25 November 2011

The Seabed Disputes Chamber clarified the meaning of joint and several liability (but also raised new questions)

The principle of joint liability in undeveloped in international law. Though some treaties refer to it, and several scholarly articles that have recognized its importance for situations where multiple actors cause injury, the scope and contents of the principle remain uncertain. It is therefore of some importance that the Advisory Opinion of the Seabed Disputes Chamber of ITLOS on Responsibilities and Obligations of States sponsoring persons and entities with respect to activities in the Area (1 February 2011) discussed the principle. In his presentation at the SHARES Seminar on Shared Responsibility in Environmental Law, held at ACIL on 7 November 2011, Judge Treves provided further insight into these, until now somewhat neglected, aspects of the Opinion.

The question of liability for activities on the deep seabed is bound to become of increasing significance. Last July, the Seabed Council approved the plans of work for exploration for polymetallic nodules and polymetallic sulphides in the international deep seabed Area submitted by four entities (see: Press release). In all cases of exploration, more than one actor will be involved (the Authority, the entity carrying out the exploration and the sponsoring state). Liability in case of damage thus also may involve multiple actors.

The Law of the Sea Convention does envisage the possibility of joint and several responsibility in this context. Article 139 stipulates that ‘damage caused by the failure of a State Party or international organization to carry out its responsibilities under this Part shall entail liability; States Parties or international organizations acting together shall bear joint and several liability’.

The Opinion clarifies a few aspects of joint and several liability, while at the same time raising new questions. Three particularly noteworthy issues relate to 1) the requirement of ‘common damage’, 2) the requirement of concerted action, and 3) the possibility of joint liability between states and private parties.

As to the first point, the Seabed Chamber stated that ‘joint and several liability’ arises when the actors involved contribute to the same damage. It said that joint and several liability arises ‘where different entities have contributed to the same damage so that full reparation can be claimed from all or any of them.’ (para 201).

Is it not immediately clear what the source of this definition is. Neither the Law of the Sea Convention nor subsequent instruments adopted by the Seabed Authority expressly include the requirement of ‘common damage’. But, also given the type of activities on which Article 139 sees, it indeed seems to be implicit in Article 139 that when more actors are involved, they only will be jointly liable if they have contributed to a common damage.

The definition of joint liability in terms of common damage conforms to the meaning of the term ‘joint and several liability’ in the domestic law of many states and also otherwise rests on good grounds. It is precisely the fact that two or more actors contribute to a single damage (or injury), and that it cannot be determined who contributed what part, that leads to the need to allow third parties to bring a claim for relief against all responsible actors, and thus to the need for joint responsibility.

It is noteworthy that this definition differs from the International Law Commission’s concept of plurality of responsible states, which is based on the same wrongful act, not on the same damage (cf. Article 47 ILC Draft Articles on Responsibility of States). Even though a wrongful act will involve injury, and even though injury will be the starting point of analysis for any question of reparation, there is a fundamental difference between the approaches. Common damage need not necessarily involve a single wrongful act and, moreover, it is not clear that the very problem that justifies resort to joint liability (impossibility to apportion contribution to damage) applies to the same extent in case of contribution to the same wrongful act. Indeed, Article 47 raises many questions that need to be further explored.

A second point to highlight is that the Law of the Sea Convention envisaged joint liability if states and international organizations are ‘acting together’. It is not immediately clear what this means. Does this require concerted acts (leading, as we phrased it in the SHARES Concept Paper, ‘cooperative responsibility’), or can it also refer to two states or organizations acting independently from each other (leading to what we called ‘cumulative responsibility’)? On the basis of the normal meaning of the words used, the former seems the more plausible interpretation . Yet , the Chamber apparently accepted the possibility that two sponsoring states can be jointly and severally liable, even when they were not involved in a concerted action. The Chamber said that ‘article 139, paragraph 2, of the Convention and related instruments dealing with sponsorship do not differentiate between single and multiple sponsorship. It should be recalled that in principle the liability of a sponsoring state is based on a failure to take all necessary and appropriate measures to secure effective compliance by persons whom they have sponsored. Accordingly, the Chamber takes the position that, in the event of multiple sponsorship, each of these sponsoring states can be liable for failure to take all necessary and appropriate measures. If so, the liability is joint and several unless otherwise provided in the Regulations issued by the Authority.’ (para 192).

From the perspective of protection of victims, this broad approach (joint responsibility also in case of states not acting in concert) may make sense. But it is not immediately clear what the basis of such a principle is. One possibility is to read the words ‘acting together’ in Article 139 broadly, and include cases of non-concerted action. Such interpretation could also be inspired by the use of the term in domestic law (and given the dominant meaning of the term in domestic law, perhaps even as the ordinary meaning of the term). Another possibility is that this meaning of joint liability would reflect a more general principle of (international law), operating outside the express terms of Article 139. This was indeed suggested by Judge Simma in his Separate Opinion in the Oil Platforms Case, who suggested that where two or more states are subjected to identical obligations and cause a common damage, they are jointly and severally liable. However, this latter interpretation would be far reaching, in particular when large numbers of actors are subject to, and fail to comply with, identical obligations. It certainly is not a settled issue that as a matter of general international law if such states fail to comply with such obligations, and contribute to a common damage, joint and several liability is triggered. International law remains based on the principle that states are responsible only for damage caused by their own wrongful acts and omissions. It may be that the specific situation of sponsorship is sui generis and that it is this specific situation that brought the Chamber to its conclusion. But the text of the Advisory Opinion may have opened a door and it requires further thought whether that door should be left open.

A third issue raised by the Advisory Opinion is the possibility of joint liability between states and contractors. Even though (sponsoring) states can be liable (jointly or not), the actual damage will be caused by contractors, not states. The Convention (in Article 22 of Annex 3) does recognize that not only states, or the Authority, but also contractors can be liable ‘for any damage arising out of wrongful acts in the conduct of its operations’. The question is whether the liability of contractors and states can be joint. This is a matter of broader significance for international environmental law. The SHARES seminar on international environmental law made clear that most cases actual damage will be caused not by states but by private actors, and the question how liability of both actors is linked becomes relevant.

The Chamber said that Article 139 of the Convention does not provide for joint and several liability between the sponsoring state and the contractor. It reasoned that ‘the liability of the sponsoring State arises from its own failure to carry out its responsibilities, whereas the contractor’s liability arises from its own non-compliance. Both forms of liability exist in parallel’ and that while ‘the liability of the sponsoring State depends on the occurrence of damage resulting from the failure of the sponsored contractor, […] this does not make the sponsoring State responsible for the damage caused by the sponsored contractor’ (para 204).

While this construction is not surprising and probably in line with the intention of the drafters, it might be argued that if joint and several liability of two sponsoring states can be based on two independent failures to take appropriate measures, that could also not apply to independent wrongdoing by states and private actors. It is true that the Convention does not provide for this, but neither does it expressly provide for joint and several liability of independently acting multiple sponsoring states (unless we adopt a broad interpretation of ‘acting together’). The interpretative room assumed by the Chamber in interpreting Article 139 may not need to stop there.

The main argument against accepting joint and several liability of sponsoring states and the contractor is that the liability is governed by different legal orders – the liability of the contractor being relegated (as normally is done with international provisions on liability of private actors) to the domestic level. But the situation is not at all clear-cut here.

However, the Convention (in Article 22 of Annex 3) does recognize that not only states, or the Authority, but also contractors can be liable  ‘for any damage arising out of wrongful acts in the conduct of its operations’. This does not appear to refer to liability under national, but under international law. Moreover, under certain conditions the Seabed Disputes Chamber can have jurisdiction over disputes involving private parties (Article 187). There thus might well be room to consider further the possibility and desirability of joint liability between states and contractors who contribute to the same damage.

A report of the SHARES seminar on Shared Responsibility in International Environmental Law, including a summary of the discussion on the presentation by Judge Treves, will be published on this site shortly.

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