Al-Dulimi and Montana Management Inc. v. Switzerland: Norm conflict between UNSC Resolution and ECHR?

Guest post by Cedric De Koker, Phd Researcher, IRCP, Ghent University.

On 21 June 2016, the Grand Chamber of the European Court of Human Rights (ECtHR) rendered its judgment in the case of Al-Dulimi and Montana Management Inc. v. Switzerland (no. 5809/08). At issue was a potential norm conflict between the obligations stemming from a United Nations Security Council (UNSC) Resolution and the protections offered by the European Convention on Human Rights (ECHR), a recurrent theme in the Strasbourg jurisprudence (see amongst others the Al Jedda and Nada-judgments).

Background

In the present case, Switzerland was bound to implement Resolution 1483 of 22 May 2003, which was adopted in the wake of the US/UK-led invasion of Iraq and the overthrow of the Saddam Hussein’s Ba’athist regime. Cognizant of the need for financial support for the reconstruction effort in Post-war Iraq, the Resolution had inter alia required Member States to freeze without delay and immediately transfer to the Development Fund for Iraq:

(a) funds or other financial assets or economic resources of the previous Government of Iraq or its state bodies, corporations, or agencies, located outside Iraq as of the date of this resolution, or

(b) funds or other financial assets or economic resources that have been removed from Iraq, or acquired, by Saddam Hussein or other senior officials of the former Iraqi regime and their immediate family members, including entities owned or controlled, directly or indirectly, by them or by persons acting on their behalf or at their direction (see para. 23)

To guide the implementation of the Resolution, a Sanctions Committee was created by the Security Council for the purpose of identifying and listing the individuals and entities that could be targeted by the economic sanctions. Al-Dulimi, the first applicant and former head of finance of the Iraqi secret service, had figured on the list since 26 April 2004, as did the second applicant, Montana Magament Inc., a company directed by Al-Dulimi. As a result, after translating the Resolutions into domestic legal instruments, Switzerland had started a confiscation procedure with regard to the applicants’ assets, ordering the appropriation of the applicants’ funds deposited in Swiss Banks in three decisions of the Federal Department for Economic Affairs.

In an attempt to halt the confiscation procedure, the applicants lodged separate administrative law appeals with the Swiss Federal Tribunal, arguing amongst others that the procedure leading to the addition of their names to the list of individuals and entities targeted by economic sanctions had breached the basic procedural safeguards enshrined in amongst others Article 6 and 13 ECHR. Yet, their complaints were rejected and the applicants subsequently turned to the ECHR. Ultimately, deciding on appeal, the Grand Chamber found a violation of Article 6 (1) ECHR by 15 votes to 2 because it believed that Switzerland did not provide meaningful judicial review of the applicants’ listing by the Sanctions Committee of the Security Council. The large number of judges deciding in favour of a breach of the Convention gives the impression of a more or less united Court. However, as Marko Milanovic has noted in his Ejil:Talk!-blogpost on the judgment, ‘the size of the majority belies the amount of disagreement among the judges’: 6 of the 15 judges followed a different line of reasoning than the one the Grand Chamber ultimately adopted to come to a violation of Article 6 ECHR. The judgment merits further examination and in what follows, we will take a closer look at the reasoning of the Grand Chamber with regard to the key issues of the case. Due to space constraints, the separate opinions, which are certainly worth reading, will be mentioned only in passing.

Existence of a norm conflict and legal effects of Article 103 UN Charter

Both at the admissibility and merits stage, there was much discussion about the legal effects of Article 103 UN Charter and the relationship between obligations stemming from UNSC Resolutions and those imposed by the ECHR. As a rule of precedence, Article 103 UN Charter stipulates that in case of conflict, obligations derived from Charter provisions and UNSC Resolutions will prevail over obligations stemming from other international agreements, such as the ECHR. Therefore, before the Grand Chamber could pronounce on whether the Swiss government had committed a violation of Article 6 ECHR, it had to determine whether a norm conflict existed and thus whether or not primacy should be accorded to the obligations under Resolution 1483.

On this point, there was clear disagreement between the parties. The applicants argued that there was no real conflict in the present case, for the obligations could be interpreted so as to co-exist. After all, as the Resolution 1483 did not address the right to a fair trial or limited the access to a court,  they believed that there was nothing to prevent the Swiss Government from providing meaningful judicial review of the applicants’ listing by the Sanctions Committee of the Security Council pursuant to Article 6 ECHR. In any case, they rejected the idea that the UNSC could order States to infringe human rights and pointed to the preamble of the UN Charter which lays out the United Nations’ important role in promoting and encouraging respect for human rights to support this view. The Swiss Government, as well as the third-party interveners (the United Kingdom and France), on the other hand, argued that there could not be any doubt as to the existence of a clear and unavoidable norm conflict. Although they admitted that the UN Resolutions did not explicitly prohibit the domestic review of the implementation measures, they emphasized that allowing for such reviews would be difficult to reconcile with the ordinary meaning to be given to the terms of Resolution 1483 and with its object and purpose.

After weighing the arguments of both parties, the eight judges holding the pen of the Grand Chamber’s judgment eventually sided with the applicants here. Revisiting earlier jurisprudence of the ECtHR (in particular the judgments in the earlier mentioned Al Jedda and Nada cases), these judges noted that unless expressly stated otherwise, the Security Council does not intend to impose any obligation on Member States to breach fundamental principles of human rights. Therefore, in the absence of any clear or explicit wording excluding or limiting respect for human rights in the context of the implementation of sanctions at national level, the ECtHR would as a matter of principle always interpret the resolution in question harmoniously so as to avoid any conflict. Looking at the text and scope of Resolution 1483 and stressing the importance of access to a court in a democratic society, they ultimately found that judicial review of the impugned measures was not expressis verbis prohibited and therefore concluded:

146. (…) In view of the seriousness of the consequences for the Convention rights of those persons, where a resolution such as that in the present case, namely Resolution 1483, does not contain any clear or explicit wording excluding the possibility of judicial supervision of the measures taken for its implementation, it must always be understood as authorising the courts of the respondent State to exercise sufficient scrutiny so that any arbitrariness can be avoided. (…)

147. In those circumstances, and to the extent that Article 6, §1 of the Convention is at stake, the Courts finds that Switzerland was not faced in the present case with a real conflict of obligations capable of engaging the primacy rule in Article 103 of the UN Charter.

The finding that there was no real conflict of obligations capable of engaging the primacy rule in Article 103 of the UN Charter proved controversial – only Judge Sicilianos stated to be in full agreement with the reasoning of the judgment in his separate opinions, while the other judges disagreed with the majority on this point and resorted to another instrument of norm conflict resolution. Nevertheless, the conclusion reached in this regard was crucial to the Grand chamber’s reasoning, as it paved the way for the examination of Article 6 ECHR and ‘rendered nugatory the question whether the equivalent protection test should be applied’, which would have required the judges to examine whether the presumption that States’ measures implementing obligations arising out of their membership in an international organization (in casu the UN) can be presumed to be in conformity with the ECHR if that organization protects fundamental rights on an equivalent or comparable level as the ECHR itself was rebutted in the present case.

Violation of Article 6 ECHR

Having found that no conflict existed, the majority proceeded to examine whether a violation of the ECHR had occurred. In this regard, they reiterated the ECtHR’s settled case law that ‘the right to a fair hearing, as guaranteed by Article 6, §1 of the Convention, must be construed in the light of the rule of law, which requires that all litigants should have an effective judicial remedy enabling them to assert their civil rights’ and emphasized the prominent place of the right to a fair trial in a democratic society. At the same time, they noted that the rights laid down in the mentioned provision are not absolute and could be subject to limitations on the condition that limitations would pursue a legitimate aim and that the measures taken were proportionate. In this regard, the Court agreed with the Swiss government’s claim that ensuring the efficient implementation at the domestic level of the obligations stemming from a UNSC resolution adopted under Chapter VII could be considered a legitimate aim and therefore focused mainly on the proportionality analysis. Pointing to amongst others the severe criticism leveled at the UNSC Sanctions regime and the importance of judicial review for the rule of law, the judges ultimately decided that while the Swiss Federal Court had conducted a limited review of the impugned measures – the Federal Court had verified that the applicants’ names actually appeared on the lists drawn up by the Sanctions Committee and that the assets concerned belonged to them – this was not sufficient to comply with Article 6, §1 ECHR. For this to be the case, the majority stated that the Swiss’ courts should have ensured that the sanctions were not imposed arbitrarily. In their words,

150. Turning to the precise obligations imposed by the Convention on Switzerland in the present case, the Court accepts that the Federal Court was unable to rule on the merits or appropriateness of the measures entailed by the listing of the applicants. (…) However, before taking the above-mentioned measures, the Swiss authorities had a duty to ensure that the listing was not arbitrary.

Although the judges did not exactly elaborate on when the listing should be considered arbitrary or on how extensive the review of the arbitrariness must be, they stated that this at the least required States to obtain sufficiently precise information in order to exercise to requisite scrutiny in respect of any substantiated and tenable allegation made by listed persons to the effect that their listing is arbitrary, amongst others by allowing the applicants to submit appropriate evidence to a court and by pro-actively seeking such information from the Sanctions Committee (if need be, through a confidential procedure) (see paras 147 and 151). Because the Swiss Federal Court had neglected to take these steps, the majority voted in favor of a violation of Article 6, §1 ECHR. Whereas the other judges had been skeptical in their separate opinions of the decision of the judges holding the pen of the Grand Chamber’s judgment with regard to the existence of a norm conflict, all but two agreed with the majority on this point. In her partly dissenting opinion Judge Ziemele stated to be in agreement with the reading of Resolution 1483 and the arbitrariness standard set forth by the Court, but disagreed with the conclusion that the Swiss Federal Court did not exercise such scrutiny in the circumstances of the case because she believed the majority had not sufficiently appreciated what exactly was done by the Swiss Authorities. Judge Nussberger, for her part, could not accept that a violation had occurred because she believed that the Swiss authorities were correct in interpreting the obligations arising out of the Convention and out of the binding resolutions of the Security Council as conflicting and that they appropriately applied Article 103 UN Charter to give priority to UN law.

Final observations

Now, what to think of the Grand Chamber’s judgment in the present case? To my mind, several remarks can be made. I agree with judge Keller, who stated in her concurring opinion that it has the advantage of allowing the Court to avoid the difficult issues raised by a real conflict of obligations and to eschew the handing down of an ultimate answer concerning Article 103 of the UN Charter and its relationship to the Convention. Yet, at the same time, the clear downside is that the judges took some interpretative liberties in seeking to harmonize the obligations under the two instruments at stake and came to a conclusion which was arguably not supported by either the text or the purpose of Resolution 1483.

After all, the UNSC wanted to introduce a swift and uniform confiscation procedure because of the pressing need for resources to fund the reconstruction effort and to allay the humanitarian crisis in Iraq, which constituted a threat to peace and security under Article 39 UN Charter. For this reason, the UNSC had left very little discretion for States and had used unambiguous terms such as ‘immediately’ and ‘without delay’, as this would ensure that the financial and economic assets that had been removed from Iraq could quickly be identified and transferred to the Iraq Development Fund. It is difficult to see how one could reconcile the domestic review of the implementation of the sanctions with the required promptness of the confiscation procedure, as judicial review – even when limited to conducting a arbitrariness-test – inevitably lengthens the entire process. The fact that the assets of the two applicants in the present case had still not been transferred to the Development Fund for Iraq at the time of the judgment is a case in point. Similarly, the idea of domestic review, the procedures of which will unavoidably differ from one State to another, seems inapposite to the lack of manoeuvring space the Resolution accords to States, as it is indicative of the willingness of the UNSC to introduce a swift and uniform confiscation procedure. The position that no norm conflict existed is therefore, at least to me, not convincing.

Yet, it is understandable from the perspective of the judges speaking for the Grand Chamber. Had an unavoidable norm conflict been found, the ECtHR would have had only two options. The first option would have been to acknowledge the primacy of Charter obligations pursuant to Article 103 UN Charter and renounce the power to test, albeit indirectly, the acts of Member States pursuant to Resolution 1438 (or any other sanction regime) against the provisions of the ECHR. The second would have consisted in the ECtHR explicitly opposing the UNSC and, in spite of Article 103 UN Charter, according primacy to the human rights protections over the obligations stemming from Resolution 1483, thus effectively placing the ECHR outside of the international legal framework. Without a doubt, both these outcomes would have had far-reaching and unsatisfactory consequences. With the current judgment, the majority, therefore, sought a pragmatic solution that on the one hand acknowledged the binding nature of UNSC Resolutions, while at the same time preserving at least a minimum of human rights protection because the UN sanction mechanism has clear human rights implications.

One thought on “Al-Dulimi and Montana Management Inc. v. Switzerland: Norm conflict between UNSC Resolution and ECHR?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s