CYIL vol. 14 (2023)

CYIL 14 (2023) THE MONETARY GOLD PRINCIPLE decision in the case. In other words, they are a subsequent consequence, not a precondition, of a decision on the merits. A similar approach of what we may call a narrow understanding 24 (i.e., of not including subsequent effects upon the third state’s legal interests as belonging to subject-matter of the claim either) of the Monetary Gold principle, was recently adopted by the Permanent Court of Arbitration (PCA) in the South China Sea award as well. 25 Thus, the arbitrators rejected the notion that possible implications (not time wisely preceding legal questions) upon a third state would form the very subject-matter of the claim at hand. 26 The ICJ and the PCA thus upheld the Monetary Gold principle and yet refused to apply it. Instead, they evolved an exception to it to the disagreement of many dissenting judges. Although the Certain Phosphates proceedings was halted anyway, it occurred for other reasons than for application of the Monetary Gold principle. And later, the reasoning of the Court suffered from criticisms, stating that considering how the Monetary Gold principle was formed by the Court in 1950s, this “sticking to” the narrow understanding of the Monetary gold in its “temporally preceding” form, seems way too strict of an interpretation. Some of the criticisms are based on the fact that the ICJ based the Monetary Gold principle upon the consensual nature of exercise of jurisdiction. And if the Court is prevented from exercising its jurisdiction simply due to the fact that a third state’s legal interests form the very subject matter of the case, it might be legitimately expected that it does not matter whether the finding upon them precedes a finding upon the merits between the parties or whether it is a consequence. 27 Thus, the criticisms are mostly directed upon the temporality solely. It is true that none of the reasons in the Statute that the Court used as a basis to formulate the Monetary Gold principle goes in the narrow direction indicated in Certain Phosphates judgment. The subject-matter of the case is formed simply by legal interests of a party to the dispute as much as of third state(s). And at the same time, the third state’s legal interests are affected so strongly that to claim they are not forming the very subject-matter of the case (just because of the temporal condition), may be seen as an understatement. It does not matter whether as a precondition or as a consequence (or as Australia put in in its memorial, that the finding would be simultaneously determining the absent third-parties’ responsibility), the rights and obligations of the third state are the subject-matter of the case because they (maybe implicitly but certainly) directly influence the position of the third state. The temporal nature should not be that relevant. Let’s call this “the wider understanding” of the Monetary Gold 24 Judge Skubiszewski talked about the ICJ’s interpretation as being “not broad” in Dissenting opinion of Judge Skubiszewski to ICJ, East Timor (Portugal v. Australia), Judgment (30 June 1995), ICJ Reports 1995, para. 62. 25 PCA, South China Sea Arbitration (Republic of Philippines v. People’s Republic of China), 2013-19, Award (12 July 2016), paras. 640–641. 26 Ibid , paras. 635 and 640. 27 Same conclusion was implicitly found by Judge Ago in his Dissenting opinion to ICJ, Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, Judgment (26 June 1992), ICJ Reports 1992. Judge Schwebel interpreted the previous case law in direction of the Australian objection as well and also posed the most important question differently: “ may the Court proceed to exercise jurisdiction over that State even though its determination of the liability of that State may or will entail the effective determination of the liability of another? ” Dissenting opinion of Judge Schwebel to ICJ, Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, Judgment (26 June 1992), ICJ Reports 1992, p. 93. And President Jennigs saw the potential of simultaneous (not preceding) assessment of third party’s legal interests – Dissenting opinion of President Sir Robert Jennigs to ICJ, Certain Phosphate Lands in Nauru (Nauru v. Australia), Preliminary Objections, Judgment (26 June 1992), ICJ Reports 1992.

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