Abstract

There can be little doubt that an international tribunal would regard itself as concluded by an interpretation under Article XVIII. The interpretation is binding under treaty law, and no action is required, such as may be necessary under some systems of national law, to give the interpretation the force of law in international law.

There can be little doubt that an international tribunal would regard itself as concluded by an interpretation under Article XVIII. The interpretation is binding under treaty law, and no action is required, such as may be necessary under some systems of national law, to give the interpretation the force of law in international law.

An international tribunal may have before it a case between members of the Fund in which an issue is raised involving the interpretation of some provision of the Fund Agreement which has not been interpreted by the Fund under Article XVIII. Can the international tribunal make its own interpretation or must the parties be remitted to the procedure of Article XVIII? It has been suggested above that if a case of this kind occurs between private parties in a national tribunal, the court cannot forbear from making its own interpretation if the provision to be interpreted has been incorporated in the local law applied by the court. A national tribunal cannot elect to ignore part of its local law. It is arguable that a principle similar to the one stated in the preceding sentence may provide the answer to the question formulated above with respect to an international tribunal. Such a tribunal must apply the whole of international law, and the charter of the Fund is part of that body of law. Article XVIII, this argument would continue, is mandatory in its language. “Any question of interpretation of the provisions of this Agreement arising between … any members of the Fund shall be submitted to the Executive Directors for their decision.” An international tribunal could thus hold that the members involved in the proceeding before it are bound to take up the issue under Article XVIII.

This problem has been discussed before the International Court of Justice, although not decided by that court, in the Case Concerning Rights of Nationals of the United States of America in Morocco (France v. United States of America).77 The case had been instituted by France as the result of a lengthy dispute with the United States in which the latter had contended that certain economic and extraterritorial rights in Morocco which it claimed by treaty had been ignored by France. One of these alleged rights was a right to the maintenance of a regime of free trade without restrictions on imports. The United States argued that a Decree of December 30, 1948, issued by the Resident General of the French Republic in Morocco and reimposing the control of imports not requiring an official allocation of exchange, violated this treaty right.

Much of the argument of France in the International Court was based upon the Fund’s Articles of Agreement. France sought to establish that the Articles recognized or authorized the right of Morocco to impose the control in question. One of the provisions to which France referred was Article VII, Section 3, which authorizes a member to control exchange operations in a currency after the Fund has made a formal declaration of the scarcity of that currency.78 France argued that the Fund’s decision of April 5, 1948, announcing that members participating in the European Recovery Program should request the purchase of U.S. dollars from the Fund only in exceptional or unforeseen cases,79 was tantamount to a declaration of scarcity under Article VII, Section 3. The United States disagreed with this construction of the Fund’s decision of April 5, 1948.

How was this particular issue to be settled? In oral argument the Agent of the United States expressed his country’s views as follows:

“Now, the discussion here, in this dispute, of the interpretation of Articles of Agreement of the Fund, of what the Directors meant when they made such a decision, shows the wisdom of the requirement of the Articles of Agreement of the Fund itself, which imposes on the French Government, as the party which is attempting to justify action on the basis of these Articles of Agreement, the burden of proceeding in accordance with these Articles to obtain an authoritative interpretation. In this connection, the attention of the Court is respectfully drawn to Article XVIII, which requires that: ‘Any question of interpretation of the provisions of this Agreement arising … between any members of the Fund shall be submitted to the Executive Directors for their decision.’ Now, this provision is mandatory on members. A right of appeal to the Board of Governors is provided. There has been no compliance with this requirement. The suggestion that the treaty rights of the United States have been abrogated by action taken under the Articles of Agreement of the International Monetary Fund should therefore be rejected.”80

To this, France replied that the Fund was the only international authority competent to decide whether an exchange control measure was consistent with its Articles. The Fund had been informed of the measure in question, but had not objected to it. It was not for the Moroccan authorities to seek an interpretation under Article XVIII. The United States should have done this, because the United States was the complaining party.81

The International Court did not decide this or any other question concerning the Fund’s charter. It was able to settle the question of the legality of the Decree of December 30, 1948 on grounds unrelated to the Fund’s Articles. It is, however, striking that the parties appear to have agreed that issues between them as to the interpretation of the Fund’s Articles should be the subject of interpretation under Article XVIII. They differed only as to the party upon which the obligation rested in this case to seek such an interpretation.

Under Article 34 (2) of the Statute of the International Court of Justice, a public international organization may be called on by the Court to present information relevant to a case or may present such information on its own initiative. Under Article 34 (3) a public international organization is to be notified by the Registrar whenever the construction of its charter or of an international convention adopted under it is in question, and the organization is to receive copies of all written proceedings.82 These provisions have been supplemented by rules, and one authority on the Court has commented that whereas Article 34 (3) seems to impose a specific duty on the Registrar to notify the public international organization concerned, the Rules of the Court appear to reserve some discretion to the Court or to the President to instruct the Registrar whether or not he is to act.83 The same authority has also observed that “In the U.S. Nationals in Morocco case the Articles of Agreement of the International Monetary Fund (Bretton Woods Agreement) were cited in the application and in the pleadings, but no notification was sent to that Specialized Agency, nor any request for information. The Court did not find it necessary to discuss these contentions in its judgment.”84

Other legal provisions have a bearing on the relations of the Fund to the International Court of Justice. The Fund has entered into an agreement with the United Nations pursuant to Article 63 of the Charter of the United Nations and Article X of the Fund’s Articles. The agreement, which came into force on November 15, 1947, is intended to define the terms on which the two organizations shall be brought into relationship. Under Article VIII of the agreement:

“The General Assembly of the United Nations hereby authorizes the Fund to request advisory opinions of the International Court of Justice on any legal questions arising within the scope of the Fund’s activities other than questions relating to the relationship between the Fund and the United Nations or any specialized agency. Whenever the Fund shall request the Court for an advisory opinion, the Fund will inform the Economic and Social Council of the request.”

The Fund has not requested an advisory opinion of the Court.

On November 21, 1947, the United Nations General Assembly adopted the Convention on the Privileges and Immunities of the Specialized Agencies for the purpose of unifying as far as possible the privileges and immunities enjoyed by the United Nations and by the various specialized agencies. The Executive Directors of the Fund accepted the standard clauses of the Convention and approved Annex V with respect to the Fund, which became effective on May 9, 1949. By the end of February 1967, 42 members had accepted the Convention with respect to the Fund.

Section 32 of the Convention declares that all differences arising out of the interpretation or application of the Convention shall be referred to the International Court of Justice unless the parties agree to have recourse to another mode of settlement. If a difference arises between a specialized agency and a member, a request shall be made for an advisory opinion on any legal question involved, in accordance with Article 96 of the Charter, Article 65 of the Statute of the Court, and the agreement between the United Nations and the specialized agency; and the opinion given by the Court shall be accepted as decisive by the parties.

Annex V declares that the Convention does not modify or amend or require the modification or amendment of the Articles of Agreement or impair the privileges and immunities conferred by the Articles or by the law of member countries. In addition,

“Section 32 of the standard clauses shall only apply to differences arising out of the interpretation or application of privileges and immunities which are derived by the Fund solely from this Convention and are not included in those which it can claim under its Articles of Agreement or otherwise.”

One effect of this provision is to ensure that questions of interpretation that fall within the purview of Article XVIII remain subject to that provision and not Section 32 of the Convention. No proceedings involving the Fund have been initiated under Section 32.