

any

met

hod

of ta

x re

imbu

rsem

ent t

o av

oid

diffi

cult

adm

inis

trativ

e an

d po

licy

prob

lem

s”.

58. A

s a

resu

lt of

the

Ste

erin

g C

omm

ittee

's R

epor

t, th

e G

ener

al C

ouns

el a

nd th

e Tr

easu

rer o

f the

Ban

kre

com

men

ded

to th

e P

resi

dent

on

Dec

embe

r 5, 1

946

that

, for

the

reas

ons

of s

impl

icity

men

tione

d by

the

Com

mitt

ee, t

he B

ank

adop

t a ta

x re

imbu

rsem

ent s

yste

m b

ased

on

the

stan

dard

ded

uctio

n. T

hey

also

reco

mm

ende

d th

at th

e re

imbu

rsem

ent b

e in

an

amou

nt th

at, “

whe

n ad

ded

to ..

.. ne

t sal

ary,

will

yie

ld a

net

inco

me

for

the

year

, afte

r de

duct

ing

U.S

. inc

ome

taxe

s, a

t lea

st e

qual

to s

uch

net s

alar

y”.

59. O

n D

ecem

ber 1

0, 1

946,

the

Exe

cutiv

e D

irect

ors

adop

ted

the

reco

mm

enda

tions

of B

ank

Man

agem

ent.

They

deci

ded

inte

r al

ia th

at:

“In c

ompu

ting

the

amou

nt o

f suc

h ta

x re

imbu

rsem

ent,

ther

e sh

ould

be

dedu

cted

from

the

amou

nt o

f the

sala

ry o

f the

par

ticul

ar e

mpl

oyee

....

(b)

the

amou

nt o

f the

sta

ndar

d de

duct

ions

from

suc

h sa

lary

whi

ch a

real

low

able

und

er th

e U

.S. F

eder

al in

com

e ta

x la

w a

nd re

gula

tions

.”

60. T

he s

yste

m th

us a

dopt

ed b

y th

e B

ank

pres

ente

d on

e pe

culia

rity

to w

hich

it is

nec

essa

ry to

dra

w a

ttent

ion.

As

has

been

sai

d, th

e U

nite

d S

tate

s ta

x sy

stem

per

mits

a ta

xpay

er to

ded

uct f

rom

his

“adj

uste

d gr

oss

inco

me”

,w

ith a

vie

w to

the

calc

ulat

ion

of h

is “t

axab

le in

com

e”, a

t his

opt

ion,

eith

er a

“sta

ndar

d de

duct

ion”

or “

item

ized

dedu

ctio

ns” (

inte

rest

, cha

ritab

le c

ontri

butio

ns, s

tate

and

loca

l tax

es, e

tc.)

Obv

ious

ly e

ach

taxp

ayer

will

mak

eth

e ch

oice

whi

ch a

ssur

es h

im th

e la

rges

t ded

uctio

n; th

at is

, a c

hoic

e w

hich

pro

duce

s th

e sm

alle

st ta

xabl

ein

com

e an

d ta

xes.

Sin

ce th

e B

ank

deci

ded

in 1

946

to c

alcu

late

tax

reim

burs

emen

t on

the

basi

s of

the

stan

dard

dedu

ctio

n, e

ven

in c

ases

whe

re th

e em

ploy

ees

in fa

ct c

laim

ed it

emiz

ed d

educ

tions

in a

gre

ater

am

ount

, it

follo

wed

inev

itabl

y th

at in

the

latte

r ca

ses

the

empl

oyee

s w

ere

reim

burs

ed s

ums

in e

xces

s of

the

taxe

s ac

tual

lypa

id b

y th

em –

in s

hort

they

wer

e “o

ver-

reim

burs

ed”.

On

the

othe

r han

d, th

ere

was

no

poss

ibili

ty o

f “un

der-

reim

burs

emen

t”. W

ith th

e st

anda

rd d

educ

tion

syst

em a

sta

ff m

embe

r w

ould

alw

ays

rece

ive

a re

imbu

rsem

ent a

tle

ast e

qual

to h

is a

ctua

l fed

eral

tax

liabi

lity

on h

is B

ank

sala

ry b

ecau

se e

very

taxp

ayer

was

ent

itled

to th

est

anda

rd d

educ

tion

unde

r Uni

ted

Sta

tes

tax

law

; by

virtu

e of

the

stan

dard

ded

uctio

n, h

is a

fter-

tax

inco

me

coul

dno

t fal

l bel

ow h

is s

tate

d ne

t-of

-tax

sala

ry.

61. T

he fa

ct th

at th

ere

coul

d be

cas

es o

f rei

mbu

rsem

ent i

n ex

cess

of t

axes

was

take

n in

to c

onsi

dera

tion

at th

etim

e of

the

reco

mm

enda

tion

and

deci

sion

in 1

946.

The

Ste

erin

g C

omm

ittee

exp

ress

ly m

entio

ned

this

poss

ibili

ty: “

All

taxp

ayer

s...

with

ded

uctio

ns la

rger

than

sta

ndar

d w

ould

rece

ive

net s

alar

ies

high

er th

anst

ipul

ated

”, bu

t the

Com

mitt

ee im

med

iate

ly a

dded

: “H

owev

er, t

hese

add

ition

al a

mou

nts

are

gene

rally

not

rela

tivel

y la

rge

and

in o

ur o

pini

on w

ould

con

stitu

te to

lera

ble

diffe

renc

es”.

Lik

ewis

e th

e G

ener

al C

ouns

el a

nd th

eTr

easu

rer d

rew

atte

ntio

n to

this

pos

sibl

e co

nseq

uenc

e of

the

stan

dard

ded

uctio

n sy

stem

and

to th

e co

st th

at it

wou

ld in

volv

e fo

r th

e B

ank;

but

, the

y ad

ded:

“It i

s no

t bel

ieve

d th

at th

e sa

ving

to th

e B

ank

whi

ch w

ould

resu

ltfro

m a

mor

e ex

act m

etho

d of

com

puta

tion

wou

ld b

e su

ffici

ent t

o of

fset

the

disa

dvan

tage

to th

e B

ank

in h

avin

gto

mak

e a

spec

ial i

nves

tigat

ion

and

com

puta

tion

in e

ach

case

”.

62. O

ver

the

year

s th

e sy

stem

est

ablis

hed

in 1

946

unde

rwen

t a n

umbe

r of c

hang

es. M

ost o

f the

cha

nges

are

not r

elev

ant t

o th

e pr

esen

t pro

blem

, eith

er b

ecau

se th

ey d

id n

o m

ore

than

mak

e ne

cess

ary

adju

stm

ents

inco

nseq

uenc

e of

cha

nges

in U

nite

d S

tate

s ta

x le

gisl

atio

n, o

r bec

ause

they

wer

e co

ncer

ned

with

asp

ects

of

reim

burs

emen

t oth

er th

an th

at o

f ded

uctio

ns. O

nly

one

amen

dmen

t req

uire

s sp

ecia

l con

side

ratio

n. L

arge

incr

ease

s in

the

amou

nts

of s

tate

and

loca

l tax

es le

vied

on

empl

oyee

s re

sulte

d in

pay

men

t by

som

e em

ploy

ees

of s

tate

and

loca

l tax

es th

at e

xcee

ded,

som

etim

es b

y a

cons

ider

able

sum

, the

am

ount

of t

he s

tand

ard

dedu

ctio

n. T

hese

sta

te a

nd lo

cal t

axes

wer

e re

imbu

rsed

by

the

Ban

k. S

ince

an

empl

oyee

cou

ld c

laim

the

amou

nt o

f his

sta

te a

nd lo

cal t

axes

as

a de

duct

ion

on h

is fe

dera

l tax

retu

rn, i

t bec

ame

clea

r th

at s

ome

empl

oyee

s ha

d de

duct

ions

exc

eedi

ng th

e st

anda

rd d

educ

tion

used

as

the

basi

s fo

r th

e B

ank'

s ca

lcul

atio

ns, a

ndth

eref

ore

wer

e re

imbu

rsed

in e

xces

s of

thei

r ac

tual

fede

ral i

ncom

e ta

xes.

In 1

963,

in re

cogn

ition

of t

hech

ange

d ci

rcum

stan

ces,

the

Ban

k m

odifi

ed it

s po

licy

so th

at re

imbu

rsem

ents

wou

ld h

ence

forth

be

calc

ulat

edus

ing

the

stan

dard

ded

uctio

n or

the

amou

nt o

f sta

te a

nd lo

cal t

axes

, whi

chev

er w

as g

reat

er. A

lthou

gh th

ism

odifi

catio

n pr

oduc

ed a

n ad

vers

e im

pact

on

empl

oyee

s w

ho w

ere

alre

ady

wor

king

for

the

Ban

k, s

ince

they

wou

ld re

ceiv

e a

low

er re

imbu

rsem

ent t

han

unde

r the

form

er p

olic

y an

d th

us w

ould

hav

e a

low

er g

ross

sal

ary,

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

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9ED

006B

B87

7[5/

20/2

014

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4:49

AM

]

the

chan

ge w

as a

pplie

d ac

ross

the

boar

d an

d w

ithou

t pro

test

from

the

staf

f.

63. T

he ta

x re

imbu

rsem

ent s

yste

m w

as c

odifi

ed in

the

Per

sonn

el M

anua

l Sta

tem

ent N

o. 3

.05

issu

ed D

ecem

ber

1973

, par

agra

ph 1

0 of

whi

ch re

ads:

“The

Ban

k G

roup

will

reim

burs

e ta

xes

on n

et-o

f-tax

sal

arie

s an

d on

allo

wan

ces

and

othe

r non

-sal

ary

paym

ents

whi

ch a

re re

quire

d to

be

incl

uded

in ta

xabl

e in

com

e, a

nd w

ith re

spec

t to

whi

ch n

o ex

pens

es a

rede

duct

ible

. Tax

es w

ill n

ot b

e re

imbu

rsed

on

allo

wan

ces

or n

on-s

alar

y pa

ymen

ts w

hich

are

not

requ

ired

tobe

incl

uded

in ta

xabl

e in

com

e or

with

resp

ect t

o w

hich

exp

ense

s ar

e de

duct

ible

. Tax

reim

burs

emen

ts w

ill b

eco

mpu

ted

on th

e ba

sis

of n

orm

al fi

ling

of ta

x re

turn

s at

the

appl

icab

le ta

x ra

tes

and

the

exem

ptio

ns a

nd th

est

anda

rd d

educ

tion

whi

ch a

sta

ff m

embe

r is

ent

itled

to c

laim

on

his

tax

retu

rns,

exc

ept t

hat i

n an

y ca

se in

whi

ch th

e st

ate

or lo

cal t

ax re

imbu

rsem

ents

mad

e to

a s

taff

mem

ber

durin

g a

year

exc

eede

d hi

s st

anda

rdde

duct

ion

for

fede

ral t

ax p

urpo

ses

his

stat

e or

loca

l tax

reim

burs

emen

ts w

ill b

e us

ed in

lieu

of t

he s

tand

ard

dedu

ctio

n in

com

putin

g hi

s fe

dera

l tax

reim

burs

emen

t. In

com

putin

g re

imbu

rsem

ent f

or a

sta

te o

r loc

al ta

xw

hen

no s

tand

ard

dedu

ctio

n is

pro

vide

d fo

r by

law

the

Ban

k G

roup

will

use

a d

educ

tion

of 1

0 pe

r ce

nt o

fco

mpe

nsat

ion

up to

$5,

000

or $

500,

whi

chev

er is

less

.” (e

mph

asis

add

ed)

64. G

radu

ally

, dou

bts

aros

e as

to th

e ad

equa

cy o

f thi

s sy

stem

in n

ew e

cono

mic

con

ditio

ns. I

nfla

tion

had

led

toin

crea

sed

sala

ry p

aym

ents

, whi

ch p

lace

d th

eir

reci

pien

ts in

con

stan

tly h

ighe

r bra

cket

s. T

he s

tand

ard

dedu

ctio

n,on

the

othe

r han

d, h

ad n

ot b

een

sign

ifica

ntly

incr

ease

d. A

lso

it ap

pear

ed th

at a

n in

crea

sing

num

ber o

f sta

ffm

embe

rs h

ad c

ome

to u

se it

emiz

ed d

educ

tions

, thu

s ob

tain

ing

mor

e by

way

of r

eim

burs

emen

t tha

n th

ey h

adpa

id b

y w

ay o

f tax

. The

pos

sibi

lity

of re

imbu

rsem

ent i

n ex

cess

of t

axes

pai

d, w

hich

in 1

946

had

been

thou

ght o

fas

rem

aini

ng in

frequ

ent a

nd u

nim

porta

nt, i

n fa

ct h

ad b

ecom

e in

crea

sing

ly fr

eque

nt a

nd m

ore

impo

rtant

.C

orre

spon

ding

ly, t

he c

ost o

f the

sys

tem

bec

ame

cons

tant

ly h

eavi

er fo

r th

e B

ank.

65. I

n or

der t

o as

sess

the

exac

t siz

e of

thes

e ch

ange

s, th

e B

ank

and

the

Fund

in 1

977

com

mis

sion

ed a

sur

vey

of ta

x re

imbu

rsem

ent b

y a

spec

ializ

ed fi

rm. B

ased

on

the

inco

me

tax

retu

rns

for

1976

of 1

,147

Ban

k an

d Fu

ndU

nite

d S

tate

s st

aff m

embe

rs, t

his

surv

ey le

d to

the

follo

win

g co

nclu

sion

s:

- Abo

ut 7

4% o

f sta

ff m

embe

rs e

ntitl

ed to

reim

burs

emen

t cla

imed

item

ized

ded

uctio

ns; o

nly

26%

use

d th

est

anda

rd d

educ

tion

on w

hich

the

tax

reim

burs

emen

t sys

tem

was

bas

ed. O

f tho

se c

laim

ing

item

ized

dedu

ctio

ns, m

ost w

ere

in th

e m

iddl

e or

hig

her i

ncom

e le

vels

; onl

y 36

% h

ad a

net

org

aniz

atio

n in

com

e of

less

than

$20

,000

. Virt

ually

all

(98%

) of

thos

e cl

aim

ing

the

stan

dard

ded

uctio

n ha

d ne

t org

aniz

atio

nin

com

es o

f les

s th

an $

25,0

00.

- Nea

rly 5

0% o

f tho

se e

ntitl

ed to

reim

burs

emen

t rec

eive

d re

imbu

rsem

ent i

n ex

cess

of t

he a

ctua

l tax

pai

d on

thei

r to

tal f

amily

inco

me,

that

is n

ot m

erel

y in

resp

ect o

f org

aniz

atio

n co

mpe

nsat

ion,

but

in re

spec

t of a

llso

urce

s of

inco

me.

- The

ove

rall

aver

age

exce

ss re

imbu

rsem

ent w

as o

ver

$2,3

00 p

er s

taff

mem

ber.

Thi

s ex

cess

rang

ed fr

om$1

50 a

t the

low

inco

me

leve

ls to

a m

axim

um o

f mor

e th

an $

4,00

0 at

the

high

est i

ncom

e le

vels

.

- Mor

e th

an 6

8% o

f all

staf

f sur

veye

d w

ho h

ad in

com

e ab

ove

the

$20,

000

leve

l rec

eive

d a

reim

burs

emen

t in

exce

ss o

f tax

pai

d on

tota

l fam

ily in

com

e.

- Slig

htly

mor

e th

an 5

0% p

aid

som

e ta

x on

tota

l fam

ily in

com

e in

exc

ess

of th

eir

tax

reim

burs

emen

t.H

owev

er, t

he a

utho

rs o

f the

sur

vey

did

not f

eel a

ble

to d

raw

any

con

clus

ion

from

this

fact

, sin

ce w

hene

ver a

staf

f mem

ber

had

non-

orga

niza

tion

inco

me

it w

ould

be

reas

onab

le th

at s

ome

tax

in e

xces

s of

the

reim

burs

emen

t wou

ld b

e pa

yabl

e.

66. I

n 19

77, t

he p

robl

em o

f tax

reim

burs

emen

t was

sub

mitt

ed, t

oget

her w

ith o

ther

asp

ects

of c

ompe

nsat

ion

polic

y, to

the

Join

t Com

mitt

ee o

n S

taff

Com

pens

atio

n Is

sues

(the

Kaf

ka C

omm

ittee

). C

hapt

er 6

of t

he K

afka

Rep

ort i

dent

ified

the

follo

win

g fa

ctor

s as

pro

foun

dly

alte

ring

the

reas

ons

whi

ch h

ad le

d to

the

adop

tion

of th

e19

46 s

yste

m:

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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]

“Ove

r tim

e, in

flatio

n an

d ch

ange

s w

ithin

the

Uni

ted

Sta

tes

tax

stru

ctur

e ha

ve w

iden

ed th

e di

ffere

nce

betw

een

stan

dard

ded

uctio

ns a

nd th

ose

whi

ch m

ay b

e cl

aim

ed b

y ite

miz

ing

dedu

ctio

ns. T

he ta

x br

acke

tsan

d ab

solu

te a

mou

nts

of s

tand

ard

dedu

ctio

ns u

nder

the

U.S

. Tax

Cod

e ha

ve n

ot b

een

fully

adj

uste

d to

refle

ct p

rice

leve

l cha

nges

, but

item

ized

ded

uctio

ns, s

uch

as m

ortg

age

inte

rest

pay

men

ts a

nd re

al e

stat

eta

xes,

hav

e ge

nera

lly k

ept p

ace

with

thes

e ch

ange

s. T

his

has

led

to a

con

side

rabl

e in

crea

se in

the

prac

tice

of it

emiz

ing.

”

The

Rep

ort a

dded

that

the

cost

to th

e B

ank

of ta

x re

imbu

rsem

ent h

ad m

ount

ed fr

om $

300,

000

in 1

946

to$1

8,90

2,00

0 in

197

8, re

pres

entin

g an

incr

ease

from

2.4

% o

f the

tota

l adm

inis

trativ

e bu

dget

to 7

.2%

and

sta

ted:

“In th

e lig

ht o

f the

se re

sults

, we

conc

lude

d th

at th

e pr

esen

t sys

tem

is in

defe

nsib

le a

nd s

houl

d be

cha

nged

.”

67. I

n or

der t

o re

plac

e th

is s

yste

m a

nd to

find

a s

olut

ion

whi

ch w

as a

ppro

pria

te “i

n te

rms

of in

tern

al e

quity

and

econ

omy

for

the

inst

itutio

ns”,

the

Rep

ort s

tate

d th

at th

ere

wer

e a

varie

ty o

f sys

tem

s av

aila

ble,

non

e of

whi

chw

as b

y its

elf e

ntire

ly s

atis

fact

ory:

“The

re is

cle

arly

sco

pe fo

r di

sagr

eem

ent,

not m

erel

y ab

out t

he o

bjec

tives

of a

tax

reim

burs

emen

t sys

tem

,bu

t abo

ut th

eir

rela

tive

impo

rtanc

e. E

ven

a cu

rsor

y ex

amin

atio

n of

pos

sibl

e al

tern

ativ

e sy

stem

s re

veal

s th

atno

sin

gle

one

fully

mee

ts a

ll th

e ob

ject

ives

.”

The

prin

cipa

l obj

ectiv

e of

the

syst

em s

houl

d, a

ccor

ding

to th

e R

epor

t, be

the

achi

evem

ent o

f equ

ity. H

owev

er,

the

Rep

ort a

dded

, thi

s w

as a

diff

icul

t not

ion

to d

efin

e, fo

r va

rious

kin

ds o

f equ

ity m

ight

be

iden

tifie

d –

asbe

twee

n U

nite

d S

tate

s na

tiona

ls a

nd e

xpat

riate

sta

ff (“

inte

rnal

equ

ity”)

; as

betw

een

Uni

ted

Sta

tes

natio

nals

empl

oyed

by

the

orga

niza

tions

and

thos

e em

ploy

ed o

utsi

de (“

exte

rnal

equ

ity”)

; and

am

ong

Uni

ted

Sta

tes

natio

nals

at d

iffer

ent i

ncom

e le

vels

and

with

or w

ithou

t out

side

inco

me.

Oth

er o

bjec

tives

had

, acc

ordi

ng to

the

Rep

ort,

also

to b

e bo

rne

in m

ind:

eas

e of

adm

inis

tratio

n –

“som

e sy

stem

s ar

e fa

r m

ore

com

plic

ated

than

othe

rs”;

cost

– “t

he c

ost t

o th

e in

stitu

tions

is c

erta

inly

a fa

ctor

to b

e ta

ken

into

acc

ount

but

can

not b

e th

e so

lecr

iterio

n fo

r ch

oosi

ng o

ne s

yste

m a

s ag

ains

t ano

ther

”; c

ompr

ehen

sibi

lity;

and

, as

a su

bsid

iary

con

side

ratio

n,co

nfid

entia

lity.

68. T

he R

epor

t con

side

red

seve

ral p

ossi

ble

alte

rnat

ives

, inc

ludi

ng th

e sy

stem

use

d in

the

Uni

ted

Nat

ions

, and

set o

ut th

eir

resp

ectiv

e ad

vant

ages

and

dis

adva

ntag

es. I

t exp

ress

ed a

pre

fere

nce

for

an a

vera

ge d

educ

tions

syst

em u

nder

whi

ch th

e ta

x re

imbu

rsed

wou

ld n

ot e

xcee

d th

e av

erag

e ta

x pa

id b

y pe

rson

s th

roug

hout

the

Uni

ted

Sta

tes

at th

e sa

me

inco

me

leve

l as

the

staf

f mem

ber.

Thi

s sy

stem

impl

ied

that

it w

ould

stil

l be

open

toth

e in

divi

dual

sta

ff m

embe

r to

cla

im a

sta

ndar

d de

duct

ion

or to

item

ize

his

dedu

ctio

ns b

ut in

no

case

wou

ld h

isre

imbu

rsem

ent e

xcee

d th

e av

erag

e pa

id b

y hi

s co

unte

rpar

t in

outs

ide

empl

oym

ent.

The

Rep

ort s

aw v

ario

usad

vant

ages

for

this

sys

tem

, par

ticul

arly

in v

iew

of “

the

perc

eptio

n of

Am

eric

ans

outs

ide

the

Ban

k an

d Fu

nd o

fho

w th

eir

com

patri

ots

insi

de th

e tw

o in

stitu

tions

are

trea

ted”

. How

ever

, whi

le e

xpre

ssin

g th

eir

pref

eren

ce fo

rth

is s

yste

m o

ver

othe

rs, t

he a

utho

rs o

f the

Rep

ort t

ook

care

to e

mph

asiz

e th

at th

ere

was

no

sing

lech

arac

teris

tic o

f any

one

sch

eme

whi

ch c

oncl

usiv

ely

indi

cate

d th

at th

at s

chem

e sh

ould

be

favo

ured

bef

ore

all

othe

rs.

69. O

n th

e ba

sis

of th

is R

epor

t, th

e E

xecu

tive

Dire

ctor

s de

cide

d on

May

24,

197

9 to

intro

duce

the

aver

age

dedu

ctio

ns s

yste

m, w

ith e

ffect

from

Jan

uary

1, 1

980,

sub

ject

to tw

o co

nditi

ons

whi

ch h

ad n

ot b

een

prop

osed

by

the

Kaf

ka C

omm

ittee

, nam

ely,

a fi

ve-y

ear

trans

ition

per

iod

and

othe

r app

ropr

iate

saf

egua

rds.

70. T

he P

erso

nnel

Man

ual C

ircul

ar 1

/80,

dat

ed J

anua

ry 2

1, 1

980,

whi

ch

info

rmed

sta

ff of

the

new

sys

tem

sta

ted:

“... t

he a

rran

gem

ents

for

the

reim

burs

emen

t of t

axes

on

sala

ries

and

allo

wan

ces

paid

by

the

Wor

ld B

ank,

as

desc

ribed

in P

erso

nnel

Man

ual S

tate

men

t 3.0

5, s

houl

d be

repl

aced

, effe

ctiv

e Ja

nuar

y 1,

198

0, b

y a

syst

emof

tax

allo

wan

ces

base

d on

ave

rage

ded

uctio

ns ..

. Thi

s ci

rcul

ar, t

here

fore

, am

ends

and

sup

erse

des

in fa

ctth

e pr

ovis

ions

of P

MS

3.0

5 ...

PM

S 3

.05

will

be

revi

sed

in d

ue c

ours

e. In

the

mea

ntim

e, it

s pr

ovis

ions

will

cont

inue

to a

pply

exc

ept t

o th

e ex

tent

nec

essa

ry to

refle

ct th

e ch

ange

s an

noun

ced

in th

is M

anua

l Circ

ular

.”

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

The

Circ

ular

reca

lled

that

“the

bas

ic c

once

pt o

f the

new

sys

tem

is to

pro

vide

for

U.S

. sta

ff m

embe

rs a

tax

allo

wan

ce e

quiv

alen

t to

the

aver

age

taxe

s pa

id b

y th

e ge

nera

lity

of U

.S. t

axpa

yers

at t

he s

ame

inco

me

leve

l”.C

onse

quen

tly, a

ccor

ding

to th

e C

ircul

ar, t

he E

xecu

tive

Dire

ctor

s re

com

men

ded

to th

e B

oard

of G

over

nors

that

Sec

tion

14(b

) of t

he B

ank'

s B

y-La

ws

be a

men

ded

effe

ctiv

e Ja

nuar

y 1,

198

0 to

read

:

“Pen

ding

the

nece

ssar

y ac

tion

bein

g ta

ken

by m

embe

rs to

exe

mpt

from

nat

iona

l tax

atio

n sa

larie

s an

dal

low

ance

s pa

id o

ut o

f the

bud

get o

f the

Ban

k, th

e G

over

nors

and

the

Exe

cutiv

e D

irect

ors,

thei

r A

ltern

ates

,th

e P

resi

dent

, and

sta

ff m

embe

rs a

nd o

ther

em

ploy

ees

of th

e B

ank,

exc

ept t

hose

who

se e

mpl

oym

ent

cont

ract

s st

ate

othe

rwis

e, s

hall

rece

ive

from

the

Ban

k a

tax

allo

wan

ce th

at th

e E

xecu

tive

Dire

ctor

sde

term

ine

to b

e re

ason

ably

rela

ted

to th

e ta

xes

paid

by

them

on

such

sal

arie

s an

d al

low

ance

s.

“In c

ompu

ting

the

amou

nt o

f tax

adj

ustm

ent t

o be

mad

e w

ith re

spec

t to

any

indi

vidu

al, i

t sha

ll be

pre

sum

edfo

r th

e pu

rpos

es o

f the

com

puta

tion

that

the

inco

me

rece

ived

from

the

Ban

k is

his

tota

l inc

ome.

All

sala

ries

and

allo

wan

ces

pres

crib

ed b

y or

pur

suan

t to

this

sec

tion

are

stat

ed a

s ne

t on

the

abov

e ba

sis.

” (e

mph

asis

adde

d)

This

reco

mm

enda

tion

was

sub

sequ

ently

ado

pted

by

the

Boa

rd o

f Gov

erno

rs a

nd n

ow fo

rms

Sec

tion

13(b

) of

the

By-

Law

s.

71. T

he E

xecu

tive

Dire

ctor

s de

cide

d, s

o th

e C

ircul

ar s

tate

d, th

at th

e ne

w s

yste

m s

houl

d ap

ply

imm

edia

tely

and

fully

onl

y to

thos

e st

aff m

embe

rs “w

ho a

ccep

t offe

rs o

f app

oint

men

t on

or a

fter

Janu

ary

1, 1

980”

. As

rega

rds

the

“exi

stin

g st

aff”,

that

is, t

he s

taff

who

wer

e on

dut

y pr

ior

to J

anua

ry 1

, 198

0 or

who

had

form

ally

acc

epte

dof

fers

of a

ppoi

ntm

ent b

efor

e th

at d

ate,

two

spec

ial p

rovi

sion

s w

ere

laid

dow

n. F

irst,

“in o

rder

to a

llevi

ate

the

impa

ct o

f the

cha

nge,

for

exis

ting

staf

f the

new

sys

tem

of t

ax a

llow

ance

s w

ill b

e in

trodu

ced

prog

ress

ivel

y ov

era

five-

year

per

iod”

. Sec

ond,

the

Exe

cutiv

e D

irect

ors

wis

hed

to ta

ke in

to a

ccou

nt th

e fa

ct th

at th

e ta

xal

low

ance

s un

der t

he n

ew s

yste

m w

ould

onl

y be

“rea

sona

bly

rela

ted”

to th

e ta

xes

effe

ctiv

ely

paid

by

each

sta

ffm

embe

r in

suc

h a

way

that

, in

the

term

s of

the

Circ

ular

, “th

e ta

x al

low

ance

s w

ill ra

rely

exa

ctly

equ

al th

e ta

xes

paya

ble

– it

may

be

mor

e, it

may

be

less

”. Th

at is

why

it w

as d

ecid

ed, s

aid

the

Circ

ular

,

“... t

hat t

he B

ank

will

con

tinue

to a

pply

to e

xist

ing

staf

f, fo

r th

e du

ratio

n of

thei

r se

rvic

e w

ith th

e B

ank,

asa

fegu

ard

cons

iste

nt w

ith th

e pr

ovis

ions

of s

ectio

n 14

(b) o

f the

form

er B

y-La

ws

of th

e B

ank

so a

s to

ens

ure

that

, as

a m

inim

um, s

uch

staf

f are

reim

burs

ed fo

r th

e ta

xes

they

are

requ

ired

to p

ay o

n th

eir

inco

me

from

the

Ban

k” (e

mph

asis

in th

e or

igin

al te

xt).

The

Circ

ular

sta

ted

that

in c

onse

quen

ce “a

ny e

xist

ing

staf

f mem

ber

who

… c

onsi

ders

that

the

tota

l am

ount

of

the

tax

allo

wan

ce re

ceiv

ed ..

. is

less

than

the

taxe

s du

e on

Ban

k in

com

e m

ay c

hoos

e to

app

ly fo

r a

supp

lem

enta

ry p

aym

ent”.

Thi

s pr

ovis

ion

is c

omm

only

refe

rred

to a

s th

e “s

afet

y-ne

t”.

72. T

he T

ribun

al m

ust n

ow a

sses

s w

heth

er in

ado

ptin

g th

e ne

w ta

x re

imbu

rsem

ent s

yste

m th

e B

ank

has

mad

ean

unl

awfu

l uni

late

ral c

hang

e in

the

cond

ition

s of

em

ploy

men

t of t

he fo

ur A

pplic

ants

affe

cted

.

73. T

he R

espo

nden

t con

tend

ed th

at th

e st

anda

rd d

educ

tion

syst

em w

as n

ot in

clud

ed in

the

cond

ition

s of

empl

oym

ent o

f the

App

lican

ts p

rior

to 1

979

but i

nste

ad a

mou

nted

to n

o m

ore

than

a m

ere

proc

edur

e no

tfo

rmin

g pa

rt o

f the

lega

l rel

atio

nshi

p be

twee

n th

e B

ank

and

the

App

lican

ts. T

he T

ribun

al c

anno

t acc

ept t

his

view

. The

Ban

k ru

led

in 1

946,

and

sub

sequ

ently

con

firm

ed th

is ru

ling

on v

ario

us o

ccas

ions

, par

ticul

arly

by

issu

ing

P.M

.S. 3

.05

in D

ecem

ber 1

973,

that

the

amou

nt o

f rei

mbu

rsem

ent s

houl

d be

cal

cula

ted

on th

e ba

sis

ofth

e pr

esum

ptio

n th

at a

ll U

nite

d S

tate

s st

aff m

embe

rs h

ad b

enef

ited

from

the

stan

dard

ded

uctio

n, w

ithou

t tak

ing

acco

unt o

f the

indi

vidu

al p

ositi

ons

in w

hich

this

or t

hat s

taff

mem

ber

had

in fa

ct c

laim

ed la

rger

item

ized

dedu

ctio

ns. T

he B

ank

rule

d in

196

3 th

at th

e st

anda

rd d

educ

tion

shou

ld b

e re

plac

ed b

y a

dedu

ctio

nco

rres

pond

ing

to s

tate

and

loca

l tax

pay

able

in c

ases

whe

re th

ose

paym

ents

exc

eede

d th

e am

ount

of t

hest

anda

rd d

educ

tion.

Suc

h ru

lings

, by

whi

ch th

e co

mpe

tent

aut

horit

ies

of th

e B

ank

esta

blis

hed

lega

l nor

ms,

wer

eun

deni

ably

par

t of t

he c

ondi

tions

of e

mpl

oym

ent o

f the

sta

ff m

embe

rs. T

he T

ribun

al c

onsi

ders

ther

efor

e th

atth

e pr

ovis

ions

of P

.M.S

. 3.0

5 pr

ovid

ing

for

tax

reim

burs

emen

t on

the

basi

s of

the

stan

dard

ded

uctio

n

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

esta

blis

hed

by U

nite

d S

tate

s le

gisl

atio

n fo

rmed

par

t of t

he c

ondi

tions

of e

mpl

oym

ent o

f the

App

lican

ts L

amso

n-S

crib

ner,

Ree

se, R

eism

an-T

oof a

nd S

hapi

ro a

t the

dat

e w

hen

the

Ban

k to

ok th

e de

cisi

on to

“rep

lace

”, “a

men

d”an

d “s

uper

sede

” the

m b

y th

e te

rms

of C

ircul

ar 1

/80.

74. H

avin

g re

ache

d th

is c

oncl

usio

n, th

e Tr

ibun

al m

ust n

ow c

onsi

der w

heth

er th

e in

trodu

ctio

n of

the

new

prov

isio

ns in

rela

tion

to th

e fo

ur A

pplic

ants

cha

nges

the

fund

amen

tal a

nd e

ssen

tial e

lem

ents

of t

heir

cond

ition

sof

em

ploy

men

t.

75. T

he c

ondi

tions

in w

hich

the

tax

reim

burs

emen

t sys

tem

wer

e es

tabl

ishe

d fro

m th

e or

igin

of t

he B

ank

show

that

this

sys

tem

rest

ed o

n tw

o in

here

ntly

fund

amen

tal p

rinci

ples

, des

igne

d to

ens

ure

the

equa

lity

amon

g st

aff

mem

bers

of t

he B

ank

as a

n in

tern

atio

nal o

rgan

izat

ion,

rega

rdle

ss o

f the

ir na

tiona

lity.

The

firs

t is

that

all

empl

oyee

s of

the

Ban

k sh

ould

rece

ive

a sa

lary

free

of n

atio

nal t

axes

, as

was

exp

ress

ly s

tate

d in

Arti

cle

VII,

Sec

tion

9(b)

of t

he A

rticl

es o

f Agr

eem

ent.

That

is w

hy th

e le

tters

of a

ppoi

ntm

ent f

rom

the

very

beg

inni

ng fi

xed

sala

ries

in n

et te

rms,

and

all

incl

uded

the

follo

win

g st

atem

ent:

“You

r sa

lary

will

be

at th

e ra

te o

f ....

per

ann

uman

d w

ill b

e ne

t of i

ncom

e ta

xes

as p

rese

ntly

and

her

eafte

r pr

ovid

ed in

the

By-

Law

s an

d R

egul

atio

ns o

f the

Ban

k”. T

he s

econ

d pr

inci

ple,

a lo

gica

l cor

olla

ry o

f the

firs

t, is

that

thos

e st

aff m

embe

rs o

f the

Ban

k w

ho w

ere

subj

ect t

o ta

x by

thei

r S

tate

wou

ld h

ave

the

right

to b

e re

imbu

rsed

by

the

Ban

k fo

r th

e ta

xes

whi

ch th

ey w

ere

requ

ired

to p

ay. T

his

prin

cipl

e w

as s

et o

ut in

By-

Law

14(

b), b

y w

hich

the

Boa

rd o

f Gov

erno

rs d

ecid

ed in

194

6th

at “p

endi

ng n

eces

sary

act

ion

take

n by

mem

ber

gove

rnm

ents

to e

xem

pt ..

.” th

e B

ank

wou

ld re

imbu

rse

thos

eaf

fect

ed a

nd, m

ore

parti

cula

rly, t

he U

.S. s

taff

mem

bers

“for

the

taxe

s w

hich

they

are

requ

ired

to p

ay”.

Suc

h ar

eth

e fu

ndam

enta

l and

ess

entia

l ele

men

ts o

f the

con

ditio

ns o

f em

ploy

men

t of s

taff

recr

uite

d be

fore

Jan

uary

1,

1980

. The

cha

ract

er o

f the

saf

ety-

net m

echa

nism

add

ed b

y th

e B

ank

to th

e re

com

men

datio

ns o

f the

Kaf

kaR

epor

t con

stitu

tes

in th

e ci

rcum

stan

ces

of th

e pr

esen

t cas

e an

impl

icit

reco

gniti

on o

f the

fund

amen

tal c

hara

cter

of th

ese

elem

ents

.

76. T

he p

rinci

ple

of “r

eim

burs

emen

t for

the

taxe

s w

hich

they

are

requ

ired

to p

ay”

may

be

impl

emen

ted

in a

varie

ty o

f way

s, e

spec

ially

as

rega

rds

the

dedu

ctio

ns w

hich

are

to b

e ta

ken

into

acc

ount

. Var

ious

met

hods

of

calc

ulat

ion

are

poss

ible

. It i

s po

ssib

le, f

or e

xam

ple,

to e

xam

ine

the

indi

vidu

al s

ituat

ion

of e

ach

staf

f mem

ber

and

take

acc

ount

of i

tem

ized

ded

uctio

ns a

ctua

lly c

laim

ed; i

t is

poss

ible

als

o to

ado

pt th

e pr

esum

ptio

n of

ast

anda

rd d

educ

tion

or o

f ave

rage

ded

uctio

ns. A

bal

ance

has

to b

e st

ruck

am

ong

vario

us fa

ctor

s (e

quity

,si

mpl

icity

, cos

t) w

hich

som

etim

es c

ontra

dict

one

ano

ther

: rig

orou

s ex

actn

ess

cann

ot b

e ac

hiev

ed s

ave

at th

epr

ice

of c

ompl

icat

ions

; a s

impl

e so

lutio

n ca

n on

ly b

e ac

hiev

ed a

t the

cos

t of a

ppro

xim

atio

n. O

n al

l the

sequ

estio

ns it

was

by

a re

ason

ed ju

dgm

ent a

nd a

fter

a ba

lanc

e of

con

side

ratio

ns th

at th

e co

mpe

tent

aut

horit

ies

of th

e B

ank

pref

erre

d on

e fo

rmul

a to

ano

ther

, bei

ng c

onsc

ious

that

non

e co

uld

be p

erfe

ct in

all

resp

ects

.

77. T

his

dist

inct

ion

betw

een

the

prin

cipl

es o

f tax

reim

burs

emen

t and

the

met

hod

of im

plem

enta

tion

was

expr

esse

d as

ear

ly a

s in

the

Rep

ort o

f the

Ste

erin

g C

omm

ittee

of O

ctob

er 1

946.

The

Mem

oran

dum

add

ress

edto

the

Pre

side

nt s

ome

wee

ks la

ter,

on

Dec

embe

r 5, 1

946,

dea

lt at

leng

th w

ith w

hat i

t cal

led

the

“Met

hods

of

Com

putin

g th

e am

ount

of t

ax re

imbu

rsem

ent”

and

reco

mm

ende

d “th

at th

e ta

x re

imbu

rsem

ent b

e co

mpu

ted

onth

e ba

sis

of ..

. sta

ndar

d de

duct

ions

” rat

her t

han

on “a

mor

e ex

act m

etho

d of

com

puta

tion”

whi

ch w

ould

be

mor

eco

mpl

ex. T

he d

ecis

ion

of th

e E

xecu

tive

Dire

ctor

s of

Dec

embe

r 10,

194

6 ch

ose

the

met

hod

of s

tand

ard

dedu

ctio

n “in

com

putin

g th

e am

ount

of s

uch

tax

reim

burs

emen

t”. N

early

twen

ty y

ears

late

r, th

e re

form

of 1

963

was

pre

sent

ed b

y th

e P

resi

dent

as

a m

odifi

catio

n of

“the

Ban

k's

calc

ulat

ion

met

hod”

or o

f “th

e st

anda

rdde

duct

ion

met

hod”

. The

rele

vant

par

agra

ph o

f P.M

.S. N

o. 3

.05,

issu

ed in

Dec

embe

r 197

3, is

pla

ced

unde

r the

doub

le h

eadi

ng: “

IV. P

roce

dure

. A. C

ompu

tatio

n”. I

t thu

s ap

pear

s cl

early

from

the

rele

vant

doc

umen

tssu

bmitt

ed to

the

Trib

unal

that

if th

e rig

ht to

a s

alar

y ne

t of t

axes

and

the

right

to b

e “r

eim

burs

ed fo

r th

e ta

xes

they

are

requ

ired

to p

ay”

cons

titut

ed a

t the

tim

e of

alle

ged

nono

bser

vanc

e –

and

in fa

ct s

ince

194

6 –

afu

ndam

enta

l and

ess

entia

l ele

men

t of t

he te

rms

of a

ppoi

ntm

ent o

f the

four

Uni

ted

Sta

tes

App

lican

ts, t

he s

ame

is n

ot tr

ue o

f the

sta

ndar

d de

duct

ion,

sim

ple

met

hod

of c

alcu

latio

n or

pro

cedu

re o

f com

puta

tion.

78. I

t may

be

reca

lled

that

sev

eral

asp

ects

of t

he m

etho

d of

cal

cula

tion

of ta

x re

imbu

rsem

ent w

ere

inde

edun

ilate

rally

cha

nged

by

the

Ban

k be

fore

197

9. T

he 1

963

amen

dmen

t whi

ch –

in a

par

ticul

ar s

ituat

ion

refe

rred

toin

par

agra

ph 6

2 –

repl

aced

the

stan

dard

ded

uctio

n by

an

item

ized

ded

uctio

n co

nstit

utes

a s

igni

fican

t pre

cede

ntsh

owin

g th

at th

e m

etho

d of

com

puta

tion

of re

imbu

rsem

ent e

stab

lishe

d in

194

6 on

the

basi

s of

the

stan

dard

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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]

dedu

ctio

n w

as n

ot s

acro

sanc

t and

cou

ld b

e m

odifi

ed fr

om ti

me

to ti

me.

79. T

he A

pplic

ants

insi

st b

oth

in th

eir

writ

ten

and

thei

r or

al p

lead

ings

on

the

wei

ght w

hich

they

atta

ched

to th

eir

gros

s in

com

e w

hen

they

dec

ided

to a

ccep

t the

Ban

k's

offe

r of

em

ploy

men

t or t

o re

mai

n w

ith th

e B

ank

rath

erth

an to

see

k m

ore

rem

uner

ativ

e po

sitio

ns e

lsew

here

. The

y m

aint

ain

that

the

poss

ibili

ty o

f rei

mbu

rsem

ent i

nex

cess

of t

axes

pai

d co

nstit

uted

an

inte

gral

par

t of t

heir

gros

s re

mun

erat

ion:

“The

am

ount

of r

eim

burs

emen

t,w

hate

ver i

ts re

latio

nshi

p to

the

taxe

s ac

tual

ly p

aid,

was

an

inte

gral

par

t of t

he U

nite

d S

tate

s st

aff m

embe

rsco

mpe

nsat

ion

… th

e st

anda

rd d

educ

tion

tax

reim

burs

emen

t for

mul

a w

as a

n es

tabl

ishe

d an

d si

gnifi

cant

par

t of

the

Uni

ted

Sta

tes

staf

f mem

bers

' com

pens

atio

n pa

ckag

e an

d co

ntrib

uted

a s

ubst

antia

l ind

ucem

ent f

or m

any

ofth

em to

acc

ept e

mpl

oym

ent a

t the

net

sal

arie

s se

t for

th in

thei

r le

tters

of a

ppoi

ntm

ent”.

80. A

s th

e Tr

ibun

al h

as c

oncl

uded

that

the

stan

dard

ded

uctio

n m

etho

d is

not

a fu

ndam

enta

l ele

men

t of t

heco

nditi

ons

of e

mpl

oym

ent o

f App

lican

ts, i

t fol

low

s th

at th

e de

term

inat

ion

of th

e gr

oss

inco

me

and

the

poss

ibili

tyof

reim

burs

emen

t in

exce

ss o

f tax

es, w

hich

are

but

cor

olla

ries

of th

is m

etho

d, a

re e

qual

ly n

on-e

ssen

tial

elem

ents

of t

he c

ondi

tions

of e

mpl

oym

ent o

f the

App

lican

ts. I

n an

y ev

ent,

any

info

rmat

ion

give

n to

App

lican

tsbe

fore

thei

r em

ploy

men

t with

the

Ban

k ab

out a

ny a

ppro

xim

ate

gros

s in

com

e fig

ures

mus

t be

deem

edsu

pers

eded

by

the

expl

icit

prov

isio

ns re

ferr

ing

to n

et s

alar

y in

the

lette

rs o

f app

oint

men

t.

81. T

he p

rece

ding

obs

erva

tions

are

rein

forc

ed b

y th

e st

atem

ents

mad

e in

the

broc

hure

of t

he Y

oung

Pro

fess

iona

ls P

rogr

am to

whi

ch a

ttent

ion

was

dra

wn

by A

pplic

ant S

hapi

ro. T

he re

leva

nt te

xt o

f the

bro

chur

e is

as fo

llow

s:

“At t

he p

rese

nt ti

me,

You

ng P

rofe

ssio

nal s

alar

ies

rang

e be

twee

n …

and

… d

olla

rs a

yea

r, n

et o

f inc

ome

taxe

s. In

cas

es w

here

sal

arie

s ar

e ta

xabl

e, th

e am

ount

pai

d in

taxa

tion

by th

e st

aff m

embe

r on

his

Ban

ksa

lary

is re

imbu

rsed

by

the

Ban

k”.

This

is a

rest

atem

ent o

f the

two

fund

amen

tal p

rinci

ples

of n

et s

alar

y fo

r al

l and

of r

eim

burs

emen

t of t

axes

for

the

Uni

ted

Sta

tes

staf

f mem

bers

. The

bro

chur

e do

es n

ot in

dica

te a

ny p

artic

ular

met

hod

of c

alcu

latio

n, it

doe

sno

t spe

ak o

f a s

tand

ard

dedu

ctio

n fo

rmul

a, a

nd it

doe

s no

t men

tion

gros

s in

com

e, le

t alo

ne re

imbu

rsem

ent i

nex

cess

of t

axes

.

82. A

ccor

ding

ly, t

he T

ribun

al c

oncl

udes

that

the

Ban

k do

es n

ot h

ave

the

pow

er u

nila

tera

lly to

abo

lish

the

tax

reim

burs

emen

t sys

tem

or t

o re

pay

a le

sser

am

ount

than

the

taxe

s w

hich

eac

h of

the

App

lican

ts is

requ

ired

topa

y (o

n th

e as

sum

ptio

n th

at B

ank

inco

me

is h

is o

r her

onl

y in

com

e). I

ndee

d, th

e B

ank

has

not d

one

so. T

heA

pplic

ants

con

tinue

afte

r th

e de

cisi

ons

of 1

979/

80 a

s be

fore

to re

ceiv

e a

net s

alar

y in

the

sam

e w

ay a

s no

n-U

nite

d S

tate

s st

aff m

embe

rs. T

he p

rinci

ple

of re

imbu

rsem

ent “

for t

he ta

xes

they

are

requ

ired

to p

ay”

is fu

llyre

spec

ted

by v

irtue

of t

he s

afet

y ne

t. In

no

case

doe

s an

y U

nite

d S

tate

s st

aff m

embe

r re

ceiv

e a

net s

alar

ylo

wer

than

that

whi

ch h

e w

ould

hav

e re

ceiv

ed if

he

had

not b

een

subj

ect t

o U

nite

d S

tate

s ta

xes.

All

taxe

s w

hich

he is

“req

uire

d to

pay

” ar

e re

imbu

rsed

by

the

Ban

k. T

he o

nly

chan

ge e

ffect

ed is

in th

e re

plac

emen

t of t

hest

anda

rd d

educ

tion

met

hod

with

ano

ther

met

hod.

The

Ban

k w

as e

ntitl

ed to

do

this

eve

n if

the

gros

s in

com

e of

certa

in U

nite

d S

tate

s st

aff m

embe

rs h

as b

een

redu

ced

as a

resu

lt, a

nd e

ven

if th

e re

imbu

rsem

ent i

n ex

cess

of

taxe

s w

hich

they

pre

viou

sly

rece

ived

is d

imin

ishe

d or

alto

geth

er d

isap

pear

s. A

ll th

ese

non-

esse

ntia

l ele

men

tsin

the

cond

ition

s of

em

ploy

men

t wer

e su

bjec

t to

unila

tera

l am

endm

ent b

y th

e B

ank.

83. A

lthou

gh th

e B

ank'

s po

wer

to s

ubst

itute

one

met

hod

of c

ompu

tatio

n fo

r an

othe

r is

disc

retio

nary

, thi

sdi

scre

tion

is n

ot a

n un

fette

red

one.

It re

mai

ns th

eref

ore

for

the

Trib

unal

to a

scer

tain

whe

ther

in m

akin

g th

eco

ntes

ted

deci

sion

s th

e B

ank

has,

or h

as n

ot, c

omm

itted

an

abus

e of

dis

cret

ion.

84. T

he T

ribun

al n

otes

, firs

t, th

at th

e ch

ange

in th

e ta

x re

imbu

rsem

ent m

etho

d ha

d no

retro

activ

e ef

fect

and

that

no

com

plai

nt o

f thi

s ki

nd h

as b

een

brou

ght f

orw

ard

by th

e A

pplic

ants

.

85. S

econ

d, a

s th

e Tr

ibun

al h

as s

how

n ab

ove

(par

agra

phs

64 e

t seq

), th

e ev

er-in

crea

sing

dis

crep

ancy

betw

een

the

taxe

s w

hich

sta

ff m

embe

rs w

ere

requ

ired

to p

ay a

nd th

e am

ount

of r

eim

burs

emen

t whi

ch th

eyre

ceiv

ed o

n th

e ba

sis

of th

e st

anda

rd d

educ

tion

met

hod

rend

ered

the

oper

atio

n of

this

met

hod

ineq

uita

ble.

The

Dec

isio

ns

http

://ln

web

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orld

bank

.org

/crn

/wbt

/wbt

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site

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ults

web

)/470

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Sta

ff A

ssoc

iatio

n its

elf,

in it

s M

emor

andu

m o

f Apr

il 11

, 197

9, “S

taff

Ass

ocia

tion

Com

men

ts o

n S

taff

Com

pens

atio

n M

atte

rs,”

ack

now

ledg

ed th

at “t

he a

bilit

y of

indi

vidu

al U

.S. s

taff

to ta

ke a

dvan

tage

of t

hepr

ovis

ions

of t

he U

.S. t

ax c

ode

unde

r the

pre

sent

sys

tem

has

ena

bled

thos

e U

.S. s

taff

mem

bers

in a

pos

ition

todo

so,

to a

chie

ve n

et in

com

es a

bove

thei

r of

ficia

l net

pay

”. T

his

Mem

oran

dum

from

the

Sta

ff A

ssoc

iatio

n fu

rther

reco

gniz

es th

at u

nder

the

stan

dard

ded

uctio

n sy

stem

“the

obj

ectiv

e of

equ

al n

et p

ay fo

r eq

ual w

ork

on a

nin

divi

dual

bas

is is

not

ach

ieve

d.” T

hus,

the

Ban

k co

uld

reas

onab

ly c

oncl

ude

that

the

syst

em d

id n

ot w

ork

prop

erly

and

had

to b

e ch

ange

d. T

he T

ribun

al is

sat

isfie

d th

at th

e ob

ject

ive

of th

e B

ank

was

not

to re

duce

the

inco

me

of a

par

ticul

ar c

ateg

ory

of s

taff

mem

bers

by

reas

on o

f the

ir na

tiona

lity

but t

o en

sure

a b

ette

r fun

ctio

ning

of th

e in

stitu

tion

by a

mor

e eq

uita

ble

pers

onne

l pol

icy.

Thi

s di

d no

t inv

olve

an

abus

e of

dis

cret

ion

or a

mis

use

of p

ower

s on

the

part

of t

he B

ank.

86. I

t is

not f

or th

e Tr

ibun

al to

sub

stitu

te it

s ju

dgm

ent f

or th

at o

f the

Ban

k in

cho

osin

g th

e av

erag

e de

duct

ion

syst

em, r

athe

r tha

n so

me

othe

r sys

tem

, to

repl

ace

the

prev

ious

sys

tem

. Tha

t the

ave

rage

ded

uctio

n sy

stem

also

pre

sent

s so

me

inco

nven

ienc

es is

cer

tain

. As

the

Kaf

ka R

epor

t bro

ught

them

into

the

open

, the

Exe

cutiv

eD

irect

ors

wer

e fu

lly a

war

e of

them

. As

was

the

case

in 1

946,

the

1979

dec

isio

n re

pres

ente

d a

cons

ider

edch

oice

taki

ng in

to a

ccou

nt th

e va

rious

rele

vant

fact

ors.

The

App

lican

ts c

once

de th

at “i

t is

plai

nly

not t

hefu

nctio

n of

the

Trib

unal

to d

eter

min

e th

e be

st c

ompe

nsat

ion

polic

y fo

r th

e B

ank

to a

dopt

... n

or is

it th

eTr

ibun

al's

func

tion

to d

ecid

e w

hich

am

ong

the

vario

us p

ossi

ble

tax

reim

burs

emen

t sys

tem

s is

the

‘bes

t’ or

‘faire

st.’”

The

Trib

unal

fully

sha

res

this

vie

w.

87. N

ever

thel

ess,

the

App

lican

ts e

xpre

ss re

gret

that

onc

e th

e B

ank

deci

ded

to c

hang

e th

e m

etho

d, it

did

not

adop

t the

Uni

ted

Nat

ions

sys

tem

s. A

ccor

ding

to th

em, t

his

wou

ld h

ave

bette

r ach

ieve

d th

e ob

ject

ive

of in

tern

aleq

uity

. The

App

lican

ts m

aint

ain

that

if th

e E

xecu

tive

Dire

ctor

s di

d no

t cho

ose

this

sys

tem

it w

as o

nly

beca

use

such

a c

hoic

e w

ould

hav

e co

st th

e B

ank

mor

e. T

he c

hoic

e of

a p

artic

ular

met

hod

of ta

x re

imbu

rsem

ent m

aypr

oper

ly b

e de

term

ined

by

seve

ral f

acto

rs: e

quity

, eas

e of

adm

inis

tratio

n, c

ost,

com

preh

ensi

bilit

y,co

nfid

entia

lity.

Thu

s, th

e co

st o

f any

par

ticul

ar s

yste

m is

one

of s

ever

al fa

ctor

s w

hich

the

orga

niza

tion

may

take

into

acc

ount

. The

Uni

ted

Nat

ions

sys

tem

pre

sent

s, a

s do

all

the

othe

rs, b

oth

adva

ntag

es, f

or in

stan

ce, i

nac

hiev

ing

a si

gnifi

cant

deg

ree

of in

tern

al e

quity

, and

dis

adva

ntag

es, p

artic

ular

ly in

the

cost

to th

e or

gani

zatio

n.Th

e K

afka

Rep

ort a

naly

zed

them

as

it di

d th

e ot

her s

yste

ms

whi

ch it

exa

min

ed. I

t obs

erve

d in

ter

alia

that

,un

like

orga

niza

tions

suc

h as

the

Uni

ted

Nat

ions

, the

Ban

k's

Mem

ber

gove

rnm

ents

do

not r

efun

d to

it th

eam

ount

of t

axes

reim

burs

ed. A

s a

resu

lt, a

s th

e R

espo

nden

t say

s “th

e co

sts

of th

e ta

x re

imbu

rsem

ent s

yste

mar

e re

al c

osts

to th

e B

ank

whi

ch m

ust b

e de

duct

ed fr

om it

s in

com

e, w

hich

is g

ener

ated

in la

rge

part

from

inte

rest

and

fees

pai

d by

its

borr

ower

s in

less

dev

elop

ed c

ount

ries”

. The

Trib

unal

see

s no

abu

se o

f dis

cret

ion

inth

e fa

ct th

at th

e E

xecu

tive

Dire

ctor

s to

ok in

to a

ccou

nt th

e co

st o

f the

var

ious

sys

tem

s an

d, a

fter

havi

ngas

sess

ed th

e ad

vant

ages

and

dis

adva

ntag

es o

f eac

h, d

ecid

ed to

ado

pt th

e av

erag

e de

duct

ions

sys

tem

.

88. A

s ha

s be

en s

aid

(par

agra

ph 4

7) th

e m

anne

r in

whi

ch a

cha

nge

in th

e no

n-fu

ndam

enta

l ele

men

ts o

f the

term

s of

app

oint

men

t are

pre

pare

d or

app

lied

is a

lso

to b

e ta

ken

into

acc

ount

by

the

Trib

unal

whe

n it

seek

s to

asce

rtain

whe

ther

the

amen

dmen

t has

an

arbi

trary

or u

nrea

sona

ble

char

acte

r. Th

e lo

ng a

nd d

etai

led

stud

ies

whi

ch p

rece

ded

the

1979

dec

isio

ns s

how

that

this

was

not

a h

astil

y ad

opte

d re

form

, but

a c

hang

e st

udie

d at

leng

th a

nd m

ost c

aref

ully

pre

pare

d. T

he e

stab

lishm

ent o

f the

new

sys

tem

incl

uded

mea

sure

s sh

owin

gm

oder

atio

n an

d co

ncer

n fo

r st

aff.

The

Exe

cutiv

e D

irect

ors

did

not f

ollo

w th

e K

afka

reco

mm

enda

tions

blin

dly,

but i

ntro

duce

d in

to th

em tw

o im

porta

nt c

hang

es: t

he s

afet

y ne

t and

a tr

ansi

tiona

l per

iod

of fi

ve y

ears

“in

orde

rto

alle

viat

e th

e im

pact

of t

he c

hang

e.”

89. T

he p

rece

ding

con

side

ratio

ns le

ad th

e Tr

ibun

al to

con

clud

e th

at in

app

lyin

g th

e de

cisi

ons

in M

anua

lC

ircul

ar P

ers.

1/8

0 da

ted

Janu

ary

21, 1

980

to th

e A

pplic

ants

Lam

son-

Scr

ibne

r, R

eese

, Rei

sman

-Too

f and

Sha

piro

the

Ban

k di

d no

t com

mit

any

non-

obse

rvan

ce o

f the

ir co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

ofap

poin

tmen

t.

V. S

ALA

RY

AD

JUS

TME

NT

90. T

he s

ix A

pplic

ants

con

tend

that

thei

r co

nditi

ons

of e

mpl

oym

ent i

nclu

de a

righ

t to

the

prot

ectio

n of

the

real

valu

e of

thei

r sa

larie

s ag

ains

t ero

sion

by

infla

tion

and

that

in g

rant

ing

incr

ease

s m

arke

dly

low

er th

an th

e

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

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9ED

006B

B87

7[5/

20/2

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]

incr

ease

s in

the

Was

hing

ton

CP

I the

Ban

k ha

s vi

olat

ed th

ose

cond

ition

s. T

he R

espo

nden

t den

ies

that

the

cond

ition

s of

em

ploy

men

t of t

he A

pplic

ants

incl

ude

a rig

ht to

an

auto

mat

ic a

djus

tmen

t of t

heir

sala

ries

to m

eet

an in

crea

se in

the

cost

of l

ivin

g an

d ad

ds th

at, e

ven

if su

ch a

righ

t had

bee

n pa

rt o

f the

con

ditio

ns o

fem

ploy

men

t bef

ore

1979

, the

Ban

k re

tain

ed th

e rig

ht, i

n th

e le

tters

of a

ppoi

ntm

ent a

ccep

ted

by th

e A

pplic

ants

,to

cha

nge

its s

alar

y po

licy.

91. T

he T

ribun

al fi

rst n

otes

that

no

prov

isio

n fo

r pe

riodi

c ad

just

men

t of s

alar

y an

d st

ill le

ss fo

r an

aut

omat

icad

just

men

t to

mee

t the

incr

ease

in th

e co

st o

f liv

ing

appe

ars

in a

ny o

f the

lette

rs o

f app

oint

men

t and

acce

ptan

ce. T

he T

ribun

al a

lso

note

s th

at th

ere

is n

o pr

ovis

ion

to th

is e

ffect

in th

e P

erso

nnel

Man

ual.

On

thes

epo

ints

, bot

h pa

rties

agr

ee.

92. T

he A

pplic

ants

mai

ntai

n, h

owev

er, t

hat a

pol

icy

of a

utom

atic

adj

ustm

ent o

f sal

arie

s to

mee

t inc

reas

es in

the

CP

I was

reco

mm

ende

d by

the

Pre

side

nt to

the

Exe

cutiv

e D

irect

ors

in R

epor

t R. 6

8-14

0 da

ted

June

30,

196

8an

d w

as a

dopt

ed b

y th

e E

xecu

tive

Dire

ctor

s at

thei

r m

eetin

g of

Aug

ust 1

3, 1

968.

Sin

ce th

en, s

o th

e A

pplic

ants

clai

m, t

his

polic

y ha

s be

en a

pplie

d, h

as b

ecom

e a

firm

ly e

stab

lishe

d pr

actic

e an

d ha

s th

eref

ore

beco

me

part

of

thei

r co

nditi

ons

of e

mpl

oym

ent.

The

Trib

unal

will

firs

t exa

min

e w

heth

er in

196

8 a

deci

sion

in th

is re

gard

was

mad

e an

d, s

econ

d, w

heth

er a

pra

ctic

e of

aut

omat

ic c

ost-o

f-liv

ing

adju

stm

ent w

as fo

llow

ed b

etw

een

1968

and

1978

.

93. R

epor

t No.

R. 6

8-14

0 is

ent

itled

: “P

ropo

sed

Gen

eral

Sal

ary

Incr

ease

.” A

fter r

ecal

ling

that

the

Ban

k ha

s no

t“s

ince

196

2 pr

ovid

ed g

ener

al s

alar

y in

crea

ses

unifo

rmly

app

lied

to m

eet c

ost-o

f-liv

ing

chan

ges”

the

Pre

side

ntsa

id: “F

or th

ese

reas

ons

I pro

pose

to m

odify

our

sys

tem

and

ado

pt a

pol

icy

of p

erio

dic

acro

ss-th

e-bo

ard

sala

ryin

crea

ses

for

prof

essi

onal

sta

ff to

mat

ch ri

ses

in th

e ‘c

ost-o

f-liv

ing’

in th

e ar

ea in

whi

ch w

e w

ork

and

live.

We

will

, of c

ours

e, c

ontin

ue o

ur p

olic

y of

gra

ntin

g m

erit

rais

es to

pro

fess

iona

l sta

ff ba

sed

on in

divi

dual

perfo

rman

ce a

nd a

bilit

y in

the

light

of p

erso

nal r

evie

ws.

.. H

owev

er, t

hese

incr

ease

s w

ill b

e se

para

te fr

omad

just

men

ts to

mee

t adv

ance

s in

the

‘cos

t-of-l

ivin

g.’ T

he b

asic

obj

ectiv

e w

ill c

ontin

ue to

be

to a

ttrac

t and

reta

in a

hig

hly

com

pete

nt in

tern

atio

nal s

taff

and

to m

otiv

ate

and

stim

ulat

e th

e hi

ghes

t lev

el o

f per

form

ance

by a

ll st

aff m

embe

rs.”

The

Pre

side

nt th

en p

rovi

ded

info

rmat

ion

on p

rice

incr

ease

s in

Was

hing

ton

sinc

e 19

68, o

n th

e in

crea

ses

insa

larie

s gr

ante

d by

the

Fund

, the

Inte

r-A

mer

ican

Dev

elop

men

t Ban

k, th

e U

nite

d N

atio

ns a

nd th

e U

nite

d S

tate

sG

over

nmen

t, on

com

para

ble

prac

tices

in th

e pu

blic

ser

vice

of C

anad

a an

d va

rious

Eur

opea

n co

untri

es, a

s w

ell

as o

n in

crea

ses

in a

cade

mic

sal

arie

s in

the

Uni

ted

Sta

tes.

He

conc

lude

d w

ith a

pro

posa

l to

“gra

nt a

n ac

ross

-th

e-bo

ard

sala

ry in

crea

se e

ffect

ive

at 1

Sep

tem

ber,

1968

... a

mou

ntin

g to

8 p

er c

ent.”

94. T

he E

xecu

tive

Dire

ctor

s ex

amin

ed th

e pr

oble

m o

n A

ugus

t 13,

196

8. T

he M

inut

es o

f the

Mee

ting

reco

rded

the

follo

win

g:

“Gen

eral

Sal

ary,

Incr

ease

. The

Exe

cutiv

e D

irect

ors

appr

oved

the

reco

mm

enda

tion

(R 6

8-14

0) fo

r a

gene

ral

sala

ry in

crea

se, w

ith th

e m

odifi

catio

n ad

opte

d at

the

mee

ting.

”

The

cont

ent o

f the

dis

cuss

ions

and

of t

he d

ecis

ions

take

n by

the

Exe

cutiv

e D

irect

ors

on th

e re

com

men

datio

n of

the

Pre

side

nt is

sta

ted

in a

n ag

reed

sum

mar

y of

the

mee

ting

prep

ared

by

the

parti

es. I

t app

ears

that

a d

ecis

ion

was

take

n to

pla

ce a

cei

ling

on th

e ge

nera

l inc

reas

e of

8%

reco

mm

ende

d by

the

Pre

side

nt in

suc

h a

way

that

the

high

er s

alar

ies

wou

ld n

ot b

enef

it fro

m th

e in

crea

se. F

urth

er:

“In re

spon

se to

que

stio

ns ra

ised

at t

he m

eetin

g ab

out p

arag

raph

4 o

f doc

umen

t R. 6

8-14

0, w

hich

sta

ted

that

the

Pre

side

nt p

ropo

sed

to a

dopt

a p

olic

y of

per

iodi

c ac

ross

-the-

boar

d sa

lary

incr

ease

s fo

r pr

ofes

sion

alst

aff,

the

Pre

side

nt e

xpla

ined

that

he

prop

osed

to fo

llow

suc

h po

licy

and

he p

lann

ed to

hav

e pe

riodi

cre

view

s an

d m

ake

reco

mm

enda

tions

to th

e E

xecu

tive

Dire

ctor

s w

here

it w

as n

eces

sary

to h

ave

thei

rap

prov

al o

f acr

oss-

the-

boar

d in

crea

ses.

He

cons

ider

ed it

abs

olut

ely

esse

ntia

l tha

t the

re b

e a

clea

r-cu

tes

tabl

ishe

d po

licy

in th

e ad

min

istra

tion

of th

e B

ank'

s sa

larie

s an

d th

at w

as th

e po

licy

that

he

prop

osed

to

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

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006B

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20/2

014

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]

have

the

sala

ry a

dmin

istra

tive

depa

rtmen

t fol

low

. Whe

re th

e ap

plic

atio

n of

suc

h po

licy

requ

ired

appr

oval

of

the

Exe

cutiv

e D

irect

ors,

a d

ecis

ion

wou

ld b

e br

ough

t to

them

for

appr

oval

.”

The

sam

e da

y th

e st

aff w

ere

info

rmed

by

Adm

inis

trativ

e C

ircul

ar th

at:

“In th

e fa

ce o

f the

con

tinue

d ris

e in

the

cost

of l

ivin

g in

the

Was

hing

ton

area

, a g

ener

al in

crea

se in

sal

arie

sha

s be

en a

ppro

ved

for

the

staf

f of t

he B

ank

and

Cor

pora

tion.

Pre

sent

sal

ary

rate

s of

pro

fess

iona

l sta

ffm

embe

rs, b

ecau

se th

ey h

ave

not r

efle

cted

cos

t-of-l

ivin

g in

crea

ses

sinc

e S

epte

mbe

r 196

6, w

ill b

e ra

ised

by

appr

oxim

atel

y 8%

...”

95. T

he fo

rego

ing

show

s th

at th

e P

resi

dent

reco

mm

ende

d an

incr

ease

of a

cer

tain

per

cent

age

effe

ctiv

eS

epte

mbe

r 1, 1

968,

add

ing,

firs

t, th

at h

e in

tend

ed to

mak

e pe

riodi

c re

com

men

datio

ns to

the

Exe

cutiv

eD

irect

ors

for

acro

ss-th

e-bo

ard

sala

ry in

crea

ses

and,

sec

ond,

that

he

wou

ld re

com

men

d to

the

Exe

cutiv

eD

irect

ors

to fo

llow

in th

eir

perio

dic

deci

sion

s a

clea

r-cu

t and

est

ablis

hed

polic

y. T

he R

epor

t (as

cla

rifie

d by

the

expl

anat

ions

of t

he P

resi

dent

dur

ing

the

mee

ting

of th

e E

xecu

tive

Dire

ctor

s) th

us a

mou

nted

onl

y to

a s

tate

men

tof

the

Pre

side

nt's

inte

ntio

ns a

nd o

f the

pol

icy

that

he

reco

mm

ende

d th

e E

xecu

tive

Dire

ctor

s to

follo

w in

the

futu

re. T

he T

ribun

al c

anno

t attr

ibut

e th

e ef

fect

of a

dec

isio

n cr

eatin

g rig

hts

and

oblig

atio

ns a

s be

twee

n th

eB

ank

and

its s

taff

to a

sta

tem

ent o

f pol

icy

by w

hich

the

Pre

side

nt in

form

ed th

e E

xecu

tive

Dire

ctor

s of

his

inte

ntio

ns. T

he P

resi

dent

's re

com

men

datio

n of

Jun

e 30

, 196

8 ca

nnot

, the

refo

re, b

e co

nsid

ered

as

havi

ngm

odifi

ed, a

nd b

ecom

e pa

rt o

f, th

e co

nditi

ons

of e

mpl

oym

ent o

f the

App

lican

ts.

96. A

s re

gard

s th

e E

xecu

tive

Dire

ctor

s' d

ecis

ion

of A

ugus

t 13,

196

8, it

is c

lear

from

the

parti

es' a

gree

dsu

mm

ary

that

this

dec

isio

n ne

ither

repe

ated

the

Pre

side

nt's

reco

mm

enda

tion

nor

stat

ed a

gen

eral

pol

icy

that

the

Exe

cutiv

e D

irect

ors

inte

nded

to fo

llow

in th

e fu

ture

. The

Exe

cutiv

e D

irect

ors

mer

ely

deci

ded

to g

ive

the

staf

fan

incr

ease

of a

fixe

d am

ount

on

Sep

tem

ber 1

, 196

8. S

houl

d th

e P

resi

dent

sub

sequ

ently

reco

mm

end

furth

erin

crea

ses,

as

he s

aid

he w

ould

, the

Exe

cutiv

e D

irect

ors

wou

ld d

ecid

e on

suc

h re

com

men

datio

ns w

ithin

the

fram

ewor

k of

thei

r po

wer

s: “a

dec

isio

n w

ould

be

brou

ght t

o th

em fo

r ap

prov

al.”

The

Exe

cutiv

e D

irect

ors

thus

reta

ined

thei

r fu

ll fre

edom

to a

ppro

ve o

r not

in e

ach

futu

re c

ase

any

sala

ry in

crea

se w

hich

the

Pre

side

nt m

ight

prop

ose

to th

em. T

he C

ircul

ar a

nnou

ncin

g th

e in

crea

se to

the

staf

f did

not

con

tain

any

com

mitm

ent t

oco

mpe

nsat

e au

tom

atic

ally

for

futu

re in

crea

ses

in th

e co

st o

f liv

ing.

97. T

he A

pplic

ants

mai

ntai

n, s

econ

dly,

that

the

impl

emen

tatio

n by

the

Ban

k of

a p

olic

y to

adj

ust t

he s

alar

ies

ofits

sta

ff to

mat

ch c

ost-o

f-liv

ing

incr

ease

s ha

s gi

ven

rise

to a

con

sist

ent a

nd e

stab

lishe

d pr

actic

e, w

hich

has

beco

me

an in

tegr

al p

art o

f the

ir co

nditi

ons

of e

mpl

oym

ent.

The

Res

pond

ent d

enie

s th

at s

uch

a pr

actic

e w

ases

tabl

ishe

d.

98. I

f the

pra

ctic

e al

lege

d by

the

App

lican

ts e

xist

s it

cann

ot b

e re

gard

ed a

s th

e im

plem

enta

tion

of a

dec

isio

nta

ken

in 1

968,

sin

ce, a

s th

e Tr

ibun

al h

as ju

st s

how

n, n

o de

cisi

on w

as ta

ken

in 1

968

to m

aint

ain

sala

ries

at a

leve

l int

ende

d to

elim

inat

e co

mpl

etel

y th

e ef

fect

s of

infla

tion.

As

indi

cate

d in

par

agra

ph 2

3, th

e pr

actic

e of

an

inte

rnat

iona

l org

aniz

atio

n m

ay u

nder

cer

tain

con

ditio

ns b

e an

inde

pend

ent s

ourc

e of

righ

ts a

nd d

utie

s in

the

lega

l rel

atio

nshi

p be

twee

n an

org

aniz

atio

n an

d its

sta

ff. T

he T

ribun

al m

ust t

here

fore

con

side

r whe

ther

or n

otth

e pr

actic

e in

voke

d by

the

App

lican

ts e

xist

s, a

nd if

it d

oes,

whe

ther

it h

as b

ecom

e a

cond

ition

of e

mpl

oym

ent.

99. B

etw

een

1968

and

197

8 th

e B

ank

incr

ease

d sa

larie

s ea

ch y

ear

and

som

etim

es tw

ice

in a

yea

r. In

conf

orm

ity w

ith th

e in

tent

ion

whi

ch h

e ha

d ex

pres

sed

to th

e E

xecu

tive

Dire

ctor

s, th

e P

resi

dent

sub

mitt

ed to

them

eac

h ye

ar a

reco

mm

enda

tion

to th

is e

ffect

. Eac

h ye

ar th

e E

xecu

tive

Dire

ctor

s re

ache

d a

conc

lusi

on o

nth

is re

com

men

datio

n an

d a

circ

ular

was

issu

ed to

info

rm th

e st

aff o

f the

dec

isio

n ad

opte

d. C

lose

exa

min

atio

n of

the

reco

mm

enda

tions

and

circ

ular

s re

latin

g to

eac

h of

the

year

s 19

69 to

197

9 le

ads

the

Trib

unal

to s

ever

alob

serv

atio

ns.

100.

The

firs

t is

that

the

rise

in th

e co

st o

f liv

ing

was

inde

ed m

entio

ned

in s

ome

case

s as

bei

ng th

e de

cisi

vere

ason

for

the

incr

ease

. The

circ

ular

of M

ay 9

, 197

3, fo

r ex

ampl

e, s

aid

that

“the

se in

crea

ses

are

desi

gned

tom

aint

ain

the

real

leve

l of s

alar

ies

in th

e fa

ce o

f ris

ing

pric

es...

” On

Oct

ober

17

of th

e sa

me

year

the

Pre

side

nt

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

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]

prop

osed

a fu

rther

incr

ease

sta

ting

that

“the

key

fact

or d

eter

min

ing

the

need

for

a ge

nera

l sal

ary

incr

ease

is, o

fco

urse

, the

mov

emen

t in

pric

e le

vels

in th

e W

ashi

ngto

n ar

ea,”

and

the

circ

ular

of N

ovem

ber 7

, 197

3 ex

plai

ned

that

a n

ew in

crea

se h

ad b

een

deci

ded

beca

use

of th

e “e

spec

ially

sha

rp ri

se in

loca

l pric

e le

vels

sin

ceFe

brua

ry.”

Five

yea

rs la

ter,

in 1

978,

the

Pre

side

nt e

xpla

ined

that

“the

rise

in th

e co

st o

f liv

ing

in th

e W

ashi

ngto

nar

ea h

as fo

r se

vera

l yea

rs b

een

a cu

stom

ary

and

impo

rtant

fact

or in

our

con

side

ratio

n of

sta

ff co

mpe

nsat

ion.

”

101.

But

the

Trib

unal

als

o no

tes

a se

cond

poi

nt o

f eve

n gr

eate

r sig

nific

ance

: sev

eral

fact

ors

othe

r tha

n co

st o

fliv

ing

wer

e ta

ken

into

acc

ount

in fo

rmul

atin

g on

e or

ano

ther

sal

ary

incr

ease

.

102.

One

of t

hose

mos

t fre

quen

tly m

entio

ned

was

the

need

to m

aint

ain

the

com

petit

iven

ess

of th

e B

ank

in th

ere

crui

tmen

t of h

ighl

y qu

alifi

ed p

erso

nnel

and

, con

sequ

ently

, the

nec

essi

ty o

f mai

ntai

ning

Ban

k sa

larie

s at

ale

vel c

ompa

rabl

e at

leas

t to

thos

e of

its

prin

cipa

l com

petit

ors:

the

Uni

ted

Sta

tes

Gov

ernm

ent,

othe

r int

erna

tiona

lor

gani

zatio

ns s

uch

as th

e U

nite

d N

atio

ns, O

.E.C

.D.,

the

Eur

opea

n C

omm

on M

arke

t, U

nite

d S

tate

s fin

anci

alin

stitu

tions

and

indu

stria

l cor

pora

tions

, and

aca

dem

ic in

stitu

tions

. The

196

9 ci

rcul

ar, f

or e

xam

ple,

told

the

staf

fth

at th

ere

wer

e tw

o re

ason

s fo

r th

e in

crea

se, n

amel

y th

at “o

ther

em

ploy

ers,

bot

h pu

blic

and

priv

ate,

hav

ead

just

ed th

eir

sala

ry s

truct

ures

upw

ard,

and

the

cost

of l

ivin

g in

the

Was

hing

ton

area

has

con

tinue

d to

rise

.” In

1971

the

Pre

side

nt in

his

reco

mm

enda

tion

exam

ined

in d

etai

l the

fact

ors

“whi

ch h

ave

furth

er e

rode

d ou

rco

mpe

titiv

e m

argi

n.”

The

reco

mm

enda

tion

of th

e P

resi

dent

for

1973

spo

ke o

f “a

bala

nce

betw

een

som

etim

esco

nflic

ting

fact

ors:

(a)

the

eros

ion

of th

e re

al in

com

e of

the

staf

f due

to th

e ris

e in

the

Was

hing

ton

cost

of l

ivin

gan

d th

e cu

rren

cy re

alig

nmen

ts...

(b)

the

com

petit

iven

ess

of p

rese

nt B

ank

grou

p co

mpe

nsat

ion…

” The

197

7C

ircul

ar a

lso

invo

ked

thes

e tw

o fa

ctor

s, b

eing

bas

ed o

n a

stud

y of

the

com

pens

atio

n of

twen

ty-s

even

“ana

logo

us o

rgan

izat

ions

.” Th

e “p

ract

ice

of a

nalo

gous

org

aniz

atio

ns” w

as in

voke

d al

so in

the

1975

circ

ular

. In

1979

the

Kaf

ka R

epor

t not

ed th

at “t

he c

ompa

rison

of B

ank

jobs

with

cer

tain

out

side

jobs

has

alw

ays

been

par

tof

the

proc

ess

of d

eter

min

ing

pay.

..” T

he A

pplic

ants

hav

e re

cogn

ized

that

the

cost

-of-l

ivin

g el

emen

t was

not

the

sole

crit

erio

n go

vern

ing

the

incr

ease

s ad

opte

d du

ring

this

dec

ade:

“Rat

her,

the

obje

ctiv

e w

as to

pre

vent

the

real

valu

e of

Ban

k sa

larie

s fro

m b

eing

ero

ded

by in

flatio

n an

d to

kee

p th

ose

sala

ries

com

petit

ive”

.

103.

Sev

eral

oth

er fa

ctor

s w

ere

also

take

n in

to c

onsi

dera

tion

by th

e P

resi

dent

and

the

Exe

cutiv

e D

irect

ors.

Thus

the

reco

mm

enda

tion

of th

e P

resi

dent

for

1973

men

tione

d th

at a

s a

cons

eque

nce

of a

stu

dy c

arrie

d ou

t by

a co

nsul

ting

firm

“we

belie

ve th

at th

e B

ank

grou

p pr

ofes

sion

al s

alar

y st

ruct

ure

shou

ld b

e de

sign

ed to

take

acco

unt o

f: (a

) th

e co

mpe

titiv

e si

tuat

ion;

(b)

the

need

to p

rovi

de re

ason

able

diff

eren

tials

bet

wee

n gr

ades

...; (

c)th

e ne

ed to

pro

vide

reas

onab

le s

cope

for

the

rew

ard

of p

erfo

rman

ce.”

The

reco

mm

enda

tion

of th

e P

resi

dent

for

1974

not

ed th

at “m

any

mem

ber

gove

rnm

ents

and

mos

t oth

er o

rgan

izat

ions

do

not a

djus

t sal

arie

s so

lely

on

the

basi

s of

pric

e le

vel c

hang

es” a

nd s

aid

that

“sal

ary

chan

ges

may

be

indu

ced

as w

ell b

y (a

) ad

vanc

es in

stan

dard

of l

ivin

g ...

; (b

) ch

ange

s in

pay

rela

tions

hips

with

oth

er o

rgan

izat

ions

.” Th

e 19

76 C

ircul

ar e

xpla

inin

g“th

e un

derly

ing

philo

soph

y” o

f the

sal

ary

chan

ges

cite

d th

e fo

llow

ing

fact

ors:

cos

t of l

ivin

g, c

ompe

titiv

enes

s, re

alin

com

e gr

owth

and

sta

ff m

oral

e. T

he p

rece

ding

sho

ws

that

, in

real

ity, a

wid

e ra

nge

of fa

ctor

s w

ere

take

n in

toac

coun

t by

the

Ban

k in

dec

idin

g ye

ar a

fter

year

on

the

leve

l of i

ncre

ase

to g

rant

to th

e st

aff.

104.

The

Trib

unal

obs

erve

s, th

ird, t

hat i

n ea

ch o

f the

yea

rs u

nder

con

side

ratio

n th

e P

resi

dent

and

the

Exe

cutiv

e D

irect

ors

mad

e a

bala

nced

cho

ice

amon

g th

ese

fact

ors

acco

rdin

g to

the

cond

ition

s pr

evai

ling

in e

ach

year

. Thu

s, th

e M

emor

andu

m o

f the

Pre

side

nt fo

r 19

73 s

aid:

“We

have

sou

ght t

o ac

hiev

e a

bala

nce

betw

een

som

etim

es c

onfli

ctin

g fa

ctor

s.” T

he c

ircul

ar o

f 197

6, a

fter

refe

rrin

g to

the

vario

us fa

ctor

s ta

ken

into

cons

ider

atio

n, s

tate

d: “T

he e

xten

t of r

espo

nse

to th

ese

qual

itativ

e as

pect

s is

ver

y m

uch

a m

atte

r of j

udge

men

tin

the

cont

ext o

f eco

nom

ic, f

inan

cial

and

soc

ial c

onsi

dera

tions

.” It

is c

erta

in th

at a

mon

gst t

he fa

ctor

s ta

ken

into

cons

ider

atio

n by

the

Ban

k w

as th

e ev

olut

ion

of th

e co

st o

f liv

ing

and

that

this

was

a “k

ey fa

ctor

” “or

cus

tom

ary

and

impo

rtant

fact

or”.

But

it is

equ

ally

cer

tain

that

this

was

onl

y on

e am

ongs

t sev

eral

, som

etim

es “c

onfli

ctin

g”fa

ctor

s.

105.

The

Trib

unal

obs

erve

s, fo

urth

, tha

t the

exe

rcis

e by

the

Pre

side

nt a

nd th

e E

xecu

tive

Dire

ctor

s of

thei

rju

dgm

ent d

id n

ot le

ad in

the

year

s 19

69 to

197

8 to

sys

tem

atic

incr

ease

s eq

ual t

o th

ose

of th

e W

ashi

ngto

n C

PI.

The

Cha

rt s

ubm

itted

by

the

App

lican

ts in

thei

r C

onso

lidat

ed M

emor

andu

m s

how

s th

at o

nly

in 1

974

and

1976

was

ther

e an

exa

ct c

oinc

iden

ce b

etw

een

the

rise

in th

e C

PI a

nd th

e sa

lary

incr

ease

. In

the

othe

r nin

e ye

ars

ther

e w

ere

diffe

renc

es, s

omet

imes

of i

mpo

rtanc

e, w

ith s

alar

y in

crea

ses

exce

edin

g th

e C

PI i

ndex

whe

n th

e

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

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surv

eys

foun

d th

at th

e pa

y of

cer

tain

sta

ff le

vels

was

not

com

petit

ive

with

that

of o

ther

em

ploy

ers.

The

Circ

ular

of 1

973,

for

exam

ple,

sai

d th

at th

e in

crea

ses

“des

igne

d to

mai

ntai

n th

e re

al le

vel o

f sal

arie

s in

the

face

of r

isin

gpr

ices

” ha

d be

en a

dopt

ed “w

ith a

djus

tmen

ts o

f var

ying

am

ount

s to

take

into

acc

ount

the

mar

ket c

ondi

tions

for

the

type

s of

ski

lls e

mpl

oyed

in th

e B

ank

Gro

up.”

106.

The

App

lican

ts d

o no

t den

y th

at s

omet

imes

ther

e w

as a

diff

eren

ce b

etw

een

the

CP

I inc

reas

e an

d th

esa

lary

incr

ease

. The

y as

sert,

how

ever

, tha

t in

all t

hese

cas

es th

e sa

lary

incr

ease

was

at l

east

the

equi

vale

nt o

fth

at in

the

cost

of l

ivin

g an

d th

at “m

aint

enan

ce o

f the

real

val

ue o

f Ban

k co

mpe

nsat

ion

was

the

min

imum

esse

ntia

l”. T

his

inte

rpre

tatio

n is

con

tradi

cted

by

the

fact

that

in 1

969,

197

0, 1

971

and

1973

– a

ccor

ding

to th

esa

me

Cha

rt in

the

Con

solid

ated

Mem

oran

dum

– th

e in

crea

ses

wer

e ta

pere

d fo

r th

e st

aff a

t hig

her l

evel

s, w

hoco

nseq

uent

ly re

ceiv

ed in

crea

ses

belo

w th

e C

PI i

ndex

. Thi

s pr

actic

e of

“tap

erin

g” –

the

exis

tenc

e of

whi

ch th

eA

pplic

ants

reco

gniz

ed –

is b

y its

elf a

suf

ficie

nt b

asis

for

disc

ardi

ng th

e th

esis

of “

the

min

imum

ess

entia

l.”

107.

On

occa

sion

, the

Pre

side

nt a

nd th

e E

xecu

tive

Dire

ctor

s ev

en e

xpre

ssly

opp

osed

a s

alar

y ad

just

men

tco

rres

pond

ing

exac

tly to

the

incr

ease

in th

e C

PI.

In O

ctob

er 1

974,

the

Pre

side

nt in

form

ed th

e st

aff t

hat h

ew

ould

not

be

follo

win

g up

the

requ

est o

f the

Sta

ff A

ssoc

iatio

n fo

r a

supp

lem

enta

ry m

id-y

ear

incr

ease

alth

ough

such

an

incr

ease

had

bee

n gi

ven

in th

e pr

eced

ing

year

bec

ause

of a

par

ticul

arly

ste

ep ri

se in

infla

tion.

The

Pre

side

nt re

cogn

ized

that

ther

e ha

d ag

ain

been

a “s

harp

rise

in p

rice

leve

ls” i

n 19

74, b

ut, h

e ad

ded,

“the

re h

asbe

en a

dra

mat

ic c

hang

e in

the

polit

ical

clim

ate

of th

e w

orld

,” a

nd it

was

pra

ctic

ally

impo

ssib

le to

obt

ain

the

agre

emen

t of t

he E

xecu

tive

Dire

ctor

s fo

r a

sala

ry a

djus

tmen

t at t

hat t

ime.

Eve

n m

ore

perti

nent

is th

eM

emor

andu

m o

f the

Pre

side

nt o

f May

1, 1

975.

In th

is m

emor

andu

m th

e S

taff

Ass

ocia

tion

is d

escr

ibed

as

conc

erne

d “w

ith th

e pe

rcei

ved

diffe

renc

es in

app

roac

hes

to p

erio

dic

sala

ry a

djus

tmen

ts: i

n re

cent

yea

rs b

oth

EE

C a

nd O

EC

D h

ave

gran

ted

at le

ast b

iann

ual a

djus

tmen

ts w

hich

fully

com

pens

ate

for

pric

e le

vel c

hang

es in

net t

erm

s an

d at

all

leve

ls, t

oget

her w

ith fu

rther

per

iodi

c ad

just

men

ts in

tend

ed to

pro

vide

real

inco

me

grow

th.”

The

mem

oran

dum

add

s th

at th

e st

aff i

s al

so d

istu

rbed

by

the

diffe

renc

es b

etw

een

the

Ban

k pr

actic

es a

nd th

eU

nite

d N

atio

ns s

yste

m. T

he la

tter

“pro

vide

s fo

r au

tom

atic

ally

-trig

gere

d co

st o

f liv

ing

adju

stm

ents

for

prof

essi

onal

sta

ff w

hich

com

pens

ate

in n

et te

rms

for

80-9

0% o

f pric

e le

vel c

hang

es a

s th

ey o

ccur

.” Th

em

emor

andu

m a

lso

stat

es th

at “t

he S

taff

Ass

ocia

tion

has

pres

sed

repe

ated

ly a

nd s

trong

ly fo

r th

e in

dexa

tion

ofsa

larie

s w

ith s

ome

form

of a

utom

atic

trig

gerin

g re

late

d ei

ther

to th

e pa

ssag

e of

tim

e or

to a

giv

en p

erce

ntag

eris

e in

the

cost

of l

ivin

g.” T

he P

resi

dent

turn

ed d

own

this

dem

and

for

an a

utom

atic

adj

ustm

ent o

f sal

arie

s to

mee

t the

rise

in p

rices

, sta

ting:

“The

re is

no

sim

ple

form

ula

by w

hich

the

degr

ee o

f com

petit

iven

ess

of a

com

pens

atio

n pa

ckag

e ca

n be

mea

sure

d w

ith p

reci

sion

... T

here

can

be

no s

ubst

itute

for

the

exer

cise

of j

udge

men

t in

dete

rmin

ing

aco

mpe

nsat

ion

pack

age

at a

ny g

iven

tim

e in

rela

tion

to a

ll th

e fa

ctor

s in

volv

ed.”

108.

The

con

side

ratio

ns s

et o

ut a

bove

lead

the

Trib

unal

to c

oncl

ude

that

bet

wee

n 19

68 a

nd 1

979

ther

e di

d no

tex

ist a

ny e

stab

lishe

d an

d co

nsis

tent

pra

ctic

e of

incr

easi

ng s

alar

ies

acro

ss th

e bo

ard

to a

deg

ree

at le

ast e

qual

to th

e in

crea

se in

the

CP

I. Th

e S

taff

Ass

ocia

tion

had,

inde

ed, d

eman

ded

such

a p

olic

y bu

t the

Ban

k ex

pres

sly

refu

sed

it. E

ach

incr

ease

was

dec

ided

in th

e lig

ht o

f the

circ

umst

ance

s of

the

time

and

havi

ng re

gard

to v

ario

usfa

ctor

s am

ong

whi

ch th

e in

crea

se in

the

cost

of l

ivin

g pl

ayed

an

impo

rtant

, but

in n

o w

ay a

dec

isiv

e an

dce

rtain

ly n

ot a

n ex

clus

ive,

role

. The

incr

ease

s w

ere

som

etim

es e

qual

to th

e in

crea

se in

the

CP

I, so

met

imes

grea

ter,

som

etim

es lo

wer

. App

lyin

g by

way

of a

nalo

gy th

e ap

proa

ch o

f the

Inte

rnat

iona

l Cou

rt o

f Jus

tice

one

may

not

e th

at th

e fa

cts

“dis

clos

e so

muc

h un

certa

inty

and

con

tradi

ctio

n, s

o m

uch

fluct

uatio

n an

d di

scre

panc

y...

that

it is

not

pos

sibl

e to

dis

cern

in a

ll th

is a

ny c

onst

ant a

nd u

nifo

rm u

sage

, acc

epte

d as

law

...”

(Asy

lum

cas

e,IC

J R

epor

ts 1

950,

p. 2

77).

109.

The

Trib

unal

ther

efor

e co

nclu

des

that

ther

e di

d no

t exi

st in

197

9, a

t the

tim

e of

alle

ged

non-

obse

rvan

ce o

fth

e co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

of a

ppoi

ntm

ent,

any

deci

sion

or p

ract

ice

to a

utom

atic

ally

incr

ease

sala

ries

to a

t lea

st e

qual

the

rise

in th

e co

st o

f liv

ing

so a

s to

form

par

t of t

he c

ondi

tions

of e

mpl

oym

ent.

From

this

it fo

llow

s th

at th

e Tr

ibun

al n

eed

not c

onsi

der a

noth

er a

rgum

ent a

dvan

ced

by th

e A

pplic

ants

, nam

ely,

that

they

had

agr

eed

to e

nter

the

serv

ice

of th

e B

ank

in th

e ex

pect

atio

n of

a g

uara

ntee

d m

aint

enan

ce o

f the

real

valu

e of

thei

r re

mun

erat

ion,

and

that

the

Ban

k di

d no

t hav

e th

e rig

ht to

dis

appo

int t

his

expe

ctat

ion.

As

alre

ady

stat

ed, n

o pa

rticu

lar i

mpo

rtanc

e ca

n be

atta

ched

to s

uch

subj

ectiv

e co

nsid

erat

ions

. In

any

even

t, th

ere

coul

d

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

have

bee

n no

reas

onab

le e

xpec

tatio

n of

the

mai

nten

ance

of a

dec

isio

n or

pra

ctic

e w

hich

did

not

exi

st.

110.

Acc

ordi

ngly

the

Ban

k w

as fr

ee in

197

9, a

s it

had

been

at a

ny ti

me,

to c

hoos

e th

e m

etho

d w

hich

app

eare

dto

it th

e m

ost a

ppro

pria

te fo

r ac

hiev

ing

the

obje

ctiv

es o

f its

per

sonn

el p

olic

y as

def

ined

by

the

Arti

cles

of

Agr

eem

ent.

The

Kaf

ka R

epor

t rec

omm

ende

d re

cour

se to

a “c

ompa

rato

r” m

etho

d co

nsis

ting

of a

mix

ture

, in

equa

l par

ts, o

f the

pub

lic a

nd p

rivat

e se

ctor

s in

the

Uni

ted

Sta

tes.

In o

rder

to e

nsur

e th

at th

e B

ank

wou

ld b

eab

le to

attr

act h

igh

qual

ity p

erso

nnel

incl

udin

g ca

ndid

ates

from

cou

ntrie

s w

ith h

igh

pay

leve

ls, t

he R

epor

tsu

gges

ted

addi

ng a

pre

miu

m o

f 10%

to th

e le

vels

of r

emun

erat

ion

prod

uced

by

this

met

hod.

On

the

basi

s of

thes

e re

com

men

datio

ns th

e E

xecu

tive

Dire

ctor

s de

cide

d on

May

25,

197

9 to

giv

e a

9.5%

incr

ease

in n

etsa

larie

s ef

fect

ive

Mar

ch 1

, 197

9, e

xpla

inin

g th

at “t

his

is in

line

with

ave

rage

real

pay

incr

ease

s of

the

U.S

.pr

ivat

e se

ctor

com

para

tors

ove

r th

e pa

st y

ear”

. By

a ci

rcul

ar o

f Mar

ch 1

4, 1

980,

the

staf

f was

info

rmed

that

,pe

ndin

g th

e ou

tcom

e of

the

surv

ey c

omm

issi

oned

from

a c

onsu

lting

firm

it h

ad b

een

deci

ded

to a

war

d an

incr

ease

of 8

.3%

, effe

ctiv

e M

arch

1, 1

980,

whi

ch c

ould

be

revi

sed

retro

activ

ely

taki

ng a

ccou

nt o

f the

resu

lts o

fth

e su

rvey

. Thi

s in

crea

se w

as g

rant

ed “i

n th

e lig

ht o

f com

pens

atio

n pa

y m

ovem

ents

and

the

cont

inui

ng h

igh

rate

of i

nfla

tion.

” In

taki

ng th

is d

ecis

ion,

the

Circ

ular

add

ed, “

a nu

mbe

r of f

acto

rs w

ere

take

n in

to a

ccou

nt ..

.G

ener

al in

form

atio

n on

pay

tren

ds in

Ger

man

y an

d Fr

ance

was

mad

e av

aila

ble

to E

xecu

tive

Dire

ctor

s. T

hech

ange

in th

e W

ashi

ngto

n C

PI f

rom

Feb

ruar

y 19

79 to

Feb

ruar

y 19

80 w

as a

lso

pres

ente

d.”

111.

In h

oldi

ng th

at th

e co

nditi

ons

of e

mpl

oym

ent o

f sta

ff m

embe

rs d

id n

ot in

197

9 co

ntai

n an

y ru

le o

f law

rela

ting

to th

e m

etho

d of

adj

ustm

ent o

f sal

arie

s or

to th

e ta

king

into

con

side

ratio

n of

cer

tain

fact

ors

inpr

efer

ence

to o

ther

s, th

e Tr

ibun

al is

not

ass

ertin

g th

at th

e co

nditi

ons

of e

mpl

oym

ent c

onta

in n

o ru

les

wha

tsoe

ver r

egar

ding

sal

ary

adju

stm

ent.

True

, nei

ther

the

lette

rs o

f app

oint

men

t and

acc

epta

nce

nor

the

Arti

cles

of A

gree

men

t, no

r an

y w

ritte

n ru

le o

r reg

ulat

ion,

incl

ude

any

prov

isio

n re

quiri

ng th

e B

ank

as a

mat

ter o

fla

w to

mak

e pe

riodi

c ad

just

men

ts o

f sal

arie

s. H

owev

er, t

he T

ribun

al c

onsi

ders

that

a c

onsi

sten

t pra

ctic

e of

perio

dic

adju

stm

ent h

as b

een

esta

blis

hed,

and

that

the

Ban

k m

akes

thes

e ad

just

men

ts o

ut o

f the

con

vict

ion

that

it is

lega

lly o

blig

ed to

do

so. I

n hi

s M

emor

andu

m to

the

Exe

cutiv

e D

irect

ors

date

d A

pril

19, 1

972,

the

Pre

side

nt w

rote

:

“It is

by

now

our

est

ablis

hed

prac

tice

to re

view

the

staf

f com

pens

atio

n pr

ogra

mm

e an

nual

ly in

ear

ly s

prin

gw

ith a

vie

w to

intro

duci

ng w

hate

ver c

hang

es m

ay b

e ap

prop

riate

effe

ctiv

e M

ay 1

.”

Sin

ce th

en, t

his

prac

tice

has

been

affi

rmed

yea

r by

yea

r, a

nd th

e in

crea

ses

adop

ted

in 1

979

and

1980

, as

wel

las

thos

e de

cide

d up

on s

ince

the

filin

g of

pro

ceed

ings

in th

e pr

esen

t cas

e, h

ave

conf

irmed

it. T

heci

rcum

stan

ces

with

in w

hich

cer

tain

App

lican

ts h

ave

been

recr

uite

d an

d, in

par

ticul

ar, c

erta

in in

form

atio

npr

ovid

ed to

them

at t

he ti

me

of th

eir

appo

intm

ent f

urth

er c

onfir

m th

e ex

iste

nce

of th

is o

blig

atio

n.

112.

The

Trib

unal

con

side

rs in

con

sequ

ence

that

the

Ban

k is

obl

iged

to c

arry

out

per

iodi

c re

view

s of

sal

arie

s,ta

king

into

acc

ount

var

ious

rele

vant

fact

ors.

The

Ban

k is

und

er n

o du

ty to

adj

ust s

alar

ies

auto

mat

ical

ly to

incr

ease

s in

the

cost

of l

ivin

g an

d it

reta

ins

a m

easu

re o

f dis

cret

ion

in th

is re

gard

. Thi

s do

es n

ot m

ean

that

the

rises

in th

e co

st o

f liv

ing

in a

per

iod

of in

flatio

n co

nstit

ute

a fa

ctor

that

can

be

igno

red

or d

isre

gard

ed in

the

exer

cise

of t

hat d

iscr

etio

n. O

n th

e co

ntra

ry, t

he e

stab

lishe

d pr

actic

e, a

nd s

tate

men

ts c

onfir

min

g th

at p

ract

ice,

have

cre

ated

a le

gal o

blig

atio

n to

mak

e pe

riodi

c ad

just

men

ts re

flect

ing

chan

ges

in th

e co

st o

f liv

ing

and

othe

rfa

ctor

s. In

the

opin

ion

of th

e Tr

ibun

al s

uch

an o

blig

atio

n is

a fu

ndam

enta

l ele

men

t in

the

App

lican

ts' c

ondi

tions

of e

mpl

oym

ent w

hich

the

Ban

k do

es n

ot h

ave

the

right

to c

hang

e un

ilate

rally

. In

this

resp

ect,

the

Trib

unal

take

spa

rticu

lar n

ote

of th

e st

atem

ent m

ade

in th

e R

espo

nden

t's J

oint

Mem

oran

dum

to th

e ef

fect

that

:

“It is

stil

l the

inte

ntio

n of

the

Ban

k to

adj

ust s

alar

ies

perio

dica

lly to

refle

ct c

hang

es in

var

ious

fact

ors,

incl

udin

g co

st o

f liv

ing.

”

113.

The

dec

isio

ns n

ow c

onte

sted

bef

ore

the

Trib

unal

are

fully

in a

ccor

danc

e w

ith th

e ob

ligat

ion

of th

e B

ank.

The

Trib

unal

con

clud

es th

at, i

n ad

optin

g th

e de

cisi

ons

whi

ch th

e si

x A

pplic

ants

con

test

, the

Ban

k ha

s no

t fai

led

to o

bser

ve th

e co

ntra

cts

of e

mpl

oym

ent o

r ter

ms

of a

ppoi

ntm

ent o

f the

App

lican

ts.

Dec

isio

ns

http

://ln

web

90.w

orld

bank

.org

/crn

/wbt

/wbt

web

site

.nsf

/(res

ults

web

)/470

F6C

6098

A11

FDF8

5256

9ED

006B

B87

7[5/

20/2

014

11:5

4:49

AM

]

DE

CIS

ION

:

For t

hese

reas

ons,

the

Trib

unal

una

nim

ousl

y de

cide

s to

reje

ct th

e ap

plic

atio

ns.

E. J

imen

ez d

e A

rech

aga

/S/ E

duar

do J

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.C.,

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5, 1

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