Respondent Memorial 2012

7/29/2019 Respondent Memorial 2012

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TEAM CODE: C

IN THE INTERNATIONAL COURT OF JUSTICE

LA COUR INTERNATIONALE DE JUSTICE

AT THE PEACE PALACE,

THE HAGUE, NETHERLANDS

GENERAL LIST NO

YEAR 2012

DIFFERENCES BETWEEN THE STATES CONCERNING THE ECONOMIC AND TAXATION

POLICIES

13TH

D.M. HARISH MEMORIAL

INTERNATIONAL MOOT COURT COMPETITION

2012

REPUBLIC OF AMITI / REPUBLIC OF DARSHINI

(THE APPLICANT STATE) (THE RESPONDENT STATE)

SUBMITTED IN THE REGISTRY OF THE COURT

MEMORIAL FOR THE RESPONDENT

DARSHINI



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LIST OF ABBREVIATIONS I

INDEX OF AUTHORITIES II

STATEMENT OF JURISDICTION X

STATEMENT OF FACTS XI

QUESTIONS PRESENTED XIV

SUMMARY OF ARGUMENTS XV

BODY OF ARGUMENTS

1. TTHHEE AACCTTSS OOFF TTHHEE SSTTAATTEE OOFF DDAARRSSHHIINNII AARREE IINN AACCCCOORRDDAANNCCEE WWIITTHH

BBOOTTHH IINNTTEERRNNAATTIIOONNAALL LLAAWW AASS WWEELLLL AASS IITTSS TTRREEAATTYY OOBBLLIIGGAATTIIOONNSS

1.1 THE PRESENT CLAIM IS INADMISSIBLE DUE TO THE EXHAUSTION OF

LOCAL REMEDIES RULE

1

1.2 THE STATE OF DARSHINI HAS NOT COMMITTED ANY WRONGFUL

ACT UNDER INTERNATIONAL LAW

1, 2

1.3 STATEMENTS BY THE PRESIDENT AND THE HEAD OF THE

DEMOCRATIC PARTY DO NOT INCUR ANY INTERNATIONAL

RESPONSIBILITY.

2

1.4 I N A RGUENDO, THE STATE OF DARSHINI IS ENTITLED TO

INVALIDATE A TREATY DUE TO CONSTITUTIONAL CONSTRAINTS

3

1.5 I N A RGUENDO, THE TREATY VIOLATION IS PRECLUDED DUE TO THE

CIRCUMSTANCE OF ‘NECESSITY’

4

1.6 LOWER COURT DECISION AND THE ECONOMIC POLICIES OF

DARSHINI DO NOT AMOUNT TO DE FACTO ECONOMIC SANCTIONS

AGAINST THE STATE OF AMITI OR ANY OTHER STATE IN THE

VIPULIAN ECONOMIC UNION

5

1.6.1 The Current claim is not maintainable at the ICJ 5

1.6.2 In Arguendo, The Lower Court Decision and the Economic Policies of 6



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Darshini do not amount to de facto Economic Sanctions against the

State of Amiti

1.7 THE LOWER COURT DECISIONS AND ECONOMIC POLICIES DO NOT

AMOUNT TO AGGRESSION OR USE OF FORCE UNDER CUSTOMARY

INTERNATIONAL LAW

7

1.8 THE ECONOMIC POLICIES OF DARSHINI DO NOT INTERFERE IN THE

INTERNAL AFFAIRS OF AMITI.

8

1.9 THE ECONOMIC POLICIES OF DARSHINI ARE NOT IN VIOLATION OF

CLAUSE C OF THE VIPULIAN ECONOMIC UNION CHARTER

9

1.9.1 The State of Amiti cannot invoke the responsibility of the state of

Darshini for violations of the Vipulian Economic Treaty

9

1.9.2 In Arguendo, The provisions of Clause C of the Vipulian Economic

Charter have not been violated.

10

2 AAMMIITTII IISS RREEQQUUIIRREEDD TTOO PPRROOVVIIDDEE TTHHEE IINNFFOORRMMAATTIIOONN RREEQQUUEESSTTEEDD BBYY

DDAARRSSHHIINNII IINN AACCCCOORRDDAANNCCEE WWIITTHH IITTSS IINNTTEERRNNAATTIIOONNAALL OOBBLLIIGGAATTIIOONNSS

2.1 AMITI IS REQUIRED TO PROVIDE INFORMATION IN ACCORDANCE

WITH THE VIPULIAN ECONOMY CHARTER.

11

2.1.1 The Vipulian Economy Charter is a treaty adopted by the Vipulian

Economy which all member states are required to abide by

11

2.1.2 Amiti is required to provide Darshini information in accordance with

clause E of the Charter of the Vipulian Economic Union.

11

2.1.3 Amiti is required to provide Darshini information in accordance with

clause B of the Charter of the Vipulian Economic Union.

12

2.2 THE RIGHT TO PRIVACY IS NOT PROTECTED BY THE VIPULIAN

ECONOMIC UNION CHARTER.

13

2.3 IN ARGUENDO, THE INFORMATION REQUIRED BY DARSHINI DOES

NOT INTERFERE WITH THE RIGHT TO PRIVACY

14

2.3.1 Stage one of the Determination process

A. THE APPLICANT HAS A BURDEN OF PROOF TO CHARACTERIZE

THE R IGHT IT SEEKS TO PROTECT A ND ADVANCE IT BEFORE

THE COURT

B. I N ARGUENDO, THE R IGHT I N QUESTION IS NOT PROTECTED

14



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2.3.2 Stage Two of the Determination process

A. I N ARGUENDO, IF THE R IGHT I N QUESTION IS PROTECTED THERE

IS NO I NTERFERENCE WITH THE R IGHT

B. ASSUMING WITHOUT CONCEDING IF THERE HAS BEEN

I NTERFERENCE WITH THE R IGHT THE I NTERFERENCE IS

JUSTIFIED

a. The information requested for is in accordance with law

b. The Information requested for pursues a legitimate aim

c. The information requested for is necessary in a

democratic society

16

2.4 ALTERNATIVELY AMITI IS TO REQUIRED TO PROVIDE INFORMATION

TO DARSHINI IN PURSUANCE OF THE DOUBLE TAX AVOIDANCE

AGREEMENT

19

2.5 AMITI CANNOT INVOKE PROVISIONS OF ITS B ANKING R EGULATION

A ND S ECRECY ACT AS A JUSTIFICATION FOR NOT EXCHANGING

INFORMATION WITH DARSHINI

20

PRAYER XVI





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AARRTTIICCLLEESS

1. Adam Winkler, Just Sanctions, 21 Human Rights Quarterly (1999) 7

2. Balassa,В

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Framework For Global Property Law, 10 Indiana Journal of Global legal

studies,(2003)

13

5. David Cortright & George A. Lopez, The Sanctions Decade, (2000) 6

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9

7. David Brown , Making Room For Sexual Orientation And Gender Identity In

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13

8. Elias Davidsson, Towards a Definition of Economic Sanctions, 2003 6

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9

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9

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7

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Regional Separatism

10

14. Mary LaFrance & Gail H. Cline , Identical Cousins?: On The Road With

Dilution And The Right Of Publicity, 24 Santa Clara Computer & High

Technology Law Journal 641, (2008)

13

15. Maziar Jamnejad & Michael Wood, The Principle Of Non-Intervention, 9



IINNDDEEXX OOFF AAUUTTHHOORRIITTIIEESS MMEEMMOORRIIAALL OONN BBEEHHAALLFF OOFF RREESSPPOONNDDEENNTT

22(2) Leiden Journal of Intl Law, (2009)

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OECD Model Tax Convention – Current Points of Difference and Recent

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19

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41 International & Comparative Law Quarterly,1992)

7

19. Oscar Schachter, In Defense Of International Rules On The Use Of Force,

53 University of Chicago Law Review,(1986)

8

20. P Groenewegen ,Distributional and Allocational Effects of Tax

Avoidance,(Australian Tax Research Foundation, (1984)

18

21. Pamela Stephens , Applying Human Rights Norms To Climate Change: The

Elusive Remedy,21 Colorado Journal of Int'l Environmental Law & Policy

49,( 2010)

14

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Journal of Transnational Law, (1995)

9

23. R.T Dalimov, The Dynamics Of The Trade Creation And Diversion Effects

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10

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Monitoring In The Workplace,32 Georgia Law Review, (1998)

15

BOOKS AND REPORTS

1. A NTHONY AUST, MODERN TREATY LAW A ND PRACTICE (2007) 7

2. A NTONIO CASSESSE, THE CURRENT LEGAL REGULATION OF THE USE OF

FORCE(1986)8

3. ALBERICO GENTILI, DE IURE BELLI, LIBRI TRES(1612, reprinted Oxford,

Clarendon Press, 1933)

4

4. BALTHAZARIS AYALAE, DE JURE ET OFFICIIS BELLICIS ET DISCIPLINA

MILITARI, LIBRI TRES(1582 reprinted Washington, Carnegie Institution,

1912)

4

5. BRUNO SIMMA, THE CHARTER OF THE U NITED NATIONS-A 6

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COMMENTARY(1995)

6. C. F. AMERASINGHE, LOCAL R EMEDIES IN I NTERNATIONAL LAW(2004) 1

7. C. WOLFF, JUS GENTIUM METHODO SCIENTIFICA PERTRACTATUM(1764,

reprinted Oxford, Clarendon Press, 1934)

4

8. DAVID A. R EIDY, MORTIMER N. S. SELLERS, U NIVERSAL HUMAN R IGHTS:

MORAL ORDER I N A DIVIDED WORLD(2005)

13

9. DAVID ALLEN BALDWIN, ECONOMIC STATECRAFT (1985) 8

10. DAVID HARRIS, CASES AND MATERIALS ON I NTERNATIONAL LAW (2011) 20

11. EMIIRECH DE VATTEL, LE DROIT DES GENS OU PRINCIPES DE LA LOI

NATURELLE(1758 reprinted Washington, Carnegie Institution, 1916)

4

12. FRANCIS G. JACOBS, THE EUROPEAN CONVENTION O N HUMAN R IGHTS(1975) 14

13. GARY CLYDE HUFBAUER , ECONOMIC SANCTIONS R ECONSIDERED( 2007) 6

14. HUGO GROTIUS, DE JURE BELLI AC PACIS, LIBRI TRES(1646, reprinted

Oxford, Clarendon Press, 1925)

4

15. I.A SHEARER , STARKES I NTERNATIONAL LAW(1994) 13

16. IAN BROWNLIE, PRINCIPLES OF I NTERNATIONAL LAW(2008) 15

17. I L. OPPENHEIM, I NTERNATIONAL LAW: A TREATISE (8th Ed. 1955) 1, 3

18. L OPPENHEIM EDITED BY SIR R OBERT JENNINGS & SIR ARTHUR WATTS,

OPPENHEIMS I NTERNATIONAL LAW, VOLUME 1 PEACE, PARTS 1 (2005)

8, 9

19. LARRY J. SIEGEL , CRIMINOLOGY(2004), 12

20. JAMES CRAWFORD ILC’S ARTICLES O N STATE R ESPONSIBILITY –

I NTRODUCTION TEXT AND COMMENTARY( 2001)

9, 10

21. K AREN DAVIES, U NDERSTANDING EUROPEAN U NION LAW(2003) 10

22. K ATHLEEN MAGUIRE, SOURCEBOOK OF CRIMINAL JUSTICE STATISTICS (1995) 20

23. LORD MC NAIR , I NTERNATIONAL LAW OPINIONS(1956) 7

24. MARGARET P. DOXEY, I NTERNATIONAL SANCTIONS IN CONTEMPORARY

PERSPECTIVE(1996)

6, 7

25. MICHAEL IMBER & TYLL VAN GEEL, EDUCATION LAW (2010) 18

26. NICKEL JAMES, HUMAN R IGHTS: THE STANFORD E NCYCLOPEDIA OF

PHILOSOPHY(2010)

13

27. NOWAK , UN COVENANT ON CIVIL AND POLITICAL R IGHTS: CCPR

COMMENTARY(1993)

14,

15

28. OECD COMMITTEE O N FISCAL AFFAIRS ,OECD MODEL TAX CONVENTION 19

DD..MM HHAARRIISSHH MMEEMMOORRIIAALL IINNTTEERRNNAATTIIOONNAALL MMOOOOTT CCOOUURRTT CCOOMMPPEETTIITTIIOONN 22001122 IIVV

http://www.flipkart.com/author/david-allen-baldwin















O N I NCOME A ND CAPITAL A COMMENTARY(2008)

29. R EUVEN S. AVI-YONAH, I NTERNATIONAL TAX AS I NTERNATIONAL

LAW(2007)

19

30. R ICHARD LILLICH, HUMAN R IGHTS I N I NTERNATIONAL LAW, LEGAL A NDPOLICY ISSUES (1984)

14

31. R ONALD C. K EITH AND ZHIQIU LIN, NEW CRIME I N CHINA: PUBLIC ORDER

A ND HUMAN R IGHTS(2006)

18

32. R ONALD C. K EITH & ZHIQIU LIN, NEW CRIME I N CHINA: PUBLIC ORDER A ND

HUMAN R IGHTS(2006), p.33;K ATHLEEN MAGUIRE, SOURCEBOOK OF

CRIMINAL JUSTICE STATISTICS (1995)

12

33. S. PUFENDORF, DE JURE NATURAE ETGENTIUM, LIBRI OCTO (1688, reprinted.

Oxford, Clarendon Press, 1934)

4

34. S. R OSENNE, THE LAW AND PRACTICE OF THE I NTERNATIONAL COURT(1965) 7

35. SARAH JOSEPH, JENNY SCHULTZ & MELLISA CASTAN, THE I NTERNATIONAL

COVENANT ON CIVIL AND POLITICAL R IGHTS: CASES, MATERIALS AND

COMMENTARY(2004)

14,

17

36. SHABTAI R OSENNE, THE I NTERNATIONAL LAW COMMISSION'S DRAFT

ARTICLES O N STATE R ESPONSIBILITY(1991)

2

37. THOMAS A ND THOMAS, THE CONCEPT OF AGGRESSION I N I NTERNATIONAL

LAW(1972)

8

38. VICTOR CONDÉ ,A HANDBOOK OF I NTERNATIONAL HUMAN R IGHTS

TERMINOLOGY(2004)

13

39. URSULA K ILKELLY, A GUIDE TO THE IMPLEMENTATION OF THE ARTICLE 8

OF THE EUROPEAN CONVENTION O N HUMAN R IGHTS (2003)

14,

17,

19

40. WEST'S E NCYCLOPEDIA OF AMERICAN LAW, VOLUME 7TH (2005) 18

TREATIES,CONVENTIONS AND RESOLUTIONS

1. Charter of the United Nations 8

2. European Union, Treaty Establishing the European Community), Rome

Treaty, 25 March 1957,

10

3. International Convenant on Civil and Political Rights, 16 December 1966 ,

General Assembly resolution 2200A (XXI)

15

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4. Draft Articles on Responsibility of States for Internationally Wrongful Acts,

November 2001, Supplement No. 10 (A/56/10)

2, 4

5. OECD Model Tax Convention On Income And Capital 19

6. Responsibility of States For Internationally Wrongful Acts, UNGA Res56/83, ¶ 3 (Dec. 12, 2001)

2

7. The Convention For the Protection Of Human Rights and Fundamental

Freedoms ,4th November 1950(Also known as European Convention on

Human Rights)

15,

16,

18

7. UN Model Convention on Double Taxation 19

8. United Nations, Statute of the International Court of Justice, 18 April 1946 6

9. Universal Declaration of Human Rights, (1948),G.A. res. 217A (III), U.N.

Doc A/810 at 71

15

10. Vienna Convention on The Law of Treaties,1969, , 1155 U.N.T.S. 331 2,3,

11,

14,

20

REPORTS ,COMMENTS AND YEARBOOKS

1. Fourth Report of the Special Rapporteur Sir Humphrey Waldock , ILC

Report, A/6009 (F)(A/20/9), ,chapter II (A),(1965)

3

2. J. Kokott, ‘Interim Report on the Exhaustion of Local Remedies’,

International Law Association, Report of the Sixty-Ninth Conference,

London, 2000

1

3. James Crawford’s Second Report on State Responsibility, UN

Doc. A/CN.4/498/Add.4,(July 1999)

5

4. General Comment No 16,Human Rights Committee 16

5. Opinion of Law Officers Of The British Crown In Connection With The

Simons Town Agreement (1971)

10,

20

6. Report of the International Law Commission on the Work of Its Thirty-

second Session,2 Yearbook of the ILC, (1980), (Part. II), UN Doc.

A/CN.4/SER.A/1980/Add.1 (Part 2)

5

7. Robert Ago’s Eight Report on State Responsibility, Yearbook of the

ILC,(1969), vol. II (Part I), Report A/CN.4/318/ADD.5

4

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8. Roberto Argo, Sixth Report On State Responsibility, Yearbook of the ILC,

(1977) Part 2

1

9. South African Revenue Service (SARS), Discussion Paper on Tax

Avoidance (November 2005)

12

10. Statement by Ottawa Revenue Minister Jean-Pierre Blackburn as reported by

Louise Egan, Canada Asks France For A List Of Swiss Account Holders,

Reuters News Network, Friday January 08,2011

12,

14,

16,

20

11. Summary Report of the 11th Meeting of the Committee, UNICIO Doc.

(1945) ,G17(4), (6 May 1945)

8

12. United States – Sections 301-310 of the Trade Act of 1974, WT/DS152/R,

Report of the Panel, (Dec. 22, 1999)

2

13. Yearbook of the ILC,(1969) vol. II (Part II), Report A/CN.4/SER.A/1980 5

ICJ AND PCIJ CASES

1. Advisory Opinion On Legal Consequences For The States Of The Continued

Presence Of South Africa In Namibia Notwithstanding Security Council

Resolution 276, ,ICJ Reports 1971,p. 16(21 June 1971)

11

2. The Advisory Opinion On The Exchange Of Greek And Turkish Populations

Case, PCIJ Reports, Series B, No.10, (21st February 1925)

14

3. Armed Activities On The Territory Congo(Between Democratic Republic Of

Congo v. Uganda) , 2001,ICJ Reports 2001, p. 146-147(11 December 23,

2001)

2

4. Corfu Channel Case (United Kingdom v. Albania), I.C.J. Reports 1949, p.

4,(9 April 1949)

7

5. Case Concerning Certain Phosphate Lands In Nauru ( Nauru v.

Australia),I.C.J Report 1992, (26th June 1992)

6

6. Continental Shelf Case(Libya Arab Jamahiriya v. Malta), ICJ Reports 1985,

(3rd June 1985)

13

7. Diallo Case (Guinea v. Democratic Republic of Congo), ICJ

Reports 2007, (24 May 2007)

1

8. East Timor Case (Portugal v. Australia )I.C.J Reports 1995,p.101(30th June

1995)

6

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9. Elerrronica Sicula S.P.A. (ELSI) Case (Italy v. United States of America) ,

I.C.J. Reports1989, (20th December 1988)

1

10. Fisheries Jurisdiction Case(United Kingdom v.

Iceland(Jurisdiction),1973,ICJ Reports 1974,

11

11. Gabcikovo Nagymaros Project Case(Hungary and Slovakia),1997, ICJ

Reports 1997, (25 September 1997 )

11

12. Interhandel Case (Switzerland v. United States Of America), I.C.J. Reports,

(21 November 1959)

1

13. Legality Of The Threat Or Use Of Nuclear Weapons Case, Advisory

Opinion ,ICJ reports 1996, (8th July 1996)

13

14.Military and Paramilitary Activities in and against

Nicaragua Case (Nicaragua v USA) (Merits), ICJ Reports (1986), (27th June

1986)

9

15. Maritime Delimitation and territorial Questions Case(Qatar v. Bahrain)

(Jurisdiction and Admissibility No 2,), ICJ Reports 1995,(1st July 1994)

11

16. Monetary Gold Removed from Rome in 1943 Case( Italy v. France, UK,

North Ireland & USA.),I.C.J Reports 1954, (15th June 1954)

6

17. Nuclear Tests Case (Australia and New Zealand v. France), 1974, I.C.J.

Reports 1974, (20 December 1974)

2

18. Questions of Interpretation and Application of the 1971 Montreal

Convention arising from the Aerial Incident at Lockerbie (Libyan Arab

Jamahiriya v. United Kingdom)(Preliminary Objections),ICJ Reports 1999,

(27th February 1998)

7

19. Sovereignty over Certain Frontier Land Case(Belgium v. Netherlands),ICJ

Reports (1959), (Declaration of Judge Lauterpacht )(20th June 1959)

3

20. Temple of Preah Vihear Case, ICJ Reports (1962) (Decision of Judges

Alfaro and Fitzmaurice)

3

OTHER CASES

1. California Bankers Association vs. Shultz, 416 U.S. 21 (1974); US vs.

Miller, 425 U. S. 435, 442 (1976)

15

2. Commission of the European Communities v Italian Republic. - Case 24-

68. European Court Reports 1969 , p. 193(1stJuly 1969)

10

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3. Crèmieux v. France(Application No.11471/85) European Court of Human

Rights(Series A No 256B),(25th February 1993)

16,

18,

19

4. Dudgeon v.

United Kingdom , Application No. 7525/76,European Court of Human Rights, (Series A, No. 45)(23 September 1981)

16,19

5. Gaskin vs. The United Kingdom, European Application No. 10454/83,

European Court of Human Rights, (ser. A ,No 160) , (7th July 1989)

16

6. Klass & Others v. Germany(Application No. 5029/71), European Court of

Human Rights(Series A No 28),(6th September 1978)

16,

19

7. LG&E v. Argentina , ICSID Case No. ARB/02/1 (United States/Argentina

BIT),(8th July 2008)

4, 5

8. Niemietz v. Germany, Application No. 13710/88, European Court of Human

Rights, (ser. A ,No 251B) ,( 16th December 1992)

15

9. P.G. & J.H. v. the United Kingdom,(Application No. 44787/98), European

Court of Human Rights) (Series A No.2001-IX),(25th September 2001)

17

10. Peck v. United Kingdom, Application No. 44647/98,European Court of

Human Rights, (ser. A) , (2003)

18

11. Russian Indemnity case(Russia v. Turkey) ,UNRIAA vol. XI, (Sales No.

61.V.4), (11 November 1912)

5

12. Soering v. the United Kingdom , (Application No.14038/88) European Court

of Human Rights(Series A No 0161), (7 July 1989)

18

13. Toonen v Australia ,UN Doc CCPR/C/50/D/488/1992.§ 6.10(4 April 1994), 16

14. US vs. Miller, 425 U. S. 435, 442 (1976) 15,17

15. X & Y v. the Netherlands, Application No. 8978/80, European Court of

Human Rights, (ser. A ,No 091) , ( 163th December 1983)

16

NATIONAL LAWS

1. US Department of State. 9 FAM 40.21(a) N2.3-2 Crimes Committed Against

Governmental Authority. Foreign Affairs Manual—Volume 9: Visas.

http://www.state.gov/documents/organization/86942.pdf. Accessed

September 5, 2001

18

2. United Sates Constitution 3

3 French Constitution 3



SSTTAATTEEMMEENNTT OOFF JJUURRIISSDDIICCTTIIOONN

The State of Amiti on one side and the State of Darshini on the other have submitted by a

special agreement their differences regarding certain economic and taxation policies to the

International Court of Justice and transmitted a copy to the registrar pursuant to article 40(1)

of the Statute of the International Court of Justice. Therefore, both parties have accepted the

Court’s jurisdiction Pursuant to article 36(1) of the Statute.

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SSTTAATTEEMMEENNTT OOFF FFAACCTTSS

PROLOUGE: THE VIPULIAN ECONOMIC UNION

The Vipulian Economic Union is an economic union comprising of twelve geographically

proximate nations sharing common religious and economic ties. The Vipulian Economic

Union Charter espouses certain principles, namely, Respect for universal rights; Mutual

respect for member nation laws and support for implementation of member nation laws and

judicial decisions; Movements towards full economic integration- with respect to currency,

fiscal policy, monetary policy, Taxation and legal systems; Preservation of the cultural, social

and religious histories of member nations; Exchange of information on matters of importance

to member nations and its policies.

DESCRIPTION OF STATE PARTIES

AMITI: A developing country, Amiti opened its economy in 1992 and since then has

succeeded to a large degree in integrating its economy into the Vipulian Union as well as the

global economy. The country is a renowned for its technology and outsourcing. It has a clear

separation of powers and a Parliamentary system of Governance. Amiti has in place the

Banking Regulation and Secrecy Act, a domestic legislation, which was passed primarily for

the protection of privacy of individuals and whereby banks were required to maintain secrecy

of banking transactions unless forced to make disclosures by applicable laws.

DARSHINI: The second largest economy in the world with an entrepreneurial culture, free

market economy, strong regulatory bodies and a social security net for citizens,

constitutionally, Darshini, has a clear separation of powers and a Presidential form of

governance. Darshini entered into a DTAA with Amiti whereby a particular capital gains

treatment was adopted, which according to most experts, was originally at Darshini’s behest.

DOUBLE TAX AVOIDANCE AGREEMENT (DTAA)

Darshini and Amiti entered into a Double Tax Avoidance Agreement which conspicuously

has no limited limitation of benefits clause and under which the exchange of information

clause was restricted to matters under the treaty. As a consequence of this treaty, the country

of residence was to tax capital gains. Following this treaty, Amiti’s tax rate dropped and

various corporations around the world invested into the Vipulian Union and particularly into

Darshini through entities set up in Amiti.

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ECONOMIC POLICIES OF DARSHINI AND CONSEQUENCES THERETO

In 2005, Mrs. Raj, a well-respected economist, was elected as the President in Darshini. Post

the 2008-2009 fiscal crisis, Mrs. Raj increased government spending and with the legislature

passed a number of stimulus packages to support the economy, all to prevent

the economy from slipping into recession. Many economists were of the view that these steps

had protected the economy from recession. In 2010, however, the Democratic Party of

Darshini was elected to the legislature, who instantly overturned the economic policies for

more fiscal conservativeness, or in the words of the leader of the Party, “brace for pain,

inorder to insure that the country recovered in the medium to long term”. Consequently, the

expenditures on social programs and subsidies for business were particularly hit. By late

2010, the country slipped into recession. These measures had a particularly devastating

impact on the economy in Amiti and the member countries of the Vipulian Union. The

situation was grave with an absolute freeze of investment money, complete secession of

supply of goods and services from Darshini and an all-time low for taxation. The Amitian

prime Minister repeatedly requested Darshini to reverse its policies or at the very least to

reverse certain key aspects, but the Darshinian President was unable to accede to those

requests since the legislature was “hell bent on following ideological policies rather than

policies that were pragmatic and consistent with the need of the hour”. Independent reports

confirm that the social unrest attributable to the state of the economy and unemployment. In

Darshini, the drop in public expenditure had greatly aggravated the problems.

LOWER COURT DECISION AND CONSEQUENCES THERETO

In early 2011, a Lower Court in Darshini gave a series of ‘public policy’ hearings on the

DTAA whereby it sought to invalidate the same on grounds of ‘loss of revenues’ and

‘questions on whether the income tax legislation in the country expressly permitted theexecutive to enter into tax treaties and forgo the country’s right to tax capital gains.’ This

view was disputed by various legal experts. The matter was not taken to the higher courts and

the legislature welcomed the decision and vis a vis an obscure constitutional provision

advised the executive to implement the decision. Mrs Raj, while not dispensing any

uncertainties about the effect of the same, merely stated that “the law should take its course

and be implemented fully”This was followed by a verbal volley of statements between the

two member nations with the President of Darshini committing that “it was likely that thedecision of the lower Court would be enforced at least for a period of two years,” and the the

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Head of the Democratic Party justifying the “tough choices” on grounds of “economic crisis”

and “global state practice with respect to tax havens.” These collective statements of the

authority in Darshini spooked the stock markets which fell dramatically adding to the

economic woes of the Vipulian region.

EXCHANGE OF INFORMATION

Around the same time, the Darshinian Supreme Court ordered the Darshinian Government to

conduct investigations into violations of Darshini laws by residents. The Darshini

Government, consequently, requested the Government of Amiti to disclose the identities of

all Darshini based residents who had bank accounts in Amiti. Since these was in grave

violation of the banking Regulations and Secrecy Act as also the principle of privacy

espoused in the Vipulian Charter, Amiti refused to comply with the same. Amiti, however,

offered to make disclosure in cases where violations of law had been established.

EPILOUGE

Following a to and fro of accusations from both sides where the Amiti Government rightly

accused Darshini of imposing economic sanctions, use of force and at the very least ,

intervention in violation of Amiti’s sovereignty, and Darshini accused Amiti of violation of

the Vipulian Charter provisions the Secretary General of the United Nations advised the

states to refer the matter to the ICJ, as a result of which this dispute was submitted to the

registry of the International Court of Justice.

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QQUUEESSTTIIOONNSS PPRREESSEENNTTEEDD

The parties have placed before this Hon’ble Court, the following Questions for its

consideration:

1. Whether the Decision of the Lower Court of Darshini and subsequent acts on behalf

of the Legislature and Executive amount to violation of the Double Tax Avoidance

Agreement and International Law on Taxation?


of the Legislature and Executive amount to treaty invalidation, and if so, is the treaty

invalidation so justified?


of the Legislature and Executive amount to imposing sanctions, use of force or at the

very least, intervention against the sovereignty of Amiti?

4. Whether Amiti is required to disclose the requested information under the DTAA or

the Vipulian Charter?

5. Whether the right to privacy is protected under the Vipulian Charter and

consequently, whether Amiti is required to disclose the requested information in light

of the privacy right of individuals?

The Applicant has duly addressed all the aforementioned in the form of two substantive

arguments advanced summarized under.

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1.1. THE ACTS OF DARSHINI ARE IN ACCORDANCE WITH BOTH INTERNATIONAL LAW AS

WELL AS ITS TREATY OBLIGATIONS

THE ACTS OF DARSHINI ARE IN ACCORDANCE WITH BOTH INTERNATIONAL LAW AS

WELL AS ITS TREATY OBLIGATIONS

This claim of the republic of Amiti is not admissible due to the exhaustion of local

remedies rule. Further the State of Darshini hasn’t committed any wrongful act under

international law and the unilateral declarations by the president and the head of the

democratic republic party do not incur any international responsibility. Alternatively the

state of Darshini is entitled to invalidate a treaty due to constitutional constraints and

also the treaty violation is precluded due to the circumstance of ‘necessity’. The lower

court decision and the economic policies of Darshini are not in violation of the Vipulian

Economic Union Charter and also do not amount to de facto economic sanctions against

the state of Amiti, use of force against the state of Amiti and interference in the internal

affairs of Amiti.

2. AMITI IS REQUIRED PROVIDE INFORMATION REQUESTED BY DARSHINI IN

ACCORDANCE WITH ITS INTERNATIONAL OBLIGATIONS

Amiti is required to provide information in accordance with the B and E of Vipulian

economy charter and the DTAA between Amiti and Darshini. Further Amiti may not

invoke provisions of its banking regulation and secrecy act as a justification for not

exchanging information with Darshini. Alternatively the right to privacy isn’t protected

by the Vipulian economic union charter. Also even if it is protected the information

required by Darshini doesn’t interfere with the right to privacy and even if it does the

interference would be justified as it is in accordance with law. necessary in a democratic

society and it pursues a legitimate aim



CCOONNTTEENNTTIIOONN II

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WWEELLLL AASS IITTSS TTRREEAATTYY OOBBLLIIGGAATTIIOONNSS

1.1. THE PRESENT CLAIM OF THE REPUBLIC OF AMITI IS NOT ADMISSIBLE DUE TO THE

EXHAUSTION OF LOCAL REMEDIES RULE.

Customary International Law provides that before international proceedings are instituted or

claims or representations made, the remedies provided by the local State should have been

exhausted.1 The purpose of the rule is both to enable the State to have an opportunity to

redress the wrong that has occurred within its own legal order and to reduce the number of

international claims that might be brought.2 This fact can be advanced by the jurisprudence of

the ICJ.3 Unless local remedies have been invoked one cannot qualify a State’s action as

amounting to an internationally wrongful act.4 In the current case it can be seen redress is

clearly available by Appeal in the Higher Courts and Supreme courts of the Republic of

Darshini, which have previously given a positive interpretation of the Treaty5 and since such

redress has not been pursued the present claim is not admissible at the international plane.

1.2. THE STATE OF DARSHINI HAS NOT COMMITTED ANY WRONGFUL ACT UNDER

INTERNATIONAL LAW.

The rules which determine whether a State is in breach of its obligations toward another state

are referred to as the principles of state responsibility6 which have been widely recognized in

international law.7 In asserting state responsibility the work of the international law

commission on state responsibility is already recognized as a principle of customary

1C. F. AMERASINGHE, LOCAL R EMEDIES IN I NTERNATIONAL LAW(2004),p.15-60; J. Kokott, ‘Interim Report onthe Exhaustion of Local Remedies’, International Law Association, Report of the Sixty-Ninth Conference,London, 2000, p. 606.[hereinafter as Kakkot].

2

Yearbook of the ILC, (1977),vol.II, part 2, p. 30; [Kakkot], Id . At 606.3Diallo Case (Guinea v. Democratic Republic of Congo), ICJ Reports 2007, ¶42¶44,(24May 2007);Interhandel Case (Switzerland v. United States Of America), I.C.J. Reports, p. 6,27(21 November 1959) ;Elerrronica Sicula S.P.A. (ELSI) Case (Italy v. United States of America) , I.C.J. Reports 1989, p. 42 at ¶50(20th December 1988).

4Roberto Argo, Sixth Report On State Responsibility, Yearbook of the ILC, (1977) Part 2, p .20.

5Compromis ¶ 11.

6Garcia-Amador, First Report on State Responsibility, U.N. Doc. A/CN.4/96 (1956), reprinted in The Yearbook of the ILC,(1956), p. 173-231.

7I L. OPPENHEIM, I NTERNATIONAL LAW: A TREATISE, §§ 148-49, At 336-38 (8th Ed. 1955)[hereinafter AS

OPPENHEIM].



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international law8 and has been relied on by the ICJ9. Further ILCs work has been adopted by

the General Assembly.10 The ILC’s Articles on State Responsibility decree that a breach of

an international act only occurs when the act is performed and extends over the entire period

the act is performed.11 Thus, an act can amount to being against the principles of international

law, only once it is committed and not before its commencement. In the current situation

there is no explicit cancellation of the DTAA as no treaty is cancelled until and unless the

other state is notified in accordance with the rules and procedures 12 and further no capital

gains were subjected to taxation outside the state of residence. Therefore it is submitted that

hasn’t committed any wrongful acts under international law.

1.3. UNILATERAL DECLARATIONS BY THE PRESIDENT AND THE HEAD OF THE

DEMOCRATIC REPUBLIC PARTY DO NOT INCUR ANY INTERNATIONAL RESPONSIBILITY.Attributing international legal significance to unilateral statements made by a State should not

be done lightly and should be subject to strict conditions.13 A sovereign State should

normally not find itself legally affected on the international plane by the casual statement of

any of the numerous representatives speaking on its behalf.14 ICJ jurisprudence has

propounded the test that only when it is the intention of the State making the declaration that

it should become bound according to its terms, that intention confers on the declaration the

character of legal undertaking.15 Thus the intent to be bound by the declaration is a perquisite

for the declaration to create any type of international legal responsibility. This requisite of

intent was also mandated by the ICJ where it decreed that to entail responsibility it should be

observed whether the language employed in any given declaration does reveal a clear

8SHABTAI R OSENNE, THE I NTERNATIONAL LAW COMMISSION'S DRAFT ARTICLES O N STATE

R ESPONSIBILITY(1991), P.167.

9Armed Activities On The Territory Congo(Between Democratic Republic Of Congo v. Uganda), 2001,ICJReports 2001, p. 146-147(11 December 23, 2001).

10Responsibility of States For Internationally Wrongful Acts, UNGA Res 56/83, ¶ 3 (Dec. 12, 2001).

11International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts, November 2001, Article 15, Supplement No. 10 (A/56/10)[hereinafter as Draft Articles on State Responsibility].

12Vienna Convention on The Law of Treaties,1969, §4, 1155 U.N.T.S. 331[hereinafter as VCLT].

13United States – Sections 301-310 of the Trade Act of 1974, WT/DS152/R, Report of the Panel, ¶ 7 ¶118,(Dec. 22, 1999).

14 Nuclear Tests Case (Australia and New Zealand v. France), 1974, I.C.J. Reports 1974, ¶ 43,(20 December 1974) .

15 Id. at ¶43.





intention.16 This intention is not mirrored in the statements made by the President and the

head of the Democratic Party, rather from the construction of the statements it appears that

they were made casually, without any intention of creating international obligations, and

hence the State of Darshini cannot be bound by them. Thus it is submitted that unilateral

declarations by the president and the head of the democratic republic party do not incur any

international responsibility.

1.4. I N A RGUENDO, THE STATE OF DARSHINI IS ENTITLED TO INVALIDATE A TREATY DUE

TO CONSTITUTIONAL CONSTRAINTS

The State of Darshini has impeached the treaty due to lack of authority of the executive to

enter into such tax treaties whereby the country has forsaken its right to tax capital gains. The

validity of a treaty may be open to question if it has been concluded in violation of theconstitutional laws such that the states representatives must have exceeded their powers in

concluding the treaty.17 A rule to this effect is well established in customary International

Law.18 A State can invoke non observance in its internal law as a basis for invalidating its

consent to be bound by a treaty but the rule of internal law relates to competence to conclude

treaties only if it is a rule of fundamental importance and if the violation is manifest and such

is objectively evident to any state conducting itself in the matter.19 Thus a lack of authority

may be manifest to the other party if the other party has actual knowledge or was negligently

ignorant of the other party’s lack of authority.20 The special nature of tax treaties dictates that

in Presidential systems of governance, the executive has the power to enter into treaties only

after the advice and consent of the legislature.21 Such a lack of authority can be considered

manifest and the lowering of the threshold for assuming a manifest violation is based on the

right to democratic governance which is emerging with the international legal order. 22 Thus

such a lack of independent treaty making power solely with the President, in Presidential

16

Temple Of Preah Vihear Case(Thailand v. Cambodia), ICJ Reports 1962,p .32 (15 June 1962).17[OPPENHEIM],supra note 7 at p. 1285.

18Sovereignty over Certain Frontier Land Case(Belgium v. Netherlands),ICJ Reports (1959), p. 230-31(Declaration of Judge Lauterpacht )( 1959 ).

19VCLT, Article 46.

20 Fourth Report of the Special Rapporteur Sir Humphrey Waldock , ILC Report, A/6009 (F) (A/20/9), ,chapter II (A), ¶3 ¶15,(1965).

21United Sates Constitution, Article 2(2); French Constitution, Article 53.

22GH Fox, Constitutional Violations and the Validity of Treaties: Will Iraq Give Lawful Consent to a Status of

Forces Agreement?, Wayne State University Law School Research Paper No 08–25, 25–26,p.32-46, (2008).





Governments being objectively evident, or manifest, a treaty entered into without the

appropriate authority can be rescinded keeping in with the provisions of international law.

Further from the facts of the case it is evident that financial decisions of importance lie with

the legislature and that the president is handicapped in this regard. 23 Thus it is submitted that

the state of Darshini is entitled to invalidate a treaty due to constitutional constraints.

1.5. I N A RGUENDO, THE TREATY VIOLATION IS PRECLUDED DUE TO THE CIRCUMSTANCE

OF ‘NECESSITY’

In the present situation Darshini was compelled to take actions contrary to its treaty

obligations in the light of the political, economic and social crisis that befell on it. The

concept of excusing a State for the responsibility for violation of its international obligations

during what is called a “state of necessity “is recognized to extent that it is considered a partof international law.24 Even the Articles on State responsibility which were shown to be

custom allow wrongfulness to be precluded on grounds of necessity. 25 In international law, a

state of necessity is marked by certain characteristics that must be present in order for a State

to invoke this defense.26 A state of necessity is identified by those conditions in which a State

is threatened by a serious danger to its existence, to its political or economic survival.27

Hence, the possibility of alleging the state of necessity is closely bound by the requirement

that there should be a serious and imminent threat and no means to avoid it. The

identification of such circumstances, in principle, have been left to the State’s subjective

appreciation 28 Taking each element in turn the principle of necessity requires that the

‘essential interest’ of the State must have been threatened and such essential interests have

23Compromis ¶ 8 & ¶ 10.

24BALTHAZARIS AYALAE, DE JURE ET OFFICIIS BELLICIS ET DISCIPLINA MILITARI, LIBRI TRES (1582 reprinted

Washington, Carnegie Institution, 1912), vol. II, p. 135; ALBERICO GENTILI, DE IURE BELLI, LIBRI TRES (1612,reprinted Oxford, Clarendon Press, 1933),vol. II, p. 351; HUGO GROTIUS, DE JURE BELLI AC PACIS, LIBRI TRES

(1646, reprinted Oxford, Clarendon Press, 1925), vol. II, p. 193;EMIIRECH DE VATTEL, LE DROIT DES GENS OU

PRINCIPES DE LA LOI NATURELLE (1758 reprinted Washington, Carnegie Institution, 1916), vol. iii, p. 149. ; S.

PUFENDORF, DE JURE NATURAE ETGENTIUM, LIBRI OCTO (1688, reprinted. Oxford, Clarendon Press, 1934), vol.II, p. 295-296; C. WOLFF, JUS GENTIUM METHODO SCIENTIFICA PERTRACTATUM (1764, reprinted Oxford,Clarendon Press, 1934), vol. II, p. 173-174.

25Draft Articles on State Responsibility, Article 25.

26 Id. at Article 25(a) & Article 25(b).

27 Robert Ago’s Eight Report on State Responsibility, Yearbook of the ILC,(1969), vol. II (Part I), Report

A/CN.4/318/ADD.5, p. 3.28 LG&E v. Argentina , ICSID Case No. ARB/02/1 (United States/Argentina BIT), ¶248 at p. 72(8th July 2008).





been interpreted to include different matters such as the economy, ecology or other 29 The

“grave and eminent principle” requirement has been interpreted so as to include that the peril

so threatened must be established objectively.30 In the present case, the threat of complete

breakdown of the economy and society was both objectively present and eminent as

evidenced from the deteriorating economic and social conditions caused due to the global

financial crisis.31 It is also required that such measures must have been the ‘only means’

available to the state to protect such interests. Thus the State must have exhausted all possible

legal means before being forced to act as it does.32 The various economic policies ranging

from excessive government subsidizing and increased spending in order to cushion the

negative impact of the economy to that of cutbacks in the public and military expenditure

clearly establishes the exhaustive attempts made by the state to negate the economic

downturn. Further for invoking the exception whereby the state has contributed to the state

of necessity, the burden of proof has to be satisfied the Applicant State33 and in the present

case this cannot be claimed since the acts of the State of Darshini were an attempt to combat

the huge loss in revenue that was caused due to the global financial crisis and not to a

situation it had created due to its on acts. Therefore the acts of the State of Darshini can be

precluded on grounds of necessity.

1.6. LOWER COURT DECISION AND THE ECONOMIC POLICIES OF DARSHINI DO NOT

AMOUNT TO DE FACTO ECONOMIC SANCTIONS AGAINST THE STATE OF AMITI OR ANY

OTHER STATE IN THE VIPULIAN ECONOMIC UNION.

1.6.1. The Current claim is not maintainable at the ICJ

Amiti had issued strong statements equating the economic policies and decisions of the

Supreme Court of Darshini to effective sanctions against Amiti and other nations in the

Vipulian Economic Union.34 It is a well established principle that court will not

entertain actions between States that in reality also included a third State without its

29 Id. at 72; Yearbook of the ILC,(1969) vol. II (Part II), Report A/CN.4/SER.A/1980,p.174; Russian Indemnity

case (Russia v. Turkey) ,UNRIAA vol. XI, (Sales No. 61.V.4), p 42(11 November 1912).

30 James Crawford’s Second Report on State Responsibility, UN Doc. A/CN.4/498/Add.4, p.31(July 1999).

31Compromis 7¶ ¶8 ¶9 & ¶10.

32 Report of the International Law Commission on the Work of Its Thirty-second Session,2 Yearbook of the ILC,

(1980), (Part. II), UN Doc. A/CN.4/SER.A/1980/Add.1 (Part 2), p 155-175.

33

LG&E v. Argentina, ICSID Case No. ARB/02/1 (United States/Argentina BIT), ¶248 at p. 72(8th July 2008). 34Compromis ¶17.





consent where the legal interest of the third State which may be affected would form an

important part of the subject matter of the decision.35 Further the court cannot

adjudicate upon the rights of third States without their consent. This principle is

embodied in the statute of the court36 and has been endorsed by the court on numerous

occasions.37 Therefore in accordance with this principle the court cannot hear a case

where the rights of third States are in question without the consent of the respective

third parties. Thus it is submitted that the claim is not maintainable.

1.6.1. In Arguendo, The Lower Court Decision and the Economic Policies of Darshini do

not amount to de facto Economic Sanctions against the State of Amiti

Sanctions are defined as penalties threatened or imposed as a declared consequence of

the target’s failure to observe international standards or international obligations.

38

Limiting the definition of economic sanctions to operational dimensions, economic

sanctions are defined as deliberate, government-inspired withdrawal, or threat of

withdrawal, of customary trade and financial relations.39 This principal has even been

recognized in the United Nations Charter.40 The expression economic sanctions is to be

distinguished from limited forms of adverse measures, such as trade countermeasures

permitted under the Statute of the WTO, symbolic sanctions that may include a material

component but are neither intended nor foreseen to impair general economic life,

diplomatic sanctions and arms embargoes.41 Thus Economic Sanctions, while being

accorded no exhaustive meaning by international law have been ascribed by two

essential ingredients namely intent and effect.42 There is no dispute that economic

35 Monetary Gold Removed from Rome in 1943 Case( Italy v. France, UK, North Ireland & USA.),I.C.J Reports1954, ¶54 at p. 21(15th June 1954); East Timor Case (Portugal v. Australia )I.C.J Reports 1995,p.101(30 th June1995);Case Concerning Certain Phosphate Lands In Nauru ( Nauru v. Australia),I.C.J Report 1992,p .240, 259 -262(26th June 1992).

36

United Nations, Statute of the International Court of Justice, 18 April 1946,,Article 36(1).37 Monetary Gold Removed from Rome in 1943 Case( Italy v. France, UK, North Ireland & USA.),I.C.J Reports1954, ¶54 at p. 21(15th June 1954).

38MARGARET P. DOXEY, I NTERNATIONAL SANCTIONS IN CONTEMPORARY PERSPECTIVE(1996),p. 9[hereinafter asDOXEY].

39GARY CLYDE HUFBAUER , ECONOMIC SANCTIONS R ECONSIDERED( 2007) p. 3.

40BRUNO SIMMA, THE CHARTER OF THE U NITED NATIONS-A COMMENTARY(1995),p. 621.

41Elias Davidsson, Towards a Definition of Economic Sanctions, (2003).

42Omer Y. Elagab, Coercive economic measures against developing countries, 41 International & ComparativeLaw Quarterly p 682-694,(1992).





sanctions immediate purpose as distinct from their ultimate purpose is to cause

economic hardships in the targeted territory.43 Furthermore the ICJ has insisted that a

higher degree of persuasion is required where bad faith is imputed to another State in

establishing such a purpose or intent.44 In the present case, the statements of the

concerned authorities indicate the purpose of the economic policies being self-

preservation to prevent great loss of revenue in dire times 45 rather than any extra

territorial change in the policy of a State. Therefore in the absence of bad faith the

requisite intent cannot be attributed to the State of Darshini and hence it any allegations

of de facto economic sanctions must fail. Thus it is submitted that the lower court

decision and the policies of Darshini do not amount to de facto sanctions against Amiti.

1.7. THE LOWER COURT DECISIONS AND ECONOMIC POLICIES DO NOT AMOUNT TO

AGGRESSION OR USE OF FORCE UNDER CUSTOMARY INTERNATIONAL LAW.

Amiti had issued strong statements stating that the economic policies and decisions of the

court of Darshini had an effect of using force on Amiti.46 The United Nations Charter lays

down that all members shall refrain in their international relations from the threat or use of

force against the territorial integrity or political independence of any state. 47 International

Tribunals48 and the ICJ49 for long have relied on the travaux préparatoires (i.e. official record

of negotiation between the parties of a treaty50) for its interpretation. An examination of the

travaux préparatoires of the UN Charter and subsequent practice reveal that the constraint

imposed by the UN charter on member States does not extend to coercive economic

43Adam Winkler, Just Sanctions, 21 Human Rights Quarterly (1999),p. 136; [DOXEY] supra note 38 at p. 9.

44S. R OSENNE, THE LAW AND PRACTICE OF THE I NTERNATIONAL COURT (1965), p 580; Corfu Channel Case(United Kingdom v. Albania), I.C.J. Reports 1949, p. 4,.p.17(9 April 1949).

45Compromis ¶ 8, ¶ 9, ¶10, ¶12, ¶13.

46Compromis ¶17.

47United Nations, Charter of the United Nations, 24 October 1945, Article 2(4), 1 UNTS XVI.

48LORD MC NAIR , I NTERNATIONAL LAW OPINIONS(1956) p. 413 ; M. Mennecke and C Tams ,The Right To

Consular Assistance Under International Law, 42 German Yearbook of Int Law, p 223-224,(1999).

49Questions of Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incidentat Lockerbie (Libyan Arab Jamahiriya v. United Kingdom)(Preliminary Objections),ICJ Reports 1999, ¶4.17- ¶4.18 at p. 9(27th February 1998).

50A NTHONY AUST, MODERN TREATY LAW A ND PRACTICE (2007),p. 244.





measures.51 Also it is to be noted that a proposal by Brazil to include economic measure in

Article 2(4) was decisively defeated in San Francisco52 therefore the UN charter not

specifying economic measures as constituting use of force cannot be argued to be an

oversight considering it was specifically rejected.53 Further a restrictive interpretation of

force excluding economic coercion has been adopted by most jurists with some jurists going

to the extent of calling even egregious economic aggression even if illegal not amounting to

use of force under the charter.54Alternatively assuming without conceding if the use of

economic coercion is to be interpreted as use of force, an enormously heavy burden of proof

must lie on the Applicant State to show that the economic coercion constitutes aggression

inter alia a violent response55 the intent of which is to cause injury to the Applicant state or

forcing a change in their will 56 and such is definitely not the case in the current situation

where Amiti has not proved that the acts of Darshini were meant to cause injury to them or

force there will and on the contrary as shown earlier Darshini’s acts were acts of self

preservation. Thus it is submitted that Darshinis lower court decisions and economic policies

do not amount to the use of force against Amiti.

1.8. THE ECONOMIC POLICIES OF DARSHINI DO NOT INTERFERE IN THE INTERNAL

AFFAIRS OF AMITI.

Amiti claimed that the economic policies of Darshini at the very least would amount to

interference in the domestic affairs of their state.57 The principle of sovereignty which even

finds its presence in the UN charter 58 provides that states have a right against unlawful

intervention and interference in their domestic affairs.59 Two elements are recognized to

51Summary Report of the 11th Meeting of the Committee, UNICIO Doc. (1945) ,G17(4), ¶331 at p.334(6 May1945).

526 U.N.C.I.O Documents, p. 335.

53DAVID ALLEN BALDWIN, ECONOMIC STATECRAFT (1985),p .341.

54Oscar Schachter, In Defense Of International Rules On The Use Of Force, 53 University of Chicago LawReview,p.113-127,(1986).

55A NTONIO CASSESSE, THE CURRENT LEGAL REGULATION OF THE USE OF FORCE(1986) , p. 127.

56THOMAS A ND THOMAS, THE CONCEPT OF AGGRESSION I N I NTERNATIONAL LAW(1972),p. 90 -91.

57Compromis ¶17.

58Charter of the UN, Article 2(7).

59L OPPENHEIM EDITED BY SIR R OBERT JENNINGS & SIR ARTHUR WATTS, OPPENHEIMS I NTERNATIONAL LAW, VOLUME 1 PEACE, PARTS 1 (2005) p .428[hereinafter as OPPENHEIM EDITED].

















establish violations of the sovereignty principle, Firstly there must be an ‘intervention’ by one

state in the affairs of another. And secondly, the intervention must bear on ‘matters in which

each State is permitted, by the principle of state sovereignty, to decide freely’.60 Further any

such interference must be forcible or dictatorial, or otherwise coercive; in effect depriving the

state intervened against of control over the matter in question. Economic measures can be

directed against states or their leaders to force a change in policy.61 Interference pure and

simple is not intervention62 this principle has even been recognized by the ICJ 63. As stated

earlier if economic coercion is seen to be in breach of the sovereignty principle two

prerequisites are essential: the first is coercion and the second is an intention to change the

policy of the target state. 64As was proved previously that there was no coercive intent in

economic measures and it was rather a self preservation measure thus the present situation is

rendered beyond the scope of the sovereignty principle. Therefore it is submitted that the acts

of Darshini do not amount to interference in the internal affairs of Amiti.

1.9. THE ECONOMIC POLICIES OF DARSHINI ARE NOT IN VIOLATION OF CLAUSE C OF

THE VIPULIAN ECONOMIC UNION CHARTER

1.9.1. The State of Amiti cannot invoke the responsibility of the state of Darshini for

violations of the Vipulian Economic Treaty

The principles governing the law of responsibility of States require that in case of an

injury arising from violations of collective obligations the State invoking the

responsibility of another State is required to establish that it is ‘specially affected’ by

the acts of that other State.65 For a State to be considered injured it must be affected by

the breach in a way which distinguishes it from the generality of other States to which

60 Military and Paramilitary Activities in and against Nicaragua Case (Nicaragua v USA) (Merits), ICJ Reports

(1986), ¶ 205,(27th June 1986).

61D. W. Bowett, International Law and Economic Coercion, 16 Virginia Journal of International Law, p. 245,(1975-6); I. Shihata, Arab Oil Policies and the New International Economic Order ,16 Virginia Journal of International Law ,p. 261,(1975-6); J. Paust & A. Blaustein, The Arab Oil Weapons - A Threat to International

Peace, 68 American Journal of Intl Law 410,(1974); R. Porotsky, Economic Coercion and the General

Assembly, 28 Vanderbilt Journal of Transnational Law, p. 901, (1995).

62[OPPENHEIM EDITED],supra note 59 at p.428.

63 Military and Paramilitary Activities in and against Nicaragua Case (Nicaragua v USA) (Merits), ICJ Reports(1986), ¶ 205,(27th June 1986).

64Maziar Jamnejad & Michael Wood, The Principle Of Non-Intervention, 22(2) Leiden Journal of Intl Law,p.345-381,(2009).

65Draft Article on State Responsibility, Article 42 (b)(i); JAMES CRAWFORD ILC’S ARTICLES O N STATE

R ESPONSIBILITY –I NTRODUCTION TEXT AND COMMENTARY( 2001), ¶11 at p. 259[hereinafter as CRAWFORD].





the obligation is owed.66 Thus in order to invoke the responsibility of the State of

Darshini, Amiti is burdened to prove, not only violation of the Vipulian Economic

Treaty, but also that it is ‘specially affected’ vis-a-vis the other parties to the obligation.

In the current case the burden of proof has not been dispensed with and thus the State

of Amiti cannot invoke the responsibility of the State of Darshini for violations of the

Vipulian Economic Treaty.

1.9.2. In Arguendo, The provisions of Clause C of the Vipulian Economic Charter have not

been violated

Further assuming if the burden of proof has been disposed off with the principles of the

Charter, most significant of which here would be the obligation of ‘movement towards

full economic integration’ does not give rise to a specific right that has been violated.Economic Integration essentially defined as the absence of institutional barriers to trade

and factor movements between the regions of the system67 States are generally under a

positive obligation to ensure that all obstacles to free movement of goods, persons,

services and capital are abolished 68 and the negative obligation against implementing

and direct, indirect or effective barriers against the creation of a free market. 69 It is

humbly submitted that the State of Darshini has not acted in violation of either of these

obligations, further it has acted expressly in pursuance of the same by entering into

various treaties bilateral investment treaties and double tax avoidance agreements with

members of the Vipulian Economic Union and abiding by the same, in order to

facilitate these obligations.70

66[CRAWFORD], Id. ¶12 at p. 259.

67Mario Polesi, Economic Integration, National Policies And The Rationale Of Regional Separatism; Balassa, В.Trade Creation and Trade Diversion in the European Common Market, The Economic Journal, vol. 77,p. 1– 21(1967); R.T Dalimov, The Dynamics Of The Trade Creation And Diversion Effects Under InternationalEconomic Integration, Current Research Journal of Economic Theory, , vol. 1, issue 1,( 2009).

68K AREN DAVIES, U NDERSTANDING EUROPEAN U NION LAW(2003),p.85[hereinafter as K ARREN]; EuropeanUnion, Treaty Establishing the European Community), Rome Treaty, 25 March 1957,Article 3(2).

69[K ARREN], Id at p. 85; Treaty of Rome, Article 25;Commission of the European Communities v Italian

Republic. - Case 24-68. European Court Reports 1969, p. 193(1st

July 1969). 70

Compromis ¶4



CCOONNTTEENNTTIIOONN IIII


AMITI IS REQUIRED PROVIDE INFORMATION REQUESTED BY DARSHINI IN ACCORDANCE

WITH ITS INTERNATIONAL OBLIGATIONS

2.1.AMITI IS REQUIRED TO PROVIDE INFORMATION IN ACCORDANCE WITH THE VIPULIAN

ECONOMY CHARTER.

2.1.1. The Vipulian Economy Charter is a treaty adopted by the Vipulian Economy which all

member states must abide by.

Both Amiti and Darshini are members of the Vipulian Economic Union and parties to

its Charter.71 The charter as can be seen is the treaty adopted by the Vipulian

Economic union and defines the main principles of the Vipulian Economic Union72 The

VCLT which is now recognized as a part of customary international Law 73 and is

readily applied by the World Court 74 states that the convention would apply to

constituent instruments of international organizations and to treaties adopted by

international organization75.The Convention further recognizes the rule of “Pacta Sunt

Servanda” according to which every treaty is binding on the parties and must be

performed in good faith.76 Thus it is submitted that both the parties are bound by the

charter of the Vipulian Economic Union and must carry out its provisions.

2.1.2.Amiti is required to provide Darshini information in accordance with clause E of the

Charter of the Vipulian Economic Union.

Clause E of the charter of the Vipulian Economic Union provides for member nations

to exchange information that is of importance to member states.77 Therefore

71Compromis ¶1.

72 Id at ¶1.

73

Opinion of Law Officers Of The British Crown In Connection With The Simons Town Agreement (1971),Command 4589, p. 5[hereinafter as Opinion of Law Officer].

74Maritime Delimitation and territorial Questions Case(Qatar v. Bahrain) (Jurisdiction and Admissibility No 2,),, ICJ Reports 1995,p. 6(1st July 1994);Advisory Opinion On Legal Consequences For The States Of TheContinued Presence Of South Africa In Namibia Notwithstanding Security Council Resolution 276, ,ICJReports 1971,p. 16(21 June 1971);Fisheries Jurisdiction Case(United Kingdom v. Iceland(Jurisdiction),1973,ICJReports 1974,p 3;Gabcikovo Nagymaros Project Case(Hungary and Slovakia),1997, ICJ Reports 1997,p. 7(25September 1997 ).

75VCLT, Article 5.

76VCLT, Article 26.

77Compromis ¶1.





Countries are under an obligation to exchange any information that would be necessary

to member nations and their policies. Darshini required that Amiti provide the names of

individuals having bank accounts in Amiti in order that this information aids them in

preliminary investigations to crack down on tax evaders.78 Tax evasion is widely

recognized as public order crime79 i.e. a crime which involves acts that interfere with

the operations of society and the ability of people to function efficiently.80 The

consequences of tax evasion are multifold and include short-term revenue loss, growing

disrespect for the tax system and the law, increasingly complex legislation, the

uneconomic allocation of resources, an unfair shifting of the tax burden and a

weakening of the ability of Parliament and the National Treasury to set and implement

economic policy.81 Thus the requested information being necessary, Amiti has an

obligation to provide the required names of individuals to Darshini in accordance with

clause E of the Vipulian Economic Union.

2.1.3. Amiti is required to provide Darshini information in accordance with clause B of the

Charter of the Vipulian Economic Union.

Clause B of the charter of the Vipulian Economic Union provides for Parties to help

support the implementation of decisions of each other countries courts and laws. 82 The

Darshini Supreme Court had ordered their government to investigate into instances of

any violation of tax law by Darshini based residents and report back to it within 3

months.83 The Darshini Government made a formal request to the Amiti Government

seeking identities of individual with bank accounts in Amiti. Such information

involving names of individuals having bank accounts as stated earlier is essential for

preliminary investigation to help find out and crack down tax evaders. That this

information will aid in the facilitation of the Supreme Court decision is evident. Thus it

78Statement by Ottawa Revenue Minister Jean-Pierre Blackburn as reported by Louise Egan, Canada Asks

France For A List Of Swiss Account Holders , Reuters News Network, Friday January 08,2011[hereinafter asJean-Pierre].

79R ONALD C. K EITH & ZHIQIU LIN, NEW CRIME I N CHINA: PUBLIC ORDER A ND HUMAN R IGHTS(2006), p.33;K ATHLEEN MAGUIRE, SOURCEBOOK OF CRIMINAL JUSTICE STATISTICS (1995), p.693.

80LARRY J. SIEGEL , CRIMINOLOGY(2004), p.54.

81South African Revenue Service (SARS), Discussion Paper on Tax Avoidance (November 2005), p. 9.

82Compromis ¶1.

83Compromis ¶14.





is submitted that Amiti has to provide information to Darshini in accordance with

clause B of the charter of the Vipulian Economic Union to support the implementation

of decisions of each other countries courts.

2.2. THE RIGHT TO PRIVACY ISN’T PROTECTED BY THE VIPULIAN ECONOMIC UNION

CHARTER.

The government of Amiti in its defense to not share information has put forward that the

Vipulian Economic Union Protected the privacy rights of the individuals.84 The Vipulian

Economic Union Charter protects only the Universal Rights of the people.85 A universal right

is a right that is applicable everywhere.86 A universal right fitting in with the definition has to

be a part of customary international law87 as a norm that is a part of customary international

law only would be applicable everywhere.

88

The jurisprudence of the ICJ has held thatcustom is a general practice accepted as law which has constant and uniform usage.89 The

right to privacy is not a universal right 90 because the right to privacy is protected by

international law only in states party to a treaty which affords such protections; moreover,

even those treaties allow the right to privacy to be limited for reasons of national security,

morals, and the like.91 The right to privacy is a concept so amorphous with it practice being

far from being called uniform and constant that its entry into customary international law is

84Compromis ¶15.

85Compromis ¶11.

86 NICKEL JAMES, HUMAN R IGHTS: THE STANFORD E NCYCLOPEDIA OF PHILOSOPHY(2010); VICTOR CONDÉ ,A

HANDBOOK OF I NTERNATIONAL HUMAN R IGHTS TERMINOLOGY(2004), p.268 ; DAVID A. R EIDY, MORTIMER N. S. SELLERS, U NIVERSAL HUMAN R IGHTS: MORAL ORDER I N A DIVIDED WORLD(2005),p.3.

87David Brown , Making Room For Sexual Orientation And Gender Identity In International Human Rights Law:

An Introduction To The Yogyakarta Principles, 31 Michigan Journal of Int'l Law, p. 821-853,(2010)[hereinafter as David Brown].

88I.A SHEARER , STARKES I NTERNATIONAL LAW(1994),p.31;IAN BROWNLIE, PRINCIPLES OF I NTERNATIONALLAW(2008),p.6.

89Legality Of The Threat Or Use Of Nuclear Weapons Case, Advisory Opinion ,ICJ reports 1996, ¶226 at p.64(8th July 1996); Continental Shelf Case(Libya Arab Jamahiriya v. Malta), ICJ Reports 1985, ¶29 at p .27(3rd June 1985).

90Christopher Saporita , Reconciling Human Rights And Sovereignty: A Framework For Global Property Law,10 Indiana Journal of Global legal studies, 255, p. 12,(2003); Mary LaFrance & Gail H. Cline , Identical

Cousins?: On The Road With Dilution And The Right Of Publicity, 24 Santa Clara Computer & HighTechnology Law Journal 641,p.3,(2008); Benjamin E. Bratman , Brandeis And Warren's “The Right To Privacy

And The Birth Of The Right To Privacy, 69 Tennessee Law Review 623,p. 3,(2009).

91[David Brown],supra note 87 at p. 821-853.





precluded.92 Thus it is submitted that the right to privacy isn’t a universal right protected

under the Vipulian Economic Union Charter.

2.3.IN ARGUENDO, THE INFORMATION ASKED FOR BY DARSHINI DOES NOT INTERFERE

WITH THE RIGHT TO PRIVACY

Assuming but not conceding that right to privacy is protected by the Charter, in interpretation

of such clauses relevant international law applicable in relations between parties will be taken

into consideration.93Reliance in interpretation of right to privacy can be placed on European

Convention Practice94 or Human Rights Committee Jurisprudence.95 Further what is true for

ICCPR is true for UDHR as well as ECHR. 96 Determination of whether the privacy rights of

an individual has been breached or not is carried out in two stages the first of one which deals

with whether the alleged complaint falls within the rights protected and the second dealswith whether there has been an interference with the right protected and if the interference is

justified.97

2.3.1. Stage one of the Determination process.

Stage one has two further steps which are whether the alleged right falls within the

rights protected and secondly whether there is a positive obligation on part of the state

to respect the individual right and if it has been fulfilled.98

A. THE APPLICANT HAS A BURDEN OF PROOF TO CHARACTERIZE THE R IGHT IT SEEKS

TO PROTECT A ND ADVANCE IT BEFORE THE COURT.

The party raising the claim that a right has been breached has a burden of proof to

characterize the right it seeks to protect and advance it before the court.99 Thus In

92R ICHARD LILLICH, HUMAN R IGHTS I N I NTERNATIONAL LAW, LEGAL A ND POLICY ISSUES (1984),p.148; Pamela

Stephens , Applying Human Rights Norms To Climate Change: The Elusive Remedy,21 Colorado Journal of Int'l Environmental Law & Policy 49,p. 60,(2010).

93

VCLT, Article 31(3(c)).94 FRANCIS G. JACOBS, THE EUROPEAN CONVENTION O N HUMAN R IGHTS(1975),P. 126.

95SARAH JOSEPH, JENNY SCHULTZ & MELLISA CASTAN, THE I NTERNATIONAL COVENANT ON CIVIL AND

POLITICAL R IGHTS: CASES, MATERIALS AND COMMENTARY(2004), p.478;[hereinafter as ICCPR Commentary].

96 NOWAK , UN CONVENAT ON CIVIL AND POLITICAL R IGHTS: CCPR COMMENTARY(1993), §15 at p..294,[hereinafter as NOWAK ].

97Ursula Kilkelly, A Guide To The Implementation Of The Article 8 Of The European Convention On HumanRights (2003), p. 11-12. .[ hereinafter as URSULA K ILKELLY].

98

Id at p.11-12.99 Id at p.11-12.





this case Amiti has a burden of proof to characterize the right it wishes to protect and

advance it before the court.

B. I N ARGUENDO, THE R IGHT I N QUESTION IS NOT PROTECTED.

In the current case Amiti had argued that disclosing information would be aviolation of the right to privacy of individuals. A compromise definition of right to

privacy would comprise of freedom from unwarranted and unreasonable intrusion

into activities that the society recognizes as belonging to the sphere of individual

autonomy or inner circle of private life. 100 The sphere of individual autonomy or

inner circle of private life has been described as the field of action that does not

touch upon the liberty of others and where one may withdraw from others to shape

one’s life according to one’s own egocentric wishes and expectations.

101

Further Respect for private life must also comprise to a certain degree the right to establish

and develop relationships with other human beings.102 Other aspects of personal

interest such as family life, home and correspondence are protected under the right

to privacy.103 It has been observed that individuals have no right to privacy in

relation to records kept by banks104 and information kept by banks doesn’t fall into

the realm of activities that society recognizes as belonging to the realm of individual

autonomy nor other aspects of private life. Thus as no right to privacy exists with

respect to information kept by bank, no right in question would be protected.

100S.E Wilborn, Revisiting The Public/Private Distinction: Employee Monitoring In The Workplace,32 GeorgiaLaw Review, p .825-833, (1998).

101[NOWAK ],supra note 96 at p. 288.

102 Niemietz v. Germany, Application No. 13710/88, European Court of Human Rights, (ser. A ,No 251B) ,¶27- ¶ 33( 16th December 1992).

103The Convention For the Protection Of Human Rights and Fundamental Freedoms,Article 8,4th November 1950(Also known as European Convention on Human Rights)[hereinafter as ECHR] Universal Declaration of Human Rights, (1948).Article 12, G.A. res. 217A (III), U.N. Doc A/810 at 71;International Convenant on Civiland Political Rights,16 December 1966 Article 17, General Assembly resolution 2200A (XXI). 104California Bankers Association vs. Shultz, 416 U.S. 21 (1974); US vs. Miller, 425 U. S. 435, 442 (1976).





C. I N A RGUENDO , NO POSITIVE OBLIGATION EXISTS O N PART OF THE STATE TO

R ESPECT THE R IGHT I N LIGHT OF THE GREATER I NTERESTS OF THE SOCIETY.

States at time have a positive obligation to take steps to respect the rights of an

individual 105.In order to determine whether or not a positive obligation exists the

state must have regard to whether a fair balance has been struck between the general

interest of the community and the interests of the individual.106The positive

obligation does not exist when the information called for is necessary in the greater

interest of the society.107 Further States have a level of appreciation to decide what

interference would be necessary in the interest of the society and to draw a fair

balance between the relevant conflicting private and public interests.108 The

information required here is necessary for tax evasion investigation.109 As reiterated

earlier tax evasion is a public order crime which has profound impact on the

operations of the society and the ability of people to function efficiently. Thus there

exists no positive obligation on part of the state to respect the individual right in the

greater interests of the society.

2.3.2. Stage Two of the Determination process

Stage two has two further steps 110 which are 1-Has there been an interference with the

Article right 2- If so a) - is it in accordance with law111 B)-does it pursue a legitimate

aim112 C)-is it necessary in a democratic society113.

105X & Y v. the Netherlands, Application No. 8978/80, European Court of Human Rights, (ser. A ,No 091),¶27-¶ 33( 163th December 1983).

106Gaskin vs. The United Kingdom, European Application No. 10454/83, European Court of Human Rights,(ser. A ,No 160) ,¶42 (7th July 1989).

107General Comment No 16,Human Rights Committee; Peck v. United Kingdom, Application No.

44647/98 European Court of Human Rights, (ser. A) ,¶78(2003). 108Klass & Others v. Germany(Application No. 5029/71), European Court of Human Rights(Series A No 28), ¶21(6th September 1978); Crèmieux v. France(Application No.11471/85) European Court of HumanRights(Series A No 256B), ¶ 38(25th February 1993).

109[Jean-Pierre],supra note 78.

110ECHR, Article 8 ; [URSULA K ILKELLY], supra note 97 at p .11-12.

111General Comment 16,¶4,Human Right Committee.

112Toonen v Australia ,UN Doc CCPR/C/50/D/488/1992.§ 6.10(4 April 1994).

113Dudgeon v. United Kingdom , Application No. 7525/76,European Court of Human Rights, (Series A, No. 45) ¶53(23 September 1981).





A. I N ARGUENDO, IF THE R IGHT I N QUESTION IS PROTECTED THERE IS NO

I NTERFERENCE WITH THE R IGHT.

As earlier stated right to privacy would comprise of freedom from unwarranted and

unreasonable intrusion into activities that the society recognizes as belonging to the

sphere of individual autonomy or inner circle of private life while at the same time

also comprising to a certain degree the right to establish and develop relationships

with other human beings and the right to be protected from interference in other

aspects of personal life such as family, home and correspondence. Thus it is pleaded

that in the current case information with regards to identity of people holding bank

accounts in Amiti was requested by Darshini and such information only dealing

with the identity of people in no way would encroach upon activities belong to the

sphere of individual autonomy or interfere with a person’s right to establish and

develop relations with other human beings or interfere with his family life, home or

his correspondence.

B. ASSUMING WITHOUT CONCEDING IF THERE HAS BEEN I NTERFERENCE WITH THE

R IGHT THE I NTERFERENCE IS JUSTIFIED.

a. The information requested for is in accordance with law

To ascertain whether or not the interference complained of is in accordance with

law the interference must have a legal basis.114 Further In order to satisfy the

legality requirement a person’s reasonable expectations as to privacy may be a

significant.115 In the case at hand information requested for by Darshini has a

legal basis as it is based in the Vipulian Economic Union Charter as reiterated

earlier and is thus in accordance with law. Also when it comes to records held by

bank an individual can have no expectation of privacy.116 Therefore it is

submitted that the information requested by Darshini is in accordance with law

b. The Information requested for pursues a legitimate aim

As mentioned earlier the information requested for is necessary for investigation

of tax evasion.117 The information requested for pursues a legitimate aim if it is

114[URSULA K ILKELLY], supra note 97 at p .25;[ ICCPR Commentary], supra note 95 at p .482.

115 P.G. & J.H. v. the United Kingdom,(Application No. 44787/98), European Court of Human Rights) (Series A No.2001-IX), §56(25th September 2001).

116

US vs. Miller, 425 U. S. 435, 442 (1976). 117[Jean-Pierre],supra note 78.





required for the interests of the economic well being of the country, prevention of

crime, protection of morals etc. 118 Tax evasion is economically costly119 as tax

evasion creates significant deadweight losses for the economy by distorting trade

and investment flows such that these distortions reduce economic efficiency and

impede growth.120Further Tax evasion is widely recognized as public order

crime.121 Also tax evasion is a moral turpitude122 which refers to conduct that is

considered contrary to community standards of justice, honesty or good

moral123.Thus the information requested for pursues a legitimate aim as it is

required for the interests of the economic well being of the country, prevention of

crime and protection of morals

c. The information requested for is necessary in a democratic societyIn Interpretation of the clause “necessary in a democratic society” the meaning of

necessary in a democratic society is determined with reference to the balance

achieved between the rights through the application of the principle of

proportionality.124 The principle of proportionality recognizes that human rights

are not absolute and that the exercise of an individual’s rights must always be

checked by the broader public interest.125 Further States have a margin of

appreciation to deem what interference would be necessary in the interest of the

society and to draw a fair balance between the relevant conflicting private and

118 ECHR, Article 8; Crèmieux v. France(Application No.11471/85) European Court of Human Rights(Series A No 256B), ¶ 35(25th February 1993).

119OECD, Forces Shaping Tax Policy, 63 OECD Economic Outlook 165, (June 1998).

120P Groenewegen , Distributional and Allocational Effects of Tax Avoidance,(Australian Tax ResearchFoundation, 1984), p 23.

121

R ONALD C. K EITH AND ZHIQIU LIN, NEW CRIME I N CHINA: PUBLIC ORDER A ND HUMAN R IGHTS(2006), p.33;K ATHLEEN MAGUIRE, SOURCEBOOK OF CRIMINAL JUSTICE STATISTICS (1995), p.693.

122US Department of State. 9 FAM 40.21(a) N2.3-2 Crimes Committed Against GovernmentalAuthority. Foreign Affairs Manual—Volume 9- Visas. http://www.state.gov/documents/organization/86942.pdf.Accessed September 5, 2001.

123MICHAEL IMBER & TYLL VAN GEEL, EDUCATION LAW (2010), p 476; WEST'S ENCYCLOPEDIA OF AMERICAN

LAW,VOLUME 7TH(2005),p. 116.

124Soering v. the United Kingdom , (Application No.14038/88) European Court of Human Rights(Series A No0161), ¶ 87(7 July 1989).

125 Id . at ¶ 87.





public interests.126 As shown earlier the information required here is necessary in

greater public interest considering that tax evasion is a public order crime and it

has profound impact on the operations of the society and the ability of people to

function efficiently and thus it is submitted the information requested here is

necessary in a democratic society.

2.4. ALTERNATIVELY AMITI IS REQUIRED TO PROVIDE INFORMATION TO DARSHINI IN

PURSUANCE OF THE DOUBLE TAX AVOIDANCE AGREEMENT.

Information may be exchanged between countries for the application of express provisions of

Double Tax Avoidance Agreements to the widest possible extent.127 The Double Tax

Avoidance Agreement between Darshini and Amiti is largely based on the OECD model 128

and allows information exchange with regard to matters under the convention

129

.There areallegations of violations of tax laws by Darshini based residents and through undeclared

maintained bank accounts in Amiti.130 With respect to incomes derived from employment131

or other means132 the country of the residence taxes the incomes. This principle finds its

origin in the OECD model convention as well as the UN Model Convention. 133 Further an

income being taxed only once is a principal of customary international law.134 Thus as the

agreement between the two countries in largely based on the OECD model a provision

contrary to this would be a large deviation. Also as this feature is a common provision of

other model conventions it is safe to assume that income being taxed in the country of

residence would also be present in this convention. Hence Darshini based residents who

126Klass & Others v. Germany(Application No. 5029/71), European Court of Human Rights(Series A No 28),¶ 21(6th September 1978); Crèmieux v. France(Application No.11471/85) European Court of HumanRights(Series A No 256B), ¶ 38(25th February 1993).

127OECD COMMITTEE O N FISCAL AFFAIRS ,OECD MODEL TAX CONVENTION O N I NCOME A ND CAPITAL A

COMMENTARY(2008),P. 348.

128

Compromis ¶4.129

Id at ¶4.

130Compromis ¶14.

131Article 15, OECD Model Tax Convention On Income And Capital.

132Article 21, OECD Model Tax Convention On Income And Capital; Article 21(3),UN Model Convention onDouble Taxation.

133Michael Lennard, The UN model Tax Convention As Compared With the OECD Model Tax Convention –

Current Points of Difference and Recent Developments, Asia-Pacific Tax Bulletin, p. 9,( January /February

2009).134R EUVEN S. AVI-YONAH, I NTERNATIONAL TAX AS I NTERNATIONAL LAW(2007), p.7





according to provisions of the Double Tax Avoidance Agreement are to be taxed in Darshini

have violated law and have undeclared income in Amiti based accounts. In light of this the

Darshini Government made a formal request to the Amiti Government seeking identities of

individual with bank accounts in Amiti because as stated earlier information with regard to

individuals holding banks accounts in Amiti is necessary for tax evasion investigation and

crackdown of tax evaders .135 Thus in order to ensure application of the provisions of the

DTAA such that individuals do not escape paying taxes in the country of residence Amiti has

to provide information to Darshini.

2.5. AMITI CANNOT INVOKE PROVISIONS OF ITS B ANKING R EGULATION A ND S ECRECY ACT

AS A JUSTIFICATION FOR NOT EXCHANGING INFORMATION WITH DARSHINI.

As shown earlier Amiti has a treaty obligation under the Vipulian Economic Union Charter toexchange information with Darshini. This information exchange was refused by Amiti on the

grounds that it contravened with its Banking Regulation and Secrecy Act ,a domestic

legislation136. There is ample judicial and international arbitral authority for the rule that a

state cannot rely upon its municipal law i.e. domestic legislation to avoid legal obligations

arising from treaties and other sources of international law.137 Further even the VCLT which

was earlier shown as custom138 reiterates this rule.139 Thus it is humbly submitted that Amiti

cannot invoke provisions of its Banking Regulation and Secrecy Act as a justification for not

exchanging information with Darshini.

135[Jean-Pierre],supra note 78.

136Compromis ¶6.

137DAVID HARRIS, CASES AND MATERIALS ON I NTERNATIONAL LAW (2011) ,p.-63.

138[Opinion of Law Officer],supra note 73 at p.5.

139VCLT, Article 27.



PPRRAAYYEERR

In light of the questions presented, arguments advanced and authorities cited, the agent

for the Respondent State most humbly and respectfully pray before this hon’ble Court,

that it may be pleased to adjudge and declare that the

1. The Respondent State is not responsible for any international wrong.

2. The Respondent State is entitled to invalidate the Double Tax Avoidance

Agreement.

3. The Respondent State is precluded by the circumstance of ‘necessity’.

4. The Respondent State has not imposed sanctions against the State of Amiti, and is

also not responsible for use of force and intervention in the affairs of the

Applicant State.

5. The Applicant State is required to disclose the requested information the

provisions of the Vipulian Charter.

6. The Applicant State is also required to disclose the requested information as under

the DTAA.

7. The Applicant State is not stopped from disclosing said information in light of the

alleged ‘right to privacy’.

8. The Applicant State has acted in violation of its international obligations by

refusing to disclose the required information.

The Respondent State additionally prays that the Court may make any such order as it

may deem fit in terms of equity, justice and due conscience. And for this act of kindness

the Respondent State shall as duty bound ever humbly pray.

(Respectfully Submitted)

- Agents on behalf of the Respondent State.